BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 1012| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: SB 1012 Author: Nguyen (R), et al. Amended: 4/18/16 Vote: 21 SENATE GOVERNMENTAL ORG. COMMITTEE: 12-0, 4/12/16 AYES: Hall, Berryhill, Block, Gaines, Galgiani, Glazer, Hernandez, Hill, Hueso, Lara, McGuire, Vidak NO VOTE RECORDED: Runner SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/2/16 AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen SUBJECT: Flags: purchase SOURCE: Author DIGEST: This bill requires that any Flag of the United States or the Flag of the State of California purchased by the state or any local government agency be made in the United States. ANALYSIS: Existing law: 1)Requires the Flag of the United States and the Flag of the State of California to be prominently installed, displayed, and maintained in the following places: a) In the courtrooms of all courts of the State. b) In all rooms where any court or any state, county, or municipal commission holds any sessions. SB 1012 Page 2 2)Requires the Flag of the United States and the Flag of the State of California to be prominently displayed during business hours upon or in front of the buildings or grounds of or at each of the following places: a) Each public building belonging to the State, county, or municipality. b) At the entrance and exit of every state park. c) At the entrance or upon the grounds of each campus of the University of California. d) At the entrance or upon the grounds or upon the administration building of every university, college, high school, and elementary school, both public and private, within the State. e) Upon or at every agricultural inspection station just inside California and located on every highway leading into California. f) At the entrance of or within every state highway maintenance station where personnel reside or are on duty at the time necessary to raise and lower the Flag. 3)Requires the Flag of the United States and the Flag of the State of California to be prominently displayed during any and all games and performances of every kind which take place in a coliseum, stadium, bowl, or other open air sites, and at all race tracks where racing is being conducted. This bill: 1)Requires, on or after January 1, 2017, that every Flag of the United States or the Flag of the State of California purchased by the state or any local government agency shall be made in the United States. 2)Defines a "local government agency," for purposes of this bill, to mean a county, city, city and county, town, municipal corporation, school district or other district, political subdivision, or any board, commission, or agency thereof, or other local agency. Background Purpose of the bill. According to the author, "current law is SB 1012 Page 3 silent on the sources from which American flags are purchased by governments in the State of California. In order to support American manufacturing jobs in the future, California governments should only use taxpayer dollars to purchase flags made from materials grown, produced, and manufactured in the United States." Purchasing of Flags. Though there is no statutory requirement that requires the State of California to purchase flags made in the United States, the Department of General Services currently purchases all of its United States and California flags from the California Prison Industry Authority (CALPIA), thus satisfying this bill's requirement that the flags be made in the United States. The CALPIA has indicated that the flags they produce would be consistent with the requirements set forth in this bill. Legal Concerns. Governor Brown has previously vetoed legislation that seeks to give preference for California products because of concerns of costly legal challenges. For example in 2015, Governor Brown vetoed AB 429 (Dahle), a bill that sought to provide a bid preference for California products when contracting for lumber and solid wood products. In his veto message he stated that, "while I encourage the purchase of California products, especially when price and quality are equal, this bill would invite costly legal challenges for little benefit." These concerns seem to stem from challenges to California's Buy American Act and the Buy California Act, both of which were enacted by the California Legislature in 1943. The Buy American Act generally requires the state and all local government entities to contract only with contractors that use materials of United States origin or manufacture. The Buy California Act contains price-sensitive preferences for California goods and supplies. These and similar provisions have been challenged in the courts as interfering with the federal government's foreign relations power and violating the commerce clause and equal protection guarantee of the United States Constitution. For example, in Bethleem Steel Corp. v Board of Commissioners (1969) 276 Cal.App. 2d 221, the California Court of Appeal reviewed the California Buy American Act and held that it was invalid as an impermissible encroachment on the federal SB 1012 Page 4 government's foreign power to conduct foreign trade policy. Prior/Related Legislation AB 312 (Jones, 2015) provides that a product may be advertised as being made or manufactured in the United States if the merchandise has been all or virtually all made in the United States. (Pending in Senate Judiciary Committee) AB 429 (Dahle, 2015) would have established a bid preference for state contracts for lumber and other solid wood products harvested in compliance with the Z'berg-Nejedly Forest Practice Act, federal timber sales, or a federal certification program identified by the director of the Department of Forestry and Fire Protection. (Vetoed by Governor Brown) SB 633 (Hill, Chapter 238, Statutes of 2015) prohibited the sale of merchandise labeled Made in U.S.A., Made in America, U.S.A, or similar words if the merchandise or any article, unit, or part thereof, has been entirely or substantially made, manufactured, or produced outside of the United States with minor exceptions. AB 199 (Holden 2013) would have required specified government agencies, and encouraged public education entities to purchase agriculture products produced in California if certain criteria are met. (Vetoed by Governor Brown) FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No According to the Senate Appropriations Committee, no new costs, as all flags currently purchased by DGS are made in the United States. However, potential reimbursable mandate costs, but only to the extent local agencies are not currently purchasing United States made flags, those flags are more expensive than those currently purchased by local agencies, and the net cost-differential exceeds $1,000 for each affected agency in a given fiscal year. (General Fund) SB 1012 Page 5 Any state- reimbursable costs would be contingent upon the filing of a successful reimbursement claim with the Commission on State Mandates, and a determination by the Commission that specific mandated local costs are deemed reimbursable. SUPPORT: (Verified5/3/16) American G.I. Forum of California American Legion - Department of California AMVETS - Department of California California Association of County Veteran Service Officers California State Commanders Service Council Made in the USA Foundation Military Officers Association - California Council of Chapters VFW - Department of California Vietnam Veterans of America, California State Council OPPOSITION: (Verified5/3/16) None received ARGUMENTS IN SUPPORT: Supporters argue that they believe that the flag of the United States should be made in our country and that public agencies should only purchase those that are made in America. Prepared by:Felipe Lopez / G.O. / (916) 651-1530 5/4/16 15:04:15 **** END **** SB 1012 Page 6