[Federal Register Volume 81, Number 223 (Friday, November 18, 2016)]
[Rules and Regulations]
[Pages 81657-81660]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-27661]


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DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1471

RIN 0551-AA90


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.

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SUMMARY: This final rule makes amendments to the final rule, with 
request for comments, published in the Federal Register on March 9, 
2015, that established regulations for the Pima Agriculture Cotton 
Trust Fund (Agriculture Pima Trust) and the Agriculture Wool Apparel 
Manufacturers Trust Fund (Agriculture Wool Trust) programs. This final 
rule is amended based on comments received and to add details for the 
Refund of Duties Paid on Imports of Certain Wool Products (Wool Duty 
Refund) payment. The administration of the Wool Duty Refund payment was 
transferred to the United States Department of Agriculture (USDA) 
beginning in calendar year (CY) 2016 and assigned to the Foreign 
Agricultural Service (FAS). It was previously administered by the 
Customs and Border Protection Agency of the Department of Homeland 
Security.

DATES: This final rule is effective November 18, 2016.

FOR FURTHER INFORMATION CONTACT: Peter W. Burr, Import Policies and 
Export Reporting Division, Office of Trade Programs, Foreign 
Agricultural Service, USDA; email: [email protected], 202-720-3274.

SUPPLEMENTARY INFORMATION:

Background

    On March 9, 2015, FAS published a final rule, with request for 
comments, in the Federal Register (80 FR 12321) for the Agriculture 
Pima Trust and the Agriculture Wool Trust programs. The final rule, 
with request for comments, was published under RIN 0551-AA86. The final 
rule, with request for comments, established regulations and sought 
comments for the Agriculture Pima Trust program and for three of the 
four payments under the Agriculture Wool Trust program. The Agriculture 
Pima Trust and Agriculture Wool Trust programs were established in the 
Agricultural Act of 2014 (Farm Bill). The Farm Bill transferred to USDA 
the responsibility for administering the Agriculture Pima Trust and 
three of the four payments under the Agriculture Wool Trust beginning 
in 2015, but transferred the fourth payment, the Wool Duty Refund, 
beginning in 2016.

Discussion of Comments

    The following is a summary and discussion of the comments received 
relative to the Agriculture Pima Trust and the Agriculture Wool Trust 
programs along with the reasoning for the revisions made.

General

    A commenter suggested that applicants not be required as noted in 
Sec.  1471.1(b)(3)(iii), Sec.  1471.1(b)(4), Sec.  1471.10(b)(3)(iii), 
and Sec.  1471.10(b)(4), to annually file IRS forms W-9 (U.S. person or 
resident alien) or the 1199A (direct deposit) with an application for 
either the Agriculture Pima Trust or Agriculture Wool Trust programs 
unless a change in the applicant's W-9 or 1199A information had 
occurred when compared to their previous year's application. This was 
deemed to be reasonable. Beginning in 2017, IRS forms W-9 and 1199A 
will only need to be filed if changes in the information have occurred.
    A commenter noted that a technical correction is necessary in 
paragraphs (1) and (2) of Sec.  1471.2(c) by closing the parentheticals 
after the word ``insurance.'' This correction will be made.

Payments to Manufacturers of Certain Worsted Wool Fabrics

    A commenter identified an error common to paragraphs (b)(1)(ii) and 
(b)(2)(ii) of Sec.  1471.11, Payments to manufacturers of certain 
worsted wool fabrics. The payment formula for payments to eligible 
persons is provided for under this section. The payment formula 
mistakenly states in paragraph (ii) that payments will be calculated 
based on the eligible person's production in the preceding year. 
However, the payments are actually based on the eligible person's 
production of qualifying worsted wool fabric during calendar years 
1999, 2000, and 2001. This correction will be made.

Free Trade Zones

    A commenter suggested that the scope of the monetization of the 
wool tariff rate quota payment as noted under Sec.  1471.13(a)(2)(i) be 
expanded to include eligible entities, that are manufacturers and would 
otherwise be eligible for monetization payments, that import qualifying 
worsted wool into a free trade zone (FTZ), cut the wool and use it to 
make worsted wool suits for men and boys within the FTZ.
    The monetization payment requires that the eligible entities 
receiving a monetization payment (1) import into the Customs territory 
of the United States the qualifying worsted wool directly or 
indirectly; (2) manufacture in the United States the qualifying worsted 
wool into worsted wool suits for men and boys; and (3) own the worsted 
wool at the time it's cut and manufactured.
    An entity that manufactures the suits in an FTZ and does not export 
from the FTZ into the Customs territory of the United States the 
qualifying worsted wool directly or indirectly, does not qualify for 
this benefit because by definition the entity avoided paying the import 
duty on the qualifying worsted wool. However, an eligible entity that 
manufacturers the suits in an FTZ and exports into the Customs 
territory of the United States the qualifying worsted wool directly or 
indirectly and thus pays the import duty on the qualifying worsted 
wool, does qualify for this benefit. For the purpose of the 
monetization payment, the worsted wool suits for men and boys are 
manufactured in the U.S. and all environmental, worker safety, and wage 
protection laws, etc., would apply to this manufacturer.
    USDA will also broaden the scope of eligible entities as it 
pertains to the wool yarn, wool fiber, and wool top compensation 
payment found at Sec.  1471.14(a)(2)(i) to include those operating 
within a FTZ.

Definition of Eligible Person

    A commenter suggested that the definition of an eligible person 
found at Sec.  1471.13(a)(2)(i) in the monetization of the wool tariff 
rate quota payment be modified to allow an eligible person to claim the 
annual dollar value and quantity of imported qualifying worsted wool 
fabric cut and sewn if the eligible person owned the wool at the time 
it was cut and sewn, whether the person actually cut and sewed the 
imported qualifying worsted wool or another person cut and sewed the 
wool on behalf of the eligible person. This was deemed reasonable and 
is already

[[Page 81658]]

allowed under Sec.  1471.13(d)(3)(i)(A) and (d)(3)(ii)(A).
    USDA will also make this change as it pertains to the wool yarn, 
wool fiber, and wool top duty compensation payment found at Sec.  
1471.14(a)(2)(i).

Reporting of Direct Imports

    A commenter suggested that applicants for the monetization of the 
wool tariff rate quota payment not be required to include direct 
imports on their annual application for this payment. The commenter's 
suggestion was based on their observance that countries of origin of 
imported qualifying worsted wool by direct importers is included on the 
Customs and Border Protection (CBP) form #7501, which is provided to 
the Secretary of Treasury every year, and thus it was redundant to also 
require this information to be included on the affirmation part of the 
annual application. Even though this information is provided to CBP 
each year, USDA will maintain the requirement as found at Sec.  
1471.13(d)(2)(iii)(A) and (B) that applicants for the monetization of 
the wool tariff rate quota payment include their direct and indirect 
imports on their annual application. Including direct and indirect 
imports on the application for this payment will make it easier for 
USDA to process the annual payments and to distribute them in a timely 
manner.

Importers Versus Manufacturers

    Regarding the monetization of the wool tariff rate quota payment, 
found at Sec.  1471.13(a)(2), a commenter suggested that the 
definitions of eligible person and qualifying worsted wool, a provision 
eliciting specific business information, and the scope of the 
affirmation, be expanded to include all importers of qualifying worsted 
wool suitable for worsted wool suits, as opposed to importers of 
qualifying worsted wool that actually used the wool to make suits for 
men or boys. To support the commenter's position, the commenter cited 
statutory references to types of worsted wool fabrics categorized under 
the harmonized tariff schedule (HTS). However the commenter conflates 
statutory provisions authorizing the tariffs for HTS categories of 
worsted wool suitable for wool suits with defining the universe of 
eligible manufacturers who import qualifying worsted wool and are 
eligible for payments under this program. The wool tariff rate quota 
administered by the Secretary of Commerce, until its statutory sunset 
in 2014, in fact required that to benefit from the tariff reduction, 
the worsted wool had to be actually used for worsted wool suits. This 
monetization program provides payments to manufacturers who formerly 
benefitted from the tariff reduction. The requirement in the 
monetization payment that the qualifying worsted wool must be used by 
the manufacturer receiving the payment to make suits for men and boys 
will remain unchanged.
    A commenter made a suggestion regarding the wool yarn, wool fiber, 
and wool top duty compensation payment found at Sec.  1471.14(a)(2) 
that is similar to the comment above. The commenter suggested that the 
definitions of eligible person and qualifying wool, a provision 
eliciting specific business information, and the scope of the 
affirmation, be expanded from manufacturers that directly or indirectly 
imported qualifying wool and manufactured the qualifying wool, to 
include all importers of qualifying wool (whether or not the importer 
was also the manufacturer of the wool). To support this position, the 
commenter referred to statutory authority that did not require 
importers of qualifying wool to also be manufacturers of the qualifying 
wool. The commenter further stated that the wool duty refund program, 
of which only manufacturers of qualifying wool have participated, did 
not impose the requirement that the entity actually manufacture the 
qualifying wool. However the commenter is incorrect about what the 
statutory authority actually provides, and conflates extension of the 
duty suspension (that was applicable to all importers, regardless of 
whether they also manufactured men's and boy's wool suits) in section 
5102 of the Trade Act of 2002, Public Law 107-210 and the wool duty 
refund payment program (that applied only to manufacturers of men's and 
boy's wool suits) in section 5101 of the Trade Act of 2002. The duty 
refund program administered by the U.S. Customs Service and by Customs 
and Border Protection in the Department of Homeland Security from 2002-
2014 required that the importer must also be the manufacturer of the 
qualifying wool. The requirements in the wool yarn, wool fiber, and 
wool top duty compensation payment that the qualifying wool must be 
imported and must also be used for further manufacturing by the 
importing manufacturer will remain unchanged.

Refund of Duties Paid on Imports of Certain Wool Products

    The Wool Duty Refund payment found at Sec.  1471.12 was 
administered by the Department of Homeland Security's Customs and 
Border Protection (CBP) through 2015. In the Farm Bill, the Wool Duty 
Refund payment was established for the year 2016 through 2019 and was 
transferred to USDA. The Wool Duty Refund payment is open to U.S. 
entities that manufactured certain wool articles made with certain 
imported wool products during calendar years 2000, 2001 and 2002; 
received a 2005 payment under section 505 of the Trade and Development 
Act of 2000; and as of January 1st of the payment year, continues to be 
a manufacturer in the U.S. as provided for in Section 505(a) of the 
Trade and Development Act of 2000. FAS will administer the Wool Duty 
Refund payment for 2016-2019 exactly the same as it was administered by 
CBP.

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

[[Page 81659]]

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.

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 final 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 final rule.

Civil Rights Impact Statement

    No major civil rights impact is likely to result from the 
announcement of this final rule. It will not have a negative civil 
rights impact on very-low income, low income, 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 final 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 final rule are available at: http://www.fas.usda.gov.

 List of Subjects in 7 CFR Part 1471

    Agricultural commodities, imports.

    Accordingly, 7 CFR part 1471 is amended as follows:

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

0
1. The authority citation for part 1471 continues to read as follows:

    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

0
2. Amend Sec.  1471.1 to revise paragraphs (b)(3)(iii) and (b)(4) to 
read as follows:


Sec.  1471.1  Provisions common to this subpart.

* * * * *
    (b) * * *
    (3) * * *
    (iii) A W-9 providing the Federal tax identification number of the 
person (if the information required by Form W-9 has changed since the 
previous application).
    (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 (if the information required by Form 
1199A has changed since the previous application).
* * * * *


Sec.  1471.2  [Amended]

0
3. Amend Sec.  1471.2(c)(1) and (2) by removing ``(excluding duty, 
shipping, and insurance'' and adding in its place ``(excluding duty, 
shipping, and insurance)''.
* * * * *

0
4. Revise Sec.  1471.5 to read as follows:


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 that during the calendar year 
immediately preceding the payment 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

0
5. Amend Sec.  1471.10 to revise paragraphs (b)(3)(iii) and (b)(4) to 
read as follows:


Sec.  1471.10  Provisions common to this subpart.

* * * * *
    (b) * * *
    (3) * * *
    (iii) A W-9 providing the Federal tax identification number of the 
person (if the information required by Form W-9 has changed since the 
previous application).
    (4) Every person claiming a payment must provide Standard Form 
1199A, a direct deposit sign-up form, to facilitate any transfer of 
funds (if the information required by Form 1199A has changed since the 
previous application).
* * * * *

0
6. Amend Sec.  1471.11 to revise paragraphs (b)(1)(ii) and (b)(2)(ii) 
to read as follows:


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

* * * * *
    (b) * * *
    (1) * * *
    (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) of qualifying worsted wool fabric described 
in paragraph (b)(1)(i) of this section for each of the calendar years 
1999, 2000, and 2001 in relation to the total production of such fabric 
by all eligible persons who qualify for payments under this paragraph 
for each of the calendar years 1999, 2000, and 2001.
* * * * *
    (2) * * *
    (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) of qualifying worsted wool fabric described 
in paragraph (b)(2)(i) of this section for each of the calendar years 
1999, 2000, and 2001 in relation to the total production of such fabric 
by all eligible persons who qualify for payments under this paragraph 
for each of the calendar years 1999, 2000, and 2001.
* * * * *

0
7. Add Sec.  1471.12 to read as follows:

[[Page 81660]]

Sec.  1471.12  Refund of duties paid on imports of certain wool 
products.

    (a) Eligible wool. Eligible wool under the Duty Refund program 
means imported wool yarn of the kind described in section 505 of the 
Trade and Development Act of 2000 Public Law 106-200 (May 18, 2000).
    (b) Payments--(1) Eligibility. Persons eligible for a Duty Refund 
payment are manufacturers who, in the year immediately preceding the 
payment, were actively engaged in manufacturing wool (as determined by 
FAS), and in calendar years 2000, 2001, and 2002--
    (i) Imported eligible wool directly or indirectly; and
    (ii) Used the imported wool to make men's or boy's suits; or
    (iii) Further manufactured the eligible imported wool.
    (2) Payment amount. Persons eligible for a Duty Refund payment 
shall be paid the same amounts that were made to the persons by CBP 
through FY 2015.

0
8. Amend Sec.  1471.13 to revise paragraphs (a)(2)(i), (d)(3)(i)(A), 
and (d)(3)(ii)(A) to read as follows:


Sec.  1471.13  Monetization of the wool tariff rate quota.

    (a) * * *
    (2) * * *
    (i) In general. The term ``eligible person'' means a manufacturer 
(or a successor-in-interest to the manufacturer) in the U.S. or in a 
Foreign-Trade Zone authorized under the Foreign-Trade Zones Act of 1934 
(19 U.S.C. 81a-81u) during the calendar year immediately preceding the 
payment that:
    (A) Imported qualifying worsted wool fabric; and
    (B) Used the imported qualifying worsted wool fabric directly or 
had another person use the qualifying worsted wool fabric providing the 
eligible person owned the qualifying worsted wool fabric at the time it 
was used:
    (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.
* * * * *
    (d) * * *
    (3) * * *
    (i) * * *
    (A) In general. When reporting the annual dollar value and quantity 
of imported qualifying worsted wool fabric, 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.
* * * * *
    (ii) * * *
    (A) In general. When reporting the annual dollar value and quantity 
of imported qualifying worsted wool fabric, an eligible person may 
either have manufactured the wool on its own behalf or had another 
person manufacture the wool on behalf of the eligible person, provided 
the eligible person owned the wool at the time of manufacture.
* * * * *

0
9. Amend Sec.  1471.14 to revise paragraph (a)(2)(i) to read as 
follows:


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

    (a) * * *
    (2) * * *
    (i) In general. The term ``eligible person'' means a manufacturer 
(or a successor-in-interest to the manufacturer) in the U.S. or in a 
Foreign-Trade Zone authorized under the Foreign-Trade Zones Act of 1934 
(19 U.S.C. 81a-81u) during the calendar year immediately preceding the 
payment that
    (A) Imported qualifying wool; and
    (B) Manufactured the qualifying wool directly or had another person 
manufacture the qualifying wool providing the eligible person owned the 
qualifying wool at the time it was manufactured.
* * * * *

    Dated: November 2, 2016.
Philip C. Karsting,
Administrator, Foreign Agricultural Service, and Vice President, 
Commodity Credit Corporation.
[FR Doc. 2016-27661 Filed 11-17-16; 8:45 am]
 BILLING CODE 3410-10-P