§ 1445-3. — Purchase of inventory stock.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 7USC1445-3]
TITLE 7--AGRICULTURE
CHAPTER 35A--PRICE SUPPORT OF AGRICULTURAL COMMODITIES
SUBCHAPTER II--BASIC AGRICULTURAL COMMODITIES
Sec. 1445-3. Purchase of inventory stock
Notwithstanding any other provision of law, in order to reduce or
eliminate the excessive inventories of Flue-cured and Burley tobacco
held by associations from the 1976 through 1984 crops, and in order to
provide for the orderly disposition of such excessive inventories of
tobacco in a manner that will not disrupt the orderly marketing of new
tobacco crops and will minimize any losses to the Federal Government:
(a) Sale of inventory stock
(1) The producer-owned cooperative marketing association that has
entered into a loan agreement with the Commodity Credit Corporation to
make price support available to producers of Flue-cured tobacco shall
offer to sell the stocks of Flue-cured tobacco of the association from
the 1976 through 1984 crops as provided in this section.
(2) Each producer-owned cooperative marketing association that has
entered into a loan agreement with the Commodity Credit Corporation to
make price support available to producers of Burley tobacco shall offer
to sell its stocks of Burley tobacco from the 1982 and 1984 crops as
provided in this section.
(3)(A)(i) Not later than 30 days after April 7, 1986, the Commodity
Credit Corporation shall acquire title to the Burley tobacco from the
1983 crop that is pledged as security for loans on such tobacco by
calling the loans on such tobacco.
(ii) The Corporation shall, then, offer such tobacco for sale at
such times, in such quantities, and subject to such conditions as the
Corporation considers appropriate.
(B) If the Commodity Credit Corporation has not sold all of the
stocks of the 1983 crop of Burley tobacco within 2 years from the date
the Corporation calls the loans on such tobacco, the Corporation may
offer to sell to domestic manufacturers of cigarettes the remaining
stocks of such tobacco as provided in this section.
(b) Sale prices
(1)(A) The stocks of Flue-cured tobacco from the 1976 through 1984
crops shall be offered for sale at the base prices, including carrying
charges, in effect as of the date of the offer, reduced by--
(i) 90 percent for Flue-cured tobacco from the 1976 through 1981
crops; and
(ii) 10 percent for Flue-cured tobacco from the 1982 through
1984 crops.
(B) The purchasers of the stocks of Flue-cured tobacco from the 1976
through 1984 crops shall pay the full carrying charges that have accrued
to such tobacco from the date of the offer made under this section to
the date that such tobacco is removed from the inventory of the
association.
(2)(A) The stocks of Burley tobacco from the 1982 crop shall be
offered for sale at the listed base price in effect as of July 1, 1985.
(B) The stocks of Burley tobacco from the 1984 crop shall be offered
for sale at the costs of the association for such tobacco as of April 7,
1986.
(C) The purchasers of the stocks of Burley tobacco from the 1982
crop shall pay the full carrying charges that have accrued to such
tobacco.
(D) The purchasers of the stocks of Burley tobacco from the 1984
crop shall pay the full carrying charges that have accrued to such
tobacco from April 7, 1986, to the date such tobacco is removed from the
inventories of the associations.
(3)(A) After the 2-year period specified in subsection (a)(3)(B) of
this section has expired, if the Commodity Credit Corporation offers to
sell the stocks of the Corporation of Burley tobacco from the 1983 crop
to domestic manufacturers of cigarettes, such stocks shall be offered
for sale at the costs of the association, including carrying charges, as
of the date on which the Corporation calls the loans on such tobacco,
reduced by 90 percent.
(B) Neither tobacco producers nor tobacco purchasers shall be
responsible for carrying charges that accrue to the 1983 crop of Burley
tobacco after the date on which the Commodity Credit Corporation calls
the loans on such tobacco.
(c) Terms of agreements
(1)(A) Each domestic manufacturer of cigarettes may enter into
agreements to purchase inventory stocks of Flue-cured and Burley
tobacco, in accordance with this section.
(B) To be eligible for the reductions in price specified in this
section, such manufacturer shall enter into such agreements as soon as
practicable, but not later than 90 days after April 7, 1986, except
that, with respect to the 1983 crop of Burley tobacco, if the
Corporation offers to sell the stocks of such tobacco pursuant to
subsection (b)(3)(A) of this section, such agreements shall be entered
into as soon as practicable, but not later than 90 days after the end of
the 2-year period referred to in subsection (a)(3)(B) of this section.
(C)(i) Such agreements shall provide that, over a period of time,
each participating domestic manufacturer of cigarettes shall purchase a
percentage of the stocks of Flue-cured and Burley tobacco held--
(I) by the producer-owned cooperative marketing associations at
the close of the 1984 marketing year; or
(II) in the case of the 1983 crop of Burley tobacco, by the
Commodity Credit Corporation at the time the Corporation offers such
tobacco for sale to domestic manufacturers of cigarettes under this
section.
(ii) The period of time referred to in clause (i) may not exceed--
(I) in the case of Flue-cured tobacco, 8 years from April 7,
1986;
(II) in the case of Burley tobacco from the 1982 and 1984 crops,
5 years from April 7, 1986; and
(III) in the case of the 1983 crop of Burley tobacco, 5 years
from the end of the 2-year period referred to in subsection
(a)(3)(B) of this section.
(2)(A)(i) The percentage to be purchased by each participating
manufacturer shall be at least equal to the respective percentage of the
participating manufacturer of the total quantity of net cigarettes
manufactured for use as determined by the Secretary of Agriculture under
this paragraph on the basis of the monthly reports (``Manufacturer of
Tobacco Products--Monthly Reports'') submitted by manufacturers of
tobacco products to the Tax and Trade Bureau of the Department of the
Treasury.
(ii) The Secretary of Agriculture shall request from the Secretary
of the Treasury copies of such monthly reports necessary to make the
determinations required under this section.
(iii) Notwithstanding any other provision of law, the Secretary of
the Treasury may release and disclose such information to the Secretary
of Agriculture.
(B) ``Net cigarettes manufactured for use'' shall be computed by
subtracting--
(i) the cumulative figures entered for large and small
cigarettes in item 16f of ATF Form 3068 (``Reduction to tobacco'');
from
(ii) the cumulative figures entered for large and small
cigarettes in item 7 of such form (``Manufactured'').
(C)(i) The percentage to be purchased by each participating
manufacturer shall be determined--
(I) on April 7, 1986; and
(II) annually thereafter over the course of the respective buy-
out periods specified in this subsection.
(ii) Such percentage shall be determined by dividing--
(I) the average net cigarettes manufactured by a manufacturer
for use for the 12-month period immediately preceding the
appropriate determination date (April 7, 1986, and annually
thereafter over the course of the respective buy-out periods
specified in this subsection); by
(II) the aggregate average net cigarettes manufactured by all
domestic cigarette manufacturers for use for such 12-month period.
(D)(i) The quantity of tobacco to be purchased by each participating
manufacturer shall be determined annually.
(ii) Such quantity shall be based on--
(I) the percentage of net cigarettes of a manufacturer
manufactured for use, as determined under subparagraph (C);
multiplied by
(II) the appropriate annual quantity to be withdrawn from the
inventories of the associations or the Commodity Credit Corporation.
(iii) The appropriate annual quantity to be withdrawn from
inventories shall be--
(I) 12\1/2\ percent of the inventories of Flue-cured tobacco
from the 1976 through 1984 crops on hand on April 7, 1986;
(II) 20 percent of the inventories of Burley tobacco from the
1982 and 1984 crops on hand on April 7, 1986; and
(III) 20 percent of the inventories of Burley tobacco from the
1983 crop held by the Commodity Credit Corporation on the date that
is 2 years after the call of the loans on such tobacco by the
Corporation.
(E) Any purchases by a manufacturer from the inventories of the
associations or from the Commodity Credit Corporation for a crop covered
by this section in any year of the buy-out period that exceed the
quantity of the purchases of the manufacturer required under the
agreement, as determined under this section, shall be applied against
future purchases required of such manufacturer.
(3) In carrying out this section, manufacturers may confer with one
another and, separately or collectively, with associations, the
Secretary of Agriculture, and the Commodity Credit Corporation, as may
be necessary or appropriate to carry out this section and the purposes
of this subtitle.\1\
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\1\ See References in Text note below.
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(d) Approval of agreements
(1)(A) Each agreement entered into under this section shall be
submitted to the Secretary of Agriculture for review and approval.
(B) In the case of an agreement to purchase tobacco from the
inventory of a producer association, the agreement shall be submitted by
the association.
(C) No agreement may become effective until approved by the
Secretary.
(2) The Secretary of Agriculture shall not approve any agreement
submitted under this section unless the Secretary has determined that--
(A) the agreement--
(i) will not unduly impair or disrupt the orderly marketing
of current and future tobacco crops during the term of the
agreement; and
(ii) is otherwise consistent with the purposes of this
subtitle; \1\ and
(B) the price and other terms of sale are uniform and
nondiscriminatory among various purchasers.
(e) Disclosure
The limitations on disclosure set forth in subsections (c) and (d)
of section 1314g of this title shall apply to information submitted by
domestic manufacturers of cigarettes under this section with respect to
net cigarettes manufactured for use, including information provided on
ATF Form 3068. Any officer or employee of the Department of Agriculture
who violates such limitations on disclosure shall be subject to the
penalties set forth in section 1314g(c)(4) of this title.
(Pub. L. 99-272, title I, Sec. 1109, Apr. 7, 1986, 100 Stat. 95; Pub. L.
107-296, title XI, Sec. 1112(b), Nov. 25, 2002, 116 Stat. 2276.)
References in Text
This subtitle, referred to in subsecs. (c)(3) and (d)(2)(A)(ii), is
subtitle B (Secs. 1101-1112) of title I of Pub. L. 99-272, Apr. 7, 1986,
100 Stat. 83, which enacted sections 1314g, 1314h, and 1445-3 of this
title, amended sections 511d, 1301, 1312, 1314c, 1314e, 1372, 1445,
1445-1, and 1445-2 of this title, and enacted provisions set out as
notes under sections 1301, 1314c, 1314e, 1314g, 1314h, 1372, 1445, 1445-
1, and 1445-2 of this title. For complete classification of this
subtitle to the Code, see Tables.
Codification
Section was enacted as part of the Consolidated Omnibus Budget
Reconciliation Act of 1985, and not as part of the Agricultural Act of
1949 which is classified principally to this chapter. For complete
classification of the 1949 Act to the Code, see Short Title note set out
under section 1421 of this title and Tables.
Amendments
2002--Subsec. (c)(2)(A)(i). Pub. L. 107-296 substituted ``by
manufacturers of tobacco products to the Tax and Trade Bureau'' for
``(on ATF Form 3068) by manufacturers of tobacco products to the Bureau
of Alcohol, Tobacco and Firearms''.
Effective Date of 2002 Amendment
Amendment by Pub. L. 107-296 effective 60 days after Nov. 25, 2002,
see section 4 of Pub. L. 107-296, set out as an Effective Date note
under section 101 of Title 6, Domestic Security.
Rulemaking Procedures
For implementation of this section by the Secretary of Agriculture
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 Referred to in Other Sections
This section is referred to in section 1445 of this title.
