(1) Existing law creates within the Governor's Office of Business and Economic Development the Office of Small Business Advocate in order to advocate the causes of small business and to provide small businesses with the information they need to survive in the marketplace to be led by the Small Business Advocate. The California Employee Ownership Act requires, upon appropriation by the Legislature, the Office of Small Business Advocate to establish the California Employee Ownership Hub (hub) and to appoint an Employee Ownership Hub Manager (manager) to administer the hub. The act authorizes the manager to be responsible for certain duties, including working with all California state agencies whose regulations and programs affect employee-owned companies, and businesses with the potential to become employee-owned, to enhance opportunities and reduce barriers.
This bill would require the Director of General Services (director) to issue an employee stock ownership plan (ESOP) contractor certificate to a qualified contractor, as defined, that presents a valid and favorable ESOP determination letter from the Internal Revenue Service. The bill would require the director to determine the percentage of ESOP ownership for an applicant and indicate the percentage on the certificate, as specified. The bill would require the director to require that the certificate be renewed every 3 years. The bill would additionally authorize the manager to be responsible for compiling and maintaining a comprehensive bidders list of qualified contractors that have received the certificate from the Director of General Services.
(2) Existing law establishes within the Transportation Agency a Department of Transportation. Existing law requires the Department of Transportation to, among other things, plan, design, construct, operate, and maintain those transportation systems that the Legislature has made, or may make, the responsibility of the department, except as specified.
This bill would require, beginning January 1, 2027, the Department of Transportation to provide bid preferences to qualified contractors that have received the certificate based on the percentage of the qualified contractor owned by its ESOP, whenever the department prepares a solicitation for a state-funded construction contract, as specified.

Statutes affected:
SB 713: 12100.32 GOV, 12100.33 GOV
02/21/25 - Introduced: 12100.32 GOV, 12100.33 GOV
04/23/25 - Amended Senate: 12100.32 GOV, 12100.33 GOV