The Honorable Bill Presnal           Opinion No. H-889
Chairman
Committee on Appropriations          Re: Whether a provider
Texas House of Representatives       of food services furnishing
Austin, Texas  78767                 services for or on behalf
                                     of a State agency or sub-
                                     division may utilize
                                     imported beef or dairy
                                     products.

Dear Representative   Presnal:

     You have requested our opinion regarding the application
of article 44?6-6a and 4476-6b, V.T.C.S., to a caterer or
other provider of food service when services are provided for
or on behalf of a State agency or subdivision. Article 4476-6a
provides in section 2:

             No state agency or subdivision may
          purchase beef, or any product consisting
          substantially of beef, which has been
          imported from outside the United States
          of America.

Likewise, article 4476-62, provides in section 2:

             No state agency or subdivision may
          purchase a dairy product that has been
          imported from outside the United States
          of America.

     To ascertain the answer to your inquiry, we must necessarily
consider the permissible scope of articles 4476-6a and 4476-6b
under the United States Constitution.  In 1947 the United
States became a party to the Protocol of Provisional Application




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The Honorable Bill Presnal - page 2   (H-889)



of the General Agreement on Tariffs and Trade (GATT), 61 Stat.
pts 5-6 (1947), as amended 62 Stat. pt. 3, 3680 (1948). Part
II, article 111,paragraph  4 of GATT provides in pertinent part:

             The products of the territory of any
          contracting party imported into the
          territory of any other contracting party
          shall be accorded treatment no less
          favourable than that accorded to like
          products of national origin in respect
          of all laws, regulations and requirements
          affecting their internal sale, offering
          for sale, purchase, transportation,
          distribution or use . . . . 62 Stat.
          pt. 3, 3680 at 3681 (1948).

GATT is an executive agreement entered into pursuant to the
Reciprocal Trade Agreements Act of 1934, 19 U.S.C. 8 1351.
Although not a formal "treaty" requiring the advice and consent
of the Senate under article 2, section 2 of the Constitution,
an executive agreement in the area of international relations,
such as GATT, is nonetheless the supreme law of the land
within the meaning of article 6 of the Constitution.   United
States v.
       -- Pink, 315 U.S.  203 (1942); United States v. mt,
301 U.S. 324 (1937). Thus, any conflict between theterms
of GATT and State law must, under the supremacy clause, be
resolved in favor of GATT. United States v. Pink, supra;
              v Belmont, supra.
United States 2

     The application of GATT's requirement of nondiscrimination
in international trade to purchases by governmental entities
is amplified in part II, article III, paragraph 8(a) of GATT,
as amended:

             The provisions of this article shall not
          apply to laws, regulations or requirements
          governing the procurement by governmental
          agencies of products purchased for govern-
          mental purposes and not with a view to
          commercial resale or with a view to use in
          the production of goods for commercial sale.
          62 Stat. pt. 3, 3680 at 3681 (1948).




                           p. 3143
The Honorable Bill Presnal - page 3    (H-889)



A distinction must, therefore, be made between products
purchased by State agencies and subdivisions for their own
ultimate use, and products purchased with a view to commercial
resale or with a view to use in the production of goods for
commercial sale.

     No conflict exists between GATT and articles 4476-6a and
4476-633, V.T.C.S., insofar as State agencies and subdivisions
are directed to purchase only American beef and dairy products
for their own "governmental purposes," and not with a view to
commercial resale. Thus, where a State agency or subdivision
procures beef and dairy products to feed, for example, inmates
of a correctional facility or a mental institution, and those
beef and dairy products are not to be resold, articles 4476-6a
and 4476-6b require that those goods must be American produced.
It is our opinion that the same rule applies when a State
agency contracts with a caterer or food service provider to
supply beef or dairy products to the State for its own
governmental purposes and not for commercial resale.

      A different rule applies, however, when a State agency
or subdivision undertakes the purchase of beef or dairy
products for commercial resale.    Application of the "buy
American" requirements of articles 4476-6a and 4476-633 to      .
this situation would result in a conflict with GATT, and
accordingly would fail under .the supremacy clause. Baldwin-
Lima-Hamilton Cor
               A*
 (Dist. Ct. App.        s~~~r:~~k~~~'a~5G~an~;a~~~;e:~~nt
on Tariffs and Trade in United Stat&Domestic     Law, 66 Mich.
c Rev.   249(1967);  C&ent,    GATT, the CaliforniaBuy  American
Act, and the Co;;i;;~;~.S;rugg;~ E55E5e;6;;;eC~~;t~~ia,s
Protectionism,
Buy-American Policy: Conflict with GATT -- and the Constitution,
17 Stan. L. Rev. 119 (1964). Seelsoethlehem        Steel Corp.
v. Board of Commissioners, 80 Cal. Rptr. 800 (Dist. Ct.
Gp.   1969r

     Although we find that articles 4476-6a and 4476-6b may
not be constitutionally applied in cases involving purchases
by State agencies or subdivisions when products are to be
commercially resold, it is our obligation to uphold those
articles insofar as they can be given effect without offending
the Constitution.  V.T.C.S. art. lla. As previously stated,




                           p. 3744
The Honorable Bill Presnal - page 4    (H-889)



GATT provides no obstacle to Texas' determination to purchase
only American-produced beef and dairy products when those
goods are purchased for governmental purposes and not for
commercial resale. Likewise, in the absence of congressional
action, the Commerce Clause of the United States Constitution,
article I, section 8, clause 3, presents no obstacle to such
a State policy in the purchase of goods for its own use.
Hughes v. Alexandria rrap Car;:, 96 S. Ct..2488 (1976).    We
perceive no conflrct etween t is State policy and the general
power of the federal government to conduct international
relations, in view of GATT's specific reservation of the right
of governmental bodies to make such discriminations, cf. United
States v.
       -- Pink, supra; United States v. Belmont, suprcarid
view of the absence of any contrary faeral policy.     See
41 U.S.C. 9 lOa-d. The application we give to articlz4476-6a
and 4476-6b is consistent with that given to the California
Buy American Act through the opinions of that State's Attorney
General.   40 ops. Cal. Att'y Gen. 65 (1962); 37 Cps. Cal. Att'y
Gen. 156 (1961); 36 Ops. Cal. Att'y Gen. 147 (1960); 34 Op.
Cal. Att'y Gen. 302 (1959).

                     SUMMARY

          Articles 4476-6a and 4476-6b, V.T.C.S.,
          require that no State agency or sub-
          division may purchase beef or dairy
          products imported from outside the United
          States when purchasing those goods for
          governmental purposes and not for com-
          mercial resale. This policy applies to
          the purchase of beef and dairy products
          by State agencies or subdivisions from
          caterers and other food service providers,
          when the products are purchased for governmental
          purposes and not for commercial resale.

                               -Very truly yours,



                                JOHN L. HILL
                                Attorney General of Texas

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The Honorable Bill PreSnal - page 5   (H-889)



APPROVED:




                        Asdistant




Opinion Committee

jwb




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