Bill Summary for Bill Number HB09-1328

Date: 04/07/2009

Final
BILL SUMMARY for HB09-1328

HOUSE COMMITTEE ON STATE, VETERANS, & MILITARY AFFAIRS

Votes: View-->	Action Taken:
Moved prepared amendment L.001 (Attachment A). Th	Pass Without Objection

01:36 PM

The committee was called to order. A quorum was present.

01:37 PM -- House Bill 09-1328

Representative Pace, prime sponsor, presented House Bill 09-1328, concerning a preference for the purchase of United States steel products by governmental bodies. Representative Pace provided background on his reasons for sponsoring the legislation, and discussed other legislation that creates preferences for state purchasing of certain products. Representative Pace explained the effect of the bill, and also explained the effect of prepared amendment L.001 (Attachment A). Representative Pace responded to questions regarding the selection of 15 percent above the cost of foreign steel as the threshold for the preference created by the bill, and the potential for reducing this threshold.

01:47 PM

Discussion continued regarding the preference threshold in the bill. Representative Pace responded to questions regarding "buy American" provisions in the federal stimulus package, and buy American laws in other states. Representative Pace responded to further questions regarding the bill's treatment of steel produced by companies that have a presence both domestically and in another country. Discussion ensued regarding other provisions in state law requiring domestic purchases by government entities.

01:57 PM

Discussion ensued regarding the administrative burdens of determining the source of products used by state entities, and the ability of state agencies to opt out of the domestic steel purchase requirement. Discussion followed regarding the impact of instituting a domestic steel preference on state contracting costs, and the potential reduction of state contracting as a result. Representative Pace responded to questions regarding the ownership of Rocky Mountain Steel in Pueblo. Discussion returned to the ability to source the origins of steel products, and where the profits of foreign-owned steel companies ultimately end up.

02:08 PM

The following persons testified regarding House Bill 09-1328:

02:08 PM -- Mr. David Davia, representing the Colorado Association of Mechanical and Plumbing Contractors, testified in opposition to the bill. Discussion ensued regarding the effect of amendment L.001. Mr. Davia discussed the burdens placed on private contractors by the bill, and provided examples of difficulties that may be experienced in sourcing steel products. Mr. Davia mentioned that the Sheet Metal Contractors Association is also opposed to the bill. Discussion followed regarding the need to source steel parts and subcomponents under the bill, and the scope of the bill. Mr. Davia responded to questions regarding the cost percentage associated with steel for the average construction project.

02:20 PM

Discussion ensued regarding the impact of House Bill 09-1328 on the construction bidding process. Discussion returned to the need to source steel parts and subcomponents under the bill. Mr. Davia explained the current bidding climate, and pressures in the construction industry to lower bid prices.

02:27 PM -- Mr. Dennis Jakubowski, representing the Associated General Contractors of Colorado, testified in opposition to House Bill 09-1328. Mr. Jakubowski compared prices for steel produced by the United States and other countries, and discussed the difficulties of sourcing certain steel products and subcomponents.

02:33 PM -- Mr. Jonathan Rees, representing himself, testified in favor of the bill. Mr. Rees, a history professor, provided historical background on the importance of steel to the economy, and discussed the circumstances that have led to the decline of the domestic steel industry. Mr. Rees then discussed the need for the domestic steel industry to receive advantages in order to compete in a world market in which the industries of developing countries are already unfairly advantaged. Mr. Rees responded to questions regarding the ability to source certain steel components. Discussion ensued regarding the world steel market.

02:43 PM

Discussion continued regarding the sourcing of steel products.

02:44 PM -- Mr. Phil Hayes, representing the American Federation of Labor-Congress of Industrial Organizations, testified in favor of the bill. Mr. Hayes discussed the impact of the domestic steel industry on the economy, and the loss of manufacturing jobs in the United States. Mr. Hayes also discussed domestic steel purchasing preferences in other states, and buy American provisions in the federal stimulus package. Mr. Hayes then read some quotes from steel industry groups that supported the stimulus package provision, and discussed the need for governments at all levels to source products in order to meet the requirements of the stimulus legislation. Mr. Hayes discussed the reasons why the domestic steel industry is at a competitive disadvantage with the industries of other nations on the world market. Mr. Hayes discussed the merits of the bill.

02:54 PM

Discussion ensued regarding the status of the buy American provision in the federal stimulus bill. Representative Lambert discussed an editorial from the U.S. Chamber Magazine, copies of which were distributed to the committee (Attachment B). Mr. Hayes responded to concerns raised by Representative Lambert. Discussion followed regarding the number of jobs that would be preserved by the passage of House Bill 09-1328.

03:01 PM -- Mr. Randy Padilla, representing United Steel Workers Local 2102, testified in favor of House Bill 09-1328. Mr. Padilla discussed the need to preserve jobs in the United States, inequalities in the world market for steel, and the decline of manufacturing jobs and the skilled trades. Mr. Padilla responded to questions regarding the customers that patronize the steel manufacturers in Pueblo, and the number of steel industry employees in Pueblo.

03:11 PM

Mr. Padilla responded to questions regarding the number of steel industry employees in Pueblo that have been laid off recently, and Pueblo's competitors. Discussion ensued regarding the potential for the bill to drive down demand for domestic steel, and the ability of the bill to protect jobs considering the extent of domestic competition.

03:22 PM -- Mr. Allen Gallegos, representing United Steel Workers Local 2102, testified in favor of the bill. Mr. Gallegos discussed the importance of using Colorado and domestic steel for Colorado public works projects. Mr. Gallegos explained the steel manufacturing process, and the types of industries that use the steel manufactured in Pueblo. Mr. Gallegos responded to questions regarding the use of Pueblo steel for road projects.

03:29 PM

Discussion ensued regarding the need to further address certain questions before taking final action on House Bill 09-1328. Discussion followed regarding the impact of amendment L.001 on the use of secondary steel products for state projects. Discussion turned to the potential for trade retaliation on world markets as a result of enactment of trade-restrictive laws.


BILL:	HB09-1328
TIME:	03:30:23 PM
MOVED:	Massey
MOTION:	Moved prepared amendment L.001 (Attachment A). The motion passed without objection.
SECONDED:	Miklosi
		VOTE
	Casso
	Court
	Hullinghorst
	Lambert
	Massey
	McCann	Excused
	Miklosi
	Murray
	Nikkel
	Labuda	Excused
	Todd

Not Final YES: 0 NO: 0 EXC: 2 ABS: 0 FINAL ACTION: Pass Without Objection

03:34 PM

The bill was laid over to the committee's April 16th meeting.