Softwood Lumber Research, Promotion, Consumer Education and Industry Information Order; Changes to the Membership of the Softwood Lumber Board, 77329-77334 [2013-30394]

Download as PDF tkelley on DSK3SPTVN1PROD with RULES Federal Register / Vol. 78, No. 246 / Monday, December 23, 2013 / Rules and Regulations production research, post-harvest research, and industry communications. In comparison, budgeted expenses for these items for the 2012–13 marketing year were $797,000, $119,000, $219,000, and $7,705,000, respectively. The Board recommended the increased assessment rate because the rate currently in effect would not generate sufficient revenue to meet its budgeted expenses. The increased assessment rate applied to estimated assessable walnuts in the 2013–14 marketing year is expected to generate sufficient revenue to meet expenses, when combined with funds from the financial reserve and grant funds from FAS. Prior to arriving at this budget, the Board considered alternative expenditure levels but ultimately decided that the recommended levels were reasonable to properly administer the order. According to the National Agricultural Statistical Service (NASS), the season average grower prices for the years 2010 and 2011 were $2,040 and $2,900 per ton, respectively. These prices provide a range within which the 2013–14 season average prices could fall. Dividing these average grower prices by 2,000 pounds per ton provides an inshell price per pound range of $1.02 to $1.45. Dividing these inshell prices per pound by the 0.45 conversion factor (inshell to kernelweight) established in the order, yields a 2013– 14 price range estimate of $2.27 to $3.22 per kernelweight pound of merchantable walnuts. Utilizing these estimates and the assessment rate of $0.0189 per kernelweight pound, estimated assessment revenue as a percentage of total estimated grower revenue should likely range between 0.59 and 0.83 percent for the 2013–14 marketing year (assessment rate divided by price per kernelweight pound). This action increases the assessment obligation imposed on handlers. While assessments impose some additional costs on handlers, the costs are minimal and uniform on all handlers. Some of the additional costs may be passed on to growers. However, these costs are offset by the benefits derived from the operation of the marketing order. In addition, the Board’s meeting was widely publicized throughout the California walnut industry. All interested persons were invited to attend the meeting and participate in Board deliberations on all issues. Like all Board meetings, the June 6, 2013, meeting was a public meeting. All entities, both large and small, were able to express their views on this issue. VerDate Mar<15>2010 16:08 Dec 20, 2013 Jkt 232001 In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the order’s information collection requirements have been previously approved by the Office of Management and Budget (OMB) and assigned OMB No. 0581–0178 (Walnuts Grown in California). No changes in those requirements as a result of this action are necessary. Should any changes become necessary, they would be submitted to OMB for approval. This rule imposes no additional reporting or recordkeeping requirements on either small or large California walnut handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies. As noted in the initial regulatory flexibility analysis, USDA has not identified any Federal rules that duplicate, overlap, or conflict with this final rule. AMS is committed to complying with the E-Government Act, to promote the use of the internet and other information technologies to provide more opportunities for citizens to access Government information and services, and for other purposes. A proposed rule concerning this action was published in the Federal Register on September 17, 2013 (78 FR 57101). Copies of the proposed rule were also made available to all walnut handlers by Board staff. Finally, the proposal was made available through the internet by the USDA and the Office of Federal Register. A 30-day comment period ending October 17, 2013, was provided for interested persons to respond to the proposal. One comment was received. The commenter raised a question about the effect of this action in regard to black walnut trees. Black walnut trees aren’t regulated by the marketing order; therefore, no changes will be made to the rule as proposed. A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at: www.ams.usda.gov/ MarketingOrderSmallBusinessGuide. Any questions about the compliance guide should be sent to Jeffrey Smutney at the previously mentioned address in the FOR FURTHER INFORMATION CONTACT section. After consideration of all relevant material presented, including the information and recommendation submitted by the Board and other available information, it is hereby found that this rule, and hereinafter set forth, will tend to effectuate the declared policy of the Act. PO 00000 Frm 00003 Fmt 4700 Sfmt 4700 77329 Pursuant to 5 U.S.C. 553, it also found and determined that good cause exists for not postponing the effective date of this rule until 30 days after publication in the Federal Register because: (1) The 2013–14 marketing year began on September 1, 2013, and the marketing order requires that the rate of assessment for each marketing year apply to all merchantable walnuts handled during the year; (2) the Board needs to have sufficient funds to pay its expenses, which are incurred on a continuous basis; and (3) handlers are aware of this action, which was unanimously recommended by the Board at a public meeting and is similar to other assessment rate actions issued in past years. Also, a 30-day comment period was provided for in the proposed rule. List of Subjects in 7 CFR Part 984 Marketing agreements, Nuts, Reporting and recordkeeping requirements, Walnuts. For the reasons set forth in the preamble, 7 CFR part 984 is amended as follows: PART 984—WALNUTS GROWN IN CALIFORNIA 1. The authority citation for 7 CFR part 984 continues to read as follows: ■ Authority: 7 U.S.C. 601–674. 2. Section 984.347 is revised to read as follows: ■ § 984.347 Assessment rate. On and after September 1, 2013, an assessment rate of $0.0189 per kernelweight pound is established for California merchantable walnuts. Dated: December 17, 2013. Rex A. Barnes, Associate Administrator, Agricultural Marketing Service. [FR Doc. 2013–30414 Filed 12–20–13; 8:45 am] BILLING CODE 3410–02–P DEPARTMENT OF AGRICULTURE Agricultural Marketing Service 7 CFR Part 1217 [Document Number AMS–FV–13–0038] Softwood Lumber Research, Promotion, Consumer Education and Industry Information Order; Changes to the Membership of the Softwood Lumber Board Agricultural Marketing Service. Final rule. AGENCY: ACTION: E:\FR\FM\23DER1.SGM 23DER1 77330 Federal Register / Vol. 78, No. 246 / Monday, December 23, 2013 / Rules and Regulations This rule changes the membership of 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). Under the Order, assessments are collected from U.S. manufacturers (domestic) and importers and used for projects to promote softwood lumber within the United States. This rule revises the Board’s membership to reflect the diversity of the industry in terms of size of operation; allows companies that operate in multiple geographic regions to seek representation in any region in which they operate (U.S. or import); adds flexibility for the Board to nominate eligible persons to fill vacancies that occur during a term; and re-designates the States of Virginia and West Virginia to the U.S. South Region. These changes will help facilitate program operations. SUMMARY: DATES: Effective Date: December 24, 2013. FOR FURTHER INFORMATION CONTACT: Maureen T. Pello, Marketing Specialist, Promotion and Economics Division, Fruit and Vegetable Program, AMS, USDA, P.O. Box 831, Beavercreek, Oregon 97004; telephone: (503) 632– 8848; facsimile (503) 632–8852; or electronic mail: Maureen.Pello@ ams.usda.gov. This rule is issued under the Order. The Order is authorized under the Commodity Promotion, Research, and Information Act of 1996 (1996 Act) (7 U.S.C. 7411– 7425). SUPPLEMENTARY INFORMATION: tkelley on DSK3SPTVN1PROD with RULES Executive Orders 12866 and 13563 Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules and promoting flexibility. This action has been designated as a ‘‘non-significant regulatory action’’ under section 3(f) of Executive Order 12866. Accordingly, the Office of Management and Budget (OMB) has waived the review process. VerDate Mar<15>2010 16:08 Dec 20, 2013 Jkt 232001 Executive Order 13175 This action has been reviewed in accordance with the requirements of Executive Order 13175, Consultation and Coordination with Indian Tribal Governments. The review reveals that this regulation will not have substantial and direct effects on Tribal governments and will not have significant Tribal implications. Executive Order 12988 This rule has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have retroactive effect. Section 524 of the 1996 Act (7 U.S.C. 7423) provides that it shall not affect or preempt any other Federal or State law authorizing promotion or research relating to an agricultural commodity. Under section 519 of the 1996 Act (7 U.S.C. 7418), a person subject to an order may file a written petition with USDA stating that an order, any provision of an order, or any obligation imposed in connection with an order, is not established in accordance with the law, and request a modification of an order or an exemption from an order. Any petition filed challenging an order, any provision of an order, or any obligation imposed in connection with an order, shall be filed within two years after the effective date of an order, provision, or obligation subject to challenge in the petition. The petitioner will have the opportunity for a hearing on the petition. Thereafter, USDA will issue a ruling on the petition. The 1996 Act provides that the district court of the United States for any district in which the petitioner resides or conducts business shall have the jurisdiction to review a final ruling on the petition, if the petitioner files a complaint for that purpose not later than 20 days after the date of the entry of USDA’s final ruling. Background This rule changes the Board’s membership provisions under the Order. The Board administers the Order with oversight by USDA. Under the Order, assessments are collected from U.S. manufacturers and importers and used for projects to promote softwood lumber within the United States. This rule revises the Board’s membership to reflect the diversity of the industry in terms of size of operation; allow companies that operate in multiple regions to seek representation in any region in which they operate (U.S. or import); add flexibility for the Board to nominate eligible persons to fill PO 00000 Frm 00004 Fmt 4700 Sfmt 4700 vacancies that occur during a term; and re-designate the States of Virginia and West Virginia to the U.S. South Region. These changes will help facilitate program operations and were unanimously recommended by the Board in July 2013. Pursuant to section 1217.40(b), the Board is composed of 18 or 19 members, depending upon whether an additional importer member is appointed to the Board. Twelve members are domestic manufacturers and six members are importers of softwood lumber from Canada. Of the 12 domestic manufacturers, 6 represent the U.S. South, 5 represent the U.S. West and 1 represents the Northeast and Lake States. Of the six Canadian importers, four represent Canada West and two represent Canada East. An additional importer member may be appointed to represent all other importing countries besides Canada. Section 1217.40(c)(2) provides authority for the Board to recommend changes to its membership and nomination process. The Board met on May 7 and 8, 2013, and reviewed program operations, including the Board’s structure and nomination process. The Board reviewed these issues further and made the following four recommendations in July 2013. Board Diversity and Size of Operation The Board recommended that its regional membership be revised to reflect the diversity of the industry in terms of size of operation. About 8 percent of the companies covered under the Order account for the top two-thirds of the total annual volume of assessable softwood lumber (both domestic and imports). These companies are considered large by the industry in terms of size of operation. Some of these companies operate in multiple regions and some are both a domestic manufacturer and an importer of softwood lumber. Ninety-two percent of the companies covered under the Order account for the remaining one-third of the total annual volume of assessable softwood lumber. These are considered small by the industry in terms of size of operation. The Board wants to ensure that this diversity is reflected within each region. The Board analyzed each region’s volume of assessable softwood lumber in relation to the region’s volume attributed to small and large companies. Table 1 below shows this analysis based on 3-year average data (2010–2012). E:\FR\FM\23DER1.SGM 23DER1 77331 Federal Register / Vol. 78, No. 246 / Monday, December 23, 2013 / Rules and Regulations TABLE 1—REGIONAL ANALYSIS OF ASSESSABLE SOFTWOOD LUMBER BY SIZE OF OPERATION Large companies Regional volume (billion board feet) Assessable volume (billion board feet) Region U.S. South ................................................................................................... U.S. West ..................................................................................................... NE. and Lake States ................................................................................... Canada West ............................................................................................... Canada East ................................................................................................ Small companies Regional volume (billion board feet) 10.436 10.548 0.749 4.983 2.379 5.951 8.017 0.229 3.919 1.315 (57%) (76%) (31%) (79%) (55%) 4.485 2.511 0.520 1.064 1.064 (43%) (24%) (69%) (21%) (45%) * These figures are an average of data from 2010–2012. 2012 is actual Board assessment data from its first year of operation. 2010 and 2011 Canadian data is from U.S. Customs and Border Protection. 2010 and 2011 U.S. data is from Forest Economic Advisors. It is noted that for the U.S. South, while the majority of the volume of assessable softwood lumber is attributed to large companies, almost 90 percent of the number of companies operating in this region are small. The Board considered this in its recommended distribution of Board seats as shown in Table 2 below. TABLE 2—ALLOCATION OF BOARD SEATS BASED ON SIZE OF OPERATION Number of seats Size of operation U.S. South Large companies .................... Small companies ..................... U.S. West 2 4 6 4 1 5 NE. and lake states Canada east ........................................ N/A ................................. 1 ..................................... Canada west 1 1 2 Non-Canadian importer 3 1 4 N/A 1 * The Northeast and Lake States member and non-Canadian importer member may represent companies of any size. tkelley on DSK3SPTVN1PROD with RULES Additionally, if there were no eligible nominees for a large or small seat within a region, that seat may be filled by a nominee representing a company of any size. Should a company’s size change during a member’s term of office, that member may serve for the remainder of the term to which they were appointed. Section 1217.40(b) is revised accordingly. Modifications have been made in this final rule to clarify that the changes to paragraphs (a) and (b) in section 1217.40 will become effective for the term of office beginning January 1, 2015. Further, section 1217.40(c) requires the Board to periodically review the geographic distribution of the volume of softwood lumber manufactured and shipped within the United States by domestic manufacturers and the volume of softwood lumber imported into the United States. This section is revised to require the Board to also periodically review the distribution of seats based on size of operation and recommend changes as necessary. Section 1217.40(c) is revised accordingly. Entities That Operate in Multiple Regions (U.S. and/or Import) Currently, section 1217.41(b)(3) provides that nominees that are both a domestic manufacturer and importer may seek nomination to the Board as VerDate Mar<15>2010 16:08 Dec 20, 2013 Jkt 232001 either a domestic manufacturer or an importer, but not both. Nominees who domestically manufacture the majority of their softwood lumber must seek representation as a domestic manufacturer and nominees who import the majority of their softwood lumber must seek representation as an importer. Section 1217.41(b)(4) provides that domestic manufacturers who manufacture and domestically ship from more than one U.S. region must seek representation in the region of the majority of their softwood lumber. Further, section 1217.41(b)(5) provides that importers who import from more than one Canadian region must seek representation in the region from which they import the majority of their softwood lumber. As previously mentioned some entities in the softwood lumber industry are both domestic manufacturers and importers and operate in multiple regions under the Order. Industry members would like the flexibility to choose which region they represent and whether they seek a position as a domestic manufacturer or an importer on the Board. Thus, the Board recommended revising the Order so that entities that are U.S. manufacturers and importers and who may operate in multiple regions have the ability to seek representation in any region in which PO 00000 Frm 00005 Fmt 4700 Sfmt 4700 they operate. This will add flexibility to the nomination process by allowing companies to seek representation in their region of choice. Paragraphs (3), (4) and (5) of section 1217.41(b) are revised accordingly. Vacancies That Occur Mid-Term Section 1217.43(c) currently specifies that if a position becomes vacant, nominations to fill the vacancy be conducted using the nomination process set forth in the Order (section 1217.41(b)) whereby the Board solicits the names of eligible nominees and then conducts regional elections. The process is lengthy and can result in a seat remaining vacant for an extended period of time. Thus, the Board recommended revising the Order to allow the Board the flexibility to nominate eligible persons to fill vacancies that occur during a term. This will facilitate program operations by helping to ensure that vacancies are filled in a timely manner. Section 1217.43(c) is revised accordingly. Virginia and West Virginia Currently, section 1217.40(b)(1)(iii) specifies that the States of Virginia and West Virginia are included as part of the Northeast and Lake States Region under the Order. However, softwood lumber from Virginia and West Virginia is E:\FR\FM\23DER1.SGM 23DER1 77332 Federal Register / Vol. 78, No. 246 / Monday, December 23, 2013 / Rules and Regulations tkelley on DSK3SPTVN1PROD with RULES predominately pine, a much different species from the white spruce and red pine in the Northeast and Lake States, respectively. Thus, the Board recommended that the Order be revised to re-designate the States of Virginia and West Virginia as part of the U.S. South. The volume of softwood lumber from Virginia and West Virginia is relatively small (284 million board feet in 2012), so this change will have no impact on the regional distribution of seats on the Board. This change will align Virginia and West Virginia with the region in which they have more in common. Section 1217.40(b)(1)(iii) is revised accordingly. This rule also makes two minor changes to the Order. In paragraph (b) of section 1217.70 on reports, the last sentence is modified to specify that importers who pay their assessments directly to the Board must submit their report that accompanies the payment of collected assessments within 30 calendar days after the end of the quarter in which the softwood lumber was imported as opposed to 30 calendar days after importation. This language was inadvertently omitted from the final rule that implemented the Order (76 FR 46185; August 2, 2012) and will correct the Order provisions to be in line with current industry practices. This rule also changes the OMB control number in section 1217.108 from 0581–NEW to 0581–0264, the control number assigned by the OMB. Final Regulatory Flexibility Act Analysis In accordance with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601– 612), AMS is required to examine the impact of the rule on small entities. Accordingly, AMS has considered the economic impact of this action on small entities. The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such actions so that small businesses will not be disproportionately burdened. The Small Business Administration defines, in 13 CFR part 121, small agricultural producers as those having annual receipts of no more than $750,000 and small agricultural service firms (domestic manufacturers and importers) as those having annual receipts of no more than $7.0 million. According to the Board, it is estimated that there are currently about 446 domestic manufacturers of softwood lumber in the United States. This number represents separate business entities; one business entity may include multiple sawmills. Using an average price of $322 per thousand VerDate Mar<15>2010 16:08 Dec 20, 2013 Jkt 232001 board feet,1 a domestic manufacturer who ships less than about 25 million board feet per year would be considered a small entity. Using 2012 data, it is estimated that about 270 domestic manufacturers, or about 60 percent 2, ship less than 25 million board feet annually. Likewise, based on data from U.S. Customs and Border Protection (Customs) and the Board, it is estimated there are currently about 767 importers of softwood lumber. Using 2012 Customs data, about 699 importers, or about 91 percent, import less than $7.0 million worth of softwood lumber annually. Thus, for purposes of the RFA, the majority of domestic manufacturers and importers of softwood lumber would be considered small entities. Regarding value of the commodity, with domestic production averaging about 28.5 billion board feet in 2012, and using an average price of $322 per thousand board feet, the average annual domestic value for softwood lumber is about $9.2 billion. According to Customs data, the average annual value for softwood lumber imports for 2012 is about $3.5 billion. This rule makes four changes to the Order regarding the Board’s membership. Paragraphs (1) and (2) of section 1217.40(b) are revised to reflect the diversity of the industry in terms of size of operation; paragraph 1217.40(c) is revised to require the Board to periodically review this distribution. Paragraphs (3), (4) and (5) of section 1217.41(b) are revised to allow companies that operate in multiple regions to seek representation in any region in which they operate. Section 1217.43(c) is revised to add flexibility for the Board to nominate eligible persons to fill vacancies that occur during a term. Section 1217.40(b)(1)(iii) is revised to re-designate the States of Virginia and West Virginia to the U.S. South Region. These changes were unanimously recommended by the Board and are authorized under section 1217.40(c) of the Order and section 515(b)(3) of the 1996 Act. Regarding the economic impact of this rule on affected entities, these changes are administrative in nature and have no 1 Price data was obtained from Random Lengths Publications, Inc., and is a framing composite price that is designed as a broad measure of price movement in the lumber market (www.randomlengths.com). 2 Percentages were obtained from the American Lumber Standard Committee, Inc. (ALSC). The ALSC administers an accreditation program for the grade marking of lumber produced under the American Softwood Lumber Standard (Voluntary Product Standard 20). This information is also confirmed by Board data. PO 00000 Frm 00006 Fmt 4700 Sfmt 4700 economic impact on entities covered under the program. These changes will help maintain the Board’s balance in terms of size of operation by geographic region; add flexibility so that multiregion companies may choose which region they represent on the Board; help ensure that mid-term vacancies are filled in a timely manner; and better align the States of Virginia and West Virginia. Regarding alternatives, the Board explored various options regarding the diversity of size of operation. The Board considered establishing a separate region for multi-region companies and companies that are both a domestic manufacturer and an importer. The Board also considered establishing some ‘‘at large’’ seats for multi-region companies. The Board considered weighting an entity’s vote in a regional election by volume. The Board also considered maintaining the status quo and not changing the Order in this regard. After much deliberation, the Board opted to recommend allocating regional seats based on an analysis of the volume of softwood lumber within each region and the volume of assessable softwood lumber covered under the Order. The Board considered maintaining the status quo regarding multi-region companies who may also be a domestic manufacturer and importer, filling midterm vacancies and the regional designation for the States of Virginia and West Virginia. The Board ultimately recommended modifications to these Order provisions. 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 0581–0264. This rule imposes 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. Finally, USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this rule. AMS is committed to complying with the E-Government Act, to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes. E:\FR\FM\23DER1.SGM 23DER1 Federal Register / Vol. 78, No. 246 / Monday, December 23, 2013 / Rules and Regulations tkelley on DSK3SPTVN1PROD with RULES Regarding outreach efforts, these actions were discussed by the Board at meetings on May 7 and 8, 2013. The Board’s Executive Committee discussed these issues on January 7, June 3 and 10, and July 1, 2013. All of the Board’s meetings, including meetings held via teleconference, are open to the public and interested persons are invited to participate and express their views. A proposed rule concerning this action was published in the Federal Register on September 25, 2013 (78 FR 58956). The Board mailed copies of the rule to all known domestic manufacturers and importers of softwood lumber. The Board included notifications about the proposed rule in its newsletters and on its Web site at softwoodlumberboard.org. Finally, the proposal was made available through the Internet by USDA and the Office of the Federal Register. A 30-day comment period ending October 25, 2013, was provided to allow interested persons to submit comments. Analysis of Comments Six comments were received in response to the proposed rule, all supporting the proposal. In summary, the commenters concurred that revising the Board’s membership to reflect the diversity of the industry by size of operation will help ensure that the Board reflects the make-up of the industry and provide for fair representation. Allowing entities that operate in multiple regions to choose the region they would like to represent provides flexibility and may also facilitate greater interest in serving on the Board and Board activities. One commenter opined that allowing the Board the ability to nominate candidates to fill vacancies that occur mid-term would save costs since the Board would not have to engage in a lengthy nomination process. Three commenters stated that switching the States of Virginia and West Virginia to the U.S. South Region was appropriate. After consideration of all relevant matters presented, including the information and recommendation submitted by the Board and other available information, it is hereby found that this rule, as hereinafter set forth, is consistent with and will effectuate the purposes of the 1996 Act. It is further found that good cause exists for not postponing the effective date of this rule until 30 days after publication in the Federal Register (5 U.S.C.) because this action needs to be in effect as soon as possible to allow sufficient time for completion of the nomination process and appointments for the term of office beginning January VerDate Mar<15>2010 16:08 Dec 20, 2013 Jkt 232001 1, 2015. Additionally, a 30-day comment period was provided for in the proposed rule, and all six comments supported the proposed changes. 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 amended as follows: PART 1217—SOFTWOOD LUMBER RESEARCH, PROMOTION, CONSUMER EDUCATION AND INDUSTRY INFORMATION ORDER 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. 2. Amend § 1217.40 by: a. Revising paragraph (a); b. Revising paragraphs (b)(1), (b)(2) introductory text, (b)(2)(i), and (b)(2)(ii); ■ c. Revising the introductory text to paragraph (c) and paragraph (c)(2) and adding a new paragraph (c)(3) The changes to read as follows: ■ ■ ■ § 1217.40 Establishment and membership. (a) Establishment of the Board. There is hereby established a Softwood Lumber Board to administer the terms and provisions of this Order and promote the use of softwood lumber. The Board shall be composed of manufacturers for the U.S. market who manufacture and domestically ship or import 15 million board feet or more of softwood lumber in the United States during a fiscal period. Seats on the Board shall be apportioned based on the volume of softwood lumber manufactured and shipped within the United States by domestic manufacturers and the volume of softwood lumber imported into the United States. Commencing with the term of office beginning January 1, 2015, seats on the Board shall also be apportioned based on size of operation within each geographic region, as specified in paragraphs (b)(1)(i), (b)(1)(ii), (b)(2)(i), and (b)(2)(ii) of this section. For purposes of this section, large means manufacturers for the U.S. market who account for the top twothirds of the total annual volume of assessable softwood lumber and small means those who account for the remaining one-third of the total annual volume of assessable softwood lumber. If there are no eligible nominees for a large or small seat within a region, that PO 00000 Frm 00007 Fmt 4700 Sfmt 4700 77333 seat may be filled by a nominee representing an eligible manufacturer for the U.S. market of any size. Should the size of a manufacturer for the U.S. market change during a member’s term of office, that member could serve for the remainder of the term. (b) * * * (1) Domestic manufacturers. Twelve members shall be domestic manufacturers from the following three regions: (i) Six members shall be from 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. Commencing with the term of office beginning January 1, 2015, of these six members, two must be large and four must be small; (ii) Five members shall be from 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. Commencing with the term of office beginning January 1, 2015, of these five members, four must be large and one must be small; and (iii) One member shall be from 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 paragraphs (b)(1)(i), (b)(1)(ii), or (b)(1)(iii) of this section. (2) Importers. Six members shall be importers who represent the following regions: (i) Four members shall import softwood lumber from the Canadian West Region, which consists of the provinces of British Columbia and Alberta. Commencing with the term of office beginning January 1, 2015, of these four members, three must be large and one must be small; and (ii) Two members shall import softwood lumber from the Canadian East Region, which consists of the Canadian territories and all other Canadian provinces not listed in paragraph (b)(2)(i) of this section that import softwood lumber into the United States. Commencing with the term of office beginning January 1, 2015, of these two members, one must be large and one must be small. * * * * * E:\FR\FM\23DER1.SGM 23DER1 77334 Federal Register / Vol. 78, No. 246 / Monday, December 23, 2013 / Rules and Regulations (c) In each five-year period, but not more frequently than once in each threeyear period, the Board shall: * * * * * (2) Review, based on a three-year average, the distribution of the size of operations within each region; and (3) If warranted, recommend to the Secretary the reapportionment of the Board membership to reflect changes in the geographical distribution of the volume of softwood lumber manufactured and shipped within the United States by domestic manufacturers and the volume of softwood lumber imported into the United States. The destination of volumes between regions and the distribution of the size of operations within regions shall also be considered. The number of Board members may also be changed. Any changes in Board composition shall be implemented by the Secretary through rulemaking. ■ 3. Amend § 1217.41 by ■ a. Revising the introductory text to paragraph (b); ■ b. Revising paragraphs (b)(1), (b)(2), (b)(3), (b)(4), and (b)(5). The changes to read as follows: § 1217.41 Nominations and appointments. tkelley on DSK3SPTVN1PROD with RULES * * * * * (b) Subsequent nominations shall be conducted as follows: (1) The Board shall conduct outreach to all segments of the softwood lumber industry. Softwood lumber domestic manufacturers and importers may submit nominations to the Board. Subsequent nominees must domestically manufacture and/or import 15 million board feet or more of softwood lumber per fiscal year; (2) Domestic manufacturers and importer nominees may provide the Board a short background statement outlining their qualifications to serve on the Board; (3) Nominees that are both a domestic manufacturer and an importer may seek nomination to the Board and vote in the nomination process as either a domestic manufacturer or an importer, but not both. Such nominees must domestically manufacture and import 15 million board feet or more of softwood lumber per fiscal year; (4) The names of domestic manufacturer nominees shall be placed on a ballot by region. The ballots along with the background statements shall be mailed to domestic manufacturers in each respective region for a vote. Domestic manufacturers who manufacture softwood lumber in more than one region may seek nomination and vote in one region of their choice. VerDate Mar<15>2010 16:08 Dec 20, 2013 Jkt 232001 The votes shall be tabulated for each region with the nominee receiving the highest number of votes at the top of the list in descending order by vote. The top two candidates for each position shall be submitted to the Secretary; (5) The names of importer nominees shall be placed on a ballot by region. The ballots along with the background statements shall be mailed to importers in each respective region for a vote. Importers who import softwood lumber from more than one region may seek nomination and vote in one region of their choice. The votes shall be tabulated for each region with the nominee receiving the highest number of votes at the top of the list in descending order by vote. The top two candidates for each position shall be submitted to the Secretary. * * * * * ■ 4. Amend § 1217.43 by revising paragraph (c) to read as follows: § 1217.43 Removal and vacancies. * * * * * (c) If a position becomes vacant, nominations to fill the vacancy may be conducted using the nominations process set forth in § 1217.41(b) or the Board may nominate eligible persons. A vacancy will not be required to be filled if the unexpired term is less than 6 months. ■ 5. Amend § 1217.70 by revising paragraph (b) to read as follows: § 1217.70 Reports. * * * * * (b) For domestic manufacturers, such information shall accompany the collected payment of assessments on a quarterly basis specified in § 1217.52. For importers who pay their assessments directly to the Board, such information shall accompany the payment of collected assessments within 30 calendar days after the end of the quarter in which the softwood lumber was imported. ■ 6. Section 1217.108 is revised to read as follows: § 1217.108 OMB control number. The control number assigned to the information collection requirement in this subpart by the Office of Management and Budget pursuant to the Paperwork Reduction Act of 1995, 4 U.S.C. is OMB control number 0581– 0264. Dated: December 17, 2013. Rex A. Barnes, Associate Administrator. [FR Doc. 2013–30394 Filed 12–20–13; 8:45 am] BILLING CODE 3410–02–P PO 00000 Frm 00008 Fmt 4700 Sfmt 4700 SMALL BUSINESS ADMINISTRATION 13 CFR Part 121 RIN 3245–AG37 Small Business Size Standards: Construction U.S. Small Business Administration. ACTION: Final rule. AGENCY: The United States Small Business Administration (SBA) is increasing two small business size standards in North American Industry Classification System (NAICS) Sector 23, Construction, and retaining the current standards for the 30 remaining industries in that Sector. Specifically, SBA is increasing the size standards for NAICS 237210, Land Subdivision, from $7 million in average annual receipts to $25.5 million, and for Dredging and Surface Cleanup Activities, a subindustry category (or an ‘‘exception’’) under NAICS 237990, Other Heavy and Civil Engineering Construction, from $20 million to $25.5 million. As part of its ongoing comprehensive size standards review, SBA evaluated all size standards in NAICS Sector 23 to determine whether they should be retained or revised. DATES: This rule is effective January 22, 2014. FOR FURTHER INFORMATION CONTACT: Carl Jordan, Program Analyst, Office of Size Standards, (202) 205–6618 or sizestandards@sba.gov. SUPPLEMENTARY INFORMATION: To determine eligibility for Federal small business assistance programs, SBA establishes small business size definitions (referred to as size standards) for private sector industries in the United States. The SBA’s existing size standards use two primary measures of business size, average annual receipts and number of employees. Financial assets, electric output and refining capacity are used as size measures for a few specialized industries. In addition, SBA’s Small Business Investment Company (SBIC), 7(a), and Certified Development Company (CDC or 504) Loan Programs determine small business eligibility using either the industry based size standards or alternative net worth and net income size based standards. At the start of the current comprehensive review of size standards, there were 41 different size standards levels, covering 1,141 NAICS industries and 18 subindustry activities. Of these, 31 were based on average annual receipts, seven based on number of employees, and SUMMARY: E:\FR\FM\23DER1.SGM 23DER1

Agencies

[Federal Register Volume 78, Number 246 (Monday, December 23, 2013)]
[Rules and Regulations]
[Pages 77329-77334]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-30394]


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

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1217

[Document Number AMS-FV-13-0038]


Softwood Lumber Research, Promotion, Consumer Education and 
Industry Information Order; Changes to the Membership of the Softwood 
Lumber Board

AGENCY: Agricultural Marketing Service.

ACTION: Final rule.

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

[[Page 77330]]

SUMMARY: This rule changes the membership of 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). Under the Order, assessments are collected from 
U.S. manufacturers (domestic) and importers and used for projects to 
promote softwood lumber within the United States. This rule revises the 
Board's membership to reflect the diversity of the industry in terms of 
size of operation; allows companies that operate in multiple geographic 
regions to seek representation in any region in which they operate 
(U.S. or import); adds flexibility for the Board to nominate eligible 
persons to fill vacancies that occur during a term; and re-designates 
the States of Virginia and West Virginia to the U.S. South Region. 
These changes will help facilitate program operations.

DATES: Effective Date: December 24, 2013.

FOR FURTHER INFORMATION CONTACT: Maureen T. Pello, Marketing 
Specialist, Promotion and Economics Division, Fruit and Vegetable 
Program, AMS, USDA, P.O. Box 831, Beavercreek, Oregon 97004; telephone: 
(503) 632-8848; facsimile (503) 632-8852; or electronic mail: 
Maureen.Pello@ams.usda.gov.

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

Executive Orders 12866 and 13563

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

Executive Order 13175

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

Executive Order 12988

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

Background

    This rule changes the Board's membership provisions under the 
Order. The Board administers the Order with oversight by USDA. Under 
the Order, assessments are collected from U.S. manufacturers and 
importers and used for projects to promote softwood lumber within the 
United States. This rule revises the Board's membership to reflect the 
diversity of the industry in terms of size of operation; allow 
companies that operate in multiple regions to seek representation in 
any region in which they operate (U.S. or import); add flexibility for 
the Board to nominate eligible persons to fill vacancies that occur 
during a term; and re-designate the States of Virginia and West 
Virginia to the U.S. South Region. These changes will help facilitate 
program operations and were unanimously recommended by the Board in 
July 2013.
    Pursuant to section 1217.40(b), the Board is composed of 18 or 19 
members, depending upon whether an additional importer member is 
appointed to the Board. Twelve members are domestic manufacturers and 
six members are importers of softwood lumber from Canada. Of the 12 
domestic manufacturers, 6 represent the U.S. South, 5 represent the 
U.S. West and 1 represents the Northeast and Lake States. Of the six 
Canadian importers, four represent Canada West and two represent Canada 
East. An additional importer member may be appointed to represent all 
other importing countries besides Canada. Section 1217.40(c)(2) 
provides authority for the Board to recommend changes to its membership 
and nomination process.
    The Board met on May 7 and 8, 2013, and reviewed program 
operations, including the Board's structure and nomination process. The 
Board reviewed these issues further and made the following four 
recommendations in July 2013.

Board Diversity and Size of Operation

    The Board recommended that its regional membership be revised to 
reflect the diversity of the industry in terms of size of operation. 
About 8 percent of the companies covered under the Order account for 
the top two-thirds of the total annual volume of assessable softwood 
lumber (both domestic and imports). These companies are considered 
large by the industry in terms of size of operation. Some of these 
companies operate in multiple regions and some are both a domestic 
manufacturer and an importer of softwood lumber. Ninety-two percent of 
the companies covered under the Order account for the remaining one-
third of the total annual volume of assessable softwood lumber. These 
are considered small by the industry in terms of size of operation.
    The Board wants to ensure that this diversity is reflected within 
each region. The Board analyzed each region's volume of assessable 
softwood lumber in relation to the region's volume attributed to small 
and large companies. Table 1 below shows this analysis based on 3-year 
average data (2010-2012).

[[Page 77331]]



                  Table 1--Regional Analysis of Assessable Softwood Lumber by Size of Operation
----------------------------------------------------------------------------------------------------------------
                                                                             Large companies           Small
                                                                        -------------------------    companies
                                                                                                 ---------------
                    Region                         Assessable volume                                 Regional
                                                  (billion board feet)       Regional volume          volume
                                                                           (billion board feet)   (billion board
                                                                                                       feet)
----------------------------------------------------------------------------------------------------------------
U.S. South....................................                   10.436              5.951 (57%)     4.485 (43%)
U.S. West.....................................                   10.548              8.017 (76%)     2.511 (24%)
NE. and Lake States...........................                    0.749              0.229 (31%)     0.520 (69%)
Canada West...................................                    4.983              3.919 (79%)     1.064 (21%)
Canada East...................................                    2.379              1.315 (55%)     1.064 (45%)
----------------------------------------------------------------------------------------------------------------
* These figures are an average of data from 2010-2012. 2012 is actual Board assessment data from its first year
  of operation. 2010 and 2011 Canadian data is from U.S. Customs and Border Protection. 2010 and 2011 U.S. data
  is from Forest Economic Advisors.

    It is noted that for the U.S. South, while the majority of the 
volume of assessable softwood lumber is attributed to large companies, 
almost 90 percent of the number of companies operating in this region 
are small. The Board considered this in its recommended distribution of 
Board seats as shown in Table 2 below.

                                              Table 2--Allocation of Board Seats Based on Size of Operation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                          Number of seats
            Size of operation             --------------------------------------------------------------------------------------------------------------
                                            U.S. South   U.S. West        NE. and lake states      Canada east  Canada west     Non-Canadian importer
--------------------------------------------------------------------------------------------------------------------------------------------------------
Large companies..........................            2            4  ............................            1            3  ...........................
Small companies..........................            4            1  N/A.........................            1            1  N/A
                                                     6            5  1...........................            2            4  1
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The Northeast and Lake States member and non-Canadian importer member may represent companies of any size.

    Additionally, if there were no eligible nominees for a large or 
small seat within a region, that seat may be filled by a nominee 
representing a company of any size. Should a company's size change 
during a member's term of office, that member may serve for the 
remainder of the term to which they were appointed. Section 1217.40(b) 
is revised accordingly. Modifications have been made in this final rule 
to clarify that the changes to paragraphs (a) and (b) in section 
1217.40 will become effective for the term of office beginning January 
1, 2015.
    Further, section 1217.40(c) requires the Board to periodically 
review the geographic distribution of the volume of softwood lumber 
manufactured and shipped within the United States by domestic 
manufacturers and the volume of softwood lumber imported into the 
United States. This section is revised to require the Board to also 
periodically review the distribution of seats based on size of 
operation and recommend changes as necessary. Section 1217.40(c) is 
revised accordingly.

Entities That Operate in Multiple Regions (U.S. and/or Import)

    Currently, section 1217.41(b)(3) provides that nominees that are 
both a domestic manufacturer and importer may seek nomination to the 
Board as either a domestic manufacturer or an importer, but not both. 
Nominees who domestically manufacture the majority of their softwood 
lumber must seek representation as a domestic manufacturer and nominees 
who import the majority of their softwood lumber must seek 
representation as an importer. Section 1217.41(b)(4) provides that 
domestic manufacturers who manufacture and domestically ship from more 
than one U.S. region must seek representation in the region of the 
majority of their softwood lumber. Further, section 1217.41(b)(5) 
provides that importers who import from more than one Canadian region 
must seek representation in the region from which they import the 
majority of their softwood lumber.
    As previously mentioned some entities in the softwood lumber 
industry are both domestic manufacturers and importers and operate in 
multiple regions under the Order. Industry members would like the 
flexibility to choose which region they represent and whether they seek 
a position as a domestic manufacturer or an importer on the Board. 
Thus, the Board recommended revising the Order so that entities that 
are U.S. manufacturers and importers and who may operate in multiple 
regions have the ability to seek representation in any region in which 
they operate. This will add flexibility to the nomination process by 
allowing companies to seek representation in their region of choice. 
Paragraphs (3), (4) and (5) of section 1217.41(b) are revised 
accordingly.

Vacancies That Occur Mid-Term

    Section 1217.43(c) currently specifies that if a position becomes 
vacant, nominations to fill the vacancy be conducted using the 
nomination process set forth in the Order (section 1217.41(b)) whereby 
the Board solicits the names of eligible nominees and then conducts 
regional elections. The process is lengthy and can result in a seat 
remaining vacant for an extended period of time. Thus, the Board 
recommended revising the Order to allow the Board the flexibility to 
nominate eligible persons to fill vacancies that occur during a term. 
This will facilitate program operations by helping to ensure that 
vacancies are filled in a timely manner. Section 1217.43(c) is revised 
accordingly.

Virginia and West Virginia

    Currently, section 1217.40(b)(1)(iii) specifies that the States of 
Virginia and West Virginia are included as part of the Northeast and 
Lake States Region under the Order. However, softwood lumber from 
Virginia and West Virginia is

[[Page 77332]]

predominately pine, a much different species from the white spruce and 
red pine in the Northeast and Lake States, respectively. Thus, the 
Board recommended that the Order be revised to re-designate the States 
of Virginia and West Virginia as part of the U.S. South. The volume of 
softwood lumber from Virginia and West Virginia is relatively small 
(284 million board feet in 2012), so this change will have no impact on 
the regional distribution of seats on the Board. This change will align 
Virginia and West Virginia with the region in which they have more in 
common. Section 1217.40(b)(1)(iii) is revised accordingly.
    This rule also makes two minor changes to the Order. In paragraph 
(b) of section 1217.70 on reports, the last sentence is modified to 
specify that importers who pay their assessments directly to the Board 
must submit their report that accompanies the payment of collected 
assessments within 30 calendar days after the end of the quarter in 
which the softwood lumber was imported as opposed to 30 calendar days 
after importation. This language was inadvertently omitted from the 
final rule that implemented the Order (76 FR 46185; August 2, 2012) and 
will correct the Order provisions to be in line with current industry 
practices. This rule also changes the OMB control number in section 
1217.108 from 0581-NEW to 0581-0264, the control number assigned by the 
OMB.

Final Regulatory Flexibility Act Analysis

    In accordance with the Regulatory Flexibility Act (RFA) (5 U.S.C. 
601-612), AMS is required to examine the impact of the rule on small 
entities. Accordingly, AMS has considered the economic impact of this 
action on small entities.
    The purpose of the RFA is to fit regulatory actions to the scale of 
businesses subject to such actions so that small businesses will not be 
disproportionately burdened. The Small Business Administration defines, 
in 13 CFR part 121, small agricultural producers as those having annual 
receipts of no more than $750,000 and small agricultural service firms 
(domestic manufacturers and importers) as those having annual receipts 
of no more than $7.0 million.
    According to the Board, it is estimated that there are currently 
about 446 domestic manufacturers of softwood lumber in the United 
States. This number represents separate business entities; one business 
entity may include multiple sawmills. Using an average price of $322 
per thousand board feet,\1\ a domestic manufacturer who ships less than 
about 25 million board feet per year would be considered a small 
entity. Using 2012 data, it is estimated that about 270 domestic 
manufacturers, or about 60 percent \2\, ship less than 25 million board 
feet annually.
---------------------------------------------------------------------------

    \1\ Price data was obtained from Random Lengths Publications, 
Inc., and is a framing composite price that is designed as a broad 
measure of price movement in the lumber market 
(www.randomlengths.com).
    \2\ Percentages were obtained from the American Lumber Standard 
Committee, Inc. (ALSC). The ALSC administers an accreditation 
program for the grade marking of lumber produced under the American 
Softwood Lumber Standard (Voluntary Product Standard 20). This 
information is also confirmed by Board data.
---------------------------------------------------------------------------

    Likewise, based on data from U.S. Customs and Border Protection 
(Customs) and the Board, it is estimated there are currently about 767 
importers of softwood lumber. Using 2012 Customs data, about 699 
importers, or about 91 percent, import less than $7.0 million worth of 
softwood lumber annually. Thus, for purposes of the RFA, the majority 
of domestic manufacturers and importers of softwood lumber would be 
considered small entities.
    Regarding value of the commodity, with domestic production 
averaging about 28.5 billion board feet in 2012, and using an average 
price of $322 per thousand board feet, the average annual domestic 
value for softwood lumber is about $9.2 billion. According to Customs 
data, the average annual value for softwood lumber imports for 2012 is 
about $3.5 billion.
    This rule makes four changes to the Order regarding the Board's 
membership. Paragraphs (1) and (2) of section 1217.40(b) are revised to 
reflect the diversity of the industry in terms of size of operation; 
paragraph 1217.40(c) is revised to require the Board to periodically 
review this distribution. Paragraphs (3), (4) and (5) of section 
1217.41(b) are revised to allow companies that operate in multiple 
regions to seek representation in any region in which they operate. 
Section 1217.43(c) is revised to add flexibility for the Board to 
nominate eligible persons to fill vacancies that occur during a term. 
Section 1217.40(b)(1)(iii) is revised to re-designate the States of 
Virginia and West Virginia to the U.S. South Region. These changes were 
unanimously recommended by the Board and are authorized under section 
1217.40(c) of the Order and section 515(b)(3) of the 1996 Act.
    Regarding the economic impact of this rule on affected entities, 
these changes are administrative in nature and have no economic impact 
on entities covered under the program. These changes will help maintain 
the Board's balance in terms of size of operation by geographic region; 
add flexibility so that multi-region companies may choose which region 
they represent on the Board; help ensure that mid-term vacancies are 
filled in a timely manner; and better align the States of Virginia and 
West Virginia.
    Regarding alternatives, the Board explored various options 
regarding the diversity of size of operation. The Board considered 
establishing a separate region for multi-region companies and companies 
that are both a domestic manufacturer and an importer. The Board also 
considered establishing some ``at large'' seats for multi-region 
companies. The Board considered weighting an entity's vote in a 
regional election by volume. The Board also considered maintaining the 
status quo and not changing the Order in this regard. After much 
deliberation, the Board opted to recommend allocating regional seats 
based on an analysis of the volume of softwood lumber within each 
region and the volume of assessable softwood lumber covered under the 
Order.
    The Board considered maintaining the status quo regarding multi-
region companies who may also be a domestic manufacturer and importer, 
filling mid-term vacancies and the regional designation for the States 
of Virginia and West Virginia. The Board ultimately recommended 
modifications to these Order provisions.
    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 0581-0264. This rule imposes 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. Finally, USDA has 
not identified any relevant Federal rules that duplicate, overlap, or 
conflict with this rule.
    AMS is committed to complying with the E-Government Act, to promote 
the use of the Internet and other information technologies to provide 
increased opportunities for citizen access to Government information 
and services, and for other purposes.

[[Page 77333]]

    Regarding outreach efforts, these actions were discussed by the 
Board at meetings on May 7 and 8, 2013. The Board's Executive Committee 
discussed these issues on January 7, June 3 and 10, and July 1, 2013. 
All of the Board's meetings, including meetings held via 
teleconference, are open to the public and interested persons are 
invited to participate and express their views.
    A proposed rule concerning this action was published in the Federal 
Register on September 25, 2013 (78 FR 58956). The Board mailed copies 
of the rule to all known domestic manufacturers and importers of 
softwood lumber. The Board included notifications about the proposed 
rule in its newsletters and on its Web site at softwoodlumberboard.org. 
Finally, the proposal was made available through the Internet by USDA 
and the Office of the Federal Register. A 30-day comment period ending 
October 25, 2013, was provided to allow interested persons to submit 
comments.

Analysis of Comments

    Six comments were received in response to the proposed rule, all 
supporting the proposal. In summary, the commenters concurred that 
revising the Board's membership to reflect the diversity of the 
industry by size of operation will help ensure that the Board reflects 
the make-up of the industry and provide for fair representation. 
Allowing entities that operate in multiple regions to choose the region 
they would like to represent provides flexibility and may also 
facilitate greater interest in serving on the Board and Board 
activities. One commenter opined that allowing the Board the ability to 
nominate candidates to fill vacancies that occur mid-term would save 
costs since the Board would not have to engage in a lengthy nomination 
process. Three commenters stated that switching the States of Virginia 
and West Virginia to the U.S. South Region was appropriate.
    After consideration of all relevant matters presented, including 
the information and recommendation submitted by the Board and other 
available information, it is hereby found that this rule, as 
hereinafter set forth, is consistent with and will effectuate the 
purposes of the 1996 Act.
    It is further found that good cause exists for not postponing the 
effective date of this rule until 30 days after publication in the 
Federal Register (5 U.S.C.) because this action needs to be in effect 
as soon as possible to allow sufficient time for completion of the 
nomination process and appointments for the term of office beginning 
January 1, 2015. Additionally, a 30-day comment period was provided for 
in the proposed rule, and all six comments supported the proposed 
changes.

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 
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. Amend Sec.  1217.40 by:
0
a. Revising paragraph (a);
0
b. Revising paragraphs (b)(1), (b)(2) introductory text, (b)(2)(i), and 
(b)(2)(ii);
0
c. Revising the introductory text to paragraph (c) and paragraph (c)(2) 
and adding a new paragraph (c)(3)
    The changes to read as follows:


Sec.  1217.40  Establishment and membership.

    (a) Establishment of the Board. There is hereby established a 
Softwood Lumber Board to administer the terms and provisions of this 
Order and promote the use of softwood lumber. The Board shall be 
composed of manufacturers for the U.S. market who manufacture and 
domestically ship or import 15 million board feet or more of softwood 
lumber in the United States during a fiscal period. Seats on the Board 
shall be apportioned based on the volume of softwood lumber 
manufactured and shipped within the United States by domestic 
manufacturers and the volume of softwood lumber imported into the 
United States. Commencing with the term of office beginning January 1, 
2015, seats on the Board shall also be apportioned based on size of 
operation within each geographic region, as specified in paragraphs 
(b)(1)(i), (b)(1)(ii), (b)(2)(i), and (b)(2)(ii) of this section. For 
purposes of this section, large means manufacturers for the U.S. market 
who account for the top two-thirds of the total annual volume of 
assessable softwood lumber and small means those who account for the 
remaining one-third of the total annual volume of assessable softwood 
lumber. If there are no eligible nominees for a large or small seat 
within a region, that seat may be filled by a nominee representing an 
eligible manufacturer for the U.S. market of any size. Should the size 
of a manufacturer for the U.S. market change during a member's term of 
office, that member could serve for the remainder of the term.
    (b) * * *
    (1) Domestic manufacturers. Twelve members shall be domestic 
manufacturers from the following three regions:
    (i) Six members shall be from 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. Commencing with the term of office 
beginning January 1, 2015, of these six members, two must be large and 
four must be small;
    (ii) Five members shall be from 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. Commencing with the term of 
office beginning January 1, 2015, of these five members, four must be 
large and one must be small; and
    (iii) One member shall be from 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 
paragraphs (b)(1)(i), (b)(1)(ii), or (b)(1)(iii) of this section.
    (2) Importers. Six members shall be importers who represent the 
following regions:
    (i) Four members shall import softwood lumber from the Canadian 
West Region, which consists of the provinces of British Columbia and 
Alberta. Commencing with the term of office beginning January 1, 2015, 
of these four members, three must be large and one must be small; and
    (ii) Two members shall import softwood lumber from the Canadian 
East Region, which consists of the Canadian territories and all other 
Canadian provinces not listed in paragraph (b)(2)(i) of this section 
that import softwood lumber into the United States. Commencing with the 
term of office beginning January 1, 2015, of these two members, one 
must be large and one must be small.
* * * * *

[[Page 77334]]

    (c) In each five-year period, but not more frequently than once in 
each three-year period, the Board shall:
* * * * *
    (2) Review, based on a three-year average, the distribution of the 
size of operations within each region; and
    (3) If warranted, recommend to the Secretary the reapportionment of 
the Board membership to reflect changes in the geographical 
distribution of the volume of softwood lumber manufactured and shipped 
within the United States by domestic manufacturers and the volume of 
softwood lumber imported into the United States. The destination of 
volumes between regions and the distribution of the size of operations 
within regions shall also be considered. The number of Board members 
may also be changed. Any changes in Board composition shall be 
implemented by the Secretary through rulemaking.

0
3. Amend Sec.  1217.41 by
0
a. Revising the introductory text to paragraph (b);
0
b. Revising paragraphs (b)(1), (b)(2), (b)(3), (b)(4), and (b)(5).
    The changes to read as follows:


Sec.  1217.41  Nominations and appointments.

* * * * *
    (b) Subsequent nominations shall be conducted as follows:
    (1) The Board shall conduct outreach to all segments of the 
softwood lumber industry. Softwood lumber domestic manufacturers and 
importers may submit nominations to the Board. Subsequent nominees must 
domestically manufacture and/or import 15 million board feet or more of 
softwood lumber per fiscal year;
    (2) Domestic manufacturers and importer nominees may provide the 
Board a short background statement outlining their qualifications to 
serve on the Board;
    (3) Nominees that are both a domestic manufacturer and an importer 
may seek nomination to the Board and vote in the nomination process as 
either a domestic manufacturer or an importer, but not both. Such 
nominees must domestically manufacture and import 15 million board feet 
or more of softwood lumber per fiscal year;
    (4) The names of domestic manufacturer nominees shall be placed on 
a ballot by region. The ballots along with the background statements 
shall be mailed to domestic manufacturers in each respective region for 
a vote. Domestic manufacturers who manufacture softwood lumber in more 
than one region may seek nomination and vote in one region of their 
choice. The votes shall be tabulated for each region with the nominee 
receiving the highest number of votes at the top of the list in 
descending order by vote. The top two candidates for each position 
shall be submitted to the Secretary;
    (5) The names of importer nominees shall be placed on a ballot by 
region. The ballots along with the background statements shall be 
mailed to importers in each respective region for a vote. Importers who 
import softwood lumber from more than one region may seek nomination 
and vote in one region of their choice. The votes shall be tabulated 
for each region with the nominee receiving the highest number of votes 
at the top of the list in descending order by vote. The top two 
candidates for each position shall be submitted to the Secretary.
* * * * *

0
4. Amend Sec.  1217.43 by revising paragraph (c) to read as follows:


Sec.  1217.43  Removal and vacancies.

* * * * *
    (c) If a position becomes vacant, nominations to fill the vacancy 
may be conducted using the nominations process set forth in Sec.  
1217.41(b) or the Board may nominate eligible persons. A vacancy will 
not be required to be filled if the unexpired term is less than 6 
months.

0
5. Amend Sec.  1217.70 by revising paragraph (b) to read as follows:


Sec.  1217.70  Reports.

* * * * *
    (b) For domestic manufacturers, such information shall accompany 
the collected payment of assessments on a quarterly basis specified in 
Sec.  1217.52. For importers who pay their assessments directly to the 
Board, such information shall accompany the payment of collected 
assessments within 30 calendar days after the end of the quarter in 
which the softwood lumber was imported.

0
6. Section 1217.108 is revised to read as follows:


Sec.  1217.108  OMB control number.

    The control number assigned to the information collection 
requirement in this subpart by the Office of Management and Budget 
pursuant to the Paperwork Reduction Act of 1995, 4 U.S.C. is OMB 
control number 0581-0264.

    Dated: December 17, 2013.
Rex A. Barnes,
Associate Administrator.
[FR Doc. 2013-30394 Filed 12-20-13; 8:45 am]
BILLING CODE 3410-02-P