[Federal Register Volume 78, Number 103 (Wednesday, May 29, 2013)]
[Rules and Regulations]
[Pages 32067-32068]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-12651]

Rules and Regulations
                                                Federal Register

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Federal Register / Vol. 78, No. 103 / Wednesday, May 29, 2013 / Rules 
and Regulations

[[Page 32067]]


Agricultural Marketing Service

7 CFR Part 28

RIN 0581-AD30

User Fees for 2013 Crop Cotton Classification Services to Growers

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.


SUMMARY: The Agricultural Marketing Service (AMS) will maintain user 
fees for cotton producers for 2013 crop cotton classification services 
at $2.20 per bale--the same level as in 2012. Revenues resulting from 
this cotton classing fee and existing reserves are sufficient to cover 
the costs of providing classification services for the 2013 crop, 
including costs for administration and supervision.

DATES: Effective Date: July 1, 2013.

FOR FURTHER INFORMATION CONTACT: Darryl Earnest, Deputy Administrator, 
Cotton & Tobacco Programs, AMS, USDA, 3275 Appling Road, Room 11, 
Memphis, TN 38133. Telephone (901) 384-3060, facsimile (901) 384-3021, 
or email darryl.earnest@ams.usda.gov.


Executive Order 12866

    This final 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).

Executive Order 12988

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. It is not intended to have retroactive effect. 
There are no administrative procedures that must be exhausted prior to 
any judicial challenge to the provisions of this rule.

Regulatory Flexibility Act and Paperwork Reduction Act

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), AMS has considered the economic impact 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 purpose of the RFA is to fit regulatory actions to the scale of 
businesses subject to such actions so that small businesses will not be 
disproportionately burdened. There are an estimated 25,000 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 121.201). Maintaining the user fee at the 2012 
crop level as stated will not significantly affect small businesses as 
defined in the RFA because:
    (1) The fee represents a very small portion of the cost per-unit 
currently borne by those entities utilizing the services. (According to 
USDA's Economic Research Service, the U.S. average total cost of 
production in 2011 was $755 per bale. The user fee for classification 
services of $2.20 per bale represents less the one third percent of 
this average U.S. per-bale cost of production.);
    (2) The fee for services will not affect competition in the 
    (3) The use of classification services is voluntary. For the 2012 
crop, 16,800,600 bales were produced; and, almost all of these bales 
were voluntarily submitted by growers for the classification service; 
    (4) Based on the average price paid to growers for cotton from the 
2012 crop of 0.7162 cents per pound, 500 pound bales of cotton are 
worth an average of $358.10 each. The user fee for classification 
services, $2.20 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), the 
information collection requirements contained in the provisions to be 
amended by this rule have been previously approved by OMB and were 
assigned OMB control number 0581-0008, Cotton Classing, Testing, and 

Fees for Classification Under the Cotton Statistics and Estimates Act 
of 1927

    This final rule establishes a 2013 user fee of $2.20 per bale 
charged to producers for cotton classification--the same level as the 
2012 user fee. The 2013 user fee was set in accordance to section 14201 
of the Food, Conservation, and Energy Act of 2008 (Pub. L. 110-234) 
(2008 Farm Bill). Section 14201 of the 2008 Farm Bill provides that: 
(1) the Secretary shall make available cotton classification services 
to producers of cotton, and provide for the collection of 
classification fees from participating producers or agents that 
voluntarily agree to collect and remit the fees on behalf of the 
producers; (2) classification fees collected and the proceeds from the 
sales of samples submitted for classification shall, to the extent 
practicable, be used to pay the cost of the services provided, 
including administrative and supervisory costs; (3) the Secretary shall 
announce a uniform classification fee and any applicable surcharge for 
classification services not later than June 1 of the year in which the 
fee applies; and (4) in establishing the amount of fees under this 
section, the Secretary shall consult with representatives of the United 
States cotton industry. At pages 313-314, the Joint Explanatory 
Statement of the committee of conference for section 14201 stated the 
expectation that the cotton classification fee would be established in 
the same manner as was applied during the 1992 through 2007 fiscal 
years. Specifically, it states that the classification fee should 
continue to be a basic, uniform fee per bale fee as determined 
necessary to maintain cost-effective cotton classification service. 
Further, in consulting with the cotton industry, the Secretary should 
demonstrate the level of fees necessary to maintain effective cotton 
classification services and provide the Department of Agriculture with 
an adequate operating reserve, while also working to limit adjustments 
in the year-to-year fee.
    Under the provisions of section 14201, a user fee (dollar amount 
per bale classed) is established for the 2013 cotton crop that, when 
combined with

[[Page 32068]]

other sources of revenue, will result in projected revenues sufficient 
to reasonably cover budgeted costs--adjusted for inflation--and allow 
for adequate operating reserves to be maintained. Costs considered in 
this method include salaries, costs of equipment and supplies, and 
other overhead costs, such as facility costs and costs for 
administration and supervision. In addition to covering expected costs, 
the user fee is set such that projected revenues will generate an 
operating reserve adequate to effectively manage uncertainties related 
to crop size and cash-flow timing. Furthermore, the operating reserve 
is expected to meet minimum reserve requirements set by the 
Agricultural Marketing Service, which require maintenance of a reserve 
fund amount equal to at least four months of projected operating costs.
    The user fee charged cotton producers for cotton classification in 
2013 is $2.20 per bale, which is the same fee charged for the 2012 
crop. This fee is based on the preseason projection that 13,250,000 
bales will be classed by the United States Department of Agriculture 
during the 2013 crop year.
    Accordingly, Sec.  28.909, paragraph (b) reflects the continuation 
of the cotton classification fee at $2.20 per bale.
    As provided for in the 1987 Act, a 5 cent per bale discount 
continues to be applied to voluntary centralized billing and collecting 
agents as specified in Sec.  28.909(c).
    Growers or their designated agents receiving classification data 
continue to incur no additional fees if classification data is 
requested only once. The fee for each additional retrieval of 
classification data in Sec.  28.910 remains at 5 cents per bale. The 
fee in Sec.  28.910 (b) for an owner receiving classification data from 
the National Database remains at 5 cents per bale, and the minimum 
charge of $5.00 for services provided per monthly billing period 
remains the same. The provisions of Sec.  28.910 (c) concerning the fee 
for new classification memoranda issued from the National Database for 
the business convenience of an owner without reclassification of the 
cotton remains the same at 15 cents per bale or a minimum of $5.00 per 
    The fee for review classification in Sec.  28.911 is maintained at 
$2.20 per bale.
    The fee for returning samples after classification in Sec.  28.911 
remains at 50 cents per sample.

Summary of Comments

    A proposed rule was published in the Federal Register on March 28, 
2013, with a comment period of March 28, 2013 through April 12, 2013 
(78 FR 18898). AMS received two comments: one from a national trade 
organization that represents approximately 80 percent of the US cotton 
industry, including cotton producers, ginners, warehousemen, merchants, 
cooperatives, cottonseed processors, and textile manufacturers from 
Virginia to California; and one from a national trade organization 
comprised of eight state and regional membership organizations that 
represent approximately 680 individual cotton ginning operations in 17 
cotton-producing states. Comments from these national trade 
organizations expressed support for the decision to maintain the fee at 
the level established for the 2012 crop. Comments may be viewed at 

List of Subjects in 7 CFR Part 28

    Administrative practice and procedure, Cotton, Reporting and 
recordkeeping requirements, Warehouses.

    For the reasons set forth in the preamble, 7 CFR part 28 is amended 
to read 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. 51-65; 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 $2.20 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 $2.20 per bale.
* * * * *

    Dated: May 21, 2013.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2013-12651 Filed 5-28-13; 8:45 am]