[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: 7CFR1427.23]

[Page 497-498]
 
                          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.  1427.23  Cotton loan deficiency payments.

    (a) In order to be eligible to receive such loan deficiency 
payments, the producer of the upland cotton must:
    (1) Comply with all of the upland cotton marketing assistance loan 
eligibility requirements under this subpart;
    (2) Agree to forgo obtaining such loans unless denied a loan 
deficiency payment due to payment limitation;
    (3) A producer must submit a completed request for a loan deficiency 
payment for a quantity of eligible cotton under Sec.  1427.5(a) on or 
before the date beneficial interest is lost in the commodity and before 
the final loan availability date for the commodity. Producers must, on a 
form prescribed by CCC, indicate their intentions to receive a loan 
deficiency payment and submit the prescribe form to the FSA Service 
Center on or before beneficial interest is lost in such quantity. A 
producer may not file such a form after beneficial interest is lost.
    (4) Provide warehouse receipts or, as determined by CCC, a list of 
gin bale numbers for such cotton showing, for each bale, the net weight 
established at the gin;
    (5) For loan deficiency payments requested before ginning of the 
cotton based on a locked-in adjusted world price, provide identifying 
numbers for modules or other storage units that will correspond to the 
gin-assigned numbers of the bales produced from the unginned cotton; and
    (6) Otherwise comply with all program requirements.
    (b) The loan deficiency payment applicable to a crop of cotton shall 
be computed by multiplying the applicable loan deficiency payment 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 marketing 
assistance loan.
    (c) The loan deficiency payment rate for a crop of upland cotton 
shall 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 county 
office, loan servicing agent, or cotton commercial bank. In no case 
shall the loan deficiency payment rate for a bale exceed the value of 
the bale had it been pledged as collateral for a marketing assistance 
loan.
    (d) The total amount of any loan deficiency payments that a person 
may receive is subject to 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 a loan deficiency payment under Sec.  
1427.5, the loan deficiency payment rate applicable to such cotton will 
be:
    (1) Based on the date the cotton was ginned if payment application 
is made in the manner prescribed by CCC for obtaining such rate; or
    (2) Based on the date of request for lock-in of the adjusted world 
price if payment application is made in the manner prescribed by CCC for 
obtaining such rate; or

[[Page 498]]

    (3) Based on the date a completed request including production 
evidence is submitted in the manner prescribed by CCC for obtaining such 
rate.
    (f) In the event that Thursday is a non-workday, such applications 
for loan deficiency payments will not be accepted beginning at 7 a.m. 
Eastern Standard time the next workday until an announcement of the 
adjusted world price for the succeeding weekly period has been made 
under Sec.  1427.25(e).
    (g) With respect only to loan deficiency payments for upland cotton 
produced in the 2001 crop year, whether or not produced on a farm 
covered by a production flexibility contract, the applicable final 
availability for such payment is November 18, 2002.

[67 FR 64459, Oct. 18, 2002, as amended at 71 FR 32427, June 6, 2006]