[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 1661 Introduced in Senate (IS)]
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116th CONGRESS
1st Session
S. 1661
To provide for the establishment of the United States Employee
Ownership Bank, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
May 23 (legislative day, May 22), 2019
Mr. Sanders (for himself, Mrs. Gillibrand, Ms. Hassan, Mrs. Shaheen,
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) between January 2000 and January 2019, the
manufacturing sector lost 4,458,000 jobs;
(2) as of January 2019, only 12,826,000 workers in the
United States were employed in the manufacturing sector, a
lower number than in December 1941;
(3) at the end of 2018, the United States had a trade
deficit of $621,000,000,000, including a record
$419,162,000,000 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
meaning given the term in section 1042(c)(2) of the Internal
Revenue Code of 1986;
(3) the term ``employee stock ownership plan'' has the
meaning given the term 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.--Not later than 90 days after 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 appointed under
subparagraph (A) 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 shall provide direct loans and loan
guarantees, 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 not less than 51 percent employee-owned, or will
become not less than 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 not less than 51 percent employee-
owned;
(3) to allow a company that is already not less than 51
percent employee-owned to increase the level of employee
ownership at the company; and
(4) to allow a company that is already not less than 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), the company to which the
loan or loan guarantee would be provided shall submit to the Bank a
business plan 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 an eligible worker-
owned cooperative;
(B) the board of directors of the company is or
will be elected by shareholders on a 1 share to 1 vote
basis, or by members of the eligible worker-owned
cooperative on a 1 member to 1 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 of the company shall 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
section--
(i) that is 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 of not longer than 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 inserting ``; employee stock
ownership plans or eligible worker-owned cooperatives'' after
``layoffs''; and
(2) by adding at the end the following:
``(e) Employee Stock Ownership Plans and Eligible Worker-Owned
Cooperatives.--
``(1) In general.--
``(A) Opportunity to purchase.--Except as provided
in paragraph (2), if an employer orders a plant or
facility closing in connection with the termination of
the operations of the employer at that plant or
facility, the employer shall offer the employees of the
employer an opportunity to purchase that 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 not less than 51 percent employee-owned.
``(B) Determination of value.--The value of the
company that is to be the subject of a plan or
cooperative described in subparagraph (A) shall be the
fair market value of the plant or facility, as
determined by an appraisal--
``(i) conducted by an independent third
party jointly selected by an employer described
in that subparagraph and the employees of that
employer; and
``(ii) the cost of which 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 that plant to continue or
begin a business within the United States; or
``(B) if an employer orders a plant closing and
that employer intends to continue the business
conducted at that plant at another plant within the
United States.''.
SEC. 6. REGULATIONS ON SAFETY AND SOUNDNESS AND PREVENTING COMPETITION
WITH COMMERCIAL INSTITUTIONS.
Not later than 90 days after the date of enactment of this Act, the
Secretary shall prescribe such regulations as are necessary to
implement this Act and the amendments made by this Act, including
regulations to ensure--
(1) the safety and soundness of the Bank; and
(2) 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:
``(e) 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 not less than 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 2020, and such sums as may
be necessary for each fiscal year thereafter.
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