User Fees for 2014 Crop Cotton Classification Services to Growers, 27479-27480 [2014-10962]


[Federal Register Volume 79, Number 93 (Wednesday, May 14, 2014)]
[Rules and Regulations]
[Pages 27479-27480]
From the Federal Register Online via the Government Printing Office []
[FR Doc No: 2014-10962]

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Federal Register / Vol. 79, No. 93 / Wednesday, May 14, 2014 / Rules 
and Regulations

[[Page 27479]]


Agricultural Marketing Service

7 CFR Part 28

RIN 0581-AD35

User Fees for 2014 Crop Cotton Classification Services to Growers

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.


SUMMARY: The Agricultural Marketing Service (AMS) will maintain user 
fees for 2014 crop cotton classification services at $2.20 per bale--
the same level as in 2013. Revenues resulting from this cotton classing 
fee and existing reserves are sufficient to cover the costs of 
providing classification services for the 2014 crop, including costs 
for administration and supervision.

DATES: Effective Date: July 1, 2014.

FOR FURTHER INFORMATION CONTACT: Darryl Earnest, Deputy Administrator, 
Cotton & Tobacco Program, AMS, USDA, 3275 Appling Road, Room 11, 
Memphis, TN 38133. Telephone (901) 384-3060, facsimile (901) 384-3021, 
or email


Executive Order 12866 and Executive Order 13563

    Executive Orders 12866 and 13563 direct agencies to access all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health, and safety effects, distributive impacts and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, reducing costs, harmonizing rules, and promoting flexibility. 
This action has been designated as a ``non-significant regulatory 
action'' under Sec.  3(f) of Executive Order 12866 and therefore has 
not been reviewed by the Office of Management and Budget (OMB).

Executive Order 13175

    This action has been reviewed in accordance with the requirements 
of Executive Order 13175, Consultation and Coordination with Indian 
Tribal Governments. The review reveals that this regulation would not 
have substantial and direct effects on Tribal governments and would not 
have significant Tribal implications.

Executive Order 12988

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. It is not intended to have retroactive effect. 
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 20,000 cotton 
growers in the U.S. who voluntarily use the AMS cotton classing 
services annually, and the majority of these cotton growers are small 
business entities under the criteria established by the Small Business 
Administration (13 CFR 121.201). Small business entities that are 
growers in the U.S. cotton industry are defined as having annual 
receipts less than $750 thousand. Maintaining the user fee at the 2013 
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. (According to 
USDA's Economic Research Service, the U.S. average total cost of 
production in 2012 was $808 per acre. The user fee for classification 
services of $2.20 per bale represents less the one third percent of 
this average U.S. per-bale cost of production.);
    (2) The fee for services will not affect competition in the 
    (3) The use of classification services is voluntary. For the 2013 
crop, approximately 12,540,000 bales were produced; and, almost all of 
these bales were voluntarily submitted by growers for the 
classification service; and
    (4) Based on the average price paid to growers for cotton from the 
2013 crop of 76.26 cents per pound, 500 pound bales of cotton are worth 
an average of $381.30 each. The user fee for classification services, 
$2.20 per bale, is approximately one half 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), the 
information collection requirements contained in the provisions to be 
amended by this rule have been previously approved by OMB and were 
assigned OMB control number 0581-0008, Cotton Classing, Testing, And 

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

    This final rule establishes a 2014 user fee of $2.20 per bale 
charged to producers for cotton classification--the same level as the 
2013 user fee. The 2014 user fee was set in accordance to requirements 
in the Cotton Statistics and Estimates Act as amended by the provisions 
in the 2008 Farm Bill [Food, Conservation, and Energy Act of 2008 (Sec. 
14201 3a)]. Amendments based on 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

[[Page 27480]]

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. Specifically, it 
states that the classification fee should continue to be a basic, 
uniform fee per bale 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 the Cotton Statistics and Estimates Act as 
amended by the section 14201 of the 2008 Farm Bill, a user fee (dollar 
amount per bale classed) is established for the 2014 cotton crop 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. Furthermore, 
the operating reserve is expected to meet minimum reserve requirements 
set by the Agricultural Marketing Service, which require maintenance of 
a reserve fund amount equal to at least four months of projected 
operating costs.
    The user fee charged cotton producers for cotton classification in 
2014 is $2.20 per bale, which is the same fee charged for the 2013 
crop. This fee is based on the preseason projection that 13,400,000 
bales will be classed by the United States Department of Agriculture 
during the 2014 crop year.
    Accordingly, Sec.  28.909, paragraph (b) reflects the continuation 
of the cotton classification fee at $2.20 per bale.
    As provided for in the 1987 Act, a 5 cent per bale discount 
continues 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 
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 remains at 5 cents per bale. The 
fee in Sec.  28.910 (b) for an owner receiving classification data from 
the National Database remains at 5 cents per bale, and the minimum 
charge of $5.00 for services provided per monthly billing period 
remains 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 remains the same at 15 cents per bale or a minimum of $5.00 per 
    The fee for review classification in Sec.  28.911 is maintained at 
$2.20 per bale.
    The fee for returning samples after classification in Sec.  28.911 
remains at 50 cents per sample.

Summary of Comments

    A proposed rule was published in the Federal Register on April 1, 
2014, with a comment period of April 1, 2014 through April 16, 2014 (79 
FR 18211). AMS received two comments. One comment was from a national 
trade organization that represents approximately 80 percent of the US 
cotton industry, including cotton producers, ginners, warehousemen, 
merchants, cooperatives, cottonseed processors, and textile 
manufacturers from Virginia to California. The other comment was from a 
national trade organization comprised of eight state and regional 
membership organizations that represent approximately 680 individual 
cotton ginning operations in 17 cotton-producing states. Comments from 
both national trade organizations expressed support for the decision to 
maintain the fee at the level established for the 2013 crop. Comments 
may be viewed at

List of Subjects in 7 CFR Part 28

    Administrative practice and procedure, Cotton, Reporting and record 
keeping requirements, Warehouses.

    For the reasons set forth in the preamble, 7 CFR part 28 is amended 
as follows:

PART 28--[Amended]

1. The authority citation for 7 CFR part 28, Subpart D, continues to 
read as follows:

    Authority:  7 U.S.C. 471-476.
2. In Sec.  28.909, paragraph (b) is revised to read as follows:

Sec.  28.909  Costs.

* * * * *
    (b) The cost of High Volume Instrument (HVI) cotton classification 
service to producers is $2.20 per bale.
* * * * *

3. In Sec.  28.911, the last sentence of paragraph (a) is revised to 
read as follows:

Sec.  28.911  Review classification.

    (a) * * * The fee for review classification is $2.20 per bale.
* * * * *

    Dated: May 7, 2014.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2014-10962 Filed 5-13-14; 8:45 am]