[Federal Register Volume 71, Number 158 (Wednesday, August 16, 2006)]
[Rules and Regulations]
[Pages 47073-47074]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-13476]



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  Federal Register / Vol. 71, No. 158 / Wednesday, August 16, 2006 / 
Rules and Regulations  

[[Page 47073]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

[CN-06-001]
RIN 0581-AC58

7 CFR Part 28


User Fees for 2006 Crop Cotton Classification Services to Growers

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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

SUMMARY: The Agricultural Marketing Service (AMS) will maintain user 
fees for cotton producers for 2006 crop cotton classification services 
under the Cotton Statistics and Estimates Act at the same level as in 
2005. This is in accordance with the formula provided in the Uniform 
Cotton Classing Fees Act of 1987. The 2005 user fee for this 
classification service was $1.85 per bale. This rule would maintain the 
fee for the 2006 crop at $1.85 per bale. The fee and the existing 
reserve are sufficient to cover the costs of providing classification 
services, including costs for administration and supervision.

DATES: Effective Date: August 17, 2006.

FOR FURTHER INFORMATION CONTACT: Darryl Earnest, Deputy Administrator, 
Cotton Program, AMS, USDA, Room 2641-S, STOP 0224, 1400 Independence 
Avenue, SW., Washington, DC 20250-0224. Telephone (202) 720-2145, 
facsimile (202) 690-1718, or e-mail [email protected].

SUPPLEMENTARY INFORMATION: A proposed rule detailing the revisions was 
published in the Federal Register on April 20, 2006 (71 FR 20350). A 
15-day comment period was provided for interested persons to respond to 
the proposed rule. During the 15-day comment period, one comment was 
received from the National Cotton Council in support of the proposed 
rule, the continued use of the legislative formula for establishing the 
cotton user fees, and the cotton classing services provided.

Executive Order 12866

    This 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 (OMB).

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. 
There are no administrative procedures that may be exhausted prior to 
any judicial challenge to the provisions of this rule.

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.
    The purpose of the RFA is to fit regulatory actions to the scale of 
businesses subject to such actions so 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.  121.201). Continuing the user fee at the 
2005 crop level as stated will not significantly affect small 
businesses as defined in the RFA because:
    (1) The fee represents a very small portion of the cost-per-unit 
currently borne by those entities utilizing the services. (The 2005 
user fee for classification services was $1.85 per bale; the fee for 
the 2006 crop would be maintained at $1.85 per bale.)
    (2) The fee for services will not affect competition in the 
marketplace; and
    (3) The use of classification services is voluntary. For the 2005 
crop, 23,703,000 bales were produced; and, almost all of these bales 
were voluntarily submitted by growers for the classification service.
    (4) Based on the average price paid to growers for cotton from the 
2004 crop of 41.6 cents per pound, 500 pound bales of cotton are worth 
an average of $208 each. The proposed user fee for classification 
services, $1.85 per bale, is less than one percent of the value of an 
average bale of cotton.

Paperwork Reduction Act

    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 rule have been previously approved by OMB and were 
assigned OMB control number 0581-AC58.

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 $1.85 per bale during the 2005 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, and supervision.
    This rule establishes the user fee charged to producers for HVI 
classification at $1.85 per bale during the 2006 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 cotton 
classification requested by producers in 2005. Therefore, the 2006 
producer's user fee for classification service is based on the 2005 
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 2005 base fee for HVI classification exclusive of adjustments, 
as provided by the Act, was $2.37 per bale. An increase of 3.29 
percent, or 8 cents per bale, due to the implicit price deflator of the 
gross

[[Page 47074]]

domestic product added to the $2.37 would result in a 2006 base fee of 
$2.45 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, gross national product has been 
replaced by 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 2006 crop is estimated at 20,268,150 bales. The 
2006 base fee was decreased 15 percent based on the estimated number of 
bales to be classed (1 percent for every 100,000 bales or portion 
thereof above the base of 12,500,000, limited to a maximum decreased 
adjustment of 15 percent). This percentage factor amounts to a 37 cents 
per bale reduction and was subtracted from the 2006 base fee of $2.45 
per bale, resulting in a fee of $2.08 per bale.
    However, with a fee of $2.08 per bale, the projected operating 
reserve would be 35.74 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 $2.08 must be reduced by 23 cents per 
bale, to $1.85 per bale, to provide an ending accumulated operating 
reserve for the fiscal year of not more than 25 percent of the 
projected cost of operating the program. This would establish the 2006 
season fee at $1.85 per bale.
    Accordingly, Sec.  28.909, paragraph (b) would reflect the 
continuation of the HVI classification fee at $1.85 per bale.
    As provided for in the Uniform Cotton Classing Fees Act of 1987, as 
amended, a 5 cent per bale discount would continue to be applied to 
voluntary centralized billing and collecting agents as specified in 
Sec.  28.909 (c).
    Growers or their designated agents receiving classification data 
would continue to incur no additional fees if classification data is 
requested only once. The fee for each additional retrieval of 
classification data in Sec.  28.910 would remain at 5 cents per bale. 
The fee in Sec.  28.910 (b) for an owner receiving classification data 
from the National database would remain at 5 cents per bale, and the 
minimum charge of $5.00 for services provided per monthly billing 
period would remain the same. The provisions of Sec.  28.910 (c) 
concerning the fee for new classification memoranda issued from the 
National database for the business convenience of an owner without 
reclassification of the cotton will remain the same at 15 cents per 
bale or a minimum of $5.00 per sheet.
    The fee for review classification in Sec.  28.911 would be 
maintained at $1.85 per bale.
    The fee for returning samples after classification in Sec.  28.911 
would remain at 40 cents per sample.
    Pursuant to 5 U.S.C. 553, good cause exists for not postponing the 
effective date of this rule until 30 days after publication in the 
Federal Register because this rule maintains user fees for 2006 crop 
cotton classification services under the Cotton Statistics and 
Estimates Act at the same level as in 2005 and a 15-day comment period 
was provided for public comment and one favorable comment was received.

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.

0
For the reasons set forth in the preamble, 7 CFR Part 28 is amended as 
follows:

PART 28--[AMENDED]

0
1. The authority citation for 7 CFR Part 28, Subpart D, continues to 
read as follows:

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


0
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 $1.85 per bale.
* * * * *

0
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 $1.85 per bale.
* * * * *

    Dated: August 9, 2006.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
 [FR Doc. E6-13476 Filed 8-15-06; 8:45 am]
BILLING CODE 3410-02-P