[Code of Federal Regulations]
[Title 7, Volume 7, Parts 700 to 899]
[Revised as of January 1, 2001]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR723.219]

[Page 132-136]
 
                          TITLE 7--AGRICULTURE
 
                            CHAPTER VII--FARM
                SERVICE AGENCY, DEPARTMENT OF AGRICULTURE
 
PART 723--TOBACCO--Table of Contents
 
     Subpart B--Allotments, Quotas, Yields, Transfers, Release and 
           Reapportionment, History Acreages, and Forfeitures
 
Sec. 723.219  Forfeiture of burley tobacco marketing quota.

    (a) Determination of quota subject to forfeiture. (1) For purposes 
of paragraph (b) of this section, the phrase ``owns a farm'' means 
ownership of:
    (i) A farm as constituted under part 718 of this chapter, if the 
entire farm shares a common ownership; or

[[Page 133]]

    (ii) All of the land within a farm which shares a common ownership 
if the parent farm consists of tracts of land having separate 
ownerships.
    (2) For purposes of paragraph (b) of this section, the county FSA 
committee shall apportion, in accordance with the provisions of part 718 
of this chapter, the burley tobacco quota assigned to a farm between the 
various tracts of land which are separately owned by:
    (i) A person not using the land on the farm for which a burley 
tobacco marketing quota is established for agricultural purposes.
    (ii) A person who uses the land on the farm for which the burley 
tobacco marketing quota is established for agricultural purposes or for 
educational, instructional, or demonstrational purposes.
    (3) The farm marketing quota determined under this section for each 
farm or tract, as applicable, shall be the amount of quota subject to 
forfeiture under this section.
    (b) Person who does not use the land on the farm for which the 
marketing quota is established for agricultural purposes or does not use 
such marketing quota for educational, instructional, or demonstrational 
purposes. For purposes of this paragraph, the term ``person'' means a 
person as defined in part 718 of this chapter, including any 
governmental entity, public utility, educational institution, religious 
institution or joint venture (but not including any farming operation 
involving only spouses), but excluding any individual.
    (1) Required forfeiture. With respect to any person owning a farm 
for which a burley tobacco marketing quota is established, if the county 
FSA committee determines that such person does not use the land on such 
farm for agricultural purposes, or does not use such burley tobacco 
marketing quota for educational, instructional, or demonstrational 
purposes, such person shall forfeit such quota which is not sold on or 
before December 1 of the year after any year for which the county FSA 
committee makes such determination.
    (2) Agricultural purposes. Land on the farm for which a burley 
tobacco marketing quota is established shall be considered to be used 
for agricultural purposes if the county FSA committee determines that:
    (i) In the current year or either of the 2 preceding years such land 
is used for the production of:
    (A) Row crops of any type;
    (B) Livestock or poultry (including pasture and forage for 
livestock);
    (C) Trees (including orchards and vineyards); or
    (D) Hay or native grasses on open land; or
    (ii) In the current year such farm is owned by an educational 
institution which uses such burley tobacco marketing quota solely for 
educational, instructional, or demonstrational purposes.
    (3) Documentation. Within 30 days after a written request is made by 
the county FSA committee, or within such extended time as may be granted 
by the county FSA committee, a person must submit such documentation as 
may be requested to support a determination that the provisions of 
paragraph (b)(1) of this section have been met with respect to such 
person. Upon failure of such person to timely respond to this request, 
the county FSA committee shall determine that the person does not use 
the land on the farm for agricultural purposes, or does not use the 
burley tobacco marketing quota for educational, instructional, or 
demonstrational purposes.
    (c) Buyers of quota fail to share in the risk of production.
    (1) Forfeiture required. If any person buys burley tobacco quota and 
such person fails to share in the risk of producing the tobacco which 
was planted subject to such quota during any of the 3 crop years 
beginning with the crop year for which the purchase became effective, 
such person shall forfeit the purchased quota if it is not sold on or 
before December 31 of the year after the crop year in which such crop 
was planted. However, any purchaser or subsequent purchaser of quota 
required to be sold under the mandatory sale to prevent forfeiture, 
provisions of paragraph (b) of this section shall be required to share 
in the risk of production of such quota for five crop years beginning 
with the crop year for which the purchase became effective.

[[Page 134]]

    (2) Failure to utilize purchased quota for the production of tobacco 
shall not result in the forfeiture of such quota, but the three year 
period and the five year period which is specified in paragraph (c)(1) 
of this section shall be extended 1 year for each year for which the 
quota is not utilized.
    (3) Reduction for failure to share in the risk of production. The 
effective quota shall be reduced, but not below zero pounds, for leasing 
and marketing quota purposes only, to the extent of the purchased quota 
for each crop after the crop year in which the buyer of such quota fails 
to share in the risk of producing a crop of tobacco which is subject to 
such quota.
    (4) Determining forfeited amount. If only part of the quota on a 
farm is attributable to a purchased quota, the amount of the farm 
marketing quota which must be forfeited under paragraph (c) of this 
section shall be determined by increasing or decreasing each respective 
purchase of farm marketing quota for the farm to reflect changes in 
national quota factors since the purchase occurred and subtracting the 
pounds of quota which have been sold to prevent forfeiture.
    (d) Hearing. Before any forfeiture of quota becomes effective under 
the provisions of this section, the county FSA committee shall:
    (1) Schedule a hearing for the affected person.
    (2) Notify the affected person of the hearing at least 10 days in 
advance of the hearing.
    (3) Make a determination, on the basis of the evidence presented at 
the hearing by or on behalf of the affected person and by or on behalf 
of the county FSA committee as to whether or not:
    (i) Any of the conditions for forfeiture specified in this section 
exist; and
    (ii) The affected person knowingly failed to take steps to prevent 
forfeiture of allotment and quota when such forfeiture conditions have 
been determined to exist with respect to the provisions of paragraph (b) 
of this section.
    (iii) The affected person knowingly failed to take steps to prevent 
forfeiture of burley tobacco quota.
    (4) Notify the affected persons of the county FSA committee 
determination and, if forfeiture of quota is to be required, afford such 
person an opportunity to appeal to a review committee in accordance with 
the provision of part 711 of this chapter.
    (e) Apportionment of data and determination of quota after 
forfeiture. (1) Apportionment of data. The pounds of farm marketing 
quota retained on the forfeiting farm after the forfeiture shall be 
divided by the farm marketing quota established for the farm before the 
forfeiture to determine a factor for apportioning farm data. The data to 
be retained on the forfeiting farm shall be determined by multiplying 
the factor by the following data for the forfeiting farm:
    (i) Overmarketings which have been subtracted when determining the 
effective farm marketing quota of the forfeiting farm.
    (ii) Pounds of quota transferred from the forfeiting farm by lease 
or by the owner in the current year.
    (iii) Pounds of quota reduced in the current year for a marketing 
quota violation in a prior year.
    (iv) Previous year's effective farm marketing quota.
    (v) Previous year's marketings.
    (vi) Previous year's farm marketing quota.
    (vii) Pounds of quota transferred to the farm by lease or by owner 
in the previous year.

The portion of the forfeiting farm data which shall be included in a 
forfeiture pool for the county shall be determined by subtracting the 
pounds of each respective item of farm data which are retained on the 
forfeiting farm from the pounds of the respective item of data which 
were established for the forfeiting farm before forfeiture.
    (2) Forfeiture pool. The data for the forfeiture pool shall be added 
to any previous data in the forfeiture pool.
    (3) Quota after forfeiture. After adjustment of data, the effective 
farm marketing quota shall be determined in accordance with the 
provisions of Sec. 723.206 of this part for the forfeiting farm.
    (f) Forfeiture pool. (1) Establishing forfeiture pool. A forfeiture 
pool shall be established in each county in which a

[[Page 135]]

forfeiture of quota occurs. The forfeiture pool shall be increased to 
include data for each forfeiture and shall be decreased for each 
reallocation in order to reflect any forfeited or reallocated amounts 
of:
    (i) Farm marketing quota for the current year.
    (ii) Quota reduced for marketing quota violations.
    (iii) Quota transferred from the forfeiting farm by lease or by the 
owner.
    (iv) Previous year's effective farm marketing quota.
    (v) Previous year's marketings.
    (2) Adjustment of data in forfeiture pool. At the beginning of the 
current year, the data in the forfeiture pool shall be adjusted by the 
factor used in determining quotas for old farms. Quota data in the 
forfeiture pool shall be decreased each time any burley tobacco quota is 
reallocated from the forfeiture pool. Such decrease in the quota data 
will be made in the same proportion as the pounds of quota which are 
reallocated from the pool are to the pounds of quota which were in the 
pool before the reallocation.
    (g) Reallocation of quota from forfeiture pool. (1) Application. In 
order to establish eligibility to receive quota from the forfeiture pool 
in the current year, an application must be made on a form approved by 
the Deputy Administrator. Such application must be filed:
    (i) Who may file. By an active producer.
    (ii) When to file. On or before April 30. The State FSA committee 
may establish an earlier date if notice of such earlier date is given in 
time for interested applicants to file an application by the earlier 
date.
    (iii) Where to file. At the county FSA office which serves the farm 
for which the application is filed.
    (2) Eligibility of applicant. In order for an applicant to be 
eligible for quota from the forfeiture pool, the county FSA committee 
must determine that:
    (i) The application was filed timely.
    (ii) The applicant is an active tobacco producer.
    (iii) During the current year or during the 4 years preceding the 
current year, the applicant has not sold or forfeited quota from any 
farm.
    (3) Time to reallocate. The county FSA committee shall:
    (i) Not reallocate any quota from the forfeiture pool until the time 
has passed for filing an application for forfeited quota for the current 
year.
    (ii) Reallocate any quota from the forfeiture pool only during the 
30-day period beginning on the day after the final day for filing an 
application for quota from the forfeiture pool.
    (4) Reallocation by county FSA committee. Reallocation of any burley 
tobacco quota shall be made by the county FSA committee. In making its 
determination of the amounts of quota to reallocate, the county FSA 
committee may consider the size of the current quotas on the farms of 
the eligible applicants, the length of time the applicants have been 
farming tobacco, the type of farming done by the applicants (i.e., 
livestock, grain, or other commodities), previous leasing history of the 
applicants, and such other factors which in the judgment of the county 
FSA committee should be considered. A burley tobacco quota may be 
reallocated to a farm which currently does not have a burley tobacco 
quota. A factor shall not be used to reallocate quota between all 
eligible applicants.
    (5) Basis for reallocation from forfeiture pool. Reallocation from 
the forfeiture pool shall be on the basis of pounds of farm marketing 
quota.
    (6) Amount of quota to be reallocated. The county FSA committee may 
reallocate all or part of the quota in the forfeiture pool. The minimum 
amount of quota which may be reallocated to an eligible applicant is the 
total amount of quota in the pool or 100 pounds, whichever is less. The 
maximum amount is 500 pounds. However, up to 1,500 pounds may be 
allocated with State FSA committee concurrence.
    (7) Data for receiving farm. All data for the forfeiture pool shall 
be apportioned to the receiving farm in the proportion that the 
reallocated farm marketing quota is to the total farm marketing quota in 
the forfeiture pool before the reallocation. The data determined for the 
receiving farm in accordance with the provisions of this paragraph shall 
be added to any previous data for the receiving farm.

[[Page 136]]

    (8) Quota for receiving farm. After any adjustments which are made 
in accordance with the provisions of this section, the effective farm 
marketing quota shall be determined for the receiving farm.
    (h) Forfeiture of reallocated quota. Any burley tobacco quota which 
is reallocated in accordance with the provisions of this section shall 
be forfeited if the applicant to whom the quota is reallocated fails to 
share in the risk of producing a crop of tobacco which is subject to 
such quota during any of the 3 years beginning with the crop year during 
which the quota is reallocated. The amount of farm marketing quota which 
must be forfeited shall be determined in the same manner which is 
specified in paragraph (c)(4) of this section with respect to the 
forfeiture of purchased quota. Any forfeiture of quota shall occur on 
December 1 of the year in which the applicant fails to share in the risk 
of production of tobacco which is produced subject to such quota. While 
the failure to utilize a quota shall not subject the quota to 
forfeiture, the 3 year period which is specified in this paragraph shall 
be extended by 1 year for each year in which the quota is not utilized.
    (i) Successor-in-interest. A successor-in-interest shall be subject 
to the provisions of this section in the same manner and to the same 
extent as would be applicable to the person whose interest has been 
assumed by such successor-in-interest.
    (1) New owner of farm. The new owner of a farm on which a portion or 
all of the farm marketing quota for such farm was either purchased and/
or was reallocated from forfeited quota shall become the successor-in-
interest to the previous owner of the farm. However, if a farm is 
acquired by a new owner on or before June 30 of the current crop year 
and such owner would otherwise be required to sell or forfeit the farm 
marketing quota because in the preceding crop year the owner of such 
quota did not share in the risk of producing a crop of tobacco which was 
subject to such purchased or reallocated quota, the new owner may be 
considered the buyer of the quota instead of being considered as a 
successor-in-interest to the previous owner of the farm. However, the 
new owner must furnish to the county FSA committee on or before June 30 
of the current year a certification that such owner intends to become an 
active burley tobacco producer. Any purchased or reallocated quota, 
which is acquired by a new owner who is not considered to be the buyer 
of the quota in accordance with the provisions of this paragraph, shall 
be subject to the same terms and conditions with respect to forfeiture 
which would be applicable if the new owner actually had purchased the 
quota at the time the farm was acquired.
    (2) Buyer no longer shares in risk of production. The owner of a 
farm shall become the successor-in-interest to the buyer of burley 
tobacco quota which was transferred to a farm but which was not owned by 
such buyer if the buyer ceases to share in the risk of production of 
burley tobacco produced on the farm.

[55 FR 39914, Oct. 1, 1990, as amended at 56 FR 21442, May 9, 1991]