(a) Agriculture Wool Trust—(1) Establishment. The Agriculture Wool Trust has been established to provide funding for payments under this subpart.

(2) Purpose. The purpose of the Agriculture Wool Trust is to reduce the injury to domestic manufacturers resulting from tariffs on wool fabric that are higher than tariffs on certain apparel articles made of wool fabric.

(3) Funding availability. Not more than $30,000,000 will be available annually for payments authorized under this subpart.

(4) Definitions. As used in this subpart:

Agriculture Wool Trust means the Agriculture Wool Apparel Manufacturers Trust Fund.

CCC means the Commodity Credit Corporation.

FAS means the Foreign Agricultural Service.

HTS means the Harmonized Tariff Schedule of the United States.

Secretary means the Secretary of Agriculture.

TRQ means Tariff Rate Quota.

U.S. means the United States of America.

(b) Provisions common to this subpart—(1) Affidavits. FAS shall annually, not later than February 15 of the year of the applicable payment, make affidavits available on the FAS website. Affidavits must be submitted in accordance with the instructions provided on the FAS website.

(2) Filing deadline. Any person filing an affidavit under this subpart for a particular year must file the affidavit not later than March 1 of such year.

(3) Affirmation. By submitting an affidavit under this subpart, an applicant is affirming that all information contained in the application is complete and correct and that the information does not contain a false claim, statement, or representation.

(4) Document retention. All persons receiving a payment under this subpart must maintain all pertinent documentation for three years after the year of receipt of the payment.

(5) False statements. Persons providing false or fraudulent claims or making materially false statements or representations are subject to civil or criminal penalties pursuant to 18 U.S.C. 1001.

(6) Confidential information. Specific business information provided in affidavits that is marked “business confidential” will be protected from disclosure to the full extent permitted by law.

(7) Review of affidavits. Affidavits will be reviewed to determine whether they are complete and responsive to the content and form of affidavit requirements in this subpart.

(8) Finality of determination by the Secretary. A determination by the Secretary about a payment under this subpart shall be final and is not subject to appeal or protest.

(9) Timing of payments. A payment for which a person is eligible under this subpart will be disbursed not later than April 15 of the applicable year.

(10) Proration and sequester. Payments covered by this subpart will be subject to proration in the event that insufficient funds exist in the Agriculture Wool Trust during the year of the payment, and will be subject to sequester, if required by law.

(11) HTS subheadings. All references to subheadings of the HTS in this subpart are to the subheadings as described in the HTS in 2014.

(a) Definitions. In this section the following definitions apply:

Eligible person means a manufacturer in the U.S. of qualifying worsted wool fabric during the calendar year immediately preceding the payment and during each of calendar years 1999, 2000, and 2001.

Qualifying worsted wool fabric means a worsted wool fabric containing at least 85% by weight worsted wool of the kind described in subheading 9902.51.11 or 9902.51.15 of the 2014 HTS that, during the calendar year immediately preceding the payment and during each of calendar years 1999, 2000, and 2001, was manufactured by an eligible person in the United States.

(b) Distribution of funds. From amounts in the Agriculture Wool Trust, CCC will annually make payments to eligible persons that manufactured qualifying worsted wool fabric as provided in paragraph (b)(1) or (2) of this section.

(1) Payments for production under subheading 9902.51.11 of the HTS. A total of $2,666,000 will be allocated annually among eligible persons covered by this paragraph (b)(1) on the basis of the percentage of each eligible person's total production (actual production, not estimates) of qualifying worsted wool fabric that is of the kind described in subheading 9902.51.11 of the HTS for each of the calendar years 1999, 2000, and 2001 in relation to the total production of such fabric by all eligible persons who qualify for payments under this paragraph (b)(1) for each of the calendar years 1999, 2000, and 2001.

(2) Payments for production under subheading 9902.51.15. A total of $2,666,000 will be allocated annually among eligible persons covered by this paragraph (b)(2) on the basis of the percentage of each eligible person's total production (actual production, not estimates) of qualifying worsted wool fabric that conforms in composition to subheading 9902.51.15 of the HTS for each of the calendar years 1999, 2000, and 2001 in relation to the total production of such fabric by all eligible persons who qualify for payments under this paragraph (b)(2) for each of the calendar years 1999, 2000, and 2001.

(c) Annual affidavit—(1) In general. An eligible person applying for a payment under this section shall comply with all applicable reporting requirements of this section and of § 1471.10.

(2) Specific business information. An eligible person shall annually report the actual dollar value and the actual quantity (linear yards) of qualifying worsted wool fabric that was manufactured in the calendar year immediately preceding the payment and for each of calendar years 1999, 2000, and 2001.

(3) Manufacturing of wool. When reporting the annual dollar value and quantity of the qualifying wool fabric that was manufactured, an eligible person may either have manufactured the qualifying worsted wool on its own behalf or had another person manufacture the qualifying worsted wool fabric, provided the eligible person owned the qualifying worsted wool fabric at the time of manufacture.

(a) Eligible wool. Eligible wool under the Duty Refund program means imported wool yarn of the kind described in section 505 of the Trade and Development Act of 2000 Public Law 106-200 (May 18, 2000).

(b) Payments—(1) Eligibility. Persons eligible for a Duty Refund payment are manufacturers who, in the year immediately preceding the payment, were actively engaged in manufacturing wool (as determined by FAS), and in calendar years 2000, 2001, and 2002—

(i) Imported eligible wool directly or indirectly; and

(ii) Used the imported wool to make men's or boy's suits; or

(iii) Further manufactured the eligible imported wool.

(2) Payment amount. Persons eligible for a Duty Refund payment shall be paid the same amounts that were made to the persons by U.S. Customs and Border Protection (CBP) in 2005.

(a) Definitions. In this section the following definitions apply:

(1) Lower duty rate. The term “lower duty rate” means the duty rate as codified in the 2014 HTS that would have been applicable to qualifying worsted wool fabric of the kind described in subheadings 9902.51.11, 9902.51.15, and 9902.51.16 of the 2014 HTS prior to the expiration of the Wool TRQ on December 31, 2014.

(2) Eligible person. The term “eligible person” means a manufacturer (or a successor-in-interest to the manufacturer) in the U.S. or in a Foreign Trade Zone authorized under the Foreign-Trade Zones Act of 1934 (19 U.S.C. 81a-81u) that, during the calendar year immediately preceding the payment, imported qualifying worsted wool fabric and used the imported qualifying worsted wool fabric as described in paragraph (a)(3) of this section.

(3) Qualifying worsted wool fabric. The term “qualifying worsted wool fabric” means imported worsted wool fabric containing at least 85% by weight worsted wool of the kind described in subheading 9902.51.11, 9902.51.15, or 9902.51.16 of the 2014 HTS that, during the calendar year immediately preceding the payment was:

(i) Imported by an eligible person in the U.S.; and

(ii) Used by the eligible person in the U.S.

(A) In the case of wool fabric of the kind described in subheading 9902.51.11 or 9902.51.15 of the HTS, the qualifying fabric shall be used to produce worsted wool suits, suit-type jackets, or trousers for men and boys; or

(B) In the case of wool fabric of the kind described in subheading 9902.51.16 of the HTS, the qualifying fabric shall be used in manufacturing.

(4) Successor-in-interest. The term “successor-in-interest” means a person that is eligible to claim a payment under this section as if the person were the original eligible person, without regard to section 3727, title 31, United States Code. A person may succeed to the status of the successor-in-interest to the eligible person and become eligible for the payment because of—

(i) An assignment of the claim;

(ii) An assignment of the original eligible person's right to manufacture under the same trade name; or

(iii) A reorganization of the eligible person.

(b) Purposes. The purposes of a TRQ monetization payment are to provide an eligible person—

(1) Compensation for termination of the TRQ for qualifying worsted wool fabric; and

(2) A payment that is equivalent to the amount the eligible person would have saved during the calendar year immediately preceding the payment for imports of qualifying worsted wool fabric if the lower duty rate under the applicable 2014 HTS subheading(s) of a qualifying worsted wool fabric were in effect.

(c) Calculation of monetized TRQ payment. A payment will be established by calculating the savings that would have been realized by the eligible person for imports of qualifying worsted wool fabric had the lower duty rate been in effect by—

(1) Establishing the reported dollar value of imported worsted wool fabric, for each of the 2014 HTS subheadings of worsted wool fabric, during the calendar year immediately preceding the payment;

(2) Subtracting the duty rate (converted to numeric value) for each applicable 2014 HTS subheading of worsted wool fabric that would have been paid in calendar year 2014 from the duty rate (converted to numeric value) that was actually paid in the calendar year immediately preceding the payment;

(3) For each applicable 2014 HTS subheading of worsted wool fabric, multiplying the numeric values described in paragraphs (c)(1) and (2) of this section; and

(4) Adding each product obtained in paragraph (c)(3) of this section.

(d) Annual affidavit—(1) In general. An eligible person applying for a payment under this section shall comply with all applicable reporting requirements of this section and of § 1471.10.

(2) Specific business information—(i) Imports and production. An eligible person shall, for the entire calendar year immediately preceding the payment, report the actual dollar value and the actual quantity (square meters) of their imports into the U.S. of qualifying worsted wool fabric and the amount of qualifying worsted wool fabric used by the eligible person in the U.S.

(ii) Direct and indirect importers. Eligible persons that directly import qualifying worsted wool fabric and pay the import duty for such wool are considered to be direct importers of the qualifying worsted wool fabric. Persons that import qualifying worsted wool fabric through a third party broker are considered to be indirect importers of the qualifying worsted wool fabric. Eligible persons must state in their annual affidavit whether, in the calendar year immediately preceding the payment, they were direct or indirect importers, and the dollar value of the imported qualifying worsted wool fabric. The reported dollar value of such imports by indirect importers will be subject to a 10% reduction.

(iii) Import documentation. Eligible persons must maintain supporting documentation for the amounts reported on their affidavits and shall provide copies of such supporting documentation upon the request of FAS.

(3) Production of garments or manufacturing of qualifying worsted wool fabric—(i) Production of garments. When reporting the annual dollar value and quantity of imported qualifying worsted wool fabric of the kind described in subheadings 9902.51.11 and 9902.51.15 of the 2014 HTS, an eligible person may either have cut and sewn the wool on its own behalf or had another person cut and sew the wool on behalf of the eligible person, provided the eligible person owned the wool at the time it was cut and sewn.

(ii) Manufacturing of qualifying worsted wool fabric. When reporting the annual dollar value and quantity of imported qualifying worsted wool fabric of the kind described in subheading 9902.51.16 of the 2014 HTS, an eligible person may either have manufactured the wool on its own behalf or had another person manufacture the wool on behalf of the eligible person, provided the eligible person owned the wool at the time of manufacture.

(a) Definitions. In this section the following definitions apply:

(1) Duty. The term “duty” means the duty rate codified in the HTS for a year that is applicable to qualifying wool of the kind described in subheadings 9902.51.13 and 9902.51.14 of the 2014 HTS.

(2) Eligible person. The term “eligible person” means a manufacturer (or a successor-in-interest to the manufacturer) in the U.S. or in a Foreign Trade Zone authorized under the Foreign-Trade Zones Act of 1934 (19 U.S.C. 81a-81u) that, during the calendar year immediately preceding the payment, imported qualifying wool and manufactured the qualifying wool directly or had another person manufacture the qualifying wool, providing the eligible person owned the qualifying wool at the time it was manufactured.

(3) Qualifying wool. The term “qualifying wool” means imported wool yarn of the kind described in subheading 9902.51.13 of the 2014 HTS or imported wool fiber or wool top of the kind described in subheading 9902.51.14 of the 2014 HTS, that, during the calendar year immediately preceding the payment, was imported, either directly or indirectly, by an eligible person (or a successor-in-interest) into the U.S. and manufactured by the eligible person in the U.S.

(4) Successor-in-interest. The term “successor-in-interest” means a person that is eligible to claim a payment under this section as if the person were the original eligible manufacturer, without regard to section 3727, title 31, United States Code. A person may succeed to the status of the successor-in-interest to the eligible person and become eligible for the payment because of—

(i) An assignment of the claim;

(ii) An assignment of the eligible person's right to manufacture under the same trade name; or

(iii) A reorganization of the eligible person.

(b) Import duties. The duties on imports of qualifying wool were suspended in their entirety in section 503 of the Trade and Development Act of 2000. The suspension of the duties for both HTS subheadings of qualifying wool was extended through December 31, 2014. These duties were reinstated as of January 1, 2015.

(c) Duty compensation payment—(1) Calculation of payment. The duty compensation payment of an eligible person will be established by calculating, as provided in paragraphs (c)(2) through (4) of this section, the savings that would have been realized by the eligible person for imports of qualifying wool had the duty suspension been in effect.

(2) Savings for each subheading. The savings realized by an eligible person for imports of qualifying wool under a HTS subheading covered by this section shall be obtained by multiplying:

(i) The reported dollar value of imports under a HTS subheading during the calendar year immediately preceding the payment; and

(ii) The duty applicable to that HTS subheading in the calendar year preceding the payment, converted to numeric value.

(3) Sum of subheading savings. The product obtained in paragraph (c)(2) of this section for imports of qualifying wool previously described under each HTS subheading shall be added to the savings obtained for imports under the other HTS subheading (as applicable).

(4) Duty compensation payment amount. The sum obtained in paragraph (c)(3) of this section shall equal the annual duty compensation payment for the eligible person for the applicable calendar year.

(d) Annual affidavit required—(1) In general. An eligible person applying for a payment under this section shall comply with all applicable reporting requirements described in this section and § 1471.10.

(2) Specific business information—(i) Imports and production. An eligible person shall, for the calendar year immediately preceding the payment, report the actual dollar value and the actual quantity of:

(A) Imports into the U.S. of qualifying wool by the eligible person; and

(B) Such qualifying wool that was manufactured in the U.S. by the eligible person.

(ii) Direct and indirect importers—(A) In general. Eligible persons that import qualifying wool through a third party broker are considered to be indirect importers of the qualifying wool. Persons that directly import qualifying wool and pay the import duty for such wool are considered to be direct importers of the qualifying wool.

(B) Reported dollar value. Eligible persons must state in their annual affidavit whether, in the calendar year immediately preceding the payment, they were direct or indirect importers, and the dollar value of the imported qualifying wool. The reported dollar value of imports by indirect importers will be subject to a 10% reduction.

(C) Affirmation. An eligible person shall annually affirm in the affidavit that, in the calendar year immediately preceding the payment, the eligible person:

(1) Directly or indirectly imported the qualifying wool into the U.S.;

(2) Manufactured the qualifying wool in the U.S.; and

(3) Imported qualifying wool from the country of origin identified in the affidavit.

(iii) Import documentation. Eligible persons must maintain supporting documentation for the amounts reported on their affidavits and shall provide copies of such supporting documentation upon the request of FAS.

(3) Manufacture of qualifying wool. When reporting the annual dollar value and quantity of imported qualifying wool, and the annual dollar value and quantity of the qualifying wool that was manufactured, an eligible person may either have manufactured the qualifying wool on its own behalf or had another person manufacture the qualifying wool, provided the eligible person owned the qualifying wool at the time of manufacture.