FISCAL NOTE

Date Requested: January 14, 2016
Time Requested: 10:55 AM
Agency: Administration
CBD Number: Version: Bill Number: Resolution Number:
1089 Introduced SB91
CBD Subject: Labor


FUND(S):

0210

Sources of Revenue:

General Fund

Legislation creates:

Neither Program nor Fund



Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


There is no known national entity or organization that provides a means for certification of American-made products that the Purchasing Division would be able to use for evaluation of products to meet the standards. Therefore, the Division of Purchasing would need to develop an internal process for determination and evaluation of these products that meet the standards, at great time and cost expense. The Purchasing Division is an expert on state procurement process and current law, rules and procedure relating to the purchase of commodities and services. The expertise of components and assembly of all supplies, materials, equipment, articles and the items that could possibly be procured by state agencies is not present in the Purchasing Division or in any state agency. In essence, West Virginia and particularly the Purchasing Division would be required to become a certifying authority for products manufactured around the world. Potential costs are unknown, but likely significant, and would require determination of how American-made certification could be hired or contracted which would involve salaries, administrative costs, training, etc. Depending on volume, the number of personnel necessary could be significant. Potential unintended consequences of this law could prohibit the state from buying certain products that not meet the restrictions of the law, such as cellular telephones and other technology products. Multiple "soft" costs which are unknown, but could be significant, include, but are not limited to delays in work and services; protests and other litigation involving the percent of American-made and the certification process.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2016
Increase/Decrease
(use"-")
2017
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 0
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 0 0


Explanation of above estimates (including long-range effect):


The potential cost is unknown, but likely significant. Without knowing costs, the Purchasing Division cannot speculate exact expenses in terms of short- or long-term effects.



Memorandum


Language in the legislation requires the determinations to be made without proper resources to perform these analyses. The components and assembly of many types of supplies, materials, equipment, articles and items that would be difficult to determine that the substantial portion of the total bid is American-made, such as technology (computers, cellular phones, etc.) furniture and automobiles. By placing this requirement in article 3 of chapter 5A of the code, entities exempt from the requirements of article 3 would not be impacted or be required to purchase American-made materials, supplies, equipment, articles or items. There are more than 35 exempt entities, such as the Higher Education Policy Commission, road construction projects by the Division of Highways, the School Building Authority, and the Water Development Authority.



    Person submitting Fiscal Note: Jennelle H. Jones
    Email Address: jennelle.h.jones@wv.gov