[Title 36 CFR F]
[Code of Federal Regulations (annual edition) - July 1, 2002 Edition]
[Title 36 - PARKS, FORESTS, AND PUBLIC PROPERTY]
[Chapter II - FOREST SERVICE, DEPARTMENT OF AGRICULTURE]
[Part 223 - SALE AND DISPOSAL OF NATIONAL FOREST SYSTEM TIMBER]
[Subpart F - The Forest Resources Conservation and Shortage Relief Act of]
[From the U.S. Government Printing Office]
36PARKS, FORESTS, AND PUBLIC PROPERTY22002-07-012002-07-01falseThe Forest Resources Conservation and Shortage Relief Act ofFSubpart FPARKS, FORESTS, AND PUBLIC PROPERTYFOREST SERVICE, DEPARTMENT OF AGRICULTURESALE AND DISPOSAL OF NATIONAL FOREST SYSTEM TIMBER
Subpart F--The Forest Resources Conservation and Shortage Relief Act of
1990 Program
Source: 60 FR 46922, Sept. 8, 1995, unless otherwise noted.
Sec. 223.185 Scope and applicability.
This subpart implements provisions of the Forest Resources
Conservation and Shortage Relief Act of 1990 (16 U.S.C. 620, et seq.)
that became effective upon enactment or as otherwise specified in the
Act. As of September 8, 1995, this subpart applies to unprocessed timber
originating from private lands west of the 100th meridian in the
contiguous 48 States that requires domestic processing. Except as
provided later in this paragraph, this subpart applies to all
unprocessed timber originating from National Forest System lands west of
the 100th meridian in the contiguous 48 States acquired from timber sale
contracts awarded on or after August 20, 1990. The rules regarding
substitution at Sec. 223.162 of subpart D apply to unprocessed timber
acquired from timber sale contracts awarded between August 20, 1990, and
September 8, 1995, as provided in Sec. 490(a)(2)(A) of the Act. The
rules regarding reporting the acquisition and disposition of unprocessed
Federal timber at Sec. 223.193 of this subpart apply to all transfers of
unprocessed Federal timber originating from National Forest System lands
west of the 100th meridian in the contiguous 48 States regardless of
timber sale contract award date.
[[Page 113]]
Sec. 223.186 Definitions.
The following definitions apply to the provisions of this subpart:
Acquire means to come into possession of, whether directly or
indirectly, through a sale, trade, exchange, or other transaction. The
term ``acquisition'' means the act of acquiring. The terms ``acquire''
and ``purchase'' are synonymous and are used interchangeably.
Act means the Forest Resources Conservation and Shortage Relief Act
of 1990 (Pub. L. No. 101-382, 104 Stat. 714-726; 16 U.S.C. 620-620j).
Area of operations refers to the geographic area within which logs
from any origin have neither been exported nor transported to an area
where export occurs. The area of operations will be determined for
individual Forest Service Administrative Units or groups of
Administrative Units by the Regional Foresters of Regions 1, 2, 3, and 4
on an as-needed basis, and used as part of the criteria for evaluating
requests to waive the identifying and marking requirements for
unprocessed Federal logs.
Cants or Flitches are synonymous, and mean trees or portions of
trees, sawn on one or more sides, intended for remanufacture into other
products elsewhere.
Civil penalties:
Willful disregard means a person knew or showed reckless disregard
for the matter of whether the person's conduct is prohibited by the
Forest Resources Conservation and Shortage Relief Act of 1990, 16 U.S.C.
620, et seq. with regard to the prohibition against exporting
unprocessed Federal timber (including causing unprocessed timber to be
exported).
Willfully means a person knew or showed reckless disregard for the
matter of whether the person's conduct is prohibited by the Forest
Resources Conservation and Shortage Relief Act of 1990, 16 U.S.C. et
seq., or regulations issued under the Act, even though such violation
may not have caused the export of unprocessed Federal timber in
violation of the Act.
Disregard means to ignore, overlook, or fail to observe any
provision of the Act or a regulation issued under this Act, even though
such violation may not have caused the export of unprocessed Federal
timber in violation of the Act.
Should have known means committing an act that a reasonable person
in the timber industry would have known violates a provision of the Act
or regulations issued under the Act, even though the violation may not
have caused the export of unprocessed Federal timber in violation of the
Act.
Each violation refers to any violation under the Act or its
implementing regulations with regard to a single act, which includes but
is not limited to a single marking (or lack thereof) on a single log,
the export of a single log, or a single entry on a document.
Export means transporting, or causing to be transported, either
directly or through another party, unprocessed timber to a foreign
country. Export occurs:
(1) On the date that a person enters into an agreement to sell,
trade, exchange or otherwise convey such timber to a person for delivery
to a foreign country;
(2) When unprocessed timber is placed in an export facility in
preparation (sorting, bundling, container loading etc.) for shipment
outside the United States; or,
(3) When unprocessed timber is placed on board an ocean-going
vessel, rail car, or other conveyance destined for a foreign country.
Federal lands means lands that are owned by the United States west
of the 100th meridian in the contiguous 48 States, but do not include
any land the title to which is;
(1) Held in trust by the United States for the benefit of any Indian
tribe or individual;
(2) Held by any Indian tribe or individual subject to a restriction
by the United States against alienation; or
(3) Held by any Native Corporation as defined in section 3 of the
Alaska Native Claims Settlement Act (43 U.S.C. 1602).
Finished products means products from trees, portions of trees or
other roundwood products processed to standards and specifications
intended for end product use.
[[Page 114]]
Fiscal year means the Federal fiscal year beginning October 1, and
ending the following September 30.
Gross value means the total value a person received from the
transfer of unprocessed Federal timber involved in a violation, before
production, delivery, agent fees, overhead, or other costs are removed.
Hammer brand refers to an identifying mark or brand composed of
numbers, letters, characters, or a combination of numbers, letters, or
characters permanently attached to a hammer, or other similar striking
tool. The hammer brand must make a legible imprint of the brand in the
end of a log when struck.
Highway yellow paint refers to an oil base or equivalent yellow
paint of lasting quality comparable to the yellow paint used to mark
highways.
Log refers to an unprocessed portion of a tree that is transported
to a manufacturing facility or other location for processing,
transferring to another person, or exporting. ``Logs'' is synonymous
with ``timber''.
Manufacturing facility means a permanently located processing plant
used to convert unprocessed timber into products.
Non-manufacturer means a person who does not own or operate a
manufacturing facility.
Person means any individual, partnership, corporation, association,
or other legal entity and includes any subsidiary, subcontractor, parent
company, and business affiliates. Persons are affiliates of each other
when either directly or indirectly, one person controls or has the power
to control the other or a third party or parties control or have the
power to control both. In determining whether or not affiliation exists,
consideration shall be given to all appropriate factors, including but
not limited to common ownership, common management, common facilities,
and contractual relationships.
Private lands means lands, located west of the 100th meridian in the
contiguous 48 States held or owned by a person. Such term does not
include Federal lands or public lands, or any land the title to which
is;
(1) Held in trust by the United States for the benefit of any Indian
tribe or individual;
(2) Held by any Indian tribe or individual subject to a restriction
by the United States against alienation; or
(3) Held by any Native Corporation as defined in section 3 of the
Alaska Native Claims Settlement Act (43 U.S.C. 1602).
Processed means timber processed into products listed in
Sec. 223.187 of these regulations.
Purchase has the same meaning as acquire. The terms are used
interchangeably.
Same geographic and economic area means the land within the
boundaries of an approved sourcing area.
Sourcing area means the geographic area approved by the Secretary
which includes a person's timber manufacturing facility and the private
and Federal lands from which the person acquires or intends to acquire
unprocessed timber to supply such manufacturing facility; a sourcing
area must be geographically and economically separate from any area from
which that person harvests for export any unprocessed timber originating
from private lands.
Substitution occurs when:
(1) A person acquires, directly or indirectly, unprocessed timber
from Federal lands west of the 100th meridian in the contiguous 48
States and engages in exporting or selling for export, unprocessed
timber originating from private lands within the same geographic and
economic area; or
(2) A person acquires, directly or indirectly, unprocessed timber
from Federal lands west of the 100th meridian in the contiguous 48
States and, during the preceding 24-month period, exported unprocessed
timber originating from private lands; or
(3) A person exports or sells for export, unprocessed timber
originating from private lands within the same geographic and economic
area in the same calendar year that the person has unprocessed timber
originating from Federal lands in the person's possession or under
contract; or
[[Page 115]]
(4) A person purchases, directly or indirectly, unprocessed timber
originating from Federal lands if such person sells or otherwise
transfers unprocessed timber that originates from private lands west of
the 100th meridian in the contiguous 48 States and that requires
domestic processing, to a third party if that third party or successive
parties export that unprocessed private timber. A third party or
successive parties who acquire such unprocessed timber that originates
from private lands west of the 100th meridian in the contiguous 48
States and that requires domestic processing may not export such timber.
Transaction means an arrangement involving the transfer of
unprocessed timber.
Transaction statement is a signed copy of one of the transaction
reporting forms in 36 CFR 223.193 and 223.194.
Transfer means to pass title, sell, trade, exchange, or otherwise
convey unprocessed timber to another person.
Unprocessed timber means trees or portions of trees or other
roundwood not processed to standards and specifications suitable for end
product use and intended for remanufacture. Unprocessed timber does not
include products intended for remanufacture that meet the criteria
listed in Sec. 223.187(a) (2) or (3). For the purposes of reporting and
identifying under Secs. 223.193, 223.194 and 223.195, unprocessed timber
also means timber products listed in Sec. 223.187 of these regulations,
and other timber products including house logs that are part of a
structure kit, that are indistinguishable from other unprocessed timber.
Sec. 223.187 Determinations of unprocessed timber.
(a) All species except western red cedar. Unprocessed timber, as
defined in Sec. 223.186 of this Subpart, does not include timber
processed into any one of the following:
(1) Lumber or construction timbers, except western red cedar,
meeting current American Lumber Standards Grades or Pacific Lumber
Inspection Bureau Export R or N list grades, sawn on 4 sides, not
intended for remanufacture. To determine whether such lumber or
construction timbers meet this grade and intended use standard, the
shipper of record must have in its possession for each shipment or
order, and available for inspection upon the request of the Forest
Service:
(i) A legible copy of a lumber inspection certificate certified by a
lumber inspection/grading organization generally recognized by the
industry as setting a selling standard; and,
(ii) A statement by the manufacturer certifying under the penalties
provided in section 492 of the Act (16 U.S.C. 620d) and the False
Statements Act (18 U.S.C. 1001) that the products in the shipment or
order are intended to be used as shipped, are manufactured into
products, or processed into pulp, and are not to be manufactured into
other products. The certification statements shall be made in accordance
with paragraph (b) of this section. The certification statements in
paragraph (b) of this section are not required if the lumber or
construction timbers described in paragraph (a)(1) of this section or
the pulpwood bolts described in paragraph (a)(8) of this section
otherwise may be exported without regard to an intent to remanufacture
or process into pulp. For instance, because the timber originates from
private land from which timber may be exported.
(2) Lumber, construction timbers, or cants for remanufacture, except
western red cedar, meeting current American Lumber Standards Grades or
Pacific Lumber Inspection Bureau Export R or N list clear grades, sawn
on 4 sides, not to exceed 12 inches (30.5 cm) thick. To determine
whether such lumber, timbers, or cants meet this grading standard, the
shipper of record must have in its possession for each shipment or order
and available for inspection, upon the request of the Forest Service, a
legible copy of a lumber inspection certificate certified by a lumber
inspection/grading organization generally recognized by the industry as
setting a selling standard.
(3) Lumber, construction timbers, or cants for remanufacture, except
western red cedar, that do not meet the grades referred to in paragraph
(a)(2) of this section and are sawn on 4 sides, with wane less than \1/
4\ of any face, not exceeding 8\3/4\ inches (22.2 cm) thick.
(4) Chips, pulp, or pulp products.
[[Page 116]]
(5) Veneer or plywood.
(6) Poles, posts, or piling cut or treated with preservatives for
use as such.
(7) Shakes or shingles.
(8) Aspen or other pulpwood bolts, not exceeding 100 inches in
length, exported for processing into pulp. Shippers of record of such
pulpwood bolts must have in their possession, and available for
inspection upon request of the Forest Service, in accordance with
paragraph (b) of this section, a manufacturer's certificate that such
bolts are intended for processing into pulp.
(9) Pulp logs or cull logs processed at domestic pulp mills,
domestic chip plants, or other domestic operations for the purpose of
conversion of logs into chips.
(b) Export product certifications. (1) Manufacturers of lumber or
construction timbers described in paragraph (a)(1) of this section and
pulpwood bolts described in paragraph (a)(8) of this section, shall
certify to the following statements:
(2) Lumber or construction timbers; ``I certify that the products in
the shipment identified by my shipping order number -------- dated ----
----, are manufactured in accordance with the attached order from
(buyer) of (address), numbered -------- and dated --------, are intended
to be used as shipped and are not to be remanufactured into other
products. I make this certification with full knowledge and
understanding of the export and substitution restrictions of the Forest
Resources Conservation and Shortage Relief Act of 1990 (16 U.S.C. 620 et
seq.) (Act) and its implementing regulations. I fully understand that
exporting unprocessed timber originating from Federal lands or
unprocessed timber from private lands which is required to be processed
domestically is a violation of this Act, its implementing regulations,
and the False Statements Act (18 U.S.C. 1001), and may subject me to the
penalties and remedies provided for such violations.''
(3) Pulpwood bolts. ``I certify that the pulpwood bolts in the
shipment identified by my shipping order number -------- dated --------,
are manufactured in accordance with the attached order from (buyer) of
(address), numbered -------- and dated --------, are intended to be
processed into pulp and are not to be remanufactured into other
products. I make this certification with full knowledge and
understanding of the export and substitution restrictions of the Forest
Resources Conservation and Shortage Relief Act of 1990 (16 U.S.C. 620,
et seq.) (Act) and its implementing regulations. I fully understand that
exporting unprocessed timber originating from Federal lands or
unprocessed timber from private lands which is required to be processed
domestically is a violation of this Act, its implementing regulations,
and the False Statements Act (18 U.S.C. 1001), and may subject me to the
penalties and remedies provided for such violations.''
(4) Signatory procedures. Certificates shall be on company
letterhead, and signed by the person manufacturing the shipment. In the
case of a corporation, the certificates must be signed by a person
authorized, in writing, by the Chief Executive Officer pursuant to 36
CFR 223.187(b)(4), to sign the certificates in 36 CFR 223.187(b) on
behalf of the corporation.
(5) Chief Executive Officer Authorization. The authorization by the
Chief Executive Officer shall be on company letterhead, shall be
notarized, and shall read as follows:
``I authorize -------- to sign the certificates in 36 CFR 223.187(b)
on behalf of (name of corporation). I make this authorization with full
knowledge and understanding of the export and substitution restrictions
of the Forest Resources Conservation and Shortage Relief Act of 1990 (16
U.S.C. 620 et seq.) (Act) and its implementing regulations. I fully
understand that exporting unprocessed timber originating from Federal
lands or unprocessed timber originating from private lands which is
required to be processed domestically is a violation of this Act, its
implementing regulations, and the False Statements Act (18 U.S.C. 1001),
and may subject me to the penalties and remedies provided for such
violation.''
(6) Exporters of other timber products originating from Federal
lands not specifically listed in Sec. 223.187 which may develop export
markets in the future may also require similar certification statements.
Such statements will be provided by the Forest Service.
[[Page 117]]
(c) Western red cedar. Unprocessed western red cedar timber does not
include manufactured lumber authorized for export under license by the
Department of Commerce, and lumber from private lands processed to
standards established in the lumber grading rules of the American Lumber
Standards Association or the Pacific Lumber Inspection Bureau, or timber
processed into any of the following products:
(1) Lumber of American Lumber Standards Grades of Number 3 dimension
or better, or Pacific Lumber Inspection Bureau Export R-List Grades of
Number 3 common or better, with a maximum cross section of 2,000 square
centimeters (310 square inches) for any individual piece of processed
western red cedar, regardless of grade. To determine whether such lumber
meets these established standards, grades and size restrictions, the
shipper of record must have in its possession for each shipment, and
available for inspection upon the request of the Forest Service, a
legible copy of a lumber inspection certificate certified by a lumber
inspection/grading organization generally recognized by the industry as
setting a selling standard. Export restrictions governing western red
cedar timber harvested from Federal, State or other public lands are
found in 7(i) of the Export Administration Act of 1979 as amended (50
U.S.C. appendix 2406(i)), and implementing regulations at 15 CFR 777.7.
(2) Chips, pulp, and pulp products;
(3) Veneer and plywood;
(4) Poles, posts, pilings cut or treated with preservatives for use
as such and not intended to be further processed; and
(5) Shakes and shingles.
(d) Finished Products. Shippers of record of products manufactured
from unprocessed western red cedar originating from Federal lands,
acquired by the manufacturer under the exemption from the prohibition
against indirect substitution at Sec. 223.189(e)(1), must have in their
possession for each shipment a certificate from the manufacturer that
such products are finished products as defined in Sec. 223.186 of this
subpart. The certification statement shall read as follows:
(1) ``I certify that the products in the shipment identified by my
shipping order number ------, dated ------, are manufactured in
accordance with the attached order from ---- (buyer) ---- of ------
(address) ------, numbered ---- and dated ------, are intended for end
product use. I understand that only western red cedar products that are
finished products are exempt from the prohibition against indirect
substitution in the Forest Resources Conservation and Shortage Relief
Act of 1990 (16 U.S.C. 620b(b)(1)) and its implementing regulations. I
make this certification with full knowledge and understanding of the
export and substitution restrictions of the Forest Resources
Conservation and Shortage Relief Act of 1990 (16 U.S.C. 620, et seq.)
(Act) and its implementing regulations. I fully acknowledge and
understand that to acquire western red cedar under the indirect
substitution exemption in 16 U.S.C. 620b(b)(1) for purposes other than
domestic processing into finished products will be a violation of this
Act, its implementing regulations, and the False Statements Act (18
U.S.C. 1001) and may subject me to the penalties and remedies provided
for such violation.''
(2) Signatory procedures. Certificates shall be on company
letterhead, and signed by the person manufacturing the shipment. In the
case of a corporation, the certificate must be signed by a person
authorized, in writing, by the Chief Executive Officer, pursuant to 36
CFR 223.187(d)(3), to sign the certificate in 36 CFR 223.187(d)(1) on
behalf of the corporation.
(3) Chief Executive Officer Authorization. The authorization by the
Chief Executive Officer shall be on company letterhead, shall be
notarized, and shall read as follows:
``I authorize -------- to sign the certificate in 36 CFR
223.187(d)(1) on behalf of (name of corporation). I make this
authorization with full knowledge and understanding of the export and
substitution restrictions of the Forest Resources Conservation and
Shortage Relief Act of 1990 (16 U.S.C. 620, et seq.) (Act) and its
implementing regulations. I fully understand that exporting unprocessed
timber originating from Federal lands or unprocessed timber originating
from private lands
[[Page 118]]
which is required to be processed domestically is a violation of this
Act, its implementing regulations, and the False Statements Act (18
U.S.C. 1001), and may subject me to the penalties and remedies provided
for such violation.''
Sec. 223.188 Prohibitions against exporting unprocessed Federal timber.
No person who acquires unprocessed timber originating from Federal
lands west of the 100th meridian in the contiguous 48 States may export
such timber from the United States, or sell, trade, exchange, or
otherwise convey such timber to any other person for the purpose of
exporting such timber from the United States. This prohibition does not
apply to specific quantities of grades and species of such unprocessed
Federal timber that the Secretary of Agriculture determines to be
surplus to domestic manufacturing needs.
Sec. 223.189 Prohibitions against substitution.
(a) Direct substitution prohibition. Except as otherwise provided by
this section:
(1) No person may purchase directly from any department or agency of
the United States unprocessed timber originating from Federal lands west
of the 100th meridian in the contiguous 48 States if:
(i) Such person acquires unprocessed timber originating from Federal
lands west of the 100th meridian in the contiguous 48 States and engages
in exporting or selling for export, unprocessed timber originating from
private lands within the same geographic and economic area; or
(ii) Such person has, during the preceding 24-month period, exported
unprocessed timber originating from private lands.
(2) No person may export or sell for export, unprocessed timber
originating from private lands within the same geographic and economic
area in the same calendar year that the person has unprocessed timber
originating from Federal lands in the person's possession or under
contract.
(3) No person may purchase unprocessed timber originating from
Federal lands if such person sells or otherwise transfers unprocessed
timber that originates from private lands west of the 100th meridian in
the contiguous 48 States and that requires domestic processing, to a
third party if that third party or successive parties export that
unprocessed private timber. A third party or successive parties who
acquire such unprocessed timber that originates from private lands west
of the 100th meridian in the contiguous 48 States and that requires
domestic processing may not export such timber.
(4) The prohibitions in paragraphs (a) (1)-(3) of this section shall
not apply to specific quantities of grades and species of unprocessed
timber which the Secretary of Agriculture has determined to be surplus
to domestic manufacturing needs.
(b) Exemptions. (1) Pursuant to section 490(c) of the Act (16 U.S.C.
620b), all persons who applied for a sourcing area by December 20, 1990,
in accordance with Sec. 223.190 of this subpart, were exempt from the
prohibitions against substitution, in accordance with Sec. 223.189(a)(1)
of this subpart, until such time that the approving official approved or
disapproved the application.
(2) Pursuant to Section 490(a) of the Act (16 U.S.C. 620b), an
exemption to the prohibition in Sec. 223.189(a)(1)(B) of this subpart is
provided to:
(i) A person with a historic export quota who submitted a
certification in accordance with Sec. 223.189 (c) and (d) of this
subpart; and
(ii) A non-manufacturer who submitted a certification in accordance
with Sec. 223.192 of this subpart.
(3) Pursuant to Sec. 490(c) of the Act (16 U.S.C. 620b), the
prohibitions against direct substitution in Sec. 223.189(a) (1) and (2)
of this subpart do not apply to a person who acquires unprocessed timber
originating from Federal lands within an approved sourcing area, does
not export unprocessed timber originating from private lands within the
approved sourcing area while the approval is in effect, and, if
applicable, received a waiver of the prohibition against exporting
unprocessed timber originating from private lands within the sourcing
area during the preceding 24 months, in accordance with Sec. 223.189 (f)
and (g) of this subpart.
(c) Historic export quota exemption. The prohibition against the
purchase of
[[Page 119]]
Federal timber for a person who has exported unprocessed timber
originating from private lands, within the preceding 24-month period,
shall not apply to a person with a historic export quota approved by the
Secretary and who has been exporting unprocessed private timber in
accordance with the log export and substitution regulations of the
Secretary of Agriculture at 36 CFR part 223, subpart D, in effect before
August 20, 1990, if:
(1) That person certified in writing to the Regional Forester of the
Region administering the historic export quota, on or before November
20, 1990, that the person would cease exporting unprocessed timber
originating from private lands on or before February 20, 1991, and
(2) The exporting ceased in accordance with such certification.
(d) Application for historic export quota exemption. To obtain an
exemption from the prohibition against export within the preceding 24-
month period for purchasing Federal timber based on an approved historic
export quota described in paragraph (c) of this section, a person must
have applied in writing to the applicable Regional Forester on or before
November 20, 1990. The certificate must have been notarized. The
application was required to be on company letterhead and must have
included:
(1) An agreement to retain records of all transactions involving
acquisition and disposition of unprocessed timber from both private and
Federal lands within the area(s) involved in the certification, for a
period of three (3) years beginning November 20, 1990, and to make such
records available for inspection upon the request of the Regional
Forester, or other official to whom such authority has been delegated.
(2) A signed certification which reads as follows:
``I have purchased, under an historic export quota approved by the
Secretary of Agriculture, unprocessed timber originating from Federal
lands located west of the 100th meridian in the contiguous 48 States
during the preceding 24 months in direct substitution for exported
unprocessed timber originating from private lands. I desire to purchase
directly from a Department or agency of the United States, unprocessed
timber originating from Federal lands located in such area of the United
States. I make this certification for the exemption from the prohibition
against export within the preceding 24-month period for purchasing
Federal timber required by the Forest Resources Conservation and
Shortage Relief Act of 1990, (Pub. L. No. 101-382, August 20, 1990, 16
U.S.C. 620, et seq.) (Act). I hereby certify that I will cease all
exporting of such unprocessed private timber from lands west of the
100th meridian in the 48 contiguous States of the United States by
February 20, 1991. I make this certification with full knowledge and
understanding of the requirements of this Act and do fully understand
that failure to cease such exporting as certified will be a violation of
this Act (16 U.S.C. 620d) and the False Statements Act (18 U.S.C. 1001),
and may subject me to the penalties and remedies provided from such
violation.''
(3) The certification must have been signed by the person making
such certification or, in the case of a corporation, by its Chief
Executive Officer.
(e) Indirect substitution prohibition. No person may purchase from
any other person unprocessed timber originating from Federal lands west
of the 100th meridian in the contiguous 48 States if such person would
be prohibited by paragraph (a) of this section from purchasing such
timber directly from a Department or agency of the United States,
pursuant to Sec. 490(b) of the Forest Resources Conservation and
Shortage Relief Act of 1990 (16 U.S.C. 620, et seq.). The prohibition in
this paragraph does not apply to the following:
(1) To the acquisition of western red cedar, which is domestically
processed into finished products.
(2) To a person who acquires unprocessed timber originating from
Federal lands within an approved sourcing area, does not export
unprocessed timber originating from private lands within the approved
sourcing area while the approval is in effect, and, if applicable,
receives a waiver of the prohibition against exporting unprocessed
timber originating from private lands within the sourcing area during
the preceding 24 months in accordance with Sec. 223.189 (f) and (g) of
this subpart.
(3) To the limited amount of unprocessed National Forest System
timber within Washington State that is exempt from the prohibition
against indirect substitution, pursuant to Sec. 223.203.
[[Page 120]]
(f) Waiver within a sourcing area. The prohibitions in
Sec. 223.189(a) (1) and (2) against direct and indirect acquisition of
unprocessed timber originating from Federal lands do not apply if:
(1) A person acquires such timber from within an approved sourcing
area located west of the 100th meridian in the 48 contiguous States;
(2) Has not exported unprocessed timber originating from private
lands located within the approved sourcing area during the preceding 24
months;
(3) Does not export such private timber from within the approved
sourcing area during the period the sourcing area is in effect; and
(4) Does not export such private timber during any calendar year in
the same geographic and economic area that unprocessed timber
originating from Federal lands west of the 100th meridian in the
contiguous 48 States is under contract or in possession, if the sourcing
area is no longer in effect, pursuant to the definition of substitution
in 36 CFR 223.186.
(5) The appropriate Regional Forester could waive, in writing, the
prohibition against export within the preceding 24-month period for any
person who certified in writing, on or before November 20, 1990, that on
or before February 20, 1991, that person would cease exporting
unprocessed timber originating from private lands within the approved
sourcing area for a period of not less than three (3) years. Signatories
of this certificate who received an approved sourcing area, like all
holders of sourcing areas, are subject to the prohibition against
exporting unprocessed timber originating from private lands within the
sourcing area boundaries, pursuant to this paragraph.
(g) Application for waiver within a sourcing area. To obtain a
waiver of the prohibition against export within the preceding 24-month
period for purchasing Federal timber described in paragraph (f) of this
section, a person must have submitted a request for waiver, in writing,
to the Regional Forester of the region in which the manufacturing
facility being sourced is located, which must have been received by the
Regional Forester on or before November 20, 1990, and which must have
been signed by the person making such request or, in the case of a
corporation, by its Chief Executive Officer. The request for waiver must
be notarized and, in the case of a corporation, with its corporate seal
affixed. The request shall be on company letterhead with its corporate
seal affixed and must include:
(1) An agreement to retain records of all transactions involving
acquisition and disposition of unprocessed timber from both private and
Federal lands within the area(s) involved in the waiver request, for a
period of three (3) years beginning November 20, 1990, and to make such
records available for inspection upon the request of the Regional
Forester, or other official to whom such authority has been delegated.
(2) A signed certification statement which reads as follows:
``I have engaged in exporting of unprocessed timber originating from
private land located within the sourcing area for which I am applying. I
desire to purchase directly from a department or agency of the United
States unprocessed timber originating from Federal lands located within
the desired sourcing area. I hereby request waiver of the prohibition
against export within the preceding 24-month period for purchasing
Federal timber required by the forest Resources Conservation and
Shortage Relief Act of 1990 (Pub. L. No. 101-382, August 20, 1990, 16
U.S.C. 620, et seq.) (Act). I hereby certify that I will cease all
exporting of such unprocessed private timber from within the desired
sourcing area by February 20, 1991, and will not resume such exporting
for a period of not less than three (3) years. I make this certification
with full knowledge and understanding of the requirements of this Act
and do fully understand that failure to cease such exporting as
certified will be a violation of Section 492 of this Act (16 U.S.C.
620d) and the False Statements Act (18 U.S.C. 1001), and may subject me
to the penalties and remedies provided for such violation.''
Sec. 223.190 Sourcing area application procedures.
(a) Subject to the restrictions described in Sec. 223.189 of this
subpart and, except as provided in paragraph (b) of this section, a
person who owns or operates a manufacturing facility and who exports
unprocessed timber originating from private lands may apply for a
sourcing area in accordance with
[[Page 121]]
the procedures of this section. However, an owner/operator of a
manufacturing facility who exports unprocessed timber originating from
Federal lands may not possess or acquire unprocessed timber originating
from Federal lands unless the acquisition is within an approved sourcing
area. A person who intends to acquire or become affiliated with a
manufacturing facility that processes Federal timber and who is an
exporter may apply for a sourcing area. Written proof of the intent to
acquire or affiliate must be included in the sourcing area application,
signed by the applicant and the person or, in the case of a corporation,
the Chief Executive Officer, whose company the applicant intends to
acquire or affiliate with. This certification must be on letterhead and
must be notarized. A sourcing area application that the Secretary
determines would be approved will be granted tentative approval pending
final notification by the applicant of acquisition of or affiliation
with the manufacturing facility. The tentative approval of the sourcing
area will lapse unless the acquisition or affiliation occurs within 30
days of the tentative approval of the sourcing area. A sourcing area is
not valid until final approval of the sourcing area. The direct
substitution prohibition did not apply to a person who applied for a
sourcing area on or before December 20, 1990. A request for modification
of an existing sourcing area shall trigger a review pursuant to the
procedures and restrictions in Sec. 223.191(e).
(b) As provided in the Act, a person who has requested an exemption
or waiver of the prohibition against export within the preceding 24-
month period, pursuant to Sec. 223.189 of this subpart, must have
applied for the desired sourcing area on or before December 20, 1990.
(c) Applications. Sourcing area applications shall include:
(1) A map of sufficient scale and detail to clearly show:
(i) The applicant's desired sourcing area boundary. This boundary
will include both the private and Federal lands from which the applicant
intends to acquire unprocessed timber for sourcing its manufacturing
facilities;
(ii) The location of the timber manufacturing facilities owned or
operated by the applicant within the proposed sourcing area where the
person intends to process timber originating from Federal land;
(iii) The location of private lands within and outside the desired
sourcing area where the person has, within the 24 months immediately
preceding the date of the application, acquired unprocessed timber
originating from private land which was exported, sold, traded,
exchanged, or otherwise conveyed to another person for the purpose of
exporting such timber;
(2) A list of other persons with timber manufacturing facilities
located within the same general vicinity as the applicant's facilities;
(3) Any other information the applicant may believe is appropriate
to support approval of the requested sourcing area; and
(4) A statement signed by the person certifying under the penalties
provided in Section 492 of this Act (16 U.S.C. 620d) and the False
Statements Act (18 U.S.C. 1001) that the information provided in support
of the application is true, complete, and accurate to the best of the
applicant's knowledge. The statement shall read as follows:
``I certify under penalties of 16 U.S.C. 620d and 18 U.S.C. 1001,
that the information provided in support of this application, is true,
complete, and accurate to the best of my knowledge concerning my timber
purchasing and export patterns. I certify that the information provided
concerning my timber purchasing and export patterns fully and accurately
reflects, to the best of my knowledge, the boundaries of the sourcing
area for which I am applying. I make this certification with full
knowledge and understanding of the export and substitution restrictions
of the Forest Resources Conservation and Shortage Relief Act of 1990 (16
U.S.C. 620, et seq.) (Act) and its implementing regulations. I certify
that I have not exported unprocessed timber originating from private
lands within the boundaries of the sourcing area that is the subject of
this application in the previous 24 months. I fully understand that, if
this application is approved, exporting unprocessed private timber
originating from within the approved sourcing area will be a violation
of this Act (16 U.S.C. 620, et seq.) its implementing regulations, and
the False Statements Act (18 U.S.C. 1001), and may subject me to the
penalties and remedies provided for such violation.''
[[Page 122]]
(d) Confidential information. Applications are not considered
confidential. However, if a person does submit confidential information
as part of an application, the information should be marked
confidential. Information so marked will be afforded the rights and
protection provided under the Freedom of Information Act.
(e) Where to submit the application. A sourcing area applicant shall
send the application to the Office of Administrative Law Judges and
shall, simultaneously, send a copy of the sourcing area application to
the Forest Service Regional Forester of the region in which the
manufacturing facility being sourced is located. Where the sourcing area
application will cover purchases from more than one agency, application
is to be made to the agency from which the applicant expects to purchase
the preponderance of its Federal timber. The sourcing area applicant
must also send a complete copy of the application to each agency
concerned. The lead agency shall make the decision in consultation with,
and upon co-signature of, the other agencies concerned.
(f) Signatory procedures. Sourcing area applications must be signed
by the person making the request, or in the case of a corporation, by
its Chief Executive Officer, and must be notarized. The application
shall be on company letterhead.
(g) The sourcing area application and review process will be
conducted pursuant to the Rules of Practice Governing the Adjudication
of Sourcing Area Applications and Formal Review of Sourcing Areas
Pursuant to the Forest Resources Conservation and Shortage Relief Act of
1990 (16 U.S.C. 620, et seq.), found at 7 CFR part 1, subpart M.
(h) A final decision on a sourcing area application or a formal
sourcing area review will be issued within four (4) months of the
receipt of the application or initiation of the review.
(i) The following criteria must be met for sourcing area approval:
(1) The Administrative Law Judge, or, on appeal, the Judicial
Officer must find that the proposed sourcing area is geographically and
economically separate from any area that the applicant harvests or
expects to harvest for export any unprocessed timber originating from
private lands. In making such a finding, the Administrative Law Judge,
or, on appeal, the Judicial Officer shall consider the timber purchasing
patterns of the applicant on private and Federal lands equally with
those of other persons in the same local vicinity and the relative
similarity of such purchasing patterns.
(2) The ``same local vicinity'' will normally be manufacturing
facilities located within 30 miles of the community where the
applicant's manufacturing facility is located, but may include more
distant communities if manufacturing facilities in those communities
depend on the same source of timber and have similar purchasing
patterns.
(3) The relative similarity of purchasing patterns of other mills
shall be determined by considering the location and similarity of
unprocessed timber being acquired by those facilities.
(4) Lines defining the geographic area shall be based on major
natural and cultural features, including, but not limited to, prominent
ridge systems, main roads or highways, rivers, political subdivisions,
and not characterized by random lines.
(j) Comments. Persons may submit comments on sourcing area
applications pursuant to the Rules of Practice Governing the
Adjudication of Sourcing Area Applications and Formal Review of Sourcing
Areas Pursuant to the Forest Resources Conservation and Shortage Relief
Act of 1990 (16 U.S.C. 620, et seq.), found at 7 CFR part 1, subpart M.
Persons submitting a comment must certify at the end of the comment, but
before the signature, to the following: ``I certify that the information
provided by me is true and accurate, to the best of my knowledge, and I
understand that failure to provide true and accurate information could
be violation of the False Statements Act (18 U.S.C. 1001).''
(k) Transporting or causing to be transported unprocessed private
timber from outside of a sourcing area into a sourcing area by the
holder of the sourcing area is prohibited as a violation of the sourcing
area boundary. Such violation will cause a review of the sourcing area,
and could subject
[[Page 123]]
the sourcing area holder to the penalties and remedies for violations of
the Forest Resources Conservation and Shortage Relief Act of 1990, 16
U.S.C. 620, et seq., and its implementing regulations.
(l) A person with an approved sourcing area may relinquish the
sourcing area at any time provided the person certifies to the
following:
``I am relinquishing the approved sourcing area, described in the
Secretary's determination in FSAA -------- on --------, 19----. I
understand that I may not export unprocessed timber originating from
private lands west of the 100th meridian in the contiguous 48 States
during the fiscal year in which I have unprocessed timber originating
from Federal lands west of the 100th meridian in the contiguous 48
States in my possession or under contract, pursuant to the prohibition
against substitution in the Forest Resources Conservation and Shortage
Relief Act of 1990 (16 U.S.C. 620, et seq.) (``Act'') and its
implementing regulations. I also understand that I may not purchase
unprocessed timber originating from Federal lands west of the 100th
meridian in the contiguous 48 States within 24 months of having exported
unprocessed timber originating from private lands west of the 100th
meridian in the contiguous 48 States, pursuant to the prohibitions
against substitution in the Act and its implementing regulations. I make
this certification with full knowledge and understanding of the Act and
its implementing regulations and do fully understand that exporting
unprocessed timber originating from private lands west of the 100th
meridian in the contiguous 48 States during a fiscal year in which I
have unprocessed timber originating from Federal lands west of the 100th
meridian in the contiguous 48 States in possession or under contract, or
purchasing unprocessed timber originating from Federal lands west of the
100th meridian in the contiguous 48 States within 24 months of having
exported unprocessed timber originating from private lands west of the
100th meridian in the contiguous 48 States is a violation of the
substitution provisions of the Act and the False Statements Act (18
U.S.C. 1001), and may subject me to the penalties and remedies provided
for such violation.''
The certificate must be signed by the person making such
certification or, in the case of a corporation, by its Chief Executive
Officer; must be on company letterhead; and must be notarized.
(m) A sourcing area is in effect until it is relinquished by the
sourcing area holder, or is disapproved upon review of the sourcing
area.
Sec. 223.191 Sourcing area disapproval and review procedures.
(a) Notwithstanding any other provision of law, an applicant whose
sourcing area application was submitted by December 20, 1990, and was
disapproved could either phase out of purchasing Federal timber or phase
out of exporting unprocessed timber originating from private lands
within the sourcing area that would have been approved, as follows:
(1) Phase-out of Federal timber purchasing. The applicant could
purchase, in the 9-month period after receiving the application
disapproval, unprocessed timber originating from Federal lands in the
disapproved sourcing area, in an amount not to exceed 75 percent of the
annual average of such person's purchases of unprocessed Federal timber
in such area during the 5 full fiscal years immediately prior to the
date of submission of the application. In the 6-month period immediately
following the 9-month period, such person could purchase not more than
25 percent of such annual average, after which time the prohibitions
against direct substitution, set forth in Sec. 223.189 of this subpart,
shall apply; or
(2) Phase-out of private timber exporting. The applicant could
continue to purchase unprocessed timber originating from Federal lands
within the disapproved sourcing area without being subject to the phase-
out of Federal timber purchasing procedures described in paragraph (a)
of this section, if the following requirements were met:
(i) The applicant certified to the Regional Forester or the
approving official to whom such authority has been delegated, within 90
days after receiving the disapproval decision, as follows:
(A) An applicant that has exported unprocessed timber originating
from private lands from the geographic area that would have been
approved provided a signed certification that reads as follows:
``I have engaged in the exporting of unprocessed private timber
originating from private lands located within the geographic area the
approving official would have approved as a sourcing area for my
manufacturing facility. I desire to continue purchasing unprocessed
Federal timber from
[[Page 124]]
within such area. I hereby certify that I will cease all exporting of
unprocessed timber from private lands located within the area that would
have been approved by [the applicant shall insert date 15 months from
date of receipt of the disapproval decision]. I agree to retain records
of all transactions involving acquisition and disposition of unprocessed
timber from both private and Federal lands within the area involved in
the certification, for a period of three (3) years beginning on the date
of receipt of the disapproval notification, and to make such records
available for inspection upon the request of the Regional Forester, or
other official to whom such authority has been delegated. I make this
certification with full knowledge and understanding of the requirements
of the Forest Resources Conservation and Shortage Relief Act of 1990 (16
U.S.C. 620, et seq.) (Act) and do fully understand that failure to cease
such exporting as certified will be a violation of the Act and may
subject me to the penalties and remedies for such violation. Further, I
fully understand that such violation may subject me to the penalty of
perjury pursuant to the False Statements Act (18 U.S.C. 1001). I certify
that the information in this certificate is true, complete, and accurate
to the best of my knowledge and belief.'';
or,
(B) An applicant who has not exported unprocessed timber originating
from private lands from the geographic area that the Secretary would
have approved provided a signed certification that reads as follows:
``I have not exported timber originating from private lands within
both the sourcing area that the Secretary would have approved and the
disapproved sourcing area in the past 24 months, pursuant to the Forest
Resources Conservation and Shortage Relief Act of 1990 (16 U.S.C. 620,
et seq.), and I am accepting the area that the Secretary would have
approved as my sourcing area. I certify that the information in this
certificate is true, complete, and accurate to the best of my knowledge
and belief.''
(ii) Each certification statement set forth in paragraph (a)(2)(i)
of this section must have been signed by the person making such
certification or, in the case of a corporation, by its Chief Executive
Officer; must have been on company letterhead; must have been notarized;
and must have had a corporate seal attached.
(iii) The person signing such certification set forth in paragraph
(a)(2)(i)(A) of this section must have provided to the Regional Forester
the annual volume of timber exported by that person during the five (5)
full fiscal years immediately preceding submission of the application,
originating from private lands in the geographic area for which the
application would have been approved.
(iv) When the applicant submitted the certificate, the area the
Secretary would have approved, as shown on the sourcing area map
provided by the Secretary, became an approved sourcing area. If the
certificate was not submitted, the sourcing area that would have been
approved did not become an approved sourcing area.
(3) The phase-out of Federal timber purchasing and the phase-out of
private timber exporting procedures provided by paragraphs (a)(1) and
(a)(2) of this section do not apply to persons submitting sourcing area
applications after December 20, 1990, or to persons requesting review of
disapproved sourcing areas.
(b) Limits on purchases and exports. (1) During the 15-month period
following disapproval of a sourcing area, a person who elects to phase-
out of private timber exporting as described in paragraph (a)(2) of this
section, may not:
(i) Purchase more than 125 percent of the person's annual average
purchases of unprocessed timber originating from Federal lands within
the person's disapproved sourcing area during the five (5) full fiscal
years immediately prior to submission of the application; and,
(ii) Export unprocessed timber originating from private lands in the
geographic area determined by the approving official for which the
application would have been approved, in amounts that exceed 125 percent
of the annual average of that person's exports of unprocessed timber
from such private land during the five (5) full years immediately prior
to submission of the application.
(2) At the conclusion of the 15-month export phase-out period, the
prohibition against exporting private timber originating from within the
area shall be in full force and effect as long as the sourcing area
remains approved, pursuant to this subpart F of this part 223.
(c) Presentation of map to applicant whose sourcing area is
disapproved. The
[[Page 125]]
area determined by the deciding official that would have been approved
shall be drawn on a map and presented to the applicant by the deciding
official with the notice of disapproval of the application.
(d) Effect of prior certification to cease exporting. An applicant's
previous certification to cease exporting beginning February 20, 1991,
for a period of three (3) years from within the disapproved sourcing
area pursuant to paragraphs (f) and (g) in Sec. 223.189 of this subpart
shall remain in full force and effect for persons with approved and
disapproved sourcing areas.
(e) Review process and frequency. (1) Approved sourcing areas shall
be reviewed not less often than every five (5) years. A tentative date
for a review shall be included in the Administrative Law Judge's, or, on
appeal, the Judicial Officer's determination or stated in writing by the
Regional Forester following the determination. At least 60 days prior to
the tentative review date, the Regional Forester or other such reviewing
official shall notify the person holding the sourcing area of the
pending review, publish notice of such review in newspapers of general
circulation within the sourcing area, and invite comments, to be
received no later than 30 days from the date of the notice, from all
interested persons, including the person holding the sourcing area. For
10 working days following the comment period, any person submitting a
written comment and the person with the sourcing area may review the
comments. If there is disagreement among the persons who submitted
written comments regarding the proper sourcing area, the reviewing
official shall convene an informal meeting convenient to the persons
that all interested persons may attend. If an agreement cannot be
reached among the persons, formal administrative adjudication shall
occur. The Administrative Law Judge, or, on appeal, the Judicial Officer
shall, on the record and after opportunity for a hearing, approve or
disapprove the sourcing area being reviewed, pursuant to the Rules of
Practice Governing the Adjudication of Sourcing Area Applications and
Formal Review of Sourcing Areas Pursuant to the Forest Resources
Conservation and Shortage Relief Act of 1990 (16 U.S.C. 620, et seq.),
found at 7 CFR part 1, subpart M.
(2) Disapproved sourcing areas shall be reviewed using the process
described in paragraph (e)(1) of this section upon resubmission of an
application, provided the applicant has accepted the area the Secretary
would have approved as a sourcing area pursuant to paragraph (a)(2) of
this section.
(3) The Department reserves the right to schedule a review, at the
request of the Forest Service or the person holding the sourcing area,
at any time prior to the scheduled tentative review date, with 60 days
notice.
(4) Sourcing areas being reviewed shall continue in full force and
effect pending the final review determination.
(f) Reporting and record keeping procedures. The reporting and
record keeping procedures in this section constitute information
collection requirements as defined in 5 CFR part 1320. These
requirements have been approved by the Office of Management and Budget
and assigned clearance number 0596-0115.
Sec. 223.192 Procedures for a non-manufacturer.
(a) Persons who do not own or operate a manufacturing facility (non-
manufacturer) are not eligible to apply for or be granted a sourcing
area.
(b) The prohibition against the purchase of Federal timber for a
person who has exported unprocessed timber originating from private
lands within the preceding 24-month period shall not apply, if the
person certified in writing to the Regional Forester of the region(s) in
which the person purchases National Forest System timber by November 20,
1990, that the person would cease exporting unprocessed timber
originating from private lands by February 20, 1991, for a period of
three (3) years, and the exporting did cease in accordance with such
certification.
(c) To obtain an exemption from the prohibition against export
within the preceding 24-month period for purchasing Federal timber
described in Sec. 223.189 (a) and (b) of this subpart, a person must
have applied in writing to the applicable Regional Forester on or
[[Page 126]]
before November 20, 1990. The application was required to be on company
letterhead and, in the case of a corporation, with its corporate seal
affixed, and must have included:
(1) An agreement to retain records of all transactions involving
acquisition and disposition of unprocessed timber from both private and
Federal lands within the area(s) involved in the certification, for a
period of three (3) years beginning November 20, 1990, and to make such
records available for inspection upon the request of the Regional
Forester, or other official to whom such authority has been delegated.
(2) A signed certification which reads as follows:
``I have engaged in the exporting of unprocessed timber originating
from private lands located west of the 100th meridian in the contiguous
48 States during the preceding 24 months. I desire to purchase directly
from a department or agency of the United States, unprocessed timber
originating from Federal lands located in such area of the United
States. I make this certification for the exemption from the prohibition
against export within the preceding 24-month period for purchasing
Federal timber required by the Forest Resources Conservation and
Shortage Relief Act of 1990 (Pub. L. No. 101-382, August 20, 1990, 16
U.S.C. 620, et seq.) (Act). I hereby certify that I will cease all
exporting of such unprocessed private timber from west of the 100th
meridian in the contiguous 48 States of the United States by February
20, 1991. I make this certification with full knowledge and
understanding of the requirements of this Act and do fully understand
that failure to cease such exporting as certified will be a violation of
this Act (16 U.S.C. 620d) and the False Statements Act (18 U.S.C. 1001),
and may subject me to the penalties and remedies provided for such
violation.''
(3) The certification must have been signed by the person making
such certification or, in the case of a corporation, by its Chief
Executive Officer. The certificate must have been notarized.
Sec. 223.193 Procedures for reporting acquisition and disposition of unprocessed Federal timber.
(a) Annual report. Each person who directly or indirectly acquires
or possesses unprocessed timber originating from National Forest System
lands located west of the 100th meridian in the 48 contiguous States
shall submit an annual report on a form provided by the Forest Service
on the acquisition and disposition of such timber. Such report shall be
on a calendar year basis and shall be sent to the Regional Forester, or
other official to whom such authority is delegated, who administers the
National Forest System lands from which the majority of timber
originated, not later than March 1 of each year, beginning March 1,
1997. The form shall include:
(1) A summary for the calendar year listing, by company, from whom
the timber was acquired; the date of acquisition; the origin of National
Forest System timber acquired; the sale name; the contract number(s);
brand registration number(s) of brands registered by a state or agency
or a pictorial representation of sale brand(s) if brands not registered
by a state or agency; to whom the timber was sold, transferred or
otherwise conveyed to another person; and the date of disposal;
(2) An accounting by origin, in net board feet Scribner or cubic
feet, of the volume of National Forest System timber acquired, the
volume domestically processed by the purchaser or affiliates, and the
volume sold or transferred for domestic processing;
(3) The volume by species of National Forest System surplus species
timber acquired and exported or sold for export;
(4) The volume (MBF Net Scribner or cubic) of the unprocessed timber
originating from private lands west of the 100th meridian in the
contiguous 48 States that was exported, and
(5) A certificate stating that:
(i) The certifier has read and understands the form;
(ii) The certifier is eligible to acquire unprocessed timber
originating from Federal lands in accordance with the Act;
(iii) The information supplied is a true, accurate, current, and
complete statement of the receipt and disposition of unprocessed timber
originating from National Forest System lands to the best of the
certifier's knowledge;
(iv) The certifier agrees to retain a copy of the form and records
of all
[[Page 127]]
transactions involving unprocessed Federal timber and to make such
records available for inspection upon request of an authorized official
of the United States for three (3) years from the date of disposal by
manufacture or transfer; and
(v) The certifier acknowledges that failure to report completely and
accurately the receipt and disposition of timber will subject the
certifier to the penalties and remedies in the Act and the penalties in
the False Statements Act (18 U.S.C. 1001).
(6) The information provided is presumed to be not confidential,
unless specifically marked confidential, in which case confidentiality
will be evaluated under applicable laws.
(b) Transfer of unprocessed National Forest System timber. Each
person who transfers to another person unprocessed timber originating
from National Forest System lands shall undertake the following:
(1) Before completing such transfer, provide to such other person a
written notice of origin, species, estimated volume or actual volume if
the transfer is based on log scale volume, from whom acquired, sale
name, contract number, and log brand of unprocessed National Forest
System timber being transferred on a form provided by the Forest
Service;
(2) Before completing such transfer, certify that the information
supplied is a true, accurate, current, and complete statement to the
best of his or her knowledge. As part of the certification, the
certifier shall:
(i) Agree to send a signed copy of the form required in paragraph
(b)(1) of this section within 10 calendar days of such transfer, which
shall include all notices, acknowledgments, and agreements, required by
this section, to the appropriate Regional Forester who administers the
National Forest System lands from which this timber originates, or other
official to whom such authority is delegated, and to retain a copy for
the certifier's records;
(ii) Acknowledge that the transfer of unprocessed Federal timber to
a person for export or to a person who may not purchase timber directly
from the Federal government is a violation of the Act;
(iii) Agree to obtain full completed notice of origin form from the
transferee;
(iv) Agree to retain records of all transactions involving
unprocessed Federal timber for a period of three (3) years from the date
of transfer and to make all records involving log transactions available
to an appropriate Federal official upon request. Records include all
forms and certificates required by these regulations;
(v) Acknowledge that failure to report completely and accurately the
receipt and disposition and/or transfer of unprocessed National Forest
System timber will subject the certifier to the penalties and remedies
in the Act (16 U.S.C. 620, et seq.) and the penalties in the False
Statements Act (18 U.S.C. 1001); and
(vi) Certify that he or she has read and understands the form.
(3) Before completing such transfer, obtain from the person
acquiring such timber on the same form provided by the Forest Service.
(i) An agreement to retain for a period of three (3) years from date
of transfer the records of all sales, exchanges, or other disposition of
such timber, and make such records available for inspection upon the
request of an authorized official of the United States;
(ii) An agreement to allow Federal officials access to log storage
and processing facilities for the purpose of monitoring compliance with
the Act and implementing regulations;
(iii) An agreement to maintain and/or replace all brands and paint
identifying the Federal origin of each piece of unprocessed Federal
timber as described in Sec. 223.195;
(iv) An agreement to submit, by March 1, the annual report required
in Sec. 223.193(a);
(v) An agreement to submit a completed notice of origin form for the
Federal timber received and to receive an agreement to comply with the
Act and regulations in such form if the person transfers any or all of
the timber listed in the document;
(vi) An acknowledgment of the prohibition against acquiring
unprocessed Federal timber from a person who is prohibited by the Act
from purchasing
[[Page 128]]
the timber directly from the United States;
(vii) An acknowledgment of the prohibitions against exporting
unprocessed Federal timber and against acquiring such timber in
substitution for unprocessed private timber west of the 100th meridian
in the contiguous 48 States;
(viii) A declaration of its business size and manufacturing
classification, as defined under the Small Business Administration
Regulations at 13 CFR part 121; and
(ix) A certificate stating that the certifier has read and
understands the form; is eligible to acquire unprocessed timber
originating from Federal lands in accordance with the Act; has been
notified that some or all of the unprocessed timber included in this
transfer is subject to export and substitution restrictions; supplied
information is a true, accurate, current, and complete statement of the
receipt and disposition of the unprocessed timber originating from
National Forest System lands to the best of the certifier's knowledge;
and acknowledges that failure to report completely and accurately the
transfer of unprocessed Federal timber will subject the certifier to the
penalties and remedies in the Act (16 U.S.C. 620, et seq.) and the
penalties in the False Statements Act (18 U.S.C. 1001). The information
provided is presumed to be not confidential, unless specifically marked
confidential, in which case confidentiality will be evaluated under
applicable laws.
(4) Except as otherwise provided by law, a person who transfers
unprocessed Federal timber to another person and meets all notice,
certification, acknowledgment, reporting and record keeping requirements
contained in this section shall be relieved from further liability for
such timber pursuant to the Act.
Sec. 223.194 Procedures for reporting the acquisition and disposition of unprocessed private timber.
(a) Notice of domestic processing requirement. Each person who
acquires unprocessed timber originating from Federal lands located west
of the 100th meridian in the 48 contiguous States, and who also
possesses or acquires unprocessed timber from private lands located west
of the 100th meridian in the 48 contiguous States that requires domestic
processing, including unprocessed timber originating within an approved
sourcing area, and in turn sells, trades or otherwise conveys such
unprocessed private timber to another person, must include a statement
notifying the person acquiring the unprocessed private timber that such
private timber must be domestically processed. Unprocessed timber
originating from private lands located outside of a sourcing area may be
transferred by the holder of the sourcing area, or by persons acquiring
such unprocessed timber who are eligible to export such timber, without
including such a statement.
(b) The notification statement, pursuant to paragraph (a) of this
section, shall accompany each transaction involving unprocessed private
timber that requires domestic processing. The statement shall be on a
form provided by the Forest Service or a legible copy of such form.
(1) On such form, described in paragraph (b) of this section, the
person transferring the timber shall:
(i) Give notice to the person receiving the unprocessed private
timber that exporting that timber would violate the Act and its
implementing regulations;
(ii) Give notice to the person receiving the unprocessed private
timber that the timber has been identified for domestic manufacturing by
a spot of highway yellow paint on each log end that must be retained on
the timber;
(iii) Agree to send a signed copy of the transaction statement to
the Regional Forester within 10 calendar days of the transaction;
(iv) Agree to retain records of all transactions involving the
acquisition and disposition of unprocessed timber for a period of three
(3) years from the date of disposal by manufacturing or transfer and to
make such records available for inspection upon the request of an
authorized official of the United States;
(v) Acknowledge that failure to completely and accurately report and
identify unprocessed timber is a violation of the Act, and regulations
issued
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under the Act, and the False Statements Act (18 U.S.C. 1001); and
(vi) Certify that the form has been read and understood.
(2) On such form, described in paragraph (b), the person acquiring
the timber shall:
(i) Acknowledge receipt of the notice of requirement to domestically
process timber originating from private land;
(ii) Certify that a statement pursuant to paragraph (b)(1) will be
included in any subsequent transaction documents;
(iii) Agree to maintain yellow paint markings on each log end until
the timber is domestically processed or transferred;
(iv) Agree to retain records of all transactions involving the
acquisition and disposition of unprocessed timber for a period of three
(3) years from the date of disposal by manufacturing or transfer and to
make such records available for inspection upon the request of an
authorized official of the United States;
(v) Agree to send a signed copy of the transaction statement to the
Regional Forester within 10 calendar days of the transaction;
(vi) Agree to allow authorized officials access to log storage and
processing facilities for the purpose of monitoring compliance with the
Act and its implementing regulations;
(vii) Acknowledge that failure to comply with the domestic
manufacturing requirements for unprocessed timber or failure to notify
subsequent persons of this requirement may subject the certifier to the
civil penalties and administrative remedies provided in the Act and
regulations issued under the Act;
(viii) Acknowledge that failure to completely and accurately report
and identify unprocessed timber is a violation of the Act, and
regulations issued under the Act, and the False Statements Act (18
U.S.C. 1001); and
(ix) Certify that the form has been read and understood.
(c) Except as otherwise provided by law, a person who transfers
unprocessed private timber to another person and meets all notice,
certification, acknowledgement, distribution, reporting and record
keeping requirements contained in this section shall be relieved from
further liability for such timber with regard to the export and
substitution restrictions pursuant to the Act.
Sec. 223.195 Procedures for identifying and marking unprocessed timber.
(a) Highway yellow paint. The use of highway yellow paint on
unprocessed logs west of the 100th meridian in the contiguous 48 States
shall be reserved for identifying logs requiring domestic manufacturing.
(b) Preserving identification. All identifying marks placed on an
unprocessed log to identify the National Forest System origin of that
log and/or to identify the log as requiring domestic processing shall be
retained on the log until the log is domestically processed. If the
identifying marks are lost, removed, or become unreadable, they shall be
replaced. If the log is cut into two or more segments, each segment
shall be identified in the same manner as the original log.
(1) A generic log hammer brand, known as a ``catch brand'', used to
identify ownership, may be used to replace lost, removed, unreadable or
otherwise missing brands where such use is authorized by the Regional
Forester and approved by the Contracting Officer. Use of such a catch
brand on a log or log segment will signify Federal origin.
(2) The requirement to preserve identification of log pieces shall
not apply to logs cut into two or more segments as a part of the mill
in-feed process immediately before processing. Log segments that are
returned to or placed in storage must be marked on both ends with yellow
paint.
(c) National Forest System logs. Except as otherwise provided in
this subsection, all unprocessed logs originating from National Forest
System timber sales west of the 100th meridian in the contiguous 48
States shall, before being removed from the timber sale area, be marked
on each end as follows:
(1) Painted on each end with a spot of highway yellow paint not less
than three square inches in size; and,
(2) Branded on each end with a hammer brand approved for use by the
Forest Supervisor of the National Forest
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from which the logs originate. The brand pattern may not be used to mark
logs from any other source for a period of 24 months after all logs have
been removed from the sale area and until such brand pattern is released
in writing by the Forest Supervisor.
(d) Private logs. All unprocessed logs originating from private
lands west of the 100th meridian in the contiguous 48 States that
require domestic manufacturing pursuant to Sec. 223.194 of this subpart,
shall be painted on each end with a spot of highway yellow paint not
less than three (3) square inches in size before removal from the
harvest area. If private logs are acquired by a person who may not
export such logs, the logs must be marked by the person acquiring the
logs at the time of the acquisition.
(e) Waiver of painting requirements. The log painting requirements
pursuant to paragraphs (c)(1) and (d) of this section may be waived if
the Chief of the Forest Service determines that alternate methods for
identifying logs required to be domestically processed are equal to or
better than the procedures required herein.
(f) Waiver of branding requirements. Regional Foresters may waive
the branding requirements pursuant to paragraph (c)(2) of this section
as follows:
(1) Regions 1, 2, 3, and 4. On an individual timber sale basis, all
or a portion of the branding requirements pursuant to paragraph (c)(2)
of this section may be waived, if:
(i) Unprocessed logs from any origin are not known to have been
exported by any person from the person's area of operations within the
previous 5; years.
(ii) The person certifies as follows:
``I hereby request waiver of the requirements to brand each end of
individual logs originating from the -------- timber sale, Forest
Service contract number -------- pursuant to 36 CFR 223.195. I certify
that I have not exported or sold for export unprocessed timber from
private lands within my area of operations in five years. I certify that
I understand, that if granted, the waiver applies only to unprocessed
logs being processed within my area of operations. I certify that any
unprocessed logs to which this waiver applies that are transferred, or
sold for transfer, outside my area of operations will be branded on both
ends in full compliance with 36 CFR 223.195. I make this certification
with full knowledge and understanding of the requirement of the Forest
Resources Conservation and Shortage Relief Act of 1990 (16 U.S.C. 620,
et seq.) (Act) and its implementing regulations at 36 CFR part 223. I
fully understand that failure to abide by the terms of the waiver will
be a violation of this Act (16 U.S.C. 620, et seq.) and the False
Statements Act (18 U.S.C. 1001) and may subject me to the penalties and
remedies provided for such violation.'' ;
and,
(iii) The person otherwise complies with the regulations relating to
transfers of logs between persons.
(iv) If the Regional Forester determines that unprocessed logs from
my origin are being exported, or are known to have been exported within
the previous 5 years, by any person from the person's area of
operations, the Regional Forester shall revoke the waiver.
(2) Regions 5 and 6. On an individual timber sale basis, the
branding requirement pursuant to paragraph (c)(2) of this section may be
waived for logs ten (10) inches or less in diameter inside bark on the
large end may be waived if:
(i) One end of each log is branded;
(ii) The person certifies as follows:
``I hereby request waiver of the requirement to brand each end of
individual logs ten (10) inches or less in diameter inside bark on the
large end, originating from the -------- timber sale, U.S. contract
number -------- pursuant to 36 CFR 223.195. I certify that I understand,
if granted, that the waiver applies only to unprocessed logs being
processed at --------, and further certify that any and all unprocessed
logs to which waiver would apply that are transferred, or sold for
transfer, will be branded on both ends in full compliance 36 CFR
223.195. I make this certification with full knowledge and understanding
of the requirements of the Forest Resources Conservation and Shortage
Relief Act of 1990 (Pub. L. No. 101-382, August 20, 1990; 16 U.S.C. 620,
et seq.) (Act) and its implementing regulations at 36 CFR Part 223. I
fully understand that failure to abide by the terms of the waiver will
be a violation of this Act (16 U.S.C. 620, et seq.) and the False
Statements Act (18 U.S.C. 1001) and may subject me to the penalties and
remedies provided for such violation.'';
and,
(iii) The purchaser otherwise complies with the regulations relating
to transfers of logs between persons.
[[Page 131]]
(iv) If the Regional Forester determines that logs ten (10) inches
or less in diameter inside bark on the large end are being exported in
the Region, the Regional Forester shall revoke the waiver.
(3) The Chief of the Forest Service may authorize the testing of
alternative methods of branding for consideration in future amendment of
these regulations. Such alternative methods and logs marked under those
methods shall be closely monitored.
Sec. 223.196 Civil penalties for violation
(a) Exporting Federal timber. If the Secretary of Agriculture finds,
on the record and after providing an opportunity for a hearing, that a
person, with willful disregard for the prohibition in the Act exporting
unprocessed Federal timber, exported or caused to be exported
unprocessed timber originating from Federal lands in violation of the
Act, the Secretary may assess against such person a civil penalty of not
more than $500,000 for each violation, or 3 times the gross value of the
unprocessed timber involved in the violation, whichever amount is
greater.
(b) Other violations. If the Secretary of Agriculture finds, on the
record and after providing an opportunity for a hearing, that a person
has violated any provision of the Act, or any regulation issued under
the Act relating to National Forest System lands, even though that the
violation may not have caused the export of unprocessed Federal timber
in violation of such Act, the Secretary may:
(1) Assess against such person a civil penalty of not more than
$500,000, if the Secretary determines that the person committed such
violation willfully;
(2) Assess against such person a civil penalty of not more than
$75,000 for each violation, if the Secretary determines that the person
committeed such violation in disregard of such provision or regulation;
or
(3) Assess against such person a civil penalty of not more than
$50,000 for each violation, if the Secretary determines that the person
should have known that the action constituted a violation.
(c) Penalties not exclusive and judicial review. A penalty assessed
under paragraph (a) or (b) of this section shall not be exclusive of any
other penalty provided by law, and shall be subject to review in an
appropriate United States district court.
Sec. 223.197 Civil penalty assessment procedures.
Adjudicatory procedures for hearing alleged violations of this Act
and its implementing regulations and assessing penalties shall be
conducted under the rules of practice governing formal adjudicatory
proceedings instituted by the Secretary. Such procedures are found at 7
CFR 1.130, et seq.
Sec. 223.198 Administrative remedies.
In addition to possible debarment action provided under subpart C of
this part, the Chief of the Forest Service, or other official to whom
such authority is delegated, may cancel any timber sale contract entered
into with a person found to have violated the Act or regulations issued
under the Act. Such a finding shall constitute a serious violation of
contract terms pursuant to Sec. 223.116(a)(1) of this part.
Sec. 223.199 Procedures for cooperating with other agencies.
The Regional Foresters may enter into agreements to cooperate with
the Department of the Interior, the Department of Defense, and other
Federal, State and local agencies for monitoring, surveillance and
enforcing the Act.
Sec. 223.200 Determinations of surplus species.
(a) Determinations that specific quantities of grades and species
are surplus to domestic manufacturing needs and withdrawals of such
determinations shall be made in accordance with title 5, United States
Code, section 553.
(b) Review of a determination shall be made at least once in every
3-year period. Notice of such review shall be published in the Federal
Register. The public shall have no less than 30 days to submit comments
on the review.
(c) Alaska yellow cedar and Port Orford cedar, which the Secretary
of
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Agriculture found to be surplus to domestic processing needs pursuant to
36 CFR 223.163, the rules in effect before August 20, 1990, shall
continue in that status until new determinations are published.
Sec. 223.201 Limitations on unprocessed timber harvested in Alaska.
Unprocessed timber from National Forest System lands in Alaska may
not be exported from the United States or shipped to other States
without prior approval of the Regional Forester. This requirement is
necessary to ensure the development and continued existence of adequate
wood processing capacity in Alaska for the sustained utilization of
timber from the National Forests which are geographically isolated from
other processing facilities. In determining whether consent will be
given for the export of timber, consideration will be given to, among
other things, whether such export will:
(a) Permit more complete utilization on areas being logged primarily
for local manufacture,
(b) Prevent loss or serious deterioration of logs unsalable locally
because of an unforeseen loss of market,
(c) Permit the salvage of timber damaged by wind, insects, fire or
other catastrophe,
(d) Bring into use a minor species of little importance to local
industrial development, or
(e) Provide material required to meet urgent and unusual needs of
the Nation. (16 U.S.C. 472a; 16 U.S.C. 551; 16 U.S.C. 616)
Sec. 223.202 Information requirements.
(a) The procedures in Sec. Sec. 223.189 and 223.192, and some of the
procedures in Sec. 223.190 were approved by the Office of Management and
Budget (OMB) and assigned Control Number 0596-0114 upon issuance of the
interim rule. Control Number 0596-0114 has been reapproved by OMB for
use through May 31, 1997. OMB approved the information collection
requirements in Sec. Sec. 223.191 and 223.203 for use through August 31,
1995, and assigned them Control Number 0596-0115. OMB approved the
information collection requirements in Sec. Sec. 223.48 and 223.87 for
use through March 31, 1997 and assigned them Control Number 0596-0021;
the information collection requirements in Sec. Sec. 223.48 and 223.87
have been revised. OMB Control Numbers 0596-0114, 0596-0115, and 0596-
0021 have been consolidated under OMB Control Number 0596-0114.
(b) The application and reporting procedures in Sec. Sec. 223.187,
223.193, 223.194, 223.195, and some of the procedures in Sec. 223.190 of
this final rule contain new record keeping and reporting requirements as
defined in 5 CFR part 1320 and, therefore, impose additional paperwork
burdens on the affected public. The Office of Management and Budget
(OMB) has approved these requirements, and assigned them Control Number
0596-0114.
Sec. 223.203 Indirect substitution exception for National Forest System timber from within Washington State.
(a) Exception limits. A limited amount of unprocessed National
Forest System timber originating from within Washington State could have
been acquired by a person otherwise covered by the prohibition against
indirect substitution, pursuant to Sec. 490(b) of the Act and
Sec. 223.189(e) of this subpart.
(1) The amount of such unprocessed timber was limited to whichever
is less:
(i) The higher of the applicant's actual purchase receipts for
unprocessed timber originating from National Forest System lands within
Washington State or the Department's records, during fiscal years 1988,
1989, and 1990, divided by 3; or
(ii) 15 million board feet.
(2) Such limit shall not exceed such person's proportionate share of
50 million board feet.
(b) Application, review and approval process. To obtain a share of
the 50 million board feet exempted from the prohibition against indirect
substitution in section 490(b) of the Act, a person must have submitted
an application. Applications were required to include at least the
following:
(1) The amount of volume exception being requested, in thousand
board feet (MBF);
(2) A signed certification that reads as follows:
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``I certify that, except for an approved share of unprocessed
Federal timber, in accordance with 36 CFR 223.203, the prohibition
contained in section 490(b) of the Act (16 U.S.C. 620b) applies to me. I
have exported unprocessed timber originating from private lands from
west of the 100th meridian in the 48 contiguous States and have acquired
unprocessed timber from National Forest System lands located within
Washington State in 1988, 1989 and/or 1990. I certify that the
information provided in support of this application is a true, accurate,
current and complete statement, to the best of my knowledge and belief.
I agree to retain records of all transactions involving the acquisition
and disposition of unprocessed timber from Federal lands within the area
involved in this application for a period of 3 years beginning on the
date the application is approved, and to make such records available for
inspection upon the request of the Regional Forester or other official
to whom such authority has been delegated. I make this certification
with full knowledge and understanding of the requirements of the Act and
do fully understand that if this application is approved, the amount of
exception granted under this approval may not be exceeded in any one
fiscal year, and do fully understand that if such exception is exceeded
I will be in violation of the Act (16 U.S.C. 620, et seq.), and I may be
subject to the penalties and remedies provided for such violation.
Further, I do fully understand that such violation may subject me to the
penalty of perjury pursuant to the False Statements Act (18 U.S.C.
1001).'';
and
(3) The application listed under this section must have been signed
by the person making such application or, in the case of a corporation,
by its Chief Executive Officer. The application must have been on the
company's letterhead and must have been notarized.
(4) The application made under this section must have been mailed to
the Regional Forester in Portland, Oregon, no later than January 8,
1992. Applicants were notified of the approving official's decision by
letter. If approved, the amount of the exception becomes effective upon
publication in the Federal Register.
(5) Prospective applicants could review Department records upon
request prior to the deadline for submitting applications. An applicant
could voluntarily submit information documenting the amount of purchases
of unprocessed timber originating from National Forest System lands
within Washington State. The Department then determined which amount is
higher, verified by either the Department's records or the applicant's
records. The Department then determined the applicant's portion of the
50 million board feet by determining the lesser of the amount verified
by the records or 15 million board feet. Applicants could submit the
information documenting the amount of purchases in the following manner:
(i) Actual receipts for purchasing unprocessed timber from National
Forest System lands within Washington State; or
(ii) A statement by a certified public accountant of:
(A) A summary by fiscal year for 1988, 1989 and 1990 of the
applicant's acquisitions of timber originating from National Forest
System lands in the State of Washington, listing total volume for each
of the three fiscal years; and
(B) The average volume for the three fiscal years. The volumes to be
reported were the harvest volumes, except in the case of open sales.
Advertised volumes had to be reported for open sales.
(C) The certified public accountant must have certified to the
following:
``I certify that under the penalties and remedies provided in
Sec. 492 of the Act (16 U.S.C. 620d) and the penalty of perjury provided
in the False Statements Act (18 U.S.C. 1001) that the information
provided in support of this application is, to the best of my knowledge
and belief, a true, accurate, current, and complete statement of
[applicant's company's name] National Forest System timber acquisitions
originating from within the State of Washington for fiscal years 1988,
1989 and/or 1990.''
(D) The certified public accountant's statement and certification
must have been on the accountant's company letterhead, must have been
notarized, and must have accompanied the applicant's application.
(c) Selling and trading rights. The purchase limit right obtained
under this rule may be sold, traded, or otherwise exchanged with any
other person subject to the following conditions:
(1) Such rights may not be sold, traded, or otherwise exchanged to
persons already in possession of such rights:
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(2) Any person selling, trading, or exchanging any or all of the
rights obtained under this rule shall advise the Regional Forester of
the amount being traded and the name(s) of the person(s) acquiring such
rights within 15 days of the transaction; and
(3) No person may have or acquire more than 15 million board feet in
one fiscal year.
(d) Information collection. The application procedures in this
section constitute information collection requirements as defined in 5
CFR part 1320. These requirements have been approved by the Office of
Management and Budget and assigned clearance number 0596-0114.
(e) Persons with approved shares. The application period for shares
of the indirect substitution exception for acquiring unprocessed timber
originating from National Forest Systems lands within the State of
Washington closed on January 8, 1992. Persons with approved shares are
responsible for monitoring and controlling their acquisitions of
National Forest System timber originating from within the State of
Washington to assure approved share amounts are not exceeded in any
Federal fiscal year. Unused portions of annual shares may not be
``banked'' for use in future fiscal years. The acquisition of such
National Forest System timber must be reported to the Forest Service in
accordance with Sec. 223.193 of this subpart. The following shares are
approved as of September 8, 1995:
(1) Cavenham Forest Industries, Portland, OR, 1,048,000 board feet.
(2) Weyerhauser, Tacoma, WA, 15,000,000 board feet.