[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 2995 Introduced in Senate (IS)]







107th CONGRESS
  2d Session
                                S. 2995

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

                           September 24, 2002

  Mr. Hollings (for himself and 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 ``Tobacco-Dependent 
Communities Assistance 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.
Sec. 113. Sense of Congress on investment of tobacco equity payments in 
                            investment retirement accounts.
 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. Tobacco price support.
Sec. 202. Conforming amendments.
              TITLE III--TOBACCO STANDARDS AND INSPECTIONS

Sec. 301. Tobacco standards.
Sec. 302. Tobacco inspections.
           TITLE IV--FARMER AND WORKER TRANSITION ASSISTANCE

Sec. 401. Tobacco worker transition program.
Sec. 402. Farmer opportunity grants.
         TITLE V--TOBACCO COMMUNITY ECONOMIC DEVELOPMENT GRANTS

Sec. 501. Tobacco community economic development grants.
                           TITLE VI--IMMUNITY

Sec. 601. General immunity for tobacco producers and warehousers.
                       TITLE VII--ADMINISTRATION

Sec. 701. 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--Tobacco-Dependent Communities Assistance

``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 the 2001 or 2002 crop year.
                    ``(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--
                            ``(i) 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; and
                            ``(ii) an institution of higher education 
                        (as defined in section 101(a) of the Higher 
                        Education Act of 1965 (20 U.S.C. 1001(a))) that 
                        produces tobacco that is used for research 
                        purposes.
                    ``(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 July 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 subsections (c) and (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 may 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 or non-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 \2/3\ 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 for a referendum, 
        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 or a 
        quota grower who dies or determines not to continue producing 
        Flue-cured or Burley tobacco--
                    ``(A) the permit of the active grower or quota 
                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 or quota 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, for at least 2 consecutive years, 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, disease, or a 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 
        (including disease conditions) 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 E 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 with respect to each kind of 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 as of July 1, 2002, shall be eligible to receive 
        compensation under the program.
            ``(2) Owners.--Each quota owner that owned a tobacco quota 
        during the 2002 crop year shall be eligible to receive 
        compensation under the program.
            ``(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.--The amount of a payment made under the 
        program to a grower on a farm 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) Death of quota lessee or quota tenant.--If a quota 
        lessee or quota tenant who is entitled to receive payments 
        under this section dies and is survived by a spouse or 1 or 
        more dependents, the right to receive the payments shall 
        transfer to the surviving spouse or, if there is no surviving 
        spouse, to the immediate family members in equal shares.
    ``(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) and paragraph (3), 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.--Any quota owner that has 
                a base quota level of 1,000 pounds or less 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 and has carryover 
                tobacco, the grower shall (as 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 total amount of the 
                        payments for which the active grower is 
                        eligible under this section, as soon as 
                        practicable after the date the active grower 
                        certifies to the Secretary that the active 
                        grower is discontinuing production of tobacco, 
                        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 Tobacco-
        Dependent Communities Assistance 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).''.

SEC. 113. SENSE OF CONGRESS ON INVESTMENT OF TOBACCO EQUITY PAYMENTS IN 
              INVESTMENT RETIREMENT ACCOUNTS.

    It is the sense of Congress that quota owners and growers of Flue-
cured and Burley quota tobacco should be able to invest payments 
received section 380j of the Agricultural Adjustment Act of 1938 (as 
added by section 111) in tax-deferred investment retirement accounts.

 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 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. TOBACCO PRICE SUPPORT.

    (a) In General.--Section 106 of the Agricultural Act of 1949 (7 
U.S.C. 1445) is amended to read as follows:

``SEC. 106. TOBACCO PRICE SUPPORT.

    ``(a) Price Support Rate to Reflect Cost of Production.--
            ``(1) Establishment and annual adjustment.--The price of 
        each type of tobacco produced in the United States shall be 
        supported at a rate established by the Secretary, and adjusted 
        annually, to reflect the costs of production for producers of 
        that type of tobacco.
            ``(2) Determination of cost of production.--
                    ``(A) In general.--The Secretary shall use the 
                information collection and survey resources of the 
                Economic Research Service and National Agricultural 
                Statistics Service of the Department of Agriculture to 
                determine the cost of domestic tobacco production, 
                including marketing assessments.
                    ``(B) Reevaluation.--The Economic Research Service 
                shall reevaluate the cost of production annually, based 
                on the survey of factors used by the Economic Research 
                Service, which shall be conducted once every 5 years.
    ``(b) Consideration of International Price Levels.--In establishing 
the price support rate for a type of tobacco, the Secretary shall also 
consider international tobacco price levels.
    ``(c) Consultation.--The Secretary shall consult with farm 
organizations, producer cooperatives and associations, colleges and 
universities in tobacco-producing States, and other interested persons 
when determining the costs of tobacco production and establishing or 
adjusting the price support rate.
    ``(d) Differences in Grade.--The Secretary may take into 
consideration differences in tobacco grades when establishing or 
adjusting the price support rate for a type of tobacco.''.
    (b) Elimination of References to Quota Tobacco in No Net Cost 
Provisions.--
            (1) No net cost tobacco fund.--Section 106A of the 
        Agricultural Act of 1949 (7 U.S.C. 1445-1) is amended--
                    (A) in subsection (a)--
                            (i) by striking ``quota'' each place it 
                        appears in paragraphs (4), (5), and (6);
                            (ii) in paragraph (5), by inserting ``and'' 
                        after the semicolon at the end;
                            (iii) in parargraph (6), by striking ``; 
                        and'' and inserting a period; and
                            (iv) by striking paragraph (7);
                    (B) in subsection (d), by striking ``quota'' each 
                place it appears in paragraphs (1), (3), and (7); and
                    (C) in the first sentence of subsection (e), by 
                striking ``quota''.
            (2) No net cost tobacco account.--Section 106B of the 
        Agricultural Act of 1949 (7 U.S.C. 1445-2) is amended--
                    (A) in subsection (a)--
                            (i) in paragraph (5), by striking ``, for 
                        which marketing quotas are in effect or for 
                        which marketing quotas are not disapproved by 
                        producers''; and
                            (ii) in paragraph (8), by striking 
                        ``quota''; and
                    (B) in subsection (d), by striking ``quota'' each 
                place it appears in paragraphs (1)(B) and (2)(A).

SEC. 202. CONFORMING AMENDMENTS.

    (a) Parity Price Support.--Section 101 of the Agricultural Act of 
1949 (7 U.S.C. 1441) is amended--
            (1) in the first sentence of subsection (a), by striking 
        ``tobacco (except as otherwise provided herein), corn,'' and 
        inserting ``corn'';
            (2) by striking subsection (c);
            (3) in subsection (d)(3)--
                    (A) by striking ``, except tobacco,''; and
                    (B) by striking ``and no price support shall be 
                made available for any crop of tobacco for which 
                marketing quotas have been disapproved by producers;''; 
                and
            (4) by redesignating subsections (d) and (e) as subsection 
        (c) and (d), respectively.
    (b) Definition of Basic Agricultural Commodity.--Section 408(c) of 
the Agricultural Act of 1949 (7 U.S.C. 1428(c)) is amended by striking 
``tobacco,''.

              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--FARMER AND WORKER TRANSITION ASSISTANCE

SEC. 401. TOBACCO WORKER TRANSITION PROGRAM.

    (a) Group Eligibility Requirements.--
            (1) Criteria.--A group of workers (including workers in any 
        firm or subdivision of a firm involved in the manufacture, 
        processing, or warehousing of tobacco or tobacco products) 
        shall be certified as eligible to apply for adjustment 
        assistance under this section pursuant to a petition filed 
        under subsection (b) if the Secretary of Labor determines that 
        a significant number or proportion of the workers in the 
        workers' firm or an appropriate subdivision of the firm have 
        become totally or partially separated, or are threatened to 
        become totally or partially separated, and--
                    (A) the sales or production, or both, of such firm 
                or subdivision have decreased absolutely; and
                    (B) the implementation of the national tobacco 
                settlement contributed importantly to such workers' 
                separation or threat of separation and to the decline 
                in the sales or production of such firm or subdivision.
            (2) Definition of contributed importantly.--In paragraph 
        (1)(B), the term ``contributed importantly'' means a cause that 
        is important but not necessarily more important than any other 
        cause.
            (3) Regulations.--The Secretary shall promulgate 
        regulations relating to the application of the criteria 
        described in paragraph (1) in making preliminary findings under 
        subsection (b) and determinations under subsection (c).
    (b) Preliminary Findings and Basic Assistance.--
            (1) Filing of petitions.--A petition for certification of 
        eligibility to apply for adjustment assistance under this 
        section may be filed by a group of workers (including workers 
        in any firm or subdivision of a firm involved in the 
        manufacture, processing, or warehousing of tobacco or tobacco 
        products) or by their certified or recognized union or other 
        duly authorized representative with the Governor of the State 
        in which the workers' firm or subdivision thereof is located.
            (2) Findings and assistance.--Upon receipt of a petition 
        under paragraph (1), the Governor shall--
                    (A) notify the Secretary that the Governor has 
                received the petition;
                    (B) not later than 10 days after receiving the 
                petition--
                            (i) make a preliminary finding as to 
                        whether the petition meets the criteria 
                        described in subsection (a)(1); and
                            (ii) transmit the petition, together with a 
                        statement of the finding under clause (i) and 
                        reasons for the finding, to the Secretary for 
                        action under subsection (c); and
                    (C) if the preliminary finding under subparagraph 
                (B)(i) is affirmative, ensure that rapid response and 
                basic readjustment services authorized under other 
                Federal laws are made available to the workers.
    (c) Review of Petitions by Secretary; Certifications.--
            (1) Determination.--
                    (A) In general.--Not later than 30 days after 
                receiving a petition under subsection (b)(2)(B)(ii), 
                the Secretary shall determine whether the petition 
                meets the criteria described in subsection (a)(1).
                    (B) Affirmative determination.--Upon a 
                determination that the petition meets those criteria, 
                the Secretary shall issue to workers covered by the 
                petition a certification of eligibility to apply for 
                the assistance described in subsection (d).
            (2) Denial of certification.--Upon the denial of a 
        certification with respect to a petition under paragraph (1), 
        the Secretary shall review the petition in accordance with the 
        requirements of other applicable assistance programs to 
        determine if the workers may be certified under those programs.
    (d) Comprehensive Assistance.--
            (1) In general.--Workers covered by a certification issued 
        by the Secretary under subsection (c)(1) shall be provided 
        benefits and services described in paragraph (2) in the same 
        manner and to the same extent as workers covered under a 
        certification under subchapter A of title II of the Trade Act 
        of 1974 (19 U.S.C. 2271 et seq.), except that the total amount 
        of payments under this section for any fiscal year shall not 
        exceed $50,000,000.
            (2) Benefits and services.--The benefits and services 
        described in this paragraph are the following:
                    (A) Employment services of the type described in 
                section 235 of the Trade Act of 1974 (19 U.S.C. 2295).
                    (B) Training described in section 236 of the Trade 
                Act of 1974 (19 U.S.C. 2296), except that 
                notwithstanding the provisions of section 236(a)(2)(A) 
                of that Act, the total amount of payments for training 
                under this section for any fiscal year shall not exceed 
                $25,000,000.
                    (C) Tobacco worker readjustment allowances, which 
                shall be provided in the same manner as trade 
                readjustment allowances are provided under part I of 
                subchapter B of chapter 2 of title II of the Trade Act 
                of 1974 (19 U.S.C. 2291 et seq.), except that--
                            (i) the provisions of sections 231(a)(5)(C) 
                        and 231(c) of that Act (19 U.S.C. 
                        2291(a)(5)(C), 2291(c)), authorizing the 
                        payment of trade readjustment allowances upon a 
                        finding that it is not feasible or appropriate 
                        to approve a training program for a worker, 
                        shall not be applicable to payment of 
                        allowances under this section; and
                            (ii) notwithstanding the provisions of 
                        section 233(b) of that Act (19 U.S.C. 2293(b)), 
                        in order for a worker to qualify for tobacco 
                        readjustment allowances under this section, the 
                        worker shall be enrolled in a training program 
                        approved by the Secretary of the type described 
                        in section 236(a) of that Act (19 U.S.C. 
                        2296(a)) by the later of--
                                    (I) the last day of the 16th week 
                                of such worker's initial unemployment 
                                compensation benefit period; or
                                    (II) the last day of the 6th week 
                                after the week in which the Secretary 
                                issues a certification covering the 
                                worker.
                    (D) Job search allowances of the type described in 
                section 237 of the Trade Act of 1974 (19 U.S.C. 2297).
                    (E) Relocation allowances of the type described in 
                section 238 of the Trade Act of 1974 (19 U.S.C. 2298).
            (3) Extenuating circumstances.--In cases of extenuating 
        circumstances (as determined by the Secretary) relating to 
        enrollment of a worker in a training program under this 
        section, the Secretary may extend the time for enrollment for a 
        period of not to exceed 30 days.
    (e) Ineligibility of Individuals Receiving Payments for Lost 
Tobacco Quota.--No benefit or service may be provided under this 
section to any individual who has received payments for lost tobacco 
quota under section 380k of the Agricultural Adjustment Act of 1938 (as 
added by section 111).
    (f) Funding.--Of the amounts made available under section 380k of 
the Agricultural Adjustment Act of 1938 (as added by section 111), the 
Secretary may use not to exceed $50,000,000 for each of fiscal years 
2003 through 2012 to provide assistance under this section.
    (g) Effective Date.--This section shall take effect on the date 
that is the later of--
            (1) October l, 2003; or
            (2) the date on which legislation implementing the national 
        tobacco settlement is enacted.
    (h) Termination Date.--No assistance, voucher, allowance, or other 
payment may be provided under this section after the date that is the 
earlier of--
            (1) the date that is 10 years after the effective date of 
        this section under subsection (g); or
            (2) the date on which legislation establishing a program 
        providing dislocated workers with comprehensive assistance 
        substantially similar to the assistance provided by this 
        section becomes effective.

SEC. 402. FARMER OPPORTUNITY GRANTS.

    Part A of title IV of the Higher Education Act of 1965 (20 U.S.C. 
1070 et seq.) is amended by adding at the end the following:

                 ``Subpart 9--Farmer Opportunity Grants

``SEC. 420L. STATEMENT OF PURPOSE.

    ``It is the purpose of this subpart to assist in making available 
the benefits of postsecondary education to eligible students 
(determined in accordance with section 420N) in institutions of higher 
education by providing farmer opportunity grants to all eligible 
students.

``SEC. 420M. PROGRAM AUTHORITY; AMOUNT AND DETERMINATIONS; 
              APPLICATIONS.

    ``(a) Program Authority and Method of Distribution.--
            ``(1) Program Authority.--From amounts made available under 
        section 380k of the Agricultural Adjustment Act of 1938 (as 
        added by section 111 of the Tobacco-Dependent Communities 
        Assistance Act of 2002), the Secretary, during the period 
        beginning July 1, 2003, and ending September 30, 2024, shall 
        pay to each eligible institution such sums as may be necessary 
        to pay to each eligible student (determined in accordance with 
        section 420N) for each academic year during which that student 
        is in attendance at an institution of higher education, as an 
        undergraduate, a farmer opportunity grant in the amount for 
        which that student is eligible, as determined pursuant to 
        subsection (b). Not less than 85 percent of such sums shall be 
        advanced to eligible institutions prior to the start of each 
        payment period and shall be based upon an amount requested by 
        the institution as needed to pay eligible students, except that 
        this sentence shall not be construed to limit the authority of 
        the Secretary to place an institution on a reimbursement system 
        of payment.
            ``(2) Construction.--Nothing in this section shall be 
        construed to prohibit the Secretary from paying directly to 
        students, in advance of the beginning of the academic term, an 
        amount for which the students are eligible, in cases where the 
        eligible institution elects not to participate in the 
        disbursement system required by paragraph (1).
            ``(3) Designation.--Grants made under this subpart shall be 
        known as `farmer opportunity grants'.
    ``(b) Amount of Grants.--
            ``(1) Amounts.--
                    ``(A) In general.--The amount of the grant for a 
                student eligible under this subpart shall be--
                            ``(i) $1,700 for academic year 2003 through 
                        2004;
                            ``(ii) $2,000 for each of the academic 
                        years 2004-2005 through 2008-2009;
                            ``(iii) $2,300 for each of the academic 
                        years 2009-2010 through 2013-2014;
                            ``(iv) $2,600 for each of the academic 
                        years 2014-2015 through 2018-2019; and
                            ``(v) $2,900 for each of the academic years 
                        2019-2020 through 2023-2024;
                    ``(B) Part-time rule.--In any case where a student 
                attends an institution of higher education on less than 
                a full-time basis (including a student who attends an 
                institution of higher education on less than a half-
                time basis) during any academic year, the amount of the 
                grant for which that student is eligible shall be 
                reduced in proportion to the degree to which that 
                student is not so attending on a full-time basis, in 
                accordance with a schedule of reductions established by 
                the Secretary for the purposes of this subparagraph, 
                computed in accordance with this subpart. Such schedule 
                of reductions shall be established by regulation and 
                published in the Federal Register.
            ``(2) Maximum.--No grant under this subpart shall exceed 
        the cost of attendance (as described in section 472) at the 
        institution at which that student is in attendance. If, with 
        respect to any student, it is determined that the amount of a 
        grant exceeds the cost of attendance for that year, the amount 
        of the grant shall be reduced to an amount equal to the cost of 
        attendance at such institution.
            ``(3) Prohibition.--No grant shall be awarded under this 
        subpart to any individual who is incarcerated in any Federal, 
        State, or local penal institution.
    ``(c) Period of Eligibility for Grants.--
            ``(1) In general.--The period during which a student may 
        receive grants shall be the period required for the completion 
        of the first undergraduate baccalaureate course of study being 
        pursued by that student at the institution at which the student 
        is in attendance, except that any period during which the 
        student is enrolled in a noncredit or remedial course of study 
        as described in paragraph (2) shall not be counted for the 
        purpose of this paragraph.
            ``(2) Construction.--Nothing in this section shall be 
        construed to--
                    ``(A) exclude from eligibility courses of study 
                that are noncredit or remedial in nature and that are 
                determined by the institution to be necessary to help 
                the student be prepared for the pursuit of a first 
                undergraduate baccalaureate degree or certificate or, 
                in the case of courses in English language instruction, 
                to be necessary to enable the student to utilize 
                already existing knowledge, training, or skills; and
                    ``(B) exclude from eligibility programs of study 
                abroad that are approved for credit by the home 
                institution at which the student is enrolled.
            ``(3) Prohibition.--No student is entitled to receive 
        farmer opportunity grant payments concurrently from more than 1 
        institution or from the Secretary and an institution.
    ``(d) Applications for Grants.--
            ``(1) In general.--The Secretary shall from time to time 
        set dates by which students shall file applications for grants 
        under this subpart. The filing of applications under this 
        subpart shall be coordinated with the filing of applications 
        under section 401(d).
            ``(2) Information and assurances.--Each student desiring a 
        grant for any year shall file with the Secretary an application 
        for the grant containing such information and assurances as the 
        Secretary may determine necessary to enable the Secretary to 
        carry out the Secretary's functions and responsibilities under 
        this subpart.
    ``(e) Distribution of Grants to Students.--Payments under this 
section shall be made in accordance with regulations promulgated by the 
Secretary for such purpose, in such manner as will best accomplish the 
purpose of this subpart. Any disbursement allowed to be made by 
crediting the student's account shall be limited to tuition and fees 
and, in the case of institutionally owned housing, room an board. The 
student may elect to have the institution provide other such goods and 
services by crediting the student's account.
    ``(f) Insufficient Funding.--If, for any fiscal year, the funds 
made available to carry out this subpart under section 380k of the 
Agricultural Adjustment Act of 1938 (as added by section 111 of the 
Tobacco-Dependent Communities Assistance Act of 2002) are insufficient 
to satisfy fully all grants for students determined to be eligible 
under section 420N, the amount of the grant provided under subsection 
(b) shall be reduced on a pro rata basis among all eligible students.
    ``(g) Treatment of Institutions and Students Under Other Laws.--Any 
institution of higher education that enters into an agreement with the 
Secretary to disburse to students attending that institution the 
amounts those students are eligible to receive under this subpart shall 
not be deemed, by virtue of such agreement, to be a contractor 
maintaining a system of records to accomplish a function of the 
Secretary. Recipients of farmer opportunity grants shall not be 
considered to be individual grantees for purposes of the Drug-Free 
Workplace Act of 1988 (41 U.S.C. 701 et seq.).

``SEC. 420N. STUDENT ELIGIBILITY.

    ``(a) In General.--In order to receive any grant under this 
subpart, a student shall--
            ``(1) be a member of a tobacco farm family in accordance 
        with subsection (b);
            ``(2) be enrolled or accepted for enrollment in a degree, 
        certificate, or other program (including a program of study 
        abroad approved for credit by the eligible institution at which 
        such student is enrolled) leading to a recognized educational 
        credential at an institution of higher education that is an 
        eligible institution in accordance with section 487, and not be 
        enrolled in an elementary school or secondary school;
            ``(3) if the student is presently enrolled at an 
        institution of higher education, be maintaining satisfactory 
        progress in the course of study the student is pursuing in 
        accordance with subsection (c);
            ``(4) not owe a refund on grants previously received at any 
        institution of higher education under this title, or be in 
        default on any loan from a student loan fund at any institution 
        provided for in part D, or a loan made, insured, or guaranteed 
        by the Secretary under this title for attendance at any 
        institution;
            ``(5) file with the institution of higher education that 
        the student intends to attend, or is attending, a document, 
        that need not be notarized, but that shall include--
                    ``(A) a statement of educational purpose stating 
                that the money attributable to such grant will be used 
                solely for expenses related to attendance or continued 
attendance at such institution; and
                    ``(B) such student's social security number; and
            ``(6) be a citizen of the United States.
    ``(b) Tobacco Farm Families.--
            ``(1) In general.--For the purpose of subsection (a)(1), a 
        student is a member of a tobacco farm family if during calendar 
        year 1996 the student was--
                    ``(A) an individual who--
                            ``(i) is an active grower (as defined in 
                        section 380a of the Agricultural Adjustment Act 
                        of 1938 (as added by section 101 of the 
                        Tobacco-Dependent Communities Assistance Act of 
                        2002); or
                            ``(ii) is otherwise actively engaged in the 
                        production of tobacco;
                    ``(B) a spouse, son, daughter, stepson, or 
                stepdaughter of an individual described in subparagraph 
                (A);
                    ``(C) an individual--
                            ``(i) who was a brother, sister, 
                        stepbrother, stepsister, son-in-law, or 
                        daughter-in-law of an individual described in 
                        subparagraph (A); and
                            ``(ii) whose principal place of residence 
                        was the home of the individual described in 
                        subparagraph (A); or
                    ``(D) an individual who was a dependent (within the 
                meaning of section 152 of the Internal Revenue Code of 
                1986) of an individual described in subparagraph (A).
            ``(2) Administration.--On request, the Secretary of 
        Agriculture shall provide to the Secretary such information as 
        is necessary to carry out this subsection.
    ``(c) Satisfactory Progress.--
            ``(1) In general.--For the purpose of subsection (a)(3), a 
        student is maintaining satisfactory progress if--
                    ``(A) the institution at which the student is in 
                attendance reviews the progress of the student at the 
                end of each academic year, or its equivalent, as 
                determined by the institution; and
                    ``(B) the student has at least a cumulative C 
                average or its equivalent, or academic standing 
                consistent with the requirements for graduation, as 
                determined by the institution, at the end of the second 
                such academic year.
            ``(2) Special rule.--Whenever a student fails to meet the 
        eligibility requirements of subsection (a)(3) as a result of 
        the application of this subsection and subsequent to that 
        failure the student has academic standing consistent with the 
        requirements for graduation, as determined by the institution, 
        for any grading period, the student may, subject to this 
        subsection, again be eligible under subsection (a)(3) for a 
        grant under this subpart.
            ``(3) Waiver.--Any institution of higher education at which 
        the student is in attendance may waive paragraph (1) or (2) for 
        undue hardship based on--
                    ``(A) the death of a relative of the student;
                    ``(B) the personal injury or illness of the 
                student; or
                    ``(C) special circumstances as determined by the 
                institution.
    ``(d) Students Who Are Not Secondary School Graduates.--In order 
for a student who does not have a certificate of graduation from a 
school providing secondary education, or the recognized equivalent of 
such certificate, to be eligible for any assistance under this subpart, 
the student shall meet either 1 of the following standards:
            ``(1) Examination.--The student shall take an independently 
        administered examination and shall achieve a score, specified 
        by the Secretary, demonstrating that such student can benefit 
        from the education or training being offered. Such examination 
        shall be approved by the Secretary on the basis of compliance 
        with such standards for development, administration, and 
        scoring as the Secretary may prescribe in regulations.
            ``(2) Determination.--The student shall be determined as 
        having the ability to benefit from the education or training in 
        accordance with such process as the State shall prescribe. Any 
        such process described or approved by a State for the purposes 
        of this section shall be effective 6 months after the date of 
        submission to the Secretary unless the Secretary disapproves 
        such process. In determining whether to approve or disapprove 
        such process, the Secretary shall take into account the 
        effectiveness of such process in enabling students without 
        secondary school diplomas or the recognized equivalent to 
        benefit from the instruction offered by institutions utilizing 
        such process, and shall also take into account the cultural 
        diversity, economic circumstances, and educational preparation 
        of the populations served by the institutions.
    ``(e) Special Rule for Correspondence Courses.--A student shall not 
be eligible to receive a grant under this subpart for a correspondence 
course unless such course is part of a program leading to an associate, 
bachelor, or graduate degree.
    ``(f) Courses Offered Through Telecommunications.--
            ``(1) Relation to correspondence courses.--A student 
        enrolled in a course of instruction at an eligible institution 
        (other than an institute or school that meets the definition of 
        eligible institution under section 3 of the Carl D. Perkins 
        Vocational and Technical Education Act (20 U.S.C. 2302)) that 
        is offered in whole or in part through telecommunications and 
        leads to a recognized associate, bachelor, or graduate degree 
        conferred by such institution shall not be considered to be 
        enrolled in correspondence courses unless the total amount of 
        telecommunications and correspondence courses at such 
        institution equals or exceeds 50 percent of such courses.
            ``(2) Restriction or reductions of financial aid.--A 
        student's eligibility to receive a grant under this subpart may 
        be reduced if a financial aid officer determines under the 
        discretionary authority provided in section 479A that 
        telecommunications instruction results in a substantially 
        reduced cost of attendance to such student.
            ``(3) Definition.--For the purposes of this subsection, the 
        term `telecommunications' means the use of television, audio, 
        or computer transmission, including open broadcast, closed 
        circuit, cable, microwave, or satellite, audio conferencing, 
        computer conferencing, or video cassettes or discs, except that 
        such term does not include a course that is delivered using 
        video cassette or disc recordings at such institution and that 
        is not delivered in person to other students of that 
        institution.
    (g) Study Abroad.--Nothing in this subpart shall be construed to 
limit or otherwise prohibit access to study abroad programs approved by 
the home institution at which a student is enrolled. An otherwise 
eligible student who is engaged in a program of study abroad approved 
for academic credit by the home institution at which the student is 
enrolled shall be eligible to receive a grant under this subpart, 
without regard to whether such study abroad program is required as part 
of the student's degree program.
    ``(h) Verification of Social Security Number.--The Secretary, in 
cooperation with the Commissioner of Social Security, shall verify any 
social security number provided by a student to an eligible institution 
under subsection (a)(5)(B) and shall enforce the following conditions:
            ``(1) Pending verification.--Except as provided in 
        paragraphs (2) and (3), an institution shall not deny, reduce, 
        delay, or terminate a student's eligibility for assistance 
        under this subpart because social security number verification 
        is pending.
            ``(2) Denial or termination.--If there is a determination 
        by the Secretary that the social security number provided to an 
        eligible institution by a student is incorrect, the institution 
        shall deny or terminate the student's eligibility for any grant 
        under this subpart until such time as the student provides 
        documented evidence of a social security number that is 
        determined by the institution to be correct.
            ``(3) Construction.--Nothing in this subsection shall be 
        construed to permit the Secretary to take any compliance, 
        disallowance, penalty, or other regulatory action against--
                    ``(A) any institution of higher education with 
                respect to any error in a social security number, 
                unless such error was a result of fraud on the part of 
                the institution; or
                    ``(B) any student with respect to any error in a 
                social security number, unless such error was a result 
                of fraud on the part of the student.''.

         TITLE V--TOBACCO COMMUNITY ECONOMIC DEVELOPMENT GRANTS

SEC. 501. TOBACCO COMMUNITY ECONOMIC DEVELOPMENT GRANTS.

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

``SEC. 380K. TOBACCO COMMUNITY ECONOMIC DEVELOPMENT GRANTS.

    ``(a) In General.--The Secretary shall make grants to tobacco-
growing States in accordance with this section to enable the States to 
carry out economic development initiatives in tobacco-growing 
communities.
    ``(b) Application.--To be eligible to receive payments under this 
section, a State shall prepare and submit to the Secretary an 
application at such time, in such manner, and containing such 
information as the Secretary may require, including--
            ``(1) a description of the activities that the State will 
        carry out using amounts received under the grant;
            ``(2) a designation of an appropriate State agency to 
        administer amounts received under the grant; and
            ``(3) a description of the steps to be taken to ensure that 
        the funds are distributed in accordance with subsection (e).
    ``(c) Amount of Grant.--
            ``(1) In general.--From the amounts available to carry out 
        this section for a fiscal year, the Secretary shall allot to 
        each State an amount that bears the same ratio to the amounts 
        available as--
                    ``(A) the average income of the State derived from 
                the production of tobacco during the 1997 through 1999 
                marketing years (as determined under paragraph (2)); 
                bears to
                    ``(B) the average income of all States derived from 
                the production of tobacco during the 1997 through 1999 
                marketing years.
            ``(2) Tobacco income.--For the 1997 through 1999 marketing 
        years, the Secretary shall determine the amount of income 
        derived from the production of tobacco in each State and in all 
        States.
    ``(d) Payments.--
            ``(1) In general.--A State that has an application approved 
        by the Secretary under subsection (b) shall be entitled to a 
        payment under this section in an amount that is equal to its 
        allotment under subsection (c).
            ``(2) Form of payments.--The Secretary may make payments 
        under this section to a State in installments, and in advance 
        or by way of reimbursement, with necessary adjustments on 
        account of overpayments or underpayments, as the Secretary may 
        determine.
            ``(3) Reallotments.--Any portion of the allotment of a 
        State under subsection (c) that the Secretary determines will 
        not be used to carry out this section in accordance with an 
        approved State application required under subsection (b) shall 
        be reallotted by the Secretary to other States in proportion to 
        the original allotments to the other States.
    ``(e) Use and Distribution of Funds.--
            ``(1) In general.--Amounts received by a State under this 
        section shall be used to carry out economic development 
        activities, including--
                    ``(A) rural business enterprise activities 
                described in subsections (c) and (e) of section 310B of 
                the Consolidated Farm and Rural Development Act (7 
                U.S.C. 1932);
                    ``(B) down payment loan assistance programs that 
                are similar to the program described in section 310E of 
                the Consolidated Farm and Rural Development Act (7 
                U.S.C. 1935);
                    ``(C) activities designed to help create productive 
                farm or off-farm employment in rural areas to provide a 
                more viable economic base and enhance opportunities for 
                improved incomes, living standards, and contributions 
                by rural individuals to the economic and social 
                development of tobacco communities;
                    ``(D) activities that expand existing 
                infrastructure, facilities, and services to capitalize 
                on opportunities to diversify economies in tobacco 
                communities and that support the development of new 
                industries or commercial ventures;
                    ``(E) activities by agricultural organizations that 
                provide assistance directly to active growers to assist 
                in developing other agricultural activities that 
                supplement tobacco-producing activities;
                    ``(F) initiatives designed to create or expand 
                locally owned value-added processing and marketing 
                operations in tobacco communities; and
                    ``(G) technical assistance activities by persons to 
                support farmer-owned enterprises, or agriculture-based 
                rural development enterprises, of the type described in 
                section 252 or 253 of the Trade Act of 1974 (19 U.S.C. 
                2342, 2343).
            ``(2) Tobacco-growing counties.--Assistance may be provided 
        by a State under this section only to assist a county in the 
        State that has been determined by the Secretary to have in 
        excess of $100,000 in income derived from the production of 
        tobacco during 1 or more of the 1997 through 1999 marketing 
        years.
            ``(3) Distribution.--
                    ``(A) Economic development activities.--Not less 
                than 20 percent of the amounts received by a State 
                under this section shall be used to carry out--
                            ``(i) economic development activities 
                        described in subparagraph (E) or (F) of 
                        paragraph (1); or
                            ``(ii) agriculture-based rural development 
                        activities described in paragraph (1)(G).
                    ``(B) Technical assistance activities.--Not less 
                than 4 percent of the amounts received by a State under 
                this section shall be used to carry out technical 
                assistance activities described in paragraph (1)(G).
                    ``(C) Tobacco-growing counties.--To be eligible to 
                receive payments under this section, a State shall 
                demonstrate to the Secretary that funding will be 
                provided, during each 5-year period for which funding 
                is provided under this section, for activities in each 
                county in the State that has been determined under 
                paragraph (2) to have in excess of $100,000 in income 
                derived from the production of tobacco, in amounts that 
                are at least equal to the product obtained by 
                multiplying--
                            ``(i) the ratio that the tobacco production 
                        income in the county determined under paragraph 
                        (2) bears to the total tobacco production 
                        income for the State determined under 
                        subsection (c); by
                            ``(ii) 50 percent of the total amounts 
                        received by a State under this section during 
                        the 5-year period.
    ``(f) Preferences in Hiring.--A State may require recipients of 
funds under this section to provide a preference in employment to--
            ``(1) an individual who--
                    ``(A) during the 2002 calendar year, was employed 
                in the manufacture, processing, or warehousing of 
                tobacco or tobacco products, or resided, in a county 
                described in subsection (e)(2); and
                    ``(B) is eligible for assistance under the tobacco 
                worker transition program established under section 401 
                of the Tobacco-Dependent Communities Assistance Act of 
                2002; or
            ``(2) an individual who--
                    ``(A) during the 2002 marketing year, carried out 
                tobacco quota or relevant tobacco production activities 
                in a county described in subsection (e)(2);
                    ``(B) is eligible for a farmer opportunity grant 
                under subpart 9 of part A of title IV of the Higher 
                Education Act of 1965; and
                    ``(C) has successfully completed a course of study 
                at an institution of higher education.''.

                           TITLE VI--IMMUNITY

SEC. 601. GENERAL IMMUNITY FOR TOBACCO PRODUCERS AND WAREHOUSERS.

    (a) In General.--Notwithstanding any other provision of this Act, 
an active tobacco producer, tobacco-related growers association, or 
tobacco warehouse owner or employee may not be subject to liability in 
any Federal or State court for any cause of action resulting from the 
failure of any tobacco product manufacturer, distributor, or retailer 
to comply with national tobacco settlement legislation.
    (b) FDA Entry Onto Farms.--An officer or employee of the Food and 
Drug Administration shall not have any authority to enter onto a farm 
owned by a producer of leaf tobacco without the written consent of the 
producer.

                       TITLE VII--ADMINISTRATION

SEC. 701. 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>