Senate Appropriations Committee Includes Funding for Employee Ownership Initiative in FY26 Labor, Health and Human Services, Education, and Related Agencies Funding Package

August 6, 2025

Senate Appropriations Committee Includes Funding for Employee Ownership Initiative in FY26 Labor, Health and Human Services, Education, and Related Agencies Funding Package

On July 31, the U.S. Senate Committee on Appropriations passed the Fiscal 2026 Labor, Health and Human Services, Education, and Related Agencies (LHHS) Appropriations Act in a strongly bipartisan vote of 26-3. Importantly, the bill directs $2 million to fund the Department of Labor’s Employee Ownership Initiative grant program and also urges the DOL to prioritize rulemaking on the adequate consideration exemption.

The Appropriations Committee’s report directs the Employment and Training Administration (ETA) at the DOL to administer the grant program, with EBSA providing subject matter assistance:

Employee Ownership Initiative.—The Committee provides $2,000,000 for grants authorized by section 346(d) of the SECURE 2.0 Act of 2022. Funds will be used to establish and expand employee ownership programs authorized by such section. The Committee directs the Employee Benefits Security Administration to provide subject matter assistance to ETA as it develops and administers this grant program. (page 16)

Implementation of Employee Ownership Initiative.—The Committee directs $2,000,000 within ETA for the grant program authorized section 346 of the SECURE 2.0 Act of 2022 to help establish and expand employee ownership programs. The Committee directs EBSA to provide subject matter assistance to ETA as it develops and administers this grant program. (page 26)

The bipartisan Employee Ownership Initiative is a key initiative of The ESOP Association and was passed as part of the SECURE 2.0 Act of 2022 (division T of the Consolidated Appropriations Act, 2023 (P.L. 117-328)). To avoid conflicts of interest at the DOL, ensuring the funding for this effort is administered by the Employment and Training Administration (ETA) has been a subject for TEA advocates on Capitol Hill.

The Appropriations Committee’s report also makes clear Congress’ intent regarding adequate consideration, noting the rulemaking should ensure “taxpayers benefit from stakeholder input and experience”:

Adequate Consideration Guidance.—The Committee notes that the SECURE 2.0 Act of 2022 also directs the Department to issue formal guidance on the adequate consideration exemption, as defined in section 407(d)(6) of ERISA. The Committee urges the Department to prioritize a timely, formal notice and comment rulemaking on the adequate consideration exemption that ensures taxpayers benefit from stakeholder input and experience, consistent with congressional intent. (page 26)

“On behalf of our members, we thank Chairwoman Collins, Subcommittee Chair Capito, and Ranking Member Baldwin for their continued support of employee ownership,” said James Bonham, President and CEO of The ESOP Association. “We are also grateful to Senator Bernie Sanders and the Appropriations Committee members for their support of the Employee Ownership Initiative. The grant program provides vital resources to help states offer education, outreach, and technical assistance. In light of the longstanding bipartisan support for ESOPs, including the recent support ESOPs in both the House and Senate, we remain hopeful funding will be secured and passed by Congress this year.”