Sec. 4. Establishment of United States Employee Ownership Bank within the Department of the Treasury
536 words·~2 min read·
/bill/113/s/2411/is/section-4A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
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. The Secretary shall appoint a Director to serve as the head of the Bank, who shall serve at the pleasure of the Secretary. The Director may select, appoint, employ, and fix the compensation of such employees as are necessary to carry out the functions of the Bank.
The Bank is authorized to provide loans, on a direct or guaranteed basis, which may be subordinated to the interests of all other creditors— 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; to allow a company that is less than 51 percent employee owned to become at least 51 percent employee owned; to allow a company that is already at least 51 percent employee owned to increase the level of employee ownership at the company; and to allow a company that is already at least 51 percent employee owned to expand operations and increase or preserve employment.
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— shows that— 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; the board of directors of the company is or will be elected by shareholders on a one share to one vote basis or by members of the eligible worker-owned cooperative on a one member to one 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 all employees will receive basic information about company progress and have the opportunity to participate in day-to-day operations; and 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.
Notwithstanding any other provision of law, a loan that is provided or guaranteed under this section shall— bear interest at an annual rate, as determined by the Secretary— in the case of a direct loan under this Act— sufficient to cover the cost of borrowing to the Department of the Treasury for obligations of comparable maturity; or of 4 percent; and 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 have a term not to exceed 12 years.