This bill would direct the heads of several federal agencies to develop programs that support worker-owned cooperative businesses, review regulations to remove barriers, and improve access to capital. It also creates a federal coordinating body to align policy, research, and outreach around worker-owned cooperatives, and it expands lending pilots and educational guidance to enable more worker-owned models.
The action is anchored by a clear definition of what counts as a worker-owned cooperative and a timeline for establishing a national framework.
At a Glance
What It Does
The bill requires six covered agencies to implement programs that support worker-owned cooperatives, review and revise regulations to remove barriers, and facilitate capital access, including exploring new financing options. It also creates the United States Council on Worker Cooperatives to coordinate activities across the federal government and to develop a national strategy.
Who It Affects
Directly affects the six covered agencies (SBA, IRS, Treasury, Commerce, Agriculture, Labor) and any current or prospective worker-owned cooperative, including employees who become owners, compliant intermediaries, and lenders involved in related programs.
Why It Matters
Establishing a formal federal framework aims to unlock capital, reduce regulatory barriers, and coordinate policy and research to grow worker-owned businesses as a tool for national economic development.
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What This Bill Actually Does
The bill sets a federal mandate to actively promote worker-owned cooperatives. It requires each covered agency to run programs that help these businesses form and grow, review rules that might block their formation, and improve access to capital by exploring innovative financing and leveraging existing programs.
It also mandates education and outreach to explain how worker-owned models work and to bring communities in with multilingual materials.
Key governance is created through a new United States Council on Worker Cooperatives, which the Secretary of Labor would chair (or designate a chair). The Council brings together leadership from SBA, IRS, Treasury, Commerce, Agriculture, and Labor, plus other interagency and advisory members.
Its duties include drafting a federal strategy to promote worker-owned cooperatives, identifying regulatory barriers, proposing solutions, and coordinating data and educational efforts across agencies. The Council would report to Congress annually and would sunset 10 years from enactment.
In addition, the bill expands a Small Business Intermediary Lending Pilot Program to run from 2026 through 2036, increases the potential funding pool, and redefines an eligible intermediary to include cooperatives. It also amends the CDFI education framework to explicitly include education and facilitation services for establishing and managing worker-owned cooperatives.
Finally, the bill defines covered agencies and worker-owned cooperatives to provide a consistent vocabulary for federal action.
The Five Things You Need to Know
The bill designates SBA, IRS, Treasury, Commerce, Agriculture, and Labor as covered agencies responsible for supporting worker-owned cooperatives.
A new United States Council on Worker Cooperatives will coordinate federal activities, identify barriers, and publish annual progress reports for 10 years.
Education and outreach programs, including multilingual materials, must be developed to raise awareness and support adoption of worker-owned cooperatives.
The Small Business Intermediary Lending Pilot Program is extended to 2026–2036 with increased funding and a redefined eligible intermediary to include cooperatives.
CDFI guidance is updated to include education and facilitation services to help establish and manage worker-owned cooperative businesses.
Section-by-Section Breakdown
Every bill we cover gets an analysis of its key sections.
Short Title
This section codifies the Act’s short title as the National Worker Cooperative Development and Support Act, establishing the overall purpose and scope of the bill.
Promotion of Worker-Owned Cooperative Business by Certain Agencies
The head of each covered agency must implement programs to support and expand worker-owned cooperative businesses, review regulations to remove barriers to formation and growth, facilitate access to capital (including exploring innovative financing and leveraging existing programs), and coordinate with the United States Council on Worker Cooperatives established in Section 4. It also directs agencies to support research on economic impact and barriers, provide transition assistance to existing businesses, identify best practices, and train federal workers to integrate worker-owned cooperatives into federal systems.
Education and Outreach Relating to Worker-Owned Cooperative Business
The SBA Administrator is required to develop multilingual educational materials and deploy outreach efforts in communities where English is not the predominant language, ensuring resources are accessible online and in print to broaden awareness and understanding of worker-owned cooperative models.
Establishment of the United States Council on Worker Cooperatives
This section creates the Council within 180 days of enactment to coordinate federal activities. The Secretary of Labor chairs the Council or designates a chair. Members include the SBA Administrator, IRS Commissioner, Secretary of the Treasury, Secretary of Commerce, a representative from the National Economic Council, the Director of the Domestic Policy Council, a representative from the Department of Agriculture (Interagency Working Group on Cooperative Development), and other members as determined by the Secretary of Labor. The Council’s responsibilities include developing a federal strategy, identifying regulatory barriers, proposing solutions, and coordinating data, education, and interagency initiatives; it must report to Congress annually and sunset 10 years after enactment.
Small Business Intermediary Lending Pilot Program for Worker-Owned Cooperative Business
The Small Business Act’s intermediary lending framework is amended to broaden the definition of eligible intermediaries to include cooperatives and to extend the pilot program from 2026 through 2036. Funding is increased to support the expanded scope (from $20 million to $60 million). These changes aim to improve capital access for worker-owned cooperatives through intermediary lenders.
CDFI Education and Guidance About the Value of Worker-Owned Cooperative Business
The Riegle Community Development and Regulatory Improvement Act is amended to add education and facilitation services for establishing and managing worker-owned coops among the duties of the applicable CDFI programs, strengthening the federal role in promoting cooperative development and access to guidance.
Definitions
Definitions for 'covered agency' (SBA, IRS, Treasury, Commerce, Agriculture, and Labor) and 'worker-owned cooperative business' (either majority-owned by employees under state cooperative law or defined as an eligible cooperative under the Internal Revenue Code) establish the scope and meaning of key terms used throughout the Act.
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Explore Economy in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Employees who gain equity and governance in worker-owned cooperatives, with potential profit sharing and job security improvements.
- Existing worker-owned cooperatives seeking to scale and access new markets through federal programs and capital support.
- Businesses considering transitioning to worker-owned models and needing structured educational and regulatory pathways.
- Community development financial institutions (CDFIs) and other lenders that participate in the pilot and related financing programs.
- Researchers and policymakers who gain access to data and a federal framework to study the impact of worker-owned models.
Who Bears the Cost
- Federal agencies will incur administrative and programmatic costs to implement new programs, review regulations, and coordinate across agencies.
- The federal budget will bear costs to maintain the Council, data collection, and annual reporting, especially during the 10-year sunset window.
- Lenders participating in the expanded intermediary lending pilot may face additional reporting, oversight, and risk-management responsibilities.
- Small businesses and employers navigating regulatory changes may incur transitional costs related to policy alignment and compliance.
Key Issues
The Core Tension
The central dilemma is whether a centralized federal framework can meaningfully catalyze growth of worker-owned cooperatives without overstepping local contexts or creating rigid, costly programs that fail to reach smaller or rural cooperatives.
The bill creates a comprehensive federal framework to promote worker-owned cooperatives, but its success depends on effective coordination across agencies and the ability to translate policy into practical, scalable support. Key implementation questions include how regulatory reviews will translate into concrete rule changes, how capital access will be scaled to meaningful volumes for diverse cooperatives, and how the Council will measure impact across regions and industries.
The sunset provision (10 years) emphasizes a time-limited federal test, which could pressure continuity of funding, leadership, and data collection if outcomes are not clearly demonstrated. There is also the risk that federal-driven programs and data collection could impose administrative burdens on state and local actors or on small intermediaries if not carefully calibrated.
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