```

[Senate Report 114-221]
[From the U.S. Government Publishing Office]

						Calendar No. 381

114th Congress }				       { Report
 2d Session    }                 SENATE                { 114-221        
_______________________________________________________________________
                                                     
             REINFORCING AMERICAN-MADE PRODUCTS ACT OF 2015

                               __________

                              R E P O R T

                                 OF THE

           COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                                   ON

                                S. 1518
                                

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                 March 7, 2016.--Ordered to be printed
       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
                    one hundred fourteenth congress
                             second session

                   JOHN THUNE, South Dakota, Chairman
 ROGER F. WICKER, Mississippi         BILL NELSON, Florida
 ROY BLUNT, Missouri                  MARIA CANTWELL, Washington
 MARCO RUBIO, Florida                 CLAIRE McCASKILL, Missouri
 KELLY AYOTTE, New Hampshire          AMY KLOBUCHAR, Minnesota
 TED CRUZ, Texas                      RICHARD BLUMENTHAL, Connecticut
 DEB FISCHER, Nebraska                BRIAN SCHATZ, Hawaii
 JERRY MORAN, Kansas                  ED MARKEY, Massachusetts
 DAN SULLIVAN, Alaska                 CORY BOOKER, New Jersey
 RON JOHNSON, Wisconsin               TOM UDALL, New Mexico
 DEAN HELLER, Nevada                  JOE MANCHIN, West Virginia
 CORY GARDNER, Colorado               GARY PETERS, Michigan
 STEVE DAINES, Montana
                       Nick Rossi, Staff Director
                 Adrian Arnakis, Deputy Staff Director
                    Rebecca Seidel, General Counsel
                 Kim Lipsky, Democratic Staff Director
           Christopher Day, Democratic Deputy Staff Director
                 Clint Odom, Democratic General Counsel
                 
                 
                 
                 
                 
                                                    Calendar No. 381
                                                       
114th Congress}                                             { Report
                                SENATE
 2d Session   }                                             { 114-221

======================================================================
 
             REINFORCING AMERICAN-MADE PRODUCTS ACT OF 2015

                                _______
                                

                 March 7, 2016.--Ordered to be printed

                                _______
                                

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

                              R E P O R T

                         [To accompany S. 1518]

    The Committee on Commerce, Science, and Transportation, to 
which was referred the bill (S. 1518) to make exclusive the 
authority of the Federal Government to regulate the labeling of 
products made in the United States and introduced in interstate 
or foreign commerce, and for other purposes, having considered 
the same, reports favorably thereon without amendment and 
recommends that the bill do pass.

                          Purpose of the Bill

    The purpose of S. 1518, the Reinforcing American-Made 
Products Act of 2015, is to ensure that there is a single 
national standard for labeling products as ``Made in the 
U.S.A.'' or ``Made in America.''

                          Background and Needs

    The Federal Trade Commission (FTC or Commission) currently 
regulates claims of U.S. origin under its general authority to 
act against deceptive acts and practices under section 5 of the 
Federal Trade Commission Act (FTC Act, 15 U.S.C. 45). Under 
section 320933 of the Violent Crime Control and Law Enforcement 
Act of 1994 (15 U.S.C. 45a), products bearing the ``Made in the 
U.S.A.'' or ``Made in America'' label are required to do so in 
a manner consistent with the decisions and orders of the FTC. 
Since 1997, the FTC has enforced a stringent national labeling 
standard that requires products marked ``Made in the U.S.A.'' 
or ``Made in America'' to be ``all or virtually all'' produced 
in the United States.\1\ Under this standard, marketers 
labeling or advertising a product as ``Made in the U.S.A.'' 
must have a reasonable basis to support the claim. The 
Commission considers three factors in evaluating whether ``all 
or virtually all'' of a product is made in the United States: 
(1) whether the final assembly or processing of the product 
took place in the United States; (2) the portion of the total 
manufacturing cost of the product that is attributable to U.S. 
parts and processing; and (3) how far removed from the finished 
product any foreign content is.
---------------------------------------------------------------------------
    \1\``Made in U.S.A.'' and Other U.S. Origin Claims, Federal Trade 
Commission, 62 Fed. Reg. 63,756 (Dec. 2, 1997).
---------------------------------------------------------------------------
    In 2011, the California Supreme Court allowed a lawsuit to 
proceed wherein plaintiffs challenged a company's ``Made in the 
U.S.A.'' claim under the State's unfair competition law and 
false advertising law, effectively establishing a State 
standard that diverged from the FTC standard. California later 
codified its own ``Made in the U.S.A.'' standard, under which a 
product can bear the ``Made in the U.S.A.'' label in California 
if 95 percent of its contents are domestically sourced. If a 
company can certify that some components are unavailable in the 
United States, then a 90 percent threshold applies. These 
divergent standards raise interstate commerce concerns for 
manufacturers. Most manufacturers do not have the ability to 
control where their products are sold because they sell their 
goods wholesale to national and international distributors. The 
products are then shipped to retailers throughout the country. 
Because of this market reality, many U.S. manufacturers 
eligible to use the ``Made in the U.S.A.'' mark in 49 out of 50 
States and the rest of the world cannot label their products as 
such because they may ultimately reach the more restrictive 
California market.
    S. 1518 would amend the Federal product labeling statute to 
ensure that the current authority of the FTC to enforce ``Made 
in the U.S.A.'' labeling rules preempts State requirements. 
This national standard would allow manufacturers with ``all or 
virtually all'' parts of their product produced in the United 
States to use the label, and would help consumers decide 
whether their choice to purchase products marked as ``Made in 
the U.S.A.'' supports U.S. manufacturing and jobs.

                         Summary of Provisions

    S. 1518 would amend section 320933 of the Violent Crime 
Control and Law Enforcement Act of 1994, (15 U.S.C. 45a), to 
include an ``Effect on State Law'' subsection that states that 
the national ``Made in the U.S.A.'' standard supersedes any 
provisions of any State law relating to the extent to which a 
product is introduced, delivered for introduction, sold, 
advertised, or offered for sale in interstate or foreign 
commerce with a ``Made in the U.S.A'' or ``Made in America'' 
label.

                          Legislative History

    Senator Lee introduced this bill on June 4, 2015, with 
Senators Capito, Fischer, Collins, and King as co-sponsors. On 
November 18, 2015, in an open Executive Session, the Committee 
considered the bill. The Committee, by voice vote, ordered S. 
1518 to be reported favorably.

                            Estimated Costs

    In accordance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate and section 403 of the 
Congressional Budget Act of 1974, the Committee provides the 
following cost estimate, prepared by the Congressional Budget 
Office:

S. 1518--Reinforcing American-Made Products Act of 2015

    S. 1518 would preempt state laws that establish standards 
under which a ``Made in America'' or ``Made in the U.S.A.'' 
label may be affixed to a product. The bill would reiterate 
that the Federal Trade Commission (FTC) is solely responsible 
for developing and enforcing those standards.
    Based on information from the FTC, CBO expects that 
implementing S. 1518 would not affect the workload or 
enforcement activities of the agency, and therefore, would have 
no effect on the federal budget.
    Enacting S. 1518 would not affect direct spending or 
revenues; therefore, pay-as-you-go procedures do not apply. CBO 
estimates that enacting S. 1518 would not increase net direct 
spending or on-budget deficits in any of the four consecutive 
10-year periods beginning in 2026.
    By preempting state laws, S. 1518 would impose an 
intergovernmental mandate as defined in the Unfunded Mandates 
Reform Act (UMRA). At least one state, California, currently 
has a law setting its own standards for such labels. S. 1518 
would preempt that law. The costs, if any, to the state of 
complying with the mandate would not exceed the annual 
threshold established in UMRA ($154 million in 2016, adjusted 
annually for inflation.)
    S. 1518 contains no private-sector mandates as defined in 
UMRA.
    The CBO staff contacts for this estimate are Susan Willie 
(for federal costs) and Leo Lex (for intergovernmental 
mandates). The estimate was approved by H. Samuel Papenfuss, 
Deputy Assistant Director for Budget Analysis.

                           Regulatory Impact

    In accordance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee provides the 
following evaluation of the regulatory impact of the 
legislation, as reported:

                       number of persons covered

    S. 1518, as reported, would not impose any new regulatory 
requirements on businesses.

                            economic impact

    Enactment of this legislation is not expected to have an 
adverse impact on the Nation's economy.

                                privacy

    S. 1518 would not have an adverse impact on the personal 
privacy of individuals.

                               paperwork

    S. 1518 would not measurably increase paperwork 
requirements for most businesses.

                   Congressionally Directed Spending

    In compliance with paragraph 4(b) of rule XLIV of the 
Standing Rules of the Senate, the Committee provides that no 
provisions contained in the bill, as reported, meet the 
definition of congressionally directed spending items under the 
rule.

                      Section-by-Section Analysis

Section 1. Short title.

    This section would designate the bill's short title as the 
``Reinforcing American-Made Products Act of 2015.''

Section 2. Exclusivity of Federal authority to regulate labeling of 
        products made in the United States and introduced in interstate 
        and foreign commerce.

    This section would amend section 320933 of the Violent 
Crime Control and Law Enforcement Act of 1994 (15 U.S.C. 45a) 
to include an ``Effect on State Law'' subsection that states 
that the ``Made in the U.S.A.'' labeling provisions shall 
supersede any provisions of the law of any State relating to 
the extent to which a product is introduced, delivered for 
introduction, sold, advertised, or offered for sale in 
interstate or foreign commerce with a ``Made in the U.S.A.'' or 
``Made in America'' label, or the equivalent thereof, in order 
to represent that such product was in whole or substantial part 
of domestic origin.

                        Changes in Existing Law

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

          VIOLENT CRIME CONTROL AND LAW ENFORCEMENT ACT OF 1994

                  [Public Law 103-322; 108 Stat. 1796]

SEC. 320933. LABELS ON PRODUCTS.

                            [15 U.S.C. 45a]

  [To the extent]
  (a) In General.--To the extent any person introduces, 
delivers for introduction, sells, advertises, or offers for 
sale in commerce a product with a ``Made in the U.S.A.'' or 
``Made in America'' label, or the equivalent thereof, in order 
to represent that such product was in whole or substantial part 
of domestic origin, such label shall be consistent with 
decisions and orders of the Federal Trade Commission issued 
pursuant to section 5 of the Federal Trade Commission Act. This 
section only applies to such labels. [Nothing in this section] 
Except as provided in subsection (b), nothing in this section 
shall preclude the application of other provisions of law 
relating to labeling. The Commission may periodically consider 
an appropriate percentage of imported components which may be 
included in the product and still be reasonably consistent with 
such decisions and orders. Nothing in this section shall 
preclude use of such labels for products that contain imported 
components under the label when the label also discloses such 
information in a clear and conspicuous manner. The Commission 
shall administer this section pursuant to section 5 of the 
Federal Trade Commission Act and may from time to time issue 
rules pursuant to section 553 of title 5, United States Code, 
for such purpose. If a rule is issued, such violation shall be 
treated by the Commission as a violation of a rule under 
section 18 of the Federal Trade Commission Act (15 U.S.C. 57a) 
regarding unfair or deceptive acts or practices. This section 
shall be effective upon publication in the Federal Register of 
a Notice of the provisions of this section. The Commission 
shall publish such notice within six months after the enactment 
of this section.
  (b) Effect on State Law.--The provisions of this section 
shall supersede any provisions of the law of any State relating 
to the extent to which a product is introduced, delivered for 
introduction, sold, advertised, or offered for sale in 
interstate or foreign commerce with a ``Made in the U.S.A.'' or 
``Made in America'' label, or the equivalent thereof, in order 
to represent that such product was in whole or substantial part 
of domestic origin.

                                  [all]
```