[Federal Register Volume 79, Number 92 (Tuesday, May 13, 2014)]
[Proposed Rules]
[Pages 27212-27214]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-10995]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 79, No. 92 / Tuesday, May 13, 2014 / Proposed
Rules
[[Page 27212]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 1217
[Document Number AMS-FV-12-0023]
Softwood Lumber Research, Promotion, Consumer Education and
Industry Information Order; Late Payment and Interest Charges on Past
Due Assessments
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This proposal invites comments on prescribing late payment and
interest charges on past due assessments under the Softwood Lumber
Research, Promotion, Consumer Education and Industry Information Order
(Order). The Order is administered by the Softwood Lumber Board (Board)
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. Softwood lumber is used in products like flooring,
siding and framing. This proposal would implement authority contained
in the Order that allows the Board to collect late payment and interest
charges on past due assessments. This action would contribute to
effective administration of the program.
DATES: Comments must be received by July 14, 2014.
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 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 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.
FOR FURTHER INFORMATION CONTACT: Maureen 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: [email protected].
SUPPLEMENTARY INFORMATION: This proposal is issued under the Softwood
Lumber Research, Promotion, Consumer Education and Industry Information
Order (Order) (7 CFR part 1217). The Order is authorized under the
Commodity Promotion, Research, and Information Act of 1996 (1996 Act)
(7 U.S.C. 7411-7425).
Executive Order 12866 and Executive Order 13563
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, reducing costs, harmonizing rules and promoting flexibility.
This action has been designated as a ``non-significant regulatory
action'' under section 3(f) of Executive Order 12866. Accordingly, the
Office of Management and Budget has waived the review process.
Executive Order 13175
This action has been reviewed in accordance with the requirements
of Executive Order 13175, Consultation and Coordination with Indian
Tribal Governments. The review reveals that this regulation would not
have substantial and direct effects on Tribal governments and would not
have significant Tribal implications.
Executive Order 12988
This proposed 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 (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.
Background
This proposed rule invites comments on prescribing late payment and
interest charges on past due assessments under the Order. The Order is
administered by the Board with oversight by USDA. Under the Order,
assessments are collected from domestic manufacturers and importers and
used for projects to promote softwood lumber within the United States.
Softwood lumber is used in products like flooring, siding and framing.
This proposal would implement authority contained in the Order and the
1996 Act that allows the Board to collect late payment and interest
charges on past due assessments. This action was unanimously
recommended by the Board and would contribute to effective
administration of the program.
Section 1217.52(a) of the Order specifies that the Board's programs
and expenses shall be paid by assessments on domestic manufacturers and
importers and other income or funds available to the Board. Paragraph
(l) of
[[Page 27213]]
that section specifies further that when a domestic manufacturer or
importer fails to pay their assessments within 60 calendar days of when
the assessment is due, the Board may impose a late payment charge and
interest. The late payment and interest charges must be specified in
regulations issued by the Secretary. All late assessments would be
subject to the late payment charge and interest.
The softwood lumber program was promulgated in 2011. Assessment
collection began in January 2012. Assessments on softwood lumber
domestic shipments and imports are due to the Board 30 calendar days
after the end of each quarter. For example, assessments for softwood
lumber shipped domestically or imported during the months of January,
February and March are due to the Board by April 30. Entities that
domestically ship or import less than 15 million board feet annually
are exempt from assessment. Additionally, assessed entities do not pay
assessments on their first 15 million board feet domestically shipped
or imported per year.
Assessment funds are used for promotion activities that are
intended to benefit all industry members. Thus, it is important that
all assessed entities pay their assessments in a timely manner.
Entities who fail to pay their assessments on time would be able to
reap the benefits of Board programs at the expense of others. In
addition, they would be able to utilize funds for their own use that
should otherwise be paid to the Board to finance Board programs.
Board Recommendation
Thus, the Board met on May 8, 2012, and unanimously recommended
implementing the Order authority regarding late payment and interest
charges. Specifically, the Board recommended that a late payment charge
be imposed on any domestic manufacturer or importer who fails to make
timely remittance to the Board of the total assessments for which such
domestic manufacturer or importer is liable. Such late payment would be
imposed on any assessments not received within 60 calendar days of the
date they are due. This would be a one-time late payment charge equal
to 10 percent of the assessments due before interest charges have
accrued. The Board also recommended that 1\1/2\ percent per month
interest on the outstanding balance, including any late payment and
accrued interest, be added to any accounts for which payment has not
been received within 60 calendar days after the assessments are due.
Such interest would continue to accrue monthly until the outstanding
balance is paid to the Board.
This action is expected to help facilitate program administration
by providing an incentive for entities to remit their assessments in a
timely manner, with the intent of creating a fair and equitable process
among all assessed entities. Accordingly, a new Subpart C would be
added to the Order for rules and regulations, and a new section
1217.520 would be added to Subpart C.
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 the Board, it is estimated that there are 385 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 $384 per thousand board
feet,\1\ a domestic manufacturer who ships less than about 18 million
board feet per year would be considered a small entity. Using 2013
data, it is estimated that 210 domestic manufacturers, or 54 percent,
ship less than 18 million board feet annually.
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\1\ 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).
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Likewise, based on Customs and Board data, it is estimated there
are 795 importers of softwood lumber. Using 2013 Customs data, about
710 importers, or about 89 percent, import less than $7.0 million worth
of softwood lumber annually. Thus, for purposes of the RFA, the
majority of domestic manufacturers and importers of softwood lumber
would be considered small entities.
Regarding value of the commodity, with domestic production
averaging about 40 billion board feet in 2013, and using an average
price of $384 per thousand board feet, the average annual domestic
value for softwood lumber is about $15.4 billion. According to Customs
data, the average annual value for softwood lumber imports for 2013 is
about $4.8 billion.
This proposed rule invites comments on prescribing late payment and
interest charges on past due assessments under the Order. The Order is
administered by the Board with oversight by USDA. Under the Order,
assessments are collected from domestic manufacturers and importers and
used for projects to promote softwood lumber within the United States.
Softwood lumber is used in products like flooring, siding and framing.
This rule would add a new section 1217.520 that would specify a late
payment charge of 10 percent of the assessments due and interest at a
rate of 1\1/2\ percent per month on the outstanding balance, including
any late payment and accrued interest. This section would be included
in a new Subpart C--Rules and Regulations. This action was unanimously
recommended by the Board and is authorized under section 1217.52(l) of
the Order and section 517(e) of the 1996 Act.
Regarding the economic impact of this proposed rule on affected
entities, this action would impose no costs on domestic manufacturers
and importers who pay their assessments on time. It would merely
provide an incentive for entities to remit their assessments in a
timely manner. For all entities who are delinquent in paying
assessments, both large and small, the charges would be applied the
same. As for the impact on the industry as a whole, this action would
help facilitate program administration by providing an incentive for
entities to remit their assessments in a timely manner, with the intent
of creating a fair and equitable process among all assessed entities.
Additionally, as previously mentioned, the Order provides for an
exemption for entities that domestically ship or import less than 15
million board feet annually. It is estimated that, of the 385 domestic
manufacturers, 200, or 52 percent, ship less than 15 million board feet
per year and are thus exempt from paying assessments under the Order.
Of the 795 importers, it is estimated that 730, or 92 percent, import
less than 15 million board feet per year and are also exempt from
paying assessments. Thus, about 185 domestic manufacturers and 65
importers pay assessments under the Order.
Regarding alternatives, one option to the proposed action would be
to
[[Page 27214]]
maintain the status quo and not prescribe late payment and interest
charges for past due assessments. However, the Board determined that
implementing such charges would help facilitate program administration
by encouraging entities to pay their assessments in a timely manner.
The Board reviewed rates of late payment and interest charges
prescribed in other research and promotion programs and concluded that
a 10 percent late payment charge and interest at a rate of 1\1/2\
percent per month on the outstanding balance would be appropriate.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
Chapter 35), the information collection and recordkeeping requirements
that are imposed by the Order have been approved previously under OMB
control number 0581-0264. This proposed rule would not result in a
change to the information collection and recordkeeping requirements
previously approved and would impose no additional reporting and
recordkeeping burden on domestic manufacturers and importers of
softwood lumber.
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 proposed 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, this action was discussed by the Board
at its first meeting held in November 2011 and at six committee
meetings held via teleconference during the first six months of 2012.
The Board met in May 2012 and unanimously made its recommendation. All
of the Board's meetings, including meetings held via teleconference,
are open to the public and interested persons are invited to
participate and express their views.
We have performed this initial RFA regarding the impact of this
proposed action on small entities and we invite comments concerning
potential effects of this action on small businesses.
While this proposed rule set forth below has not received the
approval of USDA, it has been determined that it is consistent with and
would effectuate the purposes of the 1996 Act.
A 60-day comment period is provided to allow interested persons to
respond to this proposal. All written comments received in response to
this proposed 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, 7 CFR part 1217 is
proposed to be amended as follows:
PART 1217--SOFTWOOD LUMBER RESEARCH, PROMOTION, CONSUMER EDUCATION
AND INDUSTRY INFORMATION ORDER
0
1. The authority citation for 7 CFR part 1217 continues to read as
follows:
Authority: 7 U.S.C. 7411-7425; 7 U.S.C. 7401.
0
2. Subpart C--Rules and Regulations is added to read as follows:
Subpart C--Rules and Regulations
Sec. 1217.520 Late payment and interest charges for past due
assessments.
(1) A late payment charge shall be imposed on any domestic
manufacturer or importer who fails to make timely remittance to the
Board of the total assessments for which they are liable. The late
payment will be imposed on any assessments not received within 60
calendar days of the date they are due. This one-time late payment
charge shall be 10 percent of the assessments due before interest
charges have accrued.
(2) In addition to the late payment charge, 1\1/2\ percent per
month interest on the outstanding balance, including any late payment
and accrued interest, will be added to any accounts for which payment
has not been received by the Board within 60 calendar days after the
day assessments are due. Interest will continue to accrue monthly until
the outstanding balance is paid to the Board.
Dated: May 7, 2014.
Rex A. Barnes,
Deputy Administrator.
[FR Doc. 2014-10995 Filed 5-12-14; 8:45 am]
BILLING CODE 3410-02-P