II 

115TH CONGRESS 

1ST SESSION S. 1082 

To provide for the establishment of the United States Employee Ownership 

Bank, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MAY 10, 2017 

Mr. SANDERS (for himself, Mrs. GILLIBRAND, Mr. LEAHY, and Ms. HASSAN) 

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. 

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 Congress finds that— 

8 (1) between January 2000 and January 2017, 

9 the manufacturing sector lost 4,929,000 jobs; 


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1 (2) as of January 2017, only 12,355,000 work2 ers in the United States were employed in the manu3 facturing sector, a lower number than in July 1941; 

4 (3) at the end of 2016, the United States had 

5 a trade deficit of $502,300,000,000, including a 

6 $347,037,900,000 trade deficit with China; 

7 (4) preserving and increasing decent paying 

8 jobs must be a top priority of Congress; 

9 (5) providing loan guarantees, direct loans, and 

10 technical assistance to employees to buy their own 

11 companies will preserve and increase employment in 

12 the United States; and 

13 (6) the time has come to establish the United 

14 States Employee Ownership Bank to preserve and 

15 expand jobs in the United States through Employee 

16 Stock Ownership Plans and worker-owned coopera17 tives. 

18 SEC. 3. DEFINITIONS. 

19 In this Act— 

20 (1) the term ‘‘Bank’’ means the United States 

21 Employee Ownership Bank established under section 

22 4; 

23 (2) the term ‘‘eligible worker-owned coopera24 tive’’ has the meaning given the term in section 

25 1042(c)(2) of the Internal Revenue Code of 1986; 


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1 (3) the term ‘‘employee stock ownership plan’’ 

2 has the meaning given the term in section 

3 4975(e)(7) of the Internal Revenue Code of 1986; 

4 and 

5 (4) the term ‘‘Secretary’’ means the Secretary 

6 of the Treasury. 

7 SEC. 4. ESTABLISHMENT OF UNITED STATES EMPLOYEE 

8 OWNERSHIP BANK WITHIN THE DEPART9 MENT OF THE TREASURY. 

10 (a) ESTABLISHMENT OF BANK.— 

11 (1) IN GENERAL.—Before the end of the 90-day 

12 period beginning on the date of enactment of this 

13 Act, the Secretary shall establish the United States 

14 Employee Ownership Bank to foster increased em15 ployee ownership of United States companies and 

16 greater employee participation in company decision17 making throughout the United States. 

18 (2) ORGANIZATION OF THE BANK.— 

19 (A) MANAGEMENT.—The Secretary shall 

20 appoint a Director to serve as the head of the 

21 Bank, who shall serve at the pleasure of the 

22 Secretary. 

23 (B) STAFF.—The Director appointed 

24 under subparagraph (A) may select, appoint, 

25 employ, and fix the compensation of such emVerDate Sep 11 2014 00:06 May 13, 2017 Jkt 069200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1082.IS S1082

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1 ployees as are necessary to carry out the func2 tions of the Bank. 

3 (b) DUTIES OF BANK.—The Bank is authorized to 

4 provide direct loans and loan guarantees, which may be 

5 subordinated to the interests of all other creditors— 

6 (1) to purchase a company through an em7 ployee stock ownership plan or an eligible worker8 owned cooperative, which shall be at least 51 percent 

9 employee owned, or will become at least 51 percent 

10 employee owned as a result of financial assistance 

11 from the Bank; 

12 (2) to allow a company that is less than 51 per13 cent employee owned to become at least 51 percent 

14 employee owned; 

15 (3) to allow a company that is already at least 

16 51 percent employee owned to increase the level of 

17 employee ownership at the company; and 

18 (4) to allow a company that is already at least 

19 51 percent employee owned to expand operations 

20 and increase or preserve employment. 

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

22 subordinated loan, or guarantees a loan, under subsection 

23 (b)(1), a business plan shall be submitted to the Bank 

24 that— 

25 (1) shows that— 


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1 (A) not less than 51 percent of all interests 

2 in the company is or will be owned or controlled 

3 by an employee stock ownership plan or eligible 

4 worker-owned cooperative; 

5 (B) the board of directors of the company 

6 is or will be elected by shareholders on a 1 

7 share to 1 vote basis, or by members of the eli8 gible worker-owned cooperative on a 1 member 

9 to 1 vote basis, except that shares held by the 

10 employee stock ownership plan will be voted ac11 cording to section 409(e) of the Internal Rev12 enue Code of 1986, with participants providing 

13 voting instructions to the trustee of the em14 ployee stock ownership plan in accordance with 

15 the terms of the employee stock ownership plan 

16 and the requirements of that section 409(e); 

17 and 

18 (C) all employees will receive basic infor19 mation about company progress and have the 

20 opportunity to participate in day-to-day oper21 ations; and 

22 (2) includes a feasibility study from an objective 

23 third party with a positive determination that the 

24 employee stock ownership plan or eligible worker25 owned cooperative will generate enough of a margin 


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1 to pay back any subordinated loan or loan guarantee 

2 that was made possible through the Bank. 

3 (d) TERMS AND CONDITIONS FOR LOANS AND LOAN

4 GUARANTEES.—Notwithstanding any other provision of 

5 law, a loan that is provided or guaranteed under this sec6 tion shall— 

7 (1) bear interest at an annual rate, as deter8 mined by the Secretary— 

9 (A) in the case of a direct loan under this 

10 section— 

11 (i) sufficient to cover the cost of bor12 rowing to the Department of the Treasury 

13 for obligations of comparable maturity; or 

14 (ii) of 4 percent; and 

15 (B) in the case of a loan guaranteed under 

16 this section, in an amount that is equal to the 

17 current applicable market rate for a loan of 

18 comparable maturity; and 

19 (2) have a term not to exceed 12 years. 

20 SEC. 5. EMPLOYEE RIGHT OF FIRST REFUSAL BEFORE 

21 PLANT OR FACILITY CLOSING. 

22 Section 3 of the Worker Adjustment and Retraining 

23 Notification Act (29 U.S.C. 2102) is amended— 

24 (1) in the section heading, by inserting ‘‘; EM25 PLOYEE STOCK OWNERSHIP PLANS OR ELIGIVerDate Sep 11 2014 00:06 May 13, 2017 Jkt 069200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1082.IS S1082

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1 BLE WORKER-OWNED COOPERATIVES’’ after 

2 ‘‘LAYOFFS’’; and 

3 (2) by adding at the end the following: 

4 ‘‘(e) EMPLOYEE STOCK OWNERSHIP PLANS AND EL5 IGIBLE WORKER-OWNED COOPERATIVES.— 

6 ‘‘(1) GENERAL RULE.—Except as provided in 

7 paragraph (2), if an employer orders a plant or facil8 ity closing in connection with the termination of its 

9 operations at such plant or facility, the employer 

10 shall offer its employees an opportunity to purchase 

11 such plant or facility through an employee stock 

12 ownership plan (as that term is defined in section 

13 4975(e)(7) of the Internal Revenue Code of 1986) or 

14 an eligible worker-owned cooperative (as that term is 

15 defined in section 1042(c)(2) of the Internal Rev16 enue Code of 1986) that is at least 51 percent em17 ployee owned. The value of the company which is to 

18 be the subject of such plan or cooperative shall be 

19 the fair market value of the plant or facility, as de20 termined by an appraisal by an independent third 

21 party jointly selected by the employer and the em22 ployees. The cost of the appraisal may be shared 

23 evenly between the employer and the employees. 

24 ‘‘(2) EXEMPTIONS.—Paragraph (1) shall not 

25 apply— 


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1 ‘‘(A) if an employer orders a plant closing, 

2 but will retain the assets of such plant to con3 tinue or begin a business within the United 

4 States; or 

5 ‘‘(B) if an employer orders a plant closing 

6 and such employer intends to continue the busi7 ness conducted at such plant at another plant 

8 within the United States.’’. 

9 SEC. 6. REGULATIONS ON SAFETY AND SOUNDNESS AND 

10 PREVENTING COMPETITION WITH COMMER11 CIAL INSTITUTIONS. 

12 Before the end of the 90-day period beginning on the 

13 date of enactment of this Act, the Secretary shall prescribe 

14 such regulations as are necessary to implement this Act 

15 and the amendments made by this Act, including— 

16 (1) regulations to ensure the safety and sound17 ness of the Bank; and 

18 (2) regulations to ensure that the Bank will not 

19 compete with commercial financial institutions. 

20 SEC. 7. COMMUNITY REINVESTMENT CREDIT. 

21 Section 804 of the Community Reinvestment Act of 

22 1977 (12 U.S.C. 2903) is amended by adding at the end 

23 the following: 

24 ‘‘(e) ESTABLISHMENT OF EMPLOYEE STOCK OWNER25 SHIP PLANS AND ELIGIBLE WORKER-OWNED COOPERAVerDate Sep 11 2014 00:06 May 13, 2017 Jkt 069200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S1082.IS S1082

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1 TIVES.—In assessing and taking into account, under sub2 section (a), the record of a financial institution, the appro3 priate Federal financial supervisory agency may consider 

4 as a factor capital investments, loans, loan participation, 

5 technical assistance, financial advice, grants, and other 

6 ventures undertaken by the institution to support or en7 able employees to establish employee stock ownership 

8 plans or eligible worker-owned cooperatives (as those 

9 terms are defined in sections 4975(e)(7) and 1042(c)(2) 

10 of the Internal Revenue Code of 1986, respectively), that 

11 are at least 51 percent employee owned plans or coopera12 tives.’’. 

13 SEC. 8. AUTHORIZATION OF APPROPRIATIONS. 

14 There are authorized to be appropriated to the Sec15 retary to carry out this Act, $500,000,000 for fiscal year 

16 2018, and such sums as may be necessary for each fiscal 

17 year thereafter. 

Æ 


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