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Final Regulatory Flexibility Act Analysis In accordance with the Regulatory Flexibility Act RFA 5 U.S.C. 601
612, the Agricultural Marketing Service AMS is required to examine the impact of the action on small entities.

Accordingly, AMS has considered the economic impact of this action on such entities.
The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to the actions so that small businesses will not be disproportionately burdened. The Small Business Administration SBA defines, in 13 CFR part 121, small agricultural service firms domestic manufacturers and importers as those having annual receipts of no more than $8 million.1
The Random Lengths Publications, Inc.s yearly average framing lumber
composite price was $356 per mbf in 2019. Dividing the $8 million threshold that defines an agricultural service firm as small by this price results in a maximum threshold of 22.5 million board feet mmbf of softwood lumber per year that a domestic manufacturer or importer may ship to be considered a small entity for purposes of the RFA.
Table 2 shows the number of entities and the amount of volume they represent that may be categorized as small or large based on the SBA
definition.

As shown in Table 2, there are a total of 1,396 domestic manufacturers and importers of softwood lumber based on 2019 data. Of these, 1,000 entities, or 72
percent, shipped or imported less than 22.5 mmbf and would be considered small under the SBA definition. These 1,000 entities domestically manufactured or imported 3.25 billion board feet bbf in 2019, less than 5
percent of total volume.
While this action increases the assessment obligation on domestic manufacturers and importers from $0.35
per mbf to $0.41 per mbf, the impact on these entities will be minimal and uniform. The current assessment rate of $0.35 per mbf represents 0.1 percent of the Random Lengths 2019 average framing lumber composite price of $356
per mbf. The assessment rate of $0.41
per mbf is 0.12 percent of this price. The increase in assessment rate represents an increase in cost to domestic manufacturers and importers of twothousandth of one percentage point relative to their average received price.
This cost, though minimal, will also be offset by the benefits derived from the program.
The 1996 Farm Bill requires that Research and Promotion programs be evaluated every five years with the specific goal of measuring the economic impact of commodity promotion on demand for the commodity. The Board completed its first five-year evaluation
of program effectiveness in 2016. The five-year evaluation, conducted by Prime Consulting, found that softwood lumber use per square foot increased nearly 23 percent among architects and structural engineers from the programs inception in 2011 to 2015. The evaluation also found a cumulative return on investment ROI of more than $15 in increased sales of softwood lumber per $1 spent on promotion by the program between 2012 and 2015.
The cumulative ROI was updated in 2019 to reflect the time period of 2012
to 2018. The result was a return of more than $23 in increased sales per $1 spent on promotion.
This rule amends 1217.52b to increase the assessment rate from $0.35
to $0.41 per mbf. The Order is administered by the Board with oversight by the USDA. Under the program, assessments are collected from domestic manufacturers and importers and used for research and promotion projects designed to strengthen the position of softwood lumber in the marketplace. The additional funds collected at the increased rate will enable the Board to maintain its existing programs, while supporting new programs that will help maintain and expand markets for softwood lumber.
This rule also amends 1217.52h to add the conversion factor for square meters to board feet and make one
conforming change to section 1217.52c regarding voting requirements.
Regarding alternatives, the Board considered maintaining the current assessment rate. However, a majority of Board members determined that an increase was needed to adequately support existing programs and fund new initiatives. The Board discussed increasing the assessment at its meeting in November 2018, but after much consideration it determined it was not the right time for the industry to make such a recommendation. In 2019, with the reduction of assessment revenue and the program cuts that were made, the Board again considered the merits of increasing the assessment rate. This was discussed at several Board committee meetings, including meetings of the Executive Committee on September 17, 2019, and November 19, 2019, and the Finance Committee on November 19, 2019. The Board also considered rates of $0.39 and $0.50 per mbf. After much discussion at committee meetings and with the full Board, the Board recommended increasing the rate from $0.35 to $0.41 per mbf.
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 05810093. This rule will not result in a change to the
1 SBA does have a small business size standard for Sawmills of 500 employees see https
www.sba.gov/sites/default/files/2019-08/
SBA%20Table%20of%20Size%20Standards_
Effective%20Aug%2019%2C%202019_Rev.pdf.

Based on USDAs understanding of the lumber industry, using this criterion would be impractical as sawmills often use contractors rather than employees to operate and, therefore, many mills would fall under this criterion while being, in
reality, a large business. Therefore, USDA used agricultural service firm as a more appropriate criterion for this analysis.

as well as professionals; and restore the Boards communications program budget so that by 2025 it will be equivalent to 2018 expenditures.
Therefore, the Board recommended increasing the assessment rate in the Order from $0.35 to $0.41 per mbf.

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Federal Register / Vol. 86, No. 36 / Thursday, February 25, 2021 / Rules and Regulations