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]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-10962]
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Federal Register / Vol. 79, No. 93 / Wednesday, May 14, 2014 / Rules
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 28
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 firstname.lastname@example.org.
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
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
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
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 www.regulations.gov.
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
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]
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