[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: 7CFR1427.16]

[Page 492-493]
 
                          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.  1427.16  Movement and protection of warehouse-stored cotton.

    (a) CCC may insure or reinsure stored cotton against any risk, or 
otherwise take an action it deems necessary to protect the interest 
therein of CCC.
    (b) CCC may reconcentrate cotton as defined in Sec.  1427.3 subject 
to the following:
    (1) A loan servicing agent, or CMA shall arrange for reconcentration 
of cotton under the direction of CCC and CCC shall obtain new warehouse 
receipts; and
    (2) Any charges, fees, costs, or expenses incident to the 
reconcentration of cotton shall be paid by CCC.
    (c) A producer may transfer cotton loan collateral from one CCC-
approved cotton storage warehouse to another CCC-approved cotton storage 
warehouse subject to the following conditions:
    (1) The cotton is represented by electronic warehouse receipts;
    (2) The request is submitted by a producer or a properly designated 
agent of the producer;
    (3) The transfer is agreed to by the receiving warehouse operator; 
and
    (4) The CCC marketing assistance loan that is secured by such cotton 
matures at least 30 days after the date on which the request for the 
transfer is submitted to CCC.
    (d) Following written notice by CCC to the producer and warehouse 
operator, CCC may transfer cotton pledged

[[Page 493]]

as collateral for the marketing assistance loan from one CCC-approved 
warehouse to another if:
    (1) CCC determines such loan cotton collateral is improperly 
warehoused and subject to damage; or
    (2) Any term of the producer's loan agreement is violated, or
    (3) Carrying charges are substantially in excess of the average of 
carrying charges available elsewhere and the storing warehouse, after 
notice, declines to reduce such charges.
    (e) Any charges, fees, costs, or expenses incident to the transfer 
of cotton loan collateral under paragraph (c) of this section shall be 
paid by the requestor of the transfer.
    (f) CCC shall exclude from the calculation of any storage credits 
payable under Sec.  1427.19 the following periods:
    (1) The period during which the cotton is in transit between 
warehouses; and
    (2) Any period beyond 75 days starting from the date of transfer 
from the shipping warehouse, unless the shipping warehouse is:
    (3) Out of compliance with the terms of its Cotton Storage 
Agreement;
    (4) Storing cotton loan collateral outside, or
    (5) Under common ownership with the receiving warehouse.

[71 FR 51427, Aug. 30, 2006]