[Federal Register Volume 76, Number 224 (Monday, November 21, 2011)]
[Notices]
[Pages 71934-71935]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-30032]


-----------------------------------------------------------------------

DEPARTMENT OF AGRICULTURE

Farm Service Agency


Tobacco Transition Payment Program; Availability of Current 
Assessment Methods Determination Document

AGENCY: Commodity Credit Corporation and Farm Service Agency, USDA.

ACTION: Notice of availability of determinations.

-----------------------------------------------------------------------

SUMMARY: The Commodity Credit Corporation (CCC) is making available a 
document regarding two consolidated determinations with respect to the 
current methods used to calculate manufacturer and importer assessments 
that fund the Tobacco Transition Payment Program (TTPP). It is in 
response to challenges raised in two lawsuits--Prime Time International 
Co. v. Vilsack et al. and Philip Morris USA Inc. v. Vilsack et al.--
involving the terms and construction of the Fair and Equitable Tobacco 
Reform Act of 2004 (FETRA). Both matters involve the question of what 
is a ``share of gross domestic volume'' within the meaning of FETRA and 
the question of what is to be done with those ``shares'' in calculating 
program liabilities. Because the outcomes of these two lawsuits have 
the potential to affect not only the plaintiffs, but also all other 
importers and manufacturers, public availability of a USDA 
determination is warranted.

FOR FURTHER INFORMATION CONTACT: Jane Reed, phone: (202) 720-6782; 
mail: Farm Service Agency, USDA, ATTN: Jane Reed, U.S. Department of 
Agriculture, Farm Service Agency, Economic and Policy Analysis Staff, 
Mail stop 0515, 1400 Independence Ave. SW., Washington DC 20250-0515; 
email: [email protected]; fax: (202) 720-8120. Persons with 
disabilities who require alternative means for communication 
information (Braille, large print, audiotape, etc.) should contact 
USDA's TARGET Center at (202) 720-2600 (voice and TDD).

SUPPLEMENTARY INFORMATION: FETRA (7 U.S.C. 518-519a), which was 
contained

[[Page 71935]]

in the American Jobs Creation Act of 2004 (Pub. L. 108-357) authorized 
the TTPP following the termination of the longstanding tobacco price 
support program. The 10-year TTPP (operating from fiscal year (FY) 2005 
through FY 2014) makes annual payments of about $1 billion to those who 
held tobacco quotas and produced tobacco at the time FETRA established 
TTPP. These payments are funded via assessments that are collected from 
domestic tobacco manufacturers and importers.
    USDA uses a two-step process for calculating these assessments for 
each manufacturer and importer. First, the total amount of assessment 
liability is divided among six classes of tobacco products (cigarettes, 
cigars, snuff, roll-your-own, chewing, and pipe). Second, liability is 
further divided among the individual manufacturers and importers based 
on each company's market share within each class. For both steps, a 
party's or class' ``share'' of ``gross domestic volume''--that volume 
being defined in FETRA as the totality of those products of all 
categories removed into domestic commerce and not exempt from Federal 
excise tax--is a key element. How these terms are interpreted, and what 
a party's or class' ``share'' is of that ``gross domestic volume'' 
within the meaning of FETRA are key elements in both disputes.
    USDA believes, after considering the matter, that the continued use 
of current procedure to calculate manufacturer and importer assessments 
is warranted. A detailed explanation of the issues and USDA's rationale 
is available in the USDA determination at http://www.fsa.usda.gov/FSA/webapp?area=home&subject=ecpa&topic=fta-ta. The determination addresses 
the rulemaking matter covered in a Federal Register document published 
March 22, 2011 (76 FR 15859-15864) with respect to the ``Step B'' 
calculations. The determination also addresses an administrative 
petition regarding ``Step A.'' These terms and the nature of the 
disputes are described in detail in the document available at the link 
noted above.

    Signed on November 16, 2011.
Bruce Nelson,
Administrator, Farm Service Agency.
[FR Doc. 2011-30032 Filed 11-18-11; 8:45 am]
BILLING CODE 3410-05-P