2015-21865. Cotton Board Rules and Regulations: Adjusting Supplemental Assessment on Imports (2015 Amendments)

AGENCY:

Agricultural Marketing Service, USDA.

ACTION:

Proposed rule.

SUMMARY:

AMS proposes to amend the Cotton Board Rules and Regulations by decreasing the value assigned to imported cotton for calculating supplemental assessments collected for use by the Cotton Research and Promotion Program. The amendment is required each year to ensure that assessments collected on imported cotton and the cotton content of imported products will be the same as those paid on domestically produced cotton.

AMS is publishing this amendment as a direct final rule without prior proposal because the action is contemplated by statute and required by regulation and the agency anticipates no significant adverse comment. AMS has explained its reasons in the preamble of the direct final rule. If AMS receives no significant adverse comment during the comment period, no further action on this proposed rule will be taken. If, however, AMS receives significant adverse comment, AMS will withdraw the direct final rule and it will not take effect. In that case, AMS will address all public comments in a subsequent final rule based on this proposed rule. AMS will not institute a second comment period on this rule. Any parties interested in commenting must do so during this comment period. This proposed rule is a companion document to the Agricultural Marketing Service's (AMS) direct final rule (published today in the “Rules and Regulations” section of the Federal Register).

DATES:

Comments must be received on or before October 5, 2015.

ADDRESSES:

Written comments may be submitted to the addresses specified below. All comments will be made available to the public. Please do not include any personally identifiable information (such as name, address, or other contact information) or confidential business information that you do not want publically disclosed. All comments may be posted on the Internet and can be retrieved by most Internet search engines. Comments may be submitted anonymously.

Comments, identified by AMS-CN-15-0013, may be submitted electronically through the Federal eRulemaking Portal at http://www.regulations.gov. Please follow the instructions for submitting comments. In addition, comments may be submitted by mail or hand delivery to Cotton Research and Promotion Staff, Cotton and Tobacco Program, AMS, USDA, 100 Riverside Parkway, Suite 101, Fredericksburg, Virginia 22406. Comments should be submitted in triplicate. All comments received will be made available for public inspection at Cotton and Tobacco Program, AMS, USDA, 100 Riverside Parkway, Suite 101, Fredericksburg, Virginia 22406. A copy of this document may be found at: www.regulations.gov.

FOR FURTHER INFORMATION CONTACT:

Shethir M. Riva, Chief, Research and Promotion Staff, Cotton and Tobacco Program, AMS, USDA, 100 Riverside Parkway, Suite 101, Fredericksburg, Virginia 22406, telephone [phone], facsimile [phone], or email at [e-mail].

SUPPLEMENTARY INFORMATION:

As noted above, in the “Rules and Regulations” section of today's Federal Register, the direct final rule being published would amend the value assigned to imported cotton in the Cotton Board Rules and Regulations (7 CFR 1205.510(b)(2)) that is used to determine the Cotton Research and Promotion assessment on imported cotton and cotton products. The total value of assessment levied on cotton imports is the sum of two parts. The first part of the assessment is based on the weight of cotton imported—levied at a rate of $1 per bale of cotton, which is equivalent to 500 pounds, or $1 per 226.8 kilograms of cotton. The second part of the import assessment (referred to as the supplemental assessment) is based on the value of imported cotton lint or the cotton contained in imported cotton products—levied at a rate of five-tenths of one percent of the value of domestically produced cotton.

Section 1205.510(b)(2) of the Cotton Research and Promotion Rules and Regulations provides for assigning the calendar year weighted average price received by U.S. farmers for Upland cotton to represent the value of imported cotton. This is so that the assessment on domestically produced cotton and the assessment on imported cotton and the cotton content of imported products is the same. 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 will yield an assessment that is the same as assessments paid on domestically produced cotton.

The current value of imported cotton as published in 2014 in the Federal Register (79 FR 36183) for the purpose of calculating assessments on imported cotton is $0.012728 per kilogram. Using the Average Weighted Price received by U.S. farmers for Upland cotton for the calendar year 2014, the direct final rule would amend the new value of imported cotton to $0.012013 per kilogram to reflect the price paid by U.S. farmers for Upland cotton during 2014.

An example of the complete assessment formula and how the 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 × 0.453597).

$1 per bale assessment equals $0.002000 per pound or $0.2000 cents per pound (1/500) or $0.004409 per kg or $0.4409 cents per kg. (1/226.8).

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

The 2014 calendar year weighted average price received by producers for Upland cotton is $0.690 per pound or $1.521 per kg. ($0.690 × 2.2046).

Five tenths of one percent of the average price equals $0.007604 per kg. (1.521 × 0.005).

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 $0.007604 per kg., which equals $0.012013 per kg.

The current assessment on imported cotton is $0.012728 per kilogram of imported cotton. The revised assessment in this direct final rule is $0.012013, a decrease of $0.000715 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 2014.

Import Assessment Table in section 1205.510(b)(3) indicates the total assessment rate ($ per kilogram) due for each Harmonized Tariff Schedule number that is subject to assessment. This table must be revised each year to reflect changes in supplemental assessment rates and any changes to the HTS numbers. In this direct final rule, AMS is amending the Import Assessment Table.

AMS believes that these amendments are necessary to ensure that assessments collected on imported cotton and the cotton content of imported products are the same as those paid on domestically produced cotton. Accordingly, changes reflected in this rule should be adopted and implemented as soon as possible since it is required by regulation.

The amendment proposed by this document is the same as the amendment contained in the direct final rule. Please refer to the preamble and regulatory text of the direct final rule for further information and the actual text of the amendment. Statutory review and Executive Orders for this proposed rule can be found in the SUPPLEMENTARY INFORMATION section of the direct final rule.

A 30-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 rule would decrease the assessments paid by importers under the Cotton Research and Promotion Order. An amendment is required to adjust the assessments collected on imported cotton and the cotton content of imported products to be the same as those paid on domestically produced cotton. Accordingly, the change in this rule, if adopted, should be implemented as soon as possible.

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

Dated: August 28, 2015.

Rex A. Barnes,

Associate Administrator.