[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 1490 Placed on Calendar Senate (PCS)]

<DOC>





                                                       Calendar No. 264
108th CONGRESS
  1st Session
                                S. 1490

To eliminate the Federal quota and price support programs for tobacco, 
to provide assistance to quota holders, tobacco producers, and tobacco-
             dependent communities, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                July 30 (legislative day, July 21), 2003

 Mr. McConnell (for himself, Mrs. Dole, Mr. Bunning, Mr. Hollings, Mr. 
 Edwards, Mr. Miller, Mr. Frist, Mr. Warner, Mr. Allen, Mr. Chambliss, 
 Mr. Graham of South Carolina, Mr. Alexander, and Mr. Bayh) introduced 
           the following bill; which was read the first time

                           September 2, 2003

            Read the second time and placed on the calendar

_______________________________________________________________________

                                 A BILL


 
To eliminate the Federal quota and price support programs for tobacco, 
to provide assistance to quota holders, tobacco producers, and tobacco-
             dependent communities, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Tobacco Market 
Transition Act of 2003''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
            TITLE I--TERMINATION OF CURRENT TOBACCO PROGRAMS

Sec. 101. Termination of tobacco production adjustment programs.
Sec. 102. Termination of tobacco price support program.
Sec. 103. Liability.
                      TITLE II--TOBACCO ASSISTANCE

Sec. 201. Tobacco assistance.
                    ``Subtitle E--Tobacco Assistance

        ``Sec. 380A. Definitions.
    ``Chapter 1--Payments To Tobacco Quota Holders and Traditional 
                               Producers

        ``Sec. 380B. Transition payments to tobacco quota holders.
        ``Sec. 380C. Direct payments to traditional producers of 
                            tobacco.
        ``Sec. 380D. Administration.
               ``Chapter 2--Tobacco Quality and Quantity

        ``Sec. 380G. Tobacco Quality Board.
        ``Sec. 380H. Production Boards.
        ``Sec. 380I. Acreage limitation program.
             ``Chapter 3--Tobacco Market Stability Program

        ``Sec. 380M. Tobacco market stability program.
       ``Chapter 4--Tobacco Community Economic Development Grants

        ``Sec. 380O. Tobacco community economic development grants.
          ``Chapter 5--Competitive Grants for Tobacco Research

        ``Sec. 380Q. Competitive grants for tobacco research.
                          ``Chapter 6--Funding

        ``Sec. 380S. Tobacco Trust Fund.
        ``Sec. 380T. Assessments.
        ``Sec. 380U. Commodity Credit Corporation.
        ``Sec. 380V. Transition provisions.
Sec. 202. Conforming amendments.
                       TITLE III--IMPLEMENTATION

Sec. 301. Regulations.
Sec. 302. Effective date.

            TITLE I--TERMINATION OF CURRENT TOBACCO PROGRAMS

SEC. 101. TERMINATION OF TOBACCO PRODUCTION ADJUSTMENT PROGRAMS.

    (a) Tobacco Statistics.--The Act of January 14, 1929 (45 Stat. 
1079; 7 U.S.C. 501 et seq.) is repealed.
    (b) Tobacco Standards.--The Tobacco Inspection Act (7 U.S.C. 511 et 
seq.) is repealed.
    (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''.
    (v) Tobacco Field Measurement.--Section 1112 of the Omnibus Budget 
Reconciliation Act of 1987 (Public Law 100-203) is amended by striking 
subsection (c).

SEC. 102. 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. 103. LIABILITY.

    This title and the amendments made by this title shall not affect 
the liability of any person under any provision of law with respect to 
any crop of tobacco planted before the effective date prescribed in 
section 402.

                      TITLE II--TOBACCO ASSISTANCE

SEC. 201. TOBACCO ASSISTANCE.

    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 producer of tobacco.--The term `active 
        producer 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 2009.
            ``(3) Base period.--The term `base period' means the 1-year 
        period ending the June 30 preceding each applicable fiscal 
        year.
            ``(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) Impacted county.--The term `impacted county' means a 
        county in an eligible State in which tobacco producers have 
        sustained a reduction in gross receipts from the sale of 
        tobacco for the base period for the applicable fiscal year, as 
        compared to the base period for fiscal year 2002.
            ``(8) 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.
            ``(9) Production board.--The term `Production Board' means 
        a Production Board established for a kind of tobacco under 
        section 380H.
            ``(10) 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 years 
        under a marketing quota or allotment program established under 
        part I of subtitle B (as in effect before the effective date of 
        this subtitle).
            ``(11) 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.
            ``(12) Tobacco quality board.--The term `Tobacco Quality 
        Board' means the Tobacco Quality Board established under 
        section 380G.
            ``(13) Tobacco quota holder.--The term `tobacco quota 
        holder' means a person that is considered an tobacco quota 
        holder under section 380B(b).
            ``(14) Tobacco trust fund.--The term `Tobacco Trust Fund' 
        means the Tobacco Trust Fund established under section 380S.
            ``(15) 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 
                (as in effect before the effective date of this 
                subtitle); and
                    ``(B) shared in the risk of producing the tobacco.
            ``(16) Traditional tobacco county.--
                    ``(A) In general.--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 
                marketing years described in paragraph (15).
                    ``(B) Inclusion.--For the purpose of determining 
                the crop acreage base of an active producer of tobacco 
                for a kind of tobacco produced in the State of Georgia 
                under section 380I(c)(3), the term `traditional tobacco 
                county' includes a county that is contiguous to a 
                county described in subparagraph (A).

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

``SEC. 380B. TRANSITION PAYMENTS TO TOBACCO QUOTA HOLDERS.

    ``(a) In General.--The Secretary shall make transition payments 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 (as in effect before the effective 
        date of this subtitle).
            ``(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 that number of permanent pounds 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.--
            ``(1) In general.--To be eligible to receive a payment 
        under this section, a person shall submit to the Secretary an 
        application containing such information as the Secretary may 
        require to demonstrate to the satisfaction of the Secretary 
        that the person is a tobacco quota holder.
            ``(2) Administration.--The application shall be submitted 
        within such time, in such form, and in such manner as the 
        Secretary may require.
    ``(d) Base Quota Level.--
            ``(1) In general.--The Secretary shall establish a base 
        quota level applicable to each tobacco quota holder, as 
        determined under this subsection.
            ``(2) Level.--The base quota level for each tobacco quota 
        holder shall be equal to the basic tobacco marketing quota 
        under part I of subtitle B (as in effect before the effective 
        date of this subtitle) for the 2002 marketing year for quota 
        tobacco on the farm owned by the tobacco quota holder.
    ``(e) Payment.--The Secretary shall make payments to each tobacco 
quota holder under subsection (b) in an amount obtained by 
multiplying--
            ``(1)(A) for fiscal year 2004, $1.60 per pound;
            ``(B) for fiscal year 2005, $1.50 per pound;
            ``(C) for fiscal year 2006, $1.40 per pound;
            ``(D) for fiscal year 2007, $1.30 per pound;
            ``(E) for fiscal year 2008, $1.20 per pound; and
            ``(F) for fiscal year 2009, $1.00 per pound; by
            ``(2) the base quota level established for the quota holder 
        under subsection (d).
    ``(f) Time for Payment.--The payments to tobacco quota holders 
required under this section shall be made by, to the maximum extent 
practicable, the date that is 180 days after the date of enactment of 
this subtitle, November 1, 2004, and each November 1 thereafter through 
November 1, 2008, for each of fiscal years 2004 through 2009, as 
applicable.

``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) Eligibility.--
            ``(1) In general.--To be eligible to receive a payment 
        under this section, a person shall submit to the Secretary an 
        application containing such information as the Secretary may 
        require to demonstrate to the satisfaction of the Secretary 
        that the person is a traditional producer of tobacco.
            ``(2) Administration.--The application shall be submitted 
        within such time, in such form, and in such manner as the 
        Secretary may require.
    ``(c) Base Quota Level.--
            ``(1) In general.--The Secretary shall establish a base 
        quota level applicable to each traditional producer of tobacco, 
        as determined under this subsection.
            ``(2) Flue-cured and burley tobacco.--In the case of Flue-
        cured tobacco (types 11, 12, 13, and 14) and Burley tobacco 
        (type 31), the base quota level for each tobacco quota holder 
        shall be equal to the effective tobacco marketing quota 
        (irrespective of disaster lease and transfers) under part I of 
        subtitle B (as in effect before the effective date of this 
        subtitle) for the 2002 marketing year for quota tobacco 
        produced on the farm.
            ``(3) Other kinds of tobacco.--In the case of each kind of 
        tobacco other than Flue-cured tobacco (types 11, 12, 13, and 
        14) and Burley tobacco (type 31), for the purpose of 
        calculating a payment to a traditional producer of tobacco, the 
        base quota level for the traditional producer of tobacco shall 
        be the quantity obtained by multiplying--
                    ``(A) the basic tobacco farm acreage allotment for 
                the 2002 marketing year established by the Secretary 
                for quota tobacco produced on the farm; by
                    ``(B) the actual yield of the crop of quota tobacco 
                produced on the farm.
    ``(d) Payment.--
            ``(1) In general.--Subject to paragraph (2), the Secretary 
        shall make payments to each traditional producer of tobacco, as 
        determined under subsection (b), in an amount obtained by 
        multiplying--
                    ``(A)(i) for fiscal year 2004, 75 cents per pound;
                    ``(ii) for fiscal year 2005, 75 cents per pound;
                    ``(iii) for fiscal year 2006, 70 cents per pound;
                    ``(iv) for fiscal year 2007, 65 cents per pound;
                    ``(v) for fiscal year 2008, 60 cents per pound; and
                    ``(vi) for fiscal year 2009, 55 cents per pound; by
                    ``(B) the base quota level established for the 
                traditional producer of tobacco under subsection (c).
            ``(2) Payment rate.--The rate for payments to a traditional 
        producer of quota tobacco under paragraph (1)(A) shall be equal 
        to--
                    ``(A) in the case of a person that produced quota 
                tobacco marketed, or considered planted, under a 
                marketing quota for all 3 of the 2000, 2001, and 2002 
                tobacco marketing years, the rate prescribed under 
                paragraph (1)(A) for the applicable fiscal year;
                    ``(B) in the case of a person that produced quota 
                tobacco marketed, or considered planted, under a 
                marketing quota for not more than 2 of the 2000, 2001, 
                and 2002 tobacco marketing years, \2/3\ of the rate 
                prescribed under paragraph (1)(A) for the applicable 
                fiscal year; and
                    ``(C) in the case of a person that produced quota 
                tobacco marketed, or considered planted, under a 
                marketing quota for not more than 1 of the 2000, 2001, 
                and 2002 tobacco marketing years, \1/3\ of the rate 
                prescribed under paragraph (1)(A) for the applicable 
                fiscal year.
    ``(e) Time for Payment.--The payments to traditional producers of 
tobacco required under this section shall be made by, to the maximum 
extent practicable, the date that is 180 days after the date of 
enactment of this subtitle, November 1, 2004, and each November 1 
thereafter through November 1, 2008, for each of fiscal years 2004 
through 2009, as applicable.

``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 QUALITY BOARD.

    ``(a) In General.--The Secretary shall establish a permanent 
advisory board within the Department, to be known as the `Tobacco 
Quality Board'.
    ``(b) Membership.--
            ``(1) In general.--The Tobacco Quality Board shall consist 
        of 13 members, of which--
                    ``(A) 5 members shall be appointed by the Secretary 
                from nominations submitted by representatives of 
                tobacco producers in the United States, including at 
                least--
                            ``(i) 1 representative of Flue-cured 
                        tobacco producers;
                            ``(ii) 1 representative of Burley tobacco 
                        producers; and
                            ``(iii) 1 representative of dark fire-cured 
                        tobacco producers;
                    ``(B) 5 members shall be appointed by the Secretary 
                from nominations submitted by representatives of 
                tobacco product manufacturers in the United States, 
                including at least--
                            ``(i) 1 representative of smokeless tobacco 
                        product manufacturers; and
                            ``(ii) 1 representative of export dealers 
                        of tobacco and tobacco products; and
                    ``(C) 3 at-large members shall be appointed by the 
                Secretary, including at least 1 officer or employee of 
                the Department.
            ``(2) Chairperson.--The Secretary shall appoint the 
        chairperson of the Tobacco Quality Board, with a different 
        member serving as chairperson of the Tobacco Quality Board each 
        term.
            ``(3) Terms.--Each member of the Tobacco Quality Board 
        shall serve for 2-year terms, except that the terms of the 
        members first appointed to the Tobacco Quality Board shall be 
        staggered so as to establish a rotating membership of the 
        Tobacco Quality Board, as determined by the Secretary.
    ``(c) Duties.--The Tobacco Quality Board shall--
            ``(1) determine and describe the physical characteristics 
        of tobacco produced in the United States and unmanufactured 
        tobacco imported into the United States;
            ``(2) assemble and evaluate, in a systematic manner, 
        concerns and problems with the quality 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 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) investigate and communicate to the Secretary--
                    ``(A) conditions with respect to the production 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;
            ``(5) conduct oversight regarding tobacco marketing issues 
        (such as opening sales dates and marketing regulations) 
        applicable to auction markets;
            ``(6) provide assistance to Federal agencies on actions 
        taken by the Federal agencies that affect the quality or 
        quantity of tobacco produced in the United States;
            ``(7) not later than a date determined by the Secretary, 
        make recommendations to the Secretary, and the applicable 
        Production Board established for the kind of tobacco, on the 
        range of base years for the maximum crop acreage base under 
        section 380I(c)(3)(B) for each crop of each kind of tobacco, 
        except that the range of base years shall be the crop years for 
        the 1998 through 2002 crops unless otherwise determined by the 
        Tobacco Quality Board; and
            ``(8) carry out such other related activities as are 
        assigned to the Tobacco Quality Board by the Secretary.
    ``(d) Administration.--The Secretary shall provide the Tobacco 
Quality Board 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 
        Tobacco Quality Board to perform the duties of the Tobacco 
        Quality Board under this subtitle, including information 
        concerning acreage devoted to the production of each kind of 
        tobacco.
    ``(e) Applicability of Federal Advisory Committee Act.--The Federal 
Advisory Committee Act (5 U.S.C. App.) shall not apply to the Tobacco 
Quality Board.

``SEC. 380H. PRODUCTION BOARDS.

    ``(a) In General.--The Secretary shall establish a permanent 
advisory board for each kind of tobacco, to be known as a `Production 
Board'.
    ``(b) Membership.--
            ``(1) In general.--Subject to paragraph (2), a Production 
        Board for a kind of tobacco shall consist of--
                    ``(A) not more than 10 members appointed by the 
                Secretary from nominations submitted by representatives 
                of producers of that kind of tobacco in the United 
                States; and
                    ``(B) 1 officer or employee of the Department 
                appointed by the Secretary.
            ``(2) Allocation of membership.--In appointing members to a 
        Production Board established for a kind of tobacco, the number 
        of members appointed by the Secretary to represent each State 
        shall, to the maximum extent practicable, bear the same ratio 
        to the total number of members of the Production 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.
            ``(3) Chairperson.--The Secretary shall appoint the 
        chairperson of a Production Board, with a different member 
        serving as chairperson of the Production Board each term.
            ``(4) Terms.--Each member of a Production Board shall serve 
        for 2-year terms, except that the terms of the members first 
        appointed to the Production Board shall be staggered so as to 
        establish a rotating membership of the Production Board, as 
        determined by the Secretary.
    ``(c) Duties.--A Production Board established for a kind of tobacco 
shall--
            ``(1) not later than a date determined by the Secretary, 
        make recommendations to the Secretary on the base year, within 
        the range of base years recommended by the Tobacco Quality 
        Board under section 380G(c)(7), for the maximum crop acreage 
        base under section 380I(c)(3)(B) for each crop of each kind of 
        tobacco; and
            ``(2) carry out such other related activities as are 
        assigned to the Production Board by the Secretary.
    ``(d) Administration.--The Secretary shall provide each Production 
Board established for a kind of tobacco with (as determined by the 
Secretary)--
            ``(1) a staff that is knowledgeable about production and 
        marketing of that kind of tobacco; and
            ``(2) other resources and information necessary for the 
        Production Board to perform the duties of the Production Board 
        under this subtitle, including information concerning acreage 
        devoted to the production of each kind of tobacco.
    ``(e) Applicability of Federal Advisory Committee Act.--The Federal 
Advisory Committee Act (5 U.S.C. App.) shall not apply to a Production 
Board.

``SEC. 380I. ACREAGE LIMITATION PROGRAM.

    ``(a) Definitions.--In this section:
            ``(1) Crop acreage base.--The term `crop acreage base' 
        means the crop acreage base for a kind of tobacco for a crop 
        for an active producer of tobacco, as determined by the 
        Secretary under subsection(c)(3).
            ``(2) Permitted acreage.--The term `permitted acreage' 
        means the number of acres devoted to the production of a kind 
        of tobacco consistent with the annual acreage limitation 
        program announced by the Secretary for the kind of tobacco, as 
        determined by the Secretary.
    ``(b) Announcement.--
            ``(1) In general.--The Secretary (in consultation with the 
        Tobacco Quality Board and the applicable Production Board) 
        shall establish and maintain an acreage limitation program for 
        each crop of each kind of tobacco.
            ``(2) Supply.--In establishing and carrying out an acreage 
        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 an acreage limitation program, 
        will be excessive, taking into account the need for an adequate 
        carry-over to maintain reasonable and stable supplies and 
        prices.
            ``(3) Deadline.--The Secretary (in consultation with the 
        Tobacco Quality Board and the applicable Production Board) 
        shall announce the annual acreage limitation program for each 
        kind of tobacco not later than December 15 of the calendar year 
        preceding the year in which the crop is harvested, except that 
        in the case of the 2004 crop, the Secretary shall announce the 
        program as soon as practicable after the date of enactment of 
        this section.
    ``(c) Program.--
            ``(1) In general.--Under an acreage limitation program for 
        a kind of tobacco announced under subsection (b), the 
        limitation shall be achieved by applying a uniform percentage 
        reduction to the crop acreage base for the kind of tobacco for 
        the crop for active producers of tobacco that produce that kind 
        of tobacco, as determined by the Secretary.
            ``(2) Compliance.--
                    ``(A) Loans, purchases, or payments.--A producer 
                that knowingly produces a kind of tobacco in excess of 
                the permitted acreage for the kind of tobacco, or 
                violate any lease or transfer requirements of this Act, 
                shall be ineligible for any loans, purchases, or 
                payments for the kind of tobacco.
                    ``(B) Penalties.--
                            ``(i) Criminal penalty.--A producer 
                        described in subparagraph (A) shall be fined 
                        not more than $100,000 or imprisoned not more 
                        than 2 years, or both.
                            ``(ii) Civil penalty.--A producer described 
                        in subparagraph (A) shall be subject to 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 applicable crop year, 
                        as determined by the Secretary.
                            ``(iii) Additional penalties.--A civil 
                        penalty under clause (ii) for a violation shall 
                        be in addition to any criminal penalty under 
                        clause (i) for the violation.
                    ``(C) Jurisdiction to prevent and restrain 
                violations.--A United States district court shall have 
                jurisdiction to prevent and restrain the a producer 
                from producing a kind of tobacco in excess of the 
                permitted acreage for the kind of tobacco.
            ``(3) Crop acreage bases.--
                    ``(A) In general.--Subject to subparagraphs (B) 
                through (D) and paragraph (4), the crop acreage base 
                for an active producer of tobacco for a crop of each 
                kind of tobacco shall equal the number of acres that is 
                equal to--
                            ``(i) in the case of the 2004 crop year, 
                        the average of the acreage planted and 
                        considered planted by the active producer of 
                        tobacco to the kind of tobacco for harvest in a 
                        traditional tobacco county in each of the 5 
                        crop years preceding the crop year, as 
                        determined and adjusted by the Secretary (in 
                        consultation with the Tobacco Quality Board and 
                        the applicable Production Board); and
                            ``(ii) in the case of each subsequent crop 
                        year, the number of acres planted and 
                        considered planted by the active producer of 
                        tobacco to the kind of tobacco for harvest in a 
                        traditional tobacco county in the preceding 
                        crop year, as determined and adjusted by the 
                        Secretary (in consultation with the Tobacco 
                        Quality Board and the applicable Production 
                        Board).
                    ``(B) Maximum crop acreage bases.--
                            ``(i) In general.--Subject to clause (ii), 
                        the total quantity of acreage devoted to a kind 
                        of tobacco by active producers of tobacco 
                        during a crop year shall not exceed the total 
                        quantity of acreage devoted to the kind of 
                        tobacco by active producers during a crop year 
                        determined by the Secretary.
                            ``(ii) Adjustment.--If the active producers 
                        of a kind of tobacco demonstrate to the 
                        Secretary that the application of clause (i) to 
                        a crop of a kind of tobacco will result in 
                        unbalanced supply and demand conditions, the 
                        Secretary may adjust the total quantity of 
                        acreage that may be devoted to the kind of 
                        tobacco by active producers during the crop 
                        year.
                    ``(C) Sale, lease, or transfer of crop acreage 
                bases.--An active producer of tobacco shall not sell, 
                lease, or transfer to another person a crop acreage 
                base established for the active producer of tobacco 
                under this paragraph.
                    ``(D) Reallocation of unused crop acreage bases.--
                            ``(i) County pool.--Subject to clauses (ii) 
                        and (iii), if an active producer of tobacco 
                        with a crop acreage base for a kind of tobacco 
                        elect not to use all or part of the crop 
                        acreage base to continue to produce that kind 
                        of tobacco, the unused crop acreage base shall 
                        be placed in a pool established for the 
                        traditional tobacco county for reallocation by 
                        the Secretary to other producers of that kind 
                        of tobacco in the traditional tobacco county 
                        that request the crop acreage base.
                            ``(ii) State pool.--Subject to clause 
                        (iii), if any crop acreage base for a kind of 
                        tobacco remains after the crop acreage base is 
                        made available to producers of that kind of 
                        tobacco in the traditional tobacco county in a 
                        State under clause (i), the unused crop acreage 
                        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 a 
                        traditional tobacco county.
                            ``(iii) New producers.--In reallocating 
                        unused crop acreage bases for a kind of tobacco 
                        in a traditional tobacco county made available 
                        under each of clauses (i) and (ii), 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 acreage bases available for 
                        reallocation for the kind of tobacco in the 
                        traditional tobacco county.
            ``(4) Compliance with certain requirements.--As a condition 
        of the establishment of a crop acreage base for active 
        producers of tobacco for a crop of a kind of tobacco, the 
        active producers of tobacco shall agree, during the crop year 
        for which the crop acreage base is established--
                    ``(A) 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.);
                    ``(B) to comply with applicable wetland protection 
                requirements under subtitle C of title XII of the Act 
                (16 U.S.C. 3821 et seq.);
                    ``(C) to use the land of the active producer of 
                tobacco, in a quantity equal to the crop acreage base 
                for an agricultural or conserving use, and not for a 
                nonagricultural commercial or industrial use, as 
                determined by the Secretary; and
                    ``(D) 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 subparagraph (C).

              ``CHAPTER 3--TOBACCO MARKET STABILITY PROGRAM

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

    ``(a) In General.--If during any consecutive 4-week period of a 
marketing year the world 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, in consultation with the Tobacco 
Quality Board and the applicable Production Board), the Secretary shall 
make available to active producers of tobacco on a farm of the crop of 
the 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 acreage for the active producer of 
        tobacco (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 world price for the crop; exceeds
                    ``(B) the domestic price for the crop.
            ``(2) World prices.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the world price for each crop of a 
                kind of tobacco under this section shall be determined 
                by Secretary (in consultation with the Tobacco Quality 
                Board and the applicable Production Board).
                    ``(B) Minimum price.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), the world price for each crop of a 
                        kind of tobacco under this section shall be not 
                        less than $1.00 per pound.
                            ``(ii) Reduction.--The Secretary (in 
                        consultation with the Tobacco Quality Board and 
                        the applicable Production Board) may reduce the 
                        world price for a crop of a kind of tobacco 
                        under this section below the amount specified 
                        in clause (i) if the Secretary determines that 
                        such a reduction 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, in consultation with the Tobacco Quality Board and 
        the applicable Production Board.
    ``(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 (in consultation with the Tobacco Quality Board) 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) Adjustments.--After the Secretary announces the terms and 
conditions of the tobacco market stability program for a crop year, the 
Secretary shall consult with the Tobacco Quality Board and the 
applicable Production Board before making any change to the program for 
the crop year.
    ``(f) Additional Coverage.--The Secretary may offer additional 
coverage to active producers of tobacco 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 producers of tobacco on the 
farm, in exchange for an additional premium paid by the active 
producers of tobacco on the farm.
    ``(g) 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) and 
        section 380S(c)(1)(C), each producer and purchaser of that kind 
        of tobacco shall remit to the Commodity Credit Corporation a 
        nonrefundable marketing assessment in an amount determined by 
        the Secretary that is sufficient to provide the payments for 
        that kind of tobacco.
            ``(2) Amount.--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, to the maximum 
                extent practicable, in paying assessments required 
                under this subsection; and
                    ``(B) shall not exceed 5 cents per pound.
    ``(3) 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 before 
        the effective date of this subtitle), 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 before the effective date 
        of this subtitle), as applicable.
    ``(4) Enforcement.--The Secretary may enforce this subsection in 
the courts of the United States.

       ``CHAPTER 4--TOBACCO COMMUNITY ECONOMIC DEVELOPMENT GRANTS

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

    ``(a) In General.--The Secretary shall make grants to eligible 
States in accordance with this section to pay the Federal share of the 
cost of carrying out economic development initiatives in impacted 
counties.
    ``(b) Application.--To be eligible to receive payments under this 
section, an eligible State shall prepare and submit to the Secretary an 
application at such time, in such manner, and containing such 
information as the Secretary may require, including--
            ``(1) a description of the activities that the eligible 
        State will carry out using amounts received under the grant;
            ``(2) a designation of an appropriate State agency to 
        administer amounts received under the grant; and
            ``(3) a description of the steps to be taken to ensure that 
        the funds are distributed in accordance with subsection (e).
    ``(c) Amount of Grant.--From the amounts available to carry out 
this section for an applicable fiscal year, the Secretary shall allot 
to each eligible State an amount that bears the same ratio to the 
amounts available as--
            ``(1) the reduction in gross receipts from the sale of 
        tobacco by tobacco producers in the eligible State for the base 
        period for the applicable fiscal year as compared to the base 
        period for fiscal year 2002; bears to
            ``(2) the reduction in gross receipts from the sale of 
        tobacco by tobacco producers in all eligible States for the 
        base period for the applicable fiscal year as compared to the 
        base period for fiscal year 2002.
    ``(d) Payments.--
            ``(1) In general.--An eligible State that has an 
        application approved by the Secretary under subsection (b) 
        shall be entitled to a payment under this section in an amount 
        that is equal to its allotment under subsection (c).
            ``(2) Form of payments.--The Secretary may make payments 
        under this section to an eligible State in installments, and in 
        advance or by way of reimbursement, with necessary adjustments 
        on account of overpayments or underpayments, as the Secretary 
        may determine.
            ``(3) Reallocation.--Any portion of the allotment of an 
        eligible State under subsection (c) that the Secretary 
        determines will not be used to carry out this section in 
        accordance with an approved State application required under 
        subsection (a) shall be reallocated by the Secretary to other 
        eligible States in proportion to the original allotments to the 
        other eligible States.
    ``(e) Use and Distribution of Funds.--
            ``(1) In general.--Amounts received by an eligible State 
        under this section shall be used to carry out economic 
        development activities, including--
                    ``(A) rural business enterprise activities that are 
                similar to activities described in subsections (c) and 
                (e) of section 310B of the Consolidated Farm and Rural 
                Development Act (7 U.S.C. 1932);
                    ``(B) down payment loan assistance activities that 
                are similar to activities described in section 310E of 
                the Consolidated Farm and Rural Development Act (7 
                U.S.C. 1935);
                    ``(C) activities designed to help create productive 
                farm or off-farm employment in rural areas to provide a 
                more viable economic base and enhance opportunities for 
                improved incomes, living standards, and contributions 
                by rural individuals to the economic and social 
                development of impacted counties;
                    ``(D) activities that expand existing 
                infrastructure, facilities, and services to capitalize 
                on opportunities to diversify economies in impacted 
                counties and that support the development of new 
                industries or commercial ventures;
                    ``(E) initiatives designed to create or expand 
                locally owned value-added processing and marketing 
                operations in impacted counties for agricultural 
                commodities and products; and
                    ``(F) technical assistance activities by persons to 
                support farmer-owned enterprises, or agriculture-based 
                rural development enterprises, that are similar to 
                enterprises described in section 252 or 253 of the 
                Trade Act of 1974 (19 U.S.C. 2342, 2343).
            ``(2) Distribution.--
                    ``(A) Economic development activities.--Not less 
                than 20 percent of the amounts received by an eligible 
                State under this section shall be used to carry out--
                            ``(i) economic development activities 
                        described in subparagraph (C) or (D) of 
                        paragraph (1); or
                            ``(ii) agriculture-based rural development 
                        activities described in paragraph (1)(E).
                    ``(B) Technical assistance activities.--Not less 
                than 10 percent of the amounts received by an eligible 
                State under this section shall be used to carry out 
                technical assistance activities described in paragraph 
                (1)(F).
                    ``(C) Impacted counties.--To be eligible to receive 
                payments for a fiscal year under this section, an 
                eligible State shall demonstrate to the Secretary that 
                funding will be provided, during the fiscal year, for 
                activities in each impacted county in the eligible 
                State, in amounts that provide the greatest amount of 
                funding for impacted counties that have sustained the 
                highest percentage reduction in gross receipts from the 
                sale of tobacco for the base period for the applicable 
                fiscal year, as compared to the base period for fiscal 
                year 2002.
    ``(f) Preferences in Hiring.--An eligible State may require 
recipients of funds under this section to provide a preference in 
employment to an individual who, during fiscal year 2003, was employed 
in the production, manufacture, processing, or warehousing of tobacco 
or tobacco products, or resided, in an impacted county described in 
subsection (e)(2).
    ``(g) Federal Share.--A grant provided under this section shall be 
for not more than 75 percent of the cost of carrying out activities 
described in subsection (e).

          ``CHAPTER 5--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 6--FUNDING

``SEC. 380S. TOBACCO TRUST FUND.

    ``(a) Establishment.--There is established in the Commodity Credit 
Corporation a revolving trust fund to be used in carrying out this 
subtitle (referred to in this section as the `Fund'), consisting 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 under chapter 1;
                    ``(B) to pay necessary expenses of the Tobacco 
                Quality Board and Production Boards and to carry out 
                the acreage limitation program under chapter 2;
                    ``(C) in addition to funds made available under 
                section 380M(g), to carry out the tobacco market 
                stability program under chapter 3, in an amount equal 
                to $100,000,000 for each of fiscal years 2005 through 
                2009;
                    ``(D) to make tobacco community economic 
                development grants under chapter 4, in an amount equal 
                to $100,000,000 for each of fiscal years 2005 through 
                2009;
                    ``(E) to make competitive grants for tobacco 
                research under chapter 5, in an amount equal to 
                $12,000,000 for each of fiscal years 2005 through 2009;
                    ``(F) 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 before the effective date of this subtitle) 
                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 tobacco marketed by each 
                association, in an amount not to exceed $1,500,000 for 
                each association for each kind of tobacco for each of 
                fiscal years 2004 through 2008;
                    ``(G) to pay administrative costs incurred by the 
                Secretary in carrying out this subtitle; and
                    ``(H) to 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, 2010, 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).

``SEC. 380T. ASSESSMENTS.

    ``(a) Annual Assessment.--The Secretary, acting through the 
Commodity Credit Corporation, shall impose an annual assessment, 
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) Annual Assessment for Each Class of Tobacco Product.--
            ``(1) Total amount.--The total amount to be assessed, and 
        paid by, the manufacturers and importers of tobacco products 
        shall be a total of $13,000,000,000 for all applicable fiscal 
        years.
            ``(2) Annual allocation by class of tobacco products.--
        Subject to paragraphs (3) and (4), the percentage of the total 
        amount to be assessed, 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.
            ``(3) Adjustments.--Subject to paragraph (4), the Secretary 
        may adjust the percentage of the total amount to be assessed, 
        and paid by, the manufacturers and importers of a class of 
        tobacco product for an applicable fiscal year to reflect 
        changes in the relative market share of each class of tobacco 
        products.
            ``(4) Minimum amount.--The total amount to be assessed, and 
        paid by, the manufacturers and importers of each class of 
        tobacco product in each applicable fiscal year shall not be 
        less than the amount required to carry out this subtitle during 
        the applicable fiscal year, as determined by the Secretary.
    ``(d) 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 applicable fiscal year by 
multiplying--
            ``(1) the market share of the manufacturer or importer, as 
        calculated with respect to the applicable fiscal year, of the 
        class of tobacco product; by
            ``(2) the total amount of the assessment for the applicable 
        fiscal year, under subsection (c), for the class of tobacco 
        product.
    ``(e) 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 certified reports 
        submitted by the manufacturers and importers pursuant to 
        subsection (f).
            ``(2) Measurement.--For purposes of the calculations under 
        this subsection and the certifications under subsection (f) by 
        the Secretary, the volumes of domestic sales shall be measured 
        by--
                    ``(A) in the case of cigarettes, the numbers of 
                cigarettes sold; and
                    ``(B) in the case of each other class of tobacco 
                products, such unit as is specified by regulation by 
                the Secretary.
    ``(f) Certification of Volume of Domestic Sales.--
            ``(1) In general.--Each manufacturer and importer of 
        tobacco products shall submit for the base period for each 
        applicable fiscal year a certified report to the Secretary of 
        setting forth for each class of tobacco products marketed or 
        imported the total, for the base period, of domestic sales of 
        the tobacco products by the manufacturer and importer, 
        respectively, to wholesalers and retailers and directly to 
        consumers.
            ``(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.
    ``(g) Termination Date.--The authority provided by this section 
terminates on September 30, 2009.

``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; and
                    ``(B) disposed of in a manner determined by the 
                Secretary.
    ``(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 before the effective date of this 
        subtitle) 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.''.

SEC. 202. 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''.

                       TITLE III--IMPLEMENTATION

SEC. 301. REGULATIONS.

    (a) In General.--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--
            (1) the notice and comment provisions of section 553 of 
        title 5, United States Code;
            (2) the Statement of Policy of the Secretary of Agriculture 
        effective July 24, 1971 (36 Fed. Reg. 13804), relating to 
        notices of proposed rulemaking and public participation in 
        rulemaking; and
            (3) 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. 302. EFFECTIVE DATE.

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




                                                       Calendar No. 264

108th CONGRESS

  1st Session

                                S. 1490

_______________________________________________________________________

                                 A BILL

To eliminate the Federal quota and price support programs for tobacco, 
to provide assistance to quota holders, tobacco producers, and tobacco-
             dependent communities, and for other purposes.

_______________________________________________________________________

                           September 2, 2003

            Read the second time and placed on the calendar