Revision of Cotton Futures Classification Procedures, 60388-60390 [2011-25078]
Download as PDF
<![CDATA[
60388
Federal Register / Vol. 76, No. 189 / Thursday, September 29, 2011 / Proposed Rules
from disclosure to subjects or others
related to these activities. Specifically,
the exemptions are required to preclude
subjects of these activities from
frustrating these processes; to avoid
disclosure of activity techniques; to
protect the identities and physical safety
of confidential informants and law
enforcement personnel; to ensure DHS’
ability to obtain information from third
parties and other sources; to protect the
privacy of third parties; and to safeguard
classified information. Disclosure of
information to the subject of the inquiry
could also permit the subject to avoid
detection or apprehension.
The exemptions proposed here are
standard law enforcement and national
security exemptions exercised by a large
number of federal law enforcement and
intelligence agencies. In appropriate
circumstances, where compliance
would not appear to interfere with or
adversely affect the law enforcement
purposes of this system and the overall
law enforcement process, the applicable
exemptions may be waived on a case by
case basis.
A notice of system of records for DHS/
FEMA–012 Suspicious Activity
Reporting System of Records is also
published in this issue of the Federal
Register.
List of Subjects in 6 CFR Part 5
Freedom of information; Privacy.
For the reasons stated in the
preamble, DHS proposes to amend
Chapter I of Title 6, Code of Federal
Regulations, as follows:
PART 5—DISCLOSURE OF RECORDS
AND INFORMATION
1. The authority citation for Part 5
continues to read as follows:
Authority: Pub. L. 107–296, 116 Stat. 2135;
(6 U.S.C. 101 et seq.); 5 U.S.C. 301. Subpart
A also issued under 5 U.S.C. 552. Subpart B
also issued under 5 U.S.C. 552a.
2. Add at the end of Appendix C to
Part 5, the following new paragraph
‘‘60’’:
Appendix C to Part 5—DHS Systems of
Records Exempt From the Privacy Act
jlentini on DSK4TPTVN1PROD with PROPOSALS
*
*
*
*
*
60. The DHS/FEMA–012 Suspicious
Activity Reporting System of Records
consists of electronic and paper records and
will be used by DHS and its components. The
DHS/FEMA–012 Suspicious Activity
Reporting System of Records is a repository
of information held by DHS in connection
with its several and varied missions and
functions, including, but not limited to the
enforcement of civil and criminal laws;
investigations, inquiries, and proceedings
there under; and national security and
intelligence activities. The DHS/FEMA–012
VerDate Mar<15>2010
16:00 Sep 28, 2011
Jkt 223001
Suspicious Activity Reporting System of
Records contains information that is
collected by, on behalf of, in support of, or
in cooperation with DHS and its components
and may contain personally identifiable
information collected by other Federal, state,
local, tribal, foreign, or international
government agencies. The Secretary of
Homeland Security has exempted this system
from the following provisions of the Privacy
Act, subject to limitations set forth in 5
U.S.C. 552a(c)(3); (d); (e)(1), (e)(4)(G),
(e)(4)(H), (e)(4)(I); and (f) pursuant to 5 U.S.C.
552a (k)(2). Exemptions from these particular
subsections are justified, on a case-by-case
basis to be determined at the time a request
is made, for the following reasons:
(a) From subsection (c)(3) (Accounting for
Disclosures) because release of the
accounting of disclosures could alert the
subject of an investigation of an actual or
potential criminal, civil, or regulatory
violation to the existence of that investigation
and reveal investigative interest on the part
of DHS as well as the recipient agency.
Disclosure of the accounting would therefore
present a serious impediment to law
enforcement efforts and/or efforts to preserve
national security. Disclosure of the
accounting would also permit the individual
who is the subject of a record to impede the
investigation, to tamper with witnesses or
evidence, and to avoid detection or
apprehension, which would undermine the
entire investigative process.
(b) From subsection (d) (Access to Records)
because access to the records contained in
this system of records could inform the
subject of an investigation of an actual or
potential criminal, civil, or regulatory
violation to the existence of that investigation
and reveal investigative interest on the part
of DHS or another agency. Access to the
records could permit the individual who is
the subject of a record to impede the
investigation, to tamper with witnesses or
evidence, and to avoid detection or
apprehension. Amendment of the records
could interfere with ongoing investigations
and law enforcement activities and would
impose an unreasonable administrative
burden by requiring investigations to be
continually reinvestigated. In addition,
permitting access and amendment to such
information could disclose security-sensitive
information that could be detrimental to
homeland security.
(c) From subsection (e)(1) (Relevancy and
Necessity of Information) because in the
course of investigations into potential
violations of federal law, the accuracy of
information obtained or introduced
occasionally may be unclear, or the
information may not be strictly relevant or
necessary to a specific investigation. In the
interests of effective law enforcement, it is
appropriate to retain all information that may
aid in establishing patterns of unlawful
activity.
(f) From subsections (e)(4)(G), (e)(4)(H),
and (e)(4)(I) (Agency Requirements) and (f)
(Agency Rules), because portions of this
system are exempt from the individual access
provisions of subsection (d) for the reasons
noted above, and therefore DHS is not
required to establish requirements, rules, or
PO 00000
Frm 00004
Fmt 4702
Sfmt 4702
procedures with respect to such access.
Providing notice to individuals with respect
to existence of records pertaining to them in
the system of records or otherwise setting up
procedures pursuant to which individuals
may access and view records pertaining to
themselves in the system would undermine
investigative efforts and reveal the identities
of witnesses, and potential witnesses, and
confidential informants.
Dated: September 9, 2011.
Mary Ellen Callahan,
Chief Privacy Officer, Department of
Homeland Security.
[FR Doc. 2011–24935 Filed 9–28–11; 8:45 am]
BILLING CODE 9110–17–P
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 27
[Doc. #AMS–CN–10–0073; CN–10–005]
RIN 0581–AD16
Revision of Cotton Futures
Classification Procedures
Agricultural Marketing Service,
USDA.
ACTION: Proposed rule.
AGENCY:
The Agricultural Marketing
Service (AMS) is proposing to update
the procedures for cotton futures quality
classification services by using SmithDoxey classification data in the cotton
futures classification process. In
addition, references to a separate and
optional review of cotton futures
certification would be eliminated to
reflect current industry practices. These
proposed changes in procedures for
cotton futures quality classification
services, as well as proposed
conforming changes, reflect advances in
cotton fiber quality measurement and
data processing made since the
regulations were last updated in 1992.
DATES: Comments must be received on
or before October 31, 2011.
ADDRESSES: Interested persons may
comment on the proposed rule using the
following procedures:
• Internet: https://
www.regulations.gov.
• Mail: Darryl Earnest, Deputy
Administrator, Cotton & Tobacco
Programs, AMS, USDA, STOP 0224,
1400 Independence Avenue, SW.,
Washington, DC 20250–0224.
Comments should be submitted in
triplicate. All comments should
reference the docket number, date, and
page number of this issue of the Federal
Register.
All comments will be available for
public inspection at Cotton & Tobacco
SUMMARY:
E:\FR\FM\29SEP1.SGM
29SEP1
Federal Register / Vol. 76, No. 189 / Thursday, September 29, 2011 / Proposed Rules
Program, AMS, USDA, Room 2637–S,
1400 Independence Avenue, SW.,
Washington, DC 20250 during regular
business. Comments, including the
identity of the commenter can also be
reviewed on: https://
www.regulations.gov. A copy of this
notice may be found at: https://
www.ams.usda.gov/cotton/
rulemaking.htm.
FOR FURTHER INFORMATION CONTACT:
Darryl Earnest, Deputy Administrator,
Cotton & Tobacco Programs, AMS,
USDA, STOP 0224, 1400 Independence
Avenue, SW., Washington, DC 20250–
0224. Telephone (202) 720–2145,
facsimile (202) 690–1718, or e-mail
darryl.earnest@ams.usda.gov.
SUPPLEMENTARY INFORMATION: This
proposed 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).
jlentini on DSK4TPTVN1PROD with PROPOSALS
Executive Order 12988
This proposed rule has been reviewed
under Executive Order 12988, Civil
Justice Reform. It is not intended to
have retroactive effect. There are no
administrative procedures which must
be exhausted prior to any judicial
challenge to the provisions of this rule.
Regulatory Flexibility 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 entities.
Fees paid by users of the service are not
changed by this action; implementation
of the new procedures indicates the
existing fees remain sufficient to fully
reimburse AMS for provision of the
services.
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
approximately sixty cotton merchant
organizations of various sizes active in
trading U.S. cotton. Cotton merchants
voluntarily use the AMS cotton futures
classification services annually under
the Cotton Futures Act (Act) (7 U.S.C.
15b). Many of these cotton merchants
are small businesses under the criteria
established by the Small Business
Administration (13 CFR 121.201).
Revisions being proposed reflect the
progress made in quality determination
and data dissemination. The proposed
process changes in the classification of
VerDate Mar<15>2010
16:00 Sep 28, 2011
Jkt 223001
cotton futures will yield increases of
efficiency to the benefit of the cotton
marketing industry.
Paperwork Reduction Act
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. 3501–3520) the
information collection requirements
contained in the regulation to be
amended have been previously
approved by OMB and were assigned
control number 0581–0029.
Background
AMS Cotton and Tobacco Programs is
proposing to revise procedures for
providing services related to the
classification of cotton futures as
authorized by Act by using Smith-Doxey
classification data in the cotton futures
classification process. The Act requires
USDA-certified quality measurements
for each bale included in futures
contracts for the purpose of verifying
that each bale meets the minimum
quality requirements for cotton futures
trading.
USDA was first directed to provide
cotton classification services to
producers of cotton under the SmithDoxey Act of April 13, 1937 (Pub. L. 75–
28). Therefore, the original classification
of a cotton bale’s sample and quality
data which results from this
classification is commonly referred to as
the Smith-Doxey classification or SmithDoxey data. While cotton classification
is not mandatory, practically every
cotton bale grown in the United States
today is classed by USDA under the
authority of the Cotton Statistics and
Estimates Act (7 U.S.C. 471–476) and
the U.S. Cotton Standards Act (7 U.S.C.
51–65) and under regulations found in
7 CFR part 28—Cotton Classing, Testing,
and Standards. The U.S. cotton industry
uses Smith-Doxey classification data to
assign quality-adjusted market values to
U.S. cotton and market U.S. cotton both
domestically and internationally.
Although the Smith-Doxey classification
and the futures classification are
independent measures of cotton quality
that serve different purposes, the SmithDoxey data is used by the cotton
merchant community to indicate which
bales may be tenderable against a cotton
futures contract.
USDA’s cotton classification
capabilities have dramatically improved
as a result of the extensive technological
progress, increasing data accuracy and
operational efficiency. In addition to the
increased accuracy and reliability of
Smith-Doxey data, improvements in
data management and the desire to
PO 00000
Frm 00005
Fmt 4702
Sfmt 4702
60389
increase operational efficiencies have
prompted the Cotton and Tobacco
Programs to propose the use of SmithDoxey classification data in the cotton
futures classification process.
Currently, the futures classification
process is a two-step process that occurs
after the Smith-Doxey classification in
which an initial futures classification is
immediately verified by a review—
commonly referred to as a final futures
classification. When verified by a
futures classification, Smith-Doxey
classification data will serve as the
initial futures classification with the
verifying futures classification serving
as the final futures classification,
reducing the number of futures
classifications required in many
instances. Verification of Smith-Doxey
classing data is necessary because
certain quality characteristics—
especially color—are known to change
over time and when cotton is subjected
to certain environmental conditions.
In cases where the comparison of
Smith-Doxey data and futures
classification data fail to pass preestablished tolerances, the first futures
classification becomes the initial futures
classification and a second futures
classification (final futures
classification) will be required. The use
of Smith-Doxey classification data will
significantly reduce the need for yet
another cotton futures classification.
The proposed changes would improve
operational efficiency while potentially
improving the integrity and accuracy of
classification data provided to the
cotton industry.
For the reasons set forth above, this
proposal would amend 7 CFR part 27—
Cotton Classification Under Cotton
Futures Legislation, which establishes
the procedures for determining cotton
classification for cotton submitted for
futures certification. Specific changes
required to implement the proposed
futures classification procedure include
the elimination of outdated procedures
in sections 27.61–27.67, 27.69 and 27.72
used to guide optional reviews of
futures classifications and the
elimination of references to fees charged
for ‘‘initial classification and
certification’’, ‘‘review classification and
certification’’ and ‘‘combination
services’’ in section 27.80. Conforming
changes would also remove references
to eliminated sections 27.9, 27.14,
27.21., 27.36 and 27.47 and apply
current organizational terminology in
paragraph (h) of section 27.2 and section
27.39.
As stated above, the cotton futures
classification includes a process by
which an initial futures classification is
followed up by a futures final
E:\FR\FM\29SEP1.SGM
29SEP1
60390
Federal Register / Vol. 76, No. 189 / Thursday, September 29, 2011 / Proposed Rules
classification. While not mandatory, this
two-stage process has been deemed
appropriate by the industry. Therefore,
sections 27.61–27.67, 27.69 and 27.72,
which address optional reviews of
futures classifications, are irrelevant.
Furthermore, reference to ‘‘initial
classification and certification’’ fees in
paragraph (a) of section 27.80 are
removed to avoid confusion with SmithDoxey classifications and to reflect that
initial classification fees are already
specified in paragraph (b) of 7 CFR
28.909. Likewise, reference to ‘‘review
classification and certification’’ fees in
paragraph (b) of section 27.80 are
removed since fees for review
classifications are already specified in
7 CFR 28.911.
The term ‘‘combination services’’ in
paragraph (d) of section 27.80 reflects
the current practice of performing an
‘‘initial’’ futures classification and an
immediate ‘‘review’’ futures
classification. Since Smith-Doxey
classification data will serve as the
initial futures classification when
verified by a ‘‘review’’ futures
classification, these services will be
simply defined as ‘‘futures classification
services.’’
List of Subjects in 7 CFR Part 27
Commodity futures, Cotton.
For the reasons set forth in the
preamble it is proposed that 7 CFR part
27 be amended as follows:
PART 27—[AMENDED]
1. The authority citation for 7 CFR
part 27 continues to read as follows:
Authority: 7 U.S.C. 15b, 7 U.S.C. 4736, 7
U.S.C. 1622(g).
Terms defined.
*
*
*
*
*
(h) Cotton Quality Assurance
Division. The Cotton Quality Assurance
Division at Memphis, Tennessee, shall
provide supervision of futures cotton
classification.
*
*
*
*
*
3. Section 27.9 is revised to read as
follows:
jlentini on DSK4TPTVN1PROD with PROPOSALS
§ 27.9 Classing Offices; Cotton Quality
Assurance Division.
16:00 Sep 28, 2011
Jkt 223001
Filing of classification requests.
§ 27.69
[Removed and Reserved]
11. Section 27.69 is removed and
reserved.
Requests for futures classification
shall be filed with the Cotton Quality
Assurance Division within 10 days after
sampling and before classification of the
samples.
§ 27.72
§ 27.21
§ 27.80 Fees; review classification, futures
classification and supervision.
[Removed and Reserved]
5. Section 27.21 is removed and
reserved.
6. Section 27.36 is revised to read as
follows:
§ 27.36 Classification determinations
based on official standards.
All cotton shall be classified on the
basis of the official cotton standards of
the United States in effect at the time of
such classification.
7. Section 27.39 is revised to read as
follows:
§ 27.39
Issuance of classification records.
Except as otherwise provided in this
section, as soon as practicable after the
classification of cotton has been
completed by the Cotton and Tobacco
Programs, the Cotton Quality Assurance
Division shall issue an electronic cotton
classification record showing the results
of such classification. Each electronic
record shall bear the date of its issuance.
The electronic record shall show the
identification of the cotton according to
the information in the possession of the
Cotton and Tobacco Programs, the
classification of the cotton and such
other facts as the Deputy Administrator
may require.
8. Section 27.47 is revised to read as
follows:
Subject to the provisions of §§ 27.52
through 27.55, no cotton shall be
tendered or delivered on a basis grade
contract unless on or prior to the date
fixed for delivery under such contract,
and in advance of final settlement of the
contract, the person making the tender
shall furnish to the person receiving the
same a valid outstanding cotton
classification record complying with the
regulations in this subpart, showing
such cotton to be tenderable on a basis
grade contract.
§ 27.61
Classing Offices shall be maintained
at points designated for the purpose by
the Administrator. The Cotton Quality
Assurance Division shall provide
supervision of futures cotton
classification and perform other duties
as assigned by the Deputy
Administrator.
VerDate Mar<15>2010
§ 27.14
§ 27.47 Tender or delivery of cotton;
conditions.
2. In § 27.2, paragraph (h) is revised
to read as follows:
§ 27.2
4. Section 27.14 is revised to read as
follows:
[Removed and Reserved]
9. The undesignated center heading
preceding § 27.61 is removed and
§ 27.61 is removed and reserved.—
27.67, 27.69 and 27.72 are removed and
reserved.
§§ 27.62–27.67
[Removed and Reserved]
10. Sections 27.62 through 27.67 are
removed and reserved.
PO 00000
Frm 00006
Fmt 4702
Sfmt 4702
[Removed and Reserved]
12. Section 27.72 is removed and
reserved.
13. Section 27.80 is revised to read as
follows:
For services rendered by the Cotton
Division pursuant to this subpart,
whether the cotton involved is
tenderable or not, the person requesting
the services shall pay fees as follows:
(a) [Reserved]
(b) [Reserved]
(c) [Reserved]
(d) Futures classification—$3.50 per
bale.
Dated: September 23, 2011.
David R. Shipman,
Acting Administrator, Agricultural Marketing
Service.
[FR Doc. 2011–25078 Filed 9–28–11; 8:45 am]
BILLING CODE 3410–02–P
DEPARTMENT OF AGRICULTURE
Animal and Plant Health Inspection
Service
7 CFR Parts 305 and 319
[Docket No. APHIS–2009–0100]
RIN 0579–AD35
Irradiation Treatment; Location of
Facilities in the Southern United States
Animal and Plant Health
Inspection Service, USDA.
ACTION: Proposed rule.
AGENCY:
We are proposing to amend
the phytosanitary treatment regulations
to provide generic criteria for new
irradiation treatment facilities in the
Southern States of the United States.
This action would allow irradiation
facilities to be located anywhere in
these States, subject to approval, rather
than only in the currently approved
locations. We are also proposing to
allow for the irradiation treatment of
certain imported fruit from India and
Thailand upon arrival in the United
States. This action would facilitate the
importation of fruit requiring irradiation
treatment while continuing to provide
protection against the introduction of
pests of concern into the United States.
DATES: We will consider all comments
that we receive on or before November
28, 2011.
ADDRESSES: You may submit comments
by either of the following methods:
SUMMARY:
E:\FR\FM\29SEP1.SGM
29SEP1
]]>Agencies
[Federal Register Volume 76, Number 189 (Thursday, September 29, 2011)]
[Proposed Rules]
[Pages 60388-60390]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-25078]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 27
[Doc. AMS-CN-10-0073; CN-10-005]
RIN 0581-AD16
Revision of Cotton Futures Classification Procedures
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Agricultural Marketing Service (AMS) is proposing to
update the procedures for cotton futures quality classification
services by using Smith-Doxey classification data in the cotton futures
classification process. In addition, references to a separate and
optional review of cotton futures certification would be eliminated to
reflect current industry practices. These proposed changes in
procedures for cotton futures quality classification services, as well
as proposed conforming changes, reflect advances in cotton fiber
quality measurement and data processing made since the regulations were
last updated in 1992.
DATES: Comments must be received on or before October 31, 2011.
ADDRESSES: Interested persons may comment on the proposed rule using
the following procedures:
Internet: https://www.regulations.gov.
Mail: Darryl Earnest, Deputy Administrator, Cotton &
Tobacco Programs, AMS, USDA, STOP 0224, 1400 Independence Avenue, SW.,
Washington, DC 20250-0224. Comments should be submitted in triplicate.
All comments should reference the docket number, date, and page number
of this issue of the Federal Register.
All comments will be available for public inspection at Cotton &
Tobacco
[[Page 60389]]
Program, AMS, USDA, Room 2637-S, 1400 Independence Avenue, SW.,
Washington, DC 20250 during regular business. Comments, including the
identity of the commenter can also be reviewed on: https://www.regulations.gov. A copy of this notice may be found at: https://www.ams.usda.gov/cotton/rulemaking.htm.
FOR FURTHER INFORMATION CONTACT: Darryl Earnest, Deputy Administrator,
Cotton & Tobacco Programs, AMS, USDA, STOP 0224, 1400 Independence
Avenue, SW., Washington, DC 20250-0224. Telephone (202) 720-2145,
facsimile (202) 690-1718, or e-mail darryl.earnest@ams.usda.gov.
SUPPLEMENTARY INFORMATION: This proposed 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 proposed rule has been reviewed under Executive Order 12988,
Civil Justice Reform. It is not intended to have retroactive effect.
There are no administrative procedures which must be exhausted prior to
any judicial challenge to the provisions of this rule.
Regulatory Flexibility 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 entities. Fees paid by users of the service
are not changed by this action; implementation of the new procedures
indicates the existing fees remain sufficient to fully reimburse AMS
for provision of the services.
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 approximately sixty cotton
merchant organizations of various sizes active in trading U.S. cotton.
Cotton merchants voluntarily use the AMS cotton futures classification
services annually under the Cotton Futures Act (Act) (7 U.S.C. 15b).
Many of these cotton merchants are small businesses under the criteria
established by the Small Business Administration (13 CFR 121.201).
Revisions being proposed reflect the progress made in quality
determination and data dissemination. The proposed process changes in
the classification of cotton futures will yield increases of efficiency
to the benefit of the cotton marketing industry.
Paperwork Reduction Act
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. 3501-3520) the information collection requirements
contained in the regulation to be amended have been previously approved
by OMB and were assigned control number 0581-0029.
Background
AMS Cotton and Tobacco Programs is proposing to revise procedures
for providing services related to the classification of cotton futures
as authorized by Act by using Smith-Doxey classification data in the
cotton futures classification process. The Act requires USDA-certified
quality measurements for each bale included in futures contracts for
the purpose of verifying that each bale meets the minimum quality
requirements for cotton futures trading.
USDA was first directed to provide cotton classification services
to producers of cotton under the Smith-Doxey Act of April 13, 1937
(Pub. L. 75-28). Therefore, the original classification of a cotton
bale's sample and quality data which results from this classification
is commonly referred to as the Smith-Doxey classification or Smith-
Doxey data. While cotton classification is not mandatory, practically
every cotton bale grown in the United States today is classed by USDA
under the authority of the Cotton Statistics and Estimates Act (7
U.S.C. 471-476) and the U.S. Cotton Standards Act (7 U.S.C. 51-65) and
under regulations found in 7 CFR part 28--Cotton Classing, Testing, and
Standards. The U.S. cotton industry uses Smith-Doxey classification
data to assign quality-adjusted market values to U.S. cotton and market
U.S. cotton both domestically and internationally. Although the Smith-
Doxey classification and the futures classification are independent
measures of cotton quality that serve different purposes, the Smith-
Doxey data is used by the cotton merchant community to indicate which
bales may be tenderable against a cotton futures contract.
USDA's cotton classification capabilities have dramatically
improved as a result of the extensive technological progress,
increasing data accuracy and operational efficiency. In addition to the
increased accuracy and reliability of Smith-Doxey data, improvements in
data management and the desire to increase operational efficiencies
have prompted the Cotton and Tobacco Programs to propose the use of
Smith-Doxey classification data in the cotton futures classification
process.
Currently, the futures classification process is a two-step process
that occurs after the Smith-Doxey classification in which an initial
futures classification is immediately verified by a review--commonly
referred to as a final futures classification. When verified by a
futures classification, Smith-Doxey classification data will serve as
the initial futures classification with the verifying futures
classification serving as the final futures classification, reducing
the number of futures classifications required in many instances.
Verification of Smith-Doxey classing data is necessary because certain
quality characteristics--especially color--are known to change over
time and when cotton is subjected to certain environmental conditions.
In cases where the comparison of Smith-Doxey data and futures
classification data fail to pass pre-established tolerances, the first
futures classification becomes the initial futures classification and a
second futures classification (final futures classification) will be
required. The use of Smith-Doxey classification data will significantly
reduce the need for yet another cotton futures classification. The
proposed changes would improve operational efficiency while potentially
improving the integrity and accuracy of classification data provided to
the cotton industry.
For the reasons set forth above, this proposal would amend 7 CFR
part 27-- Cotton Classification Under Cotton Futures Legislation, which
establishes the procedures for determining cotton classification for
cotton submitted for futures certification. Specific changes required
to implement the proposed futures classification procedure include the
elimination of outdated procedures in sections 27.61-27.67, 27.69 and
27.72 used to guide optional reviews of futures classifications and the
elimination of references to fees charged for ``initial classification
and certification'', ``review classification and certification'' and
``combination services'' in section 27.80. Conforming changes would
also remove references to eliminated sections 27.9, 27.14, 27.21.,
27.36 and 27.47 and apply current organizational terminology in
paragraph (h) of section 27.2 and section 27.39.
As stated above, the cotton futures classification includes a
process by which an initial futures classification is followed up by a
futures final
[[Page 60390]]
classification. While not mandatory, this two-stage process has been
deemed appropriate by the industry. Therefore, sections 27.61-27.67,
27.69 and 27.72, which address optional reviews of futures
classifications, are irrelevant. Furthermore, reference to ``initial
classification and certification'' fees in paragraph (a) of section
27.80 are removed to avoid confusion with Smith-Doxey classifications
and to reflect that initial classification fees are already specified
in paragraph (b) of 7 CFR 28.909. Likewise, reference to ``review
classification and certification'' fees in paragraph (b) of section
27.80 are removed since fees for review classifications are already
specified in 7 CFR 28.911.
The term ``combination services'' in paragraph (d) of section 27.80
reflects the current practice of performing an ``initial'' futures
classification and an immediate ``review'' futures classification.
Since Smith-Doxey classification data will serve as the initial futures
classification when verified by a ``review'' futures classification,
these services will be simply defined as ``futures classification
services.''
List of Subjects in 7 CFR Part 27
Commodity futures, Cotton.
For the reasons set forth in the preamble it is proposed that 7 CFR
part 27 be amended as follows:
PART 27--[AMENDED]
1. The authority citation for 7 CFR part 27 continues to read as
follows:
Authority: 7 U.S.C. 15b, 7 U.S.C. 4736, 7 U.S.C. 1622(g).
2. In Sec. 27.2, paragraph (h) is revised to read as follows:
Sec. 27.2 Terms defined.
* * * * *
(h) Cotton Quality Assurance Division. The Cotton Quality Assurance
Division at Memphis, Tennessee, shall provide supervision of futures
cotton classification.
* * * * *
3. Section 27.9 is revised to read as follows:
Sec. 27.9 Classing Offices; Cotton Quality Assurance Division.
Classing Offices shall be maintained at points designated for the
purpose by the Administrator. The Cotton Quality Assurance Division
shall provide supervision of futures cotton classification and perform
other duties as assigned by the Deputy Administrator.
4. Section 27.14 is revised to read as follows:
Sec. 27.14 Filing of classification requests.
Requests for futures classification shall be filed with the Cotton
Quality Assurance Division within 10 days after sampling and before
classification of the samples.
Sec. 27.21 [Removed and Reserved]
5. Section 27.21 is removed and reserved.
6. Section 27.36 is revised to read as follows:
Sec. 27.36 Classification determinations based on official standards.
All cotton shall be classified on the basis of the official cotton
standards of the United States in effect at the time of such
classification.
7. Section 27.39 is revised to read as follows:
Sec. 27.39 Issuance of classification records.
Except as otherwise provided in this section, as soon as
practicable after the classification of cotton has been completed by
the Cotton and Tobacco Programs, the Cotton Quality Assurance Division
shall issue an electronic cotton classification record showing the
results of such classification. Each electronic record shall bear the
date of its issuance. The electronic record shall show the
identification of the cotton according to the information in the
possession of the Cotton and Tobacco Programs, the classification of
the cotton and such other facts as the Deputy Administrator may
require.
8. Section 27.47 is revised to read as follows:
Sec. 27.47 Tender or delivery of cotton; conditions.
Subject to the provisions of Sec. Sec. 27.52 through 27.55, no
cotton shall be tendered or delivered on a basis grade contract unless
on or prior to the date fixed for delivery under such contract, and in
advance of final settlement of the contract, the person making the
tender shall furnish to the person receiving the same a valid
outstanding cotton classification record complying with the regulations
in this subpart, showing such cotton to be tenderable on a basis grade
contract.
Sec. 27.61 [Removed and Reserved]
9. The undesignated center heading preceding Sec. 27.61 is removed
and Sec. 27.61 is removed and reserved.--27.67, 27.69 and 27.72 are
removed and reserved.
Sec. Sec. 27.62-27.67 [Removed and Reserved]
10. Sections 27.62 through 27.67 are removed and reserved.
Sec. 27.69 [Removed and Reserved]
11. Section 27.69 is removed and reserved.
Sec. 27.72 [Removed and Reserved]
12. Section 27.72 is removed and reserved.
13. Section 27.80 is revised to read as follows:
Sec. 27.80 Fees; review classification, futures classification and
supervision.
For services rendered by the Cotton Division pursuant to this
subpart, whether the cotton involved is tenderable or not, the person
requesting the services shall pay fees as follows:
(a) [Reserved]
(b) [Reserved]
(c) [Reserved]
(d) Futures classification--$3.50 per bale.
Dated: September 23, 2011.
David R. Shipman,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2011-25078 Filed 9-28-11; 8:45 am]
BILLING CODE 3410-02-P
