Home > 105th Congressional Bills > H.R. 987 (ih) To amend title 31, United States Code, to provide for continuing appropriations in the absence of regular appropriations. ...H.R. 987 (ih) To amend title 31, United States Code, to provide for continuing appropriations in the absence of regular appropriations. ...
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.
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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
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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
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