Revision of User Fees for 1998 Crop Cotton Classification Services to Growers

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 28

[CN-98-004]

Revision of User Fees for 1998 Crop Cotton Classification

Services to Growers

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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

reduce user fees for cotton producers for 1998 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. The 1997 user fee for this classification service was

$1.40 per bale. This proposal would reduce the fee for the 1998 crop to

$1.30 per bale. The proposed reduction in fees resulted from increased

efficiency in classing operations. The fee 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 27, 1998.

ADDRESSES: Comments and inquiries should be addressed to, Cotton

Programs, 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 proposed rule has been determined to be not significant for

purposes of Executive Order 12866, and it has not been reviewed by the

Office of Management and Budget (OMB).

This proposed 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.

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.). It has been determined that the

implementation of this proposed rule would 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 in order that small businesses will

not be disproportionately burdened. There are an estimated 40,000

cotton growers in the U.S. who voluntarily use the AMS cotton classing

services annually, and the majority of these cotton growers are small

businesses under the criteria established by the Small Business

Administration (13 CFR 121.601). 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 (the 1997 user

fee for classification services was $1.40 per bale; the fee for the

1998 crop would be reduced to $1.30 per bale; the 1998 crop is

estimated at 15,684,900 bales);

(2) The cost reduction will not affect competition in the

marketplace; and

(3) The use of classification services is voluntary. For the 1997

crop, 17,949,575 bales were classed out of 18,346,450 bales produced.

(4) Based on the average price paid to growers for cotton from the

1996 crop of 69.3 cents per pound, 500 pound bales of cotton are worth

an average of $346.50 each. The proposed user fee for classification

services, $1.30 per bale, is less than one percent of the value of an

average bale of cotton.

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 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 (44 U.S.C. 3501 et seq.).

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

made effective July 1, 1998, 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 $1.40 per bale during the 1997 harvest season

as determined by using the formula provided in the Uniform Cotton

Classing Fees Act of 1987, as amended by Pub. L. 102-237. The fees

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

costs, including costs for administration, supervision, and development

and maintenance of cotton standards.

This proposed rule establishes the user fee charged to producers

for HVI classification at $1.30 per bale during the 1998 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 1997. Therefore, the 1998

producer's user fee for classification service is based on the 1997

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 Pub. L. 102-

237. The 1997 base fee for HVI classification exclusive of adjustments,

as provided by the Act, was $2.08 per bale. A two percent, or four

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

domestic product added to the $2.08 would result in a 1998 base fee of

$2.12 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

[[Page 14840]]

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 1998 crop is estimated at 15,684,900 bales. The

1998 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 32 cents per bale

reduction and was subtracted from the 1998 base fee of $2.12 per bale,

resulting in a fee of $1.80 per bale.

With a fee of $1.80 per bale, the projected operating reserve would

be 46.806 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 $1.80 must be reduced by 50 cents per bale, to

$1.30 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 1998 season fee at $1.30 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 requesting classification data

provided on computer punched cards will be charged a fee of 10 cents

per card to reflect the costs of providing this service. Requests for

punch card classification data represents only 2.6 percent of the total

bales classed. This change would be reflected in Sec. 28.910 (a).

Growers or their designated agents receiving classification data by

methods other than computer punched cards 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 would remain at five cents per bale,

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

However, if computer punched cards were requested, a fee of ten cents

per card would be charged. The fee in Sec. 28.910 (b) for an owner

receiving classification data from the central database would remain at

five cents per bale, and the minimum charge of $5.00 for services

provided per monthly billing period would remain the same. The

provisions of Sec. 28.910 (c) concerning the fee for new classification

memoranda issued from the central database for the business convenience

of an owner without reclassification of the cotton will remain the

same.

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

from $1.40 per bale to $1.30 per bale.

The fee for returning samples after classification in Sec. 28.911

would remain at 40 cents per sample.

Finally, the authority citation for Subpart D of Part 28 was

revised at 61 FR 19512. This action would correct that revision by

specifying Subpart D rather than a reference to Part 28 in its

entirety.

A thirty-day comment period is provided for public comments. This

period is appropriate because it is anticipated that the proposed

changes, if adopted, would be made effective July 1, 1998, as provided

by the Cotton Statistics and Estimates Act.

List of Subjects in 7 CFR Part 28

Administrative practice and procedure, Cotton, Cotton samples,

Grades, Market news, Reporting and recordkeeping 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, Subpart D, would be revised

to read as follows:

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

2. In Sec. 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 $1.30 per bale.

* * * * *

3. In Sec. 28.910, paragraph (a) would be revised to read as

follows:

Sec. 28.910 Classification of samples and issuance of classification

data.

(a) (1) The samples submitted as provided in the subpart shall be

classified by employees of the Division and classification memoranda

showing the official quality determination of each sample according to

the official cotton standards of the United States shall be issued by

any one of the following methods at no additional charge:

(i) Computer diskettes,

(ii) Computer tapes, or

(iii) Telecommunications, with all long distance telephone line

charges paid by the receiver of data.

(2) When an additional copy of the classification memorandum is

issued by any method listed in (a)(1), there will be a charge of five

cents per bale. If provided as an additional method of data transfer,

the minimum fee for each tape or diskette issued shall be $10.00.

(3) Upon request, computer punch cards may be issued. The fee for

this service shall be 10 cents per card.

* * * * *

4. In Sec. 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 $1.30 per bale.

* * * * *

Dated: March 24, 1998.

Enrique E. Figueroa,

Administrator, Agricultural Marketing Service.

[FR Doc. 98-8177 Filed 3-26-98; 8:45 am]

BILLING CODE 3410-02-P