[Senate Report 114-157]
[From the U.S. Government Publishing Office]
Calendar No. 277
114th Congress } { Report
SENATE
1st Session } { 114-157
_______________________________________________________________________
QUARTERLY FINANCIAL REPORTING REAUTHORIZATION ACT OF 2015
__________
R E P O R T
of the
COMMITTEE ON HOMELAND SECURITY AND
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
to accompany
S. 1868
TO EXTEND BY 15 YEARS THE AUTHORITY OF THE SECRETARY
OF COMMERCE TO CONDUCT THE QUARTERLY FINANCIAL REPORT PROGRAM
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
October 22, 2015.--Ordered to be printed
______
U.S. GOVERNMENT PUBLISHING OFFICE
59-010 WASHINGTON : 2015
COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
RON JOHNSON, Wisconsin Chairman
JOHN McCAIN, Arizona THOMAS R. CARPER, Delaware
ROB PORTMAN, Ohio CLAIRE McCASKILL, Missouri
RAND PAUL, Kentucky JON TESTER, Montana
JAMES LANKFORD, Oklahoma TAMMY BALDWIN, Wisconsin
MICHAEL B. ENZI, Wyoming HEIDI HEITKAMP, North Dakota
KELLY AYOTTE, New Hampshire CORY A. BOOKER, New Jersey
JONI ERNST, Iowa GARY C. PETERS, Michigan
BEN SASSE, Nebraska
Keith B. Ashdown, Staff Director
Christopher R. Hixon, Chief Counsel
Patrick J. Bailey, Chief Counsel for Governmental Affairs
Gabrielle D'Adamo Singer, Deputy Chief Counsel for Governmental Affairs
Courtney J. Allen, Counsel
Gabrielle A. Batkin, Minority Staff Director
John P. Kilvington, Minority Deputy Staff Director
Mary Beth Schultz, Minority Chief Counsel
Troy H. Cribb, Minority Chief Counsel for Governmental Affairs
Laura W. Kilbride, Chief Clerk
Calendar No. 277
114th Congress } { Report
SENATE
1st Session } { 114-157
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QUARTERLY FINANCIAL REPORTING REAUTHORIZATION ACT OF 2015
_______
October 22, 2015.--Ordered to be printed
_______
Mr. Johnson, from the Committee on Homeland Security and Governmental
Affairs, submitted the following
R E P O R T
[To accompany S. 1868]
The Committee on Homeland Security and Governmental
Affairs, to which was referred the bill (S. 1868), to extend by
15 years the authority of the Secretary of Commerce to conduct
the quarterly financial report program, having considered the
same, reports favorably thereon with an amendment and
recommends that the bill, as amended, do pass.
CONTENTS
Page
I. Purpose and Summary..............................................1
II. Background and Need for the Legislation..........................1
III. Legislative History..............................................3
IV. Section-by-Section Analysis......................................3
V. Evaluation of Regulatory Impact..................................4
VI. Congressional Budget Office Cost Estimate........................4
VII. Changes in Existing Law Made by the Bill, as Reported............5
I. Purpose and Summary
S. 1868, the Quarterly Financial Reporting Reauthorization
Act, would extend for fifteen years the authorization of the
Quarterly Financial Report (QFR) program administered by the
United States Census Bureau (Census Bureau), which provides
quarterly financial data on the manufacturing, mining,
wholesale and other economic sectors.
II. Background and the Need for Legislation
Federal law requires the Secretary of Commerce to ``collect
and publish quarterly financial statistics of business
operations, organization, practices, management, and relation
to other businesses, including data on sales, expenses,
profits, assets, liabilities, stockholders equity, and related
accounts generally used by businesses in income statements,
balance sheets, and other measures of financial condition.''\1\
The QFR program satisfies this statutory requirement by
collecting and publishing quarterly aggregate statistics on the
business financial conditions of United States corporations.\2\
The information obtained by the QFR program is used to prepare
national measures of corporate profits and to inform fiscal and
monetary policy.\3\
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\1\13 U.S.C. Sec. 91(a).
\2\Quarterly Financial Report, United States Census Bureau (last
visited Oct. 16, 2015), https://www.census.gov/econ/qfr/about.html.
\3\Id.
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The QFR program has been in operation for nearly seventy
years. Since 1982, the QFR program has been administered by the
Census Bureau.\4\
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\4\Id.
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The QFR program surveys businesses in the industry sectors
of mining, manufacturing, wholesale trade, retail trade,
information services, and professional, scientific, and
technical service industries.\5\ These industries comprise
thirty-seven percent of the industries in the National Income
and Product Accounts, from which business data informs the
calculation of the nation's gross domestic product (GDP).\6\
The Census Bureau plans to expand the QFR program to include
more industries, including heath care and social assistance
services, administrative and support services, waste management
and remediation services, accommodation and food services, real
estate, and real estate rental and leasing services.\7\ With
this expansion, the QFR program would increase its GDP coverage
to sixty-one percent of industries.\8\
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\5\Id.
\6\U.S. Census Bureau, Briefing with Committee staff on QFR
program, May 21, 2015.
\7\Id.
\8\Id.
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Under the QFR program, the Census Bureau sends a mail-out,
mail-back survey to a sample number of businesses selected
randomly using Federal income tax records.\9\ A long-form
survey is mailed out to approximately 4,600 large corporations
in the covered industry sectors, and a short-form survey is
mailed out to approximately 5,000 small- and medium-sized
corporations in the manufacturing industry.\10\ While the
businesses that receive the QFR survey are required by law to
return it, the Census Bureau has not levied fines for
noncompliance since it began conducting the QFR program.\11\
Seventy-three percent of surveyed businesses choose to submit
the completed QFR program survey form online.\12\ The QFR forms
request information from businesses' income statements and
balance sheets.\13\ Key information items requested on QFR
forms include sales, operating profits, after-tax profits,
inventories, assets, and debt.\14\
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\9\Quarterly Financial Report, supra note 2.
\10\Id.
\11\E-mail from Stuart P. Durst, Jr., Branch Chief, Off. of Cong.
and Intergovernmental Affairs, U.S. Census Bureau, to Majority Staff,
S. Comm. on Homeland Sec. and Governmental Affairs (Oct. 1, 2015 11:48
EDT) (on file with Committee).
\12\Quarterly Financial Report, supra note 2.
\13\Id.
\14\Id.
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Data collected and published through the QFR program is
used by several entities, including the Bureau of Economic
Analysis (BEA), the Federal Reserve, the Small Business
Administration (SBA), newspapers, trade magazines, researchers,
and individual companies.\15\ According to the BEA, ``[n]o
other source provides quarterly tabulations of a representative
sample of mining, manufacturing, trade, information, and
professional and technical services corporations--corporations
whose profits account for over 50 percent of total domestic
profits.''\16\ For the Federal Reserve, data collected under
the QFR program is used for its quarterly Financial Accounts of
the United States, which provides accounts for the flow of
funds across large private sectors and quarterly aggregate
balance sheets for macroeconomic analysis.\17\ The SBA wrote
that ``the QFR is the only viable publically-available source
that provides sufficiently current data for [Manufacturing,
Mining, and Wholesale Trade sectors] to (1) assess how changes
in economic conditions impact revenues of firms of different
size, and (2) assess the actual utilization of and potential
capacity to demand credit by firms of different size.''\18\
Both the SBA and the Federal Reserve utilized QFR program data
during the 2008-2009 financial crisis to analyze the financial
health of large and small businesses.\19\
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\15\Id.
\16\Letter from Dennis Fixler, Chief Statistician, Bureau of
Economic Analysis, to Bill Bostic, Associate Director for Economic
Programs, U.S. Census Bureau (Jan. 3, 2015).
\17\Telephone Interview with Paul Smith, Assistant Director, Flow
of Funds Sec., Research and Statistics Div., Fed. Reserve Sys. (July 8,
2015).
\18\Letter from Giuseppe Gramigna, Chief Economist, U.S. Small Bus.
Admin., to William G. Bostic, Associate Director for Economic Programs,
U.S. Census Bureau (Feb. 20, 2015).
\19\Id; Telephone Interview with Paul Smith, supra note 17.
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Without re-authorization, the QFR program expires on
September 30, 2015.
III. Legislative History
On April 28, 2015, Senator Thomas R. Carper introduced S.
1868, the Quarterly Financial Reporting Reauthorization Act of
2015. S. 1868 was referred to the Senate Committee on Homeland
Security and Governmental Affairs. The Committee considered S.
1868 at a business meeting on July 29, 2015.
During the business meeting, Senator Ben Sasse offered an
amendment, requiring the Census Bureau to report to Congress on
its data security procedures. The Committee adopted the
amendment and ordered the bill, as amended, reported favorably
by voice vote en bloc. Senators present for the vote on the
amendment and the bill were: Johnson, Portman, Lankford, Ernst,
Sasse, Carper, Baldwin, Heitkamp, and Peters.
IV. Section-by-Section Analysis of the Bill, as Reported
Section 1. Short title.
This section establishes the short title of the bill as the
``Quarterly Financial Reporting Reauthorization Act of 2015.''
Section 2. Fifteen-year extension of authority for Secretary of
Commerce to conduct the Quarterly Financial Report Programs
Section 2 extends the authorization of the Quarterly
Financial Reporting Program for fifteen years to September 30,
2030.
Section 3. Report on data security procedures of the Bureau of the
Census
Section 3 requires the Secretary of Commerce to review all
of the current Census Bureau data security procedures and issue
a report of this review to Congress. This report would identify
all information systems of the Census Bureau that contain
sensitive information and describe any actions taken since the
2015 data breach of the Office of Personnel Management to
secure sensitive information on these information systems. The
report to Congress would also identify any known data breaches
of these information systems that contain sensitive information
and whether the Census Bureau stores any information that would
comprise classified information if it were to be combined with
other such information.
V. Evaluation of Regulatory Impact
Pursuant to the requirements of paragraph 11(b) of rule
XXVI of the Standing Rules of the Senate, the Committee has
considered the regulatory impact of this bill and determined
that the bill will have no regulatory impact within the meaning
of the rules. The Committee agrees with the Congressional
Budget Office's statement that the bill contains no
intergovernmental mandates as defined in the Unfunded Mandates
Reform Act (UMRA) and would impose no costs on state, local, or
tribal governments.
VI. Congressional Budget Office Cost Estimate
August 31, 2015.
Hon. Ron Johnson,
Chairman, Committee on Homeland Security and Governmental Affairs;
U.S. Senate; Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 1868, the Quarterly
Financial Reporting Reauthorization Act of 2015.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Susan Willie.
Sincerely,
Keith Hall.
Enclosure.
S. 1868--Quarterly Financial Reporting Reauthorization Act of 2015
S. 1868 would extend the authority for the Department of
Commerce to conduct the quarterly financial report program
through 2030. Under that program, which will expire at the end
of fiscal year 2015, the Census Bureau collects and publishes
statistics on the financial condition of U.S. businesses. S.
1868 also would direct the Secretary of Commerce to review the
data security procedures in place at the Bureau of the Census,
and submit a report to the Congress within 90 days of enactment
summarizing the findings from that review.
Information from the Census Bureau indicates that the
quarterly financial report program costs about $5 million a
year and that costs to prepare the report on data security
would be negligible. Therefore, CBO estimates that implementing
the bill would cost about $25 million over the 2016-2020
period, assuming appropriation of the estimated amounts.
Enacting S. 1868 would not affect direct spending or revenues;
therefore, pay-as-you-go procedures do not apply.
S. 1868 contains no intergovernmental mandates as defined
in the Unfunded Mandates Reform Act (UMRA) and would not affect
the budgets of state, local, or tribal governments.
The quarterly financial report program, which the bill
would extend, requires certain companies to provide survey
information on their business and financial data to the Census
Bureau. Extending this requirement would be a private-sector
mandate on those companies. Based on information from the
Census Bureau, CBO estimates that the direct cost to comply
with the mandate would fall well below the annual threshold
established by UMRA for private-sector mandates ($154 million
in 2015, adjusted annually for inflation).
On July 29, 2015, CBO transmitted a cost estimate for H.R.
3116, the Quarterly Financial Report Reauthorization Act, as
ordered reported by the House Committee on Oversight and
Government Reform on July 23, 2015. The bills are similar and
CBO's estimate of the budgetary effects are the same.
The CBO staff contacts for this estimate are Susan Willie
(for federal costs) and Paige Piper/Bach (for private-sector
mandates). The estimate was approved by H. Samuel Papenfuss,
Deputy Assistant Director for Budget Analysis.
VII. Changes in Existing Law Made by the Bill, as Reported
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, changes in existing law made by
S. 1868 as reported are shown as follows (existing law proposed
to be omitted is enclosed in brackets, new matter is printed in
italic, and existing law in which no change is proposed is
shown in roman):
TITLE 13--CENSUS
* * * * * * *
CHAPTER 3--COLLECTION AND PUBLICATION OF STATISTICS
* * * * * * *
Subchapter IV--Quarterly Financial Statistics
SEC. 91 COLLECTION AND PUBLICATION
* * * * * * *
EFFECTIVE AND TERMINATION DATE; REPORT TO CONGRESS
(a) * * *
(b) This Act, including the amendments made by this Act,
shall cease to have effect after September 30, [2015] 2030.
* * * * * * *
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