[Federal Register Volume 74, Number 106 (Thursday, June 4, 2009)]
[Rules and Regulations]
[Pages 26771-26774]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-13148]



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Rules and Regulations
                                                Federal Register
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having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 
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Federal Register / Vol. 74, No. 106 / Thursday, June 4, 2009 / Rules 
and Regulations

[[Page 26771]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 28

[Doc. <greek-i> AMS-CN-09-0011; CN-09-001]


User Fees for 2009 Crop Cotton Classification Services to Growers

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Agricultural Marketing Service (AMS) will raise user fees 
for cotton producers for 2009 crop cotton classification services under 
the Cotton Statistics and Estimates Act. These user fees also are 
authorized under the Cotton Standards Act of 1923. The 2008 user fee 
for this classification service was $2.00 per bale. This rule will 
raise the fee for the 2009 crop to $2.20 per bale. The proposed fee and 
the existing reserve are sufficient to cover the costs of providing 
classification services, including costs for administration and 
supervision.

DATES: Effective Date: Effective July 1, 2009.

FOR FURTHER INFORMATION CONTACT: Darryl Earnest, Deputy Administrator, 
Cotton and Tobacco Program, AMS, USDA, Room 2639-S, STOP 0224, 1400 
Independence Avenue, SW., Washington, DC 20250-0224. Telephone (202) 
720-2145, facsimile (202) 690-1718, or e-mail <a href="/cdn-cgi/l/email-protection#c1a5a0b3b3b8adefa4a0b3afa4b2b581b4b2a5a0efa6aeb7"><span class="__cf_email__" data-cfemail="1175706363687d3f7470637f74626551646275703f767e67">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: A proposed rule detailing the revisions was 
published in the Federal Register on March 26, 2009 (74 FR 13128). A 
15-day comment period was provided for interested persons to respond to 
the proposed rule. Two comments were received from national cotton 
industry organizations in support of the service and the need for the 
fee increase.

Executive Order 12866

    This rule has been determined to be not significant for purposes of 
Executive Order 12866; and, therefore has not been reviewed by the 
Office of Management and Budget (OMB).

Executive Order 12988

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. It is not intended to have retroactive effect. 
This rule will not preempt any State or local laws, regulations, or 
policies unless they present an irreconcilable conflict with this rule. 
There are no administrative procedures that must be exhausted prior to 
any judicial challenge to the provisions of this rule.

Regulatory Flexibility Act

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612) AMS has considered the economic impact 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 businesses.
    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 
disproportionately burdened. There are an estimated 25,000 cotton 
growers in the U.S. who voluntarily use the AMS cotton classing 
services annually, and the majority of these cotton growers are small 
businesses under the criteria established by the Small Business 
Administration (13 CFR 121.201). The increase above the 2008 crop level 
as stated will not significantly affect small businesses as defined in 
the RFA because:
    (1) The fee represents a very small portion of the cost-per-unit 
currently borne by those entities utilizing the services. (The 2008 
user fee for classification services was $2.00 per bale; the fee for 
the 2009 crop would be increased to $2.20 per bale; the 2009 crop is 
estimated at 14,500,000 bales).
    (2) The fee for services will not affect competition in the 
marketplace; and
    (3) The use of classification services is voluntary. For the 2008 
crop, 12,740,000 bales were produced; and, almost all of these bales 
were voluntarily submitted by growers for the classification service.
    (4) Based on the average price paid to growers for cotton from the 
2007 crop of 53.50 cents per pound, 500 pound bales of cotton are worth 
an average of $267.50 each. The proposed user fee increase for 
classification services, $.20 per bale, is less than one percent of the 
value of an average bale of cotton.

Paperwork Reduction Act

    In compliance with OMB regulations (5 CFR part 1320), which 
implement the Paperwork Reduction Act (PRA) (44 U.S.C. 3501-3520), the 
information collection requirements contained in the provisions to be 
amended by this proposed rule have been previously approved by OMB and 
were assigned OMB control number 0581-AC43.

Fees for Classification Under the Cotton Statistics and Estimates Act 
of 1927

    This final rule will establish the user fee charged to producers 
for High Volume Instrument (HVI) classification at $2.20 per bale for 
the 2009 cotton crop. The 2009 user fee charged to cotton producers for 
HVI classification was calculated using new methodology, as was 
authorized by section 14201 of the Food, Conservation, and Energy Act 
of 2008 (Pub. L. 110-234) (2008 Farm Bill). In previous years, the fee 
was determined using a user-fee formula mandated in the Uniform Cotton 
Classing Fees Act of 1987 (Pub. L. 100-108, 101 Stat. 728) (1987 Act), 
as amended. This formula used the previous year's base fee that was 
adjusted for inflation and economies of size (1 percent decrease/
increase for every 100,000 bales above/below 12.5 million bales with 
maximum adjustment being <plus-minus>15 percent). The user fee was then 
further adjusted to comply with operating reserve constraints (between 
10 and 25 percent of projected operating costs) specified by the 1987 
Act.
    The 2008 user fee charged to cotton producers for High Volume 
Instrument (HVI) classification services under the Cotton Statistics 
and Estimates Act of 1927 (7 U.S.C. 471-476) was $2.00 per bale during 
the 2008 harvest season as determined by using the formula provided in 
the 1987 Act. The fee covered salaries, costs of equipment and 
supplies, and other overhead costs, including costs for administration 
and supervision. Also, the fee structure for the 2007 crop year was 
incorporated under the authority of the Cotton Standards Act of 1923 (7 
U.S.C. 51-65),

[[Page 26772]]

by an interim final rule effective October 1, 2007 (72 FR 56242).
    Section 14201 of the 2008 Farm Bill provides that: (1) The 
Secretary shall make available cotton classification services to 
producers of cotton, and provide for the collection of classification 
fees from participating producers or agents that voluntarily agree to 
collect and remit the fees on behalf of the producers; (2) 
classification fees collected and the proceeds from the sales of 
samples submitted for classification shall, to the extent practicable, 
be used to pay the cost of the services provided, including 
administrative and supervisory costs; (3) the Secretary shall announce 
a uniform classification fee and any applicable surcharge for 
classification services not later than June 1 of the year in which the 
fee applies; and (4) in establishing the amount of fees under this 
section, the Secretary shall consult with representatives of the United 
States cotton industry. At pages 313-314, the Joint Explanatory 
Statement of the committee of conference for section 14201 stated the 
expectation that the cotton classification fee would be established in 
the same manner as was applied during the 1992 through 2007 fiscal 
years. The classification fee should continue to be a basic, uniform 
fee per bale fee as determined necessary to maintain cost-effective 
cotton classification service. Further, in consulting with the cotton 
industry, the Secretary should demonstrate the level of fees necessary 
to maintain effective cotton classification services and provide the 
Department of Agriculture with an adequate operating reserve, while 
also working to limit adjustments in the year-to-year fee.
    Under the provisions of section 14201, a user fee (dollar per bale 
classed) is established that, when combined with other sources of 
revenue, will result in projected revenues sufficient to reasonably 
cover budgeted costs--adjusted for inflation--and allow for adequate 
operating reserves to be maintained. Costs considered in this method 
include salaries, costs of equipment and supplies, and other overhead 
costs, such as facility costs and costs for administration and 
supervision. In addition to covering expected costs, the user fee is 
set such that projected revenues will generate an operating reserve 
adequate to effectively manage uncertainties related to crop size and 
cash-flow timing while meeting minimum reserve requirements set by the 
Agricultural Marketing Service, which require maintenance of a reserve 
fund amount equal to four months of projected operating costs.
    Extensive consultations regarding the establishment of the 
classification fee with U.S. cotton industry representatives were held 
during the period from September 2008 through January 2009 during 
numerous publicly held meetings. Representatives of all segments of the 
cotton industry, including producers, ginners, bale storage facility 
operators, merchants, cooperatives, and textile manufacturers were 
addressed in various industry-sponsored forums.
    The user fee established to be charged cotton producers for High 
Volume Instrument (HVI) classification in 2009 is $2.20 per bale. This 
fee is based on the pre-season projection that 14.5 million bales will 
be classed by the United States Department of Agriculture during the 
2009 crop year.
    Accordingly Sec.  28.909, paragraph (b) will reflect the increase 
of the HVI classification fee to $2.20 per bale.
    A 5 cent per bale discount will continue to be applied to voluntary 
centralized billing and collecting agents as specified in Sec.  
28.909(c).
    Growers or their designated agents receiving classification data 
will continue to incur no additional fees if classification data is 
requested only once. The fee for each additional retrieval of 
classification data in Sec.  28.910 will remain at 5 cents per bale. 
The fee in Sec.  28.910 (b) for an owner receiving classification data 
from the National database will remain at 5 cents per bale, and the 
minimum charge of $5.00 for services provided per monthly billing 
period will remain the same. The provisions of Sec.  28.910 (c) 
concerning the fee for new classification memoranda issued from the 
National database for the business convenience of an owner without 
reclassification of the cotton will remain the same at 15 cents per 
bale or a minimum of $5.00 per sheet.
    The fee for review classification in Sec.  28.911 will increase to 
$2.20 per bale.
    The fee for returning samples after classification in Sec.  28.911 
will remain at 50 cents per sample.
    In addition to raising user fees for the 2009 crop cotton 
classification services to $2.20 per bale, this rule finalizes the 
provisions of the interim final rule published in the Federal Register 
at 72FR56242 on October 3, 2007.
    Pursuant to 5 U.S.C. 553, good cause exists for not postponing the 
effective date of this rule until 30 days after publication in the 
Federal Register because this rule maintains uniform user fees for 2009 
crop cotton classification services as mandated by the Cotton 
Statistics and Estimates Act. The earliest harvest and classification 
of 2009 cotton will occur during July, and the law mandates that the 
user fee be established sufficiently early so that a uniform fee is 
charged for the classification of the entire 2009 cotton crop, which 
will extend from July 2009 to May 2010. Only two comments were received 
during the public comment period provided in the proposal, and both 
were supportive of the need for the user fee increase.

List of Subjects in 7 CFR Part 28

    Administrative practice and procedure, Cotton, Cotton samples, 
Grades, Market news, Reporting and recordkeeping requirements, 
Standards, Staples, Testing, Warehouses.

PART 28--[AMENDED]

0
For the reasons set forth in the preamble, 7 CFR part 28 is amended by 
revising subpart D to read as follows:

Subpart D--Cotton Classification and Market News Service for Producers

Sec.

Definitions

Administration

28.902 Director.

Classification and Market News Services

28.903 Classification of samples.
28.904 Market news.

Sampling

28.906 Sampling arrangements.
28.907 Responsibilities of licensed gins or warehouses.
28.908 Samples.
28.909 Costs.

Classification

28.910 Classification of samples and issuance of classification 
data.
28.911 Review classification.

Limitations of Services

28.917 Limitations of Services.

Subpart D--Cotton Classification and Market News Service for 
Producers

    Authority: 7 U.S.C. 51-65; 7 U.S.C. 471-476.

Definitions


Sec.  28.901  Definitions.

    When used in the regulations in this subpart:
    (a) Act means the United States Cotton Standards Act of 1923, as 
amended (7 U.S.C. 51-65) and the Cotton Statistics and Estimates Act of 
1927 (7 U.S.C. 471-476), unless otherwise noted.

[[Page 26773]]

    (b) Service means the Agricultural Marketing Service of the United 
States Department of Agriculture.
    (c) Administrator means the Administrator of the Agricultural 
Marketing Service, or any officer or employee of the Service to whom 
authority has heretofore been delegated, or to whom authority may 
hereafter be delegated to act for the Administrator.
    (d) Division means the Cotton Division of the Agricultural 
Marketing Service.
    (e) Director means the Director of the Cotton Division, or any 
officer or employee of the Division to whom authority has heretofore 
been delegated or to whom authority may hereafter be delegated, to act 
for the Director.
    (f) Producer means any individual, partnership, corporation, 
association, trust, estate, or other legal entity, a State or political 
subdivision thereof, or any agency of such State or political 
subdivision producing American Upland or American Pima cotton in the 
capacity of landowner, landlord, tenant, or sharecropper.

Administration


Sec.  28.902  Director.

    The Director shall perform for and under the supervision of the 
Administrator, such duties as the Administrator may require in 
enforcing the regulations in this subpart.

Classification and Market News Services


Sec.  28.903  Classification of samples.

    The Director, or an authorized representative, upon the receipt of 
a producer's cotton sample which complies with the regulations in this 
subpart shall, as hereinafter provided, furnish to such producer or to 
an agent designated by the producer the classification in accordance 
with the official cotton standards of the United States.


Sec.  28.904  Market news.

    The Director shall cause to be distributed to producers of cotton 
and to others on request, timely information on prices for various 
qualities of cotton.

Sampling


Sec.  28.906  Sampling arrangements.

    (a) Cotton must be sampled by a gin or warehouse that holds a valid 
license to sample cotton issued pursuant to Sec. Sec.  28.20 through 
28.22.
    (b) The Director, or an authorized representative may direct that 
sampling be performed by employees of the Department of Agriculture for 
the purpose of appraising the sampling procedures at cotton gins or 
warehouses, or for the purpose of providing service to producers in 
special cases where a licensed gin or warehouse is not available.


Sec.  28.907  Responsibilities of licensed gins or warehouses.

    Each licensee shall be primarily responsible for drawing, 
identifying, handling, and shipping samples of cotton in accordance 
with this subpart and with instructions furnished by the Director or an 
authorized representative from time to time.


Sec.  28.908  Samples.

    (a) Only one sample to be submitted. Only one sample from each bale 
of eligible cotton shall be submitted for classification under this 
subpart. This does not prohibit the submission of an additional sample 
from a bale for review classification if the producer so desires.
    (b) Drawing of samples manual. (1) Each cut sample shall be drawn 
from the bale after it is tied out following the ginning process, and 
shall be approximately 6 ounces in weight, not less than 3 ounces of 
which are to be drawn from each side of the bale: Provided, That each 
sample from a bale of American Pima cotton shall be approximately 10 
ounces in weight, not less than 5 ounces of which are to be drawn from 
each side of the bale.
    (2) Where it is necessary to draw two sets of samples, a single cut 
should be made in each side of the bale, and the portion of cotton 
removed from each cut should be broken in half across the layers to 
provide two complete samples. In those cases where this method would 
result in samples of insufficient length, it will be acceptable to 
split the sample lengthwise along the layers, provided the outside 
portion from each side is submitted for the official classification.
    (c) Mechanical sampling. Samples may be drawn in gins equipped with 
mechanical samplers approved by the Division and operated according to 
sampling instructions furnished by the Director or an authorized 
representative. Such samples shall not be less than 6 ounces in weight.
    (d) Samples must be representative. Each sample must be 
representative of the bale from which drawn.
    (e) Handling samples. Samples shall not be dressed or trimmed and 
shall be carefully handled in such manner as not to cause loss of leaf, 
sand, or other material, or otherwise change their representative 
character. Samples shall be handled only by employees of the licensee 
prior to shipment or delivery to the cotton classing office of the 
Division.
    (f) Identifying and shipping samples. Each sample shall be 
identified with a tag, supplied or approved by the Division, bearing 
the gin or warehouse number of the bale from which the sample was drawn 
and the name and address of the producer of the bale. The tag shall be 
placed between the two halves of the sample, the sample tightly rolled 
and enclosed in a package or bag for shipment. Each package or bag 
shall be labeled or marked with the name and address of the licensed 
gin or warehouse. The packages shall be shipped or delivered direct to 
the cotton classing office serving the territory in which the cotton is 
ginned. Samples that were drawn by a mechanical sampler at the gin may 
be transported with the bales to the warehouse and then shipped or 
delivered direct to the classing office by the warehouse.
    (g) Request for classification. Samples received from a licensed 
gin or warehouse with the identification tag required in Sec.  
28.908(f) shall constitute a request for classification service by the 
producer.


Sec.  28.909  Costs.

    (a) Costs incident to sampling, tagging, and identification of 
samples and transporting samples to points of shipment shall be assumed 
by the producer, but tags and containers for the shipment of samples 
and shipping charges via U.S. Postal Service or duly authorized common 
carrier will be furnished by the service. After classification the 
samples shall become the property of the Government. The proceeds of 
the sale of cotton samples shall be used to defray the costs of 
providing the services under this subpart.
    (b) The cost of High Volume Instrument (HVI) cotton classification 
service to producers is $2.20 per bale.
    (c) The Division will periodically bill producers or the voluntary 
agents designated by producers for the cost of classification. A 
discount of 5 cents per sample will be granted for services provide 
under this section when billing is made to voluntary agents.

Classification


Sec.  28.910  Classification of samples and issuance of classification 
data.

    (a)(1) The samples submitted as provided in the subpart shall be 
classified by employees of the Division and classification memoranda 
showing the official quality determination of each sample according to 
the official cotton standards of the United States shall be issued by 
any one of the following methods at no additional charge:

[[Page 26774]]

    (i) Computer diskettes,
    (ii) Computer tapes, or
    (iii) Telecommunications, with all long distance telephone line 
charges paid by the receiver of data.
    (2) When an additional copy of the classification memorandum is 
issued by any method listed in paragraph (a)(1) of this section, there 
will be a charge of five cents per bale. If provided as an additional 
method of data transfer, the minimum fee for each tape or diskette 
issued shall be $10.00.
    (b) Owners of cotton, other than producers, may receive 
classification data showing the official quality determination of each 
sample by means of telecommunications from a central database to be 
maintained by the Division. The fee for this service shall be five 
cents per bale, with all long distance telephone line charges paid by 
the receiver of data. The minimum charge assessed for services obtained 
from the central database be $5.00 per monthly billing period.
    (c) Upon request of an owner of cotton for which classification 
memoranda have been issued under the subpart, a new memorandum shall be 
issued for the business convenience of such owner without the 
reclassification of the cotton. Such rewritten memorandum shall bear 
the date of its issuance and the date or inclusive dates of the 
original classification. The fee for a new memorandum shall be 15 cents 
per bale or a minimum of $5.00 per sheet.


Sec.  28.911  Review classification.

    (a) A producer may request one review classification for each bale 
of eligible cotton. The fee for review classification is $2.20 per 
bale.
    (b) Samples for review classification must be drawn by gins or 
warehouses licensed pursuant to Sec. Sec.  28.20 through 28.22, or by 
employees of the United States Department of Agriculture. Each sample 
for review classification shall be taken, handled, and submitted 
according to Sec.  28.908 and to supplemental instructions issued by 
the Director or an authorized representative of the Director. Costs 
incident to sampling, tagging, identification, containers, and shipment 
for samples for review classification shall be assumed by the producer. 
After classification, the samples shall become the property of the 
Government unless the producer requests the return of the samples. The 
proceeds from the sale of samples that become Government property shall 
be used to defray the costs of providing the services under this 
subpart. Producers who request return of their samples after classing 
will pay a fee of 50 cents per sample in addition to the fee 
established above in this section.

Limitations of Services


Sec.  28.917  Limitations of Services.

    The Director, or an authorized representative, may suspend, 
terminate, or withhold cotton classing and market news services to any 
producer upon any failure of the producer to comply with the act or 
these regulations. Failure to remit fees for classification services 
shall result in loss of service.

    Dated: June 2, 2009.
David R. Shipman,
Acting Administrator.
[FR Doc. E9-13148 Filed 6-2-09; 4:15 pm]
BILLING CODE P


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