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SB-553 Public contracts: bid preference: ESOPs. (2019-2020)

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Date Published: 02/22/2019 02:00 PM


Senate Bill
No. 553

Introduced by Senator Wilk

February 22, 2019

An act to add Section 10186.5 to the Public Contract Code, relating to public contracts.


SB 553, as introduced, Wilk. Public contracts: bid preference: ESOPs.
The State Contract Act governs state contracts for public works projects and generally requires that a contract be rewarded to the lowest responsible bidder. Under the act, projects not under the jurisdiction of the Department of Water Resources, the Department of Parks and Recreation, the Department of Corrections and Rehabilitation, the Department of Transportation, the High-Speed Rail Authority, or the Military Department are under the sole charge and direct control of the Department of General Services.
This bill would require an entity awarding a contract pursuant to the act to provide a 3% bid preference to a qualified ESOP bidder, as defined.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


 Section 10186.5 is added to the Public Contract Code, to read:

 (a) As used in this section:
(1) “ESOP” means an Employee Stock Ownership Plan company.
(2) “Qualified ESOP bidder” means an ESOP or an S corporation ESOP that is 100 percent owned and operated by employee owners and demonstrates current compliance with applicable Internal Revenue Service regulation for ESOPs.
(b) The department shall provide a three-percent bid preference to a qualified ESOP bidder. This preference shall be calculated by reducing the bid by three percent of the amount of the lowest responsible bid for purposes of comparing the bid with competing bids.