Bill Text: NJ S1811 | 2014-2015 | Regular Session | Introduced


Bill Title: Requires use of goods made in the United States for public contracts; requires disclosures by businesses that receive public contracts or development assistance.**

Status: (Enrolled) 2014-12-18 - Passed Senate (Passed Both Houses) (27-4) [S1811 Detail]

Download: New_Jersey-2014-S1811-Introduced.html

SENATE, No. 1811

STATE OF NEW JERSEY

216th LEGISLATURE

 

INTRODUCED MARCH 24, 2014

 


 

Sponsored by:

Senator  STEPHEN M. SWEENEY

District 3 (Cumberland, Gloucester and Salem)

 

 

 

 

SYNOPSIS

     Requires use of goods made in the United States for State contracts; requires businesses that receive State contracts or economic development assistance to disclose job exportation information.

 

CURRENT VERSION OF TEXT

     As introduced.

  


An Act concerning the use of goods made in the United States for State contracts, requiring the disclosure of certain information by certain businesses, and supplementing Title 52 of the Revised Statutes.

 

     Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

     1.    A State agency shall make provisions in the specifications for all contracts that include or necessitate the procurement of articles, materials, goods, equipment, or supplies, including contracts for public works, for which the State pays any part of the cost, that only products manufactured in the United States, be used to fulfill those contracts.  As used in this section, "State agency" shall have the meaning as set forth in section 1 of P.L.1991, c.507 (C.52:32-40), and "manufactured in the United States" means, in the case of assembled articles, material or supplies, components, subcomponents, parts, and equipment used in manufacturing, final assembly, processing, packaging, testing or other process that adds value, quality, or reliability occurs in the United States.

     Products manufactured in the United States shall be specified and purchased unless the State agency determines that any of the following apply:

     the products are not manufactured in the United States in reasonably available quantities; or

     the cost of buying products manufactured in the United States is unreasonable.  There is a presumption of unreasonableness for products manufactured in the United States that cost 25% above the fair market value for such products.

     Any waiver granted under this section shall be made public, reported to the relevant State agencies, and posted publicly for a 30-day comment period.  The agency granted such a waiver shall work with other State agencies to create a plan to ensure the domestic supply of the relevant products will be available in the future.

     Each contract awarded by a State agency on or after the effective date of P.L.   , c.     (C.    ) (pending before the Legislature as this bill), shall contain the contractor's certification that procured products provided pursuant to the contract or a subcontract shall be manufactured in the United States.

     Nothing in this section is intended to contravene any existing treaty, law, agreement, or regulation of the United States.  Contracts entered into in accordance with any treaty, law, agreement, or regulation of the United States shall not be in violation of this section to the extent of that accordance.  No preference shall be granted under this section if that preference would contravene any treaty, law, agreement, or regulation of the United States.

     If a contractor is awarded a contract that includes the use of a preference under this section and knowingly supplies procured products under that contract that are not manufactured in the United States, then:

     the contractor shall be barred from obtaining any State agency contract, including State college contracts, for a period of five years after the violation is discovered by the agency;

     the agency may void the contract; and

     the agency may recover damages in a civil action in an amount three times the value of the preference.

 

     2.    A State college shall make provisions in the specifications for all State college contracts that include or necessitate the procurement of articles, materials, goods, equipment, or supplies, including contracts for public works, for which the State college pays any part of the cost, that only such products manufactured in the United States, be used to fulfill those contracts.   As used in this section, "manufactured in the United States" means, in the case of assembled articles, material or supplies, components, subcomponents, parts, and equipment used in manufacturing, final assembly, processing, packaging, testing or other process that adds value, quality, or reliability occurs in the United States.  "State college" shall have the meaning as set forth in section 3 of P.L.1994, c.48 (C.18A:3B-3).

     Products manufactured in the United States shall be specified and purchased unless the State college determines that any of the following apply:

     the products are not manufactured in the United States in reasonably available quantities; or

     the cost of buying products manufactured in the United States is unreasonable.  There is a presumption of unreasonableness for products manufactured in the United States that cost 25% above the fair market value for such products.

     Any waiver granted under this section shall be made public, reported to the relevant State agencies, and posted publicly for a 30-day comment period.  The State college granted such a waiver shall work with other State agencies to create a plan to ensure the domestic supply of the relevant products will be available in the future.

     Each contract awarded by a State college on or after the effective date of P.L.  , c.    (C.    ) (pending before the Legislature as this bill) shall contain the contractor's certification that procured products provided pursuant to the contract or a subcontract shall be manufactured in the United States.

     Nothing in this section is intended to contravene any existing treaty, law, agreement, or regulation of the United States.  Contracts entered into in accordance with any treaty, law, agreement, or regulation of the United States shall not be in violation of this section to the extent of that accordance.  No preference shall be granted under this section if that preference would contravene any treaty, law, agreement, or regulation of the United States. 

     If a contractor is awarded a contract that includes the use of a preference under this section and knowingly supplies procured products under that contract that are not manufactured in the United States, then;

     the contractor shall be barred from obtaining any State college contract or State contract for a period of five years after the violation is discovered by the State college;

     the State college may void the contract; and

     the State college may recover damages in a civil action in an amount three times the value of the preference.

 

     3.    a.  The Legislature finds that there is widespread concern that State contracts and economic development assistance financed by the taxpayer's of the State are being given to companies that send work outside of the United States.  Business, labor, and government leaders recognize the need for an objective and thorough study of the extent to which State contracts and projects financed by taxpayers are being performed outside the United States, and the impact of this practice on the State's economy.

     Therefore, the Legislature finds it necessary to:

     require bidders for State contracts and applicants for economic development assistance to disclose where the contract or project will be performed;

     compile this data and make it available for public review and comment; and

     study the impact on the State's economy.

     b.    As used in this section:

     "development assistance" means any form of public assistance, including tax expenditures, made for the purpose of stimulating economic development of a corporation, industry, geographic jurisdiction, or any other sector of the State's economy, including, but not limited to, industrial development bonds, training grants, loans, loan guarantees, enterprise zones, empowerment zones, tax increment financing, fee waivers, land price subsidies, infrastructure whose principal beneficiary is a single business or defined group of businesses at the time it is built or improved, matching funds, tax abatements, tax credits, and tax discounts of every kind, including corporate franchise, personal income, sales and compensating use, raw materials, real property, job creation, individual investment, excise, utility, inventory, accelerated depreciation, and research and development tax credits and discounts.

     "Corporate parent" means any person, association, corporation, joint venture, partnership, or other entity that owns or controls 50 percent or more of a recipient corporation.

     "State" shall have the meaning as set forth in section 1 of P.L.1991, c.507 (C.52:32-40).

     c.     (1)  The State shall require each vendor submitting a bid or contract to provide services and all development assistance applicants to certify where the services covered by the bid, contract, or development assistance will be performed.

     (2)  The State shall require each vendor with a contract, each subcontractor, and each recipient of development assistance, in effect on the effective date of P.L.  , c.   (C.    ) (pending before the Legislature as this bill), notwithstanding any other requirements that have been imposed, to:

     certify where the services covered by the bid, contract, or development assistance are being performed; and

     disclose the name and headquarters location of its parent company.

     d.    The joint legislative task force, established under subsection e of this section, shall create and maintain a comprehensive database of contract awards and development assistance provided by all State agencies that includes, but is not limited to, the information included in this section.

     e.     The State shall conduct a study that includes, but need not be  limited to, an evaluation of the following:

     (1)   the extent to which current State contracts, and any subcontracts under such contracts, are being performed outside of the United States;

     (2)   the extent to which the performance of State contracts in whole or in part in other countries results in the creation or loss of family-wage or other jobs in the State;

     (3)   the extent to which State contracts being performed in whole or in part in other countries creates a need for adjustment assistance and retraining programs to ensure the State's business climate, its employers, and its workers remain competitive globally;

     (4)   the extent to which State contracts performed at locations outside the United States involve a risk of unauthorized use or disclosure of personal information, as well as a review of applicable State and federal laws regarding the privacy of personal information;

     (5)   the economic costs and benefits of awarding State contracts, and any subcontracts under such contracts, to New Jersey companies;

     (6)   the applicability of international trade agreements and federal law to State procurement policies;

     (7)   the extent to which legislative authority over State procurement is adequately protected, including the ability of State agencies to adequately supervise the performance of contracts when all or a portion of the work is performed in a country other than the United States; and

     (8)   the reason New Jersey businesses choose to locate operations outside the United States.

     f.     The study shall be conducted by a joint task force of the Senate and the General Assembly consisting of the following:  two members of the General Assembly to be appointed by the Speaker of the General Assembly; two members of the General Assembly to be appointed by the General Assembly Minority Leader; two members of the Senate to be appointed by the Senate Majority Leader; and two members of the Senate to be appointed by the Senate Minority Leader.

     g.    The joint task force shall consult with and be advised and monitored by an advisory committee consisting of seven members:  three members representing labor, appointed jointly by the President of the Senate and the Speaker of the General Assembly, from a list of names recommended by a statewide organization representing a cross-section of organized labor in the State; three members representing business, one of whom shall represent small business, appointed jointly by the President of the Senate and the Speaker of the General Assembly, from a list of names recommended by a statewide organization of employers representing a cross-section of employers of the State, and one member representing the public.

     h.    The information maintained in the comprehensive database outlined above shall be made available online to the Legislature and the public.

     i.     The findings and recommendations of the joint task force shall be reported in writing annually to the Legislature, with the first report to be submitted within 14 months following the effective date of this act, P.L.   , c.     (C.    ) (pending before the Legislature as this bill).  In addition to filing each report with the Legislature, the joint task force shall make each report available to the public on the Legislature's Internet homepage.

 

     4.    This act shall take effect immediately.

 

 

STATEMENT

 

     This bill would require that vendors receiving State contracts purchase goods manufactured in the United States to fulfill those contracts, when such products are available.  This bill also requires disclosure by certain businesses that receive State contracts or economic development assistance from the State of where the services covered by the bid, contract, or development assistance are being performed and establishes a joint task force to conduct a study of the impact of job exportation on the State economy.

     Currently, New Jersey requires the purchase of goods manufactured in the United States in fulfillment of public works contracts, local public contracts, State construction contracts, and local schools contracts.  This bill requires that all State contracts have provisions that require the use of goods manufactured in the United States to fulfill the contracts, including contracts negotiated by State colleges, which includes State universities.

     The bill includes a provision that allows for a State agency or State college to receive a waiver in the event that products manufactured in the United States are unavailable or too costly.  If a State agency or State college seeks a waiver, the information will be made public, reported to relevant State agencies, and there will be a 30-day comment period.  Any State agency or State college that receives a waiver must work with other State agencies to create a plan to ensure that there is a domestic supply in the future of the relevant products.

     The purpose of this waiver is to recognize that it is not always possible or practical to use products manufactured in the United States.  However, the 30-day public comment period is also included as a safeguard to prevent abuse of the waiver system.  If there are reasonably priced products available that are manufactured in the United States, the 30-day comment period will allow for American companies to come forward and provide products manufactured in the United States that may have been overlooked or ignored.  The State agency or State college will also be responsible for creating a plan to ensure the future supply of products manufactured in the United States so that the United States economy may be bolstered.

     This bill has a penalty provision that, in the event a contractor knowingly supplies products that are not manufactured in the United States, bars the contractor from obtaining State contracts for a period of five years, permits the State agency to void the contract, and provides a civil remedy for the State agency to recover damages.

     The disclosure requirements of the bill serve two primary purposes.  First, they provide for greater transparency for the State contracting process.  Second, they will allow the State to compile data so that accurate studies may be done to investigate the true impact that job exportation has on the State economy.

     A bi-partisan joint task force of members of the Legislature will be created by this bill to conduct the study into the economic effects of job exportation and how pervasive the problem is within the State, ultimately providing the State with a more informed way to approach the issue of job exportation.

     Lastly, this bill requires that the information compiled by the joint task force will be made available to the public and the Legislature.  Accordingly, both the public and the Legislature will be able to review the data and discuss ideas on how to counteract any problems associated with job exportation.

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