[Federal Register Volume 81, Number 115 (Wednesday, June 15, 2016)]
[Rules and Regulations]
[Pages 38893-38894]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-14174]
[[Page 38893]]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 1205
[Doc. No. AMS-CN-14-0037]
Cotton Board Rules and Regulations: Amending Importer Line-Item
De Minimis
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: The Agricultural Marketing Service (AMS) is amending the
Cotton Board Rules and Regulations to remove the cotton import de
minimis provision. The Cotton Research and Promotion (R&P) Program
assesses U.S. cotton producers and importers of cotton and cotton-
containing products. Importers are exempt from paying the cotton import
assessment (known commonly among importers as the ``cotton fee'') if a
line item on U.S. Customs and Border Protection (CBP) documentation is
$2.00 or less. The exemption was initially established to lessen the
administrative burden of collecting an import assessment, which was
originally estimated to be $2.00 per line item, in instances in which
the transactions costs of the collection would exceed the actual value
of the assessment; however, technological advances in the CBP
documentation process significantly reduced the transactions costs
associated with collecting import assessments, and CBP has since
stopped charging USDA for the processing and collecting of assessments.
Given that transactions costs no longer exceed assessment rates of
$2.00 or less, AMS is removing this de minimis provision from the
regulations. In addition, the definition of cotton with respect to
procedures for conducting the sign-up period is being modified.
DATES: Effective Date: July 15, 2016.
FOR FURTHER INFORMATION CONTACT: Shethir M. Riva, Chief, Research and
Promotion Staff, Cotton and Tobacco Program, AMS, USDA, 100 Riverside
Parkway, Suite 101, Fredericksburg, Virginia, 22406, telephone (540)
361-2726, facsimile (540) 361-1199, or email at
[email protected].
SUPPLEMENTARY INFORMATION:
Executive Orders 12866 and 13563
Executive Orders 12866 and 13563 direct agencies to access all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health, and safety effects, distributive impacts and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, reducing costs, harmonizing rules, and promoting flexibility.
This action has been designated as a ``non-significant regulatory
action'' under section 3(f) of Executive Order 12866 and therefore has
not been reviewed by the Office of Management and Budget.
Executive Order 13175
This action has been reviewed in accordance with the requirements
of Executive Order 13175, Consultation and Coordination with Indian
Tribal Governments. The review reveals that this regulation would not
have substantial and direct effects on Tribal governments and would not
have significant Tribal implications.
Executive Order 12988
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. It is not intended to have retroactive effect. The
Cotton Research and Promotion Act (7 U.S.C. 2101-2118) (Act) provides
that administrative proceedings must be exhausted before parties may
file suit in court. Under section 12 of the Act, any person subject to
an order may file with the Secretary of Agriculture (Secretary) a
petition stating that the order, any provision of the plan, or any
obligation imposed in connection with the order is not in accordance
with law and requesting a modification of the order or to be exempted
therefrom. Such person is afforded the opportunity for a hearing on the
petition. After the hearing, the Secretary would rule on the petition.
The Act provides that the District Court of the United States in any
district in which the person is an inhabitant, or has his principal
place of business, has jurisdiction to review the Secretary's ruling,
provided a complaint is filed within 20 days from the date of the entry
of ruling.
Regulatory Flexibility Act and Paperwork Reduction Act
In accordance with the Regulatory Flexibility Act (RFA) (5 U.S.C.
601-612), AMS has examined the economic impact of this rule on small
entities. The purpose of the RFA is to fit regulatory actions to the
scale of businesses subject to such action so that small businesses
will not be unduly or disproportionately burdened. The Small Business
Administration defines, in 13 CFR part 121, small agricultural
producers as those having annual receipts of no more than $750,000 and
small agricultural service firms (importers) as having receipts of no
more than $7,500,000. An estimated 17,000 importers are subject to the
rules and regulations issued pursuant to the Cotton Research and
Promotion Order. Most are considered small entities as defined by the
Small Business Administration.
This rule only affects importers of cotton and cotton-containing
products whose calculated assessment for any line item entry of cotton
appearing on a CBP entry document is two dollars ($2.00) or less. While
data allowing for estimates of the number of importers that will be
impacted does not exist, it is estimated that a very small portion of
the estimated 17,000 importers will be affected by eliminating the de
minimis exemption. The additional burden placed on those importers will
be limited to two dollars ($2.00) per line item entry that would
otherwise have qualified for the exemption. Importers were already
required to self-report on all line items being imported, therefore no
additional transactions costs or administrative burden will be borne by
these importers. Such importers may now be eligible to participate in a
sign-up period to determine whether they and eligible producers favor
the conduct of referendum on the continuance of the 1991 amendments to
the Order.
In compliance with Office of Management and Budget (OMB)
regulations (5 CFR part 1320) which implement the Paperwork Reduction
Act (PRA) (44 U.S.C. chapter 35) the information collection
requirements contained in the amended regulation have been previously
approved by OMB and were assigned control number 0581-0093, National
Research, Promotion, and Consumer Information Programs. This rule does
not result in a change to the information collection and recordkeeping
requirements previously approved.
Background
Amendments to the Cotton Research and Promotion Act (7 U.S.C. 2101-
2118) (Act) were enacted by Congress under Subtitle G of Title XIX of
the Food, Agriculture, Conservation, and Trade Act of 1990 (Pub. L.
101-624, 104 stat. 3909, November 28, 1990). These amendments contained
two provisions that authorize changes in the funding procedures for the
Cotton Research and Promotion Program. These provisions provide for:
(1) The assessment of imported cotton and cotton products; and (2)
termination of refunds to cotton producers. (Prior to the 1990
amendments to the Act, producers could request assessment refunds.)
[[Page 38894]]
As amended, the Cotton Research and Promotion Order (7 CFR part
1205) (Order) was approved by producers and importers voting in a
referendum held July 17-26, 1991, and the amended Order was published
in the Federal Register on December 10, 1991, (56 FR 64470). A proposed
rule implementing the amended Order was published in the Federal
Register on December 17, 1991, (56 FR 65450). Implementing rules were
published on July 1 and 2, 1992, (57 FR 29181 and 57 FR 29431,
respectively).
The total value of assessment levied on cotton imports is the sum
of two parts. The first part of the assessment is based on the weight
of cotton imported--levied at a rate of $1 per bale of cotton, which is
equivalent to 500 pounds, or $1 per 226.8 kilograms of cotton. The
second part of the import assessment (referred to as the supplemental
assessment) is based on the value of imported cotton lint or the cotton
contained in imported cotton products--levied at a rate of five-tenths
of one percent of the value of domestically produced cotton. The
current assessment on imported cotton is $0.012013 per kilogram of
imported cotton.
The Act provides that ``Any de minimis figure as established under
this paragraph shall be such as to minimize the burden in administering
the assessment provision but still provide for the maximum
participation of imports of cotton in the assessment provisions of this
chapter.'' 7 U.S.C. 2116(c)(2). The Import Assessment Table in
paragraph (b)(3) of Sec. 1205.510 of the Cotton Research and Promotion
Rules and Regulations indicates the total assessment rate ($ per
kilogram) due for each Harmonized Tariff Schedule (HTS) number that is
subject to assessment. Subparagraph (i) of this same paragraph provides
for an exemption from assessment for any line item entry of cotton
appearing on U.S. Customs and Border Protection (CBP) entry
documentation whose calculated assessment is two dollars ($2.00) or
less. This de minimis exemption was established to minimize the
administrative burden of collecting import assessments, which was
originally estimated to be $2.00 per line item, where administrative
costs would exceed the actual value of the assessment.
The de minimis figure is an estimate of administrative burden,
which is equivalent to the transactions costs of collecting the cotton
fee. The de minimis provision was necessary to avoid instances where
the transactions costs of collecting the cotton fee exceeded the cotton
fee being collected.
In January 2014, AMS became aware of CBP's automation processes in
connection with documenting and collecting assessments. CBP indicated
that the documentation and collection process is automated and costs
have been significantly decreased. Taking into account technological
advancements in the fee collection process, CBP no longer charges USDA
for the collection of assessments on agricultural commodities. This has
eliminated the administrative burden associated with the collection of
assessments.
AMS is striking subparagraph (i) under paragraph Sec.
1205.510(b)(3) of the Cotton Research and Promotion Rules and
Regulations and appending to the paragraph section the language
currently in subparagraph (ii). This action reflects the technological
efficiencies of the CBP import documentation process by eliminating the
de minimis provisions in the regulations, and, therefore, helps to
ensure that the assessments collected on imported cotton and the cotton
content of imported products will be the same as those paid on
domestically produced cotton. In addition, AMS is modifying the
definition of cotton in Sec. 1205.12 to include imported cotton that
previously was exempted due to the de minimis exemption. With this
action, importers who previously imported de minimis amounts of cotton
may now be eligible to participate in the sign-up period for a
continuance referendum that would determine whether a continuance
referendum is favored.
Summary of Comments
A proposed rule was published in the Federal Register on December
16, 2014, with a comment period of December 11, 2015, through January
11, 2016 (80 FR 76873). No comments were received by AMS. The proposed
rule may be viewed at www.regulations.gov.
List of Subjects in 7 CFR Part 1205
Advertising, Agricultural research, Cotton, Marketing agreements,
Reporting and Recordkeeping requirements.
For the reasons set forth in the preamble, 7 CFR part 1205 is
amended as follows:
PART 1205--COTTON RESEARCH AND PROMOTION
0
1. The authority citation for part 1205 continues to read as follows:
Authority: 7 U.S.C. 2101-2118.
0
2. Revise Sec. 1205.12 to read as follows:
Sec. 1205.12 Cotton.
The term cotton means all Upland cotton harvested in the United
States and all imports of Upland cotton, including the Upland cotton
content of products derived thereof.
0
3. In Sec. 1205.510, paragraph (b)(3) is revised to read as set forth
below (the Import Assessment Table remains unchanged):
Sec. 1205.510 Levy of assessments.
* * * * *
(b) * * *
(3) The following table contains Harmonized Tariff Schedule (HTS)
classification numbers and corresponding conversion factors and
assessments. The left column of the following table indicates the HTS
classifications of imported cotton and cotton-containing products
subject to assessment. The center column indicates the conversion
factor for determining the raw fiber content for each kilogram of the
HTS. HTS numbers for raw cotton have no conversion factor in the table.
The right column indicates the total assessment per kilogram of the
article assessed. In the event that any HTS number subject to
assessment is changed and such change is merely a replacement of a
previous number and has no impact on the physical properties,
description, or cotton content of the product involved, assessments
will continue to be collected based on the new number.
* * * * *
Dated: June 10, 2016.
Elanor Starmer,
Administrator.
[FR Doc. 2016-14174 Filed 6-14-16; 8:45 am]
BILLING CODE 3410-02-P