{ "id": "RL31790", "type": "CRS Report", "typeId": "REPORTS", "number": "RL31790", "active": false, "source": "EveryCRSReport.com, University of North Texas Libraries Government Documents Department", "versions": [ { "source": "EveryCRSReport.com", "id": 103344, "date": "2004-11-12", "retrieved": "2016-04-07T20:04:20.865412", "title": "Tobacco Quota Buyout Proposals in the 108th Congress", "summary": "On October 22, 2004, the tobacco quota buyout was signed into law. Title VI of P.L. 108-357 \nis\nknown as the Fair and Equitable Tobacco Reform Act of 2004. This legislation eliminated the\ntobacco quota program and compensated active producers and absentee quota owners for the lost\nvalue. The concept of a quota buyout was not new, but it gained political momentum after being\nendorsed in the final report of a presidential commission on tobacco, Tobacco at a Crossroads,\nA\nCall for Action (May 14, 2001), and by the leading U.S. cigarette manufacturer, Philip Morris. \nSeveral quota bills were introduced in the 107th Congress without subsequent legislative action. \nSupporters of a buyout and legislative sponsors again put the proposal on the legislative agenda of\nthe 108th Congress by introducing several differing bills.\n Eventually, H.R. 4033 (Jenkins; March 25, 2004) and S. 1490 \n(McConnell; July 30, 2003) were attached to unrelated tax legislation ( H.R. 4520 in the\nHouse and S. 1637 in the Senate), which was taken up by conferees on October 5, 2004. \nThese bills proposed to eliminate tobacco quotas and the price support loan program. As\ncompensation, quota owners (including absentee owners) and active producers would receive lump\nsum payments. Active producers were to receive $7 per pound in the House version or $8 per pound\nin the Senate version for the quota they owned in 2002, plus $3 per pound in the House version or\n$4 per pound in the Senate version for the quantity of tobacco they were allowed to produce. Most\nproducers grow more than the quota they own because they lease quota from other landlords. The\nabsentee landlords also were be paid for the quota they owned in 2002.\n The estimated cost of the House and Senate bills was, respectively, $9.6 billion and $12 billion. \nThe source of funding for the two bills differed, coming from the federal treasury in the House bill\nand from tobacco product manufacturers and importers in the Senate bill.\n Many public health advocates and Philip Morris strongly supported a tobacco quota buyout\naccompanied by new legal authority for the Food and Drug Administration (FDA) to regulate\ntobacco products. The proposed FDA authority was included in identical bills in the House and\nSenate ( H.R. 4433 , Davis-Waxman; and S. 2461 , DeWine-Kennedy). The\nFDA authority also was included in the Senate version of the tax bill, but not in the House version,\nwhere there was strong opposition.\n The Chairman's mark for the conference committee on H.R. 4520 included a\ntobacco title (Title VI) that closely matched the House version, H.R. 4033 , with quota\nbuyout payments of $7 per pound and active producer payments of $3 per pound. Under the\nconference agreement, funding would come from assessments on tobacco product manufacturers and\nimporters (as proposed in S. 1490 ). FDA regulatory authority over tobacco products,\nhowever, was not included.\n This report is intended to serve as a history and evolution of the tobacco buyout. 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