[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1825 Introduced in House (IH)]






109th CONGRESS
  1st Session
                                H. R. 1825

To amend the Internal Revenue Code of 1986 to exclude from gross income 
the first $5,000 of transitional payments under the Fair and Equitable 
                      Tobacco Reform Act of 2004.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 26, 2005

 Mr. Butterfield introduced the following bill; which was referred to 
                    the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to exclude from gross income 
the first $5,000 of transitional payments under the Fair and Equitable 
                      Tobacco Reform Act of 2004.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Small Tobacco Farmer Tax Relief Act 
of 2005''.

SEC. 2. EXCLUSION OF PORTION OF TRANSITIONAL PAYMENTS UNDER FAIR AND 
              EQUITABLE TOBACCO REFORM ACT OF 2004.

    (a) General Rule.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to items specifically excluded 
from gross income) is amended by inserting after section 139A the 
following new section:

``SEC. 139B. TRANSITIONAL PAYMENTS UNDER FAIR AND EQUITABLE TOBACCO 
              REFORM ACT OF 2004.

    ``(a) General Rule.--Gross income shall not include any qualified 
tobacco payment.
    ``(b) Limitations.--
            ``(1) Annual limitation.--Except as provided by paragraph 
        (2), the amount excluded from gross income under subsection (a) 
        for a taxable year shall not exceed $5,000.
            ``(2) Assignment of contract payments to financial 
        institution.--In the case of an assignment to a financial 
        institution of the right to receive contract payments under 
        section 624(e) of the Fair and Equitable Tobacco Reform Act of 
        2004 (7 U.S.C. 518c(e)), the amount excluded from gross income 
        under subsection (a) for a taxable year shall not exceed the 
        lesser of--
                    ``(A) the consideration received under such 
                assignment reduced by the aggregate amount excluded 
                under this section for all previous taxable years, and
                    ``(B) $50,000.
            ``(3) Aggregate amount excluded.--The aggregate amount 
        excluded from gross income under this section with respect to 
        any producer of quota tobacco and any tobacco quota holder 
        shall not exceed $50,000.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Qualified tobacco payment.--
                    ``(A) In general.--For purposes of subsection (a), 
                the term `qualified tobacco payment' means any payment 
                under section 622 or 623 of the Fair and Equitable 
                Tobacco Reform Act of 2004 (7 U.S.C. 518a and 518b).
                    ``(B) Exception.--Such term does not include any 
                payment under section 624(e) of the Fair and Equitable 
                Tobacco Reform Act of 2004 (7 U.S.C. 518c(e)) pursuant 
                to an assignment to a financial institution of the 
                right to receive contract payments under such Act.
            ``(2) Producer of quota tobacco; tobacco quota holder.--The 
        terms `producer of quota tobacco' and `tobacco quota holder' 
        have the meanings given such terms by section 621 of the Fair 
        and Equitable Tobacco Reform Act of 2004 (7 U.S.C. 518).
    ``(d) Termination.--This section shall not apply to taxable years 
beginning after December 31, 2014.''.
    (b) Clerical Amendment.--The table of sections for such part is 
amended by inserting after the item relating to section 139A the 
following new item:

``Sec. 139B. Transitional payments under Fair and Equitable Tobacco 
                            Reform Act of 2004.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to payments received December 31, 2004.
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