USDA terminates paper packaging promotion program rule

Content

ACTION:

Final rule.

SUMMARY:

This final rule terminates the Federal research and promotion program for paper and paper-based packaging and the rules and
regulations issued thereunder. This action is necessary because termination of the program was favored by a majority of manufacturers
and importers voting in the referendum who also represent a majority of the volume of paper and paper-based packaging represented
in the referendum. This rulemaking also removes the Paper and Paper-Based Packaging Promotion, Research and Information Order
from the Code of Federal Regulations.

DATES:

This final rule is effective March 9, 2026, without further action or notice.

FOR FURTHER INFORMATION CONTACT:

George Webster, Marketing Specialist, or Alexandra Caryl, Chief, Mid-Atlantic Region Branch, Market Development Division,
Specialty Crops Program, AMS, USDA; telephone: (202) 720-8085; or email: George.Webster@usda.gov or Alexandra.Caryl@usda.gov.

SUPPLEMENTARY INFORMATION:

This final rule affecting 7 CFR part 1222 is authorized under the Commodity Promotion, Research, and Information Act of 1996
(Act) (7 U.S.C. 7411-7425). The Paper and Paper-Based Packaging Promotion, Research and Information Order, hereinafter referred
to as the “Order”, is codified at 7 CFR part 1222.

Prior documents in this proceeding: Continuance Referendum and Moratorium on Assessment Collection, June 3, 2025 (90 FR 23421);
Paper and Paper-Based Packaging Promotion, Research and Information Order, January 22, 2014 (79 FR 3696); and Referendum Procedures,
September 16, 2013 (78 FR 56817).

Executive Order 12866

This action is exempt from the Office of Management and Budget (OMB) review process required by Executive Order 12866. This
rule terminates an existing research and promotion program, the Paper and Paper-Based Packaging Promotion, Research and Information
Order, consistent with the latest referendum results. Additionally, this action is exempt from the requirements of Executive
Order 14192, “Unleashing Prosperity Through Deregulation,” pursuant to section 5(c).

Executive Order 13175

This action was reviewed in accordance with the requirements of Executive Order 13175, “Consultation and Coordination with
Indian Tribal Governments.” AMS has assessed the impact of this final rule on Indian tribes and determined that this rule
would not have tribal implications that require consultation under Executive Order 13175. AMS hosts a quarterly teleconference
with tribal leaders where matters of mutual interest regarding the marketing of agricultural products are discussed. Information
about the changes to the regulations will be shared during an upcoming quarterly call. AMS will continue to work with the
USDA Office of Tribal Relations to ensure meaningful consultation is provided as needed with regard to the termination of
the Order.

Executive Order 12988

This rule was reviewed under Executive Order 12988, “Civil Justice Reform.” It is not intended to have retroactive effect.
Section 524 of the Commodity Promotion, Research, and Information Act of 1996 (the Act) (7 U.S.C. 7423) provides that it shall
not affect or preempt any other Federal or State law authorizing promotion or research relating to an agricultural commodity.

Petition and Review of Orders

Under section 519 of the Act (7 U.S.C. 7418), a person subject to an order may file a written petition with USDA stating an
order, any provision of an order, or any obligation imposed in connection with an order, is not established in accordance
with the law, and request a modification of an order or an exemption from an order. Any petition filed challenging an order,
any provision of an order, or any obligation imposed in connection with an order, shall be filed within two years after the
effective date of an order, provision, or obligation subject to challenge in the petition. The petitioner will have the opportunity
for a hearing on the petition. Thereafter, USDA will issue a ruling on the petition. The Act provides that the district court
of the United States for any district in which the petitioner resides or conducts business shall have the jurisdiction to
review a final ruling on the petition, if the petitioner files a complaint for that purpose not later than 20 days after the
date of the entry of USDA's final ruling.

Background

This final rule terminates the Order as prescribed in 7 CFR 1222.82 and section 522 of the Act. The Act authorizes national
promotion, research, and information programs for agricultural commodities. In accordance with the Act, at the request of
the paper and paper-based packaging industry, USDA developed and implemented the Order, which became effective on January
23, 2014.

The Order covered persons who manufactured or imported 100,000 short tons or more of paper and paper-based packaging in a
year.

Section 518(c) of the Act (7 U.S.C. 7417(c)), and 7 CFR 1222.81(b) provide the Secretary of Agriculture (Secretary) shall
conduct subsequent referenda not later than every seven years, at the request of 10 percent or more of eligible voters, or
at the request of the Paper and Packaging Board (Board), as established by the Order. Section 518(d) of the Act (7 U.S.C.
7417(d)), and 7 CFR 1222.81(b)(5) also allow for a referendum whenever the Secretary deems it necessary. The Order shall continue
if it is favored by a majority of manufacturers and importers voting in the referendum who also represent a majority of the
volume represented in the referendum and who, during a representative period, have been engaged in the manufacturing or importation
of paper and paper-based packaging, as long as the Secretary finds that the Order tends to effectuate the purposes of the
Act.

On January 28, 2025, USDA received a petition requesting a referendum from more than the required 10 percent of eligible voters.
As such, a referendum was held from July 14 through July 25, 2025. The representative period for establishing voter eligibility
was January 1, 2024, through December 31, 2024. Persons who manufactured or imported 100,000 short tons or more of paper and
paper-based packaging during the representative period and were subject to assessment during that time were eligible to vote.
Notice of the referendum was published in the
Federal Register
on June 3, 2025 (90 FR 23421). Termination of the program was favored by 73.53 percent of eligible manufacturers and importers,
representing 90.39 percent of the volume represented in the referendum.

In accordance with 7 CFR 1222.83, the USDA appointed two members of the Board to serve as trustees for the purpose of liquidating
affairs.

Regulatory Flexibility Analysis

In accordance with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS) is required
to examine the impact of the action on small entities. Accordingly, AMS has considered the economic impact of this action
on such entities. The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to the actions so
that small businesses will not be disproportionately burdened.

The Small Business Administration (SBA) defines, in 13 CFR part 121, small firms which perform “Corrugated and Solid Fiber
Box Manufacturing” activities (1) as those employing no more than 1,250 employees. This definition of a small business applies to the program's domestic manufacturers.
According to the U.S. Census Bureau's 2022 Economic Census, there were a total of 594 paper and packaging firms operating
in the U.S. in 2022. Of these, 20 firms, or about 3 percent, employed 500 employees or more. This means that at least 97 percent
of paper and packaging domestic manufacturers would be considered small businesses per the SBA definition.

While employment data for domestic manufacturers is available for this analysis, AMS is unaware of any such data for importers
of paper and packaging materials. Therefore, the SBA size standard for “Postharvest Crop Activities” (2) of average annual receipts no greater than $34 million was used to classify small importers for the purposes of this RFA.
Based on data from Customs and Border Protection, there were 38 of 7,023 importers of paper and packaging materials whose
2022-2024 average annual receipts exceeded $34 million. This means that more than 99 percent of importers would be considered
small businesses per the SBA definition. This action would not disproportionately burden small domestic manufacturers and
importers of paper and packaging materials.

According to Board data, in 2024 there were 46 eligible manufacturers and importers who paid approximately $21.2 million in
assessments. When the Order was published in the
Federal Register
on January 22, 2014, USDA stated an anticipated $25 million of assessments would be collected from about 70 eligible entities.
The assessment rate is currently 35 cents per short ton or its equivalent of paper and paper-based products. This is the same
rate that was set when the program first started. USDA issued a notice on June 3, 2025 (90 FR 23421) establishing a moratorium
on the collection of assessments with immediate effect.

Termination of the research and promotion program and its Order should reduce costs for manufacturers and importers. As with
all research and promotion program programs, reports and forms are periodically reviewed to reduce information requirements
and duplication by industry and public sector agencies.

AMS is committed to complying with the E-Government Act, to promote the use of the internet and other information technologies
to provide increased opportunities for citizen access to Government information and services, and for other purposes.

AMS has not identified any relevant Federal rules that duplicate, overlap, or conflict with this final rule.

AMS is issuing this rule as a final rule. Although the Administrative Procedure Act (APA) generally requires notice and comment
rulemaking, section 553 of the APA provides an exception when the agency, for good cause, finds that notice and public procedure
are “impracticable, unnecessary, or contrary to the public interest.” AMS concludes that general notice and comment is unnecessary
here because affected stakeholders decisively voted to terminate the program. The purpose of this final rule is to carry out
the decision made by eligible manufacturers and importers of paper and paper-based packaging, which the Secretary has determined
would tend to effectuate the purposes of the Act.

Based on the foregoing, and pursuant to section 522 of the Act and 7 CFR 1222.83, it is hereby found that the Order, and the
Board effectuated by the Order, are terminated.

It is also found and determined upon good cause that it is unnecessary and contrary to the public interest to give preliminary
notice or to engage in further public procedure prior to putting this action into effect. Additionally, good cause exists
for not postponing the effective date of this action until 30 days after publication in the
Federal Register
because this action relieves restrictions on manufacturers and importers.

List of Subjects in 7 CFR Part 1222

Administrative practice and procedure, advertising, consumer information, marketing agreements, paper promotion, reporting
and recordkeeping requirements.

PART 1222—[REMOVED]

Regulatory Text For the reasons set forth in the preamble, under the authority of 7 U.S.C. 7421, 7 CFR part 1222 is removed.

Erin Morris, Administrator, Agricultural Marketing Service. [FR Doc. 2026-04570 Filed 3-6-26; 8:45 am] BILLING CODE 3410-02-P

Footnotes

(1) North American Industry Classification System (NAICS) Code 322211.

(2) NAICS Code 115114.

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