Softwood Lumber Research, Promotion, Consumer Education and Industry Information Order; Late Payment and Interest Charges on Past Due Assessments, 64297-64299 [2014-25657]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 79, Number 209 (Wednesday, October 29, 2014)]
[Rules and Regulations]
[Pages 64297-64299]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-25657]



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Rules and Regulations
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Federal Register / Vol. 79, No. 209 / Wednesday, October 29, 2014 / 
Rules and Regulations

[[Page 64297]]



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: Final rule.

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SUMMARY: This rule prescribes 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 rule 
implements authority contained in the Order that allows the Board to 
collect late payment and interest charges on past due assessments. This 
action will contribute to effective administration of the program.

DATES: Effective date: This rule is effective on January 1, 2015.

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

SUPPLEMENTARY INFORMATION: This rule is issued under the Order. (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 will not 
have substantial and direct effects on Tribal governments and will not 
have significant Tribal implications.

Executive Order 12988

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

Background

    This rule prescribes 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 implements 
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 will 
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 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 are 
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

[[Page 64298]]

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 will be 
imposed on any assessments not received within 60 calendar days of the 
date they are due. This will 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 will 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 will be added 
to the Order for rules and regulations, and a new section 1217.520 will 
be added to Subpart C.

Final Regulatory Flexibility Act Analysis

    In accordance with the Regulatory Flexibility Act (RFA) (5 U.S.C. 
601-612), AMS is required to examine the impact of this rule on small 
entities. Accordingly, AMS has considered the economic impact of this 
action on small entities.
    The purpose of the RFA is to fit regulatory actions to the scale of 
businesses subject to such actions so that small businesses will not be 
disproportionately burdened. The Small Business Administration defines, 
in 13 CFR Part 121, small agricultural producers as those having annual 
receipts of no more than $750,000 and small agricultural service firms 
(domestic manufacturers and importers) as those having annual receipts 
of no more than $7.0 million.
    According to the Board, it is estimated that there are currently 
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 currently 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 rule prescribes 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 adds a new 
section 1217.520 that specifies 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 will 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 rule on affected entities, 
this action imposes no costs on domestic manufacturers and importers 
who pay their assessments on time. It merely provides 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 will be applied the same. As for the impact on the 
industry as a whole, this action will 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 current 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 current 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 current domestic 
manufacturers and 65 current importers pay assessments under the Order.
    Regarding alternatives, one option to the action is to maintain the 
status quo and not prescribe late payment and interest charges for past 
due assessments. However, the Board determined that implementing such 
charges will 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 is 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 0581-0093. This rule

[[Page 64299]]

results in no changes to the information collection and recordkeeping 
requirements previously approved and imposes no additional reporting 
and recordkeeping burden on domestic manufacturers and importers of 
softwood lumber.
    As with all Federal promotion programs, reports and forms are 
periodically reviewed to reduce information requirements and 
duplication by industry and public sector agencies. Finally, USDA has 
not identified any relevant Federal rules that duplicate, overlap, or 
conflict with this rule.
    AMS is committed to complying with the E-Government Act, to promote 
the use of the Internet and other information technologies to provide 
increased opportunities for citizen access to Government information 
and services, and for other purposes.
    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.
    A proposed rule concerning this action was published in the Federal 
Register on May 13, 2014 (92 FR 27212). The Board distributed copies of 
the rule via email to domestic manufacturers and importers. Finally, 
the proposal was made available through the Internet by USDA and the 
Office of the Federal Register. A 60-day comment period ending July 14, 
2014, was provided to allow interested persons to comment. No comments 
were received.
    After consideration of all relevant matters presented, including 
the information and recommendation submitted by the Board and other 
available information, it is hereby found that this rule, as 
hereinafter set forth, is consistent with and will effectuate the 
purposes of the 1996 Act.

List of Subjects in 7 CFR Part 1217

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

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

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

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

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

0
2. Subpart C, consisting of Sec.  1217.520, is added to read as 
follows:

Subpart C--Rules and Regulations


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

    (a) 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.
    (b) 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: October 23, 2014.
Rex A. Barnes,
Associate Administrator.
[FR Doc. 2014-25657 Filed 10-28-14; 8:45 am]
BILLING CODE 3410-02-P