Temporary Federal ESOP Grant Program Act of 2020

II 116TH CONGRESS 2D SESSION S. 4236 To establish a grant program to encourage the creation and expansion of employee stock ownership plans. IN THE SENATE OF THE UNITED STATES JULY 21, 2020 Mr. JOHNSON (for himself and Ms. BALDWIN) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To establish a grant program to encourage the creation and expansion of employee stock ownership plans. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Temporary Federal 4 ESOP Grant Program Act of 2020’’. 5 SEC. 2. GRANT PROGRAM. 6 (a) ESTABLISHMENT.—Not later than 30 days after 7 the date of the enactment of this Act, the Secretary of 8 the Treasury shall establish the Temporary Federal Em- 9 ployee Stock Ownership Plan Program, or the ‘‘Tem- 10 VerDate Sep 11 2014 21:44 Aug 03, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S4236.IS S4236 pbinns on DSKJLVW7X2PROD with BILLS 2 •S 4236 IS porary Federal ESOP Program’’, to provide grants to eli- 1 gible business concerns for purposes of— 2 (1) establishing; or 3 (2) increasing the percentage of the eligible 4 business concern owned by; 5 an employee stock ownership plan (as defined in section 6 4975(e)(7) of the Internal Revenue Code of 1986). 7 (b) ELIGIBLE BUSINESS CONCERN.—For purposes of 8 this section, the term ‘‘eligible business concern’’ means 9 a business concern that submits with the grant applica- 10 tion— 11 (1) a completed agreement signed by the busi- 12 ness concern and an employee stock ownership 13 trust— 14 (A) establishing an employee stock owner- 15 ship plan (as defined in section 4975(e)(7) of 16 the Internal Revenue Code of 1986) which is a 17 tax credit employee stock ownership plan meet- 18 ing the requirements of section 409 of the In- 19 ternal Revenue Code of 1986; or 20 (B) increasing the percentage of the busi- 21 ness concern owned by such a plan, if such plan 22 is already in existence; 23 (2) supporting documentation for the valuation 24 of the business concern as determined for purposes 25 VerDate Sep 11 2014 21:44 Aug 03, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S4236.IS S4236 pbinns on DSKJLVW7X2PROD with BILLS 3 •S 4236 IS of such agreement by an independent valuation ex- 1 pert utilizing generally accepted valuation ap- 2 proaches (as determined by the Secretary of the 3 Treasury), or by the trustee of the employee stock 4 ownership trust if such valuation is certified by such 5 an independent valuation expert, including filings to 6 the Internal Revenue Service or the Securities and 7 Exchange Commission, as applicable; and 8 (3) a certification that the grant funds will be 9 used toward the purchase of employer securities, and 10 that the reduction in cost to the business concern at- 11 tributable to the grant funds will be used for capital 12 investment in or replacement and maintenance of 13 fixed assets, including manufacturing equipment and 14 tools, computers, land, buildings, facilities, health 15 and safety equipment, and other similar investments. 16 (c) GRANT AWARDS.—Based on a determination 17 made within 15 business days from the date of submission 18 of an application meeting the requirements of subsection 19 (b), the Secretary of the Treasury shall award a grant 20 under the Temporary Federal ESOP Program to a busi- 21 ness concern in an amount not to exceed the sum of— 22 (1) $20,000 per employee— 23 VerDate Sep 11 2014 21:44 Aug 03, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S4236.IS S4236 pbinns on DSKJLVW7X2PROD with BILLS 4 •S 4236 IS (A) who is a participant in the employee 1 stock ownership trust established by such busi- 2 ness concern; or 3 (B) whose ownership share in such busi- 4 ness concern by reason of an existing employee 5 stock ownership trust is increased; 6 (2) $50,000 for any costs incurred by the busi- 7 ness concern and employee stock ownership trust, 8 and documented in the grant application, in devel- 9 oping the agreement required under subsection 10 (b)(1). 11 (d) TERMINATION.—No grant shall be awarded 12 under the Temporary Federal ESOP Program after Sep- 13 tember 30, 2022. 14 (e) AUTHORIZED TRANSFER OF APPROPRIATIONS.— 15 The Secretary of the Treasury may transfer any unobli- 16 gated amount of the appropriation under section 4027 of 17 the Coronavirus Economic Stabilization Act of 2020 for 18 the purposes of carrying out the Temporary Federal 19 ESOP Program. 20 (f) SECRETARY OF THE TREASURY.—For purposes 21 of this section, any reference to the Secretary of the 22 Treasury includes a reference to any delegate of such Sec- 23 retary. 24 Æ VerDate Sep 11 2014 21:44 Aug 03, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6301 E:\BILLS\S4236.IS S4236 pbinns on DSKJLVW7X2PROD with BILLS