TABLE OF CONTENTS:
Title I: Tobacco Community Revitalization Trust Fund
Title II: Tobacco Market Transition Assistance
Title III: Establishment of Private Tobacco Production
Adjustment and Quality Assurance Programs
Tobacco Market Transition Act - Title I: Tobacco Community Revitalization Trust Fund - Establishes in the Treasury the Tobacco Community Revitalization Trust Fund which shall make expenditures available for specified compensation, transition, and related assistance to tobacco producers. Authorizes appropriations (as repayable advances).
Title II: Tobacco Market Transition Assistance - Directs the Tobacco Production Control Corporation (Corporation) (established by this Act) to temporarily: (1) compensate eligible quota tobacco holders for loss of tobacco quota asset value; and (2) make transition payments to eligible active tobacco producers. Sets forth payment provisions.
(Sec. 203) Directs the Secretary of Agriculture to: (1) forgive specified loans to tobacco loan associations; and (2) transfer to such associations appropriate loan inventory titles and no net cost tobacco funds.
(Sec. 204) Directs the Corporation to provide grants to eligible political subdivisions for tobacco community economic development activities.
(Sec. 205) Directs the Corporation to make transition payments to tobacco warehousemen and consider making payments to certain other persons adversely affected by the dismantling of the Federal tobacco program or tobacco settlement legislation.
(Sec. 206) Amends the Internal Revenue Code to treat amounts received for loss of quota asset value as long-term capital gain income and active producer transition payments as regular income unless: (1) used for qualified debt repayment; or (2) transferred to a tobacco farmer individual retirement account (as provided for by this Act).
Title III: Establishment of Private Tobacco Production Adjustment and Quality Assurance Program - Establishes the Tobacco Production Control Corporation which shall: (1) establish a licensing system for tobacco production and marketing; and (2) enter into agrements with tobacco loan associations to administer licensing, price support, and marketing activities.
(Sec. 303) Sets forth tobacco price support levels and penalty provisions.
[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3437 Introduced in House (IH)]
105th CONGRESS
2d Session
H. R. 3437
To provide market transition assistance for quota holders, active
tobacco producers, and tobacco-growing counties, to authorize a private
Tobacco Production Control Corporation and tobacco loan associations to
control the production and marketing and ensure the quality of tobacco
in the United States, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 11, 1998
Mr. Goode (for himself, Mr. Boucher, and Mr. Sisisky) introduced the
following bill; which was referred to the Committee on Agriculture, and
in addition to the Committee on Ways and Means, for a period to be
subsequently determined by the Speaker, in each case for consideration
of such provisions as fall within the jurisdiction of the committee
concerned
_______________________________________________________________________
A BILL
To provide market transition assistance for quota holders, active
tobacco producers, and tobacco-growing counties, to authorize a private
Tobacco Production Control Corporation and tobacco loan associations to
control the production and marketing and ensure the quality of tobacco
in the United States, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Tobacco Market
Transition Act''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. Purposes.
TITLE I--TOBACCO COMMUNITY REVITALIZATION TRUST FUND
Sec. 101. Tobacco Community Revitalization Trust Fund.
TITLE II--TOBACCO MARKET TRANSITION ASSISTANCE
Sec. 201. Compensation to quota holders for loss of tobacco quota asset
value.
Sec. 202. Transition payments for active tobacco producers.
Sec. 203. Tobacco Loan associations.
Sec. 204. Tobacco community economic development grants.
Sec. 205. Transition payments for other persons involved in tobacco
production and marketing and cigarette
manufacture and distribution.
Sec. 206. Tax treatment of compensation and transition payments.
TITLE III--ESTABLISHMENT OF PRIVATE TOBACCO PRODUCTION ADJUSTMENT AND
QUALITY ASSURANCE PROGRAMS
Sec. 301. Tobacco Production Control Corporation.
Sec. 302. Tobacco loan associations.
Sec. 303. Tobacco price support levels.
Sec. 304. Penalties.
Sec. 305. Referenda.
SEC. 2. DEFINITIONS.
In this Act:
(1) Active tobacco producer.--The term ``active tobacco
producer'' means a person that--
(A) is the actual producer, as determined by the
Secretary, of tobacco on a farm where tobacco is
produced pursuant to a tobacco from marketing quota or
farm acreage allotment established under the
Agricultural Adjustment Act of 1938 (7 U.S.C. 1281 et
seq.) for the 1997 crop year; and
(B) planted the crop, or is considered to have
planted the crop under that Act, in 1997.
(2) Quota holder.--The term ``quota holder'' means an owner
of a farm on January 1, 1998 for which a tobacco farm marketing
quota or farm acreage allotment was established under the
Agricultural Adjustment Act of 1938 (7 U.S.C. 1281 et seq.)
(3) Secretary.--The term ``Secretary'' means the Secretary
of Agriculture.
(4) Tobacco loan association.--The term ``Association''
means a producer-owned cooperative marketing association.
(5) Tobacco production control corporation.--The term
``Corporation'' means the Tobacco Production Control
Corporation established by section 301.
(6) Trust fund.--The term ``Trust Fund'' means the Tobacco
Community Revitalization Trust Fund established by section 101.
SEC. 3. PURPOSES.
It is the purpose of this Act to--
(1) dismantle the existing Federal tobacco program and
establish a private program to ensure the stability of the
price and supply of domestically produced tobacco;
(2) compensate quota holders for the value of assets that
may be diminished as a result of this legislation;
(3) provide targeted economic development funds to tobacco
dependent communities for the creation of jobs, training of
individuals, and long-term economic development of the
communities;
(4) reduce the operating costs of tobacco producers by
eliminating expenses associated with buying or leasing tobacco
quota;
(5) make domestically produced tobacco more competitive
with tobacco produced in other countries; and
(6) provide funds for those persons who are adversely and
directly affected by the dismantling of the Federal tobacco
program and the implementation of national tobacco settlement
legislation.
TITLE I--TOBACCO COMMUNITY REVITALIZATION TRUST FUND
SEC. 101. TOBACCO COMMUNITY REVITALIZATION TRUST FUND.
(a) In General.--There is established in the Treasury of the United
States a trust fund to be known as the ``Tobacco Community
Revitalization Trust Fund'', consisting of such amounts as may be
appropriated or credited to the Trust Fund. The Trust Fund shall be
administered by the Corporation.
(b) Transfers to Trust Fund.--There are appropriated and
transferred to the Trust Fund, from amounts made available to the Trust
Fund out of funds allocated through national tobacco settlement
legislation, $3,500,000,000 for each of fiscal years 1999 through 2003
and $265,000,000 for each of fiscal years 2004 through 2023.
(c) Repayable Advances.--
(1) Authorization.--There are authorized to be appropriated
to the Trust Fund, as repayable advances, such sums as may from
time to time be necessary to make expenditures under subsection
(d).
(2) Repayment with interest.--Repayable advances made to
the Trust Fund shall be repaid, and interest on the advances
shall be paid, to the general fund of the Treasury when the
Secretary of the Treasury determines that moneys are available
in the Trust Fund to make the payments.
(3) Rate of interest.--Interest on an advance made under
this subsection shall be at a rate determined by the Secretary
of the Treasury (as of the close of the calendar month
preceding the month in which the advance is made) that is equal
to the current average market yield on outstanding marketable
obligations of the United States with remaining period to
maturity comparable to the anticipated period during which the
advance will be outstanding.
(d) Expenditures From Trust Fund.--Amounts in the Trust Fund shall
be available for making expenditures to defray--
(1) the costs of providing compensation to quota holders
for the loss of tobacco quota asset value under section 201;
(2) the costs of making transition payments to active
tobacco producers under section 202;
(3) the costs of forgiving loans and transferring title to
inventories of tobacco and funds to Associations under section
203;
(4) the costs of making tobacco community economic
development grants under section 204, but not to exceed
$250,000,000 for each of fiscal years 1999 through 2003 and an
amount determined by the Corporation to be appropriate for each
of fiscal years 2004 through 2023;
(5) the costs of making transition payments to tobacco
warehousemen and other persons directly involved in tobacco
production and marketing and cigarette manufacture and
distribution under section 205.
(6) the costs of carrying out the duties of the Corporation
and the Associations, including assuring the quality and
controlling the production and marketing of domestic tobacco
and otherwise carrying out title III;
(7) the costs to the Secretary of enforcing title III;
(8) the costs of providing crop insurance to tobacco
producers; and
(9) any other costs incurred by the Department of
Agriculture associated with tobacco.
TITLE II--TOBACCO MARKET TRANSITION ASSISTANCE
SEC. 201. COMPENSATION TO QUOTA HOLDERS FOR LOSS OF TOBACCO QUOTA ASSET
VALUE.
(a) In General.--The Corporation shall make payments for tobacco
quota to eligible quota holders.
(b) Eligibility.--To be eligible to receive payments under this
section, a quota holder shall prepare and submit to the Corporation an
application at such time, in such manner, and containing such
information as the Corporation may require, including information
sufficient to demonstrate to the satisfaction of the Corporation that
the person was a quota holder on January 1, 1998.
(c) Base Quota Level.--
(1) In general.--The Secretary shall determine, for each
quota holder, the base quota level for the 1995 through 1997
marketing years.
(2) Level.--The base quota level for a quota holder shall
be equal to the average tobacco farm marketing quota
established for the 1995 through 1997 marketing years for the
farm owned by the quota holder on January 1, 1998.
(3) Marketing quotas other than poundage quotas.--For each
kind of tobacco for which there is a marketing quota or
allotment (on an acreage basis), the base quota level for each
quota holder shall be determined in accordance with this
subsection (based on a poundage conversion) in an amount equal
to the product obtained by multiplying--
(A) the average tobacco farm marketing quota or
allotment for the 1995 through 1997 marketing years; by
(B) the average yield per acre for the quota
holder's farm for the kind of tobacco for the marketing
years.
(d) Payments.--The Corporation shall make payments to each quota
holder that is eligible under subsection (b) in 5 equal installments, 1
for each of the 1999 through 2003 crops of tobacco, in an aggregate
amount that is equal to the product obtained by multiplying--
(1) $8 per pound; by
(2) the base quota level established for the quota holder
under subsection (c).
SEC. 202. TRANSITION PAYMENTS FOR ACTIVE TOBACCO PRODUCERS.
(a) In General.--The Corporation shall make transition payments to
eligible active tobacco producers.
(b) Eligibility.--To be eligible to receive payments under this
section, an active tobacco producer shall--
(1) prepare and submit to the Corporation an application at
such time, in such manner, and containing such information as
the Corporation may require, including information sufficient
to make the demonstration required under paragraph (2); and
(2) demonstrate to the satisfaction of the Corporation
that, the person planted, or is considered to have planted, a
1997 crop of tobacco.
(c) Payment Quantity.--
(1) In general.--The Secretary shall determine and provide
to the Corporation, for each active tobacco producer, the
production quantity eligible for payment for the 1995 through
1997 marketing years.
(2) Eligible production quantity.--The production quantity
eligible for payment for an active tobacco producer shall be
equal to the average number of pounds of tobacco quota
established for a farm for the 1995 through 1997 marketing
years for which the producer was the actual producer of the
tobacco on the farm.
(3) Marketing quotas other than poundage quotas.--For each
kind of tobacco for which there is a marketing quota or
allotment (on an acreage basis), the production quantity
eligible for payment for each active tobacco producer shall be
determined in accordance with this subsection (based on a
poundage conversion) in an amount equal to the product obtained
by multiplying--
(A) the average tobacco farm marketing quota or
allotment for the 1995 through 1997 marketing years; by
(B) the average yield per acre for the active
tobacco producer for the kind of tobacco for the
marketing years.
(d) Payments.--The Corporation shall make payments for each of the
1999 through 2003 crops of tobacco to each active tobacco producer that
is eligible under subsection (b) in an amount that is equal to the
product obtained by multiplying--
(1) $0.80 per pound; by
(2) the payment quantity established for the producer under
subsection (c).
(e) Death of Active Tobacco Producer.--If an active tobacco
producer who is entitled to payments under this section dies and is
survived by a spouse or 1 or more dependents, the right to receive the
payments shall transfer to the surviving spouse or, if there is no
surviving spouse, to the estate of the producer.
SEC. 203. TOBACCO LOAN ASSOCIATIONS.
(a) Prior Loans.--The Secretary shall forgive each loan made to an
Association under section 106A or 106B of the Agricultural Act of 1949
(7 U.S.C. 1445 1, 1445 2) that is outstanding on the date of enactment
of this Act.
(b) Transfer of Title for Loan Inventories.--The Secretary shall
transfer to each Association described in subsection (a) the title to
all inventories of tobacco held by the Secretary to secure loans made
to the Association under section 106A or 106B of the Agricultural Act
of 1949 (7 U.S.C. 1445 1, 1445 2).
(c) No Net Cost Tobacco Funds.--Notwithstanding sections 106A(f)
and 106B(g) of the Agricultural Act of 1949 (7 U.S.C. 1445-1(f) and
1445-2(g)), all funds held in a No Net Cost Tobacco Fund or No Net Cost
Tobacco Account on behalf of an Association under section 106A or 106B
of that Act (7 U.S.C. 1445-1, 1445-2) on the date of enactment of this
Act shall be the property of the Association.
SEC. 204. TOBACCO COMMUNITY ECONOMIC DEVELOPMENT GRANTS.
(a) Authority.--The Corporation shall make grants to eligible
tobacco-growing political subdivisions in accordance with this section
to enable the political subdivisions to carry out economic development
activities.
(b) Eligibility.--To be eligible to receive payments under this
section, a political subdivisions in a State shall--
(1) have in excess of $100,000 in gross income from sales
of tobacco produced within the political subdivision during 1
or more of the 1995 through 1997 marketing years, as determined
by the Corporation;
(2) prepare and submit to the Corporation an application at
such time, in such manner, and containing such information as
the Corporation may require, including--
(A) a description of the activities that the
political subdivision will carry out using amounts
received under the grant;
(B) a designation of an appropriate political
subdivision agency to administer amounts received under
the grant;
(C) a description of the steps to be taken to
ensure that the funds are distributed in accordance
with subsection (e); and
(D) an economic development plan, approved by a
regional authority authorized to coordinate economic
development efforts in the region where the political
subdivision is located, or approved by the State if no
such regional authority exists, that describes the
activities that the political subdivision will carry
out using amounts received under the grant. Where a
political subdivision ineligible to receive payments
under subsection (b)(1) is surrounded within the State
by a political subdivision eligible to receive payments
under subsection (b)(1), an economic development plan
shall not be approved unless submitted jointly by both jurisdictions.
(c) Amount of Grant.--
(1) In general.--From the amounts available to carry out
this section for a fiscal year, the Corporation shall allot to
each eligible tobacco-growing political subdivision an amount
that bears the same ratio to the total funds available as the
total income of the tobacco-growing political subdivision
derived from the production of tobacco within the political
subdivision during the 1995 and through 1997 marketing years
(as determined under paragraph (2)) bears to the total income
of all tobacco-growing political subdivisions derived from the
production of tobacco during the 1995 through 1997 marketing
years.
(2) Tobacco income.--For the 1995 through 1997 marketing
years, the Secretary shall determine and provide to the
Corporation the amount of income derived from the production of
tobacco in each tobacco-growing political subdivision and in
all tobacco-growing political subdivisions.
(d) Payments.--
(1) In general.--A tobacco-growing political subdivision
that has an application approved by the Corporation under
subsection (b) shall be entitled to a payment under this
section in an amount that is equal to its allotment under
subsection (c).
(2) Form of payments.--The Corporation may make payments
under this section to a tobacco-growing political subdivision
in installments, and in advance or by way of reimbursement,
with necessary adjustments on account of overpayments or
underpayments, as the Corporation may determine.
(3) Reallotments.--Any portion of the allotment of a
political subdivision under subsection (c) that the Corporation
determines will not be used to carry out this section in
accordance with an approved political subdivision application
required under subsection (b), shall be reallotted by the
Corporation to other tobacco-growing political subdivisions in
proportion to the original allotments to the other tobacco-
growing political subdivisions.
(e) Use and Distribution of Funds.--
(1) In general.--Amounts received by a tobacco-growing
political subdivision under this section shall be used to carry
out economic development activities, including--
(A) activities designed to help create productive
farm or off-farm employment in rural areas to provide a
more viable economic base and enhance opportunities for
improved incomes, living standards, and contributions
by rural individuals to the economic and social
development of tobacco communities;
(B) activities designed to provide training and
transition assistance to quota holders and active
tobacco producers to enable the holders and producers
to produce alternative agricultural commodities or
obtain alternative employment;
(C) activities to improve the quality of education
in tobacco communities;
(D) activities to promote tourism in tobacco
communities through natural resource protection;
(E) activities to construct advanced manufacturing
centers, industrial parks, water and sewer facilities,
and transportation improvements in tobacco communities;
(F) activities to establish small business
incubators in tobacco communities;
(G) activities to install high technology
infrastructure improvements in tobacco communities;
(H) rural business enterprise activities described
in subsections (c) and (e) of section 310B of the
Consolidated Farm and Rural Development Act (7 U.S.C
1932);
(I) downpayment loan assistance programs that are
similar to the program described in section 310E of the
Consolidated Farm and Rural Development Act (7 U.S.C
1935);
(J) activities that expand existing infrastructure,
facilities, and services to capitalize on opportunities
to diversify economies in tobacco communities and that
support the development of new industries or commercial
ventures;
(K) activities by agricultural organizations that
provide assistance directly to quota holders and active
tobacco producers to assist in developing other
agricultural activities that supplement tobacco-
producing activities;
(L) initiatives designed to create or expand
locally owned value-added processing and marketing
operations in tobacco communities; and
(M) technical assistance activities by persons to
support farmer-owned enterprises, or agriculture-based
rural development enterprises, of the type described in
section 252 or 253 of the Trade Act of 1974 (19 U.S.C
2342, 2343).
(2) Maintenance of effort.--The political subdivision and
the State shall provide assurances to the Corporation that
funds provided to the political subdivision under this section
will be used only to supplement, not to supplant, the amount of
Federal, State, and local funds otherwise expended for economic
development activities in the political subdivision.
SEC. 205. TRANSITION PAYMENTS FOR OTHER PERSONS INVOLVED IN TOBACCO
PRODUCTION AND MARKETING AND CIGARETTE MANUFACTURE AND
DISTRIBUTION.
(a) Payments for Warehousemen.--
(1) Payments required.--The Corporation shall make
transition payments to tobacco warehousemen as reimbursement
for the reduced quantities of tobacco to be marketed by
producers through warehousemen as a result of the decrease in
demand for domestically produced tobacco.
(2) Payment basis.--The Corporation shall establish the
amount of the payments to be made to a tobacco warehouseman on
the basis of the average tobacco volume and commissions of the
warehouseman for the 1995 through 1997 marketing years. The
average volume level for a tobacco warehouseman shall be equal
to the average volume of sales of a particular type of tobacco
handled by the tobacco warehouseman on behalf of active tobacco
producers for the 1995 through 1997 marketing years, as
determined using data collected by the Agricultural Marketing
Service of the Department of Agriculture. The average
commission level for a tobacco warehouseman shall be equal to
the average amount of commission and fees imposed by the
tobacco warehouseman for marketing tobacco on behalf of active
tobacco producers for the 1995 through 1997 marketing years, as
determined using data collected by the Agricultural Marketing
Service.
(b) Payments for Other Persons.--The Corporation shall consider the
feasibility of making transition payments to tobacco graders,
inspectors, checkers, auctioneers, equipment dealers, cigarette vending
machine owners or operators, employees of tobacco manufacturing and
leaf dealer firms, and other persons who are adversely and directly
affected by the dismantling of the Federal tobacco program or any
national tobacco settlement legislation.
(c) Rules.--Payment amounts under this section shall be established
by and made according to the rules issued by the Corporation.
(d) Available Funds.--From amounts in the Trust Fund, the
Corporation may expend $300,000,000 per year for five years for
payments under this section.
SEC. 206. TAX TREATMENT OF TOBACCO QUOTA HOLDER COMPENSATION AND
TRANSITION PAYMENTS.
(a) In General.--Part II of subchapter B of chapter 1 of the
Internal Revenue Code of 1986 (relating to items specifically included
in gross income) is amended by adding at the end the following:
``SEC. 91. CERTAIN TOBACCO PROGRAM PAYMENTS.
``(a) General Rule.--Gross income includes amounts received under
section 201 or 202 of the Tobacco Market Transition Act.
``(b) Exception for Amounts Transferred During Reinvestment
period.--
``(1) In general.--Subsection (a) shall not apply to any
amount if during reinvestment period such amount is--
``(A) used to make a qualified debt repayment, or
``(B) transferred to a tobacco farmer individual
retirement account established under section 522.
``(2) Qualified debt repayment.--For purposes of paragraph
(1), the term `qualified debt repayment' means the payment of
debt incurred directly by the taxpayer to produce tobacco prior
to January 1, 1998.
``(c) Character of Income.--For purposes of this subtitle--
``(1) any amount received under section 201 of the Tobacco
Market Assistance Act and included in gross income under this
section shall be treated as long-term capital gain or may be
used to reduce the basis in real estate to which the tobacco
quota is attached, and
``(2) any amount received under section 202 of such Act and
so included in gross income shall be treated as ordinary
income.''.
(b) Tobacco Farmer Individual Retirement Accounts.--Part IV of
subchapter F of chapter 1 of the Internal Revenue Code of 1986
(relating to farmers' cooperatives) is amended by adding at the end the
following:
``SEC. 522. TOBACCO FARMER INDIVIDUAL RETIREMENT ACCOUNTS.
``(a) General Rule.--Except as provided in this section, a tobacco
farmer individual retirement account shall be treated for purposes of
this title in the same manner as an individual retirement plan.
``(b) Definitions and Special Rules.--For purposes of this title--
``(1) Tobacco farmer individual retirement account.--The
term `tobacco farmer individual retirement account' means an
individual retirement plan (as defined in section 7701(a)(37))
other than a Roth IRA which is designated (in such manner as
the Corporation may prescribe) at the time of establishment of
the plan as a tobacco farmer individual retirement account.
``(2) Treatment of contributions.--
``(A) Cash only.--No contribution will be accepted
unless it is in cash.
``(B) Source of contributions.--The only
contributions which will be accepted are--
``(i) payments under section 201 or 202 of
the Tobacco Market Transition Act, and
``(ii) trustee-to-trustee transfers to such
trust from another tobacco farmer individual
retirement account of the account beneficiary.
``(C) No deduction allowed.--No deduction shall be
allowed under section 219 for a contribution to a
tobacco farmer individual retirement account.
``(D) No rollover contributions allowed.--No
rollover contribution may be made to or from a tobacco
farmer individual retirement account.
``(3) Tax treatment of distributions.--Any amount
distributed from a tobacco farmer individual retirement account
attributable to payments made under section 201 or 202 of the
Tobacco Market Transition Act (including earnings thereon)
shall be includible in the gross income of the distributee
under the rules described in section 91(c). Any such
distribution shall be made first from amounts in such account
(if any) attributable to payments under such section 202 (and
earnings thereon).
``(4) Coordination with individual retirement accounts.--
Section 408(d)(2) shall be applied separately with respect to
tobacco farmer individual retirement accounts and other
individual retirement plans.''.
(c) Conforming Amendments.--
(1) The table of sections for part II of subchapter B of
chapter 1 of the Internal Revenue Code of 1986 is amended by
adding at the end the following:
``Sec. 91. Certain tobacco program payments.''.
(2) The table of sections for part IV of subchapter F of
chapter 1 of such Code is amended by adding at the end the
following:
``Sec. 522. Tobacco farmer individual retirement accounts.''.
(3) The heading for part IV of subchapter F of chapter 1 of
such code is amended by striking ``FARMERS' COOPERATIVES'' and
inserting ``CERTAIN FARMER ENTITIES''.
(4) The table of parts for subchapter F of chapter 1 of
such Code is amended by striking ``farmers' cooperatives'' and
inserting ``certain farmer entities''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 1997.
TITLE III--ESTABLISHMENT OF PRIVATE TOBACCO PRODUCTION ADJUSTMENT AND
QUALITY ASSURANCE PROGRAM
SEC. 301. TOBACCO PRODUCTION CONTROL CORPORATION.
(a) Establishment.--There is established a corporation to be known
as the ``Tobacco Production Control Corporation'', which shall be a
federally chartered instrumentality of the United States.
(b) Duties.--Effective for the 1999 and each subsequent crop of
each kind of tobacco, on at least a two-thirds vote of the Board of
Directors of the Corporation, the Corporation shall--
(1) promulgate rules that govern the production, marketing,
importation, exportation, and consumer quality assurances for
each kind of tobacco;
(2) establish a licensing system that provides for the
orderly production and marketing of tobacco in the United
States under which--
(A) the Corporation shall issue a license to each
active tobacco producer, or other person that meets
requirements established by the Corporation, initially
based upon the eligible production quantity determined
for each producer under section 202(c)(1);
(B) the licensee shall surrender the license to the
Corporation if the licensee fails to actively engage in
the production of tobacco;
(C) the sale or marketing of a type of tobacco
which prior to the date of enactment was produced
pursuant to a tobacco farm marketing quota or farm
acreage allotment issued under the Agricultural Act of
1938 is prohibited without a license;
(D) the sale, lease, or other transfer of a license
shall be prohibited except pursuant to subsection (c);
and
(E) the Corporation shall issue marketing licenses
to tobacco marketing facilities and tobacco purchasing
entities;
(3) ensure compliance, through whatever means is available,
of all persons with any license, regulation, rule, limitation,
or guideline issued under, or in order to carry out, this Act;
(4) offer crop insurance for tobacco producers;
(5) establish a system that will provide assurance to
consumers of the quality of all tobacco marketed in the United
States and that, at a minimum--
(A) provides for the inspection and grading of
domestically produced tobacco and imported tobacco;
(B) determines and describes the physical
characteristics of domestically produced tobacco and
imported tobacco;
(C) ensures the physical and chemical integrity of
domestically produced tobacco and imported tobacco;
(6) carry out its duties, functions, and determinations
through loan associations and local committees, to the extent
practicable and appropriate; and
(7) continue to maintain and carry out a tobacco program in
accordance with the rules and regulations contained in chapter
7 of the Code of Federal Regulations unless and until rules are
promulgated under subsection (c).
(c) Transfer of License.--
(1) Right of survivorship.--
(A) In general.--In the case of the death of a
person to whom a license has been issued under this
section, the license shall transfer to the surviving
spouse of the person or, if there is no surviving
spouse, to surviving direct descendants of the persons.
(B) Hardship.--In the case of the death of a person
to whom a license has been issued under this section
and whose descendants are temporarily unable to produce
a crop of tobacco, the Corporation may hold the license
in the name of the descendants for a period of not more
than 18 months, at the discretion of the Corporation.
(2) Lifetime transfer.--A person that is eligible to obtain
a license under this section may at any time transfer all or
part of the license to the person's spouse or direct
descendants that are actively engaged in the production of
tobacco.
(d) Board of Directors.--
(1) In general.--The powers of the Corporation shall be
vested in a Board of Directors.
(2) Members.--The Board of Directors shall consist of 25
members as follows:
(A) The Secretary of Agriculture.
(B) The Secretary of Health and Human Services.
(C) The Administrator of the Environmental
Protection Agency.
(D) The United States Trade Representative.
(E) 1 member from each state that produces more
than 50,000,000 pounds of tobacco. All members
appointed under this subparagraph shall be actively
engaged in the production of tobacco and shall be
elected by the tobacco producers from each respective
state.
(F) 3 members appointed by the flue-cured tobacco
association and 2 members appointed by the burley
tobacco associations, all such members to be licensees
under this Act.
(G) 1 member appointed by tobacco associations
other than those specified in subparagraph (F), on a
rotating basis.
(H) 3 members representing public health interests,
appointed by the Secretary of Health and Human
Services.
(I) 1 member representing domestic cigarette
manufacturers.
(J) 1 member representing domestic export leaf
dealers, appointed by the Leaf Tobacco Exporters
Association (LTEA).
(K) 2 members representing tobacco marketing
facilities, 1 each appointed by the Bright Belt
Warehouse Association (BBWA) and the Burley Auction
Warehouse Association (BAWA).
(L) 1 member that is the person responsible for
operating the quality assurance system of the
Corporation described in subsection (b)(4).
(M) 1 member who is a Dean of Agriculture of a Land
Grant University from a tobacco producing state.
(3) Membership qualifications.--A member of the Board shall
not hold any Federal, State, or local elected office.
(4) Chairpersons.--The Secretary of Agriculture shall serve
as chairperson of the Board.
(5) Executive director.--
(A) Appointment.--The Board shall appoint an
Executive Director.
(B) Duties.--The Executive Director shall be the
chief executive officer of the Corporation, with such
power and authority as may be conferred by the Board.
(C) Compensation.--The Executive Director shall
receive basic pay at the rate provided for level IV of
the Executive Schedule under section 5315 of title 5,
United States Code.
(6) Officers.--The Board shall establish the offices and
appoint the officers of the Corporation, including a Secretary,
and define the duties of the officers in a manner consistent
with this section.
(7) Meetings.--
(A) In general.--The Board shall meet at least 3
times each fiscal year at the call of a Chairperson or
at the request of the Executive Director.
(B) Location.--The location of a meeting shall be
subject to approval of the Executive Director.
(C) Quorum.--A quorum of the Board shall consist of
a majority of the members.
(8) Term; vacancies.--
(A) Term.--The term of office of a member of the
Board appointed under any of subparagraphs (E) through
(K) of paragraph (2) shall be 4 years.
(B) Vacancies.--A vacancy on the Board shall be
filled in the same manner as the original appointment
was made.
(9) Compensation.--
(A) Federal members.--A member of the Board who is
an officer or employee of the United States shall not
receive any additional compensation by reason of
service on the Board.
(B) Non-federal members.--Any other member shall
receive compensation, for each day (including travel
time) that the member is engaged in the performance of
the functions of the Board, at a rate determined
appropriate by the Board.
(C) Expenses.--A member of the Board shall be
reimbursed for travel, subsistence, and other necessary
expenses incurred by the member in the performance of
the duties of the member.
(10) Conflict of interest; financial disclosure.--
(A) Conflict of interest.--Except as provided in
subparagraph (C), a member of the Board shall not vote
on any matter concerning any application, contract, or
claim, or other particular matter pending before the Corporation, in
which, to the knowledge of the member, spouse, or child of the member,
partner of the member, or organization in which the member is serving
as officer, director, trustee, partner, or employee, or any person or
organization with which the member is negotiating or has any
arrangement concerning prospective employment, has a financial
interest.
(B) Violations.--Violation of subparagraph (A) by a
member of the Board shall be cause for removal of the
member, but shall not impair or otherwise affect the
validity of any otherwise lawful action by the
Corporation in which the member participated.
(C) Exceptions.--The prohibitions contained in
subparagraph (A) shall not apply to a member of the
Board that is a tobacco producer if the member advises
the Board of the nature of the particular matter in
which the member proposes to participate, and if the
member makes a full disclosure of the financial
interest, prior to any participation.
(D) Financial disclosure.--A Board member shall be
subject to the financial disclosure requirements of
subchapter B of chapter XVI of title 5, Code of Federal
Regulations (or any corresponding or similar regulation
or ruling), applicable to a special Government employee
(as defined in section 202(a) of title 18, United
States Code).
(E) Representation.--No member of the Board shall
receive compensation from more than one interest
represented on the Board.
(11) Bylaws.--The Board shall adopt, and may from time to
time amend, any bylaw that is necessary for the proper
management and functioning of the Corporation.
(12) Personnel.--The Corporation may select and appoint
officers, attorneys, employees, and agents, who shall be vested
with such powers and duties as the Corporation may determine.
(e) General Powers.--In addition to any other powers granted to the
Corporation under this title, the Corporation--
(1) shall have succession in its corporate name;
(2) may adopt, alter, and rescind any bylaw and adopt and
alter a corporate seal, which shall be judicially noticed;
(3) may enter into any agreement or contract with a person
or private or governmental agency;
(4) may lease, purchase, accept a gift or donation of, or
otherwise acquire, use, own, hold, improve, or otherwise deal
in or with, and sell, convey, mortgage, pledge, lease,
exchange, or otherwise dispose of, any property or interest in
property, as the Corporation considers necessary in the
transaction of the business of the Corporation;
(5) may sue and be sued in the corporate name of the
Corporation, except that--
(A) no attachment, injunction, garnishment, or
similar process shall be issued against the Corporation
or property of the Corporation; and
(B) exclusive original jurisdiction shall reside in
the district courts of the United States, and the
Corporation may intervene in any court in any suit,
action, or proceeding in which the Corporation has an
interest;
(6) may independently retain legal representation;
(7) may provide for and designate such committees, and the
functions of the committees, as the Board considers necessary
or desirable;
(8) may indemnify officers of the Corporation, as the Board
considers necessary and desirable, except that the officers
shall not be indemnified for an act outside the scope of
employment;
(9) may, with the consent of any board, commission,
independent establishment, or executive department of the
Federal Government, including any field service, use
information, services, facilities, officials, and employees in
carrying out this section, and pay for the use, which payments
shall be transferred to the applicable appropriation account
that incurred the expense;
(10) may obtain the services and fix the compensation of
any consultant and otherwise procure temporary and intermittent
services under section 3109(b) of title 5, United States Code;
(11) shall have the rights, privileges, and immunities of
the United States with respect to the right to priority of
payment with respect to debts due from bankrupt, insolvent, or
deceased creditors;
(12) may collect or compromise any obligations assigned to
or held by the Corporation, including any legal or equitable
rights accruing to the Corporation;
(13) shall determine the character of, and necessity for,
obligations and expenditures of the Corporation and the manner
in which the obligations and expenditures shall be incurred,
allowed, and paid, subject to provisions of law specifically
applicable to Government corporations;
(14) may make final and conclusive settlement and
adjustment of any claim by or against the Corporation or a
fiscal officer of the Corporation;
(15) may sell assets, loans, and equity interests acquired
in connection with the financing of projects funded by the
Corporation; and
(16) may exercise all other lawful powers necessarily or
reasonably related to the establishment of the Corporation to
carry out this title and the powers, purposes, functions,
duties, and authorized activities of the Corporation.
SEC. 302. TOBACCO LOAN ASSOCIATIONS.
The Corporation shall enter into an agreement with producer-owned
cooperative marketing loan associations for each kind of tobacco to--
(1) make price support available to producers of the kind
of tobacco;
(2) carry out the licensing system established under
subsection (b)(2);
(3) arrange for financing and the administration of price
supports for the kind of tobacco; and
(4) receive, process, store, and sell any domestically
produced tobacco received as collateral for a price support
loan.
SEC. 303. TOBACCO PRICE SUPPORT LEVELS.
(a) Initial Level.--Effective for the 1999 crop of each kind of
tobacco, the support level in cents per pound established under this
title shall be equal to--
(1) the simple average price received by producers of the
kind of tobacco, as determined by the Corporation, during the
marketing years for the immediately preceding 5 crops of the
kind of tobacco; less
(2) the average return to quota for 1994 through 1998 crops
of the kind of tobacco, as determined by the Corporation.
(b) Subsequent Adjustment.--The Corporation, in consultation with
the Associations, shall adjust and establish the support level for each
kind of tobacco at an appropriate level for each year after 1999.
SEC. 304. PENALTIES.
(a) In General.--The violation of any provision of this Act, or any
rule or regulation issued to carry out this Act, or the terms of any
license issued under this Act, by a person (including the marketing of
any kind of tobacco without a license issued under this title or in
excess of the quantity permitted under such a license) shall subject
the person to revocation or suspension of the person's license, a
penalty of 75 percent of the average market price (calculated to the
nearest whole cent) for the kind of tobacco for the immediately
preceding marketing year, or both, in the discretion of the Secretary.
(b) Payer.--
(1) In general.--Except as otherwise provided in this
subsection, the penalty shall be paid by the person who
acquired the tobacco from the producer.
(2) Deduction from price.--An amount equivalent to the
penalty may be deducted by the buyer from the price paid to the
producer in any case in which the tobacco is marketed by sale.
(3) Warehouseman or agent.--If the tobacco is marketed by
the producer through a warehouseman or other agent, the penalty
shall be paid by the warehouseman or agent who may deduct an
amount equivalent to the penalty from the price paid to the
producer.
(4) Direct marketing outside united states.--In any case in
which tobacco is marketed directly to any person outside the
United States, the penalty shall be paid and remitted by the
producer.
(c) False Statement or Omission.--If any producer falsely
identifies or fails to account for the disposition of any tobacco--
(1) an amount of tobacco equal to the normal yield of the
number of acres harvested in excess of the quantity permitted
under a license issued under this title shall be considered to
have been marketed in excess of the license for the farm; and
(2) the penalty for the excess marketing shall be paid and
remitted by the producer.
(d) Carryover.--Tobacco carried over by the producer of the tobacco
from 1 marketing year to another marketing year may be marketed without
payment of the penalty imposed by this section if--
(1) the total quantity of tobacco available for marketing
from the farm in the marketing year from which the tobacco is
carried over does not exceed the quantity that may be marketed
under a license issued for the farm for the marketing year; or
(2) the quantity of tobacco carried over does not exceed
the normal production of that number of acres by which the
harvested acreage of tobacco in the calendar year in which the
marketing year begins is less than the quantity that may be marketed
under the license.
(e) Tobacco Marketed Prior to Marketing Year.--Tobacco produced in
a calendar year for the marketing year beginning during the calendar
year shall be subject to licenses issued for the marketing year even
though the tobacco is marketed prior to the date on which the marketing
year begins.
(f) Proportional Payments.--The Secretary shall require collection
of the penalty on a proportion of each lot of tobacco marketed from the
farm equal to the proportion that the tobacco available for marketing
from the farm in excess of the quantity that may be marketed under a
license is of the total quantity of tobacco available for marketing
from the farm if satisfactory proof is not furnished as to the
disposition to be made of the excess tobacco prior to the marketing of
any tobacco from the farm.
(g) Lien.--Until the amount of the penalty provided by this section
is paid, a lien on the tobacco with respect to which the penalty is
incurred, and on any subsequent tobacco subject to licenses issued
under this title in which the person liable for payment of the penalty
has an interest, shall be in effect in favor of the Corporation for the
amount of the penalty.
SEC. 305. PROGRAM REFERENDA.
(a) Initial Referendum.--Not later than 3 years after the date of
enactment of this Act, the Corporation shall conduct a referendum among
licensees engaged in the production of each kind of tobacco to
determine whether such producers are in favor of continuing the
operation of the program established under this Act with respect to
that kind of tobacco. If more than one half of the licensees voting
oppose the continuation of the program, the Corporation shall announce
the result and shall conduct a second referendum one year later. If
more than one half of the licensees voting in the second referendum
also oppose the continuation of the program, the Corporation shall
announce the result and the program shall cease to be in effect for
that kind of tobacco.
(b) Subsequent Referenda.--The Corporation may conduct subsequent
referenda from time to time as the Corporation deems appropriate to
determine whether producers are in favor of continuing the program
established under this Act, the use of marketing allotments and quotas,
limitations on transfer of quota, or any other aspect of the program.
(c) Effective Date.--This section shall be effective 1 year after
the date of enactment of this Act.
<all>
Introduced in House
Introduced in House
Referred to House Agriculture
Referred to the Committee on Agriculture, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to House Ways and Means
Referred to the Subcommittee on Risk Management and Specialty Crops.
Executive Comment Requested from USDA.
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