E8-15754. Imports of Certain Cotton Shirting Fabric: Implementation of Tariff Rate Quota Established Under the Tax Relief and Health Care Act of 2006

AGENCY:

Department of Commerce, International Trade Administration.

ACTION:

Final Rule.

SUMMARY:

The Department of Commerce (“the Department”) publishes this final rule to adopt, without change, an interim final rule that implemented tariff rate quotas (“TRQ”) for a limited quantity of certain cotton shirting fabrics pursuant to Section 406 of the Tax Relief and Health Care Act of 2006 (“the Act”), which President Bush signed into law on December 20, 2006 (Pub. L. 109-432). Section 406(b)(1) of the Act authorizes the Secretary of Commerce to issue licenses to eligible manufacturers under headings 9902.52.08 through 9902.52.19 of the Harmonized Tariff Schedule of the United States, specifying the restrictions under each such license on the quantity of cotton woven fabrics that may be entered each year by or on behalf of the manufacturer.

DATES:

This final rule is effective July 10, 2008.

ADDRESSES:

FOR FURTHER INFORMATION CONTACT:

Laurie Mease, Office of Textiles and Apparel, U.S. Department of Commerce, [phone].

SUPPLEMENTARY INFORMATION:

A. Background

President Bush signed the Tax Relief and Health Care Act of 2006 into law on December 20, 2006 (Pub. L. 109-432). Section 406(b)(1) of the Act authorizes the Secretary of Commerce to issue licenses to eligible manufacturers under headings 9902.52.08 through 9902.52.19 of the Harmonized Tariff Schedule of the United States, specifying the restrictions under each such license on the quantity of cotton woven fabrics that may be entered each year by or on behalf of the manufacturer.

The Act creates an annual tariff rate quota providing for temporary reductions through December 31, 2009 in the import duties of cotton woven fabrics suitable for making cotton shirts (new Harmonized Tariff Schedule of the United States (HTS) headings 9902.52.08, 9902.52.09, 9902.52.10, 9902.52.11, 9902.52.12, 9902.52.13, 9902.52.14, 9902.52.15, 9902.52.16, 9902.52.17, 9902.52.18, and 9902.52.19). The reduction in duty is limited to 85 percent of the total square meter equivalents of all imported woven fabrics of cotton containing 85 percent or more by weight of cotton used by manufacturers in cutting and sewing men's and boys' cotton shirts in the United States and purchased by such manufacturers during calendar year 2000.

The Act requires that the Secretary of Commerce must issue licenses and ensure that the tariff rate quotas are fairly allocated to eligible manufacturers under such headings 9902.52.08 through 9902.52.19.

On July 24, 2007, the Department published an interim final rule that established eligibility criteria and application requirements to receive an allocation under the TRQ. S ee Imports of Certain Cotton Shirting Fabric: Implementation of Tariff Rate Quota Established Under the Tax Relief and Health Care Act of 200 6, 72 FR 40235 (July 24, 2007). The interim regulations were effective upon publication to prevent costs incurred by TRQ recipients that would have, in effect, nullified duty benefits, particularly for those TRQ recipients who had small shipments.

The Department intends to make its determination regarding allocation of the tariff rate quota no later than December 31 of the year preceding the tariff rate quota year. Commerce anticipates publishing a Federal Register Notice (FRN) each September soliciting license applications for the following calendar year. Applications will be due within 30 days of the FRN's publication and licenses will be issued to eligible manufacturers within 60 days of the application deadline.

The tariff rate quota licenses will be issued to eligible manufacturers on the basis of the percentage of each manufacturer's quantity of imported woven fabrics described under HTS headings 9902.52.08 through 9902.52.19 during calendar year 2000, compared to the imports of such fabric by all manufacturers that qualify for a tariff rate quota allocation.

Pursuant to statutory requirements, the tariff rate quota allocation will be limited to persons (including firms, corporations, or other legal entities) who cut and sew men's and boys' cotton shirts in the United States and who, during calendar year 2000, were manufacturers cutting and sewing men's and boys' cotton shirts in the United States from imported woven fabrics of cotton containing 85 percent or more by weight of cotton of the kind described in HTS headings 9902.52.08 through 9902.52.19 purchased by such manufacturers during calendar year 2000. Any manufacturer who becomes a successor-of-interest to a manufacturer of the cotton woven shirts described in HTS headings 9902.52.08 through 9902.52.19 during 2000 because of a reorganization or otherwise, shall be eligible to apply for a TRQ.

In order to receive a license, eligible manufactures must submit ITA Form 4156P entitled “Affidavit for Application for TRQ License Cotton Shirting Fabric Tariff Rate Quota” containing the following information:

(1) Company name, address, contact telephone number, e-mail address, federal tax identification number, name of person submitting the application, and title, or capacity in which the person is acting for the applicant.

(2) The name and address of each plant and/or contractor location in the United States where men's and boys' cotton shirts of imported woven fabric of the kind described in HTS headings 9902.52.08 through 9902.52.19 was cut and sewn in calendar year 2000.

(3) The date of purchase shall be (a) the invoice date if the manufacturer is not the importer of record; and (b) the date of entry if the manufacturer is the importer of record.

(4) The quantity of imported woven fabrics of cotton containing 85 percent or more by weight of cotton purchased during calendar year 2000 for use in the cutting and sewing of men's and boys' shirts in the United States.

At the conclusion of the application the applicant must attest that “all information contained in the application is complete and correct and no false claims, statements or representations have been made.” Applicants should be aware that, generally, pursuant to 31 U.S.C. §3729 persons providing false or fraudulent claims, and pursuant to 18 U.S.C. §1001, persons making materially false statements or representations, are subject to civil or criminal penalties, respectively. All applications must be notarized by a licensed public notary.

Any business confidential information provided in an application must be marked “business confidential.” Such information will be kept confidential and protected from disclosure to the full extent permitted by law.

The applicant must retain records substantiating the information provided in the application for a period of 3 years. Such records must be made available upon request by an appropriate government official.

Conditions of License Use

The importer of record of fabric entered or withdrawn from warehouse for consumption under a license must be the Licensee or an importer authorized by the Licensee to act on its behalf. A Licensee may only authorize an importer to import fabric under the license on its behalf by making such authorization in writing or by electronic notice to the importer and providing a copy of such authorization to the Department. The authorization must include the unique number of the license, must specify the type of fabric imported by micron count, and must be in the possession of the importer at the time of filing the entry summary or warehouse withdrawal for consumption (Customs Form 7501) or its electronic equivalent. The authorization also must include the unique PIN assigned by the licensee to the importer. A copy of the authorization and PIN assigned to each importer must be provided to the Department by fax [phone] or by mail to the Office of Textiles and Apparel, Room 3001, United States Department of Commerce, Washington, D.C. 20230. This authorization may only be withdrawn by notifying the importer, in writing or by electronic notice, with a copy provided to the Department. The Licensee also must advise the Department of each authorized importer's Importer of Record Identification Number.

The Licensee should inform its authorized importers that if they enter an amount less than the exact amount requested and authorized by the Import Approval, the importer must annotate the Import Approval form and send a copy to the Department and to the Licensee. This annotation will be used to correct the record of use of the license. Failure to provide such information could disrupt the orderly use of the license. Imports in excess of the amount of import approval are not authorized.

Public Comments

While the interim regulations became effective on July 24, 2007, the Department of Commerce solicited comments on the interim regulations and expressed particular interest in comments concerning any impact the regulations might have on small or medium sized businesses. The public comment period closed on September 24, 2007. The Department did not receive any comments on the interim regulations.

Action Being Taken by the Department of Commerce

The Department of Commerce is adopting without change the interim final rule that became effective July 24, 2007. Title 15, Part 336 of the Code of Federal Regulations sets forth regulations regarding the issuance and effect of licenses for the allocation of certain cotton shirting fabrics under the tariff rate quotas established by Section 406 of the Act.

Classification

Executive Order 12866: This rule has been determined to be not significant under EO 12866.

Paperwork Reduction Act: These regulations contain information collection requirements subject to the Paperwork Reduction Act (PRA). The information collection requirements have been approved by the Office of Management and Budget (OMB) under Control Number 0625-0260.

Notwithstanding any other provision of law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the PRA unless that collection of information displays a current valid OMB control number. The information collected will be used by the Department to allocate the tariff rate quota among manufacturers. Responses to the collection of information are required for a manufacturer to receive allocation of the tariff rate quota. Records substantiating information provided in an application must be retained. It is estimated that the annual burden for the collection will average one hour per application. This includes the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to the Office of Management and Budget, Washington, DC, 20503 (Attention: ITA Desk Officer).

Dated: July 3, 2008.

David Spooner,

Assistant Secretary for Import Administration.

List of Subjects in 15 CFR Part 336

• Imports
• Quotas
• Reporting and Record-keeping
• Tariffs
• Textiles

For reasons stated in the preamble, the Interim Final Rule, which was published on July 24, 2007 at 72 FR 40235, is adopted as final without change.