[Federal Register Volume 73, Number 143 (Thursday, July 24, 2008)]
[Proposed Rules]
[Pages 43166-43171]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-16957]



[[Page 43166]]

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1205

[Doc. AMS-CN-08-0040; CN-08-002]


Cotton Board Rules and Regulations: Adjusting Supplemental 
Assessment on Imports (2008 Amendments)

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 increasing the value assigned 
to imported cotton for calculating supplemental assessments collected 
for use by the Cotton Research and Promotion Program. An amendment is 
required to adjust the assessments collected on imported cotton and the 
cotton content of imported products to be the same as those paid on 
domestically produced cotton. In addition, AMS proposes to remove 
Harmonized Tariff Schedule (HTS) numbers that were absorbed into other 
HTS categories since the last assessment adjustment.

DATES: Comments must be received on or before September 22, 2008.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposed rule to Shethir M. Riva, Chief, Research and 
Promotion Staff, Cotton and Tobacco Programs, AMS, USDA, Stop 0224, 
1400 Independence Ave., SW., Room 2639-S, Washington, DC 20250-0224. 
Comments should be submitted in triplicate. Comments may also be 
submitted electronically through www.regulations.gov. All comments 
received will be made available for public inspection at Cotton and 
Tobacco Programs, AMS, USDA, Stop 0224, 1400 Independence Ave., SW., 
Room 2639-S, Washington, DC 20250-0224 during regular business hours.

FOR FURTHER INFORMATION CONTACT: Shethir M. Riva, Chief, Research and 
Promotion Staff, Cotton and Tobacco Programs, AMS, USDA, Stop 0224, 
1400 Independence Ave., SW., Room 2639-S, Washington, DC 20250-0224, 
telephone (202) 720-6603, facsimile (202) 690-1718, or e-mail 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 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.

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, the 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.
    The last time AMS proposed to amend the Cotton Board Rules and 
Regulations, specifically to adjust the total rate of assessment per 
kilogram of imported cotton collected under the Cotton Research and 
Promotion Program, was on January 12, 2005 (70 FR 2034). This proposed 
rule resulted from years of consultation with the industry. In the 
proposed rule, the total rate of assessment would have been calculated 
by adding together the $1 per bale equivalent assessment and the 
supplemental assessment, and adjusting the sum to account for the 
estimated amount of U.S. cotton contained in the imported textile 
products by the estimated average amount of U.S. cotton contained 
therein. On November 20, 2006, however, AMS withdrew the proposed rule 
(71 FR 67072) based on a stakeholder comment questioning the data and 
the calculation of the proposed importer supplemental assessment. After 
receiving the comment and other available information, the agency did 
not believe that the proposed rule would achieve its intended 
objectives of effectiveness and efficiency. While AMS continues to 
evaluate this issue and garner additional stakeholders' input and 
economic data, AMS is proposing to amend the Cotton Board Rules and 
Regulations to adjust the importer supplemental assessment to be the 
same as that levied on domestic cotton producers. This proposed rule 
would increase the value assigned to imported cotton in the Cotton 
Board Rules and Regulations (7 CFR 1205.510(b)(2)). The total value is 
determined by 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. The second value is used to calculate the 
supplemental assessments on imported cotton and the cotton content of 
imported products. 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 supplement assessment is combined with the per bale equivalent to 
determine the total value and assessment of the imported cotton or 
cotton-containing products.
    The Cotton Research and Promotion Rules and Regulations provide for 
assigning the calendar year weighted average price received by U.S. 
farmers for Upland cotton to represent the value of imported cotton. 
This is so that the assessment on domestically produced cotton and the 
assessment on imported cotton and the cotton content of imported 
products is the same. The source for the average price statistic is 
Agricultural Prices, a publication of the National Agricultural 
Statistics Service

[[Page 43167]]

(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 will yield an 
assessment that is the same as assessments paid on domestically 
produced cotton.
    The current value of imported cotton as published in the Federal 
Register (68 FR 27898) for the purpose of calculating supplemental 
assessments on imported cotton is $0.8267 cents per kilogram. Using the 
Average Weighted Price received by U.S. farmers for Upland cotton for 
the calendar year 2007, the new value of imported cotton is $0.9874 
cents per kilogram or $0.1607 cents per kilogram more than the previous 
value.
    An example of the complete assessment formula and how the 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 2007 calendar year weighted average price received by producers 
for Upland cotton is $0.496 per pound or $1.093 per kg. (0.496 x 
2.2046).
    Five tenths of one percent of the average price in kg. equals 
$0.005465 per kg. (1.093 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 $0.005465 per kg. which equals $0.009874 
per kg.
    The current assessment on imported cotton is $0.008267 per kilogram 
of imported cotton. The proposed assessment is $0.009874, an increase 
of $0.001607 per kilogram. This increase reflects the increase in the 
Average Weighted Price of Upland Cotton Received by U.S. Farmers during 
the period January through December 2007.
    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 HTS numbers 
subject to assessment.
    The U.S. Customs and Border Protection informed the agency that 
several numbers listed in the Import Assessment Table are no longer 
used or have been combined with other HTS numbers. The HTS numbers that 
have been removed from the Import Assessment Table are: 5208530000; 
6109100005; 6203424005; 6203424050; 6204624040; 6205202030; 6206303020; 
5210120000; 6109100009; 6203424010; 6203424055; 6204624045; 6205202035; 
6206303030; 5211210025; 6110202065; 6203424015; 6203424060; 6204624050; 
6205202046; 6206303040; 5211210035; 6110202075; 6203424020; 6204624005; 
6204624055; 6205202050; 6206303050; 5211210050; 6111206040; 6203424025; 
6204624010; 6204624060; 6205202060; 6206303060; 5211290090; 6111305040; 
6203424030; 6204624020; 6204624065; 6205202065; 6210405020; 5604900000; 
6115198010; 6203424035; 6204624025; 6205202015; 6205202070; 6303110000; 
5702991010; 6115929000; 6203424040; 6204624030; 6205202020; 6205202075; 
5702991090; 6115936020; 6203424045; 6204624035; 6205202025; 6206303010.
    A 60-day comment 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 increase 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.

Regulatory Flexibility Act

    In accordance with the Regulatory Flexibility Act (RFA) [5 U.S.C. 
601 et seq.], AMS has examined the economic impact of this rule on 
small entities. The purpose of the RFA is to fit regulatory actions to 
the scale of businesses subject to such action so that small businesses 
will not be unduly or disproportionately burdened. The Small Business 
Administration defines, in 13 CFR Part 121, small agricultural 
producers as those having annual receipts of no more than $750,000 and 
small agricultural service firms (importers) as having receipts of no 
more than $6,500,000. An estimated 13,000 importers are subject to the 
rules and regulations issued pursuant to the Cotton Research and 
Promotion Order. Most are considered small entities as defined by the 
Small Business Administration.
    This proposed rule would only affect importers of cotton and 
cotton-containing products and would raise the assessments paid by the 
importers under the Cotton Research and Promotion Order. The current 
assessment on imported cotton is $0.008267 per kilogram of imported 
cotton. The proposed assessment is $0.009874, an increase of $0.001607, 
which was calculated based on the 12-month average of monthly weighted 
average prices received by U.S. cotton farmers. The calculation, and, 
thus the increase, is dictated by the Cotton Research and Promotion 
Rules and Regulations, 7 CFR 1205.510. Section 1205.510, ``Levy of 
assessments'', indicates that ``the rate of the supplemental assessment 
on imported cotton will be the same as that levied on cotton produced 
within the United States.'' In addition, section 1205.510 provides that 
the 12-month average of monthly weighted average prices received by 
U.S. farmers will be used as the value of imported cotton for the 
purpose of levying the supplemental assessment on imported cotton.
    Under the Cotton Research and Promotion Program, assessments are 
used by the Cotton Board to finance research and promotion programs 
designed to increase consumer demand for Upland cotton in the United 
States and international markets. In 2007, producer assessments totaled 
$44 million and importer assessments totaled $30.4 million. According 
to the Cotton Board, should the volume of cotton products imported into 
the U.S. remain at the same level in 2007, one could expect the 
increased assessment to generate approximately $5.9 million.
    Importers with line-items appearing on U.S. Customs and Border 
Protection documentation with value of the cotton contained therein 
results of an assessment of two dollars ($2.00) or less will not be 
subject to assessments. In addition, imported cotton and products may 
be exempt from assessment if the cotton content of products is U.S. 
produced, cotton other than Upland, or imported products that are 
eligible to be labeled as 100 percent organic under the National 
Organic Program (7 CFR Part 205) and who is not a split operation.
    The rule does not impose additional recordkeeping requirements on 
importers.
    There are no Federal rules that duplicate, overlap, or conflict 
with this rule.

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

[[Page 43168]]

contained in the regulation to be amended have been previously approved 
by OMB and were assigned control number 0581-0093. This rule does not 
result in a change to the information collection and recordkeeping 
requirements previously approved.

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 $0.9874 cents per kilogram.
    (3) * * *
    (ii) * * *

                         Import Assessment Table
                           (Raw Cotton Fiber)
------------------------------------------------------------------------
                   HTS No.                      Conv. fact.   Cents/kg.
------------------------------------------------------------------------
5201000500...................................        0            0.9874
5201001200...................................        0            0.9874
5201001400...................................        0            0.9874
5201001800...................................        0            0.9874
5201002200...................................        0            0.9874
5201002400...................................        0            0.9874
5201002800...................................        0            0.9874
5201003400...................................        0            0.9874
5201003800...................................        0            0.9874
5204110000...................................        1.1111       1.0971
5204200000...................................        1.1111       1.0971
5205111000...................................        1.1111       1.0971
5205112000...................................        1.1111       1.0971
5205121000...................................        1.1111       1.0971
5205122000...................................        1.1111       1.0971
5205131000...................................        1.1111       1.0971
5205132000...................................        1.1111       1.0971
5205141000...................................        1.1111       1.0971
5205210020...................................        1.1111       1.0971
5205210090...................................        1.1111       1.0971
5205220020...................................        1.1111       1.0971
5205220090...................................        1.1111       1.0971
5205230020...................................        1.1111       1.0971
5205230090...................................        1.1111       1.0971
5205240020...................................        1.1111       1.0971
5205240090...................................        1.1111       1.0971
5205310000...................................        1.1111       1.0971
5205320000...................................        1.1111       1.0971
5205330000...................................        1.1111       1.0971
5205340000...................................        1.1111       1.0971
5205410020...................................        1.1111       1.0971
5205410090...................................        1.1111       1.0971
5205420020...................................        1.1111       1.0971
5205420090...................................        1.1111       1.0971
5205440020...................................        1.1111       1.0971
5205440090...................................        1.1111       1.0971
5206120000...................................        0.5556       0.5486
5206130000...................................        0.5556       0.5486
5206140000...................................        0.5556       0.5486
5206220000...................................        0.5556       0.5486
5206230000...................................        0.5556       0.5486
5206240000...................................        0.5556       0.5486
5206310000...................................        0.5556       0.5486
5207100000...................................        1.1111       1.0971
5207900000...................................        0.5556       0.5486
5208112020...................................        1.1455       1.1311
5208112040...................................        1.1455       1.1311
5208112090...................................        1.1455       1.1311
5208114020...................................        1.1455       1.1311
5208114060...................................        1.1455       1.1311
5208114090...................................        1.1455       1.1311
5208118090...................................        1.1455       1.1311
5208124020...................................        1.1455       1.1311
5208124040...................................        1.1455       1.1311
5208124090...................................        1.1455       1.1311
5208126020...................................        1.1455       1.1311
5208126040...................................        1.1455       1.1311
5208126060...................................        1.1455       1.1311
5208126090...................................        1.1455       1.1311
5208128020...................................        1.1455       1.1311
5208128090...................................        1.1455       1.1311
5208130000...................................        1.1455       1.1311
5208192020...................................        1.1455       1.1311
5208192090...................................        1.1455       1.1311
5208194020...................................        1.1455       1.1311
5208194090...................................        1.1455       1.1311
5208196020...................................        1.1455       1.1311
5208196090...................................        1.1455       1.1311
5208224040...................................        1.1455       1.1311
5208224090...................................        1.1455       1.1311
5208226020...................................        1.1455       1.1311
5208226060...................................        1.1455       1.1311
5208228020...................................        1.1455       1.1311
5208230000...................................        1.1455       1.1311
5208292020...................................        1.1455       1.1311
5208292090...................................        1.1455       1.1311
5208294090...................................        1.1455       1.1311
5208296090...................................        1.1455       1.1311
5208298020...................................        1.1455       1.1311
5208312000...................................        1.1455       1.1311
5208321000...................................        1.1455       1.1311
5208323020...................................        1.1455       1.1311
5208323040...................................        1.1455       1.1311
5208323090...................................        1.1455       1.1311
5208324020...................................        1.1455       1.1311
5208324040...................................        1.1455       1.1311
5208325020...................................        1.1455       1.1311
5208330000...................................        1.1455       1.1311
5208392020...................................        1.1455       1.1311
5208392090...................................        1.1455       1.1311
5208394090...................................        1.1455       1.1311
5208396090...................................        1.1455       1.1311
5208398020...................................        1.1455       1.1311
5208412000...................................        1.1455       1.1311
5208416000...................................        1.1455       1.1311
5208418000...................................        1.1455       1.1311
5208421000...................................        1.1455       1.1311
5208423000...................................        1.1455       1.1311
5208424000...................................        1.1455       1.1311
5208425000...................................        1.1455       1.1311
5208430000...................................        1.1455       1.1311
5208492000...................................        1.1455       1.1311
5208494020...................................        1.1455       1.1311
5208494090...................................        1.1455       1.1311
5208496010...................................        1.1455       1.1311
5208496090...................................        1.1455       1.1311
5208498090...................................        1.1455       1.1311
5208512000...................................        1.1455       1.1311
5208516060...................................        1.1455       1.1311
5208518090...................................        1.1455       1.1311
5208523020...................................        1.1455       1.1311
5208523045...................................        1.1455       1.1311
5208523090...................................        1.1455       1.1311
5208524020...................................        1.1455       1.1311
5208524045...................................        1.1455       1.1311
5208524065...................................        1.1455       1.1311
5208525020...................................        1.1455       1.1311
5208592025...................................        1.1455       1.1311
5208592095...................................        1.1455       1.1311
5208594090...................................        1.1455       1.1311
5208596090...................................        1.1455       1.1311
5209110020...................................        1.1455       1.1311
5209110035...................................        1.1455       1.1311
5209110090...................................        1.1455       1.1311
5209120020...................................        1.1455       1.1311
5209120040...................................        1.1455       1.1311
5209190020...................................        1.1455       1.1311
5209190040...................................        1.1455       1.1311
5209190060...................................        1.1455       1.1311
5209190090...................................        1.1455       1.1311
5209210090...................................        1.1455       1.1311
5209220020...................................        1.1455       1.1311
5209220040...................................        1.1455       1.1311
5209290040...................................        1.1455       1.1311
5209290090...................................        1.1455       1.1311
5209313000...................................        1.1455       1.1311
5209316020...................................        1.1455       1.1311
5209316035...................................        1.1455       1.1311
5209316050...................................        1.1455       1.1311
5209316090...................................        1.1455       1.1311
5209320020...................................        1.1455       1.1311
5209320040...................................        1.1455       1.1311
5209390020...................................        1.1455       1.1311
5209390040...................................        1.1455       1.1311
5209390060...................................        1.1455       1.1311
5209390080...................................        1.1455       1.1311
5209390090...................................        1.1455       1.1311
5209413000...................................        1.1455       1.1311
5209416020...................................        1.1455       1.1311
5209416040...................................        1.1455       1.1311
5209420020...................................        1.0309       1.0179
5209420040...................................        1.0309       1.0179
5209430030...................................        1.1455       1.1311
5209430050...................................        1.1455       1.1311
5209490020...................................        1.1455       1.1311
5209490090...................................        1.1455       1.1311
5209516035...................................        1.1455       1.1311
5209516050...................................        1.1455       1.1311
5209520020...................................        1.1455       1.1311

[[Page 43169]]

 
5209590025...................................        1.1455       1.1311
5209590040...................................        1.1455       1.1311
5209590090...................................        1.1455       1.1311
5210114020...................................        0.6873       0.6786
5210114040...................................        0.6873       0.6786
5210116020...................................        0.6873       0.6786
5210116040...................................        0.6873       0.6786
5210116060...................................        0.6873       0.6786
5210118020...................................        0.6873       0.6786
5210192090...................................        0.6873       0.6786
5210214040...................................        0.6873       0.6786
5210216020...................................        0.6873       0.6786
5210216060...................................        0.6873       0.6786
5210218020...................................        0.6873       0.6786
5210314020...................................        0.6873       0.6786
5210314040...................................        0.6873       0.6786
5210316020...................................        0.6873       0.6786
5210318020...................................        0.6873       0.6786
5210414000...................................        0.6873       0.6786
5210416000...................................        0.6873       0.6786
5210418000...................................        0.6873       0.6786
5210498090...................................        0.6873       0.6786
5210514040...................................        0.6873       0.6786
5210516020...................................        0.6873       0.6786
5210516040...................................        0.6873       0.6786
5210516060...................................        0.6873       0.6786
5211110090...................................        0.6873       0.6786
5211120020...................................        0.6873       0.6786
5211190020...................................        0.6873       0.6786
5211190060...................................        0.6873       0.6786
5211320020...................................        0.6873       0.6786
5211390040...................................        0.6873       0.6786
5211390060...................................        0.6873       0.6786
5211490020...................................        0.6873       0.6786
5211490090...................................        0.6873       0.6786
5211590025...................................        0.6873       0.6786
5212146090...................................        0.9164       0.9049
5212156020...................................        0.9164       0.9049
5212216090...................................        0.9164       0.9049
5509530030...................................        0.5556       0.5486
5509530060...................................        0.5556       0.5486
5513110020...................................        0.4009       0.3958
5513110040...................................        0.4009       0.3958
5513110060...................................        0.4009       0.3958
5513110090...................................        0.4009       0.3958
5513120000...................................        0.4009       0.3958
5513130020...................................        0.4009       0.3958
5513210020...................................        0.4009       0.3958
5513310000...................................        0.4009       0.3958
5514120020...................................        0.4009       0.3958
5516420060...................................        0.4009       0.3958
5516910060...................................        0.4009       0.3958
5516930090...................................        0.4009       0.3958
5601210010...................................        1.1455       1.1311
5601210090...................................        1.1455       1.1311
5601300000...................................        1.1455       1.1311
5602109090...................................        0.5727       0.5655
5602290000...................................        1.1455       1.1311
5602906000...................................        0.526        0.5194
5607909000...................................        0.8889       0.8777
5608901000...................................        1.1111       1.0971
5608902300...................................        1.1111       1.0971
5609001000...................................        1.1111       1.0971
5609004000...................................        0.5556       0.5486
5701104000...................................        0.0556       0.0549
5701109000...................................        0.1111       0.1097
5701901010...................................        1.0444       1.0312
5702109020...................................        1.1          1.0861
5702312000...................................        0.0778       0.0768
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6505902545...................................        0.5844       0.5770
------------------------------------------------------------------------

* * * * *

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

    Dated: July 21, 2008.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. E8-16957 Filed 7-23-08; 8:45 am]
BILLING CODE 3410-02-P