[Federal Register Volume 75, Number 159 (Wednesday, August 18, 2010)]
[Rules and Regulations]
[Pages 50847-50850]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-20352]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Parts 1423 and 1427

RIN 0560-AH81


Cotton Program Changes for Upland Cotton, Adjusted World Price, 
and Active Shipping Orders

AGENCY: Commodity Credit Corporation, USDA.

ACTION: Final rule, technical corrections.

-----------------------------------------------------------------------

SUMMARY: CCC is amending a previous final rule that implemented the 
2008 Farm Bill provisions for the cotton program. The correction 
removes definitions that are no longer used concerning Northern Europe 
prices for cotton. CCC is also making clarifying changes to the 
regulations for the cotton program and for CCC-approved warehouses. CCC 
is clarifying the payment calculation for upland cotton that is 
eligible for the Economic Adjustment Assistance Program (EAAP) and 
clarifying the definition of ``active shipping order.''

DATES: Effective Date: August 18, 2010.

FOR FURTHER INFORMATION CONTACT: Timothy Murray, Cotton Program 
Manager, Commodity Operations Division, Farm Service Agency, USDA, Mail 
Stop 0533, 1400 Independence Ave, SW., Washington, DC 20250-0572; 
phone: (202) 720-2121; e-mail: [email protected]. Persons with 
disabilities who require alternative means for communication (Braille, 
large print, audiotape, etc.) should contact the USDA Target Center at 
(202) 720-2600 (voice and TDD).

SUPPLEMENTARY INFORMATION: This rule makes three changes to the 
regulations for the cotton program and to the regulations for CCC-
approved warehouses used for cotton. It removes obsolete definitions 
from the regulations for cotton non-recourse loans and loan deficiency 
payments. It clarifies the payment calculation for eligible upland 
cotton to ensure that the EAAP meets the original purpose. It adds 
definitions to the regulations for CCC-approved warehouses to clarify 
the information that cotton warehouse operators must report to CCC.

[[Page 50848]]

Adjusted World Price--Removing Obsolete Definitions

    CCC published a final rule in the Federal Register on November 5, 
2008 (73 FR 65715-65724) implementing changes to the cotton program 
required by the Food, Conservation, and Energy Act of 2008 (the 2008 
Farm Bill, Pub. L. 110-246), including changes in the way the adjusted 
world price for cotton is calculated for the purposes of CCC programs. 
The final rule amended 7 CFR part 1427. That rule inadvertently did not 
remove several terms that are no longer needed and accordingly, this 
correcting amendment removes the terms ``Northern Europe current 
price,'' ``Northern Europe forward price,'' and ``Northern Europe 
price'' from Sec.  1427.3 because these terms are no longer used in 
calculating the adjusted world price.
    Because these terms are defined in 7 CFR part 1427, but not used in 
any of the regulatory provisions in that part, this change should have 
no impact on cotton producers or on CCC cotton programs.

Upland Cotton--Clarifying Eligible Cotton

    The 2008 Farm Bill provides benefits to domestic users of upland 
cotton through EAAP. EAAP provides a payment of four cents ($0.04) for 
each pound of upland cotton consumed by an eligible user during the 
period beginning on August 1, 2008, and ending on July 31, 2012. 
Beginning on August 1, 2012, the value of the assistance provided will 
be 3 cents per pound. As specified in 7 CFR 1427.101, the eligible 
types of cotton for EAAP are baled lint, loose samples that have been 
re-baled, semi-processed motes, and re-ginned (processed) motes.
    Cotton motes are a byproduct of the cotton ginning process. 
Typically, the motes (the waste product from the initial ginning 
process) are run back through the gin to capture the residual cotton 
fiber. In this process, while some usable fiber is recovered, a 
substantial proportion of the waste product by weight is foreign 
material, seeds, and non-usable plant parts. The motes are typically 
reprocessed and cleaned several times before the resulting recovered 
fiber is of a quality suitable for end use.
    The purpose of EAAP is to pay users of upland cotton for usable 
fiber, and not for foreign material, seeds, and non-usable plant parts. 
There has been a sudden increase in the number of pounds of semi-
processed motes submitted for payment under EAAP raising concern about 
the amount of the payment and to address that matter this rule amends 
in the payment calculation for semi-processed and reginned motes in 7 
CFR 1427.105.
    This rule does not change the payment calculation for baled upland 
cotton, including lint, loose samples, or reginned motes, that is used 
without further processing. With respect, however, to unbaled reginned 
motes used in a continuous manufacturing process, the payment will be 
determined based on the weight of the reginned motes after final 
cleaning. It specifies that for semi-processed motes that are of a 
quality suitable, without further processing, for spinning, paper, or 
non-woven cotton fabric, the payment will be calculated on 25 percent 
of the weight (gross weight minus the weight of baling and ties, if 
baled). This is the consistent with the payment calculations and with 
market discounts. The discounts provide a reasonable measure for 
converting cotton-from-motes to the normal baled cotton that is the 
focus of the statute. Eliminating semi-processed motes entirely on the 
grounds that the motes are not, because of their limited uses and their 
nature, really ``cotton'' within the meaning of the statute was 
considered. The 20 percent rule implemented in this rule was considered 
to be a reasonable and proper compromise for treating semi-processed 
motes as compensable cotton.
    A parallel conforming change will be made to the Upland Cotton 
Domestic User Agreement between CCC and participants in the EAAP. This 
change will ensure that the EAAP payments are based on the amount of 
upland cotton actually used for domestic production, and not for 
unusable waste products.

CCC Warehouses--Clarifying Active Shipping Order

    This rule clarifies what an ``active shipping order'' is because 
the term is currently used although not defined in 7 CFR part 1423. To 
clarify the term, this rule adds definitions for ``active shipping 
order,'' ``early shipping order,'' and ``shipping order'' to Sec.  
1423.3. As defined in this rule, early shipping orders and shipping 
orders are types of active shipping orders. An active shipping order, 
as defined in this rule, is an ``early shipping order or shipping 
order, as defined in this section, scheduled for a current cotton 
warehouse reporting week or for a prior reporting week, but not picked 
up.'' An ``early shipping order'' is a list of bale tag numbers sent to 
a cotton warehouse operator without transfer of warehouse receipts. A 
shipping order is a list of bale tag numbers accompanied by the 
transfer of warehouse receipts.
    Operators of CCC-approved cotton warehouses asked for this 
clarifying change, which relates to the information they are required 
to report to CCC. This change should not result in any cost to CCC, 
cotton producers, or the warehouse operators.

Notice and Comment

    These regulations are exempt from the notice and comment 
requirements of the Administrative Procedures Act (5 U.S.C. 553), as 
specified in section 1601(c) of the 2008 Farm Bill, which requires that 
these regulations be promulgated and administered without regard to the 
notice and comment provisions of section 553 of title 5 of the United 
States Code or the Statement of Policy of the Secretary of Agriculture 
effective July 24, 1971 (36 FR 13804) relating to notices of proposed 
rulemaking and public participation in rulemaking. Therefore, these 
regulations are issued as final.

Executive Order 12866

    The Office of Management and Budget (OMB) designated this final 
rule as not significant under Executive Order 12866 and, therefore, OMB 
has not reviewed this rule.

Regulatory Flexibility Act

    This rule is not subject to the Regulatory Flexibility Act because 
FSA is not required to publish a notice of proposed rulemaking for this 
rule.

Environmental Review

    The environmental impacts of this rule have been considered in a 
manner consistent with the provisions of the National Environmental 
Policy Act (NEPA, 42 U.S.C. 4321-4347), the regulations of the Council 
on Environmental Quality (40 CFR parts 1500-1508), and FSA regulations 
for compliance with NEPA (7 CFR part 799). The technical corrections 
identified in this final rule do not change the structure or goals of 
the program and are considered simply administrative in nature. 
Therefore, FSA has determined that NEPA does not apply to this final 
rule and no environmental assessment or environmental impact statement 
will be prepared.

Executive Order 12372

    This program is not subject to Executive Order 12372, which 
requires intergovernmental consultation with State and local officials. 
See the notice related to 7 CFR part 3015, subpart V, published in the 
Federal Register on June 24, 1983 (48 FR 29115).

[[Page 50849]]

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. This final rule is not retroactive and does not preempt 
State or local laws, regulations, or policies unless they represent an 
irreconcilable conflict with this rule. Before any judicial action may 
be brought regarding provisions of this rule, the administrative appeal 
provisions of 7 CFR parts 11 and 780 must be exhausted.

Executive Order 13132

    The policies contained in this rule do not have any substantial 
direct effect on States, on the relationship between the Federal 
Government and the States, or on the distribution of power and 
responsibilities among the various levels of government. Nor does this 
rule impose substantial direct compliance costs on State and local 
governments. Therefore, consultation with the States is not required.

Executive Order 13175

    The policies contained in this rule do not have tribal implications 
that preempt tribal law.

Unfunded Mandates

    Title II of the Unfunded Mandate Reform Act of 1995 (UMRA, Pub. L. 
104-4) requires Federal agencies to assess the effects of their 
regulatory actions on State, local, or tribal governments or the 
private sector. Agencies generally must prepare a written statement, 
including a cost benefit analysis, for proposed and final rules with 
Federal mandates that may result in expenditures of $100 million or 
more in any 1 year for State, local, or tribal governments, in the 
aggregate, or to the private sector. UMRA generally requires agencies 
to consider alternatives and adopt the more cost effective or least 
burdensome alternative that achieves the objectives of the rule. This 
rule contains no Federal mandates as defined by Title II of UMRA for 
State, local, or tribal governments or for the private sector. In 
addition, FSA was not required to publish a notice of proposed 
rulemaking for this rule. Therefore, this rule is not subject to the 
requirements of sections 202 and 205 of UMRA.

Small Business Regulatory Enforcement Fairness Act of 1996

    This rule is not a major rule under the Small Business Regulatory 
Enforcement Fairness Act of 1996, (Pub. L. 104-121, SBREFA). Therefore, 
FSA is not required to delay the effective date for 60 days from the 
date of publication to allow for Congressional review and this rule is 
effective on the date of publication in the Federal Register.

Paperwork Reduction Act

    The regulations in this rule are exempt from requirements of the 
Paperwork Reduction Act (44 U.S.C. Chapter 35), as specified in section 
1601 of the 2008 Farm Bill, which provides that these regulations be 
promulgated and administered without regard to the Paperwork Reduction 
Act.

E-Government Act Compliance

    FSA is committed to complying with the E-Government Act, to promote 
the use of the Internet and other Information technologies to provide 
increased opportunities for citizen access to Government Information 
and services, and for other purposes.

List of Subjects

7 CFR Part 1423

    Agricultural commodities, Honey, Oilseeds, Reporting and 
recordkeeping requirements, Surety bonds, Warehouses.

7 CFR Part 1427

    Cotton, Loan programs--agriculture, Price support programs, 
Reporting and recordkeeping requirements, Warehouses.

0
For the reasons discussed above, this rule amends 7 CFR parts 1423 and 
1427 as follows:

PART 1423--COMMODITY CREDIT CORPORATION APPROVED WAREHOUSES

0
1. The authority citation for part 1423 continues to read as follows:

    Authority: 15 U.S.C. 714b and 714c.


0
2. Amend Sec.  1423.3 by adding, in alphabetical order, definitions for 
``active shipping order,'' ``early shipping order,'' and ``shipping 
order'' to read as follows:


Sec.  1423.3  Definitions.

    Active shipping order means an early shipping order or shipping 
order, as defined in this section, scheduled for a current cotton 
warehouse reporting week or for a prior reporting week, but not picked 
up.
* * * * *
    Early shipping order means a list of bale tag numbers sent to a 
cotton warehouse operator without transfer of warehouse receipts.
* * * * *
    Shipping order means a list of bale tag numbers sent to a cotton 
warehouse operator accompanied by transfer of warehouse receipts.
* * * * *

PART 1427--COTTON

0
3. The authority citation for part 1427 is revised to read as follows:

    Authority:  7 U.S.C. 7231-7236 and 8737; and 15 U.S.C. 714b, and 
714c.


Sec.  1427.3  [Amended]

0
4. Amend Sec.  1427.3 by removing the definitions for ``Northern Europe 
current price,'' ``Northern Europe forward price,'' and ``Northern 
Europe price.''

0
5. Amend Sec.  1427.105 as follows:
0
a. Revise paragraphs (a) and (b) to read as set forth below,
0
b. Remove paragraph (c), and
0
c. Redesignate paragraphs (d) and (e) as paragraphs (c) and (d).


Sec.  1427.105  Payment.

    (a) Payments specified in this subpart will be determined by 
multiplying the payment rate, as specified in Sec.  1427.104, by
    (1) In the case of baled upland cotton, whether lint, loose samples 
or reginned motes, but not semi-processed motes, the net weight of the 
cotton used (gross weight minus the weight of bagging and ties);
    (2) In the case of unbaled reginned motes consumed, without 
rebaling, for an end use in a continuous manufacturing process, the 
weight of the reginned motes after final cleaning; and
    (3) In the case of semi-processed motes which are of a quality 
suitable, without further processing, for spinning, papermaking, or 
manufacture of non-woven cotton fabric, 25 percent of the weight (gross 
weight minus the weight of bagging and ties, if baled) of the semi-
processed motes; provided further, that with respect to semi-processed 
motes that are used prior to August 18, 2010, payment may be allowed by 
CCC in its sole discretion at 100 percent of the weight as determined 
appropriate for a transition of the program to the 25 percent factor.
    (b) In all cases, the payment will be determined based on the 
amount of eligible upland cotton that an eligible domestic user 
consumed during the immediately preceding calendar month. For the 
purposes of this subpart, eligible upland cotton will be considered 
consumed by the domestic user on the date the bale is opened for 
consumption, or if not baled, the date consumed, without further 
processing, in a continuous manufacturing process.
* * * * *


[[Page 50850]]


    Signed in Washington, DC, on August 11, 2010.
Jonathan W. Coppess,
Executive Vice President, Commodity Credit Corporation.
[FR Doc. 2010-20352 Filed 8-17-10; 8:45 am]
BILLING CODE 3410-05-P