§518d Use of Assessments as Source of Funds for Payments

Summary

Requires tobacco makers and importers who sell products in the U.S. to pay quarterly fees from 2005 through 2014. The fees must raise enough each four-quarter period to pay the contract payments under sections 518a and 518b and other spending from the Tobacco Trust Fund for the matching base quarters. "Base period" means the one-year period ending June 30 before a fiscal year. "Gross domestic volume" means the volume of tobacco removed for U.S. sale that was not tax-exempt when removed. "Market share" means a maker’s or importer’s share of domestic sales for a class of product, shown to four decimal places. For fiscal year 2005 the total fee amount is split by product class as follows: cigarettes 96.331 percent, cigars 2.783 percent, snuff 0.539 percent, roll-your-own tobacco 0.171 percent, chewing tobacco 0.111 percent, and pipe tobacco 0.066 percent. The Secretary will adjust those shares in later years based on changes in each class’s share of gross domestic volume. If the fees are not enough, the Secretary can add more and divide those extra amounts the same way. The Secretary, through the Commodity Credit Corporation, must notify each maker or importer at least 30 days before a payment is due and must collect fees at the end of each calendar quarter, with the final collection no later than September 30, 2014. Fees for each product class are split among makers and importers pro rata by their gross domestic volume, and no one pays more than their share of domestic volume. Sales volume is measured by numbers for cigarettes and cigars, and by pounds for other products. Makers and importers must send certified copies of federal returns and forms (including AFT Form 5000.24 and Customs Form 7501) when they file them. Knowingly failing to provide required information or giving false information brings penalties under section 1003 of title 18 and a civil penalty up to 2 percent of the value of the tobacco products the person made or imported that fiscal year. A maker or importer can contest an assessment within 30 business days after notice; the Secretary had to set appeal rules within 180 days after October 22, 2004. Disputed amounts may be put in escrow while the rest must be paid. After administrative review, a party can sue in federal district court; the court can stop collection of any excess amount or order a refund with interest at the rate in section 3717 of title 31. The authority to impose these fees ends on September 30, 2014.