Softwood Lumber Research, Promotion, Consumer Education, and Information Order; Adjustment to Membership, 12987-12993 [2024-03372]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 89, Number 35 (Wednesday, February 21, 2024)]
[Proposed Rules]
[Pages 12987-12993]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-03372]


========================================================================
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. 89, No. 35 / Wednesday, February 21, 2024 / 
Proposed Rules

[[Page 12987]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1217

[Doc. No. AMS-SC-22-0088]


Softwood Lumber Research, Promotion, Consumer Education, and 
Information Order; Adjustment to Membership

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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

SUMMARY: This proposal invites comments on the modification of the 
membership of the Softwood Lumber Board (Board) established under the 
Softwood Lumber Research, Promotion, Consumer Education and Industry 
Information Order (Order). This action would modify the membership of 
the Board by adding the alternate position for certain seats and a 
public member. In addition, Harmonized Tariff Schedule (HTS) numbers 
for softwood lumber would be updated with the latest numbers from the 
U.S. International Trade Commission. The Board administers the Order 
with oversight by the U.S. Department of Agriculture (USDA).

DATES: Comments must be received by March 22, 2024.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposed rule. Comments may be mailed to the Docket 
Clerk, Market Development Division, Specialty Crops Program, AMS, USDA, 
1400 Independence Avenue SW, STOP 0237, Washington, DC 20250-0237; Fax: 
(202) 720-8938; or submitted electronically by Email: 
[email protected]; or via internet at https://www.regulations.gov. 
Comments should reference the document number and the date and page 
number of this issue of the Federal Register. All comments will be made 
available for public inspection in the Office of the Docket Clerk 
during regular business hours or can be viewed at https://www.regulations.gov. Comments submitted in response to this proposed 
rule will be included in the rulemaking record and will be made 
available to the public. Please be advised that the identity of the 
individuals or entities submitting the comments will be made public.

FOR FURTHER INFORMATION CONTACT: Katie Cook, Marketing Specialist, 
Market Development Division, Specialty Crops Program, Agricultural 
Marketing Service, U.S. Department of Agriculture, 1400 Independence 
Avenue SW, Room 1406-S, Stop 0244, Washington, DC 20250-0244; 
Telephone: (202) 720-8085; or Email: [email protected].

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

Executive Orders 12866, 13563 and 14094

    USDA's Agricultural Marketing Service (AMS) is issuing this 
proposed rule in conformance with Executive Orders 12866, 13563, and 
14094. 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. 
Executive Order 14094 reaffirms, supplements, and updates Executive 
Order 12866 and further directs agencies to solicit and consider input 
from a wide range of affected and interested parties through a variety 
of means. This proposed rule is not a significant regulatory action 
within the meaning of Executive Order 12866. Accordingly, this action 
has not been reviewed by the Office of Management and Budget under 
section 6 of the Executive Order.

Executive Order 13175

    This action has been reviewed in accordance with the requirements 
of Executive Order 13175, Consultation and Coordination with Indian 
Tribal Governments. AMS has assessed the impact of this proposed rule 
on Indian Tribes and determined that this proposed rule would not have 
Tribal implications that require consultation under Executive Order 
13175. AMS hosts a quarterly teleconference with Tribal leaders where 
matters of mutual interest regarding the marketing of agricultural 
products are discussed. Information about the proposed changes to the 
regulations will be shared during an upcoming quarterly call, and 
Tribal leaders will be informed about the proposed revisions to the 
regulation and the opportunity to submit comments. AMS will work with 
the USDA Office of Tribal Relations to ensure meaningful consultation 
is provided as needed with regard to these proposed changes to the 
Order.

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 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 sec. 519 of the 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 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.

[[Page 12988]]

Background

    Under the Order, which became effective on August 3, 2011, the 
Board administers a nationally coordinated program of research, 
development, advertising, and promotion designed to strengthen softwood 
lumber's competitive position and expand domestic markets for softwood 
lumber. This program is financed by assessments on domestic 
manufacturers and importers of softwood lumber. The Board administers 
the Order with oversight by the USDA.
    This proposed rule would modify the membership of the Board by 
adding two domestic manufacturer alternates, one importer alternate, a 
public member and alternate, and updating HTS numbers. The Board 
discussed the recommendations over several months and on May 17, 2023, 
unanimously recommended the proposed changes to the membership and the 
update to the HTS numbers. Board members present for the vote 
represented domestic manufacturers and importers.

Board Recommendation To Adjust Membership by Adding Certain Alternate 
Positions and a Public Member

    Section 1217.40 of the Order provides for the membership of the 
Board and authorizes these proposed changes. The Board is comprised of 
10 domestic manufacturers and four importers who manufacture and 
domestically ship or import 15 million board feet or more of softwood 
lumber in the United States during a fiscal period. Currently the Board 
struggles to find individuals from under-represented populations who 
are eligible to serve with the current membership requirements. To 
mitigate this issue, this proposed rule would add alternate positions 
(two for domestic manufacturers; one for importers) and a public member 
(and an alternate public member) to the Board.
    Unlike most other research and promotion programs, the members on 
this Board have corporate backgrounds and serve in leadership positions 
at their respective companies. Individuals who usually serve on the 
Board are from large, international corporations. Furthermore, 
according to the Board, about 90% of the manufacturing companies are 
family owned, therefore these companies typically pass leadership 
positions on to a family member. It is common industry practice to 
nominate executive-level employees to serve on the Board, so they are 
among their counterparts, which allows for robust discussions and 
thoughtful decision making, all with the goal of increasing demand for 
softwood lumber in the U.S. The Board has stated that adding alternates 
for manufacturers would provide a developmental opportunity for junior-
level stakeholders and expand the pool of members.
    Adding a public member and alternate would expand the pool of 
members and would allow the Board to tap into broader backgrounds and 
more diverse perspectives. Ideally, the public member position would be 
filled by an individual in architecture, construction, engineering, or 
development sectors, who would participate, voice their opinions and 
vote to the benefit of their industry in relation to the softwood 
lumber market. Much like the alternates for manufacturers, adding an 
alternate public member would give junior-level professionals in the 
architecture, construction, and engineering industries an opportunity 
to provide input and unique perspective on Board actions.
    This proposed rule would be the second change to the Board's 
membership since its inception. In response to industry consolidation 
in 2019, the membership was reduced from 19 to 14 and more flexibility 
was added to the Order in terms of certain seats being open to 
representatives of any size manufacturer or importer. While previous 
rulemaking sought to decrease membership, this proposed rule would add 
certain alternate positions and a public member to help create 
opportunities for a more diverse and inclusive Board. The Board does 
not believe they will have difficulty filling the new positions from 
this proposed rule because the new positions would target junior level 
stakeholders. Industry consolidation remains a concern, but the 
proposed rule would open eligibility to a new class of underrepresented 
industry members.
    In addition to providing more opportunities to recruit diverse 
candidates, adding alternates would help the Board meet quorum 
requirements, which became a greater issue after the Board reduced its 
membership in 2019. Including alternates would allow for an absent 
member seat or vacant seat to be filled as needed to vote on Board 
motions. Since alternates would not be broken out by size, they would 
serve in the stead of any size seat if it is from the same region they 
represent for the two domestic seats, and any importing region for the 
importer seat.
    With the proposed changes to Sec.  1217.40, the membership of the 
Board would increase from 14 to 15 members and four alternates. The 
proposed Board would be composed of 10 domestic manufacturer members 
and two alternates, four importer members and one alternate, and one 
public member and one alternate. Further, domestic manufacturers would 
represent three regions with five members and one alternate 
representing the South region; four members and one alternate 
representing the West region; and one member representing the Northeast 
and Lake States region. Alternates for the domestic manufacturers may 
represent companies of any size. For importer representation, the four 
members would be two large, one small, and one of any size, while the 
alternate may represent importers of any size from any region.
    As a point of clarification, current Sec.  1217.41(f) of the Order 
states no two members shall be employed by a single corporation, 
company, partnership, or any other legal entity. The intention of the 
proposed changes to the membership of the Board is to maintain this 
stipulation for alternates, ensuring the Order is not violated in the 
event a member permanently ceases to serve and needs an alternate to 
step in. Board members and industry representatives are encouraged to 
identify and nominate junior-level professionals from manufacturers and 
importers not represented on the Board at the time. Although there is 
consolidation in the industry, there are a sufficient number of 
companies who would be able to fill the 15 member seats and four 
alternate seats.
    Section 1217.44, which is currently ``Procedure'', would be revised 
to be titled ``Alternates''; it would create the alternate position and 
explain the role of alternate members on the Board. In the event a 
member is unable to attend a Board meeting due to death, removal, 
resignation, disqualification, illness, or any other reason, the 
alternate from the same group (domestic manufacturer, importer, or 
public member) and region (if applicable) may serve in the member's 
stead. For example, if a member is unable to attend a singular meeting, 
an alternate from the same category could step in and serve as a 
member, counting towards quorum and would be eligible to vote. On the 
other hand, if a member is unable to serve permanently, an alternate 
from the same category would succeed as the next member, vacating an 
alternate position.
    Currently, Sec.  1217.44 specifies the Board's procedures, Sec.  
1217.45 specifies the reimbursement and attendance policies when 
performing Board business, Sec.  1217.46 specifies the powers and 
duties of the Board, and Sec.  1217.47 specifies prohibited activities. 
Current Sec. Sec.  1217.44 to 1217.47 would be

[[Page 12989]]

redesignated and become Sec. Sec.  1217.45 to 1217.48 to accommodate 
the addition of the role of the newly created alternate member 
positions in Sec.  1217.44. Redesignated Sec. Sec.  1217.45 to 1217.47 
would also be revised to include references to alternates.

Conforming Changes

    Section 1217.5 defines conflict of interest for current Board 
members or Board employees. This section would be revised to include 
alternate members to the Board and is a conforming change.
    Section 1217.41 specifies the nomination procedures. This proposed 
rule would revise Sec.  1217.41(b) and (c) and redesignated Sec.  
1217.41(g) to include alternate members and the public member. Section 
1217.41(b) would specify that domestic manufacturers, importers, and 
public members and alternates may submit a short background statement 
outlining their qualifications to serve on the Board. Section 
1217.41(c) would state that all members and alternates may seek 
nomination for all open or vacant seats for which they are eligible. 
Section 1217.41(e) would be added to prescribe nomination procedures 
specifically for the public member and alternate positions on the 
Board.
    The nomination procedure provides that the Board conduct outreach 
and solicit nominees for domestic manufacturers, importers, and public 
members who are interested in serving on the Board. A nominee could 
seek nomination to the Board for all seats for which they qualify. The 
Board would evaluate all nominees and submit one recommended candidate 
for each open seat and at least one additional nominee for each open 
seat to the Secretary for consideration. Any additional qualified 
persons interested in serving in any of the open seats but not one of 
the two forwarded by the Board would be designated as additional 
nominees for consideration by the Secretary.
    Current Sec.  1217.41(f), which states that no two members shall be 
employed by a single legal entity, would be redesignated and revised to 
include alternates.
    Section 1217.42 specifies the term of office. Section 1217.42(a) 
would be revised to include alternates and to allow members to serve as 
an alternate when they are ineligible to serve in the member position 
after two consecutive terms. In addition, Sec.  1217.42(b) would 
stagger the alternate member position terms so that not all the 
alternates would term off the Board at the same time. Like their member 
counterparts, alternate members would be able to serve two consecutive, 
3-year terms as alternates. If an alternate is nominated and appointed 
as a member, the eligibility starts over. For example, if an alternate 
member serves two consecutive terms, they would be eligible to serve as 
a member immediately after their service as an alternate.
    Section 1217.43 specifies the removal and filling of vacancies on 
the Board. Section 1217.43(a) would be revised to address the addition 
of alternates to the Board, and state that if any member or alternate 
ceases to serve in their appointed capacity, whether they leave their 
position at their manufacturing or importing entity, or if they no 
longer qualify as a Board member or alternate in the respective group 
or region in which they were appointed, that position would become 
vacant. As discussed above, if a member seat were to be vacated, the 
alternate in the same group and region (if applicable) would fill that 
member seat, leaving that alternate position vacant. Section 1217.43(b) 
would be revised to add alternates, specifying that, similar to 
members, if an alternate refuses to perform their duties, the Secretary 
may remove the member or alternate from the Board. Section 1217.43(c) 
would be revised to use alternate members to fill member vacancies 
until the end of the member's normal term.

Board Recommendation To Update HTS Numbers

    Section 1217.52(h) specifies the HTS numbers and assessment rates 
on imported softwood lumber. This proposed rule would update HTS 
numbers to the latest codes published by the U.S. International Trade 
Commission.

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 action 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 the actions so that small businesses will not be 
disproportionately burdened. The Small Business Administration (SBA) 
defines, in 13 CFR part 121, small firms which engage in ``Support 
Activities for Forestry'' (domestic softwood lumber manufacturers and 
importers) as those having annual receipts of no more than $11.5 
million.\1\
---------------------------------------------------------------------------

    \1\ SBA does have a small business size standard for 
``Sawmills'' of 550 employees (see https://www.sba.gov/sites/sbagov/files/2023-06/Table%20of%20Size%20Standards_Effective%20March%2017%2C%202023%20%282%29.pdf). Based on AMS'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, AMS used the definition of a small firm 
which engages in ``Support Activities for Forestry'' as a more 
appropriate criterion for this analysis.
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    The RISI/Fast Markets Random Lengths Publication's yearly average 
framing lumber composite price was $759 per thousand board feet (mbf) 
in 2022. Dividing the $11.5 million threshold that defines a small firm 
which provides ``Support Activities for Forestry'' by this price 
results in a maximum threshold of 15.15 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 1 
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. 
This table is based on data from Forest Economic Advisors (FEA) and 
Customs and Border Protection (CBP).

                                        Table 1--Domestic Manufacturers and Importers by SBA Size Standards, 2022
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Domestic manufacturers                 Importers                        Totals
                                                         -----------------------------------------------------------------------------------------------
                                                             Entities     Volume  (MMBF)     Entities     Volume  (MMBF)     Entities     Volume  (MMBF)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Small...................................................             150             960             753           1,034             903           1,984
Large...................................................             174          36,616             110          14,904             284          51,520
                                                         -----------------------------------------------------------------------------------------------

[[Page 12990]]

 
    Total...............................................             324          37,566             863          15,938           1,187          53,504
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sources: Forest Economic Advisors; Customs and Border Protection.

    Table 1 shows that there was a combined total of 1,187 domestic 
manufacturers and importers of softwood lumber in the industry in 2022. 
Of these, 903 entities, or 76 percent, shipped or imported less than 
15.15 mmbf and would be considered small based on the SBA definition. 
These 903 entities domestically manufactured or imported 1.984 billion 
board feet (bbf) in 2022, less than 4 percent of total volume. The 
proposed rule would not disproportionately burden small domestic 
manufacturers and importers of softwood lumber.
    This proposal would revise Sec.  1217.44 to add the alternate 
position, revise Sec.  1217.40 to specifically add four alternates and 
a public member on the Board and make conforming changes throughout the 
Order. The Order is administered by the Board with oversight by the 
USDA. In accordance with the program requirements, assessments are 
collected from domestic manufacturers and importers, and used for 
research and promotion projects designed to strengthen the position of 
softwood lumber in the marketplace. Revising the Order to add two 
domestic manufacturer alternates, one importer alternate, and one 
public member and one public member alternate positions would provide 
more opportunities for diverse candidates to serve on the Board.
    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 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. AMS has not 
identified any relevant Federal rules that duplicate, overlap, or 
conflict with this proposed rule.
    Regarding alternatives, the Board considered not changing the 
current Board makeup and continuing to have issues with meeting quorum 
and diverse members serving on the Board. The Board decided against 
this option to avoid meeting delays and continued concerns with 
nominations. Therefore, the alternatives were rejected.
    Regarding outreach efforts, the full Board determined making this 
proposed change would give further opportunity for industry to engage 
with the Board and expand the availability of positions to those from 
under-represented communities and populations. This proposal was 
discussed by the Industry Relations and Governance Committee on June 
29, 2022, and the full Board unanimously recommended rulemaking on 
August 11, 2022. Further discussions among the full Board took place on 
May 17, 2023. AMS has performed this initial RFA analysis regarding the 
impact of this action on small entities and invites comments concerning 
potential effects of this action.
    While this proposed rule as set forth below has not yet received 
the approval of AMS, it has been determined that it is consistent with 
and would effectuate the purposes of the 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, Agricultural 
research, Confidential business information, Consumer protection, 
Forest and forest products, Inventions and patents, Marketing 
agreements, Reporting and recordkeeping requirements.

    For the reasons set forth in the preamble, the Agricultural 
Marketing Service proposes to amend 7 CFR part 1217 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.  1217.5 to read as follows:


Sec.  1217.5   Conflict of interest.

    Conflict of interest means a situation in which a member, 
alternate, 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.
0
3. In Sec.  1217.40, revise paragraphs (a) and (b) 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 the 
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)(l) and (2) 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

[[Page 12991]]

a manufacturer for the U.S. market change during a member's or 
alternate's term of office, that member or alternate may serve for the 
remainder of the term.
    (b) Composition of the Board. The Board shall be composed of 15 
members and four alternates, as follows:
    (1) Domestic manufacturers. Domestic manufacturers must reside in 
the United Stated. Ten members and two alternates shall represent 
domestic manufacturers who reside in the following three regions:
    (i) Five members and one alternate shall represent manufacturers of 
softwood lumber 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. Of these five members, two members must represent large, 
two members must represent small, and one member may represent domestic 
manufacturers of any size. The region's alternate may represent 
domestic manufacturers of any size;
    (ii) Four members and one alternate shall represent manufacturers 
of softwood lumber 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. Of these four members, two members must 
represent large, one member must represent small, and one member may 
represent domestic manufacturers of any size. The region's alternate 
may represent domestic manufacturers of any size; and
    (iii) One member shall represent manufacturers of softwood lumber 
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 paragraph (b)(1)(i), (ii), or (iii) of this 
section. This member may represent domestic manufacturers of any size.
    (2) Importers. Four members and one alternate shall represent 
importers. Of these four members, two members must represent large, one 
member must represent small, and one member may represent importers of 
any size. The alternate may represent importers of any size from any 
region. At least three of the members must import softwood lumber from 
the following regions:
    (i) Two members must import softwood lumber from the Canadian West 
Region, which consists of the provinces of British Columbia and 
Alberta; and
    (ii) One member must import softwood lumber from the Canadian East 
Region, which consists of the Canadian territories and all other 
Canadian provinces not listed in paragraph (b)(2)(i) of this section 
that import softwood lumber into the United States.
    (3) Public Member. One member and one alternate of the Board shall 
represent the public. The public member and alternate may not be 
manufacturers for the U.S. market as defined in Sec.  1217.14.
* * * * *
0
4. Amend Sec.  1217.41 by:
0
a. Revising paragraphs (b) and (c);
0
b. Redesignating paragraphs (e) through (g) as paragraphs (f) through 
(h), respectively;
0
c. Adding new paragraph (e); and
0
d. Revising redesignated paragraph (g).
    The revisions and addition read as follows:


Sec.  1217.41   Nominations and appointments.

* * * * *
    (b) Domestic manufacturers, importer, and public member nominees, 
for both member and alternate positions, may provide the Board a short 
background statement outlining their qualifications to serve on the 
Board;
    (c) Domestic manufacturer, importer, public member and all 
alternate nominees may seek nomination to the Board for all open or 
vacant seats for which the nominees are eligible;
* * * * *
    (e) Nominations for the public member shall be made by the Board. 
The Board shall submit the names of at least two nominees for the 
public member seat and at least two nominees for the public member 
alternate seat to the Secretary.
* * * * *
    (g) No two members or alternates shall be employed by a single 
corporation, company, partnership, or any other legal entity. This 
includes subsidiaries and affiliates thereof; and
* * * * *
0
5. Revise Sec.  1217.42 to read as follows:


Sec.  1217.42   Term of office.

    (a) Board members and alternates will serve a three-year term 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 or alternate 
may serve more than two consecutive terms, excluding any term of office 
less than three years. A Board member may serve as an alternate during 
the years he or she is ineligible to serve in a member position.
    (b) For the initial Board alternates, their terms shall be 
staggered for two, three, and four years. Determination of which 
alternates shall serve a term of two, three, or four years shall be 
recommended to the Secretary by the Board.
0
6. Revise Sec.  1217.43 to read as follows:


Sec.  1217.43   Removal and vacancies.

    (a) In the event that any member or alternate of the Board ceases 
to work for or be affiliated with the domestic manufacturer or 
importer, or ceases to do business in the group or region from which 
the member or alternate was appointed to the Board, such position shall 
automatically become vacant.
    (b) The Board may recommend to the Secretary that a member or 
alternate be removed from office if the member or alternate 
consistently refuses to perform his or her duties or engages in 
dishonest acts or willful misconduct. The Secretary may remove the 
member or alternate if he or she finds that the Board's recommendation 
shows adequate cause. Further, without recommendation of the Board, a 
member or alternate may be removed by the Secretary upon showing of 
adequate cause, including the failure by a member or alternate to 
submit reports or remit assessments required under this part, if the 
Secretary determines that such member's or alternate's continued 
service would be detrimental to the achievement of the purposes of the 
Act.
    (c) If a member position becomes vacant, the alternate member shall 
automatically assume the member position. The alternate shall serve 
until the end of the member's normal term. If there is no alternate 
member to assume the position of member, the successor member and 
alternate shall be nominated and selected following the process set 
forth in Sec.  1217.41. A vacancy will not be required to be filled if 
the unexpired term is less than 6 months.


Sec. Sec.  1217.44 through 1217.47   [Redesignated as Sec. Sec.  
1217.45 through 1217.48]

0
7. Redesignate paragraphs Sec. Sec.  1217.44 through 1217.47 as 
Sec. Sec.  1217.45 through 1217.48, respectively.
0
8. Add new Sec.  1217.44 to read as follows:


Sec.  1217.44   Alternates.

    An alternate member of the Board, during the absence of a member 
from the same group (domestic manufacturer, importer, or public member) 
and region

[[Page 12992]]

(as applicable) may serve in the place and stead of such member and 
perform such duties as assigned. In the event of the death, removal, 
resignation, or disqualification of any member, the alternate for that 
group and region shall automatically assume the position of said 
member. In the event that both a member of the Board and the alternate 
are unable to attend a meeting, the Board may not designate any other 
alternate from a different group or region to serve in such member's or 
alternate's place and stead for the meeting.
0
9. Revise redesignated Sec.  1217.45 to read as follows:


Sec.  1217.45   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. An alternate will be counted for the purpose of 
determining a quorum only if a member from his or her group and region 
is absent or disqualified from participating. 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 its members, alternates, 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, alternates, and the Secretary are notified.
    (2) Members and alternates acting in a member's stead are provided 
the opportunity to vote. A majority of Board members or alternates 
acting in the member's stead (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
10. Revise redesignated Sec.  1217.46 to read as follows:


Sec.  1217.46   Reimbursement and attendance.

    Board members and alternates will serve without compensation, but 
will be reimbursed for reasonable travel expenses, as approved by the 
Board, which they incur when performing Board business.
0
11. Revise redesignated Sec.  1217.47 to read as follows:


Sec.  1217.47   Powers and duties.

    The Board shall have the following powers and duties:
    (a) To administer this Order 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, regulations as may be necessary to administer the Order, 
including activities authorized to be carried out under the Order;
    (c) To meet, organize, and select from among its members a 
chairperson and, such other officers as may be necessary;
    (d) To create an executive committee of five members of the Board 
comprised of the chairperson and four other members elected by the 
Board. The duties of the executive committee shall be specified in 
bylaws that are recommended by the Board and approved by the Secretary;
    (e) To create other committees or subcommittees, which may include 
individuals other than Board members, as the Board deems necessary from 
its membership and other representatives it deems appropriate;
    (f) To employ or contract with such persons, other than the members 
or alternates, as it may deem necessary to assist the Board in carrying 
out its duties, and to determine the compensation and define the duties 
of each;
    (g) To notify manufacturers for the U.S. market of all Board 
meetings through press releases or other means and to give the 
Secretary the same notice of Board meetings, executive committee, and 
subcommittee meetings that is given to members and alternates in order 
that the Secretary's representative(s) may attend such meetings, and to 
keep and report minutes of each meeting to the Secretary;
    (h) To develop and administer programs, plans, and projects and 
enter into contracts or agreements, which must be approved by the 
Secretary before becoming effective, for promotion, research, and 
information, including consumer and industry information, research and 
advertising designed to strengthen the softwood lumber industry's 
position in the marketplace and to maintain, develop, and expand 
markets for softwood lumber. The payment of costs for such activities 
shall be with funds collected pursuant to the Order, including funds 
collected pursuant toSec.  1217.50(f). 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 that 
specifies the cost to be incurred to carry out the activity;
    (2) The contractor or agreeing party shall keep accurate records of 
all of 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 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.
    (i) To prepare and submit to the Secretary for approval 60 calendar 
days in advance of the beginning of a fiscal period, rates of 
assessment and a budget of the anticipated expenses to be incurred in 
the administration of the Order, including the probable cost of each 
promotion, research, and information activity proposed to be developed 
or carried out by the Board;
    (j) To borrow funds necessary for startup expenses of the Order;
    (k) 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;
    (l) To recommend changes to the assessment rates as provided in 
this part;
    (m) To cause its books to be audited by a certified public 
accountant at the end of each fiscal period and at such

[[Page 12993]]

other times as the Secretary may request, and to submit a report of 
each audit directly to the Secretary;
    (n) To periodically prepare and make public and to make available 
to manufacturers for the U.S. market reports of its activities and, at 
least once each fiscal period, to make public an accounting of funds 
received and expended;
    (o) To maintain minutes, books, and records and prepare and submit 
to the Secretary such reports from time to time as may be required for 
appropriate accounting with respect to the receipt and disbursement of 
funds entrusted to it, and to submit to the Secretary such information 
pertaining to this part or subpart as he or she may request;
    (p) To act as an intermediary between the Secretary and any 
manufacturer for the U.S. market;
    (q) To receive, investigate and report to the Secretary complaints 
of violations of the Order; and
    (r) To develop and recommend such rules and regulations to the 
Secretary for approval as may be necessary for the development and 
execution of plans or activities to effectuate the purposes of the Act.
0
12. Revise redesignated Sec.  1217.48 to read as follows:


Sec.  1217.48   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 or misleading or disparaging to another agricultural commodity. 
Softwood lumber of all geographic origins shall be treated equally.
0
13. In Sec.  1217.52, revise paragraph (h) to read as follows:


Sec.  1217.52   Assessments.

* * * * *
    (h) The HTSUS categories and assessment rates on imported softwood 
lumber are listed in the following table. The assessment rates are 
computed using the following conversion factors: One cubic meter (m\3\) 
equals 0.423776001 thousand board feet, and one square meter (m\2\) 
equals 0.010763104 thousand board feet. Accordingly, the assessment 
rate per cubic meter and square meter is as follows.

                        Table 1 to Paragraph (h)
------------------------------------------------------------------------
                                                 Assessment   Assessment
        Softwood lumber  (by HTSUS No.)           $/cubic      $/square
                                                   meter        meter
------------------------------------------------------------------------
4407.11.00....................................       0.1737     0.004412
4407.12.00....................................       0.1737     0.004412
4407.13.00....................................       0.1737     0.004412
4407.14.00....................................       0.1737     0.004412
4407.19.00....................................       0.1737     0.004412
4409.10.05....................................       0.1737     0.004412
4409.10.10....................................       0.1737     0.004412
4409.10.20....................................       0.1737     0.004412
4409.10.90....................................       0.1737     0.004412
4418.99.10....................................       0.1737     0.004412
------------------------------------------------------------------------

* * * * *

Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2024-03372 Filed 2-20-24; 8:45 am]
BILLING CODE P