§ 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

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;

² So in original. Probably should be capitalized.

     (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, § 106A, as added Pub. L. 97–218, title I, § 101, July 20, 1982, 96 Stat. 197; amended Pub. L. 98–180, title II, § 203, Nov. 29, 1983, 97 Stat. 1145; Pub. L. 99–272, title I, § 1108(a), (d), Apr. 7, 1986, 100 Stat. 92, 95; Pub. L. 99–500, § 101(a) [title VI, § 637], Oct. 18, 1986, 100 Stat. 1783, 1783–34, and Pub. L. 99–591, § 101(a) [title VI, § 637], Oct. 30, 1986, 100 Stat. 3341, 3341–34; Pub. L. 103–66, title I, § 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 (§ 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 (§ 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.

     1993—Subsec. (c). Pub. L. 103–66, § 1106(b)(2)(A), inserted "and importers" after "purchasers".

     Subsec. (d)(1)(A)(iii). Pub. L. 103–66, § 1106(b)(2)(B), added cl. (iii).

     Subsec. (d)(2). Pub. L. 103–66, § 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, § 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, § 1108(a)(1), added par. (6) and redesignated former par. (6) as (7).

     Subsec. (c). Pub. L. 99–272, § 1108(a)(2), inserted "or paid by or on behalf of purchasers" in second sentence.

     Subsec. (d)(1). Pub. L. 99–272, § 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, § 1108(a)(3)(A), (B), added cl. (iii).

     Subsec. (d)(2). Pub. L. 99–272, § 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, § 1108(a)(3)(F), substituted "producers and purchasers who contribute or pay" for "producers who contribute".

     Subsec. (d)(6). Pub. L. 99–272, § 1108(a)(3)(H), inserted "effective for the 1982 through 1985 crops of quota tobacco,".

     Subsec. (d)(7). Pub. L. 99–272, § 1108(a)(3)(G), (I), (L), added par. (7).

     Subsec. (h). Pub. L. 99–272, § 1108(a)(4), added subsec. (h).

     1983—Subsec. (d)(2). Pub. L. 98–180, § 203(1), substituted "1983 crop only" for "1983 and subsequent crops".

     Subsec. (d)(3). Pub. L. 98–180, § 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.

     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.

     Section 101 of Pub. L. 97–218 provided that this section is effective for 1982 and subsequent crops of tobacco.

     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.

     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.

     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."

     This section is referred to in sections 1314, 1314h, 1445, 1445–2 of this title.