[Federal Register Volume 75, Number 80 (Tuesday, April 27, 2010)]
[Proposed Rules]
[Pages 22026-22027]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-9828]


 ========================================================================
 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. 75, No. 80 / Tuesday, April 27, 2010 / 
Proposed Rules  

[[Page 22026]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 28

[AMS-CN-10-0001; CN-10-001]
RIN 0581-AC99


User Fees for 2010 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 
maintain user fees for cotton producers for 2010 crop cotton 
classification services under the Cotton Statistics and Estimates Act 
at the same level as in 2009. These fees are also authorized under the 
Cotton Standards Act of 1923. The 2009 crop user fee was $2.20 per 
bale, and AMS proposes to continue the fee for the 2010 cotton crop at 
that same level. This proposed fee and the existing reserve are 
sufficient to cover the costs of providing classification services for 
the 2010 crop, including costs for administration and supervision.

DATES: Comments must be received on or before May 12, 2010.

ADDRESSES: Interested persons may comment on the proposed rule using 
the following procedures:
     Internet: http://www.regulations.gov.
     Mail: Comments may be submitted by mail to: Darryl 
Earnest, Deputy Administrator, Cotton and Tobacco Programs, AMS, USDA, 
Rm. 2637-S, STOP 0224, 1400 Independence Avenue, SW., Washington, DC 
20250-0224. Comments should be submitted in triplicate. 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 Room 2637--South Building, 1400 Independence Avenue, SW., 
Washington, DC. Comments can also be reviewed on: http://www.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 Programs, AMS, USDA, Room 2637-S, STOP 0224, 1400 
Independence Avenue, SW., Washington, DC 20250-0224. Telephone (202) 
720-3193, 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. 
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). Continuing the user fee at the 2009 
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 2009 
user fee for classification services was $2.20 per bale; the fee for 
the 2010 crop would be maintained at $2.20 per bale; the 2010 crop is 
estimated at 14,500,000 bales);
    (2) The fee for services will not affect competition in the 
marketplace;
    (3) The use of classification services is voluntary. For the 2009 
crop, 12,400,000 bales were produced; and, almost all of these bales 
were voluntarily submitted by growers for the classification service; 
and
    (4) Based on the average price paid to growers for cotton from the 
2008 crop of 0.5520 cents per pound, 500 pound bales of cotton are 
worth an average of $276 each. The proposed user fee for classification 
services, $2.20 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), 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 maintain the user fee charged to producers 
for cotton classification at $2.20 per bale for the 2010 cotton crop. 
The 2009 user fee charged to was calculated using new methodology, as 
was required by section 14201 of the Food, Conservation, and Energy Act 
of 2008 (Pub. L. 110-234) (2008 Farm Bill). Prior to the change in the 
2008 Farm Bill, the fee was determined using a user-fee formula 
mandated in the Uniform Cotton Classing Fees Act of 1987, as amended 
(Pub. L. 100-108, 728) (1987 Act). 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.
    Section 14201 of the 2008 Farm Bill provides that: (1) The 
Secretary shall make available cotton classification

[[Page 22027]]

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 proposed for the 2010 cotton crop 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 2009 through January 2010 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 proposed to be charged cotton producers for cotton 
classification in 2010 is $2.20 per bale which is the same fee charged 
for the 2009 crop. 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 2010 crop year.
    Accordingly, Sec.  28.909, paragraph (b) would reflect the 
continuation of the cotton classification fee at $2.20 per bale.
    As provided for in the 1987 Act, 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 $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 fees, 
if adopted, would be made effective for the 2010 cotton crop on July 1, 
2010.

List of Subjects in 7 CFR Part 28

    Administrative practice and procedure, Cotton, Cotton samples, 
Grades, Market news, Reporting and record keeping 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. 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: April 22, 2010.
Rayne Pegg,
Administrator, Agricultural Marketing Service.
[FR Doc. 2010-9828 Filed 4-23-10; 4:15 pm]
BILLING CODE P