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[House Report 107-21]
[From the U.S. Government Publishing Office]

107th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     107-21

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                    MADE IN AMERICA INFORMATION ACT

                                _______
                                

 March 13, 2001.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

 Mr. Tauzin, from the Committee on Energy and Commerce, submitted the 
                               following

                              R E P O R T

                             together with

                           [To accompany 725]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 725) to establish a toll free number under the 
Federal Trade Commission to assist consumers in determining if 
products are American-made, having considered the same, report 
favorably thereon without amendment and recommend that the bill 
do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     1
Background and Need for Legislation..............................     2
Hearings.........................................................     2
Committee Consideration..........................................     2
Committee Votes..................................................     3
Committee Oversight Findings.....................................     3
Statement of General Performance Goals and Objectives............     3
New Budget Authority, Entitlement Authority, and Tax Expenditures     3
Committee Cost Estimate..........................................     3
Congressional Budget Office Estimate.............................     3
Federal Mandates Statement.......................................     4
Advisory Committee Statement.....................................     4
Constitutional Authority Statement...............................     4
Applicability to Legislative Branch..............................     4
Section-by-Section Analysis of the Legislation...................     5
Changes in Existing Law Made by the Bill, as Reported............     6

                          PURPOSE AND SUMMARY

    The purpose of H.R. 725, the Made in America Information 
Act, is to provide for the establishment and operation of a 
three-year, toll free number pilot program to assist consumers 
in determining what products are ``Made in America.'' The bill 
provides that all costs of the program be paid with fees 
collected from manufacturers who voluntarily choose to register 
their products under this program.
    The reported bill requires the Secretary of Commerce to 
initiate a rulemaking to establish the program, as well as 
procedures for manufacturers to register products that are made 
in America. If there is sufficient interest in providing 
private sector funding, the Secretary is directed to promulgate 
the proposed rule and to enter into a contract for the 
establishment and operation of the program.

                  BACKGROUND AND NEED FOR LEGISLATION

    In today's global economy, it is increasingly difficult for 
consumers to determine which products are ``Made in America.'' 
Whether shopping for cars, computers, industrial equipment, or 
hand tools, the ``Made in America'' designation still 
represents quality and value to consumers, and is something 
that consumers, when adequately informed, factor into 
purchasing decisions. Currently, there is no central repository 
for lists of American-made products.
    The issue of the appropriate definition of when a product 
is ``Made in America'' has been addressed by the Federal Trade 
Commission (FTC or the Commission). The FTC's long-standing 
decisions have held that, for purposes of enforcement against 
``unfair and deceptive trade practices,'' ``all or virtually 
all'' of a product, including its components and parts, must be 
made in the United States by U.S. workers in order to make that 
claim. In an effort to understand the sentiment among both 
consumers and manufacturers better, the Commission undertook a 
comprehensive series of workshops, an extensive public comment 
period generating more than 300 comments, and consumer surveys. 
On December 1, 1997, the Commission issued an enforcement 
policy statement on U.S. origin claims rejecting an earlier 
effort to change the standard used by the Commission and 
announcing its intent to continue enforcing the Commission's 
``all or virtually all'' content standard.
    The Committee considered, and the House passed, legislation 
nearly identical to H.R. 725 in the 103rd, 104th, 105th, and 
106th Congresses. The language reported by the Committee is 
identical in every material respect to the language passed by 
the House in the 106th Congress. The Committee's report on H.R. 
3342 in the 103rd Congress (H. Rpt. 103 660) contains 
additional background information on the subject of ``Made in 
America.'' (See also H.R. 447 in the 104th Congress; H. Rpt. 
104-753; H.R. 563 in the 105th Congress; H. Rpt. 105-759; H.R. 
754 in the 106th Congress; H. Rpt. 106-399).

                                HEARINGS

    The Committee has not held any hearings on H.R. 725.

                        COMMITTEE CONSIDERATION

    On February 28, 2001, the Committee on Energy and Commerce 
met in open markup session and ordered H.R. 725 reported to the 
House, by voice vote, a quorum being present.

                            COMMITTEE VOTES

    Clause 3(b) of Rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. 
There were no record votes taken in connection with ordering 
H.R. 725 reported.

                      COMMITTEE OVERSIGHT FINDINGS

    The Committee did not hold oversight or legislative 
hearings on this legislation.

         STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

    Currently, there is no central repository for lists of 
American-made products. The objective of this legislation is to 
provide for such a depository, which will be easily accessible 
to the consumer via a toll-free number and funded by industry.

   NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX EXPENDITURES

    In compliance with clause 3(c)(2) of Rule XIII of the Rules 
of the House of Representatives, the Committee finds that H.R. 
725, Made in America Information Act, would result in no new or 
increased budget authority, entitlement authority, or tax 
expenditures or revenues.

                        COMMITTEE COST ESTIMATE

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                  CONGRESSIONAL BUDGET OFFICE ESTIMATE

    Pursuant to clause 3(c)(3) of Rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, March 12, 2001.
Hon. W.J. ``Billy'' Tauzin,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 725, the Made in 
America Information Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Ken Johnson.
            Sincerely,
                                        Steven M. Lieberman
                                    (For Dan L. Crippen, Director).
    Enclosure.

H.R. 725--Made in America Information Act

    H.R. 725 would require the Department of Commerce to 
determine if sufficient interest exists among manufacturers to 
establish a consumer telephone hotline listing products that 
are made in America. If sufficient interest is found, the bill 
would authorize the department to enter into a contract to 
establish a three-year pilot program to operate such a hotline 
and to charge fees to pay for the cost of the contract subject 
to future appropriations acts.
    CBO estimates that implementing H.R. 725 would not result 
in any significant net cost to the federal government. Assuming 
the department finds sufficient interest among manufacturers, 
CBO estimates that establishing a hotline and database and 
operating the program over a three-year period would cost the 
Department of Commerce about $10 million during the 2002-2005 
period. However, the bill also would authorize the Department 
of Commerce to establish fees to offset the costs of the toll-
free hotline, subject to approval in appropriation acts. CBO 
estimates that the collection of fees would reduce the net 
budgetary effect of H.R. 725 to an insignificant level.
    H.R. 725 could increase governmental receipts because the 
bill would establish a civil penalty for anyone who knowingly 
registers a product for the toll-free hotline that is not made 
in America, as defined by the bill. Consequently, pay-as-you-go 
procedures would apply. However, CBO estimates that any such 
receipts would not be significant in any year.
    This bill contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reforms Act and 
would not affect the budgets of state, local, or tribal 
governments.
    The CBO staff contact for this estimate is Ken Johnson. 
This estimate was approved by Robert A. Sunshine, Assistant 
Director for Budget Analysis.

                       FEDERAL MANDATES STATEMENT

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                      ADVISORY COMMITTEE STATEMENT

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                   CONSTITUTIONAL AUTHORITY STATEMENT

    Pursuant to clause 3(d)(1) of Rule XIII of the Rules of the 
House of Representatives, the Committee finds that the 
Constitutional authority for this legislation is provided in 
Article I, section 8, clause 3, which grants Congress the power 
to regulate commerce with foreign nations, among the several 
States, and with the Indian tribes.

                  APPLICABILITY TO LEGISLATIVE BRANCH

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services oraccommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             Section-by-Section Analysis of the Legislation

Section 1. Short title

    This section establishes the short title of the 
legislation, the ``Made in America Information Act.''

Section 2. Establishment of toll free number pilot program

    This section provides that if, pursuant to comments 
received during rulemaking under section 3 of the bill, the 
Secretary of Commerce (the Secretary) determines there is 
sufficient interest among manufacturers in the private sector 
to operate the program established under this section without 
Federal funding, the Secretary will establish a toll free 
number which may be used by consumers to determine if a product 
is made in America. Under this section, the Secretary has 
responsibility to publish the toll free number in the Federal 
Register.
    This section also requires that the Secretary contract out 
the establishment and operation of the toll free number pilot 
program and the registration of products pursuant to 
regulations issued under section 3.
    This section further provides that consumers shall be 
informed: as to whether products about which inquiry is being 
made are registered as being ``Made in America;'' that 
registration of a product does not mean that the product is 
endorsed or approved by the Government; that registration of a 
product does not mean that the Secretary has conducted any 
investigation to confirm that the product is a product which 
meets the definition of ``Made in America''; and that 
registration of a product does not mean that the product 
contains 100 percent U.S. content.

Section 3. Registration

    This section provides that the Secretary shall propose a 
regulation: (1) to establish procedures under which 
manufacturers may voluntarily register products which meet the 
definition of ``Made in America'' used in the bill and have 
such products included in the information available through the 
toll free number; (2) to establish, assess, and collect fees 
for the costs of having products included in information 
available through the toll free number established under 
section 2; (3) to establish a toll free number pilot program; 
and (4) to solicit views from the private sector concerning the 
level of interest of manufacturers in registering products 
under the terms and conditions of the toll free number pilot 
program described in the proposed regulations and the level of 
interest of consumers.
    This section also states that manufacturers who register 
products as being ``Made in America'' for purposes of this Act 
shall be subject to a fee to cover all costs of operating the 
toll free number pilot program established in section 2.

Section 4. Penalty

    This section provides that if a manufacturer knowingly 
registers a product with the Secretary under section 3 which is 
not made in America, the manufacturer may not offer such 
product for purchase to the Federal government and shall be 
subject to a civil penalty of not more than $7,500, which the 
Secretary of Commerce may impose.

Section 5. Definition

    This section provides that the term ``Made in America'' has 
the same meaning given unqualified ``Made in the U.S.A.'' or 
``Made in America'' claims, for purposes of the laws 
administered by the Federal Trade Commission. Under the Federal 
Trade Commission Act, as historically applied and recently 
reaffirmed by the FTC, that agency has treated unqualified 
``Made in America'' or ``Made in U.S.A.'' claims as having to 
meet a standard of ``all or virtually all'' domestic content. 
The bill's definition adopts the standard used by the FTC in 
order to ensure that ``Made in America'' claims made pursuant 
to this legislation meet the standard for unqualified ``Made in 
U.S.A.'' or ``Made in America'' claims that the FTC uses to 
enforce section 5 of the Federal Trade Commission Act's (15 
U.S.C. 45) prohibition against deceptive acts or practices.
    This section also states that the term ``product,'' as used 
in the reported bill, means a product with a retail value of at 
least $250.

Section 6. Rule of construction

    This section states that nothing in this Act shall be 
deemed to alter, amend, modify, or otherwise affect in any way, 
the Federal Trade Commission Act or the opinions, decisions, 
rules, or any guidance issued by the Federal Trade Commission 
regarding the use of unqualified ``Made in the U.S.A.'' or 
``Made in America'' claims in labels on products introduced, 
delivered for introduction, sold, advertised, or offered for 
sale in commerce.

         CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    This legislation does not amend any existing Federal 
statute.

                                
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