02-13228. Cotton Board Rules and Regulations: Adjusting Supplemental Assessment on Imports, (2002 Amendments)  

  • Start Preamble

    AGENCY:

    Agricultural Marketing Service, USDA.

    ACTION:

    Final rule.

    SUMMARY:

    The Agricultural Marketing Service (AMS) is amending the Cotton Board Rules and Regulations by lowering 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:

    June 27, 2002.

    Start Further Info

    FOR FURTHER INFORMATION CONTACT:

    Whitney Rick, Chief, Research and Promotion Staff, Cotton Program, AMS, USDA, Stop 0224, 1400 Independence Ave., SW, Washington, DC 20250-0224, telephone (202) 720-2259, facsimile (202) 690-1718, or email at whitney.rick@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 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 lower the assessments paid by the importers under the Cotton Research and Promotion Order. Even though the assessment would be lowered, the decrease is small and will not significantly affect small businesses. The current assessment on imported cotton is $0.009965 per kilogram of imported cotton. The new assessment is $0.00862, a decrease of $0.001345 or a 13.5 percent decrease. From January through December 2001 approximately $22 million was collected. Should the volume of cotton products imported into the U.S. remain at the same level in 2002, one could expect the decreased assessment to generate approximately $19 million or a 13.5 percent decrease from 2001.

    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 Start Printed Page 36794authorized 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 decrease 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 average 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 (66 FR 58051) on November 20, 2001, for the purpose of calculating supplemental assessments on imported cotton is $1.1111 per kilogram. This number was calculated using the annual weighted average price received by farmers for Upland cotton during the calendar year 2000 which was $0.504 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 2001, which is $0.382 per pound, the new value of imported cotton is $0.8422 per kilogram. The amended value is $.2689 per kilogram less 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 × .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 2001 calendar year weighted average price received by producers for Upland cotton is $0.382 per pound or $0.8422 per kg. (0.382 × 2.2046).

    Five tenths of one percent of the average price in kg. equals $0.004211 per kg. (0.8422 × .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 $0.004211 per kg. which equals $0.00862 per kg.

    The current assessment on imported cotton is $0.009965 per kilogram of imported cotton. The amended assessment is $0.00862, a decrease of $0.001345 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 2001.

    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.

    A proposed rule with request for comments was published in the Federal Register (67 FR 15495) on April 2, 2002. No comments were received during the period (April 2 through May 2, 2002).

    Several changes in the harmonized tariff schedule numbering have occurred. Modifications to the harmonized tariff schedule were published in the December 26, 2001, Federal Register at 66 FR 66549 (Proclamation 7515 of December 18, 2001, by the President of the United States of America). These changes are as follows: Numbers changed:

    Old No.New No(s).Conversion factorAssessment cents/kg
    560790200056079090000.88890.7662
    600220300060032030000.86810.7483
    60022060006003306000 60034060000.28940.2495
    6002420006005210000 6005220000 6005220000 6005230000 60052400000.86810.7483
    Start Printed Page 36795
    60024300106005310010 6005320010 6005330010 6005340010 6005410010 6005420010 6005430010 60054400100.28940.2495
    60024300806005310080 6005320080 6005330080 6005340080 6005410080 6005420080 6005430080 60054400800.28940.2495
    60029210006006211000 6006221000 6006231000 60062410001.15740.9977
    60029300406006310040 6006320040 6006330040 60063400400.11570.0997
    60029300806006310080 6006320080 6006330080 6006340080 6006410085 6006420085 6006430085 60064400850.11570.0997
    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

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

    Start Authority

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

    End Authority End Part 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 $0.862 per kilogram.

    (3) * * *

    (ii) * * *

    Import Assessment Table

    [Raw Cotton Fiber]

    HTS No.Conv. fact.Cents/kg.
    520100050000.8620
    520100120000.8620
    520100140000.8620
    520100180000.8620
    520100220000.8620
    520100240000.8620
    520100280000.8620
    520100340000.8620
    520100380000.8620
    52041100001.11110.9578
    52042000001.11110.9578
    52051110001.11110.9578
    52051120001.11110.9578
    52051210001.11110.9578
    52051220001.11110.9578
    52051310001.11110.9578
    52051320001.11110.9578
    52051410001.11110.9578
    52052100201.11110.9578
    52052100901.11110.9578
    52052200201.11110.9578
    52052200901.11110.9578
    52052300201.11110.9578
    52052300901.11110.9578
    52052400201.11110.9578
    52052400901.11110.9578
    52053100001.11110.9578
    52053200001.11110.9578
    52053300001.11110.9578
    52053400001.11110.9578
    52054100201.11110.9578
    52054100901.11110.9578
    52054200201.11110.9578
    52054200901.11110.9578
    52054400201.11110.9578
    52054400901.11110.9578
    52061200000.55560.4789
    52061300000.55560.4789
    52061400000.55560.4789
    52062200000.55560.4789
    52062300000.55560.4789
    52062400000.55560.4789
    52063100000.55560.4789
    52071000001.11110.9578
    52079000000.55560.4789
    52081120201.14550.9874
    52081120401.14550.9874
    52081120901.14550.9874
    52081140201.14550.9874
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    56079090000.88890.7662
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    * * * * *
    Start Signature

    Dated: May 21, 2002.

    Kenneth C. Clayton,

    Acting Administrator, Agricultural Marketing Service.

    End Signature End Supplemental Information

    [FR Doc. 02-13228 Filed 5-24-02; 8:45am]

    BILLING CODE 3410-02-P

Document Information

Effective Date:
6/27/2002
Published:
05/28/2002
Department:
Agricultural Marketing Service
Entry Type:
Rule
Action:
Final rule.
Document Number:
02-13228
Dates:
June 27, 2002.
Pages:
36793-36799 (7 pages)
Docket Numbers:
Doc # CN-02-002
Topics:
Advertising, Agricultural research, Cotton, Marketing agreements, Reporting and recordkeeping requirements
PDF File:
02-13228.pdf
CFR: (1)
7 CFR 1205.510