Vol. 79 Wednesday, 

No. 14 January 22, 2014 

Part III 

Department of Agriculture 

Agricultural Marketing Service 

7 CFR Part 1222 

Paper and Paper-Based Packaging Promotion, Research and Information 

Order; Final Rule 


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3696 Federal Register / Vol. 79, No. 14 / Wednesday, January 22, 2014 / Rules and Regulations 

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

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

Todd A., National Pulpwood Production, 2008, 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Part 1222 

[Document Number AMS–FV–11–0069 FR] 

RIN 0581–AD21 

Paper and Paper-Based Packaging 

Promotion, Research and Information 

Order 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Final rule. 

SUMMARY: This rule establishes a Paper 

and Paper-Based Packaging Promotion, 

Research and Information Order (Order). 

The purpose of the program is to 

maintain and expand markets for paper 

and paper-based packaging. The 

program will be financed by an 

assessment on paper and paper-based 

packaging manufacturers (domestic 

producers) and importers and 

administered by a board of industry 

members appointed by the Secretary of 

Agriculture (Secretary). The assessment 

rate will initially be $0.35 per short ton. 

The U.S. Department of Agriculture 

(Department or USDA) conducted a 

referendum among eligible manfacturers 

and importers from October 28 through 

November 8, 2013. Eighty-five percent 

of those voting in the referendum 

representing 95 percent of the volume of 

paper and paper-based packaging 

represented in the referendum favored 

implementation of the program. 

DATES: Effective date: January 23, 2014. 

Applicability date: Collection of 

assessments (sections 1222.52 and 

1222.53) and appropriate reporting and 

recordkeeping (sections 1222.70 and 

1222.71) will begin March 1, 2014. 

FOR FURTHER INFORMATION CONTACT: 

Kimberly Spriggs, 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.Spriggs@

ams.usda.gov. 

SUPPLEMENTARY INFORMATION: This 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 were addressed 

in a second proposed rule and 

referendum order that was published in 

the Federal Register on September 16, 

2013 (78 FR 57006). A final rule 

prescribing referendum procedures was 

published in the Federal Register on 

September 16, 2013 (78 FR 56817). 

Background 

This rule establishes an industryfunded research, promotion and 

information program for paper and 

paper-based packaging. The program 

will 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 will be financed by an 

assessment on U.S. manufacturers and 

importers of paper and paper-based 

packaging and administered by a board 

of industry members appointed by the 

Secretary. The assessment rate will 

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 will be exempt from the 

payment of assessments. The purpose of 

the program is to maintain and expand 

markets for paper and paper-based 

packaging. 

A proposal for a promotion program 

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 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 

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 


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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. 

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 are 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 is covered under the program. 

Converting operations (and thus 

converted products) are not 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 will, 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 

Order covers 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 will 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 are not 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 

USDA concurs that the newsprint 

segment of the industry are not 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 

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 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. 


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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. 

Need for a Program 

According to AF&PA data, markets for 

paper and paper-based packaging that 

will 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. 

BILLING CODE 3410–02–P 

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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Federal Register / Vol. 79, No. 14 / Wednesday, January 22, 2014 / Rules and Regulations 3699 

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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3700 Federal Register / Vol. 79, No. 14 / Wednesday, January 22, 2014 / Rules and Regulations 

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 will generate about $25 

million annually with a unified message 

that crosses all segments will benefit the 

entire industry. 

Provisions of Program 

Sections 1222.1 through 1222.29 of 

the Order define certain terms that will 

be used throughout the Order. Several of 

the terms are common to all research 

and promotion programs authorized 

under the 1996 Act while other terms 

are specific to the paper and paperbased packaging Order. 


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Federal Register / Vol. 79, No. 14 / Wednesday, January 22, 2014 / Rules and Regulations 3701 

Sections 1222.40 through 1222.47 of 

the Order detail the establishment and 

membership of the Paper and PaperBased Packaging Board, nominations 

and appointments, the term of office, 

removal and vacancies, procedure, 

reimbursement and attendance, powers 

and duties, and prohibited activities. 

Sections 1222.50 through 1222.53 of 

the Order detail requirements regarding 

the Board’s budget and expenses, 

financial statements, assessments, and 

exemption from assessments. The 

Board’s programs and expenses will be 

funded through assessments on U.S. 

manufacturers and importers, other 

income, and other funds available to the 

Board. The Order provides for an initial 

assessment rate of $0.35 per short ton of 

paper and paper-based packaging 

domestically manufactured or imported. 

Domestic manufacturers will pay 

assessments based on the quantity of 

paper and paper-based packaging 

manufactured or produced; the 

assessment is 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 is on the cut-size 

paper. Importers will 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 will review the assessment rate 

and, if appropriate, recommend a 

change in the rate. At least two-thirds of 

the Board members must favor a change 

in the assessment rate. Any change in 

the assessment rate is subject to 

rulemaking by the Secretary. 

Domestic manufacturers must 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 paper-based 

packaging was manufactured. Importer 

assessments will be collected through 

Customs. If Customs does not collect the 

assessment from an importer, then 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. 

The Order provides 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 

must be prescribed in the Order’s 

regulations issued by the Secretary. 

The Order provides for two 

exemptions. First, U.S. manufacturers 

and importers who domestically 

produce or import less than 100,000 

short tons during a marketing year are 

exempt from paying assessments. 

Manufacturers must apply to the Board 

for an exemption prior to the start of the 

fiscal year. This is an annual exemption; 

manufacturers must reapply each year. 

The Board will then issue, if deemed 

appropriate, a certificate of exemption 

to the eligible manufacturer. Once 

approved, domestic manufacturers will 

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 will automatically be 

considered exempt for the fiscal year 

that assessments are due, and will not 

be required to apply to the Board for a 

certificate of exemption. Customs data 

will 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 may apply to the Board for 

a certificate of exemption. The Board 

will then issue, if deemed appropriate, 

a certificate of exemption to the eligible 

importer. 

Importers who are exempt will 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 

will 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 

will receive a refund from the Board for 

the applicable assessments within 30 

calendar days after the end of the fiscal 

year. The Board will 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, will 

receive a refund from the Board for the 

applicable assessments within 30 

calendar days after the end of the fiscal 

year. The Board will determine the 

assessments paid and refund the 

importer 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 must 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 second exemption under the 

Order is for organic paper and paperbased packaging. 

Sections 1222.60 through 1222.62 of 

the Order detail requirements regarding 

promotion, research and information 

programs, plans and projects authorized 

under the Order. 

Sections 1222.70 through 1222.72 

specify the reporting and recordkeeping 

requirements under the Order as well as 

requirements regarding confidentiality 

of information. 

Section 1222.81(a) of the Order 

specifies that the program will 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. As previously mentioned, 

in a referendum held from October 28 

through November 8, 2013, 85 percent 

of those voting in the referendum 

representing 95 percent of the volume of 

paper and paper-based packaging 

represented in the referendum favored 

implementation of the program. 

Section 1222.81(b) of the Order 

specifies criteria for subsequent 

referenda. Under the Order, a 

referendum may be held to ascertain 

whether the program should continue, 

be amended, or be terminated. 

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 Office of 

Management and Budget (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 


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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 

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 will 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 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. 

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 

supplemented by Executive Order 

13563. The OMB 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 will 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 can 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 will 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 program will be funded by 

industry through an assessment. The 

program will 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 

will 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 

program, the percentage revenue 

represented by the assessment rate 

should 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), the Agricultural Marketing Service 

(AMS) is required to examine the 

impact of this 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 

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 


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short tons or more (the Order’s 

exemption threshold) imported less 

than $7.0 million worth of paper and 

paper-based packaging (19 importers). 

Therefore, none of the 19 importers to 

be covered under the 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 rule establishes an industryfunded research, promotion, and 

information program for paper and 

paper-based packaging. The program 

will be financed by an assessment on 

domestic manufacturers and importers 

and administered by a board of industry 

members appointed by the Secretary. 

The initial assessment rate is $0.35 per 

short ton. Entities that domestically 

manufacture or import less than 100,000 

short tons per marketing year are 

exempt from the payment of 

assessments. In addition domestic 

manufacturers and importers who 

qualify as 100 percent organic under the 

NOP may submit an ‘‘Organic 

Exemption Form’’ to the Board and 

request an exemption from assessments. 

The purpose of the program is to 

maintain and expand markets for paper 

and paper-based packaging. A 

referendum was held among eligible 

manufacturers and importers from 

October 28 through November 8, 2013, 

to determine whether they favor 

implementation of the program prior to 

it going into effect. Eighty-five percent 

of those voting in the referendum, 

representing 95 percent of the volume of 

paper and paper-based packaging 

represented in the referendum, favored 

implementation of the program. The 

program is authorized under the 1996 

Act. 

The Order provides for two 

exemptions. First, domestic 

manufacturers and importers who 

qualify as 100 percent organic under the 

NOP may 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 are 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 will thus be exempt from 

paying assessments under the 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 will also be 

exempt from paying assessments. Thus, 

about 51 domestic manufacturers and 19 

importers will 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 will be collected in 

assessments. Of that $25.4 million, 92.5 

percent ($23.5 million) will be paid by 

domestic manufacturers and 7.5 percent 

($1.9 million) will be paid by importers. 

Regarding alternatives, the Panel 

considered various options to the 

program’s coverage, the assessment rate 

and exemption threshold. The Panel 

considered the merits of assessing all 

U.S. production of the four types of 

paper and paper-based 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 ton-exemption threshold. 

APPROXIMATE ASSESSMENT INCOME AT VARIOUS ASSESSMENT RATES

Approximate assessment income 

(million) 

U.S. production and imports 

with a 100,000 short 

ton-exemption 

(72.5 million short tons) 

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

20.0 ............................................................................................................................................................................ 0.276 

25.4 ............................................................................................................................................................................ 0.350 

30.0 ............................................................................................................................................................................ 0.413 

After much consideration, the Panel 

concluded and the Department concurs 

that an exemption threshold of 100,000 

short tons is appropriate with imports 

covered under the program as well. The 

Panel concluded and the Department 

concurs that this exemption level will 

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 imposes additional 

reporting and recordkeeping burdens on 

manufacturers and importers of paper 

and paper-based packaging. 

Manufacturers and importers interested 

in serving on the Board will 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 

may also submit a background statement 

outlining their qualifications to serve on 

the Board. Except for the initial Board 

nominations, manufacturers and 

importers will have the opportunity to 

cast a ballot and vote for candidates to 

serve on the Board. Manufacturer and 

importer nominees to the Board must 

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 

can submit a request to the Board for an 

exemption from paying assessments on 

this volume. Manufacturers and 

importers will also be asked to submit 

a report to the Board regarding their 

production/imports. Manufacturers and 

importers who qualify as 100 percent 

organic under the NOP may submit a 

request to the Board for an exemption 

from assessments. Importers may also 

request a refund of any assessments 

paid to Customs. These forms were 

submitted to the OMB for approval 

under OMB Control No. 0581–0281. 

Specific burdens for these forms are 

detailed later in this document in the 

section titled ‘‘Paperwork Reduction 

Act’’. 

Finally, manufacturers and importers 

who participated in the referendum to 

vote on whether the Order should 

become effective completed a ballot for 

submission to the Secretary. The ballot 

was submitted to the OMB and 


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approved under OMB Control No. 0581– 

0282. 

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 will 

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 

will be covered by the program. Panel 

members representing 69 percent of the 

domestic production signed forms 

indicating their support for the program. 

Over the past year, the Panel, and 

AF&PA staff and industry company 

employees, on behalf of the Panel, have 

made presentations on the 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. 

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 were eligible to vote in the 

referendum. 

Civil Rights Impact Analysis 

Consideration has been given to the 

potential civil rights implications of this 

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 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 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 will 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 will not have substantial 

and direct effects on Tribal governments 

and will 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 requested approval of 

a new information collection and 

recordkeeping requirements for the 

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 

new national research and promotion 

program for the paper and paper-based 

packaging industry. The program will be 

financed by an assessment on domestic 

manufacturers and importers and 

administered by a board of industry 

members appointed by the Secretary. 

The program provides 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 was held October 28 

through November 8, 2013, among 

eligible manufacturers and importers to 

determine whether they favor 

implementation of the program prior to 

it going into effect. Eighty-five percent 

of those voting in the referendum, 

representing 95 percent of the volume 

represented in the referendum, favored 

implementation of the program. The 

purpose of the program is to maintain 

and expand markets for paper and 

paper-based 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 must 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 

may also submit a background statement 

outlining qualifications to serve on the 

Board. Except for the initial Board 

nominations, manufacturers and 

importers will have the opportunity to 

submit a ‘‘Nomination Ballot’’ to the 

Board where they will vote for 


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candidates to serve on the Board. 

Nominees must also 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 may submit a request, 

‘‘Application for Exemption from 

Assessments,’’ to the Board for an 

exemption from paying assessments. 

Manufacturers and importers must 

submit a ‘‘Production/Import Report’’ to 

the Board on a quarterly basis that 

specifies the quantity of paper and 

paper-based 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 are 

exempt from paying assessments and do 

not have to submit this report. 

Additionally, only importers who pay 

their assessments directly to the Board 

must submit this report. If the importer 

assessments are collected by Customs, 

Customs will remit the funds to the 

Board and the other information will be 

available from Customs (i.e., country of 

export, quantity imported). Finally, 

domestic manufacturers and importers 

who qualify as 100 percent organic 

under the NOP may submit an ‘‘Organic 

Exemption Form’’ to the Board and 

request an exemption from assessments. 

There will also be an additional 

burden on manufacturers and importers 

voting in referenda. The referendum 

ballot, which represents the information 

collection requirement relating to 

referenda, was addressed in a final rule 

on referendum procedures that was 

published in the Federal Register on 

September 16, 2013 (78 FR 56817). 

Information collection requirements 

that are included in this rule 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 will 

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 program, 

manufacturers and importers must pay 

assessments and file reports with and 

submit assessments to the Board 

(importers through Customs). While the 

Order imposes certain recordkeeping 

requirements on manufacturers and 

importers, information required under 

the Order can be compiled from records 

currently maintained. Such records 

must be retained for at least two years 

beyond the fiscal year of their 

applicability. 


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An estimated 2,696 respondents will 

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 Order’s provisions have been 

carefully reviewed, and every effort has 

been made to minimize any unnecessary 

recordkeeping costs or requirements. 

The forms require the minimum 

information necessary to effectively 

carry out the requirements of 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 are simple, easy to understand, 

and place as small a burden as possible 

on the person required to file the 

information. 

Collecting information quarterly 

coincides 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. 

In the January 2, 2013, proposed rule, 

comments were also invited on the 

information collection requirements 

prescribed in the Paperwork Reduction 

Act section of this rule. Specifically, 

comments were solicited on: (a) 

Whether the collection of information is 

necessary for the proper performance of 

functions of the Order and USDA’s 

oversight of the Order, including 

whether the information will have 

practical utility; (b) the accuracy of 

USDA’s estimate of the burden of the 

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. 

As previously mentioned, the 

Department conducted a referendum 

among eligible manufacturers and 

importers of paper and paper-based 

packaging from October 28 through 

November 8, 2013. Manufacturers and 

importers currently engaged in the 

business who manufactured/imported 

100,000 tons of paper and paper-based 

packaging during the representative 

period were eligible to vote. Eighty-five 

percent of those voting in the 

referendum representing 95 percent of 

the volume of paper and paper-based 

packaging represented in the 

referendum favored implementation of 

the program. 

After consideration of all relevant 

material presented, including the initial 

proposal, comments received, and the 

referendum results, it is found that the 

Paper and Paper-Based Packaging 

Promotion, Research and Information 

Order is consistent with and will 

effectuate the purposes of the 1996 Act 

Pursuant to 5 U.S.C. 553 it is found 

that good cause exists for not 

postponing the effective date of this rule 

until 30 days after publication in the 

Federal Register because 

implementation of the program is 

needed as soon as possible so that the 

first Board can be established and the 

collection of assessments can begin. 

Further, implementation of the program 

was approved in a referendum of 

domestic manufacturers and importers. 

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, Title 7, Chapter XI of the 

Code of Federal Regulations is amended 

as follows: 

Part 1222—Paper and Paper-Based 

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 part 1222 to 

read as follows: 

Subpart A—Paper and Paper-Based 

Packaging Promotion, Research and 

Information Order 

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. 

Miscellaneous 

1222.80 Right of the Secretary. 


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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. 

§ 1222.21 Promotion. 

Promotion means any action, 

including paid advertising and the 


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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 

5 U.S.C. 553 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 

5 U.S.C. 553 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) of 

this section. 

(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 section. 

§ 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: January 14, 2014. 

Rex A. Barnes, 

Associate Administrator. 

[FR Doc. 2014–01002 Filed 1–21–14; 8:45 am] 

BILLING CODE 3410–02–P 


emcdonald on DSK67QTVN1PROD with RULES2