74330 Federal Register / Vol. 88, No. 209 / Tuesday, October 31, 2023 / Rules and Regulations 

publication of this rule in the Federal 

Register. This rule is not a major rule as 

defined at 5 U.S.C. 804(2). 

List of Subjects in 5 CFR Part 1650 

Alimony, Claims, Government 

employees, Pensions, Retirement. 

Ravindra Deo, 

Executive Director, Federal Retirement Thrift 

Investment Board. 

For the reasons stated in the 

preamble, the FRTIB amends 5 CFR 

chapter VI as follows: 

PART 1650—METHODS OF 

WITHDRAWING FUNDS FROM THE 

THRIFT SAVINGS PLAN 

■ 1. The authority citation for part 1650 

continues to read as follows: 

Authority: 5 U.S.C. 8351, 8432d, 8433, 

8434, 8435, 8474(b)(5) and 8474(c)(1). 

§ 1650.16 [Amended] 

■ 2. Amend § 1650.16 by removing 

paragraph (d). 

[FR Doc. 2023–24004 Filed 10–30–23; 8:45 am] 

BILLING CODE 6760–01–P 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Part 870 

[Doc. No. AMS–FTPP–21–0055] 

RIN 0581–AE26 

Economic Adjustment Assistance for 

Textile Mills 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Final rule with request for 

comments. 

SUMMARY: The Agricultural Marketing 

Service (AMS) revises the regulation 

providing guidance for domestic 

manufacturers that consume Upland 

Cotton and voluntarily participate in the 

Economic Adjustment Assistance for 

Textile Mills Program. The revisions 

add definitions and codify certain 

participant responsibilities currently 

outlined in the existing user Agreement. 

The changes made by this rule are 

intended to strengthen management 

controls that have been added into the 

Agreement to prevent fraud, waste, and 

abuse. This action provides the 

necessary legal support for program 

administration. 

DATES: 

Effective date: October 31, 2023. 

Comment date: We will consider 

comments that we receive by the close 

of business January 2, 2024. AMS may 

consider the comments received and 

may conduct additional rulemaking 

based on the comments. 

ADDRESSES: Interested persons are 

invited to submit written comments 

concerning this final rule. All comments 

must be submitted through the Federal 

e-rulemaking portal at https://

www.regulations.gov and should 

reference the document number and the 

date and page number of this issue of 

the Federal Register. All comments 

submitted in response to this final rule 

will be included in the record and will 

be made available to the public. Please 

be advised that the identity of the 

individuals or entities submitting 

comments will be made public on the 

internet at https://www.regulations.gov. 

FOR FURTHER INFORMATION CONTACT: Dan 

Schofer, Cotton Program Manager, 

Warehouse and Commodity 

Management Division, Fair Trade 

Practices Program, AMS, USDA; 

Telephone: (202) 690–2434, or Email: 

Dan.Schofer@usda.gov. 

SUPPLEMENTARY INFORMATION: Section 

1207(c) of the Food, Conservation, and 

Energy Act of 2008 (Pub. L. 110–234; 

May 22, 2008) directed the Secretary of 

Agriculture (Secretary) to provide 

economic adjustment assistance to 

domestic users of upland cotton under 

the Economic Adjustment Assistance to 

Users of Upland Cotton program. Under 

the program, domestic users of upland 

cotton may qualify for financial 

assistance that can be used to acquire, 

construct, install, modernize, develop, 

convert, or expand land, plant, 

buildings, equipment, facilities, or 

machinery used in the manufacture of 

final cotton products. Payments for such 

assistance are issued by the Commodity 

Credit Corporation (CCC). Recipients 

must use these funds within a certain 

timeframe and must maintain and 

provide, to program administrators, 

records related to their use of upland 

cotton and allowable capital 

expenditures under the program. 

Section 1203(b) of the Agriculture 

Improvement Act of 2018 (Pub. L. 115– 

334; December 20, 2018) renamed the 

program ‘‘Economic Adjustment 

Assistance for Textile Mills’’ (EAATM). 

In a memorandum dated July 1, 2019, 

the Secretary redelegated authority to 

administer EAATM from the Farm 

Service Agency to AMS. A final rule 

published in the Federal Register on 

October 15, 2020 (85 FR 65500), 

amended 7 CFR part 2 to reflect the 

redelegation. The amended 7 CFR 

2.79(a)(23) authorizes the AMS 

Administrator to administer the EAATM 

program (7 U.S.C. 9037(c)). A final rule 

published in the Federal Register on 

October 1, 2021 (86 FR 54339), removed 

the EAATM regulations from 7 CFR part 

1427 and added them in a new 7 CFR 

part 870—Economic Adjustment 

Assistance for Textile Mills, in §§ 870.1 

to 870.9. 

For participation in the EAATM 

program, domestic users must enter into 

an Upland Cotton Domestic User 

Agreement (Form CCC–1045–DOM) 

(Agreement) and submit upland cotton 

consumption documentation to AMS’s 

Warehouse and Commodity 

Management Division (WCMD) to 

receive financial assistance. 

AMS is now codifying the 

requirements specified in the 

Agreement as regulations. This final 

rule amends 7 CFR part 870 by 

reorganizing and revising existing 

sections and adding several new 

sections, supplying definitions of 

certain program terms, and clarifying 

current program practices to provide a 

better understanding of CCC 

requirements for program participants. 

Under this final rule, references in 7 

CFR part 870 to the Upland Cotton 

Domestic User Program are revised to 

reflect the current name of the program, 

Economic Adjustment Assistance for 

Textile Mills. The final rule adds a new 

§ 870.2—Definitions, to provide the 

meaning of several terms used in 

program administration that have been 

subject to differing interpretations in the 

past. For example, the term domestic 

user is defined as a person regularly 

engaged in the business of opening bales 

of eligible upland cotton for the purpose 

of spinning such cotton into yarn, 

papermaking, or production of nonwoven cotton products. This definition 

clarifies and enhances the use of other 

terms already defined in the current 

regulations. Eligible domestic users is 

defined as domestic users who have 

entered into an Agreement with CCC to 

participate in the program. Eligible 

upland cotton is defined to mean baled 

lint; loose samples used for 

classification purposes that have been 

re-baled; semi-processed motes that are 

suitable for spinning, paper making, or 

production of non-woven fabric; or reginned motes. Eligible upland cotton 

cannot be cotton for which previous 

EAATM payments have been made, 

unprocessed derivatives of the lint 

cleaning process, or textile mill wastes. 

Similarly, the term final cotton product 

is defined to mean a domestically 

manufactured final product that 

contains upland cotton to clarify those 

manufacturing purposes for which 

program assistance funds are eligible. 

Each of these definitions is intended to 


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clarify eligibility for program 

participation. 

The term capital expenditures is 

defined to mean a business’s expenses 

related to the purchase or improvement 

of depreciable fixed assets, such as 

physical property, facilities, and 

equipment used in the manufacture of 

final products containing upland cotton. 

The terms equipment and facility or 

plant is defined to identify those fixed 

assets for which capital expenditures 

are recognized under the program. 

Equipment is defined to mean any 

machine used directly in the production 

of final cotton products in order to 

improve product quality, handling, and/ 

or production efficiency, and facility or 

plant would mean the structures that 

house such equipment. Readily put into 

service is defined to mean facilities, 

equipment, and/or plants put into 

service within 24 months of purchase. 

The definition of operating expenses 

includes examples of funds expended 

that are not eligible for EAATM benefits, 

such as rent, salaries, supplies, utilities, 

insurance, taxes, and maintenance. Each 

of these definitions are necessary to 

clarify which expenses program 

participants can include in claims for 

assistance under the program. 

Terms including linters, pills, and raw 

motes are defined to clarify types of 

processing byproducts that are not 

considered eligible upland cotton for 

program purposes. Terms including 

agreement effective date, date of 

consumption, fiscal year, and marketing 

year would be defined to clarify various 

timeframes related to application and 

reporting deadlines for program 

participation. 

Terms used in the existing Agreement 

that are related to reporting and 

recordkeeping requirements also are 

defined in the regulations. The Upland 

Cotton Domestic User Agreement (Form 

CCC–1045 DOM) means the agreement 

between CCC and an EAATM program 

participant, which outlines general 

program provisions and responsibilities 

of the program participant. This 

agreement is required of all program 

participants. The Monthly Consumption 

Report refers to Form CCC–1045–UP– 

2—Monthly Consumption/Application 

for Payment Report, or other form as 

prescribed by CCC, that contains 

documentation of the baled cotton 

inventory consumed, the eligible 

domestic user’s calculation of program 

payments for the month, and a signed 

certification regarding the documents 

submitted. Participants are required to 

maintain a supplemental ledger, which 

is defined as a line-item ledger of 

proposed capital expenditures for audit 

purposes. Statement of eligible claim 

certification is the document that 

identifies which domestic user in the 

manufacturing chain is eligible to claim 

financial assistance under the EAATM 

program for the use of specific semiprocessed motes or re-ginned mote 

bales. 

Terms used in filling out records and 

reports are also defined in § 870.2. 

Upland cotton means the widely 

cultivated American cotton plant 

(Gossypium hirsutum) that has short-tomedium staple fibers. Final cotton 

product is defined to mean domestically 

manufactured products containing 

upland cotton. Net weight means the 

gross weight of baled upland cotton 

consumed, less the weight of the 

bagging and ties. 

Finally, § 870.2 includes definitions 

for other terms necessary for 

administration of the program as 

explained earlier, such as Agricultural 

Marketing Service, Commodity Credit 

Corporation, Director of AMS’s 

Warehouse and Commodity 

Management Division, and the 

Economic Adjustment Assistance for 

Textile Mills program. 

Currently, §§ 870.3 to 870.9 contain 

the definitions of upland cotton and 

domestic users eligible for program 

participation and provide instructions 

for filing applications for participation 

and payments under the program. 

Under this final rule, those sections are 

reorganized and revised to incorporate 

program provisions that are currently 

only provided in the Agreement, and 

other sections are added to ensure that 

all of the program’s parameters are 

codified. 

Under the final rule, § 870.3—Upland 

Cotton Domestic User Agreement, 

specifies how domestic users of upland 

cotton can enter into Agreements with 

CCC to participate in the EAATM 

program. Applicants are required to 

agree to use EAATM Program funds 

only in compliance with the program 

and to identify all manufacturing 

facilities under their operational control 

and for inclusion in the Agreement. 

Section 870.5—Eligible upland 

cotton, describes upland cotton eligible 

for payment under EAATM and 

specifies that only eligible cotton 

consumed by the user in the United 

States on or after the effective date of 

the Agreement is eligible for payment 

claims. Further, EAATM Program funds 

cannot be used for expenses incurred by 

a domestic user prior to signature by 

both parties to the Agreement. 

Section 870.7—Monthly Consumption 

Report, requires program participants to 

submit cotton consumption reports and 

supporting documentation to AMS 

during each month of the Agreement 

term, including those months in which 

no eligible upland cotton was 

consumed. Required reports would 

constitute participants’ claims for 

payments under the program and 

include their calculations for such 

payments. Under the final rule, 

delinquent Monthly Consumption 

Reports are ineligible for payment for 

the applicable month. Section 870.7 

further provides that AMS will not 

process reports/claims that contain 

errors or omissions. Finally, § 870.7 

requires that, in the event of a transfer 

of eligible upland cotton bales, both 

program participants involved report to 

AMS any transfers of eligible upland 

cotton bales between them and that 

such transactions must be accompanied 

by a statement of eligible claim 

certification. Submission of the Monthly 

Consumption Report allows for 

validation of active participants, 

enumeration of domestic consumption, 

and provides a baseline for verifying 

that duplicate claims are not submitted 

for program payments. 

Section 870.9—Payment, specifies 

that the current rate for payment under 

the EAATM program is 3 cents per 

pound of eligible cotton consumed, and 

that cotton is considered consumed on 

the date the eligible cotton user removes 

the bale’s bagging and ties immediately 

prior to manufacturing it into final 

cotton products—without further 

processing. Section 870.9 further 

provides that payments are based on the 

bale’s net weight and are made available 

upon the eligible cotton user’s 

submission of the required reports and 

documentation. 

Section 870.11—Capital expenditures, 

specifies that eligible domestic cotton 

users can only use payments under the 

EAATM program to acquire or 

modernize land, buildings, or 

equipment in the United States which 

are directly attributable to the purpose 

of manufacturing upland cotton into 

final cotton products in the United 

States. Other uses, such as for operating 

expenses or other purchases are not 

allowed. Under § 870.11, participants 

using EAATM program funds for 

disallowed purposes are required to 

repay the money to CCC with interest 

and are ineligible for program 

participation for one year after the year 

of violation. Section § 870.11 further 

specifies that program participants must 

submit requests for pre-approval of 

capital expenditures under the program 

that exceed an amount specified in the 

Agreement and for any expenditures 

greater than $10 million on a single, 

allowable, fixed asset. The regulation 

outlines the elements required to be 

submitted in a pre-approval request. 


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The threshold value is specified in the 

latest Upland Cotton Domestic User 

Agreement, rather than in the 

regulations to allow the Agency to 

consider and respond to economic 

pressures. 

Under the final rule, participants are 

required to make capital expenditures 

equal to or greater than amounts 

received as EAATM program payments 

within 18 months of the end of the 

marketing year for which payments are 

made, unless participants apply for and 

are granted a Funding Utilization 

Extension, but in no case more than an 

additional 36 months. 

Fixed assets acquired and/or 

modernized with EAATM Program 

funds must be in operation within 24 

months after the date of delivery. If 

unforeseen difficulties prevent 

utilization within the 24-month period, 

written approval must be obtained from 

WCMD for an extension of time. The 

timeframes and increased 

communication about expenditures 

between the Agency and participants 

are expected to increase auditability and 

transparency. Finally, § 870.11 provides 

that program participants cannot 

transfer—directly or indirectly— 

EAATM Program funds to another 

entity. Participants are required to 

complete an asset transfer certification 

in the event of a sale or transfer of assets 

to another program participant. Except 

for extenuating circumstances approved 

by AMS, fixed assets, purchased using 

EAATM Program funds, cannot be sold 

until they have been in operation for at 

least 36 months and cannot be 

purchased with EAATM Program funds 

again by another eligible domestic user. 

Section 870.13—Records and 

inspection, requires program 

participants to maintain all records and 

reports relating to their EAATM 

Agreement for a period of three years 

following termination of the Agreement. 

Detailed record requirements are 

intended to provide better guidance to 

the participants and expedite audits. 

These requirements include identifying 

elements of the monthly consumption 

listing, supporting documentation of 

purchased and consumed cotton, 

supporting documentation of used but 

ineligible cotton, inventory records, 

capital expenditures, and the 

supplemental ledger. Section 870.13 

requires program participants to provide 

copies of records supporting payment 

claims to AMS upon demand, and to 

make all records related to their 

Agreements accessible to AMS, USDA, 

and/or any other governmental unit 

needing access for audit or inspection 

purposes. The reporting and 

recordkeeping requirements are needed 

for oversight to safeguard program 

integrity. 

Section 870.15—Compliance, 

enforcement, and appeals, provides that 

AMS will notify appropriate 

investigating agencies—and that CCC 

may terminate an Agreement and 

demand full repayment plus interest—if 

a program participant is suspected of 

violating the Agreement, making any 

fraudulent representation, or 

misrepresenting any fact affecting a 

determination under the Agreement. 

Under the final rule, the participant 

could be barred from further 

government program participation as 

necessary to protect government 

interests. Further, CCC retains the 

authority to terminate an Agreement at 

any time. Section 870.15 also provides 

a process for appealing program 

administration decisions. 

Required Regulatory Analyses 

Paperwork Reduction Act 

The Economic Adjustment Assistance 

for Textile Mills Program is exempt 

from the requirements of the Paperwork 

Reduction Act (Agricultural Act of 2014 

(Pub. L. 113–79, Title I, Subtitle F, 

Administration Generally, Section 

1601(c)(2)). Accordingly, the 

information collection requirements of 

this final rule have not been reviewed 

by the Office of Management and 

Budget. 

Executive Order 13175 

This final rule was reviewed under 

Executive Order 13175—Consultation 

and Coordination with Indian Tribal 

Governments, which requires agencies 

to consider whether their rulemaking 

actions have Tribal implications. AMS 

has determined that this final rule is 

unlikely to have substantial direct 

effects on one or more Indian Tribes, on 

the relationship between the Federal 

Government and Indian Tribes, or on 

the distribution of power and 

responsibilities between the Federal 

Government and Indian Tribes. 

Executive Orders 12866 and 13563 

Executive Order 12866—Regulatory 

Planning and Review, and Executive 

Order 13563—Improving Regulation 

and Regulatory Review, 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, of 

reducing costs, of harmonizing rules, 

and of promoting flexibility. The Office 

of Management and Budget (OMB) 

designated this rule as not significant 

under Executive Order 12866. 

Therefore, OMB has not reviewed this 

rule. 

Regulatory Flexibility Analysis 

Pursuant to the requirements set forth 

in the Regulatory Flexibility Act (5 

U.S.C. 601–612), the Agricultural 

Marketing Service (AMS) has 

considered the economic impact of the 

action on small entities, and, 

accordingly, has prepared this 

Regulatory Flexibility Analysis (RFA). 

The purpose of the RFA is to fit 

regulatory actions to the scale of 

businesses subject to such actions so 

that small businesses will not be unduly 

or disproportionately burdened. AMS 

certifies that this rule will not have a 

significant economic impact or burden 

on small Textile Mill entities. In making 

this determination, AMS considered the 

current and possible participant base of 

the Economic Adjustment Assistance for 

Textile Mills (EAATM) Program and the 

nature of this action. The EAATM 

Program is authorized by the Farm Bill, 

first in 2008 (Food, Conservation, and 

Energy Act (Pub. L. 110–246)), 

reauthorized in 2014 (Agricultural Act 

of 2014 (Pub. L. 113–79)) and 2018 (Pub. 

L. 115–334), and funded through 

Commodity Credit Corporation (CCC), 

with administrative oversight delegated 

to AMS. 

AMS used the Small Business 

Administration’s (SBA) definition of 

small business in reference to Textile 

Mills, found at 13 CFR 121.201. The 

affected industry falls under the North 

American Industry Classification 

System (NAICS) as Subsector 313, with 

most current participants classified as 

code 313110—Textile Mills, Fiber, Yarn, 

and Thread Mills. This classification 

includes firms that process raw cotton 

into cotton products. SBA determines 

firm size for this industry by number of 

employees, but on a per firm basis, with 

small firms defined as having fewer 

than 1,500 employees. Current 

participants of the EAATM Program are 

required to be registered with the 

System for Awards Management; 

however, none of the current 

participants appear to have the small 

business registration denoted on their 

entity profile. EAATM participants do 

not disclose the number of employees in 

the agreements or applications 

submitted to CCC but based on 

familiarity with the industry and 

information from SBA’s Dynamic Small 

Business Search Database, AMS 

estimates that 25 out of the 34 current 


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Federal Register / Vol. 88, No. 209 / Tuesday, October 31, 2023 / Rules and Regulations 74333 

participants can be considered small 

entities. 

This action codifies existing 

requirements in the EAATM Domestic 

User Agreement and does not impose 

any new requirements. In analyzing the 

current economic impact on small 

entities, AMS could only deduce 

positive impact. The EAATM program 

has fewer than 40 participants, and 

AMS does not anticipate any surge in 

participation due to the action. Small 

Textile Mill participants in the EAATM 

Program will not be unduly or 

disproportionately burdened. Textile 

Mills of all sizes may benefit 

proportionately from the program, as it 

provides a payment per pound of cotton 

consumed to encourage domestic 

consumption of cotton. 

The definition of an eligible 

participant in reference to the EAATM 

Program is someone regularly engaged 

in opening bales of eligible upland 

cotton for the purposes of spinning 

cotton into yarn, paper making, or 

production of non-woven cotton 

products in the United States, who has 

entered into an agreement with the CCC 

to participate in the upland cotton user 

program. Participants may be public or 

private nonprofit entities. All entities 

that adhere to the eligible participant 

definition and submit a monthly 

application indicating consumed bales 

of upland cotton, regardless of size, can 

voluntarily participate and benefit from 

the EAATM Program. Program 

provisions are administered without 

regard for business size. The paperwork 

required to participate asks for 

information that is part of normal 

business records. The information 

collection burden for eligible 

participants is minimal as they must 

only compete the user application form 

with the Textile Mill’s monthly 

consumption. The voluntary nature of 

the program allows any eligible 

participant to stop participating if they 

find program participation causes an 

undue or disproportionate burden. 

E-Government Act 

USDA is committed to complying 

with the E-Government Act (44 U.S.C. 

3601 et seq.) by promoting 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. 

Executive Order 12988 

This final rule was reviewed under 

Executive Order 12988—Civil Justice 

Reform. This rule will not preempt State 

or local laws, regulations, or policies 

unless they represent an irreconcilable 

conflict with this rule. The final rule is 

not intended to have retroactive effect. 

Before any judicial actions may be 

brought regarding the provisions of this 

rule, administrative appeal provisions of 

7 CFR parts 11 and 780 must be 

exhausted. 

Exemption From Notice and Comment 

The EAATM program is authorized 

under Title I of the Agricultural Act of 

2014. As such, regulations for EAATM 

may be made without regard to the 

notice and comment provisions of the 

Administrative Procedures Act at 5 

U.S.C. 553. (See 7 U.S.C. 9091(C)(2)(a)) 

Nevertheless, AMS is interested in 

public feedback and invites comments 

on this final rule from interested 

persons that may inform future 

rulemaking. Comments are due January 

2, 2024. 

Further, AMS finds there is good 

cause for making this rule effective 

immediately. Implementing the 

provisions of this final rule without a 

30-day delay provides program 

continuity and enumerates participation 

requirements necessary for the industry 

to ensure access to program benefits. 

List of Subjects in 7 CFR Part 870 

Cotton, EAATM, Payments, Reporting 

and recordkeeping, Textile mills, 

Upland Cotton Domestic User 

Agreement. 

■ For the reasons set forth in the 

preamble, the Agricultural Marketing 

Service revises 7 CFR part 870 to read 

as follows: 

PART 870—ECONOMIC ADJUSTMENT 

ASSISTANCE FOR TEXTILE MILLS 

Sec. 

870.1 Applicability. 

870.2 Definitions. 

870.3 Upland Cotton Domestic User 

Agreement. 

870.5 Eligible upland cotton. 

870.7 Monthly Consumption Report. 

870.9 Payment. 

870.11 Capital expenditures. 

870.13 Records and inspection. 

870.15 Compliance, enforcement, and 

appeals. 

Authority: 7 U.S.C. 9037(c). 

§ 870.1 Applicability. 

(a) These regulations specify the terms 

and conditions under which the 

Commodity Credit Corporation (CCC) 

will make payments to eligible domestic 

users who have entered into an Upland 

Cotton Domestic User Agreement with 

the Agricultural Marketing Service to 

participate in the Economic Adjustment 

Assistance for Textile Mills Program. 

(b) The Agricultural Marketing 

Service will specify the forms to be used 

in administering the Economic 

Adjustment Assistance for Textile Mills 

program. 

§ 870.2 Definitions. 

For the purposes of the regulations in 

this part: 

Agreement effective date means the 

date on which the Upland Cotton 

Domestic User Agreement takes effect or 

becomes operative and enforceable. 

Agricultural Marketing Service (AMS) 

means the Agricultural Marketing 

Service of the United States Department 

of Agriculture, which administers the 

Economic Adjustment Assistance for 

Textile Mills Program. 

Bale weight means the auditable 

weight of a bale of cotton as determined 

on a scale certified as accurate by an 

independent party. 

Baled lint means ginned or processed 

cotton lint, including but not limited to 

lint classified by the Agricultural 

Marketing Service as Below Grade, 

compressed into a standard-sized and 

weighed pack. 

Capital expenditures means funds 

expended by a business for 

modernization or acquisition of 

depreciable fixed assets such as 

property, fixtures, or machinery that are 

directly attributable to the improvement 

of productivity or efficiency of the 

domestic user in the manufacturing of 

final products containing upland cotton. 

Capital expenditures do not include 

debt service payments, even if such debt 

service payments are for debt used to 

finance capital expenditures. 

Commodity Credit Corporation (CCC) 

means the wholly owned government 

corporation within the U.S. Department 

of Agriculture, whose funds, facilities, 

and authorities are used to implement 

specific activities as authorized by 

Congress. 

Date of consumption means the date 

the bagging and ties are removed from 

the bale, as determined by AMS. 

Director means the Director of the 

Warehouse and Commodity 

Management Division (WCMD) part of 

the Agricultural Marketing Service’s 

Fair Trade Practices Program. 

Domestic user means a person who is 

regularly engaged in the business of 

opening bales of eligible upland cotton 

in the United States for the purpose of 

spinning such cotton into yarn, 

papermaking, or production of nonwoven cotton products also in the 

United States. 

EAATM Program funds means funds 

provided by CCC as Economic 

Adjustment Assistance for Textile Mills 

under the terms of the Agreement. 

Economic Adjustment Assistance for 

Textile Mills (EAATM) means the 


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program authorized by Congress under 

which eligible domestic users of eligible 

upland cotton can apply for and receive 

financial assistance to offset capital 

expenditures related to investments in 

the United States for the manufacturing 

of products containing cotton, as 

provided in this part. 

Eligible domestic user means a 

domestic user in the United States, who 

has entered into an agreement with CCC 

to participate in the Economic 

Adjustment Assistance for Textile Mills 

program. 

Eligible upland cotton means baled 

upland cotton, regardless of origin, that 

is opened by an eligible domestic user 

and is baled lint, re-baled loose samples, 

suitable semi-processed motes, or reginned motes. 

Equipment means any machine used 

directly in the production of final cotton 

products in order to improve product 

quality, handling, and/or production 

efficiency. 

Facility or Plant means the 

structure(s) that houses the necessary 

equipment for consuming and 

manufacturing eligible upland cotton 

into the final cotton product. 

Final cotton product means product 

manufactured domestically that 

contains upland cotton. 

Linters means lint produced from the 

cottonseed crushing process. 

Marketing year means the one-year 

period starting on August 1 and ending 

on the following July 31. 

Monthly Consumption Report means 

Form CCC–1045–UP–2, the Monthly 

Consumption/Application for Payment 

Report, or other form as prescribed by 

AMS, submitted by the eligible 

domestic user for program payment 

purposes that contains documentation 

of inventory consumed, payment 

amounts, and a signed certification. 

Net weight means the bale weight less 

the weight of the bagging and ties. 

Operating expenses means funds 

expended by a business in its normal 

activities, including but not limited to 

rent, salaries, supplies, utilities, 

insurance, taxes, and maintenance. 

Operational control means the 

domestic user has plenary control over 

the facility during the term of the 

Upland Cotton Domestic User 

Agreement. 

Person means any individual, 

partnership, corporation, association, 

public or private organization or 

governmental entity, or combination 

thereof. 

Pills means waste from the mote 

cleaning process. 

Raw motes means lint cleaner waste 

resulting from the ginning process. 

Readily put into service means 

facilities, equipment, and/or plants put 

into service within 24 months of 

delivery. 

Re-baled loose samples means loose 

samples of upland cotton that have been 

removed from cotton bales for 

classification purposes and 

subsequently re-baled. 

Re-ginned mote bales means baled 

cotton fiber that has been removed from 

small, broken, or immature cotton seeds 

by re-ginning. 

Statement of eligible claim 

certification means an official document 

identifying the entity eligible to claim 

EAATM financial assistance for their 

use of suitable semi-processed motes or 

re-ginned mote bales. 

Suitable semi-processed motes means 

small, broken, or immature cotton seeds 

with attached cotton fibers that are of a 

quality suitable, without further 

processing, for spinning, papermaking, 

or production of non-woven fabric. 

Supplemental ledger means a lineitem record detailing qualifying capital 

expenditures that the eligible domestic 

user proposes to claim for program 

purposes. 

Upland cotton means a widely 

cultivated American cotton plant 

(Gossypium hirsutum) having short-tomedium staple fibers. 

Upland Cotton Domestic User 

Agreement (Form CCC–1045DOM or 

Agreement) means an agreement 

between CCC and an eligible domestic 

user regarding EAATM program 

participation. 

§ 870.3 Upland Cotton Domestic User 

Agreement. 

(a) To be eligible for payment under 

the Upland Cotton Economic 

Adjustment Assistance for Textile Mills 

program, domestic users must apply for 

program participation by submitting a 

signed original copy of the version of 

the Upland Cotton Domestic User 

Agreement, then in effect, for approval 

and execution by the Agricultural 

Marketing Service on behalf of CCC. 

Upon approval, AMS will return an 

executed copy to the domestic user. 

(b) The domestic user must stipulate 

in writing that the intended use of all 

funds received under the EAATM 

program will be for the sole purpose of 

capital expenditures directly 

attributable to the purpose of 

manufacturing upland cotton into final 

cotton products in the United States. 

(c) The domestic user must identify 

all plants and/or facilities to be 

included as a part of the Upland Cotton 

Domestic User Agreement. The 

domestic user must have operational 

control of these plants and/or facilities. 

(d) Payments will be made available 

to eligible domestic users who have 

entered into the version of an Upland 

Cotton Domestic User Agreement with 

CCC, then in effect, and who have 

complied with the program 

requirements of this part. 

(e) Upland Cotton Domestic User 

Agreement forms may be obtained from 

the Warehouse and Commodity 

Management Division website. 

§ 870.5 Eligible upland cotton. 

(a) Upland cotton eligible for payment 

under this part must be cotton that is 

consumed by the domestic user in the 

United States on or after the effective 

date of a signed Upland Cotton 

Domestic User Agreement, but not later 

than such date as may be set by the 

Agricultural Marketing Service. 

(b) The following are not eligible for 

payment under this part: 

(1) Cotton for which a payment under 

the provisions of this part has already 

been claimed or made available; 

(2) Raw (unprocessed) motes, pills, 

linters, or other derivatives of the lint 

cleaning process; or 

(3) Textile mill wastes. 

§ 870.7 Monthly Consumption Report. 

(a) Eligible domestic users making 

applications for payment under this part 

must submit a Monthly Consumption 

Report to AMS. The Monthly 

Consumption Report must include the 

following: 

(1) Documentation of eligible upland 

cotton inventory consumed by the 

eligible domestic user; 

(2) The eligible domestic user’s 

calculation of financial assistance 

claimed for payment under the program; 

and 

(3) The eligible domestic user’s signed 

certification as to the accuracy of the 

Monthly Consumption Report. 

(b) The eligible domestic user must 

report to AMS the activity pursuant to 

paragraph (a)(1) of this section for each 

month beginning on the effective date of 

the Agreement. 

(1) If the eligible domestic user’s 

facility is temporarily closed for any 

reason, the eligible domestic user must 

notify AMS and submit a Monthly 

Consumption Report prior to the end of 

the month following the plant closure. 

(2) Except as provided in paragraph 

(b)(1) of this section, the domestic user 

must submit Monthly Consumption 

Reports every month, even when no 

eligible upland cotton has been 

consumed. 

(c) Monthly Consumption Reports not 

submitted by the last business day of the 

following month will be considered late 

by AMS and are ineligible for payment. 


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Federal Register / Vol. 88, No. 209 / Tuesday, October 31, 2023 / Rules and Regulations 74335 

(d) AMS will not process for payment 

Monthly Consumption Reports or any 

other required documents from an 

eligible domestic user that contain 

errors or omissions. 

(e) Any transaction between two 

eligible domestic users involving the 

transfer of eligible upland cotton bales 

must be reported to AMS by both 

eligible domestic users with a statement 

of eligible claim certification as defined 

in § 870.2. 

§ 870.9 Payment. 

(a) The payment rate for purposes of 

calculating payments as specified in this 

part is 3 cents per pound. 

(b) The payment rate is the rate in 

effect on the date of consumption. 

(1) Baled eligible upland cotton 

consumption must take place in a 

building or collection of buildings 

where the cotton bale will be used in 

the continuous process of 

manufacturing the cotton into final 

cotton products in the United States, 

and as determined by AMS. Unbaled 

eligible upland cotton will be 

considered consumed by the domestic 

user on the date processed. 

(2) The quantity of eligible upland 

cotton with respect to which a payment 

is made available shall be determined 

based upon the net weight of each bale 

of eligible upland cotton. 

(c) Payments specified in this part 

will be determined by multiplying the 

payment rate by one of the following: 

(1) In the case of baled upland cotton, 

whether lint, loose samples, or reginned motes, but not semi-processed 

motes, the net weight of the cotton 

consumed; 

(2) In the case of unbaled re-ginned 

motes consumed, without re-baling, for 

an end use in a continuous 

manufacturing process, the weight of 

the re-ginned motes after final cleaning; 

or 

(3) In the case of suitable semiprocessed motes, 25 percent of the net 

weight of the semi-processed motes. 

(d) In all cases, the payment will be 

determined based on the amount of 

eligible upland cotton that an eligible 

domestic user consumed during the 

immediately preceding calendar month. 

(e) Payments specified in this part 

will be made available upon application 

for payment and submission of 

supporting documentation, as required 

by the provisions of this part. 

§ 870.11 Capital expenditures. 

(a) All payments to eligible domestic 

users of upland cotton under this part 

shall be used only for capital 

expenditures that acquire, construct, 

install, modernize, develop, convert, or 

expand land, plant, buildings, 

equipment, or machinery in the United 

States. Capital expenditures must be 

directly attributable to the purpose of 

manufacturing upland cotton into final 

cotton products in the United States and 

certified as such by the domestic user. 

Expenditures that are not directly 

associated with manufacturing of 

upland cotton into final cotton products 

in the United States are outside the 

purpose and scope of the Economic 

Adjustment Assistance for Textile Mills 

Program and are not eligible 

expenditures for funds under this part. 

(b) Operating expenses are not eligible 

for purposes of this part. 

(c) If AMS determines, after a review 

or audit of the eligible domestic user’s 

records, that economic adjustment 

assistance under this part was not used 

for the purposes specified in paragraph 

(a) of this section, the eligible domestic 

user shall be: 

(1) Liable to repay the assistance to 

CCC, plus interest, as determined by 

CCC; and 

(2) Ineligible to receive assistance 

under EAATM for a period of one year 

following AMS’s determination. 

(d) Any specific capital expenditure 

exceeding an amount, as specified in the 

version of the Upland Cotton Domestic 

User Agreement, then in effect, must be 

submitted for pre-approval. The request 

for pre-approval must include: 

(1) The description of the proposed 

expenditure specified for the applicable 

marketing year; 

(2) Itemized purchase order and/or 

invoice number, if applicable; 

(3) Documentation of scheduled 

purchase date(s), installation date, and 

location (which facility); and 

(4) Any additional information 

required by AMS. 

(e) The eligible domestic user must 

make capital expenditures equal to, or 

greater than, any amounts received as 

EAATM Program funds, within 18 

months following the end of the 

applicable marketing year. Equipment, 

facilities, and plants purchased with 

EAATM Program funds must be readily 

put into service as defined in § 870.2. 

The eligible domestic user must: 

(1) Make capital expenditures that 

exceed the amount paid to the eligible 

domestic user for any marketing year. 

EAATM Program funds will not carry 

over to the following marketing year 

without a written Funding Utilization 

Extension from AMS. 

(2) Request a Funding Utilization 

Extension for approval from AMS to be 

considered for any capital expenditure 

exceeding a value of $10 million on a 

single, allowable, fixed asset. 

(3) Request a Funding Utilization 

Extension at the time of a pre-approval 

for a single item expenditure pursuant 

to paragraph (d) of this section. 

(4) Applications for a Funding 

Utilization Extension Request must 

include, but are not limited to: 

(i) Detailed plans for the expense; 

(ii) Timeline of construction; 

(iii) Schedule of payments; 

(iv) Estimated date of when the 

capital expenditure will be operational; 

(v) Explanation of how the expense 

meets the criteria for allowable 

purposes; 

(vi) Justification for the extension 

request; and 

(vii) Any other information or 

supporting documentation required by 

AMS. 

(5) WCMD will consider Funding 

Utilization Extension requests based on 

allowable purposes. In any event, the 

maximum time extension for EAATM 

Program funds to be used for capital 

expenditures will be 36 months beyond 

the existing timeframe of 30 months 

(Marketing Year + 18 months), for a total 

of 66 months. 

(6) EAATM Program funds will be 

reconciled against the eligible 

expense(s) specified in the Funding 

Utilization Extension until the approved 

time extension has expired or funds are 

exhausted. 

(f) Fixed assets acquired and/or 

modernized with EAATM Program 

funds must be in operation within 24 

months after the date of purchase. If 

unforeseen difficulties prevent 

utilization within the 24-month period, 

written approval must be obtained from 

WCMD for an extension of time. 

(g) Direct or indirect transfer of 

EAATM Program funds to another entity 

is prohibited. In the event of a sale/ 

transfer of an eligible domestic user’s 

business or its assets, the eligible 

domestic user must sign a written 

verification certifying that no EAATM 

Program funds were transferred, either 

in cash or as an asset purchased 

exclusively to be transferred to the 

acquiring company. 

(h) Each eligible domestic user 

involved in an acquisition/merger/ 

transfer must notify AMS and provide 

AMS with an itemized ledger detailing 

specific equipment, building, facility, 

property, and/or plants bought with 

EAATM Program funds included with 

any acquisition/merger/transfer. In the 

event of an acquisition/merger/transfer 

and without extenuating circumstances, 

equipment, facilities, and/or plants 

purchased with EAATM Program funds 

by an eligible domestic user must be 

operational for a minimum of 36 months 

prior to its sale and cannot be purchased 


lotter on DSK11XQN23PROD with RULES1
74336 Federal Register / Vol. 88, No. 209 / Tuesday, October 31, 2023 / Rules and Regulations 

with EAATM Program funds again by 

another eligible domestic user. 

§ 870.13 Records and inspection. 

(a) Required records. The eligible 

domestic user shall maintain all records 

and reports relating to their Upland 

Cotton Domestic User Agreement for a 

period of three years following 

termination of the Agreement. At a 

minimum, records must include those 

listed in paragraphs (a)(1) through (6) of 

this section. 

(1) A monthly consumption record 

including a detailed list of bales 

consumed, showing the bale numbers, 

net weights, date received, date 

consumed, type of eligible upland 

cotton, and a facility identifier. The 

consumption record must be 

accompanied by source documents such 

as purchase orders and invoices to 

verify the information provided. 

(2) Documentation supporting the 

receiving of cotton, including a register 

of contracts, amendments, and 

cancellations. Records must show the 

number of bales received each month by 

type of cotton, supported by invoices or 

waybills and weight sheets 

documenting the net weight when 

received at the user’s facility. 

(3) Documentation tracing the 

consumed bale weight back to source 

documents showing the documented 

bale weight received at the user’s 

facility. 

(4) Documentation supporting the 

acquisition, consumption, and 

disposition of ineligible cotton and 

other textiles. 

(5) A bale inventory record that 

summarizes, at least monthly, the 

eligible domestic user’s beginning 

inventory, receipts, adjustments, 

consumption, and ending inventory. 

(6) Documentation of capital 

expenditures that are equal to or greater 

than payments received. 

(i) The eligible domestic user must 

record information about capital 

expenditures in a supplemental ledger 

as defined in § 870.2, including, but not 

limited to, detailed descriptions of each 

capital expenditure, acquisition date, 

date of payment, amount of payment, 

and proof of payment, serial number(s), 

invoice number, and location 

(applicable facility). 

(ii) Capital expenditures must be 

grouped by Marketing Year. 

(iii) Each line item must reflect only 

a single expense for an identifiable 

single expenditure. 

(b) Inspection of records. (1) Upon 

request from WCMD, the eligible 

domestic user must forward to WCMD 

copies of any and all records which 

support the domestic user’s claims for 

payment. 

(2) Eligible domestic users must make 

records available at all reasonable times 

for an audit or inspection by authorized 

representatives of AMS, the United 

States Department of Agriculture, and/ 

or any other governmental unit needing 

access for audit or inspection purposes. 

(3) Eligible domestic users shall 

permit, and assist without impediment, 

any AMS-authorized individual to 

inspect or audit, on any business day 

during the normal and customary hours 

of business, the books, papers, records, 

accounts, and other applicable 

documents relating to the Agreement. 

Failure to provide access or respond 

timely to requests for information and 

records will result in denial of benefits. 

§ 870.15 Compliance, enforcement, and 

appeals. 

(a) AMS will notify the appropriate 

investigating agencies of the United 

States and CCC may terminate the 

Agreement and demand a full refund of 

payments plus interest and suspend and 

debar the offending company from 

further government participation as 

deemed necessary to protect the 

interests of the government, if the 

eligible domestic user is suspected by 

AMS to have knowingly: 

(1) Adopted any scheme or device 

which violates the Agreement; 

(2) Made any fraudulent 

representation; or 

(3) Misrepresented any fact affecting a 

determination under the Agreement. 

(b) No Member or Delegate of 

Congress shall be admitted to any share 

or part of the Agreement or to any 

benefit to arise therefrom, except that 

this provision shall not be construed to 

extend to their interest in any 

incorporated company, if the Agreement 

is for the general benefit of such 

company, nor shall it be construed to 

extend to any benefit which may accrue 

to such official in their capacity as a 

party to an Agreement. 

(c) Eligible domestic users who 

dispute a WCMD program 

administration decision may request a 

review of the decision by the Director. 

(1) Requests for review must be in 

writing and contain the relevant facts 

upon which the review will be heard. 

Requests must be received by WCMD 

within 15 days from the date the eligible 

domestic user receives the disputed 

decision. 

(2) Requests must be directed to: 

Director, Warehouse and Commodity 

Management Division, Agricultural 

Marketing Service, U.S. Department of 

Agriculture, at EAATM.ELS@usda.gov. 

(d) 7 CFR 2.79(a)(23) authorizes the 

AMS Administrator to administer the 

EAATM program (7 U.S.C. 9037(c)). In 

light of the aforementioned 

redelegation, AMS is considered a 

successor ‘‘Agency’’ under 7 CFR 11.1, 

and decisions made under EAATM, if 

deemed adverse, are subject to NAD 

jurisdiction. Accordingly, appeals under 

this program shall be heard by the 

USDA National Appeals Division. 

(e) Eligible domestic users who 

dispute a review decision by the 

Director must appeal such decision to 

the USDA National Appeals Division 

pursuant to 7 U.S.C. 6912(e) and 7 CFR 

11. Such an appeal must be made 

within 30 days of receipt of a WCMD 

decision. 

(f) CCC may terminate the Upland 

Cotton Domestic User Agreement at any 

time. 

(g) When a new Agreement is 

executed for any reason, including but 

not limited to programmatic 

requirements, expiration of authorizing 

legislation, or exhaustion of funds, any 

previous Agreement between CCC and 

the eligible domestic user shall be null 

and void/terminated. 

(h) The Director may waive or modify 

deadlines and other program 

requirements in cases where timeliness 

or failure to meet such other 

requirements does not adversely affect 

the operation of the program. 

Erin Morris, 

Associate Administrator, Agricultural 

Marketing Service. 

[FR Doc. 2023–23727 Filed 10–30–23; 8:45 am] 

BILLING CODE 3410–02–P 

DEPARTMENT OF AGRICULTURE 

Animal and Plant Health Inspection 

Service 

9 CFR Part 11 

[Docket No. APHIS–2011–0009] 

RIN 0579–AE76 

Horse Protection; Licensing of 

Designated Qualified Persons and 

Other Amendments; Withdrawal 

AGENCY: Animal and Plant Health 

Inspection Service, USDA. 

ACTION: Final rule; withdrawal. 

SUMMARY: The Animal and Plant Health 

Inspection Service (APHIS) of the 

United States Department of Agriculture 

(USDA) is withdrawing a final rule that 

was filed for public inspection by the 

Office of the Federal Register on January 

19, 2017, in advance of publication, 


lotter on DSK11XQN23PROD with RULES1