Sources of Revenue:

General Fund

Legislation creates:

Neither Program nor Fund

Fiscal Note Summary

Effect this measure will have on costs and revenues of state government.

The purpose of this bill is to require state agencies to purchase only supplies, materials, equipment and other articles that are made in America. The Department of Administration previously submitted a fiscal note based upon the language of the originally introduced bill. However, a strike through and insert amendment was adopted by the Energy and Labor Committee. The previous fiscal note submitted by the Department of Administration is no longer applicable to this bill. The Department of Administration is unable to determine the fiscal impact to the state as a result of the passage of the bill as currently written. The new language now requires each individual entity to ensure that the products are made in the United States and now requires the majority of the administrative duties for developing the lists and enforcing the provisions under the Division of Labor. The current bill does require the public entity accepting public contracts to adopt rules as necessary to carry out the provisions of this article. The amended bill does not significantly lessen the Department of Administration’s responsibility. The Department of Administration’s Purchasing Division still must approve all contracts. The Purchasing Division would also be involved in offenses and possible suspensions and debarment of vendors. There would be administrative costs associated with the bill as it relates to the Purchasing Division. The Department of Administration estimates the final impact to be approximately $190,000 for their involvement in the process. The Department of Administration can not determine the fiscal impact to the state as a result of the current bill as the costs to each individual entity, costs to the Division of Labor and the time and resources available to carry out the provision on all entities are unknown.

Fiscal Note Detail

Effect of Proposal	Fiscal Year
Effect of Proposal	2014 Increase/Decrease (use"-")	2015 Increase/Decrease (use"-")	Fiscal Year (Upon Full Implementation)
1. Estmated Total Cost	188,000	168,000	168,000
Personal Services	110,000	110,000	110,000
Current Expenses	20,000	20,000	20,000
Repairs and Alterations	0	0	0
Assets	25,000	5,000	5,000
Other	33,000	33,000	33,000
2. Estimated Total Revenues	0	0	0

Explanation of above estimates (including long-range effect):

The current bill requires each public agency to require goods and equipment be manufactured in the United States during the design and engineering specifications for projects. It allows persons responding to solicitations to ask for a waiver. It requires the public entity to implement procedures for issuance of a final decision on waivers, to report the final decisions to the Division of Labor, and allows the public entity to request documentation from vendors verifying compliance. The current bill requires the Division of Labor to develop annual lists and make them public as to what products are manufactured in the United States and what products are not but have been approved for a waiver. In developing such list the Division of Labor shall seek public input annually. The bill sets forth enforcement for violations and requires hearings by the Division of Labor. It gives the Division of Labor authority to review all projects for violations and issue cease and desist orders requiring such person to immediately cease all practices in violation. The potential cost is unknown, but, likely, significant to the State.. Without known costs, this agency cannot speculate exact expenses in terms of short- or long-term effects.

Memorandum

The passage of this legislation could have potential unintended consequences such as: prohibiting the state from buying certain products that may be required to maintain capability with systems currently in existence; delays in work and services; protests and other litigation over the percent of American made, reduction of constructions jobs due to less projects being able to be done. A task force of various agency representatives and other stakeholders met last year during the legislative interims to discuss the Buy American issue as it related to construction. Generally, the consensus and final report indicates that most agencies already purchase mostly American-made products. There is no way to determine whether the increased administrative costs to the State would increase the percentage of products made in America.

Person submitting Fiscal Note: Donna Lipscomb Spano
Email Address: donna.m.lipscombspano@wv.gov