Senate File 70 - Introduced SENATE FILE 70 BY BOLKCOM , PETERSEN , SODDERS , MATHIS , HART , BOWMAN , BEALL , McCOY , JOCHUM , GRONSTAL , QUIRMBACH , WILHELM , DEARDEN , HORN , TAYLOR , HATCH , BRASE , SENG , DANIELSON , DVORSKY , RAGAN , SCHOENJAHN , and BLACK A BILL FOR An Act requiring American products to be used for public 1 improvements, providing a penalty, and including 2 applicability provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 1041XS (4) 85 je/sc

S.F. 70 Section 1. NEW SECTION . 73.22 Title. 1 This division may be cited as the “Iowa Buy American Act” . 2 Sec. 2. NEW SECTION . 73.23 Definitions. 3 1. “Construction” includes reconstruction, alteration, 4 repair, improvement, and maintenance. 5 2. “Governmental unit” means the state, or any county, city, 6 or other political subdivision or any department, division, 7 board, or other agency of any of these entities. 8 3. “Manufactured in the United States” means: 9 a. For an iron or steel product, all the manufacturing of 10 the iron or steel product, other than metallurgical processes 11 involving the refinement of steel additives, took place in the 12 United States. 13 b. For a manufactured good which is not an iron or steel 14 product, all of the following: 15 (1) All the manufacturing processes for the manufactured 16 good took place in the United States. 17 (2) All of the components of the manufactured good are 18 of United States origin. A component shall be considered of 19 United States origin if all of the component’s manufacturing 20 processes took place in the United States, regardless of the 21 origin of its subcomponents. 22 4. “Public improvement” means any structure, building, 23 highway, waterway, street, bridge, transit system, airport, or 24 other betterment, work, or improvement, whether of a permanent 25 or temporary nature and whether for governmental or proprietary 26 use. 27 5. “United States” means the United States of America and 28 includes all territory, continental or insular, subject to the 29 jurisdiction of the United States. 30 Sec. 3. NEW SECTION . 73.24 Use of American products for 31 public improvements required. 32 Each contract for the construction of a public improvement 33 made by a governmental unit shall contain a provision requiring 34 that the iron, steel, and manufactured goods used or supplied 35 -1- LSB 1041XS (4) 85 je/sc 1/ 4

S.F. 70 in the performance of the contract or any subcontract thereto 1 be manufactured in the United States. 2 Sec. 4. NEW SECTION . 73.25 Waiver. 3 1. Section 73.24 may be waived for a contract for the 4 construction of a public improvement made by a governmental 5 unit if a person with the necessary authority for the 6 governmental unit finds any of the following: 7 a. Application of section 73.24 would be contrary to the 8 public interest. 9 b. The products necessary for the public improvement are 10 not produced in the United States in sufficient and reasonably 11 available quantities and of a satisfactory quality. 12 c. Application of section 73.24 would increase the cost of 13 the contract by more than five percent. 14 2. If a person with the necessary authority for a 15 governmental unit determines that a waiver pursuant to this 16 section may be appropriate, the person shall do all of the 17 following before granting a waiver: 18 a. Prepare a detailed, written justification as to why 19 the waiver is needed. The justification shall be published 20 on the governmental unit’s internet site and at least once in 21 a newspaper of general circulation in any county where the 22 public improvement will occur. The justification shall also 23 be made available to any member of the public upon request. 24 The justification shall include notice of the opportunity for 25 public comment required by paragraph “b” . 26 b. Provide an opportunity for public comment on the 27 justification for a reasonable period of time not to exceed 28 fifteen days. 29 c. Consider all comments received during the comment period 30 in evaluating whether to waive section 73.24. 31 3. If a person with the necessary authority for a 32 governmental unit, in consultation with the United States trade 33 representative, determines all of the following regarding a 34 foreign country, subsection 1 shall not apply to products 35 -2- LSB 1041XS (4) 85 je/sc 2/ 4

S.F. 70 manufactured in that foreign country: 1 a. The foreign country is a party to an agreement with the 2 United States, and, pursuant to the agreement, the head of a 3 federal agency has waived the requirements of this division. 4 b. The foreign country has violated the terms of the 5 agreement by discriminating against products covered by the 6 agreement and by this division that are produced in the United 7 States. 8 Sec. 5. NEW SECTION . 73.26 Penalty. 9 A person shall be ineligible to enter into any contract or 10 subcontract with a governmental unit if a court or federal or 11 state agency determines that the person intentionally did any 12 of the following: 13 1. Represented that any product used in a public improvement 14 to which this division applies was manufactured in the United 15 States when the product was not manufactured in the United 16 States. 17 2. Affixed a label bearing a “Made in America” inscription, 18 or any inscription with the same meaning, to any product used 19 in a public improvement to which this division applies when the 20 product was not manufactured in the United States. 21 Sec. 6. IMPLEMENTATION OF ACT. Section 25B.2, subsection 22 3, shall not apply to this Act. 23 Sec. 7. APPLICABILITY. This Act applies to public 24 improvement contracts entered into on or after July 1, 2013. 25 EXPLANATION 26 This bill requires each contract for the construction of 27 a public improvement made by a governmental unit to contain 28 a provision requiring that the iron, steel, and manufactured 29 goods used or supplied in the performance of the contract or 30 any subcontract be manufactured in the United States. The bill 31 provides definitions for “construction”, “manufactured in the 32 United States”, and “public improvement”. 33 The bill provides that the requirement may be waived if a 34 person with the necessary authority for a governmental unit 35 -3- LSB 1041XS (4) 85 je/sc 3/ 4

S.F. 70 finds that application of the requirement would be contrary to 1 the public interest, that the products necessary for the public 2 improvement are not produced in the United States in sufficient 3 and reasonably available quantities and of a satisfactory 4 quality, or that the requirement would increase the cost of the 5 contract by more than 5 percent. 6 The bill provides that before a person can grant a waiver of 7 the requirement, the person must publish and make available a 8 detailed, written justification as to why the waiver is needed. 9 The justification is to include notice of an opportunity for 10 public comment. The comment period is to be for a reasonable 11 period of time not to exceed 15 days. The person must consider 12 all comments received during the comment period in evaluating 13 whether to grant a waiver. The bill limits waiver authority 14 for foreign countries that violate the terms of certain trade 15 agreements with the United States. 16 The bill provides that a person is ineligible to enter 17 into any contract or subcontract with a governmental unit if 18 a court or federal or state agency determines that the person 19 intentionally represented that any product used in a public 20 improvement was manufactured in the United States when the 21 product was not manufactured in the United States or affixed 22 a label bearing a “Made in America” inscription, or any 23 inscription with the same meaning, to any product used in a 24 public improvement when the product was not manufactured in the 25 United States. 26 The bill may include a state mandate as defined in Code 27 section 25B.3. The bill makes inapplicable Code section 25B.2, 28 subsection 3, which would relieve a political subdivision from 29 complying with a state mandate if funding for the cost of 30 the state mandate is not provided or specified. Therefore, 31 political subdivisions are required to comply with any state 32 mandate included in the bill. 33 The bill applies to public improvement contracts entered 34 into on or after July 1, 2013. 35 -4- LSB 1041XS (4) 85 je/sc 4/ 4