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83rd OREGON LEGISLATIVE ASSEMBLY--2025 Regular Session
House Bill 3646
Sponsored by Representative TRAN; Representative MARSH, Senators PATTERSON, SOLLMAN, WEBER
SUMMARY
The following summary is not prepared by the sponsors of the measure and is not a part of the body thereof subject
to consideration by the Legislative Assembly. It is an editor’s brief statement of the essential features of the
measure as introduced.The statement includes a measure digest written in compliance with applicable readability
standards.
Digest: Lets state agencies that buy goods or services prefer doing so from businesses owned
by their employees. (Flesch Readability Score: 60.1).
Adds entities in which employees of the entity own at least 50 percent of the ownership interest
in the entity directly or through an employee stock ownership plan to the list of sources to which
a contracting agency may give preference in procuring goods or services for public contracts.
Takes effect on the 91st day following adjournment sine die.
A BILL FOR AN ACT
Relating to contract preferences in public procurement for employee-owned businesses; creating new
provisions; amending ORS 279A.128; and prescribing an effective date.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 279A.128 is amended to read:
279A.128. (1) As used in this section, “services” means services as defined in ORS 279A.010
(1)(kk) and personal services designated under ORS 279A.055.
(2)(a) Notwithstanding provisions of law requiring a contracting agency to award a contract to
the lowest responsible bidder or best proposer or provider of a quotation, a contracting agency that
uses public funds to procure goods or services for a public use under ORS chapter 279B may give
preferenceto:
(A) Procuring goods or services [provided by] from one of the following sources, if the goods
or services cost not more than five percent more than goods or services available from
contractors other than the source:
(i) A benefit company that is incorporated, organized, formed or created under ORS 60.754, that
submits with a bid or proposal a certificate of existence issued under ORS 60.027 and has the ma-
jority of the benefit company’s regular, full-time workforce located in this state at the time the
benefit company submits the bid or proposal[, if the goods or services cost not more than five percent
more than goods or services available from a contractor that is not a benefit company]; or
(ii) An entity in which the entity’s employees own at least 50 percent of the ownership
interest in the entity directly or through an employee stock ownership plan, as defined in
26 U.S.C.4975(e)(7), as in effect on the effective date of this 2025 Act, that the United States
Internal Revenue Service recognizes as a qualified plan; or
(B) Procuring goods that are fabricated or processed, or services that are performed, entirely
within this state if the goods or services cost not more than 10 percent more than goods that are
not fabricated or processed, or services that are not performed, entirely within this state.
(b) If more than one bidder or proposer qualifies for a preference described in paragraph (a) of
this subsection, the contracting agency may give a further preference to a qualifying bidder or
NOTE:Matter in boldfaced type in an amended section is new; matter [italic and bracketed] is existing law to be omitted.
New sections are in boldfaced type.
LC 3680 HB3646
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proposer that resides in or is headquartered in this state.
(c) A contracting agency may give a preference to an entity described in paragraph
(a)(A)(ii) of this subsection only if the entity submits with a bid or proposal for a public
contract evidence that shows that employees of the entity own at least 50 percent of the
entity’s ownership interest directly or through an employee stock ownership plan.
[(c)] (d) The contracting agency by order may set a higher cost percentage than the cost per-
centages set forth in paragraph (a) of this subsection if the contracting agency, in a written deter-
mination to support the order, finds good cause to set the higher cost percentage and explains the
contracting agency’s reasons and evidence for the finding.
(3) Notwithstanding ORS 279C.320 (1), subsection (2) of this section does not apply to emergency
work, minor alterations, ordinary repairs or maintenance work for public improvements or to other
construction contracts described in ORS 279C.320 (1).
SECTION 2. The amendments to ORS 279A.128 by section 1 of this 2025 Act apply to
procurements that a contracting agency advertises or solicits or, if the contracting agency
does not advertise or solicit the procurement, to a public contract into which the contracting
agency enters on or after the effective date of this 2025 Act.
SECTION 3.(1) The amendments to ORS 279A.128 by section 1 of this 2025 Act become
operative on January 1, 2026.
(2) The Attorney General, the Director of the Oregon Department of Administrative
Services, the Director of Transportation and a contracting agency that adopts rules under
ORS 279A.065 or 279A.070 may take any action before the operative date specified in sub-
section (1) of this section that is necessary to enable the Attorney General, the directors or
the contracting agency to undertake and exercise, on and after the operative date specified
in subsection (1) of this section, all of the duties, functions and powers conferred on the
Attorney General, the directors or the contracting agency by the amendments to ORS
279A.128 by section 1 of this 2025 Act.
SECTION 4. This 2025 Act takes effect on the 91st day after the date on which the 2025
regular session of the Eighty-third Legislative Assembly adjourns sine die.
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