Directs the Corporation to provide: (1) compensation (based upon pounds and base quota level) to eligible tobacco quota holders for loss of tobacco quota asset value; and (2) transition payments (based upon pounds and production base) to eligible active tobacco producers.
Directs the Secretary of Agriculture to forgive specified loans made to tobacco producer-owned cooperative marketing associations, and transfer related inventories to the Commodity Credit Corporation. Transfers related funds held in a No Net Cost Tobacco Fund or No Net Cost Tobacco Account to the Fund.
Directs the Corporation to consider transition payments for other persons involved in tobacco production and marketing.
Amends the Internal Revenue Code to treat: (1) tobacco quota holder compensation as long-term capital gain; and (2) transition payments as ordinary income.
Establishes the Tobacco Production Control Corporation which shall: (1) be responsible for promulgating rules governing the production, marketing, importation, exportation, and consumer quality assurances for each kind of tobacco; (2) establish a system of tobacco production and marketing licensing (sets forth license provisions); (3) determine tobacco base price levels; and (4) conduct a program referendum if requested by a certain number of licensees.
Repeals the Tobacco Control Act and specified other agricultural provisions to terminate tobacco marketing quota and related programs.
[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 986 Introduced in House (IH)]
108th CONGRESS
1st Session
H. R. 986
To replace the existing Federal tobacco program with a federally
chartered corporation to ensure the stability of the price and supply
of domestically produced tobacco, to compensate quota holders for the
loss of tobacco quota asset value, to provide transition assistance for
active tobacco producers, to increase the competitiveness of
domestically produced tobacco, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 27, 2003
Mr. Goode (for himself, Mr. Lewis of Kentucky, and Mr. Jones of North
Carolina) 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 replace the existing Federal tobacco program with a federally
chartered corporation to ensure the stability of the price and supply
of domestically produced tobacco, to compensate quota holders for the
loss of tobacco quota asset value, to provide transition assistance for
active tobacco producers, to increase the competitiveness of
domestically produced tobacco, 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. Transition payments for other persons involved in tobacco
production and marketing.
Sec. 205. Tax treatment of compensation and transition payments.
TITLE III--ESTABLISHMENT OF PRIVATE TOBACCO PRODUCTION ADJUSTMENT AND
QUALITY ASSURANCE PROGRAMS
Sec. 301. Establishment and duties of Tobacco Production Control
Corporation.
Sec. 302. Board of directors of Corporation.
Sec. 303. Board meetings.
Sec. 304. Staff.
Sec. 305. General powers of Corporation.
Sec. 306. Corporation relationship with tobacco loan associations.
Sec. 307. Tobacco base price levels.
Sec. 308. Penalties.
Sec. 309. Program referenda.
TITLE IV--TERMINATION OF CURRENT TOBACCO PROGRAMS
Sec. 401. Termination of marketing quota programs and repeal of related
provisions.
Sec. 402. Termination of tobacco price support loan and no net cost
provisions and repeal of related
provisions.
Sec. 403. Continued availability of Federal crop insurance.
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 farm marketing quota or
farm acreage allotment established under the
Agricultural Adjustment Act of 1938 (7 U.S.C. 1281 et
seq.) for the 2002 or 2003 crop year; and
(B) planted the crop, or is considered to have
planted the crop under that Act, in 2001, 2002, or
2003.
(2) Association.--The term ``Association'' means a
producer-owned cooperative marketing association.
(3) Corporation.--The term ``Corporation'' means the
Tobacco Production Control Corporation established by section
301.
(4) Quota holder.--The term ``quota holder'' means an
owner, as of January 1, 2003, of a tobacco farm marketing quota
or a farm acreage allotment established under the Agricultural
Adjustment Act of 1938 (7 U.S.C. 1281 et seq.) for the 2002
marketing year.
(5) Secretary.--The term ``Secretary'' means the Secretary
of Agriculture.
(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--
(1) to terminate the existing Federal tobacco program and
establish federally chartered corporation to ensure the
stability of the price and supply of domestically produced
tobacco;
(2) to compensate quota holders for the loss of tobacco
quota asset value as a result of the termination of the
existing Federal tobacco program;
(3) to provide transition assistance to active tobacco
producers; and
(4) to make domestically produced tobacco more competitive
with tobacco produced in other countries by reducing the
operating costs of tobacco producers through the elimination of
expenses associated with buying or leasing tobacco quota.
TITLE I--TOBACCO COMMUNITY REVITALIZATION TRUST FUND
SEC. 101. TOBACCO COMMUNITY REVITALIZATION TRUST FUND.
(a) In General.--
(1) Establishment.--There is established in the Treasury of
the United States a trust fund to be known as the ``Tobacco
Community Revitalization Trust Fund''.
(2) Contents.--The Trust Fund shall consist of such amounts
as may be appropriated or credited to the Trust Fund, including
funds held in a No Net Cost Tobacco Fund or No Net Cost Tobacco
Account that are transferred to the Trust Fund under section
203(c).
(b) Administration.--The Trust Fund shall be administered by the
Tobacco Production Control Corporation.
(c) 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 the Commodity Credit
Corporation under section 203;
(4) the costs of making transition payments to other
persons directly involved in tobacco production and marketing
under section 204;
(5) 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; and
(6) the costs to the Secretary and the Corporation of
enforcing title III.
TITLE II--TOBACCO MARKET TRANSITION ASSISTANCE
SEC. 201. COMPENSATION TO QUOTA HOLDERS FOR LOSS OF TOBACCO QUOTA ASSET
VALUE.
(a) Payment Authority.--Using amounts in the Trust Fund, 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, 2003.
(c) Base Quota Level.--
(1) In general.--For each eligible quota holder that
submits an application under subsection (b), the Secretary
shall determine and provide to the Corporation the base quota
level of the quota holder.
(2) Level.--For each kind of tobacco for which the
marketing quota is expressed in pounds, the base quota level
for a quota holder shall be equal to, at the election of the
quota holder--
(A) the tobacco farm marketing quota established
under the Agriculture Adjustment Act of 1938 for the
2002 marketing year for quota tobacco on the farm owned
by the quota holder; or
(B) the average of the tobacco farm marketing quota
established under the Agriculture Adjustment Act of
1938 for the 1997, 1998, and 1999 marketing years for
quota tobacco on the farm owned by the quota holder.
(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
eligible 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 tobacco farm marketing quota or allotment
established under the Agriculture Adjustment Act of
1938 for the 2002 marketing year (or, at the election
of the quota holder, the average of the tobacco farm
marketing quota or allotment established under such for
the 1997, 1998, and 1999 marketing years, for the quota
holder's farm; by
(B) the average yield per acre for the quota
holder's farm for the kind of tobacco for that
marketing year or those marketing years, whichever
applies.
(d) Payment Amount.--The Corporation shall make payments to each
eligible quota holder in a total amount 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).
(e) Time for Payment.--The amount determined under subsection (d)
for a quota holder shall be paid in five equal installments during each
of the 2003 through 2007 crops of tobacco.
SEC. 202. TRANSITION PAYMENTS FOR ACTIVE TOBACCO PRODUCERS.
(a) Payment Authority.--Using amounts in the Trust Fund, 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 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 planted, or is considered to have planted, a 2001, 2002, or
2003 crop of tobacco.
(c) Payment Quantity.--
(1) In general.--For each eligible active tobacco producer
that submits an application under subsection (b), the Secretary
shall determine and provide to the Corporation, the production
quantity of the producer eligible for payments under this
section.
(2) Eligible production quantity.--The production quantity
eligible for payment for an active tobacco producer shall be
equal to, at the election of the active tobacco producer--
(A) the quantity, in pounds, of quota tobacco
subject to the quota produced by the producer under the
Agriculture Adjustment Act of 1938 for the 2002
marketing year; or
(B) the average quantity, in pounds, of quota
tobacco subject to the quota produced by the producer
under the Agriculture Adjustment Act of 1938 for the
1997, 1998, and 1999 marketing years.
(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 equal to,
at the election of the active tobacco producer--
(A) the actual pounds marketed for the 2002 crop
year; or
(B) the average of the actual pounds marketed for
the 1997, 1998, and 1999 crop years.
(d) Payment Amount.--The Corporation shall make payments to each
active tobacco producer in a total amount equal to the product obtained
by multiplying--
(1) $4 per pound; by
(2) the production base established for the active producer
under subsection (c).
(e) Time for Payment.--The amount determined under subsection (d)
for an active tobacco producer shall be paid in five equal installments
during each of the 2003 through 2007 crops of tobacco.
(f) 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 one 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 the Commodity Credit Corporation 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 day before the date of
enactment of this Act shall be transferred to the Trust Fund.
SEC. 204. TRANSITION PAYMENTS FOR OTHER PERSONS INVOLVED IN TOBACCO
PRODUCTION AND MARKETING.
(a) Payments for Other Persons.--The Corporation shall consider the
feasibility of making transition payments to tobacco graders,
inspectors, checkers, auctioneers, equipment dealers, warehousemen, and
other persons who are adversely and directly affected by the
termination of the Federal tobacco program.
(b) Rules.--Payment amounts under this section shall be established
by and made according to the rules issued by the Corporation.
SEC. 205. TAX TREATMENT OF 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 new
section:
``SEC. 91. TOBACCO QUOTA HOLDER COMPENSATION AND TRANSITION PAYMENTS.
``(a) Compensation to Quota Holders for Loss of Tobacco Quota Asset
Value.--Any amount received under section 201 of the Tobacco Market
Transition Act shall be treated as gain from the sale of a capital
asset held for more than 1 year.
``(b) Transition Payments for Active Tobacco Producers.--Any amount
received under section 202 of such Act shall be included in gross
income as ordinary income.''
(b) Clerical Amendment.--The table of sections for part II of
subchapter B of chapter 1 of such Code is amended by adding at the end
the following new item:
``Sec. 91. Tobacco quota holder
compensation and transition
payments.''
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2002.
TITLE III--ESTABLISHMENT OF PRIVATE TOBACCO PRODUCTION ADJUSTMENT AND
QUALITY ASSURANCE PROGRAM
SEC. 301. ESTABLISHMENT AND DUTIES OF 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.--
(1) In general.--Effective for the 2003 and each subsequent
crop of each kind of tobacco, the Corporation shall be
responsible for the promulgation of rules governing the
production, marketing, importation, exportation, and consumer
quality assurances for each kind of tobacco.
(2) Majority vote required.--The promulgation of rules
under this section and other decisions of the Corporation under
this section shall require at least a majority vote of the
Board of Directors of the Corporation.
(c) Production and Marketing Licenses.--
(1) In general.--The Corporation shall establish a
licensing system that provides for the orderly production and
marketing of tobacco in the United States. The Corporation
shall issue marketing licenses to tobacco marketing facilities
and tobacco purchasing entities.
(2) Initial license.--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
active tobacco producer under section 202(c).
(3) Subsequent crop years.--The Corporation shall establish
the amount that each licensee may market for each subsequent
year based on the production level recommended by the Secretary
for that year, which shall be based on the information
collected under section 320A of the Agricultural Adjustment Act
of 1938 (7 U.S.C. 1314g), and the licensee's production
quantity for the preceding year.
(4) Surrender.--The licensee shall surrender the license to
the Corporation if the licensee fails to actively engage in the
production of tobacco.
(5) Prohibitions.--
(A) Marketing without license.--The sale or
marketing of a type of tobacco which prior to the date
of enactment of this Act 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.
(B) Transfer of license.--The sale, lease, or other
transfer of a license shall be prohibited except
pursuant to subsection (h).
(d) Compliance.--The Corporation shall 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.
(e) Quality Assurance.--The Corporation shall 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--
(1) provides for the inspection and grading of domestically
produced tobacco and imported tobacco;
(2) determines and describes the physical characteristics
of domestically produced tobacco and imported tobacco; and
(3) ensures the physical and chemical integrity of
domestically produced tobacco and imported tobacco;
(f) Methods To Carry Out Duties.--To carry out its duties,
functions, and determinations, the Corporation shall utilize
Associations and local committees to the extent practicable and
appropriate.
(g) Transition.--The Corporation shall 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 the Corporation promulgates rules under subsection
(b).
(h) Transfer of License.--
(1) Right of survivorship.--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 person.
(2) 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.
(3) 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.
SEC. 302. BOARD OF DIRECTORS OF CORPORATION.
(a) In General.--The powers of the Corporation shall be vested in a
Board of Directors.
(b) Members.--The Board of Directors shall consist of 25 members as
follows:
(1) The Secretary of Agriculture.
(2) The Secretary of Agriculture shall appoint--
(A) two members from each State that produces more
than 250,000,000 pounds of tobacco;
(B) one member from each State that produces more
than 50,000,000 pounds, but less than 250,000,000
pounds, of tobacco; and
(C) one member, to be appointed on a rotating
basis, from a State that produces less than 50,000,000
pounds of tobacco.
(3) Three members appointed by Flue-cured tobacco
associations and two members appointed by Burley tobacco
associations.
(4) One member appointed by tobacco associations other than
those specified in paragraph (3), on a rotating basis.
(5) The Secretary of Health and Human Services shall
appoint three members representing public health interests.
(6) The Secretary of Agriculture shall appoint four members
representing domestic tobacco product manufacturers, except
that--
(A) no manufacturer may have more than one member
on the Board;
(B) at least one of the members must be from a
domestic smokeless tobacco manufacturer; and
(C) one of the members must be from a domestic
cigarette manufacturer that comprises less than 5
percent of domestic cigarette sales, or a cigar
manufacturer, or a pipe tobacco manufacturer, on a
rotating basis.
(7) The Secretary of Agriculture shall appoint one member
representing domestic export leaf dealers.
(8) The Secretary of Agriculture shall appoint one member
that is the person responsible for operating the quality
assurance system of the Corporation described in section
301(e).
(c) Membership Qualifications.--A member of the Board shall not
hold any Federal, State, or local elected office. The members appointed
under paragraphs (2), (3), and (4) of subsection (b) must be licensees
under section 301.
(d) Chairpersons.--The Secretary of Agriculture shall serve as
chairperson of the Board.
(e) Term; Vacancies.--
(1) Term.--The term of office of a member of the Board
appointed under any of paragraphs (2) through (8) of subsection
(b) shall be four years.
(2) Vacancies.--A vacancy on the Board shall be filled in
the same manner as the original appointment was made.
(f) Compensation.--
(1) 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.
(2) 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.
(3) 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.
(4) Representation.--No member of the Board shall receive
compensation from more than one interest represented on the
Board.
(g) Conflict of Interest.--
(1) Conflict of interest.--Except as provided in paragraph
(3), 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, 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.
(2) Violations.--Violation of paragraph (1) 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.
(3) Exceptions.--The prohibitions contained in paragraph
(1) 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.
(h) 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).
SEC. 303. BOARD MEETINGS.
(a) In General.--The Board shall meet at least three 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.
SEC. 304. STAFF.
(a) Executive Director.--
(1) Appointment.--The Board shall appoint an Executive
Director.
(2) 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.
(3) 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.
(b) 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.
(c) Other 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. The
Corporation shall indemnify such personnel, as the Board considers
necessary and desirable, except that an officer, attorney, or employee
of the Corporation shall not be indemnified for an act outside the
scope of employment.
(d) Consultant and Intermittent Services.--The Corporation 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.
(e) Committees.--The Corporation may provide for and designate such
committees, and the functions of the committees, as the Board considers
necessary or desirable.
SEC. 305. GENERAL POWERS OF CORPORATION.
(a) 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 and adopt and alter a corporate seal,
which shall be judicially noticed.
(b) Corporation Name.--The Corporation shall have succession in its
corporate name.
(c) Agreement and Contract Authority.--The Corporation may enter
into any agreement or contract with a person or private or governmental
agency.
(d) Acquisition and Disposal Authority.--The Corporation 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. The
Corporation may sell assets, loans, and equity interests acquired in
connection with the financing of projects funded by the Corporation.
(e) Legal Actions.--The Corporation may sue and be sued in the
corporate name of the Corporation and may independently retain legal
representation, except that--
(1) no attachment, injunction, garnishment, or similar
process shall be issued against the Corporation or property of
the Corporation; and
(2) 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.
(f) Assistance of Federal Agencies.--The Corporation 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 the duties of the Corporation, and pay for
the use, which payments shall be transferred to the applicable
appropriation account that incurred the expense.
(g) Rights, Privileges, and Immunities.--The Corporation 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.
(h) Financial Authorities.--The Corporation may collect or
compromise any obligations assigned to or held by the Corporation,
including any legal or equitable rights accruing to the Corporation,
and 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. The Corporation may make final and conclusive settlement
and adjustment of any claim by or against the Corporation or a fiscal
officer of the Corporation.
(i) Other Powers.--The Corporation 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. 306. CORPORATION RELATIONSHIP WITH TOBACCO LOAN ASSOCIATIONS.
The Corporation shall enter into an agreement with producer-owned
cooperative marketing loan associations for each kind of tobacco--
(1) to make a base price available to producers of the kind
of tobacco;
(2) arrange for financing and the administration of a base
price for the kind of tobacco; and
(3) receive, process, store, and sell any domestically
produced tobacco received as collateral for a base price loan.
SEC. 307. TOBACCO BASE PRICE LEVELS.
(a) Determination.--The Corporation, in consultation with the
Secretary and the Associations, shall determine, and revise as
necessary, a base price for each kind of tobacco, which shall be based
on the cost of producing that kind of tobacco.
(b) Effective Date.--The base prices determined under subsection
(a) shall take effect beginning with the 2004 tobacco crops.
SEC. 308. 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 100 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) Handler.--If the tobacco is marketed by the producer
through a handler, the penalty shall be paid by the handler,
which 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. 309. PROGRAM REFERENDA.
(a) Initial Referendum.--
(1) Referendum required.--After the end of the three-year
period beginning on the date of enactment of this Act, if at
least one-third of the licensees engaged in the production of a
kind of tobacco request a referendum under this subsection, the
Corporation shall conduct a referendum among the licensees
engaged in the production of that kind of tobacco to determine
whether the licensees are in favor of continuing the operation
of the program established under this Act with respect to that
kind of tobacco.
(2) Process and results.--If more than one-half of the
licensees voting in a referendum conducted under paragraph (1)
with respect to a kind of tobacco oppose the continuation of
the program, the Corporation shall announce the result and shall
conduct a second referendum with respect to that kind of tobacco 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 considers appropriate to
determine whether producers are in favor of continuing the program
established under this Act, the use of licenses, limitations on license
transfer, or any other aspect of the program.
TITLE IV--TERMINATION OF CURRENT TOBACCO PROGRAMS
SEC. 401. TERMINATION OF MARKETING QUOTA PROGRAMS AND REPEAL OF RELATED
PROVISIONS.
(a) Tobacco Control Act.--The Act of April 25, 1936 (commonly known
as the Tobacco Control Act; 7 U.S.C. 515-515k), is repealed.
(b) Commodity Handling Orders.--Section 8c(2) of the Agricultural
Adjustment Act (7 U.S.C. 608c(2)), reenacted with amendments by the
Agricultural Marketing Agreement Act of 1937, is amended by striking
``tobacco,''.
(c) Processing Tax.--Section 9(b) of the Agricultural Adjustment
Act (7 U.S.C. 609(b)), reenacted with amendments by the Agricultural
Marketing Agreement Act of 1937, is amended--
(1) in paragraph (2), by striking ``tobacco,''
(2) in paragraph (6)(B)(i), by striking ``, or, in the case
of tobacco, is less than the fair exchange value by not more
than 10 per centum,''.
(d) Burley Tobacco Import Review.--Section 3 of Public Law 98-59 (7
U.S.C. 625) is repealed.
(e) Declaration of Policy.--Section 2 of the Agricultural
Adjustment Act of 1938 (7 U.S.C. 1282) is amended by striking
``tobacco,''.
(f) Definitions.--Section 301(b) of the Agricultural Adjustment Act
of 1938 (7 U.S.C. 1301(b)) is amended--
(1) in paragraph (3)--
(A) by striking subparagraph (C); and
(B) by redesignating subparagraph (D) as
subparagraph (C);
(2) in paragraph (6)(A), by striking ``tobacco,'';
(3) in paragraph (7), by striking the following:
``Tobacco (flue-cured), July 1-June 30;
Tobacco (other than flue-cured), October 1-September 30);''
(4) in paragraph (10)--
(A) by striking subparagraph (B); and
(B) by redesignating subparagraph (C) as
subparagraph (B);
(5) in paragraph (11)(B), by striking ``and tobacco'';
(6) in paragraph (12), by striking ``tobacco,'';
(7) in paragraph (14)--
(A) by striking ``(A)'' in subparagraph (A); and
(B) by striking subparagraphs (B), (C), and (D);
(8) by striking paragraph (15);
(9) in paragraph (16)--
(A) by striking subparagraph (B); and
(B) by redesignating subparagraph (C) as
subparagraph (B);
(10) by striking paragraph (17); and
(11) by redesignating paragraph (16) as paragraph (15).
(g) Parity Payments.--Section 303 of the Agricultural Adjustment
Act of 1938 (7 U.S.C. 1303) is amended in the first sentence by
striking ``rice, or tobacco'' and inserting ``or rice''.
(h) Marketing Quotas.--
(1) Repeal.--Except for the section referred to in
paragraph (2), part I of subtitle B of title III of the
Agricultural Adjustment Act of 1938 (7 U.S.C. 1311 et seq.) is
repealed.
(2) Submission of manufacturer purchase intentions.--
Section 320A of the Agricultural Adjustment Act of 1938 (7
U.S.C. 1314g) is not repealed, but subsection (a)(1) of such
section is amended to read as follows:
``(1) Not later than December 1 of each marketing year with respect
to Flue-cured tobacco, and January 15 of each marketing year with
respect to Burley tobacco or other types of tobacco, each domestic
manufacturer of cigarettes shall submit to the Secretary a statement,
by kind, of the quantity of Flue-cured tobacco, Burley tobacco, and
other types of tobacco that the manufacturer intends to purchase,
directly or indirectly, on the United States auction markets or from
producers during the next succeeding marketing year (in this section
referred to as the `quantity of intended purchases').''.
(i) Administrative Provisions.--Section 361 of the Agricultural
Adjustment Act of 1938 (7 U.S.C. 1361) is amended by striking
``tobacco,''.
(j) Adjustment of Quotas.--Section 371 of the Agricultural
Adjustment Act of 1938 (7 U.S.C. 1371) is amended--
(1) in the first sentence of subsection (a) by striking ``,
rice, or tobacco'' and inserting ``or rice''; and
(2) in the first sentence of subsection (b), by striking
``, rice, or tobacco'' and inserting ``or rice''.
(k) Reports and Records.--Section 373 of the Agricultural
Adjustment Act of 1938 (7 U.S.C. 1373) is amended--
(1) by striking ``rice, or tobacco'' each place it appears
in subsections (a) and (b) and inserting ``or rice''; and
(2) in subsection (a)--
(A) in the first sentence by striking ``all persons
engaged in the business of redrying, prizing, or
stemming tobacco for producers,''; and
(B) in the last sentence by striking ``$500'' and
all that follows through the period at the end of the
sentence and inserting ``$500.''.
(l) Regulations.--Section 375(a) of the Agricultural Adjustment Act
of 1938 (7 U.S.C. 1375(a)) is amended by striking ``peanuts, or
tobacco'' and inserting ``or peanuts''.
(m) Eminent Domain.--Section 378 of the Agricultural Adjustment Act
of 1938 (7 U.S.C. 1378) is amended--
(1) in the first sentence of subsection (c) by striking
``and tobacco''; and
(2) by striking subsections (d), (e), and (f).
(n) Burley Tobacco Farm Reconstitution.--Section 379 of the
Agricultural Adjustment Act of 1938 (7 U.S.C. 1379) is amended--
(1) in subsection (a)--
(A) by striking ``(a)''; and
(B) in paragraph (6) by striking ``, but this
clause (6) shall not be applicable in the case of
burley tobacco''; and
(2) by striking subsections (b) and (c).
(o) Acreage-Poundage Quotas.--Section 4 of the Act of April 16,
1955 (Public Law 89-12; 7 U.S.C. 1314c note), is repealed.
(p) Burley Tobacco Acreage Allotments.--The Act of July 12, 1952 (7
U.S.C. 1315), is repealed.
(q) Transfer of Allotments.--Section 703 of the Food and
Agriculture Act of 1965 (7 U.S.C. 1316) is repealed.
(r) Advance Recourse Loans.--Section 13(a)(2)(B) of the Food
Security Improvements Act of 1986 (7 U.S.C. 1433c-1(a)(2)(B)) is
amended by striking ``tobacco and''.
(s) Tobacco Field Measurement.--Section 1112 of the Omnibus Budget
Reconciliation Act of 1987 (Public Law 100-203) is amended by striking
subsection (c).
(t) Liability.--The amendments made by this section shall not
affect the liability of any person under any provision of law in effect
before the amendments take effect as provided under subsection (u).
(u) Application of Amendments.--The amendments made by this section
shall apply with respect to the 2004 and subsequent tobacco crops.
SEC. 402. TERMINATION OF TOBACCO PRICE SUPPORT LOAN AND NO NET COST
PROVISIONS AND REPEAL OF RELATED PROVISIONS.
(a) Parity Price Support.--Section 101 of the Agricultural Act of
1949 (7 U.S.C. 1441) is amended--
(1) in the first sentence of subsection (a), by striking
``tobacco (except as otherwise provided herein), corn'' and
inserting ``corn'';
(2) by striking subsection (c);
(3) in subsection (d)(3)--
(A) by striking ``, except tobacco,''; and
(B) by striking ``and no price support shall be
made available for any crop of tobacco for which
marketing quotas have been disapproved by producers;'';
and
(4) by redesignating subsections (d) and (e) as subsection
(c) and (d), respectively.
(b) Termination of Tobacco Price Support and No Net Cost
Provisions.--Sections 106, 106A, 106B, and 106C of the Agricultural Act
of 1949 (7 U.S.C. 1445, 1445-1, 1445-2, 1445-3) are repealed.
(c) Definition of Basic Agricultural Commodity.--Section 408(c) of
the Agricultural Act of 1949 (7 U.S.C. 1428(c)) is amended by striking
``tobacco,''.
(d) Review of Burley Tobacco Imports.--Section 3 of Public Law 98-
59 (7 U.S.C. 625) is repealed.
(e) Powers of Commodity Credit Corporation.--Section 5 of the
Commodity Credit Corporation Charter Act (15 U.S.C. 714c) is amended by
inserting ``(other than tobacco)'' after ``agricultural commodities''
each place it appears.
(f) Transition Provisions.--
(1) Price support loan obligations.--The amendments made by
this section shall not affect any person's obligations that
arise under or with respect to the price support loan program
or loans issued through such program under any provision of law
in effect before the amendments take effect as provided under
subsection (g).
(2) Tobacco stocks and loans.--The Secretary of Agriculture
shall issue regulations that require--
(A) the orderly disposition of quota tobacco held
by any producer-owned cooperative marketing association
that has entered into a loan agreement with the
Commodity Credit Corporation to make price support
available to producers of quota tobacco;
(B) the repayment of all tobacco price support
loans or surrender of collateral by such associations
not later than one year after this section becomes
effective.
(3) Special rules for termination of no net cost funds and
accounts.--Notwithstanding any other provision of law, upon the
repeal by subsection (b) of the authorities in section 106A and
106B of the Agricultural Act of 1949 for the establishment of
tobacco no net cost funds and accounts, respectively--
(A) any obligation of a tobacco producer,
purchaser, or importer to make payments into any such
fund or account also shall terminate; and
(B) any monies in any such fund or account shall be
disposed of in the manner prescribed by the Secretary
of Agriculture, except that--
(i) to the extent needed, such monies shall
be applied or used for the purposes therefor
prescribed by such sections; and
(ii) if any monies remain, the Secretary
shall transfer such monies to the Secretary of
Health and Human Services for use in accordance
with section 402.
(g) Application of Amendments.--This section and the amendments
made by this section shall apply with respect to the 2004 and
subsequent tobacco crops.
SEC. 403. CONTINUED AVAILABILITY OF FEDERAL CROP INSURANCE.
Nothing in this title shall be construed to affect the eligibility
of tobacco producers to obtain crop insurance for their crops pursuant
to the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.) under the
terms of such Act.
<all>
Introduced in House
Introduced in House
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 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 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 the Subcommittee on Specialty Crops and Foreign Agriculture Programs.
Llama 3.2 · runs locally in your browser
Ask anything about this bill. The AI reads the full text to answer.
Enter to send · Shift+Enter for new line