[Federal Register Volume 80, Number 114 (Monday, June 15, 2015)]
[Rules and Regulations]
[Pages 34023-34030]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-14418]



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Federal Register / Vol. 80, No. 114 / Monday, June 15, 2015 / Rules 
and Regulations

[[Page 34023]]



DEPARTMENT OF AGRICULTURE

Office of Procurement and Property Management

7 CFR Part 3201

RIN 0599-AA23


Guidelines for Designating Biobased Products for Federal 
Procurement

AGENCY: Office of Procurement and Property Management, USDA.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The U.S. Department of Agriculture (USDA) is amending its 
regulations concerning Guidelines for Designating Biobased Products for 
Federal Procurement to incorporate statutory changes to section 9002 of 
the Farm Security and Rural Investment Act (FSRIA) that went into 
effect when the Agricultural Act of 2014 (the 2014 Farm Bill) was 
signed into law on February 7, 2014.

DATES: This rule is effective July 15, 2015.

FOR FURTHER INFORMATION CONTACT: Ron Buckhalt, USDA, Office of 
Procurement and Property Management, Room 361, Reporters Building, 300 
7th St. SW., Washington, DC 20024; email: 
[email protected]; phone (202) 205-4008. Information 
regarding the federal biobased 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. Executive Summary
II. Authority
III. Background
IV. Summary of Changes
V. Discussion of Public Comments
VI. Regulatory Information
    A. Executive Orders 12866 and 13563: 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. Executive Summary

    USDA is amending 7 CFR part 3201 to incorporate statutory changes 
to section 9002 of the Farm Security and Rural Investment Act made by 
enactment of the Agricultural Act of 2014 on February 7, 2014.

A. Summary of Major Provisions of the Final Rule

1. Revisions to the BioPreferred Program Definitions
    USDA is amending 7 CFR 3201.2 by revising one definition and adding 
two new definitions for terms that are used in the Guidelines as a 
result of revisions to section 9002 made by the 2014 Farm Bill. USDA is 
revising the definition of ``biobased product'' to state that the term 
includes forest products that meet biobased content requirements, 
notwithstanding the market share the product holds, the age of the 
product, or whether the market for the product is new or emerging.
    USDA is adding definitions for the terms ``forest product'' and 
``renewable chemical.'' These terms were defined in the text of the 
2014 Farm Bill and USDA is proposing to add them verbatim to the 
BioPreferred Program Guidelines.
    USDA is also deleting the current definition of ``forestry 
materials'' from section 3201.2. USDA is deleting the existing 
definition of the term ``forestry materials'' because the newly defined 
term ``forest product'' is more appropriate and, thus, will generally 
replace the existing term.
2. Addition of Reporting Requirements
    USDA is also adding a new paragraph (b)(1)(iv) to section 3201.4 to 
require federal agencies to report the quantities and types of biobased 
products purchased. This new paragraph responds to specific language 
included in the 2014 Farm Bill and is intended to provide a means by 
which the effectiveness of the BioPreferred Program can be measured.
3. Addition of Targeted, Biobased-Only Purchasing Requirement
    USDA is also adding a new paragraph (b)(4) to section 3201.4 
``Procurement programs.'' This new paragraph adds the 2014 Farm Bill 
requirement that federal procuring agencies establish a targeted 
biobased-only procurement requirement under which the procuring agency 
must issue a certain number of biobased-only contracts when the agency 
is purchasing products, or purchasing services that include the use of 
products, that are included in a biobased product category designated 
by the Secretary.
4. Addition of Criteria for Evaluating ``Innovative Approaches''
    USDA is also adding paragraphs to section 3201.5 ``Category 
designation'' to expand the description of the procedures and 
considerations for designating product categories, including those 
product categories that were excluded from the BioPreferred Program 
under the previous mature market products exclusion. The Conference 
Report on the 2014 Farm Bill states: ``It is the Managers' intention 
that all products in the program use innovative approaches in the 
growing, harvesting, sourcing, procuring, processing, manufacturing, or 
application of the biobased product.'' USDA is, therefore, 
incorporating criteria to be used when evaluating whether biobased 
products meet the requirement to use ``innovative approaches.''

B. Costs, Benefits, and Transfers

----------------------------------------------------------------------------------------------------------------
                 Type                           Costs                   Benefits                Transfers
----------------------------------------------------------------------------------------------------------------
Quantitative.........................  Unable to quantify at    Unable to quantify at    Unable to quantify at
                                        this time.               this time.               this time.

[[Page 34024]]

 
Qualitative..........................  1. Costs of developing   Advances the objectives  1. Opens new (federal)
                                        biobased alternative     of the BioPreferred      market for biobased
                                        products.                Program, as envisioned   products that USDA
                                       2. Costs to gather and    by Congress in           newly designates.
                                        submit biobased          developing the 2002,    2. Opportunity for
                                        product information      2008, and 2014 Farm      newly developed
                                        for BioPreferred Web     Bills.                   biobased products to
                                        site.                                             be publicized via
                                                                                          BioPreferred Web site.
                                                                                         3. Loss of market share
                                                                                          by manufacturers who
                                                                                          choose not to offer
                                                                                          biobased versions of
                                                                                          products.
----------------------------------------------------------------------------------------------------------------

II. Authority

    The Guidelines for Designating Biobased Products for Federal 
Procurement (the Guidelines) are established under the authority of 
section 9002 of the Farm Security and Rural Investment Act of 2002 (the 
2002 Farm Bill), as amended by the Food, Conservation, and Energy Act 
of 2008 (the 2008 Farm Bill), and further amended by the Agricultural 
Act of 2014 (the 2014 Farm Bill), 7 U.S.C. 8102. (Section 9002 of the 
2002 Farm Bill, as amended by the 2008 and the 2014 Farm Bills, is 
referred to in this document as ``section 9002'').

III. Background

    As originally enacted, section 9002 provides for the preferred 
procurement of biobased products by federal agencies. USDA proposed the 
Guidelines for implementing this preferred procurement program on 
December 19, 2003 (68 FR 70730-70746). The Guidelines were promulgated 
on January 11, 2005 (70 FR 1792), and are contained in 7 CFR part 3201, 
``Guidelines for Designating Biobased Products for Federal 
Procurement.''
    The Guidelines identify various procedures federal agencies are 
required to follow in implementing the requirements of section 9002. 
They were modeled in part on the ``Comprehensive Procurement Guidelines 
for Products Containing Recovered Materials'' (40 CFR part 247), which 
the Environmental Protection Agency (EPA) issued pursuant to the 
Resource Conservation Recovery Act (``RCRA''), 40 U.S.C. 6962.
    On June 18, 2008, the 2008 Farm Bill was signed into law. Section 
9001 of the 2008 Farm Bill included several provisions that amended the 
provisions of section 9002. USDA subsequently amended the Guidelines to 
incorporate those provisions of the 2008 Farm Bill (79 FR 44641).
    The purpose of these amendments is to further revise the Guidelines 
to incorporate additional changes to section 9002 that were included in 
the 2014 Farm Bill. These revisions to the Guidelines will not affect 
products that have already been designated for federal procurement 
preference. Any changes necessary to the existing designation status of 
products will be established by future rule-makings.

IV. Summary of Changes

    As a result of public comments received on the proposed amendments 
to the Guidelines, USDA has made changes in finalizing the amendments. 
These changes are summarized in the remainder of this section. A 
summary of each comment received, USDA's response to the comment or 
group of related comments, and the rationale for any change made in the 
final rule is presented in section V.

A. 7 CFR 3201.2--Definitions

    USDA is finalizing the proposed definitions with no changes.

B. 7 CFR 3201.4--Procurement Programs

    This section has been finalized as proposed.

C. 7 CFR 3201.5--Category designation

    In the final rule, USDA added a sentence at 3201.5(b)(2) to clarify 
that evidence of an innovative approach will not be restricted to only 
those innovative criteria listed in the Guidelines and that 
consideration of other evidence will be on a case by case basis.
    USDA also revised the proposed language in paragraph (b)(2)(i) and 
(ii) to add the word ``biobased'' to the description of products or 
materials that qualify under the first two criteria and also added a 
paragraph (b)(2)(i)(C) stating that products meet the criteria if the 
biobased content of the product or material makes its composition 
different from products or material used for the same historical uses 
or applications.

D. 7 CFR 3201.6--Providing Product Information to Federal Agencies

    This section has been finalized as proposed.

V. Discussion of Public Comments

    USDA solicited comments on the proposed amendments for 60 days 
ending on December 26, 2014. USDA received ten comments by that date. 
One of the comments was from an individual citizen, five were from 
industry trade groups, one was from a biobased product manufacturer, 
one was from an academic institution, and two were from federal 
agencies. The comments are presented below, along with USDA's 
responses, and are grouped by the Code of Federal Regulation (CFR) 
section numbers to which they apply.

A. General Comments on BioPreferred Program

    Comment: Several commenters were supportive of USDA's efforts to 
include innovative forestry products in the BioPreferred Program and to 
encourage consumers to use biobased products. One commenter stated that 
this inclusion will ``promote the use of sustainable materials,'' 
enhance rural and national economic development, and ``broaden the 
range of products included in the definition of ``forest products'' and 
``renewable chemicals.'' '' Another commenter stated generally that the 
BioPreferred Program and its proposed changes are defined well.
    Response: USDA appreciates the support of the commenters.

B. 7 CFR 3201.2--Definitions

    Comment: One commenter agreed with USDA's proposed definitions for 
``Biobased product'' and ``Forest product.'' Another commenter stated 
that ``biobased-only contracts'' should be defined in the program 
Guidelines and provided a possible definition.
    Response: USDA thanks the commenters for their input. Regarding the 
definition of ``biobased-only contracts,'' USDA's Office of Procurement 
and Property Management (OPPM) will take the issue to the Interagency 
Sustainable Acquisition and Materials Management Practices Workgroup 
(SAMM). USDA OPPM, as part of the SAMM, will work with other agencies 
to determine whether a definition of biobased-only contracts is needed.

[[Page 34025]]

    Comment: One commenter stated that the definition of ``Biobased 
product'' should be modified to include renewable chemicals. The 
commenter stated that renewable chemicals are already included within 
the existing statutory and regulatory definition, and proposed that the 
regulatory definition needs to change to add ``renewable chemical'' so 
that the definition includes the words ``intermediate ingredient, 
renewable chemical, or feedstock.''
    Response: USDA's believes that when definitions of key BioPreferred 
Program terms are provided in the Farm Bill language authorizing the 
Program, those definitions should be used without changes. The proposed 
definition of ``biobased product'' is taken verbatim from Section 9001 
of the 2014 Farm Bill. USDA agrees with the commenter that renewable 
chemicals are an important segment of biobased products and is adding a 
stand-alone definition of ``renewable chemical'' to the Guidelines to 
clarify the inclusion of these products in the BioPreferred Program. 
The definition of ``biobased product'' has not been revised, however, 
and is being finalized as proposed.

C. 7 CFR 3201.4--Procurement Programs

1. 7 CFR 3201.4(b)--Federal Agency Preferred Procurement Programs
    Comment: Three commenters stated that USDA should provide more 
guidance for federal agencies on how to establish the proposed targeted 
biobased-only procurement requirement and that USDA should specify what 
information this requirement needs to include. Two of the commenters 
stated that more guidance from USDA and clearer definition of 
``Biobased Procurement'' would limit ``significant differences in 
implementation,'' ``inconsistencies in the results of interagency 
assessment,'' and ``green washing.''
    One commenter asked USDA to consider several questions, such as how 
it differs from other procurement programs, if it is only defined by 
having FAR Clause 52.223-1 or 52.223-2 in a contract, if buying a 
product with a ``Biobased symbol'' on GSA Advantage is enough, and if 
it excludes ``other sustainability programs such as recycling or energy 
efficiency.'' This commenter also asked for more details on 
``applicability, data sources, standard data collection methods and 
consistent analysis of data collected.''
    Another commenter recommended that USDA work closely with the 
Sustainable Acquisition and Materials Management Practices Workgroup to 
provide guidance to federal agencies and their contractors on 
fulfilling the new reporting requirement. The commenter stated that 
this guidance should be ``implemented via a policy directive from the 
Office of Management and Budget/OFPP [Office of Federal Procurement 
Policy]'' such that overlapping reporting requirements and the 
reporting burden on federal agencies and their contractors are reduced.
    Response: USDA appreciates the comments provided by these 
commenters and agrees with the commenters that communication, 
coordination, and guidance will be needed to fully implement the 
biobased-only contracts requirement as well as the collection and 
reporting of data regarding biobased purchases. While USDA is committed 
to working with federal agencies to develop and implement procedures 
for complying with the requirements of the 2014 Farm Bill and the 
BioPreferred Program, those efforts will be separate from the current 
efforts to finalize the amendments to the Program Guidelines. USDA OPPM 
will take this 2014 Farm Bill requirement for biobased-only contracts 
to the interagency Sustainable Acquisition and Materials Management 
Practices (SAMM) Workgroup. OPPM, as part of the SAMM, will work with 
other agencies to develop guidance. Specific questions regarding how 
the procurement programs should work will be addressed with Workgroup 
members rather than in the context of these Guideline amendments.
2. Sec.  3201.4(b)(1)(iii)--Provisions for the Annual Review and 
Monitoring of the Effectiveness of the Procurement Program
    Comment: One commenter noted that this new reporting requirement 
creates an additional burden on federal agencies and their contractors 
because there is not an electronic means of effectively documenting 
this information at ``the individual product level,'' specifying that 
the Federal Procurement Data System is not designed to do so.
    Another commenter stated that USDA should decide which data sources 
to use for collecting the annual biobased procurement results: 
``Federal Procurement Data System (FPDS), SAMM.gov, or General Services 
Administration and Defense Logistics Agency.'' In addition, the 
commenter indicated that USDA should issue a standard method for how 
the data will be collected and analyzed and that USDA should conduct 
the data review via a third-party.
    A third commenter stated that for the proposed reporting 
requirement to be successful, it should be ``codified in the Federal 
Acquisition Regulation and a specific reporting portal (such as the 
Federal Procurement Data System--Next Generation or the System for 
Award Management [SAM]) should be identified for agencies'' to report 
the data. This commenter urged USDA to ``take additional steps'' to 
make sure that federal agencies fulfill the reporting requirement. The 
commenter suggested implementing a new feature in SAM that would allow 
federal agencies to report quantities and types of biobased products 
that they purchased, because there is already a FAR clause in SAM that 
requires prime contractors to report product types and dollar values of 
biobased products that are purchased annually.
    Response: USDA appreciates the comments and recommendations offered 
by the commenters on the recordkeeping and reporting requirements. USDA 
agrees with the commenters that communication, coordination, and 
guidance will be needed to fully implement the requirements for the 
collection and reporting of data regarding biobased purchases. Federal 
government-wide data on biobased product purchases are entered into the 
System for Award Management (SAM) by Contractors entering data into the 
BioPreferred portal. This is the automated procurement system that has 
officially been endorsed by the Chief Acquisition Officers Council, 
OFPP and the federal government agencies. USDA OPPM is using it to 
fulfill this requirement. Thus, while USDA is committed to working with 
federal agencies to develop and implement procedures for complying with 
the requirements of the 2014 Farm Bill and the BioPreferred Program, 
those efforts will be separate from the current efforts to finalize the 
amendments to the Program Guidelines.
3. Sec.  3201.4(b)(1)(iv)--Provisions for Reporting Quantities and 
Types of Biobased Products Purchased by the Federal Agency
    Comment: Two commenters provided feedback on what reporting data 
federal agencies should provide to USDA regarding their annual 
biobased-only purchases. One commenter recommended that USDA should 
first establish a baseline for the rate of biobased procurement for 
federal agencies and then examine this rate after each year. The same 
commenter stated that after determining this baseline, USDA should work 
with agencies to set an annual percentage

[[Page 34026]]

growth rate goal. Another commenter stated that the reporting 
requirement should specify biobased procurement quantities in ``dollar 
values.''
    Response: As discussed in the response to the previous comment, 
USDA appreciates the input from the commenters but does not believe 
that it is appropriate to make any revisions to the proposed amendments 
to the Guidelines. Federal government-wide data on biobased product 
purchases are entered into the System for Award Management (SAM) by 
Contractors entering data into the BioPreferred portal. This is the 
automated procurement system that has officially been endorsed by the 
Chief Acquisition Officers Council, OFPP and the federal government 
agencies. USDA OPPM is using it to fulfill this requirement. There will 
be an amendment to the FAR requesting that FAR Clause 52.223-2 be 
revised to add quantities. As presently written, it requires the 
Contractor to report on product types and dollars to the SAM. USDA OPPM 
will seek to amend it to add quantities.
4. Sec.  3201.4(b)(4)--Targeted Biobased-Only Procurement Requirement
    Comment: Three commenters requested that USDA offer more details on 
how federal agencies should establish a set number of biobased-only 
contracts under this proposed requirement. One commenter inquired 
whether the goal for federal agencies to meet is a set number of 
contracts, a certain percentage of contracts with specific FAR clauses, 
or a certain value based on a total agency spend threshold. This 
commenter asked if specific service contracts should be targeted, as 
well. Another commenter suggested that instead of stating in proposed 
Sec.  3201.4(b)(4) that a procuring agency should issue ``a certain 
number of biobased-only contracts,'' that the proposed rule should 
state that the agency should issue ``a minimum of 20'' biobased 
contracts ``annually, unless a lower or higher number is justified by 
market research on the availability of products.'' The same commenter 
suggested adding the following sentence at the end of the proposed rule 
Sec.  3201.4(b)(4), ``Each procuring agency shall report the number of 
biobased-only contracts issued annually and the types and dollar values 
of biobased products purchased directly under these contracts or used 
by contractors in carrying out the services provided under the 
contracts.'' The third commenter advised that federal agencies should 
select a set amount of the current year's planned contracts to be 
biobased-only based on the previous year's purchase of products and 
services. The commenter also stated that, as an option, federal 
agencies could select the top 10 products based on their previous 
year's purchase of products and services to be biobased-only.
    Response: USDA agrees with the commenters that additional guidance 
will be needed to fully implement the biobased-only contracts 
requirement. USDA will take this 2014 Farm Bill requirement for 
biobased-only contracts to the interagency SAMM Workgroup. USDA, as 
part of the SAMM, will work with other agencies to develop guidance. 
While USDA is committed to working with federal agencies to develop and 
implement procedures for complying with the requirements of the 2014 
Farm Bill and the BioPreferred Program, those efforts will be separate 
from the current efforts to finalize the amendments to the Program 
Guidelines.

D. 7 CFR 3201.5--Category Designation

1. 7 CFR 3201.5(b)(2)--Innovative Approach Criteria
    Comment: Three commenters expressed support for USDA for allowing 
forestry and other traditional biobased products to be eligible for 
participation in the BioPreferred Program. Of these three commenters, 
two expressed overall support for the proposed criteria for 
demonstrating innovative approaches as a means of evaluating all 
biobased products that may be eligible for participation in the 
BioPreferred Program. One of the commenters stated that these proposed 
criteria are ``reasonable and provide companies submitting products a 
clear and consistent manner to demonstrate the innovative nature of 
their product'' and that they also allow manufacturers the ability to 
demonstrate innovation for products that are not easily categorized in 
the options that USDA outlined. The other commenter stated that these 
proposed criteria ``will help expand the use of biobased products.'' 
The third commenter pointed out that USDA only requires reviewing 
information for the proposed criterion in Sec.  3201.5(b)(2)(i) but not 
for any of the others; thus, the commenter asked what information USDA 
would review to ``implement'' the other proposed criteria. This 
commenter also questioned whether this proposed rule would be applied 
in a ``multi-plant manufacturing scenario'': would it be applied at the 
product or at the manufacturing plant level, and would one plant's 
compliance be sufficient for all plants?
    Response: USDA thanks the commenters for their support of, and 
participation in, the BioPreferred Program. In response to the one 
commenter's questions, the text that was proposed and is being 
finalized for paragraph (b)(2) identifies the criteria that USDA will 
use to determine a product's eligibility to participate in the Program. 
USDA has specified in the text that product manufacturers may be asked 
to provide documentation to verify their claims that they are meeting 
any one of the criteria. Submitting an EPD is one of the means 
available for manufacturers to demonstrate that their biobased products 
meet the ``innovative approach'' criteria. Various other types of 
documentation are also acceptable. In evaluating whether the criteria 
have been met, USDA will work with manufacturers on a case by case 
basis to determine the most appropriate documentation. Also, USDA 
review of information to determine eligibility to participate in the 
BioPreferred Program is product specific, but is independent of the 
actual manufacturing plant in which the product is produced. That is, 
if a manufacturer produces product A in two different locations and the 
product is otherwise identical, the manufacturer only has to apply for 
registration of their product once.
    Comment: One commenter stated that the proposed rule in Sec.  
3201.5(b)(2) is unclear and asked if it should it be read with the 
current rule in Sec.  3201.5(b)(1) or if it would be ``used 
independently to designate products.'' This commenter stated that the 
2014 Farm Bill wording ``implies the latter,'' while the proposed rule 
``implies the former.'' The commenter stated that a ``federal 
preference program'' should not endorse products on the grounds that 
they contain biobased ingredients and that they are ``new and 
different'' from the way products were manufactured historically 
instead of considering whether the products are better for the 
environment and human health, or perform better than those that are 
currently available. Additionally, this commenter recommended that USDA 
apply these proposed criteria in a manner such that federal agencies 
are not required to choose between a ``biobased product that does not 
meet other federal purchasing requirements such as less-ozone-
depleting'' and a non-biobased product that meets these requirements 
within a particular product category when making purchasing decisions. 
This commenter was also concerned that the proposed criteria Sec.  
3201.5(b)(2) would ``expand the reach'' of the BioPreferred Program 
``beyond what was originally intended.'' The commenter recommended that 
the proposed criterion for an Environmental

[[Page 34027]]

Product Declaration (EPD) should merely supplement the product's 
participation in the BioPreferred Program, instead of being a 
requirement for it.
    Response: The amendments that were proposed and are being finalized 
by this final rule revise paragraph (b)(2) but do not change existing 
paragraph (b)(1). Paragraph (b)(1) states that USDA will establish a 
minimum biobased content for designated product categories and that the 
product categories will be listed in subpart B of part 3201. While USDA 
understands the commenter's position regarding consideration of 
environment and human health impacts, the statutory requirements of the 
2002 Farm Bill, as amended in the 2008 and 2014 Farm Bills, mandate 
that the BioPreferred Program promote and give a preference to the 
purchase of biobased products. USDA does not have the authority nor the 
resources to evaluate the life cycle environmental and human health 
impacts of biobased products compared to those of traditional petroleum 
based products. USDA does present manufacturer-supplied information 
regarding the performance of products in cases where the manufacturer 
provides such information. However, as with life cycle impacts, USDA 
does not have the statutory authority or the resources to independently 
investigate the performance of products that participate in the 
Program.
    Comment: One commenter expressed concern that the paragraph in 
Sec.  3201.5(b)(2) was written specifically for forestry products, 
which could cause issues for non-forestry ones. Thus, the commenter 
suggested clarifying the introductory paragraph in Sec.  3201.5(b)(2) 
by adding the word ``biobased'' in front of ``product'' and 
``products.'' The commenter also suggested clarifying Sec.  
3201.5(b)(2)(i) and (ii) to read:

    (i) Product composition and applications. (A) The biobased 
product or material is used or applied in applications that differ 
from historical applications; (B) The biobased product or material 
is grown, harvested, manufactured, processed, sourced, or applied in 
other innovative ways.; or (C) The biobased content of the product 
or material makes its composition different from products used for 
the same historical uses or applications.
    (ii) Manufacturing and processing. (A) The biobased product or 
material is manufactured or processed using renewable, biomass 
energy or using technology that is demonstrated to increase energy 
efficiency or reduce reliance on fossil fuel based energy sources; 
or (B) The biobased product or material is manufactured or processed 
with technologies that ensure high feedstock material recovery and 
use; or (C) The product or material is manufactured or processed in 
a way that adds biobased content.

    Two additional commenters supported USDA in designating 
intermediate chemical categories according to ``functional use'' 
because it ``offers transparent linkage to the established finished 
product categories of the Program, as well as recognizing their 
functional importance in the BioPreferred value chain.'' Each commenter 
provided the same list of ``priority'' intermediate chemical categories 
based upon functional use.
    Response: USDA agrees with the commenter that certain edits to the 
proposed language add clarity to the rule and, thus, will revise the 
proposed language for the final rule. However, USDA disagrees with the 
commenter's recommendation to include the statement that the 
manufacturing and processing criteria should be revised to specifically 
include processes that ``add biobased content.'' Many biobased products 
are made by replacing petroleum-based components of traditional 
products with biobased components, which could be characterized as 
adding biobased content, and these products would be covered by 
criterion (i)(C) in the commenter's edited paragraphs. Thus, there 
would be no benefit to adding a third item to the manufacturing and 
processing criterion.
2. Sec.  3201.5(b)(2)(iii)--Environmental Product Declaration
    Comment: One commenter provided USDA with two examples of a Type 
III EPD and noted that the EPD requires a product to meet ``Product 
Category Rules.'' The commenter pointed out that this information ``may 
or may not be available and would require time to develop.'' The 
commenter added that the ``LCA related data'' included in the EPD will 
assist in comparing products but inquired how federal agencies will use 
this data. Additionally, the commenter asked if there is an advantage 
to using this data as one means of defining ``biobased purchasing.''
    Response: USDA points out that the proposal did not make it a 
``requirement'' that a manufacturer submit an Environmental Product 
Declaration (EPD) to participate in the BioPreferred Program. 
Submitting an EPD is one of the means available for manufacturers to 
demonstrate that their biobased products meet the ``innovative 
approach'' criteria. Various other types of documentation are also 
acceptable. USDA also agrees that not all manufacturers have EPDs for 
their products and that the completion of an EPD can be time consuming. 
The purpose of requesting documentation such as, but not limited to, an 
EPD is to demonstrate that the manufacturer meet Congress' intention 
that ``all products in the program use innovative approaches in the 
growing, harvesting, sourcing, procuring, processing, manufacturing, or 
application of the biobased product.'' Because not all manufacturers 
have performed an EPD, USDA does not believe that it would be 
beneficial to require this type of data in defining ``biobased 
purchases'' by federal agencies. USDA's position is that purchases of 
biobased products that have been accepted into the BioPreferred Program 
and are, thus, listed in the Program's Biobased product catalog are 
eligible to be counted as ``biobased purchases.''
3. Sec.  3201.5(b)(2)(iv)--Raw Material Sourcing
    Comment: One commenter wanted USDA to take into account that a 
finished wood product may be sourced domestically or globally; thus, 
the commenter cautioned USDA that the criteria proposed in Sec.  
3201.5(b)(2)(iv) do not ``inadvertently create a technical barrier to 
trade'' and do not exclude imported wood products that were harvested 
and exported legally in the U.S. and in their country of origin. This 
commenter recommended that USDA recognize in the proposed rule that new 
certification schemes for forestry products develop every year; as 
such, the commenter encouraged USDA to include ``new legality 
systems,'' for example, the Voluntary Partnership Agreements under the 
European Union's Forest Law Enforcement, Governance and Trade Action 
Plan as another way to demonstrate innovation. In addition, the 
commenter advised USDA to be aware that the definitions for ``legal, 
responsible, or certified sources'' are not applied such that 
innovation in forestry management and certification are not considered. 
The commenter looked forward to ``working closely with USDA'' to help 
implement these rules.
    Response: USDA agrees with the commenters that the proposed 
innovative criteria should not be considered as an all-inclusive list. 
USDA recognizes that sustainability advances are occurring worldwide 
and does not intend that new and valid certifications be excluded from 
consideration by the BioPreferred Program. In the final rule, USDA will 
clarify that evidence of an innovative approach will not be restricted 
to only those innovative criteria listed in the Guidelines and that 
consideration of other evidence will be on a case-by-case basis.

[[Page 34028]]

E. 7 CFR 3201.6--Providing Product Information to Federal Agencies

    No comments were received on the revisions proposed for this 
section.

VI. Regulatory Information

A. Executive Orders 12866 and 13563: Regulatory Planning and Review

    Executive Orders 13563 and 12866 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. This rule has been designated a ``non-significant 
regulatory action'' under section 3(f) of Executive Order 12866. 
Accordingly, the final rule was not reviewed by the Office of 
Management and Budget.
1. Need for the Rule
    Today's final rule amends the BioPreferred Program Guidelines to 
establish the regulatory framework for the designation of product 
categories that were previously excluded from the federal procurement 
preference because they were mature market products. The designation of 
such products is specifically required under the Agricultural Act of 
2014, which states that the Guidelines shall: ``(vi) Promote biobased 
products, including forest products, that apply an innovative approach 
to growing, harvesting, sourcing, procuring, processing, manufacturing, 
or application of biobased products regardless of the date of entry 
into the marketplace.''
2. Transfers
    This rule advances the objectives of the BioPreferred Program, as 
envisioned by Congress in the 2002, 2008 and 2014 Farm Bills, by 
expanding the scope of products that may be considered for federal 
procurement preference. The entry into the BioPreferred Program of 
biobased products that were previously considered to be mature market 
products will open a new federal market for biobased products that are 
designated by USDA and also provides newly developed biobased products 
to be publicized via the BioPreferred Web site. Thus, the rule is 
expected to increase demand for these products once designated, which, 
in turn, is expected to increase demand for those agricultural products 
that can serve as ingredients and feedstocks. This federal procurement 
preference will thus yield private benefits for businesses producing 
these ingredients and feedstocks.
    Simultaneously, this action could reduce demand for products that 
do not receive federal procurement preference designation. Producers of 
biobased products, including intermediate ingredients and feedstocks, 
that are not so designated or producers of non-biobased products could 
face a loss of market share within federal procurement.
3. Costs
    Manufacturers of biobased products will incur the actual costs of 
developing the biobased products as well as the costs to gather and 
submit the biobased product information for the BioPreferred Web site. 
The costs of developing and marketing new products are, in this case, a 
voluntary expense if manufacturers choose to pursue a share of the 
biobased product market.
    Although this rule amends or establishes procedures for designating 
qualifying biobased product categories, no product categories are being 
designated today. The actual designation of biobased product categories 
under this program will be accomplished through future rulemaking 
actions and the effect of those rulemakings on the economy will be 
addressed at that time.

B. Regulatory Flexibility Act (RFA)

    The RFA, 5 U.S.C. 601-602, generally requires an agency to prepare 
a regulatory flexibility analysis of any rule subject to notice and 
comment rulemaking requirements under the Administrative Procedure Act 
or any other statute unless the agency certifies that the rule will not 
have a significant economic impact on a substantial number of small 
entities. Small entities include small businesses, small organizations, 
and small governmental jurisdictions.
    Although the BioPreferred Program ultimately may have a direct 
impact on a substantial number of small entities, USDA has determined 
that this final rule itself does not have a direct significant economic 
impact on a substantial number of small entities. This rule directly 
affects federal agencies, which are required to consider designated 
products for purchase. In addition, private sector manufacturers and 
vendors of biobased products voluntarily may provide information to 
USDA through the means set forth in this rule. However, the rule 
imposes no requirement on manufacturers and vendors to do so, and does 
not differentiate between manufacturers and vendors based on size. USDA 
does not know how many small manufacturers and vendors may opt to 
participate at this stage of the program.
    As explained above, when USDA issues a proposed rulemaking to 
designate product categories for preferred procurement under this 
program, USDA will assess the anticipated impact of such designations, 
including the impact on small entities. USDA anticipates that this 
program will positively impact small entities that manufacture or sell 
biobased products. For example, once product categories are designated, 
this program will provide additional opportunities for small businesses 
to manufacture and sell biobased products to federal agencies. This 
program also will impact indirectly small entities that supply biobased 
materials to manufacturers. Additionally, this program may decrease 
opportunities for small businesses that manufacture or sell non-
biobased products or provide components for the manufacturing of such 
products. It is difficult for USDA to definitively assess these 
anticipated impacts on small entities until USDA proposes product 
categories for designation. This rule does not designate any product 
categories.

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

    This final 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 have implications for these rights.

D. Executive Order 12988: Civil Justice Reform

    This final 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 final rule does not have sufficient federalism implications to 
warrant the preparation of a Federalism Assessment. The provisions of 
this rule do 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.

[[Page 34029]]

F. Unfunded Mandates Reform Act of 1995

    This final 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.

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

    This final rule has been reviewed in accordance with the 
requirements of Executive Order 13175, Consultation and Coordination 
with Indian Tribal Governments. The review reveals that this final rule 
will not have substantial and direct effects on Tribal governments and 
will not have significant Tribal implications.

I. Paperwork Reduction Act

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

J. E-Government Act Compliance

    USDA 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 
federal 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 3201

    Biobased products, Procurement.

    For the reasons stated in the preamble, the Department of 
Agriculture is amending 7 CFR part 3201 as follows:

PART 3201--GUIDELINES FOR DESIGNATING BIOBASED PRODUCTS FOR FEDERAL 
PROCUREMENT

0
1. The authority citation for part 3201 continues to read as follows:

    Authority:  7 U.S.C. 8102.

0
2. Section 3201.2 is amended by:
0
a. Revising the definition of ``Biobased product'';
0
b. Removing the definition of ``Forestry materials''; and
0
c. Adding, in alphabetical order, definitions for ``Forest product'' 
and ``Renewable chemical''.
    The revision and additions read as follows:


Sec.  3201.2  Definitions.

* * * * *
    Biobased product. (1) A product determined by USDA to be a 
commercial or industrial product (other than food or feed) that is:
    (i) Composed, in whole or in significant part, of biological 
products, including renewable domestic agricultural materials and 
forestry materials; or
    (ii) An intermediate ingredient or feedstock.
    (2) The term ``biobased product'' includes, with respect to 
forestry materials, forest products that meet biobased content 
requirements, notwithstanding the market share the product holds, the 
age of the product, or whether the market for the product is new or 
emerging.
* * * * *
    Forest product. A product made from materials derived from the 
practice of forestry or the management of growing timber. The term 
``forest product'' includes:
    (1) Pulp, paper, paperboard, pellets, lumber, and other wood 
products; and
    (2) Any recycled products derived from forest materials.
* * * * *
    Renewable chemical. A monomer, polymer, plastic, formulated 
product, or chemical substance produced from renewable biomass.
* * * * *

0
3. Section 3201.4 is amended by revising paragraphs (b)(1)(i) through 
(iii) and adding paragraphs (b)(1)(iv) and (b)(4) to read as follows:


Sec.  3201.4  Procurement programs.

* * * * *
    (b) * * *
    (1) * * *
    (i) A preference program for purchasing qualified biobased 
products;
    (ii) A promotion program to promote the preference program;
    (iii) Provisions for the annual review and monitoring of the 
effectiveness of the procurement program; and
    (iv) Provisions for reporting quantities and types of biobased 
products purchased by the Federal agency.
* * * * *
    (4) No later than June 15, 2016, each Federal agency shall 
establish a targeted biobased-only procurement requirement under which 
the procuring agency shall issue a certain number of biobased-only 
contracts when the procuring agency is purchasing products, or 
purchasing services that include the use of products, that are included 
in a biobased product category designated by the Secretary.
* * * * *

0
4. Section 3201.5 is amended by adding paragraph (b)(2) to read as 
follows:


Sec.  3201.5  Category designation.

* * * * *
    (b) * * *
    (2) In designating product categories and intermediate ingredient 
or feedstock categories for the BioPreferred Program, USDA will 
consider as eligible only those products that use innovative approaches 
in the growing, harvesting, sourcing, procuring, processing, 
manufacturing, or application of the biobased product. USDA will 
consider products that meet one or more of the criteria in paragraphs 
(b)(2)(i) through (iv) of this section to be eligible for the 
BioPreferred Program. USDA will also consider other documentation of 
innovative approaches in the growing, harvesting, sourcing, procuring, 
processing, manufacturing, or application of biobased products on a 
case-by-case basis. USDA may exclude from the BioPreferred Program any 
products whose manufacturers are unable to provide USDA with the 
documentation necessary to verify claims that innovative approaches are

[[Page 34030]]

used in the growing, harvesting, sourcing, procuring, processing, 
manufacturing, or application of their biobased products.
    (i) Product applications. (A) The biobased product or material is 
used or applied in applications that differ from historical 
applications; or
    (B) The biobased product or material is grown, harvested, 
manufactured, processed, sourced, or applied in other innovative ways; 
or
    (C) The biobased content of the product or material makes its 
composition different from products or material used for the same 
historical uses or applications.
    (ii) Manufacturing and processing. (A) The biobased product or 
material is manufactured or processed using renewable, biomass energy 
or using technology that is demonstrated to increase energy efficiency 
or reduce reliance on fossil-fuel based energy sources; or
    (B) The biobased product or material is manufactured or processed 
with technologies that ensure high feedstock material recovery and use.
    (iii) Environmental Product Declaration. The product has a current 
Environmental Product Declaration as defined by International Standard 
ISO 14025, Environmental Labels and Declarations--Type III 
Environmental Declarations--Principles and Procedures.
    (iv) Raw material sourcing. (A) The raw material used in the 
product is sourced from a Legal Source, a Responsible Source, or a 
Certified Source as designated by ASTM D7612-10, Standard Practice for 
Categorizing Wood and Wood-Based Products According to Their Fiber 
Sources; or
    (B) The raw material used in the product is 100% resourced or 
recycled (such as material obtained from building deconstruction); or
    (C) The raw material used in the product is from an urban 
environment and is acquired as a result of activities related to a 
natural disaster, land clearing, right-of-way maintenance, tree health 
improvement, or public safety.
* * * * *

0
5. Section 3201.6 is amended by revising the first sentence of 
paragraph (a)(1) to read as follows:


Sec.  3201.6  Providing product information to Federal agencies.

    (a) * * *
    (1) * * * The Web site will, as determined to be necessary by the 
Secretary based on the availability of data, provide information as to 
the availability, price, biobased content, performance and 
environmental and public health benefits of the designated product 
categories and designated intermediate ingredient or feedstock 
categories. * * *
* * * * *

    Dated: June 5, 2015.
Gregory L. Parham,
Assistant Secretary for Administration, U.S. Department of Agriculture.
[FR Doc. 2015-14418 Filed 6-12-15; 8:45 am]
 BILLING CODE 3410-TX-P