[Senate Report 114-221]
[From the U.S. Government Publishing Office]
Calendar No. 381
114th Congress } { Report
2d Session } SENATE { 114-221
_______________________________________________________________________
REINFORCING AMERICAN-MADE PRODUCTS ACT OF 2015
__________
R E P O R T
OF THE
COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ON
S. 1518
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
March 7, 2016.--Ordered to be printed
SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
one hundred fourteenth congress
second session
JOHN THUNE, South Dakota, Chairman
ROGER F. WICKER, Mississippi BILL NELSON, Florida
ROY BLUNT, Missouri MARIA CANTWELL, Washington
MARCO RUBIO, Florida CLAIRE McCASKILL, Missouri
KELLY AYOTTE, New Hampshire AMY KLOBUCHAR, Minnesota
TED CRUZ, Texas RICHARD BLUMENTHAL, Connecticut
DEB FISCHER, Nebraska BRIAN SCHATZ, Hawaii
JERRY MORAN, Kansas ED MARKEY, Massachusetts
DAN SULLIVAN, Alaska CORY BOOKER, New Jersey
RON JOHNSON, Wisconsin TOM UDALL, New Mexico
DEAN HELLER, Nevada JOE MANCHIN, West Virginia
CORY GARDNER, Colorado GARY PETERS, Michigan
STEVE DAINES, Montana
Nick Rossi, Staff Director
Adrian Arnakis, Deputy Staff Director
Rebecca Seidel, General Counsel
Kim Lipsky, Democratic Staff Director
Christopher Day, Democratic Deputy Staff Director
Clint Odom, Democratic General Counsel
Calendar No. 381
114th Congress} { Report
SENATE
2d Session } { 114-221
======================================================================
REINFORCING AMERICAN-MADE PRODUCTS ACT OF 2015
_______
March 7, 2016.--Ordered to be printed
_______
Mr. Thune, from the Committee on Commerce, Science, and Transportation,
submitted the following
R E P O R T
[To accompany S. 1518]
The Committee on Commerce, Science, and Transportation, to
which was referred the bill (S. 1518) to make exclusive the
authority of the Federal Government to regulate the labeling of
products made in the United States and introduced in interstate
or foreign commerce, and for other purposes, having considered
the same, reports favorably thereon without amendment and
recommends that the bill do pass.
Purpose of the Bill
The purpose of S. 1518, the Reinforcing American-Made
Products Act of 2015, is to ensure that there is a single
national standard for labeling products as ``Made in the
U.S.A.'' or ``Made in America.''
Background and Needs
The Federal Trade Commission (FTC or Commission) currently
regulates claims of U.S. origin under its general authority to
act against deceptive acts and practices under section 5 of the
Federal Trade Commission Act (FTC Act, 15 U.S.C. 45). Under
section 320933 of the Violent Crime Control and Law Enforcement
Act of 1994 (15 U.S.C. 45a), products bearing the ``Made in the
U.S.A.'' or ``Made in America'' label are required to do so in
a manner consistent with the decisions and orders of the FTC.
Since 1997, the FTC has enforced a stringent national labeling
standard that requires products marked ``Made in the U.S.A.''
or ``Made in America'' to be ``all or virtually all'' produced
in the United States.\1\ Under this standard, marketers
labeling or advertising a product as ``Made in the U.S.A.''
must have a reasonable basis to support the claim. The
Commission considers three factors in evaluating whether ``all
or virtually all'' of a product is made in the United States:
(1) whether the final assembly or processing of the product
took place in the United States; (2) the portion of the total
manufacturing cost of the product that is attributable to U.S.
parts and processing; and (3) how far removed from the finished
product any foreign content is.
---------------------------------------------------------------------------
\1\``Made in U.S.A.'' and Other U.S. Origin Claims, Federal Trade
Commission, 62 Fed. Reg. 63,756 (Dec. 2, 1997).
---------------------------------------------------------------------------
In 2011, the California Supreme Court allowed a lawsuit to
proceed wherein plaintiffs challenged a company's ``Made in the
U.S.A.'' claim under the State's unfair competition law and
false advertising law, effectively establishing a State
standard that diverged from the FTC standard. California later
codified its own ``Made in the U.S.A.'' standard, under which a
product can bear the ``Made in the U.S.A.'' label in California
if 95 percent of its contents are domestically sourced. If a
company can certify that some components are unavailable in the
United States, then a 90 percent threshold applies. These
divergent standards raise interstate commerce concerns for
manufacturers. Most manufacturers do not have the ability to
control where their products are sold because they sell their
goods wholesale to national and international distributors. The
products are then shipped to retailers throughout the country.
Because of this market reality, many U.S. manufacturers
eligible to use the ``Made in the U.S.A.'' mark in 49 out of 50
States and the rest of the world cannot label their products as
such because they may ultimately reach the more restrictive
California market.
S. 1518 would amend the Federal product labeling statute to
ensure that the current authority of the FTC to enforce ``Made
in the U.S.A.'' labeling rules preempts State requirements.
This national standard would allow manufacturers with ``all or
virtually all'' parts of their product produced in the United
States to use the label, and would help consumers decide
whether their choice to purchase products marked as ``Made in
the U.S.A.'' supports U.S. manufacturing and jobs.
Summary of Provisions
S. 1518 would amend section 320933 of the Violent Crime
Control and Law Enforcement Act of 1994, (15 U.S.C. 45a), to
include an ``Effect on State Law'' subsection that states that
the national ``Made in the U.S.A.'' standard supersedes any
provisions of any State law relating to the extent to which a
product is introduced, delivered for introduction, sold,
advertised, or offered for sale in interstate or foreign
commerce with a ``Made in the U.S.A'' or ``Made in America''
label.
Legislative History
Senator Lee introduced this bill on June 4, 2015, with
Senators Capito, Fischer, Collins, and King as co-sponsors. On
November 18, 2015, in an open Executive Session, the Committee
considered the bill. The Committee, by voice vote, ordered S.
1518 to be reported favorably.
Estimated Costs
In accordance with paragraph 11(a) of rule XXVI of the
Standing Rules of the Senate and section 403 of the
Congressional Budget Act of 1974, the Committee provides the
following cost estimate, prepared by the Congressional Budget
Office:
S. 1518--Reinforcing American-Made Products Act of 2015
S. 1518 would preempt state laws that establish standards
under which a ``Made in America'' or ``Made in the U.S.A.''
label may be affixed to a product. The bill would reiterate
that the Federal Trade Commission (FTC) is solely responsible
for developing and enforcing those standards.
Based on information from the FTC, CBO expects that
implementing S. 1518 would not affect the workload or
enforcement activities of the agency, and therefore, would have
no effect on the federal budget.
Enacting S. 1518 would not affect direct spending or
revenues; therefore, pay-as-you-go procedures do not apply. CBO
estimates that enacting S. 1518 would not increase net direct
spending or on-budget deficits in any of the four consecutive
10-year periods beginning in 2026.
By preempting state laws, S. 1518 would impose an
intergovernmental mandate as defined in the Unfunded Mandates
Reform Act (UMRA). At least one state, California, currently
has a law setting its own standards for such labels. S. 1518
would preempt that law. The costs, if any, to the state of
complying with the mandate would not exceed the annual
threshold established in UMRA ($154 million in 2016, adjusted
annually for inflation.)
S. 1518 contains no private-sector mandates as defined in
UMRA.
The CBO staff contacts for this estimate are Susan Willie
(for federal costs) and Leo Lex (for intergovernmental
mandates). The estimate was approved by H. Samuel Papenfuss,
Deputy Assistant Director for Budget Analysis.
Regulatory Impact
In accordance with paragraph 11(b) of rule XXVI of the
Standing Rules of the Senate, the Committee provides the
following evaluation of the regulatory impact of the
legislation, as reported:
number of persons covered
S. 1518, as reported, would not impose any new regulatory
requirements on businesses.
economic impact
Enactment of this legislation is not expected to have an
adverse impact on the Nation's economy.
privacy
S. 1518 would not have an adverse impact on the personal
privacy of individuals.
paperwork
S. 1518 would not measurably increase paperwork
requirements for most businesses.
Congressionally Directed Spending
In compliance with paragraph 4(b) of rule XLIV of the
Standing Rules of the Senate, the Committee provides that no
provisions contained in the bill, as reported, meet the
definition of congressionally directed spending items under the
rule.
Section-by-Section Analysis
Section 1. Short title.
This section would designate the bill's short title as the
``Reinforcing American-Made Products Act of 2015.''
Section 2. Exclusivity of Federal authority to regulate labeling of
products made in the United States and introduced in interstate
and foreign commerce.
This section would amend section 320933 of the Violent
Crime Control and Law Enforcement Act of 1994 (15 U.S.C. 45a)
to include an ``Effect on State Law'' subsection that states
that the ``Made in the U.S.A.'' labeling provisions shall
supersede any provisions of the law of any State relating to
the extent to which a product is introduced, delivered for
introduction, sold, advertised, or offered for sale in
interstate or foreign commerce with a ``Made in the U.S.A.'' or
``Made in America'' label, or the equivalent thereof, in order
to represent that such product was in whole or substantial part
of domestic origin.
Changes in Existing Law
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
material is printed in italic, existing law in which no change
is proposed is shown in roman):
VIOLENT CRIME CONTROL AND LAW ENFORCEMENT ACT OF 1994
[Public Law 103-322; 108 Stat. 1796]
SEC. 320933. LABELS ON PRODUCTS.
[15 U.S.C. 45a]
[To the extent]
(a) In General.--To the extent any person introduces,
delivers for introduction, sells, advertises, or offers for
sale in commerce a product with a ``Made in the U.S.A.'' or
``Made in America'' label, or the equivalent thereof, in order
to represent that such product was in whole or substantial part
of domestic origin, such label shall be consistent with
decisions and orders of the Federal Trade Commission issued
pursuant to section 5 of the Federal Trade Commission Act. This
section only applies to such labels. [Nothing in this section]
Except as provided in subsection (b), nothing in this section
shall preclude the application of other provisions of law
relating to labeling. The Commission may periodically consider
an appropriate percentage of imported components which may be
included in the product and still be reasonably consistent with
such decisions and orders. Nothing in this section shall
preclude use of such labels for products that contain imported
components under the label when the label also discloses such
information in a clear and conspicuous manner. The Commission
shall administer this section pursuant to section 5 of the
Federal Trade Commission Act and may from time to time issue
rules pursuant to section 553 of title 5, United States Code,
for such purpose. If a rule is issued, such violation shall be
treated by the Commission as a violation of a rule under
section 18 of the Federal Trade Commission Act (15 U.S.C. 57a)
regarding unfair or deceptive acts or practices. This section
shall be effective upon publication in the Federal Register of
a Notice of the provisions of this section. The Commission
shall publish such notice within six months after the enactment
of this section.
(b) Effect on State Law.--The provisions of this section
shall supersede any provisions of the law of any State relating
to the extent to which a product is introduced, delivered for
introduction, sold, advertised, or offered for sale in
interstate or foreign commerce with a ``Made in the U.S.A.'' or
``Made in America'' label, or the equivalent thereof, in order
to represent that such product was in whole or substantial part
of domestic origin.
[all]