Softwood Lumber Research, Promotion, Consumer Education and Industry Information Order; Late Payment and Interest Charges on Past Due Assessments, 27212-27214 [2014-10995]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 79, Number 92 (Tuesday, May 13, 2014)]
[Proposed Rules]
[Pages 27212-27214]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-10995]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

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

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Federal Register / Vol. 79, No. 92 / Tuesday, May 13, 2014 / Proposed 
Rules

[[Page 27212]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1217

[Document Number AMS-FV-12-0023]


Softwood Lumber Research, Promotion, Consumer Education and 
Industry Information Order; Late Payment and Interest Charges on Past 
Due Assessments

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposal invites comments on prescribing late payment and 
interest charges on past due assessments under the Softwood Lumber 
Research, Promotion, Consumer Education and Industry Information Order 
(Order). The Order is administered by the Softwood Lumber Board (Board) 
with oversight by the U.S. Department of Agriculture (USDA). Under the 
Order, assessments are collected from U.S. manufacturers (domestic) and 
importers and used for projects to promote softwood lumber within the 
United States. Softwood lumber is used in products like flooring, 
siding and framing. This proposal would implement authority contained 
in the Order that allows the Board to collect late payment and interest 
charges on past due assessments. This action would contribute to 
effective administration of the program.

DATES: Comments must be received by July 14, 2014.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposal. Comments may be submitted on the Internet at: 
https://www.regulations.gov or to the Promotion and Economics Division, 
Fruit and Vegetable Program, AMS, USDA, 1400 Independence Avenue SW., 
Room 1406-S, Stop 0244, Washington, DC 20250-0244; facsimile: (202) 
205-2800. All comments should reference the document number and the 
date and page number of this issue of the Federal Register and will be 
made available for public inspection, including name and address, if 
provided, in the above office during regular business hours or it can 
be viewed at https://www.regulations.gov.

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

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

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 emphasizes the importance of quantifying both costs and 
benefits, reducing costs, harmonizing rules and promoting flexibility. 
This action has been designated as a ``non-significant regulatory 
action'' under section 3(f) of Executive Order 12866. Accordingly, the 
Office of Management and Budget has waived the review process.

Executive Order 13175

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

Executive Order 12988

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

Background

    This proposed rule invites comments on prescribing late payment and 
interest charges on past due assessments under the Order. The Order is 
administered by the Board with oversight by USDA. Under the Order, 
assessments are collected from domestic manufacturers and importers and 
used for projects to promote softwood lumber within the United States. 
Softwood lumber is used in products like flooring, siding and framing. 
This proposal would implement authority contained in the Order and the 
1996 Act that allows the Board to collect late payment and interest 
charges on past due assessments. This action was unanimously 
recommended by the Board and would contribute to effective 
administration of the program.
    Section 1217.52(a) of the Order specifies that the Board's programs 
and expenses shall be paid by assessments on domestic manufacturers and 
importers and other income or funds available to the Board. Paragraph 
(l) of

[[Page 27213]]

that section specifies further that when a domestic manufacturer or 
importer fails to pay their assessments within 60 calendar days of when 
the assessment is due, the Board may impose a late payment charge and 
interest. The late payment and interest charges must be specified in 
regulations issued by the Secretary. All late assessments would be 
subject to the late payment charge and interest.
    The softwood lumber program was promulgated in 2011. Assessment 
collection began in January 2012. Assessments on softwood lumber 
domestic shipments and imports are due to the Board 30 calendar days 
after the end of each quarter. For example, assessments for softwood 
lumber shipped domestically or imported during the months of January, 
February and March are due to the Board by April 30. Entities that 
domestically ship or import less than 15 million board feet annually 
are exempt from assessment. Additionally, assessed entities do not pay 
assessments on their first 15 million board feet domestically shipped 
or imported per year.
    Assessment funds are used for promotion activities that are 
intended to benefit all industry members. Thus, it is important that 
all assessed entities pay their assessments in a timely manner. 
Entities who fail to pay their assessments on time would be able to 
reap the benefits of Board programs at the expense of others. In 
addition, they would be able to utilize funds for their own use that 
should otherwise be paid to the Board to finance Board programs.

Board Recommendation

    Thus, the Board met on May 8, 2012, and unanimously recommended 
implementing the Order authority regarding late payment and interest 
charges. Specifically, the Board recommended that a late payment charge 
be imposed on any domestic manufacturer or importer who fails to make 
timely remittance to the Board of the total assessments for which such 
domestic manufacturer or importer is liable. Such late payment would be 
imposed on any assessments not received within 60 calendar days of the 
date they are due. This would be a one-time late payment charge equal 
to 10 percent of the assessments due before interest charges have 
accrued. The Board also recommended that 1\1/2\ percent per month 
interest on the outstanding balance, including any late payment and 
accrued interest, be added to any accounts for which payment has not 
been received within 60 calendar days after the assessments are due. 
Such interest would continue to accrue monthly until the outstanding 
balance is paid to the Board.
    This action is expected to help facilitate program administration 
by providing an incentive for entities to remit their assessments in a 
timely manner, with the intent of creating a fair and equitable process 
among all assessed entities. Accordingly, a new Subpart C would be 
added to the Order for rules and regulations, and a new section 
1217.520 would be added to Subpart C.

Initial Regulatory Flexibility Act Analysis

    In accordance with the Regulatory Flexibility Act (RFA) (5 U.S.C. 
601-612), AMS is required to examine the impact of the proposed rule on 
small entities. Accordingly, AMS has considered the economic impact of 
this action on small entities.
    The purpose of the RFA is to fit regulatory actions to the scale of 
businesses subject to such actions so that small businesses will not be 
disproportionately burdened. The Small Business Administration defines, 
in 13 CFR Part 121, small agricultural producers as those having annual 
receipts of no more than $750,000 and small agricultural service firms 
(domestic manufacturers and importers) as those having annual receipts 
of no more than $7.0 million.
    According to the Board, it is estimated that there are 385 domestic 
manufacturers of softwood lumber in the United States. This number 
represents separate business entities; one business entity may include 
multiple sawmills. Using an average price of $384 per thousand board 
feet,\1\ a domestic manufacturer who ships less than about 18 million 
board feet per year would be considered a small entity. Using 2013 
data, it is estimated that 210 domestic manufacturers, or 54 percent, 
ship less than 18 million board feet annually.
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    \1\ Price data was obtained from Random Lengths Publications, 
Inc., and is a framing composite price that is designed as a broad 
measure of price movement in the lumber market 
(www.randomlengths.com).
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    Likewise, based on Customs and Board data, it is estimated there 
are 795 importers of softwood lumber. Using 2013 Customs data, about 
710 importers, or about 89 percent, import less than $7.0 million worth 
of softwood lumber annually. Thus, for purposes of the RFA, the 
majority of domestic manufacturers and importers of softwood lumber 
would be considered small entities.
    Regarding value of the commodity, with domestic production 
averaging about 40 billion board feet in 2013, and using an average 
price of $384 per thousand board feet, the average annual domestic 
value for softwood lumber is about $15.4 billion. According to Customs 
data, the average annual value for softwood lumber imports for 2013 is 
about $4.8 billion.
    This proposed rule invites comments on prescribing late payment and 
interest charges on past due assessments under the Order. The Order is 
administered by the Board with oversight by USDA. Under the Order, 
assessments are collected from domestic manufacturers and importers and 
used for projects to promote softwood lumber within the United States. 
Softwood lumber is used in products like flooring, siding and framing. 
This rule would add a new section 1217.520 that would specify a late 
payment charge of 10 percent of the assessments due and interest at a 
rate of 1\1/2\ percent per month on the outstanding balance, including 
any late payment and accrued interest. This section would be included 
in a new Subpart C--Rules and Regulations. This action was unanimously 
recommended by the Board and is authorized under section 1217.52(l) of 
the Order and section 517(e) of the 1996 Act.
    Regarding the economic impact of this proposed rule on affected 
entities, this action would impose no costs on domestic manufacturers 
and importers who pay their assessments on time. It would merely 
provide an incentive for entities to remit their assessments in a 
timely manner. For all entities who are delinquent in paying 
assessments, both large and small, the charges would be applied the 
same. As for the impact on the industry as a whole, this action would 
help facilitate program administration by providing an incentive for 
entities to remit their assessments in a timely manner, with the intent 
of creating a fair and equitable process among all assessed entities.
    Additionally, as previously mentioned, the Order provides for an 
exemption for entities that domestically ship or import less than 15 
million board feet annually. It is estimated that, of the 385 domestic 
manufacturers, 200, or 52 percent, ship less than 15 million board feet 
per year and are thus exempt from paying assessments under the Order. 
Of the 795 importers, it is estimated that 730, or 92 percent, import 
less than 15 million board feet per year and are also exempt from 
paying assessments. Thus, about 185 domestic manufacturers and 65 
importers pay assessments under the Order.
    Regarding alternatives, one option to the proposed action would be 
to

[[Page 27214]]

maintain the status quo and not prescribe late payment and interest 
charges for past due assessments. However, the Board determined that 
implementing such charges would help facilitate program administration 
by encouraging entities to pay their assessments in a timely manner. 
The Board reviewed rates of late payment and interest charges 
prescribed in other research and promotion programs and concluded that 
a 10 percent late payment charge and interest at a rate of 1\1/2\ 
percent per month on the outstanding balance would be appropriate.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the information collection and recordkeeping requirements 
that are imposed by the Order have been approved previously under OMB 
control number 0581-0264. This proposed rule would not result in a 
change to the information collection and recordkeeping requirements 
previously approved and would impose no additional reporting and 
recordkeeping burden on domestic manufacturers and importers of 
softwood lumber.
    As with all Federal promotion programs, reports and forms are 
periodically reviewed to reduce information requirements and 
duplication by industry and public sector agencies. Finally, USDA has 
not identified any relevant Federal rules that duplicate, overlap, or 
conflict with this proposed 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, this action was discussed by the Board 
at its first meeting held in November 2011 and at six committee 
meetings held via teleconference during the first six months of 2012. 
The Board met in May 2012 and unanimously made its recommendation. All 
of the Board's meetings, including meetings held via teleconference, 
are open to the public and interested persons are invited to 
participate and express their views.
    We have performed this initial RFA regarding the impact of this 
proposed action on small entities and we invite comments concerning 
potential effects of this action on small businesses.
    While this proposed rule set forth below has not received the 
approval of USDA, it has been determined that it is consistent with and 
would effectuate the purposes of the 1996 Act.
    A 60-day comment period is provided to allow interested persons to 
respond to this proposal. All written comments received in response to 
this proposed rule by the date specified will be considered prior to 
finalizing this action.

List of Subjects in 7 CFR Part 1217

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

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

PART 1217--SOFTWOOD LUMBER RESEARCH, PROMOTION, CONSUMER EDUCATION 
AND INDUSTRY INFORMATION ORDER

0
1. The authority citation for 7 CFR part 1217 continues to read as 
follows:

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

0
2. Subpart C--Rules and Regulations is added to read as follows:

Subpart C--Rules and Regulations


Sec.  1217.520  Late payment and interest charges for past due 
assessments.

    (1) A late payment charge shall be imposed on any domestic 
manufacturer or importer who fails to make timely remittance to the 
Board of the total assessments for which they are liable. The late 
payment will be imposed on any assessments not received within 60 
calendar days of the date they are due. This one-time late payment 
charge shall be 10 percent of the assessments due before interest 
charges have accrued.
    (2) In addition to the late payment charge, 1\1/2\ percent per 
month interest on the outstanding balance, including any late payment 
and accrued interest, will be added to any accounts for which payment 
has not been received by the Board within 60 calendar days after the 
day assessments are due. Interest will continue to accrue monthly until 
the outstanding balance is paid to the Board.

    Dated: May 7, 2014.
Rex A. Barnes,
Deputy Administrator.
[FR Doc. 2014-10995 Filed 5-12-14; 8:45 am]
BILLING CODE 3410-02-P