Amendment to Cotton Board Rules and Regulations Regarding Import Assessment Exemptions

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1205

[CN-96-007]

Amendment to Cotton Board Rules and Regulations Regarding Import

Assessment Exemptions

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Agricultural Marketing Service is amending the regulations

regarding import assessment exemptions by adjusting the provisions for

automatic assessment exemptions on certain imports of textile and

apparel products. The purpose of this automatic exemption is to avoid

multiple assessment of U.S. produced cotton that has been exported and

then imported back into the U.S. in the form of textile and apparel

products. Also, this final rule will lengthen the amount of time a

person has to request an import reimbursement from 90 days from the

date the assessment was paid to 180 days from the date the assessment

was paid. This rule is consistent with the

[[Page 22878]]

business practices of importers and would make it easier for importers

to comply with the regulations.

EFFECTIVE DATE: May 28, 1997.

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.

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 any state or local laws, regulations, or

policies, unless they present an irreconcilable conflict with this

rule. The Cotton Research and Promotion Act, 7 U.S.C. Secs. 2101-2118

(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 plan, or any obligation

imposed in connection with the order is not in accordance with law and

requesting a modification of the order or to be exempted therefrom.

Such person is afforded the opportunity for a hearing on the petition.

After the hearing, the Secretary would rule on the petition. The Act

provides that the District Court of the United States in any district

in which the person is an inhabitant, or has his principal place of

business, has jurisdiction to review the Secretary's ruling, provided a

complaint is filed within 20 days from the date of the entry of the

ruling.

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 impact of this

action on small entities.

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 unduly or disproportionately burdened.

There are an estimated 16,000 importers who are presently subject

to rules and regulations issued pursuant to the Cotton Research and

Promotion Order. This rule will affect importers of cotton and cotton-

containing products. The majority of these importers are small

businesses under the criteria established by the Small Business

Administration (13 CFR 121.601).

This rule will neither raise nor lower assessments paid by

importers subject to the Cotton Research and Promotion Order and

therefore presents minimal economic impact. This action will improve

the agency's ability to prevent double assessment of U.S. produced

cotton reentering the U.S. in the form of textile and apparel products.

In addition, this rule will lengthen the amount of time a person has to

request an import reimbursement from 90 days from the date the

assessment was paid to 180 days from the date the assessment was paid.

This rule is consistent with the business practices of importers and

would make it easier for importers to comply with the regulations.

Under these circumstances AMS has determined that this action will

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

entities.

In compliance with Office of Management and Budget (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 the regulation to be amended have been

previously approved by OMB and were assigned control number 0581-0093.

Background

The Cotton Research and Promotion Act Amendments of 1990 enacted by

Congress under Subtitle G of Title XIX of the Food, Agriculture,

Conservation and Trade Act of 1990 on November 28, 1990, contained two

provisions that authorized changes in the funding procedures for the

Cotton Research and Promotion Program.

These provisions are: (1) the assessment of imported cotton and

cotton products; and (2) termination of the right of cotton producers

to demand a refund of assessments.

An amended the Cotton Research and Promotion Order was approved by

producers and importers voting in a referendum held July 17-26, 1991.

Proposed rules implementing the amended Order were published in the

Federal Register on December 17, 1991, (56 FR 65450). The final

implementing rules were published on July 1 and 2, 1992, (57 FR 29181)

and (57 FR 29431), respectively.

Section 1205.335 (c)(1) of the Cotton Research and Promotion Order

provides for exemptions from assessments for certain imported goods

when they contain U.S. produced cotton in order to minimize the

occurrence of double assessments on U.S. cotton. All U.S. produced

cotton is assessed at the time it is first sold. A significant amount

of U.S. produced cotton is converted into fabric in the U.S. and then

exported. This U.S. cotton containing fabric often returns to the U.S.

in the form of apparel products.

Section 1205.510 (b)(5) of the Cotton Board Rules and Regulations

identifies the specific Harmonized Tariff Schedule (HTS) numbers that

are exempted to avoid a second unnecessary assessment of this U.S.

produced cotton. The numbers currently identified in this section have

become out dated because of changes in the HTS. The revision of this

section will update the exempted HTS numbers to 9802.00.8015, and

9802.00.9000 which are currently in the HTS.

This rule also lengthens the period of time a person has to request

an import assessment reimbursement from 90 to 180 days from the date

the assessment was paid. In the past the Cotton Board has received

requests for reimbursements beyond the 90 day limit. In responding to

these request, importers have informed the Cotton Board that the 90 day

period is too restrictive. The Cotton Board has recognized that

importer concern over the time period has merit. Therefore, the Cotton

Board has requested that the Department extend the period to 180 days.

The Cotton Board believes that this will be consistent with the

business practices of importers, and make it easier for importers to

comply with the regulations.

A proposed rule with a request for comments was published in the

Federal Register (62 FR 4666) on January 31, 1997. No comments were

received during the comment period (January 31, through March 3, 1997).

List of Subjects in 7 CFR Part 1205

Advertising, Agricultural research, Cotton, Marketing agreements,

Reporting and record keeping requirements.

For the reasons set forth in the preamble, 7 CFR part 1205 is

amended as follows:

PART 1205--COTTON RESEARCH AND PROMOTION

1. The authority citation for part 1205 continues to read as

follows:

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

2. In Sec. 1205.510, paragraph (b)(5) is revised read as follows:

Sec. 1205.510 Levy of assessments.

* * * * *

[[Page 22879]]

(b) * * *

(5) Imported textile and apparel articles assembled of components

formed from cotton produced in the United States and identified by HTS

numbers 9802.00.8015 or 9802.00.9000 shall be exempt from assessments

under this subpart.

* * * * *

3. In Sec. 1205.520, paragraph (b) introductory text is revised to

read as follows:

Sec. 1205.520 Procedure for obtaining reimbursement.

* * * * *

(b) Submission of Reimbursement Application to Cotton Board. Any

importer requesting a reimbursement shall mail the application on the

prescribed form to the Cotton Board. The application shall be

postmarked within 180 days from the date the assessments were paid on

the cotton by such importer. The reimbursement application shall show:

* * * * *

Dated: April 22, 1997.

Lon Hatamiya,

Administrator.

[FR Doc. 97-10892 Filed 4-25-97; 8:45 am]

BILLING CODE 3410-02-P