`[Federal Register Volume 80, Number 1 (Friday, January 2, 2015)]
[Rules and Regulations]
[Pages 114-141]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-30530]



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Vol. 80

Friday,

No. 1

January 2, 2015

Part II





Department of Agriculture





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Farm Service Agency





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7 CFR Part 718





Commodity Credit Corporation





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7 CFR Parts 1400, 1421, 1425, et al.





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Marketing Assistance Loans, Loan Deficiency Payments, and Sugar Loans; 
Final Rule

  Federal Register / Vol. 80 , No. 1 / Friday, January 2, 2015 / Rules 
and Regulations  

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DEPARTMENT OF AGRICULTURE

Farm Service Agency

7 CFR Part 718

Commodity Credit Corporation

7 CFR Parts 1400, 1421, 1425, 1427, 1434, and 1435

RIN 0560-AI28


Marketing Assistance Loans, Loan Deficiency Payments, and Sugar 
Loans

AGENCY: Commodity Credit Corporation and Farm Service Agency, USDA.

ACTION: Final rule.

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SUMMARY: The Farm Service Agency (FSA) is revising regulations on 
behalf of the Commodity Credit Corporation (CCC) as required by the 
Agricultural Act of 2014 (2014 Farm Bill) to update the Marketing 
Assistance Loan (MAL) and Loan Deficiency Payments (LDP) Programs for 
wheat, feed grains, soybeans, oilseeds, peanuts, pulse crops, cotton, 
honey, wool and mohair. In general, the 2014 Farm Bill extends the 
existing programs with the minor changes that are implemented in this 
rule, including a revised formula for upland cotton loan rates. This 
rule also amends the regulations for the Economic Adjustment Assistance 
for Users of Upland Cotton Program, the Extra Long Staple (ELS) Cotton 
Competitiveness Payment Program, and the Sugar Program to reflect that 
the programs were extended by the 2014 Farm Bill. Most of the 
provisions in this rule have already been implemented, beginning with 
the 2014 crop year.

DATES: Effective Date: January 2, 2015.

FOR FURTHER INFORMATION CONTACT: DeAnn Allen; phone (202) 720-9889. 
Persons with disabilities who require alternative means of 
communication (Braille, large print, audio tape, etc.) should contact 
the USDA Target Center at (202) 720-2600 (voice).

SUPPLEMENTARY INFORMATION:

Background

    FSA administers the MAL and LDP Programs for CCC. The 2014 Farm 
Bill (Pub. L. 113-79), extends the existing MAL and LDP programs for 
the 2014 through 2018 crop years with the minor changes that are 
implemented by this rule. Sections 1201 through 1210 and 1301 of the 
2014 Farm Bill authorize the continuation of the MAL and LDP programs, 
the related assistance programs for cotton, and the Sugar Program. The 
changes required by the 2014 Farm Bill include a new formula for upland 
cotton base loan rates, removing the option to use commodity 
certificates to repay a MAL, and setting the payment rate for Economic 
Adjustment Assistance for Users of Upland Cotton Program at 3 cents per 
pound. This rule also makes discretionary changes to clarify the 
regulations and to remove expired provisions.
    This rule updates 7 CFR parts 718, 1400, 1421, 1425, 1427, 1434, 
and 1435 to implement the mandatory changes required by the 2014 Farm 
Bill and the discretionary clarifying changes and technical 
corrections. All applicable handbooks and forms are also being updated 
with conforming changes. An Extension of Authorization was published in 
the Federal Register on March 28, 2014 (79 FR 17388-17390), announcing 
the continuation of the MAL, LDP, and Sugar Programs for the 2014 crop 
year.
    The 2014 Farm Bill changes in this rule have already been 
implemented for the 2014 crop year.

Existing MAL and LDP Program

    Producers of eligible commodities can apply for MALs or LDPs, 
subject to terms and conditions as specified in applicable regulations; 
application deadlines are specified in FSA handbooks. MALs are 9-month 
loans with the commodity pledged as collateral for the loan. A producer 
who is eligible for MAL may choose to receive LDP in lieu of receiving 
a MAL. LDPs allow the producer to receive a payment when the county-
level price for that commodity is below the loan rate, instead of 
pledging the commodity as collateral for MAL. The general structure of 
the MAL and LDP Programs are not changing with this rule. The 2014 Farm 
Bill does not change core eligibility requirements for producers or 
commodities, and it changes the loan rate only for upland cotton.
    MALs and LDPs are available beginning with harvest or shearing 
season for each commodity and extend through the marketing year for 
that particular commodity. Nearly all MALs are nonrecourse loans, 
meaning that the commodity is collateral for MALs and may be delivered 
at maturity as full payment for an outstanding MAL. (Recourse loans are 
available for a few commodities for which long term storage is not 
readily available, meaning that the collateral cannot be delivered as 
full payment for MALs.) MALs and LDPs must be requested on or before 
the final loan availability date for the applicable commodity. 
Producers may repay the MAL at a rate that is the lesser of the loan 
rate plus interest or an alternative repayment rate as determined and 
announced by the U.S. Department of Agriculture (USDA). The repayment 
rate is based on average market prices for the preceding 30 days, or an 
alternative rate set by a similar method established by the Secretary. 
If the market price as reflected in the repayment rate falls below a 
loan rate specified in the 2014 Farm Bill for that commodity, producers 
can redeem a MAL at the repayment rate, or deliver the MAL commodity to 
CCC.
    As an alternative to receiving a MAL, a producer can forgo a MAL, 
and instead, may obtain an LDP on their crop, if LDP is currently 
available for the applicable commodity and the producer is eligible for 
MAL. LDPs allow the producer to receive a payment when the repayment 
rate posted for a commodity is below the loan rate for that commodity.

Upland Cotton National Loan Rate Change

    The 2014 Farm Bill specifies the national loan rates for the 2014 
through 2018 crop years for the eligible loan commodities. Except for 
upland cotton, these loan rates are unchanged from the most recent 
rates for the 2013 crop year that were authorized by the Food, 
Conservation, and Energy Act of 2008 (commonly referred to as the 2008 
Farm Bill), as amended by the American Taxpayer Relief Act, (Pub. L. 
112-240).
    Section 1202(a)(6) of the 2014 Farm Bill (7 U.S.C. 9032(a)(6)) sets 
the base loan rate for upland cotton at no less than $0.45/lb. or more 
than $0.52/lb. based on the average of the adjusted prevailing world 
price for the two immediately preceding marketing years. This change is 
designed to make the loan rate more reflective of prevailing market 
prices, and serves to limit the impact of elevated market prices on the 
loan rate while allowing any price declines below 52 cents to be 
reflected in lower future base loan rates.
    The average upland cotton adjusted world price in recent years has 
been well above 52 cents per pound, so the new formula that uses a 
moving average of previous year prices results in a base loan rate for 
cotton MALs of 52 cents per pound for 2014 and 2015.j

Commodity Certificate References Removed

    The 2014 Farm Bill does not include commodity certificates as an 
option for repaying MALs. Therefore, this rule removes all references 
to commodity certificates in the regulations and removes Sec. Sec.  
1421.110 and 1427.22, which included the provisions for commodity 
certificates.

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    The use of commodity certificates was previously authorized through 
2009, so this change should not impact any current MAL or LDP program 
participants.

Sugar Program

    The 2014 Farm Bill reauthorizes the Sugar Program without change. 
This rule removes references to specific dates and previous legislation 
in 7 CFR part 1435, ``Sugar Program.''

Payment Limitations and Adjusted Gross Income

    Section 1605 of the 2014 Farm Bill establishes payment and income 
limitations that apply to 2014 and subsequent crop, program, or fiscal 
year benefits. FSA previously implemented the payment and income 
limitations through the final rule published on April 14 (79 FR 21086-
21118). The payment and income limitations are specified in 7 CFR part 
1400.
    For the 2014 through 2018 crop years, the payment limit on the 
total amount of payments received, directly or indirectly, from market 
loan gains and LDPs, together with Price Loss Coverage and Agriculture 
Risk Coverage Program payments, is $125,000 per person or legal entity 
for all commodities except peanuts. Peanuts have a separate payment 
limit of $125,000 per person or legal entity for these same programs. 
Attribution of payments under 7 CFR part 1400 applies in administering 
the payment limitation. The average Adjusted Gross Income (AGI) limit 
for most FSA and CCC programs is $900,000. The $900,000 limit is for 
total average AGI, as opposed to the prior multiple limits for farm and 
non-farm income, and the separate limit for conservation programs. 
Producers exceeding payment limits or AGI can apply for and receive a 
MAL, but the MAL must be repaid at principal and interest or the 
producer must forfeit the commodity to CCC in satisfaction of the loan 
debt.
    This rule makes conforming changes to AGI and payment limitation 
references throughout 7 CFR parts 1421, 1425, 1427, and 1434. It also 
makes a technical correction to 7 CFR part 1400 to correctly specify 
which programs require a person to be actively engaged in farming for 
program eligibility.

Summary of Discretionary and Clarifying Changes in This Rule

    In addition to implementing the 2014 Farm Bill changes, FSA is 
making changes resulting from our retrospective review of the 
regulations. Most of the changes are clarifying changes to make the 
regulations clear and consistent.
    Many of the changes in this rule are to 7 CFR part 1421, ``Grains 
and Similarly Handled Commodities--Marketing Assistance Loans and Loan 
Deficiency Payments for 2008 through 2012.'' This rule removes 
references to the DCP and ACRE programs that are no longer authorized, 
removes references to specific crop years and certain legislation, 
clarifies a number of provisions, and removes the option of delivering 
an additional 10 percent of the commodity when transferring farm-stored 
MAL collateral into warehouse storage. This rule also removes the 
option of determining a reasonable yield by using the yields from 3 
similar farms. This rule amends other parts primarily to be consistent 
with part 1421, and with the current part 1400 regulations.
    In 7 CFR part 1425, ``Cooperative Marketing Associations,'' (CMA) 
this rule clarifies market loan gain and LDP distribution to CMA 
members.
    In 7 CFR part 1427, ``Cotton,'' this rule removes references to 
obsolete programs and clarifies dates for the cotton programs that the 
2014 Farm Bill reauthorizes.
    The 2014 Farm Bill reauthorizes the Economic Adjustment Assistance 
for Users of Upland Cotton Program and continues the payment rate of 3 
cents per pound, which it has been since August 1, 2012. This rule 
removes the references to the previous 4 cents per pound rate.
    In 7 CFR part 1434, ``Nonrecourse Marketing Assistance Loan and LDP 
Regulations for Honey,'' this rule removes all references to specific 
forms.

New and Revised Definitions

    This rule amends Sec. Sec.  1421.3 and 1434.3, ``Definitions,'' to 
add a definition for ``calling a loan'' to clarify the process of 
accelerating or moving forward the maturity date of an outstanding MAL. 
This is the process CCC uses when the terms and conditions of the MAL 
note and security agreement are violated, such as when a producer 
incorrectly certifies a loan quantity or makes any fraudulent 
representation with respect to obtaining a loan, or removes or disposes 
of a farm-stored commodity pledged as collateral for a loan without 
authorization. A loan is also called to protect CCC's interest or in 
emergency situations when there is physical damage to the storage 
structure putting the loan collateral at risk.
    FSA is adding definitions for ``market loan gain'' and ``locked in 
repayment rate'' to Sec.  1421.3 to clarify their meaning. Market loan 
gain is the sum of loan rate, minus the repayment rate, on loans repaid 
at an amount that is less than the loan rate. The total of market loan 
gains cannot exceed the producer's applicable payment limitation 
according part 1400 of this chapter. Locked in repayment rate means an 
announced repayment rate on a disbursed MAL. The repayment rate can 
only be locked in one time for a designated quantity; if multiple 
locked in rates were in effect for different loan quantities, the 
oldest rate is always applied first.
    The definition of ``Control or Recording FSA County Office'' is 
changed to ``Recording FSA County Office.'' FSA now refers to the FSA 
county offices that control a multi county producer's files as the 
``recording FSA county office.''
    In 7 CFR part 1425, ``Cooperative Marketing Associations,'' this 
rule adds definitions for ``LDP'' and for ``market loan gain.'' These 
definitions add consistency with 7 CFR part 1421.
    In 7 CFR part 1427, ``Cotton,'' this rule clarifies the definition 
for ``cooperative marketing association,'' and ``warehouse receipt,'' 
and removes a definition for ``commodity certificate exchange.'' These 
changes are being made to add consistency with 7 CFR part 1421 and with 
current practice.
    In 7 CFR part 1434, ``Nonrecourse Marketing Assistance Loan and LDP 
Regulations for Honey,'' this rule adds definitions for ``LDP'' and 
``calling a loan,'' to add clarity and for consistency with 7 CFR part 
1421.
    All of these changes are being made to add clarity and to add 
consistency within the regulations.

Requesting MALs and LDPs

    Currently, all MAL and LDP applications must be submitted to the 
FSA county office where the farm is located or to the producer's 
administrative county. This amendment to Sec.  1421.7 clarifies that 
producers may now submit an MAL or LDP application at any FSA county 
office. This rule amends Sec.  1421.7 to specify that a producer may 
submit a request for a MAL or LDP at any FSA county office. The 
receiving FSA county office will forward the MAL or LDP request to the 
administrative county office that is responsible for administering 
programs for the farm on which the commodity is produced. The 
administrative county office will process and approve the MAL or LDP. 
This is expected to provide better service to producers.

MAL Service Fees

    A service fee is subtracted from the MAL principal at the time of 
disbursement. The service fee is used to pay for administrative costs 
including security filings and lien searches. This rule does not change 
the amount of the

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service fee. There is no service fee for LDPs.
    This rule makes a small editorial change to reflect that the 
service fee may be paid to either FSA or to the loan servicing agent. 
Therefore, in order to allow flexibility in depositing the proceeds of 
these fees, the words ``to CCC'' have been removed from Sec. Sec.  
1421.104, 1427.13, 1427.169, and 1434.11. This is a technical 
correction that clarifies how the funds may be deposited, which is 
consistent with current policy.

Changes to Production Calculations

    For production calculations, this rule removes references to using 
production from three similar farms in the same county to determine an 
eligible commodity production. Instead there will be an option to use 
production as determined reasonable by the county committee. The option 
of using ``similar farms in the same county'' to determine an eligible 
commodity production in Sec.  1421.5(e), and ``3 similar farms'' in 
Sec.  1421.304 have been removed to implement this change. Section 
1421.304(c) has also been amended to include the methods for 
determining the production for a graze-out payment and is applicable to 
subpart D of part 1421.
    Specifically, Sec.  1421.304(c) is being revised to specify that 
the payment yield will be:
    (1) The yield for the loan commodity on the farm in effect for the 
calculation of Price Loss Coverage as specified in 7 CFR part 1412;
    (2) For a farm for which Agricultural Risk Coverage is elected, the 
payment yield that would otherwise be in effect for that loan commodity 
on the farm in the absence of such election as specified in 7 CFR part 
1412; or
    (3) In the case of a farm for which no payment yield is established 
for the loan commodity on the farm, an appropriate yield as determined 
by the COC.

Maturity Dates and Repayment Using Collateral

    This rule revises the maturity date provisions for MALs to specify 
that maturity dates are no later than the last day of the 9th calendar 
month following the month in which the loan was approved. This change 
to Sec. Sec.  1421.101 and 1427.7 is needed so that the regulations 
reflect the current way that MALs are made.
    Prior to this change, the MAL maturity date was determined by the 
date of disbursement. When all MALs were disbursed by checks from the 
FSA county offices, the date of approval and date of disbursement were 
generally the same. That is no longer the case. All FSA disbursements 
are now made through the National Payment System for Electronic Funds 
Transfers or the U.S. Department of Treasury, if a check is needed, and 
are available between 2 and 7 days following approval.
    Section 1203(b) of the 2014 Farm Bill prohibits the Secretary from 
extending the MAL term for any loan commodity. Although this provision 
has been in previous farm bills, and is current policy, it was not in 
the regulations. This rule adds a provision to specify that the 
maturity date of a MAL may not be extended.
    This rule also clarifies how CCC will take possession of collateral 
if MALs are not repaid by the maturity date. Warehouse stored loan 
collateral is forfeited to CCC on the day following maturity if the 
loan is not repaid. Farm-stored loan collateral is handled differently 
because the producer still holds the collateral. This rule clarifies 
the procedure for farm-stored MALs to specify that if the loan is not 
repaid, CCC has the right to acquire title of the MAL collateral and to 
sell or otherwise take possession of such collateral without any 
further action by the producer. The producer may deliver the MAL 
collateral in accordance with instructions issued by FSA. CCC will not 
accept delivery of any quantity in excess of 110 percent of the 
outstanding farm-stored MAL quantity.

Commingling Eligible and Ineligible Commodities

    It will no longer be a requirement that FSA verify loan quantity, 
at the producer's expense, when MAL commodities are co-mingled with 
ineligible commodities. The service has rarely been required and there 
are other processes in place to verify the loan quantity. This rule 
amends Sec.  1421.105 to no longer make this a mandatory requirement, 
although the producer may still request this service.

Electronic Warehouse Receipts

    This rule revises multiple sections of the regulations to clarify 
the use of electronic warehouse receipts (EWRs). Many commodity 
warehouses have moved away from paper warehouse receipts and use EWRs 
issued through a provider approved by FSA's Deputy Administrator for 
Commodity Operations (DACO) as provided for in the regulations for the 
United States Warehouse Act in 7 CFR part 735. The use of EWRs is 
accepted by most financial institutions, and meets current commodity 
marketing industry standards. EWRs have been approved and used for MALs 
and LDPs for cotton, peanuts, and rice for a number of years. DACO has 
approved a provider of EWRs for soybeans and a number of grains with 
the possibility of additional MAL and LDP commodities moving towards 
EWRs in the future. Benefits to utilizing EWRs for MALs include 
eliminating the storage of paper receipts, improving and simplifying 
the tracking of price support benefits, eliminating the mailing of 
paper receipts following loan repayment or loan forfeiture, eliminating 
the possibility of losing a paper receipt in the mail, and improving 
turnaround time from application to disbursement. CCC must be the 
holder of EWRs for any commodity under MAL. EWRs are also acceptable 
production evidence for LDPs.

Transfers of MAL Collateral

    The applicable loan rate for MALs is based on the loan rate where 
the commodity is stored when the loan is initially disbursed. During 
the loan term, a producer may request authorization to move the MAL 
commodity to another storage location. A MAL commodity moved from one 
farm location for farm stored MALs to another farm location will 
maintain the original loan rate. In the past, commodities transferred 
from farm stored to warehouse stored also acquired the loan rate to 
match the rate for the new storage location, in addition to allowing 
the producer to transfer up to an additional 10 percent and receive an 
additional disbursement of the MAL commodity.
    This rule removes the provisions allowing a 10 percent extra 
quantity for transfers of collateral from farm to warehouse storage 
during the loan term in Sec.  1421.108. This simplifies the regulations 
and will not impact most producers; for the 2013 crop year, FSA 
processed 3 farm to warehouse transfers out of 30,311 total loans. A 
producer can still obtain a new, separate MAL or LDP on any amount 
delivered that is over the loan quantity if it is not beyond the MAL or 
LDP availability date for the specific commodity as specified in Sec.  
1421.7.
    For example, if the collateral for a disbursed farm stored MAL for 
10,000 bushels (Bu.) is moved to a warehouse, the loan rate applicable 
to the warehouse loan will be the same as the original loan rate no 
matter which county the warehouse is in, and the loan quantity of the 
warehouse loan cannot be over 10,000 Bu. If the warehouse stored 
quantity is 9,950 Bu., the producer will owe CCC for the difference 
applicable to the 50 Bu. times the loan rate. If the warehouse stored 
is more than 10,000, the producer can request a new MAL for the 
additional

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quantity or, if applicable, LDP on any amounts over the 10,000 Bu., if 
the new MAL request is within the MAL or LDP availability date for the 
commodity.
    This change which will have minimal impact due to the small number 
of farm to warehouse MAL transfers requested.

Producer Liability

    This rule clarifies that the producer is liable for the amount of 
the MAL. As currently stated in 7 CFR 1421.105(e)(5), CCC will not 
assume any loss in quantity or quality of the MAL collateral for farm-
stored MALs. This applies to all MALs and therefore this rule adds that 
provision to the regulations for honey and cotton loans. This is not a 
change in policy, but FSA is adding to the regulations to add clarity 
and consistency. For example, weather related damages to a grain bin 
does not exclude the responsibility on the producer to repay loan 
collateral that can no longer be safely stored for MAL.

MAL Settlement

    Commodities that are collateral for MALs must be delivered to a 
warehouse with a CCC storage agreement. If a warehouse with a CCC 
storage agreement is not locally available, then CCC may offer the 
commodity for local sale. This includes isolated farm stored lots where 
a local elevator is not available and it is not cost effective for CCC 
to pay excess haul. In these situations, CCC deposits the sales 
proceeds but settles with the producer using the quantity and quality 
factors of the commodity sold. This rule amends 7 CFR part 1421 to 
clarify that for both non-recourse and recourse local sales, the 
producer will be responsible for any costs incurred by CCC, which will 
be deducted from the sales proceeds. Specific changes are being made in 
7 CFR 1421.111. If after the settlement or the local sale of a recourse 
loan is finalized, the value is greater than the amount owed, that 
extra will be paid to the producer. If an amount is still owed CCC, a 
receivable for such difference will be established. These changes are 
consistent with current policy and merely add clarification to the 
regulations.

CMAs

    CMAs can obtain MALs and LDPs on behalf of their members. The 
regulations for CMAs are specified in 7 CFR part 1425. This rule 
revises the regulations to be consistent with the new payment 
limitation and AGI requirements for market loan gains and LDPs. 
Specifically, this rule clarifies that CMAs are required to monitor 
LDPs they receive on behalf of their members for payment limitation and 
AGI amounts applied to market loan gains and LDPs.

Cotton

    The 2014 Farm Bill reauthorizes and extends existing cotton MAL and 
LDP provisions, which are located at 7 CFR part 1427. It also extends 
the authorization for the Economic Adjustment Assistance for Users of 
Upland Cotton Program and ELS Cotton Competitiveness Payment Program.
    This rule amends 7 CFR part 1427 to remove outdated references, and 
to clarify definitions consistent with the changes being made to part 
1421.
    Current FSA policy instructs county offices to not issue payments 
for less than $10 unless requested by the producer, and, in most 
instances, debts of less than $25 are disregarded. FSA is revising 
Sec.  1427.20, which specified a limit of $9.99 to disregard debts, to 
be consistent with this policy.
    As specified in section 1207 of the 2014 Farm Bill, the value of 
assistance provided for the Economic Adjustment Assistance to users of 
upland cotton will be 3 cents per pound effective beginning on August 
1, 2013. Therefore, this rule amends the beginning date of the program 
in Sec. Sec.  1427.100(a) and 1427.101(a) from ``August 1, 2008'', to 
``August 1, 2013''.
    The regulations in 7 CFR 1427 subpart E provide the regulations for 
the approval of cotton warehouses. This rule amends the subpart to 
remove specific form numbers and OMB control numbers for those forms.
    The regulations for the ELS Cotton Competitiveness Payment Program 
are revised to remove specific dates for the program. The ELS Program 
is reauthorized by the 2014 Farm Bill without change.

Honey

    The 2014 Farm Bill reauthorizes and extends existing honey MAL and 
LDP provisions. This rule makes conforming changes to make part 1434 
consistent with other MAL and LDP regulations, and to remove specific 
form numbers.
    This rule also clarifies how producers and CCC will be paid if a 
MAL is not repaid by the maturity date. There are no CCC approved 
warehouses for honey and all nonrecourse marketing assistance loans not 
repaid by the loan maturity date are therefore disposed of through 
local sale. The value of the settlement for eligible honey will be made 
on the basis of the color of the unprocessed honey as determined by an 
official Agricultural Marketing Service grade. If the value of the 
honey at settlement is less than the amount due, the producer will pay 
CCC the amount of the difference plus interest on the difference. If 
the value is greater, the excess will be paid to the producer.

Other Miscellaneous Changes

    This rule removes references to specific crop years. This rule also 
removes references to the ACRE program, which was not reauthorized by 
the 2014 Farm Bill.
    FSA now uses the term ``receivable'' instead of ``claim'' as the 
term for amounts owed. The term ``claim'' is therefore replaced with 
``receivable'' in this rule.
    In addition, nonsubstantive housekeeping changes are being made to 
the regulations to fix typographical errors and add to the clarity, 
readability, and consistency of the regulations. These changes do not 
represent substantive policy or administrative changes. For example, 
these changes include replacing the words ``marketing assistance loan'' 
with the acronym ``MAL,'' replacing the words ``loan deficiency 
payment'' with the acronym ``LDP,'' replacing references to ``service 
center'' with ``county office,'' and replacing ``shall.''

Technical Correction

    In addition to the specific MAL and LDP changes, this rule is 
making a technical correction for a minor organizational error that 
relates to MAL and other FSA administered programs. The correction will 
renumber paragraphs that were published incorrectly in the Agriculture 
Risk Coverage (ARC) and Price Loss Coverage (PLC) Programs final rule, 
which was published on September 26, 2014 (79 FR 57703-57721). In 7 CFR 
718.8, ``Administrative County,'' paragraph (f) should be paragraph 
(e)(3) and paragraph (g) should be paragraph (f). This rule corrects 
those inadvertent errors.

Notice and Comment

    In general, the Administrative Procedure Act (APA, 5 U.S.C. 553) 
requires that a notice of proposed rulemaking be published in the 
Federal Register and interested persons be given an opportunity to 
participate in the rulemaking through submission of written data, 
views, or arguments with or without opportunity for oral presentation, 
except when the rule involves a matter relating to public property, 
loans, grants, benefits, or contracts. The regulations to implement the 
provisions of Title I and the administration of Title I of the 2014 
Farm Bill are exempt from the notice and comment provisions of 5 U.S.C. 
553

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and the Paperwork Reduction Act (44 U.S.C. chapter 35), as specified in 
section 1601(c)(2) of the 2014 Farm Bill.

Effective Date

    The Administrative Procedure Act (5 U.S.C. 553) provides generally 
that before rules are issued by Government agencies, the rule is 
required to be published in the Federal Register, and the required 
publication of a substantive rule is to be not less than 30 days before 
its effective date. One of the exceptions is when the agency finds good 
cause for not delaying the effective date. Subsection 1601(c)(2) of the 
2014 Farm Bill makes this final rule exempt from notice and comment. 
Therefore, using the administrative procedure provisions in 5 U.S.C. 
553, FSA finds that there is good cause for making this rule effective 
less than 30 days after publication in the Federal Register. This rule 
allows FSA to make the changes to the MAL and LDP regulations in time 
for the new loan rates to be effective for 2015. Therefore, this final 
rule is effective when published in the Federal Register.

Executive Orders 12866 and 13563

    Executive Order 12866, ``Regulatory Planning and Review,'' and 
Executive Order 13563, ``Improving Regulation and Regulatory Review,'' 
direct agencies to assess all costs and benefits of available 
regulatory alternatives and, if regulation is necessary, to select 
regulatory approaches that maximize net benefits (including potential 
economic, environmental, public health and safety effects, distributive 
impacts, and equity). Executive Order 13563 emphasized the importance 
of quantifying both costs and benefits, of reducing costs, of 
harmonizing rules, and of promoting flexibility.
    The Office of Management and Budget (OMB) designated this rule as 
not significant under Executive Order 12866 and, therefore, OMB has not 
reviewed this final rule.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601-612), as amended by 
the Small Business Regulatory Enforcement Fairness Act of 1996 
(SBREFA), generally requires an agency to prepare a regulatory analysis 
of any rule whenever an agency is required by APA or any other law to 
publish a proposed rule, unless the agency certifies that the rule will 
not have a significant economic impact on a substantial number of small 
entities. This rule is not subject to the Regulatory Flexibility Act 
because as noted above, this rule is exempt from notice and comment 
rulemaking requirements of the APA and no other law requires that a 
proposed rule be published for this rulemaking initiative.

Environmental Review

    The environmental impacts of this final 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 
the FSA regulations for compliance with NEPA (7 CFR part 799). The 2014 
Farm Bill reauthorizes the MAL and LDP Programs and they are to be 
continued with no changes to the loan rates except for cotton, and 
there are no other changes to the basic structure of the programs. This 
rule will remove the references to the program years that previously 
limited the programs to 2008 through 2012, and make some other minor 
discretionary changes to add clarity to the regulations. As such, FSA 
has determined that the discretionary provisions identified in this 
final rule are minor and administrative in nature, intended to clarify 
the mandatory requirements of the programs, as defined in the 2014 Farm 
Bill, and do not constitute a major Federal action that would 
significantly affect the quality of the human environment, individually 
or cumulatively. Therefore, FSA will not prepare an environmental 
assessment or environmental impact statement for this regulatory 
action.

Executive Order 12372

    Executive Order 12372, ``Intergovernmental Review of Federal 
Programs,'' requires consultation with State and local officials that 
would be directly affected by proposed Federal financial assistance. 
The objectives of the Executive Order are to foster an 
intergovernmental partnership and a strengthened Federalism, by relying 
on State and local processes for State and local government 
coordination and review of proposed Federal financial assistance and 
direct Federal development. For reasons specified in the final rule 
related notice regarding 7 CFR part 3015, subpart V (48 FR 29115, June 
24, 1983), the programs and activities in this rule are excluded from 
the scope of Executive Order 12372.

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, ``Civil 
Justice Reform.'' This rule will not preempt State or local laws, 
regulations, or policies unless they represent an irreconcilable 
conflict with this rule. This rule has retroactive effect for the 2014 
crop year, and as specified by the 2014 Farm Bill and explained in this 
rule, certain provisions are effective beginning August 1, 2013. Before 
any judicial actions may be brought regarding the provisions of this 
rule, the administrative appeal provisions of 7 CFR parts 11 and 780 
are to be exhausted.

Executive Order 13132

    This rule has been reviewed under Executive Order 13132, 
``Federalism.'' 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, except as 
required by law. 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

    This rule has been reviewed in accordance with the requirements of 
Executive Order 13175, ``Consultation and Coordination with Indian 
Tribal Governments.'' Executive Order 13175 requires Federal agencies 
to consult and coordinate with tribes on a government-to-government 
basis on policies that have tribal implications, including regulations, 
legislative comments or proposed legislation, and other policy 
statements or actions that have substantial direct effects on one or 
more Indian tribes, on the relationship between the Federal Government 
and Indian tribes or on the distribution of power and responsibilities 
between the Federal Government and Indian tribes.
    FSA has assessed the impact of this rule on Indian tribes and 
determined that this rule does not, to our knowledge, have tribal 
implications that require tribal consultation under Executive Order 
13175. If a Tribe requests consultation, FSA will work with the USDA 
Office of Tribal Relations to ensure meaningful consultation is 
provided where changes, additions, and modifications identified in this 
rule are not expressly mandated by the 2014 Farm Bill.

Unfunded Mandates

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA, Pub. L. 
104-4) requires Federal agencies to assess the effects of their 
regulatory actions of State, local, and Tribal governments or the 
private sector. Agencies generally must prepare a written statement, 
including cost benefits analysis, for proposed and final

[[Page 119]]

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 in Title II of UMRA, 
for State, local and Tribal governments or the private sector. 
Therefore, this rule is not subject to the requirements of sections 202 
and 205 of UMRA.

SBREFA

    SBREFA normally requires that an agency delay the effective date of 
a major rule for 60 days from the date of publication to allow for 
Congressional review. This rule is not a major rule under SBREFA (Pub. 
L. 104-121). Therefore, FSA is not required to delay the effective date 
for 60 days from the date of publication to allow for Congressional 
review. Accordingly, this rule is effective on the date of publication 
in the Federal Register.

Federal Assistance Programs

    The title and number of the Federal Domestic Assistance Program in 
the Catalog of Federal Domestic Assistance, to which this rules applies 
is the Commodity Loans and Loan Deficiency Payments--10.051.

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(c)(2)(B) of the 2014 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 718

    Acreage allotments, Drug traffic control, Loan programs-
agriculture, Marketing quotas, Price support programs, Reporting and 
recordkeeping requirements.

7 CFR Part 1400

    Agriculture, Loan programs-agriculture, Conservation, Price support 
programs.

7 CFR Part 1421

    Barley, Feed grains, Grains, Loan Programs-agriculture, Oats, 
Oilseeds, Peanuts, Price support programs, Reporting and recordkeeping 
requirements, Soybeans, Surety bonds, Warehouses and Wheat.

7 CFR Part 1425

    Agricultural commodities, Confidential business information, 
Cooperatives and Reporting and recordkeeping requirements.

7 CFR Part 1427

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

7 CFR Part 1434

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

7 CFR part 1435

    Loan programs-agriculture, Penalties, Price support programs, 
Reporting and recordkeeping requirements, Sugar.

    For the reasons discussed above, CCC and FSA amend 7 CFR parts 718, 
1400, 1421, 1425, 1427, 1434, and 1435 as follows:

PART 718--PROVISIONS APPLICABLE TO MULTIPLE PROGRAMS

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

    Authority: 7 U.S.C. 1501-1531, 1921-2008v, 7201-7334, and 15 
U.S.C. 714b.

Subpart A--General Provisions

0
2. Amend Sec.  718.8 as follows:
0
a. In paragraph (e)(1), remove the word ``and'';
0
b. In paragraph (e)(2), remove the period and add the word and 
punctuation ``; and'' in its place; and
0
c. Redesignate paragraph (f) as paragraph (e)(3) and redesignate 
paragraph (g) as paragraph (f).

PART 1400--PAYMENT LIMITATION AND PAYMENT ELIGIBILITY

0
3. The authority citation for part 1400 continues to read as follows:

    Authority: 7 U.S.C. 1308, 1308-1, 1308-2, 1308-3, 1308-3a, 1308-
4, and 1308-5.


Sec.  1400.1  [Amended]

0
4. Amend Sec.  1400.1 as follows:
0
a. Redesignate paragraphs (a)(2) and (3) as paragraphs (a)(3) and (2), 
respectively;
0
b. In redesignated paragraph (a)(2), remove ``1421 and'' and add 
``1421, 1427, and'' in their place;
0
c. In paragraphs (a)(8) and (b)(2), remove the reference to ``(a)(2)'' 
and add a reference to ``(a)(3)'' in its place; and
0
d. In paragraph (b)(1), remove the reference to ``(3)'' and add a 
reference to ``(2)'' in its place.

PART 1421--GRAINS AND SIMILARLY HANDLED COMMODITIES--MARKETING 
ASSISTANCE LOANS AND LOAN DEFICIENCY PAYMENTS

0
5. Revise the authority citation for part 1421 to read as follows:

    Authority: 7 U.S.C. 7231-7237, 7931-7936, and 9031- 40, 15 
U.S.C. 714b and c.

0
6. Revise the part heading to read as shown above.

Subpart A--General

0
7. Amend Sec.  1421.1 as follows:
0
a. Revise paragraph (a);
0
b. In paragraph (b)(1), remove the words ``marketing assistance'' and 
add the word ``MAL'' in their place and remove the words ``loan 
deficiency payment programs'' and add the words ``LDP Programs'' in 
their place;
0
c. In paragraph (b)(2), remove the words ``Loan deficiency payments 
shall'' and add the words ``LDPs will'' in their place;
0
d. In paragraph (c), remove the words ``Marketing assistance loans'' 
and add the word ``MALs'' in their place;
0
e. In paragraph (d), remove the words ``marketing assistance loans'' 
and add the word ``MALs'' in their place;
0
f. In paragraphs (c) and (d), remove the words ``loan deficiency 
payments'' and add the words ``LDPs'' in their place; and
0
g. Add paragraph (e).
    The revisions and addition read as follows:


Sec.  1421.1  Applicability and interest.

    (a) The regulations in this subpart are applicable to crops of 
barley, small and large chickpeas, corn, grain sorghum, lentils, oats, 
dry peas, peanuts, rice, wheat, wool, mohair, oilseeds and other crops 
designated by Commodity Credit Corporation (CCC). These regulations 
specify the general provisions under which Marketing Assistance Loans 
(MALs) and Loan Deficiency Payments (LDPs) will be administered by CCC. 
Additional terms and conditions are in the additional documents 
required to receive MALs and LDPs. In any case in which money must be 
refunded to CCC in connection with this part, interest will be due to 
run from the date of disbursement of the sum to be refunded.

[[Page 120]]

This provision will apply, unless waived by the Deputy Administrator, 
irrespective of any other rule.
* * * * *
    (e) Adjusted Gross Income (AGI) and payment limitation provisions 
specified in part 1400 of this chapter apply to this part.


Sec.  1421.2  [Amended]

0
8. Amend 1421.2 as follows:
0
a. In paragraph (a), remove the words ``marketing assistance loan'' and 
add the word ``MAL'' in their place and remove the words ``loan 
deficiency payment program'' and add the words ``LDP Programs'' in 
their place and remove the word ``shall'' both times it appears and add 
the word ``will'' in its place;
0
b. In paragraph (e), remove the words ``marketing assistance loan'' and 
add the word ``MAL'' in their place and remove the words ``loan 
deficiency payment program'' and add the words ``LDP Programs'' in 
their place; and
0
c. In paragraph (f), remove the words ``marketing assistance loan'' and 
add the word ``MAL'' in their place and remove the words ``loan 
deficiency payment'' and add the word ``LDP'' in their place and remove 
the word ``shall'' and add the word ``will'' in its place.
0
9. Amend Sec.  1421.3 as follows:
0
a. Add, in alphabetical order, definitions for ``Calling a loan'', 
``Locked in repayment rate'', ``Market loan gain'', and ``Recording FSA 
county office'';
0
b. Remove the definitions ``Commodity certificate exchange'' and 
``Control or recording FSA County office'' and ``Crop year'';
0
c. Revise the definitions of ``Crop'', ``Incorrect certification'', and 
``Loan deficiency payment (LDP)'';
0
d. In the definition of ``Charges'', remove the word ``loan'' and add 
the words ``a MAL'' in its place;
0
e. In the definition of ``Designated Marketing Association'', remove 
the words ``marketing assistance loans'' and add the word ``MALs'' in 
their place and remove the words ``loan deficiency payments'' and add 
the word ``LDPs'' in their place;
0
f. In the definition of ``Loan settlement'', remove the words 
``effective with the 2009 through 2012'' and add the words ``for the 
applicable'' in their place;
0
g. In the terms ``Unauthorized disposition'' and ``Unauthorized 
removal'', remove the word ``loan'' each time it appears and add the 
word ``MAL'' in its place; and
0
h. In the definition of ``Warehouse receipt'', paragraph (2), add the 
word and punctuation ``(EWR)'' after the word ``receipt''.
    The revisions and additions read as follows:


Sec.  1421.3  Definitions.

* * * * *
    Calling a loan is accelerating or moving forward the maturity date 
of an outstanding MAL. A MAL can be called when, as determined by CCC, 
the terms and conditions of the MAL note and security agreement are 
violated, a producer incorrectly certifies a loan quantity or makes any 
fraudulent representation with respect to obtaining a loan, removing or 
disposing of a farm-stored commodity pledged as collateral for a loan 
without authorization, to protect CCC's interest, or in emergency 
situations.
* * * * *
    Crop means with respect to a year, commodities harvested in that 
year. Therefore, the referenced crop year of a commodity means 
commodities that when planted were intended for harvest in that 
calendar year.
* * * * *
    Incorrect certification means the certifying of a quantity of a 
commodity for the purpose of obtaining a MAL or LDP in excess of the 
quantity eligible for such MAL or LDP or the making of any fraudulent 
representation with respect to obtaining MALs or LDPs.
    Locked in repayment rate means an announced repayment rate on a 
disbursed MAL that the producer has locked in for 60 calendar days. All 
locked in repayment rates expire within 14 calendar days before the 
loan maturity date. MAL can be repaid either at principal plus interest 
or the repayment rate in effect on the date the repayment is made. The 
repayment rate can only be locked in one time for a designated quantity 
and, if multiple locked in repayment rates are in effect for quantities 
under MAL that have not had a locked in repayment rate, the oldest rate 
is always applied first.
* * * * *
    Loan deficiency payment (LDP) means a payment made in lieu of a MAL 
when the CCC-determined value, which is based on the current local 
price in a county, is below the applicable county loan rate. The 
payment is the difference between the two rates times the eligible 
quantity.
* * * * *
    Market loan gain is the loan rate, minus the repayment rate on 
loans repaid at a rate that is less than the loan rate. The total of 
all market loan gains received by a producer for an applicable crop 
year cannot exceed the producer's applicable payment limitation as 
specified in part 1400 of this chapter. A producer's adjusted gross 
income must also be below the limit as specified in part 1400 of this 
chapter to receive a market loan gain.
* * * * *
    Recording FSA County Office is the FSA County Office that records 
eligibility data for producers designated as multi-county producers.
* * * * *
0
10. Amend Sec.  1421.4 as follows:
0
a. In paragraph (a)(2)(v), remove the words ``for 2009 and Subsequent 
Crops, Programs, or Fiscal Years'';
0
b. Revise paragraph (a)(2)(ix);
0
c. In paragraph (b), remove the words ``shall be'' both times they 
appear and add the word ``is'' in their place, remove the words 
``marketing assistance loans'' and add the word ``MALs'' in their 
place, and remove the words ``loan deficiency payment'' and add the 
word ``LDP'' in their place;
0
d. In paragraph (c) introductory text, remove the words ``marketing 
assistance loans'' and add the word ``MALs'' in their place, and remove 
the words ``loan deficiency payments'' and add the words ``LDPs'' in 
their place;
0
e. In paragraph (c)(2), remove the words ``marketing assistance loan'' 
and add the word ``MAL'' in their place, and remove the words ``loan 
deficiency payment'' and add the words ``LDP'' in their place;
0
f. Revise paragraph (d);
0
g. Revise paragraphs (e)(1)(ii) and (f);
0
h. In paragraphs (e)(1)(iii) and (2) remove the word ``loan'' each time 
it appears and add the word ``MAL'' in its place;
0
i. In paragraph (g), remove the word ``shall'' and add the word 
``will'' in its place, remove the words ``marketing assistance loan'' 
both times it appears and add the word ``MAL'' in their place, and 
remove the words ``loan deficiency payment'' both times it appears and 
add the word ``LDP'' in their place; and
0
j. Add paragraph (h).
    The revisions and addition read as follows:


Sec.  1421.4  Eligible producers.

    (a) * * *
    (2) * * *
    (ix) 7 CFR part 1412--Agriculture Risk Coverage, Price Loss 
Coverage, and Cotton Transition Assistance Programs; and
* * * * *
    (d) If more than one producer executes a note and security 
agreement with CCC, each such producer is jointly and severally liable 
for any violation of the terms and conditions of the note and security 
agreement and the regulations in this part. Each such producer also

[[Page 121]]

remains liable for repayment of the entire MAL amount until the MAL is 
fully repaid without regard to such producer's claimed share in the 
commodity pledged as collateral for the MAL. In addition, such producer 
may not amend the note and security agreement with respect to the 
producer's claimed share in such commodities, or MAL proceeds, after 
execution of the note and security agreement by CCC.
    (e) * * *
    (1) * * *
    (ii) Not allowed an FSA representative access to the site where 
commodities pledged as collateral for MALs were stored, or otherwise 
failed to cooperate in the settlement of MAL; or
* * * * *
    (f) A CMA may obtain a MAL and LDP on eligible production of a MAL 
commodity on behalf of its members who are eligible to receive MALs or 
LDPs with respect to a crop of a commodity. For purposes of this 
subpart, the term ``producer'' includes a CMA.
* * * * *
    (h) A producer must meet the requirements of actively engaged in 
farming, cash rent tenant, and member contribution as specified in part 
1400 of this chapter to be eligible for LDPs and market loan gains.
0
11. Amend Sec.  1421.5 as follows:
0
a. In paragraph (a) introductory text, remove the word ``loan'' and add 
the word ``MAL'' in its place;
0
b. In paragraph (c)(1), remove the words ``for a loan'' and add the 
words ``for a MAL'' in its place and remove the words ``marketing 
assistance loan'' and add the word ``MAL'' in their place;
0
c. In paragraph (c)(5), remove the words ``marketing assistance loans'' 
and add the word ``MALs'' in their place and remove the words ``loan 
deficiency payments'' and add the word ``LDPs'' in their place;
0
d. In paragraph (d)(2), remove the word ``loan'' and add the word 
``MAL'' in its place;
0
e. In paragraph (e), remove the words ``or similar farms in the same 
county; or'' and add the word ``or'' in their place; and
0
f. Revise paragraph (f).
    The revision reads as follows:


Sec.  1421.5  Eligible commodities.

* * * * *
    (f) A commodity that is purchased, substituted, or acquired by 
sale, gift, or exchange of an existing harvested, sheared, or 
slaughtered commodity, or through any other transaction is ineligible 
to be pledged as collateral for a MAL; in addition an LDP will not be 
made with respect to such commodities.


Sec.  1421.6  [Amended]

0
12. Amend Sec.  1421.6 as follows:
0
a. In paragraph (a), remove the words ``marketing assistance loans'' 
and add the word ``MALs'' in their place, remove the words ``marketing 
assistance loan'' both times they appear and add the word ``MAL'' in 
their place, and remove the words ``loan deficiency payment'' both 
times they appear and add the word ``LDP'' in their place;
0
b. In paragraph (b), introductory text, remove the words ``marketing 
assistance loan'' and add the word ``MAL'' in their place; and remove 
the words ``the loan'' and add the words ``the MAL'' in its place;
0
c. In paragraph (b)(2) and (b)(3) remove the word ``loan'' each time it 
appears and add the word ``MAL'' in its place;
0
d. In paragraph (c) introductory text, remove the words ``a loan 
commodity'' and add the words ``an eligible commodity'' in their place;
0
e. In paragraph (c)(3), remove the words ``loan deficiency rate'' and 
add the words ``LDP rate'' in their place;
0
f. In paragraph (f), remove the words ``cooperative marketing 
association'' each time they appear and add the acronym ``CMA'' in 
their place;
0
g. In paragraph (h)(2), remove the words ``CCC loan'' and add the word 
``MAL'' in their place; and
0
h. Revise paragraph (i) introductory text.
    The revision reads as follows:


Sec.  1421.6  Beneficial interest.

* * * * *
    (i) Commodities produced under a contract in which the title to the 
seed remains with the entity providing the seed to the producer, 
including contracts for the production of hybrid seed, genetically 
modified commodities, and other specialty seeds as approved in writing 
by CCC, are eligible to be pledged as collateral for a MAL or a LDP may 
be made with respect to such production if, at the time of the request 
for such a MAL or LDP, the producer has not:
* * * * *

0
13. Amend Sec.  1421.7 as follows:
0
a. Revise the heading; and
0
b. Revise paragraphs (a), (b), and (c) introductory text.
    The revisions read as follows:


Sec.  1421.7  Requesting MALs and LDPs.

    (a) A producer may apply for a MAL or LDP at any FSA county office. 
The receiving FSA county office will forward the MAL or LDP request to 
the administrative county office, as specified in part 718 of this 
title, that is responsible for administrating programs for the farm on 
which the commodity was produced. The administrative county office will 
process and approve the MAL or LDP.
    (b) A MAL or LDP may be requested in person, by mail, or by 
electronic format designated by CCC. Forms prescribed by CCC may be 
obtained from the FSA Web site.
    (c) To receive a MAL or LDP for an eligible commodity, a producer 
must execute a note and security agreement or LDP application on or 
before the applicable final loan availability date, as follows:
* * * * *

0
14. Amend Sec.  1421.8 as follows:
0
a. Revise paragraphs (a), (b)(1) introductory text, and (b)(2);
0
b. Remove paragraph (b)(1)(i) and redesignate (b)(1)(ii) and (iii) as 
(b)(1)(i) and (ii), respectively;
0
c. Revise paragraph (c).
    The revisions read as follows:


Sec.  1421.8  Eligible quantity.

    (a) With respect to MALs and LDPs for:
    (1) Farm-stored commodities, all determinations of weight and 
quality, except as otherwise agreed to or required by CCC, will be 
determined at the time of delivery of the commodity to CCC or at the 
time the LDP application is filed for measured requests, if applicable, 
or selected for spot-check for certified requests.
    (2) Warehouse-stored commodities, all determinations of grade, 
weight and quality, except as otherwise agreed to or required by CCC, 
will be determined at the time the MAL is forfeited to CCC.
    (b)(1) A producer may, before the final MAL availability date for 
obtaining a MAL for a commodity, repledge as collateral for securing a 
MAL any commodity that had been previously pledged as collateral for a 
MAL, except with respect to:
    * * *
    (2) The commodity repledged as security for the subsequent MAL will 
have the same maturity date, under Sec.  1421.101 as the original MAL.
    (c)(1) The MAL documents will not be presented for disbursement 
unless the commodity subject to the note and security agreement is an 
eligible harvested commodity, is in existence, and is in authorized 
farm or warehouse storage, as determined by CCC. If the commodity was 
not either an eligible commodity, in existence, or in authorized 
storage at the time of disbursement, the total amount

[[Page 122]]

disbursed under the MAL and charges plus interest must be refunded 
promptly by the producer.
    (2) CCC will limit the total quantity for MAL or LDP disbursement 
to 100 percent of the quantity of such MAL or LDP application. A 
producer may obtain a separate MAL or LDP before the final loan 
availability date for the commodity for quantities in excess of 100 
percent of such quantity if such quantities are otherwise eligible.

0
15. Amend Sec.  1421.9 as follows;
0
a. Revise paragraphs (c) and (f); and
0
b. Remove paragraph (g).
    The revisions read as follows:


Sec.  1421.9  Basic loan rates.

* * * * *
    (c) Subject to adjustment as specified in paragraph (f) of this 
section, in case of forfeiture, for all commodities except rice and 
peanuts, warehouse-stored MALs will be disbursed at levels based on the 
basic county MAL rate for the county where the commodity is stored.
    (1) For rice, subject to adjustment as specified in paragraph (f) 
of this section, in case of forfeiture, warehouse-stored MALs will be 
disbursed at levels based on the milling yields times the whole and 
broken kernel MAL rates.
    (2) For peanuts, warehouse-stored MALs will be disbursed at levels 
based on National loan rates by peanut type, adjusted for the schedule 
of premiums and discounts on the basis of grade, quality, and other 
factors specified on warehouse receipts.
* * * * *
    (f) For all crop years, premiums and discounts will not apply for 
all eligible loan commodities at loan disbursement, except for peanuts. 
However, premiums and discounts will apply if the eligible loan 
commodities are forfeited or delivered to CCC and any deficiency must 
be repaid to CCC.
0
16. Amend Sec.  1421.10 as follows:
0
a. Revise paragraphs (a) introductory text, (c)(1), and (d);
0
b. Revise paragraphs (h)(5)(i), (ii), and (iii);
0
c. In paragraph (j)(1), (j)(2), (m) introductory text, and (p)(2) 
remove the word ``loan'' each time it appears and add the word ``MAL'' 
in its place;
0
d. Revise paragraphs (j)(7) through (j)(10) and add paragraph (j)(11); 
and
0
e. Revise paragraphs (k) introductory text, (l), and (m)(2).
    The revisions and additions read as follows:


Sec.  1421.  10 Loan repayment rates.

    (a) For the applicable crop years of barley, corn, grain sorghum, 
oats, wheat, dry peas, lentils, chickpeas, oilseeds, wool, mohair, and 
other crops as designated by CCC (other than peanuts, long grain rice, 
medium grain rice, and confectionery and each other kind of sunflower 
seed (other than oil sunflower seed)), a producer may repay a 
nonrecourse MAL at a rate that is the lesser of:
* * * * *
    (c) * * *
    (1) A producer may repay a nonrecourse MAL for peanuts at a rate 
that is the lesser of:
* * * * *
    (d) For peanuts, the Secretary will require the repayment of 
handling and other associated costs paid under Sec.  1421.104 for all 
peanuts pledged as collateral for a MAL that are redeemed under this 
section.
* * * * *
    (h) * * *
    (5) * * *
    (i) The last Wednesday of July in the calendar year following the 
year the rice crop was harvested, or in which the rice MAL matures,
    (ii) The last Wednesday of the latest month the rice MAL matures, 
or
    (iii) If Tuesday is not a normal business day, the price 
determination may be made on the next work day and announced the 
following day, on or after 7 a.m. Eastern Standard Time.
* * * * *
    (j) * * *
    (7) For multiple locked in requests, the oldest unexpired locked in 
repayment rate is applied first.
    (8) The completed and signed form can be submitted in person, by 
facsimile, or electronically.
    (9) The requests cannot be canceled, terminated, or changed after 
approval.
    (10) The locked in applicable repayment rate will transfer to any 
MAL disbursed outside of the originating county where the commodity was 
stored.
    (11) Once a repayment rate is locked in it cannot be extended.
    (k) If a producer fails to repay a MAL within the time prescribed 
by CCC under the terms and conditions of the request to lock in a 
market loan repayment rate, the producer may repay the MAL:
* * * * *
    (l) When the proceeds of the sale of the commodity are needed to 
repay all or a part of a farm-stored MAL, the producer must request and 
obtain prior written approval on a CCC-approved form and comply with 
the terms and conditions of such form, to remove a specified quantity 
of the commodity from storage. Approval does not constitute release of 
CCC's security interest in the commodity or release of producer 
liability for amounts due CCC for the MAL indebtedness if payment in 
full is not received by the FSA county office. Failure to repay a MAL 
within the time period prescribed by CCC in the case of a farm-stored 
loan and delivery of the pledged collateral to a buyer is a violation 
of the agreement. In the case of such violation, the producer must 
repay the loan principal and interest or another amount as determined 
by the Deputy Administrator, FSA, as specified in Sec.  1421.109.
    (m) * * *
    (2) An amount less than the principal amount of the MAL and charges 
plus interest under the terms and conditions specified by CCC at the 
time the producer redeems the collateral for such MAL.
* * * * *

0
17. Revise Sec.  1421.11(a) and (b) to read as follows:


Sec.  1421.11  Spot checks.

    (a) CCC may inspect the collateral for MALs, and producers with 
such MALs must allow CCC reasonable access to the farm and storage 
facility as necessary to conduct ``spot check'' collateral inspections. 
Spot checks are intended to verify that the quality and quantity of 
farm-stored commodities pledged as collateral for MALs are maintained 
by the producer.
    (b) LDPs are selected for spot check to ensure that all eligibility 
requirements, as required by CCC, are met in order to receive such LDP.
* * * * *

0
18. Revise Sec.  1412.12(a) introductory text, (a)(1)(i) through (x), 
and (b) to read as follows:


Sec.  1421.12  Production evidence.

    (a) Producers who redeem MAL collateral at the prevailing world 
market price for rice, or the alternative repayment rate for all other 
commodities, as CCC determines or receives an LDP may be required to 
provide CCC with:
    (1) * * *
    (i) Evidence of sales;
    (ii) Delivery evidence;
    (iii) Load summaries from warehouse, processor, or buyer;
    (iv) Warehouse receipts including EWRs;
    (v) Paid measurement service;
    (vi) Spot check measurements with paid measurement service;
    (vii) Cleaning tickets for seed;
    (viii) Scale tickets, if not issued by the producer for the 
producer's own production;
    (ix) Core tests for wool and mohair; or

[[Page 123]]

    (x) Maximum eligible quantity as determined by CCC.
* * * * *
    (b) A producer who fails to provide acceptable evidence of 
production is be required to repay the market loan gain or LDP and 
charges, plus interest, as determined by CCC.

0
19. Amend Sec.  1421.14 as follows:
0
a. Revise the section heading;
0
b. In paragraph (a) introductory text, remove the word ``loans'' and 
add the word ``MALs'' in its place; and
0
c. Revise paragraph (b).
    The revision reads as follows:


Sec.  1421.14  Obtaining peanut MALs.

* * * * *
    (b) The MAL documents will not be presented for disbursement unless 
the peanuts pledged as collateral for the MAL are eligible as specified 
in Sec.  1421.8. If the peanuts were ineligible at the time of the 
disbursement, the total amount disbursed under MAL, or as an LDP, plus 
charges and interest will be refunded promptly.

Subpart B--Marketing Assistance Loans

0
20. Amend Sec.  1421.101 as follows:
0
a. Revise paragraph (a)(1); and
0
b. Add paragraph (b).
    The revision and addition read as follows:


Sec.  1421.101  Maturity dates.

    (a)(1) All MALs will mature on demand by CCC and no later than the 
last day of the 9th calendar month following the month in which the 
note and security agreement is filed and approved except for 
transferred MAL collateral. The maturity date for transferred MAL 
collateral will be the maturity date applicable to the original MAL 
that was transferred.
* * * * *
    (b) The maturity date of any MAL may not be extended.

0
21. Revise Sec.  1421.102(a)(2)(i), (ii), (3), and (5) to read as 
follows.


Sec.  1421.102  Adjustment of basic loan rates.

    (a) * * *
    (2) * * *
    (i) Crop year specific schedules of premiums and discounts, the MAL 
rate will be adjusted for the higher of the discount for test weight or 
grade based on test weight.
    (ii) Additional schedule of discounts, the MAL rate will be reduced 
to 20 percent of the county loan rate.
    (3) With respect to commodities harvested, excluding silage or hay, 
as other than grain and pledged as collateral for a nonrecourse MAL, 
the MAL rate will be discounted to 30 percent of the county loan rate.
* * * * *
    (5) With respect to Segregation 2 and 3 peanuts as determined by 
CCC, the MAL rate will be discounted to 35 percent of the applicable 
loan rate.

0
22. Revise Sec.  1421.103(b) to read as follows:


Sec.  1421.103  Authorized storage.

* * * * *
    (b) CCC may reduce the quantity of a commodity pledged as 
collateral for a MAL made available under paragraph (a)(2) of this 
section to not more than 75 percent of such otherwise eligible quantity 
in order to protect the interests of CCC. CCC may also limit the length 
of time the commodity may be stored on-ground or in temporary 
structures to not more than 90 days. A MAL made with respect to such 
commodity that is not moved to a structure specified in (a)(2) within 
90 days of the date the MAL was disbursed may be called by CCC.
* * * * *

0
23. Amend Sec.  1421.104 as follows:
0
a. Revise the section heading and paragraphs (a)(2), (3), and (c);
0
b. In paragraph (b), remove the words ``to CCC''; and
0
c. Remove paragraph (d).
    The revisions read as follows:


Sec.  1421.104  Making MALs.

    (a) * * *
    (2) The cost for terminating the financing statement for MALs 
disbursed under this part before the end of the term will be paid by 
the producer.
    (3) If there are any liens or encumbrances on the commodity pledged 
as collateral for a MAL made under this part, waivers that fully 
protect CCC's interest must be obtained even though the liens or 
encumbrances are satisfied from MAL proceeds disbursed under this part. 
No additional liens or encumbrances will be placed on the commodity 
after such a MAL is approved.
* * * * *
    (c) To ensure proper storage of peanuts for which a MAL is made 
under this section, the Secretary will pay reasonable handling and 
other associated costs (other than storage) incurred at the time at 
which the peanuts are placed in a warehouse stored MAL. Such rates will 
be available in the State and county FSA offices.

0
24. Amend Sec.  1421.105 as follows:
0
a. Revise the section heading;
0
b. In paragraph (a) introductory text, remove the words ``loan shall 
and add the word ``MAL'' in its place;
0
c. Revise paragraphs (a)(1), (b) introductory text, (c)(2), (d)(1)(ii), 
(2), (e)(1), (3), and (5);
0
d. In paragraph (a)(2), remove the word ``Have'' and add the word 
``Has'' in its place; and
0
e. Add paragraph (f).
    The revisions and addition read as follows:


Sec.  1421.105  Farm-stored MALs.

    (a) * * *
    (1) Certifies the quantity of such commodity on the MAL 
application, or;
* * * * *
    (b) The State committee may establish a MAL percentage not to 
exceed a percentage CCC establishes or it may apply quality discounts 
to the loan rate in each year for each commodity on a statewide basis 
or for specified areas within the State. Before approving a county 
committee request to establish a different loan percentage, or to apply 
quality discounts, the State committee will consider conditions in the 
State or areas within a State to determine if the MAL percentage should 
be reduced below the maximum MAL percentage or the quality discounts 
should be applied to the basic county MAL rate to provide CCC with 
adequate protection. MALs disbursed based upon loan percentages 
previously lowered and loan rates adjusted for quality will not be 
altered if conditions within the State or areas within the State change 
to substantiate removing such reductions. Percentages established or 
loan rates adjusted for quality under this section will apply only to 
new MALs and not to outstanding MALs. In determining loan percentages 
or the necessity to apply quality discounts, the State committee will 
consider any factor at its discretion, including the following:
* * * * *
    (c) * * *
    (2) In all other instances, if the producer intends to move MAL 
collateral from a designated structure to an undesignated structure, 
the producer must request prior approval from the county committee in 
writing. The producer may request that the eligible or ineligible 
commodity be measured by a representative of the county office, at the 
producer's expense, before commingling, but such measurement is not 
required. Prior to commingling, with respect to wool and mohair, a 
representative of the FSA county committee may determine an average 
production of the wool and mohair in a manner approved by CCC.
* * * * *
    (d) * * *
    (1) * * *

[[Page 124]]

    (ii) Individual MALs for their share of the commodity that is 
commingled in a farm storage facility with commodities owned by other 
producers if such other producers execute an agreement that provides 
that such producers will obtain the permission of a representative of 
the county committee before removal of any quantity of the commodity 
from the storage facility. All producers who store a commodity in a 
farm storage facility in which commodities that have been pledged as 
collateral for a MAL will be liable for any damage incurred by CCC for 
the deterioration or unauthorized removal or disposition of such 
commodities.
    (2) In such cases, each producer must execute a note and security 
agreement with CCC, and each such producer will be jointly and 
severally liable for the violation of the terms and conditions of the 
note and the requirements of this part. Each producer is also liable 
for repayment of the entire MAL amount until the MAL is fully repaid 
without regard to their share in the commodity pledged as collateral. 
In addition, such producer may not amend the note and security 
agreement for the producer's claimed share in such commodities, or MAL 
proceeds, after execution of the note and security agreement by CCC.
    (e)(1) A producer, when requesting a MAL, will designate in writing 
specific storage structures.
* * * * *
    (3) Movement of MAL collateral to any other structures not 
designated or the disposal of such loan collateral without prior 
written approval of the county committee, will subject the producer to 
administrative actions.
* * * * *
    (5) CCC will not assume any loss in quantity or quality of the MAL 
collateral for farm-stored MALs.
    (f) If the producer does not pay CCC the total amount due in 
accordance with a MAL by the maturity date, CCC has the right to 
acquire title to the MAL collateral and to sell or otherwise take 
possession of such collateral without any further action by the 
producer. With respect to farm-stored MALs, the producer may, as CCC 
determines, deliver the MAL collateral in accordance with instructions 
issued by CCC. CCC will not accept delivery of any quantity of a 
commodity in excess of 110 percent of the outstanding farm-stored MAL 
quantity. If a quantity in excess of 110 percent of the outstanding 
farm-stored MAL quantity is shown on the warehouse receipt or other 
documents, the producer must provide replacement warehouse receipts and 
delivery documents. If the warehouse receipt and such other documents 
applicable to the settlement are not replaced to reflect the excess 
amount, CCC will provide for such corrected documents and apply charges 
for such service, if any, to the producer's account as charges for 
settlement on the MAL.

0
25. Revise Sec.  1421.106 section heading, and paragraphs (a), (c), and 
(d) introductory text to read as follows:


Sec.  1421.106  Warehouse-stored MAL collateral.

    (a) A commodity may be pledged as collateral for a warehouse-stored 
MAL in the quantity delivered to CCC for storage at a warehouse that 
meets standards for approval at part 1423 of this chapter. Such 
quantity is the net weight specified on the warehouse receipt or 
supplemental certificate.
* * * * *
    (c) If more than one producer executes a note and security 
agreement with CCC, each such producer is jointly and severally liable 
for the violation of the terms and conditions of the note and the 
regulations in this part. Each such producer also remains liable for 
repayment of the entire MAL amount until the MAL is fully repaid 
without regard to such producer's claimed share in the commodity 
pledged as collateral for the MAL. In addition, such producer may not 
amend the note and security agreement with respect to the producer's 
claimed share in such commodities, or MAL proceeds, after execution of 
the note and security agreement by CCC.
    (d) Storage rates that CCC has approved to be deducted from MAL 
proceeds are available in FSA State and county offices and other USDA 
service centers. Deductions are based upon entries on the warehouse 
receipt or supplemental certificate, but the storage rate is not to 
exceed the storage rate CCC has approved. No storage deduction is to be 
made if written evidence acceptable to CCC is submitted indicating 
that:
* * * * *

0
26. Amend Sec.  1421.107 as follows:
0
a. Revise paragraphs (a), (c), (h) introductory text, (h)(2)(ii), and 
(i)(2);
0
b. In paragraph (h)(2)(iii), remove the words ``shall represent'' and 
add the word ``represents'' in their place;
0
c. In paragraphs (h)(2)(i) and (iv), remove the word ``shall'' and add 
the word ``must'' in its place; and
0
d. Add paragraph (k).
    The revision and addition read as follows:


Sec.  1421.107  Warehouse receipts.

    (a) Warehouse receipts for MALs tendered to CCC as specified in 
Sec.  1421.3 may either be paper or electronic. All receipts, whether 
paper or electronic, must meet all the applicable provisions of this 
section and this part, and CCC program document requirements. EWRs must 
be issued by a provider approved by CCC.
* * * * *
    (c) If the receipt is issued for a commodity that is owned by the 
warehouse operator either solely, jointly, or in common with others, 
the fact of such ownership is to be stated on the receipt. In States 
where the pledge of warehouse receipts issued by a warehouse operator 
on the warehouse operator's commodity is invalid, the warehouse 
operator may offer the commodity to CCC for a MAL if such warehouse is 
licensed under the U.S. Warehouse Act.
* * * * *
    (h) If a warehouse receipt indicates that the commodity tendered 
for MAL grades ``infested'' or ``contains excess moisture,'' or both, 
the receipt must be accompanied by a supplemental certificate in order 
for the commodity to be eligible for a MAL. The grade, grading factors, 
and quantity to be delivered must be shown on the certificate as 
follows:
* * * * *
    (2) * * *
    (ii) When a supplemental certificate is issued under paragraphs 
(g)(1) and (h)(2)(i) of this section, the grade, grading factors, and 
the quantity shown on such certificate will supersede the entries for 
such items on the warehouse receipt.
* * * * *
    (i) * * *
    (2) Warehouse receipts and the commodities represented by such 
receipts may be subject to a lien for warehouse charges. For all 
commodities except peanuts, the producer who pledged such a receipt as 
collateral for a MAL under this part pays to CCC all costs incurred by 
CCC as result of the existence of the lien. In no event is a warehouse 
operator entitled to satisfy such a lien by sale of the commodities 
when CCC is the holder of such receipt.
* * * * *
    (k) If the warehouse issues an EWR for the commodity, the producer 
must notify the EWR provider to make CCC the holder of the EWR and to 
secure an affirmation verifying that CCC has been made the holder of 
the EWR.

0
27. Amend Sec.  1421.108 as follows:
0
a. In paragraph (a), introductory text, remove the word ``loan'' and 
add the word ``MAL'' in its place both times it appears; and

[[Page 125]]

0
b. Revise paragraphs (a)(1), (b), and (c) introductory text.
    The revisions read as follows:


Sec.  1421.108  Transfers and reconciliations.

    (a) * * *
    (1) Transfer of all or part of the farm-stored MAL collateral to an 
authorized warehouse will be made through the pledge of warehouse 
receipts for the commodity placed under a warehouse-stored MAL. The 
loan rate of the transferred MAL will be the same as the loan rate of 
the original MAL. The MAL quantity for the warehouse-stored MAL cannot 
exceed the loan quantity transferred from the farm-stored MAL.
* * * * *
    (b) The producer must request county committee approval before the 
transfer of a warehouse-stored MAL to a farm-stored MAL. The county 
committee may approve the transfer of part or all of a warehouse-stored 
MAL at any time during the MAL period. Quantities pledged as collateral 
for a farm-stored MAL will be based on a measurement or a calculation 
of average production of wool and mohair, by a representative of the 
county office before approving the farm-stored MAL. The producer must 
immediately repay the amount by which the farm-stored MAL is less than 
the warehouse-stored MAL and charges plus interest on the shortage. The 
maturity date of the farm-stored MAL is the maturity date applicable to 
the warehouse-stored MAL that was transferred.
    (c) Upon the filing of the Reconcentration Agreement and Trust 
Receipt by the producer and warehouse operator, CCC may, during the MAL 
period, approve the reconcentration in another authorized warehouse for 
all or part of a commodity that is pledged as collateral for a 
warehouse-stored MAL. Any such approval will be subject to the terms 
and conditions in the Reconcentration Agreement and Trust Receipt. A 
producer may, before the new warehouse receipt is delivered to CCC, pay 
CCC:
* * * * *

0
28. Amend Sec.  1421.109 as follows:
0
a. Revise paragraphs (a)(1), (2), and (3), (d), and (e)(2);
0
b. In paragraphs (e)(1)(i) and (ii) remove the word ``loan'' and add 
the word ``MAL'' in its place;
0
c. Revise paragraphs (f)(1) and (2), (g), (h), (j), (l) introductory 
text, and (l)(1);
0
d. In paragraphs (k), and (l)(2) remove the word ``loan'' and add the 
word ``MAL'' in its place each time it appears;
0
e. In paragraph (m), remove the words ``shall be'' and add the word 
``is'' in their place; and
0
f. Revise paragraphs (n), (o), and (p).
    The revisions read as follows:


Sec.  1421.109  Personal liability of the producer.

    (a) * * *
    (1) Provide an incorrect certification of the quantity or make any 
fraudulent or erroneous representation for the MAL;
    (2) Remove or dispose of a quantity of commodity that is collateral 
for a CCC farm-stored MAL without prior written approval from CCC in 
accordance with Sec.  1421.10; or
    (3) Violate the terms and conditions of the note and security 
agreement, which will cause harm or damage to CCC in that funds may be 
disbursed to the producer for a quantity of a commodity that is not 
actually in existence or for a quantity on which the producer is not 
eligible. If CCC determines that the producer has violated the terms 
and conditions of the applicable forms prescribed by CCC, liquidated 
damages will be assessed on the quantity of the commodity that is 
involved in the violation.
* * * * *
    (d) Liquidated damages assessed in accordance with this section 
will be determined by multiplying the quantity involved in the 
violation by 10 percent of the MAL rate applicable to the MAL note.
    (e) * * *
    (2) Did not act in good faith when the violation was committed, 
liquidated damages will be assessed in accordance with paragraph (d) of 
this section, and administrative actions will be taken in accordance 
with paragraph (h) of this section. The MAL is required to be redeemed 
at the rate at which the MAL was disbursed, plus interest and any other 
charges assessed under the note and security agreement.
    (f) * * *
    (1) Acted in good faith when the violation occurred, liquidated 
damages will be assessed according to paragraph (d) of this section, 
and the commodity involved in the violation must be redeemed at the 
rate at which the MAL was disbursed, plus interest and any other 
charges assessed under the note and security agreement.
    (2) Did not act in good faith about the violation, liquidated 
damages will be assessed in accordance with paragraph (d) of this 
section and administrative actions will be taken in accordance with 
paragraph (h) of this section. The MAL must be redeemed at the rate at 
which the MAL was disbursed, plus interest and any other charges 
assessed under the note and security agreement.
    (g) If the producer fails to pay such amount within 30 days from 
the date of notification of violations as provided in paragraphs (e)(1) 
and (f)(1) of this section, the producer must immediately repay the MAL 
at the rate at which the MAL was disbursed plus interest, and any other 
charges assessed under the note and security agreement.
    (h) For violations as specified in paragraphs (e)(2) and (f)(2) of 
this section, the producer must immediately repay the MAL at the rate 
at which the MAL was disbursed plus interest, and any other charges 
assessed under the note and security agreement. If the MAL has already 
been repaid, any market loan gain previously realized on the MAL, plus 
interest, is immediately due to CCC. CCC will demand delivery of any 
remaining MAL collateral if the MAL and any other charges and interest 
are not repaid within the 30 calendar day notification period specified 
in paragraph (g) of this section.
* * * * *
    (j) If the MAL is accelerated, the producer may not repay the MAL 
at the alternative loan repayment rate, unless authorized by CCC.
* * * * *
    (l) The MAL plus other charges are payable to CCC upon demand if a 
producer:
    (1) Makes any fraudulent representation in obtaining a MAL, 
maintaining, or settling a MAL; or
* * * * *
    (n) If the amount disbursed under a MAL or in settlement of the 
MAL, exceeds the amount authorized by this part, the producer is liable 
for repayment of the excess and charges, plus interest.
    (o) If the amount collected from the producer in satisfaction of 
the MAL is less than the amount required under this part, the producer 
is personally liable for repayment of the amount of such difference and 
charges, plus interest.
    (p) In the case of joint MALs, the personal liability for the 
amounts specified in this section is joint and several on the part of 
each producer signing the note.
* * * * *


Sec.  1421.110  [Removed and Reserved]

0
29. Remove and reserve Sec.  1421.110.

0
30. Amend Sec.  1421.111 as follows:
0
a. Revise the section heading;
0
b. Revise paragraphs (a) and (f); and
0
c. Add paragraphs (g) and (h).
    The revisions and additions read as follows:

[[Page 126]]

Sec.  1421.111  MAL settlement.

    (a) The value of MALs at settlement will be determined by CCC on 
the following basis:
    (1) For nonrecourse MALs, the schedule of premiums and discounts 
for the commodity, provided that if the value of the eligible delivered 
collateral at settlement is:
    (i) Less than the amount due, the producer will pay to CCC the 
amount of such deficiency and charges, plus interest on such 
deficiency; or
    (ii) More than the amount due, the amount of such excess will be 
paid to the producer or, if applicable, to the producer and applicable 
secured creditors of the producer.
    (2) For recourse MALs, full repayment of principal plus interest is 
required. As specified in Sec.  1421.113, recourse MAL collateral may 
not be delivered or forfeited to CCC in satisfaction of indebtedness.
    (3) If CCC sells the commodity described in paragraph (a)(1) and 
(a)(2) of this section in settlement of the MAL, the sales proceeds 
will be applied to the amount owed as follows:
    (i) For nonrecourse MALs, CCC will in all instances retain all 
proceeds obtained from the sale of the eligible commodity and will not 
make any payment of any amount of such proceeds to any party, including 
the producer who has satisfied their obligation under the MAL through 
delivery of the commodity to CCC. CCC will settle with the producer 
based on the quality and quantity of the commodity; or
    (ii) For recourse MALs, the sales proceeds from the eligible 
collateral will be applied to the amount owed CCC by the producer. The 
producer will be responsible for any costs incurred by CCC in 
completing the sale and CCC will deduct the amount of these costs from 
the sale proceeds. If:
    (A) The amount received from the sale of the collateral is less 
than the amount due, the producer will pay to CCC the amount of such 
deficiency and costs, plus interest on the remaining amount owed; or
    (B) The amount received from the sale of the collateral is greater 
than the sum of the amount due, the amount of such excess will be paid 
to the producer or, if applicable, to the producer and applicable 
secured creditor of the producer.
* * * * *
    (f) Premiums and discounts will apply to all eligible loan 
commodities that are forfeited and delivered to CCC. There will not be 
any additional adjustments for peanuts at settlement, because such 
premiums and discounts will be accounted for when a peanut MAL is made.
    (g) If a deficiency exists after the collateral securing a 
nonrecourse MAL has been delivered to CCC or a recourse MAL sold under 
a local sale, a receivable for such deficiency will be established as 
specified in part 1403 of this chapter.
    (h) CCC will not assume any loss in quantity or quality of the loan 
collateral for any farm-stored MALs.

0
31. Amend Sec.  1421.112 as follows:
0
a. Revise paragraph (a);
0
b. In paragraph (b) introductory text, remove the word ``loan'' and add 
the word ``MAL'' in its place; and
0
c. In paragraph (b)(2), remove the word ``claim'' and add the word 
``receivable '' in its place.
    The revisions read as follows:


Sec.  1421.112  Foreclosure.

    (a)(1) Upon maturity and nonpayment of a warehouse-stored MAL, 
title to the unredeemed collateral securing the MAL will immediately 
vest in CCC.
    (2) Upon maturity and nonpayment of a farm-stored MAL, title to the 
unredeemed collateral will automatically transfer to CCC upon CCC 
demand.
    (3) When CCC acquires title to the unredeemed collateral, CCC will 
not pay for any market value that such collateral may have in excess of 
the MAL indebtedness, (the unpaid amount of the note and charges plus 
interest).
* * * * *

0
32. Amend Sec.  1421.113 as follows:
0
a. Revise the section heading and paragraph (a); and
0
b. In paragraph (b), remove the word ``must'' and add the words ``is 
required to'' in its place.
    The revisions read as follows:


Sec.  1421.113  Recourse MALs.

    (a) CCC will make recourse MALs available to eligible producers of 
high moisture corn, high moisture grain sorghum and other eligible loan 
commodities as determined by the Deputy Administrator, Farm Programs.
* * * * *

Subpart C--Loan Deficiency Payments

0
33. Amend Sec.  1421.200 as follows:
0
a. Revise paragraph (a);
0
b. In paragraph (b) introductory text, remove the words ``loan 
deficiency payments'' and add the word ``LDPs'' in their place;
0
c. In paragraph (b)(2), remove the word ``loan'' and add the word 
``MAL'' in its place; and
0
d. Add paragraph (e).
    The revision and addition read as follows:


Sec.  1421.200  Applicability.

    (a) During the MAL availability period, LDPs will be made available 
to eligible producers when the alternative repayment rate is less than 
the applicable county loan rate.
* * * * *
    (e) AGI and payment limitation requirements apply as specified in 
part 1400 of this chapter.

0
34. Revise Sec.  1421.201(a) and (c) to read as follows:


Sec.  1421.201  LDP rate.

    (a) The LDP rate for a crop will be the amount by which the loan 
rate for the crop exceeds the rate at which CCC has announced that 
producers may repay their MALs as specified in Sec.  1421.10.
* * * * *
    (c) The LDP applicable to such crop will be computed by multiplying 
the LDP rate, as determined under paragraph (b) of this section, by the 
quantity of the crop the producer is eligible to pledge as collateral 
for a nonrecourse MAL for which the LDP is requested.

0
35. Revise Sec.  1421.202(b) to read as follows:


Sec.  1421.202  LDP quantity.

* * * * *
    (b) Two or more producers may obtain a single joint LDP for 
commodities that are stored in the same storage facility. Two or more 
producers may obtain individual LDPs for their share of the commodity 
that is stored commingled in a farm storage facility with commodities 
for which an LDP has been requested and will be liable for any damage 
incurred by CCC for incorrect certification of such commodities under 
Sec.  1421.203.
* * * * *

0
36. Amend Sec.  1421.203 as follows:
0
a. Revise paragraphs (a)(2), and (e)(1);
0
b. In paragraph (e)(2) remove the word ``loans'' and add the word 
``MALs'' in its place; and
0
c. Revise paragraphs (e)(3), (g), and (h).
    The revisions read as follows:


Sec.  1421.203  Personal liability of the producer.

    (a) * * *
    (2) That violation of the terms and conditions of the LDP request, 
as applicable, will cause harm or damage to CCC in that funds may be 
disbursed to the producer for a quantity of a commodity that is not 
actually in existence or for a quantity on which the

[[Page 127]]

producer is not eligible. If CCC determines that the producer has 
violated the terms and conditions of the applicable forms prescribed by 
CCC, liquidated damages will be assessed on the quantity of the 
commodity that is involved in the violation.
* * * * *
    (e) * * *
    (1) Accelerate the maturity date on the producer's outstanding 
farm-stored MALs;
* * * * *
    (3) Deny LDPs for the current and 2 following crop years unless 
production evidence is presented to CCC. Depending on the severity of 
the violation, the county committee may deny future farm-stored MALs 
and LDPs without production evidence.
* * * * *
    (g) If the amount disbursed under LDPs exceeds the amount 
authorized by this part, the producer is liable for repayment of such 
excess and liquidated damages, plus interest.
    (h) In the case of joint LDPs, the personal liability for the 
amounts specified in this section is joint and several on the part of 
each producer signing the LDP application.
* * * * *

0
37. Revise the heading for subpart D to read as follows:

Subpart D--Grazing Payments for Wheat, Barley, Oats, and Triticale

0
38. Revise Sec.  1421.300(a) to read as follows:


Sec.  1421.300  Applicability.

    (a) The regulations in this subpart are applicable to the eligible 
acreage planted to wheat, barley, oats, or triticale that is grazed by 
livestock and not harvested in any other manner. This subpart specifies 
the terms and conditions under which a grazing payment will be made by 
CCC in lieu of an LDP.
* * * * *


Sec.  1421.301  [Amended]

0
39. Amend Sec.  1421.301, in paragraph (a), by removing the ``shall'' 
both times it appears and adding the word ``will'' in its place and by 
removing the words ``the Farm Service Agency (FSA)'' and adding the 
word ``FSA'' in their place.

0
40. Amend Sec.  1421.302 as follows:
0
a. In paragraph (a), remove the words ``2008 through 2012'' and add the 
word ``applicable'' in their place; and
0
b. Revise paragraphs (d)(1) and (f).
    The revisions read as follows:


Sec.  1421.302  Eligible producer and eligible land.

* * * * *
    (d)(1) A producer must, at the time the LDP agreement is signed, 
meet all other eligibility criteria for obtaining LDPs including AGI 
and payment limitation requirements as specified in part 1400 of this 
chapter.
* * * * *
    (f) Producers who elect to graze their wheat, barley, oats, or 
triticale will not be eligible for an indemnity under the Federal Crop 
Insurance Program provisions of Chapter IV of this title or a payment 
under the Noninsured Crop Assistance Program authorized under part 1437 
of this chapter.

0
41. Revise Sec.  1421.303 to read as follows:


Sec.  1421.303  Time and method for application.

    (a) Application for the program provided in this subpart must be 
received, at the FSA county office that is responsible for 
administering programs for the farm, no earlier than the date on which 
eligible crops would normally be harvested and no later than the final 
loan availability date as determined in accordance with Sec.  1421.5.
    (b) The application must describe the land to be grazed and, in 
accordance with standards set by CCC, the tract or field location.
    (c) The COC will determine the first harvest date, taking into 
account the date on which such crops are normally harvested locally for 
any purpose.
    (d) Where multiple producers are involved, the application must 
specify each producer's share in the crop.
    (1) A producer may only receive payments under this subpart that 
are commensurate with that producer's share in the crop as specified on 
the application.
    (2) Should a person who is entitled to receive a payment under this 
subpart die, that payment, as earned, may be made to other persons as 
provided for in the rules specified in part 707 of this title.
    (3) Third parties may also receive payments to the extent provided 
for in part 707 of this title for other situations involving an 
incapacitation of the producer.
    (e) Refusals to allow CCC to verify information on any application 
or report used for this subpart can result in program ineligibility and 
producers must provide CCC, FSA, and its agent access to the property 
involved and to all records as may be relevant to the making of 
payments under this subpart.
    (f) False statements will disqualify the producer from the program 
and may be subject to other sanctions including criminal sanctions.

0
42. Revise Sec.  1421.304(a), (c), and (d) to read as set forth below:


Sec.  1421.304  Payment amount.

    (a) The grazing payment rate will be the LDP in effect for the farm 
on the date which the producer submits a complete program application 
to CCC. For triticale, the grazing rate will be equal to the LDP rate 
in effect for the predominant class of wheat in the county where the 
farm is located as of the date the application is filed.
* * * * *
    (c) The payment yield will be:
    (1) The yield for the loan commodity on the farm in effect for the 
calculation of Price Loss Coverage as specified in part 1412 of this 
chapter;
    (2) For a farm for which Agriculture Risk Coverage is elected, the 
payment yield that would otherwise be in effect for that loan commodity 
on the farm in the absence of such election as specified in part 1412 
of this chapter; or
    (3) In the case of a farm for which no payment yield is established 
for the loan commodity on the farm, an appropriate yield as determined 
by the COC.
    (d) No payment may be received or retained under this subpart to 
the extent that the payment, were they considered to be LDPs, would 
place that person over the per person per year payment limit that 
applies to LDPs. The producer agrees that the CCC may collect any 
payment considered to be an overpayment by reason of this subsection by 
withholding LDPs until the matter is resolved, by treating the LDP as 
being not payable to the extent that a grazing refund would otherwise 
be due, by setoff, or by any other means available to CCC.
* * * * *


Sec.  1421.305  [Amended]

0
43. Amend Sec.  1421.305(a) introductory text, by removing the words 
``shall be'' and adding the word ``is'' in their place.

0
44. Amend Sec.  1421.306 as follows:
0
a. Revise paragraph (a);
0
b. In paragraph (b), remove the words ``shall be'' and add the word 
``are'' in their place; and
0
c. Revise paragraph (c).
    The revisions read as follows:


Sec.  1421.306  Refunds; joint and several liability.

    (a) In the event there is a failure to comply with any term, 
requirement, or condition for payment arising under this application, 
of this subpart, and if any refund of a payment to CCC becomes due for 
that or other reason in

[[Page 128]]

connection with the application, of this subpart, all payments made 
under this subpart to any producer are to be refunded to CCC together 
with interest as determined in accordance with paragraph (c) of this 
section and late-payment charges as provided for in part 1402 of this 
chapter.
* * * * *
    (c) Interest is applicable to refunds required from the producer. 
Interest will be charged at the rate of interest which the United 
States Treasury charges CCC for funds, as of the date CCC made such 
benefits available. Interest will accrue from the date such benefits 
were made available to the date of repayment but the interest rate will 
increase to reflect any increase in the rate charged to CCC by Treasury 
for any percent of time for which the interest assessment is collected. 
CCC may waive the accrual of interest if CCC determines that the cause 
of the erroneous determination was not due to any action of the 
producer.
* * * * *

Subpart E--Designated Marketing Associations for Peanuts

0
45. Revise Sec.  1421.400 to read as follows:


Sec.  1421.400  Applicability.

    (a) This subpart specifies the terms and conditions under which an 
entity that is a DMA of peanut producers, or a subsidiary of such an 
entity, may qualify as a DMA, as defined in Sec.  1421.3. DMAs may 
process peanut MALs and LDPs on behalf of producers.
    (b) This subpart only applies with respect to peanut MALs and 
peanut LDPs.

0
46. Amend Sec.  1421.401 as follows:
0
a. In paragraph (a) introductory text, remove the words ``marketing 
loans'' and add the word ``MALs'' in their place and remove the words 
``loan deficiency payments'' and add the word ``LDPs'' in their place;
0
b. In paragraph (a)(2), remove the word ``shall'';
0
c. Revise paragraph (a)(7);
0
d. In paragraph (b) introductory text, remove the word ``shall''; and
0
e. In paragraph (b)(1), remove the words ``program regulations'' and 
add the words ``MAL and LDP regulations'' in their place.
    The revision reads as follows:


Sec.  1421.401  DMA responsibilities.

    (a) * * *
    (7) Collect MAL repayments from producers or buyers and transmit 
those funds to CCC;
* * * * *

0
47. Revise Sec.  1421.402 section heading and paragraphs (a) 
introductory text and (4), and (b) to read as follows:


Sec.  1421.402  DMA eligibility to process MALs and LDPs.

    (a) A DMA is eligible to process any MAL or LDPs only if approved 
in advance to handle such matters by the Farm Service Agency pursuant 
to this part; and
* * * * *
    (4) The DMA does not take title at any time to any peanuts for 
which it processes MALs or LDPs, irrespective of whether such title is 
taken before or after those activities are performed. If such title or 
interest is taken, the DMA is required to return to CCC the full amount 
of the CCC proceeds disbursed with respect to the peanuts; and
* * * * *
    (b) The DMA's activities under this part are to be conducted only 
with respect to peanuts and only for producers and peanuts that meet 
all the eligibility requirements of this part. Such requirements 
include, but are not limited to, the requirement of Sec.  1421.6 that 
the producer must have the beneficial interest in the peanuts while the 
peanuts are under MAL or when the LDP is received and must be the only 
person that has had such an interest in the peanuts prior to that time 
except as allowed by Sec.  1421.6.

0
48. Revise Sec.  1421.403(a) introductory text, to read as follows:


Sec.  1421.403  DMA approval.

    (a) Entities wishing to apply to be a DMA enabled to perform MAL 
and LDP functions under this part for peanuts must submit an 
application for such approval to FSA in a form approved by CCC. That 
application will include the following:
* * * * *

0
49. Revise Sec.  1421.404 to read as follows:


Sec.  1421.404  Financial security.

    (a) In order to be approved to handle MALs and LDPs, a DMA must:
    (1) Have a current net worth ratio of at least 1:1; and
    (2) Provide security equal to $100,000 or a greater amount as 
determined by CCC.
    (b) [Reserved]

0
50. Revise Sec.  1421.405 to read as follows:


Sec.  1421.405  Liability.

    (a) DMAs must indemnify CCC against any claim or loss by CCC in 
connection with the processing of any MALs or LDPs or other activity 
carried out by the DMA. If CCC pays any claim or suffers a loss as a 
result of the actions of DMA, or if a refund otherwise becomes due to 
CCC, payment in the amount of such losses or refund, plus interest, may 
be set-off by CCC from the financial security provided by DMA as 
required by this subpart. If the amount of the loss exceeds the amount 
of the financial security, such amount is paid to CCC by DMA with 
interest. Interest and other charges may be assessed consistent with 
Sec.  1403.9 of this chapter. Remedies provided in this section or part 
are in addition to other remedies or penalties, whether civil, criminal 
or otherwise, as may apply.
    (b) If a DMA becomes liable to CCC under paragraph (a) of this 
section or otherwise in connection with this subpart, such DMA is not 
eligible to process an LDP or MAL until the receivable amount owed CCC 
is paid in full, and the full amount of financial security required by 
this subpart has been restored.


Sec.  1421.406  [Amended]

0
51. Amend Sec.  1421.406 as follows:
0
a. In paragraph (a) introductory text, remove the word ``shall'' and 
add the word ``must'' in its place;
0
b. In paragraph (a)(2), remove the word ``loan'' and add the word 
``MAL'' in its place;
0
c. In paragraph (b), remove the word ``loans'' and add the word 
``MALs'' in its place, and remove the word ``shall'' and add the word 
``must'' in its place; and
0
d. In paragraphs (d)(2) and (e), remove the word ``shall'' and add the 
word ``must'' in its place.

0
52. Revise Sec.  1421.407(b) to read as follows:


Sec.  1421.407  Suspension and termination.

* * * * *
    (b) Termination. The DMA agreement may be terminated by the DMA 
upon 30 calendar days' written notice to CCC. CCC may cancel the 
agreement at any time. Upon termination DMA must immediately cease 
processing MAL or LDP requests and documents except as needed to 
preserve CCC's position with respect to existing MALs or LDPs.


Sec.  1421.408  [Amended]

0
53. Amend Sec.  1421.408 as follows:
0
a. In paragraph (a) introductory text, remove the word ``loans'' and 
add the words ``MALs and LDPs'' in its place; and
0
b. In paragraph (a)(8) remove the word ``peanuts'' and add the word 
``peanut'' in its place.

0
54. Revise Sec.  1421.409 to read as follows:

[[Page 129]]

Sec.  1421.409  Monitoring AGI and payment limitations.

    (a) DMAs are required to monitor their producers' AGIs and may not 
permit repayments with a market loan gain on peanut MALs or process 
peanut LDPs for those producers with annual AGI over the allowable 
limit as specified in part 1400 of this chapter.
    (b) DMAs are required to monitor their producers' payment limit and 
not process market loan gains on peanut MALs or peanut LDPs that would 
produce a gain over the payment limit as specified in part 1400 of this 
chapter.


Sec.  1421.410  [Amended]

0
55. Amend Sec.  1421.410 by removing the word ``shall'' and adding the 
word ``must'' in its place.


Sec.  1421.411  [Amended]

0
56. Amend Sec.  1421.411 by removing the word ``shall'' and adding the 
word ``may'' in its place.

0
57. Revise Sec.  1421.413 to read as follows:


Sec.  1421.413  Liens and waivers.

    (a) DMAs performing MAL-related functions pursuant to the authority 
in this subpart must determine, to the same extent as required for MALs 
handled by FSA county offices, whether a lien on the peanuts exists by 
performing or obtaining a lien search for all peanuts to be pledged for 
each MAL, except that the cost associated with such lien search and any 
necessary lien waivers is borne by the DMA. If a lien exists, the DMA 
must obtain, on an approved CCC form, a signed waiver from each 
lienholder with an interest in any such lien.
    (b) [Reserved]

0
58. Amend Sec.  1421.415 as follows:
0
a. Redesignate paragraphs (a) through (e) as paragraphs (a)(1) through 
(a)(5), redesignate the introductory text as paragraph (a), and reserve 
paragraph (b);
0
b. In newly redesignated paragraph (a) introductory text, remove the 
word ``shall'' and add the word ``must'' in its place;
0
c. Revise newly redesignated paragraph (a)(1); and
0
d. In newly redesignated paragraph (a)(2), remove the words 
``electronic warehouse receipt'' both times they appear and add the 
word ``EWR'' in their place.
    The revision reads as follows:


Sec.  1421.415  Processing marketing assistance loans.

    (a) * * *
    (1) Make all the determinations that are a precondition for a MAL, 
including all producer eligibility requirements, lien determinations, 
and if requested by the producer, enter into a power of attorney 
agreement with the producer.
* * * * *

0
59. Amend Sec.  1421.416 as follows:
0
a. In paragraph (a) introductory text, remove the word ``shall'' and 
add the word ``must'' in its place;
0
b. Revise paragraph (a)(1); and
0
c. In paragraph (a)(4) remove the word ``loan'' and add the word 
``MAL'' in its place.
    The revision reads as follows:


Sec.  1421.416  Processing loan deficiency payments.

    (a) * * *
    (1) In addition to other determinations that are required, the DMA 
must determine whether the producer exceeds the AGI limits and has 
sufficient eligibility under the applicable payment limit to allow the 
receipt of the LDP. If the producer is over the AGI limit or there is 
not sufficient payment limitation eligibility, the DMA cannot process 
the request.
* * * * *


Sec.  1421.417  [Amended]

0
60. Amend Sec.  1421.417 as follows:
0
a. In paragraph (c), remove the words ``shall be'' in both places and 
add the words ``are to be'' in their place; and
0
b. In paragraph (d), remove the word ``shall'' and add the words ``is 
to'' in their place.

0
61. Amend Sec.  1421.418 as follows:
0
a. Revise paragraph (a) introductory text; and
0
b. In paragraph (b) introductory text, remove the word ``shall'' and 
add the word ``must'' in its place.
    The revision reads as follows:


Sec.  1421.418  Submitting MAL and LDP documentation to FSA.

    (a) Until such time as an alternative FSA MAL- or LDP-making system 
is made available to DMAs, within 3 business days of any DMA prepared 
disbursement, the DMA must separately group and submit to FSA:
* * * * *


Sec.  1421.419  [Amended]

0
62. Amend Sec.  1421.419(a) introductory text, by removing the words 
``shall be'' and adding the word ``is'' in their place.

0
63. Revise Sec.  1421.420 to read as follows:


Sec.  1421.420  Inspections and reviews.

    The books, documents, papers, and records of the DMA and parent 
company must be maintained for 6 years after the applicable crop year 
and be made available to CCC for inspection and examination at all 
reasonable times. At any time after an application is received, CCC has 
the right to examine all books, documents, papers, and determine 
whether the DMA is operating or has operated in accordance with the 
regulations in this part, any articles of incorporation, articles of 
association, partnership documents, agreements with producers, the 
representations made by the DMA in its application for approval, and, 
where applicable, its agreements with CCC. If the DMA is determined to 
be not complying with this part or any of its agreements, CCC will take 
appropriate action as provided in elsewhere in this subpart or other 
action CCC determines appropriate.


Sec. Sec.  1421.4, 1421.9, 1421.10, 1421.13, 1421.101. 1421.102, 
1421.103, 1421.105, 1421.106, 1421.108, 1421.109, 1421.111, 1421.113, 
1421.200  [Amended]

0
64. In addition to the amendments set forth above, in 7 CFR part 1421, 
remove the words ``marketing assistance loan'' and add, in their place, 
the word ``MAL'' wherever they appear in the following places:
0
a. In Sec.  1421.4 (e)(1) introductory text and (e)(1)(i);
0
b. In Sec.  1421.9 (a) and (b);
0
c. In Sec.  1421.10 (e) introductory text and (i) introductory text;
0
d. In Sec.  1421.13(a)(2);
0
e. In Sec.  1421.101(a)(2);
0
f. In Sec.  1421.102(a)(1);
0
g. In Sec.  1421.103(a)(1);
0
h. In Sec.  1421.105 (c) introductory text, (c)(1), and (d)(1)(i) ;
0
i. In Sec.  1421.106(b);
0
j. In Sec.  1421.108 (c)(1) and (2);
0
k. In Sec.  1421.109 (a) introductory text, (e) introductory text, and 
(f) introductory text;
0
l. In Sec.  1421.111(b)(2);
0
m. In Sec.  1421.113(c); and
0
n. In Sec.  1421.200(b)(1).


Sec. Sec.  1421.3, 1421.100  [Amended]

0
65. In addition to the amendments set forth above, in 7 CFR part 1421, 
remove the words ``marketing assistance loans'' and add, in their 
place, the word ``MALs'' wherever they appear in the following places:
0
a. In Sec.  1421.3 in the definition of ``high moisture state''; and
0
b. In Sec.  1421.100.


Sec. Sec.  1421.8, 1421.13, 1421.200, 1421.201, 1421.202, 
1421.203  [Amended]

0
66. In addition to the amendments set forth above, in 7 CFR part 1421, 
remove the words ``loan deficiency payment'' and add, in their place, 
the word ``LDP'' wherever they appear in the following places:

[[Page 130]]

0
a. In Sec.  1421.8 in newly redesignated paragraph (b)(1)(ii);
0
b. In Sec.  1421.13(a)(1);
0
c. In Sec.  1421.200(c)(1), (2), and (d);
0
d. In Sec.  1421.201(b);
0
e. In Sec.  1421.202 (a) and (c); and
0
f. In Sec.  1421.203 (a) introductory text, (a)(1), (b), (c)(1) and 
(2).


Sec. Sec.  1421.2, 1421.102, 1421.106, 1421.107, 1421.108, 1421.109, 
1421.111, 1421.112, 1421.203, 1421.300, 1421.301, 1421.304, 1421.305, 
1421.306, 1421.417, 1421.418, 1421.419  [Amended]

0
67. In addition to the amendments set forth above, in 7 CFR part 1421, 
remove the word ``shall'' each time it appears and add, in its place, 
the word ``will'' wherever they appear in the following places:
0
a. Sec.  1421.2(c);
0
b. Sec.  1421.102(a)(4);
0
c. Sec.  1421.106(e) introductory text and (f);
0
d. Sec.  1421.107(g)(2);
0
e. Sec.  1421.108(a)(2);
0
f. Sec.  1421.109(c), (e)(1), and (i) introductory text;
0
g. Sec.  1421.111(c) introductory text and (c)(1);
0
h. Sec.  1421.112(b)(1);
0
i. Sec.  1421.203(e) introductory text and (f) introductory text;
0
j. Sec.  1421.300(b);
0
k. Sec.  1421.301(c) introductory text and (d);
0
l. Sec.  1421.304(b);
0
m. Sec.  1421.305(b);
0
n. Sec.  1421.306(d) and (e);
0
o. Sec.  1421.417(e);
0
p. Sec.  1421.418(d); and
0
q. Sec.  1421.419(b).

PART 1425--COOPERATIVE MARKETING ASSOCIATIONS

0
68. The authority citation for part 1425 continues to read as follows:

    Authority:  7 U.S.C. 1441 and 1421, 7 U.S.C. 7931-7939; and 15 
U.S.C. 714b, 714c, and 714j.

0
69. Revise Sec.  1425.1 to read as follows:


Sec.  1425.1  Applicability.

    (a) This part specifies the terms and conditions an approved 
Cooperative Marketing Association (CMA) must meet to obtain marketing 
assistance loans (MALs) and loan deficiency payments (LDPs) from CCC on 
behalf of its members.
    (b) A CMA meeting the requirements of this part may obtain MALs and 
LDPs for any eligible commodity for which a MAL and LDP program is in 
effect.

0
70. Revise Sec.  1425.2 to read as follows:


Sec.  1425.2  Administration.

    (a) On behalf of the Commodity Credit Corporation (CCC), the Farm 
Service Agency (FSA) will administer the provisions of this part under 
the general direction and supervision of the Deputy Administrator for 
Farm Programs.
    (b) In the field, the provisions of this part will be administered 
by the State and county FSA committees.

0
71. Amend Sec.  1425.3 as follows:
0
a. Revise the introductory text;
0
b. In the definition of ``Approved cooperative marketing association'', 
remove the word ``loan'' and add the word ``MAL'' in its place;
0
c. In the definition of ``Authorized commodity'', remove the words 
``marketing assistance loans'' and add the word ``MALs'' in their place 
and remove the words ``Loan deficiency payments'' and add the word 
``LDPs'' in their place;
0
d. In the definition of ``Eligible commodity'', remove the word 
``loan'' and add the word ``MALs'' in its place, and remove the word 
``LDP'' and add the word ``LDPs'' in its place;
0
e. Add, in alphabetical order, a definition for ``Loan deficiency 
payment'';
0
f. In the definition of ``Loan pool'', remove the word ``loans'' and 
add the word ``MALs'' in its place, and remove the word ``LDP's'' and 
add the word ``LDPs'' in its place;
0
g. Remove the definition of ``Market gain''; and
0
h. Add, in alphabetical order, a definition of ``Market loan gain''.
    The revisions and addition read as follows:


Sec.  1425.3  Definitions.

    The definitions in this section are applicable for all purposes of 
program administration. The terms defined in parts 718 of this title 
and parts 1421 and 1427 of this chapter are also applicable, except 
where those definitions conflict with the definitions in this section.
* * * * *
    Loan deficiency payment (LDP) means a payment made in lieu of a MAL 
when the CCC-determined value, which is based on the current local 
price in a county, is below the applicable county loan rate. The 
payment is the difference between the two rates times the eligible 
quantity.
* * * * *
    Market loan gain is the loan rate, minus the repayment rate on 
loans repaid at a rate that is less than the loan rate. The total of 
all market loan gains received by a producer for an applicable crop 
year cannot exceed the producer's applicable payment limitation as 
specified in part 1400 of this chapter. A producer's adjusted gross 
income must also be below the limit as specified in part 1400 of this 
chapter to receive a market loan gain.
* * * * *

0
72. Amend Sec.  1425.4 as follows:
0
a. Revise paragraph (a), introductory text;
0
b. In paragraph (a)(6), remove the word ``loan'' and add the word 
``MAL'' in its place;
0
c. In paragraph (a)(7), remove the words ``CCC loan'' and add the word 
``MAL'' in their place:
0
d. In paragraph (b)(1), remove the words ``shall disclose'' and add the 
word ``discloses'' in their place;
0
e. In paragraph (c) introductory text, remove the word ``shall'' and 
add the word ``must'' in its place; and
0
f. In paragraph (c)(2), remove the word ``loan'' and add the word 
``MAL'' in its place.
    The revision reads as follows:


Sec.  1425.4  Approval.

    (a) For a cooperative to be eligible to participate in the MAL and 
LDP Programs as an approved CMA, the cooperative must submit an 
application to CCC. The application must include:
* * * * *

0
73. Revise Sec.  1425.6 to read as follows:


Sec.  1425.6  Approved CMAs.

    (a) CCC may approve a CMA to participate in the MAL and LDP program 
as:
    (1) Unconditionally approved; or
    (2) Conditionally approved.
    (b) If CCC determines a CMA is in substantial but not total 
compliance with the requirements of this part, CCC may make the 
approval conditional on the CMA achieving full compliance within a 
reasonable period of time, as specified in the notification of 
conditional approval.
    (c) A CMA is approved to participate in the MAL and LDP program 
until the CMA's approval is suspended or terminated by CCC.

0
74. Amend Sec.  1425.7 as follows:
0
a. Revise paragraphs (a) and (d); and
0
b. In paragraph (e), remove the word ``shall'' and add the word 
``will'' in its place wherever it appears.
    The revision reads as follows:


Sec.  1425.7  Suspension and termination of approval.

    (a) CCC may suspend a CMA from obtaining MALs and LDPs when CCC 
determines the CMA has violated any of its agreements with CCC or the 
CMA has not:
    (1) Operated according to the CMA's application for approval or its 
last recertification submission;
    (2) Complied with applicable regulations; or

[[Page 131]]

    (3) Corrected deficiencies of the CMA's operation as noted by CCC.
* * * * *
    (d) If a CMA does not have any MALs outstanding, it may voluntarily 
terminate its participation in the MAL and LDP program through written 
notice to CCC.
* * * * *


Sec.  1425.9  [Amended]

0
75a. Amend Sec.  1425.9(a) by removing the word ``shall'' and adding 
the word ``must'' in its place.


Sec.  1425.10  [Amended]

0
75b. Amend Sec.  1425.10 by removing the word ``shall'' and adding the 
word ``must'' in its place.


Sec.  1425.14  [Amended]

0
76. Amend Sec.  1425.14(a) introductory text, by removing the word 
``loan'' and adding the word ``MAL'' in its place.


Sec.  1425.15  [Amended]

0
77. Amend Sec.  1425.15, by removing the word ``shall'' and adding the 
word ``will'' in its place.

0
78. Revise Sec.  1425.16 to read as follows:


Sec.  1425.16  Payment limitation and adjusted gross income provisions.

    (a) CMAs must apply any market loan gains received on behalf of 
members to the loan pool for distribution. However, CMAs must also 
monitor market loan gains they receive from CCC on behalf of their 
members and must not obtain market loan gains for a member above the 
member's payment limitation determined as specified in part 1400 of 
this chapter.
    (b) CMAs must monitor LDPs they receive from CCC on behalf of their 
members and not obtain LDPs for a member whose AGI is above the limit 
specified in part 1400 of this chapter.

0
79. Amend Sec.  1425.17 as follows:
0
a. Revise paragraphs (c) introductory text, (1), and (3);
0
b. Add paragraph (c)(6);
0
c. In paragraph (d)(2), remove the words ``a loan'' and add the words 
``a MAL'' in their place;
0
d. Revise paragraph (e) ;
0
e. In paragraphs (f) remove the word ``loan'' and add the word ``MAL'' 
in its place.
0
f. In paragraph (g) remove the word ``Loans'' and add the word ``MALs'' 
in its place;
0
g. Revise paragraphs (h) through (m);
0
h. In paragraph (n) introductory text, remove the word ``loan'' and add 
the word ``MAL'' in its place; and
0
i. Add paragraph (o).
    The revisions and additions read as follows:


Sec.  1425.17  Eligible commodity and pooling.

* * * * *
    (c) A loan pool is eligible for MALs and LDPs if:
    (1) All of the commodity in the loan pool is eligible for MALs or 
LDPs, except as provided in paragraphs (d) and (e) of this section;
* * * * *
    (3) The commodity was delivered and the members are eligible for 
MALs and LDPs;
* * * * *
    (6) Members agree to refund to the CMA, if requested by the CMA, 
any denied market loan gain or LDP benefit realized when the proceeds 
from the loan pool are distributed to the CMA members.
* * * * *
    (e) A CMA may include a commodity in a pool that is ineligible 
based on FSA records if the producer has certified to the CMA the 
commodity is eligible. (For example, an otherwise eligible commodity 
that is not reflected on a timely filed FSA acreage report.) CCC will 
specify a time period during which CMAs may obtain MALs or LDPs on the 
applicable quantity while the eligibility status is resolved. If the 
final resolution is that the commodity was ineligible, the CMA must 
repay any MALs outstanding with principal plus interest and any market 
loan gains obtained plus interest from the date of receiving the market 
loan gain through the repayment date.
* * * * *
    (h) A CMA must have identity-preserved loan pool commodities stored 
in approved warehouses while the commodities are pledged as collateral 
for MAL.
    (i) Comingled commodities with MAL eligibility stored on a farm or 
in a warehouse may be transferred to an authorized warehouse.
    (j) Commodities pledged as collateral for MALs must be free and 
clear of all liens and encumbrances based on a CMA's financial 
agreements or the CMA must obtain and complete a lien waiver form. When 
liens are applicable based on CMA financial agreements, the CMA must 
provide CCC the completed lien waiver form. CMAs must not take any 
action to cause a lien or encumbrance to be placed on a commodity after 
a MAL is approved.
    (k) If a MAL or LDP is obtained for any quantity in a loan pool, 
allocations of costs and expenses among separate pools for the 
commodity in the pool will be made according to generally accepted 
accounting principles.
    (l) A CMA must not apply marketing losses from a commodity not used 
to obtain a MAL or LDP against the marketing proceeds of a commodity 
used to obtain a MAL or LDP.
    (m) CMAs will not carry forward losses from one loan pool and apply 
them against a subsequent loan pool without CCC's authorization. CCC 
may grant authorization when it determines that carrying forward the 
loss complies with the MAL or LDP Program intent.
* * * * *
    (o) Denied market loan gain or denied LDP benefits will be based on 
payment limitation attribution as specified in part 1400 of this 
chapter, and must be repaid to CCC by the CMA receiving the MAL or LDP 
proceeds.

0
80. Amend Sec.  1425.18 as follows;
0
a. In paragraph (a)(1) introductory text, remove the word ``shall'' and 
add the word ``must'' in its place;
0
b. In paragraph (a)(1)(ii), remove the word ``loans'' and add the word 
``MALs'' in its place and remove the word ``LDP's'' and add the word 
``LDPs'' in its place;
0
c. In paragraphs (a)(1)(iii) and (2), remove the word ``loan'' each 
time it appears and add the word ``MAL'' in its place;
0
d. In paragraph (b)(1), remove the word ``shall'' both times it appears 
and add the word ``must'' in its place and remove the reference to'' 
Sec.  1425.4(b)(7)'' and add a reference to ``Sec.  1425.4(a)(5)'' in 
its place;
0
e. In paragraph (b)(3), remove the word ``Loan'' and add the word 
``MAL'' in its place; and remove the word ``loans'' and add the word 
``MALs'' in its place;
0
f. Revise paragraph (b)(4); and
0
g. Add paragraph (c).
    The revision and addition read as follows:


Sec.  1425.18  Distribution of proceeds.

* * * * *
    (b) * * *
    (4) When notified by CCC that MAL and LDP distributions to a member 
are required to be reduced for a program year, farm, or crop, a CMA 
must not make subsequent pool distributions and must reimburse CCC for 
distributions previously issued, if applicable.
    (c) CMAs must apply market loan gains to the payment limit that is 
earned on date of redemption for their members when the CMA distributes 
the pool funds.

0
81. Revise Sec.  1425.19 to read as follows:

[[Page 132]]

Sec.  1425.19  Member cooperatives.

    (a) A CMA may obtain MALs or LDPs on behalf of a member cooperative 
when the member cooperative is itself a CMA operating in accordance 
with this part. For example, a cooperative of producers may be a member 
of a CMA that markets a commodity.
    (b) If the CMA is approved according to Sec.  1425.6, and otherwise 
meets all the requirements of this part, the MALs and LDPs submitted by 
members of that CMA will be eligible.


Sec.  1425.21  [Amended]

0
82. Amend Sec.  1425.21 as follows:
0
a. In paragraph (a) introductory text, remove the word ``loan'' and add 
the word ``MAL'' in its place;
0
b. In paragraph (a)(2), remove the words ``loans and LDP's'' and add 
the words ``MALs and LDPs'' in its place; and
0
c. In paragraph (b) introductory text, (1), and (2), remove the word 
``shall'' and add the word ``must'' in its place.

0
83. Amend Sec.  1425.22 as follows:
0
a. In paragraph (a), remove the word ``shall'' both times it appears 
and add the word ``must'' in its place;
0
b. In paragraph (b), remove the words ``shall have'' and add the word 
``has'' in its place; and
0
c. Add paragraph (c).
    The addition reads as follows:


Sec.  1425.22  Inspection and investigation.

* * * * *
    (c) CCC reserves the right to determine examinations of CMAs based 
on:
    (1) A 3-year rotation; or
    (2) The previous crop year MAL or LDP activity if market loan gain 
and LDP activity increases substantially.


Sec.  1425.23  [Amended]

0
84. In Sec.  1425.23(a) and (b), remove the word ``shall'' and add the 
word ``must'' in its place.


Sec.  1425.24  [Removed and Reserved]

0
85. Remove and reserve Sec.  1425.24.

PART 1427--COTTON

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

    Authority:  7 U.S.C. 7231-7237, 7931-7936, 9011, and 9031-40, 15 
U.S.C. 714b and c.

0
87. Amend Sec.  1427.1 as follows:
0
a. Revise paragraphs (a), (b), and (d);
0
b. In paragraph (c), remove the words ``Marketing assistance loans and 
loan deficiency payments'' and add the words ``MALs and LDPs'' in their 
place; and
0
c. Remove paragraph (e).
    The revisions read as follows:


Sec.  1427.1  Applicability.

    (a) The regulations in this subpart are applicable to crops of 
upland cotton and extra long staple cotton. This part specifies the 
general provisions under which the Marketing Assistance Loans (MAL) and 
Loan Deficiency Payment (LDP) Programs will be administered by the 
Commodity Credit Corporation (CCC). Eligibility to receive MALs and 
LDPs is subject to additional terms and conditions that are in the MAL 
note and security agreement and the LDP application. The provisions in 
this part apply to the 2014 and subsequent crops.
    (b) The basic loan rate, the schedule of premiums and discounts, 
and forms applicable to the cotton MAL and LDP Programs are available 
from FSA offices. The forms for use in connection with the programs in 
this subpart will be prescribed by CCC.
* * * * *
    (d) Adjusted gross income (AGI) and payment limitation provisions 
specified in part 1400 of this chapter are applicable to MALs and LDPs.

0
88. Amend Sec.  1427.2 as follows:
0
a. Revise paragraph (a);
0
b. In paragraph (c) introductory text, remove the word ``shall'' both 
times it appears and add the word ``will'' in its place;
0
c. In paragraph (e), remove the words ``marketing assistance and loan 
deficiency payment programs'' and add the words ``MAL and LDP 
Programs'' in their place; and
0
d. In paragraph (f), remove the words ``marketing assistance loan and 
loan deficiency payment'' and add the words ``MAL and LDP'' in their 
place.
    The revision reads as follows:


Sec.  1427.2  Administration.

    (a) The MAL and LDP Programs will be administered under the general 
supervision of the Executive Vice President, CCC, or a designee and 
will be carried out by FSA employees, and state and county committees.
* * * * *

0
89. Amend Sec.  1427.3 as follows:
0
a. Revise the introductory text;
0
b. Remove the definitions for ``Approved cooperative marketing 
association'', ``Commodity certificate exchange'', and ``Loan 
deficiency payment'';
0
c. Add, in alphabetical order, definitions for ``Cooperative marketing 
association'', and ``Loan deficiency payment (LDP)''; and
0
d. Revise the definition of ``Warehouse receipt''.
    The revisions and additions read as follows:


Sec.  1427.3  Definitions.

    The definitions in this section apply for all purposes of program 
administration regarding the cotton loan and LDP programs. The terms 
defined in part 718 of this title and parts 1412, 1421, 1423, 1425, and 
1434 of this chapter also apply, except where they conflict with 
definitions in this section.
* * * * *
    Cooperative marketing association (CMA) means a cooperative 
marketing association, approved as specified in part 1425 of this 
chapter, that has executed a Cotton Cooperative Loan Agreement.
* * * * *
    Loan deficiency payment (LDP) means a payment made in lieu of a MAL 
when the CCC-determined value, which is based on the current local 
price in a county, is below the applicable county loan rate. The 
payment is the difference between the two rates times the eligible 
quantity.
* * * * *
    Warehouse receipt means a receipt containing the required 
information specified in this part that may or may not be certificated 
for delivery for a futures-pricing contract, and is an electronic 
warehouse receipt record issued by such warehouse recorded in a central 
filing system or systems maintained in one or more locations that are 
approved by FSA to operate such system.
* * * * *

0
90. Amend Sec.  1427.4 as follows:
0
a. In paragraph (a)(1) remove the words and punctuation ``trust,or'' 
and add the words and punctuation ``trust, or'' in their place;
0
b. In paragraph (b) remove the words ``shall be'' both times it appears 
and add the word ``is'' in their place;
0
c. Revise paragraphs (d)(1), (e), and (f); and
0
d. Add paragraph (g).
    The revisions and addition read as follows:


Sec.  1427.4  Eligible producer.

* * * * *
    (d)(1) If more than one producer executes a note and security 
agreement with CCC, each such producer is jointly and severally liable 
for the violation of the terms and conditions of the note and the 
regulations in this part. Each such producer also remains liable for 
repayment of the entire MAL amount until the MAL is fully repaid 
without regard to such producer's claimed share in the commodity 
pledged as collateral for the MAL. In addition, such producer may not 
amend the note and security agreement with respect to the

[[Page 133]]

producer's claimed share in such commodities, or loan proceeds, after 
execution of the note and security agreement by CCC.
* * * * *
    (e) A CMA may obtain MALs and LDPs on eligible cotton on behalf of 
its members who are eligible to receive loans or LDPs for a crop of 
cotton. For purposes of this subpart, the term ``producer'' includes a 
CMA.
    (f) In case of death, incompetency, or disappearance of any 
producer who is entitled to the payment of any sum in settlement of a 
MAL or LDP, payment will, upon application to CCC, be made to the 
person(s) who would be entitled to the producer's payment under the 
regulations in part 707 of this title.
    (g) Adjusted gross income (AGI) and payment limitation provisions 
specified in part 1400 of this chapter apply to producer eligibility 
for MALs and LDPs.

0
91. Amend Sec.  1427.5 as follows:
0
a. In paragraph (a) introductory text, remove the words ``loan 
deficiency payments'' and add the word ``LDPs'' in their place, and 
remove the words ``loan deficiency payment'' and add the word ``LDP'' 
in their place;
0
b. In paragraph (a)(1) introductory text, remove the words ``loan 
deficiency payment'' and add the word ``LDP'' in their place, and 
remove the words ``loan deficiency payments'' and add the word ``LDPs'' 
in their place;
0
c. In paragraph (a)(1)(i), add the word ``FSA'' immediately before the 
word ``county'';
0
d. Revise paragraph (b) introductory text;
0
e. In paragraph (b)(2), remove the words ``a loan deficiency payment'' 
and add the words ``an LDP'' in their place;
0
f. Revise paragraph (b)(5);
0
g. In paragraphs (b)(6) and (b)(8), remove the words ``a loan 
deficiency payment'' and add the words ``an LDP'' in their place;
0
h. Revise paragraph (b)(10);
0
i. Revise paragraph (e);
0
j. In paragraph (g) introductory text, remove the words ``a loan 
deficiency payment'' and add the words ``an LDP'' in their place;
0
k. Revise paragraphs (g)(3), the undesignated quoted text following 
paragraph (j)(2), and (l) introductory text;
0
l. Remove paragraph (n) and redesignate paragraph (o) as paragraph (n); 
and
0
m. Revise newly redesignated paragraph (n).
    The revisions read as follows:


Sec.  1427.5  General eligibility requirements.

* * * * *
    (b) For a bale of cotton to be eligible to be pledged as collateral 
for a MAL or a subject of an LDP application, the bale must:
* * * * *
    (5) Not be compressed to universal density at a warehouse where 
side pressure has been applied and not be a flat or modified flat bale; 
* * *
    (10) Be packaged in materials that meet the specifications adopted 
by the Joint Cotton Industry Bale Packaging Committee sponsored by the 
National Cotton Council of America for the applicable year or that are 
identified and approved by the Joint Industry Bale Packaging Committee 
as experimental packaging materials for the applicable crop year, 
except that producers approved for the outside storage of ELS cotton as 
provided for in Sec.  1427.10(e) must assure that the packaging 
materials used for bales stored outside must meet the materials, 
sealing, and humidity specifications contained in the outside-storage 
addendum to their ELS cotton MAL agreement.
* * * * *
    (e) To be eligible to receive MALs and LDPs, a producer must have 
beneficial interest in the cotton that is tendered to CCC for a MAL or 
LDP. For the purposes of this part, the term ``beneficial interest'' 
refers to a determination by CCC that a person has the requisite title 
to and control of cotton that is tendered to CCC as collateral for a 
MAL or is the cotton that will be used to determine an LDP. A 
determination of whether a person has beneficial interest in cotton is 
made by CCC in accordance with this part and is not based upon a 
determination under any State law or any other regulation of a Federal 
agency.
* * * * *
    (g) * * *
    (3) Have control of the cotton from the time of planting through 
the date the producer has elected to determine the LDP rate. To have 
control of the cotton, such person must have complete decision making 
authority regarding whether an LDP will be requested with respect to 
the cotton; when the loan deficiency rate will be selected; and where 
the cotton will be maintained prior to the date on which the LDP rate 
will be determined;
* * * * *
    (j) * * *
    (2) * * *
    Notwithstanding any other provision of this option to purchase or 
any other contract, title and control of the cotton and beneficial 
interest in the cotton as specified in 7 CFR 1427.5 will remain with 
the producer until the buyer exercises this option to purchase the 
cotton. This option to purchase will expire, notwithstanding any action 
or inaction by either the producer or the buyer, at the earlier of:
* * * * *
    (l) Commodities produced under a contract in which the title to the 
seed remains with the entity providing the seed to the producer, 
including contracts for the production of hybrid seed, genetically 
modified commodities, and other specialty seeds as approved in writing 
by CCC, are eligible to be pledged as collateral for a MAL and an LDP 
may be made with respect to such production if at the time of the 
request for such a loan or payment the producer has not:
* * * * *
    (n) If MALs or LDPs are made available to producers through a CMA 
under part 1425 of this chapter, the beneficial interest in the cotton 
must always have been held by the producer-member who delivered the 
cotton to the CMA or its member, except as otherwise provided in this 
section. Cotton delivered to such a CMA will not be eligible to receive 
a MAL or an LDP if the producer-member who delivered the cotton does 
not retain the right to share in the proceeds from the marketing of the 
cotton as provided in part 1425 of this chapter.

0
92. Revise the heading for Sec.  1427.6 to read as follows:


Sec.  1427.6  Disbursement of MALs.

* * * * *

0
93. Amend Sec.  1427.7 as follows:
0
a. Revise the section heading;
0
b. In paragraph (a)(1), remove the words ``filed under'' and add the 
words ``approved as specified in'' in their place, and
0
c. Add paragraphs (d) and (e).
    The revision and additions read as follows:


Sec.  1427.7  Maturity of MALs.

* * * * *
    (d) CCC will not assume a loss on MAL collateral stored in a 
warehouse for any reason.
    (e) The maturity date of any MAL may not be extended.

0
94. Amend Sec.  1427.8 as follows:
0
a. Revise the section heading;
0
b. In paragraph (a), add the word ``FSA'' before the word ``State''; 
and
0
c. Remove paragraph (e).
    The revision reads as follows:


Sec.  1427.8  Amount of MALs.

* * * * *


Sec.  1427.9  [Amended]

0
95. Amend Sec.  1427.9, in paragraph (a), by removing the words ``loan 
deficiency

[[Page 134]]

payment'' and adding the words ``LDP'' in their place and removing the 
words ``an AMS'' and adding the words ``an Agricultural Marketing 
Service (AMS)'' in their place.

0
96. Amend Sec.  1427.10 as follows:
0
a. In paragraph (a)(2), add the word ``FSA'' immediately before the 
word ``State'';
0
b. Revise paragraph (e); and
0
c. In paragraph (f), remove the word ``tocrops'' and add the words ``to 
crops'' in its place.
    The revision reads as follows:


Sec.  1427.10  Approved storage.

* * * * *
    (e) The approved storage requirements provided in this section may 
be waived by CCC if the producer requests an LDP pursuant to the LDP 
provisions in Sec.  1427.23.
* * * * *

0
97. Revise Sec.  1427.13(a), (d) introductory text, and (d)(2) to read 
as follows:


Sec.  1427.13  Fees, charges and interest.

    (a) A producer must pay a nonrefundable loan service fee to CCC at 
the time of loan disbursement or, if applicable, to a loan servicing 
agent, at a rate determined by CCC. The fee is in addition to a cotton 
clerk fee specified in paragraph (b) of this section. The fee amounts 
are available in FSA State and county offices and are shown on the note 
and security agreement. Fees will be deducted from the loan proceeds.
* * * * *
    (d) For each crop of upland cotton, the producer, as defined in the 
Cotton Research and Promotion Act (7 U.S.C. 2101), must remit to CCC an 
assessment that will be transmitted by CCC to the Cotton Board and will 
be deducted from the:
* * * * *
    (2) LDP proceeds for a crop of cotton and will be at a rate equal 
to up to one percent of the LDP amount.
* * * * *

0
98. Amend Sec.  1427.15 as follows:
0
a. Revise paragraphs (a) and (b)(1);
0
b. In paragraph (b)(2) introductory text, remove the words ``marketing 
assistance loan or loan deficiency payment'' and add the words ``MAL or 
LDP'' in their place;
0
c. Revise paragraph (c)(1) introductory text;
0
d. In paragraph (c)(1)(ii), remove the words ``marketing assistance 
loan or loan deficiency payment'' and add the words ``MAL or LDP'' in 
their place;
0
e. Revise paragraphs (c)(2), (3), and (d); and
0
f. In paragraph (e), remove the words ``marketing assistance loan or 
loan deficiency payment'' and add the words ``MAL or LDP'' in their 
place.
    The revisions read as follows:


Sec.  1427.15  Special procedure where funds are advanced.

    (a) The special procedure in this section is provided to assist 
persons or firms that, in the course of their regular business of 
handling cotton for producers, have made advances to eligible producers 
on cotton eligible to be pledged as collateral for a MAL or to receive 
an LDP. A person, firm, or financial institution that has made advances 
to eligible producers on eligible cotton may also obtain reimbursement 
for the amounts advanced under this procedure.
    (b) * * *
    (1) If such person or firm is entitled to reimbursement from the 
proceeds of the MALs or LDPs for the amounts advanced and has been 
authorized by the producer to deliver the loan or LDP documents to a 
FSA county office for disbursement of the loans or LDPs; and
* * * * *
    (c)(1) All MAL or LDP documents will be mailed, sent 
electronically, or delivered to the appropriate FSA county office and 
will show the entire proceeds of the MALs or LDPs, except for CCC loan 
service charges and research and promotion fees, for disbursement to: * 
* *
    (2) The documents will be accompanied by a Transmittal Schedule of 
Loan and LDP Documents (Transmittal) on a form prescribed by CCC, in 
original and two copies, numbered serially for each FSA county office 
by the person, firm, or financial institution that made the MAL or LDP 
advance. The Transmittal will show the amounts invested by the person, 
firm, or financial institution in the MALs or LDPs.
    (3) Upon receipt of the MAL or LDP documents and Transmittal, the 
FSA county office will stamp one copy of the Transmittal to indicate 
receipt of the documents and return this copy to the person, firm, or 
financial institution.
    (d) The person, firm, or financial institution will be deemed to 
have invested funds in the loans or LDP as of the date MAL or LDP 
documents acceptable to CCC were delivered to a FSA county office or, 
if received by mail, the date of mailing as indicated by postmark or 
the date of receipt in a FSA county office if no postmark date is 
shown. Patron postage meter date stamp will not be recognized as a 
postmark date.
* * * * *

0
99. Amend Sec.  1427.18 as follows:
0
a. Revise paragraph (a)(1) introductory text;
0
b. In paragraph (a)(1)(i), remove the words ``marketing assistance loan 
or loan deficiency payment'' and add the words ``MAL or LDP'' in their 
place;
0
c. Add paragraph (a)(1)(vii); and
0
d. Revises paragraph (b), (c), (d), (e), (g)(2), (k)(1), and (k)(2) 
introductory text.
    The revisions and addition read as follows:


Sec.  1427.18  Liability of the producer.

    (a)(1) If a producer makes any fraudulent representation in 
obtaining a MAL or LDP or in maintaining or settling a loan, or 
disposes of or moves the loan collateral without the prior written 
approval of CCC, such loan or LDP will be payable upon demand by CCC. 
The producer will be liable for: * * *
    (vii) CCC will not assume any loss pertaining to cotton stored in a 
warehouse for any reason.
* * * * *
    (b) If the amount disbursed under a MAL, or in settlement thereof, 
or LDP exceeds the amount authorized by this subpart, the producer will 
be liable for repayment of the difference, plus interest. In addition, 
the commodity pledged as collateral for the loan will not be released 
to the producer until the difference is repaid.
    (c) If the amount collected from the producer in satisfaction of 
the MAL or LDP is less than the amount required under this subpart, the 
producer will be personally liable for repayment of the amount of the 
difference plus applicable interest.
    (d) If more than one producer executes a note and security 
agreement or LDP application with CCC, each producer is jointly and 
severally liable for the violation of the terms and conditions of the 
note and security agreement or LDP application and this subpart. Each 
producer also remains liable for repayment of the entire loan or LDP 
amount until the loan is fully repaid without regard to their share in 
the cotton pledged as collateral for the loan or for which the LDP was 
made. In addition, the producer may not amend the note and security 
agreement or LDP application for the producer's claimed share in the 
cotton after execution of the note and security agreement or LDP 
application by CCC.
    (e) The producer and CCC agree that it will be difficult, if not 
impossible, to prove the amount of damages to CCC if a producer makes 
any fraudulent representation in obtaining a loan or LDP, in 
maintaining or settling a loan, or disposing of or moving the loan

[[Page 135]]

collateral without the prior written approval of CCC. Accordingly, if 
CCC determines that the producer has violated the terms or conditions 
of their requests for a loan or any applicable form required by CCC, 
liquidated damages will be assessed on the quantity involved in the 
violation. Liquidated damages assessed in accordance with this section 
will be determined by multiplying the quantity involved in the 
violation by 10 percent of the MAL rate applicable to the loan note.
* * * * *
    (g) * * *
    (2) Call the applicable MAL involved in the violation and require 
repayment of any market loan gain previously realized for the 
applicable loan, plus any interest previously waived and any storage 
paid by CCC, and for an LDP, require repayment of the LDP and charges 
plus interest from the date the LDP was made.
* * * * *
    (k)(1) Notwithstanding any other provision of this part, for ELS 
cotton stored as provided in Sec.  1427.10(f), the producer is liable 
for all costs associated with the storage of the cotton while it is 
stored outside. CCC will make no storage payment or any other payment 
with respect to ELS cotton stored as provided in Sec.  1427.10(f).
    (2) The producer of ELS cotton that is stored as provided in Sec.  
1427.10(f) must:
* * * * *

0
100. Amend Sec.  1427.19 as follows:
0
a. Revise the section heading;
0
b. In paragraph (c)(1)(ii), add the word ``FSA'' immediately before the 
word ``county'';
0
c. In paragraph (e) remove the words ``market gain'' both times they 
appear and add the words ``market loan gain'' in their place;
0
d. Revise paragraph (h)(1), remove paragraph (h)(2), and redesignate 
paragraphs (h)(3) and (4) as paragraphs (h)(2) and (3);
0
e. In newly redesignated paragraph (h)(3)(i), remove the words ``Farm 
Service Agency'' and add the word ``FSA'' in their place;
0
f. In newly redesignated paragraph (h)(3)(ii), remove the words 
``Cooperative Marketing Association'' and add the word ``CMA'' in their 
place; and
0
g. Add paragraph (l).
    The revisions and addition read as follows:


Sec.  1427.19  Repayment of MALs.

* * * * *
    (h) * * *
    (1) The warehouse storage rates for cotton crops under loan will be 
the lower of:
    (i) The tariff storage rate for the warehouse for the 2005 crop or, 
for any warehouse not in existence in 2005, a CCC-assigned average 2005 
crop tariff rate for the county or area; or
    (ii) The storage rate for 2006 crop cotton reduced by 10 percent.
* * * * *
    (l) A producer who receives a market loan gain or LDP and later is 
determined to have been ineligible must refund the market loan gain or 
LDP to CCC.

0
101. Revise Sec.  1427.20 to read as follows:


Sec.  1427.20  Handling payments of $9.99 or less and collections not 
exceeding $24.99.

    (a) Amounts of $9.99 or less will be paid to the producer only upon 
request.
    (b) Deficiencies of $24.99 or less, including interest, may be 
disregarded unless CCC demands in writing that they be paid.

0
102. Revise Sec.  1427.21(e) to read as follows:


Sec.  1427.21  Settlement.

* * * * *
    (e) If CCC sells the commodity described in paragraph (a) of this 
section in settlement of the recourse loan, the sales proceeds will be 
applied to the amount owed CCC by the producer. The producer is 
responsible for any costs incurred by CCC in completing the sale and 
CCC will deduct the amount of these costs from the sales proceeds. When 
CCC sells any cotton obtained by forfeiture under a MAL, CCC will, in 
all instances, retain all proceeds obtained from the sale of the cotton 
and will not make any payment of any amount of such proceeds to any 
party, including the producer who had satisfied their obligation under 
the loan through forfeiture of the cotton to CCC.
* * * * *


Sec.  1427.22  [Removed and Reserved]

0
103. Remove and reserve Sec.  1427.22.

0
104. Amend Sec.  1427.23 as follows:
0
a. Revise the section heading;
0
b. In paragraph (a)(2), remove the words ``a loan deficiency payment'' 
and add the words ``an LDP'' in their place;
0
c. In paragraph (a)(3) introductory text, remove the words ``Service 
Center'' and add the words ``county office'' in their place;
0
d. In paragraphs (a)(3)(i) and (ii), remove the words ``a loan 
deficiency payment'' and add the words ``an LDP'' in their place; and
0
e. Revise paragraphs (b), (c), (d), and (e) introductory text.
    The revisions read as follows:


Sec.  1427.23  Cotton LDPs.

* * * * *
    (b) The LDP applicable to a crop of cotton will be computed by 
multiplying the applicable LDP rate, as determined under paragraph (c) 
of this section, by the quantity of the crop the producer is eligible 
to pledge as collateral for a loan, excluding any quantity for which 
the producer obtains a MAL.
    (c) The LDP rate for a crop of upland cotton will be the amount by 
which the loan rate determined for a bale of such crop exceeds the 
adjusted world price, as determined by CCC under Sec.  1427.25, in 
effect on the day the request is received by the FSA county office, 
loan servicing agent, or cotton commercial bank. In no case will the 
LDP rate for a bale exceed the value of the bale had it been pledged as 
collateral for a MAL.
    (d) The total amount of any LDPs that a person may receive is 
subject to AGI and payment limitation requirements specified in part 
1400 of this chapter.
    (e) If the producer enters into an agreement with CCC on or before 
the date of ginning a quantity of eligible upland cotton, and the 
producer has the beneficial interest in such quantity as specified 
under Sec.  1427.5(c) on the date the cotton was ginned, and the 
producer meets all the other requirements in paragraph (a) of this 
section on or before the final date to apply for an LDP under Sec.  
1427.5, the LDP rate applicable to such cotton will be:
* * * * *


Sec.  1427.25  [Amended]

0
105. Amend Sec.  1427.25 as follows:
0
a. In paragraph (b), remove the words ``the 2008 through 2012 crops of 
upland cotton and to the 2007 crop to the extent provided in Sec.  
1427.1'' and add the words ``crops of upland cotton'' in their place; 
and
0
b. In paragraph (d), remove the words ``continuing through the last 
Thursday of March 2014 (March 27, 2014)''.

Subpart C--Economic Adjustment Assistance to Users of Upland Cotton

0
106. Revise Sec.  1427.100 to read as follows:


Sec.  1427.100  Applicability.

    (a) These regulations specify the terms and conditions under which 
CCC will make payments to eligible domestic users who have entered into 
an Upland Cotton Domestic User Agreement with CCC to participate in the 
upland cotton domestic user program.
    (b) CCC will specify the forms to be used in administering the 
Economic

[[Page 136]]

Adjustment Assistance to Users of Upland Cotton program.


Sec.  1427.101  [Amended]

0
107. Amend Sec.  1427.101, in paragraph (a) introductory text, by 
removing the words ``on or after August 1, 2008''.


Sec.  1427.104  [Removed and Reserved].

0
108. Remove and reserve Sec.  1427.104.
0
109. Amend Sec.  1427.105 as follows:
0
a. Redesignate paragraphs (a) through (d) as paragraphs (b) through (e) 
and add new paragraph (a);
0
b. In newly designated paragraph (b) introductory text, remove the 
words ``as specified in Sec.  1427.104'' and add the words ``of 3 cents 
per pound'' in their place; and
0
c. Revise newly redesignated paragraph (e).
    The addition and revision read as follows:


Sec.  1427.105  Payment.

    (a) The payment rate for purposes of calculating payments as 
specified in this subpart is 3 cents per pound.
* * * * *
    (e) All payments received by the eligible domestic user of upland 
cotton must be used for purposes specified in 7 U.S.C. 9037(c)(3), 
which include but are not limited to, acquisition, construction, 
installation, modernization, development, conversion, or expansion of 
land, plant, buildings, equipment, facilities, or machinery. Such 
capital expenditures must be directly attributable and certified as 
such by the user for the purpose of manufacturing upland cotton into 
eligible cotton products in the United States.

Subpart D--Recourse Seed Cotton Loans

0
110. Revise Sec.  1427.160(a) and (c) to read as follows:


Sec.  1427.160  Applicability.

    (a) This subpart is applicable to crops of upland and extra long 
staple seed cotton. This subpart specifies the terms and conditions 
under which recourse seed cotton loans will be made available by CCC. 
Such loans will be available through March 31 of the year following the 
calendar year in which such crop is normally harvested. CCC may change 
the loan availability period to conform to State or locally imposed 
quarantines. Additional terms and conditions are in the note and 
security agreement that must be executed by a producer in order to 
receive such loans.
* * * * *
    (c) A producer must, unless otherwise authorized by CCC, request 
the loan at the FSA county office that, under part 718 of this title, 
is responsible for administering programs for the farm on which the 
cotton was produced. All note and security agreements and related 
documents necessary for the administration of the recourse seed cotton 
loan program will be prescribed by CCC and will be available at FSA 
State and county offices.
* * * * *

0
111. Revise Sec.  1427.161(a) to read as follows:


Sec.  1427.161  Administration.

    (a) The Recourse Seed Cotton Loan Program that is applicable to a 
crop of cotton will be administered under the general supervision of 
the Executive Vice President, CCC, or a designee and will be carried 
out in the field by FSA State and county committees.
* * * * *

0
112. Revise Sec.  1427.163 to read as follows:


Sec.  1427.163  Disbursement of loans.

    (a) A producer or the producer's agent must request a loan at the 
FSA county office for the county that, under part 718 of this title, is 
responsible for administering programs for the farm on which the cotton 
was produced and which will assist the producer in completing the loan 
documents, except that CMAs designated by producers to obtain loans on 
their behalf may, unless otherwise authorized by CCC, obtain loans 
through a central FSA county office designated by the State committee.
    (b) Disbursement of each loan will be made by the FSA county office 
of the county that is responsible for administering programs for the 
farm on which the cotton was produced, except that CMAs designated by 
producers to obtain loans in their behalf may, unless otherwise 
authorized by CCC, obtain disbursement of loans at a central FSA county 
office designated by the State committee. Service charges will be 
deducted from the loan proceeds.
    (1) The producer or the producer's agent must not present the loan 
documents for disbursement unless the cotton is in existence and in 
good condition.
    (2) If the cotton is not in existence and in good condition at the 
time of disbursement, the producer or the agent must immediately return 
the check issued in payment of the loan or, if the check has been 
negotiated, the total amount disbursed under the loan, and charges plus 
interest must be refunded promptly.

0
113. Revise Sec.  1427.165(b) to read as follows:


Sec.  1427.165  Eligible seed cotton.

* * * * *
    (b) The quality of cotton that may be pledged as collateral for a 
loan is the estimated quality of lint cotton in each lot of seed cotton 
as determined by the FSA county office, except that if a control sample 
of the lot of cotton is classed by an AMS Cotton Classing Office or 
other entity approved by CCC, the quality for the lot is the quality 
shown on the applicable documentation issued for the control sample.
* * * * *

0
114. Revise Sec.  1427.169(a) to read as follows:


Sec.  1427.169  Fees, charges, and interest.

    (a) A producer must pay a non-refundable loan service fee at a rate 
determined by CCC.
* * * * *

0
115. Revise Sec.  1427.170(a) to read as follows:


Sec.  1427.170  Quantity for loan.

    (a) The quantity of lint cotton in each lot of seed cotton tendered 
for loan will be determined by the FSA county office by multiplying the 
weight or estimated weight of seed cotton by the lint turnout factor 
determined under paragraph (b) of this section.
* * * * *

0
116. Revise Sec.  1427.171 to read as follows:


Sec.  1427.171  Approved storage.

    Approved storage consists of storage located on or off the 
producer's farm (excluding public warehouses) that is determined by a 
county committee representative to afford adequate protection against 
loss or damage and is located within a reasonable distance, as 
determined by CCC, from an approved gin. If the cotton is not stored on 
the producer's farm, the producer must furnish satisfactory evidence 
that the producer has the authority to store the cotton on such 
property and that the owner of the property has no lien for such 
storage against the cotton. The producer must provide satisfactory 
evidence that the producer and any person having an interest in the 
cotton including CCC, have the right to enter the premises to inspect 
and examine the cotton and permit a reasonable time to such persons to 
remove the cotton from the premises.

0
117. Amend Sec.  1427.172 as follows:
0
a. Revise paragraphs (b)(1) introductory text and (b)(4) introductory 
text;

[[Page 137]]

0
b. In paragraph (b)(4)(i), add the word ``FSA'' immediately before the 
word ``county'';
0
c. Revise paragraphs (b)(5), (c), and (d); and
0
d. Add paragraph (e).
    The revisions and addition read as follows:


Sec.  1427.172  Settlement.

* * * * *
    (b)(1) A producer or the producer's agent must not remove from 
storage any cotton that is pledged as collateral for a loan until prior 
written approval has been received from CCC for removal of the cotton. 
If a producer or the producer's agent obtains CCC approval, they may 
remove the cotton from storage, sell the seed cotton, have it ginned, 
and sell the resulting lint cotton and cottonseed. The ginner must 
inform the FSA county office in writing immediately after the seed 
cotton removed from storage has been ginned and furnish the county 
office the loan number, producer's name, and applicable gin bale 
numbers. If the seed cotton is removed from storage, the loan principal 
plus interest and charges must be paid not later than the earlier of:
* * * * *
    (4) A CMA must repay the seed cotton loan principal, interest, and 
charges before pledging the cotton for a nonrecourse loan or before an 
LDP can be approved under subpart A of this part, on the lint cotton. 
If a CMA, which is authorized by producers to obtain loans in their 
behalf, removes seed cotton from storage before obtaining approval to 
move the cotton, the removal will constitute conversion of the cotton 
unless the CMA:
* * * * *
    (5) Any removal from storage will not be deemed to constitute a 
release of CCC's security interest in the seed cotton or to release the 
producer or CMA from liability for the loan principal, interest, and 
charges if full payment of such amount is not received by the FSA 
county office.
    (c) If, either before or after maturity, the producer discovers 
that the cotton is going out of condition or is in danger of going out 
of condition, the producer must immediately notify the FSA county 
office and confirm such notice in writing. If the county committee 
determines that the cotton is going out of condition or is in danger of 
going out of condition, the county committee will accelerate the 
maturity date and request repayment of the loan principal, plus 
interest and charges on or before a specified date. If the producer 
does not repay the loan or have the cotton ginned and obtain a 
nonrecourse loan under subpart A of this part on the resulting lint 
cotton within the period specified by the county committee, the cotton 
will be considered abandoned.
    (d) If the producer has control of the storage site and if the 
producer subsequently loses control of the storage site or there is 
danger of flood or damage to the seed cotton or storage structure 
making continued storage of the cotton unsafe, the producer must 
immediately either repay the loan or move the seed cotton to the 
nearest approved gin for ginning and must, at the same time, inform the 
FSA county office. If the producer does not do so, the seed cotton will 
be considered abandoned.
    (e) CCC will not assume any loss in quantity or quality of the loan 
collateral for recourse seed cotton loans.

0
118. Revise Sec.  1427.173 to read as follows:


Sec.  1427.173  Foreclosure.

    Any seed cotton pledged as collateral for a loan that is abandoned 
or has not been ginned and pledged as collateral for a nonrecourse loan 
under subpart A of this part by the seed cotton loan maturity date may 
be removed from storage by CCC and ginned and the resulting lint cotton 
warehoused for the account of CCC. The lint cotton and cottonseed may 
be sold at such time, in such manner and upon such terms as CCC may 
determine, at public or private sale. CCC may become the purchaser of 
the whole or any part of such cotton and cottonseed. If the proceeds 
received from the sales of the cotton are less than the amount due on 
the loan (including principal, interest, ginning charges, and any other 
charges incurred by CCC), the producer is liable for such difference. 
If the proceeds received from sale of the cotton are greater than the 
sum of the amount due plus any cost incurred by CCC in conducting the 
sale of the cotton, the amount of such excess will be paid to the 
producer or, if applicable, to any secured creditor of the producer.

0
119. Amend Sec.  1427.175 as follows:
0
a. Revise paragraphs (a)(1) introductory text and (b);
0
b. In paragraph (c), remove the words ``shall be'' and add the word 
``is'' in their place; and
0
c. Revise paragraphs (d) and (e).
    The revision reads as follows:


Sec.  1427.175  Liability of the producer.

    (a)(1) If a producer makes any fraudulent representation in 
obtaining a loan, maintaining a loan, or settling a loan or if the 
producer disposes of or moves the loan collateral without the prior 
approval of CCC, such loan amount must be refunded upon demand by CCC. 
The producer will be liable for:
* * * * *
    (b) If the amount disbursed under a loan, or in settlement thereof, 
exceeds the amount authorized by this subpart, the producer is liable 
for repayment of such excess, plus interest. In addition, seed cotton 
pledged as collateral for such loan will not be released to the 
producer until such excess is repaid.
* * * * *
    (d) If more than one producer executes a note and security 
agreement with CCC, each such producer is jointly and severally liable 
for the violation of the terms and conditions of the note and security 
agreement and the regulations in this subpart. Each such producer also 
remains liable for repayment of the entire loan amount until the loan 
is fully repaid without regard to such producer's claimed share in the 
seed cotton pledged as collateral for the loan. In addition, such 
producer may not amend the note and security agreement for the 
producer's claimed share in such seed cotton, after execution of the 
note and security agreement by CCC.
    (e) If a producer makes any fraudulent representation in obtaining 
a loan, in maintaining or settling a loan, or disposing of or moving 
the collateral without the prior approval of CCC, that is a violation 
of the terms or conditions of the note and security agreement. If CCC 
or the county committee determines that the producer has violated the 
terms or conditions of the note and security agreement, liquidated 
damages will be assessed on the quantity of the seed cotton that is 
involved in the violation by multiplying the quantity involved in the 
violation by 10 percent of the loan rate applicable to the loan note. 
This amount will apply for both good faith and not good faith 
determinations.
* * * * *

Subpart E--Standards for Approval of Warehouse for Cotton and 
Cotton Linters

0
120. Amend Sec.  1427.1081 as follows:
0
a. In paragraph (b), remove the number ``205'' and add in its place the 
number ``419205'';
0
b. In paragraph (d) introductory text, remove the word ``shall'' and 
add the word ``must'' in its place;
0
c. In paragraph (d)(1), remove the words ``Form CCC-49,''; and
0
d. Revise paragraph (d)(2).
    The revision reads as follows:


Sec.  1427.1081  General statement and administration.

* * * * *

[[Page 138]]

    (d) * * *
    (2) A current financial statement on a ``Financial Statement'' 
form, supported by such supplemental schedules as CCC may request. 
Financial statements may be submitted on forms other than a ``Financial 
Statement'' form with approval of the Director, KCCO, or the Director's 
designee. Financial statements must show the financial condition of the 
warehouseman as of a date no earlier than 90 days prior to the date of 
the warehouseman's application, or such other date as CCC may 
prescribe. Additional financial statements must be furnished annually 
and at such other times as CCC may require. CCC also may require that 
financial statements prepared by the warehouseman or by a public 
accountant be examined by an independent certified public accountant in 
accordance with generally accepted auditing standards. Only one 
financial statement is required for a chain of warehouses owned or 
operated by a single business entity. If approved by the Director, 
KCCO, or the Director's designee, the financial statement of a parent 
company, which includes the financial position of a wholly-owned 
subsidiary, may be used to meet the CCC standards for approval for the 
wholly-owned subsidiary.
* * * * *


Sec.  1427.1082  [Amended]

0
121. Amend Sec.  1427.1082 as follows:
0
a. Redesignate paragraphs (a) introductory text through (d)(3) as 
follows:

------------------------------------------------------------------------
               Old paragraph                        New paragraph
------------------------------------------------------------------------
(a) introductory text.....................  (a)(1) introductory text.
(a)(1)....................................  (a)(1)(i).
(a)(2)....................................  (a)(1)(ii).
(a)(3)....................................  (a)(1)(iii).
(a)(4)....................................  (a)(1)(iv).
(a)(5)....................................  (a)(1)(v).
(a)(6)....................................  (a)(1)(vi).
(a)(7)....................................  (a)(1)(vii).
(a)(8)....................................  (a)(1)(viii).
(a)(9)....................................  (a)(1)(ix).
(b).......................................  (a)(2).
(c) introductory text.....................  (a)(3) introductory text.
(c)(1)....................................  (a)(3)(i).
(c)(2)....................................  (a)(3)(ii).
(d) introductory text.....................  (a)(4) introductory text.
(d)(1)....................................  (a)(4)(i).
(d)(2)....................................  (a)(4)(ii).
(d)(3)....................................  (a)(4)(iii).
------------------------------------------------------------------------

0
b. Redesignate the introductory text as paragraph (a) introductory 
text;
0
c. In newly designated paragraphs (a) introductory text, (a)(1) 
introductory text, (a)(1)(i), (a)(2), (a)(3) introductory text, and 
(a)(4), remove the word ``shall'' and add the word ``must'' in its 
place; and
0
d. Add and reserve paragraph (b).


Sec.  1427.1083  [Amended]

0
122. Amend Sec.  1427.1083 as follows:
0
a. Redesignate paragraphs (a) introductory text through (e) as follows:

------------------------------------------------------------------------
               Old paragraph                        New paragraph
------------------------------------------------------------------------
(a) introductory text.....................  (a)(1) introductory text.
(a)(1)....................................  (a)(1)(i).
(a)(2)....................................  (a)(1)(ii).
(b) introductory text.....................  (a)(2) introductory text.
(b)(1)....................................  (a)(2)(i).
(b)(2)....................................  (a)(2)(ii).
(b)(3)....................................  (a)(2)(iii).
(c).......................................  (a)(3).
(d).......................................  (a)(4).
(e).......................................  (a)(5).
------------------------------------------------------------------------

0
b. Redesignate the introductory text as paragraph (a) introductory 
text;
0
c. In newly designated paragraph (a)(1) introductory text, remove the 
word ``shall'' and add the word ``must'' in its place;
0
d. Revise newly designated paragraphs (a)(2) introductory text and 
(a)(5); and
0
e. Add and reserve paragraph (b).
    The revisions read as follows:


Sec.  1427.1083  Bonding requirements for net worth.

    (a) * * *
    (2) Such bond must be on the Warehouseman's Bond form, except that 
a bond furnished under State law (statutory bond) or under operational 
rules of nongovernmental supervisory agencies may be accepted in an 
equivalent amount as a substitute for a bond running directly to CCC 
if:
* * * * *
    (5) An irrevocable letter of credit may be accepted by CCC in lieu 
of the required amount of bond coverage provided that the issuing bank 
is a commercial bank insured by the Federal Deposit Insurance 
Corporation. Such standby letter of credit must be on the Irrevocable 
Letter of Credit form, or on such other form as may be specifically 
approved by the Director, KCCO, or the Director's designee.
* * * * *

0
123. Revise Sec.  1427.1086(c)(1) to read as follows:


Sec.  1427.1086  Approval of warehouse, requests for reconsideration.

* * * * *
    (c) * * *
    (1) In Sec.  1427.1082, other than the standard specified in Sec.  
1427.1082(c)(2), the warehouseman may, at any time after receiving 
notice of such action, request reconsideration of the action and 
present to the Director, KCCO, in writing, information in support of 
such request. The Director will consider such information in making a 
determination and notify the warehouseman in writing of such 
determination. The warehouseman may, if dissatisfied with the 
Director's determination, obtain a review of the determination and an 
informal hearing by filing an appeal with the Deputy Administrator, 
Commodity Operations, Farm Service Agency (FSA). The time of filing 
appeals, forms for requesting an appeal, nature of the informal 
hearing, determination and reopening of the hearing will be as 
prescribed in the FSA regulations governing appeals, 7 CFR part 780. 
When appealing under such regulations, the warehouseman will be 
considered as a ``participant''; and
* * * * *

0
124. Revise Sec.  1427.1088(b) to read as follows:


Sec.  1427.1088  Contract fees.

* * * * *
    (b) The amount of the contract fee will be determined and announced 
annually.


Sec.  1427.1089  [Removed and Reserved]

0
125. Remove and reserve Sec.  1427.1089.

Subpart G--Extra Long Staple (ELS) Cotton Competitiveness Payment 
Program

0
126. Revise Sec.  1427.1200(a) and (c) to read as follows:


Sec.  1427.1200  Applicability.

    (a) This subpart specifies the terms and conditions under which CCC 
will make payments to eligible domestic users and exporters of extra 
long staple cotton who have entered into an ELS Cotton Domestic User/
Exporter Agreement with CCC.
* * * * *
    (c) CCC will prescribe the forms and information collections 
necessary in administering the ELS cotton competitiveness payment 
program. Additional terms and conditions for the program are specified 
in the ELS Cotton Domestic User/Exporter Agreement.


Sec.  1427.1203  [Amended]

0
127. Amend Sec.  1427.1203(a)(1) and (2), by removing the date ``June 
18, 2008'' both times it appears and adding the date ``February 7, 
2014'' in its place.


Sec.  1427.1204  [Amended]

0
128. Amend Sec.  1427.1204, in paragraph (a)(2), by removing the words 
``a

[[Page 139]]

cooperative marketing association'' and adding the word ``CMA'' in 
their place.


Sec.  1427.1206  [Removed and Reserved]

0
129. Remove and reserve Sec.  1427.1206.


Sec. Sec.  1427.5, 1427.7, 1427.16, 1427.18, 1427.19, 
1427.23  [Amended]

0
130. In addition to the amendments set forth above, in 7 CFR part 1427, 
remove the words ``marketing assistance loan'' and add, in their place, 
the word ``MAL'' in the following places:
0
a. In Sec.  1427.5(f);
0
b. In Sec.  1427.7(c) introductory text;
0
c. In Sec.  1427.16(b)(4);
0
d. In Sec.  1427.18(f);
0
e. In Sec.  1427.19(c) introductory text; and
0
f. In Sec.  1427.23(a)(1).


Sec. Sec.  1427.3, 1427.4, 1427.5, 1427.13, 1427.15, 1427.18, 
1427.172  [Amended]

0
131. In addition to the amendments set forth above, in 7 CFR part 1427, 
remove the words ``loan deficiency payment'' and add, in their place, 
the word ``LDP'' in the following places:
0
a. In Sec.  1427.3 in the introductory text and in the definition of 
``Loan servicing agent'' each time it appears,
0
b. In Sec.  1427.4(c)(2) and (3);
0
c. In Sec.  1427.5(g)(2);
0
d. In Sec.  1427.13(b);
0
e. In Sec.  1427.15(c)(1)(i);
0
f. In Sec.  1427. 18(a)(1)(ii); and
0
g. In Sec.  1427.172(b)(3) introductory text and (b)(3)(i).


Sec. Sec.  1427.5, 1427.23  [Amended]

0
132. In addition to the amendments set forth above, in 7 CFR part 1427, 
remove the words ``loan deficiency payments'' and add, in their place, 
the word ``LDPs'' in the following places:
0
a. In Sec.  1427.5(a)(2); and
0
b. In Sec.  1427.23(a) introductory text and (a)(5).


Sec. Sec.  1427.2, 1427.5, 1427.6, 1427.7, 1427.8, 1427.9, 1427.10, 
1427.13, 1427.13, 1427.15, 1427.18, 1427.19, 1427.21, 1427.160, 
1427.161, 1427.169, 1427.170, 1427.175, 1427.1085, 1427.1086, 
1427.1207, 1427.1208  [Amended]

0
133. In addition to the amendments set forth above, in 7 CFR part 1427, 
remove the word ``shall'' each time it appears and add, in its place, 
the word ``will'' in the following places:
0
a. In Sec.  1427.2(c);
0
b. In Sec.  1427.5(m);
0
c. In Sec.  1427.6(c);
0
d. In Sec.  1427.7(b);
0
e. In Sec.  1427.8(b);
0
f. In Sec.  1427.9(d);
0
g. In Sec.  1427.10(b);
0
h. In Sec.  1427.13(c);
0
i. In Sec.  1427.13(d)(1);
0
j. In Sec.  1427.15(b) introductory text;
0
k. In Sec.  1427.18(g) introductory text, (h) introductory text, and 
(k)(2)(iv);
0
l. In Sec.  1427.19(b) and (d);
0
m. In Sec.  1427.21(c) and (d);
0
n. In Sec.  1427.160(d);
0
o. In Sec.  1427.161(c) introductory text, (d), and (f);
0
p. In Sec.  1427.169(b);
0
q. In Sec.  1427.170(b) and (c) introductory text;
0
r. In Sec.  1427.175 (a)(2), (f) introductory text, and (g) 
introductory text;
0
s. In Sec.  1427.1085(a);
0
t. In Sec.  1427.1086(c)(1);
0
u. In Sec.  1427.1207(a) introductory text, (a)(1) and (2), (b), 
(c)(2), and (d); and
0
v. In Sec.  1427.1208(a) introductory text, (b) introductory text, and 
(d).

PART 1434--NONRECOURSE MARKETING ASSISTANCE LOANS AND LOAN 
DEFICIENCY PAYMENTS FOR HONEY

0
134. Revise the authority citation for part 1434 to read as follows:

    Authority:  7 U.S.C. 7231-7237, 7931-7936, and 9031-40; and 15 
U.S.C. 714b and c.

0
135. Revise the heading for part 1434 to read as shown above.
0
136. Revise Sec.  1434.1(a) to read as follows:


Sec.  1434.1  Applicability.

    (a) This part specifies the terms and conditions of Commodity 
Credit Corporation (CCC) nonrecourse marketing assistance loan (MAL) 
and loan deficiency payment (LDP) Programs for honey. MAL gains and 
LDPs for honey are limited by the payment limitation and adjusted gross 
income provisions specified in part 1400 of this chapter.
* * * * *

0
137. Amend Sec.  1434.2(a) to read as follows:


Sec.  1434.2  Administration.

    (a) The regulations of this part will be administered under the 
general supervision of the Executive Vice President, CCC, and are 
carried out in the field by Farm Service Agency (FSA) State and county 
committees.
* * * * *

0
138. Amend Sec.  1434.3 as follows:
0
a. Revise the introductory text;
0
b. Add, in alphabetical order, definitions for ``Calling a loan'' and 
``Loan deficiency payment''; and
0
c. Revise the definition for ``Ineligible honey''.
    The revisions and addition read as follows:


Sec.  1434.3  Definitions.

    The definitions in this section are applicable for all purposes of 
program administration. The terms defined in part 718 of this title are 
also applicable except where those definitions are inconsistent with 
the definitions in this section or for purpose of program instruments 
created under this part.
* * * * *
    Calling a loan is accelerating or moving forward the maturity date 
of an outstanding MAL. A MAL can be called when the terms and 
conditions of the MAL note and security agreement are violated, a 
producer incorrectly certifies a loan quantity or makes any fraudulent 
representation with respect to obtaining a loan, removing or disposing 
of a farm-stored commodity pledged as collateral for a loan without 
authorization, to protect CCC's interest, or in emergency situations.
* * * * *
    Ineligible honey is honey not eligible for a MAL under this part 
for which ineligibility will include, but is not limited to, honey from 
ineligible floral sources regardless of whether the honey meets other 
eligibility requirements.
* * * * *
    Loan deficiency payment (LDP) means a payment made in lieu of a MAL 
when the CCC-determined value, which is based on the current local 
price in a county, is below the applicable county loan rate. The 
payment is the difference between the two rates times the eligible 
quantity.
* * * * *


Sec.  1434.4  [Amended]

0
139. Amend Sec.  1434.4 as follows:
0
a. In paragraph (a) introductory text, by removing the words ``loan 
deficiency payments'' and adding the word ``LDP'' in their place; and
0
b. In paragraph (f) introductory text, by removing the words ``shall 
be'' and adding the word ``is'' in their place.


Sec.  1434.6  [Amended]

0
140. Amend Sec.  1434.6 as follows:
0
a. In paragraph (a), remove the words ``marketing assistance loans'' 
and add the word ``MALs'' in their place; and
0
b. In paragraphs (b) introductory text and (c), remove the words 
``shall not be'' and add the words ``is not'' in their place.


Sec.  1434.7  [Amended]

0
141. Amend Sec.  1434.7(b) by removing the word ``shall'' and adding 
the word ``must'' in its place.


Sec.  1434.8  [Amended]

0
142. Amend Sec.  1434.8(b) introductory text by removing the words 
``shall not be'' and adding the words ``is not'' in their place.

[[Page 140]]


0
143. Revise Sec.  1434.9 to read as follows:


Sec.  1434.9  Determination of quantity.

    The amount of a marketing assistance loan or loan deficiency 
payment will be based on 100 percent of the net weight in pounds of 
such quantity that is eligible to be pledged as security for the MAL or 
LDP and is certified by the producer and verified by the county office 
representative in the manner prescribed by CCC. Estimates of the 
quantity of honey will be made on the basis of 12 pounds for each 
gallon of the rated capacity of the container.

0
144. Amend Sec.  1434.10 as follows:
0
a. Revise paragraphs (a), (c), and (e); and
0
b. In paragraph (f), remove the word ``shall'' and add the word 
``must'' in its place.
    The revisions read as follows:


Sec.  1434.10  Application, availability, disbursements, and maturity.

    (a) A producer must, unless otherwise authorized by CCC, request 
MALs and LDPs at the appropriate FSA county office responsible for 
administering the program as provided under part 718 of this title. To 
receive MALs and LDPs for honey, a producer must execute a note and 
security agreement or LDP application on or before March 31 of the year 
following the year in which the honey was extracted.
* * * * *
    (c) MALs will be made on the honey as declared and certified by the 
producer in the manner specified by CCC at the time the honey is 
pledged as collateral for a MAL. The producer is also required to 
declare and certify the class of honey (table or non-table) and floral 
source of the honey in the manner specified by CCC when the honey is 
pledged as collateral for a MAL.
* * * * *
    (e) MALs mature on demand, but not later than the last day of the 
ninth calendar month following the month in which the note and security 
agreement was approved.
    (1) When the maturity date falls on a non-workday for county 
offices, CCC will extend the final date to the next workday. Before the 
date specified in paragraph (a) of this section, a producer may re-
offer as MAL collateral any eligible honey that has been offered 
previously for a MAL if the previous MAL has been repaid at principal 
plus interest only.
    (2) The maturity date of any MAL may not be extended.
* * * * *

0
145. Revise Sec.  1434.11(a) to read as follows:


Sec.  1434.11  Fees and interest.

    (a) A producer must pay a nonrefundable MAL service fee. The MAL 
service fee will be the smaller of one-half of 1 percent (.005) times 
the gross MAL amount or $45 per MAL plus $3 for each storage structure 
over one.
* * * * *

0
146. Revise Sec.  1434.13 to read as follows:


Sec.  1434.13  Transfer of producer's interest prohibited.

    Absent written approval from CCC, the producer may not transfer 
either the remaining interest in, or right to redeem, the honey pledged 
as collateral for a MAL on honey nor may anyone acquire such interest 
or right. Subject to the provisions of Sec.  1434.17, a producer who 
wishes to liquidate all or part of a MAL by contracting for the sale of 
the honey must obtain written approval from the county office on a form 
prescribed by CCC to remove a specified quantity of the honey from 
storage. Any such approval will be subject to the terms and conditions 
in the applicable form, copies of which may be obtained by producers at 
the FSA county office.

0
147. Amend Sec.  1434.15 as follows:
0
a. Revise paragraphs (a) introductory text, (a)(1) introductory text, 
and (2);
0
b. In paragraphs (b)(1) and (2), remove the words ``shall include'' and 
add the word ``includes'' in their place;
0
c. In paragraphs (i)(1)(ii), (2), (j), (k), and (l), remove the words 
``shall be'' and add the word ``is'' in their place; and
0
d. Revise paragraph (m).
    The revisions read as follows:


Sec.  1434.15  Personal liability.

    (a) As part of the application for an individual or joint MAL or 
LDP, each producer agrees that:
    (1) By signing the MAL note and security agreement, the producer 
must:
* * * * *
    (2) That violation of the terms and conditions of this part and the 
MAL note and security agreement will cause harm or damage to CCC in 
that funds may be disbursed to the producer for a MAL quantity that is 
not actually in existence or for a quantity for which the producer is 
not eligible.
* * * * *
    (m) In the case of joint MALs, the personal liability for the 
amounts specified in this section are joint and several on the part of 
each producer signing the MAL note. Further, each producer who is a 
party to a joint MAL will be jointly and severally liable for any 
violation of the terms and conditions of the note and security 
agreement, and the regulations in this part. Each such producer also 
remains liable for repayment of the entire MAL amount until the MAL is 
fully repaid without regard to such producer's claimed share in the 
honey, or MAL proceeds, after execution of the note and security 
agreement by CCC.
* * * * *


Sec.  1434.16  [Amended]

0
148. Amend Sec.  1434.16 as follows:
0
a. Revise the section heading;
0
b. In paragraph (a)(1), remove the word ``shall'' and add the word 
``may'' in its place; and
0
c. Revise paragraphs (a)(3) and (c).
    The revisions read as follows:


Sec.  1434.16  Release of the honey pledged as collateral for a MAL.

    (a) * * *
    (3) When the proceeds of a sale of honey are needed to repay all or 
part of a farm stored MAL, the producer must request and obtain prior 
written approval of the county office on a form prescribed by CCC in 
order to remove a specified quantity of the honey from storage. Any 
such approval will be subject to the terms and conditions in the 
applicable form, copies of which may be obtained by producers at the 
county office. Any such approval will not constitute a release of CCC's 
security interest in the commodity or release the producer from 
liability for any amounts due and owing to CCC with respect to any MAL 
indebtedness if full payment of such amounts is not received by the 
county office.
* * * * *
    (c) After satisfaction of a MAL, CCC will release CCC's security 
interest in the honey at the producer's request. The producer is 
responsible for payment of any fee for such release if such fee can be 
determined.


Sec.  1434.18  [Amended]

0
149. Amend Sec.  1434.18 as follows:
0
a. In paragraph (a) introductory text, remove the words ``marketing 
assistance loan'' and add the word ``MAL'' in their place; and
0
b. In paragraph (a)(3), remove the words ``marketing assistance loans'' 
both times they appear and add the word ``MALs'' in their place.
0
150. Amend Sec.  1434.19 as follows:
0
a. Redesignate paragraphs (a) and (b) as follows:

------------------------------------------------------------------------
               Old paragraph                        New paragraph
------------------------------------------------------------------------
(a) introductory text.....................  (a)(1) introductory text.
(a)(1)....................................  (a)(1)(i).
(a)(2)....................................  (a)(1)(ii).

[[Page 141]]

 
(b).......................................  (a)(2).
------------------------------------------------------------------------

0
b. Redesignate the introductory text as paragraph (a) introductory 
text;
0
c. In newly redesignated paragraph (a)(1)(i), remove the word ``shall'' 
and add the word ``must'' in its place;
0
d. Revise newly redesignated paragraph (a)(1)(ii); and
0
e. Add paragraph (b).
    The revision and addition read as follows:


Sec.  1434.19  Settlement.

    (a) * * *
    (1) * * *
    (ii) If the value of the collateral at settlement is greater than 
the amount due, the excess will be paid to the producer or, if 
applicable, to the producer and any secured creditor of the producer.
* * * * *
    (b) CCC will not assume any loss in quantity or quality of the loan 
collateral for honey MALs.


Sec.  1434.20  [Amended]

0
151. Amend Sec.  1434.20(b)(1), by removing the word ``shall'' and 
adding the word ``must'' in its place.

0
152. Amend Sec.  1434.21 as follows:
0
a. Revise paragraph (a) introductory text;
0
b. In paragraph (a)(3) remove the words ``Loan deficiency payment'' and 
add the word ``LDP'' in their place;
0
c. Revise paragraphs (c), (d), and (e); and
0
d. In addition to the amendments set forth above, in paragraphs (b), 
(f) introductory text, and (f)(1), remove the words ``loan deficiency 
payment'' each time they appear and add the word ``LDP'' in their 
place.
    The revisions read as follows:


Sec.  1434.21  Loan deficiency payments.

    (a) LDPs will be available for honey.
* * * * *
    (c) The LDP rate for a crop will be the amount by which the MAL 
rate exceeds the rate at which CCC has announced that producers may 
repay their MAL as specified in Sec.  1434.18.
    (d) The LDP applicable to a crop of honey will be computed by 
multiplying the LDP rate, as determined as specified in paragraph (c) 
of this section, by the quantity of honey the producer is eligible to 
pledge as collateral for a price support MAL for which an LDP is 
requested.
    (e) Notwithstanding any provisions in this section, LDPs may be 
based on 100 percent of the net quantity specified on acceptable 
evidence of disposition of the honey certified as eligible for an LDP 
if CCC determines that such quantity represented the quantity for the 
number of containers of honey initially certified for the LDP when the 
payment was made.
* * * * *


Sec. Sec.  1434.2, 1434.4, 1434.5, 1434.6, 1434.7, 1434.10, 1434.11, 
1434.12, 1434.14, 1434.15, 1434.16, 1434.17, 1434.18, 1434.19, 1434.20, 
1434.22  [Amended]

0
153. In addition to the amendments set forth above, in 7 CFR part 1434, 
remove the word ``shall'' each time it appears and add, in its place, 
the word ``will'' in the following places:
0
a. In Sec.  1434.2(c), (d), and (f);
0
b. In Sec.  1434.4(e) and (g)(2);
0
c. In Sec.  1434.5(c)(3);
0
d. In Sec.  1434.6(d);
0
e. In Sec.  1434.7(a);
0
f. In Sec.  1434.10(d);
0
g. In Sec.  1434.11(b);
0
h. In Sec.  1434.12(b) and (c);
0
i. In Sec.  1434.14;
0
j. In Sec.  1434.15(c) introductory text, (d) introductory text, (e), 
(f)(2) introductory text, (h) introductory text, and (i)(2);
0
k. In Sec.  1434.16(b);
0
l. In Sec.  1434.17(b);
0
m. In Sec.  1434.18(b);
0
n. In Sec.  1434.19 newly redesignated paragraphs (a) introductory text 
and (a)(2);
0
o. In Sec.  1434.20(a) and (b)(2); and
0
p. In Sec.  1434.22 (a) and (b).

PART 1435--SUGAR PROGRAM

0
154. The authority citation for part 1435 continues to read as follows:

    Authority:  7 U.S.C. 1359aa-1359jj, 7272, and 8110; 15 U.S.C. 
714b and 714c.

0
155. Amend Sec.  1435.1 as follows:
0
a. Redesignate paragraphs (a) through (d) as paragraphs (a)(1) through 
(4), redesignate the introductory text as paragraph (a) introductory 
text, and reserve paragraph (b); and
0
b. Revise newly designated paragraph (a) introductory text.
    The revision reads as follows:


Sec.  1435.1  Applicability.

    (a) The regulations in this part specify the terms and conditions 
under which the Farm Service Agency (FSA) will administer the Sugar 
Program for the Commodity Credit Corporation (CCC) to:
* * * * *

0
156. Amend Sec.  1435.101 by revising paragraphs (a) and (b) to read as 
follows:


Sec.  1435.101  Loan rates.

    (a) The national average loan rate for raw cane sugar produced from 
domestically grown sugarcane is 18.75 cents per pound.
    (b) The national average loan rate for refined beet sugar from 
domestically grown sugar beets is equal to 128.5 percent of the loan 
rate per pound of raw cane sugar.
* * * * *

    Signed on December 23, 2014.
Val Dolcini,
Administrator, Farm Service Agency, and Executive Vice President, 
Commodity Credit Corporation.
[FR Doc. 2014-30530 Filed 12-31-14; 8:45 am]
BILLING CODE 3410-05-P`