Cotton Futures Classification: Optional Classification Procedure, 54970-54971 [2013-21658]
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54970
Proposed Rules
Federal Register
Vol. 78, No. 174
Monday, September 9, 2013
This section of the FEDERAL REGISTER
contains notices to the public of the proposed
issuance of rules and regulations. The
purpose of these notices is to give interested
persons an opportunity to participate in the
rule making prior to the adoption of the final
rules.
DEPARTMENT OF AGRICULTURE
FOR FURTHER INFORMATION CONTACT:
Agricultural Marketing Service
7 CFR Part 27
[AMS–CN–13–0043]
RIN 0581–AD33
Cotton Futures Classification: Optional
Classification Procedure
AGENCY:
Agricultural Marketing Service,
USDA.
ACTION: Proposed rule.
The Agricultural Marketing
Service (AMS) proposes regulatory
amendments that would allow for the
addition of an optional cotton futures
classification procedure—identified and
known as ‘‘registration’’ by the U.S.
cotton industry and the Intercontinental
Exchange (ICE). In response to requests
from the U.S. cotton industry and ICE,
AMS proposes to offer a futures
classification option whereby cotton
bales may be certificated for the purpose
of an exchange’s cotton futures contract
using Smith-Doxey data to verify that
submitted bales meet more restrictive
quality requirements and age parameters
established by that exchange. The
implementation of ICE’s Cotton
Resolution No. 2 is scheduled to
commence with the March 2014
contract month. It is anticipated that
AMS would make the futures
classification option available December
2013.
DATES: Comments must be received on
or before October 9, 2013.
ADDRESSES: Interested persons may
comment on the proposed rule using the
following procedures:
• Internet: https://
www.regulations.gov.
• Mail: Comments may be submitted
by mail to: Darryl Earnest, Deputy
Administrator, Cotton & Tobacco
Programs, AMS, USDA, 3275 Appling
Road, Room 11, Memphis, TN 38133.
Comments should be submitted in
triplicate. All comments should
reference the docket number and the
tkelley on DSK3SPTVN1PROD with PROPOSALS
SUMMARY:
VerDate Mar<15>2010
17:22 Sep 06, 2013
Jkt 229001
date and the page of this issue of the
Federal Register. All comments will be
available for public inspection during
regular business hours at Cotton &
Tobacco Program, AMS, USDA, 3275
Appling Road, Memphis, TN 38133. A
copy of this notice may be found at:
www.ams.usda.gov/cotton/
rulemaking.htm.
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.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
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 that 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 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
approximately sixty cotton merchant
organizations of various sizes active in
trading U.S. cotton. Cotton merchants
voluntarily use the AMS cotton futures
classification services 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). Establishing the
registration option for cotton futures
classification will not significantly
PO 00000
Frm 00001
Fmt 4702
Sfmt 4702
affect small businesses as defined in the
RFA because:
(1) The established user fee for cotton
futures classification services is $3.50
per bale (7 CFR 27.80). Users choosing
the registration option would incur no
additional charges;
(2) The established cotton futures
classification fee represents a very small
portion of the cost per-unit currently
borne by those entities utilizing the
service;
(3) The average price paid to
producers for cotton from the 2012 crop
was 72.05 cents per pound, making a
500 pound bale of cotton worth an
average of $360.25. The current user fee
for futures classification services, $3.50
per bale, is less than one percent of the
average value of a bale of cotton;
(4) The fee for this service will not
affect competition in the marketplace;
(5) The futures classification option is
expected to streamline marketing and
create logistical efficiencies for all
entities utilizing this option; and
(6) The use of futures classification
services are voluntary. For fiscal year
2012, there were 318,337 cotton futures
samples (approximately 2.1 percent of
the 2012 cotton crop) voluntarily
submitted for the futures classification
service.
Paperwork Reduction Act
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
proposed rule have been previously
approved by OMB and were assigned
OMB control number 0581–0008, Cotton
Classing, Testing, And Standards.
Background
The Act requires USDA-verified
quality measurements for each bale to
be included in futures contracts for the
purpose of verifying that each bale
meets the minimum quality
requirements for cotton futures trading.
Furthermore, the Act authorizes the
charging of user fees required to recover
the cost associated with providing
futures quality verification services.
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
E:\FR\FM\09SEP1.SGM
09SEP1
tkelley on DSK3SPTVN1PROD with PROPOSALS
Federal Register / Vol. 78, No. 174 / Monday, September 9, 2013 / Proposed Rules
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 AMS 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 data to assign qualityadjusted market values to U.S. cotton
and market U.S. cotton both
domestically and internationally. SmithDoxey data is commonly used by the
cotton merchant community to indicate
which bales may be tenderable against
a cotton futures contract.
Conventional procedures employed
for verifying quality measurements for
bales to be included in futures contracts
consists of two futures classifications:
(1) Initial futures classification and (2)
final futures classification. AMS, Cotton
and Tobacco Programs revised these
procedures to incorporate Smith-Doxey
data into the cotton futures
classification process in March 2012 (77
FR 5379). When verified by a futures
classification, Smith-Doxey data serves
as an initial futures classification with
the verifying futures classification
serving as a final futures classification.
The use of Smith-Doxey data
significantly reduced the number of
futures classifications required for many
of the bales that were submitted for
certification.
The successful incorporation of
Smith-Doxey data into the futures
classification procedures prompted the
U.S. cotton industry and ICE to request
that the AMS, Cotton and Tobacco
Programs use Smith-Doxey data to
certify that bales submitted for quality
verification meet more restrictive
quality requirements and age parameters
set by ICE for use in a cotton futures
contract. The U.S. cotton industry and
ICE refer to this optional procedure the
‘‘registration option’’. Furthermore, the
U.S. cotton industry and ICE have
requested that AMS, Cotton and
Tobacco Programs make this option
available in December 2013 to coincide
with the implementation of ICE’s Cotton
Resolution No. 2, which is scheduled to
commence with the March 2014
contract month.
The established user fee for cotton
futures classification services is $3.50
per bale (7 CFR 27.80). Customers
choosing this cotton futures
classification option would incur this
charge. In the event that AMS
determines that a bale submitted under
VerDate Mar<15>2010
17:22 Sep 06, 2013
Jkt 229001
this option fails to meet quality or age
parameters set by the exchange
inspection agency, the owner of the bale
would be notified of the bale’s failure.
AMS, Cotton and Tobacco Programs
propose regulatory amendments that
would allow the use of original SmithDoxey data to certify that bales
submitted for quality verification meet
quality and age parameters set by the
applicable exchange inspection agency.
Accordingly, the definition of
‘‘Classification’’ in § 27.2, paragraph (n)
would be amended to allow for the
proposed registration option for the
futures classification services. Also in
§ 27.2, the term ‘‘Smith-Doxey data’’
would be defined in new paragraphs (p).
A thirty day comment period is and
deemed appropriate. It is anticipated
that AMS would make the futures
classification option available December
2013 to coincide with the
implementation of ICE’s Cotton
Resolution No. 2.
List of Subjects in 7 CFR Part 27
Commodity futures, Cotton.
For the reasons set forth in the
preamble, 7 CFR part 27 is proposed to
be amended to read as follows:
PART 27—[Amended]
1. The authority citation for 7 CFR
part 27 is revised to read as follows:
■
Authority: 7 U.S.C. 15b, 7 U.S.C. 473a–b,
7 U.S.C. 1622(g).
2. Amend § 27.2 to revise paragraph
(n) and add paragraph (p) to read as
follows:
■
§ 27.2
Terms Defined.
*
*
*
*
*
(n) Classification. The classification of
any cotton shall be determined by the
quality of a sample in accordance with
the Universal Cotton Standards (the
official cotton standards of the United
States) for cotton property
measurements of American Upland
cotton. High Volume Instruments will
determine all cotton property
measurements except extraneous matter.
Cotton classers authorized by the Cotton
and Tobacco Programs will determine
the presence of extraneous matter.
Original Smith-Doxey data may serve as
certification that bales submitted for
quality verification meet quality and age
parameters set by an applicable
exchange inspection agency as a futures
classification option.
*
*
*
*
*
(p) Smith-Doxey data. Data reflecting
the original classification of a cotton
bale provided to producers of cotton
PO 00000
Frm 00002
Fmt 4702
Sfmt 4702
54971
under the Smith-Doxey Act of April 13,
1937 (Pub. L. 75–28).
*
*
*
*
*
Dated: August 30, 2013.
Rex A. Barnes,
Associate Administrator, Agricultural
Marketing Service.
[FR Doc. 2013–21658 Filed 9–6–13; 8:45 am]
BILLING CODE 3410–02–P
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[REG–161948–05]
RIN 1545–BF43
Limitations on the Importation of Net
Built-In Losses
Internal Revenue Service (IRS),
Treasury.
ACTION: Notice of proposed rulemaking.
AGENCY:
This document contains
proposed regulations under sections
334(b)(1)(B) and 362(e)(1) of the Internal
Revenue Code of 1986 (Code). The
proposed regulations apply to certain
nonrecognition transfers of loss property
to corporations that are subject to
Federal income tax. The proposed
regulations affect the corporations
receiving the loss property. This
document also invites comments from
the public regarding these proposed
regulations.
SUMMARY:
Written or electronic comments
and a request for a public hearing must
be received by December 9, 2013.
ADDRESSES: Send submissions to
CC:PA:LPD:PR (REG 161948–05), Room
5203, Internal Revenue Service, P.O.
Box 7604, Ben Franklin Station,
Washington, DC 20044. Submissions
may be hand-delivered Monday through
Friday between the hours of 8 a.m. and
4 p.m. to CC:PA:LPD:PR (REG–161948–
05), Courier’s Desk, Internal Revenue
Service, 1111 Constitution Avenue NW.,
Washington, DC, or sent electronically,
via the Federal eRulemaking Portal at
www.regulations.gov (IRSREG–161948–
05).
DATES:
FOR FURTHER INFORMATION CONTACT:
Concerning the proposed regulations,
John P. Stemwedel (202) 622–7790 or
Theresa A. Abell (202) 622–7000, and,
concerning submissions of comments
and requests for a public hearing,
Oluwafunmilayo (Funmi) Taylor at
(202) 622–7180 (not toll free numbers).
SUPPLEMENTARY INFORMATION:
E:\FR\FM\09SEP1.SGM
09SEP1
Agencies
[Federal Register Volume 78, Number 174 (Monday, September 9, 2013)]
[Proposed Rules]
[Pages 54970-54971]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-21658]
========================================================================
Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
========================================================================
Federal Register / Vol. 78, No. 174 / Monday, September 9, 2013 /
Proposed Rules
[[Page 54970]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 27
[AMS-CN-13-0043]
RIN 0581-AD33
Cotton Futures Classification: Optional Classification Procedure
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Agricultural Marketing Service (AMS) proposes regulatory
amendments that would allow for the addition of an optional cotton
futures classification procedure--identified and known as
``registration'' by the U.S. cotton industry and the Intercontinental
Exchange (ICE). In response to requests from the U.S. cotton industry
and ICE, AMS proposes to offer a futures classification option whereby
cotton bales may be certificated for the purpose of an exchange's
cotton futures contract using Smith-Doxey data to verify that submitted
bales meet more restrictive quality requirements and age parameters
established by that exchange. The implementation of ICE's Cotton
Resolution No. 2 is scheduled to commence with the March 2014 contract
month. It is anticipated that AMS would make the futures classification
option available December 2013.
DATES: Comments must be received on or before October 9, 2013.
ADDRESSES: Interested persons may comment on the proposed rule using
the following procedures:
Internet: https://www.regulations.gov.
Mail: Comments may be submitted by mail to: Darryl
Earnest, Deputy Administrator, Cotton & Tobacco Programs, AMS, USDA,
3275 Appling Road, Room 11, Memphis, TN 38133. Comments should be
submitted in triplicate. All comments should reference the docket
number and the date and the page of this issue of the Federal Register.
All comments will be available for public inspection during regular
business hours at Cotton & Tobacco Program, AMS, USDA, 3275 Appling
Road, Memphis, TN 38133. A copy of this notice may be found at:
www.ams.usda.gov/cotton/rulemaking.htm.
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.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
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 that 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 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 approximately sixty cotton
merchant organizations of various sizes active in trading U.S. cotton.
Cotton merchants voluntarily use the AMS cotton futures classification
services 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 Sec.
121.201). Establishing the registration option for cotton futures
classification will not significantly affect small businesses as
defined in the RFA because:
(1) The established user fee for cotton futures classification
services is $3.50 per bale (7 CFR 27.80). Users choosing the
registration option would incur no additional charges;
(2) The established cotton futures classification fee represents a
very small portion of the cost per-unit currently borne by those
entities utilizing the service;
(3) The average price paid to producers for cotton from the 2012
crop was 72.05 cents per pound, making a 500 pound bale of cotton worth
an average of $360.25. The current user fee for futures classification
services, $3.50 per bale, is less than one percent of the average value
of a bale of cotton;
(4) The fee for this service will not affect competition in the
marketplace;
(5) The futures classification option is expected to streamline
marketing and create logistical efficiencies for all entities utilizing
this option; and
(6) The use of futures classification services are voluntary. For
fiscal year 2012, there were 318,337 cotton futures samples
(approximately 2.1 percent of the 2012 cotton crop) voluntarily
submitted for the futures classification service.
Paperwork Reduction Act
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 proposed rule have been previously approved by OMB and
were assigned OMB control number 0581-0008, Cotton Classing, Testing,
And Standards.
Background
The Act requires USDA-verified quality measurements for each bale
to be included in futures contracts for the purpose of verifying that
each bale meets the minimum quality requirements for cotton futures
trading. Furthermore, the Act authorizes the charging of user fees
required to recover the cost associated with providing futures quality
verification services.
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
[[Page 54971]]
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 AMS 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 data to assign quality-adjusted market values
to U.S. cotton and market U.S. cotton both domestically and
internationally. Smith-Doxey data is commonly used by the cotton
merchant community to indicate which bales may be tenderable against a
cotton futures contract.
Conventional procedures employed for verifying quality measurements
for bales to be included in futures contracts consists of two futures
classifications: (1) Initial futures classification and (2) final
futures classification. AMS, Cotton and Tobacco Programs revised these
procedures to incorporate Smith-Doxey data into the cotton futures
classification process in March 2012 (77 FR 5379). When verified by a
futures classification, Smith-Doxey data serves as an initial futures
classification with the verifying futures classification serving as a
final futures classification. The use of Smith-Doxey data significantly
reduced the number of futures classifications required for many of the
bales that were submitted for certification.
The successful incorporation of Smith-Doxey data into the futures
classification procedures prompted the U.S. cotton industry and ICE to
request that the AMS, Cotton and Tobacco Programs use Smith-Doxey data
to certify that bales submitted for quality verification meet more
restrictive quality requirements and age parameters set by ICE for use
in a cotton futures contract. The U.S. cotton industry and ICE refer to
this optional procedure the ``registration option''. Furthermore, the
U.S. cotton industry and ICE have requested that AMS, Cotton and
Tobacco Programs make this option available in December 2013 to
coincide with the implementation of ICE's Cotton Resolution No. 2,
which is scheduled to commence with the March 2014 contract month.
The established user fee for cotton futures classification services
is $3.50 per bale (7 CFR 27.80). Customers choosing this cotton futures
classification option would incur this charge. In the event that AMS
determines that a bale submitted under this option fails to meet
quality or age parameters set by the exchange inspection agency, the
owner of the bale would be notified of the bale's failure.
AMS, Cotton and Tobacco Programs propose regulatory amendments that
would allow the use of original Smith-Doxey data to certify that bales
submitted for quality verification meet quality and age parameters set
by the applicable exchange inspection agency. Accordingly, the
definition of ``Classification'' in Sec. 27.2, paragraph (n) would be
amended to allow for the proposed registration option for the futures
classification services. Also in Sec. 27.2, the term ``Smith-Doxey
data'' would be defined in new paragraphs (p).
A thirty day comment period is and deemed appropriate. It is
anticipated that AMS would make the futures classification option
available December 2013 to coincide with the implementation of ICE's
Cotton Resolution No. 2.
List of Subjects in 7 CFR Part 27
Commodity futures, Cotton.
For the reasons set forth in the preamble, 7 CFR part 27 is
proposed to be amended to read as follows:
PART 27--[Amended]
0
1. The authority citation for 7 CFR part 27 is revised to read as
follows:
Authority: 7 U.S.C. 15b, 7 U.S.C. 473a-b, 7 U.S.C. 1622(g).
0
2. Amend Sec. 27.2 to revise paragraph (n) and add paragraph (p) to
read as follows:
Sec. 27.2 Terms Defined.
* * * * *
(n) Classification. The classification of any cotton shall be
determined by the quality of a sample in accordance with the Universal
Cotton Standards (the official cotton standards of the United States)
for cotton property measurements of American Upland cotton. High Volume
Instruments will determine all cotton property measurements except
extraneous matter. Cotton classers authorized by the Cotton and Tobacco
Programs will determine the presence of extraneous matter. Original
Smith-Doxey data may serve as certification that bales submitted for
quality verification meet quality and age parameters set by an
applicable exchange inspection agency as a futures classification
option.
* * * * *
(p) Smith-Doxey data. Data reflecting the original classification
of a cotton bale provided to producers of cotton under the Smith-Doxey
Act of April 13, 1937 (Pub. L. 75-28).
* * * * *
Dated: August 30, 2013.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2013-21658 Filed 9-6-13; 8:45 am]
BILLING CODE 3410-02-P