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USDA/FS

RIN: 0596-AC79

Publication ID: Spring 2008

Title: ●Market-Related Contract Term Additions Regulations
Abstract: The Market-Related Contract Term Additions (MRCTA)regulations (36 CFR 223.52) were first adopted in 1990 to prevent widespread contract defaults by providing additional contract time when adverse market conditions resulted in a drastic reduction in wood product prices. By providing additional contract time purchasers can shift operations from high priced sales purchased when markets were up to lower priced sales purchased when the market is down. As markets recover, purchasers can go back to their higher priced sales as they become economical to operate again. The MRCTA regulations limit the total additional contract time to the lesser of twice the original contract length or 3 years and can't result in the total contract length exceeding 10 years. The 10 year limit for total contract length is set in NFMA. The other limits were established in the MRCTA regulations as an estimate of how much time was needed for markets to recover enough for operations to resume based on historical trends. However, the softwood lumber index peaked in August 2004 and has been declining since then. During this sustained decline it has triggered for 10 consecutive quarters beginning with September 2005 and it is expected to continue triggering through much if not all of 2008. Until the current event MRCTA has been working as intended for sales of softwood lumber. This sustained decline exceeds any prior declines since the MRCTA regulations were adopted, and with no end in sight the 3 year limit on MRCTA needs to be extended to avert widespread defaults. To provide the immediate relief needed to avert potential widespread defaults, the proposed changes in the MRCTA regulations will be implemented as an interim final rule and comments are requested.
Agency: Department of Agriculture(USDA)	Priority: Substantive, Nonsignificant
RIN Status: First time published in the Unified Agenda	Agenda Stage of Rulemaking: Final Rule Stage
Major: Undetermined	Unfunded Mandates: Undetermined
CFR Citation: 36 CFR 223.52
Legal Authority: Not Yet Determined

Legal Deadline: None

Timetable:

Action	Date	FR Cite
Interim Final Rule	05/00/2008

Regulatory Flexibility Analysis Required: Undetermined	Government Levels Affected: Undetermined
Federalism: Undetermined
Included in the Regulatory Plan: No
RIN Data Printed in the FR: No
Agency Contact: Lorrie Parker Regulatory Analyst Department of Agriculture Forest Service ATTN: ORMS, D&R Branch, 1400 Independence Avenue SW, Washington, DC 20250-0003 Phone:202 205-6560 Fax:202 205-3610 Email: lsparker@fs.fed.us