[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 2914 Introduced in Senate (IS)]
111th CONGRESS
1st Session
S. 2914
To provide for the establishment of the United States Employee
Ownership Bank, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
December 18, 2009
Mr. Sanders (for himself, Mr. Leahy, Mr. Brown, and Mr. Menendez)
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) between December 2007 and October 2009, payroll
employment in the United States fell by 8,200,000;
(2) between January 2000 and October 2009, the
manufacturing sector lost 5,617,000 jobs;
(3) as of October 2009, fewer than 12,000,000 workers in
the United States were employed in the manufacturing sector,
the fewest number of factory jobs since March 1941;
(4) at the end of 2008, the United States had a trade
deficit of more than $695,936,000,000, including a record-
breaking $268,039,800,000 trade deficit with China;
(5) preserving and increasing decent paying jobs must be a
top priority of Congress;
(6) 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
(7) just as the United States Export-Import Bank was
created in 1934 in 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. DEFINITIONS.
In this Act--
(1) the term ``Bank'' means the Unites States Employee
Ownership Bank, established under section 4;
(2) the term ``eligible worker-owned cooperative'' has the
same meaning as in section 1042(c)(2) of the Internal Revenue
Code of 1986;
(3) the term ``employee stock ownership plan'' has the same
meaning as in section 4975(e)(7) of the Internal Revenue Code
of 1986; and
(4) the term ``Secretary'' means the Secretary of the
Treasury.
SEC. 4. ESTABLISHMENT OF UNITED STATES EMPLOYEE OWNERSHIP BANK WITHIN
THE DEPARTMENT OF THE TREASURY.
(a) Establishment of Bank.--
(1) In general.--Before the end of the 90-day period
beginning on the date of enactment of this Act, the Secretary
shall establish the United States Employee Ownership Bank, to
foster increased employee ownership of United States companies
and greater employee participation in company decision making
throughout the United States.
(2) Organization of the bank.--
(A) Management.--The Secretary shall appoint a
Director to serve as the head of the Bank, who shall
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.
(b) Duties of Bank.--The Bank is authorized to provide loans, on a
direct or guaranteed basis, which may be subordinated to the interests
of all other creditors--
(1) to purchase a company through an employee stock
ownership plan or an eligible worker-owned cooperative, which
shall be at least 51 percent employee owned, or will become at
least 51 percent employee owned as a result of financial
assistance from the Bank;
(2) to allow a company that is less than 51 percent
employee owned to become at least 51 percent employee owned;
(3) to allow a company that is already at least 51 percent
employee owned to increase the level of employee ownership at
the company; and
(4) to allow a company that is already at least 51 percent
employee owned to expand operations and increase or preserve
employment.
(c) Preconditions.--Before the Bank makes any subordinated loan or
guarantees a loan under subsection (b)(1), a business plan shall be
submitted to the bank that--
(1) shows that--
(A) not less than 51 percent of all interests in
the company is or will be owned or controlled by an
employee stock ownership plan or eligible worker-owned
cooperative;
(B) the board of directors of the company is or
will be elected by shareholders on a one share to one
vote basis or by members of the eligible worker-owned
cooperative on a one member to one vote basis, except
that shares held by the employee stock ownership plan
will be voted according to section 409(e) of the
Internal Revenue Code of 1986, with participants
providing voting instructions to the trustee of the
employee stock ownership plan in accordance with the
terms of the employee stock ownership plan and the
requirements of that section 409(e); and
(C) all employees will receive basic information
about company progress and have the opportunity to
participate in day-to-day operations; and
(2) includes 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 of a margin to pay back any loan, subordinated
loan, or loan guarantee that was made possible through the
Bank.
(d) Terms and Conditions for Loans and Loan Guarantees.--
Notwithstanding any other provision of law, a loan that is provided or
guaranteed under this section shall--
(1) bear interest at an annual rate, as determined by the
Secretary--
(A) in the case of a direct loan under this Act--
(i) sufficient to cover the cost of
borrowing to the Department of the Treasury for
obligations of comparable maturity; or
(ii) of 4 percent; and
(B) in the case of a loan guaranteed under this
section, in an amount that is equal to the current
applicable market rate for a loan of comparable
maturity; and
(2) have a term not to exceed 12 years.
SEC. 5. EMPLOYEE RIGHT OF FIRST REFUSAL BEFORE PLANT OR FACILITY
CLOSING.
Section 3 of the Worker Adjustment and Retraining Notification Act
(29 U.S.C. 2102) is amended--
(1) in the section heading, by adding at the end the
following: ``; employee stock ownership plans or eligible
worker owned cooperatives''; and
(2) by adding at the end the following:
``(e) Employee Stock Ownership Plans and Eligible Worker-Owned
Cooperatives.--
``(1) General rule.--If an employer orders a plant or
facility closing in connection with the termination of its
operations at such plant or facility, the employer shall offer
its employees an opportunity to purchase such plant or facility
through an employee stock ownership plan (as that term is
defined in section 4975(e)(7) of the Internal Revenue Code of
1986) or an eligible worker-owned cooperative (as that term is
defined in section 1042(c)(2) of the Internal Revenue Code of
1986) that is at least 51 percent employee owned. The value of
the company which is to be the subject of such plan or
cooperative shall be the fair market value of the plant or
facility, as determined by an appraisal by an independent third
party jointly selected by the employer and the employees. The
cost of the appraisal may be shared evenly between the employer
and the employees.
``(2) Exemptions.--Paragraph (1) shall not apply--
``(A) if an employer orders a plant closing, but
will retain the assets of such plant to continue or
begin a business within the United States; or
``(B) if an employer orders a plant closing and
such employer intends to continue the business
conducted at such plant at another plant within the
United States.''.
SEC. 6. REGULATIONS ON SAFETY AND SOUNDNESS AND PREVENTING COMPETITION
WITH COMMERCIAL INSTITUTIONS.
Before the end of the 90-day period beginning on the date of
enactment of this Act, the Secretary of the Treasury shall prescribe
such regulations as are necessary to implement this Act and the
amendments made by this Act, including--
(1) regulations to ensure the safety and soundness of the
Bank; and
(2) regulations to ensure that the Bank will not compete
with commercial financial institutions.
SEC. 7. COMMUNITY REINVESTMENT CREDIT.
Section 804 of the Community Reinvestment Act of 1977 (12 U.S.C.
2903) is amended by adding at the end the following new subsection:
``(l) Establishment of Employee Stock Ownership Plans and Eligible
Worker-Owned Cooperatives.--In assessing and taking into account, under
subsection (a), the record of a financial institution, the appropriate
Federal financial supervisory agency may consider as a factor capital
investments, loans, loan participation, technical assistance, financial
advice, grants, and other ventures undertaken by the institution to
support or enable employees to establish employee stock ownership plans
or eligible worker-owned cooperatives (as those terms are defined in
sections 4975(e)(7) and 1042(c)(2) of the Internal Revenue Code of
1986, respectively), that are at least 51 percent employee-owned plans
or cooperatives.''.
SEC. 8. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to the Secretary to carry
out this Act, $500,000,000 for fiscal year 2010, and such sums as may
be necessary thereafter.
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