[Federal Register Volume 64, Number 103 (Friday, May 28, 1999)]
[Rules and Regulations]
[Pages 28883-28884]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-13764]



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 Rules and Regulations
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  Federal Register / Vol. 64, No. 103 / Friday, May 28, 1999 / Rules 
and Regulations  

[[Page 28883]]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 28

[CN-99-001]
RIN 0581-AB57


Revision of User Fees for 1999 Crop Cotton Classification 
Services to Growers

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Agricultural Marketing Service (AMS) is raising user fees 
for cotton producers for 1999 crop cotton classification services under 
the Cotton Statistics and Estimates Act in accordance with the formula 
provided in the Uniform Cotton Classing Fees Act of 1987. The 1998 user 
fee for this classification service was $1.30 per bale. This final rule 
would raise the fee for the 1999 crop to $1.35 per bale. The increase 
in fees resulted from the significant drop in cotton production for the 
1998 crop. The fee and the existing reserve are sufficient to cover the 
costs of providing classification services, including costs for 
administration, supervision, and development and maintenance of 
standards.

EFFECTIVE DATE: July 1, 1999.

FOR FURTHER INFORMATION CONTACT: Lee Cliburn, 202-720-2145.

SUPPLEMENTARY INFORMATION: A proposed rule detailing the revisions was 
published in the Federal Register on April 2,1999, (64 FR 15937). A 30-
day comment period was provided for interested persons to respond to 
the proposed rule. One comment, from a grower association, was received 
in opposition to the increase. No other comments were received in 
response to the proposed rule. The commentor stated that the fee 
increase, although small, would further erode its producers' economic 
condition when many of its members are in tough economic times. The fee 
increase is indeed small given the cost-per-unit currently borne by 
users of the service. The impact on growers should be minimal. In fact, 
we estimate that the new fee is less than one percent of the value of 
an average bale of cotton. In addition, this fee was calculated 
according to the formula provided for and required by the statute and 
is therefore made final in this rulemaking without change.
    This final rule has been determined to be not significant for 
purposes of Executive Order 12866, and it has not been reviewed by the 
Office of Management and Budget (OMB).
    This final 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. 
There are no administrative procedures which must be exhausted prior to 
any judicial challenge to the provisions of this rule.
    The Administrator, Agricultural Marketing Service (AMS), has 
considered the economic impact of this final rule on small entities 
pursuant to the requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601 et seq.). It has been determined that the 
implementation of this final rule would not have a significant economic 
impact on a substantial number of small businesses.
    The purpose of the RFA is to fit regulatory actions to the scale of 
businesses subject to such actions in order that small businesses will 
not be disproportionately burdened. There are an estimated 35,000 
cotton growers in the U.S. who voluntarily use the AMS cotton classing 
services annually, and the majority of these cotton growers are small 
businesses under the criteria established by the Small Business 
Administration (13 CFR Sec. 121.601). The Administrator of AMS has 
certified that this action will not have a significant economic impact 
on a substantial number of small entities as defined in the RFA 
because:
    (1) The fee increase reflects a very small increase in the cost-
per-unit currently borne by those entities utilizing the services (the 
1998 user fee for classification services was $1.30 per bale; the fee 
for the 1999 crop would be increased to $1.35 per bale; the 1999 crop 
is estimated at 16,810,410 bales);
    (2) The cost increase will not affect competition in the 
marketplace; and
    (3) The use of classification services is voluntary. For the 1998 
crop, 13,467,012 bales were classed out of 13,790,000 bales produced.
    (4) Based on the average price paid to growers for cotton from the 
1997 crop of 65.2 cents per pound, 500 pound bales of cotton are worth 
an average of $326.00 each. The proposed user fee for classification 
services, $1.35 per bale, is less than one percent of the value of an 
average bale of cotton.
    In compliance with 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 provisions to 
be amended by this final rule have been previously approved by OMB and 
were assigned OMB control number 0581-0009 under the Paperwork 
Reduction Act (44 U.S.C. 3501 et seq.).
    The changes will be made effective July 1, 1999, as provided by the 
Cotton Statistics and Estimates Act.

Fees for Classification Under the Cotton Statistics and Estimates 
Act of 1927

    The user fee charged to cotton producers for High Volume Instrument 
(HVI) classification services under the Cotton Statistics and Estimates 
Act (7 U.S.C. 473a) was $1.30 per bale during the 1998 harvest season 
as determined by using the formula provided in the Uniform Cotton 
Classing Fees Act of 1987, as amended by Public Law 102-237. The fees 
cover salaries, costs of equipment and supplies, and other overhead 
costs, including costs for administration, supervision, and development 
and maintenance of cotton standards.
    This final rule establishes the user fee charged to producers for 
HVI classification at $1.35 per bale during the 1999 harvest season.
    Public Law 102-237 amended the formula in the Uniform Cotton 
Classing Fees Act of 1987 for establishing the producer's 
classification fee so that the producer's fee is based on the 
prevailing method of classification requested by producers during the 
previous year. HVI classing was the prevailing method of

[[Page 28884]]

cotton classification requested by producers in 1998. Therefore, the 
1999 producer's user fee for classification service is based on the 
1998 base fee for HVI classification.
    The fee was calculated by applying the formula specified in the 
Uniform Cotton Classing Fees Act of 1987, as amended by Public Law 102-
237. The 1998 base fee for HVI classification exclusive of adjustments, 
as provided by the Act, was $2.12 per bale. A one percent, or two cents 
per bale increase due to the implicit price deflator of the gross 
domestic product added to the $2.12 results in a 1999 base fee of $2.14 
per bale. The formula in the Act provides for the use of the percentage 
change in the implicit price deflator of the gross national product (as 
indexed for the most recent 12-month period for which statistics are 
available). However, this has been replaced by the gross domestic 
product by the Department of Commerce as a more appropriate measure for 
the short-term monitoring and analysis of the U.S. economy.
    The number of bales to be classed by the United States Department 
of Agriculture from the 1999 crop is estimated at 16,810,410 bales. The 
1999 base fee was decreased 15 percent based on the estimated number of 
bales to be classed (one percent for every 100,000 bales or portion 
thereof above the base of 12,500,000, limited to a maximum adjustment 
of 15 percent). This percentage factor amounts to a 32 cents per bale 
reduction and was subtracted from the 1999 base fee of $2.14 per bale, 
resulting in a fee of $1.82 per bale.
    With a fee of $1.82 per bale, the projected operating reserve would 
be 46.66 percent. The Act specifies that the Secretary shall not 
establish a fee which, when combined with other sources of revenue, 
will result in a projected operating reserve of more than 25 percent. 
Accordingly, the fee of $1.82 must be reduced by 47 cents per bale, to 
$1.35 per bale, to provide an ending accumulated operating reserve for 
the fiscal year of 25 percent of the projected cost of operating the 
program. This will establish the 1999 season fee at $1.35 per bale.
    Accordingly, Sec. 28.909, paragraph (b) will be revised to reflect 
the increase in the HVI classification fees.
    As provided for in the Uniform Cotton Classing Fees Act of 1987, as 
amended, a five cent per bale discount will continue to be applied to 
voluntary centralized billing and collecting agents as specified in 
Sec. 28.909(c).
    Growers or their designated agents requesting classification data 
provided on computer punched cards will continue to be charged the fee 
of 10 cents per card in Sec. 28.910 (a) to reflect the costs of 
providing this service. Requests for punch card classification data 
represented only 0.7 percent of the total bales classed from the 1998 
crop, down from 2.6 percent in 1997. Growers or their designated agents 
receiving classification data by methods other than computer punched 
cards will continue to incur no additional fees if only one method of 
receiving classification data was requested. The fee for each 
additional method of receiving classification data in Sec. 28.910 will 
remain at five cents per bale, and it will be applicable even if the 
same method was requested. However, if computer punched cards were 
requested, a fee of ten cents per card will be charged. The fee in 
Sec. 28.910 (b) for an owner receiving classification data from the 
central database will remain at five cents per bale, and the minimum 
charge of $5.00 for services provided per monthly billing period will 
remain the same. The provisions of Sec. 28.910 (c) concerning the fee 
for new classification memoranda issued from the central database for 
the business convenience of an owner without reclassification of the 
cotton will remain the same.
    The fee for review classification in Sec. 28.911 will be increased 
from $1.30 per bale to $1.35 per bale.
    The fee for returning samples after classification in Sec. 28.911 
will remain at 40 cents per sample.

List of Subjects in 7 CFR Part 28

    Administrative practice and procedure, Cotton, Cotton samples, 
Grades, Market news, Reporting and recordkeeping requirements, 
Standards, Staples, Testing, Warehouses.

    For the reasons set forth in the preamble, 7 CFR Part 28 is amended 
as follows:

PART 28--[AMENDED]

    1. The authority citation for 7 CFR Part 28, Subpart D, continues 
to read as follows:

    Authority: 7 U.S.C. 471-476.

    2. In Sec. 28.909, paragraph (b) is revised to read as follows:


Sec. 28.909  Costs.

* * * * *
    (b) The cost of High Volume Instrument (HVI) cotton classification 
service to producers is $1.35 per bale.
* * * * *
    3. In Sec. 28.911, the last sentence of paragraph (a) is revised to 
read as follows:


Sec. 28.911  Review classification.

    (a) * * * The fee for review classification is $1.35 per bale.
* * * * *
    Dated: May 25, 1999.
Enrique E. Figueroa,
Administrator, Agricultural Marketing Service.
[FR Doc. 99-13764 Filed 5-27-99; 8:45 am]
BILLING CODE 3410-02-P