[Federal Register Volume 74, Number 57 (Thursday, March 26, 2009)]
[Proposed Rules]
[Pages 13128-13129]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-6805]


 ========================================================================
 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
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 

  Federal Register / Vol. 74, No. 57 / Thursday, March 26, 2009 / 
Proposed Rules  

[[Page 13128]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 28

[Doc.  AMS-CN-09-0011; CN-09-001]


User Fees for 2009 Crop Cotton Classification Services to Growers

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: The Agricultural Marketing Service (AMS) is proposing to raise 
user fees for cotton producers for 2009 crop cotton classification 
services under the Cotton Statistics and Estimates Act. These user fees 
also are authorized under the Cotton Standards Act of 1923. The 2008 
user fee for this classification service was $2.00 per bale. This 
proposal would raise the fee for the 2009 crop to $2.20 per bale. The 
proposed fee and the existing reserve are sufficient to cover the costs 
of providing classification services, including costs for 
administration and supervision.

DATES: Comments must be received on or before April 10, 2009.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposed rule to Darryl Earnest, Deputy Administrator, 
Cotton and Tobacco Program, AMS, USDA, STOP 0224, 1400 Independence 
Avenue, SW., Washington, DC 20250-0224. Comments should be submitted in 
triplicate. Comments may also be submitted electronically to: 
regulations.gov. All comments should reference the docket number and 
the date and the page of this issue of the Federal Register. All 
comments received will be available for public inspection during 
regular business hours at the above office in Rm. 2637--South Building, 
1400 Independence Avenue, SW., Washington, DC. Comments can also be 
viewed on: regulations.gov. A copy of this notice may be found at: 
http://www.ams.usda.gov/cotton/rulemaking.htm.

FOR FURTHER INFORMATION CONTACT: Darryl Earnest, Deputy Administrator, 
Cotton and Tobacco Program, AMS, USDA, Room 2637-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 proposed 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 proposed 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 must 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 25,000 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). The increase above the 2008 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 2008 
user fee for classification services was $2.00 per bale; the fee for 
the 2009 crop would be increased to $2.20 per bale; the 2009 crop is 
estimated at 14,500,000 bales).
    (2) The fee for services will not affect competition in the 
marketplace; and
    (3) The use of classification services is voluntary. For the 2008 
crop, 12,740,000 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 
2007 crop of 53.50 cents per pound, 500 pound bales of cotton are worth 
an average of $267.50 each. The proposed user fee increase for 
classification services, $.20 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. 3501-3520), the 
information collection requirements contained in the provisions to be 
amended by this proposed rule have been previously approved by OMB and 
were assigned OMB control number 0581-AC43.

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

    This proposed rule would establish the user fee charged to 
producers for HVI classification at $2.20 per bale for the 2009 cotton 
crop. The 2009 user fee charged to cotton producers for High Volume 
Instrument (HVI) classification was calculated using new methodology, 
as was authorized by section 14201 of the Food, Conservation, and 
Energy Act of 2008 (Pub. L. 110-234) (2008 Farm Bill). In previous 
years, the fee was determined using a user-fee formula mandated in the 
Uniform Cotton Classing Fees Act of 1987 (Pub. L. 100-108, 101 Stat. 
728) (1987 Act), as amended. This formula used the previous year's base 
fee that was adjusted for inflation and economies of size (1 percent 
decrease/increase for every 100,000 bales above/below 12.5 million 
bales with maximum adjustment being 15 percent). The user 
fee was then further adjusted to comply with operating reserve 
constraints (between 10 and 25 percent of projected operating costs) 
specified by the 1987 Act.
    The 2008 user fee charged to cotton producers for High Volume 
Instrument

[[Page 13129]]

(HVI) classification services under the Cotton Statistics and Estimates 
Act of 1927 (7 U.S.C. 471-476) was $2.00 per bale during the 2008 
harvest season as determined by using the formula provided in the 1987 
Act. The fee covered salaries, costs of equipment and supplies, and 
other overhead costs, including costs for administration and 
supervision. Also, the fee structure for the 2007 crop year was 
incorporated under the authority of the Cotton Standards Act of 1923 (7 
U.S.C 51-65), by an interim final rule effective October 1, 2007 (72 FR 
56242).
    Section 14201 of the 2008 Farm Bill provides that: (1) The 
Secretary shall make available cotton classification services to 
producers of cotton, and provide for the collection of classification 
fees from participating producers or agents that voluntarily agree to 
collect and remit the fees on behalf of the producers; (2) 
classification fees collected and the proceeds from the sales of 
samples submitted for classification shall, to the extent practicable, 
be used to pay the cost of the services provided, including 
administrative and supervisory costs; (3) the Secretary shall announce 
a uniform classification fee and any applicable surcharge for 
classification services not later than June 1 of the year in which the 
fee applies; and (4) in establishing the amount of fees under this 
section, the Secretary shall consult with representatives of the United 
States cotton industry. At pages 313-314, the Joint Explanatory 
Statement of the committee of conference for section 14201 stated the 
expectation that the cotton classification fee would be established in 
the same manner as was applied during the 1992 through 2007 fiscal 
years. The classification fee should continue to be a basic, uniform 
fee per bale fee as determined necessary to maintain cost-effective 
cotton classification service. Further, in consulting with the cotton 
industry, the Secretary should demonstrate the level of fees necessary 
to maintain effective cotton classification services and provide the 
Department of Agriculture with an adequate operating reserve, while 
also working to limit adjustments in the year-to-year fee.
    Under the provisions of section 14201, a user fee (dollar per bale 
classed) is established that, when combined with other sources of 
revenue, will result in projected revenues sufficient to reasonably 
cover budgeted costs--adjusted for inflation--and allow for adequate 
operating reserves to be maintained. Costs considered in this method 
include salaries, costs of equipment and supplies, and other overhead 
costs, such as facility costs and costs for administration and 
supervision. In addition to covering expected costs, the user fee is 
set such that projected revenues will generate an operating reserve 
adequate to effectively manage uncertainties related to crop size and 
cash-flow timing while meeting minimum reserve requirements set by the 
Agricultural Marketing Service, which require maintenance of a reserve 
fund amount equal to four months of projected operating costs.
    Extensive consultations regarding the establishment of the 
classification fee with U.S. cotton industry representatives were held 
during the period from September 2008 through January 2009 during 
numerous publicly held meetings. Representatives of all segments of the 
cotton industry, including producers, ginners, bale storage facility 
operators, merchants, cooperatives, and textile manufacturers were 
addressed in various industry-sponsored forums.
    The user fee established to be charged cotton producers for High 
Volume Instrument (HVI) classification in 2009 is $2.20 per bale. This 
fee is based on the pre-season projection that 14.5 million bales will 
be classed by the United States Department of Agriculture during the 
2009 crop year.
    Accordingly Sec.  28.909, paragraph (b) would reflect the increase 
of the HVI classification fee to $2.20 per bale.
    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 increase to 
$2.20 per bale.
    The fee for returning samples after classification in Sec.  28.911 
would remain at 50 cents per sample.
    A 15-day comment period is provided for public comments. This 
period is appropriate because it is anticipated that the proposed 
changes, if adopted, would be made effective for the 2009 cotton crop 
on July 1, 2009.

List of Subjects in 7 CFR Part 28

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

    For the reasons set forth in the preamble, 7 CFR part 28 is 
proposed to be amended to read as follows:

PART 28--[AMENDED]

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

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

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


Sec.  28.909  Costs.

* * * * *
    (b) The cost of High Volume Instrument (HVI) cotton classification 
service to producers is $2.20 per bale.
* * * * *
    3. In Sec.  28.911, the last sentence of paragraph (a) is revised 
to read as follows:


Sec.  28.911  Review classification.

    (a) * * * The fee for review classification is $2.20 per bale.
* * * * *

    Dated: March 23, 2009.
Craig Morris,
Acting Associate Administrator.
[FR Doc. E9-6805 Filed 3-23-09; 4:15 pm]
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