Revision of User Fees for 1996 Crop Cotton Classification Services to Growers

SUMMARY: The Agricultural Marketing Service (AMS) is proposing to

reduce user fees for cotton producers for 1996 crop cotton

classification services under the Cotton Statistics and Estimates Act

in accordance with the formula provided in the Uniform Cotton Classing

Fees Act of 1987 and remove obsolete regulations. The 1995 user fee for

the classification service was $1.60 per bale. This proposal would

reduce the fee for the 1996 crop to $1.50 per bale. The proposed

reduction in fees is due to increased efficiency in classing operations

and is sufficient to recover the costs of providing classification

services, including costs for administration, supervision, and

development and maintenance of standards.

DATES: Comments must be received by April 1, 1996.

ADDRESSES: Comments and inquiries should be addressed to Lee Cliburn,

Cotton Division, AMS, USDA, room 2641-S, P.O. Box 96456, Washington, DC

20090-6456. Comments will be available for public inspection during

regular business hours at the above office in Rm. 2641-South Building,

14th & Independence Avenue, SW., Washington, DC.

FOR FURTHER INFORMATION CONTACT: Lee Cliburn, 202-720-2145.

SUPPLEMENTARY INFORMATION: This rule has been determined to be not

significant for purposes of Executive Order 12866, and has not been

reviewed by the Office of Management and Budget (OMB).

This proposed rule has been reviewed under Executive Order 12778,

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

This rule would not preempt any state or local laws, regulations, or

policies unless they present an irreconcilable conflict with this rule.

There are no administrative procedures which must be exhausted prior to

any judicial challenge to the provisions of this rule.

The Administrator, Agricultural Marketing Service (AMS), has

considered the economic impact of this proposal on small entities

pursuant to the requirements set forth in the Regulatory Flexibility

Act (RFA) (5 U.S.C. 601 et seq.).

The purpose of the RFA is to fit regulatory actions to the scale of

businesses subject to such actions in order that small businesses will

not be disproportionately burdened. There are about 40,000 cotton

growers who voluntarily submit their cotton for the classification

service. The majority of the growers are small businesses under the

criteria established by the Small Business Administration. The

Administrator of AMS has certified that this action will not have a

significant economic impact on a substantial number of small entities

as defined in the RFA because: (1) The fee reduction reflects a

decrease in the cost-per-unit currently borne by those entities

utilizing the services; (2) the cost reduction will not affect

competition in the marketplace; and (3) the use of classification

services is voluntary.

In compliance with OMB regulations (5 CFR part 1320) which

implement the Paperwork Reduction Act (PRA) of 1980 (44 U.S.C. 3501 et

seq.), 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 0581-0009 under

the Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.).

It is anticipated that the proposed changes, if adopted, would be

made effective July 1, 1996, as provided by the Cotton Statistics and

Estimates Act.

Fees for Classification Under the Cotton Statistics and Estimates Act

of 1927

The user fee charged to cotton producers for High Volume Instrument

(HVI) classification services under the Cotton Statistics and Estimates

Act (7 U.S.C. 473a) was $1.60 per bale during the 1995 harvest season

as determined by using the formula provided in the Uniform Cotton

Classing Fees Act of 1987, as amended by Public Law 102-237. The fees

cover salaries, cost of equipment and supplies, and other overhead

costs, including costs for administration, supervision, development,

and maintenance of cotton standards.

This proposed rule establishes the user fee charged to producers

for HVI classification at $1.50 per bale during the 1996 harvest

season.

Public Law 102-237 amended the formula in the Uniform Cotton

Classing Fees Act of 1987 for establishing the producer's

classification fee so that the producer's fee is based on the

prevailing method of classification requested by producers during the

previous year. HVI classing was the prevailing method of cotton

classification requested by producers in 1995. Therefore, the 1996

producer's user fee for classification service is based on the 1995

base fee for HVI classification.

The fee was calculated by applying the formula specified in the

Uniform Cotton Classing Fees Act of 1987, as amended by Public Law 102-

237. The 1995 base fee for HVI classification exclusive of adjustments,

as provided by the Act, was $2.01 per bale. A 1.4 percent, or three

cents per bale increase due to the implicit price deflator of the gross

domestic product added to the $2.01 would result in a 1996 base fee of

$2.04 per bale. The formula in the Act provides for the use of the

percentage change in the implicit price deflator of the gross national

product (as indexed for the most recent 12-month period for which

statistics are available). However, this has been replaced by the gross

domestic product by the Department of Commerce as a more appropriate

measure for the short-term monitoring and analysis of the U.S. economy.

The number of bales to be classed by the United States Department

of Agriculture from the 1996 crop is estimated at 19,024,000. The 1996

base fee was decreased 15 percent based on the estimated number of

bales to be classed (one percent for every 100,000 bales or portion

thereof above the base of 12,500,000, limited to a maximum adjustment

of 15 percent). This percentage factor amounts to a 31 cents

[[Page 7757]]

per bale reduction and was subtracted from the 1996 base fee of $2.04

per bale, resulting in a fee of $1.73 per bale.

Assuming a fee of $1.73 per bale, the projected operating reserve

would be 36.9 percent. The Act specifies that the Secretary shall not

establish a fee which, when combined with other sources of revenue,

will result in a projected operating reserve of more than 25 percent.

Accordingly, the fee of $1.73 must be reduced by 23 cents per bale, to

$1.50 per bale, to provide an ending accumulated operating reserve for

the fiscal year of 25 percent of the projected cost of operating the

program. This would establish the 1996 season fee at $1.50 per bale.

Accordingly, Sec. 28.909, paragraph (b) would be revised to reflect

the reduction in the HVI classification fees.

As provided for in the Uniform Cotton Classing Fees Act of 1987, as

amended, a five cent per bale discount would continue to be applied to

voluntary centralized billing and collecting agents as specified in

Sec. 28.909 (c).

Growers or their designated agents would continue to incur no

additional fees if only one method of receiving classification data was

requested. The fee for each additional method of receiving

classification data in Sec. 28.910 (a) would remain at five cents per

bale, and it would be applicable even if the same method was requested.

Since the Cotton Division will no longer accept returned diskettes to

eliminate the possibility of computer virus infection, the cost of

computer tapes or diskettes not returned will no longer be billed

separately to the requestor. The fee in Sec. 28.910 (b) for an owner

receiving classification data from the central database would remain at

five cents per bale, but a minimum charge of $5.00 for services

provided per monthly billing period would be assessed. The provisions

of Sec. 28.910 concerning the fee for new classification memoranda

issued from the central database for the business convenience of an

owner without reclassification of the cotton would remain the same.

The fee for review classification in Sec. 28.911 would be reduced

from $1.60 per bale to $1.50 per bale.

The fee for returning samples after classification in Sec. 28.911

would remain at 40 cents per sample.

List of Subjects in 7 CFR Part 28

Administrative practice and procedures, Cotton, Cotton samples,

Grades, Market news, Reporting and record keeping requirements,

Standards, Staples, Testing, Warehouses.

For the reasons set forth in the preamble, 7 CFR Part 28 is

proposed to be amended as follows:

PART 28--[AMENDED]

1. The authority citation for Part 28 would be revised to read as

follows:

Authority: 7 U.S.C. 471-476.

2. In section 28.909, paragraph (b) would be revised to read as

follows:

Sec. 28.909 Costs.

* * * * *

(b) The cost of High Volume Instrument (HVI) cotton classification

service to producers is $1.50 per bale.

* * * * *

3. Section 28.910 would be amended by revising the concluding text

of paragraph (a) and adding a sentence at the end of paragraph (b) to

read as follows:

Sec. 28.910 Classification of samples and issuance of classification

data.

(a) * * *

If the issuance of data to growers or to their agents is made by

more than one method, the fee for each bale issued by each additional

method shall be five cents. If provided as additional method of data

transfer, the minimum fee for each tape or diskette issued shall be

$10.00.

(b) * * * The minimum charge assessed for services obtained from

the central database shall be $5.00 per monthly billing period.

* * * * *

4. In Section 28.911, the last sentence of paragraph (a) would be

revised to read as follows:

Sec. 28.911 Review classification.

(a) * * * The fee for review classification is $1.50 per bale.

* * * * *

Dated: February 23, 1996.

Lon Hatamiya,

Administrator.

[FR Doc. 96-4702 Filed 2-28-96; 8:45 am]

BILLING CODE 3410-02-P