Paper and Paper-Based Packaging Promotion, Research and Information Order; Clarifying Changes

<RULE> DEPARTMENT OF AGRICULTURE <SUBAGY>Agricultural Marketing Service</SUBAGY> <CFR>7 CFR Part 1222</CFR> <DEPDOC>[Doc. No. AMS-SC-23-0080]</DEPDOC> <SUBJECT>Paper and Paper-Based Packaging Promotion, Research and Information Order; Clarifying Changes</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Agricultural Marketing Service, Department of Agriculture (USDA). <HD SOURCE="HED">ACTION:</HD> Final rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> This final rule implements clarifying amendments to the Paper and Paper-Based Packaging Promotion, Research and Information Order (Order). The amendments include an added definition for partnership; clarification of the nominations process; clarification about in person and electronic voting for any Board meetings; an update of the timing of financial reporting; and a revision of requirements for when exemptions can be requested. This final rule brings language in the Order up to date with current industry practices. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> This final rule is effective February 20, 2025. </EFFDATE> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Samantha Mareno, Agricultural Marketing Specialist, Market Development Division, Specialty Crops Program, Agricultural Marketing Service, U.S. Department of Agriculture, 1400 Independence Avenue SW, Room 1406-S, STOP 0244, Washington, DC 20250-0244; Telephone: (720) 827-4907; or Email: <E T="03">Samantha.Mareno@usda.gov.</E> </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> This final rule affecting the Order (7 CFR part 1222) is authorized by the Commodity Promotion, Research, and Information Act of 1996 (Act) (7 U.S.C. 7411-7425). <HD SOURCE="HD1">Executive Orders 12866, 13563 and 14094</HD> The Agricultural Marketing Service (AMS) is issuing this rule in conformance with Executive Orders 12866, 13563, and 14094. 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. Executive Order 14094 reaffirms, supplements, and updates Executive Order 12866 and further directs agencies to solicit and consider input from a wide range of affected and interested parties through a variety of means. This rule is not a significant regulatory action within the meaning of Executive Order 12866. Accordingly, this action has not been reviewed by the Office of Management and Budget under section 6 of the Executive Order. <HD SOURCE="HD1">Executive Order 13175</HD> This action has been reviewed in accordance with the requirements of Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, which requires agencies to consider whether their rulemaking actions will have Tribal implications. AMS has determined that this rule is unlikely to have substantial direct effects on one or more Indian Tribes, or the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes. <HD SOURCE="HD1">Executive Order 12988</HD> This rule has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have retroactive effect. Section 524 of the 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 Act (7 U.S.C. 7418), a person subject to an order may file a written petition with the U.S. Department of Agriculture (USDA), stating that an order, any provision of an order, or any obligation imposed in connection with an order, is not established in accordance with the law, and request a modification of an order or an exemption from an order. Any petition filed challenging an order, any provision of an order, or any obligation imposed in connection with an order, shall be filed within two years after the effective date of an order, provision, or obligation subject to challenge in the petition. The petitioner will have the opportunity for a hearing on the petition. Thereafter, USDA will issue a ruling on the petition. The 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. <HD SOURCE="HD1">Background</HD> Under the Order, which became effective on January 23, 2014, the Paper and Packaging Board (Board), with oversight by USDA, administers a nationally coordinated program of research, promotion and information designed to strengthen the paper and paper-based packaging industry. The program covers four types of paper and paper-based packaging—printing and writing paper (used to make products for printing, writing, and other communication purposes), kraft packaging paper (used for products like grocery bags and sacks), containerboard (used to make corrugated boxes, shipping containers, and related products), and paperboard (used for food and beverage packaging, tubes, and other miscellaneous products). The program is financed by assessments on domestic manufacturers and importers of paper and paper-based packaging. This final rule makes multiple clarifying amendments to the Order. These amendments include an added definition for partnership; clarification on the nomination process; clarification of language about in person and electronic voting for any Board meetings; an update of the timing of financial reporting; and revised requirements concerning when exemptions may be requested. The Board, which is composed of domestic manufacturers from across the country and importers, unanimously recommended the changes to the Order on August 19, 2023. This action modifies language in the Order to bring it up to date with current industry practices. <HD SOURCE="HD1">Board Recommendation to Revise Order</HD> The final rule revises several sections in subpart A of the Order. This rule changes the language in § 1222.7 from fiscal period to fiscal year as the term is better understood by the industry. Sections 1222.12 and 1222.13 include the term produce and producer respectively in the definition of manufacture and manufacturer. The term produce and producer are not used in the paper and paper-based packaging industry. Therefore, the final rule removes these terms from the definition of manufacture and manufacturer. Lastly, this rule adds a new term for partnership in § 1222.19 and states that a partnership includes, but is not limited to, spouses and joint ventures. This revision clarifies who is responsible for paying assessments. With this change, the existing §§ 1222.19 through 1222.29 are renumbered. Section 1222.41 outlines the Board nominations and appointments process. This rule amends § 1222.41(c)(1) by specifically issuing a call for nominations to all current manufacturers and importers who have paid assessments during the prior fiscal year. Furthermore, revisions to § 1222.41(c)(4) and (5) remove repetitive language. Lastly, § 1222.41(c)(10) is revised by the rule to specify that no two members shall be employed by a single manufacturer or importer that pays assessments under the Order to avoid confusion as to who can serve on the Board. Section 1222.43(a) allows the Secretary to remove a Board member or employee for failure or refusal to perform their duties, per the Board's recommendation. This final rule removes the employee clause to be consistent with language in other research and promotion orders. Section 1222.44 outlines the Board's procedures for conducting Board meetings. Section 1222.44(c) states that votes shall be cast in person at an assembled meeting. Additionally, § 1222.44(d) allows for other means of voting in lieu of voting at an assembled meeting. This final rule includes revisions to both sections to include options for electronic voting, or other means. Section 1222.47 outlines prohibited activities for the Board. Section 1222.47(c) states no program, plan or project including advertising shall be false, misleading, or disparaging to another agriculture commodity. To be consistent in writing style, the rule modifies the language to state any program, plan or project including advertising that is false, misleading, or disparaging to another agriculture commodity. This section is updated to ensure clarity in wording. Section 1222.50(i) outlines the operating monetary reserve for the Board and states that the funds in the reserve may not exceed one fiscal year's budget of expenses. This rule increases the funds in the reserve so they may not exceed two fiscal years, which is consistent with other research and promotion orders. Section 1222.51(b) describes when financial statements are to be submitted to the Department. The current timeframe is 30 days after the time period to which it applies, which is too restrictive because the Board reports financial statements on a quarterly basis. Therefore, this final rule specifies that the financial statements are to be submitted quarterly and no later than 70 days after the period to which it applies. Section 1222.51(c) refers to the annual financial statement that is submitted to the Department. The annual financial statement is due to the Department within 90 days after the end of the fiscal year. The Board has had difficulty in meeting this short deadline. Therefore, this rule extends the timeframe to ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 32k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━