Cotton Research and Promotion Program: Determination of Sign-up Eligibility, and Procedure for the Conduct of a Sign-up Period for Determination of Whether to Conduct a Referendum Regarding the 1990 Amendments to the Cotton Research and Promotion Act

DEPARTMENT OF AGRICULTURE

7 CFR Part 1205

[CN-96-008]

Cotton Research and Promotion Program: Determination of Sign-up

Eligibility, and Procedure for the Conduct of a Sign-up Period for

Determination of Whether to Conduct a Referendum Regarding the 1990

Amendments to the Cotton Research and Promotion Act

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule establishes procedures for the conduct of a

sign-up period during which eligible cotton producers and importers

would be offered the opportunity to request a continuance referendum on

the 1991 amendments to the Cotton Research and Promotion Order (Order).

Producers would be provided the opportunity to sign-up to request a

referendum in person at the Farm Services Agency (FSA) office that

serves the county where their farm is located. All known and eligible

importers would be mailed information about the sign-up period, along

with a written request form that those persons who favor the conduct of

a continuance referendum may complete and return to USDA.

DATES: Comments must be received by December 23, 1996.

ADDRESSES: Comments may be mailed to USDA, AMS, Cotton Division, Stop

0224, 1400 Independence Avenue S.W., Washington, D.C. 20250-0224.

Comments will be made available for public inspection from 8:00 a.m. to

4:00 p.m., Monday through Friday, at this address.

FOR FURTHER INFORMATION CONTACT: Craig Shackelford, Chief, Cotton

Research and Promotion Staff, telephone number (202) 720-2259,

facsimile (202) 690-1718.

SUPPLEMENTARY INFORMATION:

Regulatory Impact Analysis

Executive Orders 12866 and 12988; the Regulatory Flexibility Act and

the Paperwork Reduction Act

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).

This rule has been reviewed under Executive Order 12988, Civil

Justice Reform. It is not intended to have retroactive effect. This

rule would not preempt state or local laws, regulations, or policies,

unless they present an irreconcilable conflict with this rule.

The Act provides that administrative proceedings must be exhausted

before parties may file suit in court. Under Section 12 of the Act, any

person subject to an order may file with the Secretary a petition

stating that the order, any provision of the order, or any obligation

imposed in connection with the order, is not in accordance with laws,

and requesting a modification of the order or an exemption therefrom.

Such persons are given the opportunity for a hearing after which the

Secretary shall issue a ruling on the petition. The Act provides that

the District Court of the United States in any district where the

petitioner resides, or where the petitioner's principal place of

business is located, has jurisdiction to review the Secretary's ruling,

provided that the petitioner files a complaint for that purpose within

20 days from the date of the issuance of the Secretary's ruling.

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Pursuant to requirements set forth in the Regulatory Flexibility

Act (RFA) [5 U.S.C. 601 et seq.], the Administrator, Agricultural

Marketing Service (AMS), has considered the economic effect of this

action on small entities and has determined that its implementation

will not have a significant economic impact on a substantial number of

small businesses.

The majority of producers and importers subject to the Order are

small businesses under the criteria established by the Small Business

Administration.

Only those eligible persons who are in favor of conducting a

referendum would need to participate in the sign-up period. Of the

46,220 valid ballots received in the 1991 referendum, 27,879, or 60

percent, favored the amendments to the Order, and 18,341, or 40

percent, opposed the amendments to the Order. This proposed rule will

provide to those persons who are against the continuance of the Order

amendments an opportunity to request a continuance referendum.

The eligibility and participation requirements set forth in this

proposed rule are substantially the same as the rules that established

the eligibility and participation requirements for the 1991 referendum.

These proposed sign-up procedures would not impose a substantial

burden or have a significant impact on persons subject to the Order,

because participation is not mandatory, not all persons subject to the

Order are expected to participate, and USDA will determine producer and

importer eligibility.

In compliance with OMB regulations [5 CFR Part 1320], which

implement the Paperwork Reduction Act (PRA) [44 U.S.C. 3501 et seq.],

the information collection requirements contained in 7 CFR 1205 have

been previously approved by OMB and were assigned control number 0581-

0093.

A 15-day comment period is determined to be appropriate because

these proposed eligibility and participation requirements are

substantially the same as the eligibility and participation that were

used in previous referenda, and participation is voluntary.

Background

Following the July 1991 referendum, AMS implemented amendments to

the Order. These amendments provided for: (1) Importer representation

on the Cotton Board by an appropriate number of persons, to be

determined by the Secretary, who import cotton or cotton products into

the U.S., and whom the Secretary selects from nominations submitted by

importer organizations certified by the Secretary; (2) assessments

levied on imported cotton and cotton products at a rate determined in

the same manner as for U.S. cotton; (3) increasing the amount the

Secretary can be reimbursed for the conduct of a referendum from

$200,000 to $300,000; (4) reimbursing government agencies that assist

in administering the collection of assessments on imported cotton and

cotton products; and (5) terminating the right of producers to demand a

refund of assessments.

On October 8, 1996, in accordance with the Act, USDA issued a

determination, (61 FR 52772), based on a review report of the Cotton

Research and Promotion Program, not to conduct a referendum regarding

the 1991 amendments to the Order. Because the review report noted that

certain program participants were in favor of conducting a referendum,

USDA is proposing to provide an opportunity for all eligible persons to

request the conduct of a continuance referendum on the 1991 amendments

by making such a request during a sign-up period.

The sign-up period would be provided for all eligible producers and

importers in accordance with section 8(c)2 of the Act. Cotton producers

would be provided the opportunity to sign-up to request a continuance

referendum in person at the FSA office that serves the county where

their farm is located.

USDA would mail sign-up information, including a written request

form, to all known, eligible, cotton importers. Importers who favor the

conduct of a continuance referendum would return their signed request

forms to USDA, FSA, DAPDFO, STOP 0539, Attention: William A. Brown, Box

2415, Room 3096-s, 1400 Independence Ave. S.W., Washington, D.C.,

20250-0539.

Importers who do not receive a request form in the mail by February

1, 1997, and who meet the eligibility requirements to participate in

the sign-up, may submit a written, signed, request for a continuance

referendum. Such request must be accompanied by a copy of a U.S.

Customs form 7501 showing payment of a cotton assessment for calendar

year 1995. Requests and supporting documentation should be mailed to

USDA, FSA, DAPDFO, STOP 0539, Attention: William A. Brown, Box 2415,

Room 3096-s, 1400 Independence Ave. S.W., Washington, D.C. 20250-0539.

The sign-up period would be from January 15, 1997, through April

14, 1997. The October 8, 1996, Federal Register notice (61 FR 52773)

stated that the sign-up period would be from November 25, 1996, through

February 22, 1997. USDA has changed the sign- up to January 15, 1997,

through April 14, 1997, to allow USDA to better prepare for the sign-up

period.

Section 8(c)2 of the Act requires that if the Secretary determines,

based on the results of the sign-up, that at least 10 percent (4,622)

or more of the number of cotton producers and importers that voted in

the 1991 referendum request a continuance referendum on the 1991

amendments, such a referendum will be held within 12 months after the

end of the sign-up period. In counting such requests, however, not more

than 20 percent may be from producers from any one state or from

importers of cotton.

For example, when counting the requests, AMS Cotton Division would

determine the total number of valid requests from all cotton-producing

states and from importers. No more than 20 percent of the total

requests will be counted from any one state or from importers toward

reaching the 10 percent or 4,622 total signatures required to call for

a referendum.

If the Secretary determines that fewer than 10 percent of the

number of producers and importers who voted in the most recent

referendum do not favor a continuance referendum, no referendum will be

held.

This proposed rule would add a new subpart to establish procedures

for use during the sign-up period, and these procedures would be in

effect only for the duration of the sign- up period.

List of Subjects in 7 CFR Part 1205

Advertising, Agricultural research, Cotton, Marketing agreements,

Reporting and recordkeeping requirements.

For the reasons set forth in the preamble, it is proposed that

Title 7, chapter XI of the Code of Federal Regulations be amended as

follows:

PART 1205--COTTON RESEARCH AND PROMOTION

1. In Part 1205, a new subpart is added to read as follows:

Subpart--Procedures for Conduct of Sign-up Period

Definitions

Sec.

1205.10 Act.

1205.11 Administrator.

1205.12 Cotton.

1205.13 Upland cotton.

1205.14 Department.

1205.15 Farm Service Agency.

1205.16 Order.

1205.17 Person.

1205.18 Producer.

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1205.19 Importer.

1205.20 Representative period.

1205.21 Secretary.

1205.22 State.

1205.23 United States.

Procedures

1205.24 General.

1205.25 Supervision of sign-up period.

1205.26 Eligibility.

1205.27 Participation in the sign-up period.

1205.28 Counting.

1205.29 Reporting results.

1205.30 Instructions and forms.

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

Definitions

Sec. 1205.10 Act.

The term Act means the Cotton Research and Promotion Act, as

amended [7 U.S.C 2101-2118; Public Law 89-502, 80 Stat. 279, as

amended].

Sec. 1205.11 Administrator.

The term Administrator means the Administrator of the Agricultural

Marketing Service, or any officer or employee of USDA to whom authority

has been delegated to act in the Administrator's stead.

Sec. 1205.12 Cotton.

The term cotton means all Upland cotton harvested in the United

States and all imports of Upland cotton, including the Upland cotton

content of products derived thereof. The term cotton does not include

imported cotton for which the assessment is less than the de minimis

assessment established by regulations.

Sec. 1205.13 Upland cotton.

The term Upland cotton means all cultivated varieties of the

species Gossypium hirsutum L.

Sec. 1205.14 Department.

The term Department means the U.S. Department of Agriculture.

Sec. 1205.15 Farm Service Agency.

The term Farm Service Agency--formerly Agricultural Stabilization

and Conservation Service (ASCS)--also referred to as ``FSA,'' means the

Farm Service Agency of the Department.

Sec. 1205.16 Order.

The term Order means the Cotton Research and Promotion Order.

Sec. 1205.17 Person.

The term person means any individual 18 years of age or older, or

any partnership, corporation, association, or any other entity.

Sec. 1205.18 Producer.

The term producer means any person who shares in a cotton crop, or

in the proceeds thereof, as an owner of the farm, cash tenant, landlord

of a share tenant, share tenant, or sharecropper.

Sec. 1205.19 Importer.

The term importer means any person who enters, or withdraws from

warehouse, cotton for consumption in the customs territory of the

United States, and the term import means any such entry.

Sec. 1205.20 Representative period.

The term representative period means the 1995 calendar year.

Sec. 1205.21 Secretary.

The term Secretary means the Secretary of Agriculture of the United

States, or any other officer or employee of the Department to whom

authority has been delegated to act in the Secretary's stead.

Sec. 1205.22 State.

The term State means each of the 50 states.

Sec. 1205.23 United States.

The term United States means the 50 states of the United States of

America.

Procedures

Sec. 1205.24 General.

A sign-up period will be conducted to determine whether eligible

producers and importers favor the conduct of a referendum on the

continuance of the 1991 amendments to the Order.

(a) If the Secretary determines, based on the results of the sign-

up period, that at least 10 percent (4,622) or more of the number of

cotton producers and importers who voted in the 1991 referendum request

the conduct of a continuance referendum on the 1991 Order amendments, a

referendum will be held within 12 months after the end of the sign-up

period. Not more than 20 percent of the total requests counted toward

the 10 percent figure may be from producers from any one state or from

importers of cotton.

(b) If the Secretary determines that fewer than 10 percent (4,622)

of the number of producers and importers who voted in the 1991

referendum do not favor a continuance referendum, no referendum will be

held.

Sec. 1205.25 Supervision of sign-up period.

The Administrator shall be responsible for conducting the sign-up

period in accordance with this subpart.

Sec. 1205.26 Eligibility.

Only persons who meet the eligibility requirements in this subpart

may participate in the sign-up period. No person is entitled to sign-up

more than once.

(a) Except as set forth in paragraphs (b) and (c) of this section,

the following persons are eligible to request the conduct of a

continuance referendum:

(1) any person who was engaged in the production of Upland cotton

during calendar year 1995; and

(2) any person who was an importer of Upland cotton and imported

Upland cotton in excess of the de minimis assessment value of $2.00 per

line item entry during calendar year 1995.

(b) A general partnership is not eligible to request a continuance

referendum, however, the individual partners of an eligible general

partnership are each entitled to submit a request.

(c) Where a group of individuals is engaged in the production of

Upland cotton under the same lease or cropping agreement, only the

individual or individuals who signed or entered into the lease or

cropping agreement are eligible to participate in the sign-up period.

Individuals who are engaged in the production of Upland cotton as joint

tenants, tenants in common, or owners of community property, are each

entitled to submit a request if they share in the proceeds of the

required crop as owners, cash tenants, share tenants, sharecroppers or

landlords of a fixed rent, standing rent or share tenant.

(d) An officer or authorized representative of a qualified

corporation or association may submit a request on behalf of that

corporation or association.

(e) A guardian, administrator, executor, or trustee of any

qualified estate or trust may submit a request on behalf of that estate

or trust.

(f) An individual may not submit a request on behalf of another

individual.

Sec. 1205.27 Participation in the sign-up period.

The sign-up period will be from January 15, 1997, through April 14,

1997. Those persons who favor the conduct of a continuance referendum

and who wish to request that USDA conduct such a referendum may do so

by submitting such request in accordance with this section. All

requests must be received by the appropriate USDA office by April 14,

1997.

(a) Before the sign-up period begins, FSA shall establish a list of

known, eligible, Upland cotton producers at each county office serving

counties where cotton is produced, and shall also establish a list of

known, eligible Upland cotton importers.

(b) Before the start of the sign-up period, USDA shall mail a

request form

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to each known, eligible, cotton importer. Importers who wish to request

a referendum and who do not receive a request form in the mail by

February 1, 1997, may participate in the sign-up period by submitting a

signed, written, request for a continuance referendum, along with a

copy of a U.S. Customs form 7501 showing payment of a cotton assessment

for calendar year 1995. Importers must submit their requests and

supporting documents to USDA, FSA, DAPDFO, STOP 0539, Attention:

William A. Brown, P.O. Box 2415, Room 3096-s, 1400 Independence Ave.

S.W., Washington, D.C., 20250-0539. All requests and supporting

documents must be received by the appropriate FSA office by April 14,

1997.

(c) Producers must request a continuance referendum by signing up

in person at the county FSA office that serves the county where the

producer's farm is located. A producer who wishes to request a

referendum and whose name does not appear on the cotton producer list

at the appropriate county FSA office may participate in the sign-up

period by submitting a signed, written, request for a continuance

referendum, along with a copy of a sales receipt for cotton produced

during 1995. All requests and supporting documentation must be received

by the appropriate FSA office by April 14, 1997.

Sec. 1205.28 Counting.

County FSA offices and FSA, Deputy Administrator for Program

Delivery and Field Operations (DAPDFO), shall begin counting requests

no later than April 15, 1997. FSA shall determine the number of

eligible persons who favor the conduct of a continuance referendum.

Sec. 1205.29 Reporting results.

(a) Each county FSA office shall prepare and transmit to the state

FSA office, by April 23, 1997, a written report of the number of

eligible producers who requested the conduct of a referendum, and the

number of ineligible persons who made requests.

(b) DAPDFO shall prepare, by April 23, 1997, a written report of

the number of eligible importers who requested the conduct of a

referendum, and the number of ineligible persons who made requests.

(c) Each state FSA office shall, by April 30, 1997, forward all

county reports, and DAPDFO shall, by April 30, 1997, forward its report

of importer requests, to the Director, Cotton Division, AMS, STOP 0224,

1400 Independence Avenue, SW, Washington, D.C., 20250-0224.

(d) The Chief of the Research and Promotion Staff, Cotton Division,

shall prepare a report of the requests received, including the number

of eligible persons who requested the conduct of a referendum, and the

number of ineligible persons who made requests, to the Director of the

Cotton Division, and shall maintain one copy of the report where it

will be available for public inspection for a period of 5 years

following the end of the sign-up period.

(e) The Director of the Cotton Division shall prepare and submit to

the Secretary a report of the results of the sign-up period. The

Secretary will conduct a referendum if requested by 10 percent or more

of the number of cotton producers and importers voting in the most

recent (July 1991) referendum, but not more than 20 percent of the

total requests counted toward the 10 percent figure may be from

producers in any one state or from importers of cotton. The Secretary

shall announce the results of the sign-up period in a separate notice

in the Federal Register.

Sec. 1205.34 Instructions and forms.

The Administrator is hereby authorized to prescribe additional

instructions and forms consistent with the provisions of this subpart

to govern conduct of the sign-up period.

Dated: December 3, 1996.

Lon Hatamiya,

Administrator.

[FR Doc. 96-31144 Filed 12-5-96; 8:45 am]

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