[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4033 Introduced in House (IH)]
108th CONGRESS
2d Session
H. R. 4033
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.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 25, 2004
Mr. Jenkins (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.
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 ``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.
SEC. 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.
TITLE I--TERMINATION OF FEDERAL TOBACCO QUOTA AND PRICE SUPPORT
PROGRAMS
SEC. 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).
SEC. 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.
SEC. 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.
TITLE II--TRANSITIONAL PAYMENTS TO TOBACCO QUOTA HOLDERS AND ACTIVE
PRODUCERS OF TOBACCO
SEC. 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.
SEC. 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.
SEC. 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.
SEC. 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.
SEC. 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.
SEC. 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).
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