Existing law 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 each public building belonging to the state, a county, or a municipality, among other places.

This bill would, on and after January 1, 2017, require 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.

Existing law 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 each public building belonging to the state, a county, or a municipality, among other places.

This bill would, on and after January 1, 2017, require 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.

Existing law 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 each public building belonging to the state, a county, or a municipality, among other places.

This bill would, on and after January 1, 2017, require 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 from articles, materials, or supplies that were grown, produced, and manufactured in the United States.

Existing law 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 each public building belonging to the state, a county, or a municipality, among other places.

This bill would, on and after January 1, 2017, require 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 from articles, materials, or supplies that were grown, produced, and manufactured in the United States.

SENATE THIRD READING

STR Bill Id:SB 1012

Author:(Nguyen)

As Amended Ver:April 18, 2016

Majority vote

SENATE VOTE: 35-0

SUMMARY: Requires State and local governments that purchase any flag of the United States (US) or flag of the State of California to purchase ones made in the US.

EXISTING LAW: Requires the Flag of the US and the Flag of the State of California to be displayed in several places, including on the grounds of government buildings, in rooms holding government sessions, and in court rooms.

FISCAL EFFECT: According to the Assembly Appropriations Committee, no additional new state costs, as all flags currently purchased by the Department of General Services (DGS) are made in the US.

Potential reimbursable costs, but only to the extent a local agency is not currently purchasing US-made flags, and such flags are more expensive than those currently purchased by the agency and result in increased costs to the agency exceeding $1,000 in any given fiscal year. This is unlikely.

COMMENTS: This bill requires state and local government agencies, when purchasing US or California flags, to buy those made in the US only. According to DGS, the state currently only purchases US-made flags. Those flags are produced by the California Prison Industry Authority (PIA).

This bill defines "local government agency" to include 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.

The author states, "It makes sense to have both our American and California flags manufactured by Americans here at home in the United States. California should not weaken our symbol of national pride by allowing governments to purchase American or California flags with taxpayer dollars from non-American sources."

The extent to which this bill would changes current purchasing practices is unknown. While the state currently purchases US-made flags, it is unclear how many local government agencies purchase flags that are not made in the US. According to the author's office, local governments that it surveyed already buy US-made flags.

In addition to PIA selling US-made flags, an online search for US and California flags showed several others vendors that sell US-made flags.

This bill, if implemented, could face legal challenges. Governor Brown has previously vetoed legislation that seeks to give preference to 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. The veto message 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."

Preferences enacted by California and other states to purchase products made in the US or in respective states have met legal challenges that questioned the authority of states to enact such laws.

Analysis Prepared by: Scott Herbstman / A. & A.R. / (916) 319-3600 FN: 0003738

Date of Hearing: August 3, 2016

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

SBPCA Bill Id:SB 1012

Author:(Nguyen) – As Amended Ver:April 18, 2016

Urgency: No State Mandated Local Program: Yes Reimbursable: Yes

SUMMARY:

This bill requires State and local governments that purchase any flag of the United States (US), or flag of the State of California, to purchase ones made in the US.

FISCAL EFFECT:

No additional new state costs, as all flags currently purchased by the Department of General Services (DGS) are made in the US.

Potential reimbursable costs, but only to the extent a local agency is not currently purchasing US-made flags, and such flags are more expensive than those currently purchased by the agency and result in increased costs to the agency exceeding $1,000 in any given fiscal year. This is unlikely.

COMMENTS:

Purpose. The author states, "It makes sense to have both our American and California flags manufactured by Americans here at home in the United States. California should not weaken our symbol of national pride by allowing governments to purchase American or California flags with taxpayer dollars from non-American sources."

According to the analysis of this bill by the Assembly Committee on Accountability and Administrative Review, the bill, if implemented, could face legal challenges. Governor Brown has previously vetoed legislation that seeks to give preference to California products because of such concerns. For example, the Governor vetoed AB 429 (Dahle) of 2015, a bill providing bid preference for California products in state contracts for lumber and solid wood products. The Governor argued, “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.”

Preferences enacted by California and other states to purchase products made in the US or in respective states have met legal challenges that questioned the authority of states to enact such laws.

Analysis Prepared by: Chuck Nicol / APPR. / (916) 319-2081

Date of Hearing: June 29, 2016

ASSEMBLY COMMITTEE ON ACCOUNTABILITY AND ADMINISTRATIVE REVIEW

Cristina Garcia, Chair

SBPCA Bill Id:SB 1012

Author:(Nguyen) – As Amended Ver:April 18, 2016

SENATE VOTE: 35-0

SUBJECT: Flags: purchase

SUMMARY: Requires State and local governments that purchase any flag of the United States (US) or flag of the State of California to purchase ones made in the US.

EXISTING LAW: Requires the Flag of the US and the Flag of the State of California to be displayed in several places, including on the grounds of government buildings, in rooms holding government sessions, and in court rooms.

FISCAL EFFECT: According to the Senate Appropriations Committee, no new state costs, as all flags currently purchased by the Department of General Services (DGS) are made in the US. (General Fund)

Potential reimbursable mandate costs, but only to the extent local agencies are not currently purchasing US-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) 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.

COMMENTS: This bill requires state and local government agencies, when purchasing US or California flags, to buy those made in the US only. According to DGS, the state currently only purchases US-made flags. Those flags are produced by the California Prison Industry Authority (PIA).

This bill defines "local government agency" to include 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.

The author states, "It makes sense to have both our American and California flags manufactured by Americans here at home in the United States. California should not weaken our symbol of national pride by allowing governments to purchase American or California flags with taxpayer dollars from non-American sources."

The extent to which this bill would changes current purchasing practices is unknown. While the state currently purchases US-made flags, it is unclear how many local government agencies purchase flags that are not made in the US. According to the author's office, local governments that it surveyed already buy US-made flags.

In addition to PIA selling US-made flags, an online search for US and California flags showed several others vendors that sell US-made flags.

This bill, if implemented, could face legal challenges. Governor Brown has previously vetoed legislation that seeks to give preference to 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. The veto message 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.”

Preferences enacted by California and other states to purchase products made in the US or in respective states have met legal challenges that questioned the authority of states to enact such laws.

REGISTERED SUPPORT / OPPOSITION:

Support

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

None on file

Analysis Prepared by: Scott Herbstman / A. & A.R. / (916) 319-3600

 THIRD READING  

Bill No: SB 1012

Author:

:

Vote:

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:

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:
   1. In the courtrooms of all courts of the State.
   2. In all rooms where any court or any state, county, or municipal commission holds any sessions.
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:
   1. Each public building belonging to the State, county, or municipality.
   2. At the entrance and exit of every state park.
   3. At the entrance or upon the grounds of each campus of the University of California.
   4. 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.
   5. Upon or at every agricultural inspection station just inside California and located on every highway leading into California.
   6. 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 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 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: Fiscal Com.: Local:

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)

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: (Verified 5/3/16)

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: (Verified 5/3/16)

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:

5/4/16 15:04:15

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Ricardo Lara, Chair

2015 - 2016 Regular Session

SB 1012 (Nguyen) - Flags: purchase

This bill does not meet the criteria for referral to the Suspense File.

Bill Summary:

SB 1012 would require flags of the State of California and the Unites Sates purchased by the state and local agencies to be made in the United States (US).

Fiscal Impact:

• No new state costs, as all flags currently purchased by the Department of General Services (DGS) are made in the US. (General Fund)
  
• Potential reimbursable mandate costs, but only to the extent local agencies are not currently purchasing US-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) 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.

Background:

Existing law requires the Flag of the United States and the Flag of the State of California to be prominently displayed in the following locations: courtrooms; in all rooms where any court or state, county, or municipal commission holds any sessions; at each state, county, or municipal public building; at the entrance and exit of all state parks; on each campus of the University of California; at the administration building of every university, college, high school, and elementary school (both public and private) within the state; at every agricultural station; at every state highway maintenance station, as specified; and during any and all games and performances that take place in a coliseum, stadium, bowl, or other open air sites, and all race tracks where racing is being conducted.

Existing law requires the public officials charged with furnishing the place in which the flags of the United States and State of California must be displayed to provide for the acquisition of the flags and their installation, display, and maintenance.

Proposed Law:

SB 1012 would require any Flag of the United States or the Flag of the State of California purchased by the state or any local government agency on or after January 1, 2017 to be made in the United States.

Staff Comments:

DGS currently purchases all US and California flags flown at state facilities from the California Prison Industry Authority (PIA). The PIA manufactures those flags, and sold 2,080 flags to the state in 2014-15, noting that the average cost for a flag is $43 (with a range of costs for flags of varying sizes). Since all state-purchased flags are currently made in the US, there would be no direct state costs as a result of the bill.

SB 1012 would also require all US and California flags purchased by local agencies to be made in the US. This could be determined to be a new program or higher level of service by the Commission on State Mandates (Commission), should a local agency test claim arise out of this new requirement. Among other eligibility criteria, an affected local agency must incur at least $1,000 in costs as a result of a state-mandated requirement in order to file a claim. The Commission must also find that these are new costs, so a local agency must show that it was previously purchasing flags that were not made in the US, and that available US-made flags are more expensive, with cumulative net costs in a given year that exceed the $1,000 threshold. Staff assumes that few affected local agencies would incur costs that exceed this threshold in a given year. In the unlikely event that a successful mandate claim would is filed, state-reimbursable costs would be minor.

Staff notes that previously enacted California laws that provide a preference for American-made or California-made products have been struck down by the courts as unconstitutional. For example, the California Buy America Act, which requires public agencies to buy products made in the US, was found unconstitutional in Bethlehem Steel Corp. v. Board of Commissioners, 276 Cal.App.2d 221 (1969). In that case, the California Court of Appeal found that the statutes were an encroachment upon the federal government’s exclusive power over foreign affairs because they effectively placed an embargo on foreign products. If this bill is enacted, the courts may ultimately decide whether SB 1012’s requirements are also unconstitutional, which could result in additional state litigation costs.

-- END --

SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION

Senator Isadore Hall, III

Chair

2015 - 2016 Regular

Bill No: 1012 Hearing Date: 4/12/2016

SUBJECT: Flags: purchase

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 from articles, materials, or supplies that were grown, produced, and manufactured in the United States.

ANALYSIS:

Existing law:

1. Requires the Flag of the United States and the Flag of California to be prominently installed, displayed, and maintained in the following places:
   1. In the courtrooms of all courts of the State.
   2. In all rooms where any court or any state, county, or municipal commission holds any sessions.
2. Requires the Flag of the United States and the Flag of the State to be prominently displayed during business hours upon or in front of the buildings or grounds of or at each of the following places:
   1. Each public building belonging to the State, county, or municipality.
   2. At the entrance and exit of every state park.
   3. At the entrance or upon the grounds of each campus of the University of California.
   4. 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.
   5. Upon or at every agricultural inspection station just inside California and located on every highway leading into California.
   6. 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 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 from articles, materials, or supplies that were grown, produced and manufactured 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 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.

The CALPIA is a state-operated agency that provides productive work assignments for approximately 7,000 offenders annually in California’s adult correctional institutions. It produces over 1,400 goods and services including office furniture, clothing, food products, shoes, printing services, signs, binders, eye wear, gloves, license plates, and cell equipment.

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 government’s foreign power to conduct foreign trade policy.

Suggested Amendment. Last year, the Legislature passed and the Governor signed SB 633 (Hill, Chapter 238, Statutes of 2015) which clarified the definition “Made in U.S.A.” To make this bill consistent with current law, the committee may wish to amend the bill and delete the following language starting on page 2, line 1,“from articles, materials, or supplies that were grown, produced, and manufactured in the United States.”

Prior/Related Legislation

AB 312 (Jones, 2015) would provide 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 on the Assembly Floor)

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: Fiscal Com.: Local:

SUPPORT:

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:

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.