Federal Register Vol. 81, No.151,

On June 6, 2016, the Office of Personnel Management (OPM) published proposed regulations (81 FR 36186) to add a new subpart M, Disabled Veteran Leave, in part 630 (Absence and Leave) of title 5, Code of Federal Regulations, and rescind two obsolete regulations. These final regulations implement the Wounded Warriors Federal Leave Act of 2015 (Pub. L. 114-75, November 5, 2015) (hereafter referred to as “the Act”). The Act adds section 6329 to title 5, United States Code, which establishes a separate new leave category, to be known as “disabled veteran leave.” This new leave category entitles any employee who is a veteran with a qualifying service-connected disability to use disabled veteran leave during a 12-month period beginning on the first day of employment for the purposes of undergoing medical treatment for such disability.

Disabled veteran leave available to an eligible employee may not exceed 104 hours for a regular full-time employee. Disabled veteran leave not used during the established 12-month period may not be carried over to subsequent years and will be forfeited. By law, disabled veteran leave is available only to covered employees who are hired (as defined at § 630.1303) on or after November 5, 2016.

The 30-day comment period for the proposed regulations ended on July 6, 2016. We received comments from 12 individuals, 1 agency, and 1 Federal labor organization. This Federal Register notice provides general information regarding the regulation, addresses the comments received, and issues final regulations that reflect three changes to the proposed regulations in §§ 630.1301, 630.1303, and 630.1307(b).

We organized our responses to comments by the affected regulatory section number. We did not receive comments on all regulatory sections. Therefore, not all sections are discussed within this Supplementary Information.

We received comments expressing general support for the new type of leave for disabled veterans. A Federal labor organization expressed that “disabled veteran leave is an excellent way to help mitigate the adverse effects of military service and prevent veterans from experiencing unnecessary personal hardships as they transition into the civilian workforce.” The labor organization stated that having the new 104-hour leave entitlement available during the initial 12-month period of employment “will greatly contribute to assisting veterans in making a more seamless transition to civilian duty by affording them the flexibility they need to undergo medical treatment.”

Comments from individuals reflected that veterans often have multiple appointments necessary to treat their service-connected disabilities and may not have sufficient accrued sick or annual leave to attend those appointments. The comments expressed that the new leave category will make it possible for veterans to obtain necessary medical treatment for their service-connected disabilities (during the 12-month eligibility period) without having to take leave without pay, use accrued sick or annual leave, or become indebted for advanced sick or annual leave.

We received several comments from individuals suggesting changes that would be contrary to the statutory requirements in law. These comments fell into three general categories: (1) The requirement that the disabled veteran leave benefit is applicable only to those hired on or after November 5, 2016, (2) the amount of disabled veteran leave provided (up to 104 hours), and (3) the 12-month period in which to use disabled veteran leave (i.e., that disabled veteran leave is a one-time entitlement rather than a recurring annual entitlement). Changes in these three categories would require a change in law; therefore, no changes were made to the regulations based on these comments.

A labor organization provided a comment on a section of the Supplementary Information of the proposed regulations related to § 630.1304 (Eligibility) (81 FR 36189). In that section, we stated it is important that agencies be able to identify as soon as possible whether an employee is entitled to the benefit since the disabled veteran leave is only available during the first 12 months after the first day of employment. However, we also noted that employees have a responsibility to provide proper documentation/certification from the Veterans Benefits Administration (VBA), a subcomponent of the Department of Veterans Affairs (VA) to enable agencies to make determinations about eligibility for disabled veteran leave. The labor organization stated that the proposed regulations place the burden on veteran employees to provide the necessary documentation upon being employed to gain access to this benefit. The labor organization stated that our proposed regulations are silent on how employees will be notified of the existence of this benefit when they become employed and recommended that agencies provide notice to veterans upon employment by including literature on disabled veteran leave in their new hire packets. Additionally, the labor organization urged that VBA notify employees of this benefit upon certifying their status as a veteran with a qualifying service-connected disability. The labor organization acknowledged that the regulations contain a retroactivity provision at § 630.1304(c), which addresses delayed employee submissions of VBA ratings; however, it asserted that having VBA provide notice of this new leave category would maximize the possibility of veterans taking advantage of the statutory entitlement to disabled veteran leave within the fixed 12-month eligibility period.

We agree that agencies should strive to make employees aware of the disabled veteran leave benefit. While we do not believe it is necessary to incorporate a formal notice requirement in regulations, we will encourage agencies through other means to educate and notify employees regarding the disabled veteran leave benefit. We have also informed VBA of the labor organization's recommendation that it notify veterans of this Federal employee leave benefit when it certifies that they have a 30 percent service-connected disability rating.

Commenters expressed that it was “unfair” to provide this leave benefit only to veterans hired on or after November 5, 2016, and expressed the need for the new leave category to apply to all veterans with a 30 percent or more service-connected disability rating.

Section 2(c) of the Act specifically provides that disabled veteran leave is available to veterans with a 30 percent or more service-connected disability rating who are hired on or after November 5, 2016. Thus, comments received regarding the application of the disabled veteran leave benefit only to those hired on or after November 5, 2016, are outside the scope of OPM's authority and regulations. OPM cannot prescribe regulations that are contrary to statutory requirements.

While current Federal employees who were hired before November 5, 2016, are not eligible for disabled veteran leave, the Federal Government offers a wide range of leave options and workplace flexibilities available to assist employees who need to be away from the workplace, including veterans who must take time off from work to receive medical treatment for their service-connected disabilities. These options include advanced annual leave or advanced sick leave, alternative work schedules, earned credit hours under a flexible work schedule, and earned compensatory time off. Depending on an employee's particular circumstances, leave without pay under the Family and Medical Leave Act (FMLA) or donated leave under the voluntary leave transfer program or voluntary leave bank program may also be options for employees needing time away from work for the treatment of their service-connected disabilities. (See also the discussion of leave rights under Executive Order 5396 at the end of this Supplementary Information.)

Since the term “hired” is not defined in the statute, we define the term “hired” within these regulations to be broader than merely an employee's first appointment with the Federal Government. As discussed in the Supplementary Information of the proposed regulations, although the legislative history of the Act indicates that Congress was focused on the most common scenario—addressing veterans with 30 percent or more service-connected disabilities who are “new” employees and begin their Federal careers with zero hours of sick leave (see House Report 114-180 and Senate Report 114-89)—the law itself does not exclude those with previous Federal civilian service.

Therefore, we provide in these regulations that employees also will be considered to have a hiring event that may qualify them for disabled veteran leave (assuming they meet all other eligibility requirements) if, on or after November 5, 2016, they are (1) reappointed with at least a 90-day break in service or (2) return to civilian duty following a break in civilian duty (with continuous civilian leave status) to perform military service. (See definition of the term hired in § 630.1303.)

One commenter expressed concern that some employees may wait until after they are hired to file a claim for VA disability benefits, which would “leave little or no time to make this process work,” given the delays in the VA process for making disability determinations.

This comment appeared to reflect a misunderstanding of when the 12-month eligibility period begins. The 12-month eligibility period begins on the first day of employment, which is defined to mean the later of (1) the date the employee is first hired (in qualifying employment) or (2) the effective date of the employee's qualifying service-connected disability. The hiring date is the later date when an employee is hired after the effective date of the employee's qualifying service-connected disability. The effective date of the disability determination is the later date if the employee has already been hired. Thus, it is possible for the 12-month eligibility period to begin after an employee's hiring date. Because of comments indicating confusion about this matter, we are revising the definition of first day of employment to more clearly state the rule. We are also making a corresponding clarification in § 630.1301 (Purpose and authority), which relies on the clarified definition of first day of employment.

As discussed in the Supplementary Information for the proposed regulations, the effective date of a service-connected disability is generally either the day after the date of military discharge (if the person filed a disability claim within 1 year of discharge date) or the date the claim was filed. Thus, a delay in a determination by VBA can prevent an employee from using disabled veteran leave during the earlier portion of the 12-month eligibility period that may be retroactively established for certain employees. However, the regulations in § 630.1306(c) address this situation by allowing such employees to retroactively substitute disabled veteran leave for other leave they may have taken for covered medical treatment.

We received one comment regarding the requirement in proposed § 630.1304(b) that, “[i]n order to be eligible for disabled veteran leave, an employee must provide to the agency documentation from the Veterans Benefits Administration certifying that the employee has a qualifying service-connected disability.” The commenter expressed concerns about the VBA's ability “to provide timely decisions” and suggested that, in addition to the VBA rating, we also consider using the following documentation as a proof of a service-connected disability rated at 30 percent or more: A Report of Separation showing medically retired (30 percent) or Temporary Disability Retired List (TDRL) and/or a Medical Evaluation Board (MEB)/Physical Evaluation Board (PEB) evaluation from the service department concerned.

The commenter also expressed concerns that “while many veterans will seamlessly transition from active duty to VA care, there will be those who do not immediately file a claim with VBA.” The commenter stated that “for those who wait to file until after they are hired there may be little or no time to make this process work,” and “[i]f the veteran does not have the decision in hand when hired, the veteran has no ability to push the process within the first year and only a limited ability for after the fact adjustments.” The same commenter mentioned that there are other problematic issues that can delay a rating from VBA.

The Act requires a formal finding by VA under title 38 that an employee is a veteran with a service-connected disability rated at 30 percent or more. (The Act relies on the title 38 definitions of terms “veteran” and “service-connected.” Only VA issues service-connected disability ratings to veterans under title 38.) The regulations already provide that a temporary disability rating by VA under 38 U.S.C. 1156 is considered a valid rating as long as it is in effect. (See definition of the term qualifying service-connected disability in § 630.1303.) Accordingly, we are not making any changes to the regulations in response to the commenter's suggestions to use other forms of documentation as a basis for providing disabled veteran leave. As already noted, in the event that VA delays prevent an employee from using disabled veteran leave during a portion of the 12-month eligibility period, the regulations allow the employee to retroactively substitute disabled veteran leave for other leave used for attending medical treatment of the qualifying service connected-disability. (See § 630.1306(c).)

For example, assume a veteran is discharged from the military in July 2014 and is hired to fill a qualifying Federal civilian position on December 1, 2016, but has not filed a claim for veteran disability benefits. The agency cannot credit the employee with the disabled veteran leave at the time of hire because the employee's eligibility for the benefit has not been established by VA. Subsequently, on March 4, 2017, the employee files a claim and on June 5, 2017, VBA issues a decision that the employee has a service-connected disability rating of 30 percent. In this case, the disability rating is effective on the date the employee filed the claim, March 4, 2017. After the employee provides the employing agency with documentation, the agency establishes March 4, 2017, as the “first day of employment” (as a veteran with a service-connected disability of 30 percent or more) and as the beginning date of the employee's 12-month eligibility period, and credits the employee with disabled veteran leave. The employee will have a 12-month period starting on March 4, 2017, and ending on March 3, 2018, in which to use the leave.

While the disability may have existed as the employee awaited the VBA determination, the Act provides that disabled veteran leave may be provided only to an employee who actually has a service-connected disability rating of 30 percent or more in effect. VBA provides disability ratings to veterans in order to determine compensation benefits related to the veteran's service-connected disability.

In the example scenario, the employee was retroactively determined to be eligible for disabled veteran leave starting on March 4, 2017; however, the determination was not made until June 5, 2017. Thus, the employee was not allowed to use disabled veteran leave during the March 4-June 4 period; however, as provided by § 630.1306(c), the agency must allow the employee to substitute disabled veteran leave retroactively for a qualifying period of absence during the March 4-June 4 period (including leave without pay, sick leave, annual leave, compensatory time off, or other paid time off, but excluding periods of suspension or absence without leave (AWOL)).

We received three comments regarding the crediting of 104 hours of disabled veteran leave on a one-time basis. One commenter thought 104 hours was too much and recommended the regulations be changed to provide a maximum of 80 hours. The commenter also suggested that those 80 hours be provided on an annual basis and recommended changing the effective date from November 5, 2016, to January 1, 2017, to avoid providing the leave benefit twice to an employee in a short amount of time.

This comment is misdirected, as it appears that the commenter believes that disabled veteran leave is provided to qualified employees on a recurring annual basis. As the law clearly provides—and as stated in the proposed and final regulations—employees who otherwise qualify are provided disabled veteran leave only once during their Federal careers. The intent of the Act is to allow qualifying veterans access to this special category of leave during a single 12-month eligibility period that commences on the employee's “first day of employment.” The focus of Congress was to address the problem of new Federal employees who have a zero balance of sick leave when initially appointed. In subsequent years, employees can use accrued sick and annual leave balances to receive medical treatment for their service-connected disabilities. Also, contrary to the commenter's assumption, disabled veteran leave is granted for an individualized 12-month eligibility period, not on a calendar year or leave year basis.

Another commenter also recommended that the benefit be provided on an annual basis if the employee has a need for it and if the employee continues to have the service-connected disability.

A third commenter stated that 104 hours was not enough time to cover the various medical appointments veterans with service-connected disabilities rated at 30 percent or more have. The commenter also stated that the location and operating hours of VA medical centers should have been taken into account when determining the amount of hours of disabled veteran leave to provide to an employee. The commenter suggested that VA medical appointments should be authorized as “company time.” The commenter did not feel he should have to supplement disabled veteran leave by using his own accrued sick leave to attend VA medical appointments.

The comments received regarding the amount of leave to credit under the new leave category and how often this leave is made available are outside the scope of OPM's authority and regulations; therefore, no changes were made to the regulations based on these comments. Under section 6329(b)(1), the amount of disabled leave credited to an employee may not exceed 104 hours. The Act provides a one-time benefit of up to 104 hours of disabled veteran leave to an eligible veteran to be used during the12-month period beginning on the first day of employment.

One commenter expressed concern that the retroactive substitution provisions at § 630.1306(c) are too complex. These provisions allow an employee to substitute disabled veteran leave retroactively for other leave or paid time off used for the medical treatment of a qualifying service-connected disability during the employee's established 12-month eligibility.

We disagree and do not view these provisions as too complex to implement. In addition, the provisions allowing for retroactive substitution are necessary to assist employees who have not yet received their disability determination rating of 30 percent or more from the VBA. Therefore, we are not adopting any changes to this portion of the rule.

We received one agency comment regarding this section. The agency recommended that, in the final rule, § 630.1307(b)(1) be changed from “A statement by the health care provider that the medical treatment is for one or more service-connected disabilities of the employee rated at 30 percent or more” to read as “A statement by the health care provider that the medical treatment is for one or more service-connected disabilities of the employee that resulted in 30 percent or more disability rating” or other similar statement. The agency stated that the proposed section could be interpreted to mean that only individual disabilities rated at 30% or higher are eligible when in reality the leave may be used for any of the disabilities listed in the veteran's disability rating determination that were combined to reach a total disability rating of 30 percent or more. The agency acknowledges that the intent of this section is covered elsewhere in the proposed rule, but expressed concern that this particular verbiage could be misunderstood.

We agree with the comment and are adopting the recommended language for § 630.1307(b)(1) in the final rule.

The same agency also commented on the proposed language regarding the time limits within which an employee must provide any required written medical certification to the agency after the agency requests it. In § 630.1307(c)(1) of the proposed rule, the employee must provide the requested medical certification no later than 15 calendar days after the date the agency requests it.

However, § 630.1307(c)(2) provides that if it is not practicable under the particular circumstances to provide the requested medical certification within 15 calendar days after the date requested by the agency despite the employee's diligent, good faith efforts, the employee must provide the medical certification within a reasonable period of time under the circumstances involved, but no later than 30 calendar days after the date the agency requests such documentation.

The agency recommended removing the phrase “diligent, good faith effort” from the final regulations stating that “good faith” is not further clarified or defined in the proposed rule and agencies will have difficulty defending determinations that an employee did not meet “diligent and good faith efforts.”

While we understand the commenter's concerns, we are not adopting a change to the final regulations. We recognize there may be circumstances in which the employee cannot provide the requested documentation within this prescribed time period; therefore, we provide a limited extended time period for the employee. The employee should make every effort to meet the initial 15 calendar days. However, if more time is needed by the employee, the agency should allow for additional days. The employee bears the responsibility for the required medical certification, and part of his or her effort should be periodic updates to the agency on the status of the required medical certification. The employee must provide the required medical certification no later than 30 days after the agency's initial request for such documentation.

Analogous language regarding an employee's “diligent, good faith efforts” is also included in the medical certification provisions of both the sick leave regulations at § 630.405(b) and the Family and Medical Leave Act (FMLA) regulations at § 630.1208(h). We included parallel provisions in these regulations, so that agencies have one standard to administer regarding the timeframes for employees to provide supporting medical documentation to them. Additionally, we have not had any feedback from agencies expressing any difficulty in administering the sick leave and FMLA provisions based upon the “diligent, good faith efforts” language included under those regulations.

We received one comment regarding Executive Order (E.O.) 5396 issued on July 17, 1930. E.O. 5396 provides a basic entitlement for any veteran to use annual leave, sick leave, or leave without pay when absent from work for medical treatment of a service-connected disability (regardless of the disability rating). The commenter questioned why E.O. 5396 is not mentioned in the proposed rule. The commenter stated that “the will of Congress was to expand the intent of the E.O. by actually paying the disabled Vet for some of the leave without pay (LWOP) that they were granted in the 1930 E.O. and that this E.O. is still in effect.” The commenter further recommended that the final rule provide that E.O. 5396 be the first choice after disabled veteran leave has been exhausted.

While we agree that E.O. 5396 is still in effect and valid, we did not mention it in the proposed rule because the rights provided by the Executive order and benefits under the disabled veteran leave law are two separate entitlements. OPM is authorized to issue regulations on disabled veteran leave under section 2(d) of Public Law 114-75. OPM has no authority to issue regulations regarding E.O. 5396. These disabled veteran leave regulations do not change an employee's entitlement under E.O. 5396 to use annual leave, sick leave, or leave without pay for medical treatment of the employee's service-connected disability.

The commenter was also concerned that the term AWOL (absent without leave) was mentioned several times within the proposed rule and expressed concerns that “management would be quick to build up reasons to fire an individual.”

The regulations include two references to AWOL. The first reference to AWOL in the proposed rule simply states that disabled veteran leave cannot be applied retroactively to time charged as AWOL, but may be applied retroactively to time initially charged as leave without pay (LWOP). The second instance permits an employee to be charged as AWOL if he or she fails to produce the medical documentation required by the agency. See § 630.1306 and 630.1307. We have no reason to believe agencies will abuse this authority. Therefore, no change was made to the regulations based on this comment.

The Office of Management and Budget has reviewed this rule in accordance with E.O. 13563 and 12866.

I certify that this regulation will not have a significant economic impact on a substantial number of small entities because it will apply only to Federal agencies and employees.

Accordingly, OPM is amending part 630 of title 5 of the Code of Federal Regulations as follows:

A. 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.)

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.

This direct final rule would amend the value assigned to imported cotton in the Cotton Board Rules and Regulations (7 CFR 1205.510(b)(2)) that is used to determine the Cotton Research and Promotion assessment on imported cotton and cotton products. 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.

Section 1205.510(b)(2) of the Cotton Research and Promotion Rules and Regulations provides for assigning the calendar year weighted average price received by U.S. farmers for Upland cotton to represent the value of imported cotton. This is so that the assessment on domestically produced cotton and the assessment on imported cotton and the cotton content of imported products is the same. The source for the average price statistic is Agricultural Prices, a publication of the National Agricultural Statistics Service (NASS) of the Department of Agriculture. Use of the weighted average price figure in the calculation of supplemental assessments on imported cotton and the cotton content of imported products will yield an assessment that is the same as assessments paid on domestically produced cotton.

The current value of imported cotton as published in 2015 in the Federal Register (80 FR 53243) for the purpose of calculating assessments on imported cotton is $0.012013 per kilogram. Using the Average Weighted Price received by U.S. farmers for Upland cotton for the calendar year 2015, this direct final rule would amend the new value of imported cotton to $0.011012 per kilogram to reflect the price paid by U.S. farmers for Upland cotton during 2015.

An example of the complete assessment formula and how the figures are obtained is as follows:

One bale is equal to 500 pounds.

One kilogram equals 2.2046 pounds.

One pound equals 0.453597 kilograms.

A 500-pound bale equals 226.8 kg. (500 × 0.453597).

$1 per bale assessment equals $0.002000 per pound or $0.2000 cents per pound (1/500) or $0.004409 per kg or $0.4409 cents per kg. (1/226.8).

The 2015 calendar year weighted average price received by producers for Upland cotton is $0.599 per pound or $1.321 per kg. (0.599 × 2.2046).

Five tenths of one percent of the average price equals $0.006603 per kg. (1.321 × 0.005).

The total assessment per kilogram of raw cotton is obtained by adding the $1 per bale equivalent assessment of $0.004409 per kg. and the supplemental assessment $0.006603 per kg., which equals $0.011012 per kg.

The current assessment on imported cotton is $0.012013 per kilogram of imported cotton. The revised assessment in this direct final rule is $0.011012, a decrease of $0.001001 per kilogram. This decrease reflects the decrease in the average weighted price of Upland cotton received by U.S. farmers during the period January through December 2015.

Import Assessment Table in section 1205.510(b)(3) indicates the total assessment rate ($ per kilogram) due for each Harmonized Tariff Schedule (HTS) number that is subject to assessment. This table must be revised each year to reflect changes in supplemental assessment rates and any changes to the HTS numbers. In this direct final rule, AMS is amending the Import Assessment Table.

AMS believes that these amendments are necessary to ensure that assessments collected on imported cotton and the cotton content of imported products are the same as those paid on domestically produced cotton. Accordingly, changes reflected in this rule should be adopted and implemented as soon as possible since it is required by regulation.

Rulemaking under section 553 of the Administrative Procedure Act (5 U.S.C. 551 et seq.) ordinarily involves publication of a notice of proposed rulemaking in the Federal Register and the public is given an opportunity to comment on the proposed rule; however, an agency may issue a rule without prior notice and comment procedures if it determines for good cause that public notice and comment procedures are impracticable, unnecessary, or contrary to the public interest for such rule, and incorporates a statement of the finding with the underlying reasons in the final rule issued.

As described in this Federal Register document, the amendment to the value used to determine the Cotton Research and Promotion Program importer assessment will be updated to reflect the assessment already paid by U.S. farmers. For the reasons mentioned in section A of this preamble, AMS finds that publishing a proposed rule and seeking public comment is unnecessary because the change is required annually by regulation in 7 CFR 1205.510.

Also, this direct-final rulemaking furthers the objectives of Executive Order 13563, which requires that the regulatory process “promote predictability and reduce uncertainty” and “identify and use the best, most innovative, and least burdensome tools for achieving regulatory ends.”

AMS has used the direct rule rulemaking process since 2013 and has not received any adverse comments; however, if AMS does receives significant adverse comment during the comment period, it will publish, in a timely manner, a document in the Federal Register withdrawing this direct final rule. AMS will then address public comments in a subsequent proposed rule and final rule based on the proposed rule.

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 Orders 12866 and 13563 direct agencies to assess 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 § 3(f) of Executive Order 12866, and therefore, review has been waived, and this action has not been reviewed by the Office of Management and Budget.

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have retroactive effect.

The 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 the Secretary's ruling.

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. In 2015, an estimated 20,000 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 would only affect importers of cotton and cotton-containing products and would lower the assessments paid by the importers under the Cotton Research and Promotion Order. The current assessment on imported cotton is $0.012013 per kilogram of imported cotton. The amended assessment would be $0.011012, which was calculated based on the 12-month weighted average of price received by U.S. cotton farmers. Section 1205.510, “Levy of assessments”, provides “The rate of the supplemental assessment on imported cotton will be the same as that levied on cotton produced within the United States.” In addition, section 1205.510 provides that the 12-month weighted average of prices received by U.S. farmers will be used as the value of imported cotton for the purpose of levying the supplemental assessment on imported cotton.

Under the Cotton Research and Promotion Program, assessments are used by the Cotton Board to finance research and promotion programs designed to increase consumer demand for Upland cotton in the United States and international markets. In 2014 (the last audited year), producer assessments totaled $37.8 million and importer assessments totaled $38.3 million. According to the Cotton Board, should the volume of cotton products imported into the U.S. remain at the same level in 2016, one could expect a decrease of assessments by approximately $3,845,000.

Imported organic cotton and products may be exempt from assessment if eligible under section 1205.519 of the Order.

There are no Federal rules that duplicate, overlap, or conflict with this rule.

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 regulation to be amended 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.

A 30-day comment period is provided to comment on the changes to the Cotton Board Rules and Regulations proposed herein. This period is deemed appropriate because this rule would decrease the assessments paid by importers under the Cotton Research and Promotion Order. An amendment is required to adjust the assessments collected on imported cotton and the cotton content of imported products to be the same as those paid on domestically produced cotton. Accordingly, the change in this rule, if adopted, should be implemented as soon as possible.