[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3160 Introduced in House (IH)]







108th CONGRESS
  1st Session
                                H. R. 3160

To eliminate the Federal quota and price support programs for tobacco, 
    to provide transitional assistance to tobacco quota holders and 
 traditional producers of tobacco affected by the elimination of these 
   programs, to ensure the future quality and availability of United 
  States-grown tobacco, to protect against the disruption of tobacco 
 markets, to establish a trust fund to finance this Act, and for other 
                               purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 24, 2003

Mr. Fletcher (for himself, Mr. McIntyre, Mr. Goode, Mr. Etheridge, Mr. 
 Ballance, Mr. Ballenger, Mr. Barrett of South Carolina, Mr. Bishop of 
  Georgia, Mrs. Blackburn, Mr. Boucher, Mr. Boyd, Mr. Brown of South 
Carolina, Mr. Clyburn, Mr. Collins, Mr. Cooper, Mr. Davis of Tennessee, 
Mr. Tom Davis of Virginia, Mr. DeMint, Mr. Gordon, Mr. Hayes, Mr. Hill, 
    Mr. Kingston, Mr. Lewis of Kentucky, Mr. Lucas of Kentucky, Mr. 
 Marshall, Mr. Miller of North Carolina, Mr. Norwood, Mr. Peterson of 
  Minnesota, Mr. Price of North Carolina, Mr. Rogers of Kentucky, Mr. 
 Scott of Georgia, Mr. Spratt, Mr. Thompson of Mississippi, Mr. Wamp, 
 Mr. Whitfield, Mr. Wilson of South Carolina, Mr. Duncan, Mr. Murtha, 
 and Mr. Isakson) introduced the following bill; which was referred to 
                      the Committee on Agriculture

_______________________________________________________________________

                                 A BILL


 
To eliminate the Federal quota and price support programs for tobacco, 
    to provide transitional assistance to tobacco quota holders and 
 traditional producers of tobacco affected by the elimination of these 
   programs, to ensure the future quality and availability of United 
  States-grown tobacco, to protect against the disruption of tobacco 
 markets, to establish a trust fund to finance this Act, 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 Reduction, 
Accountability, and Community Enhancement Act of 2003''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Termination of tobacco production adjustment programs.
Sec. 3. Termination of tobacco price support program.
Sec. 4. Liability.
Sec. 5. Replacement tobacco assistance programs.
Sec. 6. Regulations.
Sec. 7. Severability.
Sec. 8. Effective date.

SEC. 2. TERMINATION OF TOBACCO PRODUCTION ADJUSTMENT PROGRAMS.

    (a) Tobacco Standards.--The Tobacco Inspection Act (7 U.S.C. 511 et 
seq.) is repealed.
    (b) Tobacco Field Measurement.--Section 1112 of the Omnibus Budget 
Reconciliation Act of 1987 (Public Law 100-203) is amended by striking 
subsection (c).
    (c) Tobacco Inspections.--Section 213 of the Tobacco Adjustment Act 
of 1983 (7 U.S.C. 511r) is repealed.
    (d) Tobacco Control.--The Act of April 25, 1936 (commonly known as 
the Tobacco Control Act; 7 U.S.C. 515 et seq.), is repealed.
    (e) Commodity Handling Orders.--Section 8c(2)(A) of the 
Agricultural Adjustment Act (7 U.S.C. 608c(2)(A)), reenacted with 
amendments by the Agricultural Marketing Agreement Act of 1937, is 
amended by striking ``tobacco,''.
    (f) Processing Tax.--Section 9(b) of the Agricultural Adjustment 
Act (7 U.S.C. 609(b)), reenacted with amendments by the Agricultural 
Marketing Agreement Act of 1937, is amended--
            (1) in paragraph (2), by striking ``tobacco,''; and
            (2) in paragraph (6)(B)(i), by striking ``, or, in the case 
        of tobacco, is less than the fair exchange value by not more 
        than 10 per centum,''.
    (g) Burley Tobacco Import Review.--Section 3 of Public Law 98-59 (7 
U.S.C. 625) is repealed.
    (h) Declaration of Policy.--Section 2 of the Agricultural 
Adjustment Act of 1938 (7 U.S.C. 1282) is amended by striking 
``tobacco,''.
    (i) Definitions.--Section 301(b) of the Agricultural Adjustment Act 
of 1938 (7 U.S.C. 1301(b)) is amended--
            (1) in paragraph (3)--
                    (A) by striking subparagraph (C); and
                    (B) by redesignating subparagraph (D) as 
                subparagraph (C);
            (2) in paragraph (6)(A), by striking ``tobacco,'';
            (3) in paragraph (10)--
                    (A) by striking subparagraph (B); and
                    (B) by redesignating subparagraph (C) as 
                subparagraph (B);
            (4) in paragraph (11)(B), by striking ``and tobacco'';
            (5) in paragraph (12), by striking ``tobacco,'';
            (6) in paragraph (14)--
                    (A) in subparagraph (A), by striking ``(A)''; and
                    (B) by striking subparagraphs (B), (C), and (D);
            (7) by striking paragraph (15);
            (8) in paragraph (16)--
                    (A) by striking subparagraph (B); and
                    (B) by redesignating subparagraph (C) as 
                subparagraph (B);
            (9) by striking paragraph (17); and
            (10) by redesignating paragraph (16) as paragraph (15).
    (j) Parity Payments.--Section 303 of the Agricultural Adjustment 
Act of 1938 (7 U.S.C. 1303) is amended in the first sentence by 
striking ``rice, or tobacco,'' and inserting ``or rice,''.
    (k) Marketing Quotas.--Part I of subtitle B of title III of the 
Agricultural Adjustment Act of 1938 (7 U.S.C. 1311 et seq.) is 
repealed.
    (l) Administrative Provisions.--Section 361 of the Agricultural 
Adjustment Act of 1938 (7 U.S.C. 1361) is amended by striking 
``tobacco,''.
    (m) Adjustment of Quotas.--Section 371 of the Agricultural 
Adjustment Act of 1938 (7 U.S.C. 1371) is amended--
            (1) in the first sentence of subsection (a), by striking 
        ``rice, or tobacco'' and inserting ``or rice''; and
            (2) in the first sentence of subsection (b), by striking 
        ``rice, or tobacco'' and inserting ``or rice''.
    (n) Reports and Records.--Section 373 of the Agricultural 
Adjustment Act of 1938 (7 U.S.C. 1373) is amended--
            (1) by striking ``rice, or tobacco'' each place it appears 
        in subsections (a) and (b) and inserting ``or rice''; and
            (2) in subsection (a)--
                    (A) in the first sentence, by striking ``all 
                persons engaged in the business of redrying, prizing, 
                or stemming tobacco for producers,''; and
                    (B) in the last sentence, by striking ``$500;'' and 
                all that follows through the period at the end of the 
                sentence and inserting ``$500.''.
    (o) Regulations.--Section 375 of the Agricultural Adjustment Act of 
1938 (7 U.S.C. 1375) is amended--
            (1) in subsection (a), by striking ``peanuts, or tobacco'' 
        and inserting ``or peanuts''; and
            (2) by striking subsection (c).
    (p) Eminent Domain.--Section 378 of the Agricultural Adjustment Act 
of 1938 (7 U.S.C. 1378) is amended--
            (1) in the first sentence of subsection (c), by striking 
        ``cotton, and tobacco'' and inserting ``and cotton''; and
            (2) by striking subsections (d), (e), and (f).
    (q) Burley Tobacco Farm Reconstitution.--Section 379 of the 
Agricultural Adjustment Act of 1938 (7 U.S.C. 1379) is amended--
            (1) in subsection (a)--
                    (A) by striking ``(a)''; and
                    (B) in paragraph (6), by striking ``, but this 
                clause (6) shall not be applicable in the case of 
                burley tobacco''; and
            (2) by striking subsections (b) and (c).
    (r) Acreage-Poundage Quotas.--Section 4 of the Act of April 16, 
1955 (Public Law 89-12; 7 U.S.C. 1314c note), is repealed.
    (s) Burley Tobacco Acreage Allotments.--The Act of July 12, 1952 (7 
U.S.C. 1315), is repealed.
    (t) Transfer of Allotments.--Section 703 of the Food and 
Agriculture Act of 1965 (7 U.S.C. 1316) is repealed.
    (u) Advance Recourse Loans.--Section 13(a)(2)(B) of the Food 
Security Improvements Act of 1986 (7 U.S.C. 1433c-1(a)(2)(B)) is 
amended by striking ``tobacco and''.

SEC. 3. TERMINATION OF TOBACCO PRICE SUPPORT PROGRAM.

    (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 subsections (c), (g), (h), and (i);
            (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 subsections 
        (c) and (d), respectively.
    (b) Termination of Tobacco Price Support and No Net Cost 
Provisions.--Sections 106, 106A, and 106B of the Agricultural Act of 
1949 (7 U.S.C. 1445, 1445-1, 1445-2) are repealed.
    (c) Definition of Basic Agricultural Commodity.--Section 408(c) of 
the Agricultural Act of 1949 (7 U.S.C. 1428(c)) is amended by striking 
``tobacco,''.
    (d) Review of Burley Tobacco Imports.--Section 3 of Public Law 98-
59 (7 U.S.C. 625) is repealed.
    (e) Powers of Commodity Credit Corporation.--Section 5 of the 
Commodity Credit Corporation Charter Act (15 U.S.C. 714c) is amended by 
inserting ``(other than tobacco)'' after ``agricultural commodities'' 
each place it appears.

SEC. 4. LIABILITY.

    The amendments made by sections 2 and 3 shall not affect the 
liability of any person under any provision of law so amended with 
respect to any crop of tobacco planted before the effective date of 
this Act.

SEC. 5. REPLACEMENT TOBACCO ASSISTANCE PROGRAMS.

    (a) In General.--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 Assistance

``SEC. 380A. DEFINITIONS.

    ``In this subtitle:
            ``(1) Active tobacco producer.--The term `active tobacco 
        producer', with respect to a kind of tobacco, means a person 
        that--
                    ``(A) is actively engaged in the production of 
                tobacco marketed or considered planted; and
                    ``(B) shares in the risk of producing the tobacco.
            ``(2) Applicable fiscal year.--The term `applicable fiscal 
        year' means each of fiscal years 2004 through 2011.
            ``(3) Base period.--The term `base period' means the six-
        month period from January 1, 2004, through June 30, 2004, and 
        each three-month period thereafter through the three-month 
        period ending on June 30, 2011.
            ``(4) Considered planted.--The term `considered planted' 
        means tobacco planted but failed to be produced as a result of 
        a natural disaster, as determined by the Secretary.
            ``(5) Department.--The term `Department' means the 
        Department of Agriculture.
            ``(6) Eligible state.--The term `eligible State' means each 
        of the States of Alabama, Arkansas, Florida, Georgia, Indiana, 
        Kansas, Kentucky, Minnesota, Missouri, North Carolina, Ohio, 
        Oklahoma, South Carolina, Tennessee, Virginia, West Virginia, 
        and Wisconsin.
            ``(7) Market share.--The term `market share' means the 
        share of each manufacturer or importer of a class of tobacco 
        product (expressed as a decimal to the fourth place) of the 
        total volume of domestic sales of the class of tobacco product 
        during the base period for the applicable fiscal year for an 
        assessment under section 380T.
            ``(8) Quota tobacco.--The term `quota tobacco' means a kind 
        of tobacco that is subject to a farm marketing quota or farm 
        acreage allotment for the 2002 tobacco marketing year under a 
        marketing quota or allotment program established under part I 
        of subtitle B of this title (as in effect on the day before the 
        date of the enactment of the Tobacco Reduction, Accountability, 
        and Community Enhancement Act of 2003).
            ``(9) Tobacco.--The term `tobacco' means each of the 
        following kinds of tobacco:
                    ``(A) Flue-cured tobacco, comprising types 11, 12, 
                13, and 14.
                    ``(B) Fire-cured tobacco, comprising types 22 and 
                23.
                    ``(C) Dark air-cured tobacco, comprising types 35 
                and 36.
                    ``(D) Virginia sun-cured tobacco, comprising type 
                37.
                    ``(E) Virginia fire-cured tobacco, comprising type 
                21.
                    ``(F) Burley tobacco, comprising type 31.
                    ``(G) Cigar-filler and cigar-binder tobacco, 
                comprising types 42, 43, 44, 53, 54, and 55.
            ``(10) Tobacco advisory board.--The terms `Tobacco Advisory 
        Board' and `Board' mean a Tobacco Advisory Board established 
        under section 380G for a kind of tobacco.
            ``(11) Tobacco quota holder.--The term `tobacco quota 
        holder' means a person that is considered a tobacco quota 
        holder under section 380B(b).
            ``(12) Tobacco trust fund.--The terms `Tobacco Trust Fund' 
        and `Fund' mean the Tobacco Trust Fund established under 
        section 380S.
            ``(13) Traditional producer of tobacco.--The term 
        `traditional producer of tobacco' means a person that, for at 
        least 1 of the 2000, 2001, or 2002 tobacco marketing years--
                    ``(A) was actively engaged in the production of 
                tobacco marketed, or considered planted, under a 
                marketing quota established under part I of subtitle B 
                of this title (as in effect on the day before the date 
                of the enactment of the Tobacco Reduction, 
                Accountability, and Community Enhancement Act of 2003); 
                and
                    ``(B) shared in the risk of producing the tobacco.
            ``(14) Traditional tobacco county.--The term `traditional 
        tobacco county' means a county in the United States that had 1 
        or more farms operated by traditional producers of tobacco 
        under a marketing quota for at least 1 of the 2000, 2001, or 
        2002 tobacco marketing years. To determine the crop poundage 
        base of an active tobacco producer for a kind of tobacco 
        produced in the State of Georgia under section 380I, the term 
        includes a county that is contiguous to a county described in 
        the preceding sentence.

    ``CHAPTER 1--PAYMENTS TO TOBACCO QUOTA HOLDERS AND TRADITIONAL 
                               PRODUCERS

``SEC. 380B. EQUITY RELIEF PAYMENTS TO TOBACCO QUOTA HOLDERS.

    ``(a) In General.--The Secretary shall make transition payments 
under this section to each tobacco quota holder.
    ``(b) Tobacco Quota Holder.--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, the Secretary shall consider a person to be a 
        tobacco quota holder under this section if the person was an 
        owner of a farm, as of July 1, 2002, for which a basic tobacco 
        farm marketing quota or farm acreage allotment for quota 
        tobacco was established with respect to the 2002 tobacco 
        marketing year under a marketing quota program established 
        under part I of subtitle B of this title (as in effect on the 
        day before the date of the enactment of the Tobacco Reduction, 
        Accountability, and Community Enhancement Act of 2003).
            ``(2) Effect of purchase contract.--If there was an 
        agreement for the purchase of all or part of a farm described 
        in paragraph (1) as of July 1, 2002, and the parties to the 
        sale are unable to agree to the disposition of eligibility for 
        payments under this section, the Secretary, taking into account 
        any transfer of quota that has been agreed to, shall provide 
        for the equitable division of the payments among the parties by 
        adjusting the determination of who is the tobacco quota holder 
        with respect to particular pounds of the quota.
            ``(3) Effect of agreement for permanent quota transfer.--If 
        the Secretary determines that there was in existence, as of 
        July 1, 2002, an agreement for the permanent transfer of quota, 
        but that the transfer was not completed by that date, the 
        Secretary shall consider the tobacco quota holder to be the 
        party to the agreement that, as of that date, was the owner of 
        the farm to which the quota was to be transferred.
            ``(4) Protected bases.--A person that owns a farm with a 
        tobacco poundage quota that is protected under a conservation 
        reserve program contract entered into under section 1231 of the 
        Food Security Act of 1985 (16 U.S.C. 3831) shall be considered 
        to be a tobacco quota holder with respect to the protected 
        poundage.
            ``(5) Secretarial discretion.--Notwithstanding paragraphs 
        (1) through (4), the Secretary may declare a person to be the 
        tobacco quota holder with respect to certain pounds of quota or 
        otherwise for purposes of this section if the Secretary--
                    ``(A) considers the declaration is needed to ensure 
                a fair and equitable administration of the payments 
                provided for in this section, including such actions as 
                are necessary to prevent payments based on speculation; 
                and
                    ``(B) does not, in exercising the authority 
                provided under this paragraph, effectively increase the 
                total quota in excess of the quota that was available 
                to all producers for the 2002 marketing year for other 
                than seed or experimental use.
            ``(6) Limitation on quantity of quota held.--
                    ``(A) In general.--A person shall be considered a 
                tobacco quota holder for purposes of this section only 
                with respect to the quantity of basic quota that 
                qualifies the person as a tobacco quota holder.
                    ``(B) Included quota.--The determination of the 
                tobacco poundage amount for which the person qualifies 
                shall--
                            ``(i) be made based on the 2002 crop quota 
                        levels; and
                            ``(ii) take into account sales of the farm 
                        that occurred before July 1, 2002, and any 
                        permanent transfers of quota that took place 
                        before that date.
    ``(c) Application.--To be eligible to receive payments under this 
section, a person 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 information 
sufficient to demonstrate that the person satisfies the definition of 
tobacco quota holder.
    ``(d) Total Amount Available for Payments.--
            ``(1) In general.--The Secretary shall determine the total 
        amount to be paid to all tobacco quota holders under this 
        section with respect to each kind of tobacco.
            ``(2) Poundage quota tobacco.--For each kind of tobacco for 
        which the marketing quota is expressed in pounds, the total 
        amount available for payments to tobacco quota holders under 
        this section shall be equal to the product obtained by 
        multiplying--
                    ``(A) $8 per pound; by
                    ``(B) the annual average of tobacco farm basic 
                quotas established under this Act for the 1997 through 
                2002 marketing years for that kind of tobacco.
            ``(3) Marketing quotas other than poundage quotas.--For 
        each kind of tobacco for which there is a marketing quota or 
        allotment on an acreage basis, the Secretary shall convert the 
        tobacco farm marketing quotas or allotments established under 
        this Act for the 1997 through 2002 marketing year for that kind 
        of tobacco to a poundage basis before executing the 
        mathematical equation specified in paragraph (2).
    ``(e) Base Quota Level.--
            ``(1) In general.--The Secretary shall determine the base 
        quota level of each tobacco quota holder with respect to each 
        kind of tobacco.
            ``(2) Poundage quota tobacco.--For each kind of tobacco for 
        which the marketing quota is expressed in pounds, the base 
        quota level for a tobacco quota holder shall be equal to the 
        tobacco farm marketing quota established under this Act for the 
        2002 marketing year for quota tobacco on the farm owned by the 
        tobacco quota holder.
            ``(3) Marketing quotas other than poundage quotas.--For 
        each kind of tobacco for which there is a marketing quota or 
        allotment on an acreage basis, the base quota level for a 
        tobacco quota holder shall be equal to the product obtained 
        (based on a poundage conversion) by multiplying--
                    ``(A) the tobacco farm marketing quota or allotment 
                established under this Act for the 2002 marketing year 
                for the tobacco quota holder's farm; by
                    ``(B) the average yield per acre for the tobacco 
                quota holder's farm for the kind of tobacco for that 
                marketing year.
    ``(f) Payment Amount.--The Secretary shall make payments to a 
tobacco quota holder with respect to a kind of tobacco under this 
section in a total amount that bears the same ratio to the amount 
determined by the Secretary under subsection (d) with respect to that 
kind of tobacco as the base quota level of the tobacco quota holder 
with respect to that kind of tobacco bears to the base quota level of 
all tobacco quota holders with respect to that kind of tobacco.
    ``(g) Time for Payment.--The amount determined under subsection (f) 
for a tobacco quota holder shall be paid in seven equal installments on 
November 1 of each of the calendar years 2004 through 2010, except that 
50 percent of the payment required to be made on November 1, 2004, 
shall be paid on September 30, 2004.
    ``(h) Death of Tobacco Quota Holder.--If a tobacco quota holder who 
is entitled to payments under this section dies and is survived by a 
spouse or one or more dependents, the right to receive the payments 
shall transfer to the surviving spouse or, if there is no surviving 
spouse, to the estate of the tobacco quota holder.

``SEC. 380C. DIRECT PAYMENTS TO TRADITIONAL PRODUCERS OF TOBACCO.

    ``(a) In General.--The Secretary shall make direct payments under 
this section to traditional producers of tobacco.
    ``(b) Application.--To be eligible to receive payments under this 
section, a person 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 information 
sufficient to demonstrate that the person satisfies the definition of 
traditional producer of tobacco.
    ``(c) Total Amount Available for Payments.--
            ``(1) In general.--The Secretary shall determine the total 
        amount to be paid to traditional producers of tobacco under 
        this section with respect to each kind of tobacco.
            ``(2) Poundage quota tobacco.--For each kind of tobacco for 
        which the marketing quota is expressed in pounds, the total 
        amount available for payments to traditional producers of 
        tobacco under this section shall be equal to the product 
        obtained by multiplying--
                    ``(A) $4 per pound; by
                    ``(B) the annual average of tobacco farm effective 
                quotas established under this Act for the 1997 through 
                2002 marketing years for that kind of tobacco.
            ``(3) Marketing quotas other than poundage quotas.--For 
        each kind of tobacco for which there is a marketing quota or 
        allotment on an acreage basis, the Secretary shall convert the 
        tobacco farm marketing quotas or allotments established under 
        this Act for the 1997 through 2002 marketing years for that 
        kind of tobacco to a poundage basis before executing the 
        mathematical equation specified in paragraph (2).
    ``(d) Payment Quantity.--
            ``(1) In general.--The Secretary shall determine the 
        payment quantity of tobacco for each traditional producer of 
        tobacco with respect to each kind of tobacco.
            ``(2) Poundage quota tobacco.--For each kind of tobacco for 
        which the marketing quota is expressed in pounds, the payment 
        quantity for a traditional producer of tobacco shall be equal 
        to the average of the July 1 effective quota for that quota 
        tobacco produced by the producer under this Act for the 2000, 
        2001 and 2002 marketing years.
            ``(3) Marketing quotas other than poundage quotas.--For 
        each kind of tobacco for which there is a marketing quota or 
        allotment on an acreage basis, the payment quantity for a 
        traditional producer of tobacco shall be equal to the average 
        of the actual pounds of that kind of tobacco produced by the 
        traditional producer of tobacco for the 2000, 2001 and 2002 
        marketing years.
    ``(e) Payment Amount.--The Secretary shall make payments to each 
traditional producer of tobacco with respect to a kind of tobacco under 
this section in a total amount that bears the same ratio to the amount 
determined by the Secretary under subsection (c) with respect to that 
kind of tobacco as the payment quantity of the producer with respect to 
that kind of tobacco bears to the payment quantities of all traditional 
producers of tobacco with respect to that kind of tobacco.
    ``(f) Time for Payment.--The amount determined under subsection (e) 
for a traditional producer of tobacco shall be paid in seven equal 
installments on November 1 of each of the calendar years 2004 through 
2010, except that 50 percent of the payment required to be made on 
November 1, 2004, shall be paid on September 30, 2004.
    ``(g) Death of Active Tobacco Producer.--If a traditional producer 
of tobacco who is entitled to transition payments under this section 
dies and is survived by a spouse or one or more dependents, the right 
to receive the payments shall transfer to the surviving spouse or, if 
there is no surviving spouse, to the estate of the producer.

``SEC. 380D. ADMINISTRATION.

    ``(a) Resolution of Disputes.--
            ``(1) In general.--Any dispute regarding the eligibility of 
        a person to receive a payment under this subtitle, or the 
        amount of the payment, may be appealed to the county committee 
        established under section 8 of the Soil Conservation and 
        Domestic Allotment Act (16 U.S.C. 590h) for the county or other 
        area in which the farming operation of the person is located.
            ``(2) National appeals division.--Any adverse determination 
        of a county committee under subsection (a) may be appealed to 
        the National Appeals Division established under subtitle H of 
        the Department of Agriculture Reorganization Act of 1994 (7 
        U.S.C. 6991 et seq.).
    ``(b) Use of Qualified Financial Institutions.--The Secretary may 
use qualified financial institutions to manage assets, make payments, 
and otherwise carry out this subtitle.

               ``CHAPTER 2--TOBACCO QUALITY AND QUANTITY

``SEC. 380G. TOBACCO ADVISORY BOARDS.

    ``(a) Establishment.--The Secretary shall establish in the 
Department a permanent advisory board for each kind of tobacco, to be 
known as a `Tobacco Advisory Board'.
    ``(b) Membership.--
            ``(1) Number.--Each Tobacco Advisory Board shall have 11 
        members.
            ``(2) Composition.--The Board for a kind of tobacco shall 
        consist of the following:
                    ``(A) 5 members appointed by the Secretary from 
                nominations submitted by representatives of active 
                tobacco producers in the United States of that kind of 
                tobacco.
                    ``(B) 5 members appointed by the Secretary from 
                nominations submitted by representatives of tobacco 
                product manufacturers in the United States that 
                purchase that type of tobacco, including at least 1 
                representative of export dealers of tobacco or tobacco 
                products appointed from nominations submitted by export 
                dealers.
                    ``(C) An officer or employee of the Department 
                appointed by the Secretary.
            ``(3) Allocation of producer membership.--In appointing 
        members to the Tobacco Advisory Board for a kind of tobacco 
        under paragraph (2)(A), the number of members appointed by the 
        Secretary to represent active tobacco producers of that kind of 
        tobacco in a particular State shall, to the maximum extent 
        practicable, bear the same ratio to the total number of members 
        of the Board as--
                    ``(A) the total volume of domestic sales of the 
                kind of tobacco produced in the State during the most 
                recent period for which data is available; bears to
                    ``(B) the total volume of domestic sales of the 
                kind of tobacco produced in all States during the most 
                recent period for which data is available.
    ``(c) Chairperson.--The Secretary shall appoint the chairperson of 
each Tobacco Advisory Board, with a different member serving as 
chairperson of a Board every 2 years.
    ``(d) Terms.--Members of a Tobacco Advisory Board shall serve for 
2-year terms, except that the terms of the members first appointed to 
the Boards shall be staggered so as to establish a rotating membership 
of the Boards, as determined by the Secretary.

``SEC. 380H. DUTIES AND ADMINISTRATION OF TOBACCO ADVISORY BOARDS.

    ``(a) Duties.--The Tobacco Advisory Board for a kind of tobacco 
shall--
            ``(1) determine and describe the physical characteristics 
        of that kind of tobacco produced in the United States and 
        unmanufactured tobacco of that kind imported into the United 
        States;
            ``(2) assemble and evaluate, in a systematic manner, 
        concerns and problems with the quality of that kind of tobacco 
        produced in the United States, expressed by domestic and 
        foreign buyers and manufacturers of tobacco products;
            ``(3) review data collected by Federal agencies on the 
        physical and chemical integrity of that kind of tobacco 
        produced in the United States and unmanufactured tobacco 
        imported into the United States, to ensure that tobacco being 
        used in domestically-manufactured tobacco products is of the 
        highest quality and is free from prohibited physical and 
        chemical agents;
            ``(4) not later than a date determined by the Secretary, 
        make recommendations to the Secretary on the base year, for the 
        maximum crop poundage base under section 380I(f) for each crop 
        of that kind of tobacco;
            ``(5) establish a registration system to monitor the 
        production of that kind of tobacco;
            ``(6) investigate and communicate to the Secretary--
                    ``(A) conditions with respect to the production of 
                that kind of tobacco that discourage improvements in 
                the quality of tobacco produced in the United States; 
                and
                    ``(B) recommendations for regulatory changes that 
                would address tobacco quality issues affecting that 
                kind of tobacco;
            ``(7) conduct oversight regarding tobacco marketing issues 
        (such as opening sales dates and marketing regulations) 
        affecting that kind of tobacco and applicable to auction 
        markets;
            ``(8) provide assistance to Federal agencies on actions 
        taken by the Federal agencies that affect the quality or 
        quantity of that kind of tobacco produced in the United States; 
        and
            ``(9) carry out such other related activities as are 
        assigned to the Board by the Secretary.
    ``(b) Administration.--The Secretary shall provide the Tobacco 
Advisory Boards with (as determined by the Secretary)--
            ``(1) a staff that is--
                    ``(A) experienced in the sampling and analysis of 
                unmanufactured tobacco; and
                    ``(B) capable of collecting data and monitoring 
                tobacco production information; and
            ``(2) other resources and information necessary for the 
        Boards to perform their duties, including information 
        concerning acreage devoted to the production of each kind of 
        tobacco.
    ``(c) Applicability of Federal Advisory Committee Act.--The Federal 
Advisory Committee Act (5 U.S.C. App.) shall not apply to the Tobacco 
Advisory Boards.

``SEC. 380I. TOBACCO POUNDAGE LIMITATION PROGRAM.

    ``(a) Definitions.--In this section:
            ``(1) Crop poundage base.--The term `crop poundage base' 
        means the crop poundage base for a kind of tobacco for a crop 
        for an active tobacco producer, as determined by the Secretary 
        under subsection (e).
            ``(2) Permitted poundage.--The term `permitted poundage' 
        means the number of pounds of a kind of tobacco authorized to 
        be produced by an active tobacco producer, consistent with the 
        annual poundage limitation program announced by the Secretary 
        for the kind of tobacco.
    ``(b) Establishment and Maintenance.--
            ``(1) In general.--The Secretary shall establish and may 
        maintain a poundage limitation program for each crop of each 
        kind of tobacco.
            ``(2) Supply.--In determining whether to maintain the 
        poundage limitation program for a crop of a kind of tobacco, 
        the Secretary shall determine whether the total supply of that 
        kind of tobacco, in the absence of limitations, will be 
        excessive, taking into account the need for an adequate carry-
        over to maintain reasonable and stable supplies and prices.
            ``(3) Announcement.--
                    ``(A) In general.--The Secretary shall announce the 
                annual poundage limitation program for a kind of 
                tobacco as soon as practicable preceding the year in 
                which the crop is harvested.
                    ``(B) Special rule for 2004 crop.--In the case of 
                the 2004 crop for a kind of tobacco, the Secretary 
                shall announce the poundage limitation program as soon 
                as practicable after the date of the enactment of the 
                Tobacco Reduction, Accountability, and Community 
                Enhancement Act of 2003.
            ``(4) Consultation.--The Secretary shall carry out this 
        subsection with regard to a kind of tobacco in consultation 
        with the Tobacco Advisory Board established for that kind of 
        tobacco.
    ``(c) Application of Limitation.--Under a poundage limitation 
program for a kind of tobacco, the Secretary shall achieve the 
limitation by applying a uniform percentage adjustment to the crop 
poundage base for the kind of tobacco in each traditional tobacco 
county for the crop for active tobacco producers that produce that kind 
of tobacco in that county, as determined by the Secretary.
    ``(d) Compliance.--
            ``(1) Loans, purchases, or payments.--An active tobacco 
        producer that knowingly produces a kind of tobacco in excess of 
        the permitted poundage for the kind of tobacco, or violates any 
        lease or transfer requirements of this section, shall be 
        ineligible for any loans, purchases, or payments for the kind 
        of tobacco.
            ``(2) No carry over.--An active tobacco producer may not 
        carry over permitted poundage for a crop of a kind of tobacco, 
        which is not produced by the producer, for production in a 
        subsequent crop year.
            ``(3) Penalties.--
                    ``(A) Criminal penalty.--A producer that violates 
                this subsection may be fined not more than $100,000 or 
                imprisoned not more than 2 years, or both.
                    ``(B) Civil penalty.--In addition to any penalty 
                imposed under paragraph (1), the Secretary may assess 
                against a producer that violates this subsection a 
                civil penalty in an amount not to exceed 2 percent of 
                the value of the kind of tobacco produced by the 
                producer during the crop year in which the violation 
                occurred, as determined by the Secretary.
            ``(3) Jurisdiction to prevent and restrain violations.--A 
        United States district court shall have jurisdiction to prevent 
        and restrain a producer from producing a kind of tobacco in 
        excess of the permitted poundage for the kind of tobacco.
    ``(e) Determination of Crop Poundage Bases.--
            ``(1) 2004 crop year.--Subject to subsections (f) through 
        (i), the crop poundage base for an active tobacco producer for 
        the 2004 crop of each kind of tobacco shall equal the average 
        of the number of pounds of that kind of tobacco harvested by 
        the active tobacco producer in a traditional tobacco county and 
        marketed in each of the 5 crop years preceding the crop year, 
        as determined and adjusted by the Secretary.
            ``(2) Subsequent crop years.--Subject to subsections (f) 
        through (i), in the case of the 2005 and subsequent crops of 
        each kind of tobacco, the crop poundage base for an active 
        tobacco producer of a kind of tobacco shall equal the number of 
        pounds of that kind of tobacco harvested by the active tobacco 
        producer in a traditional tobacco county and marketed in the 
        preceding crop year, as determined and adjusted by the 
        Secretary.
            ``(3) Consultation.--The Secretary shall carry out this 
        subsection with regard to a kind of tobacco in consultation 
        with the Tobacco Advisory Board established for that kind of 
        tobacco.
    ``(f) Maximum Crop Poundage Bases.--
            ``(1) In general.--Subject to paragraph (2), the total 
        number of pounds devoted to a kind of tobacco by active tobacco 
        producers during a crop year shall not exceed the total number 
        of pounds devoted to the kind of tobacco by active tobacco 
        producers during a crop year determined by the Secretary.
            ``(2) Adjustment.--If the active tobacco producers of a 
        kind of tobacco demonstrate to the Secretary that the 
        application of paragraph (1) to a crop of a kind of tobacco 
        will result in unbalanced supply and demand conditions, the 
        Secretary may adjust the total number of pounds that may be 
        devoted to the kind of tobacco by active tobacco producers 
        during the crop year.
    ``(g) Sale, Lease, or Transfer of Crop Poundage Bases.--
            ``(1) Prohibition.--Except as provided in paragraph (2), an 
        active tobacco producer shall not directly or indirectly sell, 
        lease, or transfer to another person or other legal entity a 
        crop poundage base established for an active tobacco producer 
        under this section.
            ``(2) Exception.--If the crop poundage base of an active 
        tobacco producer for a type of tobacco covers tobacco that was 
        produced by the producer in more than one traditional tobacco 
        county, the producer may elect to consolidate the base in a 
        single traditional tobacco county in which the producer bore or 
        shared in the risk of producing a crop of that kind of tobacco 
        for the 2002 crop year.
    ``(h) Reallocation of Unused Crop Poundage Bases.--
            ``(1) County pool.--Subject to paragraphs (2), (3), and 
        (4), if an active tobacco producer with a crop poundage base 
        for a kind of tobacco elects not to use all or part of the crop 
        poundage base to continue to produce that kind of tobacco, the 
        unused crop poundage base shall be placed in a pool established 
        for the traditional tobacco county where the unused crop 
        poundage base was originally located for reallocation by the 
        Secretary to other active tobacco producers of that kind of 
        tobacco in the traditional tobacco county. The Secretary shall 
        distribute the unused crop poundage base among those producers 
        that request a portion of the unused crop poundage base 
        according to the percentage of previous year production, by 
        pound, of that kind of tobacco in that county.
            ``(2) State pool.--Subject to paragraph (4), if any crop 
        poundage base for a kind of tobacco remains after the crop 
        poundage base is made available to producers of that kind of 
        tobacco in the traditional tobacco county in a State under 
        paragraph (1), the unused crop poundage base shall be placed in 
        a pool established for the State for reallocation by the 
        Secretary to other producers of that kind of tobacco in 
        traditional tobacco counties. The Secretary shall distribute 
        the available unused crop poundage base among those producers 
        that request a portion of the unused crop poundage base 
        according to the percentage of previous year production, by 
        pound, of that kind of tobacco in the State.
            ``(3) Traditional growing area pool.--Subject to paragraph 
        (4), if any crop poundage base for a kind of tobacco remains 
        after the crop poundage base is made available to producers of 
        that kind of tobacco in the traditional tobacco county in a 
State under paragraph (1), and remains after the crop poundage base is 
made available to producers of that kind of tobacco in the State under 
paragraph (2), the unused crop poundage base shall be placed in a pool 
established for reallocation by the Secretary to other producers of 
that kind of tobacco in a traditional tobacco county for that kind of 
tobacco. The Secretary shall distribute the available unused crop 
poundage base among those producers that request a portion of the 
unused crop poundage base according to the percentage of previous year 
production, by pound, of that kind of tobacco in that traditional 
growing area.
            ``(4) New producers.--In reallocating unused crop poundage 
        bases for a kind of tobacco in a traditional tobacco county 
        made available under any of the preceding paragraphs, the 
        Secretary shall make available to any new producers of that 
        kind of tobacco in the traditional tobacco county up to 10 
        percent of the crop poundage bases available for reallocation 
        for the kind of tobacco in the traditional tobacco county.
            ``(5) Reallocation procedures.--The Secretary shall 
        establish procedures by which producers of a kind of tobacco, 
        including new producers under paragraph (4), may request the 
        reallocation unused crop poundage base available under this 
        subsection.
    ``(i) Compliance With Conservation and Agricultural Requirements.--
As a condition of the establishment of a crop poundage base for an 
active tobacco producer for a crop of a kind of tobacco, the producer 
shall agree, during the crop year for which the crop poundage base is 
established--
            ``(1) to comply with applicable conservation requirements 
        under subtitle B of title XII of the Food Security Act of 1985 
        (16 U.S.C. 3811 et seq.);
            ``(2) to comply with applicable wetland protection 
        requirements under subtitle C of title XII of the Act (16 
        U.S.C. 3821 et seq.);
            ``(3) to use the land of the active tobacco producer, in a 
        quantity consistent with the crop poundage base, for an 
        agricultural or conserving use, and not for a nonagricultural 
        commercial or industrial use, as determined by the Secretary; 
        and
            ``(4) to effectively control noxious weeds and otherwise 
        maintain the land in accordance with sound agricultural 
        practices, as determined by the Secretary, if the agricultural 
        or conserving use involves the noncultivation of any portion of 
        the land referred to in paragraph (3).

             ``CHAPTER 3--TOBACCO MARKET STABILITY PROGRAM

``SEC. 380M. TOBACCO MARKET STABILITY PROGRAM.

    ``(a) In General.--If during any period of a marketing year, to be 
established by the Secretary, the insured price for the crop of a kind 
of tobacco exceeds the average domestic price for the crop of the kind 
of tobacco, as determined by the Secretary, the Secretary shall make 
available to active tobacco producers of that kind of tobacco market 
stability payments for the marketing year in an amount obtained by 
multiplying--
            ``(1) the payment rate for the crop (as determined under 
        subsection (b)); and
            ``(2) the permitted poundage for the active tobacco 
        producer (as determined under section 380I).
    ``(b) Payment Rate.--
            ``(1) In general.--Subject to paragraphs (2) and (3), the 
        payment rate for a crop of a kind of tobacco under this section 
        shall be the amount by which--
                    ``(A) the insured price for the crop; exceeds
                    ``(B) the domestic price for the crop.
            ``(2) Insured prices.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the insured price for each crop of a 
                kind of tobacco under this section shall be a price, 
                which is determined by the Secretary to be necessary to 
                provide market stability for that kind of tobacco and 
                for which private insurance may be obtained in 
                accordance with subsection (c) at a cost that does not 
                exceed (but may be less than) the assessment imposed 
                for that kind of tobacco pursuant to subsection (f).
                    ``(B) Minimum price.--The insured price for each 
                crop of a kind of tobacco under this section shall not 
                be less than $1.00 per pound, unless the Secretary 
                determines that lower insured price is necessary.
            ``(3) Domestic prices.--The domestic price for the crop of 
        a kind of tobacco under this section shall be determined by the 
        Secretary.
    ``(c) Delivery Through Private Providers.--
            ``(1) In general.--The Secretary shall carry out this 
        section, to the maximum extent practicable, through contracts 
        with private insurance companies and other private entities 
        approved by the Secretary (referred to in this section as 
        `private providers').
            ``(2) Reimbursement.--The Secretary shall reimburse private 
        providers for administrative expenses incurred in carrying out 
        this section, as determined by the Secretary.
    ``(d) Delivery Through Local Department Offices.--If the Secretary 
determines that there are an insufficient number of private providers 
to carry out this section in all or part of a State, the Secretary 
(acting through local offices of the Department) shall carry out this 
section directly in all or part of the State.
    ``(e) Additional Coverage.--The Secretary may offer additional 
coverage to active tobacco producers on a farm of a crop of a kind of 
tobacco under this section under which a higher level of price coverage 
is made available to the active tobacco producers on the farm, in 
exchange for an additional premium paid by the active tobacco producers 
on the farm.
    ``(f) Assessment.--
            ``(1) In general.--Effective for each marketing year for a 
        kind of tobacco for which tobacco market stability payments are 
        made available under this section, subject to paragraph (2), 
        each producer and purchaser of that kind of tobacco shall remit 
        to the Commodity Credit Corporation a marketing assessment in 
an amount determined by the Secretary that is sufficient to provide the 
payments for that kind of tobacco.
            ``(2) Limitation on assessment.--The Secretary shall not 
        impose or collect an assessment under this section for a 
        marketing year until and unless the Secretary determines that 
        the amounts made available under section 380S(c)(1)(C) to carry 
        out this section for that marketing year will be insufficient.
            ``(3) Amount.--Subject to paragraph (2), the amount of 
        producer and purchaser assessments for a kind of tobacco under 
        this subsection--
                    ``(A) shall be determined in such a manner that 
                producers and purchasers share equally in paying 
                assessments required under this subsection; and
                    ``(B) shall not exceed 5 cents per pound.
            ``(4) Collection.--The producer and purchaser assessments 
        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 
                in effect on the day before the date of the enactment 
                of the Tobacco Reduction, Accountability, and Community 
                Enhancement Act of 2003), as applicable; and
                    ``(B) enforced in the same manner as provided in 
                section 106A(h) or 106B(j) of the Agricultural Act of 
                1949 (7 U.S.C. 1445-1(h), 1445-2(j)) (as in effect on 
                the day before the date of the enactment of the Tobacco 
                Reduction, Accountability, and Community Enhancement 
                Act of 2003), as applicable.
            ``(5) Use of qualified financial institutions.--The 
        Secretary may use qualified financial institutions to manage 
        assets, make collections, and otherwise carry out this 
        subsection.
            ``(6) Enforcement.--The Secretary may enforce this 
        subsection in the courts of the United States.
    ``(g) Consultation.--The Secretary shall make the determinations 
required by this section with regard to a kind of tobacco in 
consultation with the Tobacco Advisory Board established for that kind 
of tobacco. After the Secretary announces the terms and conditions of 
the tobacco market stability program for a crop year for a kind of 
tobacco, the Secretary shall consult with the Tobacco Advisory Board 
established for that kind of tobacco before making any change to the 
program for the crop year.

          ``CHAPTER 4--COMPETITIVE GRANTS FOR TOBACCO RESEARCH

``SEC. 380Q. COMPETITIVE GRANTS FOR TOBACCO RESEARCH.

    ``(a) In General.--Notwithstanding any other provision of law, the 
Secretary shall make competitive grants under section 406 of the 
Agricultural Research, Extension, and Education Reform Act of 1998 (7 
U.S.C. 7626) to colleges and universities located in eligible States to 
conduct research--
            ``(1) to assist tobacco producers to diversify crops or 
        implement other means to reduce or eliminate the reliance of 
        the producers on the production of tobacco or to promote 
        alternative uses of tobacco or enhance the quality of tobacco 
        produced in the United States; and
            ``(2) to foster and facilitate development, evaluation, and 
        implementation of economically viable new agricultural 
        technologies and enterprises for rural communities.
    ``(b) Grant Distribution.--In making grants under this section, the 
Secretary shall provide for an equitable distribution of the grants 
based on the volume of each kind of tobacco that is produced in each 
eligible State, as determined by the Secretary

                          ``CHAPTER 5--FUNDING

``SEC. 380S. TOBACCO TRUST FUND.

    ``(a) Establishment.--There is established in the Commodity Credit 
Corporation a revolving trust fund to be known as the `Tobacco Trust 
Fund' and to be used in carrying out this subtitle. The Fund shall 
consist of--
            ``(1) such amounts as are deposited in the Fund under 
        subsection (b);
            ``(2) such amounts as are necessary from the Commodity 
        Credit Corporation; and
            ``(3) any interest earned on investment of amounts in the 
        Fund under subsection (d).
    ``(b) Deposits.--Revenues from assessments collected under section 
380T shall be deposited in the Fund.
    ``(c) Expenditures.--
            ``(1) In general.--Subject to paragraphs (2) and (3) and 
        notwithstanding any other provision of law, in addition to any 
        other funds that may be available, the Secretary may use from 
        the Fund such amounts as the Secretary determines are 
        necessary--
                    ``(A) to make payments to tobacco quota holders and 
                traditional producers of tobacco under chapter 1;
                    ``(B) to pay necessary expenses of the Tobacco 
                Advisory Boards and to carry out the poundage 
                limitation program under chapter 2;
                    ``(C) to carry out the tobacco market stability 
                program under chapter 3, in an amount equal to 
                $50,000,000 for each of fiscal years 2005 through 2008;
                    ``(D) to make competitive grants for tobacco 
                research under chapter 4, in an amount equal to 
                $12,000,000 for each of fiscal years 2005 through 2009;
                    ``(E) to make grants to each association that has 
                entered into a loan agreement with the Commodity Credit 
                Corporation under section 106A or 106B of the 
                Agricultural Act of 1949 (7 U.S.C. 1445-1, 1445-2) (as 
                in effect on the day before the date of the enactment 
                of the Tobacco Reduction, Accountability, and Community 
                Enhancement Act of 2003) to assist the association to 
                transition to alternative methods of marketing tobacco 
                in accordance with a plan approved by the Secretary, 
                with the grants allocated on the basis of the 
                proportion of the kind of tobacco marketed by each 
                association, in an amount not to exceed $1,500,000 for 
                each kind of tobacco for each of fiscal years 2004 
                through 2008;
                    ``(F) to make payments to appropriate tobacco 
                warehouse associations, as determined by the Secretary, 
                in an amount not to exceed $1,500,000 for each of 
                fiscal years 2004 through 2008; and
                    ``(G) to pay administrative costs incurred by the 
                Secretary in carrying out this subtitle and reimburse 
                the Commodity Credit Corporation for costs incurred by 
                the Commodity Credit Corporation under paragraph (2).
            ``(2) Expenditures by commodity credit corporation.--
                    ``(A) In general.--Subject to subparagraph (B) and 
                notwithstanding any other provision of law, the 
                Secretary may use funds of the Commodity Credit 
                Corporation to make payments under paragraph (1).
                    ``(B) Reimbursement to commodity credit 
                corporation.--Not later than January 1, 2011, the 
                Commodity Credit Corporation shall be reimbursed in 
                full, with interest, for all funds of the Commodity 
                Credit Corporation expended under subparagraph (A).
            ``(3) Administrative expenses.--An amount not to exceed 
        $20,000,000 for each fiscal year of the amounts in the Fund 
        shall be available to pay the administrative expenses necessary 
        to carry out this subtitle.
    ``(d) Investment of Amounts.--
            ``(1) In general.--The Commodity Credit Corporation shall 
        invest such portion of the Fund as is not, in the judgment of 
        the Commodity Credit Corporation, required to meet current 
        withdrawals.
            ``(2) Interest-bearing obligations.--Investments may be 
        made only in interest-bearing obligations of the United States.
            ``(3) 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.
            ``(4) Sale of obligations.--Any obligation acquired by the 
        Fund may be sold by the Commodity Credit Corporation at the 
        market price.
            ``(5) 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) Administration.--In administering the Fund, the Secretary 
shall make payments, reimburse agencies of the Department, and accept 
deposits without regard to limitations on total amounts of allotments 
and fund transfers under section 11 of the Commodity Credit Corporation 
Charter Act (15 U.S.C. 714i).
    ``(f) Use of Qualified Financial Institutions.--The Secretary may 
use qualified financial institutions to manage assets, make payments, 
and otherwise carry out this subtitle.

``SEC. 380T. ASSESSMENTS.

    ``(a) In General.--The Secretary, acting through the Commodity 
Credit Corporation, shall impose quarterly assessments, calculated in 
accordance with this section, on each tobacco product manufacturer and 
tobacco product importer that sells tobacco products in domestic 
commerce in the United States.
    ``(b) Tobacco Trust Fund.--Assessments collected under this section 
shall be deposited in the Tobacco Trust Fund.
    ``(c) Assessment for Each Class of Tobacco Product.--
            ``(1) Allocation by class of tobacco products.--The 
        percentage of the total amount to be assessed against, and paid 
        by, the manufacturers and importers of each class of tobacco 
        product in each applicable fiscal year shall be--
                    ``(A) for cigarette manufacturers and importers, 
                98.303 percent;
                    ``(B) for snuff manufacturers and importers, 0.428 
                percent;
                    ``(C) for chewing tobacco manufacturers and 
                importers, 0.098 percent;
                    ``(D) for manufacturers and importers of small 
                cigars, 0.011 percent;
                    ``(E) for manufacturers and importers of large 
                cigars, 1.095 percent;
                    ``(F) for pipe tobacco manufacturers and importers, 
                0.021 percent; and
                    ``(G) for roll-your-own tobacco manufacturers and 
                importers, 0.044 percent.
            ``(2) Adjustment.--The Secretary shall adjust the 
        percentage of the total amount to be assessed against, as 
        determined by paragraph (1), and paid by, the manufacturers and 
        importers of each class of tobacco product in each applicable 
fiscal year by multiplying the percentage of the total amount to be 
assessed, as determined by such paragraph, by a fraction--
                    ``(A) the numerator of which is the total volume of 
                domestic sales of that class of tobacco product during 
                the preceding applicable fiscal year; and
                    ``(B) the denominator of which is the total volume 
                of domestic sales of that class of tobacco product 
                during the fiscal year ending September 30, 2003.
            ``(3) Total assessment.--The total amount to be assessed 
        against all manufacturers and importers of all classes of 
        tobacco product in each applicable fiscal year shall be equal 
        to the amount required to carry out this subtitle during the 
        applicable fiscal year, as determined by the Secretary. If the 
        amount to be assessed after the application of paragraphs (1) 
        and (2) is insufficient to carry out this subtitle during the 
        applicable fiscal year, the Secretary may assess such 
        additional amount as the Secretary determines to be necessary 
        to carry out this subtitle during the applicable fiscal year. 
        Such additional amount shall be allocated to the manufacturers 
        and importers of each class of tobacco product in the same 
        manner and based on the same percentages applied in determining 
        the total amount to be assessed under paragraph (1), as 
        adjusted by paragraph (2) during the applicable fiscal year.
            ``(4) Notification of assessments.--The Secretary shall 
        notify all manufacturers and importers of tobacco products of 
        the amount of the assessment for each quarterly payment period. 
        The notice for a quarterly payment period shall refer gross 
        domestic sales and market shares for the quarterly payment 
        period and conform with the requirements of subsection (h).
            ``(5) Timing of assessment payments.--
                    ``(A) In general.--Assessments shall be collected 
                at the end of each calendar year quarter, and the 
                assessment for a calendar year quarter shall correspond 
                to the base period quarter that ended at the end of the 
                preceding calendar year quarter. The payments over four 
                calendar quarters, beginning with the calendar quarter 
                ending on December 31 of each applicable fiscal year, 
                shall be sufficient to cover the payments required 
                under chapter 1 on November 1 of that same applicable 
                fiscal year and other expenditures of the Tobacco Trust 
                Fund required by section 380S during the base quarter 
                periods corresponding to those four calendar quarters.
                    ``(B) Special rule.--In the case of the chapter 1 
                payments required to be made on September 30, 2004, the 
                assessments shall be paid on that same date and 
                correspond to the first base period of six months.
    ``(d) Allocation of Assessment Within Each Class of Tobacco 
Product.--
            ``(1) Allocation.--The assessment for each class of tobacco 
        product shall be allocated on a pro rata basis among 
        manufacturers and importers based on each manufacturer's or 
        importer's share of gross domestic volume. No manufacturer or 
        importer shall be required to pay an assessment in excess of 
        the manufacturer's or importer's share of domestic volume.
            ``(2) Gross domestic volume defined.--In this section, the 
        term `gross domestic volume' means the volume of tobacco 
        products removed, as defined by section 5702(k) of the Internal 
        Revenue Code of 1986, and not exempt from tax under chapter 52 
        of the Internal Revenue Code at the time of their removal under 
        such chapter or the Harmonized Tariff Schedule of the United 
        States (19 U.S.C. 1202).
    ``(e) Allocation of Total Assessments by Market Share.--The amount 
of the assessment for each class of tobacco product to be paid by each 
manufacturer or importer of the class of tobacco product under 
subsection (a) shall be determined for each quarterly payment period by 
multiplying--
            ``(1) the market share of the manufacturer or importer, as 
        calculated with respect to that payment period, of the class of 
        tobacco product; by
            ``(2) the total amount of the assessment for that quarterly 
        payment period under subsection (c), for the class of tobacco 
        product.
    ``(f) Determination of Volume of Domestic Sales.--
            ``(1) In general.--The calculation of the volume of 
        domestic sales of a class of tobacco product by a manufacturer 
        or importer, and by all manufacturers and importers as a group, 
        shall be made by the Secretary based on information provided by 
        the manufacturers and importers pursuant to subsection (g), as 
        well as any other relevant information provided to or obtained 
        by the Secretary. The volume of domestic sales shall be 
calculated based on gross domestic volume.
            ``(2) Measurement.--For purposes of the calculations under 
        this subsection and the certifications under subsection (g) by 
        the Secretary, the volumes of domestic sales shall be measured 
        by--
                    ``(A) in the case of cigarettes, the numbers of 
                cigarettes;
                    ``(B) in the case of small cigars, the number of 
                cigars weighing not more than three pounds per 
                thousand;
                    ``(C) in the case of large cigars, the number of 
                cigars weighing more than three pounds per thousand; 
                and
                    ``(D) in the case of other classes of tobacco 
                products, in terms of number of pounds, or fraction 
                thereof, of these products.
    ``(g) Measurement of Volume of Domestic Sales.--
            ``(1) In general.--Each manufacturer and importer of 
        tobacco products shall submit to the Secretary a certified copy 
        of each of the returns or forms described by this paragraph 
        that are required to be filed with a Government agency on the 
        same date that those returns or forms are filed, or required to 
        be filed, with such agency. The returns and forms described by 
        this paragraph are those returns and forms related to the 
        release of tobacco products into domestic commerce, as defined 
        by section 5702(k) of the Internal Revenue Code of 1986 and the 
        payment of the taxes imposed under charter 52 of the Internal 
        Revenue Code of 1986, including AFT Form 5000.24 and United 
        States Customs Form 7501 under currently applicable 
        regulations.
            ``(2) Penalties.--Any person that knowingly fails to 
        provide information required under this subsection or that 
        provides false information under this subsection shall be 
        subject to the penalties described in section 1003 of title 18, 
        United States Code. In addition, the Secretary may assess 
        against the person a civil penalty in an amount not to exceed 2 
        percent of the value of the kind of tobacco products 
        manufactured or imported by such person during the applicable 
        fiscal year, as determined by the Secretary.
    ``(h) Assessment Notification; Content.--The Secretary shall 
provide each manufacturer or importer subject to an assessment under 
subsection (a) with written notice setting forth the amount to be 
assessed against such manufacturer or importer for the applicable 
quarterly period. The notice for a quarterly period shall be provided 
not later than 30 days before the date payment is due under subsection 
(c)(5). The notice shall include the following information with respect 
to such quarterly period used by the Secretary in calculating such 
amount:
            ``(1) The total combined assessment for all manufacturers 
        and importers of tobacco products.
            ``(2) The total assessment with respect to the class of 
        tobacco products manufactured or imported by such manufacturer 
        or importer.
            ``(3) Any adjustments to the percentage allocations among 
        the classes of tobacco products made pursuant to subsection 
        (c)(2).
            ``(4) The volume of gross sales of the applicable class of 
        tobacco product treated as made by such manufacturer or 
        importer for purposes of calculating such manufacturer's or 
        importer's market share under subsection (e).
            ``(5) The total volume of gross sales of the applicable 
        class of tobacco product that the Secretary treated as made by 
        all manufacturers and importers for purposes of calculating 
        such manufacturer's or importer's market share under subsection 
        (e).
            ``(6) Such manufacturer's or importer's market share of the 
        applicable class of tobacco product as determined by the 
        Secretary under subsection (e).
            ``(7) The market share, as determined by the Secretary 
        under subsection (e), of each other manufacturer and importer, 
        for each applicable class of tobacco product.
    ``(i) Challenge to Assessment.--
            ``(1) Appeal to secretary.--A manufacturer or importer 
        subject to this section may contest an assessment imposed on 
        such person pursuant to this section by notifying the Secretary 
        within 10 business days after receiving the assessment 
        notification required by subsection (h). Such manufacturer and 
        importer may place into escrow, in accordance with rules 
        promulgated by the Secretary, only the portion of the 
        assessment being challenged in good faith pending final 
        determination of the assessment under this subsection.
            ``(2) Procedure for appeal.--The Secretary shall by 
        regulation establish a procedure whereby a person contesting an 
        assessment pursuant to this subsection may present information 
        to the Secretary to demonstrate that such assessment is 
        incorrect, including information to demonstrate the following:
                    ``(A) The total combined assessment imposed by the 
                Secretary on all manufacturers and importers is 
                excessive.
                    ``(B) The Secretary's allocation of the total 
                assessment among the classes of tobacco products is 
                incorrect.
                    ``(C) The total volume of gross domestic sales of 
                all manufacturers and importers of the relevant class 
                of tobacco product calculated by the Secretary under 
                subsection (e) is incorrect.
                    ``(D) The level of gross domestic sales attributed 
                to such person by the Secretary for purposes of 
                calculating such person's market share under subsection 
                (e) exceeds such person's actual domestic sales of such 
                class of tobacco product.
                    ``(E) The amount of the assessment attributed to 
                such person by the Secretary exceeds such person's pro 
                rata share based on such person's share of gross 
                domestic sales.
            ``(3) Challenge.--In challenging an assessment under this 
        subsection, the manufacturer or importer may use any 
        information that is available, including third party data on 
        industry or individual company sales volumes. Such information 
        may constitute evidence sufficient to establish that the 
        Secretary's initial determination was incorrect, in which event 
        the assessment shall be revised so that the manufacturer or 
        importer is required only to pay the amount correctly 
        determined.
            ``(4) Time for review.--Within 30 days after receiving 
        notice from a manufacturer or importer under paragraph (2), the 
        Secretary shall decide whether the information provided to the 
        Secretary pursuant to such paragraph and any other information 
        which the Secretary determines is appropriate is sufficient to 
        establish that the original assessment was incorrect, and shall 
        make any revisions necessary to ensure that each manufacturer 
        and importer pays only its correct pro rata share of total 
        gross domestic volume from all sources.
            ``(5) Immediate payment of undisputed amounts.--The 
        regulations promulgated by the Secretary under paragraph (2) 
        shall provide for the immediate payment by a manufacturer or 
        importer challenging an assessment of such portion of the 
        assessment that is not in dispute.
            ``(6) Judicial review.--Any manufacturer or importer 
        aggrieved by a determination of the Secretary with respect to 
        the amount of any assessment may seek review of such 
        determination in the United States District Court for the 
        District of Columbia or for the district in which the 
        manufacturer or importer resides or has its principal place of 
        business at any time following exhaustion of the administrative 
        remedies under this subsection. Administrative remedies shall 
        be deemed exhausted if no decision by the Secretary is made 
        within the time limits under paragraph (4). The court shall 
        restrain collection of the excessive portion of any assessment 
        or order a refund of excessive assessments already paid, along 
        with interest calculated at the rate prescribed in section 3717 
        of title 31, United States Code, if it finds that the 
        Secretary's determination is not supported by a preponderance 
        of the information available to the Secretary.
            ``(7) Regulations.--The Secretary shall issue regulations 
        to implement this subsection within 6 months after the date of 
        the enactment of this Act.
    ``(j) Termination Date.--The authority provided by this section 
terminates on September 30, 2011.

``SEC. 380U. COMMODITY CREDIT CORPORATION.

    The Secretary shall use the funds, facilities, and authorities of 
the Commodity Credit Corporation to carry out this subtitle, to remain 
available until expended.

``SEC. 380V. TRANSITION PROVISIONS.

    ``(a) Tobacco Stocks.--
            ``(1) In general.--To provide for the orderly disposition 
        of quota tobacco held by an association that has entered into a 
        loan agreement with the Commodity Credit Corporation under 
        section 106A or 106B of the Agricultural Act of 1949 (7 U.S.C. 
        1445-1, 1445-2) (referred to in this section as an 
        `association'), loan pool stocks for each kind of tobacco held 
        by the association shall be disposed of in accordance with this 
        subsection.
            ``(2) Associations.--For each kind of tobacco held by an 
        association, the proportion of loan pool stocks for each kind 
        of tobacco held by the association that shall be transferred to 
        the association shall be equal to--
                    ``(A) the amount of funds held by the association 
                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, for the kind of tobacco; divided 
                by
                    ``(B) the average list price per pound for the kind 
                of tobacco, as determined by the Secretary.
            ``(3) Commodity credit corporation.--Any loan pool stocks 
        of a kind of tobacco of an association that are not disposed of 
        in accordance with paragraph (2) shall be--
                    ``(A) transferred by the association to the 
                Commodity Credit Corporation;
                    ``(B) disposed of in a manner determined by the 
                Secretary; and
                    ``(C) should any loss be incurred by the disposals 
                described in subparagraph (B), these losses shall first 
                be paid by the association for that kind of tobacco to 
                the extent of the revenue received from the sale of 
                tobacco transferred to the association pursuant to 
                paragraph (2).
    ``(b) No Net Cost Funds.--
            ``(1) In general.--Any funds in the No Net Cost Tobacco 
        Fund or the No Net Cost Tobacco Account of an association 
        established under sections 106A and 106B of the Agricultural 
        Act of 1949 (7 U.S.C. 1445-1, 1445-2), respectively, that 
        remain after the application of subsection (a) and sections 
        106A and 106B of the Agricultural Act of 1949 (7 U.S.C. 1445, 
        1445-1) (as in effect on the day before the date of the 
        enactment of the Tobacco Reduction, Accountability, and 
Community Enhancement Act of 2003) shall be transferred to the 
association for distribution to members of the association in 
accordance with a plan approved by the Secretary.
            ``(2) Associations with no loan pool stocks.--In the case 
        of an association that does not hold any loan pool stocks that 
        are covered by subsection (a)(2), any funds in the No Net Cost 
        Tobacco Fund or the No Net Cost Tobacco Account of the 
        association established under sections 106A and 106B of the 
        Agricultural Act of 1949 (7 U.S.C. 1445-1, 1445-2), 
        respectively, shall be transferred to the association for 
        distribution to members of the association in accordance with a 
        plan approved by the Secretary.''.
    (b) Conforming Amendments.--Section 320B(c)(1) of the Agricultural 
Adjustment Act of 1938 (7 U.S.C. 1314h(c)(1)) is amended--
            (1) by inserting ``(A)'' after ``(1)'';
            (2) by striking ``by'' at the end and inserting ``or''; and
            (3) by adding at the end the following:
            ``(B) in the case of the 2003 marketing year, the price 
        support rate for the kind of tobacco involved in effect under 
        section 106 of the Agricultural Act of 1949 (7 U.S.C. 1445) at 
        the time of the violation; by''.

SEC. 6. REGULATIONS.

    (a) In General.--In accordance with the notice and comment 
provisions of section 533 of title 5, United States Code, the Secretary 
of Agriculture may promulgate such regulations as are necessary to 
implement this Act and the amendments made by this Act.
    (b) Procedure.--The promulgation of the regulations and 
administration of this Act and the amendments made by this Act shall be 
made without regard to chapter 35 of title 44, United States Code 
(commonly known as the ``Paperwork Reduction Act'').
    (c) Congressional Review of Agency Rulemaking.--In carrying out 
this section, the Secretary shall use the authority provided under 
section 808 of title 5, United States Code.

SEC. 7. SEVERABILITY.

    If any provision of this Act or the application of any provision of 
this Act to any person or circumstance is held to invalid, the 
remainder of this Act and the application of the provisions of the Act 
to any other person or circumstance shall not be affected thereby and 
shall continue to be enforced to the fullest extent possible.

SEC. 8. EFFECTIVE DATE.

    This Act and the amendments made by this Act shall apply to the 
2004 and subsequent crops of each kind of tobacco.
                                 <all>