[Federal Register Volume 72, Number 191 (Wednesday, October 3, 2007)]
[Rules and Regulations]
[Pages 56242-56245]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 07-4891]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 28

[Docket Number: AMS-CN-07-0060; CN-07-003B]
RIN 0581-AC75


2007 Crop Cotton Classification Services and User Fees to Growers

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule.

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SUMMARY: The Smith-Doxey Amendment of 1937 (7 U.S.C. 473a) to the 
Cotton Statistics and Estimates Act of 1927 (7 U.S.C. 471-476) provided 
authority for the USDA to perform cotton classification and market news 
services to producers at no cost. Prior to that time, authorization for 
classing services was provided through the Cotton Standards Act of 1923 
(7 U.S.C. 51-65) and for statistical purposes through the Cotton 
Statistics and Estimates Act of 1927. Costs for classing services under 
the Smith-Doxey Amendment were supplied through appropriated funds 
until 1981 at which time the Omnibus Budget Reconciliation Act of 1981 
(Pub. L. 97-35) authorized the USDA to begin collecting user fees for 
their services and the classing fee structure was implemented through 
the Smith-Doxey Amendment. The statutory authority for the delivery of 
classing services and collection of applicable fees under the Smith-
Doxey Amendment will lapse on September 30, 2007. This rulemaking is 
necessary to re-establish the regulatory authority for the program's 
continued operation and incorporate the current fee structure for the 
2007 crop year, which was published in the June 1, 2007, Federal 
Register (72 FR 30457), under the authority of the Cotton Standards Act 
of 1923.

DATES: Effective Date: October 1, 2007.

FOR FURTHER INFORMATION CONTACT: Darryl Earnest, Deputy Administrator, 
Cotton Program, AMS, USDA, Room 2639-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:

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).

[[Page 56243]]

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. 601-612) 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 30,000 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 121.201). Continuing the user fee at the 2006 
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 2006 
user fee for classification services was $1.85 per bale; the fee for 
the 2007 crop would be maintained at $1.85 per bale; the 2007 crop is 
estimated at 19,900,000 bales);
    (2) The fee for services will not affect competition in the 
marketplace;
    (3) The use of classification services is voluntary. For the 2006 
crop, 21,729,000 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 
2005 crop of 46.9 cents per pound, 500 pound bales of cotton are worth 
an average of $234.50 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; and
    (5) This rule does not change any of the provisions in the 
regulations which were in effect for this activity under the Cotton 
Statistics and Estimates Act of 1927 with the exception of the 
definition of ``Act'' as these regulations will now be authorized under 
a new authority.

Paperwork Reduction Act

    In compliance with OMB regulations (5 CFR part 1320), which 
implement the Paperwork Reduction Act (PRA) (44 U.S.C. 3501-3520), 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.

SUPPLEMENTARY INFORMATION: The United States Cotton Standards Act of 
1923 (7 U.S.C. 51-65) was enacted into law on March 4, 1923, to 
authorize the Secretary of Agriculture to establish and promote the use 
of the official cotton standards of the United States for the 
classification of cotton by which its quality or value may be judged or 
determined for commercial purposes; to prevent deception therein and 
provide for the proper application of such standards; to establish a 
classing service for the public on a fee basis; and to provide for the 
licensing of qualified classers to determine the quality of cotton 
according to the official standards. The Act called for the Secretary 
of Agriculture to cause to be collected such fees and charges for 
services and materials rendered to cover, as nearly as practicable, and 
after taking into consideration net proceeds from any sale of samples, 
the costs incident to providing services and standards under the 
sections of the Act including administrative and supervisory costs.
    The Cotton Statistics and Estimates Act of 1927 (7 U.S.C. 471-476) 
was enacted into law March 3, 1927, and directed the Secretary of 
Agriculture to collect and publish annually statistics of estimates of 
the grades of the cotton carryover each year and to collect and publish 
at least three estimates each year of the grades of the current crop as 
ginned. Classing services were conducted under this Act to provide 
industry with these estimates of cotton quality. Due to the imminent 
need felt by the Secretary of Agriculture to provide as much 
information possible regarding the cotton quality and the commercial 
value at the time it was sold, an amendment to the Cotton Statistics 
and Estimates Act was passed by Congress on April 13, 1937, the Smith-
Doxey Amendment (7 U.S.C. 473a). The Amendment authorized and directed 
the Secretary of Agriculture to provide free classing and market news 
services to members of organized cotton improvement groups. These free 
services were continued until 1981 when the Omnibus Budget 
Reconciliation Act of 1981 (Pub. L. 97-35) was enacted on August 13, 
1981, which contained an amendment to the Cotton Statistics and 
Estimates Act known as the ``Cotton Classification Act'' (Pub. L. 97-
35, Stat. 373-374) that directed the Secretary of Agriculture to 
provide cotton classification services to producers, and recover, as 
nearly as practicable, the costs of providing such services through 
imposition of user fees. The statutory authority found in the Cotton 
Statistics and Estimates Act of 1927, which has been used for cotton 
classification activities since 1981, will lapse on September 30, 2007. 
As a result of this, the cotton classification service will continue to 
operate under the authority of the United States Cotton Standards Act 
of 1923 with all previous provisions for program operations and fee 
rates to remain constant.

Fees for Classification Under the Cotton Standards Act

    This rulemaking incorporates the current fee structure for the 2007 
crop year that was published in the Federal Register on June 1, 2007 
(72 FR 30457). The fee rate of $1.85 per bale charged to cotton 
producers for High Volume Instrument (HVI) classification services 
during the 2007 harvest season is deemed to, as nearly as practicable, 
cover salaries, costs of equipment and supplies, and other overhead 
costs, including costs for administration, and supervision.
    This rule ensures that classing services remain uninterrupted and 
that the fee rate charged to producers for classification remains at 
$1.85 per bale during the 2007 harvest season under the Cotton 
Standards Act of 1923.
    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 
(Pub. L. 102-237), 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

[[Page 56244]]

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 the current authority under which USDA 
performs cotton classification and charges user fees will lapse on 
September 30, 2007.

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, subpart B, is 
revised to read as follows:

PART 28--COTTON CLASSING, TESTING, AND STANDARDS

Subpart D--Cotton Classification and Market News Service for Producers

Definitions

Sec.
28.901 Definitions.

Administration

28.902 Director.

Classification and Market News Services

28.903 Classification of samples.
28.904 Market news.

Sampling

28.906 Sampling arrangements.
28.907 Responsibilities of licensed gins or warehouses.
28.908 Samples.
28.909 Costs.

Classification

28.910 Classification of samples and issuance of classification 
data.
28.911 Review classification.

Limitation of Services

28.917 Limitation of services.

Subpart D--Cotton Classification and Market News Service for 
Producers

    Authority: 7 U.S.C. 51-65; 7 U.S.C. 471-476.

Definitions


Sec.  28.901  Definitions.

    When used in the regulations in this subpart:
    (a) Act means the United States Cotton Standards Act of 1923, as 
amended (7 U.S.C. 51-65) and the Cotton Statistics and Estimates Act of 
1927 (7 U.S.C. 471-476), unless otherwise noted.
    (b) Service means the Agricultural Marketing Service of the United 
States Department of Agriculture.
    (c) Administrator means the Administrator of the Agricultural 
Marketing Service, or any officer or employee of the Service to whom 
authority has heretofore been delegated, or to whom authority may 
hereafter be delegated to act for the Administrator.
    (d) Division means the Cotton Division of the Agricultural 
Marketing Service.
    (e) Director means the Director of the Cotton Division, or any 
officer or employee of the Division to whom authority has heretofore 
been delegated or to whom authority may hereafter be delegated, to act 
for the Director.
    (f) Producer means any individual, partnership, corporation, 
association, trust, estate, or other legal entity, a state or political 
subdivision thereof, or any agency of such state or political 
subdivision producing American Upland or American Pima cotton in the 
capacity of landowner, landlord, tenant, or sharecropper.

Administration


Sec.  28.902  Director.

    The Director shall perform for and under the supervision of the 
Administrator, such duties as the Administrator may require in 
enforcing the regulations in this subpart.

Classification and Market News Services


Sec.  28.903  Classification of samples.

    The Director, or an authorized representative, upon the receipt of 
a producer's cotton sample which complies with the regulations in this 
subpart shall, as hereinafter provided, furnish to such producer or to 
an agent designated by the producer the classification in accordance 
with the official cotton standards of the United States.


Sec.  28.904  Market news.

    The Director shall cause to be distributed to producers of cotton 
and to others on request, timely information on prices for various 
qualities of cotton.

Sampling


Sec.  28.906  Sampling arrangements.

    (a) Cotton must be sampled by a gin or warehouse that holds a valid 
license to sample cotton issued pursuant to Sec. Sec.  28.20 through 
28.22.
    (b) The Director, or an authorized representative may direct that 
sampling be performed by employees of the Department of Agriculture for 
the purpose of appraising the sampling procedures at cotton gins or 
warehouses, or for the purpose of providing service to producers in 
special cases where a licensed gin or warehouse is not available.


Sec.  28.907  Responsibilities of licensed gins or warehouses.

    Each licensee shall be primarily responsible for drawing, 
identifying, handling, and shipping samples of cotton in accordance 
with this subpart and with instructions furnished by the Director or an 
authorized representative from time to time.


Sec.  28.908  Samples.

    (a) Only one sample to be submitted. Only one sample from each bale 
of eligible cotton shall be submitted for classification under this 
subpart. This does not prohibit the submission of an additional sample 
from a bale for review classification if the producer so desires.
    (b) Drawing of samples manual. (1) Each cut sample shall be drawn 
from the bale after it is tied out following the grinning process, and 
shall be approximately 6 ounces in weight, not less than 3 ounces of 
which are to be drawn from each side of the bale: Provided, That each 
sample from a bale of American Pima cotton shall be approximately 10 
ounces in weight, not less than 5 ounces of which are to be drawn from 
each side of the bale.
    (2) Where it is necessary to draw two sets of samples, a single cut 
should be made in each side of the bale, and the portion of cotton 
removed from each cut should be broken in half across the layers to 
provide two complete samples. In those cases where this method would 
result in samples of insufficient length, it will be acceptable to 
split the sample lengthwise along the layers, provided the outside 
portion from each side is submitted for the official classification.
    (c) Mechanical sampling. Samples may be drawn in gins equipped with 
mechanical samplers approved by the Division and operated according to 
sampling instructions furnished by the Director or an authorized 
representative. Such samples shall not be less than 6 ounces in weight.
    (d) Samples must be representative. Each sample must be 
representative of the bale from which drawn.
    (e) Handling samples. Samples shall not be dressed or trimmed and 
shall be carefully handled in such manner as not to cause loss of leaf, 
sand, or other material, or otherwise change their

[[Page 56245]]

representative character. Samples shall be handled only by employees of 
the licensee prior to shipment or delivery to the cotton classing 
office of the Division.
    (f) Identifying and shipping samples. Each sample shall be 
identified with a tag, supplied or approved by the Division, bearing 
the gin or warehouse number of the bale from which the sample was drawn 
and the name and address of the producer of the bale. The tag shall be 
placed between the two halves of the sample, the sample tightly rolled 
and enclosed in a package or bag for shipment. Each package or bag 
shall be labeled or marked with the name and address of the licensed 
gin or warehouse. The packages shall be shipped or delivered direct to 
the cotton classing office serving the territory in which the cotton is 
ginned. Samples that where drawn by a mechanical sampler at the gin may 
be transported with the bales to the warehouse and then shipped or 
delivered direct to the classing office by the warehouse.
    (g) Request for classification. Samples received from a licensed 
gin or warehouse with the identification tag required in Sec.  
28.908(f) shall constitute a request for classification service by the 
producer.


Sec.  28.909  Costs.

    (a) Costs incident to sampling, tagging, and identification of 
samples and transporting samples to points of shipment shall be assumed 
by the producer, but tags and containers for the shipment of samples 
and shipping charges via U.S. Postal Service or duly authorized common 
carrier will be furnished by the service. After classification the 
samples shall become the property of the Government. The proceeds of 
the sale of cotton samples shall be used to defray the costs of 
providing the services under this subpart.
    (b) The cost of High Volume Instrument (HVI) cotton classification 
service to producers is $1.85 per bale.
    (c) The Division will periodically bill producers or the voluntary 
agents designated by producers for the cost of classification. A 
discount of 5 cents per sample will be granted for services provided 
under this section when billing is made to voluntary agents.

Classification


Sec.  28.910  Classification of samples and issuance of classification 
data.

    (a)(1) The samples submitted as provided in the subpart shall be 
classified by employees of the Division and classification memoranda 
showing the official quality determination of each sample according to 
the official cotton standards of the United States shall be issued by 
any one of the following methods at no additional charge:
    (i) Computer diskettes,
    (ii) Computer tapes, or
    (iii) Telecommunications, with all long distance telephone line 
charges paid by the receiver of data.
    (2) When an additional copy of the classification memorandum is 
issued by any method listed in paragraph (a)(1), there will be a charge 
of five cents per bale. If provided as an additional method of data 
transfer, the minimum fee for each tape or diskette issued shall be 
$10.00.
    (b) Owners of cotton, other than producers, may receive 
classification data showing the official quality determination of each 
sample by means of telecommunications from a central database to be 
maintained by the Division. The fee for this service shall be five 
cents per bale, with all long distance telephone line charges paid by 
the receiver of data. The minimum charge assessed for services obtained 
from the central database shall be $5.00 per monthly billing period.
    (c) Upon request of an owner of cotton for which classification 
memoranda have been issued under the subpart, a new memorandum shall be 
issued for the business convenience of such owner without the 
reclassification of the cotton. Such rewritten memorandum shall bear 
the date of its issuance and the date or inclusive dates of the 
original classification. The fee for a new memorandum shall be 15 cents 
per bale or a minimum of $5.00 per sheet.


Sec.  28.911  Review classification.

    (a) A producer may request one review classification for each bale 
of eligible cotton. The fee for review classification is $1.85 per 
bale.
    (b) Samples for review classification must be drawn by gins or 
warehouses licensed pursuant to Sec. Sec.  28.20 through 28.22, or by 
employees of the United States Department of Agriculture. Each sample 
for review classification shall be taken, handled, and submitted 
according to Sec.  28.908 and to supplemental instructions issued by 
the Director or an authorized representative of the Director. Costs 
incident to sampling, tagging, identification, containers, and shipment 
for samples for review classification shall be assumed by the producer. 
After classification, the samples shall become the property of the 
Government unless the producer requests the return of the samples. The 
proceeds from the sale of samples that become Government property shall 
be used to defray the costs of providing the services under this 
subpart. Producers who request return of their samples after classing 
will pay a fee of 40 cents per sample in addition to the fee 
established above in this section.

Limitations of Services


Sec.  28.917  Limitations of services.

    The Director, or an authorized representative, may suspend, 
terminate, or withhold cotton classing and market news services to any 
producer upon any failure of the producer to comply with the act or 
these regulations. Failure to remit fees for classification services 
shall result in loss of service.

    Dated: September 28, 2007.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 07-4891 Filed 10-2-07; 8:45 am]
BILLING CODE 3410-02-P