7 USC 518 - Use of assessments as source of funds for payments

Collapse to view only § 518d. Use of assessments as source of funds for payments

§ 518. Definitions
§ 518a. Contract payments to tobacco quota holders
§ 518b. Contract payments for producers of quota tobacco
§ 518c. Administration
§ 518d. Use of assessments as source of funds for payments
§ 518e. Tobacco Trust Fund
§ 518f. Limitation on total expenditures

§ 518. Definitions

In this subchapter and subchapter II:

(1) Agricultural Act of 1949

(2) Agricultural Adjustment Act of 1938

(3) Considered planted

(4) Contract

(5) Contract payment

(6) Producer of quota tobacco

(7) Quota tobacco

(8) Tobacco

The term “tobacco” means each of the following kinds of tobacco:

(A) Flue-cured tobacco, comprising types 11, 12, 13, and 14.

(B) Fire-cured tobacco, comprising types 22 and 23.

(D) Virginia sun-cured tobacco, comprising type 37.

(E) Virginia fire-cured tobacco, comprising type 21.

(F) Burley tobacco, comprising type 31.

(G) Cigar-filler and cigar-binder tobacco, comprising types 42, 43, 44, 53, 54, and 55.

(9) Tobacco quota holder

(10) Tobacco Trust Fund

(11) Secretary

(Pub. L. 108–357, title VI, § 621, Oct. 22, 2004, 118 Stat. 1524.)

§ 518a. Contract payments to tobacco quota holders

(a) Contract offered

(b) Eligibility

(1) Establishment

(2) Poundage quotas

(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 quantity equal to the product obtained by multiplying—

(A) the basic tobacco farm marketing quota or allotment for the 2002 marketing year established by the Secretary for quota tobacco owned by the tobacco quota holder; by

(B) the average production yield, per acre, for the period covering the 2001, 2002, and 2003 crop years for that kind of tobacco in the county in which the quota tobacco is located.

(d) Treatment of certain contracts and agreements

(1) Effect of purchase contract

(2) Effect of agreement for permanent quota transfer

(e) Contract payments

(1) Calculation of total payment amount

The total amount of contract payments to which an eligible tobacco quota holder is entitled under this section, with respect to a kind of tobacco, shall be equal to the product obtained by multiplying—

(A) $7.00 per pound; by

(B) the base quota level of the tobacco quota holder determined under subsection (c) with respect to that kind of tobacco.

(2) Annual payment

(f) Death of tobacco quota holder

(Pub. L. 108–357, title VI, § 622, Oct. 22, 2004, 118 Stat. 1525.)

§ 518b. Contract payments for producers of quota tobacco

(a) Contract offered

(b) Eligibility

(1) Application and determination

(2) Effect of multiple producers for same quota tobacco

(1) Establishment

(2) Flue-cured and burley tobacco

(3) Other kinds of tobacco

In the case of each kind of tobacco (other than tobacco covered by paragraph (2)), for the purpose of calculating a contract payment to a producer of quota tobacco, the base quota level for the producer of quota tobacco shall be the quantity obtained by multiplying—

(A) the basic tobacco farm acreage allotment for the 2002 marketing year established by the Secretary for quota tobacco produced on the farm; by

(B) the average annual yield, per acre, of quota tobacco produced on the farm for the period covering the 2001, 2002, and 2003 crop years.

(d) Contract payments

(1) Calculation of total payment amount

Subject to subsection (b)(2), the total amount of contract payments to which an eligible producer of quota tobacco is entitled under this section, with respect to a kind of tobacco, shall be equal to the product obtained by multiplying—

(A) subject to paragraph (2), $3.00 per pound; by

(B) the base quota level of the producer of quota tobacco determined under subsection (c) with respect to that kind of tobacco.

(2) Annual payment

(3) Variable payment rates

The rate for payments to a producer of quota tobacco under paragraph (1)(A) shall be equal to—

(A) in the case of a producer of quota tobacco that produced quota tobacco marketed, or considered planted, under a marketing quota in all three of the 2002, 2003, or 2004 tobacco marketing years, the rate prescribed under paragraph (1)(A);

(B) in the case of a producer of quota tobacco that produced quota tobacco marketed, or considered planted, under a marketing quota in only two of those tobacco marketing years, ⅔ of the rate prescribed under paragraph (1)(A);

(C) in the case of a producer of quota tobacco that produced quota tobacco marketed, or considered planted, under a marketing quota in only one of those tobacco marketing years, ⅓ of the rate prescribed under paragraph (1)(A).

(e) Death of tobacco producer

(Pub. L. 108–357, title VI, § 623, Oct. 22, 2004, 118 Stat. 1527.)

§ 518c. Administration

(a) Time for payment of contract payments

(b) Use of county committees to resolve disputes

(d) Use of financial institutions

(e) Payment to financial institutions

(Pub. L. 108–357, title VI, § 624, Oct. 22, 2004, 118 Stat. 1528.)

§ 518d. Use of assessments as source of funds for payments

(a) Definitions

In this section:

(1) Base period

(2) Gross domestic volume

The term “gross domestic volume” means the volume of tobacco products—

(A) removed (as defined by section 5702 of title 26); and

(B) not exempt from tax under chapter 52 of title 26 at the time of their removal under that chapter or the Harmonized Tariff Schedule of the United States.

(3) Market share

(b) Quarterly assessments

(1) Imposition of assessment

(2) Amounts

Beginning with the calendar quarter ending on December 31 of each of fiscal years 2005 through 2014, the assessment payments over each four-calendar quarter period shall be sufficient to cover—

(A) the contract payments made under sections 518a and 518b of this title during that period; and

(B) other expenditures from the Tobacco Trust Fund made during the base quarter periods corresponding to the four calendar quarters of that period.

(3) Deposit

(1) Initial allocation

The percentage of the total amount required by subsection (b) to be assessed against, and paid by, the manufacturers and importers of each class of tobacco product in fiscal year 2005 shall be as follows:

(A) For cigarette manufacturers and importers, 96.331 percent.

(B) For cigar manufacturers and importers, 2.783 percent.

(D) For roll-your-own tobacco manufacturers and importers, 0.171 percent.

(E) For chewing tobacco manufacturers and importers, 0.111 percent.

(F) For pipe tobacco manufacturers and importers, 0.066 percent.

(2) Subsequent allocations

(3) Effect of insufficient amounts

(d) Notification and timing of assessments

(1) Notification of assessments

(2) Content

The notice shall include the following information with respect to the quarterly period used by the Secretary in calculating the amount:

(A) The total combined assessment for all manufacturers and importers of tobacco products.

(B) The total assessment with respect to the class of tobacco products manufactured or imported by the manufacturer or importer.

(C) Any adjustments to the percentage allocations among the classes of tobacco products made pursuant to paragraph (2) or (3) of subsection (c).

(D) The volume of gross sales of the applicable class of tobacco product treated as made by the manufacturer or importer for purposes of calculating the manufacturer’s or importer’s market share under subsection (f).

(E) The total volume of gross sales of the applicable class of tobacco product that the Secretary treated as made by all manufacturers and importers for purposes of calculating the manufacturer’s or importer’s market share under subsection (f).

(F) The manufacturer’s or importer’s market share of the applicable class of tobacco product, as determined by the Secretary under subsection (f).

(G) The market share, as determined by the Secretary under subsection (f), of each other manufacturer and importer, for each applicable class of tobacco product.

(3) Timing of assessment payments

(A) Collection date

(B) Base period quarter

(e) Allocation of assessment within each class of tobacco product

(1) Pro rata basis

(2) Limitation

(f) Allocation of total assessments by market share

The amount of the assessment for each class of tobacco product specified in subsection (c)(1) to be paid by each manufacturer or importer of that class of tobacco product shall be determined for each quarterly payment period by multiplying—

(1) the market share of the manufacturer or importer, as calculated with respect to that payment period, of the class of tobacco product; by

(2) the total amount of the assessment for that quarterly payment period under subsection (c), for the class of tobacco product.

(g) Determination of volume of domestic sales

(1) In general

(2) Gross domestic volume

(3) Measurement

For purposes of the calculations under this subsection and the certifications under subsection (h) by the Secretary, the volumes of domestic sales shall be measured by—

(A) in the case of cigarettes and cigars, the number of cigarettes and cigars; and

(B) in the case of the other classes of tobacco products specified in subsection (c)(1), in terms of number of pounds, or fraction thereof, of those products.

(h) Measurement of volume of domestic sales

(1) Submission of information

(2) Returns and forms

The returns and forms described by this paragraph are those returns and forms that relate to—

(A) the removal of tobacco products into domestic commerce (as defined by section 5702 of title 26); and

(B) the payment of the taxes imposed under charter 2

2 So in original. Probably should be “chapter”.

52 of title 26, including AFT Form 5000.24 and United States Customs Form 7501 under currently applicable regulations.

(3) Effect of failure to provide required information

(i) Challenge to assessment

(1) Appeal to Secretary

(2) Information

(3) Revision

(4) Time for review

Not later than 30 days after receiving notice from a manufacturer or importer under paragraph (1), the Secretary shall—

(A) decide whether the information provided to the Secretary under paragraph (2), and any other information that the Secretary determines is appropriate, is sufficient to establish that the original assessment was incorrect; and

(B) make any revisions necessary to ensure that each manufacturer and importer pays only its correct pro rata share of total gross domestic volume from all sources.

(5) Immediate payment of undisputed amounts

(j) Judicial review

(1) In general

(2) Time limits

(3) Excessive assessments

(k) Termination date

(Pub. L. 108–357, title VI, § 625, Oct. 22, 2004, 118 Stat. 1529.)

§ 518e. Tobacco Trust Fund

(a) Establishment

There is established in the Commodity Credit Corporation a revolving trust fund, to be known as the “Tobacco Trust Fund”, which shall be used in carrying out this subchapter. The Tobacco Trust Fund shall consist of the following:

(1) Assessments collected under section 518d of this title.

(2) Such amounts as are necessary from the Commodity Credit Corporation.

(3) Any interest earned on investment of amounts in the Tobacco Trust Fund under subsection (c).

(b) Expenditures

(1) Authorized expenditures

Subject to paragraph (2), and notwithstanding any other provision of law, the Secretary shall use amounts in the Tobacco Trust Fund, in such amounts as the Secretary determines are necessary—

(A) to make payments under sections 518a and 518b of this title;

(B) to provide reimbursement under section 519(c) of this title;

(C) to reimburse the Commodity Credit Corporation for costs incurred by the Commodity Credit Corporation under paragraph (2); and

(D) to make payments to financial institutions to satisfy contractual obligations under section 518a or 518b of this title.

(2) Expenditures by Commodity Credit Corporation

(1) In general

(2) Interest-bearing obligations

(3) Acquisition of obligations

For the purpose of investments under paragraph (1), obligations may be acquired—

(A) on original issue at the issue price; or

(B) by purchase of outstanding obligations at the market price.

(4) Sale of obligations

(5) Credits to Fund

(Pub. L. 108–357, title VI, § 626, Oct. 22, 2004, 118 Stat. 1533.)

§ 518f. Limitation on total expenditures

The total amount expended by the Secretary from the Tobacco Trust Fund to make payments under sections 518a and 518b of this title and for the other authorized purposes of the Fund shall not exceed $10,140,000,000.

(Pub. L. 108–357, title VI, § 627, Oct. 22, 2004, 118 Stat. 1534.)