[Federal Register Volume 75, Number 200 (Monday, October 18, 2010)]
[Rules and Regulations]
[Pages 63695-63703]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-26122]



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  Federal Register / Vol. 75, No. 200 / Monday, October 18, 2010 / 
Rules and Regulations  

[[Page 63695]]



DEPARTMENT OF AGRICULTURE

Office of Energy Policy and New Uses

7 CFR Part 2902

RIN 0503-AA34


Designation of Biobased Items for Federal Procurement

AGENCY: Departmental Management, USDA.

ACTION: Final rule.

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SUMMARY: The United States Department of Agriculture (USDA) is amending 
the Guidelines for Designating Biobased Products for Federal 
Procurement, to add eight sections to designate items within which 
biobased products will be afforded Federal procurement preference, as 
provided for under section 9002 of the Farm Security and Rural 
Investment Act of 2002, as amended by the Food, Conservation, and 
Energy Act of 2008 (referred to in this document as ``section 9002''). 
USDA is also establishing minimum biobased contents for each of these 
items.

DATES: This rule is effective November 17, 2010.

FOR FURTHER INFORMATION CONTACT: Ron Buckhalt, USDA, Office of 
Procurement and Property Management, Room 361, Reporters Building, 300 
7th St., SW., Washington, DC 20024; e-mail: [email protected]; 
phone (202) 205-4008. Information regarding the preferred procurement 
program (one part of the BioPreferred Program) is available on the 
Internet at http://www.biopreferred.gov.

SUPPLEMENTARY INFORMATION: The information presented in this preamble 
is organized as follows:

I. Authority
II. Background
III. Summary of Changes
IV. Discussion of Public Comments
V. Regulatory Information
    A. Executive Order 12866: Regulatory Planning and Review
    B. Regulatory Flexibility Act (RFA)
    C. Executive Order 12630: Governmental Actions and Interference 
With Constitutionally Protected Property Rights
    D. Executive Order 12988: Civil Justice Reform
    E. Executive Order 13132: Federalism
    F. Unfunded Mandates Reform Act of 1995
    G. Executive Order 12372: Intergovernmental Review of Federal 
Programs
    H. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    I. Paperwork Reduction Act
    J. E-Government Act Compliance
    K. Congressional Review Act

I. Authority

    These items are designated under the authority of section 9002 of 
the Farm Security and Rural Investment Act of 2002 (FSRIA), as amended 
by the Food, Conservation, and Energy Act of 2008 (FCEA), 7 U.S.C. 8102 
(referred to in this document as ``section 9002'').

II. Background

    As part of the BioPreferred Program, USDA published, on February 
10, 2010, a proposed rule in the Federal Register (FR) for the purpose 
of designating a total of nine items for the preferred procurement of 
biobased products by Federal agencies (referred to hereafter in this FR 
notice as the ``preferred procurement program''). This proposed rule 
can be found at 75 FR 6795. This rulemaking is referred to in this 
preamble as Round 6 (RIN 0503-AA34).
    In the proposed rule, USDA proposed designating the following nine 
items for the preferred procurement program: Disposable tableware; 
expanded polystyrene foam recycling products; heat transfer fluids; ink 
removers and cleaners; mulch and compost materials; multipurpose 
lubricants; office paper; topical pain relief products; and turbine 
drip oils.
    Today's final rule designates the proposed items (with the 
exception of office paper) within which biobased products will be 
afforded Federal procurement preference. USDA has determined that each 
of the items being designated under today's rulemaking meets the 
necessary statutory requirements; that they are being produced with 
biobased products; and that their procurement will carry out the 
following objectives of section 9002: To improve demand for biobased 
products; to spur development of the industrial base through value-
added agricultural processing and manufacturing in rural communities; 
and to enhance the Nation's energy security by substituting biobased 
products for products derived from imported oil and natural gas.
    When USDA designates by rulemaking an item (a generic grouping of 
products) for preferred procurement under the BioPreferred Program, 
manufacturers of all products under the umbrella of that item, that 
meet the requirements to qualify for preferred procurement, can claim 
that status for their products. To qualify for preferred procurement, a 
product must be within a designated item and must contain at least the 
minimum biobased content established for the designated item. When the 
designation of specific items is finalized, USDA will invite the 
manufacturers and vendors of these qualifying products to post 
information on the product, contacts, and performance testing on its 
BioPreferred Web site, http://www.biopreferred.gov. Procuring agencies 
will be able to utilize this Web site as one tool to determine the 
availability of qualifying biobased products under a designated item. 
Once USDA designates an item, procuring agencies are required generally 
to purchase biobased products within these designated items where the 
purchase price of the procurement item exceeds $10,000 or where the 
quantity of such items or of functionally equivalent items purchased 
over the preceding fiscal year equaled $10,000 or more.
    Subcategorization. Most of the items USDA is considering for 
designation for preferred procurement cover a wide range of products. 
For some items, there are subgroups of products within the item that 
meet different market requirements, uses and/or different performance 
specifications. Where such subgroups exist, USDA intends to create 
subcategories within the designated items.
    During the development of the proposal, USDA considered the 
appropriateness of creating subcategories with the disposable tableware 
and the ink removers and cleaners items. At that time, however, USDA 
did not have sufficient information to justify creating subcategories 
within these items. In the

[[Page 63696]]

proposed rule, USDA requested additional information on the possibility 
of subcategorizing these two items. USDA did not receive any additional 
information on these items during the public comment period that could 
be used to support the creation of subcategories at this time. Thus, 
none of the items being designated today have subcategories. USDA will 
continue to consider additional information that may become available 
to support subcategorization of these items in the future.
    Overlap with the Environmental Protection Agency (EPA) 
Comprehensive Procurement Guideline (CPG) program for recovered content 
products under the Resource Conservation and Recovery Act (RCRA) 
section 6002. Some of the products that are biobased items, designated 
for preferred procurement under the preferred procurement program, may 
also be products EPA has designated under the CPG for products 
containing recovered materials. Where that occurs, an EPA-designated 
recovered content product (also known as a ``recycled content product'' 
or ``EPA-designated product'') has priority in Federal procurement over 
the qualifying biobased product as identified in 7 CFR 2902.2. In 
situations where it believes there may be an overlap, USDA is asking 
manufacturers of qualifying biobased products to provide additional 
product and performance information to Federal agencies to assist them 
in determining whether the biobased products in question are, or are 
not, the same products for the same uses as the recovered content 
products. As this information becomes available, USDA will place it on 
the BioPreferred Web site with its catalog of qualifying biobased 
products.
    In cases where USDA believes an overlap with EPA-designated 
recovered content products may occur, manufacturers are being asked to 
indicate the various suggested uses of their product and the 
performance standards against which a particular product has been 
tested. In addition, depending on the type of biobased product, 
manufacturers are being asked to provide other types of information, 
such as whether the product contains petroleum-based components and 
whether the product contains recovered materials. Federal agencies may 
also ask manufacturers for information on a product's biobased content 
and its profile against environmental and health measures and life-
cycle costs (such as the Building for Environmental and Economic 
Sustainability (BEES) analysis or ASTM Standard D7075 for evaluating 
and reporting on environmental performance of biobased products). Such 
information will permit agencies to determine whether or not an overlap 
occurs.
    Section 6002 of the RCRA requires a procuring agency purchasing an 
item designated by EPA generally to purchase such an item composed of 
the highest percentage of recovered materials content practicable. 
However, a procuring agency may decide not to purchase such an item 
based on a determination that the item fails to meet the reasonable 
performance standards or specifications of the procuring agency. An 
item with recovered materials content may not meet reasonable 
performance standards or specifications, for example, if the use of the 
item with recovered materials content would jeopardize the intended end 
use of the item.
    Where a biobased item is used for the same purposes and to meet the 
same Federal agency performance requirements as an EPA-designated 
recovered content product, the Federal agency must purchase the 
recovered content product. For example, if a biobased hydraulic fluid 
is to be used as a fluid in hydraulic systems and because ``lubricating 
oils containing re-refined oil'' has already been designated by EPA for 
that purpose, then the Federal agency must purchase the EPA-designated 
recovered content product, ``lubricating oils containing re-refined 
oil.'' If, on the other hand, that biobased hydraulic fluid is to be 
used to address a Federal agency's certain environmental or health 
performance requirements that the EPA-designated recovered content 
product would not meet, then the biobased product should be given 
preference, subject to price, availability, and performance 
considerations.
    This final rule designates two items for preferred procurement for 
which there may also be an EPA-designated recovered content product. 
The first item is mulch and compost materials, which are also EPA-
designated recovered content products ``hydraulic mulch products'' and 
``compost materials'' under the ``landscaping products'' category of 
products. The second item is multipurpose lubricants, which, depending 
on how they are used, may be an EPA-designated recovered content 
product ``re-refined lubricating oils.'' EPA provides recovered 
materials content recommendations for these recovered content products 
in Recovered Materials Advisory Notice (RMAN) I. The RMAN 
recommendations for these CPG products can be found by accessing EPA's 
Web site http://www.epagov/epaoswer/non-hw/procure/products.htm and 
then clicking on the appropriate product name.
    Minimum Biobased Contents. The minimum biobased contents being 
established with today's rulemaking are based on products for which 
USDA has biobased content test data. In addition to considering the 
biobased content test data for each item, USDA also considers other 
factors when establishing the minimum biobased content. These other 
factors include: Public comments received on the proposed minimum 
biobased contents; product performance information to justify the 
inclusion of products at lower levels of biobased content; and the 
range, groupings, and breaks in the biobased content test data array. 
Consideration of this information allows USDA to establish minimum 
biobased contents on a broad set of factors to assist the Federal 
procurement community in its decision to purchase biobased products.
    USDA makes every effort to obtain biobased content test data on 
multiple products within each item. For most designated items, USDA has 
biobased content test data on more than one product within a designated 
item. However, USDA must rely on biobased product manufacturers to 
voluntarily submit product information and, in some cases, USDA has 
been able to obtain biobased content data for only a single product 
within a designated item. As USDA obtains additional data on the 
biobased contents for products within these eight designated items, 
USDA will evaluate whether the minimum biobased content for a 
designated item will be revised.
    USDA anticipates that the minimum biobased content of an item that 
is based on a single product is more likely to change as additional 
products in those items are identified and tested. In today's final 
rule, the minimum biobased contents for one of the designated items 
(``expanded polystyrene foam recycling products'') is based on a single 
tested product. Given that only two biobased products have been 
identified in this item, and only one manufacturer supplied a sample 
for testing, USDA believes it is reasonable to set a minimum biobased 
content for this item based on the single data point.
    For all items where additional information indicates that it is 
appropriate to revise a minimum biobased content established under 
today's rulemaking, USDA will propose the change in a notice in the 
Federal Register to allow public comment on the proposed revised 
minimum biobased content. USDA will then

[[Page 63697]]

consider the public comments and issue a final rulemaking on the 
minimum biobased content.
    Future Designations. In making future designations, USDA will 
continue to conduct market searches to identify manufacturers of 
biobased products within items. USDA will then contact the identified 
manufacturers to solicit samples of their products for voluntary 
submission for biobased content testing or for the BEES analytical 
tool. Based on these results, USDA will then propose new items for 
designation for preferred procurement.
    USDA plans to identify approximately 10-15 items in each future 
rulemaking. USDA has developed a preliminary list of items for future 
designation. This list is available on the BioPreferred Web site. While 
this list presents an initial prioritization of items for designation, 
USDA cannot identify with certainty which items will be presented in 
each of the future rulemakings. In response to comments from other 
Federal agencies, USDA intends to give increased priority to those 
items that contain the highest biobased content. In addition, as the 
program matures, manufacturers of biobased products within some 
industry segments have become more responsive to USDA's requests for 
technical information than those in other segments. Thus, items with 
high biobased content and for which sufficient technical information 
can be obtained quickly may be added or moved up on the prioritization 
list. USDA intends to update the list of items for future designation 
on the BioPreferred Web site every six months, or more often if 
significant changes are made to the list.
    Exemptions. In earlier item designation rules, USDA created 
exemptions from the preferred procurement program's requirements for 
procurements involving combat or combat-related missions and for 
spacecraft systems and launch support equipment. Since publication of 
those final rules in the Federal Register, and in response to comments 
from the Department of Defense (DoD), USDA has decided to create 
``blanket'' exemptions for all items used in products or systems 
designed or procured for combat or combat-related missions, which will 
apply to all items designated for the procurement preference. These 
``blanket'' exemptions can be found in subpart A of part 2902. Because 
these blanket exemptions are included in subpart A of part 2902, it is 
unnecessary to repeat them in the individual item designations in this 
final rule.

III. Summary of Changes

    As a result of the comments received on the proposed rule (see 
section IV), USDA has made two substantive changes to the rule. The 
proposed ``office paper'' item has been withdrawn from the group of 
items being designated for preferred procurement in today's final 
rulemaking. USDA has decided that the issues raised by the commenters 
regarding the designation of this item justify the withdrawal of the 
item from this rulemaking. In addition, USDA has revised the definition 
of the disposable tableware item to clarify that the item refers to 
tableware that is made of, or coated with, plastic resin.

IV. Discussion of Public Comments

    USDA solicited comments on the proposed rule for 60 days ending on 
April 12, 2010. USDA received comments from five commenters by that 
date. The comments were from an industry trade organization, three 
manufacturers, and one individual.
    The five commenters submitted comments regarding the designation 
process in general and comments specific to the designation of 
disposable tableware and office paper. The three individual 
manufacturers also endorsed the comments submitted by the industry 
association.
    In the remainder of this section, USDA first addresses two general 
comments that relate to the overall designation process. All of the 
specific comments related to the proposed designation of office paper 
and disposable tableware are presented next, followed by USDA's 
response to those comments.

General Comments

    Comment: One commenter stated that the process to determine what 
products are eligible is not transparent. Product category 
consideration appears to be at the request of the manufacturer, as is 
consideration of specific products. There is no announcement when a 
manufacturer has submitted a request for consideration of their product 
as BioPreferred to enable other manufacturers the opportunity to submit 
data. How USDA makes a determination that a product warrants evaluation 
as a BioPreferred product is also not clear.
    Response: USDA disagrees with the commenter's statement that 
consideration of items for designation in the BioPreferred Program is 
based on requests from the manufacturers of certain items. As discussed 
in the preamble to the proposed rule (75 FR 6801 and 6802), USDA uses a 
model to identify and prioritize items for designation. Through this 
model, USDA has identified over 100 items for potential designation 
under the preferred procurement program. A list of these items and 
information on the model can be accessed on the BioPreferred Web site 
at http://www.biopreferred.gov. USDA has conducted extensive market 
research to identify manufacturers of biobased products and has 
requested product information from manufacturers as they have been 
identified. While the willingness of manufacturers to provide product 
information and samples for testing has been, and will continue to be, 
a factor in setting the priority for designating items, it is not the 
only consideration. The cost, performance, availability, and size of 
the market all play a role in selecting items for designation.
    Comment: One commenter stated that USDA has apparently used the 
BEES analysis tool to meet at least part of its environmental 
information responsibilities. The BEES tool is designed to evaluate 
environmental and economic performance data for building products and 
does not represent best practices for evaluating paper products. Life 
cycle analysis (LCA) practitioners familiar with paper manufacturing 
have identified the BEES methodology as imprecise when applied to paper 
products. The commenter stated that results from the recent peer 
reviewed LCA study, performed at their request, indicate, for instance, 
that the carbon footprint of printing and writing papers is less than 
that indicated for the carton of ``office paper'' evaluated through the 
BEES analysis. Furthermore, the size of the database on which the BEES 
analysis was conducted renders the results meaningless in view of the 
size of the entire paper products marketplace. The commenter stated 
that care must be taken if USDA plans to use the BEES results in any 
meaningful manner.
    Response: The commenter is correct that USDA has used the BEES 
analytical tool to analyze a sample of individual products within each 
designated item. The BEES tool has been used to measure environmental 
and economic performance of designated items since the inception of the 
BioPreferred Program. USDA acknowledges that there is a wide range of 
opinion regarding the value of the BEES analysis and is currently 
considering the role of the analysis in the BioPreferred Program.
    In the preamble to the proposed rule (75 FR 6801), USDA stated 
that, in addition to the BEES analytical tool, manufacturers wishing to 
make similar

[[Page 63698]]

life-cycle information available may choose to use the ASTM Standard 
D7075 analysis. The ASTM Standard D7075 product analysis includes 
information on environmental performance, human health impacts, and 
economic performance. USDA is working with manufacturers and vendors to 
make this information available on the BioPreferred Web site in order 
to make the preferred procurement program more efficient.

Office Paper and Disposable Tableware

    Comments: One commenter stated that when USDA chooses to evaluate a 
product category such as office paper or disposable tableware that has 
always been biobased, it is highly misleading and arbitrary to provide 
the USDA BioPreferred imprimatur to only those ``new'' products in the 
category that use different biobased raw materials. The commenter feels 
this implies that there is an inherent ``good'' in the alternatives not 
found in wood-based papers, which the USDA has not demonstrated and LCA 
does not support. The commenter stated that there is no suggestion in 
the legislative history of either the 2002 or 2008 Farm Bills that 
Congress intended any dislocation of existing biobased products. The 
commenter believes it is reasonable to conclude that by including the 
BioPreferred Program in the Energy Title in both statutes, Congress 
intended to encourage ``new'' biobased products as a replacement for 
fossil fuel-based products, not to displace or substitute for existing 
biobased products.
    One commenter believes that USDA has ignored the evolution of the 
forest products industry since 1972 when applying the ``mature market'' 
definition to these products. The commenter states that USDA must 
consider how the significant changes made in fiber procurement and 
manufacturing technologies have resulted in different products than 
those produced in 1972. Increased environmental regulation has caused 
significant changes to paper to incorporate more recycled content, 
radically alter bleaching methods and chemicals, and facilitate high-
speed printing, new inks (ink jet, toner, etc.) and other innovations. 
The way the wood-fiber is grown and harvested has also experienced 
substantial improvement over the past 40 years. The commenter believes 
USDA must take these developments into consideration in evaluating 
whether today's wood-based office papers and tableware are the same as 
those that had ``mature markets'' in 1972.
    One commenter stressed the need to collect and analyze further 
information about the differentiation of these existing products as 
they were in the 1970s and in 2010. This is necessary to better 
understand USDA's interpretation of the term ``mature'' apparently 
attached to these existing products. The commenter believes that 
products in a constant process of improvement via innovation should not 
be considered mature. For example, the average rotation age and 
composition of the wood fiber in these products have changed towards a 
more sustainable configuration in the last four decades.
    One commenter stated that today's wood-based office papers and 
disposable tableware meet and further the minimum biobased content 
requirements. In addition, they meet all of the goals of the 
BioPreferred Program: Improving demand for biobased products (wood-
based paper utilizes vast amounts of biobased ingredients), stimulating 
economic growth in rural areas (paper manufacturing facilities are 
typically located in rural areas close to the raw material and are the 
economic foundation of their communities), and enhancing the Nation's 
energy security (over 60 percent of the energy used to manufacture 
wood-based office papers in the United States comes from renewable, 
carbon neutral biomass).
    One commenter stated that Section 9002(a)(3)(B)(v), 7 U.S.C. 
8102(a)(3)(B)(v), directs the Secretary to ``provide information as to 
* * * the environmental and public health benefits of such [biobased] 
materials and items.'' USDA has not considered whether the alternative 
fibers used to manufacture the alternative office papers and tableware 
are sustainably grown and managed. Credible sustainable forest 
management programs have assured the continuous improvement of forest 
management to provide for healthy forests in the years to come. In 
accepting alternative fiber papers into the BioPreferred Program, the 
commenter states USDA must make sure that it does not skew the market 
to such a degree that it would alter sustainable land use decisions.
    The commenter stated that a classic example has been in the 
renewable energy field when the subsidies for corn-based ethanol led to 
additional rain forest destruction. The commenter further stated that 
because more corn was being grown in the U.S. for renewable fuel, it 
opened the market for non-U.S. grown soybeans which led farmers in 
South America to clear rain forests for agricultural lands.
    The commenter states that if USDA considered sustainable management 
of paper fibers (whether wood or alternative) through a credible 
sustainable fiber management program, some degree of confidence could 
be drawn that there will not be the unintended consequence of forest 
lands being cleared to grow kenaf, for instance.
    One commenter stated that office papers designated as BioPreferred 
are intended for the same uses, meet the same performance requirements, 
and overlap with the EPA's CPG program for recovered content products 
under the RCRA Section 6002. The CPG requirements apparently take 
precedence over the BioPreferred program; therefore, Federal agencies 
must purchase the recovered content product, making the BioPreferred 
designation superfluous for Federal procurement of these products.
    One commenter stated that the definition of office paper--``paper 
products used in office printer and copier applications, writing, and 
coated papers for publications''--misapplies the term ``coated 
publication papers.'' Coated publication papers are those typically 
used in magazines and catalogs, not office machines. USDA needs to 
clarify what it intends by this definition. The commenter's preferred 
definition is: ``Office papers: Uncoated and coated paper products used 
in office printer and copier applications, and writing papers.''
    One commenter stated that the performance standard identified for 
office papers--JCP A230-High Yield Coated Opaque Offset--may be 
appropriate for the sample paper evaluated for the proposal; however, 
it represents only a small minority of the type of papers used in 
office machines. The U.S. Government's Joint Committee on Printing 
Paper Specifications includes a wide variety of standards for the 
specific type of paper needed. For instance, O-65(A) is the appropriate 
standard for Plain Copier Xerographic paper. Therefore, USDA should 
refer to the accurate paper performance specification depending on the 
specific paper required.
    One commenter stated that wood-based products have very strong 
positive environmental attributes. The commenter stated that by 
proposing to endorse agricultural-based fiber over wood fiber, USDA 
will send an economic signal to forest landowners to grow more 
agriculture-based crops instead of trees. USDA has always favored more 
forest lands, not less, and this would be counter to that position. The 
commenter has completed an LCA of the Equal Offset grade, which fits 
the A230 designation, and found that when considering environmental 
impact, this paper is the best option as it uses less

[[Page 63699]]

water, wood fiber and GHG than A60 (uncoated freesheet).
    One commenter stated that it is not beneficial to Americans to 
apply our country's finite technical, natural, and financial resources 
to replace an already existing biobased product like wood-based paper 
with paper made from hemp, kenaf, sugar cane, flax, cotton, and/or 
bamboo.
    Three commenters suggested USDA delay its decision regarding 
inclusion of office papers and disposable tableware as designated items 
within the BioPreferred Program to allow in-depth consideration of the 
issues between USDA and representatives of the affected products. These 
issues also include other technical, specification and statutory issues 
that could be advanced prior to and during the review process.
    Response: USDA considered the comments related to the proposed 
designation of office paper and disposable tableware and agrees with 
many of the points made by the commenters. USDA agrees with the 
commenters that several technical and policy issues need to be 
considered and resolved before the designation of the office paper item 
is finalized. USDA is, therefore, withdrawing the office paper item 
from the designations being finalized in today's rulemaking. USDA 
responses to specific issues raised by the commenters are presented in 
the following paragraphs.
    USDA agrees that it is not the intent of the BioPreferred Program 
to replace a traditional biobased product with another ``emerging'' 
biobased product that performs the same function. USDA's intent in 
proposing to designate office paper was to encourage the development 
and use of office paper produced from fast-growing, sustainable fibers. 
USDA agrees with the commenters, however, that implementing the 
designation as proposed could result in the unintended replacement of 
paper produced exclusively from sustainably-grown forest products. 
Because of the comments that were received, USDA believes that more 
precise definitions and additional clarification are needed for the 
product category.
    With regard to the commenter's concerns about the ``mature market'' 
issue, USDA acknowledges that the question of whether a product should 
be considered a mature market product is not always simply a matter of 
whether the product had a significant market share in 1972. In some 
cases the market share held by a biobased product in 1972 may have been 
taken over by petroleum-based synthetic products during the 1980s or 
1990s and the biobased alternative may truly be ``emerging'' again now. 
In other cases, significant feedstock and process changes have resulted 
in products that are very different from the products marketed in 1972. 
USDA agrees that, in the case of the proposed ``office paper'' item, 
more investigation is needed to adequately address the issue of whether 
today's products should be considered mature market products.
    Commenters pointed out that the office paper category overlaps with 
an EPA recovered content product and stated that there would be no 
benefit in designating it under the BioPreferred program. USDA 
acknowledges that for some products (including this one) the priority 
given to recovered content products reduces the benefits that would 
otherwise be attributed to the BioPreferred program. USDA does not 
believe, however, that the CPG program eliminates the need to designate 
items for the BioPreferred program. As discussed at proposal, there is 
a wide range of performance requirements, such as biodegradability or 
compostability, that factor into purchasing decisions. USDA believes 
there are potential benefits to designating product categories in which 
qualified biobased products are found even though the product 
categories are covered by the CPG program.
    Commenters also stated that USDA did not adequately analyze 
sustainability of the current methods of producing office paper from 
forestry products. USDA acknowledges that information on sustainability 
within the forestry and paper production industry was not investigated 
prior to proposing the item for designation. USDA agrees that 
consideration of such information would be beneficial and will work 
with industry stakeholders to obtain and evaluate such information.
    Commenters also stated that there are numerous test methods and 
performance specifications that apply to office paper other than the 
one listed in the proposal preamble. USDA will communicate with 
stakeholders to gather a more complete list of applicable performance 
standards and test methods.
    Based on the comments received, USDA has decided that designating 
the office paper item as proposed has the potential to create much 
confusion among Federal purchasing agents. A single designated item for 
office paper would be very broad and would include paper designed to 
serve a wide variety of common and specialty functions. There is also a 
wide range of performance requirements that would have to be addressed 
in such a broad item. USDA will continue to consider the issues raised 
by the commenters, will work with the commenters and other industry 
stakeholders to resolve the issues, and plans to designate the item at 
a later date.
    With regard to the designation of the disposable tableware item, 
USDA has clarified its intent that products within the item are those 
that are made of plastic or that have a plastic coating. The intent of 
designating this item is to encourage the use of disposable tableware 
made from, or coated with, resins derived from renewable biomass rather 
than petroleum-based resins. Thus, USDA believes that the designation 
of this item is appropriate and has clarified in the final rule that 
the item is defined as ``Products made from, or coated with, plastic 
resins and used in dining, such as drink ware and dishware, including 
but not limited to cups, plates, bowls, and serving platters, and that 
are designed for one-time use. This item does not include disposable 
cutlery, which is a separate item.''
    Today's action finalizes the designation of eight items within 
which biobased products will be afforded Federal procurement 
preference. USDA encourages manufacturers, vendors, and purchasers of 
biobased products within these eight designated items to continue to 
submit information relative to products available within these items. 
If sufficient supporting information becomes available, USDA will 
consider amending today's rulemaking by creating subcategories within 
the items, raising (or lowering) the minimum biobased content, or other 
appropriate actions.

V. Regulatory Information

A. Executive Order 12866: Regulatory Planning and Review

    This action has been determined significant for purposes of 
Executive Order 12866 and, therefore, has been reviewed by the Office 
of Management and Budget. We are not able to quantify the annual 
economic effect associated with this final rule. As discussed in the 
proposed rule, USDA made extensive efforts to obtain information on the 
Federal agencies' usage within the eight designated items. These 
efforts were largely unsuccessful. Therefore attempts to quantify the 
economic impact of this rule would require estimation of the 
anticipated market penetration of biobased products based upon many 
assumptions. In addition, because agencies have the option of not 
purchasing designated items if costs are ``unreasonable,'' the product 
is not

[[Page 63700]]

readily available, or the product does not demonstrate necessary 
performance characteristics, certain assumptions may not be valid. 
While facing these quantitative challenges, USDA relied upon a 
qualitative assessment to determine the impacts of this rulemaking. 
This assessment was based primarily on the offsetting nature of the 
program (an increase in biobased products purchased with a 
corresponding decrease in petroleum products purchased). Consideration 
was also given to the fact that agencies may choose not procure 
designated items due to unreasonable costs.
1. Summary of Impacts
    This rulemaking is expected to have both positive and negative 
impacts to individual businesses, including small businesses. USDA 
anticipates that the biobased preferred procurement program will 
provide additional opportunities for businesses and manufacturers to 
begin supplying products under the designated biobased items to Federal 
agencies and their contractors. However, other businesses and 
manufacturers that supply only non-qualifying products and do not offer 
biobased alternatives may experience a decrease in demand from Federal 
agencies and their contractors. USDA is unable to determine the number 
of businesses, including small businesses that may be adversely 
affected by this rule. The rule, however, will not affect existing 
purchase orders, nor will it preclude businesses from modifying their 
product lines to meet new requirements for designated biobased 
products. Because the extent to which procuring agencies will find the 
performance and costs of biobased products acceptable is unknown, it is 
impossible to quantify the actual economic effect of the rule.
2. Benefits of the Rule
    The designation of these eight items provides the benefits outlined 
in the objectives of section 9002: To increase domestic demand for many 
agricultural commodities that can serve as feedstocks for production of 
biobased products; to spur development of the industrial base through 
value-added agricultural processing and manufacturing in rural 
communities; and to enhance the Nation's energy security by 
substituting biobased products for products derived from imported oil 
and natural gas. On a national and regional level, this rule can result 
in expanding and strengthening markets for biobased materials used in 
these items.
3. Costs of the Rule
    Like the benefits, the costs of this rule have not been quantified. 
Two types of costs are involved: Costs to producers of products that 
will compete with the preferred products, and costs to Federal agencies 
to provide procurement preference for the preferred products. Producers 
of competing products may face a decrease in demand for their products 
to the extent Federal agencies refrain from purchasing their products. 
However, it is not known to what extent this may occur. Procurement 
costs for Federal agencies may rise as they evaluate the availability 
and relative cost of preferred products before making a purchase.

B. Regulatory Flexibility Act (RFA)

    When an agency issues a final rule following a proposed rule, the 
Regulatory Flexibility Act (RFA, 5 U.S.C. 601-612) requires the agency 
to prepare a final regulatory flexibility analysis (5 U.S.C. 604). 
However, the requirement for a final regulatory flexibility analysis 
does not apply if the head of the agency certifies that the rule will 
not, if promulgated, have a significant economic impact on a 
substantial number of small entities (5 U.S.C. 605(b)).
    USDA evaluated the potential impacts of its designation of these 
items to determine whether its actions would have a significant impact 
on a substantial number of small entities. Because the preferred 
procurement program established under section 9002 applies only to 
Federal agencies and their contractors, small governmental (city, 
county, etc.) agencies are not affected. Thus, this rule will not have 
a significant economic impact on small governmental jurisdictions.
    USDA anticipates that this program will benefit entities, both 
large and small, that manufacture or sell biobased products. For 
example, the designation of items for preferred procurement will 
provide additional opportunities for businesses to manufacture and sell 
biobased products to Federal agencies and their contractors. Similar 
opportunities will be provided for entities that supply biobased 
materials to manufacturers. The intent of section 9002 is largely to 
stimulate the production of new biobased products and to energize 
emerging markets for those products. Because the program is still in 
its infancy, however, it is unknown how many businesses will ultimately 
be affected. While USDA has no data on the number of small businesses 
that may choose to develop and market biobased products within the 
items designated by this rulemaking, the number is expected to be 
small. Because biobased products represent a small emerging market, 
only a small percentage of all manufacturers, large or small, are 
expected to develop and market biobased products. Thus, the number of 
small businesses manufacturing biobased products affected by this 
rulemaking is not expected to be substantial.
    The preferred procurement program may decrease opportunities for 
businesses that manufacture or sell non-biobased products or provide 
components for the manufacturing of such products. Most manufacturers 
of non-biobased products within the items being designated for 
preferred procurement in this rule are expected to be included under 
the following NAICS codes: 324191 (petroleum lubricating oil and grease 
manufacturing), 325211 (plastics materials and resin manufacturing), 
325411 (medicinal and botanical manufacturing), 325612 (polish and 
other sanitation goods manufacturing), 325998 (other miscellaneous 
chemical products and preparation manufacturing), and 326150 (urethane 
and other foam product manufacturing). USDA obtained information on 
these six NAICS categories from the U.S. Census Bureau's Economic 
Census database. USDA found that the Economic Census reports about 
3,513 companies within these six NAICS categories and that these 
companies own a total of about 4,271 establishments. Thus, the average 
number of establishments per company is about 1.2. The Census data also 
reported that of the 4,271 individual establishments, about 4,260 (99.7 
percent) have less than 500 employees.
    USDA also found that the overall average number of employees per 
company among these industries is about 55, with the plastics materials 
and resins segment reporting the highest average (about 90 employees 
per company). Thus, nearly all of the businesses fall within the Small 
Business Administration's definition of a small business (less than 500 
employees, in most NAICS categories).
    USDA does not have data on the potential adverse impacts on 
manufacturers of non-biobased products within the items being 
designated, but believes that the impact will not be significant. Most 
of the items being designated in this rulemaking are typical consumer 
products widely used by the general public and by industrial/commercial 
establishments that are not subject to this rulemaking. Thus, USDA 
believes that the number of small businesses manufacturing non-biobased

[[Page 63701]]

products within the items being designated and selling significant 
quantities of those products to government agencies affected by this 
rulemaking to be relatively low. Also, this rule will not affect 
existing purchase orders and it will not preclude procuring agencies 
from continuing to purchase non-biobased items when biobased items do 
not meet the availability, performance, or reasonable price criteria. 
This rule will also not preclude businesses from modifying their 
product lines to meet new specifications or solicitation requirements 
for these products containing biobased materials.
    After considering the economic impacts of this rule on small 
entities, USDA certifies that this action will not have a significant 
economic impact on a substantial number of small entities.
    While not a factor relevant to determining whether the rule will 
have a significant impact for RFA purposes, USDA has concluded that the 
effect of the rule will be to provide positive opportunities to 
businesses engaged in the manufacture of these biobased products. 
Purchase and use of these biobased products by procuring agencies 
increase demand for these products and result in private sector 
development of new technologies, creating business and employment 
opportunities that enhance local, regional, and national economies.

C. Executive Order 12630: Governmental Actions and Interference With 
Constitutionally Protected Property Rights

    This rule has been reviewed in accordance with Executive Order 
12630, Governmental Actions and Interference with Constitutionally 
Protected Property Rights, and does not contain policies that would 
have implications for these rights.

D. Executive Order 12988: Civil Justice Reform

    This rule has been reviewed in accordance with Executive Order 
12988, Civil Justice Reform. This rule does not preempt State or local 
laws, is not intended to have retroactive effect, and does not involve 
administrative appeals.

E. Executive Order 13132: Federalism

    This rule does not have sufficient federalism implications to 
warrant the preparation of a Federalism Assessment. Provisions of this 
rule will not have a substantial direct effect on states or their 
political subdivisions or on the distribution of power and 
responsibilities among the various government levels.

F. Unfunded Mandates Reform Act of 1995

    This rule contains no Federal mandates under the regulatory 
provisions of Title II of the Unfunded Mandates Reform Act of 1995 
(UMRA), 2 U.S.C. 1531-1538, for state, local, and tribal governments, 
or the private sector. Therefore, a statement under section 202 of UMRA 
is not required.

G. Executive Order 12372: Intergovernmental Review of Federal Programs

    For the reasons set forth in the Final Rule Related Notice for 7 
CFR part 3015, subpart V (48 FR 29115, June 24, 1983), this program is 
excluded from the scope of the Executive Order 12372, which requires 
intergovernmental consultation with state and local officials. This 
program does not directly affect state and local governments. Although 
there is no statutory requirement to do so, we believe that, in the 
long term, many state and local governments will implement similar 
purchase programs based on the BioPreferred Program. USDA has been 
charged by Congress to share information on the BioPreferred Program 
with State and local governments.

H. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    Today's rule does not significantly or uniquely affect one or more 
Indian tribes, * * * the relationship between the Federal Government 
and Indian tribes, or * * * the distribution of power and 
responsibilities between the Federal Government and Indian tribes.'' 
Thus, no further action is required under Executive Order 13175.

I. Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501 through 3520), the information collection under this rule is 
currently approved under OMB control number 0503-0011.

J. E-Government Act Compliance

    The Office of Procurement and Property Management is committed to 
compliance with the E-Government Act, which requires Government 
agencies in general to provide the public the option of submitting 
information or transacting business electronically to the maximum 
extent possible. USDA is implementing an electronic information system 
for posting information voluntarily submitted by manufacturers or 
vendors on the products they intend to offer for preferred procurement 
under each designated item. For information pertinent to E-Government 
Act compliance related to this rule, please contact Ron Buckhalt at 
(202) 205-4008.

K. Congressional Review Act

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the 
Small Business Regulatory Enforcement Fairness Act of 1996, generally 
provides that before a rule may take effect, the agency promulgating 
the rule must submit a rule report, that includes a copy of the rule, 
to each House of the Congress and to the Comptroller General of the 
United States. USDA has submitted a report containing this rule and 
other required information to the U.S. Senate, the U.S. House of 
Representatives, and the Comptroller General of the United States prior 
to publication of the rule in the Federal Register.

List of Subjects in 7 CFR Part 2902

    Biobased products, Procurement.

0
For the reasons stated in the preamble, the Department of Agriculture 
is amending 7 CFR chapter XXIX as follows:

CHAPTER XXIX--OFFICE OF ENERGY

PART 2902--GUIDELINES FOR DESIGNATING BIOBASED PRODUCTS FOR FEDERAL 
PROCUREMENT

0
1. The authority citation for part 2902 continues to read as follows:


    Authority:  7 U.S.C. 8102.


0
2. Add Sec. Sec.  2902.52 through 2902.60 to subpart B to read as 
follows:

Sec.
2902.52 Disposable tableware.
2902.53 Expanded polystyrene foam recycling products.
2902.54 Heat transfer fluids.
2902.55 Ink removers and cleaners.
2902.56 Mulch and compost materials.
2902.57 Multipurpose lubricants.
2902.58 [Reserved]
2902.59 Topical pain relief products.
2902.60 Turbine drip oils.


Sec.  2902.52  Disposable tableware.

    (a) Definition. Products made from, or coated with, plastic resins 
and used in dining, such as drink ware and dishware, including but not 
limited to cups, plates, bowls, and serving platters, and that are 
designed for one-time use. This item does not include disposable 
cutlery, which is a separate item.
    (b) Minimum biobased content. The preferred procurement product 
must have a minimum biobased content of at least 72 percent, which 
shall be based on the amount of qualifying biobased carbon in the 
product as a percent of the weight (mass) of the total organic carbon 
in the finished product.

[[Page 63702]]

    (c) Preference compliance date. No later than October 18, 2011, 
procuring agencies, in accordance with this part, will give a 
procurement preference for qualifying biobased disposable tableware. By 
that date, Federal agencies that have the responsibility for drafting 
or reviewing specifications for items to be procured shall ensure that 
the relevant specifications require the use of biobased disposable 
tableware.


Sec.  2902.53  Expanded polystyrene (EPS) foam recycling products.

    (a) Definition. Products formulated to dissolve EPS foam to reduce 
the volume of recycled or discarded EPS items.
    (b) Minimum biobased content. The preferred procurement product 
must have a minimum biobased content of at least 90 percent, which 
shall be based on the amount of qualifying biobased carbon in the 
product as a percent of the weight (mass) of the total organic carbon 
in the finished product.
    (c) Preference compliance date. No later than October 18, 2011, 
procuring agencies, in accordance with this part, will give a 
procurement preference for qualifying biobased EPS foam recycling 
products. By that date, Federal agencies that have the responsibility 
for drafting or reviewing specifications for items to be procured shall 
ensure that the relevant specifications require the use of biobased EPS 
foam recycling products.


Sec.  2902.54  Heat transfer fluids.

    (a) Definition. Products with high thermal capacities used to 
facilitate the transfer of heat from one location to another, including 
coolants or refrigerants for use in HVAC applications, internal 
combustion engines, personal cooling devices, thermal energy storage, 
or other heating or cooling closed-loops.
    (b) Minimum biobased content. The preferred procurement product 
must have a minimum biobased content of at least 89 percent, which 
shall be based on the amount of qualifying biobased carbon in the 
product as a percent of the weight (mass) of the total organic carbon 
in the finished product.
    (c) Preference compliance date. No later than October 18, 2011, 
procuring agencies, in accordance with this part, will give a 
procurement preference for qualifying biobased heat transfer fluids. By 
that date, Federal agencies that have the responsibility for drafting 
or reviewing specifications for items to be procured shall ensure that 
the relevant specifications require the use of biobased heat transfer 
fluids.


Sec.  2902.55  Ink removers and cleaners.

    (a) Definition. Chemical products designed to remove ink, haze, 
glaze, and other residual ink contaminants from the surfaces of 
equipment, such as rollers, used in the textile and printing 
industries.
    (b) Minimum biobased content. The preferred procurement product 
must have a minimum biobased content of at least 79 percent, which 
shall be based on the amount of qualifying biobased carbon in the 
product as a percent of the weight (mass) of the total organic carbon 
in the finished product.
    (c) Preference compliance date. No later than October 18, 2011, 
procuring agencies, in accordance with this part, will give a 
procurement preference for qualifying biobased ink removers and 
cleaners. By that date, Federal agencies that have the responsibility 
for drafting or reviewing specifications for items to be procured shall 
ensure that the relevant specifications require the use of biobased ink 
removers and cleaners.


Sec.  2902.56  Mulch and compost materials.

    (a) Definition. Products designed to provide a protective covering 
placed over the soil, primarily to keep down weeds and to improve the 
appearance of landscaping. Compost is the aerobically decomposed 
remnants of organic materials used in gardening and agriculture as a 
soil amendment, and commercially by the landscaping and container 
nursery industries.
    (b) Minimum biobased content. The preferred procurement product 
must have a minimum biobased content of at least 95 percent, which 
shall be based on the amount of qualifying biobased carbon in the 
product as a percent of the weight (mass) of the total organic carbon 
in the finished product.
    (c) Preference compliance date. No later than October 18, 2011, 
procuring agencies, in accordance with this part, will give a 
procurement preference for qualifying biobased mulch and compost 
materials. By that date, Federal agencies that have the responsibility 
for drafting or reviewing specifications for items to be procured shall 
ensure that the relevant specifications require the use of biobased 
mulch and compost materials.
    (d) Determining overlap with an EPA-designated recovered content 
product. Qualifying products within this item may overlap with the EPA-
designated recovered content product: Landscaping products--``compost'' 
and ``hydraulic mulch''. USDA is requesting that manufacturers of these 
qualifying biobased products provide information on the USDA Web site 
of qualifying biobased products about the intended uses of the product, 
information on whether or not the product contains any recovered 
material, in addition to biobased ingredients, and performance 
standards against which the product has been tested. This information 
will assist Federal agencies in determining whether or not a qualifying 
biobased product overlaps with EPA-designated landscaping products and 
which product should be afforded the preference in purchasing.

    Note to paragraph (d):  Biobased mulch and compost materials 
within this designated item can compete with similar landscaping 
products with recycled content. Under the Resource Conservation and 
Recovery Act of 1976, section 6002, the U.S. Environmental 
Protection Agency designated landscaping products containing 
recovered materials as items for which Federal agencies must give 
preference in their purchasing programs. The designation can be 
found in the Comprehensive Procurement Guideline, 40 CFR 247.15.

Sec.  2902.57  Multipurpose lubricants.

    (a) Definition. Products designed to provide lubrication under a 
variety of conditions and in a variety of industrial settings to 
prevent friction or rust. Greases, which are lubricants composed of 
oils thickened to a semisolid or solid consistency using soaps, 
polymers or other solids, or other thickeners, are not included in this 
item. In addition, task-specific lubricants, such as chain and cable 
lubricants and gear lubricants, are not included in this item.
    (b) Minimum biobased content. The preferred procurement product 
must have a minimum biobased content of at least 88 percent, which 
shall be based on the amount of qualifying biobased carbon in the 
product as a percent of the weight (mass) of the total organic carbon 
in the finished product.
    (c) Preference compliance date. No later than October 18, 2011, 
procuring agencies, in accordance with this part, will give a 
procurement preference for qualifying biobased multipurpose lubricants. 
By that date, Federal agencies that have the responsibility for 
drafting or reviewing specifications for items to be procured shall 
ensure that the relevant specifications require the use of biobased 
multipurpose lubricants.
    (d) Determining overlap with an EPA-designated recovered content 
product. Qualifying products within this item may overlap with the EPA-
designated recovered content product: Re-refined lubricating oils. USDA 
is requesting that manufacturers of these qualifying biobased products 
provide information on the BioPreferred Web site about the intended 
uses of the product, information on whether or not the product contains 
any recovered material, in addition to biobased ingredients, and 
performance standards

[[Page 63703]]

against which the product has been tested. This information will assist 
Federal agencies in determining whether or not a qualifying biobased 
product overlaps with EPA-designated re-refined lubricating oils and 
which product should be afforded the preference in purchasing.

    Note to paragraph (d):  Biobased multipurpose lubricant products 
within this designated item can compete with similar multipurpose 
lubricant products with recycled content. Under the Resource 
Conservation and Recovery Act of 1976, section 6002, the U.S. 
Environmental Protection Agency designated re-refined lubricating 
oils containing recovered materials as items for which Federal 
agencies must give preference in their purchasing programs. The 
designation can be found in the Comprehensive Procurement Guideline, 
40 CFR 247.11.

Sec.  2902.58  [Reserved]


Sec.  2902.59  Topical pain relief products.

    (a) Definition. Products that can be balms, creams and other 
topical treatments used for the relief of muscle, joint, headache, and 
nerve pain, as well as sprains, bruises, swelling, and other aches.
    (b) Minimum biobased content. The preferred procurement product 
must have a minimum biobased content of at least 91 percent, which 
shall be based on the amount of qualifying biobased carbon in the 
product as a percent of the weight (mass) of the total organic carbon 
in the finished product.
    (c) Preference compliance date. No later than October 18, 2011, 
procuring agencies, in accordance with this part, will give a 
procurement preference for qualifying biobased topical pain relief 
products. By that date, Federal agencies that have the responsibility 
for drafting or reviewing specifications for items to be procured shall 
ensure that the relevant specifications require the use of biobased 
topical pain relief products.


Sec.  2902.60  Turbine drip oils.

    (a) Definition. Products that are lubricants for use in drip 
lubrication systems for water well line shaft bearings, water turbine 
bearings for irrigation pumps, and other turbine bearing applications.
    (b) Minimum biobased content. The preferred procurement product 
must have a minimum biobased content of at least 87 percent, which 
shall be based on the amount of qualifying biobased carbon in the 
product as a percent of the weight (mass) of the total organic carbon 
in the finished product.
    (c) Preference compliance date. No later than October 18, 2011, 
procuring agencies, in accordance with this part, will give a 
procurement preference for qualifying biobased turbine drip oils. By 
that date, Federal agencies that have the responsibility for drafting 
or reviewing specifications for items to be procured shall ensure that 
the relevant specifications require the use of biobased turbine drip 
oils.

    Dated: October 12, 2010.
Pearlie S. Reed,
Assistant Secretary for Administration, U.S. Department of Agriculture.
[FR Doc. 2010-26122 Filed 10-15-10; 8:45 am]
BILLING CODE 3410-93-P