[Federal Register Volume 85, Number 164 (Monday, August 24, 2020)]
[Proposed Rules]
[Pages 52059-52077]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-17515]


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DEPARTMENT OF COMMERCE

Office of the Under-Secretary for Economic Affairs

15 CFR Chapter XV

[Docket No.: 200803-0204]
RIN 0605-AA53


Concrete Masonry Products Research, Education and Promotion Order

AGENCY: Under Secretary for Economic Affairs, United States Department 
of Commerce.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Department of Commerce (Department) solicits comments on a 
proposed Concrete Masonry Products Research, Education, and Promotion 
Order. The purpose of the proposed 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 proposed order 
allows a Concrete Masonry Products Board (Board) made up of industry 
members appointed by the Secretary of Commerce (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 proposed 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. This proposal 
also announces the intent of the Department to request approval by the 
Office of Management and Budget (OMB) of a new information collection 
request (ICR) to support implementation of the program.

DATES: The Department must receive comments by October 8, 2020.

ADDRESSES: Submit all electronic public comments via the Federal e-
Rulemaking Portal. Go to https://www.regulations.gov/docket?D=DOC-2020-0002, click the ``Comment Now!'' icon, complete the required fields, 
and enter or attach your comments. The supporting economic analysis is 
also available for comment on regulations.gov.
    You may also submit comments via email at [email protected]. All 
submissions, including attachments and other supporting materials, will 
become part of the public record and subject to public disclosure. The 
Department reserves the right to publish relevant comments, unedited 
and in their entirety. Do not include personal information, such as 
account numbers or Social Security numbers, or names of other 
individuals. Do not submit confidential business information, or 
otherwise proprietary, sensitive or protected information. We will not 
post or consider comments that contain profanity, vulgarity, threats, 
or other inappropriate language or like content.
    Pursuant to the Paperwork Reduction Act (PRA), send to the above 
address comments regarding the accuracy of the burden estimate, ways to 
minimize the burden, including the use of automated collection 
techniques or other forms of information technology, or any other 
aspect of this collection of information. In addition, send comments 
concerning the information collection to [email protected] or 
online at https://www.reginfo.gov/public/do/PRAMain.

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: [email protected].

SUPPLEMENTARY INFORMATION:

I. Overview

    Pursuant to the Concrete Masonry Products Research, Education, and 
Promotion Act of 2018 (Act), 15 U.S.C. 8701 et seq., the Department is 
enacting a research, education, and promotion program (commonly 
referred to as a checkoff program) for concrete masonry products. The 
Act specifically 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].'' 15 U.S.C. 8713.
    The Department's actions to bring the program to fruition will 
include: (1) Implementing an order that will effectuate the purpose of 
the Act; (2) conducting a referendum among the industry to determine 
whether the industry approves of being subject to the implementing 
order; and, upon an affirmative vote on the order; (3) issuing the 
order and establishing a Board that will carry out the provisions of 
the

[[Page 52060]]

order; and (4) performing continuing oversight of the Board and 
program.
    This notice is the first step in enacting the concrete checkoff 
program by proposing an order that would implement the Act. The stated 
purpose of the proposed 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 order would empower 
the Board to develop and carry out research, education, and promotion 
programs and projects relating to concrete masonry products and paying 
the costs of such programs and projects with assessments on domestic 
producers of concrete masonry units.
    Following a period of public comment, the Department will address 
or incorporate those comments received and initiate a referendum on the 
final order. If the manufacturers of concrete masonry units, via a 
referendum, approve the implementing order, the Secretary will appoint 
a Board to carry out the duties as the order prescribes, including the 
receiving of the assessment. Under the proposed order, the Secretary 
would establish a Board that ensures fair and equitable representation 
of the concrete masonry products industry, specifically 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.
    The Act requires the order to address, among other items, 
establishment and membership of the Board, balancing 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 Act 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 Act 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 Act 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 
Act 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 concrete masonry industry 
and products domestically.
     Maintain, develop, and expand markets and uses for 
concrete masonry domestically.
     Promote the use of concrete masonry 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. 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. Proposed procedures for 
conducting the referendum will be published in a separate notice in the 
Federal Register.
    With this notice, the Secretary invites comments on the proposed 
order.

II. Legal Authority and Framework for the Secretary's Implementation of 
an Effectuating Order

    The Act provides that the Secretary, subject to applicable 
procedures, shall issue orders, national in scope, applicable to 
concrete masonry products manufactured in the U.S. 15 U.S.C. 8713; see 
also 15 U.S.C. 8702(12,19). If the Secretary determines that a proposed 
order received, requested by or submitted to the Secretary, is 
consistent with and will effectuate the purpose of the Act, the 
Secretary shall publish such proposed order in the Federal Register not 
later than 90 days after receiving the order, and give not less than 30 
days notice and opportunity for public comment on the proposed order. 
An industry group, the CMU Checkoff Initiative, submitted the proposed 
order to the Secretary on April 15, 2020. The Secretary has determined 
that the proposed order is consistent with and will effectuate the 
purpose of the Act. The determination that the proposed order is 
consistent with and will effectuate the purpose of the Act was made on 
July 20, 2020.
    Pursuant to the Act, the Secretary must establish a process for the 
Board to carry out a program of generic promotion, research, and 
education regarding concrete masonry products by implementing an 
effectuating order. 15 U.S.C. 8704(b). In addition, 15 U.S.C. 8706 
provides for referenda among eligible manufacturers subject to 
assessments under section 8705 of the Act to determine whether the 
order has been approved and will go into effect. As noted above, the 
proposed procedures for the referendum will be published in a separate 
Federal Register notice.

III. 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 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.
    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 Act and the proposed order distinguish 
between concrete masonry products and concrete masonry units; the 
initial rate of assessment applies only to concrete masonry units. The 
Act defines concrete masonry products to include a broader category of 
products, including concrete

[[Page 52061]]

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. 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. 
The following are examples of products that would fall within the 
definition of a concrete masonry unit (defined in Sec.  1500.6). The 
following non-exhaustive list of products are included in the 
definition of a concrete masonry unit:

(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.
(A) Concrete Brick (Architectural only)
(B) Concrete Masonry Veneer Units (greater than 3 inches in width)

    The Act sets out the assessment rate of one cent per concrete 
masonry unit sold.
    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.\1\ The 
Department believes this NAICS classification most closely corresponds 
to manufacturers of the broader category of concrete masonry products.
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    \1\ Executive 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.
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    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.\2\ 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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    \2\ The Economic Census, conducted every 5 years by the U.S. 
Census Bureau, is the official measure of the nation's businesses 
and economy.
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IV. Provisions of the Proposed Order

    Many provisions of the proposed order reflect specific requirements 
as set out in the Act. In instances where the Secretary is exercising 
the discretion granted under the Act, the basis for the proposed 
language is explained below.

Definitions

    Sections 1500.1 through 1500.21 of the proposed order are 
definitions. Section 1500.1 defines the ``Act'' as the Concrete Masonry 
Products Research, Education, and Promotion Act of 2018 (15 U.S.C. 8701 
et seq.), and any amendments thereto. The other definitions contained 
in the proposed order are essentially the same as the definitions found 
in the Act itself, see 15 U.S.C. 8702, except for the addition of a 
definition of ``Geographic Regions'' in Sec.  1500.11.
    Section 1500.11 defines ``Geographic Regions'' as the groupings of 
states delineated in Sec.  1500.40(c) of the proposed order, for the 
purpose of supporting research, education, and promotion plans and 
project. See 15 U.S.C. 8705(f). Specifically, in addition to size and 
range of products, the Act requires that the Board reflect the 
geographic distribution, the five delineated regions, of the 
manufacture of concrete masonry products. 15 U.S.C. 8704(b)(2)(A). The 
Act also provides that not less than 50 percent of assessments (less 
administrative 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).

Concrete Masonry Products Board

    Sections 1500.40 through 1500.48 of the proposed order would 
establish the Board and how it would operate.
Section 1500.40--Establishment and Membership
    Section 1500.40(a) proposes that the Board would consist of not 
fewer than 15 and not more than 25 members. The Board shall consist of 
manufacturers. 15 U.S.C. 8704(b)(1)(B)(i) & (iii). Board members will 
be appointed by the Secretary from nominations submitted as set forth 
in Sec.  1500.41 of the proposed order. See 15 U.S.C. 
8704(b)(1)(B)(ii). This subsection also implements provisions of the 
Act that specify 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. 15 U.S.C. 8704(b)(1)(B)(iii).
    Section 1500.40(b) proposes that, in order to ensure 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. These 
requirements are taken directly from the Act. 15 U.S.C. 8704(b)(2)(A). 
The Small Business Administration uses the number of employees to 
characterize a company's size. Absent additional suggestions, 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 employeess. The Department is seeking comments on 
the best measure of company size (other possiblilities, aside from 
number of employees, could be production

[[Page 52062]]

capacity, total receipts, number of units producted) and the threshold 
values to use. Further, this subsection proposes that no company or its 
affiliates shall have more than two members on the Board. See 15 U.S.C. 
8704(b)(1)(B)(iii).
    Section 1500.40(c) of the proposed order would further implement 
the requirement that the composition of the Board reflect the 
geographical distribution of concrete masonry product manufacturers. It 
divides the United States into five regions consistent with 15 U.S.C 
8705(f)(2) and, although not required in the Act, the order then 
subdivides these five regions into 15 districts. Dividing the regions 
into districts will allow the Board to more easily manage the program. 
This section also proposes that the Secretary will, to the extent 
possible and depending on the nominees submitted, strive to appoint at 
least two members from each region and at least one from each district. 
Finally, Sec.  1500.40(d) proposes that, in accordance with 15 U.S.C. 
8704(b)(2)(B), the Board shall, if warranted, recommend reapportionment 
of Board membership every three years, in order to reflect changes in 
the geographic distribution of the manufacture of concrete masonry 
products and the types of concrete masonry products manufactured.
Section 1500.41--Nominations and Appointments
    The Act does not specifically describe how nominations and 
appointments to the Board should be made, but simply states that the 
Secretary may make appointments from nominations by manufacturers 
pursuant to the method set forth in the order. 15 U.S.C. 8704(b)(3). 
Similarly, the Act states that the order shall provide for the 
selection of alternate members by the Secretary. See 15 U.S.C. 
8704(b)(3). At such time as the order goes into effect, the Secretary 
will solicit nominations for Board membership. Section 1500.41(a) 
proposes that, for the initial Board, nominations shall be made and 
submitted to the Secretary by manufacturers. The Secretary would 
appoint both members and alternate members of the Board. This 
requirement is the source of the Department's request for approval by 
OMB of a new ICR. The Department would restrict the information request 
to that information needed to determine requisite expertise of 
potential nominees and will include biography, experience, status as a 
current manufacturer, size of company, type of products produced, 
statement of interest, and similar background information.
    The Act provides that, if the Secretary fails to make an 
appointment to the Board within 60 days of receiving nominations for an 
appointment, subject to exceptions, the first nominee would be 
``deemed'' appointed. 15 U.S.C. 8704(b)(4). However, the President 
issued a signing statement accompanying the Act as follows:

 . . . [T]he 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 non-binding.\3\
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    \3\ Statement by the President, Oct. 5, 2018, available at 
https://www.whitehouse.gov/briefings-statements/statement-by-the-president-5/.

    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.
    Section 1501.41(b) proposes that, from the nominations, the 
Secretary will appoint the 15-25 members of the Board and six alternate 
members within a reasonable time. If one of the voting members 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. If the Board fails to submit a nominee for an 
open position, the Secretary will appoint a member who meets the 
criteria described in Sec.  1500.40.
Section 1500.42--Term of Office
    This section proposes that Board members and alternates would serve 
three-year terms, except for the initial members. See 15 U.S.C. 
8704(b)(6)(A). Board members and alternates would be able to serve a 
maximum of two consecutive three-year terms, but may serve additional 
terms after rotating off the Board. See 15 U.S.C. 8704(b)(6)(B). 
Initial members would serve staggered terms of two, three, and four 
years. See 15 U.S.C. 8704(b)(6)(A). Terms would end on December 31, 
with new terms beginning on January 1. Members serving an initial term 
of two or three years will be eligible to serve a second consecutive 
three-year term. Board members and alternates may also continue to 
serve until a successor is appointed by the Secretary. See 15 U.S.C. 
8704(b)(6)(C).
Section 1500.43--Vacancies
    This section proposes that, if a Board member position becomes 
vacant, the Secretary would appoint an alternate for the remainder of 
the term. The successor to fill the term of the alternate member would 
be appointed as described in Sec.  1500.41. See 15 U.S.C. 
8704(b)(6)(D).
Section 1500.44--Disqualification
    Section 1500.44(a) proposes that, if a Board member or alternate 
ceases to qualify as a manufacturer, they would be disqualified from 
serving on the Board. See 15 U.S.C. 8704(b)(7). As set forth in the 
definitions, a ``manufacturer'' is ``any person engaged in the 
manufacturing of commercial concrete masonry products in the U.S.'' 
Section 1500.44(b) proposes that, if a Board member consistently 
refuses to perform their duties, or engages in acts of dishonesty or 
willful misconduct, the Board could recommend to the Secretary that the 
member be removed. All members would serve at the pleasure of the 
Secretary.
Section 1500.45--Procedure
    Section 1500.45(a) proposes that the Board would meet at least 
annually, and that a meeting would only be conducted when a quorum (a 
majority of the Board members) is present. If the Board's by-laws 
permit participation by telephone or other means, such participation 
would count towards a quorum or other voting requirements.
    Section 1500.45(b) proposes that the Board would select a Chair, 
Vice-Chair, Secretary-Treasurer and other officers as appropriate, at 
the start of each fiscal period.
    Section 1500.45(c) proposes that the Board would provide members 
and manufacturers a minimum of 14-days advance notice of all Board 
meetings.
    Section 1500.45(d) proposes that 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

[[Page 52063]]

to approve a change in the assessment rate. 15 U.S.C. 8705(c)(2)(A).
    Section 1500.45(e) proposes that the Board may form committees, and 
that such committees may consist of individuals other than Board 
members. Committee members would serve without compensation.
    Sections 1500.45(f) through (i) address voting, and propose that 
votes may take place electronically outside of convened Board meetings 
only if members are given 14 days prior notice and if a majority of 
voting Board members participate prior to the established deadline; 
that all votes shall be recorded in Board minutes; that there shall be 
no voting by proxy; and that all Board members shall have one vote. 
Alternate members would not vote. The Chair and all other Board 
officers would be elected from voting members of the Board.
    Section 1500.45(j) proposes that the organization of the Board and 
procedures for conducting meetings would be in accordance with bylaws 
that are established by the Board and approved by the Secretary.
    Section 1500.45(k) proposes that meetings of the Board and 
committees may take place by electronic means, provided that all Board 
and committee members are given prior written notice 14 days before the 
meeting and have the opportunity to participate.
Section 1500.46--Compensation and Reimbursement
    This section reflects the requirements in the Act found at 15 
U.S.C. 8704(b)(8). Section 1500.46(a) proposes that Board members and 
alternates shall serve without compensation. 15 U.S.C. 8704(b)(8)(A). 
Section 1500.46(b) proposes that, if approved by the Board, members or 
alternates shall be reimbursed for reasonable travel expenses, which 
may include a per diem allowance or actual subsistence incurred while 
away from their homes or regular place of business in performance of 
services for the Board. 15 U.S.C. 8704(b)(8)(B).
Section 1500.47--Powers and Duties
    This section largely reflects the provisions contained in 15 U.S.C. 
8704(c), which states that the order shall specify the powers and 
duties of the Board, and contains a list of powers and duties that 
shall be included in the order.
    Section 1500.47(a) proposes that the Board shall have the power and 
duty to administer the proposed order in accordance with its terms and 
conditions, and to collect assessments. See 15 U.S.C. 8704(c)(1).
    Section 1500.47(b) proposes that the Board shall have the power and 
duty to develop and recommend to the Secretary such bylaws as may be 
necessary for the functioning of the Board. See 15 U.S.C. 8704(c)(2).
    Section 1500.47(c) provides that the Board shall have the power and 
duty to make such rules as may be necessary to administer the order, 
including activities to be carried out under the order. See 15 U.S.C. 
8704(c)(2).
    Section 1500.47(d) proposes that the Board shall have the power and 
duty to meet, organize, and select from the Board members 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. See 15 U.S.C. 8704(c)(3).
    Section 1500.47(e) proposes that the Board shall have the power and 
duty to establish regional committees to administer regional 
initiatives. See 15 U.S.C. 8704(c)(4).
    Section 1500.47(f) proposes that the Board shall have the power and 
duty to recommend to the Secretary modifications to the Geographic 
Regions described in Sec.  1500.11 of the proposed order. See 15 U.S.C. 
8705(f)(3).
    Section 1500.47(g) proposes that the Board shall have the power and 
duty to establish working committees of persons other than Board 
members, see 15 U.S.C. 8704(c)(5), and Sec.  1500.47(h) proposes for 
the employment of persons other than Board members, as the Board 
considers necessary to assist the Board in carrying out its duties, see 
15 U.S.C. 8704(c)(6).
    Section 1500.47(i) proposes that the Board shall have the power and 
duty to prepare a budget and to submit the budget to the Secretary for 
approval, see 15 U.S.C. 8704(c)(7), and Sec.  1500.47(j) proposes for 
the borrowing of funds necessary for the startup expenses of the 
proposed order, see 15 U.S.C. 8704(c)(8).
    Section 1500.47(k) proposes that the Board shall have the power and 
duty to develop and carry out research, education, and promotion 
programs and projects relating to concrete masonry products, and to pay 
the costs of such programs and projects with the assessments collected 
under Sec.  1500.51, as well as other income of the Board. See 15 
U.S.C. 8704(c)(9).
    Section 1500.47(l) proposes that the Board shall have the power and 
duty 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, including with manufacturer 
associations or other entities as considered appropriate by the 
Secretary. See 15 U.S.C. 8704(c)(10) & (e)(1)(A).
    Section 1500.47(m) proposes that the Board shall have the power and 
duty to develop programs and projects, and enter into related contracts 
or agreements related thereto, which must be approved by the Secretary 
before becoming effective, targeted specifically toward the Geographic 
Regions described in Sec.  1500.11. Such programs and projects are to 
be recommended by the relevant regional committees for marketing and 
research projects to benefit manufacturers in their respective 
Geographic Regions. The contracts or agreements related to these 
regional programs and projects would be subject to the same 
requirements for contracts and agreements described above, in Sec.  
1500.47(l). See 15 U.S.C. 8704(c)(4) & (e)(1)(A); 15 U.S.C. 8705(f)(1). 
The Department envisions regional groupings providing their regional-
specific recommendations for research, education, and promotion 
programs and projects to the Board.
    Section 1500.47(n) proposes that the Board shall have the power and 
duty to keep minutes, books, and records that reflect the actions and 
transactions of the Board, and to promptly report the minutes of each 
Board meeting to the Secretary. See 15 U.S.C. 8704(c)(11).
    Section 1500.47(o) proposes that the Board shall maintain such 
records and books, and prepare and submit reports and records to the 
Secretary as required; to make records available to the Secretary for 
inspection and audit; to account for the receipt and disbursement of 
funds; and to keep records that accurately reflect actions and 
transactions of the Board. See 15 U.S.C. 8704(f)(1). This requirement 
is the source of the Department's second request for approval by OMB of 
a new ICR. The Department will restrict the information request to that 
information needed to determine the amount of assessment and will 
include: the number and type of concrete masonry units manufactured; 
the number and type of concrete masonry units on which an assessment 
was paid; the name and address of the manufacturer; manufacturer 
employee identification number; and the date of assessment payment on 
each concrete masonry unit sold; and similar assessment accounting 
information.
    Section 1500.47(p) proposes that the Board have its books audited 
by a certified public accountant at the end of each fiscal year and at 
other times as

[[Page 52064]]

requested by the Secretary, and to submit a report of the audit to the 
Secretary. See 15 U.S.C. 8704(f)(2).
    Section 1500.47(q) proposes that the Board shall have the power and 
duty to give the Secretary the same notice of Board and committee 
meetings as given to members so that the Secretary's representative(s) 
may attend, and report minutes of all such meetings to the Secretary. 
See 15 U.S.C. 8704(c)(11) & (15).
    Section 1500.47(r) proposes for the Board to furnish any requested 
information or records to the Secretary. See 15 U.S.C. 8704(c)(13).
    Section 1500.47(s) proposes that the Board shall have the power and 
duty to receive, evaluate, and report to the Secretary all complaints 
of violations of the proposed order. See 15 U.S.C. 8704(c)(12).
    Section 1500.47(t) proposes the Board recommend to the Secretary 
amendments to the order as the Board considers appropriate. See 15 
U.S.C. 8704(c)(14).
    Section 1500.47(u) proposes the Board be allowed to recommend 
adjustments to the assessments as provided in the order. See 15 U.S.C. 
8704(c)(7) & 15 U.S.C. 8705(c)(2).
    Section 1500.47(v) proposes that the Board shall have the power and 
duty to notify manufacturers of all Board meetings through press 
releases or other means. While the Act does not specifically require 
such notice, it will increase transparency of the Board's operations.
    Section 1500.47(w) proposes that the Board shall have the power and 
duty to invest assessments collected, in accordance with Sec.  1500.50 
of the proposed order, and as authorized by 15 U.S.C. 8705(e).
    Finally, Sec.  1500.47(x) proposes that the Board shall have the 
power and duty to periodically prepare and make available reports of 
its activities to the public and to the manufacturers. Additionally, at 
least once each fiscal period, the Board would make public an 
accounting of funds received and expended. This section helps to 
increase transparency of the Board's operations and to implement 15 
U.S.C. 8704(j), which requires the Board to prepare and make publicly 
available a comprehensive biennial report.
Section 1500.48--Prohibited Activities
    Section 1500.48(a) contains a list of prohibited activities that is 
identical to the prohibited activities listed in the Act at 15 U.S.C. 
8704(g)(1). Specifically, the Board shall not engage in any program or 
project to, or use any funds 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 promotion, research, or education that 
would be disparaging to other construction materials; or (5) engage in 
any promotion or project that would benefit any individual 
manufacturer.
    Section 1500.48(b) contains a number of exceptions, which are 
identical to those found in the Act at 15 U.S.C. 8704(g)(2). Section 
1500.48(a) does not preclude: (1) The development and recommendation of 
amendments to the order; (2) communication to appropriate government 
officials regarding activities under the order that is not intended to 
influence legislation, elections, or governmental action; or (3) any 
lawful action designed to market concrete masonry products directly to 
a foreign government.
Section 1500.50--Budget and Expenses
    Section 1500.50(a) proposes that 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 
upcoming fiscal year covering its anticipated expenses and 
disbursements. See 15 U.S.C. 8704(d)(2)(A) & (B). The budget would be 
deemed approved if the Secretary fails to approve or reject it within 
60 days of receipt, unless the Secretary provides a reasonable 
justification for the delay to the Board and Congress, along with a 
reasonable date for approval or disapproval. See 15 U.S.C. 
8704(d)(2)(C). The Department may provide such justification in any 
written format. Each budget shall include: (1) A statement of 
objectives and strategy for each program, plan, or project, see 15 
U.S.C. 8704(i); (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). See 15 U.S.C. 8704(c)(7) & (d)(2)(A).
    Section 1500.50(b) proposes that each budget shall provide adequate 
funds to defray its proposed expenditures.
    Section 1500.50(c) proposes that, 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. However, a de minimis 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 consistent with governing bylaws, need not have 
prior approval by the Secretary. These provisions provide the Board 
with operational flexibility in light of the requirements to submit 
budgets to the Secretary for approval contained in 15 U.S.C. 8704(c)(7) 
& (d)(2)(A), and are consistent, for example, with the 10% threshold 
for certain transfers of fund permitted in the Uniform Administrative 
Requirements, Cost Principles, and Audit Requirements for Federal 
Awards found at 2 CFR part 200. As noted earlier, the budget will be 
deemed approved if the Secretary fails to approve or reject it within 
60 days of receipt, unless the Secretary provides a reasonable 
justification for the delay to the Board and Congress, along with a 
reasonable date for approval or disapproval. See 15 U.S.C. 
8704(d)(2)(C). The Department may provide such justification in any 
written format.
    Section 1500.50(d) proposes that 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 the order. Such expenses are to be paid from 
funds received by the Board. See 15 U.S.C. 8704(d)(3).
    Section 1500.50(e) implements the provisions contained in 15 U.S.C. 
8715, Limitations on Obligation of Funds. It proposes that:
    (1) In each fiscal year, through fiscal year 2030, the Board may 
not obligate an amount greater than the sum of--
    (a) 73 percent of the amount of assessments estimated to be 
collected under 1500.51 in such fiscal year (except for fiscal years 
2028 and 2029, for which 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);
    (b) 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 (1) for such most recent fiscal year; and

[[Page 52065]]

    (c) amounts permitted in preceding fiscal years to be obligated 
that have not been obligated.
    (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 fiscal year 2030.
    (3) Prior to the end of fiscal year 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 
fiscal year 2030.
    Section 1500.50(f) proposes that, 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, however, shall be expended 
only for startup costs and capital outlays. See 15 U.S.C. 
8704(d)(3)(B).
    Section 1500.50(g) proposes that the Board shall 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. See 15 U.S.C. 
8704(d)(3)(D).
    Section 1500.50(h) proposes that, 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) are excluded from this 
limitation on spending. See 15 U.S.C. 8704(d)(3)(C).
    Section 1500.50(i) proposes that the Board may invest assessments 
and other revenues collected 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. 15 U.S.C. 
8705(e).
    Section 1500.50(j) clarifies that investment income and revenue 
earned under the previous paragraph are earnings obtained from 
assessment that are subject to budget approval by the Secretary.
Section 1500.51--Assessments
    Section 1500.51(a) of the proposed order proposes that the 
collection of assessments on concrete masonry units will be the 
responsibility of the manufacturer who sells the concrete masonry 
units. The Act specifies that assessments shall be remitted by 
manufacturers to the Board in the manner prescribed by the order. 15 
U.S.C. 8705(b)(1). Further, there will only be an assessment on the 
first sale of concrete masonry units, and not on the subsequent sale of 
concrete masonry units already assessed. As required by the Act, 
manufacturers will be required to collect and remit assessments no less 
than quarterly. 15 U.S.C. 8705(b)(2). Also, as required by the Act, 
manufacturers are directed 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. 15 
U.S.C. 8705(b)(3). In order to help implement these provisions, the 
Board is directed to provide a proposed compliance program for review 
and approval by the Secretary within 180 days of their initial meeting. 
A proposed compliance program and its plan to verify compliance with 
the Act 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.
    Section 1500.51(b) sets forth the initial rate of assessment of 
$0.01 per concrete masonry unit sold by a manufacturer as specified in 
the Act. 15 U.S.C. 8705(c)(1). The Board may make assessments effective 
as of the effective date of the proposed order. Manufacturers would 
submit funds to the Board within 60 days of the end of the first 
quarter after the Board is established; thereafter submission of funds 
would be made to the Board within 60 days of the end of each quarter.
    Section 1500.51(c) proposes that, upon the affirmative vote of two-
thirds of the voting members of the Board, the Board may modify the 
assessment rate. 15 U.S.C. 8705(c)(2)(A). This is subject to the 
provision that the rate may be raised to a maximum of $0.05 cents per 
unit, 15 U.S.C. 8705(c)(2)(B), that only one increase or decrease may 
be implemented in any one-year period, 15 U.S.C. 8705(c)(2)(D), and 
that each individual increase may not exceed $0.01, 15 U.S.C. 
8705(c)(2)(C).
    Section 1500.51(d) proposes 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. This 
requirement is taken directly from the Act. 15 U.S.C. 8705(f)(1).
    Section 1500.51(e) proposes that assessment payments and reports 
will be submitted to the Board quarterly. See 15 U.S.C. 8705(b)(2). All 
quarterly payments are to be received no later than 60 days after the 
conclusion of each quarter. A late payment charge will be imposed on 
manufacturers who fail to submit payment by the due date established by 
the Board. See 15 U.S.C. 8705(d)(1). In addition to the late payment 
charge, there will be an interest charge on the outstanding amount. See 
15 U.S.C. 8705(d)(1). In accordance with the Act, the rate of interest 
and late payment charges shall be specified by the Secretary. See 15 
U.S.C. 8705(d)(2).
    Section 1500.51(f) explains that manufacturers failing to remit 
total assessments due in a timely manner may also be subject to actions 
under Federal debt collection procedures.
    Section 1500.51(g) proposes that the Board may authorize other 
organizations to collect assessments on its behalf, subject to approval 
of the Secretary.
    Finally, Sec.  1500.51(h) proposes that the Board shall provide 
manufacturers 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. Those requesting rebates 
will have to provide all necessary documentation as determined by the 
Board.
Section 1500.60--Programs and Projects
    Section 1500.60(a) proposes that the Board shall receive and 
evaluate, or on its own initiative develop, any program or project 
authorized under the proposed order. This section further proposes that 
the Board will submit any such program or project to the Secretary for 
approval. See 15 U.S.C. 8704(d)(1). Such programs or projects shall 
provide for: (1) the establishment, issuance, effectuation and 
administration of appropriate programs for research, education, and 
promotion with respect to concrete masonry; and (2) 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

[[Page 52066]]

the image, desirability or quality of concrete masonry product. See 15 
U.S.C. 8701(a).
    Section 1500.60(b) proposes that the Board will not implement a 
program or project prior to receiving approval from the Secretary. See 
15 U.S.C. 8704(d)(1). Once the Secretary approves a program or project, 
the Board will take appropriate steps to implement it. A contract or 
agreement for a program or project will be deemed approved if the 
Secretary fails to approve or reject it within 60 days of receipt, 
unless the Secretary provides a reasonable justification for the delay 
to the Board and Congress, along with a reasonable date for approval or 
disapproval. See 15 U.S.C. 8704(e)(3). The Department may provide 
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 shall show 
the estimated cost to be incurred for such program or project, see 15 
U.S.C. 8704(e)(2)(A). Further, the contractor or agreeing party shall 
keep accurate records of all its transactions and make periodic reports 
to the Board of activities conducted, see 15 U.S.C. 8704(e)(2)(B) & 
(D); submit accounting for funds received and expended, see 15 U.S.C. 
8704(e)(2)(C); and make such other reports as the Secretary or the 
Board may require, see 15 U.S.C. 8704(e)(2)(E). This section also 
proposes that the Secretary may audit the records of the contracting or 
agreeing party periodically; that any subcontractor who enters into a 
contract with a Board contractor and who receives Board funds will be 
subject to the same provisions as the contractor; and that the contract 
or agreement shall become effective on the approval of the Secretary.
    Section 1500.60(c) proposes that programs or projects implemented 
under the proposed order will be reviewed or evaluated periodically by 
the Board to ensure that they contribute to an effective program of 
research, education, or promotion. If the Board finds that a program or 
project does not contribute to an effective program of research, 
education, or promotion, then the Board will terminate that program or 
project, subject to the approval of the Secretary.
    Section 1500.60(d) proposes that 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. 15 U.S.C. 8704(d)(1)(B).
    Finally, Sec.  1500.60(e) proposes that, every two 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 two years, as 
well as those planned for the subsequent two years. The report will 
detail the allocation or planned allocation of Board resources for each 
program or project, and will 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 Sec.  1500.50(a)(1). See 15 U.S.C. 
8704(j).
Section 1500.61--Independent Evaluation
    Section 1500.61 proposes that the Board shall authorize and fund an 
independent evaluation of the effectiveness of the proposed order and 
other programs conducted by the Board beginning five years after 
October 5, 2018 and every three years thereafter. The Board will submit 
to the Secretary, and make available to the public, the results of each 
periodic independent evaluation. See 15 U.S.C. 8704(h).
Section 1500.62--Patents, Copyrights, Trademarks, Information, 
Publications, and Product Formulations
    Section 1500.62 proposes that 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 proposed 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. The Department believes that 
``trademarks'' were inadvertently left off of this list, as they are 
included in the heading, and intends to include them in the final 
order, subject to public comment.

Reports, Books, and Records

Section 1500.70--Reports
    Section 1500.70(a) proposes that manufacturers subject to the 
proposed order may be required to periodically provide such information 
as required by the Board, with the approval of the Secretary. This 
information may include but is not limited to: The number and type of 
concrete masonry units manufactured; the number and type of concrete 
masonry units on which an assessment was paid; the name and address of 
the manufacturer; manufacturer employee identification number; the date 
of assessment payment on each concrete masonry unit sold; and similar 
assessment accounting information. The previously noted ICR regarding 
assessments also supports this requirement. The Department is seeking 
approval for these ICRs.
    Section 1500.70(b) proposes that all of the reports described above 
are due to the Board 60 days after the end of each quarter, and
    Section 1500.70(c) proposes that all such reports and information 
submitted shall be subject to confidentiality restrictions in Sec.  
1500.72.
Section 1500.71--Assessments
    Section 1500.71 proposes that each manufacturer subject to the 
proposed order shall maintain and make available for inspection by the 
Secretary, or the Board when acting on behalf of the Secrtary, such 
books and records as are necessary to carry out the provisions of the 
order and the regulations issued thereunder, including such records as 
are necessary to verify any reports required. See 15 U.S.C. 8704(k)(1). 
Such records shall be retained for at least seven years beyond the 
fiscal period of their applicability. See 15 U.S.C. 8704(k)(2).
Section 1500.72--Confidential Treatment
    Section 1500.72(a) proposes that trade secrets and commercial or 
financial information that is privileged or confidential obtained from 
books, records, or reports under the Act, the proposed order, and the 
regulations issued thereunder shall be kept confidential by all 
persons, including all employees and former employees of the Board, all 
officers and employees and former 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 the proposed 
order shall have access to such information. See 15 U.S.C. 
8704(k)(3)(A). In accordance with the Act, such information may be 
disclosed only if (1) the Secretary considers the information relevant; 
and (2) 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. 15 U.S.C. 8704(k)(3)(B). Also in accordance with

[[Page 52067]]

the Act, any officer, employee, or agent of the Department of Commerce 
or any officer, employee, or agent of the Board who willfully violates 
the above provisions of the proposed order shall be fined not more than 
$1,000 and imprisoned for not more than 1 year, or both. 15 U.S.C. 
8704(k)(3)(D). However, 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 the proposed order or statistical 
data collected therefrom, as long as the 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 the proposed order and the specific 
provisions that were violated. See 15 U.S.C. 8704(k)(3)(C).
    Section 1500.72(b) would clarify that, 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.

Miscellaneous

Section 1500.80--Right of the Secretary
    Section 1500.80 proposes that 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.
Section 1500.81--Referenda
    Section 1500.81(a) proposes that a referendum will be held to 
determine whether manufacturers favor enactment of the proposed order. 
See 15 U.S.C. 8706(a)(1). The proposed referendum procedures are being 
published in a separate notice in the Federal Register. See 15 U.S.C. 
8706(c)(1) (``Referenda conducted pursuant to this section shall be 
conducted in a manner determined by the Secretary.'') A manufacturer 
will 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. 15 U.S.C. 8706(b)(2). The Act directs the 
Secretary to conduct the referendum ``among [eligible] manufacturers . 
. . subject to assessments under section 8705 of this title.''
    The Act does not define the phrase ``subject to assessment'' and 
therefore, the Secretary must interpret the statute to determine 
whether all manufacturers of concrete masonry products should 
participate in the referendum, or whether only manufacturers of 
concrete masonry units should participate. The phrase ``subject to 
assessment'' could mean: (1) Meeting only the eligibility requirement 
described above (that is, having manufactured concrete masonry products 
during the 180-day period prior to voting), or (2) both meeting the 
eligibility requirement and being subject to the initial rate of 
assessment. Under interpretation (1), the referendum would be conducted 
among all manufacturers who had manufactured concrete masonry products 
during the 180-day period prior to voting. Under interpretation (2), 
because the initial rate of assessment is applied only to concrete 
masonry units sold, the referendum would be conducted among all 
manufacturers who had manufactured concrete masonry units during the 
180-day period prior to voting. Under the Act, ``concrete masonry 
products'' refers to a broader class of products than concrete masonry 
units, including hardscape products such as concrete pavers and 
segmental retaining wall units.
    Where a statute leaves a gap or is ambiguous, courts will typically 
look to see whether the agency's interpretation was reasonable in light 
of the text, nature, and purpose of the statute. See, e.g., Cuozzo 
Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2134 (U.S. June 20, 2016). 
In the absence of a statutory definition, courts ``construe a statutory 
term in accordance with its ordinary or natural meaning.'' FDIC v. 
Meyer, 510 U.S. 471, 476 (1994). The most relevant definition of 
``subject to'' is ``affected by or possibly affected by'' something.\4\ 
Only manufacturers of concrete masonry units will actually have to pay, 
or be affected by, the initial rate of assessment. The Department 
believes, therefore, that the most natural reading of the statute is 
that only concrete masonry unit manufacturers are ``subject to'' 
assessment and therefore eligible to participate in the referendum.
---------------------------------------------------------------------------

    \4\ ``Subject to.'' Merriam-Webster.com Dictionary, Merriam-
Webster, https://www.merriam-webster.com/dictionary/subject%20to. 
Accessed 20 Jun. 2020.
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    This reading is also consistent with the stated purpose of the Act 
as described in 15 U.S.C. 8701. Senate Report 115-218 includes the 
Congressional Budget Office's (CBO) estimate concerning the Act's 
impacts, and notes the following assumption:

    The bill [S. 374] would apply to producers of both concrete 
block and concrete pavers, but CBO expects that only producers of 
concrete block would participate in the referendum. Because there is 
little differentiation among concrete blocks across manufacturers, 
all producers of concrete blocks would benefit from an industry-wide 
research and promotion program. Manufacturers of concrete pavers, on 
the other hand, are able to distinguish their products in ways that 
allow consumers to recognize individual brands. Consequently, those 
producers have little incentive to participate in an industry-wide 
marketing effort. Based on information from manufacturers of 
concrete pavers, CBO expects that those producers would not 
participate in the referendum.

    Senate Report 115-218, at 4 (Mar. 22, 2018).
    Based upon both the language and the overarching purpose of the 
statute, and because concrete masonry unit manufacturers are currently 
the only manufacturers who have an incentive to participate in this 
program, the Department interprets the Act to mean that only 
manufacturers subject to the initial rate of assessment are ``subject 
to assessment,'' in accordance with interpretation (2). Therefore, for 
the initial referendum, an eligible person would be a manufacturer of 
concrete units that is subject to the initial rate of assessment. 
Further, the proposed order protects the interests of concrete masonry 
product manufacturers by leaving open their eligibility for Board 
membership, as well as the possibility that future orders could have a 
broader scope rather than being limited to concrete masonry unit 
manufacturers.
    Therefore, for the initial referendum, an eligible person would be 
a manufacturer of concrete units that is subject to the initial rate of 
assessment in Sec.  1500.51, that is, $0.01 per concrete masonry unit 
sold by a manufacturer. See 15 U.S.C. 8705(c)(1). Each manufacturer 
eligible to vote in the referendum shall be entitled to one vote. 15 
U.S.C. 8706(b)(1). 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. 15 U.S.C. 8706(a)(2).
    Section 1500.81(b) proposes that, after the initial referendum, the 
Secretary shall conduct a referendum upon the request of the Board, or 
effective beginning on the date that is five years after the date of 
approval of the

[[Page 52068]]

proposed order, and at five-year intervals thereafter, by petition from 
not less than 25% of manufacturers eligible to vote. For any new 
proposed order, voter eligibility will be based on the scope of such 
proposed order. Each manufacturer eligible to vote in subsequent 
referenda shall be entitled to one vote. The proposed order shall 
continue if it meets the same requirements for a majority ``yes'' vote 
described above.
Section 1500.82--Suspension or Termination
    Section 1500.82(a) proposes that 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 Sec.  1500.81. See 15 
U.S.C. 8706(e) & 8710. If the Secretary suspends or terminates a 
provision of an order, the order remains in effect minus the suspended 
or terminated provision.
    Section 1500.82(b) proposes that if, as a result of a referendum 
conducted under Sec.  1500.81 of the proposed 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 the proposed order; and (2) 
as soon as practical, suspend or terminate activities under this order 
in an orderly manner. 15 U.S.C. 8710(b).
Section 1500.83--Effect of Termination or Amendment
    Section 1500.83 proposes that, unless otherwise expressly provided 
by the Secretary, the termination of the proposed order, or the 
issuance of any amendment to either thereof, 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 the 
proposed order or any regulation issued thereunder; (b) release or 
extinguish any violation of the proposed order or any regulation issued 
thereunder; 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. The Department believes that the 
intended language of this provision was likely ``. . . issuance of any 
amendment,'' rather than ``. . . issuance of any amendment to either 
thereof,'' and intends to edit this text following public comment.
Section 1500.84--Notice and Advance Registration
    Section 1500.84 proposes that, as required by the Act, not later 
than 30 days before a referendum is to be conducted under the proposed 
order, the Secretary shall notify all manufacturers of the period 
during which the referendum will occur through publication in the 
Federal Register. To clarify this statement, the Secretary interprets 
that notice can occur 30 or more days in advance of the referendum 
start date (i.e., notice cannot be less than 30 days). 15 U.S.C. 
8706(c)(4). The notice will explain any registration and voting 
procedures. See 15 U.S.C. 8706(c)(3). A manufacturer who chooses to 
vote in a referendum conducted under the proposed order shall register 
with the Secretary prior to the voting period. 15 U.S.C. 8706(c)(2).
Section 1500.85--Personal Liability
    Section 1500.85 proposes that no member, alternate member, or 
employee of the Board shall be held personally responsible, either 
individually or jointly with others, in any way whatsoever, to any 
person for errors in judgment, mistakes or other acts, either of 
commission or omission, as such member or employee, except for acts of 
dishonesty or willful misconduct.
Section 1500.86--Separability
    Section 1500.86 proposes that if any provision of the proposed 
order, or its applicability to any person or circumstance, is declared 
invalid, the validity of the remainder of the proposed order or its 
applicability will not be affected.
Section 1500.87--Amendments
    Section 1500.87 proposes that the Secretary may, from time to time, 
amend an order. 15 U.S.C. 8703(c). Amendments to the proposed 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. See 15 
U.S.C. 8704(c). The provisions of the Act applicable to an order shall 
be applicable to any amendment to an order. 15 U.S.C. 8703(c) & 8711.
Section 1500.88--OMB Control Number
    If the ICRs in the proposed order are approved by OMB under the 
Paperwork Reduction Act of 1995, 44 U.S.C. Chapter 35, this section 
would include the OMB control number.

Classification

Executive Order 12866

    This rulemaking is not a significant regulatory action under 
Executive Order 12866.

Executive Order 13771

    This rule is not subject to the requirements of Executive Order 
13771 because it is not a significant regulatory action under Executive 
Order 12866.

Executive Order 13132

    This proposed rule does not contain policies with Federalism 
implications as defined in Executive Order 13132.

Regulatory Flexibility Act: Initial Regulatory Flexibility Analysis

    The Regulatory Flexibility Act (RFA), first enacted in 1980 and 
codified at 5 U.S.C. 600-611, was 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 following paragraphs are a summary of the IRFA for the proposed 
order:

Basis and Purpose of the Rule

    This action is taken under the authority of the Act, which 
authorizes a research, education, and promotion

[[Page 52069]]

program for concrete masonry products, also known as a checkoff 
program. The checkoff program would be established by an order issued 
by the Secretary that is subject to approval by an industry referendum. 
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 masonry units sold each quarter. A proposed order 
submitted by industry to the Department on April 15, 2020, triggered a 
referendum deadline of approximately 8 months from submission, and the 
proposed order must be published in the Federal Register within 90 days 
of receipt. A succinct statement of the objectives of, and legal basis 
for, the proposed rule is contained elsewhere in the preamble and is 
not repeated here.

Number of Affected Entities

    The proposed 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.\5\ 
According to Census data, there were 430 firms and 686 establishments 
engaged in concrete block and brick manufacturing in 2017.\6\ 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.\7\
---------------------------------------------------------------------------

    \5\ See ``Table of Small Business Size Standards Matched to 
North American Industry Classification System Codes'' on the U.S. 
Small Business Administration website.
    \6\ A 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.
    \7\ See ``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.
[GRAPHIC] [TIFF OMITTED] TP24AU20.014

    Large firms represent about 7 percent of all firms and account for 
25 percent of plants, about 38 percent of employment, and 39 percent of 
estimated receipts. This appears to be consistent with the information 
from industry experts that roughly 5 percent of manufacturers account 
for 40 percent of production capacity measured by machine cavities.\8\ 
Based on these estimates of share of establishments and machine 
cavities, we estimate that large employers (500 or more employees) 
account for 25 to 40 percent of industry production of concrete masonry 
units and, conversely, that small firms (fewer than 500 employees) 
account for 60 to 75 percent of production of concrete masonry units.
---------------------------------------------------------------------------

    \8\ Manufacturers use block machines to produce concrete block. 
A block machine uses vibration and compaction to form the concrete 
masonry product from a cement mixture poured into a mold. The term 
``cavity'' is the open space in the mold and equates to a single 
block.
---------------------------------------------------------------------------

Costs to Affected Entities

    Assessment costs--Under the proposed 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

[[Page 52070]]

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 legislation, 
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 
the proposed 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.\9\ Thus, we estimate that firms will pay, on average, $202.84 
for reporting costs per year.
---------------------------------------------------------------------------

    \9\ See the Occupational Outlook Handbook on the Bureau of Labor 
statistics website.
---------------------------------------------------------------------------

Benefits for Affected Entities

    Even if the order results 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 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.
    A possible de minimis exemption would exclude companies with fewer 
than five employees. According to Census Bureau data (see ``Table 3: 
Block and Brick Manufacturers 2017 by Business Size''), these firms 
represent 13 percent of establishments in the industry, 1 percent of 
industry employment, and 1 percent of annual receipts for the industry.
    Another possible de minimis exemption would exclude companies with 
fewer than ten employees. According to Census Bureau data (see ``Table 
3: Block and Brick Manufacturers 2017 by Business Size''), these firms 
represent 23 percent of establishments in the industry, 4 percent of 
industry employment, and 3 percent of annual receipts for the industry.
    The Department requests comments regarding a possible de minimis 
exemption.

Request for Comments

    The Department requests comments on the Initial Regulatory 
Flexibility Act Analysis. Specifically, 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.

Paperwork Reduction Act

    The ICRs in this proposed rule are being submitted for approval to 
OMB under the Paperwork Reduction Act of 1995, 44 U.S.C. 3501 et seq. 
This section contains the new ICRs and the estimated time to fulfill 
each requirement. There are two new ICRs associated with the proposed 
order--one dealing with the Board nomination process and a second with 
the assessment and reporting requirements.
    In order to make an informed decision on appointments of members 
and alternate members to the Board as well as obtaining an appropriate 
balance on the Board, the Secretary will need adequate information on 
all candidate nominees. The Department will restrict the information 
request to that information needed to determine requisite expertise of 
potential nominees and will include biography, experience, status as a 
current manufacturer, type of products manufactured, place of business, 
size of business, statement of interest, and similar background 
information.
    Estimated burden: Public recordkeeping burden for this collection 
of information is estimated to average 1.0 hour per application.

[[Page 52071]]

    Respondents: Manufacturers and others associated with the concrete 
masonry products industry.
    Estimated Number of Respondents: 50.
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 50 hours.
(2) Background Statement
    To fulfill the requirement to oversee assessment collection as well 
as the requirement to maintain adequate records the Secretary will need 
information to support adequate oversight in these areas. The 
Department will restrict the information request to that information 
needed to determine the amount of assessment and will include: The 
number and type of concrete masonry units manufactured; the number and 
type of concrete masonry units on which an assessment was paid; the 
name and address of the manufacturer; manufacturer employee 
identification number; and the date of assessment payment on each 
concrete masonry unit sold; and related assessment accounting 
information. All estimates include the time for reviewing instructions; 
searching existing data sources; gathering or maintaining the needed 
data; and reviewing the information.
    Estimated burden: Public recordkeeping burden for this collection 
of information is estimated to average 1 hour per quarterly report.
    Respondents: Manufacturers of concrete masonry products.
    Estimated Number of Respondents: 690.
    Estimated Number of Responses per Respondent: 4 per year.
    Estimated Total Annual Burden on Respondents: 2760 hours.
    As part of its continuing effort to reduce paperwork and respondent 
burden, the Department invites the general public and other Federal 
agencies to comment on proposed and/or continuing information 
collections, as required by the Paperwork Reduction Act. The Department 
solicits comments concerning: Whether these ICRs are necessary for the 
proper performance of the functions of the Department, including 
whether the information has practical utility; the accuracy of the 
Department's estimates of the burden of the ICRs; the quality, utility, 
and clarity of the information to be collected; and 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. The ICR may be viewed on the 
Reginfo.gov website. Organizations and individuals desiring to submit 
comments on the collection of information requirements should see the 
ADDRESSES section of this document. The final rule will respond to any 
public comments on the ICRs contained in this proposal. Notwithstanding 
any other provision of the law, no person is required to respond to, 
and no person will be subject to penalty for failure to comply with, a 
collection of information subject to the requirements of the PRA, 
unless that collection of information displays a currently valid OMB 
control number.

National Environmental Policy Act

    This proposed rule will not significantly affect the quality of the 
human environment. Therefore, an environmental assessment or 
Environmental Impact Statement is not required to be prepared under the 
National Environmental Policy Act of 1969.

List of Subjects in 15 CFR Part 1500

    Administrative practice and procedure, Advertising, Consumer 
information, Marketing agreements, Concrete masonry promotion, 
Reporting and recordkeeping requirements.


0
For the reasons stated in the preamble, under the authority at 15 
U.S.C. 8701-8717, the Office of the Under-Secretary for Economic 
Affairs, Department of Commerce proposes to establish Chapter XV, 
consisting of 15 CFR part 1500 as set forth below:

CHAPTER XV--OFFICE OF THE UNDER-SECRETARY FOR ECONOMIC AFFAIRS

PART 1500--CONCRETE MASONRY PRODUCTS RESEARCH, EDUCATION, AND 
PROMOTION

Subpart A--Concrete Masonry Products Research, Education, and 
Promotion Order

Definitions
Sec.
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 Order.
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.
1500.43 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.

    Authority: 15 U.S.C. 8701-8717.

Definitions


Sec.  1500.1  Act.

    Act means the Concrete Masonry Products Research, Education, and 
Promotion Act of 2018 (15 U.S.C. 8701 et seq.; Public Law 115-254, 
1301, 132 Stat. 3469-3485 (2018)), and any amendments thereto.


Sec.  1500.2  Block Machine.

    Block machine means a piece of equipment that utilizes vibration 
and compaction to form concrete masonry products.


Sec.  1500.3  Board.

    Board means the ``Concrete Masonry Products Board'' established 
under Sec.  1500.40 of this Order.


Sec.  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.


Sec.  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.

[[Page 52072]]

Sec.  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.


Sec.  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.


Sec.  1500.8  Department.

    Department means the United States Department of Commerce.


Sec.  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.


Sec.  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.


Sec.  1500.11  Geographic Regions.

    Geographic Regions means the groupings of states as delineated in 
Sec.  1500.40(c) of this Order, for the purpose of supporting research, 
education, and promotion plans and projects.


Sec.  1500.12  Machine Cavities.

    Machine cavities means the cavities with which a block machine 
could be equipped.


Sec.  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 operable and capable of producing concrete 
masonry units.


Sec.  1500.14  Manufacturer.

    Manufacturer means any person engaged in the manufacturing of 
commercial concrete masonry products in the United States.


Sec.  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.


Sec.  1500.16  Order.

    Order means this Concrete Masonry Products Research, Education, and 
Promotion order, including all subparts.


Sec.  1500.17  Person.

    Person means any individual, group of individuals, partnership, 
corporation, association, cooperative or any other entity.


Sec.  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.


Sec.  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.


Sec.  1500.20  Secretary.

    Secretary means the Secretary of the United States Department of 
Commerce.


Sec.  1500.21  United States.

    United States means the several states and the District of 
Columbia.

Concrete Masonry Products Board


Sec.  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 Sec.  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 Sec.  1500.40(d), 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:

                        Table 1 to paragraph (c)
------------------------------------------------------------------------
           Region            District                States
------------------------------------------------------------------------
1..........................         1  Connecticut, Maine,
                                        Massachusetts, New Hampshire,
                                        Rhode Island, and Vermont.
                                    2  New York.
                                    3  Delaware, District of Columbia,
                                        Maryland, New Jersey,
                                        Pennsylvania, and West Virginia.
2..........................         4  North Carolina, South Carolina,
                                        and Virginia.
                                    5  Alabama, Georgia, Mississippi,
                                        and Tennessee.
                                    6  Florida.
3..........................         7  Indiana, Kentucky, and Ohio.
                                    8  Illinois, Michigan, and
                                        Wisconsin.
                                    9  Iowa, Minnesota, Nebraska, North
                                        Dakota, and South Dakota.
4..........................        10  Arkansas, Kansas, Missouri, and
                                        Oklahoma.
                                   11  Louisiana, and Texas.
                                   12  Arizona, and New Mexico.
5..........................        13  Colorado, Utah, and Wyoming.
                                   14  Alaska, Idaho, Montana, Oregon,
                                        and Washington.
                                   15  California, Hawaii, and Nevada.
------------------------------------------------------------------------


[[Page 52073]]

    (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, including but 
not limited to modifying the regions and districts set forth in 
1500.40(c), and the allocation of Board members to reflect changes in 
the geographical distribution of the manufacture of concrete masonry 
products and the types of concrete masonry products manufactured.


Sec.  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 six alternate members of the Board within a 
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 Sec.  
1500.40.
    (c) Nominations by manufacturers for Board members, including self-
nominations will be submitted to the Board. 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 
vacant position. The Secretary may also receive nominations and may 
forward them to the Board for their consideration. From the nominees 
not appointed, the Secretary will appoint six alternate members for the 
Board. Alternate members will be non-voting members of the Board.


Sec.  1500.42  Term of office.

    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.
    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.


Sec.  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 Sec.  1500.41.


Sec.  1500.44  Disqualification.

    (a) In the event that any Board member or alternate Board member 
ceases to qualify as a manufacturer, such Board member or alternate 
Board member shall be disqualified from serving on the Board.
    (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. All members serve 
at the pleasure of the Secretary.


Sec.  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, Vice- Chair, 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 Sec.  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.


Sec.  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.


Sec.  1500.47  Powers and duties.

    The Board shall have the following powers and duties:

[[Page 52074]]

    (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;
    (e) To establish regional committees to administer regional 
initiatives;
    (f) To recommend to the Secretary modifications to the geographical 
regions as described in Sec.  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 Sec.  1500.50(a);
    (j) To borrow funds necessary for the startup expenses of this 
Order;
    (k) To develop and carry out 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 Sec.  1500.51 and other income of the Board as provided under 
Sec.  1500.50(j) and Sec.  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, 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 Sec.  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 
Sec.  1500.46(m) shall be subject to the requirements of all contracts 
or agreements described in Sec.  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) To cause its books to be audited by a certified public 
accountant at the end of each fiscal year and at such other times as 
the Secretary may request, and to 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, evaluate, 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 Sec.  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.


Sec.  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 promotion, research, or education 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) 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); 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


Sec.  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. 
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) Each such budget shall include:
    (1) A statement of objectives and strategy for each program, plan, 
or project;
    (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).
    (b) Each budget shall provide adequate funds to defray its proposed 
expenditures.
    (c) 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 de minimis shift of 
funds from one

[[Page 52075]]

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 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.
    (d) 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.
    (e) 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 (except for fiscal years 
2028 and 2029, for which 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);
    (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.
    (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 fiscal year 2030.
    (3) Prior to the end of fiscal year 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 
fiscal year 2030.
    (f) 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.
    (g) 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.
    (h) 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.
    (i) 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.
    (j) Investment income and revenue earned under paragraph (i) are 
earnings obtained from assessments that are subject to budget approval 
under paragraph (a).


Sec.  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 compliance program and its plan to verify 
compliance with the Act. The compliance program 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.
    (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 
office of 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 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

[[Page 52076]]

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.


Sec.  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 
provide for:
    (1) The establishment, issuance, effectuation and administration of 
appropriate programs for research, education, and promotion with 
respect to concrete masonry; and
    (2) 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 
shall show the estimated cost to be incurred for such 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 Sec.  
1500.50(a)(1).


Sec.  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.


Sec.  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


Sec.  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 Sec.  1500.70 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 Sec.  1500.72.


Sec.  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 and the regulations 
issued thereunder, 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.


Sec.  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, and the regulations issued thereunder shall 
be kept confidential by all persons, including all employees and former 
employees of the Board, all officers and employees and former 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

[[Page 52077]]

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


Sec.  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.


Sec.  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 Sec.  
1500.51. Each manufacturer eligible to vote in the referendum shall be 
entitled to one vote. This Order shall become effective if 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.
    (b) After the initial referendum, the Secretary shall conduct a 
referendum upon the request of the Board, or effective beginning on the 
date that is 5 years after the date of approval of this Order 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. For any new 
proposed order, voter eligibility will be based on the scope of such 
proposed order. This Order shall continue if 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.


Sec.  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 Sec.  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 Sec.  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.


Sec.  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 to either 
thereof,\1\ shall not:
---------------------------------------------------------------------------

    \1\ As noted previously, the Department intends to clarify this 
language in any final order.
---------------------------------------------------------------------------

    (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 or any regulation issued thereunder;
    (b) Release or extinguish any violation of this Order or any 
regulation issued thereunder; 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.


Sec.  1500.84  Notice and advance registration.

    Not later than 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.


Sec.  1500.85  Personal liability.

    No member or employee of the Board shall be held personally 
responsible, either individually or jointly with others, in any way 
whatsoever, to any person for errors in judgment, mistakes or other 
acts, either of commission or omission, as such member or employee, 
except for acts of dishonesty or willful misconduct.


Sec.  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.


Sec.  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 an order.


Sec.  1500.88  OMB control number.

    The control numbers assigned to the information collection request 
in this subpart by the Office of Management and Budget pursuant to the 
Paperwork Reduction Act of 1995, 44 U.S.C. Chapter 35, is OMB control 
number [To be added upon OMB approval of the associated information 
collection request].

    Dated: August 6, 2020.
Kenneth White,
Senior Policy Analyst, Under Secretary for Economic Affairs.
[FR Doc. 2020-17515 Filed 8-21-20; 8:45 am]
BILLING CODE 3510-20-P