Pennsylvania 2025_0 Regular Session Status: In Committee Bipartisan · 5 D · 4 R cosponsors

SB 478 — An Act establishing the Office of Employee Ownership within the Department of Community and Economic Development; establishing the Employee Ownership Advisory Board; establishing the Main Street Employee Ownership Grant Program; and providing technical and financial assistance to employee-owned enterprises.

Last action — Re-referred to APPROPRIATIONS, July 17, 2025

  1. ✓
    Introduced
  2. 2
    In Committee
  3. 3
    Passed Senate
  4. 4
    Passed House
  5. 5
    To Executive
  6. 6
    Enacted

This bill is in committee in the Senate. Introduced March 20, 2025. It must pass committee before a floor vote.

Next likely step: a committee vote, then a floor vote in the Senate.

Odds of enactment

Low chance

Based on the sponsor, cosponsors, and committee posture, this bill has a low chance of becoming law.

Upgrade to see the exact probability and what's driving it.

A statistical estimate from our own model of past outcomes — an insight, not a guarantee. Policymaking is volatile.

Prognosis

Advancing 42% · moderate confidence

  • In Committee

    Current position in the legislative process.

  • 9 sponsors

    1 primary, 8 co-sponsors signed on.

  • Bipartisan support

    Sponsored across 2 parties (5 D · 4 R) — cross-party backing.

Based on stage, sponsorship breadth, committee status, recorded votes, and cross-state momentum — a description of the observable signals, not a prediction.

Summary

Establishing the Office of Employee Ownership

Bill Text

What changed in the latest version

498 added · 581 removed

Plain-language change summary

The updated version of Bill SB 478 removes a section about establishing an Employee Ownership Advisory Board, simplifying the proposed legislation. Instead, the focus is now solely on launching the Main Street Employee Ownership Grant Program and providing assistance to employee-owned businesses. This change is important because it streamlines the bill, potentially making it easier to implement and focus resources on financial support for employee ownership, which could benefit local economies.

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PRIOR PRINTER'S NO.
PRINTER'S NO.
441 PRINTER'S NO.
441 THE GENERAL ASSEMBLY OF PENNSYLVANIA SENATE BILL Session of No.
984 THE GENERAL ASSEMBLY OF PENNSYLVANIA SENATE BILL Session of No.
478 2025 INTRODUCED BY FARRY, PENNYCUICK, FONTANA, LAUGHLIN, TARTAGLIONE, KEARNEY, STEFANO AND PISCIOTTANO, MARCH 20, 2025 REFERRED TO COMMUNITY, ECONOMIC AND RECREATIONAL DEVELOPMENT, MARCH 20, 2025 AN ACT Establishing the Office of Employee Ownership within the Department of Community and Economic Development;
478 2025 INTRODUCED BY FARRY, PENNYCUICK, FONTANA, LAUGHLIN, TARTAGLIONE, KEARNEY, STEFANO, PISCIOTTANO AND COLLETT, MARCH 20, 2025 SENATOR BROWN, COMMUNITY, ECONOMIC AND RECREATIONAL DEVELOPMENT, AS AMENDED, JUNE 24, 2025 AN ACT Establishing the Office of Employee Ownership within the Department of Community and Economic Development;
establishing the Main Street Employee Ownership Grant Program;
ESTABLISHING THE EMPLOYEE OWNERSHIP ADVISORY BOARD;
<-- establishing the Main Street Employee Ownership Grant Program;
"BOARD." THE EMPLOYEE OWNERSHIP ADVISORY BOARD ESTABLISHED <-- UNDER SECTION 7(A).
(1) A business that meets all ONE of the following <-- conditions:
(1) A business that meets all of the following conditions:
20250SB0478PN0984 - 2 - (2) A business that is organized in a manner determined by the secretary to involve substantial employee participation.
(2) A business that is organized in a manner determined by the secretary to involve substantial employee participation.
(3) An employee-ownership trust.
20250SB0478PN0441 - 2 - (3) An employee-ownership trust.
(4) AN EQUITABLE BROAD-BASED PROFIT-SHARING PROGRAM FOR <-- ALL EMPLOYEES DESIGNED TO ALLOW PURCHASE OF COMPANY SHARES AS DIRECT EMPLOYEE OWNERSHIP.
20250SB0478PN0984 - 3 - "Office." The Office of Employee Ownership established under section 3(a).
"Office." The Office of Employee Ownership established under section 3(a).
(a) Establishment and purpose.-- (1) The Office of Employee Ownership is established in the department.
(a) Establishment and purpose.-- 20250SB0478PN0441 - 3 - (1) The Office of Employee Ownership is established in the department.
(2) The individual serving as an employee ownership 20250SB0478PN0984 - 4 - advocate may not seek or accept employment or render beneficial services for compensation with any person or corporation, as defined in 66 Pa.C.S.
(2) The individual serving as an employee ownership advocate may not seek or accept employment or render beneficial services for compensation with any person or corporation, as defined in 66 Pa.C.S.
(3) An individual who is appointed to the position of employee ownership advocate may not seek election or accept appointment to any public office during the tenure as the employee ownership advocate and for a period of two years <-- after the appointment is served or terminated.
20250SB0478PN0441 - 4 - (3) An individual who is appointed to the position of employee ownership advocate may not seek election or accept appointment to any public office during the tenure as the employee ownership advocate and for a period of two years after the appointment is served or terminated.
(4) Identify barriers to the development and advancement of employee-owned enterprises and recommend State actions and 20250SB0478PN0984 - 5 - resources to remove barriers.
(4) Identify barriers to the development and advancement of employee-owned enterprises and recommend State actions and resources to remove barriers.
(6) Evaluate and submit a report by December 31 of each year to the Community, Economic and Recreational Development Committee of the Senate and the Commerce Committee of the House of Representatives.
(6) Evaluate and submit a report by December 31 of each year to the Community, Economic and Recreational Development Committee of the Senate and the Commerce Committee of the 20250SB0478PN0441 - 5 - House of Representatives.
(a) Authorization to allocate money.--The office may allocate or distribute money to local administrative agencies 20250SB0478PN0984 - 6 - for the purpose of providing grants and loans to employee- ownership groups in industrial facilities and commercial facilities, as those terms are defined in section 3 of the act of August 23, 1967 (P.L.251, No.102), known as the Economic Development Financing Law, for technical assistance to develop or improve an employee-owned enterprise.
(a) Authorization to allocate money.--The office may allocate or distribute money to local administrative agencies for the purpose of providing grants and loans to employee- ownership groups in industrial facilities and commercial facilities, as those terms are defined in section 3 of the act of August 23, 1967 (P.L.251, No.102), known as the Economic Development Financing Law, for technical assistance to develop or improve an employee-owned enterprise.
(b) Eligibility.-- (1) An employee-ownership group shall be eligible for assistance if the employees in the employee-ownership group are employed by, formerly employed by or affiliated with one of the following:
20250SB0478PN0441 - 6 - (b) Eligibility.-- (1) An employee-ownership group shall be eligible for assistance if the employees in the employee-ownership group are employed by, formerly employed by or affiliated with one of the following:
(2) For purposes of this subsection, the term "existing firm" shall include an ongoing concern, the assets of an 20250SB0478PN0984 - 7 - existing company or the assets of a company that has been closed for no more than one year as of the date of application for the feasibility study loan.
(2) For purposes of this subsection, the term "existing firm" shall include an ongoing concern, the assets of an existing company or the assets of a company that has been closed for no more than one year as of the date of application for the feasibility study loan.
<-- (c) Use of awarded money.--An employee-ownership group may be awarded sums of money for the following purposes:
(c) Use of awarded money.--An employee-ownership group may be awarded sums of money for the following purposes:
(1) Feasibility studies to investigate a reorganization or new incorporation as an employee-owned enterprise.
(1) Feasibility studies to investigate a reorganization 20250SB0478PN0441 - 7 - or new incorporation as an employee-owned enterprise.
(iv) Determine whether there exists in the affected <-- area and in the employee-ownership group the desire and capacity to create a new production entity and to become competitive.
(iv) Determine whether there exists in the affected area and in the employee-ownership group the desire and capacity to create a new production entity and to become competitive.
(1) If the enterprise studied is purchased or improved by the employee-ownership group, the sum of money awarded will constitute a loan and the employee-ownership group shall 20250SB0478PN0984 - 8 - repay the entire amount of the loan, with interest, in a lump sum at the closing of the purchase of the company or within one year after the date of the release of the loan by the office, whichever occurs later.
(1) If the enterprise studied is purchased or improved by the employee-ownership group, the sum of money awarded will constitute a loan and the employee-ownership group shall repay the entire amount of the loan, with interest, in a lump sum at the closing of the purchase of the company or within one year after the date of the release of the loan by the office, whichever occurs later.
The interest paid on the loan shall be used by the office for administrative costs associated with administering this act.
The interest paid on the loan shall be used 20250SB0478PN0441 - 8 - by the office for administrative costs associated with administering this act.
(2) If the enterprise studied is not purchased by the employee-ownership group within one year after the completion of the feasibility study, the applicant shall submit a final <-- report concerning the feasibility of repaying the awarded money.
(2) If the enterprise studied is not purchased by the employee-ownership group within one year after the completion of the feasibility study, the applicant shall submit a final report concerning the feasibility of repaying the awarded money.
AND THE ENTERPRISE MAKES A GOOD FAITH EFFORT TO PURSUE <-- CONVERSION, THE MONEY WILL CONSTITUTE A GRANT.
20250SB0478PN0984 - 9 - (2) Maximum State participation shall be 50% of the total cost of the technical assistance and the maximum loan size shall be $100,000 OR GRANT AMOUNT SHALL BE $35,000.
(2) Maximum State participation shall be 50% of the total cost of the technical assistance and the maximum loan size shall be $100,000.
<-- Section 6.
Section 6.
(a) Authorization to allocate funds.--The office may allocate or distribute money to local administrative agencies for the purpose of providing loans and loan guarantees to employee-owned enterprises reorganizing industrial facilities, manufacturing facilities and agricultural enterprises as defined in section 3 of the act of May 17, 1956 (1955 P.L.1609, No.537), known as the Pennsylvania Industrial Development Authority Act, for the development of employee-owned enterprises.
(a) Authorization to allocate funds.--The office may allocate or distribute money to local administrative agencies for the purpose of providing loans and loan guarantees to 20250SB0478PN0441 - 9 - employee-owned enterprises reorganizing industrial facilities, manufacturing facilities and agricultural enterprises as defined in section 3 of the act of May 17, 1956 (1955 P.L.1609, No.537), known as the Pennsylvania Industrial Development Authority Act, for the development of employee-owned enterprises.
(b) Eligibility.-- (1) Eligibility for assistance shall be limited to an <-- employee-ownership group reorganizing an existing enterprise BEING EVALUATED FOR CONVERSION TO AN EMPLOYEE OWNERSHIP <-- GROUP, AN ORGANIZATION which is facing a threat of substantial layoffs or a plant closing and adequate private <-- financing is not available.
(b) Eligibility.-- (1) Eligibility for assistance shall be limited to an employee-ownership group reorganizing an existing enterprise which is facing a threat of substantial layoffs or a plant closing and adequate private financing is not available.
WHICH MAY BE ASSISTED BY <-- CONVERSION TO EMPLOYEE OWNERSHIP, A START-UP ORGANIZATION SEEKING FORMATION AS A WORKER COOPERATIVE BUSINESS OR AN EXISTING EMPLOYEE OWNERSHIP ENTERPRISE SEEKING FUNDING TO GROW THE BUSINESS TO CREATE NEW JOBS.
(c) Use of assistance.--Eligible project costs shall include <-- land and buildings, machinery and equipment and working capital 20250SB0478PN0984 - 10 - secured by accounts receivable and inventory.
(c) Use of assistance.--Eligible project costs shall include land and buildings, machinery and equipment and working capital secured by accounts receivable and inventory.
(2) When the obligation of a firm is guaranteed, the financial institution holding the obligation shall adequately secure the obligation.
20250SB0478PN0441 - 10 - (2) When the obligation of a firm is guaranteed, the financial institution holding the obligation shall adequately secure the obligation.
(g) Equity requirement.--A significant equity investment by the employee-ownership group equal to at least 10% of the 20250SB0478PN0984 - 11 - project cost and including substantial participation by at least two-thirds of the members of the employee-ownership group is required to qualify for the loan or guarantee.
(g) Equity requirement.--A significant equity investment by the employee-ownership group equal to at least 10% of the project cost and including substantial participation by at least two-thirds of the members of the employee-ownership group is required to qualify for the loan or guarantee.
The local administrative agencies and the office shall evaluate an application under section 6 based on the following criteria:
The local administrative agencies and the office shall evaluate an application under section 6 based on the following 20250SB0478PN0441 - 11 - criteria:
SECTION 7.
EMPLOYEE OWNERSHIP ADVISORY BOARD.
<-- 20250SB0478PN0984 - 12 - (A) ESTABLISHMENT.--THE EMPLOYEE OWNERSHIP ADVISORY BOARD IS ESTABLISHED WITHIN THE DEPARTMENT.
(B) POWERS AND DUTIES.--THE BOARD SHALL HAVE THE FOLLOWING POWERS AND DUTIES:
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(1) RAISE AWARENESS FOR EMPLOYEE-OWNED ENTERPRISES IN THIS COMMONWEALTH.
(2) RESEARCH METHODS TO ENCOURAGE THE DEVELOPMENT AND EXPANSION OF EMPLOYEE-OWNED ENTERPRISES IN THIS COMMONWEALTH.
(3) MAKE RECOMMENDATIONS TO THE DEPARTMENT AND GENERAL ASSEMBLY ON POLICIES RELATED TO EMPLOYEE-OWNED ENTERPRISES.
(4) DEVELOP PROPOSED BEST PRACTICES FOR EMPLOYEE-OWNED ENTERPRISES IN THIS COMMONWEALTH.
(5) DEVELOP EDUCATIONAL MATERIALS AND OUTREACH OPPORTUNITIES FOR THE MAINTENANCE AND DEVELOPMENT OF EMPLOYEE-OWNED ENTERPRISES IN THIS COMMONWEALTH.
(C) MEMBERS.--THE BOARD SHALL BE COMPOSED OF THE FOLLOWING MEMBERS:
(1) THE EMPLOYEE OWNERSHIP ADVOCATE.
(2) AN EMPLOYEE OWNER.
(3) A CERTIFIED PUBLIC ACCOUNTANT.
(4) A REPRESENTATIVE FROM A WORKER-OWNED COOPERATIVE.
(5) A REPRESENTATIVE FROM A FEDERATION OF LABOR UNIONS.
(6) A REPRESENTATIVE FROM THE BANKING INDUSTRY OR COMMUNITY DEVELOPMENT FINANCIAL INSTITUTION.
(7) A REGIONAL ADVOCATE FOR BUSINESS DEVELOPMENT.
(8) A PROFESSOR FROM AN INSTITUTION OF HIGHER EDUCATION LOCATED IN THIS COMMONWEALTH WITH AN EXPERTISE IN EMPLOYEE OWNERSHIP AND LABOR RELATIONS.
(9) A REPRESENTATIVE FROM A LAW FIRM WITH EXPERTISE IN EMPLOYEE OWNERSHIP.
20250SB0478PN0984 - 13 - (10) A MEMBER OF THE SENATE APPOINTED BY THE PRESIDENT PRO TEMPORE OF THE SENATE.
(11) A MEMBER OF THE HOUSE OF REPRESENTATIVES APPOINTED BY THE SPEAKER OF THE HOUSE OF REPRESENTATIVES.
(D) OFFICERS.-- (1) THE EMPLOYEE OWNERSHIP ADVOCATE SHALL SERVE AS THE CHAIRPERSON OF THE BOARD.
(2) THE BOARD SHALL ELECT A VICE CHAIRPERSON FROM THE MEMBERS OF THE BOARD.
(E) TERM.--EXCEPT FOR THE EMPLOYEE OWNERSHIP ADVOCATE, ALL MEMBERS OF THE BOARD SHALL SERVE A TERM OF FOUR YEARS AND MAY SERVE ON THE BOARD UNTIL A SUCCESSOR IS APPOINTED.
(F) COMPENSATION.--MEMBERS OF THE BOARD SHALL NOT RECEIVE COMPENSATION FOR SERVICE ON THE BOARD BUT SHALL BE REIMBURSED FOR EXPENSES INCURRED IN THE PERFORMANCE OF THEIR DUTIES UNDER THIS ACT.
(G) STAFF SUPPORT.--THE OFFICE SHALL PROVIDE STAFF SUPPORT TO THE BOARD.
(H) MEETINGS.--THE BOARD SHALL MEET AT LEAST TWICE EACH YEAR TO CONSIDER ISSUES RELATED TO EMPLOYEE-OWNED ENTERPRISES AND MAKE RECOMMENDATIONS TO THE DEPARTMENT AND GENERAL ASSEMBLY.
(I) REPORTS.-- (1) NO LATER THAN DECEMBER 31, 2025, AND EACH DECEMBER 31 THEREAFTER, THE BOARD SHALL ISSUE AN ANNUAL REPORT DETAILING RECOMMENDATIONS AND ACTIONS MADE BY THE BOARD.
(2) EACH ANNUAL REPORT UNDER THIS SUBSECTION SHALL BE SUBMITTED TO:
(I) THE CHAIRPERSON AND MINORITY CHAIRPERSON OF THE COMMUNITY, ECONOMIC AND RECREATIONAL DEVELOPMENT COMMITTEE OF THE SENATE.
20250SB0478PN0984 - 14 - (II) THE CHAIRPERSON AND MINORITY CHAIRPERSON OF THE COMMERCE COMMITTEE OF THE HOUSE OF REPRESENTATIVES.
<-- (1) Has fewer than 100 employees.
(1) Has fewer than 100 employees.
HAS FEWER THAN 200 <-- EMPLOYEES.
(1) Acquire a business to be an employee-owned <-- enterprise.
(1) Acquire a business to be an employee-owned enterprise.
ESTABLISH A WORKERS' COOPERATIVE IN ACCORDANCE <-- WITH 15 PA.C.S.
CH.
77 (RELATING TO WORKERS' COOPERATIVE CORPORATIONS).
(3) Provide support for technical assistance, such as the proper management of an employee-owned enterprise, best business practices or other assistance approved by the office.
(3) Provide support for technical assistance, such as 20250SB0478PN0441 - 12 - the proper management of an employee-owned enterprise, best business practices or other assistance approved by the office.
(a) Responsibility of local administrative agencies.--Local administrative agencies shall promote the employee ownership program and the Main Street Employee Ownership Grant Program by 20250SB0478PN0984 - 15 - soliciting applications, evaluating applications and making preliminary decisions on both technical assistance and financial assistance.
(a) Responsibility of local administrative agencies.--Local administrative agencies shall promote the employee ownership program and the Main Street Employee Ownership Grant Program by soliciting applications, evaluating applications and making preliminary decisions on both technical assistance and financial assistance.
(d) Loan and loan guarantee fees.--Local administrative <-- agencies may establish and charge reasonable fees for processing loans or loan guarantees under section 6, with the approval of the secretary.
(d) Loan and loan guarantee fees.--Local administrative agencies may establish and charge reasonable fees for processing loans or loan guarantees under section 6, with the approval of the secretary.
(e) (D) Rules and regulations.--The secretary may adopt and <-- promulgate rules and regulations, statements of policy or forms, guidelines and other procedures, forms and requirements necessary for the implementation and administration of this act.
(e) Rules and regulations.--The secretary may adopt and promulgate rules and regulations, statements of policy or forms, 20250SB0478PN0441 - 13 - guidelines and other procedures, forms and requirements necessary for the implementation and administration of this act.
20250SB0478PN0984 - 16 - (2) The number of employee-ownership groups and firms APPLYING FOR AND receiving assistance.
(2) The number of employee-ownership groups and firms receiving assistance.
<-- (3) The number of feasibility studies which were actually implemented.
(3) The number of feasibility studies which were actually implemented.
A loan, loan guarantee, grant or other financial assistance <-- may not be made to a recipient under this act unless the recipient certifies to the department, in a form satisfactory to the department, that the recipient will not discriminate against an employee or against an applicant for employment because of race, religion, color, national origin, sex or age.
A loan, loan guarantee, grant or other financial assistance may not be made to a recipient under this act unless the recipient certifies to the department, in a form satisfactory to the department, that the recipient will not discriminate against an employee or against an applicant for employment because of 20250SB0478PN0441 - 14 - race, religion, color, national origin, sex or age.
20250SB0478PN0984 - 17 - (2) Sections 201, 202, 203, 204 and 205 of the act of July 31, 1968 (P.L.769, No.240), referred to as the Commonwealth Documents Law.
(2) Sections 201, 202, 203, 204 and 205 of the act of July 31, 1968 (P.L.769, No.240), referred to as the Commonwealth Documents Law.
At the same time the office submits the estimate to the Governor, the office shall also submit the estimate to the General Assembly.
At the same time the office submits the estimate to the Governor, the office shall also submit the estimate to the 20250SB0478PN0441 - 15 - General Assembly.
20250SB0478PN0984 - 18 - (b) Allocation of assessment.--For each fiscal year, the office shall determine for the preceding calendar year the amount of its expenditures directly attributable to administering this act as follows:
(b) Allocation of assessment.--For each fiscal year, the office shall determine for the preceding calendar year the amount of its expenditures directly attributable to administering this act as follows:
(3) Money received from a State agency through an interagency agreement or memorandum of understanding.
20250SB0478PN0441 - 16 - (3) Money received from a State agency through an interagency agreement or memorandum of understanding.
20250SB0478PN0984 - 19 -
20250SB0478PN0441 - 17 -
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Action History

  1. Re-referred to APPROPRIATIONS, July 17, 2025

  2. Second consideration, July 17, 2025

  3. First consideration, June 24, 2025

  4. Reported as amended, June 24, 2025

  5. Referred to COMMUNITY, ECONOMIC AND RECREATIONAL DEVELOPMENT, March 20, 2025

Sponsors

Sponsorship breakdown

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1 sponsors · 8 co-sponsors · 244 not signed on

Sponsors (1)

Co-sponsors (8)

Not signed on (244)

244 members have not signed on to this bill.

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"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.

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Frequently asked questions

What does SB 478 do?
Establishing the Office of Employee Ownership
Who sponsors SB 478?
SB 478 is sponsored by Daniel Laughlin (Republican), Frank A. Farry (Republican), Tracy Pennycuick (Republican), Wayne D. Fontana (Democratic), Christine M. Tartaglione (Democratic), Timothy P. Kearney (Democratic), Patrick J. Stefano (Republican), Nick Pisciottano (Democratic), and Maria Collett (Democratic).
What is the current status of SB 478?
This bill is in committee in the Senate. Introduced March 20, 2025. It must pass committee before a floor vote.
Where can I track SB 478?
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