Texas House passes measure to increase “Buy America” provisions

The Texas House on Monday gave tentative approval to a measure that would would require large state projects — such as buildings, roads and bridges — to purchase iron and steel from an American supplier if the cost doesn’t exceed 20 percent more than the price of cheaper, foreign imports.

Senate Bill 1289 by state Sen. Brandon Creighton, R-Conroe, would increase “Buy America” provisions already in effect for the Texas Department of Transportation and the Texas Water Development Board to all state agencies. The bill also says that if American suppliers aren't prepared to supply a project or there is a compelling state interest, any country's iron and steel can be used.

“The steel companies in my district over the years have struggled at times. They used to employ thousands of people, and now it’s hundreds,” the bill’s House sponsor, state Rep. Chris Paddie, R-Marshall, told The Texas Tribune. “Foreign steel from China and Turkey are undercutting the market.”

Several members from both sides of the aisle — including state Reps. Eddie Lucio III, D-Brownsville, Ron Simmons, R-Carrollton; Larry Phillips, R-Sherman; and Wayne Faircloth, R-Galveston, among others — pledged their support to Paddie’s measure.

The bill passed in a 114-29 vote. It needs final approval from the House before it can be sent to the governor's desk.

“Should we have to apologize for American exceptionalism? I don’t think so,” Faircloth said.

The lower chamber’s approval of SB 1289 comes amid President Donald Trump’s “Buy American, Hire American” executive order, which Paddie said may help garner momentum for his bill. Last session, a similar measure was filed by state Rep. Yvonne Davis, D-Dallas, but died in a House committee.

“This is one of the few times I agree with President Trump. He has made an emphasis on American jobs,” said state Rep. Ron Reynolds, D-Missouri City.

Supporters of the measure said the bill will encourage reinvestment in the U.S. and revive Texas manufacturing. Stan Baucum, the director of structural and merchant products at Gerdau, the largest producer of long steel in the Americas, told the Tribune he thought the use of American-made products would help rebuild the state’s iron and steel sector.

“Taxpayer dollars should not benefit offshore producers who heavily subsidize their industries and dump their products on Texas shores,” Baucum said. “Instead, this commonsense bill will help support highly skilled, high paying jobs in the Texas economy.”

The version of the bill debated on the House floor Thursday removed an amendment by state Sen. Charles Perry, R-Lubbock, that would remove “Buy America” language from the Texas Water Code, meaning water infrastructure projects wouldn’t be required to use American-made iron and steel. State Rep. Lyle Larson, R-San Antonio, attempted to tack the amendment back on Thursday. His amendment failed in a 65-76 vote.

“I’m for Buy America, but if we know this will impede water projects we need to try to keep this program out of this bill,” Larson said.

Other opponents of SB 1289 argue that the bill's 20 percent provision could drive up costs for entire projects. Paddie said Thursday, however, that this was not the case. He said his measure includes a “public interest” exception that allows agencies to accept iron and steel products made outside of the country if they felt as though the price for their project would be significantly increased.

“There’s no quantitative research that shows this ‘Buy America’ provision actually increases costs for projects,” Paddie said.

Read related Tribune coverage:

• The Senate voted 22-8 for a proposal that would expand a "Buy American" provision already in effect for the Texas Department of Transportation and the Texas Water Development Board to all state agencies.