[Federal Register Volume 75, Number 190 (Friday, October 1, 2010)]
[Proposed Rules]
[Pages 61002-61025]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-24202]



[[Page 61001]]

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Part III





Department of Agriculture





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Agricultural Marketing Service



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7 CFR Part 1217



Softwood Lumber Research, Promotion, Consumer Education and Industry 
Information Order; Proposed Rules

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

[[Page 61002]]


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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.

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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: <a href="/cdn-cgi/l/email-protection#357854404750505b1b655059595a755458461b404651541b525a43"><span class="__cf_email__" data-cfemail="460b2733342323286816232a2a2906272b35683335222768212930">[email protected]</span></a>.

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

[[Page 61003]]

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 scale-like 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\
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    \1\ Spelter, H., D. McKeever, D. Toth, Profile 2009: Softwood 
Sawmills in the United States, USDA, p. 7.
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    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\
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    \2\ Micklewright, J.T., Wood preservation statistics, American 
Wood Preservers Assocation, p. 25.
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    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\
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    \3\ Spelter, McKeever and Toth, Profile 2009, p. 15.
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    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\
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    \4\ Western Wood Products Association, 2008 Statistical 
Yearbook, p. 32.
    \5\ U.S. Census Bureau, 2009, Construction, http://www.census.gov/mcd/.
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Softwood Lumber Markets \6\
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    \6\ Spelter, McKeever and Toth, Profile 2009, p. 2-5.
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    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]
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                                                Single      Multi-                                    Non-           Non-
                                                family      family      Mobile     Residential    residential,   residential,    Industrial   Total U.S.
                                                 homes       homes       homes      remodeling     buildings        other        and other
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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

[[Page 61004]]

 
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
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                                                                    Shares (percent)
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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
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    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\
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    \7\ Spelter, McKeever and Toth, Profile 2009, p. 15.
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    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\
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    \8\ Ibid., p. 15.
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    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, wood-plastic 
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.
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    \9\ http://www.fas.usda.gov/gats; accessed 5/1/10.
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Price and Cost Trends \10\
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    \10\ Spelter, McKeever and Toth, Profile 2009, p. 5-6.
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    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
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                                                     Oregon                                Georgia
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                                         Costs ($ per      Revenue ($ per      Costs ($ per      Revenue ($ per
                                       thousand  board    thousand  board    thousand  board    thousand  board
                                            feet)              feet)              feet)              feet)
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2003................................                295                309                311                323
2004................................                330                420                335                378
2005................................                349                370                349                418
2006................................                335                316                349                330

[[Page 61005]]

 
2007................................                297                260                300                269
2008................................                238                219                328                262
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    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.
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    \11\ U.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.
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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.
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    \12\ Price 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.)
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    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, Sec. Sec.  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 Sec.  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.

[[Page 61006]]

    Section 1217.3 would define the term ``Board'' or ``Softwood Lumber 
Board'' to mean the administrative body established pursuant to Sec.  
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 Sec.  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 Sec.  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 re-manufactures 
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\
---------------------------------------------------------------------------

    \13\ The HTS numbers referred to in this discussion are as of 
January 1, 2008.
---------------------------------------------------------------------------

    (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,

[[Page 61007]]

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 box-spring 
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.

[[Page 61008]]

    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, Sec. Sec.  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 Sec.  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 Sec.  
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

[[Page 61009]]

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 
Sec.  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 x 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, Sec. Sec.  
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

[[Page 61010]]

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 x $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 x 0.423776001 x $.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 x 0.0031746 x $.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

[[Page 61011]]

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 foot-exemption. 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, Sec. Sec.  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, Sec. Sec.  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 Sec.  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

[[Page 61012]]

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, Sec.  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 Sec. Sec.  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.
---------------------------------------------------------------------------

    \14\ Spelter, McKeever and Toth, Profile 2009, p. 15.
    \15\ Percentages 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).
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \16\ Spelter, McKeever and Toth, Profile 2009, p. 2-5.
---------------------------------------------------------------------------

    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

[[Page 61013]]

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 long-term 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.
---------------------------------------------------------------------------

    \17\ Spelter, H.D. McKeever, M. Alderman, Profile 2007: Softwood 
Sawmills in the United States and Canada, USDA, p. 10.
---------------------------------------------------------------------------

    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\
----------------------------------------------------------------------------------------------------------------
                                                      Annual shipment levels (billion board feet)
   Assessment options (per thousand   --------------------------------------------------------------------------
             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
----------------------------------------------------------------------------------------------------------------
\1\ Assumes 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\
----------------------------------------------------------------------------------------------------------------
                                                      Annual shipment levels  (billion board feet)
  Assessment options  (per thousand   --------------------------------------------------------------------------
             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
----------------------------------------------------------------------------------------------------------------
\1\ Assumes 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

[[Page 61014]]

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

[[Page 61015]]

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.

[[Page 61016]]

    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.

[[Page 61017]]

Subpart A--Softwood Lumber Research, Promotion, Consumer Education, 
and Industry Information Order

Definitions


Sec.  1217.1  Act.

    Act means the Commodity Promotion, Research, and Information Act of 
1996 (7 U.S.C. 7411-7425), and any amendments thereto.


Sec.  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.


Sec.  1217.3  Board.

    Board or Softwood Lumber Board means the administrative body 
established pursuant to Sec.  1217.40, or such other name as 
recommended by the Board and approved by the Department.


Sec.  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.


Sec.  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.


Sec.  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.


Sec.  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.


Sec.  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 
re-manufactures softwood lumber that has already been subject to 
assessment under this Order.


Sec.  1217.9  Export.

    Export means to manufacture and ship softwood lumber from within 
the United States to locations outside of the United States.


Sec.  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.


Sec.  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.


Sec.  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.


Sec.  1217.13  Manufacture.

    Manufacture means the process of transforming softwood logs into 
softwood lumber.


Sec.  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.


Sec.  1217.15  Marketing.

    Marketing means the sale or other disposition of softwood lumber in 
interstate, foreign, or intrastate commerce.


Sec.  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.


Sec.  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.


Sec.  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.


Sec.  1217.19  Person.

    Person means any individual, group of individuals, partnership, 
company, corporation, association, affiliate, cooperative, or any other 
legal entity.


Sec.  1217.20  Planing.

    Planing means the act of smoothing the surface of a board to make 
the wood a uniform size.


Sec.  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.


Sec.  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.

[[Page 61018]]

Sec.  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.


Sec.  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.


Sec.  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.


Sec.  1217.26  Softwood.

    Softwood means one of the botanical groups of trees that have 
needle-like or scale-like leaves, or conifers.


Sec.  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.


Sec.  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.


Sec.  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.


Sec.  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


Sec.  1217.40  Establishment and membership.

    (a) Establishment of the Board. There is hereby established a 
Softwood Lumber Board to administer the terms and provisions of this 
Order and promote the use of softwood lumber. The Board shall be 
composed of manufacturers for the U.S. market who manufacture and 
domestically ship or import 15 million board feet or more of softwood 
lumber in the United States during a fiscal period. Seats on the Board 
shall be apportioned based on the volume of softwood lumber 
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 Sec.  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 three-year 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.


Sec.  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

[[Page 61019]]

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 Sec.  1217.40. All nominees solicited 
pursuant to Sec.  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.


Sec.  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.


Sec.  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.


Sec.  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

[[Page 61020]]

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.


Sec.  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.


Sec.  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 Sec.  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.


Sec.  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


Sec.  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

[[Page 61021]]

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.


Sec.  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-to-date 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.


Sec.  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 Sec.  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

[[Page 61022]]

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.


Sec.  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 Sec.  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

[[Page 61023]]

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


Sec.  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.


Sec.  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.


Sec.  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, Sec.  1217.83 shall apply to determine 
disposition of all such property.

Reports, Books, and Records


Sec.  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 Sec.  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 Sec.  1217.52.


Sec.  1217.71  Books and records.

    Each manufacturer for the U.S. market, including those exempt under 
Sec.  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.


Sec.  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

[[Page 61024]]

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


Sec.  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.


Sec.  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.


Sec.  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.


Sec.  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 Sec.  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.


Sec.  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.


Sec.  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.


Sec.  1217.86  Separability.

    If any provision of this subpart is declared invalid or the 
applicability of it to any person or circumstances is held

[[Page 61025]]

invalid, the validity of the remainder of this subpart, or the 
applicability thereof to other persons or circumstances shall not be 
affected thereby.


Sec.  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.


Sec.  1217.88  OMB control numbers.

    The control numbers assigned to the information collection 
requirements by the Office of Management and Budget pursuant to the 
Paperwork Reduction Act of 1995, 44 U.S.C. chapter 35, are OMB control 
number 0505-0001 (Board nominee background statement) and OMB control 
number 0581-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


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