51456 Federal Register / Vol. 86, No. 176 / Wednesday, September 15, 2021 / Rules and Regulations 

DEPARTMENT OF COMMERCE 

Office of the Under-Secretary for 

Economic Affairs 

15 CFR Part 1500 

[Docket No.: 210820–0165] 

RIN 0605–AA53 

Concrete Masonry Products Research, 

Education, and Promotion Order 

AGENCY: Under-Secretary for Economic 

Affairs, United States Department of 

Commerce. 

ACTION: Final rule; notification of 

referendum. 

SUMMARY: This final rule sets forth the 

proposed Concrete Masonry Products 

Research, Education, and Promotion 

Order, as authorized by the Concrete 

Masonry Products Research, Education, 

and Promotion Act of 2018, which 

establishes a Concrete Masonry 

Products Board (Board) composed of 

industry members appointed by the 

Secretary of Commerce (Secretary) to 

develop and implement programs of 

research, education, and promotion in 

the concrete masonry products industry. 

This final rule: Defines the purpose of 

the program; provides for a national 

Board, outlining its basic structure and 

defining its responsibilities; establishes 

an assessment and provides for its 

collection; outlines program funding 

and its limits to program activities; 

establishes recordkeeping requirements; 

sets out the Department’s authority to 

review and approve program activities; 

outlines the Department’s enforcement 

authority; and sets up a referendum to 

determine whether the Department will 

rescind this Order. 

DATES: 

Effective date: November 29, 2021. If 

the referendum fails, the Department 

will publish a document in the Federal 

Register to withdraw this final rule 

before the effective date. 

Referendum dates: Registration to 

participate in the referendum began 

following the publication of the final 

rule on referendum procedures (86 FR 

23271, May 3, 2021). The referendum 

period will conclude after thirty days or 

once all registrants have voted, 

whichever occurs first. The referendum 

begins October 15, 2021. See 

SUPPLEMENTARY INFORMATION for more 

information and details regarding 

referendum. The Department must 

receive ballots no later than midnight of 

the final day of the referendum period 

on November 15, 2021. 

ADDRESSES: Voters may submit ballots 

via mail to United States Department of 

Commerce Checkoff Team, 4600 Silver 

Hill Road, Washington, DC 20233, or 

facsimile (301) 278–9099. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Michael Thompson, Communications 

for the Commerce Checkoff 

Implementation Program, Office of the 

Under Secretary for Economic Affairs, 

telephone: (202) 482–0671 or via 

electronic mail: michael.thompson1@

trade.gov. 

SUPPLEMENTARY INFORMATION: The 

Concrete Masonry Products Research, 

Education, and Promotion Act of 2018 

authorizes the Concrete Masonry 

Products Research, Education, and 

Promotion Order (the Order). This 

document affects 15 CFR part 1500, 

subpart A. The purpose of the Order is 

to strengthen the position of the 

concrete masonry products industry in 

the domestic marketplace; maintain, 

develop, and expand markets and uses 

of concrete masonry products in the 

domestic marketplace; and promote the 

use of concrete masonry products in 

construction and building. This Order 

sets forth the process to establish a 

Concrete Masonry Products Board (the 

Board) composed of industry members 

appointed by the Secretary of Commerce 

(the Secretary) to develop and 

implement programs of research, 

education, and promotion in the 

concrete masonry products industry. 

The funding of the Board’s activities 

and programs is through assessments 

paid by manufacturers of concrete 

masonry units. The initial assessment is 

$.01 per concrete masonry unit sold. 

The Secretary will hold a referendum 

among eligible manufacturers to 

determine whether they favor the 

implementation of the Order. For the 

Order to go into effect, there must be a 

majority ‘‘yes’’ vote by both: (1) The 

total number of concrete masonry unit 

manufacturers voting, and (2) 

manufacturers who operate a majority of 

the machine cavities operated by the 

manufacturers voting in the referendum. 

Manufacturers must register prior to 

midnight of the day prior to the start of 

the referendum period in order to vote. 

The Department published the 

referendum procedures separately in the 

Federal Register (86 FR 23271, May 3, 

2021), codified at 15 CFR part 1500, 

subpart B. This final rule also 

announces that the U.S. Department of 

Commerce is conducting the 

referendum among eligible 

manufacturers of concrete masonry 

units to determine whether they favor 

implementation of the program. The 

referendum period will conclude after 

thirty days or once all registrants have 

voted, whichever occurs first. Whether 

this Order will go into effect is 

dependent upon the outcome of the 

referendum. To be eligible to vote, 

concrete masonry unit manufacturers 

must have manufactured concrete 

masonry units within the last 180 days 

prior to the start of the referendum 

period. The Department will mail 

ballots to all registered concrete 

masonry unit manufacturers. 

Pursuant to the Concrete Masonry 

Products Research, Education, and 

Promotion Act of 2018, 15 U.S.C. 8701 

et seq. (the Act), the Department of 

Commerce (the Department) is enacting 

a research, education, and promotion 

program (commonly referred to as a 

checkoff program) for concrete masonry 

products. The Act also authorizes the 

Secretary to ‘‘issue such regulations as 

may be necessary to carry out [the Act] 

and the power vested in the Secretary 

under [the Act].’’ (See 15 U.S.C. 8701, 

8713). This document is the final 

version of the Order and will be the 

subject of a referendum. If the 

manufacturers of concrete masonry 

units, via the referendum, approve the 

Order, the Secretary will appoint a 

Board to carry out the duties as the 

Order prescribes, including the 

collection of the assessment. Under the 

Order, the Secretary would establish a 

Board that reflects a fair, equitable, and 

diverse representation of the concrete 

masonry products industry, reflecting 

the geographical distribution of the 

manufacture of concrete masonry 

products in the United States, the types 

of concrete masonry products 

manufactured, and the range in size of 

manufacturers in the United States. An 

industrywide assessment of $.01 per 

concrete masonry unit sold would 

finance the research, education, and 

promotion initiatives of the checkoff 

program. The Secretary would oversee 

the operations and actions of the Board. 

As part of this rulemaking process, 

the Department published (1) a 

proposed Order (85 FR 52059, August 

24, 2020), and (2) proposed referendum 

procedures (85 FR 65288 October 15, 

2020). Both rules provided for a 

comment period that has now expired. 

The Department received comments on 

the proposed Order from 146 

commenters. The comments and the 

Department’s responses are set forth in 

this final rule. 

I. Industry Background 

While the concrete masonry product 

industry is of moderate size, its 

manufacturers populate every State in 

the nation as well as the District of 

Columbia. The nature of the industry 

and cost of transportation of the 

products is such that the customer base 


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Federal Register / Vol. 86, No. 176 / Wednesday, September 15, 2021 / Rules and Regulations 51457 

1National Concrete Masonry Association 

(NCMA), 2019 CMU Sales Report (Herndon, VA: 

NCMA, 2019); https://ncma.org/updates/news/ 

2019-cmu-sales-survey-released/. 

2Executive Office of the President, Office of 

Management and Budget, North American Industry 

Classification System: United States, 2017 

(Suitland, MD: Census Bureau, 2017); https://

www.census.gov/eos/www/naics/2017NAICS/2017_

NAICS_Manual.pdf. 

3The Economic Census, conducted every 5 years 

by the U.S. Census Bureau, is the official measure 

of the nation’s businesses and economy. 

for concrete masonry products is very 

localized. Relatively small producers 

dominate the industry. Because they 

produce a commodity that is not easily 

differentiated by manufacturer, most of 

the producers acting alone do not have 

the resources to efficiently market the 

value of the product or conduct the 

research and education to promote 

market growth. Coordinated activity 

would enable producers to leverage 

economies of scale in conducting 

research, education, and promotion of 

the industry. 

The Order applies to products 

manufactured on concrete block 

machines and used for construction. 

The Act and the Order distinguish 

between concrete masonry products and 

concrete masonry units. Concrete 

masonry units are a type of concrete 

masonry product with an actual width 

of 3 inches or greater that are 

manufactured from dry-cast concrete 

using a block machine, including 

concrete block and related concrete 

units used in masonry applications. 

According to industry experts, the vast 

majority of these units are the hollow, 

loadbearing concrete blocks often 

referred to as ‘‘gray block.’’ 1 In contrast, 

concrete masonry products is a broader 

category that, in addition to concrete 

masonry units, includes hardscape 

products, such as concrete pavers and 

segmental retaining wall units, 

manufactured on a block machine using 

dry-cast concrete. 

Concrete masonry products range 

from the paver that is of original design 

and very ornate to the homogenous, 

non-descript 8-inch x 8-inch x 16-inch 

concrete block. The initial rate of 

assessment will apply only to concrete 

masonry units. 

To identify the affected industry, the 

Department used statistics for the North 

American Industry Classification 

System (NAICS) code 327331, concrete 

block and brick manufacturing. This 

industry includes the manufacturers of 

concrete architectural block, concrete 

and cinder blocks, concrete bricks, 

concrete patio block, concrete paving 

block, precast terrazzo plinth blocks, 

precast concrete block and brick, 

prestressed concrete blocks or bricks, 

and slumped brick.2 The Department 

believes this NAICS classification most 

closely corresponds to manufacturers of 

the broader category of concrete 

masonry products. 

According to estimates from the 2017 

Economic Census of the U.S. Census 

Bureau, the block and brick 

manufacturing industry had nearly 700 

establishments and more than 16,000 

employees in 2017. From 2007 to 2017, 

the number of establishments, number 

of employees, annual payroll, value 

added, and value of shipments declined 

in the industry.3 There were 690 block 

and brick manufacturing establishments 

in 2017, down from 914 in 2007. The 

number of employees fell by 7,578 to 

16,247 in 2017, and annual payroll fell 

$152 million to $841 million. Value 

added and total value of shipments also 

fell during this time period, down $715 

million to $2.86 billion and down $1.36 

billion to $4.88 billion, respectively. 


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Table 1: North American Industry Classification for Cement and Concrete Product 

Manufacturing 
51458 Federal Register / Vol. 86, No. 176 / Wednesday, September 15, 2021 / Rules and Regulations 

The following is a non-exhaustive list 

of examples of products that would fall 

within the definition of a concrete 

masonry unit (defined in § 1500.6): 

(A) Concrete Block, including: 

(1) Gray 

(2) Architectural 

(3) Prefaced 

(4) Those joined by any method in 

masonry construction: 

(i) Bed joint mortar or adhesives 

(ii) Dry-stacked and joined by filling 

cores solid with grout or joined by 

other means 

(iii) Post tensioned 

(iv) Surfaced bonded 

(5) Sound wall block 

(6) Fence block 

(7) Lintel Block—while lintels 

designed to span an entire opening 

are excluded, those concrete 

masonry units joined to create a 

lintel are included 

(8) Chimney, Pilaster, or Column 

Block 

(9) Screen Block—these architectural 

units are included if their widths 

are greater than 3 inches if they are 

made on a block machine 

(10) Concrete Sill Block—these units 

and related specialty units are 

included if their widths are greater 

than 3 inches if they are made on 

a block machine 

(11) Concrete Block formed with 

concrete masonry face shells and 

other materials to create a masonry 

unit used in masonry construction 

(B) Concrete Brick (Architectural only) 

(C) Concrete Masonry Veneer Units 

(greater than 3 inches in width) 

Summary of Final Rule 

Under the Order, the Secretary will 

establish a Board that ensures fair, 

equitable, and diverse representation of 

the concrete masonry products industry, 

reflecting the geographical distribution 

of the manufacture of concrete masonry 

products in the United States, the types 

of concrete masonry products 

manufactured, and the range in size of 

manufacturers in the United States. An 

industrywide assessment would finance 

the research, education, and promotion 

initiatives of the checkoff program. The 

Secretary would oversee the operations 

and actions of the Board. 

The Order addresses, among other 

items, establishment and membership of 

the Board, guidance for appointments, a 

nomination process, the selection of 

alternates, Board terms, powers and 

duties of the Board, programs and 

projects to carry out the purpose of the 

Act, budgets, expenses, contracts and 

agreements, books and records, and 

reporting requirements. 

The Order provides the rate of 

assessment and that such assessments 

shall be paid by a manufacturer that has 

manufactured concrete masonry 

products during a period of at least 180 

days prior to the date they are to pay the 

assessment. The initial rate of 

assessment is $.01 per concrete masonry 

unit sold. Such manufacturers will 

submit their assessments to the Board 

quarterly. The Order allows for a change 

in rate if a two-thirds majority of voting 

members of the Board so vote. An 

increase or decrease can occur only 

once per year and the change in rate 

may not exceed $.01 per concrete 

masonry unit sold. Finally, the 

assessment rate shall not be in excess of 

$.05 per concrete masonry unit. 

The Order provides that not less than 

50 percent of assessments (less 

administration expenses) paid by a 

manufacturer shall be used to support 

research, education, and promotion 

programs and projects in support of the 

Geographic Region of the contributing 

manufacturer. The Order defines five 

Geographic Regions that generally 

reflect the northeast, southeast, middle, 

southwest, and northwest (plus Hawaii 

and Alaska) of the United States. The 

Board will work with regional concrete 

industry groups to allocate funding and 

coordinate programs that have national 

and regional impact. 

Programs for research, promotion and 

education will further the following 

goals: 

• Strengthen the position of the 

domestic concrete masonry products 

industry. 

• Maintain, develop, and expand 

markets and uses for concrete masonry 

products domestically. 

• Promote the use of concrete 

masonry products in construction and 

building. 

The Act mandates that the 

Department conduct a referendum 

among eligible manufacturers of 

concrete masonry products to determine 

whether the manufacturers favor 

implementation of the concrete checkoff 

program prior to it going into effect. 

Each manufacturer eligible to vote in the 

referendum is entitled to one vote. The 

Department will use Employer 

Identification Numbers to identify 

unique manufacturers. For the order to 

go into effect, there must be a majority 

‘‘yes’’ vote by both: (1) The total number 


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Table 2: Block and Brick Manufacturers, Economic Census 

Number of Number of Annual payroll Value added 

Year establishments employees ($mils) ($mils) 

Source: U.S. Census Bureau Economic Census 

Total value of 

shipments 

($mils) 
Federal Register / Vol. 86, No. 176 / Wednesday, September 15, 2021 / Rules and Regulations 51459 

4See ‘‘Table of Small Business Size Standards 

Matched to North American Industry Classification 

System Codes’’ on the U.S. Small Business 

Administration website. For the economic analysis, 

the Department used statistics for the North 

American Industry Classification System (NAICS) 

code 327331, concrete block and brick 

manufacturing. 

5A firm is a business organization consisting of 

one or more domestic establishments in the same 

state and industry that were specified under 

common ownership or control and an establishment 

is a single physical location at which business is 

conducted or services or industrial operations are 

performed. See ‘‘Statistics of U.S. Businesses 

Glossary’’ on the U.S. Census Bureau website. 

6See ‘‘2017 SUSB Annual Data Tables by 

Establishment Industry’’ on the U.S. Census Bureau 

website. For more information, see the County 

Business Patterns methodology on the Census 

website. 

of concrete masonry unit manufacturers 

voting; and (2) manufacturers who 

operate a majority of the machine 

cavities operated by the manufacturers 

voting in the referendum. For more 

details on the referendum see the 

referendum procedures notice 

published separately the Federal 

Register (86 FR 23271, May 3, 2021. 

To participate in the referendum 

manufacturers must to register by 

midnight of the day prior to the start of 

the referendum period. 

Although the Department specifically 

requested comments on its intended use 

of the Employer Identification Numbers 

(EIN) as an identifier of unique 

manufacturers, none were received. 

Therefore, the Department will proceed 

with its plan to use EIN to identify 

unique manufacturers eligible to vote in 

the referendum. 

Final Regulatory Flexibility Act 

Analysis 

The Regulatory Flexibility Act (RFA), 

first enacted in 1980 and codified at 5 

U.S.C. 600–611, is intended to place the 

burden on the government to review all 

new regulations to ensure that, while 

accomplishing their intended purposes, 

they do not unduly inhibit the ability of 

small entities to compete. The RFA 

recognizes that the size of a business, 

unit of government, or nonprofit 

organization can have a bearing on its 

ability to comply with Federal 

regulations. Major goals of the RFA are: 

(1) To increase agency awareness and 

understanding of the impact of their 

regulations on small business; (2) to 

require that agencies communicate and 

explain their findings to the public; and 

(3) to encourage agencies to use 

flexibility and to provide regulatory 

relief to small entities. 

The RFA emphasizes predicting 

significant adverse impacts on small 

entities as a group distinct from other 

entities and on the consideration of 

alternatives that may minimize the 

impacts, while still achieving the stated 

objective of the action. When an agency 

publishes a proposed regulatory action, 

it must either: (1) Certify that the action 

will not have a significant adverse 

impact on a substantial number of small 

entities, and support such a certification 

declaration with a factual basis, 

demonstrating this outcome, or, (2) if 

such a certification cannot be supported 

by a factual basis, prepare and make 

available for public review an Initial 

Regulatory Flexibility Analysis (IRFA) 

that describes the impact of the 

proposed rule on small entities. 

The Department issued an IRFA and 

requested public comments. Those 

comments and the Department’s 

responses are found in the ‘‘Public 

Comments’’ section of this final rule. 

The FRFA includes updates to the RFA 

the Department references in the 

responses to the IRFA public comments. 

Basis and Purpose of the Rule 

This action is taken under the 

authority of the Act, which authorizes a 

research, education, and promotion 

program for concrete masonry products, 

also known as a checkoff program. The 

Secretary will establish this checkoff 

program by issuance of an order issued 

that is subject to approval by an 

industry referendum. If industry 

approves of the order, the program 

would then be carried out by a Board, 

which would develop research and 

education programs as well as efforts to 

promote concrete masonry products in 

domestic markets. Board activities 

would be funded by assessments on 

manufacturers of concrete masonry 

products, based on the number of 

concrete masonry units sold each 

quarter. The specific burdens for 

applying for Board membership and the 

ongoing evaluation and compliance 

program are detailed later in this 

document in the section titled 

‘‘Paperwork Reduction Act’’. 

A Description of and an Estimate of the 

Number of Small Entities to Which the 

Rule Will Apply or an Explanation of 

Why No Such Estimate Is Available 

The final Order applies to products 

manufactured on concrete block 

machines and used for construction. As 

indicated by the data below and 

confirmed by industry experts, the 

industry is dominated by small entities. 

The U.S. Small Business 

Administration size standard to qualify 

as a small business in this industry is 

500 or fewer employees.4 According to 

Census data, there were 430 firms and 

686 establishments engaged in concrete 

block and brick manufacturing in 2017.5

Of these, 401 firms, or 93 percent, 

employed fewer than 500 employees, 

and these small firms accounted for 514 

establishments, or 75 percent of all 

establishments, and about 62 percent of 

industry employment.6 Note that a 

single company or business can have 

multiple firms, and a single firm can 

have multiple establishments. 


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51460 Federal Register / Vol. 86, No. 176 / Wednesday, September 15, 2021 / Rules and Regulations 

7See the Occupational Outlook Handbook, 

Bureau of Labor Statistics (https://www.bls.gov/ 

ooh/). 

Costs to Affected Entities 

Assessment costs—Under this final 

Order, concrete masonry unit 

manufacturers would be required to pay 

assessments to the Board to fund the 

research, education, and promotion 

programs of the Board. Assessment rates 

are dictated by the Act, which specifies 

assessments of $0.01 per unit sold, up 

to a maximum of $0.05 per unit sold, 

with assessments increasing by no more 

than $0.01 per year. 

To estimate the costs to businesses, 

the Department estimates a range of 

assessment revenues, with the lower 

bound calculated using assessments of 

$0.01 with no increases in future years 

and the upper bound calculated using 

the maximum assessment rates 

permitted under the Act—$0.01 in the 

first year, increasing by $0.01 in 

subsequent years to the maximum of 

$0.05 in the fifth year and thereafter. 

To estimate the number of units sold 

by small entities, the Department relies 

on industry reports that show there 

were 1.15 billion concrete masonry 

units produced in 2018. Assuming small 

businesses produced 60 to 75 percent of 

overall production, we estimate that 

between 690 and 862.5 million units 

would be produced by small businesses 

in the first year of the program. Based 

on these estimates, total estimated 

assessments on small businesses based 

on $0.01 per unit produced would be 

$6.90 million to $8.63 million in the 

first year. 

To estimate a lower bound on 

expected annual assessment costs, we 

assume assessments remain constant at 

$0.01 for 10 years and industry 

production grows with inflation. 

Therefore, total assessments on small 

businesses over the next 10 years is 

expected to be $6.90 million to $8.63 

million per year. The midpoint of this 

range, $7.76 million, is the Department’s 

lower bound estimate of annual costs to 

small businesses. This amounts to 

$19,358 per firm each year. 

To estimate an upper bound estimate 

of costs, we assume the Board institutes 

the maximum assessment authorized 

under the Act, resulting in a $0.01 per 

unit assessment in year 1, $0.02 in year 

2, $0.03 in year 3, $0.04 in year 4, and 

$0.05 in years 5 through 10. Again, 

assuming industry production grows 

with inflation, total assessments on 

small businesses over the next 10 years 

would be expected to average $27.60 

million to $34.50 million per year. The 

midpoint of this range, $31.05 million, 

is the Department’s upper bound 

estimate of annual costs to small 

businesses. This amounts to an average 

of $77,431 per firm each year. 

Applying the Department’s upper 

bound cost estimate to the receipts 

estimated by the Census Bureau for this 

industry, total costs on small businesses 

represent about 1.1 percent of small 

business receipts (shown in ‘‘Table 3: 

Block and Brick Manufacturers 2017 by 

Business Size,’’ employment size less 

than 500). Again, this would be the 

average over the 10-year period. 

Assessments would be lowest in year 1 

and highest in years 5 through 10. 

These estimated assessment costs are 

based on the limited information 

available for the concrete and brick 

manufacturers industry. For this 

analysis, the Department relies on 

industry estimates for annual unit 

production. Because unit production is 

not available by business size, we 

estimate a range of unit production 

using establishment data from the U.S. 

Census Bureau for NAICS industry 

327331. Because the number of firms 

estimated by industry experts differs 

from the number of firms under NAICS 

industry 327331, we request comments 

regarding the number and size of 

entities covered under the proposed 

order, including whether production 

occurs among businesses not classified 

under NAICS industry 327331. 

Reporting costs—In addition to 

assessments paid on concrete masonry 

units, there are reporting costs 

associated with adoption of this final 

Order. Under the proposed order, each 

manufacturer may be required to 

periodically provide to the Board such 

information as may be required by the 

Board, with the approval of the 

Secretary, which may include, but not 

be limited to, the following: 

1. Number and type of concrete 

masonry units manufactured; 

2. Number and type of concrete 

masonry units on which an assessment 

was paid; 

3. Name and address of the 

manufacturer; and 

4. Date assessment was paid on each 

concrete masonry unit sold. 

We expect these reporting costs to be 

incurred with the quarterly assessments 

paid by manufacturers. We estimate that 

managers would spend 60 minutes per 

quarterly report. According to the 

Bureau of Labor Statistics, the median 

pay for industrial production managers 

is $50.71 per hour.7 Thus, we estimate 

that firms will pay, on average, $202.84 

for reporting costs per year. 

Benefits for Affected Entities 

While this final Order may result in 

a significant cost for a substantial 

number of small businesses, these costs 

are expected to result in benefits to 

businesses that are at least 

commensurate with these costs. The 


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Table 3: Block and Brick Manufacturers 2017 by Business Size 

Size of business 

by number of Number of Estimated Annual payroll 

employees Number of firms establishments Employment receipts ($mils) ($mils) 

Source: U.S. Census Bureau 2017 County Business Patterns and 2017 Economic Census, Table 

US_6digitnaics_2017, released 03/06/2020 
Federal Register / Vol. 86, No. 176 / Wednesday, September 15, 2021 / Rules and Regulations 51461 

assessments pay for investments in 

product research, education, and 

promotion programs that are intended to 

yield direct benefits to concrete product 

manufacturers in the form of new 

markets and increased consumer 

demand. 

Alternatives: Consideration of a De 

Minimis Exemption 

The Department recognizes that some 

small businesses with minimal 

production in the industry may not have 

the resources to comply with the 

requirements imposed by the proposed 

order, and therefore, the Department 

may consider a de minimis exemption 

for these small businesses. A de minimis 

exemption would exclude from the 

order some small businesses with 

minimal production, based on measures 

of unit production, employment, 

receipts, machine cavities, or other 

relevant criteria. The Department 

requested comments on whether to 

include a de minimis exception. Those 

that commented on a de minimis 

exception were universally opposed to 

the inclusion of one. Comments in 

opposition included several 

manufacturers to which a de minimis 

exception would apply. The Department 

did not receive any comments 

supporting the inclusion of a de 

minimis exception. At this time the 

Department has decided to defer to 

industry preferences and will not 

include a de minimis exception in this 

Order. The Department reiterates this 

decision in its response to comments 

below. This Order complies with the 

statutory requirements of the Act; there 

are no other possible alternatives to this 

final rule. 

A Description of the Steps the Agency 

Has Taken To Minimize the Significant 

Economic Impact on Small Entities 

Consistent With the Stated Objectives of 

Applicable Statutes 

To minimize the respondent burden, 

the Department plans to create simple 

forms for ease of applying for Board 

membership and submitting evaluation 

and compliance information. Further, 

the Department plans to allow 

interested parties to apply for Board 

membership and submit evaluation and 

compliance information via email, by 

mail, or facsimile—at the choice of the 

respondent. See ADDRESSES and FOR

FURTHER INFORMATION CONTACT in this 

preamble. 

Paperwork Reduction Act 

In accordance with the Paperwork 

Reduction Act of 1995 (44 U.S.C. 

chapter 35), the Department submitted 

to OMB for approval the application 

form individuals will complete for 

consideration as a Board member and 

the evaluation and compliance form the 

Board will use to assist in receiving 

assessments. These forms represent the 

information collection and 

recordkeeping requirements to establish 

the Board and to document evaluation 

and compliance of the program. OMB 

approved both forms under OMB 

Control Number 0605–0028. 

Title: Concrete Masonry Products 

Research, Education, and Promotion 

Order. 

OMB Number: 0605–0028. 

Expiration Date of Approval: October 

31, 2023. 

Type of Request: New information 

collection for research, education and 

promotion programs. 

Abstract: The Department seeks to 

establish an orderly program for 

developing, financing, and carrying out 

an effective, continuous, and 

coordinated program of research, 

education and promotion, to support the 

concrete masonry products industry. 

The Department has published an Order 

(15 CFR part 1500, subpart A) in the 

Federal Register to establish the 

program. The purpose of the Order is to 

strengthen the position of the concrete 

masonry products industry in the 

domestic marketplace; maintain, 

develop, and expand markets and uses 

of concrete masonry products in the 

domestic marketplace; and promote the 

use of concrete masonry products in 

construction and building. The Order 

allows a Concrete Masonry Products 

Board (Board) made up of industry 

members appointed by the Secretary to 

develop and implement programs of 

research, education, and promotion. The 

funding of the Board’s activities and 

programs will be through assessments 

paid by manufacturers of concrete 

masonry units. The initial assessment 

will be $.01 per concrete masonry unit 

sold. 

The Secretary will hold a referendum 

among eligible manufacturers to 

determine whether they favor the 

implementation of the Order. The Order 

only will go into effect if the referendum 

results in the affirmative vote of a 

majority of those voting and also a 

majority of the block machine cavities 

in operation by those voting. The 

Secretary will then appoint members of 

a Board to carry out the duties 

prescribed in the order. Among its 

duties, the Board will establish an 

evaluation and compliance program to 

receive and validate assessments. After 

three years and five years, the Secretary 

will evaluate the appropriateness, 

effectiveness, impact of the program, 

and provide an accounting of 

assessments. 

The first form of this ICR relates to the 

establishment of a Board. If the 

referendum is successful and approves 

the concrete masonry products order the 

Secretary will appoint members and 

establish a Board. Eligible concrete 

masonry product manufacturers will 

complete and submit an application for 

Board membership and will be invited 

to provide any additional information to 

support their application. The Board 

application form is voluntary. 

The second form of this ICR relates to 

the evaluation and compliance program 

required if the referendum is successful 

and approves the concrete masonry 

products order. Eligible concrete 

masonry product manufacturers will 

complete and submit the evaluation and 

compliance form on a quarterly basis. 

Completion of the evaluation and 

compliance form is mandatory. 

Aside from that noted above in the 

IRFA, there are no special skills 

required to complete the application for 

Board membership or the evaluation 

and compliance information. 

The Authorizing Statute: 15 U.S.C. 

Chapter 13 (sections 8701–8717). 

Board Application 

Estimate of Burden: 1.0 hour per 

application. 

Respondents: Manufacturers of 

concrete masonry units. 

Estimated Number of Respondents: 

50. 

Estimated Number of Responses per 

Respondent: 1. 

Estimated Total Annual Burden on 

Respondents: 50. 

The Department will add the Board 

member application form to the other 

information collections approved under 

OMB No. 0605–0028. 

Evaluation and Compliance 

Estimate of Burden: 1 hour per 

quarter. 

Respondents: Manufacturers of 

concrete masonry units. 

Estimated Number of Respondents: 

690. 

Estimated Number of Responses per 

Respondent: 4 per year. 

Estimated Total Annual Burden on 

Respondents: 2,760 hours. 

The Department will add the Board 

member application form to the other 

information collections approved under 

OMB No. 0605–0028. 

National Environmental Policy Act 

This final rule will not significantly 

affect the quality of the human 

environment. Therefore, an 

environmental assessment or 


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Environmental Impact Statement is not 

required to be prepared under the 

National Environmental Policy Act of 

1969. 

Public Comments and Department 

Responses 

The Department published a proposed 

rule setting forth the draft order in the 

Federal Register on August 25, 2020 (85 

FR 52059). The Department made 

available copies of the proposed rule 

through the Office of the Federal 

Register also via the internet at 

www.regulations.gov. That proposed 

rule provided for a 45-day comment 

period. The Department received 

comments from 146 commenters, 

including four commenters that 

submitted during the public comment 

period for the referendum procedures. 

This document sets forth the comments 

the Department received on the Order 

and the Department’s responses. Where 

appropriate, similar comments were 

aggregated together. The comments are 

set forth according to the subject of the 

comment. 

The Initial Regulatory Flexibility Act 

(IRFA) Report and the Department’s 

Economic Analysis 

The Department requested comments 

on the IRFA report. For ease of reading, 

this section addresses those comments 

that were specific to the IRFA and the 

Department’s economic analysis of the 

industry. Some of the comments 

received on these subjects are later 

reinforced by the comments received 

regarding the Order. This may result in 

a perception of repetition; however, any 

such repetition simply will reinforce the 

Department’s goal to address all 

comments received. The Department 

will refer back to this section where 

subject matter overlaps. With regards to 

IRFA and the economic analysis of the 

industry, the Department requested 

comments regarding: 

1. Information about concrete 

masonry unit production, including: 

a. Estimated annual production of 

concrete masonry units for the industry 

as a whole and by business size; 

b. The number and size of entities 

covered under the proposed order, 

including whether production occurs 

among businesses not classified under 

NAICS industry 327331; and 

c. An estimated sales price for 

concrete masonry units. 

2. Whether to include a de minimis 

exemption and what criteria to use for 

an exemption; and 

3. The approach used to estimate the 

impact of the proposed order on 

industry and small businesses and 

suggestions for alternative approaches. 

Comment: 

One commenter provided the 

following information on annual 

production numbers: ‘‘The National 

Concrete Masonry Association (NCMA) 

conducts an annual sales survey of the 

industry. The latest survey was 

completed in 2019 and includes 

information on annual production for 

the calendar year 2018. Based on that 

survey, it is estimated that 1.15 billion 

concrete masonry units were produced 

in the United States in 2018.’’ 

Response: 

The Department referenced this 

NCMA information in its economic 

analysis of the industry. 

Comment: 

Additionally, the commenter provided 

NCMA ‘‘estimates that there are 284 

concrete masonry unit manufacturing 

companies which operate a combined 

627 plant locations. (Reference: NCMA 

2019 CMU Sales Survey). These 

companies operate an estimated 2000 

machine cavities. . . . [The NCMA] 

estimates that the median number of 

machine cavities per concrete masonry 

unit manufacturing company in the U.S. 

is 3, and the average number of 

machine cavities per company is 6. 

While the smallest companies will have 

one machine at one location with 2 or 

3 machine cavities, the largest 

companies have multiple plant 

locations in multiple regions of the 

country and more than 100 cavities.’’ 

Based on this, the commenter 

recommends determining company size 

based on production capacity 

(preferred) or number of production 

locations. The commenter then provided 

proposed categories. 

Response: 

As mentioned previously, to ensure 

the fair, equitable, and diverse 

representation of the concrete masonry 

products industry, the composition of 

the Board will reflect the geographical 

distribution of the manufacture of 

concrete masonry products in the 

United States, the types of concrete 

masonry products manufactured, and 

the range in size of manufacturers in the 

United States. Since the Concrete 

Masonry Products Board should reflect 

the distribution of both size of company 

and types of products produced, the 

Department does not believe a reliance 

on concrete masonry unit 

manufacturing capacity is the correct 

focus. Further, the machines in 

operation can be dual purpose (i.e., 

molds between concrete masonry units 

and non-concrete masonry units on the 

same machine can be interchangeable) 

and therefore a focus on concrete 

masonry unit capacity to determine 

company size could be problematic and 

not be an accurate reflection on 

company size. 

As to using the number of production 

locations as a basis for Board 

membership, the Department does see 

this as a logical alternative but at this 

time the Department does not have the 

data needed to verify the number of 

production locations. 

The Department considered these 

options along with number of 

employees as a measurement and has 

decided to use number of employees to 

determine company size. Using the 

number of employees as a measurement 

is consistent with practices of the U.S. 

Small Business Administration (SBA) 

and the County Business Patterns (CBP) 

data collected by the Bureau of the 

Census on behalf of the SBA. The SBA 

uses the number of employees to 

categorize company size. The survey of 

local businesses provides information 

on the number employees, better reflects 

the entire production of concrete 

masonry products, and is the most 

reliable information currently available. 

CBP is an annual series that provides 

subnational economic data by industry 

and has been in existence since 1946. 

Data reported are for activities occurring 

during the reference year. CBP has been 

published annually since 1964; similar 

data were reported for various periods 

since 1946. The Department believes 

this information is the best available to 

make an accurate count. 

If the industry approves the Order, the 

Board will be able to conduct additional 

surveys that will help better 

characterize the industry. Until such 

time as the Department can obtain 

additional needed reliable data, the 

Department will use SBA and CBP data. 

Therefore, the Department will define 

company size based on the number of 

employees. Companies identified as 

‘‘large’’ will be those with over 500 

employees; companies identified as 

‘‘medium’’ will be those with between 

100–499 employees; companies 

identified as small will be those with 

less than 100 employees. See the general 

comment section under the same 

heading for additional details on the 

Department’s definition of company size 

categories. 

Comment: 

The Department received comments 

from seventeen commenters all opposed 

to having a de minimis exception. Two 

commenters did not endorse the use of 

a de minimis exception but suggested 

that the Department not use number of 

employees as the criteria if the 

Department decides to include a de 

minimis exception. 

Response: 


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After careful consideration, not 

receiving any comments supporting the 

inclusion of a de minimis exception and 

recognizing the lack of complete 

knowledge of the industry composition, 

the Department has decided not to 

include a de minimis exception. The 

Department leaves open the possibility 

to include a de minimis exception after 

a period of time to allow some 

experience of the Order in operation 

and gain a better understanding of the 

affected industry. Until that possible reconsideration, there is no de minimis 

exception and all manufactures of 

concrete masonry units will be subject 

to the assessment should the Order go 

into effect. See the general comment 

section under the same heading for 

additional details on the Department’s 

consideration of the de minimis 

exception. 

Comment: 

With regard to the economic analysis 

and the table [Table 3] presented, one 

commenter pointed out an apparent 

inaccuracy in the total employment 

number of 6,344 data. 

Response: 

The Department recognizes the table 

can cause confusion. The Department 

provided a footnote and hyperlink (from 

the Census Bureau (https://

www.census.gov/programs-surveys/ 

susb/about/glossary.html) that provides 

an additional explanation of the 

information in the table. The following 

reproduces the information associated 

with the hyperlink: 

Enterprise: An enterprise (or ‘‘company’’) 

is a business organization consisting of one 

or more domestic establishments that were 

specified under common ownership or 

control. The enterprise and the establishment 

are the same for single-establishment firms. 

Each multi-establishment company forms 

one enterprise—the enterprise employment 

and annual payroll are summed from the 

associated establishments. 

Enterprise Size: Enterprise size 

designations are determined by the summed 

employment of all associated establishments. 

Employer enterprises with zero employees 

are enterprises for which no associated 

establishments reported paid employees in 

the mid-March pay period but paid 

employees at some time during the year. 

Firm: A firm is a business organization 

consisting of one or more domestic 

establishments in the same geographic area 

and industry that were specified under 

common ownership or control. The firm and 

the establishment are the same for singleestablishment firms. For each multiestablishment firm, establishments in the 

same industry within a geographic area will 

be counted as one firm; the firm employment 

and annual payroll are summed from the 

associated establishments. 

In reading the table remember one 

company can have multiple firms. Therefore, 

of the 430 firms noted in the table, 401 firms 

or 93 percent came from companies 

employing fewer than 500 employees. And 

these 401 firms accounted for 514 

establishments, or 75 percent of all 

establishments, and about 62 percent of the 

employment across the industry. The 

Department has amended the IRFA to make 

the point clear that a company or business 

can be made up of multiple firms. 

Paperwork Reduction Act 

In the proposed rule, the Department 

invited comments on the information 

collection requirements (ICR) prescribed 

in the Paperwork Reduction Act section 

of this rule. Specifically, the Department 

solicited comments on: (a) Whether 

these ICRs are necessary for the proper 

performance of the functions of the 

Department, including whether the 

information has practical utility; (b) the 

accuracy of the Department’s estimates 

of the burden of the ICRs; (c) the quality, 

utility, and clarity of the information to 

be collected; and (d) whether the burden 

of collection of information on those 

who are to respond, including through 

the use of automated collection 

techniques or other forms of information 

technology, may be minimized. 

Comment: 

The Department received one 

comment regarding the information 

collection. The commenter concurred 

with the time and burden estimate for 

completing the individual forms. 

However, the commenter believed the 

Department overestimated the total 

annual burden of completing the 

evaluation and compliance form. The 

commenter suggested companies vice 

establishments for the form and 

believed the number of companies to be 

approximately 286. 

Response: 

The Department used 690 

establishments in its estimates. 

Currently information on the number of 

manufacturers in this industry is not 

complete. Until such time as the 

Department has better information on 

companies, firms, and establishments 

within this industry and how the 

industry will respond to reporting 

requirements, the Department chooses 

to err on the side of overestimating and 

will use the number of establishments 

(690) in its annual burden estimate of 

the number of respondents. 

Concrete Masonry Units and Concrete 

Masonry Products 

Comment: 

One commenter opined that the only 

product that should be listed in the 

definition of concrete masonry units is 

gray block. 

Response: 

The Department provided a list of the 

products it considers qualify as a 

concrete masonry unit. The list reflects 

those concrete masonry products that 

fall within the definition of concrete 

masonry unit—a concrete masonry 

product that is manmade masonry unit 

having an actual width of 3 inches or 

greater and manufactured from dry-cast 

using a block machine. Such term 

includes concrete block and related 

concrete units used in masonry 

applications—a more expansive 

category than only gray block. As there 

were no other comments in opposition, 

the Department will use this nonexhaustive list of examples to identify 

those products that qualify as a concrete 

masonry unit. 

Comment: 

One commenter pointed out that use 

of ‘‘or’’ vice ‘‘and’’ in the definition of 

‘‘masonry unit’’ opens to assessments 

products not contemplated to be subject 

to assessment. The wording in the Act 

is ‘‘. . . noncombustible building 

product laid by hand or joined using 

mortar, grout, surface bonding, posttensioning or some combination of these 

methods.’’ On the same subject, one 

commenter asked the Department to 

refine the definition of masonry unit or 

give notice to include concrete pavers 

and segmental retaining wall units as 

being subject to assessment. 

Response: 

The commenter attempts to show an 

apparent inconsistency within the Act. 

However, the Department reads this 

definition differently and finds the term 

‘‘or’’ combines two thoughts, both of 

which require joining the concrete 

masonry units with a bonding agent. 

While both readings may be 

grammatically correct, the other 

definitions the Act provides supports 

the Department’s reading of this 

definition. 

In its definition of concrete masonry 

products, the Act refers to a broader 

class of products that would include 

concrete masonry units as well as 

hardscape products such as concrete 

pavers and segmental retaining wall 

units. In its definition of concrete 

masonry products, the Act makes clear 

that hardscape products (concrete 

pavers and segmental retaining wall 

units) are a concrete masonry product 

distinct from concrete masonry units. 

Further, the Act defines as unique terms 

‘‘concrete masonry unit’’ and ‘‘masonry 

unit.’’ Concrete masonry unit is a subset 

of masonry units. The Act defines 

masonry unit as a noncombustible 

building product intended to be laid by 

hand or joined using mortar, grout, 

surface bonding, post-tensioning or 

some combination of these methods. 


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In its American Standard Building 

Code Requirements for Masonry the 

National Institute of Standards and 

Technology (NIST) certainly captures 

within its definition of masonry a 

‘‘bonding together.’’ Naturally a 

masonry unit would contemplate a 

bonding together of units. The 

definitions provided by the Act also 

supports the conclusion that a masonry 

unit suggests a bonding together. Those 

products laid by hand without a 

bonding agent are the hardscape 

products that the definition of concrete 

masonry products distinguishes as 

outside of concrete masonry units. 

Therefore, the Department finds that 

the word ‘‘or’’ combines the following 

two thoughts: 

. . . building product intended to be laid by 

hand using mortar, grout, surface bonding, 

post tensions or some combination of these 

methods, or 

. . . building product intended to be joined 

using mortar, grout, surface bonding, post 

tensions or some combination of these 

methods. 

Although the wording and sentence 

structure is admittedly somewhat 

confusing, the interpretation above 

aligns with the other definitions, NIST 

standards for masonry which are 

accepted nation-wide and 

internationally, and the intent of the Act 

to assess concrete masonry units and 

not the broader class of products that 

includes pavers and segmental retaining 

walls. As stated previously, hardscape 

products such as pavers and segmental 

retaining wall units are not concrete 

masonry units and therefore are not 

subject to assessment under this order. 

Comments in Full Support of the 

Proposed Order 

Comment: 

Thirty commenters communicated 

support of the proposed Order, without 

specifying particular attributes. Most 

spoke enthusiastically about the 

prospect of having funding available to 

conduct research, education, and 

promotion programs. 

Comment: 

53 commenters highlighted that the 

program will increase sales and job 

growth. Many commenters noted that 

the softwood lumber building industry 

has successfully implemented its own 

Checkoff program. The commenters 

viewed a Checkoff program as a vital 

initiative and one that will help them 

better compete in the building products 

market. 

Comment: 

45 commenters espoused the 

resiliency of concrete masonry units as 

a construction material, specifically 

calling attention to its resistance to 

extreme weather and wind conditions, 

its durability against natural disasters 

and earthquakes, fire safety features, 

and generally safer structures. 

Commenters believed if a checkoff 

program is implemented, a priority 

should be given to conducting an 

information campaign that highlights 

these attributes. 

Comment: 

28 commenters identified regional 

training and workforce development as 

priorities for future growth. The 

commenters envisioned a more robust 

training program at both the university 

level and trade schools. Commenters 

believed Many universities have 

dropped the building trades from their 

curriculum. Commenters had a stated 

desire to reverse this trend. One 

commenter felt the program could 

promote wider use of software programs 

and other tools in the engineering and 

construction design of structures. 

Comment: 

26 commenters supported engaging in 

a messaging campaign targeting 

designers, architects, engineers in an 

effort to impact local building codes in 

favor of concrete masonry as the 

building product of choice. 

Comment: 

Ten commenters voiced a desire to 

fund research to determine the true 

environmental impact of concrete 

masonry units, believing such research 

will show that over their life, concrete 

masonry units reduce the carbon 

emissions (especially when offset by 

carbon recovery) and have a low 

environmental impact as compared to 

other building materials. In addition, 

commenters believed there were 

manufacturing aspects to explore that 

will further reduce the carbon footprint 

of concrete masonry units. 

Response: 

The Department appreciates all public 

comments both in support or opposed to 

the Order and finds them all very 

constructive. The Department remains 

committed to its neutral position as to 

the ultimate outcome of the referendum. 

By publishing all comments, the 

Department continues its full support of 

the industry as a whole and the decision 

the industry ultimately chooses. 

Comments Against or Reflecting a 

Desire for Changes 

Regional and State-Based Checkoff 

Programs 

Comment: 

Fourteen commenters, primarily from 

concrete masonry unit producers in the 

State of Florida, supported a voluntary, 

State-based checkoff program in lieu of 

a national, mandatory program. Several 

commenters noted ‘‘the State of Florida 

has had a voluntary program in 

operation for a number of years.’’ 

Several reinforced the thought of one 

commenter that ‘‘the State program has 

been effective in serving local concrete 

masonry units (CMU) initiatives and 

need’’ and that ‘‘Florida CMU 

companies view the Proposed Order as 

another ‘‘TAX’’ on Florida companies.’’ 

Another commenter stated that 

‘‘manufacturers should not be 

compelled to participate or contribute to 

any program, let alone one that seems 

to have been conceived without full 

regard for the state and nature of their 

individual businesses or markets, or one 

that has not clear direction, strategy or 

philosophy.’’ Another commenter 

succinctly provided that ‘‘I now 

conclude that I don’t think a national 

Check Off program is right for my 

industry. Instead, the program should 

be at the state level, which will be far 

more efficient and effective at 

addressing local and regional interests.’’ 

In opposition to a voluntary program, 

another commenter observed that ‘‘as 

we’ve seen over time that it is kind of 

the 80–20 rule. 80% of the companies 

watch as 20% of the companies 

consistently contribute. Our industry 

needs 100% participation’’. 

Response: 

While nothing prevents the industry 

from creating a ‘‘voluntary’’ checkoff 

program, the Act does not authorize the 

Department to establish a ‘‘voluntary’’ 

checkoff program. 

The Act authorizes the Department to 

establish a ‘‘checkoff’’ program under a 

National Board that will collect an 

established assessment. The ‘‘checkoff’’ 

program is for research, education, and 

promotion, including funds for 

marketing and market research 

activities, that promote the use of 

concrete masonry products in 

construction and building. Government 

checkoff programs facilitate cooperation 

within industries dominated by 

relatively small producers that produce 

a commodity that is not easily 

differentiated by manufacturer. 

Typically, manufacturers acting alone 

do not have the resources to efficiently 

market the value of the product or 

conduct the research and education to 

promote market growth. Government 

checkoff programs facilitate cooperation 

within an industry and allow for a 

comprehensive, industry-wide strategy 

to expand markets. 

One purpose of a nationwide checkoff 

is to promote a commodity as a whole, 

instead of by individual businesses, 

meaning participants in the industry 

benefit from economies of scale in 

conducting research, education, and 


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promotion for the entire industry. The 

goal of a checkoff program is to enhance 

consumer awareness nationwide which 

may lead to increased sales and higher 

overall demand for masonry products. 

Another purpose of Government 

involvement in checkoff is to enforce 

the remittance of assessments by the 

manufacturer to the Board. If the Order 

goes into effect, the payment of 

assessments will be mandatory. The Act 

and Order provide ‘‘. . . that 

assessments shall be paid by a 

manufacturer if the manufacturer has 

manufactured concrete masonry 

products during a period of a least 180 

days prior to the date of the assessment 

is to be remitted.’’ 15 U.S.C. 8705(a). 

However, the Order is not automatic 

but rather is subject to a vote among the 

affected industry. The Order will only 

go into effect if approved by a majority 

of manufacturers that participate in the 

referendum and if they also represent a 

majority of the machine cavities in 

operation. 

Comment: 

Three commenters suggested 

exempting Florida from the national 

program and twelve suggested making 

Florida its own region. Another 

commenter suggested including a sixth 

region by removing Florida from Region 

2 and making it its own region. Two 

commenters suggested simply providing 

an opt-out option for segments of the 

industry or individual manufacturers. 

Similarly, regarding region makeup, 

one commenter stated ‘‘the Order does 

not explain how funds might be used to 

support smaller districts within a 

geographic region. For example, Region 

V includes Alaska, California, Colorado, 

Hawaii, Idaho, Montana, Nevada, 

Oregon, Utah, Washington, and 

Wyoming. This region spans over 3,000 

miles from east to west and over 2,000 

miles north to south. It is naive to assert 

that the same programs and projects 

will support the varying needs of 

Hawaii, Alaska, California, and Idaho.’’ 

Another commenter voiced a specific 

concern of ‘‘the unique climate and 

geographic isolation of states’’ such as 

Hawaii and Alaska. And another 

commenter voiced concern that ‘‘while 

50% of the money is to go back to the 

region it was collected, I feel it could be 

difficult to develop programs that would 

benefit the regions as a whole. 

Individual markets within the regions 

could be vastly different and therefore 

different programs could be needed for 

each individual market.’’ 

Response: 

With regard to designating the 

geographic regions, the Order uses the 

same language as is found in the Act 

and Florida is within Region 2. 

Anticipating the potential need to better 

reflect the industry needs or adapt to 

changes in manufacturing, the Act and 

the Order specifically provide a method 

for adjustment of geographic regions. 

While there is no provision to change 

the number of regions, upon a 

recommendation of the Board, the 

Secretary may modify the composition 

of the geographic regions described in 

the Act. So, in the future, the 

composition of the five geographic 

regions may change based on findings 

and recommendations of the Board. 

There is no restriction as to when the 

Board can do this. The Department has 

amended the Order to better reflect the 

freedom of the Board to recommend 

adjustments to the geographic regions 

established in the Act. 

Although not required in the Act, the 

order then subdivides the five regions 

into 15 districts. Dividing the regions 

into districts will assist in adequately 

reflecting the geographic regional 

diversity of the Board and it will allow 

the Board to more easily manage the 

program, for example use of the district 

structure will assist in making sure 

allocation of funding is equally 

dispersed within a region, it will allow 

consideration of programs to be more 

specialized, it will better address the 

more localized, disparate, and unique 

characteristics found within a given 

region, and it will enable the Board to 

tailor programs to meet more localized 

needs. Additionally, the district 

structure is readily adaptable as the 

Board may at any time recommend 

adjustments to the number, 

composition, and structure within the 

regions. 

As stated previously, if the industry 

votes the Order into effect, the payment 

of assessments will be mandatory. 

Allowing for an opt-out option would be 

counter-productive and defeat the 

purpose of the Act. 

De Minimis Exception 

Comment: 

Seventeen commenters voiced 

opposition to the consideration of 

including a de minimis exception. 

Response: 

The Department recognizes that some 

small businesses with minimal 

production in the industry may not have 

the resources to comply with the 

requirements imposed by the proposed 

order, and therefore, the Department 

requested comments on whether the 

Department should consider a de 

minimis exception for these small 

businesses. A de minimis exception 

would exclude from the order some 

small businesses with minimal 

production, based on measures of unit 

production, employment, receipts, 

machine cavities, or other relevant 

criteria. 

Of particular note, of those 

commenting on the potential exception, 

eleven stated they were a small business 

and believed it only fair to be included 

in assessments as they would also reap 

the benefits of research, education, and 

promotion programs the checkoff 

program puts into effect. 

As previously stated in the section 

concerning FRFA, after careful 

consideration, not receiving any 

comments supporting the inclusion of a 

de minimis exception, the Department 

has decided not to include a de minimis 

exception. The Department leaves open 

the possibility to reconsider the 

application of a de minimis exception 

based on observations following the 

execution of the Order, the input of the 

Board, and lessons learned after 

implementation of the program. Until 

that re-consideration, there is no de 

minimis exception and all 

manufacturers of concrete masonry 

units will be subject to the assessment 

should the Order go into effect. 

Company Size 

Comment: 

The Department requested comments 

on the proper determinant for company 

size. Two commenters suggested that 

production capacity or revenue would 

be a better method to determine if a 

company is categorized as small, 

medium or large. One commenter 

mentioned that recent trends of 

automation in concrete block 

manufacturing have resulted in the use 

of fewer employees while increasing 

manufacturing output. One commenter 

thought that considering manufacturing 

capacity rather than number of 

employees is a more practical measure 

of size. 

Response: 

The Act sets out the criteria to ensure 

diverse representation of the industry in 

selecting Board members. The Secretary 

will add these criteria into her plan for 

proper Board composition, the 

Department will follow this plan to help 

attain a diverse representation of 

members for the Board selection 

process. One criterion prescribed by the 

Act is that Board members reflect the 

‘‘range in size of manufacturers in the 

United States.’’ 

As previously stated in the section 

concerning the IRFA, the Department 

used the company size information 

based on the SBA table of company size 

standards. Like the SBA, the 

Department used 500 as the employee 

number between small and large. To 

create a range in size, the Department 


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broke size down as small, medium, and 

large. To determine the number for each 

category the Department used Census 

data (2017 County Business Patterns 

and 2017 Economic Census). The 

Department used Table 3 to ascertain 

firm size and distinguish between those 

of ‘‘medium (20–499 employees)’’ and 

‘‘small (0–19 employees).’’ Although 

SBA would define the latter two 

categories as small, the Department used 

Census categories and did not refine the 

size of business beyond that reflected in 

the Census provided data. 

The numbers the Department used 

provide a satisfactory distribution 

between size of firms based on available 

Census data—resulting in 

approximately 35% of the firms that are 

small sized, approximately 40% of the 

firms that are medium-sized, and 

approximately 25% that are large-sized. 

The Department believes these 

percentages provide the needed balance 

and diversity of perspective for Board 

representation purposes. 

If the requisite information becomes 

available, for instance through the 

evaluation and compliance process, to 

make a more refined distinction— 

whether based on production capacity 

or further refining company size—the 

Department will consider any such 

recommendation made by the Board. 

Funding for Regional Initiatives 

Comment: 

Five commenters spoke on the subject 

of the assessments received by the 

Board. Commenters stated the proposed 

Order provides a return of 50% of 

assessments to each of the five regions. 

The allocation of the remaining 50% 

would be decided by the Concrete 

Masonry Products Board. Commenters 

voiced concern that ‘‘the allocation of 

these Concrete Board held funds will 

not be fair and equitable and may 

benefit one or more regions at the 

expense of other regions.’’ One 

commenter thought the disbursement of 

funds ‘‘defective because there were no 

assurances that any funds from our 

market would work its way back to our 

state’’ One commenter was worried the 

size and geographic distribution of its 

region would preclude it receiving 

funds stating ‘‘[w}e would gladly 

support and vote for the check-off 

program if we were confident that at 

least some of the funds from this 

program would be used to bolster our 

individualized market.’’ One commenter 

stated the Order does not ‘‘clarify how 

it proposes to ensure that assessment 

funds would go to support geographic 

regions and apply equally throughout 

those regions.’’ One commenter views 

Florida concrete masonry unit 

manufacturers as ‘‘contributing much 

more than the return they will ever 

receive. This is a bad deal for us, 

period.’’ 

Response: 

The Order uses the same language as 

is found in the Act. Specifically, the Act 

stipulates that ‘‘[t]he order shall provide 

that not less than 50 percent of the 

assessments (less administration 

expenses) paid by a manufacturer shall 

be used to support research, education, 

and promotion programs and projects in 

support of the geographic region of the 

manufacturer.’’ 15 U.S.C. 8705(f)(1). 

The Act (and the Order) provide 

fairness by stipulating that at least 50 

percent of assessments collected from a 

region be used to support that region. 

The Board will base the return for 

regional initiatives on assessments 

collected from a given region. Since the 

return directly relates to the assessments 

collected from a region, it will not affect 

the benefit received by other regions. 

Assessments collected and subsequent 

regional support remain proportional to 

the collected assessment funds. A region 

receiving more support than another 

also paid a higher amount and therefore 

contributes more to the national 

program, for the benefit of all. 

Remember, the 50 percent 

requirement is a minimum, the Board 

has the authority to provide a higher 

percentage back to all the regions. By 

allocating at least 50% back to the 

regions, the order ensures some 

investment will be earmarked to go back 

to the region while leaving enough to 

fund national research, education, and 

promotion initiatives. 

The Board will establish procedures 

for making certain that they are 

returning the appropriate amounts to 

each region. While the formal process of 

receiving and distributing assessments 

has not yet been established, the Order 

provides that within 180 days of their 

initial meeting, the Board will provide 

for review and approval by the Secretary 

a proposed evaluation and compliance 

program and its plan to verify 

compliance with the Act. The 

evaluation and compliance program will 

provide the method and metrics to use 

to help determine program effectiveness 

and will outline the way the Board will 

receive assessments, how to verify 

compliance, the best method to track 

sales, and how to document all actions. 

The Department has added a stated 

requirement for the Board to include in 

the evaluation and compliance program 

the process by which the Board will 

meet statutorily-mandated disbursement 

of collected assessments. 

Comment: 

A commenter voiced the opinion that 

it would be ‘‘a far more efficient 

expenditure of a business’ hard-earned 

money to let them invest 100% of that 

money in their own regional and local 

trade associations, of which there are 

many.’’ Commenting on the overall 

program and amount coming back to 

each region, another commenter 

thought ‘‘[t]hat [it] is not a good 

investment.’’ 

Response: 

The Department does not make any 

conclusions on the efficacies of a 

checkoff program or the worthiness of 

the various choices an entrepreneur may 

have to use its business profits. The 

Order provides a method by which 

manufacturers may use pooled 

resources to further industrywide 

initiatives and better coordinate 

amongst themselves. The 

implementation of this Order relies 

entirely on an affirmative vote by the 

industry in a referendum. Certainly, a 

negative vote would provide the ability 

to invest 100% of their money allocated 

for these types of endeavors toward 

regional and local trade associations. A 

positive vote does not preclude a 

company from continuing to invest in 

regional and local trade associations but 

would add to it a program that is 

national and more expansive then those 

that are regional and local. It is an 

investment decision left entirely to the 

industry. 

Board Composition and Process 

Comment: 

Thirteen commenters expressed a 

negative view of the Board composition. 

Two commenters wanted to ensure 

equitable representation on the state 

level. Two commenters shared the view 

that the number of board members per 

region should be based on other factors 

such as number of CMU producers or 

sales volume per region. Two 

commenters voiced a concern about a 

Board member’s qualifications to 

represent the industry and one 

commenter stated there is no guarantee 

that each region will have two 

representatives. 

Response: 

The Act proposes that the Board 

composition would consist of not fewer 

than 15 and not more than 25 members 

and provides the criteria to ensure 

diverse representation of the concrete 

masonry products industry on the 

Board. To ensure fair and equitable 

representation of the concrete masonry 

products industry and appropriate 

representative diversity as outlined in 

the Act, the composition of the Board 

‘‘shall reflect the geographical 

distribution of the manufacture of 


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concrete masonry products in the 

United States, the types of concrete 

masonry products manufactured, and 

the range in size of manufacturers in the 

United States.’’ These criteria are the 

elements the Department will use to 

help create its plan for proper Board 

composition. The plan will assist in 

discerning a prospective member’s 

qualifications to represent the industry. 

The Secretary’s selection emphasis will 

be on attaining the goals for a diverse 

representation on the Board and will 

use the plan to help achieve these goals. 

The Act stipulates five geographic 

regions and the States which make up 

each geographic region. The geographic 

regions found in the Order reflect 

Congressional judgment as to a fair 

balance and geographic distribution of 

manufacturers in the United States. 

The Secretary will use this plan for 

proper Board composition during 

selection process to appoint Board 

members. Once the Order and Board are 

in place, the Act provides for changes in 

the states that make up a given region. 

Specifically, the Act instructs that the 

Board shall have the power and duty to 

recommend to the Secretary the 

reapportionment of the Board 

membership to reflect changes in the 

geographic distribution of the 

manufacture of concrete masonry 

products, and the types of concrete 

masonry products manufactured. At a 

minimum the Board must conduct a 

review of the Board representation after 

three years and at the end of each threeyear period thereafter. If the Board finds 

it warranted, the Board will provide to 

the Secretary for review and approval 

modifications to the geographic regions 

described in the Act and reflected in the 

proposed Order. See 15 U.S.C. 

8705(f)(3). 

So, while the number of regions will 

remain static at five, the Board has the 

power and duty to recommend to the 

Secretary modifications to the 

Geographic regions in the future to 

reflect the geographical distribution of 

the manufacture of concrete masonry 

products and the types of concrete 

masonry products manufactured. 

The three-year requirement is a 

minimum and applies to Board 

membership reflecting the distribution 

of producers from regions across the 

country—referred in the Act as 

reapportionment Recommendations to 

adjust the geographic regions has no 

such minimum and could be done at 

any time at the Board’s discretion. The 

Department has changed the Order to 

make explicit this distinction and 

additional discussion of the Board’s 

authority to modify the composition of 

geographic regions. 

Comment: 

Two commenters thought that the 

Board is not representative of the 

industry. 

Response: 

The Act specifically provides the 

manner in which the Department will 

ensure fair, equitable, and diverse 

representation of the concrete masonry 

products industry. Specifically, ‘‘the 

composition of the Board shall reflect 

the geographical distribution of the 

manufacture of concrete masonry 

products in the United States, the types 

of concrete masonry products 

manufactured, and the range in size of 

manufacturers in the United States.’’ As 

stated above, the Secretary will use 

these same criteria to form the plan or 

proper Board composition and then 

follow the plan to help achieve the goal 

of fair, equitable, and diverse Board 

representation of the concrete masonry 

products industry. 

Comment: 

On the subject of districts, one 

commenter thought the Department did 

not provide enough explanation as to 

why the proposed Order states only that 

the districts will ‘‘allow the Board to 

more easily manage the program.’’ The 

commenter thought this summary 

justification ‘‘is very thin.’’ 

Response: 

Although not required in the Act, the 

Order subdivides the five geographic 

regions into 15 districts. As mentioned 

previously, some examples of how 

district structure will allow the Board to 

more easily manage the program 

include: Use of the district structure 

will assist in making sure allocation of 

funding is equally dispersed within a 

region, it will allow consideration of 

programs to be more specialized and 

better address the more localized, 

disparate, and unique characteristics 

found within a given region, and it will 

enable the Board to tailor programs to 

meet more localized needs. 

Additionally, the district structure is 

readily adaptable as the Board may at 

any time recommend adjustments to the 

number, composition, and structure 

within the regions. The Department has 

added further explanation on the 

functional purpose of districts to the 

Order. 

Comment: 

One commenter felt that with ‘‘States 

assigned their own district by the 

Proposed Order, it is highly likely that 

such states will use their Board 

representation to ensure the programs 

and projects favor their state, as they 

receive the same representation as a 

district consisting of as many as six 

other states.’’ 

Response: 

The Act sets out the criteria to ensure 

diverse representation of the industry in 

selecting Board members. The 

Department will adopt these criteria 

into the plan for proper Board 

composition that it will use to help 

during the Board selection process. One 

of the criteria prescribed by the Act is 

that Board members reflect the 

‘‘geographic distribution of the 

manufacture of concrete masonry 

products in the Unites States.’’ The Act 

establishes the geographic regions and 

the plan for proper Board composition 

will reflect these regions. To help 

ensure equitable regional distribution 

and for ease of Board management of the 

program, the Order further breaks down 

the regions into districts (see above 

management discussion regarding 

districts). But keep in mind that, while 

the Secretary will strive to make 

appointments that include every 

district, the Secretary’s primary focus 

will be on ensuring the regional 

diversity of Board representatives. 

District representation is a secondary 

criterion and not a statutorily mandated 

requirement. The Board, as 

representative of the entire industry, 

will base all its actions on a vote of all 

Board members, where each Board 

member would be entitled to one vote, 

and that a motion would carry if 

supported by one vote more than 50 

percent of the total votes represented by 

the Board members participating. There 

is one exception, however, as the Act 

requires that a two-thirds majority of the 

voting members of the Board is required 

to approve a change in the assessment 

rate. 

Comment: 

One commenter noted that while 

focusing its attention on geographic 

diversity, the Proposed Order (at 

§ 1500.40(b)(2)) ‘‘would permit as much 

as 13% of the Board to come from a 

single company. A large company might 

well benefit from this provision and we 

believe it is unjust and detrimental to 

the industry to permit such 

overrepresentation on the Board.’’ 

Response: 

While the intent is unknown, the Act 

limits the maximum to two members 

from any single company or its affiliates 

that may serve on the Board at any one 

time. A possible reason is to ensure 

diversity of views by not letting a single 

company dominate the Board. But 

remember, it is a maximum of two and 

not a requirement of two and the Board 

can consist of a range of between 15 and 

25 members. 

As the commenter notes, this 

particular element reflects limits on 

Board composition and does not fall 

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pronged selection criteria that will be a 

part of the Department’s plan to help 

ensure diversity of representation on the 

Board. So, if the Secretary appoints two 

members from a single company, that 

selection will automatically exclude 

from consideration additional 

candidates from that same company. 

The distribution of appointments 

section of the Act, provides the criteria 

to use to ensure the composition of the 

Board reflects a diverse representation 

of the concrete masonry products 

industry. Those criteria, and the 

elements the Department will use to 

help create its plan for proper 

composition of the Board, are 

‘‘geographic distribution of the 

manufacture of concrete masonry 

products in the United States, the types 

of concrete masonry products 

manufactured, and the range in size of 

manufacturers in the United States.’’ 

The Secretary’s selection emphasis will 

be on attaining the goals for a diverse 

Board representation with the requisite 

expertise and will use the plan to help 

achieve a Board that is representative of 

the industry. 

Potential Benefits of a Checkoff Program 

Comment: 

One commenter recognized the merit 

for commercial contractors and 

architectural programs but noted that 

‘‘the program provides no real value to 

the Do-It-Yourself consumer.’’ 

Response: 

The stated purpose of the Act and the 

Order is to strengthen the position of the 

concrete masonry products industry in 

the domestic marketplace; maintain, 

develop, and expand markets and uses 

for concrete masonry products in the 

domestic marketplace; and promote the 

use of concrete masonry products in 

construction and building. 

The checkoff program facilitates 

industry-wide activity. Coordinated 

activity enables producers to leverage 

economies of scale in conducting 

research, education, and promotion of 

the industry and support the demand 

for concrete masonry products 

nationally. Oversight by the Secretary of 

Commerce would ensure that Board 

actions comply with the intended 

purposes of the Act and that concrete 

product manufacturers share in program 

expenses as specified in the Act. 

The assessments pay for programs 

that are intended to yield direct benefits 

to concrete product manufacturers in 

the form of new markets and increased 

consumer demand. Costs are expected 

to result in benefits to businesses that 

are at least commensurate with these 

costs. Additionally, research, education, 

and promotion programs could provide 

benefit to the general consumer and DoIt-Yourselfer with additional 

information in which to make an 

informed decision with regard to 

building materials. 

Escrow Account 

Comment: 

The Proposed Order requires that 

27% of assessments must be held in 

escrow for the first ten years after 

implementation. Fifteen commenters 

were opposed to this requirement and 

frequently cited to this as an example of 

government overreach. One commenter 

pointed to the apparent ‘‘unfair’’ 

treatment when compared to other 

checkoff programs. And another 

commenter thought the limitation on 

the Board’’ ‘‘to spending not more than 

73% of income and that is before 

expenses. That is not a good 

investment.’’ Another commenter 

remarked that they did not find a single 

other checkoff program that levies this 

requirement on assessments in this 

manner. 

Response: 

The commenters are correct; thus far 

the requirement to establish an escrow 

account of this magnitude only exists in 

this Act. The Order uses the same 

language as is found in the Act, 

specifically the Board may not obligate 

an amount greater than 73 percent of 

that collected in fiscal years 1–8 and 62 

percent of that collected in fiscal years 

9 and 10. 

The Department has been very 

diligent in following the Act and does 

so here. However, as a way or 

explanation for the apparent uniqueness 

of this section appearing in this Act, the 

Department offers the following. At the 

recommendation of the Congressional 

Budget Office (CBO), Congress included 

this section to remain compliant with 

the statutory Pay-As-You-Go Act of 2010 

(See 2 U.S.C. 931). The Department 

published with the Order supporting 

documents on Regs.gov (see https://

www.regulations.gov/ 

document?D=DOC-2020-0002-0004). 

The Department included as a 

supporting document, the CBO report in 

its entirety. All programs going into 

effect after 2010 are subject to 

compliance with the Pay-As-You-Go Act 

of 2010. Therefore, the Concrete 

Masonry Products Research, Education, 

and Promotion Act of 2018 would be 

subject to the Pay-As-You-Go Act. By 

way of a counter example, all current 

agricultural checkoff programs are 

under a statute that predates the Pay-AsYou-Go Act. The Pay-As-You Go Act 

establishes budget-reporting and 

enforcement procedures for statutes 

affecting direct spending or revenues of 

the Federal government. The Concrete 

Masonry Products Research, Education, 

and Promotion actualizes these 

requirements using an escrow account 

as outlined in 15 U.S.C. 8715, 

Limitations on obligation of funds. 

The Act defines the covered period 

for the limitations as that period that 

begins on October 5, 2018, and ends on 

the last day of the 11th fiscal year that 

begins on or after such date (i.e., end of 

fiscal year 2029 or September 30, 2030). 

After the covered period, the Board may 

withdraw and obligate in any fiscal year 

an amount in the escrow account that 

does not exceed 1⁄5 of the amount in the 

escrow account on the last day of the 

covered period. The Department has 

revised the Order to better reflect the 62 

percent limitation in fiscal years 9 and 

10 and the final 11th year that ends 

September 30, 2030, as stipulated in the 

Act. 

Government Authority To Implement a 

Checkoff Program 

Comment: 

Four commenters thought the 

proposed Order was too vague in 

defining the limits of government 

authority and fourteen commenters 

believe the Order was an example of 

Government intrusion. The comments 

expressed a concern that the proposed 

Order provides more government 

oversight, more overhead, unchecked 

authority to intrude and scrutinize 

company operations, another 

government entity involved in a 

privately-owned producer’s daily 

operation, and of just another chance 

for the government to get their hands on 

more of our hard-earned dollars. One 

commenter summarized the view— 

‘‘when was the last time we have looked 

at a government program and thought 

that is how I would want my business 

to be run. These programs usually start 

out with the best of intentions and then 

spiral out of control.’’ Another 

commenter thought there should be a 

vote after a one or two years to 

determine whether to continue the 

program. 

Response: 

The Act and Order confine the 

Secretary’s authority to the subject 

matter of the Act, specifically 15 U.S.C 

8701–8717. The Secretary does not 

exercise any authority or control outside 

the bounds of the Act. 

The Board, the composition of which 

is representative of the industry, will 

administer the order and receive 

assessments. It is the Board that carries 

out the programs and projects of 

research, education, and pays the costs 

of such programs and projects. The 

Department does not have access to the 


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program funds and the exercise of its 

authority is limited to ensuring the 

Board and industry properly carry out 

the provisions of the Act and Order. 

The Department’s role with respect to 

individual companies is in the form of 

as-needed evaluation and compliance. 

Evaluation, as noted by several 

commenters, will help ascertain the 

effectiveness of the program. The Act 

requires several studies and reports on 

the subject of program effectiveness. 

These reports (at proscribed intervals of 

annual, biennial, three-year, and fiveyear) will be available for public review 

and will provide several opportunities 

for those affected by the program to 

discern whether the proposed benefits 

have met expectations. With regard to 

compliance, the mandatory nature of the 

Act requires the Department to enforce 

the payment of assessments as 

prescribed by the Order and carried out 

by the Board. 

Additionally, the Act and Order 

provide a mechanism to conduct a 

‘‘sunset’’ referendum at five-year 

intervals to determine whether to 

continue the program. These potential 

‘‘sunset’’ referenda are triggered at the 

request of at least 25 percent of the 

affected industry (those eligible to vote). 

Comment: 

One commenter thought the Order 

calls for what seems to be an intrusion 

into the affairs of private business. 

Another commenter voiced concern that 

the ‘‘Order allows for the audit and 

inspection of the financial records of 

manufacturers. It also requires that 

these records be retained for at least 7 

years.’’ Another commenter thought it 

would impact competitive bidding from 

vendors. Another commenter was 

concerned there were no assurances of 

3rd party auditing of a company’s books 

Response: 

To provide the Secretary with needed 

authority to ensure compliance with the 

Order, the Act provides the Secretary 

the authority to require manufacturers 

to retain sufficient records to ensure 

compliance with the order and 

authorizes the Secretary to inspect those 

records the Act requires companies to 

maintain. Without this authority, the 

Secretary would have no ability to 

enforce the requirements of the Act and 

its Order. The requirement to retain 

records and allow for the Secretary to 

inspect such records does not equate to 

making a company’s financial records 

available for public scrutiny and does 

not create the opportunity for vendors to 

use the information to its benefit in 

bidding. The seven-year requirement 

found in the order reflects the generallyrecommended retention time for 

business records. Lastly, the Act 

requires all manufacturers covered by 

the order to make records available for 

inspection, that inspection will only be 

by an agent or employee of the Board or 

Department and not a third party. 

Program Evaluation 

Comment: 

Three commenters voiced a concern 

that the Order lacked adequate 

measures of success or effectiveness. 

Response: 

Evaluation and effectiveness are very 

important to the Department and 

reviewing this order to make sure it 

achieves the Act’s purpose is foremost. 

Within 180 days of the first Board 

meeting, the Secretary requires the 

Board to provide for approval an 

evaluation and compliance program that 

the Board will follow. This program will 

include the method and metrics the 

Board will use to help determine 

program effectiveness. Further, the 

Department has added a section to the 

Order that requires the Board to 

establish annual research, education, 

and promotion objectives and 

performance metrics for each fiscal year 

subject to approval by the Secretary. 

This same requirement appears in the 

Act at 15 U.S.C. 8704(i). Objectives and 

performance metrics should consider 

and reflect those listed in 15 U.S.C. 

8716. The Board will make all objectives 

and metrics available for public review. 

In addition to these added 

requirements, there are several reports 

that will study the success and 

effectiveness of this checkoff program. 

The Act requires the Secretary to 

prepare a study and submit to Congress 

a report examining the appropriateness 

and effectiveness of applying the 

commodity checkoff program model to 

a nonagricultural industry, taking into 

account the program established by this 

chapter and any other checkoff program 

involving a nonagricultural industry 

(see 18 U.S.C 8717). 

Further, the Secretary requires the 

Board to fund an independent 

evaluation of the effectiveness of the 

Order and other programs conducted by 

the Board after five years and every 

three years thereafter. 

Lastly, the Order requires the Board to 

prepare and make publicly available 

comprehensive and detailed reports that 

identify and describe all programs and 

projects undertaken by the Board during 

the previous two years, those planned in 

the subsequent two years, and detail the 

allocation of Board resources for each 

such program or project. 

To ensure full transparency of Board 

operations, reports also will include the 

overall financial condition of the Board, 

a summary of the amounts obligated or 

expended during the two preceding 

fiscal years, and a description of the 

extent to which the objectives of the 

Board were met according to the 

established annual objectives and 

performance metrics. The table below 

provides a quick overview of the reports 

the Board and Department will produce 

to ensure transparency of the checkoff 

program and its operations. 


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Purpose of the Order 

Comment: 

The Act sets the initial assessment 

rate at one cent per concrete masonry 

unit sold. Three commenters stated 

concrete masonry product 

manufacturers not subject to the 

assessment should not be eligible to 

become Concrete Board Members ‘‘as a 

matter of fairness’’ and ‘‘to ensure that 

assessment funds are appropriately 

spent for the benefit of those 

manufacturers that are assessed,’’ i.e., 

the Board should not include 

manufacturers that do not pay 

assessments. Ten commenters suggested 

more broadly that the Department 

change the language throughout the 

Order to reference concrete masonry 

units rather than concrete masonry 

products for similar reasons. 

Response: 

The Act is clear that Board 

membership is not to be limited to 

concrete masonry unit manufacturers 

(i.e., those subject to the assessment). 

Specifically, the Act provides that 

‘‘’[t]he Board shall consist of 

manufacturers,’’ 15 U.S.C. 

8704(b)(1)(B)(iii); ‘‘manufacturers’’ is 

defined as ‘‘any person engaged in the 

manufacturing of commercial concrete 

masonry products in the United States.’’ 

15 U.S.C. 8702(12). The Act further 

provides that ‘‘[t]o ensure fair and 

equitable representation of the concrete 

masonry products industry, the 

composition of the Board shall reflect 

the geographical distribution of the 

manufacture of concrete masonry 

products in the United States, the types 

of concrete masonry products 

manufactured, and the range in size of 

manufacturers in the United States.’’ 15 

U.S.C. 8704(b)(2)(A) (emphasis added). 

Thus, the Act is unambiguous that all 

concrete masonry manufacturers are 

eligible for Board membership and not 

just concrete masonry unit 

manufacturers, and the Order reflects 

that statutory directive. 

Beyond the specific statutory 

language with respect to Board 

eligibility, it is also clear that the overall 

goal of the Act is to promote and 

enhance the concrete masonry products 

industry as a whole, rather than simply 

one segment of it. Thus, while the 

assessment is levied against concrete 

masonry units sold (see 15 U.S.C. 

8705(c)(1)), the purpose articulated in 

the Act itself is ‘‘to authorize the 

establishment of an orderly program for 

developing, financing, and carrying out 

an effective, continuous, and 

coordinated program of research 

education, and promotion, including 

funds for marketing and market research 

activities, that is designed to— 

(1) Strengthen the position of the 

concrete masonry products industry in 

the domestic marketplace; 

(2) Maintain, develop, and expand 

markets and uses for concrete masonry 

products in the domestic marketplace; 

and 

(3) Promote the use of concrete 

masonry products in construction and 

building.’’ 

15 U.S.C. 8701(a) (emphasis added). The 

references in the Order to the broader 

set of concrete masonry products rather 

than to the subset of concrete masonry 

units reflects the purposes set out in the 

Act. 

Company Ownership 

Comment: 

Two commenters stated an objection 

that the Proposed Order does not 

require U.S. company ownership to 

participate in the referendum and 

therefore allows foreign-owned 

businesses to participate. 

Response: 

The Act only applies to manufacturers 

engaged in the manufacturing of 

commercial concrete masonry products 

in the United States. All manufactures 

of concrete masonry products that 

physically manufacture in the United 

States are subject to the Act and those 

that manufacture concrete masonry 

units are subject to the assessment. The 

Act does not require U.S. ownership to 

be subject to the Act, nor does foreign 

ownership affect eligibility to 

participate in the referendum. 

Secretarial Appointments to the Board 

Comment: 

One commenter stated the proposed 

Order’s authorization of independent 

Secretarial appointments violates the 

statute. Another commenter voiced a 

concern that ‘‘a Secretary might use 

political favoritism in selecting Board 

members and leaves the industry 

dependent upon the Secretary not to act 

in the Secretary’s own interest.’’ One 

commenter suggested the Board’s 

dismissal process violates the statute. 

Two commenters voiced concern that 

‘‘the Board serves at the pleasure of the 

Secretary.’’ One commenter thought the 

proposed Order authorizing 

independent Secretarial appointments 

violates the statute because the 

commenter thought ‘‘the statute requires 


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Table 4. Table of reports that provide transparency of program operations 

Report 

Annual Budget 

Program and resources (2-year forward 

and back) 

Evaluation of Board programs 

Originator 

Board 

Board 

Board, Independent 

reviewer 

Submit 

to 

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thereafter 
Federal Register / Vol. 86, No. 176 / Wednesday, September 15, 2021 / Rules and Regulations 51471 

that the Secretary only make 

appointments from nominations by 

manufacturers.’’ 

Response: 

The Act provides that the Secretary 

shall appoint Board members and leaves 

to the Secretary the manner in which 

the Secretary will establish an adequate 

pool of candidates. As an appointment, 

the Secretary must have sufficient 

latitude to select individuals of her 

choosing and not unduly be limited in 

her discretion in appointing the 

members of the Board. While it does not 

appear in the Act itself, when the 

President signed the legislation the 

President issued a statement, concurrent 

with the Act that provided: 

. . . . the Act requires the Secretary of 

Commerce to appoint the members of the 

Concrete Masonry Products Board (Board), 

who would be inferior officers, from a list of 

nominees submitted by concrete masonry 

product manufacturers. It also provides that, 

if the Secretary fails to appoint someone from 

that list within a specified period, ‘the first 

nominee for such appointment shall be 

deemed appointed’ The Secretary’s failure to 

make a timely appointment from the list will 

result in the appointment of an inferior 

officer by a private party, which would 

violate the Appointments Clause. 

Furthermore, the requirement to appoint 

from a list of nominees, if the list is too 

limited, may unduly limit the Secretary’s 

constitutional discretion in appointing the 

members of the Board. In those 

circumstances, my Administration will treat 

these requirements as advisory and nonbinding. 

Therefore, in keeping with the 

President’s signing statement, to the 

extent selection criteria limits the 

Secretary’s noted discretion in making 

appointments, the Secretary will treat 

this limitation as advisory in nature. 

Hence, the Department will not include 

in the Order those provisions of the Act 

that are inconsistent with the 

Presidential signing statement including 

those related to ‘‘deemed’’ appointment 

of members and those that may unduly 

limit the Secretary’s discretion in 

making appointments. The Order as 

written reflects the Secretary’s 

discretion in making appointments. 

To more closely align with the Act, 

the Department has added language to 

§ 1500.41(c) of the final Order to make 

explicit the nomination process to fill 

members whose terms expire and to fill 

naturally occurring vacancies. 

Additionally, the Department will 

change the language in § 1500.44(a) of 

the final Order to better match that 

found in the Act and make clear ‘‘that 

if a member or alternate of the Board 

who was appointed as a manufacturer 

ceases to qualify as a manufacturer, 

such member or alternate shall be 

disqualified from serving on the Board.’’ 

Even in the case where a member ceases 

to qualify as a manufacturer, the power 

to remove the appointed Board member 

and fill the vacancy remains with the 

Secretary. 

The Board does not have independent 

authority to remove one of its members. 

While the Board may make 

recommendations, the Secretary alone 

has the authority to remove a Board 

member. As an appointment all 

members serve at the pleasure of the 

Secretary and therefore the Secretary 

retains the prerogative to remove any 

Board member. Some examples of 

possible dismissal action include the 

Secretary making a determination that a 

member’s continued service would be to 

the detriment of fulfilling the purpose of 

the Order, which could include a 

member’s failure or refusal to perform 

his or her duties properly or for 

engaging in acts of dishonesty or willful 

misconduct. 

To reiterate, the Department is 

following the President’s guidance and 

treating those requirements that may 

unduly limit the Secretary’s discretion 

in making appointments as advisory in 

nature and not binding. 

Finally, the Act provides that the 

Secretary may make appointments from 

nominations by manufacturers. As an 

inclusive but not exclusive clause, the 

Order aligns with this language and 

provides that the Secretary will consider 

nominations submitted and other 

manufacturers for appointment, as the 

Secretary may deem appropriate and 

will give consideration to 

recommendations of the Board, selfnominees, and more expansive input 

from sources available to the Secretary. 

Comment: 

One commenter thought that the 

proposed Order violates the 

Appointments Clause, as noted by the 

President in his signing statement. One 

commenter thought ‘‘the Department 

simply disregards the provisions in the 

Act that the President has deemed 

unconstitutional. However, neither the 

President nor the Secretary has such 

authority. If the President believes a law 

is unconstitutional, he can veto the law 

rather than sign it. However, it is the 

federal courts (and ultimately the 

United States Supreme Court), not the 

President, that are the arbiters of 

whether a law is constitutional. 

Therefore, the Secretary’ s reworking of 

the statute in the Proposed Order is 

simply illegal, and subject to reversal.’’ 

Response: 

As mentioned previously with regard 

to the Appointments Clause of the 

Constitution, the President stated that 

‘‘. . . in those circumstances, my 

Administration will treat these 

requirements as advisory and nonbinding.’’ The Order as proposed, 

adheres to the President’s statement. 

Therefore, in keeping with and as 

directed by the President’s signing 

statement, to the extent selection criteria 

limits the Secretary’s noted discretion in 

making appointments, the Secretary will 

treat this limitation as advisory in 

nature. 

Comment: 

One commenter thought the proposed 

Order violates the statute. 

Response: 

With the exception of those elements 

that fall within purview of the 

President’s Statement and are therefore 

advisory in nature, the Order fully 

adheres to the Act. 

Scope of the Act 

Comment: 

One commenter felt the limitation of 

personal liability of Board Members is 

not authorized by the statute. 

Response: 

The Secretary appoints members to 

the Board and under the Appointments 

Clause, the members of the Concrete 

Masonry Products Board (Board) would 

be inferior officers. As officers they 

cannot be held personally liable when 

they exercise their discretionary duties 

of their office, in good faith, while 

acting within the scope of their 

authority. The Department has edited 

the language of § 1500.85 to better 

reflect the limitation on personal 

liability. 

Comment: 

One commenter stated the 

authorization of research, education 

and promotion exceeds the authority of 

the statute. 

Response: 

Whenever possible the order closely 

adheres to the language found in the 

statute. The title of the Act is the 

Concrete Masonry Products, Research, 

Education, and Promotion Act of 2018. 

The Act’s purpose is to authorize the 

establishment of an orderly program for 

developing, financing, and carrying out 

an effective, continuous, and 

coordinated program of research, 

education, and promotion, including 

funds for marketing and market research 

activities, that is designed to— 

(1) strengthen the position of the concrete 

masonry products industry in the domestic 

marketplace; 

(2) maintain, develop, and expand markets 

and uses for concrete masonry products in 

the domestic marketplace; and 

(3) promote the use of concrete masonry 

products in construction and building. 

In its review and writing of the Order, 

the Department was diligent and 


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strident in its efforts to adhere to the 

stated purpose of the Act. The 

Department used this stated purpose to 

guide its decisions with regard to the 

Order, to remain within the authority 

granted by the Act, and to ensure close 

compliance with the Act. 

Comment: 

One commenter thought the proposed 

Order omits the statute’s requirement of 

an independent auditor. 

Response: 

The Order stipulates in paragraph (p) 

of § 1500.47, Powers and Duties that the 

Board will cause its books to be audited 

by a certified public accountant. The 

Department has added language to make 

explicit the requirement for the Board, 

at the end of each fiscal year, to have the 

books and record of the Board audited 

by an independent auditor and submit 

to the Secretary a report of the audit. 

Comment: 

One commenter thought that the 

proposed Order exceeds authority 

granted by the statute with regard to 

complaints of violations. Specifically, 

‘‘statute only gives the Board the 

responsibility to gather facts 

surrounding a complaint and to report 

any complaints of violations to the 

Secretary. The determination as to 

whether enforcement of the law is 

warranted is laid squarely at the feet of 

the Secretary, not the Board. To do 

otherwise [as the commenter interprets 

the proposed Order] would be to create 

stark conflicts of interest in which Board 

members may be evaluating complaints 

against their own industry competitors.’’ 

Response: 

The power and authority to 

investigate resides with the Secretary. 

Specifically, as set forth in the Act, 

‘‘[t]he Secretary may conduct such 

investigations as the Secretary considers 

necessary for the effective 

administration of this chapter, or to 

determine whether any person has 

engaged or is engaging in any act that 

constitutes a violation of this chapter or 

any order or regulation issued under 

this chapter.’’ (15 U.S.C. 8709(a)). 

The Order uses language that makes 

explicit the limitations on the powers 

the Board has regarding complaints of 

violations. The Department concurs 

with the commenter that the Board’s 

powers and duties with regards to 

complaints is to receive the complaint, 

gather facts surrounding a complaint, 

and report any complaints of violation 

the Secretary. The Order’s use of the 

terms receive, evaluate, and report only 

was meant to convey just the powers 

and duties the commenter mentions. 

Use of the word evaluate was not meant 

to expand the Board’s authority. The 

Department has replaced the word 

‘‘evaluate’’ with the word ‘‘investigate’’ 

as the commenter suggests. 

Program Budget 

Comment: 

One commenter stated ‘‘the 

[p]roposed Order allows the Board to 

obfuscate its precise expenditures.’’ 

Response: 

The Department believes the Order 

accurately reflects the Act and levies the 

statutorily mandated requirements for 

the Board to report on all of its 

expenditures (for a list see the table of 

reports that provide transparency in the 

response to comment under the heading 

of Program Evaluation). Specifically, the 

Board is to periodically prepare and 

make available to the public and 

manufacturers reports of its activities 

and, at least once each fiscal period, to 

make public an accounting of funds 

received and expended. Further, the 

Order requires a) at the end of each 

fiscal year and at such other times as the 

Secretary may request, the conduct of an 

audit by an independent auditor and 

submission of a report of the audit 

directly to the Secretary. Additionally, 

the Order requires that the Board, every 

two years, shall prepare and make 

publicly available a comprehensive and 

detailed report that includes an 

identification and description of all 

programs and projects undertaken by 

the Board during the previous two years 

as well as those planned for the 

subsequent two years and detail the 

allocation or planned allocation of 

Board resources for each such program 

or project. Such report shall also 

include: 

(1) The overall financial condition of 

the Board; 

(2) A summary of the amounts 

obligated or expended during the two 

preceding fiscal years; and 

(3) A description of the extent to 

which the objectives of the Board were 

met according to the metrics required 

under § 1500.50(a)(1). 

Comment: 

One commenter thought the Order 

gives the Board too much independent 

power over its budget and expenses. The 

commenter stated that ‘‘the proposed 

Order treats the shifting of 10% of funds 

in a category to another category as de 

minimis. But 10% is far too high to be 

considered de minimis. In fact, in 

almost all contexts it is not only too 

large to be de minimis, it is considered 

material. This shift in funds merits 

consideration—the fact the proposed 

Order seeks to claim 10% as de minimis 

again demonstrates a consistent effort 

throughout the proposed Order to 

reduce the Board’s accountability when 

it comes to properly managing its 

budget. Moreover, not only is this 

amount not de minimis, it subverts the 

Secretary’s statutory authority to set the 

budget for the Board.’’ 

Response: 

The Department did not intend the 

use of the term ‘‘de minimis’’ to make 

a characterization or judgment as to the 

amount of money but rather was using 

the term in connection with the 

allowance of the Board to have some 

flexibility in managing its business 

operations. Simply meant as a good 

business practice, the Department is 

allowing the Board to make 

unanticipated adjustments to its 

approved annual programs. The ten 

percent provides the flexibility to allow 

the Board to make an adjustment 

between two approved categories, but 

the adjustment is specific to an annual 

budget, is confined to the current fiscal 

year, and is measured against the two 

approved categories being adjusted, i.e., 

it is not 10% of the total amount of all 

assessments received. Subsequent 

budgets would require adjustment and 

approval before the Board implements it 

beyond a given year. Therefore, an 

adjustment does not carry over from 

year-to-year but would require approval 

the next time the Board submits an 

annual budget for approval. The 

Department has removed from the Order 

the ‘‘de minimis’’ characterization of 

this allowed funding shift. 

Language of the Act and the Order 

Comment: 

With regards to program budget, one 

commenter points out two apparent 

discrepancies in the language of the 

Order with that of the Act. In the Order 

the clause describing the Board’s 

submission of its annual budget did not 

include the clause ‘‘the probable cost of 

each promotion, research, and 

information activity proposed to be 

developed or carried out by the Board.’’ 

Further the commenter points out in the 

section outlining requirements of 

contracts the Order’s use of the phrase 

‘‘estimate the cost’’ while the Act uses 

the phrase ‘‘specify the cost.’’ 

Response: 

First, the Department expects an 

annual budget submission to be of 

sufficient detail for the Department to 

evaluate all promotion, research, and 

education activities of the Board for an 

upcoming year. By its definition, an 

annual budget would include cost 

estimates to perform each activity. 

Second, the Department considers use 

of the phrase ‘‘estimate the cost’’ vice 

‘‘specify the cost’’ as being more 

synonymous vice a notable distinction. 

While the Department does not 

necessarily agree with the commenter’s 


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Federal Register / Vol. 86, No. 176 / Wednesday, September 15, 2021 / Rules and Regulations 51473 

conclusions that these omissions would 

‘‘reduce accountability and 

responsibility by the Board for the 

program,’’ the Department agrees that, 

whenever possible, the Order will use 

the language of the Act. To maintain its 

close adherence to the Act, the 

Department has added to the final Order 

the missing clause and use the word 

‘‘specify’’ versus ‘‘estimate.’’ 

Comment: 

In the section describing the powers 

and duties of the Board, one commenter 

noted two discrepancies between the 

language used in the Act when 

compared to that used in the Order. The 

first is the missing word ‘‘generic’’ in the 

Order under the powers and duties of 

the Board. The Act provides a power 

and duty of the Board to ‘‘carry out a 

program of generic promotion, research, 

and education regarding concrete 

masonry products.’’ Yet the Order does 

not include the term ‘‘generic.’’ The 

commenter thought removing the term 

‘‘generic’’ allows Board members to 

influence Board projects or programs to 

favor specific geographic areas or 

concrete masonry unit manufacturers 

within a region. This would undermine 

the spirit and purpose of the proposed 

Order, which purports to benefit the 

industry as a whole. The Second is the 

missing word ‘‘products’’ in the order 

also under the powers and duties of the 

Board. ‘‘The Act provides in the 

contracts and agreement section the 

Board may enter into contracts or 

agreements ‘to carry out generic 

research, education, and promotion 

programs and projects relating to 

concrete masonry products . . .’ Again, 

the language of the proposed Order 

drops a key word from the statute 

enacted by Congress and signed into law 

by the President. This time, the term it 

drops is ‘products.’ The Board is only 

authorized to enter into these 

agreements for purposes that relate to 

concrete masonry products, not concrete 

masonry generally.’’ 

Response: 

The Department acknowledges the 

omission of these words and this final 

rule reflects the correction to the 

referenced sections to include these 

terms. The Department has added the 

words ‘‘generic’’ and ‘‘products’’ in their 

respective places in the final Order. 

Comment: 

One commenter pointed out an 

apparent drafting error explaining that 

§ 1500.60(e)(3) makes reference to a 

non-existing section. Equally important, 

the commenter points out that the order 

does not include in its annual budget 

(found in § 1500.50), a requirement to 

discuss whether previous objectives 

were met. 

Response: 

The Department thanks all 

commenters for their diligent reading of 

the Order. Keep in mind the 

requirements listed for the annual 

budget in § 1500.50 are minimum 

requirements for the annual budget. The 

Secretary has the discretion to levy 

additional requirements for the Board to 

include in its annual budget and the 

Board as well, at its discretion can 

include additional information in its 

annual budget submission. The 

Department has fixed the noted drafting 

discrepancy and has included as 

another minimum requirement that the 

Board include in its annual budget a 

comparative analysis to the preceding 

year’s programs, plans, and projects. 

Board Membership 

Comment: 

One commenter asked ‘‘what a 

reasonable amount of time’’ would be 

for the Secretary to appoint a Board, 

could it be one or two years. And would 

assessments commence prior to a Board 

being in place. 

Response: 

Although the Act is silent as to how 

long the Secretary has to appoint initial 

Board members, if the referendum is 

successful the Department anticipates 

issuing a call for nominations when it 

publishes the final results of the 

referendum. Barring a recission, the 

effective date of the Order will be 

November 30. The length of time to 

review and select from a qualified pool 

of candidates would be measured in 

months vice years. 

The Board will set the date of the 

receipt of assessments. The Board has 

the latitude but not the requirement to 

make assessments ‘‘retroactive’’ to the 

effective date of the Order. The Board is 

made up of representatives of the 

industry; their vote on when to begin 

receipt of assessments will equally be 

imposed upon the Board members as 

well. 

Assessments 

Comment: 

One commenter thought the proposed 

Order ‘‘creates a retroactive tax.’’ 

Several commenters referenced that the 

Department is ‘‘levying a tax.’’ Another 

commenter stated, ‘‘it is essentially 

another tax on the products that we 

produce will ultimately result in the end 

user having to pay more for a product 

than they otherwise would in today’s 

market.’’ 

Response: 

There is no authority for the 

Department to enact a tax in either the 

Act or the Order. The Act sets out the 

assessment rate and that the assessment 

rate shall be $.01 per concrete masonry 

unit sold The Board will collect an 

assessment which the Act stipulates the 

Board must use to establish an orderly 

program for developing, financing, and 

carrying out an effective, continuous, 

and coordinated program of research, 

education, and promotion, including 

funds for marketing and market research 

activities, that is designed to— 

(1) strengthen the position of the concrete 

masonry products industry in the domestic 

marketplace; 

(2) maintain, develop, and expand markets 

and uses for concrete masonry products in 

the domestic marketplace; and 

(3) promote the use of concrete masonry 

products in construction and building. 

Whether or not a manufacturer 

chooses to pass along to customers the 

assessment paid is a business decision 

and not a government requirement. 

Comment: 

One commenter believed the 

Proposed Order exceeds the debt 

collection authority in the statute. 

Response: 

The Act establishes an assessment 

upon a manufacturer if the 

manufacturer has manufactured 

concrete masonry products during a 

period of at least 180 days prior to the 

date the manufacturer must remit the 

assessment to the Board. Further, the 

Act authorizes the Secretary to set the 

rate of and levy both a late payment as 

well as an interest charge on 

manufacturers that fail to timely remit 

their quarterly assessment. Since the 

authority would be without force if the 

Secretary could not otherwise enforce 

the assessment payment, the Secretary 

has the same remedies available to the 

Executive Branch. In fact, 15 U.S.C. 

8708 (d) provides for additional 

remedies available to the Secretary. It 

specifically does not preclude the 

Secretary from availing of other 

remedies as appropriate for enforcing 

collection, to include to actions under 

Federal debt collection procedures. 

Comment: 

One commenter thought the proposed 

Order exceeded the statutory authority 

by permitting others to collect 

assessments. 

Response: 

The Act gives the Secretary broad 

discretion on the process of collecting 

assessments. The Act states that 

assessments required under the Order 

shall be remitted by the manufacturer to 

the Board in the manner prescribed by 

the Order and the Order shall provide 

that assessments required under the 

Order shall be remitted to the Board not 

less frequently than quarterly. While the 

formal process of receiving assessments 

has not yet been established the Order 


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51474 Federal Register / Vol. 86, No. 176 / Wednesday, September 15, 2021 / Rules and Regulations 

provides the requirement to propose an 

evaluation and compliance program. 

The evaluation and compliance program 

will include the manner in which the 

Board will receive assessments. The 

Board has the latitude to recommend to 

the Secretary an entity that will receive 

assessments on behalf of the Board. 

Comment: 

Four commenters requested 

clarification on the assessment rate of 

$.01 per concrete masonry unit sold. 

One commenter sought clarification on 

whether ‘‘the period of applicability 

applied to when the first sale occurs and 

the assessment is paid, or if the period 

of applicability extends until the final 

sale when the end customer purchases 

a CMU. If it is the la[t]ter, it is possible 

that a CMU manufacturer could 

purchase a load of CMUs from another 

manufacturer, paying the assessment.’’ 

Another commenter wanted to know if 

the provision that outlines that the 

‘‘first’’ sale of a CMU is assessed, 

‘‘includes those CMU’s sold amongst 

producers. Separating these sales will be 

administratively challenging. Required 

by the Act, manufacture[r]s are to 

identify the total amount due in 

assessments on ALL sales receipts, 

invoices, or other commercial 

documents of sale as a result of the sale 

of concrete masonry units. This can be 

problematic on certain projects or with 

certain customers that do not recognize 

fees in their payables systems and all 

costs are to be rolled up in the unit 

pricing. This has the potential to have 

the exact opposite effect and drive 

potential consumers of our products to 

other types of building materials that 

may be more affordable.’’ Another 

commenter stated there will only be an 

assessment on the first sale of concrete 

masonry units. ‘‘This seems 

counterintuitive to most taxes or 

assessments. Many times sales taxes are 

not collected on items bought for resale 

purposes, meaning that tax is collected 

on the final sale. It is common for CMU 

manufacturers to sell products to one 

another which are then sold in a final 

sale to the end customer.’’ 

Response: 

The Act sets the initial rate as the 

assessment rate on concrete masonry 

products shall be $.01 per concrete 

masonry unit sold. The Order provides 

further guidance that manufacturers will 

base and record the assessment only on 

the first sale of a concrete masonry unit 

and specifically precludes subsequent 

sales of the already assessed concrete 

masonry unit. Therefore, there will only 

be a single assessment, paid once, for 

each concrete masonry unit at its initial 

sale. The manufacturer of the concrete 

masonry unit pays the assessment for 

each block sold. The record of this 

initial sale is the one the Order requires. 

The Order requires the Board, within 

180 days of their initial meeting, to 

provide a proposed evaluation and 

compliance program for review and 

approval by the Secretary. The 

Department expects this evaluation and 

compliance program will reflect the 

business operations of the industry, will 

fully explain the procedures of 

assessment payment, and the specific 

documentation manufacturers will need 

to meet recording requirements. 

Comment: 

One commenter stated the 

assessment, as written, would be levied 

against paver and retaining wall block 

manufacturers, who do not have the 

opportunity to weigh in on the 

assessment through the voting process. 

Another comment mentions the Order’s 

definitions of ‘‘concrete masonry 

products’’ and ‘‘concrete masonry 

units’’ do not clearly delineate the 

differences between concrete masonry 

units and concrete masonry products 

generally. ‘‘It is critically important that 

concrete masonry units be clearly 

defined, as this definition determines 

how manufacturers will be taxed and 

whether they will have a vote in the 

initial referendum.’’ And, as previously 

mentioned one commenter felt the list 

was too expansive as to the definition of 

‘‘what is a ‘concrete masonry unit’ well 

beyond the concrete gray block to 

include a vast list of concrete masonry 

products. Extending the assessment to 

an expanded definition of ‘concrete 

masonry unit’ to include specialty 

products works a hardship on concrete 

masonry products manufacturers that 

will not see any benefits from a group 

commodity marketing program for the 

specialty, value added, products they 

have individually developed and 

marketed at their own expense.’’ And 

one comment took exception to listing 

products ‘‘other than gray block.’’ 

Response: 

Manufacturers of concrete masonry 

products will collect assessments based 

on the number of concrete masonry 

units sold. The manufacturers will then 

remit the collected assessments to the 

Board. Concrete masonry unit means a 

concrete masonry product that is a 

manmade masonry unit having an 

actual width of 3 inches or greater and 

manufactured from dry-cast concrete 

using a block machine. Such term 

includes concrete block and related 

concrete units used in masonry 

applications. While they are concrete 

masonry products, hardscape products 

such as pavers and segmental retaining 

wall units are not concrete masonry 

units and therefore are not subject to 

assessment under this Order. 

The definition of concrete masonry 

unit specifically includes items in 

addition to gray block. The list reflects 

those concrete masonry products that 

fall within the definition of concrete 

masonry unit—a concrete masonry 

product that is manmade masonry unit 

have an actual width of 3 inches or 

greater and manufactured from dry-cast 

using a block machine. Such term 

includes concrete block and related 

concrete units used in masonry 

applications. As there were no other 

comments in opposition to the listing, 

the Department will use this list to 

identify those products that qualify as a 

concrete masonry unit. See the previous 

section whose heading is ‘‘Industry 

Background’’ for a listing of examples 

that qualify as concrete masonry units. 

Comment: 

One commenter stated the ‘‘$0.05 per 

unit seems excessive and sees no 

provision requiring any increases be 

approved by those funding the project. 

As written, the Board can do it alone. 

That is five times what is promoted by 

those in favor of this order.’’ Another 

commenter asked to change the rules for 

assessment increases and ‘‘cap it at a 

lower number because pennies matter 

and ramping it up would be 

economically damaging.’’ Another 

commenter felt the Board will be 

‘‘pressured to increase assessments in 

order to make up for the escrow 

requirement.’’ Another commenter felt 

any change in assessment rate only 

should be with ‘‘a majority vote of 

qualified and registered manufacturers, 

the same as needed to put the order in 

place, vice a two-thirds majority of the 

Board members.’’ Another commenter 

suggested ‘‘it would be prudent to set an 

initial moratorium on assessment 

changes for the first five years of the 

program to better understand the 

impact of the programs, grants, etc. as 

a way to avoid a rapid and early 

assessment increase.’’ 

Response: 

The Act and the Order leave to the 

Board, which represents the interests of 

the industry, the discretion to make a 

decision on an appropriate rate within 

the parameters established in the Act. 

The Act establishes the initial rate of 

assessment, provides the authority to 

change the assessment rate, limits the 

number to one per year and amount of 

increase or decrease to one cent per 

year, and sets $.05 as a maximum 

allowable assessment rate. The Order 

reflects these same criteria. The initial 

assessment rate on concrete masonry 

products is $.01 per concrete masonry 

unit sold. 


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As representatives of the industry, the 

Board members have the collective 

authority to change the assessment rate 

if voted by a two-thirds majority of 

voting members. The rationale for 

increasing or decreasing this value is at 

the discretion of the Board, and while 

the Act does place restrictions on the 

amount an assessment changes, it does 

not restrict the manner in which the 

Board makes this determination. 

The Act only places a cap on the 

number and amount of assessment 

increases or decreases, it does not 

preclude the Board from deciding 

whether to self-impose a limit to the 

number of increases or a freeze for a 

duration of time, but any such selfimposed limitation still would be 

subject to overrule if done so by a twothirds majority. Lastly, the language 

found in the Order aligns directly with 

that in the Act and does not provide the 

Department with the authority to make 

changes to the Order as suggested by 

some of the commenters. 

Other Checkoff Programs 

Comment: 

Three commenters stated a concrete 

masonry products checkoff program 

would be at a disadvantage when 

compared to other checkoff programs, 

specifically noting the prohibition on 

engaging in any promotion, research, or 

education that would be disparaging to 

other construction materials as well as 

a much lower or no escrow account. 

One commenter thought this clause 

‘‘could be used to limit or deny the 

ability to point out the advantages of 

masonry over other materials. This is a 

completely unacceptable limitation. 

How do you plan to protect our right to 

point out facts of masonry that make it 

a superior, safer building material than 

wood in many if not most 

applications?’’ Another commenter 

characterized the apparent 

disadvantage as ‘‘a unilateral 

disarmament of our industry that allows 

our competitors to come after us but 

does not allow us to defend ourselves.’’ 

Response: 

The Act is the first that provides the 

authority for a concrete masonry 

products checkoff program at the 

Department of Commerce. The list of 

prohibited activities in the Act and 

Order are consistent with those found in 

checkoff programs within the U.S. 

Department of Agriculture. Specifically, 

the Act states the prohibited activities 

include prohibition on: Influencing 

legislation, elections, or governmental 

action; engaging in an action that would 

be a conflict of interest; engaging in 

advertising that s false or misleading; 

engaging in any research, education, or 

promotion that would be disparaging to 

other construction materials; or 

engaging in any promotion or project 

that would benefit any individual 

manufacturer. As the commenter notes, 

the prohibition in statutes under which 

U.S. Department of Agriculture (USDA) 

operates is slightly different in that it 

prohibits engaging in a program that 

that may be false or misleading or 

disparaging to another agricultural 

commodity. While this appears to be an 

incongruity, in practice and as a matter 

of policy the USDA does not allow its 

checkoff programs to engage in any 

action that disparages another 

commodity, regardless of whether it is 

agricultural. Of note, the last prohibition 

listed regarding the prohibition on 

benefiting any individual manufacturer 

should be read to mean it cannot be for 

the sole benefit of any individual 

manufacturer. 

Notice Requirement 

Comment: 

One commenter stated that the 

proposed Order has inadequate notice 

procedures for the referendum. 

Response: 

The Federal Register is the official 

daily publication for rules, propose 

rules, and notices of Federal agencies, as 

well as Executive orders and other 

Presidential documents. Unless 

otherwise specifically provided by 

statute, filing of a document, required or 

authorized to be published by 44 U.S.C. 

1505, except in cases where notice by 

publication is insufficient in law, is 

sufficient to give notice of the contents 

of the document to a person subject to 

or affected by it (see 44 U.S.C. 1507). 

With the exception of Federal 

holidays, the Office of the Federal 

Register publishes the Federal Register 

Monday through Friday, by 9 a.m. ET. 

The Department published referendum 

procedures in a proposed rule in the 

Federal Register (85 FR 65288, October 

15, 2020). The Department provided the 

public with thirty days to comment. The 

Department addressed the comments 

received in its notice of the final 

referendum procedures published the 

referendum procedures final rule 

published in the Federal Register (86 

FR 23271, May 3, 2021). 

Department’s Summary of Industry 

Background and Regulatory Flexibility 

Act Analysis 

Comment: 

One commenter took issue and 

believed invalid the comment made in 

the Department’s Industry background 

found in the notice of the proposed 

Order. Specifically, the commenter the 

Department’s statement that ‘‘most of 

the producers acting alone do not have 

the resources to efficiently market the 

value of the product or conduct the 

research and education to promote 

market growth’’ The commenter felt that 

‘‘[w]hile the statement may be true for 

some smaller manufacturers, this 

statement does not reflect the reality of 

producers as a whole.’’ And 

characterized it as ‘‘at best, a very 

imprecise generalization that does not 

accurately represent the current 

educational and promotional efforts of 

concrete masonry unit construction.’’ By 

example the commenter explained that 

there are existing national, state and 

regional associations meeting these 

needs and effectively driving different 

research, education, and promotion 

priorities. The commenter felt that ‘‘[t]o 

the extent that the Proposed Order is 

based on the quoted statement, it sits on 

a weak foundation.’’ 

This commenter also felt misleading 

the Department’s observation that 

between 2007–2017, the number of 

establishments, number of employees, 

annual payroll, value added, and value 

of shipments declined in the industry. 

The commenter points to the last ten 

years to state there has been ‘‘rapid 

growth in the concrete masonry unit 

manufacturing industry. . . . In fact, 

we have experienced an increase in sale 

of concrete masonry units of over 50% 

in this 10-year period.’’ Again, the 

commenter believes that ‘‘[r]elying on 

stale, irrelevant data is yet another 

dubious cornerstone for the proposed 

Department action.’’ 

Lastly the commenter questioned the 

Department use of data compiled by 

industry experts to make decisions. ‘‘Yet 

those experts are not identified, nor is 

their work presented. At a minimum, 

the Secretary should identify these 

experts and provide the experts’ 

qualifications as well as their reports 

that the Secretary relied onto make 

decisions.’’ 

Response: 

The analysis to which the commenter 

refers was not a consideration for the 

Department’s finding that the Order is 

consistent with and will effectuate the 

purpose of the statute. The Department 

made all its decisions, its findings, and 

the publication of the proposed Order 

based on the Act alone and not on the 

rulemaking Background Information 

section or the accompanying Regulatory 

Flexibility Act (RFA) analysis. The 

section entitled Background Information 

provided in this rulemaking by the 

Department was not a finding of fact but 

rather simply an observation based on 

the relative size of most of the producers 

noted in the Department’s RFA and 

economic analysis of the industry. 


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The references to ‘‘Industry experts’’ 

refer to information provided by the 

National Concrete Masonry Association 

(NCMA). The total number of estimated 

concrete masonry units is from the 

NCMA 2019 CMU Sales Report (https:// 

ncma.org/updates/news/2019-cmusales-survey-released/). While the 

Department did not make specific 

reference to the NCMA survey in its 

Notice, it did publish with the Order 

supporting documents on Regs.gov (see 

https://www.regulations.gov/ 

document?D=DOC-2020-0002-0004). 

Included was the economic analysis 

from which the regulatory analysis 

originated and the NCMA report is cited 

there. To reiterate, the Department’s use 

of the information was simply to 

provide a general background of the 

industry. While members of the 

industry submitted a proposal for a draft 

Order, the Department did not rely on 

industry experts in its decision-making, 

and specifically with regard to its 

determination that the Order is 

consistent with and will effectuate the 

purposes of the Act. 

The Department concurs with the 

commenter’s example and believes 

national, regional, and state associations 

are good illustrations for the premise 

that by combining and coordinating 

efforts across producers it can drive and 

advance the research, education, and 

promotion of concrete masonry unit 

construction. 

Keep in mind that it is entirely up to 

the industry whether or not this Order 

goes into effect. The Order only will 

become effective based on the results of 

an industrywide referendum. The Order 

becomes effective November 29, 2021. 

The Secretary will publish a 

determination of the results of the 

referendum that it has been approved by 

a majority of manufacturers voting who 

also represent a majority of the machine 

cavities in operation of those 

manufacturers voting in the referendum. 

In the event the referendum does not 

reach a majority approval, the 

Department will publish a document in 

the Federal Register to withdraw this 

final rule before the effective date. 

Intellectual Property 

Comment: 

One commenter thought that the 

proposed Order creates confusion as to 

the ownership of intellectual property. 

Response: 

The Order outlines the method for 

establishing ownership of intellectual 

property that is financed with funds 

remitted to the Board. A written 

agreement between the Board and the 

party receiving funds will establish 

ownership and allocation of rights to 

patents, copyrights, inventions, or 

publications, developed through the use 

of funds remitted to the Board under the 

Order. 

Referenda 

Comment: 

Two commenters voiced concern for 

ensuing referenda, that they allow any 

concrete masonry product manufacturer 

to vote, even if they are not subject to 

the assessment. One commenter states 

‘‘only manufacturers subject to the 

assessment should be eligible to vote in 

any future referenda.’’ Another 

commenter stated that while the ‘‘initial 

referendum is limited to manufacturers 

subject to the assessment, future 

referenda are not.’’ 

Response: 

Eligibility to vote in subsequent 

referenda will be dependent on the 

scope of an order and those that would 

be subject to the assessment of the 

proposed Order. 

The Act covers the concrete masonry 

products industry and leaves open the 

potential for other orders, however it 

limits to one, the number of orders 

active at any given time. The 

Department differentiates the current 

Order with one that may occur in the 

future. The Department recognizes that 

a future proposed order may differ 

significantly from the current Order, 

and therefore the Department will base 

eligibility to vote in a subsequent 

referendum on the scope of such 

proposed Order. To make clear that the 

reference is to future orders and not this 

Order, the Department states this 

explicitly in § 1500.81(c). 

Comment: 

One commenter raised a concern with 

the two-part criteria the Act provides for 

approval of the Order. Specifically, the 

commenter thought ‘‘since the 

assessment is to be based on capacity, 

the referendum should also be solely 

based on that criterion. To include an 

additional requirement that gives every 

manufacturer, no matter its capacity, an 

equal vote, not only creates an 

unrepresentative system, but also 

creates an incentive structure for 

companies to modify their corporate 

structures on the basis of Department 

regulations rather than market forces.’’ 

Response: 

The language in the Order reflects that 

found in the Act. The Act sets up the 

two-part voting system. The function of 

the two-part voting system is a 

recognition that capacity only should be 

one consideration. The structure allows 

small manufacturers to have an equal 

voice while at the same time providing 

additional weight to larger 

manufacturers. 

The Department does not think it 

likely that a business will base its 

corporate structure decisions on their 

desire to enhance its participation in the 

upcoming referendum. 

Comment: 

One commenter voiced a concern that 

there is no guidance regarding the 

process for ‘‘how machine cavities in 

operation will be counted as machine 

cavities in operation or even how the 

Secretary will determine what counts as 

a machine cavity.’’ Another commenter 

voiced concern that the Department 

‘‘will rely on manufacturer’s attestations 

as to their eligibility as well as providing 

the number of machine cavities in 

operation. Will the Department rely on 

attestations from manufacturers, each of 

which has incentive to inflate their 

numbers? . . . . And how will the 

Department count the cavities? Will the 

Department allow manufacturers to 

count concrete block molds that could 

be used in concrete paver machines as 

cavities? Will the government have to 

send representatives to every eligible 

manufacturer to count cavities? Will it 

rely on uncertain industry data? Given 

the fundamental importance of the 

number of operating cavities in 

determining whether the assessment 

will be imposed on manufacturers, the 

absence from the Proposed Order of a 

proposed method for counting cavities 

makes it starkly deficient.’’ 

Response: 

The Department is sensitive to the 

concern that additional government 

audits and inspections can be an 

encumbrance upon business operations 

and does not view onsite verification 

inspections as necessary to determine 

the total number of machine cavities in 

operation. Therefore, the Department 

will rely on the individual 

manufacturers’ expertise and their 

attestation as to the number of cavities 

in operation while reserving the right to 

conduct onsite visits. 

The Department will use the 

definition as provided in both the Act 

and the Order. Specifically, machine 

cavities in operation are those machine 

cavities associated with a block machine 

that has produced concrete masonry 

units within the last six months of the 

date set for determining eligibility and 

is fully operable and capable of 

producing concrete masonry units. The 

Government forms a manufacturer will 

complete require a signed attestation as 

to the manufacturer’s eligibility as well 

as to the number of machine cavities in 

operation. Therefore, a manufacturer 

may number toward its cavity count 

total those cavities that have produced 

concrete masonry units within six 

months of the referendum, regardless of 


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whether it is on a machine designed for 

the sole purpose of making concrete 

masonry units. 

Both the registration form and ballot 

form are official government forms. Both 

have the following statement: The 

making of any false statement or 

representation on this form, knowing it 

to be false, is a violation of Title 18, 

Section 1001 United States Code, which 

provides for the penalty of a fine of 

$10,000 or imprisonment of not more 

than five years or both. 

While there is a possibility a 

manufacturer may falsify information 

required on an official Government form 

as suggested by one commenter to 

‘‘inflate their numbers’’, the Department 

does not equate the ability to do so with 

the likelihood it will happen. However, 

the Department certainly reserves the 

right to conduct inspections to verify a 

manufacturer’s attestation. The 

Secretary’s authority to inspect, the 

knowledge of penalties the Secretary 

has available against a person who 

willfully violates an Order issued by the 

Secretary, as well as the future 

requirement to provide such 

information and complete evaluation 

and compliance requirements are strong 

safeguards against actions of fraud. The 

Department believes these verification 

techniques provide the needed disincentive to falsify information required 

on an official Government form. 

Comment: 

One commenter thought the 

‘‘Checkoff program approval process 

requiring more than 50% approval in 

companies and cavities means some 

companies are going to be assessed 

without their consent, which is 

fundamentally inconsistent with their 

family values’’. 

Response: 

An effective Order makes the 

assessment mandatory (concerning the 

mandatory nature of the Order, see the 

previous reply under the heading 

‘‘Regional and state-based checkoff 

programs’’). The Act sets out the criteria 

needed for the Order to become 

effective. Specifically, the Act provides 

that the order shall become effective 

only if the Secretary determines that the 

order has been approved by a majority 

of manufacturers voting who also 

represent a majority of the machine 

cavities in operation of those 

manufacturers voting in the referendum. 

The Department encourages all eligible 

manufactures to participate in the 

referendum to make sure ‘‘their voices 

are heard.’’ A majority is anything over 

50%, therefore the commenter is correct 

that if the referendum succeeds and the 

Order goes into effect, those that were 

opposed to the Order and those who fail 

to participate in the referendum still are 

subject to the Order and the Department 

will require them to pay assessments. 

The reverse also is true, if the 

referendum fails, those that wanted a 

program are without. 

Comment: 

One commenter thought it is 

‘‘critically important that concrete 

masonry units be clearly defined, as this 

definition determines how 

manufacturers will be assessed and 

whether they will have a vote in the 

initial referendum.’’ 

Response: 

The Act and the Order use the same 

language to define these two terms. As 

noted previously, the definition of 

concrete masonry products clearly 

distinguishes a concrete masonry unit 

from hardscape products such as 

concrete pavers and segmental retain 

wall units. In its notice, the Department 

took the additional step of listing 

concrete masonry products that it 

considers to be concrete masonry units 

(and therefore subject to the 

assessment). The Department did not 

receive any comments on this list. 

The Act is clear that Board 

membership is not to be limited to 

concrete masonry unit manufacturers 

(i.e., those subject to the assessment). 

Specifically, the Act provides that 

‘‘ ‘[t]he Board shall consist of 

manufacturers,’’ 15 U.S.C. 

8704(b)(1)(B)(iii); ‘‘manufacturers’’ is 

defined as ‘‘any person engaged in the 

manufacturing of commercial concrete 

masonry products in the United States.’’ 

15 U.S.C. 8702(12). The Act further 

provides that ‘‘[t]o ensure fair and 

equitable representation of the concrete 

masonry products industry, the 

composition of the Board shall reflect 

the geographical distribution of the 

manufacture of concrete masonry 

products in the United States, the types 

of concrete masonry products 

manufactured, and the range in size of 

manufacturers in the United States.’’ 15 

U.S.C. 8704(b)(2)(A) (emphasis added). 

Thus, the Act is unambiguous that all 

concrete masonry manufacturers are 

eligible for Board membership and not 

just concrete masonry unit 

manufacturers, and the Order reflects 

that statutory directive. 

Reimbursement to the Government and 

Board Administrative Costs 

Comment: 

Three commenters were concerned 

about the reimbursement mandate in 

the Order. One commenter stated ‘‘the 

Act calls for the requirement to 

reimburse the Secretary for all expenses 

incurred by the Secretary in the 

implementation, administration, and 

supervision of the order, including all 

referendum costs in connection with the 

order. There does not seem to be a cap 

on these expenses.’’ ‘‘Rather than sign a 

blank check,’’ another commenter 

proposed to place ‘‘a 10% cap on 

government expenses.’’ 

Response: 

In addition to being a coordinated 

program of research, education and 

promotion to improve, maintain, and 

develop markets for concrete masonry 

products, there are several benefits to a 

Federally run checkoff program. Among 

others it includes oversight of Board 

operations, adherence to stated intended 

purpose, nationwide coordination, and 

the ability make participation 

mandatory. The concrete checkoff 

program authorized by the Act is 

consistent with other federallymandated checkoff programs. The Act 

specifically requires reimbursement 

from assessments for all expenses 

incurred by the Secretary in the 

implementation, administration, and 

supervision of the order, including all 

referenda costs incurred in connection 

with the Order. 

All Federal checkoff programs require 

the affected industry to reimburse the 

Government for its expenses. The 

service the Government is providing is 

specific to an industry and the nature of 

the checkoff programs allows the 

Government to provide assistance and 

oversight, but normally does not use 

appropriated money to do so. The 

industry desiring the government 

assistance and oversight provides full 

reimbursement, so the benefit and 

expense to enact such program falls 

upon the industry and not the taxpayer 

at large. 

Comment 

Three commenters believed the 

proposed Order’s allowance for the 

Board ‘‘to spend 10% of assessments 

and other funds on the cost of collection 

of expenses and administrative staff is 

too high.’’ One commented that there is 

‘‘no limit to the number of employees’’ 

with a concern that ‘‘no mechanism 

exists to ensure expenses in the future 

remain limited and reasonable.’’ 

Response: 

The Act allows for initial start-up 

costs but then establishes a cap on that 

type of spending. It would seem in the 

Board’s best self-interest to minimize 

administrative costs and maximize the 

funding for research, education, and 

promotion programs. Regardless, 

beginning in the third year after the 

establishment of the Board, the Act 

limits to 10 percent of the assessment 

and other income received, the Board’s 

expenditures for administration. This 

excludes payment into escrow and 


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reimbursement to the Secretary required 

under § 1500.50(f) and (h). The Act’s use 

of a percentage for a cap on 

administrative costs is both a limiting 

factor and what Congress considered 

reasonable. 

Executive Order 12866 

This rulemaking is not a significant 

regulatory action under Executive Order 

12866. 

List of Subjects in 15 CFR Part 1500 

Administration practice and 

procedure, Assessments, Business and 

industry, Checkoff program, Concrete 

masonry products, Confidential 

business information, Education, Nonagricultural commodities, Promotion 

activities, Reporting and recordkeeping 

requirements, Research. 

For the reasons stated in the 

preamble, the Under-Secretary for 

Economic Affairs amends 15 CFR part 

1500 as set forth below: 

PART 1500—CONCRETE MASONRY 

PRODUCTS RESEARCH, EDUCATION, 

AND PROMOTION 

■ 1. The authority citation for part 1500 

continues to read as follows: 

Authority: 15 U.S.C. 8701–8717. 

■ 2. Add subpart A to read as follows: 

Subpart A—Concrete Masonry 

Products Research, Education, and 

Promotion Order 

Sec. 

Definitions 

1500.0 Order. 

1500.1 Act. 

1500.2 Block machine. 

1500.3 Board. 

1500.4 Cavity. 

1500.5 Concrete masonry products. 

1500.6 Concrete masonry unit. 

1500.7 Conflict of interest. 

1500.8 Department. 

1500.9 Dry-cast concrete. 

1500.10 Education. 

1500.11 Geographic regions. 

1500.12 Machine cavities. 

1500.13 Machine cavities in operation. 

1500.14 Manufacturer. 

1500.15 Masonry unit. 

1500.16 [Reserved] 

1500.17 Person. 

1500.18 Promotion. 

1500.19 Research. 

1500.20 Secretary. 

1500.21 United States. 

Concrete Masonry Products Board 

1500.40 Establishment and membership. 

1500.41 Nominations and appointments. 

1500.42 Term of office. 

1500.43 Vacancies. 

1500.44 Disqualification. 

1500.45 Procedure. 

1500.46 Compensation and reimbursement. 

1500.47 Powers and duties. 

1500.48 Prohibited activities. 

Expenses and Assessments 

1500.50 Budget and expenses. 

1500.51 Assessments. 

1500.60 Programs and projects. 

1500.61 Independent evaluation. 

1500.62 Patents, copyrights, trademarks, 

information, publications, and product 

formulations. 

Reports, Books, and Records 

1500.70 Reports. 

1500.71 Books and records. 

1500.72 Confidential treatment. 

Miscellaneous 

1500.80 Right of the Secretary. 

1500.81 Referenda. 

1500.82 Suspension or termination. 

1500.83 Effect of termination or 

amendment. 

1500.84 Notice and advance registration. 

1500.85 Personal liability. 

1500.86 Separability. 

1500.87 Amendments. 

1500.88 OMB control number. 

Subpart A—Concrete Masonry 

Products Research, Education, and 

Promotion Order 

Definitions 

§ 1500.0 Order. 

Order means this subpart A, Concrete 

Masonry Products Research, Education, 

and Promotion Order. 

§ 1500.1 Act. 

Act means the Concrete Masonry 

Products Research, Education, and 

Promotion Act of 2018 (15 U.S.C. 8701 

et seq.; Pub. L. 115–254, section 1301, 

132 Stat. 3469–3485 (2018)), and any 

amendments thereto. 

§ 1500.2 Block machine. 

Block machine means a piece of 

equipment that utilizes vibration and 

compaction to form concrete masonry 

products. 

§ 1500.3 Board. 

Board means the ‘‘Concrete Masonry 

Products Board’’ established under 

§ 1500.40 of this Order. 

§ 1500.4 Cavity. 

Cavity means the open space in the 

mold of a block machine capable of 

forming a single concrete masonry unit 

having nominal plan dimensions of 8 

inches by 16 inches. 

§ 1500.5 Concrete masonry products. 

Concrete masonry products means a 

broader class of products, including 

concrete masonry units as well as 

hardscape products such as concrete 

pavers and segmental retaining wall 

units, manufactured on a block machine 

using dry-cast concrete. 

§ 1500.6 Concrete masonry unit. 

Concrete masonry unit means a 

concrete masonry product that is a 

manmade masonry unit having an 

actual width of 3 inches or greater and 

manufactured from dry-cast concrete 

using a block machine. Such term 

includes concrete block and related 

concrete units used in masonry 

applications. 

§ 1500.7 Conflict of interest. 

Conflict of interest means with respect 

to a member or employee of the Board, 

a situation in which such member or 

employee has a direct or indirect 

financial or other interest in a person 

that performs a service for, or enters into 

a contract with, for anything of 

economic value. 

§ 1500.8 Department. 

Department means the United States 

Department of Commerce. 

§ 1500.9 Dry-cast concrete. 

Dry-cast concrete means a composite 

material that is composed essentially of 

aggregates embedded in a binding 

medium composed of a mixture of 

cementitious materials (including 

hydraulic cement, pozzolans, or other 

cementitious materials) and water of 

such a consistency to maintain its shape 

after forming in a block machine. 

§ 1500.10 Education. 

Education means programs that will 

educate or communicate the benefits of 

concrete masonry products in safe and 

environmentally sustainable 

development, advancements in concrete 

masonry product technology and 

development, and other information and 

programs designed to generate increased 

demand for commercial, residential, 

multi-family, and institutional projects 

using concrete masonry products and to 

generally enhance the image of concrete 

masonry products. 

§ 1500.11 Geographic regions. 

Geographic Regions means the 

groupings of states as delineated in this 

Order (at § 1500.40(c)), for the purpose 

of supporting research, education, and 

promotion plans and projects. 

§ 1500.12 Machine cavities. 

Machine cavities means the cavities 

with which a block machine could be 

equipped. 

§ 1500.13 Machine cavities in operation. 

Machine cavities in operation means 

those machine cavities associated with 

a block machine that have produced 

concrete masonry units within the last 

six months of the date set for 

determining eligibility and is fully 


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operable and capable of producing 

concrete masonry units. 

§ 1500.14 Manufacturer. 

Manufacturer means any person 

engaged in the manufacturing of 

commercial concrete masonry products 

in the United States. 

§ 1500.15 Masonry unit. 

Masonry unit means a 

noncombustible building product 

intended to be laid by hand or joined 

using mortar, grout, surface bonding, 

post-tensioning or some combination of 

these methods. 

§ 1500.16 [Reserved] 

§ 1500.17 Person. 

Person means any individual, group 

of individuals, partnership, corporation, 

association, cooperative or any other 

entity. 

§ 1500.18 Promotion. 

Promotion means any action, 

including paid advertising, to advance 

the image and desirability of concrete 

masonry products with the express 

intent of improving the competitive 

position and stimulating sales of 

concrete masonry products in the 

marketplace. 

§ 1500.19 Research. 

Research means studies testing the 

effectiveness of market development 

and promotion efforts, studies relating 

to the improvement of concrete masonry 

products and new product 

development, and studies documenting 

the performance of concrete masonry. 

§ 1500.20 Secretary. 

Secretary means the Secretary of the 

United States Department of Commerce. 

§ 1500.21 United States. 

United States means the several States 

and the District of Columbia. 

Concrete Masonry Products Board 

§ 1500.40 Establishment and membership. 

(a) The Board is hereby established to 

carry out a program of generic 

promotion, research, and education 

regarding concrete masonry products. 

The Board shall consist of 

manufacturers and of not fewer than 15 

and not more than 25 members 

appointed by the Secretary, from 

nominations submitted as set forth in 

§ 1500.41. No employee of an industry 

trade organization exempt from tax 

under paragraph (3) or (6) of section 

501(c) of the Internal Revenue Code of 

1986 representing the concrete masonry 

industry or related industries shall serve 

as a member of the Board and no 

member of the Board may serve 

concurrently as an officer of the board 

of directors of a national concrete 

masonry products industry trade 

association. 

(b) The initial Board and all 

subsequent Boards, unless modified by 

the Board as provided in paragraph (d) 

of this section, shall be subject to the 

following: 

(1) To ensure fair and equitable 

representation of the concrete masonry 

products industry, the composition of 

the Board shall reflect the geographical 

distribution of the manufacture of 

concrete masonry products in the 

United States, the types of concrete 

masonry products manufactured, and 

the range in size of manufacturers in the 

United States. 

(2) No company or its affiliates shall 

have more than two members on the 

Board. 

(c) To the extent possible, dependent 

on the nominees submitted, the 

Secretary will strive to appoint at least 

two members from each region. 

Similarly, the Secretary will strive to 

appoint at least one member from each 

of the following districts: 

BILLING CODE 3510–20–P 


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BILLING CODE 3510–20–C 

(d) Three years after the assessment of 

concrete masonry units commences 

pursuant to implementation of this 

Order, and at the end of each three-year 

period thereafter, the Board, subject to 

the review and approval of the 

Secretary, shall, if warranted, 

recommend to the Secretary the 

reapportionment of the Board 

membership to reflect changes in the 

geographical distribution of the 

manufacture of concrete masonry 

products and the types of concrete 

masonry products manufactured. 

Additionally, at any time, the Board 

may make recommendations to the 

Secretary to modify the composition of 

the regions and districts set forth in 

paragraph (c) of this section. 

§ 1500.41 Nominations and appointments. 

(a) For the initial Board, nominations 

shall be made and submitted to the 

Secretary by manufacturers. The 

Secretary shall consider the 

nominations submitted and other 

manufacturers for appointment, as the 

Secretary may deem appropriate. The 

Secretary shall appoint the members 

and alternate members of the initial 

Board. 

(b) From the nominations, the 

Secretary shall appoint the 15–25 

members of the Board and 6 alternate 

members of the Board within a 


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3 

4 

5 

6 

7 

8 

9 

11 

12 

13 

14 

15 

Table 1 to paragraph (c) 

Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and 

Vermont 

New York 

Delaware, District of Columbia, Maryland, New Jersey, Pennsylvania, and 

West Virginia 

North Carolina, South Carolina, and Virginia 

Alabama, Georgia, Mississippi, and Tennessee 

Florida 

Indiana, Kentucky, and Ohio 

Illinois, Michigan, and Wisconsin 

Iowa, Minnesota, Nebraska, North Dakota, and South Dakota 

Arkansas, Kansas, Missouri, and Oklahoma 

Louisiana, and Texas 

Arizona, and New Mexico 

Colorado, Utah, and Wyoming 

Alaska, Idaho, Montana, Oregon, and Washington 

California, Hawaii, and Nevada 
Federal Register / Vol. 86, No. 176 / Wednesday, September 15, 2021 / Rules and Regulations 51481 

reasonable time after receiving 

nominations. If a voting member vacates 

the appointment, the Secretary will 

appoint one of the alternate members to 

fill the unexpired term. The Secretary 

will provide the Board an opportunity 

to offer a nominee as successor to fill 

the term of the alternate member. In any 

case in which the Board fails to submit 

nominations for any open position, the 

Secretary shall appoint a member 

qualifying for the position under the 

criteria set forth in § 1500.40. 

(c) As terms expire or vacancies occur 

among members and alternate members, 

nominations and those interested in 

being considered for Board membership, 

including self-nominations, may submit 

such nominations to the Board. For each 

expired or vacant position, the Board 

will evaluate the nominations received, 

verify the willingness of nominees to 

serve, and then will submit to the 

Secretary at least three nominees for 

each such position. The Secretary may 

also receive nominations and may 

forward them to the Board for their 

consideration. The Secretary is not 

bound by the recommendations of the 

Board; in selecting members, the 

Secretary will consider the 

recommendations of the Board, 

individual expertise, distribution of 

appointments, and more expansive 

input from sources available to the 

Secretary. For the initial Board, from the 

list of nominees not selected for 

appointment, the Secretary will choose 

and appoint six alternate members for 

the Board. Alternate members will be 

non-voting members of the Board. 

§ 1500.42 Term of office. 

(a) Board members and any alternates 

will serve for a term of three years, 

except for the initial members as 

described below. Board members and 

any alternates will be able to serve a 

maximum of two consecutive three-year 

terms and may serve additional terms, 

of up to two consecutive three-year 

terms, after rotating off the Board. When 

the Board is first established, the initial 

members will be assigned initial terms 

of two, three and four years. Initial 

terms will be staggered to assure 

continuity. Each term of office will end 

on December 31, with new terms of 

office beginning on January 1. Members 

serving the initial terms of two and 

three years will be eligible to serve a 

second term of three years. 

(b) Thereafter, each of the positions 

will carry a full three-year term. 

Notwithstanding the limitations on 

consecutive terms, a Board member or 

alternate Board member may continue 

to serve until a successor is appointed 

by the Secretary. 

§ 1500.43 Vacancies. 

Should any Board member position 

become vacant, an alternate will be 

appointed by the Secretary for the 

remainder of the term. Successors to fill 

the unexpired terms of the former 

alternate member shall be appointed in 

the manner specified in § 1500.41. 

§ 1500.44 Disqualification. 

(a) In the event that any Board 

member or alternate Board member who 

was appointed as a manufacturer ceases 

to qualify as a manufacturer, such Board 

member or alternate Board member 

shall be disqualified from serving on the 

Board. The replacement may be at the 

Secretary’s initiative or the Board may 

recommend to the Secretary that the 

member be removed. 

(b) If a member of the Board 

consistently refuses to perform the 

duties of a member of the Board, or if 

a member of the Board engages in acts 

of dishonesty or willful misconduct, the 

Board may recommend to the Secretary 

that the member be removed from office. 

(c) All members serve at the pleasure 

of the Secretary. 

§ 1500.45 Procedure. 

(a) The Board will meet at least 

annually. A Board meeting will be 

conducted only when a quorum is 

present. A majority of the Board 

members will constitute a quorum. If 

participation by telephone or other 

means is permitted, members 

participating by such means shall count 

as present in determining quorum or 

other voting requirements set forth in 

this section. 

(b) At the start of each fiscal period, 

the Board will select a Chair, ViceChair, Secretary-Treasurer and other 

officers as appropriate who will serve in 

leadership roles throughout that period. 

(c) The Board will provide members 

and manufacturers a minimum of 14 

days advance notice of all Board 

meetings. 

(d) Each Board member will be 

entitled to one vote on any matter put 

to vote, and the motion will carry if 

supported by one vote more than 50 

percent of the total votes represented by 

the Board members participating, with 

the exception of the affirmative vote of 

two-thirds of voting members required 

to change the assessment rate as 

specified in § 1500.51(c). 

(e) The Board may form committees as 

necessary. Committees may consist of 

individuals other than Board members. 

Committee members shall serve without 

compensation. 

(f) When the Board Chair determines 

that a vote outside a convened Board 

meeting is necessary, such vote may 

take place via electronic means only if 

members are given fourteen days prior 

notice, and if a majority of the voting 

Board members participate prior to the 

established deadline. Any action so 

taken shall have the same force and 

effect as though such action had been 

taken at a regularly convened meeting of 

the Board. 

(g) All votes shall be recorded in 

Board minutes. 

(h) There shall be no voting by proxy. 

(i) Board members shall each have 

one vote. Alternate members shall not 

vote. The Chair and all Board officers 

shall be elected from voting members of 

the Board. 

(j) The organization of the Board and 

the procedures for the conducting of 

meetings of the Board shall be in 

accordance with its bylaws, which shall 

be established by the Board and 

approved by the Secretary. 

(k) Meetings of the Board and 

committees may be conducted by 

electronic communications, provided 

that each member and committee 

member, if such committee member is 

not a member of the Board, is given 

prior written notice of the meeting and 

has the opportunity to be present either 

physically or by electronic connection. 

§ 1500.46 Compensation and 

reimbursement. 

(a) Members and any alternates of the 

Board shall serve without 

compensation. 

(b) If approved by the Board, members 

or alternates shall be reimbursed for 

reasonable travel expenses, which may 

include per diem allowance or actual 

subsistence incurred while away from 

their homes or regular places of 

business in the performance of services 

for the Board. 

§ 1500.47 Powers and duties. 

The Board shall have the following 

powers and duties: 

(a) To administer this Order in 

accordance with its terms and 

conditions and to collect assessments; 

(b) To develop and recommend to the 

Secretary for approval such bylaws as 

may be necessary for the functioning of 

the Board; 

(c) To make such rules as may be 

necessary to administer this Order, 

including activities to be carried out 

under this Order; 

(d) To meet, organize, and select from 

among the members of the Board a 

Chair, Vice Chair, Secretary-Treasurer 

and other officers, committees, and 

subcommittees, and to vest in such 

committees and subcommittees such 

responsibilities and authorities as the 

Board determines to be appropriate; 


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(e) To establish regional committees 

to administer regional initiatives; 

(f) To recommend to the Secretary 

modifications to the geographical 

regions as described in § 1500.40(c); 

(g) To establish working committees 

of persons other than Board members; 

(h) To employ persons, other than the 

members, as the Board considers 

necessary to assist the Board in carrying 

out its duties and to determine the 

compensation and specify the duties of 

such persons; 

(i) To prepare and submit for the 

approval of the Secretary a budget as 

described in § 1500.50(a); 

(j) To borrow funds necessary for the 

startup expenses of this Order; 

(k) To develop and carry out generic 

research, education, and promotion 

programs and projects relating to 

concrete masonry products, and to pay 

the costs of such programs and projects 

with assessments collected under 

§ 1500.51 and other income of the Board 

as provided under §§ 1500.50(j) and 

1500.62; 

(l) To enter into contracts or 

agreements which must be approved by 

the Secretary before becoming effective, 

for the development and carrying out of 

programs or projects of research, 

education, and promotion relating to 

concrete masonry products, including 

with manufacturer associations or other 

entities as considered appropriate by the 

Secretary; 

(m) To develop programs and 

projects, and enter into contracts or 

agreements related thereto, which must 

be approved by the Secretary before 

becoming effective, targeted specifically 

toward the Geographic Regions 

described in § 1500.40(c) to be 

recommended by the relevant regional 

committees for marketing and research 

projects to benefit manufacturers in 

such Geographic Regions pursuant to 

the goals of any programs or projects as 

set forth under this Order. The contracts 

or agreements related to such programs 

and projects as described in this 

§ 1500.46(m) shall be subject to the 

requirements of all contracts or 

agreements described in § 1500.46(l); 

(n) To keep minutes, books, and 

records that reflect the actions and 

transactions of the Board, and promptly 

report minutes of each Board meeting to 

the Secretary; 

(o) To maintain such records and 

books and prepare and submit such 

reports and records from time to time to 

the Secretary as the Secretary may 

prescribe and to make the records 

available to the Secretary for inspection 

and audit; to make appropriate 

accounting with respect to the receipt 

and disbursement of all funds entrusted 

to it; and to keep records that accurately 

reflect the actions and transactions of 

the Board; 

(p) At the end of each fiscal year and 

at such other times as the Secretary may 

request, to have the books and records 

audited by an independent auditor and 

submit a report of the audit directly to 

the Secretary; 

(q) To give the Secretary the same 

notice of meetings of the Board and 

committees as is given to members, 

including committee members if 

committee members are not members of 

the Board, in order that the Secretary’s 

representative(s) may attend such 

meetings, and to keep and report 

minutes of each meeting of the Board 

and all committees to the Secretary; 

(r) To furnish to the Secretary any 

information or records that the Secretary 

may request; 

(s) To receive, investigate, and report 

to the Secretary all complaints of 

violations of this Order; 

(t) To recommend to the Secretary 

such amendments to this Order as the 

Board considers appropriate; 

(u) To recommend adjustments to the 

assessments as provided in this Order; 

(v) To notify manufacturers of all 

Board meetings through press releases 

or other means; 

(w) To invest assessments collected 

under this Order in accordance with 

§ 1500.50; and 

(x) To periodically prepare and make 

available to the public and 

manufacturers reports of its activities 

and, at least once each fiscal period, to 

make public an accounting of funds 

received and expended. 

§ 1500.48 Prohibited activities. 

(a) The Board shall not engage in any 

program or project to, nor shall any 

funds received by the Board under the 

Act be used to: 

(1) Influence legislation, elections, or 

governmental action; 

(2) Engage in an action that would be 

a conflict of interest; 

(3) Engage in advertising that is false 

or misleading; 

(4) Engage in any research, education, 

or promotion that would be disparaging 

to other construction materials; or 

(5) Engage in any promotion or project 

that would benefit any individual 

manufacturer. 

(b) Paragraph (a) of this section does 

not preclude: 

(1) The development and 

recommendation of amendments to the 

Order; 

(2) The communication to appropriate 

government officials of information 

relating to the conduct, implementation, 

or results of research, education, and 

promotion activities under the Order 

except communications described in 

paragraph (a)(1) of this section; or 

(3) Any lawful action designed to 

market concrete masonry products 

directly to a foreign government or 

political subdivision of a foreign 

government. 

Expenses and Assessments 

§ 1500.50 Budget and expenses. 

(a) Prior to the beginning of each 

fiscal year, and during the fiscal year as 

may be necessary, the Board shall 

prepare and submit to the Secretary for 

approval a budget for the fiscal year 

covering its anticipated expenses and 

disbursements in administering this 

Order, including the probable cost of 

each promotion, research, and 

education activity proposed to be 

developed or carried out by the Board 

and a section that annotates and 

explains any shortcomings, overruns, 

and shift of funds from the previous 

year’s budget. Such budget shall be 

deemed approved if the Secretary fails 

to approve or reject the budget within 

60 days of receipt, unless the Secretary 

proposes to the Board and to Congress, 

reasonable justification for the delay 

and provides a reasonable date by 

which approval or disapproval will be 

made. The Department may provide 

such justification in any written format. 

(b) In addition to paragraph (a) of this 

section, each such budget shall include: 

(1) A statement of objectives and 

strategy for each program, plan, or 

project, with a comparative for the 

preceding year—annotating the success 

and explaining the shortcomings of the 

preceding year’s programs, plans, and 

projects 

(2) A summary of anticipated revenue, 

with comparative data for at least one 

preceding year (except for the initial 

budget); 

(3) A summary of proposed 

expenditures for each program, plan or 

project; and 

(4) Staff and administrative expense 

breakdowns, with comparative data for 

at least one preceding year (except for 

the initial budget). 

(c) Each budget shall provide 

adequate funds to defray its proposed 

expenditures. 

(d) Subject to this section, any 

amendment or addition to an approved 

budget must be approved by the 

Secretary, including shifting funds from 

one program or project to another. A 

shift of funds from one approved 

category to another, and not exceeding 

10% of the funds in either category, 

which does not cause an increase in the 

Board’s approved budget and which is 


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consistent with governing bylaws need 

not have prior approval by the 

Secretary. If the Secretary fails to 

approve or reject a budget, or an 

amendment or addition to an approved 

budget, within 60 days of receipt, such 

budget shall be deemed approved, 

unless the Secretary provides to the 

Board and to Congress, in writing, 

reasonable justification for the delay 

and provides a reasonable date by 

which approval or disapproval will be 

made. The Department may provide 

such justification in any written format. 

(e) The Board is authorized to incur 

such expenses as the Secretary finds are 

reasonable and likely to be incurred by 

the Board for its maintenance and 

functioning, and to enable it to exercise 

its powers and perform its duties in 

accordance with the provisions of this 

Order. Such expenses shall be paid from 

funds received by the Board. 

(f) Limitations on obligation of funds: 

(1) In each fiscal year, through fiscal 

year 2030, the Board may not obligate 

an amount greater than the sum of— 

(i) 73 percent of the amount of 

assessments estimated to be collected 

under § 1500.51 in such fiscal year); 

(ii) 73 percent of the amount of 

assessments actually collected under 

§ 1500.51 in the most recent fiscal year 

for which an audit report has been 

submitted as of the beginning of the 

fiscal year for which the amount that 

may be obligated is being determined, 

less the estimate made pursuant to 

paragraph (e)(1) of this section for such 

most recent fiscal year; and 

(iii) Amounts permitted in preceding 

fiscal years to be obligated that have not 

been obligated. 

(iv) For fiscal years 9 and 10 (ending 

September 2028 and 2029) there is a 

special rule for estimates. Specifically, 

the amounts estimated to be collected 

shall be 62 percent of the amount of 

assessments actually collected in the 

most recent fiscal year for which an 

audit report has been submitted as of 

the beginning of the fiscal year for 

which the amount be obligated is being 

determined. 

(2) Assessments collected in excess of 

the amount permitted to be obligated in 

a fiscal year shall be deposited in an 

escrow account until the end of the 11th 

fiscal year or September 2030. 

(3) Prior to the end of the 11th fiscal 

year or September 30, 2030, the Board 

may not obligate, expend, or borrow 

against amounts deposited in the escrow 

account. Any interest earned on such 

amounts shall be deposited in the 

escrow account and shall be unavailable 

for obligation until the end of the 11th 

fiscal year or September 30, 2030. 

(g) With approval of the Secretary, the 

Board may borrow money for the 

payment of administrative expenses, 

subject to the same fiscal, budget and 

audit controls as other funds of the 

Board. Any funds borrowed by the 

Board shall be expended only for 

startup costs and capital outlays. 

(h) The Board shall reimburse the 

Secretary for all expenses incurred by 

the Secretary in the implementation, 

administration and supervision of this 

Order, including all referendum costs in 

connection with this Order. 

(i) Following the third fiscal year of 

operation of the Board, the total cost of 

collection of expenses and 

administrative staff incurred by the 

Board during any fiscal year shall not 

exceed 10 percent of the projected total 

assessments to be collected and other 

income received by the Board for that 

fiscal year after any fees owed to the 

Department are paid. Reimbursements 

to the Secretary required under 

paragraph (g) of this section are 

excluded from this limitation on 

spending. 

(j) Pending disbursement of 

assessments and all other revenue under 

a budget approved by the Secretary, the 

Board may invest assessments and all 

other revenues collected under this 

section in: 

(1) Obligations of the United States or 

any agency of the United States; 

(2) General obligations of any state or 

any political subdivision of a state; 

(3) Interest bearing accounts or 

certificates of deposit of financial 

institutions that are members of the 

Federal Reserve System; or 

(4) Obligations fully guaranteed as to 

principal interest by the United States. 

(k) Investment income and revenue 

earned under paragraph (i) of this 

section are earnings obtained from 

assessments that are subject to budget 

approval under paragraph (a) of this 

section. 

§ 1500.51 Assessments. 

(a) The collection of assessments on 

concrete masonry units will be the 

responsibility of the manufacturer who 

sells the concrete masonry units. There 

shall be an assessment on the first sale 

of concrete masonry units only and not 

on subsequent sales of concrete masonry 

units already assessed. The 

manufacturer will be required to collect 

and remit its individual assessments no 

less than quarterly. Manufacturers shall 

identify the total amount due in 

assessments on all sales receipts, 

invoices or other commercial 

documents of sale as a result of the sale 

of concrete masonry units. Within 180 

days of their initial meeting, the Board 

will provide for review and approval by 

the Secretary a proposed evaluation and 

compliance program and its plan to 

evaluate program effectiveness and to 

verify compliance with the Act. The 

evaluation and compliance program will 

provide the method and metrics that 

will help determine program 

effectiveness and will outline the way 

the Board will receive assessments, how 

they will verify compliance, determine 

the best method to track sales, and how 

to document all actions including the 

process by which the Board will use to 

ensure it meets or exceeds the 

legislatively-mandated disbursement of 

received assessments. 

(b) Such assessments shall be levied 

at a rate of $0.01 per concrete masonry 

unit sold by a manufacturer. The Board 

may make assessments effective as of 

the effective date of this Order. 

Submission of funds may be made to the 

Board within 60 days of the end of the 

first quarter after the Board is 

established; thereafter submission of 

funds will be to the board within 60 

days of the end of each quarter. 

(c) At any time following the conduct 

of the initial referendum conducted 

pursuant to this Order, the assessment 

rate will be reviewed by the Board and, 

upon the affirmative vote of two-thirds 

of voting members of the Board, may be 

modified; provided that the assessment 

rate may be raised to a maximum of 

$0.05 cents per unit, that only one 

increase may be implemented in any 

one-year period, and each individual 

increase may not exceed $0.01 

(d) Not less than 50 percent of the 

assessments (less administration 

expenses) paid by a manufacturer shall 

be used to support research, education, 

and promotion programs and projects in 

support of the Geographic Region of the 

manufacturer. 

(e) All assessment payments and 

reports will be submitted to the Board 

quarterly. All quarterly payments are to 

be received no later than 60 days after 

the conclusion of each quarter. A late 

payment charge shall be imposed on 

any manufacturer who fails to remit to 

the Board the total amount for which 

any such manufacturer is liable on or 

before the due date established by the 

Board. In addition to the late payment 

charge, an interest charge shall be 

imposed on the outstanding amount for 

which the manufacturer is liable. The 

rate of interest and late payment charges 

shall be specified by the Secretary. 

(f) Manufacturers failing to remit total 

assessments due in a timely manner 

may also be subject to actions under 

Federal debt collection procedures. 

(g) The Board may authorize other 

organizations to collect assessments on 


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its behalf with the approval of the 

Secretary. 

(h) The Board shall provide 

manufacturers submitting assessments 

under this Order with the opportunity 

to apply for rebates on assessments 

remitted to the Board for concrete 

masonry units not covered by this Order 

and for assessments remitted to the 

Board for concrete masonry units sold to 

a purchaser that subsequently failed to 

remit payment due to bankruptcy, bad 

debt or other reasons causing the money 

intended to be collected from such sale 

to be uncollectible. Those requesting 

rebates in such circumstances must 

provide all necessary documentation as 

the Board shall determine. 

§ 1500.60 Programs and projects. 

(a) The Board shall receive and 

evaluate, or on its own initiative 

develop, and submit to the Secretary for 

approval any program or project 

authorized under this Order. Such 

programs or projects shall be consistent 

with the purpose of the Act (see 15 

U.S.C. 8701) and provide for: 

(1) The establishment of annual 

research, education, and promotion 

objectives and metrics for each fiscal 

year. Objectives and performance 

metrics should consider and where 

possible reflect those listed in 15 U.S.C. 

8716 (Study and report by the 

Government Accounting Office). 

(2) The establishment, issuance, 

effectuation and administration of 

appropriate programs for research, 

education, and promotion with respect 

to concrete masonry products; and 

(3) The establishment and conduct of 

research with respect to the image, 

desirability, use, marketability, quality 

or production of concrete masonry 

products, to the end that the marketing 

and use of concrete masonry products 

may be encouraged, expanded, 

improved or made more acceptable and 

to advance the image, desirability or 

quality of concrete masonry product. 

(b) No program or project shall be 

implemented prior to its approval by the 

Secretary. Once a program or project is 

so approved, the Board shall take 

appropriate steps to implement it. If the 

Secretary fails to approve or reject a 

contract or agreement for a program or 

project within 60 days of receipt, the 

contract or agreement shall be deemed 

approved, unless the Secretary provides 

to the Board and to Congress, in writing, 

reasonable justification for the delay 

and provides a reasonable date by 

which approval or disapproval will be 

made. The Department may provide 

such justification in any written format. 

Any such contract or agreement shall 

provide that: 

(1) The contractor or agreeing party 

shall develop and submit to the Board 

a program or project together with a 

budget or budgets that specifies the cost 

to be incurred to carry out the program 

or project; 

(2) The contractor or agreeing party 

shall keep accurate records of all its 

transactions and make periodic reports 

to the Board of activities conducted, 

submit accounting for funds received 

and expended, and make such other 

reports as the Secretary or the Board 

may require; 

(3) The Secretary may audit the 

records of the contracting or agreeing 

party periodically; 

(4) Any subcontractor who enters into 

a contract with a Board contractor and 

who receives or otherwise uses funds 

allocated by the Board shall be subject 

to the same provisions as the contractor; 

and 

(5) The contract or agreement shall 

become effective on the approval of the 

Secretary. 

(c) Each program or project 

implemented under this Order shall be 

reviewed or evaluated periodically by 

the Board to ensure that it contributes 

to an effective program of research, 

education, or promotion. If it is found 

by the Board that any such program or 

project does not contribute to an 

effective program of research, education, 

or promotion, then the Board shall, with 

the approval of the Secretary, terminate 

such program or project. 

(d) Any educational or promotional 

activity undertaken with funds provided 

by the Board shall include a statement 

that such activities were supported in 

whole or in part by the Board. 

(e) Every 2 years the Board shall 

prepare and make publicly available a 

comprehensive and detailed report that 

includes an identification and 

description of all programs and projects 

undertaken by the Board during the 

previous 2 years as well as those 

planned for the subsequent 2 years and 

detail the allocation or planned 

allocation of Board resources for each 

such program or project. Such report 

shall also include: 

(1) The overall financial condition of 

the Board; 

(2) A summary of the amounts 

obligated or expended during the 2 

preceding fiscal years; and 

(3) A description of the extent to 

which the objectives of the Board were 

met according to the metrics required 

under § 1500.50. 

§ 1500.61 Independent evaluation. 

The Board shall authorize and fund 

an independent evaluation of the 

effectiveness of this Order and other 

programs conducted by the Board 

beginning five years after October 5, 

2018, and every 3 years thereafter. The 

Board shall submit to the Secretary, and 

make available to the public, the results 

of each periodic independent evaluation 

conducted under this paragraph. 

§ 1500.62 Patents, copyrights, trademarks, 

information, publications, and product 

formulations. 

Ownership and allocation of rights to 

patents, copyrights, inventions, or 

publications, developed through the use 

of non-Federal funds remitted to the 

Board under the Order shall be 

determined by written agreement 

between the Board and the party(ies) 

receiving funds for the development of 

such inventions, patents, copyrights or 

publications. 

Reports, Books, and Records 

§ 1500.70 Reports. 

(a) Each manufacturer subject to this 

Order may be required to provide to the 

Board periodically such information as 

may be required by the Board, with the 

approval of the Secretary, which may 

include but not be limited to the 

following: 

(1) Number and type of concrete 

masonry units manufactured; 

(2) Number and type of concrete 

masonry units on which an assessment 

was paid; 

(3) Name and address of the 

manufacturer; and 

(4) Date assessment was paid on each 

concrete masonry unit sold. 

(b) All reports required under this 

section are due to the Board 60 days 

after the end of each quarter. 

(c) All reports or information 

submitted pursuant to this paragraph 

shall be subject to the confidentiality 

restrictions in § 1500.72. 

§ 1500.71 Books and records. 

Each manufacturer subject to this 

Order shall maintain and make available 

for inspection by the Secretary such 

books and records as are necessary to 

carry out the provisions of this Order, 

including such records as are necessary 

to verify any reports required. Such 

records shall be retained for at least 7 

years beyond the fiscal period of their 

applicability. 

§ 1500.72 Confidential treatment. 

(a) Trade secrets and commercial or 

financial information that is privileged 

or confidential obtained from books, 

records, or reports under the Act, this 

Order shall be kept confidential by all 

persons, including all employees and 

former employees of the Board, all 

officers and employees and former 


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officers and employees of contracting 

and subcontracting agencies or agreeing 

parties having access to such 

information. Such information shall not 

be available to Board members or 

manufacturers. Only those persons 

having a specific need for such 

information to effectively administer the 

provisions of this Order shall have 

access to such information. Such 

information may be disclosed only if the 

Secretary considers the information 

relevant; and the information is revealed 

in a judicial proceeding or 

administrative hearing brought at the 

direction or on the request of the 

Secretary or to which the Secretary or 

any officer of the Department is a party. 

Any officer, employee, or agent of the 

Department of Commerce or any officer, 

employee, or agent of the Board who 

willfully violates this paragraph shall be 

fined not more than $1,000 and 

imprisoned for not more than 1 year, or 

both. Nothing in this section shall be 

deemed to prohibit: 

(1) The issuance of general statements 

based upon the reports of the number of 

persons subject to this Order or 

statistical data collected therefrom, 

which statements do not identify the 

information furnished by any person; 

and 

(2) The publication, by direction of 

the Secretary, of the name of any person 

who has been adjudged to have violated 

this Order, together with a statement of 

the particular provisions of this Order 

violated by such person. 

(b) For any officer, employee, or agent 

of the Department of Commerce, these 

provisions are consistent with and do 

not supersede, conflict with, or 

otherwise alter any obligations, rights, 

or liabilities created by existing statute 

or Executive order relating to classified 

information, communications to 

Congress, the reporting to an Inspector 

General of a violation of any law, rule, 

or regulation, or mismanagement, a 

gross waste of funds, an abuse of 

authority, or a substantial and specific 

danger to public health or safety, or any 

other whistleblower protection. The 

definitions, requirements, obligations, 

rights, sanctions, and liabilities created 

by controlling Executive Orders and 

statutory provisions are incorporated 

into this Order and are controlling. 

Miscellaneous 

§ 1500.80 Right of the Secretary. 

All fiscal matters, programs or 

projects, rules or regulations, reports, or 

other actions proposed and prepared by 

the Board shall be submitted to the 

Secretary for approval. 

§ 1500.81 Referenda. 

(a) A referendum will be held to 

determine whether manufacturers favor 

enactment of this Order. A manufacturer 

shall be considered eligible to vote if the 

manufacturer has manufactured 

concrete masonry products during a 

period of at least 180 days prior to the 

first day of the period during which 

voting in the referendum will occur. For 

the initial referendum, an eligible 

person is a manufacturer of concrete 

units that is subject to the initial rate of 

assessment in § 1500.51. Each 

manufacturer eligible to vote in the 

referendum shall be entitled to one vote. 

This Order became effective after 

approval by a majority of manufacturers 

voting who also represent a majority of 

the machine cavities in operation of 

those manufacturers voting in the 

referendum. 

(b) After the initial referendum, the 

Secretary shall conduct a referendum 

upon the request of the Board, or 

effective beginning November 30, 2026, 

and at 5-year intervals thereafter, by 

petition from not less than 25% of 

manufacturers eligible to vote. Each 

manufacturer eligible to vote in 

subsequent referenda shall be entitled to 

one vote. The Order will remain in 

effect if approved by a majority of 

manufactures voting who also represent 

a majority of the machine cavities in 

operation of those manufacturers voting 

in the referendum. 

(c) For any new proposed order, voter 

eligibility will be based on the scope of 

such proposed order. A future proposed 

Order becomes effective if approved by 

a majority of manufacturers voting and 

any other criteria established by the 

Secretary based on the scope of such 

future proposed order. 

§ 1500.82 Suspension or termination. 

(a) The Secretary shall suspend or 

terminate an order or a provision of an 

order if the Secretary finds that an order 

or provision of an order obstructs or 

does not tend to effectuate the purpose 

of the Act, or if the Secretary determines 

that the order or a provision of an order 

is not favored by a majority of all votes 

cast in the referendum as provided in 

§ 1500.81. If the Secretary suspends or 

terminates a provision of an order, the 

order remains in effect minus the 

suspended or terminated provision. 

(b) If, as a result of a referendum 

conducted under § 1500.81 of this 

Order, the Secretary determines that the 

Order is not approved, the Secretary 

shall: 

(1) Not later than 180 days after 

making the determination, suspend or 

terminate collection of assessments 

under this Order; and 

(2) As soon as practical, suspend or 

terminate activities under this order in 

an orderly manner. 

§ 1500.83 Effect of termination or 

amendment. 

Unless otherwise expressly provided 

by the Secretary, the termination of this 

Order, or the issuance of any 

amendment, shall not: 

(a) Affect or waive any right, duty, 

obligation or liability which shall have 

arisen, or which may thereafter arise in 

connection with any provision of this 

Order; 

(b) Release or extinguish any violation 

of this Order; or 

(c) Affect or impair any rights or 

remedies of the United States, or of the 

Secretary or of any other persons, with 

respect to any such violation. 

§ 1500.84 Notice and advance registration. 

At least 30 days before a referendum 

is to be conducted under this Order, the 

Secretary shall notify all manufacturers 

of the period during which the 

referendum will occur through 

publication in the Federal Register. The 

notice shall explain any registration and 

voting procedures. A manufacturer who 

chooses to vote in any referendum 

conducted under this Order shall 

register with the Secretary prior to the 

voting period. 

§ 1500.85 Personal liability. 

No member or employee of the Board 

shall be held personally responsible, 

either individually or jointly with 

others, when they exercise their 

discretionary duties of their office, in 

good faith, while acting within the 

scope of their authority, to any person 

for errors in judgment, either of 

commission or omission, as such 

member or employee, except for acts of 

dishonesty or willful misconduct 

§ 1500.86 Separability. 

If any provision of this Order is 

declared invalid or the applicability 

thereof to any person or circumstances 

is held invalid, the validity of the 

remainder of this Order or the 

applicability thereof to other persons or 

circumstances shall not be affected 

thereby. 

§ 1500.87 Amendments. 

The Secretary may, from time to time, 

amend an Order. Amendments to this 

Order may be proposed from time to 

time by the Board or by any interested 

person affected by the provisions of the 

Act, including the Secretary. The 

provisions of the Act applicable to an 

order shall be applicable to any 

amendment to this Order. 


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51486 Federal Register / Vol. 86, No. 176 / Wednesday, September 15, 2021 / Rules and Regulations 

§ 1500.88 OMB control number. 

The control number assigned to the 

information collection requirement in 

this subpart by the Office of 

Management and Budget pursuant to the 

Paperwork Reduction Act of 1995, 44 

U.S.C. 3501 et seq., is OMB control 

number 0605–0028. 

Dated: August 20, 2021. 

Kenneth White, 

Senior Policy Analyst, Under Secretary for 

Economic Affairs. 

[FR Doc. 2021–18352 Filed 9–14–21; 8:45 am] 

BILLING CODE 3510–20–P 


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