[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4753 Introduced in House (IH)]







107th CONGRESS
  2d Session
                                H. R. 4753

   To replace the existing Federal tobacco program with a federally 
 chartered corporation to ensure the stability of the price and supply 
 of domestically produced tobacco, to compensate quota holders for the 
loss of tobacco quota asset value, to provide transition assistance for 
     active tobacco producers, to increase the competitiveness of 
         domestically produced tobacco, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 16, 2002

 Mr. Goode (for himself, Mr. Boucher, and Mr. Jones of North Carolina) 
 introduced the following bill; which was referred to the Committee on 
Agriculture, and in addition to the Committee on Ways and Means, for a 
 period to be subsequently determined by the Speaker, in each case for 
consideration of such provisions as fall within the jurisdiction of the 
                          committee concerned

_______________________________________________________________________

                                 A BILL


 
   To replace the existing Federal tobacco program with a federally 
 chartered corporation to ensure the stability of the price and supply 
 of domestically produced tobacco, to compensate quota holders for the 
loss of tobacco quota asset value, to provide transition assistance for 
     active tobacco producers, to increase the competitiveness of 
         domestically produced tobacco, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Tobacco Market 
Transition Act of 2002''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. Purposes.
          TITLE I--TOBACCO COMMUNITY REVITALIZATION TRUST FUND

Sec. 101. Tobacco Community Revitalization Trust Fund.
             TITLE II--TOBACCO MARKET TRANSITION ASSISTANCE

Sec. 201. Compensation to quota holders for loss of tobacco quota asset 
                            value.
Sec. 202. Transition payments for active tobacco producers.
Sec. 203. Tobacco loan associations.
Sec. 204. Transition payments for other persons involved in tobacco 
                            production and marketing.
Sec. 205. Tax treatment of compensation and transition payments.
 TITLE III--ESTABLISHMENT OF PRIVATE TOBACCO PRODUCTION ADJUSTMENT AND 
                       QUALITY ASSURANCE PROGRAMS

Sec. 301. Establishment and duties of Tobacco Production Control 
                            Corporation.
Sec. 302. Board of directors of Corporation.
Sec. 303. Board meetings.
Sec. 304. Staff.
Sec. 305. General powers of Corporation.
Sec. 306. Corporation relationship with tobacco loan associations.
Sec. 307. Tobacco base price levels.
Sec. 308. Penalties.
Sec. 309. Program referenda.
           TITLE IV--TERMINATION OF CURRENT TOBACCO PROGRAMS

Sec. 401. Termination of marketing quota programs and repeal of related 
                            provisions.
Sec. 402. Termination of tobacco price support loan and no net cost 
                            provisions and repeal of related 
                            provisions.
Sec. 403. Continued availability of Federal crop insurance.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) Active tobacco producer.--The term ``active tobacco 
        producer'' means a person that--
                    (A) is the actual producer, as determined by the 
                Secretary, of tobacco on a farm where tobacco is 
                produced pursuant to a tobacco farm marketing quota or 
                farm acreage allotment established under the 
                Agricultural Adjustment Act of 1938 (7 U.S.C. 1281 et 
                seq.) for the 2002 crop year; and
                    (B) planted the crop, or is considered to have 
                planted the crop under that Act, in 2001 or 2002.
            (2) Association.--The term ``Association'' means a 
        producer-owned cooperative marketing association.
            (3) Corporation.--The term ``Corporation'' means the 
        Tobacco Production Control Corporation established by section 
        301.
            (4) Quota holder.--The term ``quota holder'' means an 
        owner, as of July 1, 2002, of a tobacco farm marketing quota or 
        a farm acreage allotment established under the Agricultural 
        Adjustment Act of 1938 (7 U.S.C. 1281 et seq.) for the 2002 
        marketing year.
            (5) Secretary.--The term ``Secretary'' means the Secretary 
        of Agriculture.
            (6) Trust fund.--The term ``Trust Fund'' means the Tobacco 
        Community Revitalization Trust Fund established by section 101.

SEC. 3. PURPOSES.

    It is the purpose of this Act--
            (1) to terminate the existing Federal tobacco program and 
        establish federally chartered corporation to ensure the 
        stability of the price and supply of domestically produced 
        tobacco;
            (2) to compensate quota holders for the loss of tobacco 
        quota asset value as a result of the termination of the 
        existing Federal tobacco program;
            (3) to provide transition assistance to active tobacco 
        producers; and
            (4) to make domestically produced tobacco more competitive 
        with tobacco produced in other countries by reducing the 
        operating costs of tobacco producers through the elimination of 
        expenses associated with buying or leasing tobacco quota.

          TITLE I--TOBACCO COMMUNITY REVITALIZATION TRUST FUND

SEC. 101. TOBACCO COMMUNITY REVITALIZATION TRUST FUND.

    (a) In General.--
            (1) Establishment.--There is established in the Treasury of 
        the United States a trust fund to be known as the ``Tobacco 
        Community Revitalization Trust Fund''.
            (2) Contents.--The Trust Fund shall consist of such amounts 
        as may be appropriated or credited to the Trust Fund, including 
        funds held in a No Net Cost Tobacco Fund or No Net Cost Tobacco 
        Account that are transferred to the Trust Fund under section 
        203(c).
    (b) Administration.--The Trust Fund shall be administered by the 
Tobacco Production Control Corporation.
    (c) Expenditures From Trust Fund.--Amounts in the Trust Fund shall 
be available for making expenditures to defray--
            (1) the costs of providing compensation to quota holders 
        for the loss of tobacco quota asset value under section 201;
            (2) the costs of making transition payments to active 
        tobacco producers under section 202;
            (3) the costs of forgiving loans and transferring title to 
        inventories of tobacco and funds to the Commodity Credit 
        Corporation under section 203;
            (4) the costs of making transition payments to other 
        persons directly involved in tobacco production and marketing 
        under section 204;
            (5) the costs of carrying out the duties of the Corporation 
        and the Associations, including assuring  the quality and 
controlling the production and marketing of domestic tobacco and 
otherwise carrying out title III; and
            (6) the costs to the Secretary and the Corporation of 
        enforcing title III.

             TITLE II--TOBACCO MARKET TRANSITION ASSISTANCE

SEC. 201. COMPENSATION TO QUOTA HOLDERS FOR LOSS OF TOBACCO QUOTA ASSET 
              VALUE.

    (a) Payment Authority.--Using amounts in the Trust Fund, the 
Corporation shall make payments for tobacco quota to eligible quota 
holders.
    (b) Eligibility.--To be eligible to receive payments under this 
section, a quota holder shall prepare and submit to the Corporation an 
application at such time, in such manner, and containing such 
information as the Corporation may require, including information 
sufficient to demonstrate to the satisfaction of the Corporation that 
the person was a quota holder on July 1, 2002.
    (c) Base Quota Level.--
            (1) In general.--For each eligible quota holder that 
        submits an application under subsection (b), the Secretary 
        shall determine and provide to the Corporation the base quota 
        level of the quota holder.
            (2) Level.--For each kind of tobacco for which the 
        marketing quota is expressed in pounds, the base quota level 
        for a quota holder shall be equal to, at the election of the 
        quota holder--
                    (A) the tobacco farm marketing quota established 
                under the Agriculture Adjustment Act of 1938 for the 
                2002 marketing year for quota tobacco on the farm owned 
                by the quota holder; or
                    (B) the average of the tobacco farm marketing quota 
                established under the Agriculture Adjustment Act of 
                1938 for the 1997, 1998, and 1999 marketing years for 
                quota tobacco on the farm owned by the quota holder.
            (3) Marketing quotas other than poundage quotas.--For each 
        kind of tobacco for which there is a marketing quota or 
        allotment (on an acreage basis), the base quota level for each 
        eligible quota holder shall be determined in accordance with 
        this subsection (based on a poundage conversion) in an amount 
        equal to the product obtained by multiplying--
                    (A) the tobacco farm marketing quota or allotment 
                established under the Agriculture Adjustment Act of 
                1938 for the 2002 marketing year (or, at the election 
                of the quota holder, the average of the tobacco farm 
                marketing quota or allotment established under such for 
                the 1997, 1998, and 1999 marketing years, for the quota 
                holder's farm; by
                    (B) the average yield per acre for the quota 
                holder's farm for the kind of tobacco for that 
                marketing year or those marketing years, whichever 
                applies.
    (d) Payment Amount.--The Corporation shall make payments to each 
eligible quota holder in a total amount equal to the product obtained 
by multiplying--
            (1) $8 per pound; by
            (2) the base quota level established for the quota holder 
        under subsection (c).
    (e) Time for Payment.--The amount determined under subsection (d) 
for a quota holder shall be paid in five equal installments during each 
of the 2002 through 2006 crops of tobacco.

SEC. 202. TRANSITION PAYMENTS FOR ACTIVE TOBACCO PRODUCERS.

    (a) Payment Authority.--Using amounts in the Trust Fund, the 
Corporation shall make transition payments to eligible active tobacco 
producers.
    (b) Eligibility.--To be eligible to receive payments under this 
section, an active tobacco producer shall prepare and submit to the 
Corporation an application at such time, in such manner, and containing 
such information as the Corporation may require, including information 
sufficient to demonstrate to the satisfaction of the Corporation that, 
the person planted, or is considered to have planted, a 2001 or 2002 
crop of tobacco.
    (c) Payment Quantity.--
            (1) In general.--For each eligible active tobacco producer 
        that submits an application under subsection (b), the Secretary 
        shall determine and provide to the Corporation, the production 
        quantity of the producer eligible for payments under this 
        section.
            (2) Eligible production quantity.--The production quantity 
        eligible for payment for an active tobacco producer shall be 
        equal to, at the election of the active tobacco producer--
                    (A) the quantity, in pounds, of quota tobacco 
                subject to the quota produced by the producer under the 
                Agriculture Adjustment Act of 1938 for the 2002 
                marketing year; or
                    (B) the average quantity, in pounds, of quota 
                tobacco subject to the quota produced by the producer 
                under the Agriculture Adjustment Act of 1938 for the 
                1997, 1998, and 1999 marketing years.
            (3) Marketing quotas other than poundage quotas.--For each 
        kind of tobacco for which there is a marketing quota or 
        allotment on an acreage basis, the production quantity eligible 
        for payment for each active tobacco producer shall be equal to, 
        at the election of the active tobacco producer--
                    (A) the actual pounds marketed for the 2002 crop 
                year; or
                    (B) the average of the actual pounds marketed for 
                the 1997, 1998, and 1999 crop years.
    (d) Payment Amount.--The Corporation shall make payments to each 
active tobacco producer in a total amount equal to the product obtained 
by multiplying--
            (1) $4 per pound; by
            (2) the production base established for the active producer 
        under subsection (c).
    (e) Time for Payment.--The amount determined under subsection (d) 
for an active tobacco producer shall be paid in five equal installments 
during each of the 2002 through 2006 crops of tobacco.
    (f) Death of Active Tobacco Producer.--If an active tobacco 
producer who is entitled to payments under  this section dies and is 
survived by a spouse or one or more dependents, the right to receive 
the payments shall transfer to the surviving spouse or, if there is no 
surviving spouse, to the estate of the producer.

SEC. 203. TOBACCO LOAN ASSOCIATIONS.

    (a) Prior Loans.--The Secretary shall forgive each loan made to an 
Association under section 106A or 106B of the Agricultural Act of 1949 
(7 U.S.C. 1445 1, 1445 2) that is outstanding on the date of enactment 
of this Act.
    (b) Transfer of Title for Loan Inventories.--The Secretary shall 
transfer to the Commodity Credit Corporation the title to all 
inventories of tobacco held by the Secretary to secure loans made to 
the Association under section 106A or 106B of the Agricultural Act of 
1949 (7 U.S.C. 1445 1, 1445 2).
    (c) No Net Cost Tobacco Funds.--Notwithstanding sections 106A(f) 
and 106B(g) of the Agricultural Act of 1949 (7 U.S.C. 1445-1(f) and 
1445-2(g)), all funds held in a No Net Cost Tobacco Fund or No Net Cost 
Tobacco Account on behalf of an Association under section 106A or 106B 
of that Act (7 U.S.C. 1445-1, 1445-2) on the day before the date of 
enactment of this Act shall be transferred to the Trust Fund.

SEC. 204. TRANSITION PAYMENTS FOR OTHER PERSONS INVOLVED IN TOBACCO 
              PRODUCTION AND MARKETING.

    (a) Payments for Other Persons.--The Corporation shall consider the 
feasibility of making transition payments to tobacco graders, 
inspectors, checkers, auctioneers, equipment dealers, warehousemen, and 
other persons who are adversely and directly affected by the 
termination of the Federal tobacco program.
    (b) Rules.--Payment amounts under this section shall be established 
by and made according to the rules issued by the Corporation.

SEC. 205. TAX TREATMENT OF COMPENSATION AND TRANSITION PAYMENTS.

    (a) In General.--Part II of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to items specifically included 
in gross income) is amended by adding at the end the following new 
section:

``SEC. 91. TOBACCO QUOTA HOLDER COMPENSATION AND TRANSITION PAYMENTS.

    ``(a) Compensation to Quota Holders for Loss of Tobacco Quota Asset 
Value.--Any amount received under section 201 of the Tobacco Market 
Transition Act of 2002 shall be treated as gain from the sale of a 
capital asset held for more than 1 year.
    ``(b) Transition Payments for Active Tobacco Producers.--Any amount 
received under section 202 of such Act shall be included in gross 
income as ordinary income.''
    (b) Clerical Amendment.--The table of sections for part II of 
subchapter B of chapter 1 of such Code is amended by adding at the end 
the following new item:

                              ``Sec. 91. Tobacco quota holder 
                                        compensation and transition 
                                        payments.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2001.

 TITLE III--ESTABLISHMENT OF PRIVATE TOBACCO PRODUCTION ADJUSTMENT AND 
                       QUALITY ASSURANCE PROGRAM

SEC. 301. ESTABLISHMENT AND DUTIES OF TOBACCO PRODUCTION CONTROL 
              CORPORATION.

    (a) Establishment.--There is established a corporation to be known 
as the ``Tobacco Production Control Corporation'', which shall be a 
federally chartered instrumentality of the United States.
    (b) Duties.--
            (1) In general.--Effective for the 2002 and each subsequent 
        crop of each kind of tobacco, the Corporation shall be 
        responsible for the promulgation of rules governing the 
        production, marketing, importation, exportation, and consumer 
        quality assurances for each kind of tobacco.
            (2) Majority vote required.--The promulgation of rules 
        under this section and other decisions of the Corporation under 
        this section shall require at least a majority vote of the 
        Board of Directors of the Corporation.
    (c) Production and Marketing Licenses.--
            (1) In general.--The Corporation shall establish a 
        licensing system that provides for the orderly production and 
        marketing of tobacco in the United States. The Corporation 
        shall issue marketing licenses to tobacco marketing facilities 
        and tobacco purchasing entities.
            (2) Initial license.--The Corporation shall issue a license 
        to each active tobacco producer, or other person that meets 
        requirements established by the Corporation, initially based 
        upon the eligible production quantity determined for each 
        active tobacco producer under section 202(c).
            (3) Subsequent crop years.--The Corporation shall establish 
        the amount that each licensee may market for each subsequent 
        year based on the production level recommended by the Secretary 
        for that year, which shall be based on the information 
        collected under section 320A of the Agricultural Adjustment Act 
        of 1938 (7 U.S.C. 1314g), and the licensee's production 
        quantity for the preceding year.
            (4) Surrender.--The licensee shall surrender the license to 
        the Corporation if the licensee fails to actively engage in the 
        production of tobacco.
            (5) Prohibitions.--
                    (A) Marketing without license.--The sale or 
                marketing of a type of tobacco which prior to the date 
                of enactment of this Act was produced pursuant to a 
                tobacco farm marketing quota or farm acreage allotment 
                issued under the Agricultural Act of 1938 is prohibited 
                without a license.
                    (B) Transfer of license.--The sale, lease, or other 
                transfer of a license shall be prohibited except 
                pursuant to subsection (h).
    (d) Compliance.--The Corporation shall ensure compliance, through 
whatever means is available, of all persons with any license, 
regulation, rule, limitation, or guideline issued under, or in order to 
carry out, this Act.
    (e) Quality Assurance.--The Corporation shall establish a system 
that will provide assurance to consumers  of the quality of all tobacco 
marketed in the United States and that, at a minimum--
            (1) provides for the inspection and grading of domestically 
        produced tobacco and imported tobacco;
            (2) determines and describes the physical characteristics 
        of domestically produced tobacco and imported tobacco; and
            (3) ensures the physical and chemical integrity of 
        domestically produced tobacco and imported tobacco;
    (f) Methods To Carry Out Duties.--To carry out its duties, 
functions, and determinations, the Corporation shall utilize 
Associations and local committees to the extent practicable and 
appropriate.
    (g) Transition.--The Corporation shall continue to maintain and 
carry out a tobacco program in accordance with the rules and 
regulations contained in chapter 7 of the Code of Federal Regulations 
unless and until the Corporation promulgates rules under subsection 
(b).
    (h) Transfer of License.--
            (1) Right of survivorship.--In the case of the death of a 
        person to whom a license has been issued under this section, 
        the license shall transfer to the surviving spouse of the 
        person or, if there is no surviving spouse, to surviving direct 
        descendants of the persons.
            (2) Hardship.--In the case of the death of a person to whom 
        a license has been issued under this section and whose 
        descendants are temporarily unable to produce a crop of 
        tobacco, the Corporation may hold the license in the name of 
        the descendants for a period of not more than 18 months, at the 
        discretion of the Corporation.
            (3) Lifetime transfer.--A person that is eligible to obtain 
        a license under this section may at any time transfer all or 
        part of the license to the person's spouse or direct 
        descendants that are actively engaged in the production of 
        tobacco.

SEC. 302. BOARD OF DIRECTORS OF CORPORATION.

    (a) In General.--The powers of the Corporation shall be vested in a 
Board of Directors.
    (b) Members.--The Board of Directors shall consist of 25 members as 
follows:
            (1) The Secretary of Agriculture.
            (2) The Secretary of Agriculture shall appoint--
                    (A) two members from each State that produces more 
                than 250,000,000 pounds of tobacco;
                    (B) one member from each State that produces more 
                than 50,000,000 pounds, but less than 250,000,000 
                pounds, of tobacco; and
                    (C) one member, to be appointed on a rotating 
                basis, from a State that produces less than 50,000,000 
                pounds of tobacco.
            (3) Three members appointed by Flue-cured tobacco 
        associations and two members appointed by Burley tobacco 
        associations.
            (4) One member appointed by tobacco associations other than 
        those specified in paragraph (3), on a rotating basis.
            (5) The Secretary of Health and Human Services shall 
        appoint three members representing public health interests.
            (6) The Secretary of Agriculture shall appoint four members 
        representing domestic tobacco product manufacturers, except 
        that--
                    (A) no manufacturer may have more than one member 
                on the Board;
                    (B) at least one of the members must be from a 
                domestic smokeless tobacco manufacturer; and
                    (C) one of the members must be from a domestic 
                cigarette manufacturer that comprises less than 5 
                percent of domestic cigarette sales, or a cigar 
                manufacturer, or a pipe tobacco manufacturer, on a 
                rotating basis.
            (7) The Secretary of Agriculture shall appoint one member 
        representing domestic export leaf dealers.
            (8) The Secretary of Agriculture shall appoint one member 
        that is the person responsible for operating the quality 
        assurance system of the Corporation described in section 
        301(e).
    (c) Membership Qualifications.--A member of the Board shall not 
hold any Federal, State, or local elected office. The members appointed 
under paragraphs (2), (3), and (4) of subsection (b) must be licensees 
under section 301.
    (d) Chairpersons.--The Secretary of Agriculture shall serve as 
chairperson of the Board.
    (e) Term; Vacancies.--
            (1) Term.--The term of office of a member of the Board 
        appointed under any of paragraphs (2) through (8) of subsection 
        (b) shall be four years.
            (2) Vacancies.--A vacancy on the Board shall be filled in 
        the same manner as the original appointment was made.
    (f) Compensation.--
            (1) Federal members.--A member of the Board who is an 
        officer or employee of the United States shall not receive any 
        additional compensation by reason of service on the Board.
            (2) Non-federal members.--Any other member shall receive 
        compensation, for each day (including travel time) that the 
        member is engaged in the performance of the functions of the 
        Board, at a rate determined appropriate by the Board.
            (3) Expenses.--A member of the Board shall be reimbursed 
        for travel, subsistence, and other necessary expenses incurred 
        by the member in the performance of the duties of the member.
            (4) Representation.--No member of the Board shall receive 
        compensation from more than one interest represented on the 
        Board.
    (g) Conflict of Interest.--
            (1) Conflict of interest.--Except as provided in paragraph 
        (3), a member of the Board shall not vote on any matter 
        concerning any application, contract, or claim, or other 
        particular matter pending before the Corporation, in which, to 
        the knowledge of the member, the member, spouse, or child of 
        the member, partner of the member, or organization  in which 
the member is serving as officer, director, trustee, partner, or 
employee, or any person or organization with which the member is 
negotiating or has any arrangement concerning prospective employment, 
has a financial interest.
            (2) Violations.--Violation of paragraph (1) by a member of 
        the Board shall be cause for removal of the member, but shall 
        not impair or otherwise affect the validity of any otherwise 
        lawful action by the Corporation in which the member 
        participated.
            (3) Exceptions.--The prohibitions contained in paragraph 
        (1) shall not apply to a member of the Board that is a tobacco 
        producer if the member advises the Board of the nature of the 
        particular matter in which the member proposes to participate, 
        and if the member makes a full disclosure of the financial 
        interest, prior to any participation.
    (h) Financial Disclosure.--A Board member shall be subject to the 
financial disclosure requirements of subchapter B of chapter XVI of 
title 5, Code of Federal Regulations (or any corresponding or similar 
regulation or ruling), applicable to a special Government employee (as 
defined in section 202(a) of title 18, United States Code).

SEC. 303. BOARD MEETINGS.

    (a) In General.--The Board shall meet at least three times each 
fiscal year at the call of a Chairperson or at the request of the 
Executive Director.
    (b) Location.--The location of a meeting shall be subject to 
approval of the Executive Director.
    (c) Quorum.--A quorum of the Board shall consist of a majority of 
the members.

SEC. 304. STAFF.

    (a) Executive Director.--
            (1) Appointment.--The Board shall appoint an Executive 
        Director.
            (2) Duties.--The Executive Director shall be the chief 
        executive officer of the Corporation, with such power and 
        authority as may be conferred by the Board.
            (3) Compensation.--The Executive Director shall receive 
        basic pay at the rate provided for level IV of the Executive 
        Schedule under section 5315 of title 5, United States Code.
    (b) Officers.--The Board shall establish the offices and appoint 
the officers of the Corporation, including a Secretary, and define the 
duties of the officers in a manner consistent with this section.
    (c) Other Personnel.--The Corporation may select and appoint 
officers, attorneys, employees, and agents, who shall be vested with 
such powers and duties as the Corporation may determine. The 
Corporation indemnify such personnel, as the Board considers necessary 
and desirable, except that an officer, attorney, or employee of the 
Corporation shall not be indemnified for an act outside the scope of 
employment.
    (d) Consultant and Intermittent Services.--The Corporation may 
obtain the services and fix the compensation of any consultant and 
otherwise procure temporary and intermittent services under section 
3109(b) of title 5, United States Code.
    (e) Committees.--The Corporation may provide for and designate such 
committees, and the functions of the committees, as the Board considers 
necessary or desirable.

SEC. 305. GENERAL POWERS OF CORPORATION.

    (a) Bylaws.--The Board shall adopt, and may from time to time 
amend, any bylaw that is necessary for the proper management and 
functioning of the Corporation and adopt and alter a corporate seal, 
which shall be judicially noticed.
    (b) Corporation Name.--The Corporation shall have succession in its 
corporate name.
    (c) Agreement and Contract Authority.--The Corporation may enter 
into any agreement or contract with a person or private or governmental 
agency.
    (d) Acquisition and Disposal Authority.--The Corporation may lease, 
purchase, accept a gift or donation of, or otherwise acquire, use, own, 
hold, improve, or otherwise deal in or with, and sell, convey, 
mortgage, pledge, lease, exchange, or otherwise dispose of, any 
property or interest in property, as the Corporation considers 
necessary in the transaction of the business of the Corporation. The 
Corporation may sell assets, loans, and equity interests acquired in 
connection with the financing of projects funded by the Corporation.
    (e) Legal Actions.--The Corporation may sue and be sued in the 
corporate name of the Corporation and may independently retain legal 
representation, except that--
            (1) no attachment, injunction, garnishment, or similar 
        process shall be issued against the Corporation or property of 
        the Corporation; and
            (2) exclusive original jurisdiction shall reside in the 
        district courts of the United States, and the Corporation may 
        intervene in any court in any suit, action, or proceeding in 
        which the Corporation has an interest.
    (f) Assistance of Federal Agencies.--The Corporation may, with the 
consent of any board, commission, independent establishment, or 
executive department of the Federal Government, including any field 
service, use information, services, facilities, officials, and 
employees in carrying out the duties of the Corporation, and pay for 
the use, which payments shall be transferred to the applicable 
appropriation account that incurred the expense.
    (g) Rights, Privileges, and Immunities.--The Corporation shall have 
the rights, privileges, and immunities of the United States with 
respect to the right to priority of payment with respect to debts due 
from bankrupt, insolvent, or deceased creditors.
    (h) Financial Authorities.--The Corporation may collect or 
compromise any obligations assigned to or held by the Corporation, 
including any legal or equitable rights accruing to the Corporation, 
and shall determine the character of, and necessity for, obligations 
and expenditures of the Corporation and the manner in which the 
obligations and expenditures shall be incurred, allowed, and paid, 
subject to provisions of law specifically applicable to Government 
corporations. The Corporation may make final and conclusive settlement 
and adjustment of any claim by or against the Corporation or a fiscal 
officer of the Corporation.
    (i) Other Powers.--The Corporation may exercise all other lawful 
powers necessarily or reasonably related to the establishment of the 
Corporation to carry out this  title and the powers, purposes, 
functions, duties, and authorized activities of the Corporation.

SEC. 306. CORPORATION RELATIONSHIP WITH TOBACCO LOAN ASSOCIATIONS.

    The Corporation shall enter into an agreement with producer-owned 
cooperative marketing loan associations for each kind of tobacco--
            (1) to make a base price available to producers of the kind 
        of tobacco;
            (2) arrange for financing and the administration of a base 
        price for the kind of tobacco; and
            (4) receive, process, store, and sell any domestically 
        produced tobacco received as collateral for a base price loan.

SEC. 307. TOBACCO BASE PRICE LEVELS.

    (a) Determination.--The Corporation, in consultation with the 
Secretary and the Associations, shall determine, and revise as 
necessary, a base price for each kind of tobacco, which shall be based 
on the cost of producing that kind of tobacco.
    (b) Effective Date.--The base prices determined under subsection 
(a) shall take effect beginning with the 2003 tobacco crops.

SEC. 308. PENALTIES.

    (a) In General.--The violation of any provision of this Act, or any 
rule or regulation issued to carry out this Act, or the terms of any 
license issued under this Act, by a person (including the marketing of 
any kind of tobacco without a license issued under this title or in 
excess of the quantity permitted under such a license) shall subject 
the person to revocation or suspension of the person's license, a 
penalty of 100 percent of the average market price (calculated to the 
nearest whole cent) for the kind of tobacco for the immediately 
preceding marketing year, or both, in the discretion of the Secretary.
    (b) Payer.--
            (1) In general.--Except as otherwise provided in this 
        subsection, the penalty shall be paid by the person who 
        acquired the tobacco from the producer.
            (2) Deduction from price.--An amount equivalent to the 
        penalty may be deducted by the buyer from the price paid to the 
        producer in any case in which the tobacco is marketed by sale.
            (3) Handler.--If the tobacco is marketed by the producer 
        through a handler, the penalty shall be paid by the handler, 
        which may deduct an amount equivalent to the penalty from the 
        price paid to the producer.
            (4) Direct marketing outside united states.--In any case in 
        which tobacco is marketed directly to any person outside the 
        United States, the penalty shall be paid and remitted by the 
        producer.
    (c) False Statement or Omission.--If any producer falsely 
identifies or fails to account for the disposition of any tobacco--
            (1) an amount of tobacco equal to the normal yield of the 
        number of acres harvested in excess of the quantity permitted 
        under a license issued under this title shall be considered to 
        have been marketed in excess of the license for the farm; and
            (2) the penalty for the excess marketing shall be paid and 
        remitted by the producer.
    (d) Carryover.--Tobacco carried over by the producer of the tobacco 
from 1 marketing year to another marketing year may be marketed without 
payment of the penalty imposed by this section if--
            (1) the total quantity of tobacco available for marketing 
        from the farm in the marketing year from which the tobacco is 
        carried over does not exceed the quantity that may be marketed 
        under a license issued for the farm for the marketing year; or
            (2) the quantity of tobacco carried over does not exceed 
        the normal production of that number of acres by which the 
        harvested acreage of tobacco in the calendar year in which the 
        marketing year begins is less than the quantity that may be 
        marketed under the license.
    (e) Tobacco Marketed Prior to Marketing Year.--Tobacco produced in 
a calendar year for the marketing year beginning during the calendar 
year shall be subject to licenses issued for the marketing year even 
though the tobacco is marketed prior to the date on which the marketing 
year begins.
    (f) Proportional Payments.--The Secretary shall require collection 
of the penalty on a proportion of each lot of tobacco marketed from the 
farm equal to the proportion that the tobacco available for marketing 
from the farm in excess of the quantity that may be marketed under a 
license is of the total quantity of tobacco available for marketing 
from the farm if satisfactory proof is not furnished as to the 
disposition to be made of the excess tobacco prior to the marketing of 
any tobacco from the farm.
    (g) Lien.--Until the amount of the penalty provided by this section 
is paid, a lien on the tobacco with respect to which the penalty is 
incurred, and on any subsequent tobacco subject to licenses issued 
under this title in which the person liable for payment of the penalty 
has an interest, shall be in effect in favor of the Corporation for the 
amount of the penalty.

SEC. 309. PROGRAM REFERENDA.

    (a) Initial Referendum.--
            (1) Referendum required.--After the end of the three-year 
        period beginning on the date of enactment of this Act, if at 
        least one-third of the licensees engaged in the production of a 
        kind of tobacco request a referendum under this subsection, the 
        Corporation shall conduct a referendum among the licensees 
        engaged in the production of that kind of tobacco to determine 
        whether the licensees are in favor of continuing the operation 
        of the program established under this Act with respect to that 
        kind of tobacco.
            (2) Process and results.--If more than one-half of the 
        licensees voting in a referendum conducted under paragraph (1) 
        with respect to a kind of tobacco oppose the continuation of 
        the program, the Corporation shall announce the result and 
        shall conduct a second referendum with respect to that kind of 
        tobacco one year later. If more than one-half of the licensees 
        voting in the second referendum also oppose the continuation of 
        the program, the Corporation shall announce the result and the 
        program shall cease to be in effect for that kind of tobacco.
    (b) Subsequent Referenda.--The Corporation may conduct subsequent 
referenda from time to time as the Corporation considers appropriate to 
determine whether producers are in favor of continuing the program 
established under this Act, the use of licenses, limitations on license 
transfer, or any other aspect of the program.

           TITLE IV--TERMINATION OF CURRENT TOBACCO PROGRAMS

SEC. 401. TERMINATION OF MARKETING QUOTA PROGRAMS AND REPEAL OF RELATED 
              PROVISIONS.

    (a) Tobacco Control Act.--The Act of April 25, 1936 (commonly known 
as the Tobacco Control Act; 7 U.S.C. 515-515k), is repealed.
    (b) Commodity Handling Orders.--Section 8c(2) of the Agricultural 
Adjustment Act (7 U.S.C. 608c(2)), reenacted with amendments by the 
Agricultural Marketing Agreement Act of 1937, is amended by striking 
``tobacco,''.
    (c) Processing Tax.--Section 9(b) of the Agricultural Adjustment 
Act (7 U.S.C. 609(b)), reenacted with amendments by the Agricultural 
Marketing Agreement Act of 1937, is amended--
            (1) in paragraph (2), by striking ``tobacco,''
            (2) in paragraph (6)(B)(i), by striking ``, or, in the case 
        of tobacco, is less than the fair exchange value by not more 
        than 10 per centum,''.
    (d) Burley Tobacco Import Review.--Section 3 of Public Law 98-59 (7 
U.S.C. 625) is repealed.
    (e) Declaration of Policy.--Section 2 of the Agricultural 
Adjustment Act of 1938 (7 U.S.C. 1282) is amended by striking 
``tobacco,''.
    (f) Definitions.--Section 301(b) of the Agricultural Adjustment Act 
of 1938 (7 U.S.C. 1301(b)) is amended--
            (1) in paragraph (3)--
                    (A) by striking subparagraph (C); and
                    (B) by redesignating subparagraph (D) as 
                subparagraph (C);
            (2) in paragraph (6)(A), by striking ``tobacco,'';
            (3) in paragraph (7), by striking the following:
    ``Tobacco (flue-cured), July 1-June 30;
    Tobacco (other than flue-cured), October 1-September 30);''
            (4) in paragraph (10)--
                    (A) by striking subparagraph (B); and
                    (B) by redesignating subparagraph (C) as 
                subparagraph (B);
            (5) in paragraph (11)(B), by striking ``and tobacco'';
            (6) in paragraph (12), by striking ``tobacco,'';
            (7) in paragraph (14)--
                    (A) by striking ``(A)'' in subparagraph (A); and
                    (B) by striking subparagraphs (B), (C), and (D);
            (8) by striking paragraph (15);
            (9) in paragraph (16)--
                    (A) by striking subparagraph (B); and
                    (B) by redesignating subparagraph (C) as 
                subparagraph (B);
            (10) by striking paragraph (17); and
            (11) by redesignating paragraph (16) as paragraph (15).
    (g) Parity Payments.--Section 303 of the Agricultural Adjustment 
Act of 1938 (7 U.S.C. 1303) is amended in the first sentence by 
striking ``rice, or tobacco'' and inserting ``or rice''.
    (h) Marketing Quotas.--
            (1) Repeal.--Except for the section referred to in 
        paragraph (2), part I of subtitle B of title III of the 
        Agricultural Adjustment Act of 1938 (7 U.S.C. 1311 et seq.) is 
        repealed.
            (2) Submission of manufacturer purchase intentions.--
        Section 320A of the Agricultural Adjustment Act of 1938 (7 
        U.S.C. 1314g) is not repealed, but subsection (a)(1) of such 
        section is amended to read as follows:
    ``(1) Not later than December 1 of each marketing year with respect 
to Flue-cured tobacco, and January 15 of each marketing year with 
respect to Burley tobacco or other types of tobacco, each domestic 
manufacturer of cigarettes shall submit to the Secretary a statement, 
by kind, of the quantity of Flue-cured tobacco, Burley tobacco, and 
other types of tobacco that the manufacturer intends to purchase, 
directly or indirectly, on the United States auction markets or from 
producers during the next succeeding marketing year (in this section 
referred to as the `quantity of intended purchases').''.
    (i) Administrative Provisions.--Section 361 of the Agricultural 
Adjustment Act of 1938 (7 U.S.C. 1361) is amended by striking 
``tobacco,''.
    (j) Adjustment of Quotas.--Section 371 of the Agricultural 
Adjustment Act of 1938 (7 U.S.C. 1371) is amended--
            (1) in the first sentence of subsection (a) by striking 
        ``peanuts, or tobacco'' and inserting ``or peanuts''; and
            (2) in the first sentence of subsection (b), by striking 
        ``peanuts or tobacco'' and inserting ``or peanuts''.
    (k) Reports and Records.--Section 373 of the Agricultural 
Adjustment Act of 1938 (7 U.S.C. 1373) is amended--
            (1) by striking ``peanuts, or tobacco'' each place it 
        appears in subsections (a) and (b) and inserting ``or 
        peanuts''; and
            (2) in subsection (a)--
                    (A) in the first sentence by striking ``all persons 
                engaged in the business of redrying, prizing, or 
                stemming tobacco for producers,''; and
                    (B) in the last sentence by striking ``$500'' and 
                all that follows through the period at the end of the 
                sentence and inserting ``$500.''.
    (l) Regulations.--Section 375(a) of the Agricultural Adjustment Act 
of 1938 (7 U.S.C. 1375(a)) is amended by striking ``peanuts, or 
tobacco'' and inserting ``or peanuts''.
    (m) Eminent Domain.--Section 378 of the Agricultural Adjustment Act 
of 1938 (7 U.S.C. 1378) is amended--
            (1) in the first sentence of subsection (c) by striking 
        ``cotton, tobacco, and peanuts'' and inserting ``cotton and 
        peanuts''; and
            (2) by striking subsections (d), (e), and (f).
    (n) Burley Tobacco Farm Reconstitution.--Section 379 of the 
Agricultural Adjustment Act of 1938 (7 U.S.C. 1379) is amended--
            (1) in subsection (a)--
                    (A) by striking ``(a)''; and
                    (B) in paragraph (6) by striking ``, but this 
                clause (6) shall not be applicable in the case of 
                burley tobacco''; and
            (2) by striking subsections (b) and (c).
    (o) Acreage-Poundage Quotas.--Section 4 of the Act of April 16, 
1955 (Public Law 89-12; 7 U.S.C. 1314c note), is repealed.
    (p) Burley Tobacco Acreage Allotments.--The Act of July 12, 1952 (7 
U.S.C. 1315), is repealed.
    (q) Transfer of Allotments.--Section 703 of the Food and 
Agriculture Act of 1965 (7 U.S.C. 1316) is repealed.
    (r) Advance Recourse Loans.--Section 13(a)(2)(B) of the Food 
Security Improvements Act of 1986 (7 U.S.C. 1433c-1(a)(2)(B)) is 
amended by striking ``tobacco and''.
    (s) Tobacco Field Measurement.--Section 1112 of the Omnibus Budget 
Reconciliation Act of 1987 (Public Law 100-203) is amended by striking 
subsection (c).
    (t) Liability.--The amendments made by this section shall not 
affect the liability of any person under any provision of law in effect 
before the amendments take effect as provided under subsection (u).
    (u) Application of Amendments.--The amendments made by this section 
shall apply with respect to the 2003 and subsequent tobacco crops.

SEC. 402. TERMINATION OF TOBACCO PRICE SUPPORT LOAN AND NO NET COST 
              PROVISIONS AND REPEAL OF RELATED PROVISIONS.

    (a) Parity Price Support.--Section 101 of the Agricultural Act of 
1949 (7 U.S.C. 1441) is amended--
            (1) in the first sentence of subsection (a), by striking 
        ``tobacco (except as otherwise provided herein), corn'' and 
        inserting ``corn'';
            (2) by striking subsection (c);
            (3) in subsection (d)(3)--
                    (A) by striking ``, except tobacco,''; and
                    (B) by striking ``and no price support shall be 
                made available for any crop of tobacco for which 
                marketing quotas have been disapproved by producers;''; 
                and
            (4) by redesignating subsections (d) and (e) as subsection 
        (c) and (d), respectively.
    (b) Termination of Tobacco Price Support and No Net Cost 
Provisions.--Sections 106, 106A, 106B, and 106C of the Agricultural Act 
of 1949 (7 U.S.C. 1445, 1445-1, 1445-2, 1445-3) are repealed.
    (c) Definition of Basic Agricultural Commodity.--Section 408(c) of 
the Agricultural Act of 1949 (7 U.S.C. 1428(c)) is amended by striking 
``tobacco,''.
    (d) Review of Burley Tobacco Imports.--Section 3 of Public Law 98-
59 (7 U.S.C. 625) is repealed.
    (e) Powers of Commodity Credit Corporation.--Section 5 of the 
Commodity Credit Corporation Charter Act (15 U.S.C. 714c) is amended by 
inserting ``(other than tobacco)'' after ``agricultural commodities'' 
each place it appears.
    (f) Transition Provisions.--
            (1) Price support loan obligations.--The amendments made by 
        this section shall not affect any person's obligations that 
        arise under or with respect to the price support loan program 
        or loans issued through such program under any provision of law 
        in effect before the amendments take effect as provided under 
        subsection (g).
            (2) Tobacco stocks and loans.--The Secretary of Agriculture 
        shall issue regulations that require--
                    (A) the orderly disposition of quota tobacco held 
                by any producer-owned cooperative marketing association 
                that has entered into a loan agreement with the 
                Commodity Credit Corporation to make price support 
                available to producers of quota tobacco;
                    (B) the repayment of all tobacco price support 
                loans or surrender of collateral by such associations 
                not later than one year after this section becomes 
                effective.
            (3) Special rules for termination of no net cost funds and 
        accounts.--Notwithstanding any other provision of law, upon the 
        repeal by subsection (b) of the authorities in section 106A and 
        106B of the Agricultural Act of 1949 for the establishment of 
        tobacco no net cost funds and accounts, respectively--
                    (A) any obligation of a tobacco producer, 
                purchaser, or importer to make payments into any such 
                fund or account also shall terminate; and
                    (B) any monies in any such fund or account shall be 
                disposed of in the manner prescribed by the Secretary 
                of Agriculture, except that--
                            (i) to the extent needed, such monies shall 
                        be applied or used for the purposes therefor 
                        prescribed by such sections; and
                            (ii) if any monies remain, the Secretary 
                        shall transfer such monies to the Secretary of 
                        Health and Human Services for use in accordance 
                        with section 402.
    (g) Application of Amendments.--This section and the amendments 
made by this section shall apply with respect to the 2003 and 
subsequent tobacco crops.

SEC. 403. CONTINUED AVAILABILITY OF FEDERAL CROP INSURANCE.

    Nothing in this title shall be construed to affect the eligibility 
of tobacco producers to obtain crop insurance for their crops pursuant 
to the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.) under the 
terms of such Act.
                                 <all>