Revision of User Fees for 1999 Crop Cotton Classification Services to Growers

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 28

[CN-99-001]

RIN 0581-AB57

Revision of User Fees for 1999 Crop Cotton Classification

Services to Growers

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Agricultural Marketing Service (AMS) is raising user fees

for cotton producers for 1999 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 1998 user

fee for this classification service was $1.30 per bale. This final rule

would raise the fee for the 1999 crop to $1.35 per bale. The increase

in fees resulted from the significant drop in cotton production for the

1998 crop. The fee and the existing reserve are sufficient to cover the

costs of providing classification services, including costs for

administration, supervision, and development and maintenance of

standards.

EFFECTIVE DATE: July 1, 1999.

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

SUPPLEMENTARY INFORMATION: A proposed rule detailing the revisions was

published in the Federal Register on April 2,1999, (64 FR 15937). A 30-

day comment period was provided for interested persons to respond to

the proposed rule. One comment, from a grower association, was received

in opposition to the increase. No other comments were received in

response to the proposed rule. The commentor stated that the fee

increase, although small, would further erode its producers' economic

condition when many of its members are in tough economic times. The fee

increase is indeed small given the cost-per-unit currently borne by

users of the service. The impact on growers should be minimal. In fact,

we estimate that the new fee is less than one percent of the value of

an average bale of cotton. In addition, this fee was calculated

according to the formula provided for and required by the statute and

is therefore made final in this rulemaking without change.

This final 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 final 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 final rule 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 final 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 35,000

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 Sec. 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 increase reflects a very small increase in the cost-

per-unit currently borne by those entities utilizing the services (the

1998 user fee for classification services was $1.30 per bale; the fee

for the 1999 crop would be increased to $1.35 per bale; the 1999 crop

is estimated at 16,810,410 bales);

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

marketplace; and

(3) The use of classification services is voluntary. For the 1998

crop, 13,467,012 bales were classed out of 13,790,000 bales produced.

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

1997 crop of 65.2 cents per pound, 500 pound bales of cotton are worth

an average of $326.00 each. The proposed user fee for classification

services, $1.35 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 final 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.).

The changes will be made effective July 1, 1999, 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 $1.30 per bale during the 1998 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, costs of equipment and supplies, and other overhead

costs, including costs for administration, supervision, and development

and maintenance of cotton standards.

This final rule establishes the user fee charged to producers for

HVI classification at $1.35 per bale during the 1999 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

[[Page 28884]]

cotton classification requested by producers in 1998. Therefore, the

1999 producer's user fee for classification service is based on the

1998 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 1998 base fee for HVI classification exclusive of adjustments,

as provided by the Act, was $2.12 per bale. A one percent, or two cents

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

domestic product added to the $2.12 results in a 1999 base fee of $2.14

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 1999 crop is estimated at 16,810,410 bales. The

1999 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 1999 base fee of $2.14 per bale,

resulting in a fee of $1.82 per bale.

With a fee of $1.82 per bale, the projected operating reserve would

be 46.66 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 $1.82 must be reduced by 47 cents per bale, to

$1.35 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 will establish the 1999 season fee at $1.35 per bale.

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

the increase 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 will 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 continue to be charged the fee

of 10 cents per card in Sec. 28.910 (a) to reflect the costs of

providing this service. Requests for punch card classification data

represented only 0.7 percent of the total bales classed from the 1998

crop, down from 2.6 percent in 1997. Growers or their designated agents

receiving classification data by methods other than computer punched

cards will 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 will

remain at five cents per bale, and it will be applicable even if the

same method was requested. However, if computer punched cards were

requested, a fee of ten cents per card will be charged. The fee in

Sec. 28.910 (b) for an owner receiving classification data from the

central database will remain at five cents per bale, and the minimum

charge of $5.00 for services provided per monthly billing period will

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 will be increased

from $1.30 per bale to $1.35 per bale.

The fee for returning samples after classification in Sec. 28.911

will remain at 40 cents per sample.

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 amended

as follows:

PART 28--[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 $1.35 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 $1.35 per bale.

* * * * *

Dated: May 25, 1999.

Enrique E. Figueroa,

Administrator, Agricultural Marketing Service.

[FR Doc. 99-13764 Filed 5-27-99; 8:45 am]

BILLING CODE 3410-02-P