[Federal Register Volume 61, Number 179 (Friday, September 13, 1996)]
[Rules and Regulations]
[Pages 48399-48402]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: X96-10913]



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Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 
Prices of new books are listed in the first FEDERAL REGISTER issue of each 
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Federal Register / Vol. 61, No. 179 / Friday, September 13, 1996 / 
Rules and Regulations

[[Page 48399]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 27


Cotton Classification Under Cotton Futures Legislation

CFR Correction

    In Title 7 of the Code of Federal Regulations, parts 27 to 45, 
revised as of January 1, 1996, Secs. 27.62 through 27.67, 27.69, 27.72, 
27.73, 27.80, 27.81, 27.83, 27.85, 27.87, and 27.89 through 27.98 were 
inadvertently omitted. The omitted sections should immediately preceed 
Sec. 27.99 on page 15, and should read as follows:


Sec. 27.62   Conditions for review of classification and for incidental 
Micronaire determination for original applicant.

    The person for whom the classification of cotton has been or is to 
be performed under this subpart may have a review of such 
classification by filing a written application therefor before the 
delivery of such cotton on a basis grade contract and not later than 
the expiration of the seventh business day following the date of the 
first certification of the cotton involved. Such written application 
may be made at the same time as the request for initial classification. 
The written application may also include a request for Micronaire 
determination of the cotton if this service has not been previously 
performed.

[22 FR 10926, Dec. 28, 1957, as amended at 42 FR 40677, Aug. 11, 
1977]


Sec. 27.63  Conditions for review of classification and for Micronaire 
determination for receiver.

    Any receiver of cotton upon a basis grade contract who has not 
redelivered such cotton on a basis grade contract may have a review of 
the classification of any cotton of which the classification has not 
been previously reviewed by filing a written application within 7 
business days following the date of the delivery of cotton class 
certificates in accordance with this subpart. When more than 5,000 
bales of cotton shall have been delivered to the same receiver on the 
same date of delivery, the receiver may, upon proper showing of the 
facts, be allowed 5 additional business days for filing the application 
for review of the classification of any such cotton, provided written 
request for such extension is filed within 7 business days following 
the date of such delivery. In the event of the reissue of certificates 
to replace any certificates delivered, the receiver may have a review 
of the classification of the cotton covered by such reissued 
certificates, provided such review is requested within the time herein 
prescribed, calculated from the date of delivery of such reissued 
certificates. Any such receiver may also have a Micronaire 
determination, with or without review of classification, under these 
same conditions on cotton on which this service has not been previously 
performed under this subpart.

[48 FR 49212, Oct. 25, 1983]


Sec. 27.64  Application for review of classification and for Micronaire 
determination; filing.

    (a) Every application review of classification or for Micronaire 
determination under Sec. 27.62 or Sec. 27.63 shall be filed with the 
Marketing Services Office serving the location at which the cotton is 
stored. The application shall in each case be in the hands of such 
Marketing Services Office within the time specified in Sec. 27.62 or 
Sec. 27.63 for applying for review: Provided, That any Marketing 
Services Office may designate any officer of the Cotton Division or a 
representative of an exchange inspection agency located at another 
point to receive applications, and in such cases the applications shall 
be in the hands of the persons so designated within the time specified. 
Any person making such application shall, upon call of the Marketing 
Services Office or person with whom such application was filed under 
this section, surrender the cotton class certificates covering the 
cotton involved.
    (b) Such applications shall be made on a form furnished or approved 
by the Cotton Division and shall contain (1) the name and address of 
the party, if any, from whom the cotton was received on a basis grade 
contract; (2) the lot numbers of the cotton; and (3) the warehouse bale 
numbers.

[22 FR 10928, Dec. 28, 1957, as amended at 26 FR 1657, Feb. 25, 
1961; 42 FR 40677, Aug. 11, 1977; 48 FR 49213, Oct. 25, 1983]


Sec. 27.65   Completion of review of classification.

    In any case where an application for review of classification or an 
application for Micronaire determination has been filed with respect to 
cotton previously designated as tenderable, such review or 
determination may be completed notwithstanding the subsequent tender of 
such cotton on a basis grade contract.

[22 FR 10926, Dec. 28, 1957, as amended at 42 FR 40677, Aug. 11, 
1977]


Sec. 27.66  Dismissal of application for review.

    Any application for review may be dismissed whenever it shall be 
found by the Area Director or the Director that it was filed without 
good cause or for dilatory purposes.

[48 FR 49213, Oct. 25, 1983]


Sec. 27.67  Use of new samples in reviews and Micronaire 
determinations.

    Unless the use of new samples shall be necessary in the judgment of 
the Area Director, a review classification pursuant to Secs. 27.61 to 
27.72, or a Micronaire determination pursuant to Sec. 27.14, Sec. 27.62 
or Sec. 27.63, shall be made by reference to the samples, if any, of 
the cotton involved in the possession of the Marketing Services Office; 
but if the use of new samples is deemed necessary by the Area Director, 
or if there are no samples of the cotton in the possession of the 
Marketing Services Office, or if the samples of the cotton have been in 
the possession of the Marketing Services Office for more than one year, 
the person requesting the review classsification or Micronaire 
determination shall cause new samples to be drawn for the purpose and 
submitted to the Marketing Services Office in accordance with this 
subpart.

[48 FR 49213, Oct. 25, 1983]


Sec. 27.69  Classification review; notations on certificate.

    When a review of classification is made after the issuance of a 
cotton class certificate, the results of the review classification, the 
date of issuance of the

[[Page 48400]]

review classification results, and the signature of the Head, Grading 
Section shall be entered on the cotton class certificate. Thereupon the 
certificate shall be returned to the person who requested the review.

[48 FR 49213, Oct. 25, 1983]


Sec. 27.72   Withdrawal of application for review.

    Any application for review may be withdrawn by the applicant at any 
time before the review classification of the cotton covered thereby has 
been completed, subject to the payment of such fees, if any, as may be 
assessed pursuant to Secs. 27.80 through 27.92.

Transfers of Cotton


Sec. 27.73  Supervision of transfers of cotton.

    Whenever the owner of any cotton inspected and sampled for 
classification pursuant to this subpart and for which the owner holds 
valid cotton class certificates desires to transfer such cotton to a 
different delivery point, or to a different warehouse at the same 
delivery point, for the purpose of having it made available for 
delivery upon a basis grade contract, such transfer shall be effected 
under the supervision of an exchange inspection agency or a supervisor 
of cotton inspection.

[48 FR 49213, Oct. 25, 1983]

Costs of Classification and Micronaire


Sec. 27.80  Fees; classification, micronaire, 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) Initial classification and certification--$2.00 per bale.
    (b) Review classification and certification--$2.00 per bale.
    (c) Micronaire determination and certification--30 cents per bale.
    (d) Combination service--$3.50 per bale. (Initial classification, 
review classification, and Micronaire determination covered by the same 
request and only the review classification and Micronaire determination 
results certified on cotton class certificates.)
    (e) Supervision, by a supervisor of cotton inspection, of the 
inspection, weighing, or sampling of cotton when any two or more of 
these operations are performed together--$1.60 per bale.
    (f) Supervision, by a supervisor of cotton inspection, of the 
inspection, weighing, or sampling of cotton when any one of these 
operations is performed individually--$1.60 per bale.
    (g) Supervision, by a supervisor of cotton inspection, of transfers 
of cotton to a different delivery point, including issuance of new 
cotton class certificates in substitution for prior certificates--$2.75 
per bale.
    (h) Supervision, by a supervisor of cotton inspection, of transfers 
of cotton to a different warehouse at the same delivery point, 
including issuance of new cotton class certificates in substitution for 
prior certificates--$2.00 per bale.

[51 FR 22061, June 18, 1986, as amended at 55 FR 20440, May 17, 
1990]


Sec. 27.81  Fees; certificates.

    For each new certificate issued in substitution for a prior 
certificate at the request of the holder thereof, for the purpose of 
business convenience, or when made necessary by the transfer of cotton 
under the supervision of any exchange inspection agency as provided in 
Sec. 27.73, the person making the request shall pay a fee of $.70 cents 
for each certificate issued.

[55 FR 20440, May 17, 1990]


Sec. 27.83   No fees for certain certificates.

    No fee shall be collected for a new cotton class certificate issued 
in lieu of a prior certificate solely for the purpose of correcting 
clerical errors therein or for the purpose of substituting a new form 
applicable to outstanding certificates, or without an application 
therefor.


Sec. 27.85   Fees; withdrawn requests or applications.

    When the request for classification, or the application for review 
or classification, of any cotton or the request for Micronaire 
determination for any cotton shall be withdrawn after the service 
requested has been started pursuant to such request or application, the 
person making such request or application shall pay the fee prescribed 
by Sec. 27.80 as to any service completed prior to such withdrawal.


Sec. 27.87   Fees; classification and Micronaire determination 
information.

    Whenever the person who requests the classification of, or 
Micronaire determination for, any cotton, or the person on whose behalf 
such request is made, also requests the transmission by telegraph or 
telephone of information concerning such classification or Micronaire 
determination, the person making the request for such classification or 
determination shall pay, in addition to the applicable costs prescribed 
in this subpart, the cost of tolls incurred in such transmission.


Sec. 27.89  Expenses; inspection; sampling.

    Expense of inspection and sampling, the preparation of the samples 
and the delivery of such samples in accordance with Sec. 27.24, shall 
be borne by the party requesting the classification of the cotton 
involved. When a review of classification or a Micronaire determination 
is requested and samples of the cotton involved are not in possession 
of a Marketing Services Office, the expense of inspection, sampling, 
preparation of samples, and delivery of the samples to the Marketing 
Services Office shall be borne by the party requesting the service.

[48 FR 49213, Oct. 25, 1983]


Sec. 27.90  Bills for payment of fees and expenses.

    The Cotton Division shall deliver bills to all persons from whom 
payment for fees or expenses on account of services under this subpart 
shall be due. Such bills shall be rendered as soon as practicable after 
the last day of each month for the amounts due and unpaid on such day. 
When necessary, in the discretion of the Area Director or the Director, 
any bill may be rendered at an earlier date for any fees and expenses 
then due by the person to whom such bill shall be rendered. Payment of 
any such bill shall be made as soon as possible after the rendition 
thereof, but in any event not later than 2 weeks after such rendition.

[48 FR 49213, Oct. 25, 1983]


Sec. 27.91  Advance deposit may be required.

    If requested by the Area Director with whom the classification 
request is required to be filed or by the Director, the person from 
whom any payment under this subpart may become due shall make an 
advance deposit to cover such payment in such amount as may be 
necessary in the judgment of the official requesting the same.

[48 FR 49213, Oct. 25, 1983]


Sec. 27.92   Method of payment; advance deposit.

    Any payment or advance deposit under this subpart shall be by 
check, draft, or money order, payable to the order of ``Agricultural 
Marketing Service, USDA,'' and may not be made in cash except in cases 
where the total payment or deposit does not exceed $1.

Spot Markets


Sec. 27.93  Bona fide spot markets.

    The following markets have been determined, after investigation, 
and are hereby designated to be bona fide spot markets within the 
meaning of the act:


[[Page 48401]]


    Southeastern, North Delta, South Delta, East Texas and Oklahoma, 
West Texas, Desert Southwest and San Joaquin Valley. Such markets 
will comprise the following areas:

Southeastern

    All counties in the states of Alabama, Florida, Georgia, North 
Carolina and South Carolina and all counties in the state of 
Tennessee east of and including Stewart, Houston, Humphreys, Perry, 
Wayne and Hardin counties.

North Delta

    All counties in the states of Arkansas and Missouri and all 
counties in Tennessee west of and including the counties of Henry, 
Benton, Henderson, Decatur, Chester and McNairy counties and the 
Mississippi counties of Alcorn, Benton, Calhoun, Chickasaw, DeSoto, 
Grenada, Itawamba, Lafayette, Lee, Marshall, Monroe, Panola, 
Pontotoc, Prentiss, Tate, Tippah, Tishomingo, Union and Yalobusha.

South Delta

    All counties in the state of Louisiana and all counties in the 
state of Mississippi not included in the North Delta market.

East Texas and Oklahoma

    All counties in the state of Oklahoma and the Texas counties 
east of and including Montague, Wise, Parker, Erath, Comanche, 
Mills, San Saba, Mason, Sutton, Edwards, Kinney, Maverick, Webb, 
Zapata, Star and Hidalgo counties.

West Texas

    All Texas counties not included in the East Texas, Oklahoma and 
Desert Southwest Markets and the New Mexico counties of Union, Quay, 
Curry, Roosevelt and Lea.

Desert Southwest

    The Texas counties of Val Verde, Crockett, Terrell, Pecos, 
Brewster, Presidio, Jeff Davis, Culberson, Hudspeth and El Paso, all 
New Mexico counties except those included in the West Texas market, 
all counties in the state of Arizona and the California counties 
south of and including Riverside and Orange counties.

San Joaquin Valley

    All California counties except those included in the Desert 
Southwest market.

[53 FR 29326, Aug. 4, 1988]


Sec. 27.94  Spot markets for contract settlement purposes.

    The following are designated as spot markets for the purpose of 
determining as provided in paragraph 15b(f)(3) of the act, the 
differences above or below the contract price which the receiver shall 
pay for grades tendered or deliverable in settlement of a basis grade 
contract:
    (a) For cotton delivered in settlement of any No. 2 contract on the 
New York Cotton Exchange:

    Southeastern, North Delta, South Delta, Eastern Texas and 
Oklahoma, and Desert Southwest.

    (b) [Reserved]

[53 FR 29327, Aug. 4, 1988]

Price Quotations and Differences


Sec. 27.95  Spot markets to conform to Act and regulations.

    Every bona fide spot market shall, as a condition of its 
designation and of the retention thereof, conform to the act and any 
applicable regulations.

[53 FR 29327, Aug. 4, 1988]


Sec. 27.96  Quotations in bona fide spot markets.

    The price or value and differences between the price or value of 
grades and staple lengths of cotton shall be based solely upon the 
official cotton standards of the United States and shall be the actual 
commercial value or price and differences as determined by the sale of 
spot cotton in such spot market. Quotations shall be determined and 
maintained in each designated spot market by the Cotton Division, 
Agricultural Marketing Service, USDA, as follows:
    (a) In spot markets designated to determine differences for the 
settlement of futures contracts, the Cotton Division will on each 
business day determine and quote by bale volume the prices or values of 
base qualities which are deliverable on any active futures contracts, 
as well as the differences for all other qualities deliverable on such 
contracts. The prices or differences for non-deliverable qualities will 
be determined and quoted by bale volume in each such spot market for 
those qualities normally produced or traded in that particular market.
    (b) In spot markets not designated to determine differences for the 
settlement of futures contracts, the Cotton Division will on each 
business day determine and quote by bale volume the prices or 
differences for all qualities of cotton normally produced or traded in 
each such spot market.

[53 FR 29327, Aug. 4, 1988]


Sec. 27.97  Ascertaining the accuracy of price quotations.

    The buyers and sellers of cotton in each spot market shall be 
responsible for providing accurate and timely price, quality, and 
volume of purchases data by growth area to the Cotton Division. The 
Cotton Division is responsible for ascertaining the accuracy of the 
price quotations in each designated spot market. The Cotton Division 
will carry out this responsibility by performing the following duties 
and functions:
    (a) The Cotton Division will collect and analyze pertinent 
information on the prices and values of spot cotton from each spot 
market.
    (b) In the process of determining price quotations, the Cotton 
Division will contact a minimum of three buyers and sellers of cotton 
in each bona fide market at least two times per week during the active 
trading season and one time per week during the remainder of the year 
to obtain information on prices, qualities, volume, and terms of sales 
in sufficient detail to determine quotations.
    (c) The Cotton Division will summarize the price and quality data 
and, based on analysis of this summary, make determinations regarding 
quotations of price, value and differences.
    (d) Quotations for each spot market shall be reviewed and approved 
by the Cotton Division's Market News Branch Chief or Assistant Branch 
Chief prior to publication.
    (e) The Cotton Division will publish the appropriate quotations by 
bale volume for grades, staple lengths, micronaire determinations, and 
other quality factors for each spot market on a daily basis.

(The information collection requirements contained in this section 
were approved by the Office of Management and Budget under OMB 
control number 0581-0029.)

[53 FR 29327, Aug. 4, 1988]


Sec. 27.98  Value of grade where no sale; determination.

    As provided in Sec. 27.96, whenever no sale of a particular grade 
of cotton shall have been made on a given day in a particular spot 
market, the value of such grade in the market on that day will be 
determined as follows:
    (a) If on such given day there shall have been in such market both 
a sale of any higher grade and a sale of any lower grade, the average 
of the declines, or advances, or decline and advance, as the case may 
be, of the next higher grade and the next lower grade so sold shall be 
deducted from, or added to, as the case may be, the value, on the last 
preceding business day, of the grade the value of which on such given 
day is sought to be ascertained.
    (b) If on such given day there shall have been in such market a 
sale of either a higher or a lower grade, but not sales of both, the 
decline or advance of the next higher or the next lower grade so sold 
shall be deducted from, or added to, as the case may be, the value on 
the last preceding business day of the grade the value of which on such 
given day is sought to be ascertained.
    (c) If on such given day there shall have been in such market no 
sale of spot cotton of any grade, the value of each

[[Page 48402]]

grade shall be deemed to be the same as its value therein on the last 
preceding business day, unless in the meantime there shall have been 
bona fide bids and offers, or sales of hedged cotton, or other sales of 
cotton, or changes in prices of futures contracts made subject to the 
act, which in the usual course of business would clearly establish a 
rise or fall in the value of spot cotton in such market, in which case 
such rise or fall may be calculated and added to or deducted from the 
value on the preceding business day of cotton of all grades affected 
thereby.

[53 FR 29327, Aug. 4, 1988]

BILLING CODE 1505-01-D