81 FR 38893 - Cotton Board Rules and Regulations: Amending Importer Line-Item De Minimis
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service Federal Register Volume 81, Issue 115 (June 15, 2016)
Agricultural Marketing Service
Federal Register Volume 81, Issue 115 (June 15, 2016)
| Page Range | 38893-38894 | |
| FR Document | 2016-14174 |
[Federal Register Volume 81, Number 115 (Wednesday, June 15, 2016)] [Rules and Regulations] [Pages 38893-38894] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-14174] [[Page 38893]] ----------------------------------------------------------------------- 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. ----------------------------------------------------------------------- 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
![Federal Register / Vol. 81, No. 115 / Wednesday, June 15, 2016 / Rules and Regulations 38893
DEPARTMENT OF AGRICULTURE (including potential economic, than $750,000 and small agricultural
environmental, public health, and safety service firms (importers) as having
Agricultural Marketing Service effects, distributive impacts and equity). receipts of no more than $7,500,000. An
Executive Order 13563 emphasizes the estimated 17,000 importers are subject
7 CFR Part 1205 importance of quantifying both costs to the rules and regulations issued
[Doc. No. AMS–CN–14–0037]
and benefits, reducing costs, pursuant to the Cotton Research and
harmonizing rules, and promoting Promotion Order. Most are considered
Cotton Board Rules and Regulations: flexibility. This action has been small entities as defined by the Small
Amending Importer Line-Item De designated as a ‘‘non-significant Business Administration.
Minimis regulatory action’’ under section 3(f) of This rule only affects importers of
Executive Order 12866 and therefore cotton and cotton-containing products
AGENCY: Agricultural Marketing Service, has not been reviewed by the Office of whose calculated assessment for any
USDA. Management and Budget. line item entry of cotton appearing on
ACTION: Final rule. a CBP entry document is two dollars
Executive Order 13175 ($2.00) or less. While data allowing for
SUMMARY: The Agricultural Marketing This action has been reviewed in estimates of the number of importers
Service (AMS) is amending the Cotton accordance with the requirements of that will be impacted does not exist, it
Board Rules and Regulations to remove Executive Order 13175, Consultation is estimated that a very small portion of
the cotton import de minimis provision. and Coordination with Indian Tribal the estimated 17,000 importers will be
The Cotton Research and Promotion Governments. The review reveals that affected by eliminating the de minimis
(R&P) Program assesses U.S. cotton this regulation would not have exemption. The additional burden
producers and importers of cotton and substantial and direct effects on Tribal placed on those importers will be
cotton-containing products. Importers governments and would not have limited to two dollars ($2.00) per line
are exempt from paying the cotton significant Tribal implications. item entry that would otherwise have
import assessment (known commonly Executive Order 12988 qualified for the exemption. Importers
among importers as the ‘‘cotton fee’’) if were already required to self-report on
a line item on U.S. Customs and Border This rule has been reviewed under all line items being imported, therefore
Protection (CBP) documentation is $2.00 Executive Order 12988, Civil Justice no additional transactions costs or
or less. The exemption was initially Reform. It is not intended to have administrative burden will be borne by
established to lessen the administrative retroactive effect. The Cotton Research these importers. Such importers may
burden of collecting an import and Promotion Act (7 U.S.C. 2101–2118) now be eligible to participate in a sign-
assessment, which was originally (Act) provides that administrative up period to determine whether they
estimated to be $2.00 per line item, in proceedings must be exhausted before and eligible producers favor the conduct
instances in which the transactions parties may file suit in court. Under of referendum on the continuance of the
costs of the collection would exceed the section 12 of the Act, any person subject 1991 amendments to the Order.
actual value of the assessment; however, to an order may file with the Secretary In compliance with Office of
technological advances in the CBP of Agriculture (Secretary) a petition Management and Budget (OMB)
documentation process significantly stating that the order, any provision of regulations (5 CFR part 1320) which
reduced the transactions costs the plan, or any obligation imposed in implement the Paperwork Reduction
associated with collecting import connection with the order is not in Act (PRA) (44 U.S.C. chapter 35) the
assessments, and CBP has since stopped accordance with law and requesting a information collection requirements
charging USDA for the processing and modification of the order or to be contained in the amended regulation
collecting of assessments. Given that exempted therefrom. Such person is have been previously approved by OMB
transactions costs no longer exceed afforded the opportunity for a hearing and were assigned control number
assessment rates of $2.00 or less, AMS on the petition. After the hearing, the 0581–0093, National Research,
is removing this de minimis provision Secretary would rule on the petition. Promotion, and Consumer Information
from the regulations. In addition, the The Act provides that the District Court Programs. This rule does not result in a
definition of cotton with respect to of the United States in any district in change to the information collection and
procedures for conducting the sign-up which the person is an inhabitant, or recordkeeping requirements previously
period is being modified. has his principal place of business, has approved.
jurisdiction to review the Secretary’s
DATES: Effective Date: July 15, 2016. Background
ruling, provided a complaint is filed
FOR FURTHER INFORMATION CONTACT: within 20 days from the date of the Amendments to the Cotton Research
Shethir M. Riva, Chief, Research and entry of ruling. and Promotion Act (7 U.S.C. 2101–2118)
Promotion Staff, Cotton and Tobacco (Act) were enacted by Congress under
Program, AMS, USDA, 100 Riverside Regulatory Flexibility Act and Subtitle G of Title XIX of the Food,
Parkway, Suite 101, Fredericksburg, Paperwork Reduction Act Agriculture, Conservation, and Trade
Virginia, 22406, telephone (540) 361– In accordance with the Regulatory Act of 1990 (Pub. L. 101–624, 104 stat.
2726, facsimile (540) 361–1199, or email Flexibility Act (RFA) (5 U.S.C. 601– 3909, November 28, 1990). These
at Shethir.Riva@ams.usda.gov. 612), AMS has examined the economic amendments contained two provisions
SUPPLEMENTARY INFORMATION: impact of this rule on small entities. The that authorize changes in the funding
purpose of the RFA is to fit regulatory procedures for the Cotton Research and
Executive Orders 12866 and 13563 actions to the scale of businesses subject Promotion Program. These provisions
ehiers on DSK5VPTVN1PROD with RULES
Executive Orders 12866 and 13563 to such action so that small businesses provide for: (1) The assessment of
direct agencies to access all costs and will not be unduly or disproportionately imported cotton and cotton products;
benefits of available regulatory burdened. The Small Business and (2) termination of refunds to cotton
alternatives and, if regulation is Administration defines, in 13 CFR part producers. (Prior to the 1990
necessary, to select regulatory 121, small agricultural producers as amendments to the Act, producers
approaches that maximize net benefits those having annual receipts of no more could request assessment refunds.)
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![38894 Federal Register / Vol. 81, No. 115 / Wednesday, June 15, 2016 / Rules and Regulations
As amended, the Cotton Research and costs of collecting the cotton fee ■ 2. Revise § 1205.12 to read as follows:
Promotion Order (7 CFR part 1205) exceeded the cotton fee being collected.
(Order) was approved by producers and § 1205.12 Cotton.
In January 2014, AMS became aware
importers voting in a referendum held of CBP’s automation processes in The term cotton means all Upland
July 17–26, 1991, and the amended connection with documenting and cotton harvested in the United States
Order was published in the Federal collecting assessments. CBP indicated and all imports of Upland cotton,
Register on December 10, 1991, (56 FR that the documentation and collection including the Upland cotton content of
64470). A proposed rule implementing process is automated and costs have products derived thereof.
the amended Order was published in been significantly decreased. Taking ■ 3. In § 1205.510, paragraph (b)(3) is
the Federal Register on December 17, into account technological revised to read as set forth below (the
1991, (56 FR 65450). Implementing advancements in the fee collection Import Assessment Table remains
rules were published on July 1 and 2, process, CBP no longer charges USDA unchanged):
1992, (57 FR 29181 and 57 FR 29431, for the collection of assessments on
respectively). § 1205.510 Levy of assessments.
agricultural commodities. This has
The total value of assessment levied eliminated the administrative burden * * * * *
on cotton imports is the sum of two associated with the collection of (b) * * *
parts. The first part of the assessment is assessments. (3) The following table contains
based on the weight of cotton AMS is striking subparagraph (i) Harmonized Tariff Schedule (HTS)
imported—levied at a rate of $1 per bale under paragraph § 1205.510(b)(3) of the classification numbers and
of cotton, which is equivalent to 500 Cotton Research and Promotion Rules corresponding conversion factors and
pounds, or $1 per 226.8 kilograms of and Regulations and appending to the assessments. The left column of the
cotton. The second part of the import paragraph section the language following table indicates the HTS
assessment (referred to as the currently in subparagraph (ii). This classifications of imported cotton and
supplemental assessment) is based on action reflects the technological cotton-containing products subject to
the value of imported cotton lint or the efficiencies of the CBP import assessment. The center column
cotton contained in imported cotton documentation process by eliminating indicates the conversion factor for
products—levied at a rate of five-tenths the de minimis provisions in the determining the raw fiber content for
of one percent of the value of regulations, and, therefore, helps to each kilogram of the HTS. HTS numbers
domestically produced cotton. The ensure that the assessments collected on for raw cotton have no conversion factor
current assessment on imported cotton imported cotton and the cotton content in the table. The right column indicates
is $0.012013 per kilogram of imported of imported products will be the same the total assessment per kilogram of the
cotton. as those paid on domestically produced article assessed. In the event that any
The Act provides that ‘‘Any de cotton. In addition, AMS is modifying HTS number subject to assessment is
minimis figure as established under this the definition of cotton in § 1205.12 to changed and such change is merely a
paragraph shall be such as to minimize include imported cotton that previously replacement of a previous number and
the burden in administering the was exempted due to the de minimis has no impact on the physical
assessment provision but still provide exemption. With this action, importers properties, description, or cotton
for the maximum participation of who previously imported de minimis content of the product involved,
imports of cotton in the assessment amounts of cotton may now be eligible assessments will continue to be
provisions of this chapter.’’ 7 U.S.C. to participate in the sign-up period for collected based on the new number.
2116(c)(2). The Import Assessment a continuance referendum that would * * * * *
Table in paragraph (b)(3) of § 1205.510 determine whether a continuance Dated: June 10, 2016.
of the Cotton Research and Promotion referendum is favored. Elanor Starmer,
Rules and Regulations indicates the Summary of Comments Administrator.
total assessment rate ($ per kilogram)
[FR Doc. 2016–14174 Filed 6–14–16; 8:45 am]
due for each Harmonized Tariff A proposed rule was published in the
BILLING CODE 3410–02–P
Schedule (HTS) number that is subject Federal Register on December 16, 2014,
to assessment. Subparagraph (i) of this with a comment period of December 11,
same paragraph provides for an 2015, through January 11, 2016 (80 FR
DEPARTMENT OF AGRICULTURE
exemption from assessment for any line 76873). No comments were received by
item entry of cotton appearing on U.S. AMS. The proposed rule may be viewed Agricultural Marketing Service
Customs and Border Protection (CBP) at www.regulations.gov.
entry documentation whose calculated List of Subjects in 7 CFR Part 1205 7 CFR Part 1214
assessment is two dollars ($2.00) or less.
This de minimis exemption was Advertising, Agricultural research, [Document Number AMS–SC–15–0072]
established to minimize the Cotton, Marketing agreements,
Reporting and Recordkeeping Christmas Tree Promotion, Research,
administrative burden of collecting
requirements. and Information Order; Late Payment
import assessments, which was
and Interest Charges on Past Due
originally estimated to be $2.00 per line For the reasons set forth in the Assessments
item, where administrative costs would preamble, 7 CFR part 1205 is amended
exceed the actual value of the as follows: AGENCY: Agricultural Marketing Service,
assessment. USDA.
ehiers on DSK5VPTVN1PROD with RULES
The de minimis figure is an estimate PART 1205—COTTON RESEARCH ACTION: Final rule.
of administrative burden, which is AND PROMOTION
equivalent to the transactions costs of SUMMARY: This rule prescribes late
collecting the cotton fee. The de ■ 1. The authority citation for part 1205 payment and interest charges on past
minimis provision was necessary to continues to read as follows: due assessments under the Christmas
avoid instances where the transactions Authority: 7 U.S.C. 2101–2118. Tree Promotion, Research, and
VerDate Sep<11>2014 14:36 Jun 14, 2016 Jkt 238001 PO 00000 Frm 00014 Fmt 4700 Sfmt 4700 E:\FR\FM\15JNR1.SGM 15JNR1](https://thefederalregister.org/doc/81_FR_39008/page/2.svg)
Document Created: 2016-06-15 02:21:26
Document Modified: 2016-06-15 02:21:26
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Rules and Regulations | |
| Action | Final rule. | |
| 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] | |
| FR Citation | 81 FR 38893 | |
| CFR Associated | Advertising; Agricultural Research; Cotton; Marketing Agreements and Reporting and Recordkeeping Requirements |
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