61002 Federal Register / Vol. 75, No. 190 / Friday, October 1, 2010 / Proposed Rules 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Part 1217 

[Document Number AMS–FV–10–0015; PR– 

A1] 

RIN 0581–AD03 

Softwood Lumber Research, 

Promotion, Consumer Education and 

Industry Information Order 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Proposed rule. 

SUMMARY: This rule invites comments 

on a proposed Softwood Lumber 

Research, Promotion, Consumer 

Education and Industry Information 

Order (Order). Softwood lumber is used 

in products like flooring, siding and 

framing. The program would be 

financed by an assessment on softwood 

lumber domestic manufacturers and 

importers and would be administered 

by a board of industry members selected 

by the Secretary of Agriculture 

(Secretary). The initial assessment rate 

would be $0.35 per thousand board feet 

of softwood lumber shipped within or 

imported to the United States. The 

purpose of the program would be to 

strengthen the position of softwood 

lumber in the marketplace, maintain 

and expand markets for softwood 

lumber, and develop new uses for 

softwood lumber within the United 

States. A referendum would be held 

among eligible domestic manufacturers 

and importers to determine whether 

they favor implementation of the 

program prior to it going into effect. 

This rule also announces the 

Agricultural Marketing Service’s (AMS) 

intent to request approval by the Office 

of Management and Budget (OMB) of 

new information collection 

requirements to implement the program. 

DATES: Comments must be received by 

November 30, 2010. Pursuant to the 

Paperwork Reduction Act (PRA), 

comments on the information collection 

burden that would result from this 

proposal must be received by November 

30, 2010. 

ADDRESSES: Interested persons are 

invited to submit written comments 

concerning this proposal. Comments 

may be submitted on the Internet at: 

http://www.regulations.gov or to the 

Research and Promotion Branch, Fruit 

and Vegetable Programs, AMS, USDA, 

1400 Independence Avenue, SW., Room 

0632–S, Stop 0244, Washington, DC 

20250–0244; facsimile: (202) 205–2800. 

All comments should reference the 

docket number and the date and page 

number of this issue of the Federal 

Register and will be made available for 

public inspection, including name and 

address, if provided, in the above office 

during regular business hours or it can 

be viewed at http:// 

www.regulations.gov. 

Pursuant to the PRA, comments 

regarding the accuracy of the burden 

estimate, ways to minimize the burden, 

including the use of automated 

collection techniques or other forms of 

information technology, or any other 

aspect of this collection of information, 

should be sent to the above address. In 

addition, comments concerning the 

information collection should also be 

sent to the Desk Office for Agriculture, 

Office of Information and Regulatory 

Affairs, OMB, New Executive Office 

Building, 725 17th Street, NW., Room 

725, Washington, DC 20503. 

FOR FURTHER INFORMATION CONTACT: 

Maureen T. Pello, Marketing Specialist, 

Research and Promotion Branch, Fruit 

and Vegetable Programs, AMS, USDA, 

P.O. Box 831, Beavercreek, Oregon 

97004; telephone: (503) 632–8848; 

facsimile (503) 632–8852; or electronic 

mail: Maureen.Pello@ams.usda.gov. 

SUPPLEMENTARY INFORMATION: This rule 

is issued pursuant to the Commodity 

Promotion, Research, and Information 

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

7425). 

Executive Order 12866 

This rule has been determined to be 

not significant for purposes of Executive 

Order 12866 and therefore has not been 

reviewed by the OMB. 

Executive Order 12988 

This rule has been reviewed under 

Executive Order 12988, Civil Justice 

Reform. It is not intended to have 

retroactive effect. Section 524 of the 

1996 Act 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 the U.S. 

Department of Agriculture (USDA) 

stating that an order, any provision of an 

order, or any obligation imposed in 

connection with an order, is not 

established in accordance with the law, 

and request a modification of an order 

or an exemption from an order. Any 

petition filed challenging an order, any 

provision of an order, or any obligation 

imposed in connection with an order, 

shall be filed within two years after the 

effective date of an order, provision, or 

obligation subject to challenge in the 

petition. The petitioner will have the 

opportunity for a hearing on the 

petition. Thereafter, USDA will issue a 

ruling on the petition. The 1996 Act 

provides that the district court of the 

United States for any district in which 

the petitioner resides or conducts 

business shall have the jurisdiction to 

review a final ruling on the petition, if 

the petitioner files a complaint for that 

purpose not later than 20 days after the 

date of the entry of USDA’s final ruling. 

Background 

This rule invites comments on a 

proposed industry-funded research, 

promotion, and information program for 

softwood lumber. Softwood lumber is 

used in products like flooring, siding 

and framing. The program would be 

financed by an assessment on softwood 

lumber domestic manufacturers and 

importers and would be administered 

by a board of industry members selected 

by the Secretary. The initial assessment 

rate would be $0.35 per thousand board 

feet of softwood lumber shipped within 

or imported to the United States. 

Entities that domestically ship or import 

less than 15 million board feet per fiscal 

year would be exempt from the payment 

of assessments. Additionally, no entity 

would pay assessments on the first 15 

million board feet of softwood lumber 

shipped domestically or imported 

during the year. Exports from the United 

States would also be exempt from 

assessments. The purpose of the 

program would be to strengthen the 

position of softwood lumber in the 

marketplace, maintain and expand 

markets for softwood lumber, and 

develop new uses for softwood lumber 

within the United States. 

A referendum would be held among 

eligible domestic manufacturers and 

importers to determine whether they 

favor implementation of the program 

prior to it going into effect. The proposal 

was submitted to USDA by the Blue 

Ribbon Commission (BRC), a committee 

of 21 chief executive officers and heads 

of businesses that domestically 

manufacture and import softwood 

lumber. This rule also announces AMS’s 

intent to request approval by the OMB 

of new information collection 

requirements to implement the program. 

Authority in 1996 Act 

The proposed Order is authorized 

under the 1996 Act which authorizes 

USDA to establish agricultural 

commodity research and promotion 

orders which may include a 

combination of promotion, research, 

industry information, and consumer 

information activities funded by 

mandatory assessments. These programs 


jlentini on DSKJ8SOYB1PROD with PROPOSALS2
Federal Register / Vol. 75, No. 190 / Friday, October 1, 2010 / Proposed Rules 61003 

1Spelter, H., D. McKeever, D. Toth, Profile 2009: 

Softwood Sawmills in the United States, USDA, p. 

7. 

2Micklewright, J.T., Wood preservation statistics, 

American Wood Preservers Assocation, p. 25. 

3Spelter, McKeever and Toth, Profile 2009, p. 15. 

4Western Wood Products Association, 2008 

Statistical Yearbook, p. 32. 

5U.S. Census Bureau, 2009, Construction, 

http://www.census.gov/mcd/. 

6Spelter, McKeever and Toth, Profile 2009, p. 2– 

5. 

are designed to maintain and expand 

markets and uses for agricultural 

commodities. As defined under section 

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

commodities include the products of 

forestry, which includes softwood 

lumber. 

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 

The softwood lumber industry is 

comprised of sawmills that make 

products from softwood trees. 

Softwoods include the botanical group 

of trees that have needle-like or scalelike leaves, or conifers. Softwood 

lumber includes certain products 

manufactured from softwoods (or 

coniferous trees). Softwood lumber is 

used in products like flooring, siding, 

and framing. 

Softwood lumber sizes are identified 

by the thickness and width of the board 

when it is first cut from the log. This is 

known as ‘‘rough cut’’ when the wood is 

still green and wet. Once the wood 

dries, it shrinks. After the wood dries, 

the surface of the board is smoothed to 

make the wood a uniform size. This is 

known as ‘‘planing’’ the wood. Once 

planed, the wood is considered 

finished. In the industry, the term 

nominal is used to describe the size of 

the rough cut board, prior to finishing. 

For example, a 2 x 4 board is a nominal 

size. The actual size of a 2 x 4 board is 

1.5 inches in thickness by 3.5 inches in 

width. The length of the board is 

typically the actual length. Usually 

there is a 1⁄2 inch difference in 

measurements over 2 inches and 1⁄4 inch 

difference in measurements less than 2 

inches. For purposes of the proposed 

Order and the tables in this rule, 

nominal sizes are used. One nominal 

board foot is a unit of measurement of 

softwood lumber represented by a board 

12-inches long, 12-inches wide, and 1- 

inch thick or its cubic equivalent. A 

board foot calculation for softwood 

lumber 1 inch or more in thickness is 

based on its nominal thickness and 

width by the actual length. Softwood 

lumber with a nominal thickness of less 

than 1 inch is calculated as 1 inch. 

Regional U.S. Timber Production 1

According to USDA’s Forest Service, 

the main species of softwoods in the 

southern United States are pines that 

grow fast and can be sold for lumber in 

25 to 30 years. Southern pines are often 

treated with preservatives. About a third 

of the region’s lumber is sold to treaters 

for further processing (i.e., apply 

preservatives).2

Most of the northern U.S. softwood 

lumber industry is in Maine where the 

predominant species are white spruce 

and balsam fir. These trees are typically 

used for light framing such as wall 

studs. Second growths of red pine 

planted in the 1930s and later have been 

harvested by a few firms in the lake 

States. Red pine is also easy to treat and 

much of it is processed. White pine 

trees are also prevalent in the northern 

United States. They are used for 

paneling, millwork, and joinery. 

Millwork includes woodwork that has 

been made at a mill, and joinery is the 

trade of constructing articles by joining 

together pieces of wood. 

The bulk of timber production in the 

western United States is on the coast of 

the Pacific Northwest. Douglas fir and 

hemlock trees dominate while farther 

south in northern California, redwood 

trees, suitable for outdoor structures like 

fences, siding and decks, are common. 

East of these regions, ponderosa pine 

dominates and is used for millwork and 

joinery. Northern Idaho and Montana 

contain lodgepole pine and other 

species suitable for light framing. 

U.S. Softwood Lumber Output by 

Region 3

According to USDA’s Forest Service, 

for 2007–2008, total output (production) 

of softwood lumber by U.S. sawmills 

averaged about 29.5 billion board feet 

annually. Of the 29.5 billion board feet, 

12.6 billion board feet were from the 

U.S. South, 14.4 billion board feet were 

from the U.S. West, and 2.5 billion 

board feet were from the Northeast and 

Lake States. Data for the western States 

is from the Western Wood Products 

Association 4 and data for the other two 

regions is from the U.S. Census Bureau.5

Softwood Lumber Markets 6

The residential market is the largest 

consumer of softwood lumber in the 

United States. This includes single and 

multifamily homes, mobile homes, and 

remodeling. The residential market 

accounted for 75 percent of the total 

U.S. softwood lumber market in 2006 

and 63 percent of the market in 2009. 

Table 1 below shows this data from 

2003 through 2009. 

TABLE 1—U.S. SOFTWOOD LUMBER MARKETS FROM 2003–2009 VOLUME

[Billion board feet] 

Single 

family 

homes 

Multi-family 

homes 

Mobile 

homes 

Residential remodeling Non-residential, buildings Non-residential, other Industrial and 

other Total U.S. 

2003 ......................... 20 .2 1 .7 1 .1 19 .3 3 .6 0 .6 10 .2 56 .7 

2004 ......................... 22 .2 1 .8 1 .1 20 .3 3 .9 0 .5 11 .1 60 .8 


jlentini on DSKJ8SOYB1PROD with PROPOSALS2
61004 Federal Register / Vol. 75, No. 190 / Friday, October 1, 2010 / Proposed Rules 

7Spelter, McKeever and Toth, Profile 2009, p. 15. 

8 Ibid., p. 15. 

9http://www.fas.usda.gov/gats; accessed 5/1/10. 10Spelter, McKeever and Toth, Profile 2009, p. 5– 

6. 

TABLE 1—U.S. SOFTWOOD LUMBER MARKETS FROM 2003–2009 VOLUME—Continued 

[Billion board feet] 

Single 

family 

homes 

Multi-family 

homes 

Mobile 

homes 

Residential remodeling Non-residential, buildings Non-residential, other Industrial and 

other Total U.S. 

2005 ......................... 24 .5 1 .9 1 .2 20 .9 3 .8 0 .6 11 .7 64 .6 

2006 ......................... 21 .3 1 .9 0 .9 21 .4 3 .6 0 .6 11 .3 61 .0 

2007 ......................... 14 .9 1 .7 0 .8 19 .7 4 .0 0 .6 11 .4 53 .1 

2008 ......................... 8 .4 1 .4 0 .6 17 .5 3 .9 0 .6 9 .6 42 .0 

2009 ......................... 5 .3 0 .7 0 .4 14 .2 3 .6 0 .6 7 .8 32 .6 

Shares (percent) 

2003 ......................... 36 3 2 34 6 1 18 

2004 ......................... 36 3 2 33 6 1 18 

2005 ......................... 38 3 2 32 6 1 18 

2006 ......................... 35 3 2 35 6 1 18 

2007 ......................... 28 3 1 37 8 1 21 

2008 ......................... 20 3 1 42 9 1 23 

2009 ......................... 16 2 1 44 11 2 24 

During normal economic conditions, 

single family homes comprise the 

largest share of the softwood lumber 

market in the United States. Single 

family home use rose from 20.2 billion 

board feet in 2003 to 24.5 billion board 

feet in 2005 and fell to 5.3 billion board 

feet in 2009. Single family homes 

comprised 38 percent of the market for 

softwood lumber in 2005 and 16 percent 

of the market by 2009. 

Home building is cyclical in nature 

(follows a pattern of highs and lows) as 

compared to other end uses for 

softwood lumber. Residential 

remodeling and other uses experienced 

downturns between 2006 and 2009, but 

less severe than the market for single 

family homes. Softwood lumber used 

for residential remodeling fell from 21.4 

billion board feet in 2006 to 14.2 billion 

board feet in 2009. As a percentage of 

softwood lumber market share, 

residential remodeling rose from 35 

percent in 2006 to 44 percent in 2009. 

Export Markets 7

Export markets are another outlet for 

softwood lumber. Two decades ago, U.S. 

exports were about seven times greater 

than they were in recent years, but a 

strong U.S. dollar from the mid-1990s 

onward helped to reduce exports. 

Additionally, different size and grade 

standards for softwood lumber in export 

markets complicate production when 

log sizes have to be converted from 

imperial units (feet) to metric (meters). 

Most manufacturers have thus focused 

on North American sales. However, in 

slow periods such as in recent years, 

efforts have been made to supply export 

markets to the extent possible. 

Competition 8

Softwood lumber competes with 

several alternative products. Steel and 

concrete dominate larger residential and 

nonresidential projects. Brick, concrete, 

and vinyl are often used in low-rise 

residential and nonresidential 

buildings. Within the last decade, woodplastic composite lumber has become 

popular for outdoor decking, railing, 

trim, and fencing. Other wood-based 

products such as laminated veneer are 

becoming more popular in place of 

softwood lumber. 

Imports 

According to U.S. Department of 

Commerce, Census Bureau, Foreign 

Trade Statistics data 9, imports of 

softwood lumber from 2007 through 

2009 averaged about 13 billion board 

feet annually. During those years, 

imports from Canada averaged 12 

billion board feet annually, comprising 

about 92 percent of total imports; 

imports from western Europe averaged 

434 million board feet annually, 

comprising about 3 percent of total 

imports; and imports from Chile 

averaged 255 million board feet 

annually, comprising about 2 percent of 

total imports. Imports from other 

countries accounted for the remaining 3 

percent of total imports for 2007 

through 2009. 

Price and Cost Trends 10

Prices in the lumber industry can 

change rapidly in response to shifts in 

demand or supply. Prices are set 

competitively, with many buyers and 

sellers bidding in a business that tends 

to be cyclical in nature. As shown in 

Table 2 below, revenue for the State of 

Oregon per thousand board feet was 

about $309 in 2003, rose to $420 in 

2004, and fell to $219 in 2008. In 

comparison, revenue for the State of 

Georgia per thousand board feet was 

about $323 in 2003, rose to $418 in 

2005, and fell to $262 in 2008. 

TABLE 2—TYPICAL SAWMILL OPERATING COSTS 2003–2008 

Oregon Georgia 

Costs 

($ per thousand 

board feet) 

Revenue 

($ per thousand 

board feet) 

Costs 

($ per thousand 

board feet) 

Revenue 

($ per thousand 

board feet) 

2003 ......................................................................................... 295 309 311 323 

2004 ......................................................................................... 330 420 335 378 

2005 ......................................................................................... 349 370 349 418 

2006 ......................................................................................... 335 316 349 330 


jlentini on DSKJ8SOYB1PROD with PROPOSALS2
Federal Register / Vol. 75, No. 190 / Friday, October 1, 2010 / Proposed Rules 61005 

11U.S. Department of Labor, Bureau of Labor 

Statistics, 2009, Employment cost index, 

Washington, DC, http://data.bls.gov/PDQ/ 

outside.jsp?survey=ci. Accessed 3/27/09. 

12Price data was obtained from Random Lengths 

Publications, Inc., and is a framing composite price 

that is designed as a broad measure of price 

movement in the lumber market. (http:// 

www.randomlengths.com.) 

TABLE 2—TYPICAL SAWMILL OPERATING COSTS 2003–2008—Continued 

Oregon Georgia 

Costs 

($ per thousand 

board feet) 

Revenue 

($ per thousand 

board feet) 

Costs 

($ per thousand 

board feet) 

Revenue 

($ per thousand 

board feet) 

2007 ......................................................................................... 297 260 300 269 

2008 ......................................................................................... 238 219 328 262 

Several factors contributed to the 

revenue changes shown in Table 2. 

Some mills in the interior western 

United States were forced to close 

because of constraints on the 

availability of timber. A dispute with 

Canada over lumber imports that 

resulted in a 15 percent export levy for 

some U.S.-bound shipments and quotas 

on others after October 2006 impacted 

supply. 

Wood, labor, and operating costs also 

impact revenue. The cost of wood in the 

United States is negotiated between 

buyers and sellers. Companies often 

enter into long-term supply contracts 

with timber owners where the price is 

negotiated quarterly based on sales and 

market conditions. Labor is the second 

biggest component of lumber costs. 

According to the U.S. Department of 

Labor, U.S. wages have increased about 

3 percent per year during this decade.11

At the same time, labor productivity in 

sawmilling has increased by a like 

amount leaving unit labor costs flat. The 

other main cost for sawmills is energy, 

but most mills use their own residues to 

generate heat for their drying needs. 

This has lessened the impact of rising 

energy prices on sawmills. As shown in 

Table 2, total operating costs in Oregon 

per thousand board feet averaged $295 

in 2003, rose to $349 in 2005, and fell 

to $238 in 2008. In comparison, total 

operating costs in Georgia per thousand 

board feet averaged $311 in 2003, rose 

to $349 in 2005 and 2006, and fell to 

$328 in 2008. 

Need for a Program 

The softwood lumber industry is 

experiencing one of the worst markets 

in history. The collapse of the housing 

market caused prices to fall from $404 

per thousand board feet in 2004 to $222 

per thousand board feet in 2009.12

Competition from other building 

products like cement and vinyl has also 

helped to reduce demand for softwood 

lumber. 

Additionally, at the request of the 

U.S. and Canadian governments, the 

U.S. Endowment for Forestry and 

Communities (Endowment) and the 

Binational Softwood Lumber Council 

(BSLC) were formed in 2006 in 

accordance with the 2006 Softwood 

Lumber Agreement. The Endowment is 

a non-profit organization that works 

with public and private sectors to 

advance the interests of the forestry 

community. The Endowment conducted 

a study to assess the feasibility of a 

softwood lumber research and 

promotion program. In the past, the 

industry attempted voluntary efforts to 

promote forest products, but they were 

sporadic, underfunded, and narrowly 

targeted. These campaigns did not last 

long enough to succeed. The 

Endowment recommended to the 

industry that Canadian and U.S. 

companies pursue a shared vision and 

achieve broad agreement on creating a 

unified softwood lumber research and 

promotion program. In 2008, the 

Endowment held an industry meeting in 

Seattle, Washington, to discuss the 

merits of such a program and obtain 

industry feedback. 

As a result of the Endowment’s 

efforts, the BRC was subsequently 

formed to pursue an industry research 

and promotion program. The BRC is 

comprised of 21 members representing 

the United States and Canada. Funding 

and support for the BRC’s efforts come 

from the BSLC, a non-profit 

organization whose mission is to 

promote increased cooperation between 

the U.S. and Canadian softwood lumber 

industries and to strengthen and expand 

markets for softwood lumber products 

in both countries. The BRC submitted 

an initial proposal for a program to 

USDA in February 2010. 

The BRC proposed a program that 

would be financed by an assessment on 

softwood lumber domestic 

manufacturers and importers and 

administered by a board of industry 

members selected by the Secretary. The 

initial assessment rate would be $0.35 

per thousand board feet shipped within 

or imported to the United States and 

could be increased up to a maximum of 

$0.50 per thousand board feet. Entities 

that domestically ship or import less 

than 15 million board feet would be 

exempt along with shipments exported 

outside of the United States. Larger 

entities would not pay assessments on 

the first 15 million board feet shipped 

or imported. The purpose of the 

program would be to strengthen the 

position of softwood lumber in the 

marketplace, maintain and expand 

markets for softwood lumber, and 

develop new uses for softwood lumber 

within the United States. A referendum 

would be held among eligible domestic 

manufacturers and importers to 

determine whether they favor 

implementation of the program prior to 

it going into effect. A majority of 

domestic manufacturers and importers 

by both number and volume represented 

in the referendum would have to 

support the program for it to be 

implemented. The specific provisions of 

the program are discussed below. 

Provisions of Proposed Program 

Definitions 

Pursuant to section 513 of the 1996 

Act, §§ 1217.1 through 1217.30 of the 

proposed Order define certain terms 

that would 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 proposed 

softwood lumber Order. 

Section 1217.1 would define the term 

‘‘Act’’ to mean the Commodity 

Promotion, Research, and Information 

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

any amendments thereto. 

Section 1217.2 would define the term 

‘‘Blue Ribbon Commission’’ to mean the 

21-member committee representing 

businesses that manufacture softwood 

lumber in the United States or import 

softwood lumber to the United States 

formed to pursue an industry research, 

promotion, and information program. 

As specified in proposed § 1217.41, the 

BRC would conduct the initial 

nominations for the Softwood Lumber 

Board and submit them to the Secretary. 

This would be the only role of the BRC 

under the program. 


jlentini on DSKJ8SOYB1PROD with PROPOSALS2
61006 Federal Register / Vol. 75, No. 190 / Friday, October 1, 2010 / Proposed Rules 

13The HTS numbers referred to in this discussion 

are as of January 1, 2008. 

Section 1217.3 would define the term 

‘‘Board’’ or ‘‘Softwood Lumber Board’’ to 

mean the administrative body 

established pursuant to § 1217.40, or 

such other name as recommended by 

the Board and approved by the 

Secretary. 

Section 1217.4 would define the term 

‘‘board foot’’ or ‘‘BF’’ to mean a unit of 

measurement of softwood lumber 

represented by a board 12-inches long, 

12-inches wide, and 1-inch thick or its 

cubic equivalent. A board foot 

calculation for softwood lumber 1 inch 

or more in thickness is based on its 

nominal thickness and width by the 

actual length. Softwood lumber with a 

nominal thickness of less than 1 inch is 

calculated as 1 inch. 

The term ‘‘nominal’’ means the size by 

which softwood lumber is known and 

sold in the marketplace. As previously 

mentioned, it differs from the actual size 

and is based on the thickness and width 

of a board when it is first cut from a log, 

or rough cut, prior to drying and 

planing. Nominal size would be defined 

in § 1217.16 of the Order. The term 

‘‘planing’’ means the act of smoothing 

the surface of a board to make the wood 

a uniform size and would be defined in 

§ 1217.20 of the Order. 

Section 1217.6 would define the term 

‘‘Customs’’ to mean the United States 

Customs and Border Protection or U.S. 

Customs Service, an agency of the 

United States Department of Homeland 

Security. 

Section 1217.8 would define the term 

‘‘domestic manufacturer’’ to mean any 

person who is a first handler and is 

engaged in the manufacturing, sale and 

shipment of softwood lumber in the 

United States during a fiscal period and 

who owns, or shares the ownership and 

risk of loss of manufacturing of 

softwood lumber or a person who is 

engaged in the business of 

manufacturing, or causes to be 

manufactured, sold and shipped such 

softwood lumber in the United States 

beyond personal use. The term would 

not include any person who remanufactures softwood lumber that had 

already been subject to assessment 

under the Order. 

Section 1217.9 would define the term 

‘‘export’’ to mean to manufacture and 

ship softwood lumber from within the 

United States to locations outside of the 

United States. 

Section 1217.10 would define the 

term ‘‘fiscal period’’ or ‘‘fiscal year’’ to 

mean a calendar year from January 1 

through December 31, or other period as 

recommended by the Board and 

approved by the Secretary. 

Section 1217.12 would define the 

term ‘‘information’’ to mean activities or 

programs designed to disseminate the 

results of research, new and existing 

marketing programs, new and existing 

marketing strategies, new and existing 

uses and applications, and to enhance 

the image of softwood lumber and the 

forests from which it comes. This would 

include consumer education, which 

would mean any action taken to provide 

information to, and broaden the 

understanding of, the general public 

regarding softwood lumber. This would 

also include industry information, 

which would mean information and 

programs that would enhance the image 

of the softwood lumber industry. 

Section 1217.13 would define the 

term ‘‘manufacture’’ to mean the process 

of transforming softwood logs into 

softwood lumber. 

Section 1217.14 would define the 

term ‘‘manufacturer for the U.S. market’’ 

to mean domestic manufacturers and 

importers of softwood lumber. Such 

importers may not have manufactured 

the softwood lumber, but would be 

importing softwood lumber that had 

been manufactured from softwood logs. 

The term is intended to facilitate equity 

between the domestic and importing 

members of the softwood lumber 

industry. 

Section 1217.15 would define the 

term ‘‘marketing’’ to mean the sale or 

other disposition of softwood lumber in 

interstate, foreign, or intrastate 

commerce. The sale or disposition of 

softwood lumber within a State would 

constitute marketing. 

Section 1217.18 would define the 

terms ‘‘part’’ and ‘‘subpart.’’ The term 

‘‘part’’ would mean the Softwood 

Lumber Research, Promotion, Consumer 

Education, and Industry Information 

Order and all rules, regulations, and 

supplemental orders issued pursuant to 

the Act and the Order. The Order would 

be a ‘‘subpart’’ of the part. 

Section 1217.21 would define the 

terms programs, plans and projects to 

mean research, promotion and 

information programs, plans, or projects 

established under the Order. 

Section 1217.22 would define the 

term ‘‘promotion’’ to mean any action 

taken, including paid advertising, 

public relations and other 

communications, and promoting the 

results of research, that presents a 

favorable image of softwood lumber and 

the forests from which it comes to the 

public and to any and all consumers 

and those who influence consumption 

of softwood lumber with the intent of 

improving the perception, markets and 

competitive position of softwood 

lumber and stimulating sales of 

softwood lumber. 

Section 1217.23 would define the 

term ‘‘research’’ to mean any activity 

that advances the position of softwood 

lumber in the marketplace that includes 

any type of test, study, or analysis 

designed to advance the image, 

desirability, use, marketability, sales, 

product development, or quality of 

softwood lumber; new applications; 

improving softwood lumber’s position 

in building and fire codes; softwood 

lumber product testing and safety; and 

evaluating the effectiveness of market 

development and promotion efforts 

including life cycle studies, forestry, 

sustainable forest management, 

environmental preferability, 

competitiveness, efficiency, pest and 

disease control, water quality and other 

management aspects of forestry and the 

forests from which softwood lumber 

originates. 

Section 1217.25 would define the 

term ‘‘softwood lumber’’ to mean all 

softwood lumber and softwood lumber 

products described in section 804(a) 

within Title VIII (Softwood Lumber Act 

of 2008 or SLA of 2008) of the Tariff Act 

of 1930 (19 U.S.C. 1202–1683g), as 

amended by section 3301 of the Food, 

Conservation and Energy Act of 2008 

(Pub. L. 110–246, enacted June 18, 

2008). An interim final rule issued by 

Customs and effective on September 18, 

2008 (73 FR 49934; August 25, 2008), 

prescribed an importer declaration 

program and entry requirements 

applicable to such softwood lumber and 

softwood lumber products. The 

declaration program and entry 

requirements were required under 

section 803 of the SLA of 2008. Section 

804 of the SLA of 2008 sets forth the 

scope of softwood lumber and softwood 

lumber products covered by that Act. 

Accordingly, all softwood lumber and 

softwood lumber products classified 

under subheading 4407.10.00, 

4409.10.10, 4409.10.20, or 4409.10.90 of 

the Harmonized Tariff Schedule of the 

United States (HTSUS) are subject to the 

importer declaration program and entry 

requirements and would be covered 

under this Order and are described in 

the following paragraphs: 13

(1) Coniferous wood, sawn or chipped 

lengthwise, sliced or peeled, whether or 

not planed, sanded or finger-jointed, of 

a thickness exceeding 6 millimeters; 

(2) Coniferous wood siding (including 

strips and friezes for parquet flooring, 

not assembled) continuously shaped 

(tongued, grooved, rabbeted, chamfered, 

v-jointed, beaded, molded, rounded, or 

the like) along any of its edges or faces, 


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whether or not planed, sanded, or 

finger-jointed; 

(3) Other coniferous wood (including 

strips and friezes for parquet flooring, 

not assembled) continuously shaped 

(tongued, grooved, rabbeted, chamfered, 

v-jointed, beaded, molded, rounded, or 

the like) along any of its edges or faces 

(other than wood moldings and wood 

dowel rods) whether or not planed, 

sanded, or finger-jointed; 

(4) Coniferous wood flooring 

(including strips and friezes for parquet 

flooring, not assembled) continuously 

shaped (tongued, grooved, rabbeted, 

chamfered, v-jointed, beaded, molded, 

rounded, or the like) along any of its 

edges or faces, whether or not planed, 

sanded, or finger jointed; and 

(5) Coniferous drilled and notched 

lumber and angle cut lumber. 

In addition, any product classified 

under subheading 4409.10.05 of the 

HTSUS that is continually shaped along 

its end and or side edges, and unless 

excepted or excluded from the importer 

declaration requirement, softwood 

lumber products that are stringers, 

radius cut box-spring frame 

components, fence pickets, truss 

components, pallet components, and 

door and window frame parts classified 

under subheading 4418.90.46.95, 

4421.90.70.40, or 4421.90.97.40 of the 

HTSUS are covered under the SLA of 

2008 and would be covered under the 

Order. 

The following are not subject to the 

importer declaration program under 

section 803 of the SLA of 2008 (see 

section 804(b)) because they are defined 

as excluded from the program and 

would thus not be covered under this 

Order: 

(1) Trusses and truss kits, properly 

classified under subheading 4418.90 of 

the HTSUS; 

(2) I–Joist beams; 

(3) Assembled box-spring frames; 

(4) Pallets and pallet kits, properly 

classified under subheading 4415.20 of 

the HTSUS; 

(5) Garage doors; 

(6) Edge-glued wood, properly 

classified under subheading 

4421.90.97.40 of the HTSUS; 

(7) Complete door frames; 

(8) Complete window frames; 

(9) Furniture; 

(10) Articles brought into the United 

States temporarily and for which an 

exemption from duty is claimed under 

subchapter XIII of chapter 98 of the 

HTSUS; and 

(11) Household and personal effects. 

Also, the following products are not 

subject to the importer declaration 

program established under section 803 

of the SLA of 2008 (see section 804(c)) 

because they are defined as excepted 

from the program: 

(1) Stringers (pallet components used 

for runners), if the stringers have at least 

two notches on the side, positioned at 

equal distance from the center, to 

properly accommodate forklift blades, 

and properly classified under 

subheading 4421.90.97.40 of the 

HTSUS; 

(2) Box-spring frame kits, if the kits 

contain two wooden side rails, two 

wooden end (or top) rails; and varying 

numbers of wooden slats; and the side 

rails and the end rails are radius-cut at 

both ends. Box spring frame kits must 

be individually packaged, and contain 

the exact number of wooden 

components needed to make the boxspring frame described on the entry 

documents, with no further processing 

required. None of the components 

contained in the package may exceed 1 

inch in actual thickness or 83 inches in 

length. 

(3) Radius-cut box-spring-frame 

components, not exceeding 1 inch in 

actual thickness or 83 inches in length, 

ready for assembly without further 

processing, if radius cuts are present on 

both ends of the boards and are 

substantial cuts so as to completely 

round one corner. 

(4) Fence pickets requiring no further 

processing and properly classified 

under subheading 4421.90.70 of the 

HTSUS, 1 inch or less in actual 

thickness, up to 8 inches wide, and 6 

feet or less in length, and having finials 

or decorative cuttings that clearly 

identify them as fence pickets (in the 

case of dog-eared fence pickets, the 

corners of the boards should be cut off 

so as to remove pieces of wood in the 

shape of isosceles right angle triangles 

with sides measuring 3⁄4 of an inch or 

more). 

(5) Softwood lumber originating in the 

United States that is exported to another 

country for minor processing and 

imported into the United States if the 

processing occurring in another country 

is limited to kiln drying, planing to 

create smooth-to-size board, and 

sanding; and the importer establishes to 

Customs’ satisfaction upon entry that 

the softwood lumber originated in the 

United States. 

(6) Any softwood lumber or softwood 

lumber product that originated in the 

United States, if the importer, exporter, 

foreign manufacturer or original 

domestic manufacturer establishes to 

Customs’ satisfaction upon entry that 

the softwood lumber entered and 

documented as originating in the United 

States was first manufactured in the 

United States. 

(7) Softwood lumber or softwood 

lumber products contained in a single 

family home package or kit, regardless 

of classification under the HTSUS, if the 

importer declares that the following 

requirements have been met: (i) The 

package or kit constitutes a full package 

of the number of wooden pieces 

specified in the plan, design or 

blueprint necessary to produce a home 

of at least 700 square feet produced to 

a specified plan, design or blueprint; (ii) 

The package or kit contains all 

necessary internal and external doors 

and windows, nails, screws, glue, 

subfloor, sheathing, beams, posts, and 

connectors, and if included in the 

purchase contract, the decking, trim, 

drywall and roof shingles specified in 

the plan, design or blueprint; (iii) Prior 

to importation, the package or kit is sold 

to a United States retailer that sells 

complete home packages or kits 

pursuant to a valid purchase contract 

referencing the particular home design 

plan or blueprint, and the contract is 

signed by a customer not affiliated with 

the importer; and (iv) Softwood lumber 

products entered as part of the package 

or kit, whether in a single entry or 

multiple entries on multiple days, and 

are to be used solely for the construction 

of the single family home specified by 

the home design plan, or blueprint 

matching the Customs import entry. 

For each entry of softwood lumber 

products contained in a single family 

home package for which the importer 

declares that these four requirements are 

met, the importer must retain and make 

available to Customs upon request the 

following documentation: 

(1) A copy of the appropriate home 

design plan, or blueprint matching the 

Customs entry in the United States; 

(2) A purchase contract from a retailer 

of home kits or packages signed by a 

customer not affiliated with the 

importer; 

(3) A listing of all parts in the package 

or kit being entered into the United 

States that conforms to the home design 

package being imported; and 

(4) If a single contract involves 

multiple entries, an identification of all 

of the items required to be listed under 

item (3) that are included in each 

individual shipment. 

The reporting and recordkeeping 

burden for the information required by 

Customs has been approved by the OMB 

and is addressed in the referenced 

Custom’s interim final rule. 

Section 1217.26 would define the 

term ‘‘softwood’’ to mean one of the 

botanical groups of trees that have 

needle-like or scale-like leaves, or 

conifers. 


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Sections 1217.5, 1217.7, 1217.11, 

1217.17, 1217.19, 1217.24, 1217.27, 

1217.28, 1217.29, and 1217.30 would 

define the terms ‘‘conflict of interest,’’ 

‘‘Department or UDSA,’’ ‘‘importer,’’ 

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

‘‘suspend,’’ ‘‘terminate,’’ and ‘‘United 

States,’’ respectively. The definitions are 

the same as those specified in section 

513 of the Act. 

Establishment of the Board 

Pursuant to section 515 of the 1996 

Act, §§ 1217.40 through 1217.47 of the 

proposed Order would detail the 

establishment and membership of the 

proposed Softwood Lumber Board, 

nominations and appointments, the 

term of office, removal and vacancies, 

procedure, reimbursement and 

attendance, powers and duties, and 

prohibited activities. 

Section 1217.40 would specify the 

Board establishment and membership. 

The Board would be composed of 

manufacturers for the U.S. market who 

manufacture and domestically ship or 

import 15 million board feet or more of 

softwood lumber in the United States 

during a fiscal period. Seats on the 

Board would be apportioned based on 

the volume of softwood lumber 

manufactured and shipped within the 

United States by domestic 

manufacturers and the volume of 

softwood lumber imported into the 

United States. 

The Board would be composed of 18 

or 19 members, depending upon 

whether an additional importer member 

was appointed to the Board. Twelve 

members would be domestic 

manufacturers and would be allocated 

to three regions in the United States 

based on the volume of softwood 

lumber manufactured in and shipped 

from the respective region. Of the 12 

members, 6 would be from the U.S. 

South Region, 5 would be from the U.S. 

West Region, and 1 member would be 

from the Northeast and Lake States 

Region and any other part of the United 

States not included in the southern and 

western regions. Specific areas within 

each domestic region would be 

specified in § 1217.40(b)(1) of the 

proposed Order. 

Six members would be importers who 

import the majority of their softwood 

lumber from two regions in Canada and 

would be allocated based on the volume 

of softwood lumber imported from those 

two respective regions. Of the six 

Canadian importers, four would 

represent the Canadian West Region and 

two would represent the Canadian East 

Region. Specific areas within each 

Canadian region would be specified in 

§ 1217.40(b)(2) of the proposed Order. 

Any additional 19th member would 

represent a region representing all 

countries except Canada. 

The volume of softwood lumber 

imported from other countries besides 

Canada is relatively low, averaging 

about 8 percent of total imports from 

2007 through 2009. However, all entities 

paying assessments to the Board would 

have the opportunity to be represented 

on the Board. Thus, the BRC 

recommended that, if the Secretary, at 

the request of the Board or on his or her 

own, determines that it would be 

consistent with the provisions of the 

Act, the Secretary could appoint an 

additional importer to the Board to 

represent the region outside of the 

regions specified for Canada. Nominees 

would be solicited as prescribed for 

other regions, and all the names of 

eligible candidates would be submitted 

to the Secretary for consideration. Such 

nominees would have to certify that the 

majority of their softwood lumber is 

imported from the region (which would 

include imports from all countries 

except Canada). 

The BRC also opted to have no 

alternate Board members. It wants to 

ensure that industry members who seek 

representation and serve on the Board 

are committed to their service and 

participate in all Board meetings. 

Every 5 years, but no more often than 

once every 3 years, the Board must 

review, based on a 3-year average, the 

geographical distribution of the volume 

of softwood lumber manufactured and 

shipped within the United States by 

domestic manufacturers and the volume 

of softwood lumber imported into the 

United States. If warranted, the Board 

would recommend to the Secretary that 

the Board membership be reapportioned 

appropriately to reflect such changes. 

The distribution of volumes between 

regions also shall be considered. Any 

changes in Board composition would be 

implemented by the Secretary through 

rulemaking. 

Section 1217.41 of the proposed 

Order would specify Board nominations 

and appointments. The initial 

nominations would be submitted to the 

Secretary by the BRC. The BRC would 

publicize the nomination process, using 

trade press or other means it deems 

appropriate, and outreach to all 

manufacturers for the U.S. market who 

domestically ship and/or import 15 

million board feet or more of softwood 

lumber per fiscal year. The BRC would 

use regional caucuses, mail or other 

methods to solicit potential nominees 

and would work with USDA to help 

ensure that all interested persons are 

apprised of the nomination process. The 

BRC would submit the nominations to 

the Secretary and recommend two 

nominees for each Board position. The 

Secretary would select the members of 

the Board from the nominations 

submitted by the BRC. 

Regarding subsequent nominations, 

the Board would solicit nominations as 

described in the preceding paragraph. 

Nominees would have the opportunity 

to provide the Board a short background 

statement outlining their qualifications 

and desire to serve on the Board. They 

must domestically ship and/or import 

15 million board feet or more of 

softwood lumber per fiscal year. Entities 

that are both a domestic manufacturer 

and an importer could seek nomination 

to the Board and vote in the nomination 

process described below as either a 

domestic manufacturer or an importer, 

but not both. Such nominees who 

domestically manufacture the majority 

of their softwood lumber could seek 

nomination and vote as a domestic 

manufacturer, and such nominees who 

import the majority of their softwood 

lumber could seek nomination and vote 

as an importer. 

Domestic manufacturers who 

manufacture softwood lumber in more 

than one region could seek nomination 

in only the region in which they 

manufacture the majority of their 

softwood lumber. The names of 

domestic manufacturer nominees would 

be placed on a ballot by region. The 

ballots along with the background 

statements would be mailed to domestic 

manufacturers in each respective region 

for a vote. Domestic manufacturers who 

manufacture softwood lumber in more 

than one region could only vote in the 

region in which they manufacture the 

majority of their softwood lumber. The 

votes would be tabulated for each region 

with the nominee receiving the highest 

number of votes at the top of the list in 

descending order by vote. The top two 

candidates for each position would be 

submitted to the Secretary. 

Importer nominees would certify that 

the majority of their softwood lumber 

was imported from the respective region 

for which they were seeking 

representation on the Board. They 

would provide documentation to verify 

this if requested by the Board. The 

names of importer nominees would then 

be placed on a ballot by region. The 

ballots along with the background 

statements would be mailed to 

importers in each respective region for 

a vote. Importers who import softwood 

lumber from more than one region could 

only vote in the region from which they 

import the majority of their softwood 

lumber. The votes would be tabulated 

for each region with the nominee 

receiving the highest number of votes at 


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the top of the list in descending order 

by vote. The top two candidates for each 

position would then be submitted to the 

Secretary. 

The Board would submit nominations 

to the Secretary at least 6 months before 

the new Board term begins. The 

Secretary would select the members of 

the Board from the nominations 

submitted by the Board. 

The BRC also recommended that no 

two Board members be employed by a 

single corporation, company, 

partnership, or any other legal entity. 

This is to ensure that no one entity has 

control on the Board. 

In order to provide the Board 

flexibility, the Board could recommend 

to the Secretary modifications to its 

nomination procedures. Any such 

modifications would be implemented 

through rulemaking by the Secretary. 

Section 1217.42 of the proposed 

Order would specify the term of office. 

With the exception of the initial Board, 

each Board member would serve a 

three-year term or until the Secretary 

selected his or her successor. Each term 

of office would begin on January 1 and 

end on December 31. No member could 

serve more than two consecutive terms, 

excluding any term of office less than 

three years. For the initial board, the 

terms of Board members would be 

staggered for two, three, and four years 

and would be recommended to the 

Secretary by the BRC. 

Section 1217.43 of the proposed 

Order would specify criteria for the 

removal of members and for filling 

vacancies. If a Board member ceased to 

work for or be affiliated with a domestic 

manufacturer or importer or ceased to 

do business in the region he or she 

represented, such position would 

become vacant. Additionally, the Board 

could recommend to the Secretary that 

a member be removed from office if the 

member consistently refused to perform 

his or her duties or engaged in dishonest 

acts or willful misconduct. The 

Secretary could remove the member if 

he or she finds that the Board’s 

recommendation shows adequate cause. 

If a position became vacant, 

nominations to fill the vacancy would 

be conducted using the nominations 

process as proposed in § 1217.41 of the 

Order. A vacancy would not be required 

to be filled if the unexpired term is less 

than six months. 

Section 1217.44 of the proposed 

Order would specify procedures of the 

Board. A majority of the Board members 

(10) would constitute a quorum, 

provided that at least three of the 

members present were importers and six 

were domestic manufacturers. If 

participation by telephone or other 

means were permitted, members 

participating by such means would 

count towards the quorum requirements 

or other voting requirements as 

authorized under the Order. Proxy 

voting would not be permitted. A 

motion would carry if supported by 10 

Board members, except for 

recommendations to change the 

assessment rate or to adopt a budget, 

both of which would require affirmation 

by at least two-thirds of the Board 

members (12 members for an 18 member 

Board and 13 members for a 19 member 

Board). If a Board has vacant positions, 

recommendations to change the 

assessment rate or to adopt a budget 

would have to pass by an affirmative 

vote of two-thirds of the Board 

members, exclusive of the vacant seats. 

For example, if a 19 member Board 

had a vacancy, there would be 18 Board 

members. If the Board held a meeting, 

and 9 members were present (of which 

6 were domestic manufacturers) in 

person and 4 (of which 3 were 

importers) participated by telephone, 

there would be a quorum (13) for the 

meeting. If the Board were voting on the 

upcoming year’s budget, 12 members 

(.66 × 18 members) would have to vote 

in favor of the budget for it to pass. 

The proposed Order would also 

provide for the Board to take action by 

mail, telephone, electronic mail, 

facsimile, or any other electronic means 

when the chairperson believes it is 

necessary. Actions taken under these 

procedures would be valid only if all 

members and the Secretary were 

notified of the meeting and all members 

were provided the opportunity to vote 

and at least 10 Board members voted in 

favor of the action (unless two-thirds 

vote were required under the Order). 

Additionally, all votes would have to be 

confirmed in writing and recorded in 

Board minutes. 

The proposed Order would specify 

that Board members would serve 

without compensation. However, Board 

members would be reimbursed for 

reasonable travel expenses, as approved 

by the Board, incurred when performing 

Board business. 

Section 1217.46 of the proposed 

Order would specify powers and duties 

of the Board. These are similar in 

promotion programs authorized under 

the 1996 Act. They include, among 

other things, to administer the Order 

and collect assessments; to develop 

bylaws and recommend regulations 

necessary to administer the Order; to 

select a chairperson and other Board 

officers; to create an executive 

committee and form other committees 

and subcommittees as necessary; to hire 

staff or contractors; to provide 

appropriate notice of meetings to the 

industry and USDA and keep minutes of 

such meetings; to develop programs and 

enter into contracts to implement 

programs; to submit a budget to USDA 

for approval 60 calendar days prior to 

the start of the fiscal year; to borrow 

funds necessary to cover startup costs of 

the Order; to invest Board funds 

appropriately; to recommend changes in 

the assessment rate as appropriate and 

within the limits of the Order; to have 

its books audited by an outside certified 

public accountant at the end of each 

fiscal period and at other times as 

requested by the Secretary; to report its 

activities to manufacturers for the U.S. 

market; to make public an accounting of 

funds received and expended; to 

receive, investigate and report to the 

Secretary complaints of violations of the 

Order; and to recommend amendments 

to the Order as appropriate. 

Section 1217.47 of the proposed 

Order would specify prohibited 

activities that are common to all 

promotion programs authorized under 

the 1996 Act. In summary, the Board 

nor its employees and agents could 

engage in actions that would be a 

conflict of interest; use Board funds to 

lobby (influencing legislation or 

governmental action or policy, by local, 

State, national, and foreign governments 

or subdivision thereof, other than 

recommending to the Secretary 

amendments to the Order); and engage 

in any advertising or activities that may 

be false, misleading or disparaging to 

another agricultural commodity. 

Expenses and Assessments 

Pursuant to sections 516 and 517 of 

the 1996 Act, §§ 1217.50 through 

1217.53 of the proposed Order detail 

requirements regarding the Board’s 

budget and expenses, financial 

statements, assessments, and exemption 

from assessments. At least 60 calendar 

days before the start of the fiscal period, 

and as necessary during the year, the 

Board would submit a budget to USDA 

covering its projected expenses. The 

budget must include a summary of 

anticipated revenue and expenses for 

each program along with a breakdown 

of staff and administrative expenses. 

Except for the initial budget, the Board’s 

budgets should include comparative 

data for at least one preceding fiscal 

period. 

Each budget must provide for 

adequate funds to cover the Board’s 

anticipated expenses. Any amendment 

or addition to an approved budget must 

be approved by USDA, including 

shifting of funds from one program, plan 

or project to another. Shifts of funds that 

do not result in an increase in the 


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Board’s approved budget would not 

have to have prior approval from USDA. 

For example, if the Board’s approved 

budget provided for $1 million in 

consumer advertising and $500,000 in 

research projects, a shift of $50,000 from 

consumer advertising to research would 

require USDA approval. However, a 

shift within the $1 million consumer 

advertising line item would not require 

prior USDA approval. 

The Board would be authorized to 

incur reasonable expenses for its 

maintenance and functioning. During its 

first year of operation, the Board could 

borrow funds for startup costs and 

capital outlay. Any borrowed funds 

would be subject to the same fiscal, 

budget and audit controls as other funds 

of the Board. 

The Board could also accept 

voluntary contributions. Any 

contributions received by the Board 

would be free from encumbrances by 

the donor and the Board would retain 

control over use of the funds. For 

example, the Board could receive 

Federal grant funds, subject to approval 

by the Secretary, for a specific research 

project. The Board would also be 

required to reimburse USDA for costs 

incurred by USDA in overseeing the 

Order’s operations, including all costs 

associated with referenda. 

The Board would be limited to 

spending no more than 8 percent of its 

available funds for administration, 

maintenance, and the functioning of the 

Board. This limitation would begin two 

fiscal years after the Board’s first 

meeting. Reimbursements to USDA 

would not be considered administrative 

costs. As an example, if the Board 

received $15 million in assessments 

during fiscal year 5, and had available 

$1 million in reserve funds, the Board’s 

available funds would be $16 million. In 

this scenario, the Board would be 

limited to spending no more than $1.28 

million (.08 × $16 million) on 

administrative costs. While section 515 

of the 1996 Act limits such spending to 

15 percent of a board’s budget, the BRC 

believes that 8 percent is appropriate. 

The Board could also maintain a 

monetary reserve and carry over excess 

funds from one fiscal period to the next. 

However, such reserve funds could not 

exceed one fiscal year’s budgeted 

expenses. For example, if the Board’s 

budgeted expenses for a fiscal year were 

$15 million, it could carry over no more 

than $15 million in reserve. With 

approval of the Secretary, reserve funds 

could be used to pay expenses. 

The Board could invest its revenue 

collected under the Order in the 

following: (1) Obligations of the United 

States or any agency of the United 

States; (2) general obligations of any 

State or any political subdivision of a 

State; (3) interest bearing accounts or 

certificates of deposit of financial 

institutions that are members of the 

Federal Reserve; and (4) obligations 

fully guaranteed as to principal interest 

by the United States. 

The Board would be required to 

submit to USDA financial statements on 

a quarterly basis, or at any other time as 

requested by the Secretary. Financial 

statements should include, at a 

minimum, a balance sheet, an income 

statement, and an expense budget. 

Assessments 

The Board’s programs and expenses 

would be funded through assessments 

on manufacturers for the U.S. market, 

other income, and other funds available 

to the Board. The Order would provide 

for an initial assessment rate of $0.35 

per thousand board feet. Domestic 

manufacturers would pay assessments 

based on the volume of softwood 

lumber shipped within the United 

States and importers would pay 

assessments based on the volume of 

softwood lumber imported to the United 

States. 

Two years after the Order becomes 

effective and periodically thereafter, the 

Board would review the assessment rate 

and, if appropriate, recommend a 

change in the rate. At least two-thirds of 

the Board members would have to favor 

a change in the assessment rate. The 

assessment rate could be no less than 

$0.35 per thousand board feet and no 

more than $0.50 per thousand board 

feet. Any change in the assessment rate 

within this range would be subject to 

rulemaking by the Secretary. 

Anticipated income generated within 

the assessment range is addressed in the 

section titled Initial Regulatory 

Flexibility Act Analysis. 

Domestic manufacturers would be 

required to pay their assessments owed 

to the Board by the 30th calendar day 

of the month following the end of the 

quarter in which the softwood lumber 

was shipped. Thus, the January to 

December fiscal year would have four 

quarters ending the last day of March, 

June, September, and December, 

respectively. Assessments would be due 

April 30th, July 30th, October 30th, and 

January 30th. As an example, 

assessments for lumber shipped in 

January would be due to the Board by 

April 30th. 

Importer assessments would be 

collected through Customs. If Customs 

did not collect the assessment from an 

importer, then the importer would be 

responsible for paying the assessment 

directly to the Board within 30 calendar 

days after importation. 

Most of the imported softwood 

lumber that would be covered under the 

program would have a quantity 

associated with it in cubic meters. To 

compute the assessments owed, the 

quantity of softwood lumber in cubic 

meters would have to be converted to 

thousand board feet, and then that 

number would be multiplied by the 

applicable assessment rate. One cubic 

meter is equal to 423.776001 board feet. 

The factor used to convert one cubic 

meter to one thousand board feet is 

423.776001 divided by 1,000, or 

0.423776001. For example, if 500,000 

cubic meters of softwood lumber 

covered under the program is imported, 

and the assessment rate is $0.35 per 

thousand board feet, the assessments 

owed would be $74,160.80 (500,000 × 

0.423776001 × $.35). 

Some imported lumber covered under 

the program may not have a quantity 

associated with it. It would include 

products like window and door frame 

parts. The importer declares an export 

price (or value) for the product, 

consistent with the SLA of 2008. To 

compute the assessments owed for such 

product, the value in dollars must be 

computed to thousand board feet, and 

that quantity must be multiplied by the 

applicable assessment rate. The factor 

used to convert dollar value to one 

thousand board feet is 0.0031746, and is 

based on a 10-year average of $315 per 

one thousand board feet. For example, 

if $500,000 worth of softwood lumber is 

imported under the program, and the 

assessment rate is $0.35 per thousand 

board feet, the assessments owed would 

be $555.54 ($500,000 × 0.0031746 × 

$.35). 

Additionally, under the program, the 

Board could recommend to the 

Secretary, upon an affirmative vote of at 

least two-thirds of the Board members, 

a change in the factor used to convert 

value in dollars to one thousand board 

feet. 

The Order would provide authority 

for the Board to impose a late payment 

charge and interest for assessments 

overdue to the Board by 60 calendar 

days. The late payment charge and rate 

of interest would be prescribed in the 

Order’s regulations issued by the 

Secretary. 

Exemptions 

The Order would provide for four 

exemptions. First, manufacturers for the 

U.S. market who domestically ship or 

import less than 15 million board feet 

during a fiscal year would be exempt 

from paying assessments. Domestic 

manufacturers and importers would 


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apply to the Board for an exemption 

prior to the start of the fiscal year. This 

would be an annual exemption; entities 

would have to reapply each year. They 

would have to certify that they expect 

to domestically ship or import less than 

15 million board feet for the applicable 

fiscal year. The Board could request past 

shipment or import data to support the 

exemption request. The Board would 

then issue, if deemed appropriate, a 

certificate of exemption to the eligible 

manufacturer for the U.S. market. 

Once approved, domestic 

manufacturers would not have to pay 

assessments to the Board for the 

applicable fiscal year. Approved 

importers would have their assessments 

as collected by Customs refunded by the 

Board within 60 calendar days after 

receipt of such assessments by the 

Board. No interest would be paid on the 

assessments collected by Customs. 

Manufacturers for the U.S. market 

who did not apply to the Board for an 

exemption and domestically shipped or 

imported less than 15 million board feet 

of softwood lumber during the fiscal 

year would receive a refund from the 

Board for the applicable assessments 

within 30 calendar days after the end of 

the fiscal year. Board staff would 

determine the assessments paid and 

refund the domestic manufacturer 

accordingly. On the other hand, 

manufacturers for the U.S. market who 

receive an exemption certificate but 

domestically ship or import more than 

15 million board feet of softwood 

lumber during the fiscal year would 

have to pay the Board the applicable 

assessments owed within 30 calendar 

days after the end of the fiscal year and 

submit any necessary reports to the 

Board. 

If an entity is a domestic 

manufacturer and importer of softwood 

lumber, such entity’s domestic 

shipments and imports would count 

towards the 15 million board footexemption. For example, if an entity 

domestically ships 12 million board feet 

and imports 10 million board feet 

during a fiscal year, the entity would 

pay assessments on 7 million board feet 

of softwood lumber. 

The Board could recommend 

additional procedures to administer the 

exemption as appropriate. Any 

procedures would be implemented 

through rulemaking by the Secretary. 

The second exemption under the 

proposed Order would be for 

manufacturers for the U.S. market who 

domestically ship or import more than 

15 million board feet of softwood 

lumber annually. Domestic 

manufacturers would not pay 

assessments on their first 15 million 

board feet of softwood lumber shipped 

during the applicable fiscal year. 

Importers would receive a refund from 

the Board for the applicable assessments 

collected by Customs no later than 60 

calendar days after receipt of such 

assessments by the Board. 

The third exemption under the 

proposed Order would be for exports, or 

shipments of softwood lumber by 

domestic manufacturers to locations 

outside of the United States. The Board 

would develop procedures for approval 

by USDA for refunding assessments that 

may be inadvertently paid on such 

shipments and establish any necessary 

safeguards as appropriate. Safeguard 

procedures would be implemented by 

the Secretary through rulemaking. If the 

Board determined that exports should 

be assessed, it would make that 

recommendation to the Secretary. Any 

such action would be implemented by 

USDA through rulemaking. 

The fourth exemption under the 

proposed Order would be for organic 

lumber. A domestic manufacturer who 

operates under an approved National 

Organic Program (NOP) (7 CFR part 205) 

system plan, only manufactures and 

ships softwood lumber that is eligible to 

be labeled as 100 percent organic under 

the NOP and is not a split operation 

would be exempt from payment of 

assessments. Likewise, an importer who 

imports only softwood lumber that is 

eligible to be labeled as 100 percent 

organic under the NOP and who does 

not import any nonorganic softwood 

lumber would be exempt from the 

payment of assessments. 

Promotion, Research and Information 

Pursuant to section 516 of the 1996 

Act, §§ 1217.60 through 1217.62 of the 

proposed Order would detail 

requirements regarding promotion, 

research and information programs, 

plans and projects authorized under the 

Order. The Board would develop and 

submit to the Secretary for approval 

programs, plans and projects regarding 

promotion, research, education, and 

other activities, including consumer and 

industry information and advertising 

designed to, among other things, build 

markets for softwood lumber, enhance 

the image and reputation of softwood 

lumber and the forests from which it 

comes, and develop new applications 

for softwood lumber. The Board would 

be required to evaluate each plan and 

program to ensure that it contributes to 

an effective promotion program. 

Softwood lumber of all origins would 

have to be treated equally by the Board, 

and no program, plan, or project could 

be false, misleading, or disparage 

against another agricultural commodity. 

The Order would also require that, at 

least once every five years, the Board 

fund an independent evaluation of the 

effectiveness of the Order and programs 

conducted by the Board. Finally, the 

Order would specify that any patents, 

copyrights, trademarks, inventions, 

product formulations and publications 

developed through the use of funds 

received by the Board would be the 

property of the U.S. Government, as 

represented by the Board. These along 

with any rents, royalties and the like 

from their use would be considered 

income subject to the same fiscal, 

budget, and audit controls as other 

funds of the Board, and could be 

licensed with approval of the Secretary. 

Reports, Books and Records 

Pursuant to section 515 of the 1996 

Act, §§ 1217.70 through 1217.72 specify 

the reporting and recordkeeping 

requirements under the proposed Order 

as well as requirements regarding 

confidentiality of information. 

Manufacturers for the U.S. market 

would be required to submit 

periodically to the Board certain 

information as the Board may request. 

Specifically, domestic manufacturers 

would submit a report to the Board that 

would include, but not be limited to, the 

manufacturer’s name, address, and 

telephone number; the board feet of 

softwood lumber shipped within the 

United States; the board feet of softwood 

lumber for which assessments were 

paid; and the board feet of softwood 

lumber that was exported. 

Manufacturers would submit this report 

at the same time they remit their 

assessments to the Board. Domestic 

manufacturers who received a certificate 

of exemption from the Board would not 

have to submit such a report to the 

Board. However, exempt domestic 

manufacturers who shipped over the 

exemption threshold of 15 million board 

feet during the fiscal year would have to 

submit such reports to the Board with 

the payment of assessments on a 

quarterly basis as specified in § 1217.53. 

Likewise, importers who pay their 

assessments directly to the Board would 

be required to submit a report to the 

Board that would include, but not be 

limited to, the importer’s name, address, 

and telephone number; the board feet of 

softwood lumber imported to the United 

States; the board feet of softwood 

lumber for which assessments were 

paid; and country of export for such 

softwood lumber. Importers would 

submit this report at the same time they 

remit their assessments to the Board. 

Importers who paid their assessments 

through Customs would not have to 

submit such reports to the Board 


jlentini on DSKJ8SOYB1PROD with PROPOSALS2
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14Spelter, McKeever and Toth, Profile 2009, p. 

15. 

15Percentages were obtained from the American 

Lumber Standard Committee, Inc. (ALSC). The 

ALSC administers an accreditation program for the 

grademarking of lumber produced under the 

American Softwood Lumber Standard (Voluntary 

Product Standard 20). 

16Spelter, McKeever and Toth, Profile 2009, p. 2– 

5. 

because Customs would collect this 

information upon entry. 

Additionally, manufacturers for the 

U.S. market, including those who were 

exempt, would be required to maintain 

books and records needed to verify any 

required reports. Such books and 

records must be made available during 

normal business hours for inspection by 

the Board’s or USDA’s employees or 

agents. Manufacturers for the U.S. 

market would be required to maintain 

such books and records for two years 

beyond the applicable fiscal period. 

The Order would also require that all 

information obtained from persons 

subject the Order as a result of proposed 

recordkeeping and reporting 

requirements would be kept 

confidential by all officers, employees, 

and agents of the Board and USDA. 

Such information could only be 

disclosed if the Secretary considered it 

relevant, and the information were 

revealed in a judicial proceeding or 

administrative hearing brought at the 

direction or at the request of the 

Secretary or to which the Secretary or 

any officer of USDA were a party. Other 

exceptions for disclosure of confidential 

information would include the issuance 

of general statements based on reports 

or on information relating to a number 

of persons subject to the Order, if the 

statements did not identify the 

information furnished by any person, or 

the publication, by direction of the 

Secretary, of the name of any person 

violating the Order and a statement of 

the particular provisions of the Order 

violated. 

Miscellaneous Provisions 

Referenda 

Pursuant to section 518 of the 1996 

Act, § 1217.81(a) of the proposed Order 

specifies that the program would not go 

into effect unless it is approved by a 

majority of domestic manufacturers and 

importers voting in a referendum who 

also represent a majority of the volume 

of softwood lumber represented in the 

referendum who, during a 

representative period determined by the 

Secretary, were engaged in the domestic 

manufacturing or importation of 

softwood lumber into the United States. 

For example, if 500 domestic 

manufacturers and importers 

representing 100 million board feet of 

softwood lumber voted in a referendum, 

251 domestic manufacturers and 

importers representing over 50 million 

board feet would have to vote in favor 

of the Order for it to pass in the 

referendum. 

Section 1217.81(b) of the proposed 

Order specifies criteria for subsequent 

referenda. Under the Order, a 

referendum would be held to ascertain 

whether the program should continue, 

be amended, or be terminated. This 

section specifies that a referendum 

would be held 5 years after the Order 

becomes effective, and every 5 years 

thereafter, to determine whether 

domestic manufacturers and importers 

favor continuation of the Order. The 

Order would continue if favored by a 

majority of domestic manufacturers and 

importers voting in the referendum that 

also represented a majority of the 

volume of softwood lumber represented 

in the referendum. 

Additionally, a referendum could be 

conducted at the request of the Board. 

A referendum could also be conducted 

at the request of 10 percent or more of 

the number of persons eligible to vote in 

a referendum under the Order. Finally, 

a referendum could be conducted at any 

time as determined by the Secretary. 

Other Miscellaneous Provisions 

Sections 1217.80 and §§ 1217.82 

through 1217.88 describe the rights of 

the Secretary; authorize the Secretary to 

suspend or terminate the Order when 

deemed appropriate; prescribe 

proceedings after termination; address 

personal liability, separability, and 

amendments; and provide OMB control 

numbers. These provisions are common 

to all research and promotion program 

authorized under the 1996 Act. 

Initial Regulatory Flexibility Act 

Analysis 

In accordance with the Regulatory 

Flexibility Act (RFA) (5 U.S.C. 601– 

612), AMS is required to examine the 

impact of the proposed rule on small 

entities. Accordingly, AMS has 

considered the economic impact of this 

action on small entities. 

The purpose of the RFA is to fit 

regulatory actions to the scale of 

businesses subject to such actions so 

that small businesses will not be 

disproportionately burdened. The Small 

Business Administration defines, in 13 

CFR Part 121, small agricultural 

producers as those having annual 

receipts of no more than $750,000 and 

small agricultural service firms 

(domestic manufacturers and importers) 

as those having annual receipts of no 

more than $7.0 million. 

According to USDA’s Forest Service, 

it is estimated that, between 2007 and 

2009, there were an average of 595 

domestic manufacturers of softwood 

lumber in the United States annually.14

This number represents separate 

business entities; one business entity 

may include multiple sawmills. Using 

an average price of $280 per thousand 

board feet, a domestic manufacturer 

who ships less than 25 million board 

feet per year would be considered a 

small entity. It is estimated that, 

between 2007 and 2009, about 363 

domestic manufacturers, or about 61 

percent 15, shipped less than 25 million 

board feet annually. 

Likewise, according to Customs data, 

it is estimated that, between 2007 and 

2009, there were about 883 importers of 

softwood lumber annually. About 798 

importers, or about 90 percent, imported 

less than $7.0 million worth of softwood 

lumber annually. Thus, the majority of 

domestic manufacturers and importers 

of softwood lumber would be 

considered small entities. 

Regarding value of the commodity, 

with domestic production averaging 

29.5 billion board feet (2007 and 2008), 

and using an average price for those 

years of $268 per thousand board feet 16, 

the average annual value for softwood 

lumber is about $7.9 billion. According 

to Customs data, the average annual 

value for softwood lumber imports for 

2007 and 2008 is about $4.7 billion. 

This rule invites comments on a 

proposed industry-funded research, 

promotion, and information program for 

softwood lumber. Softwood lumber is 

used in products like flooring, siding 

and framing. The program would be 

financed by an assessment on softwood 

lumber domestic manufacturers and 

importers and would be administered 

by a board of industry members selected 

by the Secretary. The initial assessment 

rate would be $0.35 per thousand board 

feet shipped within or imported to the 

United States and could be increased to 

$0.50 per thousand board feet. Entities 

that ship or import less than 15 million 

board feet would be exempt along with 

shipments exported outside of the 

United States. No entity would pay 

assessments on the first 15 million 

board feet shipped or imported. The 

purpose of the program would be to 

strengthen the position of softwood 

lumber in the marketplace, maintain 

and expand markets for softwood 

lumber, and develop new uses for 

softwood lumber within the United 

States. A referendum would be held 

among eligible domestic manufacturers 

and importers to determine whether 


jlentini on DSKJ8SOYB1PROD with PROPOSALS2
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17Spelter, H.D. McKeever, M. Alderman, Profile 

2007: Softwood Sawmills in the United States and 

Canada, USDA, p. 10. 

they favor implementation of the 

program prior to it going into effect. A 

majority of entities by both number and 

volume would have to support the 

program for it to be implemented. The 

program is authorized under the 1996 

Act. 

Regarding the economic impact of the 

proposed Order on affected entities, 

softwood lumber domestic 

manufacturers and importers would be 

required to pay assessments to the 

Board. As previously mentioned, the 

initial assessment rate would be $0.35 

per thousand board feet shipped within 

or imported to the United States and 

could be increased to no more than 

$0.50 per thousand board feet. 

The Order would provide for an 

exemption for domestic manufacturers 

and importers who ship or import less 

than 15 million board feet annually. Of 

the 595 domestic manufacturers, it is 

estimated that about 232, or 39 percent, 

ship less than 15 million board feet per 

year and would thus be exempt from 

paying assessments under the proposed 

Order. Of the 883 importers, it is 

estimated that about 780, or 88 percent, 

import less than 15 million board feet 

per year and would also be exempt from 

paying assessments. Thus, about 363 

domestic manufacturers and 103 

importers would pay assessments under 

the Order. It is estimated that if $17.5 

million were collected in assessments 

($0.35 per thousand board feet 

assessment rate with 50 billion board 

feet assessed), 25 percent, or about $4 

million, would be paid by importers and 

75 percent, or about $13 million, would 

be paid by domestic manufacturers. 

Regarding the impact on the industry 

as a whole, the proposed program is 

expected to grow markets for softwood 

lumber by stopping the erosion of 

market share in single family residential 

market, increasing the market share in 

multi-family residential construction, 

significantly increasing the use of 

softwood lumber in non-residential 

markets, and rebuilding softwood 

lumber’s share in the outdoor living 

market. The BRC estimates the longterm market growth opportunity in the 

non-residential market and the raised 

wood segment of the residential market 

is between 10 and 12 billion board feet. 

USDA’s Forest Service in a 2007 study 

estimated a more conservative potential 

growth at around 8 billion board feet.17

While the benefits of the proposed 

program are difficult to quantify, the 

benefits are expected to outweigh the 

program’s costs. 

Regarding alternatives, the BRC 

considered various options to the 

proposed range in assessment rates and 

options to the proposed exemption. The 

BRC believes that $20 million in 

assessment income is the threshold for 

an effective program that could help to 

improve the market for softwood 

lumber. Table 3 below shows the range 

in assessments projected at various 

industry shipment levels per year. 

TABLE 3—PROJECTED INCOME GENERATED AT VARIOUS ASSESSMENT RATES AND SHIPMENT LEVELS 1

Assessment options 

(per thousand board feet) 

Annual shipment levels 

(billion board feet) 

40 50 60 

$0.25 .............................................. $10 million .................................... $12.5 million ................................. $15 million 

$0.35 .............................................. $14 million .................................... $17.5 million ................................. $21 million 

$0.50 .............................................. $20 million .................................... $25 million .................................... $30 million 

1Assumes no exemption. 

Regarding exemption levels, the BRC 

explored projected assessment income 

at exemption levels of 15, 20, and 30 

million board feet. With a 15 million 

board foot exemption, the BRC projected 

a deduction of 11.3 percent in 

assessment income. Table 4 below 

shows the BRC’s projected income 

levels at various assessment options in 

light of the proposed 15 million board 

foot exemption. 

TABLE 4—PROJECTED INCOME GENERATED AT VARIOUS ASSESSMENT RATES AND SHIPMENT LEVELS 1

Assessment options 

(per thousand board feet) 

Annual shipment levels 

(billion board feet) 

40 50 60 

$0.25 .............................................. $8.9 million ................................... $11.1 million ................................. $13.3 million 

$0.35 .............................................. $12.4 million ................................. $15.5 million ................................. $18.9 million 

$0.50 .............................................. $17.7 million ................................. $22.2 million ................................. $26.6 million 

1Assumes 15 million board foot exemption. 

Ultimately the BRC concluded that an 

assessment rate range of $0.35 to a 

maximum of $0.50 per thousand board 

feet with an exemption threshold of 15 

million board feet was appropriate and 

would generate sufficient income to 

support an effective promotion program 

for softwood lumber. At an initial 

assessment rate of $0.35 per thousand 

board feet, the BRC projects assessment 

income between $12.4 million and 

almost $19 million with shipment levels 

ranging from 40 to 60 billion board feet, 

respectively. 

The industry explored the merits of a 

voluntary promotion program. Over the 

years, the industry organized various 

public outreach, education and 

promotion campaigns funded through 

voluntary assessments. Although some 

were partially effective, none fully 

accomplished their objectives and the 

gains either disappeared quickly or 

eroded over time once the campaigns 

were terminated. 

This action would impose additional 

reporting and recordkeeping burden on 


jlentini on DSKJ8SOYB1PROD with PROPOSALS2
61014 Federal Register / Vol. 75, No. 190 / Friday, October 1, 2010 / Proposed Rules 

domestic manufacturer and importers of 

softwood lumber. Domestic 

manufacturers and importers interested 

in serving on the Board may be asked 

to submit a nomination form to the 

Board indicating their desire to serve or 

nominating another industry member to 

serve on the Board. Interested persons 

could also submit a background 

statement outlining their qualifications 

to serve on the Board. Except for the 

initial Board nominations, domestic 

manufacturers and importers would 

have the opportunity to cast a ballot and 

vote for candidates to serve on the 

Board. Domestic manufacturer and 

importer nominees to the Board would 

have to submit a background form to the 

Secretary to ensure they are qualified to 

serve on the Board. 

Additionally, domestic manufacturers 

and importers who ship or import less 

than 15 million board feet annually 

could submit a request to the Board for 

an exemption from paying assessments 

on this volume. Domestic manufacturers 

and importers would also be asked to 

submit a report regarding their 

shipments/imports that would 

accompany their assessments paid to 

the Board. Domestic manufacturers and 

importers who would qualify as 100 

percent organic under the NOP could 

submit a request to the Board for an 

exemption from assessments. Importers 

could also request a refund of any 

assessments paid to Customs. 

Finally, domestic manufacturers and 

importer who wanted to participate in a 

referendum to vote on whether the 

Order should become effective would 

have to complete a ballot for submission 

to the Secretary. These forms are being 

submitted to the OMB for approval 

under OMB Control No. 0581–NEW. 

Specific burdens for the forms are 

detailed later in this document in the 

section titled Paperwork Reduction Act. 

As with all Federal promotion 

programs, reports and forms are 

periodically reviewed to reduce 

information requirements and 

duplication by industry and public 

sector agencies. Finally, USDA has not 

identified any relevant Federal rules 

that duplicate, overlap, or conflict with 

this rule. 

AMS is committed to complying with 

the E–Government Act, to promote the 

use of the Internet and other 

information technologies to provide 

increased opportunities for citizen 

access to Government information and 

services, and for other purposes. 

Regarding outreach efforts, as 

previously mentioned, the Endowment 

conducted a study to assess the 

feasibility of a softwood lumber research 

and promotion program. According to 

the BRC, at the beginning of the study 

(early 2008), in-depth interviews were 

conducted among North American 

softwood lumber industry leaders to 

explore the level of interest in a generic 

promotion program to help grow the 

market for softwood lumber. A sample 

of 35 companies was selected which 

was intended to reflect various levels of 

size and ownership types. Of the 35 

companies surveyed, 86 percent by 

number representing 54 percent of the 

volume favored exploring a mandatory 

promotion program for softwood 

lumber. 

In early 2009, the BRC was formed 

and began a comprehensive process to 

develop a program. According to the 

BRC, its membership is diverse and 

represents 44 percent of softwood 

lumber shipments within the U.S. 

market. Efforts were made to inform 

various associations throughout the 

country through presentations at their 

meetings. 

While USDA has performed this 

initial RFA analysis regarding the 

impact of the proposed rule on small 

entities, in order to have as much data 

as possible for a more comprehensive 

analysis, we invite comments 

concerning potential effects. USDA is 

also requesting comments regarding the 

number and size of entities covered 

under the proposed Order. 

Paperwork Reduction Act 

In accordance with the Paperwork 

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

Chapter 35), AMS announces its 

intention to request an approval of a 

new information collection and 

recordkeeping requirements for the 

proposed lumber 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: 

Awaiting renewal. 

Title: National Research, Promotion, 

and Consumer Information Programs. 

OMB Number: 0581–NEW. 

Expiration Date of Approval: 3 years 

from approval date. 

Type of Request: New information 

collection for research and promotion 

programs. 

Abstract: The information collection 

requirements in the request are essential 

to carry out the intent of the 1996 Act. 

The information collection concerns a 

proposal received by USDA for a 

national research and promotion 

program for the softwood lumber 

industry. The program would be 

financed by an assessment on softwood 

lumber domestic manufacturers and 

importers and would be administered 

by a board of industry members selected 

by the Secretary. The program would 

provide for an exemption for the first 15 

million board feet of softwood lumber 

shipped by domestic manufacturers 

within the United States or imported 

into the United States during the year. 

A referendum would be held among 

eligible domestic manufacturers and 

importers to determine whether they 

favor implementation of the program 

prior to it going into effect. The purpose 

of the program would be to help build 

the market for softwood lumber. 

In summary, the information 

collection requirements under the 

program concern Board nominations, 

the collection of assessments, and 

referenda. For Board nominations, 

domestic manufacturers and importers 

interested in serving on the Board 

would be asked to submit a 

‘‘Nomination Form’’ to the Board 

indicating their desire to serve or to 

nominate another industry member to 

serve on the Board. Interested persons 

could also submit a background 

statement outlining qualifications to 

serve on the Board. Except for the initial 

Board nominations, domestic 

manufacturers and importers would 

have the opportunity to submit a 

‘‘Nomination Ballot’’ to the Board where 

they would vote for candidates to serve 

on the Board. Nominees would also 

have to submit a background 

information form, ‘‘AD–755,’’ to the 

Secretary to ensure they are qualified to 

serve on the Board. 

Regarding assessments, domestic 

manufacturers and importers who ship 

or import less than 15 million board feet 

annually could submit a request, 

‘‘Application for Exemption from 

Assessments,’’ to the Board for an 

exemption from paying assessments. 

Domestic manufacturers and importers 

would be asked to submit a ‘‘Shipment/ 

Import Report’’ that would accompany 

their assessments paid to the Board and 

report the quantity of softwood lumber 

shipped domestically or imported 

during the applicable period, the 

quantity exported from the United 

States, the quantity for which 

assessments were paid, and the country 

of export (for imports). Domestic 

manufacturers who ship less than 15 

million board feet annually and are 

exempt from paying assessments would 

not be required to submit this report. 

Additionally, only importers who pay 

their assessments directly to the Board 

would be required to submit this report. 

As previously mentioned, the majority 

of importer assessments would be 

collected by Customs. Customs would 


jlentini on DSKJ8SOYB1PROD with PROPOSALS2
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remit the funds to the Board and the 

other information would be available 

from Customs (i.e., country of export, 

quantity of softwood lumber imported). 

Finally, domestic manufacturers and 

importers who would qualify as 100 

percent organic under the NOP could 

submit an ‘‘Organic Exemption Form’’ to 

the Board and request an exemption 

from assessments. Importers could also 

request a refund of any assessments 

paid to Customs. 

There would also be an additional 

burden on domestic manufacturers and 

importers voting in referenda. The 

referendum ballot, which represents the 

information collection requirement 

relating to referenda, is addressed in a 

proposed rule on referendum 

procedures which is published 

separately in this issue of the Federal 

Register. 

Information collection requirements 

that are included in this proposal 

include: 

(1) Nomination Form 

Estimate of Burden: Public 

recordkeeping burden for this collection 

of information is estimated to average 

0.25 hour per application. 

Respondents: Domestic manufacturers 

and importers. 

Estimated Number of Respondents: 

50. 

Estimated Number of Responses per 

Respondent: 1. 

Estimated Total Annual Burden on 

Respondents: 12.5 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: Domestic manufacturers 

and importers. 

Estimated Number of Respondents: 

50. 

Estimated Number of Responses per 

Respondent: 1. 

Estimated Total Annual Burden on 

Respondents: 12.5 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: 

300. 

Estimated Number of Responses per 

Respondent: 1. 

Estimated Total Annual Burden on 

Respondents: 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: Domestic manufacturers 

and importers. 

Estimated number of Respondents: 13 

(38 for initial nominations to the Board, 

0 for the second year, and up to 13 

annually thereafter). 

Estimated number of Responses per 

Respondent: 1 every 3 years. (0.3) 

Estimated Total Annual Burden on 

Respondents: 19 hours for the initial 

nominations to the Board, 0 hours for 

the second year of operation, and up to 

6.5 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 

domestic manufacturer or importer 

reporting on softwood lumber shipped 

domestically or imported. Upon 

approval of an application, domestic 

manufacturers and importers would 

receive exemption certification. 

Respondents: Domestic manufacturers 

(232) and importers (780) who ship 

domestically or import less than 15 

million board feet of softwood lumber 

annually. 

Estimated number of Respondents: 

1,012. 

Estimated number of Responses per 

Respondent: 1. 

Estimated Total Annual Burden on 

Respondents: 253 hours. 

(6) Shipment/Import Report 

Estimate of Burden: Public reporting 

burden for this collection of information 

is estimated to average 0.5 hour per 

domestic manufacturer or importer. 

Respondents: Domestic manufacturers 

who ship over 15 million board feet 

annually (363) and importers who remit 

their assessments directly to the Board 

(assume 5 percent of 103 importers, or 

5). 

Estimated number of Respondents: 

368. 

Estimated number of Responses per 

Respondent: 4. 

Estimated Total Annual Burden on 

Respondents: 736 hours. 

(7) 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 domestic 

manufacturers and importers. 

Estimated Number of Respondents: 1. 

Estimated Number of Responses per 

Respondent: 1. 

Estimated Total Annual Burden on 

Respondents: 0.5 hour. 

(8) Refund of Assessments Paid on 

Organic Softwood Lumber 

Estimate of Burden: Public reporting 

burden for this collection of information 

is estimated to average 0.25 hour. 

Respondents: Organic importers. 

Estimated Number of Respondents: 1. 

Estimated Number of Responses per 

Respondent: 1. 

Estimated Total Annual Burden on 

Respondents: 0.25 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: Domestic 

manufacturers (595) and importers 

(883). 

Estimated number of recordkeepers: 

1,478. 

Estimated total recordkeeping hours: 

739 hours. 

As noted above, under the proposed 

program, domestic manufacturers and 

importers would be required to pay 

assessments and file reports with and 

submit assessments to the Board 

(importers through Customs). While the 

proposed Order would impose certain 

recordkeeping requirements on 

domestic manufacturers and importers, 

information required under the 

proposed Order could be compiled from 

records currently maintained. Such 

records shall be retained for at least two 

years beyond the fiscal year of their 

applicability. 

An estimated 1,478 respondents 

would provide information to the Board 

(595 domestic manufacturers and 883 

importers). The estimated cost of 

providing the information to the Board 

by respondents would be $24,387. This 

total has been estimated by multiplying 

739 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 Statistics. 

The proposed Order’s provisions have 

been carefully reviewed, and every 

effort has been made to minimize any 

unnecessary recordkeeping costs or 

requirements, including efforts to utilize 

information already submitted under 

other programs administered by USDA 

and other State programs. 


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The proposed forms would 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 would be simple, easy to 

understand, and place as small a burden 

as possible on the person required to file 

the information. 

Collecting information quarterly 

would coincide with normal industry 

business practices. The timing and 

frequency of collecting information are 

intended to meet the needs of the 

industry while minimizing the amount 

of work necessary to fill out the required 

reports. The requirement to keep 

records for two years is consistent with 

normal industry practices. In addition, 

the information to be included on these 

forms is not available from other sources 

because such information relates 

specifically to individual domestic 

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. 

Request for Public Comment Under the 

Paperwork Reduction Act 

Comments are invited on: (a) Whether 

the proposed collection of information 

is necessary for the proper performance 

of functions of the proposed Order and 

USDA’s oversight of the proposed 

Order, including whether the 

information would have practical 

utility; (b) the accuracy of USDA’s 

estimate of the burden of the proposed 

collection of information, including the 

validity of the methodology and 

assumptions used; (c) the accuracy of 

USDA’s estimate of the principal 

manufacturing areas in the United 

States for softwood lumber; (d) the 

accuracy of USDA’s estimate of the 

number of domestic manufacturers and 

importers of softwood lumber 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. 

Comments concerning the 

information collection requirements 

contained in this action should 

reference OMB No. 0581–NEW. In 

addition, the docket number, date, and 

page number of this issue of the Federal 

Register also should be referenced. 

Comments should be sent to the same 

addresses referenced in the ADDRESSES

section of this rule. 

OMB is required to make a decision 

concerning the collection of information 

contained in this rule between 30 and 

60 days after publication. Therefore, a 

comment to OMB is best assured of 

having its full effect if OMB receives it 

within 30 days of publication. 

USDA made modifications to the 

proponent’s proposal to conform with 

other similar national research and 

promotion programs implemented 

under the 1996 Act. 

While the proposal set forth below 

has not received the approval of USDA, 

it is determined that this proposed 

Order is consistent with and would 

effectuate the purposes of the 1996 Act. 

As previously mentioned, for the 

proposed Order to become effective, it 

must be approved by a majority of 

domestic manufacturers and importers 

voting for approval in a referendum who 

also represent a majority of the volume 

of softwood lumber represented in the 

referendum. Referendum procedures 

will be published separately in this 

issue of the Federal Register. 

A 60-day comment period is provided 

to allow interested persons to respond 

to this proposal. All written comments 

received in response to this rule by the 

date specified will be considered prior 

to finalizing this action. 

List of Subjects in 7 CFR Part 1217 

Administrative practice and 

procedure, Advertising, Consumer 

information, Marketing agreements, 

Softwood Lumber promotion, Reporting 

and recordkeeping requirements. 

For the reasons set forth in the 

preamble, it is proposed that Title 7, 

Chapter XI of the Code of Federal 

Regulations be amended by adding part 

1217 to read as follows: 

PART 1217—SOFTWOOD LUMBER 

RESEARCH, PROMOTION, 

CONSUMER EDUCATION AND 

INDUSTRY INFORMATION ORDER 

Subpart A—Softwood Lumber Research, 

Promotion, Consumer Education and 

Industry Information Order 

Definitions 

Sec. 

1217.1 Act. 

1217.2 Blue Ribbon Commission or BRC. 

1217.3 Board. 

1217.4 Board foot. 

1217.5 Conflict of interest. 

1217.6 Customs. 

1217.7 Department or USDA. 

1217.8 Domestic manufacturer. 

1217.9 Export. 

1217.10 Fiscal period or year. 

1217.11 Importer. 

1217.12 Information. 

1217.13 Manufacture. 

1217.14 Manufacturer for the U.S. market. 

1217.15 Marketing. 

1217.16 Nominal size. 

1217.17 Order. 

1217.18 Part and subpart. 

1217.19 Person. 

1217.20 Planing. 

1217.21 Programs, plans and projects. 

1217.22 Promotion. 

1217.23 Research. 

1217.24 Secretary. 

1217.25 Softwood lumber. 

1217.26 Softwoods. 

1217.27 State. 

1217.28 Suspend. 

1217.29 Terminate. 

1217.30 United States. 

Softwood Lumber Board 

1217.40 Establishment and membership. 

1217.41 Nominations and appointments. 

1217.42 Term of office. 

1217.43 Removal and vacancies. 

1217.44 Procedure. 

1217.45 Reimbursement and attendance. 

1217.46 Powers and duties. 

1217.47 Prohibited activities. 

Expenses and Assessments 

1217.50 Budget and expenses. 

1217.51 Financial statements. 

1217.52 Assessments. 

1217.53 Exemption from assessment. 

Promotion, Research and Information 

1217.60 Programs, plans and projects. 

1217.61 Independent evaluation. 

1217.62 Patents, copyrights, inventions, 

product formulations, and publications. 

Reports, Books, and Records 

1217.70 Reports. 

1217.71 Books and records. 

1217.72 Confidential treatment. 

Miscellaneous 

1217.80 Right of the Secretary. 

1217.81 Referenda. 

1217.82 Suspension or termination. 

1217.83 Proceedings after termination. 

1217.84 Effect of termination or 

amendment. 

1217.85 Personal liability. 

1217.86 Separability. 

1217.87 Amendments. 

1217.88 OMB control numbers. 

Subpart B—[Reserved] 

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

7401. 


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Subpart A—Softwood Lumber 

Research, Promotion, Consumer 

Education, and Industry Information 

Order 

Definitions 

§ 1217.1 Act. 

Act means the Commodity Promotion, 

Research, and Information Act of 1996 

(7 U.S.C. 7411–7425), and any 

amendments thereto. 

§ 1217.2 Blue Ribbon Commission. 

Blue Ribbon Commission or BRC 

means the 21-member committee 

representing businesses that 

manufacture softwood lumber in the 

United States or import softwood 

lumber to the United States formed to 

pursue an industry research, promotion, 

and information program. 

§ 1217.3 Board. 

Board or Softwood Lumber Board 

means the administrative body 

established pursuant to § 1217.40, or 

such other name as recommended by 

the Board and approved by the 

Department. 

§ 1217.4 Board foot. 

Board foot or BF means a unit of 

measurement of softwood lumber 

represented by a board 12-inches long, 

12-inches wide, and 1-inch thick or its 

cubic equivalent. A board foot 

calculation for softwood lumber 1 inch 

or more in thickness is based on its 

nominal thickness and width and the 

actual length. Softwood lumber with a 

nominal thickness of less than 1 inch is 

calculated as 1 inch. 

§ 1217.5 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. 

§ 1217.6 Customs. 

Customs means the United States 

Customs and Border Protection or U.S. 

Customs Service, an agency of the 

United States Department of Homeland 

Security. 

§ 1217.7 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. 

§ 1217.8 Domestic manufacturer. 

Domestic manufacturer means any 

person who is a first handler and is 

engaged in the manufacturing, sale and 

shipment of softwood lumber in the 

United States during a fiscal period and 

who owns, or shares the ownership and 

risk of loss of manufacturing of 

softwood lumber or a person who is 

engaged in the business of 

manufacturing, or causes to be 

manufactured, sold and shipped such 

softwood lumber in the United States 

beyond personal use. This term does not 

include any person who remanufactures softwood lumber that has 

already been subject to assessment 

under this Order. 

§ 1217.9 Export. 

Export means to manufacture and 

ship softwood lumber from within the 

United States to locations outside of the 

United States. 

§ 1217.10 Fiscal period or year. 

Fiscal period or year means a calendar 

year from January 1 through December 

31, or such other period as 

recommended by the Board and 

approved by the Secretary. 

§ 1217.11 Importer. 

Importer means any person who 

imports softwood lumber 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 softwood lumber 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 softwood lumber. 

§ 1217.12 Information. 

Information means activities or 

programs designed to disseminate the 

results of research, new and existing 

marketing programs, new and existing 

marketing strategies, new and existing 

uses and applications, and to enhance 

the image of softwood lumber and the 

forests from which it comes. These 

include: 

(a) Consumer education, which means 

any action taken to provide information 

to, and broaden the understanding of, 

the general public regarding softwood 

lumber; and 

(b) Industry information, which 

means information and programs that 

would enhance the image of the 

softwood lumber industry. 

§ 1217.13 Manufacture. 

Manufacture means the process of 

transforming softwood logs into 

softwood lumber. 

§ 1217.14 Manufacturer for the U.S. 

market. 

Manufacturer for the U.S. market 

means domestic manufacturers and 

importers of softwood lumber as defined 

in this Order. 

§ 1217.15 Marketing. 

Marketing means the sale or other 

disposition of softwood lumber in 

interstate, foreign, or intrastate 

commerce. 

§ 1217.16 Nominal size. 

Nominal size means the size by which 

softwood lumber is known and sold in 

the marketplace that differs from actual 

size and is based on the thickness and 

width of a board when it is first cut from 

a log, or rough cut, prior to drying and 

planing. 

§ 1217.17 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. 

§ 1217.18 Part and subpart. 

Part means the Softwood Lumber 

Research, Promotion, Consumer 

Education, and Industry 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. 

§ 1217.19 Person. 

Person means any individual, group 

of individuals, partnership, company, 

corporation, association, affiliate, 

cooperative, or any other legal entity. 

§ 1217.20 Planing. 

Planing means the act of smoothing 

the surface of a board to make the wood 

a uniform size. 

§ 1217.21 Programs, plans and projects. 

Programs, plans and projects mean 

those research, promotion and 

information programs, plans, or projects 

established pursuant to this Order. 

§ 1217.22 Promotion. 

Promotion means any action taken, 

including paid advertising, public 

relations and other communications, 

and promoting the results of research, 

that presents a favorable image of 

softwood lumber to the public and to 

any and all consumers and those who 

influence consumption of softwood 

lumber with the intent of improving the 

perception, markets and competitive 

position of softwood lumber and 

stimulating sales of softwood lumber. 


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§ 1217.23 Research. 

Research means any activity that 

advances the position of softwood 

lumber in the marketplace that includes 

any type of test, study, or analysis 

designed to advance the image, 

desirability, use, marketability, sales, 

product development, or quality of 

softwood lumber; new applications; 

improving softwood lumber’s position 

in building and fire codes; softwood 

lumber product testing and safety; and 

evaluating the effectiveness of market 

development and promotion efforts 

including life cycle studies, forestry, 

sustainable forest management, 

environmental preferrability, 

competitiveness, efficiency, pest and 

disease control, water quality and other 

management aspects of forestry and the 

forests from which softwood lumber 

originates. 

§ 1217.24 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. 

§ 1217.25 Softwood lumber. 

Softwood lumber means all softwood 

lumber and softwood lumber products 

described in section 804(a) of Title VIII 

of the Tariff Act of 1930, as amended 

(19 U.S.C. 1202–1683g). This definition 

does not include those products 

excluded or excepted under sections 

804(b) and (c) of that Act. 

§ 1217.26 Softwood. 

Softwood means one of the botanical 

groups of trees that have needle-like or 

scale-like leaves, or conifers. 

§ 1217.27 State. 

State means any of the several 50 

States of the United States, the District 

of Columbia, the Commonwealth of 

Puerto Rico, and the territories and 

possessions of the United States. 

§ 1217.28 Suspend. 

Suspend means to issue a rule under 

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

temporarily prevent the operation of an 

order or part thereof during a particular 

period of time specified in the rule. 

§ 1217.29 Terminate. 

Terminate means to issue a rule under 

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

permanently the operation of an order 

or part thereof beginning on a date 

certain specified in the rule. 

§ 1217.30 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. 

Softwood Lumber Board 

§ 1217.40 Establishment and membership. 

(a) Establishment of the Board. There 

is hereby established a Softwood 

Lumber Board to administer the terms 

and provisions of this Order and 

promote the use of softwood lumber. 

The Board shall be composed of 

manufacturers for the U.S. market who 

manufacture and domestically ship or 

import 15 million board feet or more of 

softwood lumber in the United States 

during a fiscal period. Seats on the 

Board shall be apportioned based on the 

volume of softwood lumber 

manufactured and shipped within the 

United States by domestic 

manufacturers and the volume of 

softwood lumber imported into the 

United States. 

(b) The Board shall be composed of 18 

or 19 members, depending upon 

whether an additional importer member 

is appointed to the Board, pursuant to 

paragraph (b)(2)(iii) of this section. The 

Board shall be established as follows: 

(1) Domestic manufacturers. Twelve 

members shall be domestic 

manufacturers from the following three 

regions: 

(i) Six members shall be from the U.S. 

South Region, which consists of the 

States of Alabama, Arkansas, Florida, 

Georgia, Louisiana, Mississippi, North 

Carolina, Oklahoma, South Carolina, 

Tennessee, and Texas; 

(ii) Five members shall be from the 

U.S. West Region, which consists of the 

States of Alaska, Arizona, California, 

Colorado, Hawaii, Idaho, Montana, 

Nevada, New Mexico, North Dakota, 

Oregon, South Dakota, Utah, 

Washington, and Wyoming; and 

(iii) One member shall be from the 

Northeast and Lake States Region, 

which consists of the States of 

Connecticut, Delaware, Illinois, Indiana, 

Iowa, Kansas, Kentucky, Maine, 

Maryland, Massachusetts, Michigan, 

Minnesota, Missouri, Nebraska, New 

Hampshire, New Jersey, New York, 

Ohio, Pennsylvania, Rhode Island, 

Virginia, Vermont, West Virginia, 

Wisconsin, and all other parts of the 

United States not listed in paragraphs 

(b)(1)(i), (b)(1)(ii), or (b)(1)(iii) of this 

section. 

(2) Importers. Six members shall be 

importers who represent the following 

regions and import the majority of their 

softwood lumber from the respective 

region: 

(i) Four members shall import 

softwood lumber from the Canadian 

West Region, which consists of the 

provinces of British Columbia and 

Alberta; and 

(ii) Two members shall import 

softwood lumber from the Canadian 

East Region, which consists of the 

Canadian territories and all other 

Canadian provinces not listed in 

paragraph (b)(2)(i) of this section that 

import softwood lumber into the United 

States. 

(iii) If the Secretary, at the request of 

the Board or on his or her own, 

determines that it would be consistent 

with the provisions of the Act, the 

Secretary may appoint an additional 

importer to the Board to represent a 

region not otherwise specified in 

paragraphs (b)(2)(i) and (b)(2)(ii) of this 

section. Nominees would be solicited as 

prescribed in paragraph (b) of § 1217.41, 

or in the case of the Secretary acting on 

his or her own will be handled by the 

Secretary, and all the names of eligible 

candidates would be submitted to the 

Secretary for consideration. Such 

nominees must certify that the majority 

of their softwood lumber is imported 

from such region. In addition, 

representation for the region not 

otherwise specified in paragraphs (b)(i) 

and (ii) of this section would be subject 

to the Board review and 

reapportionment provided for in 

paragraph (c) of this section. 

(c) In each five-year period, but not 

more frequently than once in each threeyear period, the Board shall: 

(1) Review, based on a three-year 

average, the geographical distribution of 

the volume of softwood lumber 

manufactured and shipped within the 

United States by domestic 

manufacturers and the volume of 

softwood lumber imported into the 

United States; and 

(2) If warranted, recommend to the 

Secretary the reapportionment of the 

Board membership to reflect changes in 

the geographical distribution of the 

volume of softwood lumber 

manufactured and shipped within the 

United States by domestic 

manufacturers and the volume of 

softwood lumber imported into the 

United States. The destination of 

volumes between regions also shall be 

considered. Any changes in Board 

composition shall be implemented by 

the Secretary through rulemaking. 

§ 1217.41 Nominations and appointments. 

(a) Initial nominations will be 

submitted to the Secretary by the Blue 

Ribbon Commission. Before considering 

any nominations, the BRC shall 

publicize the nomination process, using 


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trade press or other means it deems 

appropriate, and shall outreach to all 

manufacturers for the U.S. market who 

domestically manufacture and/or import 

15 million board feet or more of 

softwood lumber per fiscal year in order 

to generate nominees that reflect the 

different operations within the softwood 

lumber industry. The BRC may use 

regional caucuses, mail or other 

methods to elicit potential nominees. 

The BRC shall submit the nominations 

to the Secretary and recommend two 

nominees for each Board position 

specified in paragraphs (b)(1) and 

(b)(2)(i) and (b)(2)(ii) of § 1217.40. All 

nominees solicited pursuant to 

§ 1217.40(b)(2)(iii) shall be submitted to 

the Secretary through the BRC. From the 

nominations submitted by the BRC, the 

Secretary shall select the members of 

the Board. 

(b) Subsequent nominations shall be 

conducted as follows: 

(1) The Board shall outreach to all 

segments of the softwood lumber 

industry. Subsequent nominees must 

domestically manufacture and/or import 

15 million board feet or more of 

softwood lumber per fiscal year; 

(2) Domestic manufacturers and 

importer nominees may provide the 

Board a short background statement 

outlining their qualifications to serve on 

the Board; 

(3) Nominees that are both a domestic 

manufacturer and an importer may seek 

nomination to the Board and vote in the 

nomination process as either a domestic 

manufacturer or an importer, but not 

both: Provided, That, such nominees 

who domestically manufacture the 

majority of their softwood lumber may 

seek nomination and vote as a domestic 

manufacturer, and such nominees who 

import the majority of their softwood 

lumber may seek nomination and vote 

as an importer. Such nominees must 

domestically manufacture and import 

15 million board feet or more of 

softwood lumber per fiscal year; 

(4) Domestic manufacturers who 

manufacture softwood lumber in more 

than one region may seek nomination 

only in the region in which they 

manufacture the majority of their 

softwood lumber. The names of 

domestic manufacturer nominees shall 

be placed on a ballot by region. The 

ballots along with the background 

statements shall be mailed to domestic 

manufacturers in each respective region 

for a vote. Domestic manufacturers who 

manufacture softwood lumber in more 

than one region may only vote in the 

region in which they manufacture the 

majority of their softwood lumber. The 

votes shall be tabulated for each region 

with the nominee receiving the highest 

number of votes at the top of the list in 

descending order by vote. The top two 

candidates for each position shall be 

submitted to the Secretary; 

(5) Importer nominees shall certify 

that the majority of their softwood 

lumber is imported from the respective 

region for which they are seeking to 

represent on the Board and shall 

provide documentation to verify this if 

requested by the Board. The names of 

importer nominees shall be placed on a 

ballot by region. The ballots along with 

the background statements shall be 

mailed to importers in each respective 

region for a vote. Importers who import 

softwood lumber from more than one 

region may only vote in the region from 

which they import the majority of their 

softwood lumber. The votes shall be 

tabulated for each region with the 

nominee receiving the highest number 

of votes at the top of the list in 

descending order by vote. The top two 

candidates for each position shall be 

submitted to the Secretary. 

(6) The Board must submit 

nominations to the Secretary at least six 

months before the new Board term 

begins. From the nominations submitted 

by the Board, the Secretary shall select 

the members of the Board; 

(7) No two members shall be 

employed by a single corporation, 

company, partnership, or any other legal 

entity; and 

(8) 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. 

§ 1217.42 Term of office. 

(a) With the exception of the initial 

Board, each Board member will serve a 

three-year term or until the Secretary 

selects his or her successor. Each term 

of office shall begin on January 1 and 

end on December 31. No member may 

serve more than two consecutive terms, 

excluding any term of office less than 

three years. 

(b) For the initial board, the terms of 

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 

Blue Ribbon Commission. 

§ 1217.43 Removal and vacancies. 

(a) In the event that any member of 

the Board ceases to work for or be 

affiliated with a domestic manufacturer 

or importer or ceases to do business in 

the region he or she represents, such 

position shall become vacant. 

(b) The Board may recommend to the 

Secretary that a member be removed 

from office if the member consistently 

refuses to perform his or her duties or 

engages in dishonest acts or willful 

misconduct. The Secretary may remove 

the member if he or she finds that the 

Board’s recommendation shows 

adequate cause. Further, without 

recommendation of the Board, a 

member may be removed by the 

Secretary upon showing of adequate 

cause, including the failure by a 

member to submit reports or remit 

assessments required under this part, if 

the Secretary determines that such 

member’s continued service would be 

detrimental to the achievement of the 

purposes of the Act. 

(c) If a position becomes vacant, 

nominations to fill the vacancy will be 

conducted using the nominations 

process set forth in this Order. A 

vacancy will not be required to be filled 

if the unexpired term is less than six 

months. 

§ 1217.44 Procedure. 

(a) A majority of the Board members 

(10) will constitute a quorum so long as 

at least three of the members present are 

importer members and six of the 

members present are domestic 

manufacturers. If participation by 

telephone or other means is permitted, 

members participating by such means 

shall count as present in determining 

quorum or other voting requirements set 

forth in this section. 

(b) All votes at meetings of the Board 

and executive committee will be cast in 

person or by electronic voting or other 

means as the Board and Secretary deem 

appropriate to allow members 

participating by telephone or other 

electronic means to cast votes. Voting by 

proxy will not be allowed. 

(c) Each member of the Board will be 

entitled to one vote on any matter put 

to the Board and the motion will carry 

if supported by 10 Board members, 

except for recommendations to change 

the assessment rate or to adopt a budget, 

both of which require affirmation by at 

least two-thirds (12 members for an 18 

member Board and 13 members for a 19 

member Board) of the Board members. 

If a Board has vacant positions, 

recommendations to change the 

assessment rate or to adopt a budget 

must pass by an affirmative vote of at 

least two-thirds of the Board members, 

exclusive of the vacant seats. 

(d) The Board must give members and 

the Secretary timely notice of all Board, 

executive and committee meetings. 

(e) In lieu of voting at a properly 

convened meeting, and when, in the 

opinion of the Board’s chairperson, such 


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action is considered necessary, the 

Board may take action by mail, 

telephone, electronic mail, facsimile, or 

any other means of communication. 

Any action taken under this procedure 

is valid only if: 

(1) All members and the Secretary are 

notified and the members are provided 

the opportunity to vote; 

(2) Ten (10) Board members vote in 

favor of the action (unless two-thirds 

vote of the Board members is required 

under the Order); and 

(3) All votes are promptly confirmed 

in writing and recorded in the Board 

minutes. 

§ 1217.45 Reimbursement and attendance. 

Board members will serve without 

compensation. Board members will be 

reimbursed for reasonable travel 

expenses, as approved by the Board, 

which they incur when performing 

Board business. 

§ 1217.46 Powers and duties. 

The Board shall have the following 

powers and duties: 

(a) To administer this Order in 

accordance with its terms and 

conditions and to collect assessments; 

(b) To develop and recommend to the 

Secretary for approval such bylaws as 

may be necessary for the functioning of 

the Board and such rules, regulations as 

may be necessary to administer the 

Order, including activities authorized to 

be carried out under the Order; 

(c) To meet, organize, and select from 

among its members a chairperson and, 

such other officers as may be necessary; 

(d) To create an executive committee 

of five members of the Board comprised 

of the chairperson and four other 

members elected by the Board. The 

duties of the executive committee shall 

be specified in bylaws that are 

recommended by the Board and 

approved by the Secretary; 

(e) To create other committees or 

subcommittees, which may include 

individuals other than Board members, 

as the Board deems necessary from its 

membership and other representatives it 

deems appropriate; 

(f) To employ or contract with such 

persons, other than the members, as it 

may deem necessary to assist the Board 

in carrying out its duties, and to 

determine the compensation and define 

the duties of each; 

(g) To notify manufacturers for the 

U.S. market of all Board meetings 

through press releases or other means 

and to give the Secretary the same 

notice of Board meetings, executive 

committee, and subcommittee meetings 

that is given to members in order that 

the Secretary’s representative(s) may 

attend such meetings, and to keep and 

report minutes of each meeting to the 

Secretary; 

(h) To develop and administer 

programs, plans, and projects and enter 

into contracts or agreements, which 

must be approved by the Secretary 

before becoming effective, for 

promotion, research, and information, 

including consumer and industry 

information, research and advertising 

designed to strengthen the softwood 

lumber industry’s position in the 

marketplace and to maintain, develop, 

and expand markets for softwood 

lumber. The payment of costs for such 

activities shall be with funds collected 

pursuant to the Order, including funds 

collected pursuant to § 1217.50(f). Each 

contract or agreement shall provide that: 

(1) The contractor or agreeing party 

shall develop and submit to the Board 

a program, plan, or project together with 

a budget that specifies the cost to be 

incurred to carry out the activity; 

(2) The contractor or agreeing party 

shall keep accurate records of all of its 

transactions and make periodic reports 

to the Board of activities conducted, 

submit accounting for funds received 

and expended, and make such other 

reports as the Secretary or Board may 

require; 

(3) The Secretary may audit the 

records of the contracting or agreeing 

party periodically; and 

(4) Any subcontractor who enters into 

a contract with a Board contractor and 

who receives or otherwise uses funds 

allocated by the Board shall be subject 

to the same provisions as the contractor. 

(i) To prepare and submit to the 

Secretary for approval 60 calendar days 

in advance of the beginning of a fiscal 

period, rates of assessment and a budget 

of the anticipated expenses to be 

incurred in the administration of the 

Order, including the probable cost of 

each promotion, research, and 

information activity proposed to be 

developed or carried out by the Board; 

(j) To borrow funds necessary for 

startup expenses of the Order; 

(k) To invest assessments collected 

and other funds received pursuant to 

the Order and use earnings from 

invested assessments to pay for 

activities carried out pursuant to the 

Order; 

(l) To recommend changes to the 

assessment rates as provided in this 

part; 

(m) To cause its books to be audited 

by a certified public accountant at the 

end of each fiscal period and at such 

other times as the Secretary may 

request, and to submit a report of each 

audit directly to the Secretary; 

(n) To periodically prepare and make 

public and to make available to 

manufacturers for the U.S. market 

reports of its activities and, at least once 

each fiscal period, to make public an 

accounting of funds received and 

expended; 

(o) To maintain minutes, books, and 

records and prepare and submit to the 

Secretary such reports from time to time 

as may be required for appropriate 

accounting with respect to the receipt 

and disbursement of funds entrusted to 

it, and to submit to the Secretary such 

information pertaining to this part or 

subpart as he or she may request; 

(p) To act as an intermediary between 

the Secretary and any manufacturer for 

the U.S. market; 

(q) To investigate and to receive and 

investigate and report to the Secretary 

complaints of violations of the Order; 

and 

(r) To develop and recommend such 

rules and regulations to the Secretary for 

approval as may be necessary for the 

development and execution of plans or 

activities to effectuate the purposes of 

the Act. 

§ 1217.47 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 or 

misleading or disparaging to another 

agricultural commodity. Softwood 

lumber of all origins shall be treated 

equally. 

Expenses and Assessments 

§ 1217.50 Budget and expenses. 

(a) At least 60 calendar days prior to 

the beginning of each fiscal period, and 

as may be necessary thereafter, the 

Board shall prepare and submit to the 

Department a budget for the fiscal 

period 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 


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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. 

(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, and is encouraged to seek 

other appropriate funding sources to 

carry out activities authorized by the 

Order. Such contributions shall be free 

from any encumbrances by the donor 

and the Board shall retain complete 

control of their use. The Board may 

receive funds from outside sources (i.e., 

Federal or State grants, Foreign 

Agricultural Service funds), 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. 

(h) For fiscal years beginning two 

years after the date the of the first Board 

meeting, the Board may not expend for 

administration, maintenance, and the 

functioning of the Board an amount that 

is greater than 8 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 periods 

excess funds in any reserve so 

established: Provided, That, the funds in 

the reserve do not exceed one fiscal 

period’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. 

§ 1217.51 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. 

§ 1217.52 Assessments. 

(a) The Board’s programs and 

expenses shall be paid by assessments 

on manufacturers for the U.S. market, 

other income of the Board, and other 

funds available to the Board. 

(b) Subject to the exemptions 

specified in § 1217.53, each 

manufacturer for the U.S. market shall 

pay an assessment to the Board at the 

rate of $0.35 per thousand board feet of 

softwood lumber except that no person 

shall pay an assessment on the first 15 

million board feet of softwood lumber 

otherwise subject to assessment in a 

fiscal year. Domestic manufacturers 

shall pay assessments based on the 

volume of softwood lumber shipped 

within the United States and importers 

shall pay assessments based on the 

volume softwood lumber imported to 

the United States. 

(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 by at least two-thirds 

of the Board members, a change in the 

assessment rate. In no event may the 

rate be less than $0.35 per thousand 

board feet nor more than $0.50 per 

thousand board feet. 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 thirtieth calendar day of 

the month following the end of the 

quarter in which the softwood lumber 

was shipped. 

(e) Each importer of softwood lumber 

shall pay through Customs to the Board 

an assessment on softwood lumber and 

softwood lumber products imported 

into the United States as described in 

section 804(a) of Title VIII of the Tariff 

Act of 1930, as amended (19 U.S.C. 

1202–1683g). 

(f) The following conversion factors 

shall be used to determine the 

equivalent volume of softwood lumber 

in thousand board feet. The factor used 

to convert one cubic meter to one 

thousand board feet is 0.423776001. The 

current assessment rate per one cubic 

meter is $0.1483. The factor used to 

convert the value in dollars to one 

thousand board feet is 0.0031746 and is 

based on an average of $315 per one 

thousand board feet. The current 

assessment rate per dollar value is 

$0.0011. The Board may recommend to 

the Secretary, upon affirmative vote by 

at least two-thirds of the Board 

members, a change in the factors used 

to convert value in dollars to one 

thousand board feet. Such a change is 

subject to rulemaking by the Secretary. 

(g) 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 importation. 

(h) When a domestic 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 


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remit total assessments due in a timely 

manner may also be subject to actions 

under Federal debt collection 

procedures. 

(i) The Board may accept advance 

payment of assessments from any 

manufacturer for the U.S. market that 

will be credited toward any amount for 

which that person may become liable. 

The Board may not pay interest on any 

advance payment. 

(j) 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. 

§ 1217.53 Exemption from assessment. 

(a) Manufacturers for the U.S. market 

who domestically ship and/or import 

less than 15 million board feet annually. 

(1) Domestic manufacturers who ship 

less than 15 million board feet of 

softwood lumber within the United 

States in a fiscal 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 fiscal year. This is an annual 

exemption and domestic manufacturers 

must reapply each year. Such 

manufacturers shall certify that they 

will ship less than 15 million board feet 

of softwood lumber during the fiscal 

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 

shipment data to support the exemption 

request. The Board will then issue, if 

deemed appropriate, a certificate of 

exemption to the eligible domestic 

manufacturer. It is the responsibility of 

the domestic manufacturer to retain a 

copy of the certificate of exemption. 

(2) Importers who import into the 

United States less than 15 million board 

feet of softwood lumber in a fiscal year 

are exempt from paying assessments. 

Such importers must apply to the Board, 

on a form provided by the Board, for a 

certificate of exemption prior to the start 

of the fiscal year. This is an annual 

exemption and importers must reapply 

each year. Such importers shall certify 

that they will import less than 15 

million board feet of softwood lumber 

during the fiscal year for which the 

exemption is claimed. Upon receipt of 

an application for exemption, the Board 

shall determine whether an exemption 

is granted. The Board may request past 

import data to support the exemption 

request. The Board will then 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. The Board shall refund such 

importers their assessments as collected 

by Customs no later than 60 calendar 

days after receipt of such assessments 

by the Board. No interest shall be paid 

on the assessments collected by 

Customs. 

(3) Domestic manufacturers who did 

not apply to the Board for an exemption 

and shipped less than 15 million board 

feet of softwood lumber within the 

United States during the fiscal year shall 

receive a refund from the Board for the 

applicable assessments within 30 

calendar days after the end of the fiscal 

year. Board staff shall determine the 

assessments paid and refund the 

amount due to the domestic 

manufacturer accordingly. 

(4) Importers who did not apply to the 

Board for an exemption and imported 

less than 15 million board feet of 

softwood lumber during the fiscal year 

shall receive a refund from the Board for 

the applicable assessments within 30 

calendar days after the end of the fiscal 

year. 

(5) If an entity is both a domestic 

manufacturer and an importer, such 

entity’s domestic shipments and 

imports during a fiscal year shall count 

towards the 15 million board feet 

exemption. 

(6) Domestic manufacturers and 

importers who received an exemption 

certificate from the Board but shipped 

or imported 15 million board feet or 

more of softwood lumber during the 

fiscal year shall pay the Board the 

applicable assessments owed on the 

domestic shipments or imports over the 

15 million board foot-exemption 

threshold within 30 calendar days after 

the end of the fiscal year and submit any 

necessary reports to the Board pursuant 

to § 1217.70. 

(7) The Board may develop additional 

procedures to administer this exemption 

as appropriate. Such procedures shall be 

implemented through rulemaking by the 

Secretary. 

(b) Manufacturers for the U.S. market 

who domestically ship or import over 15 

million board feet annually. 

(1) Domestic manufacturers who 

domestically ship more than 15 million 

board feet per fiscal year shall not pay 

assessments on their first 15 million 

board feet of softwood lumber shipped 

during the applicable fiscal year. 

(2) Importers who import more than 

15 million board feet per fiscal year 

shall be exempt from paying 

assessments on their first 15 million 

board feet of softwood lumber imported 

during the applicable fiscal year. Such 

importers shall receive a refund from 

the Board for the applicable assessments 

collected by Customs. The Board shall 

refund such importers their assessments 

no later than 60 calendar days after 

receipt by the Board. 

(c) Export. Shipments of softwood 

lumber by domestic manufacturers to 

locations outside of the United States 

are exempt from assessment. The Board 

shall establish procedures for approval 

by the Secretary for refunding 

assessments that may be paid on such 

shipments and establish any necessary 

safeguards as deemed appropriate. 

Safeguard procedures would be 

implemented by the Secretary through 

rulemaking. The Board may also 

recommend to the Secretary that such 

shipments be assessed if it deems 

appropriate. Such action shall be 

implemented by the Secretary through 

rulemaking. 

(d) Organic. 

(1) Organic Act means section 2103 of 

the Organic Foods Production Act of 

1990 (7 U.S.C. 6502). 

(2) A domestic manufacturer who 

operates under an approved National 

Organic Program (NOP) (7 CFR part 205) 

system plan, only manufactures and 

ships softwood lumber 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 domestic 

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 

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 

softwood lumber 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 


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on 100 percent of organic softwood 

lumber, 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 domestic manufacturers in 

paragraph (d)(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 Harmonized 

Tariff Schedule of the United States 

(HTSUS) classification valid for 1 year 

from the date of issue. This HTSUS 

classification should be entered by the 

importer on the Customs entry 

documentation. Any line item entry of 

100 percent organic softwood lumber 

bearing this HTSUS classification 

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 

§ 1217.60 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, education and 

other activities including consumer and 

industry information and advertising 

designed to: 

(1) Maintain, develop, expand and 

grow markets for softwood lumber; 

(2) Enhance and strengthen the image, 

reputation and public acceptance of 

softwood lumber and the forests from 

which it comes; 

(3) Develop new markets and 

marketing strategies for softwood 

lumber; 

(4) Expand the knowledge and 

understanding of the strength, safety 

and technical applications and 

encourage innovation in the use of 

softwood lumber; 

(5) Transfer and disseminate the 

knowledge and understanding of the 

strength, safety, environmental and 

sustainable benefits and technical 

applications of softwood lumber; and 

(6) Develop, expand and grow existing 

and new opportunities and applications 

for softwood lumber. 

(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 

plan or program. 

§ 1217.61 Independent evaluation. 

At least once every five years, the 

Board shall authorize and fund from 

funds otherwise available to the Board, 

an independent evaluation of the 

effectiveness of the Order and the 

programs conducted by the Board 

pursuant to the Act. The Board shall 

submit to the Secretary, and make 

available to the public, the results of 

each periodic independent evaluation 

conducted under this paragraph. 

§ 1217.62 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, publications, or product 

formulations, 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, § 1217.83 

shall apply to determine disposition of 

all such property. 

Reports, Books, and Records 

§ 1217.70 Reports. 

(a) Each manufacturer for the U.S. 

market 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)(i) For domestic manufacturers: 

(A) The name, address and telephone 

number of the domestic manufacturer; 

(B) The board feet of softwood lumber 

shipped within the United States; 

(C) The board feet of softwood lumber 

for which assessments were paid; and 

(D) The board feet of softwood lumber 

that was exported. 

(ii) Such information shall accompany 

the collected payment of assessments on 

a quarterly basis specified in § 1217.52. 

(2) For importers: 

(i) The name, address and telephone 

number of the importer; 

(ii) The board feet of softwood lumber 

imported; 

(iii) The board feet of softwood 

lumber for which assessments were 

paid; and 

(iv) The country of export. 

(b) For importers who pay their 

assessments directly to the Board, such 

information shall accompany the 

payment of collected assessments 

within 30 calendar days after 

importation specified in § 1217.52. 

§ 1217.71 Books and records. 

Each manufacturer for the U.S. 

market, including those exempt under 

§ 1217.53, 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. Domestic 

manufacturers who only export 

softwood lumber shall also retain such 

books and records. Such books and 

records must be made available during 

normal business hours for inspection by 

the Board’s or Secretary’s employees or 

agents. A manufacturer for the U.S. 

market must maintain the books and 

records for two years beyond the fiscal 

period to which they apply. 

§ 1217.72 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 other 

manufacturers for the U.S. market. 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 


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61024 Federal Register / Vol. 75, No. 190 / Friday, October 1, 2010 / Proposed Rules 

the Secretary deems relevant shall be 

disclosed by them, and then only in a 

judicial proceeding or administrative 

hearing brought at the direction, or at 

the request, of the Secretary, or to which 

the Secretary or any officer of 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 

§ 1217.80 Right of the Secretary. 

All fiscal matters, programs 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. 

§ 1217.81 Referenda. 

(a) Initial referendum. The Order shall 

not become effective unless the Order is 

approved by a majority of domestic 

manufacturers and importers voting in 

the referendum who also represent a 

majority of the volume of softwood 

lumber represented in the referendum 

who, during a representative period 

determined by the Secretary, have been 

engaged in the domestic manufacturing 

or importation of softwood lumber. A 

single entity who domestically 

manufactures and imports softwood 

lumber may cast one vote in the 

referendum. 

(b) Subsequent referenda. The 

Secretary shall conduct subsequent 

referenda: 

(1) For the purpose of ascertaining 

whether manufacturers for the U.S. 

market favor the amendment, 

continuation, suspension, or 

termination of the Order; 

(2) Five years after this Order becomes 

effective and every five years thereafter, 

to determine whether softwood lumber 

manufacturers for the U.S. market favor 

the continuation of the Order. The 

Order shall continue if it is favored by 

a majority of domestic manufacturers 

and importers voting in the referendum 

who also represent a majority of the 

volume of softwood lumber represented 

in the referendum who, during a 

representative period determined by the 

Secretary, have been engaged in the 

domestic manufacturing or importation 

of softwood lumber; 

(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. 

§ 1217.82 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 period whenever the Secretary 

determines that its suspension or 

termination is favored by a majority of 

domestic 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 domestic manufacturing 

or importation of softwood lumber. 

(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. 

§ 1217.83 Proceedings after termination. 

(a) Upon termination of this subpart, 

the Board shall recommend to the 

Secretary up to nine of its members, 

representing all regions specified in 

§ 1217.40(b), three of whom shall be 

importers and six of whom shall be 

domestic manufacturers, 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 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 softwood 

lumber industry organizations in the 

United States whose mission is generic 

softwood lumber promotion, research, 

and information programs. 

§ 1217.84 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. 

§ 1217.85 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. 

§ 1217.86 Separability. 

If any provision of this subpart is 

declared invalid or the applicability of 

it to any person or circumstances is held 


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invalid, the validity of the remainder of 

this subpart, or the applicability thereof 

to other persons or circumstances shall 

not be affected thereby. 

§ 1217.87 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. 

§ 1217.88 OMB control numbers. 

The control numbers assigned to the 

information collection requirements by 

the Office of Management and Budget 

pursuant to the Paperwork Reduction 

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

OMB control number 0505–0001 (Board 

nominee background statement) and 

OMB control number 0581–NEW. 

Subpart B—[Reserved] 

Dated: September 22, 2010. 

David R. Shipman, 

Acting Administrator, Agricultural Marketing 

Service. 

[FR Doc. 2010–24202 Filed 9–30–10; 8:45 am] 

BILLING CODE 3410–02–P 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Part 1217 

[Document Number AMS–FV–10–0015; 

PR–B] 

RIN 0581–AD03 

Softwood Lumber Research, 

Promotion, Consumer Education and 

Industry Information Order; 

Referendum Procedures 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Proposed rule. 

SUMMARY: This proposed rule invites 

comments on procedures for conducting 

a referendum to determine whether 

issuance of a proposed Softwood 

Lumber Research, Promotion, Consumer 

Education and Industry Information 

Order (Order) is favored by domestic 

manufacturers and importers of 

softwood lumber. Softwood lumber is 

used in products like flooring, siding 

and framing. The procedures would also 

be used for any subsequent referendum 

under the Order. The proposed Order is 

being published separately in this issue 

of the Federal Register. This proposed 

rule also announces the Agricultural 

Marketing Service’s (AMS) intent to 

request approval by the Office of 

Management and Budget (OMB) of new 

information collection requirements to 

implement the program. 

DATES: Comments must be received by 

November 30, 2010. Pursuant to the 

Paperwork Reduction Act (PRA), 

comments on the information collection 

burden that would result from this 

proposal must be received by November 

30, 2010. 

ADDRESSES: Interested persons are 

invited to submit written comments 

concerning this rule. Comments may be 

submitted on the Internet at: http:// 

www.regulations.gov or to the Research 

and Promotion Branch, Fruit and 

Vegetable Programs, AMS, USDA, 1400 

Independence Avenue, SW., Room 

0632–S, Stop 0244, Washington, DC 

20250–0244; facsimile: (202) 205–2800. 

All comments should reference the 

docket number and the date and page 

number of this issue of the Federal 

Register and will be made available for 

public inspection, including name and 

address, if provided, in the above office 

during regular business hours or it can 

be viewed at http:// 

www.regulations.gov. 

Pursuant to the PRA, comments 

regarding the accuracy of the burden 

estimate, ways to minimize the burden, 

including the use of automated 

collection techniques or other forms of 

information technology, or any other 

aspect of this collection of information, 

should be sent to the above address. In 

addition, comments concerning the 

information collection should also be 

sent to the Desk Office for Agriculture, 

Office of Information and Regulatory 

Affairs, OMB, New Executive Office 

Building, 725 17th Street, NW., Room 

725, Washington, DC 20503. 

FOR FURTHER INFORMATION CONTACT: 

Maureen T. Pello, Marketing Specialist, 

Research and Promotion Branch, Fruit 

and Vegetable Programs, AMS, USDA, 

P.O. Box 831, Beavercreek, Oregon 

97004; telephone: (503) 632–8848; 

facsimile (503) 632–8852; or electronic 

mail: Maureen.Pello@ams.usda.gov. 

SUPPLEMENTARY INFORMATION: This rule 

is issued pursuant to the Commodity 

Promotion, Research, and Information 

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

7425). 

Executive Order 12866 

This rule has been determined to be 

not significant for purposes of Executive 

Order 12866 and therefore has not been 

reviewed by the OMB. 

Executive Order 12988 

This rule has been reviewed under 

Executive Order 12988, Civil Justice 

Reform. It is not intended to have 

retroactive effect. Section 524 of the 

1996 Act 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 the U.S. 

Department of Agriculture (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. 

This rule invites comments on 

procedures for conducting a referendum 

to determine whether domestic 

manufacturers and importers of 

softwood lumber favor issuance of a 

proposed softwood lumber Order. 

Softwood lumber is used in products 

like flooring, siding and framing. USDA 

would conduct the referendum. The 

program would be implemented if it is 

favored by a majority of domestic 

manufacturers and importers of 

softwood lumber voting in the 

referendum who also represent a 

majority of the volume of softwood 

lumber represented in the referendum. 

The procedures would also be used for 

any subsequent referendum under the 

Order. The proposed Order is being 

published separately in this issue of the 

Federal Register. This rule also 

announces AMS’s intent to request 

approval by the OMB of new 

information collection requirements to 

implement the program. 

The 1996 Act 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. These programs are 

designed to maintain and expand 

markets and uses for agricultural 

commodities. As defined under section 

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


jlentini on DSKJ8SOYB1PROD with PROPOSALS2