Texas lawmakers on Saturday passed Senate Bill 1289 [text, PDF] significantly expanding the scope of state laws requiring compliance with 23 CFR 635.410 [text, PDF], the federal “Buy America” provision that is already in effect for the Texas Department of Transportation and the Texas Water Development Board [official websites]. The state’s “Buy American” bill, similar to its federal counterpart, requires construction projects, which involve the use of iron or steel products, such as buildings, roads, or bridges, to use iron or steel that has been produced in the US. Entities subject to this requirement do not have to comply with it if the iron or steel products produced in the US are not produced in sufficient quantities, reasonably available, or of a satisfactory quality. However, a key difference between the federal law and the state’s bill lies in the exception concerning the cost of the project. Specifically, construction projects do not have to comply with the state’s requirement only if use of US iron or steel would increase the cost of the project by more than 20%, or if complying with the requirements would be inconsistent with the public interest. In contrast, the federal exception provides that the projects need not comply with its Buy America provision if the use of US iron or steel would increase the cost of the project by a mere one-tenth of 1% or $2,500, whichever would be greater. The bill is now awaiting signature from Governor Greg Abbott [official website].

There has been a general shift of governmental policies in the past few months with a protectionist or “America First” focus. In April President Trump signed an Executive Order [JURIST report] mandating the review of all US trade agreements to determine the cause of the US trade deficit. Specifically, the order is designed to determine whether the US is receiving the expected benefits from these deals. Saturday’s “Buy America” bill comes after President Trump issued a Executive Order [JURIST report] in April mandating executive agencies to monitor and enforce “Buy American” Laws. “Buy American” laws are defined as “laws that require, or provide a preference for, the purchase or acquisition of goods, products, or materials produced in the United States, including iron, steel, and manufactured goods.” In January, the United States withdrew [JURIST report] from the Trans-Pacific Partnership (TPP) [NYT backgrounder]. The rationale for withdrawing from the TPP was that it would harm domestic American labor.