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[Senate Report 115-218]
[From the U.S. Government Publishing Office]

					         Calendar No. 365

115th Congress}                                          { Report
                                 SENATE
  2d Session  }                                          { 115-218

======================================================================
                                                      
                     CONCRETE MASONRY PRODUCTS RESEARCH, 
                   EDUCATION, AND PROMOTION ACT OF 2017

                               __________

                              R E P O R T

                                 OF THE

           COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                                   on

                                 S. 374

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT] 

                 March 22, 2018.--Ordered to be printed
       
       
       
                 U.S. GOVERNMENT PUBLISHING OFFICE                    
                           WASHINGTON : 2018                     
          
       
       
       
       
       
       
       
       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
                     one hundred fifteenth congress
                             second session

                   JOHN THUNE, South Dakota, Chairman
 ROGER F. WICKER, Mississippi         BILL NELSON, Florida
 ROY BLUNT, Missouri                  MARIA CANTWELL, Washington
 TED CRUZ, Texas                      AMY KLOBUCHAR, Minnesota
 DEB FISCHER, Nebraska                RICHARD BLUMENTHAL, Connecticut
 JERRY MORAN, Kansas                  BRIAN SCHATZ, Hawaii
 DAN SULLIVAN, Alaska                 EDWARD J. MARKEY, Massachusetts
 DEAN HELLER, Nevada                  TOM UDALL, New Mexico
 JAMES M. INHOFE, Oklahoma            GARY C. PETERS, Michigan
 MIKE LEE, Utah                       TAMMY BALDWIN, Wisconsin
 RON JOHNSON, Wisconsin               TAMMY DUCKWORTH, Illinois
 SHELLEY MOORE CAPITO, West           MARGARETWOODHASSAN,NewHampshire
    Virginia
 CORY GARDNER, Colorado               CATHERINE CORTEZ MASTO, Nevada
 TODD C. YOUNG, Indiana               JON TESTER, Montana
                       Nick Rossi, Staff Director
                 Adrian Arnakis, Deputy Staff Director
                    Jason Van Beek, General Counsel
                 Kim Lipsky, Democratic Staff Director
           Christopher Day, Democratic Deputy Staff Director

Calendar No. 365

115th Congress}                                          { Report
                                 SENATE
  2d Session  }                                          { 115-218

======================================================================
 
  CONCRETE MASONRY PRODUCTS RESEARCH, EDUCATION, AND PROMOTION ACT OF 
                                  2017

                                _______
                                

                 March 22, 2018.--Ordered to be printed

                                _______
                                

Mr. Thune, from the Committee on Commerce, Science, and Transportation, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 374]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Commerce, Science, and Transportation, to 
which was referred the bill (S. 374) 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 
without amendment and recommends that the bill do pass.

                          Purpose of the Bill

    The purpose of S. 374, the Concrete Masonry Products 
Research, Education, and Promotion Act of 2017, 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

    Concrete block is a durable product used in the 
construction of public infrastructure, commercial facilities, 
and homes. Virtually every congressional district has at least 
one concrete masonry producer, and nationwide the industry 
employs thousands of workers. The economic downturn, however, 
affected the industry.
    Check-off programs are industry-wide, coordinated efforts 
to promote research, marketing, and education regarding 
specific categories of generic products. They allow producers 
of commodities to collect funds from their members to support 
promotion efforts. Promotion must be generic and cannot focus 
on a particular producer. Ultimately, check-off programs seek 
to improve the market position of commodities by expanding 
markets, increasing demand, and developing new uses for these 
products.
    Currently, there are 35 commodity check-off programs in 
place (e.g., the programs that sponsor campaigns like ``Got 
Milk?'' and ``Pork, the Other White Meat,'' and ``The 
Incredible, Edible Egg''). These programs allow entire 
industries to pool their resources with non-branded 
commodities. While most check-off programs are agriculture-
related, check-off programs for the propane and oil heat 
industries also exist. Because check-off campaigns 
traditionally involve agricultural commodities, the Department 
of Agriculture has authorized most of them. The Department of 
Commerce (DOC) would authorize the check-off program that S. 
374 envisions. It would be the first commodity check-off 
program to be administered by the DOC.

                         Summary of Provisions

    S. 374 would build off of the long-established Federal 
check-off program for agricultural goods and would 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. Mandatory fees assessed on concrete masonry 
manufacturers would be collected by the Board and would finance 
these activities. Further, S. 374 would 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. 
S. 374 includes limitations on the obligation of funds, a 
Government Accountability Office (GAO) reporting requirement, 
and a requirement that the DOC study and report on the 
propriety of applying a commodity check-off program model to a 
non-agricultural industry.

                          Legislative History

    S. 374 was introduced on February 14, 2017, by Senator 
Blunt (for himself and Senator Nelson). The measure is also 
cosponsored by 10 other Senators and was referred to the 
Committee on Commerce, Science, and Transportation of the 
Senate. On August 2, 2017, in open Executive Session, the 
Committee, by voice vote, ordered the bill reported favorably 
without amendment.

                            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. 374--Concrete Masonry Products Research, Education, and Promotion 
        Act of 2017

    Summary: S. 374 would establish the Concrete Masonry 
Products Board (board), upon approval of a referendum by 
producers of masonry products made from concrete (CMP), such as 
cinder blocks. The board would develop research and education 
programs as well as efforts to promote CMP in domestic 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. 374 would increase net 
revenues by $77 million and increase direct spending by $71 
million over the 2018-2027 period, leading to a net decrease in 
the deficit of $6 million over the 10-year period. Pay-as-you-
go procedures apply because enacting the legislation would 
affect direct spending and revenues. In addition, CBO estimates 
that implementing S. 374 would cost $2 million over the 2017-
2022 period; such spending would be subject to the availability 
of appropriated funds.
    CBO estimates that enacting S. 374 would not increase net 
direct spending or on-budget deficits by more than $5 billion 
in any of the four consecutive 10-year periods beginning in 
2028.
    S. 374 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. 374 would impose private-sector mandates on CMP 
manufacturers. On the basis of information from industry 
experts, CBO estimates that the annual cost of the mandates 
would fall well below the annual threshold established in UMRA 
for private-sector mandates ($156 million in 2017, adjusted 
annually for inflation).
    Estimated cost to the Federal Government: The estimated 
budgetary effect of S. 374 is shown in the following table. The 
costs of this legislation fall primarily within budget function 
370 (commerce and housing credit).

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    By fiscal year, in millions of dollars--
                                                      --------------------------------------------------------------------------------------------------
                                                        2017   2018   2019   2020   2021   2022   2023   2024   2025   2026   2027  2017-2022  2017-2027
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  INCREASES IN REVENUES
 
Estimated Revenues...................................      0      0      6      8      8      9      9      9      9      9     10        31         77
 
                                                              INCREASES IN DIRECT SPENDING
 
Estimated Budget Authority...........................      0      0      6      8      8      8      9      9      9      9      6        31         73
Estimated Outlays....................................      0      0      3      9      8      8      8      9      9      9      7        29         71
 
                               NET INCREASE OR DECREASE (-) IN THE DEFICIT FROM INCREASES IN DIRECT SPENDING AND REVENUES
 
Impact on Deficit....................................      0      0     -3      1      *      *      *      *      *      *     -3        -3         -6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: *= between -$500,000 and zero, components may not sum to totals because of rounding.

    Basis of estimate: In CBO's view, the board that would be 
established under S. 374 would be acting on behalf of the 
federal government. While the board would be formed only upon 
approval by a majority of the producers of CMP, once created, 
the requirement to pay assessments would be compulsory and 
could be enforced by the federal government's sovereign 
authority, for example through a court order. Hence, in keeping 
with guidance specified by the 1967 President's Commission on 
Budget Concepts, the proposed board's cash flows should be 
recorded in the federal budget.\1\
---------------------------------------------------------------------------
    \1\For more information see, How CBO Determines Whether to Classify 
an Activity as Governmental When Estimating Its Budgetary Effects, 
Congressional Budget Office, June 2017.
---------------------------------------------------------------------------
    Based on information from industry representatives, CBO 
anticipates that the referendum would be approved by the 
industry and that the board and supporting staff would be 
appointed near the end of fiscal year 2018. We expect that 
assessments would be collected beginning in the first half of 
fiscal year 2019; the bill would require assessments to be paid 
quarterly.
    The bill would apply to producers of both concrete block 
and concrete pavers, but CBO expects that only producers of 
concrete block would participate in the referendum. Because 
there is little differentiation among concrete blocks across 
manufacturers, all producers of concrete blocks would benefit 
from an industry-wide research and promotion program. 
Manufacturers of concrete pavers, on the other hand, are able 
to distinguish their products in ways that allow consumers to 
recognize individual brands. Consequently, those producers have 
little incentive to participate in an industry-wide marketing 
effort. Based on information from manufacturers of concrete 
pavers, CBO expects that those producers would not participate 
in the referendum.
    For this estimate, CBO assumes that the bill will be 
enacted near the end of 2017, that the necessary amounts will 
be appropriated each year. Estimated spending is based on 
historical patterns for similar programs.

Revenues

    S. 374 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 1.1 billion concrete blocks will be sold in 2018 and we 
expect sales to grow with inflation, yielding, on average, 
estimated collections of about $12 million per year. Those 
amounts would be recorded in the budget as revenues, because 
payment of the assessments would be compulsory, and could be 
enforced by federal courts. CBO estimates that enacting S. 374 
would increase gross revenues by $105 million over the 2018-
2027 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. 374 would increase 
net revenues by $77 million over the 2018-2027 period.

Direct spending

    S. 374 would authorize the board to spend a portion of the 
amounts collected, without further appropriation, on research 
and education efforts as well as on 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 issued by the 
Treasury, thereby generating additional funding for its 
activities. Expenditures of assessments and accrued interest 
would be considered direct spending.
    S. 374 would limit the board's authority to spend its 
estimated collections throughout the 2018-2029 period and would 
further limit the board's authority to obligate funds in 2027 
and 2028. Over that period, the board would be authorized to 
obligate 73 percent of its estimated collections. The bill also 
creates a formula that authorizes the board to obligate more or 
less than this amount depending on whether the board over or 
under estimated its collections in previous years or did not 
obligate the full amount it was authorized to obligate. For 
this estimate, CBO expects the board to estimate its 
collections accurately and to obligate the entire authorized 
amount each year. In 2027 and 2028, the board would be required 
to further limit obligations to 62 percent of the last actual 
collection in those years. Based on historical spending 
patterns for similar activities, CBO estimates that 
expenditures by the proposed board would total $71 million over 
the 2018-2027 period.
    Beginning in 2030, the obligation limitations would expire 
and the board would be authorized to spend the full amount of 
its estimated collections. The board also would be authorized 
to spend a portion of the amounts that were collected but 
unavailable for obligation over the 2019-2030 period, as well 
as the interest earned on any such amounts during that period. 
CBO estimates that $52 million would be available to spend from 
those amounts.

Spending subject to appropriation

    S. 374 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. The bill also would direct the 
Secretary of Commerce and the Government Accountability Office 
to prepare several reports for the Congress to explain the 
effect the board has on the concrete masonry block industry and 
the effectiveness of the referendum model on a nonagricultural 
industry. Based on the cost of similar reports and activities, 
CBO estimates that implementing those provisions would cost 
about $2 million over the 2017-2022 period, assuming the 
availability of appropriated funds.
    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. 374, AS ORDERED REPORTED BY THE SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION ON AUGUST 2, 2017
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    By fiscal year, in millions of dollars--
                                                      --------------------------------------------------------------------------------------------------
                                                        2017   2018   2019   2020   2021   2022   2023   2024   2025   2026   2027  2017-2022  2017-2027
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       NET INCREASE OR DECREASE (-) IN THE DEFICIT
 
Statutory Pay-As-You-Go Impact.......................      0      0     -3      1      0      0      0      0      0      0     -3        -3         -6
Memorandum:
    Changes in Revenues..............................      0      0      6      8      8      9      9      9      9      9     10        31         77
    Changes in Outlays...............................      0      0      3      9      8      8      9      9      9      9      7        29         71
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Components may not sum to totals because of rounding.

    Increase in long-term direct spending and deficits: Each 
year beginning in 2030, the board would be authorized to spend 
up to 20 percent of the amounts it previously collected but was 
not authorized to spend over the 2018-2029 period, as well as 
any interest accrued on those funds. CBO estimates that this 
newly available balance would total $52 million and would be 
spent without further appropriation in 2030 and later years.
    Moreover, because the obligation limitation on the board's 
authority to spend its estimated collections would expire in 
2029 and because the board would be authorized to spend gross 
assessments collected after 2029, rather than the net 
collections after accounting for reductions in revenues from 
income and payroll taxes, CBO estimates that, on net, 
implementing S. 374 would increase the deficit in each year 
beginning in 2030. However, CBO estimates that enacting S. 374 
would not increase net direct spending or on-budget deficits by 
more than $5 billion in any of the four consecutive 10-year 
periods beginning in 2028.
    Estimated impact on state, local, and tribal governments: 
S. 374 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. 374 would impose 
private-sector mandates on manufacturers of concrete masonry 
products, such as cinder blocks. 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 $12 million annually on average. The bill 
also would impose mandates on CMP manufacturers by requiring 
them to maintain records and make those records available for 
inspection 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 
($156 million in 2017, adjusted annually for inflation).
    Estimate prepared by: Federal Costs: Stephen Rabent; Impact 
on State, Local, and Tribal Governments: Rachel Austin; Impact 
on the Private Sector: Logan Smith.
    Estimate approved by: H. Samuel Papenfuss, Deputy Assistant 
Director for Budget Analysis.

                      Regulatory Impact Statement

    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. 374 would not have a negative impact on the personal 
privacy of individuals.

                               paperwork

    S. 374 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. S. 374 would require a study and report by the 
Secretary to examine the propriety and efficacy of applying the 
commodity check-off program model to a non-agricultural 
industry. S. 374 also would require the Comptroller General of 
the United States to submit to Congress and the Secretary a 
report examining how the Board spends assessments collected, 
among other things.

                   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

    This section would provide that the bill may be cited as 
the ``Concrete Masonry Products Research, Education, and 
Promotion Act.''

Section 2. Declaration of policy

    This section would contain congressional findings that 
concrete masonry products are important to the U.S. economy and 
that nothing in the bill would be construed to control 
production of concrete masonry products.

Section 3. Definitions

    This section would define certain terms used in the Act.

Section 4. Issuance of orders

    This section would require the Secretary to issue an order 
to manufacturers of concrete masonry products, to publish the 
order in the Federal Register within 90 days after receiving a 
proposed order or a request for a proposed order, and to 
provide for no less than a 30-day comment period.

Section 5. Required terms in orders

    This section would set the terms for the order required 
under section 4 of this bill. The order would include terms 
establishing a ``Concrete Masonry Products Board'' to carry out 
a generic promotion, research, and information program for 
concrete products. The terms of the order would require 
manufacturers and importers to maintain and make available 
specified records.

Section 6. Assessments

    This section would require concrete manufacturers to pay 
assessments with respect to concrete manufactured and marketed 
in the United States. No less than 50 percent of the 
assessments paid by a manufacturer would be required to be used 
to support research, education, and promotion programs and 
projects in support of the geographic region of that 
manufacturer.

Section 7. Referenda

    This section would provide for a 60-day period preceding 
the proposed effective date of an order, during which the 
Secretary would conduct a referendum for order approval among 
the manufacturers required to pay assessments. This section 
also would outline referendum procedures.

Section 8. Petition and review

    This section would allow a person, subject to the order, to 
file a petition with the Secretary and would establish 
jurisdiction in Federal district court for review of the 
petition.

Section 9. Enforcement

    This section would establish jurisdiction in Federal 
district court for enforcement of the order.

Section 10. Investigation and power to subpoena

    This section would confer upon the Secretary investigatory 
powers, including subpoena authority, as necessary to 
administer this legislation.

Section 11. Suspension or termination

    This section would direct the Secretary to suspend or 
terminate any order or provision that obstructs or does not 
tend to effectuate the purposes of this Act or that is not 
favored by a majority of persons voting in a referendum.

Section 12. Amendments to orders

    This section would protect the petition and review 
provisions of section 8 of the legislation from further 
amendment.

Section 13. Effect on other laws

    This section would contain an explicit non-preemption 
clause concerning other Federal or State law authorizing 
research, education, and promotion relating to concrete masonry 
products.

Section 14. Regulations

    This section would authorize the Secretary to issue 
additional regulations as may be necessary to carry out this 
Act consistent with the power vested in the Secretary under 
this legislation.

Section 15. Limitation on expenditures for administrative expenses

    This section would provide that funds appropriated to carry 
out this legislation may not be used for the payment of the 
expenses or expenditures of the Board in administering the 
order.

Section 16. Limitations on obligations of funds

    This section would prohibit the Board from obligating 
excess funds, as determined by a formulation set forth in this 
section. It would require that such excess funds be deposited 
in an escrow account and would establish requirements for the 
release of such funds from escrow.

Section 17. Study and report by the Government Accountability Office

    This section would require a GAO study to examine how the 
Board spends assessments collected, including the following: 
the extent to which the Board's reported activities would help 
achieve its annual objectives; the market impact of the Board's 
activities, including changes in demand, market share of 
competing products, overall market size, jobs, prices, cost to 
the Federal Government; whether key statutory requirements are 
met; and the issues regarding the program's oversight and 
administration. The Study would be submitted to Congress and 
the Secretary.

Section 18. Study and report by the Department of Commerce

    This section would require a study and report by the 
Secretary to examine the propriety and efficacy of applying the 
commodity check-off program model to a non-agricultural 
industry, no later than 3 years after the date of enactment of 
this Act.

                        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.

                                  [all]
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