[Federal Register Volume 81, Number 168 (Tuesday, August 30, 2016)]
[Rules and Regulations]
[Pages 59425-59427]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-20805]



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 Rules and Regulations
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  Federal Register / Vol. 81, No. 168 / Tuesday, August 30, 2016 / 
Rules and Regulations  

[[Page 59425]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1217

[Document Number AMS-SC-16-0054]


Softwood Lumber Research, Promotion, Consumer Education and 
Industry Information Order; Revision of Time Frame for Continuance 
Referenda

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim rule.

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SUMMARY: This interim rule invites comments on revising the time frame 
for continuance referenda under the Softwood Lumber Research, 
Promotion, Consumer Education and Industry Information Order (Order). 
The Order is administered by the Softwood Lumber Board (Board) with 
oversight by the U.S. Department of Agriculture (USDA). The Order 
requires USDA to conduct a continuance referendum five years after the 
program took effect (2011). This action revises this time frame from 
five years (2016) to no later than seven years (2018). This will allow 
time for USDA to complete a separate rulemaking action on the Order's 
exemption threshold. That rulemaking is being initiated in response to 
a federal district court decision in Resolute Forest Products Inc., v. 
USDA, et al. (Resolute). Once USDA completes that action, a continuance 
referendum will be conducted. The results of the exemption threshold 
rulemaking could impact who votes in the referendum and who pays 
assessments under the Order.

DATES: Effective August 31, 2016. Comments received by October 31, 2016 
will be considered prior to issuance of a final rule.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this interim rule. Comments may be submitted on the Internet 
at: http://www.regulations.gov or to the Promotion and Economics 
Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue 
SW., Room 1406-S, Stop 0244, Washington, DC 20250-0244; facsimile: 
(202) 205-2800. All comments should reference the document number and 
the date and page number of this issue of the Federal Register and will 
be made available for public inspection, including name and address, if 
provided, in the above office during regular business hours or it can 
be viewed at http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Maureen T. Pello, Marketing 
Specialist, Promotion and Economics Division, Specialty Crops Program, 
AMS, USDA, P.O. Box 831, Beavercreek, Oregon 97004; telephone: (503) 
632-8848; facsimile (503) 632-8852; or electronic mail: 
[email protected].

SUPPLEMENTARY INFORMATION: This interim rule is issued under the Order 
(7 CFR part 1217). The Order is authorized under the Commodity 
Promotion, Research and Information Act of 1996 (1996 Act) (7 U.S.C. 
7411-7425).

Executive Order 12866 and Executive Order 13563

    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, reducing costs, harmonizing rules and promoting flexibility. 
This action has been designated as a ``non-significant regulatory 
action'' under section 3(f) of Executive Order 12866. Accordingly, the 
Office of Management and Budget (OMB) has waived the review process.

Executive Order 13175

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

Executive Order 12988

    This interim rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. It is not intended to have retroactive effect. 
Section 524 of the 1996 Act (7 U.S.C. 7423) provides that it shall not 
affect or preempt any other Federal or State law authorizing promotion 
or research relating to an agricultural commodity.
    Under section 519 of the 1996 Act (7 U.S.C. 7418), a person subject 
to an order may file a written petition with USDA stating that an 
order, any provision of an order, or any obligation imposed in 
connection with an order, is not established in accordance with the 
law, and request a modification of an order or an exemption from an 
order. Any petition filed challenging an order, any provision of an 
order, or any obligation imposed in connection with an order, shall be 
filed within two years after the effective date of an order, provision, 
or obligation subject to challenge in the petition. The petitioner will 
have the opportunity for a hearing on the petition. Thereafter, USDA 
will issue a ruling on the petition. The 1996 Act provides that the 
district court of the United States for any district in which the 
petitioner resides or conducts business shall have the jurisdiction to 
review a final ruling on the petition, if the petitioner files a 
complaint for that purpose not later than 20 days after the date of the 
entry of USDA's final ruling.

Background

    This interim rule invites comments on revising the time frame for 
continuance referenda under the Order. The Order is administered by the 
Board with oversight by USDA. The Order requires USDA to conduct a 
continuance referendum five years after the program took effect (2011). 
This action revises this time frame from five years (2016) to no later 
than seven years (2018). This will allow time for USDA to complete a 
separate rulemaking action on the Order's exemption threshold. That 
rulemaking is being initiated in response to a federal district court 
decision in Resolute. Once USDA completes that action, a referendum 
will be conducted. The results of that rulemaking could impact who 
votes in the referendum and who pays assessments under the program.

[[Page 59426]]

    The softwood lumber program was promulgated in 2011. Assessment 
collection began in January 2012. Under the Order, assessments are 
collected from U.S. manufacturers (domestic) and importers and used for 
projects designed to increase the demand for softwood lumber within the 
United States. Softwood lumber is used in products like flooring, 
siding and framing. Entities that domestically ship or import less than 
15 million board feet annually are exempt from paying assessments.

Authorities and Action

    Section 518 of the 1996 Act (7 U.S.C. 7417) authorizes continuance 
referenda. Paragraph (b) of that section requires USDA to conduct a 
referendum not later than seven years after assessments first begin 
under an order. Under Sec.  1217.81(b)(2) of the softwood lumber Order, 
USDA must conduct a referendum five years after the program took effect 
to determine whether persons subject to assessment favor continuance of 
the Order, and then every five years thereafter. A referendum was 
initially scheduled for August 2016.
    USDA is conducting an analysis on the 15 million board foot 
exemption threshold under the Order, as specified in paragraphs (a) and 
(b) of section 1217.53. USDA is analyzing this threshold based on 
recent data and will publish the results of its analysis for public 
comment in a future rulemaking action. Once this rulemaking is 
completed, USDA will conduct a referendum. The results of that 
rulemaking could impact who votes in the referendum and who pays 
assessments under the program.
    USDA will be initiating the future rulemaking action on the Order's 
exemption threshold in response to a May 2016 federal district court 
decision in Resolute. All program obligations, including the collection 
of assessments and filing of reports, remain in effect.
    Therefore, USDA has postponed the August 2016 referendum and is 
revising paragraph (2) in section 1217.81(b) to specify that a 
referendum must be conducted no later than seven years (2018) after the 
program took effect. This will allow time for USDA to complete the 
rulemaking action on the exemption threshold under the program and 
conduct a referendum. Section 1217.81(b)(2) is revised accordingly. 
Authority for USDA to amend the Order is provided in section 1217.87 of 
the Order and in section 514(d) of the 1996 Act (7 U.S.C. 7413).

Initial Regulatory Flexibility Act Analysis

    In accordance with the Regulatory Flexibility Act (RFA) (5 U.S.C. 
601-612), AMS is required to examine the impact of the interim rule on 
small entities. Accordingly, AMS has considered the economic impact of 
this action on such entities.
    The purpose of the RFA is to fit regulatory actions to the scale of 
businesses subject to such actions so that small businesses will not be 
disproportionately burdened. The Small Business Administration defines, 
in 13 CFR part 121, small agricultural producers as those having annual 
receipts of no more than $750,000 and small agricultural service firms 
(domestic manufacturers and importers) as those having annual receipts 
of no more than $7.5 million.
    Based on 2015 Board data, it is estimated that there are about 375 
domestic manufacturers of softwood lumber in the United States. Using 
an average price of $330 per thousand board feet,\1\ a domestic 
manufacturer who ships less than about 23 million board feet per year 
would be considered a small entity. It is estimated that fewer than 240 
domestic manufacturers, or 64 percent, ship under 23 million board feet 
annually.
---------------------------------------------------------------------------

    \1\ Price data was obtained from Random Lengths Publications, 
Inc., and is a framing composite price that is designed as a broad 
measure of price movement in the lumber market. Random Lengths 
describes itself as a firm that ``provides the forest products 
industry with unbiased, consistent and timely reports of market 
activity and prices, related trends, issues, and analyses.'' 
(www.randomlengths.com).
---------------------------------------------------------------------------

    Likewise, based on 2015 U.S. Customs and Border Protection 
(Customs) data, it is estimated there are 890 importers of softwood 
lumber. About 790 importers, or 89 percent, each imported less than 
$7.5 million worth of softwood lumber annually. Thus, for purposes of 
the RFA, the majority of domestic manufacturers and importers of 
softwood lumber would be considered small entities.
    Regarding value of the commodity, with domestic consumption 
estimated at 43.9 billion board feet in 2015,\2\ and using a price of 
$330 per thousand board feet, the annual domestic value for softwood 
lumber is about $14.5 billion. According to 2015 Customs data, the 
annual value for softwood lumber imports is about $5.0 billion.
---------------------------------------------------------------------------

    \2\ Consumption data is from Forest Economic Advisors (FEA). FEA 
describes itself as a firm that ``brings modern econometric 
techniques to the forest products industry.'' (www.getfea.com).
---------------------------------------------------------------------------

    This interim rule invites comments on revising the time frame for 
continuance referenda under the Order. The Order is administered by the 
Board with oversight by USDA. Section 1217.81(b)(2) of the Order 
requires USDA to conduct a continuance referendum five years after the 
program took effect (2011). This action revises this section to change 
the time frame from five years (2016) to no later than seven years 
(2018). This will allow time for USDA to complete a separate rulemaking 
action on the Order's exemption threshold. That rulemaking is being 
initiated in response to a federal district court decision in Resolute. 
Once USDA completes that action, a referendum will be conducted. The 
results of that rulemaking could impact who votes in the referendum and 
who pays assessments under the program. Authority for this action is 
provided in section 1217.87 of the Order and in section 514(d) of the 
1996 Act (7 U.S.C. 7413).
    Regarding the economic impact of this interim rule, this change is 
administrative in nature. Postponing the 2016 referendum will allow 
time for USDA to complete a separate rulemaking action on the Order's 
exemption threshold and conduct a referendum as described above. The 
results of that rulemaking could impact who votes in the referendum and 
who pays assessments under the program.
    Regarding alternatives, conducting the referendum as initially 
planned in 2016 would cause confusion in the industry. USDA is 
currently conducting an analysis on the exemption threshold under the 
Order and will publish the results in a separate rulemaking action. 
That action is being initiated in response to Resolute. Once USDA 
completes that action, a referendum will be conducted. The results of 
that rulemaking action could impact who votes in the referendum.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the information collection and recordkeeping requirements 
that are imposed by the Order have been approved previously under OMB 
control number 0581-0093. This interim rule imposes no additional 
reporting and recordkeeping burden on domestic manufacturer and 
importers of softwood lumber.
    As with all Federal promotion programs, reports and forms are 
periodically reviewed to reduce information requirements and 
duplication by industry and public sector agencies. Finally, USDA has 
not identified any relevant Federal rules that duplicate, overlap, or 
conflict with this interim rule.
    AMS is committed to complying with the E-Government Act, to promote 
the

[[Page 59427]]

use of the Internet and other information technologies to provide 
increased opportunities for citizen access to Government information 
and services, and for other purposes.
    Regarding outreach efforts, USDA announced at the Board's meeting 
on May 25, 2016, that the referendum scheduled for August 2016 would be 
postponed to a future to-be-determined date. USDA also announced at the 
meeting that it would publish a notice in the Federal Register on the 
postponement. After the meeting, the Board issued a newsflash to 
industry members advising them accordingly.
    A 60-day comment period is provided to allow interested persons to 
respond to this interim rule. All written comments received in response 
to this rule by the date specified will be considered prior to 
finalizing this action.
    After consideration of all relevant material presented, and other 
information, it is found that this interim rule, as hereinafter set 
forth, will tend to effectuate the declared purposes of the 1996 Act.
    Pursuant to 5 U.S.C. 553, it is also found and determined upon good 
cause that it is impracticable, unnecessary, and contrary to the public 
interest to give preliminary notice prior to putting this rule into 
effect and that good cause exists for not postponing the effective date 
of this rule until 30 days after publication in the Federal Register 
because: (1) This interim rule extends the time frame for USDA to 
conduct a referendum under the Order from five years (2016) after the 
program took effect to no later than seven years (2018); (2) postponing 
the 2016 referendum will give USDA time to complete a separate 
rulemaking action on the Order's exemption threshold that is being 
initiated in response to a May 2016 federal district court decision in 
Resolute; (3) USDA announced at the Board's meeting on May 25, 2016, 
that the 2016 referendum would be postponed, and the Board subsequently 
issued a newsflash to industry members advising them of the postponed 
referendum; and (4) this rule provides a 60-day comment period and any 
comments received will be considered prior to finalization of this 
rule.

List of Subjects in 7 CFR Part 1217

    Administrative practice and procedure, Advertising, Consumer 
information, Marketing agreements, Promotion, Reporting and 
recordkeeping requirements, Softwood lumber.

    For the reasons set forth in the preamble, 7 CFR part 1217 is 
amended as follows:

PART 1217--SOFTWOOD LUMBER RESEARCH, PROMOTION, CONSUMER EDUCATION 
AND INDUSTRY INFORMATION ORDER

0
 1. The authority citation for 7 CFR part 1217 continues to read as 
follows:

     Authority:  7 U.S.C. 7411-7425; 7 U.S.C. 7401.


0
 2. In Sec.  1217.81, revise paragraph (b)(2) to read as follows:


Sec.  1217.81  Referenda.

* * * * *
    (b) * * *
    (2) No later than seven years after this Order becomes effective 
and every five years thereafter, to determine whether softwood lumber 
manufacturers for the U.S. market favor the continuation of the Order. 
The Order shall continue if it is favored by a majority of domestic 
manufacturers and importers voting in the referendum who also represent 
a majority of the volume of softwood lumber represented in the 
referendum who, during a representative period determined by the 
Secretary, have been engaged in the domestic manufacturing or 
importation of softwood lumber;
* * * * *

    Dated: August 25, 2016.
Elanor Starmer,
Administrator.
[FR Doc. 2016-20805 Filed 8-29-16; 8:45 am]
 BILLING CODE 3410-02-P