§518b — Title 7 Agriculture | U.S. Code

Summary

The Secretary must offer a contract to every quota tobacco producer that pays the producer to end tobacco marketing quotas and related price supports. The payment is the full and final amount for giving up those quotas and supports. A producer must apply to get the payment, using the form, information, and deadline the Secretary sets. If more than one person claims the same quota, the Secretary will split the payment fairly based on each person’s share of risk and other fair factors. The Secretary will set a base quota for each producer. For flue-cured tobacco (types 11–14) and Burley tobacco (type 31), the base is the effective 2002 marketing-year quota (ignoring disaster leases and transfers). For other tobacco types, the base equals the 2002 basic farm acreage allotment times the average yield per acre for 2001–2003. The total payment for each kind of tobacco is $3.00 per pound times the base quota, paid in ten equal annual installments in fiscal years 2005 through 2014. Producers who planted or marketed under quotas in all three of 2002–2004 get the full rate; those in two of those years get 2/3; those in one year get 1/3. If a producer dies, the right to payments goes to the surviving spouse or, if none, to the estate.

Title 7, §518b

Agriculture — Source: USLM XML via OLRC

(a)The Secretary shall offer to enter into a contract with each producer of quota tobacco under which the producer of quota tobacco shall be entitled to receive payments under this section in exchange for the termination of tobacco marketing quotas and related price support under the amendments made by section 611 and 612.11 See References in Text note below. The contract payments shall constitute full and fair consideration for the termination of such tobacco marketing quotas and related price support.

(b)(1)To be eligible to enter into a contract to receive a contract payment under this section, a person shall submit to the Secretary an application containing such information as the Secretary may require to demonstrate to the satisfaction of the Secretary that the person is a producer of quota tobacco. The application shall be submitted within such time, in such form, and in such manner as the Secretary may require.

(2)If, on the basis of the applications submitted under paragraph (1) or other information, the Secretary determines that two or more persons are a producer of the same quota tobacco, the Secretary shall provide for an equitable distribution among the persons of the contract payments made under this section with respect to that quota tobacco, based on relative share of such persons in the risk of producing the quota tobacco and such other factors as the Secretary considers appropriate.

(c)(1)The Secretary shall establish a base quota level applicable to each producer of quota tobacco, as determined under this subsection.

(2)In the case of Flue-cured tobacco (types 11, 12, 13, and 14) and Burley tobacco (type 31), the base quota level for each producer of quota tobacco shall be equal to the effective tobacco marketing quota (irrespective of disaster lease and transfers) under part I of subtitle B of title III of the Agriculture 22 So in original. Probably should be “Agricultural”. Adjustment Act of 1938 [7 U.S.C. 1311 et seq.] for the 2002 marketing year for quota tobacco produced on the farm.

(3)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)(1)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)During each of fiscal years 2005 through 2014, the Secretary shall make a contract payment under this section to each eligible producer of tobacco, with respect to a kind of tobacco, in an amount equal to ⅒ of the amount determined under paragraph (1) for the producer for that kind of tobacco.

(3)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)If a producer of quota tobacco who is entitled to contract payments under this section dies and is survived by a spouse or one or more dependents, the right to receive the contract payments shall transfer to the surviving spouse or, if there is no surviving spouse, to the estate of the producer.

Notes & Related Subsidiaries

Editorial Notes

References in Text

section 611 and 612, referred to in subsec. (a), are section 611 and 612 of Pub. L. 108–357, which amended section 609, 1282, 1301, 1303, 1361, 1371, 1373, 1375, 1378, 1379, 1428, 1433c–1, and 1441 of this title and section 714c of Title 15, Commerce and Trade, repealed section 511r, 515, 515a to 515k, 625, 1311 to 1314, 1314–1, 1314b, 1314b–1, 1314b–2, 1314c to 1314j, 1315, 1316, 1445, 1445–1, and 1445–2 of this title, and repealed provisions set out as a note under section 1314c of this title. Part I of subtitle B of title III of the Agricultural Adjustment Act of 1938, referred to in subsec. (c)(2), was classified to subpart I (§ 1311 et seq.) of part B of subchapter II of chapter 35 of this title prior to repeal by Pub. L. 108–357, title VI, § 611(a), Oct. 22, 2004, 118 Stat. 1522. For complete classification of this Act to the Code, see section 1281 of this title and Tables.

Statutory Notes and Related Subsidiaries

Effective Date

Section applicable to the 2005 and subsequent crops of tobacco, see section 643 of Pub. L. 108–357, set out as a note under section 518 of this title.

§518b Contract Payments for Producers of Quota Tobacco