---
kind: "section"
citation: "7 U.S.C. § 519"
title: "7"
title_heading: "Agriculture"
number: "519"
heading: "Treatment of tobacco loan pool stocks and outstanding loan costs"
release: "119-102"
url: "https://uscodex.org/usc/7/519"
units:
  - "Chapter 21C — Tobacco Reform"
  - "Subchapter II — Implementation and Transition"
---

# §519. Treatment of tobacco loan pool stocks and outstanding loan costs

- (a) **Disposal of stocks—** To provide for the orderly disposition of quota tobacco held by an association that has entered into a loan agreement with the [Commodity](/usc/7/1a.md?p=9) Credit [Corporation](/usc/7/1502.md?p=b-5) under section 106A or 106B of the [Agricultural Act of 1949](/usc/7/7202.md?p=1) ([7 U.S.C. 1445–1](https://uscode.house.gov/view.xhtml?req=(/us/usc/t7/s1445–1)), 1445–2) (referred to in this section as an “association”), loan pool stocks for each kind of tobacco held by the association shall be disposed of in accordance with this section.
- (b) **Disposal by associations—** For each kind of tobacco held by an association, the association shall be responsible for the disposal of a specific quantity of the loan pool stocks for that kind of tobacco held by the association. The quantity transferred to the association for disposal shall be equal to the quantity determined by dividing—
  - (1) the amount of [funds](/usc/7/4531.md?p=5) held by the association in the No Net Cost Tobacco [Fund](/usc/7/4531.md?p=5) and the No Net Cost Tobacco Account established under sections 106A and 106B of the [Agricultural Act of 1949](/usc/7/7202.md?p=1) ([7 U.S.C. 1445–1](https://uscode.house.gov/view.xhtml?req=(/us/usc/t7/s1445–1)), 1445–2) for the kind of tobacco; by
  - (2) the average list price per pound for the kind of tobacco, as determined by the Secretary.
- (c) **Disposal of remainder by Commodity Credit Corporation—**
  - (1) **Disposal—** Any loan pool stocks of a kind of tobacco of an association that are not transferred to the association under [subsection (b)](#b) for disposal shall be disposed of by [Commodity](/usc/7/1a.md?p=9) Credit [Corporation](/usc/7/1502.md?p=b-5) in a manner determined by the Secretary.
  - (2) **Reimbursement—** As required by [section 518e(b)(1)(B) of this title](/usc/7/518e.md?p=b-1-B), the Secretary shall transfer from the [Tobacco Trust Fund](/usc/7/518.md?p=10) to the No Net Cost Tobacco [Fund](/usc/7/4531.md?p=5) or the No Net Cost Tobacco Account of an association established under section 106A or 106B of the [Agricultural Act of 1949](/usc/7/7202.md?p=1) ([7 U.S.C. 1445–1](https://uscode.house.gov/view.xhtml?req=(/us/usc/t7/s1445–1)), 1445–2) such amounts as the Secretary determines will be adequate to reimburse the [Commodity](/usc/7/1a.md?p=9) Credit [Corporation](/usc/7/1502.md?p=b-5) for any net losses that the [Corporation](/usc/7/1502.md?p=b-5) may sustain under its loan agreements with the association.
- (d) **Transfer of remaining no net cost funds—** Any [funds](/usc/7/4531.md?p=5) in the No Net Cost Tobacco [Fund](/usc/7/4531.md?p=5) or the No Net Cost Tobacco Account of an association established under sections 106A and 106B of the [Agricultural Act of 1949](/usc/7/7202.md?p=1) ([7 U.S.C. 1445–1](https://uscode.house.gov/view.xhtml?req=(/us/usc/t7/s1445–1)), 1445–2) that remain after the application of subsections [(b)](#b) and [(c)](#c) shall be transferred to the association for distribution to [producers](/usc/7/6802.md?p=4-A-iii-III-bb) of quota tobacco in accordance with a plan approved by the Secretary.

## Source credit

(Pub. L. 108–357, title VI, § 641, Oct. 22, 2004, 118 Stat. 1534.)

## Notes

### Editorial Notes

### References in Text

Sections 106A and 106B of the Agricultural Act of 1949, referred to in text, were classified to sections 1445–1 and 1445–2, respectively, of this title prior to repeal by Pub. L. 108–357, title VI, § 612(a), Oct. 22, 2004, 118 Stat. 1523.

### Statutory Notes and Related Subsidiaries

### Effective Date

Section applicable to the 2005 and subsequent crops of tobacco, see section 643 of Pub. L. 108–357, set out as a note under section 518 of this title.