[Federal Register Volume 75, Number 200 (Monday, October 18, 2010)]
[Rules and Regulations]
[Pages 63695-63703]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-26122]
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Rules and Regulations
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Federal Register / Vol. 75, No. 200 / Monday, October 18, 2010 /
Rules and Regulations
[[Page 63695]]
DEPARTMENT OF AGRICULTURE
Office of Energy Policy and New Uses
7 CFR Part 2902
RIN 0503-AA34
Designation of Biobased Items for Federal Procurement
AGENCY: Departmental Management, USDA.
ACTION: Final rule.
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SUMMARY: The United States Department of Agriculture (USDA) is amending
the Guidelines for Designating Biobased Products for Federal
Procurement, to add eight sections to designate items within which
biobased products will be afforded Federal procurement preference, as
provided for under section 9002 of the Farm Security and Rural
Investment Act of 2002, as amended by the Food, Conservation, and
Energy Act of 2008 (referred to in this document as ``section 9002'').
USDA is also establishing minimum biobased contents for each of these
items.
DATES: This rule is effective November 17, 2010.
FOR FURTHER INFORMATION CONTACT: Ron Buckhalt, USDA, Office of
Procurement and Property Management, Room 361, Reporters Building, 300
7th St., SW., Washington, DC 20024; e-mail: [email protected];
phone (202) 205-4008. Information regarding the preferred procurement
program (one part of the BioPreferred 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. Summary of Changes
IV. Discussion of Public Comments
V. Regulatory Information
A. Executive Order 12866: 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
K. Congressional Review Act
I. Authority
These items are designated under the authority of section 9002 of
the Farm Security and Rural Investment Act of 2002 (FSRIA), as amended
by the Food, Conservation, and Energy Act of 2008 (FCEA), 7 U.S.C. 8102
(referred to in this document as ``section 9002'').
II. Background
As part of the BioPreferred Program, USDA published, on February
10, 2010, a proposed rule in the Federal Register (FR) for the purpose
of designating a total of nine items for the preferred procurement of
biobased products by Federal agencies (referred to hereafter in this FR
notice as the ``preferred procurement program''). This proposed rule
can be found at 75 FR 6795. This rulemaking is referred to in this
preamble as Round 6 (RIN 0503-AA34).
In the proposed rule, USDA proposed designating the following nine
items for the preferred procurement program: Disposable tableware;
expanded polystyrene foam recycling products; heat transfer fluids; ink
removers and cleaners; mulch and compost materials; multipurpose
lubricants; office paper; topical pain relief products; and turbine
drip oils.
Today's final rule designates the proposed items (with the
exception of office paper) within which biobased products will be
afforded Federal procurement preference. USDA has determined that each
of the items being designated under today's rulemaking meets the
necessary statutory requirements; that they are being produced with
biobased products; and that their procurement will carry out the
following objectives of section 9002: To improve demand for biobased
products; to spur development of the industrial base through value-
added agricultural processing and manufacturing in rural communities;
and to enhance the Nation's energy security by substituting biobased
products for products derived from imported oil and natural gas.
When USDA designates by rulemaking an item (a generic grouping of
products) for preferred procurement under the BioPreferred Program,
manufacturers of all products under the umbrella of that item, that
meet the requirements to qualify for preferred procurement, can claim
that status for their products. To qualify for preferred procurement, a
product must be within a designated item and must contain at least the
minimum biobased content established for the designated item. When the
designation of specific items is finalized, USDA will invite the
manufacturers and vendors of these qualifying products to post
information on the product, contacts, and performance testing on its
BioPreferred Web site, http://www.biopreferred.gov. Procuring agencies
will be able to utilize this Web site as one tool to determine the
availability of qualifying biobased products under a designated item.
Once USDA designates an item, procuring agencies are required generally
to purchase biobased products within these designated items where the
purchase price of the procurement item exceeds $10,000 or where the
quantity of such items or of functionally equivalent items purchased
over the preceding fiscal year equaled $10,000 or more.
Subcategorization. Most of the items USDA is considering for
designation for preferred procurement cover a wide range of products.
For some items, there are subgroups of products within the item that
meet different market requirements, uses and/or different performance
specifications. Where such subgroups exist, USDA intends to create
subcategories within the designated items.
During the development of the proposal, USDA considered the
appropriateness of creating subcategories with the disposable tableware
and the ink removers and cleaners items. At that time, however, USDA
did not have sufficient information to justify creating subcategories
within these items. In the
[[Page 63696]]
proposed rule, USDA requested additional information on the possibility
of subcategorizing these two items. USDA did not receive any additional
information on these items during the public comment period that could
be used to support the creation of subcategories at this time. Thus,
none of the items being designated today have subcategories. USDA will
continue to consider additional information that may become available
to support subcategorization of these items in the future.
Overlap with the Environmental Protection Agency (EPA)
Comprehensive Procurement Guideline (CPG) program for recovered content
products under the Resource Conservation and Recovery Act (RCRA)
section 6002. Some of the products that are biobased items, designated
for preferred procurement under the preferred procurement program, may
also be products EPA has designated under the CPG for products
containing recovered materials. Where that occurs, an EPA-designated
recovered content product (also known as a ``recycled content product''
or ``EPA-designated product'') has priority in Federal procurement over
the qualifying biobased product as identified in 7 CFR 2902.2. In
situations where it believes there may be an overlap, USDA is asking
manufacturers of qualifying biobased products to provide additional
product and performance information to Federal agencies to assist them
in determining whether the biobased products in question are, or are
not, the same products for the same uses as the recovered content
products. As this information becomes available, USDA will place it on
the BioPreferred Web site with its catalog of qualifying biobased
products.
In cases where USDA believes an overlap with EPA-designated
recovered content products may occur, manufacturers are being asked to
indicate the various suggested uses of their product and the
performance standards against which a particular product has been
tested. In addition, depending on the type of biobased product,
manufacturers are being asked to provide other types of information,
such as whether the product contains petroleum-based components and
whether the product contains recovered materials. Federal agencies may
also ask manufacturers for information on a product's biobased content
and its profile against environmental and health measures and life-
cycle costs (such as the Building for Environmental and Economic
Sustainability (BEES) analysis or ASTM Standard D7075 for evaluating
and reporting on environmental performance of biobased products). Such
information will permit agencies to determine whether or not an overlap
occurs.
Section 6002 of the RCRA requires a procuring agency purchasing an
item designated by EPA generally to purchase such an item composed of
the highest percentage of recovered materials content practicable.
However, a procuring agency may decide not to purchase such an item
based on a determination that the item fails to meet the reasonable
performance standards or specifications of the procuring agency. An
item with recovered materials content may not meet reasonable
performance standards or specifications, for example, if the use of the
item with recovered materials content would jeopardize the intended end
use of the item.
Where a biobased item is used for the same purposes and to meet the
same Federal agency performance requirements as an EPA-designated
recovered content product, the Federal agency must purchase the
recovered content product. For example, if a biobased hydraulic fluid
is to be used as a fluid in hydraulic systems and because ``lubricating
oils containing re-refined oil'' has already been designated by EPA for
that purpose, then the Federal agency must purchase the EPA-designated
recovered content product, ``lubricating oils containing re-refined
oil.'' If, on the other hand, that biobased hydraulic fluid is to be
used to address a Federal agency's certain environmental or health
performance requirements that the EPA-designated recovered content
product would not meet, then the biobased product should be given
preference, subject to price, availability, and performance
considerations.
This final rule designates two items for preferred procurement for
which there may also be an EPA-designated recovered content product.
The first item is mulch and compost materials, which are also EPA-
designated recovered content products ``hydraulic mulch products'' and
``compost materials'' under the ``landscaping products'' category of
products. The second item is multipurpose lubricants, which, depending
on how they are used, may be an EPA-designated recovered content
product ``re-refined lubricating oils.'' EPA provides recovered
materials content recommendations for these recovered content products
in Recovered Materials Advisory Notice (RMAN) I. The RMAN
recommendations for these CPG products can be found by accessing EPA's
Web site http://www.epagov/epaoswer/non-hw/procure/products.htm and
then clicking on the appropriate product name.
Minimum Biobased Contents. The minimum biobased contents being
established with today's rulemaking are based on products for which
USDA has biobased content test data. In addition to considering the
biobased content test data for each item, USDA also considers other
factors when establishing the minimum biobased content. These other
factors include: Public comments received on the proposed minimum
biobased contents; product performance information to justify the
inclusion of products at lower levels of biobased content; and the
range, groupings, and breaks in the biobased content test data array.
Consideration of this information allows USDA to establish minimum
biobased contents on a broad set of factors to assist the Federal
procurement community in its decision to purchase biobased products.
USDA makes every effort to obtain biobased content test data on
multiple products within each item. For most designated items, USDA has
biobased content test data on more than one product within a designated
item. However, USDA must rely on biobased product manufacturers to
voluntarily submit product information and, in some cases, USDA has
been able to obtain biobased content data for only a single product
within a designated item. As USDA obtains additional data on the
biobased contents for products within these eight designated items,
USDA will evaluate whether the minimum biobased content for a
designated item will be revised.
USDA anticipates that the minimum biobased content of an item that
is based on a single product is more likely to change as additional
products in those items are identified and tested. In today's final
rule, the minimum biobased contents for one of the designated items
(``expanded polystyrene foam recycling products'') is based on a single
tested product. Given that only two biobased products have been
identified in this item, and only one manufacturer supplied a sample
for testing, USDA believes it is reasonable to set a minimum biobased
content for this item based on the single data point.
For all items where additional information indicates that it is
appropriate to revise a minimum biobased content established under
today's rulemaking, USDA will propose the change in a notice in the
Federal Register to allow public comment on the proposed revised
minimum biobased content. USDA will then
[[Page 63697]]
consider the public comments and issue a final rulemaking on the
minimum biobased content.
Future Designations. In making future designations, USDA will
continue to conduct market searches to identify manufacturers of
biobased products within items. USDA will then contact the identified
manufacturers to solicit samples of their products for voluntary
submission for biobased content testing or for the BEES analytical
tool. Based on these results, USDA will then propose new items for
designation for preferred procurement.
USDA plans to identify approximately 10-15 items in each future
rulemaking. USDA has developed a preliminary list of items for future
designation. This list is available on the BioPreferred Web site. While
this list presents an initial prioritization of items for designation,
USDA cannot identify with certainty which items will be presented in
each of the future rulemakings. In response to comments from other
Federal agencies, USDA intends to give increased priority to those
items that contain the highest biobased content. In addition, as the
program matures, manufacturers of biobased products within some
industry segments have become more responsive to USDA's requests for
technical information than those in other segments. Thus, items with
high biobased content and for which sufficient technical information
can be obtained quickly may be added or moved up on the prioritization
list. USDA intends to update the list of items for future designation
on the BioPreferred Web site every six months, or more often if
significant changes are made to the list.
Exemptions. In earlier item designation rules, USDA created
exemptions from the preferred procurement program's requirements for
procurements involving combat or combat-related missions and for
spacecraft systems and launch support equipment. Since publication of
those final rules in the Federal Register, and in response to comments
from the Department of Defense (DoD), USDA has decided to create
``blanket'' exemptions for all items used in products or systems
designed or procured for combat or combat-related missions, which will
apply to all items designated for the procurement preference. These
``blanket'' exemptions can be found in subpart A of part 2902. Because
these blanket exemptions are included in subpart A of part 2902, it is
unnecessary to repeat them in the individual item designations in this
final rule.
III. Summary of Changes
As a result of the comments received on the proposed rule (see
section IV), USDA has made two substantive changes to the rule. The
proposed ``office paper'' item has been withdrawn from the group of
items being designated for preferred procurement in today's final
rulemaking. USDA has decided that the issues raised by the commenters
regarding the designation of this item justify the withdrawal of the
item from this rulemaking. In addition, USDA has revised the definition
of the disposable tableware item to clarify that the item refers to
tableware that is made of, or coated with, plastic resin.
IV. Discussion of Public Comments
USDA solicited comments on the proposed rule for 60 days ending on
April 12, 2010. USDA received comments from five commenters by that
date. The comments were from an industry trade organization, three
manufacturers, and one individual.
The five commenters submitted comments regarding the designation
process in general and comments specific to the designation of
disposable tableware and office paper. The three individual
manufacturers also endorsed the comments submitted by the industry
association.
In the remainder of this section, USDA first addresses two general
comments that relate to the overall designation process. All of the
specific comments related to the proposed designation of office paper
and disposable tableware are presented next, followed by USDA's
response to those comments.
General Comments
Comment: One commenter stated that the process to determine what
products are eligible is not transparent. Product category
consideration appears to be at the request of the manufacturer, as is
consideration of specific products. There is no announcement when a
manufacturer has submitted a request for consideration of their product
as BioPreferred to enable other manufacturers the opportunity to submit
data. How USDA makes a determination that a product warrants evaluation
as a BioPreferred product is also not clear.
Response: USDA disagrees with the commenter's statement that
consideration of items for designation in the BioPreferred Program is
based on requests from the manufacturers of certain items. As discussed
in the preamble to the proposed rule (75 FR 6801 and 6802), USDA uses a
model to identify and prioritize items for designation. Through this
model, USDA has identified over 100 items for potential designation
under the preferred procurement program. A list of these items and
information on the model can be accessed on the BioPreferred Web site
at http://www.biopreferred.gov. USDA has conducted extensive market
research to identify manufacturers of biobased products and has
requested product information from manufacturers as they have been
identified. While the willingness of manufacturers to provide product
information and samples for testing has been, and will continue to be,
a factor in setting the priority for designating items, it is not the
only consideration. The cost, performance, availability, and size of
the market all play a role in selecting items for designation.
Comment: One commenter stated that USDA has apparently used the
BEES analysis tool to meet at least part of its environmental
information responsibilities. The BEES tool is designed to evaluate
environmental and economic performance data for building products and
does not represent best practices for evaluating paper products. Life
cycle analysis (LCA) practitioners familiar with paper manufacturing
have identified the BEES methodology as imprecise when applied to paper
products. The commenter stated that results from the recent peer
reviewed LCA study, performed at their request, indicate, for instance,
that the carbon footprint of printing and writing papers is less than
that indicated for the carton of ``office paper'' evaluated through the
BEES analysis. Furthermore, the size of the database on which the BEES
analysis was conducted renders the results meaningless in view of the
size of the entire paper products marketplace. The commenter stated
that care must be taken if USDA plans to use the BEES results in any
meaningful manner.
Response: The commenter is correct that USDA has used the BEES
analytical tool to analyze a sample of individual products within each
designated item. The BEES tool has been used to measure environmental
and economic performance of designated items since the inception of the
BioPreferred Program. USDA acknowledges that there is a wide range of
opinion regarding the value of the BEES analysis and is currently
considering the role of the analysis in the BioPreferred Program.
In the preamble to the proposed rule (75 FR 6801), USDA stated
that, in addition to the BEES analytical tool, manufacturers wishing to
make similar
[[Page 63698]]
life-cycle information available may choose to use the ASTM Standard
D7075 analysis. The ASTM Standard D7075 product analysis includes
information on environmental performance, human health impacts, and
economic performance. USDA is working with manufacturers and vendors to
make this information available on the BioPreferred Web site in order
to make the preferred procurement program more efficient.
Office Paper and Disposable Tableware
Comments: One commenter stated that when USDA chooses to evaluate a
product category such as office paper or disposable tableware that has
always been biobased, it is highly misleading and arbitrary to provide
the USDA BioPreferred imprimatur to only those ``new'' products in the
category that use different biobased raw materials. The commenter feels
this implies that there is an inherent ``good'' in the alternatives not
found in wood-based papers, which the USDA has not demonstrated and LCA
does not support. The commenter stated that there is no suggestion in
the legislative history of either the 2002 or 2008 Farm Bills that
Congress intended any dislocation of existing biobased products. The
commenter believes it is reasonable to conclude that by including the
BioPreferred Program in the Energy Title in both statutes, Congress
intended to encourage ``new'' biobased products as a replacement for
fossil fuel-based products, not to displace or substitute for existing
biobased products.
One commenter believes that USDA has ignored the evolution of the
forest products industry since 1972 when applying the ``mature market''
definition to these products. The commenter states that USDA must
consider how the significant changes made in fiber procurement and
manufacturing technologies have resulted in different products than
those produced in 1972. Increased environmental regulation has caused
significant changes to paper to incorporate more recycled content,
radically alter bleaching methods and chemicals, and facilitate high-
speed printing, new inks (ink jet, toner, etc.) and other innovations.
The way the wood-fiber is grown and harvested has also experienced
substantial improvement over the past 40 years. The commenter believes
USDA must take these developments into consideration in evaluating
whether today's wood-based office papers and tableware are the same as
those that had ``mature markets'' in 1972.
One commenter stressed the need to collect and analyze further
information about the differentiation of these existing products as
they were in the 1970s and in 2010. This is necessary to better
understand USDA's interpretation of the term ``mature'' apparently
attached to these existing products. The commenter believes that
products in a constant process of improvement via innovation should not
be considered mature. For example, the average rotation age and
composition of the wood fiber in these products have changed towards a
more sustainable configuration in the last four decades.
One commenter stated that today's wood-based office papers and
disposable tableware meet and further the minimum biobased content
requirements. In addition, they meet all of the goals of the
BioPreferred Program: Improving demand for biobased products (wood-
based paper utilizes vast amounts of biobased ingredients), stimulating
economic growth in rural areas (paper manufacturing facilities are
typically located in rural areas close to the raw material and are the
economic foundation of their communities), and enhancing the Nation's
energy security (over 60 percent of the energy used to manufacture
wood-based office papers in the United States comes from renewable,
carbon neutral biomass).
One commenter stated that Section 9002(a)(3)(B)(v), 7 U.S.C.
8102(a)(3)(B)(v), directs the Secretary to ``provide information as to
* * * the environmental and public health benefits of such [biobased]
materials and items.'' USDA has not considered whether the alternative
fibers used to manufacture the alternative office papers and tableware
are sustainably grown and managed. Credible sustainable forest
management programs have assured the continuous improvement of forest
management to provide for healthy forests in the years to come. In
accepting alternative fiber papers into the BioPreferred Program, the
commenter states USDA must make sure that it does not skew the market
to such a degree that it would alter sustainable land use decisions.
The commenter stated that a classic example has been in the
renewable energy field when the subsidies for corn-based ethanol led to
additional rain forest destruction. The commenter further stated that
because more corn was being grown in the U.S. for renewable fuel, it
opened the market for non-U.S. grown soybeans which led farmers in
South America to clear rain forests for agricultural lands.
The commenter states that if USDA considered sustainable management
of paper fibers (whether wood or alternative) through a credible
sustainable fiber management program, some degree of confidence could
be drawn that there will not be the unintended consequence of forest
lands being cleared to grow kenaf, for instance.
One commenter stated that office papers designated as BioPreferred
are intended for the same uses, meet the same performance requirements,
and overlap with the EPA's CPG program for recovered content products
under the RCRA Section 6002. The CPG requirements apparently take
precedence over the BioPreferred program; therefore, Federal agencies
must purchase the recovered content product, making the BioPreferred
designation superfluous for Federal procurement of these products.
One commenter stated that the definition of office paper--``paper
products used in office printer and copier applications, writing, and
coated papers for publications''--misapplies the term ``coated
publication papers.'' Coated publication papers are those typically
used in magazines and catalogs, not office machines. USDA needs to
clarify what it intends by this definition. The commenter's preferred
definition is: ``Office papers: Uncoated and coated paper products used
in office printer and copier applications, and writing papers.''
One commenter stated that the performance standard identified for
office papers--JCP A230-High Yield Coated Opaque Offset--may be
appropriate for the sample paper evaluated for the proposal; however,
it represents only a small minority of the type of papers used in
office machines. The U.S. Government's Joint Committee on Printing
Paper Specifications includes a wide variety of standards for the
specific type of paper needed. For instance, O-65(A) is the appropriate
standard for Plain Copier Xerographic paper. Therefore, USDA should
refer to the accurate paper performance specification depending on the
specific paper required.
One commenter stated that wood-based products have very strong
positive environmental attributes. The commenter stated that by
proposing to endorse agricultural-based fiber over wood fiber, USDA
will send an economic signal to forest landowners to grow more
agriculture-based crops instead of trees. USDA has always favored more
forest lands, not less, and this would be counter to that position. The
commenter has completed an LCA of the Equal Offset grade, which fits
the A230 designation, and found that when considering environmental
impact, this paper is the best option as it uses less
[[Page 63699]]
water, wood fiber and GHG than A60 (uncoated freesheet).
One commenter stated that it is not beneficial to Americans to
apply our country's finite technical, natural, and financial resources
to replace an already existing biobased product like wood-based paper
with paper made from hemp, kenaf, sugar cane, flax, cotton, and/or
bamboo.
Three commenters suggested USDA delay its decision regarding
inclusion of office papers and disposable tableware as designated items
within the BioPreferred Program to allow in-depth consideration of the
issues between USDA and representatives of the affected products. These
issues also include other technical, specification and statutory issues
that could be advanced prior to and during the review process.
Response: USDA considered the comments related to the proposed
designation of office paper and disposable tableware and agrees with
many of the points made by the commenters. USDA agrees with the
commenters that several technical and policy issues need to be
considered and resolved before the designation of the office paper item
is finalized. USDA is, therefore, withdrawing the office paper item
from the designations being finalized in today's rulemaking. USDA
responses to specific issues raised by the commenters are presented in
the following paragraphs.
USDA agrees that it is not the intent of the BioPreferred Program
to replace a traditional biobased product with another ``emerging''
biobased product that performs the same function. USDA's intent in
proposing to designate office paper was to encourage the development
and use of office paper produced from fast-growing, sustainable fibers.
USDA agrees with the commenters, however, that implementing the
designation as proposed could result in the unintended replacement of
paper produced exclusively from sustainably-grown forest products.
Because of the comments that were received, USDA believes that more
precise definitions and additional clarification are needed for the
product category.
With regard to the commenter's concerns about the ``mature market''
issue, USDA acknowledges that the question of whether a product should
be considered a mature market product is not always simply a matter of
whether the product had a significant market share in 1972. In some
cases the market share held by a biobased product in 1972 may have been
taken over by petroleum-based synthetic products during the 1980s or
1990s and the biobased alternative may truly be ``emerging'' again now.
In other cases, significant feedstock and process changes have resulted
in products that are very different from the products marketed in 1972.
USDA agrees that, in the case of the proposed ``office paper'' item,
more investigation is needed to adequately address the issue of whether
today's products should be considered mature market products.
Commenters pointed out that the office paper category overlaps with
an EPA recovered content product and stated that there would be no
benefit in designating it under the BioPreferred program. USDA
acknowledges that for some products (including this one) the priority
given to recovered content products reduces the benefits that would
otherwise be attributed to the BioPreferred program. USDA does not
believe, however, that the CPG program eliminates the need to designate
items for the BioPreferred program. As discussed at proposal, there is
a wide range of performance requirements, such as biodegradability or
compostability, that factor into purchasing decisions. USDA believes
there are potential benefits to designating product categories in which
qualified biobased products are found even though the product
categories are covered by the CPG program.
Commenters also stated that USDA did not adequately analyze
sustainability of the current methods of producing office paper from
forestry products. USDA acknowledges that information on sustainability
within the forestry and paper production industry was not investigated
prior to proposing the item for designation. USDA agrees that
consideration of such information would be beneficial and will work
with industry stakeholders to obtain and evaluate such information.
Commenters also stated that there are numerous test methods and
performance specifications that apply to office paper other than the
one listed in the proposal preamble. USDA will communicate with
stakeholders to gather a more complete list of applicable performance
standards and test methods.
Based on the comments received, USDA has decided that designating
the office paper item as proposed has the potential to create much
confusion among Federal purchasing agents. A single designated item for
office paper would be very broad and would include paper designed to
serve a wide variety of common and specialty functions. There is also a
wide range of performance requirements that would have to be addressed
in such a broad item. USDA will continue to consider the issues raised
by the commenters, will work with the commenters and other industry
stakeholders to resolve the issues, and plans to designate the item at
a later date.
With regard to the designation of the disposable tableware item,
USDA has clarified its intent that products within the item are those
that are made of plastic or that have a plastic coating. The intent of
designating this item is to encourage the use of disposable tableware
made from, or coated with, resins derived from renewable biomass rather
than petroleum-based resins. Thus, USDA believes that the designation
of this item is appropriate and has clarified in the final rule that
the item is defined as ``Products made from, or coated with, plastic
resins and used in dining, such as drink ware and dishware, including
but not limited to cups, plates, bowls, and serving platters, and that
are designed for one-time use. This item does not include disposable
cutlery, which is a separate item.''
Today's action finalizes the designation of eight items within
which biobased products will be afforded Federal procurement
preference. USDA encourages manufacturers, vendors, and purchasers of
biobased products within these eight designated items to continue to
submit information relative to products available within these items.
If sufficient supporting information becomes available, USDA will
consider amending today's rulemaking by creating subcategories within
the items, raising (or lowering) the minimum biobased content, or other
appropriate actions.
V. Regulatory Information
A. Executive Order 12866: Regulatory Planning and Review
This action has been determined significant for purposes of
Executive Order 12866 and, therefore, has been reviewed by the Office
of Management and Budget. We are not able to quantify the annual
economic effect associated with this final rule. As discussed in the
proposed rule, USDA made extensive efforts to obtain information on the
Federal agencies' usage within the eight designated items. These
efforts were largely unsuccessful. Therefore attempts to quantify the
economic impact of this rule would require estimation of the
anticipated market penetration of biobased products based upon many
assumptions. In addition, because agencies have the option of not
purchasing designated items if costs are ``unreasonable,'' the product
is not
[[Page 63700]]
readily available, or the product does not demonstrate necessary
performance characteristics, certain assumptions may not be valid.
While facing these quantitative challenges, USDA relied upon a
qualitative assessment to determine the impacts of this rulemaking.
This assessment was based primarily on the offsetting nature of the
program (an increase in biobased products purchased with a
corresponding decrease in petroleum products purchased). Consideration
was also given to the fact that agencies may choose not procure
designated items due to unreasonable costs.
1. Summary of Impacts
This rulemaking is expected to have both positive and negative
impacts to individual businesses, including small businesses. USDA
anticipates that the biobased preferred procurement program will
provide additional opportunities for businesses and manufacturers to
begin supplying products under the designated biobased items to Federal
agencies and their contractors. However, other businesses and
manufacturers that supply only non-qualifying products and do not offer
biobased alternatives may experience a decrease in demand from Federal
agencies and their contractors. USDA is unable to determine the number
of businesses, including small businesses that may be adversely
affected by this rule. The rule, however, will not affect existing
purchase orders, nor will it preclude businesses from modifying their
product lines to meet new requirements for designated biobased
products. Because the extent to which procuring agencies will find the
performance and costs of biobased products acceptable is unknown, it is
impossible to quantify the actual economic effect of the rule.
2. Benefits of the Rule
The designation of these eight items provides the benefits outlined
in the objectives of section 9002: To increase domestic demand for many
agricultural commodities that can serve as feedstocks for production of
biobased products; to spur development of the industrial base through
value-added agricultural processing and manufacturing in rural
communities; and to enhance the Nation's energy security by
substituting biobased products for products derived from imported oil
and natural gas. On a national and regional level, this rule can result
in expanding and strengthening markets for biobased materials used in
these items.
3. Costs of the Rule
Like the benefits, the costs of this rule have not been quantified.
Two types of costs are involved: Costs to producers of products that
will compete with the preferred products, and costs to Federal agencies
to provide procurement preference for the preferred products. Producers
of competing products may face a decrease in demand for their products
to the extent Federal agencies refrain from purchasing their products.
However, it is not known to what extent this may occur. Procurement
costs for Federal agencies may rise as they evaluate the availability
and relative cost of preferred products before making a purchase.
B. Regulatory Flexibility Act (RFA)
When an agency issues a final rule following a proposed rule, the
Regulatory Flexibility Act (RFA, 5 U.S.C. 601-612) requires the agency
to prepare a final regulatory flexibility analysis (5 U.S.C. 604).
However, the requirement for a final regulatory flexibility analysis
does not apply if the head of the agency certifies that the rule will
not, if promulgated, have a significant economic impact on a
substantial number of small entities (5 U.S.C. 605(b)).
USDA evaluated the potential impacts of its designation of these
items to determine whether its actions would have a significant impact
on a substantial number of small entities. Because the preferred
procurement program established under section 9002 applies only to
Federal agencies and their contractors, small governmental (city,
county, etc.) agencies are not affected. Thus, this rule will not have
a significant economic impact on small governmental jurisdictions.
USDA anticipates that this program will benefit entities, both
large and small, that manufacture or sell biobased products. For
example, the designation of items for preferred procurement will
provide additional opportunities for businesses to manufacture and sell
biobased products to Federal agencies and their contractors. Similar
opportunities will be provided for entities that supply biobased
materials to manufacturers. The intent of section 9002 is largely to
stimulate the production of new biobased products and to energize
emerging markets for those products. Because the program is still in
its infancy, however, it is unknown how many businesses will ultimately
be affected. While USDA has no data on the number of small businesses
that may choose to develop and market biobased products within the
items designated by this rulemaking, the number is expected to be
small. Because biobased products represent a small emerging market,
only a small percentage of all manufacturers, large or small, are
expected to develop and market biobased products. Thus, the number of
small businesses manufacturing biobased products affected by this
rulemaking is not expected to be substantial.
The preferred procurement program may decrease opportunities for
businesses that manufacture or sell non-biobased products or provide
components for the manufacturing of such products. Most manufacturers
of non-biobased products within the items being designated for
preferred procurement in this rule are expected to be included under
the following NAICS codes: 324191 (petroleum lubricating oil and grease
manufacturing), 325211 (plastics materials and resin manufacturing),
325411 (medicinal and botanical manufacturing), 325612 (polish and
other sanitation goods manufacturing), 325998 (other miscellaneous
chemical products and preparation manufacturing), and 326150 (urethane
and other foam product manufacturing). USDA obtained information on
these six NAICS categories from the U.S. Census Bureau's Economic
Census database. USDA found that the Economic Census reports about
3,513 companies within these six NAICS categories and that these
companies own a total of about 4,271 establishments. Thus, the average
number of establishments per company is about 1.2. The Census data also
reported that of the 4,271 individual establishments, about 4,260 (99.7
percent) have less than 500 employees.
USDA also found that the overall average number of employees per
company among these industries is about 55, with the plastics materials
and resins segment reporting the highest average (about 90 employees
per company). Thus, nearly all of the businesses fall within the Small
Business Administration's definition of a small business (less than 500
employees, in most NAICS categories).
USDA does not have data on the potential adverse impacts on
manufacturers of non-biobased products within the items being
designated, but believes that the impact will not be significant. Most
of the items being designated in this rulemaking are typical consumer
products widely used by the general public and by industrial/commercial
establishments that are not subject to this rulemaking. Thus, USDA
believes that the number of small businesses manufacturing non-biobased
[[Page 63701]]
products within the items being designated and selling significant
quantities of those products to government agencies affected by this
rulemaking to be relatively low. Also, this rule will not affect
existing purchase orders and it will not preclude procuring agencies
from continuing to purchase non-biobased items when biobased items do
not meet the availability, performance, or reasonable price criteria.
This rule will also not preclude businesses from modifying their
product lines to meet new specifications or solicitation requirements
for these products containing biobased materials.
After considering the economic impacts of this rule on small
entities, USDA certifies that this action will not have a significant
economic impact on a substantial number of small entities.
While not a factor relevant to determining whether the rule will
have a significant impact for RFA purposes, USDA has concluded that the
effect of the rule will be to provide positive opportunities to
businesses engaged in the manufacture of these biobased products.
Purchase and use of these biobased products by procuring agencies
increase demand for these products and result in private sector
development of new technologies, creating business and employment
opportunities that enhance local, regional, and national economies.
C. Executive Order 12630: Governmental Actions and Interference With
Constitutionally Protected Property Rights
This 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 rule has been reviewed in accordance with Executive Order
12988, Civil Justice Reform. This rule does not preempt State or local
laws, is not intended to have retroactive effect, and does not involve
administrative appeals.
E. Executive Order 13132: Federalism
This rule does not have sufficient federalism implications to
warrant the preparation of a Federalism Assessment. Provisions of this
rule will 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 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. Although
there is no statutory requirement to do so, we believe that, in the
long term, many state and local governments will implement similar
purchase programs based on the BioPreferred Program. USDA has been
charged by Congress to share information on the BioPreferred Program
with State and local governments.
H. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments
Today's rule does not significantly or uniquely affect one or more
Indian tribes, * * * the relationship between the Federal Government
and Indian tribes, or * * * the distribution of power and
responsibilities between the Federal Government and Indian tribes.''
Thus, no further action is required under Executive Order 13175.
I. Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
3501 through 3520), the information collection under this rule is
currently approved under OMB control number 0503-0011.
J. E-Government Act Compliance
The Office of Procurement and Property Management 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 they intend to offer for 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.
K. Congressional Review Act
The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement Fairness Act of 1996, generally
provides that before a rule may take effect, the agency promulgating
the rule must submit a rule report, that includes a copy of the rule,
to each House of the Congress and to the Comptroller General of the
United States. USDA has submitted a report containing this rule and
other required information to the U.S. Senate, the U.S. House of
Representatives, and the Comptroller General of the United States prior
to publication of the rule in the Federal Register.
List of Subjects in 7 CFR Part 2902
Biobased products, Procurement.
0
For the reasons stated in the preamble, the Department of Agriculture
is amending 7 CFR chapter XXIX as follows:
CHAPTER XXIX--OFFICE OF ENERGY
PART 2902--GUIDELINES FOR DESIGNATING BIOBASED PRODUCTS FOR FEDERAL
PROCUREMENT
0
1. The authority citation for part 2902 continues to read as follows:
Authority: 7 U.S.C. 8102.
0
2. Add Sec. Sec. 2902.52 through 2902.60 to subpart B to read as
follows:
Sec.
2902.52 Disposable tableware.
2902.53 Expanded polystyrene foam recycling products.
2902.54 Heat transfer fluids.
2902.55 Ink removers and cleaners.
2902.56 Mulch and compost materials.
2902.57 Multipurpose lubricants.
2902.58 [Reserved]
2902.59 Topical pain relief products.
2902.60 Turbine drip oils.
Sec. 2902.52 Disposable tableware.
(a) Definition. Products made from, or coated with, plastic resins
and used in dining, such as drink ware and dishware, including but not
limited to cups, plates, bowls, and serving platters, and that are
designed for one-time use. This item does not include disposable
cutlery, which is a separate item.
(b) Minimum biobased content. The preferred procurement product
must have a minimum biobased content of at least 72 percent, which
shall be based on the amount of qualifying biobased carbon in the
product as a percent of the weight (mass) of the total organic carbon
in the finished product.
[[Page 63702]]
(c) Preference compliance date. No later than October 18, 2011,
procuring agencies, in accordance with this part, will give a
procurement preference for qualifying biobased disposable tableware. By
that date, Federal agencies that have the responsibility for drafting
or reviewing specifications for items to be procured shall ensure that
the relevant specifications require the use of biobased disposable
tableware.
Sec. 2902.53 Expanded polystyrene (EPS) foam recycling products.
(a) Definition. Products formulated to dissolve EPS foam to reduce
the volume of recycled or discarded EPS items.
(b) Minimum biobased content. The preferred procurement product
must have a minimum biobased content of at least 90 percent, which
shall be based on the amount of qualifying biobased carbon in the
product as a percent of the weight (mass) of the total organic carbon
in the finished product.
(c) Preference compliance date. No later than October 18, 2011,
procuring agencies, in accordance with this part, will give a
procurement preference for qualifying biobased EPS foam recycling
products. By that date, Federal agencies that have the responsibility
for drafting or reviewing specifications for items to be procured shall
ensure that the relevant specifications require the use of biobased EPS
foam recycling products.
Sec. 2902.54 Heat transfer fluids.
(a) Definition. Products with high thermal capacities used to
facilitate the transfer of heat from one location to another, including
coolants or refrigerants for use in HVAC applications, internal
combustion engines, personal cooling devices, thermal energy storage,
or other heating or cooling closed-loops.
(b) Minimum biobased content. The preferred procurement product
must have a minimum biobased content of at least 89 percent, which
shall be based on the amount of qualifying biobased carbon in the
product as a percent of the weight (mass) of the total organic carbon
in the finished product.
(c) Preference compliance date. No later than October 18, 2011,
procuring agencies, in accordance with this part, will give a
procurement preference for qualifying biobased heat transfer fluids. By
that date, Federal agencies that have the responsibility for drafting
or reviewing specifications for items to be procured shall ensure that
the relevant specifications require the use of biobased heat transfer
fluids.
Sec. 2902.55 Ink removers and cleaners.
(a) Definition. Chemical products designed to remove ink, haze,
glaze, and other residual ink contaminants from the surfaces of
equipment, such as rollers, used in the textile and printing
industries.
(b) Minimum biobased content. The preferred procurement product
must have a minimum biobased content of at least 79 percent, which
shall be based on the amount of qualifying biobased carbon in the
product as a percent of the weight (mass) of the total organic carbon
in the finished product.
(c) Preference compliance date. No later than October 18, 2011,
procuring agencies, in accordance with this part, will give a
procurement preference for qualifying biobased ink removers and
cleaners. By that date, Federal agencies that have the responsibility
for drafting or reviewing specifications for items to be procured shall
ensure that the relevant specifications require the use of biobased ink
removers and cleaners.
Sec. 2902.56 Mulch and compost materials.
(a) Definition. Products designed to provide a protective covering
placed over the soil, primarily to keep down weeds and to improve the
appearance of landscaping. Compost is the aerobically decomposed
remnants of organic materials used in gardening and agriculture as a
soil amendment, and commercially by the landscaping and container
nursery industries.
(b) Minimum biobased content. The preferred procurement product
must have a minimum biobased content of at least 95 percent, which
shall be based on the amount of qualifying biobased carbon in the
product as a percent of the weight (mass) of the total organic carbon
in the finished product.
(c) Preference compliance date. No later than October 18, 2011,
procuring agencies, in accordance with this part, will give a
procurement preference for qualifying biobased mulch and compost
materials. By that date, Federal agencies that have the responsibility
for drafting or reviewing specifications for items to be procured shall
ensure that the relevant specifications require the use of biobased
mulch and compost materials.
(d) Determining overlap with an EPA-designated recovered content
product. Qualifying products within this item may overlap with the EPA-
designated recovered content product: Landscaping products--``compost''
and ``hydraulic mulch''. USDA is requesting that manufacturers of these
qualifying biobased products provide information on the USDA Web site
of qualifying biobased products about the intended uses of the product,
information on whether or not the product contains any recovered
material, in addition to biobased ingredients, and performance
standards against which the product has been tested. This information
will assist Federal agencies in determining whether or not a qualifying
biobased product overlaps with EPA-designated landscaping products and
which product should be afforded the preference in purchasing.
Note to paragraph (d): Biobased mulch and compost materials
within this designated item can compete with similar landscaping
products with recycled content. Under the Resource Conservation and
Recovery Act of 1976, section 6002, the U.S. Environmental
Protection Agency designated landscaping products containing
recovered materials as items for which Federal agencies must give
preference in their purchasing programs. The designation can be
found in the Comprehensive Procurement Guideline, 40 CFR 247.15.
Sec. 2902.57 Multipurpose lubricants.
(a) Definition. Products designed to provide lubrication under a
variety of conditions and in a variety of industrial settings to
prevent friction or rust. Greases, which are lubricants composed of
oils thickened to a semisolid or solid consistency using soaps,
polymers or other solids, or other thickeners, are not included in this
item. In addition, task-specific lubricants, such as chain and cable
lubricants and gear lubricants, are not included in this item.
(b) Minimum biobased content. The preferred procurement product
must have a minimum biobased content of at least 88 percent, which
shall be based on the amount of qualifying biobased carbon in the
product as a percent of the weight (mass) of the total organic carbon
in the finished product.
(c) Preference compliance date. No later than October 18, 2011,
procuring agencies, in accordance with this part, will give a
procurement preference for qualifying biobased multipurpose lubricants.
By that date, Federal agencies that have the responsibility for
drafting or reviewing specifications for items to be procured shall
ensure that the relevant specifications require the use of biobased
multipurpose lubricants.
(d) Determining overlap with an EPA-designated recovered content
product. Qualifying products within this item may overlap with the EPA-
designated recovered content product: Re-refined lubricating oils. USDA
is requesting that manufacturers of these qualifying biobased products
provide information on the BioPreferred Web site about the intended
uses of the product, information on whether or not the product contains
any recovered material, in addition to biobased ingredients, and
performance standards
[[Page 63703]]
against which the product has been tested. This information will assist
Federal agencies in determining whether or not a qualifying biobased
product overlaps with EPA-designated re-refined lubricating oils and
which product should be afforded the preference in purchasing.
Note to paragraph (d): Biobased multipurpose lubricant products
within this designated item can compete with similar multipurpose
lubricant products with recycled content. Under the Resource
Conservation and Recovery Act of 1976, section 6002, the U.S.
Environmental Protection Agency designated re-refined lubricating
oils containing recovered materials as items for which Federal
agencies must give preference in their purchasing programs. The
designation can be found in the Comprehensive Procurement Guideline,
40 CFR 247.11.
Sec. 2902.58 [Reserved]
Sec. 2902.59 Topical pain relief products.
(a) Definition. Products that can be balms, creams and other
topical treatments used for the relief of muscle, joint, headache, and
nerve pain, as well as sprains, bruises, swelling, and other aches.
(b) Minimum biobased content. The preferred procurement product
must have a minimum biobased content of at least 91 percent, which
shall be based on the amount of qualifying biobased carbon in the
product as a percent of the weight (mass) of the total organic carbon
in the finished product.
(c) Preference compliance date. No later than October 18, 2011,
procuring agencies, in accordance with this part, will give a
procurement preference for qualifying biobased topical pain relief
products. By that date, Federal agencies that have the responsibility
for drafting or reviewing specifications for items to be procured shall
ensure that the relevant specifications require the use of biobased
topical pain relief products.
Sec. 2902.60 Turbine drip oils.
(a) Definition. Products that are lubricants for use in drip
lubrication systems for water well line shaft bearings, water turbine
bearings for irrigation pumps, and other turbine bearing applications.
(b) Minimum biobased content. The preferred procurement product
must have a minimum biobased content of at least 87 percent, which
shall be based on the amount of qualifying biobased carbon in the
product as a percent of the weight (mass) of the total organic carbon
in the finished product.
(c) Preference compliance date. No later than October 18, 2011,
procuring agencies, in accordance with this part, will give a
procurement preference for qualifying biobased turbine drip oils. By
that date, Federal agencies that have the responsibility for drafting
or reviewing specifications for items to be procured shall ensure that
the relevant specifications require the use of biobased turbine drip
oils.
Dated: October 12, 2010.
Pearlie S. Reed,
Assistant Secretary for Administration, U.S. Department of Agriculture.
[FR Doc. 2010-26122 Filed 10-15-10; 8:45 am]
BILLING CODE 3410-93-P