Vol. 78 Monday, 

No. 179 September 16, 2013 

Part II 

Department of Agriculture 

Agricultural Marketing Service 

7 CFR Part 1222 

Paper and Paper-Based Packaging Promotion, Research and Information 

Order; Proposed Rule 

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57006 Federal Register / Vol. 78, No. 179 / Monday, September 16, 2013 / Proposed Rules 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Part 1222 

[Document Number AMS–FV–11–0069; 

PR–A2] 

RIN 0581–AD21 

Paper and Paper-Based Packaging 

Promotion, Research and Information 

Order 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Proposed rule and referendum 

order. 

SUMMARY: This document proposes a 

Paper and Paper-Based Packaging 

Promotion, Research and Information 

Order (Order). The purpose of the 

program would be to maintain and 

expand markets for paper and paperbased packaging. The program would be 

financed by an assessment on paper and 

paper-based packaging manufacturers 

(domestic producers) and importers and 

would be administered by a board of 

industry members appointed by the 

Secretary of Agriculture (Secretary). The 

assessment rate would initially be $0.35 

per short ton. This document also 

announces that the U.S. Department of 

Agriculture (USDA) is conducting a 

referendum among eligible 

manufacturers and importers to 

determine whether they favor 

implementation of the program. The 

program would be implemented if it is 

favored by a majority of current U.S. 

manufacturers and importers voting in 

the referendum who also represent a 

majority of the volume of paper and 

paper-based packaging represented in 

the referendum who, during a 

representative period determined by the 

Secretary, were engaged in the 

manufacturing or importation of paper 

and paper-based packaging into the 

United States. A separate final rule on 

referendum procedures is being 

published in this issue of the Federal 

Register. 

DATES: The voting period is October 28 

through November 8, 2013. To be 

eligible to vote, current paper and 

paper-based packaging domestic 

manufacturers and importers must have 

domestically manufactured and/or 

imported 100,000 short tons or more of 

paper and paper-based packaging during 

the representative period from January 1 

through December 31, 2012. Anyone 

who believes that they are eligible to 

vote in the referendum and does not 

receive a ballot in the mail, may request 

one from the Referendum Agents by 

calling the toll free number provided in 

the ADDRESSES section below. Ballots 

will be mailed to all known domestic 

manufacturers and importers of paper 

and paper-based packaging on or before 

October 21, 2013. Ballots must be 

received by the referendum agents no 

later than the close of business 4:30 p.m. 

(Eastern Standard Time) on November 

8, 2013. 

ADDRESSES: Copies of the proposed 

Order may be obtained from the 

Referendum Agents, Promotion and 

Economics Division, Fruit and 

Vegetable Program, AMS, USDA, 1400 

Independence Avenue SW., Room 

1406–S, Stop 0244, Washington, DC 

20250–0244; telephone: (202) 720–9915 

or (888) 720–9917 (toll free); or 

facsimile: (202) 205–2800; or can be 

viewed at http://www.regulations.gov. 

FOR FURTHER INFORMATION CONTACT: 

Kimberly Coy, Marketing Specialist, 

Promotion and Economics Division, 

Fruit and Vegetable Program, AMS, 

USDA, 1400 Independence Avenue 

SW., Room 1406–S, Stop 0244, 

Washington, DC 20250–0244; telephone: 

(202) 720–9915 or (888) 720–9917 (toll 

free); or facsimile: (202) 205–2800; or 

electronic mail: 

Kimberly.Coy@ams.usda.gov. 

SUPPLEMENTARY INFORMATION: This 

proposed rule is issued pursuant to the 

Commodity Promotion, Research and 

Information Act of 1996 (1996 Act) (7 

U.S.C. 7411–7425). 

As part of this rulemaking process, a 

proposed rule was published in the 

Federal Register on January 2, 2013 (78 

FR 188). That rule provided for a 60-day 

comment period which ended on March 

4, 2013. Seventy-five comments were 

received. The comments are addressed 

later in this document. 

Background 

This document proposes an industryfunded research, promotion and 

information program for paper and 

paper-based packaging. The program 

would cover four types of paper and 

paper-based packaging—printing, 

writing and related paper (used to make 

products for printing, writing and other 

communication purposes), kraft 

packaging paper (used for products like 

grocery bags and sacks), containerboard 

(used to make corrugated boxes, 

shipping containers and related 

products), and paperboard (used for 

food and beverage packaging, tubes and 

other miscellaneous products). The 

program would be financed by an 

assessment on U.S. manufacturers and 

importers of paper and paper-based 

packaging and would be administered 

by a board of industry members 

appointed by the Secretary. The 

assessment rate would initially be $0.35 

per short ton. (One short ton equals 

2,000 pounds). Entities that 

domestically manufacture or import less 

than 100,000 short tons per marketing 

year would be exempt from the payment 

of assessments. The purpose of the 

program would be to maintain and 

expand markets for paper and paperbased packaging. 

The proposal was submitted to USDA 

by the Paper and Paper-Based Packaging 

Panel (Panel). The Panel is a group of 

14 industry members that was formed in 

May 2010 to oversee development of the 

program. The American Forest & Paper 

Association (AF&PA), a national trade 

association, provided technical 

assistance to the Panel. 

Authority in 1996 Act 

The proposed Order is authorized 

under the 1996 Act which authorizes 

USDA to establish agricultural 

commodity research and promotion 

orders which may include a 

combination of promotion, research, 

industry information and consumer 

information activities funded by 

mandatory assessments. Commodity 

promotion programs provide a unique 

opportunity for an industry to inform 

consumers about their particular 

commodity and have the ability to 

provide significant conservation 

benefits to producers and the public. 

These programs are designed to 

strengthen the position of agricultural 

commodity industries in the 

marketplace, maintain and expand 

markets and uses for agricultural 

commodities, develop new uses for 

agricultural commodities or assist 

producers in meeting their conservation 

objectives. As defined under section 

513(1)(D) of the 1996 Act, agricultural 

commodities include the products of 

forestry, which includes paper and 

paper-based packaging. 

The 1996 Act provides for a number 

of optional provisions that allow the 

tailoring of orders for different 

commodities. Section 516 of the 1996 

Act provides permissive terms for 

orders, and other sections provide for 

alternatives. For example, section 514 of 

the 1996 Act provides for orders 

applicable to (1) producers, (2) first 

handlers and others in the marketing 

chain as appropriate, and (3) importers 

(if imports are subject to assessments). 

Section 516 states that an order may 

include an exemption of de minimis 

quantities of an agricultural commodity; 

different payment and reporting 

schedules; coverage of research, 

promotion, and information activities to 

expand, improve, or make more efficient 

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1 Johnson, Tony G., Ronald J., Walters, Brian F., 

Sorenson, Colin, Woodall, Christopher W., Morgan, 

Todd A., National Pulpwood Production, 2008, 

USDA, p. 15 (www.treesearch.fs.fed.us/pubs/

37960). 

2Cut-size office papers are used in office 

machines and are sold in sheet form typically 8.5′′ 

x 11′′, 8.5′′ x 14′′ or 11′′ x 11′′. Folio sheets are cutsize papers sold in sheet form in sizes of 17′′ x 22′′ 

or larger. These would be included in the printing, 

writing and related paper category. 

3Manufacturing data was compiled by the 

AF&PA from its 51st Annual Survey of Paper, 

Paperboard and Pulp, 2011. 

the marketing or use of an agricultural 

commodity in both domestic and 

foreign markets; provision for reserve 

funds; provision for credits for generic 

and branded activities; and assessment 

of imports. 

In addition, section 518 of the 1996 

Act provides for referenda to ascertain 

approval of an order to be conducted 

either prior to its going into effect or 

within three years after assessments first 

begin under the order. An order also 

may provide for its approval in a 

referendum based upon different voting 

patterns. Section 515 provides for 

establishment of a board or council from 

among producers, first handlers and 

others in the marketing chain as 

appropriate, and importers, if imports 

are subject to assessment. 

Industry Background 

Paper and paper-based packaging is 

produced from pulp. Pulp is made by 

chemically or mechanically separating 

fibers from wood or by recycling 

recovered paper and paper-based 

packaging products. The separated, 

moist fibers are then pressed together 

and dried into flexible sheets. 

U.S. Pulpwood Production 1

Wood used to make pulp is known as 

pulpwood. Total pulpwood production 

includes roundwood chipped at mills 

and other primary industry mill 

residues. Roundwood includes both 

softwood and hardwood. Roundwood 

pulpwood continues to be the primary 

fiber source used in pulp manufacturing 

in the United States. Wood residues 

consist primarily of mill residue chips, 

a byproduct of sawmilling and veneer 

mill operations. 

According to U.S. Forest Service 

statistics, in 2008, U.S. pulpwood 

production totaled 89.2 million cords. 

Of that total, softwood roundwood and 

residues accounted for 69 percent (61.4 

million cords). Hardwood roundwood 

and residues accounted for 31 percent 

(27.7 million cords). By region, the 

South accounted for 76.4 percent of 

total U.S. pulpwood production (68.1 

million cords). The West accounted for 

9.9 percent (8.8 million cords), the 

Midwest accounted for 7.1 percent (6.3 

million cords), and the Northeast 

accounted for 6.6 percent (5.9 million 

cords) of total U.S. pulpwood 

production. 

Manufacturers and Converting 

Operations 

The U.S. paper industry encompasses 

two broad segments—primary 

producers/manufacturers (mills) and 

converters. Primary manufacturers make 

rolls of paper and paper-based 

packaging (commonly referred to as roll 

stock) from pulp produced in the same 

mill or pulp supplied by another mill. 

Primary manufacturers would be 

covered under the program. 

Converters turn roll stock into final 

products such as boxes, corrugated 

boxes, shipping containers, envelopes, 

magazines, catalogs, copy paper and 

bags/sacks. Converting operations can 

take place in a primary producer mill or 

off-site. When converting is done in a 

primary producer mill, the roll 

produced before it is converted into a 

final product or sold to an off-site 

converter would be covered under the 

program. Converting operations (and 

thus converted products) would not be 

covered under the program. An 

exception is the case of cut-size printing 

and writing papers (including folio 

sheets) made by primary producers that 

are cut prior to leaving the mill.2 These 

are classified as primary products (not 

converted products) under the 

Harmonized Tariff Schedule of the 

United States (HTSUS) and would, 

therefore, be assessed under the 

program. 

Types of Paper and Paper-Based 

Packaging 

There are six major types of paper and 

paper-based packaging produced by 

manufacturers: (1) Printing, writing and 

related paper; (2) kraft packaging paper; 

(3) containerboard; (4) paperboard; (5) 

tissue paper; and (6) newsprint. The 

proposed Order would cover the first 

four of the six types mentioned above. 

Printing, writing and related paper is 

coated or uncoated paper, including 

thermal but excluding carbonless paper, 

which is subsequently converted into 

products used for printing, writing and 

other communication purposes, such as 

file folders, envelopes, catalogues, 

magazines and brochures. Demand for 

carbonless paper has declined 

significantly due to other technologies. 

Thus, the Panel concluded and the 

Department concurs that the carbonless 

segment of the industry would not be 

able to absorb the cost of a promotion 

program at this time. 

Kraft packaging paper is coarse, 

unbleached, semi-bleached or fully 

bleached grades of paper that are 

subsequently converted into products 

such as grocery bags, multiwall sacks, 

waxed paper and other products. 

‘‘Kraft’’ refers to a process for 

transforming wood into a high quality, 

strong pulp for making paper and paperbased packaging. Bleaching is the 

chemical processing of pulp to remove 

the natural brown color and thus make 

the pulp and pulp products whiter. 

Containerboard includes all forms of 

linerboard, which is used as the facing 

material in the production of corrugated 

or solid fiber shipping boxes, and 

medium, which is used as the inner 

fluting material in the manufacture of 

such boxes. Containerboard is used to 

manufacture corrugated boxes, shipping 

containers, point-of-sale displays, 

pallets and other products. 

Paperboard is solid bleached kraft 

board, recycled board and unbleached 

kraft board, which is converted into 

products such as folding boxes, tubes, 

cans and drums. Paperboard is also used 

to package food, beverages and other 

nondurable consumer products such as 

pharmaceuticals, clothing, footwear and 

cosmetics. Nondurable goods are used 

immediately or have a lifespan of 3 

years or less. 

The two types of paper and paperbased packaging that would not be 

covered under the program are tissue 

paper and newsprint. With the 

exception of restroom hand-dryers 

versus paper towels, tissue paper 

products are not facing competition 

from alternative products. The opposite 

is true for newsprint. Demand for 

newsprint has drastically declined due 

to the shift toward digital 

communications. However, the Panel 

concluded and the Department concurs 

that the newsprint segment of the 

industry would not be able to incur the 

cost of a promotion program at this 

time. 

U.S. Manufacturing by Region 3

In 2011, about 68.5 million short tons 

of U.S. paper and paper-based 

packaging to be covered under the 

program were produced. Of the 68.5 

million short tons, it is estimated that 

63.2 percent was manufactured in the 

South, 17.1 percent was manufactured 

in the Midwest, 10.5 percent was 

manufactured in the Northeast, and 9.2 

percent was manufactured in the West. 

In terms of type, it is estimated that 50.1 

percent was containerboard, 29.1 

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4AF&PA’s Statistics of Pulp, Paper and 

Paperboard, p. 7. 

5Employment data was compiled by the AF&PA 

from the U.S. Bureau of Labor Statistics, http://

www.bls.gov/data. 

6AF&PA’s Statistics, p. 7. 

7AF&PA’s Statistics, p. 7 and 12. 

8Printing activity index is from http://

www.federalreserve.gov/releases/g17/ipdisk/ip_

nsa.txt. The Federal Reserve Board reports 

production of nondurable goods, as well as other 

items, as indexes rather than in terms of tons, 

pounds or units. The base year is 2007, which 

means that if the index reaches 105 in 2008, 

production has increased 5 percent relative to the 

2007 level. If the index falls to 95, it means that 

production has declined 5 percent relative to the 

2007 level. 

percent was printing, writing and 

related paper, 18.3 percent was 

paperboard, and 2.5 percent was kraft 

packaging paper. 

Export Markets 

According to U.S. Census data, in 

2011, exports of the four types of paper 

and paper-based packaging to be 

covered under the proposed Order 

totaled about 11.5 million short tons, or 

17 percent of domestic production. In 

terms of major export markets in 2011, 

it is estimated that 18.0 percent went to 

Western Europe, 16.0 percent each went 

to Canada and Mexico, 11.0 percent 

went to the Far East and Oceania, 9.0 

percent went to South America and 8.0 

percent went to China. Of the 11.5 

million short tons, it is estimated that 

46.0 percent was containerboard, 26.0 

percent was paperboard, 22.0 percent 

was printing, writing and related paper, 

and 6.0 percent was kraft packaging 

paper. 

Imports 

According to U.S. Customs and 

Border Protection (Customs) data, in 

2011, imports to be covered under the 

program totaled 7.5 million short tons. 

Of that total, about 58.6 percent was 

from Canada, 22.2 percent from Western 

Europe, 9.8 percent was from China, 

Japan and the Far East, 2.7 percent was 

from South America and the remainder 

was from other countries. In terms of 

type, about 72.0 percent of the imports 

were printing, writing and related 

paper, 13.1 percent was paperboard, 

10.1 percent was containerboard and 4.8 

percent was kraft packaging paper. 

Need for a Program 

According to AF&PA data, markets for 

paper and paper-based packaging that 

would be covered under the program 

declined by 15 percent between 2000 

and 2010. U.S. shipments of cut-size 

office papers (one sector of the printing 

and writing category) grew with 

employment in white collar-intensive 

industries between 2000 and 2006. 

However, between 2006 and 2010, 

shipments fell 20 percent 4 while 

employment in white collar-intensive 

industries declined by 5 percent. 

Moreover, in 2010, while employment 

in white collar-intensive industries 

stabilized,5 office paper shipments 

declined another 5 percent.6 This is 

illustrated in the following chart. 

Markets for other printing and writing 

papers (exclusive of cut-size office 

papers) declined 27 percent between 

2006 and 2010.7 Digital forms of 

communication such as Internet 

advertising and the widespread 

availability of news, books and other 

digital information have contributed to 

this displacement. This is illustrated in 

the following chart.8


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9AF&PA monthly Kraft Paper Statistical Reports. 

10Retail food and beverage store sales data is from 

the U.S. Census Bureau (http://www.census.gov/

retail) and was adjusted for inflation by the AF&PA 

using U.S. Bureau of Labor Statistics’ consumer 

price index for food and beverages (http://

www.bls.gov/data/#prices). 

11AF&PA’s Statistics, p. 9. 

12http://www.federalreserve.gov/releases/g17/

ipdisk/ip_nsa.txt. 

According to AF&PA data, kraft paper 

markets declined 23 percent between 

2000 and 2010,9 even as food store sales 

rose by 1 percent.10 This is illustrated in 

the following chart. 

Paperboard markets also have 

declined over the past decade.11

Paperboard is mainly facing competition 

from plastics, but also from foils and, to 

a lesser extent, glass. Between 2000 and 

2010, U.S. paperboard markets 

contracted 10 percent as compared with 

a fairly stable demand (i.e., a 1 percent 

increase) for nondurable consumer 

goods. Additionally, paperboard 

markets stagnated when nondurable 

consumer goods demand grew in the 

mid-2000s.12 This is illustrated in the 

chart below. 


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13AF&PA’s Statistics, p. 9 and 20. 14http://www.federalreserve.gov/releases/g17/

ipdisk/ip_nsa.txt. 

AF&PA data show that containerboard 

markets have remained fairly steady as 

compared to the other four types of 

paper and paper-based packaging to be 

covered under the program. U.S. 

containerboard markets declined 2 

percent between 2000 and 2010,13 while 

demand for nondurable consumer 

goods, which accounts for most of the 

demand for corrugated boxes, rose 1 

percent. As shown below, from 2000 

through 2007, containerboard markets 

largely kept pace with nondurable 

consumer goods, with containerboard 

demand growing 4 percent and 

nondurable goods up 5 percent.14 This 

is illustrated in the following chart. 

In light of these market conditions, 

the Panel was formed in May 2010 to 

assess the merits of a national 

promotion program. While there have 

been a number of ongoing campaigns 

designed to promote specific sectors of 

the paper industry, the impact of these 

programs has been limited due to 

funding. Additionally, while the 

programs have been useful, their 

messages have been tailored to specific 

segments of the industry. Ultimately, 

the Panel concluded that a national 

program that would generate about $25 

million annually with a unified message 

that crosses all segments would benefit 

the entire industry. 

Provisions of Proposed Program 

Definitions 

Pursuant to section 513 of the 1996 

Act, sections 1222.1 through 1222.29 of 

the proposed Order would define 

certain terms that would be used 

throughout the Order. Several of the 

terms are common to all research and 

promotion programs authorized under 


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the 1996 Act while other terms are 

specific to the proposed paper and 

paper-based packaging Order. 

Section 1222.1 would define the term 

‘‘Act’’ to mean the Commodity 

Promotion, Research and Information 

Act of 1996 (7 U.S.C. 7411–7425), and 

any amendments thereto. 

Section 1222.2 would define the term 

‘‘Board’’ to mean the Paper and PaperBased Packaging Board established 

pursuant to section 1222.40, or such 

other name as recommended by the 

Board and approved by the Department. 

Section 1222.4 would define the term 

‘‘converted products’’ to mean products 

made from paper and paper-based 

packaging. 

Section 1222.5 would define the term 

‘‘Customs’’ or ‘‘CBP’’ to mean the U.S. 

Customs and Border Protection, an 

agency of the U.S. Department of 

Homeland Security. 

Section 1222.7 would define the term 

‘‘fiscal period’’ and ‘‘marketing year’’ to 

mean the 12-month period ending on 

December 31 or such other period as 

recommended by the Board and 

approved by the Secretary. 

Section 1222.9 would define the term 

‘‘information’’ to mean information and 

programs for consumers, customers and 

industry, including educational 

activities, information and programs 

designed to enhance and broaden the 

understanding of the use and attributes 

of paper and paper-based packaging, 

increase efficiency in manufacturing 

paper and paper-based packaging, 

maintain and expand existing markets, 

and develop new markets and marketing 

strategies. These include: 

(a) Consumer education and 

information, which means any action 

taken to provide information to, and 

broaden the understanding of, the 

general public regarding paper and 

paper-based packaging; and 

(b) Industry information, which 

means information and programs that 

would enhance the image of the paper 

and paper-based packaging industry. 

Section 1222.12 would define the 

term ‘‘manufacture’’ or ‘‘produce’’ to 

mean the process of transforming pulp 

into paper and paper-based packaging. 

Section 1222.13 would define the 

term ‘‘manufacturer’’ or ‘‘producer’’ to 

mean any person who manufactures 

paper and paper-based packaging in the 

United States. 

Section 1222.16 would define the 

term ‘‘Panel’’ to mean the Paper and 

Paper-Based Packaging Panel formed to 

oversee development of a paper and 

paper-based packaging promotion, 

research and information program. As 

specified in section 1222.41, the Panel 

would conduct the initial nominations 

for the Board and submit them to the 

Secretary. This would be the only role 

of the Panel under the program. 

Section 1222.17 would define the 

term ‘‘paper and paper-based 

packaging’’ to mean: 

(1) Printing, writing and related 

paper, which is coated or uncoated 

paper, including thermal but excluding 

carbonless paper, that is subsequently 

converted into products used for 

printing, writing and other 

communication purposes, such as file 

folders, envelopes, catalogues, 

magazines and brochures; 

(2) Kraft packaging paper, which is 

coarse unbleached, semi-bleached or 

fully bleached grades of paper that is 

subsequently converted into products 

such as grocery bags, multiwall sacks, 

waxed paper and other products; 

(3) Containerboard, which is all forms 

of linerboard and medium, that is used 

to manufacture corrugated boxes, 

shipping containers and related 

products; and 

(4) Paperboard, which is solid 

bleached kraft board, recycled board 

and unbleached kraft board that is 

subsequently converted into a wide 

variety of end uses, including folding 

boxes, food and beverage packaging, 

tubes, cans, and drums, and other 

miscellaneous products. Paperboard 

does not include construction-related 

products such as gypsum wallboard 

facings and panel board. 

As previously mentioned, the Order 

would cover only the four types of 

paper and paper-based packaging as 

defined above, not tissue, newsprint or 

converted products. 

Sections 1222.10, 1222.11, 1222.14 

and 1222.22 would define the terms 

‘‘kraft process,’’ ‘‘linerboard,’’ 

‘‘medium,’’ and ‘‘pulp,’’ respectively. 

These terms are used in the definition 

of paper and paper-based packaging 

specified in section 1222.17. 

Section 1222.20 would define the 

term ‘‘programs, plans and projects’’ to 

mean those research, promotion and 

information programs, plans or projects 

established pursuant to the Order. 

Section 1222.21 would define the 

term ‘‘promotion’’ to mean any action, 

including paid advertising and the 

dissemination of information, utilizing 

public relations or other means, to 

enhance and broaden the understanding 

of the use and attributes of paper and 

paper-based packaging for the purpose 

of maintaining and expanding markets 

for paper and paper-based packaging. 

Section 1222.23 would define the 

term ‘‘research’’ to mean any type of 

test, study, or analysis designed to 

enhance the image, desirability, use, 

marketability, manufacturing, 

recyclability, reusability or quality of 

paper and paper-based packaging, 

including research directed to product 

characteristics and product 

development, including new uses of 

existing products, new products or 

improved technology in the 

manufacturing of paper and paper-based 

packaging. 

Section 1222.25 would define the 

term ‘‘short ton’’ or ‘‘ton’’ to mean a 

measure of weight equal to 2,000 

pounds. 

Sections 1222.3, 1222.6, 1222.8, 

1222.15, 1222.19, 1222.24, 1222.26, 

1222.27, 1222.28 and 1222.29 would 

define the terms ‘‘conflict of interest,’’ 

‘‘Department or USDA,’’ ‘‘importer,’’ 

‘‘Order,’’ ‘‘person,’’ ‘‘Secretary,’’ 

‘‘State,’’ ‘‘suspend,’’ ‘‘terminate,’’ and 

‘‘United States,’’ respectively. The 

definitions are the same as those 

specified in section 513 of the Act. 

Establishment of the Board 

Pursuant to section 515 of the 1996 

Act, sections 1222.40 through 1222.47 

of the proposed Order would detail the 

establishment and membership of the 

proposed Paper and Paper-Based 

Packaging Board, nominations and 

appointments, the term of office, 

removal and vacancies, procedure, 

reimbursement and attendance, powers 

and duties, and prohibited activities. 

Section 1222.40 would specify the 

Board establishment and membership. 

The Board would be composed of 

domestic manufacturers and importers 

who manufacture or import to the 

United States 100,000 short tons or 

more of paper and paper-based 

packaging during a fiscal period. Seats 

on the Board would be apportioned 

based on the geographic distribution of 

the quantity of paper and paper-based 

packaging manufactured in the United 

States and the quantity of paper and 

paper-based packaging imported to the 

United States. 

The Board would be composed of 12 

members. Eleven members would be 

manufacturers and 1 member would be 

an importer. Of the 11 domestic 

manufacturers, 10 would be allocated to 

four regions within the United States 

based on the quantity of paper and 

paper-based packaging manufactured 

within the respective region. Of the 10 

members, 6 would be from the South, 

two would be from the Midwest, and 

one each would be from the Northeast 

and the West. Specific areas within each 

domestic region would be specified in 

section 1222.40(b)(1). One manufacturer 

representative may be from any region 

(‘‘at large’’) and must produce at least 

100,000 short tons but no more than 

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57012 Federal Register / Vol. 78, No. 179 / Monday, September 16, 2013 / Proposed Rules 

based packaging annually. This is to 

help ensure that the views of smaller 

entities that are subject to assessments 

are represented on the Board. If there 

are no eligible nominees, this seat 

would be allocated to the largest 

producing region. 

The Panel also opted to have no 

alternate Board members. It wants to 

ensure that industry members who seek 

representation and serve on the Board 

are committed to their service and 

participate in all Board meetings. 

Every 5 years, but no more often than 

once every 3 years, the Board must 

review the geographical distribution of 

the quantity of paper and paper-based 

packaging manufactured within the 

United States and the quantity of paper 

and paper-based packaging imported to 

the United States. If warranted, the 

Board would recommend to the 

Secretary that the Board membership be 

reapportioned appropriately to reflect 

such changes, which could include an 

increase in the number of importer 

seats. The distribution of quantities 

between domestic regions would also be 

considered as well as changes in the 

size of the Board. Any changes in Board 

composition would be implemented by 

the Secretary through rulemaking. 

Section 1222.41 of the proposed 

Order would specify Board nominations 

and appointments. The initial 

nominations would be submitted to the 

Secretary by the Panel. The Panel would 

publicize the nomination process, using 

trade press or other means it deems 

appropriate, and outreach to all known 

manufacturers and importers who 

manufacture or import 100,000 short 

tons or more of paper and paper-based 

packaging in a marketing year. The 

Panel would use regional caucuses, mail 

or other methods to solicit potential 

nominees and would work with USDA 

to help ensure that all interested 

persons are apprised of the nomination 

process. The Panel would submit the 

nominations to the Secretary and 

recommend two nominees for each 

Board position. The Secretary would 

select the members of the Board from 

the nominations submitted by the Panel. 

Regarding subsequent nominations, 

the Board would solicit nominations as 

described in the preceding paragraph. 

Eligible persons may nominate 

themselves or other eligible candidates. 

Nominees would have the opportunity 

to provide the Board a short background 

statement outlining their qualifications 

to serve on the Board. Nominees must 

domestically produce or import 100,000 

short tons or more of paper and paperbased packaging annually. Entities that 

are both a domestic manufacturer and 

an importer could seek nomination to 

the Board as either a domestic 

manufacturer or an importer, but not 

both. 

For the domestic seats allocated by 

region, manufacturers must produce 

paper and paper-based packaging in the 

region for which they seek nomination. 

Domestic manufacturers who 

manufacture paper and paper-based 

packaging in more than one region 

could seek nomination in only one 

region of their choice. The names of 

domestic manufacturer nominees would 

be placed on a ballot by region. The 

ballots along with the background 

statements would be mailed to 

manufacturers who produce 100,000 

short tons or more annually for a vote. 

Manufacturers may vote in each region 

in which they manufacture paper and 

paper-based packaging. The votes would 

be tabulated for each region with the 

nominee receiving the highest number 

of votes at the top of the list in 

descending order by vote. The top two 

candidates for each position would be 

submitted to the Secretary. 

The names of nominees for the ‘‘at 

large’’ domestic manufacturer seat 

would also be placed on a ballot. The 

ballots along with the background 

statements would be mailed to all 

manufacturers who manufacture 

100,000 short tons or more of paper and 

paper-based packaging annually. The 

votes would be tabulated and the 

nominees receiving the highest number 

of votes would be placed at the top of 

the list in descending order by vote. The 

top two candidates would be submitted 

to the Secretary. 

The names of importer nominees 

would also be placed on a ballot. The 

ballots along with the background 

statements would be mailed to 

importers who import 100,000 short 

tons or more annually for a vote. The 

votes would be tabulated with the 

nominee receiving the highest number 

of votes at the top of the list in 

descending order by vote. The top two 

candidates for each position would then 

be submitted to the Secretary. 

The Board would submit nominations 

to the Secretary at least 6 months before 

the new Board term begins. The 

Secretary would select the members of 

the Board from the nominations 

submitted by the Board. 

The Panel also recommended that no 

two Board members be employed by a 

single corporation, company, 

partnership or any other legal entity. 

This is to help ensure that 

representation on the Board is balanced. 

In order to provide the Board 

flexibility, the Board could recommend 

to the Secretary modifications to its 

nomination procedures. Any such 

modifications would be implemented 

through rulemaking by the Secretary. 

Section 1222.42 of the proposed 

Order would specify the term of office. 

With the exception of the initial Board, 

each Board member would serve a 

three-year term or until the Secretary 

appointed his or her successor. Each 

term of office would begin on January 1 

and end on December 31. No member 

could serve more than two consecutive 

terms, excluding any term of office less 

than three years. For the initial board, 

the terms of Board members would be 

staggered for two, three and four years 

and would be recommended to the 

Secretary by the Panel. 

Section 1222.43 of the proposed 

Order would specify criteria for the 

removal of members and for filling 

vacancies. If a Board member ceased to 

work for or be affiliated with a domestic 

manufacturer or importer or ceased to 

do business in the region he or she 

represented, such position would 

become vacant. Additionally, the Board 

could recommend to the Secretary that 

a member be removed from office if the 

member consistently refused to perform 

his or her duties or engaged in dishonest 

acts or willful misconduct. The 

Secretary could remove the member if 

he or she finds that the Board’s 

recommendation shows adequate cause. 

The Secretary could also remove a 

member due to adequate cause absent a 

Board recommendation. If a position 

became vacant, nominations to fill the 

vacancy would be conducted using the 

nominations process as proposed in 

section 1222.41 of the Order. A vacancy 

would not be required to be filled if the 

unexpired term is less than six months. 

Section 1222.44 of the proposed 

Order would specify procedures of the 

Board. A majority of the Board members 

would constitute a quorum. Thus, for 

the 12-member Board, 7 members would 

constitute a quorum. If the Board had 

two vacancies and consisted of only 10 

members, 6 members would constitute a 

quorum. A motion would carry if 

supported by a majority of Board 

members, except for recommendations 

to change the assessment rate or to 

adopt a budget, both of which would 

require affirmation by at least two-thirds 

of the Board members. Thus, for a 12- 

member Board, 8 members would have 

to vote in favor of a budget for it to pass. 

For a 10-member Board (two vacancies), 

7 members would have to vote in favor 

of a budget for it to pass. Proxy voting 

would not be permitted. 

The proposed Order would also 

provide for the Board to take action by 

mail, telephone, electronic mail, 

facsimile, or any other electronic means 

when the chairperson believes it is 

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necessary. Actions taken under these 

procedures would be valid only if all 

members and the Secretary were 

notified of the meeting and all members 

were provided the opportunity to vote 

and at least a majority of Board 

members voted in favor of the action 

(unless two-thirds vote were required 

under the Order). Additionally, all votes 

would have to be confirmed in writing 

and recorded in Board minutes. 

The proposed Order would specify 

that Board members would serve 

without compensation. However, Board 

members would be reimbursed for 

reasonable travel expenses, as approved 

by the Board, incurred when performing 

Board business. Similarly, persons who 

serve on subcommittees or other 

committees who may not be Board 

members would also be reimbursed for 

reasonable travel expenses, as approved 

by the Board, incurred when performing 

Board business. 

Section 1222.46 of the proposed 

Order would specify powers and duties 

of the Board. These are similar in 

promotion programs authorized under 

the 1996 Act. They include, among 

other things, to administer the Order 

and collect assessments; to develop 

bylaws and recommend regulations 

necessary to administer the Order; to 

select a chairperson and other Board 

officers; to form committees and 

subcommittees as necessary; to hire staff 

or contractors; to provide appropriate 

notice of meetings to the industry and 

USDA and keep minutes of such 

meetings; to develop programs and enter 

into contracts to implement programs; 

to submit fiscal year budgets to USDA 

in accordance with section 1222.50; to 

borrow funds necessary to cover startup 

costs of the Order; to invest Board funds 

appropriately; to recommend changes in 

the assessment rate as appropriate and 

within the limits of the Order; to have 

its books audited by an outside certified 

public accountant at the end of each 

fiscal period and at other times as 

requested by the Secretary; to report and 

make public reports of its program 

activities; to make public an accounting 

of funds received and expended at least 

once each fiscal year; to receive, 

investigate and report to the Secretary 

complaints of violations of the Order; to 

recommend amendments to the Order as 

appropriate; and to work to achieve an 

effective, continuous and coordinated 

program of promotion, research and 

information and to carry out programs, 

plans and projects designed to provide 

maximum benefits to the paper and 

paper-based packaging industry. 

Section 1222.47 of the proposed 

Order would specify prohibited 

activities that are common to all 

promotion programs authorized under 

the 1996 Act. In summary, neither the 

Board nor its employees and agents 

could engage in actions that would be 

a conflict of interest; use Board funds to 

lobby (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 engage 

in any advertising or activities that may 

be false, misleading or disparaging to 

another agricultural commodity. 

Additionally, paper and paper-based 

packaging from all origins would be 

treated equally. 

Expenses and Assessments 

Pursuant to sections 516 and 517 of 

the 1996 Act, sections 1222.50 through 

1222.53 of the proposed Order detail 

requirements regarding the Board’s 

budget and expenses, financial 

statements, assessments, and exemption 

from assessments. At least 60 calendar 

days before the start of the fiscal period, 

and as necessary during the year, the 

Board would submit a budget to USDA 

covering its projected expenses. The 

budget must include a summary of 

anticipated revenue and expenses for 

each program along with a breakdown 

of staff and administrative expenses. 

Except for the initial budget, the Board’s 

budgets should include comparative 

data for at least one preceding fiscal 

period. 

Each budget must provide for 

adequate funds to cover the Board’s 

anticipated expenses. Any amendment 

or addition to an approved budget must 

be approved by USDA, including 

shifting of funds from one program, plan 

or project to another. Shifts of funds that 

do not result in an increase in the 

Board’s approved budget would not 

have to have prior approval from USDA. 

For example, if the Board’s approved 

budget provided for $1 million in 

consumer advertising and $500,000 in 

research projects, a shift of $50,000 from 

consumer advertising to research would 

require USDA approval. However, a 

shift within the $1 million consumer 

advertising line item would not require 

prior USDA approval. 

The Board would be authorized to 

incur reasonable expenses for its 

maintenance and functioning. During its 

first year of operation, the Board could 

borrow funds for startup costs and 

capital outlay. Any borrowed funds 

would be subject to the same fiscal, 

budget and audit controls as other funds 

of the Board. 

The Board could also accept 

voluntary contributions. Any 

contributions received by the Board 

would be free from encumbrances by 

the donor and the Board would retain 

control over use of the funds. The Board 

would also be required to reimburse 

USDA for costs incurred by USDA in 

overseeing the Order’s operations, 

including all costs associated with 

referenda. 

The Board would be limited to 

spending no more than 15 percent of its 

available funds for administration, 

maintenance, and the functioning of the 

Board. This limitation would begin 

three fiscal years after the Board’s first 

meeting. As an example, if the Board 

received $20 million in assessments 

during fiscal year 5, and had available 

$1 million in reserve funds, the Board’s 

available funds would be $21 million. In 

this scenario, the Board would be 

limited to spending no more than $3.2 

million (.15 × $21 million) on 

administrative costs. Reimbursements to 

USDA would not be considered 

administrative costs. 

The Board could also maintain a 

monetary reserve and carry over excess 

funds from one fiscal period to the next. 

However, such reserve funds could not 

exceed one fiscal year’s budgeted 

expenses. For example, if the Board’s 

budgeted expenses for a fiscal year were 

$20 million, it could carry over no more 

than $20 million in reserve. With 

approval of the Secretary, reserve funds 

could be used to pay expenses. 

The Board could invest its revenue 

collected under the Order in the 

following: (1) Obligations of the United 

States or any agency of the United 

States; (2) General obligations of any 

State or any political subdivision of a 

State; (3) Interest bearing accounts or 

certificates of deposit of financial 

institutions that are members of the 

Federal Reserve; and (4) Obligations 

fully guaranteed as to principal interest 

by the United States. 

The Board would be required to 

submit to USDA financial statements on 

a quarterly basis, or at any other time as 

requested by the Secretary. Financial 

statements should include, at a 

minimum, a balance sheet, an income 

statement and an expense budget. 

Assessments 

The Board’s programs and expenses 

would be funded through assessments 

on U.S. manufacturers and importers, 

other income, and other funds available 

to the Board. The Order would provide 

for an initial assessment rate of $0.35 

per short ton of paper and paper-based 

packaging domestically manufactured or 

imported. Domestic manufacturers 

would pay assessments based on the 

quantity of paper and paper-based 

packaging manufactured or produced; 

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the assessment would be on the 

rollstock. An exception previously 

mentioned is the case of cut-size 

printing and writing papers (including 

folio sheets) in which case the 

assessment would be on the cut-size 

paper. Importers would pay assessments 

based on the quantity of paper and 

paper-based packaging imported to the 

United States. 

Two years after the Order becomes 

effective and periodically thereafter, the 

Board would review the assessment rate 

and, if appropriate, recommend a 

change in the rate. At least two-thirds of 

the Board members would have to favor 

a change in the assessment rate. Any 

change in the assessment rate would be 

subject to rulemaking by the Secretary. 

Anticipated income generated at the 

$0.35 per short ton assessment rate is 

addressed in the section titled 

‘‘Regulatory Flexibility Act Analysis.’’ 

Domestic manufacturers would be 

required to pay their assessments owed 

to the Board by the 30th calendar day 

of the month following the end of the 

quarter in which the paper and paperbased packaging was manufactured. 

Thus, the January to December fiscal 

year would have four quarters ending 

the last day of March, June, September, 

and December, respectively. 

Assessments would be due April 30th, 

July 30th, October 30th and January 

30th. As an example, assessments for 

paper and paper-based packaging 

produced in January, February or March 

would be due to the Board by April 

30th. 

Importer assessments would be 

collected through Customs. If Customs 

did not collect the assessment from an 

importer, then the importer would be 

responsible for paying the assessment 

directly to the Board within 30 calendar 

days after the end of the quarter in 

which the paper and paper-based 

packaging was imported. Imported 

paper and paper-based packaging 

identified by the numbers of the HTSUS 

listed in sections 1222.52(e) would be 

covered under the Order. The majority 

of the paper and paper-based packaging 

imports are in kilograms. One kilogram 

is equal to 2.20462262 pounds and one 

short ton is equal to 2,000 pounds. 

Thus, the $0.35 per short ton assessment 

rate is equal to a rate of $.000386 per 

kilogram ($0.35/2,000 pounds times 

2.20462262 pounds/kilogram). 

The Order would provide authority 

for the Board to impose a late payment 

charge and interest for assessments 

overdue to the Board by 60 calendar 

days. The late payment charge and rate 

of interest would be prescribed in the 

Order’s regulations issued by the 

Secretary. 

Exemptions 

The Order would provide for two 

exemptions. First, U.S. manufacturers 

and importers who domestically 

produce or import less than 100,000 

short tons during a marketing year 

would be exempt from paying 

assessments. If an entity is a U.S. 

manufacturer and an importer, such 

entity’s combined quantity of paper and 

paper-based packaging manufactured 

and imported annually would count 

towards the 100,000 short ton 

exemption. 

Manufacturers would apply to the 

Board for an exemption prior to the start 

of the fiscal year. This would be an 

annual exemption; manufacturers 

would have to reapply each year. They 

would have to certify that they expect 

to domestically manufacture less than 

100,000 short tons for the applicable 

fiscal year. The Board could request past 

production data to support the 

exemption request. The Board would 

then issue, if deemed appropriate, a 

certificate of exemption to the eligible 

manufacturer. Once approved, domestic 

manufacturers would not have to pay 

assessments to the Board for the 

applicable fiscal year. 

Importers that imported less than 

100,000 short tons of paper and paperbased packaging during the prior 

marketing year would automatically be 

considered exempt for the fiscal year 

that assessments are due, and would not 

be required to apply to the Board for a 

certificate of exemption. Customs data 

would be reviewed to determine 

applicable importers. 

Importers that imported more than 

100,000 short tons of paper and paperbased packaging during the prior 

marketing year, but believe and can 

document that they will import less 

than 100,000 short tons during the 

current year could apply to the Board 

for a certificate of exemption. The Board 

would then issue, if deemed 

appropriate, a certificate of exemption 

to the eligible importer. 

Importers which are exempt would 

have their assessments as collected by 

Customs refunded by the Board within 

60 calendar days after receipt of such 

assessments by the Board. No interest 

would be paid on the assessments 

collected by Customs or the Board. 

Manufacturers who did not apply to 

the Board for an exemption and 

domestically manufactured less than 

100,000 short tons during the fiscal year 

would receive a refund from the Board 

for the applicable assessments within 30 

calendar days after the end of the fiscal 

year. The Board would determine the 

assessments paid and refund the 

manufacturer accordingly. 

Importers who did not apply to the 

Board for an exemption, imported more 

than 100,000 short tons of paper and 

paper-based packaging during the prior 

marketing year, and imported less than 

100,000 short tons during the fiscal year 

for which assessments are due, would 

receive a refund from the Board for the 

applicable assessments within 30 

calendar days after the end of the fiscal 

year. The Board would determine the 

assessments paid and refund the 

manufacturer accordingly. 

On the other hand, manufacturers and 

importers who receive an exemption 

certificate or an automatic exemption 

but domestically manufacture or import 

100,000 short tons or more of paper and 

paper-based packaging during the fiscal 

year would have to pay the Board the 

applicable assessments owed within 30 

calendar days after the end of the fiscal 

year and submit any necessary reports 

to the Board. 

The Board could recommend 

additional procedures to administer the 

exemption as appropriate. Any 

procedures would be implemented 

through rulemaking by the Secretary. 

The exemption procedures in this 

proposed rule were modified to reduce 

the paperwork burden on importers that 

historically import less than 100,000 

short tons of paper and paper-based 

packaging during the marketing year. 

Accordingly, modifications were made 

to section 1222.53(a) regarding the 

exemption procedures. 

The second exemption under the 

proposed Order would be for organic 

paper and paper-based packaging. A 

domestic manufacturer who operates 

under an approved National Organic 

Program (NOP) (7 CFR part 205) system 

plan, only manufactures paper and 

paper-based packaging that is eligible to 

be labeled as 100 percent organic under 

the NOP, and is not a split operation, 

would be exempt from the payment of 

assessments. Likewise, an importer who 

imports only paper and paper-based 

packaging that is eligible to be labeled 

as 100 percent organic under the NOP, 

is not a split operation, and who does 

not import any nonorganic paper and 

paper-based packaging would be exempt 

from the payment of assessments. 

Promotion, Research and Information 

Pursuant to section 516 of the 1996 

Act, sections 1222.60 through 1222.62 

of the proposed Order would detail 

requirements regarding promotion, 

research and information programs, 

plans and projects authorized under the 

Order. The Board would develop and 

submit to the Secretary for approval 

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programs, plans and projects regarding 

promotion, research, education and 

other activities, including consumer and 

industry information and advertising. 

The Board would be required to 

evaluate each plan and program to 

ensure that it contributes to an effective 

promotion program. The Order would 

also require that, at least once every five 

years, the Board fund an independent 

evaluation of the effectiveness of the 

Order and programs conducted by the 

Board. The Secretary has authority at 

any time to suspend or terminate the 

Order if he or she determines that it 

obstructs or does not tend to effectuate 

the purpose of the Act. 

Finally, the Order would specify that 

any patents, copyrights, trademarks, 

inventions, product formulations and 

publications developed through the use 

of funds received by the Board would be 

the property of the U.S. Government, as 

represented by the Board. These along 

with any rents, royalties and the like 

from their use would be considered 

income subject to the same fiscal, 

budget, and audit controls as other 

funds of the Board, and could be 

licensed with approval of the Secretary. 

Reports, Books and Records 

Pursuant to section 515 of the 1996 

Act, sections 1222.70 through 1222.72 

would specify the reporting and 

recordkeeping requirements under the 

proposed Order as well as requirements 

regarding confidentiality of information. 

Manufacturers and importers would 

be required to submit periodically to the 

Board certain information as the Board 

may request. Specifically, domestic 

manufacturers would submit a report to 

the Board that would include, but not be 

limited to, the manufacturer’s name, 

address, and telephone number; and the 

quantity of paper and paper-based 

packaging manufactured by type. 

Manufacturers would submit this report 

by the 30th calendar day of the month 

following the end of the quarter in 

which the paper and paper-based 

packaging was manufactured. The 

report would accompany the payment of 

assessments as specified in section 

1222.52. Manufacturers who received a 

certificate of exemption from the Board 

would not have to submit such a report 

to the Board. However, exempt 

manufacturers who produced 100,000 

short tons or more during the fiscal year 

would have to submit such reports to 

the Board as specified in section 

1222.53(a)(6). 

Likewise, importers who pay their 

assessments directly to the Board would 

be required to submit a report to the 

Board that would include, but not be 

limited to, the importer’s name, address, 

and telephone number; the quantity of 

paper and paper-based packaging 

imported to the United States by type; 

and country of export for such paper 

and paper-based packaging. Importers 

would submit this report at the same 

time they remit their assessments to the 

Board. Importers who paid their 

assessments through Customs would not 

have to submit such reports to the Board 

because Customs would collect this 

information upon entry. 

Additionally, domestic manufacturers 

and importers, including those who 

were exempt, would be required to 

maintain books and records needed to 

verify any required reports. Such books 

and records must be made available 

during normal business hours for 

inspection by the Board’s or USDA’s 

employees or agents. Manufacturers and 

importers would be required to 

maintain such books and records for 

two years beyond the applicable fiscal 

period. 

The Order would also require that all 

information obtained from persons 

subject to the Order as a result of 

proposed recordkeeping and reporting 

requirements would be kept 

confidential by all officers, employees, 

and agents of the Board and USDA. 

Such information could only be 

disclosed if the Secretary considered it 

relevant, and the information were 

revealed in a judicial proceeding or 

administrative hearing brought at the 

direction or at the request of the 

Secretary or to which the Secretary or 

any officer of USDA were a party. Other 

exceptions for disclosure of confidential 

information would include the issuance 

of general statements based on reports 

or on information relating to a number 

of persons subject to the Order, if the 

statements did not identify the 

information furnished by any person, or 

the publication, by direction of the 

Secretary, of the name of any person 

violating the Order and a statement of 

the particular provisions of the Order 

violated. 

Miscellaneous Provisions 

Referenda 

Pursuant to section 518 of the 1996 

Act, section 1222.81(a) of the proposed 

Order specifies that the program would 

not go into effect unless it is approved 

by a majority of current U.S. 

manufacturers and importers voting in a 

referendum who also represent a 

majority of the volume of paper and 

paper-based packaging represented in 

the referendum who, during a 

representative period determined by the 

Secretary, were engaged in the 

manufacturing or importation of paper 

and paper-based packaging into the 

United States. For example, if 50 U.S. 

manufacturers and importers 

representing 50 million short tons of 

paper and paper-based packaging voted 

in a referendum, 26 manufacturers and 

importers representing over 26 million 

short tons would have to vote in favor 

of the Order for it to pass in the 

referendum. 

Section 1222.81(b) of the proposed 

Order specifies criteria for subsequent 

referenda. Under the Order, a 

referendum would be held to ascertain 

whether the program should continue, 

be amended, or be terminated. This 

section specifies that a referendum 

would be held 7 years after the Order 

becomes effective, and every 7 years 

thereafter, to determine whether 

manufacturers and importers favor 

continuation of the Order. The Order 

would continue if favored by a majority 

of manufacturers and importers voting 

in the referendum that also represented 

a majority of the volume of paper and 

paper-based packaging represented in 

the referendum. 

Additionally, a referendum could be 

conducted at the request of the Board. 

A referendum could also be conducted 

at the request of 10 percent or more of 

the number of persons eligible to vote in 

a referendum under the Order. Finally, 

a referendum could be conducted at any 

time as determined by the Secretary. 

Other Miscellaneous Provisions 

Sections 1222.80 and sections 1222.82 

through 1222.88 describe the rights of 

the Secretary; authorize the Secretary to 

suspend or terminate the Order when 

deemed appropriate; prescribe 

proceedings after termination; address 

personal liability, separability, and 

amendments; and provide OMB control 

numbers. These provisions are common 

to all research and promotion programs 

authorized under the 1996 Act. 

Executive Order 12866 and Executive 

Order 13563 

Executive Orders 12866 and 13563 

direct agencies to assess all costs and 

benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). Executive Order 13563 

emphasizes the importance of 

quantifying both costs and benefits, of 

reducing costs, of harmonizing rules, 

and of promoting flexibility. This rule is 

not a significant regulatory action under 

section 3(f) of Executive Order 12866, 

Regulatory Planning and Review, as 

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15National Report of Sustainable Forests (2010), 

Page II–112, U.S. Forest Service www.fs.fed.us/

research/sustain/). 

16This is based on a 2008 survey of AF&PA 

member companies that produced pulp, paper and 

paperboard. 

17Forest products industry employment was 

calculated by summing March 2012 Bureau of Labor 

Statistics employment data for the following 

categories: paper and paper products, logging, wood 

products, wood kitchen cabinets and countertops. 

18This is an AF&PA estimate and was computed 

as follow. The paper and paper products industry 

currently employs 395,000 people, according to the 

Bureau of Labor Statistics. The grades of paper and 

paper-based packaging to be covered by the 

proposed program accounted for about 83.3 percent 

of total paper and paper-based packaging in 2011. 

Hence, an estimated 329,000 direct jobs (83.3 

percent of 395,000) are associated with grades that 

would be covered by the program. Multipliers 

compiled by the Economic Policy Institute indicate 

that 100 jobs in the paper industry support an 

additional 325 jobs outside the industry (supplier 

industries, government entities and schools, and 

local communities where paper industry employees 

spend their wages). Thus, 329,000 paper industry 

jobs support 1.4 million jobs throughout the 

economy ((329,000 jobs) + (329,000 jobs × 3.25)). If 

the proposed program preserves just 0.24 percent of 

the paper and allied products industry sales by 

slowing demand declines for some grades and/or 

increasing demand growth for other grades, the 

economy will have 3,360 additional jobs (0.24 

percent × 1.4 million). 

19 Industry sources do not publish information on 

average price for paper and paper-based packaging. 

A reasonable estimate for average price of paper and 

paper-based packaging is the value per ton of paper 

and paper-based packaging exports. According to 

U.S. Census data, the average value of paper and 

paper-based packaging exports in 2011 was 

approximately $760 per short ton. 20U.S. Customs and Border Protection data. 

supplemented by Executive Order 

13563. The Office of Management and 

Budget has not reviewed it under that 

Order. 

We expect the economic impact of 

this rule to be minimal. The program is 

intended to include broad, fact-based 

messages highlighting the renewability, 

recyclability and reusability of paper 

and paper-based packaging. Paper 

produced in the United States relies on 

fiber from sustainably managed forests 

and fiber recovered for recycling as its 

raw material. Broad messages about the 

recyclability of paper should enhance 

recovery efforts. Increasing paper 

recovering for recycling would increase 

the amount of paper diverted from 

landfills. Messaging to encourage the 

use of renewable and recyclable paper 

and paper-based packaging could help 

increase the use of bio-based products; 

paper and paper-based packaging are 

considered bio-based products because 

they are composed of wood fiber. 

The industry could also educate the 

public about the sustainability of paper 

and paper-based packaging. In the 

United States, more trees are grown than 

harvested. Between 1953 and 2006, the 

standing inventory of trees (i.e., the 

volume of growing trees) in U.S. forests 

increased by 49 percent and has 

increased by more than 20 percent since 

1970.15

Additionally, many paper products 

are manufactured using renewable 

energy. In 2008, an estimated 65 percent 

of the energy needed to operate U.S. 

pulp and paper mills was generated 

from renewable fuels derived largely 

from biomass.16 Broad campaigns to 

educate consumers about these factors 

should help all segments of the 

industry. 

The program would also help the 

forest products industry maintain 

870,000 jobs across the nation and begin 

to create new jobs.17 In addition to these 

jobs, numerous other jobs in related 

sectors are dependent upon the 

economic health of this industry. 

The proposed program would be 

funded by industry through an 

assessment. The program would collect 

approximately $25 million in 

assessments from the top producing 

U.S. manufacturers and importers to 

conduct marketing and educate 

consumers about a variety of paper 

products, thus, benefiting all paper 

manufacturers and importers, including 

many small operations that would be 

exempt from the assessment. While the 

benefits of the program are difficult to 

quantify, they are expected to outweigh 

program costs. If the new program 

preserves just 0.24 percent of the paper 

and allied products industry sales by 

slowing demand declines for some 

grades and/or increasing demand 

growth for other grades, the economy 

could experience 3,360 additional 

jobs.18 For example, the Cotton Board 

has seen a Benefit-Cost Ratio for 

producers and the government of $8.80 

return for each dollar invested; and 

since 1990, the Benefit-Cost Ratio for 

importers is a $14.80 return for each 

dollar invested. Other research and 

promotion programs have seen similar 

benefits. 

The assessments collected from U.S. 

manufacturers and importers are 

expected to be relatively small 

compared to U.S. manufacturer revenue 

and the value of paper and paper-based 

packaging imports. Many businesses 

make the decision to not pass these 

costs to consumers and instead keep it 

as a cost to do business because the 

costs are so small compared to the total 

revenue. To calculate the percentage of 

revenue represented by the assessment 

rate, the $0.35 per short ton assessment 

rate is divided by the average price, and 

that number is multiplied by 100. For 

domestic manufacturers, using a 2011 

average price of $760 per short ton,19

the percentage of revenue represented 

by the assessment rate would be .046 

percent. For importers, using an average 

price of $824 per short ton ($6.2 billion 

in 2011 imports divided by 7.5 million 

short tons of imports × 100),20 the 

percentage revenue represented by the 

assessment rate would be .042 percent. 

Thus, for both domestic manufacturers 

and importers covered under the 

proposed program, the percentage 

revenue represented by the assessment 

rate would be well under 1 percent (just 

under 5/100ths of a percent) of the 

average value per ton produced or 

imported. 

Regulatory Flexibility Act Analysis 

In accordance with the Regulatory 

Flexibility Act (RFA) (5 U.S.C. 601– 

612), Agricultural Marketing Service’s 

(AMS) is required to examine the 

impact of the proposed rule on small 

entities. Accordingly, AMS prepared 

this regulatory flexibility analysis. 

The purpose of the RFA is to fit 

regulatory actions to the scale of 

businesses subject to such actions so 

that small businesses will not be 

disproportionately burdened. The Small 

Business Administration defines, in 13 

CFR part 121, small agricultural 

producers as those having annual 

receipts of no more than $750,000 and 

small agricultural service firms 

(manufacturers and importers) as those 

having annual receipts of no more than 

$7.0 million. 

According to the AF&PA, in 2011, 

there were 84 manufacturers in the 

United States that produced one or more 

of the four types of paper and paperbased packaging to be covered under the 

proposed Order. Using an average price 

of $760 per short ton, a manufacturer 

who produced less than 9,210 short tons 

of paper and paper-based packaging per 

year would be considered a small entity. 

It is estimated that no more than four 

manufacturers produced less than 9,210 

short tons in 2011. Thus, the majority of 

manufacturers would not be considered 

small businesses. 

According to Customs data, it is 

estimated that, in 2011, there were 

about 2,612 importers of paper and 

paper-based packaging. Eighty-five 

importers, or about 3.2 percent, 

imported more than $7.0 million worth 

of paper and paper-based packaging. 

Thus, the majority of importers would 

be considered small entities. However, 

no importer who imported 100,000 

short tons or more (the Order’s proposed 

exemption threshold) imported less 

than $7.0 million worth of paper and 

paper-based packaging (19 importers). 

Therefore, none of the 19 importers to 

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be covered under the proposed Order 

would be considered small businesses. 

Regarding value of the commodity, 

with domestic production at about 68.5 

million short tons in 2011, and using an 

average price of $760 per short ton, the 

value of domestic paper and paperbased packaging in 2011 was about $52 

billion. According to Customs data, the 

value of imported paper and paperbased packaging imports for 2011 was 

about $6.2 billion. 

This document proposes an industryfunded research, promotion, and 

information program for paper and 

paper-based packaging. The program 

would be financed by an assessment on 

domestic manufacturers and importers 

and would be administered by a board 

of industry members appointed by the 

Secretary. The initial assessment rate 

would be $0.35 per short ton. Entities 

that domestically manufacture or import 

less than 100,000 short tons per 

marketing year would be exempt from 

the payment of assessments. In addition 

domestic manufacturers and importers 

who would qualify as 100 percent 

organic under the NOP could submit an 

‘‘Organic Exemption Form’’ to the Board 

and request an exemption from 

assessments. The purpose of the 

program would be to maintain and 

expand markets for paper and paperbased packaging. A referendum will be 

held among eligible manufacturers and 

importers to determine whether they 

favor implementation of the program 

prior to it going into effect. A majority 

of entities voting the in the referendum 

by both number, and by volume 

represented in the referendum, would 

have to support the program for it to be 

implemented. The program is 

authorized under the 1996 Act. 

The Order would provide for two 

exemptions. First, domestic 

manufacturers and importers who 

would qualify as 100 percent organic 

under the NOP could submit an 

‘‘Organic Exemption Form’’ to the Board 

and request an exemption from 

assessments. Second, U.S. 

manufacturers and importers who 

domestically produce or import less 

than 100,000 short tons during a 

marketing year would be exempt from 

paying assessments. Of the 84 domestic 

manufacturers in 2011, it is estimated 

that about 33 to 39 percent, produced 

less than 100,000 short tons per year 

and would thus be exempt from paying 

assessments under the proposed Order. 

Of the 2,612 importers in 2011, it is 

estimated that about 2,593, or 99 

percent, imported less than 100,000 

short tons per year and would also be 

exempt from paying assessments. Thus, 

about 51 domestic manufacturers and 19 

importers would pay assessments under 

the Order. Using 2011 data and 

deducting exempt tonnage, it is 

estimated that if 72.5 million short tons 

of paper and paper-based packaging 

(67.2 million short tons domestic and 

5.3 million short tons imported) were 

assessed at a rate of $0.35 per short ton, 

about $25.4 million would be collected 

in assessments. Of that $25.4 million, 

92.5 percent ($23.5 million) would be 

paid by domestic manufacturers and 7.5 

percent ($1.9 million) would be paid by 

importers. 

Regarding alternatives, the Panel 

considered various options to the 

program’s coverage, the proposed 

assessment rate and exemption 

threshold. The Panel considered the 

merits of assessing all U.S. production 

of the four types of paper and paperbased packaging to be covered under the 

program, whether imports should be 

included, and different assessment rates 

to generate a range in income from $10 

million to $30 million. The Panel also 

considered the merits of a 25,000 short 

ton versus a 100,000 short ton 

exemption. The table below details 

various rates of assessment and 

approximate income generated using 

2011 data and the 100,000 short tonexemption threshold. 

APPROXIMATE ASSESSMENT INCOME AT

VARIOUS ASSESSMENT RATES

Approximate assessment 

income 

U.S. production 

and imports with a 

100,000 short 

ton-exemption 

(72.5 million short 

tons) 

$10.0 million ................... $0.138 

$20.0 million ................... 0.276 

$25.4 million ................... 0.350 

$30.0 million ................... 0.413 

After much consideration, the Panel 

concluded and the Department concurs 

that an exemption threshold of 100,000 

short tons would be appropriate with 

imports covered under the program as 

well. The Panel concluded and the 

Department concurs that this exemption 

level would help reduce the financial 

and reporting burden on smaller entities 

but provide the Board sufficient income 

to administer the program and conduct 

research and promotion activities. 

This action would impose additional 

reporting and recordkeeping burdens on 

manufacturers and importers of paper 

and paper-based packaging. 

Manufacturers and importers interested 

in serving on the Board would be asked 

to submit a nomination form to the 

Board indicating their desire to serve or 

nominating another industry member to 

serve on the Board. Interested persons 

could also submit a background 

statement outlining their qualifications 

to serve on the Board. Except for the 

initial Board nominations, 

manufacturers and importers would 

have the opportunity to cast a ballot and 

vote for candidates to serve on the 

Board. Manufacturer and importer 

nominees to the Board would have to 

submit a background form to the 

Secretary to ensure they are qualified to 

serve on the Board. 

Additionally, manufacturers and 

importers who manufacture or import 

less than 100,000 short tons annually 

could submit a request to the Board for 

an exemption from paying assessments 

on this volume. Manufacturers and 

importers would also be asked to submit 

a report to the Board regarding their 

production/imports. Manufacturers and 

importers who would qualify as 100 

percent organic under the NOP could 

submit a request to the Board for an 

exemption from assessments. Importers 

could also request a refund of any 

assessments paid to Customs. 

Finally, manufacturers and importer 

who want to participate in a referendum 

to vote on whether the Order should 

become effective would have to 

complete a ballot for submission to the 

Secretary. These forms have been 

submitted to the OMB for approval 

under OMB Control No. 0581–0281. 

Specific burdens for the forms are 

detailed later in this document in the 

section titled ‘‘Paperwork Reduction 

Act’’. As with all Federal promotion 

programs, reports and forms are 

periodically reviewed to reduce 

information requirements and 

duplication by industry and public 

sector agencies. Finally, USDA has not 

identified any relevant Federal rules 

that duplicate, overlap, or conflict with 

this rule. 

AMS is committed to complying with 

the E-Government Act, to promote the 

use of the Internet and other 

information technologies to provide 

increased opportunities for citizen 

access to Government information and 

services, and for other purposes. 

Regarding outreach efforts, the Panel 

represents a broad cross-section of 

manufacturers and importers that would 

be covered under the program. Of the 14 

Panel members, 11 are AF&PA members 

and 3 are non-AF&PA members. 

According to the Panel, Panel and 

AF&PA members represent about 81 

percent of the domestic industry that 

would be covered by the program. Panel 

members representing 69 percent of the 

domestic production have signed forms 

indicating their support for the program. 

Over the past year, the Panel, and 

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AF&PA staff and industry company 

employees, on behalf of the Panel, have 

made presentations on the proposed 

Order to all three major associations 

representing paper-based packaging and 

many of the associations representing 

the printing and writing paper segment 

of the industry. In September 2011, the 

Panel mailed information regarding the 

program to all Panel-known companies 

that would pay assessments under the 

program. This included manufacturers 

and importers and both AF&PA 

members and non-members. The Panel 

also mailed a letter to other parties in 

the supply chain to continue to educate 

them about the program. The AF&PA 

continues to communicate to its 

members and non-members about the 

program. Panel members plan to 

continue outreach to the CEOs of their 

industry peers to explain the program 

and help garner support. 

Finally, the numbers used in the RFA 

analysis herein represent the total 

universe of domestic manufacturers and 

importers known to USDA and not 

those who may be eligible to vote in the 

referendum. 

Civil Rights Impact Analysis 

Consideration has been given to the 

potential civil rights implications of this 

proposed rule on affected parties to 

ensure that no person or group shall be 

discriminated against on the basis of 

race, color, national origin, gender, 

religion, age, disability, sexual 

orientation, marital or family status, 

political beliefs, parental status or 

protected genetic information. Although 

detailed information is not available on 

the domestic manufacturers and 

importers who would be subject to the 

program or the users of paper and 

paper-based packaging, broad 

consideration was given to the 

employees of such entities and those 

individuals who wish to use 

information collected under this 

mandatory program. This proposed rule 

does not require affected entities to 

relocate or alter their operations in ways 

that could adversely affect such persons 

or groups. Moreover, the program would 

not exclude from participation any 

persons or groups, deny any persons or 

groups the benefits of the program, or 

subject any persons or groups to 

discrimination. 

Executive Order 13175 

This action has been reviewed in 

accordance with the requirements of 

Executive Order 13175, Consultation 

and Coordination with Indian Tribal 

Governments. The review reveals that 

this regulation would not have 

substantial and direct effects on Tribal 

governments and would not have 

significant Tribal implications. 

Executive Order 12988 

This action has been reviewed under 

Executive Order 12988, Civil Justice 

Reform. It is not intended to have 

retroactive effect. Section 524 of the 

1996 Act provides that it shall not affect 

or preempt any other Federal or State 

law authorizing promotion or research 

relating to an agricultural commodity. 

Under section 519 of the 1996 Act, a 

person subject to an order may file a 

written petition with USDA stating that 

an order, any provision of an order, or 

any obligation imposed in connection 

with an order, is not established in 

accordance with the law, and request a 

modification of an order or an 

exemption from an order. Any petition 

filed challenging an order, any 

provision of an order, or any obligation 

imposed in connection with an order, 

shall be filed within two years after the 

effective date of an order, provision, or 

obligation subject to challenge in the 

petition. The petitioner will have the 

opportunity for a hearing on the 

petition. Thereafter, USDA will issue a 

ruling on the petition. The 1996 Act 

provides that the district court of the 

United States for any district in which 

the petitioner resides or conducts 

business shall have the jurisdiction to 

review a final ruling on the petition, if 

the petitioner files a complaint for that 

purpose not later than 20 days after the 

date of the entry of USDA’s final ruling. 

Paperwork Reduction Act 

In accordance with the Paperwork 

Reduction Act of 1995 (44 U.S.C. 

Chapter 35), AMS has requested 

approval of a new information 

collection and recordkeeping 

requirements for the proposed paper 

and paper-based packaging program. 

Title: Advisory Committee or 

Research and Promotion Background 

Information. 

OMB Number for background form 

AD–755: (Approved under OMB No. 

0505–0001). 

Expiration Date of Approval: May 31, 

2015. 

Title: Paper and Paper-Based 

Packaging Promotion, Research and 

Information Order. 

OMB Number: 0581–0281. 

Expiration Date of Approval: 3 years 

from approval date. 

Type of Request: New information 

collection for research and promotion 

programs. 

Abstract: The information collection 

requirements in the request are essential 

to carry out the intent of the 1996 Act. 

The information collection concerns a 

proposal received by USDA for a 

national research and promotion 

program for the paper and paper-based 

packaging industry. The program would 

be financed by an assessment on 

domestic manufacturers and importers 

and would be administered by a board 

of industry members appointed by the 

Secretary. The program would provide 

for an exemption for manufacturers and 

importers who manufacture or import 

less than 100,000 short tons of paper 

and paper-based packaging during the 

year. A referendum will be held among 

eligible manufacturers and importers to 

determine whether they favor 

implementation of the program prior to 

it going into effect. The purpose of the 

program would be to maintain and 

expand markets for paper and paperbased packaging. 

In summary, the information 

collection requirements under the 

program concern Board nominations, 

the collection of assessments, and 

referenda. For Board nominations, 

manufacturers and importers interested 

in serving on the Board would be asked 

to submit a ‘‘Nomination Form’’ to the 

Board indicating their desire to serve or 

to nominate another industry member to 

serve on the Board. Interested persons 

could also submit a background 

statement outlining qualifications to 

serve on the Board. Except for the initial 

Board nominations, manufacturers and 

importers would have the opportunity 

to submit a ‘‘Nomination Ballot’’ to the 

Board where they would vote for 

candidates to serve on the Board. 

Nominees would also have to submit a 

background information form, ‘‘AD– 

755,’’ to the Secretary to ensure they are 

qualified to serve on the Board. 

Regarding assessments, manufacturers 

and importers who manufacture or 

import less than 100,000 short tons 

annually could submit a request, 

‘‘Application for Exemption from 

Assessments,’’ to the Board for an 

exemption from paying assessments. 

Manufacturers and importers would be 

asked to submit a ‘‘Production/Import 

Report’’ that would be submitted to the 

Board on a quarterly basis that would 

specify the quantity of paper and paperbased packaging manufactured or 

imported during the applicable period 

and the country of export (for imports). 

Manufacturers who manufacture less 

than 100,000 short tons annually would 

be exempt from paying assessments and 

would not be required to submit this 

report. Additionally, only importers 

who pay their assessments directly to 

the Board would be required to submit 

this report. If the importer assessments 

are collected by Customs, Customs 

would remit the funds to the Board and 

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the other information would be 

available from Customs (i.e., country of 

export, quantity imported). Finally, 

domestic manufacturers and importers 

who would qualify as 100 percent 

organic under the NOP could submit an 

‘‘Organic Exemption Form’’ to the Board 

and request an exemption from 

assessments. 

There would also be an additional 

burden on manufacturers and importers 

voting in referenda. The referendum 

ballot, which represents the information 

collection requirement relating to 

referenda, is addressed in a final rule on 

referendum procedures which is 

published separately in this issue of the 

Federal Register. 

Information collection requirements 

that are included in this proposal 

include: 

(1) Nomination Form 

Estimate of Burden: Public 

recordkeeping burden for this collection 

of information is estimated to average 

0.25 hour per application. 

Respondents: Manufacturers and 

importers. 

Estimated Number of Respondents: 

20. 

Estimated Number of Responses per 

Respondent: 1. 

Estimated Total Annual Burden on 

Respondents: 5 hours. 

(2) Background Statement 

Estimate of Burden: Public 

recordkeeping burden for this collection 

of information is estimated to average 

0.25 hour per application. 

Respondents: Manufacturers and 

importers. 

Estimated Number of Respondents: 

20. 

Estimated Number of Responses per 

Respondent: 1. 

Estimated Total Annual Burden on 

Respondents: 5 hours. 

(3) Nomination Ballot 

Estimate of Burden: Public 

recordkeeping burden for this collection 

of information is estimated to average 

0.25 hour per application. 

Respondents: Domestic manufacturers 

and importers. 

Estimated Number of Respondents: 75 

(56 manufacturers and 19 importers 

who manufacture/import 100,000 short 

tons or more annually). 

Estimated Number of Responses per 

Respondent: 1. 

Estimated Total Annual Burden on 

Respondents: 18.75 hours. 

(4) Background Information Form AD– 

755 (OMB Form No. 0505–0001) 

Estimate of Burden: Public reporting 

for this collection of information is 

estimated to average 0.5 hour per 

response for each Board nominee. 

Respondents: Manufacturers and 

importers. 

Estimated Number of Respondents: 12 

(24 for initial nominations to the Board, 

0 for the second year, and up to 8 

annually thereafter). 

Estimated Number of Responses per 

Respondent: 1 every 3 years. (0.3) 

Estimated Total Annual Burden on 

Respondents: 12 hours for the initial 

nominations to the Board, 0 hours for 

the second year of operation, and up to 

4 hours annually thereafter. 

(5) Application for Exemption From 

Assessments 

Estimate of Burden: Public reporting 

burden for this collection of information 

is estimated to average 0.25 hour per 

manufacturer or importer reporting on 

paper and paper-based packaging 

manufactured or imported. Upon 

approval of an application, 

manufacturers and importers would 

receive exemption certification. 

Respondents: Domestic manufacturers 

(33) and importers (2,593) who 

manufacture or import less than 100,000 

short tons of paper and paper-based 

packaging annually. 

Estimated number of Respondents: 

2,626. 

Estimated number of Responses per 

Respondent: 1. 

Estimated Total Annual Burden on 

Respondents: 656.50 hours. 

(6) Production/Import Report 

Estimate of Burden: Public reporting 

burden for this collection of information 

is estimated to average 0.5 hour per 

manufacturer or importer. 

Respondents: Manufacturers who 

manufacture 100,000 short tons or more 

annually (51) and importers who remit 

their assessments directly to the Board 

(computation is based on the scenario 

where all 19 importers pay their 

assessments to the Board). 

Estimated number of Respondents: 

70. 

Estimated number of Responses per 

Respondent: 4. 

Estimated Total Annual Burden on 

Respondents: 140 hours. 

(7) Refund of Assessments 

Estimate of Burden: Public reporting 

burden for this collection of information 

is estimated to average 0.25 hour. 

Respondents: Manufacturers and 

importers. 

Estimated Number of Respondents: 

10. 

Estimated Number of Responses per 

Respondent: 1. 

Estimated Total Annual Burden on 

Respondents: 2.5 hours. 

(8) Organic Exemption Form 

Estimate of Burden: Public 

recordkeeping burden for this collection 

of information is estimated to average 

0.5 hours per exemption form. 

Respondents: Organic manufacturers 

and importers. 

Estimated Number of Respondents: 1. 

Estimated Number of Responses per 

Respondent: 1. 

Estimated Total Annual Burden on 

Respondents: 0.5 hour. 

(9) A Requirement To Maintain Records 

Sufficient To Verify Reports Submitted 

Under the Order 

Estimate of Burden: Public 

recordkeeping burden for keeping this 

information is estimated to average 0.5 

hours per record keeper maintaining 

such records. 

Recordkeepers: Manufacturers (84) 

and importers (2,612). 

Estimated number of recordkeepers: 

2,696. 

Estimated total recordkeeping hours: 

1,348 hours. 

As noted above, under the proposed 

program, manufacturers and importers 

would be required to pay assessments 

and file reports with and submit 

assessments to the Board (importers 

through Customs). While the proposed 

Order would impose certain 

recordkeeping requirements on 

manufacturers and importers, 

information required under the 

proposed Order could be compiled from 

records currently maintained. Such 

records must be retained for at least two 

years beyond the fiscal year of their 

applicability. 

An estimated 2,696 respondents 

would provide information to the Board 

(84 domestic manufacturers and 2,612 

importers). The estimated cost of 

providing the information to the Board 

by respondents would be $72,204. This 

total has been estimated by multiplying 

2,188 total hours required for reporting 

and recordkeeping by $33, the average 

mean hourly earnings of various 

occupations involved in keeping this 

information. Data for computation of 

this hourly rate was obtained from the 

U.S. Department of Labor, Bureau of 

Labor Statistics. 

The proposed Order’s provisions have 

been carefully reviewed, and every 

effort has been made to minimize any 

unnecessary recordkeeping costs or 

requirements, including efforts to utilize 

information already submitted under 

other programs administered by USDA 

and other state programs. 

The proposed forms would require 

the minimum information necessary to 

effectively carry out the requirements of 

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the program, and their use is necessary 

to fulfill the intent of the 1996 Act. Such 

information can be supplied without 

data processing equipment or outside 

technical expertise. In addition, there 

are no additional training requirements 

for individuals filling out reports and 

remitting assessments to the Board. The 

forms would be simple, easy to 

understand, and place as small a burden 

as possible on the person required to file 

the information. 

Collecting information quarterly 

would coincide with normal industry 

business practices. The timing and 

frequency of collecting information are 

intended to meet the needs of the 

industry while minimizing the amount 

of work necessary to fill out the required 

reports. The requirement to keep 

records for two years is consistent with 

normal industry practices. In addition, 

the information to be included on these 

forms is not available from other sources 

because such information relates 

specifically to individual manufacturers 

and importers who are subject to the 

provisions of the 1996 Act. Therefore, 

there is no practical method for 

collecting the required information 

without the use of these forms. 

Analysis of Comments 

The previously proposed rule 

concerning this action published in the 

Federal Register on January 2, 2013. 

Copies of that rule were mailed by 

USDA to all known domestic 

manufacturers and importers. The rule 

was also made available through the 

Internet by USDA and published in the 

Federal Register. The rule provided a 

60-day comment period ending March 

4, 2013. Seventy-five comments were 

received. Of the 75 comments, 5 were 

duplicates. Of the remaining 70 

comments, 62 supported the proposed 

Order, 6 were opposed, and 2 

commented without taking a position on 

the program. Of the 62 comments in 

support, 60 supported the rule with no 

changes, 1 requested clarification on a 

component of the Order, and 1 

recommended a change. In addition, the 

two commenters that did not take a 

position also recommended changes to 

the program. The comments are 

addressed in the following paragraphs. 

Comments in Full Support 

The 60 comments which supported 

the Order with no changes noted the 

difficult economic conditions that the 

paper and paper based packaging 

industry is experiencing. Several 

commenters stated that the pressures 

faced from loss of manufacturing jobs 

has significantly affected, and has the 

possibility of affecting even more jobs in 

the industry. Many of the commenters 

mentioned that the industry supplies 

numerous jobs in rural areas. They 

believe that without the Order, many 

plants across the Country would be 

forced to close, adversely affecting the 

families in the rural communities. Many 

commenters stated that the industry has 

faced declining markets due to digital 

competition. They stated that educating 

the consumer is key to facing this 

competition. The common theme among 

all positive comments was the need to 

provide fact-based messaging to 

highlight the renewability, reusability, 

and recyclability of paper and paper 

based package to aid the public in better 

understating paper products and change 

the misconceptions and attitudes about 

paper. 

Comments in Support, With 

Modification or Requesting Clarification 

Two commenters who supported the 

Order reiterated their comments in full 

support. However, one of the 

commenters requested clarification on 

the exemption process, and one 

recommended a change to the 

composition of the Board. 

The commenter that requested 

clarification on the de minimis 

exemption requested details regarding 

the exemption approval process and 

requested information on any factors 

other than production or import 

volumes that may be considered in 

making the determination of who 

receives an exemption. In addition, the 

commenter requested specific details 

regarding the process for resolving 

disputes. 

Section 1222.53(a) of the Order 

provides for an exemption from 

assessments for U.S. manufacturers and 

importers who domestically produce or 

import less than 100,000 short tons 

during a marketing year. If an entity is 

a U.S. manufacturer and an importer, 

such entity’s combined quantity of 

paper and paper-based packaging 

manufactured and imported annually 

would count towards the 100,000 short 

ton exemption. 

Manufacturers would apply to the 

Board for an exemption prior to the start 

of the fiscal year. This would be an 

annual exemption; manufacturers 

would have to reapply each year. They 

would have to certify that they expect 

to domestically manufacture less than 

100,000 short tons for the applicable 

fiscal year. Manufacturers may be asked 

to provide to the Board past production 

data to verify they produced under the 

threshold in the prior year. 

Importers exempt from assessments in 

the prior fiscal year would 

automatically be considered exempt for 

the fiscal year that assessments are due. 

Customs data would be reviewed to 

verify applicable importers. Importers 

that imported over the threshold in the 

prior year but believe and can document 

that they will import less than 100,000 

short tons during the current year may 

apply to the Board for an exemption 

certificate. Documentation provided to 

the Board may include multiple past 

years of import data to support their 

exemption request. 

Once approved, domestic 

manufacturers would not have to pay 

assessments to the Board for the 

applicable fiscal year. Importers which 

are exempt would have their 

assessments as collected by Customs 

refunded by the Board within 60 

calendar days after receipt of such 

assessments by the Board. No interest 

would be paid on the assessments 

collected by Customs or the Board. 

Manufacturers and importers that 

received an exemption certificate or an 

automatic exemption from the Board but 

manufactured or imported 100,000 short 

tons or more of paper and paper-based 

packaging during the marketing year 

shall pay the Board the applicable 

assessments owed on the quantity 

manufactured or imported within 30 

calendar days after the end of the 

marketing year and submit any 

necessary reports to the Board pursuant 

to section 1222.70 of the Order. 

If there is a dispute, the Board could 

request additional past production or 

import data to support the exemption 

request. Manufacturers and importers 

could provide other information if 

appropriate. For example, if a 

company’s production was reduced 

because of an event like a fire in a plant, 

the company could provide supporting 

data to the Board. The Board would 

then issue, if deemed appropriate, a 

certificate of exemption to the eligible 

manufacturer or importer. The Board 

could also recommend additional 

procedures to administer the exemption 

as appropriate. Any procedures would 

be implemented through rulemaking by 

the Secretary. Additional details about 

the exemption are in section 1222.53(a) 

of this Order. 

One commenter that supported the 

Order suggested that the number of 

Board seats for importers be increased 

from one to two, and that one of the 

members of the Board should be 

European. 

Section 1222.40 of the proposed 

Order provides for a Board composed of 

12 members. Eleven members would be 

manufacturers and 1 member would be 

an importer. 

Using this distribution, manufacturer 

members on the Board would account 

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Federal Register / Vol. 78, No. 179 / Monday, September 16, 2013 / Proposed Rules 57021 

for 92 percent of Board membership, 

while importer members would account 

for 8 percent of Board membership. In 

2011, approximately 68.5 million short 

tons of U.S. paper and paper-based 

packaging to be covered under the 

program were produced. According to 

Customs data, in 2011, imports to be 

covered under the program totaled 7.5 

million short tons. Therefore, in 2011 a 

total of 76 million short tons would 

have been covered under the program of 

which, 90 percent was from domestic 

manufacturing and nine percent was 

from imports. Taking into account the 

amount of domestic and imported 

product, the composition of the Board 

as proposed is reasonable since it 

reflects the volume of imports and 

domestic production. Furthermore, 

every 5 years, but no more often than 

once every 3 years, the Board must 

review the geographical distribution of 

the quantity of paper and paper-based 

packaging manufactured within the 

United States and the quantity of paper 

and paper-based packaging imported to 

the United States. If warranted, the 

Board would recommend to the 

Secretary that the Board membership be 

reapportioned appropriately to reflect 

such changes, which could include an 

increase in the number of importer 

seats. The distribution of quantities 

between domestic regions would also be 

considered as well as changes in the 

size of the Board. Any changes in Board 

composition would be implemented by 

the Secretary through rulemaking. 

Accordingly, the Department is not 

making any changes to the proposed 

Order based on this comment. 

Comments Opposed 

Six comments received were opposed 

to the proposed program. The six 

commenters touched on six major 

themes including: (1) Likening the 

assessment to a tax, (2) the affordability 

of the program, (3) the ability of the 

industry to advertise for themselves, (4) 

government control of the program, (5) 

the feasibility of a research and 

promotion program for the paper and 

paper-based packaging industry, and (6) 

justification for the exemptions 

suggested in the Order. Based on our 

evaluation of these comments, no 

changes will be made to the Order. 

These comments are discussed below. 

Four commenters expressed 

concerned that the assessment collected 

would be a tax on the industry. In 

addition, one commenter questioned the 

use of government resources to run the 

program. The proposed program would 

be paid for by the paper and paperbased packaging industry through 

assessments on domestic manufacturers 

and importers of 100,000 short tons or 

more of paper and paper-based 

packaging annually. Research and 

promotion programs are self-help 

programs funded by their respective 

industry and do not receive taxpayer 

funds. Furthermore, the Board would be 

required to reimburse USDA for costs 

incurred by USDA in overseeing the 

Order’s operations, including all costs 

associated with referenda. 

Three commenters questioned the 

affordability of the program for paper 

and paper-based packaging 

manufacturers. One commenter stated 

that they cannot afford and likely would 

not benefit from the promotion. Another 

commenter opinioned that levying $0.35 

per short ton would add more cost to 

paper, and that cost would be passed on 

to customers. A third commenter stated 

that the assessment would add more 

cost to paper and paper-based 

packaging. 

As previously discussed, the 

economic downturn as well as 

competition from digital media, has had 

an adverse effect on the paper and 

paper-based packing industry. However, 

USDA has received sufficient 

justification to warrant proceeding to a 

referendum so that industry members 

may vote as to whether a paper and 

paper-based packaging research and 

promotion program should be 

implemented. Additionally, as 

previously mentioned, USDA received 

several comments that referenced the 

state of the economy and jobs in the 

rural community attributed to paper and 

paper-based packaging manufacturing as 

reasons that the program is essential. 

The purpose of the proposed Order is 

to enhance and broaden the 

understanding of the use and attributes 

of paper and paper-based packaging for 

the purpose of maintaining and 

expanding markets for paper and paperbased packaging. The proposed Order 

does not regulate the price of paper and 

paper-based packaging. Cost 

distribution is a business decision of the 

individuals affected by the Order. 

Four commenters were concerned 

about the government’s role in 

marketing and advertising for the paper 

and paper-based packaging industry. 

Specifically, one commenter stated that 

it would be impossible for the scope of 

advertising achieved by USDA to reach 

the consumer. Two commenters 

opinioned that the government should 

not have a role in the promotion of 

paper, and companies should be 

allowed to promote for themselves. An 

additional comment on the subject 

stated that companies should be 

allowed to create their own marketing 

plans. 

The 1996 Act provides the authority 

for agricultural industries to develop 

programs for generic research and 

promotion for their respective 

industries. Under these programs, it is 

the Board (composed of industry 

members) that develops their own 

budgets and marketing plan. USDA 

provides oversight of these programs. 

The Board, with the approval of the 

Secretary, would decide how the funds 

are used. Generic promotion, research, 

and industry information activities play 

a unique role in advancing the demand 

for their respective commodities, since 

such activities may increase the total 

market demand for the commodity. 

While, the Board may conduct strategic 

planning for the industry as a whole, 

individual companies are not precluded 

from doing their own advertising and 

promotion. 

One commenter who questioned the 

government’s involvement with the 

proposed program stated that the 

program should be voluntary and not 

mandatory. The proposed Order is 

authorized under the 1996 Act which 

authorizes USDA to establish 

agricultural commodity research and 

promotion orders which may include a 

combination of promotion, research, 

industry information and consumer 

information activities funded by 

mandatory assessments. Research and 

promotions programs overseen by 

USDA are self-help, government speech 

programs, initiated by members of the 

industry. Industry members that would 

be affected by the program would be 

given the opportunity to vote in a 

referendum to determine if the program 

should be approved prior to the Order 

going into effect. For the proposed 

Order to become effective, it must be 

approved by a majority of manufacturers 

and importers voting for approval in a 

referendum, who also represent a 

majority of the volume of paper and 

paper-based packaging represented in 

the referendum. In order to provide 

notification of an impending vote to 

those who USDA believes would be 

regulated under the proposed program, 

USDA is mailing a copy of this rule to 

all known industry members and will 

do a subsequent mailing of ballots, 

instructions and a summary of the 

program to all known potential eligible 

voters. In addition, any one that believes 

they are eligible to vote in the 

referendum may request a ballot by 

calling the toll free number in the 

ADDRESSES section of this document. 

Three commenters who opposed the 

program questioned the feasibility of 

check-off programs for the paper and 

paper-based packaging industry. One of 

the commenters opinioned that checkmstockstill on DSK4VPTVN1PROD with PROPOSALS2

57022 Federal Register / Vol. 78, No. 179 / Monday, September 16, 2013 / Proposed Rules 

21Sources: USDA (AMS, ERS, FAS, FSA, NASS), 

Department of Labor (BLS), Department of 

Commerce (Bureau of Census), and ERS 

calculations. 

22Cotton Research and Promotion Program 

Annual Report—2010–2011. 

off programs are great for consumer 

based industries, but offer little value to 

industrial companies. Another 

commenter stated that check-off 

programs are ineffective and cost 

prohibitive, and referenced dairy and 

orange juice check-off programs to 

support their statement. A third 

commenter stated that they personally 

have derived little or no benefit from the 

Cotton Research and Promotion program 

into which they are currently paying 

assessments. 

The commenter that referenced dairy 

and orange juice check-off programs 

provided four additional points to 

support their statement. In reference to 

the dairy program, the commenter stated 

that despite the massive outlay of funds 

since 1983 and a national campaign to 

promote dairy products: (1) Per capita 

consumption of milk has been on a 

downward trend since 1945; (2) Overall 

milk consumption has declined 3 

percent a year in four out of the last five 

years; (3) Growth in consumption of 

fluid milk has not kept pace with 

population growth; and (4) In the highly 

competitive beverage market, milk has 

lost significant share since 1980, from 

37 percent in 1980 to 19 percent in 

2011. 

In response to the aforementioned 

comment, per capita consumption of all 

milk has declined in the post-war era, 

but that decline has been reversed since 

the institution of the National Dairy 

Promotion and Research Program in 

1983 (0.25 percent increase per year 

since). Overall milk consumption has 

risen in each of the last 5 years and 

continues to grow. Finally, independent 

analysis contracted by USDA shows that 

there is a significant positive return to 

fluid milk processors, contrary to the 

commenter’s assertion 21. 

In response to the comment regarding 

the effectiveness of the orange juice 

program, a Florida Citrus Commission 

considered the possibility of a research 

and promotion program. However, the 

industry decided not to move forward 

with a proposal prior to submitting a 

proposal to USDA. 

In response to the commenters that 

question the feasibility of research and 

promotion programs for industrial 

industries, other research and 

promotion programs administered by 

USDA cover commodities that are from 

various sources and made into multiple 

products. The purpose of generic 

promotion programs is to increase the 

total market for a product to the benefit 

of an industry, even when the 

commodity may be made into various 

products. 

In response to the commenter that 

stated that they have received little to 

no benefit from their payment into the 

Cotton Research and Promotion 

Program, an in-depth independent 

economic effectiveness study conducted 

in early 2011 on the effectiveness of the 

Cotton Research and Promotion Program 

concluded that the Cotton Research and 

Promotion Program generates a positive 

return for U.S. cotton producers and 

importers of cotton products 22. 

One commenter had two concerns 

regarding the exemptions in the 

proposed Order. First, the commenter 

stated that the proposed rule does not 

provide justification for excluding tissue 

paper and newsprint. The two types of 

paper and paper-based packaging that 

would not be covered under the 

program are tissue paper and newsprint. 

With the exception of restroom handdryers versus paper towels, tissue paper 

products are not facing competition 

from alternative products. The opposite 

is true for newsprint. Demand for 

newsprint has drastically declined due 

to the shift toward digital 

communications. However, the Panel 

concluded and the Department concurs 

that the newsprint segment of the 

industry would not be able to incur the 

cost of a promotion program at this 

time. 

Second, the commenter did not 

believe that there is justification for an 

organic exemption. A domestic 

manufacturer who operates under an 

approved National Organic Program 

(NOP) (7 CFR part 205) system plan, 

only manufactures paper and paperbased packaging that is eligible to be 

labeled as 100 percent organic under the 

NOP, and is not a split operation, would 

be exempt from the payment of 

assessments. Likewise, an importer who 

imports only paper and paper-based 

packaging that is eligible to be labeled 

as 100 percent organic under the NOP, 

is not a split operation, and who does 

not import any nonorganic paper and 

paper-based packaging would be exempt 

from the payment of assessments. 

Section 2103 of the Organic Food 

Production Act of 1990 (7 U.S.C. 6501– 

6522) includes the consumption of nonfood products. For example, under the 

Cotton Research and Promotion 

Program, organic cotton products are 

exempt from assessment, including nonfood products. Thus, organic paper and 

paper-based products would be exempt 

from assessment under the proposed 

Order. Domestic manufacturers and 

importers would have to provide 

sufficient information to the Board to 

warrant an organic exemption. 

Additional Comments 

In addition, two comments were 

received that neither supported nor 

opposed the program, but raised 

concerns or made recommendations. 

One commenter raised a concern that 

although they would be exempt from 

the program, the paperwork required to 

request an exemption would be 

burdensome. The other commenter 

suggested that the proposed assessment 

should be based on 1,000 kg metric ton, 

as the commenter prescribes is the 

preferred measurement system as 

promulgated by Executive Order 12770 

from 1991. 

In response to the comment regarding 

metric usage, while Executive Order 

12770, issued on July 25, 1991, directed 

agencies to convert to the metric system, 

Executive Order 12770 Section 2(a)(1) 

states that metric usage shall not be 

required to the extent that such use is 

impractical or is likely to cause 

significant inefficiencies or loss of 

markets to United States firms. 

Furthermore, the paper and paper-based 

packaging industry utilizes short ton for 

measurement as an industry standard. 

Therefore, no change has been made to 

the Proposed Order based on this 

comment. 

In response to the comment about 

exemption paperwork, USDA is working 

to develop a process whereby an 

importer could provide Customs a copy 

of the exemption certificate issued by 

the Board. However, the only available 

alternative at this time is for Customs to 

collect the assessment, and the Board to 

refund such importers their assessment 

no later than 60 calendar days after 

receipt by the Board. USDA recognizes 

that submitting the certificate of 

exemption may be burdensome for some 

importers. Therefore, section 1222.53(a) 

of the Proposed Order is changed to 

adjust the requirements of importers to 

submit a certificate of exemption to 

receive an exemption from the Board. 

Instead, importers that would have been 

exempt from assessments in the prior 

fiscal year would automatically be 

considered exempt for the fiscal year 

that assessments are due. However, as 

stated above, Customs would collect the 

assessment, and the Board would refund 

exempt importers their assessment no 

later than 60 calendar days after receipt 

by the Board. 

In the January 2, 2013, proposed rule, 

comments were also invited on the 

information collection requirements 

prescribed in the Paperwork Reduction 

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Federal Register / Vol. 78, No. 179 / Monday, September 16, 2013 / Proposed Rules 57023 

Act section of this rule. Specifically, 

comments were solicited on: (a) 

Whether the proposed collection of 

information is necessary for the proper 

performance of functions of the 

proposed Order and USDA’s oversight 

of the proposed Order, including 

whether the information would have 

practical utility; (b) the accuracy of 

USDA’s estimate of the burden of the 

proposed collection of information, 

including the validity of the 

methodology and assumptions used; (c) 

the accuracy of USDA’s estimate of the 

principal manufacturing areas in the 

United States for paper and paper-based 

packaging; (d) the accuracy of USDA’s 

estimate of the number of manufacturers 

and importers of paper and paper-based 

packaging that would be covered under 

the program; (e) ways to enhance the 

quality, utility, and clarity of the 

information to be collected; and (f) ways 

to minimize the burden of the collection 

of information on those who are to 

respond, including the use of 

appropriate automated, electronic, 

mechanical, or other technological 

collection techniques or other forms of 

information technology. No comments 

were received regarding information 

collection. 

While the proposal set forth below 

has not received the approval of USDA, 

it is determined that this proposed 

Order is consistent with and would 

effectuate the purposes of the 1996 Act. 

As previously mentioned, for the 

proposed Order to become effective, it 

must be approved by a majority of 

manufacturers and importers voting for 

approval in a referendum, who also 

represent a majority of the volume of 

paper and paper-based packaging 

represented in the referendum. 

Referendum procedures will be 

published separately in this issue of the 

Federal Register. 

Referendum Order 

Pursuant to the 1996 Act, a 

referendum will be conducted to 

determine whether eligible domestic 

manufacturers and importers favor 

issuance of the proposed Order. Section 

518 of the 1996 Act authorizes USDA to 

conduct a referendum prior to the Order 

going into effect. 

The representative period for 

establishing voter eligibility for the 

referendum shall be the period from 

January 1 through December 31, 2012. 

Domestic manufacturers must have 

manufactured 100,000 short tons or 

more of paper and paper-based 

packaging within the United States and 

importers must have imported 100,000 

short tons or more of paper and paperbased packaging to the United States 

during the representative period to be 

eligible to vote. In addition, entities 

eligible to vote must be currently 

engaged in the domestic manufacturing 

or importation of paper and paper-based 

packaging. If the Order becomes 

effective, entities that are not be eligible 

to vote in the referendum because they 

manufactured and/or imported less than 

100,000 short tons of paper and paperbased packaging during the 

representative period, may be subject to 

assessments if they domestically 

manufacture and/or import 100,000 

short tons or more of paper and paperbased packaging during subsequent 

marketing year. The Order shall become 

effective if it is approved by a majority 

of eligible U.S. manufacturers and 

importers voting in the referendum who 

also represent a majority of the volume 

of paper and paper-based packaging 

represented in the referendum. 

The referendum procedures that were 

issued pursuant to the 1996 Act shall be 

used to conduct the referendum (7 CFR 

1222.100 through 1222.108). The 

referendum shall be conducted by mail 

from October 28 through November 8, 

2013. Ballots must be received by the 

referendum agents no later than the 

close of business 4:30 p.m. (Eastern 

Standard Time) on November 8, 2013, to 

be counted. 

Marlene Betts and Kimberly Coy of 

the USDA, AMS, Promotion and 

Economics Division, are designated as 

the referendum agents to conduct the 

referendum. Prior to the first day of the 

voting period, the referendum agents 

will mail the ballots to be cast in the 

referendum and voting instructions to 

all eligible voters. Any domestic 

manufacturer or importer who does not 

receive a ballot should contact the 

referendum agents cited in the FOR

FURTHER INFORMATION CONTACT section 

no later than one week before the end 

of the voting period. 

In accordance with the Paperwork 

Reduction Act of 1995 (44 U.S.C. 

Chapter 35), the referendum ballot was 

submitted to the OMB and approved 

under OMB Control No. 0581–0282. 

List of Subjects in 7 CFR Part 1222 

Administrative practice and 

procedure, Advertising, Consumer 

information, Marketing agreements, 

Paper and paper-based-packaging 

promotion, Reporting and 

recordkeeping requirements. 

For the reasons set forth in the 

preamble, it is proposed that 7 CFR part 

1222, as added elsewhere in this issue 

of the Federal Register, be amended as 

follows: 

PART 1222—PAPER AND PAPERBASED PACKAGING PROMOTION, 

RESEARCH AND INFORMATION 

ORDER 

■ 1. The authority citation for part 1222 

continues to read as follows: 

Authority: 7 U.S.C. 7411–7425; 7 U.S.C. 

7401. 

■ 2. Subpart A is added to read as 

follows: 

Subpart A—Paper and Paper-Based 

Packaging Promotion, Research and 

Information Order 

Definitions 

Sec. 

1222.1 Act. 

1222.2 Board. 

1222.3 Conflict of interest. 

1222.4 Converted products. 

1222.5 Customs or CBP. 

1222.6 Department or USDA. 

1222.7 Fiscal period and marketing year. 

1222.8 Importer. 

1222.9 Information. 

1222.10 Kraft process. 

1222.11 Linerboard. 

1222.12 Manufacture or produce. 

1222.13 Manufacturer or producer. 

1222.14 Medium. 

1222.15 Order. 

1222.16 Panel. 

1222.17 Paper and paper-based packaging. 

1222.18 Part and subpart. 

1222.19 Person. 

1222.20 Program, plans and projects. 

1222.21 Promotion. 

1222.22 Pulp. 

1222.23 Research. 

1222.24 Secretary. 

1222.25 Short ton or ton. 

1222.26 State. 

1222.27 Suspend. 

1222.28 Terminate. 

1222.29 United States. 

Paper and Paper-Based Packaging Board 

1222.40 Establishment and membership. 

1222.41 Nominations and appointments. 

1222.42 Term of office. 

1222.43 Removal and vacancies. 

1222.44 Procedure. 

1222.45 Reimbursement and attendance. 

1222.46 Powers and duties. 

1222.47 Prohibited activities. 

Expenses and Assessments 

1222.50 Budget and expenses. 

1222.51 Financial statements. 

1222.52 Assessments. 

1222.53 Exemption from assessment. 

Promotion, Research and Information 

1222.60 Programs, plans and projects. 

1222.61 Independent evaluation. 

1222.62 Patents, copyrights, trademarks, 

inventions, product formulations, and 

publications. 

Reports, Books, and Records 

1222.70 Reports. 

1222.71 Books and records. 

1222.72 Confidential treatment. 

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Miscellaneous 

1222.80 Right of the Secretary. 

1222.81 Referenda. 

1222.82 Suspension or termination. 

1222.83 Proceedings after termination. 

1222.84 Effect of termination or 

amendment. 

1222.85 Personal liability. 

1222.86 Separability. 

1222.87 Amendments. 

1222.88 OMB control numbers. 

Subpart A—Paper and Paper-Based 

Packaging Promotion, Research and 

Information Order 

Definitions 

§ 1222.1 Act. 

Act means the Commodity Promotion, 

Research and Information Act of 1996 (7 

U.S.C. 7411–7425), and any 

amendments thereto. 

§ 1222.2 Board. 

Board means the Paper and PaperBased Packaging Board established 

pursuant to § 1222.40, or such other 

name as recommended by the Board and 

approved by the Department. 

§ 1222.3 Conflict of interest. 

Conflict of interest means a situation 

in which a member or employee of the 

Board has a direct or indirect financial 

interest in a person who performs a 

service for, or enters into a contract 

with, the Board for anything of 

economic value. 

§ 1222.4 Converted products. 

Converted products means products 

made from paper and paper-based 

packaging. 

§ 1222.5 Customs or CBP. 

Customs or CBP means the U.S. 

Customs and Border Protection, an 

agency of the U.S. Department of 

Homeland Security. 

§ 1222.6 Department or USDA. 

Department or USDA means the U.S. 

Department of Agriculture, or any 

officer or employee of the Department to 

whom authority has heretofore been 

delegated, or to whom authority may 

hereafter be delegated, to act in the 

Secretary’s stead. 

§ 1222.7 Fiscal period and marketing year. 

Fiscal period and marketing year 

means the 12-month period ending on 

December 31 or such other period as 

recommended by the Board and 

approved by the Secretary. 

§ 1222.8 Importer. 

Importer means any person who 

imports paper and paper-based 

packaging from outside the United 

States for sale in the United States as a 

principal or as an agent, broker, or 

consignee of any person who 

manufactures paper and paper-based 

packaging outside the United States for 

sale in the United States, and who is 

listed in the import records as the 

importer of record for such paper and 

paper-based packaging. 

§ 1222.9 Information. 

Information means information and 

programs for consumers, customers and 

industry, including educational 

activities, information and programs 

designed to enhance and broaden the 

understanding of the use and attributes 

of paper and paper-based packaging, 

increase efficiency in manufacturing 

paper and paper-based packaging, 

maintain and expand existing markets, 

and develop new markets and marketing 

strategies. These include: 

(a) Consumer education and 

information, which means any action 

taken to provide information to, and 

broaden the understanding of, the 

general public regarding paper and 

paper-based packaging; and 

(b) Industry information, which 

means information and programs that 

would enhance the image of the paper 

and paper-based packaging industry. 

§ 1222.10 Kraft process. 

Kraft process means a process that 

transforms wood into a high quality 

strong pulp for making paper and paperbased packaging. 

§ 1222.11 Linerboard. 

Linerboard means a grade of 

containerboard that is used as facing 

material in the manufacture of 

corrugated or solid fiber shipping boxes. 

§ 1222.12 Manufacture or produce. 

Manufacture or produce means the 

process of transforming pulp into paper 

and paper-based packaging. 

§ 1222.13 Manufacturer or producer. 

Manufacturer or producer means any 

person who manufactures paper and 

paper-based packaging in the United 

States. 

§ 1222.14 Medium. 

Medium means a grade of 

containerboard used as the inner fluting 

material in the manufacture of 

corrugated or solid fiber shipping boxes. 

§ 1222.15 Order. 

Order means an order issued by the 

Secretary under section 514 of the Act 

that provides for a program of generic 

promotion, research, and information 

regarding agricultural commodities 

authorized under the Act. 

§ 1222.16 Panel. 

Panel means the Paper and PaperBased Packaging Panel formed to pursue 

development of a paper and paper-based 

packaging promotion, research and 

information program. 

§ 1222.17 Paper and paper-based 

packaging. 

(a) Paper and paper-based packaging 

means: 

(1) Printing, writing and related 

paper, which is coated or uncoated 

paper that is subsequently converted 

into products used for printing, writing 

and other communication purposes, 

such as file folders, envelopes, 

catalogues, magazines and brochures. 

For purposes of this Order, printing, 

writing and related paper includes 

thermal paper but does not include 

carbonless paper; 

(2) Kraft packaging paper, which is 

coarse unbleached, semi-bleached or 

fully bleached grades of paper that are 

subsequently converted into products 

such as grocery bags, multiwall sacks, 

waxed paper and other products; 

(3) Containerboard, which is all forms 

of linerboard and medium that is used 

to manufacture corrugated boxes, 

shipping containers and related 

products; and 

(4) Paperboard, which is solid 

bleached kraft board, recycled board 

and unbleached kraft board that is 

subsequently converted into a wide 

variety of end uses, including folding 

boxes, food and beverage packaging, 

tubes, cans, and drums, and other 

miscellaneous products. Paperboard 

does not include construction-related 

products such as gypsum wallboard 

facings and panel board. 

(b) For purposes of this Order, paper 

and paper-based packaging does not 

include tissue paper, newsprint or 

converted products. 

§ 1222.18 Part and subpart. 

Part means the Paper and Paper-Based 

Packaging Promotion, Research and 

Information Order and all rules, 

regulations, and supplemental orders 

issued pursuant to the Act and the 

Order. The Order shall be a subpart of 

such part. 

§ 1222.19 Person. 

Person means any individual, group 

of individuals, partnership, corporation, 

association, cooperative, or any other 

legal entity. 

§ 1222.20 Programs, plans and projects. 

Programs, plans and projects means 

those research, promotion and 

information programs, plans or projects 

established pursuant to the Order. 

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§ 1222.21 Promotion. 

Promotion means any action, 

including paid advertising and the 

dissemination of information, utilizing 

public relations or other means, to 

enhance and broaden the understanding 

of the use and attributes of paper and 

paper-based packaging for the purpose 

of maintaining and expanding markets 

for paper and paper-based packaging. 

§ 1222.22 Pulp. 

Pulp means the material that is 

produced by chemically or 

mechanically separating cellulose fibers 

from wood or recycling recovered fiber. 

§ 1222.23 Research. 

Research means any type of test, 

study, or analysis designed to enhance 

the image, desirability, use, 

marketability, manufacturing, 

recyclability, reusability or quality of 

paper and paper-based packaging, 

including research directed to product 

characteristics and product 

development, including new uses of 

existing products, new products or 

improved technology in the 

manufacturing of paper and paper-based 

packaging. 

§ 1222.24 Secretary. 

Secretary means the Secretary of 

Agriculture of the United States, or any 

other officer or employee of the 

Department to whom authority has been 

delegated, or to whom authority may 

hereafter be delegated, to act in the 

Secretary’s stead. 

§ 1222.25 Short ton or ton. 

Short ton or ton means a measure of 

weight equal to 2,000 pounds. 

§ 1222.26 State. 

State means any of the 50 States of the 

United States, the District of Columbia, 

the Commonwealth of Puerto Rico, or 

any territory or possession of the United 

States. 

§ 1222.27 Suspend. 

Suspend means to issue a rule under 

section 553 of title 5 U.S.C. to 

temporarily prevent the operation of an 

order or part thereof during a particular 

period of time specified in the rule. 

§ 1222.28 Terminate. 

Terminate means to issue a rule under 

section 553 of title 5 U.S.C. to cancel 

permanently the operation of an order 

or part thereof beginning on a date 

certain specified in the rule. 

§ 1222.29 United States. 

United States means collectively the 

50 States, the District of Columbia, the 

Commonwealth of Puerto Rico and the 

territories and possessions of the United 

States. 

Paper and Paper-Based Packaging 

Board 

§ 1222.40 Establishment and membership. 

(a) Establishment of the Board. There 

is hereby established a Paper and PaperBased Packaging Board to administer 

the terms and provisions of this Order. 

The Board shall be composed of 

manufacturers and importers of paper 

and paper-based packaging that 

manufacture or import 100,000 short 

tons or more of paper and paper-based 

packaging during a marketing year. 

Seats on the Board shall be apportioned 

as set forth in paragraph (b) of this 

section based on the geographical 

distribution of the quantity of paper and 

paper-based packaging manufactured in 

the United States and the quantity of 

paper and paper-based packaging 

imported to the United States. 

(b) The Board shall be composed of 12 

members and shall be established as 

follows: 

(1) Manufacturers. Eleven members 

shall be manufacturers. Of the 11 

manufacturers, 10 shall be from the 

following four regions: 

(i) Six members shall be from the 

South, which consists of the states of 

Alabama, Arkansas, Delaware, Florida, 

Georgia, Kentucky, Louisiana, 

Maryland, Mississippi, North Carolina, 

Oklahoma, South Carolina, Tennessee, 

Texas, Virginia, West Virginia, and all 

other parts of the United States not 

listed in paragraphs (b)(1)(ii), (b)(1)(iii), 

and (b)(1)(iv) of this section; 

(ii) One member shall be from the 

Northeast, which consists of the states 

of Connecticut, Maine, Massachusetts, 

New Hampshire, New Jersey, New York, 

Pennsylvania, Rhode Island and 

Vermont; 

(iii) Two members shall be from the 

Midwest, which consists of the states of 

Colorado, Illinois, Indiana, Iowa, 

Kansas, Michigan, Minnesota, Missouri, 

North Dakota, Ohio, South Dakota, 

Wisconsin and Wyoming; and 

(iv) One member shall be from the 

West, which consists of the states of 

Alaska, Arizona, California, Hawaii, 

Idaho, Montana, New Mexico, Nevada, 

Oregon, Utah, and Washington. 

(v) One manufacturer member at large 

may be from any region and shall 

manufacture at least 100,000 short tons 

but no more than 250,000 short tons of 

paper and paper-based packaging 

annually. If there are no eligible 

nominees, this seat shall be allocated to 

the largest producing region specified in 

paragraphs (b)(1)(i) through (b)(1)(iv). 

(2) Importers. One member shall be an 

importer. 

(c) At least once in every five-year 

period, but not more frequently than 

once in every three-year period, the 

Board will review the geographical 

distribution of the quantity of paper and 

paper-based packaging manufactured 

within the United States and the 

quantity of paper and paper-based 

packaging imported to the United 

States. The review will be conducted 

using the Board’s annual assessment 

receipts and, if available, other reliable 

reports from the industry. If warranted, 

the Board will recommend to the 

Secretary that the membership or size of 

the Board be adjusted to reflect changes 

in geographical distribution of the 

quantity of paper and paper-based 

packaging manufactured in the United 

States and the quantity of paper and 

paper-based packaging imported to the 

United States. Any changes in Board 

composition shall be implemented by 

the Secretary through rulemaking. 

§ 1222.41 Nominations and appointments. 

(a) Nominees must manufacture or 

import 100,000 short tons or more of 

paper and paper-based packaging in a 

marketing year. 

(b) Initial nominations shall be 

submitted to the Secretary by the Panel. 

Before considering any nominations, the 

Panel shall publicize the nomination 

process, using trade press or other 

means it deems appropriate, and shall 

conduct outreach to all known 

manufacturers and importers 

manufacturing or importing 100,000 

short tons or more of paper and paperbased packaging in a marketing year to 

generate nominees that reflect the range 

of operations within the paper and 

paper-based packaging industry. The 

Panel may use regional caucuses, mail 

or other methods to elicit potential 

nominees. The Panel shall work with 

USDA to ensure that all eligible 

candidates are aware of the opportunity 

to serve on the Board. The Panel shall 

submit the nominations to the Secretary 

and recommend two nominees for each 

Board position specified in § 1222.40(b). 

The Secretary shall select the initial 

members of the Board from the 

nominations submitted by the Panel. 

(c) Subsequent nominations shall be 

conducted as follows: 

(1) The Board shall conduct outreach 

to all known manufacturers and 

importers manufacturing or importing 

100,000 short tons or more of paper and 

paper-based packaging in a marketing 

year. Manufacturers and importers may 

submit nominations to the Board; 

(2) Manufacturer and importer 

nominees may provide the Board a short 

background statement outlining their 

qualifications to serve on the Board; 

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(3) Nominees that are both a 

manufacturer and an importer may seek 

nomination to the Board as either a 

manufacturer or an importer, but not 

both; 

(4) For the domestic seats allocated by 

region, domestic manufacturers must 

manufacture paper and paper-based 

packaging in the region for which they 

seek nomination. Nominees that 

manufacture in more than one region 

may seek nomination in one region of 

their choice. Nominees must specify for 

which region they are seeking 

nomination. The names of manufacturer 

nominees shall be placed on a ballot by 

region. The ballots along with the 

background statements shall be mailed 

to all manufacturers who manufacture 

100,000 short tons or more of paper and 

paper-based packaging per marketing 

year. Manufacturers may vote in each 

region in which they manufacture paper 

and paper-based packaging. The votes 

shall be tabulated for each region and 

the nominees receiving the highest 

number of votes shall be placed at the 

top of the list in descending order by 

vote. The top two candidates for each 

position shall be submitted to the 

Secretary; 

(5) The names of nominees for at large 

domestic manufacturers shall be placed 

on a ballot. The ballots along with the 

background statements shall be mailed 

to all manufacturers who manufacture 

100,000 short tons or more of paper and 

paper-based packaging per marketing 

year. The votes shall be tabulated and 

the nominees receiving the highest 

number of votes shall be placed at the 

top of the list in descending order by 

vote. The top two candidates shall be 

submitted to the Secretary; 

(6) The names of importer nominees 

shall be placed on a ballot. The ballots 

along with background statements shall 

be mailed to importers who import 

100,000 short tons or more of paper and 

paper-based packaging per marketing 

year. The votes shall be tabulated and 

the nominees receiving the highest 

number of votes shall be placed at the 

top of the list in descending order by 

vote. The top two candidates for each 

position shall be submitted to the 

Secretary; 

(7) The Board must submit 

nominations to the Secretary at least six 

months before the new Board term 

begins; 

(8) Any manufacturer or importer 

nominated to serve on the Board shall 

file with the Secretary at the time of the 

nomination a background questionnaire; 

(9) From the nominations made 

pursuant to this section, the Secretary 

shall appoint the members of the Board 

on the basis of representation provided 

in § 1222.40(b); 

(10) No two members shall be 

employed by a single corporation, 

company, partnership or any other legal 

entity; and 

(11) The Board may recommend to the 

Secretary modifications to its 

nomination procedures as it deems 

appropriate. Any such modifications 

shall be implemented through 

rulemaking by the Secretary. 

§ 1222.42 Term of office. 

(a) With the exception of the initial 

Board, each Board member shall serve 

for a term of three years or until the 

Secretary selects his or her successor. 

Each term of office shall begin on 

January 1 and end on December 31. No 

member may serve more than two full 

consecutive three-year terms, except as 

provided in paragraph (b) of this 

section. 

(b) For the initial Board, the terms of 

the Board members shall be staggered 

for two, three and four years. 

Determination of which of the initial 

members shall serve a term of two, three 

or four years shall be recommended to 

the Secretary by the Panel. 

§ 1222.43 Removal and vacancies. 

(a) The Board may recommend to the 

Secretary that a member be removed 

from office if the member consistently 

fails or refuses to perform his or her 

duties properly or engages in dishonest 

acts or willful misconduct. If the 

Secretary determines that any person 

appointed under this subpart 

consistently fails or refuses to perform 

his or her duties properly or engages in 

acts of dishonesty or willful 

misconduct, the Secretary shall remove 

the person from office. A person 

appointed under this subpart or any 

employee of the Board may be removed 

by the Secretary if the Secretary 

determines that the person’s continued 

service would be detrimental to the 

purposes of the Act. 

(b) If a member resigns, is removed 

from office, or in the event of death of 

any member or if any member of the 

Board ceases to work for or be affiliated 

with a manufacturer or importer, or if a 

manufacturer ceases to do business in 

the region he or she represents, such 

position shall become vacant. 

(c) If a position becomes vacant 

nominations to fill the vacancy will be 

conducted using the nominations 

process set forth in this Order or the 

Board may recommend to the Secretary 

that he or she appoint a successor from 

the most recent list of nominations for 

the position. 

(d) A vacancy will not be required to 

be filled if the unexpired term is less 

than six months. 

§ 1222.44 Procedure. 

(a) A majority of the Board members 

shall constitute a quorum. 

(b) Each member of the Board shall be 

entitled to one vote on any matter put 

to the Board and the motion will carry 

if supported by a majority of Board 

members, except for recommendations 

to change the assessment rate or to 

adopt a budget, both of which require 

affirmation by two-thirds of the total 

number of Board members. 

(c) At an assembled meeting, all votes 

shall be cast in person. 

(d) In lieu of voting at an assembled 

meeting and, when in the opinion of the 

chairperson of the Board such action is 

considered necessary, the Board may 

take action if supported by a majority of 

members (unless two-thirds is required 

under the Order) by mail, telephone, 

electronic mail, facsimile, or any other 

means of communication. In that event, 

all members must be notified and 

provided the opportunity to vote. Any 

action so taken shall have the same 

force and effect as though such action 

had been taken at an assembled 

meeting. All votes shall be recorded in 

Board minutes. 

(e) There shall be no proxy voting. 

§ 1222.45 Reimbursement and attendance. 

Board members shall serve without 

compensation, but shall be reimbursed 

for reasonable travel expenses, as 

approved by the Board, which they 

incur when performing Board business. 

§ 1222.46 Powers and duties. 

The Board shall have the following 

powers and duties: 

(a) To administer this subpart in 

accordance with its terms and 

conditions and to collect assessments; 

(b) To develop and recommend to the 

Secretary for approval such bylaws as 

may be necessary for the functioning of 

the Board, and such rules and 

regulations as may be necessary to 

administer the Order, including 

activities authorized to be carried out 

under the Order; 

(c) To meet not less than annually, 

organize, and select from among the 

members of the Board a chairperson, 

vice chairperson, secretary/treasurer, 

other officers, and committees and 

subcommittees, as the Board determines 

to be appropriate. The committee and 

subcommittees may include persons 

other than Board members, including 

representatives of Board members, as 

the Board deems necessary and 

appropriate, provided Board members 

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or their representative constitute a 

majority of all committees and 

subcommittees; 

(d) To employ or contract with 

persons, other than the Board members, 

as the Board considers necessary to 

assist the Board in carrying out its 

duties, and to determine the 

compensation and specify the duties of 

the persons; 

(e) To notify manufacturers and 

importers of all Board meetings through 

a press release or other means and to 

give the Secretary the same notice of 

meetings of the Board (including 

committee, subcommittee, and the like) 

as is given to members so that the 

Secretary’s representative(s) may attend 

such meetings, and to keep and report 

minutes of each meeting of the Board to 

the Secretary; 

(f) To develop and submit programs, 

plans and projects to the Secretary for 

the Secretary’s approval, and enter into 

contracts or agreements related to such 

programs, plans and projects, which 

must be approved by the Secretary 

before becoming effective, for the 

development and carrying out of 

programs, plans or projects of 

promotion, research and information. 

The payment of costs for such activities 

shall be from funds collected pursuant 

to this Order. Each contract or 

agreement shall provide that: 

(1) The contractor or agreeing party 

shall develop and submit to the Board 

a program, plan or project together with 

a budget or budgets that shall show the 

estimated cost to be incurred for such 

program, plan or project; 

(2) The contractor or agreeing party 

shall keep accurate records of all its 

transactions and make periodic reports 

to the Board of activities conducted, 

submit accounting for funds received 

and expended, and make such other 

reports as the Secretary or the Board 

may require; 

(3) The Secretary may audit the 

records of the contracting or agreeing 

party periodically; and 

(4) Any subcontractor who enters into 

a contract with a Board contractor and 

who receives or otherwise uses funds 

allocated by the Board shall be subject 

to the same provisions as the contractor. 

(g) To prepare and submit for the 

approval of the Secretary fiscal year 

budgets in accordance with § 1222.50; 

(h) To borrow funds necessary for 

startup expenses of the Order during the 

first year of operation by the Board; 

(i) To invest assessments collected 

and other funds received pursuant to 

the Order and use earnings from 

invested assessments to pay for 

activities carried out pursuant to the 

Order; 

(j) To recommend changes to the 

assessment rates as provided in this 

part; 

(k) To cause its books to be audited 

by an independent auditor at the end of 

each fiscal year and at such other times 

as the Secretary may request, and to 

submit a report of the audit directly to 

the Secretary; 

(l) To periodically prepare and make 

public reports of program activities and, 

at least once each fiscal year, to make 

public an accounting of funds received 

and expended; 

(m) To maintain such minutes, books 

and records and prepare and submit 

such reports and records from time to 

time to the Secretary as the Secretary 

may prescribe; to make appropriate 

accounting with respect to the receipt 

and disbursement of all funds entrusted 

to it; and to keep records that accurately 

reflect the actions and transactions of 

the Board; 

(n) To act as an intermediary between 

the Secretary and any manufacturer or 

importer; 

(o) To receive, investigate, and report 

to the Secretary complaints of violations 

of the Order; 

(p) To recommend to the Secretary 

such amendments to the Order as the 

Board considers appropriate; and 

(q) To work to achieve an effective, 

continuous, and coordinated program of 

promotion, research, and information 

and to carry out programs, plans, and 

projects designed to provide maximum 

benefits to the paper and paper-based 

packaging industry. 

§ 1222.47 Prohibited activities. 

The Board may not engage in, and 

shall prohibit the employees and agents 

of the Board from engaging in: 

(a) Any action that would be a conflict 

of interest; 

(b) Using funds collected by the Board 

under the Order to undertake any action 

for the purpose of influencing 

legislation or governmental action or 

policy, by local, state, national, and 

foreign governments or subdivision 

thereof, other than recommending to the 

Secretary amendments to the Order; and 

(c) No program, plan or project 

including advertising shall be false, 

misleading or disparaging to another 

agricultural commodity. Paper and 

paper-based packaging of all geographic 

origins shall be treated equally. 

Expenses and Assessments 

§ 1222.50 Budget and expenses. 

(a) At least 60 calendar days prior to 

the beginning of each fiscal year, and as 

may be necessary thereafter, the Board 

shall prepare and submit to the 

Department a budget for the fiscal year 

covering its anticipated expenses and 

disbursements in administering this 

part. The budget for research, promotion 

or information may not be implemented 

prior to approval by the Secretary. Each 

such budget shall include: 

(1) A statement of objectives and 

strategy for each program, plan or 

project; 

(2) A summary of anticipated revenue, 

with comparative data for at least one 

preceding fiscal year, except for the 

initial budget; 

(3) A summary of proposed 

expenditures for each program, plan or 

project; and 

(4) Staff and administrative expense 

breakdowns, with comparative data for 

at least one preceding fiscal year, except 

for the initial budget. 

(b) Each budget shall provide 

adequate funds to defray its proposed 

expenditures and to provide for a 

reserve as set forth in this Order. 

(c) Subject to this section, any 

amendment or addition to an approved 

budget must be approved by the 

Department, including shifting funds 

from one program, plan or project to 

another. Shifts of funds that do not 

result in an increase in the Board’s 

approved budget and are consistent 

with governing bylaws need not have 

prior approval by the Department. 

(d) The Board is authorized to incur 

such expenses, including provision for 

a reserve, as the Secretary finds 

reasonable and likely to be incurred by 

the Board for its maintenance and 

functioning, and to enable it to exercise 

its powers and perform its duties in 

accordance with the provisions of this 

subpart. Such expenses shall be paid 

from funds received by the Board. 

(e) With approval of the Department, 

the Board may borrow money for the 

payment of startup expenses subject to 

the same fiscal, budget, and audit 

controls as other funds of the Board. 

Any funds borrowed shall be expended 

only for startup costs and capital outlays 

and are limited to the first year of 

operation by the Board. 

(f) The Board may accept voluntary 

contributions. Such contributions shall 

be free from any encumbrance by the 

donor and the Board shall retain 

complete control of their use. The Board 

may receive funds from outside sources 

with approval of the Secretary for 

specific authorized projects. 

(g) The Board shall reimburse the 

Secretary for all expenses incurred by 

the Secretary in the implementation, 

administration, enforcement and 

supervision of the Order, including all 

referendum costs in connection with the 

Order. 

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(h) For fiscal years beginning three 

years after the date of the establishment 

of the Board, the Board may not expend 

for administration, maintenance, and 

the functioning of the Board an amount 

that is greater than 15 percent of the 

assessment and other income received 

by and available to the Board for the 

fiscal year. For purposes of this 

limitation, reimbursements to the 

Secretary shall not be considered 

administrative costs. 

(i) The Board may establish an 

operating monetary reserve and may 

carry over to subsequent fiscal years 

excess funds in any reserve so 

established: Provided, That, the funds in 

the reserve do not exceed one fiscal 

year’s budget of expenses. Subject to 

approval by the Secretary, such reserve 

funds may be used to defray any 

expenses authorized under this subpart. 

(j) Pending disbursement of 

assessments and all other revenue under 

a budget approved by the Secretary, the 

Board may invest assessments and all 

other revenues collected under this part 

in: 

(1) Obligations of the United States or 

any agency of the United States; 

(2) General obligations of any State or 

any political subdivision of a State; 

(3) Interest bearing accounts or 

certificates of deposit of financial 

institutions that are members of the 

Federal Reserve System; 

(4) Obligations fully guaranteed as to 

principal interest by the United States; 

or 

(5) Other investments as authorized 

by the Secretary. 

§ 1222.51 Financial statements. 

(a) The Board shall prepare and 

submit financial statements to the 

Department on a quarterly basis, or at 

any other time as requested by the 

Secretary. Each such financial statement 

shall include, but not be limited to, a 

balance sheet, income statement, and 

expense budget. The expense budget 

shall show expenditures during the time 

period covered by the report, year-todate expenditures, and the unexpended 

budget. 

(b) Each financial statement shall be 

submitted to the Department within 30 

calendar days after the end of the time 

period to which it applies. 

(c) The Board shall submit to the 

Department an annual financial 

statement within 90 calendar days after 

the end of the fiscal year to which it 

applies. 

§ 1222.52 Assessments. 

(a) The Board’s programs and 

expenses shall be paid by assessments 

on manufacturers and importers, other 

income of the Board, and other funds 

available to the Board. 

(b) Subject to the exemptions 

specified in § 1222.53, each 

manufacturer and importer shall pay an 

assessment to the Board in the amount 

of 35 cents per short ton or its 

equivalent manufactured and imported. 

The assessment shall be on the roll of 

paper and paper-based packaging 

manufactured or imported, except that 

the assessment for cut-size printing and 

writing paper imported or made by 

domestic manufacturers prior to leaving 

the manufacturer’s mill shall be on the 

cut-size paper. 

(c) At least 24 months after the Order 

becomes effective and periodically 

thereafter, the Board shall review and 

may recommend to the Secretary, upon 

an affirmative vote of at least two-thirds 

of the Board, a change in the assessment 

rate. A change in the assessment rate is 

subject to rulemaking by the Secretary. 

(d) Domestic manufacturers shall 

remit to the Board the amount due no 

later than the 30th calendar day of the 

month following the end of the quarter 

in which the paper and paper-based 

packaging was manufactured. 

(e) Each importer of paper and paperbased packaging shall pay through 

Customs to the Board an assessment on 

the paper and paper-based packaging 

imported into the United States 

identified in the Harmonized Tariff 

Schedule of the United States (HTSUS) 

numbers listed in the table below. 

Paper and paper-based 

packaging 

Assessment 

$/kg 

4802.54.1000 ........................ $.000386 

4802.54.3100 ........................ .000386 

4802.54.5000 ........................ .000386 

4802.54.6100 ........................ .000386 

4802.55.1000 ........................ .000386 

4802.55.2000 ........................ .000386 

4802.55.4000 ........................ .000386 

4802.55.6000 ........................ .000386 

4802.55.7020 ........................ .000386 

4802.55.7040 ........................ .000386 

4802.56.1000 ........................ .000386 

4802.56.2000 ........................ .000386 

4802.56.4000 ........................ .000386 

4802.56.6000 ........................ .000386 

4802.56.70 ............................ .000386 

4802.57.1000 ........................ .000386 

4802.57.2000 ........................ .000386 

4802.57.4000 ........................ .000386 

4802.58.1000 ........................ .000386 

4802.58.20 ............................ .000386 

4802.58.5000 ........................ .000386 

4802.58.60 ............................ .000386 

4802.61.1000 ........................ .000386 

4802.61.2000 ........................ .000386 

4802.61.30 ............................ .000386 

4802.61.5000 ........................ .000386 

4802.61.60 ............................ .000386 

4802.62.1000 ........................ .000386 

4802.62.2000 ........................ .000386 

4802.62.3000 ........................ .000386 

Paper and paper-based 

packaging 

Assessment 

$/kg 

4802.62.5000 ........................ .000386 

4802.62.60 ............................ .000386 

4802.69 ................................. .000386 

4804.11.0000 ........................ .000386 

4804.19.0000 ........................ .000386 

4804.21.0000 ........................ .000386 

4804.29.0000 ........................ .000386 

4804.31.40 ............................ .000386 

4804.31.6000 ........................ .000386 

4804.39.4020 ........................ .000386 

4804.39.4049 ........................ .000386 

4804.39.60 ............................ .000386 

4804.41.2000 ........................ .000386 

4804.41.4000 ........................ .000386 

4804.42.00 ............................ .000386 

4804.49.0000 ........................ .000386 

4804.51.0000 ........................ .000386 

4804.52.00 ............................ .000386 

4804.59.0000 ........................ .000386 

4805.11.0000 ........................ .000386 

4805.12 ................................. .000386 

4805.19 ................................. .000386 

4805.24 ................................. .000386 

4805.25.0000 ........................ .000386 

4805.91.1010 ........................ .000386 

4805.91.9000 ........................ .000386 

4805.92.4010 ........................ .000386 

4805.92.4030 ........................ .000386 

4805.93.4010 ........................ .000386 

4805.93.4030 ........................ .000386 

4805.93.4050 ........................ .000386 

4805.93.4060 ........................ .000386 

4807.00.9100 ........................ .000386 

4807.00.9400 ........................ .000386 

4810.13.11 ............................ .000386 

4810.13.1900 ........................ .000386 

4810.13.20 ............................ .000386 

4810.13.5000 ........................ .000386 

4810.13.6000 ........................ .000386 

4810.13.70 ............................ .000386 

4810.14.11 ............................ .000386 

4810.14.1900 ........................ .000386 

4810.14.20 ............................ .000386 

4810.14.5000 ........................ .000386 

4810.14.6000 ........................ .000386 

4810.14.70 ............................ .000386 

4810.19.1100 ........................ .000386 

4810.19.1900 ........................ .000386 

4810.19.20 ............................ .000386 

4810.22.1000 ........................ .000386 

4810.22.50 ............................ .000386 

4810.22.6000 ........................ .000386 

4810.22.70 ............................ .000386 

4810.29.10 ............................ .000386 

4810.29.5000 ........................ .000386 

4810.29.6000 ........................ .000386 

4810.29.70 ............................ .000386 

4810.31.1020 ........................ .000386 

4810.31.1040 ........................ .000386 

4810.31.3000 ........................ .000386 

4810.31.6500 ........................ .000386 

4810.32.10 ............................ .000386 

4810.32.3000 ........................ .000386 

4810.32.6500 ........................ .000386 

4810.39.1200 ........................ .000386 

4810.39.1400 ........................ .000386 

4810.39.3000 ........................ .000386 

4810.39.6500 ........................ .000386 

4810.92.12 ............................ .000386 

4810.92.65 ............................ .000386 

4810.99.1050 ........................ .000386 

4810.99.6500 ........................ .000386 

4811.51.2010 ........................ .000386 

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Paper and paper-based 

packaging 

Assessment 

$/kg 

4811.51.2020 ........................ .000386 

4811.51.2030 ........................ .000386 

4811.59.4020 ........................ .000386 

4811.90.8030 ........................ .000386 

(f) If Customs does not collect an 

assessment from an importer, the 

importer is responsible for paying the 

assessment directly to the Board within 

30 calendar days after the end of the 

quarter in which the paper and paperbased packaging was imported. 

(g) When a manufacturer or importer 

fails to pay the assessment within 60 

calendar days of the date it is due, the 

Board may impose a late payment 

charge and interest. The late payment 

charge and rate of interest shall be 

prescribed in regulations issued by the 

Secretary. All late assessments shall be 

subject to the specified late payment 

charge and interest. Persons failing to 

remit total assessments due in a timely 

manner may also be subject to actions 

under federal debt collection 

procedures. 

(h) The Board may accept advance 

payment of assessments from any 

manufacturer or importer that will be 

credited toward any amount for which 

that person may become liable. The 

Board may not pay interest on any 

advance payment. 

(i) If the Board is not in place by the 

date the first assessments are to be 

collected, the Secretary shall receive 

assessments and shall pay such 

assessments and any interest earned to 

the Board when it is formed. 

§ 1222.53 Exemption from assessment. 

(a) Minimum quantity exemption. (1) 

Manufacturers that manufacture less 

than 100,000 short tons of paper and 

paper-based packaging in a marketing 

year are exempt from paying 

assessments. Such manufacturers must 

apply to the Board, on a form provided 

by the Board, for a certificate of 

exemption prior to the start of the 

marketing year. This is an annual 

exemption and manufacturers must 

reapply each year. Such manufacturers 

shall certify that they will manufacture 

less than 100,000 short tons of paper 

and paper-based packaging during the 

marketing year for which the exemption 

is claimed. Upon receipt of an 

application for exemption, the Board 

shall determine whether an exemption 

may be granted. The Board may request 

past manufacturing data to support the 

exemption request. The Board will 

issue, if deemed appropriate, a 

certificate of exemption to the eligible 

manufacturer. It is the responsibility of 

the manufacturer to retain a copy of the 

certificate of exemption. 

(2) Importers that import into the 

United States less than 100,000 short 

tons of paper and paper-based 

packaging in a marketing year are 

exempt from paying assessments. This 

is an annual exemption and importers 

must qualify each year. 

(i) Importers that imported less than 

100,000 short tons of paper and paperbased packaging during the prior 

marketing year shall automatically be 

considered exempt during the upcoming 

marketing year. Customs data will be 

reviewed to verify applicable importers. 

(ii) Importers that imported more than 

100,000 short tons of paper and paperbased packaging during the prior 

marketing year, but believe and can 

document that they will import less 

than 100,000 short tons of paper and 

paper-based packaging during the 

upcoming marketing year, may apply to 

the Board, on a form provided by the 

Board, for a certificate of exemption 

prior to the start of the fiscal year. Such 

importers shall certify that they will 

import less than 100,000 short tons of 

paper and paper-based packaging during 

the marketing year for which the 

exemption is claimed. Upon receipt of 

an application for exemption, the Board 

shall determine whether an exemption 

may be granted. The Board may request 

past import data and other 

documentation to support the 

exemption request. The Board will 

issue, if deemed appropriate, a 

certificate of exemption to the eligible 

importer. It is the responsibility of the 

importer to retain a copy of the 

certificate of exemption. 

(iii) The Board shall refund such 

importers considered exempt their 

assessments as collected by Customs no 

later than 60 calendar days after receipt 

of such assessments by the Board. The 

Board will stop refund of assessments to 

such importers who during the 

marketing year import more than 

100,000 short tons of paper and paper 

based packaging. These importers will 

be notified accordingly. No interest 

shall be paid on the assessments 

collected by Customs or the Board. 

(3) Manufacturers that did not apply 

to the Board for an exemption and that 

manufactured less than 100,000 short 

tons of paper and paper-based 

packaging during the marketing year 

shall automatically receive a refund 

from the Board for the applicable 

assessments within 30 calendar days 

after the end of the marketing year. 

Board staff shall determine the 

assessments paid and refund the 

amount due to the manufacturer 

accordingly. 

(4) Importers that did not apply to the 

Board for an exemption, imported more 

than 100,000 short tons of paper and 

paper-based packaging during the prior 

marketing year, and that imported less 

than 100,000 short tons of paper and 

paper-based packaging during the 

marketing year shall automatically 

receive a refund from the Board for the 

applicable assessments within 30 

calendar days after the end of the 

marketing year. 

(5) If an entity is a manufacturer and 

an importer, such entity’s combined 

quantity of paper and paper-based 

packaging manufactured and imported 

during a marketing year shall count 

towards the 100,000 short tonexemption. 

(6) Manufacturers and importers that 

received an exemption certificate or an 

automatic exemption from the Board but 

manufactured or imported 100,000 short 

tons or more of paper and paper-based 

packaging during the marketing year 

shall pay the Board the applicable 

assessments owed on the quantity 

manufactured or imported within 30 

calendar days after the end of the 

marketing year and submit any 

necessary reports to the Board pursuant 

to § 1222.70. 

(7) The Board may develop additional 

procedures to administer this exemption 

as appropriate. Such procedures shall be 

implemented through rulemaking by the 

Secretary. 

(b) Organic. (1) Organic Act means 

section 2103 of the Organic Foods 

Production Act of 1990 (7 U.S.C. 6501– 

6522). 

(2) A manufacturer who operates 

under an approved National Organic 

Program (NOP) (7 CFR part 205) system 

plan, only manufactures paper and 

paper-based packaging that is eligible to 

be labeled as 100 percent organic under 

the NOP and is not a split operation 

shall be exempt from payment of 

assessments. To obtain an organic 

exemption, an eligible manufacturer 

shall submit a request for exemption to 

the Board, on a form provided by the 

Board, at any time initially and annually 

thereafter on or before the start of the 

fiscal year as long as such manufacturer 

continues to be eligible for the 

exemption. The request shall include 

the following: The manufacturer’s name 

and address; a copy of the organic 

operation certificate provided by a 

USDA-accredited certifying agent as 

defined in the Organic Act, a signed 

certification that the applicant meets all 

of the requirements specified for an 

assessment exemption, and such other 

information as may be required by the 

Board and with the approval of the 

Secretary. The Board shall have 30 

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calendar days to approve the exemption 

request. If the exemption is not granted, 

the Board will notify the applicant and 

provide reasons for the denial within 

the same time frame. 

(3) An importer who imports only 

paper and paper-based packaging that is 

eligible to be labeled as 100 percent 

organic under the NOP and is not a split 

operation shall be exempt from the 

payment of assessments. To obtain an 

organic exemption, an eligible importer 

must submit documentation to the 

Board and request an exemption from 

assessment on 100 percent of organic 

paper and paper-based packaging, on a 

form provided by the Board, at any time 

initially and annually thereafter on or 

before the beginning of the fiscal year as 

long as the importer continues to be 

eligible for the exemption. This 

documentation shall include the same 

information as required by 

manufacturers in paragraph (b)(2) of this 

section. If the importer complies with 

the requirements of this section, the 

Board will grant the exemption and 

issue a Certificate of Exemption to the 

importer. The Board will also issue the 

importer a 9-digit alphanumeric number 

valid for 1 year from the date of issue. 

This alphanumeric number should be 

entered by the importer to Customs at 

entry summary. Any line item entry of 

100 percent organic paper and paperbased packaging bearing this 

alphanumeric number assigned by the 

Board will not be subject to 

assessments. 

(4) Importers who are exempt from 

assessment in paragraph (d)(3) of this 

section shall also be eligible for 

reimbursement of assessments collected 

by Customs and may apply to the Board 

for a reimbursement. The importer 

would be required to submit satisfactory 

proof to the Board that the importer 

paid the assessment on exempt organic 

products. 

(5) The exemption will apply 

immediately following the issuance of 

the exemption certificate. 

Promotion, Research and Information 

§ 1222.60 Programs, plans and projects. 

(a) The Board shall develop and 

submit to the Secretary for approval 

programs, plans and projects authorized 

by this subpart. Such programs, plans 

and projects shall provide for 

promotion, research, information and 

other activities including consumer and 

industry information and advertising. 

(b) No program, plan or project shall 

be implemented prior to its approval by 

the Secretary. Once a program, plan or 

project is so approved, the Board shall 

take appropriate steps to implement it. 

(c) The Board must evaluate each 

program, plan and project authorized 

under this subpart to ensure that it 

contributes to an effective and 

coordinated program of research, 

promotion and information. The Board 

must submit the evaluations to the 

Secretary. If the Board finds that a 

program, plan or project does not 

contribute to an effective program of 

promotion, research, or information, 

then the Board shall terminate such 

program, plan or project. 

§ 1222.61 Independent evaluation. 

At least once every five years, the 

Board shall authorize and fund from 

funds otherwise available to the Board, 

an independent evaluation of the 

effectiveness of the Order and the 

programs conducted by the Board 

pursuant to the Act. The Board shall 

submit to the Secretary, and make 

available to the public, the results of 

each periodic independent evaluation 

conducted under this paragraph. 

§ 1222.62 Patents, copyrights, trademarks, 

inventions, product formulations, and 

publications. 

Any patents, copyrights, trademarks, 

inventions, product formulations, and 

publications developed through the use 

of funds received by the Board under 

this subpart shall be the property of the 

U.S. Government, as represented by the 

Board, and shall along with any rents, 

royalties, residual payments, or other 

income from the rental, sales, leasing, 

franchising, or other uses of such 

patents, copyrights, trademarks, 

inventions, product formulations, or 

publications, inure to the benefit of the 

Board, shall be considered income 

subject to the same fiscal, budget, and 

audit controls as other funds of the 

Board, and may be licensed subject to 

approval by the Secretary. Upon 

termination of this subpart, § 1222.83 

shall apply to determine disposition of 

all such property. 

Reports, Books, and Records 

§ 1222.70 Reports. 

(a) Manufacturers and importers will 

be required to provide periodically to 

the Board such information as the 

Board, with the approval of the 

Secretary, may require. Such 

information may include, but not be 

limited to: 

(1) For manufacturers: 

(i) The name, address and telephone 

number of the manufacturer; and 

(ii) The quantity of paper and paperbased packaging manufactured by type. 

(2) For importers: 

(i) The name, address and telephone 

number of the importer; 

(ii) The quantity of paper and paperbased packaging imported by type; and 

(iii) The country of export. 

(b) For manufacturers, such 

information shall be reported to the 

Board no later than the 30th calendar 

day of the month following the end of 

the quarter in which the paper and 

paper-based packaging was 

manufactured and shall accompany the 

collected payment of assessments as 

specified in § 1222.52. First quarter data 

(January–March) shall be reported to the 

Board no later than the 30th calendar 

day of April; second quarter data 

(April–June) shall be reported no later 

than the 30th calendar day of July; third 

quarter data (July–September) shall be 

reported no later than the 30th calendar 

day of October; and fourth quarter data 

(October–December) shall be reported 

no later than the 30th calendar day of 

January of the following marketing year. 

(c) For importers who pay their 

assessments directly to the Board, such 

information shall accompany the 

payment of collected assessments 

within 30 calendar days after the end of 

the quarter in which the paper and 

paper-based packaging was imported 

specified in § 1222.52. 

§ 1222.71 Books and records. 

Each manufacturer and importer shall 

maintain any books and records 

necessary to carry out the provisions of 

this subpart and regulations issued 

thereunder, including such records as 

are necessary to verify any required 

reports. Such books and records must be 

made available during normal business 

hours for inspection by the Board’s or 

Secretary’s employees or agents. 

Manufacturers and importers must 

maintain the books and records for two 

years beyond the fiscal year to which 

they apply. 

§ 1222.72 Confidential treatment. 

All information obtained from books, 

records, or reports under the Act, this 

subpart and the regulations issued 

thereunder shall be kept confidential by 

all persons, including all employees and 

former employees of the Board, all 

officers and employees and former 

officers and employees of contracting 

and subcontracting agencies or agreeing 

parties having access to such 

information. Such information shall not 

be available to Board members or 

manufacturers and importers. Only 

those persons having a specific need for 

such information solely to effectively 

administer the provisions of this subpart 

shall have access to such information. 

Only such information so obtained as 

the Secretary deems relevant shall be 

disclosed by them, and then only in a 

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judicial proceeding or administrative 

hearing brought at the direction, or at 

the request, of the Secretary, or to which 

the Secretary or any officer of the 

United States is a party, and involving 

this subpart. Nothing in this section 

shall be deemed to prohibit: 

(a) The issuance of general statements 

based upon the reports of the number of 

persons subject to this subpart or 

statistical data collected therefrom, 

which statements do not identify the 

information furnished by any person; 

and 

(b) The publication, by direction of 

the Secretary, of the name of any person 

who has been adjudged to have violated 

this part, together with a statement of 

the particular provisions of this part 

violated by such person. 

Miscellaneous 

§ 1222.80 Right of the Secretary. 

All fiscal matters, programs, plans or 

projects, contracts, rules or regulations, 

reports, or other substantive actions 

proposed and prepared by the Board 

shall be submitted to the Secretary for 

approval. 

§ 1222.81 Referenda. 

(a) Initial referendum. The Order shall 

not become effective unless the Order is 

approved by a majority of manufacturers 

and importers voting in the referendum 

who also represent a majority of the 

volume of paper and paper-based 

packaging represented in the 

referendum and who, during a 

representative period determined by the 

Secretary, have been engaged in the 

manufacturing or importation of paper 

and paper-based packaging. A single 

entity who domestically manufactures 

and imports paper and paper-based 

packaging may cast one vote in the 

referendum. 

(b) Subsequent referenda. The 

Secretary shall conduct subsequent 

referenda: 

(1) For the purpose of ascertaining 

whether manufacturers and importers 

favor the amendment, continuation, 

suspension, or termination of the Order; 

(2) Not later than seven years after 

this Order becomes effective and every 

seven years thereafter, to determine 

whether manufacturers and importers 

favor the continuation of the Order. The 

Order shall continue if it is favored by 

a majority of manufacturers and 

importers voting in the referendum who 

also represent a majority of the volume 

of paper and paper-based packaging 

represented in the referendum and who, 

during a representative period 

determined by the Secretary, have been 

engaged in the manufacturing or 

importation of paper and paper-based 

packaging; 

(3) At the request of the Board 

established in this Order; 

(4) At the request of 10 percent or 

more of the number of persons eligible 

to vote in a referendum as set forth 

under the Order; or 

(5) At any time as determined by the 

Secretary. 

§ 1222.82 Suspension or termination. 

(a) The Secretary shall suspend or 

terminate this part or subpart or a 

provision thereof, if the Secretary finds 

that this part or subpart or a provision 

thereof obstructs or does not tend to 

effectuate the purposes of the Act, or if 

the Secretary determines that this 

subpart or a provision thereof is not 

favored by persons voting in a 

referendum conducted pursuant to the 

Act. 

(b) The Secretary shall suspend or 

terminate this subpart at the end of the 

fiscal year whenever the Secretary 

determines that its suspension or 

termination is favored by a majority of 

manufacturers and importers voting in 

the referendum who also represent a 

majority of the volume represented in 

the referendum who, during a 

representative period determined by the 

Secretary, have been engaged in the 

manufacturing or importation of paper 

and paper-based packaging. 

(c) If, as a result of a referendum the 

Secretary determines that this subpart is 

not approved, the Secretary shall: 

(1) Not later than one hundred and 

eighty (180) calendar days after making 

the determination, suspend or 

terminate, as the case may be, the 

collection of assessments under this 

subpart. 

(2) As soon as practical, suspend or 

terminate, as the case may be, activities 

under this subpart in an orderly 

manner. 

§ 1222.83 Proceedings after termination. 

(a) Upon termination of this subpart, 

the Board shall recommend to the 

Secretary up to five of its members to 

serve as trustees for the purpose of 

liquidating the Board’s affairs. Such 

persons, upon designation by the 

Secretary, shall become trustees of all of 

the funds and property then in the 

possession or under control of the 

Board, including claims for any funds 

unpaid or property not delivered, or any 

other existing claim at the time of such 

termination. 

(b) The said trustees shall: 

(1) Continue in such capacity until 

discharged by the Secretary; 

(2) Carry out the obligations of the 

Board under any contracts or 

agreements entered into pursuant to the 

Order; 

(3) From time to time account for all 

receipts and disbursements and deliver 

all property on hand, together with all 

books and records of the Board and 

trustees, to such person or person as the 

Secretary directs; and 

(4) Upon request of the Secretary 

execute such assignments or other 

instruments necessary or appropriate to 

vest in such persons title and right to all 

of the funds, property, and claims 

vested in the Board or the trustees 

pursuant to the Order. 

(c) Any person to whom funds, 

property, or claims have been 

transferred or delivered pursuant to the 

Order shall be subject to the same 

obligations imposed upon the Board and 

upon the trustees. 

(d) Any residual funds not required to 

defray the necessary expenses of 

liquidation shall be turned over to the 

Secretary to be disposed of, to the extent 

practical, to one or more paper and 

paper-based packaging organizations in 

the United States whose mission is 

generic promotion, research, and 

information programs. 

§ 1222.84 Effect of termination or 

amendment. 

Unless otherwise expressly provided 

by the Secretary, the termination of this 

subpart or of any regulation issued 

pursuant thereto, or the issuance of any 

amendment to either thereof, shall not: 

(a) Affect or waive any right, duty, 

obligation, or liability which shall have 

arisen or which may thereafter arise in 

connection with any provision of this 

subpart or any regulation issued 

thereunder; 

(b) Release or extinguish any violation 

of this subpart or any regulation issued 

thereunder; or 

(c) Affect or impair any rights or 

remedies of the United States, or of the 

Secretary or of any other persons, with 

respect to any such violation. 

§ 1222.85 Personal liability. 

No member or employee of the Board 

shall be held personally responsible, 

either individually or jointly with 

others, in any way whatsoever, to any 

person for errors in judgment, mistakes, 

or other acts, either of commission or 

omission, as such member or employee, 

except for acts of dishonesty or willful 

misconduct. 

§ 1222.86 Separability. 

If any provision of this subpart is 

declared invalid or the applicability of 

it to any person or circumstances is held 

invalid, the validity of the remainder of 

this subpart, or the applicability thereof 

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to other persons or circumstances shall 

not be affected thereby. 

§ 1222.87 Amendments. 

Amendments to this subpart may be 

proposed from time to time by the Board 

or any interested person affected by the 

provisions of the Act, including the 

Secretary. 

§ 1222.88 OMB control numbers. 

The control numbers assigned to the 

information collection requirements by 

the Office of Management and Budget 

pursuant to the Paperwork Reduction 

Act of 1995, 44 U.S.C. Chapter 35, are 

OMB control number 0505–0001 (Board 

nominee background statement) and 

OMB control number 0581–0281. 

Dated: September 10, 2013. 

Rex A. Barnes, 

Associate Administrator. 

[FR Doc. 2013–22330 Filed 9–13–13; 8:45 am] 

BILLING CODE 3410–02–P 

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