[Congressional Record Volume 160, Number 150 (Wednesday, December 10, 2014)]
[House]
[Pages H9015-H9016]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              UNITED STATES COTTON FUTURES ACT AMENDMENTS

  Mr. AUSTIN SCOTT of Georgia. Mr. Speaker, I move to suspend the rules 
and pass the bill (H.R. 5810) to amend the United States Cotton Futures 
Act to exclude certain cotton futures contracts from coverage under 
such Act.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 5810

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. EXCLUDING CERTAIN COTTON FUTURES CONTRACTS FROM 
                   COVERAGE UNDER UNITED STATES COTTON FUTURES 
                   ACT.

       (a) In General.--Subsection (c)(1) of the United States 
     Cotton Futures Act (7 U.S.C. 15B(c)(1)) is amended--
       (1) by striking ``except that any cotton futures contract'' 
     and inserting the following: ``except that--
       ``(A) any cotton futures contract''; and
       (2) by adding at the end the following new subparagraph:
       ``(B) any cotton futures contract that permits tender of 
     cotton grown outside of the United States is excluded from 
     the coverage of this paragraph and section to the extent that 
     the cotton grown outside of the United States is tendered for 
     delivery under the cotton futures contract.''.
       (b) Application.--The amendments made by subsection (a) 
     shall apply with respect to cotton futures contracts entered 
     into on or after the date of the enactment of this Act.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Georgia (Mr. Austin Scott) and the gentleman from Georgia (Mr. David 
Scott) each will control 20 minutes.
  The Chair recognizes the gentleman from Georgia (Mr. Austin Scott).


                             General Leave

  Mr. AUSTIN SCOTT of Georgia. Mr. Speaker, I ask unanimous consent 
that all Members may have 5 legislative days in which to revise and 
extend their remarks on the bill, H.R. 5810.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Georgia?
  There was no objection.
  Mr. AUSTIN SCOTT of Georgia. Mr. Speaker, I yield as much time as he 
may consume to the gentleman from Georgia (Mr. Westmoreland), my 
colleague.
  Mr. WESTMORELAND. Mr. Speaker, I rise today in support of H.R. 5810.
  This bill would meet the cotton industry's growing need for a rural 
contract for cotton on the United States market.
  H.R. 5810 offers a simple technical fix that is needed due to the 
outdated 1916 Cotton Futures Act in terms of recognizing the global 
cotton trade.
  Recent discussions with USDA revealed that the 1916 Cotton Futures 
Act requires all cotton tendered on a cotton futures contract that is 
listed for trading on a U.S. exchange to be classified by the USDA. 
This is unrealistic, both logistically and financially, for non-U.S. 
cotton stored in warehouses outside the U.S.
  The industry's desire to trade and hedge a more modern contract 
requires a legislative tweak to the 1916 Cotton Futures Act to allow 
for any non-U.S. cotton tendered toward this U.S. contract to be 
inspected and classed by non-USDA personnel.
  Our proposal would not change the regulation of the contract, nor the 
current USDA classing requirement that U.S. cotton must be classified 
by the USDA personnel.
  Additionally, this bill also would not impact fees being generated by 
the USDA in the classing of U.S. cotton, tendered toward the existing 
cotton futures.
  Here is the bottom line. For the industry to be able to hedge the 
2015 cotton crop, they will need a tweak to this futures act that they 
may petition the CFTC for the new world contract to be listed. If H.R. 
5810 is not passed, a new contract would likely be listed at other 
exchanges in Europe or Singapore.
  With such unanimous support for this contract and solution, we hope 
this effort will be considered technical in nature and adopted quickly.
  I urge my colleagues to support the measure.
  Mr. DAVID SCOTT of Georgia. Mr. Speaker, I yield myself such time as 
I may consume.
  As my colleague from Georgia (Mr. Westmoreland) has just eloquently 
stated, there is a great need for this, everybody is in agreement on 
it. The Cotton Number 2 contract is needed as a hedging tool for our 
cotton industry globally. It is needed so that we can have both 
delivery points inside as well as outside the United States because our 
global markets are now more global.
  As my colleague, Mr. Westmoreland, mentioned, we have not touched 
this law since 1916. That is nearly 100 years. You can imagine so much 
has changed. It is very, very much more global, and we do not need to 
put our cotton participants in trade, in marketing, in commodities at a 
disadvantage, as was indicated, to other markets.
  This is urgent. If we do not move within the next 3 weeks, so that we 
can

[[Page H9016]]

have this on the books as law in time for our cotton participants in 
the United States to be able to function for their year 2015--in the 
cotton business you start early, you start in January and February, so 
it is very urgent. The legislation benefits everybody. All participants 
are in agreement.
  The bottom line is that this legislation is about modernization. Our 
markets, as I said before, have become much more global. It is a 
technical correction. It will help our cotton farmers, our cotton 
producers, and those who have to hedge in the marketplace around the 
world, and it does not--does not--put our cotton industry in the United 
States at a disadvantage globally.
  I certainly urge that we all accept this amendment and move forward 
with a very, very important part of American industry, the cotton 
industry.
  I yield back the balance of my time.
  Mr. AUSTIN SCOTT of Georgia. Mr. Speaker, I yield myself such time as 
I may consume.
  As my colleague said, Mr. Speaker, every year, cotton farmers prepare 
their fields. Off the field they must prepare as well, hedging risk and 
protecting themselves from possible disaster with cotton futures 
contracts on U.S. commodity exchanges.
  The Cotton Number 2 contract, which is a U.S.-regulated contract, is 
the benchmark contract for the entire United States cotton industry. 
However, recently, a wide range of cotton industry participants have 
recommended the development of a world cotton contract with delivery 
points inside and outside of the United States. This is in recognition 
of the global nature of today's cotton industry.
  The 1916 Cotton Futures Act requires that all cotton futures 
contracts that are listed on the U.S. exchange must be classed by the 
USDA, regardless of where the cotton is being stored. This structure is 
outdated and does not recognize the global cotton trade that exists 
today.
  H.R. 5810 would simply allow for cotton futures contracts to be 
offered on a U.S. exchange that is based off of the world market price. 
This bill would neither change the regulation of the current futures 
contracts nor the current USDA classing, which requires U.S. cotton be 
classed again by USDA personnel.
  With these technical changes in H.R. 5810, a new cotton futures 
contract will be available in U.S. commodity markets.
  I urge my colleagues to support H.R. 5810. I yield back the balance 
of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Georgia (Mr. Austin Scott) that the House suspend the 
rules and pass the bill, H.R. 5810.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill was passed.
  A motion to reconsider was laid on the table.

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