[House Report 105-759]
[From the U.S. Government Publishing Office]
105th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 105-759
_______________________________________________________________________
TO ESTABLISH A TOLL FREE NUMBER TO ASSIST CONSUMERS IN DETERMINING IF
PRODUCTS ARE AMERICAN-MADE
_______________________________________________________________________
October 1, 1998.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Bliley, from the Committee on Commerce, submitted the following
R E P O R T
[To accompany H.R. 563]
[Including cost estimate of the Congressional Budget Office]
The Committee on Commerce, to whom was referred the bill
(H.R. 563) to establish a toll free number in the Department of
Commerce to assist consumers in determining if products are
American-made, having considered the same, report favorably
thereon with an amendment and recommend that the bill as
amended do pass.
CONTENTS
Page
The Amendment.................................................... 1
Purpose and Summary.............................................. 3
Background and Need for Legislation.............................. 3
Hearings......................................................... 4
Committee Consideration.......................................... 4
Rollcall Votes................................................... 4
Committee Oversight Findings..................................... 4
Committee on Government Reform and Oversight..................... 4
New Budget Authority and Tax Expenditures........................ 4
Committee Cost Estimate.......................................... 5
Congressional Budget Office Estimate............................. 5
Inflationary Impact Statement.................................... 7
Advisory Committee Statement..................................... 7
Constitutional Authority Statement............................... 7
Applicability to the Legislative Branch.......................... 7
Section-by-Section Analysis of the Legislation................... 7
Changes in Existing Law Made by the Bill, as Reported............ 9
The amendment is as follows:
Strike out all after the enacting clause and insert in lieu
thereof the following:
SECTION 1. ESTABLISHMENT OF TOLL FREE NUMBER PILOT PROGRAM.
(a) Establishment.--If the Secretary of Commerce determines, on the
basis of comments submitted in rulemaking under section 2, that--
(1) interest among manufacturers is sufficient to warrant the
establishment of a 3-year toll free number pilot program, and
(2) manufacturers will provide fees under section 2(c) so
that the program will operate without cost to the Federal
Government,
the Secretary shall establish such program solely to help inform
consumers whether a product is ``Made in America''. The Secretary shall
publish the toll-free number by notice in the Federal Register.
(b) Contract.--The Secretary of Commerce shall enter into a contract
for--
(1) the establishment and operation of the toll free number
pilot program provided for in subsection (a), and
(2) the registration of products pursuant to regulations
issued under section 2,
which shall be funded entirely from fees collected under section 2(c).
(c) Use.--The toll free number shall be used solely to inform
consumers as to whether products are registered under section 2 as
``Made in America''. Consumers shall also be informed that registration
of a product does not mean--
(1) that the product is endorsed or approved by the
Government,
(2) that the Secretary has conducted any investigation to
confirm that the product is a product which meets the
definition of ``Made in America'' in section 4 of this Act, or
(3) that the product contains 100 percent United States
content.
SEC. 2. REGISTRATION.
(a) Proposed Regulation.--The Secretary of Commerce shall propose a
regulation--
(1) to establish a procedure under which the manufacturer of
a product may voluntarily register such product as complying
with the definition of ``Made in America'' in section 4 of this
Act and have such product included in the information available
through the toll free number established under section 1(a);
(2) to establish, assess, and collect a fee to cover all the
costs (including start-up costs) of registering products and
including registered products in information provided under the
toll-free number;
(3) for the establishment under section 1(a) of the toll-free
number pilot program; and
(4) to solicit views from the private sector concerning the
level of interest of manufacturers in registering products
under the terms and conditions of paragraph (1).
(b) Promulgation.--If the Secretary determines based on the comments
on the regulation proposed under subsection (a) that the toll-free
number pilot program and the registration of products is warranted, the
Secretary shall promulgate such regulation.
(c) Registration Fee.--
(1) In general.--Manufacturers of products included in
information provided under section 1 shall be subject to a fee
imposed by the Secretary of Commerce to pay the cost of
registering products and including them in information provided
under subsection (a).
(2) Amount.--The amount of fees imposed under paragraph (1)
shall--
(A) in the case of a manufacturer, not be greater
than the cost of registering the manufacturer's product
and providing product information directly attributable
to such manufacturer, and
(B) in the case of the total amount of fees, not be
greater than the total amount appropriated to the
Secretary of Commerce for salaries and expenses
directly attributable to registration of manufacturers
and having products included in the information
provided under section 1(a).
(3) Crediting and availability of fees.--
(A) In general.--Fees collected for a fiscal year
pursuant to paragraph (1) shall be credited to the
appropriation account for salaries and expenses of the
Secretary of Commerce and shall be available in
accordance with appropriation Acts until expended
without fiscal year limitation.
(B) Collections and appropriation acts.--The fees
imposed under paragraph (1)--
(i) shall be collected in each fiscal year in
an amount equal to the amount specified in
appropriation Acts for such fiscal year, and
(ii) shall only be collected and available
for the costs described in paragraph (2).
SEC. 3. PENALTY.
Any manufacturer of a product who knowingly registers a product under
section 2 which is not ``Made in America''--
(1) shall be subject to a civil penalty of not more than
$7500 which the Secretary of Commerce may assess and collect,
and
(2) shall not offer such product for purchase by the Federal
Government.
SEC. 4. DEFINITION.
For purposes of this Act:
(1) The term ``Made in America'' has the meaning given
unqualified ``Made in U.S.A.'' or ``Made in America'' claims
for purposes of laws administered by the Federal Trade
Commission.
(2) The term ``product'' means a product with a retail value
of at least $250.
SEC. 5. RULE OF CONSTRUCTION.
Nothing in this Act or in any regulation promulgated under section 2
shall be construed to alter, amend, modify, or otherwise affect in any
way, the Federal Trade Commission Act or the opinions, decisions,
rules, or any guidance issued by the Federal Trade Commission regarding
the use of unqualified ``Made in U.S.A.'' or ``Made in America'' claims
in labels on products introduced, delivered for introduction, sold,
advertised, or offered for sale in commerce.
Purpose and Summary
The purpose of H.R. 563 is to provide for the establishment
and operation of a three-year, toll free number pilot program
to assist consumers in determining what products are ``Made in
America.'' The reported bill provides that all costs of the
program be paid with fees collected from manufacturers who
voluntarily choose to register their products under this
program.
The reported bill requires the Secretary of Commerce to
issue regulations establishing the program, as well as
procedures for manufacturers to register products that are made
in America. If there is sufficient interest in providing
private sector funding, the Secretary is directed to enter into
a contract for the establishment and operation of the program.
Background and Need for Legislation
In today's global economy, it is increasingly difficult for
consumers to determine which products are ``Made in America.''
Whether shopping for cars, computers, industrial equipment, or
hand tools, the ``Made in America'' designation still
represents quality and value to consumers, and is something
that consumers, when adequately informed, factor into
purchasing decisions. Currently, there is no central repository
for lists of American-made products.
The issue of the appropriate definition of when a product
is ``Made in America'' was recently reviewed by the Federal
Trade Commission (FTC). The FTC's long-standing decisions have
held that, for purposes of enforcement against ``unfair and
deceptive trade practices,'' all or virtually all of a product
must be made in the United States in order to make that claim.
In an effort to understand the sentiment among both consumers
and manufacturers better, the Commission undertook a
comprehensive series of workshops, an extensive public comment
period generating more than 300 comments, and consumer surveys.
On December 1, 1997, the Commission issued an enforcement
policy statement on U.S. origin claims rejecting an earlier
effort to change the standard used by the Commission and
announcing its intent to continue enforcing the Commission's
``all or virtually all'' content standard.
The Committee considered, and the House passed, nearly
identical legislation in the 103rd and 104th Congresses. The
Committee's report on H.R. 3342 on the 103rd Congress (H. Rpt.
103-660) contains additional background information on the
subject of ``Made in America.'' (See also H.R. 447 in the 104th
Congress; H. Rpt. 104-753).
Hearings
In the 104th Congress, the Subcommittee on Commerce, Trade,
and Hazardous Materials held a hearing on virtually identical
legislation, H.R. 447, a bill to establish a toll-free number
in the Department of Commerce to assist consumers in
determining if products are American-made, on July 11, 1996.
The Subcommittee received testimony from The Honorable James A.
Traficant, U.S. House of Representatives, Seventeenth District,
State of Ohio, who testified in favor of the legislation. The
Committee held no additional hearings during the 105th
Congress.
Committee Consideration
On September 24, 1998, the Committee on Commerce met in
open markup session and ordered H.R. 563 reported to the House,
amended, by a voice vote, a quorum being present.
Rollcall Votes
Clause 2(l)(2)(B) of rule XI of the Rules of the House of
Representatives requires the Committee to list the recorded
votes on the motion to report legislation and amendments
thereto. There were no recorded votes taken in connection with
ordering H.R. 563 reported. A motion by Mr. Bliley to order
H.R. 563 reported to the House, amended, was agreed to by a
voice vote, a quorum being present.
Committee Oversight Findings
Pursuant to clause 2(l)(3)(A) of rule XI of the Rules of
the House of Representatives, the Committee held a legislative
hearing and made findings that are reflected in this report.
Committee on Government Reform and Oversight
Pursuant to clause 2(l)(3)(D) of rule XI of the Rules of
the House of Representatives, no oversight findings have been
submitted to the Committee by the Committee on Government
Reform and Oversight.
New Budget Authority and Tax Expenditures
In compliance with clause 2(l)(3)(B) of rule XI of the
Rules of the House of Representatives, the Committee states
that H.R. 563 would result in no new or increased budget
authority or tax expenditures or revenues.
Committee Cost Estimate
The Committee adopts as its own the cost estimate prepared
by the Director of the Congressional Budget Office pursuant to
section 403 of the Congressional Budget Act of 1974 with the
following clarification: The Committee notes that the
Congressional Budget Office estimates that there may be some
minimal cost to the Federal government to conduct the
rulemaking by the Secretary. However, since these costs are
minimal, the Committee believes and intends that this program
should, and can, be operated within existing appropriations
levels and that no additional funding is required.
Congressional Budget Office Estimate
Pursuant to clause 2(l)(3)(C) of rule XI of the Rules of
the House of Representatives, the following is the cost
estimate provided by the Congressional Budget Office pursuant
to section 403 of the Congressional Budget Act of 1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, September 29, 1998.
Hon. Tom Bliley,
Chairman, Committee on Commerce,
U.S. House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 563, a bill to
establish a toll free number in the Department of Commerce to
assist consumers in determining if products are American-made.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Mark Hadley.
Sincerely,
June E. O'Neill, Director.
Enclosure.
H.R. 563--A bill to establish a toll free number in the Department of
Commerce to assist consumers in determining if products are
American-made
Summary: H.R. 563 would require the Department of Commerce
to conduct a rulemaking proceeding to determine if sufficient
interest exists among manufacturers to establish a consumer
hotline listing products that are made in America. If
sufficient interest is found, the bill would require the
department to enter into a contract to establish a three-year
pilot program and to charge fees to pay for the cost of the
contract.
CBO estimates that enacting H.R. 563 would not result in
any significant net cost to the federal government because the
bill would authorize Commerce to establish fees to offset the
costs of the toll-free line, subject to approval in
appropriations acts. H.R. 563 could increase governmental
receipts because the bill would establish a civil penalty for
anyone who knowingly registers a product for the toll-free
hotline that is not made in America, as defined by the bill.
Because the bill could affect receipts, pay-as-you-go
procedures would apply, but CBO estimates that any such
receipts would not be significant in any year.
This bill contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reforms Act (UMRA)
and would not affect the budgets of state, local, or tribal
governments.
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 563 is shown in the following table.
The costs of this legislation fall within budget function 370
(commerce and housing credit).
[By fiscal year, in millions of dollars]
----------------------------------------------------------------------------------------------------------------
1999 2000 2001 2002 2003
----------------------------------------------------------------------------------------------------------------
SPENDNG SUBJECT TO APPROPRIATION \1\
Estimated Authorization Level:
Funding for the Department of Commerce......................... 12 0 0 0 0
Less: Estimated Collections of Fees............................ -2 -4 -5 -1 0
--------------------------------------------
Estimated Net Authorization.................................. 10 -4 -5 -1 0
Outlays:
Estimated Gross Outlays........................................ 2 4 5 1 0
Less: Estimated Collections of Fees............................ -2 -4 -5 -1 0
--------------------------------------------
Estimated Net Outlays........................................ 0 0 0 0 0
----------------------------------------------------------------------------------------------------------------
\1\ H.R. 563 also could increase government receipts, but CBO estimates that any such change would be less than
$500,000 a year.
Basis of estimate: For purposes of this estimate, CBO
assumes H.R. 563 will be enacted near October 1, 1998--the
start of fiscal year 1999--and that the necessary amount will
be appropriated in that year for the full cost of the three-
year contract for a consumer hotline.
Based on information from the Department of Commerce, CBO
estimates that the rulemaking proceeding required by the bill
would cost less than $500,000, primarily for personnel costs.
Assuming the department finds sufficient interest among
manufacturers, CBO estimates that establishing a hotline and
database, and operating the program over a three-year period
would cost the federal government approximately $12 million
beginning in fiscal year 1999 and ending during fiscal year
2002. This estimate assumes that all costs of the three-year
contract for the consumer hotline would be covered by fees, as
specified in the bill.
The authorization to enter into a contract for operation of
the hotline would not constitute direct spending because the
bill would require that the contract be paid solely through fee
collections, and that those fees be collected only to the
extent allowed in appropriations acts.
Pay-as-you-go-considerations: The Balanced Budget and
Emergency Deficit Control Act sets up pay-as-you-go procedures
for legislation affecting direct spending or receipts. H.R. 563
would affect receipts because the bill would establish a civil
penalty for anyone who knowingly registers a product for the
toll-free hotline that is not made in America, as defined by
the bill. Collections of fines would count as governmental
receipts and would be deposited in the general fund of the
Treasury. CBO expects that any additional collections would be
less than $500,000 in any year.
Intergovernmental and private-sector impact: The bill
contains no intergovernmental or private-sector mandates as
defined in UMRA and would not affect the budgets of state,
local, or tribal governments.
Estimate prepared by: Mark Hadley.
Estimate approved by: Paul N. Van de Water, Assistant
Director for Budget Analysis.
Inflationary Impact Statement
Pursuant to clause 2(l)(4) of rule XI of the Rules of the
House of Representatives, the Committee finds that the bill
would have no inflationary impact.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Constitutional Authority Statement
Pursuant to clause 2(l)(4) of rule XI of the Rules of the
House of Representatives, the Committee finds that the
Constitutional authority for this legislation is provided in
Article I, section 8, clause 3, which grants Congress the power
to regulate commerce with foreign nations, among the several
States, and with the Indian tribes.
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Section-by-Section Analysis of the Legislation
Sec. 1. Establishment of Toll Free Number Pilot Program
This section provides that if, pursuant to comments
received during rulemaking under section 2 of the bill, the
Secretary of Commerce (the Secretary) determines there is
sufficient interest among manufacturers in the private sector
to operate the program established under this section without
Federal funding, the Secretary shall provide for the
establishment of a toll free number which may be used by
consumers to determine if a product is made in America. Under
this section, the Secretary has responsibility to publish the
toll free number in the Federal Register.
This section also provides that the Secretary shall
contract out the establishment and operation of the toll free
number pilot program and the registration of products pursuant
to regulations issued under section 2.
This section further provides that consumers shall be
informed: as to whether products about which inquiry is being
made are registered as being ``made in America'' or an
equivalent label; that registration of a product does not mean
that the product is endorsed or approved by the Government;
that registration of a product does not mean that the Secretary
has conducted any investigation to confirm that the product is
a product which meets the definition of ``Made in America'';
and that registration of a product does not mean that the
product contains 100 percent U.S. content.
Sec. 2. Registration
This section provides that the Secretary shall propose a
regulation:
(1) to establish procedures under which manufacturers
may voluntarily register products which are made in
America and have such products included in the
information available through the toll free number;
(2) to establish, assess, and collect fees for the
costs of having products included in information
available through the toll free number established
under section 1;
(3) to establish a toll free number pilot program;
and
(4) to solicit views from the private sector
concerning the level of interest of manufacturers in
registering products under the terms and conditions of
the toll free number pilot program described in the
proposed regulations and the level of interest of
consumers.
This section also states that manufacturers who register
products as being ``Made in America'' for purposes of this Act
shall be subject to a fee to cover all costs of operating the
toll free number pilot program established in section 1.
Sec. 3. Penalty
This section provides that if a manufacturer knowingly
registers a product with the Secretary under section 2 which is
not made in America, the manufacturer may not offer such
product for purchase to the Federal government and shall be
subject to a civil penalty of not more than $7500, which the
Secretary of Commerce may impose.
Sec. 4. Definition
This section provides that the term ``Made in America'' has
the same meaning given unqualified ``Made in the U.S.A.'' or
``Made in America'' claims, for purposes of the laws
administered by the Federal Trade Commission. Under the Federal
Trade Commission Act, as historically applied and recently
reaffirmed by the FTC, that agency has treated unqualified
``Made in America'' or ``Made in U.S.A.'' claims as having to
meet a standard of all or virtually all domestic content. The
bill's definition adopts the standard used by the FTC in order
to ensure that ``Made in America'' claims made pursuant to this
legislation meet the standard for unqualified ``Made in
U.S.A.'' or ``Made in America'' claims that the FTC uses to
enforce section 5 of the Federal Trade Commission Act's (15
U.S.C. Sec. 45) prohibition against deceptive acts or
practices.
This section also states that the term ``product,'' as used
in the reported bill, means a product with a retail value of at
least $250.
Sec. 5. Rule of Construction
This section states that nothing in this Act shall be
deemed to alter, amend, modify, or otherwise affect in any way,
the Federal Trade Commission Act or the opinions, decisions,
rules, or any guidance issued by the Federal Trade Commission
regarding the use of unqualified ``Made in the U.S.A.'' or
``Made in America'' claims in labels on products introduced,
delivered for introduction, sold, advertised, or offered for
sale in commerce.
Changes in Existing Law Made by the Bill, as Reported
This legislation does not amend any existing Federal
statute.