II 110th CONGRESS 1st Session S. 1982 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.

1.

Short title

This Act may be cited as the United States Employee Ownership Bank Act.

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.

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.

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;

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.

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.