[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 2706 Introduced in Senate (IS)]







107th CONGRESS
  2d Session
                                S. 2706

To improve economic opportunity and development in communities that are 
        dependent on tobacco production, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 28, 2002

  Mr. Cleland introduced the following bill; which was read twice and 
   referred to the Committee on Agriculture, Nutrition, and Forestry

_______________________________________________________________________

                                 A BILL


 
To improve economic opportunity and development in communities that are 
        dependent on tobacco production, 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 ``Aid to Tobacco-
Dependent Communities Act of 2002''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
                 TITLE I--TOBACCO PRODUCTION ADJUSTMENT

   Subtitle A--Production Poundage Permits for Flue-Cured and Burley 
                                Tobacco

Sec. 101. Production poundage permits for Flue-cured and Burley 
                            tobacco.
              Subtitle B--Tobacco Equity Reduction Program

Sec. 111. Tobacco equity reduction program.
Sec. 112. Funding.
 Subtitle C--Termination of Marketing Quotas for Flue-Cured and Burley 
                                Tobacco

Sec. 121. Definition of covered tobacco.
Sec. 122. National marketing quota.
Sec. 123. Apportionment of national marketing quota.
Sec. 124. Burley tobacco acreage allotments.
Sec. 125. Lease and transfer of acreage allotments.
Sec. 126. Mandatory sale of Flue-cured tobacco acreage allotments and 
                            marketing quotas.
Sec. 127. Mandatory sale of Burley tobacco acreage allotments and 
                            marketing quotas.
Sec. 128. Acreage--poundage quotas.
Sec. 129. Farm poundage quotas for certain kinds of tobacco.
                       Subtitle D--Administration

Sec. 141. Purchase intentions by cigarette manufacturers.
Sec. 142. Purchase requirements and penalties.
Sec. 143. Tobacco production and marketing information.
Sec. 144. Publication of quotas.
Sec. 145. General adjustment of quotas.
Sec. 146. Eminent domain.
Sec. 147. Reconstitution of farms.
Sec. 148. Voluntary relinquishment of allotments.
Sec. 149. Prohibition on promotion of manufactured tobacco products.
                    TITLE II--TOBACCO PRICE SUPPORT

Sec. 201. Loans, payments, and acreage reduction programs.
Sec. 202. No net cost tobacco fund contributions and assessments.
Sec. 203. Marketing assessments.
Sec. 204. Definitions.
              TITLE III--TOBACCO STANDARDS AND INSPECTIONS

Sec. 301. Tobacco standards.
Sec. 302. Tobacco inspections.
         TITLE IV--ASSISTANCE TO TOBACCO-DEPENDENT COMMUNITIES

Sec. 401. Center for Tobacco-Dependent Communities.
Sec. 402. Tobacco Grower Advisory Board.
Sec. 403. Interagency Task Force on Economic Development.
Sec. 404. Report on marketing incentives.
Sec. 405. Report on stabilization of tobacco production opportunities.
Sec. 406. Report on taxation impact.
                        TITLE V--ADMINISTRATION

Sec. 501. Marketing years.

                 TITLE I--TOBACCO PRODUCTION ADJUSTMENT

   Subtitle A--Production Poundage Permits for Flue-Cured and Burley 
                                Tobacco

SEC. 101. PRODUCTION POUNDAGE PERMITS FOR FLUE-CURED AND BURLEY 
              TOBACCO.

    Title III of the Agricultural Adjustment Act of 1938 is amended by 
inserting after subtitle D (7 U.S.C. 1379a et seq.) the following:

  ``Subtitle E--Production Poundage Permits for Flue-Cured and Burley 
                                Tobacco

``SEC. 380A. DEFINITIONS.

    ``In this subtitle:
            ``(1) Active grower.--
                    ``(A) In general.--The term `active grower' means a 
                person that (as determined by a county committee)--
                            ``(i) is at risk for a crop;
                            ``(ii) provides a significant contribution 
                        of capital, land, or equipment (within the 
                        meaning of sections 1001 and 1001A of the Food 
                        Security Act of 1985 (7 U.S.C. 1308, 1308-1), 
                        alone or in combination with other persons;
                            ``(iii) provides personal labor or active 
                        personal management (within the meaning of 
                        those sections), alone or in combination with 
                        other persons; and
                            ``(iv) shared in the risk of producing 
                        tobacco during--
                                    ``(I) the 2001 crop year; and
                                    ``(II) any of the 1998, 1999, or 
                                2000 crop years.
                    ``(B) Proof.--For purposes of subparagraph (A), a 
                determination of whether a grower is an active grower 
                shall be based on (as applicable, as determined by the 
                county committee)--
                            ``(i) invoices (including evidence of such 
                        payments as bank statements and canceled 
                        checks) for labor, pesticides, other chemicals, 
                        fertilizer, equipment, fuel, repairs, and 
                        tobacco sales bills;
                            ``(ii) documentation relating to operating 
                        loans or other sources of operating capital and 
                        related management decisions; or
                            ``(iii) other proof acceptable to the 
                        county committee that the grower is at risk for 
                        the crop.
            ``(2) Base quota level.--The term `base quota level' means 
        the average quantity of basic marketing quota for Flue-cured or 
        Burley tobacco established for a farm for the 1997 through 1999 
        marketing years.
            ``(3) New active grower.--
                    ``(A) In general.--The term `new active grower' 
                means an individual that--
                            ``(i) has certified to the Secretary the 
                        intention of the grower to become an active 
                        grower (without regard to paragraph 
                        (1)(A)(iv)); and
                            ``(ii) has not had an interest in the 
                        production of tobacco during the immediately 
                        preceding 5 years.
                    ``(B) Exclusion.--The term `new active grower' does 
                not include an active grower that has forfeited or 
                transferred a production poundage permit under section 
                380e or 380d(b), respectively.
            ``(4) Proclamation date.--The term `proclamation date' 
        means--
                    ``(A) in the case of Flue-cured tobacco, December 
                15 of the calendar year preceding the marketing year 
                for any of the 2004 and subsequent crops; and
                    ``(B) in the case of Burley tobacco, February 1 of 
                the calendar year preceding the marketing year for any 
                of the 2002 and subsequent crops.
            ``(5) Quota.--The term `quota' means a farm marketing quota 
        for tobacco established under part I of subtitle B for the 
        marketing year for any of the 2002 or previous crops.
            ``(6) Quota owner.--The term `quota owner' means the owner 
        of a farm (as of January 1, 2002) for which a quota was 
        established for the 2002 crop year.

``SEC. 380B. NATIONAL PRODUCTION POUNDAGE PERMITS.

    ``(a) Proclamation.--
            ``(1) In general.--Subject to subsection (d), not later 
        than the proclamation date for a marketing year for any of the 
        2004 and subsequent crops, the Secretary shall proclaim a 
        production poundage permit for Flue-cured and Burley tobacco 
        for each of the next 3 succeeding marketing years if the 
        Secretary determines, with respect to the kind of tobacco, 
        that--
                    ``(A) a production poundage permit has not 
                previously been proclaimed for the kind of tobacco as 
                of the beginning of the marketing year;
                    ``(B) the marketing year is the last year of 3 
                consecutive years for which production poundage permits 
                or marketing quotas previously proclaimed will be in 
                effect; or
                    ``(C) amendments have been made in provisions 
                establishing farm acreage allotments that will cause 
                material revision of the allotments before the end of 
                the period for which permits or quotas are in effect.
            ``(2) Production poundage permits for second and third 
        marketing years.--The Secretary shall determine and announce 
        the production poundage permits for the second and third 
        marketing years of any 3-year period for which production 
        poundage permits are in effect with respect to Flue-cured and 
        Burley tobacco on or before the proclamation date immediately 
        preceding the beginning of the marketing year to which the 
        permits apply.
            ``(3) Notice.--The Secretary shall provide notice of the 
        production poundage permits that will be in effect for the 
        first marketing year covered by the referendum, to the maximum 
        extent practicable, by mailing a notice to each active grower 
        prior to the holding of any referendum.
    ``(b) Quantity.--
            ``(1) In general.--As part of any national production 
        poundage permit for Flue-cured or Burley proclaimed for a 
        marketing year under subsection (a), the Secretary shall 
        determine and announce the quantity of the kind of tobacco that 
        may be produced or marketed under the production poundage 
        permit.
            ``(2) Level.--Subject to paragraphs (3) through (6), the 
        quantity of a national production poundage permit for Flue-
        cured or Burley proclaimed for a marketing year under 
        subsection (a) shall equal the quantity of the kind of tobacco 
        produced in the United States that the Secretary estimates will 
        be used during the marketing year in the United States and will 
        be exported during the marketing year, as adjusted by the 
        Secretary for the purpose of maintaining an adequate supply or 
        for effecting an orderly reduction of supplies to the reserve 
        supply level.
            ``(3) Reserve.--
                    ``(A) In general.--For each marketing year for 
                which production poundage permits are in effect under 
                this section, the Secretary shall establish a reserve 
                from the national production poundage permit in a 
                quantity equivalent to 3 percent of the national 
                production poundage permit to be available for--
                            ``(i) making corrections and adjusting 
                        inequities in active grower production poundage 
                        permits; and
                            ``(ii) allotting production poundage 
                        permits to new active growers.
                    ``(B) New active growers.--The Secretary shall use 
                not less than \2/3\ of the reserve for new active 
                growers.
            ``(4) Limitations.--For the marketing year for each of the 
        2004 and subsequent crops of Flue-cured tobacco and Burley 
        tobacco, the quantity of the national production poundage 
        permit for the kind of tobacco for a marketing year shall be 
        equal to the quantity of the kind of tobacco, as determined by 
        the Secretary, that is not more than 103 percent nor less than 
        97 percent of the total of--
                    ``(A) the aggregate of the quantities of the kind 
                of tobacco that domestic manufacturers of cigarettes 
                estimate the manufacturers intend to purchase on the 
                United States auction markets or from active growers 
                during the marketing year, as compiled and determined 
                under section 320A;
                    ``(B) the average annual quantity of the kind of 
                tobacco exported from the United States during the 3 
                marketing years immediately preceding the marketing 
                year for which the determination is being made; and
                    ``(C) the quantity, if any, of kind of tobacco that 
                the Secretary determines is necessary to increase or 
                decrease the inventory of the grower-owned cooperative 
                marketing association that has entered into a loan 
                agreement with the Commodity Credit Corporation to make 
                price support available to producers of the kind of 
                tobacco to establish or maintain the inventory at the 
                reserve stock level for the kind of tobacco.
            ``(5) Increase.--Not later than the following March 1, the 
        Secretary may increase the quantity of the production poundage 
        permit announced under paragraph (1) by not more than 20 
        percent if the Secretary determines that the increase is 
        necessary in order to meet market demands or to avoid undue 
        restrictions of marketings in adjusting the total supply to the 
        reserve supply level.
    ``(c) Referendum.--
            ``(1) In general.--Not later than 30 days after the 
        proclamation of production poundage permits under subsection 
        (a), the Secretary shall conduct a referendum among active 
        growers of Flue-cured and Burley tobacco to determine whether 
        the active growers of such kind of tobacco are in favor of or 
        opposed to the permits for the next 3 succeeding marketing 
        years.
            ``(2) Disapproval.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), if more than \1/3\ of the active 
                growers voting in the referendum oppose the production 
                poundage permits--
                            ``(i) the Secretary shall proclaim the 
                        results; and
                            ``(ii) the proclaimed production poundage 
                        permits shall not be in effect.
                    ``(B) Subsequent proclamations and referenda.--The 
                disapproval of production poundage permits in a 
                referendum conducted under this subsection shall not 
                affect or limit the subsequent proclamation and 
                submission to a referendum of a production poundage 
                permit in accordance with this section.
    ``(d) Permits or Quotas Disapproved in Successive Referenda.--
            ``(1) In general.--Except as provided in paragraph (2), if 
        active growers of a kind of tobacco have disapproved production 
        poundage permits in referenda held in 3 successive years under 
        subsection (c), the Secretary shall not proclaim a production 
        poundage permit for any marketing year within the 3-year period 
        for which production poundage permits previously proclaimed 
        were disapproved by active growers in a referendum.
            ``(2) Petition.--Paragraph (1) shall not apply if, prior to 
        November 10 of the calendar year preceding the marketing year, 
        at least 25 percent of the farmers engaged in the production of 
        the crop of tobacco harvested in the calendar year in which the 
        marketing year begins petition the Secretary, in accordance 
        with such regulations as the Secretary may promulgate, to 
        proclaim a production poundage permit for each of the next 3 
        succeeding marketing years.

``SEC. 380C. PRODUCTION POUNDAGE PERMITS FOR INDIVIDUAL ACTIVE GROWERS.

    ``(a) First Marketing Year.--For the first marketing year for which 
production poundage permits are in effect for Flue-cured or Burley 
tobacco under section 380b, the Secretary shall allocate the national 
production poundage permit for the marketing year (less the national 
reserve) among active growers of the kind of tobacco, on a pro rata 
basis that reflects the quantity of the kind of tobacco active growers 
were eligible to market during the marketing year for the 2002 crop of 
the kind of tobacco under an allotment or quota established under part 
I of subtitle B.
    ``(b) Succeeding Marketing Years.--
            ``(1) In general.--For each marketing year after the first 
        marketing year for which production poundage permits are in 
        effect for Flue-cured or Burley tobacco under section 380b, the 
        quantity of a production poundage permit of an active grower 
        for the marketing year shall be the product obtained by 
        multiplying--
                    ``(A) the quantity of the kind of tobacco allowed 
                to be produced by the active grower under the most 
                recent marketing year production poundage permit issued 
                to the active grower; by
                    ``(B) a national factor obtained by dividing--
                            ``(i) the national production poundage 
                        permit determined under section 380b for the 
                        kind of tobacco (less the national reserve); by
                            ``(ii) the sum of production poundage 
                        permits for the kind of tobacco for the most 
                        recent year for all active growers for which 
                        production poundage permits will be determined 
                        for the applicable marketing year.
            ``(2) Excess marketings.--
                    ``(A) In general.--The quantity of a production 
                poundage permit allotted to an active grower for a 
                marketing year under this subsection shall be reduced 
                by the number of pounds by which marketing for the 
                active grower during the immediately preceding year 
                exceeded the production poundage permit of the active 
                grower (after adjustments).
                    ``(B) Subsequent marketing years.--If as a result 
                of excess marketings in the most recent year the 
                quantity of the kind of tobacco allowed to be produced 
                by an active grower under a production poundage permit 
                for the marketing year is reduced to 0 pounds without 
                achieving the entire reduction required, the additional 
                reduction required shall be made in subsequent 
                marketing years.
            ``(3) New active growers.--
                    ``(A) In general.--Subject to subparagraphs (B) and 
                (C), the quantity of a production poundage permit for a 
                new active grower applicant under this subsection shall 
                be the number of pounds determined by the county 
                committee, with approval of the State committee, to be 
                fair and reasonable for the grower on the basis of--
                            ``(i) the past experience of the grower 
                        with respect to the kind of tobacco involved;
                            ``(ii) the land, labor, and equipment 
                        available for the production of the kind of 
                        tobacco, excluding any income requirement;
                            ``(iii) crop rotation practices; and
                            ``(iv) the soil and other physical factors 
                        affecting the production of the tobacco.
                    ``(B) Minimum quantity.--The initial permit for any 
                new active grower under this paragraph shall not be 
                less than--
                            ``(i) 8,000 pounds of Flue-cured tobacco; 
                        or
                            ``(ii) 4,000 pounds of Burley tobacco.
                    ``(C) National reserve.--The number of pounds 
                allocated to all new active growers under this 
                paragraph shall not exceed that portion of the national 
                reserve that is provided by the Secretary for 
                establishing production poundage permits for new active 
                growers.

``SEC. 380D. SALE, LEASE, OR TRANSFER OF PERMITS.

    ``(a) In General.--Except as provided in subsection (b), no permit 
issued under this subtitle may be sold, leased, rented (including share 
or case rentals), or transferred to any other person.
    ``(b) Discontinuation of Production of Tobacco.--
            ``(1) Individuals.--In the case of an active grower who 
        dies or who determines not to continue producing Flue-cured or 
        Burley tobacco--
                    ``(A) the permit of the active grower may be 
                transferred to the spouse, surviving spouse, or direct 
                legal descendants (as appropriate) of the active 
                grower, in the same proportion as the active grower 
                held the interest; and
                    ``(B) the spouse or descendants shall receive all 
                rights and be subject to all obligations as the 
                original active grower.
            ``(2) Partnerships.--In the case of a partnership that 
        includes an active grower described in paragraph (1)--
                    ``(A) the spouse, surviving spouse, or direct 
                descendants (as appropriate) of an active grower may 
                receive a permit in the same proportion as an active 
                grower who dies or who determines not to continue 
                producing Flue-cured or Burley tobacco held the 
                interest; and
                    ``(B) any portion of the permit attributable to the 
                active grower that has no spouse, surviving spouse, or 
                direct descendant shall be forfeited and made available 
                for reallocation under section 380e(d).
            ``(3) Corporations.--
                    ``(A) In general.--In the case of a corporation, 
                any permit shall continue to be in effect for such 
                period as the corporation continues to function as an 
                active grower.
                    ``(B) Transfers.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), no permit held by a corporation 
                        may be transferred to any individual or other 
                        entity, including--
                                    ``(I) any individual or entity that 
                                purchases the corporation; or
                                    ``(II) the successor or assign of a 
                                corporation.
                            ``(ii) Family members.--Any spouse, 
                        surviving spouse, or direct descendant of a 
                        stockholder of the corporation may receive such 
                        a permit in the same proportion as is 
                        attributable to the stockholder when the 
                        stockholder sells or otherwise transfers to any 
                        such spouse or descendant the stockholder's 
                        ownership interest in the corporation.
                    ``(C) Reallocation.--Except as provided in 
                subparagraph (B)(ii), if the corporation ceases to 
                function as an active grower, any permit of the 
                corporation shall be reallocated in accordance with 
                section 380e(d).

``SEC. 380E. REDUCTIONS OR FORFEITURES.

    ``(a) Definition of Fully Used.--In this section, the term `fully 
used' means that at least 75 percent of the quantity of Flue-cured or 
Burley tobacco eligible to be marketed under a production poundage 
permit is produced by an active grower and marketed or considered by 
the county committee to be marketed, with no credit provided in any 
future year for the failure to market the quantity specified in the 
permit within any crop year, unless the failure was due to damaging 
weather or related condition (as determined by the Secretary).
    ``(b) Permits That Are Not Fully Used.--Any permit that is not 
fully used under this section shall be subject to permanent reduction 
or forfeiture.
    ``(c) County Committees.--
            ``(1) In general.--The relevant county committee shall make 
        determinations regarding reductions or forfeitures under 
        subsection (b) according to criteria established by the 
        Secretary.
            ``(2) Criteria.--The criteria shall include consideration 
        of whether conditions beyond the control of the active grower 
        that prevented the permit from being fully used.
    ``(d) Reallocation.--Any permit that is reduced or forfeited may be 
reallocated by the Secretary to other active growers in the same 
county.

``SEC. 380F. AUCTION WAREHOUSES.

    ``(a) In General.--The Secretary shall require that any active 
grower with a production poundage permit under this subtitle greater 
than zero shall indicate on such form as the Secretary shall require--
            ``(1) the number of pounds of Flue-cured and Burley tobacco 
        the grower intends to market by auction at 1 or more warehouses 
        designated by the active grower; and
            ``(2) the number of pounds of Flue-cured and Burley tobacco 
        the producer intends to market by non-auction.
    ``(b) Price Support.--Any active grower that fails to file a 
warehouse designation under this section shall not be eligible to 
receive price support under the Agricultural Act of 1949 (7 U.S.C. 1421 
et seq.) for the tobacco marketed under the production poundage permit 
of the grower.

``SEC. 380G. REDUCTION OF PRODUCTION POUNDAGE PERMITS.

    ``(a) In General.--Subject to subsection (b), when a production 
poundage permit is in effect for Flue-cured or Burley tobacco under 
this subtitle, the production poundage permit of an active grower next 
established for the grower shall be reduced by the quantity of the 
tobacco produced by the grower--
            ``(1) that is marketed as having been produced under a 
        different permit;
            ``(2) for which proof of disposition is not furnished as 
        required by the Secretary;
            ``(3) as to which any grower files, or aids or acquiesces 
        in the filing of, any false report with respect to the 
        production or marketings of tobacco; and
            ``(4) as to which any grower participated in any scheme or 
        device to circumvent any requirement of the program.
    ``(b) Lack of Causality.--If the Secretary, acting through the 
local county committee, finds that neither the grower, nor any person 
under the control or supervision of the grower, caused, aided, or 
acquiesced in any action described in subsection (a), the next 
established production poundage permit shall not be reduced under this 
subsection.
    ``(c) Multiple Tobacco Crops.--If in any calendar year more than 1 
crop of tobacco is grown from the same tobacco plants, or different 
tobacco plants, and is harvested for marketing from the same acreage of 
a farm under this subtitle, the Secretary shall reduce the subsequent 
production poundage permit for the active grower by a quantity 
equivalent to the poundage of the additional crop of tobacco.
    ``(d) Eminent Domain.--In establishing production poundage permits 
for active growers displaced by acquisition of land by any agency, as 
provided in section 378, only a decrease in the production poundage 
permits as provided in this section shall be made on account of 
marketings in excess of the production poundage permit of a grower.
    ``(e) Additional Reductions.--The reductions required under this 
section shall be in addition to any other adjustments made pursuant to 
this subtitle.

``SEC. 380H. PENALTIES.

    ``(a) In General.--
            ``(1) Penalties.--Except as provided in section 380b(b), 
        when production poundage permits under this subtitle are in 
        effect, section 314 shall apply to this subtitle.
            ``(2) Administration.--For the purpose of paragraph (1), 
        the marketing of tobacco in excess of a quantity permitted 
        under a production poundage permit under this subtitle shall be 
        considered the same as the marketing of tobacco in excess of a 
        marketing quota.
    ``(b) Triggering Quantity.--
            ``(1) In general.--No penalty on excess tobacco shall be 
        due or collected until 103 percent of the production poundage 
        permit has been marketed.
            ``(2) Marketing in excess of triggering quantity.--In the 
        case of each pound of tobacco marketed in excess of the 
        percentage described in paragraph (1), the full penalty rate 
        shall be due, payable, and collected at the time of marketing 
        on each pound of excess tobacco marketed.
            ``(3) Reduction in subsequent permits.--Any tobacco 
        marketed in excess of 100 percent of the production poundage 
        permit shall require a reduction in subsequent permits in 
        accordance with section 380g.
            ``(4) Marketing of certain grades.--If the Secretary 
        determines it is desirable to encourage the marketing of grade 
        N<INF>2</INF> tobacco or any grade of tobacco not eligible for 
        price support in order to meet the normal demands of export and 
        domestic markets, the Secretary may authorize the marketing of 
        the tobacco in a marketing year under this subtitle without the 
        payment of penalty or deduction from subsequent quotas in a 
        quantity that does not exceed 5 percent of the production 
        poundage permit for the active grower.
    ``(c) False Information.--Notwithstanding the third sentence of 
section 314(a), when production poundage permits established under this 
subtitle are in effect, if any active grower falsely identifies or 
fails to account for the disposition of any tobacco or participates in 
any scheme or device to circumvent any requirement of the program--
            ``(1) in lieu of assessing and collecting penalties based 
        on actual marketings of excess tobacco, the Secretary may elect 
        to assess a penalty computed by multiplying--
                    ``(A) the full penalty rate; by
                    ``(B) a quantity of tobacco equal to the greater 
                of--
                            ``(i) 25 percent of the production poundage 
                        permit, plus the farm yield of the number of 
                        acres harvested in excess of the production 
                        poundage permit; or
                            ``(ii) 100 percent of the production 
                        poundage permit (after adjustments); and
            ``(2) the penalty shall be paid and remitted by the active 
        grower.
    ``(d) False Identification of Permits.--Notwithstanding any other 
provision of this section, if an active grower falsely identifies 
tobacco as having been produced or marketed under a production poundage 
permit other than the production poundage permit issued for the active 
grower, the quantity of tobacco falsely identified shall be considered 
for purposes of establishing future production poundage permits as 
having been produced on the production poundage permits of all active 
growers involved in the false identification.

``SEC. 380I. REPORTS.

    ``(a) In General.--Each active grower for whom a production 
poundage permit is established under this subtitle shall annually file 
with the Secretary a report of the acreage planted to Flue-cured and 
Burley tobacco.
    ``(b) Recordkeeping System.--Not later than 180 days after the date 
of enactment of this subtitle, the Secretary shall establish a 
computerized recordkeeping system that contains all information 
reported under subsection (a) and related records, as determined by the 
Secretary.''.

              Subtitle B--Tobacco Equity Reduction Program

SEC. 111. TOBACCO EQUITY REDUCTION PROGRAM.

    Subtitle H of title III of the Agricultural Adjustment Act of 1938 
(as added by section 101) is amended by adding at the end the 
following:

``SEC. 380J. TOBACCO EQUITY REDUCTION PROGRAM.

    ``(a) Program.--The Secretary, acting through the Commodity Credit 
Corporation, shall establish a tobacco equity reduction program that is 
applicable to quota owners and growers of Flue-cured and Burley quota 
tobacco.
    ``(b) Eligibility.--
            ``(1) In general.--Effective beginning with the 2004 crop 
        year, any quota owner or grower of record of Flue-cured or 
        Burley tobacco during the 2002 crop year shall be eligible to 
        receive compensation under the program.
            ``(2) Owners that are not growers.--Any quota owner that 
        did not grow tobacco on the farm to which a tobacco quota 
        applied during the 2002 crop year shall be eligible to receive 
        compensation under the program, except that the owner shall not 
        have any ownership interest in any such marketing quota after 
        the date on which the compensation is received.
            ``(3) Proportional payment.--Any payment under this section 
        shall be made only in an amount that is proportional to the 
        ownership or interest held by the recipient.
            ``(4) Application.--To be eligible to receive compensation 
        under this section, any quota owner or grower shall prepare and 
        submit to the Secretary an application for compensation in such 
        form and at such time as the Secretary shall prescribe.
            ``(5) Criteria.--The application shall demonstrate to the 
        satisfaction of the Secretary that the applicant meets the 
        requirements of this section.
    ``(c) Payments.--
            ``(1) Quota owners.--The amount of a payment made under the 
        program to a quota owner shall be equal to the amount obtained 
        by multiplying--
                    ``(A) the base quota level for the quota owner; by
                    ``(B) $8 per pound.
            ``(2) Growers that discontinue production.--The amount of a 
        payment made under the program to a grower on a farm that 
        agrees to discontinue production of tobacco shall be equal to 
        the amount obtained by multiplying--
                    ``(A) the grower's share of the base quota level 
                for the farm; by
                    ``(B) $4 per pound.
            ``(3) Growers that continue production.--The amount of a 
        payment made under the program to a grower on a farm that 
        indicates an intention to continue production of tobacco shall 
        be equal to the amount obtained by multiplying--
                    ``(A) the grower's share of the base quota level 
                for the farm; by
                    ``(B) $2 per pound.
    ``(d) Administration.--
            ``(1) Agreement.--A payment to a quota owner or grower 
        under the program shall be made through the execution of an 
        irrevocable agreement between the Secretary and the owner or 
        grower.
            ``(2) Payments.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), an agreement shall provide that 
                compensation under the program shall be made to the 
                quota owner or grower over a period of 5 years 
                commencing with the date on which the agreement is 
                signed.
                    ``(B) Small quota owners that discontinue 
                production.--Any quota owner that has a base quota 
                level of 1,000 pounds or less and that no longer 
                intends to engage in tobacco production may receive the 
                total compensation for which the owner is eligible 
                under the program during the first year after the date 
                on which the agreement is signed.
            ``(3) Growers that discontinue production.--
                    ``(A) In general.--If any active grower agrees to 
                discontinue production of tobacco, receives a payment 
                under subsection (c)(2), and has carryover tobacco, the 
                grower shall (at determined by the grower)--
                            ``(i) destroy the tobacco under the 
                        supervision of the Secretary and receive the 
                        full amount of the payment to which the grower 
                        is entitled under this section; or
                            ``(ii) receive the amount of the payment to 
                        which the grower is entitled under this 
                        section, reduced by an amount equal to the 
                        amount obtained by multiplying--
                                    ``(I) the quantity of carryover 
                                tobacco; by
                                    ``(II) the national price-support 
                                level for the kind of tobacco for the 
                                year produced.
                    ``(B) Temporary permit.--Any grower that receives 
                compensation under subparagraph (A)(ii) shall receive a 
                temporary permit authorizing the grower to market the 
                carryover tobacco in the subsequent marketing year.
                    ``(C) Reduction of subsequent quantities.--Any 
                poundage sold under the temporary permit shall be 
                deducted from the quantity of production poundage 
                permits issued for growers in the United States for the 
                subsequent marketing year.
    ``(e) Payment Limitation.--Notwithstanding any other provision of 
law, payments made under this section shall not be subject to any 
payment limitation otherwise provided by law.''.

SEC. 112. FUNDING.

    Subtitle H of title III of the Agricultural Adjustment Act of 1938 
(as added by section 111) is amended by adding at the end the 
following:

``SEC. 380K. FUNDING.

    ``(a) Definitions.--In this section:
            ``(1) Market share.--The term `market share' means the 
        ratio of--
                    ``(A) the tax liability of a tobacco product 
                manufacturer or tobacco product importer for a calendar 
                year under section 5703 of the Internal Revenue Code of 
                1986; to
                    ``(B) the tax liability of all tobacco product 
                manufacturers or tobacco product importers for the 
                calendar year under section 5703 of the Internal 
                Revenue Code of 1986.
            ``(2) Tobacco product importer.--The term `tobacco product 
        importer' has the meaning given the term `importer' in section 
        5702 of the Internal Revenue Code of 1986.
            ``(3) Tobacco product manufacturer.--
                    ``(A) In general.--The term `tobacco product 
                manufacturer' has the meaning given the term 
                ``manufacturer of tobacco products'' in section 5702 of 
                the Internal Revenue Code of 1986.
                    ``(B) Exclusion.--The term `tobacco product 
                manufacturer' does not include a person that 
                manufactures cigars or pipe tobacco.
    ``(b) Determinations.--Not later than September 30 of each fiscal 
year, the Secretary shall--
            ``(1) determine--
                    ``(A) the market share of each tobacco product 
                manufacturer or tobacco product importer during the 
                most recent calendar year;
                    ``(B) the total amount of assessments payable for 
                the subsequent fiscal year under subsection (c); and
                    ``(C) the amount of an assessment payable by the 
                tobacco product manufacturer or tobacco product 
                importer for the fiscal year under subsection (d); and
            ``(2) notify each tobacco product manufacturer and tobacco 
        product importer of the determinations made under paragraph (1) 
        with respect to the manufacturer or importer.
    ``(c) Total Amount of Assessments.--
            ``(1) In general.--The total amount of assessments payable 
        by all tobacco product manufacturers and tobacco product 
        importers to the Secretary and the Commodity Credit Corporation 
        for a fiscal year shall be equal to--
                    ``(A) the amount of the contribution for the fiscal 
                year required under paragraph (2); less
                    ``(B) any amount made available during the 
                preceding fiscal year to the Secretary and the 
                Commodity Credit Corporation out of funds allocated 
                through national tobacco settlement legislation.
            ``(2) Contributions.--The amount of the contribution for 
        each fiscal year under paragraph (1)(A) shall be the amount 
        necessary to carry out during the fiscal year the Aid to 
        Tobacco-Dependent Communities Act of 2002 and the amendments 
        made by that Act, as determined by the Secretary.
    ``(d) Individual Amount of Assessments.--The amount of an 
assessment payable by each tobacco product manufacturer and tobacco 
product importer under this section for a fiscal year shall be equal to 
the product obtained by multiplying--
            ``(1) the total amount of assessments payable by all 
        tobacco product manufacturers and tobacco product importers for 
        the fiscal year under subsection (c); by
            ``(2) the market share of the tobacco product manufacturer 
        or tobacco product importer during the most recent calendar 
        year determined under subsection (b)(1)(A).''.

 Subtitle C--Termination of Marketing Quotas for Flue-Cured and Burley 
                                Tobacco

SEC. 121. DEFINITION OF COVERED TOBACCO.

    Part I of subtitle B of title III of the Agricultural Adjustment 
Act of 1938 is amended by inserting before section 311 (7 U.S.C. 1311) 
the following:

``SEC. 310. DEFINITION OF COVERED TOBACCO.

    ``In this part, the term `covered tobacco' means any kind of 
tobacco other than Flue-cured or Burley tobacco.''.

SEC. 122. NATIONAL MARKETING QUOTA.

    Section 312 of the Agricultural Adjustment Act of 1938 (7 U.S.C. 
1312) is amended--
            (1) in subsection (a), by striking ``December 1'' and all 
        that follows through ``other kinds of tobacco'' and inserting 
        ``March 1 of any marketing year with respect to covered 
        tobacco''; and
            (2) in the first sentence of subsection (b), by striking 
        ``the first day of December'' and all that follows through 
        ``other kinds of tobacco'' and inserting ``March 1 with respect 
        to covered tobacco''.

SEC. 123. APPORTIONMENT OF NATIONAL MARKETING QUOTA.

    Section 313 of the Agricultural Adjustment Act of 1938 (7 U.S.C. 
1313) is amended--
            (1) in subsection (a)--
                    (A) by striking ``quota: Provided,'' and all that 
                follows through ``acre: And provided further, That'' 
                and inserting ``quota, except that''; and
                    (B) by striking ``practices: And provided 
                further,'' and all that follows and inserting 
                ``practices.'';
            (2) in the proviso of subsection (b), by striking ``(1)'' 
        and all that follows through ``or (2)'' and inserting ``(1) 
        2,400 pounds, in the case of covered tobacco, or (2)'';
            (3) by striking subsection (e); and
            (4) in paragraph (2) of the third sentence of subsection 
        (g), by striking ``three thousand'' and all that follows 
        through ``tobacco: Provided, That'' and inserting ``2,400 
        pounds, in the case of covered tobacco, except that''.

SEC. 124. BURLEY TOBACCO ACREAGE ALLOTMENTS.

    The Act entitled ``An Act relating to burley tobacco farm acreage 
allotments under the Agricultural Adjustment Act of 1938, as amended'', 
approved July 12, 1952 (7 U.S.C. 1315), is repealed.

SEC. 125. LEASE AND TRANSFER OF ACREAGE ALLOTMENTS.

    Section 316 of the Agricultural Adjustment Act of 1938 (7 U.S.C. 
1314b) is amended--
            (1) by striking the section heading and all that follows 
        through ``(A)(i) The'' and inserting the following:

``SEC. 316. LEASE AND TRANSFER OF ACREAGE ALLOTMENTS.

    ``(a) In General.--Notwithstanding any other provision of law, 
the'';
            (2) in subsection (a)--
                    (A) by striking ``Burley, Flue-cured,''; and
                    (B) by striking ``(ii) The Secretary'' and all that 
                follows;
            (3) in subsection (e)--
                    (A) by striking paragraph (2); and
                    (B) by redesignating paragraph (3) as paragraph 
                (2); and
            (4) by striking subsection (g) through the end of the 
        section.

SEC. 126. MANDATORY SALE OF FLUE-CURED TOBACCO ACREAGE ALLOTMENTS AND 
              MARKETING QUOTAS.

    Section 316A of the Agricultural Adjustment Act of 1938 (7 U.S.C. 
1314b-1) is repealed.

SEC. 127. MANDATORY SALE OF BURLEY TOBACCO ACREAGE ALLOTMENTS AND 
              MARKETING QUOTAS.

    Section 316B of the Agricultural Adjustment Act of 1938 (7 U.S.C. 
1314b-2) is repealed.

SEC. 128. ACREAGE--POUNDAGE QUOTAS.

    Section 317 of the Agricultural Adjustment Act of 1938 (7 U.S.C. 
1314c) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (1)--
                            (i) by striking ``(1)(A)'' and inserting 
                        ``(1)''; and
                            (ii) by striking subparagraphs (B) and (C);
                    (B) in paragraph (2), by striking the last 
                sentence;
                    (C) in paragraph (4), by striking the second and 
                third sentences; and
                    (D) by striking paragraph (5) and all that follows 
                through the end of the first sentence of paragraph 
                (6)(B) and inserting the following:
            ``(5) Community average yield.--The term `community average 
        yield' means, for covered tobacco, the average yield per acre 
        in the community designated by the Secretary as a local 
        administrative area under section 8(b) of the Soil Conservation 
        and Domestic Allotment Act (16 U.S.C. 590h(b)), which is 
        determined by averaging the yields per acre for the 3 highest 
        years of the 1960 through 1964 crop years, except that if the 
        yield for any of the 3 highest years is less than 80 percent of 
        the average for the 3 years, that 1 or more years shall be 
        eliminated and the average of the remaining years shall be the 
        community average yield.
            ``(6) Preliminary farm yield.--
                    ``(A) In general.--The term `preliminary farm 
                yield' for covered tobacco means a farm yield per acre 
                determined by averaging the yield per acre for the 3 
                highest years of the immediately preceding 5 crops 
                year, except that--
                            ``(i) if that average exceeds 120 percent 
                        of the community average yield the preliminary 
                        farm yield shall be the sum of 50 percent of 
                        the average of the 3 highest years and 50 
                        percent of the national average yield goal but 
                        not less than 120 percent of the community 
                        average yield; and
                            ``(ii) if the average of the 3 highest 
                        years is less than 80 percent of the community 
                        average yield the preliminary farm yield shall 
                        be 80 percent of the community average yield.
                    ``(B) Administration.--'';
            (2) by striking subsection (b);
            (3) in the first sentence of subsection (c)--
                    (A) by striking ``, including Flue-cured 
                tobacco,''; and
                    (B) in the proviso, by striking ``except Flue-cured 
                tobacco'';
            (4) in subsection (d)--
                    (A) in the first sentence, by striking ``December 
                15 of any marketing year with respect to Flue-cured 
                tobacco, and March 1 with respect to other kinds of 
                tobacco'' and inserting ``March 1 with respect to 
                covered tobacco'';
                    (B) by striking the second and fourth sentences;
                    (C) in the eighth sentence, by striking ``the 
                December 15 with respect to Flue-cured tobacco and the 
                March 1 with respect to other kinds of tobacco'' and 
                inserting ``the March 1 with respect to covered 
                tobacco''; and
                    (D) by striking the last 2 sentences;
            (5) in subsection (f), by striking the last sentence;
            (6) in subsection (g)(1), by striking ``(120 per centum'' 
        and all that follows through ``section)'';
            (7) by striking subsections (h), (i), (k), and (l); and
            (8) by redesignating subsection (j) as subsection (h).

SEC. 129. FARM POUNDAGE QUOTAS FOR CERTAIN KINDS OF TOBACCO.

    Section 319 of the Agricultural Adjustment Act of 1938 (7 U.S.C. 
1314e) is amended--
            (1) by striking subsection (a);
            (2) in subsection (c)--
                    (A) in paragraph (1), by striking ``Except as 
                provided in paragraph (3), the'' and inserting ``The''; 
                and
                    (B) by striking paragraph (3);
            (3) in subsection (d)--
                    (A) in the first sentence, by striking ``for the 
                marketing year beginning October 1, 1970, in the case 
                of burley tobacco, and''; and
                    (B) in the second sentence--
                            (i) by striking ``the five consecutive 
                        years beginning with the 1966 crop year, in the 
                        case of burley tobacco, and''; and
                            (ii) in the third proviso, by striking 
                        ``three thousand five hundred pounds per acre, 
                        in the case of burley tobacco, and'';
            (4) in subsection (e)--
                    (A) by striking the first sentence; and
                    (B) by striking the second proviso;
            (5) in subsection (g)--
                    (A) in paragraph (1)--
                            (i) by striking ``(1)''; and
                            (ii) by striking the third and fourth 
                        provisos; and
                    (B) by striking paragraphs (2) and (3);
            (6) by striking subsection (h);
            (7) in subsection (i)(3), by striking the second and third 
        sentences; and
            (8) by striking subsections (k), (l), (m), and (n).

                       Subtitle D--Administration

SEC. 141. PURCHASE INTENTIONS BY CIGARETTE MANUFACTURERS.

    Section 320A(a)(1) of the Agricultural Adjustment Act of 1938 (7 
U.S.C. 1314g(a)(1)) is amended--
            (1) by striking ``(or, in the case of the 1986 crop, 14 
        days after the date of enactment of the Consolidated Omnibus 
        Budget Reconciliation Act of 1985)'';
            (2) by striking ``(or, in the case of the 1986 crop, 14 
        days after the date of enactment of such Act or January 15, 
        1986, whichever is later)''; and
            (3) by striking ``marketing quota'' each place it appears 
        and inserting ``production poundage permit''.

SEC. 142. PURCHASE REQUIREMENTS AND PENALTIES.

    Section 320B of the Agricultural Adjustment Act of 1938 (7 U.S.C. 
1314h) is amended--
            (1) by striking ``quota tobacco'' each place it appears and 
        inserting ``covered tobacco'';
            (2) in subsection (b)--
                    (A) in paragraph (1), by striking ``at least 90 
                percent of''; and
                    (B) in paragraph (2)(A)--
                            (i) by striking ``marketing quota'' each 
                        place it appears and inserting ``production 
                        poundage permit''; and
                            (ii) by striking ``or undermarketings'' 
                        each place it appears;
            (3) in subsection (c)--
                    (A) by striking paragraph (1) and inserting the 
                following:
            ``(1) the penalty rate for the applicable kind of tobacco 
        under section 314(a); by''; and
                    (B) in paragraph (2)(B), by striking ``90 percent 
                of''; and
            (4) in subsection (f), by striking ``marketing quotas'' 
        each place it appears and inserting ``production poundage 
        permits''.

SEC. 143. TOBACCO PRODUCTION AND MARKETING INFORMATION.

    (a) In General.--Section 320D(a) of the Agricultural Adjustment Act 
of 1938 (7 U.S.C. 1314i(a)) is amended--
            (1) by striking ``Notwithstanding'' and inserting the 
        following:
            ``(1) State trusts and similar organizations.--
        Notwithstanding''; and
            (2) by adding at the end the following:
            ``(2) Foreign countries.--
                    ``(A) In general.--The Secretary shall collect and 
                disseminate information from foreign countries 
                regarding production, consumption, and such other 
                information related to production and consumption of 
                tobacco in such countries as the Secretary determines 
                appropriate.
                    ``(B) Information.--The information shall include 
                material related to market development, international 
                trade agreements and negotiations, economic research, 
                and the collection and analysis of statistics and 
                market information.''.
    (b) Conforming Amendment.--Section 320D(e)(2) of the Agricultural 
Adjustment Act of 1938 (7 U.S.C. 1314i(e)(2)) is amended by inserting 
``or production poundage permits'' after ``quotas''.

SEC. 144. PUBLICATION OF QUOTAS.

    (a) Applicability.--Section 361 of the Agricultural Adjustment Act 
of 1938 (7 U.S.C. 1361) is amended--
            (1) by striking ``This'' and inserting ``Except as 
        otherwise provided in this Act, this''; and
            (2) by inserting ``or production poundage permits'' after 
        ``quotas''.
    (b) Publication and Notice.--Section 362 of the Agricultural 
Adjustment Act of 1938 (7 U.S.C. 1362) is amended--
            (1) in the first sentence, by inserting ``or production 
        poundage permits'' after ``quotas'';
            (2) in the third sentence--
                    (A) by inserting ``or production poundage permit'' 
                after ``quota''; and
                    (B) by inserting ``or active grower'' after 
                ``farmer''; and
            (3) in the fourth sentence--
                    (A) by inserting ``or production poundage permit'' 
                after ``allotment'' each place it appears;
                    (B) by inserting ``or active grower'' after ``each 
                farm''; and
                    (C) by inserting ``or active grower'' after 
                ``operator''.
    (c) Inapplicability to Tobacco.--Part I of subtitle C of title III 
of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1361 et seq.) is 
amended by adding at the end the following:

``SEC. 369. INAPPLICABILITY TO TOBACCO.

    ``Sections 363 through 368 shall not apply to tobacco.''.

SEC. 145. GENERAL ADJUSTMENT OF QUOTAS.

    Section 371 of the Agricultural Adjustment Act of 1938 (7 U.S.C. 
1371) is amended--
            (1) in subsection (a), by inserting ``or production 
        poundage permits'' after ``quotas'' each place it appears;
            (2) in subsection (b)--
                    (A) in the first sentence, by inserting ``or 
                production poundage permit'' after ``acreage 
                allotment''; and
                    (B) in the second sentence, by inserting ``, 
                permit,'' after ``such quota''; and
            (3) in subsection (c) by inserting ``, production poundage 
        permit,'' after ``quota'' each place it appears.

SEC. 146. EMINENT DOMAIN.

    Section 378(f) of the Agricultural Adjustment Act of 1938 (7 U.S.C. 
1378(f)) is amended--
            (1) by striking ``(f) In applying the provisions of this'' 
        and inserting the following:
    ``(f) Application to Farms With Quotas or Permits.--
            ``(1) Quotas.--In applying this''; and
            (2) by adding at the end the following:
            ``(2) Permits.--In applying this section to production 
        poundage permits for Flue-cured and Burley tobacco established 
        under this Act:
                    ``(A) Allotment.--The term `allotment' means a 
                production poundage permit for Flue-cured or Burley 
                tobacco.
                    ``(B) Own.--The term `own' means, with respect to 
                an active grower, to own or lease land.
                    ``(C) Owner.--The term `owner' means an active 
                grower to whom a permit has been issued.''.

SEC. 147. RECONSTITUTION OF FARMS.

    Section 379 of the Agricultural Adjustment Act of 1938 (7 U.S.C. 
1379) is amended--
            (1) in subsection (a)(6), by striking all after ``uses'' 
        and inserting a period; and
            (2) in subsection (b), by striking ``if (1)'' and all that 
        follows through ``(2)''; and
            (3) by striking subsection (c).

SEC. 148. VOLUNTARY RELINQUISHMENT OF ALLOTMENTS.

    Section 803 of the Agriculture Act of 1970 (16 U.S.C. 590q-2) is 
amended--
            (1) by inserting ``, production poundage permit,'' after 
        ``allotment'' each place it appears; and
            (2) by inserting ``, or active grower in the case of a 
        production poundage permit for tobacco,'' after ``farm''.

SEC. 149. PROHIBITION ON PROMOTION OF MANUFACTURED TOBACCO PRODUCTS.

    Part I of subtitle F of title III of the Agricultural Adjustment 
Act of 1938 (7 U.S.C. 1381 et seq.) is amended by adding at the end the 
following:

``SEC. 390A. PROHIBITION ON PROMOTION OF MANUFACTURED TOBACCO PRODUCTS.

    ``Notwithstanding any other provision of law, no officer or 
employee of the Federal Government, or any agent acting on behalf of an 
officer or employee, shall have any authority under this or any other 
Act--
            ``(1) to promote the sale or export of a manufactured 
        tobacco product; or
            ``(2) to seek the reduction or removal by any foreign 
        country of a restriction on the marketing of manufactured 
        tobacco products, except for a restriction that is not applied 
        equally to all manufactured tobacco products of the same 
        type.''.

                    TITLE II--TOBACCO PRICE SUPPORT

SEC. 201. LOANS, PAYMENTS, AND ACREAGE REDUCTION PROGRAMS.

    (a) Availability of Price Support.--Section 106(c) of the 
Agricultural Act of 1949 (7 U.S.C. 1445(c)) is amended--
            (1) by inserting ``, or production poundage permits,'' 
        after ``quotas'';
            (2) by inserting ``, or subtitle E of title III,'' after 
        ``317 or 319'';
            (3) by inserting ``or permit'' after ``quota''; and
            (4) by inserting ``or grower by which the tobacco was 
        produced, as applicable'' after ``produced,''.
    (b) Level of Support.--Section 106(f) of the Agricultural Act of 
1949 (7 U.S.C. 1445(f)) is amended--
            (1) in paragraph (6)(A), by striking ``(other than Flue-
        cured and Burley tobacco)''; and
            (2) in paragraph (7)--
                    (A) in subparagraph (A), by inserting ``or 
                production poundage permits'' after ``quotas''; and
                    (B) in subparagraph (B)(v), by striking ``purchase 
                or leasing of quotas,''.
    (c) Support Level Reduction.--Section 106(f) of the Agricultural 
Act of 1949 (7 U.S.C. 1445(f)) is amended by adding at the end the 
following:
            ``(9) Reduction at request of association.--
                    ``(A) In general.--Notwithstanding any other 
                provision of this subsection, if requested by the board 
                of directors of an association through which price 
                support for Flue-cured or Burley tobacco is made 
                available to growers, the Secretary may reduce the 
                support level for the tobacco to the extent requested 
                by the association to more accurately reflect the 
                market value and improve the marketability of the 
                tobacco.
                    ``(B) No effect on subsequent years.--Any reduction 
                under subparagraph (A) shall not be used in 
                establishing the support rate for that kind of tobacco 
                in any year subsequent to the reduction.''.
    (d) Technical Amendment.--Section 106 of the Agricultural Act of 
1949 (7 U.S.C. 1445) is amended by striking subsection (g).

SEC. 202. NO NET COST TOBACCO FUND CONTRIBUTIONS AND ASSESSMENTS.

    (a) Definitions.--Section 106A of the Agricultural Act of 1949 (7 
U.S.C. 1445-1) is amended--
            (1) by striking ``quota tobacco'' each place it appears and 
        inserting ``covered tobacco''; and
            (2) in subsection (a)--
                    (A) in paragraph (6), by striking all after ``Flue-
                cured'' and inserting ``, Burley, or other kinds of 
                quota or production poundage permit tobacco; and''; and
                    (B) in paragraph (7), by inserting ``or production 
                poundage permits'' after ``quotas'' each place it 
                appears.
    (b) Contributions and Assessments.--Section 106A(d) of the 
Agricultural Act of 1949 (7 U.S.C. 1445-1(d)) is amended--
            (1) in paragraph (1)--
                    (A) in subparagraph (A)--
                            (i) in clause (ii), by striking ``and 
                        Burley'' and inserting ``, Burley, and other 
                        kinds of''; and
                            (ii) in clause (iii)--
                                    (I) by striking ``or Burley'' and 
                                inserting ``, Burley, or all other 
                                kinds of quota tobacco''; and
                                    (II) in subclause (II), by striking 
                                ``and Burley'' and inserting ``, 
                                Burley, and other kinds of quota''; and
                    (B) in subparagraph (B), by striking ``account.'' 
                and inserting ``account, and only 2002 and subsequent 
                crops of other kinds of tobacco shall be taken into 
                account.''; and
            (2) in paragraph (2)(B), by striking ``warehouseman'' each 
        place it appears and inserting ``warehouse operator''.
    (c) Receiving Stations.--Section 106A of the Agricultural Act of 
1949 (7 U.S.C. 1445-1) is amended by adding at the end the following:
    ``(i) Receiving Stations.--
            ``(1) In general.--An association may establish receiving 
        stations to receive tobacco in any geographical area where it 
        is determined by an association (with the concurrence of the 
        Commodity Credit Corporation) that active growers in the area 
        do not have access to traditional auction markets.
            ``(2) Opportunity to purchase tobacco.--Any buyer of 
        tobacco shall be afforded an opportunity to purchase tobacco 
        delivered to any receiving station established under this 
        subsection prior to the tobacco being pledged as security for 
        price support loans.''.

SEC. 203. MARKETING ASSESSMENTS.

    (a) Definitions.--Section 106B(a) of the Agricultural Act of 1949 
(7 U.S.C. 1445-2(a)) is amended--
            (1) in paragraph (5), by inserting ``or production poundage 
        permits'' after ``quotas'' each place it appears;
            (2) in paragraph (8), by striking ``or Burley'' and 
        inserting ``, Burley, or other kinds of''; and
            (3) by adding at the end the following:
            ``(9) Quota.--The term `quota' means a marketing quota or 
        production poundage permit.''.
    (b) Payment of Assessment.--Section 106B(d) of the Agricultural Act 
of 1949 (7 U.S.C. 1445-2(d)) is amended--
            (1) in paragraph (1)--
                    (A) in subparagraph (B), by striking ``and Burley 
                quota'' and inserting ``, Burley, and all other kinds 
                of quota''; and
                    (B) in subparagraph (C), by striking ``and Burley'' 
                and inserting ``, Burley, and all other kinds of 
                quota'';
            (2) in paragraph (2)(A), by striking ``account.'' and 
        inserting ``account, and only 2002 and subsequent crops of 
        other kinds of tobacco shall be taken into account.''; and
            (3) in paragraph (3)(D), by striking ``or Burley'' and 
        inserting ``, Burley, or any other kind of quota''.
    (c) Receiving Stations.--Section 106B of the Agricultural Act of 
1949 (7 U.S.C. 1445-2) is amended by adding at the end the following:
    ``(k) Receiving Stations.--
            ``(1) In general.--An association may establish receiving 
        stations to receive quota tobacco in any geographical area 
        where it is determined by an association (with the concurrence 
        of the Commodity Credit Corporation) that active growers in the 
        area do not have access to traditional auction markets.
            ``(2) Opportunity to purchase tobacco.--Any buyer of 
        tobacco shall be afforded an opportunity to purchase quota 
        tobacco delivered to any receiving station established under 
        this subsection prior to the tobacco being pledged as security 
        for price support loans.''.

SEC. 204. DEFINITIONS.

    Section 408 of the Agricultural Act of 1949 (7 U.S.C. 1428) is 
amended by adding at the end the following:
            ``(m) Active grower.--The term `active grower' has the 
        meaning given the term in section 301(c) of the Agricultural 
        Adjustment Act of 1938 (7 U.S.C. 1308(c)).
            ``(n) Production poundage permit.--The term `production 
        poundage permit' means a permit issued to an active grower for 
        the purpose of producing tobacco.''.

              TITLE III--TOBACCO STANDARDS AND INSPECTIONS

SEC. 301. TOBACCO STANDARDS.

    (a) Definition.--The first section of the Tobacco Inspection Act (7 
U.S.C. 511) is amended by adding at the end the following:
            ``(j) Nonauction sale.--The term `nonauction sale' means a 
        sale of tobacco by contract or means other than through a sale 
        at auction.''.
    (b) Findings.--Section 2 of the Tobacco Inspection Act (7 U.S.C. 
511a) is amended by inserting after ``markets'' the following: ``or by 
nonauction sale (including receiving stations operated by loan 
associations under sections 106A and 106B of the Agricultural Act of 
1949 (7 U.S.C. 1445-1 and 1445-2)''.
    (c) Certification of Grade.--Section 8 of the Tobacco Inspection 
Act (7 U.S.C. 511g) is amended--
            (1) by striking ``Warehousemen'' and inserting ``Warehouse 
        operators or other purchasers of tobacco''; and
            (2) by striking ``warehouse'' each place it appears.
    (d) Applicability.--The Tobacco Inspection Act is amended--
            (1) by redesignating section 18 (7 U.S.C. 511q) as section 
        19; and
            (2) by inserting after section 17 (7 U.S.C. 511p) the 
        following:

``SEC. 18. APPLICABILITY TO NONAUCTION SALE OF TOBACCO.

    ``This Act also shall apply to any nonauction sale of tobacco.''.

SEC. 302. TOBACCO INSPECTIONS.

    (a) Tobacco To Be Inspected.--Section 213(a)(1) of the Tobacco 
Adjustment Act of 1983 (7 U.S.C. 511r(a)(1)) is amended--
            (1) by striking ``, except tobacco described in paragraph 
        (2),''; and
            (2) by striking ``through a warehouse''.
    (b) Uniformity of Standards.--Section 213(b) of the Tobacco 
Adjustment Act of 1983 (7 U.S.C. 511r(b)) is amended--
            (1) by striking ``through a warehouse''; and
            (2) by inserting before the period the following: ``, 
        including oriental tobacco regardless of whether the tobacco is 
        not produced in the United States''.
    (c) Certification.--Section 213(e) of the Tobacco Adjustment Act of 
1983 (7 U.S.C. 511r(e)) is amended--
            (1) in paragraphs (1), (4), and (5), by striking ``flue-
        cured or burley'' each place it appears; and
            (2) in paragraphs (2) and (3), by striking ``flue-cured and 
        burley'' and inserting ``all''.
    (d) Identification of End Users.--Section 213(f)(1) of the Tobacco 
Adjustment Act of 1983 (7 U.S.C. 511r(f)(1)) is amended in the second 
sentence by striking ``flue cured or burley''.

         TITLE IV--ASSISTANCE TO TOBACCO-DEPENDENT COMMUNITIES

SEC. 401. CENTER FOR TOBACCO-DEPENDENT COMMUNITIES.

    (a) Findings.--Congress finds that--
            (1) tobacco production is conducted extensively in a number 
        of States;
            (2) tobacco production generates significant income in 
        local communities, which are dependent on the production for 
        economic vitality;
            (3) many tobacco-producing communities are facing 
        significant challenges in developing nontobacco income, and are 
        quite dependent on tobacco and vulnerable to changes in the 
        tobacco-growing industry;
            (4) greater analysis and study is needed of economic 
        conditions in the communities in order to gain critical 
        information, including analysis and study of--
                    (A) the interconnections among various tobacco-
                related activities;
                    (B) the degree to which the economic base of the 
                communities is diversified; and
                    (C) the extent to which the communities are 
                dependent on other declining economic sectors; and
            (5) while tobacco-growing States have some financial 
        resources to support community revitalization, few States have 
        the resources necessary to provide the support that tobacco-
        dependent communities, quota owners, and growers require to 
        transition successfully from a tobacco-dependent economy to a 
        thriving, diversified economic base.
    (b) Establishment.--
            (1) In general.--There is authorized to be established a 
        nonprofit corporation, to be known as the ``Center for Tobacco-
        Dependent Communities'', which will not be an agency or 
        establishment of the United States Government.
            (2) Laws.--The Center shall be subject to--
                    (A) this section; and
                    (B) to the extent consistent with this section, the 
                laws (including regulations) of the State where the 
                Center is incorporated applicable to nonprofit 
                corporations.
    (c) Board of Directors.--
            (1) Composition.--
                    (A) In general.--The Center shall have a Board of 
                Directors consisting of 7 members, of which--
                            (i) 6 members shall be appointed by the 
                        President, by and with the advice and consent 
                        of the Senate; and
                            (ii) 1 member shall be appointed by the 
                        other members of the Board, who shall serve as 
                        Executive Director of the Center.
                    (B) Political party.--Of the members appointed by 
                the President under subparagraph (A)(i), not more than 
                3 of the members may be members of the same political 
                party.
                    (C) Qualifications.--Each member of the Board 
                appointed by the President under subparagraph (A)(i) 
                shall--
                            (i) be a citizen of the United States;
                            (ii) have knowledge and experience 
                        regarding the matters for which the Center is 
                        responsible; and
                            (iii) be eminent in issues related to rural 
                        development, including--
                                    (I) small-crop agriculture;
                                    (II) entrepreneurial activity; and
                                    (III) industrial, small business, 
                                and community development.
            (2) Duties of initial board.--The members of the initial 
        Board of Directors shall--
                    (A) serve as incorporators; and
                    (B) take whatever actions are necessary to 
                establish the Center under the laws (including 
                regulations) of the State where the Center is 
                incorporated.
            (3) Terms.--
                    (A) In general.--The term of office of each member 
                of the Board appointed by the President shall be 4 
                years, except that of the members initially appointed, 
                3 members shall serve for a 2-year term.
                    (B) Expiration of term.--Any member whose term has 
                expired may serve until the successor of the member has 
                taken office or until the end of the calendar year in 
                which the term of the member has expired, whichever is 
                earlier.
                    (C) Vacancies.--
                            (i) In general.--Any member appointed to 
                        fill a vacancy occurring prior to the 
                        expiration of the term for which 
the predecessor of the member was appointed shall be appointed for the 
remainder of the term.
                            (ii) Powers.--Any vacancy on the Board 
                        shall not affect the powers of the Board and 
                        shall be filled in a manner consistent with 
                        this section.
                    (D) Consecutive terms.--No member of the Board 
                shall be eligible to serve in excess of 2 consecutive 
                full terms.
            (4) Meetings.--
                    (A) In general.--A member of the Board shall attend 
                not less than 50 percent of all meetings of the Board 
                in any calendar year.
                    (B) Failure to attend meetings.--If a member fails 
                to meet the requirement of subparagraph (A)--
                            (i) the member shall forfeit membership on 
                        the Board; and
                            (ii) not later than 30 days after the 
                        vacancy is determined by the Chairperson of the 
                        Board, the President shall appoint a new member 
                        to fill the vacancy.
                    (C) Public meetings.--All meetings of the Board, 
                including any committee of the Board, shall be open to 
                the public.
            (5) Administration.--
                    (A) Chairperson and vice chairperson.--Members of 
                the Board shall annually elect--
                            (i) 1 member of the Board to serve as 
                        Chairperson; and
                            (ii) 1 or more members of the Board to 
                        serve as Vice Chairpersons.
                    (B) Nonfederal employees.--A member of the Board 
                shall not, by reason of membership on the Board, be an 
                officer or employee of the United States.
                    (C) Compensation.--
                            (i) In general.--Subject to clause (ii), a 
                        member of the Board shall, while attending a 
                        meeting of the Board or while engaged in duties 
                        related to the meeting or other activities of 
                        the Board pursuant to this section, be entitled 
                        to receive compensation at the rate of $150 per 
                        day, including travel time.
                            (ii) Limitation.--No member of the Board 
                        shall receive compensation of more than $10,000 
                        for any fiscal year.
                    (D) Expenses.--While away from the home or regular 
                place of business, a member of the Board shall be 
                allowed travel and actual, reasonable, and necessary 
                expenses.
    (d) Officers and Employees.--
            (1) In general.--Subject to paragraph (2), the Center shall 
        have a President, and such other officers and employees as may 
        be appointed by the Board, for terms and at rates of 
        compensation fixed by the Board.
            (2) Compensation limitation.--No officer or employee of the 
        Corporation may be compensated by the Corporation at an annual 
        rate of pay that exceeds the rate of basic pay in effect for 
        level I of the Executive Schedule under section 5312 of title 
        5, United States Code.
            (3) Citizenship.--To be eligible to be an officer or 
        employee of the Center, an individual shall be a citizen of the 
        United States.
            (4) Other compensation.--
                    (A) In general.--Except as provided in subparagraph 
                (B), no officer or employee of the Center, other than 
                the Chairperson or Vice Chairperson, may receive any 
                salary or other compensation from any sources other 
                than the Center for services rendered during the period 
                of employment by the Center.
                    (B) Exceptions.--With the advance approval of the 
                Board and subject to ethical guidelines established by 
                the Board, an office or employee of the Center may 
                receive compensation for--
                            (i) service on a board of directors of an 
                        organization that does not receive funds from 
                        the Center;
                            (ii) service on a committee of a board 
                        described in clause (i); and
                            (iii) similar activities for an 
                        organization described in clause (i).
            (5) Tenure.--An officer or employee of the Center shall 
        serve at the pleasure of the Board.
            (6) Nonpolitical position.--Except as provided in 
        subsection (c)(1)(B), no political test or qualification shall 
        be used in selecting, appointing, promoting, or taking other 
        personnel actions with respect to an officer, employee, or 
        agent of the Center.
    (e) Nonprofit and Nonpolitical Nature of the Center.--
            (1) No stock or dividends.--The Center shall have no power 
        to issue any shares of stock or to declare or pay any 
        dividends.
            (2) Use of income or assets.--No part of the income or 
        assets of the Center shall inure to the benefit of any 
        director, officer, employee, or any other individual except as 
        salary or reasonable compensation for services.
            (3) Political contributions.--The Center may not contribute 
        to or otherwise support any political party or candidate for 
        elective public office.
    (f) Purposes and Powers.--
            (1) Purposes.--The purposes of the Center are--
                    (A) to provide economic and community development 
                assistance for tobacco communities to assist the 
                communities in making the transition from tobacco-based 
                economies;
                    (B) to provide primarily agricultural and 
                entrepreneurial assistance to the communities, 
                including outreach and education to tobacco quota 
                owners, growers, and other persons (including small 
                communities) with limited ability to obtain access to 
economic development resources; and
                    (C) in particular, to provide assistance to 
                tobacco-producing communities identified by the 
                Secretary (acting through the Economic Research 
                Service), with emphasis on those communities that are 
                especially dependent on tobacco production for the 
                generation of revenue.
            (2) Powers.--In carrying out paragraph (1), the Center 
        may--
                    (A) provide communities and producers with targeted 
                technical assistance;
                    (B) convene meetings and conduct workshops and 
                conferences;
                    (C) serve as a clearinghouse for exchange of 
                information regarding best industry practices;
                    (D) provide research and policy development 
                activities;
                    (E) serve as an advocate for communities making the 
                transition from tobacco-based economies;
                    (F) make grants to individuals or entities, 
                including challenge grants, community mini-grants, 
                technical assistance grants, and grants for pilot 
                projects and demonstrations;
                    (G) hire or accept the voluntary services of 
                consultants, experts, advisory boards, and panels to 
                aid the Center in carrying out the purposes of this 
                section;
                    (H) accept bequests, donations, and other forms of 
                assistance; and
                    (I) take such other actions as may be necessary to 
                accomplish the purposes described in paragraph (1).
            (3) No federal funds.--Subject to subsection (i), nothing 
        in this subsection commits the Federal Government to provide 
        any funds for the payment of any obligation of the Center.
            (4) Customary powers.--To carry out this subsection, the 
        Center shall have the customary powers conferred on a nonprofit 
        corporation by applicable laws (including regulations) of the 
        State where the Center is incorporated, except that the Center 
        shall not own or operate any tobacco-related interest.
    (g) Annual Report.--
            (1) In general.--Not later than May 15 of each year, the 
        Center shall submit an annual report for the preceding fiscal 
        year ending September 30 to the President for transmittal to 
        Congress.
            (2) Contents.--The report shall include--
                    (A) a comprehensive and detailed report of the 
                operations, activities, financial condition, and 
                accomplishments of the Center under this section and 
                such recommendations as the Center considers 
                appropriate; and
                    (B) a listing of each organization that receives a 
                grant from the Center and the purpose and amount of 
                each grant.
            (3) Congressional testimony.--An officer or employee of the 
        Center shall be available to testify before an appropriate 
        committee of Congress with respect to--
                    (A) the report required under paragraph (1);
                    (B) the report of any audit made by the Comptroller 
                General of the United States pursuant to this section; 
                or
                    (C) any other matter that the committee may 
                determine.
    (h) Financial Management and Records.--
            (1) Independent annual audits.--
                    (A) In general.--The accounts of the Center shall 
                be audited annually in accordance with generally 
                accepted auditing standards by 1 or more independent 
                certified public accountants or independent licensed 
                public accountants certified or licensed by a 
                regulatory authority of a State or political 
                subdivision of a State.
                    (B) Location.--The audit shall be conducted at the 
                1 or more places where the accounts of the Center are 
                normally kept.
                    (C) Information and facilities.--The 1 or more 
                persons conducting the audit shall--
                            (i) have access to all books, accounts, 
                        records, reports, files, and other papers, 
                        things, or property belonging to or in use by 
                        the Center and necessary to facilitate the 
                        audit, which shall remain in the possession and 
                        custody of the Center; and
                            (ii) be provided full facilities for 
                        verifying transactions with the balances or 
                        securities held by depositories, fiscal agents, 
                        and custodians.
                    (D) Annual report.--The report of each independent 
                audit conducted under this paragraph shall be included 
                in the annual report required by subsection (g)(1).
                    (E) Contents.--The audit report shall--
                            (i) provide a description of the scope of 
                        the audit;
                            (ii) include such statements as are 
                        necessary to analyze the assets and liabilities 
                        (including any surplus or deficit) of the 
                        Center, with an analysis of the changes in the 
                        assets, liabilities, and expenses during the 
                        applicable year; and
                            (iii) provide a statement of the sources 
                        and application of funds, together with the 
                        opinion of the independent auditor of the 
                        statement.
            (2) Audits by general accounting office.--
                    (A) In general.--The financial transactions of the 
                Center for any fiscal year during which Federal funds 
                are available to finance any portion of the operations 
                of the Center may be audited by the General Accounting 
                Office in accordance with the principles and procedures 
                applicable to commercial corporate transactions and 
                under such rules and regulations as may be prescribed 
by the Comptroller General of the United States.
                    (B) Location.--The audit shall be conducted at the 
                1 or more places where accounts of the Center are 
                normally kept.
                    (C) Information and facilities.--The 
                representatives of the General Accounting Office 
                conducting the audit shall--
                            (i) have access to all books, accounts, 
                        records, reports, files, and other papers, 
                        things, or property belonging to or in use by 
                        the Center and necessary to facilitate the 
                        audit, which shall remain in the possession and 
                        custody of the Center; and
                            (ii) be provided full facilities for 
                        verifying transactions with the balances or 
                        securities held by depositories, fiscal agents, 
                        and custodians.
                    (D) Report.--
                            (i) In general.--A report of each audit 
                        conducted under this paragraph shall be made by 
                        the Comptroller General to Congress.
                            (ii) Contents.--The report shall contain--
                                    (I) such comments and information 
                                as the Comptroller General determines 
                                necessary to inform Congress of the 
                                financial operations and condition of 
                                the Center;
                                    (II) such recommendations with 
                                respect to the operations and condition 
                                as the Comptroller General may consider 
                                advisable; and
                                    (III) a description of any program, 
                                expenditure, or other financial 
                                transaction or undertaking observed in 
                                the course of the audit, that, in the 
                                opinion of the Comptroller General, has 
                                been carried on or made without 
                                authority of law.
                            (iii) Copies.--At the time the report is 
                        submitted to Congress, a copy of the report 
                        shall be furnished to the President, the 
                        Secretary, and the Center.
            (3) Accounting.--
                    (A) In general.--Not later than 1 year after the 
                date of enactment of this section, in consultation with 
                the Comptroller General and other appropriate persons, 
                the Center shall develop accounting principles that 
                shall be used uniformly by all individuals and entities 
                receiving funds under this section, taking into account 
                organizational differences among various categories of 
                the individuals and entities.
                    (B) Scope.--The principles shall cover all funds 
                received and expended by the individuals or entities 
                under this section.
                    (C) Requirements.--Each individual and entity 
                receiving funds under this section shall be required--
                            (i) to keep its books, records, and 
                        accounts in such form as may be required by the 
                        Center;
                            (ii)(I) to undergo a biennial audit by 
                        independent certified public accountants or 
                        independent licensed public accountants 
                        certified or licensed by a regulatory authority 
                        of a State, which audit shall be in accordance 
                        with auditing standards developed by the 
                        Center; or
                            (II) to submit a financial statement in 
                        lieu of the audit required by subclause (I) if 
                        the Center determines that the cost of the 
                        audit imposed on the individual or entity is 
                        excessive in light of the financial condition 
                        of the individual or entity; and
                            (iii) to furnish biennially to the Center--
                                    (I) a copy of the audit report 
                                required under clause (ii); and
                                    (II) such other information 
                                regarding finances (including an annual 
                                financial report) as the Center may 
                                require.
                    (D) Maintenance of records by recipients.--Any 
                recipient of assistance by grant under this section 
                shall keep--
                            (i) such records as may be reasonably 
                        necessary to disclose fully--
                                    (I) the amount and the disposition 
                                by the recipient of the assistance;
                                    (II) the total cost of the project 
                                or undertaking in connection with which 
                                the assistance is given or used; and
                                    (III) the amount and nature of that 
                                portion of the cost of the project or 
                                undertaking supplied by other sources; 
                                and
                            (ii) such other records as will facilitate 
                        an effective audit.
                    (E) Access to recipient records.--
                            (i) Center.--The Center (including an 
                        authorized representative) shall have access to 
                        any books, documents, papers, and records of 
                        any recipient of assistance for the purpose of 
                        auditing and examining all funds received or 
                        expended by the recipient under this section.
                            (ii) Comptroller general.--The Comptroller 
                        General of the United States (including an 
                        authorized representative) shall have access to 
                        such books, documents, papers, and records for 
                        the purpose of auditing and examining all funds 
                        received or expended under this section during 
                        any fiscal year for which Federal funds are 
                        available to the Center.
            (4) Public access.--
                    (A) In general.--The Center shall maintain the 
                information described in subparagraphs (C), (D), and 
                (E) of paragraph (3) at the offices of the Center for 
                public inspection and copying for at least 3 years, 
according to such reasonable guidelines as the Center may issue.
                    (B) Updates.--The Center shall regularly update the 
                information.
                    (C) Applicability.--This paragraph shall apply to 
                all assistance provided under this section after the 
                date of enactment of this Act.
    (i) Funding.--
            (1) Mandatory funding.--Of the amounts made available under 
        section 380k(c) of the Agricultural Adjustment Act of 1938 (as 
        added by section 112), the Secretary shall transfer to the 
        Center to carry out this section not less than $5,000,000 for 
        each of fiscal years 2003 through 2007.
            (2) Discretionary funding.--There is authorized to be 
        appropriated to the Center for fiscal year 2008 and each 
        subsequent fiscal year such sums as are necessary to carry out 
        this section.
            (3) Availability.--Funds appropriated under this subsection 
        shall remain available until expended.
            (4) Distribution.--Funds made available under this 
        subsection shall be disbursed by the Secretary on a fiscal year 
        basis.
            (5) Annual budget.--The Center shall establish an annual 
        budget for use in allocating amounts made available to the 
        Center under this subsection.
            (6) Use.--The Center shall use funds made available under 
        this subsection, to the maximum extent practicable, to provide 
        grants and technical assistance in accordance with this 
        section.

SEC. 402. TOBACCO GROWER ADVISORY BOARD.

    (a) Establishment.--There is established, within the Department of 
Agriculture, a Tobacco Grower Advisory Board.
    (b) Membership.--
            (1) In general.--The Advisory Board shall consist of 15 
        members appointed by the Secretary from a list of nominees 
        submitted to groups and organizations that represent active 
        grower of Burley or Flue-cured tobacco.
            (2) Qualifications.--
                    (A) In general.--A member of the Advisory Board 
                shall be an active grower of Burley or Flue-cured 
                tobacco.
                    (B) Political party.--Of the members appointed by 
                the Secretary under paragraph (1), not more than 8 of 
                the members may be members of the same political party.
            (3) Term.--A member of the Advisory shall serve for a term 
        determined by the Secretary at the time of appointment.
            (4) Compensation.--A member of the Advisory Board shall 
        receive no compensation for the service of the member on the 
        Advisory Board, other than reimbursement for per diem and 
        travel-related expenses.
    (c) Duties.--The Advisory Board shall advise Federal agencies on 
the economic and technical feasibility of actions that the agencies are 
considering regarding tobacco production and product control.
    (d) Agencies.--The Secretary of Agriculture, the Administrator of 
the Environmental Protection Agency, the Commissioner of Food and 
Drugs, the United States Trade Representative, and the heads of other 
agencies with responsibilities related to tobacco production and 
product control shall ensure that mechanisms are in place for the 
Advisory Board to provide its advice and assistance regarding actions 
described in subsection (c).
    (e) Federal Advisory Committee Act.--The Federal Advisory Committee 
Act (5 U.S.C. App) shall not apply to the Advisory Board.

SEC. 403. INTERAGENCY TASK FORCE ON ECONOMIC DEVELOPMENT.

    (a) Establishment.--In order to maximize the economic development 
assistance provided by the Federal Government and to assist communities 
transitioning from tobacco-based economies, the President shall 
establish within the Executive Branch an Interagency Task Force on 
Tobacco-Dependent Communities.
    (b) Membership.--The Task Force shall consist of representatives 
from--
            (1) the Department of Agriculture;
            (2) the Department of Health and Human Services;
            (3) the Department of Commerce; and
            (4) such other agencies as the President determines 
        appropriate.
    (c) Duties.--The Task Force shall be responsible for coordinating 
and identifying Federal economic and business development program 
grants and loans that might be made available to communities to assist 
in the transition of the communities from tobacco-based economies.
    (d) Coordination.--The Task Force shall be coordinated by the Under 
Secretary for Rural Economic and Community Development of the 
Department of Agriculture.
    (e) Consultation.--The Task Force shall consult with the Board of 
Directors of the Center for Tobacco-Dependent Communities established 
under section 401.

SEC. 404. REPORT ON MARKETING INCENTIVES.

    Not later than 180 days after the date of enactment of this Act, 
the Secretary of Agriculture and the Secretary of the Treasury shall 
submit to the appropriate committees of Congress a report that 
describes market-based means by which recipients may use payments 
received under the tobacco equity reduction program established under 
section 380j of the Agricultural Adjustment Act of 1938 (as added by 
section 111) to create or enter new businesses that will promote 
economic activity and generate revenue in tobacco-dependent 
communities, regardless of whether the businesses are farm related.

SEC. 405. REPORT ON STABILIZATION OF TOBACCO PRODUCTION OPPORTUNITIES.

    Not later than 1 year after the date of enactment of this Act, the 
Secretary of Agriculture shall submit to the appropriate committees of 
Congress a report containing recommendations for actions--
            (1) to ensure continued production of tobacco in areas that 
        produce tobacco on the date of enactment of this Act;
            (2) to provide additional opportunity for persons to begin 
        to produce tobacco;
            (3) to provide more equitable treatment of active growers;
            (4) to reduce speculation regarding the quantity of tobacco 
        that is likely to be produced; and
            (5) to provide greater certainty and stability in tobacco 
        marketing.

SEC. 406. REPORT ON TAXATION IMPACT.

    (a) In General.--Not later than 180 days after the date of 
enactment of this Act, the Secretary of Agriculture, in consultation 
with the Secretary of the Treasury, shall submit to the appropriate 
committees of Congress a report on various investment strategies for 
payments received under this Act and the amendments made by this Act to 
lessen the tax impact of the payments.
    (b) Strategies.--The strategies may include--
            (1) retirement plans;
            (2) tax incentives for reinvestment into tobacco-dependent 
        communities; and
            (3) allowing the payments to receive capital gains 
        treatment under the Internal Revenue Code of 1986.

                        TITLE V--ADMINISTRATION

SEC. 501. MARKETING YEARS.

    Except as otherwise provided in this Act, this Act and the 
amendments made by this Act apply beginning with the marketing year for 
the 2004 crop of each kind of tobacco.
                                 <all>