Sec. 4. Employee Ownership Loan Program
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In this section, the term eligible entity — means— an employee stock ownership plan; an eligible worker-owned cooperative; or a qualified trust under section 401(a) of the Internal Revenue Code of 1986, or another entity, on behalf of an employee stock ownership plan or eligible worker-owned cooperative, which other entity may include a company that sponsors an employee stock ownership plan; and excludes any entity primarily owned by a private equity firm, as defined by the Director. The Director shall establish and carry out an Employee Ownership Loan Program to make loans, or loan guarantees, to eligible entities satisfying the requirements under subsection
(c)in order to foster increased employee ownership of United States companies and greater employee participation in company decision making throughout the United States. Each loan or loan guarantee made by the Secretary to an eligible entity under this section shall be— to enable the eligible entity to purchase the equity of a company— that is not less than 51 percent employee-owned; or that will become not less than 51 percent employee-owned through support from the loan or loan guarantee; to allow a company that is less than 51 percent employee-owned to become not less than 51 percent employee-owned; to allow a company that is not less than 51 percent employee-owned to increase the level of employee ownership at the company; or to allow a company that is not less than 51 percent employee-owned to expand operations and increase or preserve employment. Notwithstanding any other provision of law, a loan that is made or guaranteed under this section shall— bear interest at an annual rate that is the lesser of— a rate that is sufficient to cover an appropriate amount of the cost of borrowing and losses to the Department of Labor for obligations of comparable maturity, as determined by the Secretary in consultation with the Director; or a rate that is equal to the current applicable market rate for a loan of comparable maturity, as determined by the Secretary in consultation with the Director; have a repayment period not to exceed 15 years; and satisfy applicable requirements of the Internal Revenue Code of 1986 and the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1001 et seq. ). A loan or loan guarantee made under this section may be subordinated to the interests of current and former participants in the employee stock ownership plan or eligible worker-owned cooperative if an eligible entity files for bankruptcy, if determined appropriate by the Director. An eligible entity seeking a loan or loan guarantee under this section shall submit to the Director, at such time, in such manner, and containing such information as the Director may reasonably require, a business plan (and follow-up reporting on the business plan, as determined by the Director) that— in the case of an eligible entity that is an employee stock ownership plan or that is receiving the loan or loan guarantee on behalf of such a plan, demonstrates that— not less than 51 percent of the equity of the company to be supported by the loan or loan guarantee is or will be owned by an employee stock ownership plan; the trustee of the plan has full voting rights for the shares and, under the plan, such shares are voted in accordance with section 409(e) of the Internal Revenue Code of 1986; not fewer than 2 of the members of the board of directors of such company are directors who are not employed by the company, have no other business relationship with the company, and are otherwise independent from the company; the company will establish a committee, of which not less than 50 percent of the members are employees (but not officers) of the company, that will, not later than 1 year after receipt of the loan or loan guarantee, submit to the Director a plan to establish a system of meaningful employee involvement in any work-related decisions of the company, including decisions with respect to— increasing workplace democracy; open-book management; and other forms of meaningful employee engagement; the company offers a diversified investment option for retirement for employees; and all employees of the company will receive basic information about company progress on a quarterly basis as determined by the Director through regulations; in the case of an eligible entity that is an eligible worker-owned cooperative or that is receiving the loan or loan guarantee on behalf of such a cooperative, demonstrates that the board of directors of the company is or will be elected, by members of the eligible worker-owned cooperative on a 1 member to 1 vote basis; and contains a study from an independent third party with— a fair market valuation of the company; and a positive determination that the eligible entity should generate enough cash flow to pay back the loan or loan guarantee within the repayment period required under subsection (b)(2)(B)(ii). There is established in the Treasury of the United States a fund to be known as the Employee Ownership Loan Program Fund . Notwithstanding section 3302 of title 31, there shall be deposited in the Employee Ownership Loan Program Fund any amount repaid or otherwise received with respect to loans or loan guarantees made under this section, including from any collection effort. All amounts deposited in the Employee Ownership Loan Program Fund under subparagraph
(B)shall— be deposited as offsetting collections into the Employee Ownership Loan Program Fund; be available to the Director, without further appropriation, to make loans or loan guarantees under this section and for the administrative costs of such loans and loan guarantees; and remain available to the Director until expended. The principal amount of outstanding loans and loan guarantees made under this section (including using amounts from the Employee Ownership Loan Program Fund) shall not exceed, in the aggregate, $500,000,000 at any one time.
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Sec. 4
Employee Ownership Loan Program
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