I 
109TH CONGRESS 
1ST SESSION H. R. 1825 
To amend the Internal Revenue Code of 1986 to exclude from gross income 
the first $5,000 of transitional payments under the Fair and Equitable 
Tobacco Reform Act of 2004. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 26, 2005 
Mr. BUTTERFIELD introduced the following bill; which was referred to the 
Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to exclude 
from gross income the first $5,000 of transitional pay-
ments under the Fair and Equitable Tobacco Reform 
Act of 2004. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Small Tobacco Farmer 
Tax Relief Act of 2005’’.
SEC. 2. EXCLUSION OF PORTION OF TRANSITIONAL PAY-
MENTS UNDER FAIR AND EQUITABLE TO-
BACCO REFORM ACT OF 2004. 
(a) GENERAL RULE.—Part III of subchapter B of 
chapter 1 of the Internal Revenue Code of 1986 (relating 
to items specifically excluded from gross income) is 
amended by inserting after section 139A the following new 
section: 
‘‘SEC. 139B. TRANSITIONAL PAYMENTS UNDER FAIR AND 
EQUITABLE TOBACCO REFORM ACT OF 2004. 
‘‘(a) GENERAL RULE.—Gross income shall not in-
clude any qualified tobacco payment. 
‘‘(b) LIMITATIONS.— 
‘‘(1) ANNUAL LIMITATION.—Except as provided 
by paragraph (2), the amount excluded from gross 
income under subsection (a) for a taxable year shall 
not exceed $5,000. 
‘‘(2) ASSIGNMENT OF CONTRACT PAYMENTS TO 
FINANCIAL INSTITUTION.—In the case of an assign-
ment to a financial institution of the right to receive 
contract payments under section 624(e) of the Fair 
and Equitable Tobacco Reform Act of 2004 (7 
U.S.C. 518c(e)), the amount excluded from gross in-
come under subsection (a) for a taxable year shall 
not exceed the lesser of—
‘‘(A) the consideration received under such 
assignment reduced by the aggregate amount 
excluded under this section for all previous tax-
able years, and 
‘‘(B) $50,000. 
‘‘(3) AGGREGATE
AMOUNT
EXCLUDED.—The 
aggregate amount excluded from gross income under 
this section with respect to any producer of quota 
tobacco and any tobacco quota holder shall not ex-
ceed $50,000. 
‘‘(c) DEFINITIONS.—For purposes of this section— 
‘‘(1) QUALIFIED TOBACCO PAYMENT.— 
‘‘(A) IN GENERAL.—For purposes of sub-
section (a), the term ‘qualified tobacco pay-
ment’ means any payment under section 622 or 
623 of the Fair and Equitable Tobacco Reform 
Act of 2004 (7 U.S.C. 518a and 518b). 
‘‘(B) EXCEPTION.—Such term does not in-
clude any payment under section 624(e) of the 
Fair and Equitable Tobacco Reform Act of 
2004 (7 U.S.C. 518c(e)) pursuant to an assign-
ment to a financial institution of the right to 
receive contract payments under such Act. 
‘‘(2) PRODUCER OF QUOTA TOBACCO; TOBACCO 
QUOTA HOLDER.—The terms ‘producer of quota to-
bacco’ and ‘tobacco quota holder’ have the meanings 
given such terms by section 621 of the Fair and Eq-
uitable Tobacco Reform Act of 2004 (7 U.S.C. 518). 
‘‘(d) TERMINATION.—This section shall not apply to 
taxable years beginning after December 31, 2014.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for such part is amended by inserting after the item relat-
ing to section 139A the following new item: 
‘‘Sec. 139B. Transitional payments under Fair and Equitable Tobacco Reform 
Act of 2004.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to payments received December 31, 
2004. 
Æ