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[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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