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Federal Register / Vol. 86, No. 36 / Thursday, February 25, 2021 / Rules and Regulations
than 15 mmbf annually, exports of softwood lumber from the United States, and shipments and imports of organic softwood lumber are exempt from the Orders assessment requirements.
Pursuant to 1217.52, and subject to the exemptions specified in 1217.53, each domestic manufacturer and importer shall pay an assessment rate of $0.35 per mbf of softwood lumber, except that no entity shall pay an assessment on the first 15 mmbf of softwood lumber otherwise subject to assessment in a fiscal year. The assessment rate may not be less than $0.35 per mbf nor more than $0.50 per mbf. Section 1217.44c prescribes that the Board may recommend to the Secretary a change in the assessment rate as it deems appropriate by at least a majority of Board members plus two exclusive of vacant seats.
The $0.35 per mbf assessment rate has been in effect since the programs inception in 2011. The Boards fiscal year runs from January 1 through December 31. Board expenditures for the five-year period from 20142018
have ranged from a low of $12.35
million in 2014 to a high of $15.32
million in 2016; expenditures in 2018
were $14.23 million. Program expenditures averaged $12.96 million during those five years, with annual expenditures averaging $3.29 million 24 percent for research conducted on wood standards; $4.06 million 29
percent on a communications program, which includes continuing education courses for architects and engineers; and $3.94 million 28 percent on a construction and design program that provides technical support to architects and structural engineers about using wood. Pursuant to 1217.50h, administrative expenditures have been under 8 percent of the assessments collected and other income received by and available to the Board for the fiscal year.
Board assessment income has ranged from $12.55 million in 2014 to $13.74

million in 2018. About 70 percent of the assessment income is from domestic manufacturers and 30 percent is from importers. Additionally, pursuant to 1217.50i, the Board maintains a monetary reserve with funds that do not exceed one fiscal periods budget. This rule will also amend 1217.52h to add the conversion factor for square meters to board feet. Currently, the Order provides a factor used to convert cubic meters of imported softwood lumber into the equivalent volume of thousands of board feet, thus enabling the Board to calculate appropriate assessments.
Softwood lumber is also being imported in square meters. Adding a conversion factor for square meters will better reflect current industry practices and facilitate the administration of the program.
Finally, this rule will make a conforming change to 1217.52c to reflect previously revised voting requirements in 1217.44. In a final rule published in the Federal Register on September 25, 2019 84 FR 50294, voting requirements prescribed in 1217.44 were revised to specify that recommendations to change the assessment rate require affirmation by at least a majority of Board members plus two exclusive of vacant seats.
Currently, corresponding language in 1217.52c specifies that an affirmative vote of at least two-thirds of Board members is required for assessment rate recommendations. A conforming change in this rule will revise 1217.52c to require affirmation of assessment rate recommendations by a Board majority plus two, thus harmonizing the language in the two sections related to assessment recommendations.
Board Recommendation The Board met on November 20, 2019, and recommended increasing its assessment rate from $0.35 to $0.41 per mbf. The additional funds will enable the Board to maintain its existing programs, while supporting new
programs that will help maintain and expand markets for softwood lumber.
For the 20162018 fiscal years, the Board has used reserve funds to bridge the deficit between income and expenses. In 2019, the Board kept expenditures in line with income and had to make cuts to its programs, primarily its communications program.
The Board discussed the deficit spending that occurred from 20162018
and the funding cuts in 2019, along with the impacts of inflation, and determined that without the increase it would not be able to maintain its current programs nor be able to address gaps that limit the Boards ability to expand the market for softwood lumber. Continuing at the current funding level would limit its ability to capitalize on new opportunities or address challenges and maintain the impact the Board has achieved for the softwood lumber industry in prior years. Additionally, the current funding level restricts the ability to accelerate softwood lumbers increase in market share and lumber usage in the non-residential sector.
The Boards funding of research on wood standards has facilitated interest in using wood-based building systems in non-traditional markets, such as tall wood building. The 2021 International Code Council building standards will recognize the construction of mass timber buildings up to 18 stories in height. These new opportunities require a more comprehensive approach, particularly in outreach and education initiatives. The Board recognized that its funded programs must go beyond inspiring professionals to think about building with wood. These individuals need resources and technical assistance.
The Board estimated the increased assessment rate of $0.41 per mbf would generate additional revenues as shown in Table 1. The consumption forecast and assessable board feet figures are shown in billion board feet bbf.

The additional funds will support programs targeting contractors and
developers to address installer training and skills development; establish an
education program that will target architecture and engineering students,
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