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Skip Navigation HomeHelpResourcesContact Us Advanced Search Start of Main Content Softwood Lumber Research, Promotion, Consumer Education and Industry Information Order: Changes to the Membership of the Softwood Lumber Board This Proposed Rule document was issued by the Agricultural Marketing Service (AMS)For related information, Open Docket Folder Show agency attachment(s) DEPARTMENT OF AGRICULTURE
[Document Number AMS-FV-13-0038]
AgencyAgricultural Marketing Service.
SummaryThis proposal invites comments on changes to the membership of the Softwood Lumber Board (Board) established under the Softwood Lumber Research, Promotion, Consumer Education and Industry Information Order (Order). The Board administers the Order with oversight by the U.S. Department of Agriculture (USDA). Under the Order, assessments are collected from U.S. manufacturers (domestic) and importers and used for projects to promote softwood lumber within the United States. This proposal would revise the Board's membership to reflect the diversity of the industry in terms of size of operation; allow companies that operate in multiple geographic regions to seek representation in any region in which they operate (U.S. or import); add flexibility for the Board to nominate eligible persons to fill vacancies that occur during a term; and re-designate the States of Virginia and West Virginia to the U.S. South Region. These changes would help facilitate program operations.
DatesComments must be received by October 25, 2013.
AddressesInterested 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 Promotion and Economics Division, Fruit and Vegetable Program, AMS, USDA, 1400 Independence Avenue SW., Room 1406-S, Stop 0244, Washington, DC 20250-0244; facsimile: (202) 205-2800. All comments should reference the document number and the date and page number of this issue of theFederal Registerand 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. For Further Information ContactMaureen T. Pello, Marketing Specialist, Promotion and Economics Division, Fruit and Vegetable Program, AMS, USDA, P.O. Box 831, Beavercreek, Oregon, 97004; telephone: (503) 632-8848; facsimile (503) 632-8852; or electronic mail: Maureen.Pello@ams.usda.gov. Supplementary InformationThis proposal is issued under the Order. The Order is authorized under the Commodity Promotion, Research, and Information Act of 1996 (1996 Act) (7 U.S.C. 7411-7425).Executive Order 12866The Office of Management and Budget (OMB) has waived the review process required by Executive Order 12866 for this action.Executive Order 13175This action has been reviewed in accordance with the requirements of Executive Order 13175, Consultation and Coordination with Indian Tribal Governments. The review reveals that this regulation would not have substantial and direct effects on Tribal governments and would not have significant Tribal implications.Executive Order 12988This proposal has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have retroactive effect. Section 524 of the 1996 Act (7 U.S.C. 7423) provides that it shall not affect or preempt any other Federal or State law authorizing promotion or research relating to an agricultural commodity.
Under section 519 of the 1996 Act (7 U.S.C. 7418), a person subject to an order may file a written petition with USDA stating that an order, any provision of an order, or any obligation imposed in connection with an order, is not established in accordance with the law, and request a modification of an order or an exemption from an order. Any petition filed challenging an order, any provision of an order, or any obligation imposed in connection with an order, shall be filed within two years after the effective date of an order, provision, or obligation subject to challenge in the petition. The petitioner will have the opportunity for a hearing on the petition. Thereafter, USDA will issue a ruling on the petition. The 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.BackgroundThis proposal invites comments on changes to the Board's membership provisions under the Order. The Board administers the Order with oversight by USDA. Under the Order, assessments are collected from U.S. manufacturers and importers and used for projects to promote softwood lumber within the United States. This proposal would revise the Board's membership to reflect the diversity of the industry in terms of size of operation; allow companies that operate in multiple regions to seek representation in any region in which they operate (U.S. or import); add flexibility for the Board to nominate eligible persons to fill vacancies that occur during a term; and re-designate the States of Virginia and West Virginia to the U.S. South Region. These changes would help facilitate program operations and were unanimously recommended by the Board in July 2013.
Pursuant to section 1217.40(b), the Board is composed of 18 or 19 members, depending upon whether an additional importer member is appointed to the Board. Twelve members are domestic manufacturers and six members are importers of softwood lumber from Canada. Of the 12 domestic manufacturers, 6 represent the U.S. South, 5 represent the U.S. West and 1 represents the Northeast and Lake States. Of the six Canadian importers, four represent Canada West and two represent Canada East. An additional importer member may be appointed to represent all other importing countries besides Canada. Section 1217.40(c)(2)provides authority for the Board to recommend changes to its membership and nomination process.
The Board met on May 7 and 8, 2013, and reviewed program operations, including the Board's structure and nomination process. The Board reviewed these issues further and made the following four recommendations in July 2013.Board Diversity and Size of OperationThe Board recommended that its regional membership be revised to reflect the diversity of the industry in terms of size of operation. About 8 percent of the companies covered under the Order account for the top two-thirds of the total annual volume of assessable softwood lumber (both domestic and imports). These companies are considered large by the industry in terms of size of operation. Some of these companies operate in multiple regions and some are both a domestic manufacturer and an importer of softwood lumber. Ninety-two percent of the companies covered under the Order account for the remaining one-third of the total annual volume of assessable softwood lumber. These are considered small by the industry in terms of size of operation.
RegionAssessable volume(billion board feet)Large companiesRegional volume(billion board feet)Small companiesRegional volume(billion board feet)
U.S. South10.4365.951 (57%)4.485 (43%)
U.S. West10.5488.017 (76%)2.511 (24%)
NE and Lake States0.7490.229 (31%)0.520 (69%)
Canada West4.9833.919 (79%)1.064 (21%)
Canada East2.3791.315 (55%)1.064 (45%)
Size of operationNumber of seatsU.S. SouthU.S. WestNE and Lake StatesCanada eastCanada westNon-Canadian importer
Large companies24N/A13N/A
Small companies4111 651241
Further, section 1217.40(c) requires the Board to periodically review the geographic 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. This section would be revised to require the Board to also periodically review the distribution of seats based on size of operation and recommend changes as necessary. Section 1217.40(c) would be revised accordingly.Entities That Operate in Multiple Regions (U.S. and/or Import)Section 1217.41(b)(3) provides that nominees that are both a domestic manufacturer and importer may seek nomination to the Board as either a domestic manufacturer or an importer, but not both. Nominees who domestically manufacture the majority of their softwood lumber must seek representation as a domestic manufacturer and nominees who import the majority of their softwood lumber must seek representation as an importer. Section 1217.41(b)(4) provides that domestic manufacturers who manufacture and domestically ship from more than one U.S. region must seek representation in the region of the majority of their softwood lumber. Further, section 1217.41(b)(5) provides that importers who import from more than one Canadian region must seek representation in the region from which they import the majority of their softwood lumber.
As previously mentioned some entities in the softwood lumber industry are both domestic manufacturers and importers and operate in multiple regions under the Order. Industry members would like the flexibility to choose which region they represent and whether they seek a position as a domestic manufacturer or an importeron the Board. Thus, the Board recommended revising the Order so that entities that are U.S. manufacturers and importers and who may operate in multiple regions have the ability to seek representation in any region in which they operate. This would add flexibility to the nomination process by allowing companies to seek representation in their region of choice. Paragraphs (3), (4) and (5) of section 1217.41(b) would be revised accordingly.Vacancies That Occur Mid-TermSection 1217.43(c) currently specifies that if a position becomes vacant, nominations to fill the vacancy be conducted using the nomination process set forth in the Order (section 1217.41(b)) whereby the Board solicits the names of eligible nominees and then conducts regional elections. The process is lengthy and can result in a seat remaining vacant for an extended period of time. Thus, the Board recommended revising the Order to allow the Board the flexibility to nominate eligible persons to fill vacancies that occur during a term. This would facilitate program operations by helping to ensure that vacancies are filled in a timely manner. Section 1217.43(c) would be revised accordingly.Virginia and West VirginiaSection 1217.40(b)(1)(iii) specifies that the States of Virginia and West Virginia are included as part of the Northeast and Lake States Region under the Order. However, softwood lumber from Virginia and West Virginia is predominately pine, a much different species from the white spruce and red pine in the Northeast and Lake States, respectively. Thus, the Board recommended that the Order be revised to re-designate the States of Virginia and West Virginia as part of the U.S. South. The volume of softwood lumber from Virginia and West Virginia is relatively small (284 million board feet in 2012), so this change would have no impact on the regional distribution of seats on the Board. This change would align Virginia and West Virginia with the region in which they have more in common. Section 1217.40(b)(1)(iii) would be revised accordingly.
This proposal would also make two minor changes to the Order. In paragraph (b) of section 1217.70 on reports, the last sentence would be modified to specify that importers who pay their assessments directly to the Board must submit their report that accompanies the payment of collected assessments within 30 calendar days after the end of the quarter in which the softwood lumber was imported as opposed to 30 calendar days after importation. This language was inadvertently omitted from the final rule that implemented the Order (76 FR 46185; August 2, 2012) and would bring the Order in line with current industry practices. This proposal would also change the OMB control number in section 1217.108 from 0581-NEW to 0581-0264, the control number assigned by the OMB.Initial Regulatory Flexibility Act AnalysisIn 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.
According to the Board, it is estimated that there are currently about 446 domestic manufacturers of softwood lumber in the United States. This number represents separate business entities; one business entity may include multiple sawmills. Using an average price of $322 per thousand board feet, (1)
a domestic manufacturer who ships less than about 25 million board feet per year would be considered a small entity. Using 2012 data, it is estimated that about 270 domestic manufacturers, or about 60 percent, (2)
ship less than 25 million board feet annually.
Regarding alternatives, the Board explored various options regarding the diversity of size of operation. The Board considered establishing a separate region for multi-region companies and companies that are both a domestic manufacturer and an importer. The Board also considered establishing some “at large” seats for multi-region companies. The Board considered weighting an entity's vote in a regional election by volume. The Board also considered maintaining the status quo and not changing the Order in this regard. After much deliberation, the Board opted to recommend allocatingregional seats based on an analysis of the volume of softwood lumber within each region and the volume of assessable softwood lumber covered under the Order.
List of Subjects in 7 CFR Part 1217Administrative practice and procedure, Advertising, Consumer information, Marketing agreements, Softwood Lumber promotion, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, 7 CFR part 1217 is proposed to be amended as follows:Part 1217 Softwood Lumber Research Promotion Consumer Education and Industry Information Order
2. Amend § 1217.40 by:
§ 1217.40
(3) If warranted, recommend to the Secretary the reapportionment of theBoard 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 and the distribution of the size of operations within regions shall also be considered. The number of Board members may also be changed. Any changes in Board composition shall be implemented by the Secretary through rulemaking.
3. Amend § 1217.41 by
§ 1217.41
4. Amend § 1217.43 by revising paragraph (c) to read as follows:
§ 1217.43
(c) If a position becomes vacant, nominations to fill the vacancy may be conducted using the nominations process set forth in § 1217.41(b) or the Board may nominate eligible persons. A vacancy will not be required to be filled if the unexpired term is less than six months.
5. Amend § 1217.70 by revising paragraph (b) to read as follows:
§ 1217.70
(b) For domestic manufacturers, such information shall accompany the collected payment of assessments on a quarterly basis specified in § 1217.52. For importers who pay their assessments directly to the Board, such information shall accompany the payment of collected assessments within 30 calendar days after the end of the quarter in which the softwood lumber was imported.
§ 1217.108
[FR Doc. 2013-22968 Filed 9-24-13; 8:45 am]BILLING CODE 3410-02-PFootnotes
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 (www.randomlengths.com).
Percentages were obtained from the American Lumber Standard Committee, Inc. (ALSC). The ALSC administers an accreditation program for the grade marking of lumber produced under the American Softwood Lumber Standard (Voluntary Product Standard 20).
Attachments View All (0) View document: No documents available. Attachments View All (0) Comment Now! Comment Period Closed Oct 25 2013, at 11:59 PM ET ID: AMS-FV-13-0038-0001 Tracking Number: View original printed format: Document Information Date Posted: Sep 25, 2013RIN: Not AssignedFederal Register Number: 2013-22968 Show More Details Submitter Information Comments6 Comments Received* As a current member of the Softwood Lumber Board representing the U.S. South, I am pleased to endorse, without reservation, the proposed changes to the existing... View Comment See attached file. View Comment Just to be clear; I agree with all the revisions. I think they're smart, and will allow us to continue to provide balance in the Board. David Gray View Comment Docket Information This document is contained in AMS-FV-13-0038 Related Dockets: NoneRelated RINs: NoneRelated Documents: Softwood LumberResearch, Promotion, Consumer Education and... Related Comments: View all * This count refers to the total comment/submissions received on this document, as of 11:59 PM yesterday. Note: Agencies review all submissions, however some agencies may choose to redact, or withhold, certain submissions (or portions thereof) such as those containing private or proprietary information, inappropriate language, or duplicate/near duplicate examples of a mass-mail campaign. This can result in discrepancies between this count and those displayed when conducting searches on the Public Submission document type. For specific information about an agency’s public submission policy, refer to its website or the Federal Register document. Document text and images courtesy of the Federal Register Home Search Advanced Search Browse By Category Learn About Us eRulemaking Program Media Toolkit Agencies Awards & Recognition Enhancements & Fixes Resources Site Data Regulatory Agenda Agency Reports Required by Statute API Overview Developers Help How to use Regulations.gov FAQs Glossary Connect With Contact Us Privacy and Security Notice User Notice Accessibility Statement Partner Sites We the People Federal Register Reginfo Congress.gov USA.gov E-Gov Opengov Participate Today!