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Rule

Cotton Board Rules and Regulations: Adjusting Supplemental Assessment on Imports (2008 Amendments)

Document Details

Information about this document as published in the Federal Register.

Published Document

This document has been published in the Federal Register. Use the PDF linked in the document sidebar for the official electronic format.

Start Preamble Start Printed Page 69521

AGENCY:

Agricultural Marketing Service, USDA.

ACTION:

Final rule.

SUMMARY:

The Agricultural Marketing Service (AMS) is amending the Cotton Board Rules and Regulations by increasing the value assigned to imported cotton for calculating supplemental assessments collected for use by the Cotton Research and Promotion Program. An amendment is required to adjust the assessments collected on imported cotton and the cotton content of imported products to be the same as those paid on domestically produced cotton. In addition, AMS is removing Harmonized Tariff Schedule (HTS) numbers that were absorbed into other HTS categories since the last assessment adjustment.

DATES:

Effective Date: December 19, 2008.

Start Further Info

FOR FURTHER INFORMATION CONTACT:

Shethir M. Riva, Chief, Research and Promotion Staff, Cotton and Tobacco Programs, AMS, USDA, Stop 0224, 1400 Independence Ave., SW., Room 2639-S, Washington, DC 20250-0224, telephone (202) 720-6603, facsimile (202) 690-1718, or e-mail at Shethir.Riva@usda.gov.

End Further Info End Preamble Start Supplemental Information

SUPPLEMENTARY INFORMATION:

Executive Order 12866

This rule has been determined to be not significant for the purpose of Executive Order 12866; and therefore, has not been reviewed by the Office of Management and Budget (OMB).

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 proposed 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 (7 U.S.C. 2101-2118) (“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 the entry of ruling.

Background

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 (Pub. L. 101-624) 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.

This rule increases the value assigned to imported cotton in the Cotton Board Rules and Regulations (7 CFR 1205.510(b)(2)). The total value is determined by a two-part assessment. The first part of the assessment is levied on the weight of cotton produced or imported at a rate of $1 per bale of cotton, which is equivalent to 500 pounds, or $1 per 226.8 kilograms of cotton. The second value is used to calculate the supplemental assessments on imported cotton and the cotton content of imported products. Supplemental assessments are levied at a rate of five-tenths of one percent of the value of domestically produced cotton, imported cotton, and the cotton content of imported products. The supplement assessment is combined with the per bale equivalent to determine the total value and assessment of the imported cotton or cotton-containing products.

The Cotton Research and Promotion Rules and Regulations provide for assigning the calendar year weighted average price received by U.S. farmers for Upland cotton to represent the value of imported cotton. This is so that the assessment on domestically produced cotton and the assessment on imported cotton and the cotton content of imported products is the same. The source for the average price statistic is Agricultural Prices, a publication of the National Agricultural Statistics Service (NASS) of the U.S. Department of Agriculture (USDA). Use of the weighted average price figure in the calculation of supplemental assessments on imported cotton and the cotton content of imported products will yield an assessment that is the same as assessments paid on domestically produced cotton.

The current value of imported cotton as published in the Federal Register (68 FR 27898) for the purpose of calculating supplemental assessments on imported cotton is $0.8267 cents per kilogram. Using the Average Weighted Priced received by U.S. farmers for Upland cotton for the calendar year 2007, the new value of imported cotton is $0.9874 cents per kilogram or $0.1607 cents per kilogram more than the previous value.

An example of the complete assessment formula and how the figures are obtained is as follows:

One bale is equal to 500 pounds.

One kilogram equals 2.2046 pounds.

One pound equals 0.453597 kilograms.

One Dollar Per Bale Assessment Converted to Kilograms

A 500-pound bale equals 226.8 kg. (500 × .453597).

$1 per bale assessment equals $0.002000 per pound (1/500) or $0.004409 per kg. (1/226.8). Start Printed Page 69522

Supplemental Assessment of 5/10 of One Percent of the Value of the Cotton Converted to Kilograms

The 2007 calendar year weighted average price received by producers for Upland cotton is $0.496 per pound or $1.093 per kg. (0.496 × 2.2046).

Five tenths of one percent of the average price in kg. equals $0.005465 per kg. (1.093 × .005).

Total Assessment

The total assessment per kilogram of raw cotton is obtained by adding the $1 per bale equivalent assessment of $0.004409 per kg. and the supplemental assessment $0.005465 per kg. which equals $0.009874 per kg.

The current assessment on imported cotton is $0.008267 per kilogram of imported cotton. The amended assessment is $0.009874, an increase of $0.001607 per kilogram. This increase reflects the increase in the Average Weighted Price of Upland Cotton Received by U.S. Farmers during the period January through December 2007.

Since the value of cotton is the basis of the supplemental assessment calculation and the figures shown in the right hand column of the Import Assessment Table 1205.510(b)(3) are a result of such a calculation, the figures in this table have been revised. These figures indicate the total assessment per kilogram due for each HTS numbers subject to assessment.

The U.S. Customs and Border Protection informed USDA that several numbers listed in the Import Assessment Table are no longer used or have been combined with other HTS numbers. The HTS numbers that have been removed from the Import Assessment Table are:

5208530000610910000562034240056203424050620462404062052020306206303020
5210120000610910000962034240106203424055620462404562052020356206303030
5211210025611020206562034240156203424060620462405062052020466206303040
5211210035611020207562034240206204624005620462405562052020506206303050
5211210050611120604062034240256204624010620462406062052020606206303060
5211290090611130504062034240306204624020620462406562052020656210405020
5604900000611519801062034240356204624025620520201562052020706303110000
570299101061159290006203424040620462403062052020206205202075
570299109061159360206203424045620462403562052020256206303010

A proposed rule was published on July 24, 2008, with a comment period of July 24 through September 22, 2008 (73 FR 43166). AMS received one comment from a cotton producer association. The comment indicated support of the proposed amendment stating that it would increase the value assigned to imported cotton, and that it is important that domestically produced and imported cotton be assessed equally. The comment also indicated support for removing the HTS numbers that were absorbed into the other HTS categories since the last assessment adjustment.

Regulatory Flexibility Act and Paperwork Reduction Act

In accordance with the Regulatory Flexibility Act (RFA) [5 U.S.C. 601-612], AMS has examined the economic impact of this rule on small entities. The purpose of t he RFA is to fit regulatory actions to the scale of businesses subject to such action so that small businesses will not be unduly or disproportionately burdened. The Small Business Administration defines, in 13 CFR Part 121, small agricultural producers as those having annual receipts of no more than $750,000 and small agricultural service firms (importers) as having receipts of no more than $6,500,000. An estimated 13,000 importers are subject to the rules and regulations issued pursuant to the Cotton Research and Promotion Order. Most are considered small entities as defined by the Small Business Administration.

This rule would only affect importers of cotton and cotton-containing products and would raise the assessments paid by the importers under the Cotton Research and Promotion Order. The current assessment on imported cotton is $0.008267 per kilogram of imported cotton. The amended assessment is $0.009874, an increase of $0.001607, which was calculated based on the 12-month average of monthly weighted average prices received by U.S. cotton farmers. The calculation, and, thus the increase, is dictated by the Cotton Research and Promotion Rules and Regulations, 7 CFR 1205.510. Section 1205.510, “Levy of assessments”, indicates that “the rate of the supplemental assessment on imported cotton will be the same as that levied on cotton produced within the United States.” In addition, section 1205.510 provides that the 12-month average of monthly weighted average prices received by U.S. farmers will be used as the value of imported cotton for the purpose of levying the supplemental assessment on imported cotton.

Under the Cotton Research and Promotion Program, assessments are used by the Cotton Board to finance research and promotion programs designed to increase consumer demand for Upland cotton in the United States and international markets. In 2007, producer assessments totaled $44 million and importer assessments totaled $30.4 million. According to the Cotton Board, should the volume of cotton products imported into the U.S. remain at the same level in 2007, one could expect the increased assessment to generate approximately $5.9 million.

Importers with line items appearing on U.S. Customs and Border Protection documentation with value of the cotton contained therein results of an assessment of two dollars ($2.00) or less will not be subject to assessments. In addition, imported cotton and products may be exempt from assessment if the cotton content of products is U.S. produced or cotton other than Upland. Importers who import only products that are eligible to be labeled as 100 percent organic under the National Organic Program (7 CFR Part 205) and who are not a split operation, are exempt from payment of assessments.

AMS previously proposed to amend the Cotton Board Rules and Regulations, specifically to adjust the total rate of assessment per kilogram of imported cotton collected under the Cotton Research and Promotion Program, on January 12, 2005 (70 FR 2034). This proposed rule resulted from years of consultation with the industry. In the proposed rule, the total rate of assessment would have been calculated by adding together the $1 per bale equivalent assessment and the supplemental assessment, and adjusting the sum to account for the estimated amount of U.S. cotton contained in the imported textile products by the estimated average amount of U.S. cotton contained therein. On November 20,2006, however, AMS withdrew the proposed rule (71 FR 67072) based on a stakeholder comment questioning the data and the calculation of the proposed importer supplemental assessment. After receiving the comment and other available information, the agency did Start Printed Page 69523not believe that the proposed rule would achieve its intended objectives of effectiveness and efficiency. While AMS continues to evaluate this issue and garner additional stakeholders' input and economic data, AMS is amending the Cotton Board Rules and Regulations to adjust the importer supplemental assessment to be the same as that levied on domestic cotton producers.

The rule does not impose additional recordkeeping requirements on importers.

There are no Federal rules that duplicate, overlap, or conflict with this rule.

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. Chapter 35) the information collection requirements contained in the regulation to be amended have been previously approved by OMB and were assigned control number 0581-0093. This rule does not result in a change to the information collection and recordkeeping requirements previously approved.

Start List of Subjects

List of Subjects in 7 CFR Part 1205

End List of Subjects Start Amendment Part

For the reasons set forth in the preamble

End Amendment Part Start Part

PART 1205—COTTON RESEARCH AND PROMOTION

End Part Start Amendment Part

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

End Amendment Part Start Authority

Authority: 7 U.S.C. 2101-2118 and 7 U.S.C. 7401.

End AuthorityStart Amendment Part

2. In § 1205.510, paragraph (b)(2) and the table in paragraph (b)(3)(ii) are revised to read as follows:

End Amendment Part
Levy of assessments.
* * * * *

(b) * * *

(2) The 12-month average of monthly weighted average prices received by U.S. farmers will be calculated annually. Such weighted average will be used as the value of imported cotton for the purpose of levying the supplemental assessment on imported cotton and will be expressed in kilograms. The value of imported cotton for the purpose of levying this supplemental assessment is $0.9874 cents per kilogram.

(3) * * *

(ii) * * *

Import Assessment Table

[Raw cotton fiber]

HTS No.Conv. fact.Cents/kg.
520100050000.9874
520100120000.9874
520100140000.9874
520100180000.9874
520100220000.9874
520100240000.9874
520100280000.9874
520100340000.9874
520100380000.9874
52041100001.11111.0971
52042000001.11111.0971
52051110001.11111.0971
52051120001.11111.0971
52051210001.11111.0971
52051220001.11111.0971
52051310001.11111.0971
52051320001.11111.0971
52051410001.11111.0971
52052100201.11111.0971
52052100901.11111.0971
52052200201.11111.0971
52052200901.11111.0971
52052300201.11111.0971
52052300901.11111.0971
52052400201.11111.0971
52052400901.11111.0971
52053100001.11111.0971
52053200001.11111.0971
52053300001.11111.0971
52053400001.11111.0971
52054100201.11111.0971
52054100901.11111.0971
52054200201.11111.0971
52054200901.11111.0971
52054400201.11111.0971
52054400901.11111.0971
52061200000.55560.5486
52061300000.55560.5486
52061400000.55560.5486
52062200000.55560.5486
52062300000.55560.5486
52062400000.55560.5486
52063100000.55560.5486
52071000001.11111.0971
52079000000.55560.5486
52081120201.14551.1311
52081120401.14551.1311
52081120901.14551.1311
52081140201.14551.1311
52081140601.14551.1311
52081140901.14551.1311
52081180901.14551.1311
52081240201.14551.1311
52081240401.14551.1311
52081240901.14551.1311
52081260201.14551.1311
52081260401.14551.1311
52081260601.14551.1311
52081260901.14551.1311
52081280201.14551.1311
52081280901.14551.1311
52081300001.14551.1311
52081920201.14551.1311
52081920901.14551.1311
52081940201.14551.1311
52081940901.14551.1311
52081960201.14551.1311
52081960901.14551.1311
52082240401.14551.1311
52082240901.14551.1311
52082260201.14551.1311
52082260601.14551.1311
52082280201.14551.1311
52082300001.14551.1311
52082920201.14551.1311
52082920901.14551.1311
52082940901.14551.1311
52082960901.14551.1311
52082980201.14551.1311
52083120001.14551.1311
52083210001.14551.1311
52083230201.14551.1311
52083230401.14551.1311
52083230901.14551.1311
52083240201.14551.1311
52083240401.14551.1311
52083250201.14551.1311
52083300001.14551.1311
52083920201.14551.1311
52083920901.14551.1311
52083940901.14551.1311
52083960901.14551.1311
52083980201.14551.1311
52084120001.14551.1311
52084160001.14551.1311
52084180001.14551.1311
52084210001.14551.1311
52084230001.14551.1311
52084240001.14551.1311
52084250001.14551.1311
52084300001.14551.1311
52084920001.14551.1311
52084940201.14551.1311
52084940901.14551.1311
52084960101.14551.1311
52084960901.14551.1311
52084980901.14551.1311
52085120001.14551.1311
52085160601.14551.1311
52085180901.14551.1311
52085230201.14551.1311
52085230451.14551.1311
52085230901.14551.1311
52085240201.14551.1311
52085240451.14551.1311
52085240651.14551.1311
52085250201.14551.1311
52085920251.14551.1311
52085920951.14551.1311
52085940901.14551.1311
52085960901.14551.1311
52091100201.14551.1311
52091100351.14551.1311
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52091200201.14551.1311
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52092200201.14551.1311
52092200401.14551.1311
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52092900901.14551.1311
52093130001.14551.1311
52093160201.14551.1311
52093160351.14551.1311
52093160501.14551.1311
52093160901.14551.1311
Start Printed Page 69524
52093200201.14551.1311
52093200401.14551.1311
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52093900401.14551.1311
52093900601.14551.1311
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52093900901.14551.1311
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52094200201.03091.0179
52094200401.03091.0179
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52115900250.68730.6786
52121460900.91640.9049
52121560200.91640.9049
52122160900.91640.9049
55095300300.55560.5486
55095300600.55560.5486
55131100200.40090.3958
55131100400.40090.3958
55131100600.40090.3958
55131100900.40090.3958
55131200000.40090.3958
55131300200.40090.3958
55132100200.40090.3958
55133100000.40090.3958
55141200200.40090.3958
55164200600.40090.3958
55169100600.40090.3958
55169300900.40090.3958
56012100101.14551.1311
56012100901.14551.1311
56013000001.14551.1311
56021090900.57270.5655
56022900001.14551.1311
56029060000.5260.5194
56079090000.88890.8777
56089010001.11111.0971
56089023001.11111.0971
56090010001.11111.0971
56090040000.55560.5486
57011040000.05560.0549
57011090000.11110.1097
57019010101.04441.0312
57021090201.11.0861
57023120000.07780.0768
57024110000.07220.0713
57024120000.07780.0768
57024210000.07780.0768
57029130000.08890.0878
57039000000.44890.4432
58012100001.14551.1311
58012300001.14551.1311
58012500101.14551.1311
58012500201.14551.1311
58012600201.14551.1311
58021900001.14551.1311
58023000300.57270.5655
58042910001.14551.1311
58062000100.35340.3489
58062000900.35340.3489
58063100001.14551.1311
58064000000.42960.4242
58081070000.57270.5655
58089000100.57270.5655
58110020001.14551.1311
60011060001.14551.1311
60012100000.85910.8483
60012200000.28640.2828
60019100100.85910.8483
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60019200200.28640.2828
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60019200400.28640.2828
60032030000.86810.8572
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60052100000.86810.8572
60052200000.86810.8572
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60062110001.15741.1428
60062210001.15741.1428
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60062410001.15741.1428
60063100400.11570.1142
60063100800.11570.1142
60063200400.11570.1142
60063200800.11570.1142
60063300400.11570.1142
60063300800.11570.1142
60063400400.11570.1142
60063400800.11570.1142
60064100850.11570.1142
60064200850.11570.1142
60064300850.11570.1142
60064400850.11570.1142
61012000101.00940.9967
61012000201.00940.9967
61022000101.00940.9967
61022000201.00940.9967
61034210200.88060.8695
61034210400.88060.8695
61034210500.88060.8695
61034210700.88060.8695
61034315200.25160.2484
61034315400.25160.2484
61034315500.25160.2484
61034315700.25160.2484
61042200400.90020.8889
61042200600.90020.8889
61043200000.92070.9091
61044200100.90020.8889
61044200200.90020.8889
61045200100.93120.9195
61045200200.93120.9195
61046220060.88060.8695
61046220110.88060.8695
61046220160.88060.8695
61046220210.88060.8695
61046220260.88060.8695
61046220280.88060.8695
61046220300.88060.8695
61046220600.88060.8695
61046320060.37740.3726
61046320110.37740.3726
61046320260.37740.3726
61046320280.37740.3726
61046320300.37740.3726
61046320600.37740.3726
61046920300.38580.3809
61051000100.9850.9726
61051000200.9850.9726
61051000300.9850.9726
61052020100.30780.3039
61052020300.30780.3039
61061000100.9850.9726
61061000200.9850.9726
61061000300.9850.9726
61062020100.30780.3039
61062020300.30780.3039
61071100101.13221.1179
61071100201.13221.1179
61071200100.50320.4969
61072100100.88060.8695
61072200150.37740.3726
61072200250.37740.3726
61079100401.25811.2422
61082100101.24451.2288
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61083100101.12011.1060
61083100201.12011.1060
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61099010070.31110.3072
61099010090.31110.3072
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61099010500.31110.3072
61099010600.31110.3072
61099010650.31110.3072
61099010900.31110.3072
61102020051.18371.1688
61102020101.18371.1688
61102020151.18371.1688
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61102020401.15741.1428
61102020451.15741.1428
61109090220.2630.2597
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* * * * *
Start Signature

Dated: November 13, 2008.

James E. Link,

Administrator, Agricultural Marketing Service.

End Signature End Supplemental Information

[FR Doc. E8-27397 Filed 11-18-08; 8:45 am]

BILLING CODE 3410-02-P