II

103D CONGRESS

2D SESSION S. 1870

To provide State programs to encourage employee ownership and participation

in business decisionmaking throughout the United States.

IN THE SENATE OF THE UNITED STATES

FEBRUARY 24 (legislative day, FEBRUARY 22), 1994

Mr. BINGAMAN introduced the following bill; which was read twice and

referred to the Committee on Labor and Human Resources

A BILL

To provide State programs to encourage employee ownership

and participation in business decisionmaking throughout

the United States.

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

3 SECTION 1. PROGRAMS REGARDING EMPLOYEE OWNER4 SHIP AND PARTICIPATION.

5 (a) ESTABLISHMENT OF PROGRAM.—Not later than

6 180 days after the date of the enactment of this Act, the

7 Secretary of Labor (referred to in this Act as the ‘‘Sec8 retary’’) shall establish a program to facilitate the estab9 lishment of State programs to foster increased employee
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1 ownership and greater employee participation in business

2 decisionmaking throughout the United States.

3 (b) PURPOSE OF PROGRAM.—The Secretary shall es4 tablish the program under subsection (a) to encourage

5 State programs which focus on the following:

6 (1) Activities involving education and outreach

7 to inform individuals about the possibilities and ben8 efits of employee ownership, gainsharing, and par9 ticipation in business decisionmaking, including fi10 nancial education.

11 (2) Activities involving technical assistance to

12 assist employee efforts to become business owners.

13 (3) Training activities for employees and em14 ployers with respect to methods of employee partici15 pation in business decisionmaking.

16 (4) Activities involving training other organiza17 tions to apply for funding under this section.

18 (c) PROGRAM DETAILS.—In focusing on activities re19 ferred to in subsection (b), the Secretary may include in

20 the program provisions that would—

21 (1) in the case of activities under subsection

22 (b)(1)—

23 (A) target key groups such as retiring

24 business owners, unions, managers, trade asso25 ciations, and community organizations;
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1 (B) encourage cooperation in organizing

2 workshops and conferences; and

3 (C) provide for the preparation and dis4 tribution of materials concerning employee own5 ership and participation;

6 (2) in the case of activities under subsection

7 (b)(2)—

8 (A) provide for the performance of

9 prefeasibility assessments;

10 (B) provide assistance in the funding of

11 objective third party feasibility studies; and

12 (C) provide a data bank to help employees

13 find legal, financial, and technical advice in con14 nection with company ownership;

15 (3) in the case of activities under subsection

16 (b)(3)—

17 (A) provide for courses on employee par18 ticipation; and

19 (B) provide for the development and fos20 tering of networks of employee-owned compa21 nies to spread the use of successful participa22 tion techniques; and

23 (4) in the case of activities under subsection

24 (b)(4)—
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1 (A) provide for visits to existing programs

2 qualified under this Act by staff from new pro3 grams receiving funding under this Act; and

4 (B) provide materials to be used by organi5 zations qualified under this Act.

6 (d) REGULATIONS.—Regulations issued by the Sec7 retary pursuant to this Act shall include provisions assur8 ing that any program within the several States established

9 for the purposes of this Act be—

10 (1) proactive in encouraging actions and activi11 ties that will promote and encourage employee own12 ership of companies and participation in decision13 making in such companies; and

14 (2) comprehensive in emphasizing both em15 ployee ownership of companies and employee partici16 pation in company decisionmaking so as to boost

17 productivity and broaden capital ownership.

18 (e) GRANTS.—Any program established pursuant to

19 subsection (a) shall provide for grants to the program

20 within the several States in accordance with section 4.

21 SEC. 2. OFFICE OF EMPLOYEE OWNERSHIP AND PARTICI22 PATION.

23 (a) ESTABLISHMENT.—The Secretary shall establish,

24 within the Department of Labor, the Office of Employee

25 Ownership and Participation (hereafter referred to as the
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1 ‘‘Office’’) to promote employee ownership, gainsharing,

2 and employee participation in company decisionmaking.

3 (b) FUNCTIONS.—The functions of the Office are

4 to—

5 (1) support programs within the several States

6 approved by the Secretary as being in compliance

7 with the program established pursuant to section 1;

8 and

9 (2) facilitate the formation of new programs

10 within the several States for the purpose of accom11 plishing the goals of this Act.

12 (c) DUTIES.—In carrying out its functions under

13 subsection (b), the Office shall—

14 (1) in the case of activities under subsection

15 (b)(1), support those programs within the several

16 States that are designed to achieve the goals and

17 purposes set forth in this Act and to provide such

18 support by—

19 (A) making matching Federal grants under

20 section 4; and

21 (B) acting as a clearinghouse on tech22 niques employed by the programs within the

23 several States and disseminating information to

24 such programs, or funding such information
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1 gathering and dissemination programs by

2 groups outside the Office; and

3 (2) in the case of activities under subsection

4 (b)(2), facilitate the formation of new programs by

5 encouraging the establishment of such programs in

6 each of the 50 States, including the holding or fund7 ing of an annual conference to bring together rep8 resentatives from States with existing programs and

9 representatives from States without such existing

10 programs.

11 SEC. 3. ORGANIZATION OF THE OFFICE.

12 (a) DIRECTOR.—There shall be at the head of the

13 Office a Director of Employee Ownership and Participa14 tion (hereafter referred to as the ‘‘Director’’) who shall

15 be appointed by the Secretary.

16 (b) EMPLOYEES.—In carrying out the functions of

17 the Office, the Director may select, appoint, employ, and

18 fix the compensation of such employees as shall be nec19 essary to carry out the functions of the Office.

20 SEC. 4. GRANTS.

21 (a) IN GENERAL.—For the purpose of making grants

22 authorized under the program established pursuant to sec23 tion 1, the Office is authorized to make grants for use

24 in connection with programs within the several States for

25 any of the following activities:
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1 (1) Education and outreach.

2 (2) Participation training.

3 (3) Technical studies, including prefeasibility

4 and feasibility studies.

5 (4) Activities facilitating cooperation among

6 employee ownership firms.

7 (5) Training for newly formed organizations to

8 be provided by existing organizations qualified under

9 this Act, except that such funding shall not exceed

10 10 percent of the total grants under this Act.

11 (b) MATCHING.—

12 (1) IN GENERAL.—Except as provided in para13 graph (2), grants under this section shall be made

14 by the Office on a matching basis, $1 of Federal

15 money for every 50 cents of non-Federal money.

16 (2) GRANTS FOR CERTAIN TRAINING.—Grants

17 for activities described in subsection (a)(5) shall not

18 require non-Federal matching contributions.

19 (c) APPLICATIONS.—The Office shall prescribe the

20 form and information necessary for applications for grants

21 under this section.

22 (d) AMOUNTS AND CONDITIONS.—The Office shall

23 determine the amounts and the conditions for grants made

24 under this section.

25 (e) GRANTS ON BEHALF OF OTHER ENTITIES.—
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1 (1) STATE APPLICATIONS.—Each of the several

2 States may sponsor and submit applications on be3 half of units of State or local governments, State4 supported institutions of higher education, and non5 profit organization programs meeting the require6 ments of this Act, but in no case shall the aggregate

7 amounts of these grants made to any unit of State

8 or local government, State-supported institutions of

9 higher education, or nonprofit organization pro10 grams exceed the amount set forth in subsection (g).

11 (2) APPLICATIONS BY ENTITIES.—In any case

12 in which a State fails to establish a program pursu13 ant to this Act during any fiscal year, the Secretary

14 shall allow in the subsequent fiscal year entities de15 scribed in paragraph (1) to make applications for

16 grants on their own initiative. States may submit

17 applications to the program in subsequent years but

18 may not screen applications by such entities before

19 submission to the program.

20 (f) ANNUAL REPORT.—Each grant recipient shall

21 submit an annual report to the Office setting forth how

22 all moneys from grants pursuant to this Act were ex23 pended during the 12-month period preceding the date of

24 the submission of the report.
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1 (g) LIMITATIONS.—Grants to each of the recipients

2 shall be limited for each fiscal year as follows:

3 (1) Fiscal year 1995, not to exceed, in the ag4 gregate $200,000.

5 (2) Fiscal year 1996, not to exceed, in the ag6 gregate $220,000.

7 (3) Fiscal year 1997, not to exceed, in the ag8 gregate $242,000.

9 (4) Fiscal year 1998, not to exceed, in the ag10 gregate $266,200.

11 (5) Fiscal year 1999, not to exceed, in the ag12 gregate $292,000.

13 SEC. 5. AUTHORIZATIONS.

14 (a) IN GENERAL.—For the purpose of making grants

15 pursuant to section 4, there are authorized to be appro16 priated the following:

17 (1) For fiscal year 1995, $2,500,000.

18 (2) For fiscal year 1996, $4,250,000.

19 (3) For fiscal year 1997, $6,000,000.

20 (4) For fiscal year 1998, $7,750,000.

21 (5) For fiscal year 1999, $9,500,000.

22 (b) ADMINISTRATIVE EXPENSES.—For the purpose

23 of funding the Office, there is authorized to be appro24 priated for each of the fiscal years 1995 through 1999

25 an amount not in excess of the lesser of—
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1 (1) $250,000, or

2 (2) 7.5 percent of the maximum amount avail3 able under subsection (a).

4 SEC. 6. OFFICE REPORTING.

5 Not later than the expiration of the 36-month period

6 following the date of enactment of this Act, the Director

7 shall report to the Congress on the progress of employee

8 ownership and participation in businesses in the United

9 States. The report shall include a critical cost and benefit

10 analysis of program activities.

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