01-28891. 2001 Amendment to Cotton Board Rules and Regulations Adjusting Supplemental Assessment on Imports  

  • Start Preamble Start Printed Page 58051

    AGENCY:

    Agricultural Marketing Service, USDA.

    ACTION:

    Final rule.

    SUMMARY:

    The Agricultural Marketing Service (AMS) is amending the Cotton Board Rules and Regulations by raising the value assigned to imported cotton for the purpose of calculating supplemental assessments collected for use by the Cotton Research and Promotion Program. An adjustment is required on an annual basis to ensure that the assessments collected on imported cotton and the cotton content of imported products remain similar to those paid on domestically produced cotton.

    EFFECTIVE DATE:

    December 20, 2001.

    Start Further Info

    FOR FURTHER INFORMATION CONTACT:

    Whitney Rick, (202) 720-2259.

    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 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 the 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 rule will 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 rule will raise the assessments paid by the importers under the Cotton Research and Promotion Order. Even though the assessment would be raised, the increase is small and will not significantly affect small businesses. The current assessment on imported cotton is $0.009833 per kilogram of imported cotton. The new assessment is $0.009965, an increase of $0.000132 or a 1.34 percent increase. From January through December 2000 approximately $20 million was collected at the $0.009833 per kilogram rate. Should the volume of cotton products imported into the U.S. remain at the same level in 2001, one could expect the increased assessment to generate approximately $20.2 million or a 1.34 percent increase from 2000.

    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 requirements contained in the regulation to be amended have been previously approved by OMB and were assigned control number 0581-0093.

    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 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, 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 rule will increase the value assigned to imported cotton in the Cotton Board Rules and Regulations (7 CFR 1205.510(b)(2)). This value is used to calculate supplemental assessments on imported cotton and the cotton content of imported products. Supplemental assessments are the second part of 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.

    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 agency has adopted the practice of assigning the calendar year weighted Start Printed Page 58052average price received by U.S. farmers for Upland cotton to represent the value of imported cotton. This is done so that the assessment on domestically produced cotton and the assessment on imported cotton and the cotton content of imported products remain similar. 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 yields an assessment that approximates assessments paid on domestically produced cotton in the prior calendar year.

    The current value of imported cotton as published in the Federal Register (65 FR 25236) on May 1, 2000, for the purpose of calculating supplemental assessments on imported cotton is $1.0847 per kilogram. This number was calculated using the annual weighted average price received by farmers for Upland cotton during the calendar year 1999 which was $0.492 per pound and multiplying by the conversion factor 2.2046. Using the Average Weighted Price Received by U.S. farmers for Upland cotton for the calendar year 2000, which is $0.504 per pound, the new value of imported cotton is $1.1111 per kilogram. The amended value is $.0264 per kilogram more than the previous value.

    An example of the complete assessment formula and how the various 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 x .453597).

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

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

    The 2000 calendar year weighted average price received by producers for Upland cotton is $0.504 per pound or $1.1111 per kg. (0.504 × 2.2046) = 1.1111.

    Five tenths of one percent of the average price in kg. equals $0.005556 per kg. (1.1111 × .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 $0.005556 per kg. which equals $0.009965 per kg.

    The current assessment on imported cotton is $0.009833 per kilogram of imported cotton. The amended assessment is $0.009965, an increase of $0.000132 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 2000.

    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 Harmonized Tariff Schedule (HTS) number subject to assessment.

    One HTS number subject to assessment pursuant to this regulation and found in the assessment table has been changed. In order to maintain consistency between HTS and the assessment table, the changes to this one number have been incorporated into the assessment table. The last two digits of this number were changed to provide for statistical reporting purposes and involve no physical change to the products they represent. The assessment rate for the one number has been applied to each of the new replacement numbers in the assessment table. The following table represents the changes:

    Old No.New No.Conversion FactorAssessment cents/kg.
    630391000063039100100.62490.6406
    63039100200.62490.6406

    A proposed rule with a request for comments was published in the Federal Register (66 FR 42464) on August 13, 2001. No comments were received during the period (August 13 through September 12, 2001).

    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 Start Amendment Part

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

    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.

    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 $0.9965 per kilogram.

    (3) * * *

    (II) * * *

    Import Assessment Table

    [Raw Cotton Fiber]

    HTS No.Conv. fact.Cents/kg.
    520100050000.9965
    520100120000.9965
    520100140000.9965
    520100180000.9965
    520100220000.9965
    520100240000.9965
    520100280000.9965
    520100340000.9965
    520100380000.9965
    52041100001.11111.1072
    52042000001.11111.1072
    52051110001.11111.1072
    52051120001.11111.1072
    52051210001.11111.1072
    52051220001.11111.1072
    52051310001.11111.1072
    52051320001.11111.1072
    52051410001.11111.1072
    52052100201.11111.1072
    52052100901.11111.1072
    52052200201.11111.1072
    52052200901.11111.1072
    52052300201.11111.1072
    52052300901.11111.1072
    52052400201.11111.1072
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    * * * * *
    Start Signature

    Dated: November 14, 2001.

    A. J. Yates,

    Administrator, Agricultural Marketing Service.

    End Signature End Supplemental Information

    [FR Doc. 01-28891 Filed 11-19-01; 8:45 am]

    BILLING CODE 3410-02-P

Document Information

Effective Date:
12/20/2001
Published:
11/20/2001
Department:
Agricultural Marketing Service
Entry Type:
Rule
Action:
Final rule.
Document Number:
01-28891
Dates:
December 20, 2001.
Pages:
58051-58056 (6 pages)
Docket Numbers:
CN-01-001
Topics:
Advertising, Agricultural research, Cotton, Marketing agreements, Reporting and recordkeeping requirements
PDF File:
01-28891.pdf
CFR: (1)
7 CFR 1205.510