[Senate Report 113-319]
[From the U.S. Government Publishing Office]
113th Congress } { Report
SENATE
2d Session } { 113-319
_______________________________________________________________________
Calendar No. 617
CONCRETE MASONRY PRODUCTS RESEARCH, EDUCATION, AND PROMOTION ACT OF
2013
__________
R E P O R T
of the
COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
on
S. 429
December 12, 2014.--Ordered to be printed
______
U.S. GOVERNMENT PUBLISHING OFFICE
49-010 PDF WASHINGTON : 2014
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SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
one hundred thirteenth congress
second session
JOHN D. ROCKEFELLER IV, West Virginia, Chairman
BARBARA BOXER, California JOHN THUNE, South Dakota
BILL NELSON, Florida ROGER F. WICKER, Mississippi
MARIA CANTWELL, Washington ROY BLUNT, Missouri
MARK PRYOR, Arkansas MARCO RUBIO, Florida
CLAIRE McCASKILL, Missouri KELLY AYOTTE, New Hampshire
AMY KLOBUCHAR, Minnesota DEAN HELLER, Nevada
MARK BEGICH, Alaska DANIEL COATS, Indiana
RICHARD BLUMENTHAL, Connecticut TIM SCOTT, South Carolina
BRIAN SCHATZ, Hawaii TED CRUZ, Texas
ED MARKEY, Massachusetts DEB FISCHER, Nebraska
CORY BOOKER, New Jersey RON JOHNSON, Wisconsin
JOHN WALSH, Montana
Ellen Doneski, Staff Director
John Williams, General Counsel
David Schwietert, Republican Staff Director
Nick Rossi, Republican Deputy Staff Director
Rebecca Seidel, Republican General Counsel
Calendar No. 617
113th Congress } { Report
SENATE
2d Session } { 113-319
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CONCRETE MASONRY PRODUCTS RESEARCH, EDUCATION, AND PROMOTION ACT OF
2013
_______
December 12, 2014.--Ordered to be printed
_______
Mr. Rockefeller, from the Committee on Commerce, Science, and
Transportation, submitted the following
R E P O R T
[To accompany S. 429]
The Committee on Commerce, Science, and Transportation, to
which was referred the bill (S. 429) to enable concrete masonry
products manufacturers to establish, finance, and carry out a
coordinated program of research, education, and promotion to
improve, maintain, and develop markets for concrete masonry
products, having considered the same, reports favorably thereon
with an amendment (in the nature of a substitute) and
recommends that the bill (as amended) do pass.
Purpose of the Bill
The purpose of S. 429, the Concrete Masonry Products
Research, Education, and Promotion Act of 2013, is to enable
concrete masonry products manufacturers to establish, finance,
and carry out a ``check-off'' program--a coordinated program of
research, education, and promotion to improve, maintain, and
develop markets--for concrete masonry products.
Background and Needs
Check-off programs are officially known as commodity
research and promotion programs. Designed to enable cooperation
among generic commodity products--such as beef, milk, raisins,
peanuts, and certain heating fuel products--they are
established at the request of the affected industry. Existing
check-off programs establish mandatory fees on industry that
fund coordinated advertising campaigns, market research,
product development, and consumer education. The Government
oversees the programs, which are managed by a board comprised
of industry members. Unlike typical private-sector promotion
programs, the goal of check-off programs is to promote a
generic commodity to increase sales, consumer awareness, and
demand.
The vast majority of check-off programs in the United
States are agricultural. Under the Commodity Promotion,
Research, and Information Act of 1996,\1\ the U.S. Department
of Agriculture (USDA) is authorized to oversee all check-off
programs for the agricultural industry and to support the
creation of new check-off programs. Well-known check-off
programs include advertising campaigns for milk and beef, and
the USDA currently oversees at least 20 check-off programs
across the agricultural industry, including products such as
cotton, eggs, mangos, popcorn, pork, potatoes, processed
raspberries, softwood lumber, sorghum, soybeans, and
watermelons.\2\
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\1\Pub. L. 104--127.
\2\U.S. Department of Agriculture, Federal Research and Promotion
Programs (Aug. 27, 2013), (online at www.ams.usda.gov/ AMSv1.0/
ams.fetchTemplateData.do?template=TemplateB&navID
=ResearchandPromotion&leftNav=ResearchandPromotion&page=ResearchandPromo
tion&acct=
AMSPW).
---------------------------------------------------------------------------
The existing agriculture commodity check-off programs are
overseen by the USDA's Agricultural Marketing Service. Each
check-off is governed by a board, with members appointed by the
Secretary of Agriculture based on the industry's nominations.
Despite Federal administration of these programs, the check-off
programs are fully funded and operated by the industries.
According to the USDA, every $1 spent in a check-off program
yields an investment return as high as $18.\3\
---------------------------------------------------------------------------
\3\U.S. Department of Agriculture, Industry Insight: Checkoff
Programs Empower Business (Sept. 21, 2011) (online at http://
blogs.usda.gov/2011/09/21/industry-insight-checkoff-programs-empower-
business).
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In addition to the USDA administered programs, there are
also two check-off programs for heating fuel products. The
first involves propane and was authorized by the Propane
Education and Research Act of 1996.\4\ The second covers
heating oil, was initially authorized by the National Oilheat
Research Alliance Act of 2000,\5\ and was recently reauthorized
by the 2014 Agricultural Act.\6\ Both programs are overseen by
the Department of Energy.
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\4\Pub. L. 104--284.
\5\Pub. L. 106--469.
\6\Pub. L. 113--79.
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The intent of S. 429 is to establish a similar check-off
program for the concrete masonry industry.
Summary of Provisions
S. 429 would build off of the long-established Federal
check-off program for agricultural goods and establish a
similar program for concrete masonry products. The bill would
direct the Secretary of Commerce (Secretary) to create a
Concrete Masonry Products Board (Board). The Board's mission
would be to develop, finance, and carry out a collective
research, education, and promotion campaign to maintain,
strengthen, and expand the marketplace for concrete masonry
products. These activities would be financed by mandatory fees
assessed on concrete masonry manufacturers collected by the
Board. S. 429 would further authorize the Secretary to issue
other orders related to concrete masonry, subject to simple
majority votes in referenda, and would provide the Secretary
with numerous tools to implement and enforce the Act.
Legislative History
Senator Bill Nelson introduced S. 429 on February 28, 2013,
with Senators Blunt, Manchin, and McCaskill as original
cosponsors. The bill has 19 additional cosponsors: Senators
Coons, Hagan, Burr, Chambliss, Klobuchar, Crapo, Moran, Casey,
Baldwin, Levin, Cardin, Stabenow, Roberts, Durbin, Cantwell,
Murray, Warner, Booker, and Menendez.
On April 9, 2014, in an open Executive Session, the
Committee considered the bill and reported S. 429, as amended,
favorably by voice vote. The Committee adopted a substitute
amendment from Senator Nelson.
Estimated Costs
In accordance with paragraph 11(a) of rule XXVI of the
Standing Rules of the Senate and section 403 of the
Congressional Budget Act of 1974, the Committee provides the
following cost estimate, prepared by the Congressional Budget
Office:
S. 429--Concrete Masonry Products Research, Education, and Promotion
Act of 2013
Summary: S. 429 would establish the Concrete Masonry
Products Board (Board), upon approval of a referendum by
producers of masonry products made from concrete (CMP). The
Board would develop research and education programs as well as
efforts to promote CMP in domestic and foreign markets. Funding
for those activities would be derived from assessments on CMP
manufacturers based on the number of masonry units sold each
year. The bill would direct the Secretary of Commerce to
organize and hold the referendum; the agency's costs would be
reimbursed by the Board from initial collections of
assessments.
CBO estimates that enacting S. 429 would increase direct
spending by $141 million and increase net revenues by $108
million over the 2015-2024 period, yielding a net increase in
the deficit of $33 million over the 10-year period. Pay-as-you-
go procedures apply because enacting the legislation would
affect direct spending and revenues. CBO estimates that
implementing S. 429 would have an insignificant effect on
discretionary spending over the 2015-2019 period.
S. 429 contains no intergovernmental mandates as defined in
the Unfunded Mandates Reform Act (UMRA) and would not affect
the budgets of state, local, or tribal governments.
S. 429 would impose private-sector mandates on
manufacturers of CMP. Based on information from industry
experts, CBO estimates that the annual cost of the mandates
would fall well below the threshold established in UMRA for
private-sector mandates ($152 million in 2014, adjusted
annually for inflation).
Estimated cost to the Federal Government: The estimated
budgetary effects of S. 429 are shown in the following table.
The costs of this legislation fall within budget function 370
(commerce and housing credit).
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By fiscal year, in millions of dollars--
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2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2015-2019 2015-2024
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CHANGES IN DIRECT SPENDING
Estimated Budget Authority.................................. 4 14 15 15 15 16 16 16 17 17 63 145
Estimated Outlays........................................... 2 12 16 15 15 16 16 16 17 17 59 141
CHANGES IN REVENUES
Estimated Revenues.......................................... 3 10 11 11 11 12 12 12 13 13 46 108
NET INCREASE OR DECREASE (-) IN THE DEFICIT FROM CHANGES IN DIRECT SPENDING AND REVENUES
Impact on Deficit........................................... -1 2 5 4 4 4 4 4 4 4 13 33
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Notes: Components may not sum to totals because of rounding.
CBO estimates that implementing S. 429 would have an insignificant effect on discretionary spending.
Basis of estimate: CBO believes the Board established by S.
429 should be considered governmental in nature and all of its
activities should be included in the federal budget. While
formation of the Board would be voluntary, once it was created,
the requirement to pay assessments would be compulsory,
enforced by the federal government's sovereign authority.
Based on information from industry experts, CBO assumes
that the referendum would be approved by the industry and that
the Board and supporting staff would be appointed during 2015.
We expect that collections of assessments would begin before
the end of fiscal year 2015; the bill would require quarterly
remittance of amounts due.
Revenues
S. 429 would authorize the Board to levy an assessment of
one cent on each concrete block product sold by all CMP
manufacturers in the United States. Based on information from
industry experts and historical sales information, CBO expects
about 1.4 billion concrete blocks and pavers will be sold in
2015 with similar sales in subsequent years, yielding, on
average, estimated collections of $14 million per year. Those
amounts would be recorded in the budget as revenues, because
payment of the assessments would be compulsory, enforced by the
federal government's sovereign authority. CBO estimates that
enacting S. 429 would increase gross revenues by $145 million
over the 2015-2024 period.
Because excise taxes and other indirect business taxes
(such as assessments by the Board) reduce the base of income
and payroll taxes, higher amounts of those indirect business
taxes would lead to reductions in revenues from income and
payroll taxes. As a result, gross assessments would be
partially offset by a loss of receipts of about 25 percent each
year. Thus, CBO estimates that enacting S. 429 would increase
net revenues by $108 million over the 2015-2024 period.
Direct spending
S. 429 would authorize the Board to spend amounts
collected, without further appropriation, on research and
education efforts as well as programs to promote sales of CMP.
The bill also would authorize the Board to borrow funds to
cover the Board's start-up expenses and to invest collections
in interest-bearing securities, thereby generating additional
funding for its activities. Expenditures of assessments and
interest would be considered direct spending. Based on
historical patterns for similar activities, CBO estimates that
expenditures by the proposed Board would total about $141
million over the 2015-2024 period.
Spending subject to appropriation
S. 429 would direct the Secretary of Commerce to develop an
order to establish the Board and set out its authorities, and
to conduct a referendum among eligible CMP manufacturers to
approve the order. After passage of the referendum, the
Secretary would be responsible for approving the Board's
programs and budgets each year.
CBO estimates that implementing those provisions would cost
less than $500,000 over the 2015-2019 period, assuming the
availability of appropriated funds. Under the bill, the Board
would be required to reimburse the Secretary for all expenses
incurred to implement and oversee the order; CBO expects that
those reimbursements would be recorded as offsets to
discretionary spending by the Secretary. Therefore, CBO
estimates that implementing S. 429 would have a negligible net
effect on spending subject to appropriation.
Pay-As-You-Go considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. The net changes in outlays and revenues that are
subject to those pay-as-you-go procedures are shown in the
following table.
CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR S. 429, AS ORDERED REPORTED BY THE SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION ON APRIL 9, 2014
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By fiscal year, in millions of dollars--
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2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2014-2019 2014-2024
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NET INCREASE OR DECREASE (-) IN THE DEFICIT
Statutory Pay-As-You-Go Impact....................... 0 -1 2 5 4 4 4 4 4 4 4 13 33
Memorandum:
Changes in Outlays............................... 0 2 12 16 15 15 16 16 16 17 17 59 141
Changes in Revenues.............................. 0 3 10 11 11 11 12 12 12 13 13 46 108
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Estimated impact on state, local, and tribal governments:
S. 429 contains no intergovernmental mandates as defined in
UMRA and would not affect the budgets of state, local, or
tribal governments.
Estimated impact on the private sector: S. 429 would impose
private-sector mandates on manufacturers of concrete masonry
products, such as cinder blocks and concrete pavers. Those
manufacturers would be required to pay to the Board an
assessment of one cent per masonry unit sold. CBO estimates
that the cost of this mandate would amount to about $14 million
annually. The bill also would impose mandates on CMP
manufacturers by requiring them to maintain records and submit
information as required by the Board. Based on information from
industry experts, the cost of complying with the recordkeeping
requirements would be small. Consequently, CBO estimates that
the aggregate cost of the private-sector mandates in the bill
would fall well below the annual threshold established in UMRA
($152 million in 2014, adjusted annually for inflation).
Estimate prepared by: Federal costs: Susan Willie; Impact
on state, local, and tribal governments: Melissa Merrell;
Impact on the private sector: Marin Burnett.
Estimate approved by: Theresa Gullo, Deputy Assistant
Director for Budget Analysis.
Regulatory Impact
In accordance with paragraph 11(b) of rule XXVI of the
Standing Rules of the Senate, the Committee provides the
following evaluation of the regulatory impact of the
legislation, as reported:
number of persons covered
The legislation would apply to manufacturers of concrete
masonry products.
economic impact
The legislation is not expected to have an adverse economic
impact on the Nation.
privacy
S. 429 would not have a negative impact on the personal
privacy of individuals.
paperwork
S. 429 would require the Secretary to issue a proposed
order and allow for public comment and review before its
adoption to establish the Board. The Board would be required to
submit for approval to the Secretary any contracts or
agreements to carry out the Board's mission, and the Board
would be required to submit periodic audits and reviews to the
Secretary.
Congressionally Directed Spending
In compliance with paragraph 4(b) of rule XLIV of the
Standing Rules of the Senate, the Committee provides that no
provisions contained in the bill, as reported, meet the
definition of congressionally directed spending items under the
rule.
Section-by-Section Analysis
Section 1. Short title
Section 1 of the bill would establish the title of the bill
as the ``Concrete Masonry Products Research, Education, and
Promotion Act of 2013.''
Section 2. Findings and declaration of policy
Section 2 of the bill would establish various findings on
the importance of the concrete masonry industry and would
further state the bill's purpose to establish a Federal program
for concrete masonry.
Section 3. Definitions
Section 3 of the bill would define numerous key terms in
the bill, including ``concrete masonry products,'' ``dry-cast
concrete,'' and ``machine cavity.''
Section 4. Issuance of orders
Section 4 of the bill would direct the Secretary to ``issue
orders under this Act applicable to manufacturers of concrete
masonry products.'' Only one such order may be in effect at any
time, and it may be proposed by the Secretary or from ``an
existing national organization of concrete product
manufacturers'' or from persons affected by an order related to
concrete masonry products. The Secretary would issue the order
after a notice and comment period, subject to a referendum
vote, the procedures of which are established in section 7 of
the bill.
Section 5. Required terms in orders
Section 5 of the bill would lay out the procedures by which
orders are issued and the provisions of such orders. This
section would establish the Board with a membership of concrete
masonry manufacturers representing all regions of the United
States and appointed by the Secretary through a nomination
process. This section would also establish the duties of the
Board in carrying out ``a program of generic promotion,
research, and information regarding concrete masonry
products.'' Such duties would include:
administering orders and collecting
assessments, as well as setting rates of assessment
(see section 6);
developing rules and bylaws;
establishing regional organizations and
committees and working committees;
hiring employees;
borrowing funds;
carrying out research, education, and
promotion programs and projects (paid for by the
aforementioned assessments and, when appropriate,
through negotiated contracts and agreements);
maintaining minutes, books, and records; and
investigating and reporting complaints to
the Secretary, as well as recommending amendments to
orders.
This section would also establish limitations and
conditions for expenses of the Board and payment of those
expenses; require the Board to maintain books and records and
to conduct periodic audits; and prohibit the Board from
influencing legislation or government action, engaging in
activities that pose a conflict of interest, and advertising
false or misleading claims.
Section 6. Assessments
Section 6 of the bill would require concrete masonry
manufacturers to pay an assessment to the Board, of which at
least 50 percent of the proceedings (minus administrative
expenses) would be required to be proportionally dedicated to
research, education, and promotion plans and projects in
support of five statutorily-established geographic regions of
manufacturers. The Board would be allowed to invest the
proceeds in government bonds, banks regulated by the Federal
Reserve, or in instruments fully guaranteed by the United
States. The assessment rate on a manufacturer would start at
$0.01 per concrete masonry unit sold and could not rise any
higher than $0.05 per unit. A two-thirds majority of voting
members of the Board would be required to change the assessment
rate, and any rate increase or decrease would not be permitted
to exceed $0.01 per unit.
Section 7. Referenda
Section 7 of the bill would establish a referendum process
for any order issued under section 4. Within 60 days of the
effective date of an order, the Secretary would be required to
conduct a referendum among all manufacturers that pay
assessments under section 6. Approval of an order would require
a simple majority, and each manufacturer would be eligible for
one vote for each machine cavity the manufacturer has operated
within six months (as established in the definitions under
section 2). The Secretary would establish the procedures for
all referenda and would be required to conduct subsequent
referenda at the request of the Board or five years after the
effective date of an order (and periodically thereafter on a
five-year basis).
Section 8. Petition and review
Section 8 of the bill would grant any person subject to an
order the right to petition the Secretary requesting a
modification or exemption or otherwise claiming that the order
is not in accordance with the law. The Secretary would
subsequently conduct an administrative hearing and rule on the
petition, subject to judicial review in Federal district court.
Section 9. Enforcement
Section 9 of the bill would authorize the U.S. Attorney
General to bring civil actions in Federal district court for
violations of the Act and for violations of orders or
regulations issued by the Secretary. This section would further
authorize the Secretary, subsequent to notice and a hearing, to
assess civil penalties (of no more than $5,000 per violation)
and issue cease-and-desist orders.
Section 10. Investigation and power to subpoena
Section 10 of the bill would grant the Secretary the
authority to conduct investigations in order to determine if
the Act or any order is being violated. As part of this
investigatory authority, the Secretary would be authorized to
administer oaths and affirmations, subpoena witnesses, compel
the attendance of witnesses, take evidence, and require
production of records. The presiding officer of administrative
hearings on petition reviews (under section 8) and on civil
penalties or cease-and-desist orders (under section 9) would
also have such authority.
Section 11. Suspension or termination
Section 11 of the bill would direct the Secretary to
suspend or terminate an order or a provision of an order if the
Secretary finds that it does not effectuate the purposes of the
Act or was not approved by referendum conducted under section
7.
Section 12. Confidentiality
Section 12 of the bill would establish that nothing under
this Act would require the Board to disclose information or
records under section 552 of title 5, United States Code
(commonly known as the Freedom of Information Act).
Section 13. Amendments to orders
Section 13 of the bill would establish that all of the
provisions of this Act, except for the petition and review
provisions under section 8, would apply to amendments to orders
issued by the Secretary.
Section 14. Effect on other laws
Section 14 of the bill would state that the Act does not
preempt any other Federal or State law authorizing research,
education, and promotion related to concrete masonry.
Section 15. Regulations
Section 15 of the bill would authorize the Secretary to
issue regulations to carry out the provisions of the Act.
Section 16. Limitation on expenditures for administrative expenses
Section 16 of the bill would prohibit any appropriated
funds to be used for the expenses or expenditures of the Board
in administering an order.
Changes in Existing Law
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, the Committee states that the
bill as reported would make no change to existing law.