§9037 Special Marketing Loan Provisions for Upland Cotton

Summary

The President must run two kinds of import quota programs that let some upland cotton enter the United States without paying the higher over‑quota tariff when U.S. prices hit set levels. A "special import quota" (imports not charged the over‑quota tariff) starts on August 1, 2014, and is triggered if, for any consecutive four‑week period, the four‑week average price for the lowest‑priced U.S. middling 13/32‑inch cotton in a major international market is higher than the world market price. That quota equals one week’s worth of domestic mill cotton use based on the seasonally adjusted average rate for the most recent three months. Cotton must be bought within 90 days of the Secretary’s announcement and entered into the U.S. within 180 days. Multiple special quotas can overlap other quota periods except a quota under the limited global program, and total entries under special quotas in any marketing year may not exceed the equivalent of 10 weeks’ domestic mill consumption. Quantities under these quotas count as in‑quota for the specific tariff law provisions named in the statute (sections 2703(d), 3203, 2463(d) of title 19, and General Note 3(a)(iv) to the Harmonized Tariff Schedule). A "limited global import quota" (also imports not charged the over‑quota tariff) starts when the Secretary finds that the monthly average price of base quality upland cotton in designated spot markets is more than 130 percent of its 36‑month average. The quota equals 21 days of domestic mill consumption based on the most recent three months. If a quota was set in the prior 12 months, the next quota is the smaller of 21 days’ consumption or enough cotton to raise supply to 130 percent of demand. "Demand" and "supply" are measured by the Secretary using recent domestic use, exports, carry‑over, production, and imports. Cotton under a limited global quota may be entered during the 90 days after the quota is set, and limited global quotas cannot overlap existing quotas or special import quotas. The Secretary must also make monthly economic adjustment payments to U.S. users of upland cotton for documented use in the prior month: 3 cents per pound from August 1, 2013, through July 31, 2025, and 5 cents per pound starting August 1, 2025. Those payments may only be used for buying or improving land, plants, buildings, equipment, facilities, or machinery. The Secretary can audit users’ records, and anyone found to have used the money improperly must repay it with interest and will be barred from getting more assistance for 1 year.