Softwood Lumber Research, Promotion, Consumer Education and Industry Information Order; Change to the Board Membership Eligibility Requirements

Citation85 FR 27690
Record Number2020-09726
Published date11 May 2020
CourtAgricultural Marketing Service
Federal Register, Volume 85 Issue 91 (Monday, May 11, 2020)
[Federal Register Volume 85, Number 91 (Monday, May 11, 2020)]
                [Proposed Rules]
                [Pages 27690-27692]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2020-09726]
                ========================================================================
                Proposed Rules
                 Federal Register
                ________________________________________________________________________
                This section of the FEDERAL REGISTER contains notices to the public of
                the proposed issuance of rules and regulations. The purpose of these
                notices is to give interested persons an opportunity to participate in
                the rule making prior to the adoption of the final rules.
                ========================================================================
                Federal Register / Vol. 85, No. 91 / Monday, May 11, 2020 / Proposed
                Rules
                [[Page 27690]]
                DEPARTMENT OF AGRICULTURE
                Agricultural Marketing Service
                7 CFR Part 1217
                [Document Number AMS-SC-20-0031]
                Softwood Lumber Research, Promotion, Consumer Education and
                Industry Information Order; Change to the Board Membership Eligibility
                Requirements
                AGENCY: Agricultural Marketing Service.
                ACTION: Proposed rule.
                -----------------------------------------------------------------------
                SUMMARY: This proposal invites comments on a change to the eligibility
                requirements for nominees representing domestic manufacturers on the
                Softwood Lumber Board (Board) established under the Softwood Lumber
                Research, Promotion, Consumer Education and Industry Information Order
                (Order). The Board administers the Order with oversight by the U.S.
                Department of Agriculture (USDA).
                DATES: Comments must be received by June 10, 2020.
                ADDRESSES: Interested persons are invited to submit written comments
                concerning this proposed rule. All comments must be submitted through
                the Federal e-rulemaking portal at http://www.regulations.gov and
                should reference the document number and the date and page number of
                this issue of the Federal Register. All comments submitted in response
                to this proposed rule will be included in the rulemaking record and
                will be made available to the public. Please be advised that the
                identity of the individuals or entities submitting comments will be
                made public on the internet at http://www.regulations.gov.
                FOR FURTHER INFORMATION CONTACT: Andrea Ricci, Marketing Specialist,
                Promotion and Economics Division, Specialty Crops Program, AMS, USDA,
                1400 Independence Avenue SW, Room 1406-S, Stop 0244, Washington, DC
                20250-0244; telephone: (202) 572-1442; facsimile: (202) 205-2800; or
                electronic mail: [email protected].
                SUPPLEMENTARY INFORMATION: This proposal affecting 7 CFR part 1217
                (herein the ``Order'') is authorized by the Commodity Promotion,
                Research, and Information Act of 1996 (1996 Act) (7 U.S.C. 7411-7425).
                Executive Orders 12866, 13563, and 13771
                 Executive Orders 12866 and 13563 direct agencies to assess all
                costs and benefits of available regulatory alternatives and, if
                regulation is necessary, to select regulatory approaches that maximize
                net benefits (including potential economic, environmental, public
                health and safety effects, distributive impacts and equity). Executive
                Order 13563 emphasizes the importance of quantifying both costs and
                benefits, reducing costs, harmonizing rules and promoting flexibility.
                This action falls within a category of regulatory actions that the
                Office of Management and Budget (OMB) exempted from Executive Order
                12866 review. Additionally, because this rule does not meet the
                definition of a significant regulatory action it does not trigger the
                requirements contained in Executive Order 13771. See OMB's Memorandum
                titled ``Interim Guidance Implementing Section 2 of the Executive Order
                of January 30, 2017, titled `Reducing Regulation and Controlling
                Regulatory Costs' '' (February 2, 2017).
                Executive Order 13175
                 This action has been reviewed in accordance with the requirements
                of Executive Order 13175, Consultation and Coordination with Indian
                Tribal Governments. The review reveals that this regulation would not
                have substantial and direct effects on Tribal governments and would not
                have significant Tribal implications.
                Executive Order 12988
                 This proposal has been reviewed under Executive Order 12988, Civil
                Justice Reform. It is not intended to have retroactive effect. Section
                524 of the 1996 Act (7 U.S.C. 7423) provides that it shall not affect
                or preempt any other Federal or State law authorizing promotion or
                research relating to an agricultural commodity.
                 Section 519 of the 1996 Act (7 U.S.C. 7418) provides that a person
                subject to an order may file a written petition with USDA stating that
                an order, any provision of an order, or any obligation imposed in
                connection with an order, is not established in accordance with the
                law, and request a modification of an order or an exemption from an
                order. Any petition filed challenging an order, any provision of an
                order, or any obligation imposed in connection with an order, must be
                filed within two years after the effective date of an order, provision,
                or obligation subject to challenge in the petition. The petitioner will
                have the opportunity for a hearing on the petition. Thereafter, USDA
                will issue a ruling on the petition. The 1996 Act provides that the
                district court of the United States for any district in which the
                petitioner resides or conducts business shall have the jurisdiction to
                review a final ruling on the petition, if the petitioner files a
                complaint for that purpose not later than 20 days after the date of the
                entry of USDA's final ruling.
                Background
                 This proposal invites comments on a change to the eligibility
                requirements for nominees representing domestic manufacturers on the
                Board. The Board administers the Order with oversight by the USDA.
                Pursuant to the Order, assessments are collected from domestic
                manufacturers and importers, and used for research and promotion
                projects designed to strengthen the position of softwood lumber in the
                marketplace. This proposed change was recommended to the Secretary by
                the Board at its February 26, 2020, meeting, and will contribute to the
                effective administration of the program.
                 Section 1217.40 provides for the establishment of the Board. The
                Board is comprised of manufacturers for the U.S. market who manufacture
                and domestically ship or import 15 million board feet or more of
                softwood lumber in the United States during a fiscal period. In
                November 2018, the Board recommended revising the Board composition
                from 19 to 14 members over a three-year period. The Board took into
                consideration the consolidation of the softwood lumber industry since
                the inception of the program, along with the number of companies
                eligible to be represented on the Board. Additionally, the Board
                recommended that U.S. Board members reside in the region they
                represent. This was intended to ensure that entities from outside the
                U.S. that
                [[Page 27691]]
                own softwood lumber entities within the U.S. could only represent a
                U.S. region on the Board. The recommendation was finalized in a rule
                that was published in the Federal Register on September 25, 2019 (84 FR
                50294). The 2021 Board and each subsequent Board shall be comprised of
                14 members, 10 of whom shall represent domestic manufacturers and four
                shall represent importers. Domestic manufacturer Board members
                represent three regions: U.S. South Region, U.S. West Region; and
                Northeast and Lake States Region. The Order prescribes that domestic
                manufacturer representatives reside in the region they represent.
                Board Recommendation
                 The Board met on February 26, 2020, and recommended the Order be
                revised to allow a domestic manufacturer's representative to seek
                nomination in any of the regions where the manufacturer they represent
                has manufacturing operations. The current Order limits manufacturer
                representatives to seek nomination only in the region where he or she
                resides. The Board conducted nominations under the newly implemented
                provisions and found that clarification in the Order was needed to
                reflect the multi-regional nature of manufacturers rather than the
                individual nominee. Several domestic manufacturers have operations in
                multiple U.S. regions. Revising the Order to allow a person to seek
                nomination in one of the regions where the manufacturer they represent
                has operations would provide flexibility to the Order, while
                maintaining the intent that Board members representing domestic
                manufacturers reside in the U.S. This proposal is will help facilitate
                program operations. Therefore, Sec. 1217.40 (b)(1), (b)(1)(i),
                (b)(1)(ii), and (b)(1)(iii) would be revised accordingly.
                Initial Regulatory Flexibility Act Analysis
                 In accordance with the Regulatory Flexibility Act (RFA) (5 U.S.C.
                601-612), the Agricultural Marketing Service (AMS) is required to
                examine the impact of the action on small entities. Accordingly, AMS
                has considered the economic impact of this action on such entities.
                 The purpose of the RFA is to fit regulatory actions to the scale of
                businesses subject to the actions so that small businesses will not be
                disproportionately burdened. The Small Business Administration (SBA)
                defines, in 13 CFR part 121, small agricultural service firms (domestic
                softwood lumber manufacturers and importers) as those having annual
                receipts of no more than $8 million.\1\
                ---------------------------------------------------------------------------
                 \1\ SBA does have a small business size standard for
                ``Sawmills'' of 500 employees (see https://www.sba.gov/sites/default/files/2019-08/SBA%20Table%20of%20Size%20Standards_Effective%20Aug%2019%2C%202019_Rev.pdf). Based on USDA's understanding of the lumber industry, using
                this criterion would be impractical as sawmills often use
                contractors rather than employees to operate and, therefore, many
                mills would fall under this criterion while being, in reality, a
                large business. Therefore, USDA used agricultural service firm as a
                more appropriate criterion for this analysis.
                ---------------------------------------------------------------------------
                 The Random Lengths Publications, Inc.'s yearly average framing
                lumber composite price was $356 per thousand board feet (mbf) in 2019.
                Dividing the $8 million threshold that defines an agricultural service
                firm as small by this price results in a maximum threshold of 22.5
                million board feet (mmbf) of softwood lumber per year that a domestic
                manufacturer or importer may ship to be considered a small entity for
                purposes of the RFA. Table 1 shows the number of entities and the
                amount of volume they represent that may be categorized as small or
                large based on the SBA definition.
                 Table 1--Domestic Manufacturers and Importers by SBA Size Standards, 2019
                --------------------------------------------------------------------------------------------------------------------------------------------------------
                 Domestic manufacturers Importers Totals
                 -----------------------------------------------------------------------------------------------
                 Entities Volume (MMBF) Entities Volume (MMBF) Entities Volume (MMBF)
                --------------------------------------------------------------------------------------------------------------------------------------------------------
                Small................................................... 226 1,991 774 1,257 1,000 3,248
                Large................................................... 290 32,229 106 32,582 396 64,811
                 -----------------------------------------------------------------------------------------------
                 Total............................................... 516 34,220 880 33,839 1,396 68,059
                --------------------------------------------------------------------------------------------------------------------------------------------------------
                Sources: Forest Economic Advisors; Customs and Border Protection.
                 As shown in Table 1, there are a total of 1,396 domestic
                manufacturers and importers of softwood lumber based on 2019 data. Of
                these, 1,000 entities, or 72 percent, shipped or imported less than
                22.5 mmbf and would be considered small based on the SBA definition.
                These 1,000 entities domestically manufactured or imported 3.25 billion
                board feet (bbf) in 2019, less than 5 percent of total volume. The
                proposed revision to the Board eligibility requirements would not
                disproportionately burden small domestic manufacturers and importers of
                softwood lumber.
                 This proposal would revise Sec. 1217.40 (b)(1), (b)(1)(i),
                (b)(1)(ii), and (b)(1)(iii) to allow domestic softwood lumber
                manufacturer representatives to seek nomination in any of the regions
                where the manufacturer they represent has manufacturing operations. The
                Order is administered by the Board with oversight by the USDA. In
                accordance with the program requirements, assessments are collected
                from domestic manufacturers and importers, and used for research and
                promotion projects designed to strengthen the position of softwood
                lumber in the marketplace. Revising the Order to allow a person to seek
                nomination in one of the regions where the softwood lumber manufacturer
                has operations would provide flexibility to the Order, while
                maintaining the intent that Board members representing domestic
                manufacturers reside in the U.S.
                 In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
                Chapter 35), the information collection and recordkeeping requirements
                that are imposed by the Order have been approved previously under OMB
                control number 0581-0093. This proposed rule would not result in a
                change to the information collection and recordkeeping requirements
                previously approved and would impose no additional reporting and
                recordkeeping burden on domestic manufacturers and importers of
                softwood lumber.
                 As with all Federal promotion programs, reports and forms are
                periodically reviewed to reduce information requirements and
                duplication by industry and public sector agencies. USDA has not
                [[Page 27692]]
                identified any relevant Federal rules that duplicate, overlap, or
                conflict with this proposed rule.
                 Regarding alternatives, the Board considered not changing the
                nominee eligibility requirements, however, the entire Board determined
                that making this proposed change would better align the Order
                provisions with industry practices and would help facilitate Board
                operations. This proposal was discussed at the Industry Relations and
                Governance Committee meeting on February 18, 2020, and at the Board
                meeting on February 26, 2020.
                 AMS has performed this initial RFA analysis regarding the impact of
                this action on small entities and invites comments concerning potential
                effects of this action.
                 USDA has determined that this proposed rule is consistent with and
                would effectuate the purposes of the 1996 Act.
                 A 30-day comment period is provided to allow interested persons to
                respond to this proposal. All written comments received in response to
                this proposed rule by the date specified will be considered prior to
                finalizing this action.
                List of Subjects in 7 CFR Part 1217
                 Administrative practice and procedure, Advertising, Consumer
                information, Marketing agreements, Softwood Lumber promotion, Reporting
                and recordkeeping requirements.
                 For the reasons set forth in the preamble, 7 CFR part 1217, is
                proposed to be amended as follows:
                PART 1217--SOFTWOOD LUMBER RESEARCH, PROMOTION, CONSUMER EDUCATION
                AND INDUSTRY INFORMATION ORDER
                0
                1. The authority citation for 7 CFR part 1217 continues to read as
                follows:
                 Authority: 7 U.S.C. 7411-7425; 7 U.S.C. 7401.
                0
                2. In Sec. 1217.40, revise paragraphs (b)(1) introductory text,
                (b)(1)(i), (ii), and iii), to read as follows:
                Sec. 1217.40 Establishment and membership.
                * * * * *
                 (b) * * *
                 (1) Domestic manufacturers. Domestic manufacturers must reside in
                the United States. For the 2020 Board, 11 members shall represent
                domestic manufacturers and for the 2021 Board and each subsequent
                Board, ten members shall represent domestic manufacturers who reside in
                the following three regions:
                 (i) Five members shall represent manufacturers of softwood lumber
                in the U.S. South Region, which consists of the states of Alabama,
                Arkansas, Florida, Georgia, Louisiana, Mississippi, North Carolina,
                Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West
                Virginia. For the 2020 Board, of these five members, two must represent
                large and three must represent small domestic manufacturers. For the
                2021 Board and each subsequent Board of these five members, two must
                represent large, two must represent small, and one may represent
                domestic manufacturers of any size;
                 (ii) Five members shall represent manufacturers of softwood lumber
                in the U.S. West Region for the 2020 Board, and for the 2021 Board and
                each subsequent Board, four members shall manufacture softwood lumber
                in the U.S. West Region, which consists of the states of Alaska,
                Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New
                Mexico, North Dakota, Oregon, South Dakota, Utah, Washington, and
                Wyoming. For the 2020 Board, of these five members, four must represent
                large and one must represent small domestic manufacturers. For the 2021
                Board and each subsequent Board, of the four members, two must
                represent large, one must represent small, and one may represent
                domestic manufacturers of any size; and
                 (iii) One member shall represent a manufacturer of softwood lumber
                in the Northeast and Lake States Region, which consists of the states
                of Connecticut, Delaware, Illinois, Indiana, Iowa, Kansas, Kentucky,
                Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri,
                Nebraska, New Hampshire, New Jersey, New York, Ohio, Pennsylvania,
                Rhode Island, Vermont, Wisconsin and all other parts of the United
                States not listed in paragraph (b)(1)(i), (ii), or (iii) of this
                section. This member may represent domestic manufacturers of any size.
                * * * * *
                Bruce Summers,
                Administrator.
                [FR Doc. 2020-09726 Filed 5-8-20; 8:45 am]
                BILLING CODE 3410-02-P
                

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT