[Federal Register Volume 76, Number 87 (Thursday, May 5, 2011)]
[Rules and Regulations]
[Pages 25533-25534]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-11047]



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 Rules and Regulations
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  Federal Register / Vol. 76, No. 87 / Thursday, May 5, 2011 / Rules 
and Regulations  

[[Page 25533]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 28

[AMS-CN-10-0111; CN-11-001]
 RIN 0581-AD11


User Fees for 2011 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 2011 crop cotton classification services 
under the Cotton Statistics and Estimates Act at the same level as in 
2010. These fees are also authorized under the Cotton Standards Act of 
1923. The 2010 crop user fee was $2.20 per bale, and this rule will 
continue the fee for the 2011 cotton crop at that same level. This fee 
and the existing reserve are sufficient to cover the costs of providing 
classification services for the 2011 crop, including costs for 
administration and supervision.

DATES: Effective Date: May 6, 2011.

FOR FURTHER INFORMATION CONTACT: Darryl Earnest, Deputy Administrator, 
Cotton and Tobacco Programs, AMS, USDA, Room 2635-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: A proposed rule detailing the revisions was 
published in the Federal Register on March 23, 2011 (76 FR 16321). A 
15-day comment period was provided for interested persons to respond to 
the proposed rule. Three comments were received from three national 
cotton industry organizations in support of the service and the 
decision to maintain the fee at the level established for the 2010 
crop.

Executive Order 12866

    This final 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 final 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 2010 
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 2010 
user fee for classification services was $2.20 per bale; the fee for 
the 2011 crop would be maintained at $2.20 per bale; the 2011 crop is 
estimated at 16,500,000 bales;
    (2) The fee for services will not affect competition in the 
marketplace;
    (3) The use of classification services is voluntary. For the 2010 
crop, 17,611,000 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 
2009 crop of 0.6210 cents per pound, 500 pound bales of cotton are 
worth an average of $311 each. The 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 amended 
by this final 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 final rule maintains the user fee charged to producers for 
cotton classification at $2.20 per bale for the 2011 cotton crop. The 
2011 user fee charged to farmers 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 changes 
made by 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 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)

[[Page 25534]]

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, this final rule establishes 
a user fee (dollars per bale classed) for the 2011 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 2010 through March 2011 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 cotton 
classification in 2011 is $2.20 per bale, which is the same fee charged 
for the 2010 crop. This fee is based on the pre-season projection that 
16.5 million bales will be classed by the United States Department of 
Agriculture during the 2011 crop year.
    Accordingly, Sec.  28.909, paragraph (b) will 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 will 
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 
will 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 will remain at 5 cents per bale. 
The fee in Sec.  28.910(b) for an owner receiving classification data 
from the National database will remain at 5 cents per bale, and the 
minimum charge of $5.00 for services provided per monthly billing 
period will 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 will remain at 
$2.20 per bale.
    The fee for returning samples after classification in Sec.  28.911 
will remain at 50 cents per sample.
    Pursuant to 5 U.S.C. 533, good cause exists for not postponing the 
effective date of this final rule until 30 days after publication in 
the Federal Register because this rule maintains uniform user fees for 
2011 crop cotton classification services as mandated by the Cotton 
Statistics and Estimates Act, at the same level as 2010.

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 amended 
to read 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. 51-65; 7 U.S.C. 471-476.


0
2. In Sec.  28.909, paragraph (b) is republished 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.
* * * * *

0
3. In Sec.  28.911, the last sentence of paragraph (a) is republished 
to read as follows:


Sec.  28.911  Review classification.

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

    Dated: April 29, 2011.
David R. Shipman,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2011-11047 Filed 5-4-11; 8:45 am]
BILLING CODE 3410-02-P