[Federal Register Volume 61, Number 231 (Friday, November 29, 1996)]
[Proposed Rules]
[Pages 60637-60639]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-30318]
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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.
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Federal Register / Vol. 61, No. 231 / Friday, November 29, 1996 /
Proposed Rules
[[Page 60637]]
DEPARTMENT OF AGRICULTURE
Farm Service Agency
7 CFR Part 735
RIN 0560-AE60
Amendments to the Regulations for Cotton Warehouses Under the
United States Warehouse Act--Electronic Warehouse Receipts, Insurance
Requirements, and Other Provisions
AGENCY: Farm Service Agency, USDA.
ACTION: Proposed rule.
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SUMMARY: The Farm Service Agency (FSA) is proposing to amend
regulations under the United States Warehouse Act (USWA) to allow
warehousemen to issue electronic cotton warehouse receipts for more
than one bale (lots) of cotton and clarify other sections as
applicable. In 1990 and 1992 the USWA was amended to allow cotton
warehousemen to issue cotton warehouse receipts in electronic format.
Presently, the applicable regulations require warehousemen, who elect
to use electronic warehouse receipts, to issue all receipts as single
bale.
DATES: Comments must be received by January 28, 1997, in order to be
assured of consideration.
ADDRESSES: Comments must be submitted to the Director, Warehouse and
Inventory Division, Farm Service Agency, Stop 0553, P.O. Box 2415,
5962-South Agriculture Building, Washington, D.C., 20013-2415,
telephone 202-720-2121, FAX 202-690-3123.
All submissions will be available for public inspection in room
5962-South Agriculture Building, U.S. Department of Agriculture, 1400
Independence Ave., S.W., Washington, D.C., between 8 a.m. and 4:30
p.m., Monday through Friday, except holidays.
FOR FURTHER INFORMATION CONTACT: Steve Mikkelsen, Chief, Licensing
Authority Branch, Warehouse and Inventory Division, USDA, FSA, P.O. Box
2415, Stop 0553, Washington, D.C., 20013-2415; Telephone 202-720-7433
or FAX 202-690-3123.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This proposed 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 12778
This proposed rule has been reviewed in accordance with Executive
Order 12778. The provisions of this proposed rule do not preempt State
laws, are not retroactive, and do not involve administrative appeals.
Paperwork Reduction Act
The amendments set forth in this proposed 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 proposed rule, because it has been determined that
this rule will not have a significant effect on a substantial number of
small businesses. Licensing under the USWA is strictly voluntary on the
warehouse operator's part.
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 the USWA, the Secretary has the
authority to license public warehousemen storing cotton (7 U.S.C. 241
et seq.). As a part of this licensing authority, the Secretary has the
responsibility to regulate the issuance of warehouse receipts through
the cotton warehousemen it licenses (7 U.S.C. 260). The USWA was
amended in 1990 and 1992. Regulations issued on March 31, 1994, permit
the Secretary (through FSA) to allow the cotton warehousemen it
licenses to issue cotton warehouse receipts in electronic format.
Presently, all multiple-bale warehouse receipts for cotton are
issued as paper warehouse receipts and must contain between 25 and 200
bales. This proposed rule contemplates allowing USWA licensed
warehousemen to issue electronic cotton warehouse receipts for more
than one bale (lots) of cotton and removes the requirement that all
EWR's must be issued as single bale receipts.
Generally, a multiple-bale warehouse receipt consists of 90 bales
of cotton but may be issued for other-sized lots, at the warehouseman's
discretion. Cotton is accumulated into lots for varying purposes and
each region of the cotton belt handles the cotton accumulated into
these lots in a different fashion. This proposed rule recognizes these
differences and would modify the method by which each bale and lot must
be identified and weighed, while still requiring an identification for
each bale and lot but allowing for multiple-bale warehouse receipts in
electronic format.
List of Subjects in 7 CFR Part 735
Administrative practice and procedure, Cotton, Reporting and
Recordkeeping requirements, Surety bonds, Warehouses.
Proposed Rule
Accordingly, it is proposed that the provisions of 7 CFR part 735
be amended as follows:
PART 735--COTTON WAREHOUSES
1. The authority citation for part 735 is revised to read as
follows:
Authority: 7 U.S.C. 268.
2. Section 735.2 is amended by revising paragraphs (gg), (hh), and
(ii) to read as follows:
Sec. 735.2 Terms Defined.
* * * * *
(gg) Provider. An individual or entity that maintains EWR's in a
CFS, meets
[[Page 60638]]
the requirements of this part, and has a Provider Agreement with the
Service.
(hh) Provider Agreement. An agreement entered into between the
Secretary and a provider that delineates the provider's
responsibilities and defines the relationship between the provider and
the Service regarding the provider's maintenance and security of EWR's
in the CFS and other requirements of this part.
(ii) User. An individual or entity that uses the provider's CFS,
but shall not include the Service in its regulatory capacity.
3. Section 735.16 is amended by revising paragraphs (a)(5), (a)(9),
(b), and (e) to read as follows:
Sec. 735.16 Form.
(a) * * *
(5) The tag identifier given to each bale of cotton in accordance
with Sec. 735.31;
* * * * *
(9) A statement to the effect that the weight was determined by a
weigher licensed under the U.S. Warehouse Act, except that if the
weight is not so determined at the request of the depositor, or as
permitted in Sec. 735.38, the receipt shall contain a statement to that
effect.
(b) Except when an expiration date authorized by the Department is
shown on the face of the receipt, every negotiable receipt issued for
cotton stored in a licensed warehouse shall be effective until
surrendered for delivery of the cotton, and every non-negotiable
receipt shall be effective until surrendered for delivery of the cotton
or until all cotton covered by the receipt has been delivered in
response to proper delivery orders of the person rightfully entitled to
the cotton: Provided, That nothing contained in this section shall
prohibit a warehouseman from legally selling the cotton when his
accrued storage and other charges approach the current market value of
the cotton.
* * * * *
(e) If a warehouseman issues a receipt omitting the statement of
grade and/or weight on request of the depositor, such receipt shall
have clearly and conspicuously stamped or written on the face thereof,
either one or both of the following ``Not graded on request of the
depositor'' or ``Not weighed on request of the depositor.''
* * * * *
4. Section 735.19 is revised to read as follows:
Sec. 735.19 Printing of receipts.
No receipt shall be issued by a licensed warehouseman unless it is
(a) In a form prescribed by the Administrator,
(b) Upon distinctive paper or card stock specified by the
Administrator,
(c) Printed by a printer with whom the United States has a
subsisting agreement and bond for such printing, and
(d) On paper and/or card stock tinted with ink in the manner
prescribed by the agreement under paragraph (c) of this section.
* * * * *
5. Section 735.21 is amended by revising the first sentence to read
as follows:
Sec. 735.21 Return of receipts before delivery of cotton.
Except as permitted by law or by the regulations in this part, a
warehouseman shall not deliver cotton for which he has issued a
negotiable receipt under the USWA until such receipt has been returned
to him and canceled; and shall not deliver cotton for which he has
issued a non-negotiable receipt until such receipt has been returned to
him or he has obtained from the person lawfully entitled to such
delivery or his authorized agent a written delivery order, properly
signed, specifying by bale or tag number, mark, or identifier each bale
to be delivered from any receipt or receipts. * * *
6. Section 735.31 is amended by revising the section heading and
the first and last sentence to read as follows:
Sec. 735.31 Tags to be attached to bales.
Each warehouseman shall, upon acceptance of any bale of cotton for
storage, unless excepted under Sec. 735.32, immediately attach thereto
an identification tag of good quality which shall identify the bale. *
* * These tags will contain a number, mark, or identifier and shall be
attached in numerical sequence clearly distinguishable from each other.
7. Section 735.32 is amended by revising paragraph (b) and the
first two sentences of paragraph (c) to read as follows:
Sec. 735.32 Arrangement of stored cotton.
* * * * *
(b) If any licensed warehouseman's warehouse receipt is tendered by
any one depositor for storage cotton of same grade and staple and in
such quantity by any one depositor that efficiency of operation
dictates that such cotton should be stored in lots without reference to
visibility of all tags on all bales within any lot, the warehouseman
may store such cotton of same grade and staple belonging to the same
depositor in lots of 1 or more bales as long as the lot originally
contained 2 or more bales: Provided, however, That each bale entering
into the lot must bear an individual bale identification, and each lot
must be so stored that the number of bales within the lot may be
accurately determined.
(c) An individual lot identification shall be affixed by the
warehouseman to each lot of cotton which shall show the lot number and
the number of bales in the lot. The warehouseman shall also maintain an
office record showing the bale or tag number, mark, or identifier of
each bale in the lot and the location of the lot in the warehouse. * *
*
* * * * *
8. Section 735.33 is amended by revising the first sentence and
adding a new sentence after the first sentence to read as follows:
Sec. 735.33 System of accounts.
Each warehouseman shall use for his licensed warehouse a system of
accounts, approved for the purpose by the Service, which shall show for
each bale of cotton the tag number, mark, or identifier mentioned in
Sec. 735.31, its weight, its class when required or ascertained, its
location, the dates received for, and delivered out of, storage, and
the receipts issued and canceled. All such accounts shall include a
detailed record of all moneys received and disbursed and of all
effective insurance policies. * * *
9. Section 735.38 is amended by revising paragraph (a) to read as
follows:
Sec. 735.38 Weighing of cotton; weighing apparatus.
(a) Before being stored in a licensed warehouse, all cotton shall
be weighed at the warehouse by a licensed weigher, and the weight so
determined shall be stated on the warehouse receipt. Point of origin
weights may be used for single bale or lot stored cotton by agreement
with the depositor. Any point of origin weight shown on a warehouse
receipt will be the official warehouse bale or lot weight. Any lot of
cotton tendered for storage on which a multiple bale receipt is issued
must maintain its individual identity and be preserved during storage
and shipment: Provided, That if such lot is broken at the warehouse,
each bale shall be weighed at the warehouse by a licensed weigher
before single bale warehouse receipts are issued.
* * * * *
10. Section 735.40 is amended by revising the text beginning with
the first sentence ``The transferring * * * '' and ending with `` * * *
NOT NEGOTIABLE'' to read as follows:
[[Page 60639]]
Sec. 735.40 Excess storage.
* * * * *
(b) * * *
(3) The transferring (shipping) warehouseman must list all
forwarded bales on a Bill of Lading by receipt number and weight. The
receiving warehouse shall promptly issue a non-negotiable warehouse
receipt for each lot of cotton attaching a copy of the corresponding
Bill of Lading to each receipt and forward the receipt promptly to the
transferring warehouseman (The receiving warehouseman will store each
lot intact, attach a header card showing the receipt number, number of
bales, and a copy of the Bill of Lading with the individual tag
numbers, marks, or identifiers. Such non-negotiable warehouse receipts
shall have printed or stamped in large bold outline letters diagonally
across the face the words ``NOT NEGOTIABLE.'' * * *
* * * * *
11. Section 735.44 is revised to read as follows:
Sec. 735.44 Fire loss to be reported.
If at any time a fire occurs at or within any licensed warehouse,
it shall be the duty of the warehouseman to report immediately the
occurrence of such fire and the extent of damage to the Administrator.
12. Section 735.47 is revised to read as follows:
Sec. 735.47 Certificates to be filed with warehouseman.
When a grade or weight certificate has been issued by a licensed
grader or weigher, a copy of such certificate shall be filed with the
warehouseman in whose warehouse the cotton covered by such certificate
is stored, and such certificates shall become a part of the records of
the licensed warehouseman. All certificates and supporting
documentation that form a basis of any receipt issued by the
warehouseman shall be retained in the records of the licensed
warehouseman until December 31 of the year following the year in which
the receipt based on such certificates or supporting documentation is
canceled.
* * * * *
13. Section 735.49 is amended by revising the second sentence to
read as follows:
Sec. 735.49 Samples; drawing and marking; how.
* * * Each sample shall be appropriately marked to show the tag
number, mark, or identifier of the bale of cotton from which it was
drawn and the date of sampling. * * *
14. Section 735.77 is amended by revising paragraph (c) and by
adding ``and'' to the end of paragraph (f) to read as follows:
Sec. 735.77 Contents of complaint.
* * * * *
(c) The name and location of the licensed warehouse in which the
cotton is stored, and the tag number, mark, or identifier assigned to
each bale of cotton involved in the appeal, the grade or other class
assigned to such cotton by the licensed warehouseman, and the date of
the receipt issued therefor,
* * * * *
15. Section 735.101 is amended by removing paragraph (b),
redesignating paragraphs (c) through (q) as paragraphs (b) through (p),
and revising newly redesignated paragraph (j) to read as follows:
Sec. 735.101 Electronic warehouse receipts.
* * * * *
(j) Prior to issuing EWR's, each warehouseman shall request and
receive from the Service a range of consecutive warehouse receipt
numbers which the warehouseman shall use for the EWR's it issues.
* * * * *
16. Section 735.102 is amended by revising paragraphs (b), (d) (4),
and (f) to read as follows:
Sec. 735.102 Provider requirements and standards for applicants.
* * * * *
(b) User fee charges. Providers shall pay to the Service user fees
set by the Service and announced prior to April of each calendar year.
* * * * *
(d) * * *
(4) The provider or the Service may terminate the provider
agreement without cause solely by giving the other party written notice
60 calendar days prior to the termination.
* * * * *
(f) Application form. Application for a provider agreement shall be
made to the Secretary on forms prescribed and furnished by the Service.
Signed at Washington, DC, on November 20, 1996.
Grant Buntrock,
Administrator, Farm Service Agency.
[FR Doc. 96-30318 Filed 11-27-96; 8:45 am]
BILLING CODE 3410-05-P
