Bill > HB3646

This bill modifies existing Oregon law to expand contract preferences for public procurement by allowing state contracting agencies to give preference to employee-owned businesses when awarding contracts. Specifically, the bill allows contracting agencies to prefer goods or services from entities where employees own at least 50 percent of the ownership interest, either directly or through an employee stock ownership plan (ESOP), if those goods or services cost no more than 5 percent more than alternatives from other contractors. To qualify for this preference, the employee-owned entity must submit evidence proving the employee ownership threshold with their bid or proposal. The bill also maintains existing preferences for benefit companies and goods/services produced entirely within Oregon, and allows contracting agencies to set higher cost percentage thresholds if they provide a written justification. The amendments to the law will become operative on January 1, 2026, and apply to procurements advertised or solicited on or after that date, giving state agencies and potential contractors time to prepare for the new provisions.

Business and Industry, Military Affairs and Security

https://olis.oregonlegislature.gov/liz/2025R1/Measures/Overview/HB3646