7 U.S.C. § 7236 — Special marketing loan provisions for up-

Page 1978 TITLE 7—AGRICULTURE § 7235 ton (adjusted to United States quality and lo- cation) established under subsection (d) shall be further adjusted if— (A) the adjusted prevailing world market price is less than 115 percent of the loan rate for upland cotton established under section 7232 of this title, as determined by the Sec- retary; and (B) the Friday through Thursday average price quotation for the lowest-priced United States growth as quoted for Middling (M) 13⁄32-inch cotton delivered C.I.F. Northern Europe is greater than the Friday through Thursday average price of the 5 lowest- priced growths of upland cotton, as quoted for Middling (M) 13⁄32-inch cotton, delivered C.I.F. Northern Europe (referred to in this section as the ‘‘Northern Europe price’’). (2) Further adjustment Except as provided in paragraph (3), the ad- justed prevailing world market price for up- land cotton shall be further adjusted on the basis of some or all of the following data, as available: (A) The United States share of world ex- ports. (B) The current level of cotton export sales and cotton export shipments. (C) Other data determined by the Sec- retary to be relevant in establishing an ac- curate prevailing world market price for up- land cotton (adjusted to United States qual- ity and location). (3) Limitation on further adjustment The adjustment under paragraph (2) may not exceed the difference between— (A) the Friday through Thursday average price for the lowest-priced United States growth as quoted for Middling 13⁄32-inch cot- ton delivered C.I.F. Northern Europe; and (B) the Northern Europe price. (Pub. L. 104–127, title I, § 134, Apr. 4, 1996, 110 Stat. 908.) § 7235. Loan deficiency payments (a) Availability of loan deficiency payments Except as provided in subsection (d), the Sec- retary may make loan deficiency payments available to— (1) producers who, although eligible to ob- tain a marketing assistance loan under sec- tion 7231 of this title with respect to a loan commodity, agree to forgo obtaining the loan for the commodity in return for payments under this section; and (2) effective only for the 2000 and 2001 crop years, producers that, although not eligible to obtain such a marketing assistance loan under section 7231 of this title, produce a contract commodity. (b) Computation A loan deficiency payment under this section shall be computed by multiplying— (1) the loan payment rate determined under subsection (c) for the loan commodity; by (2) the quantity of the loan commodity pro- duced by the eligible producers, excluding any quantity for which the producers obtain a loan under section 7231 of this title. (c) Loan payment rate For purposes of this section, the loan payment rate shall be the amount by which— (1) the loan rate established under section 7232 of this title for the loan commodity; ex- ceeds (2) the rate at which a loan for the com- modity may be repaid under section 7234 of this title. (d) Exception for extra long staple cotton This section shall not apply with respect to extra long staple cotton. (e) Transition A payment to a producer eligible for a pay- ment under subsection (a)(2) that harvested a commodity on or before the date that is 30 days after the promulgation of the regulations imple- menting subsection (a)(2) shall be determined as the date the producer lost beneficial interest in the commodity, as determined by the Secretary. (f) Beneficial interest Subject to subsection (e), a producer shall be eligible for a payment under this section only if the producer has a beneficial interest in the commodity, as determined by the Secretary. (g) Effective date for payment rate determina- tion For the 2001 crop year, the Secretary shall de- termine the amount of the loan deficiency pay- ment to be made under this section to the pro- ducers on a farm with respect to a quantity of a loan commodity using the payment rate in ef- fect under subsection (c) as of the earlier of the following: (1) The date on which the producers mar- keted or otherwise lost beneficial interest in the crop of the loan commodity, as determined by the Secretary. (2) The date the producers requested the payment. (Pub. L. 104–127, title I, § 135, Apr. 4, 1996, 110 Stat. 909; Pub. L. 106–224, title II, § 206, June 20, 2000, 114 Stat. 405; Pub. L. 107–171, title I, § 1205(f)(2), May 13, 2002, 116 Stat. 159.) Editorial Notes AMENDMENTS 2002—Subsec. (a)(2). Pub. L. 107–171, § 1205(f)(2)(A), sub- stituted ‘‘2000 and 2001 crop years’’ for ‘‘2000 crop year’’. Subsec. (g). Pub. L. 107–171, § 1205(f)(2)(B), added sub- sec. (g). 2000—Subsec. (a). Pub. L. 106–224, § 206(a), designated existing provisions as par. (1) and added par. (2). Subsec. (b)(2). Pub. L. 106–224, § 206(b), substituted ‘‘produced by the eligible producers, excluding any quantity for which the producers obtain a loan under section 7231 of this title.’’ for ‘‘that the producers on a farm are eligible to place under loan but for which the producers forgo obtaining the loan in return for pay- ments under this section.’’ Subsecs. (e), (f). Pub. L. 106–224, § 206(c), added sub- secs. (e) and (f). § 7236. Special marketing loan provisions for up- land cotton (a) Cotton user marketing certificates (1) Issuance During the period ending July 31, 2003, the Secretary shall issue marketing certificates or Page 1979 TITLE 7—AGRICULTURE § 7236 cash payments, at the option of the recipient, to domestic users and exporters for docu- mented purchases by domestic users and sales for export by exporters made in the week fol- lowing a consecutive 4-week period in which— (A) the Friday through Thursday average price quotation for the lowest-priced United States growth, as quoted for Middling (M) 13⁄32-inch cotton, delivered C.I.F. Northern Europe exceeds the Northern Europe price by more than 1.25 cents per pound; and (B) the prevailing world market price for upland cotton (adjusted to United States quality and location) does not exceed 134 percent of the loan rate for upland cotton es- tablished under section 7232 of this title. (2) Value of certificates or payments The value of the marketing certificates or cash payments shall be based on the amount of the difference (reduced by 1.25 cents per pound) in the prices during the 4th week of the consecutive 4-week period multiplied by the quantity of upland cotton included in the doc- umented sales. (3) Administration of marketing certificates (A) Redemption, marketing, or exchange The Secretary shall establish procedures for redeeming marketing certificates for cash or marketing or exchange of the certifi- cates for agricultural commodities owned by the Commodity Credit Corporation or pledged to the Commodity Credit Corpora- tion as collateral for a loan in such manner, and at such price levels, as the Secretary de- termines will best effectuate the purposes of cotton user marketing certificates, includ- ing enhancing the competitiveness and mar- ketability of United States cotton. Any price restrictions that would otherwise apply to the disposition of agricultural com- modities by the Commodity Credit Corpora- tion shall not apply to the redemption of certificates under this subsection. (B) Designation of commodities and products To the extent practicable, the Secretary shall permit owners of certificates to des- ignate the commodities and products, in- cluding storage sites, the owners would pre- fer to receive in exchange for certificates. (C) Transfers Marketing certificates issued to domestic users and exporters of upland cotton may be transferred to other persons in accordance with regulations issued by the Secretary. (b) Special import quota (1) Establishment (A) In general The President shall carry out an import quota program during the period ending July 31, 2003, as provided in this subsection. (B) Program requirements Except as provided in subparagraph (C), whenever the Secretary determines and an- nounces that for any consecutive 4-week pe- riod, the Friday through Thursday average price quotation for the lowest-priced United States growth, as quoted for Middling (M) 13⁄32-inch cotton, delivered C.I.F. Northern Europe, adjusted for the value of any certifi- cate issued under subsection (a), exceeds the Northern Europe price by more than 1.25 cents per pound, there shall immediately be in effect a special import quota. (C) Tight domestic supply During any month for which the Secretary estimates the season-ending United States upland cotton stocks-to-use ratio, as deter- mined under subparagraph (D), to be below 16 percent, the Secretary, in making the de- termination under subparagraph (B), shall not adjust the Friday through Thursday av- erage price quotation for the lowest-priced United States growth, as quoted for Mid- dling (M) 13⁄32-inch cotton, delivered C.I.F. Northern Europe, for the value of any cer- tificates issued under subsection (a). (D) Season-ending United States stocks-to- use ratio For the purposes of making estimates under subparagraph (C), the Secretary shall, on a monthly basis, estimate and report the season-ending United States upland cotton stocks-to-use ratio, excluding projected raw cotton imports but including the quantity of raw cotton that has been imported into the United States during the marketing year. (2) Quantity The quota shall be equal to 1 week’s con- sumption of upland cotton by domestic mills at the seasonally adjusted average rate of the most recent 3 months for which data are avail- able. (3) Application The quota shall apply to upland cotton pur- chased not later than 90 days after the date of the Secretary’s announcement under para- graph (1) and entered into the United States not later than 180 days after the date. (4) Overlap A special quota period may be established that overlaps any existing quota period if re- quired by paragraph (1), except that a special quota period may not be established under this subsection if a quota period has been estab- lished under subsection (c). (5) Preferential tariff treatment The quantity under a special import quota shall be considered to be an in-quota quantity for purposes of— (A) section 2703(d) of title 19; (B) section 3203 of title 19; (C) section 2463(d) of title 19; and (D) General Note 3(a)(iv) to the Har- monized Tariff Schedule. (6) ‘‘Special import quota’’ defined In this subsection, the term ‘‘special import quota’’ means a quantity of imports that is not subject to the over-quota tariff rate of a tariff-rate quota. (7) Limitation The quantity of cotton entered into the United States during any marketing year Page 1980 TITLE 7—AGRICULTURE § 7236 under the special import quota established under this subsection may not exceed the equivalent of 5 week’s consumption of upland cotton by domestic mills at the seasonally ad- justed average rate of the 3 months imme- diately preceding the first special import quota established in any marketing year. (c) Limited global import quota for upland cot- ton (1) In general The President shall carry out an import quota program that provides that whenever the Secretary determines and announces that the average price of the base quality of upland cotton, as determined by the Secretary, in the designated spot markets for a month exceeded 130 percent of the average price of such quality of cotton in the markets for the preceding 36 months, notwithstanding any other provision of law, there shall immediately be in effect a limited global import quota subject to the fol- lowing conditions: (A) Quantity The quantity of the quota shall be equal to 21 days of domestic mill consumption of up- land cotton at the seasonally adjusted aver- age rate of the most recent 3 months for which data are available. (B) Quantity if prior quota If a quota has been established under this subsection during the preceding 12 months, the quantity of the quota next established under this subsection shall be the smaller of 21 days of domestic mill consumption cal- culated under subparagraph (A) or the quan- tity required to increase the supply to 130 percent of the demand. (C) Preferential tariff treatment The quantity under a limited global im- port quota shall be considered to be an in- quota quantity for purposes of— (i) section 2703(d) of title 19; (ii) section 3203 of title 19; (iii) section 2463(d) of title 19; and (iv) General Note 3(a)(iv) to the Har- monized Tariff Schedule. (D) Definitions In this subsection: (i) Supply The term ‘‘supply’’ means, using the lat- est official data of the Bureau of the Cen- sus, the Department of Agriculture, and the Department of the Treasury— (I) the carry-over of upland cotton at the beginning of the marketing year (ad- justed to 480-pound bales) in which the quota is established; (II) production of the current crop; and (III) imports to the latest date avail- able during the marketing year. (ii) Demand The term ‘‘demand’’ means— (I) the average seasonally adjusted an- nual rate of domestic mill consumption during the most recent 3 months for which data are available; and (II) the larger of— (aa) average exports of upland cotton during the preceding 6 marketing years; or (bb) cumulative exports of upland cotton plus outstanding export sales for the marketing year in which the quota is established. (iii) Limited global import quota The term ‘‘limited global import quota’’ means a quantity of imports that is not subject to the over-quota tariff rate of a tariff-rate quota. (E) Quota entry period When a quota is established under this subsection, cotton may be entered under the quota during the 90-day period beginning on the date the quota is established by the Sec- retary. (2) No overlap Notwithstanding paragraph (1), a quota pe- riod may not be established that overlaps an existing quota period or a special quota period established under subsection (b). (Pub. L. 104–127, title I, § 136, Apr. 4, 1996, 110 Stat. 909; Pub. L. 105–86, title VII, § 731, Nov. 18, 1997, 111 Stat. 2108; Pub. L. 105–277, div. A, § 101(a) [title VII, § 762], Oct. 21, 1998, 112 Stat. 2681, 2681–36; Pub. L. 106–78, title VIII, § 806, Oct. 22, 1999, 113 Stat. 1179.) Editorial Notes REFERENCES IN TEXT The Harmonized Tariff Schedule, referred to in sub- secs. (b)(5)(D) and (c)(1)(C)(iv), is not set out in the Code. See Publication of Harmonized Tariff Schedule note set out under section 1202 of Title 19, Customs Du- ties. AMENDMENTS 1999—Subsec. (a)(1). Pub. L. 106–78, § 806(a)(1), sub- stituted ‘‘or cash payments, at the option of the recipi- ent,’’ for ‘‘or cash payments’’ in introductory provi- sions. Subsec. (a)(1)(A), (2). Pub. L. 106–78, § 806(a)(2), sub- stituted ‘‘1.25 cents per pound’’ for ‘‘3 cents per pound’’. Subsec. (a)(3)(A). Pub. L. 106–78, § 806(a)(3)(A), sub- stituted ‘‘owned by the Commodity Credit Corporation or pledged to the Commodity Credit Corporation as col- lateral for a loan in such manner, and at such price lev- els, as the Secretary determines will best effectuate the purposes of cotton user marketing certificates, in- cluding enhancing the competitiveness and market- ability of United States cotton’’ for ‘‘owned by the Commodity Credit Corporation in such manner, and at such price levels, as the Secretary determines will best effectuate the purposes of cotton user marketing cer- tificates’’ in first sentence. Subsec. (a)(3)(B). Pub. L. 106–78, § 806(a)(3)(B), struck out at end ‘‘If any certificate is not presented for re- demption, marketing, or exchange within a reasonable number of days after the issuance of the certificate (as determined by the Secretary), reasonable costs of stor- age and other carrying charges, as determined by the Secretary, shall be deducted from the value of the cer- tificate for the period beginning after the reasonable number of days and ending with the date of the presen- tation of the certificate to the Commodity Credit Cor- poration.’’ Subsec. (a)(4). Pub. L. 106–78, § 806(a)(4), struck out heading and text of par. (4). Text read as follows: ‘‘Total expenditures under this subsection shall not ex- ceed $701,000,000 during fiscal years 1996 through 2002.’’ Page 1981 TITLE 7—AGRICULTURE § 7237 Subsec. (b)(1). Pub. L. 106–78, § 806(b)(1), added par. (1) and struck out heading and text of former par. (1). Text read as follows: ‘‘The President shall carry out an im- port quota program that provides that, during the pe- riod ending July 31, 2003, whenever the Secretary deter- mines and announces that for any consecutive 10-week period, the Friday through Thursday average price quotation for the lowest-priced United States growth, as quoted for Middling (M) 13⁄32-inch cotton, delivered C.I.F. Northern Europe, adjusted for the value of any certificates issued under subsection (a) of this section, exceeds the Northern Europe price by more than 3 cents per pound, there shall immediately be in effect a special import quota.’’ Subsec. (b)(7). Pub. L. 106–78, § 806(b)(2), added par. (7). 1998—Subsecs. (a)(1)(A), (2), (b)(1). Pub. L. 105–277 sub- stituted ‘‘3 cents’’ for ‘‘1.25 cents’’. 1997—Subsec. (a)(1). Pub. L. 105–86, § 731(1), in intro- ductory provisions substituted ‘‘During’’ for ‘‘Subject to paragraph (4), during’’ and in subpar. (B) substituted ‘‘134’’ for ‘‘130’’. Subsec. (a)(4), (5). Pub. L. 105–86, § 731(2), (3) redesig- nated par. (5) as (4) and struck out heading and text of former par. (4). Text read as follows: ‘‘The Secretary shall not issue marketing certificates or cash payments under paragraph (1) if, for the immediately preceding consecutive 10-week period, the Friday through Thurs- day average price quotation for the lowest priced United States growth, as quoted for Middling (M) 13⁄32- inch cotton, delivered C.I.F. Northern Europe, adjusted for the value of any certificate issued under this sub- section, exceeds the Northern Europe price by more than 1.25 cents per pound.’’ Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1997 AMENDMENT Pub. L. 105–86, title VII, § 731, Nov. 18, 1997, 111 Stat. 2108, provided that the amendment made by that sec- tion is effective on Oct. 1, 1998. § 7236a. Special competitive provisions for extra long staple cotton (a) Competitiveness program Notwithstanding any other provision of law, during the period beginning on October 1, 1999, and ending on July 31, 2003, the Secretary shall carry out a program to maintain and expand the domestic use of extra long staple cotton pro- duced in the United States, to increase exports of extra long staple cotton produced in the United States, and to ensure that extra long sta- ple cotton produced in the United States re- mains competitive in world markets. (b) Payments under program; trigger Under the program, the Secretary shall make payments available under this section when- ever— (1) for a consecutive 4-week period, the world market price for the lowest priced competing growth of extra long staple cotton (adjusted to United States quality and location and for other factors affecting the competitiveness of such cotton), as determined by the Secretary, is below the prevailing United States price for a competing growth of extra long staple cot- ton; and (2) the lowest priced competing growth of extra long staple cotton (adjusted to United States quality and location and for other fac- tors affecting the competitiveness of such cot- ton), as determined by the Secretary, is less than 134 percent of the loan rate for extra long staple cotton. (c) Eligible recipients The Secretary shall make payments available under this section to domestic users of extra long staple cotton produced in the United States and exporters of extra long staple cotton pro- duced in the United States who enter into an agreement with the Commodity Credit Corpora- tion to participate in the program under this section. (d) Payment amount Payments under this section shall be based on the amount of the difference in the prices re- ferred to in subsection (b)(1) during the fourth week of the consecutive 4-week period multi- plied by the amount of documented purchases by domestic users and sales for export by exporters made in the week following such a consecutive 4-week period. (e) Form of payment Payments under this section shall be made through the issuance of cash or marketing cer- tificates, at the option of eligible recipients of the payments. (Pub. L. 104–127, title I, § 136A, as added Pub. L. 106–113, div. B, § 1000(a)(5) [title I, § 104(c)], Nov. 29, 1999, 113 Stat. 1536, 1501A–291.) § 7237. Availability of recourse loans for high moisture feed grains and seed cotton and other fibers (a) High moisture feed grains (1) Recourse loans available For each of the 1996 through 2002 crops of corn and grain sorghum, the Secretary shall make available recourse loans, as determined by the Secretary, to producers on a farm con- taining eligible cropland covered by a produc- tion flexibility contract who— (A) normally harvest all or a portion of their crop of corn or grain sorghum in a high moisture state; (B) present— (i) certified scale tickets from an in- spected, certified commercial scale, in- cluding a licensed warehouse, feedlot, feed mill, distillery, or other similar entity ap- proved by the Secretary, pursuant to regu- lations issued by the Secretary; or (ii) field or other physical measurements of the standing or stored crop in regions of the United States, as determined by the Secretary, that do not have certified com- mercial scales from which certified scale tickets may be obtained within reasonable proximity of harvest operation; (C) certify that they were the owners of the feed grain at the time of delivery to, and that the quantity to be placed under loan under this subsection was in fact harvested on the farm and delivered to, a feedlot, feed mill, or commercial or on-farm high-mois- ture storage facility, or to a facility main- tained by the users of corn and grain sor- ghum in a high moisture state; and (D) comply with deadlines established by the Secretary for harvesting the corn or grain sorghum and submit applications for