7 USC 8740 – Adjustments of loans
(a) Adjustment authority
Subject to subsection (e), the Secretary may make appropriate adjustments in the loan rates for any loan commodity (other than cotton) for differences in grade, type, quality, location, and other factors.
(b) Manner of adjustment
Terms Used In 7 USC 8740
- county: includes a parish, or any other equivalent subdivision of a State or Territory of the United States. See 1 USC 2
- individual: shall include every infant member of the species homo sapiens who is born alive at any stage of development. See 1 USC 8
- Outlays: Outlays are payments made (generally through the issuance of checks or disbursement of cash) to liquidate obligations. Outlays during a fiscal year may be for payment of obligations incurred in prior years or in the same year.
The adjustments under subsection (a) shall, to the maximum extent practicable, be made in such a manner that the average loan level for the commodity will, on the basis of the anticipated incidence of the factors, be equal to the level of support determined in accordance with this subtitle and subtitles B through E.1
(c) Adjustment on county basis
(1) In general
The Secretary may establish loan rates for a crop for producers in individual counties in a manner that results in the lowest loan rate being 95 percent of the national average loan rate, if those loan rates do not result in an increase in outlays.
(2) Prohibition
Adjustments under this subsection shall not result in an increase in the national average loan rate for any year.
(d) Adjustment in loan rate for cotton
(1) In general
The Secretary may make appropriate adjustments in the loan rate for cotton for differences in quality factors.
(2) Revisions to quality adjustments for upland cotton
(A) In general
Not later than 180 days after the date of enactment of this Act, the Secretary shall implement revisions in the administration of the marketing assistance loan program for upland cotton to more accurately and efficiently reflect market values for upland cotton.
(B) Mandatory revisions
Revisions under subparagraph (A) shall include—
(i) the elimination of warehouse location differentials;
(ii) the establishment of differentials for the various quality factors and staple lengths of cotton based on a 3-year, weighted moving average of the weighted designated spot market regions, as determined by regional production;
(iii) the elimination of any artificial split in the premium or discount between upland cotton with a 32 or 33 staple length due to micronaire; and
(iv) a mechanism to ensure that no premium or discount is established that exceeds the premium or discount associated with a leaf grade that is 1 better than the applicable color grade.
(C) Discretionary revisions
Revisions under subparagraph (A) may include—
(i) the use of non-spot market price data, in addition to spot market price data, that would enhance the accuracy of the price information used in determining quality adjustments under this subsection;
(ii) adjustments in the premiums or discounts associated with upland cotton with a staple length of 33 or above due to micronaire with the goal of eliminating any unnecessary artificial splits in the calculations of the premiums or discounts; and
(iii) such other adjustments as the Secretary determines appropriate, after consultations conducted in accordance with paragraph (3).
(3) Consultation with private sector
(A) Prior to revision
In making adjustments to the loan rate for cotton (including any review of the adjustments) as provided in this subsection, the Secretary shall consult with representatives of the United States cotton industry.
(B) Inapplicability of chapter 10 of title 5
Chapter 10 of title 5 shall not apply to consultations under this subsection.
(4) Review of adjustments
The Secretary may review the operation of the upland cotton quality adjustments implemented pursuant to this subsection and may make further revisions to the administration of the loan program for upland cotton, by—
(A) revoking or revising any actions taken under paragraph (2)(B); or
(B) revoking or revising any actions taken or authorized to be taken under paragraph (2)(C).
(e) Rice
The Secretary shall not make adjustments in the loan rates for long grain rice and medium grain rice, except for differences in grade and quality (including milling yields).