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SB 653

Procurement - Employee Stock Ownership Plan Preference - Pilot

2025 Regular Session Introduced by Cory McCray

Maryland's pilot program gives state procurement preference to Employee Stock Ownership Plans, steering government contracts toward worker-owned companies to boost shared wealth-building.

Approved by the Governor - Chapter 736
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Bill Summary · SB 653

Legislative bill overview

SB 653 establishes a pilot program in Maryland that gives preference to Employee Stock Ownership Plans (ESOPs) during state procurement processes. The bill requires the state to prioritize bidders where employees have ownership stakes through ESOPs, with the goal of promoting worker ownership and potentially strengthening local economies through shared corporate ownership models.

Why is this important

This legislation directly affects how Maryland spends taxpayer dollars on goods and services by steering contracts toward ESOP-structured companies. The policy aims to increase wealth-building opportunities for workers while potentially supporting business stability, though it also introduces new criteria into procurement decisions that traditionally prioritize cost, quality, and efficiency.

Potential points of contention

  • Procurement cost impact: Giving preference to ESOPs may result in higher contract prices or limit competition if fewer bidders meet ESOP criteria, potentially raising taxpayer costs
  • Pilot program scope uncertainty: As a pilot, questions remain about which procurement categories qualify, what "preference" means in concrete terms, and how success will be measured
  • Implementation complexity: State agencies must develop new evaluation systems to identify and verify ESOP status, adding administrative burden and potential delays to procurement processes

Compiled from official sources — confirm details with the bill’s official record.

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