[Senate Report 113-236]
[From the U.S. Government Publishing Office]


113th Congress 
 2d Session                      SENATE                          Report
                                                                113-236
_______________________________________________________________________

                                     

                                                       Calendar No. 504

 
                         ALL-AMERICAN FLAG ACT

                               __________

                              R E P O R T

                                 of the

                   COMMITTEE ON HOMELAND SECURITY AND

                          GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                              to accompany

                                S. 1214

TO REQUIRE THE PURCHASE OF DOMESTICALLY MADE FLAGS OF THE UNITED STATES 
              OF AMERICA FOR USE BY THE FEDERAL GOVERNMENT




                 July 31, 2014.--Ordered to be printed
        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                  THOMAS R. CARPER, Delaware, Chairman
CARL LEVIN, Michigan                 TOM COBURN, Oklahoma
MARK L. PRYOR, Arkansas              JOHN McCAIN, Arizona
MARY L. LANDRIEU, Louisiana          RON JOHNSON, Wisconsin
CLAIRE McCASKILL, Missouri           ROB PORTMAN, Ohio
JON TESTER, Montana                  RAND PAUL, Kentucky
MARK BEGICH, Alaska                  MICHAEL B. ENZI, Wyoming
TAMMY BALDWIN, Wisconsin             KELLY AYOTTE, New Hampshire
HEIDI HEITKAMP, North Dakota

                  Gabrielle A. Batkin, Staff Director
               John P. Kilvington, Deputy Staff Director
                    Mary Beth Schultz, Chief Counsel
         Troy H. Cribb, Chief Counsel for Governmental Affairs
                 Abigail A. Shenkle, Research Assistant
               Keith B. Ashdown, Minority Staff Director
         Christopher J. Barkley, Minority Deputy Staff Director
               Andrew C. Dockham, Minority Chief Counsel
                 David Z. Demirbilek, Minority Counsel
                     Laura W. Kilbride, Chief Clerk
                                                       Calendar No. 504
113th Congress
                                 SENATE
                                                                 Report
 2d Session                                                     113-236

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




                         ALL-AMERICAN FLAG ACT

                                _______
                                

                 July 31, 2014.--Ordered to be printed

                                _______
                                

 Mr. Carper, from the Committee on Homeland Security and Governmental 
                    Affairs, submitted the following

                              R E P O R T

                         [To accompany S. 1214]

    The Committee on Homeland Security and Governmental 
Affairs, to which was referred the bill (S. 1214), to require 
the purchase of domestically made flags of the United States of 
America for use by the Federal Government, reports favorably 
thereon without amendment and recommends that the bill do pass.

                                CONTENTS

                                                                   Page
  I. Purpose and Summary..............................................1
 II. Background.......................................................2
III. Legislative History..............................................2
 IV. Section-by-Section Analysis of the Bill, as Reported.............3
  V. Estimated Cost of Legislation....................................4
 VI. Evaluation of Regulatory Impact..................................4
VII. Changes in Existing Law..........................................5

                         I. PURPOSE AND SUMMARY

    The All-American Flag Act (S. 1214) requires that flags of 
the United States of America purchased for use by the federal 
government be 100 percent made and manufactured in the United 
States, from articles, materials or supplies 100 percent of 
which are grown, produced, or manufactured in the United 
States. The bill allows for waivers of this requirement in case 
of ``unreasonable costs or delays'' or adverse affects on a 
United States company. It also requires that the Act be applied 
in a manner consistent with U.S. obligations under 
international agreements.

              II. BACKGROUND AND THE NEED FOR LEGISLATION

    Currently, flag purchases by federal agencies are generally 
subject to the Buy American Act\1\ and the regulations 
implementing that Act, which generally provide that the cost of 
components mined, produced, or manufactured in the United 
States must exceed 50% of the cost of all components.\2\ The 
Buy American Act regulations contain a number of exceptions to 
that rule. For example, the regulations permit the purchase of 
foreign products when the costs of domestic ones are 
unreasonable, and the rule does not apply to certain purchases 
(e.g., small-value purchases and purchases of goods that will 
be used outside the United States).\3\
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    \1\41 U.S.C. Sec. Sec. 8301-8305.
    \2\48 C.F.R. Sec. 25.003.
    \3\48 C.F.R. Sec. 25.103 and 48 C.F.R. Sec. 25.202.
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    Purchases by the Department of Defense of certain products, 
including fabrics, are subject to additional source 
restrictions under a law originally passed in 1941 and known as 
the Berry Amendment.\4\ Items covered by the Berry Amendment 
must be 100% domestic in origin.\5\ Like the Buy American Act, 
the Berry Amendment allows for a number of exceptions to the 
general rule, including when a satisfactory quality and 
sufficient quantity of an item cannot be procured when needed 
at United States market prices.\6\
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    \4\10 U.S.C. Sec. 2533a.
    \5\Fabrics are covered items under the Berry Amendment under 10 
U.S.C. 2533a(b)(C) and therefore the Department of Defense has applied 
the Berry Amendment to fabric used in flags. Also, a provision of the 
Consolidated Appropriations Act, 2014 provides that Department of 
Defense purchases of U.S. flags with funds provided by the Act must 
comply with the Berry Amendment. (Section 8123, P.L. 113-76.)
    \6\10 U.S.C. Sec. 2533a(c) and 48 C.F.R. Sec. 225.7002-2(b).
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    The All-American Flag Act would provide a new, simple 
government-wide rule for United States of America flags so that 
this symbol, when used by the federal government, would be 
authentically American. Specifically, the bill would require 
that United States of America flags acquired for use by the 
federal government be 100 percent manufactured in the United 
States. Additionally, the articles, materials, or supplies 
contained in the flags must be 100 percent grown, produced, or 
manufactured in the United States.
    The bill would allow for a limited waiver of the 100 
percent rule if the head of an agency determines, on a case-by-
case basis, that the application of the rule would cause 
unreasonable costs or delays, or if application of the rule 
would adversely affect a United States company.
    The bill also provides that the rule will be applied in a 
manner consistent with United States obligations under 
international agreements. This will ensure that the United 
States upholds commitments in specific trade agreements that 
relate to the treatment of products of U.S. trading 
partners.\7\
---------------------------------------------------------------------------
    \7\The Trade Agreements Act (19 U.S.C. 2501 et. seq.) also allows 
for waivers of the Buy American Act to ensure consistency of 
procurements with international trade obligations. See 48 C.F.R. 
Sec. 25.402.
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                        III. LEGISLATIVE HISTORY

    Senator Brown introduced S. 1214, the All-American Flag 
Act, on June 24, 2013. Senators Rockefeller and Collins 
cosponsored the bill. The bill was referred to the Senate 
Committee on Homeland Security and Governmental Affairs. The 
Committee considered the bill at a business meeting on June 25, 
2014.
    The committee ordered the bill reported favorably by voice 
vote on June 25, 2014. Senators present for the vote were 
Senators Carper, Levin, McCaskill, Tester, Heitkamp, Coburn, 
McCain, Johnson, and Portman.

                    IV. SECTION-BY-SECTION ANALYSIS

Section 1: Short title

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

Section 2: Requirement for purchase of domestically made U.S. flags for 
        use by Federal Government

            Subsection 2(a): In general
    This subsection requires that only U.S. flags that are 100 
percent manufactured in the United States, from articles, 
materials, or supplies 100 percent of which are grown, 
produced, or manufactured in the U.S., may be acquired for use 
by the Federal Government.
            Subsection 2(b): Waiver
    This subsection sets out a waiver for the requirement to 
purchase 100 percent American-made U.S. flags as set forth in 
subsection (a). Subsection 2(b)(1) authorizes the head of an 
executive agency to waive the requirement in the case that the 
application of the limitation would cause unreasonable costs or 
delays to be incurred, and subsection 2(b)(2) authorizes the 
head of an executive agency to waive the requirement in the 
case that application of the limitation would adversely affect 
a United States company.
            Subsection 2(c): Amendment of Federal Acquisition 
                    Regulation
    This subsection requires the Federal Acquisition Regulatory 
Council to amend the Federal Acquisition Regulation to 
implement this section within 180 days of enactment of this 
Act.
            Subsection 2(d): Definitions
    This subsection defines the term ``executive agency'' as 
having the meaning given that term in section 133 of title 41, 
United States Code, which includes the major departments of the 
executive branch, the military departments, other government 
agencies (other than the United States Postal Service or the 
Postal Regulatory Commission) and wholly owned government 
corporations; and the term ``Federal Acquisition Regulation'' 
as having the meaning given the term in section 106 of title 
41, United States Code, which refers to the government-wide 
body of procurement regulations that are issued and maintained 
jointly by the Administrator of the General Services 
Administration, the Secretary of Defense, the Administrator of 
the National Aeronautics and Space Administration.

Section 3: Effective date

    This section requires that purchases of flags made on or 
after 180 days after enactment of this Act comply with the Act.

Section 4: Consistency with international trade agreements

    This section requires that this Act be applied in a manner 
consistent with United States obligations under international 
agreements.

              V. CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

                                                      July 9, 2014.
Hon. Tom Carper,
Chairman, Committee on Homeland Security and Governmental Affairs, U.S. 
        Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 1214, 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,
                                              Douglas W. Elmendorf.
    Enclosure.

S. 1214--All-American Flag Act

    CBO estimates that enacting S. 1214 would have no 
significant effect on the federal budget. The legislation would 
amend federal law to require that all American flags acquired 
by the federal government be manufactured in the United States 
from materials grown, produced, or manufactured in the United 
States. The legislation also would provide exceptions from this 
requirement if complying with it would adversely affect a U.S. 
company or result in unreasonable costs or delay in acquiring 
flags.
    Based on information from the General Services 
Administration and affected vendors, CBO expects that 
implementing this bill would have no significant effect on the 
federal budget because of the bill's broad exemptions and 
because the federal government already acquires some flags from 
manufacturers that meet the requirements of the legislation. 
Enacting S. 1214 also could affect direct spending by agencies 
not funded through annual appropriations, such as the Tennessee 
Valley Authority and the Bonneville Power Administration; 
therefore, pay-as-you-go procedures apply. CBO estimates, 
however, that any net increase in spending by those agencies 
would not be significant. Enacting S. 1214 would not affect 
revenues.
    S. 1214 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not affect the budgets of state, local, or tribal 
governments.
    The CBO staff contact for this estimate is Matthew 
Pickford. The estimate was approved by Theresa Gullo, Deputy 
Assistant Director for Budget Analysis.

                  VI. EVALUATION OF REGULATORY IMPACT

    Pursuant to the requirements of paragraph 11(b) of rule 
XXVI of the Standing Rules of the Senate, the Committee has 
considered the regulatory impact that would be incurred in 
carrying out this legislation and determined that the bill will 
have no regulatory effect within the meaning of the rules.
    The Committee agrees with the Congressional Budget Office 
that the bill contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
governments, or private entities. The legislation contains no 
other regulatory impact.

       VII. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    Because this legislation would not repeal or amend any 
provision of current law, it would make no changes in existing 
law within the meaning of clauses (a) and (b) of paragraph 12 
of rule XXVI of the Standing Rules of the Senate.

                                  
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