Title 7 — AgricultureRelease 119-73not60
§1359dd Allocation of Marketing Allotments
Title 7 › Chapter 35— AGRICULTURAL ADJUSTMENT ACT OF 1938 › Subchapter II— LOANS, PARITY PAYMENTS, CONSUMER SAFEGUARDS, MARKETING QUOTAS, AND MARKETING CERTIFICATES › Part B— Marketing Quotas › Subpart vii— flexible marketing allotments for sugar › § 1359dd
Summary
When marketing allotments are set for a crop year, the Secretary must divide each allotment among the sugar processors covered by it so everyone has a fair chance to sell sugar. For cane sugar the Secretary must hold a hearing if processors or growers ask. Allocations are made to be fair, efficient, and equitable. Normally the split among processors in one State uses three things: past marketings (average of the 2 highest years from 1996 through 2000), the processor’s ability to market that sugar, and past processing of cane (average of the 3 highest years from 1996 through 2000). Special rules apply for certain facilities and for States under a different rule that use 1997 through 2001 averages. A processor that starts processing on or after May 13, 2002, may get an allocation after a hearing; first-year allocations cannot exceed 50,000 short tons (raw value), later years are set by the Secretary. New entrant State allotments come from mainland State allotments on a pro rata basis. The Secretary must consider harm to existing mainland processors, and require proof the new processor can produce, process, and market the sugar. If a processor is sold, transferred, or closed in a corporate consolidation, its allocation transfers to the buyer, new owner, successor, or remaining affiliated processor. For beet sugar the Secretary divides the allotment among beet processors using an adjusted weighted average of each processor’s beet sugar for 1998–2000. The weights are 1998 = 25%, 1999 = 35%, and 2000 = 40% (including sugar from the Commodity Credit Corporation). The Secretary can adjust a processor’s weighted average if the processor opened a factory (1996–2000), closed a factory (1998–2000), built a molasses desugarization facility (1998–2000), or had big quality losses storing beets (1998–2000). Openings add 1.25% of the total adjusted average per factory, closings subtract 1.25% per factory, molasses facilities add 0.25% per facility, and quality losses add 1.25%. If a beet processor is dissolved or permanently closed, its allocation is removed and shared pro rata by the others. If a processor or its assets are sold, the allocation generally moves to the buyer, and if only some factories are sold then a pro rata part of the allocation follows those factories unless buyer and seller agree otherwise. A “new entrant” is an entity without an allocation, not affiliated with anyone who has one, and that will process beets under contract at a new or reopened factory. The Secretary must follow the rules above when giving allocations to new entrants, and decisions can be appealed.
Full Legal Text
Title 7, §1359dd
Agriculture — Source: USLM XML via OLRC
(a)Whenever marketing allotments are established for a crop year under section 1359cc of this title, in order to afford all interested persons an equitable opportunity to market sugar under an allotment, the Secretary shall allocate each such allotment among the processors covered by the allotment.
(b)(1)(A)The Secretary shall make allocations for cane sugar after a hearing, if requested by the affected sugarcane processors and growers, and on such notice as the Secretary by regulation may prescribe, in such manner and in such quantities as to provide a fair, efficient, and equitable distribution of the allocations under this paragraph. Each such allocation shall be subject to adjustment under section 1359cc(g) of this title.
(B)Except as provided in subparagraphs (C) and (D), the Secretary shall allocate the allotment for cane sugar among multiple cane sugar processors in a single State based on—
(i)past marketings of sugar, based on the average of the 2 highest years of production of raw cane sugar from among the 1996 through 2000 crops;
(ii)the ability of processors to market sugar covered by that portion of the allotment allocated for the crop year; and
(iii)past processings of sugar from sugarcane, based on the average of the 3 highest years of production during the 1996 through 2000 crop years.
(C)In the case of allotments under subparagraph (B) attributable to the operations of the Talisman processing facility before May 13, 2002, the Secretary shall allocate the allotment among processors in the State under subparagraph (A) in accordance with the agreements of March 25 and 26, 1999, between the affected processors and the Secretary of the Interior.
(D)In the case of States subject to section 1359ff(c) of this title, the Secretary shall allocate the allotment for cane sugar among multiple cane sugar processors in a single State based on—
(i)past marketings of sugar, based on the average of the 2 highest years of production of raw cane sugar from among the 1997 through 2001 crop years;
(ii)the ability of processors to market sugar covered by that portion of the allotments allocated for the crop year; and
(iii)past processings of sugar from sugarcane, based on the average of the 2 highest crop years of crop production during the 1997 through 2001 crop years.
(E)(i)Notwithstanding subparagraphs (B) and (D), the Secretary, on application of any processor that begins processing sugarcane on or after May 13, 2002, and after a hearing (if requested by the affected sugarcane processors and growers) and on such notice as the Secretary by regulation may prescribe, may provide the processor with an allocation that provides a fair, efficient and equitable distribution of the allocations from the allotment for the State in which the processor is located.
(ii)In the case of proportionate share States, the Secretary shall establish proportionate shares in a quantity sufficient to produce the sugarcane required to satisfy the allocations.
(iii)The allotment for a new processor under this subparagraph shall not exceed—
(I)in the case of the first crop year of operation of a new processor, 50,000 short tons (raw value); and
(II)in the case of each subsequent crop year of operation of the new processor, a quantity established by the Secretary in accordance with this subparagraph and the criteria described in subparagraph (B) or (D), as applicable.
(iv)(I)Notwithstanding subparagraphs (A) and (C) of section 1359cc(e)(3) of this title, to accommodate an allocation under clause (i) to a new processor located in a new entrant mainland State, the Secretary shall provide the new entrant mainland State with an allotment.
(II)The allotment to any new entrant mainland State shall be subtracted, on a pro rata basis, from the allotments otherwise allotted to each mainland State under section 1359cc(e)(3) of this title.
(v)Before providing an initial processor allocation or State allotment to a new entrant processor or a new entrant State under this subparagraph, the Secretary shall take into consideration any adverse effects that the provision of the allocation or allotment may have on existing cane processors and producers in mainland States.
(vi)Consistent with section 1359cc of this title and this section, any processor allocation or State allotment made to a new entrant processor or to a new entrant State under this subparagraph shall be provided only after the applicant processor, or the applicable processors in the State, have demonstrated the ability to process, produce, and market (including the transfer or delivery of the raw cane sugar to a refinery for further processing or marketing) raw cane sugar for the crop year for which the allotment is applicable.
(vii)Not more than 1 processor allocation provided under this subparagraph may be applicable to any individual sugar processing facility.
(F)If a sugarcane processor is sold or otherwise transferred to another owner or is closed as part of an affiliated corporate group processing consolidation, the Secretary shall transfer the allotment allocation for the processor to the purchaser, new owner, successor in interest, or any remaining processor of an affiliated entity, as applicable, of the processor.
(2)(A)Except as otherwise provided in this paragraph and section 1359cc(g), 1359ee(b), and 1359ff(b) of this title, the Secretary shall make allocations for beet sugar among beet sugar processors for each crop year that allotments are in effect on the basis of the adjusted weighted average quantity of beet sugar produced by the processors for each of the 1998 through 2000 crop years, as determined under this paragraph.
(B)The quantity of an allocation made for a beet sugar processor for a crop year under subparagraph (A) shall bear the same ratio to the quantity of allocations made for all beet sugar processors for the crop year as the adjusted weighted average quantity of beet sugar produced by the processor (as determined under subparagraphs (C) and (D)) bears to the total of the adjusted weighted average quantities of beet sugar produced by all processors (as so determined).
(C)Subject to subparagraph (D), the weighted quantity of beet sugar produced by a beet sugar processor during each of the 1998 through 2000 crop years shall be (as determined by the Secretary)—
(i)in the case of the 1998 crop year, 25 percent of the quantity of beet sugar produced by the processor during the crop year;
(ii)in the case of the 1999 crop year, 35 percent of the quantity of beet sugar produced by the processor during the crop year; and
(iii)in the case of the 2000 crop year, 40 percent of the quantity of beet sugar produced by the processor (including any quantity of sugar received from the Commodity Credit Corporation) during the crop year.
(D)(i)The Secretary shall adjust the weighted average quantity of beet sugar produced by a beet sugar processor during the 1998 through 2000 crop years under subparagraph (C) if the Secretary determines that the processor—
(I)during the 1996 through 2000 crop years, opened a sugar beet processing factory;
(II)during the 1998 through 2000 crop years, closed a sugar beet processing factory;
(III)during the 1998 through 2000 crop years, constructed a molasses desugarization facility; or
(IV)during the 1998 through 2000 crop years, suffered substantial quality losses on sugar beets stored during any such crop year.
(ii)The quantity of beet sugar produced by a beet sugar processor under subparagraph (C) shall be—
(I)in the case of a processor that opened a sugar beet processing factory, increased by 1.25 percent of the total of the adjusted weighted average quantities of beet sugar produced by all processors during the 1998 through 2000 crop years (without consideration of any adjustment under this subparagraph) for each sugar beet processing factory that is opened by the processor;
(II)in the case of a processor that closed a sugar beet processing factory, decreased by 1.25 percent of the total of the adjusted weighted average quantities of beet sugar produced by all processors during the 1998 through 2000 crop years (without consideration of any adjustment under this subparagraph) for each sugar beet processing factory that is closed by the processor;
(III)in the case of a processor that constructed a molasses desugarization facility, increased by 0.25 percent of the total of the adjusted weighted average quantities of beet sugar produced by all processors during the 1998 through 2000 crop years (without consideration of any adjustment under this subparagraph) for each molasses desugarization facility that is constructed by the processor; and
(IV)in the case of a processor that suffered substantial quality losses on stored sugar beets, increased by 1.25 percent of the total of the adjusted weighted average quantities of beet sugar produced by all processors during the 1998 through 2000 crop years (without consideration of any adjustment under this subparagraph).
(E)If a processor of beet sugar has been dissolved, liquidated in a bankruptcy proceeding, or otherwise has permanently terminated operations (other than in conjunction with a sale or other disposition of the processor or the assets of the processor), the Secretary shall—
(i)eliminate the allocation of the processor provided under this section; and
(ii)distribute the allocation to other beet sugar processors on a pro rata basis.
(F)If a processor of beet sugar (or all of the assets of the processor) is sold to another processor of beet sugar, the Secretary shall transfer the allocation of the seller to the buyer unless the allocation has been distributed to other sugar beet processors under subparagraph (E).
(G)(i)Subject to subparagraphs (E) and (F), if 1 or more factories of a processor of beet sugar (but not all of the assets of the processor) are sold to another processor of beet sugar during a crop year, the Secretary shall assign a pro rata portion of the allocation of the seller to the allocation of the buyer to reflect the historical contribution of the production of the sold 1 or more factories to the total allocation of the seller, unless the buyer and the seller have agreed upon the transfer of a different portion of the allocation of the seller, in which case, the Secretary shall transfer that portion agreed upon by the buyer and seller.
(ii)The assignment of the allocation under clause (i) shall apply—
(I)during the remainder of the crop year for which the sale described in clause (i) occurs; and
(II)during each subsequent crop year.
(iii)If the assignment of the allocation under clause (i) to the buyer for the 1 or more purchased factories cannot be filled by the production of the 1 or more purchased factories, the remainder of the allocation may be filled by beet sugar produced by the buyer from other factories of the buyer.
(H)(i)(I)In this subparagraph, the term “new entrant” means an individual, corporation, or other entity that—
(aa)does not have an allocation of the beet sugar allotment under this subpart;
(bb)is not affiliated with any other individual, corporation, or entity that has an allocation of beet sugar under this subpart (referred to in this clause as a “third party”); and
(cc)will process sugar beets produced by sugar beet growers under contract with the new entrant for the production of sugar at the new or re-opened factory that is the basis for the new entrant allocation.
(II)For purposes of subclause (I)(bb), a new entrant and a third party shall be considered to be affiliated if—
(aa)the third party has an ownership interest in the new entrant;
(bb)the new entrant and the third party have owners in common;
(cc)the third party has the ability to exercise control over the new entrant by organizational rights, contractual rights, or any other means;
(dd)the third party has a contractual relationship with the new entrant by which the new entrant will make use of the facilities or assets of the third party; or
(ee)there are any other similar circumstances by which the Secretary determines that the new entrant and the third party are affiliated.
(ii)If a new entrant constructs a new sugar beet processing factory, or acquires and reopens a sugar beet processing factory that last processed sugar beets prior to the 1998 crop year and there is no allocation currently associated with the factory, the Secretary shall—
(I)assign an allocation for beet sugar to the new entrant that provides a fair and equitable distribution of the allocations for beet sugar so as to enable the new entrant to achieve a factory utilization rate comparable to the factory utilization rates of other similarly-situated processors; and
(II)reduce the allocations for beet sugar of all other processors on a pro rata basis to reflect the allocation to the new entrant.
(iii)(I)If a new entrant acquires an existing factory that has processed sugar beets from the 1998 or subsequent crop year and has a production history, on the mutual agreement of the new entrant and the company currently holding the allocation associated with the factory, the Secretary shall transfer to the new entrant a portion of the allocation of the current allocation holder to reflect the historical contribution of the production of the 1 or more sold factories to the total allocation of the current allocation holder, unless the new entrant and current allocation holder have agreed upon the transfer of a different portion of the allocation of the current allocation holder, in which case, the Secretary shall transfer that portion agreed upon by the new entrant and the current allocation holder.
(II)In the absence of a mutual agreement described in subclause (I), the new entrant shall be ineligible for a beet sugar allocation.
(iv)Any decision made under this subsection may be appealed to the Secretary in accordance with section 1359ii of this title.
Legislative History
Notes & Related Subsidiaries
Editorial Notes
Codification Pub. L. 110–234 and Pub. L. 110–246 made identical
Amendments
to this section. The
Amendments
by Pub. L. 110–234 were repealed by section 4(a) of Pub. L. 110–246.
Prior Provisions
A prior section 1359dd, act Feb. 16, 1938, ch. 30, title III, § 359d, as added Pub. L. 101–624, title IX, § 902, Nov. 28, 1990, 104 Stat. 3483; amended Pub. L. 102–237, title I, § 111(f), Dec. 13, 1991, 105 Stat. 1833, related to allocation of marketing allotments, prior to the general amendment of this subpart by Pub. L. 107–171.
Amendments
2008—Subsec. (b)(1)(F). Pub. L. 110–246, § 1403(d)(1), substituted “If” for “Except as otherwise provided in section 1359ff(c)(8) of this title, if”. Subsec. (b)(2)(G) to (I). Pub. L. 110–246, § 1403(d)(2), added subpars. (G) and (H) and struck out former subpars. (G) to (I) which related to sale of factories of a processor to another processor, new entrants starting production or reopening factories after May 13, 2002, and new entrants acquiring ongoing factories with production history during the period of the 1998 through 2000 crop years.
Statutory Notes and Related Subsidiaries
Effective Date
of 2008 AmendmentAmendment of this section and repeal of Pub. L. 110–234 by Pub. L. 110–246 effective May 22, 2008, the date of enactment of Pub. L. 110–234, see section 4 of Pub. L. 110–246, set out as an
Effective Date
note under section 8701 of this title.
Reference
Citations & Metadata
Citation
7 U.S.C. § 1359dd
Title 7 — Agriculture
Last Updated
Apr 3, 2026
Release point: 119-73not60