I

107TH CONGRESS

1ST SESSION H. R. 1658

To eliminate the Federal quota and price support programs for Burley tobacco, to compensate quota holders for the lost quota value, to provide

transition payments to producers of Burley tobacco, and to provide

assistance to communities adversely affected by the elimination of the

quota and price support programs.

IN THE HOUSE OF REPRESENTATIVES

MAY 1, 2001

Mr. HILL introduced the following bill; which was referred to the Committee

on Agriculture

A BILL

To eliminate the Federal quota and price support programs

for Burley tobacco, to compensate quota holders for the

lost quota value, to provide transition payments to producers of Burley tobacco, and to provide assistance to

communities adversely affected by the elimination of the

quota and price support programs.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Burley Buy-out Act of 2001’’.
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1 (b) TABLE OF CONTENTS.—The table of contents of

2 this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I—ELIMINATION OF PRICE SUPPORT AND MARKET

QUOTAS FOR BURLEY TOBACCO

Sec. 101. Burley tobacco price support program.

Sec. 102. Burley tobacco marketing quotas.

TITLE II—COMPENSATION TO QUOTA HOLDERS AND TRANSITION

ASSISTANCE TO PRODUCERS OF BURLEY TOBACCO

Sec. 201. Definitions.

Sec. 202. Compensation to Burley quota holders for loss of tobacco quota asset

value.

Sec. 203. Transition payments for active Burley tobacco producers.

Sec. 204. Commodity Credit Corporation.

TITLE III—ECONOMIC ASSISTANCE FOR BURLEY TOBACCODEPENDENT COMMUNITIES

Sec. 301. Rural economic assistance grants.

Sec. 302. Commodity Credit Corporation.

3 TITLE I—ELIMINATION OF

4 PRICE SUPPORT AND MAR5 KET QUOTAS FOR BURLEY

6 TOBACCO

7 SEC. 101. BURLEY TOBACCO PRICE SUPPORT PROGRAM.

8 Notwithstanding section 106 of the Agricultural Act

9 of 1949 (7 U.S.C. 1445), beginning with the 2002 crop

10 of Burley tobacco, the Secretary of Agriculture shall not

11 make price support available, whether in the form of loans,

12 payments, purchases, or other operations, for any crop of

13 Burley tobacco.

14 SEC. 102. BURLEY TOBACCO MARKETING QUOTAS.

15 Notwithstanding part I of subtitle B of title III of

16 the Agricultural Adjustment Act of 1938 (7 U.S.C. 1311
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1 et seq.), beginning with the 2002 crop of Burley tobacco,

2 the Secretary shall not proclaim a national marketing

3 quota for Burley tobacco or apportion a marketing quota

4 for Burley tobacco among States and farms.

5 TITLE II—COMPENSATION TO

6 QUOTA HOLDERS AND TRAN7 SITION ASSISTANCE TO PRO8 DUCERS OF BURLEY TO9 BACCO

10 SEC. 201. DEFINITIONS.

11 In this title:

12 (1) ACTIVE BURLEY TOBACCO PRODUCER.—The

13 term ‘‘active Burley tobacco producer’’ means a per14 son that was the actual producer, as determined by

15 the Secretary of Agriculture, of Burley tobacco on a

16 farm where Burley tobacco was produced pursuant

17 to a marketing quota established under the Agricul18 tural Adjustment Act of 1938 (7 U.S.C. 1281 et

19 seq.) for at least two of the 1999 through 2001 mar20 keting years.

21 (2) BURLEY QUOTA HOLDER.—The term ‘‘Bur22 ley quota holder’’ means an owner of a farm on Jan23 uary 1, 2002, for which a Burley tobacco farm mar24 keting quota was established under the Agricultural
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1 Adjustment Act of 1938 (7 U.S.C. 1281 et seq.) for

2 the 2001 marketing year.

3 (3) SECRETARY.—The term ‘‘Secretary’’ means

4 the Secretary of Agriculture.

5 SEC. 202. COMPENSATION TO BURLEY QUOTA HOLDERS

6 FOR LOSS OF TOBACCO QUOTA ASSET VALUE.

7 (a) COMPENSATION REQUIRED.—The Secretary shall

8 make a payment under this section to an eligible Burley

9 quota holder to compensate the Burley quota holder for

10 the lost value of the quota on account of the elimination

11 of marketing quotas for Burley tobacco under section 102.

12 (b) ELIGIBILITY.—To be eligible to receive a payment

13 under this section, a person shall submit to the Secretary

14 an application containing such information as the Sec15 retary may require to demonstrate to the satisfaction of

16 the Secretary that the person satisfies the definition of

17 Burley quota holder. The application shall be submitted

18 within such time, in such form, and in such manner as

19 the Secretary may require.

20 (c) BASE QUOTA LEVEL.—The Secretary shall deter21 mine, for each Burley quota holder whose application for

22 payment is approved by the Secretary under subsection

23 (b), the base quota level of the Burley quota holder for

24 the 1991 through 2001 marketing years. The base quota

25 level for the Burley quota holder shall be equal to the aver-
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1 age Burley tobacco farm marketing quota established for

2 the 1991 through 2001 marketing years for the farm

3 owned by the Burley quota holder.

4 (d) PAYMENT.—The Secretary shall make a one-time

5 payment to an eligible Burley quota holder in an amount

6 equal to the product obtained by multiplying—

7 (1) $8 per pound; by

8 (2) the base quota level established for the Bur9 ley quota holder under subsection (c).

10 (e) TIME FOR PAYMENT.—The payments required by

11 this section shall be made during fiscal year 2002.

12 SEC. 203. TRANSITION PAYMENTS FOR ACTIVE BURLEY TO13 BACCO PRODUCERS.

14 (a) TRANSITION PAYMENTS REQUIRED.—The Sec15 retary shall make transition payments under this section

16 to eligible active Burley tobacco producers to lessen the

17 financial consequences to producers of the elimination of

18 price support for Burley tobacco under section 101.

19 (b) ELIGIBILITY.—To be eligible to receive transition

20 payments under this section, a person shall submit to the

21 Secretary an application containing such information as

22 the Secretary may require to demonstrate to the satisfac23 tion of the Secretary that the person satisfies the defini24 tion of active Burley tobacco producer. The application
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1 shall be submitted within such time, in such form, and

2 in such manner as the Secretary may require.

3 (c) PRODUCTION HISTORY.—The Secretary shall

4 base the transition payments made to an active Burley to5 bacco producer on the average quantity of Burley tobacco

6 subject to a marketing quota that was produced by the

7 producer during the 1999 through 2001 marketing years.

8 (d) PAYMENTS.—The Secretary shall make transition

9 payments to an eligible active Burley tobacco producer in

10 an aggregate amount equal to the product obtained by

11 multiplying—

12 (1) $7.50; by

13 (2) the average quantity determined under sub14 section (c) for the producer.

15 (e) TIME FOR PAYMENTS.—The total amount cal16 culated for an active Burley tobacco producer under sub17 section (d) shall be paid to the producer in five equal in18 stallments. A payment shall be made during each of the

19 fiscal years 2002 through 2007.

20 SEC. 204. COMMODITY CREDIT CORPORATION.

21 The Secretary shall use the funds, facilities, and au22 thorities of the Commodity Credit Corporation to carry

23 out this title.
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1 TITLE III—ECONOMIC ASSIST2 ANCE FOR BURLEY TOBACCO3 DEPENDENT COMMUNITIES

4 SEC. 301. RURAL ECONOMIC ASSISTANCE GRANTS.

5 (a) GRANT AUTHORITY.—During each of the fiscal

6 years 2002 through 2007, the Secretary of Agriculture

7 shall use $50,000,000 of funds of the Commodity Credit

8 Corporation to provide grants to States in which Burley

9 tobacco is produced to assist those areas of such a State

10 that are economically dependent on the production of Bur11 ley tobacco.

12 (b) GRANT BASIS.—In making a grant under sub13 section (a) to a Burley tobacco-growing State, the Sec14 retary shall base the amount of the grant on the following,

15 as determined by the Secretary:

16 (1) The number of counties in the State in

17 which Burley tobacco production is a significant part

18 of the county’s economy.

19 (2) The level of economic dependence of such

20 counties on Burley tobacco production.

21 (c) USE OF GRANTS BY STATES.—A State that re22 ceives a grant under subsection (a) shall use the grant

23 to make grants to counties or other public or private enti24 ties in the State to assist areas that are dependent on the

25 production of Burley tobacco, as determined by the Gov-
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1 ernor. The amount of a grant paid to a county or other

2 entity to assist an area shall be based on (as determined

3 by the Secretary)—

4 (1) the ratio of gross Burley tobacco sales re5 ceipts in the area to the total farm income in the

6 area; and

7 (2) the ratio of all Burley tobacco related re8 ceipts in the area to the total income in the area.

9 (d) USE OF GRANTS BY COUNTIES.—A county or

10 other entity that receives a grant under subsection (c)

11 shall use the grant in a manner determined appropriate

12 by the county or entity (with the approval of the State)

13 to assist Burley tobacco producers and other persons who

14 are economically dependent on the production of Burley

15 tobacco, including use for—

16 (1) on-farm diversification and alternatives to

17 the production of tobacco and risk management; and

18 (2) off-farm activities such as development of

19 non-tobacco related jobs.

20 SEC. 302. COMMODITY CREDIT CORPORATION.

21 The Secretary shall use the funds, facilities, and au22 thorities of the Commodity Credit Corporation to carry

23 out this title.

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