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Proposed Rule

Cotton Board Rules and Regulations: Adjusting Supplemental Assessment on Imports (2009 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 16331

AGENCY:

Agricultural Marketing Service, USDA.

ACTION:

Proposed rule.

SUMMARY:

The Agricultural Marketing Service (AMS) is proposing to amend 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 proposes to add and change Harmonized Tariff Schedule (HTS) statistical reporting numbers that were amended since the last assessment adjustment.

DATES:

Comments must be received on or before May 11, 2009.

ADDRESSES:

Interested persons are invited to submit written comments concerning this proposed rule to Shethir M. Riva, Chief, Research and Promotion Staff, Cotton and Tobacco Programs, AMS, USDA, Stop 0224, 1400 Independence Ave., SW., Room 2637-S, Washington, DC 20250-0224. Comments should be submitted in triplicate. Comments may also be submitted electronically through http:///www.regulations.gov. All comments received will be made available for public inspection at Cotton and Tobacco Programs, AMS, USDA, Stop 0224, 1400 Independence Ave., SW., Room 2637-S, Washington, DC 20250-0224 during regular business hours. A copy of this notice may be found at: http://www.regulations.gov.

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 2637-S, Washington, DC 20250-0224, telephone (202) 720-6603, facsimile (202) 690-1718, or e-mail at Shethir.Riva@ams.usda.gov.

End Further Info End Preamble Start Supplemental Information

SUPPLEMENTARY INFORMATION:

Executive Order 12866

The Office of Management and Budget has waived the review process required by Executive Order 12866 for this action.

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 of Agriculture (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

Amendments to the Act were enacted by Congress under Subtitle G of Title XIX of the Food, Agriculture, Conservation, and Trade Act of 1990 (Pub. L. 101-624, 104 Stat. 3909, November 28, 1990). These amendments 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.

As amended, the Cotton Research and Promotion Order (7 CFR part 1205) (Order) was approved by producers and importers voting in a referendum held July 17-26, 1991, and the amended Order was published in the Federal Register on December 10, 1991 (56 FR 64470). A proposed rule implementing the amended Order was published in the Federal Register on December 17, 1991 (56 FR 65450). Implementing rules were published on July 1 and 2, 1992, (57 FR 29181) and (57 FR 29431), respectively.

This proposed rule would increase 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.

Section 1205.510(b)(2) of the Cotton Research and Promotion Rules and Regulations provides 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 Department of Agriculture. Use of the weighted average price figure in the calculation of supplemental assessments on imported Start Printed Page 16332cotton 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 (73 FR 69521) for the purpose of calculating assessments on imported cotton is $0.009874 per kilogram. Using the Average Weighted Priced received by U.S. farmers for Upland cotton for the calendar year 2008, the new value of imported cotton is $0.01088 per kilogram or $0.001006 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 or $0.2000 per pound (1/500) or $0.004409 per kg. or $0.4409 cents per kg. (1/226.8).

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

The 2008 calendar year weighted average price received by producers for Upland cotton is $0.587 per pound or $1.294 per kg. (0.587 × 2.2046).

Five-tenths of one percent of the average price in kg. equals $0.006471 per kg. (1.294 × .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 $0.006471 per kg. which equals $0.010880 per kg.

The current assessment on imported cotton is $0.009874 per kilogram of imported cotton. The proposed assessment is $0.01088, an increase of $0.001006 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 2008.

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 in section 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 statistical reporting number subject to assessment.

AMS also compared the current import assessment table with the U.S. International Trade Commission's (ITC) 2009 HTS and identified HTS statistical reporting numbers that have been changed or amended by ITC. The HTS statistical reporting number that currently appears in section 1205.510(b)(3) is listed below on the left side of the table with the new proposed HTS statistical reporting number on the right side of the table. The new proposed numbers corresponds with the same ITC category, but with the amended number as it appears in ITC's HTS.

Current HTSNew proposed HTS
52054200205205420021
52054400205205440021

In addition, AMS removed HTS statistical reporting numbers from section 1205.510(b)(3) that were no longer in the ITC official HTS on November 19, 2008 (73 FR 69521), and has worked with ITC to identify the new corresponding HTS statistical reporting numbers that ITC is using in the 2009 HTS. In many instances, the number is a replacement of a previous number and has no impact on the physical properties or cotton content of the product involved. In other instances, the HTS statistical reporting numbers were expanded and are now represented by two HTS statistical reporting numbers. Below on the left are the numbers removed on November 19, 2008 (73 FR 69521), and on the right are the proposed numbers that ITC currently is using and whose categories correspond to the previously removed HTS statistical reporting numbers from 1205.510(b)(3).

Removed HTS No.New proposed HTS No.
52085300005208591000
52101200005210191000
52112100255211202125
52112100355211202135
52112100505211202150
52112900905211202990
56049000005604909000
57029910105702990500
57029910905702991500
61091000056109100004
61091000096109100004
6109100011
61102020656110202067
6110202069
61102020756110202077
6110202079
61112060406111206050
6111206070
61113050406111305050
6111305070
61151980106115101510
6115298010
61159290006115959000
6115103000
61159360206115966020
62034240056203424006
62034240106203424011
62034240156203424016
62034240206203424021
62034240256203424026
62034240306203424031
62034240356203424036
62034240406203424041
62034240456203424046
62034240506203424051
62034240556203424056
62034240606203424061
62046240056204624006
62046240106204624011
62046240206204624021
62046240256204624026
62046240306204624031
62046240356204624036
62046240406204624041
62046240456204624046
62046240506204624051
62046240556204624056
62046240606204624061
62046240656204624066
62052020156205202016
62052020206205202021
62052020256205202026
62052020306205202031
62052020356205202036
62052020466205202047
62052020506205202051
62052020606205202061
62052020656205202066
62052020706205202071
62052020756205202076
62063030106206303011
62063030206206303021
62063030306206303031
62063030406206303041
62063030506206303051
62063030606206303061
63031100006303191100

A 30-day comment period is provided to comment on the changes to the Cotton Board Rules and Regulations proposed herein. This period is deemed appropriate because this proposal would increase the assessments paid by importers under the Cotton Research and Promotion Order. 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. Accordingly, the change proposed in this rule, if adopted, should be implemented as soon as possible.Start Printed Page 16333

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 the 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 $7,000,000. 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 proposed 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 $0.009874 per kilogram of imported cotton. The proposed assessment is $0.01088, which was calculated based on the 12-month average of monthly weighted average prices received by U.S. cotton farmers. Section 1205.510, “Levy of assessments”, provides “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 2008, producer assessments totaled $29.2 million and importer assessments totaled $25.9 million. According to the Cotton Board, should the volume of cotton products imported into the U.S. remain at the same level in 2009, one could expect the increased assessment to generate approximately $10.8 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, cotton other than Upland, or imported products that are eligible to be labeled as 100 percent organic under the National Organic Program (7 CFR part 205) and who is not a split operation.

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

For the reasons set forth in the preamble 7 CFR part 1205 is proposed to be amended as follows:

Start Part

PART 1205—COTTON RESEARCH AND PROMOTION

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

Start Authority

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

End Authority

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

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 $1.088 cents per kilogram.

(3) * * *

(ii) * * *

Import Assessment Table

[Raw cotton fiber]

HTS No.Conv. fact.Cents/kg.
520100050001.0880
520100120001.0880
520100140001.0880
520100180001.0880
520100220001.0880
520100240001.0880
520100280001.0880
520100340001.0880
520100380001.0880
52041100001.11111.2089
52042000001.11111.2089
52051110001.11111.2089
52051120001.11111.2089
52051210001.11111.2089
52051220001.11111.2089
52051310001.11111.2089
52051320001.11111.2089
52051410001.11111.2089
52052100201.11111.2089
52052100901.11111.2089
52052200201.11111.2089
52052200901.11111.2089
52052300201.11111.2089
52052300901.11111.2089
52052400201.11111.2089
52052400901.11111.2089
52053100001.11111.2089
52053200001.11111.2089
52053300001.11111.2089
52053400001.11111.2089
52054100201.11111.2089
52054100901.11111.2089
52054200211.11111.2089
52054200901.11111.2089
52054400211.11111.2089
52054400901.11111.2089
52061200000.55560.6045
52061300000.55560.6045
52061400000.55560.6045
52062200000.55560.6045
52062300000.55560.6045
52062400000.55560.6045
52063100000.55560.6045
52071000001.11111.2089
52079000000.55560.6045
52081120201.14551.2463
52081120401.14551.2463
52081120901.14551.2463
52081140201.14551.2463
52081140601.14551.2463
52081140901.14551.2463
52081180901.14551.2463
52081240201.14551.2463
52081240401.14551.2463
52081240901.14551.2463
52081260201.14551.2463
52081260401.14551.2463
52081260601.14551.2463
52081260901.14551.2463
52081280201.14551.2463
52081280901.14551.2463
52081300001.14551.2463
52081920201.14551.2463
52081920901.14551.2463
52081940201.14551.2463
52081940901.14551.2463
52081960201.14551.2463
52081960901.14551.2463
52082240401.14551.2463
52082240901.14551.2463
52082260201.14551.2463
Start Printed Page 16334
52082260601.14551.2463
52082280201.14551.2463
52082300001.14551.2463
52082920201.14551.2463
52082920901.14551.2463
52082940901.14551.2463
52082960901.14551.2463
52082980201.14551.2463
52083120001.14551.2463
52083210001.14551.2463
52083230201.14551.2463
52083230401.14551.2463
52083230901.14551.2463
52083240201.14551.2463
52083240401.14551.2463
52083250201.14551.2463
52083300001.14551.2463
52083920201.14551.2463
52083920901.14551.2463
52083940901.14551.2463
52083960901.14551.2463
52083980201.14551.2463
52084120001.14551.2463
52084160001.14551.2463
52084180001.14551.2463
52084210001.14551.2463
52084230001.14551.2463
52084240001.14551.2463
52084250001.14551.2463
52084300001.14551.2463
52084920001.14551.2463
52084940201.14551.2463
52084940901.14551.2463
52084960101.14551.2463
52084960901.14551.2463
52084980901.14551.2463
52085120001.14551.2463
52085160601.14551.2463
52085180901.14551.2463
52085230201.14551.2463
52085230451.14551.2463
52085230901.14551.2463
52085240201.14551.2463
52085240451.14551.2463
52085240651.14551.2463
52085250201.14551.2463
52085910001.14551.2463
52085920251.14551.2463
52085920951.14551.2463
52085940901.14551.2463
52085960901.14551.2463
52091100201.14551.2463
52091100351.14551.2463
52091100901.14551.2463
52091200201.14551.2463
52091200401.14551.2463
52091900201.14551.2463
52091900401.14551.2463
52091900601.14551.2463
52091900901.14551.2463
52092100901.14551.2463
52092200201.14551.2463
52092200401.14551.2463
52092900401.14551.2463
52092900901.14551.2463
52093130001.14551.2463
52093160201.14551.2463
52093160351.14551.2463
52093160501.14551.2463
52093160901.14551.2463
52093200201.14551.2463
52093200401.14551.2463
52093900201.14551.2463
52093900401.14551.2463
52093900601.14551.2463
52093900801.14551.2463
52093900901.14551.2463
52094130001.14551.2463
52094160201.14551.2463
52094160401.14551.2463
52094200201.03091.1216
52094200401.03091.1216
52094300301.14551.2463
52094300501.14551.2463
52094900201.14551.2463
52094900901.14551.2463
52095160351.14551.2463
52095160501.14551.2463
52095200201.14551.2463
52095900251.14551.2463
52095900401.14551.2463
52095900901.14551.2463
52101140200.68730.7478
52101140400.68730.7478
52101160200.68730.7478
52101160400.68730.7478
52101160600.68730.7478
52101180200.68730.7478
52101910000.68730.7478
52101920900.68730.7478
52102140400.68730.7478
52102160200.68730.7478
52102160600.68730.7478
52102180200.68730.7478
52103140200.68730.7478
52103140400.68730.7478
52103160200.68730.7478
52103180200.68730.7478
52104140000.68730.7478
52104160000.68730.7478
52104180000.68730.7478
52104980900.68730.7478
52105140400.68730.7478
52105160200.68730.7478
52105160400.68730.7478
52105160600.68730.7478
52111100900.68730.7478
52111200200.68730.7478
52111900200.68730.7478
52111900600.68730.7478
52112021250.68730.7478
52112021350.41650.4532
52112021500.68730.7478
52112029900.68730.7478
52113200200.68730.7478
52113900400.68730.7478
52113900600.68730.7478
52114900200.68730.7478
52114900900.68730.7478
52115900250.68730.7478
52121460900.91640.9970
52121560200.91640.9970
52122160900.91640.9970
55095300300.55560.6045
55095300600.55560.6045
55131100200.40090.4362
55131100400.40090.4362
55131100600.40090.4362
55131100900.40090.4362
55131200000.40090.4362
55131300200.40090.4362
55132100200.40090.4362
55133100000.40090.4362
55141200200.40090.4362
55164200600.40090.4362
55169100600.40090.4362
55169300900.40090.4362
56012100101.14551.2463
56012100901.14551.2463
56013000001.14551.2463
56021090900.57270.6231
56022900001.14551.2463
56029060000.5260.5723
56049090000.55560.6045
56079090000.88890.9671
56089010001.11111.2089
56089023001.11111.2089
56090010001.11111.2089
56090040000.55560.6045
57011040000.05560.0605
57011090000.11110.1209
57019010101.04441.1363
57021090201.11.1968
57023120000.07780.0846
57024110000.07220.0786
57024120000.07780.0846
57024210000.07780.0846
57029130000.08890.0967
57029905001.11111.2089
57029915001.11111.2089
57039000000.44890.4884
58012100001.14551.2463
58012300001.14551.2463
58012500101.14551.2463
58012500201.14551.2463
58012600201.14551.2463
58021900001.14551.2463
58023000300.57270.6231
58042910001.14551.2463
58062000100.35340.3845
58062000900.35340.3845
58063100001.14551.2463
58064000000.42960.4674
58081070000.57270.6231
58089000100.57270.6231
58110020001.14551.2463
60011060001.14551.2463
60012100000.85910.9347
60012200000.28640.3116
60019100100.85910.9347
60019100200.85910.9347
60019200200.28640.3116
60019200300.28640.3116
60019200400.28640.3116
60032030000.86810.9445
60033060000.28940.3149
60034060000.28940.3149
60052100000.86810.9445
60052200000.86810.9445
60052300000.86810.9445
60052400000.86810.9445
60053100100.28940.3149
60053100800.28940.3149
60053200100.28940.3149
60053200800.28940.3149
60053300100.28940.3149
60053300800.28940.3149
Start Printed Page 16335
60053400100.28940.3149
60053400800.28940.3149
60054100100.28940.3149
60054100800.28940.3149
60054200100.28940.3149
60054200800.28940.3149
60054300100.28940.3149
60054300800.28940.3149
60054400100.28940.3149
60054400800.28940.3149
60062110001.15741.2593
60062210001.15741.2593
60062310001.15741.2593
60062410001.15741.2593
60063100400.11570.1259
60063100800.11570.1259
60063200400.11570.1259
60063200800.11570.1259
60063300400.11570.1259
60063300800.11570.1259
60063400400.11570.1259
60063400800.11570.1259
60064100850.11570.1259
60064200850.11570.1259
60064300850.11570.1259
60064400850.11570.1259
61012000101.00941.0982
61012000201.00941.0982
61022000101.00941.0982
61022000201.00941.0982
61034210200.88060.9581
61034210400.88060.9581
61034210500.88060.9581
61034210700.88060.9581
61034315200.25160.2737
61034315400.25160.2737
61034315500.25160.2737
61034315700.25160.2737
61042200400.90020.9794
61042200600.90020.9794
61043200000.92071.0017
61044200100.90020.9794
61044200200.90020.9794
61045200100.93121.0131
61045200200.93121.0131
61046220060.88060.9581
61046220110.88060.9581
61046220160.88060.9581
61046220210.88060.9581
61046220260.88060.9581
61046220280.88060.9581
61046220300.88060.9581
61046220600.88060.9581
61046320060.37740.4106
61046320110.37740.4106
61046320260.37740.4106
61046320280.37740.4106
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* * * * *
Start Authority

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

End Authority
Start Signature

Dated: April 6, 2009.

Robert C. Keeney,

Acting Associate Administrator.

End Signature End Part End Supplemental Information

[FR Doc. E9-8175 Filed 4-9-09; 8:45 am]

BILLING CODE 3410-02-P