II 

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. 

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 2019, 

9 the manufacturing sector lost 4,458,000 jobs; 


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1 (2) as of January 2019, only 12,826,000 work2 ers in the United States were employed in the manu3 facturing sector, a lower number than in December 

4 1941; 

5 (3) at the end of 2018, the United States had 

6 a trade deficit of $621,000,000,000, including a 

7 record $419,162,000,000 trade deficit with China; 

8 (4) preserving and increasing decent paying 

9 jobs must be a top priority of Congress; 

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

11 technical assistance to employees to buy their own 

12 companies will preserve and increase employment in 

13 the United States; and 

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

15 States Employee Ownership Bank to preserve and 

16 expand jobs in the United States through Employee 

17 Stock Ownership Plans and worker-owned coopera18 tives. 

19 SEC. 3. DEFINITIONS. 

20 In this Act— 

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

22 Employee Ownership Bank established under section 

23 4; 


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1 (2) the term ‘‘eligible worker-owned coopera2 tive’’ has the meaning given the term in section 

3 1042(c)(2) of the Internal Revenue Code of 1986; 

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

5 has the meaning given the term in section 

6 4975(e)(7) of the Internal Revenue Code of 1986; 

7 and 

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

9 of the Treasury. 

10 SEC. 4. ESTABLISHMENT OF UNITED STATES EMPLOYEE 

11 OWNERSHIP BANK WITHIN THE DEPART12 MENT OF THE TREASURY. 

13 (a) ESTABLISHMENT OF BANK.— 

14 (1) IN GENERAL.—Not later than 90 days after 

15 the date of enactment of this Act, the Secretary 

16 shall establish the United States Employee Owner17 ship Bank to foster increased employee ownership of 

18 United States companies and greater employee par19 ticipation in company decisionmaking throughout 

20 the United States. 

21 (2) ORGANIZATION OF THE BANK.— 

22 (A) MANAGEMENT.—The Secretary shall 

23 appoint a Director to serve as the head of the 

24 Bank, who shall serve at the pleasure of the 

25 Secretary. 


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1 (B) STAFF.—The Director appointed 

2 under subparagraph (A) may select, appoint, 

3 employ, and fix the compensation of such em4 ployees as are necessary to carry out the func5 tions of the Bank. 

6 (b) DUTIES OF BANK.—The Bank shall provide di7 rect loans and loan guarantees, which may be subordi8 nated to the interests of all other creditors— 

9 (1) to purchase a company through an em10 ployee stock ownership plan or an eligible worker11 owned cooperative, which shall be not less than 51 

12 percent employee-owned, or will become not less 

13 than 51 percent employee-owned as a result of fi14 nancial assistance from the Bank; 

15 (2) to allow a company that is less than 51 per16 cent employee-owned to become not less than 51 per17 cent employee-owned; 

18 (3) to allow a company that is already not less 

19 than 51 percent employee-owned to increase the level 

20 of employee ownership at the company; and 

21 (4) to allow a company that is already not less 

22 than 51 percent employee-owned to expand oper23 ations and increase or preserve employment. 

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

25 subordinated loan or guarantees a loan under subsection 


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1 (b)(1), the company to which the loan or loan guarantee 

2 would be provided shall submit to the Bank a business 

3 plan that— 

4 (1) shows that— 

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

6 in the company is or will be owned or controlled 

7 by an employee stock ownership plan or an eli8 gible worker-owned cooperative; 

9 (B) the board of directors of the company 

10 is or will be elected by shareholders on a 1 

11 share to 1 vote basis, or by members of the eli12 gible worker-owned cooperative on a 1 member 

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

14 employee stock ownership plan will be voted ac15 cording to section 409(e) of the Internal Rev16 enue Code of 1986, with participants providing 

17 voting instructions to the trustee of the em18 ployee stock ownership plan in accordance with 

19 the terms of the employee stock ownership plan 

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

21 and 

22 (C) all employees of the company shall re23 ceive basic information about company progress 

24 and have the opportunity to participate in day25 to-day operations; and 


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1 (2) includes a feasibility study from an objective 

2 third party with a positive determination that the 

3 employee stock ownership plan or eligible worker4 owned cooperative will generate enough of a margin 

5 to pay back any loan, subordinated loan, or loan 

6 guarantee that was made possible through the Bank. 

7 (d) TERMS AND CONDITIONS FOR LOANS AND LOAN

8 GUARANTEES.—Notwithstanding any other provision of 

9 law, a loan that is provided or guaranteed under this sec10 tion shall— 

11 (1) bear interest at an annual rate, as deter12 mined by the Secretary— 

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

14 section— 

15 (i) that is sufficient to cover the cost 

16 of borrowing to the Department of the 

17 Treasury for obligations of comparable ma18 turity; or 

19 (ii) of 4 percent; and 

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

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

22 current applicable market rate for a loan of 

23 comparable maturity; and 

24 (2) have a term of not longer than 12 years. 


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1 SEC. 5. EMPLOYEE RIGHT OF FIRST REFUSAL BEFORE 

2 PLANT OR FACILITY CLOSING. 

3 Section 3 of the Worker Adjustment and Retraining 

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

5 (1) in the section heading, by inserting ‘‘; EM6 PLOYEE STOCK OWNERSHIP PLANS OR ELIGI7 BLE WORKER-OWNED COOPERATIVES’’ after 

8 ‘‘LAYOFFS’’; and 

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

10 ‘‘(e) EMPLOYEE STOCK OWNERSHIP PLANS AND EL11 IGIBLE WORKER-OWNED COOPERATIVES.— 

12 ‘‘(1) IN GENERAL.— 

13 ‘‘(A) OPPORTUNITY TO PURCHASE.—Ex14 cept as provided in paragraph (2), if an em15 ployer orders a plant or facility closing in con16 nection with the termination of the operations 

17 of the employer at that plant or facility, the 

18 employer shall offer the employees of the em19 ployer an opportunity to purchase that plant or 

20 facility through an employee stock ownership 

21 plan (as that term is defined in section 

22 4975(e)(7) of the Internal Revenue Code of 

23 1986) or an eligible worker-owned cooperative 

24 (as that term is defined in section 1042(c)(2) of 

25 the Internal Revenue Code of 1986) that is not 

26 less than 51 percent employee-owned. 


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1 ‘‘(B) DETERMINATION OF VALUE.—The 

2 value of the company that is to be the subject 

3 of a plan or cooperative described in subpara4 graph (A) shall be the fair market value of the 

5 plant or facility, as determined by an ap6 praisal— 

7 ‘‘(i) conducted by an independent 

8 third party jointly selected by an employer 

9 described in that subparagraph and the 

10 employees of that employer; and 

11 ‘‘(ii) the cost of which may be shared 

12 evenly between the employer and the em13 ployees. 

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

15 apply— 

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

17 but will retain the assets of that plant to con18 tinue or begin a business within the United 

19 States; or 

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

21 and that employer intends to continue the busi22 ness conducted at that plant at another plant 

23 within the United States.’’. 


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1 SEC. 6. REGULATIONS ON SAFETY AND SOUNDNESS AND 

2 PREVENTING COMPETITION WITH COMMER3 CIAL INSTITUTIONS. 

4 Not later than 90 days after the date of enactment 

5 of this Act, the Secretary shall prescribe such regulations 

6 as are necessary to implement this Act and the amend7 ments made by this Act, including regulations to ensure— 

8 (1) the safety and soundness of the Bank; and 

9 (2) that the Bank will not compete with com10 mercial financial institutions. 

11 SEC. 7. COMMUNITY REINVESTMENT CREDIT. 

12 Section 804 of the Community Reinvestment Act of 

13 1977 (12 U.S.C. 2903) is amended by adding at the end 

14 the following: 

15 ‘‘(e) ESTABLISHMENT OF EMPLOYEE STOCK OWNER16 SHIP PLANS AND ELIGIBLE WORKER-OWNED COOPERA17 TIVES.—In assessing and taking into account, under sub18 section (a), the record of a financial institution, the appro19 priate Federal financial supervisory agency may consider 

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

21 technical assistance, financial advice, grants, and other 

22 ventures undertaken by the institution to support or en23 able employees to establish employee stock ownership 

24 plans or eligible worker-owned cooperatives (as those 

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

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


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1 are not less than 51 percent employee-owned plans or co2 operatives.’’. 

3 SEC. 8. AUTHORIZATION OF APPROPRIATIONS. 

4 There are authorized to be appropriated to the Sec5 retary to carry out this Act, $500,000,000 for fiscal year 

6 2020, and such sums as may be necessary for each fiscal 

7 year thereafter. 

Æ 


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