83_FR_31973 83 FR 31841 - Designation of Product Categories for Federal Procurement

83 FR 31841 - Designation of Product Categories for Federal Procurement

DEPARTMENT OF AGRICULTURE
Office of Procurement and Property Management

Federal Register Volume 83, Issue 132 (July 10, 2018)

Page Range31841-31850
FR Document2018-14594

The U.S. Department of Agriculture (USDA) is amending the Guidelines for Designating Biobased Products for Federal Procurement to add 12 sections that designate product categories within which biobased products will be afforded Federal procurement preference by Federal agencies and their contractors.

Federal Register, Volume 83 Issue 132 (Tuesday, July 10, 2018)
[Federal Register Volume 83, Number 132 (Tuesday, July 10, 2018)]
[Rules and Regulations]
[Pages 31841-31850]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-14594]



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Rules and Regulations
                                                Federal Register
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Federal Register / Vol. 83, No. 132 / Tuesday, July 10, 2018 / Rules 
and Regulations

[[Page 31841]]



DEPARTMENT OF AGRICULTURE

Office of Procurement and Property Management

7 CFR Part 3201

RIN 0599-AA27


Designation of Product Categories for Federal Procurement

AGENCY: Office of Procurement and Property Management, USDA.

ACTION: Final rule.

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SUMMARY: The U.S. Department of Agriculture (USDA) is amending the 
Guidelines for Designating Biobased Products for Federal Procurement to 
add 12 sections that designate product categories within which biobased 
products will be afforded Federal procurement preference by Federal 
agencies and their contractors.

DATES: This rule is effective August 9, 2018.

FOR FURTHER INFORMATION CONTACT: Karen Zhang, USDA, Office of 
Procurement and Property Management, 1400 Independence Ave. SW, 
Washington, DC 20250; email: biopreferred_support@amecfw.com; phone 
(202) 401-4747. Information regarding the Federal 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. Discussion of Public Comments
IV. Summary of Changes
V. Regulatory Information
    A. Executive Order 12866: Regulatory Planning and Review and 
Executive Order 13563: Improving Regulation and Regulatory 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
    K. Congressional Review Act

I. Authority

    These product categories are designated 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

    As part of the BioPreferred Program, USDA published, on January 13, 
2017, a proposed rule in the Federal Register (FR) for the purpose of 
designating a total of 12 product categories 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 82 FR 4206. This rulemaking is 
referred to in this preamble as Round 11 (RIN 0599-AA24).
    The term ``product category'' is used as a generic term in the 
designation process to mean a grouping of specific products that 
perform a similar function. As originally finalized, the Guidelines 
included provisions for the designation of product categories that were 
composed of finished, consumer products such as mobile equipment 
hydraulic fluids, penetrating lubricants, or hand cleaners and 
sanitizers.
    The 2008 and 2014 Farm Bills directed USDA to expand the scope of 
the Guidelines to include the designation of product categories 
composed of intermediate ingredients and feedstock materials. 
Specifically, the 2008 Farm Bill stated that USDA shall ``designate 
those intermediate ingredients and feedstocks that are or can be used 
to produce items that will be subject'' to the Federal preferred 
procurement program. The term ``intermediate ingredient and feedstock'' 
is defined in the Farm Bill as ``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 are subsequently used to make a more 
complex compound or product.'' The term ``intermediates'' is used in 
the titles of the product categories being designated today to 
distinguish these categories from the finished, consumer products 
previously designated by USDA. Although the Federal government does not 
typically purchase large quantities of intermediate ingredients and 
feedstock materials, designating such materials represents a means to 
identify and include finished products made from such designated 
materials in the Federal preferred procurement program. In the proposed 
rule, USDA proposed designating the following 12 product categories for 
the preferred procurement program: Intermediates--Plastic Resins; 
Intermediates--Chemicals; Intermediates--Paint and Coating Components; 
Intermediates--Textile Processing Materials; Intermediates--Foams; 
Intermediates--Fibers and Fabrics; Intermediates--Lubricant Components; 
Intermediates--Binders; Intermediates--Cleaner Components; 
Intermediates--Personal Care Product Components; Intermediates--Oils, 
Fats, and Waxes; and Intermediates--Rubber Materials.
    This final rule designates the proposed product categories within 
which biobased products will be afforded Federal procurement 
preference. USDA has determined that each of the product categories 
being designated under this 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

[[Page 31842]]

biobased products for products derived from imported oil and natural 
gas.
    When USDA designates by rulemaking a product category for preferred 
procurement under the BioPreferred Program, manufacturers of all 
products under the umbrella of that product category 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 product category and must contain at least 
the minimum biobased content established for the designated product 
category. With the designation of these specific product categories, 
USDA invites the manufacturers and vendors of qualifying products to 
provide information on the product, contacts, and performance testing 
for posting on its BioPreferred website, http://www.biopreferred.gov. 
Procuring agencies will be able to utilize this website as one tool to 
determine the availability of qualifying biobased products under a 
designated product category. Once USDA designates a product category, 
procuring agencies are required generally to purchase biobased products 
within the designated product category where the purchase price of the 
procurement product exceeds $10,000 or where the quantity of such 
products or of functionally equivalent products purchased over the 
preceding fiscal year equaled $10,000 or more.
    Minimum Biobased Contents. The minimum biobased contents being 
established with this rulemaking are based on products for which USDA 
has biobased content test data. USDA obtains biobased content data in 
conjunction with product manufacturer's applications for certification 
to use the USDA Certified Biobased Product label. Products that are 
certified to display the label must undergo biobased content testing by 
an independent, third party testing lab using ASTM D6866, ``Standard 
Test Methods for Determining the Biobased Content of Solid, Liquid, and 
Gaseous Samples Using Radiocarbon Analysis''. These test data become 
part of the BioPreferred Program database and their use in setting the 
minimum biobased content for designated product categories results in a 
more efficient process for both the Program and manufacturers of 
products within the product categories.
    Overlap with EPA's Comprehensive Procurement Guideline program for 
recovered content products under the Resource Conservation and Recovery 
Act (RCRA) Section 6002. Some of the products that are within biobased 
product categories designated for Federal preferred procurement under 
this program may also be within categories the Environmental Protection 
Agency (EPA) has designated under the EPA's Comprehensive Procurement 
Guideline (CPG) for products containing recovered (or recycled) 
materials. Because this rule designates intermediate ingredient product 
categories rather than categories of finished, consumer-use products, 
USDA does not believe that there is a direct overlap between these 
categories and CPG categories. However, if such an overlap situation is 
discovered, USDA is asking manufacturers of qualifying biobased 
products to make additional product and performance information 
available to Federal agencies conducting market research 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.
    Federal Government Purchase of Sustainable Products. The Federal 
government's sustainable purchasing program includes the following 
three mandatory preference programs for designated products: the 
BioPreferred Program, the EPA's Comprehensive Procurement Guideline for 
products containing recovered materials, and the Environmentally 
Preferable Purchasing program.
    Other Preferred Procurement Programs. Federal procurement officials 
should also note that many biobased products may be available for 
purchase by Federal agencies through the AbilityOne Program (formerly 
known as the Javits-Wagner-O'Day (JWOD) program). Under this program, 
members of organizations including the National Industries for the 
Blind (NIB) and SourceAmerica (formerly known as the National 
Industries for the Severely Handicapped) offer products and services 
for preferred procurement by Federal agencies. A search of the 
AbilityOne Program's online catalog (www.abilityone.gov) indicated that 
the types of intermediate ingredient product categories being 
designated in this final rule are not available through the AbilityOne 
Program. USDA notes, however, that if such materials are offered at 
some point in the future, their procurement through the AbilityOne 
Program would further the objectives of both the AbilityOne Program and 
the Federal preferred procurement program.
    Outreach. To augment its own research, USDA consults with industry 
and Federal stakeholders to the Federal preferred procurement program 
during the development of the rulemaking packages for the designation 
of product categories. USDA consults with stakeholders to gather 
information used in determining the order of product category 
designation and in identifying: Manufacturers producing and marketing 
products that are categorized within a product category being 
designated; performance standards used by Federal agencies evaluating 
products to be procured; and warranty information used by manufacturers 
of end user equipment and other products with regard to biobased 
products.

III. Discussion of Public Comments

    USDA solicited comments on the proposed rule for 90 days ending on 
April 13, 2017. USDA received eight comments by that date. Four of the 
comments were from manufacturers of biobased products, and four were 
from trade associations. The comments are presented below, along with 
USDA's responses, and are shown under the product categories to which 
they apply.

General Process Comments

    Comment: One commenter believes that the scope of the proposed 
intermediate categories is too broad and that the proposed categories 
are too widely defined. The commenter recommends categorizing 
intermediates based on functional use descriptions. Further, the 
commenter notes that by defining intermediates according to their 
function in finished products, USDA can refine the minimum percent 
biobased content required for each group.
    Response: USDA agrees that the scope of many of the proposed 
intermediate ingredient product categories is broad. That is by design. 
There were, however, several factors that had to be considered in 
creating the product categories. USDA first considered the primary 
rationale for the designation of these intermediate ingredients. 
Section 9002 directs USDA to designate intermediate ingredients and 
also to designate finished products made from those intermediate 
ingredients. The designation of intermediate ingredients as proposed 
was intended to facilitate the future designation of the finished 
products that are made from the intermediate ingredients. USDA believes 
that the designation of finished products made from intermediate 
ingredients will provide a significant boost in the market for these 
products. The Federal government is not expected to purchase 
significant quantities of intermediate materials even after they are 
designated for the preferred procurement.
    USDA also had to consider the potentially conflicting goals of 
keeping the proposed number of intermediate

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ingredient product categories reasonable while creating a mechanism for 
the subsequent designation of as many finished product categories as 
possible. The decision was made that one way to accomplish this was to 
define many of the intermediate ingredient product categories broadly. 
One example of this is the proposed category of ``intermediate 
ingredients--plastic resins.'' There are numerous types of biobased 
plastic resins either already in use or under development. These resins 
are then used to make a vast number of biobased plastic finished 
products. USDA chose to propose a product category that included 
essentially all plastic resins to be as inclusive as possible.
    Another significant factor that affected USDA's decision-making 
when creating the intermediate ingredient product categories was the 
availability of product data. USDA created more specific product 
categories where data were available to support creating those 
categories. For example, USDA had data supporting the designation of 
categories specifically for biobased ingredients that are used in the 
manufacturing of finished products in the textiles, lubricants, 
cleaners, and personal care industries. Thus, the decision was made to 
go with a broad definition in hopes that most, if not all, biobased 
chemicals that are used as intermediate ingredients would be covered.
    Finally, USDA points out that the BioPreferred Program has 
traditionally created product categories that are defined by their 
function and intends to continue to do so when creating product 
categories for the finished products that are made from the 
intermediate ingredients being designated in this rulemaking. USDA has 
taken the approach that for the designation of intermediate 
ingredients, however, the designation of broadly defined categories is 
more reasonable and more inclusive than attempting to create a very 
large number of function-specific categories.
    Comment: One commenter recommends that a validation study be 
performed to better understand the ranges of inaccuracies of the test 
method, ASTM D6866, across a number of intermediates and products.
    Response: USDA relies on ASTM and the relevant stakeholder 
committee to confirm the validity of the test method. ASTM D6866 
underwent a review and revision during 2016, and USDA is confident that 
the method yields results that are reliable.
    Comment: One commenter supports the designation of intermediate 
product categories and encourages USDA to develop a more efficient 
mechanism for adding future new product categories. The commenter 
acknowledges that the Federal government may not acquire significant 
amounts of biobased intermediates, but the commenter believes that 
having product categories that cover renewable chemicals used in final 
products allows for greater flexibility in the acquisition of biobased 
products and easier identification of biobased products that would 
qualify as biobased under the Program.
    Further, the commenter notes that the development of biobased 
products and renewable chemicals is occurring at a rapid pace. Thus, 
the commenter encourages USDA to explore opportunities to streamline 
the process of designating new product categories.
    Response: USDA appreciates the commenter's support for the proposed 
designation of intermediate ingredient product categories. USDA agrees 
that innovation is constantly occurring in the biobased products 
industry; the development of these biobased intermediate ingredients, 
and the products made from them, is progressing rapidly. The process of 
designating new product categories is one that USDA is constantly 
seeking to improve. USDA will continue to evaluate changes to the 
Program that have the potential to streamline the process for 
designating product categories.
    Comment: One commenter supports the purpose and implementation of 
the USDA BioPreferred Program and acknowledges the challenge of 
identifying the wide range of biobased intermediate ingredients and 
feedstock materials. The commenter encourages USDA to carefully review 
the technical information it receives regarding finished products that 
are being made from these intermediates or feedstocks. The commenter 
believes that after reviewing this technical information, USDA may want 
to consider adjusting the definitions, setting subcategories, or 
adjusting the minimum biobased content requirements for the twelve 
proposed intermediates categories.
    The commenter also supports the use of subcategories at the 
finished product level and not at the intermediate ingredient or 
feedstock material level. Further, the commenter believes USDA should 
consider the need to create subcategories to allow for variations in 
the minimum biobased content of different end use products. When 
setting the minimum biobased content for finished products, the 
commenter encourages USDA to verify that there are products within a 
given category or subcategory that are commercially available.
    The commenter believes that the designation of intermediate 
categories will have a positive impact on many small businesses that 
are now using or would like to use biobased materials in their finished 
products.
    The commenter also believes that the designation of intermediate 
ingredients and feedstocks will allow small businesses easy access to 
useable information on the types and categories of biobased materials 
that are available for use in finished products. The commenter states 
that the use of biobased materials is one way for small businesses to 
distinguish themselves in both the government and private sector 
marketplaces.
    The commenter also supports and encourages USDA to continue and 
expand outreach efforts as stated in the Federal Register.
    Response: USDA thanks the commenter for their support of the 
BioPreferred Program and for their suggestions on technical 
considerations such as revising the definitions, creating 
subcategories, and adjusting the minimum biobased contents of the 
intermediate ingredient product categories. USDA is aware that the 
information used to support the designation of these intermediate 
ingredient product categories is often a small sample of the universe 
of knowledge related to a specific biobased technology or material. As 
additional information becomes available, USDA will evaluate the need 
to revise or adjust the technical components of the rulemaking (such as 
definitions, subcategories, and minimum biobased content requirements). 
If such revisions or adjustments are found to be warranted, USDA will 
undertake a new rulemaking to amend the Guidelines as needed. In the 
case of upcoming rulemakings to designate finished products, USDA will 
continue to gather and evaluate technical information from the biobased 
products industry to support the decisions that go into the rulemaking.
    USDA appreciates the support for the approach of defining product 
categories at the finished product level as opposed to the intermediate 
ingredient level. As discussed earlier, USDA believes that broad 
definitions of the intermediate ingredient product categories and, 
subsequently, more specific functional definitions at the finished 
product category level is a reasonable approach.
    USDA also appreciates the commenter's statements regarding the 
positive impact of the BioPreferred

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Program and biobased products on the industry's small businesses.
Intermediates--Plastic Resins
    Comment: One commenter suggests that the proposed definition be 
amended to include polymers.
    Response: Although the name of the product category was not 
changed, USDA has revised the proposed definition of this product 
category to include the term ``polymers.''
    Comment: One commenter supports designating the proposed 
intermediates--plastic resins category. The commenter believes that the 
proposal to certify intermediates has the potential to streamline the 
certification process for future finished products.
    Response: USDA thanks the commenter for their support of the 
proposed designation of the intermediate ingredients product 
categories.
    Comment: One commenter believes the minimum biobased content should 
be set at 17%. The commenter states that there are commercial plastic 
films available that contain 20% biobased content, and these films are 
stronger than films made from petro-based resins. The commenter 
believes that setting the minimum biobased content at 17% could have a 
significant positive impact by encouraging more recycling of films and 
bags.
    Response: USDA did not revise the proposed minimum biobased content 
for this product category. As discussed in the Preamble to the proposed 
rule, USDA has data from over 60 manufacturers who make about 150 
biobased plastic resins. These resins are used to make a wide variety 
of finished products. The biobased contents of the resins in the 
database range from 25 percent to 100 percent. USDA believes that 
setting the minimum biobased content requirement for this product 
category at 22 percent is reasonable. USDA also points out that the 
product mentioned by the commenter (plastic film) is already included 
in the designated product category ``Films'' found in Sec.  3201.27. 
The Films product category includes subcategories for semi-durable 
films and non-durable films and the minimum biobased content 
requirements are 45 percent and 85 percent, respectively.
Intermediates--Chemicals
    Comment: One commenter states that the proposed intermediates--
chemicals category is too widely defined as it includes reactants, 
building block chemicals, secondary chemicals, and chemicals with 
specific functional properties. Moreover, the commenter believes that 
the proposed minimum of 22 percent gives no incentive for chemical 
producers to increase biobased content. The commenter recommends that 
USDA instead categorize by function, which will allow for increased 
minimums for several functional classes.
    Response: As discussed in previous responses, USDA believes that 
creating more specific definitions based on the product's function is 
more appropriate for the finished products made from intermediate 
ingredients. USDA also believes that the goal of including as many 
renewable chemicals in the Program as possible is best met by being 
more inclusive when designating the intermediate ingredient product 
categories. USDA also believes that for the broadly defined product 
category setting the minimum biobased content at the proposed 22 
percent level is appropriate and that competition among manufacturers 
will tend to drive the actual biobased contents higher than the 
required minimum. Maintaining the level at 22 percent will also allow 
many chemical producers to participate in the Program while they make 
technological improvements that increase the biobased content rather 
than excluding them from the Program as they strive for improvement. 
USDA also believes that it is appropriate to set more specific minimum 
biobased content requirements at the finished product level. The 
consumers of finished products are expected to be the motivating force 
that encourages manufacturers to increase the biobased content of the 
products they make and hope to sell. USDA believes that the most 
reasonable approach is to include a wide range of intermediate 
ingredients in the Program and then let the demand for finished 
products with high biobased contents encourage advances in intermediate 
ingredients.
    Comment: One commenter suggests that the proposed definition be 
amended to include viscosity reducers, rheology modifiers, adhesion 
agents, polyols, and polymers.
    Response: The definition, as proposed, was not intended to be an 
all-inclusive list. USDA agrees with the commenter that the materials 
they listed are reasonable additions to the proposed definition and has 
revised the final definition to include them. However, USDA points out 
that the list is still not considered to be all-inclusive. It is likely 
that biobased intermediate ingredients exist that are not specifically 
included in the definition and it is USDA's intention that they be 
eligible for preferred procurement under the Program.
Intermediates--Paint and Coating Components
    Comment: One commenter suggests that the proposed definition be 
amended to include humectants/open time additives, coalescent alkyd 
latex resins, and polymers.
    Response: The definition, as proposed, included examples of the 
types of components intended to be covered by the product category and 
was not intended to be an all-inclusive list. USDA agrees with the 
commenter that the materials they listed are reasonable additions to 
the proposed definition and has revised the final definition to include 
them. However, USDA points out that the list is still not considered to 
be all-inclusive. It is likely that biobased intermediate ingredients 
exist that are not specifically included in the definition and it is 
USDA's intention that they be eligible for preferred procurement under 
the Program.
Intermediates--Foams
    Comment: One commenter states that foams are used in a wide variety 
of products, and as such, there is a wide variety of foams with 
biobased contents that have been developed to meet the performance 
needs of the foam containing products. The commenter believes that the 
proposed intermediates--foams category is one for which USDA should 
establish subcategories based on the types of end uses and 
corresponding performance requirements of the foams. Further, the 
commenter believes that USDA should set minimum biobased contents for 
these subcategories, noting that the proposed 22% minimum for 
intermediates--foams will be too high for some applications.
    Response: USDA thanks the commenter for their input regarding this 
proposed product category. USDA also agrees that this product category 
certainly includes a wide variety of products used to make a large 
number of finished products. As the commenter pointed out, USDA 
requested information from intermediate ingredient manufacturers on 
finished products made from their intermediates. Unfortunately, for the 
product category intermediates-foams, no additional information was 
provided. USDA is, therefore, finalizing this product category as 
proposed; however, USDA is continuing the process of gathering data to 
support the upcoming designation of finished products make from these 
designated intermediate ingredients. As additional product data are 
obtained and evaluated, USDA will consider

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revisions or adjustments that may need to be made in this (and all 
other) intermediate ingredient product categories. Such revisions could 
include creating subcategories, clarifying changes to the definitions, 
or adjustments to the required minimum biobased content.
Intermediates--Binders
    Comment: One commenter suggests that the proposed definition be 
amended to include ``binders are generally polymers or polymer 
precursors (such as epoxies) and include the polymeric materials used 
to formulate coatings, adhesives, sealants and elastomers.'' The 
commenter also believes that the proposed definition should include 
adhesives and glues that are finished products.
    Response: USDA has revised the proposed definition to include the 
phrase recommended by the commenter. As discussed earlier, USDA agrees 
that including examples in the definitions may provide more clarity but 
cautions that such examples are not intended to be all-inclusive or to 
restrict the definition so that it only applies to those examples.
    USDA disagrees with the commenter's suggestion to revise the 
proposed definition so that it includes finished product adhesives and 
glues. These types of products will be included in the upcoming 
rulemaking that designates finished products made from designated 
intermediate ingredients.
Intermediates--Cleaner Components
    Comment: One commenter notes that the proposed intermediates--
cleaner components category includes a wide range of substances that 
perform very different functions in cleaning products. The commenter 
further states that this definition does not include an exhaustive list 
of cleaning ingredients.
    Response: As discussed in previous responses, USDA has 
intentionally established intermediate ingredient product categories 
that are very broad in scope. The commenter is also correct that the 
definitions do not attempt to include exhaustive lists of materials 
that are covered by the definition. Examples of the types of materials 
that fit within the definition are provided in most cases. Because of 
the continuing technological advances within the biobased products 
industry, USDA does not believe it is reasonable to attempt to create 
exhaustive or all-inclusive lists of materials that could result in the 
exclusion of materials still under development.
Intermediates--Personal Care Product Components
    Comment: One commenter states that the personal care product 
industry and the cleaning industry use many of the same ingredients. 
Thus, the commenter believes that the proposed intermediates--personal 
care product components category overlaps with the proposed 
intermediates--cleaner components category and is redundant.
    Response: USDA agrees that there is a strong probability that some 
intermediate ingredients may be used in both the personal care product 
components and the cleaner components categories. Because many of the 
intermediate ingredient materials being designated are very basic, 
multi-purpose chemicals, their use in multiple finished product 
categories is expected. There are also expected to be some ingredients 
that are unique to one category or the other. USDA believes that 
creating these intermediate ingredient product categories (and others 
with potential overlapping materials) will ultimately make the process 
of cataloging product information simpler for the BioPreferred Program 
and will make it easier for manufacturers of finished products, Federal 
procuring officials, and the consuming public, to identify and locate 
biobased products that are available to them.
Intermediates--Oils, Fats and Waxes
    Comment: One commenter notes that the proposed minimum biobased 
content is lower than the content found naturally in oils, fats, and 
waxes.
    Response: USDA evaluated data on 24 intermediate ingredient 
materials within this category. These materials ranged in biobased 
content from 68 percent to 100 percent. The proposed 65 percent minimum 
biobased content was based on the sample with the lowest biobased 
content. Raw materials that are 100 percent fats and oils derived from 
animals and plants would be expected to be essentially 100 percent 
biobased. However, it is likely that many of the products that would 
fall into this category have been modified, blended, or in some way 
altered in the process of extracting or refining them. It is also 
likely that the commercial products that are produced within this 
category are a combination of ingredients, not all of which may be 100 
percent biobased. Because of these possibilities, USDA has not changed 
the minimum biobased content proposed for this product category.
    Comment: One commenter suggests that the proposed definition be 
amended to include proteins and carbohydrates.
    Response: USDA has not revised the proposed definition because the 
term ``oils, fats, and waxes'' is believed to be sufficiently broad to 
cover the materials that are expected to be found in this product 
category. Also, proteins and carbohydrates are, generally, chemically 
different from oils, fats, and waxes. Oils, fats, and waxes are 
typically made up of long carbon chains where proteins and 
carbohydrates have a lower carbon to non-carbon molecule ratio. USDA 
believes that the types of intermediate ingredient materials derived 
from proteins and carbohydrates are more likely to be included in the 
intermediate--chemicals product category.
New Categories
    Comment: One commenter suggests designating a product category for 
``can liners.'' The commenter notes that the Federal government uses a 
large number of can liners and that can liners are typically made from 
non-biobased materials. Thus, the commenter believes that there would 
be significant benefit in designating a ``can liners'' category in the 
next round.
    Another commenter believes that it is important to have a product 
category designation for FSC code 4253 Hazardous Material Spill 
Containment and Clean-up Equipment.
    Response: USDA thanks the commenters for their interest in the 
BioPreferred Program and their suggestions regarding possible new 
product categories. The product categories suggested by these 
commenters will be evaluated along with the potential categories of 
finished products made from designated intermediate ingredients. USDA 
plans to propose a rulemaking action that will identify those 
categories selected for possible designation and the public will be 
invited to submit comments.

IV. Summary of Changes

    After consideration of the public comments received in response to 
the proposed rule, USDA made several changes in the final rule. These 
changes are summarized below.
    In the final rule, USDA has revised the definition of the 
categories intermediates--plastic resins, intermediates--chemicals, 
intermediates--paint and coating components, and intermediates--binders 
as explained in the following paragraph. These changes were made to 
clarify or add examples of intermediates that can be included in each 
of these categories.

[[Page 31846]]

    The definition for the intermediate--plastic resins category has 
been revised to include the term ``polymers.'' The definition for the 
intermediates--chemicals category has been revised to list additional 
materials such as viscosity reducers, rheology modifiers, adhesion 
agents, polyols, and polymers. Additional examples of paint and coating 
components, such as humectants, open time additives, and polymers, have 
been added to the definition of the intermediates--paint and coating 
components category. The intermediates--binders category definition has 
been revised to expand on the types of chemicals that typically make up 
binders. Additionally, the definition has been expanded to include 
examples of materials that binders can be used to formulate. The 
definition for this category has been revised to include the phrase 
``binders are generally polymers or polymer precursors (such as 
epoxies) and include the polymeric materials used to formulate 
coatings, adhesives, sealants and elastomers.''

V. Regulatory Information

A. Executive Order 12866: Regulatory Planning and Review and Executive 
Order 13563: Improving Regulation and Regulatory Review

    Executive Order 12866, as supplemented by Executive Order 13563, 
requires agencies to determine whether a regulatory action is 
``significant.'' The Order defines a ``significant regulatory action'' 
as one that is likely to result in a rule that may: ``(1) Have an 
annual effect on the economy of $100 million or more or adversely 
affect, in a material way, the economy, a sector of the economy, 
productivity, competition, jobs, the environment, public health or 
safety, or State, local, or tribal governments or communities; (2) 
Create a serious inconsistency or otherwise interfere with an action 
taken or planned by another agency; (3) Materially alter the budgetary 
impact of entitlements, grants, user fees, or loan programs or the 
rights and obligations of recipients thereof; or (4) Raise novel legal 
or policy issues arising out of legal mandates, the President's 
priorities, or the principles set forth in this Executive Order.''
    This final rule has been determined by the Office of Management and 
Budget to be not significant for purposes of Executive Order 12866. We 
are not able to quantify the annual economic effect associated with 
this final rule. As discussed in the preamble to the proposed 
rulemaking, USDA made extensive efforts to obtain information on the 
Federal agencies' usage within the 12 designated product categories. 
These efforts were largely unsuccessful. Therefore, attempts to 
determine the economic impacts of this final 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 biobased products within designated product 
categories if price is ``unreasonable,'' the product is not 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 final rule. Consideration 
was also given to the fact that agencies may choose not to procure 
designated items due to unreasonable price.
1. Summary of Impacts
    This final rule 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 product 
categories 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 final rule. The final 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, availability and/or price of 
biobased products acceptable is unknown, it is impossible to quantify 
the actual economic effect of the rule.
2. Benefits of the Final Rule
    The designation of these 12 product categories 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, and to spur development 
of the industrial base through value-added agricultural processing and 
manufacturing in rural communities. On a national and regional level, 
this final rule can result in expanding and strengthening markets for 
biobased materials used in these product categories.
3. Costs of the Final Rule
    Like the benefits, the costs of this final 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. Pre-award procurement costs for Federal agencies may rise 
minimally as the contracting officials conduct market research to 
evaluate the performance, availability and price reasonableness of 
preferred products before making a purchase.

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.
    USDA evaluated the potential impacts of its designation of these 
product categories 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, the 
final rule will not have a significant economic impact on small 
governmental jurisdictions.
    USDA anticipates that this program will affect entities, both large 
and small, that manufacture or sell biobased products. For example, the 
designation of product categories 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

[[Page 31847]]

biobased products and to energize emerging markets for those products. 
Because the program is focused on innovative developments within the 
biobased products industry, which is still in its infancy, 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 product categories designated 
by this rulemaking, the number is expected to be small because this 
industry is still materializing. As such, USDA anticipates that 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 Federal 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 product 
categories being designated for Federal preferred procurement in this 
rule are expected to be included under the following NAICS codes: 
324191 (petroleum lubricating oil and grease manufacturing), 325320 
(pesticide and other agricultural chemicals manufacturing), 325411 
(medicinal and botanical manufacturing), 325412 (pharmaceutical 
preparation manufacturing), 325510 (paint and coating manufacturing), 
325612 (polish and other sanitation goods manufacturing), and 325620 
(toilet preparation manufacturing). USDA obtained information on these 
seven NAICS categories from the U.S. Census Bureau's Economic Census 
database. USDA found that the Economic Census reports about 4,756 
companies within these 7 NAICS categories and that these companies own 
a total of about 5,374 establishments. Thus, the average number of 
establishments per company is about 1.13. The Census data also reported 
that of the 5,374 individual establishments, about 5,228 (97.3 percent) 
have fewer than 500 employees. USDA also found that the overall average 
number of employees per company among these industries is about 92 and 
that the pharmaceutical preparation manufacturing segment (with an 
average of about 250) is the only segment reporting an average of more 
than 100 employees per company. Thus, nearly all of the businesses meet 
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 product categories 
being designated, but believes that the impact will not be significant. 
Most of the product categories being designated in this rulemaking are 
not 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 products within the product categories being 
designated and selling significant quantities of those products to 
government agencies affected by this rulemaking will be relatively low. 
Also, this final rule will not affect existing purchase orders and it 
will not preclude procuring agencies from continuing to purchase non-
biobased products when biobased products do not meet the availability, 
performance, or reasonable price criteria. This final 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 final 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 final 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 final 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 final 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 final rule does not have sufficient federalism implications to 
warrant the preparation of a Federalism Assessment. Provisions of this 
final 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 final 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 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 final 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 final rule is 
currently approved under OMB control number 0503-0011.

J. E-Government Act Compliance

    USDA is committed to compliance with the E-Government Act, which 
requires Government agencies, in

[[Page 31848]]

general, to provide the public the option of submitting information or 
transacting business electronically to the maximum extent possible. 
USDA allows for posting information voluntarily submitted by 
manufacturers or vendors on the products they intend to offer for 
preferred procurement under each designated product category at http://www.biopreferred.gov. For information pertinent to E-Government Act 
compliance related to this rule, please contact Karen Zhang at (202) 
401-4747.

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 3201

    Biobased products, Procurement.

    For the reasons stated in the preamble, the Department of 
Agriculture is amending 7 CFR chapter XXXII as follows:

CHAPTER XXXII--OFFICE OF PROCUREMENT AND PROPERTY MANAGEMENT

PART 3201--GUIDELINES FOR DESIGNATING BIOBASED PRODUCTS FOR FEDERAL 
PROCUREMENT

0
1. The authority citation for part 3201 continues to read as follows:

    Authority: 7 U.S.C. 8102.


0
2. Add Sec. Sec.  3201.108 through 3201.119 to subpart B to read as 
follows:

Sec.
3201.108 Intermediates--Plastic Resins.
3201.109 Intermediates--Chemicals.
3201.110 Intermediates--Paint and Coating Components.
3201.111 Intermediates--Textile Processing Materials.
3201.112 Intermediates--Foams.
3201.113 Intermediates--Fibers and Fabrics.
3201.114 Intermediates--Lubricant Components.
3201.115 Intermediates--Binders.
3201.116 Intermediates--Cleaner Components.
3201.117 Intermediates--Personal Care Product Components.
3201.118 Intermediates--Oils, Fats, and Waxes.
3201.119 Intermediates--Rubber Materials.


Sec.  3201.108  Intermediates--Plastic Resins.

    (a) Definition. Intermediates--Plastic Resins are materials that 
are typically viscous liquids with the ability to harden permanently 
and may exist in liquid or solid (powder or pellets) states. 
Intermediates--Plastic Resins may be used in a variety of finished 
products neat, consisting of a single resin or polymer, or a 
homogeneous blend of two or more neat resins or polymers, or a 
composite, containing two or more distinct materials such as fiber-
reinforced resins. Additionally, Intermediates--Plastic Resins may be 
used in finished products as additives such as plasticizers, pigments, 
thermal stability agents, or impact modifiers.
    (b) Minimum biobased content. The Federal preferred procurement 
product must have a minimum biobased content of at least 22 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 July 10, 2019, 
procuring agencies, in accordance with this part, will give a 
procurement preference for qualifying biobased Intermediates--Plastic 
Resins. By that date, Federal agencies responsible for drafting or 
reviewing specifications for products to be procured shall ensure that 
the relevant specifications require the use of biobased Intermediates--
Plastic Resins.


Sec.  3201.109  Intermediates--Chemicals.

    (a) Definition. Intermediates--Chemicals are those used as 
reactants for organic synthesis reactions rather than for their 
functional properties in a chemical mixture; those used as building 
block chemicals and secondary chemicals such as glycerol, succinic 
acid, propanediol, and monomers such as lactic acid and propylene; 
those used for specific functional properties during manufacturing of 
other products such as pH regulators, flocculants, precipitants, 
neutralizing agents, emulsifiers, viscosity reducers, rheology 
modifiers, adhesion agents, detergents, wetting agents, foaming agents, 
or dispersants; those that are added to end-use products for their 
specific functional properties including polyols, polymers, and 
solvents for thinning and drying applications but excluding solvents 
used for cleaning; and those used for dyes, pigments, and scents 
including flavorings for non-food products such as lip balm.
    (b) Minimum biobased content. The Federal preferred procurement 
product must have a minimum biobased content of at least 22 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 July 10, 2019, 
procuring agencies, in accordance with this part, will give a 
procurement preference for qualifying biobased Intermediates--
Chemicals. By that date, Federal agencies responsible for drafting or 
reviewing specifications for products to be procured shall ensure that 
the relevant specifications require the use of biobased Intermediates--
Chemicals.


Sec.  3201.110  Intermediates--Paint and Coating Components.

    (a) Definition. Intermediates--Paint and Coating Components are 
ingredients used to formulate finished waterborne or solvent borne 
paint and coating products. Examples of Intermediates--Paint and 
Coating Components include binders, pigments, thickeners, curing 
agents, modifiers, humectants, open time additives, alkyd latex resins, 
polymers, polyols, reactive oligomers, or reactive diluents.
    (b) Minimum biobased content. The Federal preferred procurement 
product must have a minimum biobased content of at least 22 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 July 10, 2019, 
procuring agencies, in accordance with this part, will give a 
procurement preference for qualifying biobased Intermediates--Paint and 
Coating Components. By that date, Federal agencies responsible for 
drafting or reviewing specifications for products to be procured shall 
ensure that the relevant specifications require the use of biobased 
Intermediates--Paint and Coating Components.


Sec.  3201.111  Intermediates--Textile Processing Materials.

    (a) Definition. Intermediates--Textile Processing Materials are 
used to treat or finish textiles for the purposes of altering textile 
characteristics such as color, fading, wrinkle resistance, texture, or 
moisture management.
    (b) Minimum biobased content. The Federal preferred procurement 
product must have a minimum biobased content of at least 22 percent, 
which shall be based on the amount of qualifying biobased carbon in the 
product as a

[[Page 31849]]

percent of the weight (mass) of the total organic carbon in the 
finished product.
    (c) Preference compliance date. No later than July 10, 2019, 
procuring agencies, in accordance with this part, will give a 
procurement preference for qualifying biobased Intermediates--Textile 
Processing Materials. By that date, Federal agencies responsible for 
drafting or reviewing specifications for products to be procured shall 
ensure that the relevant specifications require the use of biobased 
Intermediates--Textile Processing Materials.


Sec.  3201.112  Intermediates--Foams.

    (a) Definition. Intermediates--Foams are dry polymer foams used for 
non-construction purposes, such as cushions for furniture.
    (b) Minimum biobased content. The Federal preferred procurement 
product must have a minimum biobased content of at least 22 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 July 10, 2019, 
procuring agencies, in accordance with this part, will give a 
procurement preference for qualifying biobased Intermediates--Foams. By 
that date, Federal agencies responsible for drafting or reviewing 
specifications for products to be procured shall ensure that the 
relevant specifications require the use of biobased Intermediates--
Foams.


Sec.  3201.113  Intermediates--Fibers and Fabrics.

    (a) Definition. Intermediates--Fibers and Fabrics encompasses plant 
and animal fibers, fibers made from plant-derived polymers that are not 
yet formed into more complex products such as carpet or fabrics, 
fabrics made from natural fibers, fabrics made from synthetic fibers, 
or fabrics made from a blend of the two. These materials are used to 
manufacture finished products such as clothing, upholstery, or drapes.
    (b) Minimum biobased content. The Federal preferred procurement 
product must have a minimum biobased content of at least 25 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 July 10, 2019, 
procuring agencies, in accordance with this part, will give a 
procurement preference for qualifying biobased Intermediates--Fibers 
and Fabrics. By that date, Federal agencies responsible for drafting or 
reviewing specifications for products to be procured shall ensure that 
the relevant specifications require the use of biobased Intermediates--
Fibers and Fabrics.


Sec.  3201.114  Intermediates--Lubricant Components.

    (a) Definition. Intermediates--Lubricant Components are ingredients 
that used specifically to formulate finished lubricant products. 
Examples of Intermediates--Lubricant Components include base oils, base 
fluids, additives, or friction modifiers.
    (b) Minimum biobased content. The Federal preferred procurement 
product must have a minimum biobased content of at least 44 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 July 10, 2019, 
procuring agencies, in accordance with this part, will give a 
procurement preference for qualifying biobased Intermediates--Lubricant 
Components. By that date, Federal agencies responsible for drafting or 
reviewing specifications for products to be procured shall ensure that 
the relevant specifications require the use of biobased Intermediates--
Lubricant Components.


Sec.  3201.115  Intermediates--Binders.

    (a) Definition. Intermediates--Binders are materials used to 
provide cohesiveness throughout an entire finished product. Binders are 
generally polymers or polymer precursors (such as epoxies) and include 
the polymeric materials used to formulate coatings, adhesives, 
sealants, and elastomers. The product category does not include 
adhesives and glues that are finished products used to attach the 
surfaces of two or more distinct and separate components to one 
another.
    (b) Minimum biobased content. The Federal preferred procurement 
product must have a minimum biobased content of at least 47 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 July 10, 2019, 
procuring agencies, in accordance with this part, will give a 
procurement preference for qualifying biobased Intermediates--Binders. 
By that date, Federal agencies responsible for drafting or reviewing 
specifications for products to be procured shall ensure that the 
relevant specifications require the use of biobased Intermediates--
Binders.


Sec.  3201.116  Intermediates--Cleaner Components.

    (a) Definition. Intermediates--Cleaner Components are intermediate 
ingredients used specifically for formulating finished cleaning 
products. Examples of Intermediates--Cleaner Components include 
chelating agents, surfactants, hydrotropes, fatty acids, or solvents.
    (b) Minimum biobased content. The Federal preferred procurement 
product must have a minimum biobased content of at least 55 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 July 10, 2019, 
procuring agencies, in accordance with this part, will give a 
procurement preference for qualifying biobased Intermediates--Cleaner 
Components. By that date, Federal agencies responsible for drafting or 
reviewing specifications for products to be procured shall ensure that 
the relevant specifications require the use of biobased Intermediates--
Cleaner Components.


Sec.  3201.117  Intermediates--Personal Care Product Components.

    (a) Definition. Intermediates--Personal Care Product Components are 
ingredients used to formulate finished personal care products. Examples 
of Intermediates--Personal Care Product Components include surfactants, 
oils, humectants, emollients, or emulsifiers.
    (b) Minimum biobased content. The Federal preferred procurement 
product must have a minimum biobased content of at least 62 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 July 10, 2019, 
procuring agencies, in accordance with this part, will give a 
procurement preference for qualifying biobased Intermediates--Personal 
Care Product Components. By that date, Federal agencies responsible for 
drafting or reviewing specifications for products to be procured shall 
ensure that the relevant specifications require the use of biobased 
Intermediates--Personal Care Product Components.


Sec.  3201.118  Intermediates--Oils, Fats, and Waxes.

    (a) Definition. Intermediates--Oils, Fats, and Waxes include raw or 
modified fats and oils derived from plants or animals.
    (b) Minimum biobased content. The Federal preferred procurement 
product

[[Page 31850]]

must have a minimum biobased content of at least 65 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 July 10, 2019, 
procuring agencies, in accordance with this part, will give a 
procurement preference for qualifying biobased Intermediates--Oils, 
Fats, and Waxes. By that date, Federal agencies responsible for 
drafting or reviewing specifications for products to be procured shall 
ensure that the relevant specifications require the use of biobased 
Intermediates--Oils, Fats, and Waxes.


Sec.  3201.119  Intermediates--Rubber Materials.

    (a) Definition. Intermediates--Rubber Materials are used in 
finished products such as rubber gloves, vehicle tires, footwear, 
sports apparel and equipment, bedding and pillow foams, tubing, 
catheters, gasketing, or cosmetic adhesives and bases.
    (b) Minimum biobased content. The Federal preferred procurement 
product must have a minimum biobased content of at least 96 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 July 10, 2019, 
procuring agencies, in accordance with this part, will give a 
procurement preference for qualifying biobased Intermediates--Rubber 
Materials. By that date, Federal agencies responsible for drafting or 
reviewing specifications for products to be procured shall ensure that 
the relevant specifications require the use of biobased Intermediates--
Rubber Materials.

Donald K. Bice,
Deputy Assistant Secretary For Administration, U.S. Department of 
Agriculture.
[FR Doc. 2018-14594 Filed 7-9-18; 8:45 am]
BILLING CODE 3410-TX-P



                                                                                                                                                                                             31841

                                           Rules and Regulations                                                                                           Federal Register
                                                                                                                                                           Vol. 83, No. 132

                                                                                                                                                           Tuesday, July 10, 2018



                                           This section of the FEDERAL REGISTER                             Constitutionally Protected Property            ingredients and feedstocks that are or
                                           contains regulatory documents having general                     Rights                                         can be used to produce items that will
                                           applicability and legal effect, most of which                 D. Executive Order 12988: Civil Justice           be subject’’ to the Federal preferred
                                           are keyed to and codified in the Code of                         Reform
                                                                                                         E. Executive Order 13132: Federalism
                                                                                                                                                           procurement program. The term
                                           Federal Regulations, which is published under
                                           50 titles pursuant to 44 U.S.C. 1510.                         F. Unfunded Mandates Reform Act of 1995           ‘‘intermediate ingredient and feedstock’’
                                                                                                         G. Executive Order 12372:                         is defined in the Farm Bill as ‘‘a
                                           The Code of Federal Regulations is sold by                       Intergovernmental Review of Federal            material or compound made in whole or
                                           the Superintendent of Documents.                                 Programs                                       in significant part from biological
                                                                                                         H. Executive Order 13175: Consultation            products, including renewable
                                                                                                            and Coordination With Indian Tribal            agricultural materials (including plant,
                                           DEPARTMENT OF AGRICULTURE                                        Governments                                    animal, and marine materials) or
                                                                                                         I. Paperwork Reduction Act
                                           Office of Procurement and Property                            J. E-Government Act
                                                                                                                                                           forestry materials, that are subsequently
                                           Management                                                    K. Congressional Review Act                       used to make a more complex
                                                                                                                                                           compound or product.’’ The term
                                                                                                    I. Authority                                           ‘‘intermediates’’ is used in the titles of
                                           7 CFR Part 3201
                                                                                                       These product categories are                        the product categories being designated
                                           RIN 0599–AA27                                            designated under the authority of                      today to distinguish these categories
                                                                                                    section 9002 of the Farm Security and                  from the finished, consumer products
                                           Designation of Product Categories for
                                                                                                    Rural Investment Act of 2002 (the 2002                 previously designated by USDA.
                                           Federal Procurement
                                                                                                    Farm Bill), as amended by the Food,                    Although the Federal government does
                                           AGENCY:  Office of Procurement and                       Conservation, and Energy Act of 2008                   not typically purchase large quantities
                                           Property Management, USDA.                               (the 2008 Farm Bill), and further                      of intermediate ingredients and
                                           ACTION: Final rule.                                      amended by the Agricultural Act of                     feedstock materials, designating such
                                                                                                    2014 (the 2014 Farm Bill), 7 U.S.C.                    materials represents a means to identify
                                           SUMMARY:   The U.S. Department of                        8102. (Section 9002 of the 2002 Farm                   and include finished products made
                                           Agriculture (USDA) is amending the                       Bill, as amended by the 2008 and the                   from such designated materials in the
                                           Guidelines for Designating Biobased                      2014 Farm Bills, is referred to in this                Federal preferred procurement program.
                                           Products for Federal Procurement to add                  document as ‘‘section 9002’’.)                         In the proposed rule, USDA proposed
                                           12 sections that designate product                                                                              designating the following 12 product
                                           categories within which biobased                         II. Background
                                                                                                                                                           categories for the preferred procurement
                                           products will be afforded Federal                           As part of the BioPreferred Program,                program: Intermediates—Plastic Resins;
                                           procurement preference by Federal                        USDA published, on January 13, 2017,                   Intermediates—Chemicals;
                                           agencies and their contractors.                          a proposed rule in the Federal Register                Intermediates—Paint and Coating
                                           DATES: This rule is effective August 9,                  (FR) for the purpose of designating a                  Components; Intermediates—Textile
                                           2018.                                                    total of 12 product categories for the                 Processing Materials; Intermediates—
                                           FOR FURTHER INFORMATION CONTACT:
                                                                                                    preferred procurement of biobased                      Foams; Intermediates—Fibers and
                                           Karen Zhang, USDA, Office of                             products by Federal agencies (referred                 Fabrics; Intermediates—Lubricant
                                           Procurement and Property Management,                     to hereafter in this FR notice as the                  Components; Intermediates—Binders;
                                           1400 Independence Ave. SW,                               ‘‘preferred procurement program’’). This               Intermediates—Cleaner Components;
                                           Washington, DC 20250; email:                             proposed rule can be found at 82 FR                    Intermediates—Personal Care Product
                                           biopreferred_support@amecfw.com;                         4206. This rulemaking is referred to in                Components; Intermediates—Oils, Fats,
                                           phone (202) 401–4747. Information                        this preamble as Round 11 (RIN 0599–                   and Waxes; and Intermediates—Rubber
                                           regarding the Federal preferred                          AA24).                                                 Materials.
                                                                                                       The term ‘‘product category’’ is used
                                           procurement program (one part of the                                                                               This final rule designates the
                                                                                                    as a generic term in the designation
                                           BioPreferred Program) is available on                                                                           proposed product categories within
                                                                                                    process to mean a grouping of specific
                                           the internet at http://                                                                                         which biobased products will be
                                                                                                    products that perform a similar
                                           www.biopreferred.gov.                                                                                           afforded Federal procurement
                                                                                                    function. As originally finalized, the
                                           SUPPLEMENTARY INFORMATION: The                           Guidelines included provisions for the                 preference. USDA has determined that
                                           information presented in this preamble                   designation of product categories that                 each of the product categories being
                                           is organized as follows:                                 were composed of finished, consumer                    designated under this rulemaking meets
                                           I. Authority                                             products such as mobile equipment                      the necessary statutory requirements;
                                           II. Background                                           hydraulic fluids, penetrating lubricants,              that they are being produced with
                                           III. Discussion of Public Comments                       or hand cleaners and sanitizers.                       biobased products; and that their
                                           IV. Summary of Changes                                      The 2008 and 2014 Farm Bills                        procurement will carry out the
                                           V. Regulatory Information                                directed USDA to expand the scope of                   following objectives of section 9002: to
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                                              A. Executive Order 12866: Regulatory                  the Guidelines to include the                          improve demand for biobased products;
                                                 Planning and Review and Executive
                                                                                                    designation of product categories                      to spur development of the industrial
                                                 Order 13563: Improving Regulation and
                                                 Regulatory Review                                  composed of intermediate ingredients                   base through value-added agricultural
                                              B. Regulatory Flexibility Act (RFA)                   and feedstock materials. Specifically,                 processing and manufacturing in rural
                                              C. Executive Order 12630: Governmental                the 2008 Farm Bill stated that USDA                    communities; and to enhance the
                                                 Actions and Interference With                      shall ‘‘designate those intermediate                   Nation’s energy security by substituting


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                                           31842               Federal Register / Vol. 83, No. 132 / Tuesday, July 10, 2018 / Rules and Regulations

                                           biobased products for products derived                   Federal preferred procurement under                   stakeholders to gather information used
                                           from imported oil and natural gas.                       this program may also be within                       in determining the order of product
                                              When USDA designates by                               categories the Environmental Protection               category designation and in identifying:
                                           rulemaking a product category for                        Agency (EPA) has designated under the                 Manufacturers producing and marketing
                                           preferred procurement under the                          EPA’s Comprehensive Procurement                       products that are categorized within a
                                           BioPreferred Program, manufacturers of                   Guideline (CPG) for products containing               product category being designated;
                                           all products under the umbrella of that                  recovered (or recycled) materials.                    performance standards used by Federal
                                           product category that meet the                           Because this rule designates                          agencies evaluating products to be
                                           requirements to qualify for preferred                    intermediate ingredient product                       procured; and warranty information
                                           procurement can claim that status for                    categories rather than categories of                  used by manufacturers of end user
                                           their products. To qualify for preferred                 finished, consumer-use products, USDA                 equipment and other products with
                                           procurement, a product must be within                    does not believe that there is a direct               regard to biobased products.
                                           a designated product category and must                   overlap between these categories and
                                           contain at least the minimum biobased                                                                          III. Discussion of Public Comments
                                                                                                    CPG categories. However, if such an
                                           content established for the designated                   overlap situation is discovered, USDA is                 USDA solicited comments on the
                                           product category. With the designation                   asking manufacturers of qualifying                    proposed rule for 90 days ending on
                                           of these specific product categories,                    biobased products to make additional                  April 13, 2017. USDA received eight
                                           USDA invites the manufacturers and                       product and performance information                   comments by that date. Four of the
                                           vendors of qualifying products to                        available to Federal agencies conducting              comments were from manufacturers of
                                           provide information on the product,                      market research to assist them in                     biobased products, and four were from
                                           contacts, and performance testing for                    determining whether the biobased                      trade associations. The comments are
                                           posting on its BioPreferred website,                     products in question are, or are not, the             presented below, along with USDA’s
                                           http://www.biopreferred.gov. Procuring                   same products for the same uses as the                responses, and are shown under the
                                           agencies will be able to utilize this                    recovered content products.                           product categories to which they apply.
                                           website as one tool to determine the                        Federal Government Purchase of                     General Process Comments
                                           availability of qualifying biobased                      Sustainable Products. The Federal
                                           products under a designated product                      government’s sustainable purchasing                      Comment: One commenter believes
                                           category. Once USDA designates a                         program includes the following three                  that the scope of the proposed
                                           product category, procuring agencies are                 mandatory preference programs for                     intermediate categories is too broad and
                                           required generally to purchase biobased                  designated products: the BioPreferred                 that the proposed categories are too
                                           products within the designated product                   Program, the EPA’s Comprehensive                      widely defined. The commenter
                                           category where the purchase price of the                 Procurement Guideline for products                    recommends categorizing intermediates
                                           procurement product exceeds $10,000                      containing recovered materials, and the               based on functional use descriptions.
                                           or where the quantity of such products                   Environmentally Preferable Purchasing                 Further, the commenter notes that by
                                           or of functionally equivalent products                   program.                                              defining intermediates according to
                                           purchased over the preceding fiscal year                    Other Preferred Procurement                        their function in finished products,
                                           equaled $10,000 or more.                                 Programs. Federal procurement officials               USDA can refine the minimum percent
                                              Minimum Biobased Contents. The                        should also note that many biobased                   biobased content required for each
                                           minimum biobased contents being                          products may be available for purchase                group.
                                           established with this rulemaking are                     by Federal agencies through the                          Response: USDA agrees that the scope
                                           based on products for which USDA has                     AbilityOne Program (formerly known as                 of many of the proposed intermediate
                                           biobased content test data. USDA                         the Javits-Wagner-O’Day (JWOD)                        ingredient product categories is broad.
                                           obtains biobased content data in                         program). Under this program, members                 That is by design. There were, however,
                                           conjunction with product                                 of organizations including the National               several factors that had to be considered
                                           manufacturer’s applications for                          Industries for the Blind (NIB) and                    in creating the product categories.
                                           certification to use the USDA Certified                  SourceAmerica (formerly known as the                  USDA first considered the primary
                                           Biobased Product label. Products that                    National Industries for the Severely                  rationale for the designation of these
                                           are certified to display the label must                  Handicapped) offer products and                       intermediate ingredients. Section 9002
                                           undergo biobased content testing by an                   services for preferred procurement by                 directs USDA to designate intermediate
                                           independent, third party testing lab                     Federal agencies. A search of the                     ingredients and also to designate
                                           using ASTM D6866, ‘‘Standard Test                        AbilityOne Program’s online catalog                   finished products made from those
                                           Methods for Determining the Biobased                     (www.abilityone.gov) indicated that the               intermediate ingredients. The
                                           Content of Solid, Liquid, and Gaseous                    types of intermediate ingredient product              designation of intermediate ingredients
                                           Samples Using Radiocarbon Analysis’’.                    categories being designated in this final             as proposed was intended to facilitate
                                           These test data become part of the                       rule are not available through the                    the future designation of the finished
                                           BioPreferred Program database and their                  AbilityOne Program. USDA notes,                       products that are made from the
                                           use in setting the minimum biobased                      however, that if such materials are                   intermediate ingredients. USDA
                                           content for designated product                           offered at some point in the future, their            believes that the designation of finished
                                           categories results in a more efficient                   procurement through the AbilityOne                    products made from intermediate
                                           process for both the Program and                         Program would further the objectives of               ingredients will provide a significant
                                           manufacturers of products within the                     both the AbilityOne Program and the                   boost in the market for these products.
                                           product categories.                                      Federal preferred procurement program.                The Federal government is not expected
                                              Overlap with EPA’s Comprehensive                         Outreach. To augment its own                       to purchase significant quantities of
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                                           Procurement Guideline program for                        research, USDA consults with industry                 intermediate materials even after they
                                           recovered content products under the                     and Federal stakeholders to the Federal               are designated for the preferred
                                           Resource Conservation and Recovery                       preferred procurement program during                  procurement.
                                           Act (RCRA) Section 6002. Some of the                     the development of the rulemaking                        USDA also had to consider the
                                           products that are within biobased                        packages for the designation of product               potentially conflicting goals of keeping
                                           product categories designated for                        categories. USDA consults with                        the proposed number of intermediate


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                                                               Federal Register / Vol. 83, No. 132 / Tuesday, July 10, 2018 / Rules and Regulations                                         31843

                                           ingredient product categories reasonable                 develop a more efficient mechanism for                subcategory that are commercially
                                           while creating a mechanism for the                       adding future new product categories.                 available.
                                           subsequent designation of as many                        The commenter acknowledges that the                      The commenter believes that the
                                           finished product categories as possible.                 Federal government may not acquire                    designation of intermediate categories
                                           The decision was made that one way to                    significant amounts of biobased                       will have a positive impact on many
                                           accomplish this was to define many of                    intermediates, but the commenter                      small businesses that are now using or
                                           the intermediate ingredient product                      believes that having product categories               would like to use biobased materials in
                                           categories broadly. One example of this                  that cover renewable chemicals used in                their finished products.
                                           is the proposed category of                              final products allows for greater                        The commenter also believes that the
                                           ‘‘intermediate ingredients—plastic                       flexibility in the acquisition of biobased            designation of intermediate ingredients
                                           resins.’’ There are numerous types of                    products and easier identification of                 and feedstocks will allow small
                                           biobased plastic resins either already in                biobased products that would qualify as               businesses easy access to useable
                                           use or under development. These resins                   biobased under the Program.                           information on the types and categories
                                           are then used to make a vast number of                      Further, the commenter notes that the              of biobased materials that are available
                                           biobased plastic finished products.                      development of biobased products and                  for use in finished products. The
                                           USDA chose to propose a product                          renewable chemicals is occurring at a                 commenter states that the use of
                                           category that included essentially all                   rapid pace. Thus, the commenter                       biobased materials is one way for small
                                           plastic resins to be as inclusive as                     encourages USDA to explore                            businesses to distinguish themselves in
                                           possible.                                                opportunities to streamline the process               both the government and private sector
                                              Another significant factor that                       of designating new product categories.                marketplaces.
                                           affected USDA’s decision-making when                        Response: USDA appreciates the                        The commenter also supports and
                                           creating the intermediate ingredient                     commenter’s support for the proposed                  encourages USDA to continue and
                                           product categories was the availability                  designation of intermediate ingredient                expand outreach efforts as stated in the
                                           of product data. USDA created more                       product categories. USDA agrees that                  Federal Register.
                                           specific product categories where data                   innovation is constantly occurring in                    Response: USDA thanks the
                                           were available to support creating those                 the biobased products industry; the                   commenter for their support of the
                                           categories. For example, USDA had data                   development of these biobased                         BioPreferred Program and for their
                                           supporting the designation of categories                 intermediate ingredients, and the                     suggestions on technical considerations
                                           specifically for biobased ingredients that               products made from them, is                           such as revising the definitions, creating
                                           are used in the manufacturing of
                                                                                                    progressing rapidly. The process of                   subcategories, and adjusting the
                                           finished products in the textiles,
                                                                                                    designating new product categories is                 minimum biobased contents of the
                                           lubricants, cleaners, and personal care
                                                                                                    one that USDA is constantly seeking to                intermediate ingredient product
                                           industries. Thus, the decision was made
                                                                                                    improve. USDA will continue to                        categories. USDA is aware that the
                                           to go with a broad definition in hopes
                                                                                                    evaluate changes to the Program that                  information used to support the
                                           that most, if not all, biobased chemicals
                                                                                                    have the potential to streamline the                  designation of these intermediate
                                           that are used as intermediate ingredients
                                                                                                    process for designating product                       ingredient product categories is often a
                                           would be covered.
                                              Finally, USDA points out that the                     categories.                                           small sample of the universe of
                                           BioPreferred Program has traditionally                      Comment: One commenter supports                    knowledge related to a specific biobased
                                           created product categories that are                      the purpose and implementation of the                 technology or material. As additional
                                           defined by their function and intends to                 USDA BioPreferred Program and                         information becomes available, USDA
                                           continue to do so when creating product                  acknowledges the challenge of                         will evaluate the need to revise or adjust
                                           categories for the finished products that                identifying the wide range of biobased                the technical components of the
                                           are made from the intermediate                           intermediate ingredients and feedstock                rulemaking (such as definitions,
                                           ingredients being designated in this                     materials. The commenter encourages                   subcategories, and minimum biobased
                                           rulemaking. USDA has taken the                           USDA to carefully review the technical                content requirements). If such revisions
                                           approach that for the designation of                     information it receives regarding                     or adjustments are found to be
                                           intermediate ingredients, however, the                   finished products that are being made                 warranted, USDA will undertake a new
                                           designation of broadly defined                           from these intermediates or feedstocks.               rulemaking to amend the Guidelines as
                                           categories is more reasonable and more                   The commenter believes that after                     needed. In the case of upcoming
                                           inclusive than attempting to create a                    reviewing this technical information,                 rulemakings to designate finished
                                           very large number of function-specific                   USDA may want to consider adjusting                   products, USDA will continue to gather
                                           categories.                                              the definitions, setting subcategories, or            and evaluate technical information from
                                              Comment: One commenter                                adjusting the minimum biobased                        the biobased products industry to
                                           recommends that a validation study be                    content requirements for the twelve                   support the decisions that go into the
                                           performed to better understand the                       proposed intermediates categories.                    rulemaking.
                                           ranges of inaccuracies of the test                          The commenter also supports the use                   USDA appreciates the support for the
                                           method, ASTM D6866, across a number                      of subcategories at the finished product              approach of defining product categories
                                           of intermediates and products.                           level and not at the intermediate                     at the finished product level as opposed
                                              Response: USDA relies on ASTM and                     ingredient or feedstock material level.               to the intermediate ingredient level. As
                                           the relevant stakeholder committee to                    Further, the commenter believes USDA                  discussed earlier, USDA believes that
                                           confirm the validity of the test method.                 should consider the need to create                    broad definitions of the intermediate
                                           ASTM D6866 underwent a review and                        subcategories to allow for variations in              ingredient product categories and,
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                                           revision during 2016, and USDA is                        the minimum biobased content of                       subsequently, more specific functional
                                           confident that the method yields results                 different end use products. When                      definitions at the finished product
                                           that are reliable.                                       setting the minimum biobased content                  category level is a reasonable approach.
                                              Comment: One commenter supports                       for finished products, the commenter                     USDA also appreciates the
                                           the designation of intermediate product                  encourages USDA to verify that there                  commenter’s statements regarding the
                                           categories and encourages USDA to                        are products within a given category or               positive impact of the BioPreferred


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                                           31844               Federal Register / Vol. 83, No. 132 / Tuesday, July 10, 2018 / Rules and Regulations

                                           Program and biobased products on the                     believes that the proposed minimum of                 Intermediates—Paint and Coating
                                           industry’s small businesses.                             22 percent gives no incentive for                     Components
                                                                                                    chemical producers to increase biobased                  Comment: One commenter suggests
                                           Intermediates—Plastic Resins
                                                                                                    content. The commenter recommends                     that the proposed definition be
                                              Comment: One commenter suggests                       that USDA instead categorize by
                                           that the proposed definition be                                                                                amended to include humectants/open
                                                                                                    function, which will allow for increased              time additives, coalescent alkyd latex
                                           amended to include polymers.                             minimums for several functional
                                              Response: Although the name of the                                                                          resins, and polymers.
                                                                                                    classes.                                                 Response: The definition, as
                                           product category was not changed,                           Response: As discussed in previous
                                           USDA has revised the proposed                                                                                  proposed, included examples of the
                                                                                                    responses, USDA believes that creating
                                           definition of this product category to                                                                         types of components intended to be
                                                                                                    more specific definitions based on the
                                           include the term ‘‘polymers.’’                                                                                 covered by the product category and
                                                                                                    product’s function is more appropriate
                                              Comment: One commenter supports                                                                             was not intended to be an all-inclusive
                                                                                                    for the finished products made from
                                           designating the proposed                                                                                       list. USDA agrees with the commenter
                                                                                                    intermediate ingredients. USDA also
                                           intermediates—plastic resins category.                                                                         that the materials they listed are
                                                                                                    believes that the goal of including as
                                           The commenter believes that the                          many renewable chemicals in the                       reasonable additions to the proposed
                                           proposal to certify intermediates has the                Program as possible is best met by being              definition and has revised the final
                                           potential to streamline the certification                more inclusive when designating the                   definition to include them. However,
                                           process for future finished products.                    intermediate ingredient product                       USDA points out that the list is still not
                                              Response: USDA thanks the                             categories. USDA also believes that for               considered to be all-inclusive. It is
                                           commenter for their support of the                       the broadly defined product category                  likely that biobased intermediate
                                           proposed designation of the                              setting the minimum biobased content                  ingredients exist that are not specifically
                                           intermediate ingredients product                         at the proposed 22 percent level is                   included in the definition and it is
                                           categories.                                              appropriate and that competition among                USDA’s intention that they be eligible
                                              Comment: One commenter believes                       manufacturers will tend to drive the                  for preferred procurement under the
                                           the minimum biobased content should                      actual biobased contents higher than the              Program.
                                           be set at 17%. The commenter states                      required minimum. Maintaining the                     Intermediates—Foams
                                           that there are commercial plastic films                  level at 22 percent will also allow many
                                           available that contain 20% biobased                      chemical producers to participate in the                 Comment: One commenter states that
                                           content, and these films are stronger                    Program while they make technological                 foams are used in a wide variety of
                                           than films made from petro-based                         improvements that increase the                        products, and as such, there is a wide
                                           resins. The commenter believes that                      biobased content rather than excluding                variety of foams with biobased contents
                                           setting the minimum biobased content                     them from the Program as they strive for              that have been developed to meet the
                                           at 17% could have a significant positive                 improvement. USDA also believes that                  performance needs of the foam
                                           impact by encouraging more recycling                     it is appropriate to set more specific                containing products. The commenter
                                           of films and bags.                                       minimum biobased content                              believes that the proposed
                                              Response: USDA did not revise the                     requirements at the finished product                  intermediates—foams category is one for
                                           proposed minimum biobased content                        level. The consumers of finished                      which USDA should establish
                                           for this product category. As discussed                  products are expected to be the                       subcategories based on the types of end
                                           in the Preamble to the proposed rule,                    motivating force that encourages                      uses and corresponding performance
                                           USDA has data from over 60                               manufacturers to increase the biobased                requirements of the foams. Further, the
                                           manufacturers who make about 150                         content of the products they make and                 commenter believes that USDA should
                                           biobased plastic resins. These resins are                hope to sell. USDA believes that the                  set minimum biobased contents for
                                           used to make a wide variety of finished                  most reasonable approach is to include                these subcategories, noting that the
                                           products. The biobased contents of the                   a wide range of intermediate ingredients              proposed 22% minimum for
                                           resins in the database range from 25                     in the Program and then let the demand                intermediates—foams will be too high
                                           percent to 100 percent. USDA believes                    for finished products with high                       for some applications.
                                           that setting the minimum biobased                        biobased contents encourage advances                     Response: USDA thanks the
                                           content requirement for this product                     in intermediate ingredients.                          commenter for their input regarding this
                                           category at 22 percent is reasonable.                       Comment: One commenter suggests                    proposed product category. USDA also
                                           USDA also points out that the product                    that the proposed definition be                       agrees that this product category
                                           mentioned by the commenter (plastic                      amended to include viscosity reducers,                certainly includes a wide variety of
                                           film) is already included in the                         rheology modifiers, adhesion agents,                  products used to make a large number
                                           designated product category ‘‘Films’’                    polyols, and polymers.                                of finished products. As the commenter
                                           found in § 3201.27. The Films product                       Response: The definition, as                       pointed out, USDA requested
                                           category includes subcategories for                      proposed, was not intended to be an all-              information from intermediate
                                           semi-durable films and non-durable                       inclusive list. USDA agrees with the                  ingredient manufacturers on finished
                                           films and the minimum biobased                           commenter that the materials they listed              products made from their intermediates.
                                           content requirements are 45 percent and                  are reasonable additions to the proposed              Unfortunately, for the product category
                                           85 percent, respectively.                                definition and has revised the final                  intermediates-foams, no additional
                                                                                                    definition to include them. However,                  information was provided. USDA is,
                                           Intermediates—Chemicals                                  USDA points out that the list is still not            therefore, finalizing this product
                                             Comment: One commenter states that                     considered to be all-inclusive. It is                 category as proposed; however, USDA is
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                                           the proposed intermediates—chemicals                     likely that biobased intermediate                     continuing the process of gathering data
                                           category is too widely defined as it                     ingredients exist that are not specifically           to support the upcoming designation of
                                           includes reactants, building block                       included in the definition and it is                  finished products make from these
                                           chemicals, secondary chemicals, and                      USDA’s intention that they be eligible                designated intermediate ingredients. As
                                           chemicals with specific functional                       for preferred procurement under the                   additional product data are obtained
                                           properties. Moreover, the commenter                      Program.                                              and evaluated, USDA will consider


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                                                               Federal Register / Vol. 83, No. 132 / Tuesday, July 10, 2018 / Rules and Regulations                                          31845

                                           revisions or adjustments that may need                   Intermediates—Personal Care Product                   amended to include proteins and
                                           to be made in this (and all other)                       Components                                            carbohydrates.
                                           intermediate ingredient product                                                                                   Response: USDA has not revised the
                                                                                                       Comment: One commenter states that
                                           categories. Such revisions could include                                                                       proposed definition because the term
                                                                                                    the personal care product industry and
                                           creating subcategories, clarifying                                                                             ‘‘oils, fats, and waxes’’ is believed to be
                                                                                                    the cleaning industry use many of the
                                           changes to the definitions, or                                                                                 sufficiently broad to cover the materials
                                                                                                    same ingredients. Thus, the commenter
                                           adjustments to the required minimum                                                                            that are expected to be found in this
                                                                                                    believes that the proposed
                                           biobased content.                                                                                              product category. Also, proteins and
                                                                                                    intermediates—personal care product
                                                                                                                                                          carbohydrates are, generally, chemically
                                           Intermediates—Binders                                    components category overlaps with the
                                                                                                                                                          different from oils, fats, and waxes. Oils,
                                                                                                    proposed intermediates—cleaner
                                             Comment: One commenter suggests                                                                              fats, and waxes are typically made up of
                                                                                                    components category and is redundant.
                                           that the proposed definition be                                                                                long carbon chains where proteins and
                                                                                                       Response: USDA agrees that there is
                                           amended to include ‘‘binders are                                                                               carbohydrates have a lower carbon to
                                                                                                    a strong probability that some
                                           generally polymers or polymer                                                                                  non-carbon molecule ratio. USDA
                                                                                                    intermediate ingredients may be used in
                                           precursors (such as epoxies) and                                                                               believes that the types of intermediate
                                                                                                    both the personal care product
                                           include the polymeric materials used to                                                                        ingredient materials derived from
                                                                                                    components and the cleaner
                                           formulate coatings, adhesives, sealants                                                                        proteins and carbohydrates are more
                                                                                                    components categories. Because many
                                           and elastomers.’’ The commenter also                                                                           likely to be included in the
                                                                                                    of the intermediate ingredient materials
                                           believes that the proposed definition                                                                          intermediate—chemicals product
                                                                                                    being designated are very basic, multi-
                                           should include adhesives and glues that                                                                        category.
                                                                                                    purpose chemicals, their use in multiple
                                           are finished products.                                   finished product categories is expected.              New Categories
                                             Response: USDA has revised the                         There are also expected to be some                       Comment: One commenter suggests
                                           proposed definition to include the                       ingredients that are unique to one                    designating a product category for ‘‘can
                                           phrase recommended by the                                category or the other. USDA believes                  liners.’’ The commenter notes that the
                                           commenter. As discussed earlier, USDA                    that creating these intermediate                      Federal government uses a large number
                                           agrees that including examples in the                    ingredient product categories (and                    of can liners and that can liners are
                                           definitions may provide more clarity but                 others with potential overlapping                     typically made from non-biobased
                                           cautions that such examples are not                      materials) will ultimately make the                   materials. Thus, the commenter believes
                                           intended to be all-inclusive or to restrict              process of cataloging product                         that there would be significant benefit
                                           the definition so that it only applies to                information simpler for the BioPreferred              in designating a ‘‘can liners’’ category in
                                           those examples.                                          Program and will make it easier for                   the next round.
                                             USDA disagrees with the commenter’s                    manufacturers of finished products,                      Another commenter believes that it is
                                           suggestion to revise the proposed                        Federal procuring officials, and the                  important to have a product category
                                           definition so that it includes finished                  consuming public, to identify and locate              designation for FSC code 4253
                                           product adhesives and glues. These                       biobased products that are available to               Hazardous Material Spill Containment
                                           types of products will be included in                    them.                                                 and Clean-up Equipment.
                                           the upcoming rulemaking that                             Intermediates—Oils, Fats and Waxes                       Response: USDA thanks the
                                           designates finished products made from                                                                         commenters for their interest in the
                                                                                                       Comment: One commenter notes that                  BioPreferred Program and their
                                           designated intermediate ingredients.
                                                                                                    the proposed minimum biobased                         suggestions regarding possible new
                                           Intermediates—Cleaner Components                         content is lower than the content found               product categories. The product
                                                                                                    naturally in oils, fats, and waxes.                   categories suggested by these
                                             Comment: One commenter notes that                         Response: USDA evaluated data on 24                commenters will be evaluated along
                                           the proposed intermediates—cleaner                       intermediate ingredient materials within              with the potential categories of finished
                                           components category includes a wide                      this category. These materials ranged in              products made from designated
                                           range of substances that perform very                    biobased content from 68 percent to 100               intermediate ingredients. USDA plans to
                                           different functions in cleaning products.                percent. The proposed 65 percent                      propose a rulemaking action that will
                                           The commenter further states that this                   minimum biobased content was based                    identify those categories selected for
                                           definition does not include an                           on the sample with the lowest biobased                possible designation and the public will
                                           exhaustive list of cleaning ingredients.                 content. Raw materials that are 100                   be invited to submit comments.
                                             Response: As discussed in previous                     percent fats and oils derived from
                                           responses, USDA has intentionally                        animals and plants would be expected                  IV. Summary of Changes
                                           established intermediate ingredient                      to be essentially 100 percent biobased.                 After consideration of the public
                                           product categories that are very broad in                However, it is likely that many of the                comments received in response to the
                                           scope. The commenter is also correct                     products that would fall into this                    proposed rule, USDA made several
                                           that the definitions do not attempt to                   category have been modified, blended,                 changes in the final rule. These changes
                                           include exhaustive lists of materials that               or in some way altered in the process of              are summarized below.
                                           are covered by the definition. Examples                  extracting or refining them. It is also                 In the final rule, USDA has revised
                                           of the types of materials that fit within                likely that the commercial products that              the definition of the categories
                                           the definition are provided in most                      are produced within this category are a               intermediates—plastic resins,
                                           cases. Because of the continuing                         combination of ingredients, not all of                intermediates—chemicals,
                                           technological advances within the                        which may be 100 percent biobased.                    intermediates—paint and coating
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                                           biobased products industry, USDA does                    Because of these possibilities, USDA has              components, and intermediates—
                                           not believe it is reasonable to attempt to               not changed the minimum biobased                      binders as explained in the following
                                           create exhaustive or all-inclusive lists of              content proposed for this product                     paragraph. These changes were made to
                                           materials that could result in the                       category.                                             clarify or add examples of intermediates
                                           exclusion of materials still under                          Comment: One commenter suggests                    that can be included in each of these
                                           development.                                             that the proposed definition be                       categories.


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                                           31846               Federal Register / Vol. 83, No. 132 / Tuesday, July 10, 2018 / Rules and Regulations

                                              The definition for the intermediate—                  the 12 designated product categories.                 rule can result in expanding and
                                           plastic resins category has been revised                 These efforts were largely unsuccessful.              strengthening markets for biobased
                                           to include the term ‘‘polymers.’’ The                    Therefore, attempts to determine the                  materials used in these product
                                           definition for the intermediates—                        economic impacts of this final rule                   categories.
                                           chemicals category has been revised to                   would require estimation of the
                                                                                                                                                          3. Costs of the Final Rule
                                           list additional materials such as                        anticipated market penetration of
                                           viscosity reducers, rheology modifiers,                  biobased products based upon many                        Like the benefits, the costs of this
                                           adhesion agents, polyols, and polymers.                  assumptions. In addition, because                     final rule have not been quantified. Two
                                           Additional examples of paint and                         agencies have the option of not                       types of costs are involved: Costs to
                                           coating components, such as                              purchasing biobased products within                   producers of products that will compete
                                           humectants, open time additives, and                     designated product categories if price is             with the preferred products and costs to
                                           polymers, have been added to the                         ‘‘unreasonable,’’ the product is not                  Federal agencies to provide
                                           definition of the intermediates—paint                    readily available, or the product does                procurement preference for the
                                           and coating components category. The                     not demonstrate necessary performance                 preferred products. Producers of
                                           intermediates—binders category                           characteristics, certain assumptions may              competing products may face a decrease
                                           definition has been revised to expand                    not be valid. While facing these                      in demand for their products to the
                                           on the types of chemicals that typically                 quantitative challenges, USDA relied                  extent Federal agencies refrain from
                                           make up binders. Additionally, the                       upon a qualitative assessment to                      purchasing their products. However, it
                                           definition has been expanded to include                  determine the impacts of this final rule.             is not known to what extent this may
                                           examples of materials that binders can                   Consideration was also given to the fact              occur. Pre-award procurement costs for
                                           be used to formulate. The definition for                 that agencies may choose not to procure               Federal agencies may rise minimally as
                                           this category has been revised to include                designated items due to unreasonable                  the contracting officials conduct market
                                           the phrase ‘‘binders are generally                       price.                                                research to evaluate the performance,
                                           polymers or polymer precursors (such                                                                           availability and price reasonableness of
                                                                                                    1. Summary of Impacts                                 preferred products before making a
                                           as epoxies) and include the polymeric
                                           materials used to formulate coatings,                       This final rule is expected to have                purchase.
                                           adhesives, sealants and elastomers.’’                    both positive and negative impacts to
                                                                                                    individual businesses, including small                B. Regulatory Flexibility Act (RFA)
                                           V. Regulatory Information                                businesses. USDA anticipates that the                   The RFA, 5 U.S.C. 601–602, generally
                                                                                                    biobased preferred procurement                        requires an agency to prepare a
                                           A. Executive Order 12866: Regulatory
                                                                                                    program will provide additional                       regulatory flexibility analysis of any rule
                                           Planning and Review and Executive
                                                                                                    opportunities for businesses and                      subject to notice and comment
                                           Order 13563: Improving Regulation and
                                                                                                    manufacturers to begin supplying                      rulemaking requirements under the
                                           Regulatory Review
                                                                                                    products under the designated biobased                Administrative Procedure Act or any
                                              Executive Order 12866, as                             product categories to Federal agencies                other statute unless the agency certifies
                                           supplemented by Executive Order                          and their contractors. However, other                 that the rule will not have a significant
                                           13563, requires agencies to determine                    businesses and manufacturers that                     economic impact on a substantial
                                           whether a regulatory action is                           supply only non-qualifying products                   number of small entities. Small entities
                                           ‘‘significant.’’ The Order defines a                     and do not offer biobased alternatives                include small businesses, small
                                           ‘‘significant regulatory action’’ as one                 may experience a decrease in demand                   organizations, and small governmental
                                           that is likely to result in a rule that may:             from Federal agencies and their                       jurisdictions.
                                           ‘‘(1) Have an annual effect on the                       contractors. USDA is unable to                          USDA evaluated the potential impacts
                                           economy of $100 million or more or                       determine the number of businesses,                   of its designation of these product
                                           adversely affect, in a material way, the                 including small businesses that may be                categories to determine whether its
                                           economy, a sector of the economy,                        adversely affected by this final rule. The            actions would have a significant impact
                                           productivity, competition, jobs, the                     final rule, however, will not affect                  on a substantial number of small
                                           environment, public health or safety, or                 existing purchase orders, nor will it                 entities. Because the preferred
                                           State, local, or tribal governments or                   preclude businesses from modifying                    procurement program established under
                                           communities; (2) Create a serious                        their product lines to meet new                       section 9002 applies only to Federal
                                           inconsistency or otherwise interfere                     requirements for designated biobased                  agencies and their contractors, small
                                           with an action taken or planned by                       products. Because the extent to which                 governmental (city, county, etc.)
                                           another agency; (3) Materially alter the                 procuring agencies will find the                      agencies are not affected. Thus, the final
                                           budgetary impact of entitlements,                        performance, availability and/or price of             rule will not have a significant
                                           grants, user fees, or loan programs or the               biobased products acceptable is                       economic impact on small governmental
                                           rights and obligations of recipients                     unknown, it is impossible to quantify                 jurisdictions.
                                           thereof; or (4) Raise novel legal or policy              the actual economic effect of the rule.                 USDA anticipates that this program
                                           issues arising out of legal mandates, the                                                                      will affect entities, both large and small,
                                           President’s priorities, or the principles                2. Benefits of the Final Rule                         that manufacture or sell biobased
                                           set forth in this Executive Order.’’                        The designation of these 12 product                products. For example, the designation
                                              This final rule has been determined                   categories provides the benefits outlined             of product categories for preferred
                                           by the Office of Management and                          in the objectives of section 9002: to                 procurement will provide additional
                                           Budget to be not significant for purposes                increase domestic demand for many                     opportunities for businesses to
                                           of Executive Order 12866. We are not                     agricultural commodities that can serve               manufacture and sell biobased products
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                                           able to quantify the annual economic                     as feedstocks for production of biobased              to Federal agencies and their
                                           effect associated with this final rule. As               products, and to spur development of                  contractors. Similar opportunities will
                                           discussed in the preamble to the                         the industrial base through value-added               be provided for entities that supply
                                           proposed rulemaking, USDA made                           agricultural processing and                           biobased materials to manufacturers.
                                           extensive efforts to obtain information                  manufacturing in rural communities. On                  The intent of section 9002 is largely
                                           on the Federal agencies’ usage within                    a national and regional level, this final             to stimulate the production of new


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                                                               Federal Register / Vol. 83, No. 132 / Tuesday, July 10, 2018 / Rules and Regulations                                         31847

                                           biobased products and to energize                        500 employees, in most NAICS                          D. Executive Order 12988: Civil Justice
                                           emerging markets for those products.                     categories).                                          Reform
                                           Because the program is focused on                           USDA does not have data on the                       This final rule has been reviewed in
                                           innovative developments within the                       potential adverse impacts on                          accordance with Executive Order 12988,
                                           biobased products industry, which is                     manufacturers of non-biobased products                Civil Justice Reform. This rule does not
                                           still in its infancy, it is unknown how                  within the product categories being                   preempt State or local laws, is not
                                           many businesses will ultimately be                       designated, but believes that the impact              intended to have retroactive effect, and
                                           affected. While USDA has no data on                      will not be significant. Most of the                  does not involve administrative appeals.
                                           the number of small businesses that may
                                                                                                    product categories being designated in                E. Executive Order 13132: Federalism
                                           choose to develop and market biobased
                                                                                                    this rulemaking are not typical
                                           products within the product categories                                                                           This final rule does not have
                                                                                                    consumer products widely used by the
                                           designated by this rulemaking, the                                                                             sufficient federalism implications to
                                                                                                    general public and by industrial/
                                           number is expected to be small because                                                                         warrant the preparation of a Federalism
                                                                                                    commercial establishments that are not
                                           this industry is still materializing. As                                                                       Assessment. Provisions of this final rule
                                           such, USDA anticipates that only a                       subject to this rulemaking. Thus, USDA
                                                                                                                                                          will not have a substantial direct effect
                                           small percentage of all manufacturers,                   believes that the number of small
                                                                                                                                                          on States or their political subdivisions
                                           large or small, are expected to develop                  businesses manufacturing non-biobased
                                                                                                                                                          or on the distribution of power and
                                           and market biobased products. Thus,                      products within the product categories
                                                                                                                                                          responsibilities among the various
                                           the number of small businesses                           being designated and selling significant
                                                                                                                                                          government levels.
                                           manufacturing biobased products                          quantities of those products to
                                           affected by this rulemaking is not                       government agencies affected by this                  F. Unfunded Mandates Reform Act of
                                           expected to be substantial.                              rulemaking will be relatively low. Also,              1995
                                                                                                    this final rule will not affect existing                 This final rule contains no Federal
                                              The Federal preferred procurement
                                                                                                    purchase orders and it will not preclude              mandates under the regulatory
                                           program may decrease opportunities for
                                                                                                    procuring agencies from continuing to                 provisions of Title II of the Unfunded
                                           businesses that manufacture or sell non-
                                           biobased products or provide                             purchase non-biobased products when                   Mandates Reform Act of 1995 (UMRA),
                                           components for the manufacturing of                      biobased products do not meet the                     2 U.S.C. 1531–1538, for State, local, and
                                           such products. Most manufacturers of                     availability, performance, or reasonable              tribal governments, or the private sector.
                                           non-biobased products within the                         price criteria. This final rule will also             Therefore, a statement under section
                                           product categories being designated for                  not preclude businesses from modifying                202 of UMRA is not required.
                                           Federal preferred procurement in this                    their product lines to meet new
                                                                                                                                                          G. Executive Order 12372:
                                           rule are expected to be included under                   specifications or solicitation
                                                                                                                                                          Intergovernmental Review of Federal
                                           the following NAICS codes: 324191                        requirements for these products
                                                                                                                                                          Programs
                                           (petroleum lubricating oil and grease                    containing biobased materials.
                                                                                                                                                            For the reasons set forth in the Final
                                           manufacturing), 325320 (pesticide and                       After considering the economic
                                                                                                                                                          Rule Related Notice for 7 CFR part 3015,
                                           other agricultural chemicals                             impacts of this final rule on small
                                                                                                                                                          subpart V (48 FR 29115, June 24, 1983),
                                           manufacturing), 325411 (medicinal and                    entities, USDA certifies that this action             this program is excluded from the scope
                                           botanical manufacturing), 325412                         will not have a significant economic                  of Executive Order 12372, which
                                           (pharmaceutical preparation                              impact on a substantial number of small               requires intergovernmental consultation
                                           manufacturing), 325510 (paint and                        entities.                                             with State and local officials. This
                                           coating manufacturing), 325612 (polish
                                                                                                       While not a factor relevant to                     program does not directly affect State
                                           and other sanitation goods
                                                                                                    determining whether the final rule will               and local governments.
                                           manufacturing), and 325620 (toilet
                                                                                                    have a significant impact for RFA
                                           preparation manufacturing). USDA                                                                               H. Executive Order 13175: Consultation
                                                                                                    purposes, USDA has concluded that the
                                           obtained information on these seven                                                                            and Coordination With Indian Tribal
                                                                                                    effect of the rule will be to provide
                                           NAICS categories from the U.S. Census                                                                          Governments
                                                                                                    positive opportunities to businesses
                                           Bureau’s Economic Census database.                                                                                This final rule does not significantly
                                                                                                    engaged in the manufacture of these
                                           USDA found that the Economic Census                                                                            or uniquely affect ‘‘one or more Indian
                                                                                                    biobased products. Purchase and use of
                                           reports about 4,756 companies within                                                                           tribes . . . the relationship between the
                                                                                                    these biobased products by procuring
                                           these 7 NAICS categories and that these                                                                        Federal Government and Indian tribes,
                                                                                                    agencies increase demand for these
                                           companies own a total of about 5,374                                                                           or . . . the distribution of power and
                                           establishments. Thus, the average                        products and result in private sector
                                                                                                    development of new technologies,                      responsibilities between the Federal
                                           number of establishments per company                                                                           Government and Indian tribes.’’ Thus,
                                           is about 1.13. The Census data also                      creating business and employment
                                                                                                    opportunities that enhance local,                     no further action is required under
                                           reported that of the 5,374 individual                                                                          Executive Order 13175.
                                           establishments, about 5,228 (97.3                        regional, and national economies.
                                           percent) have fewer than 500                             C. Executive Order 12630:                             I. Paperwork Reduction Act
                                           employees. USDA also found that the                      Governmental Actions and Interference                    In accordance with the Paperwork
                                           overall average number of employees                      With Constitutionally Protected Property              Reduction Act of 1995 (44 U.S.C. 3501
                                           per company among these industries is                    Rights                                                through 3520), the information
                                           about 92 and that the pharmaceutical                                                                           collection under this final rule is
                                           preparation manufacturing segment                           This final rule has been reviewed in               currently approved under OMB control
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                                           (with an average of about 250) is the                    accordance with Executive Order 12630,                number 0503–0011.
                                           only segment reporting an average of                     Governmental Actions and Interference
                                           more than 100 employees per company.                     with Constitutionally Protected Property              J. E-Government Act Compliance
                                           Thus, nearly all of the businesses meet                  Rights, and does not contain policies                    USDA is committed to compliance
                                           the Small Business Administration’s                      that would have implications for these                with the E-Government Act, which
                                           definition of a small business (less than                rights.                                               requires Government agencies, in


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                                           31848               Federal Register / Vol. 83, No. 132 / Tuesday, July 10, 2018 / Rules and Regulations

                                           general, to provide the public the option                3201.118 Intermediates—Oils, Fats, and                    (b) Minimum biobased content. The
                                           of submitting information or transacting                     Waxes.                                             Federal preferred procurement product
                                           business electronically to the maximum                   3201.119 Intermediates—Rubber Materials.               must have a minimum biobased content
                                           extent possible. USDA allows for                         § 3201.108       Intermediates—Plastic Resins.         of at least 22 percent, which shall be
                                           posting information voluntarily                                                                                 based on the amount of qualifying
                                           submitted by manufacturers or vendors                       (a) Definition. Intermediates—Plastic               biobased carbon in the product as a
                                           on the products they intend to offer for                 Resins are materials that are typically                percent of the weight (mass) of the total
                                           preferred procurement under each                         viscous liquids with the ability to                    organic carbon in the finished product.
                                           designated product category at http://                   harden permanently and may exist in                       (c) Preference compliance date. No
                                           www.biopreferred.gov. For information                    liquid or solid (powder or pellets) states.            later than July 10, 2019, procuring
                                           pertinent to E-Government Act                            Intermediates—Plastic Resins may be                    agencies, in accordance with this part,
                                           compliance related to this rule, please                  used in a variety of finished products                 will give a procurement preference for
                                           contact Karen Zhang at (202) 401–4747.                   neat, consisting of a single resin or                  qualifying biobased Intermediates—
                                                                                                    polymer, or a homogeneous blend of                     Chemicals. By that date, Federal
                                           K. Congressional Review Act                              two or more neat resins or polymers, or                agencies responsible for drafting or
                                             The Congressional Review Act, 5                        a composite, containing two or more                    reviewing specifications for products to
                                           U.S.C. 801 et seq., as added by the Small                distinct materials such as fiber-                      be procured shall ensure that the
                                           Business Regulatory Enforcement                          reinforced resins. Additionally,                       relevant specifications require the use of
                                           Fairness Act of 1996, generally provides                 Intermediates—Plastic Resins may be                    biobased Intermediates—Chemicals.
                                           that before a rule may take effect, the                  used in finished products as additives
                                           agency promulgating the rule must                        such as plasticizers, pigments, thermal                § 3201.110 Intermediates—Paint and
                                           submit a rule report, that includes a                    stability agents, or impact modifiers.                 Coating Components.
                                           copy of the rule, to each House of the                      (b) Minimum biobased content. The                     (a) Definition. Intermediates—Paint
                                           Congress and to the Comptroller General                  Federal preferred procurement product                  and Coating Components are ingredients
                                           of the United States. USDA has                           must have a minimum biobased content                   used to formulate finished waterborne
                                           submitted a report containing this rule                  of at least 22 percent, which shall be                 or solvent borne paint and coating
                                           and other required information to the                    based on the amount of qualifying                      products. Examples of Intermediates—
                                           U.S. Senate, the U.S. House of                           biobased carbon in the product as a                    Paint and Coating Components include
                                           Representatives, and the Comptroller                     percent of the weight (mass) of the total              binders, pigments, thickeners, curing
                                           General of the United States prior to                    organic carbon in the finished product.                agents, modifiers, humectants, open
                                           publication of the rule in the Federal                      (c) Preference compliance date. No                  time additives, alkyd latex resins,
                                           Register.                                                later than July 10, 2019, procuring                    polymers, polyols, reactive oligomers, or
                                           List of Subjects in 7 CFR Part 3201                      agencies, in accordance with this part,                reactive diluents.
                                                                                                    will give a procurement preference for                    (b) Minimum biobased content. The
                                              Biobased products, Procurement.                                                                              Federal preferred procurement product
                                                                                                    qualifying biobased Intermediates—
                                              For the reasons stated in the                         Plastic Resins. By that date, Federal                  must have a minimum biobased content
                                           preamble, the Department of Agriculture                  agencies responsible for drafting or                   of at least 22 percent, which shall be
                                           is amending 7 CFR chapter XXXII as                       reviewing specifications for products to               based on the amount of qualifying
                                           follows:                                                 be procured shall ensure that the                      biobased carbon in the product as a
                                           CHAPTER XXXII—OFFICE OF                                  relevant specifications require the use of             percent of the weight (mass) of the total
                                           PROCUREMENT AND PROPERTY                                 biobased Intermediates—Plastic Resins.                 organic carbon in the finished product.
                                           MANAGEMENT                                                                                                         (c) Preference compliance date. No
                                                                                                    § 3201.109       Intermediates—Chemicals.
                                                                                                                                                           later than July 10, 2019, procuring
                                           PART 3201—GUIDELINES FOR                                    (a) Definition. Intermediates—                      agencies, in accordance with this part,
                                           DESIGNATING BIOBASED PRODUCTS                            Chemicals are those used as reactants                  will give a procurement preference for
                                           FOR FEDERAL PROCUREMENT                                  for organic synthesis reactions rather                 qualifying biobased Intermediates—
                                                                                                    than for their functional properties in a              Paint and Coating Components. By that
                                           ■ 1. The authority citation for part 3201
                                                                                                    chemical mixture; those used as                        date, Federal agencies responsible for
                                           continues to read as follows:
                                                                                                    building block chemicals and secondary                 drafting or reviewing specifications for
                                               Authority: 7 U.S.C. 8102.                            chemicals such as glycerol, succinic                   products to be procured shall ensure
                                           ■ 2. Add §§ 3201.108 through 3201.119                    acid, propanediol, and monomers such                   that the relevant specifications require
                                           to subpart B to read as follows:                         as lactic acid and propylene; those used               the use of biobased Intermediates—
                                                                                                    for specific functional properties during              Paint and Coating Components.
                                           Sec.                                                     manufacturing of other products such as
                                           3201.108 Intermediates—Plastic Resins.                                                                          § 3201.111 Intermediates—Textile
                                           3201.109 Intermediates—Chemicals.
                                                                                                    pH regulators, flocculants, precipitants,
                                                                                                                                                           Processing Materials.
                                           3201.110 Intermediates—Paint and Coating                 neutralizing agents, emulsifiers,
                                                Components.                                         viscosity reducers, rheology modifiers,                   (a) Definition. Intermediates—Textile
                                           3201.111 Intermediates—Textile Processing                adhesion agents, detergents, wetting                   Processing Materials are used to treat or
                                                Materials.                                          agents, foaming agents, or dispersants;                finish textiles for the purposes of
                                           3201.112 Intermediates—Foams.                            those that are added to end-use products               altering textile characteristics such as
                                           3201.113 Intermediates—Fibers and                        for their specific functional properties               color, fading, wrinkle resistance,
                                                Fabrics.                                            including polyols, polymers, and                       texture, or moisture management.
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                                           3201.114 Intermediates—Lubricant                         solvents for thinning and drying                          (b) Minimum biobased content. The
                                                Components.
                                           3201.115 Intermediates—Binders.
                                                                                                    applications but excluding solvents                    Federal preferred procurement product
                                           3201.116 Intermediates—Cleaner                           used for cleaning; and those used for                  must have a minimum biobased content
                                                Components.                                         dyes, pigments, and scents including                   of at least 22 percent, which shall be
                                           3201.117 Intermediates—Personal Care                     flavorings for non-food products such as               based on the amount of qualifying
                                                Product Components.                                 lip balm.                                              biobased carbon in the product as a


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                                                                Federal Register / Vol. 83, No. 132 / Tuesday, July 10, 2018 / Rules and Regulations                                               31849

                                           percent of the weight (mass) of the total                 be procured shall ensure that the                      § 3201.116 Intermediates—Cleaner
                                           organic carbon in the finished product.                   relevant specifications require the use of             Components.
                                              (c) Preference compliance date. No                     biobased Intermediates—Fibers and                        (a) Definition. Intermediates—Cleaner
                                           later than July 10, 2019, procuring                       Fabrics.                                               Components are intermediate
                                           agencies, in accordance with this part,                                                                          ingredients used specifically for
                                           will give a procurement preference for                    § 3201.114 Intermediates—Lubricant                     formulating finished cleaning products.
                                                                                                     Components.
                                           qualifying biobased Intermediates—                                                                               Examples of Intermediates—Cleaner
                                           Textile Processing Materials. By that                        (a) Definition. Intermediates—                      Components include chelating agents,
                                           date, Federal agencies responsible for                    Lubricant Components are ingredients                   surfactants, hydrotropes, fatty acids, or
                                           drafting or reviewing specifications for                  that used specifically to formulate                    solvents.
                                           products to be procured shall ensure                      finished lubricant products. Examples                     (b) Minimum biobased content. The
                                           that the relevant specifications require                  of Intermediates—Lubricant                             Federal preferred procurement product
                                           the use of biobased Intermediates—                        Components include base oils, base                     must have a minimum biobased content
                                           Textile Processing Materials.                             fluids, additives, or friction modifiers.              of at least 55 percent, which shall be
                                                                                                        (b) Minimum biobased content. The                   based on the amount of qualifying
                                           § 3201.112       Intermediates—Foams.                     Federal preferred procurement product                  biobased carbon in the product as a
                                             (a) Definition. Intermediates—Foams                     must have a minimum biobased content                   percent of the weight (mass) of the total
                                           are dry polymer foams used for non-                       of at least 44 percent, which shall be                 organic carbon in the finished product.
                                           construction purposes, such as cushions                   based on the amount of qualifying                         (c) Preference compliance date. No
                                           for furniture.                                            biobased carbon in the product as a                    later than July 10, 2019, procuring
                                              (b) Minimum biobased content. The                      percent of the weight (mass) of the total              agencies, in accordance with this part,
                                           Federal preferred procurement product                     organic carbon in the finished product.                will give a procurement preference for
                                           must have a minimum biobased content                         (c) Preference compliance date. No                  qualifying biobased Intermediates—
                                           of at least 22 percent, which shall be                    later than July 10, 2019, procuring                    Cleaner Components. By that date,
                                           based on the amount of qualifying                         agencies, in accordance with this part,                Federal agencies responsible for drafting
                                           biobased carbon in the product as a                       will give a procurement preference for                 or reviewing specifications for products
                                           percent of the weight (mass) of the total                 qualifying biobased Intermediates—                     to be procured shall ensure that the
                                           organic carbon in the finished product.                   Lubricant Components. By that date,                    relevant specifications require the use of
                                              (c) Preference compliance date. No                     Federal agencies responsible for drafting              biobased Intermediates—Cleaner
                                           later than July 10, 2019, procuring                       or reviewing specifications for products               Components.
                                           agencies, in accordance with this part,                   to be procured shall ensure that the
                                           will give a procurement preference for                                                                           § 3201.117 Intermediates—Personal Care
                                                                                                     relevant specifications require the use of             Product Components.
                                           qualifying biobased Intermediates—                        biobased Intermediates—Lubricant
                                           Foams. By that date, Federal agencies                                                                              (a) Definition. Intermediates—
                                                                                                     Components.
                                           responsible for drafting or reviewing                                                                            Personal Care Product Components are
                                           specifications for products to be                         § 3201.115       Intermediates—Binders.                ingredients used to formulate finished
                                           procured shall ensure that the relevant                      (a) Definition. Intermediates—Binders               personal care products. Examples of
                                           specifications require the use of                         are materials used to provide                          Intermediates—Personal Care Product
                                           biobased Intermediates—Foams.                             cohesiveness throughout an entire                      Components include surfactants, oils,
                                                                                                     finished product. Binders are generally                humectants, emollients, or emulsifiers.
                                           § 3201.113       Intermediates—Fibers and                                                                           (b) Minimum biobased content. The
                                           Fabrics.                                                  polymers or polymer precursors (such
                                                                                                     as epoxies) and include the polymeric                  Federal preferred procurement product
                                             (a) Definition. Intermediates—Fibers                                                                           must have a minimum biobased content
                                           and Fabrics encompasses plant and                         materials used to formulate coatings,
                                                                                                     adhesives, sealants, and elastomers. The               of at least 62 percent, which shall be
                                           animal fibers, fibers made from plant-                                                                           based on the amount of qualifying
                                           derived polymers that are not yet                         product category does not include
                                                                                                     adhesives and glues that are finished                  biobased carbon in the product as a
                                           formed into more complex products                                                                                percent of the weight (mass) of the total
                                           such as carpet or fabrics, fabrics made                   products used to attach the surfaces of
                                                                                                     two or more distinct and separate                      organic carbon in the finished product.
                                           from natural fibers, fabrics made from                                                                              (c) Preference compliance date. No
                                           synthetic fibers, or fabrics made from a                  components to one another.
                                                                                                                                                            later than July 10, 2019, procuring
                                           blend of the two. These materials are                        (b) Minimum biobased content. The
                                                                                                                                                            agencies, in accordance with this part,
                                           used to manufacture finished products                     Federal preferred procurement product
                                                                                                                                                            will give a procurement preference for
                                           such as clothing, upholstery, or drapes.                  must have a minimum biobased content
                                                                                                                                                            qualifying biobased Intermediates—
                                              (b) Minimum biobased content. The                      of at least 47 percent, which shall be
                                                                                                                                                            Personal Care Product Components. By
                                           Federal preferred procurement product                     based on the amount of qualifying
                                                                                                                                                            that date, Federal agencies responsible
                                           must have a minimum biobased content                      biobased carbon in the product as a
                                                                                                                                                            for drafting or reviewing specifications
                                           of at least 25 percent, which shall be                    percent of the weight (mass) of the total
                                                                                                                                                            for products to be procured shall ensure
                                           based on the amount of qualifying                         organic carbon in the finished product.
                                                                                                                                                            that the relevant specifications require
                                           biobased carbon in the product as a                          (c) Preference compliance date. No                  the use of biobased Intermediates—
                                           percent of the weight (mass) of the total                 later than July 10, 2019, procuring                    Personal Care Product Components.
                                           organic carbon in the finished product.                   agencies, in accordance with this part,
                                              (c) Preference compliance date. No                     will give a procurement preference for                 § 3201.118       Intermediates—Oils, Fats, and
                                           later than July 10, 2019, procuring                       qualifying biobased Intermediates—                     Waxes.
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                                           agencies, in accordance with this part,                   Binders. By that date, Federal agencies                  (a) Definition. Intermediates—Oils,
                                           will give a procurement preference for                    responsible for drafting or reviewing                  Fats, and Waxes include raw or
                                           qualifying biobased Intermediates—                        specifications for products to be                      modified fats and oils derived from
                                           Fibers and Fabrics. By that date, Federal                 procured shall ensure that the relevant                plants or animals.
                                           agencies responsible for drafting or                      specifications require the use of                        (b) Minimum biobased content. The
                                           reviewing specifications for products to                  biobased Intermediates—Binders.                        Federal preferred procurement product


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                                           31850                Federal Register / Vol. 83, No. 132 / Tuesday, July 10, 2018 / Rules and Regulations

                                           must have a minimum biobased content                      DEPARTMENT OF TRANSPORTATION                          FAA, Policy and Innovation Division,
                                           of at least 65 percent, which shall be                                                                          901 Locust, Kansas City, Missouri
                                           based on the amount of qualifying                         Federal Aviation Administration                       64106. For information on the
                                           biobased carbon in the product as a                                                                             availability of this material at the FAA,
                                           percent of the weight (mass) of the total                 14 CFR Part 39                                        call (816) 329–4148. It is also available
                                           organic carbon in the finished product.                   [Docket No. FAA–2018–0606; Product                    on the internet at http://
                                                                                                     Identifier 2018–CE–018–AD; Amendment                  www.regulations.gov by searching for
                                              (c) Preference compliance date. No
                                                                                                     39–19321; AD 2018–14–01]                              and locating Docket No. FAA–2018–
                                           later than July 10, 2019, procuring                                                                             0606.
                                           agencies, in accordance with this part,                   RIN 2120–AA64
                                           will give a procurement preference for                                                                          Examining the AD Docket
                                           qualifying biobased Intermediates—                        Airworthiness Directives; Piper
                                                                                                                                                              You may examine the AD docket on
                                           Oils, Fats, and Waxes. By that date,                      Aircraft, Inc.
                                                                                                                                                           the internet at http://
                                           Federal agencies responsible for drafting                 AGENCY:  Federal Aviation                             www.regulations.gov by searching for
                                           or reviewing specifications for products                  Administration (FAA), DOT.                            and locating Docket No. FAA–2018–
                                           to be procured shall ensure that the                      ACTION: Final rule; request for                       0606; or in person at Docket Operations
                                           relevant specifications require the use of                comments.                                             between 9 a.m. and 5 p.m., Monday
                                           biobased Intermediates—Oils, Fats, and                                                                          through Friday, except Federal holidays.
                                           Waxes.                                                    SUMMARY:    We are adopting a new                     The AD docket contains this final rule,
                                                                                                     airworthiness directive (AD) for certain              the regulatory evaluation, any
                                           § 3201.119       Intermediates—Rubber                     Piper Aircraft, Inc. (Piper) Models PA–               comments received, and other
                                           Materials.                                                46–600TP (M600) airplanes. This AD                    information. The street address for
                                             (a) Definition. Intermediates—Rubber                    requires inserting temporary airspeed                 Docket Operations (phone: 800–647–
                                           Materials are used in finished products                   limitations into the pilot’s operating                5527) is listed above. Comments will be
                                           such as rubber gloves, vehicle tires,                     handbook, installing a temporary                      available in the AD docket shortly after
                                           footwear, sports apparel and equipment,                   placard, inspecting rivets on the cockpit             receipt.
                                           bedding and pillow foams, tubing,                         canopy above the left and right cockpit               FOR FURTHER INFORMATION CONTACT: Dan
                                           catheters, gasketing, or cosmetic                         side windows, and installing a repair kit             McCully, Aerospace Engineer, FAA,
                                                                                                     based on the findings of the rivet                    Atlanta ACO Branch, 1701 Columbia
                                           adhesives and bases.
                                                                                                     inspection. This AD was prompted by a                 Avenue, College Park, Georgia 30337;
                                              (b) Minimum biobased content. The                      report of undersized fasteners installed              telephone: (404) 474–5548; fax: (404)
                                           Federal preferred procurement product                     during manufacturing. We are issuing                  474–5606; email: william.mccully@
                                           must have a minimum biobased content                      this AD to address the unsafe condition               faa.gov.
                                           of at least 96 percent, which shall be                    on these products.
                                                                                                                                                           SUPPLEMENTARY INFORMATION:
                                           based on the amount of qualifying                         DATES: This AD is effective July 25,
                                           biobased carbon in the product as a                       2018.                                                 Discussion
                                           percent of the weight (mass) of the total                   The Director of the Federal Register                   We received a report from Piper that
                                           organic carbon in the finished product.                   approved the incorporation by reference               some rivets installed through the
                                              (c) Preference compliance date. No                     of a certain publication listed in this AD            fuselage skin at the cockpit area during
                                           later than July 10, 2019, procuring                       as of July 25, 2018.                                  manufacture are below the minimum
                                           agencies, in accordance with this part,                     We must receive comments on this                    required strength on certain Model PA–
                                           will give a procurement preference for                    AD by August 24, 2018.                                46–600TP (M600) airplanes. This
                                           qualifying biobased Intermediates—                        ADDRESSES: You may send comments,                     condition, if not corrected, could result
                                           Rubber Materials. By that date, Federal                   using the procedures found in 14 CFR                  in failure of the skin joint resulting in
                                           agencies responsible for drafting or                      11.43 and 11.45, by any of the following              loss of pressurization or fuselage
                                           reviewing specifications for products to                  methods:                                              structural failure. We are issuing this
                                           be procured shall ensure that the                           • Federal eRulemaking Portal: Go to                 AD to correct the unsafe condition on
                                           relevant specifications require the use of                http://www.regulations.gov. Follow the                these products.
                                           biobased Intermediates—Rubber                             instructions for submitting comments.
                                                                                                       • Fax: 202–493–2251.                                Related Service Information Under 1
                                           Materials.                                                                                                      CFR Part 51
                                                                                                       • Mail: U.S. Department of
                                           Donald K. Bice,                                           Transportation, Docket Operations, M–                    We reviewed Piper Aircraft, Inc.
                                           Deputy Assistant Secretary For                            30, West Building Ground Floor, Room                  Service Bulletin No. 1318B, dated June
                                           Administration, U.S. Department of                        W12–140, 1200 New Jersey Avenue SE,                   7, 2018. The service bulletin describes
                                           Agriculture.                                              Washington, DC 20590.                                 procedures for incorporating temporary
                                           [FR Doc. 2018–14594 Filed 7–9–18; 8:45 am]                  • Hand Delivery: U.S. Department of                 airspeed limitations into the pilot’s
                                           BILLING CODE 3410–TX–P
                                                                                                     Transportation, Docket Operations, M–                 operating handbook (POH) and
                                                                                                     30, West Building Ground Floor, Room                  fabricating and installing an airspeed
                                                                                                     W12–140, 1200 New Jersey Avenue SE,                   limitations placard on the airplane until
                                                                                                     Washington, DC 20590, between 9 a.m.                  an inspection is completed and a
                                                                                                     and 5 p.m., Monday through Friday,                    minimum of 16 specific rivets are
                                                                                                     except Federal holidays.                              replaced. The service bulletin also
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                                                                                                       For service information identified in               describes procedures for the inspection
                                                                                                     this final rule, contact Piper Aircraft,              of the rivets on the cockpit canopy
                                                                                                     Inc., 2926 Piper Drive, Vero Beach,                   above the left and right cockpit side
                                                                                                     Florida 32960; telephone: (772) 567–                  window and the replacement of the
                                                                                                     4361; internet: www.piper.com. You                    rivets. This service information is
                                                                                                     may view this service information at the              reasonably available because the


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Document Created: 2018-11-06 10:18:22
Document Modified: 2018-11-06 10:18:22
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionRules and Regulations
ActionFinal rule.
DatesThis rule is effective August 9, 2018.
ContactKaren Zhang, USDA, Office of Procurement and Property Management, 1400 Independence Ave. SW, Washington, DC 20250; email: [email protected]; phone (202) 401-4747. Information regarding the Federal preferred procurement program (one part of the BioPreferred Program) is available on the internet at http://www.biopreferred.gov.
FR Citation83 FR 31841 
RIN Number0599-AA27
CFR AssociatedBiobased Products and Procurement

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