Federal Register Vol. 82, No.170,

Background

Black stem rust is one of the most destructive plant diseases of small grains that is known to exist in the United States. The disease is caused by a fungus (Puccinia graminis) that reduces the quality and yield of infected wheat, oat, barley, and rye crops. In addition to infecting small grains, the fungus lives on a variety of alternate host plants that are species of the genera Berberis, Mahoberberis, and Mahonia. The fungus is spread from host to host by windborne spores.

The black stem rust quarantine and regulations, which are contained in 7 CFR 301.38 through 301.38-8 (referred to below as the regulations), quarantine the conterminous 48 States and the District of Columbia and govern the interstate movement of certain plants of the genera Berberis, Mahoberberis, and Mahonia, known as barberry plants. The species of these plants are categorized as either rust-resistant or rust-susceptible. Rust-resistant plants do not pose a risk of spreading black stem rust or of contributing to the development of new races of the rust; rust-susceptible plants do pose such risks. Section 301.38-2 of the regulations includes a listing of regulated articles and indicates those species and varieties of the genera Berberis, Mahoberberis, and Mahonia that are known to be rust-resistant. Although rust-resistant species are included as regulated articles, they may be moved into or through protected areas if accompanied by a certificate. In accordance with the procedures described below under DATES, this direct final rule will add the following varieties to the lists of rust-resistant Berberis and Mahonia species in § 301.38-2(a)(1) and (a)(2):

• B. thunbergii atropurpurea x B. xmedia H2011-085-006;

• B. thunbergii `Diabolicum';

• B. thunbergii “8-8-13”;

• B. thunbergii H2007-001-031;

• B. thunbergii Orange Torch;

• B. thunbergii Red Torch;

• B. thunbergii Striking Gold;

• B. thunbergii UCONNBT039;

• B. thunbergii UCONNBT048;

• B. thunbergii UCONNBT113;

• B. thunbergii UCONNBTCP4N;

• B. thunbergii UCONNtrispecific;

• B. thunbergii x B. sieboldii H2010-079-012;

• B. verruculosa x gagnepainii x vulgaris Trispecific#2;

• B. xmedia x thunbergii atropurpurea H2011-165-002;

• M. eurybracteata Soft Caress (PPAF); and

• M. media Marvel (PPAF).

The addition of these species is based on recent testing to determine rust resistance conducted by the Agricultural Research Service of the United States Department of Agriculture (USDA) at its Cereal Disease Laboratory in St. Paul, MN. The testing is performed in the following manner: In a greenhouse, the suspect plant or test subject is placed under a screen with a control plant—a known rust-susceptible species of Berberis, Mahoberberis, or Mahonia. Infected wheat stems, a primary host of black stem rust, are placed on top of the screen. The plants are moistened and maintained in 100 percent humidity. This causes the spores to swell and fall on the plants lying under the screen. The plants are then observed for 7 days at 20-80 percent relative humidity. If the rust-susceptible plant shows signs of infection after 7 days and the test plants do not, the test results indicate that the test plants are rust-resistant. This test must be performed 12 times, and all 12 tests must yield the same result before USDA can make a determination as to whether the test plants are rust-resistant. The test may be conducted on 12 individual plants, or it may be performed multiple times on fewer plants (e.g., 6 plants tested twice or 3 plants tested 4 times). The tests must be performed on new growth, just as the leaves are unfolding. Therefore, the tests are usually conducted in the spring or fall, during the growing season. All 12 tests generally cannot be conducted on the same day because of the plants' different growth stages. Based on over 30 years of experience with this test, we believe that 12 is the reliable test sample size on which USDA can make its determination. We do not know of any plant that was subsequently discovered to be rust-susceptible after undergoing the test procedure 12 times and being determined by USDA to be rust-resistant.

We are publishing this rule without a prior proposal because we view this action as noncontroversial and anticipate no adverse public comment. This rule will be effective, as published in this document, on November 6, 2017, unless we receive written adverse comments or written notice of intent to submit adverse comments on or before October 5, 2017.

Adverse comments are comments that suggest the rule should not be adopted or that suggest the rule should be changed.

If we receive written adverse comments or written notice of intent to submit adverse comments, we will publish a document in the Federal Register withdrawing this rule before the effective date. We will then publish a proposed rule for public comment.

As discussed above, if we receive no written adverse comments or written notice of intent to submit adverse comments within 30 days of publication of this direct final rule, this direct final rule will become effective 60 days following its publication. We will publish a document in the Federal Register before the effective date of this direct final rule confirming that it is effective on the date indicated in this document.

This rule is subject to Executive Order 12866. However, for this action, the Office of Management and Budget has waived its review under Executive Order 12866. Further, because this rule is waived, it does not trigger the requirements of Executive Order 13771.

This direct final rule will amend 7 CFR 301.38-2 by adding 15 varieties to the list of rust resistant Berberis species or cultivars, and 2 varieties to the list of rust resistant Mahonia species or cultivars. The nursery and floriculture industries that may be affected by this rule are largely composed of small entities. We expect these entities to benefit from the rule, by being able to market interstate barberry species and cultivars that have been determined to be rust-resistant.

The introduction and spread of plant pests can result in damage to crops and losses to the U.S. agricultural sector. For the purpose of this analysis and following the Small Business Administration (SBA) guidelines, we note that a major segment of entities potentially affected by this rule are classified within the following industries: Nursery and Tree Production (NAICS 111421), and Floriculture Production (NAICS 111422). According to the Census of Agriculture, these two categories, along with Greenhouse production, which makes up the rest of NAICS 1114, included 52,777 farms in 2012, and represented 2.5 percent of all farms in the United States. These entities are considered small by SBA standards if their annual sales are $750,000 or less. Over 87 percent of the farms in these industries had annual sales of less than $500,000.

Barberry plants are not one of the crops tracked by the Census and therefore data on production and number of producers are not available. Nurseries producing barberry plant species and varieties will not be negatively affected. In fact, they will benefit from being able to market the 17 varieties interstate. In addition, the rule does not require any additional reporting, recordkeeping, or other compliance measures beyond what is already in place.

Under these circumstances, the Administrator of the Animal and Plant Health Inspection Service has determined that this action will not have a significant economic impact on a substantial number of small entities.

This program/activity is listed in the Catalog of Federal Domestic Assistance under No. 10.025 and is subject to Executive Order 12372, which requires intergovernmental consultation with State and local officials. (See 2 CFR chapter IV.)

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule: (1) Preempts all State and local laws and regulations that are inconsistent with this rule; (2) has no retroactive effect; and (3) does not require administrative proceedings before parties may file suit in court challenging this rule.

This rule contains no information collection or recordkeeping requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

Accordingly, 7 CFR part 301 is amended as follows:

This rule is issued under Marketing Agreement and Order No. 930, both as amended (7 CFR part 930), regulating the handling of tart cherries produced in the States of Michigan, New York, Pennsylvania, Oregon, Utah, Washington and Wisconsin, hereinafter referred to as the “order.” The order is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.”

The Department of Agriculture (USDA) is issuing this final rule in conformance with Executive Orders 13563 and 13175. This rule does not meet the definition of a significant regulatory action contained in section 3(f) of Executive Order 12866 and is not subject to review by the Office of Management and Budget (OMB). Additionally, because this rule does not meet the definition of a significant regulatory action, it does not trigger the requirements contained in Executive Order 13771. See OMB's Memorandum titled, “Interim Guidance Implementing Section 2 of the Executive Order of January 30, 2017, titled `Reducing Regulation and Controlling Regulatory Costs' ” (February 2, 2017).

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. Under the marketing order now in effect, tart cherry handlers are subject to assessments. Funds to administer the order are derived from such assessments. It is intended that the assessment rate as issued herein will be applicable to all assessable tart cherries beginning on October 1, 2016, and continue until amended, suspended, or terminated.

The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file with USDA a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with law and request a modification of the order or to be exempted therefrom. Such handler is afforded the opportunity for a hearing on the petition. After the hearing, USDA would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review USDA's ruling on the petition, provided an action is filed not later than 20 days after the date of the entry of the ruling.

This rule increases the portion of the assessment rate allocated to research and promotion activities from $0.005 to $0.0065 per pound of tart cherries handled and decreases the portion allocated to administrative expenses from $0.0025 to $0.001 per pound of tart cherries handled under the order. This rule also corrects the allocation numbers from $0.006 per pound for research and promotion activities and $0.0015 per pound for administrative expenses as stated in the proposed rule based on a comment received. The overall assessment rate for the 2016-17 and subsequent fiscal periods remains unchanged at $0.0075 per pound of tart cherries.

The tart cherry marketing order provides authority for the Tart Cherry Industry Administrative Board (Board), with the approval of USDA, to formulate an annual budget of expenses and collect assessments from handlers to administer the program. The members of the Board are producers and handlers of tart cherries, and one public member. They are familiar with the Board's needs and with the costs of goods and services in their local areas and are thus in a position to formulate an appropriate budget and assessment rate. The assessment rate is formulated and discussed in a public meeting. Thus, all directly affected persons have an opportunity to participate and provide input.

For the 2010-11 and subsequent fiscal periods, the Board recommended, and USDA approved, an assessment rate of $0.0075 per pound of tart cherries that would continue in effect from fiscal period to fiscal period unless modified, suspended, or terminated by USDA upon recommendation and information submitted by the Board or other information available to USDA.

The Board met on September 8, 2016, and unanimously recommended 2016-17 expenditures of $2,523,550 and an assessment rate of $0.0075 per pound of tart cherries. In comparison, last year's budgeted expenditures were $1,725,000. The total assessment rate remains unchanged by this action. However, this rule increases the portion of the assessment rate allocated to research and promotion activities from $0.005 to $0.0065 per pound of tart cherries handled and decreases the portion allocated to administrative expenses from $0.0025 to $0.001 per pound of tart cherries handled under the order. This shift in allocation will allow for expanded research and promotion activities to help market this season's above-average crop, while helping to ensure that funds held in the Board's authorized reserve are consistent with the order's limits on the reserve.

The major expenditures recommended by the Board for the 2016-17 fiscal year include $2,045,550 for promotion, $255,000 for personnel, and $106,000 for office expenses. Budgeted expenses for these items in 2015-16 were $1,150,000, $236,000, and $102,000, respectively.

The assessment rate recommended by the Board was derived by considering expected shipments of tart cherries and examining the needs of the industry with regard to research and promotion and the authorized reserve. Tart cherry shipments for the 2016-17 year are estimated at 314.7 million pounds, which should provide $2,360,250 in assessment income. Income derived from handler assessments, interest income, and funds from the Board's authorized reserve should be adequate to cover budgeted expenses. Funds in the reserve (approximately $894,000) will be kept within the maximum permitted by the order of no more than approximately one year's operational expenses as stated in § 930.42(a).

The assessment rate will continue in effect indefinitely unless modified, suspended, or terminated by USDA upon recommendation and information submitted by the Board or other available information.

Although this assessment rate will be in effect for an indefinite period, the Board will continue to meet prior to or during each fiscal period to recommend a budget of expenses and consider recommendations for modification of the assessment rate. The dates and times of Board meetings are available from the Board or USDA. Board meetings are open to the public, and interested persons may express their views at these meetings. USDA will evaluate Board recommendations and other available information to determine whether modification of the assessment rate is needed. Further rulemaking would be undertaken as necessary. The Board's budget for future fiscal periods will be reviewed and, as appropriate, approved by USDA.

Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS) has considered the economic impact of this rule on small entities. Accordingly, AMS has prepared this final regulatory flexibility analysis.

The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act, and rules issued thereunder, are unique in that they are brought about through group action of essentially small entities acting on their own behalf.

There are approximately 600 producers of tart cherries in the regulated area and approximately 40 handlers of tart cherries who are subject to regulation under the order. Small agricultural producers are defined by the Small Business Administration (SBA) as those having annual receipts of less than $750,000, and small agricultural service firms have been defined as those whose annual receipts are less than $7,500,000 (13 CFR 121.201).

According to the National Agricultural Statistics Service and Board data, the average annual grower price for tart cherries during the 2015-16 season was approximately $0.347 per pound. With total utilization at 251.1 million pounds, the total 2015-16 crop value is estimated at $87 million. Dividing the crop value by the estimated number of producers (600) yields an estimated average receipt per producer of $145,000. This is well below the SBA threshold for small producers. In 2015, The Food Institute estimated a free on board (f.o.b.) price of $0.96 per pound for frozen tart cherries, which make up the majority of processed tart cherries. Multiplying the f.o.b price by total utilization of 251.1 million pounds results in an estimated handler-level tart cherry value of $241 million. Dividing this figure by the number of handlers (40) yields an estimated average annual handler receipts of $6 million, which is below the SBA threshold for small agricultural service firms. Assuming a normal distribution, the majority of producers and handlers of tart cherries may be classified as small entities.

This rule increases the portion of the assessment rate allocated to research and promotion activities from $0.005 to $0.0065 per pound of tart cherries handled and decreases the portion allocated to administrative expenses from $0.0025 to $0.001 per pound of tart cherries handled under the order. This rule also corrects the allocation numbers from $0.006 per pound for research and promotion activities and $0.0015 per pound for administrative expenses as stated in the proposed rule based on a comment received. The overall assessment rate established for the Board for the 2016-17 and subsequent fiscal periods remains unchanged at $0.0075 per pound of tart cherries. The quantity of assessable tart cherries for the 2016-17 season is estimated at 314.7 million pounds. Thus, the $0.0075 rate should provide $2,360,250 in assessment income. Income derived from handler assessments, interest income, and funds from the Board's authorized reserve should provide sufficient funds to meet this year's anticipated expenses.

The major expenditures recommended by the Board for the 2016-17 year include $2,045,550 for promotion, $255,000 for personnel, and $106,000 for office expenses. Budgeted expenses for these items in 2015-16 were $1,150,000, $236,000, and $102,000, respectively.

This rule shifts the allocation of the assessment rate to increase the portion allocated for research and promotion, while decreasing the portion allocated for administrative costs. This adjustment will allow for expanded research and promotion activities to help market this season's above-average crop, while helping to ensure that funds held in the Board's authorized reserve are consistent with the order's limits on the reserve.

Prior to arriving at this budget and assessment rate, the Board considered production history, crop estimates, its financial statements, and the need to both reduce financial reserves and increase its marketing efforts to increase demand for tart cherries. The Board also considered not taking this action but determined that 2016-17 expenditures of $2,523,550 were appropriate, and the recommended assessment rate and allocation, along with funds from interest income, block grants, and funds from reserves, would be adequate to cover budgeted expenses.

A review of historical information and preliminary information pertaining to the upcoming crop year indicates that the average grower price for the 2016-17 season could be approximately $0.348 per pound of tart cherries. Therefore, the estimated assessment revenue for the 2016-17 crop year as a percentage of total grower revenue could be approximately 2 percent.

This action does not increase the assessment obligation imposed on handlers. While assessments impose some additional costs on handlers, the costs are minimal and uniform on all handlers. Some of the costs may be passed on to producers. However, these costs are offset by the benefits derived by the operation of the marketing order.

The Board's meetings were widely publicized throughout the tart cherry industry, and all interested persons were invited to attend the meetings and participate in Board deliberations on all issues. Like all Board meetings, the June 23, 2016, and September 8, 2016, meetings were public meetings, and all entities, both large and small, were able to express views on this issue.

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the order's information collection requirements have been previously approved by OMB and assigned OMB No. 0581-0177, Tart Cherries Grown in the States of Michigan, New York, Pennsylvania, Oregon, Utah, Washington, and Wisconsin. No changes in those requirements are necessary as a result of this action. Should any changes become necessary, they would be submitted to OMB for approval.

This rule imposes no additional reporting or recordkeeping requirements on either small or large tart cherry handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies. As noted in the initial regulatory flexibility analysis, USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this final rule.

AMS 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 and services, and for other purposes.

A proposed rule concerning this action was published in the Federal Register on May 25, 2017(82 FR 24080). Copies of the proposed rule were also mailed or sent via facsimile to all tart cherry handlers. Finally, the proposal was made available through the internet by USDA and the Office of the Federal Register. A 30-day comment period ending June 26, 2017, was provided for interested persons to respond to the proposal.

One comment was received from Board staff indicating that the Board minutes stated the recommendation was for assessment allocation of $0.0065 per pound of tart cherries for promotion and $0.001 per pound of tart cherries for administration rather than the $0.006 and $0.0015, respectively, as published in the proposed rule. Accordingly, the allocation numbers were revised based on the comment received.

A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/rules-regulations/moa/small-businesses. Any questions about the compliance guide should be sent to Richard Lower at the previously mentioned address in the FOR FURTHER INFORMATION CONTACT section.

After consideration of all relevant material presented, including the information and recommendation submitted by the Board and other available information, it is hereby found that this rule, as hereinafter set forth, will tend to effectuate the declared policy of the Act.

Pursuant to 5 U.S.C. 553, it is also found and determined that good cause exists for not postponing the effective date of this rule until 30 days after publication in the Federal Register because the fiscal year ends on September 30, 2017, and the change in allotment of assessments collected is necessary to ensure sufficient funds are available to cover the increase in research and promotion expenses that were incurred to help market the 2016-17 above-average crop. Further, handlers are aware of this rule, which was recommended at a public meeting. Also, a 30-day comment period was provided for in the proposed rule and no negative comments were received.

For the reasons set forth in the preamble, 7 CFR part 930 is amended as follows:

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 2016 in the Federal Register (81 FR 51781) for the purpose of calculating assessments on imported cotton is $0.011012 per kilogram. Using the average weighted price received by U.S. farmers for Upland cotton for the calendar year 2016, this direct final rule would amend the new value of imported cotton to $0.011510 per kilogram to reflect the price paid by U.S. farmers for Upland cotton during 2016.

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 2016 calendar year weighted average price received by producers for Upland cotton is $0.644 per pound or $1.42 per kg. (0.644 × 2.2046).

Five tenths of one percent of the average price equals $0.007101 per kg. (1.42 × 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 $0.007101 per kg., which equals $0.01151 per kg.

The current assessment on imported cotton is $0.011012 per kilogram of imported cotton. The revised assessment in this direct final rule is $0.01151, an increase of $0.000498 per kilogram. This increase reflects the increase in the average weighted price of Upland cotton received by U.S. farmers during the period January through December 2016.

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.

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 above, 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. The Office of Management and Budget has waived review of this action. Additionally, because this rule does not meet the definition of a significant regulatory action it does not trigger the requirements contained in Executive Order 13771. See OMB's Memorandum titled “Interim Guidance Implementing Section 2 of the Executive Order of January 30, 2017 titled `Reducing Regulation and Controlling Regulatory Costs' ” (February 2, 2017).

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 2016, 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 increase the assessments paid by the importers under the Cotton Research and Promotion Order. The current assessment on imported cotton is $0.011012 per kilogram of imported cotton. The amended assessment would be $0.01151, 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 2015 (the last audited year), producer assessments totaled $36.06 million and importer assessments totaled $39.42 million. According to the Cotton Board, should the volume of cotton products imported into the U.S. remain at the same level in 2017, one could expect an increase of assessments by approximately $1,548,844.

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 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.

For the reasons set forth in the preamble, AMS amends 7 CFR part 1205 as follows: