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Proposed Rule

Cotton Board Rules and Regulations: Adjusting Supplemental Assessment on Imports (2011 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.

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 change the Harmonized Tariff Schedule (HTS) statistical reporting numbers that were amended since the last assessment adjustment.

DATES:

Comments must be received on or before July 12, 2012.

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, 100 Riverside Parkway, Suite 101, Fredericksburg, Virginia 22406. Comments should be submitted in triplicate. Comments may also be submitted electronically through www.regulations.gov. All comments received will be made available for public inspection at Cotton and Tobacco Programs, AMS, USDA, 100 Riverside Parkway, Suite 101, Fredericksburg, Virginia 22406. A copy of this notice may be found at: www.regulations.gov.

FOR FURTHER INFORMATION CONTACT:

Shethir M. Riva, Chief, Research and Promotion Staff, Cotton and Tobacco Programs, AMS, USDA, 100 Riverside Parkway, Suite 101, Fredericksburg, Virginia 22406, telephone (540) 361-2726, facsimile (540) 361-1199, or email at Shethir.Riva@ams.usda.gov.

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 supplemental 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 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 (76 FR 54078) for the purpose of calculating assessments on imported cotton is $0.012665 per kilogram. Using the Average Weighted Priced received by U.S. farmers for Upland cotton for the calendar year 2011, the new value of imported cotton is $0.014109 per kilogram.

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 cents 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 2011 calendar year weighted average price received by producers for Upland cotton is $0.880 per pound or $1.940 per kg. (0.880 × 2.2046).

Five tenths of one percent of the average price in kg. equals $0.009700 per kg. (1.940 × .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 $0.009700 per kg. which equals $0.014109 per kg.

The current assessment on imported cotton is $0.012665 per kilogram of imported cotton. The proposed assessment is $0.014109, an increase of $0.001444 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 2011.

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 numbers subject to assessment.

AMS also compared the current import assessment table with the U.S. International Trade Commission's (ITC) 2012 HTS and information from U.S. Customs and Border Protection and identified HTS statistical reporting numbers that have been removed.

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.

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. In 2011, an estimated 17,000 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 $0.012665 per kilogram of imported cotton. The proposed assessment is $0.014109, 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 2010 (the last audited year), producer assessments totaled $46.5 million and importer assessments totaled $38.1 million. According to the Cotton Board, should the volume of cotton products imported into the U.S. remain at the same level in 2011, one could expect the increased assessment to generate approximately $8,309,158 in additional revenue.

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.

List of Subjects in 7 CFR Part 1205

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

PART 1205—COTTON RESEARCH AND PROMOTION

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

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

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 $1.4109 cents per kilogram.

(3) * * *

(ii) * * *

Import Assessment Table

[Raw cotton fiber]

HTS No.Conv. factor.Cents/kg.
50071060100.27130.3828
50071060200.27130.3828
50079060100.27130.3828
50079060200.27130.3828
51129040000.10850.1531
51129050000.10850.1531
51129090100.10850.1531
51129090900.10850.1531
520100050001.4109
520100120001.4109
520100140001.4109
520100180001.4109
520100220001.4109
520100240001.4109
520100280001.4109
520100340001.4109
520100380001.4109
52041100001.05261.4852
52041900000.63160.8911
52042000001.05261.4852
52051110001.00001.4109
52051120001.00001.4109
52051210001.00001.4109
52051220001.00001.4109
52051310001.00001.4109
52051320001.00001.4109
52051410001.00001.4109
52051420001.00001.4109
52051510001.00001.4109
52051520001.00001.4109
52052100201.04401.4729
52052100901.04401.4729
52052200201.04401.4729
52052200901.04401.4729
52052300201.04401.4729
52052300901.04401.4729
52052400201.04401.4729
52052400901.04401.4729
52052600201.04401.4729
52052600901.04401.4729
52052700201.04401.4729
52052700901.04401.4729
52052800201.04401.4729
52052800901.04401.4729
52053100001.00001.4109
52053200001.00001.4109
52053300001.00001.4109
52053400001.00001.4109
52053500001.00001.4109
52054100201.04401.4729
52054100901.04401.4729
52054200211.04401.4729
52054200291.04401.4729
52054200901.04401.4729
52054300211.04401.4729
52054300291.04401.4729
52054300901.04401.4729
52054400211.04401.4729
52054400291.04401.4729
52054400901.04401.4729
52054600211.04401.4729
52054600291.04401.4729
52054600901.04401.4729
52054700211.04401.4729
52054700291.04401.4729
52054700901.04401.4729
52054800201.04401.4729
52054800901.04401.4729
52061100000.73681.0396
52061200000.73681.0396
52061300000.73681.0396
52061400000.73681.0396
52061500000.73681.0396
52062100000.76921.0853
52062200000.76921.0853
52062300000.76921.0853
52062400000.76921.0853
52062500000.76921.0853
52063100000.73681.0396
52063200000.73681.0396
52063300000.73681.0396
52063400000.73681.0396
52063500000.73681.0396
52064100000.76921.0853
52064200000.76921.0853
52064300000.76921.0853
52064400000.76921.0853
52064500000.76921.0853
52071000000.94741.3366
52079000000.63160.8911
52081120201.08521.5311
52081120401.08521.5311
52081120901.08521.5311
52081140201.08521.5311
52081140401.08521.5311
52081140601.08521.5311
52081140901.08521.5311
52081160001.08521.5311
52081180201.08521.5311
52081180901.08521.5311
52081240201.08521.5311
52081240401.08521.5311
52081240901.08521.5311
52081260201.08521.5311
52081260401.08521.5311
52081260601.08521.5311
52081260901.08521.5311
52081280201.08521.5311
52081280901.08521.5311
52081300001.08521.5311
52081920201.08521.5311
52081920901.08521.5311
52081940201.08521.5311
52081940901.08521.5311
52081960201.08521.5311
52081960901.08521.5311
52081980201.08521.5311
52081980901.08521.5311
52082120201.08521.5311
52082120401.08521.5311
52082120901.08521.5311
52082140201.08521.5311
52082140401.08521.5311
52082140601.08521.5311
52082140901.08521.5311
52082160201.08521.5311
52082160901.08521.5311
52082240201.08521.5311
52082240401.08521.5311
52082240901.08521.5311
52082260201.08521.5311
52082260401.08521.5311
52082260601.08521.5311
52082260901.08521.5311
52082280201.08521.5311
52082280901.08521.5311
52082300001.08521.5311
52082920201.08521.5311
52082920901.08521.5311
52082940201.08521.5311
52082940901.08521.5311
52082960201.08521.5311
52082960901.08521.5311
52082980201.08521.5311
52082980901.08521.5311
52083120001.08521.5311
52083140201.08521.5311
52083140401.08521.5311
52083140901.08521.5311
52083160201.08521.5311
52083160401.08521.5311
52083160601.08521.5311
52083160901.08521.5311
52083180201.08521.5311
52083180901.08521.5311
52083210001.08521.5311
52083230201.08521.5311
52083230401.08521.5311
52083230901.08521.5311
52083240201.08521.5311
52083240401.08521.5311
52083240601.08521.5311
52083240901.08521.5311
52083250201.08521.5311
52083250901.08521.5311
52083300001.08521.5311
52083920201.08521.5311
52083920901.08521.5311
52083940201.08521.5311
52083940901.08521.5311
52083960201.08521.5311
52083960901.08521.5311
52083980201.08521.5311
52083980901.08521.5311
52084120001.08521.5311
52084140001.08521.5311
52084160001.08521.5311
52084180001.08521.5311
52084210001.08521.5311
52084230001.08521.5311
52084240001.08521.5311
52084250001.08521.5311
52084300001.08521.5311
52084920001.08521.5311
52084940101.08521.5311
52084940201.08521.5311
52084940901.08521.5311
52084960101.08521.5311
52084960201.08521.5311
52084960301.08521.5311
52084960901.08521.5311
52084980201.08521.5311
52084980901.08521.5311
52085120001.08521.5311
52085140201.08521.5311
52085140401.08521.5311
52085140901.08521.5311
52085160201.08521.5311
52085160401.08521.5311
52085160601.08521.5311
52085160901.08521.5311
52085180201.08521.5311
52085180901.08521.5311
52085210001.08521.5311
52085230201.08521.5311
52085230351.08521.5311
52085230451.08521.5311
52085230901.08521.5311
52085240201.08521.5311
52085240351.08521.5311
52085240451.08521.5311
52085240551.08521.5311
52085240651.08521.5311
52085240901.08521.5311
52085250201.08521.5311
52085250901.08521.5311
52085910001.08521.5311
52085920151.08521.5311
52085920251.08521.5311
52085920851.08521.5311
52085920951.08521.5311
52085940201.08521.5311
52085940901.08521.5311
52085960201.08521.5311
52085960901.08521.5311
52085980201.08521.5311
52085980901.08521.5311
52091100201.03091.4545
52091100251.03091.4545
52091100351.03091.4545
52091100501.03091.4545
52091100901.03091.4545
52091200201.03091.4545
52091200401.03091.4545
52091900201.03091.4545
52091900401.03091.4545
52091900601.03091.4545
52091900901.03091.4545
52092100201.03091.4545
52092100251.03091.4545
52092100351.03091.4545
52092100501.03091.4545
52092100901.03091.4545
52092200201.03091.4545
52092200401.03091.4545
52092900201.03091.4545
52092900401.03091.4545
52092900601.03091.4545
52092900901.03091.4545
52093130001.03091.4545
52093160201.03091.4545
52093160251.03091.4545
52093160351.03091.4545
52093160501.03091.4545
52093160901.03091.4545
52093200201.03091.4545
52093200401.03091.4545
52093900201.03091.4545
52093900401.03091.4545
52093900601.03091.4545
52093900801.03091.4545
52093900901.03091.4545
52094130001.03091.4545
52094160201.03091.4545
52094160401.03091.4545
52094200200.97671.3780
52094200400.97671.3780
52094200600.97671.3780
52094200800.97671.3780
52094300301.03091.4545
52094300501.03091.4545
52094900201.03091.4545
52094900401.03091.4545
52094900901.03091.4545
52095130001.03091.4545
52095160151.08521.5311
52095160251.08521.5311
52095160321.08521.5311
52095160351.08521.5311
52095160501.08521.5311
52095160901.08521.5311
52095200201.08521.5311
52095200401.08521.5311
52095900151.08521.5311
52095900251.08521.5311
52095900401.08521.5311
52095900601.08521.5311
52095900901.08521.5311
52101140200.65110.9187
52101140400.65110.9187
52101140900.65110.9187
52101160200.65110.9187
52101160400.65110.9187
52101160600.65110.9187
52101160900.65110.9187
52101180200.65110.9187
52101180900.65110.9187
52101910000.65110.9187
52101920200.65110.9187
52101920900.65110.9187
52101940200.65110.9187
52101940900.65110.9187
52101960200.65110.9187
52101960900.65110.9187
52101980200.65110.9187
52101980900.65110.9187
52102140200.65110.9187
52102140400.65110.9187
52102140900.65110.9187
52102160200.65110.9187
52102160400.65110.9187
52102160600.65110.9187
52102160900.65110.9187
52102180200.65110.9187
52102180900.65110.9187
52102910000.65110.9187
52102920200.65110.9187
52102920900.65110.9187
52102940200.65110.9187
52102940900.65110.9187
52102960200.65110.9187
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52102980200.65110.9187
52102980900.65110.9187
52103140200.65110.9187
52103140400.65110.9187
52103140900.65110.9187
52103160200.65110.9187
52103160400.65110.9187
52103160600.65110.9187
52103160900.65110.9187
52103180200.65110.9187
52103180900.65110.9187
52103200000.65110.9187
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52103960200.65110.9187
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52103980200.65110.9187
52103980900.65110.9187
52104140000.65110.9187
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52104180000.65110.9187
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52104920000.65110.9187
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52105140200.65110.9187
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52105160200.65110.9187
52105160400.65110.9187
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52105940900.65110.9187
52105960200.65110.9187
52105960900.65110.9187
52105980200.65110.9187
52105980900.65110.9187
52111100200.65110.9187
52111100250.65110.9187
52111100350.65110.9187
52111100500.65110.9187
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52111900200.65110.9187
52111900400.65110.9187
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52111900900.65110.9187
52112021200.65110.9187
52112021250.65110.9187
52112021350.65110.9187
52112021500.65110.9187
52112021900.65110.9187
52112022200.65110.9187
52112022400.65110.9187
52112029200.65110.9187
52112029400.65110.9187
52112029600.65110.9187
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52113100200.65110.9187
52113100250.65110.9187
52113100350.65110.9187
52113100500.65110.9187
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52113200200.65110.9187
52113200400.65110.9187
52113900200.65110.9187
52113900400.65110.9187
52113900600.65110.9187
52113900900.65110.9187
52114100200.65110.9187
52114100400.65110.9187
52114200200.70540.9952
52114200400.70540.9952
52114200600.65110.9187
52114200800.65110.9187
52114300300.65110.9187
52114300500.65110.9187
52114900200.65110.9187
52114900900.65110.9187
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* * * * *

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

Dated: June 6, 2012.

Ruihong Guo,

Associate Administrator, Agricultural Marketing Service.

[FR Doc. 2012-14184 Filed 6-11-12; 8:45 am]

BILLING CODE 3410-02-P