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115th Congress     }                                {         Report
                        HOUSE OF REPRESENTATIVES
 2d Session        }                                {        115-1044

======================================================================



 
                         ALL-AMERICAN FLAG ACT

                                _______
                                

 November 27, 2018.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

   Mr. Gowdy, from the Committee on Oversight and Government Reform, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 3121]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Oversight and Government Reform, to whom 
was referred the bill (H.R. 3121) to require the purchase of 
domestically made flags of the United States of America for use 
by the Federal Government, having considered the same, report 
favorably thereon with an amendment and recommend that the bill 
as amended do pass.

                                CONTENTS

                                                                   Page
Summary and Purpose of Legislation...............................     2
Background and Need for Legislation..............................     2
Statement of Oversight Findings and Recommendations of the 
  Committee......................................................     3
Statement of General Performance Goals and Objectives............     3
Legislative History..............................................     3
Committee Consideration..........................................     4
Roll Call Votes..................................................     4
Explanation of Amendments........................................     6
Application of Law to the Legislative Branch.....................     6
Duplication of Federal Programs..................................     6
Disclosure of Directed Rule Makings..............................     6
Federal Advisory Committee Act...................................     6
Unfunded Mandates Statement......................................     7
Earmark Identification...........................................     7
Committee Estimate...............................................     7
New Budget Authority and Congressional Budget Office Cost 
  Estimate.......................................................     7
Section-by-Section Analysis......................................     8
Changes in Existing Law Made by the Bill, as Reported............     8
    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``All-American Flag Act''.

SEC. 2. REQUIREMENT FOR AGENCIES TO BUY DOMESTICALLY MADE UNITED STATES 
                    FLAGS.

  (a) Requirement for Agencies to Buy Domestically Made United States 
Flags.--
          (1) In general.--Chapter 63 of title 41, United States Code, 
        is amended by adding at the end the following new section:

``Sec. 6310. Requirement for agencies to buy domestically made United 
                    States flags

  ``(a) Requirement.--Except as provided in subsections (b) through 
(d), funds appropriated or otherwise available to an agency may not be 
used for the procurement of any flag of the United States, unless such 
flag has been 100 percent manufactured in the United States from 
articles, materials, or supplies that have been grown or 100 percent 
produced or manufactured in the United States.
  ``(b) Availability Exception.--Subsection (a) does not apply to the 
extent that the head of the agency concerned determines that 
satisfactory quality and sufficient quantity of a flag described in 
such subsection cannot be procured as and when needed at United States 
market prices.
  ``(c) Exception for Certain Procurements.--Subsection (a) does not 
apply to the following:
          ``(1) Procurements by vessels in foreign waters.
          ``(2) Procurements for resale purposes in any military 
        commissary, military exchange, gift shop, or nonappropriated 
        fund instrumentality operated by an agency.
          ``(3) Procurements for amounts less than the simplified 
        acquisition threshold.
  ``(d) Presidential Waiver.--
          ``(1) In general.--The President may waive the requirement in 
        subsection (a) if the President determines a waiver is 
        necessary to comply with any trade agreement to which the 
        United States is a party.
          ``(2) Notice of waiver.--Not later than 30 days after 
        granting a waiver under paragraph (1), the President shall 
        publish a notice of the waiver in the Federal Register.
  ``(e) Definitions.--In this section:
          ``(1) Agency.--The term `agency' has the meaning given the 
        term `executive agency' in section 102 of title 40.
          ``(2) Simplified acquisition threshold.--The term `simplified 
        acquisition threshold' has the meaning given that term in 
        section 134.''.
          (2) Clerical amendment.--The table of sections at the 
        beginning of such chapter is amended by adding at the end the 
        following new item:

``6310. Requirement for agencies to buy domestically made United States 
flags.''.

  (b) Applicability.--Section 6310 of title 41, United States Code, as 
added by subsection (a)(1), shall apply with respect to any contract 
entered into on or after the date that is 180 days after the date of 
the enactment of this Act.

                   Summary and Purpose of Legislation

    H.R. 3121, the All-American Flag Act, requires all 
executive agencies to buy American flags made entirely in the 
United States from materials grown, produced, or manufactured 
entirely in the United States. The bill contains a number of 
exceptions to this general requirement and a waiver provision 
if needed to comply with U.S. trade agreements.

                  Background and Need for Legislation

    H.R. 3121 is a product of thorough examination of the Buy 
American Act. Currently, flag purchases by civilian executive 
agencies are generally subject to the Buy American Act and the 
regulations implementing that Act, which generally provide the 
cost of components mined, produced, or manufactured in the 
United States must exceed 50 percent of the cost of all 
components.\1\ However, purchases by the Department of Defense 
of certain products, including fabrics, are subject to 
additional restrictions contained in law, commonly known as the 
Berry Amendment.\2\ Items covered by the Berry Amendment must 
be made from materials that are 100 percent domestic in origin. 
The Department of Defense considers flags to be covered by the 
Berry Amendment.\3\
---------------------------------------------------------------------------
    \1\41 U.S.C. Sec. Sec. 8301-8305; 48 C.F.R. 25.101.
    \2\10 U.S.C. Sec. 2533a.
    \3\See, 48 C.F.R. 252.226(1)(b) (implementing appropriations riders 
requiring that U.S. flags be treated as covered items under the Berry 
Amendment). See, e.g., Consolidated Appropriations Act, 2016, Pub. L. 
No. 114-113, div. C, title VIII, Sec. 8110, 129 Stat. 2377 (Dec. 18, 
2015).
---------------------------------------------------------------------------
    The All-American Flag Act provides a general, uniform rule 
requiring all executive agencies to acquire U.S. flags that are 
100 percent American made. Specifically, the bill requires that 
U.S. flags acquired by executive agencies be manufactured in 
the United States from materials that are 100 percent grown, 
produced, or manufactured in the United States.
    The bill allows for an exception to the 100 percent rule in 
cases where flags of satisfactory quality and complying with 
the requirements of the bill cannot be procured in sufficient 
quantities at U.S. market prices. Finally, the bill provides 
authority for the President to waive the 100 percent 
requirement if needed to comply with any trade agreement to 
which the United States is a party.

  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(1) of rule XIII and clause 
(2)(b)(1) of rule X of the Rules of the House of 
Representatives, the Committee's oversight findings and 
recommendations are reflected in the previous section.

         Statement of General Performance Goals and Objectives

    In accordance with clause 3(c)(4) of rule XIII of the Rules 
of the House of Representatives, the Committee's performance 
goal or objective of this bill is to require the purchase of 
domestically made flags of the United States of America for use 
by the Federal Government.

                          Legislative History

    On June 29, 2017, Representative Cheri Bustos (D-IL) 
introduced H.R. 3121, the All-American Flag Act, with 34 co-
sponsors. H.R. 3121 was referred to the Committee on Oversight 
and Government Reform. The Committee considered H.R. 3121 at a 
business meeting on November 2, 2017, and ordered the bill 
favorably reported to the House, as amended, by voice vote.
    In the 114th Congress, Representative Bustos introduced 
H.R. 916, a similar bill to H.R. 3121, on February 12, 2015, 
with 88 co-sponsors. H.R. 916 was referred to the Committee on 
Oversight and Government Reform.
    In the 113th Congress, Senator Sherrod Brown (D-OH) 
introduced S. 1214, a similar bill to H.R. 3121, on June 24, 
2013, with Senator John D. Rockefeller, IV (D-WV). S. 1214 was 
referred to the Senate Committee on Homeland Security and 
Governmental Affairs. The Committee considered S. 1214 at a 
business meeting on June 25, 2014, and ordered the bill 
reported favorably by voice vote. On September 16, 2014, the 
Senate passed the bill by unanimous consent.

                        Committee Consideration

    On November 2, 2017, the Committee met in open session and, 
with a quorum being present, ordered the bill favorably 
reported to the House, as amended, by voice vote.

                            Roll Call Votes

    There was one roll call vote during consideration of H.R. 
3121:





[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]





                       Explanation of Amendments

    On November 2, 2017, the Committee met in open session with 
a quorum being present. During Committee consideration of the 
bill, Representative Steve Russell (R-OK), offered an amendment 
in the nature of a substitute to align the bill with current 
law as applicable to the Department of Defense. The amendment 
substituted new exception provisions, consistent with those in 
the Berry Amendment. Specifically, it provided for an exception 
to the requirement to purchase 100 percent domestically made 
flags to the extent that the head of an agency determines that 
a satisfactory quality and sufficient quantity of flags meeting 
the requirement cannot be procured as and when needed at U.S. 
market prices. The amendment further provided that the 100 
percent requirement does not apply to procurements by vessels 
in foreign water, procurements for resale, and procurements for 
amounts less than the simplified acquisition threshold. The 
amendment makes permanent the practice of applying the Berry 
Amendment requirement and exceptions to the purchase of U.S. 
flags by the Department of Defense, and extends a similar 
requirement and similar exceptions to all civilian executive 
agencies. The Russell amendment was adopted by a roll call vote 
of 35 to 1.

              Application of Law to the Legislative Branch

    Section 102(b)(3) of Public Law 104-1 requires a 
description of the application of this bill to the legislative 
branch where the bill relates to the terms and conditions of 
employment or access to public services and accommodations. 
This bill to require the purchase of domestically made flags of 
the United States of America for use by the Federal Government 
relates only to procurement of flags of the United States. As 
such, this bill does not relate to employment or access to 
public services and accommodations.

                    Duplication of Federal Programs

    In accordance with clause 2(c)(5) of rule XIII no provision 
of this bill establishes or reauthorizes a program of the 
Federal Government known to be duplicative of another Federal 
program, a program that was included in any report from the 
Government Accountability Office to Congress pursuant to 
section 21 of Public Law 111-139, or a program related to a 
program identified in the most recent Catalog of Federal 
Domestic Assistance.

                  Disclosure of Directed Rule Makings

    This bill does not direct the completion of any specific 
rule makings within the meaning of section 551 of title 5, 
United States Code.

                     Federal Advisory Committee Act

    The Committee finds that the legislation does not establish 
or authorize the establishment of an advisory committee within 
the definition of Section 5(b) of the appendix to title 5, 
United States Code.

                      Unfunded Mandates Statement

    Pursuant to section 423 of the Congressional Budget Act of 
1974 the Committee has included a letter received from the 
Congressional Budget Office below.

                         Earmark Identification

    This bill does not include any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of rule XXI of the House of Representatives.

                           Committee Estimate

    Pursuant to clause 3(d)(2)(B) of rule XIII of the Rules of 
the House of Representatives, the Committee includes below a 
cost estimate of the bill prepared by the Director of the 
Congressional Budget Office under section 402 of the 
Congressional Budget Act of 1974.

   New Budget Authority and Congressional Budget Office Cost Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the House of 
Representatives, the cost estimate prepared by the 
Congressional Budget Office and submitted pursuant to section 
402 of the Congressional Budget Act of 1974 is as follows:

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, December 6, 2017.
Hon. Trey Gowdy,
Chairman, Committee on Oversight and Government Reform,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3121, the All-
American Flag Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Matthew 
Pickford.
            Sincerely,
                                                Keith Hall,
                                                          Director.
    Enclosure.

H.R. 3121--All-American Flag Act

    H.R. 3121 would amend federal law to require that all U.S. 
flags acquired by the federal government be manufactured in the 
United States from materials grown, produced, or manufactured 
in the United States. H.R. 3121 also would provide exceptions 
to the requirement.
    Using information from the General Services Administration 
and flag vendors, CBO expects that enacting H.R. 3121 would not 
lead to a significant change in the costs of flags acquired by 
the government because some current vendors already meet the 
requirements of the bill and because the legislation includes 
general exemptions from the requirement.
    Enacting H.R. 3121 could affect direct spending by agencies 
that are not funded through annual appropriations; therefore, 
pay-as-you-go procedures apply. CBO estimates, however, that 
any net increase in spending by those agencies would be 
negligible. Enacting the bill would not affect revenues.
    CBO estimates that enacting H.R. 3121 would not increase 
net direct spending or on-budget deficits in any of the four 
consecutive 10-year periods beginning in 2028.
    H.R. 3121 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act.
    The CBO staff contact for this estimate is Matthew 
Pickford. The estimate was approved by H. Samuel Papenfuss, 
Deputy Assistant Director for Budget Analysis.

                      Section-by-Section Analysis


Section 1. Short title

    The short title is the ``All-American Flag Act.''

Sec. 2. Requirement for agencies to buy domestically made united states 
        flags

    Section 2 requires agencies to buy only domestically-made 
United States flags and adds a new section 6310 at the end of 
Chapter 63 of title 41, United States Code. The requirements of 
this bill only apply to contracts entered into on or after 180 
days after the date of enactment.
    The new section 6310 prohibits agencies from using funds 
appropriated or otherwise available for the procurement of any 
flag of the United States, unless the flag has been 100 percent 
manufactured in the United States from articles, materials, or 
supplies that have been grown, or 100 percent produced and/or 
manufactured, in the United States. This requirement does not 
apply in cases when the head of the agency determines that U.S. 
flags of satisfactory quality and sufficient quantity that 
satisfy the requirement described in subsection (a) cannot be 
procured as and when needed at U.S. market prices. This section 
also establishes exceptions for procurements by vessels in 
foreign waters, for procurements for resale purposes, and for 
procurements for amounts less than the simplified acquisition 
threshold.
    The section further establishes authority for a 
Presidential waiver. The President may waive the requirement if 
the President determines that a waiver is necessary to comply 
with any trade agreement to which the United States is a party. 
The President is required to publish notice of the waiver in 
the Federal Register not later than 30 days after granting it.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italic and existing law in which no change is 
proposed is shown in roman):

                      TITLE 41, UNITED STATES CODE



           *       *       *       *       *       *       *
SUBTITLE II--OTHER ADVERTISING AND CONTRACT PROVISIONS

           *       *       *       *       *       *       *


                CHAPTER 63--GENERAL CONTRACT PROVISIONS

Sec
6301. Authorization requirement.
     * * * * * * *
6310. Requirement for agencies to buy domestically made United States 
          flags.
     * * * * * * *

Sec. 6310. Requirement for agencies to buy domestically made United 
                    States flags

  (a) Requirement.--Except as provided in subsections (b) 
through (d), funds appropriated or otherwise available to an 
agency may not be used for the procurement of any flag of the 
United States, unless such flag has been 100 percent 
manufactured in the United States from articles, materials, or 
supplies that have been grown or 100 percent produced or 
manufactured in the United States.
  (b) Availability Exception.--Subsection (a) does not apply to 
the extent that the head of the agency concerned determines 
that satisfactory quality and sufficient quantity of a flag 
described in such subsection cannot be procured as and when 
needed at United States market prices.
  (c) Exception for Certain Procurements.--Subsection (a) does 
not apply to the following:
          (1) Procurements by vessels in foreign waters.
          (2) Procurements for resale purposes in any military 
        commissary, military exchange, gift shop, or 
        nonappropriated fund instrumentality operated by an 
        agency.
          (3) Procurements for amounts less than the simplified 
        acquisition threshold.
  (d) Presidential Waiver.--
          (1) In general.--The President may waive the 
        requirement in subsection (a) if the President 
        determines a waiver is necessary to comply with any 
        trade agreement to which the United States is a party.
          (2) Notice of waiver.--Not later than 30 days after 
        granting a waiver under paragraph (1), the President 
        shall publish a notice of the waiver in the Federal 
        Register.
  (e) Definitions.--In this section:
          (1) Agency.--The term ``agency'' has the meaning 
        given the term ``executive agency'' in section 102 of 
        title 40.
          (2) Simplified acquisition threshold.--The term 
        ``simplified acquisition threshold'' has the meaning 
        given that term in section 134.

           *       *       *       *       *       *       *


                                  [all]