I 
115TH CONGRESS 
1ST SESSION H. R. 2357 
To provide for the establishment of the United States Employee Ownership 
Bank, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 4, 2017 
Mr. DEFAZIO introduced the following bill; which was referred to the Com-
mittee on Financial Services, and in addition to the Committee on Edu-
cation and the Workforce, for a period to be subsequently determined by 
the Speaker, in each case for consideration of such provisions as fall with-
in the jurisdiction of the committee concerned 
A BILL 
To provide for the establishment of the United States 
Employee Ownership Bank, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘United States Em-
ployee Ownership Bank Act’’. 
SEC. 2. FINDINGS. 
Congress finds that— 
(1) between January 2000 and January 2017, 
the manufacturing sector lost 4,929,000 jobs; 
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(2) as of January 2017, only 12,355,000 work-
ers in the United States were employed in the manu-
facturing sector, a lower number than in July 1941; 
(3) at the end of 2016, the United States had 
a trade deficit of $502,300,000,000, including a 
$347,037,900,000 trade deficit with China; 
(4) preserving and increasing decent paying 
jobs must be a top priority of Congress; 
(5) providing loan guarantees, direct loans, and 
technical assistance to employees to buy their own 
companies will preserve and increase employment in 
the United States; and 
(6) the time has come to establish the United 
States Employee Ownership Bank to preserve and 
expand jobs in the United States through Employee 
Stock Ownership Plans and worker-owned coopera-
tives. 
SEC. 3. DEFINITIONS. 
In this Act— 
(1) the term ‘‘Bank’’ means the United States 
Employee Ownership Bank established under section 
4; 
(2) the term ‘‘eligible worker-owned coopera-
tive’’ has the meaning given the term in section 
1042(c)(2) of the Internal Revenue Code of 1986; 
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(3) the term ‘‘employee stock ownership plan’’ 
has the meaning given the term in section 
4975(e)(7) of the Internal Revenue Code of 1986; 
and 
(4) the term ‘‘Secretary’’ means the Secretary 
of the Treasury. 
SEC. 4. ESTABLISHMENT OF UNITED STATES EMPLOYEE 
OWNERSHIP BANK WITHIN THE DEPART-
MENT OF THE TREASURY. 
(a) ESTABLISHMENT OF BANK.— 
(1) IN GENERAL.—Before the end of the 90-day 
period beginning on the date of enactment of this 
Act, the Secretary shall establish the United States 
Employee Ownership Bank to foster increased em-
ployee ownership of United States companies and 
greater employee participation in company decision-
making throughout the United States. 
(2) ORGANIZATION OF THE BANK.— 
(A) MANAGEMENT.—The Secretary shall 
appoint a Director to serve as the head of the 
Bank, who shall serve at the pleasure of the 
Secretary. 
(B) 
STAFF.—The 
Director 
appointed 
under subparagraph (A) may select, appoint, 
employ, and fix the compensation of such em-
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ployees as are necessary to carry out the func-
tions of the Bank. 
(b) DUTIES OF BANK.—The Bank is authorized to 
provide direct loans and loan guarantees, which may be 
subordinated to the interests of all other creditors— 
(1) to purchase a company through an em-
ployee stock ownership plan or an eligible worker- 
owned cooperative, which shall be at least 51 percent 
employee owned, or will become at least 51 percent 
employee owned as a result of financial assistance 
from the Bank; 
(2) to allow a company that is less than 51 per-
cent employee owned to become at least 51 percent 
employee owned; 
(3) to allow a company that is already at least 
51 percent employee owned to increase the level of 
employee ownership at the company; and 
(4) to allow a company that is already at least 
51 percent employee owned to expand operations 
and increase or preserve employment. 
(c) PRECONDITIONS.—Before the Bank makes any 
subordinated loan or guarantees a loan under subsection 
(b)(1), a business plan shall be submitted to the Bank 
that— 
(1) shows that— 
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(A) not less than 51 percent of all interests 
in the company is or will be owned or controlled 
by an employee stock ownership plan or eligible 
worker-owned cooperative; 
(B) the board of directors of the company 
is or will be elected by shareholders on a 1 
share to 1 vote basis, or by members of the eli-
gible worker-owned cooperative on a 1 member 
to 1 vote basis, except that shares held by the 
employee stock ownership plan will be voted ac-
cording to section 409(e) of the Internal Rev-
enue Code of 1986, with participants providing 
voting instructions to the trustee of the em-
ployee stock ownership plan in accordance with 
the terms of the employee stock ownership plan 
and the requirements of that section 409(e); 
and 
(C) all employees will receive basic infor-
mation about company progress and have the 
opportunity to participate in day-to-day oper-
ations; and 
(2) includes a feasibility study from an objective 
third party with a positive determination that the 
employee stock ownership plan or eligible worker- 
owned cooperative will generate enough of a margin 
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to pay back any loan, subordinated loan, or loan 
guarantee that was made possible through the Bank. 
(d) TERMS AND CONDITIONS FOR LOANS AND LOAN 
GUARANTEES.—Notwithstanding any other provision of 
law, a loan that is provided or guaranteed under this sec-
tion shall— 
(1) bear interest at an annual rate, as deter-
mined by the Secretary— 
(A) in the case of a direct loan under this 
section— 
(i) sufficient to cover the cost of bor-
rowing to the Department of the Treasury 
for obligations of comparable maturity; or 
(ii) of 4 percent; and 
(B) in the case of a loan guaranteed under 
this section, in an amount that is equal to the 
current applicable market rate for a loan of 
comparable maturity; and 
(2) have a term not to exceed 12 years. 
SEC. 5. EMPLOYEE RIGHT OF FIRST REFUSAL BEFORE 
PLANT OR FACILITY CLOSING. 
Section 3 of the Worker Adjustment and Retraining 
Notification Act (29 U.S.C. 2102) is amended— 
(1) in the section heading, by inserting ‘‘; EM-
PLOYEE STOCK OWNERSHIP PLANS OR ELIGI-
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BLE
WORKER-OWNED
COOPERATIVES’’ after 
‘‘LAYOFFS’’; and 
(2) by adding at the end the following: 
‘‘(e) EMPLOYEE STOCK OWNERSHIP PLANS AND EL-
IGIBLE WORKER-OWNED COOPERATIVES.— 
‘‘(1) GENERAL RULE.—Except as provided in 
paragraph (2), if an employer orders a plant or facil-
ity closing in connection with the termination of its 
operations at such plant or facility, the employer 
shall offer its employees an opportunity to purchase 
such plant or facility through an employee stock 
ownership plan (as that term is defined in section 
4975(e)(7) of the Internal Revenue Code of 1986) or 
an eligible worker-owned cooperative (as that term is 
defined in section 1042(c)(2) of the Internal Rev-
enue Code of 1986) that is at least 51 percent em-
ployee owned. The value of the company which is to 
be the subject of such plan or cooperative shall be 
the fair market value of the plant or facility, as de-
termined by an appraisal by an independent third 
party jointly selected by the employer and the em-
ployees. The cost of the appraisal may be shared 
evenly between the employer and the employees. 
‘‘(2) EXEMPTIONS.—Paragraph (1) shall not 
apply— 
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‘‘(A) if an employer orders a plant closing, 
but will retain the assets of such plant to con-
tinue or begin a business within the United 
States; or 
‘‘(B) if an employer orders a plant closing 
and such employer intends to continue the busi-
ness conducted at such plant at another plant 
within the United States.’’. 
SEC. 6. REGULATIONS ON SAFETY AND SOUNDNESS AND 
PREVENTING COMPETITION WITH COMMER-
CIAL INSTITUTIONS. 
Before the end of the 90-day period beginning on the 
date of enactment of this Act, the Secretary shall prescribe 
such regulations as are necessary to implement this Act 
and the amendments made by this Act, including— 
(1) regulations to ensure the safety and sound-
ness of the Bank; and 
(2) regulations to ensure that the Bank will not 
compete with commercial financial institutions. 
SEC. 7. COMMUNITY REINVESTMENT CREDIT. 
Section 804 of the Community Reinvestment Act of 
1977 (12 U.S.C. 2903) is amended by adding at the end 
the following: 
‘‘(e) ESTABLISHMENT OF EMPLOYEE STOCK OWNER-
SHIP PLANS AND ELIGIBLE WORKER-OWNED COOPERA-
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TIVES.—In assessing and taking into account, under sub-
section (a), the record of a financial institution, the appro-
priate Federal financial supervisory agency may consider 
as a factor capital investments, loans, loan participation, 
technical assistance, financial advice, grants, and other 
ventures undertaken by the institution to support or en-
able employees to establish employee stock ownership 
plans or eligible worker-owned cooperatives (as those 
terms are defined in sections 4975(e)(7) and 1042(c)(2) 
of the Internal Revenue Code of 1986, respectively), that 
are at least 51 percent employee owned plans or coopera-
tives.’’. 
SEC. 8. AUTHORIZATION OF APPROPRIATIONS. 
There are authorized to be appropriated to the Sec-
retary to carry out this Act, $500,000,000 for fiscal year 
2018, and such sums as may be necessary for each fiscal 
year thereafter. 
Æ 
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