Sale and Disposal of National Forest Service System Timber; Timber Sale Contracts; Market-Related Contract Term Additions, 65546-65552 [E8-26203]
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65546
Federal Register / Vol. 73, No. 214 / Tuesday, November 4, 2008 / Rules and Regulations
(b) Enforcement period. This
regulation is effective from 8:30 p.m. to
9:30 p.m. on November 8, 2008.
(c) Regulations.
(1) In accordance with the general
regulations in section 165.23 of this
part, entry into, transiting, or anchoring
within this safety zone is prohibited
unless authorized by the Captain of the
Port Sector Lake Michigan, or his onscene representative.
(2) This safety zone is closed to all
vessel traffic, except as may be
permitted by the Captain of the Port
Sector Lake Michigan or his on-scene
representative.
(3) The ‘‘on-scene representative’’ of
the Captain of the Port is any Coast
Guard commissioned, warrant or petty
officer who has been designated by the
Captain of the Port to act on his behalf.
The on-scene representative of the
Captain of the Port will be aboard either
a Coast Guard or Coast Guard Auxiliary
vessel.
(4) Vessel operators desiring to enter
or operate within the safety zone shall
contact the Captain of the Port Sector
Lake Michigan or his on-scene
representative to obtain permission to
do so. The Captain of the Port or his onscene representative may be contacted
via VHF Channel 16. Vessel operators
given permission to enter or operate in
the safety zone must comply with all
directions given to them by the Captain
of the Port Sector Lake Michigan or his
on-scene representative.
Dated: October 23, 2008.
B.C. Jones,
Captain, U.S. Coast Guard, Captain of the
Port Sector Lake Michigan.
[FR Doc. E8–26222 Filed 11–3–08; 8:45 am]
BILLING CODE 4910–15–P
DEPARTMENT OF AGRICULTURE
Forest Service
36 CFR Part 223
RIN 0596–AC79
Sale and Disposal of National Forest
Service System Timber; Timber Sale
Contracts; Market-Related Contract
Term Additions
Forest Service, USDA.
Final rule.
AGENCY:
dwashington3 on PRODPC61 with RULES
ACTION:
SUMMARY: The original Market-Related
Contract Term Addition (MRCTA)
regulation was adopted in 1990 to
provide financial relief to timber sale
purchasers during cyclic downturns in
forest products markets. However, the
current drastic reduction in Forest
VerDate Aug<31>2005
15:01 Nov 03, 2008
Jkt 217001
Product markets, which began in late
2004, revealed several problems with
the existing MRCTA regulation.
Therefore, this final rule is needed to
help ensure that the MRCTA regulation
functions as originally intended.
This final rule makes four changes to
the MRCTA regulation. First, the
regulation now allows more than 3 years
to be added to a contract’s term
pursuant to MRCTA when there is a
drastic reduction in wood product
prices that lasts for more than 10 out of
12 consecutive quarters. Second, the
regulation now gives contracting officers
the flexibility needed to assign the most
appropriate Bureau of Labor Statistics
Producer Price Index (PPI) to a timber
sale contract. Third, the regulation now
prevents any single 3-month MRCTA
from extending a contract’s term by
more than 1 year. Finally, the regulation
now explicitly states what types of sales
are ineligible for any MRCTA relief.
DATES: This rule is effective December 4,
2008.
FOR FURTHER INFORMATION CONTACT:
Lathrop Smith, Forest Management
staff, at (202) 205–0858, or Richard
Fitzgerald, Forest Management staff, at
(202) 205–1753.
Individuals who use
telecommunication devices for the deaf
(TDD) may call the Federal Information
Relay Service (FIRS) at 1–800–877–8339
between 8 a.m. and 8 p.m., Eastern
Standard Time, Monday through Friday.
SUPPLEMENTARY INFORMATION:
Background
In order to encourage the retention of
a viable established industry capable of
supplying the wood fiber needs of the
public for housing and other products,
the Chief of the Forest Service issued a
final rule (36 CFR 223.52) on December
7, 1990, finding that the substantial
overriding public interest justifies
MRCTAs whenever there is a drastic
reduction in wood product prices (55
FR 50643). The Chief’s finding was
based on the fact that MRCTAs (1) help
purchasers avoid severe financial
hardship; (2) ensure that the Federal
government receives payments due from
purchasers by reducing the likelihood of
defaults; and (3) help ensure that
receipts to States and counties from
timber sales are not adversely affected
by contract defaults. Additionally,
MRCTAs help promote stability in the
wood products industry, which helps
promote competition, employment,
investment, productivity, innovation
and the industry infrastructure needed
by the Forest Service to accomplish land
management objectives most
PO 00000
Frm 00052
Fmt 4700
Sfmt 4700
economically done with timber sales.
(73 FR 53817).
In accordance with the December 7,
1990, final rule, the Forest Service uses
PPIs to determine when a drastic
reduction in wood product prices has
occurred. The Forest Service currently
uses the Softwood Lumber Index
(WPU0811), the Hardwood Lumber
index (WPU0812) and the Wood Chips
index (PCU3211133211135) to monitor
different wood products. Except for
sales of timber subject to rapid
deterioration, each contract over 1 year
in length is assigned the index that
represents more than one-half of the
advertised volume. When a drastic
reduction in the assigned index has
occurred for two consecutive quarters
during the contract period, the Forest
Service notifies purchasers and, upon a
purchaser’s written request, adds 1 year
to the contract term. For each additional
consecutive quarter a drastic reduction
occurs, the Forest Service, upon a
purchaser’s written request, adds an
additional 3-month period to the normal
operating season of the contract.
Under the current rule, no more than
twice the original contract length or 3
years, whichever is less, may be added
to a contract’s term by MRCTA.
Pursuant to the National Forest
Management Act of 1976 (16 U.S.C.
472a(c)), total contract length cannot
exceed 10 years as the result of a
MRCTA. Further, MRCTA may not be
granted for those portions of the
contracts (1) with a required completion
date other than the contract termination
date, (2) with timber the Forest Service
determines is in need of urgent removal,
or (3) where the Forest Service
determines timber deterioration or
resource damage may result from delay.
Since the MRCTA rule was adopted in
1990, a drastic reduction in softwood
lumber prices occurred for five quarters
in 1994–1995, three quarters in 1998,
six quarters in 2000–2001, and for 12
quarters beginning in September 2005,
through June 2008. The hardwood index
has also shown a drastic reduction for
three quarters in 2005–2006 and in the
first two quarters of 2008. As a result,
many purchasers requested and
received MRCTA for qualifying timber
sales.
The MRCTA regulation’s intent is to
avert widespread contract defaults and
attendant adverse economic impacts on
industry and dependent communities.
Using MRCTA to add no more than 3
years to a contract’s term met that
objective during previous drastic
reductions. However, when a drastic
reduction in wood prices continues for
more than 3 straight years, like the
current softwood lumber market,
E:\FR\FM\04NOR1.SGM
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Federal Register / Vol. 73, No. 214 / Tuesday, November 4, 2008 / Rules and Regulations
purchasers holding high priced sales bid
when the markets were stronger face
severe economic hardship without the
ability to rely on additional MRCTA for
relief.
To respond to the poor market
conditions and associated adverse
economic impacts on industry and
dependent communities, Section 8401
of the Food, Conservation, and Energy
Act of 2008, Public Law No. 110–246,
122 Stat. 1651 (June 18, 2008),
authorized the Forest Service to use
MRCTA to add up to 4 years to the
original length of contracts awarded
prior to January 1, 2007. While section
8401 provided immediate relief to
contracts that had or were about to
reach the 3-year limit, the committee
notes for section 8401 state ‘‘the
Managers encourage the Forest Service
to revise the existing regulations within
90 days of enactment of this Act to
reflect provisions of this section for
future market problems.’’
In response, on September 3, 2008,
the Forest Service sought public
comment on proposed amendments to
the MRCTA regulation. (73 FR 51388).
Agency Response to Major Public
Comments
The Forest Service received
comments responsive to the merits of
the rule from three respondents. Two of
the responses were from timber industry
associations who supported the intent of
the proposed changes. However, one of
those respondents recommended
changes. The third response was from
an environmental organization that
raised several issues related to the rule.
Agency responses to the public
comments are as follows:
Comment: The proposed amended
rules would have an overall positive
effect on the Forest Service timber sale
program and are in the best interest of
the people of the United States. The
Forest Service should move ahead with
amending the regulations to expand the
maximum amount of additional contract
time contracts can receive during
prolonged periods of market price
reductions and to modify the procedure
for selecting the proper producer price
index.
Response: While these are statements
for which no response is necessary, it is
noted that all three respondents
specifically supported the proposed
changes to establishing the appropriate
producer price index.
Comment: We are concerned that the
agency has proposed allowing
additional quarters of MRCTA only after
the relevant producer price index has
triggered for 11 consecutive quarters.
This would potentially exclude
numerous contracts if there is a
temporary rebound in the market with
the longer term decline trend resuming
quickly thereafter. ‘‘We strongly urge
the agency to modify the final rule to
allow additional quarters of MRCTA
when the relevant PPI triggers for 6 of
the 8 previous quarters, allowing
MRCTA up to 10 years. At this point, a
sale may only be extended by a
determination of the Chief that doing so
will lead to better utilization of the
forest resources.’’
Response: The comment addresses
three issues: (1) The number of
qualifying quarters needed to trigger
65547
additional MRCTA time; (2) the
proposed requirement that those
triggering quarters must be consecutive;
and (3) the 10-year limit on total
contract length pursuant to the National
Forest Management Act of 1976
(NFMA). These issues will be responded
to separately as follows:
(1) Under the old rule, the maximum
amount of time that could be added to
a contract’s term by MRCTA was 3
years. The proposed rule was designed
to only allow MRCTA to extend a
contract’s term beyond 3 years when
there is a drastic reduction in forest
products markets that lasts over 21⁄2
years, like the current decline and the
decline in the early 1980s. The Forest
Service looked at all the trigger periods
for the softwood lumber and hardwood
lumber PPIs from the late 1970s to the
present and used the two longest
declines as a basis for the proposed rule.
Table 1 below shows quarters triggering
MRCTA for the softwood lumber and
hardwood lumber PPIs since 1978.
Since the MRCTA procedures were not
adopted until December 1990, and have
been amended several times since then,
the data shows quarters that would have
qualified using the procedures in the
rule being amended. Also, because the
Bureau of Labor Statistics PPIs are not
adjusted for inflation, the Forest Service
calculates a relative index adjusted for
inflation that allows comparisons to be
made over time on a constant dollar
basis. Qualifying quarters occur when
the relative index is less than 88.5
percent of the average high of the four
highest quarters in the previous eight
quarters.
TABLE 1—BUREAU OF LABOR STATISTICS PPI DATA
Relative
softwood
index
dwashington3 on PRODPC61 with RULES
Qtr/yr
Sep–78
Dec–78
Mar–79
Jun–79
Sep–79
Dec–79
Mar–80
Jun–80
Sep–80
Dec–80
Mar–81
Jun–81
Sep–81
Dec–81
Mar–82
Jun–82
Sep–82
Dec–82
Mar–83
Jun–83
Sep–83
Dec–83
.....................................................
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VerDate Aug<31>2005
15:01 Nov 03, 2008
Jkt 217001
Avg. high
4 of 8
prior qtrs
155.8
155.3
154.0
151.5
155.9
134.4
128.8
115.2
118.4
117.9
110.9
112.7
105.6
101.2
99.6
102.0
99.8
99.8
114.4
122.5
109.4
109.5
PO 00000
88.5% of
high 4
qtrs
Qualifying
quarter
Relative
hardwood
index
Avg. high
4 of 8
prior qtrs
88.5% of
high 4
qtrs
152.6
154.6
155.3
155.4
155.4
155.2
155.2
155.2
155.2
154.2
148.9
142.7
134.4
124.9
120.1
116.1
115.0
111.8
107.8
108.7
111.1
112.1
135.0
136.9
137.5
137.5
137.5
137.4
137.4
137.4
137.4
136.4
131.8
126.3
118.9
110.5
106.3
102.7
101.8
98.9
95.4
96.2
98.3
99.2
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Yes ..........
Yes ..........
Yes ..........
Yes ..........
Yes ..........
Yes ..........
Yes ..........
Yes ..........
Yes ..........
Yes ..........
Yes ..........
Yes ..........
..................
..................
..................
..................
..................
131.7
130.9
129.9
127.8
122.7
118.6
112.6
107.6
102.9
101.0
98.5
99.0
99.8
99.8
99.6
100.1
100.0
100.9
103.1
105.4
109.0
114.1
123.8
126.7
129.3
130.4
130.4
130.4
130.4
130.4
130.1
127.9
124.8
120.4
115.4
110.4
106.0
102.8
101.0
100.2
100.2
101.0
102.4
104.6
109.5
112.1
114.5
115.4
115.4
115.4
115.4
115.4
115.1
113.2
110.4
106.6
102.1
97.7
93.8
91.0
89.3
88.7
88.7
89.4
90.6
92.6
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Fmt 4700
Sfmt 4700
E:\FR\FM\04NOR1.SGM
04NOR1
Qualifying
quarter
Yes.
Yes.
Yes.
Yes.
Yes.
Yes.
Yes.
65548
Federal Register / Vol. 73, No. 214 / Tuesday, November 4, 2008 / Rules and Regulations
TABLE 1—BUREAU OF LABOR STATISTICS PPI DATA—Continued
Relative
softwood
index
dwashington3 on PRODPC61 with RULES
Qtr/yr
Mar–84
Jun–84
Sep–84
Dec–84
Mar–85
Jun–85
Sep–85
Dec–85
Mar–86
Jun–86
Sep–86
Dec–86
Mar–87
Jun–87
Sep–87
Dec–87
Mar–88
Jun–88
Sep–88
Dec–88
Mar–89
Jun–89
Sep–89
Dec–89
Mar–90
Sep–90
Sep–90
Dec–90
Mar–91
Jun–91
Sep–91
Dec–91
Mar–92
Jun–92
Sep–92
Dec–92
Mar–93
Jun–93
Sep–93
Dec–93
Mar–94
Jun–94
Sep–94
Dec–94
Mar–95
Jun–95
Sep–95
Dec–95
Mar–96
Jun–96
Sep–96
Dec–96
Mar–97
Jun–97
Sep–97
Dec–97
Mar–98
Jun–98
Sep–98
Dec–98
Mar–99
Jun–99
Sep–99
Dec–99
Mar–00
Jun–00
Sep–00
Dec–00
Mar–01
Jun–01
.....................................................
.....................................................
.....................................................
.....................................................
.....................................................
.....................................................
.....................................................
.....................................................
.....................................................
.....................................................
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VerDate Aug<31>2005
15:01 Nov 03, 2008
Jkt 217001
Avg. high
4 of 8
prior qtrs
114.5
105.4
101.5
102.7
104.8
112.6
102.4
98.5
105.7
108.4
111.8
108.9
112.7
112.5
118.7
112.3
114.6
114.1
110.4
107.2
111.1
116.5
114.9
108.2
112.3
109.9
103.0
97.8
100.9
118.7
108.6
111.9
131.7
125.6
124.8
135.7
178.6
155.5
156.6
176.1
175.6
165.8
159.4
154.9
149.6
138.6
143.7
134.7
138.1
153.8
159.0
156.8
165.4
166.3
158.4
153.6
155.3
141.9
141.5
142.6
157.7
164.5
154.2
150.9
147.6
134.2
124.4
121.1
121.9
138.2
PO 00000
88.5% of
high 4
qtrs
Qualifying
quarter
Relative
hardwood
index
Avg. high
4 of 8
prior qtrs
88.5% of
high 4
qtrs
114.0
115.2
115.2
115.2
115.2
114.0
111.5
110.5
109.3
107.1
107.9
109.6
110.4
111.5
111.5
113.9
114.1
114.6
115.0
115.0
115.0
115.0
116.0
115.0
115.0
114.4
113.7
113.7
113.7
113.4
114.0
112.4
113.2
118.1
122.0
125.2
129.5
142.9
150.4
156.6
166.7
171.7
174.0
174.0
174.0
169.2
169.2
169.2
163.9
157.4
154.4
154.3
154.8
158.7
161.9
162.3
162.3
162.3
162.3
161.7
161.3
159.4
159.0
157.9
157.9
156.8
156.8
156.8
156.8
154.3
100.8
102.0
102.0
102.0
102.0
100.9
98.7
97.8
96.8
94.8
95.5
97.0
97.7
98.7
98.7
100.8
100.9
101.5
101.8
101.8
101.8
101.8
102.6
101.8
101.8
101.3
100.6
100.6
100.6
100.4
100.8
99.5
100.2
104.5
108.0
110.8
114.6
126.5
133.1
138.6
147.5
152.0
154.0
154.0
154.0
149.8
149.8
149.8
145.1
139.3
136.7
136.6
137.0
140.5
143.2
143.6
143.6
143.6
143.6
143.1
142.8
141.1
140.7
139.8
139.8
138.8
138.8
138.8
138.8
136.5
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Yes ..........
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Yes ..........
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Yes ..........
Yes ..........
Yes ..........
Yes ..........
Yes ..........
..................
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..................
..................
..................
Yes ..........
Yes ..........
Yes ..........
..................
..................
..................
..................
..................
Yes ..........
Yes ..........
Yes ..........
Yes ..........
..................
115.5
119.5
119.6
115.8
115.8
113.4
113.0
110.7
116.3
118.2
119.8
121.2
122.7
122.8
123.9
126.1
126.8
124.3
119.2
116.7
114.3
113.9
113.9
114.6
114.6
115.0
111.0
109.6
110.9
109.6
110.1
112.6
115.6
118.2
122.7
128.7
133.0
139.2
140.7
140.1
140.3
139.9
139.5
138.7
137.2
133.4
132.2
130.0
130.1
127.7
127.5
128.6
134.5
136.6
138.7
140.6
144.2
143.7
143.9
143.5
143.5
141.1
138.5
142.6
141.5
139.4
138.7
137.0
135.8
133.4
107.9
111.0
114.5
117.2
117.6
117.7
117.7
117.7
117.7
117.8
117.5
117.5
118.9
120.5
121.6
122.7
123.9
124.9
125.3
125.3
125.3
125.3
125.3
124.1
121.8
118.7
116.4
115.2
114.6
114.5
114.5
113.8
113.3
113.5
114.3
117.3
121.3
125.7
130.9
135.4
138.2
140.0
140.2
140.2
140.2
140.2
140.2
139.9
139.6
138.8
137.2
135.4
133.2
132.5
133.3
135.0
137.6
140.0
141.8
143.1
143.8
143.8
143.8
143.8
143.8
143.6
143.4
142.8
142.2
141.1
95.5
98.2
101.4
103.7
104.1
104.2
104.2
104.2
104.2
104.3
104.0
104.0
105.2
106.6
107.6
108.5
109.6
110.5
110.9
110.9
110.9
110.9
110.9
109.8
107.8
105.1
103.0
102.0
101.5
101.4
101.3
100.7
100.3
100.5
101.2
103.8
107.3
111.2
115.8
119.8
122.3
123.9
124.1
124.1
124.1
124.1
124.1
123.8
123.5
122.9
121.4
119.8
117.9
117.3
118.0
119.5
121.8
123.9
125.5
126.6
127.3
127.3
127.3
127.3
127.3
127.1
126.9
126.4
125.8
124.9
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E:\FR\FM\04NOR1.SGM
04NOR1
Qualifying
quarter
Federal Register / Vol. 73, No. 214 / Tuesday, November 4, 2008 / Rules and Regulations
65549
TABLE 1—BUREAU OF LABOR STATISTICS PPI DATA—Continued
Relative
softwood
index
Qtr/yr
dwashington3 on PRODPC61 with RULES
Sep–01
Dec–01
Mar–02
Jun–02
Sep–02
Dec–02
Mar–03
Jun–03
Sep–03
Dec–03
Mar–04
Jun–04
Sep–04
Dec–04
Mar–05
Jun–05
Sep–05
Dec–05
Mar–06
Jun–06
Sep–06
Dec–06
Mar–07
Jun–07
Sep–07
Dec–07
Mar–08
Jun–08
.....................................................
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130.1
125.7
137.3
130.0
128.1
124.0
116.5
119.5
132.7
128.0
143.0
148.5
156.5
130.6
140.0
135.8
124.8
119.8
127.4
117.1
108.9
100.1
103.2
100.3
97.7
89.0
80.6
83.4
The situation described by the
commenter of a brief break in triggering
MRCTA followed by a continuation of a
long term decline has merit. Table 1
shows the current decline with the
softwood index triggering for 12
consecutive quarters beginning with the
3rd quarter 2005. Even though it was a
qualifying quarter, the index showed a
slight rebound in the 1st quarter of
2006. If that rebound had been high
enough to prevent that single quarter
from triggering, instead of having 12
consecutive qualifying quarters, only
eleven of the previous 12 quarters
would have been qualifying quarters
and the longest consecutive string of
qualifying quarters would have been
nine. That minor break would not have
been sufficient to change the need for
additional contract time provided by the
2008 Farm Bill and the final rule. Table
1 contains another example pertinent to
this issue. The softwood lumber index
triggered for four consecutive quarters
beginning with the 2nd quarter 2000;
didn’t trigger in the 2nd quarter 2001,
and then triggered for two additional
quarters. Using the old rule, a sale
awarded prior to April 1, 2000, could
have its contract term extended by 1
year for the first two qualifying quarters,
plus 3 months of normal operating
season time for each of the second two
qualifying quarters, and 1 year for the
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15:01 Nov 03, 2008
Jkt 217001
Avg. high
4 of 8
prior qtrs
88.5% of
high 4
qtrs
Qualifying
quarter
Relative
hardwood
index
Avg. high
4 of 8
prior qtrs
88.5% of
high 4
qtrs
147.7
142.7
137.5
134.9
133.9
133.9
133.9
133.9
131.4
132.0
132.0
133.5
138.1
145.2
145.2
147.0
147.0
147.0
147.0
145.2
140.7
133.4
132.0
127.0
122.3
118.3
114.2
107.4
130.7
126.3
121.7
119.4
118.5
118.5
118.5
118.5
116.3
116.9
116.9
118.1
122.2
128.5
128.5
130.1
130.1
130.1
130.1
128.5
124.5
118.1
116.8
112.4
108.2
104.7
101.0
95.1
Yes ..........
Yes ..........
..................
..................
..................
..................
Yes ..........
..................
..................
..................
..................
..................
..................
..................
..................
..................
Yes ..........
Yes ..........
Yes ..........
Yes ..........
Yes ..........
Yes ..........
Yes ..........
Yes ..........
Yes ..........
Yes ..........
Yes ..........
Yes ..........
134.2
138.4
136.4
135.3
135.1
136.0
130.9
137.7
137.9
138.8
138.2
135.7
136.3
132.8
128.0
126.7
121.0
120.9
120.5
117.8
117.7
117.9
114.0
111.0
110.8
106.8
100.3
92.5
140.6
140.6
139.5
138.4
137.6
136.9
136.7
136.5
137.1
137.6
137.7
138.1
138.1
138.1
138.1
138.1
137.8
137.2
135.7
133.2
130.9
127.1
124.1
122.2
120.0
119.3
118.5
116.8
124.4
124.4
123.5
122.5
121.8
121.2
120.9
120.8
121.4
121.8
121.9
122.3
122.3
122.3
122.3
122.3
121.9
121.4
120.1
117.9
115.9
112.5
109.9
108.2
106.2
105.5
104.8
103.4
last two qualifying quarters following
the break. Depending on the length of
the normal operating season, the sale’s
term would have been extended by 21⁄2
to 3 years. Using the above example, the
commenter’s suggestion of allowing
additional MRCTA when the PPI
triggers for 6 of the previous 8 quarters,
could result in the sale being extended
by more than 3 years. However, while
the Forest Service agrees that requiring
11 consecutive qualifying quarters
before triggering additional MRCTA is
overly limiting, the commenter’s
suggestion is unacceptable because it
could trigger additional MRCTA in a
market decline as short as 11⁄2 years.
Accordingly the rule has been revised to
allow more than 3 years to be added to
a contract’s term pursuant to MRCTA
when there is a drastic reduction in
wood product prices that lasts for more
than 10 out of 12 consecutive quarters.
The Forest Service chose at least 10 of
the previous 12 quarters as the trigger
point because most contracts are already
eligible to have their terms extended by
3 years pursuant to MRCTA. The Forest
Service does not believe that there is a
need to allow MRCTA to extend a
contract’s term by more than 3 years
unless there is a drastic reduction in the
market that lasts more than 21⁄2 years
(10 quarters). The rationale for allowing
3 years of MRCTA for a 21⁄2 year market
PO 00000
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Fmt 4700
Sfmt 4700
Qualifying
quarter
Yes.
Yes.
Yes.
No.
Yes.
Yes.
decline is that after recovery begins
purchasers need a reasonable amount of
time to conclude operations where they
are were working and then move back
to sales that were receiving MRCTA. Up
to 6 months is considered reasonable.
The final rule has been revised
accordingly.
(2) The commenter also recommended
allowing up to 10 years of MRCTA.
Following that recommendation would
allow contracts to exceed 10 years in
total length as the result of MRCTA. For
example, 3-or 4-year contracts could
become 13 or 14 year contracts. Section
472a(c) of NFMA provides, in part, as
follows: ‘‘Unless there is a finding by
the Secretary of Agriculture that better
utilization of the various forest
resources (consistent with the
provisions of the Multiple-Use,
Sustained-Yield Act of 1960) will result,
sales contracts shall be for a period not
to exceed ten years.’’ Considering the
language in NFMA, the Forest Service
believes the decision to extend any
timber sale or group of timber sales
beyond 10 years in total length should
be made on a case-by-case basis. No
change will be made in the final rule
relative to the 10-year limit on total
contract length.
Comment: ‘‘We are extremely
concerned and strongly opposed to the
proposed change to the regulation
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Federal Register / Vol. 73, No. 214 / Tuesday, November 4, 2008 / Rules and Regulations
which would disqualify any contract for
which all advertised species reach base
rates from receiving additional
MRCTA.’’
Response: The commenter noted that
many sales at base rates may include
high associated charges for such things
as brush disposal or the base rates may
have been increased substantially for
essential regeneration. In addition, a
sale at base rates may have high
operational costs for such things as
helicopter logging or road construction.
As a result, even though the stumpage
rates for one or more species included
in a sale are set at the lowest rate the
Forest Service may accept for the
timber, the costs of operating the sale
may still be very high, especially during
a depressed market period. The Forest
Service agrees with the commenter and
has revised the final rule accordingly.
Comment: One respondent believed
that additional analysis and direction
should be included before issuing a
final rule. The respondent disagreed
with the Agency’s conclusion that the
rule has no direct effect upon the
amount, location, or manner of timber
offered for purchase. The respondent
believed extensions of timber sale
contracts may have a significant effect
on the environment by delaying needed
vegetative and habitat management
work such that adverse effects to
habitat, species, or people could accrue.
The respondent suggested making
changes in sections of the Forest Service
Handbook and Manual, and agency
National Environmental Policy Act
(NEPA) procedures as a better way to
accomplish Forest Service management
objectives while responding to agency
and industry concerns regarding market
conditions. The respondent also noted
that the citation to the categorical
exclusion was out of date.
Response: The Forest Service agrees
that contract extensions might in some
instances have environmental
consequences. However, this rule is not
self-executing and does not by itself
cause contract extensions to occur.
Further, this rule is categorically
excluded from documentation in an
environmental assessment or an
environmental impact statement.
The Forest Service disagrees that its
NEPA policies and procedures should
be changed to ‘‘better accomplish Forest
Service management objectives while
responding to agency and industry
concerns regarding market conditions.’’
However, the Forest Service agrees that
additional NEPA analysis might be
necessary when a project is authorized
or when a contract receives additional
time under this rule. The determination
of whether such analysis is necessary
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15:01 Nov 03, 2008
Jkt 217001
will be made by the responsible official
in full accordance with the law. The
Forest Service’s NEPA policies and
procedures currently provide for such
situations and do not need to be
changed. This notice’s regulatory
certification section now correctly refers
to 36 CFR 220.6(d)(2).
Comment: We cannot find any
definition for ‘‘urgent removal’’ in 36
CFR part 223. It is unclear how the
agency maintains consistency in the
application of this term and how the
lack of clarity would affect market
related extensions.
Response: The commenter is correct
that the term ‘‘urgent removal’’ is not
specifically defined in 36 CFR part 223.
However, § 223.53(b) and Forest Service
Handbook (FSH) 2409.18, chapter 50,
section 55.21, addresses sales in urgent
need of harvesting, as dead and dying
timber subject to rapid deterioration as
the result of catastrophic events such as
fire, disease or weather-related damage.
Other examples of timber in need for
urgent removal are addressed in the
following comment/response.
Ultimately, the determination of
whether timber in a specific sale or
project is in need of urgent removal is
a decision the Forest Service makes on
a case-by-case basis.
Comment: If fuel reduction and/or
HFRA projects are considered urgent,
then the regulations at 36 CFR part 223
should explicitly state so to eliminate
any confusion as to whether they are
eligible for an extension. The same type
of specificity should apply to projects
proposing to use commercial timber
sales to accomplish needed endangered
or threatened species habitat work
under the Endangered Species Act.
Response: Section 223.52(c)(1) of the
old rule specifies that additional
contract time may not be granted for
those portions of the contract which
have a required completion date, or for
those portions where the Forest Service
determines that the timber is in need of
urgent removal, or that timber
deterioration or resource damage will
result from delay. While this appears to
address the concerns raised in the
comment, § 223.52(c)(1) only pertains to
portions of the sale area. Addressing the
sale as a whole, § 223.52(a)(3) in the old
rule specifies that a market-related
contract term addition provision shall
not be included in contracts where the
sale has a primary objective of
harvesting timber subject to rapid
deterioration. The Forest Service agrees
that many sales, in addition to those
where the timber is subject to rapid
deterioration, have timing needs that if
not met may jeopardize the purpose and
intended objective of the project.
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Examples include treating hazardous
fuels in a wildland-urban interface area,
removing hazardous trees adjacent to
developed sites such as roads and
campgrounds, and sales where trees are
designated by diameter and delay could
change the treatment as the result of
trees either growing into or out of the
diameter range specified for treatment.
But to attempt to list specific classes of
sales such as HFRA projects as the
respondent suggests runs the risk of
being too exclusive. In order to provide
resource managers with the flexibility to
determine which sales should be
excluded from receiving MRCTA,
§ 223.52(a)(3) has been amended in the
final rule to state that a market-related
contract term addition provision shall
not be included in contracts where
fulfilling the primary objective is
dependent upon timely completion of
harvest. The final rule also requires
notifying purchasers in the prospectus
when a sale is precluded from receiving
a MRCTA.
Regulatory Certifications
Regulatory Impact
This final rule has been reviewed
under USDA procedures and Executive
Order 12866 on Regulatory Planning
and Review. It has been determined that
this final rule is not a significant
regulatory action and is not subject to
Office of Management and Budget
(OMB) review. This final rule will not
have an annual effect of $100 million or
more on the economy and will not
adversely affect the economy, a sector of
the economy, productivity, competition,
jobs, the environment, public health or
safety, or State, local or tribal
governments or communities. This final
rule will not interfere with an action
taken or planned by another agency nor
raise new legal or policy issues. Little or
no effect on the national economy will
result from this regulatory action, which
consists of necessary, technical changes
to the regulation governing marketrelated contract term additions. Using
the replacement indices and the
modified formula contained in this final
rule, the Forest Service will be able to
determine whether a drastic decline in
wood products prices has occurred.
Finally, this action will not alter the
budgetary impact of entitlements,
grants, user fees, or loan programs or the
rights and obligations of recipients of
such programs. Accordingly, this final
rule is not subject to OMB review under
Executive Order 12866.
Moreover, this final rule has been
considered in light of the Regulatory
Flexibility Act (5 U.S.C. 610 et seq.),
and it is hereby certified that this action
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Federal Register / Vol. 73, No. 214 / Tuesday, November 4, 2008 / Rules and Regulations
will not have a significant economic
impact on a substantial number of small
entities as defined by that act. As
revised in this final rule, the Forest
Service will be able to grant additional
market-related contract term additions
to small and large purchasers when
there is a prolonged drastic reduction in
wood product prices. This will have the
intended effect of averting massive
defaults and attendant adverse
economic impacts on industry and
dependent communities by providing
purchasers additional contract time
until markets improve.
Proper Consideration of Small Entities
This final rule has been considered in
light of Executive Order 13272 regarding
proper consideration of small entities
and the Small Business Regulatory
Enforcement Fairness Act of 1996
(SBREFA), which amended the
Regulatory Flexibility Act (5 U.S.C. 601
et seq.). The Forest Service has
determined that this action will not
have a significant economic impact on
a substantial number of small entities as
defined by SBREFA.
To the extent that the final rule
imposes additional requirements on
small entities, these requirements are
the minimum necessary to protect the
public interest, are not administratively
burdensome or costly to meet, and are
well within the capability of small
entities to perform.
dwashington3 on PRODPC61 with RULES
Unfunded Mandates Reform
Pursuant to Title II of the Unfunded
Mandates Reform Act of 1995 (2 U.S.C.
1531–1538), which the President signed
into law on March 22, 1995, the Forest
Service has assessed the effects of this
final rule on State, local, and tribal
governments and the private sector.
This final rule does not compel the
expenditure of $100 million or more by
any State, local, or tribal government or
anyone in the private sector. Therefore,
a statement under section 202 of the act
is not required.
Environmental Impact
This final rule concerns the extension
of timber sale contracts when warranted
by a drastic reduction in wood product
prices, and, as such, has no direct effect
upon the amount, location, or manner of
timber offered for purchase. Code of
Federal Regulations at 36 CFR
220.6(d)(2) excludes from
documentation in an environmental
assessment or impact statement ‘‘rules,
regulations, or policies to establish
Service-wide administrative procedures,
program processes, or instructions.’’ The
agency’s assessment is that this rule
falls within this category of actions and
VerDate Aug<31>2005
15:01 Nov 03, 2008
Jkt 217001
that no extraordinary circumstances
exist which would require preparation
of an environmental assessment or
environmental impact statement.
Controlling Paperwork Burdens on the
Public
This final rule includes information
collection requirements as defined in 5
CFR part 1320. Accordingly, the review
provisions of the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501, et seq.) and
implementing regulations at 5 CFR part
1320 apply. The Office of Management
and Budget (OMB) has approved the
collection of this information under
OMB control number 0596–0212.
Energy Effects
This final rule has been reviewed
under Executive Order 13211, Actions
Concerning Regulations That
Significantly Affect Energy Supply,
Distribution, or Use. It has been
determined that this final rule does not
constitute a significant energy action as
defined in the Executive order.
Federalism
The agency has considered this final
rule under the requirements of
Executive Order 13132, Federalism. The
agency has made an assessment that the
final rule conforms with the federalism
principles set out in this Executive
Order; would not impose any
compliance costs on the States; and
would not have substantial direct effects
on the States, on the relationship
between the national government and
the States, or on the distribution of
power and responsibilities among the
various levels of government.
Consultation and Coordination With
Indian Tribal Governments
This final rule does not have tribal
implications as defined in Executive
Order 13175, Consultation and
Coordination with Indian Tribal
Governments, and, therefore, advance
consultation with tribes is not required.
No Takings Implications
This final rule has been analyzed in
accordance with the principles and
criteria contained in Executive Order
12630, and it has been determined that
the rule does not pose the risk of a
taking of Constitutionally-protected
private property.
Civil Justice Reform
This final rule has been reviewed
under Executive Order 12988, Civil
Justice Reform. The agency has not
identified any State or local laws or
regulations that are in conflict with this
regulation or that would impede full
PO 00000
Frm 00057
Fmt 4700
Sfmt 4700
65551
implementation of this rule. In any
event, after adoption of this final rule:
(1) All State and local laws or
regulations that conflict with this rule or
that would impede full implementation
would be preempted; (2) no retroactive
effect would be given to this final rule,
except as described herein; and (3) the
final rule would not require the use of
administrative proceedings before
parties could file suit in court
challenging its provisions.
List of Subjects in 36 CFR Part 223
Administrative practice and
procedure, Exports, Forests and forest
products, Government contracts,
National forests, Reporting and
recordkeeping requirements.
■ Therefore, for the reasons set forth in
the preamble, Part 223 of Title 36 of the
Code of Federal Regulations is amended
as follows:
PART 223—SALE AND DISPOSAL OF
NATIONAL FOREST SYSTEM TIMBER
1. The authority citation for part 223
continues to read as follows:
■
Authority: 90 Stat. 2958, 16 U.S.C. 472a; 98
Stat. 2213; 16 U.S.C. 618, 104 Stat. 714–726,
16 U.S.C. 620–620j, unless otherwise noted.
2. In § 223.52 revise paragraphs (a)(2),
(a)(3), (c)(1) through (c)(4) and add a
new paragraph (c)(5) to read as follows:
■
§ 223.52 Market-related contract term
additions.
(a) * * *
(2) The contract term addition
provision of the contract must specify
the index to be applied to each sale. The
Forest Supervisor shall determine and
select from paragraph (b) of this section,
the index to be used for each sale based
on the species and product
characteristics, by volume, being
harvested on the sale. The index
specified shall represent more than onehalf of the advertised volume. If none of
the indices in paragraph (b) of this
section represent more than one-half of
the advertised volume, the index
specified shall represent the species
product combination representing the
highest percentage of volume for which
there is an index. When the Forest
Supervisor determines that the species
and potential product characteristics are
such that more than one index could be
used, the prospectus will state that the
Contracting Officer may, upon the
purchaser’s written request, select an
alternative index from paragraph (b) of
this section, and may modify the
contract by mutual agreement, at time of
contract execution, to include an
alternative index that the Contracting
Officer has determined represents the
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highest percentage of products the
purchaser intends to produce or have
produced from the sale. Purchasers
seeking a change of index at time of
award must substantiate the need for an
alternative index by providing the
Contracting Officer with a written
request that includes a list of products
by volume the purchaser intends to
produce or expects will be produced
from the timber on that sale. In the
event a mutual agreement to modify a
contract to include an alternative index
is not reached at time of contract
execution, the index specified in the
sample contract shall apply.
(3) A market-related contract term
addition provision shall not be included
in contracts where the primary
management objective requires prompt
removal of the timber, such as, timber
is subject to rapid deterioration, timber
is in a wildland-urban interface area, or
hazard trees adjacent to developed sites.
*
*
*
*
*
(c) * * *
(1) Additional contract time may not
be granted for those portions of the
contract:
(i) With a required completion date;
(ii) Where the Forest Service
determines that the timber is in need of
urgent removal;
(iii) Where timber deterioration or
resource damage may result from delay;
or
(iv) Where included timber is
designated by diameter and delay may
change the treatment as a result of trees
growing into or out of the specified
diameter range(s).
(2) For each additional consecutive
quarter in which a contract qualifies for
market-related contract term addition,
the Forest Service will, upon the
purchaser’s written request, add an
additional 3 months during the normal
operating season to the contract, except
that no single 3-month addition shall
extend the term of a contract by more
than 1 year.
(3) No more than 3 years shall be
added to a contract’s term by marketrelated contract term addition unless the
following conditions are met:
(i) The sale was awarded after
December 31, 2006;
(ii) A drastic reduction in wood
product prices occurred in at least ten
of twelve consecutive quarters during
the contract term, but not including the
quarter in which the contract was
awarded; and
(4) For each qualifying quarter
meeting the criteria in paragraph
(c)(3)(ii) of this section, the Forest
Service will, upon the purchaser’s
written request, add an additional 3
VerDate Aug<31>2005
15:01 Nov 03, 2008
Jkt 217001
months during the normal operating
season to the contract, except no single
3-month addition shall extend the term
of a contract by more than 1 year.
(5) In no event shall a revised contract
term exceed 10 years as a result of
market-related contract term addition.
*
*
*
*
*
Dated: October 24, 2008.
Mark Rey,
Under Secretary, Natural Resources and
Environment.
[FR Doc. E8–26203 Filed 11–3–08; 8:45 am]
BILLING CODE 3410–11–P
DEPARTMENT OF VETERANS
AFFAIRS
38 CFR Part 17
RIN 2900–AM22
Civilian Health and Medical Program of
the Department of Veterans Affairs
(CHAMPVA): Expansion of Benefit
Coverage for Prostheses and Enuretic
(Bed-Wetting) Devices; Miscellaneous
Provisions
Department of Veterans Affairs.
Final rule.
AGENCY:
ACTION:
SUMMARY: This document adopts a final
rule amending the Department of
Veterans Affairs (VA) medical
regulations for the Civilian Health and
Medical Program of the Department of
Veterans Affairs (CHAMPVA) to expand
benefits by covering any non-dental
prostheses determined medically
necessary for the treatment of certain
medical conditions and by removing the
exclusion from coverage of enuretic
(bed-wetting) devices. In addition, this
final rule makes changes in delegations
of authority, technical changes, and
nonsubstantive changes for purposes of
clarity in VA’s regulations governing
CHAMPVA.
Effective Date: This final rule is
effective December 4, 2008.
FOR FURTHER INFORMATION CONTACT:
Richard M. Trabert, Policy Management
Division, VA Health Administration
Center, P.O. Box 65020, Denver, CO
80206–9020; (303) 331–7549. (This is
not a toll-free number.)
SUPPLEMENTARY INFORMATION: In a
document published in the Federal
Register on February 19, 2008 (73 FR
9068), VA proposed to amend its
medical regulations at 38 CFR part 17
concerning CHAMPVA benefits.
Specifically, it proposed to extend
prosthetic coverage to any prostheses
(other than dental prostheses)
considered medically necessary because
DATES:
PO 00000
Frm 00058
Fmt 4700
Sfmt 4700
of significant conditions resulting from
trauma, congenital anomalies, or
disease. Also, it proposed to remove the
exclusion of enuretic (bed-wetting)
devices (alarms) but would continue to
exclude enuretic conditioning programs.
Additionally, the document proposed to
amend the delegations of authority in 38
CFR 17.275, Claim filing deadline, and
38 CFR 17.276, Appeal/review process.
Finally, the document proposed to make
technical and other nonsubstantive
changes for purposes of clarity,
including to conform with Public Law
107–135, which redesignated the
statutory section authorizing the
CHAMPVA program as 38 U.S.C. 1781
(formerly 38 U.S.C. 1713). VA provided
a 60-day comment period that ended
April 19, 2008. VA received no
comments. Based on the rationale set
forth in the proposed rule and in this
document, we are adopting the
provisions of the proposed rule as a
final rule without change, except for a
technical change regarding the authority
citation for 38 CFR part 17.
Unfunded Mandates
The Unfunded Mandates Reform Act
of 1995 requires, at 2 U.S.C. 1532, that
agencies prepare an assessment of
anticipated costs and benefits before
issuing any rule that may result in
expenditure by State, local, and tribal
governments, in the aggregate, or by the
private sector, of $100 million or more
(adjusted annually for inflation) in any
year. This final rule would have no such
effect on State, local, and tribal
governments, or on the private sector.
Paperwork Reduction Act of 1995
This document contains no provisions
constituting a new collection of
information under the Paperwork
Reduction Act of 1995 (44 U.S.C. 3501–
3521).
Executive Order 12866
Executive Order 12866 directs
agencies to assess all costs and benefits
of available regulatory alternatives and,
when regulation is necessary, to select
regulatory approaches that maximize
net benefits (including potential
economic, environmental, public health
and safety, and other advantages;
distributive impacts; and equity). The
Executive Order classifies a rule as a
‘‘significant regulatory action’’ requiring
review by Office of Management and
Budget (OMB) unless OMB waives such
review, as any regulatory action that is
likely to result in a rule that may: (1)
Have an annual effect on the economy
of $100 million or more or adversely
affect in a material way the economy, a
sector of the economy, productivity,
E:\FR\FM\04NOR1.SGM
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]]>Agencies
[Federal Register Volume 73, Number 214 (Tuesday, November 4, 2008)]
[Rules and Regulations]
[Pages 65546-65552]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-26203]
=======================================================================
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DEPARTMENT OF AGRICULTURE
Forest Service
36 CFR Part 223
RIN 0596-AC79
Sale and Disposal of National Forest Service System Timber;
Timber Sale Contracts; Market-Related Contract Term Additions
AGENCY: Forest Service, USDA.
ACTION: Final rule.
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SUMMARY: The original Market-Related Contract Term Addition (MRCTA)
regulation was adopted in 1990 to provide financial relief to timber
sale purchasers during cyclic downturns in forest products markets.
However, the current drastic reduction in Forest Product markets, which
began in late 2004, revealed several problems with the existing MRCTA
regulation. Therefore, this final rule is needed to help ensure that
the MRCTA regulation functions as originally intended.
This final rule makes four changes to the MRCTA regulation. First,
the regulation now allows more than 3 years to be added to a contract's
term pursuant to MRCTA when there is a drastic reduction in wood
product prices that lasts for more than 10 out of 12 consecutive
quarters. Second, the regulation now gives contracting officers the
flexibility needed to assign the most appropriate Bureau of Labor
Statistics Producer Price Index (PPI) to a timber sale contract. Third,
the regulation now prevents any single 3-month MRCTA from extending a
contract's term by more than 1 year. Finally, the regulation now
explicitly states what types of sales are ineligible for any MRCTA
relief.
DATES: This rule is effective December 4, 2008.
FOR FURTHER INFORMATION CONTACT: Lathrop Smith, Forest Management
staff, at (202) 205-0858, or Richard Fitzgerald, Forest Management
staff, at (202) 205-1753.
Individuals who use telecommunication devices for the deaf (TDD)
may call the Federal Information Relay Service (FIRS) at 1-800-877-8339
between 8 a.m. and 8 p.m., Eastern Standard Time, Monday through
Friday.
SUPPLEMENTARY INFORMATION:
Background
In order to encourage the retention of a viable established
industry capable of supplying the wood fiber needs of the public for
housing and other products, the Chief of the Forest Service issued a
final rule (36 CFR 223.52) on December 7, 1990, finding that the
substantial overriding public interest justifies MRCTAs whenever there
is a drastic reduction in wood product prices (55 FR 50643). The
Chief's finding was based on the fact that MRCTAs (1) help purchasers
avoid severe financial hardship; (2) ensure that the Federal government
receives payments due from purchasers by reducing the likelihood of
defaults; and (3) help ensure that receipts to States and counties from
timber sales are not adversely affected by contract defaults.
Additionally, MRCTAs help promote stability in the wood products
industry, which helps promote competition, employment, investment,
productivity, innovation and the industry infrastructure needed by the
Forest Service to accomplish land management objectives most
economically done with timber sales. (73 FR 53817).
In accordance with the December 7, 1990, final rule, the Forest
Service uses PPIs to determine when a drastic reduction in wood product
prices has occurred. The Forest Service currently uses the Softwood
Lumber Index (WPU0811), the Hardwood Lumber index (WPU0812) and the
Wood Chips index (PCU3211133211135) to monitor different wood products.
Except for sales of timber subject to rapid deterioration, each
contract over 1 year in length is assigned the index that represents
more than one-half of the advertised volume. When a drastic reduction
in the assigned index has occurred for two consecutive quarters during
the contract period, the Forest Service notifies purchasers and, upon a
purchaser's written request, adds 1 year to the contract term. For each
additional consecutive quarter a drastic reduction occurs, the Forest
Service, upon a purchaser's written request, adds an additional 3-month
period to the normal operating season of the contract.
Under the current rule, no more than twice the original contract
length or 3 years, whichever is less, may be added to a contract's term
by MRCTA. Pursuant to the National Forest Management Act of 1976 (16
U.S.C. 472a(c)), total contract length cannot exceed 10 years as the
result of a MRCTA. Further, MRCTA may not be granted for those portions
of the contracts (1) with a required completion date other than the
contract termination date, (2) with timber the Forest Service
determines is in need of urgent removal, or (3) where the Forest
Service determines timber deterioration or resource damage may result
from delay.
Since the MRCTA rule was adopted in 1990, a drastic reduction in
softwood lumber prices occurred for five quarters in 1994-1995, three
quarters in 1998, six quarters in 2000-2001, and for 12 quarters
beginning in September 2005, through June 2008. The hardwood index has
also shown a drastic reduction for three quarters in 2005-2006 and in
the first two quarters of 2008. As a result, many purchasers requested
and received MRCTA for qualifying timber sales.
The MRCTA regulation's intent is to avert widespread contract
defaults and attendant adverse economic impacts on industry and
dependent communities. Using MRCTA to add no more than 3 years to a
contract's term met that objective during previous drastic reductions.
However, when a drastic reduction in wood prices continues for more
than 3 straight years, like the current softwood lumber market,
[[Page 65547]]
purchasers holding high priced sales bid when the markets were stronger
face severe economic hardship without the ability to rely on additional
MRCTA for relief.
To respond to the poor market conditions and associated adverse
economic impacts on industry and dependent communities, Section 8401 of
the Food, Conservation, and Energy Act of 2008, Public Law No. 110-246,
122 Stat. 1651 (June 18, 2008), authorized the Forest Service to use
MRCTA to add up to 4 years to the original length of contracts awarded
prior to January 1, 2007. While section 8401 provided immediate relief
to contracts that had or were about to reach the 3-year limit, the
committee notes for section 8401 state ``the Managers encourage the
Forest Service to revise the existing regulations within 90 days of
enactment of this Act to reflect provisions of this section for future
market problems.''
In response, on September 3, 2008, the Forest Service sought public
comment on proposed amendments to the MRCTA regulation. (73 FR 51388).
Agency Response to Major Public Comments
The Forest Service received comments responsive to the merits of
the rule from three respondents. Two of the responses were from timber
industry associations who supported the intent of the proposed changes.
However, one of those respondents recommended changes. The third
response was from an environmental organization that raised several
issues related to the rule. Agency responses to the public comments are
as follows:
Comment: The proposed amended rules would have an overall positive
effect on the Forest Service timber sale program and are in the best
interest of the people of the United States. The Forest Service should
move ahead with amending the regulations to expand the maximum amount
of additional contract time contracts can receive during prolonged
periods of market price reductions and to modify the procedure for
selecting the proper producer price index.
Response: While these are statements for which no response is
necessary, it is noted that all three respondents specifically
supported the proposed changes to establishing the appropriate producer
price index.
Comment: We are concerned that the agency has proposed allowing
additional quarters of MRCTA only after the relevant producer price
index has triggered for 11 consecutive quarters. This would potentially
exclude numerous contracts if there is a temporary rebound in the
market with the longer term decline trend resuming quickly thereafter.
``We strongly urge the agency to modify the final rule to allow
additional quarters of MRCTA when the relevant PPI triggers for 6 of
the 8 previous quarters, allowing MRCTA up to 10 years. At this point,
a sale may only be extended by a determination of the Chief that doing
so will lead to better utilization of the forest resources.''
Response: The comment addresses three issues: (1) The number of
qualifying quarters needed to trigger additional MRCTA time; (2) the
proposed requirement that those triggering quarters must be
consecutive; and (3) the 10-year limit on total contract length
pursuant to the National Forest Management Act of 1976 (NFMA). These
issues will be responded to separately as follows:
(1) Under the old rule, the maximum amount of time that could be
added to a contract's term by MRCTA was 3 years. The proposed rule was
designed to only allow MRCTA to extend a contract's term beyond 3 years
when there is a drastic reduction in forest products markets that lasts
over 2\1/2\ years, like the current decline and the decline in the
early 1980s. The Forest Service looked at all the trigger periods for
the softwood lumber and hardwood lumber PPIs from the late 1970s to the
present and used the two longest declines as a basis for the proposed
rule. Table 1 below shows quarters triggering MRCTA for the softwood
lumber and hardwood lumber PPIs since 1978. Since the MRCTA procedures
were not adopted until December 1990, and have been amended several
times since then, the data shows quarters that would have qualified
using the procedures in the rule being amended. Also, because the
Bureau of Labor Statistics PPIs are not adjusted for inflation, the
Forest Service calculates a relative index adjusted for inflation that
allows comparisons to be made over time on a constant dollar basis.
Qualifying quarters occur when the relative index is less than 88.5
percent of the average high of the four highest quarters in the
previous eight quarters.
Table 1--Bureau of Labor Statistics PPI Data
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Avg. high Avg. high
Relative 4 of 8 88.5% of Relative 4 of 8 88.5% of
Qtr/yr softwood prior high 4 Qualifying quarter hardwood prior high 4 Qualifying quarter
index qtrs qtrs index qtrs qtrs
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Sep-78............................... 155.8 152.6 135.0 ...................... 131.7 123.8 109.5
Dec-78............................... 155.3 154.6 136.9 ...................... 130.9 126.7 112.1
Mar-79............................... 154.0 155.3 137.5 ...................... 129.9 129.3 114.5
Jun-79............................... 151.5 155.4 137.5 ...................... 127.8 130.4 115.4
Sep-79............................... 155.9 155.4 137.5 ...................... 122.7 130.4 115.4
Dec-79............................... 134.4 155.2 137.4 Yes................... 118.6 130.4 115.4
Mar-80............................... 128.8 155.2 137.4 Yes................... 112.6 130.4 115.4 Yes.
Jun-80............................... 115.2 155.2 137.4 Yes................... 107.6 130.4 115.4 Yes.
Sep-80............................... 118.4 155.2 137.4 Yes................... 102.9 130.1 115.1 Yes.
Dec-80............................... 117.9 154.2 136.4 Yes................... 101.0 127.9 113.2 Yes.
Mar-81............................... 110.9 148.9 131.8 Yes................... 98.5 124.8 110.4 Yes.
Jun-81............................... 112.7 142.7 126.3 Yes................... 99.0 120.4 106.6 Yes.
Sep-81............................... 105.6 134.4 118.9 Yes................... 99.8 115.4 102.1 Yes.
Dec-81............................... 101.2 124.9 110.5 Yes................... 99.8 110.4 97.7
Mar-82............................... 99.6 120.1 106.3 Yes................... 99.6 106.0 93.8
Jun-82............................... 102.0 116.1 102.7 Yes................... 100.1 102.8 91.0
Sep-82............................... 99.8 115.0 101.8 Yes................... 100.0 101.0 89.3
Dec-82............................... 99.8 111.8 98.9 ...................... 100.9 100.2 88.7
Mar-83............................... 114.4 107.8 95.4 ...................... 103.1 100.2 88.7
Jun-83............................... 122.5 108.7 96.2 ...................... 105.4 101.0 89.4
Sep-83............................... 109.4 111.1 98.3 ...................... 109.0 102.4 90.6
Dec-83............................... 109.5 112.1 99.2 ...................... 114.1 104.6 92.6
[[Page 65548]]
Mar-84............................... 114.5 114.0 100.8 ...................... 115.5 107.9 95.5
Jun-84............................... 105.4 115.2 102.0 ...................... 119.5 111.0 98.2
Sep-84............................... 101.5 115.2 102.0 Yes................... 119.6 114.5 101.4
Dec-84............................... 102.7 115.2 102.0 ...................... 115.8 117.2 103.7
Mar-85............................... 104.8 115.2 102.0 ...................... 115.8 117.6 104.1
Jun-85............................... 112.6 114.0 100.9 ...................... 113.4 117.7 104.2
Sep-85............................... 102.4 111.5 98.7 ...................... 113.0 117.7 104.2
Dec-85............................... 98.5 110.5 97.8 ...................... 110.7 117.7 104.2
Mar-86............................... 105.7 109.3 96.8 ...................... 116.3 117.7 104.2
Jun-86............................... 108.4 107.1 94.8 ...................... 118.2 117.8 104.3
Sep-86............................... 111.8 107.9 95.5 ...................... 119.8 117.5 104.0
Dec-86............................... 108.9 109.6 97.0 ...................... 121.2 117.5 104.0
Mar-87............................... 112.7 110.4 97.7 ...................... 122.7 118.9 105.2
Jun-87............................... 112.5 111.5 98.7 ...................... 122.8 120.5 106.6
Sep-87............................... 118.7 111.5 98.7 ...................... 123.9 121.6 107.6
Dec-87............................... 112.3 113.9 100.8 ...................... 126.1 122.7 108.5
Mar-88............................... 114.6 114.1 100.9 ...................... 126.8 123.9 109.6
Jun-88............................... 114.1 114.6 101.5 ...................... 124.3 124.9 110.5
Sep-88............................... 110.4 115.0 101.8 ...................... 119.2 125.3 110.9
Dec-88............................... 107.2 115.0 101.8 ...................... 116.7 125.3 110.9
Mar-89............................... 111.1 115.0 101.8 ...................... 114.3 125.3 110.9
Jun-89............................... 116.5 115.0 101.8 ...................... 113.9 125.3 110.9
Sep-89............................... 114.9 116.0 102.6 ...................... 113.9 125.3 110.9
Dec-89............................... 108.2 115.0 101.8 ...................... 114.6 124.1 109.8
Mar-90............................... 112.3 115.0 101.8 ...................... 114.6 121.8 107.8
Sep-90............................... 109.9 114.4 101.3 ...................... 115.0 118.7 105.1
Sep-90............................... 103.0 113.7 100.6 ...................... 111.0 116.4 103.0
Dec-90............................... 97.8 113.7 100.6 Yes................... 109.6 115.2 102.0
Mar-91............................... 100.9 113.7 100.6 ...................... 110.9 114.6 101.5
Jun-91............................... 118.7 113.4 100.4 ...................... 109.6 114.5 101.4
Sep-91............................... 108.6 114.0 100.8 ...................... 110.1 114.5 101.3
Dec-91............................... 111.9 112.4 99.5 ...................... 112.6 113.8 100.7
Mar-92............................... 131.7 113.2 100.2 ...................... 115.6 113.3 100.3
Jun-92............................... 125.6 118.1 104.5 ...................... 118.2 113.5 100.5
Sep-92............................... 124.8 122.0 108.0 ...................... 122.7 114.3 101.2
Dec-92............................... 135.7 125.2 110.8 ...................... 128.7 117.3 103.8
Mar-93............................... 178.6 129.5 114.6 ...................... 133.0 121.3 107.3
Jun-93............................... 155.5 142.9 126.5 ...................... 139.2 125.7 111.2
Sep-93............................... 156.6 150.4 133.1 ...................... 140.7 130.9 115.8
Dec-93............................... 176.1 156.6 138.6 ...................... 140.1 135.4 119.8
Mar-94............................... 175.6 166.7 147.5 ...................... 140.3 138.2 122.3
Jun-94............................... 165.8 171.7 152.0 ...................... 139.9 140.0 123.9
Sep-94............................... 159.4 174.0 154.0 ...................... 139.5 140.2 124.1
Dec-94............................... 154.9 174.0 154.0 ...................... 138.7 140.2 124.1
Mar-95............................... 149.6 174.0 154.0 Yes................... 137.2 140.2 124.1
Jun-95............................... 138.6 169.2 149.8 Yes................... 133.4 140.2 124.1
Sep-95............................... 143.7 169.2 149.8 Yes................... 132.2 140.2 124.1
Dec-95............................... 134.7 169.2 149.8 Yes................... 130.0 139.9 123.8
Mar-96............................... 138.1 163.9 145.1 Yes................... 130.1 139.6 123.5
Jun-96............................... 153.8 157.4 139.3 ...................... 127.7 138.8 122.9
Sep-96............................... 159.0 154.4 136.7 ...................... 127.5 137.2 121.4
Dec-96............................... 156.8 154.3 136.6 ...................... 128.6 135.4 119.8
Mar-97............................... 165.4 154.8 137.0 ...................... 134.5 133.2 117.9
Jun-97............................... 166.3 158.7 140.5 ...................... 136.6 132.5 117.3
Sep-97............................... 158.4 161.9 143.2 ...................... 138.7 133.3 118.0
Dec-97............................... 153.6 162.3 143.6 ...................... 140.6 135.0 119.5
Mar-98............................... 155.3 162.3 143.6 ...................... 144.2 137.6 121.8
Jun-98............................... 141.9 162.3 143.6 Yes................... 143.7 140.0 123.9
Sep-98............................... 141.5 162.3 143.6 Yes................... 143.9 141.8 125.5
Dec-98............................... 142.6 161.7 143.1 Yes................... 143.5 143.1 126.6
Mar-99............................... 157.7 161.3 142.8 ...................... 143.5 143.8 127.3
Jun-99............................... 164.5 159.4 141.1 ...................... 141.1 143.8 127.3
Sep-99............................... 154.2 159.0 140.7 ...................... 138.5 143.8 127.3
Dec-99............................... 150.9 157.9 139.8 ...................... 142.6 143.8 127.3
Mar-00............................... 147.6 157.9 139.8 ...................... 141.5 143.8 127.3
Jun-00............................... 134.2 156.8 138.8 Yes................... 139.4 143.6 127.1
Sep-00............................... 124.4 156.8 138.8 Yes................... 138.7 143.4 126.9
Dec-00............................... 121.1 156.8 138.8 Yes................... 137.0 142.8 126.4
Mar-01............................... 121.9 156.8 138.8 Yes................... 135.8 142.2 125.8
Jun-01............................... 138.2 154.3 136.5 ...................... 133.4 141.1 124.9
[[Page 65549]]
Sep-01............................... 130.1 147.7 130.7 Yes................... 134.2 140.6 124.4
Dec-01............................... 125.7 142.7 126.3 Yes................... 138.4 140.6 124.4
Mar-02............................... 137.3 137.5 121.7 ...................... 136.4 139.5 123.5
Jun-02............................... 130.0 134.9 119.4 ...................... 135.3 138.4 122.5
Sep-02............................... 128.1 133.9 118.5 ...................... 135.1 137.6 121.8
Dec-02............................... 124.0 133.9 118.5 ...................... 136.0 136.9 121.2
Mar-03............................... 116.5 133.9 118.5 Yes................... 130.9 136.7 120.9
Jun-03............................... 119.5 133.9 118.5 ...................... 137.7 136.5 120.8
Sep-03............................... 132.7 131.4 116.3 ...................... 137.9 137.1 121.4
Dec-03............................... 128.0 132.0 116.9 ...................... 138.8 137.6 121.8
Mar-04............................... 143.0 132.0 116.9 ...................... 138.2 137.7 121.9
Jun-04............................... 148.5 133.5 118.1 ...................... 135.7 138.1 122.3
Sep-04............................... 156.5 138.1 122.2 ...................... 136.3 138.1 122.3
Dec-04............................... 130.6 145.2 128.5 ...................... 132.8 138.1 122.3
Mar-05............................... 140.0 145.2 128.5 ...................... 128.0 138.1 122.3
Jun-05............................... 135.8 147.0 130.1 ...................... 126.7 138.1 122.3
Sep-05............................... 124.8 147.0 130.1 Yes................... 121.0 137.8 121.9 Yes.
Dec-05............................... 119.8 147.0 130.1 Yes................... 120.9 137.2 121.4 Yes.
Mar-06............................... 127.4 147.0 130.1 Yes................... 120.5 135.7 120.1 Yes.
Jun-06............................... 117.1 145.2 128.5 Yes................... 117.8 133.2 117.9 No.
Sep-06............................... 108.9 140.7 124.5 Yes................... 117.7 130.9 115.9
Dec-06............................... 100.1 133.4 118.1 Yes................... 117.9 127.1 112.5
Mar-07............................... 103.2 132.0 116.8 Yes................... 114.0 124.1 109.9
Jun-07............................... 100.3 127.0 112.4 Yes................... 111.0 122.2 108.2
Sep-07............................... 97.7 122.3 108.2 Yes................... 110.8 120.0 106.2
Dec-07............................... 89.0 118.3 104.7 Yes................... 106.8 119.3 105.5
Mar-08............................... 80.6 114.2 101.0 Yes................... 100.3 118.5 104.8 Yes.
Jun-08............................... 83.4 107.4 95.1 Yes................... 92.5 116.8 103.4 Yes.
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The situation described by the commenter of a brief break in
triggering MRCTA followed by a continuation of a long term decline has
merit. Table 1 shows the current decline with the softwood index
triggering for 12 consecutive quarters beginning with the 3rd quarter
2005. Even though it was a qualifying quarter, the index showed a
slight rebound in the 1st quarter of 2006. If that rebound had been
high enough to prevent that single quarter from triggering, instead of
having 12 consecutive qualifying quarters, only eleven of the previous
12 quarters would have been qualifying quarters and the longest
consecutive string of qualifying quarters would have been nine. That
minor break would not have been sufficient to change the need for
additional contract time provided by the 2008 Farm Bill and the final
rule. Table 1 contains another example pertinent to this issue. The
softwood lumber index triggered for four consecutive quarters beginning
with the 2nd quarter 2000; didn't trigger in the 2nd quarter 2001, and
then triggered for two additional quarters. Using the old rule, a sale
awarded prior to April 1, 2000, could have its contract term extended
by 1 year for the first two qualifying quarters, plus 3 months of
normal operating season time for each of the second two qualifying
quarters, and 1 year for the last two qualifying quarters following the
break. Depending on the length of the normal operating season, the
sale's term would have been extended by 2\1/2\ to 3 years. Using the
above example, the commenter's suggestion of allowing additional MRCTA
when the PPI triggers for 6 of the previous 8 quarters, could result in
the sale being extended by more than 3 years. However, while the Forest
Service agrees that requiring 11 consecutive qualifying quarters before
triggering additional MRCTA is overly limiting, the commenter's
suggestion is unacceptable because it could trigger additional MRCTA in
a market decline as short as 1\1/2\ years. Accordingly the rule has
been revised to allow more than 3 years to be added to a contract's
term pursuant to MRCTA when there is a drastic reduction in wood
product prices that lasts for more than 10 out of 12 consecutive
quarters.
The Forest Service chose at least 10 of the previous 12 quarters as
the trigger point because most contracts are already eligible to have
their terms extended by 3 years pursuant to MRCTA. The Forest Service
does not believe that there is a need to allow MRCTA to extend a
contract's term by more than 3 years unless there is a drastic
reduction in the market that lasts more than 2\1/2\ years (10
quarters). The rationale for allowing 3 years of MRCTA for a 2\1/2\
year market decline is that after recovery begins purchasers need a
reasonable amount of time to conclude operations where they are were
working and then move back to sales that were receiving MRCTA. Up to 6
months is considered reasonable. The final rule has been revised
accordingly.
(2) The commenter also recommended allowing up to 10 years of
MRCTA. Following that recommendation would allow contracts to exceed 10
years in total length as the result of MRCTA. For example, 3-or 4-year
contracts could become 13 or 14 year contracts. Section 472a(c) of NFMA
provides, in part, as follows: ``Unless there is a finding by the
Secretary of Agriculture that better utilization of the various forest
resources (consistent with the provisions of the Multiple-Use,
Sustained-Yield Act of 1960) will result, sales contracts shall be for
a period not to exceed ten years.'' Considering the language in NFMA,
the Forest Service believes the decision to extend any timber sale or
group of timber sales beyond 10 years in total length should be made on
a case-by-case basis. No change will be made in the final rule relative
to the 10-year limit on total contract length.
Comment: ``We are extremely concerned and strongly opposed to the
proposed change to the regulation
[[Page 65550]]
which would disqualify any contract for which all advertised species
reach base rates from receiving additional MRCTA.''
Response: The commenter noted that many sales at base rates may
include high associated charges for such things as brush disposal or
the base rates may have been increased substantially for essential
regeneration. In addition, a sale at base rates may have high
operational costs for such things as helicopter logging or road
construction. As a result, even though the stumpage rates for one or
more species included in a sale are set at the lowest rate the Forest
Service may accept for the timber, the costs of operating the sale may
still be very high, especially during a depressed market period. The
Forest Service agrees with the commenter and has revised the final rule
accordingly.
Comment: One respondent believed that additional analysis and
direction should be included before issuing a final rule. The
respondent disagreed with the Agency's conclusion that the rule has no
direct effect upon the amount, location, or manner of timber offered
for purchase. The respondent believed extensions of timber sale
contracts may have a significant effect on the environment by delaying
needed vegetative and habitat management work such that adverse effects
to habitat, species, or people could accrue. The respondent suggested
making changes in sections of the Forest Service Handbook and Manual,
and agency National Environmental Policy Act (NEPA) procedures as a
better way to accomplish Forest Service management objectives while
responding to agency and industry concerns regarding market conditions.
The respondent also noted that the citation to the categorical
exclusion was out of date.
Response: The Forest Service agrees that contract extensions might
in some instances have environmental consequences. However, this rule
is not self-executing and does not by itself cause contract extensions
to occur. Further, this rule is categorically excluded from
documentation in an environmental assessment or an environmental impact
statement.
The Forest Service disagrees that its NEPA policies and procedures
should be changed to ``better accomplish Forest Service management
objectives while responding to agency and industry concerns regarding
market conditions.'' However, the Forest Service agrees that additional
NEPA analysis might be necessary when a project is authorized or when a
contract receives additional time under this rule. The determination of
whether such analysis is necessary will be made by the responsible
official in full accordance with the law. The Forest Service's NEPA
policies and procedures currently provide for such situations and do
not need to be changed. This notice's regulatory certification section
now correctly refers to 36 CFR 220.6(d)(2).
Comment: We cannot find any definition for ``urgent removal'' in 36
CFR part 223. It is unclear how the agency maintains consistency in the
application of this term and how the lack of clarity would affect
market related extensions.
Response: The commenter is correct that the term ``urgent removal''
is not specifically defined in 36 CFR part 223. However, Sec.
223.53(b) and Forest Service Handbook (FSH) 2409.18, chapter 50,
section 55.21, addresses sales in urgent need of harvesting, as dead
and dying timber subject to rapid deterioration as the result of
catastrophic events such as fire, disease or weather-related damage.
Other examples of timber in need for urgent removal are addressed in
the following comment/response. Ultimately, the determination of
whether timber in a specific sale or project is in need of urgent
removal is a decision the Forest Service makes on a case-by-case basis.
Comment: If fuel reduction and/or HFRA projects are considered
urgent, then the regulations at 36 CFR part 223 should explicitly state
so to eliminate any confusion as to whether they are eligible for an
extension. The same type of specificity should apply to projects
proposing to use commercial timber sales to accomplish needed
endangered or threatened species habitat work under the Endangered
Species Act.
Response: Section 223.52(c)(1) of the old rule specifies that
additional contract time may not be granted for those portions of the
contract which have a required completion date, or for those portions
where the Forest Service determines that the timber is in need of
urgent removal, or that timber deterioration or resource damage will
result from delay. While this appears to address the concerns raised in
the comment, Sec. 223.52(c)(1) only pertains to portions of the sale
area. Addressing the sale as a whole, Sec. 223.52(a)(3) in the old
rule specifies that a market-related contract term addition provision
shall not be included in contracts where the sale has a primary
objective of harvesting timber subject to rapid deterioration. The
Forest Service agrees that many sales, in addition to those where the
timber is subject to rapid deterioration, have timing needs that if not
met may jeopardize the purpose and intended objective of the project.
Examples include treating hazardous fuels in a wildland-urban interface
area, removing hazardous trees adjacent to developed sites such as
roads and campgrounds, and sales where trees are designated by diameter
and delay could change the treatment as the result of trees either
growing into or out of the diameter range specified for treatment. But
to attempt to list specific classes of sales such as HFRA projects as
the respondent suggests runs the risk of being too exclusive. In order
to provide resource managers with the flexibility to determine which
sales should be excluded from receiving MRCTA, Sec. 223.52(a)(3) has
been amended in the final rule to state that a market-related contract
term addition provision shall not be included in contracts where
fulfilling the primary objective is dependent upon timely completion of
harvest. The final rule also requires notifying purchasers in the
prospectus when a sale is precluded from receiving a MRCTA.
Regulatory Certifications
Regulatory Impact
This final rule has been reviewed under USDA procedures and
Executive Order 12866 on Regulatory Planning and Review. It has been
determined that this final rule is not a significant regulatory action
and is not subject to Office of Management and Budget (OMB) review.
This final rule will not have an annual effect of $100 million or more
on the economy and will not adversely affect the economy, a sector of
the economy, productivity, competition, jobs, the environment, public
health or safety, or State, local or tribal governments or communities.
This final rule will not interfere with an action taken or planned by
another agency nor raise new legal or policy issues. Little or no
effect on the national economy will result from this regulatory action,
which consists of necessary, technical changes to the regulation
governing market-related contract term additions. Using the replacement
indices and the modified formula contained in this final rule, the
Forest Service will be able to determine whether a drastic decline in
wood products prices has occurred. Finally, this action will not alter
the budgetary impact of entitlements, grants, user fees, or loan
programs or the rights and obligations of recipients of such programs.
Accordingly, this final rule is not subject to OMB review under
Executive Order 12866.
Moreover, this final rule has been considered in light of the
Regulatory Flexibility Act (5 U.S.C. 610 et seq.), and it is hereby
certified that this action
[[Page 65551]]
will not have a significant economic impact on a substantial number of
small entities as defined by that act. As revised in this final rule,
the Forest Service will be able to grant additional market-related
contract term additions to small and large purchasers when there is a
prolonged drastic reduction in wood product prices. This will have the
intended effect of averting massive defaults and attendant adverse
economic impacts on industry and dependent communities by providing
purchasers additional contract time until markets improve.
Proper Consideration of Small Entities
This final rule has been considered in light of Executive Order
13272 regarding proper consideration of small entities and the Small
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), which
amended the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). The
Forest Service has determined that this action will not have a
significant economic impact on a substantial number of small entities
as defined by SBREFA.
To the extent that the final rule imposes additional requirements
on small entities, these requirements are the minimum necessary to
protect the public interest, are not administratively burdensome or
costly to meet, and are well within the capability of small entities to
perform.
Unfunded Mandates Reform
Pursuant to Title II of the Unfunded Mandates Reform Act of 1995 (2
U.S.C. 1531-1538), which the President signed into law on March 22,
1995, the Forest Service has assessed the effects of this final rule on
State, local, and tribal governments and the private sector. This final
rule does not compel the expenditure of $100 million or more by any
State, local, or tribal government or anyone in the private sector.
Therefore, a statement under section 202 of the act is not required.
Environmental Impact
This final rule concerns the extension of timber sale contracts
when warranted by a drastic reduction in wood product prices, and, as
such, has no direct effect upon the amount, location, or manner of
timber offered for purchase. Code of Federal Regulations at 36 CFR
220.6(d)(2) excludes from documentation in an environmental assessment
or impact statement ``rules, regulations, or policies to establish
Service-wide administrative procedures, program processes, or
instructions.'' The agency's assessment is that this rule falls within
this category of actions and that no extraordinary circumstances exist
which would require preparation of an environmental assessment or
environmental impact statement.
Controlling Paperwork Burdens on the Public
This final rule includes information collection requirements as
defined in 5 CFR part 1320. Accordingly, the review provisions of the
Paperwork Reduction Act of 1995 (44 U.S.C. 3501, et seq.) and
implementing regulations at 5 CFR part 1320 apply. The Office of
Management and Budget (OMB) has approved the collection of this
information under OMB control number 0596-0212.
Energy Effects
This final rule has been reviewed under Executive Order 13211,
Actions Concerning Regulations That Significantly Affect Energy Supply,
Distribution, or Use. It has been determined that this final rule does
not constitute a significant energy action as defined in the Executive
order.
Federalism
The agency has considered this final rule under the requirements of
Executive Order 13132, Federalism. The agency has made an assessment
that the final rule conforms with the federalism principles set out in
this Executive Order; would not impose any compliance costs on the
States; and would not have substantial direct effects on the States, on
the relationship between the national government and the States, or on
the distribution of power and responsibilities among the various levels
of government.
Consultation and Coordination With Indian Tribal Governments
This final rule does not have tribal implications as defined in
Executive Order 13175, Consultation and Coordination with Indian Tribal
Governments, and, therefore, advance consultation with tribes is not
required.
No Takings Implications
This final rule has been analyzed in accordance with the principles
and criteria contained in Executive Order 12630, and it has been
determined that the rule does not pose the risk of a taking of
Constitutionally-protected private property.
Civil Justice Reform
This final rule has been reviewed under Executive Order 12988,
Civil Justice Reform. The agency has not identified any State or local
laws or regulations that are in conflict with this regulation or that
would impede full implementation of this rule. In any event, after
adoption of this final rule: (1) All State and local laws or
regulations that conflict with this rule or that would impede full
implementation would be preempted; (2) no retroactive effect would be
given to this final rule, except as described herein; and (3) the final
rule would not require the use of administrative proceedings before
parties could file suit in court challenging its provisions.
List of Subjects in 36 CFR Part 223
Administrative practice and procedure, Exports, Forests and forest
products, Government contracts, National forests, Reporting and
recordkeeping requirements.
0
Therefore, for the reasons set forth in the preamble, Part 223 of Title
36 of the Code of Federal Regulations is amended as follows:
PART 223--SALE AND DISPOSAL OF NATIONAL FOREST SYSTEM TIMBER
0
1. The authority citation for part 223 continues to read as follows:
Authority: 90 Stat. 2958, 16 U.S.C. 472a; 98 Stat. 2213; 16
U.S.C. 618, 104 Stat. 714-726, 16 U.S.C. 620-620j, unless otherwise
noted.
0
2. In Sec. 223.52 revise paragraphs (a)(2), (a)(3), (c)(1) through
(c)(4) and add a new paragraph (c)(5) to read as follows:
Sec. 223.52 Market-related contract term additions.
(a) * * *
(2) The contract term addition provision of the contract must
specify the index to be applied to each sale. The Forest Supervisor
shall determine and select from paragraph (b) of this section, the
index to be used for each sale based on the species and product
characteristics, by volume, being harvested on the sale. The index
specified shall represent more than one-half of the advertised volume.
If none of the indices in paragraph (b) of this section represent more
than one-half of the advertised volume, the index specified shall
represent the species product combination representing the highest
percentage of volume for which there is an index. When the Forest
Supervisor determines that the species and potential product
characteristics are such that more than one index could be used, the
prospectus will state that the Contracting Officer may, upon the
purchaser's written request, select an alternative index from paragraph
(b) of this section, and may modify the contract by mutual agreement,
at time of contract execution, to include an alternative index that the
Contracting Officer has determined represents the
[[Page 65552]]
highest percentage of products the purchaser intends to produce or have
produced from the sale. Purchasers seeking a change of index at time of
award must substantiate the need for an alternative index by providing
the Contracting Officer with a written request that includes a list of
products by volume the purchaser intends to produce or expects will be
produced from the timber on that sale. In the event a mutual agreement
to modify a contract to include an alternative index is not reached at
time of contract execution, the index specified in the sample contract
shall apply.
(3) A market-related contract term addition provision shall not be
included in contracts where the primary management objective requires
prompt removal of the timber, such as, timber is subject to rapid
deterioration, timber is in a wildland-urban interface area, or hazard
trees adjacent to developed sites.
* * * * *
(c) * * *
(1) Additional contract time may not be granted for those portions
of the contract:
(i) With a required completion date;
(ii) Where the Forest Service determines that the timber is in need
of urgent removal;
(iii) Where timber deterioration or resource damage may result from
delay; or
(iv) Where included timber is designated by diameter and delay may
change the treatment as a result of trees growing into or out of the
specified diameter range(s).
(2) For each additional consecutive quarter in which a contract
qualifies for market-related contract term addition, the Forest Service
will, upon the purchaser's written request, add an additional 3 months
during the normal operating season to the contract, except that no
single 3-month addition shall extend the term of a contract by more
than 1 year.
(3) No more than 3 years shall be added to a contract's term by
market-related contract term addition unless the following conditions
are met:
(i) The sale was awarded after December 31, 2006;
(ii) A drastic reduction in wood product prices occurred in at
least ten of twelve consecutive quarters during the contract term, but
not including the quarter in which the contract was awarded; and
(4) For each qualifying quarter meeting the criteria in paragraph
(c)(3)(ii) of this section, the Forest Service will, upon the
purchaser's written request, add an additional 3 months during the
normal operating season to the contract, except no single 3-month
addition shall extend the term of a contract by more than 1 year.
(5) In no event shall a revised contract term exceed 10 years as a
result of market-related contract term addition.
* * * * *
Dated: October 24, 2008.
Mark Rey,
Under Secretary, Natural Resources and Environment.
[FR Doc. E8-26203 Filed 11-3-08; 8:45 am]
BILLING CODE 3410-11-P
