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###### Department of Agriculture

###### Agricultural Marketing Service

          -  7 CFR Part 1205
          - [Docket No. AMS-CN-07-0094; CN-07-006]

# AGENCY:

Agricultural Marketing Service, USDA.

# ACTION:

Final rule.

# SUMMARY:

This rule will amend the rules and regulations regarding the procedures for the conduct of a sign-up period for eligible cotton producers and importers to request a continuance referendum on the 1991 amendments to the Cotton Research and Promotion Order (Order) provided for in the Cotton Research and Promotion Act (Act) amendments of 1990. The amendments will update various dates, name changes, addresses, and make other administrative changes.

# EFFECTIVE DATE:

September 7, 2007.

# FOR FURTHER INFORMATION CONTACT:

                        Shethir M. Riva, Chief, Research and Promotion Staff, Cotton Program, AMS, USDA, Stop 0224, 1400 Independence Ave., SW., Room 2639, Washington, DC 20250-0224, telephone (202) 720-6603, facsimile (202) 690-1718, or e-mail at                         *Shethir.riva@usda.gov.*

# SUPPLEMENTARY INFORMATION:

## Executive Order 12866

The Office of Management and Budget has waived the review process required by Executive Order 12866 for this action.

## Executive Order 12988

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have retroactive effect. This rule would not preempt any state or local laws, regulations, or policies, unless they present an irreconcilable conflict with this rule. 

The Cotton Research and Promotion Act (7 U.S.C. 2101-2118) 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 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 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, USDA 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 or her principal place of business, has jurisdiction to review the USDA's ruling, provided a complaint is filed within 20 days from the date of the entry of ruling.

## Regulatory Flexibility Act

                    Pursuant to requirements set forth in the regulatory Flexibility Act (RFA) [5 U.S.C. 601*et seq.*], the Agricultural Marketing Service has considered the economic effect of this action on small entities and has determined that its implementation will not have a significant economic impact on a substantial number of small entities.                

There are currently approximately 19,000 producers, and approximately 14,000 importers that are subject to the order. The majority of these producers and importers are small businesses under the criteria established by the Small Business Administration.

Only those eligible persons who are in favor of conducting a referendum would need to participate in the sign-up period. Of the 46,220 total valid ballots received in the 1991 referendum, 27,879, or 60 percent, favored the amendments to the Order, and 18,341, or 40 percent, opposed the amendments to the Order. This proposed rule would provide those persons who are not in favor of the continuance of the Order amendments an opportunity to request a continuance referendum.

The eligibility and participation requirements for producers and importers are substantially the same as the rules that established the eligibility and participation requirements for the 1991 referendum, and for the 1997 and 2001 sign-up period. The 1997 and 2001 sign-ups did not generate the required number of signatures to hold another referendum. The amendments proposed in this action would update various dates, name changes, addresses, and make other miscellaneous changes.

The proposed sign-up procedures would not impose a substantial burden or have a significant impact on persons subject to the Order, because participation is not mandatory, not all persons subject to the Order are expected to participate, and USDA will determine producer and importer eligibility. The information collection requirements under the Paperwork Reduction Act are minimal. 

## Paperwork Reduction Act

The information collections proposed by this rule will be carried out under the Office of Management and Budget (OMB) Control Number 0581-0093. This rule will not addd to the overall burden currently approved by OMB and assigned OMB Control Number 0581-0093 under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35). This OMB Control Number is referenced in Section 1205.541 of the regulations.

## Background

                    The 1991 amendments to the Cotton Research and Promotion Order (7 CFR 1205*et seq.*) were implemented following the July 1991 referendum. The amendments were provided for in the Cotton Research and Promotion Act (7 U.S.C. 2101-2118) amendments of 1990. The amendments provided for: (1) Importer representation on the Cotton Board by an appropriate number of persons, to be determined by USDA, who import cotton or cotton products into the U.S., and whom USDA selects from nominations submitted by importer organizations certified by USDA; (2) assessments levied on imported cotton and cotton products at a rate determined in the same manner as for U.S. cotton; (3) increasing the amount USDA can be reimbursed for the conduct of a referendum from $200,000 to $300,000; (4) reimbursing government agencies that assist in administering the collection of assessments on imported cotton and cotton products; and (5) terminating the right of procedures to demand a refund of assessments.                          ( print page 51160)    

On March 6, 2007, USDA issued a determination based on its review, (72 FR 9918), not to conduct a referendum regarding the 1991 amendments to the Order. However, the Act provides that USDA shall nevertheless conduct a referendum at the request of 10 percent or more of the total number of eligible producers and importers that voted in the most recent referendum. The Act provides for a sign-up period during which eligible cotton producers and importers may request that USDA conduct a referendum on continuation of the 1991 amendments to the Order. Accordingly, USDA will provide all eligible Upland cotton producers and importers an opportunity to request a continuance referendum regarding the 1991 amendments to the order. Accordingly, USDA will provide all eligible Upland cotton producers and importers an opportunity to request a continuance referendum regarding the 1991 amendments to the Order.

The sign-up period will be provided for all eligible producers and importers. Eligible cotton producers would be provided the opportunity to sign-up to request a continuance referendum in person at the county Farm Service Agency (FSA) office where their farm is located. If the producer's land is in more than one county, the producer shall sign-up at the county office where FSA administratively maintains and processes the producer's farm records. Producers who choose not to visit the county FSA office in person may request a sign-up form in the mail from the same office.

USDA would mail sign-up information, including a written request form, to all known, eligible, cotton importers. Importers who favor the conduct of a continuance referendum would return their signed request forms to USDA, FSA, DAFO, Attention: Rick Pinkston, P.O. Box 23103, Washington, DC 20026-3103.

Importers who do not receive a request form in the mail by September 4, 2007, and who meet the eligibility requirements to participate in the sign-up, may submit a written, signed, request for a continuance referendum. Such request must be accompanied by a copy of the U.S. Customs and Border Protection form 7501 showing payment of a cotton assessment for calendar year 2006. Requests and supporting documentation should be mailed to USDA, FSA, DAFO, Attention: Rick Pinkston, P.O. Box 23103, Washington DC 20026-3103.  

The sign-up period will be from September 4, 2007, until November 30, 2007. Producer and importer forms shall only be counted if received by USDA during the stated sign-up period.  

Section 8(c)2 of the Act provides that if USDA determines, based on the results of the sign-up, that 10 percent or more of the total number of eligible producers and importers that voted in the most recent 1991 referendum (i.e., 4,622) request a continuance referendum on the 1991 amendments, a referendum will be held within 12 months after the end of the sign-up period. In counting such requests, however, not more than 20 percent may be from producers from any one state or from importers of cotton. For example, when counting the requests, the AMS Cotton Program would determine the total number of valid requests from all cotton-producing states and from importers. Not more than 20 percent of the total requests will be counted from any one state or from importers toward reaching the 10 percent for 4,622 total signatures required to call for a referendum. If USDA determines that 10 percent or more of the number of producers and importers who voted in the most recent referendum favor a continuance referendum. A referendum will be held.  

This rule amends the procedures for the conduct of the current sign-up period. The current rules and regulations provide for sections on definitions, supervision of the sign-up period, eligibility, participation in the sign-up period, counting requests, reporting results and instructions and forms.  

In section 1205.18 the term “Producer” is further defined to ensure that all producers that planted cotton during 2006 will be eligible to participate in the sign-up period. In sections 1205.20, 1205.26, and 1205.27 “calendar year 2001” would change to “calendar year 2006.” In sections 1205.27, 1205.28, and 1205.29 sign-up period conduct dates, FSA reporting dates, and mailing addresses have been updated.  

                    A proposed rule with a request for comments was published in the                     **Federal Register**                     on July 30, 2007, (72 FR 41460). No comments were received on the proposed rule; however, during the review process, USDA identified two beneficial changes. First, in § 1205.27 paragraph (c), USDA is changing the date from October 31, 2007, to November 30, 2007, to allow producers, who may need to submit supporting documentation to FSA County offices, the entire sign-up period to do so. The appropriate FSA office must receive all supporting documentation by November 30, 2007. Second, USDA is changing the date in § 1205.28 from November 1, 2007, to November 30, 2007, so FSA, who is assisting with the sign-up, can have the full allotted sign-up period before being required to begin to count requests.                  

                    Pursuant to 5 U.S.C. 533, it is found that good cause exists for not postponing the effective date of this rule until thirty days after publication in the                     **Federal Register**                     because: (1) The Department has determined that September 4, 2007, to November 30, 2007, are the preferable dates of the sign-up period; (2) is consistent with the intent of the Act; (3) interested persons have been provided an opportunity to submit written comments concerning the amendments to the sign-up procedures; and (4) the amendments merely update various dates, name changes, addresses and make other miscellaneous. Eligibility and participation requirements are substantially the same that were used in previous referenda and a sign-up period.                

This rule amends the subpart to established procedures for use during the sign-up period. Accordingly, this rule is made final with the following changes.

# List of Subjects in 7 CFR Part 1205

      - Advertising
      - Agricultural research
      - Cotton
      - Marketing agreements
      - Reporting and recordkeeping requirements

## 7 CFR Part 1205, Subpart 1205.10 Through 1205.30

For the reasons set forth in the preamble, 7 CFR part 1205 is amended as follows:

# PART 1205—COTTON RESEARCH AND PROMOTION

1. The authority citation to part 1205 continues to read as follows: 

Authority:7 U.S.C. 2101-2118 and 7 U.S.C. 7401.

2. Section 1205.20 is revised to read as follows: 

§ 1205.20 

                            The term                             *representative period*                             means the 2006 calendar year.                        

3. In § 1205.26, paragraphs (a)(1) and (a)(2) are revised as follows: 

§ 1205.26 

* * * * *

(a) * * *

(1) Any person who was engaged in the production of Upland cotton during calendar year 2006; and

                            (2) Any person who was an importer of Upland cotton and imported Upland cotton in excess of the value of $2.00                                   ( print page 51161)                                per line item entry during calendar year 2006.                        

* * * * *

4. Section 1205.27 is revised to read as follows: 

§ 1205.27 

The sign-up period will be from September 4, 2007, through November 30, 2007. Those persons who favor the conduct of a continuance referendum and who wish to request that USDA conduct such a referendum may do so by submitting such request in accordance with this section. All requests must be received by the appropriate USDA office by November 30, 2007.

(a) Before the sign-up period begins, FSA shall establish a list of known, eligible, Upland cotton producers in the country that it serves during the representative period, and AMS shall also establish a list of known, eligible Upland cotton importers.

(b) Before the start of the sign-up period, AMS shall mail a request form to each known, eligible, cotton importer. Importers who wish to request a referendum and who do not receive a request form in the mail by September 4, 2007, may particiapte in the sign-up period by submitting a signed, written request for a continuance referendum, along with a copy of a U.S. Customs and Border Protection form 7501 showing payment of a cotton assessment for calendar year 2006. Importers must submit their requests and supporting documents to USDA, FSA, DAFO, Attention: Rick Pinkston, P.O. Box 23103, Washington, DC 20026-3103. All requests and supporting documents must be received by November 30, 2007.

(c) Each person on the county FSA office lists may participate in the sign-up period. Eligible producers must date and sign their name on the “County FSA Office Sign-up Sheet.” A person whose name does not appear on the county FSA office list may participate in the sign-up period.

Such person must be identified on FSA-578 during the representative period or provide documentation that demonstrates that the person was a cotton producer during the representative period. Cotton producers not listed on the FSA-578 shall submit at least one sales receipt for cotton they planted during the representative period. Cotton producers must make requests to the county FSA office where the producer's farm is located.  If the producer's land is in more than one county, the producer shall make request at the county officer where FSA administratively maintains and processes the producer's farm records.  It is the responsibility of the person to provide the information need by the county FSA office to determine eligibility.  It is not the responsibility of the county FSA office to obtain this information.  If any person whose name does not appear on the county FSA office list fails to provide at least one sales receipt for the cotton they produced during the representative period, the county FSA office shall determine that such person is ineligible to participate in the sign-up period, and shall note “ineligible” in the remarks section next to the person's name on the county FSA office sign-up sheet.  In lieu of personally appearing at a county FSA office, eligible producers may request a sign-up form from the county FSA office where the producer's farm is located.  If the producer's land is in more than one county, the producer shall make the request for the sign-up form at the county office where the FSA administratively maintains and processes the producer's farm records.  Such request must be accompanied by a copy of at least one sales receipt for cotton they produced during the representative period.  The appropriate FSA office must receive all completed forms and supporting documentation by November 30, 2007.

7. In § 1205.28, the first sentence is revised to read as follows: 

§1205.28

County FSA offices and FSA, Deputy Administrator for Field Operations (DAFO), shall begin counting requests no later than November 30, 2007. * * *

8. Section 1205.29 is revised to read as follows: 

§ 1205.29

(a) Each county FSA office shall prepare and transmit to the state FSA office by December 7, 2007, a written report of the number of eligible producers who requested the conduct of a referendum, and the number of ineligible persons who made requests.

(b) DAFO shall prepare, by December 7, 2007, a written report of the number of eligible importers who requested the conduct of a referendum, and the number of ineligible persons who made requests.

(c) Each state FSA office shall, by December 7, 2007, forward all county reports to DAFO.  By December 14, 2007, DAFO shall forward its report of the total number of eligible producers and importers that requested a continuance referendum, through the sign-up period, to the Deputy Administrator, Cotton Program, AMS, Stop 0224, 1400 Independence Ave., SW., Washington, DC 20250-0224.

Dated: August 28, 2007.

Lloyd C. Day,

Administrator, Agricultural Marketing Service.

[FR Doc. 07-4312 Filed 9-5-07; 8:45 am]

BILLING CODE 3410-02-M