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[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 
-----------------------------------------------------------------------             
               

       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

======================================================================
 
  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\
---------------------------------------------------------------------------
    \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).
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \4\Pub. L. 104--284.
    \5\Pub. L. 106--469.
    \6\Pub. L. 113--79.
---------------------------------------------------------------------------
    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).

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                       By fiscal year, in millions of dollars--
                                                             -------------------------------------------------------------------------------------------
                                                               2015   2016   2017   2018   2019   2020   2021   2022   2023   2024  2015-2019  2015-2024
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               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
--------------------------------------------------------------------------------------------------------------------------------------------------------
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
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    By fiscal year, in millions of dollars--
                                                      --------------------------------------------------------------------------------------------------
                                                        2014   2015   2016   2017   2018   2019   2020   2021   2022   2023   2024  2014-2019  2014-2024
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       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
--------------------------------------------------------------------------------------------------------------------------------------------------------

    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.
```