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97–854 2016

H.R. 985, CONCRETE MASONRY PRODUCTS 

RESEARCH, EDUCATION, AND PROMOTION ACT 

OF 2015 

HEARING 

BEFORE THE

SUBCOMITTEE ON COMMERCE, MANUFACTURING, 

AND TRADE 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

JULY 10, 2015 

Serial No. 114–65 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

(II) 

COMMITTEE ON ENERGY AND COMMERCE 

FRED UPTON, Michigan 

Chairman 

JOE BARTON, Texas 

Chairman Emeritus 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

GREG WALDEN, Oregon 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

Vice Chairman 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

GUS M. BILIRAKIS, Florida 

BILL JOHNSON, Missouri 

BILLY LONG, Missouri 

RENEE L. ELLMERS, North Carolina 

LARRY BUCSHON, Indiana 

BILL FLORES, Texas 

SUSAN W. BROOKS, Indiana 

MARKWAYNE MULLIN, Oklahoma 

RICHARD HUDSON, North Carolina 

CHRIS COLLINS, New York 

KEVIN CRAMER, North Dakota 

FRANK PALLONE, JR., New Jersey 

Ranking Member 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANICE D. SCHAKOWSKY, Illinois 

G.K. BUTTERFIELD, North Carolina 

DORIS O. MATSUI, California 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

JERRY MCNERNEY, California 

PETER WELCH, Vermont 

BEN RAY LUJA ́ N, New Mexico 

PAUL TONKO, New York 

JOHN A. YARMUTH, Kentucky 

YVETTE D. CLARKE, New York 

DAVID LOEBSACK, Iowa 

KURT SCHRADER, Oregon 

JOSEPH P. KENNEDY, III, Massachusetts 

TONY CA ́ RDENAS, California 

(III) 

SUBCOMMITTEE ON COMMERCE, MANUFACTURING, AND TRADE

MICHAEL C. BURGESS, Texas 

Chairman 

LEONARD LANCE, New Jersey 

Vice Chairman 

MARSHA BLACKBURN, Tennessee 

GREGG HARPER, Mississippi 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

GUS M. BILIRAKIS, Florida 

SUSAN W. BROOKS, Indiana 

MARKWAYNE MULLIN, Oklahoma 

FRED UPTON, Michigan (ex officio) 

JANICE D. SCHAKOWSKY, Illinois 

Ranking Member 

YVETTE D. CLARKE, New York 

JOSEPH P. KENNEDY, III, Massachusetts 

TONY CA ́ RDENAS, California 

BOBBY L. RUSH, Illinois 

G.K. BUTTERFIELD, North Carolina 

PETER WELCH, Vermont 

FRANK PALLONE, JR., New Jersey (ex 

officio) 

(V) 

C O N T E N T S 

Page 

Hon. Michael C. Burgess, a Representative in Congress from the State of 

Texas, opening statement .................................................................................... 1 

Prepared statement .......................................................................................... 2 

Hon. Janice D. Schakowsky, a Representative in Congress from the State 

of Illinois, opening statement .............................................................................. 3 

Hon. Marsha Blackburn, a Representative in Congress from the State of 

Tennessee, opening statement ............................................................................ 4 

WITNESSES

Ellen Herbst, Chief Financial Officer and Assistant Secretary for Administration, U.S. Department of Commerce ................................................................... 5 

Prepared statement .......................................................................................... 8 

Answers to submitted questions ......................................................................

Franklin Rusco, Director, Natural Resources and Environment—Energy 

Issues, U.S. Government Accountability Office ................................................. 10 

Prepared statement .......................................................................................... 12 

Answers to submitted questions ......................................................................

Major Ogilvie, General Manager, Ready Mix USA, LLC ..................................... 37 

Prepared statement .......................................................................................... 40 

Answers to submitted questions ......................................................................

Kate Offringa, President, Vinyl Siding Institute Incorporated ............................ 43 

Prepared statement .......................................................................................... 46 

Answers to submitted questions ......................................................................

Kent Waide, President, Ruby Concrete Company ................................................. 51 

Prepared statement .......................................................................................... 53 

Answers to submitted questions ......................................................................

SUBMITTED MATERIAL

Statement of the Mason Contractors Association of Greater Chicago ................ 66 

Statement of Back Brook Masonry ........................................................................ 69 

Statement of Featherlite Building Products and Acme Brick Company ............. 72 

Statement of the National Association of Homebuilders ...................................... 75 

(1) 

H.R. 985, CONCRETE MASONRY PRODUCTS RESEARCH, EDUCATION, AND PROMOTION ACT 

OF 2015 

FRIDAY, JULY 10, 2015 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON COMMERCE, MANUFACTURING, AND

TRADE, 

COMMITTEE ON ENERGY AND COMMERCE, 

Washington, DC. 

The subcommittee met, pursuant to call, at 9:00 a.m., in room 

2123, Rayburn House Office Building, Hon. Michael C. Burgess, 

M.D., (chairman of the subcommittee) presiding. 

Present: Representatives Burgess, Lance, Blackburn, Harper, 

Guthrie, Pompeo, Kinzinger, Bilirakis, Brooks, Mullin, 

Schakowsky, Cardenas, and Welch. 

Staff Present: Graham Dufault, Counsel, CMT; Melissa Froelich, 

Counsel, CMT; Kirby Howard, Legislative Clerk; Paul Nagle, Chief 

Counsel, CMT; Olivia Trusty, Professional Staff, CMT; Michelle 

Ash, Minority Chief Counsel, Commerce, Manufacturing, and 

Trade; Lisa Goldman, Minority Counsel; and Adam Lowenstein, 

Minority Policy Analyst. 

OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS 

Mr. BURGESS. The subcommittee on Commerce, Manufacturing, 

and Trade will come to order. The chair will recognize himself for 

5 minutes for the purposes of an opening statement. 

And good morning, and I want to welcome everyone to today’s 

hearing on Representative Guthrie’s bipartisan legislation, H.R. 

985, the Concrete Masonry Products Research, Education, and Promotion Act of the 2015. This measure authorizes the establishment 

of a national checkoff program for concrete masonry products and 

directs the Department of Commerce to provide administrative 

oversight support throughout the implementation of the program. 

Many of us are familiar with the advertisements from checkoff 

programs that support agricultural commodities, such as ‘‘Beef. It’s 

What’s for Dinner’’ and ‘‘The Incredible, Edible Egg.’’ A unique 

component of these programs is that they are established at the request of a particular industry and are financed by that industry as 

well. Manufacturers and producers of a commodity agree to pay an 

assessment, which is then pooled to support a more efficient, coordinated marketing approach aimed at strengthening the market 

2 

position of the commodity in the United States and in foreign markets. 

In addition to marketing and advertising expenditures, these 

funds are also used to finance research and development ventures 

that help advance modern product lines and other innovative uses 

of the commodity in question. 

Today’s hearing on H.R. 985 will give the subcommittee an opportunity to examine the status of the concrete masonry products 

industry in the United States and abroad and to learn about the 

effectiveness of past and current research, educational, and promotional activities taken by the industry. The hearing will give us 

an opportunity to examine the potential benefits from the advancement of concrete masonry products in the marketplace. We will 

also examine the potential impact on other industries competing in 

the building material space. 

Additionally, I look forward to understanding how the Department of Commerce would fulfill its administrative and oversight 

role. I want to thank Representative Guthrie for the efforts to create this bipartisan bill that seeks to grow the economy, create jobs, 

and protect consumers. 

I would ask witnesses for their indulgence this morning as we actually—the full committee has legislation on the floor of the full 

House this morning and some members may be in and out during 

the amendment process on the Cures bill. So I thank the witnesses 

in advance for their testimony and look forward to an engaging discussion on this legislation. 

And I would be happy to yield to Mr. Guthrie if he has comments 

he wishes to make this morning. 

[The prepared statement of Mr. Burgess follows:] 

PREPARED STATEMENT OF HON. MICHAEL C. BURGESS

Good morning. I want to welcome everyone to today’s hearing on Representative 

Guthrie’s bipartisan legislation, H.R. 985, the ‘‘Concrete Masonry Products, Research, Education, and Promotion Act of 2015.’’ This measure authorizes the establishment of a national ‘‘check-off’’ program for concrete masonry products and directs the Department of Commerce to provide administrative and oversight support 

throughout the implementation of the program. 

Many of us are familiar with advertisements from check-off programs that support agricultural commodities, such as ‘‘Beef. It’s What’s for Dinner’’ or ‘‘The Incredible Edible Egg.’’ 

A unique component of these programs is that they are established at the request 

of a particular industry and are financed by that industry too. Manufacturers and 

producers of a commodity agree to pay an assessment, which is pooled together to 

support a more efficient, coordinated marketing approach aimed at strengthening 

the market position of the commodity in the United States and in foreign markets. 

In addition to marketing and advertising expenditures, those funds are also used 

to finance research and development ventures that help advance modern product 

lines and other innovative uses of the commodity. 

Today’s hearing on H.R. 985 will give us an opportunity to examine the status 

of the concrete masonry products industry in the United States and abroad, and 

learn about the effectiveness of past and current research, educational, and promotional activities undertaken by the industry. The hearing will give us an opportunity to examine the potential benefits from the advancement of concrete masonry 

products in the marketplace. We will also examine the potential impact on other industries competing in the building materials space. 

Additionally, I look forward to understanding how the Department of Commerce 

would fulfill its administrative and oversight role. 

I thank Representative Guthrie for his leadership on this issue and his efforts to 

create a bipartisan bill that seeks to grow the economy, create jobs, and protect conVerDate Nov 24 2008 14:28 Jan 19, 2016 Jkt 037690 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 114\114-65 CHRIS
3 

sumers. I would ask the witnesses for their indulgence this morning as we have a 

very important Cures bill on the floor and many of our Members will be in and out. 

I thank the witnesses for their testimonies and I look forward to engaging discussion on this legislation. 

Mr. GUTHRIE. Thank you, Mr. Chairman. Thank you for having 

this hearing. And I want to thank everybody for being here today 

and am pleased to support H.R. 985. 

This an issue that my colleagues and I have worked on for 3 

years, and I would especially like to thank my friend from Florida, 

Congresswoman Kathy Castor, who has worked very hard on this 

effort. The bill is truly bipartisan, with over 160 cosponsors. 

I am sure that just about every member of this subcommittee, 

maybe every Member of Congress has heard from concrete mason 

producers or contractors in their respective districts. Most of these 

businesses are small, locally owned, and so they are greatly entwined with their communities and would stand to benefit greatly 

from this program. 

H.R. 985 is a bipartisan approach to creating a commodity research and education program and will allow for nationwide cooperation and accelerated job growth. By allowing block producers 

to pool their resources, these local manufacturers will have a way 

to improve their products, resulting in increased energy efficiency 

and safety and increased marketing options. 

I want to thank the subcommittee chairman for bringing this important legislation before the subcommittee, and I encourage my 

colleagues to support this bill. And I yield back to the chairman. 

Mr. BURGESS. The chair thanks the gentleman. The gentleman 

yields back. 

The chair recognizes the subcommittee ranking member, Ms. 

Schakowsky of Illinois, for 5 minutes for an opening statement, 

please. 

OPENING STATEMENT OF HON. JANICE D. SCHAKOWSKY, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS 

Ms. SCHAKOWSKY. Thank you, Mr. Chairman, for holding this 

hearing on H.R. 985, the Concrete Masonry Products Research, 

Education, and Promotion Act. I look forward to hearing from our 

witnesses on this legislation. 

Let me apologize at this point. I am going to leave for a very 

short time to go to the floor on an amendment that I am proposing. 

Commodity checkoffs have been used for decades to support the 

sales and improvement of many products. So far, all of those programs have been overseen by the USDA or Department of Energy, 

from ‘‘Got Milk’’ to cotton, ‘‘The Fabric of Our Lives.’’ We are all 

familiar with these programs and the products they promote. 

With the creation of softwood lumber checkoff, other building industries, like hardwood lumber natural stone, have made efforts to 

create their own checkoff program, seeking parity with other building materials. H.R. 985 would create a concrete masonry checkoff 

program at the Department of Commerce. 

Over the past few years I have heard regularly from the concrete 

masonry industry contractors, workers, and my colleagues about 

the importance of a checkoff program. Just yesterday I met with 

4 

a constituent named Jim O’Connor, who has worked tirelessly to 

advance this bill. Advocates stress that a checkoff would support 

jobs, improve the quality of concrete products, and reduce adverse 

environmental impacts of concrete production. I am very interested 

in pursuing these goals, and I look forward to hearing from the industry representatives about how this legislation would get us 

there. 

I also want to make sure that the Commerce Department, which 

has never managed a checkoff, has the resources and know-how to 

oversee this kind of program. I want to learn from the Government 

Accountability Office about the pitfalls of check-offs and how those 

can be avoided. And I want to understand the perspective of those 

representing other building materials. I look forward to hearing the 

testimony of our nonconcrete industry witnesses today to better understand those issues. 

I think we all share the same objectives: To grow jobs, improve 

the quality and safety of the building materials we use, and heighten consumer awareness. I want to make sure that this legislation 

is successful in leveraging all of those benefits while limiting any 

negative impacts that might be anticipated. I know that my colleagues share that goal. 

Again, I look forward to hearing from our witnesses, and I yield 

back the balance of my time. 

Mr. BURGESS. The chair thanks the gentlelady. The gentlelady 

yields back. 

The chair recognizes the vice chair of the full committee, Ms. 

Blackburn, for the purpose of an opening statement. 

You are recognized. 

OPENING STATEMENT OF HON. MARSHA BLACKBURN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TENNESSEE 

Mrs. BLACKBURN. Thank you, Mr. Chairman. And I want to 

thank our witnesses for being here and giving their time. 

Checkoff programs, we all know how they have worked. We are 

curious about expanding this to the concrete industry and how this 

is going to work to help with jobs growth and with industry development. 

Now, interestingly enough, when I was in the state senate in 

Tennessee in the late 1990s I worked with a group in the concrete 

industry in our state to help found the Center of Excellence at Middle Tennessee State University. And it was the first such center 

that we had in the south, and it has been so highly successful. I 

was pleased to serve as the graduation speaker for the first graduating class from the Concrete Industry Management program. 

We continue to see the benefits of this. And I think, as you look 

at the advancement in this industry, the safety of materials, the 

options in concrete in these materials, that having a checkoff program works just hand in glove with what we see from the MTSU 

program. 

So I welcome you all. I am going to have a couple of questions 

for you. As the gentlelady from Illinois said, we have legislation 

from this committee on the floor this morning, so we are going to 

be up and down. So we ask for your understanding in that. 

5 

Mr. Chairman, I yield back. 

Mr. BURGESS. The gentlelady yields back. The chair thanks the 

gentlelady. 

Seeing no other members seeking time for an opening statement, 

that will conclude opening statements. The chair would remind 

members that, pursuant to committee rules, all members’ opening 

statement will be made part of the record. 

I now want to thank our witnesses for being here today and taking the time to testify before the subcommittee. Again, today’s subcommittee hearing will consist of two panels. Witnesses on each 

panel will have the opportunity to give an opening statement of 5 

minutes, followed by a round of questions from members. Once we 

conclude with questions on the first panel, we will take a brief recess to set up for the second panel. 

Our first panel today consists of two witnesses, Ms. Ellen Herbst, 

the Chief Financial Officer and Assistant Secretary for Administration, the United States Department of Commerce. 

Good morning. Thank you for being here. 

And Mr. Franklin Rusco, Director, Natural Resources and Environment Energy-Issues at the United States Government Accountability Office office. 

We will begin our first panel with Ms. Herbst. You are recognized for 5 minutes for an opening statement, please. 

STATEMENTS OF ELLEN HERBST, CHIEF FINANCIAL OFFICER 

AND ASSISTANT SECRETARY FOR ADMINISTRATION, U.S. DEPARTMENT OF COMMERCE; AND FRANKLIN RUSCO, DIRECTOR, NATURAL RESOURCES AND ENVIRONMENT–ENERGY 

ISSUES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE 

STATEMENT OF ELLEN HERBST 

Ms. HERBST. Thank you. And good morning, Chairman Burgess, 

Ranking Member Schakowsky, and members of the committee. 

Thank you for inviting me to testify today on proposed legislation 

to establish a commodity research and promotion program, also 

known as a checkoff program, for concrete masonry products. 

I am Ellen Herbst. I am the Department’s CFO and Assistant 

Secretary for Administration. I oversee the establishment and execution of departmental policies and procedures for administrative 

functions affecting program operations in Commerce’s operating 

units. In my role, I seek to strengthen the Department’s capacity 

to achieve its objectives, maximize return on program investments, 

and deliver quality and timely service. 

As part of the administration’s economic team, the Secretary of 

Commerce serves as the voice of all U.S. business. The Department 

of Commerce promotes job creation, economic growth, sustainable 

development, and improved standards of living for all Americans by 

working in partnership with businesses, universities, communities, 

and our Nation’s workers. 

The Department’s ‘‘Open for Business’’ Agenda is a bold strategic 

plan and policy blueprint focused on expanding trade and investment, unleashing government data for economic benefit, spurring 

innovation, protecting the environment, and executing these priorVerDate Nov 24 2008 14:28 Jan 19, 2016 Jkt 037690 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 114\114-65 CHRIS
6 

ities with operational excellence as careful stewards of taxpayer 

dollars. 

Our bureaus are hard at work every day on behalf of American 

businesses and workers. For example, the International Trade Administration is charged with promoting the export of U.S. goods 

and services in foreign markets and ensuring fair trade and compliance with trade laws and agreements. Through its administration 

of the patent and trademark laws, the U.S. Patent and Trademark 

Office protection enables the protection of new ideas and spurs innovation, creativity, and the development of new technology globally. 

The Economic Development Administration plays a critical role 

in fostering regional economic development efforts in communities 

across the Nation. And finally, with a varied research portfolio, 

world class facilities, national networks, and international partnerships on standard and technology, the National Institute of Standards and Technology works to support U.S. Industry and innovation. 

As we understand the bill, H.R. 985 would establish the Concrete 

Masonry Products Board upon approval of a referendum by producers of masonry products made from concrete. The Board would 

develop research and education programs, as well as programs to 

promote concrete masonry products in domestic and foreign markets. Funding for those activities would be derived from mandatory 

assessments on manufacturers based on the number of masonry 

units sold each year. 

The bill directs the Secretary of Commerce to organize and hold 

the initial referendum, produce an order, appoint the Board, and 

then would require the Secretary of Commerce to assume an ongoing oversight and enforcement role. 

While the Department supports the efforts of the masonry industry to coordinate research, education, and promotion activities for 

the industry, we have identified a number of questions or challenges to implementation of this program within the Commerce Department. 

First, although the legislation provides that the cost of the Department’s activities in carrying out this program are intended to 

be reimbursed using assessments collected by the Board, it is unclear to us at this point how that process would work in practice. 

In addition, the Department does not currently have the expertise, staff, or resources to establish and administer a checkoff program. Such a program office would need to be established and located within one of the Department’s operating units. There are no 

bureaus within the Department that currently administer a commodity checkoff or similar program, nor does such a program fit 

within the current mandates or mission of our operating units. And 

the oversight and enforcement responsibilities proposed by the bill, 

as we understand them, would be quite extensive. 

So, an option would be for the concrete masonry industry to organize voluntarily cooperative arrangements to encourage generic 

marketing, education, and research activities. 

We also note that other competing construction material producers might oppose the creation of such a program that could be 

viewed as unfairly favoring one type of construction material over 

7 

another. This could led to requests from other competing construction material producers to establish their own checkoff program, resulting in an expanding number of checkoff programs that would 

be administered and housed within the Department of Commerce. 

I appreciate the committee’s time and attention. I appreciate the 

invitation. And I welcome any questions. Thank you. 

[The prepared statement of Ms. Herbst follows:] 

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Mr. BURGESS. The chair thanks the gentlelady. The gentlelady 

yields back. 

The chair recognizes Mr. Rusco 5 minutes for your opening statement, please. 

STATEMENT OF FRANKLIN RUSCO 

Mr. RUSCO. Thank you, Mr. Chairman, Ranking Member 

Schakowsky, and members of the subcommittee. Thank you for the 

opportunity to discuss GAO’s prior work on checkoff programs, and 

particularly some observations from two such programs, the Propane Education and Research Council, or PERC, and the National 

Oil Heat Research Alliance, or NORA. 

There are currently more than 20 checkoff programs for agricultural commodities. These programs allow industries to set aside a 

fraction of the wholesale price of these commodities to be used by 

the programs for a variety of purposes. Checkoff programs are typically geared toward increasing the success of the industries that 

fund them through activities including research and development, 

consumer education, and promotion of U.S. products, domestically 

and abroad. 

For agricultural commodity checkoff programs, USDA’s Agricultural Marketing Service has administrative and oversight responsibilities and is reimbursed by the program’s producer-contributor 

boards for these functions. 

Authorizing language for checkoff programs varies, but frequently contains guidance about the prioritization of activities performed by the programs. For example, Congress may specify a minimum proportion of program funds that go to research and development, consumer education, or other functions. Authorizing language may also prohibit certain activities, such as lobbying. 

In 2010, GAO evaluated two such programs, PERC and NORA, 

that were authorized by Congress in the Propane Act of 1996 and 

the Oil Heat Act of 2000. These acts authorized certain activities, 

including research and development, safety training, and consumer 

education, and placed restrictions on other activities, including certain lobbying activities. 

Under the authorizing statutes, DOE and Commerce were given 

certain authority to implement the programs. Congress also specified key procedural, administrative, and spending requirements to 

administer these programs. PERC’s authority does not sunset, but 

NORA’s has and was most recently reauthorized in 2014. 

Our evaluation of PERC and NORA found that some PERC and 

NORA activities appeared to meet the requirements of the acts, but 

certain other activities, such as activities involving Congress or politically affiliated entities, raised issues about whether they were 

covered by the acts’ specific lobbying restrictions. We also found 

that neither act provided guidance on what constitutes influencing 

legislation or elections, which made it unclear if PERC or NORA 

was meeting the intent of Congress. 

In addition, Congress had not specified what proportions of program funds would go to the three key activities. For example, 

PERC and NORA each spent a relatively small share of funds on 

research and development, 8 and 6 percent, respectively, despite 

the fact that research and development had been a key area of conVerDate Nov 24 2008 14:28 Jan 19, 2016 Jkt 037690 PO 00000 Frm 00016 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 114\114-65 CHRIS
11 

gressional interest as the two laws were debated prior to enactment. Because the acts lacked specific guidance in these areas, it 

was unclear whether the programs were doing what Congress intended. 

Finally, we found that Federal oversight of PERC and NORA by 

DOE, as called for in the acts, was limited compared to the oversight of agricultural checkoff programs by the Agricultural Marketing Service. 

Based on these findings, we suggested that, prior to reauthorizing NORA, Congress may wish to: one, specify any prioritization 

of activities that Congress intends to be undertaken; two, specify 

a Federal oversight role by requiring DOE to monitor and oversee 

the expenditures of the PERC and NORA funds; and three, to establish a specific enforcement mechanism and authorize DOE to 

refer any potential violations of law to appropriate enforcement entities. 

In its reauthorization of NORA in 2014, Congress took actions 

consistent with all three suggestions, thereby creating greater accountability and oversight for NORA. PERC, which does not sunset, however, has not been subject to these changes to date. 

I hope these observations are useful as you consider the Concrete 

Masonry Products Research, Education, and Promotion Act of 2015. 

GAO does offer assistance with legislative language, if that is desirable. We have some of our general counsel who are very versed 

on these programs and would be happy to help if we can. 

Thank you. I will be happy to answer any questions you may 

have. 

[The prepared statement of Mr. Rusco follows:] 

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Mr. BURGESS. The chair thanks the gentleman. The gentleman 

yields back. 

We will move on to the question part of our hearing. I will recognize myself first for 5 minutes for the purpose of questions. 

Mr. Rusco, let me stay with you, because on PERC and NORA, 

the two checkoff programs that you used as your examples, both 

within the Department of Energy, is that correct? 

Mr. RUSCO. Yes. 

Mr. BURGESS. So the money that is collected, where does that 

money physically go? Does it stay in the Department of Energy? 

Does it go to the Federal Treasury? Where does it actually end up? 

Mr. RUSCO. So as far as the money that reimburses for oversight, 

I don’t know the answer to that. I can find that out for you in the 

case of DOE. 

In the case of the Agricultural Marketing Service, that money I 

believe goes directly to fund the FTEs that are used for that oversight and administrative activity. 

Mr. BURGESS. OK. Then that funding for full-time equivalents for 

that activity, is that subject to an appropriation by Congress or is 

that just a pass-through that happens in the agency without Congress being involved? 

Mr. RUSCO. I believe that it is the latter. And I will get back and 

verify that. 

Mr. BURGESS. Yes, I would very much appreciate to understand 

what the actual flow of the dollars through the agencies is. 

Ms. Herbst, thank you for your testimony. If I heard you correctly, I think it did voice some questions about—you are not currently doing this type of activity. Is that correct? 

Ms. HERBST. That is correct. 

Mr. BURGESS. Let me just ask you this, it is a little bit out of 

left field and I apologize for it, but does the Department of Commerce—you are the Chief Financial Officer, is that correct?—do you 

prepare a spending plan every year which is submitted to the Committee on Appropriations? 

Ms. HERBST. Yes, we do. 

Mr. BURGESS. Would you have that available for the committee, 

not necessarily this morning, but could you make that available to 

us so we could look at the spending plan that you submitted for 

this past year? 

Ms. HERBST. Certainly. 

Mr. BURGESS. How do you see this activity fitting into the spending plan as it is on going, as it is being administered this year? 

And what I am particularly interested in is the same questions I 

was asking Mr. Rusco, what happens to the dollars that are collected? Are they simply disbursed by the agency or are you required to come back to the appropriations committee for the allocation of those dollars? 

Ms. HERBST. Thank you for that question. Since we don’t currently administer a checkoff program, I am not familiar with the 

answer to that question, but we could certainly also look into that 

for our particular Department’s appropriations rules and get back 

to you on that. 

Mr. BURGESS. Well, my interest in this is more than just cursory 

or even academic. In other instances, and having nothing to do 

29 

with the checkoff program, but in other instances and other agencies it does seem that there are moneys collected that are then disbursed for activities that doesn’t go through the appropriations 

process, and this bothers me because of our constitutional obligation that any funds that go to the Treasury need to be disbursed 

through an appropriations process. 

And I want us to be sure, if we are indeed going to set up a new 

program, from a new de novo program, I want to be certain that 

it is done correctly and in accordance with all of the principles that 

the Founders laid down for us in the Constitution so that the people are protected by the separation of powers that was intended by 

the Founders. 

And obviously, Ms. Herbst, you do voice some concerns. Let me 

just ask you, has the agency had any discussion about this as to 

whether or not your agency is prepared to handle the collection and 

disbursement of money in a checkoff program? 

Ms. HERBST. First, I want to make clear, we don’t have a policy 

position on the bill. So our discussion of it has been around how 

you would administer the program, should it become law. 

As we understand it, our role would be in implementation, helping to set up the program and set up the Board and the program. 

And then it would be oversight and compliance and enforcement for 

our understanding of the bill. That generally would require expertise from our legal staff, financial staff, internal control staff. And 

while we haven’t put together a detailed approach or plan yet, we 

believe it would include the need to have a program person who 

was familiar with the industry and promotion in the industry and 

so forth. So with have had that level of conversation. 

Mr. BURGESS. Very well. I thank you for that answer. My time 

has expired. I may have one follow-up question for you before we 

finish. 

Mr. Cardenas, I recognize you for 5 minutes for questions, 

please. 

Mr. CARDENAS. Thank you, Mr. Chairman. I appreciate the opportunity to have this dialogue before the public. 

In this 2010 report on the propane and oil heat checkoff programs, known as PERC and NORA, respectively, the GAO made 

some recommendations to Congress to improve accountability and 

oversight of the programs. 

Mr. Rusco, the GAO recommended that Congress specify the priority of the activities that should be undertaken by the Board. Was 

the recommendation followed for either PERC or NORA as far as 

you are concerned? 

Mr. RUSCO. Yes. For NORA, when NORA was reauthorized in 

2014, Congress did specify that a greater proportion of the funds 

collected be spent on research and development, among other 

things. 

Mr. CARDENAS. And so far has that adjustment seemed to 

prove—the follow-through on that adjustment, is it happening or is 

it too early to tell? 

Mr. RUSCO. It is too early and we have not been asked to review 

it yet. So if we do, we will make that determination. 

30 

Mr. CARDENAS. OK. Do you think the concrete masonry checkoff 

program could be better if this bill clearly specified the priorities 

of the program? 

Mr. RUSCO. I think we are neutral on that. It is the intent of 

Congress that if the Congress does intend for there to be specific 

guidelines, then it probably needs to be laid out explicitly. What we 

found was that with PERC and NORA they spent over half of their 

money on consumer education. And within that bucket, there were 

a lot of activities that we thought might not even fit the definition 

of that. 

Mr. CARDENAS. OK. Mr. Rusco and also Ms. Herbst, some have 

suggested that this bill specify that research on ways to improve 

concrete masonry products and training for builders and developers 

should be priorities for the Board. Do you support the inclusion of 

a provision that would clarify that research and development and 

training are priorities for the program? 

Mr. RUSCO. Again, we are neutral about what Congress’ intent 

for the program is, but if that is to support that, then it might be 

prudent to state that explicitly. 

Mr. CARDENAS. So basically, if we write language in legislation 

and our intent is not written in that legislation, then that would 

give fungibility for any organization to not have to follow the intent. So basically do you agree that if that is the legislative intent 

of Congress, the we should in fact put it in the bill? 

Mr. RUSCO. It is what we found was missing in PERC and 

NORA. And then when Congress did reauthorize it, NORA, they 

did include that kind of specification. 

Mr. CARDENAS. OK. So the question is to both of you, along those 

same lines for PERC and NORA, the GAO recommended that Congress specify the proportion of the assessment funds that should be 

spent on each activity. This bill, however, does not include such a 

provision, at least at this time. Do you support including this kind 

of language if that is the intent of Congress? 

Mr. RUSCO. If it is the intent of Congress that there be certain 

proportions, then it would ensure greater certainty that that was 

actually done if that was included. 

Mr. CARDENAS. So in other words, if an organization is provided 

with opportunities and responsibilities, but if those responsibilities 

are not specific, then they in fact are not doing anything wrong if 

left to their own interpretations, correct? 

Mr. RUSCO. That is correct. 

Mr. CARDENAS. OK. So being with what has gone on with PERC 

and NORA, and there are some criticisms of that flexibility and 

that not following the supposed intent as some people have described, we should be more prescriptive in this bill, if in fact we 

want the actual outlay and the actual activities to be more in line 

with what the intent is. 

Mr. RUSCO. That is certainly what we found in the case of PERC 

and NORA. 

Mr. CARDENAS. OK. So again, absent specific language, for example, even PERC and NORA aren’t necessarily doing anything 

wrong per se, if one cannot point to specific legislative language 

that is prescriptive? 

31 

Mr. RUSCO. That is correct. We found that it was unclear whether what they were doing was actually meeting the intent of Congress because the language was not—— 

Mr. CARDENAS. In my 18 years of legislating I can agree that if 

we are not prescriptive as legislators and we write legislation, then 

we can’t blame anybody for not following through with the intent 

if the intent is left out of the language. 

Thank you very much, I yield back. 

Mr. LANCE [presiding]. Thank you very much. 

The chair recognizes Mr. Harper. 

Mr. HARPER. Thank you, Mr. Chairman. 

Thank you both for being here. 

And, Mr. Rusco, if I could ask you a question. You just discussed 

that Congress should consider specifying the prioritization of activities it wants to be when you undertake a checkoff program. Is 

there a danger in being too specific to the point that we could limit 

the flexibility of a checkoff program to respond quickly and effectively to changes in the marketplace? 

Mr. RUSCO. I think some checkoff programs provide ranges of 

proportions to be spent, so they are not rigidly specific. 

Mr. HARPER. Can you get too specific, though, that limits that 

flexibility? 

Mr. RUSCO. I would imagine that that is possible, yes. 

Mr. HARPER. I will yield back in the interest of time, Mr. Chairman. 

Mr. LANCE. Thank you very much. 

Ms. Castor, you are recognized. 

Ms. CASTOR. Well, thank you very much. Thank you for calling 

this hearing. And welcome to the witnesses. 

And, Ms. Herbst, I am a cosponsor of the bill, along with my colleague Mr. Guthrie. And I want to thank you for expressing your 

general support. The Department of Commerce mission is to help 

American businesses, and a lot of these businesses are spread out 

all across the country. And my interest has been in, because this 

is an industry-driven initiative, it is going to be voluntary, but I 

hear the message from GAO and from Commerce on the need for 

specifics. 

I note that in the bill it does provide certain caps that hopefully 

will address concerns raised by GAO. It says that 50 percent of the 

assessments paid by a manufacturer must be spent on promotion, 

research, or education programs in the manufacturer’s geographic 

area. A lot of those terms are defined in the bill for greater specificity. 

In addition, the statute prohibits the use of assessment funds to 

influence legislation or governmental action, which addresses a 

concern of the GAO as well in the other cases. And after the program’s creation, administrative expenses are capped, cannot exceed 

10 percent of the Board’s income. 

Mr. Rusco, is that the type of caps on expenditures and a little 

more specificity that you are recommending generally? 

Mr. RUSCO. I think when we looked at H.R. 985 in the context 

of what we found with PERC and NORA with regard to the specificity, the language was more similar to PERC and NORA than dissimilar. Let me put this a different way. There was less specificity 

32 

in the original NORA authorization than there was in the reauthorization. 

Ms. CASTOR. And then in the other law, the Congress—there was 

no reauthorization, so the Congress has not addressed that. 

Mr. RUSCO. That is correct, that remains the same. 

With respect to the other two things you recommended, the way 

that 985 is currently written with the provision that Commerce 

will review within 30 days certain activities and spending plans of 

the program, if they don’t review it within 30 days then it is 

deemed to have been approved. That is very similar also to what 

the original PERC and NORA language was and it is different than 

what the NORA reauthorization language is, which required DOE 

to perform administrative and oversight activities. Because prior to 

that, for some 13 years DOE had not performed any of those oversight or administrative activities. 

Ms. CASTOR. Right. Well, thank you very much for your input. 

I think that is very helpful. 

And I yield back the balance of my time. 

Mr. LANCE. Thank you very much. 

The chair recognizes Mr. Guthrie. 

Mr. GUTHRIE. Thank you very much. 

And I appreciate the panelists for being here. I appreciate working with my friend from Florida, Ms. Castor. Mr. Whitfield was 

here earlier, I think he will be here a little later. He has a constituent testifying in the next panel. So I appreciate that. 

And as I stated earlier, this bill is important for small manufacturers of concrete block. And I would point out the nature of the 

product is it has heavy, it is hard to transport over long distances, 

and in turn it makes it difficult to get bigger. So it is a lot of small 

businesses in a lot of our communities, as a lot of us have learned 

over the last couple years. 

So an R&D program, it is difficult for a single business to establish a big R&D program, so it is important. And I know the Commerce Department, what they do is move forward. So I appreciate 

your being here. And I completely sympathize and understand that 

the questions when you are asked to get involved in a program you 

haven’t been involved in before, I think it is fair to say we have 

not done this, there are a lot of questions that we want answers 

to, but I think working together we can make that happen. 

And I know that other agencies or other departments, the Department of Energy being one, has stood up boards in this kind of, 

and so there are examples of other successful departments doing 

this. I am sure the Department of Commerce would be willing, if 

this moves forward and the President signs it, to work with those 

agencies to make sure we move forward. If you would like to comment on that. 

Ms. HERBST. Yes, thank you. We would definitely be willing to 

learn more, understand more, work with the committee and with 

other agencies who with done this before to ensure that we discharge our responsibility as well. 

Mr. GUTHRIE. And I am sure the Department of Commerce also 

has other citizens advisory boards or those type of boards that are 

probably not a checkoff board, obviously not a checkoff board, as 

you stated. 

33 

Ms. HERBST. That is correct. 

Mr. GUTHRIE. But you have certainly worked in the area with 

other boards and moving forward. 

Ms. HERBST. That is correct. 

Mr. GUTHRIE. As I said, I certainly sympathize and understand 

your questions, and I think all of us working together can make 

this move forward. 

And on to Mr. Rusco. Energy took the lead in—I think actually 

the other one was Commerce and Energy, but Energy took the lead 

in setting up the program. I was just wondering if your research 

could provide any insights into how the oversight role was fleshed 

out between the two departments. 

Mr. RUSCO. So I think that initially there wasn’t much either between Commerce and DOE or a collaboration between them. They 

were just kind of passing on. Since 2014, with the requirement that 

DOE set up enforcement and oversight activities, we have not 

looked at the program since then. So I can’t really comment on how 

that is going. 

Mr. GUTHRIE. You mentioned the need for oversight and expenditure of funds, and I understand the burden that this could put on 

a department. Would a third-party auditor kind of requirement 

move forward, would that be something that you would see would 

be beneficial, to take some effort off the agency? 

Mr. RUSCO. Yes, that is another thing we recommended and I believe was included in the 2014 reauthorization, was the setup of a 

third-party entity to essentially monitor spending of all the widespread state and other recipients of those funds and make sure 

that the funds were spent on activities that had been approved. 

And then that entity would then report to the oversight entity and 

therefore take some of pressure off that. 

Mr. GUTHRIE. Well, thank you. I really appreciate both of you 

being here thank you today, and I appreciate it. 

And I yield back. 

Mr. BURGESS [presiding]. The chair thanks the gentleman. The 

gentleman yields back. 

The chair recognizes the gentleman from Florida, Mr. Bilirakis, 

5 minutes for questions, please. 

Mr. BILIRAKIS. Thank you, Mr. Chairman. I appreciate it. 

Mr. Rusco, the organizational structure and activities of the 

checkoff program vary. Based on GAO’s observations of checkoff 

programs, is there a certain organizational structure that has generated more success than others? 

Mr. RUSCO. I don’t think we have looked at that question in particular. So we have not tried to compare all the different models 

and see how well they perform. Really our observations are just 

specifically about PERC and NORA and how some of the language 

in their authorizing acts allowed—well, created some uncertainty 

about whether the spending was being done according to Congress’ 

intent. 

Mr. BILIRAKIS. Last question. Are there recommendations that 

GAO has offered to agencies overseeing checkoff programs in the 

past that provide guidance on how to detect noncompliance with 

these programs? 

34 

Mr. RUSCO. We have done work over the years, over many years, 

looking at checkoff programs and have made recommendations over 

time. The recommendations that we made in this most recent report in 2010 were actually matters for congressional consideration 

before reauthorization rather than recommendations to the agency. 

But we had in a previous report recommended that DOE do more 

with its oversight role and they had disagreed with that and not 

implemented that recommendation. 

Mr. BILIRAKIS. OK. Thank you very much. 

I yield back, Mr. Chairman. 

Mr. BURGESS. The chair thanks the gentleman. The gentleman 

yields back. 

The chair recognizes Ms. Brooks from Indiana for 5 minutes for 

questions, please. 

Mrs. BROOKS. Thank you, Mr. Chairman. 

Prior to coming to Congress, I was at Ivy Tech Community College in administration, and at that time I focused and led the 

school’s strategies aimed at workforce development. One of my 

greatest interests both then and now was creating a trained and 

well-educated workforce by providing them with the tools and the 

experiences they need to grow and succeed. And I know how much 

the masonry industry affects the State of Indiana. 

Wells Concrete Masonry has operated in the Fishers community 

for over 20 years, and in Pendleton, Indiana, it has benefited from 

Swackhamer Masonry, present since 1970s. Masonries are vital to 

revitalizing both the residential, public, and commercial development of our State and country. Unfortunately, the recent downturn 

in the masonry industry has hit hard. 

In 2013, USA Today ranked block masonry as number 5 on their 

list of top 10 disappearing jobs in the USA. It is essential for the 

future of our infrastructure and our economy that we reverse this 

trend. That is why I am proud to be a cosponsor of this bill. By 

providing the masonry industry the ability to raise funding necessary to support research, education, and promotion, companies 

will have the needed resources to successfully develop, implement 

and manage programs needed to increase sales and expand markets. 

The bill makes strides toward a more prosperous America for 

Hoosiers, and I am glad we are holding this hearing today, Mr. 

Chairman, so we can learn more about it. 

With that said, Mr. Rusco, I would like to ask you, based on 

GAO’s research, how have Federal agencies overseeing checkoff 

programs validated or verified the eligibility of producers or manufacturers to participate in such programs? 

Mr. RUSCO. Most of that work would have been related to agricultural checkoff programs. And I don’t have a very comprehensive 

list of that, of all the work we have done there. I could answer that 

question for the record, if you wish. 

Mrs. BROOKS. I would be, because we often, when we think about 

checkoff programs, we typically do think of it with respect to agriculture products. And so I do think that would be helpful to know 

and I also think helpful to know with respect to this industry how 

it would be done. 

35 

Do Federal agencies, if you know, that have overseen checkoff 

programs, do you know if they have an employee on hand with subject matter expertise on the affected commodity to help with the 

oversight and implementation or do you know much about that? 

And if not, could we please receive some information at a later 

time? 

Mr. RUSCO. For the agricultural products, the Agricultural Marketing Service has staff that are specifically designated as administrative and oversight personnel for those programs. They are reimbursed by the programs. They develop expertise and knowledge 

about the programs and the industries over time. So that body has 

a great deal of expertise and specific knowledge about the industries and I think can provide very thoughtful oversight and administration. But it takes some time to develop that. 

Mrs. BROOKS. Well, I certainly hope that we learn from the work 

of previous checkoff programs to advance it. 

So with that, I yield back. Thank you. 

Mr. BURGESS. The chair thanks the gentlelady. The gentlelady 

yield back. 

I believe we are going to have two follow-ups, one from Mr. 

Cardenas, you are recognized for 5 minutes for your follow-up. 

Mr. CARDENAS. Thank you very much, Mr. Chairman. 

I just wanted to take the opportunity to commend a business 

that is right in the middle of the largest populated county in the 

country, which is Angelus Block in LA County. It just so happens 

that it is in Sun Valley in my district. And it is serendipitous that 

that is where my father used to take me when he used to buy his 

block when we used to make block walls around the neighborhood 

where I used to work with my father. 

But I just wanted to give a shout-out to the Antonini family, who 

it has been in their family for generations. And they happen to be 

the largest manufacturer and supplier of concrete masonry units in 

all of southern California. And it was just wonderful to have the 

opportunity when I was a little kid to look up to my father and the 

former father-owner of the business and listen to them transact 

and for them to continue to serve the community for generations 

now and for me to be able to give service back to them by being 

hopefully a conscientious Member of Congress trying to figure out 

how we are going to make this legislation good, and hopefully we 

can bring it to fruition so that the industry could get the representation it is asking for. 

So I just wanted to say thank you to Angelus Block for their generations of work. And with all due respect, it is not lost on me that 

when you look at the concrete jungle of Los Angeles with 10 million 

people, that is a lot of masonry over the decades that they have 

been one of the suppliers of. 

So I yield back. Thank you very much, Mr. Chairman. 

Mr. BURGESS. The chair thanks the gentleman. 

The gentleman yield back. 

I recognize myself for 5 minutes for follow-up. 

Along that same line, I would recognize the contributions of 

Acme Brick in north Texas. Certainly the best thing to have 

around your house, as I have known growing up, and every house 

36 

I have lived in, in Denton County, Texas, has been indeed built out 

of Acme Brick. 

Ms. Herbst, I wanted to ask you, in your prepared testimony you 

reference the International Trade Administration. Is that part of 

the Department of Commerce? 

Ms. HERBST. Yes, it is. 

Mr. BURGESS. And you note that it is charged with promoting the 

export of United States goods and services in foreign markets and 

ensuring fair trading and compliance with trade laws and agreements. Is that correct? 

Ms. HERBST. That is correct, yes. 

Mr. BURGESS. So if this checkoff program were to proceed and if 

the moneys were to actually go out, are there precautions that you 

must take or that the Department must take in order to ensure 

that this is all done in compliance with the World Trade Organization, such that these checkoff moneys are not seen as subsidies 

that would unfairly put our companies that are competing with 

other companies overseas? 

Ms. HERBST. That would be correct. We are responsible for ensuring that we don’t do anything that would put our companies in 

conflict with international law, yes. 

Mr. BURGESS. And then is the converse true? Are you also 

charged with looking at materials that may be subsidized by other 

countries that are then unfairly sold in our markets in this country? 

Ms. HERBST. Yes, the International Trade Administration does 

have an enforcement responsibility, particularly when companies 

bring forward and ask us to investigate a potential case of a dumping. 

Mr. BURGESS. Let me just, and this is really unrelated to what 

we are talking about this morning, but again, I so rarely get a 

chance to talk to someone from the Department of Commerce I 

want to use the time wisely. 

It came to my attention in the district that there are people who 

manufacture and install granite countertops in housing and apartments, but builders can actually buy the finished and assembled 

product from a Chinese source cheaper than they can purchase the 

materials and build it. So the competitive balance therefore goes to 

the foreign company. 

And their question to me is, is someone looking out for their best 

interest if a builder can simply buy a prefinished granite counter 

top from a Chinese source and there is no way that the guy who 

buys the slab and then employs the person to cut it and put it together, there is no way that they can be competitive other than of 

course obviously the superior quality of workmanship that exists 

with every trade in north Texas and Denton County in particular. 

Is that something your office would be in charge of? 

Ms. HERBST. Yes. I could offer that if we could work perhaps 

with your staff and follow up on that with them, we would welcome 

that. 

Mr. BURGESS. I would welcome that. I would like that very much. 

That concludes my question. Is there any follow-up question from 

either side of the dais? If, not that will conclude the questions for 

this panel. I want to thank both of you for participating today. And 

37 

we are going to take the briefest of recesses while we set up for 

the next panel. Thank you very much. 

[Recess.] 

Mr. BURGESS. The subcommittee will come back to order. And I 

do want to thank you all for your patience. Thank you for the quick 

turnover on the panel. We do want to try to get through as much 

as we can, because there will be votes on the floor. And if possible, 

if we can conclude and not have to hold you over, that would be 

my goal. 

But I do want us to move into our second panel. We will follow 

the same format of the first panel. Each witness will have 5 minutes for an opening statement, and then you will have questions 

from the members. 

For our second panel I want to welcome the following witnesses: 

Mr. Major Ogilvie, the general manager for Ready Mix USA; Ms. 

Kate Offringa, president of the Vinyl Siding Institute; and Mr. 

Keith Waide, president of Ruby Concrete Company. 

We will begin our second panel opening statements with Mr. 

Ogilvie. You are recognized for 5 minutes for an opening statement, 

please. 

STATEMENTS OF MAJOR OGILVIE, GENERAL MANAGER, 

READY MIX USA, LLC; KENT WAIDE, PRESIDENT, RUBY CONCRETE COMPANY; AND KATE OFFRINGA, PRESIDENT, VINYL 

SIDING INSTITUTE INCORPORATED 

STATEMENT OF MAJOR OGILVIE 

Mr. OGILVIE. Good morning. My name is Major Ogilvie. I work 

in Birmingham, Alabama with the USA Family of Companies. We 

are a CEMEX Company providing building materials to the construction industries. I am involved in many parts of our business, 

primarily in our concrete masonry operations, but also with our cement, aggregate, ready-mix, and other manufactured concrete products. 

Previously, I served as a general manager for our concrete masonry business, Block USA. Today I am here to testify as a representative of our U.S. concrete masonry industry. 

In October 2010, and after 2 years of study by members of our 

industry to determine the best way to better and more consistently 

fund important initiatives for our success in the future, I was honored to be asked to lead our industry’s effort to pursue the creation 

of a commodity checkoff program to support much-needed research, 

education, and promotion efforts for our products. And I am honored to be with you today and to address the merits of H.R. 985. 

I would like to thank Chairman Burgess and Representative 

Schakowsky for their role in making this hearing possible. And I 

would like to thank the lead sponsors of the bill, Representative 

Brett Guthrie and Representative Kathy Castor, for their leadership. 

Let me outline the nature of our industry and the role that our 

product plays in construction. Concrete masonry is not just an 

American industry, it is truly a local industry. Concrete masonry 

manufacturing plants are located in every State and territory in 

the U.S. 

38 

While the marketplace continues to be challenging today, the 

vast majority of our some 350 U.S. Concrete masonry-producing 

companies remain as they have more than 100 years, as familyowned operations. Well over 90 percent of these companies are 

classified as small businesses, with annual plant sales revenue of 

concrete masonry products in the $2 million to $3 million range. It 

was for industries like ours that commodity checkoff programs 

were originally created, and this legislation does not change the bid 

process, the method our products are sold in the marketplace. 

The jobs created by our domestic concrete masonry companies 

are not outsourced overseas. All our plants are truly local businesses that support high-paying local jobs and generate tax revenues for our cities, counties, and states. The concrete products we 

manufacture are used directly in the construction of local schools, 

homes, hospitals, hotels, apartments, office buildings, shopping centers, and municipal buildings, mostly within a 75-mile radius due 

to the weight and the transportation cost. And our local impact 

goes well beyond the manufacturing plant. Also within a 75-mile 

radius, we create local jobs and revenues for our raw material suppliers, as well as our craft workers, the masons who install our 

products in the wall. 

Like other segments of the construction industry, business has 

been slow to rebound. Over the past 7 to 9 years, many plants have 

closed their doors and others are still fighting to return of profitability. A national study—thank you, Mrs. Brooks—by CNBC says 

our industry is still among the 10 worst hardest hit by the construction downturn. Demand for our products has declined and is 

still soft, layoffs in our industry hit hard, directly affecting our 

local economies. 

So how do we turn it around? That is why we are here today. 

We believe this program will spur and stimulate jobs as well as 

create new innovations in our industry, which will help both our 

construction industry partners and ultimately the American consumer. 

The public will benefit from successful implementation of this 

program through the construction more energy-efficient, more durable, more cost-effective, and stronger buildings. Like many of 

you, I have personally seen the impact of natural disasters and the 

devastation to homes and structures from the 2011 Alabama tornadoes. Research and education coming from this checkoff program 

will help minimize the impact on communities from these events 

and reduce economic losses by helping designers, owners, and 

builders to make better use of concrete masonry attributes. 

Our industry has worked hard to share the need for this legislation to our local congressional representatives. Over the last 2 

years, hundreds of our industry members, including our suppliers 

and customers, have traveled to Washington to tell their story, 

meeting with over 500 House and Senate offices. We have hosted 

over 50 Members of Congress and staff with plant tours in their 

districts. Our efforts resulted in 267 cosponsors during the 113th 

Congress, and so far in the 114th we have over 160. Our support 

is very bipartisan. 

39 

Thank you for considering H.R. 985 and its ability to enable our 

industry to help ourselves, to create new high-wage jobs here at 

home, and ultimately improve our communities. 

Thank you, Mr. Chairman. 

[The prepared statement of Mr. Ogilvie follows:] 

40 


97854.019
41 


97854.020
42 


97854.021
43 

Mr. BURGESS. The chair thanks the gentleman. The gentleman 

yields back. 

Ms. Offringa is recognized for 5 minutes for an opening statement please. 

STATEMENT OF KATE OFFRINGA 

Ms. OFFRINGA. Thank you very much. 

Mr. Chairman, Ranking Member Schakowsky, members of the 

committee, thank you for the opportunity to testify today at this 

hearing on H.R. 985. My name is Kate Offringa. 

I have the honor to serve as president of the Vinyl Siding Institute here in Washington. We are the trade association for manufacturers of vinyl and other polymeric siding and suppliers to our industry. Vinyl siding manufacturing is a $2 billion industry that 

provides quality manufacturing jobs in this country. Further, our 

industry is an important part of the overall vinyl industry in the 

United States, a $54.5 billion industry with nearly 3,000 vinyl-producing facilities, 350,000 employees, 70 percent of whose products 

go into buildings and construction. 

On behalf of our association’s 44 member companies, I want to 

convey the Vinyl Siding Institute’s opposition to H.R. 985. We oppose this bill for four primary reasons. And, again, I appreciate the 

opportunity to elaborate. Those are: One, concrete masonry industry is free to do collect research, education, and promotion of its 

products through its multiple trade associations; two, Federal sponsorship of a checkoff program amounts, in our view, to a subsidy 

for the concrete masonry industry; three, this bill would create a 

nonlevel playing field for competitive products like those manufactured by the companies that I represent; and, four, creation of a 

checkoff program for the concrete masonry industry will set a 

precedent, encouraging manufacturers of all sorts of products in 

our sector to seek similar assistance from the Federal Government. 

If you would, please allow me to address each of these points in 

turn. One, the concrete masonry industry, being free to do collective research through its trade associations: H.R. 985 is a bill designed, and I quote from the text, ‘‘to enable concrete masonry 

product 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.’’ To 

quote further from the notice for this hearing, the intent is boosting overall sales and production of a particular good without reference to a specific brand. 

Mr. Chairman, members of the committee, I respectfully submit 

that that is the role of a trade association simply and well stated. 

We understand that the bill was introduced at the request of the 

masonry industry in part because many firms in that industry do 

not belong to organizations that contribute to concrete masonry research. Free-ridership is a problem common to trade associations 

in every industry. The challenge is upon us, as associations, to 

show value to our members and encourage their participation. The 

free-ridership problem is not unique to the concrete masonry industry and does not, in our view, warrant government intervention. 

Number two, Federal sponsorship of a checkoff program 

amounts, in our view, to a subsidy for the concrete masonry indusVerDate Nov 24 2008 14:28 Jan 19, 2016 Jkt 037690 PO 00000 Frm 00049 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 114\114-65 CHRIS
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try. As stated, the intent of H.R. 985 is to provide a federally sponsored mechanism that will assess the concrete masonry industry 

for funds to conduct research and promotion for its products. As 

competitors to that industry, my member companies oppose this 

bill, which will, if enacted, provide the concrete masonry industry 

with substantial, federally sponsored advantage over the research 

and promotion activities of our industry, thus providing the concrete masonry industry with an unfair, competitive advantage, in 

our view, over the products and systems of our industry. 

The report accompanying S. 429, an identical bill considered by 

the Senate in the last Congress, stated that the cost of the Federal 

Government to oversee the proposed checkoff program would be $4 

million a year. That sum is greater than the annul budgets of 

many trade associations, including the Vinyl Siding Institute. And 

while H.R. 985, as drafted, provides for Department of Commerce 

recovery of administrative costs from the industry assessment, we 

do not believe that the total cost to the government can be recovered efficiently or effectively and are, therefore, concerned that this 

program would not be cost-neutral to the American taxpayer. 

And I would add that even if total cost recovery of government 

administrative expenses was achieved, the government sponsorship 

of the program appears, in our view, to be a seal of approval for 

the concrete masonry industry and, thereby, constitutes an advantage for them in our view. 

Number three, this bill would create a nonlevel playing field for 

competitive products like those manufactured by the companies I 

represent. We understand that checkoff programs are common in 

the agriculture industry. And we would like to draw a distinction 

for you between that industry and the building products industry 

as it applies to this argument. In the eyes of consumers, beef is 

generally beef and milk is generally milk with no obvious differentiation between producers. That ensures the ease with which research and promotional programs can be funded and implemented 

without causing competitive disadvantage to any producer. That is 

not the situation for the buildings products industry. 

There is a host of differences between concrete masonry and 

other cementitious siding products, vinyl siding, and other types of 

cladding for buildings. The inherent differences in our products create real competition between our categories within the broader 

building products industry. Federally backed promotion of one type 

of building product over another would amount to the Federal Government picking a winner in the eyes of the consumer is our concern. We believe the market should do that. 

Finally, number four, creation of a checkoff program for the concrete masonry industry will set a precedent, encouraging manufacturers of all sorts of products in building construction to seek similar assistance from the Federal Government. That is a slippery 

slope. 

In conclusion, the Vinyl Siding Institute and its members oppose 

H.R. 985 for the subsidized advantage it would give one competitor 

above all others. We ask that you consider the adverse effect passage and enactment of this bill would have on our industry. And 

we urge you to reflect on the dangerous precedent the legislation 

45 

would set that could lead to any number of industries requesting 

similar checkoff programs. 

Thank you, once again, for the opportunity be heard today. And 

I would be happy to address any questions you have for me at the 

appropriate time. 

[The prepared statement of Ms. Offringa follows:] 

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Mr. BURGESS. The chair thanks the gentlelady. 

The chair recognizes Mr. Waide for 5 minutes for your opening 

statement please. 

STATEMENT OF KENT WAIDE 

Mr. WAIDE. Good morning. It is a privilege to testify in front of 

this subcommittee today on behalf of my company and others like 

mine. My name is Kent Waide. And I represent Ruby Concrete 

Company of Madisonville, Kentucky. 

I believe our company is like many others within the concrete 

masonry industry. We are family owned, and we are small. It 

began in 1869 and has been family operated for 146 years. We currently have three generations from our family working at Ruby 

Concrete Company. And our business is recognized as one of the 

oldest in Kentucky. I am proud of the role our company has played 

in our region’s history. We supply the masonry products used to 

build our local schools, fire stations, home centers, grocery stores, 

and other facilities that our community uses every day. We have 

also supplied public works projects, including roads, bridges, courthouses, and judicial centers. In addition, our products were used to 

build barracks for the 101st Airborne Division at Fort Campbell. 

We employ 16 people directly and create jobs both upstream for 

our vendors and downstream to our customers. Our business is 

small, innovative, resourceful, and aggressive. During the construction recession, we reinvested our capital to create one of the most 

modern concrete products plants in the U.S. The construction materials industry is changing however. 

Companies like mine struggle to compete with other building materials that have different demographics. We welcome competition. 

But we seek a mechanism to level the playing field for our commodity industry. If we manage our resources wisely, Ruby Concrete 

can invest in modern equipment and support our employees. But 

a company of my size simply does not have the resources to educate, research, and promote our commodity products throughout a 

broad-based market. We belong to associations that perform good 

work on our behalf. 

But I believe a commodity checkoff program is necessary if we 

are to collectively invest more fairly and support growth that will 

benefit all of us in the industry. Many of you know our product as 

a gray cinderblock. But it is actually a very versatile design tool. 

Producers like mine use a wide range of natural, manufactured, 

and recycled aggregates that are readily found throughout the 

country. Concrete blocks are strong enough to support tall buildings and protect families from flying debris in hurricanes and tornadoes. They are noncombustible and prevent the spread of fires in 

buildings. They also survive forest fires. 

Reinforced concrete masonry protects people and assets in earthquakes and wind events. It also shields against explosions and bullets, which is why our military uses concrete masonry to build 

mock cities in order to train soldiers in urban assault and terrorism defense. Concrete masonry is environmentally friendly. It 

does not rot or mold. And it is not subject to termites. 

It has terrific thermal mass properties that reduce the amount 

of insulation needed to meet energy codes. It can be made in a 

52 

rainbow of colors to allow creative designs that integrate texture 

and imagination. For example, our company was commissioned by 

a university to produce a purple concrete block that was used to 

build a signature wall on the campus of the school with their certain colors. 

These properties, design qualities, and uses resulted through 

many years of work and testing. We have learned from each other 

and built on shared knowledge. But the old system of learning and 

communicating is ineffective in today’s world. Technology, speed, 

and resources are necessary for our industry to advance. And we 

currently cannot keep up. We are losing ground. We are losing producers. And we are losing local jobs. 

I have spoken with many concrete block producers across the 

country. And we agree that our industry needs a new approach to 

support education and research that fosters new technologies and 

broad-based promotion. Our industry will leverage the outcomes of 

these investments to support the construction of high-performance, 

more sustainable, and cost-effective building solutions. That is why 

we urge the committee to pass the Concrete Masonry Research, 

Education, and Promotion Act, H.R. 985. Thank you for your time. 

And I look forward to addressing your questions. 

[The prepared statement of Mr. Waide follows:] 

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Mr. BURGESS. The chair thanks the gentleman. 

And that concludes the opening statements of our second panel. 

I am going to yield to Mr. Guthrie first, 5 minutes for your questions, please. 

Mr. GUTHRIE. Thank you, Mr. Chairman, for yielding. I appreciate that very much. I appreciate all three of you being here to testify, particularly Mr. Waide from our beloved Commonwealth. Welcome to Washington today. 

My first question is for Mr. Ogilvie and Mr. Waide. Isn’t it true 

that the bidding and building process associated with concrete masonry construction would limit the impact on the resulting costs of 

the building? 

Mr. OGILVIE. I would agree with that statement, that between 

the building process or the bid process and other costs associated 

with building any structure would basically eliminate the assessment up charge. The assessment by design is designed to be so tiny 

as to not affect the overall cost of a building. And so we would not 

see that as a—— 

Mr. GUTHRIE. I will just ask you a follow-up and then you both 

can answer. I know that you have been active in D.C. quite a bit 

on this issue. So your customers obviously know you have been 

here talking about assessments on the industry and so forth. Has 

your customers reacted to this with concern like, Major, you are up 

there doing this; is it going to add cost to us? What are your customers saying about it is my question. 

Mr. OGILVIE. They have. They recognize the need that our small 

industry has. And just like Kent was expanding on at the end of 

his testimony, we have got to do something for our industry to help 

transform it and get it into a modern technology that meets the 

marketplace needs. We absolutely have got to do that. Our customers recognize that. Our suppliers recognize that. We have enjoyed great support from both our suppliers and our masonry contractors coming up and telling our story to Members of Congress. 

Mr. GUTHRIE. Thank you. 

Mr. Waide? 

Mr. WAIDE. Representative Guthrie, I would concur with Mr. 

Ogilvie in that it truly is recognized as a job bill in that our customers need support in the education and research of this commodity product so that they can continue to build their businesses, 

and we can work together to do that. 

Mr. GUTHRIE. OK. In the text of the bill, we talk about funding 

research in your industry. Could either of you two elaborate on the 

kind of research that will be, that you envision would be used by 

the industry? 

Mr. WAIDE. I would be glad to address that. One example is actually going on at the University of Louisville right now. And they 

have a center there that is focusing on the benefits of thermal mass 

which I addressed in my statement regarding energy codes. Concrete masonry has terrific thermal mass properties that when used 

correctly and designed correctly can create a much more environmentally friendly building. And with all the LEEDs credits that are 

being sought after in the design community, that could add to the 

benefits of the buildings today. 

Mr. GUTHRIE. Do you have a comment on that, Mr. Ogilvie? 

57 

Mr. OGILVIE. Mine are for in the marketplace, Representative. 

We have needs to help our customers, the designers, the builders, 

the developers, realize the values of our products. One of those and 

some of the low-hanging fruit of investments we will make, design 

software in the marketplace today, this is an item that would be 

$3 million, $4 million, $5 million to purchase and would take that 

amount to implement over the course of time. But during the outreach of our industry’s effort, we have learned that software today 

is out of date. So one of the low-hanging investments we would 

make early on is investing in updating our software because we 

have found that in the marketplace, because we don’t have updated 

software, the economics against our products are working against 

us in a pretty significant way. 

Mr. GUTHRIE. I understand that construction practices are different throughout the country. We have a vast continental country. 

What you build in Florida, what you build in Birmingham, what 

you build in our mountains, it might be different if you are on the 

coast of Florida versus in our beautiful mountains. So how does 

this bill ensure that the funding raised will support local initiatives 

given that we have vast differences? 

Mr. OGILVIE. Well, as it was pointed out a little bit earlier, in the 

act, in the bill, 50 percent of it has to be spent in the region that 

it is raised in. So that will guarantee that. In looking at the investment model we are putting together, the regional requests will be 

held first, followed by our state, regional, and national. They will 

be done in that order so as to give the state, the local area, the top 

priority for the best investment, which, in our business, states, the 

demographics of states are very important. 

Mr. GUTHRIE. Thank you. 

My time has expired. I yield back. 

Thank you for your testimony. 

Mr. BURGESS. The chair thanks the gentleman. 

The gentleman yields back. 

The chair recognizes Ms. Schakowsky for 5 minutes for questions 

please. 

Ms. SCHAKOWSKY. I think people listening to this debate would 

wonder how much of taxpayer dollars are involved in this legislation. And so I wonder, Mr. Ogilvie, in promoting concrete blocks 

and promoting your industry, are there taxpayer dollars, or is the 

industry providing the funding for the promotion? 

Mr. OGILVIE. Well, good question. First of all, as the legislation 

states, we are responsible for all the costs of the government, both 

administrative and personnel. We believe that the legislation, just 

because of the nature of our industry, meaning very concentrated 

in a local standpoint, will create additional economic activity, 

which will increase the tax revenue, both—for all layers of government, city, county, state and Federal. So we believe it will be a tax 

advantage, a tax increase as far as tax receipts go. 

Ms. SCHAKOWSKY. I think that is really important for people to 

understand that the taxpayer is not on the hook for promoting your 

industry. 

And, Ms. Offringa, do you see anything in this legislation that 

would prohibit yours from asking for the same kind of program? 

Ms. OFFRINGA. No. I don’t. 

58 

Ms. SCHAKOWSKY. So we actually have heard from a number of 

building material industries that they may want to seek that. I 

just, I think it is important also to make the point that this is not 

to the exclusion of, but it is focused on an industry that has done 

a lot of homework and a lot of organizing and a lot of thought into 

a piece of legislation. And we may very well see others that, that 

come forward. 

Ms. OFFRINGA. I agree with you. Thank you. 

Ms. SCHAKOWSKY. Actually, that is all I really have to say. 

So I am going to yield back my time. Thank you. 

Mr. BURGESS. The gentlelady yields back. 

The chair thanks the gentlelady. The chair recognizes Mr. Harper from Mississippi, 5 minutes for questions please. 

Mr. HARPER. Thank you, Mr. Chairman. 

Thanks to each of you for being here. And, of course, Major 

Ogilvie, it is good to see you again and reflect on all the years I 

watched you as the all-American running back at Alabama, two national championships and two MVPs and lots of big plays and pretty special deal there. You will have to tell us some Bear Bryant stories later. 

Hey, you’ll remember the first time I saw you a couple years ago, 

I said, Number 42 right off the bat. So remember that. So we are 

glad to have each of you here. 

Mr. OGILVIE. Thank you. 

Mr. HARPER. Mr. Waide, how would you address concerns that 

the assessment will disproportionately impact smaller concrete masonry producers? 

Mr. WAIDE. In disproportionately impacting them—— 

Mr. HARPER. Do you think there is a problem, there will be a 

problem for the smaller concrete masonry producers with this assessment? Do you think it is something that they will be able to 

manage? 

Mr. WAIDE. Everyone will be able to manage this. The amounts 

that we are looking at as far as the assessment is concerned, as 

Mr. Ogilvie pointed out, is very small in relation to the product 

costs and/or price. So it is not onerous in any way. 

Mr. HARPER. Thank you. 

Ms. Offringa, if I could ask you a question, I am looking at your 

Web site, it lists all of your siding competitors to vinyl. I didn’t see 

concrete masonry on that list. So why, today, is it a primary competition concern? 

Ms. OFFRINGA. Thank you. That is a very good question. I appreciate the opportunity to clarify that. Our concern is that while this 

program is designed for concrete masonry and the product you see 

there, that the promotional efforts will spill over into general promotion of cement and cementitious products. And fiber cement 

cladding is a major competitive threat to vinyl siding. And a big 

concern of ours is the spillover effect where a program designed to 

promote concrete block could end up promoting concrete and other 

cementitious products generally speaking. 

Mr. HARPER. If I could ask if either Mr. Waide or Mr. Ogilvie 

have a response or care to respond to that competition issue? Or 

shall I move on? 

59 

Mr. OGILVIE. I can speak specific. I can’t speak to other potential 

checkoffs or checkoffs in general, I can only speak to ours. What 

our checkoff will cover, concrete masonry checkoff, concrete block. 

It would not relate with any, with competition within this industry 

if that was your question. 

Mr. HARPER. OK. Thank you. 

In the interest of time, Mr. Chairman, I am going to yield back. 

Mr. BURGESS. The chair thanks the gentleman. The chair recognizes the gentlelady from Florida, Ms. Castor, 5 minutes for questions please. 

Ms. CASTOR. I want to thank you, Mr. Chairman and Ranking 

Member Schakowsky for holding this hearing today. You are responding to local small businesses all across the country that oftentimes don’t have a big voice here in Washington. So I want to 

thank you for taking the time for this committee hearing today. 

And I would also like to thank my colleague and cosponsor Brett 

Guthrie. He is a good friend. He has been a pleasure to work with 

on this bill and his staff as well. Representative Guthrie and I have 

introduced this bill together for the last two Congresses. And I am 

really pleased that we have garnered so much bipartisan support. 

Last Congress, we had 267 cosponsors. And this year we already 

have 159 cosponsors, including almost 30 of our Energy and Commerce colleagues. This bill is an industry-driven bill that will give 

concrete masonry businesses the opportunity to decide whether or 

not they want to institute a commodity checkoff initiative. If approved, it allows the concrete block industry to assess itself to pay 

for research and advertising at no cost to taxpayers. 

The concrete masonry industry is made up of primarily small, 

local businesses. Most block producers are small and local due to 

the huge weight of concrete block and the high cost of transportation. That is why they are so spread out all across the country. 

And virtually every congressional district is home to at least one 

producer and multiple masonry contractors. 

One of the reasons this bill and this initiative got my attention 

is that we are seeing an increase in the number of extreme weather 

events all across the country. And in my home State of Florida and 

throughout the entire Gulf Coast, we are particularly sensitive to 

tropical storms and hurricanes. Mr. Ogilvie, you mentioned the tornadoes in Alabama. You don’t have to look back in the news pages 

or news reports to see reports of fires, floods. And I think that promotion of this industry is very important to making sure our structures are sturdy, that they can withstand the increasing intensity 

of these extreme weather events. Mr. Ogilvie, can you elaborate on 

the role concrete masonry could play in creating a more resilient 

construction environment? And how could this bill allow the concrete industry to better research and advertise products that can 

better withstand volatile weather conditions? 

Mr. OGILVIE. Thank you, Representative Castor. 

That is a big subject for us that requires, particularly on the research and the education part, resilient construction and the benefits that it can. That is a gigantic play for this industry, one of the 

areas that we will work toward and continue to work toward with 

this concrete masonry checkoff program. Wind resistance is a true 

value of our product. It offers the highest wind resistance towards 

60 

tornadoes or hurricanes of products that are out there. And we will 

work more to not only conduct that research that will be required 

but also work within the colleges, the universities to educate the 

designers and the designers coming out in the marketplace to help 

us further resilient construction. 

Ms. CASTOR. In my home state we have had a real crisis after 

the active hurricane season of 2004 relating to property insurance. 

And I also see this initiative as a benefit for homeowners and commercial property owners all across the country. If they have 

sturdier structures, over time, they are going to be able to access 

property insurance at more affordable levels. 

Mr. Waide, do you have a comment on how we can promote resilience and stronger structures through this concrete checkoff initiative? 

Mr. WAIDE. I think you have pointed out the major areas, not 

only through the building side but also through insurance and that 

type. But the biggest thing that this is going to do is allow us to 

innovate and create stronger properties in our product, as well as 

be able to communicate that to the design community and integrate that into standard building practices. We have manufactured 

concrete blocks in some ways the same way for a long, long time. 

But technology has advanced to the point where we want to take 

advantage of that. And we feel like if we can get the funding to be 

able to do the research and put that technology to work for our industry, we can create better products that create better buildings. 

And, in turn, it is better for the consumer and for all of us. 

Ms. CASTOR. Thank you very much. 

And thank you again, Mr. Chairman, for calling this hearing. 

Mr. BURGESS. The chair thanks the gentlelady. 

The gentlelady yields back. 

The chair recognizes the gentlelady from Indiana, Mrs. Brooks, 

5 minutes for questions please. 

Mrs. BROOKS. Thank you Mr. Chairman. I am going to turn the 

attention back to the jobs in the industry. 

And, Mr. Ogilvie, do you know how many jobs are supported by 

the concrete masonry products industry today roughly? 

Mr. OGILVIE. Yes, ma’am. The Department of Commerce does not 

distinguish between brick and block when they do their census. 

And these are 2012 numbers. But there are roughly, within brick 

and block operations, about 15,000 to 18,000 were the numbers 

that we looked at and we can estimate. And that is 2012 numbers. 

Mrs. BROOKS. And do you have any sense as to whether or not 

you expect the number to grow with the establishment of a checkoff 

program? How will a checkoff program assist with job creation? 

Mr. OGILVIE. Yes, ma’am. Number one, this downturn, this recession has hit our industry particularly hard because we are family 

businesses and to strive through that has been particularly difficult. We don’t have access to large public capital. But the recession is not going to fix the challenge, the transformation that we 

see as an industry we need. We need to modernize our industry, 

be able to get up to transform it with new innovations, as Kent 

said. But we need to be able to transform it, like I was sharing a 

little bit earlier, with design software that helps our product be 

more competitive in the marketplace but also bring it up to code 

61 

and allow us to change codes sooner than we have been able to do 

so in the past because the design codes, the design systems that 

are out there are penalizing our product in a wall system. This 

block is $1.20, $1.45 nationwide. And we are talking about a penny 

assessment and enough that will help us to put a design system 

that in the wall, this is anywhere from $12 to $15. We could save 

100, 200 times that with updated design systems alone. Did that 

make sense? 

Mrs. BROOKS. And thank you for bringing that block for demonstrative purposes today. It is helpful. 

Mr. Waide, can you share with us what are the main challenges 

facing the growth of the concrete masonry industry today? What 

are kind of the biggest challenges that you see that will serve as 

obstacles, that do serve as obstacles, you know, to strengthen your 

position in the market? 

Mr. WAIDE. Well, we have got a good product that is time tested. 

The problem that we face as producers is that I, individually, cannot put the resources in to innovate and research in ways to improve the product and put it in the marketplace today in a viable 

way. So that is why we seek the checkoff program so that we are 

not individually trying to do that, that we collectively, as an industry, can use technology for our benefit. 

Mrs. BROOKS. Can you explain, though, how an improved product 

through R&D and through checkoff, can you explain how you believe that could increase job creation in the future and increase the 

strength of your industry and how we can connect those? 

Mr. WAIDE. Again, through technology, I can learn how to build 

a better block. And in that process, I can communicate with designers who are seeking those better performing building products. And 

if they are looking at and specify that product, then I create jobs 

because I am feeding the building industry with what they are 

needing, what they are wanting. 

Mrs. BROOKS. Thank you. 

I yield back. 

Mr. BURGESS. The chair thanks the gentlelady. The gentlelady 

yields back. 

The chair recognizes the gentleman from Oklahoma, Mr. Mullin, 

5 minutes for your questions please. 

Mr. MULLIN. I was just fixing to tell Mrs. Brooks she was using 

some big fancy words to describe a cinderblock a while ago. I have 

absolutely busted out numerous of those and actually installed a 

lot of them too. And I do appreciate bringing a visual aid. That is 

what we call that. 

Mrs. BROOKS. I am a lawyer. 

Mr. MULLIN. That helps explain that. I know. We understand. I 

am a plumber. 

Anyway, Ms. Offringa, I was wanting to kind of visit with you 

just a little bit. As a business owner, I mean, I have competition 

that enters in every day. We have companies ranging from plumbing all the way to banking and even a restaurant, which that is a 

whole animal in itself. And competition is something that comes in 

the market every single day. And as a business owner, if I am concerned that someone is going to get the competitive edge, it is not 

62 

that I go out and I try to keep that competitive edge from happening; I go out and make myself stronger. 

So I am kind of more interested in your perspective on why we 

are trying to incentivize safety. What is a better product? What is 

a better way to do things? Is there a better option out there? How 

can we increase safety? How can we save money for the consumer? 

If your product is out there and it is able to compete, it is able to 

compete, but there is always going to be a need for your product. 

And so I guess I am kind of trying to get your point of view of how 

do you think this is going to put you at a negative disadvantage? 

Ms. OFFRINGA. Thank you for your question. 

We are not afraid of competition. That is what we do, the industry I represent, and keep doing it. And that is the American way. 

But our position is that a government-backed checkoff program 

would appear to be a seal of approval on a particular type of product in the buildings industry and have spillover effect, as I said, 

to other types of cementitious products that—— 

Mr. MULLIN. But isn’t that a far reach? You are assuming something that we don’t even know. That is not even the point of this 

legislation. 

Ms. OFFRINGA. Well, the position we are taking on it is they are 

free as an industry to do all those things, and they should do them. 

They should strengthen their industry and do R&D and promote 

their products. They should do them. And they are free to do them 

through their trade associations. And that is what we do. 

Mr. MULLIN. But we have helped, as a government body, we have 

helped a lot of industries innovate. We have also hindered a lot too. 

I get that. But we, this is kind of a step that we try, we tried to, 

supposedly, create an atmosphere in Washington, D.C., which this 

is kind of counterproductive, but we are supposed to be creating an 

atmosphere for entrepreneurs to thrive, an opportunity for them to 

build, to succeed. Lately, through regulations, you have probably 

heard me rant on this before, we haven’t. But this is one that we 

are. 

And I understand where the association is taking a stand. But 

I am having a hard time agreeing because I have been in construction my whole life. This is something that I could understand a 

point of view if it wasn’t just making an assumption. And you are 

assuming that this is going to put the industry at a negative advantage. But can you see the positive in it too? 

Ms. OFFRINGA. Well, those are our concerns. We are happy to 

compete on a level playing field. 

Mr. MULLIN. No, I am not saying, I am saying can you see the 

positives? You, personally, can you see the positives in this? 

Ms. OFFRINGA. Of government-sponsored programs that—— 

Mr. MULLIN. No, I am talking about specifically what we are 

talking about here today. 

Ms. OFFRINGA. I understand checkoff programs and what they 

accomplish in the agriculture industry. And I think there is a difference when you start to apply them to manufactured products. 

And that would be something new for the Department of Commerce. We have concerns about the impact and how it would work 

out. But if it is something that you decide to do, then we think that 

63 

lots of other industries are going to come ask you for the same 

thing. 

Mr. MULLIN. Let me ask you, is there a way we can help your 

industry? Because I am all about creating an atmosphere for industries to thrive in. Is there a way that we can help your industry 

then? 

Ms. OFFRINGA. Well, if this is a successful program, maybe we 

will be back next year and have a different conversation then about 

these types of promotional—— 

Mr. MULLIN. Which is my point. It is OK so often that we, that 

we help as long as we are helping me but not others. And if there 

was an opportunity that came along for us to help you, you would 

be OK with that. But what if these guys here want to oppose that? 

Do you understand my point? We are here to help. And we want 

to create an equal playing field. I am not wanting to pick winners 

and losers. So if an opportunity comes up, Ms. Offringa, come to 

my office. Let’s see how we can work with you, OK? 

Ms. OFFRINGA. Thank you. 

Mr. MULLIN. Thank you. I yield back. 

Mr. BURGESS. The chair thanks the gentleman. 

And the chair will recognize himself for 5 minutes for questions. 

And I do want to thank all of our members who have stayed with 

us this morning and heard from a very informative panel. 

I want to thank Mr. Mullin for educating me about gas cans. 

Over the Fourth of July holiday, I had the opportunity to buy a 

new gas can and found that I was unable to work the new nozzle 

that is required by the CPSC. So when he referenced the fact that 

sometimes we actually work at cross purposes to the advancement 

of industry, I feel your pain or I felt your pain. So I got the nozzle 

off the old gas can that had a hole in it and switched out. And it 

just leaked a little bit. And I am sure I probably damaged the 

ozone layer more than the CPSC intended for me to. 

Mr. Mullin, I wonder too if you would introduce your guest to the 

committee. 

Mr. MULLIN. I am very privileged today to have my second oldest 

child, which I have five, my second oldest child would be Andrew. 

As adults, so often we get busy in our world, and we don’t actually 

show our kids what we are doing. This job, as we all know, takes 

us away from our family all the time. And the last thing I want 

to do is have my kids grow up thinking this took me away from 

them. So I appreciate the chairman for allowing me to have him 

in the hearing today because if you ever want me see cry like a 

baby, get me talking about my kids. 

Mr. BURGESS. It is so understood. I appreciate the opportunity to, 

perhaps, do that some day. 

And, Mr. Mullin, I might further ask as we get to the conclusion 

of our hearing today, if Andrew would like to take the chair and 

adjourn the subcommittee as we conclude. That would allow him 

to actually participate in the hearing. 

Before we get to that, though, I do have just a few observations. 

Ms. Offringa, it seems like I learned at a very young age from my 

mother that if you build a better mouse trap, the world will beat 

a path to your door. Was she correct about that? That we make a 

better product and people are going to want our product? If I unVerDate Nov 24 2008 14:28 Jan 19, 2016 Jkt 037690 PO 00000 Frm 00069 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 114\114-65 CHRIS
64 

derstood your testimony correct, you are concerned that we may 

interfere with the mousetrap school of economics that was related 

to me by my mother. Am I understanding your concern correctly? 

We are talking about tilting the competitive advantage to a product 

that is not vinyl siding and doing that with a government program. 

I will be honest with you, I share that concern. I do have to wonder 

if that is the correct place and function for the Federal Government 

to be involved. 

I guess the question I would have to the other witnesses is, what 

prevents a voluntary program? And, yes, you are free to take 

money from your members and use that to the advancement of 

your product. I guess the ‘‘trade association’’ was the term of art 

that is used. What prevents that from happening now? What is it 

about your industry that makes that not a viable strategy? 

Mr. WAIDE. Thank you for the question. Our industry has 

worked for many years in trying to voluntarily put together innovation and advancements. The problem with our industry is that, as 

it has been well stated, there is a bunch of us that are spread out. 

And so it is hard to collaborate and get together, even through associations, to do that. 

But, more importantly, the dollars that it takes in order to accomplish meaningful innovation and research is not something that 

we can do just individually or just a few of us. It needs to be a collaboration of all of us. And the checkoff program is well established, not necessarily in this department, but it is well established. And it meets the needs of other commodity industries. And 

we feel like we fit well within the guidelines of that. 

Mr. BURGESS. Yes, sir. I’m sorry. Major, please. 

Mr. OGILVIE. I am going to give you more of the history. First 

of all, we studied voluntary checkoff programs. I am going back to 

2008, 2009. We studied grants. We actually came up here and met 

with a number of Congresses. But the seed was that we recognize 

as an industry we needed to be able to better fund, with all the 

transformation, all the needs going on in the construction industry, 

for concrete block to remain competitive and a viable product. So 

we studied those very quickly between grants and voluntary—voluntary can help you in a short-term issue, topic type thing. But in 

terms of the long-term need that our industry felt like we need to 

move our product into the future, we didn’t feel like voluntary programs were an effective way to do that. That is based on the history and study of voluntary programs that have been in place. 

Mr. BURGESS. And I appreciate that. And I get the fact that your 

industry is widely dispersed over geographic areas. Your products 

are heavy. They are hard to transport. 

Mr. OGILVIE. Right. 

Mr. BURGESS. But it also seems in the day of the Internet that 

some of those problems are, perhaps, manageable. And I don’t 

know. These are just observations. I always worry about setting up 

a new government program. So I do share some of the concerns 

that were expressed today. 

And, Ms. Offringa, you used the word ‘‘subsidy.’’ And you heard 

me talk to our Commerce witness about the concern, if a subsidy 

could be seen as an unfair competitive advantage and whether that 

would get us into difficulties with the World Trade Organization. 

65 

I guess my only other observation is if we set up a checkoff program, I hope that Commerce is prepared to do the necessary oversight to make certain that other industries are not adversely affected and that certainly we remain in compliance with all of our 

obligations under the World Trade Organization. 

Seeing that there are no further members wishing to ask questions, I do want to thank all of our witnesses for participation in 

today’s hearing. 

Before we conclude, I would like to include the following documents to be submitted for the record with unanimous consent: A 

statement for the record on behalf of the Mason Contractors Association of Greater Chicago; a statement for the record on behalf of 

Back Brook Masonry; a joint statement for the record on behalf of 

Featherlite Building Products and the Acme Brick Company; and 

a letter from the National Association of Homebuilders. 

[The information appears at the conclusion of the hearing.] 

Mr. BURGESS. Pursuant to committee rules, I will remind members that they have 10 business days to submit additional questions for the record. I ask the witnesses to submit their responses 

within 10 business days of receipt of the questions. 

I do advise members that there is a vote on the floor. 

Mr. Andrew Mullin, if you will take the chair and read the last 

sentence that I have underlined there and then strike that gavel 

very hard. 

Mr. ANDREW MULLIN. Without objection, the subcommittee is adjourned. 

[Whereupon, at 10:45 a.m., the subcommittee was adjourned.] 

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