[Federal Register Volume 62, Number 75 (Friday, April 18, 1997)]
[Rules and Regulations]
[Pages 19023-19024]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-9683]



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 Rules and Regulations
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  Federal Register / Vol. 62, No. 75 / Friday, April 18, 1997 / Rules 
and Regulations  

[[Page 19023]]


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DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1427

RIN 0560-AF12


Amendments to the Regulations for the Nonrecourse Cotton Loan and 
Loan Deficiency Payment Programs

AGENCY: Commodity Credit Corporation, USDA.

ACTION: Final rule.

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SUMMARY: The Commodity Credit Corporation (CCC) amended regulations for 
the nonrecourse cotton loan and loan deficiency payment (LDP) programs 
by transferring existing requirements regarding open yard storage 
endorsements and fire insurance coverage from the warehouse receipt 
section to the general eligibility section of the regulations.

EFFECTIVE DATE: April 18, 1997.

FOR FURTHER INFORMATION CONTACT: George A. Stickels, Agricultural 
Program Specialist--Cotton, USDA, Farm Service Agency, Price Support 
Division, STOP 0512, 1400 Independence Avenue, SW, Washington, D.C., 
20250-0512; telephone (202) 720-7935.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This final rule has been determined to be not significant and was 
not reviewed by the Office of Management and Budget (OMB) under 
Executive Order 12866.

Executive Order 12372

    This program/activity is not subject to the provisions of Executive 
Order 12372, which requires intergovernmental consultation with State 
and local officials. See the Notice related to 7 CFR part 3015, subpart 
V, published at 48 FR 29115 (June 24, 1983).

Executive Order 12988

    This final rule has been reviewed in accordance with Executive 
Order 12988. The provisions of this final rule do not preempt State 
laws, are not retroactive, and do not involve administrative appeals.

Paperwork Reduction Act

    The amendments set forth in this final rule do not generate any new 
or revised information collection or record keeping requirements on the 
public. The existing information collections were previously cleared by 
OMB and assigned OMB control number 0560-0120.

Regulatory Flexibility Act

    It has been determined that the Regulatory Flexibility Act is not 
applicable to this final rule because it has been determined that this 
rule will not have a significant effect on a substantial number of 
small businesses. Obtaining a cotton loan or LDP is strictly voluntary.

Environmental Evaluation

    It has been determined by an environmental evaluation that this 
action will not have significant impact on the quality of the human 
environment. Therefore, neither an Environmental Assessment nor an 
Environmental Impact Statement is needed.

Background

    Pursuant to the provisions of 7 CFR part 1427, the Secretary has 
the authority to require that specific information be provided on paper 
warehouse receipts or on an electronic warehouse receipt (EWR) record, 
as a condition for obtaining nonrecourse cotton loans or LDP's. For 
cotton to be eligible for a nonrecourse loan or LDP, 7 CFR part 1427 
presently requires that each paper warehouse receipt or EWR must be 
issued by a warehouse with an existing Cotton Storage Agreement (CSA) 
under terms of the United States Warehouse Act; and must indicate that 
any open yard storage endorsement has been rescinded and that the bale 
is covered by fire insurance.
    Warehouses with an existing CSA must: (1) Keep CCC-interest cotton 
stored within a facility approved by CCC; and (2) at all times keep all 
CCC-loan cotton insured against loss or damage by fire. Because of 
these CSA requirements, and because only receipts issued by a warehouse 
with an existing CSA are eligible for CCC loan or LDP, CCC has 
determined it unnecessary that each paper receipt or EWR also indicate 
compliance with open yard endorsement and fire insurance requirements. 
Therefore, CCC has amended 7 CFR part 1427 by transferring open yard 
endorsement and fire insurance requirements from the warehouse receipt 
and insurance section to the general eligibility requirements section.

List of Subjects in 7 CFR Part 1427

    Cotton, Loan programs--agriculture, Packaging and containers, Price 
support programs, Reporting and recordkeeping requirements, Surety 
bonds, Warehouses.

    For the reasons set out in the preamble, 7 CFR part 1427 is amended 
as set forth below.

PART 1427--COTTON

    1. The authority citation for part 1427 continues to read as 
follows:

    Authority: 7 U.S.C. 7231-7237; and 15 U.S.C. 714b and 714c.

    2. Section 1427.5 is amended by revising paragraph (b)(2) to read 
as follows:


Sec. 1427.5  General eligibility requirements.

* * * * *
    (b) * * *
    (2) Be in existence and good condition, be covered by fire 
insurance, be stored in a warehouse with an existing cotton storage 
agreement in accordance with Secs. 1427.1081 through 1427.1089 at the 
time of disbursement of the loan or loan deficiency payment proceeds, 
except as provided in Sec. 1427.23(f), and be stored in approved 
storage as determined in accordance with Sec. 1427.10;
* * * * *
    3. Section 1427.11 is amended by revising the section heading, and 
by revising paragraph (a) to read as follows:


Sec. 1427.11  Warehouse receipts.

    (a) Producers may obtain loans on eligible cotton represented by 
warehouse receipts only if the warehouse receipts meet the definition 
of a warehouse receipt and provide for delivery of the cotton to bearer 
or are properly assigned by endorsement in blank, so as to vest title 
in the holder of

[[Page 19024]]

the receipt or are otherwise acceptable to CCC. The warehouse receipt 
must:
    (1) Contain the gin bale number;
    (2) Contain the warehouse receipt number;
    (3) Be dated on or prior to the date the producer signs the note 
and security agreement.
* * * * *
    Signed at Washington, DC, on April 7, 1997.
Bruce R. Weber,
Acting Executive Vice President, Commodity Credit Corporation.
[FR Doc. 97-9683 Filed 4-17-97; 8:45 am]
BILLING CODE 3410-05-P