[Federal Register Volume 85, Number 91 (Monday, May 11, 2020)]
[Proposed Rules]
[Pages 27690-27692]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-09726]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
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 

  Federal Register / Vol. 85, No. 91 / Monday, May 11, 2020 / Proposed 
Rules  

[[Page 27690]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1217

[Document Number AMS-SC-20-0031]


Softwood Lumber Research, Promotion, Consumer Education and 
Industry Information Order; Change to the Board Membership Eligibility 
Requirements

AGENCY: Agricultural Marketing Service.

ACTION: Proposed rule.

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SUMMARY: This proposal invites comments on a change to the eligibility 
requirements for nominees representing domestic manufacturers on 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).

DATES: Comments must be received by June 10, 2020.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposed rule. All comments must be submitted through 
the Federal e-rulemaking portal at http://www.regulations.gov and 
should reference the document number and the date and page number of 
this issue of the Federal Register. All comments submitted in response 
to this proposed rule will be included in the rulemaking record and 
will be made available to the public. Please be advised that the 
identity of the individuals or entities submitting comments will be 
made public on the internet at http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Andrea Ricci, Marketing Specialist, 
Promotion and Economics Division, Specialty Crops Program, AMS, USDA, 
1400 Independence Avenue SW, Room 1406-S, Stop 0244, Washington, DC 
20250-0244; telephone: (202) 572-1442; facsimile: (202) 205-2800; or 
electronic mail: [email protected].

SUPPLEMENTARY INFORMATION: This proposal affecting 7 CFR part 1217 
(herein the ``Order'') is authorized by 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 proposal 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.
    Section 519 of the 1996 Act (7 U.S.C. 7418) provides that 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, must 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 proposal invites comments on a change to the eligibility 
requirements for nominees representing domestic manufacturers on the 
Board. The Board administers the Order with oversight by the USDA. 
Pursuant to the Order, assessments are collected from domestic 
manufacturers and importers, and used for research and promotion 
projects designed to strengthen the position of softwood lumber in the 
marketplace. This proposed change was recommended to the Secretary by 
the Board at its February 26, 2020, meeting, and will contribute to the 
effective administration of the program.
    Section 1217.40 provides for the establishment of the Board. The 
Board is comprised 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. In 
November 2018, the Board recommended revising the Board composition 
from 19 to 14 members over a three-year period. The Board took into 
consideration the consolidation of the softwood lumber industry since 
the inception of the program, along with the number of companies 
eligible to be represented on the Board. Additionally, the Board 
recommended that U.S. Board members reside in the region they 
represent. This was intended to ensure that entities from outside the 
U.S. that

[[Page 27691]]

own softwood lumber entities within the U.S. could only represent a 
U.S. region on the Board. The recommendation was finalized in a rule 
that was published in the Federal Register on September 25, 2019 (84 FR 
50294). The 2021 Board and each subsequent Board shall be comprised of 
14 members, 10 of whom shall represent domestic manufacturers and four 
shall represent importers. Domestic manufacturer Board members 
represent three regions: U.S. South Region, U.S. West Region; and 
Northeast and Lake States Region. The Order prescribes that domestic 
manufacturer representatives reside in the region they represent.

Board Recommendation

    The Board met on February 26, 2020, and recommended the Order be 
revised to allow a domestic manufacturer's representative to seek 
nomination in any of the regions where the manufacturer they represent 
has manufacturing operations. The current Order limits manufacturer 
representatives to seek nomination only in the region where he or she 
resides. The Board conducted nominations under the newly implemented 
provisions and found that clarification in the Order was needed to 
reflect the multi-regional nature of manufacturers rather than the 
individual nominee. Several domestic manufacturers have operations in 
multiple U.S. regions. Revising the Order to allow a person to seek 
nomination in one of the regions where the manufacturer they represent 
has operations would provide flexibility to the Order, while 
maintaining the intent that Board members representing domestic 
manufacturers reside in the U.S. This proposal is will help facilitate 
program operations. Therefore, Sec.  1217.40 (b)(1), (b)(1)(i), 
(b)(1)(ii), and (b)(1)(iii) would be revised accordingly.

Initial Regulatory Flexibility Act Analysis

    In accordance with the Regulatory Flexibility Act (RFA) (5 U.S.C. 
601-612), the Agricultural Marketing Service (AMS) is required to 
examine the impact of the action 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 the 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 
softwood lumber manufacturers and importers) as those having annual 
receipts of no more than $8 million.\1\
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    \1\ SBA does have a small business size standard for 
``Sawmills'' of 500 employees (see https://www.sba.gov/sites/default/files/2019-08/SBA%20Table%20of%20Size%20Standards_Effective%20Aug%2019%2C%202019_Rev.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.
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    The Random Lengths Publications, Inc.'s yearly average framing 
lumber composite price was $356 per thousand board feet (mbf) in 2019. 
Dividing the $8 million threshold that defines an agricultural service 
firm as small by this price results in a maximum threshold of 22.5 
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 1 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.

                                        Table 1--Domestic Manufacturers and Importers by SBA Size Standards, 2019
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Domestic manufacturers                 Importers                        Totals
                                                         -----------------------------------------------------------------------------------------------
                                                             Entities      Volume (MMBF)     Entities      Volume (MMBF)     Entities      Volume (MMBF)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Small...................................................             226           1,991             774           1,257           1,000           3,248
Large...................................................             290          32,229             106          32,582             396          64,811
                                                         -----------------------------------------------------------------------------------------------
    Total...............................................             516          34,220             880          33,839           1,396          68,059
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Sources: Forest Economic Advisors; Customs and Border Protection.

    As shown in Table 1, there are a total of 1,396 domestic 
manufacturers and importers of softwood lumber based on 2019 data. Of 
these, 1,000 entities, or 72 percent, shipped or imported less than 
22.5 mmbf and would be considered small based on the SBA definition. 
These 1,000 entities domestically manufactured or imported 3.25 billion 
board feet (bbf) in 2019, less than 5 percent of total volume. The 
proposed revision to the Board eligibility requirements would not 
disproportionately burden small domestic manufacturers and importers of 
softwood lumber.
    This proposal would revise Sec.  1217.40 (b)(1), (b)(1)(i), 
(b)(1)(ii), and (b)(1)(iii) to allow domestic softwood lumber 
manufacturer representatives to seek nomination in any of the regions 
where the manufacturer they represent has manufacturing operations. The 
Order is administered by the Board with oversight by the USDA. In 
accordance with the program requirements, assessments are collected 
from domestic manufacturers and importers, and used for research and 
promotion projects designed to strengthen the position of softwood 
lumber in the marketplace. Revising the Order to allow a person to seek 
nomination in one of the regions where the softwood lumber manufacturer 
has operations would provide flexibility to the Order, while 
maintaining the intent that Board members representing domestic 
manufacturers reside in the U.S.
    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 proposed rule would not result in a 
change to the information collection and recordkeeping requirements 
previously approved and would impose no additional reporting and 
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

[[Page 27692]]

identified any relevant Federal rules that duplicate, overlap, or 
conflict with this proposed rule.
    Regarding alternatives, the Board considered not changing the 
nominee eligibility requirements, however, the entire Board determined 
that making this proposed change would better align the Order 
provisions with industry practices and would help facilitate Board 
operations. This proposal was discussed at the Industry Relations and 
Governance Committee meeting on February 18, 2020, and at the Board 
meeting on February 26, 2020.
    AMS has performed this initial RFA analysis regarding the impact of 
this action on small entities and invites comments concerning potential 
effects of this action.
    USDA has determined that this proposed rule is consistent with and 
would effectuate the purposes of the 1996 Act.
    A 30-day comment period is provided to allow interested persons to 
respond to this proposal. All written comments received in response to 
this proposed rule by the date specified will be considered prior to 
finalizing this action.

List of Subjects in 7 CFR Part 1217

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

    For the reasons set forth in the preamble, 7 CFR part 1217, is 
proposed to be 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.  1217.40, revise paragraphs (b)(1) introductory text, 
(b)(1)(i), (ii), and iii), to read as follows:


Sec.  1217.40  Establishment and membership.

* * * * *
    (b) * * *
    (1) Domestic manufacturers. Domestic manufacturers must reside in 
the United States. 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 represent manufacturers of softwood lumber 
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 represent manufacturers of softwood lumber 
in the U.S. West Region for the 2020 Board, and for the 2021 Board and 
each subsequent Board, four members shall manufacture softwood lumber 
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 represent a manufacturer of softwood lumber 
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.
* * * * *

Bruce Summers,
Administrator.
[FR Doc. 2020-09726 Filed 5-8-20; 8:45 am]
BILLING CODE 3410-02-P