[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 3419 Introduced in Senate (IS)]

112th CONGRESS
  2d Session
                                S. 3419

    To provide for the establishment of the United States Employee 
                Ownership Bank, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 23, 2012

Mr. Sanders (for himself, Mr. Leahy, Mr. Brown of Ohio, Mr. Blumenthal, 
and Mr. Akaka) 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 January 2000 and June 2012, the manufacturing 
        sector lost 5,330,000 jobs;
            (2) as of June 2012, fewer than 12,000,000 workers in the 
        United States were employed in the manufacturing sector, the 
        fewest number of factory jobs since May 1941;
            (3) at the end of 2011, the United States had a trade 
        deficit of more than $559,956,000,000, including a record-
        breaking $295,456,500,000 trade deficit with China;
            (4) preserving and increasing decent paying jobs must be a 
        top priority of Congress;
            (5) 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
            (6) the time has come to establish the United States 
        Employee Ownership Bank to preserve and expand jobs in the 
        United States through Employee Stock Ownership Plans and 
        worker-owned cooperatives.

SEC. 3. DEFINITIONS.

    In this Act--
            (1) the term ``Bank'' means the United 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 decisionmaking 
        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 2013, and such sums as may 
be necessary thereafter.
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