S.388 - Small Business Employee Ownership Act96th Congress (1979-1980)
|Sponsor:||Sen. Stewart, Donald [D-AL] (Introduced 02/08/1979)|
|Committees:||Senate - Small Business | House - Small Business|
|Committee Reports:||S.Rept 96-93 Part 1; S.Rept 96-93 Part 1|
|Latest Action:||05/03/1979 Referred to House Committee on Small Business.|
This bill has the status Passed Senate
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Summary: S.388 — 96th Congress (1979-1980)All Bill Information (Except Text)
(Reported to Senate from the Select Committee on Small Business with amendment, S. Rept. 96-93)
Reported to Senate amended (04/24/1979)
Small Business Employee Ownership Act - Amends the Small Business Act to make employee-owned firms eligible for financial assistance under the business loan program.
States that in the case of small business concerns using an employee stock ownership plan, as defined in the Internal Revenue Code of 1954, all financial assistance shall be made to the trust created for employee ownership of stock (ESOT). Predicates such assistance on: (1) a guarantee by the company seeking assistance that it will repay all obligations incurred by the ESOT; (2) the satisfaction of the Small Business Administration that all funds acquired by the plan with the assistance of the Administration will be used solely in connection with the purchase of qualified employer securities, as defined in the Internal Revenue Code of 1954, and that such funds will not be used to acquire the employer securities of another corporation or to finance any other enterprise; and (3) a distribution arrangement which assures all participants in the plan will have a non-forfeitable right to all employer securities acquired with the assistance of the Administration no later than the expiration date of such assistance.
Authorizes the extension of loan guarantees to employee organizations or employee stock ownership plans to finance the acquisition of the employees workplace if it is a small business or a subsidiary which, if independently owned, would be a small business. States that such guarantees may be extended only if the small business or subsidiary would otherwise close, liquidate, relocate or sell out to a large business or if the owner agrees to the purchase by the employees.
Requires an employee organization or the representative of a stock ownership plan to prepare a plan containing specified provisions for the acquisition of the concern or subsidiary in order to be eligible for such guarantees.
Limits the principal amount of any loan guaranteed under this Act to $500,000.
Directs the Administrator of the Small Business Administration to report periodically to the Congress on the programs established by this Act.
Authorizes the Small Business Administration to extend loan guarantees directly to an owner of a business who is selling the business to employees under an installment contract provided specified conditions are met in the event of default.
Makes a company with 51 percent of its stock allocated through an ESOT to one or more socially and economically disadvantaged individuals eligible for the minority enterprise contract assistance program.