[Federal Register Volume 80, Number 45 (Monday, March 9, 2015)]
[Rules and Regulations]
[Pages 12321-12332]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-04385]



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  Federal Register / Vol. 80, No. 45 / Monday, March 9, 2015 / Rules 
and Regulations  

[[Page 12321]]



DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1471

RIN 0551-AA86


Pima Agriculture Cotton Trust Fund and Agriculture Wool Apparel 
Manufacturers Trust Fund

AGENCY: Foreign Agricultural Service and Commodity Credit Corporation 
(CCC), USDA.

ACTION: Final rule with request for comments.

-----------------------------------------------------------------------

SUMMARY: This final rule implements the Pima Agriculture Cotton Trust 
Fund (Agriculture Pima Trust) and the Agriculture Wool Apparel 
Manufacturers Trust Fund (Agriculture Wool Trust) Fund established in 
the Agricultural Act of 2014 (Farm Bill). The Agriculture Pima Trust 
provides annually for one payment, called the Pima Cotton Payments. The 
Agriculture Wool Trust provides annually for four payments. The first 
payment under the Agriculture Wool Trust is currently administered by 
the Department of Commerce's Office of Textiles and Apparel (OTEXA), 
and is called the Grants to Manufacturers of Certain Worsted Wool 
Fabrics. This program is being transferred from OTEXA to the Secretary 
of Agriculture (Secretary), who will administer the payment for the 
2015-2019 calendar years, and will be called Payments to Manufacturers 
of Certain Worsted Wool Fabrics. The second payment is called 
Monetization of the Wool TRQ. The Farm Bill requires the Secretary to 
determine a monetary amount equivalent to what a person would have 
saved if OTEXA's Wool Tariff Rate Quota program (Wool TRQ) were still 
in effect. This payment will be based on OTEXA's Wool Tariff Rate Quota 
program, which terminated at the end of calendar year 2014. The 
Monetization of the Wool TRQ will be administered by the Secretary for 
the 2015-2019 calendar years. The third payment is called the Wool 
Yarn, Wool Fiber, and Wool Top Duty Compensation Payment. Payments are 
made to processors of wool yarn, wool fiber, and wool top to compensate 
them for termination of the suspension of import duties on such wool. 
This payment will be administered by the Secretary for the 2015-2019 
calendar years. The fourth payment is called the Refund of Duties Paid 
on Imports of Certain Wool Products. This program is currently 
administered by the Department of Homeland Security's Customs and 
Border Protection (CBP) through calendar year 2015. The program will be 
transferred in calendar year 2016 to the Secretary, who will administer 
the program for the 2016-2019 calendar years. Regulations for the 
fourth payment will be published at a later date.

DATES: This final rule is effective March 9, 2015. Comments concerning 
this final rule must be received by April 8, 2015, to be assured 
consideration. We are issuing this final rule without prior notice and 
opportunity for comment.

ADDRESSES: The Foreign Agricultural Service (FAS), USDA, invites 
interested persons to submit comments on this final rule. Comments may 
be submitted by one of the following methods:
     Federal e-Rulemaking Portal: Go to http://www.regulations.gov. Preferred method; follow the on-line instructions 
for submitting comments on the final rule.
     Email: Comments can also be addressed to Mr. Benjamin Chan 
at [email protected]. All comments submitted in response to this 
rule will be included in the record and will be made available to the 
public. FAS will make the comments publicly available online at: http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Benjamin Chan, Import Policies and 
Export Reporting Division, Office of Trade Policy, Foreign Agricultural 
Service, U.S. Department of Agriculture; email: [email protected]; 
202-720-8877.

SUPPLEMENTARY INFORMATION: 

Background

Purpose of the Regulatory Action

    This rule sets forth regulations regarding the implementation of 
the Pima Agriculture Cotton Trust Fund and the Agriculture Wool Apparel 
Manufacturers Trust Fund.

Subpart A. Pima Agriculture Cotton Trust Fund (Agriculture Pima Trust)

    The Agriculture Pima Trust was established in section 12314 of the 
Farm Bill. The Agriculture Pima Trust is a funding mechanism for pima 
cotton payments.
(1) Pima Cotton Payments
    The Secretary is required in section 12314 of the Farm Bill to 
establish an annual payment for domestic users of pima cotton, pima 
cotton yarn spinners, and pima cotton trade associations. The Foreign 
Agricultural Service (FAS) has been delegated the authority to 
administer this payment and to issue regulations to carry it out for 
calendar years 2014-2018. There was insufficient time to publish 
regulations for the 2014 payment and a notice was published in the 
Federal Register at 72 FR 29363 on May 2, 2014. Subpart A is applicable 
to annual payments in the 2015-2018 calendar years.
    The purpose of the annual payment is to provide monetary relief to 
certain persons in the U.S. that have incurred economic injury through 
the importation of pima cotton and have incurred tariffs on pima cotton 
fabric that are higher than tariffs on certain imported apparel 
articles made of pima cotton fabric. The first Pima Cotton Trust Fund 
was established under the Tax Relief and Health Care Act of 2006 and 
administered by the Customs and Border Protection Agency of the 
Department of Homeland Security (CBP) in 2007 and 2008. Section 12314 
of the Farm Bill authorized the Agriculture Pima Trust and pima cotton 
payment for the 2014-2018 calendar years. The Farm Bill authorizes $16 
million from the Commodity Credit Corporation (CCC) for each calendar 
year to fund annual payments.
    Section 12314 requires that a specific percentage of annual funding 
be distributed to certain sectors of the domestic pima cotton apparel 
industry. Twenty-five percent is to be paid to one or more nationally 
recognized associations established for the promotion of pima cotton 
for use in textile and apparel goods.
    Twenty-five percent is to be paid to domestic yarn spinners of pima 
cotton that, during the calendar year

[[Page 12322]]

immediately preceding the payment and during calendar year 2013, 
produced ring spun cotton yarns in the United States measuring less 
than 83.33 decitex (exceeding 120 metric number), in single and plied 
form. A payment to a yarn spinner is based on the ratio of the yarn 
spinner's 2013 production to the total production of all domestic yarn 
spinners in 2013 who qualify for a payment.
    The remaining fifty percent is to be paid to manufacturers that 
during both the calendar year immediately preceding the payment and 
during the 2013 calendar year used imported pima cotton fabric (80s or 
higher count and 2-ply in warp) to manufacture men's and boys' woven 
pima cotton shirts. A payment to a manufacturer is based on the ratio 
of the dollar value (excluding duty, shipping, and insurance) of the 
manufacturer's 2013 production of men's and boys' woven pima cotton 
shirts to the dollar value (excluding duty, shipping, and insurance) of 
the total production in 2013 of all men's and boys' woven pima cotton 
shirts by manufacturers who qualify for a payment. The Farm Bill 
explicitly requires exclusion of ``duty, shipping, and related costs'' 
from the reported dollar value of imported woven cotton shirting 
fabric. Of the costs ``related'' to shipping that are separate from the 
freight cost itself, insurance is generally the largest. As payments to 
manufacturers are based on a production ratio incorporating the 
intrinsic dollar value of the imported fabric, excluding ``duty, 
shipping, and related costs'' in both parts of the ratio, to limit 
``related costs'' to insurance gives effect to the purpose of the 
statute and affords simplicity of calculation.
    To apply for a payment, claimants are required to submit an 
affidavit by March 15 of the calendar year of the application for a 
payment. Payments will be made not later than April 14.
    Persons applying for a payment must provide information required by 
the Secretary through annual affidavits.

Subpart B. Agriculture Wool Apparel Manufacturers Trust Fund 
(Agriculture Wool Trust)

    The Agriculture Wool Trust was established in section 12315 of the 
Farm Bill. The Agriculture Wool Trust is a funding mechanism for four 
payments: (1) Payments to Manufacturers of Certain Worsted Wool 
Fabrics; (2) Monetization of the Wool Tariff Rate Quota; (3) Wool Yarn, 
Wool Fiber, and Wool Top Duty Compensation Payment; and (4) Refund of 
Duties Paid on Imports of Certain Wool Products.
(1) Payments to Manufacturers of Certain Worsted Wool Fabrics
    OTEXA has administered the Grants to Manufacturers of Certain 
Worsted Wool Fabrics program through calendar 2014. Section 4002(c)(6) 
of the Miscellaneous Trade and Technical Corrections Act of 2004, as 
amended, authorizes OTEXA to administer this payment through 2014. 
Section 12315(b)(1) of the Farm Bill directed the Secretary to continue 
to administer this payment for the 2015-2019 calendar years. The title 
is changed to ``Payments to Manufacturers of Certain Worsted Wool 
Fabrics'' to avoid confusion with competitive grant programs also 
administered by the Secretary.
    The purpose of this payment is to provide financial assistance to 
persons in the U.S. that manufactured worsted wool fabrics during 1999, 
2000, and 2001. Section 12315 of the Farm Bill authorizes the Secretary 
to continue to make these payments to the same persons that, during the 
calendar year immediately preceding the payment and during calendar 
years 1999, 2000, and 2001, were manufacturers of at least one of two 
kinds of worsted wool fabrics: (1) Subheading 9902.51.11 of the 
Harmonized Tariff Schedule of the United States (HTS) containing 85 
percent or more by weight of wool, with average fiber diameters greater 
than 18.5 microns; and (2) subheading 9902.51.15 of the HTS containing 
85 percent or more by weight of wool, with average fiber diameters of 
18.5 microns or less.
    All references to subheadings of the HTS in the context of this 
payment are to the subheadings as described in the HTS in 2014.
    As specified by the Miscellaneous Trade and Technical Corrections 
Act of 2004, an amount of $2.666 million is available each year for 
each HTS subheading of wool fabric, to be divided between persons based 
on the percentage of each person's total actual manufacturing of that 
type of worsted wool fabric during each of calendar years 1999, 2000, 
and 2001 in relation to the total manufacturing of such fabric by all 
persons who qualified for payments in those years.
    Persons applying for a payment must provide information required by 
the Secretary through annual affidavits.
(2) Monetization of the Wool Tariff Rate Quota (TRQ)
    The Wool TRQ was established in Title V of the Trade and 
Development Act of 2000, and provided for temporary duty reductions--
i.e., lower duty rates--on limited quantities of two categories of 
worsted wool fabrics suitable for use in making suits, suit-type 
jackets, or trousers for men and boys. The TRQ has been administered 
since 2004 by OTEXA, and the authority for the TRQ expired on December 
31, 2014.
    This worsted wool fabric is of the kind described in subheading 
9902.51.11 of the HTS with average fiber diameters greater than 18.5 
microns, and subheading 9902.51.15 of the HTS with average fiber 
diameters of 18.5 microns or less. A third worsted wool fabric HTS 
subheading was added to the TRQ by the Miscellaneous Trade Act of 2004, 
subheading 9902.51.16 of the HTS, with average fiber diameters of 18.5 
microns or less.
    All references to subheadings of the HTS in the context of this 
payment are to the subheadings as described in the 2014 HTS. The 
subheading references are to a past HTS because these subheadings have 
expired and have been subsumed under other HTS headings in 2015. 
Congress also used these now expired HTS subheadings in the Farm Bill, 
further necessitating their use here. The term ``duty paid'' means the 
dollar amount of the duty actually paid by an importer in the calendar 
year immediately preceding the payment. In other words, duty paid 
equals the applicable duty rate multiplied by the quantity of worsted 
wool fabric imported. The term ``lower duty rate'' means the rate of 
duty that would have been applied under the 2014 HTS because of the 
duty reduction percentage required by the Wool TRQ that ended on 
December 31, 2014.
    On February 7, 2014, Congress created in section 12315(e) of the 
Farm Bill a new payment that ``monetizes'' OTEXA's Wool TRQ. Because 
the lower duty rate is no longer available to importers after December 
31, 2014, when authority for the TRQ expired, Congress decided to 
monetarily compensate importers of worsted wool fabric of the kind 
covered by the three HTS subheadings for the additional cost of the 
increased tariff. Congress accomplished this in section 12315(e) by 
requiring that in the event that the Wool TRQ administered by OTEXA 
should expire during the administration of the Agriculture Wool Trust 
by the Secretary (through 2019), the Secretary shall determine an 
amount ``. . . that is equal to the amount the manufacturer or 
successor-in-interest would have saved during the calendar year of the 
payment if the suspension [or reduction] of duty on wool fabrics were 
in effect.'' The Secretary has delegated this function to FAS at 7 CFR 
2.43.
    Section 12315(e) provides that only the person (or a successor-in-
interest to the person) that imported worsted wool

[[Page 12323]]

fabric involving one or more of the three HTS subheadings covered by 
this payment is eligible for the payment. To be eligible for a payment, 
the person must also have used the imported worsted wool fabric to 
produce in the U.S. suits, suit-type jackets, or trousers for men and 
boys (or, in the case of imported wool of the kind described in HTS 
subheading 9902.51.16, must have manufactured the wool fabric) during 
the calendar year immediately preceding the payment.
    The worsted wool fabric covered by the three HTS subheadings under 
this payment are either imported directly by persons (i.e., importing 
manufacturer), in which case the person directly purchased the imported 
worsted wool fabric and paid the duty, or imported indirectly (i.e., 
non-importing manufacturer) through a third party broker that had 
directly paid the duty. The payment applies to persons that either 
directly or indirectly imported worsted wool fabric.
    The calendar year immediately preceding the payment is the time 
period that will be used to establish the basis for calculating a 
payment. This historical basis applies to the duty paid and to the 
production or processing by the person applying for a payment. The duty 
paid arises from application of the duty rate applicable to imports of 
one or more of the three worsted wool fabrics of the kind described in 
the three subheadings covered by the payment. To be eligible for a 
payment, during the calendar year immediately preceding the payment a 
person must have imported, directly or indirectly, one or more of these 
HTS subheadings of worsted wool fabric, and used such worsted wool 
fabric in the U.S. to make men's and boy's suits, suit-type jackets, or 
trousers (or, in the case of subheading 9902.51.16, manufactured such 
worsted wool fabric).
    Section 12315(e) of the Farm Bill anticipates a time when the TRQ's 
lower duty rate is no longer in effect, acknowledges that duty rates 
will have increased upon expiration of the TRQ, and focuses on the 
savings that an importer (direct or indirect) of worsted wool fabric 
would have realized had the lower duty rate remained in effect. Section 
12315(e) states that the savings is ``. . . an amount . . . equal to 
the amount the manufacturer or successor-in-interest would have saved 
during the calendar year . . . if the suspension [or reduction] of duty 
on wool fabrics were in effect.'' The focus of the savings is on the 
difference between the duty paid for the worsted wool fabric in the 
calendar year immediately preceding the payment, and the duty that 
would have been paid on the same quantity of worsted wool fabric if the 
lower duty rate had applied. This allows the payment to address the 
``savings'' contemplated in 12315(e) of the Farm Bill as close to the 
real time experience of the person as is administratively possible. For 
example, a person's import of worsted wool fabric in calendar year 2016 
will be the basis for calculating the person's payment in 2017. This is 
consistent with the statute's focus on the savings that would have been 
realized if a TRQ were still in effect, and is also consistent with 
OTEXA previously basing a TRQ allocation on a period of time 
immediately prior to the allocation.
    The payment will be made to eligible persons by April 15 of the 
calendar year subsequent to the year of the person's reported wool 
fabric imports. This allows the Secretary to base the payment on the 
person's total actual imports of wool fabric during the calendar year 
immediately preceding the payment.
    The savings involves three factors spread over two time periods: 
(1) The duty paid at the higher duty rate applicable to the worsted 
wool fabric described in the applicable 2014 HTS subheadings in the 
calendar year immediately preceding the payment; (2) the production or 
further processing of the imported worsted wool fabric in the calendar 
year immediately preceding the payment; and (3) the duty paid at the 
lower duty rate applicable to that HTS subheading of worsted wool 
fabric in 2014, the last year the TRQ was effective. The higher value 
of duty paid in the calendar year immediately preceding the payment is 
used to calculate the 2016-2019 payments. However, for the 2015 
payment, the higher duty rate in the 2015 HTS will be used instead of 
the duty rate applicable in the calendar year immediately preceding the 
payment, which would be 2014. The reason for this exception for the 
2015 payment is that 2014 is both the last year in which the TRQ's 
lower duty rate was still in effect, and is also the calendar year 
immediately preceding the payment (2015). As a result, for the 2015 
payment, a proxy is necessary to serve as the higher duty rate in the 
calendar year immediately preceding the payment. It is necessary to 
create such a proxy and generate a 2015 payment, because the statute 
requires that this payment be made in any year in which the wool TRQ is 
not in effect. The first year the TRQ is not in effect is calendar year 
2015. Notwithstanding this proxy for the higher duty rate for a 2015 
payment, the calendar year immediately preceding the payment (2014) 
will still be used to establish that production or processing by the 
eligible person occurred (which is an eligibility requirement).
    There were three essential data components of the wool TRQ that 
terminated at the end of the 2014 calendar year: (1) The quantity of 
imported wool fabric subject to the lower duty rate; (2) the price of 
the imported wool fabric; and (3) the person's actual production of 
worsted wool suits, suit-type jackets, or trousers for men and boys 
(or, in the case of wool under HTS subheading 9902.51.16, manufactured 
the wool fabric). This information has been annually collected by OTEXA 
by means of affidavits supplied by persons applying for a payment. The 
Secretary will continue to collect this information through annual 
affidavits to ensure that the person, during the calendar year 
immediately preceding the payment, (1) imported, either directly or 
indirectly, the quantity of worsted wool fabric of the kind described 
under one or more of the HTS subheadings covered by this payment, and 
(2) produced in the U.S. suits, suit-type jackets, or trousers for men 
and boys (or, in the case of wool under HTS subheading 9902.51.16, 
manufactured the wool fabric).
    The dollar value and quantity of such imports are also factors in 
determining the savings that would have been realized because of the 
TRQ. Dollar value data effectively captures the price of such fabric 
and the dollar amount paid by the person. OTEXA has collected data 
about the dollar value and quantity of such imports by requiring the 
person to report the dollar value and quantity of the imports during 
the first six months of the calendar year of the license allocation. 
The Secretary will continue to collect the person's reported dollar 
value and quantity of imports of worsted wool fabric, but will require 
information about imports for the entire calendar year immediately 
preceding the payment. The savings in the context of the payment can be 
restated accordingly. In any calendar year in which the lower duty rate 
on worsted wool fabric of the kind described in subheadings 9902.51.11, 
9902.51.15, and 9902.51.16 of the 2014 HTS is not in effect, a person 
(or a successor-in-interest of the person) that, during the calendar 
year immediately preceding the payment, in the U.S., (1) directly or 
indirectly imported worsted wool fabric of the kind described under one 
or more of the three HTS subheadings covered by this payment, and (2) 
used the worsted wool fabric to produce suits, suit-type jackets, or

[[Page 12324]]

trousers for men and boys (or, in the case of worsted wool fabric 
covered by subheading 9902.51.16, manufactured the worsted wool 
fabric), is eligible for a payment that is equivalent to the difference 
between the higher duty paid on such worsted wool fabric in the 
calendar year immediately preceding the payment and the reduced duty 
that would have been payable under the TRQ (in 2014) on the quantity of 
worsted wool fabric imported in the calendar year immediately preceding 
the payment. For the purpose of calculating the payment for each of the 
2015-2019 calendar years, it will be assumed that 100% of the person's 
imports were covered by the lower duty. The rationale for this 
assumption is that under the wool TRQ that expired on December 31, 
2014, persons that received licenses to import up to specific amounts 
of worsted wool fabric at reduced duty rates never used the entire 
license allotment, and the excess allotment was left unused. In those 
cases, because 100% of the person's imports were in fact covered by the 
available lower duty rate under the TRQ, the savings referenced in 
section 12315(e) should also apply to 100% of a person's imports.
    The duty rate codified in the 2014 HTS applicable to imports of 
worsted wool fabric in the calendar year immediately preceding the 
payment fall into one of three categories: (1) The general duty rate 
that is applicable to worsted wool fabric covered by the subheading 
unless one of the other two categories applies; (2) the duty rate is 
0%, because imports from certain listed countries are duty free; and 
(3) duty rates applicable to imports from specific countries (e.g., 
7.5% duty rate for imports of worsted wool fabric under subheading 
9902.51.11 of the HTS from Oman in 2015). Because the HTS is statutory, 
one of the three categories must be applied when calculating a monetary 
payment. Similarly, in years following 2014, the applicable duty may 
vary as a function of the country of origin of the imported fabric. In 
any given year, the country of origin of the worsted wool fabric will 
affect the applicable duty rate and resulting duty paid used to 
calculate the payment. The duty rate applicable to worsted wool fabric 
under subheadings 9902.51.15 and 9902.51.16 of the 2014 HTS was 0%, and 
for subheading 9902.51.11 of the 2014 HTS was 10%. Thus, in any given 
year, duty rates may vary based on the country of origin of the 
imported fabrics, and as a result, the amount of the payment may be 
significantly affected.
    The payment will be annually calculated for each of the 2015-2019 
calendar years as follows. For each HTS subheading, the savings of the 
person for any given calendar year will be the difference between the 
higher duties paid in the calendar year preceding the payment and the 
duties that would have been payable at the lower 2014 duty rate. The 
savings for each of the three subheadings will then be added together, 
the sum of which will equal the annual payment for that person.
    Two simple examples, the first involving imports in 2017 and the 
other in 2015, illustrate how this calculation will work.
    The first example applies to a payment in 2017. Under the TRQ that 
expired on December 31, 2014, worsted wool fabrics entering the United 
States under HTS subheadings 9902.51.15 and 9902.51.16 were assessed 
zero duty, and worsted wool fabrics from Oman entering under 9902.51.11 
were assessed a 10% duty. Starting on January 1, 2017, assume that 
imports entering the United States of worsted wool fabrics previously 
described under HTS subheadings 9902.51.15 and 9902.51.16 (but in 2017 
actually entering under a different HTS subheading, because of the 
expiration of the particular subheadings under HTS chapter 99) are 
assessed a 20% duty, and worsted wool fabrics from Oman previously 
described under 9902.51.11 are assessed a 10% duty.
    A person imports 200 square meters of worsted wool fabric in 2017, 
100 square meters of which is of the kind described by HTS subheadings 
9902.51.15 and 9902.51.16, and the remaining 100 square meters is of 
the kind described in HTS subheading 9902.51.11, imported from Oman. 
The person reports a dollar value of $1 per square meter. For the 100 
square meters of worsted wool described under HTS subheadings 
9902.51.15 and 9902.51.16, the calculation would be 0.20 (20% converted 
to a numeric value), which is the duty rate in 2016, minus 0 (2014 duty 
rate, 0%, converted to a numeric value), multiplied by 100 (dollar 
value), which would equal $20 ((0.20-0) x 100). For the 100 square 
meters of worsted wool fabric described under HTS subheading 9902.51.11 
and imported from Oman, the calculation would be 0.10 (10% converted to 
a numeric value), the duty rate in 2015, the calendar year immediately 
preceding the payment, minus 0.10 (10%, the 2016 duty rate when Oman is 
the country of origin) multiplied by 100 (dollar value), which would 
equal $0 ((0.10-0.10) x 100).
    The second example applies to a payment in 2015 using the ``2015 
proxy'' discussed above. Recall that under the applicable TRQ that 
expired on December 31, 2014, worsted wool fabrics entering the United 
States under HTS subheadings 9902.51.15 and 9902.51.16 were assessed 
zero duty, and worsted wool fabrics from Oman entering under 9902.51.11 
were assessed a 10% duty. Starting on January 1, 2015, imports entering 
the United States of worsted wool fabrics previously described under 
HTS subheadings 9902.51.15 and 9902.51.16 are assessed a 25% duty, and 
imports of worsted wool fabrics from Oman previously described under 
9902.51.11 are assessed a 20% duty.
    A person imports 200 square meters of worsted wool fabric in 2015, 
100 square meters of which is of the kind previously described by HTS 
subheadings 9902.51.15 and 9902.51.16, and the remaining 100 square 
meters is of the kind previously described in HTS subheading 9902.51.11 
imported from Oman. The person reports a dollar value of $1 per square 
meter. For the 100 square meters of worsted wool under HTS subheadings 
9902.51.15 and 9902.51.16, the calculation would be 0.25 (25% converted 
to a numeric value), which is the 2015 higher duty proxy used when the 
calendar year immediately preceding the payment is 2014, minus 0 (2014 
duty rate, 0%, converted to a numeric value), multiplied by 100 (dollar 
value), which would equal $25 ((0.25-0) x 100). For the 100 square 
meters of worsted wool fabric under HTS subheading 9902.51.11 imported 
from Oman, the calculation would be 0.20 (20% converted to a numeric 
value), the 2015 higher duty proxy when the calendar year immediately 
preceding the payment is 2014, minus 0.10 (10%, the 2014 duty rate when 
Oman is the country of origin) multiplied by 100 (dollar value), which 
would equal $10 ((0.20-0.10) x 100). The statutory language of section 
12315 directs the Secretary to determine the savings that the person 
would have realized if the lower duty rate had been in effect. Thus, it 
is not necessary to determine what the person would have done with the 
savings realized from the lower duty rate. Nor is it necessary to 
inquire about the person's imports in a year that also include imported 
worsted wool fabric that is of the kind under HTS subheadings other 
than those covered by this payment, imported worsted wool fabric not 
subject to the duty reduction, or domestic wool.
    As discussed earlier, the payment applies to direct and indirect 
imports of

[[Page 12325]]

worsted wool fabric of the kind described in the three specific HTS 
subheadings. If the import was through a third party broker, the person 
must so state in the affidavit prior to the payment, and provide any 
other information required by FAS. For persons that are indirect 
importers of worsted wool fabric, the dollar value of the imports 
reported in their affidavit will be subject to a 10% reduction by the 
Secretary. The reason for this reduction is that the broker that 
directly imported the worsted wool fabric is assumed to sell it to the 
person who submits the affidavit for an amount higher than the tariff 
price. The 10% reduction is intended to compensate for that higher 
price, and make the reported price paid by indirect importers more 
equivalent to the price paid by direct importers. OTEXA also 
administered this 10% reduction in the reported price paid by indirect 
importers as part of its administration of the wool TRQ.
    Persons that imported worsted wool fabric directly are required to 
submit to FAS as part of the affidavit package scanned copies of the 
CBP Form 7501 ``Entry Summary'' for the relevant calculations made in 
the affidavit. Persons that imported worsted wool fabric indirectly are 
required to submit to FAS as part of the affidavit package invoices 
from third party brokers for the relevant calculations made in the 
affidavit.
    Persons applying for a payment must provide information required by 
the Secretary through annual affidavits.
(3) Wool Yarn, Wool Fiber, and Wool Top Duty Compensation Payment
    All references to subheadings of the HTS in the context of this 
payment are to the subheadings as described in the 2014 HTS.
    The duty on imported wool yarn of the kind described in subheading 
9902.51.13 of the HTS, and the duty on wool fiber and wool top of the 
kind described in subheading 9902.51.14 of the HTS were suspended in 
their entirety in section 503 of the Trade and Development Act of 2000. 
The total duty suspension for both subheadings has been extended three 
times since then, most recently through December 31, 2014. Section 
12315(e) of the Farm Bill requires the Secretary to make payments to 
processors of wool yarn, fiber, and top of the kind described in 
subheadings 9902.51.13 and 9902.51.14 of the HTS, respectively, in 
amounts that the processors would have saved if the duty suspension had 
been in effect.
    To be eligible for a payment, during the calendar year immediately 
preceding the payment a person must have imported into the U.S., 
directly or indirectly, wool yarn, fiber or top of the kind described 
in subheadings 9902.51.13 and 9902.51.14, and manufactured such wool 
yarn, fiber, or top in the U.S.
    The duty rates in chapter 99 of the HTS for subheadings 9902.51.13 
and 9902.51.14 are listed in three categories: (1) The general duty 
rate applicable to wool yarn covered by the subheading, unless one of 
the other two categories applies; (2) the duty rate is 0 because 
imports from certain listed countries are duty free; and (3) duty rates 
applicable to imports from specific countries (e.g., 2.4% duty rate for 
imports of wool yarn from Oman in calendar year 2014). Because the HTS 
is statutory, one of the three categories must be applied when 
calculating a monetary payment equivalent to the savings that a person 
would have realized if the suspension of the duty rate had been in 
effect. Thus, the country of origin of the wool yarn, wool fiber, or 
wool top, may significantly affect the duty rate used to calculate a 
person's payment. The general duty rate applicable to subheading 
9902.51.13 in 2000 was 6% of the import price of the imported wool yarn 
at the time the duties were suspended. The general duty rate reverted 
to 6% of the import price of the imported wool yarn in 2015.
    However, subheading 9902.51.14, which expired at the end of 2014, 
applied to wool fiber and top now described in eight subheadings of 
chapter 51 of the HTS, and the duty applicable to each subheading in 
chapter 51 varies. Thus, a determination of the applicable duty is 
subject to the determination of the Secretary in accordance with duty 
rates applicable to the specific sub-subheading of wool fiber or top 
imported.
    The difference between the 0% duty in effect during the duty 
suspension and the duty applicable in the calendar year immediately 
preceding the payment for the two HTS subheadings of wool yarn, fiber, 
and top (which is 100% of the duty) will be used to calculate duty 
compensation payments. Section 12315(e) of the Farm Bill anticipates a 
time when the total duty suspension is no longer in effect, 
acknowledges that duty rates will have increased upon expiration of the 
total duty suspension, and focuses on the savings that an importer 
(direct or indirect) of wool yarn, fiber, or top would have realized 
had the 0% duty rate remained in effect. Section 12315(e) of the Farm 
Bill states that the annual payment is ``. . . an amount . . . equal to 
the amount the manufacturer or successor-in-interest would have saved 
during the calendar year . . . if the suspension . . . of duty on wool 
fabrics were in effect.'' The focus of the savings is on the difference 
between the duty paid for the wool yarn, fiber or top of the kind 
described in subheadings 9902.51.13 and 9902.51.14 in the calendar year 
immediately preceding the payment, and the 0% duty that would have been 
paid for such wool imported into the U.S., directly or indirectly, if 
the total duty suspension were still in effect. This allows the payment 
to address the ``savings'' contemplated in 12315(e) of the Farm Bill as 
close to the real time experience of the person as is administratively 
possible. For example, a person's import of wool yarn, fiber or top in 
calendar year 2016 will be the basis for calculating the person's 
payment in 2017. This is consistent with the statute's focus on the 
savings that would have been realized if a duty suspension were still 
in effect, and is also consistent with CBP's treatment of wool yarn, 
fiber or top in its Wool Duty Refund Program, in which it based the 
Duty Refund payment on the prior year. The payment will be made to 
eligible persons by April 15 of the calendar year subsequent to the 
year of the person's reported imports. This allows the Secretary to 
base the payment on the person's total actual imports of wool yarn, 
fiber or top during the calendar year immediately preceding the 
payment.
    The savings involves three factors spread over two time periods: 
(1) The higher duty rate applicable to the wool yarn, fiber or top 
described in the applicable 2014 HTS subheadings in the calendar year 
immediately preceding the payment; (2) the further processing of the 
imported wool yarn, fiber or top in the calendar year immediately 
preceding the payment; and (3) the total duty suspension applicable to 
that HTS subheading of wool yarn, fiber or top in 2014, the last year 
the duty suspension was effective. The higher duty rate paid by the 
eligible person in the calendar year immediately preceding the payment 
is used to calculate the 2016-2019 payments. However, for the 2015 
payment, the higher duty rate in the 2015 HTS will be used instead of 
the total duty suspension effective through the 2014 calendar year. The 
reason for this exception for the 2015 payment is that 2014 is both the 
last year in which the total duty suspension was still in effect and 
the calendar year immediately preceding the payment (in 2015). As a 
result, for the 2015 payment, a proxy is necessary for the higher duty 
rate. It is necessary to create this proxy for the 2015 payment because 
Congress

[[Page 12326]]

requires that this payment be made when the duty suspension is no 
longer in effect. The first year the duty suspension is not in effect 
is calendar year 2015. Finally, for a 2015 payment, the calendar year 
immediately preceding the payment will still be used to establish the 
dollar value of the imported wool yarn, fiber, or top by the eligible 
person.
    The dollar value of the wool yarn, fiber or top imported into the 
U.S. is also a factor in determining the savings that would have been 
realized because of the TRQ. Dollar value data effectively captures the 
price of such fabric and the dollar amount paid by the person. CBP has 
not been collecting this data in the context of its Wool Duty Refund 
Program. But in light of the statutory requirement to capture the 
savings that would have been realized for wool yarn, fiber or top 
imported into the U.S. had the duty suspension been in effect, the 
Secretary will collect the person's reported dollar value and quantity 
of imports of wool yarn, fiber or top imported into the U.S. during the 
entire calendar year immediately preceding the payment.
    The Secretary has determined that the intent of the savings 
language in section 12315 of the Farm Bill can be best realized by 
looking at what the person would have saved during the calendar year 
immediately preceding the payment. For example, the dollar value of the 
person's imports wool yarn, fiber, or top in calendar year 2014 will be 
the basis for calculating the payment in 2015 (in contrast to the proxy 
duty used for the 2015 payment). This allows the payment to address the 
``savings'' in section 12315(e) of the Farm Bill as close to the real 
time experience of the person as is administratively possible yet still 
cover the full prior year's imports.
    Other than with respect to the 2015 payment calculated using a 
proxy duty rate as described above, the duty compensation payment under 
this section will be equal to 100% of the duty paid for wool yarn, 
fiber, or top of the kind described in subheadings 9902.51.13 and 
9902.51.14 imported in the calendar year immediately preceding the 
payment.
    The two HTS subheadings of imported wool yarn, fiber, or top 
covered by this payment are either imported directly by persons, in 
which case the person also directly paid the duty, or imported 
indirectly through a third party broker that directly paid the duty. 
The payment applies to persons that either directly or indirectly 
imported wool yarn, fiber, and top. If the import was through a third 
party broker, the person must so state in the affidavit prior to the 
payment, and provide any other information required by FAS. For persons 
that are indirect importers of wool yarn, fiber, or top, the dollar 
value of the imports reported in their affidavit will be subject to a 
10% reduction by the Secretary. The reason for this reduction is that 
the broker that directly imported the wool yarn, fiber, or top is 
assumed to sell it to the person who submits the affidavit for an 
amount higher than the price merely increased by the applied duty. The 
10% reduction is intended to compensate for that higher price, and make 
the reported price paid by indirect importers more equivalent to the 
price paid by direct importers. CBP also administers this 10% reduction 
in the reported price paid by indirect importers as part of its 
administration of the Wool Duty Refund Program (which includes 
subheadings 9902.51.13 and 9902.51.14).
    Persons that imported wool yarn, fiber or top directly are also 
required to submit to FAS as part of the affidavit package scanned 
copies of the CBP Form 7501 ``Entry Summary'' for the relevant 
calculations made in the affidavit. Persons that imported wool yarn, 
fiber or top indirectly are required to submit to FAS as part of the 
affidavit package invoices from third party brokers for the relevant 
calculations made in the affidavit.
    Persons applying for a payment must provide information required by 
the Secretary through annual affidavits.
(4) Refund of Duties Paid on Imports of Certain Wool Products
    CBP is administering this payment to U.S. manufacturers and 
processors of wool for duties paid on the imported wool in 2000, 2001, 
and 2002 through calendar year 2015. FAS will continue this payment for 
calendar years 2016-2019, and will publish regulations later next year. 
The regulations for this payment will be published at 7 CFR 1471.12.

Effective Date and Notice and Comment

    We are issuing this final rule without prior notice and opportunity 
for comment. The Administrative Procedure Act exempts rules ``relating 
to agency management or personnel or to public property, loans, grants, 
benefits, or contracts'' from the statutory requirement for prior 
notice and opportunity for comment 5 U.S.C. 553(a)(2). Accordingly, 
this rule may be made effective less than 30 days after publication in 
the Federal Register. However, we invite you to participate in this 
rulemaking by submitting written comments, data, or views. We will 
consider the comments we receive and may conduct additional rulemaking 
based on the comments. This rule allows FAS to provide adequate notice 
to eligible manufacturers about the new Pima Agriculture Cotton and 
Wool Apparel Manufacturers Trusts regulation so that they will be ready 
to begin filing for payments by March 15 in the case of Agriculture 
Pima Trust payment, and by March 1 in the case of the several 
Agriculture Wool Trust payments.

Executive Order 12630

    This Executive Order requires careful evaluation of governmental 
actions that interfere with constitutionally protected property rights. 
This rule does not interfere with any property rights and, therefore, 
does not need to be evaluated on the basis of the criteria outlined in 
Executive Order 12630.

Executive Order 12866

    This final rule is issued in conformance with Executive Order 12866 
and Administrative Procedure Act (5 U.S.C. 553). It has been determined 
to be not significant for the purposes of Executive Order 12866 and was 
not reviewed by OMB for this purpose. A cost-benefit assessment of this 
rule was not completed.

Executive Order 12372

    This final rule is not subject to Executive Order 12372, which 
requires intergovernmental consultation with State and local officials. 
See the notice related to 7 CFR part 3015, subpart V, published at 48 
FR 29115 (June 24, 1983).

Executive Order 12988

    This final rule has been reviewed in accordance with Executive 
Order 12988. This rule would not preempt State or local laws, 
regulations, or policies unless they present an irreconcilable conflict 
with this rule. This rule would not be retroactive.

Executive Order 13132

    This final rule has been reviewed under Executive Order 13132, 
``Federalism.'' The policies contained in this final rule do not have 
any substantial direct effect on States, on the relationship between 
the Federal government and the States, or on the distribution of power 
and responsibilities among the various levels of government, nor does 
this final rule impose substantial direct compliance costs on State and 
local governments. Therefore, consultation with the States is not 
required.

[[Page 12327]]

Executive Order 13175

    This final rule has been reviewed for compliance with E.O. 13175. 
The policies contained in this final rule do not have tribal 
implications that preempt tribal law.

Regulatory Flexibility Act

    The Regulatory Flexibility Act does not apply to this rule because 
FAS is not required by 5 U.S.C. 553 or any other law to publish a 
notice of proposed rulemaking with respect to the subject matter of 
this rule.

Civil Rights Impact Statement

    No major civil rights impact is likely to result from the 
announcement of this notice. It will not have a negative civil rights 
impact on very-low income, low income, and moderate income and minority 
populations.

Environmental Assessment

    The environmental impacts of this rule have been considered in a 
manner consistent with the provisions of the National Environmental 
Policy Act (NEPA, 42 U.S.C. 4321-4347), the regulations of the Council 
on Environmental Quality (40 CFR parts 1500-1508), and FAS regulations 
for compliance with NEPA (7 CFR part 799). FAS has determined that NEPA 
does not apply to this rule and that no environmental assessment or 
environmental impact statement will be prepared.

Unfunded Mandates Reform Act

    This final rule does not impose any enforceable duty or contain any 
unfunded mandate as described under Title II of the Unfunded Mandates 
Reform Act of 1995 (UMRA). Therefore, this rule is not subject to the 
requirements of sections 202 and 205 of UMRA.

E-Government Act Compliance

    FAS is committed to complying with the E-Government Act to promote 
the use of the internet and other information technologies to provide 
increased opportunities for citizen access to Government information, 
services and for other purposes. The forms, regulations, and other 
information collection activities required to be utilized by a person 
subject to this rule are available at: http://www.fas.usda.gov.

List of Subjects in 7 CFR Part 1471

    Agricultural commodities, Imports.

    For the reasons set forth in the preamble, 7 CFR part 1471 is added 
to read as follows:

PART 1471--PIMA AGRICULTURE COTTON TRUST FUND (AGRICULTURE PIMA 
TRUST) AND AGRICULTURE WOOL APPAREL MANUFACTURERS TRUST FUND 
(AGRICULTURE WOOL TRUST)

Subpart A--Agriculture Pima Trust
Sec.
1471.1 Provisions common to this subpart.
1471.2 Pima cotton payments.
1471.3 Affidavit of producers of ring spun pima cotton yarn.
1471.4 Affidavit of manufacturers of pima cotton shirts.
1471.5 Affidavit of pima cotton trade association.
Subpart B--Agriculture Wool Trust
1471.10 Provisions common to this subpart.
1471.11 Payments to manufacturers of certain worsted wool fabrics.
1471.12 [Reserved]
1471.13 Monetization of the wool tariff rate quota.
1471.14 Wool yarn, wool fiber, and wool top duty compensation 
payment.

    Authority: Sections 501-506, Pub. L. 106-200, (114 Stat. 299-
304); Section 4002, Pub. L. 108-429 (7 U.S.C. 7101 note); Section 
1633, Pub. L. 109-280 (120 Stat. 1166); Section 325, Pub. L. 110-343 
(122 Stat. 3875); Sections 12314 and 12315, Pub. L. 113-79 (7 U.S.C. 
2101 note and 7101 note).

Subpart A--Agriculture Pima Trust


Sec.  1471.1  Provisions common to this subpart.

    (a) Agriculture Pima Trust--(1) Establishment. The Agriculture Pima 
Trust has been established to provide funding for payments under this 
part.
    (2) Purpose. The purpose of the Agriculture Pima Trust is to reduce 
the injury to domestic manufacturers resulting from tariffs on cotton 
fabric that are higher than tariffs on certain apparel articles made of 
cotton fabric.
    (3) Funding availability. $16,000,000 will be available annually 
for eligible payments authorized under subpart A of this part.
    (4) Definitions. As used in this subpart:
    Agriculture Pima Trust means the Pima Agriculture Cotton Trust 
Fund.
    CCC means the Commodity Credit Corporation.
    FAS means the Foreign Agricultural Service.
    Secretary means the Secretary of Agriculture.
    Agriculture Pima Trust means the Pima Agriculture Cotton Trust 
Fund.
    U.S. means the United States of America.
    (b) Other provisions common to subpart A of this part--(1) 
Affidavits. FAS shall annually, not later than February 15 of the year 
of the applicable payment, make affidavits available on the FAS Web 
site, which can be found at http://www.fas.usda.gov/. Affidavits must 
be submitted electronically to [email protected].
    (2) Filing deadline. Any person filing an affidavit under this part 
for a particular year must file the affidavit for such calendar year, 
during calendar years 2015 through 2018, not later than March 15 of the 
applicable calendar year.
    (3) Basic information. In addition to information required in 
Sec. Sec.  1471.3, 1471.4, and 1471.5, as applicable, every person 
applying for a payment must provide the following information, 
applicable to the year for which a payment is sought:
    (i) The current company name, address, contact, phone number of the 
person;
    (ii) The name and address of each plant or location of the person 
during the calendar year immediately preceding the payment; and
    (iii) A W-9 providing the Federal tax identification number of the 
person;
    (4) Standard Form 1199A. Every person claiming a payment must 
provide Standard Form 1199A, a direct deposit sign-up form, to 
facilitate any transfer of funds.
    (5) Affirmation. Every person applying for a payment must affirm in 
its affidavit that ``all information contained in the application is 
complete and correct and that the information does not contain a false 
claim, statement, or representation.''
    (6) Document retention. All persons receiving a payment under this 
part must maintain all pertinent documentation for 3 years after the 
year of receipt of the payment.
    (7) False statements. Persons providing false or fraudulent claims, 
or persons making materially false statements or representations in 
their affidavit, are subject to civil or criminal penalties pursuant to 
18 U.S.C. 1001.
    (8) Confidentiality. Specific business information that is marked 
``business confidential'' will be protected from disclosure to the full 
extent permitted by law.
    (9) Review of affidavits. Affidavits will be reviewed to determine 
whether they are complete and responsive to the content and form of 
affidavit requirements under this part.
    (10) Finality of determinations by Secretary. A determination by 
the Secretary about a payment under this part shall be final and is not 
subject to appeal or protest.
    (11) Timing of payments. A payment for which a person is eligible 
under this part will be disbursed in each of

[[Page 12328]]

calendar years 2015 through 2018, not later than April 15 of the 
applicable year.
    (12) Sequester. Payments covered by this part shall be subject to 
sequester of payments, if required by law.


Sec.  1471.2  Pima cotton payments.

    From available funds in the Agriculture Pima Trust, CCC will 
annually make payments for each of calendar years 2015 through 2018 as 
follows:
    (a) Twenty-five percent of the amounts in the Agriculture Pima 
Trust shall be paid to one or more nationally recognized associations 
established for the promotion of pima cotton for use in textile and 
apparel goods, as determined by the Secretary, during the calendar year 
immediately preceding the payment.
    (b) Twenty-five percent of the amounts in the Agriculture Pima 
Trust shall be paid to yarn spinners of pima cotton that produce ring 
spun cotton yarns in the U.S. during 2013 and the calendar year 
immediately preceding the payment, to be allocated to each yarn spinner 
in an amount that bears the same ratio as
    (1) The yarn spinner's production of ring spun cotton yarns in 
2013, measuring less than 83.33 decitex (exceeding 120 metric number) 
from pima cotton in single and plied form during calendar year 2013, 
bears to
    (2) The production of the yarns described in paragraph (b)(1) of 
this section during calendar year 2013 by all yarn spinners that 
qualify under this paragraph (b).
    (c) Fifty percent of the amounts in the Agriculture Pima Trust 
shall be paid to manufacturers that, during the calendar year 
immediately preceding the payment, certify, pursuant to the affidavit 
under Sec.  1471.4, they used imported pima cotton fabric during 
calendar year 2013 to produce such shirts, to be allocated to each 
manufacturer in an amount that bears the same ratio as
    (1) The dollar value (excluding duty, shipping, and insurance of 
imported woven pima cotton shirting fabric of 80s or higher count and 
2-ply in warp used by the manufacturer during calendar year 2013 to 
produce men's and boys' pima cotton shirts, bears to
    (2) The dollar value (excluding duty, shipping, and insurance of 
the fabric described in paragraph (c)(1) of this section used to 
manufacture men's and boy's pima cotton shirts in 2013 by all 
manufacturers that qualify under this paragraph (c).


Sec.  1471.3  Affidavit of producers of ring spun pima cotton yarn.

    In addition to reporting and information requirements in Sec.  
1471.1, the affidavit of a yarn spinner that is a producer of ring spun 
cotton yarn must be an affidavit provided annually by an officer of the 
yarn spinner that produces ring spun yarns affirming that:
    (a) During the calendar year immediately preceding the payment and 
during calendar year 2013, the yarn spinner used pima cotton to produce 
ring spun cotton yarns in the U.S. measuring less than 83.33 decitex 
(exceeding 120 metric number), in single and plied form;
    (b) During 2013, the yarn spinner actually produced the quantity, 
measured in pounds, of ring spun cotton yarns measuring less than 83.33 
decitex (exceeding 120 metric number), in single and plied form; and
    (c) The yarn spinner continues to maintain supporting documentation 
about such production during calendar year 2013 which shows the actual 
quantity of such yarns produced, and evidencing the yarns as ring spun 
pima cotton yarns, measuring less than 83.33 decitex (exceeding 120 
metric number), in single and plied form.


Sec.  1471.4  Affidavit of manufacturers of pima cotton shirts.

    (a) In general. In addition to applicable information requirements 
in Sec.  1471.1, an affidavit of a manufacturer that is a producer of 
men's and boys' pima cotton shirts must be an affidavit provided 
annually by an officer of the manufacturer which affirms the following 
information
    (1) During the calendar year immediately preceding the payment and 
during calendar year 2013, the manufacturer used imported pima cotton 
fabric to cut and sew men's and boys' pima cotton shirts in the U.S.;
    (2) During calendar year 2013, the dollar value of imported woven 
pima cotton shirting fabric of 80s or higher count and 2-ply in warp 
purchased and used by the manufacturer to cut and sew men's and boys' 
woven pima cotton shirts in the U.S.;
    (3) The manufacturer continues to maintain invoices and other 
supporting documentation (such as price lists and other technical 
descriptions of the fabric qualities) showing the dollar value of such 
fabric purchased, the date of purchase, and evidencing the fabric as 
woven pima cotton fabric of 80s or higher count and 2-ply in warp; and
    (4) The imported pima cotton fabric purchased in 2013 and in the 
calendar year immediately preceding the payment was suitable for use in 
the manufacturing of men's and boys' cotton shirts.
    (b) Date of purchase. For purposes of the affidavit under paragraph 
(a) of this section, the date of purchase shall be the invoice date, 
and the dollar value shall be determined excluding duty, shipping, and 
insurance.


Sec.  1471.5  Affidavit of pima cotton trade associations.

    In addition to applicable information requirements in Sec.  1471.1, 
trade associations filing a claim for a payment must electronically 
provide a statement which states whether, during the calendar year 
immediately preceding the payment and in calendar year 2014, they were, 
as determined by the Secretary, a domestic nationally recognized 
association established and operating for the promotion of pima cotton 
for domestic use in textile and apparel goods.

Subpart B--Agriculture Wool Trust


Sec.  1471.10  Provisions common to this subpart.

    (a) Agriculture wool trust--(1) Establishment. The Agriculture Wool 
Trust has been established to provide funding for payments under this 
part.
    (2) Purpose. The purpose of the Agriculture Wool Trust is to reduce 
the injury to domestic manufacturers resulting from tariffs on wool 
fabric that are higher than tariffs on certain apparel articles made of 
wool fabric.
    (3) Funding availability. Not more than $30,000,000 will be 
available annually for payments authorized under this part.
    (4) Definitions. As used in this subpart:
    Agriculture Wool Trust means the Agriculture Wool Apparel 
Manufacturers Trust Fund.
    U.S. means the United States of America.
    CCC means the Commodity Credit Corporation.
    FAS means the Foreign Agricultural Service.
    HTS means the Harmonized Tariff Schedule of the United States.
    Secretary means the Secretary of Agriculture.
    TRQ means Tariff Rate Quota.
    (b) Provisions common to this part--(1) Affidavits. FAS shall 
annually, not later than February 15 of the year of the applicable 
payment, make affidavits available on the FAS Web site, which can be 
found at http://www.fas.usda.gov/. Affidavits must be submitted 
electronically to: [email protected].
    (2) Filing deadline. Any person filing an affidavit under this part 
for a

[[Page 12329]]

particular year must file the affidavit for such calendar year, during 
calendar years 2015 through 2019, not later than March 1 of such year.
    (3) Required information. In addition to information required in 
Sec. Sec.  1471.11, 1471.13, and 1471.14, as applicable, every person 
applying for a payment under this part must provide the following 
information applicable to the year for which a payment is sought:
    (i) The current company name, address, contact, phone number of the 
person;
    (ii) The name and address of each plant or location of the person 
in the year immediately preceding the payment; and
    (iii) A W-9 providing the Federal tax identification number of the 
person.
    (4) Standard Form 1199A. Every person seeking a payment must also 
provide Standard Form 1199A, a direct deposit sign-up form, to 
facilitate any transfer of funds.
    (5) Affirmation. A person filing an affidavit under this part must 
affirm that ``all information contained in the application is complete 
and correct and that the information does not contain a false claim, 
statement, or representation.''
    (6) Document retention. All persons receiving a payment under this 
part must maintain all pertinent documentation for three years after 
the year of receipt of the payment.
    (7) False statements. Persons providing false or fraudulent claims 
or making materially false statements or representations are subject to 
civil or criminal penalties pursuant to 18 U.S.C. 1001.
    (8) Confidential information. Specific business information 
provided in affidavits that is marked ``business confidential'' will be 
protected from disclosure to the full extent permitted by law.
    (9) Review of affidavits. Affidavits will be reviewed to determine 
whether they are complete and responsive to the content and form of 
affidavit requirements in this part.
    (10) Finality of determination by the Secretary. A determination by 
the Secretary about a payment under this part shall be final and is not 
subject to appeal or protest.
    (11) Timing of payments. A payment for which a person eligible 
under this part will be disbursed in each of calendar years 2015 
through 2019 not later than April 15 of the applicable year.
    (12) Proration and sequester. Payments covered by this part will be 
subject to proration in the event that insufficient funds exist in the 
Agriculture Wool Trust during the year of the payment, and will be 
subject to sequester, if required by law.
    (13) HTS subheadings. All references to subheadings of the HTS in 
this part are to the subheadings as described in the HTS in 2014.


Sec.  1471.11  Payments to manufacturers of certain worsted wool 
fabrics.

    (a) Definitions. In this section the following definitions apply:
    Eligible person. The term ``eligible person'' means a manufacturer 
in the U.S. of qualifying worsted wool fabric during the calendar year 
immediately preceding the payment and during each of calendar years 
1999, 2000, and 2001.
    Qualifying worsted wool fabric. The term ``qualifying worsted wool 
fabric'' means a worsted wool fabric containing at least 85% by weight 
worsted wool of the kind described in subheading 9902.51.11 or 
9902.51.15 of the 2014 HTS that, during the calendar year immediately 
preceding the payment and during each of calendar years 1999, 2000, and 
2001, was manufactured by an eligible person in the United States.
    (b) Distribution of funds. From amounts in the Agriculture Wool 
Trust, CCC will annually make payments for each of calendar years 2015 
through 2019 to eligible persons that manufactured qualifying worsted 
wool fabric as provided in paragraphs (b)(1) or (2) of this section.
    (1) Payments for production under subheading 9902.51.11 of the 
HTS--(i) In general. Eligible persons that manufactured qualifying 
worsted wool fabric during calendar years 1999, 2000, and 2001 that is 
of the kind described in subheading 9902.51.11 of the HTS are eligible 
for a payment as provided in paragraph (b)(1)(ii) of this section.
    (ii) Payment amounts. A total of $2,666,000 will be allocated 
annually among eligible persons covered by this paragraph on the basis 
of the percentage of each eligible person's total production (actual 
production, not estimates) for the calendar year immediately preceding 
the payment of qualifying worsted wool fabric described in paragraph 
(b)(1)(i) of this section in relation to the total production for the 
calendar year immediately preceding the payment of such fabric by all 
eligible persons who qualify for payments under this paragraph.
    (2) Payments for production under subheading 9902.51.15--(i) In 
general. Eligible persons that manufactured qualifying worsted wool 
fabric during calendar years 1999, 2000, and 2001 that conforms in 
composition to subheading 9902.51.15 of the HTS are eligible for a 
payment as provided in paragraph (b)(2)(ii) of this section.
    (ii) Payment amounts. A total of $2,666,000 will be allocated 
annually among eligible persons covered by this paragraph on the basis 
of the percentage of each eligible person's total production (actual 
production, not estimates) for the calendar year immediately preceding 
the payment of qualifying worsted wool fabric described in paragraph 
(b)(2)(i) of this section in relation to the total production for the 
calendar year immediately preceding the payment of such fabric by all 
eligible persons who qualify for payments under this paragraph.
    (c) Annual affidavit--(1) In general. An eligible person applying 
for a payment under this section shall comply with all applicable 
reporting requirements of this section and of Sec.  1471.10.
    (2) Specific business information. An eligible person shall, for 
the calendar year immediately preceding the payment and for each of 
calendar years 1999, 2000, and 2001, annually report the actual dollar 
value and the actual quantity (linear yards) of qualifying worsted wool 
fabric that was manufactured.
    (3) Manufacturing of wool. When reporting the annual dollar value 
and quantity of imports of qualifying worsted wool fabric, and the 
annual dollar value and quantity of the qualifying wool fabric that was 
manufactured, an eligible person may either have manufactured the 
qualifying worsted wool on its own behalf or had another person 
manufacture the qualifying worsted wool fabric, provided the eligible 
person owned the qualifying worsted wool fabric at the time of 
manufacture.


Sec.  1471.12  [Reserved]


Sec.  1471.13  Monetization of the wool tariff rate quota.

    (a) Definitions. In this section the following definitions apply:
    (1) Lower duty rate. The term ``lower duty rate'' means the duty 
rate as codified in the 2014 HTS that would have been applicable to 
qualifying worsted wool fabric of the kind described in subheadings 
9902.51.11, 9902.51.15, and 9902.51.16 of the 2014 HTS prior to the 
expiration of the Wool TRQ on December 31, 2014.
    (2) Eligible person--(i) In general. The term ``eligible person'' 
means a manufacturer (or a successor-in-interest to the manufacturer) 
in the U.S. during the calendar year immediately preceding the payment 
that:

[[Page 12330]]

    (A) Imported qualifying worsted wool fabric; and
    (B) Used the imported qualifying worsted wool fabric
    (1) In the case of wool of the kind described in subheadings 
9902.51.11 or 9902.51.15 of the 2014 HTS, to produce worsted wool 
suits, suit-type jackets and trousers for men and boys; or
    (2) In the case of wool fabric of the kind described in subheading 
9902.51.16 of the 2014 HTS, used such wool fabric in manufacturing.
    (ii) Successor-in-interest. If a person satisfies the criteria for 
becoming a successor-in-interest to an eligible person under paragraph 
(a)(4) of this section, the person shall succeed to the status of the 
eligible person and become eligible for the payment.
    (3) Qualifying worsted wool fabric. The term ``qualifying worsted 
wool fabric'' means imported worsted wool fabric containing at least 
85% by weight worsted wool of the kind described in subheadings 
9902.51.11, 9902.51.15, or 9902.51.16 of the 2014 HTS that, during the 
calendar year immediately preceding the payment was:
    (i) Imported by an eligible person in the U.S.; and
    (ii) Used by the eligible person in the U.S.
    (A) In the case of wool fabric of the kind described in subheadings 
9902.51.11 or 9902.51.15 of the HTS, to produce worsted wool suits, 
suit-type jackets and trousers for men and boys; or
    (B) In the case of wool fabric of the kind described in subheading 
9902.51.16 of the HTS, was used in manufacturing.
    (4) Successor-in-interest. The term ``successor-in-interest'' means 
a person that is eligible to claim a payment under this section as if 
the person were the original eligible person, without regard to section 
3727, title 31, United States Code because of--
    (i) An assignment of the claim;
    (ii) An assignment of the original eligible person's right to 
manufacture under the same trade name; or
    (iii) A reorganization of the eligible person.
    (b) Purposes. The purposes of a TRQ monetization payment are to 
provide an eligible person--
    (1) Compensation for termination of the TRQ for qualifying worsted 
wool fabric; and
    (2) A payment that is equivalent to the amount the eligible person 
would have saved during the calendar year for imports of qualifying 
worsted wool fabric if the lower duty rate under the applicable 2014 
HTS subheading(s) of a qualifying worsted wool fabric were in effect.
    (c) Calculation of monetized TRQ payment. A payment will be 
established by calculating, as provided in paragraphs (c)(1) through 
(4) of this section, the savings that would have been realized by the 
eligible person for imports of qualifying worsted wool fabric of the 
kind described in one of the three subheadings 9902.51.11, 9902.51.15, 
or 9902.51.16 of the 2014 HTS (as applicable), had the lower duty rate 
been in effect.
    (1) Payment formula. Except as provided in paragraph (c)(2) of this 
section, a payment shall be calculated by
    (i) Establishing the reported dollar value of imported worsted wool 
fabric, for each of the 2014 HTS subheadings of worsted wool fabric, 
during the calendar year immediately preceding the payment;
    (ii) Subtracting the duty rate (converted to numeric value) for 
each applicable 2014 HTS subheading of worsted wool fabric that would 
have been paid in calendar year 2014 from the duty rate (converted to 
numeric value) that was actually paid in the calendar year immediately 
preceding the payment;
    (iii) For each applicable 2014 HTS subheading of worsted wool 
fabric, multiplying the numeric values described in paragraphs 
(c)(1)(i) and (ii) of this section; and
    (iv) Adding each product obtained in paragraph (c)(1)(iii) of this 
section.
    (2) Exception for 2015 payment. In the case of the payment to be 
made in 2015, for purposes of the calculation component described in 
paragraph (c)(1)(ii) of this section the duty rate applicable in 2015 
shall be deemed the duty rate actually paid in 2014. The reason for 
this exception for the 2015 payment is that 2014 is both the last year 
in which the lower duty rate was still in effect, and is also the 
calendar year immediately preceding the payment (the payment is in 
2015). As a result, for the 2015 payment, a proxy is necessary for the 
higher duty rate in the calendar year immediately preceding the 
payment.
    (3) 2015 payment. A payment in 2015 shall be calculated by
    (i) Establishing the reported dollar value of imported worsted wool 
fabric during the calendar year immediately preceding the payment under 
the 2014 HTS subheading of worsted wool fabric;
    (ii) Subtracting the lower duty rate (converted to numeric value) 
that would have been applicable to the 2014 HTS subheading of worsted 
wool fabric from the duty rate applicable to that HTS subheading in 
2015 (converted to numeric value);
    (iii) Multiplying the numeric values described in paragraphs 
(c)(3)(i) and (ii) of this section); and(iv) Adding the product 
obtained in paragraph (c)(3)(iii) of this section to the product 
obtained for every applicable subheading of worsted wool fabric.
    (4) 2016-2019 payments. A payment in each of years 2016-2019 shall 
be calculated by
    (i) Establishing the reported dollar value of imported worsted wool 
fabric during the calendar year immediately preceding the payment under 
the 2014 HTS subheading of worsted wool fabric;
    (ii) Subtracting the lower duty rate (converted to numeric value) 
that would have been applicable to the 2014 HTS subheading of worsted 
wool fabric from the duty rate applicable to the calendar year 
preceding the payment (converted to numeric value);
    (iii) Multiplying the numeric values described in paragraphs 
(c)(4)(i) and (ii) of this section; and
    (iv) Adding the product obtained in paragraph (c)(3)(iii) of this 
section to the product obtained for every applicable subheading of 
worsted wool fabric.
    (d) Annual affidavit--(1) In general. An eligible person applying 
for a payment under this section shall comply with all applicable 
reporting requirements of this section and of Sec.  1471.10.
    (2) Specific business information--(i) Imports and production.--An 
eligible person shall, for the entire calendar year immediately 
preceding the payment, report the actual dollar value and the actual 
quantity of
    (A) Imports into the U.S. of qualifying worsted wool fabric (square 
meters); and
    (B) The qualifying worsted wool fabric used by the eligible person 
in the U.S.
    (1) In the case of wool of the kind described in subheadings 
9902.51.11 or 9902.51.15 of the 2014 HTS, to produce worsted wool 
suits, suit-type jackets and trousers for men and boys (units); or
    (2) In the case of wool of the kind described in subheading 
9902.51.16 of the 2014 HTS, such wool that was manufactured (square 
meters).
    (ii) Direct and indirect importers--(A) In general. Eligible 
persons that import qualifying worsted wool fabric through a third 
party broker are considered to be indirect importers of the qualifying 
worsted wool fabric. Persons that directly import qualifying worsted 
wool fabric and pay the import duty for such wool are considered to be 
direct importers of the qualifying worsted wool fabric.
    (B) Reported dollar value. Eligible persons must state in their 
annual affidavit whether, in the calendar year

[[Page 12331]]

immediately preceding the payment, they were direct or indirect 
importers, and the dollar value of the imported qualifying worsted wool 
fabric. The reported dollar value of such imports by indirect importers 
will be subject to a 10% reduction.
    (C) Affirmation. An eligible person shall annually affirm in the 
affidavit that, in the calendar year immediately preceding the payment, 
in the U.S., the eligible person:
    (1) Directly or indirectly imported the qualifying worsted wool 
fabric into the U.S.;
    (2) Used that fabric to produce in the U.S. worsted wool suits, 
suit jackets, and trousers for men and boys (or, in the case of 
qualifying worsted wool fabric of the kind described in the 2014 HTS 
subheading 9902.51.16, for manufactured in the U.S.); and
    (3) Imported qualifying worsted wool fabric from the country of 
origin identified in the affidavit.
    (iii) Import documentation--(A) Direct imports. Applicable to the 
calendar year immediately preceding payment, an eligible person that 
directly imported qualifying worsted wool fabric is required to submit 
to FAS as part of the affidavit package scanned copies of CBP Form 7501 
``Entry Summary'' for the relevant calculations made in the affidavit.
    (B) Indirect imports. Applicable to the calendar year immediately 
preceding payment, an eligible person that indirectly imported 
qualifying worsted wool fabric is required to submit to FAS as part of 
the affidavit package invoices from third party brokers as required in 
the affidavit.
    (3) Production of garments or manufacturing of qualifying worsted 
wool fabric--(i) Production of garments--(A) In general. When reporting 
the annual dollar value and quantity of imported qualifying worsted 
wool fabric, and the annual dollar value and quantity of the qualifying 
worsted wool fabric that was cut and sewn, an eligible person may 
either have cut and sewn the wool on its own behalf or had another 
person cut and sew the wool on behalf of the eligible person, provided 
the eligible person owned the wool at the time it was cut and sewn.
    (B) Applicability. This paragraph applies to wool of the kind 
described in subheadings 9902.51.11 and 9902.51.15 of the 2014 HTS.
    (ii) Manufacturing of qualifying worsted wool fabric--(A) In 
general. When reporting the annual dollar value and quantity of 
imported qualifying worsted wool fabric, and the annual dollar value 
and quantity of the qualifying worsted wool fabric that was 
manufactured, an eligible person may either have manufactured the wool 
on its own behalf or had another person manufacture the wool, provided 
the eligible person owned the wool at the time of manufacture.
    (B) Applicability. This paragraph applies to wool of the kind 
described in subheading 9902.51.16 of the 2014 HTS.


Sec.  1471.14  Wool yarn, wool fiber, and wool top duty compensation 
payment.

    (a) Definitions. In this section the following definitions apply:
    (1) Duty. The term ``duty'' means the duty rate codified in the HTS 
for a year that is applicable to qualifying wool of the kind described 
in subheadings 9902.51.13 and 9902.51.14 of the 2014 HTS.
    (2) Eligible person--(i) In general. The term ``eligible person'' 
means a manufacturer (or a successor-in-interest to the manufacturer) 
in the U.S. during the calendar year immediately preceding the payment; 
that
    (A) Imported qualifying wool; and
    (B) Manufactured the qualifying wool.
    (ii) Successor-in-interest. If a person satisfies the criteria for 
becoming a successor-in-interest to an eligible person under paragraph 
(a)(4) of this section, the person shall succeed to the status of the 
eligible person and become eligible for the payment.
    (3) Qualifying wool. The term ``qualifying wool'' means imported 
wool yarn of the kind described in subheading 9902.51.13 of the 2014 
HTS, and imported wool fiber or wool top of the kind described in 
subheading 9902.51.14 of the 2014 HTS, that, during the calendar year 
immediately preceding the payment was
    (i) Imported, directly or indirectly, by an eligible person (or a 
successor-in-interest) into the U.S.; and
    (ii) Manufactured by the eligible person in the U.S.
    (4) Successor-in-interest. The term ``successor-in-interest'' means 
a person that is eligible to claim a payment under this section as if 
the person were the original eligible manufacturer, without regard to 
section 3727, title 31, U.S. Code because of
    (i) An assignment of the claim;
    (ii) An assignment of the eligible person's right to manufacture 
under the same trade name; or
    (iii) A reorganization of the eligible person.
    (b) Import duties. The duties on imports of qualifying wool were 
suspended in their entirety in section 503 of the Trade and Development 
Act of 2000. The suspension of the duties for both HTS subheadings of 
qualifying wool was extended through December 31, 2014. These duties 
were reinstated as of January 1, 2015.
    (c) Duty compensation payment--(1) Calculation of payment. For each 
of the 2015-2019 calendar years the duty compensation payment of an 
eligible person will be established by calculating, as provided in 
paragraphs (c)(2) through (5) of this section, the savings that would 
have been realized by the eligible person for imports of qualifying 
wool had the duty suspension been in effect.
    (2) Savings for each subheading. The savings realized by an 
eligible person for imports of qualifying wool under a HTS subheading 
covered by this section shall be obtained by multiplying
    (i) The reported dollar value of imports under a HTS subheading 
during the calendar year immediately preceding the payment; and
    (ii) Except as provided in paragraph (c)(5) of this section, the 
duty applicable to that HTS subheading in the calendar year preceding 
the payment, converted to numeric value.
    (3) Sum of subheading savings. The product obtained in paragraph 
(c)(2) of this section for imports of qualifying wool previously 
described under each HTS subheading shall be added to the savings 
obtained for imports under the other HTS subheading (as applicable).
    (4) Duty compensation payment amount. The sum obtained in paragraph 
(c)(3) of this section shall equal the annual duty compensation payment 
for the eligible person for the applicable calendar year.
    (5) Exception for 2015 payment. In the case of the 2015 payment, 
for purposes of the calculation component described in paragraph (c)(2) 
of this section the duty rate applicable in 2015 shall be deemed the 
duty rate actually paid in 2014. The reason for this exception for the 
2015 payment is that 2014 is both the last year in which the duty 
suspension was still in effect, and is also the calendar year 
immediately preceding the payment (the payment is in 2015). As a 
result, for the 2015 payment, a proxy is necessary for the higher duty 
rate in the calendar year immediately preceding the payment.
    (d) Annual affidavit required--(1) In general. An eligible person 
applying for a payment under this section shall comply with all 
applicable reporting requirements described in this section and Sec.  
1471.10.
    (2) Specific business information--(i) Imports and production. An 
eligible person shall, for the calendar year immediately preceding the 
payment, report the actual dollar value and the actual quantity of:

[[Page 12332]]

    (A) Imports into the U.S. of qualifying wool by the eligible 
person; and
    (B) Such qualifying wool that was manufactured in the U.S. by the 
eligible person.
    (ii) Direct and indirect importers--(A) In general. Eligible 
persons that import qualifying wool through a third party broker are 
considered to be indirect importers of the qualifying wool. Persons 
that directly import qualifying wool and pay the import duty for such 
wool are considered to be direct importers of the qualifying wool.
    (B) Reported dollar value. Eligible persons must state in their 
annual affidavit whether, in the calendar year immediately preceding 
the payment, they were direct or indirect importers, and the dollar 
value of the imported qualifying wool. The reported dollar value of 
imports by indirect importers will be subject to a 10% reduction.
    (C) Affirmation. An eligible person shall annually affirm in the 
affidavit that, in the calendar year immediately preceding the payment, 
the eligible person
    (1) Directly or indirectly imported the qualifying wool into the 
U.S.;
    (2) Manufactured the qualifying wool in the U.S.; and
    (3) Imported qualifying wool from the country of origin identified 
in the affidavit.
    (iii) Import documentation--(A) Direct imports. Applicable to the 
calendar year immediately preceding the payment, an eligible person 
that directly imported qualifying wool is required to submit to FAS as 
part of the affidavit package scanned copies of CBP Form 7501 ``Entry 
Summary'' for the relevant calculations made in the affidavit.
    (B) Indirect imports. Applicable to the calendar year immediately 
preceding the payment, an eligible person that indirectly imported 
qualifying wool is required to submit to FAS as part of the affidavit 
package invoices from third party brokers for the relevant calculations 
made in the affidavit.
    (3) Manufacture of qualifying wool. When reporting the annual 
dollar value and quantity of imported qualifying wool, and the annual 
dollar value and quantity of the qualifying wool that was manufactured, 
an eligible person may either have manufactured the qualifying wool on 
its own behalf or had another person manufacture the qualifying wool, 
provided the eligible person owned the qualifying wool at the time of 
manufacture.

    Dated: February 25, 2015.
Phil C. Karsting,
Administrator, Foreign Agricultural Service, and Vice President, 
Commodity Credit Corporation.
[FR Doc. 2015-04385 Filed 3-6-15; 8:45 am]
 BILLING CODE 3410-10-P