01-20188. 2001 Proposed Amendment to Cotton Board Rules and Regulations Adjusting Supplemental Assessment on Imports  

  • Start Preamble

    AGENCY:

    Agricultural Marketing Service, USDA.

    ACTION:

    Proposed rule.

    SUMMARY:

    The Agricultural Marketing Service (AMS) is proposing to amend 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.

    DATE:

    Comments must be received on or before September 12, 2001.

    ADDRESSES:

    Interested persons are invited to submit written comments concerning this proposed rule. Comments may be mailed to USDA, AMS, Cotton Program, STOP 0224, 1400 Independence Avenue, SW, Washington, DC 20250-0224 or Email cottoncomments@usda.gov. Comments should reference the docket number and the date and page number of this issue of the Federal Register and will be available for public inspection at this address during the hours of 8:00 a.m. to 4:00 p.m., Monday through Friday.

    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

    This proposed rule has been determined to be “not significant” for purposes of Executive Order 12866, and, therefore, has not been reviewed by the Office of Management and Budget.

    Executive Order 12988

    This proposed rule has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have retroactive effect. This proposed 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.Start Printed Page 42465

    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 proposed rule would 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 proposed rule would 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 proposed assessment is $0.009965, an increase of $0.000132 or a 1.34 percent increase from the current assessment. 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). Proposed rule implementing the amended Order were 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 proposed rule would 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 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 (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 proposed 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 x 2.2046) = 1.1111.

    Five tenths of one percent of the average price in kg. equals $0.005556 per kg. (1.1111 x .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 proposed 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 the 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:Start Printed Page 42466

    Old No.New No.Conversion factorAssessment cents/kg.
    630391000063039100100.64290.6406
    63039100200.64290.6406

    A thirty 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 proposal would slightly raise the assessments paid by importers under the Cotton Research and Promotion Order and would ensure that the measurements collected for imported cotton content products remain similar to those paid on domestically produced cotton. Accordingly, the change proposed 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, it is proposed that 7 CFR Part 1205 be amended as follows:

    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. 2. In § 1205.510, paragraph (b)(2) and the table in paragraph (b)(3)(ii) are revised to read as follows:

    End Authority
    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
    52052400901.11111.1072
    52053100001.11111.1072
    52053200001.11111.1072
    52053300001.11111.1072
    52053400001.11111.1072
    52054100201.11111.1072
    52054100901.11111.1072
    52054200201.11111.1072
    52054200901.11111.1072
    52054400201.11111.1072
    52054400901.11111.1072
    52061200000.55560.5537
    52061300000.55560.5537
    52061400000.55560.5537
    52062200000.55560.5537
    52062300000.55560.5537
    52062400000.55560.5537
    52063100000.55560.5537
    52071000001.11111.1072
    52079000000.55560.5537
    52081120201.14551.1415
    52081120401.14551.1415
    52081120901.14551.1415
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    52081140601.14551.1415
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    * * * * *
    Start Signature

    Dated: August 7, 2001.

    Kenneth C. Clayton,

    Acting Administrator, Agricultural Marketing Service.

    End Signature End Part End Supplemental Information

    [FR Doc. 01-20188 Filed 8-10-01; 8:45 am]

    BILLING CODE 3410-02-P

Document Information

Published:
08/13/2001
Department:
Agricultural Marketing Service
Entry Type:
Proposed Rule
Action:
Proposed rule.
Document Number:
01-20188
Dates:
Comments must be received on or before September 12, 2001.
Pages:
42464-42469 (6 pages)
Docket Numbers:
CN-01-001
Topics:
Advertising, Agricultural research, Cotton, Marketing agreements, Reporting and recordkeeping requirements
PDF File:
01-20188.pdf
CFR: (1)
7 CFR 1205.510