Senate Bill No. 381
(By Senators Miller, Yost, Klempa, Wills, Laird, D. Facemire, Chafin, Foster, Kessler (Mr. President), Plymale and Jenkins)
[Originating in the Committee on Government Organization;
reported February 23, 2012.]
A BILL to amend and reenact §5-19-1, §5-19-2, §5-19-3 and §5-19-4 of the Code of West Virginia, 1931, as amended; and to amend said code by adding thereto three new sections, designated §5-19-5, §5-19-6 and §5-19-7, all relating to creating the West Virginia Buy American Act; defining terms; requiring public agency construction contracts for public buildings or public works which utilize state grants or state loans to finance all or part of the construction costs contain a provision requiring that the iron, steel, manufactured goods, coal and timber used or supplied for the project be manufactured or produced in the United States; permitting waivers; exceptions; violations; and limitations.
Be it enacted by the Legislature of West Virginia:
That §5-19-1, §5-19-2, §5-19-3 and §5-19-4 of the Code of West Virginia, 1931, as amended, be amended and reenacted; and that said code be amended by adding thereto three new sections, designated §5-19-5, §5-19-6 and §5-19-7, all to read as follows:
ARTICLE 19. WEST VIRGINIA BUY AMERICAN.
§5-19-1. Short title.
This act may be cited as the “West Virginia Buy American Act.”
§5-19-2. Legislative findings.
(a) The Legislature finds that:
(1) The production of iron, steel, manufactured goods, coal and timber provides jobs and family income to many individuals in this state and, in turn, the jobs and family incomes of millions of persons in the United States;
(2) The taxes paid to the state and its political subdivisions by employers and employees engaged in the production and sale of iron, steel, manufactured goods, coal and timber are a large source of public revenues for West Virginia;
(3) The economy and general welfare of West Virginia and its people and the economy and general welfare of the United States are inseparably linked to the preservation and development of manufacturing, harvesting and mineral extraction industries in this state, as well as all the other states of the nation;
(4) The state’s taxpayer dollars are better spent if reinvested with its individual and employer taxpayers in order to foster job retention and growth, particularly within the manufacturing, harvesting and mineral extraction sectors, and to ensure a broad and healthy tax base for future investments vital to the state’s infrastructure; and
(5) West Virginia’s procurement policies should reflect the state’s and the nation’s principles ensuring that the products of those companies and workers who abide by our workplace safety and environmental laws and regulations should be rewarded with a commonsense preference in government contracting.
(b) It is the policy of West Virginia that all public officials and agencies should aid and promote the economy of the state and the United States by requiring a preference for the procurement of iron, steel, manufactured goods, coal and timber produced in the United States in all contracts for the construction, reconstruction, repair, improvement or maintenance of public works.
As used in this article, the following terms have the meanings ascribed to them in this section, unless the context in which the term is used clearly requires another meaning:
(1) “Construction material” means an article, material or supply brought to the construction site by the contractor or a subcontractor for incorporation into the building or work. The terms also includes an item brought to the site preassembled from articles, materials or supplies. However, emergency life safety systems, such as emergency lighting, fire alarm and audio evacuation systems, that are discrete systems incorporated into a public building or work and that are produced as complete systems, are evaluated as a single and distinct construction material regardless or when or how the individual parts or components of those systems are delivered to the construction site. Materials purchased directly by the public agency are supplies, not construction material.
(2) “Domestic construction material” means:
(A) An unmanufactured construction material mined or produced in the United States; or
(B) A construction material manufactured in the United States.
(3) Foreign construction material” means a construction material other than a domestic construction material.
(4) “Manufactured construction material” means any construction material that is not unmanufactured construction material.
(5) “Manufactured” means:
(A) In the case of an iron or steel product all manufacturing must take place in the United States, except metallurgical processes involving the refinement of steel additives; or
(B) In the case of a manufactured good, a good will be considered manufactured in the United States if:
(i) All the manufacturing processes for the product take place in the United States; and
(ii) All of the components of the product are of United States origin. A component will be considered a product of United States origin if all the manufacturing processes take place in the United States, regardless of the origin of its subcomponents.
(6) “Public agency” or “agency” means the State of West Virginia, its departments, agencies, boards, commissions, and institutions, and all units and political subdivisions, including local school districts.
(7) “Public buildings” and “public works” mean 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. The term includes, but is not limited to, any railway, street railway, subway, elevated and monorail passenger or passenger and rail rolling stock, self-propelled cars, gallery cars, locomotives, passenger buses, wires, poles and equipment for electrification of a transit system, rails, tracks, roadbeds, guide ways, elevated structures, buildings, schools, hospitals, stations, terminals, docks, shelters and repairs to any of the foregoing.
(8) “Steel” means an alloy that includes at least 50 percent iron, between 0.02 and 2 percent carbon, and may include other elements.
(9) “United States” means all 50 states of the United States, the District of Columbia, and all territories of the United States.
(10) “Unmanufactured construction material” means raw material brought to the construction site for incorporation into the building or work that has not been:
(A) Processed into a specific form and shape; or
(B) Combined with other raw material to create a material that has different properties than the properties of the individual raw materials.
§5-19-4. Use of American materials.
(a) Notwithstanding any other provision of law, each contract for the construction, reconstruction, alteration, repair, improvement or maintenance of a public building or public works made by a public agency which is funded in whole or in part by state grants, state loans or state appropriations shall contain a provision that the iron, steel, manufactured goods, coal and timber used or supplied as construction materials in the performance of the contract or any subcontract thereto were manufactured or produced in the United States.
(b) The contractor shall use only domestic construction material in performing the contract, unless one of the exceptions set forth in subsection (c) of this section applies.
(c) The application of the preference shall not be required if the State or the public agency determines one or more of the following:
(1) The cost of domestic construction material would be unreasonable:
(A) The cost of domestic iron, steel, or other manufactured goods used as construction material is unreasonable when the cumulative cost of such material will increase the cost of the contract by more than 20 percent; or
(B) The cost of unmanufactured construction material is unreasonable when the cost of such material exceeds the cost of foreign material by more than 6 percent;
(2) The construction material is not mined, produced or manufactured in the United States in sufficient and reasonably available quantities;
(3) The construction material mined, produced or manufactured in the United States is not of satisfactory quality; or
(4) The application of the provisions of the West Virginia Buy American Act to a particular construction material would be inconsistent with the public interest.
§5-19-5. Waiver or exemption request; procedures.
(a) If any contractor seeks a waiver from the requirements of the West Virginia Buy American Act, or seeks to use foreign construction material on a project, it shall seek a waiver from the provisions of this article from the public agency administering the contract.
(b)(1) Any waiver request submitted by a contractor must include adequate information for the public agency to evaluate the request, including:
(A) A description of the foreign and domestic construction materials;
(B) Unit of measure;
(E) Time of delivery or availability;
(F) Location of the construction project;
(G) Name and address of the proposed supplier; and
(H) A detailed justification of the reason for use of foreign construction materials.
(2) A request based on unreasonable cost must be accompanied by a reasonable survey of the market and a completed cost comparison table, illustrating the calculation of comparative costs of using the foreign construction material and using the domestic construction material on the project.
(3) The cost of construction material shall include all delivery costs to the construction site and any applicable duty.
(4) Any contractor request for a waiver or exemption submitted after a contract is awarded shall explain why the contractor could not reasonably foresee the need for such determination and could not have requested the waiver before the contract was awarded. If the contractor does not submit a satisfactory explanation, the request may be summarily denied by the public agency.
(c) If the public agency determines after the contract was awarded that an exception to this article applies, the public construction contract may be modified to allow for the use of the foreign construction material. However, when the basis for the waiver or exception is the unreasonable cost of a domestic construction material, the cost difference may not be less than the differential established in paragraph one, subsection (c), section four of this article.
(d) Unless the public agency determines that an exception applies, use of foreign construction material on a project subject to the provisions of this article is in violation of this article.
(e) Whenever a public agency grants an exception to the requirement to use domestic construction materials on a project that is subject to this article, it shall:
(1) Publish, in the State Register, a detailed written justification as to why the waiver was granted; and
(2) Receive comments and information on the granted waiver. (f) If the public agency finds after notice and comment that the information supplied by the contractor in support of the waiver request was inaccurate or misleading, it may rescind the granted waiver or exception.
A person shall be ineligible to receive any contract or subcontract with a public agency if a court or federal or public agency determines that a person intentionally:
(1) Affixed a label bearing a "Made in America" or “Produced in America” inscription, or any inscription with the same meaning, to any product used in projects to which this article applies, sold in or shipped to the United States that was not made or produced in the United States; or
(2) Represented that any product used in projects to which this article applies, sold in or shipped to the United States that was not produced in the United States, was produced in the United States.
§5-19-7. Limitation on applicability of waivers.
The waiver procedures and exceptions granted under this article do not apply to products produced in a foreign country if the head of the public agency, in consultation with the United States Trade Representative, determines that:
(1) The foreign country is a party to an agreement with the United States and pursuant to that agreement the head of the public agency has waived the requirements of this article; and
(2) The United States has determined that the foreign country has violated the terms of the trade agreement it has with the United States by discriminating against products covered by this article that are produced in the United States and are covered by the agreement.