SB 713: Employee stock ownership plans: contractors: certification: bid preferences.

Official summary

Legislative Counsel’s Digest (official, as of the latest version). Written by nonpartisan legislative staff; reproduced verbatim.

(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.

Sponsors

Sponsors by party (alphabetical): Republican 1

“Support” is shown only as formal sponsorship recorded by the legislature. Roll-call votes are available on the official bill page.

Recent official actions

1. February 2, 2026Returned to Secretary of Senate pursuant to Joint Rule 56.
2. May 23, 2025May 23 hearing: Held in committee and under submission.
3. May 16, 2025Set for hearing May 23.
4. May 12, 2025May 12 hearing: Placed on APPR. suspense file.
5. May 2, 2025Set for hearing May 12.
6. April 29, 2025From committee: Do pass and re-refer to Com. on APPR. (Ayes 15. Noes 0. Page 920.) (April 28). Re-referred to Com. on APPR.
7. April 23, 2025From committee with author's amendments. Read second time and amended. Re-referred to Com. on TRANS.
8. April 23, 2025Re-referred to Com. on TRANS.
9. April 21, 2025From committee: Do pass and re-refer to Com. on RLS. (Ayes 11. Noes 0. Page 809.) (April 21). Re-referred to Com. on RLS.
10. April 10, 2025Set for hearing April 28 in TRANS. pending receipt.
11. March 18, 2025Set for hearing April 21.
12. March 12, 2025Referred to Coms. on B. P. & E.D. and G.O.