II 

113TH CONGRESS 

2D SESSION S. 2411 

To provide for the establishment of the United States Employee Ownership 

Bank, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 2, 2014 

Mr. SANDERS (for himself, Mr. LEAHY, and Mr. BROWN) 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 April 2014, the 

9 manufacturing sector lost 5,183,000 jobs; 


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1 (2) as of April 2014, only 12,100,000 workers 

2 in the United States were employed in the manufac3 turing sector, lower than June 1941; 

4 (3) at the end of 2013, the United States had 

5 a trade deficit of $474,864,000,000, including a rec6 ordbreaking $318,417,200,000 trade deficit with 

7 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 sec23 tion 4; 


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1 (2) the term ‘‘eligible worker-owned coopera2 tive’’ has the same meaning as in section 1042(c)(2) 

3 of the Internal Revenue Code of 1986; 

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

5 has the same meaning as in section 4975(e)(7) of 

6 the Internal Revenue Code of 1986; and 

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

8 of the Treasury. 

9 SEC. 4. ESTABLISHMENT OF UNITED STATES EMPLOYEE 

10 OWNERSHIP BANK WITHIN THE DEPART11 MENT OF THE TREASURY. 

12 (a) ESTABLISHMENT OF BANK.— 

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

14 period beginning on the date of enactment of this 

15 Act, the Secretary shall establish the United States 

16 Employee Ownership Bank, to foster increased em17 ployee ownership of United States companies and 

18 greater employee participation in company decision19 making throughout the United States. 

20 (2) ORGANIZATION OF THE BANK.— 

21 (A) MANAGEMENT.—The Secretary shall 

22 appoint a Director to serve as the head of the 

23 Bank, who shall serve at the pleasure of the 

24 Secretary. 


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1 (B) STAFF.—The Director may select, ap2 point, employ, and fix the compensation of such 

3 employees as are necessary to carry out the 

4 functions of the Bank. 

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

6 provide loans, on a direct or guaranteed basis, which may 

7 be subordinated to the interests of all other creditors— 

8 (1) to purchase a company through an em9 ployee stock ownership plan or an eligible worker10 owned cooperative, which shall be at least 51 percent 

11 employee owned, or will become at least 51 percent 

12 employee owned as a result of financial assistance 

13 from the Bank; 

14 (2) to allow a company that is less than 51 per15 cent employee owned to become at least 51 percent 

16 employee owned; 

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

18 51 percent employee owned to increase the level of 

19 employee ownership at the company; and 

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

21 51 percent employee owned to expand operations 

22 and increase or preserve employment. 

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

24 subordinated loan or guarantees a loan under subsection 


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

2 that— 

3 (1) shows that— 

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

5 in the company is or will be owned or controlled 

6 by an employee stock ownership plan or eligible 

7 worker-owned cooperative; 

8 (B) the board of directors of the company 

9 is or will be elected by shareholders on a one 

10 share to one vote basis or by members of the 

11 eligible worker-owned cooperative on a one 

12 member to one vote basis, except that shares 

13 held by the employee stock ownership plan will 

14 be voted according to section 409(e) of the In15 ternal Revenue Code of 1986, with participants 

16 providing voting instructions to the trustee of 

17 the employee stock ownership plan in accord18 ance with the terms of the employee stock own19 ership plan and the requirements of that section 

20 409(e); and 

21 (C) all employees will receive basic infor22 mation about company progress and have the 

23 opportunity to participate in day-to-day oper24 ations; 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 Act— 

15 (i) sufficient to cover the cost of bor16 rowing to the Department of the Treasury 

17 for obligations of comparable maturity; or 

18 (ii) of 4 percent; and 

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

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

21 current applicable market rate for a loan of 

22 comparable maturity; and 

23 (2) have a term not to exceed 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 adding at the end 

6 the following: ‘‘; EMPLOYEE STOCK OWNERSHIP

7 PLANS OR ELIGIBLE WORKER-OWNED CO8 OPERATIVES’’; and 

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

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

12 ‘‘(1) GENERAL RULE.—If an employer orders a 

13 plant or facility closing in connection with the termi14 nation of its operations at such plant or facility, the 

15 employer shall offer its employees an opportunity to 

16 purchase such plant or facility through an employee 

17 stock ownership plan (as that term is defined in sec18 tion 4975(e)(7) of the Internal Revenue Code of 

19 1986) or an eligible worker-owned cooperative (as 

20 that term is defined in section 1042(c)(2) of the In21 ternal Revenue Code of 1986) that is at least 51 

22 percent employee owned. The value of the company 

23 which is to be the subject of such plan or cooperative 

24 shall be the fair market value of the plant or facility, 

25 as determined by an appraisal by an independent 

26 third party jointly selected by the employer and the 


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1 employees. The cost of the appraisal may be shared 

2 evenly between the employer and the employees. 

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

4 apply— 

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

6 but will retain the assets of such plant to con7 tinue or begin a business within the United 

8 States; or 

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

10 and such employer intends to continue the busi11 ness conducted at such plant at another plant 

12 within the United States.’’. 

13 SEC. 6. REGULATIONS ON SAFETY AND SOUNDNESS AND 

14 PREVENTING COMPETITION WITH COMMER15 CIAL INSTITUTIONS. 

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

17 date of enactment of this Act, the Secretary of the Treas18 ury shall prescribe such regulations as are necessary to 

19 implement this Act and the amendments made by this Act, 

20 including— 

21 (1) regulations to ensure the safety and sound22 ness of the Bank; and 

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

24 compete with commercial financial institutions. 


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1 SEC. 7. COMMUNITY REINVESTMENT CREDIT. 

2 Section 804 of the Community Reinvestment Act of 

3 1977 (12 U.S.C. 2903) is amended by adding at the end 

4 the following: 

5 ‘‘(e) ESTABLISHMENT OF EMPLOYEE STOCK OWNER6 SHIP PLANS AND ELIGIBLE WORKER-OWNED COOPERA7 TIVES.—In assessing and taking into account, under sub8 section (a), the record of a financial institution, the appro9 priate Federal financial supervisory agency may consider 

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

11 technical assistance, financial advice, grants, and other 

12 ventures undertaken by the institution to support or en13 able employees to establish employee stock ownership 

14 plans or eligible worker-owned cooperatives (as those 

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

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

17 are at least 51 percent employee owned plans or coopera18 tives.’’. 

19 SEC. 8. AUTHORIZATION OF APPROPRIATIONS. 

20 There are authorized to be appropriated to the Sec21 retary to carry out this Act, $500,000,000 for fiscal year 

22 2015, and such sums as may be necessary for each fiscal 

23 year thereafter. 

Æ 


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