Federal government backs worker ownership as economic development tool
H.R. 5958 — National Worker Cooperative Development and Support Act · Filed by Ro Khanna (D-CA) · Introduced Nov 7, 2025 · Referred to committee
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What it does
This bill directs federal agencies (SBA, IRS, Treasury, Commerce, Agriculture, Labor) to actively promote and support worker-owned cooperative businesses—companies where employees own and control the majority stake. It establishes a federal council to coordinate these efforts, removes regulatory barriers, facilitates access to capital, provides education and technical assistance, and funds a $60 million lending pilot program through 2036 to help businesses transition to worker ownership.
Why we flagged it
The bill's core function is to establish federal infrastructure—agencies, councils, capital programs, and education—specifically designed to increase the formation and expansion of worker-owned cooperative businesses as an economic development tool.
What the text implies
- The bill creates a permanent federal council (10-year sunset, but renewable) that may shift how federal agencies evaluate business models and economic development priorities, potentially favoring cooperative structures in procurement, lending, and technical assistance decisions.
- By amending the Small Business Act and CDFI regulations, the bill integrates worker cooperatives into existing federal lending and community development infrastructure, which may gradually increase capital availability for cooperative formation relative to traditional business structures.
The full analysis lists 3 implications of this text.
Who stands to gain
worker-owned cooperative businesses; community development financial institutions (CDFIs); small business intermediaries specializing in cooperative lending