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Cotton Board Rules and Regulations: Adjusting Supplemental Assessment on Imports (2014 Amendment)

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Start Preamble Start Printed Page 36183

AGENCY:

Agricultural Marketing Service, USDA.

ACTION:

Direct Final Rule.

SUMMARY:

The Agricultural Marketing Service (AMS) is amending the Cotton Board Rules and Regulations, decreasing the value assigned to imported cotton for the purposes of calculating supplemental assessments collected for use by the Cotton Research and Promotion Program. This amendment is required each year to assure that assessments collected on imported cotton and the cotton content of imported products will be the same as those paid on domestically produced cotton.

DATES:

This direct rule is effective August 25, 2014, without further action or notice, unless significant adverse comment is received by July 28, 2014. If significant adverse comment is received, AMS will publish a timely withdrawal of the amendment in the Federal Register.

ADDRESSES:

Written comments may be submitted to the addresses specified below. All comments will be made available to the public. Please do not include personally identifiable information (such as name, address, or other contact information) or confidential business information that you do not want publically disclosed. All comments may be posted on the Internet and can be retrieved by most Internet search engines. Comments may be submitted anonymously.

Comments, identified by AMS-CN-13-0100, may be submitted electronically through the Federal eRulemaking Portal at http://www.regulations.gov. Please follow the instructions for submitting comments. In addition, comments may be submitted by mail or hand delivery to Cotton Research and Promotion Staff, Cotton and Tobacco Program, AMS, USDA, 100 Riverside Parkway, Suite 101, Fredericksburg, Virginia 22406. Comments should be submitted in triplicate. All comments received will be made available for public inspection at Cotton and Tobacco Program, AMS, USDA, 100 Riverside Parkway, Suite 101, Fredericksburg, Virginia 22406. A copy of this notice may be found at: www.regulations.gov.

Start Further Info

FOR FURTHER INFORMATION CONTACT:

Shethir M. Riva, Chief, Research and Promotion Staff, Cotton and Tobacco Program, 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.

End Further Info End Preamble Start Supplemental Information

SUPPLEMENTARY INFORMATION:

A. Background

Amendments to the Cotton Research and Promotion Act (7 U.S.C. 2101-2118) (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 authorize changes in the funding procedures for the Cotton Research and Promotion Program. These provisions provide for: (1) The assessment of imported cotton and cotton products; and (2) termination of refunds to cotton producers. (Prior the 1990 amendments to the Act, producers could request assessment refunds.)

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 direct final rule would amend the value assigned to imported cotton in the Cotton Board Rules and Regulations (7 CFR § 1205.510(b)(2)) that is used to determine the Cotton Research and Promotion assessment on imported cotton and cotton products. The total value of assessment levied on cotton imports is the sum of two parts. The first part of the assessment is based on the weight of cotton imported—levied 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 part of the import assessment (referred to as the supplemental assessment) is based on the value of imported cotton lint or the cotton contained in imported cotton products—levied at a rate of five-tenths of one percent of the value of domestically produced cotton.

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 2013 in the Federal Register (78 FR 39551) for the purpose of calculating assessments on imported cotton is $0.012876 per kilogram. Using the Average Weighted Priced received by U.S. farmers for Upland cotton for the calendar year 2013, this direct final rule would amend the new value of imported cotton to $0.012728 per kilogram to reflect the price paid by U.S. farmers for Upland cotton during 2013.

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.Start Printed Page 36184

One Dollar per Bale Assessment Converted to Kilograms

A 500-pound bale equals 226.8 kg. (500 × 0.453597).

$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 2013 calendar year weighted average price received by producers for Upland cotton is $0.755 per pound or $1.664 per kg. (0.755 × 2.2046).

Five tenths of one percent of the average price equals $0.008319 per kg. (1.664 × 0.005).

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 $0.008319 per kg., which equals $0.012728 per kg.

The current assessment on imported cotton is $0.012876 per kilogram of imported cotton. The revised assessment in this direct final rule is $0.012728, a decrease of $0.000148 per kilogram. This decrease reflects the decrease in the average weighted price of Upland cotton received by U.S. farmers during the period January through December 2013.

Import Assessment Table in section 1205.510(b)(3) indicates the total assessment rate ($ per kilogram) due for each Harmonized Tariff Schedule (HTS) number that is subject to assessment. This table must be revised each year to reflect changes in supplemental assessment rates. In this direct final rule, AMS is amending the Import Assessment Table.

AMS believes that these amendments are necessary to assure that assessments collected on imported cotton and the cotton content of imported products are the same as those paid on domestically produced cotton. Accordingly, changes reflected in this rule should be adopted and implemented as soon as possible since it is required by regulation.

B. Good Cause Finding That Proposed Rulemaking Is Unnecessary

Rulemaking under section 553 of the Administrative Procedure Act (5 U.S.C. 551 et seq.) ordinarily involves publication of a notice of proposed rulemaking in the Federal Register and the public is given an opportunity to comment on the proposed rule; however, an agency may issue a rule without prior notice and comment procedures if it determines for good cause that public notice and comment procedures are impracticable, unnecessary, or contrary to the public interest for such rule, and incorporates a statement of the finding with the underlying reasons in the final rule issued.

As described this Federal Register notice, the amendment to the value used to determine the Cotton Research and Promotion Program importer assessment will be updated to reflect the assessment already paid by U.S. farmers. For the reasons mentioned in section A of this preamble, AMS finds that publishing a proposed rule and seeking public comment is unnecessary because the change is required annually by regulation in 7 CFR 1205.510.

Also, this direct-final rulemaking furthers the objectives of Executive Order 13563, which requires that the regulatory process “promote predictability and reduce uncertainty” and “identify and use the best, most innovative, and least burdensome tools for achieving regulatory ends.”

Notwithstanding the foregoing, in the “Proposed Rules” section of today's Federal Register, AMS is publishing a separate document that will serve as a notice of proposal to amend part 7 CFR part 1205 as described in this direct final rule. If AMS receives significant adverse comment during the comment period, it will publish, in a timely manner, a document in the Federal Register withdrawing this direct final rule. AMS will then address public comments in a subsequent final rule based on the proposed rule. AMS will not institute a second comment period on this rule. Any parties interested in commenting must do so during this comment period.

C. Regulatory Impact Analysis

Executive Order 13175

This action has been reviewed in accordance with the requirements of Executive Order 13175, Consultation and Coordination with Indian Tribal Governments. The review reveals that this regulation would not have substantial and direct effects on Tribal governments and would not have significant Tribal implications.

Executive Orders 12866 and 13563

Executive Orders 12866 and 13563 direct agencies to access all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health, and safety effects, distributive impacts and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. This action has been designated as a “non-significant regulatory action” under § 3(f) of Executive Order 12866, and therefore, review has been waived, and this action has not been reviewed by the Office of Management and Budget.

Executive Order 12988

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have retroactive effect.

The 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 the Secretary's ruling.

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 2013, 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 rule would only affect importers of cotton and cotton-containing products and would lower the assessments paid by the importers under the Cotton Research and Start Printed Page 36185Promotion Order. The current assessment on imported cotton is $0.012876 per kilogram of imported cotton. The proposed assessment is $0.012728, which was calculated based on the 12-month weighted average of price 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 weighted average of 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 2012 (the last audited year), producer assessments totaled $45.8 million and importer assessments totaled $39.3 million. According to the Cotton Board, should the volume of cotton products imported into the U.S. remain at the same level in 2014, one could expect a decrease of assessments by approximately $455,000.

Importers with line-items appearing on U.S. Customs and Border Protection documentation with value of the cotton contained therein which results in an assessment of two dollars ($2.00) or less will not be subject to assessments. In addition, imported organic cotton and products may be exempt from assessment if eligible under section 1205.519 of the Order.

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, National Research, Promotion, and Consumer Information Programs. This rule does not result in a change to the information collection and recordkeeping requirements previously approved.

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 rule would decrease 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 in this rule, if adopted, should be implemented as soon as possible.

Start List of Subjects

List of Subjects in 7 CFR Part 1205

  • Advertising
  • Agricultural research
  • Cotton
  • Marketing agreements
  • Reporting and recordkeeping requirements
End List of Subjects

For the reasons set forth in the preamble, AMS amends 7 CFR part 1205 as follows:

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.

End Authority Start 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 $1.2728 cents per kilogram.

(3) * * *

(ii) * * *

Import Assessment Table

[Raw cotton fiber]

HTS No.Conv. factor.Cents/kg.
50071060100.27130.3453
50071060200.27130.3453
50079060100.27130.3453
50079060200.27130.3453
51129040000.10850.1381
51129050000.10850.1381
51129090100.10850.1381
51129090900.10850.1381
520100050001.2728
520100120001.2728
520100140001.2728
520100180001.2728
520100220001.2728
520100240001.2728
520100280001.2728
520100340001.2728
520100380001.2728
52041100001.05261.3397
52041900000.63160.8039
52042000001.05261.3397
520511100011.2728
520511200011.2728
520512100011.2728
520512200011.2728
520513100011.2728
520513200011.2728
520514100011.2728
520514200011.2728
520515100011.2728
520515200011.2728
52052100201.0441.3288
52052100901.0441.3288
52052200201.0441.3288
52052200901.0441.3288
52052300201.0441.3288
52052300901.0441.3288
52052400201.0441.3288
52052400901.0441.3288
52052600201.0441.3288
52052600901.0441.3288
52052700201.0441.3288
52052700901.0441.3288
52052800201.0441.3288
52052800901.0441.3288
520531000011.2728
520532000011.2728
520533000011.2728
520534000011.2728
520535000011.2728
52054100201.0441.3288
52054100901.0441.3288
52054200211.0441.3288
52054200291.0441.3288
52054200901.0441.3288
52054300211.0441.3288
52054300291.0441.3288
52054300901.0441.3288
52054400211.0441.3288
52054400291.0441.3288
52054400901.0441.3288
52054600211.0441.3288
52054600291.0441.3288
52054600901.0441.3288
52054700211.0441.3288
52054700291.0441.3288
52054700901.0441.3288
52054800201.0441.3288
52054800901.0441.3288
52061100000.73680.9378
52061200000.73680.9378
52061300000.73680.9378
52061400000.73680.9378
52061500000.73680.9378
52062100000.76920.9790
52062200000.76920.9790
52062300000.76920.9790
52062400000.76920.9790
52062500000.76920.9790
52063100000.73680.9378
52063200000.73680.9378
52063300000.73680.9378
52063400000.73680.9378
52063500000.73680.9378
52064100000.76920.9790
52064200000.76920.9790
52064300000.76920.9790
52064400000.76920.9790
Start Printed Page 36186
52064500000.76920.9790
52071000000.94741.2059
52079000000.63160.8039
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52081120901.08521.3812
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52081160001.08521.3812
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52083230901.08521.3812
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52083240401.08521.3812
52083240601.08521.3812
52083240901.08521.3812
52083250201.08521.3812
52083250901.08521.3812
52083300001.08521.3812
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52084160001.08521.3812
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52085230201.08521.3812
52085230351.08521.3812
52085230451.08521.3812
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52091100201.03091.3121
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52101140200.65110.8287
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* * * * *
Start Authority

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

End Authority Start Signature

Dated: June 23, 2014.

Rex A. Barnes,

Associate Administrator.

End Signature End Supplemental Information

[FR Doc. 2014-14988 Filed 6-25-14; 8:45 am]

BILLING CODE 3410-02-P