State Ethics Law Protection Act of 2010

Mr. QUIGLEY. Mr. Speaker, I am pleased that we are considering this legislation to clarify the language of Section 112 of title 23, United States Code to reaffirm the intent of Congress that Section 112 does not bar enforcement of State and local ordinances and contracting policies, in connection with Federal-aid highway projects, that disadvantage or disqualify classes of contractors. The Secretary properly enjoys discretion to approve contract requirements, consistent with the Federal-Aid Highway Act, 23 U.S.C. §101, et seq.

Possible ambiguity in Section 112 has come to the Congress's attention in light of recent State and local efforts to combat corruption and favoritism in contracting. States, local jurisdictions, and the Securities and Exchange Commission have enacted ``pay-to-play'' restrictions that disqualify contractors who make campaign contributions to officials responsible for government contracts. Concerns have been raised that application of Section 112 may limit the discretion of FHWA to approve Federal-aid highway projects subject to State pay-to-play policies. Accordingly, the FHWA temporarily withheld federal highway funds from the States of New Jersey and Illinois.

The soundness of these concerns has been called into question by the United States Court of Appeals for the Sixth Circuit in City of Cleveland v. State of Ohio, 508 F.3d 827 (6th Cir. 2007), and, in any event, these concerns misunderstand Congress's long-standing intent regarding the operation of the current laws governing Federal-aid highway projects. Section 17 of the Federal-Aid Highway Act of 1954, which is codified at Section 112 of title 23, United States Code, imposes a requirement on FHWA to ensure that government contractors are selected through a competitive bidding process. This competitive bidding requirement was ``designed to prohibit collusion or action in restraint of free competitive bidding in connection with the contract.'' S. Rep. 83-1093 (1954) at 14. The enactment of Section 112, however, was not intended to ``add to or otherwise affect the powers of the Secretary [of Transportation] ..... with respect to the selection of projects.'' Id. Subsequent amendments have not altered that purpose.

The language of this legislation simply makes clear that it has always been Congress's intent that the Secretary may concur in the award of a Federal-aid highway contract despite a State or local requirement, imposed by law or through contract, disqualifying contractors on the basis of the amount of money contributed to a political campaign. To be clear, the enactment of this legislation would not be construed to mean that existing law would have foreclosed the application of State pay-to-play restrictions, or similarly situated provisions, to highway projects supported by Federal funds.

This bill will dispel any misunderstandings about the application of State pay-to-play restrictions and similar policies to Federal-aid highway projects. It will have an immediate, positive effect for local and State governments determined to implement pay-to-play restrictions to combat corruption and favoritism.

I urge my colleagues to join me in supporting H.R. 3427.

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