legislation: 96-hr-7259
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| 96-hr-7259 | 96 | hr | 7259 | Small Business Employee Ownership Act of 1980 | Commerce | 1980-05-05 | 1980-05-16 | Reported to House from the Committee on Small Business, H. Rept. 96-1000. | House | Rep. Nowak, Henry [D-NY-37] | NY | D | N000163 | 25 | Small Business Employee Ownership Act of 1980 - Declares the purpose of this Act to be to provide that a qualified employee trust shall be eligible for certain Small Business Administration (SBA) loan guarantees regardless of the percentage of stock of the business held by the trust, including loans for the purchase of small business majority stock interests. Amends the Small Business Act to define "qualified employee trust" as: (1) a trust which is part of an employee stock ownership plan as defined by the Internal Revenue Code of 1954 (a) which is maintained by a small business; and (b) entitles plan participants to direct the manner in which voting rights under qualifying employer securities are to be exercised respecting a corporate matter which must be decided by a majority vote of outstanding common shares voted; and (2) in the case where the trustee enters into an agreement with the SBA which is binding on the trust and on the small business and which provides that; (a) the guaranteed loan shall be used solely for buying qualifying employer securities of such business; (b) such business shall provide loan repayment funds and put up its property for security for such loan if necessary; and (c) all such purchased qualifying employer securities shall be allocated to eligible plan participants' accounts. States that a trust may be treated as a qualified employee trust with respect to a small business if: (1) the trust is maintained by an employee organization representing at least 51 percent of such business' employees; and (2) such business maintains a plan (a) which is designed to invest primarily in qualifying employer securities, (b) which provides for plan participants to direct specified employer securities voting rights exercised with respect to certain corporate matters, (c) which provides for repurchase of specified employer securities by the business, and (d) which meets other requirements that may be prescribed by the SBA; and (3) in the case of certain loan guarantees, such business enters into a trustee-SBA agreement (as set forth in this Act). Authorizes the SBA to guarantee certain loans to employee trusts for approved (by the SBA) stock purchases which will result in at least 51 percent employee trust-ownership of such business. Sets forth the requirements of such SBA approved plan. Requires periodic reports to be made to Congress respecting such loan guarantees. Directs the SBA to contract with an independent consultant for a study of the feasibility of loan guarantees directly to the seller of a small business concern in connection with the installment sale of such business. States that such study shall include an analysis of: (1) the extent of installment sales in the sale of small businesses; (2) the ability of the SBA to make credit judgments in connection with such sales; (3) the need for SBA loan guarantees to facilitate such sales; (4) financial institution participation; and (5) the anticipated cost of such a program. Directs the SBA to report to the appropriate House and Senate committees regarding such study not later than April 1, 1981. | 2025-09-02T13:54:41Z |