II 

111TH CONGRESS 

1ST SESSION S. 2914 

To provide for the establishment of the United States Employee Ownership 

Bank, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

DECEMBER 18, 2009 

Mr. SANDERS (for himself, Mr. LEAHY, Mr. BROWN, and Mr. MENENDEZ) 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 December 2007 and October 2009, 

9 payroll employment in the United States fell by 

10 8,200,000; 


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1 (2) between January 2000 and October 2009, 

2 the manufacturing sector lost 5,617,000 jobs; 

3 (3) as of October 2009, fewer than 12,000,000 

4 workers in the United States were employed in the 

5 manufacturing sector, the fewest number of factory 

6 jobs since March 1941; 

7 (4) at the end of 2008, the United States had 

8 a trade deficit of more than $695,936,000,000, in9 cluding a record-breaking $268,039,800,000 trade 

10 deficit with China; 

11 (5) preserving and increasing decent paying 

12 jobs must be a top priority of Congress; 

13 (6) providing loan guarantees, direct loans, and 

14 technical assistance to employees to buy their own 

15 companies will preserve and increase employment in 

16 the United States; and 

17 (7) just as the United States Export-Import 

18 Bank was created in 1934 in the midst of the Great 

19 Depression, as a way to increase United States jobs 

20 through exports, the time has come to establish the 

21 United States Employee Ownership Bank within the 

22 Department of the Treasury to preserve and expand 

23 jobs in the United States. 

24 SEC. 3. DEFINITIONS. 

25 In this Act— 


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1 (1) the term ‘‘Bank’’ means the Unites States 

2 Employee Ownership Bank, established under sec3 tion 4; 

4 (2) the term ‘‘eligible worker-owned coopera5 tive’’ has the same meaning as in section 1042(c)(2) 

6 of the Internal Revenue Code of 1986; 

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

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

9 the Internal Revenue Code of 1986; and 

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

11 of the Treasury. 

12 SEC. 4. ESTABLISHMENT OF UNITED STATES EMPLOYEE 

13 OWNERSHIP BANK WITHIN THE DEPART14 MENT OF THE TREASURY. 

15 (a) ESTABLISHMENT OF BANK.— 

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

17 period beginning on the date of enactment of this 

18 Act, the Secretary shall establish the United States 

19 Employee Ownership Bank, to foster increased em20 ployee ownership of United States companies and 

21 greater employee participation in company decision 

22 making throughout the United States. 

23 (2) ORGANIZATION OF THE BANK.— 

24 (A) MANAGEMENT.—The Secretary shall 

25 appoint a Director to serve as the head of the 


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1 Bank, who shall serve at the pleasure of the 

2 Secretary. 

3 (B) STAFF.—The Director may select, ap4 point, employ, and fix the compensation of such 

5 employees as are necessary to carry out the 

6 functions of the Bank. 

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

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

9 be subordinated to the interests of all other creditors— 

10 (1) to purchase a company through an em11 ployee stock ownership plan or an eligible worker12 owned cooperative, which shall be at least 51 percent 

13 employee owned, or will become at least 51 percent 

14 employee owned as a result of financial assistance 

15 from the Bank; 

16 (2) to allow a company that is less than 51 per17 cent employee owned to become at least 51 percent 

18 employee owned; 

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

20 51 percent employee owned to increase the level of 

21 employee ownership at the company; and 

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

23 51 percent employee owned to expand operations 

24 and increase or preserve employment. 


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

2 subordinated loan or guarantees a loan under subsection 

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

4 that— 

5 (1) shows that— 

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

7 in the company is or will be owned or controlled 

8 by an employee stock ownership plan or eligible 

9 worker-owned cooperative; 

10 (B) the board of directors of the company 

11 is or will be elected by shareholders on a one 

12 share to one vote basis or by members of the 

13 eligible worker-owned cooperative on a one 

14 member to one vote basis, except that shares 

15 held by the employee stock ownership plan will 

16 be voted according to section 409(e) of the In17 ternal Revenue Code of 1986, with participants 

18 providing voting instructions to the trustee of 

19 the employee stock ownership plan in accord20 ance with the terms of the employee stock own21 ership plan and the requirements of that section 

22 409(e); and 

23 (C) all employees will receive basic infor24 mation about company progress and have the 


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1 opportunity to participate in day-to-day oper2 ations; and 

3 (2) includes a feasibility study from an objective 

4 third party with a positive determination that the 

5 employee stock ownership plan or eligible worker6 owned cooperative will generate enough of a margin 

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

8 guarantee that was made possible through the Bank. 

9 (d) TERMS AND CONDITIONS FOR LOANS AND LOAN

10 GUARANTEES.—Notwithstanding any other provision of 

11 law, a loan that is provided or guaranteed under this sec12 tion shall— 

13 (1) bear interest at an annual rate, as deter14 mined by the Secretary— 

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

16 Act— 

17 (i) sufficient to cover the cost of bor18 rowing to the Department of the Treasury 

19 for obligations of comparable maturity; or 

20 (ii) of 4 percent; and 

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

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

23 current applicable market rate for a loan of 

24 comparable maturity; and 

25 (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 new subsection: 

5 ‘‘(l) 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 2010, and such sums as may be necessary thereafter. 

Æ 


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