I 

108TH CONGRESS 

1ST SESSION H. R. 2969

To provide for the establishment of the United States Employee Ownership 

Bank, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 25, 2003

Mr. SANDERS (for himself, Mr. ROHRABACHER, Mrs. MALONEY, Mr. MANZULLO, Mr. MICHAUD, Mr. GOODE, Mr. LIPINSKI, Ms. LEE, Mr. RYAN

of Ohio, Mr. LANTOS, Mr. ANDREWS, Mr. SERRANO, Mr. GRIJALVA, Mr. 

OWENS, Ms. KILPATRICK, Mrs. CHRISTENSEN, and Ms. BORDALLO) introduced the following bill; which was referred to the Committee on Financial Services 

A BILL

To provide for the establishment of the United States 

Employee Ownership Bank, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘United States Em5 ployee Ownership Bank Act’’. 

6 SEC. 2. FINDINGS. 

7 The Congress finds as follows: 
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1 (1) Over the past 2 years, the United States 

2 has lost more than 2,000,000 decent-paying manu3 facturing jobs. 

4 (2) With 14,731,000 total manufacturing jobs, 

5 the United States now has the lowest number of fac6 tory jobs since October, 1958. 

7 (3) According to Forrester Research, ‘‘Over the 

8 next 15 years, 3,300,000 United States service in9 dustry jobs and $136,000,000,000 in wages will 

10 move offshore to countries like India, Russia, China 

11 and the Philippines. The IT industry will lead the 

12 initial overseas exodus.’’. 

13 (4) At the end of 2002, the United States had 

14 a record-breaking trade deficit of $435,200,000,000, 

15 including a $103,100,000,000 trade deficit with 

16 China. 

17 (5) Preserving and increasing decent-paying 

18 jobs must be a top priority of the United States 

19 Congress. 

20 (6) Providing loan guarantees, direct loans, and 

21 technical assistance to employees to buy their own 

22 companies will preserve and increase employment in 

23 the United States. 

24 (7) Just like the United States Export-Import 

25 Bank was created in 1934 during the midst of the 
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1 Great Depression as a way to increase United States 

2 jobs through exports, the time has come to establish 

3 the United States Employee Ownership Bank within 

4 the Department of the Treasury to preserve and ex5 pand jobs in the United States. 

6 SEC. 3. ESTABLISHMENT OF UNITED STATES EMPLOYEE 

7 OWNERSHIP BANK WITHIN THE DEPART8 MENT OF THE TREASURY. 

9 (a) ESTABLISHMENT REQUIRED.—Before the end of 

10 the 30-day period beginning on the date of the enactment 

11 of this Act, the Secretary of the Treasury (hereinafter in 

12 this Act referred to as the ‘‘Secretary’’) shall establish the 

13 United States Employee Ownership Bank (hereinafter re14 ferred to as the ‘‘Bank’’) to foster increased employee 

15 ownership and greater employee participation in company 

16 decision-making throughout the United States. 

17 (b) DUTIES OF BANK.—The Secretary shall establish 

18 such Bank to provide the following: 

19 (1) Loans subordinated to the interests of all 

20 other creditors, loan guarantees, and technical as21 sistance, on such terms and subject to such condi22 tions as the Secretary determines to be appropriate, 

23 to employees to purchase a business through an em24 ployee stock ownership plan or eligible worker-owned 
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1 cooperative that are at least 51 percent employee 

2 owned. 

3 (2) Grants to States and nonprofit and coopera4 tive organizations with experience in developing em5 ployee-owned businesses and worker-owned coopera6 tives to provide education and outreach to inform 

7 people about the possibilities and benefits of em8 ployee ownership of companies, gain sharing, and 

9 participation in company decision-making, including 

10 some financial education. 

11 (3) Grants to States and nonprofit and coopera12 tive organizations with experience in developing em13 ployee-owned businesses and worker-owned coopera14 tives to provide technical assistance to assist em15 ployee efforts to become business owners. 

16 (4) Grants to States and nonprofit and coopera17 tive organizations with experience in developing em18 ployee-owned businesses and worker-owned coopera19 tives to provide participation training to teach em20 ployees and employers methods of employee partici21 pation in company decision-making. 

22 (5) Grants to States and nonprofit and coopera23 tive organizations with experience in developing em24 ployee-owned businesses and worker-owned coopera25 tives to conduct objective third party pre-feasibility
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1 and feasibility studies to determine if employees who 

2 would like to start-up employee stock ownership 

3 plans or worker cooperatives would be able to make 

4 a profit. 

5 (c) PRECONDITIONS.—Before the Bank makes any 

6 subordinated loan or loan guarantee under subsection 

7 (b)(1), the employees shall submit to the Bank the fol8 lowing: 

9 (1) A business plan that shows that—

10 (A) at least 51 percent of all interests in 

11 the employee stock ownership plan or eligible 

12 worker-owned cooperative is owned or controlled 

13 by employees; 

14 (B) the Board of Directors of the employee 

15 stock ownership plan or eligible worker-owned 

16 cooperative is elected by all of the employees; 

17 and 

18 (C) all employees receive basic information 

19 about company progress and have the oppor20 tunity to participate in day-to-day operations. 

21 (2) A feasibility study from an objective third 

22 party with a positive determination that the em23 ployee stock ownership plan or eligible worker owned 

24 cooperative will be profitable enough to pay back any 

25 loan, subordinated loan or loan guarantee that was 
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1 made possible through the United States Employee 

2 Ownership Bank. 

3 (d) INSURANCE OF SUBORDINATED LOANS AND

4 LOAN GUARANTEES.—

5 (1) IN GENERAL.—The Bank shall, with respect 

6 to any subordinated loan or loan guarantee provided 

7 under this Act, insure such loan or loan guarantee 

8 against the nonrepayment of the outstanding bal9 ance of the loan. 

10 (2) ANNUAL PREMIUMS.—The Bank shall fix 

11 the annual premium for the insurance of each subor12 dinated loan or loan guarantee under this subsection 

13 to be paid by the borrower in such manner and in 

14 such amount as the Secretary determines to be ap15 propriate. 

16 (3) PREMIUMS AND GUARANTEE FEES AVAIL17 ABLE TO COVER LOSSES.—The premiums collected 

18 by the Bank from insurance issued under this sub19 section and the fees collected by the Bank for loan 

20 guarantees issued under subsection (b) shall be de21 posited in a fund in the Treasury and shall be avail22 able to the Bank to cover any losses incurred by the 

23 Bank in connection with any such loan or loan guar24 antee. 
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1 (e) TECHNICAL ASSISTANCE IN THE DISCRETION OF

2 THE SECRETARY.—In the case of activities under sub3 section (b)(3), the Secretary may require the Bank to take 

4 the following actions: 

5 (1) Provide for the targeting of key groups such 

6 as retiring business owners, unions, managers, trade 

7 associations, and community organizations. 

8 (2) Encourage cooperation in organizing work9 shops and conferences. 

10 (3) Provide for the preparation and distribution 

11 of materials concerning employee ownership and par12 ticipation. 

13 (f) PARTICIPATION TRAINING IN THE DISCRETION

14 OF THE SECRETARY.—In the case of activities under sub15 section (b)(4), the Secretary may require the Bank to take 

16 the following actions: 

17 (1) Provide for courses on employee participa18 tion. 

19 (2) Provide for the development and fostering 

20 of networks of employee owned companies to spread 

21 the use of successful participation techniques. 
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1 SEC. 4. REGULATIONS TO ENSURE THE SAFETY AND 

2 SOUNDNESS OF THE UNITED STATES EM3 PLOYEE OWNERSHIP BANK. 

4 Before the end of the 30-day period beginning the 

5 date of the enactment of this Act, the Secretary of the 

6 Treasury shall prescribe regulations to ensure the safety 

7 and soundness of the United States Employee Ownership 

8 Bank. 

9 SEC. 5. REGULATIONS TO ENSURE THE UNITED STATES EM10 PLOYEE OWNERSHIP BANK WILL NOT COM11 PETE WITH COMMERCIAL FINANCIAL INSTI12 TUTIONS. 

13 Before the end of the 30-day period beginning the 

14 date of the enactment of this Act, the Secretary of the 

15 Treasury shall prescribe regulations to ensure that the 

16 United States Employee Ownership Bank will not compete 

17 with commercial financial institutions. 

18 SEC. 6. COMMUNITY REINVESTMENT CREDIT. 

19 Section 804 of the Community Reinvestment Act of 

20 1977 (12 U.S.C. 2903) is amended by adding at the end 

21 the following new subsection: 

22 ‘‘(d) ESTABLISHMENT OF ESOPS AND EWOCS.—In 

23 assessing and taking into account, under subsection (a), 

24 the record of a financial institution, the appropriate Fed25 eral financial supervisory agency may consider as a factor 

26 capital investments, loans, loan participation, technical as-
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1 sistance, financial advice, grants, and other ventures un2 dertaken by the institution to support or enable manufac3 turing employees to establish employee stock ownership 

4 plans or eligible worker owned cooperatives that are at 

5 least 51 percent employee-owned plans or cooperatives.’’. 

6 SEC. 7. ORGANIZATION OF BANK. 

7 (a) MANAGEMENT.—There shall be at the head of the 

8 Bank, a Director of the United States Employee Owner9 ship Bank (hereinafter in this Act referred to as the ‘‘Di10 rector’’), who shall be appointed by and serve at the pleas11 ure of the Secretary. 

12 (b) STAFF.—The Director may select, appoint, em13 ploy, and fix the compensation of such employees as shall 

14 be necessary to carry out the functions of the Bank. 

15 SEC. 8. AUTHORIZATION OF APPROPRIATIONS. 

16 There are authorized to be appropriated to the Sec17 retary of the Treasury $100,000,000 for each of fiscal 

18 years 2004, 2005, 2006, 2007, and 2008 to carry out the 

19 purposes of this Act.

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