How Federal Agencies Are Supporting Employee Ownership

uh we're going to move into our last panel of the day so I'd like to welcome our panelists uh to the stage um uh so as our momentum for employe ownership has grown so has the involvement of government agencies you've been hearing some words about that um so you can be first come on um there Lisa's here so we're we're coming um uh so we're going to be talking with some agencies today some are relatively new to this work some agencies have been in this work for a long time um so let's see I uh I'm missing one all right there we go um so without uh further Ado so let's see now any I'm gonna say name all right for this panel I have Alex jaus Special Assistant to the president for economic development and Industrial strategy National Economic Council at the White House house next to Alex is Leroy Garcia Chief of Staff rural business Cooperative service US Department of Agriculture okay next to Leroy is uh is Lisa L was Lisa where'd she go uh Lisa Gomez assistant secretary for employee benefit Security Administration at the US Department of Labor and at the very end there uh we have David Brown uh director of policy Office of the administrator us small business administration sh um so um so as I mentioned the momentum for employee ownership has has grown you all sort of have different roles to play and so just to kind of get us started I'm hoping each of you can briefly introduce yourself talk about your role and what has drawn you to work work on employee ownership um and I think I'll just like uh well I'll just go in the order that I wrote in the in the guide so I'm not going to catch anybody off guard So Lisa I'm going to start with you sure uh wasn't sure if it was on or not hi everyone um I'm Lisa Gomez and I am the assistant Secretary of the employee benefit Security Administration within the Department of Labor and um we as we'll discuss more today are are have been charged at the Department of Labor and I'm really excited about this new opportunity to be um implementing certain provisions of the work act um as uh Senator Sanders mentioned and as you've um heard today and um with respect to the promotion and education about um different worker ownership models um for both employees and employers and also as was mentioned to um promulgate formal Guidance with respect to the valuation of employer stock so we're really excited about those things and happy to be here today oh and and Alex um hi there Alex hakz I'm Special Assistant of the president for economic development and Industrial strategy at the White House National Economic Council uh one day they will give us shorter titles uh we can get through these quicker um but uh what drew me to uh to worker ownership as an issue uh and bringing it over to the the NEC in the administration is um I used to work for Senator Sanders uh and uh hard to uh to spend some time with him um without you know hearing his personal uh passion for the issue and without being coerced into working on it in some way I covered economic policy and labor policy um for him on the 2020 presidential campaign as well as on the the budget committee um worked on the work act and um employee ownership bank and a number of other initiatives and proposals um and was you know thrilled as we work through the um you know what what the artist formerly known as the build back better Act and the many iterations and names that that went through it on some of the um initiatives and proposals we were able to put forward not all of them um succeeded but uh really getting you know the work act through and insecure and in the the appro um uh or the Omnibus at the the end of the year was you know really a a watershed for um those of us who've been been working on it for for quite some time now and so very excited over here at the NEC too uh to help work on implementing as well as coordinate some of the other uh activities we have in the employee and worker ownership space great thank you David thank you maren uh thank you Aspen for putting this all together um it's an honor to be here on behalf of administrator Guzman talk about the sba's role in promoting worker ownership um I'm director of policy and planning at SBA uh so my job is to work on whatever the ad administrator asked me to work on uh and uh that includes our Capital programs in many cases also Contracting and um counseling programs that we offer to small businesses what motivated me uh in this policy area it for me it's it's h starts as a personal issue um I grew up in Atlanta um my Aunt Marcy I was very close to she was an entrepreneurial woman um she had her own business uh making sandwiches and delivering them to um hair salon blonds and then moved out of the city to Peach Tree City Georgia and um couldn't maintain her business anymore but got a job working at Publix grocery store uh Publix is the largest ESOP in the US I think it still is in any case um she had so much pride in that job working at Publix one because she could you know exercise her creativity and choosing recipes and making them for people to sample in the store but also so because she owned a part of the business and um she had great pride in that job that she worked in the end of her career um for over 10 years and that really stuck with me um later in life I was working at a think tank Third Way considered a center left Think Tank was very excited about the buzz around esops and employer ownership and got to work with Professor bloy on a paper that uh he authored for third way and that brings me to another point which is the appeal of this uh area across the political Spectrum Senator Sanders is a champion Senator left think tank is and when I worked on the hill there was plenty of bipartisan uh legislation being drafted around the idea as well uh finally I'll just mention one other idea and this isn't anything new or in you know additional to what Senator Sanders had to say at at the opening but competition um uh you know President Biden administrator Guzman uh reflects all the time the importance of not allowing too much consolidation to occur in any industry uh and as we have small business owners across the country thinking about how they're going to exit uh we want to prevent that consolidation allow them to sell keep businesses independent local uh locally owned and controlled and what better way to do that through than through employee ownership great thank you Leroy great thank you good afternoon as mentioned my name is Leroy Garcia and I have the proud honor of serving as the chief of staff for real business Cooperative Services uh the administrator administrator Dirks and Lan sends her regrets that she cannot join us but she's traveling so you're stuck with me for today a lifelong colorin a combat Marine who recently serving at the Pentagon as an appointee over at the department of Navy so I'm newly minted over at USDA about 55 plus days in on working days so I'm not a subject matter I've left my cards and some some literature that that we want to be able to share with you but I want to help share not only the Cooperative side but the real business Co the real business side also employee ownership is a growing improving pathway that helps us build wealth and have dignity especially for our workers in their workplace in a more economical way and at USDA Rural Development we know that a stronger Community is rooting in its people uh through loans through grants through Partnerships with lenders we provide these tools and resources for real family businesses for communities so that they can prosper not only for today but for the future and just to give you a perspective at rural business Cooperative services and RD we have three different divisions right we have rural business Cooperative Services Rural Housing Services and Rural Utility Services administering over 70 types of programs um those 70 types of programs annually through those loans and grants are an investment of about $30 billion and that puts our portfolio currently at over $230 billion of investment and so I share that because at rural business Cooperative Services we work with the public and the private Partners uh to connect rural residents and valuable resources by supporting businesses and helping Rural America Prosper we know that if Rural America is prospering America is prospering um and so look forward to talking to you a little bit more today as we as we uncover this great thank you so now I'm going to sort of dig in a little bit more in terms of the fit of of um employee ownership with the the agencies where you are and Alex I'm going to start with you um just if you can sort of talk about the bigger picture uh with the NEC and how you see um employee ownership as part of sort of the broader economic agenda that you're trying to see go forward yep absolutely um so when I came over to the NEC and started uh checking around to see who's working on uh on employee ownership uh it didn't quite fit in any of our neatly in any of our verticals right it's partially a small business issue it's a competition issue uh it's an industrial policy issue it's a labor issue um you know it's a tax and and retirement issue um and no one kind of had each piece of it together um so we we spent some time thinking how do uh how do we put together cohesive narrative about why uh worker ownership is uh fits with the president's broader economic agenda and found that um you know it it fits quite well and and Senator Sanders laid out uh you know some of the reasons including you know increased productivity and better you know Dignity of work and a of um the the benefits for for workers which you know on the labor side the president strongly supports um but you know kind of first and foremost our our boss director um Dr L Brainard um told us to come and make the the rigorous economic case and so uh as part of the the president's broader you know industrial policy in particular um you know new major Investments catalyzed by the infrastructure law the chips and science act the inflation reduction act we see these giant Fabs um set up for semiconductors by tsmc and massive battery plants um but what you know often doesn't get told is that you know 90% of manufacturing firms in this country have 50 workers or less uh 20% are uh are set to retire or you know owners representing 20% of that Workforce set to retire over the next uh you know decade um I know I understand from from previous remarks um successorship has been uh a topic that's been covered quite a bit today uh we think that that this is a perfect tool to be able to uh fit you know some of the the priorities that we have for our small midsize manufacturing base which really uh provides the the backbone for for our industrial policy here in in the US it's this uh supplier Network Parts manufacturers um you know small small businesses um that are setting up these ecosystems around these major Investments that are really going to uh make or break the uh the big semiconductor VBS and the battery plants and and all the rest as well uh so from an industrial perspective we think that employee ownership over represented uh at at in by esops um is a is a perfect tool and and a number of organizations working on the ground um to transition uh some of these these companies that are uh mom and pop have been family-owned and employ you know 00 people uh that alternatively are just going to shut down or be bought largely uh and primarily by by overseas competitors or private Equity who aren't going to share the same um you know industrial policy and and um priorities that that we do uh more broadly you know the president has centered workers uh in every part of his agenda and and this is this is no different the opportunity to build work to have dignity the president always says a job is about more than a paycheck it's about dignity um I think in no policy is that you know more personified than uh than owning uh you know a share and a stake in the in the business where you work having that that voice and and the seat at the table um obviously a priority for the president's uh uh for for collective bargaining and unionization and now you know fitting in uh I think neatly in that in that bucket is a is a priority for uh advancing and facilitating uh worker ownership of of the businesses um and then lastly the point on on competition right the um the ability to have a thriving and dynamic ecosystem and and the ability to uh preserve some of these economic anchors uh in communities where they've lasted for so long uh you know small businesses mom and pop shops places that have served as as institutional and Community uh anchors for for Generations um the ability to preserve that structure and and that institution without um you know as as Senator Sanders said getting snapped up by um by a financial firm who who wants to take the assets and and strip them and sell them off uh we think it's a critical tool for be able to be able to preserve uh competition in um in markets in in particular in markets that have been hollowed out for for so long or or snapped up by consolidation I think the the work that Rd and the the USDA is doing to promote uh dynamism in in rural markets in particular uh is a good case study there great thank you covered a lot of territory there um Lisa um you're the office you lead has a sort of a long history with employee ownership but you're also sort of absorbing some new uh areas of work so maybe you could talk a little bit about um the traditional role your office has played with employee ownership but also the the new role the office will be assuming as part of the work act and and how all of that fits with um Do's broader Mission sure thanks Morin um so traditionally um the employee benefit Security Administration uh EA within the Department of Labor our mission and our directive is to protect the um hard-earned retirement and health benefits of um America's workers and their families and people who are working um within private IND indry employment and So within that role prior to the work act coming in our um interaction and our relationship with esops was pretty limited because as you all um well know esops are a form of retirement plan um and as Retirement plans that are governed by orisa there are certain requirements under orisa that esops need to comply with um mainly uh or most prominently the uh the requirement to act um as fiduciaries and act in the sole and exclusive um interest of the participants and beneficiaries of these plans and so for um all of the time leading up to the work act which expanded our work in this area um our interaction was really limited to enforcement with respect to esops um that might not have been complying with these requirements um doing investigations and uh seeking correct action where necessary so we were really limited um and working really just in the enforcement space once uh secure 2.0 was enacted and the work Act was included as part of that law um we gained some additional roles um and roles that we think fit really well together um where we can incorporate the knowledge that we have about technical knowledge about esops and how they work um as well as the department broader goals with respect to workers empowering workers and working with employers um to help create good jobs um in implementing the other provisions of the work act that I mentioned briefly before um first of all to be educating and promoting worker ownership models whether they be esops worker co-ops uh trusts you know the various different options that are available out there and um working closely with the worker Co-op uh worker ownership Community to try to get additional information out there have people become educated um again both workers and employers so that they can know that these options are available to them how they work what types of questions um they can each be asking as they're going down this road and uh just to promote that and and bring awareness and also uh uh just the backing of the federal government as far as as having an agency that can work directly um with employers and employees that are looking to move forward with one of these models um towards that end we have been doing a lot of work over the past year or so that this has come um under our umbrella at the department um we have established um we were required under the work act to establish an employee ownership initiative um we did that by creating last uh June a division of employee ownership within our office of Outreach education and assistance um we established that at the end of June and have been working since then to meet with stakeholders um meet with uh just to be kind of learning and becoming a sponge with respect to all of the different information how we can be helpful what um everyone thinks is needed in the community to promote and educate about these different types of um of options and um We are continuing to work to staff up that division to get information out and working on Publications and a page on our website and um just thinking of different ways that we can be most helpful um with respect to that we are also working um as I mentioned before and as was mentioned prior to to uh to my remarks on the formal guidance regarding valuation of employer stock um with respect to esops we had previously announced and we're continuing to go on in this uh Road of providing that formal guidance in the form of notice and comment Ru making um we are working very hard on getting out a draft rule uh or a proposed rule with respect to that um it does as some of you may know I am new to federal government I have not worked I worked 30 years in private practice prior to coming here and prior to coming here I would have said why does it take so long to put out one of these roles you know um and you know the ESOP Association already wrot wrote it for you I mean what's taking so long but it takes a lot longer than anybody would would um know for for it to take to do these things and we are really trying to um work at incorporating everything that we have heard and we have learned not only in the enforcement Arena but also from all of the different stakeholders um that we've talked to along the way and obviously once we put out that role it will be a proposed role for notice and uh further comments and we look forward to to working on that and and hearing from everyone um in that regard um the third piece of the work act that is within the Department of Labor is as was referenced before um the grants that will be given once um there is an appropriation there we're obviously not at that point yet but we will be working with other partners within the Department of Labor um once that money is hopefully appropriated to be able to work on giving those grants um so we are really excited about that as far as the other uh goals of the Department of Labor um I think that and we think at the department again we're very excited about this and it fits squarely within a lot of the goals of the department um the department is focused on investing in America's workers and partnering with employers um in order and unions and government agencies in order to provide um information and education support um and collaboration so that we can improve job quality and um access to good jobs and uh worker ownership just fits so well within those goals um though I do think that it is something that the department has not focused on um to date but as we've been talking about it um everyone realizes how much it aligns with everything we're doing um and the Department's uh goals are really to create good jobs which um we think that worker ownership again uh fits right within there um empowering workers and strengthening their voices which I think there could be no greater way to empower workers and promote worker voice than with um so many of these different work worker ownership models and so we're excited about that um and then also the enforcement of workplace protections and um epsa has had a role with respect to that and we will continue to have a role and um as we work uh forward on this uh on this Ru making I think that you know that'll be a huge step for everyone involved to uh to have more clarity and uh to be able to have more information on how to set up um and Implement these uh these types of entities so so we're really excited about it and um really happy to be moving forward great thank you so much for sharing all of that um Leroy let me let me come to you uh the rural business Cooperative Service uh has a long history in Cooperative development particularly in rural areas as you were laying out earlier um so maybe you can just tell us a little bit more about uh the goals of that work um how you see it playing out in rural communities and and how um both both you know all kinds of employee ownership and particularly co-ops um fit within that sure great question well um first some context I think it's important to to be reminded that in 1926 The Cooperative Market act um charged the division of the United States Department of Agriculture with acquiring analyzing and disseminating statistical information on agricultural Cooperative services and associations and think about that we're we're now approaching in a few years a 100 years since that act uh a lot of great work has got into that and that act that uh agricultural cooperatives are among the oldest businesses in the United States if not the world in the 1930s electric cooperatives were formed to provide services uh to the 90% of rural residents who lacked electricity uh in 2022 data from the national Rural Electric Cooperative Association shows that cooperatives now provide Power to 56% of the nation's landas and 92% of persistent poverty counties and so when you think about all the things that have been said today and I was thinking early about my my prior backgrounds in healthc care um to look at they talk about the different types of challenges with silver tsunamis in relations to healthcare not just from this perspective or ambulances and co-ops really being um it's it's really an exciting time to be at rbcs real business Cooperative Services that's really because we look at Rd business programs providing much needed investment to rural communities office obviously in partnership with private sector lenders and community- based organizations and and that happens in a in a number of different ways through uh loan guarantees um we work with them in direct loan process through grants through individual businesses through cooperatives um either if we're talking about Farmers or ranchers or public bodies or nonprofit corporations tribes um we're always willing and learning to explore all those different ways in which we can be of assistance and then on our Cooperative side our services both work to promote and support development of Cooperative businesses which often um for us you know as that market of agriculture products um and so we look at that through the electricity opportunities Broadband connectivity telephone services but as you know it's not even limited to that anymore and later as I continue to talk later we'll talk about some of the healthc Care excitement that's happening in in our different areas and specifically in home healthcare Arenas among other services great thank you um David as we've been hearing a lot of employee own companies are small businesses so um maybe you can talk a little bit about how employee ownership is sit Ed within the small business administration and and how the small business administration sort of can support that work absolutely thank you uh I'll touch on a few of our programs at SBA I'll start with uh sbic the small business Investment Company program this a historic program uh started in 1958 uh that really helped create the Venture Capital industry in the United States um we have over 300 funds that SBA licenses supervises and in many cases provides leverage to in the form of a loan um and these funds are an encouraging um vehicle to support investment in employee owned businesses small employee owned businesses uh we are subject to to size standards um and especially in the cases of a conversion where an investment is necessary to create an ESOP or a cooperative and provide that injection of capital um we have um seen some encouraging Investments recently um One Fund uh under our uh sbic program uh has has created 3,000 employee owners just in the last few years uh through 13 different Investments and it it spans across sectors manufacturing business services retail food and beverage Industrials and Healthcare uh one of the companies is Ste manufacturer with 1500 employees um that uh completed an exit and returned $25,000 on average to each employee owner which was um exciting and looking on the horizon another fund uh was recently licensed by SBA cyprium in Ohio uh that fund um has ESOP as part of its um uh Target transaction type they have supported those transactions uh outside of the SBA uh fund program previously so we we are uh optimistic about um their uh Investments going forward uh we also have loan guarantee programs at SBA maybe what we're most uh known for uh the 7A loan 504 Loan program together do about 35 billion in uh lending support annually um and uh in 7A in particular we see a steady stream of lending uh to cooperatives um we've seen an uptick so in the last to complete fiscal years um approaching 70 loans uh it's about a 50% increase over the prior years uh esops we support and encourage ESOP loans to our that to our lenders we encourage them to do them they're not where we'd like them to be I think more on that in the next next segment but we see a handful of ESOP loans um in that program as well uh and then counseling uh similar to the activity at uh do um we are encouraging and working with our Resource Partners to educate small business owners on the opportunity of employee ownership um and that centers around our Small Business Development Center Network sdc's um uh you can find all across the country um and since 2020 SBA has had as part of the program requirement uh that sbds promote employee ownership um uh through cooperatives or qualified employee trusts or uh other worker ownership models so there's some exciting activity going on around the country within that program uh the association of Small Business Development Centers um uh has a um employee ownership and business transition interest group it's led by the Texas sbdc co-chaired by the Oregon sbdc um that they're meeting regularly and sharing resources uh across their network uh the sbdc Clearing House maintains resources that all of the sdc's uh can draw from and then there are a few kind of standout leaders among the centers the Northern California sbdc does regular trainings um that are accessible to the whole country on their website um uh on about a monthly basis um the Vermont sbdc Network Senator Sanders mentioned the center there our sbdc uh partners with the center quite closely um the New York spdc is quite active so we're we're happy about the growing um engagement of our resource partner Network and certainly looking to build upon that great thank you so much um now we're going to sort of dive into a little bit of the successes challenges Lessons Learned um Lisa I'm going to start with you this time you talked about you know sort of all the stakeholders you've been been listening to but it hasn't just been here in DC you've been traveling around the country touring employee-owned companies um maybe you can talk a little bit about what you're learning from that experience and how that's informing how you're thinking about the role you have moving forward um sure yeah thanks I'm going to have to have my uh the t-shirts made up for the uh Gomez ESOP tour um so that you could see where I'm coming next but um yeah know it's been it's been great we've had a lot of excitement from um folks on the hill and certainly within the uh worker ownership community and it's been wonderful we've been trying to do as much as we can to incorporate visits um when I'm out on the road for uh for whatever reason so um I had the pleasure of uh accompanying uh representative Courtney in Connecticut to visit an ESOP there um a few months ago um we were also with uh representative lansman in Ohio um visiting both the folks at Co-op ciny and learning a lot about their work and um an ESOP in the area as well um we have been working with you know uh different of different ESOP um organizations uh to find out places that we can go people we can visit and learn from and so uh we visited an ESOP in the Dallas Texas area um we also are going or I'm going next week to um Kansas City and to um Kansas Overland Park and uh we have a number of visits set up there so um and I am you know have no shame in uh chasing down Senator van Holland and Senator Sanders and asking for you know uh to accompany them uh to uh different locations um but it's not just to you know travel around um I have really it's been really wonderful to visit these different organizations and to learn that um really no no esup no worker Coop um is the same everyone is very different um based on industry based on location based on just the people who are there the workers who are there the employers who are there um just in the in the few that I have met so far either in person or um in speaking with them in Virtual calls um everyone is kind of looking for the same thing but in different ways um people may want different levels of of um interaction or uh you know involvement in decisions um people uh May the different models are just interesting to look at but one thing that I have found in every place that I've gone is you know that sense of um working towards a common goal and really feeling that they are a part of um that they are all working together and that the success of the company is Meaningful to them and um however they got there there have been different reasons for getting to that place sometimes it has been that there's been a retirement and uh the employees have come in to uh to own the company in a certain way sometimes it's been that the company um just has looked to go in the Direction and the owners who were there before continue to be there but are now working with the employees and so it's just uh it's been a very interesting experience a big learning experience for me and for um all the folks in Esa to find out more about how um how these different entities work and to just we're um very thankful for everyone who's been so generous in sharing their knowledge and their experiences and um just giving us different ways to really understand and look at what's out there but um um continuing to go on the the not the world tour but the Nationwide tour you can tackle the world next great thank you David I'm gonna come back to you um there's been some efforts you know you were alluding to a little bit sort of maybe not being happy with where your ESOP lenders are but I know there's been efforts to make SBA financing and Loans more accessible for employee-owned companies and for conversions so maybe you can just talk a little bit about that and sort of where those efforts are today absolutely thank you um I'll start with a rulle making uh that uh became effective uh at the end of last year that we are quite um optimistic about across the board and supporting small businesses and filling Capital gaps for underserved small business owners uh rural minority owned businesses um and we think there's promise for um employee owned businesses as well so uh the rule is called the affiliation lending criteria rule um became effective last year one of the knocks historically on SBA Loans they're too complicated okay you get the um uh you get a standard uh interest rate which is better than what you would get um outside SBA lending there's rules around fees you get the guarantee which Dr risks uh the loan for the lender and you get a long maturity those are all great things but there are a lot of kind of rules that that go along with it um so we endeavored to uh under administrator Guzman simplify um as best as possible underneath the existing statute um one of those simplifications is around the affiliation rule when you look at well who really owns this business how many owners are there so you can decide is this truly a small business or not um it was becoming quite cumbersome for a lot of businesses to go through that affiliation test when you know on paper is quite clear in terms of the size of the business the amount of Revenue this is a small business um to dissect the different affiliations that you might have by control so we're hoping that that simplification of our affiliation test means that they a greater variety of ownership structures where you have more owners in a business including worker owners that can uh more simply get through that uh eligibility process for SBA Loans another provision in that room making specific to employee ownership is um around partial buyout previously if you're going to use an SBA loan to acquire a business uh you needed to acquire a controlling stake um and that's not always the route that a business is looking to go if they're looking to convert or move towards employee ownership they want to sell part of the business to a group of workers uh give them start bringing uh up their equity share then they should be able to use an SBA loan to do that too so we now are all partial bu out in the sba7a Loan program um and are are quite happy about that change um you know looking forward there are so many other things we can do um I especially appreciated Senator Sanders comment about Appropriations to support authorization so uh double click on that comment um uh but you know I think there are a couple of pieces of legislation to point to one that had the U you know support of the administration uh build back better act as Alex mentioned uh there was a small business title um initially a version that passed the house small business committee had $25 billion it would have really been a you know historic um uh change in the role of SBA um including a uh Cooperative lending uh program that initially was funded I believe at about half a billion dollars which really would have been transformative think about the size of SBA it's about a billion dollar a year agency so it would have been a major program in investment um it was exciting to work on that legislation I think it's there you know for maybe a future Congress to come along and and take back up um I'll point to something a little more affordable also um as a possibility and that's the idea of uh SBA direct lending um SBA has made Direct Loans to small businesses to homeowners um through most of our history through our disaster program um if there's a disaster declaration uh if you're a homeowner with uninsured losses or a business owner affected by that natural disaster you can get a low interest loan long-term loan from SBA um uh with generous terms um it's also authorized in the small business act for SBA to make Direct General business loans you're just looking to grow your business um the agency got away from that um you know over the 80s and 90s it's still a charge that that we have in our statute um and that administrator Guzman believes we should restore uh as part of filling Market gaps where uh private Market lenders SBA guaranteed lenders aren't sort of meeting the needs of the market um and so that's a proposal in the president's budget this year it was also in the build back better act but um uh there is a proposal in the president's budget to tweak a few things in the small business act does not require appropriation for SBA to begin making Direct General business loans again um to fulfill that charge and fill gaps and I think you know in and this is an example um you know employee ownership is not specifically called out in that proposal but it's an example of a market Gap that could be filled if SBA had a greater role um in in uh uh directly influencing small business lending great thank you so much um Leroy Let's uh come back to you and we're going to take a a deeper dive into the rural business Cooperative service and I wanted you to talk uh specific specifically about initiatives uh being implemented to support worker own cooperatives and you and in particular you mentioned earlier so I'm hoping maybe you can give us an example but you mentioned care businesses and I think it's important to remember that employee ownership isn't just for manufacturing or construction or that's you know which we've been talking about a lot today but but care businesses are also important so maybe you can give us an example of a of work our own Cooperative sure great I'm happy to um let me first start off with with how USDA rule development is helping support employee uh ownership uh and that comes in a couple of different ways and I do want to touch on the healthc care piece of that after but but I one that we specifically look forward to helping is in technical assistance ta I mean Cooperative programs we provide a lot of lot of support for worker cooperatives through technical assistance whether or not that's in person at a conference through video conference calls um through a number of different Publications we address Cooperative operations governance uh funding ecosystem development and so we we have a TA is very important important in our Arena number two um Cooperative programs and I'm going to Rattle out a couple of these they may or may not apply to you you might be thinking about them but this is one of the areas where I want to best serve as AA on ensuring that our agency can help support you um business and industry loan guarantee the rural energy for America the reap program value added producer Grant uh the socially disadvantaged group Grant rural Cooperative development Grant intermediate relending program the rural economic development loan and grant program the rural uh micro entrepreneur assistance program and the rural Business Development Grant and so we have a number of different experts who can help walk you through that we have a great website and I I would say that because I've seen some of my my other sister agencies websites and I think ours is pretty good and there a lot of good videos that can help you navigate that but if you ever need our support that's what we're here for number three we provide Outreach um and Cooperative education for both for federal for state for local and for private Partners uh through one of the ways that we do that is through our inter agency working group on Cooperative development and just a couple of highlights on that kind of work that they're doing uh they have been that committee has been meeting on converging um converting businesses to cooperatives that's one of the standing meetings they have a meeting that regularly meets on focus on creating Equitable cooperative ecosystems uh and then we also work with our with our partners right within the federal uh agencies and one of them is of course the Department of Labor with information on the worker cooperatives as they stand up and work to the address their division of employment ownership uh through that work act so a lot of great opportunities and examples that that USDA and rbcs has um that we're excited to share with you great thank you and just a warning to the audience that we're coming to you soon so be ready with your questions um but to close out this round Alex let's come to you and talk a little bit about how um how the NEC is thinking about aligning employee ownership effort across kind of these different agencies yeah um so in many ways we have the easiest job here on the the table we kind of go forth and say we think we should be doing this and then um our agencies uh are the ones who actually have the money and the tools and the regulations uh and to to be able to to sort it out so I think you know most um specifically uh you know our role both in just promoting the uh the overall message and and priority from from the White House perch is is just ensuring that uh all of the various pieces of the federal government that are working on this issue uh wherever they are within their respective agencies um are talking to each other and and leveraging each other's assets uh you know we funding has come up uh many times here uh there's not a lot of dollars on on the table uh for this particular effort but by leveraging you know Do's new uh Division and sba's field offices and the existing inter agency working group um that was set up by the farm bill at USDA um being able to you know as a force multiplier being able to use the other agency's assets and in particular the field staff I mean really being able to uh the technical assistance uh point is a is is a big one um just being able to have these resources out there on the ground in the field where businesses are actually are they not you know not a lot of um businesses actually here in Washington DC knocking on our door uh looking for help but uh you know through the the SBA field offices rural development has um a you know a state office in in every state and territory and and you know well-developed field staff uh do the same um trying to make sure that we have coordinated information out uh in in the real world um and then really you know bringing bringing the the stakeholders and and the the investment side the finance side uh together with the the public sector with our stakeholders and the nonprofit Community um really trying to do Outreach across our our various stakeholders and and make sure that we're both one hearing the priorities and um and issues and challenges that you all are having uh uh so that we may either you know facilitate fixes here on the internal government side or work with our um Partners in Congress to be able to to to facilitate I think with any alternative ownership or Alternative Market structure um that you can that you can find um there's likely to be some Federal Regulation or some federal statute that uh has some sort of negative impact on something you want to do here it's just kind of the nature of uh of how we we write our laws and and Institute and Implement them um so you know knocking out some of these things that that David and others have talked about that that require rule changes or uh or tweaking of statutory language to be able to better serve the community great thank you so much um and so now i' welcome questions from the audience and I'll invite you to um also share your name and where you're from if you if you like hi I'm David Ral and for the purposes of this introduction I'm the chairperson of a multi-employer pension plan serving the hare industry in the Northwestern us um I my question is you might imagine is two of you in your opening mentioned the administration's support for unions and collective bargaining um I'd love just to hear your thoughts on the intersection between uh collective bargaining and worker ownership um I can start with that I mean I neglected to mention at the beginning as far as uh my ties to or my interest in employee ownership is that for the time before I became a a government employee um for 30 years I worked uh representing um labor organizations but primarily um multi-employer funds um like yours and um in doing that became really familiar with um just how jointly trusteed funds and just this Co um cooperation collaboration between union and management can work together um to really serve the participants there but you know the employees of these organizations so um but to your question uh directly I have personally you know been very interested in um in that Dynamic and in the Union co-op space and where um labor organiz organizations fit into this um equation and so we have been also um as included in the stakeholders that we've consulted with have talked with um labor organizations who have had different experiences um with worker coops and um certainly I think there are more labor organizations that might have experience uh working with esops and either um have esops at companies that are collectively bargained or and or um have sat on Boards of esops and have been um involved in that to that extent um but also I think that there definitely is a space for unions and for collective bargaining with respect to the worker ownership um and worker Co-op model and um that that is something that we as we are educating the various communities certainly you know making sure that we can include in those communities labor organizations to see how this can be another part of and maybe you know another chapter a new chapter for uh labor organizations in looking at how we can all work together to be able to serve workers together in the best way possible so I think there's a lot of exciting work to be done and things to be learned in that space great thank you anybody else want to add to that Max Max hi um my name is eston Kelly and in addition to being affiliated with ruter as an executive fellow I think more importantly I'm the executive director for the US Federation of worker coops and we've had a lot of very uh nuanced and Technical conversations today I want to really simplify things for a moment and ask uh from the perspective of each of your agencies if you were giving organizations like ours advice as to how to advance worker ownership uh obviously we do a lot of advocacy but also partner on um on technical questions and on research and other things um I'm assuming that you have some sense of some of the roadblocks in each of your agencies that prevent for example the the the loans from um 7A loans at SBA that there's something from each of your departments that sort of gets in the way so if you were giving advice to this room and to me and to my members um about how to approach like what would be the strategy to kind of catalyze or unlock BL the resources um or the programs that already exist within your agencies what would those kind of um pivot Points be and I can clarify the question if you're confused I can start esan since you uh since you mentioned SBA uh thanks so much for your question and for the work of your Center um just to start with the 7A loan which you mentioned um one of the barriers is that a core requirement of that program is is that the borrower personal guarantee which doesn't you know uh naturally work as obviously well for a um an ESOP or cooperative but there is um uh flexibility for a third-party entity to provide that personal guarantee so that's sort of a next chapter for us that we're looking at that we're asking about is how can we encourage and make available opportunities to satisfy that requirement in potentially partnership with other organizations so that's something that we could talk about look into um together um you know another just the first thing that came to mind from your question was um uh give us your feedback on our the the technical assistance material that the small business uh Small Business Development Center network is offering um I'd be happy to get in touch with you afterwards kind of share those uh resource hubs What's missing what should we be emphasizing to small business owners um and what would you like us to highlight through through our networks thank you I'm happy to jump into that uh ston correct okay ston um you know I could say with a fresh set of eyes just only being some 50 some days into the the agency that that I think we have a portfolio that's massive right we have a lot of great programs we have a lot of great opportunities a lot of a lot of technical things I think one of the things that that we have been talking a lot about and and this will make sense is less is sometimes more and so sometimes in the sense of over oversaturation of a website that there's a million links you just get get routed here and there it's really about these kinds of collective forums and finding the right people and or knowing the question and I think sometimes for us that's the challenge we want to be helpful especially in a lot of our state areas um as as previous speaker said we have state directors who know those intricacies and also know the challenges that that state might have or the program might have and yet no one's been routed there first so they're at the national level trying to navigate A system that could have kind of had a better pathway or leg up going into the national so I think sometimes it's first understanding what the question is or the ask and then two really for us I think as um at least from the administrator's office is really F focusing and dialing on what back to that less is more those real Direct Communications and streamlining that so that it's easier one of the things I I failed to mention earlier is I not only want you to hear that from my said but one of the great resources USDA has are success stories and what I have found great about these success stories is it's helped me navigate and understand the these are relevant now because they talk about other businesses and other uh organizations finding a pathway to success and so maybe they were looking at a grant that was going to look for construction opportunities or infrastructure or technology whatever that was it kind of helps create that pathway in a one to two page that talks about the grant talks about when it was award and things like that then I think um just from a a macro perspective I think two things uh you know one and I think this has been uh tremendously effective uh for employee ownership causes you know continuing to find and uh and present Champions right a lot of good ideas out there uh unfortunately nearly none of them become law um but with uh Champions like like Senator Sanders and Senator van Holland um you know others who who have been pushing this work forward for for years and and decades in some cases uh you know staying at it and ensuring that whenever we are going to uh you know Senator Sanders to discuss something we know one of the things he's going to bring up is something on on employee ownership um and and knowing that you know we're going to have to deliver something for him so I think continue to cultivate you know coalitions in particular that uh serve the broadest array of of interests and communities um and you know different kinds of businesses different you know examples and stories that um that that can tell the benefits and and the real you know on the ground real world stories of of why this model is is both empowering and and effective um I think are are very helpful for for making the case particularly to the federal side and I'll just round that out if I can um to say that at the Department of Labor since we are really a new player in this um area that has been around for a long time um I know that so many people within the community are excited about being part of how this development how this develops and um have been really generous with information and I would just encourage um folks to continue to reach out to us um it's been great to be able to learn from all of the different entities um but please do not hesitate you know as we grow and um I'm sure you know that next year at this uh as we all gather there'll be many more things that we could be saying about what the department is doing and um a lot of exciting growth in that area but definitely reach out to us and um reach out to me directly I mean if you folks here many folks here um have my direct information I have cards with me but I am um always open to new ideas and um how we can be expanding this and one thing you know is as we were saying like uh uh lero was saying less is more you know sometimes also when working with government agencies less is less and we don't have a lot to be able to be working with on every project that we would love to spend lots of you know time money and resources on and so I think with respect to this project in particular it's um we at the Department of Labor are really going to be looking to Partners um who are out there in the community so that we can there's no need for us to be Reinventing Wheels here um there's lots of really great resources and information that is out there that I think we can work together to put out to this community and be using you know again the power um of the federal government to um I don't want to say legitimate legitimate I can't even say the word so I don't want to say it legitimize it's too late in the day um but to just give more Force to this whole movement so um just look forward to continued partnership and good ideas from this group great thank you great question yes hi thank you my name is Greg fiano with the ESOP Association appreciate your time and uh Devotion to this and certainly secretary Gomez question for you um very much appreciate your approach thank you not just in DC and meeting with stakeholders here but being able to travel and going around and doing that is a refreshing uh approach and so thank you for your engagement with that um just again not just here but around the country um curious about the regulation maybe an update on thoughts on timing I realize there may not be a date or something so specific but thoughts on timing maybe where that process is or how far along and when we expect that it'll be an enormous issue for both existing esops and surely as you know any perspective ESOP so it's something that I think reverberates throughout the entire ESOP community so any update on that thank you yes no definitely um if there's one lesson that I've learned in this position it's never to um say when you think something's going to be done uh because I've been known to say that and been awfully wrong um but again we are working very hard at in drafting um in drafting a proposal and uh we do have something that we are working to move forward it is a very high priority not only for um epsa but for the department and you know I think also for the administration um to move this forward I know that I get called directly by Senator Sanders asking how the project is going um so uh so I can't say more other than you know I I certainly within the next couple of months um but it would be wrong for me to say exactly when I've been known to tell people that will have it for Holiday reading I can't tell you which holiday they might be but I figure that if I just say it's holiday reading there are enough holidays in the calendar that you know I can come close to one of them but we're working on it I promise thank you great okay one last question over here hi I'm Corey Rosen with the national Center for employee ownership and this for David Brown um I actually wrote the first small business employee ownership act when I was working here in 1980 and went to the SBA after that was passed and I started the national Center and I said you guys aren't implementing this and they basically said we'd prefer not to literally almost the Main Street employee ownership act I also was involved in drafting in 2018 and then the prior Administration when they came out with regulations on that again basically said we'd prefer not to they came out with regulations that were directly in contravention to the specific statutory language of the law some of that you've changed now thankfully but there's still some major obstacles one of which is the SBA requires an its own valuation even though you have to do a much more rigorous valuation for orisa and if if you are a trustee and you get two different valuations which one do you use and is somebody going to sue you if you they say you use the wrong one and the personal guarantee the the statute specifically says that you cannot if if the seller doesn't retain an equity stake in the company that you can't have a personal guarantee requirement and my understanding is the changes that you made are not permanent regulations so I'm just wondering what that process will be uh thank you Corey um appreciate that and uh would love to follow up there's a lot there a lot more than we can address in a couple minutes so uh please um the comment at the end about it not being a permanent I mean you know there are no truly permanent regulations but but I'm that's not registering for me so I would like to discuss that um uh really I let me let me just say that you know administrator Guzman fully believes in employee ownership and pushing the envelope and doing what we can with the existing resources that we have um and we're not there yet so just look forward to partnering with you and Diving deeper and to the items that you mentioned great so uh just to close I'm going to ask you each uh just very lightning round so looking into not the very far future so next year's employee ownership ideas Forum um maybe just share one thing that you hope would be be different from your your perspective um and uh let's see which why don't I start with you and we'll just come down the line sure uh first thing that comes to mind for obvious reasons there's a lot of focus in this uh issue category on um businesses that have been around for a while owners that are nearing retirement business transition uh let's talk about new businesses uh the president talks about the small business boom in the United States we're getting close to 17 million new business applications under the Biden Harris Administration the top three years for new business applications are 2021 2022 and 2023 we've got this and and it's the most diverse cohort of of entrepreneurs that we've seen um according to a lot of uh indications so um as you're a a new entrepreneur starting up a business what are the decisions you can make now that would set you up for success to convert later or go ahead and start increasing employee ownership from the get-go great so let's talk about bringing new businesses into the employee ownership tent Lisa um sure so uh next year I I feel incredibly confident that we will have a rule to look at in in we'll be talking in the past tense about at least the proposed rule that's out there um and and also I feel very confident about where I think there will be a lot of growth with respect to our division um at the department we have learned a lot over the past year and um but I think this next year we're we're past the learning stage and more into the doing stage so I you know I'm really looking forward to um what we can talk about next year and how much we've done and how much we've learned and hopefully um you know it's it it's not too far off but we'll have a lot more people who are um talking about worker ownership as um options and what they've been able to learn as we've been uh doing more Outreach on this great new year new rule yeah L similarly for us over at Rd again 70 some plus programs in rbcs over 26 and so a number of those grants those loans those opportunities that exist but sometimes are hinged on being able to be utilized because of the the lack of technical assistance that could be provided and so really streamlining and ensuring that we're having better Communications more efficient Communications helping uh on the ground so that that we can get things launched um so that's a benchmark that we look forward to to measuring yeah fantastic and um I'm going to go uh something I I hope will be the same uh next year I hope I am still here and we are uh I'm glad someone said it we're able to to finalize and complete some of the work that we've started as Lisa and David were mentioning we've got a lot of um unfinished business on the table I think we made a tremendous start uh whether it's addressing you know by regulation or statute uh or just programmatic implementation um you know it takes a little while to turn the the ship that is the the federal government uh I think we've made great strides and I think with uh with a little more time uh can really see uh I think the the fruits of of a lot of this labor as as rules get finalized and money gets out the door um and and some of this work uh gets to pay off great well thank you all so much that was fantastic