[Congressional Record Volume 161, Number 178 (Wednesday, December 9, 2015)]
[Senate]
[Page S8539]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION CBO COST ESTIMATE--
                                S. 2044

  Mr. THUNE. Mr. President, when the Committee on Commerce, Science, 
and Transportation filed its report on S. 2044, the Consumer Review 
Freedom Act of 2015, the estimate of the Congressional Budget Office 
was not available. The estimate has since been received.
  I ask unanimous consent that the estimate from the Congressional 
Budget Office be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                    U.S. Congress,


                                  Congressional Budget Office,

                                 Washington, DC, December 9, 2015.
     Hon. John Thune,
     Chairman, Committee on Commerce, Science, and Transportation, 
         U.S. Senate, Washington, DC.
       Dear Mr. Chairman: The Congressional Budget Office has 
     prepared the enclosed cost estimate for S. 2044, the Consumer 
     Review Freedom Act of 2015.
       If you wish further details on this estimate, we will be 
     pleased to provide them. The CBO staff contact is Susan 
     Willie.
           Sincerely,
                                                       Keith Hall.

              S. 2044--Consumer Review Freedom Act of 2015

       S. 2044 would void provisions of certain types of contracts 
     that:
       Restrict the ability of a party to the contract from 
     publishing a review or analysis of the performance of another 
     party under the contract;
       Impose a penalty or fee for publishing such a review; and
       Transfer or require the transfer of any rights to the 
     intellectual property of the person who created the review.
       The bill would prohibit the use of contracts that contain 
     those provisions and authorize the Federal Trade Commission 
     (FTC) to enforce those new prohibitions. In addition, the FTC 
     would be authorized to seek civil penalties for violations of 
     the new prohibitions. Finally, S. 2044 would direct the FTC 
     to develop an education and outreach program to provide 
     businesses with best practices for complying with the new 
     restrictions.
       Based on information from the FTC, CBO estimates that the 
     cost of implementing S. 2044 would not be significant because 
     the agency is able to enforce similar prohibitions and 
     provide compliance assistance under its existing general 
     authorities. CBO estimates that enacting S. 2044 would 
     increase federal revenues from the added authority to collect 
     civil penalties; therefore, pay-as-you-go procedures apply. 
     However, we expect those collections would be insignificant 
     because of the small number of cases that the agency would 
     probably pursue. Enacting the bill would not affect direct 
     spending.
       CBO estimates that enacting S. 2044 would not increase net 
     direct spending or on-budget deficits in any of the four 
     consecutive 10-year periods beginning in 2026.
       S. 2044 contains no intergovernmental mandates as defined 
     in the Unfunded Mandates Reform Act (UMRA) and would not 
     affect the budgets of state, local, or tribal governments.
       Although the Federal Trade Commission has begun to enforce 
     prohibitions on contract provisions similar to those outlined 
     in the bill under its existing authorities, to the extent 
     that such provisions are not currently considered void in all 
     jurisdictions, the bill would impose a private-sector mandate 
     as defined in UMRA on entities that use such provisions in 
     their contracts. The cost of the mandate would be the value 
     of forgone income from out-of-court settlements and 
     compensation for damages the entities could be awarded under 
     a breach of contract claim. However, reliable and 
     comprehensive information concerning the number of businesses 
     that continue to use contracts containing such provisions, 
     the number of those that require monetary payment, and the 
     level of any such payments is not available. In addition, 
     although the court cases in which consumers have challenged 
     these provisions have resulted in judgments in favor of the 
     consumer, the limited sample of such cases cannot be used to 
     generalize about the results of such cases in other 
     jurisdictions. Therefore, CBO cannot determine whether the 
     cost of the mandate would exceed the annual threshold 
     established in UMRA for private-sector mandates ($154 million 
     in 2015, adjusted annually for inflation).
       The CBO staff contacts for this estimate are Susan Willie 
     (for federal costs) and Logan Smith (for the impact on the 
     private sector). The estimate was approved by H. Samuel 
     Papenfuss, Deputy Assistant Director for Budget Analysis.

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