[Federal Register Volume 77, Number 70 (Wednesday, April 11, 2012)]
[Proposed Rules]
[Pages 21684-21685]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-8677]

Proposed Rules
                                                Federal Register

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.


Federal Register / Vol. 77, No. 70 / Wednesday, April 11, 2012 / 
Proposed Rules

[[Page 21684]]


Agricultural Marketing Service

7 CFR Part 28

[Doc. AMS-CN-12-0005]
RIN 0581-AD23

User Fees for 2012 Crop Cotton Classification Services to Growers

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.


SUMMARY: The Agricultural Marketing Service (AMS) is proposing to 
maintain user fees for cotton producers for 2012 crop cotton 
classification services under the Cotton Statistics and Estimates Act 
at the same level as in 2011. These fees are also authorized under the 
Cotton Standards Act of 1923. The 2011 crop user fee was $2.20 per 
bale, and AMS proposes to continue the fee for the 2012 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 2012 crop, including costs for administration and supervision.

DATES: Comments must be received on or before April 26, 2012.

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 & Tobacco Programs, AMS, USDA, 
3275 Appling Road, Room 11, Memphis, TN 38133. 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 will be available for public inspection during regular 
business hours at Cotton & Tobacco Program, AMS, USDA, 3275 Appling 
Road, Memphis, TN 38133. A copy of this notice may be found at: 

FOR FURTHER INFORMATION CONTACT: Darryl Earnest, Deputy Administrator, 
Cotton & Tobacco Programs, AMS, USDA, 3275 Appling Road, Room 11, 
Memphis, TN 38133. Telephone (901) 384-3060, facsimile (901) 384-3021, 
or email darryl.earnest@ams.usda.gov.


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 2011 
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 2011 
user fee for classification services was $2.20 per bale; the fee for 
the 2012 crop would be maintained at $2.20 per bale; the 2012 crop is 
estimated at 14,475,000 bales);
    (2) The fee for services will not affect competition in the 
    (3) The use of classification services is voluntary. For the 2011 
crop, 15,000,000 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 
2010 crop of 0.8212 cents per pound, 500 pound bales of cotton are 
worth an average of $410 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 a 2011 user fee of $2.20 per bale 
charged to producers for cotton classification for the 2012 cotton 
crop. This fee is set at the same level as the 2011 user fee. The 2012 
user fee was set in accordance to section 14201 of the Food, 
Conservation, and Energy Act of 2008 (Pub. L. 110-234) (2008 Farm 
Bill). 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

[[Page 21685]]

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. Specifically, it states that 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 amount 
per bale classed) is proposed for the 2012 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 at least 
four months of projected operating costs.
    The user fee proposed to be charged cotton producers for cotton 
classification in 2012 is $2.20 per bale, which is the same fee charged 
for the 2011 crop. This fee is based on the preseason projection that 
14,475,000 bales will be classed by the United States Department of 
Agriculture during the 2012 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 user fees are not changing and it is 
anticipated that the proposed fees, if adopted, would be made effective 
for the 2012 cotton crop on July 1, 2012.

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:


    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 4, 2012.
Robert C. Keeney,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2012-8677 Filed 4-10-12; 8:45 am]