[Federal Register Volume 64, Number 74 (Monday, April 19, 1999)]
[Proposed Rules]
[Pages 19072-19084]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-9634]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1205

[CN-99-002]


1999 Proposed Amendment to Cotton Board Rules and Regulations 
Adjusting Supplemental Assessment on Imports

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 lowering the value assigned 
to imported cotton for the purpose of calculating supplemental 
assessments collected for use by the Cotton Research and Promotion 
Program. This adjustment is required by this regulation 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.

DATES: Comments must be received on or before May 19, 1999.

ADDRESSES: Comments may be mailed to USDA, AMS Cotton Program, STOP 
0224, 1400 Independence Avenue, SW, Washington, DC 20250-0224. All 
comments received will be available for public inspection at this 
address during the hours 8:00 a.m. to 4:00 p.m. Monday through Friday.

FOR FURTHER INFORMATION CONTACT: Whitney Rick, (202) 720-2259.

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.
    There are an estimated 16,000 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 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 $0.011850 per kilogram 
of imported cotton. The proposed assessment is $0.011397, a decrease of 
$0.000453 or a 3.8 percent decrease from the current assessment. From 
January through December 1998 approximately $20.9 million was collected 
at the $0.011850 per kilogram

[[Page 19073]]

rate. Should the volume of cotton products imported into the U.S. 
remain at the same level in 1999, one could expect the decreased 
assessment to generate $20.1 million or a 3.8 percent decrease from 
1998.

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 rules 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 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 contend 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 (63 FR 27818) on May 21, 1998, for the purpose of calculating 
supplemental assessments on imported cotton is $1.4881 per kilogram. 
This number was calculated using the annual weighted average price 
received by farmers for Upland cotton during the calendar year 1997 
which was $0.675 per pound and multiplying by the conversation factor 
2.2046. Using the Average Weighted Price Received by U.S. farmers for 
Upland cotton for the calendar year 1998, which is $0.634 per pound, 
the new value of imported cotton is $1.3977 per kilogram. The amended 
value is $0.0904 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 x .453597).
    $1 per bale assessment equals $0.002000 per pound (1500) or 
$0.004409 per kg. (1226.8)

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

    The 1998 calendar year weigthed average price received by producers 
for Upland cotton is $0.634 per pound or $1.3977 per kg. 
(0.634 x 2.2046)=1.3977.
    Five tenths of one percent of the average price in kg. equals 
$0.006988 per kg. (1.3977 x .005).

Total Assessment

    The total assessment per kilogram of raw cotton in obtained by 
adding the $1 per bale equivalent assessment of $0.004409 per kg. and 
the supplemental assessment $0.006988 per kg. which equals $0.011397 
per kg.
    The current assessment on imported cotton is $0.011850 per kilogram 
of imported cotton. The proposed assessment is $0.011397, a decrease of 
$0.000453 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 1998.
    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. Therefore, the assessment rate is not affected 
by the change. 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:

----------------------------------------------------------------------------------------------------------------
                                                                                    Conversion      Assessment
                           Old number                               New number        factor         cents/kg.
----------------------------------------------------------------------------------------------------------------
6302100010......................................................      6302100005          1.1689          1.3322
                                                                      6302100008          1.1689          1.3322
                                                                      6302100015          1.1689          1.3322
----------------------------------------------------------------------------------------------------------------


[[Page 19074]]

    A thirty day 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 lower the assessments 
paid by importers under the Cotton Research and Promotion Order. 
Accordingly, the change proposed in this rule, if adopted, should be 
implemented as soon as possible.

List of Subjects in 7 CFR Part 1205

    Advertising, Agricultural research, Cotton, Marketing agreements, 
Reporting and recordkeeping requirements.

    For the reasons set forth in the preamble, 7 CFR part 1205 is 
proposed to be amended as follows:

PART 1205--COTTON RESEARCH AND PROMOTION

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

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

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


Sec. 1205.510  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 $1.3977 per kilogram.
    (3) * * *
    (ii) * * *

                         Import Assessment Table
                           [Raw Cotton Fiber]
------------------------------------------------------------------------
                                             Conventional
                  HTS No.                      factors       Cents/kg.
------------------------------------------------------------------------
5201000500................................         0              1.1397
5201001200................................         0              1.1397
5201001400................................         0              1.1397
5201001800................................         0              1.1397
5201002200................................         0              1.1397
5201002400................................         0              1.1397
5201002800................................         0              1.1397
5201003400................................         0              1.1397
5201003800................................         0              1.1397
5204110000................................         1.1111         1.2663
5204200000................................         1.1111         1.2663
5205111000................................         1.1111         1.2663
5205112000................................         1.1111         1.2663
5205121000................................         1.1111         1.2663
5205122000................................         1.1111         1.2663
5205131000................................         1.1111         1.2663
5205132000................................         1.1111         1.2663
5205141000................................         1.1111         1.2663
5205210020................................         1.1111         1.2663
5205210090................................         1.1111         1.2663
5205220020................................         1.1111         1.2663
5205220090................................         1.1111         1.2663
5205230020................................         1.1111         1.2663
5205230090................................         1.1111         1.2663
5205240020................................         1.1111         1.2663
5205240090................................         1.1111         1.2663
5205310000................................         1.1111         1.2663
5205320000................................         1.1111         1.2663
5205330000................................         1.1111         1.2663
5205340000................................         1.1111         1.2663
5205410020................................         1.1111         1.2663
5205410090................................         1.1111         1.2663
5205420020................................         1.1111         1.2663
5205420090................................         1.1111         1.2663
5205440020................................         1.1111         1.2663
5205440090................................         1.1111         1.2663
5206120000................................         0.5556         0.6332
5206130000................................         0.5556         0.6332
5206140000................................         0.5556         0.6332
5206220000................................         0.5556         0.6332
5206230000................................         0.5556         0.6332
5206240000................................         0.5556         0.6332
5206310000................................         0.5556         0.6332
5207100000................................         1.1111         1.2663
5207900000................................         0.5556         0.6332
5208112020................................         1.1455         1.3055
5208112040................................         1.1455         1.3055
5208112090................................         1.1455         1.3055
5208114020................................         1.1455         1.3055
5208114060................................         1.1455         1.3055
5208114090................................         1.1455         1.3055

[[Page 19075]]

 
5208118090................................         1.1455         1.3055
5208124020................................         1.1455         1.3055
5208124040................................         1.1455         1.3055
5208124090................................         1.1455         1.3055
5208126020................................         1.1455         1.3055
5208126040................................         1.1455         1.3055
5208126060................................         1.1455         1.3055
5208126090................................         1.1455         1.3055
5208128020................................         1.1455         1.3055
5208128090................................         1.1455         1.3055
5208130000................................         1.1455         1.3055
5208192020................................         1.1455         1.3055
5208192090................................         1.1455         1.3055
5208194020................................         1.1455         1.3055
5208194090................................         1.1455         1.3055
5208196020................................         1.1455         1.3055
5208196090................................         1.1455         1.3055
5208224040................................         1.1455         1.3055
5208224090................................         1.1455         1.3055
5208226020................................         1.1455         1.3055
5208226060................................         1.1455         1.3055
5208228020................................         1.1455         1.3055
5208230000................................         1.1455         1.3055
5208292020................................         1.1455         1.3055
5208292090................................         1.1455         1.3055
5208294090................................         1.1455         1.3055
5208296090................................         1.1455         1.3055
5208298020................................         1.1455         1.3055
5208312000................................         1.1455         1.3055
5208321000................................         1.1455         1.3055
5208323020................................         1.1455         1.3055
5208323040................................         1.1455         1.3055
5208323090................................         1.1455         1.3055
5208324020................................         1.1455         1.3055
5208324040................................         1.1455         1.3055
5208325020................................         1.1455         1.3055
5208330000................................         1.1455         1.3055
5208392020................................         1.1455         1.3055
5208392090................................         1.1455         1.3055
5208394090................................         1.1455         1.3055
5208396090................................         1.1455         1.3055
5208398020................................         1.1455         1.3055
5208412000................................         1.1455         1.3055
5208416000................................         1.1455         1.3055
5208418000................................         1.1455         1.3055
5208421000................................         1.1455         1.3055
5208423000................................         1.1455         1.3055
5208424000................................         1.1455         1.3055
5208425000................................         1.1455         1.3055
5208430000................................         1.1455         1.3055
5208492000................................         1.1455         1.3055
5208494020................................         1.1455         1.3055
5208494090................................         1.1455         1.3055
5208496010................................         1.1455         1.3055
5208496090................................         1.1455         1.3055
5208498090................................         1.1455         1.3055
5208512000................................         1.1455         1.3055
5208516060................................         1.1455         1.3055
5208518090................................         1.1455         1.3055
5208523020................................         1.1455         1.3055
5208523045................................         1.1455         1.3055
5208523090................................         1.1455         1.3055
5208524020................................         1.1455         1.3055
5208524045................................         1.1455         1.3055
5208524065................................         1.1455         1.3055
5208525020................................         1.1455         1.3055
5208530000................................         1.1455         1.3055
5208592025................................         1.1455         1.3055
5208592095................................         1.1455         1.3055
5208594090................................         1.1455         1.3055

[[Page 19076]]

 
5208596090................................         1.1455         1.3055
5209110020................................         1.1455         1.3055
5209110035................................         1.1455         1.3055
5209110090................................         1.1455         1.3055
5209120020................................         1.1455         1.3055
5209120040................................         1.1455         1.3055
5209190020................................         1.1455         1.3055
5209190040................................         1.1455         1.3055
5209190060................................         1.1455         1.3055
5209190090................................         1.1455         1.3055
5209210090................................         1.1455         1.3055
5209220020................................         1.1455         1.3055
5209220040................................         1.1455         1.3055
5209290040................................         1.1455         1.3055
5209290090................................         1.1455         1.3055
5209313000................................         1.1455         1.3055
5209316020................................         1.1455         1.3055
5209316035................................         1.1455         1.3055
5209316050................................         1.1455         1.3055
5209316090................................         1.1455         1.3055
5209320020................................         1.1455         1.3055
5209320040................................         1.1455         1.3055
5209390020................................         1.1455         1.3055
5209390040................................         1.1455         1.3055
5209390060................................         1.1455         1.3055
5209390080................................         1.1455         1.3055
5209390090................................         1.1455         1.3055
5209413000................................         1.1455         1.3055
5209416020................................         1.1455         1.3055
5209416040................................         1.1455         1.3055
5209420020................................         1.0309         1.1749
5209420040................................         1.0309         1.1749
5209430030................................         1.1455         1.3055
5209430050................................         1.1455         1.3055
5209490020................................         1.1455         1.3055
5209490090................................         1.1455         1.3055
5209516035................................         1.1455         1.3055
5209516050................................         1.1455         1.3055
5209520020................................         1.1455         1.3055
5209590025................................         1.1455         1.3055
5209590040................................         1.1455         1.3055
5209590090................................         1.1455         1.3055
5210114020................................         0.6873         0.7833
5210114040................................         0.6873         0.7833
5210116020................................         0.6873         0.7833
5210116040................................         0.6873         0.7833
5210116060................................         0.6873         0.7833
5210118020................................         0.6873         0.7833
5210120000................................         0.6873         0.7833
5210192090................................         0.6873         0.7833
5210214040................................         0.6873         0.7833
5210216020................................         0.6873         0.7833
5210216060................................         0.6873         0.7833
5210218020................................         0.6873         0.7833
5210314020................................         0.6873         0.7833
5210314040................................         0.6873         0.7833
5210316020................................         0.6873         0.7833
5210318020................................         0.6873         0.7833
5210414000................................         0.6873         0.7833
5210416000................................         0.6873         0.7833
5210418000................................         0.6873         0.7833
5210498090................................         0.6873         0.7833
5210514040................................         0.6873         0.7833
5210516020................................         0.6873         0.7833
5210516040................................         0.6873         0.7833
5210516060................................         0.6873         0.7833
5211110090................................         0.6873         0.7833
5211120020................................         0.6873         0.7833
5211190020................................         0.6873         0.7833
5211190060................................         0.6873         0.7833

[[Page 19077]]

 
5211210025................................         0.6873         0.7833
5211210035................................         0.4165         0.4747
5211210050................................         0.6873         0.7833
5211290090................................         0.6873         0.7833
5211320020................................         0.6873         0.7833
5211390040................................         0.6873         0.7833
5211390060................................         0.6873         0.7833
5211490020................................         0.6873         0.7833
5211490090................................         0.6873         0.7833
5211590025................................         0.6873         0.7833
5212146090................................         0.9164         1.0444
5212156020................................         0.9164         1.0444
5212216090................................         0.9164         1.0444
5509530030................................         0.5556         0.6332
5509530060................................         0.5556         0.6332
5513110020................................         0.4009         0.4569
5513110040................................         0.4009         0.4569
5513110060................................         0.4009         0.4569
5513110090................................         0.4009         0.4569
5513120000................................         0.4009         0.4569
5513130020................................         0.4009         0.4569
5513210020................................         0.4009         0.4569
5513310000................................         0.4009         0.4569
5514120020................................         0.4009         0.4569
5516420060................................         0.4009         0.4569
5516910060................................         0.4009         0.4569
5516930090................................         0.4009         0.4569
5601210010................................         1.1455         1.3055
5601210090................................         1.1455         1.3055
5601300000................................         1.1455         1.3055
5602109090................................         0.5727         0.6527
5602290000................................         1.1455         1.3055
5602906000................................         0.526          0.5995
5604900000................................         0.5556         0.6332
5607902000................................         0.8889         1.0131
5608901000................................         1.1111         1.2663
5608902300................................         1.1111         1.2663
5609001000................................         1.1111         1.2663
5609004000................................         0.5556         0.6332
5701104000................................         0.0556         0.0634
5701109000................................         0.1111         0.1266
5701901010................................         1.0444         1.1903
5702109020................................         1.1            1.2537
5702312000................................         0.0778         0.0887
5702411000................................         0.0722         0.0823
5702412000................................         0.0778         0.0887
5702421000................................         0.0778         0.0887
5702913000................................         0.0889         0.1013
5702991010................................         1.1111         1.2663
5702991090................................         1.1111         1.2663
5703900000................................         0.4489         0.5116
5801210000................................         1.1455         1.3055
5801230000................................         1.1455         1.3055
5801250010................................         1.1455         1.3055
5801250020................................         1.1455         1.3055
5801260020................................         1.1455         1.3055
5802190000................................         1.1455         1.3055
5802300030................................         0.5727         0.6527
5804291000................................         1.1455         1.3055
5806200010................................         0.3534         0.4028
5806200090................................         0.3534         0.4028
5806310000................................         1.1455         1.3055
5806400000................................         0.4296         0.4896
5808107000................................         0.5727         0.6527
5808900010................................         0.5727         0.6527
5811002000................................         1.1455         1.3055
6001106000................................         1.1455         1.3055
6001210000................................         0.8591         0.9791
6001220000................................         0.2864         0.3264
6001910010................................         0.8591         0.9791

[[Page 19078]]

 
6001910020................................         0.8591         0.9791
6001920020................................         0.2864         0.3264
6001920030................................         0.2864         0.3264
6001920040................................         0.2864         0.3264
6002203000................................         0.8681         0.9894
6002206000................................         0.2894         0.3298
6002420000................................         0.8681         0.9894
6002430010................................         0.2894         0.3298
6002430080................................         0.2894         0.3298
6002921000................................         1.1574         1.3191
6002930040................................         0.1157         0.1319
6002930080................................         0.1157         0.1319
6101200010................................         1.0094         1.1504
6101200020................................         1.0094         1.1504
6102200010................................         1.0094         1.1504
6102200020................................         1.0094         1.1504
6103421020................................         0.8806         1.0036
6103421040................................         0.8806         1.0036
6103421050................................         0.8806         1.0036
6103421070................................         0.8806         1.0036
6103431520................................         0.2516         0.2867
6103431540................................         0.2516         0.2867
6103431550................................         0.2516         0.2867
6103431570................................         0.2516         0.2867
6104220040................................         0.9002         1.026
6104220060................................         0.9002         1.026
6104320000................................         0.9207         1.0493
6104420010................................         0.9002         1.026
6104420020................................         0.9002         1.026
6104520010................................         0.9312         1.0613
6104520020................................         0.9312         1.0613
6104622006................................         0.8806         1.0036
6104622011................................         0.8806         1.0036
6104622016................................         0.8806         1.0036
6104622021................................         0.8806         1.0036
6104622026................................         0.8806         1.0036
6104622028................................         0.8806         1.0036
6104622030................................         0.8806         1.0036
6104622060................................         0.8806         1.0036
6104632006................................         0.3774         0.4301
6104632011................................         0.3774         0.4301
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6108320025................................         0.2489         0.2837

[[Page 19079]]

 
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6114301020................................         0.2572         0.2931

[[Page 19080]]

 
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[[Page 19081]]

 
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[[Page 19082]]

 
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6216000800................................         0.2351         0.2679

[[Page 19083]]

 
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6304920000................................         0.9351         1.0657
6505901540................................         1.181          1.346
6505902060................................         0.9935         1.1323
6505902545................................         0.5844         0.666
------------------------------------------------------------------------


[[Page 19084]]

* * * * *
    Dated: April 13, 1999.
Enrique E. Figueroa,
Administrator, Agricultural Marketing Service.
[FR Doc. 99-9634 Filed 4-16-99; 8:45 am]
BILLING CODE 3410-02-P