Text: H.R.2357 — 115th Congress (2017-2018)All Information (Except Text)

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Introduced in House (05/04/2017)

 
[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2357 Introduced in House (IH)]

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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 
 Committee on Financial Services, and in addition to the Committee on 
Education and the Workforce, for a period to be subsequently determined 
 by the Speaker, in each case for consideration of such provisions as 
        fall within 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 Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``United States Employee Ownership 
Bank Act''.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) between January 2000 and January 2017, the 
        manufacturing sector lost 4,929,000 jobs;
            (2) as of January 2017, only 12,355,000 workers in the 
        United States were employed in the manufacturing 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 cooperatives.

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 cooperative'' has the 
        meaning given the term in section 1042(c)(2) of the Internal 
        Revenue Code of 1986;
            (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 DEPARTMENT 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 employee ownership of United States companies 
        and greater employee participation in company decisionmaking 
        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 employees as are necessary to 
                carry out the functions 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 employee 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 percent 
        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--
                    (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 eligible worker-owned 
                cooperative on a 1 member to 1 vote basis, except that 
                shares held by the employee stock ownership plan will 
                be voted according to section 409(e) of the Internal 
                Revenue Code of 1986, with participants providing 
                voting instructions to the trustee of the employee 
                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 information 
                about company progress and have the opportunity to 
                participate in day-to-day operations; 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 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 section shall--
            (1) bear interest at an annual rate, as determined by the 
        Secretary--
                    (A) in the case of a direct loan under this 
                section--
                            (i) sufficient to cover the cost of 
                        borrowing 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 ``; employee stock 
        ownership plans or eligible worker-owned cooperatives'' after 
        ``layoffs''; and
            (2) by adding at the end the following:
    ``(e) Employee Stock Ownership Plans and Eligible Worker-Owned 
Cooperatives.--
            ``(1) General rule.--Except as provided in paragraph (2), 
        if an employer orders a plant or facility 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 Revenue Code of 1986) that is at 
        least 51 percent employee 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 determined by an 
        appraisal by an independent third party jointly selected by the 
        employer and the employees. The cost of the appraisal may be 
        shared evenly between the employer and the employees.
            ``(2) Exemptions.--Paragraph (1) shall not apply--
                    ``(A) if an employer orders a plant closing, but 
                will retain the assets of such plant to continue or 
                begin a business within the United States; or
                    ``(B) if an employer orders a plant closing and 
                such employer intends to continue the business 
                conducted at such plant at another plant within the 
                United States.''.

SEC. 6. REGULATIONS ON SAFETY AND SOUNDNESS AND PREVENTING COMPETITION 
              WITH COMMERCIAL 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 soundness 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 Ownership Plans and Eligible 
Worker-Owned Cooperatives.--In assessing and taking into account, under 
subsection (a), the record of a financial institution, the appropriate 
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 enable 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 cooperatives.''.

SEC. 8. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to the Secretary to carry 
out this Act, $500,000,000 for fiscal year 2018, and such sums as may 
be necessary for each fiscal year thereafter.
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