[Federal Register Volume 67, Number 102 (Tuesday, May 28, 2002)]
[Rules and Regulations]
[Pages 36793-36799]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-13228]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1205

[Doc # CN-02-002]


Cotton Board Rules and Regulations: Adjusting Supplemental 
Assessment on Imports, (2002 Amendments)

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Agricultural Marketing Service (AMS) is amending 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. 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.

EFFECTIVE DATE: June 27, 2002.

FOR FURTHER INFORMATION CONTACT: Whitney Rick, Chief, Research and 
Promotion Staff, Cotton Program, AMS, USDA, Stop 0224, 1400 
Independence Ave., SW, Washington, DC 20250-0224, telephone (202) 720-
2259, facsimile (202) 690-1718, or email at [email protected].

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    The Office of Management and Budget has waived the review process 
required by Executive Order 12866 for this action.

Executive Order 12988

    This 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.
    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 10,000 importers who are presently subject 
to rules and regulations issued pursuant to the Cotton Research and 
Promotion Order. This rule will 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 rule will 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 $0.009965 per kilogram of imported cotton. The new 
assessment is $0.00862, a decrease of $0.001345 or a 13.5 percent 
decrease. From January through December 2001 approximately $22 million 
was collected. Should the volume of cotton products imported into the 
U.S. remain at the same level in 2002, one could expect the decreased 
assessment to generate approximately $19 million or a 13.5 percent 
decrease from 2001.

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

[[Page 36794]]

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). A proposed 
rule implementing the amended Order was 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 rule will 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 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 (66 FR 58051) on November 20, 2001, for the purpose of 
calculating supplemental assessments on imported cotton is $1.1111 per 
kilogram. This number was calculated using the annual weighted average 
price received by farmers for Upland cotton during the calendar year 
2000 which was $0.504 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 2001, which is $0.382 
per pound, the new value of imported cotton is $0.8422 per kilogram. 
The amended value is $.2689 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 (\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 2001 calendar year weighted average price received by producers 
for Upland cotton is $0.382 per pound or $0.8422 per kg. (0.382 x 
2.2046).
    Five tenths of one percent of the average price in kg. equals 
$0.004211 per kg. (0.8422 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 $0.004211 per kg. which equals $0.00862 per 
kg.
    The current assessment on imported cotton is $0.009965 per kilogram 
of imported cotton. The amended assessment is $0.00862, a decrease of 
$0.001345 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 2001.
    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.
    A proposed rule with request for comments was published in the 
Federal Register (67 FR 15495) on April 2, 2002. No comments were 
received during the period (April 2 through May 2, 2002).
    Several changes in the harmonized tariff schedule numbering have 
occurred. Modifications to the harmonized tariff schedule were 
published in the December 26, 2001, Federal Register at 66 FR 66549 
(Proclamation 7515 of December 18, 2001, by the President of the United 
States of America). These changes are as follows: Numbers changed:

------------------------------------------------------------------------
                                         Conversion     Assessment cents/
     Old No.           New No(s).          factor              kg
------------------------------------------------------------------------
    5607902000         5607909000             0.8889            0.7662
    6002203000         6003203000             0.8681            0.7483
    6002206000         6003306000             0.2894            0.2495
                       6003406000
     600242000         6005210000             0.8681            0.7483
                       6005220000
                       6005220000
                       6005230000
                       6005240000

[[Page 36795]]

 
    6002430010         6005310010             0.2894            0.2495
                       6005320010
                       6005330010
                       6005340010
                       6005410010
                       6005420010
                       6005430010
                       6005440010
    6002430080         6005310080             0.2894            0.2495
                       6005320080
                       6005330080
                       6005340080
                       6005410080
                       6005420080
                       6005430080
                       6005440080
    6002921000         6006211000             1.1574            0.9977
                       6006221000
                       6006231000
                       6006241000
    6002930040         6006310040             0.1157            0.0997
                       6006320040
                       6006330040
                       6006340040
    6002930080         6006310080             0.1157            0.0997
                       6006320080
                       6006330080
                       6006340080
                       6006410085
                       6006420085
                       6006430085
                       6006440085
------------------------------------------------------------------------

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 
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 [sect] 1205.510, paragraph (b)(2) and the table in paragraph 
(b)(3)(ii) are revised to read as follows:


[sect] 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 $0.862 per kilogram.
    (3) * * *
    (ii) * * *

                         Import Assessment Table
                           [Raw Cotton Fiber]
------------------------------------------------------------------------
        HTS No.                Conv. fact.               Cents/kg.
------------------------------------------------------------------------
        5201000500                        0                  0.8620
        5201001200                        0                  0.8620
        5201001400                        0                  0.8620
        5201001800                        0                  0.8620
        5201002200                        0                  0.8620
        5201002400                        0                  0.8620
        5201002800                        0                  0.8620
        5201003400                        0                  0.8620
        5201003800                        0                  0.8620
        5204110000                   1.1111                  0.9578
        5204200000                   1.1111                  0.9578
        5205111000                   1.1111                  0.9578
        5205112000                   1.1111                  0.9578
        5205121000                   1.1111                  0.9578
        5205122000                   1.1111                  0.9578
        5205131000                   1.1111                  0.9578
        5205132000                   1.1111                  0.9578
        5205141000                   1.1111                  0.9578
        5205210020                   1.1111                  0.9578
        5205210090                   1.1111                  0.9578
        5205220020                   1.1111                  0.9578
        5205220090                   1.1111                  0.9578
        5205230020                   1.1111                  0.9578
        5205230090                   1.1111                  0.9578
        5205240020                   1.1111                  0.9578
        5205240090                   1.1111                  0.9578
        5205310000                   1.1111                  0.9578
        5205320000                   1.1111                  0.9578
        5205330000                   1.1111                  0.9578
        5205340000                   1.1111                  0.9578
        5205410020                   1.1111                  0.9578
        5205410090                   1.1111                  0.9578
        5205420020                   1.1111                  0.9578
        5205420090                   1.1111                  0.9578
        5205440020                   1.1111                  0.9578
        5205440090                   1.1111                  0.9578
        5206120000                   0.5556                  0.4789
        5206130000                   0.5556                  0.4789
        5206140000                   0.5556                  0.4789
        5206220000                   0.5556                  0.4789
        5206230000                   0.5556                  0.4789
        5206240000                   0.5556                  0.4789
        5206310000                   0.5556                  0.4789
        5207100000                   1.1111                  0.9578
        5207900000                   0.5556                  0.4789
        5208112020                   1.1455                  0.9874
        5208112040                   1.1455                  0.9874
        5208112090                   1.1455                  0.9874
        5208114020                   1.1455                  0.9874
        5208114060                   1.1455                  0.9874
        5208114090                   1.1455                  0.9874
        5208118090                   1.1455                  0.9874
        5208124020                   1.1455                  0.9874
        5208124040                   1.1455                  0.9874
        5208124090                   1.1455                  0.9874
        5208126020                   1.1455                  0.9874
        5208126040                   1.1455                  0.9874
        5208126060                   1.1455                  0.9874
        5208126090                   1.1455                  0.9874
        5208128020                   1.1455                  0.9874
        5208128090                   1.1455                  0.9874
        5208130000                   1.1455                  0.9874
        5208192020                   1.1455                  0.9874
        5208192090                   1.1455                  0.9874
        5208194020                   1.1455                  0.9874
        5208194090                   1.1455                  0.9874

[[Page 36796]]

 
        5208196020                   1.1455                  0.9874
        5208196090                   1.1455                  0.9874
        5208224040                   1.1455                  0.9874
        5208224090                   1.1455                  0.9874
        5208226020                   1.1455                  0.9874
        5208226060                   1.1455                  0.9874
        5208228020                   1.1455                  0.9874
        5208230000                   1.1455                  0.9874
        5208292020                   1.1455                  0.9874
        5208292090                   1.1455                  0.9874
        5208294090                   1.1455                  0.9874
        5208296090                   1.1455                  0.9874
        5208298020                   1.1455                  0.9874
        5208312000                   1.1455                  0.9874
        5208321000                   1.1455                  0.9874
        5208323020                   1.1455                  0.9874
        5208323040                   1.1455                  0.9874
        5208323090                   1.1455                  0.9874
        5208324020                   1.1455                  0.9874
        5208324040                   1.1455                  0.9874
        5208325020                   1.1455                  0.9874
        5208330000                   1.1455                  0.9874
        5208392020                   1.1455                  0.9874
        5208392090                   1.1455                  0.9874
        5208394090                   1.1455                  0.9874
        5208396090                   1.1455                  0.9874
        5208398020                   1.1455                  0.9874
        5208412000                   1.1455                  0.9874
        5208416000                   1.1455                  0.9874
        5208418000                   1.1455                  0.9874
        5208421000                   1.1455                  0.9874
        5208423000                   1.1455                  0.9874
        5208424000                   1.1455                  0.9874
        5208425000                   1.1455                  0.9874
        5208430000                   1.1455                  0.9874
        5208492000                   1.1455                  0.9874
        5208494020                   1.1455                  0.9874
        5208494090                   1.1455                  0.9874
        5208496010                   1.1455                  0.9874
        5208496090                   1.1455                  0.9874
        5208498090                   1.1455                  0.9874
        5208512000                   1.1455                  0.9874
        5208516060                   1.1455                  0.9874
        5208518090                   1.1455                  0.9874
        5208523020                   1.1455                  0.9874
        5208523045                   1.1455                  0.9874
        5208523090                   1.1455                  0.9874
        5208524020                   1.1455                  0.9874
        5208524045                   1.1455                  0.9874
        5208524065                   1.1455                  0.9874
        5208525020                   1.1455                  0.9874
        5208530000                   1.1455                  0.9874
        5208592025                   1.1455                  0.9874
        5208592095                   1.1455                  0.9874
        5208594090                   1.1455                  0.9874
        5208596090                   1.1455                  0.9874
        5209110020                   1.1455                  0.9874
        5209110035                   1.1455                  0.9874
        5209110090                   1.1455                  0.9874
        5209120020                   1.1455                  0.9874
        5209120040                   1.1455                  0.9874
        5209190020                   1.1455                  0.9874
        5209190040                   1.1455                  0.9874
        5209190060                   1.1455                  0.9874
        5209190090                   1.1455                  0.9874
        5209210090                   1.1455                  0.9874
        5209220020                   1.1455                  0.9874
        5209220040                   1.1455                  0.9874
        5209290040                   1.1455                  0.9874
        5209290090                   1.1455                  0.9874
        5209313000                   1.1455                  0.9874
        5209316020                   1.1455                  0.9874
        5209316035                   1.1455                  0.9874
        5209316050                   1.1455                  0.9874
        5209316090                   1.1455                  0.9874
        5209320020                   1.1455                  0.9874
        5209320040                   1.1455                  0.9874
        5209390020                   1.1455                  0.9874
        5209390040                   1.1455                  0.9874
        5209390060                   1.1455                  0.9874
        5209390080                   1.1455                  0.9874
        5209390090                   1.1455                  0.9874
        5209413000                   1.1455                  0.9874
        5209416020                   1.1455                  0.9874
        5209416040                   1.1455                  0.9874
        5209420020                   1.0309                  0.8886
        5209420040                   1.0309                  0.8886
        5209430030                   1.1455                  0.9874
        5209430050                   1.1455                  0.9874
        5209490020                   1.1455                  0.9874
        5209490090                   1.1455                  0.9874
        5209516035                   1.1455                  0.9874
        5209516050                   1.1455                  0.9874
        5209520020                   1.1455                  0.9874
        5209590025                   1.1455                  0.9874
        5209590040                   1.1455                  0.9874
        5209590090                   1.1455                  0.9874
        5210114020                   0.6873                  0.5925
        5210114040                   0.6873                  0.5925
        5210116020                   0.6873                  0.5925
        5210116040                   0.6873                  0.5925
        5210116060                   0.6873                  0.5925
        5210118020                   0.6873                  0.5925
        5210120000                   0.6873                  0.5925
        5210192090                   0.6873                  0.5925
        5210214040                   0.6873                  0.5925
        5210216020                   0.6873                  0.5925
        5210216060                   0.6873                  0.5925
        5210218020                   0.6873                  0.5925
        5210314020                   0.6873                  0.5925
        5210314040                   0.6873                  0.5925
        5210316020                   0.6873                  0.5925
        5210318020                   0.6873                  0.5925
        5210414000                   0.6873                  0.5925
        5210416000                   0.6873                  0.5925
        5210418000                   0.6873                  0.5925
        5210498090                   0.6873                  0.5925
        5210514040                   0.6873                  0.5925
        5210516020                   0.6873                  0.5925
        5210516040                   0.6873                  0.5925
        5210516060                   0.6873                  0.5925
        5211110090                   0.6873                  0.5925
        5211120020                   0.6873                  0.5925
        5211190020                   0.6873                  0.5925
        5211190060                   0.6873                  0.5925
        5211210025                   0.6873                  0.5925
        5211210035                   0.4165                  0.3590
        5211210050                   0.6873                  0.5925
        5211290090                   0.6873                  0.5925
        5211320020                   0.6873                  0.5925
        5211390040                   0.6873                  0.5925
        5211390060                   0.6873                  0.5925
        5211490020                   0.6873                  0.5925
        5211490090                   0.6873                  0.5925
        5211590025                   0.6873                  0.5925
        5212146090                   0.9164                  0.7899
        5212156020                   0.9164                  0.7899
        5212216090                   0.9164                  0.7899
        5509530030                   0.5556                  0.4789
        5509530060                   0.5556                  0.4789
        5513110020                   0.4009                  0.3456
        5513110040                   0.4009                  0.3456
        5513110060                   0.4009                  0.3456
        5513110090                   0.4009                  0.3456
        5513120000                   0.4009                  0.3456
        5513130020                   0.4009                  0.3456
        5513210020                   0.4009                  0.3456
        5513310000                   0.4009                  0.3456
        5514120020                   0.4009                  0.3456
        5516420060                   0.4009                  0.3456
        5516910060                   0.4009                  0.3456
        5516930090                   0.4009                  0.3456
        5601210010                   1.1455                  0.9874
        5601210090                   1.1455                  0.9874
        5601300000                   1.1455                  0.9874
        5602109090                   0.5727                  0.4937
        5602290000                   1.1455                  0.9874
        5602906000                    0.526                  0.4534
        5604900000                   0.5556                  0.4789
        5607909000                   0.8889                  0.7662
        5608901000                   1.1111                  0.9578
        5608902300                   1.1111                  0.9578
        5609001000                   1.1111                  0.9578
        5609004000                   0.5556                  0.4789
        5701104000                   0.0556                  0.0479
        5701109000                   0.1111                  0.0958
        5701901010                   1.0444                  0.9003
        5702109020                      1.1                  0.9482
        5702312000                   0.0778                  0.0671
        5702411000                   0.0722                  0.0622
        5702412000                   0.0778                  0.0671
        5702421000                   0.0778                  0.0671
        5702913000                   0.0889                  0.0766
        5702991010                   1.1111                  0.9578
        5702991090                   1.1111                  0.9578
        5703900000                   0.4489                  0.3870
        5801210000                   1.1455                  0.9874
        5801230000                   1.1455                  0.9874
        5801250010                   1.1455                  0.9874
        5801250020                   1.1455                  0.9874
        5801260020                   1.1455                  0.9874
        5802190000                   1.1455                  0.9874
        5802300030                   0.5727                  0.4937
        5804291000                   1.1455                  0.9874
        5806200010                   0.3534                  0.3046
        5806200090                   0.3534                  0.3046
        5806310000                   1.1455                  0.9874
        5806400000                   0.4296                  0.3703
        5808107000                   0.5727                  0.4937
        5808900010                   0.5727                  0.4937
        5811002000                   1.1455                  0.9874
        6001106000                   1.1455                  0.9874
        6001210000                   0.8591                  0.7405
        6001220000                   0.2864                  0.2469
        6001910010                   0.8591                  0.7405
        6001910020                   0.8591                  0.7405
        6001920020                   0.2864                  0.2469
        6001920030                   0.2864                  0.2469
        6001920040                   0.2864                  0.2469
        6003203000                   0.8681                  0.7483
        6003306000                   0.2894                  0.2495
        6003406000                   0.2894                  0.2495
        6005210000                   0.8681                  0.7483
        6005220000                   0.8681                  0.7483
        6005230000                   0.8681                  0.7483
        6005240000                   0.8681                  0.7483
        6005310010                   0.2894                  0.2495

[[Page 36797]]

 
        6005320010                   0.2894                  0.2495
        6005330010                   0.2894                  0.2495
        6005340010                   0.2894                  0.2495
        6005410010                   0.2894                  0.2495
        6005420010                   0.2894                  0.2495
        6005430010                   0.2894                  0.2495
        6005440010                   0.2894                  0.2495
        6005310080                   0.2894                  0.2495
        6005320080                   0.2894                  0.2495
        6005330080                   0.2894                  0.2495
        6005340080                   0.2894                  0.2495
        6005410080                   0.2894                  0.2495
        6005420080                   0.2894                  0.2495
        6005430080                   0.2894                  0.2495
        6005440080                   0.2894                  0.2495
        6006211000                   1.1574                  0.9977
        6006221000                   1.1574                  0.9977
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[[Page 36798]]

 
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[[Page 36799]]

 
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        6505902545                   0.5844                  0.5038
------------------------------------------------------------------------

* * * * *

    Dated: May 21, 2002.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 02-13228 Filed 5-24-02; 8:45am]
BILLING CODE 3410-02-P