7 U.S.C. § 518d — Use of assessments as source of funds for

Page 443 TITLE 7—AGRICULTURE § 518d 1 See References in Text note below. (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 to- bacco that produced quota tobacco mar- keted, or considered planted, under a mar- keting quota in all three of the 2002, 2003, or 2004 tobacco marketing years, the rate pre- scribed under paragraph (1)(A); (B) in the case of a producer of quota to- bacco that produced quota tobacco mar- keted, or considered planted, under a mar- keting quota in only two of those tobacco marketing years, 2⁄3 of the rate prescribed under paragraph (1)(A); (C) in the case of a producer of quota to- bacco that produced quota tobacco mar- keted, or considered planted, under a mar- keting quota in only one of those tobacco marketing years, 1⁄3 of the rate prescribed under paragraph (1)(A). (e) Death of tobacco producer 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 de- pendents, the right to receive the contract pay- ments shall transfer to the surviving spouse or, if there is no surviving spouse, to the estate of the producer. (Pub. L. 108–357, title VI, § 623, Oct. 22, 2004, 118 Stat. 1527.) Editorial Notes REFERENCES IN TEXT Sections 611 and 612, referred to in subsec. (a), are sections 611 and 612 of Pub. L. 108–357, which amended sections 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1371, 1373, 1375, 1378, 1379, 1428, 1433c–1, and 1441 of this title and section 714c of Title 15, Commerce and Trade, repealed sections 511r, 515, 515a to 515k, 625, 1311 to 1314, 1314–1, 1314b, 1314b–1, 1314b–2, 1314c to 1314j, 1315, 1316, 1445, 1445–1, and 1445–2 of this title, and repealed provisions set out as a note under section 1314c of this title.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 Ad- justment Act of 1938, referred to in subsec. (c)(2), was classified to subpart I (§ 1311 et seq.) of part B of sub- chapter 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. § 518c. Administration (a) Time for payment of contract payments Contract payments required to be made for a fiscal year shall be made by the Secretary as soon as practicable. (b) Use of county committees to resolve disputes Any dispute regarding the eligibility of a per- son to enter into a contract or to receive con- tract payments, and any dispute regarding the amount of a contract payment, may be appealed to the county committee established under sec- tion 590h of title 16 for the county or other area in which the farming operation of the person is located. (c) Role of National Appeals Division Any adverse determination of a county com- mittee under subsection (b) may be appealed to the National Appeals Division established under subtitle H of the Department of Agriculture Re- organization Act of 1994 (7 U.S.C. 6991 et seq.). (d) Use of financial institutions The Secretary may use a financial institution to manage assets, make contract payments, and otherwise carry out this title.1 (e) Payment to financial institutions The Secretary shall permit a tobacco quota holder or producer of quota tobacco entitled to contract payments to assign to a financial insti- tution the right to receive the contract pay- ments. Upon receiving notification of the as- signment, the Secretary shall make subsequent contract payments for the tobacco quota holder or producer of quota tobacco directly to the fi- nancial institution designated by the tobacco quota holder or producer of quota tobacco. The Secretary shall make information available to tobacco quota holders and producers of quota to- bacco regarding their ability to elect to have the Secretary make payments directly to a fi- nancial institution under this subsection so that they may obtain a lump sum or other payment. (Pub. L. 108–357, title VI, § 624, Oct. 22, 2004, 118 Stat. 1528.) Editorial Notes REFERENCES IN TEXT The Department of Agriculture Reorganization Act of 1994, referred to in subsec. (c), is title II of Pub. L. 103–354, Oct. 13, 1994, 108 Stat. 3209. Subtitle H of the Act is classified principally to subchapter VIII (§ 6991 et seq.) of chapter 98 of this title. For complete classifica- tion of this Act to the Code, see Tables. This title, referred to in subsec. (d), means title VI of Pub. L. 108–357, which enacted this chapter, amended sections 609, 1282, 1301, 1303, 1314h, 1361, 1371, 1373, 1375, 1378, 1379, 1428, 1433c–1, and 1441 of this title and section 714c of Title 15, Commerce and Trade, repealed sections 511r, 515 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, enacted provisions set out as notes under sections 515 and 518 of this title, and repealed provi- sions set out as a note under section 1314c of this title. For complete classification of title VI to the Code, see Short Title note set out under section 518 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. § 518d. Use of assessments as source of funds for payments (a) Definitions In this section: Page 444 TITLE 7—AGRICULTURE § 518d 1 So in original. (1) Base period The term ‘‘base period’ 1 means the one-year period ending the June 30 before the beginning of a fiscal year. (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 The term ‘‘market share’’ means the share of each manufacturer or importer of a class of tobacco product (expressed as a decimal to the fourth place) of the total volume of domestic sales of the class of tobacco product during the base period for a fiscal year for an assess- ment under this section. (b) Quarterly assessments (1) Imposition of assessment The Secretary, acting through the Com- modity Credit Corporation, shall impose quar- terly assessments during each of fiscal years 2005 through 2014, calculated in accordance with this section, on each tobacco product manufacturer and tobacco product importer that sells tobacco products in domestic com- merce in the United States during that fiscal year. (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 suf- ficient to cover— (A) the contract payments made under sec- tions 518a and 518b of this title during that period; and (B) other expenditures from the Tobacco Trust Fund made during the base quarter pe- riods corresponding to the four calendar quarters of that period. (3) Deposit Assessments collected under this section shall be deposited in the Tobacco Trust Fund. (c) Assessments for classes of tobacco products (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 im- porters, 96.331 percent. (B) For cigar manufacturers and import- ers, 2.783 percent. (C) For snuff manufacturers and import- ers, 0.539 percent. (D) For roll-your-own tobacco manufactur- ers 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 For subsequent fiscal years, the Secretary shall periodically adjust the percentage of the total amount required under subsection (b) to be assessed against, and paid by, the manufac- turers and importers of each class of tobacco product specified in paragraph (1) to reflect changes in the share of gross domestic volume held by that class of tobacco product. (3) Effect of insufficient amounts If the Secretary determines that the assess- ment imposed under subsection (b) will result in insufficient amounts to carry out this sub- chapter during a fiscal year, the Secretary shall assess such additional amounts as the Secretary determines to be necessary to carry out this subchapter during that fiscal year. The additional amount shall be allocated to manufacturers and importers of each class of tobacco product specified in paragraph (1) in the same manner and based on the same per- centages applicable under paragraph (1) or (2) for that fiscal year. (d) Notification and timing of assessments (1) Notification of assessments The Secretary shall provide each manufac- turer or importer subject to an assessment under subsection (b) with written notice set- ting forth the amount to be assessed against the manufacturer or importer for each quar- terly payment period. The notice for a quar- terly period shall be provided not later than 30 days before the date payment is due under paragraph (3). (2) Content The notice shall include the following infor- mation 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 im- porter. (C) Any adjustments to the percentage al- locations among the classes of tobacco prod- ucts made pursuant to paragraph (2) or (3) of subsection (c). (D) The volume of gross sales of the appli- cable 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 manufac- turers and importers for purposes of calcu- lating the manufacturer’s or importer’s mar- ket share under subsection (f). (F) The manufacturer’s or importer’s mar- ket share of the applicable class of tobacco product, as determined by the Secretary under subsection (f). Page 445 TITLE 7—AGRICULTURE § 518d 2 So in original. Probably should be ‘‘chapter’’. (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 Assessments shall be collected at the end of each calendar year quarter, except that the Secretary shall ensure that the final as- sessment due under this section is collected not later than September 30, 2014. (B) Base period quarter The assessment for a calendar year quarter shall correspond to the base period quarter that ended at the end of the preceding cal- endar year quarter. (e) Allocation of assessment within each class of tobacco product (1) Pro rata basis The assessment for each class of tobacco product specified in subsection (c)(1) shall be allocated on a pro rata basis among manufac- turers and importers based on each manufac- turer’s or importer’s share of gross domestic volume. (2) Limitation No manufacturer or importer shall be re- quired to pay an assessment that is based on a share that is in excess of the manufacturer’s or importer’s share of domestic volume. (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 deter- mined 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 prod- uct; by (2) the total amount of the assessment for that quarterly payment period under sub- section (c), for the class of tobacco product. (g) Determination of volume of domestic sales (1) In general The calculation of the volume of domestic sales of a class of tobacco product by a manu- facturer or importer, and by all manufacturers and importers as a group, shall be made by the Secretary based on information provided by the manufacturers and importers pursuant to subsection (h), as well as any other relevant information provided to or obtained by the Secretary. (2) Gross domestic volume The volume of domestic sales shall be cal- culated based on gross domestic volume. (3) Measurement For purposes of the calculations under this subsection and the certifications under sub- section (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 to- bacco 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 Each manufacturer and importer of tobacco products shall submit to the Secretary a cer- tified copy of each of the returns or forms de- scribed by paragraph (2) that are required to be filed with a Federal agency on the same date that those returns or forms are filed, or required to be filed, with the agency. (2) Returns and forms The returns and forms described by this paragraph are those returns and forms that re- late 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 52 of title 26, including AFT Form 5000.24 and United States Customs Form 7501 under currently applicable regula- tions. (3) Effect of failure to provide required infor- mation Any person that knowingly fails to provide information required under this subsection or that provides false information under this sub- section shall be subject to the penalties de- scribed in section 1003 of title 18. The Sec- retary may also assess against the person a civil penalty in an amount not to exceed two percent of the value of the kind of tobacco products manufactured or imported by the person during the fiscal year in which the vio- lation occurred, as determined by the Sec- retary. (i) Challenge to assessment (1) Appeal to Secretary A manufacturer or importer subject to this section may contest an assessment imposed on the manufacturer or importer under this sec- tion by notifying the Secretary, not later than 30 business days after receiving the assess- ment notification required by subsection (d), that the manufacturer or importer intends to contest the assessment. (2) Information Not later than 180 days after October 22, 2004, the Secretary shall establish by regulation a procedure under which a manufacturer or im- porter contesting an assessment under this subsection may present information to the Secretary to demonstrate that the assessment applicable to the manufacturer or importer is incorrect. In challenging the assessment, the manufacturer or importer may use any infor- mation that is available, including third party data on industry or individual company sales volumes. (3) Revision If a manufacturer or importer establishes that the initial determination of the amount Page 446 TITLE 7—AGRICULTURE § 518e 1 See References in Text note below. of an assessment is incorrect, the Secretary shall revise the amount of the assessment so that the manufacturer or importer is required to pay only the amount correctly determined. (4) Time for review Not later than 30 days after receiving notice from a manufacturer or importer under para- graph (1), the Secretary shall— (A) decide whether the information pro- vided to the Secretary under paragraph (2), and any other information that the Sec- retary determines is appropriate, is suffi- cient to establish that the original assess- ment was incorrect; and (B) make any revisions necessary to en- sure 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 The regulations promulgated by the Sec- retary under paragraph (2) shall provide for the immediate payment by a manufacturer or importer challenging an assessment of that portion of the assessment that is not in dis- pute. The manufacturer and importer may place into escrow, in accordance with such regulations, only the portion of the assess- ment being challenged in good faith pending final determination of the claim. (j) Judicial review (1) In general Any manufacturer or importer aggrieved by a determination of the Secretary with respect to the amount of any assessment may seek re- view of the determination in the United States District Court for the District of Columbia or for the district in which the manufacturer or importer resides or has its principal place of business at any time following exhaustion of the administrative remedies available under subsection (i). (2) Time limits Administrative remedies shall be deemed ex- hausted if no decision by the Secretary is made within the time limits established under subsection (i)(4). (3) Excessive assessments The court shall restrain collection of the ex- cessive portion of any assessment or order a refund of excessive assessments already paid, along with interest calculated at the rate pre- scribed in section 3717 of title 31, if it finds that the Secretary’s determination is not sup- ported by a preponderance of the information available to the Secretary. (k) Termination date The authority provided by this section to im- pose assessments terminates on September 30, 2014. (Pub. L. 108–357, title VI, § 625, Oct. 22, 2004, 118 Stat. 1529.) Editorial Notes REFERENCES IN TEXT The Harmonized Tariff Schedule of the United States, referred to in subsec. (a)(2)(B), is not set out in the Code. See Publication of Harmonized Tariff Schedule note set out under section 1202 of Title 19, Customs Du- ties. 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. § 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 To- bacco 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 notwith- standing any other provision of law, the Sec- retary shall use amounts in the Tobacco Trust Fund, in such amounts as the Secretary deter- mines are necessary— (A) to make payments under sections 518a and 518b of this title; (B) to provide reimbursement under sec- tion 519(c) of this title; (C) to reimburse the Commodity Credit Corporation for costs incurred by the Com- modity Credit Corporation under paragraph (2); and (D) to make payments to financial institu- tions to satisfy contractual obligations under section 518a or 518b of this title. (2) Expenditures by Commodity Credit Cor- poration Notwithstanding any other provision of law, the Secretary shall use the funds, facilities, and authorities of the Commodity Credit Cor- poration to make payments described in para- graph (1). Not later than January 1, 2015, the Secretary shall use amounts in the Tobacco Trust Fund to fully reimburse, with interest, the Commodity Credit Corporation for all funds of the Commodity Credit Corporation expended under the authority of this para- graph. Administrative costs incurred by the Secretary or the Commodity Credit Corpora- tion to carry out this title 1 may not be paid using amounts in the Tobacco Trust Fund. (c) Investment of amounts (1) In general The Commodity Credit Corporation shall in- vest such portion of the amounts in the To- bacco Trust Fund as are not, in the judgment of the Commodity Credit Corporation, re- quired to meet current expenditures.