I
107TH CONGRESS
2D SESSION
H. R. 5035
To replace the existing Federal price support and quota programs for tobacco
with price support and quota programs designed to assist the actual
producers of tobacco, to compensate quota holders for the loss of tobacco
quota asset value, to provide assistance for active tobacco producers,
including those producers who forgo obtaining a tobacco production li-
cense, during the transition of the new programs, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JUNE 27, 2002
Mr. FLETCHER (for himself, Mr. HAYES, Mr. BISHOP, Mr. ROGERS of Ken-
tucky, Mr. WHITFIELD, Mr. LEWIS of Kentucky, Mr. LUCAS of Ken-
tucky, and Mr. HILLEARY) introduced the following bill; which was re-
ferred to the Committee on Agriculture
A BILL
To replace the existing Federal price support and quota
programs for tobacco with price support and quota pro-
grams designed to assist the actual producers of tobacco,
to compensate quota holders for the loss of tobacco quota
asset value, to provide assistance for active tobacco pro-
ducers, including those producers who forgo obtaining
a tobacco production license, during the transition of
the new programs, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives 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 Equity Elimination Act of 2002’’.
(b) TABLE OF CONTENTS.—The table of contents of
this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings and purpose.
TITLE I—TOBACCO EQUITY ELIMINATION
Sec. 101. Definitions of active tobacco producer and quota holder.
Sec. 102. Payments to tobacco quota holders.
Sec. 103. Transition payments for active tobacco producers.
Sec. 104. Tobacco product manufacturer and importer user fees.
Sec. 105. Reimbursement of Commodity Credit Corporation expenditures.
TITLE II—TOBACCO PRICE SUPPORT
Sec. 201. Availability of tobacco price support.
Sec. 202. Repeal of related provisions.
Sec. 203. Effective date.
TITLE III—TOBACCO PRODUCTION LICENSES
Sec. 301. Definitions of historic tobacco producer and licensed tobacco pro-
ducer.
Sec. 302. Annual estimate of tobacco purchase intentions.
Sec. 303. National tobacco marketing factor.
Sec. 304. Issuance of tobacco production licenses.
Sec. 305. Annual authorized tobacco production under tobacco production li-
censes.
Sec. 306. Termination of marketing quota programs and repeal of related pro-
visions.
Sec. 307. Effective date.
TITLE IV—TOBACCO ADVISORY BOARD
Sec. 401. Establishment and duties of Tobacco Advisory Board.
TITLE V—ASSISTANCE TO TOBACCO-DEPENDENT COMMUNITIES
Sec. 501. Center for Tobacco-Dependent Communities.
SEC. 2. FINDINGS AND PURPOSE.
(a) FINDINGS.—Congress finds the following:
(1) Tobacco production is conducted extensively
in a number of States and generates significant in-
come in local communities in these States, which are
dependent on such production for economic vitality.
(2) Tobacco products manufactured from to-
bacco grown in the these States are transported in
interstate commerce.
(3) While manufacturers of tobacco products
enjoy profitable circumstances, many tobacco grow-
ers and their communities are in dire economic situ-
ations.
(4) Downturns in domestic manufacturing de-
mand for tobacco grown in the United States, losses
in the United States share of the world tobacco mar-
ket, reduced domestic demand for tobacco products,
and State and Federal tobacco policies that have in-
advertently encouraged economic dependence on to-
bacco have contributed to such dire economic situa-
tions.
(5) Many tobacco-producing communities are
experiencing the loss of tobacco farms, reductions in
quota level, and a lowered value for tobacco quotas.
(6) Such communities often have difficulty de-
veloping non-tobacco income, and are therefore quite
dependent on tobacco and vulnerable to changes in
the tobacco-growing industry.
(7) Domestic and world economic trends have
had a disproportionately harsh impact on small fam-
ily farms and on their communities, as the number
of tobacco farms in the United States declined by
more than 50 percent between 1978 and 1997.
(8) A failure to respond to the current crisis af-
fecting family farms will result in a continued reduc-
tion in the number of such farms and the jobs and
income that they provide to their communities.
(9) A continued program of assistance will pro-
vide many benefits to most tobacco-dependent com-
munities, particularly to small family farms.
(10) While tobacco-growing States have some
financial resources to support community revitaliza-
tion, few States have the resources necessary to sup-
port the transition from dependence on tobacco to a
varied economy.
(b) PURPOSE.—It is the purpose of this Act to pro-
vide assistance to tobacco-dependent communities, and
particularly to those comprised of small family farms, to
assist them in making the transition from tobacco-depend-
ent economies to a diversified economic base.
TITLE I—TOBACCO EQUITY
ELIMINATION
SEC. 101. DEFINITIONS OF ACTIVE TOBACCO PRODUCER
AND QUOTA HOLDER.
In this title:
(1) The term ‘‘active tobacco producer’’ means
a owner, operator, landlord, tenant, or sharecropper
who—
(A) shares in the risk of producing tobacco
on a farm where tobacco is produced pursuant
to a tobacco farm marketing quota or farm
acreage allotment established under the Agri-
cultural Adjustment Act of 1938 (7 U.S.C.
1281 et seq.) for the 2002 crop year; and
(B) planted the crop, or is considered to
have planted the crop under that Act, in 2002.
(2) The term ‘‘tobacco quota holder’’ means an
owner, as of July 1, 2002, of a tobacco farm mar-
keting 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.
SEC. 102. PAYMENTS TO TOBACCO QUOTA HOLDERS.
(a) PAYMENT AUTHORITY.—The Secretary of Agri-
culture shall use funds of the Commodity Credit Corpora-
tion to make payments under this section to tobacco quota
holders as compensation for the loss of tobacco quota asset
value on account of the repeal of part I of subtitle B of
title III of the Agricultural Adjustment Act of 1938 (7
U.S.C. 1311 et seq.).
(b) APPLICATION.—To receive payments under this
section, a person shall prepare and submit to the Sec-
retary of Agriculture an application at such time, in such
manner, and containing such information as the Secretary
may require, including information sufficient to dem-
onstrate that the person satisfies the definition of tobacco
quota holder.
(c) TOTAL PAYMENT AMOUNT.—
(1) IN GENERAL.—The Secretary of Agriculture
shall determine the total amount to be paid to all to-
bacco quota holders under this section with respect
to each kind of tobacco.
(2) POUNDAGE
QUOTA
TOBACCO.—For each
kind of tobacco for which the marketing quota is ex-
pressed in pounds, the total amount available for
payments to tobacco quota holders under this section
shall be equal to the product obtained by
multiplying—
(A) $8 per pound; by
(B) the total tobacco farm marketing
quotas established under the Agriculture Ad-
pounds, or fraction thereof, or these tobacco
products sold.
(f) CERTIFICATION
OF
VOLUME
OF
DOMESTIC
SALES.— Every manufacturer and importer of tobacco
products shall submit each year a certified report to the
Secretary of Agriculture setting forth for each class of to-
bacco products the total, for the prior year, of such manu-
facturer’s or importer’s domestic sales to wholesalers and
retailers and directly to consumers. These certified reports
must be submitted to the Secretary not later than March
1 of the year after the year for which the certified report
is being made.
(g) TERMINATION.—The user fees imposed under
this section shall terminate at the end of the fiscal year
in which the Secretary of Agriculture determines that the
Commodity Credit Corporation has been fully reimbursed
for all expenditures made using Commodity Credit Cor-
poration funds under this title.
SEC. 105. REIMBURSEMENT OF COMMODITY CREDIT COR-
PORATION EXPENDITURES.
Amounts collected by the Secretary of Agriculture
under section 104 shall be used to reimburse the Com-
modity Credit Corporation for all expenditures made
under this title.