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Amendment to Cotton Board Rules and Regulations Regarding Import Assessment Exemptions

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Agricultural Marketing Service, USDA.


Interim final rule with request for comments.


The Agricultural Marketing Service is proposing to amend the regulations regarding import assessment exemptions by adjusting the provisions for automatic assessment exemptions on certain imports of textile and apparel products to reflect additional Harmonized Tariff Schedule (HTS) numbers. The purpose of the proposed changes is to avoid multiple assessment of U.S. produced cotton that has been exported and then imported back into the U.S. in the form of textile and apparel products.


Effective November 28, 2000; comments received by December 27, 2000 will be considered prior to issuance of a final rule.


Interested persons are invited to submit written comments concerning this rule. Comments may be mailed to USDA, AMS, Cotton Program, STOP 0224, 1400 Independence Avenue, SW, Washington, D.C. 20250-0224; fax (202) 690-1718, or E-mail Comments should reference the docket number and the date and page number of this issue of the Federal Register and will be available for public inspection at this address during regular business hours.

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Whitney Rick, Chief, Cotton Research and Promotion Staff: phone (202) 720-6603, facsimile (202) 690-1718, or email

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Executive Order 12866

This proposed rule has been determined to be “non significant” for purposes of Executive Order 12866, and, therefore, has not been reviewed by the Office of Management and Budget.

Executive Order 12988

This proposed rule has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have retroactive effect. This rule would not preempt any state or local laws, regulations, or policies unless they present an irreconcilable conflict with this rule.

The Cotton Research and Promotion Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under Section 12 of the Act, any person subject to an order may file with the Secretary a petition stating that the order, any provision of the plan, or any obligation imposed in connection with the order is not in accordance with law and requesting a modification of the order or to be exempted therefrom. Such person is afforded the opportunity for a hearing on the petition. After the hearing, the Secretary would rule on the petition. The Act provides that the District Court of the United States in any district in which the person is an inhabitant, or has his principal place of business, has jurisdiction to review the Secretary's ruling, provided a complaint is filed within 20 days from the date of entry of ruling.

Regulatory Flexibility Act

Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.), AMS has considered the economic impact of this action on small entities and has determined that its implementation will not have a significant economic impact on a substantial number of small businesses.

There are an estimated 10,000 importers who are presently subject to rules and regulations issued pursuant to the Cotton Research and Promotion Order. This proposed rule would affect importers of cotton and cotton-containing products. The majority of these importers are small businesses under the criteria established by the Small Business Administration. This proposed rule will neither raise nor lower assessments paid by importers subject to the Cotton Research and Promotion Order and therefore presents minimal economic impact. This action will improve the agency's ability to prevent double-assessment of U.S. produced cotton reentering the U.S. in the form of textile and apparel products.

Under these circumstances AMS has determined that this action will not have a significant economic impact on a substantial number of small entities.

Paperwork Reduction

In compliance with Office of Management and Budget (OMB) regulations (5 CFR part 1320) which implement the Paperwork Reduction Act (PRA) (44 U.S.C. 3501 et seq.), the information collection in the regulation to be amended has been previously approved by OMB and was assigned control number 0581-0093.


The Cotton Research and Promotion Act Amendments of 1990 enacted by Congress under Subtitle G of Title XIX of the Food, Agriculture, Conservation and Trade Act of 1990 on November 28, 1990, contained two provisions that authorized changes in the funding procedures for the Cotton Research and Promotion Program.

These provisions are: (1) the assessment of imported cotton and cotton products; and (2) termination of the right of cotton producers to demand a refund of assessments.

An amended Cotton Research and Promotion Order was approved by producers and importers voting in a referendum held July 17-26, 1991. Final implementing rules were published on July 1 and 2, 1992, (57 FR 29181) and (57 FR 29431), respectively.

Section 1205.335(c)(1) of the Cotton Research and Promotion Order provides for exemptions from assessments for certain imported goods when they contain U.S. produced cotton in order to minimize the occurrence of double assessments on U.S. cotton. All U.S. produced cotton is assessed at the time it is first sold. A significant amount of U.S. produced cotton is converted into fabric in the U.S. and then exported. The U.S. cotton containing fabric often returns to the U.S. in the form of apparel and textile articles.

Section 1205.510 (b)(5) of the Cotton Board Rules and Regulations identifies Start Printed Page 70644specific Harmonized Tariff Schedule (HTS) numbers that are exempted to avoid a double assessment of this U.S. produced cotton. Recently, new HTS numbers were established to identify U.S. produced cotton fabrics and/or yarns that are wholly formed and/or cut in the U.S., exported and then imported back into the U.S. in the form of apparel products and/or luggage containing U.S. produced cotton. These HTS numbers need to be exempt to avoid a double assessment of U.S. produced cotton. Section 1205.510(b)(5) needs revision to included ten newly identified HTS numbers; 9819.11.30, 9819.11.60, 9820.11.03, 9820.11.06, 9820.11.09, 9820.11.12, 9820.11.18, 9820.11.21, 9802.00.8044, or 9802.00.8046 (see Presidential Proclamation 7350 of October 2, 2000 at 65 FR 59321, published on October 4, 2000).

Pursuant to 5 U.S.C. 533, it is also found and determined upon good cause that it is impracticable, unnecessary, and contrary to the public interest to give preliminary notice prior to putting this rule into effect and that good cause exist for not postponing the effective date of this rule until thirty-days after publication in the Federal Register because: (1) This rule needs to be effective promptly in order to reflect new HTS numbers that became applicable in October of 2000; (2) this rule will prevent importers of cotton and cotton products from being double assessed on U.S. produced cotton that is exported and then returned to the U.S. in the form of textile and apparel products; and (3) this rule provided a thirty-day comment period, and any comments received will be considered prior to finalization of this rule. For the same reasons, a thirty-day comment period is deemed appropriate.

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List of Subjects in 7 CFR Part 1205

  • Advertising
  • Agricultural research
  • Cotton
  • Marketing agreements
  • Reporting and recordkeeping requirements
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For reasons set forth in the preamble, 7 CFR part 1205 is proposed to be amended as follows:

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1. The authority citation for part 1205 continues to read as follows:

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Authority: 7 U.S.C. 2101-2118.

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2. In § 1205.510, paragraph (b)(5) is revised to read as follows:

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Levy of assessments.
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(b) * * *

(5) Imported textile and apparel articles assembled of components formed from cotton produced in the Unites States and identified by HTS numbers 9819.11.03, 9819.11.06, 9820.11.03, 9820.11.06, 9820.11.09, 9820.11.12, 9820.11.18, 9820.11.21, 9802.00.8015, 9802.00.9000, 9802.00.8044, or 9802.00.8046 shall not subject to assessment.

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Dated: November 20, 2000.

Norma R. McDill,

Acting Deputy Administrator.

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[FR Doc. 00-30139 Filed 11-24-00; 8:45 am]