House Advances Velázquez's Small Business, Puerto Rico Legislation

Press Release

The U.S. House of Representatives today approved two pieces of legislation authored by Rep. Nydia M. Velázquez (D-NY). One of Velázquez's provisions will assist small businesses in Puerto Rico by incentivizing federal agencies to award them contracts, fueling job growth on the hurricane ravaged and economically beleaguered Island. A second measure would help businesses in New York and around the nation that are transitioning to employee ownership, creating greater financial and economic empowerment for workers.

"These are commonsense proposals that, I'm proud to say, passed with widespread bipartisan support," Velázquez noted. "By funneling federal contracting dollars to Puerto Rico we can help local businesses there grow, exactly when the Island most needs help. By creating greater opportunities in New York and around the country for working families to own a stake in their workplace, we can reduce income inequality and help more hardworking men and women achieve financial security. I look forward to seeing these provisions pass the Senate and become law in the next few weeks."

Creating Economic Opportunity in Puerto Rico

Velázquez successfully included in the NDAA, her legislation that would allow federal agencies to count double toward their statutory small business contracting goals, procurement dollars awarded to firms in Puerto Rico. The Congresswoman said the measure will incentivize federal agencies to employ Puerto Rican businesses, helping create local jobs.

"Ten months have passed since Hurricane Maria ravished Puerto Rico's infrastructure, devastated the electrical grid and crippled the already languishing economy," said Velázquez. "My provision would channel federal dollars to the Island, employing local small firms in the recovery process and on other projects. Federal procurement spending can be a powerful tool for stimulating local economic growth and, right now, Puerto Rico can use all the help it can get."

Currently, a small number of federal contracts are performed in Puerto Rico with the Island ranking 50th out of 56, in comparison to all U.S. states and territories. Between Fiscal Years 2014 and 2015 the total awards of federal contracts to Puerto Rican small businesses declined by nearly $85 million.

Empowering Employees by Supporting Cooperatives

Today, the House also passed Velázquez's provision to assist employees seeking to own a stake in their workplace. Her measure would make it easier for small firms to utilize the Small Business Administration's 7(a) program to finance their transition to employee-owned models such as an Employee Stock Ownership Plan (ESOP) or a cooperative (co-op).

ESOPs and co-ops have a proven track record of success, with companies that transition to the employee-ownership model seeing an increase in productivity by 4 to 5 percent. Velázquez's bill would help employee-owned businesses access capital to cover the high costs of becoming a ESOP, which are often upwards of $80,000.

Velázquez's provision was further prompted by the success of local employee-owned co-operatives in her home district of New York City. She worked closely with Senator Kirsten Gillibrand (D-NY) in crafting this legislation.

"As an upsurge of baby boomer business owners move towards retirement, this bill takes steps to help employees retain their jobs by gaining a stake in their company's ownership," said Velázquez. "We know that workers at employee-owned enterprises tend to be paid better and achieve higher rates of financial security. I am proud to have partnered with Senator Gillibrand to advance this important legislation which will help make the co-operative model more accessible to businesses in New York and throughout the nation."

The NDAA package passed in the House today. It now moves to the U.S. Senate for consideration where it is expected to be approved in coming weeks.

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