October 5, 2018 was a historic day for the concrete masonry industry. It is the day that President Trump signed the Federal Aviation Administration reauthorization bill. The bill included the text of the Concrete Masonry Products Research, Education and Promotion Act, which provides Congressional authorization for the concrete masonry products industry to develop its own commodity checkoff program to support needed industry initiatives. These initiatives work well in industry’s that are small business dominated such as ours.
“This is a great day for our industry,” said Major Ogilvie of CEMEX USA, national chair of the concrete masonry checkoff initiative since 2010. “We demonstrated a level of perseverance on this initiative that is only matched by the resilience of the products that we manufacture. By standing together, we will not only strengthen our industry, but our communities. We applaud the members of Congress for recognizing that the small businesses in our industry can accomplish even greater things together if we can more effectively pool our resources to promote ourselves.”
Passage of this authorization is the culmination of over 8 years of work. The impressive industry effort included a significant grass roots outreach by block producers, mason contractors, other suppliers and related industry associations. Hundreds of visits to offices of elected officials on Capitol Hill are credited with helping legislators to understand the economic impact of masonry, its manufacturing and construction, on communities throughout America.
“We need to do a better job of promoting the value of concrete masonry construction. It has so much untapped potential,” said Paul Odom, Chairman of the Board for the Mason Contractors Association of America. “With improved funding and more strategic coordination that would come through a concrete masonry checkoff, I am optimistic that significant growth for our businesses is possible.”
A commodity checkoff is an industry-wide, coordinated and continuous program of research, education, and promotion to support specific generic products. Checkoff programs allow commodity producers to raise funds through self-imposed mandatory assessments. Checkoffs generate the funding necessary for an industry to successfully develop, implement, and manage programs needed to increase sales and expand markets. Well-funded, properly planned, and carefully monitored programs help create product awareness, increase business opportunities, and benefit all involved in the relevant industry. Many existing checkoff programs relate to agricultural products. Concrete masonry products would be the second such program related to construction products, the other being softwood lumber under the U.S. Department of Agriculture. The concrete masonry checkoff would be the first under the Department of Commerce.
Congressional authorization, however, is only the first step in developing this much-needed industry funding mechanism. Before the program can begin, is has to be approved by industry referendum of the concrete block producers in the United States as well as by a majority of the production capacity represented by those companies. That referendum, which might take place in mid to late 2019, would be overseen by the U.S. Department of Commerce.
Between now and that referendum, members of the industry will be working together to establish the parameters for how the program will be administered to achieve the best possible outcomes.
How would it work? If approved, a penny would be assessed on each concrete masonry unit sold in the U.S. Those pooled funds would be distributed to support a variety of initiatives. Decisions on program funding would be made by a checkoff board, comprised of members of the industry, and approved by the Secretary of Commerce.
While some resources will be allocated to support national programs, it is expected that a majority of the available program resources will be allocated to support regional, state, and even local programs. As such, the checkoff management structure would include regional committees to identify and manage programs at that level.
The concrete masonry industry in Florida and Arizona have already created something similar to a checkoff program with a penny or two per block being collected to support promotion efforts in these states. The goal of the national program would be to supplement or complement efforts there and build-up efforts in other areas of the country. The concrete masonry industry in Canada has had a similar program operating through the Canadian Concrete Masonry Association for more than a decade.
This is an exciting time for the concrete masonry industry, and passage of the legislation is a reason to celebrate. Nevertheless, there is still more hard work ahead to appropriately develop this program and to secure the passage of the program through the referendum of block manufacturers.
To find out more details about the concrete masonry checkoff program, visit www.cmucheckoff.com. We would like to thank Representatives Brett Guthrie (R-KY) and Kathy Castor (D-FL) and Senators Roy Blunt (R-MO) and Bill Nelson (D-FL) each acted as bill sponsors for the last three congressional terms.