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[Senate Report 114-157]
[From the U.S. Government Publishing Office]

                                                      Calendar No. 277
114th Congress     }                                     {      Report
                                 SENATE
 1st Session       }                                     {     114-157
_______________________________________________________________________

                                     

       

       QUARTERLY FINANCIAL REPORTING REAUTHORIZATION ACT OF 2015

                               __________

                              R E P O R T

                                 of the

                   COMMITTEE ON HOMELAND SECURITY AND

                          GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                              to accompany

                                S. 1868

          TO EXTEND BY 15 YEARS THE AUTHORITY OF THE SECRETARY
     OF COMMERCE TO CONDUCT THE QUARTERLY FINANCIAL REPORT PROGRAM

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                October 22, 2015.--Ordered to be printed
                
                                   ______

                         U.S. GOVERNMENT PUBLISHING OFFICE 

59-010                         WASHINGTON : 2015                 
                
      
      
      
      
      
      
      
      
                
                
        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                    RON JOHNSON, Wisconsin Chairman
JOHN McCAIN, Arizona                 THOMAS R. CARPER, Delaware
ROB PORTMAN, Ohio                    CLAIRE McCASKILL, Missouri
RAND PAUL, Kentucky                  JON TESTER, Montana
JAMES LANKFORD, Oklahoma             TAMMY BALDWIN, Wisconsin
MICHAEL B. ENZI, Wyoming             HEIDI HEITKAMP, North Dakota
KELLY AYOTTE, New Hampshire          CORY A. BOOKER, New Jersey
JONI ERNST, Iowa                     GARY C. PETERS, Michigan
BEN SASSE, Nebraska

                    Keith B. Ashdown, Staff Director
                  Christopher R. Hixon, Chief Counsel
       Patrick J. Bailey, Chief Counsel for Governmental Affairs
Gabrielle D'Adamo Singer, Deputy Chief Counsel for Governmental Affairs
                       Courtney J. Allen, Counsel
              Gabrielle A. Batkin, Minority Staff Director
           John P. Kilvington, Minority Deputy Staff Director
               Mary Beth Schultz, Minority Chief Counsel
     Troy H. Cribb, Minority Chief Counsel for Governmental Affairs
                     Laura W. Kilbride, Chief Clerk
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                                                      Calendar No. 277
114th Congress     }                                     {      Report
                                 SENATE
 1st Session       }                                     {     114-157

======================================================================

 
       QUARTERLY FINANCIAL REPORTING REAUTHORIZATION ACT OF 2015

                                _______
                                

                October 22, 2015.--Ordered to be printed

                                _______
                                

 Mr. Johnson, from the Committee on Homeland Security and Governmental 
                    Affairs, submitted the following

                              R E P O R T

                         [To accompany S. 1868]

    The Committee on Homeland Security and Governmental 
Affairs, to which was referred the bill (S. 1868), to extend by 
15 years the authority of the Secretary of Commerce to conduct 
the quarterly financial report program, having considered the 
same, reports favorably thereon with an amendment and 
recommends that the bill, as amended, do pass.

                                CONTENTS

                                                                   Page
  I. Purpose and Summary..............................................1
 II. Background and Need for the Legislation..........................1
III. Legislative History..............................................3
 IV. Section-by-Section Analysis......................................3
  V. Evaluation of Regulatory Impact..................................4
 VI. Congressional Budget Office Cost Estimate........................4
VII. Changes in Existing Law Made by the Bill, as Reported............5

                         I. Purpose and Summary

    S. 1868, the Quarterly Financial Reporting Reauthorization 
Act, would extend for fifteen years the authorization of the 
Quarterly Financial Report (QFR) program administered by the 
United States Census Bureau (Census Bureau), which provides 
quarterly financial data on the manufacturing, mining, 
wholesale and other economic sectors.

              II. Background and the Need for Legislation

    Federal law requires the Secretary of Commerce to ``collect 
and publish quarterly financial statistics of business 
operations, organization, practices, management, and relation 
to other businesses, including data on sales, expenses, 
profits, assets, liabilities, stockholders equity, and related 
accounts generally used by businesses in income statements, 
balance sheets, and other measures of financial condition.''\1\ 
The QFR program satisfies this statutory requirement by 
collecting and publishing quarterly aggregate statistics on the 
business financial conditions of United States corporations.\2\ 
The information obtained by the QFR program is used to prepare 
national measures of corporate profits and to inform fiscal and 
monetary policy.\3\
---------------------------------------------------------------------------
    \1\13 U.S.C. Sec. 91(a).
    \2\Quarterly Financial Report, United States Census Bureau (last 
visited Oct. 16, 2015), https://www.census.gov/econ/qfr/about.html.
    \3\Id.
---------------------------------------------------------------------------
    The QFR program has been in operation for nearly seventy 
years. Since 1982, the QFR program has been administered by the 
Census Bureau.\4\
---------------------------------------------------------------------------
    \4\Id.
---------------------------------------------------------------------------
    The QFR program surveys businesses in the industry sectors 
of mining, manufacturing, wholesale trade, retail trade, 
information services, and professional, scientific, and 
technical service industries.\5\ These industries comprise 
thirty-seven percent of the industries in the National Income 
and Product Accounts, from which business data informs the 
calculation of the nation's gross domestic product (GDP).\6\ 
The Census Bureau plans to expand the QFR program to include 
more industries, including heath care and social assistance 
services, administrative and support services, waste management 
and remediation services, accommodation and food services, real 
estate, and real estate rental and leasing services.\7\ With 
this expansion, the QFR program would increase its GDP coverage 
to sixty-one percent of industries.\8\
---------------------------------------------------------------------------
    \5\Id.
    \6\U.S. Census Bureau, Briefing with Committee staff on QFR 
program, May 21, 2015.
    \7\Id.
    \8\Id.
---------------------------------------------------------------------------
    Under the QFR program, the Census Bureau sends a mail-out, 
mail-back survey to a sample number of businesses selected 
randomly using Federal income tax records.\9\ A long-form 
survey is mailed out to approximately 4,600 large corporations 
in the covered industry sectors, and a short-form survey is 
mailed out to approximately 5,000 small- and medium-sized 
corporations in the manufacturing industry.\10\ While the 
businesses that receive the QFR survey are required by law to 
return it, the Census Bureau has not levied fines for 
noncompliance since it began conducting the QFR program.\11\ 
Seventy-three percent of surveyed businesses choose to submit 
the completed QFR program survey form online.\12\ The QFR forms 
request information from businesses' income statements and 
balance sheets.\13\ Key information items requested on QFR 
forms include sales, operating profits, after-tax profits, 
inventories, assets, and debt.\14\
---------------------------------------------------------------------------
    \9\Quarterly Financial Report, supra note 2.
    \10\Id.
    \11\E-mail from Stuart P. Durst, Jr., Branch Chief, Off. of Cong. 
and Intergovernmental Affairs, U.S. Census Bureau, to Majority Staff, 
S. Comm. on Homeland Sec. and Governmental Affairs (Oct. 1, 2015 11:48 
EDT) (on file with Committee).
    \12\Quarterly Financial Report, supra note 2.
    \13\Id.
    \14\Id.
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    Data collected and published through the QFR program is 
used by several entities, including the Bureau of Economic 
Analysis (BEA), the Federal Reserve, the Small Business 
Administration (SBA), newspapers, trade magazines, researchers, 
and individual companies.\15\ According to the BEA, ``[n]o 
other source provides quarterly tabulations of a representative 
sample of mining, manufacturing, trade, information, and 
professional and technical services corporations--corporations 
whose profits account for over 50 percent of total domestic 
profits.''\16\ For the Federal Reserve, data collected under 
the QFR program is used for its quarterly Financial Accounts of 
the United States, which provides accounts for the flow of 
funds across large private sectors and quarterly aggregate 
balance sheets for macroeconomic analysis.\17\ The SBA wrote 
that ``the QFR is the only viable publically-available source 
that provides sufficiently current data for [Manufacturing, 
Mining, and Wholesale Trade sectors] to (1) assess how changes 
in economic conditions impact revenues of firms of different 
size, and (2) assess the actual utilization of and potential 
capacity to demand credit by firms of different size.''\18\ 
Both the SBA and the Federal Reserve utilized QFR program data 
during the 2008-2009 financial crisis to analyze the financial 
health of large and small businesses.\19\
---------------------------------------------------------------------------
    \15\Id.
    \16\Letter from Dennis Fixler, Chief Statistician, Bureau of 
Economic Analysis, to Bill Bostic, Associate Director for Economic 
Programs, U.S. Census Bureau (Jan. 3, 2015).
    \17\Telephone Interview with Paul Smith, Assistant Director, Flow 
of Funds Sec., Research and Statistics Div., Fed. Reserve Sys. (July 8, 
2015).
    \18\Letter from Giuseppe Gramigna, Chief Economist, U.S. Small Bus. 
Admin., to William G. Bostic, Associate Director for Economic Programs, 
U.S. Census Bureau (Feb. 20, 2015).
    \19\Id; Telephone Interview with Paul Smith, supra note 17.
---------------------------------------------------------------------------
    Without re-authorization, the QFR program expires on 
September 30, 2015.

                        III. Legislative History

    On April 28, 2015, Senator Thomas R. Carper introduced S. 
1868, the Quarterly Financial Reporting Reauthorization Act of 
2015. S. 1868 was referred to the Senate Committee on Homeland 
Security and Governmental Affairs. The Committee considered S. 
1868 at a business meeting on July 29, 2015.
    During the business meeting, Senator Ben Sasse offered an 
amendment, requiring the Census Bureau to report to Congress on 
its data security procedures. The Committee adopted the 
amendment and ordered the bill, as amended, reported favorably 
by voice vote en bloc. Senators present for the vote on the 
amendment and the bill were: Johnson, Portman, Lankford, Ernst, 
Sasse, Carper, Baldwin, Heitkamp, and Peters.

        IV. Section-by-Section Analysis of the Bill, as Reported

Section 1. Short title.

    This section establishes the short title of the bill as the 
``Quarterly Financial Reporting Reauthorization Act of 2015.''

Section 2. Fifteen-year extension of authority for Secretary of 
        Commerce to conduct the Quarterly Financial Report Programs

    Section 2 extends the authorization of the Quarterly 
Financial Reporting Program for fifteen years to September 30, 
2030.

Section 3. Report on data security procedures of the Bureau of the 
        Census

    Section 3 requires the Secretary of Commerce to review all 
of the current Census Bureau data security procedures and issue 
a report of this review to Congress. This report would identify 
all information systems of the Census Bureau that contain 
sensitive information and describe any actions taken since the 
2015 data breach of the Office of Personnel Management to 
secure sensitive information on these information systems. The 
report to Congress would also identify any known data breaches 
of these information systems that contain sensitive information 
and whether the Census Bureau stores any information that would 
comprise classified information if it were to be combined with 
other such information.

                   V. Evaluation of Regulatory Impact

    Pursuant to the requirements of paragraph 11(b) of rule 
XXVI of the Standing Rules of the Senate, the Committee has 
considered the regulatory impact of this bill and determined 
that the bill will have no regulatory impact within the meaning 
of the rules. The Committee agrees with the Congressional 
Budget Office's statement that the bill contains no 
intergovernmental mandates as defined in the Unfunded Mandates 
Reform Act (UMRA) and would impose no costs on state, local, or 
tribal governments.

             VI. Congressional Budget Office Cost Estimate

                                                   August 31, 2015.
Hon. Ron Johnson,
Chairman, Committee on Homeland Security and Governmental Affairs;
U.S. Senate; Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 1868, the Quarterly 
Financial Reporting Reauthorization Act of 2015.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Susan Willie.
            Sincerely,
                                                        Keith Hall.
    Enclosure.

S. 1868--Quarterly Financial Reporting Reauthorization Act of 2015

    S. 1868 would extend the authority for the Department of 
Commerce to conduct the quarterly financial report program 
through 2030. Under that program, which will expire at the end 
of fiscal year 2015, the Census Bureau collects and publishes 
statistics on the financial condition of U.S. businesses. S. 
1868 also would direct the Secretary of Commerce to review the 
data security procedures in place at the Bureau of the Census, 
and submit a report to the Congress within 90 days of enactment 
summarizing the findings from that review.
    Information from the Census Bureau indicates that the 
quarterly financial report program costs about $5 million a 
year and that costs to prepare the report on data security 
would be negligible. Therefore, CBO estimates that implementing 
the bill would cost about $25 million over the 2016-2020 
period, assuming appropriation of the estimated amounts. 
Enacting S. 1868 would not affect direct spending or revenues; 
therefore, pay-as-you-go procedures do not apply.
    S. 1868 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.
    The quarterly financial report program, which the bill 
would extend, requires certain companies to provide survey 
information on their business and financial data to the Census 
Bureau. Extending this requirement would be a private-sector 
mandate on those companies. Based on information from the 
Census Bureau, CBO estimates that the direct cost to comply 
with the mandate would fall well below the annual threshold 
established by UMRA for private-sector mandates ($154 million 
in 2015, adjusted annually for inflation).
    On July 29, 2015, CBO transmitted a cost estimate for H.R. 
3116, the Quarterly Financial Report Reauthorization Act, as 
ordered reported by the House Committee on Oversight and 
Government Reform on July 23, 2015. The bills are similar and 
CBO's estimate of the budgetary effects are the same.
    The CBO staff contacts for this estimate are Susan Willie 
(for federal costs) and Paige Piper/Bach (for private-sector 
mandates). The estimate was approved by H. Samuel Papenfuss, 
Deputy Assistant Director for Budget Analysis.

       VII. Changes in Existing Law Made by the Bill, as Reported

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
S. 1868 as reported are shown as follows (existing law proposed 
to be omitted is enclosed in brackets, new matter is printed in 
italic, and existing law in which no change is proposed is 
shown in roman):

TITLE 13--CENSUS

           *       *       *       *       *       *       *

CHAPTER 3--COLLECTION AND PUBLICATION OF STATISTICS

           *       *       *       *       *       *       *

             Subchapter IV--Quarterly Financial Statistics

SEC. 91 COLLECTION AND PUBLICATION

           *       *       *       *       *       *       *

EFFECTIVE AND TERMINATION DATE; REPORT TO CONGRESS

    (a) * * *
    (b) This Act, including the amendments made by this Act, 
shall cease to have effect after September 30, [2015] 2030.

           *       *       *       *       *       *       *

                                  [all]
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