White, Glenn W., director of tax department, Dow Chemical Co. Wilson, Hon. Charles, a Representative in Congress from the State of Hatfield, Hon. Mark O., a U.S. Senator from the State of Oregon_. J. C. Penney Co., Donald V. Seibert, chairman of the board__. Rashman, Richard M., trust counsel, Union Bank, Los Angeles, Calif_ Seibert, Donald V., chairman of the board, J. C. Penny Co---- Silverstein & Mullens, Leonard L. Silverstein and Stuart M. Lewis____ Strichman, George A., chairman, Committee To Reform Taxation of In- TRW, Inc., J. E. Dunlap, vice president, human relations__. Union Bank, Los Angeles, Calif., Richard M. Rashman, trust counsel__ Vogel, Gerald F., vice president, Local 1722, United Steelworkers of Walgren, Hon. Doug, a Representative in Congress from the State of 474 ADDITIONAL INFORMATION Booklet: Delloitte Haskins & Sells, USA. Employee Stock Ownership Plans: Expanded Opportunities for Employers, Shareholders, and Em- Letter from Senator Long to Mr. Lubick, and his answer to it. 200 APPENDIXES Appendix A.-Material submitted for the record by Senator Long : ESOPS-An explanation for employees__ Employee ownership_-_ Page 289 309 The final ESOP regulations-A return to certainty. 334 The expanded Employee Stock Ownership Act of 1978-A summary and analysis.. 468 Appendix B.-Communications received by the committee expressing an interest in these hearings.. 473 EMPLOYEE STOCK OWNERSHIP PLANS AND WEDNESDAY, JULY 19, 1978 U.S. SENATE, COMMITTEE ON FINANCE, Washington, D.C. The committee met, pursuant to notice, at 9 a.m. in room 2221, Dirksen Senate Office Building, Hon. Russell B. Long (chairman of the committee) presiding. Present: Senators Long, Byrd, Jr., of Virginia, Gravel, Packwood, Roth, Jr., Laxalt, and Danforth. [The committee press releases announcing these hearings and the bills S. 3241, S. 3223, H.R. 13882 follow:] [U.S. Senate, Committee on Finance Press Release, June 26, 1978] SENATOR LONG ANNOUNCES HEARINGS ON EMPLOYEE STOCK OWNERSHIP PLANS Senator Russell B. Long (D.-La.), Chairman of the Senate Committee on Finance, announced that hearings have been scheduled on Employee Stock Ownership Plans (ESOPs) on Wednesday, July 19, 1978 and Thursday, July 20, 1978. The hearings will be held in Room 2221, Dirksen Senate Office Building and will begin at 9:00 A.M. on both days. In announcing the Committee hearings on ESOP, Senator Long stated, “Since 1973, Congress has passed five pieces of legislation which broaden the access of employees to stock ownership: The 'Regional Rail Reorganization Act of 1973' (P.L. 93-236), The 'Employee Retirment Income Security Act of 1974' (P.L. 93-406), The 'Trade Act of 1974' (P.L. 93-618), The "Tax Reduction Act of 1975' (P.L. 94-12, and The 'Tax Reform Act of 1976' (P.L. 94-455). "In addition, earlier this year, the Senate Committee on Commerce, Science and Transportation reported out S. 2788, the 'Regional Rail Reorganization Act of 1978'; this bill contains extensive provisions regarding the adoption of an ESOP by the Consolidated Rail Corporation (Conrail)." Senator Long pointed out that "Another topic of the hearings will be an examination of Senator Mike Gravel's S. 3223, a bill to establish the first general stock ownership plan, a concept which goes beyond ESOP in broadening the access of individuals to stock ownership, and S. 3241, the 'Expanded Employee Stock Ownership Act of 1978,' which I introduced last week. "We will be using these hearings as the basis for setting new and more comprehensive legislative goals for further expansion of the ESOP concept as a means of getting our stagnating economy going again and of giving a piece of the action to millions of America's working men and women." Senator Long explained that "The ESOP hearings will cover three major topics. At the outset, we will try to determine the value, both intrinsically and monetarily, of the benefits which stock ownership provides for employees and employers. In addition, we will attempt to determine what legislation is needed to promote the broadening of stock ownership and prevent its abuse. "Finally, we will try to ascertain whether the various Federal agencies have complied with the clear statement of Congressional intent regarding ESOP which was contained in Section 803 (b) of the Tax Reform Act of 1976. I think it is time that we evaluate the product of our efforts and find out if our goals are being achieved." Witnesses who are scheduled to testify at the first day of ESOP hearings, July 19, are: (1) The Honorable Mike Gravel, U.S. Senator from Alaska. (2) Panel consisting of The Honorable Stanley N. Lundine, U.S. Representative from New York, The Honorable Peter H. Kostmayer, U.S. Representative from Pennsylvania, and The Honorable Matthew F. McHugh, U.S. Representative from New York. (3) Mr. J. R. Bullis, President, South Bend Lathe Company. (4) Mr. H. Jack Cofer, President, Rich-Sea Pak Corporation. (5) Mr. Robert L. Strickland, Executive Vice President, Lowe's Companies, Inc. (6) Mr. Glen W. White, Director of the Tax Department, The Dow Chemical Company. (7) An officer of Sears, Roebuck and Company. (8) Ronald L. Ludwig, Counsel, Employee Stock Ownership Council of America. (9) Mr. Jeffrey R. Gates, Hewitt Associates. Witnesses for the second day of hearings, July 20, will be from several Federal agencies whose programs involve ESOP legislation which has been enacted by the Congress. Among the agencies which may be invited to testify are Small Businss Administration, Office of Management and Budget, National Aeronautics and Space Administration, Economic Development Administration, Defense Contract Audit Agency, Treasury Department, etc. Requests to testify.-Senator Long stated that other witnesses desiring to testify during these hearings must make their request to testify to Michael Stern, Staff Director, Committee on Finance, Room 2227 Dirksen Senate Office Building, Washington, D.C. 20510, not later than Monday, July 10, 1978. Witnesses will be notified as soon as possible after this date as to when they are scheduled to appear. If for some reason the witness is unable to appear at the time scheduled, he may file a written statement for the record in lieu of the personal appearance. Legislative Reorganization Act.-Senator Long stated that the Legislative Reorganization Act of 1946, as amended, requires all witnesses appearing before the Committees of Congress "to file in advance written statements of their proposed testimony, and to limit their oral presentation to brief summaries of their argument." Witnesses scheduled to testify should comply with the following rules: 1. A copy of the statement must be filed by noon the day before the day the witness is scheduled to testify. 2. All witnesses must include with their written statement a summary of the principal points included in the statement. 3. The written statements must be typed on letter-size paper (not legal size) and at least 75 copies must be submitted by the close of business the day before the witness is scheduled to testify. 4. Witnesses are not to read their written statements to the Committee, but are to confine their ten minute oral presentations to a summary of the points included in the statement. 5. No more than 10 minutes will be allowed for oral presentations. Written testimony.-Senator Long stated that the Committee would be pleased to receive written testimony from those persons or organizations who wish to submit statements for the record. Statements submitted for inclusion in the record should be typewritten, not more than 25 double-spaced pages in length and mailed with five (5) copies by August 15, 1978, to Michael Stern, Staff Director, Committee on Finance, Room 2227 Dirksen Senate Office Building, Washington, D.C. 20510. [U.S. Senate, Committee on Finance Press Release, July 14, 1978] SENATOR LONG ANNOUNCES ADDITIONAL WITNESSES FOR HEARINGS ON EMPLOYEE STOCK OWNERSHIP PLANS Senator Russell B. Long (D.-La.), Chairman of the Senate Committee on Finance, announced that the Finance Committee has scheduled additional witnesses for its hearings on Employee Stock Ownership Plans (ESOPs) which are scheduled for Wednesday, July 19, 1978 and Thursday, July 20, 1978. |