[Federal Register Volume 84, Number 186 (Wednesday, September 25, 2019)]
[Rules and Regulations]
[Pages 50294-50301]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-20291]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1217

[Document Number AMS-SC-19-0015]


Softwood Lumber Research, Promotion, Consumer Education and 
Industry Information Order; Change in Membership, Nominations, 
Procedures, and Continuance Referenda Period

AGENCY: Agricultural Marketing Service.

ACTION: Final rule.

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SUMMARY: This rule changes the membership, nominations, procedures, and 
continuance referenda period for the Softwood Lumber Board (Board) 
established under the Softwood Lumber Research, Promotion, Consumer 
Education and Industry Information Order (Order). The Board administers 
the Order with oversight by the U.S. Department of Agriculture (USDA). 
This action will also make administrative changes to other provisions 
of the Order.

DATES: Effective Date: October 25, 2019.

FOR FURTHER INFORMATION CONTACT: Andrea Ricci, Marketing Specialist, 
Promotion and Economics Division, Specialty Crops Program, AMS, USDA, 
1400 Independence Avenue SW, Room 1406-S, Washington, DC 20250; 
telephone: (202) 572-1442; facsimile (202) 205-2800; or electronic 
mail: [email protected].

SUPPLEMENTARY INFORMATION: This rule affecting 7 CFR part 1217 (the 
Softwood Lumber Research, Promotion, Consumer Education and Industry 
Information (Order)) is authorized under the Commodity Promotion, 
Research, and Information Act of 1996 (1996 Act) (7 U.S.C. 7411-7425).

Executive Orders 12866, 13563, and 13771

    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, reducing costs, harmonizing rules and promoting flexibility. 
This action falls within a category of regulatory actions that the 
Office of Management and Budget (OMB) exempted from Executive Order 
12866 review. Additionally, because this rule does not meet the 
definition of a significant regulatory action it does not trigger the 
requirements contained in Executive Order 13771. See OMB's Memorandum 
titled ``Interim Guidance Implementing Section 2 of the Executive Order 
of January 30, 2017, titled `Reducing Regulation and Controlling 
Regulatory Costs''' (February 2, 2017).

Executive Order 13175

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

Executive Order 12988

    This 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.
    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), 
the Office of Information and Regulatory Affairs designated this rule 
as not a major rule, as defined by 5 U.S.C. 804(2).
    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 rule changes the Board's membership, nominations, procedures, 
and continuance referenda period under the Order. The Board administers 
the Order with oversight by USDA. Under the Order, assessments are 
collected from manufacturers and importers and used for projects to 
promote softwood lumber within the United States. This rule reduces the 
number of Board members from 19 to 14, revises the nomination 
procedures, and revises the quorum and voting procedures. This rule 
also revises the time frame for periodic continuance referenda from 
five to seven years. Finally, this rule makes clarifying and conforming 
changes to other provisions of the Order. All of these changes will 
help facilitate program operations and were recommended to the 
Secretary by the Board at its November 28, 2018 meeting.

Board Membership and Geographical Distribution

    Pursuant to Sec.  1217.40(b), the Board is composed of 18 or 19 
members, depending upon whether an additional importer member is 
appointed to the Board. Seats on the Board are apportioned based on the 
volume of softwood lumber manufactured and shipped within the United 
States by

[[Page 50295]]

domestic manufacturers and the volume of softwood lumber imported into 
the United States. Seats are also apportioned based on size of 
operation within each geographic region as specified herein. Large 
manufacturers are those who account for the top two-thirds of the total 
annual volume of assessable softwood lumber and small manufacturers are 
those who account for the remaining one-third of the total annual 
volume of assessable softwood lumber, based on a three-year average.
    Table 1 shows the current structure of the Board. Of the 19 total 
Board seats, 12 are held by domestic manufacturers and seven are held 
by importers, six of whom are Canadian. Of the 12 domestic 
manufacturers, six represent the U.S. South (two large and four small), 
five represent the U.S. West (four large and one small), and one 
represents the Northeast and Lake States. Of the six Canadian 
importers, four represent Canada West (three large and one small) and 
two represent Canada East (one large and one small). An additional 
importer member may be appointed to represent all other importing 
countries other than Canada.
[GRAPHIC] [TIFF OMITTED] TR25SE19.000

    Section 1217.40(c)(1) requires that, in each five-year period, the 
Board review, based on a three-year average, the geographical 
distribution of the volume of softwood lumber manufactured and shipped 
within the United States by domestic manufacturers and the volume of 
softwood lumber imported into the United States. Section 1217.40(c)(2) 
requires that the Board also review, based on a three-year average, the 
distribution of the size of operations within each region. Section 
1217.40(c)(3) specifies that, if warranted, the Board may recommend to 
the Secretary the reapportionment of its membership to reflect changes 
in the geographical distribution of the volume of softwood lumber 
manufactured and shipped within the United States by domestic 
manufacturers and the volume of softwood lumber imported into the 
United States. The number of Board members may also be changed. Any 
changes in Board composition shall be implemented by the Secretary 
through rulemaking.
    Pursuant to Sec.  1217.40, the Board evaluated the geographic 
distribution of softwood lumber by region, based on a three-year 
average (2015-2017). The Board utilized data from Forest Economic 
Advisors \1\ to evaluate the regional distribution of assessable 
softwood lumber. The results of this evaluation are shown in Table 2. 
Based on a three-year average (2015-2017), the volume of assessed 
softwood lumber was largest in the U.S. South and U.S. West regions, at 
36 percent and 30 percent, respectively, of the total assessed volume 
over all regions. Canada West followed with 20 percent of the total 
assessed volume. In these three regions, assessed volume by large 
entities made up the majority of assessed regional volume. In all other 
regions, assessed volume by small entities was either equal to or 
greater than the assessed volume by large entities.
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    \1\ Forest Economic Advisors, LLC. FEA is an owner-operated 
company comprised of experienced and informed analysts covering the 
forest products industry. FEA applies rigorous economic analysis and 
delivers actionable information though their third-party forecasts 
and monthly advisors.

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[[Page 50296]]

[GRAPHIC] [TIFF OMITTED] TR25SE19.001

    From this evaluation, the Board recommended revising the Board 
membership from 19 current seats to 14 seats for the 2021 term of 
office, of which six members must represent large manufacturers or 
importers, four must represent small manufacturers or importers, and 
four may represent any size manufacturers or importers. Of the four 
representing any size manufacturer or importer, at least two of these 
members must represent small manufacturers or importers. The Board 
recommended adding more flexibility to the Order in terms of certain 
seats being open to representatives of any size manufacturer or 
importer. This will allow the Board to better adjust in the future to 
shifts in the size of operations within a region.
    The Board also took into consideration the consolidation in the 
softwood lumber industry since the inception of the Order. The Board 
has indicated that the number of companies eligible to be represented 
on the Board has declined. According to the Board, there were about 290 
entities eligible to be represented on the Board in 2013, and about 210 
entities in 2018. The Board has faced challenges securing enough 
nominees for membership on the Board. This compelled the Board to 
consider a reduction in Board membership.
    The Board seats are revised as follows: Ten domestic manufacturers 
seats, of which five members must be from the U.S. South Region (two 
large, two small, and one manufacturer of any size), four members must 
be from the U.S. West Region (two large, one small, and one 
manufacturer of any size), and one member from the Northeast and Lake 
States Region. Importers will have four seats on the Board (two large, 
one small, and one importer of any size) with a minimum of two from 
Canada West Region, a minimum of one from Canada East Region and the 
remaining member may be from Canada West, Canada East or offshore 
Regions. Table 3 illustrates this categorization of seats in the 
revised Board structure.
[GRAPHIC] [TIFF OMITTED] TR25SE19.002

    As the Board conducted the evaluation pursuant to Sec.  1217.40, it 
also made a recommendation to align Sec.  1217.40(a) and (c)(1) and (3) 
with section 515(b)(3) of the 1996 Act. (7 U.S.C. 7414(b)(3)). Section 
1217.40(a) clarifies that the Board shall be apportioned based on the 
volume of softwood lumber production that is manufactured and shipped 
within the United States by domestic manufacturers. Section 
1217.40(c)(1) and (3), respectively, specify that the Board shall 
review, based on a three-year average, the geographical distribution of 
the volume of softwood lumber produced and shipped within the United 
States by domestic manufacturers, and that the Board shall make 
recommendations to revise its structure based on this review.
    Additionally, the Board recommended that U.S. Board members reside 
in the region they represent. This will ensure that entities from 
outside the U.S. that own softwood lumber entities within the U.S. 
could represent a U.S. region on the Board only if the individual 
seeking nomination resides in the respective region. The Board will 
review the USDA Advisory Committee on Research and Promotion Background 
Information Form AD-755 to determine in which Region each nominee 
resides.
    According to the Board, this action should make the reduced number 
of seats easier to fill and reflect the current distribution of the 
industry.
    The Board recommended a transitional approach to reduce the Board 
from 19 members to 14 members over a three-year period. The 2019

[[Page 50297]]

Board currently has 19 members. The 2020 Board will have 16 members 
consisting of five domestic manufacturer members representing the U.S. 
South Region (two large and three small), five representing the U.S. 
West Region (four large and one small) and one representing the 
Northeast and Lake States. Of the five Canadian importers (three large 
and two small), there will be three from the Canada West Region and two 
from the Canada East Region. The non-Canadian importer seat will not be 
filled in 2020 (when the current member reaches tenure).
    The 2021 Board will have 14 members consisting of five domestic 
manufacturer members representing the U.S. South Region (two large, two 
small and one manufacturer of any size), four members representing the 
U.S. West Region (two large, one small and one manufacturer of any 
size) and one representing the Northeast and Lake States. Of the four 
Canadian importers (two large, one small and one importer of any size), 
there will be two from the Canada West Region and one from the Canada 
East Region. The remaining member may be from Canada West, Canada East 
or offshore Regions.

Nomination Procedures

    Section 1217.41 establishes the procedures for the conduct of 
nominations to obtain Board nominees for appointment by the Secretary. 
The Board recommended to remove the procedures in Sec.  1217.41(a) 
regarding the initial nominations to select the nominees for the 
initial Board in 2011. Section 1217.41(b) establishes an election 
process for nominations. In order to secure more nominees for Board 
seats, the Board recommended removing the election process from its 
nomination procedures.
    The nomination procedure provides that the Board conduct outreach 
and solicit nominees who are interested in serving on the Board. A 
nominee could seek nomination to the Board for all seats for which he 
or she is qualified. The Board will evaluate all nominees and submit 
one recommended candidate for each open seat and one additional nominee 
for each open seat to the Secretary for consideration. Other qualified 
persons interested in serving in the open seats but not recommended by 
the Board will be designated as other nominees for consideration by the 
Secretary. From the nominations made, the Secretary would appoint 
members of the Board.
    Finally, the Board recommended a clarification to Sec.  
1217.41(b)(7) that specifies no two members shall be employed by a 
single corporation, company, partnership, or any other legal entity, 
includes subsidiaries and affiliates thereof. Section 1217.41 will be 
revised accordingly.

Quorum and Voting Procedures

    Section 1217.44 specifies the quorum and voting procedures for the 
Board based on the current 19 Board members. The Board's recommendation 
is to revise these provisions from specific number requirements needed 
for a quorum and for votes to a general term ``majority'' that could 
apply to any size Board. Thus, the Board recommended these conforming 
changes to complement the reduction in Board membership. Section 
1217.44 will be revised accordingly.

Continuance Referenda Period

    Section 1217.81(b) specifies that the Secretary conduct a 
referendum of the industry for the purpose of ascertaining whether 
manufacturers for the U.S. market favor the continuation of the Order. 
The first continuance referendum was held in 2018, and 78 percent of 
the voters representing 94 percent of the volume voted supported 
continuance of the Order. The Board recommended that the period between 
referenda be extended from five to seven years for the purpose of 
efficiency. The Board would incur costs associated with referenda once 
every seven years rather than every five years. The Order would still 
permit referenda to be held at the request of the Board; at the request 
of 10 percent or more of the number of persons eligible to vote in a 
referendum; and at any time as determined by the Secretary, pursuant to 
Sec.  1217.81(b)(3), (4) and (5), respectively. Section 1217.81(b) will 
be revised accordingly.
    This rule also makes minor changes to Sec. Sec.  1217.52(h) and 
1217.101(l), by updating the Harmonized Tariff Schedule (HTS) number 
codes. The HTS number codes are periodically updated by the United 
States Internal Trade Commission. Finally, this rule changes the OMB 
control number assigned to the previously approved information 
collection referenced in Sec. Sec.  1217.88 and 1217.108 from 0581-0264 
to 0581-0093, the correct control number assigned by OMB.

Final 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 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 (SBA) 
defines, in 13 CFR part 121, small agricultural service firms (domestic 
manufacturers and importers) as those having annual receipts of no more 
than $7.5 million.\2\ The Random Lengths yearly average framing lumber 
composite price was $460 per thousand board feet in 2018.\3\ Dividing 
the $7.5 million threshold that defines an agricultural service firm as 
small by this price results in a maximum threshold of 16.3 million 
board feet (mmbf) of softwood lumber per year that a domestic 
manufacturer or importer may ship to be considered a small entity for 
purposes of the RFA. Table 4 shows the number of entities and the 
amount of volume they represent that may be categorized as small or 
large based on the SBA definition.
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    \2\ SBA does have a small business size standard for 
``Sawmills'' of 500 employees (see https://www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf). Based on USDA's 
understanding of the lumber industry, using this criterion would be 
impractical as sawmills often use contractors rather than employees 
to operate and, therefore, many mills would fall under this 
criterion while being, in reality, a large business. Therefore, USDA 
used agricultural service firm as a more appropriate criterion for 
this analysis.
    \3\ Random Lengths Publications, Inc.; www.randomlengths.com.

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[[Page 50298]]

[GRAPHIC] [TIFF OMITTED] TR25SE19.003

    As shown in Table 4, there were a total of 1,383 domestic 
manufacturers and importers of softwood lumber based on 2018 data. Of 
these, 931 entities, or 67 percent, shipped or imported less than 16.3 
mmbf and would be small entities under the SBA definition. These 931 
entities domestically manufactured or imported 2.07 billion board feet 
(bbf) in 2018, less than 3 percent of total volume. The reduction in 
Board seats and other administrative changes will not 
disproportionately burden small domestic manufacturers and importers of 
softwood lumber.
    This rule revises the Board's membership, nominations, procedure, 
and continuance referenda period provisions under the Order. Section 
1217.40 is revised to reduce the number of Board members from 19 to 14 
and reflects the diversity of the industry in terms of geographical 
distribution and size of operation. An additional change to this 
section requires that U.S. Board members reside in the region they 
represent. Section 1217.41 is revised by eliminating the election 
process in the nomination procedures. In Sec.  1217.44 the quorum and 
voting procedures for the Board are revised to complement the reduction 
in Board membership. Section 1217.81 is revised to instruct that 
subsequent continuance referenda to be conducted every seven years 
rather than five. These changes were recommended by the Board and are 
authorized under Sec. Sec.  1217.40(c)(3), 1217.41(b)(8), 1217.46(b), 
and 1217.87 of the Order and section 515(b)(3) of the 1996 Act.
    Regarding the economic impact of this rule on affected entities, 
these changes are administrative in nature and would have no economic 
impact on entities covered under the program. These changes will help 
in securing nominees to fill seats on the Board, address the concerns 
of the softwood lumber industry not securing enough nominees to be 
submitted to the Secretary for selection, make conforming changes 
necessary to complement the reduction in Board membership, and improve 
efficiency regarding continuance referenda.
    The Board's Industry Relations and Governance Committee (Committee) 
reviewed various alternatives to the Board's current 19-member make-up. 
The Committee considered a 12 and 13-member Board. The committee also 
considered maintaining the status quo at 19 members. Regarding the 
referenda period, one option the Board considered was to maintain the 
status quo. However, the Board recommended changing the period from 
five to seven years to improve the operating efficiency of the Board.

Reporting and Recordkeeping Requirements

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the Order's information collection and recordkeeping 
requirements have been approved previously under OMB control number 
0581-0093. This rule does not result in a change to the information 
collection and recordkeeping requirements previously approved and does 
not impose additional reporting requirements or recordkeeping burden on 
domestic manufacturers and importers of softwood lumber.
    As with all Federal promotion programs, reports and forms are 
periodically reviewed to reduce information requirements and 
duplication by industry and public-sector agencies. USDA has not 
identified any relevant Federal rules that duplicate, overlap, or 
conflict with this rule.
    Regarding outreach efforts, the actions were discussed by the 
Board's Industry Relations and Governance Committee at meetings on May 
30, 2018, August 15, 2018, and October 26, 2018. The full Board 
discussed outreach efforts at meetings on May 31, 2018, August 15, 
2018. The Board then made its recommendation to the Secretary on 
November 28, 2018. All of the Board's meetings, including meetings held 
via teleconference, are open to the public and interested persons are 
invited to participate and express their views.
    A proposed rule concerning this action was published in the Federal 
Register on June 26, 2019 (84 FR 30040). A 30-day comment period ending 
July 26, 2019, was provided to allow interested persons to submit 
comments.

Analysis of Comments

    Fifteen comments were received in response to the proposed rule. 
Thirteen comments supported all the Board recommended changes. Two 
comments were considered outside the scope of this action. In summary, 
most commenters agreed that reducing the size of the Board is 
appropriate due to industry consolidation, resulting in fewer 
individuals eligible to serve. One commenter noted that the reduced 
size would allow the Board to administer the program more efficiently 
and would help streamline business operations. In addition, one 
commenter supported the proposed approach to the geographic 
distribution, stating that it allows for fair and appropriate 
representation of all segments of the industry. Thirteen commenters 
supported the proposed change to the nomination procedures noting that 
allowing the Board to conduct outreach and recommend nominees to the 
Secretary is a more acceptable process for the industry. Lastly, the 
commenters agreed that extending the period between conducting 
continuance referenda from five to seven years was in the best interest 
of the program. It not only reduces the cost to the industry and 
provides a more efficient process, but it allows the Board to focus on 
its program areas of research and promotion of softwood lumber.
    After consideration of all relevant material presented, including 
the information and recommendations submitted by the Board, the 
comments received, and other available information, it is hereby found 
that this rule, as hereinafter set forth, is consistent with and will 
effectuate the purposes of the 1996 Act.

List of Subjects in 7 CFR Part 1217

    Administrative practice and procedure, Advertising, Consumer 
information, Marketing agreements, Reporting and recordkeeping 
requirements, Softwood Lumber promotion.

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

[[Page 50299]]

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. Revise Sec.  1217.40 to read as follows:


Sec.  1217.40  Establishment and membership.

    (a) Establishment of the Board. There is hereby established a 
Softwood Lumber Board to administer the terms and provisions of the 
Order and promote the use of softwood lumber. The Board shall be 
composed of manufacturers for the U.S. market who manufacture and 
domestically ship or import 15 million board feet or more of softwood 
lumber in the United States during a fiscal period. Seats on the Board 
shall be apportioned based on the volume of softwood lumber production 
that is manufactured and shipped within the United States by domestic 
manufacturers and the volume of softwood lumber imported into the 
United States. Seats on the Board shall also be apportioned based on 
size of operation within each geographic region, as specified in 
paragraphs (b)(1)(i) and (ii) and (b)(2) and (3) of this section. For 
purposes of this section, ``large'' means manufacturers for the U.S. 
market who account for the top two-thirds of the total annual volume of 
assessable softwood lumber and ``small'' means those who account for 
the remaining one-third of the total annual volume of assessable 
softwood lumber. If there are no eligible nominees for a large or small 
seat within a region, that seat may be filled by a nominee representing 
an eligible manufacturer for the U.S. market of any size. Should the 
size of a manufacturer for the U.S. market change during a member's 
term of office, that member may serve for the remainder of the term.
    (b) Composition of the Board. The 2020 Board shall be composed of 
16 members. The 2021 Board and each subsequent Board shall be composed 
of 14 members. The Board shall be established as follows:
    (1) Domestic manufacturers. For the 2020 Board, 11 members shall 
represent domestic manufacturers and for the 2021 Board and each 
subsequent Board, ten members shall represent domestic manufacturers 
who reside in the following three regions:
    (i) Five members shall reside in the U.S. South Region, which 
consists of the states of Alabama, Arkansas, Florida, Georgia, 
Louisiana, Mississippi, North Carolina, Oklahoma, South Carolina, 
Tennessee, Texas, Virginia, and West Virginia. For the 2020 Board, of 
these five members, two must represent large and three must represent 
small domestic manufacturers. For the 2021 Board and each subsequent 
Board of these five members, two must represent large, two must 
represent small, and one may represent domestic manufacturers of any 
size;
    (ii) Five members shall reside in the U.S. West Region for the 2020 
Board, and for the 2021 Board and each subsequent Board, four members 
shall reside in the U.S. West Region, which consists of the states of 
Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, 
New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington, and 
Wyoming. For the 2020 Board, of these five members, four must represent 
large and one must represent small domestic manufacturers. For the 2021 
Board and each subsequent Board, of the four members, two must 
represent large, one must represent small, and one may represent 
domestic manufacturers of any size; and
    (iii) One member shall reside in the Northeast and Lake States 
Region, which consists of the states of Connecticut, Delaware, 
Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, 
Massachusetts, Michigan, Minnesota, Missouri, Nebraska, New Hampshire, 
New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Vermont, 
Wisconsin and all other parts of the United States not listed in 
paragraph (b)(1)(i), (ii), or (iii) of this section. This member may 
represent domestic manufacturers of any size.
    (iv) For the 2021 Board, four members may represent a manufacturer 
for the U.S. market of any size.
    (2) Importers for the 2020 Board. Five members shall be importers 
from the following two regions:
    (i) Three members must import softwood lumber from the Canadian 
West Region, which consists of the provinces of British Columbia and 
Alberta. Of these three members, two must represent large and one must 
represent small importers; and
    (ii) Two members must import softwood lumber from the Canadian East 
Region, which consists of the Canadian territories and all other 
Canadian provinces not listed in paragraph (b)(2)(i) of this section 
that import softwood lumber into the United States. Of these two 
members, one must represent large and one must represent small 
importers.
    (3) Importers for the 2021 Board and each subsequent Board. Four 
members shall represent importers. Of these four members, two must 
represent large, one must represent small, and one may represent 
importers of any size. At least three of these members must import 
softwood lumber from the following regions:
    (i) Two members must import softwood lumber from the Canadian West 
Region, as defined in paragraph (b)(2)(i) of this section; and
    (ii) One member must import softwood lumber from the Canadian East 
Region, as defined in paragraph (b)(2)(ii) of this section.
    (c) Periodic review. In each five-year period, but not more 
frequently than once in each three-year period, the Board shall:
    (1) Review, based on a three-year average, the geographical 
distribution of the volume of softwood lumber production that is 
manufactured and shipped within the United States by domestic 
manufacturers and the volume of softwood lumber imported into the 
United States; and
    (2) Review, based on a three-year average, the distribution of the 
size of operations within each region; and
    (3) If warranted, recommend to the Secretary the reapportionment of 
the Board membership to reflect changes in the geographical 
distribution of the volume of softwood lumber production that is 
manufactured and shipped within the United States by domestic 
manufacturers and the volume of softwood lumber imported into the 
United States. The distribution of volumes between regions and the 
distribution of the size of operations within regions shall also be 
considered. The number of Board members may also be changed. Any 
changes in Board composition shall be implemented by the Secretary 
through rulemaking.

0
3. Revise Sec.  1217.41 to read as follows:


Sec.  1217.41  Nominations and appointments.

    Nominations shall be conducted as follows:
    (a) The Board shall conduct outreach to all segments of the 
softwood lumber industry. Softwood lumber domestic manufacturers and 
importers may submit nominations to the Board. Nominees must 
domestically manufacture and/or import 15 million board feet or more of 
softwood lumber per fiscal year;
    (b) Domestic manufacturers and importer nominees may provide the 
Board a short background statement outlining their qualifications to 
serve on the Board;
    (c) Nominees may seek nomination to the Board for all open or 
vacant seats for which the nominees are eligible;
    (d) The Board will evaluate all eligible nominees and submit the 
name of one

[[Page 50300]]

nominee for each open seat and the name of one additional nominee for 
each open seat to the Secretary. Other qualified persons interested in 
serving in the open seats but not recommended by the Board will be 
designated by the Board as additional nominees for consideration by the 
Secretary;
    (e) The Board must submit nominations to the Secretary at least six 
months before the new Board term begins. From the nominations submitted 
by the Board, the Secretary shall select the members of the Board;
    (f) No two members shall be employed by a single corporation, 
company, partnership, or any other legal entity. This includes 
subsidiaries and affiliates thereof; and
    (g) The Board may recommend to the Secretary modifications to its 
nomination procedures as it deems appropriate. Any such modifications 
shall be implemented through rulemaking by the Secretary.

0
4. Revise Sec.  1217.44 to read as follows:


Sec.  1217.44  Procedure.

    (a) A majority of Board members (exclusive of vacant seats) will 
constitute a quorum so long as at least two of the members present are 
importer members and five of the members present are domestic 
manufacturers. If participation by telephone or other means is 
permitted, members participating by such means shall count as present 
in determining quorum or other voting requirements set forth in this 
section.
    (b) All votes at meetings of the Board, executive committee, and 
other committees will be cast in person or by electronic voting or 
other means as the Board and Secretary deem appropriate to allow 
members participating by telephone or other electronic means to cast 
votes. Voting by proxy will not be allowed.
    (c) Each member of the Board will be entitled to one vote on any 
matter put to the Board and the motion will carry if supported by a 
majority of Board members (exclusive of vacant seats), except for 
recommendations to change the assessment rate or to adopt a budget, 
both of which require affirmation by at least a majority of Board 
members plus two (exclusive of vacant seats).
    (d) The Board must give members and the Secretary timely notice of 
all Board, executive committee, and other committee meetings.
    (e) In lieu of voting at a properly convened meeting, and when, in 
the opinion of the Board's chairperson, such action is considered 
necessary, the Board may take action by mail, telephone, electronic 
mail, facsimile, or any other means of communication. Any action taken 
under this procedure is valid only if:
    (1) All members and the Secretary are notified, and the members are 
provided the opportunity to vote;
    (2) A majority of Board members (exclusive of vacant seats) vote in 
favor of the action (unless a vote of a majority of Board members plus 
two (exclusive of vacant seats) is required under the Order); and
    (3) All votes are promptly confirmed in writing and recorded in the 
Board minutes.

0
5. Revise Sec.  1217.52(h) to read as follows:


Sec.  1217.52  Assessments.

* * * * *
    (h) The HTSUS categories and assessment rates on imported softwood 
lumber are listed in the following table. A factor shall be used to 
determine the equivalent volume of softwood lumber in thousand board 
feet. The factor used to convert one cubic meter to one thousand board 
feet is 0.423776001. Accordingly, the assessment rate per cubic meter 
is as follows.

                        Table 1 to Paragraph (h)
------------------------------------------------------------------------
                                                          Assessment  ($/
             Softwood lumber  (by HTSUS No.)               cubic meter)
------------------------------------------------------------------------
4407.11.00..............................................          0.1483
4407.12.00..............................................          0.1483
4407.19.05..............................................          0.1483
4407.19.06..............................................          0.1483
4407.19.10..............................................          0.1483
4409.10.05..............................................          0.1483
4409.10.10..............................................          0.1483
4409.10.20..............................................          0.1483
4409.10.90..............................................          0.1483
4418.99.10..............................................          0.1483
------------------------------------------------------------------------

* * * * *

0
6. In Sec.  1217.81, revise paragraphs (b)(1) and (2) to read as 
follows:


Sec.  1217.81  Referenda.

* * * * *
    (b) * * *
    (1) For the purpose of ascertaining whether manufacturers for the 
U.S. market favor the continuation, suspension, or termination of the 
Order;
    (2) No later than seven years after the Order becomes effective and 
every seven 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;
* * * * *

0
7. Revise Sec.  1217.88 to read as follows:


Sec.  1217.88  OMB Control numbers.

    The control numbers assigned to the information collection 
requirements by the Office of Management and Budget pursuant to the 
Paperwork Reduction Act of 1995, 44 U.S.C. Chapter 35, are OMB control 
number 0505-0001 (Board nominee background statement) and OMB control 
number 0581-0093.

0
8. Revise Sec.  1217.101(l) to read as follows:


Sec.  1217.101  Definitions.

* * * * *
    (l) Softwood lumber means and includes softwood lumber and products 
manufactured from softwood as described in section 804(a) within Title 
VIII (Softwood Lumber Act of 2008 or SLA of 2008) of the Tariff Act of 
1930 (19 U.S.C. 1202-1677g), as amended by section 3301 of the Food, 
Conservation and Energy Act of 2008 (Pub. L. 110-246, enacted June 18, 
2008) and categorized in the following Harmonized Tariff Schedule of 
the United States (HTSUS) numbers--4407.11.00, 4407.12.00, 4407.19.05, 
4407.19.06, 4407.19.10, 4409.10.05, 4409.10.10, 4409.10.20, 4409.10.90, 
and 4418.99.10. Domestic product that cannot be categorized in the 
referenced HTSUS numbers if it were an import is not covered under the 
Order. Further, softwood lumber originating in the United States that 
is exported to another country and shipped back to the United States is 
also covered under the Order, provided it can be categorized in the 
referenced HTSUS numbers. Additionally, articles brought into the 
United States temporarily and for which an exemption is claimed under 
subchapter XIII of chapter 98 of the HTSUS are exempted from the SLA of 
2008 and are not covered under the Order.
* * * * *

0
 9. Revise Sec.  1217.108 to read as follows:


Sec.  1217.108  OMB control number.

    The control number assigned to the information collection 
requirement in this subpart by the Office of Management and Budget 
pursuant to the Paperwork Reduction Act of 1995, 4 U.S.C. is OMB 
control number 0581-0093.


[[Page 50301]]


    Dated: September 16, 2019.
Bruce Summers,
Administrator.
[FR Doc. 2019-20291 Filed 9-24-19; 8:45 am]
 BILLING CODE 3410-02-P