North Carolina Senate Bill 802: A Pioneering Step for Employee Ownership

Image: NCEOC Government Affairs Committee member Pamela Colley of SEL lobbying in DC on behalf of ESOPs in August, along with Mike Willard and Gale Marett of Salem Fabrication Technologies Group

The North Carolina Employee Ownership Center (NCEOC) is pleased to announce the passage of Senate Bill 802 by the North Carolina legislature. This infrastructure financing bill also includes language that allows ESOP companies to maintain their HUBZone (Historically Underutilized Business Zone) status, provided that at least 51% of the plan participants are members of historically disadvantaged groups. This provision ensures these companies retain preferential access to public contracting opportunities, setting a national precedent and paving the way for other states to follow.

Helping North Carolina Businesses Thrive

Historically Underutilized Businesses (HUBs) have long faced challenges in converting to ESOPs, primarily due to the risk of losing critical contracting preferences once their ownership structures change. 

Senate Bill 802 removes this significant barrier, offering a sustainable path for these businesses to transition to employee ownership without sacrificing their competitive edge in securing government contracts. This is not just a win for individual businesses but a triumph for economic inclusivity and empowerment at a broader scale. The legislation was signed into law by the North Carolina Governor on July 1, 2024. 

NCEOC is Excited to See This Impact

The NCEOC Government Relations Committee has been in touch with the bill?s sponsors and is having discussions about additional potential legislation that would positively affect employee-owned businesses in our state. 

This new law is poised to have far-reaching implications beyond North Carolina. Other states, such as Tennessee and Texas, have proposed similar bills. Read more about policies that states around the US have implemented to encourage employee ownership here.

How You Can Get Involved

The NCEOC will continue to work closely with state lawmakers, business leaders, and community advocates to enhance the economic landscape for employee-owned enterprises. If you are interested in joining the NCEOC Government Relations Committee or would like to participate in a future Lobby Day to advocate for positive employee-ownership policies, please contact Anne-Claire Broughton at acbroughton@nceoc.org.