< Back to H.R. 4033 (108th Congress, 2003–2004)

Text of the Fair and Equitable Tobacco Reform Act of 2004

This bill was introduced on March 25, 2004, in a previous session of Congress, but was not enacted. The text of the bill below is as of Mar 25, 2004 (Introduced).

Source: GPO

I

108th CONGRESS

2d Session

H. R. 4033

IN THE HOUSE OF REPRESENTATIVES

March 25, 2004

(for himself, Mr. McIntyre, Mr. Ballance, Mr. Ballenger, Mr. Barrett of South Carolina, Mr. Bishop of Georgia, Mrs. Blackburn, Mr. Boucher, Mr. Brown of South Carolina, Mr. Burns, Mr. Burr, Mr. Chandler, Mr. Collins, Mr. Coble, Mr. Cooper, Mr. Davis of Tennessee, Mr. Gingrey, Mr. Goode, Mr. Gordon, Mr. Hayes, Mr. Isakson, Mr. Jones of North Carolina, Mr. Kingston, Mr. Lewis of Kentucky, Mr. Lucas of Kentucky, Mr. Peterson of Minnesota, Mr. Rogers of Kentucky, Mr. Scott of Georgia, Mr. Tanner, Mr. Taylor of North Carolina, Mr. Turner of Ohio, Mr. Wamp, Mr. Whitfield, Mr. Wilson of South Carolina, and Mr. Boyd) introduced the following bill; which was referred to the Committee on Agriculture

A BILL

To terminate the Federal tobacco quota and price support programs, to require the payment of fair and equitable compensation for tobacco quota holders and active tobacco producers adversely affected by the termination of such programs, and for other purposes.

1.

Short title; table of contents

(a)

Short title

This Act may be cited as the Fair and Equitable Tobacco Reform Act of 2004.

(b)

Table of contents

The table of contents for this Act is as follows:

Sec. 1. Short title; table of contents

Sec. 2. Effective date

Title I—Termination of Federal tobacco quota and price support programs

Sec. 101. Termination of tobacco quota program and related provisions

Sec. 102. Termination of tobacco price support program and related provisions

Sec. 103. Liability

Title II—Transitional payments to tobacco quota holders and active producers of tobacco

Sec. 201. Definitions of active tobacco producer and quota holder

Sec. 202. Payments to tobacco quota holders

Sec. 203. Transition payments for active producers of quota tobacco

Sec. 204. Geographical restrictions on expansion of tobacco production

Sec. 205. Resolution of disputes

Sec. 206. Source of funds for payments

2.

Effective date

This Act and the amendments made by this Act shall apply to the 2005 and subsequent crops of each kind of tobacco.

I

Termination of Federal tobacco quota and price support programs

101.

Termination of tobacco quota program and related provisions

(a)

Marketing quotas

Part I of subtitle B of title III of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1311 et seq.) is repealed.

(b)

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,; and

(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,.

(c)

Declaration of policy

Section 2 of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1282) is amended by striking tobacco,.

(d)

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 (10)—

(A)

by striking subparagraph (B); and

(B)

by redesignating subparagraph (C) as subparagraph (B);

(4)

in paragraph (11)(B), by striking and tobacco;

(5)

in paragraph (12), by striking tobacco,;

(6)

in paragraph (14)—

(A)

in subparagraph (A), by striking (A); and

(B)

by striking subparagraphs (B), (C), and (D);

(7)

by striking paragraph (15);

(8)

in paragraph (16)—

(A)

by striking subparagraph (B); and

(B)

by redesignating subparagraph (C) as subparagraph (B);

(9)

by striking paragraph (17); and

(10)

by redesignating paragraph (16) as paragraph (15).

(e)

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,.

(f)

Administrative provisions

Section 361 of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1361) is amended by striking tobacco,.

(g)

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.

(h)

Regulations

Section 375 of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1375) is amended—

(1)

in subsection (a), by striking peanuts, or tobacco and inserting or peanuts; and

(2)

by striking subsection (c).

(i)

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 cotton, and tobacco and inserting and cotton; and

(2)

by striking subsections (d), (e), and (f).

(j)

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).

(k)

Acreage-poundage quotas

Section 4 of the Act of April 16, 1955 (Public Law 89–12; 7 U.S.C. 1314c note), is repealed.

(l)

Burley tobacco acreage allotments

The Act of July 12, 1952 (7 U.S.C. 1315), is repealed.

(m)

Transfer of allotments

Section 703 of the Food and Agriculture Act of 1965 (7 U.S.C. 1316) is repealed.

(n)

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.

(o)

Tobacco field measurement

Section 1112 of the Omnibus Budget Reconciliation Act of 1987 (Public Law 100–203) is amended by striking subsection (c).

102.

Termination of tobacco price support program and related provisions

(a)

Termination of tobacco price support and no net cost provisions

Sections 106, 106A, and 106B of the Agricultural Act of 1949 (7 U.S.C. 1445, 1445–1, 1445–2) are repealed.

(b)

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 subsections (c), (g), (h), and (i);

(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 subsections (c) and (d), respectively.

(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)

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.

103.

Liability

The amendments made by this title shall not affect the liability of any person under any provision of law so amended with respect to any crop of tobacco planted before the effective date of this Act.

II

Transitional payments to tobacco quota holders and active producers of tobacco

201.

Definitions of active tobacco producer and quota holder

In this title:

(1)

Active tobacco producer

The term active tobacco producer means an owner, operator, landlord, tenant, or sharecropper who, as of the day before the date of the enactment of this Act—

(A)

shared in the risk of producing tobacco on a farm where tobacco was produced pursuant to a tobacco farm marketing quota or farm acreage allotment established under part I of subtitle B of title III of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1311 et seq.), as in effect on the day before the date of the enactment of this Act; and

(B)

was actively engaged on that farm in the production of tobacco marketed or considered planted.

(2)

Considered planted

The term considered planted means tobacco that was planted, but failed to be produced as a result of a natural disaster, as determined by the Secretary.

(3)

Tobacco quota holder

The term tobacco quota holder means an owner, as of the day before the date of the enactment of this Act, of a tobacco farm marketing quota or a farm acreage allotment established under part I of subtitle B of title III of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1311 et seq.), as in effect on the day before the date of the enactment of this Act.

(4)

Secretary

The term Secretary means the Secretary of Agriculture.

202.

Payments to tobacco quota holders

(a)

Payment required

The Secretary shall make payments to each eligible tobacco quota holder for the termination of tobacco marketing quotas and related price support under title I, which shall constitute full and fair compensation for any losses relating to such termination.

(b)

Eligibility

To be eligible to receive a payment under this section, a person shall submit to the Secretary an application containing such information as the Secretary may require to demonstrate to the satisfaction of the Secretary that the person satisfies the definition of tobacco quota holder. The application shall be submitted within such time, in such form, and in such manner as the Secretary may require.

(c)

Individual base quota level

(1)

In general

The Secretary shall establish a base quota level applicable to each eligible tobacco quota holder identified under subsection (b).

(2)

Poundage quotas

Subject to adjustment under subsection (d), for each kind of tobacco for which the marketing quota is expressed in pounds, the base quota level for each tobacco quota holder shall be equal to the basic tobacco marketing quota under the Agriculture Adjustment Act of 1938 for the marketing year in effect on the date of the enactment of this Act for quota tobacco on the farm owned by the tobacco quota holder.

(3)

Marketing quotas other than poundage quotas

Subject to adjustment under subsection (d), for each kind of tobacco for which there is marketing quota or allotment on an acreage basis, the base quota level for each tobacco quota holder shall be the amount equal to the product obtained by multiplying—

(A)

the basic tobacco farm marketing quota or allotment for the marketing year in effect on the date of the enactment of this Act, as established by the Secretary for quota tobacco on the farm owned by the tobacco quota holder; by

(B)

the average county production yield per acre for the county in which the farm is located for the kind of tobacco for that marketing year.

(d)

Treatment of certain contracts and agreements

(1)

Effect of purchase contract

If there was an agreement for the purchase of all or part of a farm described in subsection (c) as of the date of the enactment of this Act, and the parties to the sale are unable to agree to the disposition of eligibility for payments under this section, the Secretary, taking into account any transfer of quota that has been agreed to, shall provide for the equitable division of the payments among the parties by adjusting the determination of who is the tobacco quota holder with respect to particular pounds of the quota.

(2)

Effect of agreement for permanent quota transfer

If the Secretary determines that there was in existence, as of the day before the date of the enactment of this Act, an agreement for the permanent transfer of quota, but that the transfer was not completed by that date, the Secretary shall consider the tobacco quota holder to be the party to the agreement that, as of that date, was the owner of the farm to which the quota was to be transferred.

(e)

Total payment amounts based on 2002 marketing year

(1)

Calculation of annual payment amount

During fiscal years 2005 through 2009, the Secretary shall make payments to all eligible tobacco quota holders identified under subsection (b) in an annual amount equal to the product obtained by multiplying, for each kind of tobacco for which the marketing quota is expressed in pounds—

(A)

$1.40 per pound; by

(B)

the total tobacco farm marketing quotas established under the Agriculture Adjustment Act of 1938 for the 2002 marketing year for that kind of tobacco.

(2)

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 Secretary shall convert the tobacco farm marketing quotas or allotments established under the Agriculture Adjustment Act of 1938 for the 2002 marketing year for that kind of tobacco to a poundage basis before executing the mathematical equation specified in paragraph (1).

(f)

Individual payment amounts

The annual payment amount for each eligible tobacco quota holder with respect to a kind of tobacco under this section shall bear the same ratio to the amount determined by the Secretary under subsection (e) with respect to that kind of tobacco as the individual base quota level of that eligible tobacco quota holder under subsection (c) with respect to that kind of tobacco bears to the total base quota levels of all eligible tobacco quota holders with respect to that kind of tobacco.

(g)

Death of tobacco quota holder

If a tobacco quota holder 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 tobacco quota holder.

203.

Transition payments for active producers of quota tobacco

(a)

Transition payments required

The Secretary shall make transition payments under this section to eligible active producers of quota tobacco.

(b)

Eligibility

To be eligible to receive a transition payment under this section, a person shall submit to the Secretary an application containing such information as the Secretary may require to demonstrate to the satisfaction of the Secretary that the person satisfies the definition of active producer of quota tobacco. The application shall be submitted within such time, in such form, and in such manner as the Secretary may require.

(c)

Current production base

The Secretary shall establish a production base applicable to each eligible active producer of quota tobacco identified under subsection (b). A producer’s production base shall be equal to the quantity, in pounds, of quota tobacco subject to the basic marketing quota marketed or considered planted by the producer under the Agriculture Adjustment Act of 1938 for the marketing year in effect on the date of the enactment of this Act.

(d)

Total payment amounts based on 2002 marketing year

(1)

Calculation of annual payment amount

During fiscal years 2005 through 2009, the Secretary shall make payments to all eligible active producers of quota tobacco identified under subsection (b) in an annual amount equal to the product obtained by multiplying, for each kind of tobacco for which the marketing quota is expressed in pounds—

(A)

$0.60 per pound; by

(B)

the total tobacco farm marketing quotas established under the Agriculture Adjustment Act of 1938 for the 2002 marketing year for that kind of tobacco.

(2)

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 Secretary shall convert the tobacco farm marketing quotas or allotments established under the Agriculture Adjustment Act of 1938 for the 2002 marketing year for that kind of tobacco to a poundage basis before executing the mathematical equation specified in paragraph (1).

(e)

Individual payment amounts

The annual payment amount for each eligible active producer of quota tobacco identified under subsection (b) with respect to a kind of tobacco under this section shall bear the same ratio to the amount determined by the Secretary under subsection (d) with respect to that kind of tobacco as the individual production base of that eligible active producer under subsection (c) with respect to that kind of tobacco bears to the total production bases determined under that subsection for all eligible active producers of that kind of tobacco.

(f)

Death of tobacco producer

If a 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 tobacco producer.

204.

Geographical restrictions on expansion of tobacco production

(a)

Purpose

The purpose of this section is to provide an orderly economic transition away from the marketing of tobacco based on quotas and price support while also addressing the economic dislocation, and the resulting impact on interstate commerce, that the termination of the tobacco quota and price support programs might cause.

(b)

Penalty applicable to tobacco grown outside traditional tobacco counties

The marketing of tobacco in the 2005 or subsequent marketing years, of a kind of tobacco that was subject to a marketing quota in the 2002 marketing year, shall be subject to a penalty equal to 100 percent of the total amount received on the marketing of the tobacco unless the tobacco was grown in a traditional tobacco county.

(c)

Definitions

In this section:

(1)

The term marketing year means July 1 to June 30 for flue-cured tobacco and October 1 to September 30 for all other kinds of tobacco.

(2)

The term marketing quota in the 2002 marketing year means a quota established for that year pursuant to part I of subtitle B of title III of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1311 et seq.) and related provisions, as in effect for that marketing year.

(3)

The term traditional tobacco county, with respect to a kind of tobacco, means—

(A)

a county in the United States that had 1 or more farms operated by active producers of quota tobacco of that kind of tobacco under a marketing quota in the 2002 marketing year; or

(B)

a county contiguous to a county described in subparagraph (A) for that kind of tobacco.

205.

Resolution of disputes

Any dispute regarding the eligibility of a person to receive a payment under this title, or the amount of the payment, shall be resolved by the county committee established under section 8 of the Soil Conservation and Domestic Allotment Act (16 U.S.C. 590h) for the county or other area in which the farming operation of the person is located.

206.

Source of funds for payments

There is hereby appropriated to the Secretary, from amounts in the general fund of the Treasury, such amounts as the Secretary needs in order to make the payments required by sections 202 and 203, provided such amounts do not exceed amounts received in the Treasury under chapter 52 of the Internal Revenue Code of 1986 (relating to tobacco products and cigarette papers and tubes).