---
kind: "section"
citation: "7 U.S.C. § 1359dd"
title: "7"
title_heading: "Agriculture"
number: "1359dd"
heading: "Allocation of marketing allotments"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/7/1359dd"
units:
  - "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. Allocation of marketing allotments

- (a) **Allocation to processors—** Whenever [marketing](/usc/7/1301.md?p=b-6-B) allotments are established for a crop year under [section 1359cc of this title](/usc/7/1359cc.md), in order to afford all interested [persons](/usc/7/1301.md?p=a-8) an equitable opportunity to [market](/usc/7/1359aa.md?p=3-A) sugar under an allotment, the [Secretary](/usc/7/1301.md?p=a-7) shall allocate each such allotment among the processors covered by the allotment.
- (b) **Hearing and notice—**
  - (1) **Cane sugar—**
    - (A) **In general—** The [Secretary](/usc/7/1301.md?p=a-7) 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](/usc/7/1301.md?p=a-7) 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](/usc/7/1359cc.md?p=g).
    - (B) **Multiple processor States—** Except as provided in subparagraphs [(C)](#b-1-C) and [(D)](#b-1-D), the [Secretary](/usc/7/1301.md?p=a-7) shall allocate the allotment for cane sugar among multiple cane sugar processors in a single [State](/usc/7/1359aa.md?p=5) based on—
      - (i) past [marketings](/usc/7/1301.md?p=b-6-B) 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](/usc/7/1359aa.md?p=3-A) 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) **Talisman processing facility—** In the case of allotments under [subparagraph (B)](#b-1-B) attributable to the operations of the Talisman processing facility before May 13, 2002, the [Secretary](/usc/7/1301.md?p=a-7) shall allocate the allotment among processors in the [State](/usc/7/1359aa.md?p=5) under [subparagraph (A)](#b-1-A) in accordance with the agreements of March 25 and 26, 1999, between the affected processors and the [Secretary](/usc/7/1301.md?p=a-7) of the Interior.
    - (D) **Proportionate share States—** In the case of [States](/usc/7/1359aa.md?p=5) subject to [section 1359ff(c) of this title](/usc/7/1359ff.md?p=c), the [Secretary](/usc/7/1301.md?p=a-7) shall allocate the allotment for cane sugar among multiple cane sugar processors in a single [State](/usc/7/1359aa.md?p=5) based on—
      - (i) past [marketings](/usc/7/1301.md?p=b-6-B) 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](/usc/7/1359aa.md?p=3-A) 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) **New entrants—**
      - (i) **In general—** Notwithstanding subparagraphs [(B)](#b-1-B) and [(D)](#b-1-D), the [Secretary](/usc/7/1301.md?p=a-7), 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](/usc/7/1301.md?p=a-7) 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](/usc/7/1359aa.md?p=5) in which the processor is located.
      - (ii) **Proportionate share States—** In the case of proportionate share [States](/usc/7/1359aa.md?p=5), the [Secretary](/usc/7/1301.md?p=a-7) shall establish proportionate shares in a quantity sufficient to produce the sugarcane required to satisfy the allocations.
      - (iii) **Limitations—** 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](/usc/7/1301.md?p=a-7) in accordance with this subparagraph and the criteria described in subparagraph [(B)](#b-1-B) or [(D)](#b-1-D), as applicable.
      - (iv) **New entrant States—**
        - (I) **In general—** Notwithstanding subparagraphs (A) and (C) of [section 1359cc(e)(3) of this title](/usc/7/1359cc.md?p=e-3), to accommodate an allocation under [clause (i)](#b-1-E-i) to a new processor located in a new entrant [mainland State](/usc/7/1359aa.md?p=2), the [Secretary](/usc/7/1301.md?p=a-7) shall provide the new entrant [mainland State](/usc/7/1359aa.md?p=2) with an allotment.
        - (II) **Effect on other allotments—** The allotment to any new entrant [mainland State](/usc/7/1359aa.md?p=2) shall be subtracted, on a pro rata basis, from the allotments otherwise allotted to each [mainland State](/usc/7/1359aa.md?p=2) under [section 1359cc(e)(3) of this title](/usc/7/1359cc.md?p=e-3).
      - (v) **Adverse effects—** Before providing an initial processor allocation or [State](/usc/7/1359aa.md?p=5) allotment to a new entrant processor or a new entrant [State](/usc/7/1359aa.md?p=5) under this subparagraph, the [Secretary](/usc/7/1301.md?p=a-7) 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](/usc/7/1359aa.md?p=2).
      - (vi) **Ability to market—** Consistent with [section 1359cc of this title](/usc/7/1359cc.md) and this section, any processor allocation or [State](/usc/7/1359aa.md?p=5) allotment made to a new entrant processor or to a new entrant [State](/usc/7/1359aa.md?p=5) under this subparagraph shall be provided only after the applicant processor, or the applicable processors in the [State](/usc/7/1359aa.md?p=5), have demonstrated the ability to process, produce, and [market](/usc/7/1359aa.md?p=3-A) (including the transfer or delivery of the raw cane sugar to a refinery for further processing or [marketing](/usc/7/1301.md?p=b-6-B)) raw cane sugar for the crop year for which the allotment is applicable.
      - (vii) **Prohibition—** Not more than 1 processor allocation provided under this subparagraph may be applicable to any individual sugar processing facility.
    - (F) **Transfer of ownership—** 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](/usc/7/1301.md?p=a-7) 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) **Beet sugar—**
    - (A) **In general—** Except as otherwise provided in this paragraph and sections [1359cc(g)](/usc/7/1359cc.md?p=g), [1359ee(b)](/usc/7/1359ee.md?p=b), and [1359ff(b)](/usc/7/1359ff.md?p=b) of this title, the [Secretary](/usc/7/1301.md?p=a-7) 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) **Quantity—** The quantity of an allocation made for a beet sugar processor for a crop year under [subparagraph (A)](#b-2-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)](#b-2-C) and [(D)](#b-2-D)) bears to the total of the adjusted weighted average quantities of beet sugar produced by all processors (as so determined).
    - (C) **Weighted average quantity—** Subject to [subparagraph (D)](#b-2-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](/usc/7/1301.md?p=a-7))—
      - (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) **Adjustments—**
      - (i) **In general—** The [Secretary](/usc/7/1301.md?p=a-7) 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)](#b-2-C) if the [Secretary](/usc/7/1301.md?p=a-7) 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) **Quantity—** The quantity of beet sugar produced by a beet sugar processor under [subparagraph (C)](#b-2-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) **Permanent termination of operations of a processor—** 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](/usc/7/1301.md?p=a-7) 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) **Sale of all assets of a processor to another processor—** If a processor of beet sugar (or all of the assets of the processor) is sold to another processor of beet sugar, the [Secretary](/usc/7/1301.md?p=a-7) shall transfer the allocation of the seller to the buyer unless the allocation has been distributed to other sugar beet processors under [subparagraph (E)](#b-2-E).
    - (G) **Sale of factories of a processor to another processor—**
      - (i) **Effect of sale—** Subject to subparagraphs [(E)](#b-2-E) and [(F)](#b-2-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](/usc/7/1301.md?p=a-7) 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](/usc/7/1301.md?p=a-7) shall transfer that portion agreed upon by the buyer and seller.
      - (ii) **Application of allocation—** The assignment of the allocation under [clause (i)](#b-2-G-i) shall apply—
        - (I) during the remainder of the crop year for which the sale described in [clause (i)](#b-2-G-i) occurs; and
        - (II) during each subsequent crop year.
      - (iii) **Use of other factories to fill allocation—** If the assignment of the allocation under [clause (i)](#b-2-G-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) **New entrants starting production, reopening, or acquiring an existing factory with production history—**
      - (i) **Definition of new entrant—**
        - (I) **In general—** 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) **Affiliation—** For purposes of [subclause (I)(bb)](#b-2-H-i-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](/usc/7/1301.md?p=a-7) determines that the new entrant and the third party are affiliated.
      - (ii) **Allocation for a new entrant that has constructed a new factory or reopened a factory that was not operated since before 1998—** 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](/usc/7/1301.md?p=a-7) 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) **Allocation for a new entrant that has acquired an existing factory with a production history—**
        - (I) **In general—** 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](/usc/7/1301.md?p=a-7) 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](/usc/7/1301.md?p=a-7) shall transfer that portion agreed upon by the new entrant and the current allocation holder.
        - (II) **Prohibition—** In the absence of a mutual agreement described in [subclause (I)](#b-2-H-iii-I), the new entrant shall be ineligible for a beet sugar allocation.
      - (iv) **Appeals—** Any decision made under this subsection may be appealed to the [Secretary](/usc/7/1301.md?p=a-7) in accordance with [section 1359ii of this title](/usc/7/1359ii.md).

## Source credit

(Feb. 16, 1938, ch. 30, title III, § 359d, as added Pub. L. 107–171, title I, § 1403, May 13, 2002, 116 Stat. 191; amended Pub. L. 110–234, title I, § 1403(d), May 22, 2008, 122 Stat. 984; Pub. L. 110–246, § 4(a), title I, § 1403(d), June 18, 2008, 122 Stat. 1664, 1712.)

## Notes

### 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 Amendment

Amendment 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.