[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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