[Federal Register Volume 79, Number 207 (Monday, October 27, 2014)]
[Proposed Rules]
[Pages 63846-63855]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-25427]
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DEPARTMENT OF AGRICULTURE
7 CFR Part 3202
RIN 0599-AA22
Voluntary Labeling Program for Biobased Products
AGENCY: Office of Procurement and Property Management, USDA.
ACTION: Proposed rule.
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SUMMARY: The U.S. Department of Agriculture (USDA) is proposing to
amend its regulations concerning the Voluntary Labeling Program for
Biobased Products, to incorporate statutory changes to section 9002 of
the Farm Security and Rural Investment Act (the 2002 Farm Bill) that
went into effect when the Agricultural Act of 2014 (the 2014 Farm Bill)
was signed into law on February 7, 2014.
DATES: USDA will accept public comments on these proposed rule
amendments until December 26, 2014.
ADDRESSES: You may submit comments by any of the following methods. All
submissions received must include the agency name and Regulatory
Information Number (RIN). The RIN for this rulemaking is 0599-AA22.
Also, please identify submittals as pertaining to the ``Proposed
Amendments to Voluntary Labeling Program for Biobased Products.''
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Email: [email protected]. Include RIN number 0599-AA22
and ``Proposed Amendments to the Voluntary Labeling Program for
Biobased Products'' on the subject line. Please include your name and
address in your message.
Mail/commercial/hand delivery: Mail or deliver your
comments to: Ron Buckhalt, USDA, Office of Procurement and Property
Management, Room 361, Reporters Building, 300 7th St. SW., Washington,
DC 20024.
Persons with disabilities who require alternative means
for communication for regulatory information (Braille, large print,
audiotape, etc.) should contact the USDA TARGET Center at (202) 720-
2600 (voice) and (202) 690-0942 (TTY).
FOR FURTHER INFORMATION CONTACT: Ron Buckhalt, USDA, Office of
Procurement and Property Management, Room 361, Reporters Building, 300
7th St. SW., Washington, DC 20024; email: [email protected]; phone
(202) 205-4008. Information regarding the Voluntary Labeling Program
for Biobased Products (one part of the BioPreferred[supreg] program) is
available on the Internet at http://www.biopreferred.gov.
SUPPLEMENTARY INFORMATION: The information presented in this preamble
is organized as follows:
I. Authority
II. Background
III. Executive Summary
IV. Discussion of This Proposed Rule
V. Request for Comment
VI. Regulatory Information
A. Executive Orders 12866 and 13563: Regulatory Planning and
Review
B. Regulatory Flexibility Act (RFA)
C. Executive Order 12630: Governmental Actions and Interference
With Constitutionally Protected Property Rights
D. Executive Order 12988: Civil Justice Reform
E. Executive Order 13132: Federalism
F. Unfunded Mandates Reform Act of 1995
G. Executive Order 12372: Intergovernmental Review of Federal
Programs
H. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
I. Paperwork Reduction Act
J. E-Government Act Compliance
I. Authority
The Voluntary Labeling Program for Biobased Products was
established
[[Page 63847]]
under the authority of section 9002 of the Farm Security and Rural
Investment Act of 2002 (the 2002 Farm Bill), as amended by the Food,
Conservation, and Energy Act of 2008 (the 2008 Farm Bill), and further
amended by the Agricultural Act of 2014 (the 2014 Farm Bill), 7 U.S.C.
8102. (Section 9002 of the 2002 Farm Bill, as amended by the 2008 and
the 2014 Farm Bills, is referred to in this document as ``section
9002''.)
II. Background
Section 9002 establishes a program for preferred procurement of
biobased products by Federal agencies and a voluntary program for the
labeling of biobased products. These two programs are referred to
collectively by USDA as the BioPreferred[supreg] program.
Under the preferred procurement program, Federal agencies and their
contractors are required to purchase biobased products, as defined in
regulations implementing the statute, that are within designated
product categories when the cumulative purchase price of the products
to be procured is more than $10,000 or when the quantities of
functionally equivalent items purchased over the preceding fiscal year
equaled $10,000 or more. The final rules under which the preferred
procurement program operates are found at 7 CFR part 3201, ``Guidelines
for Designating Biobased Products for Federal Procurement.'' In a
separate rulemaking, the provisions of the Guidelines are being amended
to reflect the provisions of the 2014 Farm Bill.
The final rules for the voluntary labeling program, under which
USDA authorizes manufacturers and vendors of biobased products to use a
``USDA Certified Biobased Product'' label (hereafter referred to in
this preamble as ``the certification mark''), are found at 7 CFR part
3202. The voluntary labeling program is intended to encourage the
purchase and use of biobased products by reaching beyond the Federal
purchasing community and promoting the purchase of biobased products by
commercial entities and the general public. In establishing this
program, USDA identified the criteria to determine those products on
which the certification mark may be used and developed specific
requirements for how the mark can be used. It is USDA's intent that the
presence of the certification mark on a product will mean that the
labeled product is one for which credible factual information is
available as to the biobased content, consistently measured across
labeled products by use of the American Society of Testing and
Materials (ASTM) radioisotope test D6866.
On July 31, 2009, USDA published a proposed rule for the voluntary
labeling program under the authority of section 9002 (74 CFR 38295).
The voluntary labeling program final rule was promulgated on January
20, 2011 (76 FR 3790).
On February 7, 2014, the 2014 Farm Bill was signed into law and
included several provisions that amended the provisions of section
9002. The primary purpose of this proposed rule amendments is to revise
the voluntary labeling program final rule to incorporate changes to
section 9002 that were included in the 2014 Farm Bill. USDA is also
proposing certain clarifying amendments to the program rules based on
several years of operating experience. These proposed amendments will
not affect the status of products that have already been certified by
USDA to display the certification mark. However, when Stage 3 of the
auditing program (7 CFR part 3202, section 3202.10) is conducted in
2016, manufacturers whose product certification is at least 5 years old
will incur additional costs of about $400 per certified product for
biobased content re-testing.
III. Executive Summary
USDA is proposing to amend 7 CFR part 3202 to incorporate the
statutory changes to section 9002 of the Farm Security and Rural
Investment Act made by enactment of the Agricultural Act of 2014 on
February 7, 2014. USDA is also proposing amendments that clarify the
rules under which the voluntary labeling program operates. The
remainder of this section presents a brief summary of the proposed
amendments to the existing voluntary labeling program rules and Section
IV of this preamble presents more detailed discussions.
A. Purpose of the Regulatory Action
1. Need for the Regulatory Action
The 2014 Farm Bill contains legislative requirements related to the
Biobased Markets Program that cannot be implemented without further
guidance. For example, the proposed amendments provide the framework
for implementing the requirement that USDA promote biobased products
regardless of the date of entry into the marketplace, thus overriding
previous regulatory provisions excluding mature market products.\a\ The
proposed action also responds to Congressional direction that USDA
promote biobased products, including forest products, that apply an
innovative approach to growing, harvesting, sourcing, procuring,
processing, manufacturing, or application of biobased products
regardless of the date of entry into the marketplace. This proposed
regulatory action revises the definition of ``biobased product'' to
state that the term includes forest products that meet biobased content
requirements, notwithstanding the market share the product holds, the
age of the product, or whether the market for the product is new or
emerging. This proposed rule establishes procedures to carry out this
and other provisions of the 2014 Farm Bill.
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\a\ Mature market products previously were defined as those that
had a significant market share prior to 1972. USDA developed this
exclusion based on the legislative history of the 2002 Farm Bill.
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2. Legal Authority for the Regulatory Action
Enactment of the Agricultural Act of 2014 (Pub. L. 113-79) on
February 7, 2014 provides the legal authority for the proposed rule
amendments.
B. Summary of Major Provisions of the Proposed Rule
The following paragraphs present a brief summary of the changes
being proposed to the voluntary labeling program rules by this action.
More detailed discussions of the proposed changes are presented in
Section IV of this preamble.
1. Revisions to Section 3202.2 ``Definitions''
USDA is proposing to amend 7 CFR 3202.2 by deleting the definitions
of ``BioPreferred Product,'' ``Designated item,'' and ``Mature market
products.'' USDA is also proposing to revise the definitions of
``Biobased product,'' ``Certification mark artwork,'' and
``Intermediate ingredient or feedstock'' and to add new definitions for
``Designated product category,'' ``Forest product,'' ``Qualified
biobased product,'' and ``Renewable chemical.'' These changes are
proposed to bring the voluntary labeling rule up to date with the
BioPreferred program Guidelines and the 2014 Farm Bill.
2. Revisions to Section 3202.4 ``Criteria for Product Eligibility To
Use the Certification Mark''
USDA is proposing to add a paragraph and subparagraphs to section
3202.4 that describe the biobased content criteria for complex
assemblies. Procedures for designating complex assemblies for the
Federal preferred procurement initiative have been added to the
BioPreferred program Guidelines and this proposed action would update
[[Page 63848]]
the voluntary labeling program rules to include these products.
USDA is also proposing to add paragraphs to section 3202.4 to
present the criteria for evaluating whether products use ``innovative
approaches.'' The Conference Report on the 2014 Farm Bill states that
``It is the Managers' intention that all products in the program use
innovative approaches in the growing, harvesting, sourcing, procuring,
processing, manufacturing, or application of the biobased product.''
USDA is, therefore, proposing criteria to be used when evaluating
whether biobased products meet the requirement to use ``innovative
approaches.''
3. Revisions to Section 3202.5 ``Initial Approval Process''
USDA is proposing to amend paragraph (a)(1) to specifically address
situations where a manufacturer seeks certification for a new product
that is composed of the same biobased ingredients and has the same
biobased content as a previously certified product. In these cases,
where a new product for which certification is sought is composed of
the same biobased ingredients and has the same biobased content as a
product that has already been certified, the manufacturer may, in lieu
of having the new product tested, self-declare the biobased content of
the new product by referencing the tested biobased content of the
certified product. Certification of the original product must have been
obtained by either the manufacturer of the new product or by the
supplier of the biobased ingredients used in the new product. This
proposed provision would result in reduced biobased content testing,
and thus a cost savings, for manufacturers who use the same biobased
ingredients to formulate products that differ in size or shape or that
are marketed for different applications.
USDA is also proposing to amend paragraph (c)(5) to state that
manufacturers wishing to change the name of their company or the name
of a certified product must notify USDA in writing within 30 days of
making such changes.
USDA is also proposing to amend paragraph (d)(2) to clarify that,
although certifications do not have a predetermined expiration date,
they are subject to mandatory periodic auditing activities and to
suspension or revocation if biobased content violations are identified.
USDA is also amending this paragraph to allow for the revocation of a
certification if it is discovered that certification was issued as a
result of error(s) on the part of USDA during the approval process.
4. Revisions to Section 3202.8 ``Violations''
USDA is proposing to amend paragraph 3202.8(c)(3) to correct an
error in a reference cited in the paragraph. The reference to 7 CFR
part 3017 is incorrect. The appropriate references are 2 CFR part 417
and 48 CFR subpart 9.4.
5. Revisions to Section 3202.10 ``Oversight and Monitoring''
USDA is proposing to add a new section 3202.10(d) that identifies
three auditing efforts that will be ongoing for the voluntary labeling
program. The 2014 Farm Bill contained specific language authorizing
USDA to perform auditing and compliance activities necessary to ensure
that the label is used only on products that meet the established
eligibility criteria.
USDA expects to conduct audits of the voluntary labeling program on
an ongoing basis with audit activities conducted every other calendar
year (bi-annually). Audit activities will include three stages and will
be conducted in sequential order. Stage 1 was conducted in 2012, Stage
2 will be conducted in 2014, and Stage 3 will be conducted in 2016. In
2018, the sequence will start over with Stage 1.
Stage 1 auditing includes contacting all participants via email and
requesting that they complete a ``Declaration of Conformance Form.''
Program participants are asked to confirm that they still manufacture
the product and that the formulation and manufacturing processes remain
the same.
Stage 2 auditing consists of a random sampling of certified
products to confirm the accuracy of biobased content percentages
claimed. The participants whose products are selected will be required
to submit product samples to be tested by independent testing labs at
USDA expense.
Stage 3 auditing requires manufacturers of products that have been
certified for 5 years or more to have their products re-tested at their
expense to confirm that the biobased content remains at or above the
level at which the product was originally certified.
USDA believes that the audit program outlined above will be a
valuable tool in ensuring the integrity of the program and compliance
with the voluntary labeling program rules.
C. Costs, Benefits, and Transfers
----------------------------------------------------------------------------------------------------------------
Type Costs Benefits Transfers
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Quantitative..................... Unable to quantify at Unable to quantify at Unable to quantify at
this time; USDA seeks this time; USDA seeks this time; USDA seeks
comments that would help comments that would comments that would
to inform a quantitative help to inform a help to inform a
estimate of impacts. quantitative estimate quantitative estimate
of impacts. of impacts.
Qualitative...................... 1. Costs of developing Advances the objectives 1. Opens new (Federal)
biobased alternative of the BioPreferred market for biobased
products; program, as envisioned products that USDA
2. Costs to gather and by Congress in newly designates.
submit biobased product developing the 2002, 2. Opportunity for newly
information for 2008, and 2014 Farm developed biobased
BioPreferred Web site;. Bills. products to be
publicized via
BioPreferred Web site.
3. Loss of market share
by manufacturers who
choose not to offer
biobased versions of
products.
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IV. Discussion of This Proposed Rule
USDA is proposing to amend five sections of 7 CFR part 3202, as
described below.
A. 7 CFR 3202.2--Definitions
USDA is proposing to amend 7 CFR 3202.2 by revising three existing
definitions and adding four new definitions for terms that are used in
the voluntary labeling program rules as a result of revisions to
section 9002 made by the 2014 Farm Bill. USDA is also proposing to
delete three definitions that are no longer applicable. The proposed
changes to section 3202.2 are
[[Page 63849]]
discussed in more detail in the following paragraphs.
USDA is proposing to revise the existing definition of the term
``biobased product'' to add a statement that the term includes forest
products that meet biobased content requirements, notwithstanding the
market share the product holds, the age of the product, or whether the
market for the product is new or emerging. The addition of this
statement to the definition of ``biobased product'' is taken directly
from the language in the 2014 Farm Bill and emphasizes Congress'
intention that the mature market exclusion be removed and that forest
products be accepted into the BioPreferred program.
USDA is proposing to revise the definition of the term
``certification mark artwork'' by replacing the graphic images of the
three variations of the certification mark with slightly updated
images. In the updated images, the ``FP'' letters indicating that the
product is eligible for Federal preferred procurement have been moved
so that they show up better and a solid line has been added between the
text ``USDA Certified Biobased Product'' and the text that presents the
product's biobased content. These changes in the certification mark
graphics were made by the BioPreferred program after the current rule
was finalized but before the voluntary labeling program began
certifying products to display the mark. Therefore, this proposed
update will merely bring the graphics presented in the rule in line
with the graphics currently being issued and will not require any
participants to revise their label graphics.
USDA is proposing to revise the definition of the term
``intermediate ingredient or feedstock'' to align the definition with
the one presented in subpart A of 7 CFR 3201 (the BioPreferred program
Guidelines). The definition presented in the Guidelines was revised in
response to the language in the 2008 Farm Bill (79 FR 44641; August 1,
2014).
USDA is proposing to add a new definition for the term ``designated
product category.'' This term has been adopted in the Guidelines as a
replacement for the term ``designated item'' because of confusion
caused by the inconsistent use of the word ``item.'' This proposal
would bring the terminology used in the voluntary labeling rules in
line with the existing Guidelines.
USDA is proposing to add a new definition for the term ``qualified
biobased product'' to indicate a biobased product that is eligible for
Federal preferred procurement. This term is used in the Guidelines and
adding it to the voluntary labeling rule would help in understanding
the difference between a ``qualified biobased product'' and a
``certified biobased product'' (one that has been certified to display
the certification mark).
USDA is also proposing to add definitions for the terms ``forest
product'' and ``renewable chemicals.'' These terms were defined in the
text of the 2014 Farm Bill and USDA is proposing to add them verbatim
to the voluntary labeling rule. The term ``forest product'' is used in
language clarifying Congress' intent that these products, regardless of
the market share the product holds, the age of the product, or whether
the product's market is new or emerging, are eligible for Federal
preferred procurement and for the voluntary labeling program as long as
the product meets biobased content requirements and use innovative
approaches in the growing, harvesting, sourcing, procuring, processing,
manufacturing, or application of the biobased product.
The term ``renewable chemical'' is also defined in the 2014 Farm
Bill and USDA is proposing to add this definition to the voluntary
labeling program rules. Both the 2008 and 2014 Farm Bills emphasize
Congress' intent that USDA include intermediate ingredients and
feedstock materials in the BioPreferred program and renewable chemicals
make up a significant portion of these biobased materials. USDA
believes that having a clear definition of the term ``renewable
chemicals'' will be useful as intermediate ingredients and feedstock
materials are incorporated into the BioPreferred program.
USDA is proposing to delete the terms ``BioPreferred product'' and
``Designated item'' because the use of the terms has led to confusion
and the terms have been replaced with other, more accurate terms. The
term ``BioPreferred product'' is being replaced with the terms
``certified biobased product'' and ``qualified biobased product''
because these terms account for the fact that the BioPreferred program
has two initiatives, the voluntary labeling program and the Federal
preferred procurement program, and products may be eligible for either
initiative.
USDA is proposing to delete the term ``Designated item'' and
replace it with the term ``Designated product category,'' as discussed
above. This change has already been made in the Guidelines and is being
proposed to make the voluntary labeling rule consistent.
USDA is proposing to delete the definition of the term ``Mature
market products.'' The 2014 Farm Bill clearly stated Congress' intent
that the BioPreferred program should ``promote biobased products,
including forest products, that apply an innovative approach to
growing, harvesting, sourcing, procuring, processing, manufacturing, or
application of biobased products regardless of the date of entry into
the marketplace.'' Product categories that were previously considered
to be mature market products and, thus, ineligible for the BioPreferred
program will now be included in the program if manufacturers
demonstrate that they apply an ``innovative approach'' in the life
cycle of their product. Therefore, the use of the term ``mature market
products'' is no longer applicable for the BioPreferred program and the
definition of the term is not needed.
B. 7 CFR 3202.4--Criteria for Product Eligibility To Use the
Certification Mark
Two significant changes to this section are being proposed in this
action. The first proposed change is to add a paragraph (b)(4) that
presents the minimum biobased content requirement for a product that
would be considered a ``complex assembly'' (a multi-component assembled
product with one or more component(s) being made with biobased
material). A key feature of complex assemblies is that their biobased
content cannot be determined using ASTM D6866 because of their size
and/or shape. USDA has incorporated into the BioPreferred program
Guidelines a procedure for determining the biobased content of a
complex assembly using an equation that yields the ratio of the mass of
biobased carbon in the assembly to the mass of total organic carbon in
the assembly. USDA has also added procedures to the Guidelines for
incorporating complex assemblies into the Federal preferred procurement
initiative of the BioPreferred program. This proposal incorporating a
minimum biobased content requirement into the voluntary labeling rule
is consistent with the Guidelines and language in the 2014 Farm Bill
that directs USDA to ``begin issuing criteria for determining which
assembled and finished products may qualify to receive the label''
within one year of enactment of the Farm Bill.
The text of the 2014 Farm Bill includes a statement that the
BioPreferred program shall ``promote biobased products, including
forest products, that apply an innovative approach to growing,
harvesting, sourcing, procuring, processing, manufacturing, or
application of biobased products regardless of the date
[[Page 63850]]
of entry into the marketplace.'' Product categories that were
previously considered to be mature market products and, thus,
ineligible for the BioPreferred program will now be included in the
program if manufacturers demonstrate that they apply an ``innovative
approach'' in the life cycle of their product. Working in conjunction
with the USDA Forest Products Laboratory, as required by the 2014 Farm
Bill (Section 9002(h)), USDA has developed proposed criteria that would
be used in evaluating whether a biobased product is eligible for the
voluntary labeling program because it uses ``innovative approaches.''
USDA is proposing that any one or more of four possible criteria must
be met to demonstrate that a biobased product uses ``innovative
approaches.'' This proposal to incorporate criteria for determining
``innovative approaches'' is consistent with the 2014 Farm Bill
language and, in a separate rulemaking, USDA is also proposing to add
the criteria to the BioPreferred program Guidelines.
The first possible criterion would require that the product or
material is either used or applied in applications that differ from
historical applications or that the product or material is grown,
harvested, manufactured, processed, sourced, or applied in other
innovative ways. There is an unknown, ever changing, and potentially
very large number of innovative approaches that may be used in the
manufacturing and/or application of biobased products. Therefore, USDA
will review information supporting claims of meeting criterion number
one and will approve the claims on a case-by-case basis.
The second possible criterion would require that the product or
material is manufactured or processed using renewable, biomass energy
or using technology that is demonstrated to increase energy efficiency
or reduce reliance on fossil-fuel based energy sources or that the
product or material is manufactured or processed with technologies that
ensure high feedstock material recovery and use.
The third possible criterion would require that the product or
material has a current Environmental Product Declaration as defined by
International Standard ISO 14025, Environmental Labels and
Declarations--Type III Environmental Declarations--Principles and
Procedures.
The fourth possible criterion would require that the product or
material is either:
1. sourced from a Legal Source (see Note below), a Responsible
Source, or a Certified Source as designated by ASTM D7612-10, Standard
Practice for Categorizing Wood and Wood-Based Products According to
Their Fiber Sources, or
2. 100% resourced or recycled (such as material obtained from
building deconstruction), or
3. from an urban environment and is acquired as a result of
activities related to a natural disaster, land clearing, right-of-way
maintenance, tree health improvement, or public safety.
Note: In item 1 above, the term ``legal source'' (also referred
to as a ``non-controversial source'') means that the wood fibers are
from jurisdictions with a low risk of illegal activity or from
controlled wood standards, stair-step standards, legality
assessments, or other proprietary standards. Products from non-
controversial sources are traceable to the applicable jurisdiction,
or chain of custody.
``Responsible source'' means that the wood fibers are acquired
from a legal source utilizing independently certified procurement
standards or are from a proprietary forestry standard or from
jurisdictions with regulatory or quasi-regulatory programs to
implement best management practices.
``Certified sources'' means wood fiber acquired in accordance
with, and independently certified to, an internationally recognized
voluntary forest certification standard or equivalent.
USDA believes that meeting any one or more of these four criteria
would be an acceptable demonstration that a biobased product uses
innovative approaches in either the growing, harvesting, sourcing,
procuring, processing, manufacturing, or application of the product.
C. 7 CFR 3202.5--Initial Approval Process
USDA is proposing to amend paragraph (a)(1) to specifically address
situations where a manufacturer seeks certification for a new product
that is composed of the same biobased ingredients and has the same
biobased content as a previously certified product. In these cases,
where a new product for which certification is sought is composed of
the same biobased raw materials and has the same biobased content as a
product that has already been certified, the manufacturer may, in lieu
of having the new product tested, self-declare the biobased content of
the new product by referencing the tested biobased content of the
certified product. This proposed provision would result in reduced
biobased content testing, and thus a cost savings, for manufacturers
who use the same biobased raw materials to formulate different
products.
USDA is proposing to amend paragraph (c)(5) to state that
manufacturers wishing to change the name of their company or the name
of a certified product must notify USDA in writing within 30 days of
making such changes.
USDA is also proposing to amend paragraph (d)(2) to clarify that,
although certifications do not have a predetermined expiration date,
they are subject to mandatory periodic auditing activities and to
suspension or revocation if biobased content violations are identified.
USDA is also amending this paragraph to allow for the revocation of a
certification if it is discovered that certification was issued as a
result of error(s) on the part of USDA during the approval process.
D. 7 CFR 3202.8--Violations
USDA is proposing to correct a reference in paragraph (c)(3). The
original reference to 7 CFR part 3017 is incorrect and should refer
instead to 2 CFR part 417 and 48 CFR subpart 9.4.
E. 7 CFR 3202.10--Oversight and Monitoring
USDA is proposing to add a new section 3202.10(d) that identifies
three auditing efforts that will be ongoing for the voluntary labeling
program. The 2014 Farm Bill contained specific language authorizing
USDA to perform auditing and compliance activities necessary to ensure
that the label is used only on products that meet the established
eligibility criteria.
USDA expects to conduct audits of the voluntary labeling program on
an ongoing basis with audit activities conducted every other calendar
year (bi-annually). Audit activities will include three stages and will
be conducted in sequential order. Stage 1 was conducted in 2012, Stage
2 will be conducted in 2014, and Stage 3 will be conducted in 2016. In
2018, the sequence will start over with Stage 1.
Stage 1 auditing includes contacting all participants via email and
requesting that they complete a ``Declaration of Conformance Form.''
Program participants are asked to confirm that they still manufacture
the product and that the formulation and manufacturing processes remain
the same. Participants are also asked to list all active products and
advise the USDA of any complaints regarding the claim of the biobased
content. The first Stage 1 auditing activity was completed in 2012 and
the second Stage 1 audit will be conducted in 2018.
Stage 2 auditing consists of a random sampling of certified
products to confirm the accuracy of biobased
[[Page 63851]]
content percentages claimed. The participants whose products are
selected will be required to submit product samples to be tested by
independent testing labs at USDA expense. The first Stage 2 auditing
activity is scheduled to be completed during 2014 and includes the re-
testing of 50 randomly selected products. The second Stage 2 audit will
be conducted in 2020.
USDA chose to re-test 50 products during the initial Stage 2 audit
because that number was believed to be sufficient to meet the objective
of preserving the integrity of the labeling program. In addition, ASTM
Standard E2234 Standard Practice for Sampling a Stream of Product by
Attributes Indexed by AQL (acceptance quality limit) calls for 50
samples when the total lot size is between 1,201 and 3,200 and
following general inspection level 1. At the time the audit Stage 2
plans were developed there were slightly less than 1,500 certified
products.
Stage 3 auditing requires manufacturers of products that have been
certified for 5 years or more to have their products re-tested at their
expense to confirm that the biobased content remains at or above the
level at which the product was originally certified. The first Stage 3
auditing activity is scheduled to be completed during 2016 and the
second Stage 3 audit will be conducted in 2022. The voluntary labeling
program was initiated in 2011 and, at the time of the first Stage 3
audit, only those products certified during the first year of the
program will require re-testing.
USDA believes that the audit program outlined above will be a
valuable tool in ensuring the integrity of the program and compliance
with the voluntary labeling program rules.
V. Request for Comment
USDA is requesting comment on all aspects of these proposed
amendments to the voluntary labeling program rules. In particular, USDA
requests that stakeholders provide comment on the following topics:
1. Whether the proposed definitions are clear, complete, and
appropriate.
2. Whether the criteria that are being proposed for use in
determining if biobased products meet the requirement to apply an
``innovative approach'' are appropriate and, if not, specific
recommendations on alternative criteria. USDA is particularly
interested in expanding the criteria to apply to products made from
traditional materials such as cotton, wool, leather, or other biobased
materials.
VI. Regulatory Information
A. Executive Orders 12866 and 13563: Regulatory Planning and Review
Executive Orders 13563 and 12866 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, of reducing costs, of harmonizing rules, and of promoting
flexibility. This rule has been designated a ``significant regulatory
action'' under section 3(f) of Executive Order 12866. Accordingly, the
rule has been reviewed by the Office of Management and Budget.
1. Need for the Rule
This proposed rule would amend the voluntary labeling program rules
to establish the regulatory framework for the labeling of products that
were previously excluded from the program because they were mature
market products. The designation of such products is specifically
required under the Agricultural Act of 2014, which states that the
Guidelines shall: ``(vi) promote biobased products, including forest
products, that apply an innovative approach to growing, harvesting,
sourcing, procuring, processing, manufacturing, or application of
biobased products regardless of the date of entry into the
marketplace.''
2. Costs, Benefits and Transfers
This rule advances the objectives of the BioPreferred program, as
envisioned by Congress in the 2002, 2008 and 2014 Farm Bills, by
expanding the scope of products that may be certified to display the
USDA Certified Biobased Product certification mark. The entry into the
voluntary labeling program of biobased products that were previously
considered to be mature market products provides newly developed
biobased products the opportunity to be publicized via the BioPreferred
Web site. Thus, the rule is expected to increase demand for these
products, which, in turn, is expected to increase demand for those
agricultural products that can serve as ingredients and feedstocks.
This expansion of the voluntary labeling program will, thus, yield
private benefits for businesses producing these ingredients and
feedstocks.
Simultaneously, this action would reduce demand for competing
products that are not eligible for the voluntary labeling program.
Producers of biobased products, including intermediate ingredients and
feedstocks, that are not certified for labeling or producers of non-
biobased products could face a loss of market share within both the
public and Federal agencies. USDA does not have sufficient information
on the expected extent of this potential loss of market share to assign
a dollar value to this impact.
As part of the proposed Stage 3 auditing process to be conducted
during calendar year 2016, manufacturers of biobased products that have
been certified for five or more years will be required to have their
products biobased content re-tested. We estimate that the cost for
product re-testing is about $300 to $400 per product. The labeling
program was implemented in 2011 and only those products that were
certified during 2011 will incur the re-testing cost of the Stage 3
audit to be conducted during 2016. There were 1,338 applications for
certification received during 2011 and USDA estimates that 1,000 of the
products represented by those applications continue to display the
label under the original certification. Thus, the total estimated cost
of the auditing effort to all manufacturers would be, at most, $400,000
(1,000 products x $400 per test) during 2016. Considering that this
total cost would be spread over several hundred manufacturers making
these products and that no additional re-testing costs are expected
until the year 2022, USDA believes that the cost to any one
manufacturer is reasonable.
We request information that would help us quantify the shift in
product sales potentially resulting from this action.
B. Regulatory Flexibility Act (RFA)
The RFA, 5 U.S.C. 601-602, generally requires an agency to prepare
a regulatory flexibility analysis of any rule subject to notice and
comment rulemaking requirements under the Administrative Procedure Act
or any other statute unless the agency certifies that the rule will not
have a significant economic impact on a substantial number of small
entities. Small entities include small businesses, small organizations,
and small governmental jurisdictions.
Although the voluntary labeling program ultimately may have a
direct impact on a substantial number of small entities, USDA has
determined that this proposed rule itself will not have a direct
significant economic impact on a substantial number of small entities.
Private sector manufacturers and
[[Page 63852]]
vendors of biobased products voluntarily may provide information to
USDA through the means set forth in this rule. However, the rule
imposes no requirement on manufacturers and vendors to do so, and does
not differentiate between manufacturers and vendors based on size. USDA
does not know how many small manufacturers and vendors may opt to
participate in the voluntary labeling program. USDA anticipates that
this program will positively impact small entities which manufacture or
sell biobased products by allowing them to display the certification
mark and to list their products in the BioPreferred program Web site
catalog. However, this program may decrease opportunities for small
businesses that manufacture or sell non-biobased products or provide
components for the manufacturing of such products. It is, however, not
possible for USDA to definitively assess these anticipated impacts on
small entities.
C. Executive Order 12630: Governmental Actions and Interference With
Constitutionally Protected Property Rights
This proposed rule has been reviewed in accordance with Executive
Order 12630, Governmental Actions and Interference with
Constitutionally Protected Property Rights, and does not contain
policies that would have implications for these rights.
D. Executive Order 12988: Civil Justice Reform
This proposed rule has been reviewed in accordance with Executive
Order 12988, Civil Justice Reform. This rule would not preempt State or
local laws, is not intended to have retroactive effect, and would not
involve administrative appeals.
E. Executive Order 13132: Federalism
This proposed rule would not have sufficient federalism
implications to warrant the preparation of a Federalism Assessment.
Provisions of this rule would not have a substantial direct effect on
States or their political subdivisions or on the distribution of power
and responsibilities among the various government levels.
F. Unfunded Mandates Reform Act of 1995
This proposed rule contains no Federal mandates under the
regulatory provisions of Title II of the Unfunded Mandates Reform Act
of 1995 (UMRA), 2 U.S.C. 1531-1538, for State, local, and tribal
governments, or the private sector. Therefore, a statement under
section 202 of UMRA is not required.
G. Executive Order 12372: Intergovernmental Review of Federal Programs
For the reasons set forth in the Final Rule Related Notice for 7
CFR part 3015, subpart V (48 FR 29115, June 24, 1983), this program is
excluded from the scope of the Executive Order 12372, which requires
intergovernmental consultation with State and local officials. This
program does not directly affect State and local governments.
H. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments
This proposed rule has been reviewed in accordance with the
requirements of Executive Order 13175, Consultation and Coordination
With Indian Tribal Governments. The review reveals that this proposed
regulation will not have substantial and direct effects on Tribal
governments and will not have significant Tribal implications.
I. Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
3501 through 3520), the information collection under the voluntary
labeling program is currently approved under OMB control number 0503-
0020.
J. E-Government Act Compliance
USDA is committed to compliance with the E-Government Act, which
requires Government agencies, in general, to provide the public the
option of submitting information or transacting business electronically
to the maximum extent possible. USDA is implementing an electronic
information system for posting information voluntarily submitted by
manufacturers or vendors on the products for which they intend to seek
certification to display the label or which they intend to offer for
Federal preferred procurement under each designated item. For
information pertinent to E-Government Act compliance related to this
rule, please contact Ron Buckhalt at (202) 205-4008.
List of Subjects in 7 CFR Part 3201
Labeling, Procurement, USDA Certified Biobased Product.
For the reasons stated in the preamble, the Department of
Agriculture is proposing to amend 7 CFR part 3202 as follows:
PART 3202--VOLUNTARY LABELING PROGRAM FOR BIOBASED PRODUCTS
0
1. The authority citation for part 3202 continues to read as follows:
Authority: 7 U.S.C. 8102.
0
2. Section 3202.2 is amended by:
0
a. Removing the definitions of ``BioPreferred Product,'' ``Designated
item,'' and ``Mature market products''; and
0
b. Revising the definitions of ``Biobased product,'' ``Certification
mark artwork,'' ``Intermediate ingredient or feedstock''; and
0
c. Adding, in alphabetical order, definitions for ``Designated product
category,'' ``Forest product,'' ``Qualified biobased product,'' and
``Renewable chemical.''
The revisions and additions read as follows:
Sec. 3202.2 Definitions.
* * * * *
Biobased product. A product determined by USDA to be a commercial
or industrial product (other than food or feed) that is:
(1) Composed, in whole or in significant part, of biological
products, including renewable domestic agricultural materials and
forestry materials; or
(2) An intermediate ingredient or feedstock.
The term ``biobased product'' includes, with respect to forestry
materials, forest products that meet biobased content requirements,
notwithstanding the market share the product holds, the age of the
product, or whether the market for the product is new or emerging.
* * * * *
Certification mark artwork. The distinctive image, as shown in
Figures 1-3, that identifies products as USDA Certified.
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* * * * *
Designated product category. A generic grouping of biobased
products, including those final products made from designated
intermediate ingredients or feedstocks, or complex assemblies
identified in subpart B of 7 CFR part 3201, that is eligible for the
procurement preference established under section 9002 of FSRIA.
* * * * *
Forest product. A product made from materials derived from the
practice of forestry or the management of growing timber. The term
``forest product'' includes:
(1) Pulp, paper, paperboard, pellets, lumber, and other wood
products; and
(2) Any recycled products derived from forest materials.
* * * * *
Intermediate ingredient or feedstock. A material or compound made
in whole or in significant part from biological products, including
renewable agricultural materials (including plant, animal, and marine
materials) or forestry materials that have undergone value added
processing (including thermal, chemical, biological, or a significant
amount of mechanical processing), excluding harvesting operations,
offered for sale by a manufacturer or vendor and that is subsequently
used to make a more complex compound or product.
* * * * *
Qualified biobased product. A product that is eligible for Federal
preferred procurement because it meets the definition and minimum
biobased content criteria for one or more designated product
categories, or one or more designated intermediate ingredient or
feedstock categories, as specified in subpart B of 7 CFR part 3201.
* * * * *
Renewable chemical. A monomer, polymer, plastic, formulated
product, or chemical substance produced from renewable biomass.
* * * * *
0
3. Section 3202.4 is amended by revising the introductory text and the
headings for paragraphs (b)(1) and (2) and adding paragraphs (b)(4) and
(c) to read as follows:
Sec. 3202.4 Criteria for product eligibility to use the certification
mark.
A product must meet each of the criteria specified in paragraphs
(a) through (c) of this section in order to be eligible to receive
biobased product certification.
* * * * *
(b) * * *
(1) Qualified Biobased Products. * * *
(2) Finished biobased products that are not Qualified Biobased
Products. * * *
* * * * *
(4) Finished products that are complex assemblies.
(i) If the product is a complex assembly, as defined in subpart A
of 7 CFR part 3201, that is not eligible for Federal preferred
procurement at the time the application for certification is submitted,
the applicable minimum biobased content is 25 percent. The biobased
content shall be determined using the procedures specified in Sec.
3201.7(c)(3) of this chapter. Manufacturers, vendors, groups of
manufacturers and/or vendors, and trade associations may propose an
alternative applicable minimum biobased content for the product by
developing, in consultation with USDA, and conducting an analysis to
support the proposed alternative applicable minimum biobased content.
If approved by USDA, the proposed alternative applicable minimum
biobased content would become the applicable minimum biobased content
for the complex assembly to be labeled.
(ii) If a product certified under paragraph (b)(4)(i) of this
section is within a category that USDA subsequently designates for
Federal preferred procurement, the applicable minimum biobased content
shall become, as of the effective date of the final designation rule,
the minimum biobased content specified for the item as found in subpart
B of 7 CFR part 3201.
(c) Innovative approach. In determining eligibility for
certification under the BioPreferred program, USDA will consider as
eligible only those products that use innovative approaches in the
growing, harvesting, sourcing, procuring, processing, manufacturing, or
application of the biobased product. USDA will consider products that
meet one or more of the criteria in paragraphs (c)(1) through (4) of
this section to be eligible for certification. USDA may deny
certification for any products whose manufacturers are unable to
provide USDA with the documentation necessary to verify claims that
innovative approaches are used in the growing, harvesting, sourcing,
procuring, processing, manufacturing, or application of their biobased
products.
(1) Product applications. (i) The product or material is used or
applied in applications that differ from historical applications; or
(ii) The product or material is grown, harvested, manufactured,
processed, sourced, or applied in other innovative ways.
(2) Manufacturing and processing. (i) The product or material is
manufactured or processed using renewable, biomass energy or using
technology that is demonstrated to increase energy efficiency or reduce
reliance on fossil-fuel based energy sources; or
(ii) The product or material is manufactured or processed with
technologies that ensure high feedstock material recovery and use.
(3) Environmental Product Declaration. The product has a current
Environmental Product Declaration as defined by International Standard
ISO 14025, Environmental Labels and Declarations--Type III
Environmental Declarations--Principles and Procedures.
(4) Raw material sourcing. (i) The raw material used in the product
is sourced from a Legal Source, a Responsible Source, or a Certified
Source as designated by ASTM D7612-10, Standard Practice for
Categorizing Wood and Wood-Based Products According to Their Fiber
Sources, or:
(ii) The raw material used in the product is 100% resourced or
recycled (such as material obtained from building deconstruction), or
(iii) The raw material used in the product is from an urban
environment and is acquired as a result of activities related to a
natural disaster, land clearing, right-of-way maintenance, tree health
improvement, or public safety.
0
4. Section 3202.5 is amended by:
0
a. Revising paragraph (a)(1);
0
b. Adding a sentence to the end paragraph (c) introductory text;
0
c. Adding paragraph (c)(5);
0
d. Revising paragraph (d)(1); and
0
e. Adding paragraphs (d)(2)(iv) and (v).
The revisions and additions read as follows:
Sec. 3202.5 Initial approval process.
(a) * * *
(1) General content. The applicant must provide contact information
and product information including all brand names or other identifying
information, intended uses of the product, information to document that
one or more of the innovative approach criteria specified in section
3202.4(c) has been met, and, if applicable, the corresponding product
category classification for Federal preferred procurement. The
applicant must also provide a sample of the product to be analyzed by a
third-party, ISO 9001 conformant, testing entity for
[[Page 63855]]
determination of the biobased content. In situations where a new
product for which certification is sought is composed of the same
biobased ingredients and has the same biobased content as a product
that has already been certified, the manufacturer may, in lieu of
having the new product tested, self-declare the biobased content of the
new product by referencing the tested biobased content of the original
certified product. Certification of the original product must have been
obtained by either the manufacturer of the new product or by the
supplier of the biobased ingredients used in the new product.
(c) * * * Paragraph (c)(5) of this section presents the procedures
for revising the information provided under paragraphs (c)(1) through
(4) of this section after a notice of certification has been issued.
* * * * *
(5) If at any time, during the application process or after a
product has been certified, any of the information specified in
paragraphs (c)(1) through (4) of this section changes, the applicant
must notify USDA of the change within 30 days. Such notification must
be provided in writing to USDA.
(d) * * *
(1) The effective date of certification is the date on which the
applicant receives a notice of certification from USDA. Except as
specified in paragraphs (d)(2)(i) through (d)(2)(v) of this section,
certifications will remain in effect as long as the product is
manufactured and marketed in accordance with the approved application
and the requirements of this subpart.
(2) * * *
(iv) All certifications are subject to USDA periodic auditing
activities, as described in Sec. 3202.10(d). If a manufacturer or
vendor of a certified biobased product fails to participate in such
audit activities or if such audit activities reveal biobased content
violations, as specified in Sec. 3202.8(b)(1), the certification will
be subject to suspension and revocation according to the procedures
specified in Sec. 3202.8(c).
(v) If USDA discovers that a certification has been issued for an
ineligible biobased product as a result of errors on the part of USDA
during the approval process, USDA will notify the product's
manufacturer or vendor in writing that the certification is revoked
effective 30 days from the date of the notice.
0
5. Section 3202.8 is amended by revising paragraph (c)(3) to read as
follows:
Sec. 3202.8 Violations.
* * * * *
(c) * * *
(3) Other remedies. In addition to the suspension or revocation of
the certification to use the label, depending on the nature of the
violation, USDA may pursue suspension or debarment of the entities
involved in accordance with 2 CFR part 417 and 48 CFR subpart 9.4. USDA
further reserves the right to pursue any other remedies available by
law, including any civil or criminal remedies, against any entity that
violates the provisions of this part.
0
6. Section 3202.10 is amended by adding paragraph (d) to read as
follows:
Sec. 3202.10 Oversight and monitoring.
* * * * *
(d) Audits. USDA expects to conduct audits of the voluntary
labeling program on an ongoing basis with audit activities conducted
every other calendar year (bi-annually). Audit activities will include
three stages and will be conducted in sequential order as follows:
(1) Stage 1 auditing includes contacting all participants via email
and requesting that they complete a ``Declaration of Conformance
Form.'' Program participants are asked to confirm that they still
manufacture the product and that the formulation and manufacturing
processes remain the same. Participants are also asked to list all
active products and advise the USDA of any complaints regarding the
claim of the biobased content. The first Stage 1 auditing activity was
completed in 2012 and the second Stage 1 audit will be conducted in
2018.
(2) Stage 2 auditing consists of a random sampling of certified
products to confirm the accuracy of biobased content percentages
claimed. The participants whose products are selected will be required
to submit product samples to be tested by independent testing labs at
USDA expense. The first Stage 2 auditing activity is scheduled to be
completed during 2014 and the second Stage 2 audit will be conducted in
2020.
(3) Stage 3 auditing requires manufacturers of products that have
been certified for 5 years or more to have their products re-tested at
their expense to confirm that the biobased content remains at or above
the level at which the product was originally certified. The first
Stage 3 auditing activity is scheduled to be completed during 2016 and
the second Stage 3 audit will be conducted in 2022.
Dated: October 15, 2014.
Gregory L. Parham,
Assistant Secretary For Administration, U.S. Department of Agriculture.
[FR Doc. 2014-25427 Filed 10-24-14; 8:45 am]
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