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

[Page 489]
 
                          TITLE 7--AGRICULTURE
 
  CHAPTER XIV--COMMODITY CREDIT CORPORATION, DEPARTMENT OF AGRICULTURE
 
PART 1427_COTTON--Table of Contents
 
     Subpart A_Nonrecourse Cotton Loan and Loan Deficiency Payments
 
Sec.  1427.10  Approved storage.

    (a) Eligible cotton may be pledged as collateral for loans only if 
stored at warehouses approved by CCC.
    (1) Persons desiring approval of their facilities should contact the 
Kansas City Commodity Office, P.O. Box 419205, Kansas City, Missouri 
64141-6205.
    (2) The names of approved warehouses may be obtained from the Kansas 
City Commodity Office or from State or county offices.
    (b) When the operator of a warehouse receives notice from CCC that a 
loan has been made by CCC on a bale of cotton, the operator shall, if 
such cotton is not stored within the warehouse, as directed by CCC place 
such cotton within such warehouse.
    (c) An approved cotton storage warehouse may temporarily store 
cotton pledged as collateral for a CCC loan outside, subject to the 
following conditions:
    (1) The warehouse submits an application for approval of outside 
storage on a form prescribed by CCC.
    (2) The warehouse is located in a storage deficit area as determined 
by CCC.
    (3) The warehouse complies with all outside storage requirements 
established by CCC including but not limited to the duration of such 
outside storage as granted by CCC for the individual application, all-
risk insurance for the loan value of the cotton with CCC as loss payee, 
and use of additional protective coverings and materials that elevate 
the entire bottom surface of the bale to protect such cotton from damage 
by water or airborne contaminants.
    (4) The electronic warehouse receipt for any bale or bales of cotton 
pledged as collateral for a CCC loan must include the dates that the 
bale was initially stored outside, and the date that outside storage 
stopped.
    (5) The warehouse provides CCC a weekly report in a format 
proscribed by CCC identifying individual bales of cotton pledged as 
collateral for a CCC loan that are stored outside.
    (d) Warehouse charges paid by a producer will not be refunded by 
CCC.
    (e) The approved storage requirements provided in this section may 
be waived by CCC if the producer requests a loan deficiency payment 
pursuant to the loan deficiency payment provisions contained in Sec.  
1427.23.
    (f) With respect to 2003 and subsequent crops of ELS cotton, a 
producer may obtain a loan on cotton that is not stored as otherwise 
provided in this section if such cotton is stored:
    (1) At a commercial entity that is involved in the handling or 
storage of cotton in a county or area determined and announced by CCC as 
approved for outside storage of loan collateral;
    (2) The site is constructed so as to prevent the accumulation of 
water under such cotton; and
    (3) As otherwise provided in the loan agreement. The collateral for 
such loan shall be as specified in the loan agreement and may include 
the actual bale of cotton.

[67 FR 64459, Oct. 18, 2002, as amended at 68 FR 49328, Aug. 18, 2003; 
69 FR 12056, Mar. 15, 2004; 71 FR 51427, Aug. 30, 2006]