[Code of Federal Regulations]
[Title 7, Volume 10]
[Revised as of January 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR1427.11]

[Page 489-490]
 
                          TITLE 7--AGRICULTURE
 
  CHAPTER XIV--COMMODITY CREDIT CORPORATION, DEPARTMENT OF AGRICULTURE
 
PART 1427_COTTON--Table of Contents
 
     Subpart A_Nonrecourse Cotton Loan and Loan Deficiency Payments
 
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 the receipt or are otherwise acceptable to CCC. The 
warehouse receipt must:

[[Page 490]]

    (1) Contain the gin bale number;
    (2) Contain the warehouse receipt number;
    (3) Be dated on or before the date the producer signs the note and 
security agreement.
    (b) Warehouse receipts, under Sec.  1427.3, when issued as block 
warehouse receipts will be accepted when authorized by CCC only if the 
owner of the warehouse issuing the block warehouse receipt owns the 
cotton represented by the block warehouse receipt and the warehouse is 
not licensed under the U.S. Warehouse Act.
    (c)(1) Each receipt must set out in its written or printed terms the 
tare and the net weight of the bale represented thereby. The net weight 
shown on the warehouse receipt shall be the difference between the gross 
weight as determined by the warehouse at the warehouse site and the tare 
weight. The warehouse receipt may show the net weight established at a 
gin if:
    (i) The gin is in the immediate vicinity of the warehouse and is 
operated under common ownership with such warehouse or in any other case 
in which the showing of gin weights on the warehouse receipts is 
approved by CCC; and
    (ii) Gin weights are permitted by the licensing authority for the 
warehouse.
    (2) The tare shown on the receipt shall be the tare furnished to the 
warehouse by the ginner or entered by the ginner on the gin bale tag. A 
machine card type warehouse receipt reflecting an alteration in gross, 
tare, or net weight will not be accepted by CCC unless it bears, on the 
face of the receipt, the following legend or similar wording approved by 
CCC, duly executed by the warehouse or an authorized representative of 
the warehouse:

Corrected (gross, tare, or net) weight,
(Name of warehouse),
By (Signature or initials),
Date.

    (3) Alterations in other inserted data on a machine card type 
warehouse receipt must be initialed by an authorized representative of 
the warehouse.
    (d) If warehouse storage charges have been paid, the receipt must 
show that date through which the storage charges have been paid.
    (e) If warehouse receiving charges have been paid or waived, the 
warehouse receipt must show such fact. Except for bales stored in the 
States of Alabama, Florida, Georgia, North Carolina, South Carolina, and 
Virginia, if receiving charges due on the bale include a charge, if any, 
for a new set of ties for compressing flat bales tied with ties which 
cannot be reused, the warehouse receipt must indicate the receiving 
charges and include a charge for new set of ties. If the bale is stored 
at a warehouse not having compress facilities and bales shipped from the 
warehouse are normally compressed in transit, the warehouse receipt must 
show the bale ties are not suitable for reuse when the bale is 
compressed and charges will be assessed by the nearest compress in line 
of transit for furnishing new bale ties.
    (f) In any case where loan collateral is forfeited, any unpaid 
storage or receiving charges, not to exceed the amount that accrued from 
the date that all necessary documents were received by CCC to the 
maturity date, will be paid to the warehouse by CCC after loan maturity 
or as soon as practicable after the cotton is ordered shipped by CCC.
    (g) The warehouse receipt must show the compression status of the 
bale; i.e., flat, modified flat, standard, gin standard, standard 
density (short), gin universal, universal density (short), or warehouse 
universal density. The receipt must show if the compression charge has 
been paid, or if the warehouse claims no lien for such compression.