SF 2222 (LSB 5417ST (1) 84)

SENATE FILE 2222

BY  DOTZLER, DVORSKY, SENG, HANCOCK, BOWMAN, HATCH, HORN, DEARDEN, FRAISE, COURTNEY, GRONSTAL, KIBBIE, BLACK, JOCHUM, RAGAN, WILHELM, DANIELSON, BOLKCOM, SCHOENJAHN, SODDERS, and RIELLY

A BILL FOR

An Act requiring American products to be used for public improvements, providing a penalty, and including applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  73.22  Title.
   This division may be cited as the “Iowa Buy American Act”.
    Sec. 2.  NEW SECTION.  73.23  Definitions.
   1.  “Construction” includes reconstruction, alteration, repair, improvement, and maintenance.
   2.  “Governmental unit” means the state, or any county, city, or other political subdivision or any department, division, board, or other agency of any of these entities.
   3.  “Manufactured in the United States” means:
   a.  For an iron or steel product, all the manufacturing of the iron or steel product, other than metallurgical processes involving the refinement of steel additives, took place in the United States.
   b.  For a manufactured good which is not an iron or steel product, all of the following:
   (1)  All the manufacturing processes for the manufactured good took place in the United States.
   (2)  All of the components of the manufactured good are of United States origin. A component shall be considered of United States origin if all of the component’s manufacturing processes took place in the United States, regardless of the origin of its subcomponents.
   4.  “Public improvement” means any structure, building, highway, waterway, street, bridge, transit system, airport, or other betterment, work, or improvement, whether of a permanent or temporary nature and whether for governmental or proprietary use.
   5.  “United States” means the United States of America and includes all territory, continental or insular, subject to the jurisdiction of the United States.
    Sec. 3.  NEW SECTION.  73.24  Use of American products for public improvements required.
   Each contract for the construction of a public improvement made by a governmental unit shall contain a provision requiring that the iron, steel, and manufactured goods used or supplied in the performance of the contract or any subcontract thereto be manufactured in the United States.
    Sec. 4.  NEW SECTION.  73.25  Waiver.
   1.  Section 73.24 may be waived for a contract for the construction of a public improvement made by a governmental unit if a person with the necessary authority for the governmental unit finds any of the following:
   a.  Application of section 73.24 would be contrary to the public interest.
   b.  The products necessary for the public improvement are not produced in the United States in sufficient and reasonably available quantities and of a satisfactory quality.
   c.  Application of section 73.24 would increase the cost of the contract by more than five percent.
   2.  If a person with the necessary authority for a governmental unit determines that a waiver pursuant to this section may be appropriate, the person shall do all of the following before granting a waiver:
   a.  Prepare a detailed, written justification as to why the waiver is needed. The justification shall be published on the governmental unit’s internet site and at least once in a newspaper of general circulation in any county where the public improvement will occur. The justification shall also be made available to any member of the public upon request. The justification shall include notice of the opportunity for public comment required by paragraph “b”.
   b.  Provide an opportunity for public comment on the justification for a reasonable period of time not to exceed fifteen days.
   c.  Consider all comments received during the comment period in evaluating whether to waive section 73.24.
   3.  If a person with the necessary authority for a governmental unit, in consultation with the United States trade representative, determines all of the following regarding a foreign country, this subsection shall not apply to products manufactured in that foreign country:
   a.  The foreign country is a party to an agreement with the United States, and, pursuant to the agreement, the head of a federal agency has waived the requirements of this division.
   b.  The foreign country has violated the terms of the agreement by discriminating against products covered by this agreement and by this division that are produced in the United States.
    Sec. 5.  NEW SECTION.  73.26  Penalty.
   A person shall be ineligible to receive any contract or subcontract with a governmental unit if a court or federal or state agency determines that the person intentionally did any of the following:
   1.  Represented that any product used in a public improvement to which this division applies was manufactured in the United States when the product was not manufactured in the United States.
   2.  Affixed a label bearing a “Made in America” inscription, or any inscription with the same meaning, to any product used in a public improvement to which this division applies when the product was not manufactured in the United States.
    Sec. 6.  IMPLEMENTATION OF ACT.  Section 25B.2, subsection 3, shall not apply to this Act.
    Sec. 7.  APPLICABILITY.  This Act applies to public improvement contracts entered into on or after July 1, 2012.
EXPLANATION
   This bill requires each contract for the construction of a public improvement made by a governmental unit to contain a provision requiring that the iron, steel, and manufactured goods used or supplied in the performance of the contract or any subcontract be manufactured in the United States. The bill provides definitions for “construction”, “manufactured in the United States”, and “public improvement”.
   The bill provides that the requirement may be waived if a person with the necessary authority for a governmental unit finds that application of the requirement would be contrary to the public interest, that the products necessary for the public improvement are not produced in the United States in sufficient and reasonably available quantities and of a satisfactory quality, or that the requirement would increase the cost of the contract by more than 5 percent.
   The bill provides that before a person can grant a waiver of the requirement, the person must publish and make available a detailed, written justification as to why the waiver is needed. The justification is to include notice of an opportunity for public comment. The comment period is to be for a reasonable period of time not to exceed 15 days. The person must consider all comments received during the comment period in evaluating whether to grant a waiver. The bill limits waiver authority for foreign countries which violate the terms of certain trade agreements with the United States.
   The bill provides that a person is ineligible to receive any contract or subcontract with a governmental unit if a court or federal or state agency determines that the person intentionally represented that any product used in a public improvement was manufactured in the United States when the product was not manufactured in the United States or affixed a label bearing a “Made in America” inscription, or any inscription with the same meaning, to any product used in a public improvement when the product was not manufactured in the United States.
   The bill may include a state mandate as defined in Code section 25B.3. The bill makes inapplicable Code section 25B.2, subsection 3, which would relieve a political subdivision from complying with a state mandate if funding for the cost of the state mandate is not provided or specified. Therefore, political subdivisions are required to comply with any state mandate included in the bill.
   The bill applies to public improvement contracts entered into on or after July 1, 2012.