Softwood Lumber Research, Promotion, Consumer Education and Industry Information Order; Change in Membership, Nominations, Procedures, and Continuance Referenda Period, 30040-30047 [2019-13450]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 84, Number 123 (Wednesday, June 26, 2019)]
[Proposed Rules]
[Pages 30040-30047]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-13450]


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

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1217

[Document Number AMS-SC-19-0015]


Softwood Lumber Research, Promotion, Consumer Education and 
Industry Information Order; Change in Membership, Nominations, 
Procedures, and Continuance Referenda Period

AGENCY: Agricultural Marketing Service.

ACTION: Proposed rule.

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

SUMMARY: This proposal invites comments on changing the membership, 
nominations, procedures, and continuance referenda period for the 
Softwood Lumber Board (Board) established under the Softwood Lumber 
Research, Promotion, Consumer Education and Industry Information Order 
(Order). The Board administers the Order with oversight by the U.S. 
Department of Agriculture (USDA). This proposal would also make 
administrative changes to other provisions of the Order.

DATES: Comments must be received by July 26, 2019.

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, 
Specialty Crops 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.

[[Page 30041]]


FOR FURTHER INFORMATION CONTACT: Sue Coleman, Marketing Specialist, 
Promotion and Economics Division, Specialty Crops Program, AMS, USDA, 
1400 Independence Avenue SW, Room 1406-S, Washington, DC 20250; 
telephone: (202) 378-2569; facsimile (202) 205-2800; or electronic 
mail: [email protected].

SUPPLEMENTARY INFORMATION: This proposal affecting 7 CFR part 1217 is 
authorized under the Commodity Promotion, Research, and Information Act 
of 1996 (1996 Act) (7 U.S.C. 7411-7425).

Executive Orders 12866, 13563, and 13771

    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 falls within a category of regulatory actions that the 
Office of Management and Budget (OMB) exempted from Executive Order 
12866 review. Additionally, because this rule does not meet the 
definition of a significant regulatory action it does not trigger the 
requirements contained in Executive Order 13771. See OMB's Memorandum 
titled ``Interim Guidance Implementing Section 2 of the Executive Order 
of January 30, 2017, titled `Reducing Regulation and Controlling 
Regulatory Costs' '' (February 2, 2017).

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 proposal 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 proposal invites comments on changing the Board's membership, 
nominations, procedures, and continuance referenda period under the 
Order. The Board administers the Order with oversight by USDA. Under 
the Order, assessments are collected from U.S. manufacturers and 
importers and used for projects to promote softwood lumber within the 
United States. This proposal would reduce the number of Board members 
from 19 to 14, revise the nomination procedures, and revise the quorum 
and voting procedures. This proposal would also revise the time frame 
for periodic continuance referenda from five to seven years. Finally, 
this proposal would make clarifying and conforming changes to other 
provisions of the Order. All of these changes would help facilitate 
program operations and were recommended to the Secretary by the Board 
at its November 28, 2018 meeting.

Board Membership and Geographical Distribution

    Pursuant to section 1217.40(b), the Board is composed of 18 or 19 
members, depending upon whether an additional importer member is 
appointed to the Board. Seats on the Board are apportioned based on the 
volume of softwood lumber manufactured and shipped within the United 
States by domestic manufacturers and the volume of softwood lumber 
imported into the United States. Seats are also apportioned based on 
size of operation within each geographic region as specified herein. 
Large manufacturers are those who account for the top two-thirds of the 
total annual volume of assessable softwood lumber and small 
manufacturers are those who account for the remaining one-third of the 
total annual volume of assessable softwood lumber, based on a three-
year average.
    Table 1 shows the current structure of the Board. Of the 19 total 
Board seats, 12 are held by domestic manufacturers and seven are held 
by importers, six of whom are Canadian. Of the 12 domestic 
manufacturers, six represent the U.S. South (two large and four small), 
five represent the U.S. West (four large and one small), and one 
represents the Northeast and Lake States. Of the six Canadian 
importers, four represent Canada West (three large and one small) and 
two represent Canada East (one large and one small). An additional 
importer member may be appointed to represent all other importing 
countries other than Canada.

[[Page 30042]]

[GRAPHIC] [TIFF OMITTED] TP26JN19.017

    Section 1217.40(c)(1) requires that, in each five-year period, the 
Board review, based on a three-year average, the geographical 
distribution of the volume of softwood lumber manufactured and shipped 
within the United States by domestic manufacturers and the volume of 
softwood lumber imported into the United States. Section 1217.40(c)(2) 
requires that the Board also review, based on a three-year average, the 
distribution of the size of operations within each region. Section 
1217.40(c)(3) specifies that, if warranted, the Board may recommend to 
the Secretary the reapportionment of its membership to reflect changes 
in the geographical distribution of the volume of softwood lumber 
manufactured and shipped within the United States by domestic 
manufacturers and the volume of softwood lumber imported into the 
United States. The number of Board members may also be changed. Any 
changes in Board composition shall be implemented by the Secretary 
through rulemaking.
    Pursuant to section 1217.40, the Board evaluated the geographic 
distribution of softwood lumber by region, based on a three-year 
average (2015-2017). The Board utilized data from Forest Economic 
Advisors \1\ to evaluate the regional distribution of assessable 
softwood lumber. The results of this evaluation are shown in Table 2. 
Based on a three-year average (2015-2017), the volume of assessed 
softwood lumber was largest in the U.S. South and U.S. West regions, at 
36 percent and 30 percent, respectively, of the total assessed volume 
over all regions. Canada West followed with 20 percent of the total 
assessed volume. In these three regions, assessed volume by large 
entities made up the majority of assessed regional volume. In all other 
regions, assessed volume by small entities was either equal to or 
greater than the assessed volume by large entities.
---------------------------------------------------------------------------

    \1\ Forest Economic Advisors, LLC. FEA is an owner-operated 
company comprised of experienced and informed analysts covering the 
forest products industry. FEA applies rigorous economic analysis and 
delivers actionable information though their third-party forecasts 
and monthly advisors.
[GRAPHIC] [TIFF OMITTED] TP26JN19.018

    From this evaluation, the Board recommended revising the Board 
membership from 19 current seats to 14 seats for the 2021 term of 
office, of which six members must represent large manufacturers or 
importers, four must represent small manufacturers or importers, and 
four may represent any size manufacturers or importers. Of the four 
representing any size manufacturer or importer, at least two of these 
members must represent small manufacturers or importers. The Board 
recommended adding more flexibility to the Order in terms of certain 
seats being open to representatives of any size manufacturer or 
importer. This will allow the Board to better adjust in the future to 
shifts in the size of operations within a region.

[[Page 30043]]

    The Board also took into consideration the consolidation in the 
softwood lumber industry since the inception of the Order. The Board 
has indicated that the number of companies eligible to be represented 
on the Board has declined. According to the Board, there were about 290 
entities eligible to be represented on the Board in 2013, and about 210 
entities in 2018. The Board has faced challenges securing enough 
nominees for membership on the Board. This compelled the Board to 
consider a reduction in Board membership.
    The Board recommended the seats be revised as follows: Domestic 
manufacturers would hold 10 seats, of which five members must be from 
the U.S. South Region (two large, two small, and one manufacturer of 
any size), four members must be from the U.S. West Region (two large, 
one small, and one manufacturer of any size), and one member from the 
Northeast and Lake States Region. Importers would have four seats on 
the Board (two large, one small, and one importer of any size) with a 
minimum of two from Canada West Region, a minimum of one from Canada 
East Region and the remaining member may be from Canada West, Canada 
East or offshore Regions. Table 3 illustrates this categorization of 
seats in the proposed Board structure.
[GRAPHIC] [TIFF OMITTED] TP26JN19.019

    As the Board conducted the evaluation pursuant to section 1217.40, 
it also made a recommendation to align sections 1217.40(a), (c)(1) and 
(c)(3) with section 515(b)(3) of the 1996 Act. (7 U.S.C. 7414(b)(3)). 
Section 1217.40(a) would clarify that the Board shall be apportioned 
based on the volume of softwood lumber production that is manufactured 
and shipped within the United States by domestic manufacturers. 
Sections 1217.40(c)(1) and (3), respectively, would specify that the 
Board shall review, based on a three-year average, the geographical 
distribution of the volume of softwood lumber produced and shipped 
within the United States by domestic manufacturers, and that the Board 
shall make recommendations to revise its structure based on this 
review.
    Additionally, the Board recommended that U.S. Board members reside 
in the region they represent. This would ensure that entities from 
outside the U.S. that own softwood lumber entities within the U.S. 
could represent a U.S. region on the Board only if the individual 
seeking nomination resides in the respective region. The Board would 
review the USDA Advisory Committee on Research and Promotion Background 
Information Form AD-755 to determine in which Region each nominee 
resides.
    According to the Board, this proposed action should make the 
reduced number of seats easier to fill and reflect the current 
distribution of the industry.
    The Board has recommended a transitional approach to reduce the 
Board from 19 members to 14 members over a three-year period. The 2019 
Board currently has 19 members. The 2020 Board would have 16 members 
consisting of five domestic manufacturer members representing the U.S. 
South Region (two large and three small), five representing the U.S. 
West Region (four large and one small) and one representing the 
Northeast and Lake States. Of the five Canadian importers (three large 
and two small), there would be three from the Canada West Region and 
two from the Canada East Region. The non-Canadian importer seat would 
not be filled in 2020 (when the current member reaches tenure).
    The 2021 Board would have 14 members consisting of five domestic 
manufacturer members representing the U.S. South Region (two large, two 
small and one manufacturer of any size), four members representing the 
U.S. West Region (two large, one small and one manufacturer of any 
size) and one representing the Northeast and Lake States. Of the four 
Canadian importers (two large, one small and one importer of any size), 
there would be two from the Canada West Region and one from the Canada 
East Region. The remaining member may be from Canada West, Canada East 
or offshore Regions.

Nomination Procedures

    Section 1217.41 establishes the procedures for the conduct of 
nominations to obtain Board nominees for appointment by the Secretary. 
The Board has recommended to remove the procedures in section 
1217.41(a) regarding the initial nominations to select the nominees for 
the initial Board in 2011. Section 1217.41(b) establishes an election 
process for nominations. In order to secure more nominees for Board 
seats, the Board has recommended removing the election process from its 
nomination procedures.
    The nomination procedure provides that the Board conduct outreach 
and solicit nominees who are interested in serving on the Board. A 
nominee could seek nomination to the Board for all seats for which he 
or she is qualified. The Board would evaluate all nominees and submit 
one recommended candidate for each open seat and one additional nominee 
for each open seat to the Secretary for consideration. Other qualified 
persons interested in serving in the open seats but not recommended by 
the Board would be designated as other nominees for consideration by 
the Secretary. From the nominations made, the Secretary would appoint 
members of the Board.
    Finally, the Board recommended a clarification to section 
1217.41(b)(7) that specifies no two members shall be employed by a 
single corporation, company, partnership, or any other legal entity, 
should also include subsidiaries and affiliates thereof. Section 
1217.41 would be revised accordingly.

[[Page 30044]]

Quorum and Voting Procedures

    Section 1217.44 specifies the quorum and voting procedures for the 
Board based on the current 19 Board members. The Board's recommendation 
is to revise these provisions from specific number requirements needed 
for a quorum and for votes to a general term ``majority'' that could 
apply to any size Board. Thus, the Board recommended these conforming 
changes to complement the reduction in Board membership. Section 
1217.44 would be revised accordingly.

Continuance Referenda Period

    Section 1217.81(b) specifies that the Secretary conduct a 
referendum of the industry for the purpose of ascertaining whether 
manufacturers for the U.S. market favor the continuation of the Order. 
The first continuance referendum was held in 2018, and 78 percent of 
the voters representing 94 percent of the volume voted supported 
continuance of the Order. The Board recommended that the period between 
referenda be extended from five to seven years for the purpose of 
efficiency. The Board would incur costs associated with referenda once 
every seven years rather than every five years. The Order would still 
permit referenda to be held at the request of the Board; at the request 
of 10 percent or more of the number of persons eligible to vote in a 
referendum; and at any time as determined by the Secretary, pursuant to 
section 1217.81(b)(3), (4) and (5), respectively. Section 1217.81(b) 
would be revised accordingly.
    This proposal would also make minor changes to sections 1217.52(h) 
and 1217.101(l), by updating the Harmonized Tariff Schedule (HTS) 
number codes. The HTS number codes are periodically updated by the 
United States Internal Trade Commission. Finally, this proposal would 
change the OMB control number assigned to the previously approved 
information collection referenced in sections 1217.88 and 1217.108 from 
0581-0264 to 0581-0093, the correct control number assigned by OMB.

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 such 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 (SBA) 
defines, in 13 CFR part 121, small agricultural service firms (domestic 
manufacturers and importers) as those having annual receipts of no more 
than $7.5 million.\2\ The Random Lengths yearly average framing lumber 
composite price was $460 per thousand board feet in 2018.\3\ Dividing 
the $7.5 million threshold that defines an agricultural service firm as 
small by this price results in a maximum threshold of 16.3 million 
board feet (mmbf) of softwood lumber per year that a domestic 
manufacturer or importer may ship to be considered a small entity for 
purposes of the RFA. Table 4 shows the number of entities and the 
amount of volume they represent that may be categorized as small or 
large based on the SBA definition.
---------------------------------------------------------------------------

    \2\ SBA does have a small business size standard for 
``Sawmills'' of 500 employees (see https://www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf). Based on USDA's 
understanding of the lumber industry, using this criterion would be 
impractical as sawmills often use contractors rather than employees 
to operate and, therefore, many mills would fall under this 
criterion while being, in reality, a large business. Therefore, USDA 
used agricultural service firm as a more appropriate criterion for 
this analysis.
    \3\ Random Lengths Publications, Inc.; www.randomlengths.com.
    [GRAPHIC] [TIFF OMITTED] TP26JN19.020
    
    As shown in Table 4, there were a total of 1,383 domestic 
manufacturers and importers of softwood lumber based on 2018 data. Of 
these, 931 entities, or 67 percent, shipped or imported less than 16.3 
mmbf and would be small entities under the SBA definition. These 931 
entities domestically manufactured or imported 2.07 billion board feet 
(bbf) in 2018, less than 3 percent of total volume. The reduction in 
Board seats and other administrative changes will not 
disproportionately burden small domestic manufacturers and importers of 
softwood lumber.
    This proposal invites comments on three major changes to the 
Board's membership, nominations, procedure, and continuance referenda 
period provisions under the Order. Section 1217.40 would be revised to 
reduce the number of Board members from 19 to 14 and would reflect the 
diversity of the industry in terms of geographical distribution and 
size of operation. An additional change to this section would require 
that U.S. Board members reside in the region they represent. Section 
1217.41 would be revised by eliminating the election process in the 
nomination procedures. In section 1217.44 the quorum and voting 
procedures for the Board would be revised to complement the reduction 
in board membership. Section 1217.81 would be revised to instruct that 
subsequent continuance referenda to be conducted every seven years 
rather than five. These changes were recommended by the Board and are 
authorized under sections 1217.40(c)(3), 1217.41(b)(8), 1217.46(b), and 
1217.87 of the Order and section 515(b)(3) of the 1996 Act.
    Regarding the economic impact of this proposed rule on affected 
entities, these changes are administrative in nature and would have no 
economic impact on entities covered under the program. These changes 
would help in securing nominees to fill seats on the Board, address the 
concerns of the softwood lumber industry not securing enough nominees 
to be submitted to the Secretary for selection, make conforming changes 
necessary to complement the reduction in board membership, and improve 
efficiency with regard to continuance referenda.
    The Board's Industry Relations and Governance Committee (Committee) 
reviewed various alternatives to the Board's current 19-member make-up.

[[Page 30045]]

The Committee considered a 12 and 13-member Board. The committee also 
considered maintaining the status quo at 19 members. Regarding the 
referenda period, one option the Board considered would be to maintain 
the status quo. However, the Board recommended changing the period from 
five to seven years to improve the operating efficiency of the Board.

Reporting and Recordkeeping Requirements

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the Order's information collection and recordkeeping 
requirements have been approved previously under OMB control number 
0581-0093. This proposed rule would not result in a change to the 
information collection and recordkeeping requirements previously 
approved and would impose no additional reporting requirements or 
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. USDA has not 
identified any relevant Federal rules that duplicate, overlap, or 
conflict with this proposed rule.
    Regarding outreach efforts, the actions were discussed by the 
Board's Industry Relations and Governance Committee at meetings on May 
30, 2018, August 15, 2018, and October 26, 2018. The full Board 
discussed outreach efforts at meetings on May 31, 2018, August 15, 
2018. The Board then made its recommendation to the Secretary on 
November 28, 2018. 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.
    AMS has performed this initial RFA analysis regarding the impact of 
this proposed action on small entities and invites comments concerning 
potential effects of this action.
    USDA has determined that this proposed rule is consistent with and 
would effectuate the purposes of the 1996 Act.
    A 30-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. Revise Sec.  1217.40 to read as follows:


Sec.  1217.40  Establishment and membership.

    (a) Establishment of the Board. There is hereby established a 
Softwood Lumber Board to administer the terms and provisions of this 
Order and promote the use of softwood lumber. The Board shall be 
composed of manufacturers for the U.S. market who manufacture and 
domestically ship or import 15 million board feet or more of softwood 
lumber in the United States during a fiscal period. Seats on the Board 
shall be apportioned based on the volume of softwood lumber production 
that is manufactured and shipped within the United States by domestic 
manufacturers and the volume of softwood lumber imported into the 
United States. Seats on the Board shall also be apportioned based on 
size of operation within each geographic region, as specified in 
paragraphs (b)(1)(i), (b)(1)(ii), (b)(2), and (b)(3) of this section. 
For purposes of this section, ``large'' means manufacturers for the 
U.S. market who account for the top two-thirds of the total annual 
volume of assessable softwood lumber and ``small'' means those who 
account for the remaining one-third of the total annual volume of 
assessable softwood lumber. If there are no eligible nominees for a 
large or small seat within a region, that seat may be filled by a 
nominee representing an eligible manufacturer for the U.S. market of 
any size. Should the size of a manufacturer for the U.S. market change 
during a member's term of office, that member may serve for the 
remainder of the term.
    (b) The 2020 Board shall be composed of 16 members. The 2021 Board 
and each subsequent Board shall be composed of 14 members. The Board 
shall be established as follows:
    (1) Domestic manufacturers. For the 2020 Board, 11 members shall 
represent domestic manufacturers and for the 2021 Board and each 
subsequent Board, ten members shall represent domestic manufacturers 
who reside in the following three regions:
    (i) Five members shall reside in the U.S. South Region, which 
consists of the states of Alabama, Arkansas, Florida, Georgia, 
Louisiana, Mississippi, North Carolina, Oklahoma, South Carolina, 
Tennessee, Texas, Virginia, and West Virginia. For the 2020 Board, of 
these five members, two must represent large and three must represent 
small domestic manufacturers. For the 2021 Board and each subsequent 
Board of these five members, two must represent large, two must 
represent small, and one may represent domestic manufacturers of any 
size;
    (ii) Five members shall reside in the U.S. West Region for the 2020 
Board, and for the 2021 Board and each subsequent Board, four members 
shall reside in the U.S. West Region, which consists of the states of 
Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, 
New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington, and 
Wyoming. For the 2020 Board, of these five members, four must represent 
large and one must represent small domestic manufacturers. For the 2021 
Board and each subsequent Board, of the four members, two must 
represent large, one must represent small, and one may represent 
domestic manufacturers of any size; and
    (iii) One member shall reside in the Northeast and Lake States 
Region, which consists of the states of Connecticut, Delaware, 
Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, 
Massachusetts, Michigan, Minnesota, Missouri, Nebraska, New Hampshire, 
New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Vermont, 
Wisconsin and all other parts of the United States not listed in 
paragraphs (b)(1)(i), (b)(1)(ii), or (b)(1)(iii) of this section. This 
member may represent domestic manufacturers of any size.
    (iv) For the 2021 Board, four members may represent a manufacturer 
for the U.S. market of any size.
    (2) Importers for the 2020 Board. Five members shall be importers 
from the following two regions:
    (i) Three members must import softwood lumber from the Canadian 
West Region, which consists of the provinces of British Columbia and 
Alberta. Of these three members, two must represent large and one must 
represent small importers; and
    (ii) Two members must import softwood lumber from the Canadian East 
Region, which consists of the

[[Page 30046]]

Canadian territories and all other Canadian provinces not listed in 
paragraph (b)(2)(i) of this section that import softwood lumber into 
the United States. Of these two members, one must represent large and 
one must represent small importers.
    (3) Importers for the 2021 Board and each subsequent Board. Four 
members shall represent importers. Of these four members, two must 
represent large, one must represent small, and one may represent 
importers of any size. At least three of these members must import 
softwood lumber from the following regions:
    (i) Two members must import softwood lumber from the Canadian West 
Region, as defined in paragraph (b)(2)(i) of this section; and
    (ii) One member must import softwood lumber from the Canadian East 
Region, as defined in paragraph (b)(2)(ii) of this section.
    (c) Periodic review. In each five-year period, but not more 
frequently than once in each three-year period, the Board shall:
    (1) Review, based on a three-year average, the geographical 
distribution of the volume of softwood lumber production that is 
manufactured and shipped within the United States by domestic 
manufacturers and the volume of softwood lumber imported into the 
United States; and
    (2) Review, based on a three-year average, the distribution of the 
size of operations within each region; and
    (3) If warranted, recommend to the Secretary the reapportionment of 
the Board membership to reflect changes in the geographical 
distribution of the volume of softwood lumber production that is 
manufactured and shipped within the United States by domestic 
manufacturers and the volume of softwood lumber imported into the 
United States. The distribution of volumes between regions and the 
distribution of the size of operations within regions shall also be 
considered. The number of Board members may also be changed. Any 
changes in Board composition shall be implemented by the Secretary 
through rulemaking.
0
3. Revise Sec.  1217.41 to read as follows:


Sec.  1217.41   Nominations and appointments.

    Nominations shall be conducted as follows:
    (a) The Board shall conduct outreach to all segments of the 
softwood lumber industry. Softwood lumber domestic manufacturers and 
importers may submit nominations to the Board. Nominees must 
domestically manufacture and/or import 15 million board feet or more of 
softwood lumber per fiscal year;
    (b) Domestic manufacturers and importer nominees may provide the 
Board a short background statement outlining their qualifications to 
serve on the Board;
    (c) Nominees may seek nomination to the Board for all open or 
vacant seats for which the nominees are eligible;
    (d) The Board will evaluate all eligible nominees and submit the 
name of one nominee for each open seat and the name of one additional 
nominee for each open seat to the Secretary. Other qualified persons 
interested in serving in the open seats but not recommended by the 
Board will be designated by the Board as additional nominees for 
consideration by the Secretary;
    (e) The Board must submit nominations to the Secretary at least six 
months before the new Board term begins. From the nominations submitted 
by the Board, the Secretary shall select the members of the Board;
    (f) No two members shall be employed by a single corporation, 
company, partnership, or any other legal entity. This includes 
subsidiaries and affiliates thereof; and
    (g) 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.
0
4. Revise Sec.  1217.44 to read as follows:


Sec.  1217.44   Procedure.

    (a) A majority of Board members (exclusive of vacant seats) will 
constitute a quorum so long as at least two of the members present are 
importer members and five of the members present are domestic 
manufacturers. If participation by telephone or other means is 
permitted, members participating by such means shall count as present 
in determining quorum or other voting requirements set forth in this 
section.
    (b) All votes at meetings of the Board, executive committee, and 
other committees will be cast in person or by electronic voting or 
other means as the Board and Secretary deem appropriate to allow 
members participating by telephone or other electronic means to cast 
votes. Voting by proxy will not be allowed.
    (c) Each member of the Board will 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 (exclusive of vacant seats), except for 
recommendations to change the assessment rate or to adopt a budget, 
both of which require affirmation by at least a majority of Board 
members plus two (exclusive of vacant seats).
    (d) The Board must give members and the Secretary timely notice of 
all Board, executive committee, and other committee meetings.
    (e) In lieu of voting at a properly convened meeting, and when, in 
the opinion of the Board's chairperson, such action is considered 
necessary, the Board may take action by mail, telephone, electronic 
mail, facsimile, or any other means of communication. Any action taken 
under this procedure is valid only if:
    (1) All members and the Secretary are notified, and the members are 
provided the opportunity to vote;
    (2) A majority of Board members (exclusive of vacant seats) vote in 
favor of the action (unless a vote of a majority of Board members plus 
two (exclusive of vacant seats) is required under the Order); and
    (3) All votes are promptly confirmed in writing and recorded in the 
Board minutes.
0
5. Revise Sec.  1217.52(h) to read as follows:


Sec.  1217.52  Assessments.

* * * * *
    (h) The HTSUS categories and assessment rates on imported softwood 
lumber are listed in the table below. A factor shall be used to 
determine the equivalent volume of softwood lumber in thousand board 
feet. The factor used to convert one cubic meter to one thousand board 
feet is 0.423776001. Accordingly, the assessment rate per cubic meter 
is as follows.

                        Table 1 to Paragraph (h)
------------------------------------------------------------------------
                                                           Assessment $/
             Softwood lumber  (by HTUS No.)                 cubic meter
------------------------------------------------------------------------
4407.11.00..............................................          0.1483
4407.12.00..............................................          0.1483
4407.19.05..............................................          0.1483
4407.19.06..............................................          0.1483
4407.19.10..............................................          0.1483
4409.10.05..............................................          0.1483
4409.10.10..............................................          0.1483
4409.10.20..............................................          0.1483
4409.10.90..............................................          0.1483
4418.99.10..............................................          0.1483
------------------------------------------------------------------------

* * * * *
0
6. In Sec.  1217.81 revise paragraphs (b)(1) and (2) to read as 
follows:


Sec.  1217.81  Referenda.

* * * * *
    (b) * * *
    (1) For the purpose of ascertaining whether manufacturers for the 
U.S. market favor the continuation, suspension, or termination of the 
Order;

[[Page 30047]]

    (2) No later than seven years after this Order becomes effective 
and every seven years thereafter, to determine whether softwood lumber 
manufacturers for the U.S. market favor the continuation of the Order. 
The Order shall continue if it is favored by a majority of domestic 
manufacturers and importers voting in the referendum who also represent 
a majority of the volume of softwood lumber represented in the 
referendum who, during a representative period determined by the 
Secretary, have been engaged in the domestic manufacturing or 
importation of softwood lumber;
* * * * *
0
7. Revise Sec.  1217.88 to read as follows:


Sec.  1217.88  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 0581-0093.
0
8. Revise Sec.  1217.101(l) to read as follows:


Sec.  1217.101  Definitions.

* * * * *
    (l) Softwood lumber means and includes softwood lumber and products 
manufactured from softwood as described in section 804(a) within Title 
VIII (Softwood Lumber Act of 2008 or SLA of 2008) of the Tariff Act of 
1930 (19 U.S.C. 1202-1677g), as amended by section 3301 of the Food, 
Conservation and Energy Act of 2008 (Pub. L. 110-246, enacted June 18, 
2008) and categorized in the following Harmonized Tariff Schedule of 
the United States (HTSUS) numbers--4407.11.00, 4407.12.00, 4407.19.05, 
4407.19.06, 4407.19.10, 4409.10.05, 4409.10.10, 4409.10.20, 4409.10.90, 
and 4418.99.10. Domestic product that cannot be categorized in the 
referenced HTSUS numbers if it were an import is not covered under this 
order. Further, softwood lumber originating in the United States that 
is exported to another country and shipped back to the United States is 
also covered under this Order, provided it can be categorized in the 
referenced HTSUS numbers. Additionally, articles brought into the 
United States temporarily and for which an exemption is claimed under 
subchapter XIII of chapter 98 of the HTSUS are exempted from the SLA of 
2008 and are not covered under this Order.
* * * * *
0
9. Revise Sec.  1217.108 to read as follows:


Sec.  1217.108  OMB control number.

    The control number assigned to the information collection 
requirement in this subpart by the Office of Management and Budget 
pursuant to the Paperwork Reduction Act of 1995, 4 U.S.C. is OMB 
control number 0581-0093.

    Dated: June 20, 2019.
Bruce Summers,
Administrator.
[FR Doc. 2019-13450 Filed 6-25-19; 8:45 am]
BILLING CODE 3410-02-P