[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 1982 Introduced in Senate (IS)]
110th CONGRESS
1st Session
S. 1982
To provide for the establishment of the United States Employee
Ownership Bank, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
August 2, 2007
Mr. Sanders (for himself and Mr. Leahy) introduced the following bill;
which was read twice and referred to the Committee on Banking, Housing,
and Urban Affairs
_______________________________________________________________________
A BILL
To provide for the establishment of the United States Employee
Ownership Bank, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``United States Employee Ownership
Bank Act''.
SEC. 2. FINDINGS.
Congress finds that--
(1) over the past 6 years, the United States has lost more
than 3,000,000 decent paying manufacturing jobs;
(2) at the end of 2006, the United States had a record-
breaking trade deficit of more than $763,000,000,000, including
a $232,000,000,000 trade deficit with China;
(3) preserving and increasing decent paying jobs must be a
top priority of the United States Congress;
(4) providing loan guarantees, direct loans, and technical
assistance to employees to buy their own companies will
preserve and increase employment in the United States; and
(5) just like the United States Export-Import Bank was
created in 1934 during the midst of the Great Depression as a
way to increase United States jobs through exports, the time
has come to establish the United States Employee Ownership Bank
within the Department of the Treasury to preserve and expand
jobs in the United States.
SEC. 3. ESTABLISHMENT OF UNITED STATES EMPLOYEE OWNERSHIP BANK WITHIN
THE DEPARTMENT OF THE TREASURY.
(a) Establishment Required.--Before the end of the 90-day period
beginning on the date of enactment of this Act, the Secretary of the
Treasury (in this Act referred to as the ``Secretary'') shall establish
the United States Employee Ownership Bank (in this Act referred to as
the ``Bank'') to foster increased employee ownership and greater
employee participation in company decisionmaking throughout the United
States.
(b) Duties of Bank.--The Bank shall provide--
(1) loans subordinated to the interests of all other
creditors and loan guarantees, to employees to purchase a
business through an employee stock ownership plan or eligible
worker-owned cooperative, which shall be at least 51 percent
employee owned; and
(2) grants to States and nonprofit and cooperative
organizations with experience in developing employee-owned
businesses and worker-owned cooperatives--
(A) to provide education and outreach to inform
people about the possibilities and benefits of employee
ownership of companies, gain sharing, and participation
in company decisionmaking, including some financial
education;
(B) to provide technical assistance to assist
employee efforts to become business owners;
(C) to provide participation training to teach
employees and employers methods of employee
participation in company decisionmaking; and
(D) to conduct objective third party pre-
feasibility and feasibility studies to determine if
employees who would like to start up employee stock
ownership plans or worker cooperatives would be able to
create a sustainable business.
(c) Preconditions.--Before the Bank makes any subordinated loan or
loan guarantee under subsection (b)(1), the employees shall submit to
the Bank--
(1) a business plan that shows that--
(A) not less than 51 percent of all interests in
the company is owned or controlled by an employee stock
ownership plan or eligible worker-owned cooperative;
(B) the board of directors of the company is
elected by all of the participants in the employee
stock ownership plan, as well as other shareholders, or
by the members of the eligible worker-owned
cooperative; and
(C) all employees receive basic information about
company progress and have the opportunity to
participate in day-to-day operations; and
(2) a feasibility study from an objective third party with
a positive determination that the employee stock ownership plan
or eligible worker owned cooperative will generate enough
margin to pay back any loan, subordinated loan, or loan
guarantee that was made possible through the Bank.
(d) Insurance of Subordinated Loans and Loan Guarantees.--
(1) In general.--The Bank shall, with respect to any
subordinated loan or loan guarantee provided under this Act,
insure such loan or loan guarantee against the nonrepayment of
the outstanding balance of the loan.
(2) Annual premiums.--The Bank shall fix the annual premium
for the insurance of each subordinated loan or loan guarantee
under this subsection to be paid by the borrower, in such
manner and in such amount as to cover no more than the cost of
the insurance.
(3) Premiums and guarantee fees available to cover
losses.--The premiums collected by the Bank from insurance
issued under this subsection and the fees collected by the Bank
for loan guarantees issued under subsection (b) shall be
deposited in a fund in the Treasury, and shall be available to
the Bank to cover any losses incurred by the Bank in connection
with any such loan or loan guarantee.
(e) Terms and Conditions for Loans and Loan Guarantees.--
Notwithstanding any other provision of law, a loan or loan guarantee
under subsection (b)(1) shall--
(1) bear interest at an annual rate of, as determined by
the Secretary--
(A) in the case of a direct loan--
(i) the cost of borrowing to the Department
of the Treasury for obligations of comparable
maturity; or
(ii) 4 percent; and
(B) in the case of a guaranteed loan, the current
applicable market rate for a loan of comparable
maturity; and
(2) have a term not to exceed 12 years.
(f) Technical Assistance in the Discretion of the Secretary.--In
the case of activities under subsection (b)(2)(B), the Secretary may
require the Bank--
(1) to provide for the targeting of key groups, such as
retiring business owners, unions, managers, trade associations,
and community organizations;
(2) to encourage cooperation in organizing workshops and
conferences;
(3) to provide for the preparation and distribution of
materials concerning employee ownership and participation; and
(4) to provide training workshops for personnel of State,
nonprofit, and cooperative technical assistance organizations
and to defray part of the costs of an annual meeting of such
organizations to share their experience and best practices.
(g) Participation Training in the Discretion of the Secretary.--In
the case of activities under subsection (b)(2)(C), the Secretary may
require the Bank--
(1) to provide for courses on employee participation; and
(2) to provide for the development and fostering of
networks of employee owned companies to spread the use of
successful participation techniques.
SEC. 4. REGULATIONS.
(a) In General.--Not later than 90 days after the date of enactment
of this Act, the Secretary shall promulgate such regulations as are
necessary to implement this Act.
(b) Content.--Regulations required by subsection (a) shall include
provisions--
(1) to ensure the safety and soundness of the Bank; and
(2) to ensure that the Bank will not compete with
commercial financial institutions;
SEC. 5. ORGANIZATION OF THE BANK.
(a) Management.--There shall be at the head of the Bank, a Director
of the United States Employee Ownership Bank (in this Act referred to
as the ``Director''), who shall be appointed by, and serve at the
pleasure of, the Secretary.
(b) Staff.--The Director may select, appoint, employ, and fix the
compensation of such employees as are necessary to carry out the
functions of the Bank.
SEC. 6. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to the Secretary of the
Treasury, $100,000,000 for fiscal year 2008, and such sums as may be
necessary thereafter to carry out this Act.
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