
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 7USC1445e]

 
                          TITLE 7--AGRICULTURE
 
         CHAPTER 35A--PRICE SUPPORT OF AGRICULTURAL COMMODITIES
 
              SUBCHAPTER II--BASIC AGRICULTURAL COMMODITIES
 
Sec. 1445e. Farmer owned reserve program


(a) In general

    The Secretary shall formulate and administer a farmer owned reserve 
program under which producers of wheat and feed grains will be able to 
store wheat and feed grains when the commodities are in abundant supply, 
extend the time period for the orderly marketing of the commodities, and 
provide for adequate carryover stocks to ensure a reliable supply of the 
commodities.

(b) Terms of program

                       (1) Price support loans

        In carrying out this program, the Secretary shall provide 
    extended price support loans for wheat and feed grains. An extended 
    loan shall only be made to a producer after the expiration of a 9-
    month price support loan (hereafter in this section referred to as 
    the ``original loan'') made in accordance with this subchapter.

                         (2) Level of loans

        Loans made under this section shall not be less than the then 
    current level of support under the wheat and feed grain programs 
    established under this subchapter.

                   (3) Other terms and conditions

        The Secretary shall provide for--
            (A) repayment of the extended price support loan 27 months 
        from the date on which the original loan expired unless, at the 
        discretion of the Secretary, the loan has been extended for one 
        6-month period;
            (B) a rate of interest as provided under subsection (c) of 
        this section; and
            (C) payments to producers for storage as provided in 
        subsection (d) of this section.

                      (4) Regional differences

        The Secretary shall ensure that producers are afforded a fair 
    and equitable opportunity to participate in the program established 
    under this section, taking into account regional differences in the 
    time of harvest.

(c) Interest charges

                       (1) Levying of interest

        The Secretary may charge interest on loans under this section 
    whenever the price of wheat or feed grains is equal to or exceeds 
    105 percent of the then current established price for the commodity.

                          (2) 90-day period

        If interest is levied on the loans under paragraph (1), the 
    interest may be charged for a period of 90 days after the last day 
    on which the price of wheat or feed grains was equal to or in excess 
    of 105 percent of the established price for the commodities.

                        (3) Rate of interest

        The rate of interest charged participants in this program shall 
    not be less than the rate of interest charged by the Commodity 
    Credit Corporation by the United States Treasury, except that the 
    Secretary may waive or adjust the interest as the Secretary 
    considers appropriate to effectuate the purposes of this section.

(d) Storage payments

                           (1) In general

        The Secretary shall provide storage payments to producers for 
    storage of wheat or feed grains under the program established in 
    this section in such amounts and under such conditions as the 
    Secretary determines appropriate to encourage producers to 
    participate in the program.

                             (2) Timing

        The Secretary shall make storage payments available to 
    participants in this program at the end of each quarter.

                            (3) Duration

        The Secretary shall cease making storage payments whenever the 
    price of wheat or feed grains is equal to or exceeds 95 percent of 
    the then current established price for the commodities, and for any 
    90-day period immediately following the last day on which the price 
    of wheat or feed grains was equal to or in excess of 95 percent of 
    the then current established price for the commodities.

(e) Emergencies

    Notwithstanding any other provision of law, the Secretary may 
require producers to repay loans made under this section, plus accrued 
interest and such other charges as may be required by regulation prior 
to the maturity date thereof, if the Secretary determines that emergency 
conditions exist that require that the commodity be made available in 
the market to meet urgent domestic or international needs and the 
Secretary reports the determination and the reasons for the 
determination to the President, the Committee on Agriculture of the 
House of Representatives, and the Committee on Agriculture, Nutrition, 
and Forestry of the Senate at least 14 days before taking the action.

(f) Quantity of commodities in program

    The Secretary may establish maximum quantities of wheat and feed 
grains that may receive loans and storage payments under this program as 
follows:
        (1) The maximum quantities of wheat may not be established at 
    less than 300 million bushels, nor more than 450 million bushels.
        (2) The maximum quantities of feed grains may not be established 
    at less than 600 million bushels, nor more than 900 million bushels.

(g) Announcement of program

                      (1) Time of announcement

        The Secretary shall announce the terms and conditions of the 
    producer storage program for a crop of wheat and feed grains by--
            (A) in the case of wheat, December 15 of the year in which 
        the crop of wheat was harvested; and
            (B) in the case of feed grains, March 15 of the year 
        following the year in which the crop of corn was harvested.

                       (2) Discretionary entry

        The Secretary may make extended loans available to producers of 
    wheat or feed grains if--
            (A) the Secretary determines that the average market price 
        for wheat or corn, respectively, for the 90-day period prior to 
        the dates specified in paragraph (1) is less than 120 percent of 
        the current loan rate for wheat or corn, respectively; or
            (B) as of the appropriate date specified in paragraph (1), 
        the Secretary estimates that the stocks-to-use ratio on the last 
        day of the current marketing year will be--
                (i) in the case of wheat, more than 37.5 percent; and
                (ii) in the case of corn, more than 22.5 percent.

                         (3) Mandatory entry

        The Secretary shall make extended loans available to producers 
    of wheat or feed grains if the conditions specified in subparagraphs 
    (A) and (B) of paragraph (2) are met for wheat or feed grains, 
    respectively.

                     (4) Content of announcement

        In the announcement, the Secretary shall specify the maximum 
    quantity of wheat or feed grains to be stored under this program 
    that the Secretary determines appropriate to promote the orderly 
    marketing of the commodities.

(h) Discretionary exit

    A producer may repay a loan extended under this section at any time.

(i) Reconcentration of grain

    The Secretary may, with the concurrence of the owner of grain stored 
under this program, reconcentrate all such grain stored in commercial 
warehouses at such points as the Secretary considers to be in the public 
interest, taking into account such factors as transportation and normal 
marketing patterns. The Secretary shall permit rotation of stocks and 
facilitate maintenance of quality under regulations that assure that the 
holding producer or warehouseman shall, at all times, have available for 
delivery at the designated place of storage both the quantity and 
quality of grain covered by the producer's or warehouseman's commitment.

(j) Management of grain

    Whenever grain is stored under this section, the Secretary may buy 
and sell at an equivalent price, allowing for the customary location and 
grade differentials, substantially equivalent quantities of grain in 
different locations or warehouses to the extent needed to properly 
handle, rotate, distribute, and locate the commodities that the 
Commodity Credit Corporation owns or controls. The purchases to offset 
sales shall be made within 2 market days following the sales. The 
Secretary shall make a daily list available showing the price, location, 
and quantity of the transactions.

(k) Use of Commodity Credit Corporation

    The Secretary shall use the Commodity Credit Corporation, to the 
extent feasible, to fulfill the purposes of this section. To the maximum 
extent practicable consistent with the fulfillment of the purposes of 
this section and the effective and efficient administration of this 
section, the Secretary shall utilize the usual and customary channels, 
facilities, and arrangements of trade and commerce.

(l) Use of commodity certificates

    Notwithstanding any other provision of law, if a producer has 
substituted purchased or other commodities for the commodities 
originally pledged as collateral for a loan made under this section, the 
Secretary may allow a producer to repay the loan using a generic 
commodity certificate that may be exchanged for commodities owned by the 
Commodity Credit Corporation, if the substitute commodities have been 
pledged as loan collateral and redeemed only within the same county.

(m) Additional authority

    The authority provided by this section shall be in addition to other 
authorities available to the Secretary for carrying out producer loan 
and storage operations.

(n) Regulations

    The Secretary of Agriculture shall issue such regulations as are 
necessary to carry out this section not later than 60 days after 
November 28, 1990.

(o) Review

    In announcing the terms and conditions of the producer storage 
program under this section, the Secretary shall review standards 
concerning the quality of grain that shall be allowed to be stored under 
the program, and such standards should encourage only quality grain, as 
determined by the Secretary, to be pledged as collateral for such loans. 
The Secretary shall review inspection, maintenance, and stock rotation 
requirements and take the necessary steps to maintain the quality of 
such grain.

(p) Crops

    Notwithstanding any other provision of law, this section shall 
become effective December 1, 1990.

(Oct. 31, 1949, ch. 792, title I, Sec. 110, as added Pub. L. 95-113, 
title XI, Sec. 1101, Sept. 29, 1977, 91 Stat. 951; amended Pub. L. 96-
234, Secs. 1, 2, Apr. 11, 1980, 94 Stat. 333; Pub. L. 96-494, title II, 
Secs. 203(a), 204, 205, Dec. 3, 1980, 94 Stat. 2571, 2572; Pub. L. 97-
24, Sec. 2, July 23, 1981, 95 Stat. 143; Pub. L. 97-98, title X, 
Sec. 1001, Dec. 22, 1981, 95 Stat. 1257; Pub. L. 99-198, title X, 
Sec. 1012(a), Dec. 23, 1985, 99 Stat. 1455; Pub. L. 100-203, title I, 
Sec. 1108, Dec. 22, 1987, 101 Stat. 1330-6; Pub. L. 100-387, title III, 
Sec. 303(b), Aug. 11, 1988, 102 Stat. 947; Pub. L. 101-624, title XI, 
Sec. 1123, title XX, Sec. 2010, Nov. 28, 1990, 104 Stat. 3503, 3932; 
Pub. L. 102-237, title I, Sec. 113(7), Dec. 13, 1991, 105 Stat. 1837.)


                               Amendments

    1991--Subsec. (k). Pub. L. 102-237, Sec. 113(7)(C)(i), redesignated 
subsec. (k), relating to review, as (o).
    Subsec. (n). Pub. L. 102-237, Sec. 113(7)(A), substituted ``November 
28, 1990'' for ``the date of enactment of this section''.
    Subsec. (o). Pub. L. 102-237, Sec. 113(7)(C), redesignated subsec. 
(k), relating to review, as (o), inserted heading, and substituted 
``this section'' for ``subsection (e)(1)''.
    Pub. L. 102-237, Sec. 113(7)(B), redesignated subsec. (o) as (p).
    Subsec. (p). Pub. L. 102-237, Sec. 113(7)(B), redesignated subsec. 
(o) as (p).
    1990--Pub. L. 101-624, Sec. 1123, amended section generally, 
substituting provisions relating to the farmer owned reserve program for 
provisions relating to the establishment and maintenance of the producer 
reserve program for wheat and feed grains.
    Subsec. (k). Pub. L. 101-624, Sec. 2010, added subsec. (k) relating 
to review.
    1988--Subsec. (j). Pub. L. 100-387 temporarily added subsec. (j). 
See Effective and Termination Dates of 1988 Amendment note.
    1987--Subsec. (b)(A)(i). Pub. L. 100-203, Sec. 1108(1), substituted 
``300 million bushels'' for ``17 percent of the estimated total domestic 
and export usage of wheat during the then current marketing year for 
wheat, as determined by the Secretary''.
    Subsec. (b)(A)(ii). Pub. L. 100-203, Sec. 1108(2), substituted ``450 
million bushels'' for ``7 percent of the estimated total domestic and 
export usage of feed grains during the then current marketing year for 
feed grains, as determined by the Secretary''.
    1985--Subsec. (a). Pub. L. 99-198 in first sentence substituted 
``abudnant supply, extend'' for ``abundant supply and extend'' and 
inserted ``, and provide for adequate, but not excessive, carryover 
stocks to ensure a reliable supply of the commodities'' after ``for 
their orderly marketing''.
    Subsec. (b). Pub. L. 99-198 in third sentence substituted ``, with 
extensions as warranted by market conditions'' for ``nor more than five 
years'' in cl. (1), substituted ``when the total amount of wheat or feed 
grains in storage under programs under this section is below the upper 
limits for such storage as set forth in clauses (A) and (B) of 
subsection (e)(2) of this section and the market price for wheat or feed 
grains is below'' for ``before the market price for wheat or feed grains 
has reached'' in cl. (4), substituted ``the higher of 140 percent of the 
nonrecourse loan rate for the commodity or the established price for 
such commodity, as determined under this subchapter'' for ``a specified 
level, as determined by the Secretary'' in cl. (5), and at end inserted 
provisions requiring Secretary to encourage participation in the 
programs authorized under this section by offering producers increased 
storage payments and loan levels, interest waivers, or such other 
incentives as the Secretary determines necessary to maintain total 
amount of storage at specified levels, whenever the total quantity of 
wheat and feed grains stored under this section is less than 17 and 7 
percent, respectively, of the estimated total usage thereof during the 
then current marketing year, and the marketing price does not exceed 140 
percent of the nonrecourse loan rate for the commodity, and inserted 
provision requiring Secretary to ensure than producers are afforded a 
fair and equitable opportunity to participate in each producer storage 
program.
    Subsec. (e). Pub. L. 99-198 designated existing provisions as par. 
(1), inserted ``, subject to the upper limits on the total quantity of 
wheat and feed grains that may be stored under storage programs 
established under this section set out in paragraph (2)'' in second 
sentence, struck out third sentence which authorized the Secretary to 
place an upper limit of not less than seven hundred million bushels for 
wheat and one billion bushels for feed grains placed in the reserve, and 
added par. (2).
    1981--Subsec. (a). Pub. L. 97-98 struck out discretionary authority 
of Secretary with regard to permitting producers of feed grains to store 
wheat and feed grains.
    Subsec. (b). Pub. L. 97-98 substituted ``Secretary shall provide'' 
for ``Secretary may provide'', struck out ``at the same level of support 
as provided by this Act'' after ``loans for wheat and feed grains'', and 
substituted provisions that loans be made at such levels of support as 
Secretary determines appropriate, except that the loan rate not be less 
than the then current level of support under the wheat and feed grains 
programs established under this subchapter for provisions relating to 
the level of price support loans to be made available to producers for 
the 1980 and 1981 crops of wheat and feed grains necessary to mitigate 
the adverse effects of the restrictions on the export of agricultural 
products to the Union of Soviet Socialist Republics and providing that 
the level of price support loans for the 1980 and 1981 crops of wheat 
and feed grains not be used in determining the levels at which producers 
repay loans and redeem commodities prior to the maturity dates of the 
loans or levels at which Secretary may call for the repayment of loans 
prior to their maturity dates and ``program may provide'' for ``program 
shall provide''.
    Subsec. (b)(2). Pub. L. 97-98 substituted ``for storage in such 
amounts and under such conditions as the Secretary determines 
appropriate to encourage producers to participate in the program'' for 
``of such amounts as the Secretary determines appropriate to cover the 
cost of storing wheat and feed grains held under the program''.
    Subsec. (b)(3). Pub. L. 97-98 substituted ``as determined under 
subsection (c) of this section'' for ``determined by the Secretary based 
upon the rate of interest charged the Commodity Credit Corporation by 
the United States Treasury, except that the Secretary may waive or 
adjust such interest''.
    Pub. L. 97-24 struck out ``, and the Secretary shall waive such 
interest on loans made on the 1980 and 1981 crops of wheat and feed 
grains'' after ``a rate of interest determined by the Secretary based 
upon the rate of interest charged the Commodity Credit Corporation by 
the United States Treasury, except that the Secretary may waive or 
adjust such interest''.
    Subsec. (b)(4). Pub. L. 97-98 substituted ``if such loans'' for ``in 
the event such loans'' and ``determined under clause (5) of this 
sentence'' for ``specified in clause (5) of this subsection''.
    Subsec. (b)(6). Pub. L. 97-98 struck out cl. (6) which authorized 
the program to contain conditions prescribed by Secretary under which 
Secretary may require producers to repay such loans, plus accrued 
interest thereon, refund amounts paid for storage, and pay such 
additional interest and other charges as may be required by regulation, 
whenever Secretary determines that the market price for the commodity is 
not less than such appropriate level, as determined by Secretary.
    Subsec. (c). Pub. L. 97-98 substituted provision prescribing rate of 
interest charged to participants in the program authorized by this 
section for provision authorizing payments to producers of the 1979 
crops of corn and wheat who did not comply with the 1979 program 
requirements.
    Subsec. (d). Pub. L. 97-98 added subsec. (d) and redesignated former 
subsec. (d) as (e).
    Subsec. (e). Pub. L. 97-98 redesignated former subsec. (d) as (e) 
and substituted provision authorizing Secretary to place an upper limit 
on the amount of wheat and feed grains placed in the reserve, with such 
upper limit not less than seven hundred million bushels for wheat and 
one billion bushels for feed grains, for provision authorizing the 
maximum amount of wheat stored as not less than three hundred million 
bushels nor more than seven hundred million bushels, with authority for 
Secretary to adjust this amount as necessary to meet commitments by the 
United States pursuant to international agreements. Former subsec. (e) 
redesignated (f).
    Subsec. (f). Pub. L. 97-98 redesignated former subsec. (e) as (f) 
and substituted in provision preceding par. (1) ``the program 
authorized'' for ``the extended loan program authorized'', ``110 per 
centum'' for ``105 per centum'', ``Secretary may encourage repayment'' 
for ``Secretary may call for repayment'', and ``clause (5) of the third 
sentence of subsection (b) of this section. The foregoing restriction'' 
for ``clause (6) of the second sentence of subsection (b) of this 
section: Provided, That such restriction'' and in provision following 
par. (3) ``clause (5) of the third sentence'' for ``clause (5) of the 
second sentence''. Former subsec. (f) redesignated (g).
    Subsec. (g). Pub. L. 97-98 redesignated former subsec. (f) as (g) 
and substituted ``by the producer's or warehouseman's commitment'' for 
``by his commitment''. Former subsec. (g) redesignated (h).
    Subsec. (h). Pub. L. 97-98 redesignated former subsec. (g) as (h). 
Former subsec. (h) redesignated (i).
    Subsec. (i). Pub. L. 97-98 redesignated former subsec. (h) as (i) 
and substituted ``To the maximum extent'' for ``In addition, to the 
maximum extent''.
    1980--Subsec. (b). Pub. L. 96-494, Sec. 203(a)(1), inserted two 
provisos in provisions permitting Secretary to provide original or 
extended price support loans for wheat and feed grains at the same level 
of support as provided by this Act, in carrying out the producer storage 
program, under terms and conditions designed to encourage producers to 
store wheat and feed grains for extended periods of time to promote 
orderly marketing when wheat or feed grains are in abundant supply.
    Subsec. (b)(3). Pub. L. 96-494, Sec. 203(a)(2), inserted provisions 
requiring Secretary to waive interest on loans made on the 1980 and 1981 
crops of wheat and feed grains.
    Subsec. (b)(5). Pub. L. 96-494, Sec. 204, substituted ``for the 
commodity has attained a specified level'' for ``of wheat has attained a 
specified level which is not less than 140 per centum nor more than 160 
per centum of the then current level of price support for wheat or such 
appropriate level for feed grains''.
    Subsec. (b)(6). Pub. L. 96-494, Sec. 204, substituted ``such 
appropriate level, as determined by the Secretary'' for ``175 per centum 
of the then current level of the price support for wheat or such 
appropriate level for feed grains as determined by the Secretary under 
this Act''.
    Subsecs. (c), (d). Pub. L. 96-234, Sec. 1, added subsec. (c) and 
redesignated former subsecs. (c) and (d) as (d) and (e), respectively.
    Subsec. (e). Pub. L. 96-494, Sec. 205(1), (2), substituted ``except 
as otherwise provided under section 1736f-1 of this title and section 
4001 of this title, whenever the extended loan program authorized by 
this section is in effect, the Commodity Credit Corporation may not sell 
any of its stocks of wheat or feed grains at less than 105 per centum of 
the then current level at which the Secretary may call for repayment of 
producer storage loans on the commodity prior to the maturity dates of 
the loans, as determined under clause (6) of the second sentence of 
subsection (b) of this section'' for ``whenever the extended loan 
program authorized by this section is in effect, the Commodity Credit 
Corporation may not sell any of its stocks of wheat or feed grains at 
less than 150 percentum of the then current level of price support for 
such commodity''.
    Pub. L. 96-234, Sec. 1(1), (2), redesignated former subsec. (d) as 
(e) and added cl. (3). Former subsec. (e) redesignated (f).
    Subsec. (e)(3). Pub. L. 96-494, Sec. 205(3), in provisions preceding 
subpar. (A), substituted ``sales of corn'' for ``sales of corn when sold 
at not less than the release level under the extended loan program'', 
and inserted ``when sold at not less than the price at which producers 
may repay producer storage loans and redeem corn prior to the maturity 
dates of loans, as determined under clause (5) of the second sentence of 
subsection (b) of this section, or, whenever the fuel conversion price 
(as defined in section 4005 of this title) for corn exceeds such price, 
at not less than the fuel conversion price''.
    Subsecs. (f) to (h). Pub. L. 96-234, Sec. 1(1), redesignated former 
subsecs. (e) to (g) as (f) to (h), respectively.


                    Effective Date of 1990 Amendment

    Amendment by section 1123 of Pub. L. 101-624 effective beginning 
with 1991 crop of an agricultural commodity, with provision for prior 
crops, see section 1171 of Pub. L. 101-624, set out as a note under 
section 1421 of this title.


            Effective and Termination Dates of 1988 Amendment

    Section 303(b) of Pub. L. 100-387 provided that the amendment made 
by that section is effective only for 1988 marketing year for wheat and 
feed grains.


                    Effective Date of 1985 Amendment

    Section 1012(a) of Pub. L. 99-198 provided that, except as provided 
in section 1012(b) of Pub. L. 99-198 [set out below], the amendments by 
section 1012(a) are effective beginning with 1986 crops.
    Section 1012(b) of Pub. L. 99-198 provided that: ``The amendment 
made by subsection (a)(2)(B) of this section [amending this section] 
shall take effect with respect to any loan made under section 110 of the 
Agricultural Act of 1949 (7 U.S.C. 1445e) the date for repayment of 
which occurs after the date of enactment of this Act [Dec. 23, 1985].''


                    Effective Date of 1981 Amendment

    Section 1001 of Pub. L. 97-98 provided that the amendment made by 
that section is effective beginning with 1982 crops.


                    Effective Date of 1980 Amendment

    Section 203(b) of Pub. L. 96-494 provided that: ``Subsection (a) of 
this section [amending this section] shall become effective October 1, 
1980, and any producers who, prior to such date, receive loans on the 
1980 crop of the commodity as computed under the Agricultural Act of 
1949, as [see Short Title note set out under section 1421 of this title] 
amended prior to the enactment of this Act [see Short Title note set out 
under section 4001 of this title], may elect after September 30, 1980, 
to receive loans as authorized under subsection (a) of this section.''
    Amendment by sections 204 and 205 of Pub. L. 96-494 effective Dec. 
3, 1980, see section 213 of Pub. L. 96-494, set out as an Effective Date 
note under section 4001 of this title.


                             Effective Date

    Section effective Oct. 1, 1977, see section 1901 of Pub. L. 95-113, 
set out as an Effective Date of 1977 Amendment note under section 1307 
of this title.


                       Inapplicability of Section

    Section inapplicable to 1996 through 2002 crops of loan commodities, 
peanuts, and sugar and inapplicable to milk during period beginning Apr. 
4, 1996, and ending Dec. 31, 2002, see section 7301(b)(1)(E) of this 
title.


                    Comparability of Storage Payments

    Section 1124 of Pub. L. 101-624, as amended by Pub. L. 102-237, 
title I, Sec. 114(a)(1), Dec. 13, 1991, 105 Stat. 1838, provided that: 
``In making storage payments to producers under section 110 of the 
Agricultural Act of 1949 (7 U.S.C. 1445e) and to commercial warehousemen 
in accordance with the Commodity Credit Corporation Charter Act (15 
U.S.C. 714 et seq.), the Commodity Credit Corporation and the Secretary 
of Agriculture shall, to the extent practicable, ensure that the rates 
of the storage payments made to producers are equivalent to average 
rates paid for commercial storage, taking into account the current 
demand for storage for commodities, efficiency, location, regulatory 
compliance costs, bonding requirements, and impact of user fees as 
determined by the Secretary, except that the rates paid to producers and 
commercial warehousemen shall be established at rates that will result 
in no increase in current or projected combined outlays of the Commodity 
Credit Corporation for the storage payments made to producers and 
commercial warehousemen as a result of the adjustment of storage rates 
under this section.''


                   Repayment of Loans Without Penalty

    Section 303(a) of Pub. L. 100-387 provided that: ``Effective for the 
1988 marketing year for wheat or feed grains, once the market price 
described in clause (5) of the third sentence of subsection (b) of 
section 110 of the Agricultural Act of 1949 (7 U.S.C. 1445e) has been 
reached at any time during such marketing year with respect to such 
commodity, producers may repay loans made under section 110 for such 
commodity during the remainder of such marketing year without the 
payment of a penalty, regardless of the then current market price.''

                  Section Referred to in Other Sections

    This section is referred to in sections 1308a, 1427, 1445k, 4001, 
4002, 7301 of this title.
