[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.
                                 <all>