E7-10090. Pima Cotton Trust Fund

AGENCY:

U.S. Customs and Border Protection, Homeland Security.

ACTION:

General notice.

SUMMARY:

On December 20, 2006, President Bush signed into law the Tax Relief and Health Care Act of 2006. Within Division C of the Act, section 407 of Title IV establishes a Cotton Trust Fund in the Treasury of the United States to be known as the “Pima Cotton Trust Fund.” The Pima Cotton Trust Fund is comprised of funds transferred from the general fund of the Treasury in amounts equal to duties collected since January 1, 1994, on certain imports of pima cotton products. Section 407 of the Act authorizes distributions out of the Trust Fund in each of fiscal years 2007 and 2008, payable to eligible manufacturers and spinners of certain pima cotton products, as well as to a nationally recognized association established for the promotion of pima cotton grown in the United States for use in textile and apparel goods. Eligible claimants are directed to follow the statutory procedures to claim a distribution from the Pima Cotton Trust Fund. This document sets forth the law and announces applicable deadlines for claim and affidavit submission as well as the address to which claims, affidavits and related information must be sent.

DATES:

For fiscal year 2007 distributions, all claims and affidavits must be mailed to CBP and postmarked no later than July 1, 2007. For fiscal year 2008 distributions, all claims and affidavits must be mailed to CBP and postmarked no later than March 1, 2008.

ADDRESSES:

Claims, affidavits and supporting documentation for distribution from the Pima Cotton Trust Fund must be sent to U.S. Customs and Border Protection, Office of International Trade, Summary and Account Management Division, Entry and Drawback Management Branch, Attention: Pima Cotton Trust Fund Unit, 1300 Pennsylvania Avenue, NW., Washington, DC 20229.

FOR FURTHER INFORMATION CONTACT:

Sharon Taylor at [phone] or via e-mail at [e-mail].

SUPPLEMENTARY INFORMATION:

Background

Within Division C of the Tax Relief and Health Care Act of 2006 (Public Law 109-432, 120 Stat. 2922), section 407 of Title IV establishes a Cotton Trust Fund in the Treasury of the United States to be known as the Pima Cotton Trust Fund, from which distributions are authorized to be payable to eligible manufacturers and spinners of certain pima cotton products as well as to a nationally recognized association for the promotion of pima cotton grown in the United States for use in textile and apparel goods.

This document sets forth the statute in its entirety and informs claimants how to apply for a distribution from the fund.

Section 407, Division C, Title IV, of the Tax Relief and Health Care Act of 2006

The statute reads as follows:

SEC. 407. Cotton Trust Fund.

(a) Establishment of Trust Fund.—There is established in the Treasury of the United States a trust fund to be known as the “Pima Cotton Trust Fund” (in this section referred to as the “Trust Fund”), consisting of such amounts as may be transferred to the Trust Fund under subsection (b).

(b) Transfer of Amounts.—

(1) In general.—Beginning October 1, 2006, the Secretary of the Treasury shall transfer to the Trust Fund, from the general fund of the Treasury, amounts determined by the Secretary of the Treasury to be equivalent to the amounts received in the general fund that are attributable to duties received since January 1, 1994, on articles under subheadings 5208.21.60, 5208.22.80, 5208.29.80, 5208.31.80, 5208.32.50, 5208.39.80, 5208.41.80, 5208.42.50, 5208.49.80, 5208.51.80, 5208.52.50, and 5208.59.80 of the Harmonized Tariff Schedule of the United States, subject to the limitation in paragraph (2).

(2) Limitation.—The Secretary may not transfer more than $16,000,000 to the Trust Fund in any fiscal year, and may not transfer any amount beginning on or after October 1, 2008.

(c) Distribution of Funds.—From amounts in the Trust Fund, the Commissioner of the Bureau of Customs and Border Protection shall make the following payments annually beginning in fiscal year 2007:

(1) 25 percent of the amounts in the Trust Fund shall be paid annually to a nationally recognized association established for the promotion of pima cotton grown in the United States for the use in textile and apparel goods.

(2) 25 percent of the amounts in the Trust Fund shall be paid annually to yarn spinners of pima cotton grown in the United States, and shall be allocated to each spinner in an amount that bears the same ratio as—

(A) the spinner's production of ring spun cotton yarns, measuring less than 83.33 decitex (exceeding 120 metric number) from pima cotton grown in the United States in single and plied form during the period January 1, 1998, through December 31, 2003 (as evidenced by an affidavit provided by the spinner) bears to —

(B) the production of the yarns described in subparagraph (A) during the period January 1, 1998, through December 31, 2003, for all spinners who qualify under this paragraph.

(3) 50 percent of the amounts in the Trust Fund shall be paid annually to those manufacturers who cut and sew cotton shirts in the United States who certify that they used imported cotton fabric during the period January 1, 1998, through July 1, 2003, and shall be allocated to each such manufacturer in an amount that bears the same ratio as—

(A) the dollar value (excluding duty, shipping, and related costs) of imported woven cotton shirting fabric of 80s or higher count and 2-ply in warp purchased by the manufacturer during calendar year 2002 (as evidenced by an affidavit from the manufacturer that meets the requirements of subsection (d)) used in the manufacturing of men's and boys' cotton shirts, bears to—

(B) the dollar value (excluding duty, shipping, and related costs) of the fabric described in subparagraph (A) purchased during calendar year 2002 by all manufacturers who qualify under this paragraph.

(d) Affidavit of Shirting Manufacturers.—The affidavit required by subsection (c)(3)(A) is a notarized affidavit provided by an officer of the manufacturer of men's and boys' shirts concerned that affirms—

(1) that the manufacturer used imported cotton fabric during the period January 1, 1998, through July 1, 2003, to cut and sew men's and boys' woven cotton shirts in the United States;

(2) the dollar value of imported woven cotton shirting fabric of 80s or higher count and 2-ply in warp purchased during calendar year 2002;

(3) that the manufacturer maintains invoices along with other supporting documentation (such as price lists and other technical descriptions of the fabric qualities) showing the dollar value of such fabric purchased, the date of purchase, and evidencing the fabric as woven cotton fabric of 80s or higher count and 2-ply in warp; and

(4) that the fabric was suitable for use in the manufacturing of men's and boys' cotton shirts.

(e) Date of Purchase.—For purposes of the affidavit under subsection (d), the date of purchase shall be the invoice date, and the dollar value shall be determined excluding duty, shipping, and related costs.

(f) Affidavit of Yarn Spinners.—The affidavit required by subsection (c)(2)(A) is a notarized affidavit provided by an officer of the producer of ring spun yarns that affirms—

(1) that the producer used pima cotton grown in the United States during the period January 1, 2002, through December 31, 2002, to produce ring spun cotton yarns, measuring less than 83.33 decitex (exceeding 120 metric number), in single and plied form during 2002;

(2) the quantity, measured in pounds, of ring spun cotton yarns, measuring less than 83.33 decitex (exceeding 120 metric number), in single and plied form during calendar year 2002; and

(3) that the producer maintains supporting documentation showing the quantity of such yarns produced, and evidencing the yarns as ring spun cotton yarns, measuring less than 83.33 decitex (exceeding 120 metric number), in single and plied form during calendar year 2002.

(g) No Appeal.—Any amount paid by the Commissioner of the Bureau of Customs and Border Protection under this section shall be final and not subject to appeal or protest.

Procedures for Claiming a Distribution Under the Statute

Claimants are directed to follow the legal procedures set forth in section 407 of the Act to claim a distribution from the Pima Cotton Trust Fund.

Deadlines for Claim/Affidavit Submission

In order for CBP to be able to comply with the statutory requirement to make the first payment in fiscal year 2007, all claims and affidavits for fiscal year 2007 distributions must be mailed to CBP and postmarked no later than July 1, 2007. Claims and affidavits for fiscal year 2008 distributions must be mailed to CBP and postmarked no later than March 1, 2008.

Address

Claims and affidavits for distribution from the Pima Cotton Trust Fund, including any supporting documentation that may be subsequently requested by CBP, must be sent to: U.S. Customs and Border Protection, Office of International Trade, Summary and Account Management Division, Attention: Pima Cotton Trust Fund Unit, 1300 Pennsylvania Avenue, NW., Washington, DC 20229.

Affidavit Content

Claimants are advised to note that sections 407(d) and (f) of the Act require each affidavit to contain a definitive statement regarding period of use, dollar amount or quantity, and supporting documentation. Claimants need not submit supporting documentation to CBP with their affidavits, but must maintain such documentation as they have affirmed to exist in their respective affidavits.

Dated: May 21, 2007.

Deborah J. Spero,

Acting Commissioner, U.S. Customs and Border Protection.