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Problems with Buy American legislation

April 5, 2011

Problems with Buy American legislation
— Rerun of 2010 measure reruns same problems
By John Ledger
Associated Oregon Industries

In a rerun of a failed 2010 measure, HB 3349 – “Buy America” got a hearing in the House Business and Labor Committee, but lack of support precluded a vote on the bill.

The summary for HB 3349 reads “Prohibits contracting agency (e.g., government) from awarding contract for public improvement or public works unless iron, steel, wood products and manufactured goods, including equipment, used in public improvement or public works are produced within the United States. Specifies exceptions.” The term “public improvement or public works” is interpreted to mean any construction. The term “iron, steel, wood products and manufactured goods, including equipment” seems to include, other than minerals (e.g. stone) anything non-supernatural.

Both private (including AOI) and public sector representatives have discussed the difficulties presented by this and related bills. The requirements imposed by these measures will impose further burdens on all contractors and especially smaller contracting agencies that have few, if any, fulltime public contracting professionals, and create confusion among bidders and manufacturers. If it results in increased material costs (likely accruing to out-of-state entities), there may well be a resultant reduction in project size and, accordingly, use of Oregon labor. This is especially true with respect to projects funded by voter-approved bond measures, which are limited to specific levels of investment. Other problems are illustrated by the California Court of Appeals striking down a “Buy American” statute on the grounds that international trade and foreign relations are within the purview of the federal government. This ruling, while not binding on an Oregon court, relied heavily on U.S. Supreme Court case law indicating that similar statutes may encounter such similar problems.

Following the 2010 Legislative Session, Senator Joanne Verger (D-Coos Bay) lead what could best be described as a graciously valiant attempt to produce a bill by holding a series of meetings with a large, diverse, group of interested parties. The result was a report submitted to Senator Verger by AOI and the League Oregon Cities, dealing with the private/public sector workgroup’s efforts and conclusions. The report was submitted into the record at the House hearing.

For now, no vote is scheduled. It’s unclear if the issue will arise again in one of its numerous forms.

  
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