§ 1445-1. — Producer contributions and purchaser assessments for No Net Cost Tobacco Fund.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 7USC1445-1]
TITLE 7--AGRICULTURE
CHAPTER 35A--PRICE SUPPORT OF AGRICULTURAL COMMODITIES
SUBCHAPTER II--BASIC AGRICULTURAL COMMODITIES
Sec. 1445-1. Producer contributions and purchaser assessments
for No Net Cost Tobacco Fund
(a) Definitions
As used in the section--
(1) the term ``association'' means a producer-owned cooperative
marketing association which has entered into a loan agreement with
the Corporation to make price support available to producers;
(2) the term ``Corporation'' means the Commodity Credit
Corporation, an agency and instrumentality of the United States
within the Department of Agriculture through which the Secretary
makes price support available to producers;
(3) the term ``Fund'' means the capital account to be
established within each association, which account shall be known as
the ``No Net Cost Tobacco Fund'';
(4) the term ``to market'' means to dispose of quota tobacco by
voluntary or involuntary sale, barter, exchange, gift inter vivos,
or consigning the tobacco to an association for a price support
advance;
(5) the term ``net gains'' means the amount by which total
proceeds obtained from the sale by an association of a crop of quota
tobacco pledged to the Corporation for price support loan exceeds
the principal amount of the price support loan made by the
Corporation to the association on such crop, plus interest and
charges;
(6) the term ``purchaser'' means any person who purchases in the
United States, either directly or indirectly for the account of such
person or another person, Flue-cured or Burley quota tobacco; and
(7) the term ``quota tobacco'' means any kind of tobacco for
which marketing quotas are in effect or for which marketing quotas
are not disapproved by producers.
(b) Commodity Credit Corporation loans to associations
The Secretary may carry out the tobacco price support program
through the Corporation and shall, except as otherwise provided by this
section, continue to make price support available to producers through
loans to associations that, under agreements with the Corporation, agree
to make loan advances to producers.
(c) Establishment of No Net Cost Tobacco Funds
Each association shall establish within the association a Fund. The
Fund shall be comprised of amounts contributed by producer-members or
paid by or on behalf of purchasers and importers as provided in
subsection (d) of this section.
(d) Requirements
The Secretary shall--
(1) require--
(A) that--
(i) as a condition of eligibility for price support,
each producer of each kind of quota tobacco shall agree,
with respect to all such kind of quota tobacco marketed by
the producer from a farm, to contribute to the appropriate
association, for deposit in the association's Fund, an
amount determined from time to time by the association with
the approval of the Secretary;
(ii) each purchaser of Flue-cured and Burley quota
tobacco shall pay to the appropriate association, for
deposit in the Fund of the association, an assessment, in an
amount determined from time to time by the association with
the approval of the Secretary, with respect to purchases of
all such kind of tobacco marketed by a producer from a farm
(including purchases of such tobacco from the 1986 and
subsequent crops from the association); and
(iii) each importer of Flue-cured or Burley tobacco
shall pay to the appropriate association, for deposit in the
Fund of the association, an assessment, in an amount that is
equal to the product obtained by multiplying--
(I) the number of pounds of tobacco that is imported
by the importer; by
(II) the sum of the amount of per pound producer
contributions and purchaser assessments that are payable
by domestic producers and purchasers of Flue-cured and
Burley tobacco under clauses (i) and (ii); and
(B) that, upon making a contribution under subparagraph
(A)--
(i) in the case of quota tobacco marketed other than by
consignment to an association for a price support advance,
the producer shall receive from the association capital
stock or, if the association does not issue such stock, a
capital certificate having a par value or face amount,
respectively, equal to the contribution; and
(ii) in the case of quota tobacco consigned by the
producer to an association for a price support advance, the
producer shall receive from the association a qualified per
unit retain certificate, as defined in section 1388(h) of
title 26, having a face amount equal to the amount of the
contribution and representing an interest in the
association's Fund.
The amount of producer contributions and purchaser assessments shall
be determined in such a manner that producers and purchasers share
equally, to the maximum extent practicable, in maintaining the Fund
of an association. In making such determination with respect to the
assessment of a purchaser, only 1985 and subsequent crops of Flue-
cured and Burley quota tobacco shall be taken into account. The
Secretary shall approve the amount of the contributions and
assessments determined by an association from time to time under
this paragraph only if the Secretary determines that such amount
will result in accumulation of a Fund adequate to reimburse the
Corporation for any net losses which the Corporation may sustain
under its loan agreements with the association, based on reasonable
estimates of the amounts which the Corporation will lend to the
association under such agreements and the proceeds which will be
realized from the sales of tobacco which are pledged to the
Corporation by the association as security for loans;
(2) require that any producer contribution or purchaser or
importer assessment due under paragraph (1) shall be collected--
(A) from the person who acquired the tobacco involved from
the producer, except that if the tobacco is marketed by sale, an
amount equal to the producer contribution may be deducted by the
purchaser from the price paid to such producer;
(B) if the tobacco involved is marketed by a producer
through a warehouseman or agent, from such warehouseman or
agent, who may--
(i) deduct an amount equal to the producer contribution
from the price paid to the producer; and
(ii) add an amount equal to the purchaser assessment to
the price paid by the purchaser;
(C) if the tobacco involved is marketed by a producer
directly to any person outside the United States, from the
producer, who may add an amount equal to the purchaser
assessment to the price paid by the purchaser; and
(D) if the tobacco involved is imported by an importer, from
the importer.\1\
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\1\ So in original. The period probably should be a semicolon.
(3) require that the Fund established by each association shall
be kept and maintained separate from all other accounts of the
association and shall be used exclusively, as prescribed by the
Secretary, for the purpose of ensuring, insofar as practicable, that
the Corporation, under its loan agreements with the association with
respect to 1982 and subsequent crops of quota tobacco, will suffer
no net losses (including, but not limited to, recovery of the amount
of loans extended to cover the overhead costs of the association),
after any net gains are applied to net losses of the corporation \2\
under paragraph (5): Provided, That, notwithstanding any other
provision of law, use by the association of moneys in the Fund,
including interest and other earnings, for the purposes of reducing
the association's outstanding indebtedness to the Corporation
associated with 1982 and subsequent crops of quota tobacco and
making loan advances to producers is authorized, and use of such
moneys for any other purposes that will be mutually beneficial to
producers and purchasers who contribute or pay to the Fund and to
the Corporation, shall, if approved by the Secretary, be considered
an appropriate use of the Fund;
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\2\ So in original. Probably should be capitalized.
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(4) permit an association to invest the monies in the Fund in
such manner as the Secretary may approve, and require that the
interest or other earnings on such investment shall become a part of
the Fund;
(5) require that loan agreements between the Corporation and the
association provide that the Corporation shall retain the net gains
from each of the 1982 and subsequent crops of tobacco pledged by the
association as security for price support loans, and that such net
gains will be used for the purpose of (A) offsetting any losses
sustained by the Corporation under its loan agreements with the
association for any of the 1982 and subsequent crops of loan
tobacco, or (B) reducing the outstanding balance of any price
support loan made by the Corporation to the association under such
agreements for 1982 and subsequent crops of tobacco, or for both
such purposes;
(6) effective for the 1982 through 1985 crops of quota tobacco,
provide, in loan agreements between the Corporation and an
association, that if the Secretary determines that the amount in the
Fund or the net gains referred to in paragraph (5) exceed the
amounts necessary for the purposes specified in this section, such
excess (A) in the case of an association making price support
available to producers of quota tobacco other than Burley tobacco,
will be released to the association by the Corporation and may be
devoted to other purposes by the association, and (B) in the case of
an association making price support available to producers of Burley
quota tobacco, will be released to the association by the
Corporation and may be distributed, as determined by the
association, to the producer-members of the association as a capital
distribution or net gain distribution; and
(7) effective for the 1986 and subsequent crops of quota
tobacco, provide, in loan agreements between the Corporation and an
association, that if the Secretary determines that the amount in the
Fund or the net gains referred to in paragraph (5) exceeds the
amounts necessary for the purposes specified in this section, the
association, with the approval of the Secretary, may suspend the
payment and collection of contributions and assessments under this
section on terms and conditions established by the association, with
the approval of the Secretary.
(e) Failure or refusal of association to comply
If any association which has entered into a loan agreement with the
Corporation with respect to 1982 or subsequent crops of quota tobacco
fails or refuses to comply with the provisions of this section, the
regulations issued by the Secretary thereunder, or the terms of such
agreement, the Secretary may terminate such agreement or provide that no
additional loan funds may be made available thereunder to the
association. In such event, the Secretary shall make price support
available to producers of the kind or kinds of tobacco, the price of
which had been supported through loans to such association, through such
other means as are authorized by this Act or the Commodity Credit
Corporation Charter Act [15 U.S.C. 714 et seq.].
(f) Termination of loan agreement; dissolution or merger of association;
disposition of amounts in Fund
If, under subsection (e) of this section, a loan agreement with an
association is terminated, or if an association having a loan agreement
with the Corporation is dissolved, merges with another association, or
otherwise ceases to operate, the Fund or the net gains referred to in
subsection (d)(5) of this section shall be applied or disposed of in
such manner as the Secretary may approve or prescribe, except that they
shall, to the extent necessary, first be applied or used for the
purposes therefor prescribed in this section.
(g) Regulations
The Secretary shall issue regulations necessary to carry out the
provisions of this section.
(h) Failure to collect contribution or assessment; marketing penalty;
civil action for review of penalty
(1)(A) Each person who fails to collect any contribution or
assessment as required by subsection (d)(2) of this section and remit
such contribution or assessment to the association, at such time and in
such manner as may be prescribed by the Secretary, shall be liable, in
addition to any amount due, to a marketing penalty at a rate equal to 75
percent of the average market price (calculated to the nearest whole
cent) for the kind of tobacco involved for the immediately preceding
year on the quantity of tobacco as to which the failure occurs.
(B) Each importer who fails to pay to the association an assessment
as required by subsection (d)(2) of this section at such time and in
such manner as may be prescribed by the Secretary, shall be liable, in
addition to any amount due, for a marketing penalty at a rate equal to
75 percent of the average market price (calculated to the nearest whole
cent) for the respective kind of tobacco for the immediately preceding
year on the quantity of tobacco as to which the failure occurs.
(C) The Secretary may reduce any such marketing penalty in such
amount as the Secretary determines equitable in any case in which the
Secretary determines that the failure was unintentional or without
knowledge on the part of the person concerned.
(D) Any penalty provided for under this paragraph shall be assessed
by the Secretary after notice and opportunity for a hearing.
(2)(A) Any person against whom a penalty is assessed under this
subsection may obtain review of such penalty in an appropriate district
court of the United States by filing a civil action in such court not
later than 30 days after such penalty is imposed.
(B) The Secretary shall promptly file in such court a certified copy
of the record on which the penalty is based.
(3) The district courts of the United States shall have jurisdiction
to review and enforce any penalty imposed under this subsection.
(4) An amount equivalent to any penalty collected by the Secretary
under this subsection shall be transmitted by the Secretary to the
appropriate association, for deposit in the Fund of such association.
(5) The remedies provided in this subsection shall be in addition
to, and not exclusive of, other remedies that may be available.
(Oct. 31, 1949, ch. 792, title I, Sec. 106A, as added Pub. L. 97-218,
title I, Sec. 101, July 20, 1982, 96 Stat. 197; amended Pub. L. 98-180,
title II, Sec. 203, Nov. 29, 1983, 97 Stat. 1145; Pub. L. 99-272, title
I, Sec. 1108(a), (d), Apr. 7, 1986, 100 Stat. 92, 95; Pub. L. 99-500,
Sec. 101(a) [title VI, Sec. 637], Oct. 18, 1986, 100 Stat. 1783, 1783-
34, and Pub. L. 99-591, Sec. 101(a) [title VI, Sec. 637], Oct. 30, 1986,
100 Stat. 3341, 3341-34; Pub. L. 103-66, title I, Sec. 1106(b)(2), Aug.
10, 1993, 107 Stat. 321.)
References in Text
This Act, referred to in subsec. (e), is act Oct. 31, 1949, ch. 792,
63 Stat. 1051, as amended, known as the Agricultural Act of 1949, which
is classified principally to this chapter (Sec. 1421 et seq.). For
complete classification of this Act to the Code, see Short Title note
set out under section 1421 of this title and Tables.
The Commodity Credit Corporation Charter Act, referred to in subsec.
(e), is act June 29, 1948, ch. 704, 62 Stat. 1070, as amended, which is
classified generally to subchapter II (Sec. 714 et seq.) of chapter 15
of Title 15, Commerce and Trade. For complete classification of this Act
to the Code, see Short Title note set out under section 714 of Title 15
and Tables.
Codification
Pub. L. 99-591 is a corrected version of Pub. L. 99-500.
Amendments
1993--Subsec. (c). Pub. L. 103-66, Sec. 1106(b)(2)(A), inserted
``and importers'' after ``purchasers''.
Subsec. (d)(1)(A)(iii). Pub. L. 103-66, Sec. 1106(b)(2)(B), added
cl. (iii).
Subsec. (d)(2). Pub. L. 103-66, Sec. 1106(b)(2)(C), inserted ``or
importer'' after ``or purchaser'' in introductory provisions and added
subpar. (D).
Subsec. (h)(1)(B) to (D). Pub. L. 103-66, Sec. 1106(b)(2)(D), added
subpar. (B) and redesignated former subpars. (B) and (C) as (C) and (D),
respectively.
1986--Subsec. (a)(6), (7). Pub. L. 99-272, Sec. 1108(a)(1), added
par. (6) and redesignated former par. (6) as (7).
Subsec. (c). Pub. L. 99-272, Sec. 1108(a)(2), inserted ``or paid by
or on behalf of purchasers'' in second sentence.
Subsec. (d)(1). Pub. L. 99-272, Sec. 1108(a)(3)(C), (D), in
provisions following subpar. (B), inserted provisions relating to the
determination of the amount of producer contributions and purchaser
assessments so as to share equally in maintaining the Fund of the
association, with only the 1985 and subsequent crops of Flue-cured and
Burley quota tobacco being taken into account, and inserted ``and
assessments'' after ``contributions''.
Subsec. (d)(1)(A)(i). Pub. L. 99-500 and Pub. L. 99-591 struck out
exception for Burley quota tobacco for 1983 and subsequent crop years.
Subsec. (d)(1)(A)(ii), (iii). Pub. L. 99-500 and Pub. L. 99-591
redesignated cl. (iii) as (ii) and struck out former cl. (ii) setting
forth conditions of eligibility for any marketing year of any three-year
period for which marketing quotas are in effect.
Pub. L. 99-272, Sec. 1108(a)(3)(A), (B), added cl. (iii).
Subsec. (d)(2). Pub. L. 99-272, Sec. 1108(a)(3)(E), added par. (2)
and struck out former par. (2) which read as follows: ``effective for
the 1983 crop only, require that each owner and operator of any farm
who, in conformity with the provisions of subtitle B, part I, of the
Agricultural Adjustment Act of 1938, leases all or any part of an
acreage allotment or marketing quota for Flue-cured tobacco to make
contributions, for deposit into the Fund established by the association
which, under a loan agreement with the Corporation, makes price support
available to producers of Flue-cured tobacco. The amount of such
contribution for the quantity of tobacco of each crop represented by
such lease shall be the same amount as the contribution for producers of
Flue-cured tobacco of such crop determined and approved under paragraph
(1). The Secretary shall require that such association, upon receiving
such contribution, issue to such owner and operator capital stock or, if
the association does not issue such stock, a capital certificate having
a par value or face amount, respectively, equal to the contribution;''.
Subsec. (d)(3). Pub. L. 99-272, Sec. 1108(a)(3)(F), substituted
``producers and purchasers who contribute or pay'' for ``producers who
contribute''.
Subsec. (d)(6). Pub. L. 99-272, Sec. 1108(a)(3)(H), inserted
``effective for the 1982 through 1985 crops of quota tobacco,''.
Subsec. (d)(7). Pub. L. 99-272, Sec. 1108(a)(3)(G), (I), (L), added
par. (7).
Subsec. (h). Pub. L. 99-272, Sec. 1108(a)(4), added subsec. (h).
1983--Subsec. (d)(2). Pub. L. 98-180, Sec. 203(1), substituted
``1983 crop only'' for ``1983 and subsequent crops''.
Subsec. (d)(3). Pub. L. 98-180, Sec. 203(2), inserted proviso
authorizing use by the association of moneys in the Fund for the
purposes of reducing the association's outstanding indebtedness to the
Corporation associated with 1982 and subsequent crops of quota tobacco
and making loan advances to producers.
Effective Date of 1986 Amendment
Section 1108(a) of Pub. L. 99-272 provided that the amendment made
by that section is effective for 1986 and subsequent crops of tobacco.
Effective Date
Section 101 of Pub. L. 97-218 provided that this section is
effective for 1982 and subsequent crops of tobacco.
Waiver Authority of President
For authority of President to waive application of this section to
imported tobacco if President determines that waiver is necessary or
appropriate pursuant to an international agreement entered into by
United States, see section 422(c) of Pub. L. 103-465, set out as a note
under section 1445 of this title.
Rulemaking Procedures
Secretary of Agriculture to implement amendments by Pub. L. 99-272
without regard to provisions requiring notice and other procedures for
public participation in rulemaking contained in section 553 of Title 5,
Government Organization and Employees, or in any other directive of the
Secretary, see section 1108(c) of Pub. L. 99-272, set out as a note
under section 1301 of this title.
Congressional Findings and Declaration of Purpose for No Net Cost
Tobacco Program Act of 1982
Section 2 of Pub. L. 97-218 provided that: ``Congress finds that--
``(1) in order to implement the intent of Congress, as expressed
in the Agriculture and Food Act of 1981 [see Short Title of 1981
Amendment note set out under section 1281 of this title], that the
tobacco price support and production adjustment program be carried
out at no net cost to the taxpayer, other than administrative
expenses common to the operation of all price support programs, it
is necessary that producers of quota tobacco share equitably in
helping to eliminate losses which may be incurred in carrying out
the program;
``(2) producers of quota tobacco should be required, as a
condition of receiving the benefits of price support for their
tobacco, to contribute to a capital account to be established by
each producer-owned marketing association through which price
support advances are made available to producers; and
``(3) the account so established should be used by the
associations exclusively for the purpose of achieving a no net cost
tobacco program.''
Section Referred to in Other Sections
This section is referred to in sections 1314, 1314h, 1445, 1445-2 of
this title.
