II 

116TH CONGRESS 

2D SESSION S. 4236 

To establish a grant program to encourage the creation and expansion of 

employee stock ownership plans. 

IN THE SENATE OF THE UNITED STATES 

JULY 21, 2020 

Mr. JOHNSON (for himself and Ms. BALDWIN) introduced the following bill; 

which was read twice and referred to the Committee on Finance 

A BILL 

To establish a grant program to encourage the creation and 

expansion of employee stock ownership plans. 

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 ‘‘Temporary Federal 

5 ESOP Grant Program Act of 2020’’. 

6 SEC. 2. GRANT PROGRAM. 

7 (a) ESTABLISHMENT.—Not later than 30 days after 

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

9 the Treasury shall establish the Temporary Federal Em10 ployee Stock Ownership Plan Program, or the ‘‘TemVerDate Sep 11 2014 21:44 Aug 03, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S4236.IS S4236

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1 porary Federal ESOP Program’’, to provide grants to eli2 gible business concerns for purposes of— 

3 (1) establishing; or 

4 (2) increasing the percentage of the eligible 

5 business concern owned by; 

6 an employee stock ownership plan (as defined in section 

7 4975(e)(7) of the Internal Revenue Code of 1986). 

8 (b) ELIGIBLE BUSINESS CONCERN.—For purposes of 

9 this section, the term ‘‘eligible business concern’’ means 

10 a business concern that submits with the grant applica11 tion— 

12 (1) a completed agreement signed by the busi13 ness concern and an employee stock ownership 

14 trust— 

15 (A) establishing an employee stock owner16 ship plan (as defined in section 4975(e)(7) of 

17 the Internal Revenue Code of 1986) which is a 

18 tax credit employee stock ownership plan meet19 ing the requirements of section 409 of the In20 ternal Revenue Code of 1986; or 

21 (B) increasing the percentage of the busi22 ness concern owned by such a plan, if such plan 

23 is already in existence; 

24 (2) supporting documentation for the valuation 

25 of the business concern as determined for purposes 


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1 of such agreement by an independent valuation ex2 pert utilizing generally accepted valuation ap3 proaches (as determined by the Secretary of the 

4 Treasury), or by the trustee of the employee stock 

5 ownership trust if such valuation is certified by such 

6 an independent valuation expert, including filings to 

7 the Internal Revenue Service or the Securities and 

8 Exchange Commission, as applicable; and 

9 (3) a certification that the grant funds will be 

10 used toward the purchase of employer securities, and 

11 that the reduction in cost to the business concern at12 tributable to the grant funds will be used for capital 

13 investment in or replacement and maintenance of 

14 fixed assets, including manufacturing equipment and 

15 tools, computers, land, buildings, facilities, health 

16 and safety equipment, and other similar investments. 

17 (c) GRANT AWARDS.—Based on a determination 

18 made within 15 business days from the date of submission 

19 of an application meeting the requirements of subsection 

20 (b), the Secretary of the Treasury shall award a grant 

21 under the Temporary Federal ESOP Program to a busi22 ness concern in an amount not to exceed the sum of— 

23 (1) $20,000 per employee— 


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1 (A) who is a participant in the employee 

2 stock ownership trust established by such busi3 ness concern; or 

4 (B) whose ownership share in such busi5 ness concern by reason of an existing employee 

6 stock ownership trust is increased; 

7 (2) $50,000 for any costs incurred by the busi8 ness concern and employee stock ownership trust, 

9 and documented in the grant application, in devel10 oping the agreement required under subsection 

11 (b)(1). 

12 (d) TERMINATION.—No grant shall be awarded 

13 under the Temporary Federal ESOP Program after Sep14 tember 30, 2022. 

15 (e) AUTHORIZED TRANSFER OF APPROPRIATIONS.— 

16 The Secretary of the Treasury may transfer any unobli17 gated amount of the appropriation under section 4027 of 

18 the Coronavirus Economic Stabilization Act of 2020 for 

19 the purposes of carrying out the Temporary Federal 

20 ESOP Program. 

21 (f) SECRETARY OF THE TREASURY.—For purposes 

22 of this section, any reference to the Secretary of the 

23 Treasury includes a reference to any delegate of such Sec24 retary. 

Æ 


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