Paper and Paper-Based Packaging Promotion, Research and Information Order, 3695-3715 [2014-01002]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 79, Number 14 (Wednesday, January 22, 2014)]
[Rules and Regulations]
[Pages 3695-3715]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-01002]



[[Page 3695]]

Vol. 79

Wednesday,

No. 14

January 22, 2014

Part III





 Department of Agriculture





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 Agricultural Marketing Service





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7 CFR Part 1222





 Paper and Paper-Based Packaging Promotion, Research and Information 
Order; Final Rule

Federal Register / Vol. 79, No. 14 / Wednesday, January 22, 2014 / 
Rules and Regulations

[[Page 3696]]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1222

[Document Number AMS-FV-11-0069 FR]
RIN 0581-AD21


Paper and Paper-Based Packaging Promotion, Research and 
Information Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule establishes a Paper and Paper-Based Packaging 
Promotion, Research and Information Order (Order). The purpose of the 
program is to maintain and expand markets for paper and paper-based 
packaging. The program will be financed by an assessment on paper and 
paper-based packaging manufacturers (domestic producers) and importers 
and administered by a board of industry members appointed by the 
Secretary of Agriculture (Secretary). The assessment rate will 
initially be $0.35 per short ton. The U.S. Department of Agriculture 
(Department or USDA) conducted a referendum among eligible manfacturers 
and importers from October 28 through November 8, 2013. Eighty-five 
percent of those voting in the referendum representing 95 percent of 
the volume of paper and paper-based packaging represented in the 
referendum favored implementation of the program.

DATES:  Effective date: January 23, 2014.
    Applicability date: Collection of assessments (sections 1222.52 and 
1222.53) and appropriate reporting and recordkeeping (sections 1222.70 
and 1222.71) will begin March 1, 2014.

FOR FURTHER INFORMATION CONTACT: Kimberly Spriggs, Marketing 
Specialist, Promotion and Economics Division, Fruit and Vegetable 
Program, AMS, USDA, 1400 Independence Avenue SW., Room 1406-S, Stop 
0244, Washington, DC 20250-0244; telephone: (202) 720-9915 or (888) 
720-9917 (toll free); or facsimile: (202) 205-2800; or electronic mail: 
Kimberly.Spriggs@ams.usda.gov.

SUPPLEMENTARY INFORMATION: This rule is issued pursuant to the 
Commodity Promotion, Research and Information Act of 1996 (1996 Act) (7 
U.S.C. 7411-7425).
    As part of this rulemaking process, a proposed rule was published 
in the Federal Register on January 2, 2013 (78 FR 188). That rule 
provided for a 60-day comment period which ended on March 4, 2013. 
Seventy-five comments were received. The comments were addressed in a 
second proposed rule and referendum order that was published in the 
Federal Register on September 16, 2013 (78 FR 57006). A final rule 
prescribing referendum procedures was published in the Federal Register 
on September 16, 2013 (78 FR 56817).

Background

    This rule establishes an industry-funded research, promotion and 
information program for paper and paper-based packaging. The program 
will cover four types of paper and paper-based packaging--printing, 
writing and related paper (used to make products for printing, writing 
and other communication purposes), kraft packaging paper (used for 
products like grocery bags and sacks), containerboard (used to make 
corrugated boxes, shipping containers and related products), and 
paperboard (used for food and beverage packaging, tubes and other 
miscellaneous products). The program will be financed by an assessment 
on U.S. manufacturers and importers of paper and paper-based packaging 
and administered by a board of industry members appointed by the 
Secretary. The assessment rate will initially be $0.35 per short ton. 
(One short ton equals 2,000 pounds). Entities that domestically 
manufacture or import less than 100,000 short tons per marketing year 
will be exempt from the payment of assessments. The purpose of the 
program is to maintain and expand markets for paper and paper-based 
packaging.
    A proposal for a promotion program was submitted to USDA by the 
Paper and Paper-Based Packaging Panel (Panel). The Panel is a group of 
14 industry members that was formed in May 2010 to oversee development 
of the program. The American Forest & Paper Association (AF&PA), a 
national trade association, provided technical assistance to the Panel.

Authority in 1996 Act

    The Order is authorized under the 1996 Act which authorizes USDA to 
establish agricultural commodity research and promotion orders which 
may include a combination of promotion, research, industry information 
and consumer information activities funded by mandatory assessments. 
Commodity promotion programs provide a unique opportunity for an 
industry to inform consumers about their particular commodity and have 
the ability to provide significant conservation benefits to producers 
and the public. These programs are designed to strengthen the position 
of agricultural commodity industries in the marketplace, maintain and 
expand markets and uses for agricultural commodities, develop new uses 
for agricultural commodities or assist producers in meeting their 
conservation objectives. As defined under section 513(1)(D) of the 1996 
Act, agricultural commodities include the products of forestry, which 
includes paper and paper-based packaging.
    The 1996 Act provides for a number of optional provisions that 
allow the tailoring of orders for different commodities. Section 516 of 
the 1996 Act provides permissive terms for orders, and other sections 
provide for alternatives. For example, section 514 of the 1996 Act 
provides for orders applicable to (1) producers, (2) first handlers and 
others in the marketing chain as appropriate, and (3) importers (if 
imports are subject to assessments). Section 516 states that an order 
may include an exemption of de minimis quantities of an agricultural 
commodity; different payment and reporting schedules; coverage of 
research, promotion, and information activities to expand, improve, or 
make more efficient the marketing or use of an agricultural commodity 
in both domestic and foreign markets; provision for reserve funds; 
provision for credits for generic and branded activities; and 
assessment of imports.
    In addition, section 518 of the 1996 Act provides for referenda to 
ascertain approval of an order to be conducted either prior to its 
going into effect or within three years after assessments first begin 
under the order. An order also may provide for its approval in a 
referendum based upon different voting patterns. Section 515 provides 
for establishment of a board or council from among producers, first 
handlers and others in the marketing chain as appropriate, and 
importers, if imports are subject to assessment.

Industry Background

    Paper and paper-based packaging is produced from pulp. Pulp is made 
by chemically or mechanically separating fibers from wood or by 
recycling recovered paper and paper-based packaging products. The 
separated, moist fibers are then pressed together and dried into 
flexible sheets.

U.S. Pulpwood Production \1\
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    \1\ Johnson, Tony G., Ronald J., Walters, Brian F., Sorenson, 
Colin, Woodall, Christopher W., Morgan, Todd A., National Pulpwood 
Production, 2008, USDA, p. 15 (www.treesearch.fs.fed.us/pubs/37960).
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    Wood used to make pulp is known as pulpwood. Total pulpwood 
production

[[Page 3697]]

includes roundwood chipped at mills and other primary industry mill 
residues. Roundwood includes both softwood and hardwood. Roundwood 
pulpwood continues to be the primary fiber source used in pulp 
manufacturing in the United States. Wood residues consist primarily of 
mill residue chips, a byproduct of sawmilling and veneer mill 
operations.
    According to U.S. Forest Service statistics, in 2008, U.S. pulpwood 
production totaled 89.2 million cords. Of that total, softwood 
roundwood and residues accounted for 69 percent (61.4 million cords). 
Hardwood roundwood and residues accounted for 31 percent (27.7 million 
cords). By region, the South accounted for 76.4 percent of total U.S. 
pulpwood production (68.1 million cords). The West accounted for 9.9 
percent (8.8 million cords), the Midwest accounted for 7.1 percent (6.3 
million cords), and the Northeast accounted for 6.6 percent (5.9 
million cords) of total U.S. pulpwood production.

Manufacturers and Converting Operations

    The U.S. paper industry encompasses two broad segments--primary 
producers/manufacturers (mills) and converters. Primary manufacturers 
make rolls of paper and paper-based packaging (commonly referred to as 
roll stock) from pulp produced in the same mill or pulp supplied by 
another mill. Primary manufacturers are covered under the program.
    Converters turn roll stock into final products such as boxes, 
corrugated boxes, shipping containers, envelopes, magazines, catalogs, 
copy paper and bags/sacks. Converting operations can take place in a 
primary producer mill or off-site. When converting is done in a primary 
producer mill, the roll produced before it is converted into a final 
product or sold to an off-site converter is covered under the program. 
Converting operations (and thus converted products) are not covered 
under the program. An exception is the case of cut-size printing and 
writing papers (including folio sheets) made by primary producers that 
are cut prior to leaving the mill.\2\ These are classified as primary 
products (not converted products) under the Harmonized Tariff Schedule 
of the United States (HTSUS) and will, therefore, be assessed under the 
program.
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    \2\ Cut-size office papers are used in office machines and are 
sold in sheet form typically 8.5'' x 11'', 8.5'' x 14'' or 11'' x 
11''. Folio sheets are cut-size papers sold in sheet form in sizes 
of 17'' x 22'' or larger. These would be included in the printing, 
writing and related paper category.
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Types of Paper and Paper-Based Packaging

    There are six major types of paper and paper-based packaging 
produced by manufacturers: (1) Printing, writing and related paper; (2) 
kraft packaging paper; (3) containerboard; (4) paperboard; (5) tissue 
paper; and (6) newsprint. The Order covers the first four of the six 
types mentioned above.
    Printing, writing and related paper is coated or uncoated paper, 
including thermal but excluding carbonless paper, which is subsequently 
converted into products used for printing, writing and other 
communication purposes, such as file folders, envelopes, catalogues, 
magazines and brochures. Demand for carbonless paper has declined 
significantly due to other technologies. Thus, the Panel concluded and 
the Department concurs that the carbonless segment of the industry will 
not be able to absorb the cost of a promotion program at this time.
    Kraft packaging paper is coarse, unbleached, semi-bleached or fully 
bleached grades of paper that are subsequently converted into products 
such as grocery bags, multiwall sacks, waxed paper and other products. 
``Kraft'' refers to a process for transforming wood into a high 
quality, strong pulp for making paper and paper-based packaging. 
Bleaching is the chemical processing of pulp to remove the natural 
brown color and thus make the pulp and pulp products whiter.
    Containerboard includes all forms of linerboard, which is used as 
the facing material in the production of corrugated or solid fiber 
shipping boxes, and medium, which is used as the inner fluting material 
in the manufacture of such boxes. Containerboard is used to manufacture 
corrugated boxes, shipping containers, point-of-sale displays, pallets 
and other products.
    Paperboard is solid bleached kraft board, recycled board and 
unbleached kraft board, which is converted into products such as 
folding boxes, tubes, cans and drums. Paperboard is also used to 
package food, beverages and other nondurable consumer products such as 
pharmaceuticals, clothing, footwear and cosmetics. Nondurable goods are 
used immediately or have a lifespan of 3 years or less.
    The two types of paper and paper-based packaging that are not 
covered under the program are tissue paper and newsprint. With the 
exception of restroom hand-dryers versus paper towels, tissue paper 
products are not facing competition from alternative products. The 
opposite is true for newsprint. Demand for newsprint has drastically 
declined due to the shift toward digital communications. However, the 
Panel concluded and the USDA concurs that the newsprint segment of the 
industry are not able to incur the cost of a promotion program at this 
time.

U.S. Manufacturing by Region \3\
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    \3\ Manufacturing data was compiled by the AF&PA from its 51st 
Annual Survey of Paper, Paperboard and Pulp, 2011.
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    In 2011, about 68.5 million short tons of U.S. paper and paper-
based packaging to be covered under the program were produced. Of the 
68.5 million short tons, it is estimated that 63.2 percent was 
manufactured in the South, 17.1 percent was manufactured in the 
Midwest, 10.5 percent was manufactured in the Northeast, and 9.2 
percent was manufactured in the West. In terms of type, it is estimated 
that 50.1 percent was containerboard, 29.1 percent was printing, 
writing and related paper, 18.3 percent was paperboard, and 2.5 percent 
was kraft packaging paper.

Export Markets

    According to U.S. Census data, in 2011, exports of the four types 
of paper and paper-based packaging to be covered under the Order 
totaled about 11.5 million short tons, or 17 percent of domestic 
production. In terms of major export markets in 2011, it is estimated 
that 18.0 percent went to Western Europe, 16.0 percent each went to 
Canada and Mexico, 11.0 percent went to the Far East and Oceania, 9.0 
percent went to South America and 8.0 percent went to China. Of the 
11.5 million short tons, it is estimated that 46.0 percent was 
containerboard, 26.0 percent was paperboard, 22.0 percent was printing, 
writing and related paper, and 6.0 percent was kraft packaging paper.

Imports

    According to U.S. Customs and Border Protection (Customs) data, in 
2011, imports to be covered under the program totaled 7.5 million short 
tons. Of that total, about 58.6 percent was from Canada, 22.2 percent 
from Western Europe, 9.8 percent was from China, Japan and the Far 
East, 2.7 percent was from South America and the remainder was from 
other countries. In terms of type, about 72.0 percent of the imports 
were printing, writing and related paper, 13.1 percent was paperboard, 
10.1 percent was containerboard and 4.8 percent was kraft packaging 
paper.

[[Page 3698]]

Need for a Program

    According to AF&PA data, markets for paper and paper-based 
packaging that will be covered under the program declined by 15 percent 
between 2000 and 2010. U.S. shipments of cut-size office papers (one 
sector of the printing and writing category) grew with employment in 
white collar-intensive industries between 2000 and 2006. However, 
between 2006 and 2010, shipments fell 20 percent \4\ while employment 
in white collar-intensive industries declined by 5 percent. Moreover, 
in 2010, while employment in white collar-intensive industries 
stabilized,\5\ office paper shipments declined another 5 percent.\6\ 
This is illustrated in the following chart.
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    \4\ AF&PA's Statistics of Pulp, Paper and Paperboard, p. 7.
    \5\ Employment data was compiled by the AF&PA from the U.S. 
Bureau of Labor Statistics, https://www.bls.gov/data.
    \6\ AF&PA's Statistics, p. 7.
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BILLING CODE 3410-02-P
[GRAPHIC] [TIFF OMITTED] TR22JA14.000

    Markets for other printing and writing papers (exclusive of cut-
size office papers) declined 27 percent between 2006 and 2010.\7\ 
Digital forms of communication such as Internet advertising and the 
widespread availability of news, books and other digital information 
have contributed to this displacement. This is illustrated in the 
following chart.\8\
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    \7\ AF&PA's Statistics, p. 7 and 12.
    \8\ Printing activity index is from https://www.federalreserve.gov/releases/g17/ipdisk/ip_nsa.txt. The Federal 
Reserve Board reports production of nondurable goods, as well as 
other items, as indexes rather than in terms of tons, pounds or 
units. The base year is 2007, which means that if the index reaches 
105 in 2008, production has increased 5 percent relative to the 2007 
level. If the index falls to 95, it means that production has 
declined 5 percent relative to the 2007 level.

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[[Page 3699]]

[GRAPHIC] [TIFF OMITTED] TR22JA14.001

    According to AF&PA data, kraft paper markets declined 23 percent 
between 2000 and 2010,\9\ even as food store sales rose by 1 
percent.\10\ This is illustrated in the following chart.
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    \9\ AF&PA monthly Kraft Paper Statistical Reports.
    \10\ Retail food and beverage store sales data is from the U.S. 
Census Bureau (https://www.census.gov/retail) and was adjusted for 
inflation by the AF&PA using U.S. Bureau of Labor Statistics' 
consumer price index for food and beverages (http:/www.bls.gov/data/#prices).
[GRAPHIC] [TIFF OMITTED] TR22JA14.002

    Paperboard markets also have declined over the past decade.\11\ 
Paperboard is mainly facing competition from plastics, but also from 
foils and, to a lesser extent, glass. Between 2000 and 2010, U.S. 
paperboard markets contracted 10 percent as compared with a fairly 
stable demand (i.e., a 1 percent increase) for nondurable consumer 
goods. Additionally, paperboard markets stagnated when nondurable 
consumer goods demand grew in the mid-2000s.\12\ This is illustrated in 
the chart below.
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    \11\ AF&PA's Statistics, p. 9.
    \12\ https://www.federalreserve.gov/releases/g17/ipdisk/ip_nsa.txt.

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[[Page 3700]]

[GRAPHIC] [TIFF OMITTED] TR22JA14.003

    AF&PA data show that containerboard markets have remained fairly 
steady as compared to the other four types of paper and paper-based 
packaging to be covered under the program. U.S. containerboard markets 
declined 2 percent between 2000 and 2010,\13\ while demand for 
nondurable consumer goods, which accounts for most of the demand for 
corrugated boxes, rose 1 percent. As shown below, from 2000 through 
2007, containerboard markets largely kept pace with nondurable consumer 
goods, with containerboard demand growing 4 percent and nondurable 
goods up 5 percent.\14\ This is illustrated in the following chart.
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    \13\ AF&PA's Statistics, p. 9 and 20.
    \14\ https://www.federalreserve.gov/releases/g17/ipdisk/ip_nsa.txt.
[GRAPHIC] [TIFF OMITTED] TR22JA14.004

    In light of these market conditions, the Panel was formed in May 
2010 to assess the merits of a national promotion program. While there 
have been a number of ongoing campaigns designed to promote specific 
sectors of the paper industry, the impact of these programs has been 
limited due to funding. Additionally, while the programs have been 
useful, their messages have been tailored to specific segments of the 
industry. Ultimately, the Panel concluded that a national program that 
will generate about $25 million annually with a unified message that 
crosses all segments will benefit the entire industry.

Provisions of Program

    Sections 1222.1 through 1222.29 of the Order define certain terms 
that will be used throughout the Order. Several of the terms are common 
to all research and promotion programs authorized under the 1996 Act 
while other terms are specific to the paper and paper-based packaging 
Order.

[[Page 3701]]

    Sections 1222.40 through 1222.47 of the Order detail the 
establishment and membership of the Paper and Paper-Based Packaging 
Board, nominations and appointments, the term of office, removal and 
vacancies, procedure, reimbursement and attendance, powers and duties, 
and prohibited activities.
    Sections 1222.50 through 1222.53 of the Order detail requirements 
regarding the Board's budget and expenses, financial statements, 
assessments, and exemption from assessments. The Board's programs and 
expenses will be funded through assessments on U.S. manufacturers and 
importers, other income, and other funds available to the Board. The 
Order provides for an initial assessment rate of $0.35 per short ton of 
paper and paper-based packaging domestically manufactured or imported. 
Domestic manufacturers will pay assessments based on the quantity of 
paper and paper-based packaging manufactured or produced; the 
assessment is on the rollstock. An exception previously mentioned is 
the case of cut-size printing and writing papers (including folio 
sheets) in which case the assessment is on the cut-size paper. 
Importers will pay assessments based on the quantity of paper and 
paper-based packaging imported to the United States.
    Two years after the Order becomes effective and periodically 
thereafter, the Board will review the assessment rate and, if 
appropriate, recommend a change in the rate. At least two-thirds of the 
Board members must favor a change in the assessment rate. Any change in 
the assessment rate is subject to rulemaking by the Secretary.
    Domestic manufacturers must pay their assessments owed to the Board 
by the 30th calendar day of the month following the end of the quarter 
in which the paper and paper-based packaging was manufactured. Importer 
assessments will be collected through Customs. If Customs does not 
collect the assessment from an importer, then the importer is 
responsible for paying the assessment directly to the Board within 30 
calendar days after the end of the quarter in which the paper and 
paper-based packaging was imported.
    The Order provides authority for the Board to impose a late payment 
charge and interest for assessments overdue to the Board by 60 calendar 
days. The late payment charge and rate of interest must be prescribed 
in the Order's regulations issued by the Secretary.
    The Order provides for two exemptions. First, U.S. manufacturers 
and importers who domestically produce or import less than 100,000 
short tons during a marketing year are exempt from paying assessments. 
Manufacturers must apply to the Board for an exemption prior to the 
start of the fiscal year. This is an annual exemption; manufacturers 
must reapply each year. The Board will then issue, if deemed 
appropriate, a certificate of exemption to the eligible manufacturer. 
Once approved, domestic manufacturers will not have to pay assessments 
to the Board for the applicable fiscal year.
    Importers that imported less than 100,000 short tons of paper and 
paper-based packaging during the prior marketing year will 
automatically be considered exempt for the fiscal year that assessments 
are due, and will not be required to apply to the Board for a 
certificate of exemption. Customs data will be reviewed to determine 
applicable importers.
    Importers that imported more than 100,000 short tons of paper and 
paper-based packaging during the prior marketing year, but believe and 
can document that they will import less than 100,000 short tons during 
the current year may apply to the Board for a certificate of exemption. 
The Board will then issue, if deemed appropriate, a certificate of 
exemption to the eligible importer.
    Importers who are exempt will have their assessments as collected 
by Customs refunded by the Board within 60 calendar days after receipt 
of such assessments by the Board. No interest will be paid on the 
assessments collected by Customs or the Board.
    Manufacturers who did not apply to the Board for an exemption and 
domestically manufactured less than 100,000 short tons during the 
fiscal year will receive a refund from the Board for the applicable 
assessments within 30 calendar days after the end of the fiscal year. 
The Board will determine the assessments paid and refund the 
manufacturer accordingly.
    Importers who did not apply to the Board for an exemption, imported 
more than 100,000 short tons of paper and paper-based packaging during 
the prior marketing year, and imported less than 100,000 short tons 
during the fiscal year for which assessments are due, will receive a 
refund from the Board for the applicable assessments within 30 calendar 
days after the end of the fiscal year. The Board will determine the 
assessments paid and refund the importer accordingly.
    On the other hand, manufacturers and importers who receive an 
exemption certificate or an automatic exemption but domestically 
manufacture or import 100,000 short tons or more of paper and paper-
based packaging during the fiscal year must pay the Board the 
applicable assessments owed within 30 calendar days after the end of 
the fiscal year and submit any necessary reports to the Board.
    The second exemption under the Order is for organic paper and 
paper-based packaging.
    Sections 1222.60 through 1222.62 of the Order detail requirements 
regarding promotion, research and information programs, plans and 
projects authorized under the Order.
    Sections 1222.70 through 1222.72 specify the reporting and 
recordkeeping requirements under the Order as well as requirements 
regarding confidentiality of information.
    Section 1222.81(a) of the Order specifies that the program will not 
go into effect unless it is approved by a majority of current U.S. 
manufacturers and importers voting in a referendum who also represent a 
majority of the volume of paper and paper-based packaging represented 
in the referendum who, during a representative period determined by the 
Secretary, were engaged in the manufacturing or importation of paper 
and paper-based packaging into the United States. As previously 
mentioned, in a referendum held from October 28 through November 8, 
2013, 85 percent of those voting in the referendum representing 95 
percent of the volume of paper and paper-based packaging represented in 
the referendum favored implementation of the program.
    Section 1222.81(b) of the Order specifies criteria for subsequent 
referenda. Under the Order, a referendum may be held to ascertain 
whether the program should continue, be amended, or be terminated.
    Sections 1222.80 and sections 1222.82 through 1222.88 describe the 
rights of the Secretary; authorize the Secretary to suspend or 
terminate the Order when deemed appropriate; prescribe proceedings 
after termination; address personal liability, separability, and 
amendments; and provide Office of Management and Budget (OMB) control 
numbers. These provisions are common to all research and promotion 
programs authorized under the 1996 Act.

Executive Order 12866 and Executive Order 13563

    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563

[[Page 3702]]

emphasizes the importance of quantifying both costs and benefits, of 
reducing costs, of harmonizing rules, and of promoting flexibility. 
This rule is not a significant regulatory action under section 3(f) of 
Executive Order 12866, Regulatory Planning and Review, as supplemented 
by Executive Order 13563. The OMB has not reviewed it under that Order.
    We expect the economic impact of this rule to be minimal. The 
program is intended to include broad, fact-based messages highlighting 
the renewability, recyclability and reusability of paper and paper-
based packaging. Paper produced in the United States relies on fiber 
from sustainably managed forests and fiber recovered for recycling as 
its raw material. Broad messages about the recyclability of paper 
should enhance recovery efforts. Increasing paper recovering for 
recycling will increase the amount of paper diverted from landfills. 
Messaging to encourage the use of renewable and recyclable paper and 
paper-based packaging could help increase the use of bio-based 
products; paper and paper-based packaging are considered bio-based 
products because they are composed of wood fiber.
    The industry can also educate the public about the sustainability 
of paper and paper-based packaging. In the United States, more trees 
are grown than harvested. Between 1953 and 2006, the standing inventory 
of trees (i.e., the volume of growing trees) in U.S. forests increased 
by 49 percent and has increased by more than 20 percent since 1970.\15\
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    \15\ National Report of Sustainable Forests (2010), Page II-112, 
U.S. Forest Service www.fs.fed.us/research/sustain/).
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    Additionally, many paper products are manufactured using renewable 
energy. In 2008, an estimated 65 percent of the energy needed to 
operate U.S. pulp and paper mills was generated from renewable fuels 
derived largely from biomass.\16\ Broad campaigns to educate consumers 
about these factors should help all segments of the industry.
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    \16\ This is based on a 2008 survey of AF&PA member companies 
that produced pulp, paper and paperboard.
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    The program will also help the forest products industry maintain 
870,000 jobs across the nation and begin to create new jobs.\17\ In 
addition to these jobs, numerous other jobs in related sectors are 
dependent upon the economic health of this industry.
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    \17\ Forest products industry employment was calculated by 
summing March 2012 Bureau of Labor Statistics employment data for 
the following categories: Paper and paper products, logging, wood 
products, wood kitchen cabinets and countertops.
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    The program will be funded by industry through an assessment. The 
program will collect approximately $25 million in assessments from the 
top producing U.S. manufacturers and importers to conduct marketing and 
educate consumers about a variety of paper products, thus, benefiting 
all paper manufacturers and importers, including many small operations 
that will be exempt from the assessment. While the benefits of the 
program are difficult to quantify, they are expected to outweigh 
program costs. If the new program preserves just 0.24 percent of the 
paper and allied products industry sales by slowing demand declines for 
some grades and/or increasing demand growth for other grades, the 
economy could experience 3,360 additional jobs.\18\ For example, the 
Cotton Board has seen a Benefit-Cost Ratio for producers and the 
government of $8.80 return for each dollar invested; and since 1990, 
the Benefit-Cost Ratio for importers is a $14.80 return for each dollar 
invested. Other research and promotion programs have seen similar 
benefits.
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    \18\ This is an AF&PA estimate and was computed as follow. The 
paper and paper products industry currently employs 395,000 people, 
according to the Bureau of Labor Statistics. The grades of paper and 
paper-based packaging to be covered by the program accounted for 
about 83.3 percent of total paper and paper-based packaging in 2011. 
Hence, an estimated 329,000 direct jobs (83.3 percent of 395,000) 
are associated with grades that will be covered by the program. 
Multipliers compiled by the Economic Policy Institute indicate that 
100 jobs in the paper industry support an additional 325 jobs 
outside the industry (supplier industries, government entities and 
schools, and local communities where paper industry employees spend 
their wages). Thus, 329,000 paper industry jobs support 1.4 million 
jobs throughout the economy ((329,000 jobs) + (329,000 jobs x 
3.25)). If the program preserves just 0.24 percent of the paper and 
allied products industry sales by slowing demand declines for some 
grades and/or increasing demand growth for other grades, the economy 
will have 3,360 additional jobs (0.24 percent x 1.4 million).
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    The assessments collected from U.S. manufacturers and importers are 
expected to be relatively small compared to U.S. manufacturer revenue 
and the value of paper and paper-based packaging imports. Many 
businesses make the decision to not pass these costs to consumers and 
instead keep it as a cost to do business because the costs are so small 
compared to the total revenue. To calculate the percentage of revenue 
represented by the assessment rate, the $0.35 per short ton assessment 
rate is divided by the average price, and that number is multiplied by 
100. For domestic manufacturers, using a 2011 average price of $760 per 
short ton,\19\ the percentage of revenue represented by the assessment 
rate would be .046 percent. For importers, using an average price of 
$824 per short ton ($6.2 billion in 2011 imports divided by 7.5 million 
short tons of imports x 100) \20\, the percentage revenue represented 
by the assessment rate would be .042 percent. Thus, for both domestic 
manufacturers and importers covered under the program, the percentage 
revenue represented by the assessment rate should be well under 1 
percent (just under 5/100ths of a percent) of the average value per ton 
produced or imported.
---------------------------------------------------------------------------

    \19\ Industry sources do not publish information on average 
price for paper and paper-based packaging. A reasonable estimate for 
average price of paper and paper-based packaging is the value per 
ton of paper and paper-based packaging exports. According to U.S. 
Census data, the average value of paper and paper-based packaging 
exports in 2011 was approximately $760 per short ton.
    \20\ U.S. Customs and Border Protection data.
---------------------------------------------------------------------------

Regulatory Flexibility Act Analysis

    In accordance with the Regulatory Flexibility Act (RFA) (5 U.S.C. 
601-612), the Agricultural Marketing Service (AMS) is required to 
examine the impact of this rule on small entities. Accordingly, AMS 
prepared this regulatory flexibility analysis.
    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 
(manufacturers and importers) as those having annual receipts of no 
more than $7.0 million.
    According to the AF&PA, in 2011, there were 84 manufacturers in the 
United States that produced one or more of the four types of paper and 
paper-based packaging to be covered under the Order. Using an average 
price of $760 per short ton, a manufacturer who produced less than 
9,210 short tons of paper and paper-based packaging per year would be 
considered a small entity. It is estimated that no more than four 
manufacturers produced less than 9,210 short tons in 2011. Thus, the 
majority of manufacturers would not be considered small businesses.
    According to Customs data, it is estimated that, in 2011, there 
were about 2,612 importers of paper and paper-based packaging. Eighty-
five importers, or about 3.2 percent, imported more than $7.0 million 
worth of paper and paper-based packaging. Thus, the majority of 
importers would be considered small entities. However, no importer who 
imported 100,000

[[Page 3703]]

short tons or more (the Order's exemption threshold) imported less than 
$7.0 million worth of paper and paper-based packaging (19 importers). 
Therefore, none of the 19 importers to be covered under the Order would 
be considered small businesses.
    Regarding value of the commodity, with domestic production at about 
68.5 million short tons in 2011, and using an average price of $760 per 
short ton, the value of domestic paper and paper-based packaging in 
2011 was about $52 billion. According to Customs data, the value of 
imported paper and paper-based packaging imports for 2011 was about 
$6.2 billion.
    This rule establishes an industry-funded research, promotion, and 
information program for paper and paper-based packaging. The program 
will be financed by an assessment on domestic manufacturers and 
importers and administered by a board of industry members appointed by 
the Secretary. The initial assessment rate is $0.35 per short ton. 
Entities that domestically manufacture or import less than 100,000 
short tons per marketing year are exempt from the payment of 
assessments. In addition domestic manufacturers and importers who 
qualify as 100 percent organic under the NOP may submit an ``Organic 
Exemption Form'' to the Board and request an exemption from 
assessments. The purpose of the program is to maintain and expand 
markets for paper and paper-based packaging. A referendum was held 
among eligible manufacturers and importers from October 28 through 
November 8, 2013, to determine whether they favor implementation of the 
program prior to it going into effect. Eighty-five percent of those 
voting in the referendum, representing 95 percent of the volume of 
paper and paper-based packaging represented in the referendum, favored 
implementation of the program. The program is authorized under the 1996 
Act.
    The Order provides for two exemptions. First, domestic 
manufacturers and importers who qualify as 100 percent organic under 
the NOP may submit an ``Organic Exemption Form'' to the Board and 
request an exemption from assessments. Second, U.S. manufacturers and 
importers who domestically produce or import less than 100,000 short 
tons during a marketing year are exempt from paying assessments. Of the 
84 domestic manufacturers in 2011, it is estimated that about 33 to 39 
percent, produced less than 100,000 short tons per year and will thus 
be exempt from paying assessments under the Order. Of the 2,612 
importers in 2011, it is estimated that about 2,593, or 99 percent, 
imported less than 100,000 short tons per year and will also be exempt 
from paying assessments. Thus, about 51 domestic manufacturers and 19 
importers will pay assessments under the Order. Using 2011 data and 
deducting exempt tonnage, it is estimated that if 72.5 million short 
tons of paper and paper-based packaging (67.2 million short tons 
domestic and 5.3 million short tons imported) were assessed at a rate 
of $0.35 per short ton, about $25.4 million will be collected in 
assessments. Of that $25.4 million, 92.5 percent ($23.5 million) will 
be paid by domestic manufacturers and 7.5 percent ($1.9 million) will 
be paid by importers.
    Regarding alternatives, the Panel considered various options to the 
program's coverage, the assessment rate and exemption threshold. The 
Panel considered the merits of assessing all U.S. production of the 
four types of paper and paper-based packaging to be covered under the 
program, whether imports should be included, and different assessment 
rates to generate a range in income from $10 million to $30 million. 
The Panel also considered the merits of a 25,000 short ton versus a 
100,000 short ton exemption. The table below details various rates of 
assessment and approximate income generated using 2011 data and the 
100,000 short ton-exemption threshold.

        Approximate Assessment Income at Various Assessment Rates
------------------------------------------------------------------------
                                             U.S. production and imports
                                              with a 100,000 short ton-
  Approximate assessment income (million)      exemption (72.5 million
                                                     short tons)
------------------------------------------------------------------------
$10.0.....................................                        $0.138
20.0......................................                         0.276
25.4......................................                         0.350
30.0......................................                         0.413
------------------------------------------------------------------------

    After much consideration, the Panel concluded and the Department 
concurs that an exemption threshold of 100,000 short tons is 
appropriate with imports covered under the program as well. The Panel 
concluded and the Department concurs that this exemption level will 
help reduce the financial and reporting burden on smaller entities but 
provide the Board sufficient income to administer the program and 
conduct research and promotion activities.
    This action imposes additional reporting and recordkeeping burdens 
on manufacturers and importers of paper and paper-based packaging. 
Manufacturers and importers interested in serving on the Board will be 
asked to submit a nomination form to the Board indicating their desire 
to serve or nominating another industry member to serve on the Board. 
Interested persons may also submit a background statement outlining 
their qualifications to serve on the Board. Except for the initial 
Board nominations, manufacturers and importers will have the 
opportunity to cast a ballot and vote for candidates to serve on the 
Board. Manufacturer and importer nominees to the Board must submit a 
background form to the Secretary to ensure they are qualified to serve 
on the Board.
    Additionally, manufacturers and importers who manufacture or import 
less than 100,000 short tons annually can submit a request to the Board 
for an exemption from paying assessments on this volume. Manufacturers 
and importers will also be asked to submit a report to the Board 
regarding their production/imports. Manufacturers and importers who 
qualify as 100 percent organic under the NOP may submit a request to 
the Board for an exemption from assessments. Importers may also request 
a refund of any assessments paid to Customs. These forms were submitted 
to the OMB for approval under OMB Control No. 0581-0281. Specific 
burdens for these forms are detailed later in this document in the 
section titled ``Paperwork Reduction Act''.
    Finally, manufacturers and importers who participated in the 
referendum to vote on whether the Order should become effective 
completed a ballot for submission to the Secretary. The ballot was 
submitted to the OMB and

[[Page 3704]]

approved under OMB Control No. 0581-0282.
    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.
    Regarding outreach efforts, the Panel represents a broad cross-
section of manufacturers and importers that will be covered under the 
program. Of the 14 Panel members, 11 are AF&PA members and 3 are non-
AF&PA members. According to the Panel, Panel and AF&PA members 
represent about 81 percent of the domestic industry that will be 
covered by the program. Panel members representing 69 percent of the 
domestic production signed forms indicating their support for the 
program. Over the past year, the Panel, and AF&PA staff and industry 
company employees, on behalf of the Panel, have made presentations on 
the Order to all three major associations representing paper-based 
packaging and many of the associations representing the printing and 
writing paper segment of the industry. In September 2011, the Panel 
mailed information regarding the program to all Panel-known companies 
that would pay assessments under the program. This included 
manufacturers and importers and both AF&PA members and non-members. The 
Panel also mailed a letter to other parties in the supply chain to 
continue to educate them about the program. The AF&PA continues to 
communicate to its members and non-members about the program.
    Finally, the numbers used in the RFA analysis herein represent the 
total universe of domestic manufacturers and importers known to USDA 
and not those who were eligible to vote in the referendum.

Civil Rights Impact Analysis

    Consideration has been given to the potential civil rights 
implications of this rule on affected parties to ensure that no person 
or group shall be discriminated against on the basis of race, color, 
national origin, gender, religion, age, disability, sexual orientation, 
marital or family status, political beliefs, parental status or 
protected genetic information. Although detailed information is not 
available on the domestic manufacturers and importers subject to the 
program or the users of paper and paper-based packaging, broad 
consideration was given to the employees of such entities and those 
individuals who wish to use information collected under this mandatory 
program. This rule does not require affected entities to relocate or 
alter their operations in ways that could adversely affect such persons 
or groups. Moreover, the program will not exclude from participation 
any persons or groups, deny any persons or groups the benefits of the 
program, or subject any persons or groups to discrimination.

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 action has been reviewed under Executive Order 12988, Civil 
Justice Reform. It is not intended to have retroactive effect. Section 
524 of the 1996 Act 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, 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.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), AMS requested approval of a new information collection and 
recordkeeping requirements for the paper and paper-based packaging 
program.
    Title: Advisory Committee or Research and Promotion Background 
Information.
    OMB Number for background form AD-755: (Approved under OMB No. 
0505-0001).
    Expiration Date of Approval: May 31, 2015.
    Title: Paper and Paper-Based Packaging Promotion, Research and 
Information Order.
    OMB Number: 0581-0281.
    Expiration Date of Approval: 3 years from approval date.
    Type of Request: New information collection for research and 
promotion programs.
    Abstract: The information collection requirements in the request 
are essential to carry out the intent of the 1996 Act. The information 
collection concerns a new national research and promotion program for 
the paper and paper-based packaging industry. The program will be 
financed by an assessment on domestic manufacturers and importers and 
administered by a board of industry members appointed by the Secretary. 
The program provides for an exemption for manufacturers and importers 
who manufacture or import less than 100,000 short tons of paper and 
paper-based packaging during the year. A referendum was held October 28 
through November 8, 2013, among eligible manufacturers and importers to 
determine whether they favor implementation of the program prior to it 
going into effect. Eighty-five percent of those voting in the 
referendum, representing 95 percent of the volume represented in the 
referendum, favored implementation of the program. The purpose of the 
program is to maintain and expand markets for paper and paper-based 
packaging.
    In summary, the information collection requirements under the 
program concern Board nominations, the collection of assessments, and 
referenda. For Board nominations, manufacturers and importers 
interested in serving on the Board must submit a ``Nomination Form'' to 
the Board indicating their desire to serve or to nominate another 
industry member to serve on the Board. Interested persons may also 
submit a background statement outlining qualifications to serve on the 
Board. Except for the initial Board nominations, manufacturers and 
importers will have the opportunity to submit a ``Nomination Ballot'' 
to the Board where they will vote for

[[Page 3705]]

candidates to serve on the Board. Nominees must also submit a 
background information form, ``AD-755,'' to the Secretary to ensure 
they are qualified to serve on the Board.
    Regarding assessments, manufacturers and importers who manufacture 
or import less than 100,000 short tons annually may submit a request, 
``Application for Exemption from Assessments,'' to the Board for an 
exemption from paying assessments. Manufacturers and importers must 
submit a ``Production/Import Report'' to the Board on a quarterly basis 
that specifies the quantity of paper and paper-based packaging 
manufactured or imported during the applicable period and the country 
of export (for imports). Manufacturers who manufacture less than 
100,000 short tons annually are exempt from paying assessments and do 
not have to submit this report. Additionally, only importers who pay 
their assessments directly to the Board must submit this report. If the 
importer assessments are collected by Customs, Customs will remit the 
funds to the Board and the other information will be available from 
Customs (i.e., country of export, quantity imported). Finally, domestic 
manufacturers and importers who qualify as 100 percent organic under 
the NOP may submit an ``Organic Exemption Form'' to the Board and 
request an exemption from assessments.
    There will also be an additional burden on manufacturers and 
importers voting in referenda. The referendum ballot, which represents 
the information collection requirement relating to referenda, was 
addressed in a final rule on referendum procedures that was published 
in the Federal Register on September 16, 2013 (78 FR 56817).
    Information collection requirements that are included in this rule 
include:

(1) Nomination Form

    Estimate of Burden: Public recordkeeping burden for this collection 
of information is estimated to average 0.25 hour per application.
    Respondents: Manufacturers and importers.
    Estimated Number of Respondents: 20.
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 5 hours.

 (2) Background Statement

    Estimate of Burden: Public recordkeeping burden for this collection 
of information is estimated to average 0.25 hour per application.
    Respondents: Manufacturers and importers.
    Estimated Number of Respondents: 20.
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 5 hours.

 (3) Nomination Ballot

    Estimate of Burden: Public recordkeeping burden for this collection 
of information is estimated to average 0.25 hour per application.
    Respondents: Domestic manufacturers and importers.
    Estimated Number of Respondents: 75 (56 manufacturers and 19 
importers who manufacture/import 100,000 short tons or more annually).
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 18.75 hours.

 (4) Background Information Form AD-755 (OMB Form No. 0505-0001)

    Estimate of Burden: Public reporting for this collection of 
information is estimated to average 0.5 hour per response for each 
Board nominee.
    Respondents: Manufacturers and importers.
    Estimated Number of Respondents: 12 (24 for initial nominations to 
the Board, 0 for the second year, and up to 8 annually thereafter).
    Estimated Number of Responses per Respondent: 1 every 3 years. 
(0.3)
    Estimated Total Annual Burden on Respondents: 12 hours for the 
initial nominations to the Board, 0 hours for the second year of 
operation, and up to 4 hours annually thereafter.

(5) Application for Exemption From Assessments

    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 0.25 hour per manufacturer or 
importer reporting on paper and paper-based packaging manufactured or 
imported. Upon approval of an application, manufacturers and importers 
will receive exemption certification.
    Respondents: Domestic manufacturers (33) and importers (2,593) who 
manufacture or import less than 100,000 short tons of paper and paper-
based packaging annually.
    Estimated number of Respondents: 2,626.
    Estimated number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 656.50 hours.

(6) Production/Import Report

    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 0.5 hour per manufacturer or 
importer.
    Respondents: Manufacturers who manufacture 100,000 short tons or 
more annually (51) and importers who remit their assessments directly 
to the Board (computation is based on the scenario where all 19 
importers pay their assessments to the Board).
    Estimated number of Respondents: 70.
    Estimated number of Responses per Respondent: 4.
    Estimated Total Annual Burden on Respondents: 140 hours.

(7) Refund of Assessments

    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 0.25 hour.
    Respondents: Manufacturers and importers.
    Estimated Number of Respondents: 10.
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 2.5 hours.

(8) Organic Exemption Form

    Estimate of Burden: Public recordkeeping burden for this collection 
of information is estimated to average 0.5 hours per exemption form.
    Respondents: Organic manufacturers and importers.
    Estimated Number of Respondents: 1.
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 0.5 hour.

(9) A Requirement To Maintain Records Sufficient To Verify Reports 
Submitted Under The Order

    Estimate of Burden: Public recordkeeping burden for keeping this 
information is estimated to average 0.5 hours per record keeper 
maintaining such records.
    Recordkeepers: Manufacturers (84) and importers (2,612).
    Estimated number of recordkeepers: 2,696.
    Estimated total recordkeeping hours: 1,348 hours.
    As noted above, under the program, manufacturers and importers must 
pay assessments and file reports with and submit assessments to the 
Board (importers through Customs). While the Order imposes certain 
recordkeeping requirements on manufacturers and importers, information 
required under the Order can be compiled from records currently 
maintained. Such records must be retained for at least two years beyond 
the fiscal year of their applicability.

[[Page 3706]]

    An estimated 2,696 respondents will provide information to the 
Board (84 domestic manufacturers and 2,612 importers). The estimated 
cost of providing the information to the Board by respondents would be 
$72,204. This total has been estimated by multiplying 2,188 total hours 
required for reporting and recordkeeping by $33, the average mean 
hourly earnings of various occupations involved in keeping this 
information. Data for computation of this hourly rate was obtained from 
the U.S. Department of Labor, Bureau of Labor Statistics.
    The Order's provisions have been carefully reviewed, and every 
effort has been made to minimize any unnecessary recordkeeping costs or 
requirements.
    The forms require the minimum information necessary to effectively 
carry out the requirements of the program, and their use is necessary 
to fulfill the intent of the 1996 Act. Such information can be supplied 
without data processing equipment or outside technical expertise. In 
addition, there are no additional training requirements for individuals 
filling out reports and remitting assessments to the Board. The forms 
are simple, easy to understand, and place as small a burden as possible 
on the person required to file the information.
    Collecting information quarterly coincides with normal industry 
business practices. The timing and frequency of collecting information 
are intended to meet the needs of the industry while minimizing the 
amount of work necessary to fill out the required reports. The 
requirement to keep records for two years is consistent with normal 
industry practices. In addition, the information to be included on 
these forms is not available from other sources because such 
information relates specifically to individual manufacturers and 
importers who are subject to the provisions of the 1996 Act. Therefore, 
there is no practical method for collecting the required information 
without the use of these forms.
    In the January 2, 2013, proposed rule, comments were also invited 
on the information collection requirements prescribed in the Paperwork 
Reduction Act section of this rule. Specifically, comments were 
solicited on: (a) Whether the collection of information is necessary 
for the proper performance of functions of the Order and USDA's 
oversight of the Order, including whether the information will have 
practical utility; (b) the accuracy of USDA's estimate of the burden of 
the collection of information, including the validity of the 
methodology and assumptions used; (c) the accuracy of USDA's estimate 
of the principal manufacturing areas in the United States for paper and 
paper-based packaging; (d) the accuracy of USDA's estimate of the 
number of manufacturers and importers of paper and paper-based 
packaging that would be covered under the program; (e) ways to enhance 
the quality, utility, and clarity of the information to be collected; 
and (f) ways to minimize the burden of the collection of information on 
those who are to respond, including the use of appropriate automated, 
electronic, mechanical, or other technological collection techniques or 
other forms of information technology. No comments were received 
regarding information collection.
    As previously mentioned, the Department conducted a referendum 
among eligible manufacturers and importers of paper and paper-based 
packaging from October 28 through November 8, 2013. Manufacturers and 
importers currently engaged in the business who manufactured/imported 
100,000 tons of paper and paper-based packaging during the 
representative period were eligible to vote. Eighty-five percent of 
those voting in the referendum representing 95 percent of the volume of 
paper and paper-based packaging represented in the referendum favored 
implementation of the program.
    After consideration of all relevant material presented, including 
the initial proposal, comments received, and the referendum results, it 
is found that the Paper and Paper-Based Packaging Promotion, Research 
and Information Order is consistent with and will effectuate the 
purposes of the 1996 Act
    Pursuant to 5 U.S.C. 553 it is found that good cause exists for not 
postponing the effective date of this rule until 30 days after 
publication in the Federal Register because implementation of the 
program is needed as soon as possible so that the first Board can be 
established and the collection of assessments can begin. Further, 
implementation of the program was approved in a referendum of domestic 
manufacturers and importers.

List of Subjects in 7 CFR Part 1222

    Administrative practice and procedure, Advertising, Consumer 
information, Marketing agreements, Paper and paper-based-packaging 
promotion, Reporting and recordkeeping requirements.
    For the reasons set forth in the preamble, Title 7, Chapter XI of 
the Code of Federal Regulations is amended as follows:

Part 1222--Paper and Paper-Based Packaging Promotion, Research and 
Information Order

0
1. The authority citation for part 1222 continues to read as follows:

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


0
2. Subpart A is added to part 1222 to read as follows:
Subpart A--Paper and Paper-Based Packaging Promotion, Research and 
Information Order
Sec.
1222.1 Act.
1222.2 Board.
1222.3 Conflict of interest.
1222.4 Converted products.
1222.5 Customs or CBP.
1222.6 Department or USDA.
1222.7 Fiscal period and marketing year.
1222.8 Importer.
1222.9 Information.
1222.10 Kraft process.
1222.11 Linerboard.
1222.12 Manufacture or produce.
1222.13 Manufacturer or producer.
1222.14 Medium.
1222.15 Order.
1222.16 Panel.
1222.17 Paper and paper-based packaging.
1222.18 Part and subpart.
1222.19 Person.
1222.20 Program, plans and projects.
1222.21 Promotion.
1222.22 Pulp.
1222.23 Research.
1222.24 Secretary.
1222.25 Short ton or ton.
1222.26 State.
1222.27 Suspend.
1222.28 Terminate.
1222.29 United States.

Paper and Paper-Based Packaging Board

1222.40 Establishment and membership.
1222.41 Nominations and appointments.
1222.42 Term of office.
1222.43 Removal and vacancies.
1222.44 Procedure.
1222.45 Reimbursement and attendance.
1222.46 Powers and duties.
1222.47 Prohibited activities.

Expenses and Assessments

1222.50 Budget and expenses.
1222.51 Financial statements.
1222.52 Assessments.
1222.53 Exemption from assessment.

Promotion, Research and Information

1222.60 Programs, plans and projects.
1222.61 Independent evaluation.
1222.62 Patents, copyrights, trademarks, inventions, product 
formulations, and publications.

Reports, Books, and Records

1222.70 Reports.
1222.71 Books and records.
1222.72 Confidential treatment.

Miscellaneous

1222.80 Right of the Secretary.

[[Page 3707]]

1222.81 Referenda.
1222.82 Suspension or termination.
1222.83 Proceedings after termination.
1222.84 Effect of termination or amendment.
1222.85 Personal liability.
1222.86 Separability.
1222.87 Amendments.
1222.88 OMB control numbers.

Subpart A--Paper and Paper-Based Packaging Promotion, Research and 
Information Order

Definitions


Sec.  1222.1  Act.

    Act means the Commodity Promotion, Research and Information Act of 
1996 (7 U.S.C. 7411-7425), and any amendments thereto.


Sec.  1222.2  Board.

    Board means the Paper and Paper-Based Packaging Board established 
pursuant to Sec.  1222.40, or such other name as recommended by the 
Board and approved by the Department.


Sec.  1222.3  Conflict of interest.

    Conflict of interest means a situation in which a member or 
employee of the Board has a direct or indirect financial interest in a 
person who performs a service for, or enters into a contract with, the 
Board for anything of economic value.


Sec.  1222.4  Converted products.

    Converted products means products made from paper and paper-based 
packaging.


Sec.  1222.5  Customs or CBP.

    Customs or CBP means the U.S. Customs and Border Protection, an 
agency of the U.S. Department of Homeland Security.


Sec.  1222.6  Department or USDA.

    Department or USDA means the U.S. Department of Agriculture, or any 
officer or employee of the Department to whom authority has heretofore 
been delegated, or to whom authority may hereafter be delegated, to act 
in the Secretary's stead.


Sec.  1222.7  Fiscal period and marketing year.

    Fiscal period and marketing year means the 12-month period ending 
on December 31 or such other period as recommended by the Board and 
approved by the Secretary.


Sec.  1222.8  Importer.

    Importer means any person who imports paper and paper-based 
packaging from outside the United States for sale in the United States 
as a principal or as an agent, broker, or consignee of any person who 
manufactures paper and paper-based packaging outside the United States 
for sale in the United States, and who is listed in the import records 
as the importer of record for such paper and paper-based packaging.


Sec.  1222.9  Information.

    Information means information and programs for consumers, customers 
and industry, including educational activities, information and 
programs designed to enhance and broaden the understanding of the use 
and attributes of paper and paper-based packaging, increase efficiency 
in manufacturing paper and paper-based packaging, maintain and expand 
existing markets, and develop new markets and marketing strategies. 
These include:
    (a) Consumer education and information, which means any action 
taken to provide information to, and broaden the understanding of, the 
general public regarding paper and paper-based packaging; and
    (b) Industry information, which means information and programs that 
would enhance the image of the paper and paper-based packaging 
industry.


Sec.  1222.10  Kraft process.

    Kraft process means a process that transforms wood into a high 
quality strong pulp for making paper and paper-based packaging.


Sec.  1222.11  Linerboard.

    Linerboard means a grade of containerboard that is used as facing 
material in the manufacture of corrugated or solid fiber shipping 
boxes.


Sec.  1222.12  Manufacture or produce.

    Manufacture or produce means the process of transforming pulp into 
paper and paper-based packaging.


Sec.  1222.13  Manufacturer or producer.

    Manufacturer or producer means any person who manufactures paper 
and paper-based packaging in the United States.


Sec.  1222.14  Medium.

    Medium means a grade of containerboard used as the inner fluting 
material in the manufacture of corrugated or solid fiber shipping 
boxes.


Sec.  1222.15  Order.

    Order means an order issued by the Secretary under section 514 of 
the Act that provides for a program of generic promotion, research, and 
information regarding agricultural commodities authorized under the 
Act.


Sec.  1222.16  Panel.

    Panel means the Paper and Paper-Based Packaging Panel formed to 
pursue development of a paper and paper-based packaging promotion, 
research and information program.


Sec.  1222.17  Paper and paper-based packaging.

    (a) Paper and paper-based packaging means:
    (1) Printing, writing and related paper, which is coated or 
uncoated paper that is subsequently converted into products used for 
printing, writing and other communication purposes, such as file 
folders, envelopes, catalogues, magazines and brochures. For purposes 
of this Order, printing, writing and related paper includes thermal 
paper but does not include carbonless paper;
    (2) Kraft packaging paper, which is coarse unbleached, semi-
bleached or fully bleached grades of paper that are subsequently 
converted into products such as grocery bags, multiwall sacks, waxed 
paper and other products;
    (3) Containerboard, which is all forms of linerboard and medium 
that is used to manufacture corrugated boxes, shipping containers and 
related products; and
    (4) Paperboard, which is solid bleached kraft board, recycled board 
and unbleached kraft board that is subsequently converted into a wide 
variety of end uses, including folding boxes, food and beverage 
packaging, tubes, cans, and drums, and other miscellaneous products. 
Paperboard does not include construction-related products such as 
gypsum wallboard facings and panel board.
    (b) For purposes of this Order, paper and paper-based packaging 
does not include tissue paper, newsprint or converted products.


Sec.  1222.18  Part and subpart.

    Part means the Paper and Paper-Based Packaging Promotion, Research 
and Information Order and all rules, regulations, and supplemental 
orders issued pursuant to the Act and the Order. The Order shall be a 
subpart of such part.


Sec.  1222.19  Person.

    Person means any individual, group of individuals, partnership, 
corporation, association, cooperative, or any other legal entity.


Sec.  1222.20  Programs, plans and projects.

    Programs, plans and projects means those research, promotion and 
information programs, plans or projects established pursuant to the 
Order.


Sec.  1222.21  Promotion.

    Promotion means any action, including paid advertising and the

[[Page 3708]]

dissemination of information, utilizing public relations or other 
means, to enhance and broaden the understanding of the use and 
attributes of paper and paper-based packaging for the purpose of 
maintaining and expanding markets for paper and paper-based packaging.


Sec.  1222.22  Pulp.

    Pulp means the material that is produced by chemically or 
mechanically separating cellulose fibers from wood or recycling 
recovered fiber.


Sec.  1222.23  Research.

    Research means any type of test, study, or analysis designed to 
enhance the image, desirability, use, marketability, manufacturing, 
recyclability, reusability or quality of paper and paper-based 
packaging, including research directed to product characteristics and 
product development, including new uses of existing products, new 
products or improved technology in the manufacturing of paper and 
paper-based packaging.


Sec.  1222.24  Secretary.

    Secretary means the Secretary of Agriculture of the United States, 
or any other officer or employee of the Department to whom authority 
has been delegated, or to whom authority may hereafter be delegated, to 
act in the Secretary's stead.


Sec.  1222.25  Short ton or ton.

    Short ton or ton means a measure of weight equal to 2,000 pounds.


Sec.  1222.26  State.

    State means any of the 50 States of the United States, the District 
of Columbia, the Commonwealth of Puerto Rico, or any territory or 
possession of the United States.


Sec.  1222.27  Suspend.

    Suspend means to issue a rule under 5 U.S.C. 553 to temporarily 
prevent the operation of an order or part thereof during a particular 
period of time specified in the rule.


Sec.  1222.28  Terminate.

    Terminate means to issue a rule under 5 U.S.C. 553 to cancel 
permanently the operation of an order or part thereof beginning on a 
date certain specified in the rule.


Sec.  1222.29  United States.

    United States means collectively the 50 States, the District of 
Columbia, the Commonwealth of Puerto Rico and the territories and 
possessions of the United States.

Paper and Paper-Based Packaging Board


Sec.  1222.40  Establishment and membership.

    (a) Establishment of the Board. There is hereby established a Paper 
and Paper-Based Packaging Board to administer the terms and provisions 
of this Order. The Board shall be composed of manufacturers and 
importers of paper and paper-based packaging that manufacture or import 
100,000 short tons or more of paper and paper-based packaging during a 
marketing year. Seats on the Board shall be apportioned as set forth in 
paragraph (b) of this section based on the geographical distribution of 
the quantity of paper and paper-based packaging manufactured in the 
United States and the quantity of paper and paper-based packaging 
imported to the United States.
    (b) The Board shall be composed of 12 members and shall be 
established as follows:
    (1) Manufacturers. Eleven members shall be manufacturers. Of the 11 
manufacturers, 10 shall be from the following four regions:
    (i) Six members shall be from the South, which consists of the 
states of Alabama, Arkansas, Delaware, Florida, Georgia, Kentucky, 
Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South 
Carolina, Tennessee, Texas, Virginia, West Virginia, and all other 
parts of the United States not listed in paragraphs (b)(1)(ii), 
(b)(1)(iii), and (b)(1)(iv) of this section;
    (ii) One member shall be from the Northeast, which consists of the 
states of Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, 
New York, Pennsylvania, Rhode Island and Vermont;
    (iii) Two members shall be from the Midwest, which consists of the 
states of Colorado, Illinois, Indiana, Iowa, Kansas, Michigan, 
Minnesota, Missouri, North Dakota, Ohio, South Dakota, Wisconsin and 
Wyoming; and
    (iv) One member shall be from the West, which consists of the 
states of Alaska, Arizona, California, Hawaii, Idaho, Montana, New 
Mexico, Nevada, Oregon, Utah, and Washington.
    (v) One manufacturer member at large may be from any region and 
shall manufacture at least 100,000 short tons but no more than 250,000 
short tons of paper and paper-based packaging annually. If there are no 
eligible nominees, this seat shall be allocated to the largest 
producing region specified in paragraphs (b)(1)(i) through (b)(1)(iv) 
of this section.
    (2) Importers. One member shall be an importer.
    (c) At least once in every five-year period, but not more 
frequently than once in every three-year period, the Board will review 
the geographical distribution of the quantity of paper and paper-based 
packaging manufactured within the United States and the quantity of 
paper and paper-based packaging imported to the United States. The 
review will be conducted using the Board's annual assessment receipts 
and, if available, other reliable reports from the industry. If 
warranted, the Board will recommend to the Secretary that the 
membership or size of the Board be adjusted to reflect changes in 
geographical distribution of the quantity of paper and paper-based 
packaging manufactured in the United States and the quantity of paper 
and paper-based packaging imported to the United States. Any changes in 
Board composition shall be implemented by the Secretary through 
rulemaking.


Sec.  1222.41  Nominations and appointments.

    (a) Nominees must manufacture or import 100,000 short tons or more 
of paper and paper-based packaging in a marketing year.
    (b) Initial nominations shall be submitted to the Secretary by the 
Panel. Before considering any nominations, the Panel shall publicize 
the nomination process, using trade press or other means it deems 
appropriate, and shall conduct outreach to all known manufacturers and 
importers manufacturing or importing 100,000 short tons or more of 
paper and paper-based packaging in a marketing year to generate 
nominees that reflect the range of operations within the paper and 
paper-based packaging industry. The Panel may use regional caucuses, 
mail or other methods to elicit potential nominees. The Panel shall 
work with USDA to ensure that all eligible candidates are aware of the 
opportunity to serve on the Board. The Panel shall submit the 
nominations to the Secretary and recommend two nominees for each Board 
position specified in Sec.  1222.40(b). The Secretary shall select the 
initial members of the Board from the nominations submitted by the 
Panel.
    (c) Subsequent nominations shall be conducted as follows:
    (1) The Board shall conduct outreach to all known manufacturers and 
importers manufacturing or importing 100,000 short tons or more of 
paper and paper-based packaging in a marketing year. Manufacturers and 
importers may submit nominations to the Board;
    (2) Manufacturer and importer nominees may provide the Board a 
short background statement outlining their qualifications to serve on 
the Board;

[[Page 3709]]

    (3) Nominees that are both a manufacturer and an importer may seek 
nomination to the Board as either a manufacturer or an importer, but 
not both;
    (4) For the domestic seats allocated by region, domestic 
manufacturers must manufacture paper and paper-based packaging in the 
region for which they seek nomination. Nominees that manufacture in 
more than one region may seek nomination in one region of their choice. 
Nominees must specify for which region they are seeking nomination. The 
names of manufacturer nominees shall be placed on a ballot by region. 
The ballots along with the background statements shall be mailed to all 
manufacturers who manufacture 100,000 short tons or more of paper and 
paper-based packaging per marketing year. Manufacturers may vote in 
each region in which they manufacture paper and paper-based packaging. 
The votes shall be tabulated for each region and the nominees receiving 
the highest number of votes shall be placed 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 nominees for at large domestic manufacturers shall 
be placed on a ballot. The ballots along with the background statements 
shall be mailed to all manufacturers who manufacture 100,000 short tons 
or more of paper and paper-based packaging per marketing year. The 
votes shall be tabulated and the nominees receiving the highest number 
of votes shall be placed at the top of the list in descending order by 
vote. The top two candidates shall be submitted to the Secretary;
    (6) The names of importer nominees shall be placed on a ballot. The 
ballots along with background statements shall be mailed to importers 
who import 100,000 short tons or more of paper and paper-based 
packaging per marketing year. The votes shall be tabulated and the 
nominees receiving the highest number of votes shall be placed at the 
top of the list in descending order by vote. The top two candidates for 
each position shall be submitted to the Secretary;
    (7) The Board must submit nominations to the Secretary at least six 
months before the new Board term begins;
    (8) Any manufacturer or importer nominated to serve on the Board 
shall file with the Secretary at the time of the nomination a 
background questionnaire;
    (9) From the nominations made pursuant to this section, the 
Secretary shall appoint the members of the Board on the basis of 
representation provided in Sec.  1222.40(b);
    (10) No two members shall be employed by a single corporation, 
company, partnership or any other legal entity; and
    (11) The Board may recommend to the Secretary modifications to its 
nomination procedures as it deems appropriate. Any such modifications 
shall be implemented through rulemaking by the Secretary.


Sec.  1222.42  Term of office.

    (a) With the exception of the initial Board, each Board member 
shall serve for a term of three years or until the Secretary selects 
his or her successor. Each term of office shall begin on January 1 and 
end on December 31. No member may serve more than two full consecutive 
three-year terms, except as provided in paragraph (b) of this section.
    (b) For the initial Board, the terms of the Board members shall be 
staggered for two, three and four years. Determination of which of the 
initial members shall serve a term of two, three or four years shall be 
recommended to the Secretary by the Panel.


Sec.  1222.43  Removal and vacancies.

    (a) The Board may recommend to the Secretary that a member be 
removed from office if the member consistently fails or refuses to 
perform his or her duties properly or engages in dishonest acts or 
willful misconduct. If the Secretary determines that any person 
appointed under this subpart consistently fails or refuses to perform 
his or her duties properly or engages in acts of dishonesty or willful 
misconduct, the Secretary shall remove the person from office. A person 
appointed under this subpart or any employee of the Board may be 
removed by the Secretary if the Secretary determines that the person's 
continued service would be detrimental to the purposes of the Act.
    (b) If a member resigns, is removed from office, or in the event of 
death of any member or if any member of the Board ceases to work for or 
be affiliated with a manufacturer or importer, or if a manufacturer 
ceases to do business in the region he or she represents, such position 
shall become vacant.
    (c) If a position becomes vacant, nominations to fill the vacancy 
will be conducted using the nominations process set forth in this Order 
or the Board may recommend to the Secretary that he or she appoint a 
successor from the most recent list of nominations for the position.
    (d) A vacancy will not be required to be filled if the unexpired 
term is less than six months.


Sec.  1222.44  Procedure.

    (a) A majority of the Board members shall constitute a quorum.
    (b) Each member of the Board shall be entitled to one vote on any 
matter put to the Board and the motion will carry if supported by a 
majority of Board members, except for recommendations to change the 
assessment rate or to adopt a budget, both of which require affirmation 
by two-thirds of the total number of Board members.
    (c) At an assembled meeting, all votes shall be cast in person.
    (d) In lieu of voting at an assembled meeting and, when in the 
opinion of the chairperson of the Board such action is considered 
necessary, the Board may take action if supported by a majority of 
members (unless two-thirds is required under the Order) by mail, 
telephone, electronic mail, facsimile, or any other means of 
communication. In that event, all members must be notified and provided 
the opportunity to vote. Any action so taken shall have the same force 
and effect as though such action had been taken at an assembled 
meeting. All votes shall be recorded in Board minutes.
    (e) There shall be no proxy voting.


Sec.  1222.45  Reimbursement and attendance.

    Board members shall serve without compensation, but shall be 
reimbursed for reasonable travel expenses, as approved by the Board, 
which they incur when performing Board business.


Sec.  1222.46  Powers and duties.

    The Board shall have the following powers and duties:
    (a) To administer this subpart in accordance with its terms and 
conditions and to collect assessments;
    (b) To develop and recommend to the Secretary for approval such 
bylaws as may be necessary for the functioning of the Board, and such 
rules and regulations as may be necessary to administer the Order, 
including activities authorized to be carried out under the Order;
    (c) To meet not less than annually, organize, and select from among 
the members of the Board a chairperson, vice chairperson, secretary/
treasurer, other officers, and committees and subcommittees, as the 
Board determines to be appropriate. The committee and subcommittees may 
include persons other than Board members, including representatives of 
Board members, as the Board deems necessary and appropriate, provided 
Board members

[[Page 3710]]

or their representative constitute a majority of all committees and 
subcommittees;
    (d) To employ or contract with persons, other than the Board 
members, as the Board considers necessary to assist the Board in 
carrying out its duties, and to determine the compensation and specify 
the duties of the persons;
    (e) To notify manufacturers and importers of all Board meetings 
through a press release or other means and to give the Secretary the 
same notice of meetings of the Board (including committee, 
subcommittee, and the like) as is given to members so that the 
Secretary's representative(s) may attend such meetings, and to keep and 
report minutes of each meeting of the Board to the Secretary;
    (f) To develop and submit programs, plans and projects to the 
Secretary for the Secretary's approval, and enter into contracts or 
agreements related to such programs, plans and projects, which must be 
approved by the Secretary before becoming effective, for the 
development and carrying out of programs, plans or projects of 
promotion, research and information. The payment of costs for such 
activities shall be from funds collected pursuant to this Order. Each 
contract or agreement shall provide that:
    (1) The contractor or agreeing party shall develop and submit to 
the Board a program, plan or project together with a budget or budgets 
that shall show the estimated cost to be incurred for such program, 
plan or project;
    (2) The contractor or agreeing party shall keep accurate records of 
all its transactions and make periodic reports to the Board of 
activities conducted, submit accounting for funds received and 
expended, and make such other reports as the Secretary or the Board may 
require;
    (3) The Secretary may audit the records of the contracting or 
agreeing party periodically; and
    (4) Any subcontractor who enters into a contract with a Board 
contractor and who receives or otherwise uses funds allocated by the 
Board shall be subject to the same provisions as the contractor.
    (g) To prepare and submit for the approval of the Secretary fiscal 
year budgets in accordance with Sec.  1222.50;
    (h) To borrow funds necessary for startup expenses of the Order 
during the first year of operation by the Board;
    (i) To invest assessments collected and other funds received 
pursuant to the Order and use earnings from invested assessments to pay 
for activities carried out pursuant to the Order;
    (j) To recommend changes to the assessment rates as provided in 
this part;
    (k) To cause its books to be audited by an independent auditor at 
the end of each fiscal year and at such other times as the Secretary 
may request, and to submit a report of the audit directly to the 
Secretary;
    (l) To periodically prepare and make public reports of program 
activities and, at least once each fiscal year, to make public an 
accounting of funds received and expended;
    (m) To maintain such minutes, books and records and prepare and 
submit such reports and records from time to time to the Secretary as 
the Secretary may prescribe; to make appropriate accounting with 
respect to the receipt and disbursement of all funds entrusted to it; 
and to keep records that accurately reflect the actions and 
transactions of the Board;
    (n) To act as an intermediary between the Secretary and any 
manufacturer or importer;
    (o) To receive, investigate, and report to the Secretary complaints 
of violations of the Order;
    (p) To recommend to the Secretary such amendments to the Order as 
the Board considers appropriate; and
    (q) To work to achieve an effective, continuous, and coordinated 
program of promotion, research, and information and to carry out 
programs, plans, and projects designed to provide maximum benefits to 
the paper and paper-based packaging industry.


Sec.  1222.47  Prohibited activities.

    The Board may not engage in, and shall prohibit the employees and 
agents of the Board from engaging in:
    (a) Any action that would be a conflict of interest;
    (b) Using funds collected by the Board under the Order to undertake 
any action for the purpose of influencing legislation or governmental 
action or policy, by local, state, national, and foreign governments or 
subdivision thereof, other than recommending to the Secretary 
amendments to the Order; and
    (c) No program, plan or project including advertising shall be 
false, misleading or disparaging to another agricultural commodity. 
Paper and paper-based packaging of all geographic origins shall be 
treated equally.

Expenses and Assessments


Sec.  1222.50  Budget and expenses.

    (a) At least 60 calendar days prior to the beginning of each fiscal 
year, and as may be necessary thereafter, the Board shall prepare and 
submit to the Department a budget for the fiscal year covering its 
anticipated expenses and disbursements in administering this part. The 
budget for research, promotion or information may not be implemented 
prior to approval by the Secretary. Each such budget shall include:
    (1) A statement of objectives and strategy for each program, plan 
or project;
    (2) A summary of anticipated revenue, with comparative data for at 
least one preceding fiscal year, except for the initial budget;
    (3) A summary of proposed expenditures for each program, plan or 
project; and
    (4) Staff and administrative expense breakdowns, with comparative 
data for at least one preceding fiscal year, except for the initial 
budget.
    (b) Each budget shall provide adequate funds to defray its proposed 
expenditures and to provide for a reserve as set forth in this Order.
    (c) Subject to this section, any amendment or addition to an 
approved budget must be approved by the Department, including shifting 
funds from one program, plan or project to another. Shifts of funds 
that do not result in an increase in the Board's approved budget and 
are consistent with governing bylaws need not have prior approval by 
the Department.
    (d) The Board is authorized to incur such expenses, including 
provision for a reserve, as the Secretary finds reasonable and likely 
to be incurred by the Board for its maintenance and functioning, and to 
enable it to exercise its powers and perform its duties in accordance 
with the provisions of this subpart. Such expenses shall be paid from 
funds received by the Board.
    (e) With approval of the Department, the Board may borrow money for 
the payment of startup expenses subject to the same fiscal, budget, and 
audit controls as other funds of the Board. Any funds borrowed shall be 
expended only for startup costs and capital outlays and are limited to 
the first year of operation by the Board.
    (f) The Board may accept voluntary contributions. Such 
contributions shall be free from any encumbrance by the donor and the 
Board shall retain complete control of their use. The Board may receive 
funds from outside sources with approval of the Secretary for specific 
authorized projects.
    (g) The Board shall reimburse the Secretary for all expenses 
incurred by the Secretary in the implementation, administration, 
enforcement and supervision of the Order, including all referendum 
costs in connection with the Order.

[[Page 3711]]

    (h) For fiscal years beginning three years after the date of the 
establishment of the Board, the Board may not expend for 
administration, maintenance, and the functioning of the Board an amount 
that is greater than 15 percent of the assessment and other income 
received by and available to the Board for the fiscal year. For 
purposes of this limitation, reimbursements to the Secretary shall not 
be considered administrative costs.
    (i) The Board may establish an operating monetary reserve and may 
carry over to subsequent fiscal years excess funds in any reserve so 
established: Provided, That, the funds in the reserve do not exceed one 
fiscal year's budget of expenses. Subject to approval by the Secretary, 
such reserve funds may be used to defray any expenses authorized under 
this subpart.
    (j) Pending disbursement of assessments and all other revenue under 
a budget approved by the Secretary, the Board may invest assessments 
and all other revenues collected under this part in:
    (1) Obligations of the United States or any agency of the United 
States;
    (2) General obligations of any State or any political subdivision 
of a State;
    (3) Interest bearing accounts or certificates of deposit of 
financial institutions that are members of the Federal Reserve System;
    (4) Obligations fully guaranteed as to principal interest by the 
United States; or
    (5) Other investments as authorized by the Secretary.


Sec.  1222.51  Financial statements.

    (a) The Board shall prepare and submit financial statements to the 
Department on a quarterly basis, or at any other time as requested by 
the Secretary. Each such financial statement shall include, but not be 
limited to, a balance sheet, income statement, and expense budget. The 
expense budget shall show expenditures during the time period covered 
by the report, year-to-date expenditures, and the unexpended budget.
    (b) Each financial statement shall be submitted to the Department 
within 30 calendar days after the end of the time period to which it 
applies.
    (c) The Board shall submit to the Department an annual financial 
statement within 90 calendar days after the end of the fiscal year to 
which it applies.


Sec.  1222.52  Assessments.

    (a) The Board's programs and expenses shall be paid by assessments 
on manufacturers and importers, other income of the Board, and other 
funds available to the Board.
    (b) Subject to the exemptions specified in Sec.  1222.53, each 
manufacturer and importer shall pay an assessment to the Board in the 
amount of 35 cents per short ton or its equivalent manufactured and 
imported. The assessment shall be on the roll of paper and paper-based 
packaging manufactured or imported, except that the assessment for cut-
size printing and writing paper imported or made by domestic 
manufacturers prior to leaving the manufacturer's mill shall be on the 
cut-size paper.
    (c) At least 24 months after the Order becomes effective and 
periodically thereafter, the Board shall review and may recommend to 
the Secretary, upon an affirmative vote of at least two-thirds of the 
Board, a change in the assessment rate. A change in the assessment rate 
is subject to rulemaking by the Secretary.
    (d) Domestic manufacturers shall remit to the Board the amount due 
no later than the 30th calendar day of the month following the end of 
the quarter in which the paper and paper-based packaging was 
manufactured.
    (e) Each importer of paper and paper-based packaging shall pay 
through Customs to the Board an assessment on the paper and paper-based 
packaging imported into the United States identified in the Harmonized 
Tariff Schedule of the United States (HTSUS) numbers listed in the 
table below.

------------------------------------------------------------------------
                                                          Assessment  $/
             Paper and paper-based packaging                    kg
------------------------------------------------------------------------
4802.54.1000............................................        $.000386
4802.54.3100............................................         .000386
4802.54.5000............................................         .000386
4802.54.6100............................................         .000386
4802.55.1000............................................         .000386
4802.55.2000............................................         .000386
4802.55.4000............................................         .000386
4802.55.6000............................................         .000386
4802.55.7020............................................         .000386
4802.55.7040............................................         .000386
4802.56.1000............................................         .000386
4802.56.2000............................................         .000386
4802.56.4000............................................         .000386
4802.56.6000............................................         .000386
4802.56.70..............................................         .000386
4802.57.1000............................................         .000386
4802.57.2000............................................         .000386
4802.57.4000............................................         .000386
4802.58.1000............................................         .000386
4802.58.20..............................................         .000386
4802.58.5000............................................         .000386
4802.58.60..............................................         .000386
4802.61.1000............................................         .000386
4802.61.2000............................................         .000386
4802.61.30..............................................         .000386
4802.61.5000............................................         .000386
4802.61.60..............................................         .000386
4802.62.1000............................................         .000386
4802.62.2000............................................         .000386
4802.62.3000............................................         .000386
4802.62.5000............................................         .000386
4802.62.60..............................................         .000386
4802.69.................................................         .000386
4804.11.0000............................................         .000386
4804.19.0000............................................         .000386
4804.21.0000............................................         .000386
4804.29.0000............................................         .000386
4804.31.40..............................................         .000386
4804.31.6000............................................         .000386
4804.39.4020............................................         .000386
4804.39.4049............................................         .000386
4804.39.60..............................................         .000386
4804.41.2000............................................         .000386
4804.41.4000............................................         .000386
4804.42.00..............................................         .000386
4804.49.0000............................................         .000386
4804.51.0000............................................         .000386
4804.52.00..............................................         .000386
4804.59.0000............................................         .000386
4805.11.0000............................................         .000386
4805.12.................................................         .000386
4805.19.................................................         .000386
4805.24.................................................         .000386
4805.25.0000............................................         .000386
4805.91.1010............................................         .000386
4805.91.9000............................................         .000386
4805.92.4010............................................         .000386
4805.92.4030............................................         .000386
4805.93.4010............................................         .000386
4805.93.4030............................................         .000386
4805.93.4050............................................         .000386
4805.93.4060............................................         .000386
4807.00.9100............................................         .000386
4807.00.9400............................................         .000386
4810.13.11..............................................         .000386
4810.13.1900............................................         .000386
4810.13.20..............................................         .000386
4810.13.5000............................................         .000386
4810.13.6000............................................         .000386
4810.13.70..............................................         .000386
4810.14.11..............................................         .000386
4810.14.1900............................................         .000386
4810.14.20..............................................         .000386
4810.14.5000............................................         .000386
4810.14.6000............................................         .000386
4810.14.70..............................................         .000386
4810.19.1100............................................         .000386
4810.19.1900............................................         .000386
4810.19.20..............................................         .000386
4810.22.1000............................................         .000386
4810.22.50..............................................         .000386
4810.22.6000............................................         .000386
4810.22.70..............................................         .000386
4810.29.10..............................................         .000386
4810.29.5000............................................         .000386
4810.29.6000............................................         .000386
4810.29.70..............................................         .000386
4810.31.1020............................................         .000386
4810.31.1040............................................         .000386
4810.31.3000............................................         .000386
4810.31.6500............................................         .000386
4810.32.10..............................................         .000386
4810.32.3000............................................         .000386
4810.32.6500............................................         .000386
4810.39.1200............................................         .000386
4810.39.1400............................................         .000386
4810.39.3000............................................         .000386
4810.39.6500............................................         .000386
4810.92.12..............................................         .000386
4810.92.65..............................................         .000386
4810.99.1050............................................         .000386
4810.99.6500............................................         .000386
4811.51.2010............................................         .000386

[[Page 3712]]

 
4811.51.2020............................................         .000386
4811.51.2030............................................         .000386
4811.59.4020............................................         .000386
4811.90.8030............................................         .000386
------------------------------------------------------------------------

    (f) If Customs does not collect an assessment from an importer, the 
importer is responsible for paying the assessment directly to the Board 
within 30 calendar days after the end of the quarter in which the paper 
and paper-based packaging was imported.
    (g) When a manufacturer or importer fails to pay the assessment 
within 60 calendar days of the date it is due, the Board may impose a 
late payment charge and interest. The late payment charge and rate of 
interest shall be prescribed in regulations issued by the Secretary. 
All late assessments shall be subject to the specified late payment 
charge and interest. Persons failing to remit total assessments due in 
a timely manner may also be subject to actions under federal debt 
collection procedures.
    (h) The Board may accept advance payment of assessments from any 
manufacturer or importer that will be credited toward any amount for 
which that person may become liable. The Board may not pay interest on 
any advance payment.
    (i) If the Board is not in place by the date the first assessments 
are to be collected, the Secretary shall receive assessments and shall 
pay such assessments and any interest earned to the Board when it is 
formed.


Sec.  1222.53  Exemption from assessment.

    (a) Minimum quantity exemption. (1) Manufacturers that manufacture 
less than 100,000 short tons of paper and paper-based packaging in a 
marketing year are exempt from paying assessments. Such manufacturers 
must apply to the Board, on a form provided by the Board, for a 
certificate of exemption prior to the start of the marketing year. This 
is an annual exemption and manufacturers must reapply each year. Such 
manufacturers shall certify that they will manufacture less than 
100,000 short tons of paper and paper-based packaging during the 
marketing year for which the exemption is claimed. Upon receipt of an 
application for exemption, the Board shall determine whether an 
exemption may be granted. The Board may request past manufacturing data 
to support the exemption request. The Board will issue, if deemed 
appropriate, a certificate of exemption to the eligible manufacturer. 
It is the responsibility of the manufacturer to retain a copy of the 
certificate of exemption.
    (2) Importers that import into the United States less than 100,000 
short tons of paper and paper-based packaging in a marketing year are 
exempt from paying assessments. This is an annual exemption and 
importers must qualify each year.
    (i) Importers that imported less than 100,000 short tons of paper 
and paper-based packaging during the prior marketing year shall 
automatically be considered exempt during the upcoming marketing year. 
Customs data will be reviewed to verify applicable importers.
    (ii) Importers that imported more than 100,000 short tons of paper 
and paper-based packaging during the prior marketing year, but believe 
and can document that they will import less than 100,000 short tons of 
paper and paper-based packaging during the upcoming marketing year, may 
apply to the Board, on a form provided by the Board, for a certificate 
of exemption prior to the start of the fiscal year. Such importers 
shall certify that they will import less than 100,000 short tons of 
paper and paper-based packaging during the marketing year for which the 
exemption is claimed. Upon receipt of an application for exemption, the 
Board shall determine whether an exemption may be granted. The Board 
may request past import data and other documentation to support the 
exemption request. The Board will issue, if deemed appropriate, a 
certificate of exemption to the eligible importer. It is the 
responsibility of the importer to retain a copy of the certificate of 
exemption.
    (iii) The Board shall refund such importers considered exempt their 
assessments as collected by Customs no later than 60 calendar days 
after receipt of such assessments by the Board. The Board will stop 
refund of assessments to such importers who during the marketing year 
import more than 100,000 short tons of paper and paper based packaging. 
These importers will be notified accordingly. No interest shall be paid 
on the assessments collected by Customs or the Board.
    (3) Manufacturers that did not apply to the Board for an exemption 
and that manufactured less than 100,000 short tons of paper and paper-
based packaging during the marketing year shall automatically receive a 
refund from the Board for the applicable assessments within 30 calendar 
days after the end of the marketing year. Board staff shall determine 
the assessments paid and refund the amount due to the manufacturer 
accordingly.
    (4)Importers that did not apply to the Board for an exemption, 
imported more than 100,000 short tons of paper and paper-based 
packaging during the prior marketing year, and that imported less than 
100,000 short tons of paper and paper-based packaging during the 
marketing year shall automatically receive a refund from the Board for 
the applicable assessments within 30 calendar days after the end of the 
marketing year.
    (5) If an entity is a manufacturer and an importer, such entity's 
combined quantity of paper and paper-based packaging manufactured and 
imported during a marketing year shall count towards the 100,000 short 
ton-exemption.
    (6) Manufacturers and importers that received an exemption 
certificate or an automatic exemption from the Board but manufactured 
or imported 100,000 short tons or more of paper and paper-based 
packaging during the marketing year shall pay the Board the applicable 
assessments owed on the quantity manufactured or imported within 30 
calendar days after the end of the marketing year and submit any 
necessary reports to the Board pursuant to Sec.  1222.70.
    (7) The Board may develop additional procedures to administer this 
exemption as appropriate. Such procedures shall be implemented through 
rulemaking by the Secretary.
    (b) Organic. (1) Organic Act means section 2103 of the Organic 
Foods Production Act of 1990 (7 U.S.C. 6501-6522).
    (2) A manufacturer who operates under an approved National Organic 
Program (NOP) (7 CFR part 205) system plan, only manufactures paper and 
paper-based packaging that is eligible to be labeled as 100 percent 
organic under the NOP and is not a split operation shall be exempt from 
payment of assessments. To obtain an organic exemption, an eligible 
manufacturer shall submit a request for exemption to the Board, on a 
form provided by the Board, at any time initially and annually 
thereafter on or before the start of the fiscal year as long as such 
manufacturer continues to be eligible for the exemption. The request 
shall include the following: The manufacturer's name and address; a 
copy of the organic operation certificate provided by a USDA-accredited 
certifying agent as defined in the Organic Act, a signed certification 
that the applicant meets all of the requirements specified for an 
assessment exemption, and such other information as may be required by 
the Board and with the approval of the Secretary. The Board shall have 
30

[[Page 3713]]

calendar days to approve the exemption request. If the exemption is not 
granted, the Board will notify the applicant and provide reasons for 
the denial within the same time frame.
    (3) An importer who imports only paper and paper-based packaging 
that is eligible to be labeled as 100 percent organic under the NOP and 
is not a split operation shall be exempt from the payment of 
assessments. To obtain an organic exemption, an eligible importer must 
submit documentation to the Board and request an exemption from 
assessment on 100 percent of organic paper and paper-based packaging, 
on a form provided by the Board, at any time initially and annually 
thereafter on or before the beginning of the fiscal year as long as the 
importer continues to be eligible for the exemption. This documentation 
shall include the same information as required by manufacturers in 
paragraph (b)(2) of this section. If the importer complies with the 
requirements of this section, the Board will grant the exemption and 
issue a Certificate of Exemption to the importer. The Board will also 
issue the importer a 9-digit alphanumeric number valid for 1 year from 
the date of issue. This alphanumeric number should be entered by the 
importer to Customs at entry summary. Any line item entry of 100 
percent organic paper and paper-based packaging bearing this 
alphanumeric number assigned by the Board will not be subject to 
assessments.
    (4) Importers who are exempt from assessment in paragraph (d)(3) of 
this section shall also be eligible for reimbursement of assessments 
collected by Customs and may apply to the Board for a reimbursement. 
The importer would be required to submit satisfactory proof to the 
Board that the importer paid the assessment on exempt organic products.
    (5) The exemption will apply immediately following the issuance of 
the exemption certificate.

Promotion, Research and Information


Sec.  1222.60  Programs, plans and projects.

    (a) The Board shall develop and submit to the Secretary for 
approval programs, plans and projects authorized by this subpart. Such 
programs, plans and projects shall provide for promotion, research, 
information and other activities including consumer and industry 
information and advertising.
    (b) No program, plan or project shall be implemented prior to its 
approval by the Secretary. Once a program, plan or project is so 
approved, the Board shall take appropriate steps to implement it.
    (c) The Board must evaluate each program, plan and project 
authorized under this subpart to ensure that it contributes to an 
effective and coordinated program of research, promotion and 
information. The Board must submit the evaluations to the Secretary. If 
the Board finds that a program, plan or project does not contribute to 
an effective program of promotion, research, or information, then the 
Board shall terminate such program, plan or project.


Sec.  1222.61  Independent evaluation.

    At least once every five years, the Board shall authorize and fund 
from funds otherwise available to the Board, an independent evaluation 
of the effectiveness of the Order and the programs conducted by the 
Board pursuant to the Act. The Board shall submit to the Secretary, and 
make available to the public, the results of each periodic independent 
evaluation conducted under this section.


Sec.  1222.62  Patents, copyrights, trademarks, inventions, product 
formulations, and publications.

    Any patents, copyrights, trademarks, inventions, product 
formulations, and publications developed through the use of funds 
received by the Board under this subpart shall be the property of the 
U.S. Government, as represented by the Board, and shall along with any 
rents, royalties, residual payments, or other income from the rental, 
sales, leasing, franchising, or other uses of such patents, copyrights, 
trademarks, inventions, product formulations, or publications, inure to 
the benefit of the Board, shall be considered income subject to the 
same fiscal, budget, and audit controls as other funds of the Board, 
and may be licensed subject to approval by the Secretary. Upon 
termination of this subpart, Sec.  1222.83 shall apply to determine 
disposition of all such property.

Reports, Books, and Records


Sec.  1222.70  Reports.

    (a) Manufacturers and importers will be required to provide 
periodically to the Board such information as the Board, with the 
approval of the Secretary, may require. Such information may include, 
but not be limited to:
    (1) For manufacturers:
    (i) The name, address and telephone number of the manufacturer; and
    (ii) The quantity of paper and paper-based packaging manufactured 
by type.
    (2) For importers:
    (i) The name, address and telephone number of the importer;
    (ii) The quantity of paper and paper-based packaging imported by 
type; and
    (iii) The country of export.
    (b) For manufacturers, such information shall be reported to the 
Board no later than the 30th calendar day of the month following the 
end of the quarter in which the paper and paper-based packaging was 
manufactured and shall accompany the collected payment of assessments 
as specified in Sec.  1222.52. First quarter data (January-March) shall 
be reported to the Board no later than the 30th calendar day of April; 
second quarter data (April-June) shall be reported no later than the 
30th calendar day of July; third quarter data (July-September) shall be 
reported no later than the 30th calendar day of October; and fourth 
quarter data (October-December) shall be reported no later than the 
30th calendar day of January of the following marketing year.
    (c) 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 paper 
and paper-based packaging was imported specified in Sec.  1222.52.


Sec.  1222.71  Books and records.

    Each manufacturer and importer shall maintain any books and records 
necessary to carry out the provisions of this subpart and regulations 
issued thereunder, including such records as are necessary to verify 
any required reports. Such books and records must be made available 
during normal business hours for inspection by the Board's or 
Secretary's employees or agents. Manufacturers and importers must 
maintain the books and records for two years beyond the fiscal year to 
which they apply.


Sec.  1222.72  Confidential treatment.

    All information obtained from books, records, or reports under the 
Act, this subpart and the regulations issued thereunder shall be kept 
confidential by all persons, including all employees and former 
employees of the Board, all officers and employees and former officers 
and employees of contracting and subcontracting agencies or agreeing 
parties having access to such information. Such information shall not 
be available to Board members or manufacturers and importers. Only 
those persons having a specific need for such information solely to 
effectively administer the provisions of this subpart shall have access 
to such information. Only such information so obtained as the Secretary 
deems relevant shall be disclosed by them, and then only in a

[[Page 3714]]

judicial proceeding or administrative hearing brought at the direction, 
or at the request, of the Secretary, or to which the Secretary or any 
officer of the United States is a party, and involving this subpart. 
Nothing in this section shall be deemed to prohibit:
    (a) The issuance of general statements based upon the reports of 
the number of persons subject to this subpart or statistical data 
collected therefrom, which statements do not identify the information 
furnished by any person; and
    (b) The publication, by direction of the Secretary, of the name of 
any person who has been adjudged to have violated this part, together 
with a statement of the particular provisions of this part violated by 
such person.

Miscellaneous


Sec.  1222.80  Right of the Secretary.

    All fiscal matters, programs, plans or projects, contracts, rules 
or regulations, reports, or other substantive actions proposed and 
prepared by the Board shall be submitted to the Secretary for approval.


Sec.  1222.81  Referenda.

    (a) Initial referendum. The Order shall not become effective unless 
the Order is approved by a majority of manufacturers and importers 
voting in the referendum who also represent a majority of the volume of 
paper and paper-based packaging represented in the referendum and who, 
during a representative period determined by the Secretary, have been 
engaged in the manufacturing or importation of paper and paper-based 
packaging. A single entity who domestically manufactures and imports 
paper and paper-based packaging may cast one vote in the referendum.
    (b) Subsequent referenda. The Secretary shall conduct subsequent 
referenda:
    (1) For the purpose of ascertaining whether manufacturers and 
importers favor the amendment, continuation, suspension, or termination 
of the Order;
    (2) Not later than seven years after this Order becomes effective 
and every seven years thereafter, to determine whether manufacturers 
and importers favor the continuation of the Order. The Order shall 
continue if it is favored by a majority of manufacturers and importers 
voting in the referendum who also represent a majority of the volume of 
paper and paper-based packaging represented in the referendum and who, 
during a representative period determined by the Secretary, have been 
engaged in the manufacturing or importation of paper and paper-based 
packaging;
    (3) At the request of the Board established in this Order;
    (4) At the request of 10 percent or more of the number of persons 
eligible to vote in a referendum as set forth under the Order; or
    (5) At any time as determined by the Secretary.


Sec.  1222.82  Suspension or termination.

    (a) The Secretary shall suspend or terminate this part or subpart 
or a provision thereof, if the Secretary finds that this part or 
subpart or a provision thereof obstructs or does not tend to effectuate 
the purposes of the Act, or if the Secretary determines that this 
subpart or a provision thereof is not favored by persons voting in a 
referendum conducted pursuant to the Act.
    (b) The Secretary shall suspend or terminate this subpart at the 
end of the fiscal year whenever the Secretary determines that its 
suspension or termination is favored by a majority of manufacturers and 
importers voting in the referendum who also represent a majority of the 
volume represented in the referendum who, during a representative 
period determined by the Secretary, have been engaged in the 
manufacturing or importation of paper and paper-based packaging.
    (c) If, as a result of a referendum the Secretary determines that 
this subpart is not approved, the Secretary shall:
    (1) Not later than one hundred and eighty (180) calendar days after 
making the determination, suspend or terminate, as the case may be, the 
collection of assessments under this subpart.
    (2) As soon as practical, suspend or terminate, as the case may be, 
activities under this subpart in an orderly manner.


Sec.  1222.83  Proceedings after termination.

    (a) Upon termination of this subpart, the Board shall recommend to 
the Secretary up to five of its members to serve as trustees for the 
purpose of liquidating the Board's affairs. Such persons, upon 
designation by the Secretary, shall become trustees of all of the funds 
and property then in the possession or under control of the Board, 
including claims for any funds unpaid or property not delivered, or any 
other existing claim at the time of such termination.
    (b) The said trustees shall:
    (1) Continue in such capacity until discharged by the Secretary;
    (2) Carry out the obligations of the Board under any contracts or 
agreements entered into pursuant to the Order;
    (3) From time to time account for all receipts and disbursements 
and deliver all property on hand, together with all books and records 
of the Board and trustees, to such person or person as the Secretary 
directs; and
    (4) Upon request of the Secretary execute such assignments or other 
instruments necessary or appropriate to vest in such persons title and 
right to all of the funds, property, and claims vested in the Board or 
the trustees pursuant to the Order.
    (c) Any person to whom funds, property, or claims have been 
transferred or delivered pursuant to the Order shall be subject to the 
same obligations imposed upon the Board and upon the trustees.
    (d) Any residual funds not required to defray the necessary 
expenses of liquidation shall be turned over to the Secretary to be 
disposed of, to the extent practical, to one or more paper and paper-
based packaging organizations in the United States whose mission is 
generic promotion, research, and information programs.


Sec.  1222.84  Effect of termination or amendment.

    Unless otherwise expressly provided by the Secretary, the 
termination of this subpart or of any regulation issued pursuant 
thereto, or the issuance of any amendment to either thereof, shall not:
    (a) Affect or waive any right, duty, obligation, or liability which 
shall have arisen or which may thereafter arise in connection with any 
provision of this subpart or any regulation issued thereunder;
    (b) Release or extinguish any violation of this subpart or any 
regulation issued thereunder; or
    (c) Affect or impair any rights or remedies of the United States, 
or of the Secretary or of any other persons, with respect to any such 
violation.


Sec.  1222.85  Personal liability.

    No member or employee of the Board shall be held personally 
responsible, either individually or jointly with others, in any way 
whatsoever, to any person for errors in judgment, mistakes, or other 
acts, either of commission or omission, as such member or employee, 
except for acts of dishonesty or willful misconduct.


Sec.  1222.86  Separability.

    If any provision of this subpart is declared invalid or the 
applicability of it to any person or circumstances is held invalid, the 
validity of the remainder of this subpart, or the applicability thereof

[[Page 3715]]

to other persons or circumstances shall not be affected thereby.


Sec.  1222.87  Amendments.

    Amendments to this subpart may be proposed from time to time by the 
Board or any interested person affected by the provisions of the Act, 
including the Secretary.


Sec.  1222.88  OMB control numbers.

    The control numbers assigned to the information collection 
requirements by the Office of Management and Budget pursuant to the 
Paperwork Reduction Act of 1995, 44 U.S.C. Chapter 35, are OMB control 
number 0505-0001 (Board nominee background statement) and OMB control 
number 0581-0281.

    Dated: January 14, 2014.
Rex A. Barnes,
Associate Administrator.
[FR Doc. 2014-01002 Filed 1-21-14; 8:45 am]
BILLING CODE 3410-02-P