Concrete Masonry Products Research, Education, and Promotion Order, 51456-51486 [2021-18352]

Agencies

• DEPARTMENT OF COMMERCE
• Office of the Under-Secretary for Economic Affairs

[Federal Register Volume 86, Number 176 (Wednesday, September 15, 2021)]
[Rules and Regulations]
[Pages 51456-51486]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-18352]



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Vol. 86

Wednesday,

No. 176

September 15, 2021

Part II





Department of Commerce





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Office of the Under-Secretary for Economic Affairs





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15 CFR Part 1500





Concrete Masonry Products Research, Education, and Promotion Order; 
Final Rule

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

[[Page 51456]]


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DEPARTMENT OF COMMERCE

Office of the Under-Secretary for Economic Affairs

15 CFR Part 1500

[Docket No.: 210820-0165]
RIN 0605-AA53


Concrete Masonry Products Research, Education, and Promotion 
Order

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

ACTION: Final rule; notification of referendum.

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SUMMARY: This final rule sets forth the proposed Concrete Masonry 
Products Research, Education, and Promotion Order, as authorized by the 
Concrete Masonry Products Research, Education, and Promotion Act of 
2018, which establishes a Concrete Masonry Products Board (Board) 
composed of industry members appointed by the Secretary of Commerce 
(Secretary) to develop and implement programs of research, education, 
and promotion in the concrete masonry products industry. This final 
rule: Defines the purpose of the program; provides for a national 
Board, outlining its basic structure and defining its responsibilities; 
establishes an assessment and provides for its collection; outlines 
program funding and its limits to program activities; establishes 
recordkeeping requirements; sets out the Department's authority to 
review and approve program activities; outlines the Department's 
enforcement authority; and sets up a referendum to determine whether 
the Department will rescind this Order.

DATES: 
    Effective date: November 29, 2021. If the referendum fails, the 
Department will publish a document in the Federal Register to withdraw 
this final rule before the effective date.
    Referendum dates: Registration to participate in the referendum 
began following the publication of the final rule on referendum 
procedures (86 FR 23271, May 3, 2021). The referendum period will 
conclude after thirty days or once all registrants have voted, 
whichever occurs first. The referendum begins October 15, 2021. See 
SUPPLEMENTARY INFORMATION for more information and details regarding 
referendum. The Department must receive ballots no later than midnight 
of the final day of the referendum period on November 15, 2021.

ADDRESSES: Voters may submit ballots via mail to United States 
Department of Commerce Checkoff Team, 4600 Silver Hill Road, 
Washington, DC 20233, or facsimile (301) 278-9099.

FOR FURTHER INFORMATION CONTACT: Mr. Michael Thompson, Communications 
for the Commerce Checkoff Implementation Program, Office of the Under 
Secretary for Economic Affairs, telephone: (202) 482-0671 or via 
electronic mail: [email protected].

SUPPLEMENTARY INFORMATION: The Concrete Masonry Products Research, 
Education, and Promotion Act of 2018 authorizes the Concrete Masonry 
Products Research, Education, and Promotion Order (the Order). This 
document affects 15 CFR part 1500, subpart A. The purpose of the Order 
is to strengthen the position of the concrete masonry products industry 
in the domestic marketplace; maintain, develop, and expand markets and 
uses of concrete masonry products in the domestic marketplace; and 
promote the use of concrete masonry products in construction and 
building. This Order sets forth the process to establish a Concrete 
Masonry Products Board (the Board) composed of industry members 
appointed by the Secretary of Commerce (the Secretary) to develop and 
implement programs of research, education, and promotion in the 
concrete masonry products industry. The funding of the Board's 
activities and programs is through assessments paid by manufacturers of 
concrete masonry units. The initial assessment is $.01 per concrete 
masonry unit sold. The Secretary will hold a referendum among eligible 
manufacturers to determine whether they favor the implementation of the 
Order. For the Order to go into effect, there must be a majority 
``yes'' vote by both: (1) The total number of concrete masonry unit 
manufacturers voting, and (2) manufacturers who operate a majority of 
the machine cavities operated by the manufacturers voting in the 
referendum. Manufacturers must register prior to midnight of the day 
prior to the start of the referendum period in order to vote.
    The Department published the referendum procedures separately in 
the Federal Register (86 FR 23271, May 3, 2021), codified at 15 CFR 
part 1500, subpart B. This final rule also announces that the U.S. 
Department of Commerce is conducting the referendum among eligible 
manufacturers of concrete masonry units to determine whether they favor 
implementation of the program. The referendum period will conclude 
after thirty days or once all registrants have voted, whichever occurs 
first. Whether this Order will go into effect is dependent upon the 
outcome of the referendum. To be eligible to vote, concrete masonry 
unit manufacturers must have manufactured concrete masonry units within 
the last 180 days prior to the start of the referendum period. The 
Department will mail ballots to all registered concrete masonry unit 
manufacturers.
    Pursuant to the Concrete Masonry Products Research, Education, and 
Promotion Act of 2018, 15 U.S.C. 8701 et seq. (the Act), the Department 
of Commerce (the Department) is enacting a research, education, and 
promotion program (commonly referred to as a checkoff program) for 
concrete masonry products. The Act also authorizes the Secretary to 
``issue such regulations as may be necessary to carry out [the Act] and 
the power vested in the Secretary under [the Act].'' (See 15 U.S.C. 
8701, 8713). This document is the final version of the Order and will 
be the subject of a referendum. If the manufacturers of concrete 
masonry units, via the referendum, approve the Order, the Secretary 
will appoint a Board to carry out the duties as the Order prescribes, 
including the collection of the assessment. Under the Order, the 
Secretary would establish a Board that reflects a fair, equitable, and 
diverse representation of the concrete masonry products industry, 
reflecting the geographical distribution of the manufacture of concrete 
masonry products in the United States, the types of concrete masonry 
products manufactured, and the range in size of manufacturers in the 
United States. An industrywide assessment of $.01 per concrete masonry 
unit sold would finance the research, education, and promotion 
initiatives of the checkoff program. The Secretary would oversee the 
operations and actions of the Board.
    As part of this rulemaking process, the Department published (1) a 
proposed Order (85 FR 52059, August 24, 2020), and (2) proposed 
referendum procedures (85 FR 65288 October 15, 2020). Both rules 
provided for a comment period that has now expired. The Department 
received comments on the proposed Order from 146 commenters. The 
comments and the Department's responses are set forth in this final 
rule.

I. Industry Background

    While the concrete masonry product industry is of moderate size, 
its manufacturers populate every State in the nation as well as the 
District of Columbia. The nature of the industry and cost of 
transportation of the products is such that the customer base

[[Page 51457]]

for concrete masonry products is very localized. Relatively small 
producers dominate the industry. Because they produce a commodity that 
is not easily differentiated by manufacturer, most of the producers 
acting alone do not have the resources to efficiently market the value 
of the product or conduct the research and education to promote market 
growth. Coordinated activity would enable producers to leverage 
economies of scale in conducting research, education, and promotion of 
the industry.
    The Order applies to products manufactured on concrete block 
machines and used for construction. The Act and the Order distinguish 
between concrete masonry products and concrete masonry units. Concrete 
masonry units are a type of concrete masonry product with an actual 
width of 3 inches or greater that are manufactured from dry-cast 
concrete using a block machine, including concrete block and related 
concrete units used in masonry applications. According to industry 
experts, the vast majority of these units are the hollow, loadbearing 
concrete blocks often referred to as ``gray block.'' \1\ In contrast, 
concrete masonry products is a broader category that, in addition to 
concrete masonry units, includes hardscape products, such as concrete 
pavers and segmental retaining wall units, manufactured on a block 
machine using dry-cast concrete.
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    \1\ National Concrete Masonry Association (NCMA), 2019 CMU Sales 
Report (Herndon, VA: NCMA, 2019); https://ncma.org/updates/news/2019-cmu-sales-survey-released/.
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    Concrete masonry products range from the paver that is of original 
design and very ornate to the homogenous, non-descript 8-inch x 8-inch 
x 16-inch concrete block. The initial rate of assessment will apply 
only to concrete masonry units.
    To identify the affected industry, the Department used statistics 
for the North American Industry Classification System (NAICS) code 
327331, concrete block and brick manufacturing. This industry includes 
the manufacturers of concrete architectural block, concrete and cinder 
blocks, concrete bricks, concrete patio block, concrete paving block, 
precast terrazzo plinth blocks, precast concrete block and brick, 
prestressed concrete blocks or bricks, and slumped brick.\2\ The 
Department believes this NAICS classification most closely corresponds 
to manufacturers of the broader category of concrete masonry products.
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    \2\ 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.
[GRAPHIC] [TIFF OMITTED] TR15SE21.003

    According to estimates from the 2017 Economic Census of the U.S. 
Census Bureau, the block and brick manufacturing industry had nearly 
700 establishments and more than 16,000 employees in 2017. From 2007 to 
2017, the number of establishments, number of employees, annual 
payroll, value added, and value of shipments declined in the 
industry.\3\ There were 690 block and brick manufacturing 
establishments in 2017, down from 914 in 2007. The number of employees 
fell by 7,578 to 16,247 in 2017, and annual payroll fell $152 million 
to $841 million. Value added and total value of shipments also fell 
during this time period, down $715 million to $2.86 billion and down 
$1.36 billion to $4.88 billion, respectively.
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    \3\ 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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[GRAPHIC] [TIFF OMITTED] TR15SE21.004

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

(A) Concrete Block, including:
    (1) Gray
    (2) Architectural
    (3) Prefaced
    (4) Those joined by any method in masonry construction:
    (i) Bed joint mortar or adhesives
    (ii) Dry-stacked and joined by filling cores solid with grout or 
joined by other means
    (iii) Post tensioned
    (iv) Surfaced bonded
    (5) Sound wall block
    (6) Fence block
    (7) Lintel Block--while lintels designed to span an entire opening 
are excluded, those concrete masonry units joined to create a lintel 
are included
    (8) Chimney, Pilaster, or Column Block
    (9) Screen Block--these architectural units are included if their 
widths are greater than 3 inches if they are made on a block machine
    (10) Concrete Sill Block--these units and related specialty units 
are included if their widths are greater than 3 inches if they are made 
on a block machine
    (11) Concrete Block formed with concrete masonry face shells and 
other materials to create a masonry unit used in masonry construction
(B) Concrete Brick (Architectural only)
(C) Concrete Masonry Veneer Units (greater than 3 inches in width)

Summary of Final Rule

    Under the Order, the Secretary will establish a Board that ensures 
fair, equitable, and diverse representation of the concrete masonry 
products industry, reflecting the geographical distribution of the 
manufacture of concrete masonry products in the United States, the 
types of concrete masonry products manufactured, and the range in size 
of manufacturers in the United States. An industrywide assessment would 
finance the research, education, and promotion initiatives of the 
checkoff program. The Secretary would oversee the operations and 
actions of the Board.
    The Order addresses, among other items, establishment and 
membership of the Board, guidance for appointments, a nomination 
process, the selection of alternates, Board terms, powers and duties of 
the Board, programs and projects to carry out the purpose of the Act, 
budgets, expenses, contracts and agreements, books and records, and 
reporting requirements.
    The Order provides the rate of assessment and that such assessments 
shall be paid by a manufacturer that has manufactured concrete masonry 
products during a period of at least 180 days prior to the date they 
are to pay the assessment. The initial rate of assessment is $.01 per 
concrete masonry unit sold. Such manufacturers will submit their 
assessments to the Board quarterly. The Order allows for a change in 
rate if a two-thirds majority of voting members of the Board so vote. 
An increase or decrease can occur only once per year and the change in 
rate may not exceed $.01 per concrete masonry unit sold. Finally, the 
assessment rate shall not be in excess of $.05 per concrete masonry 
unit.
    The Order provides that not less than 50 percent of assessments 
(less administration expenses) paid by a manufacturer shall be used to 
support research, education, and promotion programs and projects in 
support of the Geographic Region of the contributing manufacturer. The 
Order defines five Geographic Regions that generally reflect the 
northeast, southeast, middle, southwest, and northwest (plus Hawaii and 
Alaska) of the United States. The Board will work with regional 
concrete industry groups to allocate funding and coordinate programs 
that have national and regional impact.
    Programs for research, promotion and education will further the 
following goals:
     Strengthen the position of the domestic concrete masonry 
products industry.
     Maintain, develop, and expand markets and uses for 
concrete masonry products domestically.
     Promote the use of concrete masonry products in 
construction and building.
    The Act mandates that the Department conduct a referendum among 
eligible manufacturers of concrete masonry products to determine 
whether the manufacturers favor implementation of the concrete checkoff 
program prior to it going into effect. Each manufacturer eligible to 
vote in the referendum is entitled to one vote. The Department will use 
Employer Identification Numbers to identify unique manufacturers. For 
the order to go into effect, there must be a majority ``yes'' vote by 
both: (1) The total number

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of concrete masonry unit manufacturers voting; and (2) manufacturers 
who operate a majority of the machine cavities operated by the 
manufacturers voting in the referendum. For more details on the 
referendum see the referendum procedures notice published separately 
the Federal Register (86 FR 23271, May 3, 2021.
    To participate in the referendum manufacturers must to register by 
midnight of the day prior to the start of the referendum period.
    Although the Department specifically requested comments on its 
intended use of the Employer Identification Numbers (EIN) as an 
identifier of unique manufacturers, none were received. Therefore, the 
Department will proceed with its plan to use EIN to identify unique 
manufacturers eligible to vote in the referendum.

Final Regulatory Flexibility Act Analysis

    The Regulatory Flexibility Act (RFA), first enacted in 1980 and 
codified at 5 U.S.C. 600-611, is intended to place the burden on the 
government to review all new regulations to ensure that, while 
accomplishing their intended purposes, they do not unduly inhibit the 
ability of small entities to compete. The RFA recognizes that the size 
of a business, unit of government, or nonprofit organization can have a 
bearing on its ability to comply with Federal regulations. Major goals 
of the RFA are: (1) To increase agency awareness and understanding of 
the impact of their regulations on small business; (2) to require that 
agencies communicate and explain their findings to the public; and (3) 
to encourage agencies to use flexibility and to provide regulatory 
relief to small entities.
    The RFA emphasizes predicting significant adverse impacts on small 
entities as a group distinct from other entities and on the 
consideration of alternatives that may minimize the impacts, while 
still achieving the stated objective of the action. When an agency 
publishes a proposed regulatory action, it must either: (1) Certify 
that the action will not have a significant adverse impact on a 
substantial number of small entities, and support such a certification 
declaration with a factual basis, demonstrating this outcome, or, (2) 
if such a certification cannot be supported by a factual basis, prepare 
and make available for public review an Initial Regulatory Flexibility 
Analysis (IRFA) that describes the impact of the proposed rule on small 
entities.
    The Department issued an IRFA and requested public comments. Those 
comments and the Department's responses are found in the ``Public 
Comments'' section of this final rule. The FRFA includes updates to the 
RFA the Department references in the responses to the IRFA public 
comments.

Basis and Purpose of the Rule

    This action is taken under the authority of the Act, which 
authorizes a research, education, and promotion program for concrete 
masonry products, also known as a checkoff program. The Secretary will 
establish this checkoff program by issuance of an order issued that is 
subject to approval by an industry referendum. If industry approves of 
the order, the program would then be carried out by a Board, which 
would develop research and education programs as well as efforts to 
promote concrete masonry products in domestic markets. Board activities 
would be funded by assessments on manufacturers of concrete masonry 
products, based on the number of concrete masonry units sold each 
quarter. The specific burdens for applying for Board membership and the 
ongoing evaluation and compliance program are detailed later in this 
document in the section titled ``Paperwork Reduction Act''.

A Description of and an Estimate of the Number of Small Entities to 
Which the Rule Will Apply or an Explanation of Why No Such Estimate Is 
Available

    The final Order applies to products manufactured on concrete block 
machines and used for construction. As indicated by the data below and 
confirmed by industry experts, the industry is dominated by small 
entities.
    The U.S. Small Business Administration size standard to qualify as 
a small business in this industry is 500 or fewer employees.\4\ 
According to Census data, there were 430 firms and 686 establishments 
engaged in concrete block and brick manufacturing in 2017.\5\ Of these, 
401 firms, or 93 percent, employed fewer than 500 employees, and these 
small firms accounted for 514 establishments, or 75 percent of all 
establishments, and about 62 percent of industry employment.\6\ Note 
that a single company or business can have multiple firms, and a single 
firm can have multiple establishments.
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    \4\ See ``Table of Small Business Size Standards Matched to 
North American Industry Classification System Codes'' on the U.S. 
Small Business Administration website. For the economic analysis, 
the Department used statistics for the North American Industry 
Classification System (NAICS) code 327331, concrete block and brick 
manufacturing.
    \5\ 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.
    \6\ 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.

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[GRAPHIC] [TIFF OMITTED] TR15SE21.005

Costs to Affected Entities

    Assessment costs--Under this final Order, concrete masonry unit 
manufacturers would be required to pay assessments to the Board to fund 
the research, education, and promotion programs of the Board. 
Assessment rates are dictated by the Act, which specifies assessments 
of $0.01 per unit sold, up to a maximum of $0.05 per unit sold, with 
assessments increasing by no more than $0.01 per year.
    To estimate the costs to businesses, the Department estimates a 
range of assessment revenues, with the lower bound calculated using 
assessments of $0.01 with no increases in future years and the upper 
bound calculated using the maximum assessment rates permitted under the 
Act--$0.01 in the first year, increasing by $0.01 in subsequent years 
to the maximum of $0.05 in the fifth year and thereafter.
    To estimate the number of units sold by small entities, the 
Department relies on industry reports that show there were 1.15 billion 
concrete masonry units produced in 2018. Assuming small businesses 
produced 60 to 75 percent of overall production, we estimate that 
between 690 and 862.5 million units would be produced by small 
businesses in the first year of the program. Based on these estimates, 
total estimated assessments on small businesses based on $0.01 per unit 
produced would be $6.90 million to $8.63 million in the first year.
    To estimate a lower bound on expected annual assessment costs, we 
assume assessments remain constant at $0.01 for 10 years and industry 
production grows with inflation. Therefore, total assessments on small 
businesses over the next 10 years is expected to be $6.90 million to 
$8.63 million per year. The midpoint of this range, $7.76 million, is 
the Department's lower bound estimate of annual costs to small 
businesses. This amounts to $19,358 per firm each year.
    To estimate an upper bound estimate of costs, we assume the Board 
institutes the maximum assessment authorized under the Act, resulting 
in a $0.01 per unit assessment in year 1, $0.02 in year 2, $0.03 in 
year 3, $0.04 in year 4, and $0.05 in years 5 through 10. Again, 
assuming industry production grows with inflation, total assessments on 
small businesses over the next 10 years would be expected to average 
$27.60 million to $34.50 million per year. The midpoint of this range, 
$31.05 million, is the Department's upper bound estimate of annual 
costs to small businesses. This amounts to an average of $77,431 per 
firm each year.
    Applying the Department's upper bound cost estimate to the receipts 
estimated by the Census Bureau for this industry, total costs on small 
businesses represent about 1.1 percent of small business receipts 
(shown in ``Table 3: Block and Brick Manufacturers 2017 by Business 
Size,'' employment size less than 500). Again, this would be the 
average over the 10-year period. Assessments would be lowest in year 1 
and highest in years 5 through 10.
    These estimated assessment costs are based on the limited 
information available for the concrete and brick manufacturers 
industry. For this analysis, the Department relies on industry 
estimates for annual unit production. Because unit production is not 
available by business size, we estimate a range of unit production 
using establishment data from the U.S. Census Bureau for NAICS industry 
327331. Because the number of firms estimated by industry experts 
differs from the number of firms under NAICS industry 327331, we 
request comments regarding the number and size of entities covered 
under the proposed order, including whether production occurs among 
businesses not classified under NAICS industry 327331.
    Reporting costs--In addition to assessments paid on concrete 
masonry units, there are reporting costs associated with adoption of 
this final Order. Under the proposed order, each manufacturer may be 
required to periodically provide to the Board such information as may 
be required by the Board, with the approval of the Secretary, which may 
include, but not be limited to, the following:
    1. Number and type of concrete masonry units manufactured;
    2. Number and type of concrete masonry units on which an assessment 
was paid;
    3. Name and address of the manufacturer; and
    4. Date assessment was paid on each concrete masonry unit sold.
We expect these reporting costs to be incurred with the quarterly 
assessments paid by manufacturers. We estimate that managers would 
spend 60 minutes per quarterly report. According to the Bureau of Labor 
Statistics, the median pay for industrial production managers is $50.71 
per hour.\7\ Thus, we estimate that firms will pay, on average, $202.84 
for reporting costs per year.
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    \7\ See the Occupational Outlook Handbook, Bureau of Labor 
Statistics (https://www.bls.gov/ooh/ ooh/).
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Benefits for Affected Entities

    While this final Order may result in a significant cost for a 
substantial number of small businesses, these costs are expected to 
result in benefits to businesses that are at least commensurate with 
these costs. The

[[Page 51461]]

assessments pay for investments in product research, education, and 
promotion programs that are intended to yield direct benefits to 
concrete product manufacturers in the form of new markets and increased 
consumer demand.

Alternatives: Consideration of a De Minimis Exemption

    The Department recognizes that some small businesses with minimal 
production in the industry may not have the resources to comply with 
the requirements imposed by the proposed order, and therefore, the 
Department may consider a de minimis exemption for these small 
businesses. A de minimis exemption would exclude from the order some 
small businesses with minimal production, based on measures of unit 
production, employment, receipts, machine cavities, or other relevant 
criteria. The Department requested comments on whether to include a de 
minimis exception. Those that commented on a de minimis exception were 
universally opposed to the inclusion of one. Comments in opposition 
included several manufacturers to which a de minimis exception would 
apply. The Department did not receive any comments supporting the 
inclusion of a de minimis exception. At this time the Department has 
decided to defer to industry preferences and will not include a de 
minimis exception in this Order. The Department reiterates this 
decision in its response to comments below. This Order complies with 
the statutory requirements of the Act; there are no other possible 
alternatives to this final rule.

A Description of the Steps the Agency Has Taken To Minimize the 
Significant Economic Impact on Small Entities Consistent With the 
Stated Objectives of Applicable Statutes

    To minimize the respondent burden, the Department plans to create 
simple forms for ease of applying for Board membership and submitting 
evaluation and compliance information. Further, the Department plans to 
allow interested parties to apply for Board membership and submit 
evaluation and compliance information via email, by mail, or 
facsimile--at the choice of the respondent. See ADDRESSES and FOR 
FURTHER INFORMATION CONTACT in this preamble.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
chapter 35), the Department submitted to OMB for approval the 
application form individuals will complete for consideration as a Board 
member and the evaluation and compliance form the Board will use to 
assist in receiving assessments. These forms represent the information 
collection and recordkeeping requirements to establish the Board and to 
document evaluation and compliance of the program. OMB approved both 
forms under OMB Control Number 0605-0028.
    Title: Concrete Masonry Products Research, Education, and Promotion 
Order.
    OMB Number: 0605-0028.
    Expiration Date of Approval: October 31, 2023.
    Type of Request: New information collection for research, education 
and promotion programs.
    Abstract: The Department seeks to establish an orderly program for 
developing, financing, and carrying out an effective, continuous, and 
coordinated program of research, education and promotion, to support 
the concrete masonry products industry. The Department has published an 
Order (15 CFR part 1500, subpart A) in the Federal Register to 
establish the program. The purpose of the Order is to strengthen the 
position of the concrete masonry products industry in the domestic 
marketplace; maintain, develop, and expand markets and uses of concrete 
masonry products in the domestic marketplace; and promote the use of 
concrete masonry products in construction and building. The Order 
allows a Concrete Masonry Products Board (Board) made up of industry 
members appointed by the Secretary to develop and implement programs of 
research, education, and promotion. The funding of the Board's 
activities and programs will be through assessments paid by 
manufacturers of concrete masonry units. The initial assessment will be 
$.01 per concrete masonry unit sold.
    The Secretary will hold a referendum among eligible manufacturers 
to determine whether they favor the implementation of the Order. The 
Order only will go into effect if the referendum results in the 
affirmative vote of a majority of those voting and also a majority of 
the block machine cavities in operation by those voting. The Secretary 
will then appoint members of a Board to carry out the duties prescribed 
in the order. Among its duties, the Board will establish an evaluation 
and compliance program to receive and validate assessments. After three 
years and five years, the Secretary will evaluate the appropriateness, 
effectiveness, impact of the program, and provide an accounting of 
assessments.
    The first form of this ICR relates to the establishment of a Board. 
If the referendum is successful and approves the concrete masonry 
products order the Secretary will appoint members and establish a 
Board. Eligible concrete masonry product manufacturers will complete 
and submit an application for Board membership and will be invited to 
provide any additional information to support their application. The 
Board application form is voluntary.
    The second form of this ICR relates to the evaluation and 
compliance program required if the referendum is successful and 
approves the concrete masonry products order. Eligible concrete masonry 
product manufacturers will complete and submit the evaluation and 
compliance form on a quarterly basis. Completion of the evaluation and 
compliance form is mandatory.
    Aside from that noted above in the IRFA, there are no special 
skills required to complete the application for Board membership or the 
evaluation and compliance information.
    The Authorizing Statute: 15 U.S.C. Chapter 13 (sections 8701-8717).

Board Application

    Estimate of Burden: 1.0 hour per application.
    Respondents: Manufacturers of concrete masonry units.
    Estimated Number of Respondents: 50.
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 50.
    The Department will add the Board member application form to the 
other information collections approved under OMB No. 0605-0028.

Evaluation and Compliance

    Estimate of Burden: 1 hour per quarter.
    Respondents: Manufacturers of concrete masonry units.
    Estimated Number of Respondents: 690.
    Estimated Number of Responses per Respondent: 4 per year.
    Estimated Total Annual Burden on Respondents: 2,760 hours.
    The Department will add the Board member application form to the 
other information collections approved under OMB No. 0605-0028.

National Environmental Policy Act

    This final rule will not significantly affect the quality of the 
human environment. Therefore, an environmental assessment or

[[Page 51462]]

Environmental Impact Statement is not required to be prepared under the 
National Environmental Policy Act of 1969.

Public Comments and Department Responses

    The Department published a proposed rule setting forth the draft 
order in the Federal Register on August 25, 2020 (85 FR 52059). The 
Department made available copies of the proposed rule through the 
Office of the Federal Register also via the internet at 
www.regulations.gov. That proposed rule provided for a 45-day comment 
period. The Department received comments from 146 commenters, including 
four commenters that submitted during the public comment period for the 
referendum procedures. This document sets forth the comments the 
Department received on the Order and the Department's responses. Where 
appropriate, similar comments were aggregated together. The comments 
are set forth according to the subject of the comment.

The Initial Regulatory Flexibility Act (IRFA) Report and the 
Department's Economic Analysis

    The Department requested comments on the IRFA report. For ease of 
reading, this section addresses those comments that were specific to 
the IRFA and the Department's economic analysis of the industry. Some 
of the comments received on these subjects are later reinforced by the 
comments received regarding the Order. This may result in a perception 
of repetition; however, any such repetition simply will reinforce the 
Department's goal to address all comments received. The Department will 
refer back to this section where subject matter overlaps. With regards 
to IRFA and the economic analysis of the industry, the Department 
requested comments regarding:
    1. Information about concrete masonry unit production, including:
    a. Estimated annual production of concrete masonry units for the 
industry as a whole and by business size;
    b. The number and size of entities covered under the proposed 
order, including whether production occurs among businesses not 
classified under NAICS industry 327331; and
    c. An estimated sales price for concrete masonry units.
    2. Whether to include a de minimis exemption and what criteria to 
use for an exemption; and
    3. The approach used to estimate the impact of the proposed order 
on industry and small businesses and suggestions for alternative 
approaches.
    Comment:
    One commenter provided the following information on annual 
production numbers: ``The National Concrete Masonry Association (NCMA) 
conducts an annual sales survey of the industry. The latest survey was 
completed in 2019 and includes information on annual production for the 
calendar year 2018. Based on that survey, it is estimated that 1.15 
billion concrete masonry units were produced in the United States in 
2018.''
    Response:
    The Department referenced this NCMA information in its economic 
analysis of the industry.
    Comment:
    Additionally, the commenter provided NCMA ``estimates that there 
are 284 concrete masonry unit manufacturing companies which operate a 
combined 627 plant locations. (Reference: NCMA 2019 CMU Sales Survey). 
These companies operate an estimated 2000 machine cavities. . . . [The 
NCMA] estimates that the median number of machine cavities per concrete 
masonry unit manufacturing company in the U.S. is 3, and the average 
number of machine cavities per company is 6. While the smallest 
companies will have one machine at one location with 2 or 3 machine 
cavities, the largest companies have multiple plant locations in 
multiple regions of the country and more than 100 cavities.'' Based on 
this, the commenter recommends determining company size based on 
production capacity (preferred) or number of production locations. The 
commenter then provided proposed categories.
    Response:
    As mentioned previously, to ensure the fair, equitable, and diverse 
representation of the concrete masonry products industry, the 
composition of the Board will reflect the geographical distribution of 
the manufacture of concrete masonry products in the United States, the 
types of concrete masonry products manufactured, and the range in size 
of manufacturers in the United States. Since the Concrete Masonry 
Products Board should reflect the distribution of both size of company 
and types of products produced, the Department does not believe a 
reliance on concrete masonry unit manufacturing capacity is the correct 
focus. Further, the machines in operation can be dual purpose (i.e., 
molds between concrete masonry units and non-concrete masonry units on 
the same machine can be interchangeable) and therefore a focus on 
concrete masonry unit capacity to determine company size could be 
problematic and not be an accurate reflection on company size.
    As to using the number of production locations as a basis for Board 
membership, the Department does see this as a logical alternative but 
at this time the Department does not have the data needed to verify the 
number of production locations.
    The Department considered these options along with number of 
employees as a measurement and has decided to use number of employees 
to determine company size. Using the number of employees as a 
measurement is consistent with practices of the U.S. Small Business 
Administration (SBA) and the County Business Patterns (CBP) data 
collected by the Bureau of the Census on behalf of the SBA. The SBA 
uses the number of employees to categorize company size. The survey of 
local businesses provides information on the number employees, better 
reflects the entire production of concrete masonry products, and is the 
most reliable information currently available. CBP is an annual series 
that provides subnational economic data by industry and has been in 
existence since 1946. Data reported are for activities occurring during 
the reference year. CBP has been published annually since 1964; similar 
data were reported for various periods since 1946. The Department 
believes this information is the best available to make an accurate 
count.
    If the industry approves the Order, the Board will be able to 
conduct additional surveys that will help better characterize the 
industry. Until such time as the Department can obtain additional 
needed reliable data, the Department will use SBA and CBP data.
    Therefore, the Department will define company size based on the 
number of employees. Companies identified as ``large'' will be those 
with over 500 employees; companies identified as ``medium'' will be 
those with between 100-499 employees; companies identified as small 
will be those with less than 100 employees. See the general comment 
section under the same heading for additional details on the 
Department's definition of company size categories.
    Comment:
    The Department received comments from seventeen commenters all 
opposed to having a de minimis exception. Two commenters did not 
endorse the use of a de minimis exception but suggested that the 
Department not use number of employees as the criteria if the 
Department decides to include a de minimis exception.
    Response:

[[Page 51463]]

    After careful consideration, not receiving any comments supporting 
the inclusion of a de minimis exception and recognizing the lack of 
complete knowledge of the industry composition, the Department has 
decided not to include a de minimis exception. The Department leaves 
open the possibility to include a de minimis exception after a period 
of time to allow some experience of the Order in operation and gain a 
better understanding of the affected industry. Until that possible re-
consideration, there is no de minimis exception and all manufactures of 
concrete masonry units will be subject to the assessment should the 
Order go into effect. See the general comment section under the same 
heading for additional details on the Department's consideration of the 
de minimis exception.
    Comment:
    With regard to the economic analysis and the table [Table 3] 
presented, one commenter pointed out an apparent inaccuracy in the 
total employment number of 6,344 data.
    Response:
    The Department recognizes the table can cause confusion. The 
Department provided a footnote and hyperlink (from the Census Bureau 
(https://www.census.gov/programs-surveys/susb/about/glossary.html) that 
provides an additional explanation of the information in the table. The 
following reproduces the information associated with the hyperlink:

    Enterprise: An enterprise (or ``company'') is a business 
organization consisting of one or more domestic establishments that 
were specified under common ownership or control. The enterprise and 
the establishment are the same for single-establishment firms. Each 
multi-establishment company forms one enterprise--the enterprise 
employment and annual payroll are summed from the associated 
establishments.
    Enterprise Size: Enterprise size designations are determined by 
the summed employment of all associated establishments. Employer 
enterprises with zero employees are enterprises for which no 
associated establishments reported paid employees in the mid-March 
pay period but paid employees at some time during the year.
    Firm: A firm is a business organization consisting of one or 
more domestic establishments in the same geographic area and 
industry that were specified under common ownership or control. The 
firm and the establishment are the same for single-establishment 
firms. For each multi-establishment firm, establishments in the same 
industry within a geographic area will be counted as one firm; the 
firm employment and annual payroll are summed from the associated 
establishments.
    In reading the table remember one company can have multiple 
firms. Therefore, of the 430 firms noted in the table, 401 firms or 
93 percent came from companies employing fewer than 500 employees. 
And these 401 firms accounted for 514 establishments, or 75 percent 
of all establishments, and about 62 percent of the employment across 
the industry. The Department has amended the IRFA to make the point 
clear that a company or business can be made up of multiple firms.

Paperwork Reduction Act

    In the proposed rule, the Department invited comments on the 
information collection requirements (ICR) prescribed in the Paperwork 
Reduction Act section of this rule. Specifically, the Department 
solicited comments on: (a) Whether these ICRs are necessary for the 
proper performance of the functions of the Department, including 
whether the information has practical utility; (b) the accuracy of the 
Department's estimates of the burden of the ICRs; (c) the quality, 
utility, and clarity of the information to be collected; and (d) 
whether the burden of collection of information on those who are to 
respond, including through the use of automated collection techniques 
or other forms of information technology, may be minimized.
    Comment:
    The Department received one comment regarding the information 
collection. The commenter concurred with the time and burden estimate 
for completing the individual forms. However, the commenter believed 
the Department overestimated the total annual burden of completing the 
evaluation and compliance form. The commenter suggested companies vice 
establishments for the form and believed the number of companies to be 
approximately 286.
    Response:
    The Department used 690 establishments in its estimates. Currently 
information on the number of manufacturers in this industry is not 
complete. Until such time as the Department has better information on 
companies, firms, and establishments within this industry and how the 
industry will respond to reporting requirements, the Department chooses 
to err on the side of overestimating and will use the number of 
establishments (690) in its annual burden estimate of the number of 
respondents.

Concrete Masonry Units and Concrete Masonry Products

    Comment:
    One commenter opined that the only product that should be listed in 
the definition of concrete masonry units is gray block.
    Response:
    The Department provided a list of the products it considers qualify 
as a concrete masonry unit. The list reflects those concrete masonry 
products that fall within the definition of concrete masonry unit--a 
concrete masonry product that is manmade masonry unit having an actual 
width of 3 inches or greater and manufactured from dry-cast using a 
block machine. Such term includes concrete block and related concrete 
units used in masonry applications--a more expansive category than only 
gray block. As there were no other comments in opposition, the 
Department will use this non-exhaustive list of examples to identify 
those products that qualify as a concrete masonry unit.
    Comment:
    One commenter pointed out that use of ``or'' vice ``and'' in the 
definition of ``masonry unit'' opens to assessments products not 
contemplated to be subject to assessment. The wording in the Act is ``. 
. . noncombustible building product laid by hand or joined using 
mortar, grout, surface bonding, post-tensioning or some combination of 
these methods.'' On the same subject, one commenter asked the 
Department to refine the definition of masonry unit or give notice to 
include concrete pavers and segmental retaining wall units as being 
subject to assessment.
    Response:
    The commenter attempts to show an apparent inconsistency within the 
Act. However, the Department reads this definition differently and 
finds the term ``or'' combines two thoughts, both of which require 
joining the concrete masonry units with a bonding agent. While both 
readings may be grammatically correct, the other definitions the Act 
provides supports the Department's reading of this definition.
    In its definition of concrete masonry products, the Act refers to a 
broader class of products that would include concrete masonry units as 
well as hardscape products such as concrete pavers and segmental 
retaining wall units. In its definition of concrete masonry products, 
the Act makes clear that hardscape products (concrete pavers and 
segmental retaining wall units) are a concrete masonry product distinct 
from concrete masonry units. Further, the Act defines as unique terms 
``concrete masonry unit'' and ``masonry unit.'' Concrete masonry unit 
is a subset of masonry units. The Act defines masonry unit as a 
noncombustible building product intended to be laid by hand or joined 
using mortar, grout, surface bonding, post-tensioning or some 
combination of these methods.

[[Page 51464]]

    In its American Standard Building Code Requirements for Masonry the 
National Institute of Standards and Technology (NIST) certainly 
captures within its definition of masonry a ``bonding together.'' 
Naturally a masonry unit would contemplate a bonding together of units. 
The definitions provided by the Act also supports the conclusion that a 
masonry unit suggests a bonding together. Those products laid by hand 
without a bonding agent are the hardscape products that the definition 
of concrete masonry products distinguishes as outside of concrete 
masonry units.
    Therefore, the Department finds that the word ``or'' combines the 
following two thoughts:

. . . building product intended to be laid by hand using mortar, 
grout, surface bonding, post tensions or some combination of these 
methods, or
. . . building product intended to be joined using mortar, grout, 
surface bonding, post tensions or some combination of these methods.

    Although the wording and sentence structure is admittedly somewhat 
confusing, the interpretation above aligns with the other definitions, 
NIST standards for masonry which are accepted nation-wide and 
internationally, and the intent of the Act to assess concrete masonry 
units and not the broader class of products that includes pavers and 
segmental retaining walls. As stated previously, hardscape products 
such as pavers and segmental retaining wall units are not concrete 
masonry units and therefore are not subject to assessment under this 
order.

Comments in Full Support of the Proposed Order

    Comment:
    Thirty commenters communicated support of the proposed Order, 
without specifying particular attributes. Most spoke enthusiastically 
about the prospect of having funding available to conduct research, 
education, and promotion programs.
    Comment:
    53 commenters highlighted that the program will increase sales and 
job growth. Many commenters noted that the softwood lumber building 
industry has successfully implemented its own Checkoff program. The 
commenters viewed a Checkoff program as a vital initiative and one that 
will help them better compete in the building products market.
    Comment:
    45 commenters espoused the resiliency of concrete masonry units as 
a construction material, specifically calling attention to its 
resistance to extreme weather and wind conditions, its durability 
against natural disasters and earthquakes, fire safety features, and 
generally safer structures. Commenters believed if a checkoff program 
is implemented, a priority should be given to conducting an information 
campaign that highlights these attributes.
    Comment:
    28 commenters identified regional training and workforce 
development as priorities for future growth. The commenters envisioned 
a more robust training program at both the university level and trade 
schools. Commenters believed Many universities have dropped the 
building trades from their curriculum. Commenters had a stated desire 
to reverse this trend. One commenter felt the program could promote 
wider use of software programs and other tools in the engineering and 
construction design of structures.
    Comment:
    26 commenters supported engaging in a messaging campaign targeting 
designers, architects, engineers in an effort to impact local building 
codes in favor of concrete masonry as the building product of choice.
    Comment:
    Ten commenters voiced a desire to fund research to determine the 
true environmental impact of concrete masonry units, believing such 
research will show that over their life, concrete masonry units reduce 
the carbon emissions (especially when offset by carbon recovery) and 
have a low environmental impact as compared to other building 
materials. In addition, commenters believed there were manufacturing 
aspects to explore that will further reduce the carbon footprint of 
concrete masonry units.
    Response:
    The Department appreciates all public comments both in support or 
opposed to the Order and finds them all very constructive. The 
Department remains committed to its neutral position as to the ultimate 
outcome of the referendum. By publishing all comments, the Department 
continues its full support of the industry as a whole and the decision 
the industry ultimately chooses.

Comments Against or Reflecting a Desire for Changes

Regional and State-Based Checkoff Programs

    Comment:
    Fourteen commenters, primarily from concrete masonry unit producers 
in the State of Florida, supported a voluntary, State-based checkoff 
program in lieu of a national, mandatory program. Several commenters 
noted ``the State of Florida has had a voluntary program in operation 
for a number of years.'' Several reinforced the thought of one 
commenter that ``the State program has been effective in serving local 
concrete masonry units (CMU) initiatives and need'' and that ``Florida 
CMU companies view the Proposed Order as another ``TAX'' on Florida 
companies.'' Another commenter stated that ``manufacturers should not 
be compelled to participate or contribute to any program, let alone one 
that seems to have been conceived without full regard for the state and 
nature of their individual businesses or markets, or one that has not 
clear direction, strategy or philosophy.'' Another commenter succinctly 
provided that ``I now conclude that I don't think a national Check Off 
program is right for my industry. Instead, the program should be at the 
state level, which will be far more efficient and effective at 
addressing local and regional interests.'' In opposition to a voluntary 
program, another commenter observed that ``as we've seen over time that 
it is kind of the 80-20 rule. 80% of the companies watch as 20% of the 
companies consistently contribute. Our industry needs 100% 
participation''.
    Response:
    While nothing prevents the industry from creating a ``voluntary'' 
checkoff program, the Act does not authorize the Department to 
establish a ``voluntary'' checkoff program.
    The Act authorizes the Department to establish a ``checkoff'' 
program under a National Board that will collect an established 
assessment. The ``checkoff'' program is for research, education, and 
promotion, including funds for marketing and market research 
activities, that promote the use of concrete masonry products in 
construction and building. Government checkoff programs facilitate 
cooperation within industries dominated by relatively small producers 
that produce a commodity that is not easily differentiated by 
manufacturer. Typically, manufacturers acting alone do not have the 
resources to efficiently market the value of the product or conduct the 
research and education to promote market growth. Government checkoff 
programs facilitate cooperation within an industry and allow for a 
comprehensive, industry-wide strategy to expand markets.
    One purpose of a nationwide checkoff is to promote a commodity as a 
whole, instead of by individual businesses, meaning participants in the 
industry benefit from economies of scale in conducting research, 
education, and

[[Page 51465]]

promotion for the entire industry. The goal of a checkoff program is to 
enhance consumer awareness nationwide which may lead to increased sales 
and higher overall demand for masonry products.
    Another purpose of Government involvement in checkoff is to enforce 
the remittance of assessments by the manufacturer to the Board. If the 
Order goes into effect, the payment of assessments will be mandatory. 
The Act and Order provide ``. . . that assessments shall be paid by a 
manufacturer if the manufacturer has manufactured concrete masonry 
products during a period of a least 180 days prior to the date of the 
assessment is to be remitted.'' 15 U.S.C. 8705(a).
    However, the Order is not automatic but rather is subject to a vote 
among the affected industry. The Order will only go into effect if 
approved by a majority of manufacturers that participate in the 
referendum and if they also represent a majority of the machine 
cavities in operation.
    Comment:
    Three commenters suggested exempting Florida from the national 
program and twelve suggested making Florida its own region. Another 
commenter suggested including a sixth region by removing Florida from 
Region 2 and making it its own region. Two commenters suggested simply 
providing an opt-out option for segments of the industry or individual 
manufacturers.
    Similarly, regarding region makeup, one commenter stated ``the 
Order does not explain how funds might be used to support smaller 
districts within a geographic region. For example, Region V includes 
Alaska, California, Colorado, Hawaii, Idaho, Montana, Nevada, Oregon, 
Utah, Washington, and Wyoming. This region spans over 3,000 miles from 
east to west and over 2,000 miles north to south. It is naive to assert 
that the same programs and projects will support the varying needs of 
Hawaii, Alaska, California, and Idaho.'' Another commenter voiced a 
specific concern of ``the unique climate and geographic isolation of 
states'' such as Hawaii and Alaska. And another commenter voiced 
concern that ``while 50% of the money is to go back to the region it 
was collected, I feel it could be difficult to develop programs that 
would benefit the regions as a whole. Individual markets within the 
regions could be vastly different and therefore different programs 
could be needed for each individual market.''
    Response:
    With regard to designating the geographic regions, the Order uses 
the same language as is found in the Act and Florida is within Region 
2. Anticipating the potential need to better reflect the industry needs 
or adapt to changes in manufacturing, the Act and the Order 
specifically provide a method for adjustment of geographic regions. 
While there is no provision to change the number of regions, upon a 
recommendation of the Board, the Secretary may modify the composition 
of the geographic regions described in the Act. So, in the future, the 
composition of the five geographic regions may change based on findings 
and recommendations of the Board. There is no restriction as to when 
the Board can do this. The Department has amended the Order to better 
reflect the freedom of the Board to recommend adjustments to the 
geographic regions established in the Act.
    Although not required in the Act, the order then subdivides the 
five regions into 15 districts. Dividing the regions into districts 
will assist in adequately reflecting the geographic regional diversity 
of the Board and it will allow the Board to more easily manage the 
program, for example use of the district structure will assist in 
making sure allocation of funding is equally dispersed within a region, 
it will allow consideration of programs to be more specialized, it will 
better address the more localized, disparate, and unique 
characteristics found within a given region, and it will enable the 
Board to tailor programs to meet more localized needs. Additionally, 
the district structure is readily adaptable as the Board may at any 
time recommend adjustments to the number, composition, and structure 
within the regions.
    As stated previously, if the industry votes the Order into effect, 
the payment of assessments will be mandatory. Allowing for an opt-out 
option would be counter-productive and defeat the purpose of the Act.

De Minimis Exception

    Comment:
    Seventeen commenters voiced opposition to the consideration of 
including a de minimis exception.
    Response:
    The Department recognizes that some small businesses with minimal 
production in the industry may not have the resources to comply with 
the requirements imposed by the proposed order, and therefore, the 
Department requested comments on whether the Department should consider 
a de minimis exception for these small businesses. A de minimis 
exception would exclude from the order some small businesses with 
minimal production, based on measures of unit production, employment, 
receipts, machine cavities, or other relevant criteria.
    Of particular note, of those commenting on the potential exception, 
eleven stated they were a small business and believed it only fair to 
be included in assessments as they would also reap the benefits of 
research, education, and promotion programs the checkoff program puts 
into effect.
    As previously stated in the section concerning FRFA, after careful 
consideration, not receiving any comments supporting the inclusion of a 
de minimis exception, the Department has decided not to include a de 
minimis exception. The Department leaves open the possibility to 
reconsider the application of a de minimis exception based on 
observations following the execution of the Order, the input of the 
Board, and lessons learned after implementation of the program. Until 
that re-consideration, there is no de minimis exception and all 
manufacturers of concrete masonry units will be subject to the 
assessment should the Order go into effect.

Company Size

    Comment:
    The Department requested comments on the proper determinant for 
company size. Two commenters suggested that production capacity or 
revenue would be a better method to determine if a company is 
categorized as small, medium or large. One commenter mentioned that 
recent trends of automation in concrete block manufacturing have 
resulted in the use of fewer employees while increasing manufacturing 
output. One commenter thought that considering manufacturing capacity 
rather than number of employees is a more practical measure of size.
    Response:
    The Act sets out the criteria to ensure diverse representation of 
the industry in selecting Board members. The Secretary will add these 
criteria into her plan for proper Board composition, the Department 
will follow this plan to help attain a diverse representation of 
members for the Board selection process. One criterion prescribed by 
the Act is that Board members reflect the ``range in size of 
manufacturers in the United States.''
    As previously stated in the section concerning the IRFA, the 
Department used the company size information based on the SBA table of 
company size standards. Like the SBA, the Department used 500 as the 
employee number between small and large. To create a range in size, the 
Department

[[Page 51466]]

broke size down as small, medium, and large. To determine the number 
for each category the Department used Census data (2017 County Business 
Patterns and 2017 Economic Census). The Department used Table 3 to 
ascertain firm size and distinguish between those of ``medium (20-499 
employees)'' and ``small (0-19 employees).'' Although SBA would define 
the latter two categories as small, the Department used Census 
categories and did not refine the size of business beyond that 
reflected in the Census provided data.
    The numbers the Department used provide a satisfactory distribution 
between size of firms based on available Census data--resulting in 
approximately 35% of the firms that are small sized, approximately 40% 
of the firms that are medium-sized, and approximately 25% that are 
large-sized. The Department believes these percentages provide the 
needed balance and diversity of perspective for Board representation 
purposes.
    If the requisite information becomes available, for instance 
through the evaluation and compliance process, to make a more refined 
distinction--whether based on production capacity or further refining 
company size--the Department will consider any such recommendation made 
by the Board.

Funding for Regional Initiatives

    Comment:
    Five commenters spoke on the subject of the assessments received by 
the Board. Commenters stated the proposed Order provides a return of 
50% of assessments to each of the five regions. The allocation of the 
remaining 50% would be decided by the Concrete Masonry Products Board. 
Commenters voiced concern that ``the allocation of these Concrete Board 
held funds will not be fair and equitable and may benefit one or more 
regions at the expense of other regions.'' One commenter thought the 
disbursement of funds ``defective because there were no assurances that 
any funds from our market would work its way back to our state'' One 
commenter was worried the size and geographic distribution of its 
region would preclude it receiving funds stating ``[w{time} e would 
gladly support and vote for the check-off program if we were confident 
that at least some of the funds from this program would be used to 
bolster our individualized market.'' One commenter stated the Order 
does not ``clarify how it proposes to ensure that assessment funds 
would go to support geographic regions and apply equally throughout 
those regions.'' One commenter views Florida concrete masonry unit 
manufacturers as ``contributing much more than the return they will 
ever receive. This is a bad deal for us, period.''
    Response:
    The Order uses the same language as is found in the Act. 
Specifically, the Act stipulates that ``[t]he order shall provide that 
not less than 50 percent of the assessments (less administration 
expenses) paid by a manufacturer shall be used to support research, 
education, and promotion programs and projects in support of the 
geographic region of the manufacturer.'' 15 U.S.C. 8705(f)(1).
    The Act (and the Order) provide fairness by stipulating that at 
least 50 percent of assessments collected from a region be used to 
support that region. The Board will base the return for regional 
initiatives on assessments collected from a given region. Since the 
return directly relates to the assessments collected from a region, it 
will not affect the benefit received by other regions. Assessments 
collected and subsequent regional support remain proportional to the 
collected assessment funds. A region receiving more support than 
another also paid a higher amount and therefore contributes more to the 
national program, for the benefit of all.
    Remember, the 50 percent requirement is a minimum, the Board has 
the authority to provide a higher percentage back to all the regions. 
By allocating at least 50% back to the regions, the order ensures some 
investment will be earmarked to go back to the region while leaving 
enough to fund national research, education, and promotion initiatives.
    The Board will establish procedures for making certain that they 
are returning the appropriate amounts to each region. While the formal 
process of receiving and distributing assessments has not yet been 
established, the Order provides that within 180 days of their initial 
meeting, the Board will provide for review and approval by the 
Secretary a proposed evaluation and compliance program and its plan to 
verify compliance with the Act. The evaluation and compliance program 
will provide the method and metrics to use to help determine program 
effectiveness and will outline the way the Board will receive 
assessments, how to verify compliance, the best method to track sales, 
and how to document all actions.
    The Department has added a stated requirement for the Board to 
include in the evaluation and compliance program the process by which 
the Board will meet statutorily-mandated disbursement of collected 
assessments.
    Comment:
    A commenter voiced the opinion that it would be ``a far more 
efficient expenditure of a business' hard-earned money to let them 
invest 100% of that money in their own regional and local trade 
associations, of which there are many.'' Commenting on the overall 
program and amount coming back to each region, another commenter 
thought ``[t]hat [it] is not a good investment.''
    Response:
    The Department does not make any conclusions on the efficacies of a 
checkoff program or the worthiness of the various choices an 
entrepreneur may have to use its business profits. The Order provides a 
method by which manufacturers may use pooled resources to further 
industrywide initiatives and better coordinate amongst themselves. The 
implementation of this Order relies entirely on an affirmative vote by 
the industry in a referendum. Certainly, a negative vote would provide 
the ability to invest 100% of their money allocated for these types of 
endeavors toward regional and local trade associations. A positive vote 
does not preclude a company from continuing to invest in regional and 
local trade associations but would add to it a program that is national 
and more expansive then those that are regional and local. It is an 
investment decision left entirely to the industry.

Board Composition and Process

    Comment:
    Thirteen commenters expressed a negative view of the Board 
composition. Two commenters wanted to ensure equitable representation 
on the state level. Two commenters shared the view that the number of 
board members per region should be based on other factors such as 
number of CMU producers or sales volume per region. Two commenters 
voiced a concern about a Board member's qualifications to represent the 
industry and one commenter stated there is no guarantee that each 
region will have two representatives.
    Response:
    The Act proposes that the Board composition would consist of not 
fewer than 15 and not more than 25 members and provides the criteria to 
ensure diverse representation of the concrete masonry products industry 
on the Board. To ensure fair and equitable representation of the 
concrete masonry products industry and appropriate representative 
diversity as outlined in the Act, the composition of the Board ``shall 
reflect the geographical distribution of the manufacture of

[[Page 51467]]

concrete masonry products in the United States, the types of concrete 
masonry products manufactured, and the range in size of manufacturers 
in the United States.'' These criteria are the elements the Department 
will use to help create its plan for proper Board composition. The plan 
will assist in discerning a prospective member's qualifications to 
represent the industry. The Secretary's selection emphasis will be on 
attaining the goals for a diverse representation on the Board and will 
use the plan to help achieve these goals.
    The Act stipulates five geographic regions and the States which 
make up each geographic region. The geographic regions found in the 
Order reflect Congressional judgment as to a fair balance and 
geographic distribution of manufacturers in the United States.
    The Secretary will use this plan for proper Board composition 
during selection process to appoint Board members. Once the Order and 
Board are in place, the Act provides for changes in the states that 
make up a given region. Specifically, the Act instructs that the Board 
shall have the power and duty to recommend to the Secretary the 
reapportionment of the Board membership to reflect changes in the 
geographic distribution of the manufacture of concrete masonry 
products, and the types of concrete masonry products manufactured. At a 
minimum the Board must conduct a review of the Board representation 
after three years and at the end of each three-year period thereafter. 
If the Board finds it warranted, the Board will provide to the 
Secretary for review and approval modifications to the geographic 
regions described in the Act and reflected in the proposed Order. See 
15 U.S.C. 8705(f)(3).
    So, while the number of regions will remain static at five, the 
Board has the power and duty to recommend to the Secretary 
modifications to the Geographic regions in the future to reflect the 
geographical distribution of the manufacture of concrete masonry 
products and the types of concrete masonry products manufactured.
    The three-year requirement is a minimum and applies to Board 
membership reflecting the distribution of producers from regions across 
the country--referred in the Act as reapportionment Recommendations to 
adjust the geographic regions has no such minimum and could be done at 
any time at the Board's discretion. The Department has changed the 
Order to make explicit this distinction and additional discussion of 
the Board's authority to modify the composition of geographic regions.
    Comment:
    Two commenters thought that the Board is not representative of the 
industry.
    Response:
    The Act specifically provides the manner in which the Department 
will ensure fair, equitable, and diverse representation of the concrete 
masonry products industry. Specifically, ``the composition of the Board 
shall reflect the geographical distribution of the manufacture of 
concrete masonry products in the United States, the types of concrete 
masonry products manufactured, and the range in size of manufacturers 
in the United States.'' As stated above, the Secretary will use these 
same criteria to form the plan or proper Board composition and then 
follow the plan to help achieve the goal of fair, equitable, and 
diverse Board representation of the concrete masonry products industry.
    Comment:
    On the subject of districts, one commenter thought the Department 
did not provide enough explanation as to why the proposed Order states 
only that the districts will ``allow the Board to more easily manage 
the program.'' The commenter thought this summary justification ``is 
very thin.''
    Response:
    Although not required in the Act, the Order subdivides the five 
geographic regions into 15 districts. As mentioned previously, some 
examples of how district structure will allow the Board to more easily 
manage the program include: Use of the district structure will assist 
in making sure allocation of funding is equally dispersed within a 
region, it will allow consideration of programs to be more specialized 
and better address the more localized, disparate, and unique 
characteristics found within a given region, and it will enable the 
Board to tailor programs to meet more localized needs. Additionally, 
the district structure is readily adaptable as the Board may at any 
time recommend adjustments to the number, composition, and structure 
within the regions. The Department has added further explanation on the 
functional purpose of districts to the Order.
    Comment:
    One commenter felt that with ``States assigned their own district 
by the Proposed Order, it is highly likely that such states will use 
their Board representation to ensure the programs and projects favor 
their state, as they receive the same representation as a district 
consisting of as many as six other states.''
    Response:
    The Act sets out the criteria to ensure diverse representation of 
the industry in selecting Board members. The Department will adopt 
these criteria into the plan for proper Board composition that it will 
use to help during the Board selection process. One of the criteria 
prescribed by the Act is that Board members reflect the ``geographic 
distribution of the manufacture of concrete masonry products in the 
Unites States.'' The Act establishes the geographic regions and the 
plan for proper Board composition will reflect these regions. To help 
ensure equitable regional distribution and for ease of Board management 
of the program, the Order further breaks down the regions into 
districts (see above management discussion regarding districts). But 
keep in mind that, while the Secretary will strive to make appointments 
that include every district, the Secretary's primary focus will be on 
ensuring the regional diversity of Board representatives. District 
representation is a secondary criterion and not a statutorily mandated 
requirement. The Board, as representative of the entire industry, will 
base all its actions on a vote of all Board members, where each Board 
member would be entitled to one vote, and that a motion would carry if 
supported by one vote more than 50 percent of the total votes 
represented by the Board members participating. There is one exception, 
however, as the Act requires that a two-thirds majority of the voting 
members of the Board is required to approve a change in the assessment 
rate.
    Comment:
    One commenter noted that while focusing its attention on geographic 
diversity, the Proposed Order (at Sec.  1500.40(b)(2)) ``would permit 
as much as 13% of the Board to come from a single company. A large 
company might well benefit from this provision and we believe it is 
unjust and detrimental to the industry to permit such 
overrepresentation on the Board.''
    Response:
    While the intent is unknown, the Act limits the maximum to two 
members from any single company or its affiliates that may serve on the 
Board at any one time. A possible reason is to ensure diversity of 
views by not letting a single company dominate the Board. But remember, 
it is a maximum of two and not a requirement of two and the Board can 
consist of a range of between 15 and 25 members.
    As the commenter notes, this particular element reflects limits on 
Board composition and does not fall within the boundaries of the three-

[[Page 51468]]

pronged selection criteria that will be a part of the Department's plan 
to help ensure diversity of representation on the Board. So, if the 
Secretary appoints two members from a single company, that selection 
will automatically exclude from consideration additional candidates 
from that same company.
    The distribution of appointments section of the Act, provides the 
criteria to use to ensure the composition of the Board reflects a 
diverse representation of the concrete masonry products industry. Those 
criteria, and the elements the Department will use to help create its 
plan for proper composition of the Board, are ``geographic distribution 
of the manufacture of concrete masonry products in the United States, 
the types of concrete masonry products manufactured, and the range in 
size of manufacturers in the United States.'' The Secretary's selection 
emphasis will be on attaining the goals for a diverse Board 
representation with the requisite expertise and will use the plan to 
help achieve a Board that is representative of the industry.

Potential Benefits of a Checkoff Program

    Comment:
    One commenter recognized the merit for commercial contractors and 
architectural programs but noted that ``the program provides no real 
value to the Do-It-Yourself consumer.''
    Response:
    The stated purpose of the Act and the Order is to strengthen the 
position of the concrete masonry products industry in the domestic 
marketplace; maintain, develop, and expand markets and uses for 
concrete masonry products in the domestic marketplace; and promote the 
use of concrete masonry products in construction and building.
    The checkoff program facilitates industry-wide activity. 
Coordinated activity enables producers to leverage economies of scale 
in conducting research, education, and promotion of the industry and 
support the demand for concrete masonry products nationally. Oversight 
by the Secretary of Commerce would ensure that Board actions comply 
with the intended purposes of the Act and that concrete product 
manufacturers share in program expenses as specified in the Act.
    The assessments pay for programs that are intended to yield direct 
benefits to concrete product manufacturers in the form of new markets 
and increased consumer demand. Costs are expected to result in benefits 
to businesses that are at least commensurate with these costs. 
Additionally, research, education, and promotion programs could provide 
benefit to the general consumer and Do-It-Yourselfer with additional 
information in which to make an informed decision with regard to 
building materials.

Escrow Account

    Comment:
    The Proposed Order requires that 27% of assessments must be held in 
escrow for the first ten years after implementation. Fifteen commenters 
were opposed to this requirement and frequently cited to this as an 
example of government overreach. One commenter pointed to the apparent 
``unfair'' treatment when compared to other checkoff programs. And 
another commenter thought the limitation on the Board'' ``to spending 
not more than 73% of income and that is before expenses. That is not a 
good investment.'' Another commenter remarked that they did not find a 
single other checkoff program that levies this requirement on 
assessments in this manner.
    Response:
    The commenters are correct; thus far the requirement to establish 
an escrow account of this magnitude only exists in this Act. The Order 
uses the same language as is found in the Act, specifically the Board 
may not obligate an amount greater than 73 percent of that collected in 
fiscal years 1-8 and 62 percent of that collected in fiscal years 9 and 
10.
    The Department has been very diligent in following the Act and does 
so here. However, as a way or explanation for the apparent uniqueness 
of this section appearing in this Act, the Department offers the 
following. At the recommendation of the Congressional Budget Office 
(CBO), Congress included this section to remain compliant with the 
statutory Pay-As-You-Go Act of 2010 (See 2 U.S.C. 931). The Department 
published with the Order supporting documents on Regs.gov (see https://www.regulations.gov/document?D=DOC-2020-0002-0004). The Department 
included as a supporting document, the CBO report in its entirety. All 
programs going into effect after 2010 are subject to compliance with 
the Pay-As-You-Go Act of 2010. Therefore, the Concrete Masonry Products 
Research, Education, and Promotion Act of 2018 would be subject to the 
Pay-As-You-Go Act. By way of a counter example, all current 
agricultural checkoff programs are under a statute that predates the 
Pay-As-You-Go Act. The Pay-As-You Go Act establishes budget-reporting 
and enforcement procedures for statutes affecting direct spending or 
revenues of the Federal government. The Concrete Masonry Products 
Research, Education, and Promotion actualizes these requirements using 
an escrow account as outlined in 15 U.S.C. 8715, Limitations on 
obligation of funds.
    The Act defines the covered period for the limitations as that 
period that begins on October 5, 2018, and ends on the last day of the 
11th fiscal year that begins on or after such date (i.e., end of fiscal 
year 2029 or September 30, 2030). After the covered period, the Board 
may withdraw and obligate in any fiscal year an amount in the escrow 
account that does not exceed \1/5\ of the amount in the escrow account 
on the last day of the covered period. The Department has revised the 
Order to better reflect the 62 percent limitation in fiscal years 9 and 
10 and the final 11th year that ends September 30, 2030, as stipulated 
in the Act.

Government Authority To Implement a Checkoff Program

    Comment:
    Four commenters thought the proposed Order was too vague in 
defining the limits of government authority and fourteen commenters 
believe the Order was an example of Government intrusion. The comments 
expressed a concern that the proposed Order provides more government 
oversight, more overhead, unchecked authority to intrude and scrutinize 
company operations, another government entity involved in a privately-
owned producer's daily operation, and of just another chance for the 
government to get their hands on more of our hard-earned dollars. One 
commenter summarized the view--``when was the last time we have looked 
at a government program and thought that is how I would want my 
business to be run. These programs usually start out with the best of 
intentions and then spiral out of control.'' Another commenter thought 
there should be a vote after a one or two years to determine whether to 
continue the program.
    Response:
    The Act and Order confine the Secretary's authority to the subject 
matter of the Act, specifically 15 U.S.C 8701-8717. The Secretary does 
not exercise any authority or control outside the bounds of the Act.
    The Board, the composition of which is representative of the 
industry, will administer the order and receive assessments. It is the 
Board that carries out the programs and projects of research, 
education, and pays the costs of such programs and projects. The 
Department does not have access to the

[[Page 51469]]

program funds and the exercise of its authority is limited to ensuring 
the Board and industry properly carry out the provisions of the Act and 
Order.
    The Department's role with respect to individual companies is in 
the form of as-needed evaluation and compliance. Evaluation, as noted 
by several commenters, will help ascertain the effectiveness of the 
program. The Act requires several studies and reports on the subject of 
program effectiveness. These reports (at proscribed intervals of 
annual, biennial, three-year, and five-year) will be available for 
public review and will provide several opportunities for those affected 
by the program to discern whether the proposed benefits have met 
expectations. With regard to compliance, the mandatory nature of the 
Act requires the Department to enforce the payment of assessments as 
prescribed by the Order and carried out by the Board.
    Additionally, the Act and Order provide a mechanism to conduct a 
``sunset'' referendum at five-year intervals to determine whether to 
continue the program. These potential ``sunset'' referenda are 
triggered at the request of at least 25 percent of the affected 
industry (those eligible to vote).
    Comment:
    One commenter thought the Order calls for what seems to be an 
intrusion into the affairs of private business. Another commenter 
voiced concern that the ``Order allows for the audit and inspection of 
the financial records of manufacturers. It also requires that these 
records be retained for at least 7 years.'' Another commenter thought 
it would impact competitive bidding from vendors. Another commenter was 
concerned there were no assurances of 3rd party auditing of a company's 
books
    Response:
    To provide the Secretary with needed authority to ensure compliance 
with the Order, the Act provides the Secretary the authority to require 
manufacturers to retain sufficient records to ensure compliance with 
the order and authorizes the Secretary to inspect those records the Act 
requires companies to maintain. Without this authority, the Secretary 
would have no ability to enforce the requirements of the Act and its 
Order. The requirement to retain records and allow for the Secretary to 
inspect such records does not equate to making a company's financial 
records available for public scrutiny and does not create the 
opportunity for vendors to use the information to its benefit in 
bidding. The seven-year requirement found in the order reflects the 
generally-recommended retention time for business records. Lastly, the 
Act requires all manufacturers covered by the order to make records 
available for inspection, that inspection will only be by an agent or 
employee of the Board or Department and not a third party.

Program Evaluation

    Comment:
    Three commenters voiced a concern that the Order lacked adequate 
measures of success or effectiveness.
    Response:
    Evaluation and effectiveness are very important to the Department 
and reviewing this order to make sure it achieves the Act's purpose is 
foremost. Within 180 days of the first Board meeting, the Secretary 
requires the Board to provide for approval an evaluation and compliance 
program that the Board will follow. This program will include the 
method and metrics the Board will use to help determine program 
effectiveness. Further, the Department has added a section to the Order 
that requires the Board to establish annual research, education, and 
promotion objectives and performance metrics for each fiscal year 
subject to approval by the Secretary. This same requirement appears in 
the Act at 15 U.S.C. 8704(i). Objectives and performance metrics should 
consider and reflect those listed in 15 U.S.C. 8716. The Board will 
make all objectives and metrics available for public review.
    In addition to these added requirements, there are several reports 
that will study the success and effectiveness of this checkoff program. 
The Act requires the Secretary to prepare a study and submit to 
Congress a report examining the appropriateness and effectiveness of 
applying the commodity checkoff program model to a nonagricultural 
industry, taking into account the program established by this chapter 
and any other checkoff program involving a nonagricultural industry 
(see 18 U.S.C 8717).
    Further, the Secretary requires the Board to fund an independent 
evaluation of the effectiveness of the Order and other programs 
conducted by the Board after five years and every three years 
thereafter.
    Lastly, the Order requires the Board to prepare and make publicly 
available comprehensive and detailed reports that identify and describe 
all programs and projects undertaken by the Board during the previous 
two years, those planned in the subsequent two years, and detail the 
allocation of Board resources for each such program or project.
    To ensure full transparency of Board operations, reports also will 
include the overall financial condition of the Board, a summary of the 
amounts obligated or expended during the two preceding fiscal years, 
and a description of the extent to which the objectives of the Board 
were met according to the established annual objectives and performance 
metrics. The table below provides a quick overview of the reports the 
Board and Department will produce to ensure transparency of the 
checkoff program and its operations.

[[Page 51470]]

[GRAPHIC] [TIFF OMITTED] TR15SE21.006

Purpose of the Order

    Comment:
    The Act sets the initial assessment rate at one cent per concrete 
masonry unit sold. Three commenters stated concrete masonry product 
manufacturers not subject to the assessment should not be eligible to 
become Concrete Board Members ``as a matter of fairness'' and ``to 
ensure that assessment funds are appropriately spent for the benefit of 
those manufacturers that are assessed,'' i.e., the Board should not 
include manufacturers that do not pay assessments. Ten commenters 
suggested more broadly that the Department change the language 
throughout the Order to reference concrete masonry units rather than 
concrete masonry products for similar reasons.
    Response:
    The Act is clear that Board membership is not to be limited to 
concrete masonry unit manufacturers (i.e., those subject to the 
assessment). Specifically, the Act provides that ``'[t]he Board shall 
consist of manufacturers,'' 15 U.S.C. 8704(b)(1)(B)(iii); 
``manufacturers'' is defined as ``any person engaged in the 
manufacturing of commercial concrete masonry products in the United 
States.'' 15 U.S.C. 8702(12). The Act further provides that ``[t]o 
ensure fair and equitable representation of the concrete masonry 
products industry, the composition of the Board shall reflect the 
geographical distribution of the manufacture of concrete masonry 
products in the United States, the types of concrete masonry products 
manufactured, and the range in size of manufacturers in the United 
States.'' 15 U.S.C. 8704(b)(2)(A) (emphasis added). Thus, the Act is 
unambiguous that all concrete masonry manufacturers are eligible for 
Board membership and not just concrete masonry unit manufacturers, and 
the Order reflects that statutory directive.
    Beyond the specific statutory language with respect to Board 
eligibility, it is also clear that the overall goal of the Act is to 
promote and enhance the concrete masonry products industry as a whole, 
rather than simply one segment of it. Thus, while the assessment is 
levied against concrete masonry units sold (see 15 U.S.C. 8705(c)(1)), 
the purpose articulated in the Act itself is ``to authorize the 
establishment of an orderly program for developing, financing, and 
carrying out an effective, continuous, and coordinated program of 
research education, and promotion, including funds for marketing and 
market research activities, that is designed to--
    (1) Strengthen the position of the concrete masonry products 
industry in the domestic marketplace;
    (2) Maintain, develop, and expand markets and uses for concrete 
masonry products in the domestic marketplace; and
    (3) Promote the use of concrete masonry products in construction 
and building.''

15 U.S.C. 8701(a) (emphasis added). The references in the Order to the 
broader set of concrete masonry products rather than to the subset of 
concrete masonry units reflects the purposes set out in the Act.

Company Ownership

    Comment:
    Two commenters stated an objection that the Proposed Order does not 
require U.S. company ownership to participate in the referendum and 
therefore allows foreign-owned businesses to participate.
    Response:
    The Act only applies to manufacturers engaged in the manufacturing 
of commercial concrete masonry products in the United States. All 
manufactures of concrete masonry products that physically manufacture 
in the United States are subject to the Act and those that manufacture 
concrete masonry units are subject to the assessment. The Act does not 
require U.S. ownership to be subject to the Act, nor does foreign 
ownership affect eligibility to participate in the referendum.

Secretarial Appointments to the Board

    Comment:
    One commenter stated the proposed Order's authorization of 
independent Secretarial appointments violates the statute. Another 
commenter voiced a concern that ``a Secretary might use political 
favoritism in selecting Board members and leaves the industry dependent 
upon the Secretary not to act in the Secretary's own interest.'' One 
commenter suggested the Board's dismissal process violates the statute. 
Two commenters voiced concern that ``the Board serves at the pleasure 
of the Secretary.'' One commenter thought the proposed Order 
authorizing independent Secretarial appointments violates the statute 
because the commenter thought ``the statute requires

[[Page 51471]]

that the Secretary only make appointments from nominations by 
manufacturers.''
    Response:
    The Act provides that the Secretary shall appoint Board members and 
leaves to the Secretary the manner in which the Secretary will 
establish an adequate pool of candidates. As an appointment, the 
Secretary must have sufficient latitude to select individuals of her 
choosing and not unduly be limited in her discretion in appointing the 
members of the Board. While it does not appear in the Act itself, when 
the President signed the legislation the President issued a statement, 
concurrent with the Act that provided:

. . . . the Act requires the Secretary of Commerce to appoint the 
members of the Concrete Masonry Products Board (Board), who would be 
inferior officers, from a list of nominees submitted by concrete 
masonry product manufacturers. It also provides that, if the 
Secretary fails to appoint someone from that list within a specified 
period, `the first nominee for such appointment shall be deemed 
appointed' The Secretary's failure to make a timely appointment from 
the list will result in the appointment of an inferior officer by a 
private party, which would violate the Appointments Clause. 
Furthermore, the requirement to appoint from a list of nominees, if 
the list is too limited, may unduly limit the Secretary's 
constitutional discretion in appointing the members of the Board. In 
those circumstances, my Administration will treat these requirements 
as advisory and non-binding.

    Therefore, in keeping with the President's signing statement, to 
the extent selection criteria limits the Secretary's noted discretion 
in making appointments, the Secretary will treat this limitation as 
advisory in nature. Hence, the Department will not include in the Order 
those provisions of the Act that are inconsistent with the Presidential 
signing statement including those related to ``deemed'' appointment of 
members and those that may unduly limit the Secretary's discretion in 
making appointments. The Order as written reflects the Secretary's 
discretion in making appointments.
    To more closely align with the Act, the Department has added 
language to Sec.  1500.41(c) of the final Order to make explicit the 
nomination process to fill members whose terms expire and to fill 
naturally occurring vacancies. Additionally, the Department will change 
the language in Sec.  1500.44(a) of the final Order to better match 
that found in the Act and make clear ``that if a member or alternate of 
the Board who was appointed as a manufacturer ceases to qualify as a 
manufacturer, such member or alternate shall be disqualified from 
serving on the Board.'' Even in the case where a member ceases to 
qualify as a manufacturer, the power to remove the appointed Board 
member and fill the vacancy remains with the Secretary.
    The Board does not have independent authority to remove one of its 
members. While the Board may make recommendations, the Secretary alone 
has the authority to remove a Board member. As an appointment all 
members serve at the pleasure of the Secretary and therefore the 
Secretary retains the prerogative to remove any Board member. Some 
examples of possible dismissal action include the Secretary making a 
determination that a member's continued service would be to the 
detriment of fulfilling the purpose of the Order, which could include a 
member's failure or refusal to perform his or her duties properly or 
for engaging in acts of dishonesty or willful misconduct.
    To reiterate, the Department is following the President's guidance 
and treating those requirements that may unduly limit the Secretary's 
discretion in making appointments as advisory in nature and not 
binding.
    Finally, the Act provides that the Secretary may make appointments 
from nominations by manufacturers. As an inclusive but not exclusive 
clause, the Order aligns with this language and provides that the 
Secretary will consider nominations submitted and other manufacturers 
for appointment, as the Secretary may deem appropriate and will give 
consideration to recommendations of the Board, self-nominees, and more 
expansive input from sources available to the Secretary.
    Comment:
    One commenter thought that the proposed Order violates the 
Appointments Clause, as noted by the President in his signing 
statement. One commenter thought ``the Department simply disregards the 
provisions in the Act that the President has deemed unconstitutional. 
However, neither the President nor the Secretary has such authority. If 
the President believes a law is unconstitutional, he can veto the law 
rather than sign it. However, it is the federal courts (and ultimately 
the United States Supreme Court), not the President, that are the 
arbiters of whether a law is constitutional. Therefore, the Secretary' 
s reworking of the statute in the Proposed Order is simply illegal, and 
subject to reversal.''
    Response:
    As mentioned previously with regard to the Appointments Clause of 
the Constitution, the President stated that ``. . . in those 
circumstances, my Administration will treat these requirements as 
advisory and non-binding.'' The Order as proposed, adheres to the 
President's statement. Therefore, in keeping with and as directed by 
the President's signing statement, to the extent selection criteria 
limits the Secretary's noted discretion in making appointments, the 
Secretary will treat this limitation as advisory in nature.
    Comment:
    One commenter thought the proposed Order violates the statute.
    Response:
    With the exception of those elements that fall within purview of 
the President's Statement and are therefore advisory in nature, the 
Order fully adheres to the Act.

Scope of the Act

    Comment:
    One commenter felt the limitation of personal liability of Board 
Members is not authorized by the statute.
    Response:
    The Secretary appoints members to the Board and under the 
Appointments Clause, the members of the Concrete Masonry Products Board 
(Board) would be inferior officers. As officers they cannot be held 
personally liable when they exercise their discretionary duties of 
their office, in good faith, while acting within the scope of their 
authority. The Department has edited the language of Sec.  1500.85 to 
better reflect the limitation on personal liability.
    Comment:
    One commenter stated the authorization of research, education and 
promotion exceeds the authority of the statute.
    Response:
    Whenever possible the order closely adheres to the language found 
in the statute. The title of the Act is the Concrete Masonry Products, 
Research, Education, and Promotion Act of 2018.
    The Act's purpose is to authorize the establishment of an orderly 
program for developing, financing, and carrying out an effective, 
continuous, and coordinated program of research, education, and 
promotion, including funds for marketing and market research 
activities, that is designed to--

    (1) strengthen the position of the concrete masonry products 
industry in the domestic marketplace;
    (2) maintain, develop, and expand markets and uses for concrete 
masonry products in the domestic marketplace; and
    (3) promote the use of concrete masonry products in construction 
and building.

    In its review and writing of the Order, the Department was diligent 
and

[[Page 51472]]

strident in its efforts to adhere to the stated purpose of the Act. The 
Department used this stated purpose to guide its decisions with regard 
to the Order, to remain within the authority granted by the Act, and to 
ensure close compliance with the Act.
    Comment:
    One commenter thought the proposed Order omits the statute's 
requirement of an independent auditor.
    Response:
    The Order stipulates in paragraph (p) of Sec.  1500.47, Powers and 
Duties that the Board will cause its books to be audited by a certified 
public accountant. The Department has added language to make explicit 
the requirement for the Board, at the end of each fiscal year, to have 
the books and record of the Board audited by an independent auditor and 
submit to the Secretary a report of the audit.
    Comment:
    One commenter thought that the proposed Order exceeds authority 
granted by the statute with regard to complaints of violations. 
Specifically, ``statute only gives the Board the responsibility to 
gather facts surrounding a complaint and to report any complaints of 
violations to the Secretary. The determination as to whether 
enforcement of the law is warranted is laid squarely at the feet of the 
Secretary, not the Board. To do otherwise [as the commenter interprets 
the proposed Order] would be to create stark conflicts of interest in 
which Board members may be evaluating complaints against their own 
industry competitors.''
    Response:
    The power and authority to investigate resides with the Secretary. 
Specifically, as set forth in the Act, ``[t]he Secretary may conduct 
such investigations as the Secretary considers necessary for the 
effective administration of this chapter, or to determine whether any 
person has engaged or is engaging in any act that constitutes a 
violation of this chapter or any order or regulation issued under this 
chapter.'' (15 U.S.C. 8709(a)).
    The Order uses language that makes explicit the limitations on the 
powers the Board has regarding complaints of violations. The Department 
concurs with the commenter that the Board's powers and duties with 
regards to complaints is to receive the complaint, gather facts 
surrounding a complaint, and report any complaints of violation the 
Secretary. The Order's use of the terms receive, evaluate, and report 
only was meant to convey just the powers and duties the commenter 
mentions. Use of the word evaluate was not meant to expand the Board's 
authority. The Department has replaced the word ``evaluate'' with the 
word ``investigate'' as the commenter suggests.

Program Budget

    Comment:
    One commenter stated ``the [p]roposed Order allows the Board to 
obfuscate its precise expenditures.''
    Response:
    The Department believes the Order accurately reflects the Act and 
levies the statutorily mandated requirements for the Board to report on 
all of its expenditures (for a list see the table of reports that 
provide transparency in the response to comment under the heading of 
Program Evaluation). Specifically, the Board is to periodically prepare 
and make available to the public and manufacturers reports of its 
activities and, at least once each fiscal period, to make public an 
accounting of funds received and expended. Further, the Order requires 
a) at the end of each fiscal year and at such other times as the 
Secretary may request, the conduct of an audit by an independent 
auditor and submission of a report of the audit directly to the 
Secretary. Additionally, the Order requires that the Board, every two 
years, shall prepare and make publicly available a comprehensive and 
detailed report that includes an identification and description of all 
programs and projects undertaken by the Board during the previous two 
years as well as those planned for the subsequent two years and detail 
the allocation or planned allocation of Board resources for each such 
program or project. Such report shall also include:
    (1) The overall financial condition of the Board;
    (2) A summary of the amounts obligated or expended during the two 
preceding fiscal years; and
    (3) A description of the extent to which the objectives of the 
Board were met according to the metrics required under Sec.  
1500.50(a)(1).
    Comment:
    One commenter thought the Order gives the Board too much 
independent power over its budget and expenses. The commenter stated 
that ``the proposed Order treats the shifting of 10% of funds in a 
category to another category as de minimis. But 10% is far too high to 
be considered de minimis. In fact, in almost all contexts it is not 
only too large to be de minimis, it is considered material. This shift 
in funds merits consideration--the fact the proposed Order seeks to 
claim 10% as de minimis again demonstrates a consistent effort 
throughout the proposed Order to reduce the Board's accountability when 
it comes to properly managing its budget. Moreover, not only is this 
amount not de minimis, it subverts the Secretary's statutory authority 
to set the budget for the Board.''
    Response:
    The Department did not intend the use of the term ``de minimis'' to 
make a characterization or judgment as to the amount of money but 
rather was using the term in connection with the allowance of the Board 
to have some flexibility in managing its business operations. Simply 
meant as a good business practice, the Department is allowing the Board 
to make unanticipated adjustments to its approved annual programs. The 
ten percent provides the flexibility to allow the Board to make an 
adjustment between two approved categories, but the adjustment is 
specific to an annual budget, is confined to the current fiscal year, 
and is measured against the two approved categories being adjusted, 
i.e., it is not 10% of the total amount of all assessments received. 
Subsequent budgets would require adjustment and approval before the 
Board implements it beyond a given year. Therefore, an adjustment does 
not carry over from year-to-year but would require approval the next 
time the Board submits an annual budget for approval. The Department 
has removed from the Order the ``de minimis'' characterization of this 
allowed funding shift.

Language of the Act and the Order

    Comment:
    With regards to program budget, one commenter points out two 
apparent discrepancies in the language of the Order with that of the 
Act. In the Order the clause describing the Board's submission of its 
annual budget did not include the clause ``the probable cost of each 
promotion, research, and information activity proposed to be developed 
or carried out by the Board.'' Further the commenter points out in the 
section outlining requirements of contracts the Order's use of the 
phrase ``estimate the cost'' while the Act uses the phrase ``specify 
the cost.''
    Response:
    First, the Department expects an annual budget submission to be of 
sufficient detail for the Department to evaluate all promotion, 
research, and education activities of the Board for an upcoming year. 
By its definition, an annual budget would include cost estimates to 
perform each activity. Second, the Department considers use of the 
phrase ``estimate the cost'' vice ``specify the cost'' as being more 
synonymous vice a notable distinction.
    While the Department does not necessarily agree with the 
commenter's

[[Page 51473]]

conclusions that these omissions would ``reduce accountability and 
responsibility by the Board for the program,'' the Department agrees 
that, whenever possible, the Order will use the language of the Act. To 
maintain its close adherence to the Act, the Department has added to 
the final Order the missing clause and use the word ``specify'' versus 
``estimate.''
    Comment:
    In the section describing the powers and duties of the Board, one 
commenter noted two discrepancies between the language used in the Act 
when compared to that used in the Order. The first is the missing word 
``generic'' in the Order under the powers and duties of the Board. The 
Act provides a power and duty of the Board to ``carry out a program of 
generic promotion, research, and education regarding concrete masonry 
products.'' Yet the Order does not include the term ``generic.'' The 
commenter thought removing the term ``generic'' allows Board members to 
influence Board projects or programs to favor specific geographic areas 
or concrete masonry unit manufacturers within a region. This would 
undermine the spirit and purpose of the proposed Order, which purports 
to benefit the industry as a whole. The Second is the missing word 
``products'' in the order also under the powers and duties of the 
Board. ``The Act provides in the contracts and agreement section the 
Board may enter into contracts or agreements `to carry out generic 
research, education, and promotion programs and projects relating to 
concrete masonry products . . .' Again, the language of the proposed 
Order drops a key word from the statute enacted by Congress and signed 
into law by the President. This time, the term it drops is `products.' 
The Board is only authorized to enter into these agreements for 
purposes that relate to concrete masonry products, not concrete masonry 
generally.''
    Response:
    The Department acknowledges the omission of these words and this 
final rule reflects the correction to the referenced sections to 
include these terms. The Department has added the words ``generic'' and 
``products'' in their respective places in the final Order.
    Comment:
    One commenter pointed out an apparent drafting error explaining 
that Sec.  1500.60(e)(3) makes reference to a non-existing section. 
Equally important, the commenter points out that the order does not 
include in its annual budget (found in Sec.  1500.50), a requirement to 
discuss whether previous objectives were met.
    Response:
    The Department thanks all commenters for their diligent reading of 
the Order. Keep in mind the requirements listed for the annual budget 
in Sec.  1500.50 are minimum requirements for the annual budget. The 
Secretary has the discretion to levy additional requirements for the 
Board to include in its annual budget and the Board as well, at its 
discretion can include additional information in its annual budget 
submission. The Department has fixed the noted drafting discrepancy and 
has included as another minimum requirement that the Board include in 
its annual budget a comparative analysis to the preceding year's 
programs, plans, and projects.

Board Membership

    Comment:
    One commenter asked ``what a reasonable amount of time'' would be 
for the Secretary to appoint a Board, could it be one or two years. And 
would assessments commence prior to a Board being in place.
    Response:
    Although the Act is silent as to how long the Secretary has to 
appoint initial Board members, if the referendum is successful the 
Department anticipates issuing a call for nominations when it publishes 
the final results of the referendum. Barring a recission, the effective 
date of the Order will be November 30. The length of time to review and 
select from a qualified pool of candidates would be measured in months 
vice years.
    The Board will set the date of the receipt of assessments. The 
Board has the latitude but not the requirement to make assessments 
``retroactive'' to the effective date of the Order. The Board is made 
up of representatives of the industry; their vote on when to begin 
receipt of assessments will equally be imposed upon the Board members 
as well.

Assessments

    Comment:
    One commenter thought the proposed Order ``creates a retroactive 
tax.'' Several commenters referenced that the Department is ``levying a 
tax.'' Another commenter stated, ``it is essentially another tax on the 
products that we produce will ultimately result in the end user having 
to pay more for a product than they otherwise would in today's 
market.''
    Response:
    There is no authority for the Department to enact a tax in either 
the Act or the Order. The Act sets out the assessment rate and that the 
assessment rate shall be $.01 per concrete masonry unit sold The Board 
will collect an assessment which the Act stipulates the Board must use 
to establish an orderly program for developing, financing, and carrying 
out an effective, continuous, and coordinated program of research, 
education, and promotion, including funds for marketing and market 
research activities, that is designed to--

    (1) strengthen the position of the concrete masonry products 
industry in the domestic marketplace;
    (2) maintain, develop, and expand markets and uses for concrete 
masonry products in the domestic marketplace; and
    (3) promote the use of concrete masonry products in construction 
and building.

    Whether or not a manufacturer chooses to pass along to customers 
the assessment paid is a business decision and not a government 
requirement.
    Comment:
    One commenter believed the Proposed Order exceeds the debt 
collection authority in the statute.
    Response:
    The Act establishes an assessment upon a manufacturer if the 
manufacturer has manufactured concrete masonry products during a period 
of at least 180 days prior to the date the manufacturer must remit the 
assessment to the Board. Further, the Act authorizes the Secretary to 
set the rate of and levy both a late payment as well as an interest 
charge on manufacturers that fail to timely remit their quarterly 
assessment. Since the authority would be without force if the Secretary 
could not otherwise enforce the assessment payment, the Secretary has 
the same remedies available to the Executive Branch. In fact, 15 U.S.C. 
8708 (d) provides for additional remedies available to the Secretary. 
It specifically does not preclude the Secretary from availing of other 
remedies as appropriate for enforcing collection, to include to actions 
under Federal debt collection procedures.
    Comment:
    One commenter thought the proposed Order exceeded the statutory 
authority by permitting others to collect assessments.
    Response:
    The Act gives the Secretary broad discretion on the process of 
collecting assessments. The Act states that assessments required under 
the Order shall be remitted by the manufacturer to the Board in the 
manner prescribed by the Order and the Order shall provide that 
assessments required under the Order shall be remitted to the Board not 
less frequently than quarterly. While the formal process of receiving 
assessments has not yet been established the Order

[[Page 51474]]

provides the requirement to propose an evaluation and compliance 
program. The evaluation and compliance program will include the manner 
in which the Board will receive assessments. The Board has the latitude 
to recommend to the Secretary an entity that will receive assessments 
on behalf of the Board.
    Comment:
    Four commenters requested clarification on the assessment rate of 
$.01 per concrete masonry unit sold. One commenter sought clarification 
on whether ``the period of applicability applied to when the first sale 
occurs and the assessment is paid, or if the period of applicability 
extends until the final sale when the end customer purchases a CMU. If 
it is the la[t]ter, it is possible that a CMU manufacturer could 
purchase a load of CMUs from another manufacturer, paying the 
assessment.'' Another commenter wanted to know if the provision that 
outlines that the ``first'' sale of a CMU is assessed, ``includes those 
CMU's sold amongst producers. Separating these sales will be 
administratively challenging. Required by the Act, manufacture[r]s are 
to identify the total amount due in assessments on ALL sales receipts, 
invoices, or other commercial documents of sale as a result of the sale 
of concrete masonry units. This can be problematic on certain projects 
or with certain customers that do not recognize fees in their payables 
systems and all costs are to be rolled up in the unit pricing. This has 
the potential to have the exact opposite effect and drive potential 
consumers of our products to other types of building materials that may 
be more affordable.'' Another commenter stated there will only be an 
assessment on the first sale of concrete masonry units. ``This seems 
counterintuitive to most taxes or assessments. Many times sales taxes 
are not collected on items bought for resale purposes, meaning that tax 
is collected on the final sale. It is common for CMU manufacturers to 
sell products to one another which are then sold in a final sale to the 
end customer.''
    Response:
    The Act sets the initial rate as the assessment rate on concrete 
masonry products shall be $.01 per concrete masonry unit sold. The 
Order provides further guidance that manufacturers will base and record 
the assessment only on the first sale of a concrete masonry unit and 
specifically precludes subsequent sales of the already assessed 
concrete masonry unit. Therefore, there will only be a single 
assessment, paid once, for each concrete masonry unit at its initial 
sale. The manufacturer of the concrete masonry unit pays the assessment 
for each block sold. The record of this initial sale is the one the 
Order requires. The Order requires the Board, within 180 days of their 
initial meeting, to provide a proposed evaluation and compliance 
program for review and approval by the Secretary. The Department 
expects this evaluation and compliance program will reflect the 
business operations of the industry, will fully explain the procedures 
of assessment payment, and the specific documentation manufacturers 
will need to meet recording requirements.
    Comment:
    One commenter stated the assessment, as written, would be levied 
against paver and retaining wall block manufacturers, who do not have 
the opportunity to weigh in on the assessment through the voting 
process. Another comment mentions the Order's definitions of ``concrete 
masonry products'' and ``concrete masonry units'' do not clearly 
delineate the differences between concrete masonry units and concrete 
masonry products generally. ``It is critically important that concrete 
masonry units be clearly defined, as this definition determines how 
manufacturers will be taxed and whether they will have a vote in the 
initial referendum.'' And, as previously mentioned one commenter felt 
the list was too expansive as to the definition of ``what is a 
`concrete masonry unit' well beyond the concrete gray block to include 
a vast list of concrete masonry products. Extending the assessment to 
an expanded definition of `concrete masonry unit' to include specialty 
products works a hardship on concrete masonry products manufacturers 
that will not see any benefits from a group commodity marketing program 
for the specialty, value added, products they have individually 
developed and marketed at their own expense.'' And one comment took 
exception to listing products ``other than gray block.''
    Response:
    Manufacturers of concrete masonry products will collect assessments 
based on the number of concrete masonry units sold. The manufacturers 
will then remit the collected assessments to the Board. Concrete 
masonry unit means a concrete masonry product that is a manmade masonry 
unit having an actual width of 3 inches or greater and manufactured 
from dry-cast concrete using a block machine. Such term includes 
concrete block and related concrete units used in masonry applications. 
While they are concrete masonry products, hardscape products such as 
pavers and segmental retaining wall units are not concrete masonry 
units and therefore are not subject to assessment under this Order.
    The definition of concrete masonry unit specifically includes items 
in addition to gray block. The list reflects those concrete masonry 
products that fall within the definition of concrete masonry unit--a 
concrete masonry product that is manmade masonry unit have an actual 
width of 3 inches or greater and manufactured from dry-cast using a 
block machine. Such term includes concrete block and related concrete 
units used in masonry applications. As there were no other comments in 
opposition to the listing, the Department will use this list to 
identify those products that qualify as a concrete masonry unit. See 
the previous section whose heading is ``Industry Background'' for a 
listing of examples that qualify as concrete masonry units.
    Comment:
    One commenter stated the ``$0.05 per unit seems excessive and sees 
no provision requiring any increases be approved by those funding the 
project. As written, the Board can do it alone. That is five times what 
is promoted by those in favor of this order.'' Another commenter asked 
to change the rules for assessment increases and ``cap it at a lower 
number because pennies matter and ramping it up would be economically 
damaging.'' Another commenter felt the Board will be ``pressured to 
increase assessments in order to make up for the escrow requirement.'' 
Another commenter felt any change in assessment rate only should be 
with ``a majority vote of qualified and registered manufacturers, the 
same as needed to put the order in place, vice a two-thirds majority of 
the Board members.'' Another commenter suggested ``it would be prudent 
to set an initial moratorium on assessment changes for the first five 
years of the program to better understand the impact of the programs, 
grants, etc. as a way to avoid a rapid and early assessment increase.''
    Response:
    The Act and the Order leave to the Board, which represents the 
interests of the industry, the discretion to make a decision on an 
appropriate rate within the parameters established in the Act. The Act 
establishes the initial rate of assessment, provides the authority to 
change the assessment rate, limits the number to one per year and 
amount of increase or decrease to one cent per year, and sets $.05 as a 
maximum allowable assessment rate. The Order reflects these same 
criteria. The initial assessment rate on concrete masonry products is 
$.01 per concrete masonry unit sold.

[[Page 51475]]

    As representatives of the industry, the Board members have the 
collective authority to change the assessment rate if voted by a two-
thirds majority of voting members. The rationale for increasing or 
decreasing this value is at the discretion of the Board, and while the 
Act does place restrictions on the amount an assessment changes, it 
does not restrict the manner in which the Board makes this 
determination.
    The Act only places a cap on the number and amount of assessment 
increases or decreases, it does not preclude the Board from deciding 
whether to self-impose a limit to the number of increases or a freeze 
for a duration of time, but any such self-imposed limitation still 
would be subject to overrule if done so by a two-thirds majority. 
Lastly, the language found in the Order aligns directly with that in 
the Act and does not provide the Department with the authority to make 
changes to the Order as suggested by some of the commenters.

Other Checkoff Programs

    Comment:
    Three commenters stated a concrete masonry products checkoff 
program would be at a disadvantage when compared to other checkoff 
programs, specifically noting the prohibition on engaging in any 
promotion, research, or education that would be disparaging to other 
construction materials as well as a much lower or no escrow account. 
One commenter thought this clause ``could be used to limit or deny the 
ability to point out the advantages of masonry over other materials. 
This is a completely unacceptable limitation. How do you plan to 
protect our right to point out facts of masonry that make it a 
superior, safer building material than wood in many if not most 
applications?'' Another commenter characterized the apparent 
disadvantage as ``a unilateral disarmament of our industry that allows 
our competitors to come after us but does not allow us to defend 
ourselves.''
    Response:
    The Act is the first that provides the authority for a concrete 
masonry products checkoff program at the Department of Commerce. The 
list of prohibited activities in the Act and Order are consistent with 
those found in checkoff programs within the U.S. Department of 
Agriculture. Specifically, the Act states the prohibited activities 
include prohibition on: Influencing legislation, elections, or 
governmental action; engaging in an action that would be a conflict of 
interest; engaging in advertising that s false or misleading; engaging 
in any research, education, or promotion that would be disparaging to 
other construction materials; or engaging in any promotion or project 
that would benefit any individual manufacturer. As the commenter notes, 
the prohibition in statutes under which U.S. Department of Agriculture 
(USDA) operates is slightly different in that it prohibits engaging in 
a program that that may be false or misleading or disparaging to 
another agricultural commodity. While this appears to be an 
incongruity, in practice and as a matter of policy the USDA does not 
allow its checkoff programs to engage in any action that disparages 
another commodity, regardless of whether it is agricultural. Of note, 
the last prohibition listed regarding the prohibition on benefiting any 
individual manufacturer should be read to mean it cannot be for the 
sole benefit of any individual manufacturer.

Notice Requirement

    Comment:
    One commenter stated that the proposed Order has inadequate notice 
procedures for the referendum.
    Response:
    The Federal Register is the official daily publication for rules, 
propose rules, and notices of Federal agencies, as well as Executive 
orders and other Presidential documents. Unless otherwise specifically 
provided by statute, filing of a document, required or authorized to be 
published by 44 U.S.C. 1505, except in cases where notice by 
publication is insufficient in law, is sufficient to give notice of the 
contents of the document to a person subject to or affected by it (see 
44 U.S.C. 1507).
    With the exception of Federal holidays, the Office of the Federal 
Register publishes the Federal Register Monday through Friday, by 9 
a.m. ET. The Department published referendum procedures in a proposed 
rule in the Federal Register (85 FR 65288, October 15, 2020). The 
Department provided the public with thirty days to comment. The 
Department addressed the comments received in its notice of the final 
referendum procedures published the referendum procedures final rule 
published in the Federal Register (86 FR 23271, May 3, 2021).

Department's Summary of Industry Background and Regulatory Flexibility 
Act Analysis

    Comment:
    One commenter took issue and believed invalid the comment made in 
the Department's Industry background found in the notice of the 
proposed Order. Specifically, the commenter the Department's statement 
that ``most of the producers acting alone do not have the resources to 
efficiently market the value of the product or conduct the research and 
education to promote market growth'' The commenter felt that ``[w]hile 
the statement may be true for some smaller manufacturers, this 
statement does not reflect the reality of producers as a whole.'' And 
characterized it as ``at best, a very imprecise generalization that 
does not accurately represent the current educational and promotional 
efforts of concrete masonry unit construction.'' By example the 
commenter explained that there are existing national, state and 
regional associations meeting these needs and effectively driving 
different research, education, and promotion priorities. The commenter 
felt that ``[t]o the extent that the Proposed Order is based on the 
quoted statement, it sits on a weak foundation.''
    This commenter also felt misleading the Department's observation 
that between 2007-2017, the number of establishments, number of 
employees, annual payroll, value added, and value of shipments declined 
in the industry. The commenter points to the last ten years to state 
there has been ``rapid growth in the concrete masonry unit 
manufacturing industry. . . . In fact, we have experienced an increase 
in sale of concrete masonry units of over 50% in this 10-year period.'' 
Again, the commenter believes that ``[r]elying on stale, irrelevant 
data is yet another dubious cornerstone for the proposed Department 
action.''
    Lastly the commenter questioned the Department use of data compiled 
by industry experts to make decisions. ``Yet those experts are not 
identified, nor is their work presented. At a minimum, the Secretary 
should identify these experts and provide the experts' qualifications 
as well as their reports that the Secretary relied onto make 
decisions.''
    Response:
    The analysis to which the commenter refers was not a consideration 
for the Department's finding that the Order is consistent with and will 
effectuate the purpose of the statute. The Department made all its 
decisions, its findings, and the publication of the proposed Order 
based on the Act alone and not on the rulemaking Background Information 
section or the accompanying Regulatory Flexibility Act (RFA) analysis. 
The section entitled Background Information provided in this rulemaking 
by the Department was not a finding of fact but rather simply an 
observation based on the relative size of most of the producers noted 
in the Department's RFA and economic analysis of the industry.

[[Page 51476]]

    The references to ``Industry experts'' refer to information 
provided by the National Concrete Masonry Association (NCMA). The total 
number of estimated concrete masonry units is from the NCMA 2019 CMU 
Sales Report (https://ncma.org/updates/news/2019-cmu-sales-survey-released/). While the Department did not make specific reference to the 
NCMA survey in its Notice, it did publish with the Order supporting 
documents on Regs.gov (see https://www.regulations.gov/document?D=DOC-2020-0002-0004). Included was the economic analysis from which the 
regulatory analysis originated and the NCMA report is cited there. To 
reiterate, the Department's use of the information was simply to 
provide a general background of the industry. While members of the 
industry submitted a proposal for a draft Order, the Department did not 
rely on industry experts in its decision-making, and specifically with 
regard to its determination that the Order is consistent with and will 
effectuate the purposes of the Act.
    The Department concurs with the commenter's example and believes 
national, regional, and state associations are good illustrations for 
the premise that by combining and coordinating efforts across producers 
it can drive and advance the research, education, and promotion of 
concrete masonry unit construction.
    Keep in mind that it is entirely up to the industry whether or not 
this Order goes into effect. The Order only will become effective based 
on the results of an industrywide referendum. The Order becomes 
effective November 29, 2021. The Secretary will publish a determination 
of the results of the referendum that it has been approved by a 
majority of manufacturers voting who also represent a majority of the 
machine cavities in operation of those manufacturers voting in the 
referendum. In the event the referendum does not reach a majority 
approval, the Department will publish a document in the Federal 
Register to withdraw this final rule before the effective date.

Intellectual Property

    Comment:
    One commenter thought that the proposed Order creates confusion as 
to the ownership of intellectual property.
    Response:
    The Order outlines the method for establishing ownership of 
intellectual property that is financed with funds remitted to the 
Board. A written agreement between the Board and the party receiving 
funds will establish ownership and allocation of rights to patents, 
copyrights, inventions, or publications, developed through the use of 
funds remitted to the Board under the Order.

Referenda

    Comment:
    Two commenters voiced concern for ensuing referenda, that they 
allow any concrete masonry product manufacturer to vote, even if they 
are not subject to the assessment. One commenter states ``only 
manufacturers subject to the assessment should be eligible to vote in 
any future referenda.'' Another commenter stated that while the 
``initial referendum is limited to manufacturers subject to the 
assessment, future referenda are not.''
    Response:
    Eligibility to vote in subsequent referenda will be dependent on 
the scope of an order and those that would be subject to the assessment 
of the proposed Order.
    The Act covers the concrete masonry products industry and leaves 
open the potential for other orders, however it limits to one, the 
number of orders active at any given time. The Department 
differentiates the current Order with one that may occur in the future. 
The Department recognizes that a future proposed order may differ 
significantly from the current Order, and therefore the Department will 
base eligibility to vote in a subsequent referendum on the scope of 
such proposed Order. To make clear that the reference is to future 
orders and not this Order, the Department states this explicitly in 
Sec.  1500.81(c).
    Comment:
    One commenter raised a concern with the two-part criteria the Act 
provides for approval of the Order. Specifically, the commenter thought 
``since the assessment is to be based on capacity, the referendum 
should also be solely based on that criterion. To include an additional 
requirement that gives every manufacturer, no matter its capacity, an 
equal vote, not only creates an unrepresentative system, but also 
creates an incentive structure for companies to modify their corporate 
structures on the basis of Department regulations rather than market 
forces.''
    Response:
    The language in the Order reflects that found in the Act. The Act 
sets up the two-part voting system. The function of the two-part voting 
system is a recognition that capacity only should be one consideration. 
The structure allows small manufacturers to have an equal voice while 
at the same time providing additional weight to larger manufacturers.
    The Department does not think it likely that a business will base 
its corporate structure decisions on their desire to enhance its 
participation in the upcoming referendum.
    Comment:
    One commenter voiced a concern that there is no guidance regarding 
the process for ``how machine cavities in operation will be counted as 
machine cavities in operation or even how the Secretary will determine 
what counts as a machine cavity.'' Another commenter voiced concern 
that the Department ``will rely on manufacturer's attestations as to 
their eligibility as well as providing the number of machine cavities 
in operation. Will the Department rely on attestations from 
manufacturers, each of which has incentive to inflate their numbers? . 
. . . And how will the Department count the cavities? Will the 
Department allow manufacturers to count concrete block molds that could 
be used in concrete paver machines as cavities? Will the government 
have to send representatives to every eligible manufacturer to count 
cavities? Will it rely on uncertain industry data? Given the 
fundamental importance of the number of operating cavities in 
determining whether the assessment will be imposed on manufacturers, 
the absence from the Proposed Order of a proposed method for counting 
cavities makes it starkly deficient.''
    Response:
    The Department is sensitive to the concern that additional 
government audits and inspections can be an encumbrance upon business 
operations and does not view onsite verification inspections as 
necessary to determine the total number of machine cavities in 
operation. Therefore, the Department will rely on the individual 
manufacturers' expertise and their attestation as to the number of 
cavities in operation while reserving the right to conduct onsite 
visits.
    The Department will use the definition as provided in both the Act 
and the Order. Specifically, machine cavities in operation are those 
machine cavities associated with a block machine that has produced 
concrete masonry units within the last six months of the date set for 
determining eligibility and is fully operable and capable of producing 
concrete masonry units. The Government forms a manufacturer will 
complete require a signed attestation as to the manufacturer's 
eligibility as well as to the number of machine cavities in operation. 
Therefore, a manufacturer may number toward its cavity count total 
those cavities that have produced concrete masonry units within six 
months of the referendum, regardless of

[[Page 51477]]

whether it is on a machine designed for the sole purpose of making 
concrete masonry units.
    Both the registration form and ballot form are official government 
forms. Both have the following statement: The making of any false 
statement or representation on this form, knowing it to be false, is a 
violation of Title 18, Section 1001 United States Code, which provides 
for the penalty of a fine of $10,000 or imprisonment of not more than 
five years or both.
    While there is a possibility a manufacturer may falsify information 
required on an official Government form as suggested by one commenter 
to ``inflate their numbers'', the Department does not equate the 
ability to do so with the likelihood it will happen. However, the 
Department certainly reserves the right to conduct inspections to 
verify a manufacturer's attestation. The Secretary's authority to 
inspect, the knowledge of penalties the Secretary has available against 
a person who willfully violates an Order issued by the Secretary, as 
well as the future requirement to provide such information and complete 
evaluation and compliance requirements are strong safeguards against 
actions of fraud. The Department believes these verification techniques 
provide the needed dis-incentive to falsify information required on an 
official Government form.
    Comment:
    One commenter thought the ``Checkoff program approval process 
requiring more than 50% approval in companies and cavities means some 
companies are going to be assessed without their consent, which is 
fundamentally inconsistent with their family values''.
    Response:
    An effective Order makes the assessment mandatory (concerning the 
mandatory nature of the Order, see the previous reply under the heading 
``Regional and state-based checkoff programs''). The Act sets out the 
criteria needed for the Order to become effective. Specifically, the 
Act provides that the order shall become effective only if the 
Secretary determines that the order has been approved by a majority of 
manufacturers voting who also represent a majority of the machine 
cavities in operation of those manufacturers voting in the referendum. 
The Department encourages all eligible manufactures to participate in 
the referendum to make sure ``their voices are heard.'' A majority is 
anything over 50%, therefore the commenter is correct that if the 
referendum succeeds and the Order goes into effect, those that were 
opposed to the Order and those who fail to participate in the 
referendum still are subject to the Order and the Department will 
require them to pay assessments. The reverse also is true, if the 
referendum fails, those that wanted a program are without.
    Comment:
    One commenter thought it is ``critically important that concrete 
masonry units be clearly defined, as this definition determines how 
manufacturers will be assessed and whether they will have a vote in the 
initial referendum.''
    Response:
    The Act and the Order use the same language to define these two 
terms. As noted previously, the definition of concrete masonry products 
clearly distinguishes a concrete masonry unit from hardscape products 
such as concrete pavers and segmental retain wall units. In its notice, 
the Department took the additional step of listing concrete masonry 
products that it considers to be concrete masonry units (and therefore 
subject to the assessment). The Department did not receive any comments 
on this list.
    The Act is clear that Board membership is not to be limited to 
concrete masonry unit manufacturers (i.e., those subject to the 
assessment). Specifically, the Act provides that `` `[t]he Board shall 
consist of manufacturers,'' 15 U.S.C. 8704(b)(1)(B)(iii); 
``manufacturers'' is defined as ``any person engaged in the 
manufacturing of commercial concrete masonry products in the United 
States.'' 15 U.S.C. 8702(12). The Act further provides that ``[t]o 
ensure fair and equitable representation of the concrete masonry 
products industry, the composition of the Board shall reflect the 
geographical distribution of the manufacture of concrete masonry 
products in the United States, the types of concrete masonry products 
manufactured, and the range in size of manufacturers in the United 
States.'' 15 U.S.C. 8704(b)(2)(A) (emphasis added). Thus, the Act is 
unambiguous that all concrete masonry manufacturers are eligible for 
Board membership and not just concrete masonry unit manufacturers, and 
the Order reflects that statutory directive.

Reimbursement to the Government and Board Administrative Costs

    Comment:
    Three commenters were concerned about the reimbursement mandate in 
the Order. One commenter stated ``the Act calls for the requirement to 
reimburse the Secretary for all expenses incurred by the Secretary in 
the implementation, administration, and supervision of the order, 
including all referendum costs in connection with the order. There does 
not seem to be a cap on these expenses.'' ``Rather than sign a blank 
check,'' another commenter proposed to place ``a 10% cap on government 
expenses.''
    Response:
    In addition to being a coordinated program of research, education 
and promotion to improve, maintain, and develop markets for concrete 
masonry products, there are several benefits to a Federally run 
checkoff program. Among others it includes oversight of Board 
operations, adherence to stated intended purpose, nationwide 
coordination, and the ability make participation mandatory. The 
concrete checkoff program authorized by the Act is consistent with 
other federally-mandated checkoff programs. The Act specifically 
requires reimbursement from assessments for all expenses incurred by 
the Secretary in the implementation, administration, and supervision of 
the order, including all referenda costs incurred in connection with 
the Order.
    All Federal checkoff programs require the affected industry to 
reimburse the Government for its expenses. The service the Government 
is providing is specific to an industry and the nature of the checkoff 
programs allows the Government to provide assistance and oversight, but 
normally does not use appropriated money to do so. The industry 
desiring the government assistance and oversight provides full 
reimbursement, so the benefit and expense to enact such program falls 
upon the industry and not the taxpayer at large.
    Comment
    Three commenters believed the proposed Order's allowance for the 
Board ``to spend 10% of assessments and other funds on the cost of 
collection of expenses and administrative staff is too high.'' One 
commented that there is ``no limit to the number of employees'' with a 
concern that ``no mechanism exists to ensure expenses in the future 
remain limited and reasonable.''
    Response:
    The Act allows for initial start-up costs but then establishes a 
cap on that type of spending. It would seem in the Board's best self-
interest to minimize administrative costs and maximize the funding for 
research, education, and promotion programs. Regardless, beginning in 
the third year after the establishment of the Board, the Act limits to 
10 percent of the assessment and other income received, the Board's 
expenditures for administration. This excludes payment into escrow and

[[Page 51478]]

reimbursement to the Secretary required under Sec.  1500.50(f) and (h). 
The Act's use of a percentage for a cap on administrative costs is both 
a limiting factor and what Congress considered reasonable.

Executive Order 12866

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

List of Subjects in 15 CFR Part 1500

    Administration practice and procedure, Assessments, Business and 
industry, Checkoff program, Concrete masonry products, Confidential 
business information, Education, Non-agricultural commodities, 
Promotion activities, Reporting and recordkeeping requirements, 
Research.

    For the reasons stated in the preamble, the Under-Secretary for 
Economic Affairs amends 15 CFR part 1500 as set forth below:

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

0
1. The authority citation for part 1500 continues to read as follows:

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

0
2. Add subpart A to read as follows:

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

Sec.

Definitions

1500.0 Order.
1500.1 Act.
1500.2 Block machine.
1500.3 Board.
1500.4 Cavity.
1500.5 Concrete masonry products.
1500.6 Concrete masonry unit.
1500.7 Conflict of interest.
1500.8 Department.
1500.9 Dry-cast concrete.
1500.10 Education.
1500.11 Geographic regions.
1500.12 Machine cavities.
1500.13 Machine cavities in operation.
1500.14 Manufacturer.
1500.15 Masonry unit.
1500.16 [Reserved]
1500.17 Person.
1500.18 Promotion.
1500.19 Research.
1500.20 Secretary.
1500.21 United States.

Concrete Masonry Products Board

1500.40 Establishment and membership.
1500.41 Nominations and appointments.
1500.42 Term of office.
1500.43 Vacancies.
1500.44 Disqualification.
1500.45 Procedure.
1500.46 Compensation and reimbursement.
1500.47 Powers and duties.
1500.48 Prohibited activities.

Expenses and Assessments

1500.50 Budget and expenses.
1500.51 Assessments.
1500.60 Programs and projects.
1500.61 Independent evaluation.
1500.62 Patents, copyrights, trademarks, information, publications, 
and product formulations.

Reports, Books, and Records

1500.70 Reports.
1500.71 Books and records.
1500.72 Confidential treatment.

Miscellaneous

1500.80 Right of the Secretary.
1500.81 Referenda.
1500.82 Suspension or termination.
1500.83 Effect of termination or amendment.
1500.84 Notice and advance registration.
1500.85 Personal liability.
1500.86 Separability.
1500.87 Amendments.
1500.88 OMB control number.

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

Definitions


Sec.  1500.0  Order.

    Order means this subpart A, Concrete Masonry Products Research, 
Education, and Promotion Order.


Sec.  1500.1   Act.

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


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.


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 
this Order (at Sec.  1500.40(c)), 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

[[Page 51479]]

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  [Reserved]


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 paragraph (d) of this section, shall be 
subject to the following:
    (1) To ensure fair and equitable representation of the concrete 
masonry products industry, the composition of the Board shall reflect 
the geographical distribution of the manufacture of concrete masonry 
products in the United States, the types of concrete masonry products 
manufactured, and the range in size of manufacturers in the United 
States.
    (2) No company or its affiliates shall have more than two members 
on the Board.
    (c) To the extent possible, dependent on the nominees submitted, 
the Secretary will strive to appoint at least two members from each 
region. Similarly, the Secretary will strive to appoint at least one 
member from each of the following districts:
BILLING CODE 3510-20-P

[[Page 51480]]

[GRAPHIC] [TIFF OMITTED] TR15SE21.007

BILLING CODE 3510-20-C
    (d) Three years after the assessment of concrete masonry units 
commences pursuant to implementation of this Order, and at the end of 
each three-year period thereafter, the Board, subject to the review and 
approval of the Secretary, shall, if warranted, recommend to the 
Secretary the reapportionment of the Board membership to reflect 
changes in the geographical distribution of the manufacture of concrete 
masonry products and the types of concrete masonry products 
manufactured. Additionally, at any time, the Board may make 
recommendations to the Secretary to modify the composition of the 
regions and districts set forth in paragraph (c) of this section.


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 6 alternate members of the Board within a

[[Page 51481]]

reasonable time after receiving nominations. If a voting member vacates 
the appointment, the Secretary will appoint one of the alternate 
members to fill the unexpired term. The Secretary will provide the 
Board an opportunity to offer a nominee as successor to fill the term 
of the alternate member. In any case in which the Board fails to submit 
nominations for any open position, the Secretary shall appoint a member 
qualifying for the position under the criteria set forth in Sec.  
1500.40.
    (c) As terms expire or vacancies occur among members and alternate 
members, nominations and those interested in being considered for Board 
membership, including self-nominations, may submit such nominations to 
the Board. For each expired or vacant position, the Board will evaluate 
the nominations received, verify the willingness of nominees to serve, 
and then will submit to the Secretary at least three nominees for each 
such position. The Secretary may also receive nominations and may 
forward them to the Board for their consideration. The Secretary is not 
bound by the recommendations of the Board; in selecting members, the 
Secretary will consider the recommendations of the Board, individual 
expertise, distribution of appointments, and more expansive input from 
sources available to the Secretary. For the initial Board, from the 
list of nominees not selected for appointment, the Secretary will 
choose and appoint six alternate members for the Board. Alternate 
members will be non-voting members of the Board.


Sec.  1500.42  Term of office.

    (a) Board members and any alternates will serve for a term of three 
years, except for the initial members as described below. Board members 
and any alternates will be able to serve a maximum of two consecutive 
three-year terms and may serve additional terms, of up to two 
consecutive three-year terms, after rotating off the Board. When the 
Board is first established, the initial members will be assigned 
initial terms of two, three and four years. Initial terms will be 
staggered to assure continuity. Each term of office will end on 
December 31, with new terms of office beginning on January 1. Members 
serving the initial terms of two and three years will be eligible to 
serve a second term of three years.
    (b) Thereafter, each of the positions will carry a full three-year 
term. Notwithstanding the limitations on consecutive terms, a Board 
member or alternate Board member may continue to serve until a 
successor is appointed by the Secretary.


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 
who was appointed as a manufacturer ceases to qualify as a 
manufacturer, such Board member or alternate Board member shall be 
disqualified from serving on the Board. The replacement may be at the 
Secretary's initiative or the Board may recommend to the Secretary that 
the member be removed.
    (b) If a member of the Board consistently refuses to perform the 
duties of a member of the Board, or if a member of the Board engages in 
acts of dishonesty or willful misconduct, the Board may recommend to 
the Secretary that the member be removed from office.
    (c) All members serve at the pleasure of the Secretary.


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:
    (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;

[[Page 51482]]

    (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 generic research, education, and 
promotion programs and projects relating to concrete masonry products, 
and to pay the costs of such programs and projects with assessments 
collected under Sec.  1500.51 and other income of the Board as provided 
under Sec. Sec.  1500.50(j) and 1500.62;
    (l) To enter into contracts or agreements which must be approved by 
the Secretary before becoming effective, for the development and 
carrying out of programs or projects of research, education, and 
promotion relating to concrete masonry products, including with 
manufacturer associations or other entities as considered appropriate 
by the Secretary;
    (m) To develop programs and projects, and enter into contracts or 
agreements related thereto, which must be approved by the Secretary 
before becoming effective, targeted specifically toward the Geographic 
Regions described in 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) At the end of each fiscal year and at such other times as the 
Secretary may request, to have the books and records audited by an 
independent auditor and submit a report of the audit directly to the 
Secretary;
    (q) To give the Secretary the same notice of meetings of the Board 
and committees as is given to members, including committee members if 
committee members are not members of the Board, in order that the 
Secretary's representative(s) may attend such meetings, and to keep and 
report minutes of each meeting of the Board and all committees to the 
Secretary;
    (r) To furnish to the Secretary any information or records that the 
Secretary may request;
    (s) To receive, investigate, and report to the Secretary all 
complaints of violations of this Order;
    (t) To recommend to the Secretary such amendments to this Order as 
the Board considers appropriate;
    (u) To recommend adjustments to the assessments as provided in this 
Order;
    (v) To notify manufacturers of all Board meetings through press 
releases or other means;
    (w) To invest assessments collected under this Order in accordance 
with 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 research, education, or promotion that would be 
disparaging to other construction materials; or
    (5) Engage in any promotion or project that would benefit any 
individual manufacturer.
    (b) Paragraph (a) of this section does not preclude:
    (1) The development and recommendation of amendments to the Order;
    (2) The communication to appropriate government officials of 
information relating to the conduct, implementation, or results of 
research, education, and promotion activities under the Order except 
communications described in paragraph (a)(1) of this section; or
    (3) Any lawful action designed to market concrete masonry products 
directly to a foreign government or political subdivision of a foreign 
government.
Expenses and Assessments


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, 
including the probable cost of each promotion, research, and education 
activity proposed to be developed or carried out by the Board and a 
section that annotates and explains any shortcomings, overruns, and 
shift of funds from the previous year's budget. Such budget shall be 
deemed approved if the Secretary fails to approve or reject the budget 
within 60 days of receipt, unless the Secretary proposes to the Board 
and to Congress, reasonable justification for the delay and provides a 
reasonable date by which approval or disapproval will be made. The 
Department may provide such justification in any written format.
    (b) In addition to paragraph (a) of this section, each such budget 
shall include:
    (1) A statement of objectives and strategy for each program, plan, 
or project, with a comparative for the preceding year--annotating the 
success and explaining the shortcomings of the preceding year's 
programs, plans, and projects
    (2) A summary of anticipated revenue, with comparative data for at 
least one preceding year (except for the initial budget);
    (3) A summary of proposed expenditures for each program, plan or 
project; and
    (4) Staff and administrative expense breakdowns, with comparative 
data for at least one preceding year (except for the initial budget).
    (c) Each budget shall provide adequate funds to defray its proposed 
expenditures.
    (d) Subject to this section, any amendment or addition to an 
approved budget must be approved by the Secretary, including shifting 
funds from one program or project to another. A shift of funds from one 
approved category to another, and not exceeding 10% of the funds in 
either category, which does not cause an increase in the Board's 
approved budget and which is

[[Page 51483]]

consistent with governing bylaws need not have prior approval by the 
Secretary. If the Secretary fails to approve or reject a budget, or an 
amendment or addition to an approved budget, within 60 days of receipt, 
such budget shall be deemed approved, unless the Secretary provides to 
the Board and to Congress, in writing, reasonable justification for the 
delay and provides a reasonable date by which approval or disapproval 
will be made. The Department may provide such justification in any 
written format.
    (e) The Board is authorized to incur such expenses as the Secretary 
finds are reasonable and likely to be incurred by the Board for its 
maintenance and functioning, and to enable it to exercise its powers 
and perform its duties in accordance with the provisions of this Order. 
Such expenses shall be paid from funds received by the Board.
    (f) Limitations on obligation of funds:
    (1) In each fiscal year, through fiscal year 2030, the Board may 
not obligate an amount greater than the sum of--
    (i) 73 percent of the amount of assessments estimated to be 
collected under Sec.  1500.51 in such fiscal year);
    (ii) 73 percent of the amount of assessments actually collected 
under Sec.  1500.51 in the most recent fiscal year for which an audit 
report has been submitted as of the beginning of the fiscal year for 
which the amount that may be obligated is being determined, less the 
estimate made pursuant to paragraph (e)(1) of this section for such 
most recent fiscal year; and
    (iii) Amounts permitted in preceding fiscal years to be obligated 
that have not been obligated.
    (iv) For fiscal years 9 and 10 (ending September 2028 and 2029) 
there is a special rule for estimates. Specifically, the amounts 
estimated to be collected shall be 62 percent of the amount of 
assessments actually collected in the most recent fiscal year for which 
an audit report has been submitted as of the beginning of the fiscal 
year for which the amount be obligated is being determined.
    (2) Assessments collected in excess of the amount permitted to be 
obligated in a fiscal year shall be deposited in an escrow account 
until the end of the 11th fiscal year or September 2030.
    (3) Prior to the end of the 11th fiscal year or September 30, 2030, 
the Board may not obligate, expend, or borrow against amounts deposited 
in the escrow account. Any interest earned on such amounts shall be 
deposited in the escrow account and shall be unavailable for obligation 
until the end of the 11th fiscal year or September 30, 2030.
    (g) With approval of the Secretary, the Board may borrow money for 
the payment of administrative expenses, subject to the same fiscal, 
budget and audit controls as other funds of the Board. Any funds 
borrowed by the Board shall be expended only for startup costs and 
capital outlays.
    (h) The Board shall reimburse the Secretary for all expenses 
incurred by the Secretary in the implementation, administration and 
supervision of this Order, including all referendum costs in connection 
with this Order.
    (i) Following the third fiscal year of operation of the Board, the 
total cost of collection of expenses and administrative staff incurred 
by the Board during any fiscal year shall not exceed 10 percent of the 
projected total assessments to be collected and other income received 
by the Board for that fiscal year after any fees owed to the Department 
are paid. Reimbursements to the Secretary required under paragraph (g) 
of this section are excluded from this limitation on spending.
    (j) Pending disbursement of assessments and all other revenue under 
a budget approved by the Secretary, the Board may invest assessments 
and all other revenues collected under this section in:
    (1) Obligations of the United States or any agency of the United 
States;
    (2) General obligations of any state or any political subdivision 
of a state;
    (3) Interest bearing accounts or certificates of deposit of 
financial institutions that are members of the Federal Reserve System; 
or
    (4) Obligations fully guaranteed as to principal interest by the 
United States.
    (k) Investment income and revenue earned under paragraph (i) of 
this section are earnings obtained from assessments that are subject to 
budget approval under paragraph (a) of this section.


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 evaluation and compliance program and its plan to 
evaluate program effectiveness and to verify compliance with the Act. 
The evaluation and compliance program will provide the method and 
metrics that will help determine program effectiveness and will outline 
the way the Board will receive assessments, how they will verify 
compliance, determine the best method to track sales, and how to 
document all actions including the process by which the Board will use 
to ensure it meets or exceeds the legislatively-mandated disbursement 
of received assessments.
    (b) Such assessments shall be levied at a rate of $0.01 per 
concrete masonry unit sold by a manufacturer. The Board may make 
assessments effective as of the effective date of this Order. 
Submission of funds may be made to the Board within 60 days of the end 
of the first quarter after the Board is established; thereafter 
submission of funds will be to the board within 60 days of the end of 
each quarter.
    (c) At any time following the conduct of the initial referendum 
conducted pursuant to this Order, the assessment rate will be reviewed 
by the Board and, upon the affirmative vote of two-thirds of voting 
members of the Board, may be modified; provided that the assessment 
rate may be raised to a maximum of $0.05 cents per unit, that only one 
increase may be implemented in any one-year period, and each individual 
increase may not exceed $0.01
    (d) Not less than 50 percent of the assessments (less 
administration expenses) paid by a manufacturer shall be used to 
support research, education, and promotion programs and projects in 
support of the Geographic Region of the manufacturer.
    (e) All assessment payments and reports will be submitted to the 
Board quarterly. All quarterly payments are to be received no later 
than 60 days after the conclusion of each quarter. A late payment 
charge shall be imposed on any manufacturer who fails to remit to the 
Board the total amount for which any such manufacturer is liable on or 
before the due date established by the Board. In addition to the late 
payment charge, an interest charge shall be imposed on the outstanding 
amount for which the manufacturer is liable. The rate of interest and 
late payment charges shall be specified by the Secretary.
    (f) Manufacturers failing to remit total assessments due in a 
timely manner may also be subject to actions under Federal debt 
collection procedures.
    (g) The Board may authorize other organizations to collect 
assessments on

[[Page 51484]]

its behalf with the approval of the Secretary.
    (h) The Board shall provide manufacturers submitting assessments 
under this Order with the opportunity to apply for rebates on 
assessments remitted to the Board for concrete masonry units not 
covered by this Order and for assessments remitted to the Board for 
concrete masonry units sold to a purchaser that subsequently failed to 
remit payment due to bankruptcy, bad debt or other reasons causing the 
money intended to be collected from such sale to be uncollectible. 
Those requesting rebates in such circumstances must provide all 
necessary documentation as the Board shall determine.


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 be 
consistent with the purpose of the Act (see 15 U.S.C. 8701) and provide 
for:
    (1) The establishment of annual research, education, and promotion 
objectives and metrics for each fiscal year. Objectives and performance 
metrics should consider and where possible reflect those listed in 15 
U.S.C. 8716 (Study and report by the Government Accounting Office).
    (2) The establishment, issuance, effectuation and administration of 
appropriate programs for research, education, and promotion with 
respect to concrete masonry products; and
    (3) The establishment and conduct of research with respect to the 
image, desirability, use, marketability, quality or production of 
concrete masonry products, to the end that the marketing and use of 
concrete masonry products may be encouraged, expanded, improved or made 
more acceptable and to advance the image, desirability or quality of 
concrete masonry product.
    (b) No program or project shall be implemented prior to its 
approval by the Secretary. Once a program or project is so approved, 
the Board shall take appropriate steps to implement it. If the 
Secretary fails to approve or reject a contract or agreement for a 
program or project within 60 days of receipt, the contract or agreement 
shall be deemed approved, unless the Secretary provides to the Board 
and to Congress, in writing, reasonable justification for the delay and 
provides a reasonable date by which approval or disapproval will be 
made. The Department may provide such justification in any written 
format. Any such contract or agreement shall provide that:
    (1) The contractor or agreeing party shall develop and submit to 
the Board a program or project together with a budget or budgets that 
specifies the cost to be incurred to carry out the program or project;
    (2) The contractor or agreeing party shall keep accurate records of 
all its transactions and make periodic reports to the Board of 
activities conducted, submit accounting for funds received and 
expended, and make such other reports as the Secretary or the Board may 
require;
    (3) The Secretary may audit the records of the contracting or 
agreeing party periodically;
    (4) Any subcontractor who enters into a contract with a Board 
contractor and who receives or otherwise uses funds allocated by the 
Board shall be subject to the same provisions as the contractor; and
    (5) The contract or agreement shall become effective on the 
approval of the Secretary.
    (c) Each program or project implemented under this Order shall be 
reviewed or evaluated periodically by the Board to ensure that it 
contributes to an effective program of research, education, or 
promotion. If it is found by the Board that any such program or project 
does not contribute to an effective program of research, education, or 
promotion, then the Board shall, with the approval of the Secretary, 
terminate such program or project.
    (d) Any educational or promotional activity undertaken with funds 
provided by the Board shall include a statement that such activities 
were supported in whole or in part by the Board.
    (e) Every 2 years the Board shall prepare and make publicly 
available a comprehensive and detailed report that includes an 
identification and description of all programs and projects undertaken 
by the Board during the previous 2 years as well as those planned for 
the subsequent 2 years and detail the allocation or planned allocation 
of Board resources for each such program or project. Such report shall 
also include:
    (1) The overall financial condition of the Board;
    (2) A summary of the amounts obligated or expended during the 2 
preceding fiscal years; and
    (3) A description of the extent to which the objectives of the 
Board were met according to the metrics required under Sec.  1500.50.


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 section are due to the Board 60 
days after the end of each quarter.
    (c) All reports or information submitted pursuant to this paragraph 
shall be subject to the confidentiality restrictions in 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, 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 shall be kept confidential by all persons, 
including all employees and former employees of the Board, all officers 
and employees and former

[[Page 51485]]

officers and employees of contracting and subcontracting agencies or 
agreeing parties having access to such information. Such information 
shall not be available to Board members or manufacturers. Only those 
persons having a specific need for such information to effectively 
administer the provisions of this Order shall have access to such 
information. Such information may be disclosed only if the Secretary 
considers the information relevant; and the information is revealed in 
a judicial proceeding or administrative hearing brought at the 
direction or on the request of the Secretary or to which the Secretary 
or any officer of the Department is a party. Any officer, employee, or 
agent of the Department of Commerce or any officer, employee, or agent 
of the Board who willfully violates this paragraph shall be fined not 
more than $1,000 and imprisoned for not more than 1 year, or both. 
Nothing in this section shall be deemed to prohibit:
    (1) The issuance of general statements based upon the reports of 
the number of persons subject to this Order or statistical data 
collected therefrom, which statements do not identify the information 
furnished by any person; and
    (2) The publication, by direction of the Secretary, of the name of 
any person who has been adjudged to have violated this Order, together 
with a statement of the particular provisions of this Order violated by 
such person.
    (b) For any officer, employee, or agent of the Department of 
Commerce, these provisions are consistent with and do not supersede, 
conflict with, or otherwise alter any obligations, rights, or 
liabilities created by existing statute or Executive order relating to 
classified information, communications to Congress, the reporting to an 
Inspector General of a violation of any law, rule, or regulation, or 
mismanagement, a gross waste of funds, an abuse of authority, or a 
substantial and specific danger to public health or safety, or any 
other whistleblower protection. The definitions, requirements, 
obligations, rights, sanctions, and liabilities created by controlling 
Executive Orders and statutory provisions are incorporated into this 
Order and are controlling.
Miscellaneous


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 became effective after approval by a 
majority of manufacturers voting who also represent a majority of the 
machine cavities in operation of those manufacturers voting in the 
referendum.
    (b) After the initial referendum, the Secretary shall conduct a 
referendum upon the request of the Board, or effective beginning 
November 30, 2026, and at 5-year intervals thereafter, by petition from 
not less than 25% of manufacturers eligible to vote. Each manufacturer 
eligible to vote in subsequent referenda shall be entitled to one vote. 
The Order will remain in effect if approved by a majority of 
manufactures voting who also represent a majority of the machine 
cavities in operation of those manufacturers voting in the referendum.
    (c) For any new proposed order, voter eligibility will be based on 
the scope of such proposed order. A future proposed Order becomes 
effective if approved by a majority of manufacturers voting and any 
other criteria established by the Secretary based on the scope of such 
future proposed order.


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, shall not:
    (a) Affect or waive any right, duty, obligation or liability which 
shall have arisen, or which may thereafter arise in connection with any 
provision of this Order;
    (b) Release or extinguish any violation of this Order; or
    (c) Affect or impair any rights or remedies of the United States, 
or of the Secretary or of any other persons, with respect to any such 
violation.


Sec.  1500.84  Notice and advance registration.

    At least 30 days before a referendum is to be conducted under this 
Order, the Secretary shall notify all manufacturers of the period 
during which the referendum will occur through publication in the 
Federal Register. The notice shall explain any registration and voting 
procedures. A manufacturer who chooses to vote in any referendum 
conducted under this Order shall register with the Secretary prior to 
the voting period.


Sec.  1500.85  Personal liability.

    No member or employee of the Board shall be held personally 
responsible, either individually or jointly with others, when they 
exercise their discretionary duties of their office, in good faith, 
while acting within the scope of their authority, to any person for 
errors in judgment, either of commission or omission, as such member or 
employee, except for acts of dishonesty or willful misconduct


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 this Order.

[[Page 51486]]

Sec.  1500.88  OMB control number.

    The control number assigned to the information collection 
requirement in this subpart by the Office of Management and Budget 
pursuant to the Paperwork Reduction Act of 1995, 44 U.S.C. 3501 et 
seq., is OMB control number 0605-0028.

    Dated: August 20, 2021.
Kenneth White,
Senior Policy Analyst, Under Secretary for Economic Affairs.
[FR Doc. 2021-18352 Filed 9-14-21; 8:45 am]
BILLING CODE 3510-20-P