[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 3004 Introduced in Senate (IS)]







107th CONGRESS
  2d Session
                                S. 3004

 To eliminate the Federal quota and price support programs for certain 
tobacco, to compensate quota owners and holders for the loss of tobacco 
   quota asset value, to establish a tobacco community reinvestment 
                    program, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 25, 2002

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

_______________________________________________________________________

                                 A BILL


 
 To eliminate the Federal quota and price support programs for certain 
tobacco, to compensate quota owners and holders for the loss of tobacco 
   quota asset value, to establish a tobacco community reinvestment 
                    program, 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 ``Rural Community 
Revitalization and Transition Act''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
                  TITLE I--TOBACCO TRANSITION PAYMENTS

Sec. 101. Tobacco transition payments.
          ``Subtitle E--Tobacco Community Reinvestment Program

        ``Sec. 380a. Definitions.
                ``Chapter 1--Tobacco Transition Payments

        ``Sec. 380d. Tobacco transition payments.
        ``Sec. 380e. Tobacco Farmer Trust Fund.
Sec. 102. Sense of Congress on treatment of payments.
            TITLE II--TOBACCO INVESTMENT PROTECTION PAYMENTS

Sec. 201. Tobacco investment protection payments.
          ``Chapter 2--Tobacco Investment Protection Payments

        ``Sec. 380h. Historic quota production.
        ``Sec. 380i. Tobacco investment protection payments for Flue-
                            cured tobacco.
        ``Sec. 380j. Tobacco investment protection payments for Burley 
                            and other kinds of tobacco.
        ``Sec. 380k. Assessments.
                       TITLE III--ADMINISTRATION

Sec. 301. Administration.
                      ``Chapter 3--Administration

        ``Sec. 380m. Center for Agricultural Innovation.
        ``Sec. 380n. Tobacco Advisory Board.
     TITLE IV--TERMINATION OF MARKETING QUOTAS FOR CERTAIN TOBACCO

Sec. 401. Definitions.
Sec. 402. National marketing quota.
Sec. 403. Apportionment of national marketing quota.
Sec. 404. Burley tobacco acreage allotments.
Sec. 405. Lease and transfer of acreage allotments.
Sec. 406. Mandatory sale of Flue-cured tobacco acreage allotments and 
                            marketing quotas.
Sec. 407. Mandatory sale of Burley tobacco acreage allotments and 
                            marketing quotas.
Sec. 408. Acreage--poundage quotas.
Sec. 409. Sale or lease of acreage allotments.
Sec. 410. Farm poundage quotas for certain kinds of tobacco.
Sec. 411. Improved tobacco field measurement.
                        TITLE V--ADMINISTRATION

Sec. 501. Marketing years.

                  TITLE I--TOBACCO TRANSITION PAYMENTS

SEC. 101. TOBACCO TRANSITION PAYMENTS.

    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 Community Reinvestment Program

``SEC. 380A. DEFINITIONS.

    ``In this subtitle:
            ``(1) Active grower.--The term `active grower' means a 
        person that (as determined by a county committee)--
                    ``(A) is at risk for a crop of covered tobacco;
                    ``(B) is determined to be actively engaged in 
                farming (within the meaning of sections 1001 and 1001A 
                of the Food Security Act of 1985 (7 U.S.C. 1308, 1308-
                1)) with respect to the production of a kind of covered 
                tobacco; and
                    ``(C) shared in the risk of producing the 2002 crop 
                of covered tobacco.
            ``(2) Additional production.--The term `additional 
        production' means the quantity of covered tobacco produced on a 
        farm for a marketing year in excess of the quantity for which a 
        tobacco producer may receive a payment under chapter 2.
            ``(3) Center.--The term `Center' means the Center for 
        Agricultural Innovation established under section 380m.
            ``(4) Considered produced.--The terms `considered produced' 
        and `considered to have produced' means any production of 
        covered tobacco that was lost as a result of damaging weather 
        or related condition, as determined by the Secretary.
            ``(5) Covered tobacco.--The term `covered tobacco' means--
                    ``(A) Flue-cured tobacco;
                    ``(B) Burley tobacco;
                    ``(C) Fire-cured tobacco;
                    ``(D) dark air-cured tobacco; and
                    ``(E) Virginia sun-cured tobacco.
            ``(6) Historic quota production.--The term `historic quota 
        production' means the quantity of the average quantity of 
        covered tobacco assigned to a farm by a traditional producer 
        pursuant to section 380h.
            ``(7) New producer.--The term `new producer' means a 
        producer of a kind of covered tobacco that is not a traditional 
        producer.
            ``(8) Nontraditional tobacco county.--The term 
        `nontraditional tobacco county' means a county in the United 
        States that did not have any traditional tobacco farms during 
        any of the 1999 through 2002 marketing years.
            ``(9) Quota.--The term `quota' means a farm marketing quota 
        for covered tobacco established under part I of subtitle B for 
        the marketing year for any of the 2002 or previous crops.
            ``(10) 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.
            ``(11) Tobacco advisory board.--The term `Tobacco Advisory 
        Board' means the Tobacco Advisory Board established by section 
        380n.
            ``(12) Traditional tobacco farm.--The term `traditional 
        tobacco farm' means a farm in the United States that produced, 
        or was considered to have produced, covered tobacco during--
                    ``(A) in the case of Flue-cured tobacco, any or all 
                of the 1999 through 2002 marketing years; and
                    ``(B) in the case of any other kind of covered 
                tobacco, the 2001 or 2002 marketing year.
            ``(13) Traditional producer.--The term `traditional 
        producer' means a producer on a farm in the United States that 
        produced, or considered to have produced, covered tobacco 
        during--
                    ``(A) in the case of Flue-cured tobacco, any or all 
                of the 1999 through 2002 marketing years; and
                    ``(B) in the case of any other kind of covered 
                tobacco, the 2001 or 2002 marketing year.

                ``CHAPTER 1--TOBACCO TRANSITION PAYMENTS

``SEC. 380D. TOBACCO TRANSITION PAYMENTS.

    ``(a) In General.--The Secretary shall make payments to quota 
owners and active growers of covered tobacco in accordance with this 
section.
    ``(b) Eligibility.--
            ``(1) In general.--Effective beginning with the 2003 crop 
        year, each quota owner and active grower of record of covered 
        tobacco shall be eligible to receive payments under this 
        section.
            ``(2) 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.
            ``(3) Application.--To be eligible to receive compensation 
        under this section, any quota owner or active grower shall 
        prepare and submit to the Secretary an application for 
        compensation in such form and at such time as the Secretary 
        shall prescribe.
            ``(4) 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.--
                    ``(A) In general.--Subject to paragraphs (3) and 
                (4), the amount of a payment made under this section to 
                a quota owner shall be equal to the amount obtained by 
                multiplying--
                            ``(i) the payment quantity determined under 
                        subparagraph (B); by
                            ``(ii) $8 per pound.
                    ``(B) Payment quantity.--The payment quantity for a 
                payment made under this section to a quota owner shall 
                be equal to the amount obtained by multiplying--
                            ``(i) the base quota for a kind of covered 
                        tobacco for the quota owner for the 2002 
                        marketing year (as of July 1, 2002); by
                            ``(ii) the ratio of--
                                    ``(I) the national quota for the 
                                kind of covered tobacco for the 1998 
                                marketing year (as established under 
                                part I of subtitle B); to
                                    ``(II) the national quota for the 
                                kind of covered tobacco for the 2002 
                                marketing year (as established under 
                                part I of subtitle B).
            ``(2) Active growers.--Subject to paragraphs (3) and (4), 
        the amount of a payment made under this section to an active 
        grower on a farm shall be equal to the amount obtained by 
        multiplying--
                    ``(A) the effective farm marketing quota for the 
                active grower for the 2001 marketing year; by
                    ``(B) $4 per pound.
            ``(3) Quota owner-active growers.--If a person is both a 
        quota owner and an active grower, the person shall be eligible 
        for payments under paragraphs (1) and (2).
            ``(4) 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) Timing of Payments.--Payments under this section shall be 
made to the quota owner or active grower, at the option of the quota 
owner or active grower--
            ``(1) in 1 lump sum payment during calendar year 2003; or
            ``(2) in 5 equal payments over a period of 5 years 
        commencing with calendar year 2003.

``SEC. 380E. TOBACCO FARMER TRUST FUND.

    ``(a) Establishment.--There is established in the Treasury of the 
United States a revolving fund to be used in carrying out section 380d 
(referred to in this section as the `Fund'), consisting of--
            ``(1) such amounts as are appropriated to the Fund under 
        subsection (b); and
            ``(2) any interest earned on investment of amounts in the 
        Fund under subsection (d).
    ``(b) Transfers to Fund.--There are appropriated to the Fund out of 
funds of the Treasury not otherwise appropriated amounts equivalent to 
the taxes received after the date of the enactment of this section in 
the Treasury under chapter 52 of the Internal Revenue Code of 1986 
(relating to cigars, cigarettes, smokeless tobacco, pipe tobacco, and 
cigarette papers and tubes) to the extent such amounts exceed the 
amounts that would have been received under the rates of tax that 
applied for 1999.
    ``(c) Expenditures From Fund.--
            ``(1) In general.--Subject to paragraph (2), on request by 
        the Secretary, the Secretary of the Treasury shall transfer 
        from the Fund to the Secretary such amounts as the Secretary 
        determines are necessary to make payments under section 380d.
            ``(2) Administrative expenses.--An amount not exceeding 10 
        percent of the amounts in the Fund shall be available in each 
        fiscal year to pay the administrative expenses necessary to 
        carry out this section and section 380d.
    ``(d) Investment of Amounts.--
            ``(1) In general.--The Secretary of the Treasury shall 
        invest such portion of the Fund as is not, in the judgment of 
        the Secretary of the Treasury, required to meet current 
        withdrawals. Investments may be made only in interest-bearing 
        obligations of the United States.
            ``(2) Acquisition of obligations.--For the purpose of 
        investments under paragraph (1), obligations may be acquired--
                    ``(A) on original issue at the issue price; or
                    ``(B) by purchase of outstanding obligations at the 
                market price.
            ``(3) Sale of obligations.--Any obligation acquired by the 
        Fund may be sold by the Secretary of the Treasury at the market 
        price.
            ``(4) Credits to fund.--The interest on, and the proceeds 
        from the sale or redemption of, any obligations held in the 
        Fund shall be credited to and form a part of the Fund.
    ``(e) Transfers of Amounts.--
            ``(1) In general.--The amounts required to be transferred 
        to the Fund under this section shall be transferred at least 
        monthly from the general fund of the Treasury to the Fund on 
        the basis of estimates made by the Secretary of the Treasury.
            ``(2) Adjustments.--Proper adjustment shall be made in 
        amounts subsequently transferred to the extent prior estimates 
        were in excess of or less than the amounts required to be 
        transferred.''.

SEC. 102. SENSE OF CONGRESS ON TREATMENT OF PAYMENTS.

    It is the sense of Congress that quota holders and active growers 
should be allowed to receive capital gains treatment under the Internal 
Revenue Code of 1986 for payments received under section 380d of the 
Agricultural Adjustment Act of 1938 (as added by section 101).

            TITLE II--TOBACCO INVESTMENT PROTECTION PAYMENTS

SEC. 201. TOBACCO INVESTMENT PROTECTION PAYMENTS.

    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:

          ``CHAPTER 2--TOBACCO INVESTMENT PROTECTION PAYMENTS

``SEC. 380H. HISTORIC QUOTA PRODUCTION.

    ``(a) Average Quantity of Flue-Cured and Burley Tobacco Produced by 
Traditional Producers.--
            ``(1) In general.--In the case of Flue-cured and Burley 
        tobacco, the Secretary shall determine, for each traditional 
        producer, the average effective quota for each kind of tobacco 
        on each farm on which the traditional producer shared in the 
        risk of producing the kind of tobacco for the 1997 through 1999 
        marketing years.
            ``(2) Proportional shares.--If more than 1 traditional 
        producer shared in the risk of producing the kind of tobacco 
        for a marketing year on a farm, the traditional producers shall 
        receive their proportional share of the quantity of the kind of 
        tobacco planted to the kind of tobacco for harvest on the farm 
        based on the sharing arrangement that was in effect among the 
        producers for the crop.
    ``(b) Historic Quota Production of Fire-Cured, Dark Air-Cured, and 
Virginia Sun-Cured Tobacco.--In the case of Fire-cured, dark air-cured, 
and Virginia sun-cured tobacco, the Secretary shall determine, for each 
traditional producer, the historic quota production for each kind of 
tobacco on each farm on which the traditional producer shared in the 
risk of producing the kind of tobacco by multiplying--
            ``(1) the average effective acreage allotment for the kind 
        of tobacco for the 1999 through 2001 marketing years;
            ``(2)(A) in the case of Fire-cured tobacco, 2,600 pounds 
        per acre; and
            ``(B) in the case of dark air-cured tobacco and Virginia 
        sun-cured tobacco, 2,500 pounds per acre; by
            ``(3) 1.75.
    ``(c) Assignment of Quantity to Farms.--
            ``(1) In general.--At the beginning of each crop year, the 
        Secretary shall give each producer an opportunity to assign the 
        quantity of covered tobacco determined under subsection (a) or 
        (b) for each farm of the producer to that farm or another farm 
        in the same State or a contiguous State.
            ``(2) Limitation on acreage assignment.--Notwithstanding 
        paragraph (1), the quantity of covered tobacco determined under 
        subsection (a) or (b) for a farm may not be assigned by a 
        producer to a farm in a nontraditional tobacco county.
            ``(3) Assignment to farms.--Subject to paragraph (2), the 
        Secretary may not limit the quantity of covered tobacco 
        determined under subsection (a) or (b) that may be assigned to 
        a farm.
            ``(4) Permanent transfers.--
                    ``(A) In general.--A producer may permanently 
                transfer all or part of the quantity of tobacco 
                assigned to a farm to, at the option of the producer--
                            ``(i) other tobacco producers designated by 
                        the tobacco producer; or
                            ``(ii) the applicable county-State pool for 
                        redistribution to other tobacco producers that 
                        own or operate tobacco farms located in the 
                        State.
                    ``(B) New producers.--In redistributing historic 
                quota production of Flue-cured tobacco from the county-
                State pool under subparagraph (A)(ii), the Secretary 
                shall give priority to new producers, taking into 
                consideration the productivity of the land.
            ``(5) Temporary transfers.--If a producer leases or 
        temporarily transfers a quantity of tobacco assigned to a farm 
        to another producer, the quantity of tobacco leased or 
        transferred shall be returned to the county-State pool 
        described in paragraph (5)(A)(ii).
    ``(d) Treatment of Conservation Reserve Contract Acreage.--
            ``(1) In general.--The Secretary shall provide for an 
        adjustment, as appropriate, in the historic quota production 
        for a farm whenever either of the following circumstances 
        occur:
                    ``(A) A conservation reserve contract entered into 
                under section 1231 of the Food Security Act of 1985 (16 
                U.S.C. 3831) with respect to the farm expires or is 
                voluntarily terminated.
                    ``(B) Cropland is released from coverage under a 
                conservation reserve contract by the Secretary.
            ``(2) Special payment rules.--For the marketing year in 
        which an adjustment under paragraph (1) is first made, the 
        traditional producer of the farm shall elect to receive either 
        a payment under this chapter with respect to the acreage added 
        to the farm under this subsection or a prorated payment under 
        the conservation reserve contract, but not both.
    ``(e) Nonproduction of Covered Tobacco.--If at least 75 percent of 
the historic quota production of a kind of covered tobacco in a county 
in a State that is not produced or considered produced to the kind of 
covered tobacco during at least 2 of every 3 crop years, the quantity 
of the historic quota production of the kind of covered tobacco that is 
not produced or considered produced shall be transferred to the county-
State pool for redistribution in accordance with section 380i(b)(3) or 
380j(b)(3), as appropriate.
    ``(f) Historic Quota Production Adjustment.--Not later than end of 
the 2008 marketing year, and each 5 marketing years thereafter, the 
Secretary shall--
            ``(1) examine the total historic quota production pounds of 
        each kind of covered tobacco nationally; and
            ``(2) make pro rata adjustments to the historic quota 
        production pounds on all farms to reflect increases or 
        decreases in the demand for the kind of covered tobacco.

``SEC. 380I. TOBACCO INVESTMENT PROTECTION PAYMENTS FOR FLUE-CURED 
              TOBACCO.

    ``(a) Counter-Cyclical Payments (TIPP 1).--
            ``(1) In general.--The Secretary shall make available to 
        each tobacco producer for each of the 2003 and subsequent 
        marketing years for Flue-cured tobacco a payment in an amount 
        computed by multiplying--
                    ``(A) the payment rate determined under paragraph 
                (2); by
                    ``(B) the payment quantity determined under 
                paragraph (3).
            ``(2) Payment rate.--
                    ``(A) In general.--The payment rate for each of the 
                2003 and subsequent marketing years for Flue-cured 
                tobacco under this subsection shall be the amount by 
                which--
                            ``(i) the investment protection price for 
                        Flue-cured tobacco for the marketing year 
                        determined under subparagraph (B); exceeds
                            ``(ii) the payment rate paid by a purchaser 
                        for the Flue-cured tobacco.
                    ``(B) Investment protection price.--
                            ``(i) In general.--The investment 
                        protection price for Flue-cured tobacco under 
                        this subsection shall be established by the 
                        Secretary, and adjusted annually, to reflect 
                        the costs of production for producers of Flue-
                        cured tobacco (on a per pound basis), other 
                        than--
                                    ``(I) the cost of marketing Flue-
                                cured tobacco; and
                                    ``(II) the cost of leasing quota 
                                for Flue-cured tobacco.
                            ``(ii) Determination.--To determine the 
                        cost of production of Flue-cured tobacco in the 
                        United States, the Secretary shall use--
                                    ``(I) the information collection 
                                and survey resources of the Economic 
                                Research Service and National 
                                Agricultural Statistics Service of the 
                                Department of Agriculture; and
                                    ``(II) the most recent data 
                                available.
                            ``(iii) Reevaluation.--The Secretary, 
                        acting through the Economic Research Service, 
                        shall--
                                    ``(I) annually reevaluate the cost 
                                of production of Flue-cured tobacco, 
                                based on the survey of factors used by 
                                the Secretary; and
                                    ``(II) once every 5 years, conduct 
                                the survey.
                            ``(iv) Consultation.--In determining the 
                        costs of production of Flue-cured tobacco, the 
                        Secretary shall consult with--
                                    ``(I) farm organizations;
                                    ``(II) producer cooperatives and 
                                associations;
                                    ``(III) colleges and universities 
                                in tobacco-producing States; and
                                    ``(IV) other interested persons.
                            ``(v) Discounts.--In the case of Flue-cured 
                        tobacco that is graded less than the standard 
                        commercial grade for Flue-cured tobacco 
                        established by the Secretary, the Secretary 
                        shall reduce the investment protection price 
for Flue-cured tobacco to reflect the lower quality of the tobacco.
            ``(3) Payment quantity.--
                    ``(A) In general.--Subject to subparagraphs (B) 
                through (D), a tobacco producer shall be eligible for a 
                payment under this subsection for any quantity of Flue-
                cured tobacco marketed by the producer.
                    ``(B) Ineligible production.--A tobacco producer 
                shall be ineligible for any payment under this 
                subsection for a marketing year with respect to--
                            ``(i) any Flue-cured tobacco that is 
                        produced in a nontraditional tobacco county;
                            ``(ii) any additional production of Flue-
                        cured tobacco during the marketing year; or
                            ``(iii) any pounds of Flue-cured tobacco 
                        that are marketed by the tobacco producer at a 
                        grade that is--
                                    ``(I) below the minimum commercial 
                                grade for Flue-cured tobacco 
                                established by the Secretary; and
                                    ``(II) in the case of Flue-cured 
                                tobacco marketed under a contract, 
                                below the minimum grade established by 
                                the contract.
                    ``(C) Disasters.--If a tobacco producer assigns 
                historic quota production of Flue-cured tobacco for a 
                marketing year to a farm in a county and the county 
                receives an emergency disaster designation by the 
                President or the Secretary for the marketing year, the 
                Secretary may increase the payment quantity for a 
                payment made under this subsection to the tobacco 
                producer for the marketing year to reflect the loss of 
                production of Flue-cured tobacco.
                    ``(D) Market conditions.--The Secretary may reduce 
                the payment quantity for payments made to tobacco 
                producers under this subsection to reflect the supply 
                and demand conditions for Flue-cured tobacco.
    ``(b) Direct Payments (TIPP 2).--
            ``(1) In general.--The Secretary shall make available to 
        each producer of Flue-cured tobacco a payment in an amount 
        computed by multiplying--
                    ``(A) 35 cents per pound; by
                    ``(B) the historic quota production of Flue-cured 
                tobacco assigned to a farm by the producer for the 2003 
                marketing year pursuant to section 380h.
            ``(2) Eligibility.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), a tobacco producer shall be eligible 
                for a payment for a marketing year under this 
                subsection only if the tobacco producer produces, or is 
                considered to have produced, at least 75 percent of the 
                historic quota production of Flue-cured tobacco 
                assigned to a farm by the producer pursuant to section 
                380h that is eligible for a counter-cyclical payment 
                under subsection (a).
                    ``(B) Producers that discontinue production of 
                flue-cured tobacco.--Subparagraph (A) shall not apply 
                to a tobacco producer that elects to discontinue 
                production of Flue-cured tobacco.
                    ``(C) Duration.--
                            ``(i) In general.--Except as provided in 
                        clause (ii)(I), payments under this subsection 
                        shall be made for each of the 2003 and 
                        subsequent marketing years for Flue-cured 
                        tobacco.
                            ``(ii) Exception.--If a producer 
                        permanently transfers historic quota production 
                        to another producer during any of the 2003 
                        through 2009 marketing years for Flue-cured 
                        tobacco, the producer may--
                                    ``(I) continue to receive payments 
                                under this subsection through the 2009 
                                marketing year for Flue-cured tobacco; 
                                or
                                    ``(II) transfer the right to 
                                receive payments under this subsection 
                                to the producer to which the historic 
                                quota production is transferred, who 
                                shall be eligible for payments in 
                                accordance with clause (i).
                    ``(D) Death of tobacco producer.--If a tobacco 
                producer who is entitled to receive payments under this 
                subsection 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.
            ``(3) Purchase of surplus tobacco.--
                    ``(A) In general.--Subject to subparagraphs (B) and 
                (C), not later than the end of each marketing year, the 
                Commodity Credit Corporation shall offer to purchase 
                from each traditional producer, at the investment 
                protection price determined under subsection (a)(2)(B), 
                any remaining stocks of Flue-cured tobacco that are 
                produced by the producer from the historic quota 
                production of the producer.
                    ``(B) Maximum quantity purchased with 
                assessments.--Subject to subparagraph (C), the maximum 
                quantity of Flue-cured tobacco for a marketing year 
                that may be purchased with assessments collected under 
                section 380k shall not exceed a quantity determined by 
                the Secretary.
                    ``(C) Additional purchases.--
                            ``(i) In general.--If the Secretary 
                        determines that the assessments collected 
                        pursuant to section 380k are not sufficient to 
                        purchase the quantity of tobacco required to be 
                        purchased under subparagraph (A), the Secretary 
                        may authorize the Commodity Credit Corporation 
                        to purchase the additional quantity of tobacco 
required to be purchased.
                            ``(ii) Repayments.--Any funds of the 
                        Commodity Credit Corporation used to carry out 
                        clause (i) shall be repaid with assessments 
                        collected pursuant to section 380k.
                    ``(D) Proceeds of sale of purchased tobacco.--Any 
                amounts realized from the sale of tobacco purchased 
                under this paragraph shall be used in accordance with 
                section 380k.
    ``(c) Records.--The Secretary and the Commodity Credit Corporation 
may require persons to provide such records relating to the marketing 
and purchase of Flue-cured tobacco as are necessary to carry out this 
section.
    ``(d) Production in Nontraditional Counties.--Any tobacco producer 
that plants Flue-cured tobacco in a nontraditional county during a 
marketing year shall be--
            ``(1) ineligible, as to any commodity produced during the 
        marketing year on any farm in which the producer has an 
        interest, for--
                    ``(A) any payment under this section; or
                    ``(B) any payment or loan described in section 
                1211(a) of the Food Security Act of 1985 (16 U.S.C. 
                3811(a)); and
            ``(2) subject to a fine assessed by the Secretary in an 
        amount determined by the Secretary, in consultation with the 
        Tobacco Advisory Board.

``SEC. 380J. TOBACCO INVESTMENT PROTECTION PAYMENTS FOR BURLEY AND 
              OTHER KINDS OF TOBACCO.

    ``(a) Counter-Cyclical Payments (TIPP 1).--
            ``(1) In general.--The Secretary shall make available to 
        each tobacco producer for each of the 2003 and subsequent 
        marketing years for Burley, dark air-cured, Virginia sun-cured, 
        and Fire-cured tobacco (referred to in this section as `Burley 
        and other kinds of tobacco') a payment in an amount computed by 
        multiplying--
                    ``(A) the payment rate determined under paragraph 
                (2); by
                    ``(B) the payment quantity determined under 
                paragraph (3).
            ``(2) Payment rate.--
                    ``(A) In general.--The payment rate for each of the 
                2003 and subsequent marketing years for Burley and 
                other kinds of tobacco under this subsection shall be 
                the amount by which--
                            ``(i) the investment protection price for 
                        Burley and other kinds of tobacco, 
                        respectively, for the marketing year determined 
                        under subparagraph (B); exceeds
                            ``(ii) the payment rate paid by a purchaser 
                        for the Burley and other kinds of tobacco, 
                        respectively.
                    ``(B) Investment protection price.--
                            ``(i) In general.--The investment 
                        protection price for Burley and other kinds of 
                        tobacco under this subsection shall be 
                        established by the Secretary, and adjusted 
                        annually, to reflect the costs of production 
                        for producers of Burley and other kinds of 
                        tobacco (on a per pound basis), respectively, 
                        other than--
                                    ``(I) the cost of marketing Burley 
                                and other kinds of tobacco, 
                                respectively; and
                                    ``(II) the cost of leasing quota 
                                for Burley and other kinds of tobacco, 
                                respectively.
                            ``(ii) Determination.--To determine the 
                        cost of production of Burley and other kinds of 
                        tobacco in the United States, the Secretary 
                        shall use--
                                    ``(I) the information collection 
                                and survey resources of the Economic 
                                Research Service and National 
                                Agricultural Statistics Service of the 
                                Department of Agriculture; and
                                    ``(II) the most recent data 
                                available.
                            ``(iii) Reevaluation.--The Secretary, 
                        acting through the Economic Research Service, 
                        shall--
                                    ``(I) annually reevaluate the cost 
                                of production of Burley and other kinds 
                                of tobacco, based on the survey of 
                                factors used by the Secretary; and
                                    ``(II) once every 5 years, conduct 
                                the survey.
                            ``(iv) Consultation.--In determining the 
                        costs of production of Burley and other kinds 
                        of tobacco, the Secretary shall consult with--
                                    ``(I) farm organizations;
                                    ``(II) producer cooperatives and 
                                associations;
                                    ``(III) colleges and universities 
                                in tobacco-producing States; and
                                    ``(IV) other interested persons.
                            ``(v) Discounts.--In the case of Burley and 
                        other kinds of tobacco that is graded less than 
                        the standard commercial grade for Burley and 
                        other kinds of tobacco, respectively, 
                        established by the Secretary, the Secretary 
                        shall reduce the investment protection price 
                        for Burley and other kinds of tobacco, 
                        respectively, to reflect the lower quality of 
                        the tobacco.
            ``(3) Payment quantity.--
                    ``(A) In general.--Subject to subparagraphs (B) 
                through (D), a tobacco producer shall be eligible for a 
                payment under this subsection for any quantity of 
                Burley and other kinds of tobacco marketed by the 
                producer.
                    ``(B) Ineligible production.--A tobacco producer 
                shall be ineligible for any payment under this 
                subsection for a marketing year with respect to--
                            ``(i) any Burley and other kinds of tobacco 
                        that is produced in a nontraditional tobacco 
                        county;
                            ``(ii) any additional production of Burley 
                        and other kinds of tobacco during the marketing 
                        year; or
                            ``(iii) any pounds of Burley and other 
                        kinds of tobacco that are marketed by the 
                        tobacco producer at a grade that is--
                                    ``(I) below the minimum commercial 
                                grade for Burley and other kinds of 
                                tobacco, respectively, established by 
                                the Secretary; and
                                    ``(II) in the case of Burley and 
                                other kinds of tobacco marketed under a 
                                contract, below the minimum grade 
                                established by the contract.
                    ``(C) Disasters.--If a tobacco producer assigns 
                historic quota production of Burley and other kinds of 
                tobacco for a marketing year to a farm in a county and 
                the county receives an emergency disaster designation 
                by the President or the Secretary for the marketing 
                year, the Secretary may increase the payment quantity 
                for a payment made under this subsection to the tobacco 
                producer for the marketing year to reflect the loss of 
                production of Burley and other kinds of tobacco, 
                respectively.
                    ``(D) Market conditions.--The Secretary may reduce 
                the payment quantity for payments made to tobacco 
                producers under this subsection to reflect the supply 
                and demand conditions for Burley and other kinds of 
                tobacco.
    ``(b) Direct Payments (TIPP 2).--
            ``(1) In general.--The Secretary shall make available to 
        each producer of Burley and other kinds of tobacco a payment in 
        an amount computed by multiplying--
                    ``(A) 35 cents per pound; by
                    ``(B) the historic quota production of Burley and 
                other kinds of tobacco, respectively, assigned to a 
                farm by the producer for the 2003 marketing year 
                pursuant to section 380h.
            ``(2) Eligibility.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), a tobacco producer shall be eligible 
                for a payment for a marketing year under this 
                subsection only if the tobacco producer produces, or is 
                considered to have produced, at least 75 percent of the 
                historic quota production of Burley and other kinds of 
                tobacco, respectively, assigned to a farm by the 
                producer pursuant to section 380h that is eligible for 
                a counter-cyclical payment under subsection (a).
                    ``(B) Producers that discontinue production of 
                burley and other kinds of tobacco.--Subparagraph (A) 
                shall not apply to a tobacco producer that elects to 
                discontinue production of Burley and other kinds of 
                tobacco, respectively.
                    ``(C) Duration.--
                            ``(i) In general.--Except as provided in 
                        clause (ii)(I), payments under this subsection 
                        shall be made for each of the 2003 and 
                        subsequent marketing years for Burley and other 
                        kinds of tobacco.
                            ``(ii) Exception.--If a producer 
                        permanently transfers historic quota production 
                        to another producer during any of the 2003 
                        through 2009 marketing years for Burley and 
                        other kinds of tobacco, the producer may--
                                    ``(I) continue to receive payments 
                                under this subsection through the 2009 
                                marketing year for Burley and other 
                                kinds of tobacco; or
                                    ``(II) transfer the right to 
                                receive payments under this subsection 
                                to the producer to which the historic 
                                quota production is transferred, who 
                                shall be eligible for payments in 
                                accordance with clause (i).
                    ``(D) Death of tobacco producer.--If a tobacco 
                producer who is entitled to receive payments under this 
                subsection 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.
            ``(3) Purchase of surplus tobacco.--
                    ``(A) In general.--Subject to subparagraphs (B) and 
                (C), not later than the end of each marketing year, the 
                Commodity Credit Corporation shall offer to purchase 
                from each traditional producer, at the investment 
                protection price determined under subsection (a)(2)(B), 
any remaining stocks of Burley and other kinds of tobacco that are 
produced by the producer from the historic quota production of the 
producer.
                    ``(B) Maximum quantity purchased with 
                assessments.--Subject to subparagraph (C), the maximum 
                quantity of Burley and other kinds of tobacco for a 
                marketing year that may be purchased with assessments 
                collected under section 380k shall not exceed a 
                quantity determined by the Secretary.
                    ``(C) Additional purchases.--
                            ``(i) In general.--If the Secretary 
                        determines that the assessments collected 
                        pursuant to section 380k are not sufficient to 
                        purchase the quantity of tobacco required to be 
                        purchased under subparagraph (A), the Secretary 
                        may authorize the Commodity Credit Corporation 
                        to purchase the additional quantity of tobacco 
                        required to be purchased.
                            ``(ii) Repayments.--Any funds of the 
                        Commodity Credit Corporation used to carry out 
                        clause (i) shall be repaid with assessments 
                        collected pursuant to section 380k.
                    ``(D) Proceeds of sale of purchased tobacco.--Any 
                amounts realized from the sale of tobacco purchased 
                under this paragraph shall be used in accordance with 
                section 380k.
    ``(c) Records.--The Secretary and the Commodity Credit Corporation 
may require persons to provide such records relating to the marketing 
and purchase of Burley and other kinds of tobacco as are necessary to 
carry out this section.
    ``(d) Additional Production and Production in Nontraditional 
Counties.--Any tobacco producer that markets any additional production 
of Burley and other kinds of tobacco, or plants Burley and other kinds 
of tobacco in a nontraditional county, during a marketing year shall 
be--
            ``(1) ineligible, as to any commodity marketed during the 
        marketing year on any farm in which the producer has an 
        interest, for--
                    ``(A) any payment under this section; or
                    ``(B) any payment or loan described in section 
                1211(a) of the Food Security Act of 1985 (16 U.S.C. 
                3811(a)); and
            ``(2) subject to a fine assessed by the Secretary in an 
        amount determined by the Secretary, in consultation with the 
        Tobacco Advisory Board.

``SEC. 380K. ASSESSMENTS.

    ``(a) Assessment on Sellers, Producers, and Purchasers.--
            ``(1) In general.--Effective for the 2003 and subsequent 
        marketing years for each kind of covered tobacco, subject to 
        paragraph (2), each person that sells in the United States 
        cigarettes or smokeless tobacco produced from covered tobacco, 
        and each producer and purchaser of covered tobacco, shall remit 
        to the Commodity Credit Corporation a nonrefundable marketing 
        assessment in an amount equal to--
                    ``(A) in the case of a person that sells in the 
                United States cigarettes produced (in whole or in part) 
                from covered tobacco, 3 cents for each pack of 
                cigarettes sold, as adjusted by the Secretary to enable 
                the collection of a sufficient amount of funds to carry 
                out this subsection;
                    ``(B) in the case of a person that sells in the 
                United States smokeless tobacco produced (in whole or 
                in part) from covered tobacco, an amount determined by 
                the Secretary that is based on ratio of--
                            ``(i) the amount of excise taxes imposed on 
                        the sale of cigarettes under section 5701(b) of 
                        the Internal Revenue Code of 1986; to
                            ``(ii) the amount of excise taxes imposed 
                        on the sale of smokeless tobacco under section 
                        5701(c) of that Code;
                    ``(C) in the case of a producer of covered tobacco, 
                1 cent for each pound of covered tobacco marketed; and
                    ``(D) in the case of a purchaser of covered 
                tobacco, 1 cent for each pound of covered tobacco 
                purchased.
            ``(2) Rebate.--A domestic manufacturer of cigarettes or 
        smokeless tobacco that purchases covered tobacco produced in 
        the United States and uses the tobacco to produce cigarettes or 
        smokeless sold in the United States shall be entitled to a 
        rebate of any assessment payable under paragraph (1)(D) in an 
        amount equal to 1 cent for each such pound of covered tobacco 
        purchased.
            ``(3) Use.--Assessments collected under this subsection 
        shall be used--
                    ``(A) to make direct payments under sections 
                381i(b) and 381j(b);
                    ``(B) to establish and operate marketing centers 
                for covered tobacco in an amount not to exceed, for 
                each kind of covered tobacco, $1,500,000 for each of 
                the 2003 through 2007 fiscal years;
                    ``(C) to establish and operate the Center for 
                Agricultural Innovation in accordance under section 
                380m;
                    ``(D) to purchase surplus tobacco under sections 
                380i(b)(4) and 380j(b)(4); and
                    ``(E) to repay the Commodity Credit Corporation for 
                the purchase of surplus tobacco under sections 
                380i(b)(4)(C)(ii) and 380j(b)(4)(C)(ii).
            ``(4) No net cost tobacco fund and account.--Any funds that 
        remain in the No Net Cost Tobacco Fund and the No Net Cost 
        Tobacco Account established under sections 106A and 106B of the 
        Agricultural Act of 1949 (7 U.S.C. 1445-1, 1445-2), 
        respectively, after carrying out those sections may be used to 
        make direct payments under sections 381i(b) and 381j(b).
    ``(b) Assessment on Producers for Administrative Costs.--
            ``(1) In general.--Effective for the 2003 and subsequent 
        marketing years for covered tobacco, in addition to the 
        assessments imposed under subsection (a) and subject to 
        paragraph (2), each producer of covered tobacco shall remit to 
        the Commodity Credit Corporation a nonrefundable marketing 
        assessment in an amount determined by the Secretary that, in 
        the aggregate, will cover all administrative expenses incurred 
        by the Secretary and the Corporation in carrying out sections 
        381i(b) and 381j(b).
            ``(2) Limitation.--The amount of the assessment imposed 
        under paragraph (1) shall not exceed 1 cent for each pound of 
        covered tobacco produced.
    ``(c) Assessment on Purchasers for Purchasing at Less Than 
Investment Protection Price.--Effective for the 2003 and subsequent 
marketing years for covered tobacco, each person that purchases a kind 
of covered tobacco (other than tobacco described in section 
380i(a)(3)(B) or 380j(a)(3)(B)) at a price that is less than the 
investment protection price established for the kind of covered tobacco 
under section 380i(a)(2)(B) or 380j(a)(2)(B), as applicable, shall 
remit to the Commodity Credit Corporation a nonrefundable marketing 
assessment in an amount equal to the difference--
            ``(1) the investment protection price for the kind of 
        covered tobacco (including any applicable interest cost 
        incurred by the Commodity Credit Corporation); and
            ``(2) the purchase price for the kind of covered tobacco.
    ``(d) Administration and Enforcement of Assessments.--
            ``(1) Administration.--Assessments this section shall be--
                    ``(A) collected in the same manner as provided for 
                in section 106A(d)(2) or 106B(d)(3) of the Agricultural 
                Act of 1949 (7 U.S.C. 1445-1(d)(2), 1445-2(d)(3)), as 
                applicable; and
                    ``(B) enforced in the same manner as provided in 
                section 106A(h) or 106B(j) of that Act, as applicable.
            ``(2) Enforcement.--The Secretary may enforce provisions of 
        this section relating to assessments in the courts of the 
        United States.''.

                       TITLE III--ADMINISTRATION

SEC. 301. ADMINISTRATION.

    Subtitle E of title III of the Agricultural Adjustment Act of 1938 
(as added by section 201) is amended by adding at the end the 
following:

                      ``CHAPTER 3--ADMINISTRATION

``SEC. 380M. CENTER FOR AGRICULTURAL INNOVATION.

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

``SEC. 380N. TOBACCO ADVISORY BOARD.

    ``(a) Establishment.--There is established, within the Department 
of Agriculture, a Tobacco Advisory Board.
    ``(b) Membership.--
            ``(1) In general.--The Advisory Board shall consist of 13 
        members appointed by the Secretary, including--
                    ``(A) 6 active growers of covered tobacco, 
                including--
                            ``(i) 2 active growers of Flue-cured 
                        tobacco;
                            ``(ii) 2 active growers of Burley-tobacco;
                            ``(iii) 1 active growers of Fire-cured 
                        tobacco; and
                            ``(iv) 1 other active grower of covered 
                        tobacco;
                    ``(B) 6 representatives of the tobacco industry, 
                including--
                            ``(i) 4 domestic manufacturers of 
                        cigarettes produced from covered tobacco;
                            ``(ii) 1 export dealer of products produced 
                        from covered tobacco; and
                            ``(iii) 1 domestic manufacturer of 
                        smokeless tobacco produced from covered 
                        tobacco; and
                    ``(C) the Secretary or the designee of the 
                Secretary, who shall serve as chairperson.
            ``(2) Term.--A member of the Advisory shall serve for a 
        term determined by the Secretary at the time of appointment.
            ``(3) Compensation.--A member of the Advisory Board shall 
        receive no compensation for the service of the member on the 
        Advisory Board, other than reimbursement for per diem and 
        travel-related expenses.
    ``(c) Duties.--The Advisory Board shall advise--
            ``(1) the Secretary on implementation of this subtitle; and
            ``(2) the heads of other Federal agencies on the economic 
        and technical feasibility of actions that the agencies are 
        considering regarding tobacco production and product control.
    ``(d) Agencies.--The Secretary, the Administrator of the 
Environmental Protection Agency, the Commissioner of Food and Drugs, 
the United States Trade Representative, and the heads of other agencies 
with responsibilities related to tobacco production and product control 
shall ensure that mechanisms are in place for the Advisory Board to 
provide its advice and assistance regarding actions described in 
subsection (c).
    ``(e) Federal Advisory Committee Act.--The Federal Advisory 
Committee Act (5 U.S.C. App) shall not apply to the Advisory Board.''.

     TITLE IV--TERMINATION OF MARKETING QUOTAS FOR CERTAIN TOBACCO

SEC. 401. DEFINITIONS.

    (a) In General.--Section 301 of the Agricultural Adjustment Act of 
1938 (7 U.S.C. 1301) is amended--
            (1) in paragraph (14), by striking subparagraphs (C) and 
        (D);
            (2) in paragraph (15), by striking ``Flue-cured tobacco,'' 
        and all that follows through ``Burley tobacco, comprising type 
        31;''; and
            (3) by striking ``demand: Provided further,'' and all that 
        follows through the period at the end and inserting a period.
    (b) 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--
            ``(1) Maryland tobacco;
            ``(2) cigar-filler and cigar-binder tobacco; and
            ``(3) cigar-filler tobacco.''.

SEC. 402. 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. 403. 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. 404. 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. 405. 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, dark air-
                cured, Fire-cured, Virginia sun-cured and''; 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. 406. 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. 407. 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. 408. 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. 409. SALE OR LEASE OF ACREAGE ALLOTMENTS.

    Section 318 of the Agricultural Adjustment Act of 1938 (7 U.S.C. 
1314d) is repealed.

SEC. 410. FARM POUNDAGE QUOTAS FOR CERTAIN KINDS OF TOBACCO.

    (a) In General.--Section 319 of the Agricultural Adjustment Act of 
1938 (7 U.S.C. 1314e) is repealed.
    (b) Conforming Amendment.--Section 378 of the Agricultural 
Adjustment Act of 1938 (7 U.S.C. 1378) is amended by striking 
subsection (f).

SEC. 411. IMPROVED TOBACCO FIELD MEASUREMENT.

    Section 1112(c) of the Omnibus Budget Reconciliation Act of 1987 
(Public Law 100-203; 101 Stat. 1330-8) is amended in the first sentence 
by striking ``cigar and dark-air and fire-cured tobaccos'' and 
inserting ``cigar tobacco''.

                        TITLE V--ADMINISTRATION

SEC. 501. MARKETING YEARS.

    Except as otherwise provided in this Act, this Act and the 
amendments made by this Act apply beginning with the marketing year for 
the 2003 crop of each kind of tobacco.
                                 <all>