Sec. 1204. REPAYMENT OF LOANS
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## SEC. 1204 REPAYMENT OF LOANS **[**[7 U.S.C. 7934](/us/usc/t7/s7934)**]** ###
(a)General Rule The Secretary shall permit the producers on a farm to repay a marketing assistance loan under section 1201 for a loan commodity (other than upland cotton, rice, extra long staple cotton, and confectionery and each other kind of sunflower seed (other than oil sunflower seed)) at a rate that is the lesser of— ####
(1)the loan rate established for the commodity under section 1202, plus interest (determined in accordance with section 163 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7283)); or ####
(2)a rate that the Secretary determines will— #####
(A)minimize potential loan forfeitures; #####
(B)minimize the accumulation of stocks of the commodity by the Federal Government; #####
(C)minimize the cost incurred by the Federal Government in storing the commodity; #####
(D)allow the commodity produced in the United States to be marketed freely and competitively, both domestically and internationally; and #####
(E)minimize discrepancies in marketing loan benefits across State boundaries and across county boundaries. ###
(b)Repayment Rates for Upland Cotton and Rice The Secretary shall permit producers to repay a marketing assistance loan under section 1201 for upland cotton and rice at a rate that is the lesser of— ####
(1)the loan rate established for the commodity under section 1202, plus interest (determined in accordance with section 163 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7283)); or ####
(2)the prevailing world market price for the commodity (adjusted to United States quality and location), as determined by the Secretary. ###
(c)Repayment Rates for Extra Long Staple Cotton Repayment of a marketing assistance loan for extra long staple cotton shall be at the loan rate established for the commodity under section 1202, plus interest (determined in accordance with section 163 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7283)). ###
(d)Prevailing World Market Price For purposes of this section and section 1207, the Secretary shall prescribe by regulation— ####
(1)a formula to determine the prevailing world market price for upland cotton and rice, adjusted to United States quality and location; and ####
(2)a mechanism by which the Secretary shall announce periodically the prevailing world market price for upland cotton and rice. ###
(e)Adjustment of Prevailing World Market Price for Upland Cotton ####
(1)In general During the period beginning on the date of the enactment of this Act through July 31, 2008, the prevailing world market price for upland cotton (adjusted to United States quality and location) established under subsection
(d)shall be further adjusted if— #####
(A)the adjusted prevailing world market price is less than 115 percent of the loan rate for upland cotton established under section 1202, as determined by the Secretary; and #####
(B)the Friday through Thursday average price quotation for the lowest-priced United States growth as quoted for Middling
(M)13⁄32-inch cotton delivered C.I.F. Northern Europe is greater than the Friday through Thursday average price of the 5 lowest-priced growths of upland cotton, as quoted for Middling
(M)13⁄32-inch cotton, delivered C.I.F. Northern Europe (referred to in this section as the “Northern Europe price”). ####
(2)Further adjustment Except as provided in paragraph (3), the adjusted prevailing world market price for upland cotton shall be further adjusted on the basis of some or all of the following data, as available: #####
(A)The United States share of world exports. #####
(B)The current level of cotton export sales and cotton export shipments. #####
(C)Other data determined by the Secretary to be relevant in establishing an accurate prevailing world market price for upland cotton (adjusted to United States quality and location). ####
(3)Limitation on further adjustment The adjustment under paragraph
(2)may not exceed the difference between— #####
(A)the Friday through Thursday average price for the lowest-priced United States growth as quoted for Middling 13⁄32-inch cotton delivered C.I.F. Northern Europe; and #####
(B)the Northern Europe price. ###
(f)Repayment Rates for Confectionery and Other Kinds of Sunflower Seeds The Secretary shall permit the producers on a farm to repay a marketing assistance loan under section 1201 for confectionery and each other kind of sunflower seed (other than oil sunflower seed) at a rate that is the lesser of— ####
(1)the loan rate established for the commodity under section 1202, plus interest (determined in accordance with section 163 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7283)); or ####
(2)the repayment rate established for oil sunflower seed. ###
(g)Quality Grades for Dry Peas, Lentils, and Small Chickpeas The loan repayment rate for dry peas, lentils, and small chickpeas shall be based on the quality grades for the applicable commodity specified in section 1202(d). ###
(h)Good Faith Exception to Beneficial Interest Requirement For the 2001 crop year only, in the case of the producers on a farm that marketed or otherwise lost beneficial interest in a loan commodity for which a marketing assistance loan was made under section 131 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7231) before repaying the loan, the Secretary shall permit the producers to repay the loan at the appropriate repayment rate that was in effect for the loan commodity under section 134 of that Act (7 U.S.C. 7234) on the date that the producers lost beneficial interest, as determined by the Secretary, if the Secretary determines the producers acted in good faith.
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