[Congressional Record Volume 144, Number 73 (Tuesday, June 9, 1998)]
[Senate]
[Pages S5920-S5990]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



       ``(4) National acreage allotment.--The term `national 
     acreage allotment' means the quantity determined by 
     dividing--
       ``(A) the national marketing quota; by
       ``(B) the national average yield goal.
       ``(5) National average yield goal.--The term `national 
     average yield goal' means the national average yield for 
     flue-cured tobacco during the 5 marketing years immediately 
     preceding the marketing year for which the determination is 
     being made.
       ``(6) National marketing quota.--For the 1999 and each 
     subsequent crop of flue-cured tobacco, the term `national 
     marketing quota' for a marketing year means the quantity of 
     flue-cured tobacco, as determined by the Secretary, that is 
     not more than 103 percent nor less than 97 percent of the 
     total of--
       ``(A) the aggregate of the quantities of flue-cured tobacco 
     that domestic manufacturers of cigarettes estimate that the 
     manufacturers intend to purchase on the United States auction 
     markets or from producers during the marketing year, as 
     compiled and determined under section 320A;
       ``(B) the average annual quantity of flue-cured tobacco 
     exported from the United States during the 3 marketing years 
     immediately preceding the marketing year for which the 
     determination is being made; and
       ``(C) the quantity, if any, of flue-cured tobacco that the 
     Secretary, in the discretion of the Secretary, determines is 
     necessary to increase or decrease the inventory of the 
     producer-owned cooperative marketing association that has 
     entered into a loan agreement with the Commodity Credit 
     Corporation to make price support available to producers of 
     flue-cured tobacco to establish or maintain the inventory at 
     the reserve stock level for flue-cured tobacco.
       ``(7) Permit yield.--The term `permit yield' means the 
     yield of tobacco per acre for an individual tobacco 
     production permit holder that is--
       ``(A) based on a preliminary permit yield that is equal to 
     the average yield during the 5 marketing years immediately 
     preceding the marketing year for which the determination is 
     made in the county where the holder of the permit is 
     authorized to plant flue-cured tobacco, as determined by the 
     Secretary, on the basis of actual yields of farms in the 
     county; and
       ``(B) adjusted by a weighted national yield factor 
     calculated by--
       ``(i) multiplying each preliminary permit yield by the 
     individual acreage limitation, prior to adjustments for 
     overmarketings, undermarketings, or reductions required under 
     subsection (i); and
       ``(ii) dividing the sum of the products under clause (i) 
     for all flue-cured individual tobacco production permit 
     holders by the national acreage allotment.
       ``(b) Initial Issuance of Permits.--
       ``(1) Termination of flue-cured marketing quotas.--On the 
     date of enactment of the National Tobacco Policy and Youth 
     Smoking Reduction Act, farm marketing quotas as provided 
     under section 317 shall no longer be in effect for flue-cured 
     tobacco.
       ``(2) Issuance of permits to quota holders that were 
     principal producers.--
       ``(A) In general.--By January 15, 1999, each individual 
     quota holder under section 317 that was a principal producer 
     of flue-cured tobacco during the 1998 marketing year, as 
     determined by the Secretary, shall be issued an individual 
     tobacco production permit under this section.
       ``(B) Notification.--The Secretary shall notify the holder 
     of each permit of the individual acreage limitation and the 
     individual marketing limitation applicable to the holder for 
     each marketing year.
       ``(C) Individual acreage limitation for 1999 marketing 
     year.--In establishing the individual acreage limitation for 
     the 1999 marketing year under this section, the farm acreage 
     allotment that was allotted to a farm owned by the quota 
     holder for the 1997 marketing year shall be considered the 
     individual acreage limitation for the previous marketing 
     year.
       ``(D) Individual marketing limitation for 1999 marketing 
     year.--In establishing the individual marketing limitation 
     for the 1999 marketing year under this section, the farm 
     marketing quota that was allotted to a farm owned by the 
     quota holder for the 1997 marketing year shall be considered 
     the individual marketing limitation for the previous 
     marketing year.
       ``(3) Quota holders that were not principal producers.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     on approval through a referendum under subsection (c)--
       ``(i) each person that was a quota holder under section 317 
     but that was not a principal producer of flue-cured tobacco 
     during the 1997 marketing year, as determined by the 
     Secretary, shall not be eligible to own a permit; and
       ``(ii) the Secretary shall not issue any permit during the 
     25-year period beginning on the date of enactment of this Act 
     to any person that was a quota holder and was not the 
     principal producer of flue-cured tobacco during the 1997 
     marketing year.
       ``(B) Medical hardships and crop disasters.--Subparagraph 
     (A) shall not apply to a person that would have been the 
     principal producer of flue-cured tobacco during the 1997 
     marketing year but for a medical hardship or crop disaster 
     that occurred during the 1997 marketing year.
       ``(C) Administration.--The Secretary shall issue 
     regulations--
       ``(i) defining the term `person' for the purpose of this 
     paragraph; and
       ``(ii) prescribing such rules as the Secretary determines 
     are necessary to ensure a fair and reasonable application of 
     the prohibition established under this paragraph.
       ``(4) Issuance of permits to principal producers of flue-
     cured tobacco.--
       ``(A) In general.--By January 15, 1999, each individual 
     quota lessee or quota tenant (as defined in section 1002 of 
     the LEAF Act) that was the principal producer of flue-cured 
     tobacco during the 1997 marketing year, as determined by the 
     Secretary, shall be issued an individual tobacco production 
     permit under this section.
       ``(B) Individual acreage limitations.--In establishing the 
     individual acreage limitation for the 1999 marketing year 
     under this section, the farm acreage allotment that was 
     allotted to a farm owned by a quota holder for whom the quota 
     lessee or quota tenant was the principal producer of flue-
     cured tobacco during the 1997 marketing year shall be 
     considered the individual acreage limitation for the previous 
     marketing year.
       ``(C) Individual marketing limitations.--In establishing 
     the individual marketing limitation for the 1999 marketing 
     year under this section, the individual marketing limitation 
     for the previous year for an individual described in this 
     paragraph shall be calculated by multiplying--
       ``(i) the farm marketing quota that was allotted to a farm 
     owned by a quota holder for whom the quota lessee or quota 
     holder was the principal producer of flue-cured tobacco 
     during the 1997 marketing year, by
       ``(ii) the ratio that--

       ``(I) the sum of all flue-cured tobacco farm marketing 
     quotas for the 1997 marketing year prior to adjusting for 
     undermarketing and overmarketing; bears to
       ``(II) the sum of all flue-cured tobacco farm marketing 
     quotas for the 1998 marketing year, after adjusting for 
     undermarketing and overmarketing.

       ``(D) Special rule for tenant of leased flue-cured 
     tobacco.--If the farm marketing quota or farm acreage 
     allotment of a quota holder was produced pursuant to an 
     agreement under which a quota lessee rented land from a quota 
     holder and a quota tenant was the primary producer, as 
     determined by the Secretary, of flue-cured tobacco pursuant 
     to the farm marketing quota or farm acreage allotment, the 
     farm marketing quota or farm acreage allotment shall be 
     divided proportionately between the quota lessee and quota 
     tenant for purposes of issuing individual tobacco production 
     permits under this paragraph.
       ``(5) Option of quota lessee or quota tenant to relinquish 
     permit.--
       ``(A) In general.--Each quota lessee or quota tenant that 
     is issued an individual tobacco production permit under 
     paragraph (4) shall be given the option of relinquishing the

[[Page S5921]]

     permit in exchange for payments made under section 1021(e)(5) 
     of the LEAF Act.
       ``(B) Notification.--A quota lessee or quota tenant that is 
     issued an individual tobacco production permit shall give 
     notification of the intention to exercise the option at such 
     time and in such manner as the Secretary may require, but not 
     later than 45 days after the permit is issued.
       ``(C) Reallocation of permit.--The Secretary shall add the 
     authority to produce flue-cured tobacco under the individual 
     tobacco production permit relinquished under this paragraph 
     to the county production pool established under paragraph (8) 
     for reallocation by the appropriate county committee.
       ``(6) Active producer requirement.--
       ``(A) Requirement for sharing risk.--No individual tobacco 
     production permit shall be issued to, or maintained by, a 
     person that does not fully share in the risk of producing a 
     crop of flue-cured tobacco.
       ``(B) Criteria for sharing risk.--For purposes of this 
     paragraph, a person shall be considered to have fully shared 
     in the risk of production of a crop if--
       ``(i) the investment of the person in the production of the 
     crop is not less than 100 percent of the costs of production 
     associated with the crop;
       ``(ii) the amount of the person's return on the investment 
     is dependent solely on the sale price of the crop; and
       ``(iii) the person may not receive any of the return before 
     the sale of the crop.
       ``(C) Persons not sharing risk.--
       ``(i) Forfeiture.--Any person that fails to fully share in 
     the risks of production under this paragraph shall forfeit an 
     individual tobacco production permit if, after notice and 
     opportunity for a hearing, the appropriate county committee 
     determines that the conditions for forfeiture exist.
       ``(ii) Reallocation.--The Secretary shall add the authority 
     to produce flue-cured tobacco under the individual tobacco 
     production permit forfeited under this subparagraph to the 
     county production pool established under paragraph (8) for 
     reallocation by the appropriate county committee.
       ``(D) Notice.--Notice of any determination made by a county 
     committee under subparagraph (C) shall be mailed, as soon as 
     practicable, to the person involved.
       ``(E) Review.--If the person is dissatisfied with the 
     determination, the person may request, not later than 15 days 
     after notice of the determination is received, a review of 
     the determination by a local review committee under the 
     procedures established under section 363 for farm marketing 
     quotas.
       ``(7) County of origin requirement.--For the 1999 and each 
     subsequent crop of flue-cured tobacco, all tobacco produced 
     pursuant to an individual tobacco production permit shall be 
     produced in the same county in which was produced the tobacco 
     produced during the 1997 marketing year pursuant to the farm 
     marketing quota or farm acreage allotment on which the 
     individual tobacco production permit is based.
       ``(8) County production pool.--
       ``(A) In general.--The authority to produce flue-cured 
     tobacco under an individual tobacco production permit that is 
     forfeited, relinquished, or surrendered within a county may 
     be reallocated by the appropriate county committee to tobacco 
     producers located in the same county that apply to the 
     committee to produce flue-cured tobacco under the authority.
       ``(B) Priority.--In reallocating individual tobacco 
     production permits under this paragraph, a county committee 
     shall provide a priority to--
       ``(i) an active tobacco producer that controls the 
     authority to produce a quantity of flue-cured tobacco under 
     an individual tobacco production permit that is equal to or 
     less than the average number of pounds of flue-cured tobacco 
     that was produced by the producer during each of the 1995 
     through 1997 marketing years, as determined by the Secretary; 
     and
       ``(ii) a new tobacco producer.
       ``(C) Criteria.--Individual tobacco production permits 
     shall be reallocated by the appropriate county committee 
     under this paragraph in a fair and equitable manner after 
     taking into consideration--
       ``(i) the experience of the producer;
       ``(ii) the availability of land, labor, and equipment for 
     the production of tobacco;
       ``(iii) crop rotation practices; and
       ``(iv) the soil and other physical factors affecting the 
     production of tobacco.
       ``(D) Medical hardships and crop disasters.--
     Notwithstanding any other provision of this Act, the 
     Secretary may issue an individual tobacco production permit 
     under this paragraph to a producer that is otherwise 
     ineligible for the permit due to a medical hardship or crop 
     disaster that occurred during the 1997 marketing year.
       ``(c) Referendum.--
       ``(1) Announcement of quota and allotment.--Not later than 
     December 15, 1998, the Secretary pursuant to subsection (b) 
     shall determine and announce--
       ``(A) the quantity of the national marketing quota for 
     flue-cured tobacco for the 1999 marketing year; and
       ``(B) the national acreage allotment and national average 
     yield goal for the 1999 crop of flue-cured tobacco.
       ``(2) Special referendum.--Not later than 30 days after the 
     announcement of the quantity of the national marketing quota 
     in 2001, the Secretary shall conduct a special referendum of 
     the tobacco production permit holders that were the principal 
     producers of flue-cured tobacco of the 1997 crop to determine 
     whether the producers approve or oppose the continuation of 
     individual tobacco production permits on an acreage-poundage 
     basis as provided in this section for the 2002 through 2004 
     marketing years.
       ``(3) Approval of permits.--If the Secretary determines 
     that more than 66\2/3\ percent of the producers voting in the 
     special referendum approve the establishment of individual 
     tobacco production permits on an acreage-poundage basis--
       ``(A) individual tobacco production permits on an acreage-
     poundage basis as provided in this section shall be in effect 
     for the 2002 through 2004 marketing years; and
       ``(B) marketing quotas on an acreage-poundage basis shall 
     cease to be in effect for the 2002 through 2004 marketing 
     years.
       ``(4) Disapproval of permits.--If individual tobacco 
     production permits on an acreage-poundage basis are not 
     approved by more than 66\2/3\ percent of the producers voting 
     in the referendum, no marketing quotas on an acreage-poundage 
     basis shall continue in effect that were proclaimed under 
     section 317 prior to the referendum.
       ``(5) Applicable marketing years.--If individual tobacco 
     production permits have been made effective for flue-cured 
     tobacco on an acreage-poundage basis pursuant to this 
     subsection, the Secretary shall, not later than December 15 
     of any future marketing year, announce a national marketing 
     quota for that type of tobacco for the next 3 succeeding 
     marketing years if the marketing year is the last year of 3 
     consecutive years for which individual tobacco production 
     permits previously proclaimed will be in effect.
       ``(d) Annual Announcement of National Marketing Quota.--The 
     Secretary shall determine and announce the national marketing 
     quota, national acreage allotment, and national average yield 
     goal for the second and third marketing years of any 3-year 
     period for which individual tobacco production permits are in 
     effect on or before the December 15 immediately preceding the 
     beginning of the marketing year to which the quota, 
     allotment, and goal apply.
       ``(e) Annual Announcement of Individual Tobacco Production 
     Permits.--If a national marketing quota, national acreage 
     allotment, and national average yield goal are determined and 
     announced, the Secretary shall provide for the determination 
     of individual tobacco production permits, individual acreage 
     limitations, and individual marketing limitations under this 
     section for the crop and marketing year covered by the 
     determinations.
       ``(f) Assignment of Tobacco Production Permits.--
       ``(1) Limitation to same county.--Each individual tobacco 
     production permit holder shall assign the individual acreage 
     limitation and individual marketing limitation to 1 or more 
     farms located within the county of origin of the individual 
     tobacco production permit.
       ``(2) Filing with county committee.--The assignment of an 
     individual acreage limitation and individual marketing 
     limitation shall not be effective until evidence of the 
     assignment, in such form as required by the Secretary, is 
     filed with and determined by the county committee for the 
     county in which the farm involved is located.
       ``(3) Limitation on tillable cropland.--The total acreage 
     assigned to any farm under this subsection shall not exceed 
     the acreage of cropland on the farm.
       ``(g) Prohibition on Sale or Leasing of Individual Tobacco 
     Production Permits.--
       ``(1) In general.--Except as provided in paragraphs (2) and 
     (3), the Secretary shall not permit the sale and transfer, or 
     lease and transfer, of an individual tobacco production 
     permit issued under this section.
       ``(2) Transfer to descendants.--
       ``(A) Death.--In the case of the death of a person to whom 
     an individual tobacco production permit has been issued under 
     this section, the permit shall transfer to the surviving 
     spouse of the person or, if there is no surviving spouse, to 
     surviving direct descendants of the person.
       ``(B) Temporary inability to farm.--In the case of the 
     death of a person to whom an individual tobacco production 
     permit has been issued under this section and whose 
     descendants are temporarily unable to produce a crop of 
     tobacco, the Secretary may hold the license in the name of 
     the descendants for a period of not more than 18 months.
       ``(3) Voluntary transfers.--A person that is eligible to 
     obtain an individual tobacco production permit under this 
     section may at any time transfer all or part of the permit to 
     the person's spouse or direct descendants that are actively 
     engaged in the production of tobacco.
       ``(h) Reserve.--
       ``(1) In general.--For each marketing year for which 
     individual tobacco production permits are in effect under 
     this section, the Secretary may establish a reserve from the 
     national marketing quota in a quantity equal to not more than 
     1 percent of the national marketing quota to be available 
     for--
       ``(A) making corrections of errors in individual acreage 
     limitations and individual marketing limitations;
       ``(B) adjusting inequities; and
       ``(C) establishing individual tobacco production permits 
     for new tobacco producers (except that not less than two-
     thirds of the reserve shall be for establishing such permits 
     for new tobacco producers).
       ``(2) Eligible persons.--To be eligible for a new 
     individual tobacco production permit, a producer must not 
     have been the principal

[[Page S5922]]

     producer of tobacco during the immediately preceding 5 years.
       ``(3) Apportionment for new producers.--The part of the 
     reserve held for apportionment to new individual tobacco 
     producers shall be allotted on the basis of--
       ``(A) land, labor, and equipment available for the 
     production of tobacco;
       ``(B) crop rotation practices;
       ``(C) soil and other physical factors affecting the 
     production of tobacco; and
       ``(D) the past tobacco-producing experience of the 
     producer.
       ``(4) Permit yield.--The permit yield for any producer for 
     which a new individual tobacco production permit is 
     established shall be determined on the basis of available 
     productivity data for the land involved and yields for 
     similar farms in the same county.
       ``(i) Penalties.--
       ``(1) Production on other farms.--If any quantity of 
     tobacco is marketed as having been produced under an 
     individual acreage limitation or individual marketing 
     limitation assigned to a farm but was produced on a different 
     farm, the individual acreage limitation or individual 
     marketing limitation for the following marketing year shall 
     be forfeited.
       ``(2) False report.--If a person to which an individual 
     tobacco production permit is issued files, or aids or 
     acquiesces in the filing of, a false report with respect to 
     the assignment of an individual acreage limitation or 
     individual marketing limitation for a quantity of tobacco, 
     the individual acreage limitation or individual marketing 
     limitation for the following marketing year shall be 
     forfeited.
       ``(j) Marketing Penalties.--
       ``(1) In general.--When individual tobacco production 
     permits under this section are in effect, provisions with 
     respect to penalties for the marketing of excess tobacco and 
     the other provisions contained in section 314 shall apply in 
     the same manner and to the same extent as they would apply 
     under section 317(g) if farm marketing quotas were in effect.
       ``(2) Production on other farms.--If a producer falsely 
     identifies tobacco as having been produced on or marketed 
     from a farm to which an individual acreage limitation or 
     individual marketing limitation has been assigned, future 
     individual acreage limitations and individual marketing 
     limitations shall be forfeited.''.

     SEC. 1025. MODIFICATIONS IN FEDERAL TOBACCO PROGRAMS.

       (a) Program Referenda.--Section 312(c) of the Agricultural 
     Adjustment Act of 1938 (7 U.S.C. 1312(c)) is amended--
       (1) by striking ``(c) Within thirty'' and inserting the 
     following:
       ``(c) Referenda on Quotas.--
       ``(1) In general.--Not later than 30''; and
       (2) by adding at the end the following:
       ``(2) Referenda on program changes.--
       ``(A) In general.--In the case of any type of tobacco for 
     which marketing quotas are in effect, on the receipt of a 
     petition from more than 5 percent of the producers of that 
     type of tobacco in a State, the Secretary shall conduct a 
     statewide referendum on any proposal related to the lease and 
     transfer of tobacco quota within a State requested by the 
     petition that is authorized under this part.
       ``(B) Approval of proposals.--If a majority of producers of 
     the type of tobacco in the State approve a proposal in a 
     referendum conducted under subparagraph (A), the Secretary 
     shall implement the proposal in a manner that applies to all 
     producers and quota holders of that type of tobacco in the 
     State.''.
       (b) Purchase Requirements.--Section 320B of the 
     Agricultural Adjustment Act of 1938 (7 U.S.C. 1314h) is 
     amended--
       (1) in subsection (c)--
       (A) by striking ``(c) The amount'' and inserting ``(c) 
     Amount of Penalty.--For the 1998 and subsequent marketing 
     years, the amount''; and
       (B) by striking paragraph (1) and inserting the following:
       ``(1) 105 percent of the average market price for the type 
     of tobacco involved during the preceding marketing year; 
     and''.
       (c) Elimination of Tobacco Marketing Assessment.--
       (1) In general.--Section 106 of the Agricultural Act of 
     1949 (7 U.S.C. 1445) is amended by striking subsection (g).
       (2) Conforming amendment.--Section 422(c) of the Uruguay 
     Round Agreements Act (Public Law 103-465; 7 U.S.C. 1445 note) 
     is amended by striking ``section 106(g), 106A, or 106B of the 
     Agricultural Act of 1949 (7 U.S.C. 1445(g), 1445-1, or 1445-
     2)'' and inserting ``section 106A or 106B of the Agricultural 
     Act of 1949 (7 U.S.C. 1445-1, 1445-2)''.
       (d) Adjustment for Land Rental Costs.--Section 106 of the 
     Agricultural Act of 1949 (7 U.S.C. 1445) is amended by adding 
     at the end the following:
       ``(h) Adjustment for Land Rental Costs.--For each of the 
     1999 and 2000 marketing years for flue-cured tobacco, after 
     consultation with producers, State farm organizations and 
     cooperative associations, the Secretary shall make an 
     adjustment in the price support level for flue-cured tobacco 
     equal to the annual change in the average cost per pound to 
     flue-cured producers, as determined by the Secretary, under 
     agreements through which producers rent land to produce flue-
     cured tobacco.''.
       (e) Fire-Cured and Dark Air-Cured Tobacco Programs.--
       (1) Limitation on transfers.--Section 318(g) of the 
     Agricultural Adjustment Act of 1938 (7 U.S.C. 13l4d(g)) is 
     amended--
       (A) by striking ``ten'' and inserting ``30''; and
       (B) by inserting ``during any crop year'' after 
     ``transferred to any farm''.
       (2) Loss of allotment or quota through underplanting.--
     Section 318 of the Agricultural Adjustment Act of 1938 (7 
     U.S.C. 1314d) is amended by adding at the end the following:
       ``(k) Loss of Allotment or Quota Through Underplanting.--
     Effective for the 1999 and subsequent marketing years, no 
     acreage allotment or acreage-poundage quota, other than a new 
     marketing quota, shall be established for a farm on which no 
     fire-cured or dark air-cured tobacco was planted or 
     considered planted during at least 2 of the 3 crop years 
     immediately preceding the crop year for which the acreage 
     allotment or acreage-poundage quota would otherwise be 
     established.''.
       (f) Expansion of Types of Tobacco Subject to No Net Cost 
     Assessment.--
       (1) No net cost tobacco fund.--Section 106A(d)(1)(A) of the 
     Agricultural Act of 1949 (7 U.S.C. 1445-1(d)(1)(A)) is 
     amended--
       (A) in clause (ii), by inserting after ``Burley quota 
     tobacco'' the following: ``and fire-cured and dark air-cured 
     quota tobacco''; and
       (B) in clause (iii)--
       (i) in the matter preceding subclause (I), by striking 
     ``Flue-cured or Burley tobacco'' and inserting ``each kind of 
     tobacco for which price support is made available under this 
     Act, and each kind of like tobacco,''; and
       (ii) by striking subclause (II) and inserting the 
     following:

       ``(II) the sum of the amount of the per pound producer 
     contribution and purchaser assessment (if any) for the kind 
     of tobacco payable under clauses (i) and (ii); and''.

       (2) No net cost tobacco account.--Section 106B(d)(1) of the 
     Agricultural Act of 1949 (7 U.S.C. 1445-2(d)(1)) is amended--
       (A) in subparagraph (B), by inserting after ``Burley quota 
     tobacco'' the following: ``and fire-cured and dark air-cured 
     tobacco''; and
       (B) in subparagraph (C), by striking ``Flue-cured and 
     Burley tobacco'' and inserting ``each kind of tobacco for 
     which price support is made available under this Act, and 
     each kind of like tobacco,''.
          Subtitle C--Farmer and Worker Transition Assistance

     SEC. 1031. TOBACCO WORKER TRANSITION PROGRAM.

       (a) Group Eligibility Requirements.--
       (1) Criteria.--A group of workers (including workers in any 
     firm or subdivision of a firm involved in the manufacture, 
     processing, or warehousing of tobacco or tobacco products) 
     shall be certified as eligible to apply for adjustment 
     assistance under this section pursuant to a petition filed 
     under subsection (b) if the Secretary of Labor determines 
     that a significant number or proportion of the workers in the 
     workers' firm or an appropriate subdivision of the firm have 
     become totally or partially separated, or are threatened to 
     become totally or partially separated, and--
       (A) the sales or production, or both, of the firm or 
     subdivision have decreased absolutely; and
       (B) the implementation of the national tobacco settlement 
     contributed importantly to the workers' separation or threat 
     of separation and to the decline in the sales or production 
     of the firm or subdivision.
       (2) Definition of contributed importantly.--In paragraph 
     (1)(B), the term ``contributed importantly'' means a cause 
     that is important but not necessarily more important than any 
     other cause.
       (3) Regulations.--The Secretary shall issue regulations 
     relating to the application of the criteria described in 
     paragraph (1) in making preliminary findings under subsection 
     (b) and determinations under subsection (c).
       (b) Preliminary Findings and Basic Assistance.--
       (1) Filing of petitions.--A petition for certification of 
     eligibility to apply for adjustment assistance under this 
     section may be filed by a group of workers (including workers 
     in any firm or subdivision of a firm involved in the 
     manufacture, processing, or warehousing of tobacco or tobacco 
     products) or by their certified or recognized union or other 
     duly authorized representative with the Governor of the State 
     in which the workers' firm or subdivision thereof is located.
       (2) Findings and assistance.--On receipt of a petition 
     under paragraph (1), the Governor shall--
       (A) notify the Secretary that the Governor has received the 
     petition;
       (B) within 10 days after receiving the petition--
       (i) make a preliminary finding as to whether the petition 
     meets the criteria described in subsection (a)(1); and
       (ii) transmit the petition, together with a statement of 
     the finding under clause (i) and reasons for the finding, to 
     the Secretary for action under subsection (c); and
       (C) if the preliminary finding under subparagraph (B)(i) is 
     affirmative, ensure that rapid response and basic 
     readjustment services authorized under other Federal laws are 
     made available to the workers.
       (c) Review of Petitions by Secretary; Certifications.--
       (1) In general.--The Secretary, within 30 days after 
     receiving a petition under subsection (b)(2)(B)(ii), shall 
     determine whether the petition meets the criteria described 
     in subsection (a)(1). On a determination that the petition 
     meets the criteria, the Secretary shall issue to workers 
     covered by the

[[Page S5923]]

     petition a certification of eligibility to apply for the 
     assistance described in subsection (d).
       (2) Denial of certification.--On the denial of a 
     certification with respect to a petition under paragraph (1), 
     the Secretary shall review the petition in accordance with 
     the requirements of other applicable assistance programs to 
     determine if the workers may be certified under the other 
     programs.
       (d) Comprehensive Assistance.--
       (1) In general.--Workers covered by a certification issued 
     by the Secretary under subsection (c)(1) shall be provided 
     with benefits and services described in paragraph (2) in the 
     same manner and to the same extent as workers covered under a 
     certification under subchapter A of title II of the Trade Act 
     of 1974 (19 U.S.C. 2271 et seq.), except that the total 
     amount of payments under this section for any fiscal year 
     shall not exceed $25,000,000.
       (2) Benefits and services.--The benefits and services 
     described in this paragraph are the following:
       (A) Employment services of the type described in section 
     235 of the Trade Act of 1974 (19 U.S.C. 2295).
       (B) Training described in section 236 of the Trade Act of 
     1974 (19 U.S.C. 2296), except that notwithstanding the 
     provisions of section 236(a)(2)(A) of that Act, the total 
     amount of payments for training under this section for any 
     fiscal year shall not exceed $12,500,000.
       (C) Tobacco worker readjustment allowances, which shall be 
     provided in the same manner as trade readjustment allowances 
     are provided under part I of subchapter B of chapter 2 of 
     title II of the Trade Act of 1974 (19 U.S.C. 2291 et seq.), 
     except that--
       (i) the provisions of sections 231(a)(5)(C) and 231(c) of 
     that Act (19 U.S.C. 2291(a)(5)(C), 2291(c)), authorizing the 
     payment of trade readjustment allowances on a finding that it 
     is not feasible or appropriate to approve a training program 
     for a worker, shall not be applicable to payment of 
     allowances under this section; and
       (ii) notwithstanding the provisions of section 233(b) of 
     that Act (19 U.S.C. 2293(b)), in order for a worker to 
     qualify for tobacco readjustment allowances under this 
     section, the worker shall be enrolled in a training program 
     approved by the Secretary of the type described in section 
     236(a) of that Act (19 U.S.C. 2296(a)) by the later of--

       (I) the last day of the 16th week of the worker's initial 
     unemployment compensation benefit period; or
       (II) the last day of the 6th week after the week in which 
     the Secretary issues a certification covering the worker.

     In cases of extenuating circumstances relating to enrollment 
     of a worker in a training program under this section, the 
     Secretary may extend the time for enrollment for a period of 
     not to exceed 30 days.
       (D) Job search allowances of the type described in section 
     237 of the Trade Act of 1974 (19 U.S.C. 2297).
       (E) Relocation allowances of the type described in section 
     238 of the Trade Act of 1974 (19 U.S.C. 2298).
       (e) Ineligibility of Individuals Receiving Payments for 
     Lost Tobacco Quota.--No benefits or services may be provided 
     under this section to any individual who has received 
     payments for lost tobacco quota under section 1021.
       (f) Funding.--Of the amounts appropriated to carry out this 
     title, the Secretary may use not to exceed $25,000,000 for 
     each of fiscal years 1999 through 2008 to provide assistance 
     under this section.
       (g) Effective Date.--This section shall take effect on the 
     date that is the later of--
       (1) October l, 1998; or
       (2) the date of enactment of this Act.
       (h) Termination Date.--No assistance, vouchers, allowances, 
     or other payments may be provided under this section after 
     the date that is the earlier of--
       (1) the date that is 10 years after the effective date of 
     this section under subsection (g); or
       (2) the date on which legislation establishing a program 
     providing dislocated workers with comprehensive assistance 
     substantially similar to the assistance provided by this 
     section becomes effective.

     SEC. 1032. FARMER OPPORTUNITY GRANTS.

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

                 ``Subpart 9--Farmer Opportunity Grants

     ``SEC. 420D. STATEMENT OF PURPOSE.

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

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

       ``(a) Program Authority and Method of Distribution.--
       ``(1) Program authority.--From amounts made available under 
     section 1011(d)(5) of the LEAF Act, the Secretary, during the 
     period beginning July 1, 1999, and ending September 30, 2024, 
     shall pay to each eligible institution such sums as may be 
     necessary to pay to each eligible student (determined in 
     accordance with section 420F) for each academic year during 
     which that student is in attendance at an institution of 
     higher education, as an undergraduate, a farmer opportunity 
     grant in the amount for which that student is eligible, as 
     determined pursuant to subsection (b). Not less than 85 
     percent of the sums shall be advanced to eligible 
     institutions prior to the start of each payment period and 
     shall be based on an amount requested by the institution as 
     needed to pay eligible students, except that this sentence 
     shall not be construed to limit the authority of the 
     Secretary to place an institution on a reimbursement system 
     of payment.
       ``(2) Construction.--Nothing in this section shall be 
     construed to prohibit the Secretary from paying directly to 
     students, in advance of the beginning of the academic term, 
     an amount for which the students are eligible, in cases where 
     the eligible institution elects not to participate in the 
     disbursement system required by paragraph (1).
       ``(3) Designation.--Grants made under this subpart shall be 
     known as `farmer opportunity grants'.
       ``(b) Amount of Grants.--
       ``(1) Amounts.--
       ``(A) In general.--The amount of the grant for a student 
     eligible under this subpart shall be--
       ``(i) $1,700 for each of the academic years 1999-2000 
     through 2003-2004;
       ``(ii) $2,000 for each of the academic years 2004-2005 
     through 2008-2009;
       ``(iii) $2,300 for each of the academic years 2009-2010 
     through 2013-2014;
       ``(iv) $2,600 for each of the academic years 2014-2015 
     through 2018-2019; and
       ``(v) $2,900 for each of the academic years 2019-2020 
     through 2023-2024.
       ``(B) Part-time rule.--In any case where a student attends 
     an institution of higher education on less than a full-time 
     basis (including a student who attends an institution of 
     higher education on less than a half-time basis) during any 
     academic year, the amount of the grant for which that student 
     is eligible shall be reduced in proportion to the degree to 
     which that student is not so attending on a full-time basis, 
     in accordance with a schedule of reductions established by 
     the Secretary for the purposes of this subparagraph, computed 
     in accordance with this subpart. The schedule of reductions 
     shall be established by regulation and published in the 
     Federal Register.
       ``(2) Maximum.--No grant under this subpart shall exceed 
     the cost of attendance (as described in section 472) at the 
     institution at which that student is in attendance. If, with 
     respect to any student, it is determined that the amount of a 
     grant exceeds the cost of attendance for that year, the 
     amount of the grant shall be reduced to an amount equal to 
     the cost of attendance at the institution.
       ``(3) Prohibition.--No grant shall be awarded under this 
     subpart to any individual who is incarcerated in any Federal, 
     State, or local penal institution.
       ``(c) Period of Eligibility for Grants.--
       ``(1) In general.--The period during which a student may 
     receive grants shall be the period required for the 
     completion of the first undergraduate baccalaureate course of 
     study being pursued by that student at the institution at 
     which the student is in attendance, except that any period 
     during which the student is enrolled in a noncredit or 
     remedial course of study as described in paragraph (2) shall 
     not be counted for the purpose of this paragraph.
       ``(2) Construction.--Nothing in this section shall be 
     construed to--
       ``(A) exclude from eligibility courses of study that are 
     noncredit or remedial in nature and that are determined by 
     the institution to be necessary to help the student be 
     prepared for the pursuit of a first undergraduate 
     baccalaureate degree or certificate or, in the case of 
     courses in English language instruction, to be necessary to 
     enable the student to utilize already existing knowledge, 
     training, or skills; and
       ``(B) exclude from eligibility programs of study abroad 
     that are approved for credit by the home institution at which 
     the student is enrolled.
       ``(3) Prohibition.--No student is entitled to receive 
     farmer opportunity grant payments concurrently from more than 
     1 institution or from the Secretary and an institution.
       ``(d) Applications for Grants.--
       ``(1) In general.--The Secretary shall from time to time 
     set dates by which students shall file applications for 
     grants under this subpart. The filing of applications under 
     this subpart shall be coordinated with the filing of 
     applications under section 401(c).
       ``(2) Information and assurances.--Each student desiring a 
     grant for any year shall file with the Secretary an 
     application for the grant containing such information and 
     assurances as the Secretary may deem necessary to enable the 
     Secretary to carry out the Secretary's functions and 
     responsibilities under this subpart.
       ``(e) Distribution of Grants to Students.--Payments under 
     this section shall be made in accordance with regulations 
     promulgated by the Secretary for such purpose, in such manner 
     as will best accomplish the purpose of this section. Any 
     disbursement allowed to be made by crediting the student's 
     account shall be limited to tuition and fees and, in the case 
     of institutionally owned housing, room and board. The student 
     may elect to have the institution provide other such goods 
     and services by crediting the student's account.
       ``(f) Insufficient Funding.--If, for any fiscal year, the 
     funds made available to carry out this subpart are 
     insufficient to satisfy fully all grants for students 
     determined to be eligible under section 420F, the amount of 
     the grant provided under subsection (b) shall be reduced on a 
     pro rata basis among all eligible students.
       ``(g) Treatment of Institutions and Students Under Other 
     Laws.--Any institution

[[Page S5924]]

     of higher education that enters into an agreement with the 
     Secretary to disburse to students attending that institution 
     the amounts those students are eligible to receive under this 
     subpart shall not be deemed, by virtue of the agreement, to 
     be a contractor maintaining a system of records to accomplish 
     a function of the Secretary. Recipients of farmer opportunity 
     grants shall not be considered to be individual grantees for 
     purposes of the Drug-Free Workplace Act of 1988 (41 U.S.C. 
     701 et seq.).

     ``SEC. 420F. STUDENT ELIGIBILITY.

       ``(a) In General.--In order to receive any grant under this 
     subpart, a student shall--
       ``(1) be a member of a tobacco farm family in accordance 
     with subsection (b);
       ``(2) be enrolled or accepted for enrollment in a degree, 
     certificate, or other program (including a program of study 
     abroad approved for credit by the eligible institution at 
     which the student is enrolled) leading to a recognized 
     educational credential at an institution of higher education 
     that is an eligible institution in accordance with section 
     487, and not be enrolled in an elementary or secondary 
     school;
       ``(3) if the student is presently enrolled at an 
     institution of higher education, be maintaining satisfactory 
     progress in the course of study the student is pursuing in 
     accordance with subsection (c);
       ``(4) not owe a refund on grants previously received at any 
     institution of higher education under this title, or be in 
     default on any loan from a student loan fund at any 
     institution provided for in part D, or a loan made, insured, 
     or guaranteed by the Secretary under this title for 
     attendance at any institution;
       ``(5) file with the institution of higher education that 
     the student intends to attend, or is attending, a document, 
     that need not be notarized, but that shall include--
       ``(A) a statement of educational purpose stating that the 
     money attributable to the grant will be used solely for 
     expenses related to attendance or continued attendance at the 
     institution; and
       ``(B) the student's social security number; and
       ``(6) be a citizen of the United States.
       ``(b) Tobacco Farm Families.--
       ``(1) In general.--For the purpose of subsection (a)(1), a 
     student is a member of a tobacco farm family if during 
     calendar year 1998 the student was--
       ``(A) an individual who--
       ``(i) is a participating tobacco producer (as defined in 
     section 1002 of the LEAF Act) who is a principal producer of 
     tobacco on a farm; or
       ``(ii) is otherwise actively engaged in the production of 
     tobacco;
       ``(B) a spouse, son, daughter, stepson, or stepdaughter of 
     an individual described in subparagraph (A);
       ``(C) an individual who was a dependent (within the meaning 
     of section 152 of the Internal Revenue Code of 1986) of an 
     individual described in subparagraph (A).
       ``(2) Administration.--On request, the Secretary of 
     Agriculture shall provide to the Secretary such information 
     as is necessary to carry out this subsection.
       ``(c) Satisfactory Progress.--
       ``(1) In general.--For the purpose of subsection (a)(3), a 
     student is maintaining satisfactory progress if--
       ``(A) the institution at which the student is in attendance 
     reviews the progress of the student at the end of each 
     academic year, or its equivalent, as determined by the 
     institution; and
       ``(B) the student has at least a cumulative C average or 
     its equivalent, or academic standing consistent with the 
     requirements for graduation, as determined by the 
     institution, at the end of the second such academic year.
       ``(2) Special rule.--Whenever a student fails to meet the 
     eligibility requirements of subsection (a)(3) as a result of 
     the application of this subsection and subsequent to that 
     failure the student has academic standing consistent with the 
     requirements for graduation, as determined by the 
     institution, for any grading period, the student may, subject 
     to this subsection, again be eligible under subsection (a)(3) 
     for a grant under this subpart.
       ``(3) Waiver.--Any institution of higher education at which 
     the student is in attendance may waive paragraph (1) or (2) 
     for undue hardship based on--
       ``(A) the death of a relative of the student;
       ``(B) the personal injury or illness of the student; or
       ``(C) special circumstances as determined by the 
     institution.
       ``(d) Students Who Are Not Secondary School Graduates.--In 
     order for a student who does not have a certificate of 
     graduation from a school providing secondary education, or 
     the recognized equivalent of the certificate, to be eligible 
     for any assistance under this subpart, the student shall meet 
     either 1 of the following standards:
       ``(1) Examination.--The student shall take an independently 
     administered examination and shall achieve a score, specified 
     by the Secretary, demonstrating that the student can benefit 
     from the education or training being offered. The examination 
     shall be approved by the Secretary on the basis of compliance 
     with such standards for development, administration, and 
     scoring as the Secretary may prescribe in regulations.
       ``(2) Determination.--The student shall be determined as 
     having the ability to benefit from the education or training 
     in accordance with such process as the State shall prescribe. 
     Any such process described or approved by a State for the 
     purposes of this section shall be effective 6 months after 
     the date of submission to the Secretary unless the Secretary 
     disapproves the process. In determining whether to approve or 
     disapprove the process, the Secretary shall take into account 
     the effectiveness of the process in enabling students without 
     secondary school diplomas or the recognized equivalent to 
     benefit from the instruction offered by institutions 
     utilizing the process, and shall also take into account the 
     cultural diversity, economic circumstances, and educational 
     preparation of the populations served by the institutions.
       ``(e) Special Rule for Correspondence Courses.--A student 
     shall not be eligible to receive a grant under this subpart 
     for a correspondence course unless the course is part of a 
     program leading to an associate, bachelor, or graduate 
     degree.
       ``(f) Courses Offered Through Telecommunications.--
       ``(1) Relation to correspondence courses.--A student 
     enrolled in a course of instruction at an eligible 
     institution of higher education (other than an institute or 
     school that meets the definition in section 521(4)(C) of the 
     Carl D. Perkins Vocational and Applied Technology Education 
     Act (20 U.S.C. 2471(4)(C))) that is offered in whole or in 
     part through telecommunications and leads to a recognized 
     associate, bachelor, or graduate degree conferred by the 
     institution shall not be considered to be enrolled in 
     correspondence courses unless the total amount of 
     telecommunications and correspondence courses at the 
     institution equals or exceeds 50 percent of the courses.
       ``(2) Restriction or reductions of financial aid.--A 
     student's eligibility to receive a grant under this subpart 
     may be reduced if a financial aid officer determines under 
     the discretionary authority provided in section 479A that 
     telecommunications instruction results in a substantially 
     reduced cost of attendance to the student.
       ``(3) Definition.--For the purposes of this subsection, the 
     term `telecommunications' means the use of television, audio, 
     or computer transmission, including open broadcast, closed 
     circuit, cable, microwave, or satellite, audio conferencing, 
     computer conferencing, or video cassettes or discs, except 
     that the term does not include a course that is delivered 
     using video cassette or disc recordings at the institution 
     and that is not delivered in person to other students of that 
     institution.
       ``(g) Study Abroad.--Nothing in this subpart shall be 
     construed to limit or otherwise prohibit access to study 
     abroad programs approved by the home institution at which a 
     student is enrolled. An otherwise eligible student who is 
     engaged in a program of study abroad approved for academic 
     credit by the home institution at which the student is 
     enrolled shall be eligible to receive a grant under this 
     subpart, without regard to whether the study abroad program 
     is required as part of the student's degree program.
       ``(h) Verification of Social Security Number.--The 
     Secretary, in cooperation with the Commissioner of Social 
     Security, shall verify any social security number provided by 
     a student to an eligible institution under subsection 
     (a)(5)(B) and shall enforce the following conditions:
       ``(1) Pending verification.--Except as provided in 
     paragraphs (2) and (3), an institution shall not deny, 
     reduce, delay, or terminate a student's eligibility for 
     assistance under this subpart because social security number 
     verification is pending.
       ``(2) Denial or termination.--If there is a determination 
     by the Secretary that the social security number provided to 
     an eligible institution by a student is incorrect, the 
     institution shall deny or terminate the student's eligibility 
     for any grant under this subpart until such time as the 
     student provides documented evidence of a social security 
     number that is determined by the institution to be correct.
       ``(3) Construction.--Nothing in this subsection shall be 
     construed to permit the Secretary to take any compliance, 
     disallowance, penalty, or other regulatory action against--
       ``(A) any institution of higher education with respect to 
     any error in a social security number, unless the error was a 
     result of fraud on the part of the institution; or
       ``(B) any student with respect to any error in a social 
     security number, unless the error was a result of fraud on 
     the part of the student.''.
                          Subtitle D--Immunity

     SEC. 1041. GENERAL IMMUNITY FOR TOBACCO PRODUCERS AND TOBACCO 
                   WAREHOUSE OWNERS.

       Notwithstanding any other provision of this title, a 
     participating tobacco producer, tobacco-related growers 
     association, or tobacco warehouse owner or employee may not 
     be subject to liability in any Federal or State court for any 
     cause of action resulting from the failure of any tobacco 
     product manufacturer, distributor, or retailer to comply with 
     the National Tobacco Policy and Youth Smoking Reduction Act.
                       Subtitle E--Applicability

     SEC. 1051. APPLICABILITY OF TITLE XV.

       Notwithstanding any other provision of this Act, title XV 
     of this Act shall have no force or effect.

     SEC. 1052. EFFECTIVE DATE.

       This subtitle takes effect on the day after the date of 
     enactment of this Act, but shall apply as of such date of 
     enactment.

[[Page S5925]]

     
                                  ____
                           Amendment No. 2622

       In lieu of the matter proposed to be inserted, insert the 
     following:

           TITLE X--LONG-TERM ECONOMIC ASSISTANCE FOR FARMERS

     SEC. 1001. SHORT TITLE.

       This title may be cited as the ``Long-Term Economic 
     Assistance for Farmers Act'' or the ``LEAF Act''.

     SEC. 1002. DEFINITIONS.

       In this title:
       (1) Participating tobacco producer.--The term 
     ``participating tobacco producer'' means a quota holder, 
     quota lessee, or quota tenant.
       (2) Quota holder.--The term ``quota holder'' means an owner 
     of a farm on January 1, 1998, for which a tobacco farm 
     marketing quota or farm acreage allotment was established 
     under the Agricultural Adjustment Act of 1938 (7 U.S.C. 1281 
     et seq.).
       (3) Quota lessee.--The term ``quota lessee'' means--
       (A) a producer that owns a farm that produced tobacco 
     pursuant to a lease and transfer to that farm of all or part 
     of a tobacco farm marketing quota or farm acreage allotment 
     established under the Agricultural Adjustment Act of 1938 (7 
     U.S.C. 1281 et seq.) for any of the 1995, 1996, or 1997 crop 
     years; or
       (B) a producer that rented land from a farm operator to 
     produce tobacco under a tobacco farm marketing quota or farm 
     acreage allotment established under the Agricultural 
     Adjustment Act of 1938 (7 U.S.C. 1281 et seq.) for any of the 
     1995, 1996, or 1997 crop years.
       (4) Quota tenant.--The term ``quota tenant'' means a 
     producer that--
       (A) is the principal producer, as determined by the 
     Secretary, of tobacco on a farm where tobacco is produced 
     pursuant to a tobacco farm marketing quota or farm acreage 
     allotment established under the Agricultural Adjustment Act 
     of 1938 (7 U.S.C. 1281 et seq.) for any of the 1995, 1996, or 
     1997 crop years; and
       (B) is not a quota holder or quota lessee.
       (5) Secretary.--The term ``Secretary'' means--
       (A) in subtitles A and B, the Secretary of Agriculture; and
       (B) in section 1031, the Secretary of Labor.
       (6) Tobacco product importer.--The term ``tobacco product 
     importer'' has the meaning given the term ``importer'' in 
     section 5702 of the Internal Revenue Code of 1986.
       (7) Tobacco product manufacturer.--
       (A) In general.--The term ``tobacco product manufacturer'' 
     has the meaning given the term ``manufacturer of tobacco 
     products'' in section 5702 of the Internal Revenue Code of 
     1986.
       (B) Exclusion.--The term ``tobacco product manufacturer'' 
     does not include a person that manufactures cigars or pipe 
     tobacco.
       (8) Tobacco warehouse owner.--The term ``tobacco warehouse 
     owner'' means a warehouseman that participated in an auction 
     market (as defined in the first section of the Tobacco 
     Inspection Act (7 U.S.C. 511)) during the 1998 marketing 
     year.
       (9) Flue-cured tobacco.--The term ``flue-cured tobacco'' 
     includes type 21 and type 37 tobacco.

              Subtitle A--Tobacco Community Revitalization

     SEC. 1011. AUTHORIZATION OF APPROPRIATIONS.

       There are appropriated and transferred to the Secretary for 
     each fiscal year such amounts from the National Tobacco Trust 
     Fund established by section 401, other than from amounts in 
     the State Litigation Settlement Account, as may be necessary 
     to carry out the provisions of this title.

     SEC. 1012. EXPENDITURES.

       The Secretary is authorized, subject to appropriations, to 
     make payments under--
       (1) section 1021 for payments for lost tobacco quota for 
     each of fiscal years 1999 through 2023, but not to exceed 
     $1,650,000,000 for any fiscal year except to the extent the 
     payments are made in accordance with subsection (d)(12) or 
     (e)(9) of section 1021;
       (2) section 1022 for industry payments for all costs of the 
     Department of Agriculture associated with the production of 
     tobacco;
       (3) section 1023 for tobacco community economic development 
     grants, but not to exceed--
       (A) $375,000,000 for each of fiscal years 1999 through 
     2008, less any amount required to be paid under section 1022 
     for the fiscal year; and
       (B) $450,000,000 for each of fiscal year 2009 through 2023, 
     less any amount required to be paid under section 1022 during 
     the fiscal year;
       (4) section 1031 for assistance provided under the tobacco 
     worker transition program, but not to exceed $25,000,000 for 
     any fiscal year; and
       (5) subpart 9 of part A of title IV of the Higher Education 
     Act of 1965 for farmer opportunity grants, but not to 
     exceed--
       (A) $42,500,000 for each of the academic years 1999-2000 
     through 2003-2004;
       (B) $50,000,000 for each of the academic years 2004-2005 
     through 2008-2009;
       (C) $57,500,000 for each of the academic years 2009-2010 
     through 2013-2014;
       (D) $65,000,000 for each of the academic years 2014-2015 
     through 2018-2019; and
       (E) $72,500,000 for each of the academic years 2019-2020 
     through 2023-2024.

     SEC. 1013. BUDGETARY TREATMENT.

       This subtitle constitutes budget authority in advance of 
     appropriations Acts and represents the obligation of the 
     Federal Government to provide payments to States and eligible 
     persons in accordance with this title.

            Subtitle B--Tobacco Market Transition Assistance

     SEC. 1021. PAYMENTS FOR LOST TOBACCO QUOTA.

       (a) In General.--Beginning with the 1999 marketing year, 
     the Secretary shall make payments for lost tobacco quota to 
     eligible quota holders, quota lessees, and quota tenants as 
     reimbursement for lost tobacco quota.
       (b) Eligibility.--To be eligible to receive payments under 
     this section, a quota holder, quota lessee, or quota tenant 
     shall--
       (1) 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 make the demonstration required under paragraph (2); and
       (2) demonstrate to the satisfaction of the Secretary that, 
     with respect to the 1997 marketing year--
       (A) the producer was a quota holder and realized income (or 
     would have realized income, as determined by the Secretary, 
     but for a medical hardship or crop disaster during the 1997 
     marketing year) from the production of tobacco through--
       (i) the active production of tobacco;
       (ii) the lease and transfer of tobacco quota to another 
     farm;
       (iii) the rental of all or part of the farm of the quota 
     holder, including the right to produce tobacco, to another 
     tobacco producer; or
       (iv) the hiring of a quota tenant to produce tobacco;
       (B) the producer was a quota lessee; or
       (C) the producer was a quota tenant.
       (c) Base Quota Level.--
       (1) In general.--The Secretary shall determine, for each 
     quota holder, quota lessee, and quota tenant, the base quota 
     level for the 1995 through 1997 marketing years.
       (2) Quota holders.--The base quota level for a quota holder 
     shall be equal to the average tobacco farm marketing quota 
     established for the farm owned by the quota holder for the 
     1995 through 1997 marketing years.
       (3) Quota lessees.--The base quota level for a quota lessee 
     shall be equal to--
       (A) 50 percent of the average number of pounds of tobacco 
     quota established for the farm for the 1995 through 1997 
     marketing years--
       (i) that was leased and transferred to a farm owned by the 
     quota lessee; or
       (ii) that was rented to the quota lessee for the right to 
     produce the tobacco; less
       (B) 25 percent of the average number of pounds of tobacco 
     quota described in subparagraph (A) for which a quota tenant 
     was the principal producer of the tobacco quota.
       (4) Quota tenants.--The base quota level for a quota tenant 
     shall be equal to the sum of--
       (A) 50 percent of the average number of pounds of tobacco 
     quota established for a farm for the 1995 through 1997 
     marketing years--
       (i) that was owned by a quota holder; and
       (ii) for which the quota tenant was the principal producer 
     of the tobacco on the farm; and
       (B) 25 percent of the average number of pounds of tobacco 
     quota for the 1995 through 1997 marketing years--
       (i)(I) that was leased and transferred to a farm owned by 
     the quota lessee; or
       (II) for which the rights to produce the tobacco were 
     rented to the quota lessee; and
       (ii) for which the quota tenant was the principal producer 
     of the tobacco on the farm.
       (5) Marketing quotas other than poundage quotas.--
       (A) In general.--For each type of tobacco for which there 
     is a marketing quota or allotment (on an acreage basis), the 
     base quota level for each quota holder, quota lessee, or 
     quota tenant shall be determined in accordance with this 
     subsection (based on a poundage conversion) by multiplying--
       (i) the average tobacco farm marketing quota or allotment 
     for the 1995 through 1997 marketing years; and
       (ii) the average yield per acre for the farm for the type 
     of tobacco for the marketing years.
       (B) Yields not available.--If the average yield per acre is 
     not available for a farm, the Secretary shall calculate the 
     base quota for the quota holder, quota lessee, or quota 
     tenant (based on a poundage conversion) by determining the 
     amount equal to the product obtained by multiplying--
       (i) the average tobacco farm marketing quota or allotment 
     for the 1995 through 1997 marketing years; and
       (ii) the average county yield per acre for the county in 
     which the farm is located for the type of tobacco for the 
     marketing years.
       (d) Payments for Lost Tobacco Quota for Types of Tobacco 
     Other Than Flue-Cured Tobacco.--
       (1) Allocation of funds.--Of the amounts made available 
     under section 1011(d)(1) for payments for lost tobacco quota, 
     the Secretary shall make available for payments under this 
     subsection an amount that bears the same ratio to the amounts 
     made available as--
       (A) the sum of all national marketing quotas for all types 
     of tobacco other than flue-cured tobacco during the 1995 
     through 1997 marketing years; bears to
       (B) the sum of all national marketing quotas for all types 
     of tobacco during the 1995 through 1997 marketing years.
       (2) Option to relinquish quota.--

[[Page S5926]]

       (A) In general.--Each quota holder, for types of tobacco 
     other than flue-cured tobacco, shall be given the option to 
     relinquish the farm marketing quota or farm acreage allotment 
     of the quota holder in exchange for a payment made under 
     paragraph (3).
       (B) Notification.--A quota holder shall give notification 
     of the intention of the quota holder to exercise the option 
     at such time and in such manner as the Secretary may require, 
     but not later than January 15, 1999.
       (3) Payments for lost tobacco quota to quota holders 
     exercising options to relinquish quota.--
       (A) In general.--Subject to subparagraph (E), for each of 
     fiscal years 1999 through 2008, the Secretary shall make 
     annual payments for lost tobacco quota to each quota holder 
     that has relinquished the farm marketing quota or farm 
     acreage allotment of the quota holder under paragraph (2).
       (B) Amount.--The amount of a payment made to a quota holder 
     described in subparagraph (A) for a marketing year shall 
     equal \1/10\ of the lifetime limitation established under 
     subparagraph (E).
       (C) Timing.--The Secretary shall begin making annual 
     payments under this paragraph for the marketing year in which 
     the farm marketing quota or farm acreage allotment is 
     relinquished.
       (D) Additional payments.--The Secretary may increase annual 
     payments under this paragraph in accordance with paragraph 
     (7)(E) to the extent that funding is available.
       (E) Lifetime limitation on payments.--The total amount of 
     payments made under this paragraph to a quota holder shall 
     not exceed the product obtained by multiplying the base quota 
     level for the quota holder by $8 per pound.
       (4) Reissuance of quota.--
       (A) Reallocation to lessee or tenant.--If a quota holder 
     exercises an option to relinquish a tobacco farm marketing 
     quota or farm acreage allotment under paragraph (2), a quota 
     lessee or quota tenant that was the primary producer during 
     the 1997 marketing year of tobacco pursuant to the farm 
     marketing quota or farm acreage allotment, as determined by 
     the Secretary, shall be given the option of having an 
     allotment of the farm marketing quota or farm acreage 
     allotment reallocated to a farm owned by the quota lessee or 
     quota tenant.
       (B) Conditions for reallocation.--
       (i) Timing.--A quota lessee or quota tenant that is given 
     the option of having an allotment of a farm marketing quota 
     or farm acreage allotment reallocated to a farm owned by the 
     quota lessee or quota tenant under subparagraph (A) shall 
     have 1 year from the date on which a farm marketing quota or 
     farm acreage allotment is relinquished under paragraph (2) to 
     exercise the option.
       (ii) Limitation on acreage allotment.--In the case of a 
     farm acreage allotment, the acreage allotment determined for 
     any farm subsequent to any reallocation under subparagraph 
     (A) shall not exceed 50 percent of the acreage of cropland of 
     the farm owned by the quota lessee or quota tenant.
       (iii) Limitation on marketing quota.--In the case of a farm 
     marketing quota, the marketing quota determined for any farm 
     subsequent to any reallocation under subparagraph (A) shall 
     not exceed an amount determined by multiplying--

       (I) the average county farm yield, as determined by the 
     Secretary; and
       (II) 50 percent of the acreage of cropland of the farm 
     owned by the quota lessee or quota tenant.

       (C) Eligibility of lessee or tenant for payments.--If a 
     farm marketing quota or farm acreage allotment is reallocated 
     to a quota lessee or quota tenant under subparagraph (A)--
       (i) the quota lessee or quota tenant shall not be eligible 
     for any additional payments under paragraph (5) or (6) as a 
     result of the reallocation; and
       (ii) the base quota level for the quota lessee or quota 
     tenant shall not be increased as a result of the 
     reallocation.
       (D) Reallocation to quota holders within same county or 
     state.--
       (i) In general.--Except as provided in clause (ii), if 
     there was no quota lessee or quota tenant for the farm 
     marketing quota or farm acreage allotment for a type of 
     tobacco, or if no quota lessee or quota tenant exercises an 
     option of having an allotment of the farm marketing quota or 
     farm acreage allotment for a type of tobacco reallocated, the 
     Secretary shall reapportion the farm marketing quota or farm 
     acreage allotment among the remaining quota holders for the 
     type of tobacco within the same county.
       (ii) Cross-county leasing.--In a State in which cross-
     county leasing is authorized pursuant to section 319(l) of 
     the Agricultural Adjustment Act of 1938 (7 U.S.C. 1314e(l)), 
     the Secretary shall reapportion the farm marketing quota 
     among the remaining quota holders for the type of tobacco 
     within the same State.
       (iii) Eligibility of quota holder for payments.--If a farm 
     marketing quota is reapportioned to a quota holder under this 
     subparagraph--

       (I) the quota holder shall not be eligible for any 
     additional payments under paragraph (5) or (6) as a result of 
     the reapportionment; and
       (II) the base quota level for the quota holder shall not be 
     increased as a result of the reapportionment.

       (E) Special rule for tenant of leased tobacco.--If a quota 
     holder exercises an option to relinquish a tobacco farm 
     marketing quota or farm acreage allotment under paragraph 
     (2), the farm marketing quota or farm acreage allotment shall 
     be divided evenly between, and the option of reallocating the 
     farm marketing quota or farm acreage allotment shall be 
     offered in equal portions to, the quota lessee and to the 
     quota tenant, if--
       (i) during the 1997 marketing year, the farm marketing 
     quota or farm acreage allotment was leased and transferred to 
     a farm owned by the quota lessee; and
       (ii) the quota tenant was the primary producer, as 
     determined by the Secretary, of tobacco pursuant to the farm 
     marketing quota or farm acreage allotment.
       (5) Payments for lost tobacco quota to quota holders.--
       (A) In general.--Except as otherwise provided in this 
     subsection, during any marketing year in which the national 
     marketing quota for a type of tobacco is less than the 
     average national marketing quota for the 1995 through 1997 
     marketing years, the Secretary shall make payments for lost 
     tobacco quota to each quota holder, for types of tobacco 
     other than flue-cured tobacco, that is eligible under 
     subsection (b), and has not exercised an option to relinquish 
     a tobacco farm marketing quota or farm acreage allotment 
     under paragraph (2), in an amount that is equal to the 
     product obtained by multiplying--
       (i) the number of pounds by which the basic farm marketing 
     quota (or poundage conversion) is less than the base quota 
     level for the quota holder; and
       (ii) $4 per pound.
       (B) Poundage conversion for marketing quotas other than 
     poundage quotas.--
       (i) In general.--For each type of tobacco for which there 
     is a marketing quota or allotment (on an acreage basis), the 
     poundage conversion for each quota holder during a marketing 
     year shall be determined by multiplying--

       (I) the basic farm acreage allotment for the farm for the 
     marketing year; and
       (II) the average yield per acre for the farm for the type 
     of tobacco.

       (ii) Yield not available.--If the average yield per acre is 
     not available for a farm, the Secretary shall calculate the 
     poundage conversion for each quota holder during a marketing 
     year by multiplying--

       (I) the basic farm acreage allotment for the farm for the 
     marketing year; and
       (II) the average county yield per acre for the county in 
     which the farm is located for the type of tobacco.

       (6) Payments for lost tobacco quota to quota lessees and 
     quota tenants.--Except as otherwise provided in this 
     subsection, during any marketing year in which the national 
     marketing quota for a type of tobacco is less than the 
     average national marketing quota for the type of tobacco for 
     the 1995 through 1997 marketing years, the Secretary shall 
     make payments for lost tobacco quota to each quota lessee and 
     quota tenant, for types of tobacco other than flue-cured 
     tobacco, that is eligible under subsection (b) in an amount 
     that is equal to the product obtained by multiplying--
       (A) the percentage by which the national marketing quota 
     for the type of tobacco is less than the average national 
     marketing quota for the type of tobacco for the 1995 through 
     1997 marketing years;
       (B) the base quota level for the quota lessee or quota 
     tenant; and
       (C) $4 per pound.
       (7) Lifetime limitation on payments.--Except as otherwise 
     provided in this subsection, the total amount of payments 
     made under this subsection to a quota holder, quota lessee, 
     or quota tenant during the lifetime of the quota holder, 
     quota lessee, or quota tenant shall not exceed the product 
     obtained by multiplying--
       (A) the base quota level for the quota holder, quota 
     lessee, or quota tenant; and
       (B) $8 per pound.
       (8) Limitations on aggregate annual payments.--
       (A) In general.--Except as otherwise provided in this 
     paragraph, the total amount payable under this subsection for 
     any marketing year shall not exceed the amount made available 
     under paragraph (1).
       (B) Accelerated payments.--Paragraph (1) shall not apply if 
     accelerated payments for lost tobacco quota are made in 
     accordance with paragraph (12).
       (C) Reductions.--If the sum of the amounts determined under 
     paragraphs (3), (5), and (6) for a marketing year exceeds the 
     amount made available under paragraph (1), the Secretary 
     shall make a pro rata reduction in the amounts payable under 
     paragraphs (5) and (6) to quota holders, quota lessees, and 
     quota tenants under this subsection to ensure that the total 
     amount of payments for lost tobacco quota does not exceed the 
     amount made available under paragraph (1).
       (D) Rollover of payments for lost tobacco quota.--Subject 
     to subparagraph (A), if the Secretary makes a reduction in 
     accordance with subparagraph (C), the amount of the reduction 
     shall be applied to the next marketing year and added to the 
     payments for lost tobacco quota for the marketing year.
       (E) Additional payments to quota holders exercising option 
     to relinquish quota.--If the amount made available under 
     paragraph (1) exceeds the sum of the amounts determined under 
     paragraphs (3),

[[Page S5927]]

     (5), and (6) for a marketing year, the Secretary shall 
     distribute the amount of the excess pro rata to quota holders 
     that have exercised an option to relinquish a tobacco farm 
     marketing quota or farm acreage allotment under paragraph (2) 
     by increasing the amount payable to each such holder under 
     paragraph (3).
       (9) Subsequent sale and transfer of quota.--Effective 
     beginning with the 1999 marketing year, on the sale and 
     transfer of a farm marketing quota or farm acreage allotment 
     under section 316(g) or 319(g) of the Agricultural Adjustment 
     Act of 1938 (7 U.S.C. 1314b(g), 1314e(g))--
       (A) the person that sold and transferred the quota or 
     allotment shall have--
       (i) the base quota level attributable to the person reduced 
     by the base quota level attributable to the quota that is 
     sold and transferred; and
       (ii) the lifetime limitation on payments established under 
     paragraph (7) attributable to the person reduced by the 
     product obtained by multiplying--

       (I) the base quota level attributable to the quota; and
       (II) $8 per pound; and

       (B) if the quota or allotment has never been relinquished 
     by a previous quota holder under paragraph (2), the person 
     that acquired the quota shall have--
       (i) the base quota level attributable to the person 
     increased by the base quota level attributable to the quota 
     that is sold and transferred; and
       (ii) the lifetime limitation on payments established under 
     paragraph (7) attributable to the person--

       (I) increased by the product obtained by multiplying--

       (aa) the base quota level attributable to the quota; and
       (bb) $8 per pound; but

       (II) decreased by any payments under paragraph (5) for lost 
     tobacco quota previously made that are attributable to the 
     quota that is sold and transferred.

       (10) Sale or transfer of farm.--On the sale or transfer of 
     ownership of a farm that is owned by a quota holder, the base 
     quota level established under subsection (c), the right to 
     payments under paragraph (5), and the lifetime limitation on 
     payments established under paragraph (7) shall transfer to 
     the new owner of the farm to the same extent and in the same 
     manner as those provisions applied to the previous quota 
     holder.
       (11) Death of quota lessee or quota tenant.--If a quota 
     lessee or quota tenant that is entitled to payments under 
     this subsection dies and is survived by a spouse or 1 or more 
     dependents, the right to receive the payments shall transfer 
     to the surviving spouse or, if there is no surviving spouse, 
     to the surviving dependents in equal shares.
       (12) Acceleration of payments.--
       (A) In general.--On the occurrence of any of the events 
     described in subparagraph (B), the Secretary shall make an 
     accelerated lump sum payment for lost tobacco quota as 
     established under paragraphs (5) and (6) to each quota 
     holder, quota lessee, and quota tenant for any affected type 
     of tobacco in accordance with subparagraph (C).
       (B) Triggering events.--The Secretary shall make 
     accelerated payments under subparagraph (A) if after the date 
     of enactment of this Act--
       (i) subject to subparagraph (D), for 3 consecutive 
     marketing years, the national marketing quota or national 
     acreage allotment for a type of tobacco is less than 50 
     percent of the national marketing quota or national acreage 
     allotment for the type of tobacco for the 1998 marketing 
     year; or
       (ii) Congress repeals or makes ineffective, directly or 
     indirectly, any provision of--

       (I) section 316 of the Agricultural Adjustment Act of 1938 
     (7 U.S.C. 1314b);
       (II) section 319 of the Agricultural Adjustment Act of 1938 
     (7 U.S.C. 1314e);
       (III) section 106 of the Agricultural Act of 1949 (7 U.S.C. 
     1445);
       (IV) section 106A of the Agricultural Act of 1949 (7 U.S.C. 
     1445-1); or
       (V) section 106B of the Agricultural Act of 1949 (7 U.S.C. 
     1445-2).

       (C) Amount.--The amount of the accelerated payments made to 
     each quota holder, quota lessee, and quota tenant under this 
     subsection shall be equal to--
       (i) the amount of the lifetime limitation established for 
     the quota holder, quota lessee, or quota tenant under 
     paragraph (7); less
       (ii) any payments for lost tobacco quota received by the 
     quota holder, quota lessee, or quota tenant before the 
     occurrence of any of the events described in subparagraph 
     (B).
       (D) Referendum vote not a triggering event.--A referendum 
     vote of producers for any type of tobacco that results in the 
     national marketing quota or national acreage allotment not 
     being in effect for the type of tobacco shall not be 
     considered a triggering event under this paragraph.
       (13) Ban on subsequent sale or leasing of farm marketing 
     quota or farm acreage allotment to quota holders exercising 
     option to relinquish quota.--No quota holder that exercises 
     the option to relinquish a farm marketing quota or farm 
     acreage allotment for any type of tobacco under paragraph (2) 
     shall be eligible to acquire a farm marketing quota or farm 
     acreage allotment for the type of tobacco, or to obtain the 
     lease or transfer of a farm marketing quota or farm acreage 
     allotment for the type of tobacco, for a period of 25 crop 
     years after the date on which the quota or allotment was 
     relinquished.
       (e) Payments for Lost Tobacco Quota for Flue-Cured 
     Tobacco.--
       (1) Allocation of funds.--Of the amounts made available 
     under section 1011(d)(1) for payments for lost tobacco quota, 
     the Secretary shall make available for payments under this 
     subsection an amount that bears the same ratio to the amounts 
     made available as--
       (A) the sum of all national marketing quotas for flue-cured 
     tobacco during the 1995 through 1997 marketing years; bears 
     to
       (B) the sum of all national marketing quotas for all types 
     of tobacco during the 1995 through 1997 marketing years.
       (2) Relinquishment of quota.--
       (A) In general.--Each quota holder of flue-cured tobacco 
     shall relinquish the farm marketing quota or farm acreage 
     allotment in exchange for a payment made under paragraph (3) 
     due to the transition from farm marketing quotas as provided 
     under section 317 of the Agricultural Adjustment Act of 1938 
     for flue-cured tobacco to individual tobacco production 
     permits as provided under section 317A of the Agricultural 
     Adjustment Act of 1938 for flue-cured tobacco.
       (B) Notification.--The Secretary shall notify the quota 
     holders of the relinquishment of their quota or allotment at 
     such time and in such manner as the Secretary may require, 
     but not later than November 15, 1998.
       (3) Payments for lost flue-cured tobacco quota to quota 
     holders that relinquish quota.--
       (A) In general.--For each of fiscal years 1999 through 
     2008, the Secretary shall make annual payments for lost flue-
     cured tobacco to each quota holder that has relinquished the 
     farm marketing quota or farm acreage allotment of the quota 
     holder under paragraph (2).
       (B) Amount.--The amount of a payment made to a quota holder 
     described in subparagraph (A) for a marketing year shall 
     equal \1/10\ of the lifetime limitation established under 
     paragraph (6).
       (C) Timing.--The Secretary shall begin making annual 
     payments under this paragraph for the marketing year in which 
     the farm marketing quota or farm acreage allotment is 
     relinquished.
       (D) Additional payments.--The Secretary may increase annual 
     payments under this paragraph in accordance with paragraph 
     (7)(E) to the extent that funding is available.
       (4) Payments for lost flue-cured tobacco quota to quota 
     lessees and quota tenants that have not relinquished 
     permits.--
       (A) In general.--Except as otherwise provided in this 
     subsection, during any marketing year in which the national 
     marketing quota for flue-cured tobacco is less than the 
     average national marketing quota for the 1995 through 1997 
     marketing years, the Secretary shall make payments for lost 
     tobacco quota to each quota lessee or quota tenant that--
       (i) is eligible under subsection (b);
       (ii) has been issued an individual tobacco production 
     permit under section 317A(b) of the Agricultural Adjustment 
     Act of 1938; and
       (iii) has not exercised an option to relinquish the permit.
       (B) Amount.--The amount of a payment made to a quota lessee 
     or quota tenant described in subparagraph (A) for a marketing 
     year shall be equal to the product obtained by multiplying--
       (i) the number of pounds by which the individual marketing 
     limitation established for the permit is less than twice the 
     base quota level for the quota lessee or quota tenant; and
       (ii) $2 per pound.
       (5) Payments for lost flue-cured tobacco quota to quota 
     lessees and quota tenants that have relinquished permits.--
       (A) In general.--For each of fiscal years 1999 through 
     2008, the Secretary shall make annual payments for lost flue-
     cured tobacco quota to each quota lessee and quota tenant 
     that has relinquished an individual tobacco production permit 
     under section 317A(b)(5) of the Agricultural Adjustment Act 
     of 1938.
       (B) Amount.--The amount of a payment made to a quota lessee 
     or quota tenant described in subparagraph (A) for a marketing 
     year shall be equal to \1/10\ of the lifetime limitation 
     established under paragraph (6).
       (C) Timing.--The Secretary shall begin making annual 
     payments under this paragraph for the marketing year in which 
     the individual tobacco production permit is relinquished.
       (D) Additional payments.--The Secretary may increase annual 
     payments under this paragraph in accordance with paragraph 
     (7)(E) to the extent that funding is available.
       (E) Prohibition against permit expansion.--A quota lessee 
     or quota tenant that receives a payment under this paragraph 
     shall be ineligible to receive any new or increased tobacco 
     production permit from the county production pool established 
     under section 317A(b)(8) of the Agricultural Adjustment Act 
     of 1938.
       (6) Lifetime limitation on payments.--Except as otherwise 
     provided in this subsection, the total amount of payments 
     made under this subsection to a quota holder, quota lessee, 
     or quota tenant during the lifetime of the quota holder, 
     quota lessee, or quota tenant shall not exceed the product 
     obtained by multiplying--
       (A) the base quota level for the quota holder, quota 
     lessee, or quota tenant; and
       (B) $8 per pound.
       (7) Limitations on aggregate annual payments.--
       (A) In general.--Except as otherwise provided in this 
     paragraph, the total amount

[[Page S5928]]

     payable under this subsection for any marketing year shall 
     not exceed the amount made available under paragraph (1).
       (B) Accelerated payments.--Paragraph (1) shall not apply if 
     accelerated payments for lost flue-cured tobacco quota are 
     made in accordance with paragraph (9).
       (C) Reductions.--If the sum of the amounts determined under 
     paragraphs (3), (4), and (5) for a marketing year exceeds the 
     amount made available under paragraph (1), the Secretary 
     shall make a pro rata reduction in the amounts payable under 
     paragraph (4) to quota lessees and quota tenants under this 
     subsection to ensure that the total amount of payments for 
     lost flue-cured tobacco quota does not exceed the amount made 
     available under paragraph (1).
       (D) Rollover of payments for lost flue-cured tobacco 
     quota.--Subject to subparagraph (A), if the Secretary makes a 
     reduction in accordance with subparagraph (C), the amount of 
     the reduction shall be applied to the next marketing year and 
     added to the payments for lost flue-cured tobacco quota for 
     the marketing year.
       (E) Additional payments to quota holders exercising option 
     to relinquish quotas or permits, or to quota lessees or quota 
     tenants relinquishing permits.--If the amount made available 
     under paragraph (1) exceeds the sum of the amounts determined 
     under paragraphs (3), (4), and (5) for a marketing year, the 
     Secretary shall distribute the amount of the excess pro rata 
     to quota holders by increasing the amount payable to each 
     such holder under paragraphs (3) and (5).
       (8) Death of quota holder, quota lessee, or quota tenant.--
     If a quota holder, quota lessee or quota tenant that is 
     entitled to payments under paragraph (4) or (5) dies and is 
     survived by a spouse or 1 or more descendants, the right to 
     receive the payments shall transfer to the surviving spouse 
     or, if there is no surviving spouse, to the surviving 
     descendants in equal shares.
       (9) Acceleration of payments.--
       (A) In general.--On the occurrence of any of the events 
     described in subparagraph (B), the Secretary shall make an 
     accelerated lump sum payment for lost flue-cured tobacco 
     quota as established under paragraphs (3), (4), and (5) to 
     each quota holder, quota lessee, and quota tenant for flue-
     cured tobacco in accordance with subparagraph (C).
       (B) Triggering events.--The Secretary shall make 
     accelerated payments under subparagraph (A) if after the date 
     of enactment of this Act--
       (i) subject to subparagraph (D), for 3 consecutive 
     marketing years, the national marketing quota or national 
     acreage allotment for flue-cured tobacco is less than 50 
     percent of the national marketing quota or national acreage 
     allotment for flue-cured tobacco for the 1998 marketing year; 
     or
       (ii) Congress repeals or makes ineffective, directly or 
     indirectly, any provision of--

       (I) section 316 of the Agricultural Adjustment Act of 1938 
     (7 U.S.C. 1314b);
       (II) section 319 of the Agricultural Adjustment Act of 1938 
     (7 U.S.C. 1314e);
       (III) section 106 of the Agricultural Act of 1949 (7 U.S.C. 
     1445);
       (IV) section 106A of the Agricultural Act of 1949 (7 U.S.C. 
     1445-1);
       (V) section 106B of the Agricultural Act of 1949 (7 U.S.C. 
     1445-2); or
       (VI) section 317A of the Agricultural Adjustment Act of 
     1938.

       (C) Amount.--The amount of the accelerated payments made to 
     each quota holder, quota lessee, and quota tenant under this 
     subsection shall be equal to--
       (i) the amount of the lifetime limitation established for 
     the quota holder, quota lessee, or quota tenant under 
     paragraph (6); less
       (ii) any payments for lost flue-cured tobacco quota 
     received by the quota holder, quota lessee, or quota tenant 
     before the occurrence of any of the events described in 
     subparagraph (B).
       (D) Referendum vote not a triggering event.--A referendum 
     vote of producers for flue-cured tobacco that results in the 
     national marketing quota or national acreage allotment not 
     being in effect for flue-cured tobacco shall not be 
     considered a triggering event under this paragraph.

     SEC. 1022. INDUSTRY PAYMENTS FOR ALL DEPARTMENT COSTS 
                   ASSOCIATED WITH TOBACCO PRODUCTION.

       (a) In General.--The Secretary shall use such amounts 
     remaining unspent and obligated at the end of each fiscal 
     year to reimburse the Secretary for--
       (1) costs associated with the administration of programs 
     established under this title and amendments made by this 
     title;
       (2) costs associated with the administration of the tobacco 
     quota and price support programs administered by the 
     Secretary;
       (3) costs to the Federal Government of carrying out crop 
     insurance programs for tobacco;
       (4) costs associated with all agricultural research, 
     extension, or education activities associated with tobacco;
       (5) costs associated with the administration of loan 
     association and cooperative programs for tobacco producers, 
     as approved by the Secretary; and
       (6) any other costs incurred by the Department of 
     Agriculture associated with the production of tobacco.
       (b) Limitations.--Amounts made available under subsection 
     (a) may not be used--
       (1) to provide direct benefits to quota holders, quota 
     lessees, or quota tenants; or
       (2) in a manner that results in a decrease, or an increase 
     relative to other crops, in the amount of the crop insurance 
     premiums assessed to participating tobacco producers under 
     the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.).
       (c) Determinations.--Not later than September 30, 1998, and 
     each fiscal year thereafter, the Secretary shall determine--
       (1) the amount of costs described in subsection (a); and
       (2) the amount that will be provided under this section as 
     reimbursement for the costs.

     SEC. 1023. TOBACCO COMMUNITY ECONOMIC DEVELOPMENT GRANTS.

       (a) Authority.--The Secretary shall make grants to tobacco-
     growing States in accordance with this section to enable the 
     States to carry out economic development initiatives in 
     tobacco-growing communities.
       (b) Application.--To be eligible to receive payments under 
     this section, a State shall prepare and submit to the 
     Secretary an application at such time, in such manner, and 
     containing such information as the Secretary may require, 
     including--
       (1) a description of the activities that the State will 
     carry out using amounts received under the grant;
       (2) a designation of an appropriate State agency to 
     administer amounts received under the grant; and
       (3) a description of the steps to be taken to ensure that 
     the funds are distributed in accordance with subsection (e).
       (c) Amount of Grant.--
       (1) In general.--From the amounts available to carry out 
     this section for a fiscal year, the Secretary shall allot to 
     each State an amount that bears the same ratio to the amounts 
     available as the total farm income of the State derived from 
     the production of tobacco during the 1995 through 1997 
     marketing years (as determined under paragraph (2)) bears to 
     the total farm income of all States derived from the 
     production of tobacco during the 1995 through 1997 marketing 
     years.
       (2) Tobacco income.--For the 1995 through 1997 marketing 
     years, the Secretary shall determine the amount of farm 
     income derived from the production of tobacco in each State 
     and in all States.
       (d) Payments.--
       (1) In general.--A State that has an application approved 
     by the Secretary under subsection (b) shall be entitled to a 
     payment under this section in an amount that is equal to its 
     allotment under subsection (c).
       (2) Form of payments.--The Secretary may make payments 
     under this section to a State in installments, and in advance 
     or by way of reimbursement, with necessary adjustments on 
     account of overpayments or underpayments, as the Secretary 
     may determine.
       (3) Reallotments.--Any portion of the allotment of a State 
     under subsection (c) that the Secretary determines will not 
     be used to carry out this section in accordance with an 
     approved State application required under subsection (b), 
     shall be reallotted by the Secretary to other States in 
     proportion to the original allotments to the other States.
       (e) Use and Distribution of Funds.--
       (1) In general.--Amounts received by a State under this 
     section shall be used to carry out economic development 
     activities, including--
       (A) rural business enterprise activities described in 
     subsections (c) and (e) of section 310B of the Consolidated 
     Farm and Rural Development Act (7 U.S.C. 1932);
       (B) down payment loan assistance programs that are similar 
     to the program described in section 310E of the Consolidated 
     Farm and Rural Development Act (7 U.S.C. 1935);
       (C) activities designed to help create productive farm or 
     off-farm employment in rural areas to provide a more viable 
     economic base and enhance opportunities for improved incomes, 
     living standards, and contributions by rural individuals to 
     the economic and social development of tobacco communities;
       (D) activities that expand existing infrastructure, 
     facilities, and services to capitalize on opportunities to 
     diversify economies in tobacco communities and that support 
     the development of new industries or commercial ventures;
       (E) activities by agricultural organizations that provide 
     assistance directly to participating tobacco producers to 
     assist in developing other agricultural activities that 
     supplement tobacco-producing activities;
       (F) initiatives designed to create or expand locally owned 
     value-added processing and marketing operations in tobacco 
     communities;
       (G) technical assistance activities by persons to support 
     farmer-owned enterprises, or agriculture-based rural 
     development enterprises, of the type described in section 252 
     or 253 of the Trade Act of 1974 (19 U.S.C. 2342, 2343); and
       (H) initiatives designed to partially compensate tobacco 
     warehouse owners for lost revenues and assist the tobacco 
     warehouse owners in establishing successful business 
     enterprises.
       (2) Tobacco-growing counties.--Assistance may be provided 
     by a State under this section only to assist a county in the 
     State that has been determined by the Secretary to have in 
     excess of $100,000 in income derived from the production of 
     tobacco during 1 or more of the 1995 through 1997 marketing 
     years. For purposes of this section, the term ``tobacco-
     growing county'' includes a political subdivision surrounded 
     within a State by a county that has been determined by the

[[Page S5929]]

     Secretary to have in excess of $100,000 in income derived 
     from the production of tobacco during 1 or more of the 1995 
     through 1997 marketing years.
       (3) Distribution.--
       (A) Economic development activities.--Not less than 20 
     percent of the amounts received by a State under this section 
     shall be used to carry out--
       (i) economic development activities described in 
     subparagraph (E) or (F) of paragraph (1); or
       (ii) agriculture-based rural development activities 
     described in paragraph (1)(G).
       (B) Technical assistance activities.--Not less than 4 
     percent of the amounts received by a State under this section 
     shall be used to carry out technical assistance activities 
     described in paragraph (1)(G).
       (C) Tobacco warehouse owner initiatives.--Not less than 6 
     percent of the amounts received by a State under this section 
     during each of fiscal years 1999 through 2008 shall be used 
     to carry out initiatives described in paragraph (1)(H).
       (D) Tobacco-growing counties.--To be eligible to receive 
     payments under this section, a State shall demonstrate to the 
     Secretary that funding will be provided, during each 5-year 
     period for which funding is provided under this section, for 
     activities in each county in the State that has been 
     determined under paragraph (2) to have in excess of $100,000 
     in income derived from the production of tobacco, in amounts 
     that are at least equal to the product obtained by 
     multiplying--
       (i) the ratio that the tobacco production income in the 
     county determined under paragraph (2) bears to the total 
     tobacco production income for the State determined under 
     subsection (c); and
       (ii) 50 percent of the total amounts received by a State 
     under this section during the 5-year period.
       (f) Preferences in Hiring.--A State may require recipients 
     of funds under this section to provide a preference in 
     employment to--
       (1) an individual who--
       (A) during the 1998 calendar year, was employed in the 
     manufacture, processing, or warehousing of tobacco or tobacco 
     products, or resided, in a county described in subsection 
     (e)(2); and
       (B) is eligible for assistance under the tobacco worker 
     transition program established under section 1031; or
       (2) an individual who--
       (A) during the 1998 marketing year, carried out tobacco 
     quota or relevant tobacco production activities in a county 
     described in subsection (e)(2);
       (B) is eligible for a farmer opportunity grant under 
     subpart 9 of part A of title IV of the Higher Education Act 
     of 1965; and
       (C) has successfully completed a course of study at an 
     institution of higher education.
       (g) Maintenance of Effort.--
       (1) In general.--Subject to paragraph (2), a State shall 
     provide an assurance to the Secretary that the amount of 
     funds expended by the State and all counties in the State 
     described in subsection (e)(2) for any activities funded 
     under this section for a fiscal year is not less than 90 
     percent of the amount of funds expended by the State and 
     counties for the activities for the preceding fiscal year.
       (2) Reduction of grant amount.--If a State does not provide 
     an assurance described in paragraph (1), the Secretary shall 
     reduce the amount of the grant determined under subsection 
     (c) by an amount equal to the amount by which the amount of 
     funds expended by the State and counties for the activities 
     is less than 90 percent of the amount of funds expended by 
     the State and counties for the activities for the preceding 
     fiscal year, as determined by the Secretary.
       (3) Federal funds.--For purposes of this subsection, the 
     amount of funds expended by a State or county shall not 
     include any amounts made available by the Federal Government.

     SEC. 1024. FLUE-CURED TOBACCO PRODUCTION PERMITS.

       The Agricultural Adjustment Act of 1938 is amended by 
     inserting after section 317 (7 U.S.C. 1314c) the following:

     ``SEC. 317A. FLUE-CURED TOBACCO PRODUCTION PERMITS.

       ``(a) Definitions.--In this section:
       ``(1) Individual acreage limitation.--The term `individual 
     acreage limitation' means the number of acres of flue-cured 
     tobacco that may be planted by the holder of a permit during 
     a marketing year, calculated--
       ``(A) prior to--
       ``(i) any increase or decrease in the number due to 
     undermarketings or overmarketings; and
       ``(ii) any reduction under subsection (i); and
       ``(B) in a manner that ensures that--
       ``(i) the total of all individual acreage limitations is 
     equal to the national acreage allotment, less the reserve 
     provided under subsection (h); and
       ``(ii) the individual acreage limitation for a marketing 
     year bears the same ratio to the individual acreage 
     limitation for the previous marketing year as the ratio that 
     the national acreage allotment for the marketing year bears 
     to the national acreage allotment for the previous marketing 
     year, subject to adjustments by the Secretary to account for 
     any reserve provided under subsection (h).
       ``(2) Individual marketing limitation.--The term 
     `individual marketing limitation' means the number of pounds 
     of flue-cured tobacco that may be marketed by the holder of a 
     permit during a marketing year, calculated--
       ``(A) prior to--
       ``(i) any increase or decrease in the number due to 
     undermarketings or overmarketings; and
       ``(ii) any reduction under subsection (i); and
       ``(B) in a manner that ensures that--
       ``(i) the total of all individual marketing limitations is 
     equal to the national marketing quota, less the reserve 
     provided under subsection (h); and
       ``(ii) the individual marketing limitation for a marketing 
     year is obtained by multiplying the individual acreage 
     limitation by the permit yield, prior to any adjustment for 
     undermarketings or overmarketings.
       ``(3) Individual tobacco production permit.--The term 
     `individual tobacco production permit' means a permit issued 
     by the Secretary to a person authorizing the production of 
     flue-cured tobacco for any marketing year during which this 
     section is effective.
       ``(4) National acreage allotment.--The term `national 
     acreage allotment' means the quantity determined by 
     dividing--
       ``(A) the national marketing quota; by
       ``(B) the national average yield goal.
       ``(5) National average yield goal.--The term `national 
     average yield goal' means the national average yield for 
     flue-cured tobacco during the 5 marketing years immediately 
     preceding the marketing year for which the determination is 
     being made.
       ``(6) National marketing quota.--For the 1999 and each 
     subsequent crop of flue-cured tobacco, the term `national 
     marketing quota' for a marketing year means the quantity of 
     flue-cured tobacco, as determined by the Secretary, that is 
     not more than 103 percent nor less than 97 percent of the 
     total of--
       ``(A) the aggregate of the quantities of flue-cured tobacco 
     that domestic manufacturers of cigarettes estimate that the 
     manufacturers intend to purchase on the United States auction 
     markets or from producers during the marketing year, as 
     compiled and determined under section 320A;
       ``(B) the average annual quantity of flue-cured tobacco 
     exported from the United States during the 3 marketing years 
     immediately preceding the marketing year for which the 
     determination is being made; and
       ``(C) the quantity, if any, of flue-cured tobacco that the 
     Secretary, in the discretion of the Secretary, determines is 
     necessary to increase or decrease the inventory of the 
     producer-owned cooperative marketing association that has 
     entered into a loan agreement with the Commodity Credit 
     Corporation to make price support available to producers of 
     flue-cured tobacco to establish or maintain the inventory at 
     the reserve stock level for flue-cured tobacco.
       ``(7) Permit yield.--The term `permit yield' means the 
     yield of tobacco per acre for an individual tobacco 
     production permit holder that is--
       ``(A) based on a preliminary permit yield that is equal to 
     the average yield during the 5 marketing years immediately 
     preceding the marketing year for which the determination is 
     made in the county where the holder of the permit is 
     authorized to plant flue-cured tobacco, as determined by the 
     Secretary, on the basis of actual yields of farms in the 
     county; and
       ``(B) adjusted by a weighted national yield factor 
     calculated by--
       ``(i) multiplying each preliminary permit yield by the 
     individual acreage limitation, prior to adjustments for 
     overmarketings, undermarketings, or reductions required under 
     subsection (i); and
       ``(ii) dividing the sum of the products under clause (i) 
     for all flue-cured individual tobacco production permit 
     holders by the national acreage allotment.
       ``(b) Initial Issuance of Permits.--
       ``(1) Termination of flue-cured marketing quotas.--On the 
     date of enactment of the National Tobacco Policy and Youth 
     Smoking Reduction Act, farm marketing quotas as provided 
     under section 317 shall no longer be in effect for flue-cured 
     tobacco.
       ``(2) Issuance of permits to quota holders that were 
     principal producers.--
       ``(A) In general.--By January 15, 1999, each individual 
     quota holder under section 317 that was a principal producer 
     of flue-cured tobacco during the 1998 marketing year, as 
     determined by the Secretary, shall be issued an individual 
     tobacco production permit under this section.
       ``(B) Notification.--The Secretary shall notify the holder 
     of each permit of the individual acreage limitation and the 
     individual marketing limitation applicable to the holder for 
     each marketing year.
       ``(C) Individual acreage limitation for 1999 marketing 
     year.--In establishing the individual acreage limitation for 
     the 1999 marketing year under this section, the farm acreage 
     allotment that was allotted to a farm owned by the quota 
     holder for the 1997 marketing year shall be considered the 
     individual acreage limitation for the previous marketing 
     year.
       ``(D) Individual marketing limitation for 1999 marketing 
     year.--In establishing the individual marketing limitation 
     for the 1999 marketing year under this section, the farm 
     marketing quota that was allotted to a farm owned by the 
     quota holder for the 1997 marketing year shall be considered 
     the individual marketing limitation for the previous 
     marketing year.
       ``(3) Quota holders that were not principal producers.--

[[Page S5930]]

       ``(A) In general.--Except as provided in subparagraph (B), 
     on approval through a referendum under subsection (c)--
       ``(i) each person that was a quota holder under section 317 
     but that was not a principal producer of flue-cured tobacco 
     during the 1997 marketing year, as determined by the 
     Secretary, shall not be eligible to own a permit; and
       ``(ii) the Secretary shall not issue any permit during the 
     25-year period beginning on the date of enactment of this Act 
     to any person that was a quota holder and was not the 
     principal producer of flue-cured tobacco during the 1997 
     marketing year.
       ``(B) Medical hardships and crop disasters.--Subparagraph 
     (A) shall not apply to a person that would have been the 
     principal producer of flue-cured tobacco during the 1997 
     marketing year but for a medical hardship or crop disaster 
     that occurred during the 1997 marketing year.
       ``(C) Administration.--The Secretary shall issue 
     regulations--
       ``(i) defining the term `person' for the purpose of this 
     paragraph; and
       ``(ii) prescribing such rules as the Secretary determines 
     are necessary to ensure a fair and reasonable application of 
     the prohibition established under this paragraph.
       ``(4) Issuance of permits to principal producers of flue-
     cured tobacco.--
       ``(A) In general.--By January 15, 1999, each individual 
     quota lessee or quota tenant (as defined in section 1002 of 
     the LEAF Act) that was the principal producer of flue-cured 
     tobacco during the 1997 marketing year, as determined by the 
     Secretary, shall be issued an individual tobacco production 
     permit under this section.
       ``(B) Individual acreage limitations.--In establishing the 
     individual acreage limitation for the 1999 marketing year 
     under this section, the farm acreage allotment that was 
     allotted to a farm owned by a quota holder for whom the quota 
     lessee or quota tenant was the principal producer of flue-
     cured tobacco during the 1997 marketing year shall be 
     considered the individual acreage limitation for the previous 
     marketing year.
       ``(C) Individual marketing limitations.--In establishing 
     the individual marketing limitation for the 1999 marketing 
     year under this section, the individual marketing limitation 
     for the previous year for an individual described in this 
     paragraph shall be calculated by multiplying--
       ``(i) the farm marketing quota that was allotted to a farm 
     owned by a quota holder for whom the quota lessee or quota 
     holder was the principal producer of flue-cured tobacco 
     during the 1997 marketing year, by
       ``(ii) the ratio that--

       ``(I) the sum of all flue-cured tobacco farm marketing 
     quotas for the 1997 marketing year prior to adjusting for 
     undermarketing and overmarketing; bears to
       ``(II) the sum of all flue-cured tobacco farm marketing 
     quotas for the 1998 marketing year, after adjusting for 
     undermarketing and overmarketing.

       ``(D) Special rule for tenant of leased flue-cured 
     tobacco.--If the farm marketing quota or farm acreage 
     allotment of a quota holder was produced pursuant to an 
     agreement under which a quota lessee rented land from a quota 
     holder and a quota tenant was the primary producer, as 
     determined by the Secretary, of flue-cured tobacco pursuant 
     to the farm marketing quota or farm acreage allotment, the 
     farm marketing quota or farm acreage allotment shall be 
     divided proportionately between the quota lessee and quota 
     tenant for purposes of issuing individual tobacco production 
     permits under this paragraph.
       ``(5) Option of quota lessee or quota tenant to relinquish 
     permit.--
       ``(A) In general.--Each quota lessee or quota tenant that 
     is issued an individual tobacco production permit under 
     paragraph (4) shall be given the option of relinquishing the 
     permit in exchange for payments made under section 1021(e)(5) 
     of the LEAF Act.
       ``(B) Notification.--A quota lessee or quota tenant that is 
     issued an individual tobacco production permit shall give 
     notification of the intention to exercise the option at such 
     time and in such manner as the Secretary may require, but not 
     later than 45 days after the permit is issued.
       ``(C) Reallocation of permit.--The Secretary shall add the 
     authority to produce flue-cured tobacco under the individual 
     tobacco production permit relinquished under this paragraph 
     to the county production pool established under paragraph (8) 
     for reallocation by the appropriate county committee.
       ``(6) Active producer requirement.--
       ``(A) Requirement for sharing risk.--No individual tobacco 
     production permit shall be issued to, or maintained by, a 
     person that does not fully share in the risk of producing a 
     crop of flue-cured tobacco.
       ``(B) Criteria for sharing risk.--For purposes of this 
     paragraph, a person shall be considered to have fully shared 
     in the risk of production of a crop if--
       ``(i) the investment of the person in the production of the 
     crop is not less than 100 percent of the costs of production 
     associated with the crop;
       ``(ii) the amount of the person's return on the investment 
     is dependent solely on the sale price of the crop; and
       ``(iii) the person may not receive any of the return before 
     the sale of the crop.
       ``(C) Persons not sharing risk.--
       ``(i) Forfeiture.--Any person that fails to fully share in 
     the risks of production under this paragraph shall forfeit an 
     individual tobacco production permit if, after notice and 
     opportunity for a hearing, the appropriate county committee 
     determines that the conditions for forfeiture exist.
       ``(ii) Reallocation.--The Secretary shall add the authority 
     to produce flue-cured tobacco under the individual tobacco 
     production permit forfeited under this subparagraph to the 
     county production pool established under paragraph (8) for 
     reallocation by the appropriate county committee.
       ``(D) Notice.--Notice of any determination made by a county 
     committee under subparagraph (C) shall be mailed, as soon as 
     practicable, to the person involved.
       ``(E) Review.--If the person is dissatisfied with the 
     determination, the person may request, not later than 15 days 
     after notice of the determination is received, a review of 
     the determination by a local review committee under the 
     procedures established under section 363 for farm marketing 
     quotas.
       ``(7) County of origin requirement.--For the 1999 and each 
     subsequent crop of flue-cured tobacco, all tobacco produced 
     pursuant to an individual tobacco production permit shall be 
     produced in the same county in which was produced the tobacco 
     produced during the 1997 marketing year pursuant to the farm 
     marketing quota or farm acreage allotment on which the 
     individual tobacco production permit is based.
       ``(8) County production pool.--
       ``(A) In general.--The authority to produce flue-cured 
     tobacco under an individual tobacco production permit that is 
     forfeited, relinquished, or surrendered within a county may 
     be reallocated by the appropriate county committee to tobacco 
     producers located in the same county that apply to the 
     committee to produce flue-cured tobacco under the authority.
       ``(B) Priority.--In reallocating individual tobacco 
     production permits under this paragraph, a county committee 
     shall provide a priority to--
       ``(i) an active tobacco producer that controls the 
     authority to produce a quantity of flue-cured tobacco under 
     an individual tobacco production permit that is equal to or 
     less than the average number of pounds of flue-cured tobacco 
     that was produced by the producer during each of the 1995 
     through 1997 marketing years, as determined by the Secretary; 
     and
       ``(ii) a new tobacco producer.
       ``(C) Criteria.--Individual tobacco production permits 
     shall be reallocated by the appropriate county committee 
     under this paragraph in a fair and equitable manner after 
     taking into consideration--
       ``(i) the experience of the producer;
       ``(ii) the availability of land, labor, and equipment for 
     the production of tobacco;
       ``(iii) crop rotation practices; and
       ``(iv) the soil and other physical factors affecting the 
     production of tobacco.
       ``(D) Medical hardships and crop disasters.--
     Notwithstanding any other provision of this Act, the 
     Secretary may issue an individual tobacco production permit 
     under this paragraph to a producer that is otherwise 
     ineligible for the permit due to a medical hardship or crop 
     disaster that occurred during the 1997 marketing year.
       ``(c) Referendum.--
       ``(1) Announcement of quota and allotment.--Not later than 
     December 15, 1998, the Secretary pursuant to subsection (b) 
     shall determine and announce--
       ``(A) the quantity of the national marketing quota for 
     flue-cured tobacco for the 1999 marketing year; and
       ``(B) the national acreage allotment and national average 
     yield goal for the 1999 crop of flue-cured tobacco.
       ``(2) Special referendum.--Not later than 30 days after the 
     announcement of the quantity of the national marketing quota 
     in 2001, the Secretary shall conduct a special referendum of 
     the tobacco production permit holders that were the principal 
     producers of flue-cured tobacco of the 1997 crop to determine 
     whether the producers approve or oppose the continuation of 
     individual tobacco production permits on an acreage-poundage 
     basis as provided in this section for the 2002 through 2004 
     marketing years.
       ``(3) Approval of permits.--If the Secretary determines 
     that more than 66\2/3\ percent of the producers voting in the 
     special referendum approve the establishment of individual 
     tobacco production permits on an acreage-poundage basis--
       ``(A) individual tobacco production permits on an acreage-
     poundage basis as provided in this section shall be in effect 
     for the 2002 through 2004 marketing years; and
       ``(B) marketing quotas on an acreage-poundage basis shall 
     cease to be in effect for the 2002 through 2004 marketing 
     years.
       ``(4) Disapproval of permits.--If individual tobacco 
     production permits on an acreage-poundage basis are not 
     approved by more than 66\2/3\ percent of the producers voting 
     in the referendum, no marketing quotas on an acreage-poundage 
     basis shall continue in effect that were proclaimed under 
     section 317 prior to the referendum.
       ``(5) Applicable marketing years.--If individual tobacco 
     production permits have been made effective for flue-cured 
     tobacco on an acreage-poundage basis pursuant to this 
     subsection, the Secretary shall, not later than December 15 
     of any future marketing year, announce a national marketing 
     quota for that type of tobacco for the next 3 succeeding 
     marketing years if the marketing year is the last year of 3 
     consecutive years for which individual tobacco production 
     permits previously proclaimed will be in effect.

[[Page S5931]]

       ``(d) Annual Announcement of National Marketing Quota.--The 
     Secretary shall determine and announce the national marketing 
     quota, national acreage allotment, and national average yield 
     goal for the second and third marketing years of any 3-year 
     period for which individual tobacco production permits are in 
     effect on or before the December 15 immediately preceding the 
     beginning of the marketing year to which the quota, 
     allotment, and goal apply.
       ``(e) Annual Announcement of Individual Tobacco Production 
     Permits.--If a national marketing quota, national acreage 
     allotment, and national average yield goal are determined and 
     announced, the Secretary shall provide for the determination 
     of individual tobacco production permits, individual acreage 
     limitations, and individual marketing limitations under this 
     section for the crop and marketing year covered by the 
     determinations.
       ``(f) Assignment of Tobacco Production Permits.--
       ``(1) Limitation to same county.--Each individual tobacco 
     production permit holder shall assign the individual acreage 
     limitation and individual marketing limitation to 1 or more 
     farms located within the county of origin of the individual 
     tobacco production permit.
       ``(2) Filing with county committee.--The assignment of an 
     individual acreage limitation and individual marketing 
     limitation shall not be effective until evidence of the 
     assignment, in such form as required by the Secretary, is 
     filed with and determined by the county committee for the 
     county in which the farm involved is located.
       ``(3) Limitation on tillable cropland.--The total acreage 
     assigned to any farm under this subsection shall not exceed 
     the acreage of cropland on the farm.
       ``(g) Prohibition on Sale or Leasing of Individual Tobacco 
     Production Permits.--
       ``(1) In general.--Except as provided in paragraphs (2) and 
     (3), the Secretary shall not permit the sale and transfer, or 
     lease and transfer, of an individual tobacco production 
     permit issued under this section.
       ``(2) Transfer to descendants.--
       ``(A) Death.--In the case of the death of a person to whom 
     an individual tobacco production permit has been issued under 
     this section, the permit shall transfer to the surviving 
     spouse of the person or, if there is no surviving spouse, to 
     surviving direct descendants of the person.
       ``(B) Temporary inability to farm.--In the case of the 
     death of a person to whom an individual tobacco production 
     permit has been issued under this section and whose 
     descendants are temporarily unable to produce a crop of 
     tobacco, the Secretary may hold the license in the name of 
     the descendants for a period of not more than 18 months.
       ``(3) Voluntary transfers.--A person that is eligible to 
     obtain an individual tobacco production permit under this 
     section may at any time transfer all or part of the permit to 
     the person's spouse or direct descendants that are actively 
     engaged in the production of tobacco.
       ``(h) Reserve.--
       ``(1) In general.--For each marketing year for which 
     individual tobacco production permits are in effect under 
     this section, the Secretary may establish a reserve from the 
     national marketing quota in a quantity equal to not more than 
     1 percent of the national marketing quota to be available 
     for--
       ``(A) making corrections of errors in individual acreage 
     limitations and individual marketing limitations;
       ``(B) adjusting inequities; and
       ``(C) establishing individual tobacco production permits 
     for new tobacco producers (except that not less than two-
     thirds of the reserve shall be for establishing such permits 
     for new tobacco producers).
       ``(2) Eligible persons.--To be eligible for a new 
     individual tobacco production permit, a producer must not 
     have been the principal producer of tobacco during the 
     immediately preceding 5 years.
       ``(3) Apportionment for new producers.--The part of the 
     reserve held for apportionment to new individual tobacco 
     producers shall be allotted on the basis of--
       ``(A) land, labor, and equipment available for the 
     production of tobacco;
       ``(B) crop rotation practices;
       ``(C) soil and other physical factors affecting the 
     production of tobacco; and
       ``(D) the past tobacco-producing experience of the 
     producer.
       ``(4) Permit yield.--The permit yield for any producer for 
     which a new individual tobacco production permit is 
     established shall be determined on the basis of available 
     productivity data for the land involved and yields for 
     similar farms in the same county.
       ``(i) Penalties.--
       ``(1) Production on other farms.--If any quantity of 
     tobacco is marketed as having been produced under an 
     individual acreage limitation or individual marketing 
     limitation assigned to a farm but was produced on a different 
     farm, the individual acreage limitation or individual 
     marketing limitation for the following marketing year shall 
     be forfeited.
       ``(2) False report.--If a person to which an individual 
     tobacco production permit is issued files, or aids or 
     acquiesces in the filing of, a false report with respect to 
     the assignment of an individual acreage limitation or 
     individual marketing limitation for a quantity of tobacco, 
     the individual acreage limitation or individual marketing 
     limitation for the following marketing year shall be 
     forfeited.
       ``(j) Marketing Penalties.--
       ``(1) In general.--When individual tobacco production 
     permits under this section are in effect, provisions with 
     respect to penalties for the marketing of excess tobacco and 
     the other provisions contained in section 314 shall apply in 
     the same manner and to the same extent as they would apply 
     under section 317(g) if farm marketing quotas were in effect.
       ``(2) Production on other farms.--If a producer falsely 
     identifies tobacco as having been produced on or marketed 
     from a farm to which an individual acreage limitation or 
     individual marketing limitation has been assigned, future 
     individual acreage limitations and individual marketing 
     limitations shall be forfeited.''.

     SEC. 1025. MODIFICATIONS IN FEDERAL TOBACCO PROGRAMS.

       (a) Program Referenda.--Section 312(c) of the Agricultural 
     Adjustment Act of 1938 (7 U.S.C. 1312(c)) is amended--
       (1) by striking ``(c) Within thirty'' and inserting the 
     following:
       ``(c) Referenda on Quotas.--
       ``(1) In general.--Not later than 30''; and
       (2) by adding at the end the following:
       ``(2) Referenda on program changes.--
       ``(A) In general.--In the case of any type of tobacco for 
     which marketing quotas are in effect, on the receipt of a 
     petition from more than 5 percent of the producers of that 
     type of tobacco in a State, the Secretary shall conduct a 
     statewide referendum on any proposal related to the lease and 
     transfer of tobacco quota within a State requested by the 
     petition that is authorized under this part.
       ``(B) Approval of proposals.--If a majority of producers of 
     the type of tobacco in the State approve a proposal in a 
     referendum conducted under subparagraph (A), the Secretary 
     shall implement the proposal in a manner that applies to all 
     producers and quota holders of that type of tobacco in the 
     State.''.
       (b) Purchase Requirements.--Section 320B of the 
     Agricultural Adjustment Act of 1938 (7 U.S.C. 1314h) is 
     amended--
       (1) in subsection (c)--
       (A) by striking ``(c) The amount'' and inserting ``(c) 
     Amount of Penalty.--For the 1998 and subsequent marketing 
     years, the amount''; and
       (B) by striking paragraph (1) and inserting the following:
       ``(1) 105 percent of the average market price for the type 
     of tobacco involved during the preceding marketing year; 
     and''.
       (c) Elimination of Tobacco Marketing Assessment.--
       (1) In general.--Section 106 of the Agricultural Act of 
     1949 (7 U.S.C. 1445) is amended by striking subsection (g).
       (2) Conforming amendment.--Section 422(c) of the Uruguay 
     Round Agreements Act (Public Law 103-465; 7 U.S.C. 1445 note) 
     is amended by striking ``section 106(g), 106A, or 106B of the 
     Agricultural Act of 1949 (7 U.S.C. 1445(g), 1445-1, or 1445-
     2)'' and inserting ``section 106A or 106B of the Agricultural 
     Act of 1949 (7 U.S.C. 1445-1, 1445-2)''.
       (d) Adjustment for Land Rental Costs.--Section 106 of the 
     Agricultural Act of 1949 (7 U.S.C. 1445) is amended by adding 
     at the end the following:
       ``(h) Adjustment for Land Rental Costs.--For each of the 
     1999 and 2000 marketing years for flue-cured tobacco, after 
     consultation with producers, State farm organizations and 
     cooperative associations, the Secretary shall make an 
     adjustment in the price support level for flue-cured tobacco 
     equal to the annual change in the average cost per pound to 
     flue-cured producers, as determined by the Secretary, under 
     agreements through which producers rent land to produce flue-
     cured tobacco.''.
       (e) Fire-Cured and Dark Air-Cured Tobacco Programs.--
       (1) Limitation on transfers.--Section 318(g) of the 
     Agricultural Adjustment Act of 1938 (7 U.S.C. 13l4d(g)) is 
     amended--
       (A) by striking ``ten'' and inserting ``30''; and
       (B) by inserting ``during any crop year'' after 
     ``transferred to any farm''.
       (2) Loss of allotment or quota through underplanting.--
     Section 318 of the Agricultural Adjustment Act of 1938 (7 
     U.S.C. 1314d) is amended by adding at the end the following:
       ``(k) Loss of Allotment or Quota Through Underplanting.--
     Effective for the 1999 and subsequent marketing years, no 
     acreage allotment or acreage-poundage quota, other than a new 
     marketing quota, shall be established for a farm on which no 
     fire-cured or dark air-cured tobacco was planted or 
     considered planted during at least 2 of the 3 crop years 
     immediately preceding the crop year for which the acreage 
     allotment or acreage-poundage quota would otherwise be 
     established.''.
       (f) Expansion of Types of Tobacco Subject to No Net Cost 
     Assessment.--
       (1) No net cost tobacco fund.--Section 106A(d)(1)(A) of the 
     Agricultural Act of 1949 (7 U.S.C. 1445-1(d)(1)(A)) is 
     amended--
       (A) in clause (ii), by inserting after ``Burley quota 
     tobacco'' the following: ``and fire-cured and dark air-cured 
     quota tobacco''; and
       (B) in clause (iii)--
       (i) in the matter preceding subclause (I), by striking 
     ``Flue-cured or Burley tobacco'' and inserting ``each kind of 
     tobacco for which price support is made available under this 
     Act, and each kind of like tobacco,''; and
       (ii) by striking subclause (II) and inserting the 
     following:

       ``(II) the sum of the amount of the per pound producer 
     contribution and purchaser

[[Page S5932]]

     assessment (if any) for the kind of tobacco payable under 
     clauses (i) and (ii); and''.

       (2) No net cost tobacco account.--Section 106B(d)(1) of the 
     Agricultural Act of 1949 (7 U.S.C. 1445-2(d)(1)) is amended--
       (A) in subparagraph (B), by inserting after ``Burley quota 
     tobacco'' the following: ``and fire-cured and dark air-cured 
     tobacco''; and
       (B) in subparagraph (C), by striking ``Flue-cured and 
     Burley tobacco'' and inserting ``each kind of tobacco for 
     which price support is made available under this Act, and 
     each kind of like tobacco,''.

          Subtitle C--Farmer and Worker Transition Assistance

     SEC. 1031. TOBACCO WORKER TRANSITION PROGRAM.

       (a) Group Eligibility Requirements.--
       (1) Criteria.--A group of workers (including workers in any 
     firm or subdivision of a firm involved in the manufacture, 
     processing, or warehousing of tobacco or tobacco products) 
     shall be certified as eligible to apply for adjustment 
     assistance under this section pursuant to a petition filed 
     under subsection (b) if the Secretary of Labor determines 
     that a significant number or proportion of the workers in the 
     workers' firm or an appropriate subdivision of the firm have 
     become totally or partially separated, or are threatened to 
     become totally or partially separated, and--
       (A) the sales or production, or both, of the firm or 
     subdivision have decreased absolutely; and
       (B) the implementation of the national tobacco settlement 
     contributed importantly to the workers' separation or threat 
     of separation and to the decline in the sales or production 
     of the firm or subdivision.
       (2) Definition of contributed importantly.--In paragraph 
     (1)(B), the term ``contributed importantly'' means a cause 
     that is important but not necessarily more important than any 
     other cause.
       (3) Regulations.--The Secretary shall issue regulations 
     relating to the application of the criteria described in 
     paragraph (1) in making preliminary findings under subsection 
     (b) and determinations under subsection (c).
       (b) Preliminary Findings and Basic Assistance.--
       (1) Filing of petitions.--A petition for certification of 
     eligibility to apply for adjustment assistance under this 
     section may be filed by a group of workers (including workers 
     in any firm or subdivision of a firm involved in the 
     manufacture, processing, or warehousing of tobacco or tobacco 
     products) or by their certified or recognized union or other 
     duly authorized representative with the Governor of the State 
     in which the workers' firm or subdivision thereof is located.
       (2) Findings and assistance.--On receipt of a petition 
     under paragraph (1), the Governor shall--
       (A) notify the Secretary that the Governor has received the 
     petition;
       (B) within 10 days after receiving the petition--
       (i) make a preliminary finding as to whether the petition 
     meets the criteria described in subsection (a)(1); and
       (ii) transmit the petition, together with a statement of 
     the finding under clause (i) and reasons for the finding, to 
     the Secretary for action under subsection (c); and
       (C) if the preliminary finding under subparagraph (B)(i) is 
     affirmative, ensure that rapid response and basic 
     readjustment services authorized under other Federal laws are 
     made available to the workers.
       (c) Review of Petitions by Secretary; Certifications.--
       (1) In general.--The Secretary, within 30 days after 
     receiving a petition under subsection (b)(2)(B)(ii), shall 
     determine whether the petition meets the criteria described 
     in subsection (a)(1). On a determination that the petition 
     meets the criteria, the Secretary shall issue to workers 
     covered by the petition a certification of eligibility to 
     apply for the assistance described in subsection (d).
       (2) Denial of certification.--On the denial of a 
     certification with respect to a petition under paragraph (1), 
     the Secretary shall review the petition in accordance with 
     the requirements of other applicable assistance programs to 
     determine if the workers may be certified under the other 
     programs.
       (d) Comprehensive Assistance.--
       (1) In general.--Workers covered by a certification issued 
     by the Secretary under subsection (c)(1) shall be provided 
     with benefits and services described in paragraph (2) in the 
     same manner and to the same extent as workers covered under a 
     certification under subchapter A of title II of the Trade Act 
     of 1974 (19 U.S.C. 2271 et seq.), except that the total 
     amount of payments under this section for any fiscal year 
     shall not exceed $25,000,000.
       (2) Benefits and services.--The benefits and services 
     described in this paragraph are the following:
       (A) Employment services of the type described in section 
     235 of the Trade Act of 1974 (19 U.S.C. 2295).
       (B) Training described in section 236 of the Trade Act of 
     1974 (19 U.S.C. 2296), except that notwithstanding the 
     provisions of section 236(a)(2)(A) of that Act, the total 
     amount of payments for training under this section for any 
     fiscal year shall not exceed $12,500,000.
       (C) Tobacco worker readjustment allowances, which shall be 
     provided in the same manner as trade readjustment allowances 
     are provided under part I of subchapter B of chapter 2 of 
     title II of the Trade Act of 1974 (19 U.S.C. 2291 et seq.), 
     except that--
       (i) the provisions of sections 231(a)(5)(C) and 231(c) of 
     that Act (19 U.S.C. 2291(a)(5)(C), 2291(c)), authorizing the 
     payment of trade readjustment allowances on a finding that it 
     is not feasible or appropriate to approve a training program 
     for a worker, shall not be applicable to payment of 
     allowances under this section; and
       (ii) notwithstanding the provisions of section 233(b) of 
     that Act (19 U.S.C. 2293(b)), in order for a worker to 
     qualify for tobacco readjustment allowances under this 
     section, the worker shall be enrolled in a training program 
     approved by the Secretary of the type described in section 
     236(a) of that Act (19 U.S.C. 2296(a)) by the later of--

       (I) the last day of the 16th week of the worker's initial 
     unemployment compensation benefit period; or
       (II) the last day of the 6th week after the week in which 
     the Secretary issues a certification covering the worker.

     In cases of extenuating circumstances relating to enrollment 
     of a worker in a training program under this section, the 
     Secretary may extend the time for enrollment for a period of 
     not to exceed 30 days.
       (D) Job search allowances of the type described in section 
     237 of the Trade Act of 1974 (19 U.S.C. 2297).
       (E) Relocation allowances of the type described in section 
     238 of the Trade Act of 1974 (19 U.S.C. 2298).
       (e) Ineligibility of Individuals Receiving Payments for 
     Lost Tobacco Quota.--No benefits or services may be provided 
     under this section to any individual who has received 
     payments for lost tobacco quota under section 1021.
       (f) Funding.--Of the amounts appropriated to carry out this 
     title, the Secretary may use not to exceed $25,000,000 for 
     each of fiscal years 1999 through 2008 to provide assistance 
     under this section.
       (g) Effective Date.--This section shall take effect on the 
     date that is the later of--
       (1) October l, 1998; or
       (2) the date of enactment of this Act.
       (h) Termination Date.--No assistance, vouchers, allowances, 
     or other payments may be provided under this section after 
     the date that is the earlier of--
       (1) the date that is 10 years after the effective date of 
     this section under subsection (g); or
       (2) the date on which legislation establishing a program 
     providing dislocated workers with comprehensive assistance 
     substantially similar to the assistance provided by this 
     section becomes effective.

     SEC. 1032. FARMER OPPORTUNITY GRANTS.

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

                 ``Subpart 9--Farmer Opportunity Grants

     ``SEC. 420D. STATEMENT OF PURPOSE.

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

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

       ``(a) Program Authority and Method of Distribution.--
       ``(1) Program authority.--From amounts made available under 
     section 1011(d)(5) of the LEAF Act, the Secretary, during the 
     period beginning July 1, 1999, and ending September 30, 2024, 
     shall pay to each eligible institution such sums as may be 
     necessary to pay to each eligible student (determined in 
     accordance with section 420F) for each academic year during 
     which that student is in attendance at an institution of 
     higher education, as an undergraduate, a farmer opportunity 
     grant in the amount for which that student is eligible, as 
     determined pursuant to subsection (b). Not less than 85 
     percent of the sums shall be advanced to eligible 
     institutions prior to the start of each payment period and 
     shall be based on an amount requested by the institution as 
     needed to pay eligible students, except that this sentence 
     shall not be construed to limit the authority of the 
     Secretary to place an institution on a reimbursement system 
     of payment.
       ``(2) Construction.--Nothing in this section shall be 
     construed to prohibit the Secretary from paying directly to 
     students, in advance of the beginning of the academic term, 
     an amount for which the students are eligible, in cases where 
     the eligible institution elects not to participate in the 
     disbursement system required by paragraph (1).
       ``(3) Designation.--Grants made under this subpart shall be 
     known as `farmer opportunity grants'.
       ``(b) Amount of Grants.--
       ``(1) Amounts.--
       ``(A) In general.--The amount of the grant for a student 
     eligible under this subpart shall be--
       ``(i) $1,700 for each of the academic years 1999-2000 
     through 2003-2004;
       ``(ii) $2,000 for each of the academic years 2004-2005 
     through 2008-2009;
       ``(iii) $2,300 for each of the academic years 2009-2010 
     through 2013-2014;
       ``(iv) $2,600 for each of the academic years 2014-2015 
     through 2018-2019; and
       ``(v) $2,900 for each of the academic years 2019-2020 
     through 2023-2024.
       ``(B) Part-time rule.--In any case where a student attends 
     an institution of higher education on less than a full-time 
     basis (including a student who attends an institution of 
     higher education on less than a half-time basis) during any 
     academic year, the amount

[[Page S5933]]

     of the grant for which that student is eligible shall be 
     reduced in proportion to the degree to which that student is 
     not so attending on a full-time basis, in accordance with a 
     schedule of reductions established by the Secretary for the 
     purposes of this subparagraph, computed in accordance with 
     this subpart. The schedule of reductions shall be established 
     by regulation and published in the Federal Register.
       ``(2) Maximum.--No grant under this subpart shall exceed 
     the cost of attendance (as described in section 472) at the 
     institution at which that student is in attendance. If, with 
     respect to any student, it is determined that the amount of a 
     grant exceeds the cost of attendance for that year, the 
     amount of the grant shall be reduced to an amount equal to 
     the cost of attendance at the institution.
       ``(3) Prohibition.--No grant shall be awarded under this 
     subpart to any individual who is incarcerated in any Federal, 
     State, or local penal institution.
       ``(c) Period of Eligibility for Grants.--
       ``(1) In general.--The period during which a student may 
     receive grants shall be the period required for the 
     completion of the first undergraduate baccalaureate course of 
     study being pursued by that student at the institution at 
     which the student is in attendance, except that any period 
     during which the student is enrolled in a noncredit or 
     remedial course of study as described in paragraph (2) shall 
     not be counted for the purpose of this paragraph.
       ``(2) Construction.--Nothing in this section shall be 
     construed to--
       ``(A) exclude from eligibility courses of study that are 
     noncredit or remedial in nature and that are determined by 
     the institution to be necessary to help the student be 
     prepared for the pursuit of a first undergraduate 
     baccalaureate degree or certificate or, in the case of 
     courses in English language instruction, to be necessary to 
     enable the student to utilize already existing knowledge, 
     training, or skills; and
       ``(B) exclude from eligibility programs of study abroad 
     that are approved for credit by the home institution at which 
     the student is enrolled.
       ``(3) Prohibition.--No student is entitled to receive 
     farmer opportunity grant payments concurrently from more than 
     1 institution or from the Secretary and an institution.
       ``(d) Applications for Grants.--
       ``(1) In general.--The Secretary shall from time to time 
     set dates by which students shall file applications for 
     grants under this subpart. The filing of applications under 
     this subpart shall be coordinated with the filing of 
     applications under section 401(c).
       ``(2) Information and assurances.--Each student desiring a 
     grant for any year shall file with the Secretary an 
     application for the grant containing such information and 
     assurances as the Secretary may deem necessary to enable the 
     Secretary to carry out the Secretary's functions and 
     responsibilities under this subpart.
       ``(e) Distribution of Grants to Students.--Payments under 
     this section shall be made in accordance with regulations 
     promulgated by the Secretary for such purpose, in such manner 
     as will best accomplish the purpose of this section. Any 
     disbursement allowed to be made by crediting the student's 
     account shall be limited to tuition and fees and, in the case 
     of institutionally owned housing, room and board. The student 
     may elect to have the institution provide other such goods 
     and services by crediting the student's account.
       ``(f) Insufficient Funding.--If, for any fiscal year, the 
     funds made available to carry out this subpart are 
     insufficient to satisfy fully all grants for students 
     determined to be eligible under section 420F, the amount of 
     the grant provided under subsection (b) shall be reduced on a 
     pro rata basis among all eligible students.
       ``(g) Treatment of Institutions and Students Under Other 
     Laws.--Any institution of higher education that enters into 
     an agreement with the Secretary to disburse to students 
     attending that institution the amounts those students are 
     eligible to receive under this subpart shall not be deemed, 
     by virtue of the agreement, to be a contractor maintaining a 
     system of records to accomplish a function of the Secretary. 
     Recipients of farmer opportunity grants shall not be 
     considered to be individual grantees for purposes of the 
     Drug-Free Workplace Act of 1988 (41 U.S.C. 701 et seq.).

     ``SEC. 420F. STUDENT ELIGIBILITY.

       ``(a) In General.--In order to receive any grant under this 
     subpart, a student shall--
       ``(1) be a member of a tobacco farm family in accordance 
     with subsection (b);
       ``(2) be enrolled or accepted for enrollment in a degree, 
     certificate, or other program (including a program of study 
     abroad approved for credit by the eligible institution at 
     which the student is enrolled) leading to a recognized 
     educational credential at an institution of higher education 
     that is an eligible institution in accordance with section 
     487, and not be enrolled in an elementary or secondary 
     school;
       ``(3) if the student is presently enrolled at an 
     institution of higher education, be maintaining satisfactory 
     progress in the course of study the student is pursuing in 
     accordance with subsection (c);
       ``(4) not owe a refund on grants previously received at any 
     institution of higher education under this title, or be in 
     default on any loan from a student loan fund at any 
     institution provided for in part D, or a loan made, insured, 
     or guaranteed by the Secretary under this title for 
     attendance at any institution;
       ``(5) file with the institution of higher education that 
     the student intends to attend, or is attending, a document, 
     that need not be notarized, but that shall include--
       ``(A) a statement of educational purpose stating that the 
     money attributable to the grant will be used solely for 
     expenses related to attendance or continued attendance at the 
     institution; and
       ``(B) the student's social security number; and
       ``(6) be a citizen of the United States.
       ``(b) Tobacco Farm Families.--
       ``(1) In general.--For the purpose of subsection (a)(1), a 
     student is a member of a tobacco farm family if during 
     calendar year 1998 the student was--
       ``(A) an individual who--
       ``(i) is a participating tobacco producer (as defined in 
     section 1002 of the LEAF Act) who is a principal producer of 
     tobacco on a farm; or
       ``(ii) is otherwise actively engaged in the production of 
     tobacco;
       ``(B) a spouse, son, daughter, stepson, or stepdaughter of 
     an individual described in subparagraph (A);
       ``(C) an individual who was a dependent (within the meaning 
     of section 152 of the Internal Revenue Code of 1986) of an 
     individual described in subparagraph (A).
       ``(2) Administration.--On request, the Secretary of 
     Agriculture shall provide to the Secretary such information 
     as is necessary to carry out this subsection.
       ``(c) Satisfactory Progress.--
       ``(1) In general.--For the purpose of subsection (a)(3), a 
     student is maintaining satisfactory progress if--
       ``(A) the institution at which the student is in attendance 
     reviews the progress of the student at the end of each 
     academic year, or its equivalent, as determined by the 
     institution; and
       ``(B) the student has at least a cumulative C average or 
     its equivalent, or academic standing consistent with the 
     requirements for graduation, as determined by the 
     institution, at the end of the second such academic year.
       ``(2) Special rule.--Whenever a student fails to meet the 
     eligibility requirements of subsection (a)(3) as a result of 
     the application of this subsection and subsequent to that 
     failure the student has academic standing consistent with the 
     requirements for graduation, as determined by the 
     institution, for any grading period, the student may, subject 
     to this subsection, again be eligible under subsection (a)(3) 
     for a grant under this subpart.
       ``(3) Waiver.--Any institution of higher education at which 
     the student is in attendance may waive paragraph (1) or (2) 
     for undue hardship based on--
       ``(A) the death of a relative of the student;
       ``(B) the personal injury or illness of the student; or
       ``(C) special circumstances as determined by the 
     institution.
       ``(d) Students Who Are Not Secondary School Graduates.--In 
     order for a student who does not have a certificate of 
     graduation from a school providing secondary education, or 
     the recognized equivalent of the certificate, to be eligible 
     for any assistance under this subpart, the student shall meet 
     either 1 of the following standards:
       ``(1) Examination.--The student shall take an independently 
     administered examination and shall achieve a score, specified 
     by the Secretary, demonstrating that the student can benefit 
     from the education or training being offered. The examination 
     shall be approved by the Secretary on the basis of compliance 
     with such standards for development, administration, and 
     scoring as the Secretary may prescribe in regulations.
       ``(2) Determination.--The student shall be determined as 
     having the ability to benefit from the education or training 
     in accordance with such process as the State shall prescribe. 
     Any such process described or approved by a State for the 
     purposes of this section shall be effective 6 months after 
     the date of submission to the Secretary unless the Secretary 
     disapproves the process. In determining whether to approve or 
     disapprove the process, the Secretary shall take into account 
     the effectiveness of the process in enabling students without 
     secondary school diplomas or the recognized equivalent to 
     benefit from the instruction offered by institutions 
     utilizing the process, and shall also take into account the 
     cultural diversity, economic circumstances, and educational 
     preparation of the populations served by the institutions.
       ``(e) Special Rule for Correspondence Courses.--A student 
     shall not be eligible to receive a grant under this subpart 
     for a correspondence course unless the course is part of a 
     program leading to an associate, bachelor, or graduate 
     degree.
       ``(f) Courses Offered Through Telecommunications.--
       ``(1) Relation to correspondence courses.--A student 
     enrolled in a course of instruction at an eligible 
     institution of higher education (other than an institute or 
     school that meets the definition in section 521(4)(C) of the 
     Carl D. Perkins Vocational and Applied Technology Education 
     Act (20 U.S.C. 2471(4)(C))) that is offered in whole or in 
     part through telecommunications and leads to a recognized 
     associate, bachelor, or graduate degree conferred by the 
     institution shall not be considered to be enrolled in 
     correspondence courses unless the total amount of 
     telecommunications and correspondence

[[Page S5934]]

     courses at the institution equals or exceeds 50 percent of 
     the courses.
       ``(2) Restriction or reductions of financial aid.--A 
     student's eligibility to receive a grant under this subpart 
     may be reduced if a financial aid officer determines under 
     the discretionary authority provided in section 479A that 
     telecommunications instruction results in a substantially 
     reduced cost of attendance to the student.
       ``(3) Definition.--For the purposes of this subsection, the 
     term `telecommunications' means the use of television, audio, 
     or computer transmission, including open broadcast, closed 
     circuit, cable, microwave, or satellite, audio conferencing, 
     computer conferencing, or video cassettes or discs, except 
     that the term does not include a course that is delivered 
     using video cassette or disc recordings at the institution 
     and that is not delivered in person to other students of that 
     institution.
       ``(g) Study Abroad.--Nothing in this subpart shall be 
     construed to limit or otherwise prohibit access to study 
     abroad programs approved by the home institution at which a 
     student is enrolled. An otherwise eligible student who is 
     engaged in a program of study abroad approved for academic 
     credit by the home institution at which the student is 
     enrolled shall be eligible to receive a grant under this 
     subpart, without regard to whether the study abroad program 
     is required as part of the student's degree program.
       ``(h) Verification of Social Security Number.--The 
     Secretary, in cooperation with the Commissioner of Social 
     Security, shall verify any social security number provided by 
     a student to an eligible institution under subsection 
     (a)(5)(B) and shall enforce the following conditions:
       ``(1) Pending verification.--Except as provided in 
     paragraphs (2) and (3), an institution shall not deny, 
     reduce, delay, or terminate a student's eligibility for 
     assistance under this subpart because social security number 
     verification is pending.
       ``(2) Denial or termination.--If there is a determination 
     by the Secretary that the social security number provided to 
     an eligible institution by a student is incorrect, the 
     institution shall deny or terminate the student's eligibility 
     for any grant under this subpart until such time as the 
     student provides documented evidence of a social security 
     number that is determined by the institution to be correct.
       ``(3) Construction.--Nothing in this subsection shall be 
     construed to permit the Secretary to take any compliance, 
     disallowance, penalty, or other regulatory action against--
       ``(A) any institution of higher education with respect to 
     any error in a social security number, unless the error was a 
     result of fraud on the part of the institution; or
       ``(B) any student with respect to any error in a social 
     security number, unless the error was a result of fraud on 
     the part of the student.''.

                          Subtitle D--Immunity

     SEC. 1041. GENERAL IMMUNITY FOR TOBACCO PRODUCERS AND TOBACCO 
                   WAREHOUSE OWNERS.

       Notwithstanding any other provision of this title, a 
     participating tobacco producer, tobacco-related growers 
     association, or tobacco warehouse owner or employee may not 
     be subject to liability in any Federal or State court for any 
     cause of action resulting from the failure of any tobacco 
     product manufacturer, distributor, or retailer to comply with 
     the National Tobacco Policy and Youth Smoking Reduction Act.
                       Subtitle E--Applicability

     SEC. 1051. APPLICABILITY OF TITLE XV.

       Notwithstanding any other provision of this Act, title XV 
     of this Act shall have no force or effect.
                                 ______
                                 

                  FORD (AND OTHERS) AMENDMENT NO. 2623

  (Ordered to lie on the table.)
  Mr. FORD (for himself, Mr. Hollings, and Mr. Robb) submitted an 
amendment intended to be proposed by them to amendment No. 2498 
proposed by Mr. Lugar to the bill, S. 1415, supra; as follows:

       In lieu of the matter proposed to be inserted, insert the 
     following:
           TITLE X--LONG-TERM ECONOMIC ASSISTANCE FOR FARMERS

     SEC. 1001. SHORT TITLE.

       This title may be cited as the ``Long-Term Economic 
     Assistance for Farmers Act'' or the ``LEAF Act''.

     SEC. 1002. DEFINITIONS.

       In this title:
       (1) Participating tobacco producer.--The term 
     ``participating tobacco producer'' means a quota holder, 
     quota lessee, or quota tenant.
       (2) Quota holder.--The term ``quota holder'' means an owner 
     of a farm on January 1, 1998, for which a tobacco farm 
     marketing quota or farm acreage allotment was established 
     under the Agricultural Adjustment Act of 1938 (7 U.S.C. 1281 
     et seq.).
       (3) Quota lessee.--The term ``quota lessee'' means--
       (A) a producer that owns a farm that produced tobacco 
     pursuant to a lease and transfer to that farm of all or part 
     of a tobacco farm marketing quota or farm acreage allotment 
     established under the Agricultural Adjustment Act of 1938 (7 
     U.S.C. 1281 et seq.) for any of the 1995, 1996, or 1997 crop 
     years; or
       (B) a producer that rented land from a farm operator to 
     produce tobacco under a tobacco farm marketing quota or farm 
     acreage allotment established under the Agricultural 
     Adjustment Act of 1938 (7 U.S.C. 1281 et seq.) for any of the 
     1995, 1996, or 1997 crop years.
       (4) Quota tenant.--The term ``quota tenant'' means a 
     producer that--
       (A) is the principal producer, as determined by the 
     Secretary, of tobacco on a farm where tobacco is produced 
     pursuant to a tobacco farm marketing quota or farm acreage 
     allotment established under the Agricultural Adjustment Act 
     of 1938 (7 U.S.C. 1281 et seq.) for any of the 1995, 1996, or 
     1997 crop years; and
       (B) is not a quota holder or quota lessee.
       (5) Secretary.--The term ``Secretary'' means--
       (A) in subtitles A and B, the Secretary of Agriculture; and
       (B) in section 1031, the Secretary of Labor.
       (6) Tobacco product importer.--The term ``tobacco product 
     importer'' has the meaning given the term ``importer'' in 
     section 5702 of the Internal Revenue Code of 1986.
       (7) Tobacco product manufacturer.--
       (A) In general.--The term ``tobacco product manufacturer'' 
     has the meaning given the term ``manufacturer of tobacco 
     products'' in section 5702 of the Internal Revenue Code of 
     1986.
       (B) Exclusion.--The term ``tobacco product manufacturer'' 
     does not include a person that manufactures cigars or pipe 
     tobacco.
       (8) Tobacco warehouse owner.--The term ``tobacco warehouse 
     owner'' means a warehouseman that participated in an auction 
     market (as defined in the first section of the Tobacco 
     Inspection Act (7 U.S.C. 511)) during the 1998 marketing 
     year.
       (9) Flue-cured tobacco.--The term ``flue-cured tobacco'' 
     includes type 21 and type 37 tobacco.
              Subtitle A--Tobacco Community Revitalization

     SEC. 1011. AUTHORIZATION OF APPROPRIATIONS.

       There are appropriated and transferred to the Secretary for 
     each fiscal year such amounts from the National Tobacco Trust 
     Fund established by section 401, other than from amounts in 
     the State Litigation Settlement Account, as may be necessary 
     to carry out the provisions of this title.

     SEC. 1012. EXPENDITURES.

       The Secretary is authorized, subject to appropriations, to 
     make payments under--
       (1) section 1021 for payments for lost tobacco quota for 
     each of fiscal years 1999 through 2023, but not to exceed 
     $1,650,000,000 for any fiscal year except to the extent the 
     payments are made in accordance with subsection (d)(12) or 
     (e)(9) of section 1021;
       (2) section 1022 for industry payments for all costs of the 
     Department of Agriculture associated with the production of 
     tobacco;
       (3) section 1023 for tobacco community economic development 
     grants, but not to exceed--
       (A) $375,000,000 for each of fiscal years 1999 through 
     2008, less any amount required to be paid under section 1022 
     for the fiscal year; and
       (B) $450,000,000 for each of fiscal year 2009 through 2023, 
     less any amount required to be paid under section 1022 during 
     the fiscal year;
       (4) section 1031 for assistance provided under the tobacco 
     worker transition program, but not to exceed $25,000,000 for 
     any fiscal year; and
       (5) subpart 9 of part A of title IV of the Higher Education 
     Act of 1965 for farmer opportunity grants, but not to 
     exceed--
       (A) $42,500,000 for each of the academic years 1999-2000 
     through 2003-2004;
       (B) $50,000,000 for each of the academic years 2004-2005 
     through 2008-2009;
       (C) $57,500,000 for each of the academic years 2009-2010 
     through 2013-2014;
       (D) $65,000,000 for each of the academic years 2014-2015 
     through 2018-2019; and
       (E) $72,500,000 for each of the academic years 2019-2020 
     through 2023-2024.

     SEC. 1013. BUDGETARY TREATMENT.

       This subtitle constitutes budget authority in advance of 
     appropriations Acts and represents the obligation of the 
     Federal Government to provide payments to States and eligible 
     persons in accordance with this title.
            Subtitle B--Tobacco Market Transition Assistance

     SEC. 1021. PAYMENTS FOR LOST TOBACCO QUOTA.

       (a) In General.--Beginning with the 1999 marketing year, 
     the Secretary shall make payments for lost tobacco quota to 
     eligible quota holders, quota lessees, and quota tenants as 
     reimbursement for lost tobacco quota.
       (b) Eligibility.--To be eligible to receive payments under 
     this section, a quota holder, quota lessee, or quota tenant 
     shall--
       (1) 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 make the demonstration required under paragraph (2); and
       (2) demonstrate to the satisfaction of the Secretary that, 
     with respect to the 1997 marketing year--
       (A) the producer was a quota holder and realized income (or 
     would have realized income, as determined by the Secretary, 
     but for a medical hardship or crop disaster during the 1997 
     marketing year) from the production of tobacco through--
       (i) the active production of tobacco;
       (ii) the lease and transfer of tobacco quota to another 
     farm;

[[Page S5935]]

       (iii) the rental of all or part of the farm of the quota 
     holder, including the right to produce tobacco, to another 
     tobacco producer; or
       (iv) the hiring of a quota tenant to produce tobacco;
       (B) the producer was a quota lessee; or
       (C) the producer was a quota tenant.
       (c) Base Quota Level.--
       (1) In general.--The Secretary shall determine, for each 
     quota holder, quota lessee, and quota tenant, the base quota 
     level for the 1995 through 1997 marketing years.
       (2) Quota holders.--The base quota level for a quota holder 
     shall be equal to the average tobacco farm marketing quota 
     established for the farm owned by the quota holder for the 
     1995 through 1997 marketing years.
       (3) Quota lessees.--The base quota level for a quota lessee 
     shall be equal to--
       (A) 50 percent of the average number of pounds of tobacco 
     quota established for the farm for the 1995 through 1997 
     marketing years--
       (i) that was leased and transferred to a farm owned by the 
     quota lessee; or
       (ii) that was rented to the quota lessee for the right to 
     produce the tobacco; less
       (B) 25 percent of the average number of pounds of tobacco 
     quota described in subparagraph (A) for which a quota tenant 
     was the principal producer of the tobacco quota.
       (4) Quota tenants.--The base quota level for a quota tenant 
     shall be equal to the sum of--
       (A) 50 percent of the average number of pounds of tobacco 
     quota established for a farm for the 1995 through 1997 
     marketing years--
       (i) that was owned by a quota holder; and
       (ii) for which the quota tenant was the principal producer 
     of the tobacco on the farm; and
       (B) 25 percent of the average number of pounds of tobacco 
     quota for the 1995 through 1997 marketing years--
       (i)(I) that was leased and transferred to a farm owned by 
     the quota lessee; or
       (II) for which the rights to produce the tobacco were 
     rented to the quota lessee; and
       (ii) for which the quota tenant was the principal producer 
     of the tobacco on the farm.
       (5) Marketing quotas other than poundage quotas.--
       (A) In general.--For each type of tobacco for which there 
     is a marketing quota or allotment (on an acreage basis), the 
     base quota level for each quota holder, quota lessee, or 
     quota tenant shall be determined in accordance with this 
     subsection (based on a poundage conversion) by multiplying--
       (i) the average tobacco farm marketing quota or allotment 
     for the 1995 through 1997 marketing years; and
       (ii) the average yield per acre for the farm for the type 
     of tobacco for the marketing years.
       (B) Yields not available.--If the average yield per acre is 
     not available for a farm, the Secretary shall calculate the 
     base quota for the quota holder, quota lessee, or quota 
     tenant (based on a poundage conversion) by determining the 
     amount equal to the product obtained by multiplying--
       (i) the average tobacco farm marketing quota or allotment 
     for the 1995 through 1997 marketing years; and
       (ii) the average county yield per acre for the county in 
     which the farm is located for the type of tobacco for the 
     marketing years.
       (d) Payments for Lost Tobacco Quota for Types of Tobacco 
     Other Than Flue-Cured Tobacco.--
       (1) Allocation of funds.--Of the amounts made available 
     under section 1011(d)(1) for payments for lost tobacco quota, 
     the Secretary shall make available for payments under this 
     subsection an amount that bears the same ratio to the amounts 
     made available as--
       (A) the sum of all national marketing quotas for all types 
     of tobacco other than flue-cured tobacco during the 1995 
     through 1997 marketing years; bears to
       (B) the sum of all national marketing quotas for all types 
     of tobacco during the 1995 through 1997 marketing years.
       (2) Option to relinquish quota.--
       (A) In general.--Each quota holder, for types of tobacco 
     other than flue-cured tobacco, shall be given the option to 
     relinquish the farm marketing quota or farm acreage allotment 
     of the quota holder in exchange for a payment made under 
     paragraph (3).
       (B) Notification.--A quota holder shall give notification 
     of the intention of the quota holder to exercise the option 
     at such time and in such manner as the Secretary may require, 
     but not later than January 15, 1999.
       (3) Payments for lost tobacco quota to quota holders 
     exercising options to relinquish quota.--
       (A) In general.--Subject to subparagraph (E), for each of 
     fiscal years 1999 through 2008, the Secretary shall make 
     annual payments for lost tobacco quota to each quota holder 
     that has relinquished the farm marketing quota or farm 
     acreage allotment of the quota holder under paragraph (2).
       (B) Amount.--The amount of a payment made to a quota holder 
     described in subparagraph (A) for a marketing year shall 
     equal \1/10\ of the lifetime limitation established under 
     subparagraph (E).
       (C) Timing.--The Secretary shall begin making annual 
     payments under this paragraph for the marketing year in which 
     the farm marketing quota or farm acreage allotment is 
     relinquished.
       (D) Additional payments.--The Secretary may increase annual 
     payments under this paragraph in accordance with paragraph 
     (7)(E) to the extent that funding is available.
       (E) Lifetime limitation on payments.--The total amount of 
     payments made under this paragraph to a quota holder shall 
     not exceed the product obtained by multiplying the base quota 
     level for the quota holder by $8 per pound.
       (4) Reissuance of quota.--
       (A) Reallocation to lessee or tenant.--If a quota holder 
     exercises an option to relinquish a tobacco farm marketing 
     quota or farm acreage allotment under paragraph (2), a quota 
     lessee or quota tenant that was the primary producer during 
     the 1997 marketing year of tobacco pursuant to the farm 
     marketing quota or farm acreage allotment, as determined by 
     the Secretary, shall be given the option of having an 
     allotment of the farm marketing quota or farm acreage 
     allotment reallocated to a farm owned by the quota lessee or 
     quota tenant.
       (B) Conditions for reallocation.--
       (i) Timing.--A quota lessee or quota tenant that is given 
     the option of having an allotment of a farm marketing quota 
     or farm acreage allotment reallocated to a farm owned by the 
     quota lessee or quota tenant under subparagraph (A) shall 
     have 1 year from the date on which a farm marketing quota or 
     farm acreage allotment is relinquished under paragraph (2) to 
     exercise the option.
       (ii) Limitation on acreage allotment.--In the case of a 
     farm acreage allotment, the acreage allotment determined for 
     any farm subsequent to any reallocation under subparagraph 
     (A) shall not exceed 50 percent of the acreage of cropland of 
     the farm owned by the quota lessee or quota tenant.
       (iii) Limitation on marketing quota.--In the case of a farm 
     marketing quota, the marketing quota determined for any farm 
     subsequent to any reallocation under subparagraph (A) shall 
     not exceed an amount determined by multiplying--

       (I) the average county farm yield, as determined by the 
     Secretary; and
       (II) 50 percent of the acreage of cropland of the farm 
     owned by the quota lessee or quota tenant.

       (C) Eligibility of lessee or tenant for payments.--If a 
     farm marketing quota or farm acreage allotment is reallocated 
     to a quota lessee or quota tenant under subparagraph (A)--
       (i) the quota lessee or quota tenant shall not be eligible 
     for any additional payments under paragraph (5) or (6) as a 
     result of the reallocation; and
       (ii) the base quota level for the quota lessee or quota 
     tenant shall not be increased as a result of the 
     reallocation.
       (D) Reallocation to quota holders within same county or 
     state.--
       (i) In general.--Except as provided in clause (ii), if 
     there was no quota lessee or quota tenant for the farm 
     marketing quota or farm acreage allotment for a type of 
     tobacco, or if no quota lessee or quota tenant exercises an 
     option of having an allotment of the farm marketing quota or 
     farm acreage allotment for a type of tobacco reallocated, the 
     Secretary shall reapportion the farm marketing quota or farm 
     acreage allotment among the remaining quota holders for the 
     type of tobacco within the same county.
       (ii) Cross-county leasing.--In a State in which cross-
     county leasing is authorized pursuant to section 319(l) of 
     the Agricultural Adjustment Act of 1938 (7 U.S.C. 1314e(l)), 
     the Secretary shall reapportion the farm marketing quota 
     among the remaining quota holders for the type of tobacco 
     within the same State.
       (iii) Eligibility of quota holder for payments.--If a farm 
     marketing quota is reapportioned to a quota holder under this 
     subparagraph--

       (I) the quota holder shall not be eligible for any 
     additional payments under paragraph (5) or (6) as a result of 
     the reapportionment; and
       (II) the base quota level for the quota holder shall not be 
     increased as a result of the reapportionment.

       (E) Special rule for tenant of leased tobacco.--If a quota 
     holder exercises an option to relinquish a tobacco farm 
     marketing quota or farm acreage allotment under paragraph 
     (2), the farm marketing quota or farm acreage allotment shall 
     be divided evenly between, and the option of reallocating the 
     farm marketing quota or farm acreage allotment shall be 
     offered in equal portions to, the quota lessee and to the 
     quota tenant, if--
       (i) during the 1997 marketing year, the farm marketing 
     quota or farm acreage allotment was leased and transferred to 
     a farm owned by the quota lessee; and
       (ii) the quota tenant was the primary producer, as 
     determined by the Secretary, of tobacco pursuant to the farm 
     marketing quota or farm acreage allotment.
       (5) Payments for lost tobacco quota to quota holders.--
       (A) In general.--Except as otherwise provided in this 
     subsection, during any marketing year in which the national 
     marketing quota for a type of tobacco is less than the 
     average national marketing quota for the 1995 through 1997 
     marketing years, the Secretary shall make payments for lost 
     tobacco quota to each quota holder, for types of tobacco 
     other than flue-cured tobacco, that is eligible under 
     subsection (b), and has not exercised an option to relinquish 
     a tobacco farm marketing quota or farm acreage allotment 
     under paragraph (2), in an amount that is equal to the 
     product obtained by multiplying--

[[Page S5936]]

       (i) the number of pounds by which the basic farm marketing 
     quota (or poundage conversion) is less than the base quota 
     level for the quota holder; and
       (ii) $4 per pound.
       (B) Poundage conversion for marketing quotas other than 
     poundage quotas.--
       (i) In general.--For each type of tobacco for which there 
     is a marketing quota or allotment (on an acreage basis), the 
     poundage conversion for each quota holder during a marketing 
     year shall be determined by multiplying--

       (I) the basic farm acreage allotment for the farm for the 
     marketing year; and
       (II) the average yield per acre for the farm for the type 
     of tobacco.

       (ii) Yield not available.--If the average yield per acre is 
     not available for a farm, the Secretary shall calculate the 
     poundage conversion for each quota holder during a marketing 
     year by multiplying--

       (I) the basic farm acreage allotment for the farm for the 
     marketing year; and
       (II) the average county yield per acre for the county in 
     which the farm is located for the type of tobacco.

       (6) Payments for lost tobacco quota to quota lessees and 
     quota tenants.--Except as otherwise provided in this 
     subsection, during any marketing year in which the national 
     marketing quota for a type of tobacco is less than the 
     average national marketing quota for the type of tobacco for 
     the 1995 through 1997 marketing years, the Secretary shall 
     make payments for lost tobacco quota to each quota lessee and 
     quota tenant, for types of tobacco other than flue-cured 
     tobacco, that is eligible under subsection (b) in an amount 
     that is equal to the product obtained by multiplying--
       (A) the percentage by which the national marketing quota 
     for the type of tobacco is less than the average national 
     marketing quota for the type of tobacco for the 1995 through 
     1997 marketing years;
       (B) the base quota level for the quota lessee or quota 
     tenant; and
       (C) $4 per pound.
       (7) Lifetime limitation on payments.--Except as otherwise 
     provided in this subsection, the total amount of payments 
     made under this subsection to a quota holder, quota lessee, 
     or quota tenant during the lifetime of the quota holder, 
     quota lessee, or quota tenant shall not exceed the product 
     obtained by multiplying--
       (A) the base quota level for the quota holder, quota 
     lessee, or quota tenant; and
       (B) $8 per pound.
       (8) Limitations on aggregate annual payments.--
       (A) In general.--Except as otherwise provided in this 
     paragraph, the total amount payable under this subsection for 
     any marketing year shall not exceed the amount made available 
     under paragraph (1).
       (B) Accelerated payments.--Paragraph (1) shall not apply if 
     accelerated payments for lost tobacco quota are made in 
     accordance with paragraph (12).
       (C) Reductions.--If the sum of the amounts determined under 
     paragraphs (3), (5), and (6) for a marketing year exceeds the 
     amount made available under paragraph (1), the Secretary 
     shall make a pro rata reduction in the amounts payable under 
     paragraphs (5) and (6) to quota holders, quota lessees, and 
     quota tenants under this subsection to ensure that the total 
     amount of payments for lost tobacco quota does not exceed the 
     amount made available under paragraph (1).
       (D) Rollover of payments for lost tobacco quota.--Subject 
     to subparagraph (A), if the Secretary makes a reduction in 
     accordance with subparagraph (C), the amount of the reduction 
     shall be applied to the next marketing year and added to the 
     payments for lost tobacco quota for the marketing year.
       (E) Additional payments to quota holders exercising option 
     to relinquish quota.--If the amount made available under 
     paragraph (1) exceeds the sum of the amounts determined under 
     paragraphs (3), (5), and (6) for a marketing year, the 
     Secretary shall distribute the amount of the excess pro rata 
     to quota holders that have exercised an option to relinquish 
     a tobacco farm marketing quota or farm acreage allotment 
     under paragraph (2) by increasing the amount payable to each 
     such holder under paragraph (3).
       (9) Subsequent sale and transfer of quota.--Effective 
     beginning with the 1999 marketing year, on the sale and 
     transfer of a farm marketing quota or farm acreage allotment 
     under section 316(g) or 319(g) of the Agricultural Adjustment 
     Act of 1938 (7 U.S.C. 1314b(g), 1314e(g))--
       (A) the person that sold and transferred the quota or 
     allotment shall have--
       (i) the base quota level attributable to the person reduced 
     by the base quota level attributable to the quota that is 
     sold and transferred; and
       (ii) the lifetime limitation on payments established under 
     paragraph (7) attributable to the person reduced by the 
     product obtained by multiplying--

       (I) the base quota level attributable to the quota; and
       (II) $8 per pound; and

       (B) if the quota or allotment has never been relinquished 
     by a previous quota holder under paragraph (2), the person 
     that acquired the quota shall have--
       (i) the base quota level attributable to the person 
     increased by the base quota level attributable to the quota 
     that is sold and transferred; and
       (ii) the lifetime limitation on payments established under 
     paragraph (7) attributable to the person--

       (I) increased by the product obtained by multiplying--

       (aa) the base quota level attributable to the quota; and
       (bb) $8 per pound; but

       (II) decreased by any payments under paragraph (5) for lost 
     tobacco quota previously made that are attributable to the 
     quota that is sold and transferred.

       (10) Sale or transfer of farm.--On the sale or transfer of 
     ownership of a farm that is owned by a quota holder, the base 
     quota level established under subsection (c), the right to 
     payments under paragraph (5), and the lifetime limitation on 
     payments established under paragraph (7) shall transfer to 
     the new owner of the farm to the same extent and in the same 
     manner as those provisions applied to the previous quota 
     holder.
       (11) Death of quota lessee or quota tenant.--If a quota 
     lessee or quota tenant that is entitled to payments under 
     this subsection dies and is survived by a spouse or 1 or more 
     dependents, the right to receive the payments shall transfer 
     to the surviving spouse or, if there is no surviving spouse, 
     to the surviving dependents in equal shares.
       (12) Acceleration of payments.--
       (A) In general.--On the occurrence of any of the events 
     described in subparagraph (B), the Secretary shall make an 
     accelerated lump sum payment for lost tobacco quota as 
     established under paragraphs (5) and (6) to each quota 
     holder, quota lessee, and quota tenant for any affected type 
     of tobacco in accordance with subparagraph (C).
       (B) Triggering events.--The Secretary shall make 
     accelerated payments under subparagraph (A) if after the date 
     of enactment of this Act--
       (i) subject to subparagraph (D), for 3 consecutive 
     marketing years, the national marketing quota or national 
     acreage allotment for a type of tobacco is less than 50 
     percent of the national marketing quota or national acreage 
     allotment for the type of tobacco for the 1998 marketing 
     year; or
       (ii) Congress repeals or makes ineffective, directly or 
     indirectly, any provision of--

       (I) section 316 of the Agricultural Adjustment Act of 1938 
     (7 U.S.C. 1314b);
       (II) section 319 of the Agricultural Adjustment Act of 1938 
     (7 U.S.C. 1314e);
       (III) section 106 of the Agricultural Act of 1949 (7 U.S.C. 
     1445);
       (IV) section 106A of the Agricultural Act of 1949 (7 U.S.C. 
     1445-1); or
       (V) section 106B of the Agricultural Act of 1949 (7 U.S.C. 
     1445-2).

       (C) Amount.--The amount of the accelerated payments made to 
     each quota holder, quota lessee, and quota tenant under this 
     subsection shall be equal to--
       (i) the amount of the lifetime limitation established for 
     the quota holder, quota lessee, or quota tenant under 
     paragraph (7); less
       (ii) any payments for lost tobacco quota received by the 
     quota holder, quota lessee, or quota tenant before the 
     occurrence of any of the events described in subparagraph 
     (B).
       (D) Referendum vote not a triggering event.--A referendum 
     vote of producers for any type of tobacco that results in the 
     national marketing quota or national acreage allotment not 
     being in effect for the type of tobacco shall not be 
     considered a triggering event under this paragraph.
       (13) Ban on subsequent sale or leasing of farm marketing 
     quota or farm acreage allotment to quota holders exercising 
     option to relinquish quota.--No quota holder that exercises 
     the option to relinquish a farm marketing quota or farm 
     acreage allotment for any type of tobacco under paragraph (2) 
     shall be eligible to acquire a farm marketing quota or farm 
     acreage allotment for the type of tobacco, or to obtain the 
     lease or transfer of a farm marketing quota or farm acreage 
     allotment for the type of tobacco, for a period of 25 crop 
     years after the date on which the quota or allotment was 
     relinquished.
       (e) Payments for Lost Tobacco Quota for Flue-Cured 
     Tobacco.--
       (1) Allocation of funds.--Of the amounts made available 
     under section 1011(d)(1) for payments for lost tobacco quota, 
     the Secretary shall make available for payments under this 
     subsection an amount that bears the same ratio to the amounts 
     made available as--
       (A) the sum of all national marketing quotas for flue-cured 
     tobacco during the 1995 through 1997 marketing years; bears 
     to
       (B) the sum of all national marketing quotas for all types 
     of tobacco during the 1995 through 1997 marketing years.
       (2) Relinquishment of quota.--
       (A) In general.--Each quota holder of flue-cured tobacco 
     shall relinquish the farm marketing quota or farm acreage 
     allotment in exchange for a payment made under paragraph (3) 
     due to the transition from farm marketing quotas as provided 
     under section 317 of the Agricultural Adjustment Act of 1938 
     for flue-cured tobacco to individual tobacco production 
     permits as provided under section 317A of the Agricultural 
     Adjustment Act of 1938 for flue-cured tobacco.
       (B) Notification.--The Secretary shall notify the quota 
     holders of the relinquishment of their quota or allotment at 
     such time and in such manner as the Secretary may require, 
     but not later than November 15, 1998.
       (3) Payments for lost flue-cured tobacco quota to quota 
     holders that relinquish quota.--

[[Page S5937]]

       (A) In general.--For each of fiscal years 1999 through 
     2008, the Secretary shall make annual payments for lost flue-
     cured tobacco to each quota holder that has relinquished the 
     farm marketing quota or farm acreage allotment of the quota 
     holder under paragraph (2).
       (B) Amount.--The amount of a payment made to a quota holder 
     described in subparagraph (A) for a marketing year shall 
     equal \1/10\ of the lifetime limitation established under 
     paragraph (6).
       (C) Timing.--The Secretary shall begin making annual 
     payments under this paragraph for the marketing year in which 
     the farm marketing quota or farm acreage allotment is 
     relinquished.
       (D) Additional payments.--The Secretary may increase annual 
     payments under this paragraph in accordance with paragraph 
     (7)(E) to the extent that funding is available.
       (4) Payments for lost flue-cured tobacco quota to quota 
     lessees and quota tenants that have not relinquished 
     permits.--
       (A) In general.--Except as otherwise provided in this 
     subsection, during any marketing year in which the national 
     marketing quota for flue-cured tobacco is less than the 
     average national marketing quota for the 1995 through 1997 
     marketing years, the Secretary shall make payments for lost 
     tobacco quota to each quota lessee or quota tenant that--
       (i) is eligible under subsection (b);
       (ii) has been issued an individual tobacco production 
     permit under section 317A(b) of the Agricultural Adjustment 
     Act of 1938; and
       (iii) has not exercised an option to relinquish the permit.
       (B) Amount.--The amount of a payment made to a quota lessee 
     or quota tenant described in subparagraph (A) for a marketing 
     year shall be equal to the product obtained by multiplying--
       (i) the number of pounds by which the individual marketing 
     limitation established for the permit is less than twice the 
     base quota level for the quota lessee or quota tenant; and
       (ii) $2 per pound.
       (5) Payments for lost flue-cured tobacco quota to quota 
     lessees and quota tenants that have relinquished permits.--
       (A) In general.--For each of fiscal years 1999 through 
     2008, the Secretary shall make annual payments for lost flue-
     cured tobacco quota to each quota lessee and quota tenant 
     that has relinquished an individual tobacco production permit 
     under section 317A(b)(5) of the Agricultural Adjustment Act 
     of 1938.
       (B) Amount.--The amount of a payment made to a quota lessee 
     or quota tenant described in subparagraph (A) for a marketing 
     year shall be equal to \1/10\ of the lifetime limitation 
     established under paragraph (6).
       (C) Timing.--The Secretary shall begin making annual 
     payments under this paragraph for the marketing year in which 
     the individual tobacco production permit is relinquished.
       (D) Additional payments.--The Secretary may increase annual 
     payments under this paragraph in accordance with paragraph 
     (7)(E) to the extent that funding is available.
       (E) Prohibition against permit expansion.--A quota lessee 
     or quota tenant that receives a payment under this paragraph 
     shall be ineligible to receive any new or increased tobacco 
     production permit from the county production pool established 
     under section 317A(b)(8) of the Agricultural Adjustment Act 
     of 1938.
       (6) Lifetime limitation on payments.--Except as otherwise 
     provided in this subsection, the total amount of payments 
     made under this subsection to a quota holder, quota lessee, 
     or quota tenant during the lifetime of the quota holder, 
     quota lessee, or quota tenant shall not exceed the product 
     obtained by multiplying--
       (A) the base quota level for the quota holder, quota 
     lessee, or quota tenant; and
       (B) $8 per pound.
       (7) Limitations on aggregate annual payments.--
       (A) In general.--Except as otherwise provided in this 
     paragraph, the total amount payable under this subsection for 
     any marketing year shall not exceed the amount made available 
     under paragraph (1).
       (B) Accelerated payments.--Paragraph (1) shall not apply if 
     accelerated payments for lost flue-cured tobacco quota are 
     made in accordance with paragraph (9).
       (C) Reductions.--If the sum of the amounts determined under 
     paragraphs (3), (4), and (5) for a marketing year exceeds the 
     amount made available under paragraph (1), the Secretary 
     shall make a pro rata reduction in the amounts payable under 
     paragraph (4) to quota lessees and quota tenants under this 
     subsection to ensure that the total amount of payments for 
     lost flue-cured tobacco quota does not exceed the amount made 
     available under paragraph (1).
       (D) Rollover of payments for lost flue-cured tobacco 
     quota.--Subject to subparagraph (A), if the Secretary makes a 
     reduction in accordance with subparagraph (C), the amount of 
     the reduction shall be applied to the next marketing year and 
     added to the payments for lost flue-cured tobacco quota for 
     the marketing year.
       (E) Additional payments to quota holders exercising option 
     to relinquish quotas or permits, or to quota lessees or quota 
     tenants relinquishing permits.--If the amount made available 
     under paragraph (1) exceeds the sum of the amounts determined 
     under paragraphs (3), (4), and (5) for a marketing year, the 
     Secretary shall distribute the amount of the excess pro rata 
     to quota holders by increasing the amount payable to each 
     such holder under paragraphs (3) and (5).
       (8) Death of quota holder, quota lessee, or quota tenant.--
     If a quota holder, quota lessee or quota tenant that is 
     entitled to payments under paragraph (4) or (5) dies and is 
     survived by a spouse or 1 or more descendants, the right to 
     receive the payments shall transfer to the surviving spouse 
     or, if there is no surviving spouse, to the surviving 
     descendants in equal shares.
       (9) Acceleration of payments.--
       (A) In general.--On the occurrence of any of the events 
     described in subparagraph (B), the Secretary shall make an 
     accelerated lump sum payment for lost flue-cured tobacco 
     quota as established under paragraphs (3), (4), and (5) to 
     each quota holder, quota lessee, and quota tenant for flue-
     cured tobacco in accordance with subparagraph (C).
       (B) Triggering events.--The Secretary shall make 
     accelerated payments under subparagraph (A) if after the date 
     of enactment of this Act--
       (i) subject to subparagraph (D), for 3 consecutive 
     marketing years, the national marketing quota or national 
     acreage allotment for flue-cured tobacco is less than 50 
     percent of the national marketing quota or national acreage 
     allotment for flue-cured tobacco for the 1998 marketing year; 
     or
       (ii) Congress repeals or makes ineffective, directly or 
     indirectly, any provision of--

       (I) section 316 of the Agricultural Adjustment Act of 1938 
     (7 U.S.C. 1314b);
       (II) section 319 of the Agricultural Adjustment Act of 1938 
     (7 U.S.C. 1314e);
       (III) section 106 of the Agricultural Act of 1949 (7 U.S.C. 
     1445);
       (IV) section 106A of the Agricultural Act of 1949 (7 U.S.C. 
     1445-1);
       (V) section 106B of the Agricultural Act of 1949 (7 U.S.C. 
     1445-2); or
       (VI) section 317A of the Agricultural Adjustment Act of 
     1938.

       (C) Amount.--The amount of the accelerated payments made to 
     each quota holder, quota lessee, and quota tenant under this 
     subsection shall be equal to--
       (i) the amount of the lifetime limitation established for 
     the quota holder, quota lessee, or quota tenant under 
     paragraph (6); less
       (ii) any payments for lost flue-cured tobacco quota 
     received by the quota holder, quota lessee, or quota tenant 
     before the occurrence of any of the events described in 
     subparagraph (B).
       (D) Referendum vote not a triggering event.--A referendum 
     vote of producers for flue-cured tobacco that results in the 
     national marketing quota or national acreage allotment not 
     being in effect for flue-cured tobacco shall not be 
     considered a triggering event under this paragraph.

     SEC. 1022. INDUSTRY PAYMENTS FOR ALL DEPARTMENT COSTS 
                   ASSOCIATED WITH TOBACCO PRODUCTION.

       (a) In General.--The Secretary shall use such amounts 
     remaining unspent and obligated at the end of each fiscal 
     year to reimburse the Secretary for--
       (1) costs associated with the administration of programs 
     established under this title and amendments made by this 
     title;
       (2) costs associated with the administration of the tobacco 
     quota and price support programs administered by the 
     Secretary;
       (3) costs to the Federal Government of carrying out crop 
     insurance programs for tobacco;
       (4) costs associated with all agricultural research, 
     extension, or education activities associated with tobacco;
       (5) costs associated with the administration of loan 
     association and cooperative programs for tobacco producers, 
     as approved by the Secretary; and
       (6) any other costs incurred by the Department of 
     Agriculture associated with the production of tobacco.
       (b) Limitations.--Amounts made available under subsection 
     (a) may not be used--
       (1) to provide direct benefits to quota holders, quota 
     lessees, or quota tenants; or
       (2) in a manner that results in a decrease, or an increase 
     relative to other crops, in the amount of the crop insurance 
     premiums assessed to participating tobacco producers under 
     the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.).
       (c) Determinations.--Not later than September 30, 1998, and 
     each fiscal year thereafter, the Secretary shall determine--
       (1) the amount of costs described in subsection (a); and
       (2) the amount that will be provided under this section as 
     reimbursement for the costs.

     SEC. 1023. TOBACCO COMMUNITY ECONOMIC DEVELOPMENT GRANTS.

       (a) Authority.--The Secretary shall make grants to tobacco-
     growing States in accordance with this section to enable the 
     States to carry out economic development initiatives in 
     tobacco-growing communities.
       (b) Application.--To be eligible to receive payments under 
     this section, a State shall prepare and submit to the 
     Secretary an application at such time, in such manner, and 
     containing such information as the Secretary may require, 
     including--
       (1) a description of the activities that the State will 
     carry out using amounts received under the grant;
       (2) a designation of an appropriate State agency to 
     administer amounts received under the grant; and
       (3) a description of the steps to be taken to ensure that 
     the funds are distributed in accordance with subsection (e).

[[Page S5938]]

       (c) Amount of Grant.--
       (1) In general.--From the amounts available to carry out 
     this section for a fiscal year, the Secretary shall allot to 
     each State an amount that bears the same ratio to the amounts 
     available as the total farm income of the State derived from 
     the production of tobacco during the 1995 through 1997 
     marketing years (as determined under paragraph (2)) bears to 
     the total farm income of all States derived from the 
     production of tobacco during the 1995 through 1997 marketing 
     years.
       (2) Tobacco income.--For the 1995 through 1997 marketing 
     years, the Secretary shall determine the amount of farm 
     income derived from the production of tobacco in each State 
     and in all States.
       (d) Payments.--
       (1) In general.--A State that has an application approved 
     by the Secretary under subsection (b) shall be entitled to a 
     payment under this section in an amount that is equal to its 
     allotment under subsection (c).
       (2) Form of payments.--The Secretary may make payments 
     under this section to a State in installments, and in advance 
     or by way of reimbursement, with necessary adjustments on 
     account of overpayments or underpayments, as the Secretary 
     may determine.
       (3) Reallotments.--Any portion of the allotment of a State 
     under subsection (c) that the Secretary determines will not 
     be used to carry out this section in accordance with an 
     approved State application required under subsection (b), 
     shall be reallotted by the Secretary to other States in 
     proportion to the original allotments to the other States.
       (e) Use and Distribution of Funds.--
       (1) In general.--Amounts received by a State under this 
     section shall be used to carry out economic development 
     activities, including--
       (A) rural business enterprise activities described in 
     subsections (c) and (e) of section 310B of the Consolidated 
     Farm and Rural Development Act (7 U.S.C. 1932);
       (B) down payment loan assistance programs that are similar 
     to the program described in section 310E of the Consolidated 
     Farm and Rural Development Act (7 U.S.C. 1935);
       (C) activities designed to help create productive farm or 
     off-farm employment in rural areas to provide a more viable 
     economic base and enhance opportunities for improved incomes, 
     living standards, and contributions by rural individuals to 
     the economic and social development of tobacco communities;
       (D) activities that expand existing infrastructure, 
     facilities, and services to capitalize on opportunities to 
     diversify economies in tobacco communities and that support 
     the development of new industries or commercial ventures;
       (E) activities by agricultural organizations that provide 
     assistance directly to participating tobacco producers to 
     assist in developing other agricultural activities that 
     supplement tobacco-producing activities;
       (F) initiatives designed to create or expand locally owned 
     value-added processing and marketing operations in tobacco 
     communities;
       (G) technical assistance activities by persons to support 
     farmer-owned enterprises, or agriculture-based rural 
     development enterprises, of the type described in section 252 
     or 253 of the Trade Act of 1974 (19 U.S.C. 2342, 2343); and
       (H) initiatives designed to partially compensate tobacco 
     warehouse owners for lost revenues and assist the tobacco 
     warehouse owners in establishing successful business 
     enterprises.
       (2) Tobacco-growing counties.--Assistance may be provided 
     by a State under this section only to assist a county in the 
     State that has been determined by the Secretary to have in 
     excess of $100,000 in income derived from the production of 
     tobacco during 1 or more of the 1995 through 1997 marketing 
     years. For purposes of this section, the term ``tobacco-
     growing county'' includes a political subdivision surrounded 
     within a State by a county that has been determined by the 
     Secretary to have in excess of $100,000 in income derived 
     from the production of tobacco during 1 or more of the 1995 
     through 1997 marketing years.
       (3) Distribution.--
       (A) Economic development activities.--Not less than 20 
     percent of the amounts received by a State under this section 
     shall be used to carry out--
       (i) economic development activities described in 
     subparagraph (E) or (F) of paragraph (1); or
       (ii) agriculture-based rural development activities 
     described in paragraph (1)(G).
       (B) Technical assistance activities.--Not less than 4 
     percent of the amounts received by a State under this section 
     shall be used to carry out technical assistance activities 
     described in paragraph (1)(G).
       (C) Tobacco warehouse owner initiatives.--Not less than 6 
     percent of the amounts received by a State under this section 
     during each of fiscal years 1999 through 2008 shall be used 
     to carry out initiatives described in paragraph (1)(H).
       (D) Tobacco-growing counties.--To be eligible to receive 
     payments under this section, a State shall demonstrate to the 
     Secretary that funding will be provided, during each 5-year 
     period for which funding is provided under this section, for 
     activities in each county in the State that has been 
     determined under paragraph (2) to have in excess of $100,000 
     in income derived from the production of tobacco, in amounts 
     that are at least equal to the product obtained by 
     multiplying--
       (i) the ratio that the tobacco production income in the 
     county determined under paragraph (2) bears to the total 
     tobacco production income for the State determined under 
     subsection (c); and
       (ii) 50 percent of the total amounts received by a State 
     under this section during the 5-year period.
       (f) Preferences in Hiring.--A State may require recipients 
     of funds under this section to provide a preference in 
     employment to--
       (1) an individual who--
       (A) during the 1998 calendar year, was employed in the 
     manufacture, processing, or warehousing of tobacco or tobacco 
     products, or resided, in a county described in subsection 
     (e)(2); and
       (B) is eligible for assistance under the tobacco worker 
     transition program established under section 1031; or
       (2) an individual who--
       (A) during the 1998 marketing year, carried out tobacco 
     quota or relevant tobacco production activities in a county 
     described in subsection (e)(2);
       (B) is eligible for a farmer opportunity grant under 
     subpart 9 of part A of title IV of the Higher Education Act 
     of 1965; and
       (C) has successfully completed a course of study at an 
     institution of higher education.
       (g) Maintenance of Effort.--
       (1) In general.--Subject to paragraph (2), a State shall 
     provide an assurance to the Secretary that the amount of 
     funds expended by the State and all counties in the State 
     described in subsection (e)(2) for any activities funded 
     under this section for a fiscal year is not less than 90 
     percent of the amount of funds expended by the State and 
     counties for the activities for the preceding fiscal year.
       (2) Reduction of grant amount.--If a State does not provide 
     an assurance described in paragraph (1), the Secretary shall 
     reduce the amount of the grant determined under subsection 
     (c) by an amount equal to the amount by which the amount of 
     funds expended by the State and counties for the activities 
     is less than 90 percent of the amount of funds expended by 
     the State and counties for the activities for the preceding 
     fiscal year, as determined by the Secretary.
       (3) Federal funds.--For purposes of this subsection, the 
     amount of funds expended by a State or county shall not 
     include any amounts made available by the Federal Government.

     SEC. 1024. FLUE-CURED TOBACCO PRODUCTION PERMITS.

       The Agricultural Adjustment Act of 1938 is amended by 
     inserting after section 317 (7 U.S.C. 1314c) the following:

     ``SEC. 317A. FLUE-CURED TOBACCO PRODUCTION PERMITS.

       ``(a) Definitions.--In this section:
       ``(1) Individual acreage limitation.--The term `individual 
     acreage limitation' means the number of acres of flue-cured 
     tobacco that may be planted by the holder of a permit during 
     a marketing year, calculated--
       ``(A) prior to--
       ``(i) any increase or decrease in the number due to 
     undermarketings or overmarketings; and
       ``(ii) any reduction under subsection (i); and
       ``(B) in a manner that ensures that--
       ``(i) the total of all individual acreage limitations is 
     equal to the national acreage allotment, less the reserve 
     provided under subsection (h); and
       ``(ii) the individual acreage limitation for a marketing 
     year bears the same ratio to the individual acreage 
     limitation for the previous marketing year as the ratio that 
     the national acreage allotment for the marketing year bears 
     to the national acreage allotment for the previous marketing 
     year, subject to adjustments by the Secretary to account for 
     any reserve provided under subsection (h).
       ``(2) Individual marketing limitation.--The term 
     `individual marketing limitation' means the number of pounds 
     of flue-cured tobacco that may be marketed by the holder of a 
     permit during a marketing year, calculated--
       ``(A) prior to--
       ``(i) any increase or decrease in the number due to 
     undermarketings or overmarketings; and
       ``(ii) any reduction under subsection (i); and
       ``(B) in a manner that ensures that--
       ``(i) the total of all individual marketing limitations is 
     equal to the national marketing quota, less the reserve 
     provided under subsection (h); and
       ``(ii) the individual marketing limitation for a marketing 
     year is obtained by multiplying the individual acreage 
     limitation by the permit yield, prior to any adjustment for 
     undermarketings or overmarketings.
       ``(3) Individual tobacco production permit.--The term 
     `individual tobacco production permit' means a permit issued 
     by the Secretary to a person authorizing the production of 
     flue-cured tobacco for any marketing year during which this 
     section is effective.
       ``(4) National acreage allotment.--The term `national 
     acreage allotment' means the quantity determined by 
     dividing--
       ``(A) the national marketing quota; by
       ``(B) the national average yield goal.
       ``(5) National average yield goal.--The term `national 
     average yield goal' means the national average yield for 
     flue-cured tobacco

[[Page S5939]]

     during the 5 marketing years immediately preceding the 
     marketing year for which the determination is being made.
       ``(6) National marketing quota.--For the 1999 and each 
     subsequent crop of flue-cured tobacco, the term `national 
     marketing quota' for a marketing year means the quantity of 
     flue-cured tobacco, as determined by the Secretary, that is 
     not more than 103 percent nor less than 97 percent of the 
     total of--
       ``(A) the aggregate of the quantities of flue-cured tobacco 
     that domestic manufacturers of cigarettes estimate that the 
     manufacturers intend to purchase on the United States auction 
     markets or from producers during the marketing year, as 
     compiled and determined under section 320A;
       ``(B) the average annual quantity of flue-cured tobacco 
     exported from the United States during the 3 marketing years 
     immediately preceding the marketing year for which the 
     determination is being made; and
       ``(C) the quantity, if any, of flue-cured tobacco that the 
     Secretary, in the discretion of the Secretary, determines is 
     necessary to increase or decrease the inventory of the 
     producer-owned cooperative marketing association that has 
     entered into a loan agreement with the Commodity Credit 
     Corporation to make price support available to producers of 
     flue-cured tobacco to establish or maintain the inventory at 
     the reserve stock level for flue-cured tobacco.
       ``(7) Permit yield.--The term `permit yield' means the 
     yield of tobacco per acre for an individual tobacco 
     production permit holder that is--
       ``(A) based on a preliminary permit yield that is equal to 
     the average yield during the 5 marketing years immediately 
     preceding the marketing year for which the determination is 
     made in the county where the holder of the permit is 
     authorized to plant flue-cured tobacco, as determined by the 
     Secretary, on the basis of actual yields of farms in the 
     county; and
       ``(B) adjusted by a weighted national yield factor 
     calculated by--
       ``(i) multiplying each preliminary permit yield by the 
     individual acreage limitation, prior to adjustments for 
     overmarketings, undermarketings, or reductions required under 
     subsection (i); and
       ``(ii) dividing the sum of the products under clause (i) 
     for all flue-cured individual tobacco production permit 
     holders by the national acreage allotment.
       ``(b) Initial Issuance of Permits.--
       ``(1) Termination of flue-cured marketing quotas.--On the 
     date of enactment of the National Tobacco Policy and Youth 
     Smoking Reduction Act, farm marketing quotas as provided 
     under section 317 shall no longer be in effect for flue-cured 
     tobacco.
       ``(2) Issuance of permits to quota holders that were 
     principal producers.--
       ``(A) In general.--By January 15, 1999, each individual 
     quota holder under section 317 that was a principal producer 
     of flue-cured tobacco during the 1998 marketing year, as 
     determined by the Secretary, shall be issued an individual 
     tobacco production permit under this section.
       ``(B) Notification.--The Secretary shall notify the holder 
     of each permit of the individual acreage limitation and the 
     individual marketing limitation applicable to the holder for 
     each marketing year.
       ``(C) Individual acreage limitation for 1999 marketing 
     year.--In establishing the individual acreage limitation for 
     the 1999 marketing year under this section, the farm acreage 
     allotment that was allotted to a farm owned by the quota 
     holder for the 1997 marketing year shall be considered the 
     individual acreage limitation for the previous marketing 
     year.
       ``(D) Individual marketing limitation for 1999 marketing 
     year.--In establishing the individual marketing limitation 
     for the 1999 marketing year under this section, the farm 
     marketing quota that was allotted to a farm owned by the 
     quota holder for the 1997 marketing year shall be considered 
     the individual marketing limitation for the previous 
     marketing year.
       ``(3) Quota holders that were not principal producers.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     on approval through a referendum under subsection (c)--
       ``(i) each person that was a quota holder under section 317 
     but that was not a principal producer of flue-cured tobacco 
     during the 1997 marketing year, as determined by the 
     Secretary, shall not be eligible to own a permit; and
       ``(ii) the Secretary shall not issue any permit during the 
     25-year period beginning on the date of enactment of this Act 
     to any person that was a quota holder and was not the 
     principal producer of flue-cured tobacco during the 1997 
     marketing year.
       ``(B) Medical hardships and crop disasters.--Subparagraph 
     (A) shall not apply to a person that would have been the 
     principal producer of flue-cured tobacco during the 1997 
     marketing year but for a medical hardship or crop disaster 
     that occurred during the 1997 marketing year.
       ``(C) Administration.--The Secretary shall issue 
     regulations--
       ``(i) defining the term `person' for the purpose of this 
     paragraph; and
       ``(ii) prescribing such rules as the Secretary determines 
     are necessary to ensure a fair and reasonable application of 
     the prohibition established under this paragraph.
       ``(4) Issuance of permits to principal producers of flue-
     cured tobacco.--
       ``(A) In general.--By January 15, 1999, each individual 
     quota lessee or quota tenant (as defined in section 1002 of 
     the LEAF Act) that was the principal producer of flue-cured 
     tobacco during the 1997 marketing year, as determined by the 
     Secretary, shall be issued an individual tobacco production 
     permit under this section.
       ``(B) Individual acreage limitations.--In establishing the 
     individual acreage limitation for the 1999 marketing year 
     under this section, the farm acreage allotment that was 
     allotted to a farm owned by a quota holder for whom the quota 
     lessee or quota tenant was the principal producer of flue-
     cured tobacco during the 1997 marketing year shall be 
     considered the individual acreage limitation for the previous 
     marketing year.
       ``(C) Individual marketing limitations.--In establishing 
     the individual marketing limitation for the 1999 marketing 
     year under this section, the individual marketing limitation 
     for the previous year for an individual described in this 
     paragraph shall be calculated by multiplying--
       ``(i) the farm marketing quota that was allotted to a farm 
     owned by a quota holder for whom the quota lessee or quota 
     holder was the principal producer of flue-cured tobacco 
     during the 1997 marketing year, by
       ``(ii) the ratio that--

       ``(I) the sum of all flue-cured tobacco farm marketing 
     quotas for the 1997 marketing year prior to adjusting for 
     undermarketing and overmarketing; bears to
       ``(II) the sum of all flue-cured tobacco farm marketing 
     quotas for the 1998 marketing year, after adjusting for 
     undermarketing and overmarketing.

       ``(D) Special rule for tenant of leased flue-cured 
     tobacco.--If the farm marketing quota or farm acreage 
     allotment of a quota holder was produced pursuant to an 
     agreement under which a quota lessee rented land from a quota 
     holder and a quota tenant was the primary producer, as 
     determined by the Secretary, of flue-cured tobacco pursuant 
     to the farm marketing quota or farm acreage allotment, the 
     farm marketing quota or farm acreage allotment shall be 
     divided proportionately between the quota lessee and quota 
     tenant for purposes of issuing individual tobacco production 
     permits under this paragraph.
       ``(5) Option of quota lessee or quota tenant to relinquish 
     permit.--
       ``(A) In general.--Each quota lessee or quota tenant that 
     is issued an individual tobacco production permit under 
     paragraph (4) shall be given the option of relinquishing the 
     permit in exchange for payments made under section 1021(e)(5) 
     of the LEAF Act.
       ``(B) Notification.--A quota lessee or quota tenant that is 
     issued an individual tobacco production permit shall give 
     notification of the intention to exercise the option at such 
     time and in such manner as the Secretary may require, but not 
     later than 45 days after the permit is issued.
       ``(C) Reallocation of permit.--The Secretary shall add the 
     authority to produce flue-cured tobacco under the individual 
     tobacco production permit relinquished under this paragraph 
     to the county production pool established under paragraph (8) 
     for reallocation by the appropriate county committee.
       ``(6) Active producer requirement.--
       ``(A) Requirement for sharing risk.--No individual tobacco 
     production permit shall be issued to, or maintained by, a 
     person that does not fully share in the risk of producing a 
     crop of flue-cured tobacco.
       ``(B) Criteria for sharing risk.--For purposes of this 
     paragraph, a person shall be considered to have fully shared 
     in the risk of production of a crop if--
       ``(i) the investment of the person in the production of the 
     crop is not less than 100 percent of the costs of production 
     associated with the crop;
       ``(ii) the amount of the person's return on the investment 
     is dependent solely on the sale price of the crop; and
       ``(iii) the person may not receive any of the return before 
     the sale of the crop.
       ``(C) Persons not sharing risk.--
       ``(i) Forfeiture.--Any person that fails to fully share in 
     the risks of production under this paragraph shall forfeit an 
     individual tobacco production permit if, after notice and 
     opportunity for a hearing, the appropriate county committee 
     determines that the conditions for forfeiture exist.
       ``(ii) Reallocation.--The Secretary shall add the authority 
     to produce flue-cured tobacco under the individual tobacco 
     production permit forfeited under this subparagraph to the 
     county production pool established under paragraph (8) for 
     reallocation by the appropriate county committee.
       ``(D) Notice.--Notice of any determination made by a county 
     committee under subparagraph (C) shall be mailed, as soon as 
     practicable, to the person involved.
       ``(E) Review.--If the person is dissatisfied with the 
     determination, the person may request, not later than 15 days 
     after notice of the determination is received, a review of 
     the determination by a local review committee under the 
     procedures established under section 363 for farm marketing 
     quotas.
       ``(7) County of origin requirement.--For the 1999 and each 
     subsequent crop of flue-cured tobacco, all tobacco produced 
     pursuant to an individual tobacco production permit shall be 
     produced in the same county in which was produced the tobacco 
     produced during the 1997 marketing year pursuant to the farm 
     marketing quota or farm acreage allotment on which the 
     individual tobacco production permit is based.
       ``(8) County production pool.--

[[Page S5940]]

       ``(A) In general.--The authority to produce flue-cured 
     tobacco under an individual tobacco production permit that is 
     forfeited, relinquished, or surrendered within a county may 
     be reallocated by the appropriate county committee to tobacco 
     producers located in the same county that apply to the 
     committee to produce flue-cured tobacco under the authority.
       ``(B) Priority.--In reallocating individual tobacco 
     production permits under this paragraph, a county committee 
     shall provide a priority to--
       ``(i) an active tobacco producer that controls the 
     authority to produce a quantity of flue-cured tobacco under 
     an individual tobacco production permit that is equal to or 
     less than the average number of pounds of flue-cured tobacco 
     that was produced by the producer during each of the 1995 
     through 1997 marketing years, as determined by the Secretary; 
     and
       ``(ii) a new tobacco producer.
       ``(C) Criteria.--Individual tobacco production permits 
     shall be reallocated by the appropriate county committee 
     under this paragraph in a fair and equitable manner after 
     taking into consideration--
       ``(i) the experience of the producer;
       ``(ii) the availability of land, labor, and equipment for 
     the production of tobacco;
       ``(iii) crop rotation practices; and
       ``(iv) the soil and other physical factors affecting the 
     production of tobacco.
       ``(D) Medical hardships and crop disasters.--
     Notwithstanding any other provision of this Act, the 
     Secretary may issue an individual tobacco production permit 
     under this paragraph to a producer that is otherwise 
     ineligible for the permit due to a medical hardship or crop 
     disaster that occurred during the 1997 marketing year.
       ``(c) Referendum.--
       ``(1) Announcement of quota and allotment.--Not later than 
     December 15, 1998, the Secretary pursuant to subsection (b) 
     shall determine and announce--
       ``(A) the quantity of the national marketing quota for 
     flue-cured tobacco for the 1999 marketing year; and
       ``(B) the national acreage allotment and national average 
     yield goal for the 1999 crop of flue-cured tobacco.
       ``(2) Special referendum.--Not later than 30 days after the 
     announcement of the quantity of the national marketing quota 
     in 2001, the Secretary shall conduct a special referendum of 
     the tobacco production permit holders that were the principal 
     producers of flue-cured tobacco of the 1997 crop to determine 
     whether the producers approve or oppose the continuation of 
     individual tobacco production permits on an acreage-poundage 
     basis as provided in this section for the 2002 through 2004 
     marketing years.
       ``(3) Approval of permits.--If the Secretary determines 
     that more than 66\2/3\ percent of the producers voting in the 
     special referendum approve the establishment of individual 
     tobacco production permits on an acreage-poundage basis--
       ``(A) individual tobacco production permits on an acreage-
     poundage basis as provided in this section shall be in effect 
     for the 2002 through 2004 marketing years; and
       ``(B) marketing quotas on an acreage-poundage basis shall 
     cease to be in effect for the 2002 through 2004 marketing 
     years.
       ``(4) Disapproval of permits.--If individual tobacco 
     production permits on an acreage-poundage basis are not 
     approved by more than 66\2/3\ percent of the producers voting 
     in the referendum, no marketing quotas on an acreage-poundage 
     basis shall continue in effect that were proclaimed under 
     section 317 prior to the referendum.
       ``(5) Applicable marketing years.--If individual tobacco 
     production permits have been made effective for flue-cured 
     tobacco on an acreage-poundage basis pursuant to this 
     subsection, the Secretary shall, not later than December 15 
     of any future marketing year, announce a national marketing 
     quota for that type of tobacco for the next 3 succeeding 
     marketing years if the marketing year is the last year of 3 
     consecutive years for which individual tobacco production 
     permits previously proclaimed will be in effect.
       ``(d) Annual Announcement of National Marketing Quota.--The 
     Secretary shall determine and announce the national marketing 
     quota, national acreage allotment, and national average yield 
     goal for the second and third marketing years of any 3-year 
     period for which individual tobacco production permits are in 
     effect on or before the December 15 immediately preceding the 
     beginning of the marketing year to which the quota, 
     allotment, and goal apply.
       ``(e) Annual Announcement of Individual Tobacco Production 
     Permits.--If a national marketing quota, national acreage 
     allotment, and national average yield goal are determined and 
     announced, the Secretary shall provide for the determination 
     of individual tobacco production permits, individual acreage 
     limitations, and individual marketing limitations under this 
     section for the crop and marketing year covered by the 
     determinations.
       ``(f) Assignment of Tobacco Production Permits.--
       ``(1) Limitation to same county.--Each individual tobacco 
     production permit holder shall assign the individual acreage 
     limitation and individual marketing limitation to 1 or more 
     farms located within the county of origin of the individual 
     tobacco production permit.
       ``(2) Filing with county committee.--The assignment of an 
     individual acreage limitation and individual marketing 
     limitation shall not be effective until evidence of the 
     assignment, in such form as required by the Secretary, is 
     filed with and determined by the county committee for the 
     county in which the farm involved is located.
       ``(3) Limitation on tillable cropland.--The total acreage 
     assigned to any farm under this subsection shall not exceed 
     the acreage of cropland on the farm.
       ``(g) Prohibition on Sale or Leasing of Individual Tobacco 
     Production Permits.--
       ``(1) In general.--Except as provided in paragraphs (2) and 
     (3), the Secretary shall not permit the sale and transfer, or 
     lease and transfer, of an individual tobacco production 
     permit issued under this section.
       ``(2) Transfer to descendants.--
       ``(A) Death.--In the case of the death of a person to whom 
     an individual tobacco production permit has been issued under 
     this section, the permit shall transfer to the surviving 
     spouse of the person or, if there is no surviving spouse, to 
     surviving direct descendants of the person.
       ``(B) Temporary inability to farm.--In the case of the 
     death of a person to whom an individual tobacco production 
     permit has been issued under this section and whose 
     descendants are temporarily unable to produce a crop of 
     tobacco, the Secretary may hold the license in the name of 
     the descendants for a period of not more than 18 months.
       ``(3) Voluntary transfers.--A person that is eligible to 
     obtain an individual tobacco production permit under this 
     section may at any time transfer all or part of the permit to 
     the person's spouse or direct descendants that are actively 
     engaged in the production of tobacco.
       ``(h) Reserve.--
       ``(1) In general.--For each marketing year for which 
     individual tobacco production permits are in effect under 
     this section, the Secretary may establish a reserve from the 
     national marketing quota in a quantity equal to not more than 
     1 percent of the national marketing quota to be available 
     for--
       ``(A) making corrections of errors in individual acreage 
     limitations and individual marketing limitations;
       ``(B) adjusting inequities; and
       ``(C) establishing individual tobacco production permits 
     for new tobacco producers (except that not less than two-
     thirds of the reserve shall be for establishing such permits 
     for new tobacco producers).
       ``(2) Eligible persons.--To be eligible for a new 
     individual tobacco production permit, a producer must not 
     have been the principal producer of tobacco during the 
     immediately preceding 5 years.
       ``(3) Apportionment for new producers.--The part of the 
     reserve held for apportionment to new individual tobacco 
     producers shall be allotted on the basis of--
       ``(A) land, labor, and equipment available for the 
     production of tobacco;
       ``(B) crop rotation practices;
       ``(C) soil and other physical factors affecting the 
     production of tobacco; and
       ``(D) the past tobacco-producing experience of the 
     producer.
       ``(4) Permit yield.--The permit yield for any producer for 
     which a new individual tobacco production permit is 
     established shall be determined on the basis of available 
     productivity data for the land involved and yields for 
     similar farms in the same county.
       ``(i) Penalties.--
       ``(1) Production on other farms.--If any quantity of 
     tobacco is marketed as having been produced under an 
     individual acreage limitation or individual marketing 
     limitation assigned to a farm but was produced on a different 
     farm, the individual acreage limitation or individual 
     marketing limitation for the following marketing year shall 
     be forfeited.
       ``(2) False report.--If a person to which an individual 
     tobacco production permit is issued files, or aids or 
     acquiesces in the filing of, a false report with respect to 
     the assignment of an individual acreage limitation or 
     individual marketing limitation for a quantity of tobacco, 
     the individual acreage limitation or individual marketing 
     limitation for the following marketing year shall be 
     forfeited.
       ``(j) Marketing Penalties.--
       ``(1) In general.--When individual tobacco production 
     permits under this section are in effect, provisions with 
     respect to penalties for the marketing of excess tobacco and 
     the other provisions contained in section 314 shall apply in 
     the same manner and to the same extent as they would apply 
     under section 317(g) if farm marketing quotas were in effect.
       ``(2) Production on other farms.--If a producer falsely 
     identifies tobacco as having been produced on or marketed 
     from a farm to which an individual acreage limitation or 
     individual marketing limitation has been assigned, future 
     individual acreage limitations and individual marketing 
     limitations shall be forfeited.''.

     SEC. 1025. MODIFICATIONS IN FEDERAL TOBACCO PROGRAMS.

       (a) Program Referenda.--Section 312(c) of the Agricultural 
     Adjustment Act of 1938 (7 U.S.C. 1312(c)) is amended--
       (1) by striking ``(c) Within thirty'' and inserting the 
     following:
       ``(c) Referenda on Quotas.--
       ``(1) In general.--Not later than 30''; and
       (2) by adding at the end the following:
       ``(2) Referenda on program changes.--
       ``(A) In general.--In the case of any type of tobacco for 
     which marketing quotas are in effect, on the receipt of a 
     petition from more than 5 percent of the producers of that 
     type of tobacco in a State, the Secretary shall

[[Page S5941]]

     conduct a statewide referendum on any proposal related to the 
     lease and transfer of tobacco quota within a State requested 
     by the petition that is authorized under this part.
       ``(B) Approval of proposals.--If a majority of producers of 
     the type of tobacco in the State approve a proposal in a 
     referendum conducted under subparagraph (A), the Secretary 
     shall implement the proposal in a manner that applies to all 
     producers and quota holders of that type of tobacco in the 
     State.''.
       (b) Purchase Requirements.--Section 320B of the 
     Agricultural Adjustment Act of 1938 (7 U.S.C. 1314h) is 
     amended--
       (1) in subsection (c)--
       (A) by striking ``(c) The amount'' and inserting ``(c) 
     Amount of Penalty.--For the 1998 and subsequent marketing 
     years, the amount''; and
       (B) by striking paragraph (1) and inserting the following:
       ``(1) 105 percent of the average market price for the type 
     of tobacco involved during the preceding marketing year; 
     and''.
       (c) Elimination of Tobacco Marketing Assessment.--
       (1) In general.--Section 106 of the Agricultural Act of 
     1949 (7 U.S.C. 1445) is amended by striking subsection (g).
       (2) Conforming amendment.--Section 422(c) of the Uruguay 
     Round Agreements Act (Public Law 103-465; 7 U.S.C. 1445 note) 
     is amended by striking ``section 106(g), 106A, or 106B of the 
     Agricultural Act of 1949 (7 U.S.C. 1445(g), 1445-1, or 1445-
     2)'' and inserting ``section 106A or 106B of the Agricultural 
     Act of 1949 (7 U.S.C. 1445-1, 1445-2)''.
       (d) Adjustment for Land Rental Costs.--Section 106 of the 
     Agricultural Act of 1949 (7 U.S.C. 1445) is amended by adding 
     at the end the following:
       ``(h) Adjustment for Land Rental Costs.--For each of the 
     1999 and 2000 marketing years for flue-cured tobacco, after 
     consultation with producers, State farm organizations and 
     cooperative associations, the Secretary shall make an 
     adjustment in the price support level for flue-cured tobacco 
     equal to the annual change in the average cost per pound to 
     flue-cured producers, as determined by the Secretary, under 
     agreements through which producers rent land to produce flue-
     cured tobacco.''.
       (e) Fire-Cured and Dark Air-Cured Tobacco Programs.--
       (1) Limitation on transfers.--Section 318(g) of the 
     Agricultural Adjustment Act of 1938 (7 U.S.C. 13l4d(g)) is 
     amended--
       (A) by striking ``ten'' and inserting ``30''; and
       (B) by inserting ``during any crop year'' after 
     ``transferred to any farm''.
       (2) Loss of allotment or quota through underplanting.--
     Section 318 of the Agricultural Adjustment Act of 1938 (7 
     U.S.C. 1314d) is amended by adding at the end the following:
       ``(k) Loss of Allotment or Quota Through Underplanting.--
     Effective for the 1999 and subsequent marketing years, no 
     acreage allotment or acreage-poundage quota, other than a new 
     marketing quota, shall be established for a farm on which no 
     fire-cured or dark air-cured tobacco was planted or 
     considered planted during at least 2 of the 3 crop years 
     immediately preceding the crop year for which the acreage 
     allotment or acreage-poundage quota would otherwise be 
     established.''.
       (f) Expansion of Types of Tobacco Subject to No Net Cost 
     Assessment.--
       (1) No net cost tobacco fund.--Section 106A(d)(1)(A) of the 
     Agricultural Act of 1949 (7 U.S.C. 1445-1(d)(1)(A)) is 
     amended--
       (A) in clause (ii), by inserting after ``Burley quota 
     tobacco'' the following: ``and fire-cured and dark air-cured 
     quota tobacco''; and
       (B) in clause (iii)--
       (i) in the matter preceding subclause (I), by striking 
     ``Flue-cured or Burley tobacco'' and inserting ``each kind of 
     tobacco for which price support is made available under this 
     Act, and each kind of like tobacco,''; and
       (ii) by striking subclause (II) and inserting the 
     following:

       ``(II) the sum of the amount of the per pound producer 
     contribution and purchaser assessment (if any) for the kind 
     of tobacco payable under clauses (i) and (ii); and''.

       (2) No net cost tobacco account.--Section 106B(d)(1) of the 
     Agricultural Act of 1949 (7 U.S.C. 1445-2(d)(1)) is amended--
       (A) in subparagraph (B), by inserting after ``Burley quota 
     tobacco'' the following: ``and fire-cured and dark air-cured 
     tobacco''; and
       (B) in subparagraph (C), by striking ``Flue-cured and 
     Burley tobacco'' and inserting ``each kind of tobacco for 
     which price support is made available under this Act, and 
     each kind of like tobacco,''.
          Subtitle C--Farmer and Worker Transition Assistance

     SEC. 1031. TOBACCO WORKER TRANSITION PROGRAM.

       (a) Group Eligibility Requirements.--
       (1) Criteria.--A group of workers (including workers in any 
     firm or subdivision of a firm involved in the manufacture, 
     processing, or warehousing of tobacco or tobacco products) 
     shall be certified as eligible to apply for adjustment 
     assistance under this section pursuant to a petition filed 
     under subsection (b) if the Secretary of Labor determines 
     that a significant number or proportion of the workers in the 
     workers' firm or an appropriate subdivision of the firm have 
     become totally or partially separated, or are threatened to 
     become totally or partially separated, and--
       (A) the sales or production, or both, of the firm or 
     subdivision have decreased absolutely; and
       (B) the implementation of the national tobacco settlement 
     contributed importantly to the workers' separation or threat 
     of separation and to the decline in the sales or production 
     of the firm or subdivision.
       (2) Definition of contributed importantly.--In paragraph 
     (1)(B), the term ``contributed importantly'' means a cause 
     that is important but not necessarily more important than any 
     other cause.
       (3) Regulations.--The Secretary shall issue regulations 
     relating to the application of the criteria described in 
     paragraph (1) in making preliminary findings under subsection 
     (b) and determinations under subsection (c).
       (b) Preliminary Findings and Basic Assistance.--
       (1) Filing of petitions.--A petition for certification of 
     eligibility to apply for adjustment assistance under this 
     section may be filed by a group of workers (including workers 
     in any firm or subdivision of a firm involved in the 
     manufacture, processing, or warehousing of tobacco or tobacco 
     products) or by their certified or recognized union or other 
     duly authorized representative with the Governor of the State 
     in which the workers' firm or subdivision thereof is located.
       (2) Findings and assistance.--On receipt of a petition 
     under paragraph (1), the Governor shall--
       (A) notify the Secretary that the Governor has received the 
     petition;
       (B) within 10 days after receiving the petition--
       (i) make a preliminary finding as to whether the petition 
     meets the criteria described in subsection (a)(1); and
       (ii) transmit the petition, together with a statement of 
     the finding under clause (i) and reasons for the finding, to 
     the Secretary for action under subsection (c); and
       (C) if the preliminary finding under subparagraph (B)(i) is 
     affirmative, ensure that rapid response and basic 
     readjustment services authorized under other Federal laws are 
     made available to the workers.
       (c) Review of Petitions by Secretary; Certifications.--
       (1) In general.--The Secretary, within 30 days after 
     receiving a petition under subsection (b)(2)(B)(ii), shall 
     determine whether the petition meets the criteria described 
     in subsection (a)(1). On a determination that the petition 
     meets the criteria, the Secretary shall issue to workers 
     covered by the petition a certification of eligibility to 
     apply for the assistance described in subsection (d).
       (2) Denial of certification.--On the denial of a 
     certification with respect to a petition under paragraph (1), 
     the Secretary shall review the petition in accordance with 
     the requirements of other applicable assistance programs to 
     determine if the workers may be certified under the other 
     programs.
       (d) Comprehensive Assistance.--
       (1) In general.--Workers covered by a certification issued 
     by the Secretary under subsection (c)(1) shall be provided 
     with benefits and services described in paragraph (2) in the 
     same manner and to the same extent as workers covered under a 
     certification under subchapter A of title II of the Trade Act 
     of 1974 (19 U.S.C. 2271 et seq.), except that the total 
     amount of payments under this section for any fiscal year 
     shall not exceed $25,000,000.
       (2) Benefits and services.--The benefits and services 
     described in this paragraph are the following:
       (A) Employment services of the type described in section 
     235 of the Trade Act of 1974 (19 U.S.C. 2295).
       (B) Training described in section 236 of the Trade Act of 
     1974 (19 U.S.C. 2296), except that notwithstanding the 
     provisions of section 236(a)(2)(A) of that Act, the total 
     amount of payments for training under this section for any 
     fiscal year shall not exceed $12,500,000.
       (C) Tobacco worker readjustment allowances, which shall be 
     provided in the same manner as trade readjustment allowances 
     are provided under part I of subchapter B of chapter 2 of 
     title II of the Trade Act of 1974 (19 U.S.C. 2291 et seq.), 
     except that--
       (i) the provisions of sections 231(a)(5)(C) and 231(c) of 
     that Act (19 U.S.C. 2291(a)(5)(C), 2291(c)), authorizing the 
     payment of trade readjustment allowances on a finding that it 
     is not feasible or appropriate to approve a training program 
     for a worker, shall not be applicable to payment of 
     allowances under this section; and
       (ii) notwithstanding the provisions of section 233(b) of 
     that Act (19 U.S.C. 2293(b)), in order for a worker to 
     qualify for tobacco readjustment allowances under this 
     section, the worker shall be enrolled in a training program 
     approved by the Secretary of the type described in section 
     236(a) of that Act (19 U.S.C. 2296(a)) by the later of--

       (I) the last day of the 16th week of the worker's initial 
     unemployment compensation benefit period; or
       (II) the last day of the 6th week after the week in which 
     the Secretary issues a certification covering the worker.

     In cases of extenuating circumstances relating to enrollment 
     of a worker in a training program under this section, the 
     Secretary may extend the time for enrollment for a period of 
     not to exceed 30 days.
       (D) Job search allowances of the type described in section 
     237 of the Trade Act of 1974 (19 U.S.C. 2297).
       (E) Relocation allowances of the type described in section 
     238 of the Trade Act of 1974 (19 U.S.C. 2298).
       (e) Ineligibility of Individuals Receiving Payments for 
     Lost Tobacco Quota.--No

[[Page S5942]]

     benefits or services may be provided under this section to 
     any individual who has received payments for lost tobacco 
     quota under section 1021.
       (f) Funding.--Of the amounts appropriated to carry out this 
     title, the Secretary may use not to exceed $25,000,000 for 
     each of fiscal years 1999 through 2008 to provide assistance 
     under this section.
       (g) Effective Date.--This section shall take effect on the 
     date that is the later of--
       (1) October l, 1998; or
       (2) the date of enactment of this Act.
       (h) Termination Date.--No assistance, vouchers, allowances, 
     or other payments may be provided under this section after 
     the date that is the earlier of--
       (1) the date that is 10 years after the effective date of 
     this section under subsection (g); or
       (2) the date on which legislation establishing a program 
     providing dislocated workers with comprehensive assistance 
     substantially similar to the assistance provided by this 
     section becomes effective.

     SEC. 1032. FARMER OPPORTUNITY GRANTS.

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

                 ``Subpart 9--Farmer Opportunity Grants

     ``SEC. 420D. STATEMENT OF PURPOSE.

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

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

       ``(a) Program Authority and Method of Distribution.--
       ``(1) Program authority.--From amounts made available under 
     section 1011(d)(5) of the LEAF Act, the Secretary, during the 
     period beginning July 1, 1999, and ending September 30, 2024, 
     shall pay to each eligible institution such sums as may be 
     necessary to pay to each eligible student (determined in 
     accordance with section 420F) for each academic year during 
     which that student is in attendance at an institution of 
     higher education, as an undergraduate, a farmer opportunity 
     grant in the amount for which that student is eligible, as 
     determined pursuant to subsection (b). Not less than 85 
     percent of the sums shall be advanced to eligible 
     institutions prior to the start of each payment period and 
     shall be based on an amount requested by the institution as 
     needed to pay eligible students, except that this sentence 
     shall not be construed to limit the authority of the 
     Secretary to place an institution on a reimbursement system 
     of payment.
       ``(2) Construction.--Nothing in this section shall be 
     construed to prohibit the Secretary from paying directly to 
     students, in advance of the beginning of the academic term, 
     an amount for which the students are eligible, in cases where 
     the eligible institution elects not to participate in the 
     disbursement system required by paragraph (1).
       ``(3) Designation.--Grants made under this subpart shall be 
     known as `farmer opportunity grants'.
       ``(b) Amount of Grants.--
       ``(1) Amounts.--
       ``(A) In general.--The amount of the grant for a student 
     eligible under this subpart shall be--
       ``(i) $1,700 for each of the academic years 1999-2000 
     through 2003-2004;
       ``(ii) $2,000 for each of the academic years 2004-2005 
     through 2008-2009;
       ``(iii) $2,300 for each of the academic years 2009-2010 
     through 2013-2014;
       ``(iv) $2,600 for each of the academic years 2014-2015 
     through 2018-2019; and
       ``(v) $2,900 for each of the academic years 2019-2020 
     through 2023-2024.
       ``(B) Part-time rule.--In any case where a student attends 
     an institution of higher education on less than a full-time 
     basis (including a student who attends an institution of 
     higher education on less than a half-time basis) during any 
     academic year, the amount of the grant for which that student 
     is eligible shall be reduced in proportion to the degree to 
     which that student is not so attending on a full-time basis, 
     in accordance with a schedule of reductions established by 
     the Secretary for the purposes of this subparagraph, computed 
     in accordance with this subpart. The schedule of reductions 
     shall be established by regulation and published in the 
     Federal Register.
       ``(2) Maximum.--No grant under this subpart shall exceed 
     the cost of attendance (as described in section 472) at the 
     institution at which that student is in attendance. If, with 
     respect to any student, it is determined that the amount of a 
     grant exceeds the cost of attendance for that year, the 
     amount of the grant shall be reduced to an amount equal to 
     the cost of attendance at the institution.
       ``(3) Prohibition.--No grant shall be awarded under this 
     subpart to any individual who is incarcerated in any Federal, 
     State, or local penal institution.
       ``(c) Period of Eligibility for Grants.--
       ``(1) In general.--The period during which a student may 
     receive grants shall be the period required for the 
     completion of the first undergraduate baccalaureate course of 
     study being pursued by that student at the institution at 
     which the student is in attendance, except that any period 
     during which the student is enrolled in a noncredit or 
     remedial course of study as described in paragraph (2) shall 
     not be counted for the purpose of this paragraph.
       ``(2) Construction.--Nothing in this section shall be 
     construed to--
       ``(A) exclude from eligibility courses of study that are 
     noncredit or remedial in nature and that are determined by 
     the institution to be necessary to help the student be 
     prepared for the pursuit of a first undergraduate 
     baccalaureate degree or certificate or, in the case of 
     courses in English language instruction, to be necessary to 
     enable the student to utilize already existing knowledge, 
     training, or skills; and
       ``(B) exclude from eligibility programs of study abroad 
     that are approved for credit by the home institution at which 
     the student is enrolled.
       ``(3) Prohibition.--No student is entitled to receive 
     farmer opportunity grant payments concurrently from more than 
     1 institution or from the Secretary and an institution.
       ``(d) Applications for Grants.--
       ``(1) In general.--The Secretary shall from time to time 
     set dates by which students shall file applications for 
     grants under this subpart. The filing of applications under 
     this subpart shall be coordinated with the filing of 
     applications under section 401(c).
       ``(2) Information and assurances.--Each student desiring a 
     grant for any year shall file with the Secretary an 
     application for the grant containing such information and 
     assurances as the Secretary may deem necessary to enable the 
     Secretary to carry out the Secretary's functions and 
     responsibilities under this subpart.
       ``(e) Distribution of Grants to Students.--Payments under 
     this section shall be made in accordance with regulations 
     promulgated by the Secretary for such purpose, in such manner 
     as will best accomplish the purpose of this section. Any 
     disbursement allowed to be made by crediting the student's 
     account shall be limited to tuition and fees and, in the case 
     of institutionally owned housing, room and board. The student 
     may elect to have the institution provide other such goods 
     and services by crediting the student's account.
       ``(f) Insufficient Funding.--If, for any fiscal year, the 
     funds made available to carry out this subpart are 
     insufficient to satisfy fully all grants for students 
     determined to be eligible under section 420F, the amount of 
     the grant provided under subsection (b) shall be reduced on a 
     pro rata basis among all eligible students.
       ``(g) Treatment of Institutions and Students Under Other 
     Laws.--Any institution of higher education that enters into 
     an agreement with the Secretary to disburse to students 
     attending that institution the amounts those students are 
     eligible to receive under this subpart shall not be deemed, 
     by virtue of the agreement, to be a contractor maintaining a 
     system of records to accomplish a function of the Secretary. 
     Recipients of farmer opportunity grants shall not be 
     considered to be individual grantees for purposes of the 
     Drug-Free Workplace Act of 1988 (41 U.S.C. 701 et seq.).

     ``SEC. 420F. STUDENT ELIGIBILITY.

       ``(a) In General.--In order to receive any grant under this 
     subpart, a student shall--
       ``(1) be a member of a tobacco farm family in accordance 
     with subsection (b);
       ``(2) be enrolled or accepted for enrollment in a degree, 
     certificate, or other program (including a program of study 
     abroad approved for credit by the eligible institution at 
     which the student is enrolled) leading to a recognized 
     educational credential at an institution of higher education 
     that is an eligible institution in accordance with section 
     487, and not be enrolled in an elementary or secondary 
     school;
       ``(3) if the student is presently enrolled at an 
     institution of higher education, be maintaining satisfactory 
     progress in the course of study the student is pursuing in 
     accordance with subsection (c);
       ``(4) not owe a refund on grants previously received at any 
     institution of higher education under this title, or be in 
     default on any loan from a student loan fund at any 
     institution provided for in part D, or a loan made, insured, 
     or guaranteed by the Secretary under this title for 
     attendance at any institution;
       ``(5) file with the institution of higher education that 
     the student intends to attend, or is attending, a document, 
     that need not be notarized, but that shall include--
       ``(A) a statement of educational purpose stating that the 
     money attributable to the grant will be used solely for 
     expenses related to attendance or continued attendance at the 
     institution; and
       ``(B) the student's social security number; and
       ``(6) be a citizen of the United States.
       ``(b) Tobacco Farm Families.--
       ``(1) In general.--For the purpose of subsection (a)(1), a 
     student is a member of a tobacco farm family if during 
     calendar year 1998 the student was--
       ``(A) an individual who--
       ``(i) is a participating tobacco producer (as defined in 
     section 1002 of the LEAF Act) who is a principal producer of 
     tobacco on a farm; or
       ``(ii) is otherwise actively engaged in the production of 
     tobacco;
       ``(B) a spouse, son, daughter, stepson, or stepdaughter of 
     an individual described in subparagraph (A);
       ``(C) an individual who was a dependent (within the meaning 
     of section 152 of the Internal Revenue Code of 1986) of an 
     individual described in subparagraph (A).
       ``(2) Administration.--On request, the Secretary of 
     Agriculture shall provide to the Secretary such information 
     as is necessary to carry out this subsection.

[[Page S5943]]

       ``(c) Satisfactory Progress.--
       ``(1) In general.--For the purpose of subsection (a)(3), a 
     student is maintaining satisfactory progress if--
       ``(A) the institution at which the student is in attendance 
     reviews the progress of the student at the end of each 
     academic year, or its equivalent, as determined by the 
     institution; and
       ``(B) the student has at least a cumulative C average or 
     its equivalent, or academic standing consistent with the 
     requirements for graduation, as determined by the 
     institution, at the end of the second such academic year.
       ``(2) Special rule.--Whenever a student fails to meet the 
     eligibility requirements of subsection (a)(3) as a result of 
     the application of this subsection and subsequent to that 
     failure the student has academic standing consistent with the 
     requirements for graduation, as determined by the 
     institution, for any grading period, the student may, subject 
     to this subsection, again be eligible under subsection (a)(3) 
     for a grant under this subpart.
       ``(3) Waiver.--Any institution of higher education at which 
     the student is in attendance may waive paragraph (1) or (2) 
     for undue hardship based on--
       ``(A) the death of a relative of the student;
       ``(B) the personal injury or illness of the student; or
       ``(C) special circumstances as determined by the 
     institution.
       ``(d) Students Who Are Not Secondary School Graduates.--In 
     order for a student who does not have a certificate of 
     graduation from a school providing secondary education, or 
     the recognized equivalent of the certificate, to be eligible 
     for any assistance under this subpart, the student shall meet 
     either 1 of the following standards:
       ``(1) Examination.--The student shall take an independently 
     administered examination and shall achieve a score, specified 
     by the Secretary, demonstrating that the student can benefit 
     from the education or training being offered. The examination 
     shall be approved by the Secretary on the basis of compliance 
     with such standards for development, administration, and 
     scoring as the Secretary may prescribe in regulations.
       ``(2) Determination.--The student shall be determined as 
     having the ability to benefit from the education or training 
     in accordance with such process as the State shall prescribe. 
     Any such process described or approved by a State for the 
     purposes of this section shall be effective 6 months after 
     the date of submission to the Secretary unless the Secretary 
     disapproves the process. In determining whether to approve or 
     disapprove the process, the Secretary shall take into account 
     the effectiveness of the process in enabling students without 
     secondary school diplomas or the recognized equivalent to 
     benefit from the instruction offered by institutions 
     utilizing the process, and shall also take into account the 
     cultural diversity, economic circumstances, and educational 
     preparation of the populations served by the institutions.
       ``(e) Special Rule for Correspondence Courses.--A student 
     shall not be eligible to receive a grant under this subpart 
     for a correspondence course unless the course is part of a 
     program leading to an associate, bachelor, or graduate 
     degree.
       ``(f) Courses Offered Through Telecommunications.--
       ``(1) Relation to correspondence courses.--A student 
     enrolled in a course of instruction at an eligible 
     institution of higher education (other than an institute or 
     school that meets the definition in section 521(4)(C) of the 
     Carl D. Perkins Vocational and Applied Technology Education 
     Act (20 U.S.C. 2471(4)(C))) that is offered in whole or in 
     part through telecommunications and leads to a recognized 
     associate, bachelor, or graduate degree conferred by the 
     institution shall not be considered to be enrolled in 
     correspondence courses unless the total amount of 
     telecommunications and correspondence courses at the 
     institution equals or exceeds 50 percent of the courses.
       ``(2) Restriction or reductions of financial aid.--A 
     student's eligibility to receive a grant under this subpart 
     may be reduced if a financial aid officer determines under 
     the discretionary authority provided in section 479A that 
     telecommunications instruction results in a substantially 
     reduced cost of attendance to the student.
       ``(3) Definition.--For the purposes of this subsection, the 
     term `telecommunications' means the use of television, audio, 
     or computer transmission, including open broadcast, closed 
     circuit, cable, microwave, or satellite, audio conferencing, 
     computer conferencing, or video cassettes or discs, except 
     that the term does not include a course that is delivered 
     using video cassette or disc recordings at the institution 
     and that is not delivered in person to other students of that 
     institution.
       ``(g) Study Abroad.--Nothing in this subpart shall be 
     construed to limit or otherwise prohibit access to study 
     abroad programs approved by the home institution at which a 
     student is enrolled. An otherwise eligible student who is 
     engaged in a program of study abroad approved for academic 
     credit by the home institution at which the student is 
     enrolled shall be eligible to receive a grant under this 
     subpart, without regard to whether the study abroad program 
     is required as part of the student's degree program.
       ``(h) Verification of Social Security Number.--The 
     Secretary, in cooperation with the Commissioner of Social 
     Security, shall verify any social security number provided by 
     a student to an eligible institution under subsection 
     (a)(5)(B) and shall enforce the following conditions:
       ``(1) Pending verification.--Except as provided in 
     paragraphs (2) and (3), an institution shall not deny, 
     reduce, delay, or terminate a student's eligibility for 
     assistance under this subpart because social security number 
     verification is pending.
       ``(2) Denial or termination.--If there is a determination 
     by the Secretary that the social security number provided to 
     an eligible institution by a student is incorrect, the 
     institution shall deny or terminate the student's eligibility 
     for any grant under this subpart until such time as the 
     student provides documented evidence of a social security 
     number that is determined by the institution to be correct.
       ``(3) Construction.--Nothing in this subsection shall be 
     construed to permit the Secretary to take any compliance, 
     disallowance, penalty, or other regulatory action against--
       ``(A) any institution of higher education with respect to 
     any error in a social security number, unless the error was a 
     result of fraud on the part of the institution; or
       ``(B) any student with respect to any error in a social 
     security number, unless the error was a result of fraud on 
     the part of the student.''.
                          Subtitle D--Immunity

     SEC. 1041. GENERAL IMMUNITY FOR TOBACCO PRODUCERS AND TOBACCO 
                   WAREHOUSE OWNERS.

       Notwithstanding any other provision of this title, a 
     participating tobacco producer, tobacco-related growers 
     association, or tobacco warehouse owner or employee may not 
     be subject to liability in any Federal or State court for any 
     cause of action resulting from the failure of any tobacco 
     product manufacturer, distributor, or retailer to comply with 
     the National Tobacco Policy and Youth Smoking Reduction Act.
                       Subtitle E--Applicability

     SEC. 1051. APPLICABILITY OF TITLE XV.

       Notwithstanding any other provision of this Act, title XV 
     of this Act shall have no force or effect.
                                 ______
                                 

                  FORD (AND OTHERS) AMENDMENT NO. 2624

  (Ordered to lie on the table.)
  Mr. FORD (for himself, Mr. Hollings, and Mr. Robb) submitted an 
amendment intended to be proposed by them to amendment No. 2497 
proposed by Mr. Lugar to the bill, S. 1415, supra; as follows:

       In lieu of the matter proposed to be inserted, insert the 
     following:
           TITLE X--LONG-TERM ECONOMIC ASSISTANCE FOR FARMERS

     SEC. 1001. SHORT TITLE.

       This title may be cited as the ``Long-Term Economic 
     Assistance for Farmers Act'' or the ``LEAF Act''.

     SEC. 1002. DEFINITIONS.

       In this title:
       (1) Participating tobacco producer.--The term 
     ``participating tobacco producer'' means a quota holder, 
     quota lessee, or quota tenant.
       (2) Quota holder.--The term ``quota holder'' means an owner 
     of a farm on January 1, 1998, for which a tobacco farm 
     marketing quota or farm acreage allotment was established 
     under the Agricultural Adjustment Act of 1938 (7 U.S.C. 1281 
     et seq.).
       (3) Quota lessee.--The term ``quota lessee'' means--
       (A) a producer that owns a farm that produced tobacco 
     pursuant to a lease and transfer to that farm of all or part 
     of a tobacco farm marketing quota or farm acreage allotment 
     established under the Agricultural Adjustment Act of 1938 (7 
     U.S.C. 1281 et seq.) for any of the 1995, 1996, or 1997 crop 
     years; or
       (B) a producer that rented land from a farm operator to 
     produce tobacco under a tobacco farm marketing quota or farm 
     acreage allotment established under the Agricultural 
     Adjustment Act of 1938 (7 U.S.C. 1281 et seq.) for any of the 
     1995, 1996, or 1997 crop years.
       (4) Quota tenant.--The term ``quota tenant'' means a 
     producer that--
       (A) is the principal producer, as determined by the 
     Secretary, of tobacco on a farm where tobacco is produced 
     pursuant to a tobacco farm marketing quota or farm acreage 
     allotment established under the Agricultural Adjustment Act 
     of 1938 (7 U.S.C. 1281 et seq.) for any of the 1995, 1996, or 
     1997 crop years; and
       (B) is not a quota holder or quota lessee.
       (5) Secretary.--The term ``Secretary'' means--
       (A) in subtitles A and B, the Secretary of Agriculture; and
       (B) in section 1031, the Secretary of Labor.
       (6) Tobacco product importer.--The term ``tobacco product 
     importer'' has the meaning given the term ``importer'' in 
     section 5702 of the Internal Revenue Code of 1986.
       (7) Tobacco product manufacturer.--
       (A) In general.--The term ``tobacco product manufacturer'' 
     has the meaning given the term ``manufacturer of tobacco 
     products'' in section 5702 of the Internal Revenue Code of 
     1986.
       (B) Exclusion.--The term ``tobacco product manufacturer'' 
     does not include a person that manufactures cigars or pipe 
     tobacco.
       (8) Tobacco warehouse owner.--The term ``tobacco warehouse 
     owner'' means a warehouseman that participated in an auction

[[Page S5944]]

     market (as defined in the first section of the Tobacco 
     Inspection Act (7 U.S.C. 511)) during the 1998 marketing 
     year.
       (9) Flue-cured tobacco.--The term ``flue-cured tobacco'' 
     includes type 21 and type 37 tobacco.
              Subtitle A--Tobacco Community Revitalization

     SEC. 1011. AUTHORIZATION OF APPROPRIATIONS.

       There are appropriated and transferred to the Secretary for 
     each fiscal year such amounts from the National Tobacco Trust 
     Fund established by section 401, other than from amounts in 
     the State Litigation Settlement Account, as may be necessary 
     to carry out the provisions of this title.

     SEC. 1012. EXPENDITURES.

       The Secretary is authorized, subject to appropriations, to 
     make payments under--
       (1) section 1021 for payments for lost tobacco quota for 
     each of fiscal years 1999 through 2023, but not to exceed 
     $1,650,000,000 for any fiscal year except to the extent the 
     payments are made in accordance with subsection (d)(12) or 
     (e)(9) of section 1021;
       (2) section 1022 for industry payments for all costs of the 
     Department of Agriculture associated with the production of 
     tobacco;
       (3) section 1023 for tobacco community economic development 
     grants, but not to exceed--
       (A) $375,000,000 for each of fiscal years 1999 through 
     2008, less any amount required to be paid under section 1022 
     for the fiscal year; and
       (B) $450,000,000 for each of fiscal year 2009 through 2023, 
     less any amount required to be paid under section 1022 during 
     the fiscal year;
       (4) section 1031 for assistance provided under the tobacco 
     worker transition program, but not to exceed $25,000,000 for 
     any fiscal year; and
       (5) subpart 9 of part A of title IV of the Higher Education 
     Act of 1965 for farmer opportunity grants, but not to 
     exceed--
       (A) $42,500,000 for each of the academic years 1999-2000 
     through 2003-2004;
       (B) $50,000,000 for each of the academic years 2004-2005 
     through 2008-2009;
       (C) $57,500,000 for each of the academic years 2009-2010 
     through 2013-2014;
       (D) $65,000,000 for each of the academic years 2014-2015 
     through 2018-2019; and
       (E) $72,500,000 for each of the academic years 2019-2020 
     through 2023-2024.

     SEC. 1013. BUDGETARY TREATMENT.

       This subtitle constitutes budget authority in advance of 
     appropriations Acts and represents the obligation of the 
     Federal Government to provide payments to States and eligible 
     persons in accordance with this title.
            Subtitle B--Tobacco Market Transition Assistance

     SEC. 1021. PAYMENTS FOR LOST TOBACCO QUOTA.

       (a) In General.--Beginning with the 1999 marketing year, 
     the Secretary shall make payments for lost tobacco quota to 
     eligible quota holders, quota lessees, and quota tenants as 
     reimbursement for lost tobacco quota.
       (b) Eligibility.--To be eligible to receive payments under 
     this section, a quota holder, quota lessee, or quota tenant 
     shall--
       (1) 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 make the demonstration required under paragraph (2); and
       (2) demonstrate to the satisfaction of the Secretary that, 
     with respect to the 1997 marketing year--
       (A) the producer was a quota holder and realized income (or 
     would have realized income, as determined by the Secretary, 
     but for a medical hardship or crop disaster during the 1997 
     marketing year) from the production of tobacco through--
       (i) the active production of tobacco;
       (ii) the lease and transfer of tobacco quota to another 
     farm;
       (iii) the rental of all or part of the farm of the quota 
     holder, including the right to produce tobacco, to another 
     tobacco producer; or
       (iv) the hiring of a quota tenant to produce tobacco;
       (B) the producer was a quota lessee; or
       (C) the producer was a quota tenant.
       (c) Base Quota Level.--
       (1) In general.--The Secretary shall determine, for each 
     quota holder, quota lessee, and quota tenant, the base quota 
     level for the 1995 through 1997 marketing years.
       (2) Quota holders.--The base quota level for a quota holder 
     shall be equal to the average tobacco farm marketing quota 
     established for the farm owned by the quota holder for the 
     1995 through 1997 marketing years.
       (3) Quota lessees.--The base quota level for a quota lessee 
     shall be equal to--
       (A) 50 percent of the average number of pounds of tobacco 
     quota established for the farm for the 1995 through 1997 
     marketing years--
       (i) that was leased and transferred to a farm owned by the 
     quota lessee; or
       (ii) that was rented to the quota lessee for the right to 
     produce the tobacco; less
       (B) 25 percent of the average number of pounds of tobacco 
     quota described in subparagraph (A) for which a quota tenant 
     was the principal producer of the tobacco quota.
       (4) Quota tenants.--The base quota level for a quota tenant 
     shall be equal to the sum of--
       (A) 50 percent of the average number of pounds of tobacco 
     quota established for a farm for the 1995 through 1997 
     marketing years--
       (i) that was owned by a quota holder; and
       (ii) for which the quota tenant was the principal producer 
     of the tobacco on the farm; and
       (B) 25 percent of the average number of pounds of tobacco 
     quota for the 1995 through 1997 marketing years--
       (i)(I) that was leased and transferred to a farm owned by 
     the quota lessee; or
       (II) for which the rights to produce the tobacco were 
     rented to the quota lessee; and
       (ii) for which the quota tenant was the principal producer 
     of the tobacco on the farm.
       (5) Marketing quotas other than poundage quotas.--
       (A) In general.--For each type of tobacco for which there 
     is a marketing quota or allotment (on an acreage basis), the 
     base quota level for each quota holder, quota lessee, or 
     quota tenant shall be determined in accordance with this 
     subsection (based on a poundage conversion) by multiplying--
       (i) the average tobacco farm marketing quota or allotment 
     for the 1995 through 1997 marketing years; and
       (ii) the average yield per acre for the farm for the type 
     of tobacco for the marketing years.
       (B) Yields not available.--If the average yield per acre is 
     not available for a farm, the Secretary shall calculate the 
     base quota for the quota holder, quota lessee, or quota 
     tenant (based on a poundage conversion) by determining the 
     amount equal to the product obtained by multiplying--
       (i) the average tobacco farm marketing quota or allotment 
     for the 1995 through 1997 marketing years; and
       (ii) the average county yield per acre for the county in 
     which the farm is located for the type of tobacco for the 
     marketing years.
       (d) Payments for Lost Tobacco Quota for Types of Tobacco 
     Other Than Flue-Cured Tobacco.--
       (1) Allocation of funds.--Of the amounts made available 
     under section 1011(d)(1) for payments for lost tobacco quota, 
     the Secretary shall make available for payments under this 
     subsection an amount that bears the same ratio to the amounts 
     made available as--
       (A) the sum of all national marketing quotas for all types 
     of tobacco other than flue-cured tobacco during the 1995 
     through 1997 marketing years; bears to
       (B) the sum of all national marketing quotas for all types 
     of tobacco during the 1995 through 1997 marketing years.
       (2) Option to relinquish quota.--
       (A) In general.--Each quota holder, for types of tobacco 
     other than flue-cured tobacco, shall be given the option to 
     relinquish the farm marketing quota or farm acreage allotment 
     of the quota holder in exchange for a payment made under 
     paragraph (3).
       (B) Notification.--A quota holder shall give notification 
     of the intention of the quota holder to exercise the option 
     at such time and in such manner as the Secretary may require, 
     but not later than January 15, 1999.
       (3) Payments for lost tobacco quota to quota holders 
     exercising options to relinquish quota.--
       (A) In general.--Subject to subparagraph (E), for each of 
     fiscal years 1999 through 2008, the Secretary shall make 
     annual payments for lost tobacco quota to each quota holder 
     that has relinquished the farm marketing quota or farm 
     acreage allotment of the quota holder under paragraph (2).
       (B) Amount.--The amount of a payment made to a quota holder 
     described in subparagraph (A) for a marketing year shall 
     equal \1/10\ of the lifetime limitation established under 
     subparagraph (E).
       (C) Timing.--The Secretary shall begin making annual 
     payments under this paragraph for the marketing year in which 
     the farm marketing quota or farm acreage allotment is 
     relinquished.
       (D) Additional payments.--The Secretary may increase annual 
     payments under this paragraph in accordance with paragraph 
     (7)(E) to the extent that funding is available.
       (E) Lifetime limitation on payments.--The total amount of 
     payments made under this paragraph to a quota holder shall 
     not exceed the product obtained by multiplying the base quota 
     level for the quota holder by $8 per pound.
       (4) Reissuance of quota.--
       (A) Reallocation to lessee or tenant.--If a quota holder 
     exercises an option to relinquish a tobacco farm marketing 
     quota or farm acreage allotment under paragraph (2), a quota 
     lessee or quota tenant that was the primary producer during 
     the 1997 marketing year of tobacco pursuant to the farm 
     marketing quota or farm acreage allotment, as determined by 
     the Secretary, shall be given the option of having an 
     allotment of the farm marketing quota or farm acreage 
     allotment reallocated to a farm owned by the quota lessee or 
     quota tenant.
       (B) Conditions for reallocation.--
       (i) Timing.--A quota lessee or quota tenant that is given 
     the option of having an allotment of a farm marketing quota 
     or farm acreage allotment reallocated to a farm owned by the 
     quota lessee or quota tenant under subparagraph (A) shall 
     have 1 year from the date on which a farm marketing quota or 
     farm acreage allotment is relinquished under paragraph (2) to 
     exercise the option.
       (ii) Limitation on acreage allotment.--In the case of a 
     farm acreage allotment, the acreage allotment determined for 
     any farm

[[Page S5945]]

     subsequent to any reallocation under subparagraph (A) shall 
     not exceed 50 percent of the acreage of cropland of the farm 
     owned by the quota lessee or quota tenant.
       (iii) Limitation on marketing quota.--In the case of a farm 
     marketing quota, the marketing quota determined for any farm 
     subsequent to any reallocation under subparagraph (A) shall 
     not exceed an amount determined by multiplying--

       (I) the average county farm yield, as determined by the 
     Secretary; and
       (II) 50 percent of the acreage of cropland of the farm 
     owned by the quota lessee or quota tenant.

       (C) Eligibility of lessee or tenant for payments.--If a 
     farm marketing quota or farm acreage allotment is reallocated 
     to a quota lessee or quota tenant under subparagraph (A)--
       (i) the quota lessee or quota tenant shall not be eligible 
     for any additional payments under paragraph (5) or (6) as a 
     result of the reallocation; and
       (ii) the base quota level for the quota lessee or quota 
     tenant shall not be increased as a result of the 
     reallocation.
       (D) Reallocation to quota holders within same county or 
     state.--
       (i) In general.--Except as provided in clause (ii), if 
     there was no quota lessee or quota tenant for the farm 
     marketing quota or farm acreage allotment for a type of 
     tobacco, or if no quota lessee or quota tenant exercises an 
     option of having an allotment of the farm marketing quota or 
     farm acreage allotment for a type of tobacco reallocated, the 
     Secretary shall reapportion the farm marketing quota or farm 
     acreage allotment among the remaining quota holders for the 
     type of tobacco within the same county.
       (ii) Cross-county leasing.--In a State in which cross-
     county leasing is authorized pursuant to section 319(l) of 
     the Agricultural Adjustment Act of 1938 (7 U.S.C. 1314e(l)), 
     the Secretary shall reapportion the farm marketing quota 
     among the remaining quota holders for the type of tobacco 
     within the same State.
       (iii) Eligibility of quota holder for payments.--If a farm 
     marketing quota is reapportioned to a quota holder under this 
     subparagraph--

       (I) the quota holder shall not be eligible for any 
     additional payments under paragraph (5) or (6) as a result of 
     the reapportionment; and
       (II) the base quota level for the quota holder shall not be 
     increased as a result of the reapportionment.

       (E) Special rule for tenant of leased tobacco.--If a quota 
     holder exercises an option to relinquish a tobacco farm 
     marketing quota or farm acreage allotment under paragraph 
     (2), the farm marketing quota or farm acreage allotment shall 
     be divided evenly between, and the option of reallocating the 
     farm marketing quota or farm acreage allotment shall be 
     offered in equal portions to, the quota lessee and to the 
     quota tenant, if--
       (i) during the 1997 marketing year, the farm marketing 
     quota or farm acreage allotment was leased and transferred to 
     a farm owned by the quota lessee; and
       (ii) the quota tenant was the primary producer, as 
     determined by the Secretary, of tobacco pursuant to the farm 
     marketing quota or farm acreage allotment.
       (5) Payments for lost tobacco quota to quota holders.--
       (A) In general.--Except as otherwise provided in this 
     subsection, during any marketing year in which the national 
     marketing quota for a type of tobacco is less than the 
     average national marketing quota for the 1995 through 1997 
     marketing years, the Secretary shall make payments for lost 
     tobacco quota to each quota holder, for types of tobacco 
     other than flue-cured tobacco, that is eligible under 
     subsection (b), and has not exercised an option to relinquish 
     a tobacco farm marketing quota or farm acreage allotment 
     under paragraph (2), in an amount that is equal to the 
     product obtained by multiplying--
       (i) the number of pounds by which the basic farm marketing 
     quota (or poundage conversion) is less than the base quota 
     level for the quota holder; and
       (ii) $4 per pound.
       (B) Poundage conversion for marketing quotas other than 
     poundage quotas.--
       (i) In general.--For each type of tobacco for which there 
     is a marketing quota or allotment (on an acreage basis), the 
     poundage conversion for each quota holder during a marketing 
     year shall be determined by multiplying--

       (I) the basic farm acreage allotment for the farm for the 
     marketing year; and
       (II) the average yield per acre for the farm for the type 
     of tobacco.

       (ii) Yield not available.--If the average yield per acre is 
     not available for a farm, the Secretary shall calculate the 
     poundage conversion for each quota holder during a marketing 
     year by multiplying--

       (I) the basic farm acreage allotment for the farm for the 
     marketing year; and
       (II) the average county yield per acre for the county in 
     which the farm is located for the type of tobacco.

       (6) Payments for lost tobacco quota to quota lessees and 
     quota tenants.--Except as otherwise provided in this 
     subsection, during any marketing year in which the national 
     marketing quota for a type of tobacco is less than the 
     average national marketing quota for the type of tobacco for 
     the 1995 through 1997 marketing years, the Secretary shall 
     make payments for lost tobacco quota to each quota lessee and 
     quota tenant, for types of tobacco other than flue-cured 
     tobacco, that is eligible under subsection (b) in an amount 
     that is equal to the product obtained by multiplying--
       (A) the percentage by which the national marketing quota 
     for the type of tobacco is less than the average national 
     marketing quota for the type of tobacco for the 1995 through 
     1997 marketing years;
       (B) the base quota level for the quota lessee or quota 
     tenant; and
       (C) $4 per pound.
       (7) Lifetime limitation on payments.--Except as otherwise 
     provided in this subsection, the total amount of payments 
     made under this subsection to a quota holder, quota lessee, 
     or quota tenant during the lifetime of the quota holder, 
     quota lessee, or quota tenant shall not exceed the product 
     obtained by multiplying--
       (A) the base quota level for the quota holder, quota 
     lessee, or quota tenant; and
       (B) $8 per pound.
       (8) Limitations on aggregate annual payments.--
       (A) In general.--Except as otherwise provided in this 
     paragraph, the total amount payable under this subsection for 
     any marketing year shall not exceed the amount made available 
     under paragraph (1).
       (B) Accelerated payments.--Paragraph (1) shall not apply if 
     accelerated payments for lost tobacco quota are made in 
     accordance with paragraph (12).
       (C) Reductions.--If the sum of the amounts determined under 
     paragraphs (3), (5), and (6) for a marketing year exceeds the 
     amount made available under paragraph (1), the Secretary 
     shall make a pro rata reduction in the amounts payable under 
     paragraphs (5) and (6) to quota holders, quota lessees, and 
     quota tenants under this subsection to ensure that the total 
     amount of payments for lost tobacco quota does not exceed the 
     amount made available under paragraph (1).
       (D) Rollover of payments for lost tobacco quota.--Subject 
     to subparagraph (A), if the Secretary makes a reduction in 
     accordance with subparagraph (C), the amount of the reduction 
     shall be applied to the next marketing year and added to the 
     payments for lost tobacco quota for the marketing year.
       (E) Additional payments to quota holders exercising option 
     to relinquish quota.--If the amount made available under 
     paragraph (1) exceeds the sum of the amounts determined under 
     paragraphs (3), (5), and (6) for a marketing year, the 
     Secretary shall distribute the amount of the excess pro rata 
     to quota holders that have exercised an option to relinquish 
     a tobacco farm marketing quota or farm acreage allotment 
     under paragraph (2) by increasing the amount payable to each 
     such holder under paragraph (3).
       (9) Subsequent sale and transfer of quota.--Effective 
     beginning with the 1999 marketing year, on the sale and 
     transfer of a farm marketing quota or farm acreage allotment 
     under section 316(g) or 319(g) of the Agricultural Adjustment 
     Act of 1938 (7 U.S.C. 1314b(g), 1314e(g))--
       (A) the person that sold and transferred the quota or 
     allotment shall have--
       (i) the base quota level attributable to the person reduced 
     by the base quota level attributable to the quota that is 
     sold and transferred; and
       (ii) the lifetime limitation on payments established under 
     paragraph (7) attributable to the person reduced by the 
     product obtained by multiplying--

       (I) the base quota level attributable to the quota; and
       (II) $8 per pound; and

       (B) if the quota or allotment has never been relinquished 
     by a previous quota holder under paragraph (2), the person 
     that acquired the quota shall have--
       (i) the base quota level attributable to the person 
     increased by the base quota level attributable to the quota 
     that is sold and transferred; and
       (ii) the lifetime limitation on payments established under 
     paragraph (7) attributable to the person--

       (I) increased by the product obtained by multiplying--

       (aa) the base quota level attributable to the quota; and
       (bb) $8 per pound; but

       (II) decreased by any payments under paragraph (5) for lost 
     tobacco quota previously made that are attributable to the 
     quota that is sold and transferred.

       (10) Sale or transfer of farm.--On the sale or transfer of 
     ownership of a farm that is owned by a quota holder, the base 
     quota level established under subsection (c), the right to 
     payments under paragraph (5), and the lifetime limitation on 
     payments established under paragraph (7) shall transfer to 
     the new owner of the farm to the same extent and in the same 
     manner as those provisions applied to the previous quota 
     holder.
       (11) Death of quota lessee or quota tenant.--If a quota 
     lessee or quota tenant that is entitled to payments under 
     this subsection dies and is survived by a spouse or 1 or more 
     dependents, the right to receive the payments shall transfer 
     to the surviving spouse or, if there is no surviving spouse, 
     to the surviving dependents in equal shares.
       (12) Acceleration of payments.--
       (A) In general.--On the occurrence of any of the events 
     described in subparagraph (B), the Secretary shall make an 
     accelerated lump sum payment for lost tobacco quota as 
     established under paragraphs (5) and (6) to each quota 
     holder, quota lessee, and quota

[[Page S5946]]

     tenant for any affected type of tobacco in accordance with 
     subparagraph (C).
       (B) Triggering events.--The Secretary shall make 
     accelerated payments under subparagraph (A) if after the date 
     of enactment of this Act--
       (i) subject to subparagraph (D), for 3 consecutive 
     marketing years, the national marketing quota or national 
     acreage allotment for a type of tobacco is less than 50 
     percent of the national marketing quota or national acreage 
     allotment for the type of tobacco for the 1998 marketing 
     year; or
       (ii) Congress repeals or makes ineffective, directly or 
     indirectly, any provision of--

       (I) section 316 of the Agricultural Adjustment Act of 1938 
     (7 U.S.C. 1314b);
       (II) section 319 of the Agricultural Adjustment Act of 1938 
     (7 U.S.C. 1314e);
       (III) section 106 of the Agricultural Act of 1949 (7 U.S.C. 
     1445);
       (IV) section 106A of the Agricultural Act of 1949 (7 U.S.C. 
     1445-1); or
       (V) section 106B of the Agricultural Act of 1949 (7 U.S.C. 
     1445-2).

       (C) Amount.--The amount of the accelerated payments made to 
     each quota holder, quota lessee, and quota tenant under this 
     subsection shall be equal to--
       (i) the amount of the lifetime limitation established for 
     the quota holder, quota lessee, or quota tenant under 
     paragraph (7); less
       (ii) any payments for lost tobacco quota received by the 
     quota holder, quota lessee, or quota tenant before the 
     occurrence of any of the events described in subparagraph 
     (B).
       (D) Referendum vote not a triggering event.--A referendum 
     vote of producers for any type of tobacco that results in the 
     national marketing quota or national acreage allotment not 
     being in effect for the type of tobacco shall not be 
     considered a triggering event under this paragraph.
       (13) Ban on subsequent sale or leasing of farm marketing 
     quota or farm acreage allotment to quota holders exercising 
     option to relinquish quota.--No quota holder that exercises 
     the option to relinquish a farm marketing quota or farm 
     acreage allotment for any type of tobacco under paragraph (2) 
     shall be eligible to acquire a farm marketing quota or farm 
     acreage allotment for the type of tobacco, or to obtain the 
     lease or transfer of a farm marketing quota or farm acreage 
     allotment for the type of tobacco, for a period of 25 crop 
     years after the date on which the quota or allotment was 
     relinquished.
       (e) Payments for Lost Tobacco Quota for Flue-Cured 
     Tobacco.--
       (1) Allocation of funds.--Of the amounts made available 
     under section 1011(d)(1) for payments for lost tobacco quota, 
     the Secretary shall make available for payments under this 
     subsection an amount that bears the same ratio to the amounts 
     made available as--
       (A) the sum of all national marketing quotas for flue-cured 
     tobacco during the 1995 through 1997 marketing years; bears 
     to
       (B) the sum of all national marketing quotas for all types 
     of tobacco during the 1995 through 1997 marketing years.
       (2) Relinquishment of quota.--
       (A) In general.--Each quota holder of flue-cured tobacco 
     shall relinquish the farm marketing quota or farm acreage 
     allotment in exchange for a payment made under paragraph (3) 
     due to the transition from farm marketing quotas as provided 
     under section 317 of the Agricultural Adjustment Act of 1938 
     for flue-cured tobacco to individual tobacco production 
     permits as provided under section 317A of the Agricultural 
     Adjustment Act of 1938 for flue-cured tobacco.
       (B) Notification.--The Secretary shall notify the quota 
     holders of the relinquishment of their quota or allotment at 
     such time and in such manner as the Secretary may require, 
     but not later than November 15, 1998.
       (3) Payments for lost flue-cured tobacco quota to quota 
     holders that relinquish quota.--
       (A) In general.--For each of fiscal years 1999 through 
     2008, the Secretary shall make annual payments for lost flue-
     cured tobacco to each quota holder that has relinquished the 
     farm marketing quota or farm acreage allotment of the quota 
     holder under paragraph (2).
       (B) Amount.--The amount of a payment made to a quota holder 
     described in subparagraph (A) for a marketing year shall 
     equal \1/10\ of the lifetime limitation established under 
     paragraph (6).
       (C) Timing.--The Secretary shall begin making annual 
     payments under this paragraph for the marketing year in which 
     the farm marketing quota or farm acreage allotment is 
     relinquished.
       (D) Additional payments.--The Secretary may increase annual 
     payments under this paragraph in accordance with paragraph 
     (7)(E) to the extent that funding is available.
       (4) Payments for lost flue-cured tobacco quota to quota 
     lessees and quota tenants that have not relinquished 
     permits.--
       (A) In general.--Except as otherwise provided in this 
     subsection, during any marketing year in which the national 
     marketing quota for flue-cured tobacco is less than the 
     average national marketing quota for the 1995 through 1997 
     marketing years, the Secretary shall make payments for lost 
     tobacco quota to each quota lessee or quota tenant that--
       (i) is eligible under subsection (b);
       (ii) has been issued an individual tobacco production 
     permit under section 317A(b) of the Agricultural Adjustment 
     Act of 1938; and
       (iii) has not exercised an option to relinquish the permit.
       (B) Amount.--The amount of a payment made to a quota lessee 
     or quota tenant described in subparagraph (A) for a marketing 
     year shall be equal to the product obtained by multiplying--
       (i) the number of pounds by which the individual marketing 
     limitation established for the permit is less than twice the 
     base quota level for the quota lessee or quota tenant; and
       (ii) $2 per pound.
       (5) Payments for lost flue-cured tobacco quota to quota 
     lessees and quota tenants that have relinquished permits.--
       (A) In general.--For each of fiscal years 1999 through 
     2008, the Secretary shall make annual payments for lost flue-
     cured tobacco quota to each quota lessee and quota tenant 
     that has relinquished an individual tobacco production permit 
     under section 317A(b)(5) of the Agricultural Adjustment Act 
     of 1938.
       (B) Amount.--The amount of a payment made to a quota lessee 
     or quota tenant described in subparagraph (A) for a marketing 
     year shall be equal to \1/10\ of the lifetime limitation 
     established under paragraph (6).
       (C) Timing.--The Secretary shall begin making annual 
     payments under this paragraph for the marketing year in which 
     the individual tobacco production permit is relinquished.
       (D) Additional payments.--The Secretary may increase annual 
     payments under this paragraph in accordance with paragraph 
     (7)(E) to the extent that funding is available.
       (E) Prohibition against permit expansion.--A quota lessee 
     or quota tenant that receives a payment under this paragraph 
     shall be ineligible to receive any new or increased tobacco 
     production permit from the county production pool established 
     under section 317A(b)(8) of the Agricultural Adjustment Act 
     of 1938.
       (6) Lifetime limitation on payments.--Except as otherwise 
     provided in this subsection, the total amount of payments 
     made under this subsection to a quota holder, quota lessee, 
     or quota tenant during the lifetime of the quota holder, 
     quota lessee, or quota tenant shall not exceed the product 
     obtained by multiplying--
       (A) the base quota level for the quota holder, quota 
     lessee, or quota tenant; and
       (B) $8 per pound.
       (7) Limitations on aggregate annual payments.--
       (A) In general.--Except as otherwise provided in this 
     paragraph, the total amount payable under this subsection for 
     any marketing year shall not exceed the amount made available 
     under paragraph (1).
       (B) Accelerated payments.--Paragraph (1) shall not apply if 
     accelerated payments for lost flue-cured tobacco quota are 
     made in accordance with paragraph (9).
       (C) Reductions.--If the sum of the amounts determined under 
     paragraphs (3), (4), and (5) for a marketing year exceeds the 
     amount made available under paragraph (1), the Secretary 
     shall make a pro rata reduction in the amounts payable under 
     paragraph (4) to quota lessees and quota tenants under this 
     subsection to ensure that the total amount of payments for 
     lost flue-cured tobacco quota does not exceed the amount made 
     available under paragraph (1).
       (D) Rollover of payments for lost flue-cured tobacco 
     quota.--Subject to subparagraph (A), if the Secretary makes a 
     reduction in accordance with subparagraph (C), the amount of 
     the reduction shall be applied to the next marketing year and 
     added to the payments for lost flue-cured tobacco quota for 
     the marketing year.
       (E) Additional payments to quota holders exercising option 
     to relinquish quotas or permits, or to quota lessees or quota 
     tenants relinquishing permits.--If the amount made available 
     under paragraph (1) exceeds the sum of the amounts determined 
     under paragraphs (3), (4), and (5) for a marketing year, the 
     Secretary shall distribute the amount of the excess pro rata 
     to quota holders by increasing the amount payable to each 
     such holder under paragraphs (3) and (5).
       (8) Death of quota holder, quota lessee, or quota tenant.--
     If a quota holder, quota lessee or quota tenant that is 
     entitled to payments under paragraph (4) or (5) dies and is 
     survived by a spouse or 1 or more descendants, the right to 
     receive the payments shall transfer to the surviving spouse 
     or, if there is no surviving spouse, to the surviving 
     descendants in equal shares.
       (9) Acceleration of payments.--
       (A) In general.--On the occurrence of any of the events 
     described in subparagraph (B), the Secretary shall make an 
     accelerated lump sum payment for lost flue-cured tobacco 
     quota as established under paragraphs (3), (4), and (5) to 
     each quota holder, quota lessee, and quota tenant for flue-
     cured tobacco in accordance with subparagraph (C).
       (B) Triggering events.--The Secretary shall make 
     accelerated payments under subparagraph (A) if after the date 
     of enactment of this Act--
       (i) subject to subparagraph (D), for 3 consecutive 
     marketing years, the national marketing quota or national 
     acreage allotment for flue-cured tobacco is less than 50 
     percent of the national marketing quota or national acreage 
     allotment for flue-cured tobacco for the 1998 marketing year; 
     or
       (ii) Congress repeals or makes ineffective, directly or 
     indirectly, any provision of--

       (I) section 316 of the Agricultural Adjustment Act of 1938 
     (7 U.S.C. 1314b);
       (II) section 319 of the Agricultural Adjustment Act of 1938 
     (7 U.S.C. 1314e);

[[Page S5947]]

       (III) section 106 of the Agricultural Act of 1949 (7 U.S.C. 
     1445);
       (IV) section 106A of the Agricultural Act of 1949 (7 U.S.C. 
     1445-1);
       (V) section 106B of the Agricultural Act of 1949 (7 U.S.C. 
     1445-2); or
       (VI) section 317A of the Agricultural Adjustment Act of 
     1938.

       (C) Amount.--The amount of the accelerated payments made to 
     each quota holder, quota lessee, and quota tenant under this 
     subsection shall be equal to--
       (i) the amount of the lifetime limitation established for 
     the quota holder, quota lessee, or quota tenant under 
     paragraph (6); less
       (ii) any payments for lost flue-cured tobacco quota 
     received by the quota holder, quota lessee, or quota tenant 
     before the occurrence of any of the events described in 
     subparagraph (B).
       (D) Referendum vote not a triggering event.--A referendum 
     vote of producers for flue-cured tobacco that results in the 
     national marketing quota or national acreage allotment not 
     being in effect for flue-cured tobacco shall not be 
     considered a triggering event under this paragraph.

     SEC. 1022. INDUSTRY PAYMENTS FOR ALL DEPARTMENT COSTS 
                   ASSOCIATED WITH TOBACCO PRODUCTION.

       (a) In General.--The Secretary shall use such amounts 
     remaining unspent and obligated at the end of each fiscal 
     year to reimburse the Secretary for--
       (1) costs associated with the administration of programs 
     established under this title and amendments made by this 
     title;
       (2) costs associated with the administration of the tobacco 
     quota and price support programs administered by the 
     Secretary;
       (3) costs to the Federal Government of carrying out crop 
     insurance programs for tobacco;
       (4) costs associated with all agricultural research, 
     extension, or education activities associated with tobacco;
       (5) costs associated with the administration of loan 
     association and cooperative programs for tobacco producers, 
     as approved by the Secretary; and
       (6) any other costs incurred by the Department of 
     Agriculture associated with the production of tobacco.
       (b) Limitations.--Amounts made available under subsection 
     (a) may not be used--
       (1) to provide direct benefits to quota holders, quota 
     lessees, or quota tenants; or
       (2) in a manner that results in a decrease, or an increase 
     relative to other crops, in the amount of the crop insurance 
     premiums assessed to participating tobacco producers under 
     the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.).
       (c) Determinations.--Not later than September 30, 1998, and 
     each fiscal year thereafter, the Secretary shall determine--
       (1) the amount of costs described in subsection (a); and
       (2) the amount that will be provided under this section as 
     reimbursement for the costs.

     SEC. 1023. TOBACCO COMMUNITY ECONOMIC DEVELOPMENT GRANTS.

       (a) Authority.--The Secretary shall make grants to tobacco-
     growing States in accordance with this section to enable the 
     States to carry out economic development initiatives in 
     tobacco-growing communities.
       (b) Application.--To be eligible to receive payments under 
     this section, a State shall prepare and submit to the 
     Secretary an application at such time, in such manner, and 
     containing such information as the Secretary may require, 
     including--
       (1) a description of the activities that the State will 
     carry out using amounts received under the grant;
       (2) a designation of an appropriate State agency to 
     administer amounts received under the grant; and
       (3) a description of the steps to be taken to ensure that 
     the funds are distributed in accordance with subsection (e).
       (c) Amount of Grant.--
       (1) In general.--From the amounts available to carry out 
     this section for a fiscal year, the Secretary shall allot to 
     each State an amount that bears the same ratio to the amounts 
     available as the total farm income of the State derived from 
     the production of tobacco during the 1995 through 1997 
     marketing years (as determined under paragraph (2)) bears to 
     the total farm income of all States derived from the 
     production of tobacco during the 1995 through 1997 marketing 
     years.
       (2) Tobacco income.--For the 1995 through 1997 marketing 
     years, the Secretary shall determine the amount of farm 
     income derived from the production of tobacco in each State 
     and in all States.
       (d) Payments.--
       (1) In general.--A State that has an application approved 
     by the Secretary under subsection (b) shall be entitled to a 
     payment under this section in an amount that is equal to its 
     allotment under subsection (c).
       (2) Form of payments.--The Secretary may make payments 
     under this section to a State in installments, and in advance 
     or by way of reimbursement, with necessary adjustments on 
     account of overpayments or underpayments, as the Secretary 
     may determine.
       (3) Reallotments.--Any portion of the allotment of a State 
     under subsection (c) that the Secretary determines will not 
     be used to carry out this section in accordance with an 
     approved State application required under subsection (b), 
     shall be reallotted by the Secretary to other States in 
     proportion to the original allotments to the other States.
       (e) Use and Distribution of Funds.--
       (1) In general.--Amounts received by a State under this 
     section shall be used to carry out economic development 
     activities, including--
       (A) rural business enterprise activities described in 
     subsections (c) and (e) of section 310B of the Consolidated 
     Farm and Rural Development Act (7 U.S.C. 1932);
       (B) down payment loan assistance programs that are similar 
     to the program described in section 310E of the Consolidated 
     Farm and Rural Development Act (7 U.S.C. 1935);
       (C) activities designed to help create productive farm or 
     off-farm employment in rural areas to provide a more viable 
     economic base and enhance opportunities for improved incomes, 
     living standards, and contributions by rural individuals to 
     the economic and social development of tobacco communities;
       (D) activities that expand existing infrastructure, 
     facilities, and services to capitalize on opportunities to 
     diversify economies in tobacco communities and that support 
     the development of new industries or commercial ventures;
       (E) activities by agricultural organizations that provide 
     assistance directly to participating tobacco producers to 
     assist in developing other agricultural activities that 
     supplement tobacco-producing activities;
       (F) initiatives designed to create or expand locally owned 
     value-added processing and marketing operations in tobacco 
     communities;
       (G) technical assistance activities by persons to support 
     farmer-owned enterprises, or agriculture-based rural 
     development enterprises, of the type described in section 252 
     or 253 of the Trade Act of 1974 (19 U.S.C. 2342, 2343); and
       (H) initiatives designed to partially compensate tobacco 
     warehouse owners for lost revenues and assist the tobacco 
     warehouse owners in establishing successful business 
     enterprises.
       (2) Tobacco-growing counties.--Assistance may be provided 
     by a State under this section only to assist a county in the 
     State that has been determined by the Secretary to have in 
     excess of $100,000 in income derived from the production of 
     tobacco during 1 or more of the 1995 through 1997 marketing 
     years. For purposes of this section, the term ``tobacco-
     growing county'' includes a political subdivision surrounded 
     within a State by a county that has been determined by the 
     Secretary to have in excess of $100,000 in income derived 
     from the production of tobacco during 1 or more of the 1995 
     through 1997 marketing years.
       (3) Distribution.--
       (A) Economic development activities.--Not less than 20 
     percent of the amounts received by a State under this section 
     shall be used to carry out--
       (i) economic development activities described in 
     subparagraph (E) or (F) of paragraph (1); or
       (ii) agriculture-based rural development activities 
     described in paragraph (1)(G).
       (B) Technical assistance activities.--Not less than 4 
     percent of the amounts received by a State under this section 
     shall be used to carry out technical assistance activities 
     described in paragraph (1)(G).
       (C) Tobacco warehouse owner initiatives.--Not less than 6 
     percent of the amounts received by a State under this section 
     during each of fiscal years 1999 through 2008 shall be used 
     to carry out initiatives described in paragraph (1)(H).
       (D) Tobacco-growing counties.--To be eligible to receive 
     payments under this section, a State shall demonstrate to the 
     Secretary that funding will be provided, during each 5-year 
     period for which funding is provided under this section, for 
     activities in each county in the State that has been 
     determined under paragraph (2) to have in excess of $100,000 
     in income derived from the production of tobacco, in amounts 
     that are at least equal to the product obtained by 
     multiplying--
       (i) the ratio that the tobacco production income in the 
     county determined under paragraph (2) bears to the total 
     tobacco production income for the State determined under 
     subsection (c); and
       (ii) 50 percent of the total amounts received by a State 
     under this section during the 5-year period.
       (f) Preferences in Hiring.--A State may require recipients 
     of funds under this section to provide a preference in 
     employment to--
       (1) an individual who--
       (A) during the 1998 calendar year, was employed in the 
     manufacture, processing, or warehousing of tobacco or tobacco 
     products, or resided, in a county described in subsection 
     (e)(2); and
       (B) is eligible for assistance under the tobacco worker 
     transition program established under section 1031; or
       (2) an individual who--
       (A) during the 1998 marketing year, carried out tobacco 
     quota or relevant tobacco production activities in a county 
     described in subsection (e)(2);
       (B) is eligible for a farmer opportunity grant under 
     subpart 9 of part A of title IV of the Higher Education Act 
     of 1965; and
       (C) has successfully completed a course of study at an 
     institution of higher education.
       (g) Maintenance of Effort.--
       (1) In general.--Subject to paragraph (2), a State shall 
     provide an assurance to the Secretary that the amount of 
     funds expended by the State and all counties in the State 
     described in subsection (e)(2) for any activities funded 
     under this section for a fiscal year is not less than 90 
     percent of the amount of

[[Page S5948]]

     funds expended by the State and counties for the activities 
     for the preceding fiscal year.
       (2) Reduction of grant amount.--If a State does not provide 
     an assurance described in paragraph (1), the Secretary shall 
     reduce the amount of the grant determined under subsection 
     (c) by an amount equal to the amount by which the amount of 
     funds expended by the State and counties for the activities 
     is less than 90 percent of the amount of funds expended by 
     the State and counties for the activities for the preceding 
     fiscal year, as determined by the Secretary.
       (3) Federal funds.--For purposes of this subsection, the 
     amount of funds expended by a State or county shall not 
     include any amounts made available by the Federal Government.

     SEC. 1024. FLUE-CURED TOBACCO PRODUCTION PERMITS.

       The Agricultural Adjustment Act of 1938 is amended by 
     inserting after section 317 (7 U.S.C. 1314c) the following:

     ``SEC. 317A. FLUE-CURED TOBACCO PRODUCTION PERMITS.

       ``(a) Definitions.--In this section:
       ``(1) Individual acreage limitation.--The term `individual 
     acreage limitation' means the number of acres of flue-cured 
     tobacco that may be planted by the holder of a permit during 
     a marketing year, calculated--
       ``(A) prior to--
       ``(i) any increase or decrease in the number due to 
     undermarketings or overmarketings; and
       ``(ii) any reduction under subsection (i); and
       ``(B) in a manner that ensures that--
       ``(i) the total of all individual acreage limitations is 
     equal to the national acreage allotment, less the reserve 
     provided under subsection (h); and
       ``(ii) the individual acreage limitation for a marketing 
     year bears the same ratio to the individual acreage 
     limitation for the previous marketing year as the ratio that 
     the national acreage allotment for the marketing year bears 
     to the national acreage allotment for the previous marketing 
     year, subject to adjustments by the Secretary to account for 
     any reserve provided under subsection (h).
       ``(2) Individual marketing limitation.--The term 
     `individual marketing limitation' means the number of pounds 
     of flue-cured tobacco that may be marketed by the holder of a 
     permit during a marketing year, calculated--
       ``(A) prior to--
       ``(i) any increase or decrease in the number due to 
     undermarketings or overmarketings; and
       ``(ii) any reduction under subsection (i); and
       ``(B) in a manner that ensures that--
       ``(i) the total of all individual marketing limitations is 
     equal to the national marketing quota, less the reserve 
     provided under subsection (h); and
       ``(ii) the individual marketing limitation for a marketing 
     year is obtained by multiplying the individual acreage 
     limitation by the permit yield, prior to any adjustment for 
     undermarketings or overmarketings.
       ``(3) Individual tobacco production permit.--The term 
     `individual tobacco production permit' means a permit issued 
     by the Secretary to a person authorizing the production of 
     flue-cured tobacco for any marketing year during which this 
     section is effective.
       ``(4) National acreage allotment.--The term `national 
     acreage allotment' means the quantity determined by 
     dividing--
       ``(A) the national marketing quota; by
       ``(B) the national average yield goal.
       ``(5) National average yield goal.--The term `national 
     average yield goal' means the national average yield for 
     flue-cured tobacco during the 5 marketing years immediately 
     preceding the marketing year for which the determination is 
     being made.
       ``(6) National marketing quota.--For the 1999 and each 
     subsequent crop of flue-cured tobacco, the term `national 
     marketing quota' for a marketing year means the quantity of 
     flue-cured tobacco, as determined by the Secretary, that is 
     not more than 103 percent nor less than 97 percent of the 
     total of--
       ``(A) the aggregate of the quantities of flue-cured tobacco 
     that domestic manufacturers of cigarettes estimate that the 
     manufacturers intend to purchase on the United States auction 
     markets or from producers during the marketing year, as 
     compiled and determined under section 320A;
       ``(B) the average annual quantity of flue-cured tobacco 
     exported from the United States during the 3 marketing years 
     immediately preceding the marketing year for which the 
     determination is being made; and
       ``(C) the quantity, if any, of flue-cured tobacco that the 
     Secretary, in the discretion of the Secretary, determines is 
     necessary to increase or decrease the inventory of the 
     producer-owned cooperative marketing association that has 
     entered into a loan agreement with the Commodity Credit 
     Corporation to make price support available to producers of 
     flue-cured tobacco to establish or maintain the inventory at 
     the reserve stock level for flue-cured tobacco.
       ``(7) Permit yield.--The term `permit yield' means the 
     yield of tobacco per acre for an individual tobacco 
     production permit holder that is--
       ``(A) based on a preliminary permit yield that is equal to 
     the average yield during the 5 marketing years immediately 
     preceding the marketing year for which the determination is 
     made in the county where the holder of the permit is 
     authorized to plant flue-cured tobacco, as determined by the 
     Secretary, on the basis of actual yields of farms in the 
     county; and
       ``(B) adjusted by a weighted national yield factor 
     calculated by--
       ``(i) multiplying each preliminary permit yield by the 
     individual acreage limitation, prior to adjustments for 
     overmarketings, undermarketings, or reductions required under 
     subsection (i); and
       ``(ii) dividing the sum of the products under clause (i) 
     for all flue-cured individual tobacco production permit 
     holders by the national acreage allotment.
       ``(b) Initial Issuance of Permits.--
       ``(1) Termination of flue-cured marketing quotas.--On the 
     date of enactment of the National Tobacco Policy and Youth 
     Smoking Reduction Act, farm marketing quotas as provided 
     under section 317 shall no longer be in effect for flue-cured 
     tobacco.
       ``(2) Issuance of permits to quota holders that were 
     principal producers.--
       ``(A) In general.--By January 15, 1999, each individual 
     quota holder under section 317 that was a principal producer 
     of flue-cured tobacco during the 1998 marketing year, as 
     determined by the Secretary, shall be issued an individual 
     tobacco production permit under this section.
       ``(B) Notification.--The Secretary shall notify the holder 
     of each permit of the individual acreage limitation and the 
     individual marketing limitation applicable to the holder for 
     each marketing year.
       ``(C) Individual acreage limitation for 1999 marketing 
     year.--In establishing the individual acreage limitation for 
     the 1999 marketing year under this section, the farm acreage 
     allotment that was allotted to a farm owned by the quota 
     holder for the 1997 marketing year shall be considered the 
     individual acreage limitation for the previous marketing 
     year.
       ``(D) Individual marketing limitation for 1999 marketing 
     year.--In establishing the individual marketing limitation 
     for the 1999 marketing year under this section, the farm 
     marketing quota that was allotted to a farm owned by the 
     quota holder for the 1997 marketing year shall be considered 
     the individual marketing limitation for the previous 
     marketing year.
       ``(3) Quota holders that were not principal producers.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     on approval through a referendum under subsection (c)--
       ``(i) each person that was a quota holder under section 317 
     but that was not a principal producer of flue-cured tobacco 
     during the 1997 marketing year, as determined by the 
     Secretary, shall not be eligible to own a permit; and
       ``(ii) the Secretary shall not issue any permit during the 
     25-year period beginning on the date of enactment of this Act 
     to any person that was a quota holder and was not the 
     principal producer of flue-cured tobacco during the 1997 
     marketing year.
       ``(B) Medical hardships and crop disasters.--Subparagraph 
     (A) shall not apply to a person that would have been the 
     principal producer of flue-cured tobacco during the 1997 
     marketing year but for a medical hardship or crop disaster 
     that occurred during the 1997 marketing year.
       ``(C) Administration.--The Secretary shall issue 
     regulations--
       ``(i) defining the term `person' for the purpose of this 
     paragraph; and
       ``(ii) prescribing such rules as the Secretary determines 
     are necessary to ensure a fair and reasonable application of 
     the prohibition established under this paragraph.
       ``(4) Issuance of permits to principal producers of flue-
     cured tobacco.--
       ``(A) In general.--By January 15, 1999, each individual 
     quota lessee or quota tenant (as defined in section 1002 of 
     the LEAF Act) that was the principal producer of flue-cured 
     tobacco during the 1997 marketing year, as determined by the 
     Secretary, shall be issued an individual tobacco production 
     permit under this section.
       ``(B) Individual acreage limitations.--In establishing the 
     individual acreage limitation for the 1999 marketing year 
     under this section, the farm acreage allotment that was 
     allotted to a farm owned by a quota holder for whom the quota 
     lessee or quota tenant was the principal producer of flue-
     cured tobacco during the 1997 marketing year shall be 
     considered the individual acreage limitation for the previous 
     marketing year.
       ``(C) Individual marketing limitations.--In establishing 
     the individual marketing limitation for the 1999 marketing 
     year under this section, the individual marketing limitation 
     for the previous year for an individual described in this 
     paragraph shall be calculated by multiplying--
       ``(i) the farm marketing quota that was allotted to a farm 
     owned by a quota holder for whom the quota lessee or quota 
     holder was the principal producer of flue-cured tobacco 
     during the 1997 marketing year, by
       ``(ii) the ratio that--

       ``(I) the sum of all flue-cured tobacco farm marketing 
     quotas for the 1997 marketing year prior to adjusting for 
     undermarketing and overmarketing; bears to
       ``(II) the sum of all flue-cured tobacco farm marketing 
     quotas for the 1998 marketing year, after adjusting for 
     undermarketing and overmarketing.

       ``(D) Special rule for tenant of leased flue-cured 
     tobacco.--If the farm marketing quota or farm acreage 
     allotment of a quota holder was produced pursuant to an 
     agreement under which a quota lessee rented land from a quota 
     holder and a quota tenant was

[[Page S5949]]

     the primary producer, as determined by the Secretary, of 
     flue-cured tobacco pursuant to the farm marketing quota or 
     farm acreage allotment, the farm marketing quota or farm 
     acreage allotment shall be divided proportionately between 
     the quota lessee and quota tenant for purposes of issuing 
     individual tobacco production permits under this paragraph.
       ``(5) Option of quota lessee or quota tenant to relinquish 
     permit.--
       ``(A) In general.--Each quota lessee or quota tenant that 
     is issued an individual tobacco production permit under 
     paragraph (4) shall be given the option of relinquishing the 
     permit in exchange for payments made under section 1021(e)(5) 
     of the LEAF Act.
       ``(B) Notification.--A quota lessee or quota tenant that is 
     issued an individual tobacco production permit shall give 
     notification of the intention to exercise the option at such 
     time and in such manner as the Secretary may require, but not 
     later than 45 days after the permit is issued.
       ``(C) Reallocation of permit.--The Secretary shall add the 
     authority to produce flue-cured tobacco under the individual 
     tobacco production permit relinquished under this paragraph 
     to the county production pool established under paragraph (8) 
     for reallocation by the appropriate county committee.
       ``(6) Active producer requirement.--
       ``(A) Requirement for sharing risk.--No individual tobacco 
     production permit shall be issued to, or maintained by, a 
     person that does not fully share in the risk of producing a 
     crop of flue-cured tobacco.
       ``(B) Criteria for sharing risk.--For purposes of this 
     paragraph, a person shall be considered to have fully shared 
     in the risk of production of a crop if--
       ``(i) the investment of the person in the production of the 
     crop is not less than 100 percent of the costs of production 
     associated with the crop;
       ``(ii) the amount of the person's return on the investment 
     is dependent solely on the sale price of the crop; and
       ``(iii) the person may not receive any of the return before 
     the sale of the crop.
       ``(C) Persons not sharing risk.--
       ``(i) Forfeiture.--Any person that fails to fully share in 
     the risks of production under this paragraph shall forfeit an 
     individual tobacco production permit if, after notice and 
     opportunity for a hearing, the appropriate county committee 
     determines that the conditions for forfeiture exist.
       ``(ii) Reallocation.--The Secretary shall add the authority 
     to produce flue-cured tobacco under the individual tobacco 
     production permit forfeited under this subparagraph to the 
     county production pool established under paragraph (8) for 
     reallocation by the appropriate county committee.
       ``(D) Notice.--Notice of any determination made by a county 
     committee under subparagraph (C) shall be mailed, as soon as 
     practicable, to the person involved.
       ``(E) Review.--If the person is dissatisfied with the 
     determination, the person may request, not later than 15 days 
     after notice of the determination is received, a review of 
     the determination by a local review committee under the 
     procedures established under section 363 for farm marketing 
     quotas.
       ``(7) County of origin requirement.--For the 1999 and each 
     subsequent crop of flue-cured tobacco, all tobacco produced 
     pursuant to an individual tobacco production permit shall be 
     produced in the same county in which was produced the tobacco 
     produced during the 1997 marketing year pursuant to the farm 
     marketing quota or farm acreage allotment on which the 
     individual tobacco production permit is based.
       ``(8) County production pool.--
       ``(A) In general.--The authority to produce flue-cured 
     tobacco under an individual tobacco production permit that is 
     forfeited, relinquished, or surrendered within a county may 
     be reallocated by the appropriate county committee to tobacco 
     producers located in the same county that apply to the 
     committee to produce flue-cured tobacco under the authority.
       ``(B) Priority.--In reallocating individual tobacco 
     production permits under this paragraph, a county committee 
     shall provide a priority to--
       ``(i) an active tobacco producer that controls the 
     authority to produce a quantity of flue-cured tobacco under 
     an individual tobacco production permit that is equal to or 
     less than the average number of pounds of flue-cured tobacco 
     that was produced by the producer during each of the 1995 
     through 1997 marketing years, as determined by the Secretary; 
     and
       ``(ii) a new tobacco producer.
       ``(C) Criteria.--Individual tobacco production permits 
     shall be reallocated by the appropriate county committee 
     under this paragraph in a fair and equitable manner after 
     taking into consideration--
       ``(i) the experience of the producer;
       ``(ii) the availability of land, labor, and equipment for 
     the production of tobacco;
       ``(iii) crop rotation practices; and
       ``(iv) the soil and other physical factors affecting the 
     production of tobacco.
       ``(D) Medical hardships and crop disasters.--
     Notwithstanding any other provision of this Act, the 
     Secretary may issue an individual tobacco production permit 
     under this paragraph to a producer that is otherwise 
     ineligible for the permit due to a medical hardship or crop 
     disaster that occurred during the 1997 marketing year.
       ``(c) Referendum.--
       ``(1) Announcement of quota and allotment.--Not later than 
     December 15, 1998, the Secretary pursuant to subsection (b) 
     shall determine and announce--
       ``(A) the quantity of the national marketing quota for 
     flue-cured tobacco for the 1999 marketing year; and
       ``(B) the national acreage allotment and national average 
     yield goal for the 1999 crop of flue-cured tobacco.
       ``(2) Special referendum.--Not later than 30 days after the 
     announcement of the quantity of the national marketing quota 
     in 2001, the Secretary shall conduct a special referendum of 
     the tobacco production permit holders that were the principal 
     producers of flue-cured tobacco of the 1997 crop to determine 
     whether the producers approve or oppose the continuation of 
     individual tobacco production permits on an acreage-poundage 
     basis as provided in this section for the 2002 through 2004 
     marketing years.
       ``(3) Approval of permits.--If the Secretary determines 
     that more than 66\2/3\ percent of the producers voting in the 
     special referendum approve the establishment of individual 
     tobacco production permits on an acreage-poundage basis--
       ``(A) individual tobacco production permits on an acreage-
     poundage basis as provided in this section shall be in effect 
     for the 2002 through 2004 marketing years; and
       ``(B) marketing quotas on an acreage-poundage basis shall 
     cease to be in effect for the 2002 through 2004 marketing 
     years.
       ``(4) Disapproval of permits.--If individual tobacco 
     production permits on an acreage-poundage basis are not 
     approved by more than 66\2/3\ percent of the producers voting 
     in the referendum, no marketing quotas on an acreage-poundage 
     basis shall continue in effect that were proclaimed under 
     section 317 prior to the referendum.
       ``(5) Applicable marketing years.--If individual tobacco 
     production permits have been made effective for flue-cured 
     tobacco on an acreage-poundage basis pursuant to this 
     subsection, the Secretary shall, not later than December 15 
     of any future marketing year, announce a national marketing 
     quota for that type of tobacco for the next 3 succeeding 
     marketing years if the marketing year is the last year of 3 
     consecutive years for which individual tobacco production 
     permits previously proclaimed will be in effect.
       ``(d) Annual Announcement of National Marketing Quota.--The 
     Secretary shall determine and announce the national marketing 
     quota, national acreage allotment, and national average yield 
     goal for the second and third marketing years of any 3-year 
     period for which individual tobacco production permits are in 
     effect on or before the December 15 immediately preceding the 
     beginning of the marketing year to which the quota, 
     allotment, and goal apply.
       ``(e) Annual Announcement of Individual Tobacco Production 
     Permits.--If a national marketing quota, national acreage 
     allotment, and national average yield goal are determined and 
     announced, the Secretary shall provide for the determination 
     of individual tobacco production permits, individual acreage 
     limitations, and individual marketing limitations under this 
     section for the crop and marketing year covered by the 
     determinations.
       ``(f) Assignment of Tobacco Production Permits.--
       ``(1) Limitation to same county.--Each individual tobacco 
     production permit holder shall assign the individual acreage 
     limitation and individual marketing limitation to 1 or more 
     farms located within the county of origin of the individual 
     tobacco production permit.
       ``(2) Filing with county committee.--The assignment of an 
     individual acreage limitation and individual marketing 
     limitation shall not be effective until evidence of the 
     assignment, in such form as required by the Secretary, is 
     filed with and determined by the county committee for the 
     county in which the farm involved is located.
       ``(3) Limitation on tillable cropland.--The total acreage 
     assigned to any farm under this subsection shall not exceed 
     the acreage of cropland on the farm.
       ``(g) Prohibition on Sale or Leasing of Individual Tobacco 
     Production Permits.--
       ``(1) In general.--Except as provided in paragraphs (2) and 
     (3), the Secretary shall not permit the sale and transfer, or 
     lease and transfer, of an individual tobacco production 
     permit issued under this section.
       ``(2) Transfer to descendants.--
       ``(A) Death.--In the case of the death of a person to whom 
     an individual tobacco production permit has been issued under 
     this section, the permit shall transfer to the surviving 
     spouse of the person or, if there is no surviving spouse, to 
     surviving direct descendants of the person.
       ``(B) Temporary inability to farm.--In the case of the 
     death of a person to whom an individual tobacco production 
     permit has been issued under this section and whose 
     descendants are temporarily unable to produce a crop of 
     tobacco, the Secretary may hold the license in the name of 
     the descendants for a period of not more than 18 months.
       ``(3) Voluntary transfers.--A person that is eligible to 
     obtain an individual tobacco production permit under this 
     section may at any time transfer all or part of the permit to 
     the person's spouse or direct descendants that are actively 
     engaged in the production of tobacco.
       ``(h) Reserve.--
       ``(1) In general.--For each marketing year for which 
     individual tobacco production permits are in effect under 
     this section, the Secretary may establish a reserve from the 
     national marketing quota in a quantity equal

[[Page S5950]]

     to not more than 1 percent of the national marketing quota to 
     be available for--
       ``(A) making corrections of errors in individual acreage 
     limitations and individual marketing limitations;
       ``(B) adjusting inequities; and
       ``(C) establishing individual tobacco production permits 
     for new tobacco producers (except that not less than two-
     thirds of the reserve shall be for establishing such permits 
     for new tobacco producers).
       ``(2) Eligible persons.--To be eligible for a new 
     individual tobacco production permit, a producer must not 
     have been the principal producer of tobacco during the 
     immediately preceding 5 years.
       ``(3) Apportionment for new producers.--The part of the 
     reserve held for apportionment to new individual tobacco 
     producers shall be allotted on the basis of--
       ``(A) land, labor, and equipment available for the 
     production of tobacco;
       ``(B) crop rotation practices;
       ``(C) soil and other physical factors affecting the 
     production of tobacco; and
       ``(D) the past tobacco-producing experience of the 
     producer.
       ``(4) Permit yield.--The permit yield for any producer for 
     which a new individual tobacco production permit is 
     established shall be determined on the basis of available 
     productivity data for the land involved and yields for 
     similar farms in the same county.
       ``(i) Penalties.--
       ``(1) Production on other farms.--If any quantity of 
     tobacco is marketed as having been produced under an 
     individual acreage limitation or individual marketing 
     limitation assigned to a farm but was produced on a different 
     farm, the individual acreage limitation or individual 
     marketing limitation for the following marketing year shall 
     be forfeited.
       ``(2) False report.--If a person to which an individual 
     tobacco production permit is issued files, or aids or 
     acquiesces in the filing of, a false report with respect to 
     the assignment of an individual acreage limitation or 
     individual marketing limitation for a quantity of tobacco, 
     the individual acreage limitation or individual marketing 
     limitation for the following marketing year shall be 
     forfeited.
       ``(j) Marketing Penalties.--
       ``(1) In general.--When individual tobacco production 
     permits under this section are in effect, provisions with 
     respect to penalties for the marketing of excess tobacco and 
     the other provisions contained in section 314 shall apply in 
     the same manner and to the same extent as they would apply 
     under section 317(g) if farm marketing quotas were in effect.
       ``(2) Production on other farms.--If a producer falsely 
     identifies tobacco as having been produced on or marketed 
     from a farm to which an individual acreage limitation or 
     individual marketing limitation has been assigned, future 
     individual acreage limitations and individual marketing 
     limitations shall be forfeited.''.

     SEC. 1025. MODIFICATIONS IN FEDERAL TOBACCO PROGRAMS.

       (a) Program Referenda.--Section 312(c) of the Agricultural 
     Adjustment Act of 1938 (7 U.S.C. 1312(c)) is amended--
       (1) by striking ``(c) Within thirty'' and inserting the 
     following:
       ``(c) Referenda on Quotas.--
       ``(1) In general.--Not later than 30''; and
       (2) by adding at the end the following:
       ``(2) Referenda on program changes.--
       ``(A) In general.--In the case of any type of tobacco for 
     which marketing quotas are in effect, on the receipt of a 
     petition from more than 5 percent of the producers of that 
     type of tobacco in a State, the Secretary shall conduct a 
     statewide referendum on any proposal related to the lease and 
     transfer of tobacco quota within a State requested by the 
     petition that is authorized under this part.
       ``(B) Approval of proposals.--If a majority of producers of 
     the type of tobacco in the State approve a proposal in a 
     referendum conducted under subparagraph (A), the Secretary 
     shall implement the proposal in a manner that applies to all 
     producers and quota holders of that type of tobacco in the 
     State.''.
       (b) Purchase Requirements.--Section 320B of the 
     Agricultural Adjustment Act of 1938 (7 U.S.C. 1314h) is 
     amended--
       (1) in subsection (c)--
       (A) by striking ``(c) The amount'' and inserting ``(c) 
     Amount of Penalty.--For the 1998 and subsequent marketing 
     years, the amount''; and
       (B) by striking paragraph (1) and inserting the following:
       ``(1) 105 percent of the average market price for the type 
     of tobacco involved during the preceding marketing year; 
     and''.
       (c) Elimination of Tobacco Marketing Assessment.--
       (1) In general.--Section 106 of the Agricultural Act of 
     1949 (7 U.S.C. 1445) is amended by striking subsection (g).
       (2) Conforming amendment.--Section 422(c) of the Uruguay 
     Round Agreements Act (Public Law 103-465; 7 U.S.C. 1445 note) 
     is amended by striking ``section 106(g), 106A, or 106B of the 
     Agricultural Act of 1949 (7 U.S.C. 1445(g), 1445-1, or 1445-
     2)'' and inserting ``section 106A or 106B of the Agricultural 
     Act of 1949 (7 U.S.C. 1445-1, 1445-2)''.
       (d) Adjustment for Land Rental Costs.--Section 106 of the 
     Agricultural Act of 1949 (7 U.S.C. 1445) is amended by adding 
     at the end the following:
       ``(h) Adjustment for Land Rental Costs.--For each of the 
     1999 and 2000 marketing years for flue-cured tobacco, after 
     consultation with producers, State farm organizations and 
     cooperative associations, the Secretary shall make an 
     adjustment in the price support level for flue-cured tobacco 
     equal to the annual change in the average cost per pound to 
     flue-cured producers, as determined by the Secretary, under 
     agreements through which producers rent land to produce flue-
     cured tobacco.''.
       (e) Fire-Cured and Dark Air-Cured Tobacco Programs.--
       (1) Limitation on transfers.--Section 318(g) of the 
     Agricultural Adjustment Act of 1938 (7 U.S.C. 13l4d(g)) is 
     amended--
       (A) by striking ``ten'' and inserting ``30''; and
       (B) by inserting ``during any crop year'' after 
     ``transferred to any farm''.
       (2) Loss of allotment or quota through underplanting.--
     Section 318 of the Agricultural Adjustment Act of 1938 (7 
     U.S.C. 1314d) is amended by adding at the end the following:
       ``(k) Loss of Allotment or Quota Through Underplanting.--
     Effective for the 1999 and subsequent marketing years, no 
     acreage allotment or acreage-poundage quota, other than a new 
     marketing quota, shall be established for a farm on which no 
     fire-cured or dark air-cured tobacco was planted or 
     considered planted during at least 2 of the 3 crop years 
     immediately preceding the crop year for which the acreage 
     allotment or acreage-poundage quota would otherwise be 
     established.''.
       (f) Expansion of Types of Tobacco Subject to No Net Cost 
     Assessment.--
       (1) No net cost tobacco fund.--Section 106A(d)(1)(A) of the 
     Agricultural Act of 1949 (7 U.S.C. 1445-1(d)(1)(A)) is 
     amended--
       (A) in clause (ii), by inserting after ``Burley quota 
     tobacco'' the following: ``and fire-cured and dark air-cured 
     quota tobacco''; and
       (B) in clause (iii)--
       (i) in the matter preceding subclause (I), by striking 
     ``Flue-cured or Burley tobacco'' and inserting ``each kind of 
     tobacco for which price support is made available under this 
     Act, and each kind of like tobacco,''; and
       (ii) by striking subclause (II) and inserting the 
     following:

       ``(II) the sum of the amount of the per pound producer 
     contribution and purchaser assessment (if any) for the kind 
     of tobacco payable under clauses (i) and (ii); and''.

       (2) No net cost tobacco account.--Section 106B(d)(1) of the 
     Agricultural Act of 1949 (7 U.S.C. 1445-2(d)(1)) is amended--
       (A) in subparagraph (B), by inserting after ``Burley quota 
     tobacco'' the following: ``and fire-cured and dark air-cured 
     tobacco''; and
       (B) in subparagraph (C), by striking ``Flue-cured and 
     Burley tobacco'' and inserting ``each kind of tobacco for 
     which price support is made available under this Act, and 
     each kind of like tobacco,''.
          Subtitle C--Farmer and Worker Transition Assistance

     SEC. 1031. TOBACCO WORKER TRANSITION PROGRAM.

       (a) Group Eligibility Requirements.--
       (1) Criteria.--A group of workers (including workers in any 
     firm or subdivision of a firm involved in the manufacture, 
     processing, or warehousing of tobacco or tobacco products) 
     shall be certified as eligible to apply for adjustment 
     assistance under this section pursuant to a petition filed 
     under subsection (b) if the Secretary of Labor determines 
     that a significant number or proportion of the workers in the 
     workers' firm or an appropriate subdivision of the firm have 
     become totally or partially separated, or are threatened to 
     become totally or partially separated, and--
       (A) the sales or production, or both, of the firm or 
     subdivision have decreased absolutely; and
       (B) the implementation of the national tobacco settlement 
     contributed importantly to the workers' separation or threat 
     of separation and to the decline in the sales or production 
     of the firm or subdivision.
       (2) Definition of contributed importantly.--In paragraph 
     (1)(B), the term ``contributed importantly'' means a cause 
     that is important but not necessarily more important than any 
     other cause.
       (3) Regulations.--The Secretary shall issue regulations 
     relating to the application of the criteria described in 
     paragraph (1) in making preliminary findings under subsection 
     (b) and determinations under subsection (c).
       (b) Preliminary Findings and Basic Assistance.--
       (1) Filing of petitions.--A petition for certification of 
     eligibility to apply for adjustment assistance under this 
     section may be filed by a group of workers (including workers 
     in any firm or subdivision of a firm involved in the 
     manufacture, processing, or warehousing of tobacco or tobacco 
     products) or by their certified or recognized union or other 
     duly authorized representative with the Governor of the State 
     in which the workers' firm or subdivision thereof is located.
       (2) Findings and assistance.--On receipt of a petition 
     under paragraph (1), the Governor shall--
       (A) notify the Secretary that the Governor has received the 
     petition;
       (B) within 10 days after receiving the petition--
       (i) make a preliminary finding as to whether the petition 
     meets the criteria described in subsection (a)(1); and
       (ii) transmit the petition, together with a statement of 
     the finding under clause (i) and reasons for the finding, to 
     the Secretary for action under subsection (c); and

[[Page S5951]]

       (C) if the preliminary finding under subparagraph (B)(i) is 
     affirmative, ensure that rapid response and basic 
     readjustment services authorized under other Federal laws are 
     made available to the workers.
       (c) Review of Petitions by Secretary; Certifications.--
       (1) In general.--The Secretary, within 30 days after 
     receiving a petition under subsection (b)(2)(B)(ii), shall 
     determine whether the petition meets the criteria described 
     in subsection (a)(1). On a determination that the petition 
     meets the criteria, the Secretary shall issue to workers 
     covered by the petition a certification of eligibility to 
     apply for the assistance described in subsection (d).
       (2) Denial of certification.--On the denial of a 
     certification with respect to a petition under paragraph (1), 
     the Secretary shall review the petition in accordance with 
     the requirements of other applicable assistance programs to 
     determine if the workers may be certified under the other 
     programs.
       (d) Comprehensive Assistance.--
       (1) In general.--Workers covered by a certification issued 
     by the Secretary under subsection (c)(1) shall be provided 
     with benefits and services described in paragraph (2) in the 
     same manner and to the same extent as workers covered under a 
     certification under subchapter A of title II of the Trade Act 
     of 1974 (19 U.S.C. 2271 et seq.), except that the total 
     amount of payments under this section for any fiscal year 
     shall not exceed $25,000,000.
       (2) Benefits and services.--The benefits and services 
     described in this paragraph are the following:
       (A) Employment services of the type described in section 
     235 of the Trade Act of 1974 (19 U.S.C. 2295).
       (B) Training described in section 236 of the Trade Act of 
     1974 (19 U.S.C. 2296), except that notwithstanding the 
     provisions of section 236(a)(2)(A) of that Act, the total 
     amount of payments for training under this section for any 
     fiscal year shall not exceed $12,500,000.
       (C) Tobacco worker readjustment allowances, which shall be 
     provided in the same manner as trade readjustment allowances 
     are provided under part I of subchapter B of chapter 2 of 
     title II of the Trade Act of 1974 (19 U.S.C. 2291 et seq.), 
     except that--
       (i) the provisions of sections 231(a)(5)(C) and 231(c) of 
     that Act (19 U.S.C. 2291(a)(5)(C), 2291(c)), authorizing the 
     payment of trade readjustment allowances on a finding that it 
     is not feasible or appropriate to approve a training program 
     for a worker, shall not be applicable to payment of 
     allowances under this section; and
       (ii) notwithstanding the provisions of section 233(b) of 
     that Act (19 U.S.C. 2293(b)), in order for a worker to 
     qualify for tobacco readjustment allowances under this 
     section, the worker shall be enrolled in a training program 
     approved by the Secretary of the type described in section 
     236(a) of that Act (19 U.S.C. 2296(a)) by the later of--

       (I) the last day of the 16th week of the worker's initial 
     unemployment compensation benefit period; or
       (II) the last day of the 6th week after the week in which 
     the Secretary issues a certification covering the worker.

     In cases of extenuating circumstances relating to enrollment 
     of a worker in a training program under this section, the 
     Secretary may extend the time for enrollment for a period of 
     not to exceed 30 days.
       (D) Job search allowances of the type described in section 
     237 of the Trade Act of 1974 (19 U.S.C. 2297).
       (E) Relocation allowances of the type described in section 
     238 of the Trade Act of 1974 (19 U.S.C. 2298).
       (e) Ineligibility of Individuals Receiving Payments for 
     Lost Tobacco Quota.--No benefits or services may be provided 
     under this section to any individual who has received 
     payments for lost tobacco quota under section 1021.
       (f) Funding.--Of the amounts appropriated to carry out this 
     title, the Secretary may use not to exceed $25,000,000 for 
     each of fiscal years 1999 through 2008 to provide assistance 
     under this section.
       (g) Effective Date.--This section shall take effect on the 
     date that is the later of--
       (1) October l, 1998; or
       (2) the date of enactment of this Act.
       (h) Termination Date.--No assistance, vouchers, allowances, 
     or other payments may be provided under this section after 
     the date that is the earlier of--
       (1) the date that is 10 years after the effective date of 
     this section under subsection (g); or
       (2) the date on which legislation establishing a program 
     providing dislocated workers with comprehensive assistance 
     substantially similar to the assistance provided by this 
     section becomes effective.

     SEC. 1032. FARMER OPPORTUNITY GRANTS.

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

                 ``Subpart 9--Farmer Opportunity Grants

     ``SEC. 420D. STATEMENT OF PURPOSE.

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

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

       ``(a) Program Authority and Method of Distribution.--
       ``(1) Program authority.--From amounts made available under 
     section 1011(d)(5) of the LEAF Act, the Secretary, during the 
     period beginning July 1, 1999, and ending September 30, 2024, 
     shall pay to each eligible institution such sums as may be 
     necessary to pay to each eligible student (determined in 
     accordance with section 420F) for each academic year during 
     which that student is in attendance at an institution of 
     higher education, as an undergraduate, a farmer opportunity 
     grant in the amount for which that student is eligible, as 
     determined pursuant to subsection (b). Not less than 85 
     percent of the sums shall be advanced to eligible 
     institutions prior to the start of each payment period and 
     shall be based on an amount requested by the institution as 
     needed to pay eligible students, except that this sentence 
     shall not be construed to limit the authority of the 
     Secretary to place an institution on a reimbursement system 
     of payment.
       ``(2) Construction.--Nothing in this section shall be 
     construed to prohibit the Secretary from paying directly to 
     students, in advance of the beginning of the academic term, 
     an amount for which the students are eligible, in cases where 
     the eligible institution elects not to participate in the 
     disbursement system required by paragraph (1).
       ``(3) Designation.--Grants made under this subpart shall be 
     known as `farmer opportunity grants'.
       ``(b) Amount of Grants.--
       ``(1) Amounts.--
       ``(A) In general.--The amount of the grant for a student 
     eligible under this subpart shall be--
       ``(i) $1,700 for each of the academic years 1999-2000 
     through 2003-2004;
       ``(ii) $2,000 for each of the academic years 2004-2005 
     through 2008-2009;
       ``(iii) $2,300 for each of the academic years 2009-2010 
     through 2013-2014;
       ``(iv) $2,600 for each of the academic years 2014-2015 
     through 2018-2019; and
       ``(v) $2,900 for each of the academic years 2019-2020 
     through 2023-2024.
       ``(B) Part-time rule.--In any case where a student attends 
     an institution of higher education on less than a full-time 
     basis (including a student who attends an institution of 
     higher education on less than a half-time basis) during any 
     academic year, the amount of the grant for which that student 
     is eligible shall be reduced in proportion to the degree to 
     which that student is not so attending on a full-time basis, 
     in accordance with a schedule of reductions established by 
     the Secretary for the purposes of this subparagraph, computed 
     in accordance with this subpart. The schedule of reductions 
     shall be established by regulation and published in the 
     Federal Register.
       ``(2) Maximum.--No grant under this subpart shall exceed 
     the cost of attendance (as described in section 472) at the 
     institution at which that student is in attendance. If, with 
     respect to any student, it is determined that the amount of a 
     grant exceeds the cost of attendance for that year, the 
     amount of the grant shall be reduced to an amount equal to 
     the cost of attendance at the institution.
       ``(3) Prohibition.--No grant shall be awarded under this 
     subpart to any individual who is incarcerated in any Federal, 
     State, or local penal institution.
       ``(c) Period of Eligibility for Grants.--
       ``(1) In general.--The period during which a student may 
     receive grants shall be the period required for the 
     completion of the first undergraduate baccalaureate course of 
     study being pursued by that student at the institution at 
     which the student is in attendance, except that any period 
     during which the student is enrolled in a noncredit or 
     remedial course of study as described in paragraph (2) shall 
     not be counted for the purpose of this paragraph.
       ``(2) Construction.--Nothing in this section shall be 
     construed to--
       ``(A) exclude from eligibility courses of study that are 
     noncredit or remedial in nature and that are determined by 
     the institution to be necessary to help the student be 
     prepared for the pursuit of a first undergraduate 
     baccalaureate degree or certificate or, in the case of 
     courses in English language instruction, to be necessary to 
     enable the student to utilize already existing knowledge, 
     training, or skills; and
       ``(B) exclude from eligibility programs of study abroad 
     that are approved for credit by the home institution at which 
     the student is enrolled.
       ``(3) Prohibition.--No student is entitled to receive 
     farmer opportunity grant payments concurrently from more than 
     1 institution or from the Secretary and an institution.
       ``(d) Applications for Grants.--
       ``(1) In general.--The Secretary shall from time to time 
     set dates by which students shall file applications for 
     grants under this subpart. The filing of applications under 
     this subpart shall be coordinated with the filing of 
     applications under section 401(c).
       ``(2) Information and assurances.--Each student desiring a 
     grant for any year shall file with the Secretary an 
     application for the grant containing such information and 
     assurances as the Secretary may deem necessary to enable the 
     Secretary to carry out the Secretary's functions and 
     responsibilities under this subpart.
       ``(e) Distribution of Grants to Students.--Payments under 
     this section shall be made in accordance with regulations 
     promulgated by the Secretary for such purpose, in such manner 
     as will best accomplish the purpose of this section. Any 
     disbursement allowed to be made by crediting the student's 
     account shall be limited to tuition and fees and, in the case 
     of institutionally owned housing, room and board. The student 
     may

[[Page S5952]]

     elect to have the institution provide other such goods and 
     services by crediting the student's account.
       ``(f) Insufficient Funding.--If, for any fiscal year, the 
     funds made available to carry out this subpart are 
     insufficient to satisfy fully all grants for students 
     determined to be eligible under section 420F, the amount of 
     the grant provided under subsection (b) shall be reduced on a 
     pro rata basis among all eligible students.
       ``(g) Treatment of Institutions and Students Under Other 
     Laws.--Any institution of higher education that enters into 
     an agreement with the Secretary to disburse to students 
     attending that institution the amounts those students are 
     eligible to receive under this subpart shall not be deemed, 
     by virtue of the agreement, to be a contractor maintaining a 
     system of records to accomplish a function of the Secretary. 
     Recipients of farmer opportunity grants shall not be 
     considered to be individual grantees for purposes of the 
     Drug-Free Workplace Act of 1988 (41 U.S.C. 701 et seq.).

     ``SEC. 420F. STUDENT ELIGIBILITY.

       ``(a) In General.--In order to receive any grant under this 
     subpart, a student shall--
       ``(1) be a member of a tobacco farm family in accordance 
     with subsection (b);
       ``(2) be enrolled or accepted for enrollment in a degree, 
     certificate, or other program (including a program of study 
     abroad approved for credit by the eligible institution at 
     which the student is enrolled) leading to a recognized 
     educational credential at an institution of higher education 
     that is an eligible institution in accordance with section 
     487, and not be enrolled in an elementary or secondary 
     school;
       ``(3) if the student is presently enrolled at an 
     institution of higher education, be maintaining satisfactory 
     progress in the course of study the student is pursuing in 
     accordance with subsection (c);
       ``(4) not owe a refund on grants previously received at any 
     institution of higher education under this title, or be in 
     default on any loan from a student loan fund at any 
     institution provided for in part D, or a loan made, insured, 
     or guaranteed by the Secretary under this title for 
     attendance at any institution;
       ``(5) file with the institution of higher education that 
     the student intends to attend, or is attending, a document, 
     that need not be notarized, but that shall include--
       ``(A) a statement of educational purpose stating that the 
     money attributable to the grant will be used solely for 
     expenses related to attendance or continued attendance at the 
     institution; and
       ``(B) the student's social security number; and
       ``(6) be a citizen of the United States.
       ``(b) Tobacco Farm Families.--
       ``(1) In general.--For the purpose of subsection (a)(1), a 
     student is a member of a tobacco farm family if during 
     calendar year 1998 the student was--
       ``(A) an individual who--
       ``(i) is a participating tobacco producer (as defined in 
     section 1002 of the LEAF Act) who is a principal producer of 
     tobacco on a farm; or
       ``(ii) is otherwise actively engaged in the production of 
     tobacco;
       ``(B) a spouse, son, daughter, stepson, or stepdaughter of 
     an individual described in subparagraph (A);
       ``(C) an individual who was a dependent (within the meaning 
     of section 152 of the Internal Revenue Code of 1986) of an 
     individual described in subparagraph (A).
       ``(2) Administration.--On request, the Secretary of 
     Agriculture shall provide to the Secretary such information 
     as is necessary to carry out this subsection.
       ``(c) Satisfactory Progress.--
       ``(1) In general.--For the purpose of subsection (a)(3), a 
     student is maintaining satisfactory progress if--
       ``(A) the institution at which the student is in attendance 
     reviews the progress of the student at the end of each 
     academic year, or its equivalent, as determined by the 
     institution; and
       ``(B) the student has at least a cumulative C average or 
     its equivalent, or academic standing consistent with the 
     requirements for graduation, as determined by the 
     institution, at the end of the second such academic year.
       ``(2) Special rule.--Whenever a student fails to meet the 
     eligibility requirements of subsection (a)(3) as a result of 
     the application of this subsection and subsequent to that 
     failure the student has academic standing consistent with the 
     requirements for graduation, as determined by the 
     institution, for any grading period, the student may, subject 
     to this subsection, again be eligible under subsection (a)(3) 
     for a grant under this subpart.
       ``(3) Waiver.--Any institution of higher education at which 
     the student is in attendance may waive paragraph (1) or (2) 
     for undue hardship based on--
       ``(A) the death of a relative of the student;
       ``(B) the personal injury or illness of the student; or
       ``(C) special circumstances as determined by the 
     institution.
       ``(d) Students Who Are Not Secondary School Graduates.--In 
     order for a student who does not have a certificate of 
     graduation from a school providing secondary education, or 
     the recognized equivalent of the certificate, to be eligible 
     for any assistance under this subpart, the student shall meet 
     either 1 of the following standards:
       ``(1) Examination.--The student shall take an independently 
     administered examination and shall achieve a score, specified 
     by the Secretary, demonstrating that the student can benefit 
     from the education or training being offered. The examination 
     shall be approved by the Secretary on the basis of compliance 
     with such standards for development, administration, and 
     scoring as the Secretary may prescribe in regulations.
       ``(2) Determination.--The student shall be determined as 
     having the ability to benefit from the education or training 
     in accordance with such process as the State shall prescribe. 
     Any such process described or approved by a State for the 
     purposes of this section shall be effective 6 months after 
     the date of submission to the Secretary unless the Secretary 
     disapproves the process. In determining whether to approve or 
     disapprove the process, the Secretary shall take into account 
     the effectiveness of the process in enabling students without 
     secondary school diplomas or the recognized equivalent to 
     benefit from the instruction offered by institutions 
     utilizing the process, and shall also take into account the 
     cultural diversity, economic circumstances, and educational 
     preparation of the populations served by the institutions.
       ``(e) Special Rule for Correspondence Courses.--A student 
     shall not be eligible to receive a grant under this subpart 
     for a correspondence course unless the course is part of a 
     program leading to an associate, bachelor, or graduate 
     degree.
       ``(f) Courses Offered Through Telecommunications.--
       ``(1) Relation to correspondence courses.--A student 
     enrolled in a course of instruction at an eligible 
     institution of higher education (other than an institute or 
     school that meets the definition in section 521(4)(C) of the 
     Carl D. Perkins Vocational and Applied Technology Education 
     Act (20 U.S.C. 2471(4)(C))) that is offered in whole or in 
     part through telecommunications and leads to a recognized 
     associate, bachelor, or graduate degree conferred by the 
     institution shall not be considered to be enrolled in 
     correspondence courses unless the total amount of 
     telecommunications and correspondence courses at the 
     institution equals or exceeds 50 percent of the courses.
       ``(2) Restriction or reductions of financial aid.--A 
     student's eligibility to receive a grant under this subpart 
     may be reduced if a financial aid officer determines under 
     the discretionary authority provided in section 479A that 
     telecommunications instruction results in a substantially 
     reduced cost of attendance to the student.
       ``(3) Definition.--For the purposes of this subsection, the 
     term `telecommunications' means the use of television, audio, 
     or computer transmission, including open broadcast, closed 
     circuit, cable, microwave, or satellite, audio conferencing, 
     computer conferencing, or video cassettes or discs, except 
     that the term does not include a course that is delivered 
     using video cassette or disc recordings at the institution 
     and that is not delivered in person to other students of that 
     institution.
       ``(g) Study Abroad.--Nothing in this subpart shall be 
     construed to limit or otherwise prohibit access to study 
     abroad programs approved by the home institution at which a 
     student is enrolled. An otherwise eligible student who is 
     engaged in a program of study abroad approved for academic 
     credit by the home institution at which the student is 
     enrolled shall be eligible to receive a grant under this 
     subpart, without regard to whether the study abroad program 
     is required as part of the student's degree program.
       ``(h) Verification of Social Security Number.--The 
     Secretary, in cooperation with the Commissioner of Social 
     Security, shall verify any social security number provided by 
     a student to an eligible institution under subsection 
     (a)(5)(B) and shall enforce the following conditions:
       ``(1) Pending verification.--Except as provided in 
     paragraphs (2) and (3), an institution shall not deny, 
     reduce, delay, or terminate a student's eligibility for 
     assistance under this subpart because social security number 
     verification is pending.
       ``(2) Denial or termination.--If there is a determination 
     by the Secretary that the social security number provided to 
     an eligible institution by a student is incorrect, the 
     institution shall deny or terminate the student's eligibility 
     for any grant under this subpart until such time as the 
     student provides documented evidence of a social security 
     number that is determined by the institution to be correct.
       ``(3) Construction.--Nothing in this subsection shall be 
     construed to permit the Secretary to take any compliance, 
     disallowance, penalty, or other regulatory action against--
       ``(A) any institution of higher education with respect to 
     any error in a social security number, unless the error was a 
     result of fraud on the part of the institution; or
       ``(B) any student with respect to any error in a social 
     security number, unless the error was a result of fraud on 
     the part of the student.''.
                          Subtitle D--Immunity

     SEC. 1041. GENERAL IMMUNITY FOR TOBACCO PRODUCERS AND TOBACCO 
                   WAREHOUSE OWNERS.

       Notwithstanding any other provision of this title, a 
     participating tobacco producer, tobacco-related growers 
     association, or tobacco warehouse owner or employee may not 
     be subject to liability in any Federal or State court for any 
     cause of action resulting from the failure of any tobacco 
     product manufacturer, distributor, or retailer to comply

[[Page S5953]]

     with the National Tobacco Policy and Youth Smoking Reduction 
     Act.
                       Subtitle E--Applicability

     SEC. 1051. APPLICABILITY OF TITLE XV.

       Notwithstanding any other provision of this Act, title XV 
     of this Act shall have no force or effect.

     SEC. 1052. EFFECTIVE DATE.

       This subtitle takes effect on the day after the date of 
     enactment of this Act, but shall apply as of such date of 
     enactment.
                                 ______
                                 

                  FORD (AND OTHERS) AMENDMENT NO. 2625

  (Ordered to lie on the table.)
  Mr. FORD (for himself, Mr. Hollings, and Mr. Robb) submitted an 
amendment intended to be proposed by them to amendment No. 2493 
proposed by Mr. Lugar to the bill, S. 1415, supra; as follows:

       In lieu of the matter proposed to be inserted, insert the 
     following:
           TITLE X--LONG-TERM ECONOMIC ASSISTANCE FOR FARMERS

     SEC. 1001. SHORT TITLE.

       This title may be cited as the ``Long-Term Economic 
     Assistance for Farmers Act'' or the ``LEAF Act''.

     SEC. 1002. DEFINITIONS.

       In this title:
       (1) Participating tobacco producer.--The term 
     ``participating tobacco producer'' means a quota holder, 
     quota lessee, or quota tenant.
       (2) Quota holder.--The term ``quota holder'' means an owner 
     of a farm on January 1, 1998, for which a tobacco farm 
     marketing quota or farm acreage allotment was established 
     under the Agricultural Adjustment Act of 1938 (7 U.S.C. 1281 
     et seq.).
       (3) Quota lessee.--The term ``quota lessee'' means--
       (A) a producer that owns a farm that produced tobacco 
     pursuant to a lease and transfer to that farm of all or part 
     of a tobacco farm marketing quota or farm acreage allotment 
     established under the Agricultural Adjustment Act of 1938 (7 
     U.S.C. 1281 et seq.) for any of the 1995, 1996, or 1997 crop 
     years; or
       (B) a producer that rented land from a farm operator to 
     produce tobacco under a tobacco farm marketing quota or farm 
     acreage allotment established under the Agricultural 
     Adjustment Act of 1938 (7 U.S.C. 1281 et seq.) for any of the 
     1995, 1996, or 1997 crop years.
       (4) Quota tenant.--The term ``quota tenant'' means a 
     producer that--
       (A) is the principal producer, as determined by the 
     Secretary, of tobacco on a farm where tobacco is produced 
     pursuant to a tobacco farm marketing quota or farm acreage 
     allotment established under the Agricultural Adjustment Act 
     of 1938 (7 U.S.C. 1281 et seq.) for any of the 1995, 1996, or 
     1997 crop years; and
       (B) is not a quota holder or quota lessee.
       (5) Secretary.--The term ``Secretary'' means--
       (A) in subtitles A and B, the Secretary of Agriculture; and
       (B) in section 1031, the Secretary of Labor.
       (6) Tobacco product importer.--The term ``tobacco product 
     importer'' has the meaning given the term ``importer'' in 
     section 5702 of the Internal Revenue Code of 1986.
       (7) Tobacco product manufacturer.--
       (A) In general.--The term ``tobacco product manufacturer'' 
     has the meaning given the term ``manufacturer of tobacco 
     products'' in section 5702 of the Internal Revenue Code of 
     1986.
       (B) Exclusion.--The term ``tobacco product manufacturer'' 
     does not include a person that manufactures cigars or pipe 
     tobacco.
       (8) Tobacco warehouse owner.--The term ``tobacco warehouse 
     owner'' means a warehouseman that participated in an auction 
     market (as defined in the first section of the Tobacco 
     Inspection Act (7 U.S.C. 511)) during the 1998 marketing 
     year.
       (9) Flue-cured tobacco.--The term ``flue-cured tobacco'' 
     includes type 21 and type 37 tobacco.
              Subtitle A--Tobacco Community Revitalization

     SEC. 1011. AUTHORIZATION OF APPROPRIATIONS.

       There are appropriated and transferred to the Secretary for 
     each fiscal year such amounts from the National Tobacco Trust 
     Fund established by section 401, other than from amounts in 
     the State Litigation Settlement Account, as may be necessary 
     to carry out the provisions of this title.

     SEC. 1012. EXPENDITURES.

       The Secretary is authorized, subject to appropriations, to 
     make payments under--
       (1) section 1021 for payments for lost tobacco quota for 
     each of fiscal years 1999 through 2023, but not to exceed 
     $1,650,000,000 for any fiscal year except to the extent the 
     payments are made in accordance with subsection (d)(12) or 
     (e)(9) of section 1021;
       (2) section 1022 for industry payments for all costs of the 
     Department of Agriculture associated with the production of 
     tobacco;
       (3) section 1023 for tobacco community economic development 
     grants, but not to exceed--
       (A) $375,000,000 for each of fiscal years 1999 through 
     2008, less any amount required to be paid under section 1022 
     for the fiscal year; and
       (B) $450,000,000 for each of fiscal year 2009 through 2023, 
     less any amount required to be paid under section 1022 during 
     the fiscal year;
       (4) section 1031 for assistance provided under the tobacco 
     worker transition program, but not to exceed $25,000,000 for 
     any fiscal year; and
       (5) subpart 9 of part A of title IV of the Higher Education 
     Act of 1965 for farmer opportunity grants, but not to 
     exceed--
       (A) $42,500,000 for each of the academic years 1999-2000 
     through 2003-2004;
       (B) $50,000,000 for each of the academic years 2004-2005 
     through 2008-2009;
       (C) $57,500,000 for each of the academic years 2009-2010 
     through 2013-2014;
       (D) $65,000,000 for each of the academic years 2014-2015 
     through 2018-2019; and
       (E) $72,500,000 for each of the academic years 2019-2020 
     through 2023-2024.

     SEC. 1013. BUDGETARY TREATMENT.

       This subtitle constitutes budget authority in advance of 
     appropriations Acts and represents the obligation of the 
     Federal Government to provide payments to States and eligible 
     persons in accordance with this title.
            Subtitle B--Tobacco Market Transition Assistance

     SEC. 1021. PAYMENTS FOR LOST TOBACCO QUOTA.

       (a) In General.--Beginning with the 1999 marketing year, 
     the Secretary shall make payments for lost tobacco quota to 
     eligible quota holders, quota lessees, and quota tenants as 
     reimbursement for lost tobacco quota.
       (b) Eligibility.--To be eligible to receive payments under 
     this section, a quota holder, quota lessee, or quota tenant 
     shall--
       (1) 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 make the demonstration required under paragraph (2); and
       (2) demonstrate to the satisfaction of the Secretary that, 
     with respect to the 1997 marketing year--
       (A) the producer was a quota holder and realized income (or 
     would have realized income, as determined by the Secretary, 
     but for a medical hardship or crop disaster during the 1997 
     marketing year) from the production of tobacco through--
       (i) the active production of tobacco;
       (ii) the lease and transfer of tobacco quota to another 
     farm;
       (iii) the rental of all or part of the farm of the quota 
     holder, including the right to produce tobacco, to another 
     tobacco producer; or
       (iv) the hiring of a quota tenant to produce tobacco;
       (B) the producer was a quota lessee; or
       (C) the producer was a quota tenant.
       (c) Base Quota Level.--
       (1) In general.--The Secretary shall determine, for each 
     quota holder, quota lessee, and quota tenant, the base quota 
     level for the 1995 through 1997 marketing years.
       (2) Quota holders.--The base quota level for a quota holder 
     shall be equal to the average tobacco farm marketing quota 
     established for the farm owned by the quota holder for the 
     1995 through 1997 marketing years.
       (3) Quota lessees.--The base quota level for a quota lessee 
     shall be equal to--
       (A) 50 percent of the average number of pounds of tobacco 
     quota established for the farm for the 1995 through 1997 
     marketing years--
       (i) that was leased and transferred to a farm owned by the 
     quota lessee; or
       (ii) that was rented to the quota lessee for the right to 
     produce the tobacco; less
       (B) 25 percent of the average number of pounds of tobacco 
     quota described in subparagraph (A) for which a quota tenant 
     was the principal producer of the tobacco quota.
       (4) Quota tenants.--The base quota level for a quota tenant 
     shall be equal to the sum of--
       (A) 50 percent of the average number of pounds of tobacco 
     quota established for a farm for the 1995 through 1997 
     marketing years--
       (i) that was owned by a quota holder; and
       (ii) for which the quota tenant was the principal producer 
     of the tobacco on the farm; and
       (B) 25 percent of the average number of pounds of tobacco 
     quota for the 1995 through 1997 marketing years--
       (i)(I) that was leased and transferred to a farm owned by 
     the quota lessee; or
       (II) for which the rights to produce the tobacco were 
     rented to the quota lessee; and
       (ii) for which the quota tenant was the principal producer 
     of the tobacco on the farm.
       (5) Marketing quotas other than poundage quotas.--
       (A) In general.--For each type of tobacco for which there 
     is a marketing quota or allotment (on an acreage basis), the 
     base quota level for each quota holder, quota lessee, or 
     quota tenant shall be determined in accordance with this 
     subsection (based on a poundage conversion) by multiplying--
       (i) the average tobacco farm marketing quota or allotment 
     for the 1995 through 1997 marketing years; and
       (ii) the average yield per acre for the farm for the type 
     of tobacco for the marketing years.
       (B) Yields not available.--If the average yield per acre is 
     not available for a farm, the Secretary shall calculate the 
     base quota for the quota holder, quota lessee, or quota 
     tenant (based on a poundage conversion) by determining the 
     amount equal to the product obtained by multiplying--
       (i) the average tobacco farm marketing quota or allotment 
     for the 1995 through 1997 marketing years; and

[[Page S5954]]

       (ii) the average county yield per acre for the county in 
     which the farm is located for the type of tobacco for the 
     marketing years.
       (d) Payments for Lost Tobacco Quota for Types of Tobacco 
     Other Than Flue-Cured Tobacco.--
       (1) Allocation of funds.--Of the amounts made available 
     under section 1011(d)(1) for payments for lost tobacco quota, 
     the Secretary shall make available for payments under this 
     subsection an amount that bears the same ratio to the amounts 
     made available as--
       (A) the sum of all national marketing quotas for all types 
     of tobacco other than flue-cured tobacco during the 1995 
     through 1997 marketing years; bears to
       (B) the sum of all national marketing quotas for all types 
     of tobacco during the 1995 through 1997 marketing years.
       (2) Option to relinquish quota.--
       (A) In general.--Each quota holder, for types of tobacco 
     other than flue-cured tobacco, shall be given the option to 
     relinquish the farm marketing quota or farm acreage allotment 
     of the quota holder in exchange for a payment made under 
     paragraph (3).
       (B) Notification.--A quota holder shall give notification 
     of the intention of the quota holder to exercise the option 
     at such time and in such manner as the Secretary may require, 
     but not later than January 15, 1999.
       (3) Payments for lost tobacco quota to quota holders 
     exercising options to relinquish quota.--
       (A) In general.--Subject to subparagraph (E), for each of 
     fiscal years 1999 through 2008, the Secretary shall make 
     annual payments for lost tobacco quota to each quota holder 
     that has relinquished the farm marketing quota or farm 
     acreage allotment of the quota holder under paragraph (2).
       (B) Amount.--The amount of a payment made to a quota holder 
     described in subparagraph (A) for a marketing year shall 
     equal \1/10\ of the lifetime limitation established under 
     subparagraph (E).
       (C) Timing.--The Secretary shall begin making annual 
     payments under this paragraph for the marketing year in which 
     the farm marketing quota or farm acreage allotment is 
     relinquished.
       (D) Additional payments.--The Secretary may increase annual 
     payments under this paragraph in accordance with paragraph 
     (7)(E) to the extent that funding is available.
       (E) Lifetime limitation on payments.--The total amount of 
     payments made under this paragraph to a quota holder shall 
     not exceed the product obtained by multiplying the base quota 
     level for the quota holder by $8 per pound.
       (4) Reissuance of quota.--
       (A) Reallocation to lessee or tenant.--If a quota holder 
     exercises an option to relinquish a tobacco farm marketing 
     quota or farm acreage allotment under paragraph (2), a quota 
     lessee or quota tenant that was the primary producer during 
     the 1997 marketing year of tobacco pursuant to the farm 
     marketing quota or farm acreage allotment, as determined by 
     the Secretary, shall be given the option of having an 
     allotment of the farm marketing quota or farm acreage 
     allotment reallocated to a farm owned by the quota lessee or 
     quota tenant.
       (B) Conditions for reallocation.--
       (i) Timing.--A quota lessee or quota tenant that is given 
     the option of having an allotment of a farm marketing quota 
     or farm acreage allotment reallocated to a farm owned by the 
     quota lessee or quota tenant under subparagraph (A) shall 
     have 1 year from the date on which a farm marketing quota or 
     farm acreage allotment is relinquished under paragraph (2) to 
     exercise the option.
       (ii) Limitation on acreage allotment.--In the case of a 
     farm acreage allotment, the acreage allotment determined for 
     any farm subsequent to any reallocation under subparagraph 
     (A) shall not exceed 50 percent of the acreage of cropland of 
     the farm owned by the quota lessee or quota tenant.
       (iii) Limitation on marketing quota.--In the case of a farm 
     marketing quota, the marketing quota determined for any farm 
     subsequent to any reallocation under subparagraph (A) shall 
     not exceed an amount determined by multiplying--

       (I) the average county farm yield, as determined by the 
     Secretary; and
       (II) 50 percent of the acreage of cropland of the farm 
     owned by the quota lessee or quota tenant.

       (C) Eligibility of lessee or tenant for payments.--If a 
     farm marketing quota or farm acreage allotment is reallocated 
     to a quota lessee or quota tenant under subparagraph (A)--
       (i) the quota lessee or quota tenant shall not be eligible 
     for any additional payments under paragraph (5) or (6) as a 
     result of the reallocation; and
       (ii) the base quota level for the quota lessee or quota 
     tenant shall not be increased as a result of the 
     reallocation.
       (D) Reallocation to quota holders within same county or 
     state.--
       (i) In general.--Except as provided in clause (ii), if 
     there was no quota lessee or quota tenant for the farm 
     marketing quota or farm acreage allotment for a type of 
     tobacco, or if no quota lessee or quota tenant exercises an 
     option of having an allotment of the farm marketing quota or 
     farm acreage allotment for a type of tobacco reallocated, the 
     Secretary shall reapportion the farm marketing quota or farm 
     acreage allotment among the remaining quota holders for the 
     type of tobacco within the same county.
       (ii) Cross-county leasing.--In a State in which cross-
     county leasing is authorized pursuant to section 319(l) of 
     the Agricultural Adjustment Act of 1938 (7 U.S.C. 1314e(l)), 
     the Secretary shall reapportion the farm marketing quota 
     among the remaining quota holders for the type of tobacco 
     within the same State.
       (iii) Eligibility of quota holder for payments.--If a farm 
     marketing quota is reapportioned to a quota holder under this 
     subparagraph--

       (I) the quota holder shall not be eligible for any 
     additional payments under paragraph (5) or (6) as a result of 
     the reapportionment; and
       (II) the base quota level for the quota holder shall not be 
     increased as a result of the reapportionment.

       (E) Special rule for tenant of leased tobacco.--If a quota 
     holder exercises an option to relinquish a tobacco farm 
     marketing quota or farm acreage allotment under paragraph 
     (2), the farm marketing quota or farm acreage allotment shall 
     be divided evenly between, and the option of reallocating the 
     farm marketing quota or farm acreage allotment shall be 
     offered in equal portions to, the quota lessee and to the 
     quota tenant, if--
       (i) during the 1997 marketing year, the farm marketing 
     quota or farm acreage allotment was leased and transferred to 
     a farm owned by the quota lessee; and
       (ii) the quota tenant was the primary producer, as 
     determined by the Secretary, of tobacco pursuant to the farm 
     marketing quota or farm acreage allotment.
       (5) Payments for lost tobacco quota to quota holders.--
       (A) In general.--Except as otherwise provided in this 
     subsection, during any marketing year in which the national 
     marketing quota for a type of tobacco is less than the 
     average national marketing quota for the 1995 through 1997 
     marketing years, the Secretary shall make payments for lost 
     tobacco quota to each quota holder, for types of tobacco 
     other than flue-cured tobacco, that is eligible under 
     subsection (b), and has not exercised an option to relinquish 
     a tobacco farm marketing quota or farm acreage allotment 
     under paragraph (2), in an amount that is equal to the 
     product obtained by multiplying--
       (i) the number of pounds by which the basic farm marketing 
     quota (or poundage conversion) is less than the base quota 
     level for the quota holder; and
       (ii) $4 per pound.
       (B) Poundage conversion for marketing quotas other than 
     poundage quotas.--
       (i) In general.--For each type of tobacco for which there 
     is a marketing quota or allotment (on an acreage basis), the 
     poundage conversion for each quota holder during a marketing 
     year shall be determined by multiplying--

       (I) the basic farm acreage allotment for the farm for the 
     marketing year; and
       (II) the average yield per acre for the farm for the type 
     of tobacco.

       (ii) Yield not available.--If the average yield per acre is 
     not available for a farm, the Secretary shall calculate the 
     poundage conversion for each quota holder during a marketing 
     year by multiplying--

       (I) the basic farm acreage allotment for the farm for the 
     marketing year; and
       (II) the average county yield per acre for the county in 
     which the farm is located for the type of tobacco.

       (6) Payments for lost tobacco quota to quota lessees and 
     quota tenants.--Except as otherwise provided in this 
     subsection, during any marketing year in which the national 
     marketing quota for a type of tobacco is less than the 
     average national marketing quota for the type of tobacco for 
     the 1995 through 1997 marketing years, the Secretary shall 
     make payments for lost tobacco quota to each quota lessee and 
     quota tenant, for types of tobacco other than flue-cured 
     tobacco, that is eligible under subsection (b) in an amount 
     that is equal to the product obtained by multiplying--
       (A) the percentage by which the national marketing quota 
     for the type of tobacco is less than the average national 
     marketing quota for the type of tobacco for the 1995 through 
     1997 marketing years;
       (B) the base quota level for the quota lessee or quota 
     tenant; and
       (C) $4 per pound.
       (7) Lifetime limitation on payments.--Except as otherwise 
     provided in this subsection, the total amount of payments 
     made under this subsection to a quota holder, quota lessee, 
     or quota tenant during the lifetime of the quota holder, 
     quota lessee, or quota tenant shall not exceed the product 
     obtained by multiplying--
       (A) the base quota level for the quota holder, quota 
     lessee, or quota tenant; and
       (B) $8 per pound.
       (8) Limitations on aggregate annual payments.--
       (A) In general.--Except as otherwise provided in this 
     paragraph, the total amount payable under this subsection for 
     any marketing year shall not exceed the amount made available 
     under paragraph (1).
       (B) Accelerated payments.--Paragraph (1) shall not apply if 
     accelerated payments for lost tobacco quota are made in 
     accordance with paragraph (12).
       (C) Reductions.--If the sum of the amounts determined under 
     paragraphs (3), (5), and (6) for a marketing year exceeds the 
     amount made available under paragraph (1),

[[Page S5955]]

     the Secretary shall make a pro rata reduction in the amounts 
     payable under paragraphs (5) and (6) to quota holders, quota 
     lessees, and quota tenants under this subsection to ensure 
     that the total amount of payments for lost tobacco quota does 
     not exceed the amount made available under paragraph (1).
       (D) Rollover of payments for lost tobacco quota.--Subject 
     to subparagraph (A), if the Secretary makes a reduction in 
     accordance with subparagraph (C), the amount of the reduction 
     shall be applied to the next marketing year and added to the 
     payments for lost tobacco quota for the marketing year.
       (E) Additional payments to quota holders exercising option 
     to relinquish quota.--If the amount made available under 
     paragraph (1) exceeds the sum of the amounts determined under 
     paragraphs (3), (5), and (6) for a marketing year, the 
     Secretary shall distribute the amount of the excess pro rata 
     to quota holders that have exercised an option to relinquish 
     a tobacco farm marketing quota or farm acreage allotment 
     under paragraph (2) by increasing the amount payable to each 
     such holder under paragraph (3).
       (9) Subsequent sale and transfer of quota.--Effective 
     beginning with the 1999 marketing year, on the sale and 
     transfer of a farm marketing quota or farm acreage allotment 
     under section 316(g) or 319(g) of the Agricultural Adjustment 
     Act of 1938 (7 U.S.C. 1314b(g), 1314e(g))--
       (A) the person that sold and transferred the quota or 
     allotment shall have--
       (i) the base quota level attributable to the person reduced 
     by the base quota level attributable to the quota that is 
     sold and transferred; and
       (ii) the lifetime limitation on payments established under 
     paragraph (7) attributable to the person reduced by the 
     product obtained by multiplying--

       (I) the base quota level attributable to the quota; and
       (II) $8 per pound; and

       (B) if the quota or allotment has never been relinquished 
     by a previous quota holder under paragraph (2), the person 
     that acquired the quota shall have--
       (i) the base quota level attributable to the person 
     increased by the base quota level attributable to the quota 
     that is sold and transferred; and
       (ii) the lifetime limitation on payments established under 
     paragraph (7) attributable to the person--

       (I) increased by the product obtained by multiplying--

       (aa) the base quota level attributable to the quota; and
       (bb) $8 per pound; but

       (II) decreased by any payments under paragraph (5) for lost 
     tobacco quota previously made that are attributable to the 
     quota that is sold and transferred.

       (10) Sale or transfer of farm.--On the sale or transfer of 
     ownership of a farm that is owned by a quota holder, the base 
     quota level established under subsection (c), the right to 
     payments under paragraph (5), and the lifetime limitation on 
     payments established under paragraph (7) shall transfer to 
     the new owner of the farm to the same extent and in the same 
     manner as those provisions applied to the previous quota 
     holder.
       (11) Death of quota lessee or quota tenant.--If a quota 
     lessee or quota tenant that is entitled to payments under 
     this subsection dies and is survived by a spouse or 1 or more 
     dependents, the right to receive the payments shall transfer 
     to the surviving spouse or, if there is no surviving spouse, 
     to the surviving dependents in equal shares.
       (12) Acceleration of payments.--
       (A) In general.--On the occurrence of any of the events 
     described in subparagraph (B), the Secretary shall make an 
     accelerated lump sum payment for lost tobacco quota as 
     established under paragraphs (5) and (6) to each quota 
     holder, quota lessee, and quota tenant for any affected type 
     of tobacco in accordance with subparagraph (C).
       (B) Triggering events.--The Secretary shall make 
     accelerated payments under subparagraph (A) if after the date 
     of enactment of this Act--
       (i) subject to subparagraph (D), for 3 consecutive 
     marketing years, the national marketing quota or national 
     acreage allotment for a type of tobacco is less than 50 
     percent of the national marketing quota or national acreage 
     allotment for the type of tobacco for the 1998 marketing 
     year; or
       (ii) Congress repeals or makes ineffective, directly or 
     indirectly, any provision of--

       (I) section 316 of the Agricultural Adjustment Act of 1938 
     (7 U.S.C. 1314b);
       (II) section 319 of the Agricultural Adjustment Act of 1938 
     (7 U.S.C. 1314e);
       (III) section 106 of the Agricultural Act of 1949 (7 U.S.C. 
     1445);
       (IV) section 106A of the Agricultural Act of 1949 (7 U.S.C. 
     1445-1); or
       (V) section 106B of the Agricultural Act of 1949 (7 U.S.C. 
     1445-2).

       (C) Amount.--The amount of the accelerated payments made to 
     each quota holder, quota lessee, and quota tenant under this 
     subsection shall be equal to--
       (i) the amount of the lifetime limitation established for 
     the quota holder, quota lessee, or quota tenant under 
     paragraph (7); less
       (ii) any payments for lost tobacco quota received by the 
     quota holder, quota lessee, or quota tenant before the 
     occurrence of any of the events described in subparagraph 
     (B).
       (D) Referendum vote not a triggering event.--A referendum 
     vote of producers for any type of tobacco that results in the 
     national marketing quota or national acreage allotment not 
     being in effect for the type of tobacco shall not be 
     considered a triggering event under this paragraph.
       (13) Ban on subsequent sale or leasing of farm marketing 
     quota or farm acreage allotment to quota holders exercising 
     option to relinquish quota.--No quota holder that exercises 
     the option to relinquish a farm marketing quota or farm 
     acreage allotment for any type of tobacco under paragraph (2) 
     shall be eligible to acquire a farm marketing quota or farm 
     acreage allotment for the type of tobacco, or to obtain the 
     lease or transfer of a farm marketing quota or farm acreage 
     allotment for the type of tobacco, for a period of 25 crop 
     years after the date on which the quota or allotment was 
     relinquished.
       (e) Payments for Lost Tobacco Quota for Flue-Cured 
     Tobacco.--
       (1) Allocation of funds.--Of the amounts made available 
     under section 1011(d)(1) for payments for lost tobacco quota, 
     the Secretary shall make available for payments under this 
     subsection an amount that bears the same ratio to the amounts 
     made available as--
       (A) the sum of all national marketing quotas for flue-cured 
     tobacco during the 1995 through 1997 marketing years; bears 
     to
       (B) the sum of all national marketing quotas for all types 
     of tobacco during the 1995 through 1997 marketing years.
       (2) Relinquishment of quota.--
       (A) In general.--Each quota holder of flue-cured tobacco 
     shall relinquish the farm marketing quota or farm acreage 
     allotment in exchange for a payment made under paragraph (3) 
     due to the transition from farm marketing quotas as provided 
     under section 317 of the Agricultural Adjustment Act of 1938 
     for flue-cured tobacco to individual tobacco production 
     permits as provided under section 317A of the Agricultural 
     Adjustment Act of 1938 for flue-cured tobacco.
       (B) Notification.--The Secretary shall notify the quota 
     holders of the relinquishment of their quota or allotment at 
     such time and in such manner as the Secretary may require, 
     but not later than November 15, 1998.
       (3) Payments for lost flue-cured tobacco quota to quota 
     holders that relinquish quota.--
       (A) In general.--For each of fiscal years 1999 through 
     2008, the Secretary shall make annual payments for lost flue-
     cured tobacco to each quota holder that has relinquished the 
     farm marketing quota or farm acreage allotment of the quota 
     holder under paragraph (2).
       (B) Amount.--The amount of a payment made to a quota holder 
     described in subparagraph (A) for a marketing year shall 
     equal \1/10\ of the lifetime limitation established under 
     paragraph (6).
       (C) Timing.--The Secretary shall begin making annual 
     payments under this paragraph for the marketing year in which 
     the farm marketing quota or farm acreage allotment is 
     relinquished.
       (D) Additional payments.--The Secretary may increase annual 
     payments under this paragraph in accordance with paragraph 
     (7)(E) to the extent that funding is available.
       (4) Payments for lost flue-cured tobacco quota to quota 
     lessees and quota tenants that have not relinquished 
     permits.--
       (A) In general.--Except as otherwise provided in this 
     subsection, during any marketing year in which the national 
     marketing quota for flue-cured tobacco is less than the 
     average national marketing quota for the 1995 through 1997 
     marketing years, the Secretary shall make payments for lost 
     tobacco quota to each quota lessee or quota tenant that--
       (i) is eligible under subsection (b);
       (ii) has been issued an individual tobacco production 
     permit under section 317A(b) of the Agricultural Adjustment 
     Act of 1938; and
       (iii) has not exercised an option to relinquish the permit.
       (B) Amount.--The amount of a payment made to a quota lessee 
     or quota tenant described in subparagraph (A) for a marketing 
     year shall be equal to the product obtained by multiplying--
       (i) the number of pounds by which the individual marketing 
     limitation established for the permit is less than twice the 
     base quota level for the quota lessee or quota tenant; and
       (ii) $2 per pound.
       (5) Payments for lost flue-cured tobacco quota to quota 
     lessees and quota tenants that have relinquished permits.--
       (A) In general.--For each of fiscal years 1999 through 
     2008, the Secretary shall make annual payments for lost flue-
     cured tobacco quota to each quota lessee and quota tenant 
     that has relinquished an individual tobacco production permit 
     under section 317A(b)(5) of the Agricultural Adjustment Act 
     of 1938.
       (B) Amount.--The amount of a payment made to a quota lessee 
     or quota tenant described in subparagraph (A) for a marketing 
     year shall be equal to \1/10\ of the lifetime limitation 
     established under paragraph (6).
       (C) Timing.--The Secretary shall begin making annual 
     payments under this paragraph for the marketing year in which 
     the individual tobacco production permit is relinquished.
       (D) Additional payments.--The Secretary may increase annual 
     payments under this paragraph in accordance with paragraph 
     (7)(E) to the extent that funding is available.
       (E) Prohibition against permit expansion.--A quota lessee 
     or quota tenant that

[[Page S5956]]

     receives a payment under this paragraph shall be ineligible 
     to receive any new or increased tobacco production permit 
     from the county production pool established under section 
     317A(b)(8) of the Agricultural Adjustment Act of 1938.
       (6) Lifetime limitation on payments.--Except as otherwise 
     provided in this subsection, the total amount of payments 
     made under this subsection to a quota holder, quota lessee, 
     or quota tenant during the lifetime of the quota holder, 
     quota lessee, or quota tenant shall not exceed the product 
     obtained by multiplying--
       (A) the base quota level for the quota holder, quota 
     lessee, or quota tenant; and
       (B) $8 per pound.
       (7) Limitations on aggregate annual payments.--
       (A) In general.--Except as otherwise provided in this 
     paragraph, the total amount payable under this subsection for 
     any marketing year shall not exceed the amount made available 
     under paragraph (1).
       (B) Accelerated payments.--Paragraph (1) shall not apply if 
     accelerated payments for lost flue-cured tobacco quota are 
     made in accordance with paragraph (9).
       (C) Reductions.--If the sum of the amounts determined under 
     paragraphs (3), (4), and (5) for a marketing year exceeds the 
     amount made available under paragraph (1), the Secretary 
     shall make a pro rata reduction in the amounts payable under 
     paragraph (4) to quota lessees and quota tenants under this 
     subsection to ensure that the total amount of payments for 
     lost flue-cured tobacco quota does not exceed the amount made 
     available under paragraph (1).
       (D) Rollover of payments for lost flue-cured tobacco 
     quota.--Subject to subparagraph (A), if the Secretary makes a 
     reduction in accordance with subparagraph (C), the amount of 
     the reduction shall be applied to the next marketing year and 
     added to the payments for lost flue-cured tobacco quota for 
     the marketing year.
       (E) Additional payments to quota holders exercising option 
     to relinquish quotas or permits, or to quota lessees or quota 
     tenants relinquishing permits.--If the amount made available 
     under paragraph (1) exceeds the sum of the amounts determined 
     under paragraphs (3), (4), and (5) for a marketing year, the 
     Secretary shall distribute the amount of the excess pro rata 
     to quota holders by increasing the amount payable to each 
     such holder under paragraphs (3) and (5).
       (8) Death of quota holder, quota lessee, or quota tenant.--
     If a quota holder, quota lessee or quota tenant that is 
     entitled to payments under paragraph (4) or (5) dies and is 
     survived by a spouse or 1 or more descendants, the right to 
     receive the payments shall transfer to the surviving spouse 
     or, if there is no surviving spouse, to the surviving 
     descendants in equal shares.
       (9) Acceleration of payments.--
       (A) In general.--On the occurrence of any of the events 
     described in subparagraph (B), the Secretary shall make an 
     accelerated lump sum payment for lost flue-cured tobacco 
     quota as established under paragraphs (3), (4), and (5) to 
     each quota holder, quota lessee, and quota tenant for flue-
     cured tobacco in accordance with subparagraph (C).
       (B) Triggering events.--The Secretary shall make 
     accelerated payments under subparagraph (A) if after the date 
     of enactment of this Act--
       (i) subject to subparagraph (D), for 3 consecutive 
     marketing years, the national marketing quota or national 
     acreage allotment for flue-cured tobacco is less than 50 
     percent of the national marketing quota or national acreage 
     allotment for flue-cured tobacco for the 1998 marketing year; 
     or
       (ii) Congress repeals or makes ineffective, directly or 
     indirectly, any provision of--

       (I) section 316 of the Agricultural Adjustment Act of 1938 
     (7 U.S.C. 1314b);
       (II) section 319 of the Agricultural Adjustment Act of 1938 
     (7 U.S.C. 1314e);
       (III) section 106 of the Agricultural Act of 1949 (7 U.S.C. 
     1445);
       (IV) section 106A of the Agricultural Act of 1949 (7 U.S.C. 
     1445-1);
       (V) section 106B of the Agricultural Act of 1949 (7 U.S.C. 
     1445-2); or
       (VI) section 317A of the Agricultural Adjustment Act of 
     1938.

       (C) Amount.--The amount of the accelerated payments made to 
     each quota holder, quota lessee, and quota tenant under this 
     subsection shall be equal to--
       (i) the amount of the lifetime limitation established for 
     the quota holder, quota lessee, or quota tenant under 
     paragraph (6); less
       (ii) any payments for lost flue-cured tobacco quota 
     received by the quota holder, quota lessee, or quota tenant 
     before the occurrence of any of the events described in 
     subparagraph (B).
       (D) Referendum vote not a triggering event.--A referendum 
     vote of producers for flue-cured tobacco that results in the 
     national marketing quota or national acreage allotment not 
     being in effect for flue-cured tobacco shall not be 
     considered a triggering event under this paragraph.

     SEC. 1022. INDUSTRY PAYMENTS FOR ALL DEPARTMENT COSTS 
                   ASSOCIATED WITH TOBACCO PRODUCTION.

       (a) In General.--The Secretary shall use such amounts 
     remaining unspent and obligated at the end of each fiscal 
     year to reimburse the Secretary for--
       (1) costs associated with the administration of programs 
     established under this title and amendments made by this 
     title;
       (2) costs associated with the administration of the tobacco 
     quota and price support programs administered by the 
     Secretary;
       (3) costs to the Federal Government of carrying out crop 
     insurance programs for tobacco;
       (4) costs associated with all agricultural research, 
     extension, or education activities associated with tobacco;
       (5) costs associated with the administration of loan 
     association and cooperative programs for tobacco producers, 
     as approved by the Secretary; and
       (6) any other costs incurred by the Department of 
     Agriculture associated with the production of tobacco.
       (b) Limitations.--Amounts made available under subsection 
     (a) may not be used--
       (1) to provide direct benefits to quota holders, quota 
     lessees, or quota tenants; or
       (2) in a manner that results in a decrease, or an increase 
     relative to other crops, in the amount of the crop insurance 
     premiums assessed to participating tobacco producers under 
     the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.).
       (c) Determinations.--Not later than September 30, 1998, and 
     each fiscal year thereafter, the Secretary shall determine--
       (1) the amount of costs described in subsection (a); and
       (2) the amount that will be provided under this section as 
     reimbursement for the costs.

     SEC. 1023. TOBACCO COMMUNITY ECONOMIC DEVELOPMENT GRANTS.

       (a) Authority.--The Secretary shall make grants to tobacco-
     growing States in accordance with this section to enable the 
     States to carry out economic development initiatives in 
     tobacco-growing communities.
       (b) Application.--To be eligible to receive payments under 
     this section, a State shall prepare and submit to the 
     Secretary an application at such time, in such manner, and 
     containing such information as the Secretary may require, 
     including--
       (1) a description of the activities that the State will 
     carry out using amounts received under the grant;
       (2) a designation of an appropriate State agency to 
     administer amounts received under the grant; and
       (3) a description of the steps to be taken to ensure that 
     the funds are distributed in accordance with subsection (e).
       (c) Amount of Grant.--
       (1) In general.--From the amounts available to carry out 
     this section for a fiscal year, the Secretary shall allot to 
     each State an amount that bears the same ratio to the amounts 
     available as the total farm income of the State derived from 
     the production of tobacco during the 1995 through 1997 
     marketing years (as determined under paragraph (2)) bears to 
     the total farm income of all States derived from the 
     production of tobacco during the 1995 through 1997 marketing 
     years.
       (2) Tobacco income.--For the 1995 through 1997 marketing 
     years, the Secretary shall determine the amount of farm 
     income derived from the production of tobacco in each State 
     and in all States.
       (d) Payments.--
       (1) In general.--A State that has an application approved 
     by the Secretary under subsection (b) shall be entitled to a 
     payment under this section in an amount that is equal to its 
     allotment under subsection (c).
       (2) Form of payments.--The Secretary may make payments 
     under this section to a State in installments, and in advance 
     or by way of reimbursement, with necessary adjustments on 
     account of overpayments or underpayments, as the Secretary 
     may determine.
       (3) Reallotments.--Any portion of the allotment of a State 
     under subsection (c) that the Secretary determines will not 
     be used to carry out this section in accordance with an 
     approved State application required under subsection (b), 
     shall be reallotted by the Secretary to other States in 
     proportion to the original allotments to the other States.
       (e) Use and Distribution of Funds.--
       (1) In general.--Amounts received by a State under this 
     section shall be used to carry out economic development 
     activities, including--
       (A) rural business enterprise activities described in 
     subsections (c) and (e) of section 310B of the Consolidated 
     Farm and Rural Development Act (7 U.S.C. 1932);
       (B) down payment loan assistance programs that are similar 
     to the program described in section 310E of the Consolidated 
     Farm and Rural Development Act (7 U.S.C. 1935);
       (C) activities designed to help create productive farm or 
     off-farm employment in rural areas to provide a more viable 
     economic base and enhance opportunities for improved incomes, 
     living standards, and contributions by rural individuals to 
     the economic and social development of tobacco communities;
       (D) activities that expand existing infrastructure, 
     facilities, and services to capitalize on opportunities to 
     diversify economies in tobacco communities and that support 
     the development of new industries or commercial ventures;
       (E) activities by agricultural organizations that provide 
     assistance directly to participating tobacco producers to 
     assist in developing other agricultural activities that 
     supplement tobacco-producing activities;
       (F) initiatives designed to create or expand locally owned 
     value-added processing and marketing operations in tobacco 
     communities;
       (G) technical assistance activities by persons to support 
     farmer-owned enterprises, or

[[Page S5957]]

     agriculture-based rural development enterprises, of the type 
     described in section 252 or 253 of the Trade Act of 1974 (19 
     U.S.C. 2342, 2343); and
       (H) initiatives designed to partially compensate tobacco 
     warehouse owners for lost revenues and assist the tobacco 
     warehouse owners in establishing successful business 
     enterprises.
       (2) Tobacco-growing counties.--Assistance may be provided 
     by a State under this section only to assist a county in the 
     State that has been determined by the Secretary to have in 
     excess of $100,000 in income derived from the production of 
     tobacco during 1 or more of the 1995 through 1997 marketing 
     years. For purposes of this section, the term ``tobacco-
     growing county'' includes a political subdivision surrounded 
     within a State by a county that has been determined by the 
     Secretary to have in excess of $100,000 in income derived 
     from the production of tobacco during 1 or more of the 1995 
     through 1997 marketing years.
       (3) Distribution.--
       (A) Economic development activities.--Not less than 20 
     percent of the amounts received by a State under this section 
     shall be used to carry out--
       (i) economic development activities described in 
     subparagraph (E) or (F) of paragraph (1); or
       (ii) agriculture-based rural development activities 
     described in paragraph (1)(G).
       (B) Technical assistance activities.--Not less than 4 
     percent of the amounts received by a State under this section 
     shall be used to carry out technical assistance activities 
     described in paragraph (1)(G).
       (C) Tobacco warehouse owner initiatives.--Not less than 6 
     percent of the amounts received by a State under this section 
     during each of fiscal years 1999 through 2008 shall be used 
     to carry out initiatives described in paragraph (1)(H).
       (D) Tobacco-growing counties.--To be eligible to receive 
     payments under this section, a State shall demonstrate to the 
     Secretary that funding will be provided, during each 5-year 
     period for which funding is provided under this section, for 
     activities in each county in the State that has been 
     determined under paragraph (2) to have in excess of $100,000 
     in income derived from the production of tobacco, in amounts 
     that are at least equal to the product obtained by 
     multiplying--
       (i) the ratio that the tobacco production income in the 
     county determined under paragraph (2) bears to the total 
     tobacco production income for the State determined under 
     subsection (c); and
       (ii) 50 percent of the total amounts received by a State 
     under this section during the 5-year period.
       (f) Preferences in Hiring.--A State may require recipients 
     of funds under this section to provide a preference in 
     employment to--
       (1) an individual who--
       (A) during the 1998 calendar year, was employed in the 
     manufacture, processing, or warehousing of tobacco or tobacco 
     products, or resided, in a county described in subsection 
     (e)(2); and
       (B) is eligible for assistance under the tobacco worker 
     transition program established under section 1031; or
       (2) an individual who--
       (A) during the 1998 marketing year, carried out tobacco 
     quota or relevant tobacco production activities in a county 
     described in subsection (e)(2);
       (B) is eligible for a farmer opportunity grant under 
     subpart 9 of part A of title IV of the Higher Education Act 
     of 1965; and
       (C) has successfully completed a course of study at an 
     institution of higher education.
       (g) Maintenance of Effort.--
       (1) In general.--Subject to paragraph (2), a State shall 
     provide an assurance to the Secretary that the amount of 
     funds expended by the State and all counties in the State 
     described in subsection (e)(2) for any activities funded 
     under this section for a fiscal year is not less than 90 
     percent of the amount of funds expended by the State and 
     counties for the activities for the preceding fiscal year.
       (2) Reduction of grant amount.--If a State does not provide 
     an assurance described in paragraph (1), the Secretary shall 
     reduce the amount of the grant determined under subsection 
     (c) by an amount equal to the amount by which the amount of 
     funds expended by the State and counties for the activities 
     is less than 90 percent of the amount of funds expended by 
     the State and counties for the activities for the preceding 
     fiscal year, as determined by the Secretary.
       (3) Federal funds.--For purposes of this subsection, the 
     amount of funds expended by a State or county shall not 
     include any amounts made available by the Federal Government.

     SEC. 1024. FLUE-CURED TOBACCO PRODUCTION PERMITS.

       The Agricultural Adjustment Act of 1938 is amended by 
     inserting after section 317 (7 U.S.C. 1314c) the following:

     ``SEC. 317A. FLUE-CURED TOBACCO PRODUCTION PERMITS.

       ``(a) Definitions.--In this section:
       ``(1) Individual acreage limitation.--The term `individual 
     acreage limitation' means the number of acres of flue-cured 
     tobacco that may be planted by the holder of a permit during 
     a marketing year, calculated--
       ``(A) prior to--
       ``(i) any increase or decrease in the number due to 
     undermarketings or overmarketings; and
       ``(ii) any reduction under subsection (i); and
       ``(B) in a manner that ensures that--
       ``(i) the total of all individual acreage limitations is 
     equal to the national acreage allotment, less the reserve 
     provided under subsection (h); and
       ``(ii) the individual acreage limitation for a marketing 
     year bears the same ratio to the individual acreage 
     limitation for the previous marketing year as the ratio that 
     the national acreage allotment for the marketing year bears 
     to the national acreage allotment for the previous marketing 
     year, subject to adjustments by the Secretary to account for 
     any reserve provided under subsection (h).
       ``(2) Individual marketing limitation.--The term 
     `individual marketing limitation' means the number of pounds 
     of flue-cured tobacco that may be marketed by the holder of a 
     permit during a marketing year, calculated--
       ``(A) prior to--
       ``(i) any increase or decrease in the number due to 
     undermarketings or overmarketings; and
       ``(ii) any reduction under subsection (i); and
       ``(B) in a manner that ensures that--
       ``(i) the total of all individual marketing limitations is 
     equal to the national marketing quota, less the reserve 
     provided under subsection (h); and
       ``(ii) the individual marketing limitation for a marketing 
     year is obtained by multiplying the individual acreage 
     limitation by the permit yield, prior to any adjustment for 
     undermarketings or overmarketings.
       ``(3) Individual tobacco production permit.--The term 
     `individual tobacco production permit' means a permit issued 
     by the Secretary to a person authorizing the production of 
     flue-cured tobacco for any marketing year during which this 
     section is effective.
       ``(4) National acreage allotment.--The term `national 
     acreage allotment' means the quantity determined by 
     dividing--
       ``(A) the national marketing quota; by
       ``(B) the national average yield goal.
       ``(5) National average yield goal.--The term `national 
     average yield goal' means the national average yield for 
     flue-cured tobacco during the 5 marketing years immediately 
     preceding the marketing year for which the determination is 
     being made.
       ``(6) National marketing quota.--For the 1999 and each 
     subsequent crop of flue-cured tobacco, the term `national 
     marketing quota' for a marketing year means the quantity of 
     flue-cured tobacco, as determined by the Secretary, that is 
     not more than 103 percent nor less than 97 percent of the 
     total of--
       ``(A) the aggregate of the quantities of flue-cured tobacco 
     that domestic manufacturers of cigarettes estimate that the 
     manufacturers intend to purchase on the United States auction 
     markets or from producers during the marketing year, as 
     compiled and determined under section 320A;
       ``(B) the average annual quantity of flue-cured tobacco 
     exported from the United States during the 3 marketing years 
     immediately preceding the marketing year for which the 
     determination is being made; and
       ``(C) the quantity, if any, of flue-cured tobacco that the 
     Secretary, in the discretion of the Secretary, determines is 
     necessary to increase or decrease the inventory of the 
     producer-owned cooperative marketing association that has 
     entered into a loan agreement with the Commodity Credit 
     Corporation to make price support available to producers of 
     flue-cured tobacco to establish or maintain the inventory at 
     the reserve stock level for flue-cured tobacco.
       ``(7) Permit yield.--The term `permit yield' means the 
     yield of tobacco per acre for an individual tobacco 
     production permit holder that is--
       ``(A) based on a preliminary permit yield that is equal to 
     the average yield during the 5 marketing years immediately 
     preceding the marketing year for which the determination is 
     made in the county where the holder of the permit is 
     authorized to plant flue-cured tobacco, as determined by the 
     Secretary, on the basis of actual yields of farms in the 
     county; and
       ``(B) adjusted by a weighted national yield factor 
     calculated by--
       ``(i) multiplying each preliminary permit yield by the 
     individual acreage limitation, prior to adjustments for 
     overmarketings, undermarketings, or reductions required under 
     subsection (i); and
       ``(ii) dividing the sum of the products under clause (i) 
     for all flue-cured individual tobacco production permit 
     holders by the national acreage allotment.
       ``(b) Initial Issuance of Permits.--
       ``(1) Termination of flue-cured marketing quotas.--On the 
     date of enactment of the National Tobacco Policy and Youth 
     Smoking Reduction Act, farm marketing quotas as provided 
     under section 317 shall no longer be in effect for flue-cured 
     tobacco.
       ``(2) Issuance of permits to quota holders that were 
     principal producers.--
       ``(A) In general.--By January 15, 1999, each individual 
     quota holder under section 317 that was a principal producer 
     of flue-cured tobacco during the 1998 marketing year, as 
     determined by the Secretary, shall be issued an individual 
     tobacco production permit under this section.
       ``(B) Notification.--The Secretary shall notify the holder 
     of each permit of the individual acreage limitation and the 
     individual marketing limitation applicable to the holder for 
     each marketing year.

[[Page S5958]]

       ``(C) Individual acreage limitation for 1999 marketing 
     year.--In establishing the individual acreage limitation for 
     the 1999 marketing year under this section, the farm acreage 
     allotment that was allotted to a farm owned by the quota 
     holder for the 1997 marketing year shall be considered the 
     individual acreage limitation for the previous marketing 
     year.
       ``(D) Individual marketing limitation for 1999 marketing 
     year.--In establishing the individual marketing limitation 
     for the 1999 marketing year under this section, the farm 
     marketing quota that was allotted to a farm owned by the 
     quota holder for the 1997 marketing year shall be considered 
     the individual marketing limitation for the previous 
     marketing year.
       ``(3) Quota holders that were not principal producers.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     on approval through a referendum under subsection (c)--
       ``(i) each person that was a quota holder under section 317 
     but that was not a principal producer of flue-cured tobacco 
     during the 1997 marketing year, as determined by the 
     Secretary, shall not be eligible to own a permit; and
       ``(ii) the Secretary shall not issue any permit during the 
     25-year period beginning on the date of enactment of this Act 
     to any person that was a quota holder and was not the 
     principal producer of flue-cured tobacco during the 1997 
     marketing year.
       ``(B) Medical hardships and crop disasters.--Subparagraph 
     (A) shall not apply to a person that would have been the 
     principal producer of flue-cured tobacco during the 1997 
     marketing year but for a medical hardship or crop disaster 
     that occurred during the 1997 marketing year.
       ``(C) Administration.--The Secretary shall issue 
     regulations--
       ``(i) defining the term `person' for the purpose of this 
     paragraph; and
       ``(ii) prescribing such rules as the Secretary determines 
     are necessary to ensure a fair and reasonable application of 
     the prohibition established under this paragraph.
       ``(4) Issuance of permits to principal producers of flue-
     cured tobacco.--
       ``(A) In general.--By January 15, 1999, each individual 
     quota lessee or quota tenant (as defined in section 1002 of 
     the LEAF Act) that was the principal producer of flue-cured 
     tobacco during the 1997 marketing year, as determined by the 
     Secretary, shall be issued an individual tobacco production 
     permit under this section.
       ``(B) Individual acreage limitations.--In establishing the 
     individual acreage limitation for the 1999 marketing year 
     under this section, the farm acreage allotment that was 
     allotted to a farm owned by a quota holder for whom the quota 
     lessee or quota tenant was the principal producer of flue-
     cured tobacco during the 1997 marketing year shall be 
     considered the individual acreage limitation for the previous 
     marketing year.
       ``(C) Individual marketing limitations.--In establishing 
     the individual marketing limitation for the 1999 marketing 
     year under this section, the individual marketing limitation 
     for the previous year for an individual described in this 
     paragraph shall be calculated by multiplying--
       ``(i) the farm marketing quota that was allotted to a farm 
     owned by a quota holder for whom the quota lessee or quota 
     holder was the principal producer of flue-cured tobacco 
     during the 1997 marketing year, by
       ``(ii) the ratio that--

       ``(I) the sum of all flue-cured tobacco farm marketing 
     quotas for the 1997 marketing year prior to adjusting for 
     undermarketing and overmarketing; bears to
       ``(II) the sum of all flue-cured tobacco farm marketing 
     quotas for the 1998 marketing year, after adjusting for 
     undermarketing and overmarketing.

       ``(D) Special rule for tenant of leased flue-cured 
     tobacco.--If the farm marketing quota or farm acreage 
     allotment of a quota holder was produced pursuant to an 
     agreement under which a quota lessee rented land from a quota 
     holder and a quota tenant was the primary producer, as 
     determined by the Secretary, of flue-cured tobacco pursuant 
     to the farm marketing quota or farm acreage allotment, the 
     farm marketing quota or farm acreage allotment shall be 
     divided proportionately between the quota lessee and quota 
     tenant for purposes of issuing individual tobacco production 
     permits under this paragraph.
       ``(5) Option of quota lessee or quota tenant to relinquish 
     permit.--
       ``(A) In general.--Each quota lessee or quota tenant that 
     is issued an individual tobacco production permit under 
     paragraph (4) shall be given the option of relinquishing the 
     permit in exchange for payments made under section 1021(e)(5) 
     of the LEAF Act.
       ``(B) Notification.--A quota lessee or quota tenant that is 
     issued an individual tobacco production permit shall give 
     notification of the intention to exercise the option at such 
     time and in such manner as the Secretary may require, but not 
     later than 45 days after the permit is issued.
       ``(C) Reallocation of permit.--The Secretary shall add the 
     authority to produce flue-cured tobacco under the individual 
     tobacco production permit relinquished under this paragraph 
     to the county production pool established under paragraph (8) 
     for reallocation by the appropriate county committee.
       ``(6) Active producer requirement.--
       ``(A) Requirement for sharing risk.--No individual tobacco 
     production permit shall be issued to, or maintained by, a 
     person that does not fully share in the risk of producing a 
     crop of flue-cured tobacco.
       ``(B) Criteria for sharing risk.--For purposes of this 
     paragraph, a person shall be considered to have fully shared 
     in the risk of production of a crop if--
       ``(i) the investment of the person in the production of the 
     crop is not less than 100 percent of the costs of production 
     associated with the crop;
       ``(ii) the amount of the person's return on the investment 
     is dependent solely on the sale price of the crop; and
       ``(iii) the person may not receive any of the return before 
     the sale of the crop.
       ``(C) Persons not sharing risk.--
       ``(i) Forfeiture.--Any person that fails to fully share in 
     the risks of production under this paragraph shall forfeit an 
     individual tobacco production permit if, after notice and 
     opportunity for a hearing, the appropriate county committee 
     determines that the conditions for forfeiture exist.
       ``(ii) Reallocation.--The Secretary shall add the authority 
     to produce flue-cured tobacco under the individual tobacco 
     production permit forfeited under this subparagraph to the 
     county production pool established under paragraph (8) for 
     reallocation by the appropriate county committee.
       ``(D) Notice.--Notice of any determination made by a county 
     committee under subparagraph (C) shall be mailed, as soon as 
     practicable, to the person involved.
       ``(E) Review.--If the person is dissatisfied with the 
     determination, the person may request, not later than 15 days 
     after notice of the determination is received, a review of 
     the determination by a local review committee under the 
     procedures established under section 363 for farm marketing 
     quotas.
       ``(7) County of origin requirement.--For the 1999 and each 
     subsequent crop of flue-cured tobacco, all tobacco produced 
     pursuant to an individual tobacco production permit shall be 
     produced in the same county in which was produced the tobacco 
     produced during the 1997 marketing year pursuant to the farm 
     marketing quota or farm acreage allotment on which the 
     individual tobacco production permit is based.
       ``(8) County production pool.--
       ``(A) In general.--The authority to produce flue-cured 
     tobacco under an individual tobacco production permit that is 
     forfeited, relinquished, or surrendered within a county may 
     be reallocated by the appropriate county committee to tobacco 
     producers located in the same county that apply to the 
     committee to produce flue-cured tobacco under the authority.
       ``(B) Priority.--In reallocating individual tobacco 
     production permits under this paragraph, a county committee 
     shall provide a priority to--
       ``(i) an active tobacco producer that controls the 
     authority to produce a quantity of flue-cured tobacco under 
     an individual tobacco production permit that is equal to or 
     less than the average number of pounds of flue-cured tobacco 
     that was produced by the producer during each of the 1995 
     through 1997 marketing years, as determined by the Secretary; 
     and
       ``(ii) a new tobacco producer.
       ``(C) Criteria.--Individual tobacco production permits 
     shall be reallocated by the appropriate county committee 
     under this paragraph in a fair and equitable manner after 
     taking into consideration--
       ``(i) the experience of the producer;
       ``(ii) the availability of land, labor, and equipment for 
     the production of tobacco;
       ``(iii) crop rotation practices; and
       ``(iv) the soil and other physical factors affecting the 
     production of tobacco.
       ``(D) Medical hardships and crop disasters.--
     Notwithstanding any other provision of this Act, the 
     Secretary may issue an individual tobacco production permit 
     under this paragraph to a producer that is otherwise 
     ineligible for the permit due to a medical hardship or crop 
     disaster that occurred during the 1997 marketing year.
       ``(c) Referendum.--
       ``(1) Announcement of quota and allotment.--Not later than 
     December 15, 1998, the Secretary pursuant to subsection (b) 
     shall determine and announce--
       ``(A) the quantity of the national marketing quota for 
     flue-cured tobacco for the 1999 marketing year; and
       ``(B) the national acreage allotment and national average 
     yield goal for the 1999 crop of flue-cured tobacco.
       ``(2) Special referendum.--Not later than 30 days after the 
     announcement of the quantity of the national marketing quota 
     in 2001, the Secretary shall conduct a special referendum of 
     the tobacco production permit holders that were the principal 
     producers of flue-cured tobacco of the 1997 crop to determine 
     whether the producers approve or oppose the continuation of 
     individual tobacco production permits on an acreage-poundage 
     basis as provided in this section for the 2002 through 2004 
     marketing years.
       ``(3) Approval of permits.--If the Secretary determines 
     that more than 66\2/3\ percent of the producers voting in the 
     special referendum approve the establishment of individual 
     tobacco production permits on an acreage-poundage basis--
       ``(A) individual tobacco production permits on an acreage-
     poundage basis as provided in this section shall be in effect 
     for the 2002 through 2004 marketing years; and
       ``(B) marketing quotas on an acreage-poundage basis shall 
     cease to be in effect for the 2002 through 2004 marketing 
     years.

[[Page S5959]]

       ``(4) Disapproval of permits.--If individual tobacco 
     production permits on an acreage-poundage basis are not 
     approved by more than 66\2/3\ percent of the producers voting 
     in the referendum, no marketing quotas on an acreage-poundage 
     basis shall continue in effect that were proclaimed under 
     section 317 prior to the referendum.
       ``(5) Applicable marketing years.--If individual tobacco 
     production permits have been made effective for flue-cured 
     tobacco on an acreage-poundage basis pursuant to this 
     subsection, the Secretary shall, not later than December 15 
     of any future marketing year, announce a national marketing 
     quota for that type of tobacco for the next 3 succeeding 
     marketing years if the marketing year is the last year of 3 
     consecutive years for which individual tobacco production 
     permits previously proclaimed will be in effect.
       ``(d) Annual Announcement of National Marketing Quota.--The 
     Secretary shall determine and announce the national marketing 
     quota, national acreage allotment, and national average yield 
     goal for the second and third marketing years of any 3-year 
     period for which individual tobacco production permits are in 
     effect on or before the December 15 immediately preceding the 
     beginning of the marketing year to which the quota, 
     allotment, and goal apply.
       ``(e) Annual Announcement of Individual Tobacco Production 
     Permits.--If a national marketing quota, national acreage 
     allotment, and national average yield goal are determined and 
     announced, the Secretary shall provide for the determination 
     of individual tobacco production permits, individual acreage 
     limitations, and individual marketing limitations under this 
     section for the crop and marketing year covered by the 
     determinations.
       ``(f) Assignment of Tobacco Production Permits.--
       ``(1) Limitation to same county.--Each individual tobacco 
     production permit holder shall assign the individual acreage 
     limitation and individual marketing limitation to 1 or more 
     farms located within the county of origin of the individual 
     tobacco production permit.
       ``(2) Filing with county committee.--The assignment of an 
     individual acreage limitation and individual marketing 
     limitation shall not be effective until evidence of the 
     assignment, in such form as required by the Secretary, is 
     filed with and determined by the county committee for the 
     county in which the farm involved is located.
       ``(3) Limitation on tillable cropland.--The total acreage 
     assigned to any farm under this subsection shall not exceed 
     the acreage of cropland on the farm.
       ``(g) Prohibition on Sale or Leasing of Individual Tobacco 
     Production Permits.--
       ``(1) In general.--Except as provided in paragraphs (2) and 
     (3), the Secretary shall not permit the sale and transfer, or 
     lease and transfer, of an individual tobacco production 
     permit issued under this section.
       ``(2) Transfer to descendants.--
       ``(A) Death.--In the case of the death of a person to whom 
     an individual tobacco production permit has been issued under 
     this section, the permit shall transfer to the surviving 
     spouse of the person or, if there is no surviving spouse, to 
     surviving direct descendants of the person.
       ``(B) Temporary inability to farm.--In the case of the 
     death of a person to whom an individual tobacco production 
     permit has been issued under this section and whose 
     descendants are temporarily unable to produce a crop of 
     tobacco, the Secretary may hold the license in the name of 
     the descendants for a period of not more than 18 months.
       ``(3) Voluntary transfers.--A person that is eligible to 
     obtain an individual tobacco production permit under this 
     section may at any time transfer all or part of the permit to 
     the person's spouse or direct descendants that are actively 
     engaged in the production of tobacco.
       ``(h) Reserve.--
       ``(1) In general.--For each marketing year for which 
     individual tobacco production permits are in effect under 
     this section, the Secretary may establish a reserve from the 
     national marketing quota in a quantity equal to not more than 
     1 percent of the national marketing quota to be available 
     for--
       ``(A) making corrections of errors in individual acreage 
     limitations and individual marketing limitations;
       ``(B) adjusting inequities; and
       ``(C) establishing individual tobacco production permits 
     for new tobacco producers (except that not less than two-
     thirds of the reserve shall be for establishing such permits 
     for new tobacco producers).
       ``(2) Eligible persons.--To be eligible for a new 
     individual tobacco production permit, a producer must not 
     have been the principal producer of tobacco during the 
     immediately preceding 5 years.
       ``(3) Apportionment for new producers.--The part of the 
     reserve held for apportionment to new individual tobacco 
     producers shall be allotted on the basis of--
       ``(A) land, labor, and equipment available for the 
     production of tobacco;
       ``(B) crop rotation practices;
       ``(C) soil and other physical factors affecting the 
     production of tobacco; and
       ``(D) the past tobacco-producing experience of the 
     producer.
       ``(4) Permit yield.--The permit yield for any producer for 
     which a new individual tobacco production permit is 
     established shall be determined on the basis of available 
     productivity data for the land involved and yields for 
     similar farms in the same county.
       ``(i) Penalties.--
       ``(1) Production on other farms.--If any quantity of 
     tobacco is marketed as having been produced under an 
     individual acreage limitation or individual marketing 
     limitation assigned to a farm but was produced on a different 
     farm, the individual acreage limitation or individual 
     marketing limitation for the following marketing year shall 
     be forfeited.
       ``(2) False report.--If a person to which an individual 
     tobacco production permit is issued files, or aids or 
     acquiesces in the filing of, a false report with respect to 
     the assignment of an individual acreage limitation or 
     individual marketing limitation for a quantity of tobacco, 
     the individual acreage limitation or individual marketing 
     limitation for the following marketing year shall be 
     forfeited.
       ``(j) Marketing Penalties.--
       ``(1) In general.--When individual tobacco production 
     permits under this section are in effect, provisions with 
     respect to penalties for the marketing of excess tobacco and 
     the other provisions contained in section 314 shall apply in 
     the same manner and to the same extent as they would apply 
     under section 317(g) if farm marketing quotas were in effect.
       ``(2) Production on other farms.--If a producer falsely 
     identifies tobacco as having been produced on or marketed 
     from a farm to which an individual acreage limitation or 
     individual marketing limitation has been assigned, future 
     individual acreage limitations and individual marketing 
     limitations shall be forfeited.''.

     SEC. 1025. MODIFICATIONS IN FEDERAL TOBACCO PROGRAMS.

       (a) Program Referenda.--Section 312(c) of the Agricultural 
     Adjustment Act of 1938 (7 U.S.C. 1312(c)) is amended--
       (1) by striking ``(c) Within thirty'' and inserting the 
     following:
       ``(c) Referenda on Quotas.--
       ``(1) In general.--Not later than 30''; and
       (2) by adding at the end the following:
       ``(2) Referenda on program changes.--
       ``(A) In general.--In the case of any type of tobacco for 
     which marketing quotas are in effect, on the receipt of a 
     petition from more than 5 percent of the producers of that 
     type of tobacco in a State, the Secretary shall conduct a 
     statewide referendum on any proposal related to the lease and 
     transfer of tobacco quota within a State requested by the 
     petition that is authorized under this part.
       ``(B) Approval of proposals.--If a majority of producers of 
     the type of tobacco in the State approve a proposal in a 
     referendum conducted under subparagraph (A), the Secretary 
     shall implement the proposal in a manner that applies to all 
     producers and quota holders of that type of tobacco in the 
     State.''.
       (b) Purchase Requirements.--Section 320B of the 
     Agricultural Adjustment Act of 1938 (7 U.S.C. 1314h) is 
     amended--
       (1) in subsection (c)--
       (A) by striking ``(c) The amount'' and inserting ``(c) 
     Amount of Penalty.--For the 1998 and subsequent marketing 
     years, the amount''; and
       (B) by striking paragraph (1) and inserting the following:
       ``(1) 105 percent of the average market price for the type 
     of tobacco involved during the preceding marketing year; 
     and''.
       (c) Elimination of Tobacco Marketing Assessment.--
       (1) In general.--Section 106 of the Agricultural Act of 
     1949 (7 U.S.C. 1445) is amended by striking subsection (g).
       (2) Conforming amendment.--Section 422(c) of the Uruguay 
     Round Agreements Act (Public Law 103-465; 7 U.S.C. 1445 note) 
     is amended by striking ``section 106(g), 106A, or 106B of the 
     Agricultural Act of 1949 (7 U.S.C. 1445(g), 1445-1, or 1445-
     2)'' and inserting ``section 106A or 106B of the Agricultural 
     Act of 1949 (7 U.S.C. 1445-1, 1445-2)''.
       (d) Adjustment for Land Rental Costs.--Section 106 of the 
     Agricultural Act of 1949 (7 U.S.C. 1445) is amended by adding 
     at the end the following:
       ``(h) Adjustment for Land Rental Costs.--For each of the 
     1999 and 2000 marketing years for flue-cured tobacco, after 
     consultation with producers, State farm organizations and 
     cooperative associations, the Secretary shall make an 
     adjustment in the price support level for flue-cured tobacco 
     equal to the annual change in the average cost per pound to 
     flue-cured producers, as determined by the Secretary, under 
     agreements through which producers rent land to produce flue-
     cured tobacco.''.
       (e) Fire-Cured and Dark Air-Cured Tobacco Programs.--
       (1) Limitation on transfers.--Section 318(g) of the 
     Agricultural Adjustment Act of 1938 (7 U.S.C. 13l4d(g)) is 
     amended--
       (A) by striking ``ten'' and inserting ``30''; and
       (B) by inserting ``during any crop year'' after 
     ``transferred to any farm''.
       (2) Loss of allotment or quota through underplanting.--
     Section 318 of the Agricultural Adjustment Act of 1938 (7 
     U.S.C. 1314d) is amended by adding at the end the following:
       ``(k) Loss of Allotment or Quota Through Underplanting.--
     Effective for the 1999 and subsequent marketing years, no 
     acreage allotment or acreage-poundage quota, other than a new 
     marketing quota, shall be established for a farm on which no 
     fire-cured or dark air-cured tobacco was planted or 
     considered planted during at least 2 of the 3 crop years 
     immediately preceding

[[Page S5960]]

     the crop year for which the acreage allotment or acreage-
     poundage quota would otherwise be established.''.
       (f) Expansion of Types of Tobacco Subject to No Net Cost 
     Assessment.--
       (1) No net cost tobacco fund.--Section 106A(d)(1)(A) of the 
     Agricultural Act of 1949 (7 U.S.C. 1445-1(d)(1)(A)) is 
     amended--
       (A) in clause (ii), by inserting after ``Burley quota 
     tobacco'' the following: ``and fire-cured and dark air-cured 
     quota tobacco''; and
       (B) in clause (iii)--
       (i) in the matter preceding subclause (I), by striking 
     ``Flue-cured or Burley tobacco'' and inserting ``each kind of 
     tobacco for which price support is made available under this 
     Act, and each kind of like tobacco,''; and
       (ii) by striking subclause (II) and inserting the 
     following:

       ``(II) the sum of the amount of the per pound producer 
     contribution and purchaser assessment (if any) for the kind 
     of tobacco payable under clauses (i) and (ii); and''.

       (2) No net cost tobacco account.--Section 106B(d)(1) of the 
     Agricultural Act of 1949 (7 U.S.C. 1445-2(d)(1)) is amended--
       (A) in subparagraph (B), by inserting after ``Burley quota 
     tobacco'' the following: ``and fire-cured and dark air-cured 
     tobacco''; and
       (B) in subparagraph (C), by striking ``Flue-cured and 
     Burley tobacco'' and inserting ``each kind of tobacco for 
     which price support is made available under this Act, and 
     each kind of like tobacco,''.
          Subtitle C--Farmer and Worker Transition Assistance

     SEC. 1031. TOBACCO WORKER TRANSITION PROGRAM.

       (a) Group Eligibility Requirements.--
       (1) Criteria.--A group of workers (including workers in any 
     firm or subdivision of a firm involved in the manufacture, 
     processing, or warehousing of tobacco or tobacco products) 
     shall be certified as eligible to apply for adjustment 
     assistance under this section pursuant to a petition filed 
     under subsection (b) if the Secretary of Labor determines 
     that a significant number or proportion of the workers in the 
     workers' firm or an appropriate subdivision of the firm have 
     become totally or partially separated, or are threatened to 
     become totally or partially separated, and--
       (A) the sales or production, or both, of the firm or 
     subdivision have decreased absolutely; and
       (B) the implementation of the national tobacco settlement 
     contributed importantly to the workers' separation or threat 
     of separation and to the decline in the sales or production 
     of the firm or subdivision.
       (2) Definition of contributed importantly.--In paragraph 
     (1)(B), the term ``contributed importantly'' means a cause 
     that is important but not necessarily more important than any 
     other cause.
       (3) Regulations.--The Secretary shall issue regulations 
     relating to the application of the criteria described in 
     paragraph (1) in making preliminary findings under subsection 
     (b) and determinations under subsection (c).
       (b) Preliminary Findings and Basic Assistance.--
       (1) Filing of petitions.--A petition for certification of 
     eligibility to apply for adjustment assistance under this 
     section may be filed by a group of workers (including workers 
     in any firm or subdivision of a firm involved in the 
     manufacture, processing, or warehousing of tobacco or tobacco 
     products) or by their certified or recognized union or other 
     duly authorized representative with the Governor of the State 
     in which the workers' firm or subdivision thereof is located.
       (2) Findings and assistance.--On receipt of a petition 
     under paragraph (1), the Governor shall--
       (A) notify the Secretary that the Governor has received the 
     petition;
       (B) within 10 days after receiving the petition--
       (i) make a preliminary finding as to whether the petition 
     meets the criteria described in subsection (a)(1); and
       (ii) transmit the petition, together with a statement of 
     the finding under clause (i) and reasons for the finding, to 
     the Secretary for action under subsection (c); and
       (C) if the preliminary finding under subparagraph (B)(i) is 
     affirmative, ensure that rapid response and basic 
     readjustment services authorized under other Federal laws are 
     made available to the workers.
       (c) Review of Petitions by Secretary; Certifications.--
       (1) In general.--The Secretary, within 30 days after 
     receiving a petition under subsection (b)(2)(B)(ii), shall 
     determine whether the petition meets the criteria described 
     in subsection (a)(1). On a determination that the petition 
     meets the criteria, the Secretary shall issue to workers 
     covered by the petition a certification of eligibility to 
     apply for the assistance described in subsection (d).
       (2) Denial of certification.--On the denial of a 
     certification with respect to a petition under paragraph (1), 
     the Secretary shall review the petition in accordance with 
     the requirements of other applicable assistance programs to 
     determine if the workers may be certified under the other 
     programs.
       (d) Comprehensive Assistance.--
       (1) In general.--Workers covered by a certification issued 
     by the Secretary under subsection (c)(1) shall be provided 
     with benefits and services described in paragraph (2) in the 
     same manner and to the same extent as workers covered under a 
     certification under subchapter A of title II of the Trade Act 
     of 1974 (19 U.S.C. 2271 et seq.), except that the total 
     amount of payments under this section for any fiscal year 
     shall not exceed $25,000,000.
       (2) Benefits and services.--The benefits and services 
     described in this paragraph are the following:
       (A) Employment services of the type described in section 
     235 of the Trade Act of 1974 (19 U.S.C. 2295).
       (B) Training described in section 236 of the Trade Act of 
     1974 (19 U.S.C. 2296), except that notwithstanding the 
     provisions of section 236(a)(2)(A) of that Act, the total 
     amount of payments for training under this section for any 
     fiscal year shall not exceed $12,500,000.
       (C) Tobacco worker readjustment allowances, which shall be 
     provided in the same manner as trade readjustment allowances 
     are provided under part I of subchapter B of chapter 2 of 
     title II of the Trade Act of 1974 (19 U.S.C. 2291 et seq.), 
     except that--
       (i) the provisions of sections 231(a)(5)(C) and 231(c) of 
     that Act (19 U.S.C. 2291(a)(5)(C), 2291(c)), authorizing the 
     payment of trade readjustment allowances on a finding that it 
     is not feasible or appropriate to approve a training program 
     for a worker, shall not be applicable to payment of 
     allowances under this section; and
       (ii) notwithstanding the provisions of section 233(b) of 
     that Act (19 U.S.C. 2293(b)), in order for a worker to 
     qualify for tobacco readjustment allowances under this 
     section, the worker shall be enrolled in a training program 
     approved by the Secretary of the type described in section 
     236(a) of that Act (19 U.S.C. 2296(a)) by the later of--

       (I) the last day of the 16th week of the worker's initial 
     unemployment compensation benefit period; or
       (II) the last day of the 6th week after the week in which 
     the Secretary issues a certification covering the worker.

     In cases of extenuating circumstances relating to enrollment 
     of a worker in a training program under this section, the 
     Secretary may extend the time for enrollment for a period of 
     not to exceed 30 days.
       (D) Job search allowances of the type described in section 
     237 of the Trade Act of 1974 (19 U.S.C. 2297).
       (E) Relocation allowances of the type described in section 
     238 of the Trade Act of 1974 (19 U.S.C. 2298).
       (e) Ineligibility of Individuals Receiving Payments for 
     Lost Tobacco Quota.--No benefits or services may be provided 
     under this section to any individual who has received 
     payments for lost tobacco quota under section 1021.
       (f) Funding.--Of the amounts appropriated to carry out this 
     title, the Secretary may use not to exceed $25,000,000 for 
     each of fiscal years 1999 through 2008 to provide assistance 
     under this section.
       (g) Effective Date.--This section shall take effect on the 
     date that is the later of--
       (1) October l, 1998; or
       (2) the date of enactment of this Act.
       (h) Termination Date.--No assistance, vouchers, allowances, 
     or other payments may be provided under this section after 
     the date that is the earlier of--
       (1) the date that is 10 years after the effective date of 
     this section under subsection (g); or
       (2) the date on which legislation establishing a program 
     providing dislocated workers with comprehensive assistance 
     substantially similar to the assistance provided by this 
     section becomes effective.

     SEC. 1032. FARMER OPPORTUNITY GRANTS.

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

                 ``Subpart 9--Farmer Opportunity Grants

     ``SEC. 420D. STATEMENT OF PURPOSE.

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

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

       ``(a) Program Authority and Method of Distribution.--
       ``(1) Program authority.--From amounts made available under 
     section 1011(d)(5) of the LEAF Act, the Secretary, during the 
     period beginning July 1, 1999, and ending September 30, 2024, 
     shall pay to each eligible institution such sums as may be 
     necessary to pay to each eligible student (determined in 
     accordance with section 420F) for each academic year during 
     which that student is in attendance at an institution of 
     higher education, as an undergraduate, a farmer opportunity 
     grant in the amount for which that student is eligible, as 
     determined pursuant to subsection (b). Not less than 85 
     percent of the sums shall be advanced to eligible 
     institutions prior to the start of each payment period and 
     shall be based on an amount requested by the institution as 
     needed to pay eligible students, except that this sentence 
     shall not be construed to limit the authority of the 
     Secretary to place an institution on a reimbursement system 
     of payment.
       ``(2) Construction.--Nothing in this section shall be 
     construed to prohibit the Secretary from paying directly to 
     students, in advance of the beginning of the academic term, 
     an amount for which the students are eligible, in cases where 
     the eligible institution elects not to participate in the 
     disbursement system required by paragraph (1).

[[Page S5961]]

       ``(3) Designation.--Grants made under this subpart shall be 
     known as `farmer opportunity grants'.
       ``(b) Amount of Grants.--
       ``(1) Amounts.--
       ``(A) In general.--The amount of the grant for a student 
     eligible under this subpart shall be--
       ``(i) $1,700 for each of the academic years 1999-2000 
     through 2003-2004;
       ``(ii) $2,000 for each of the academic years 2004-2005 
     through 2008-2009;
       ``(iii) $2,300 for each of the academic years 2009-2010 
     through 2013-2014;
       ``(iv) $2,600 for each of the academic years 2014-2015 
     through 2018-2019; and
       ``(v) $2,900 for each of the academic years 2019-2020 
     through 2023-2024.
       ``(B) Part-time rule.--In any case where a student attends 
     an institution of higher education on less than a full-time 
     basis (including a student who attends an institution of 
     higher education on less than a half-time basis) during any 
     academic year, the amount of the grant for which that student 
     is eligible shall be reduced in proportion to the degree to 
     which that student is not so attending on a full-time basis, 
     in accordance with a schedule of reductions established by 
     the Secretary for the purposes of this subparagraph, computed 
     in accordance with this subpart. The schedule of reductions 
     shall be established by regulation and published in the 
     Federal Register.
       ``(2) Maximum.--No grant under this subpart shall exceed 
     the cost of attendance (as described in section 472) at the 
     institution at which that student is in attendance. If, with 
     respect to any student, it is determined that the amount of a 
     grant exceeds the cost of attendance for that year, the 
     amount of the grant shall be reduced to an amount equal to 
     the cost of attendance at the institution.
       ``(3) Prohibition.--No grant shall be awarded under this 
     subpart to any individual who is incarcerated in any Federal, 
     State, or local penal institution.
       ``(c) Period of Eligibility for Grants.--
       ``(1) In general.--The period during which a student may 
     receive grants shall be the period required for the 
     completion of the first undergraduate baccalaureate course of 
     study being pursued by that student at the institution at 
     which the student is in attendance, except that any period 
     during which the student is enrolled in a noncredit or 
     remedial course of study as described in paragraph (2) shall 
     not be counted for the purpose of this paragraph.
       ``(2) Construction.--Nothing in this section shall be 
     construed to--
       ``(A) exclude from eligibility courses of study that are 
     noncredit or remedial in nature and that are determined by 
     the institution to be necessary to help the student be 
     prepared for the pursuit of a first undergraduate 
     baccalaureate degree or certificate or, in the case of 
     courses in English language instruction, to be necessary to 
     enable the student to utilize already existing knowledge, 
     training, or skills; and
       ``(B) exclude from eligibility programs of study abroad 
     that are approved for credit by the home institution at which 
     the student is enrolled.
       ``(3) Prohibition.--No student is entitled to receive 
     farmer opportunity grant payments concurrently from more than 
     1 institution or from the Secretary and an institution.
       ``(d) Applications for Grants.--
       ``(1) In general.--The Secretary shall from time to time 
     set dates by which students shall file applications for 
     grants under this subpart. The filing of applications under 
     this subpart shall be coordinated with the filing of 
     applications under section 401(c).
       ``(2) Information and assurances.--Each student desiring a 
     grant for any year shall file with the Secretary an 
     application for the grant containing such information and 
     assurances as the Secretary may deem necessary to enable the 
     Secretary to carry out the Secretary's functions and 
     responsibilities under this subpart.
       ``(e) Distribution of Grants to Students.--Payments under 
     this section shall be made in accordance with regulations 
     promulgated by the Secretary for such purpose, in such manner 
     as will best accomplish the purpose of this section. Any 
     disbursement allowed to be made by crediting the student's 
     account shall be limited to tuition and fees and, in the case 
     of institutionally owned housing, room and board. The student 
     may elect to have the institution provide other such goods 
     and services by crediting the student's account.
       ``(f) Insufficient Funding.--If, for any fiscal year, the 
     funds made available to carry out this subpart are 
     insufficient to satisfy fully all grants for students 
     determined to be eligible under section 420F, the amount of 
     the grant provided under subsection (b) shall be reduced on a 
     pro rata basis among all eligible students.
       ``(g) Treatment of Institutions and Students Under Other 
     Laws.--Any institution of higher education that enters into 
     an agreement with the Secretary to disburse to students 
     attending that institution the amounts those students are 
     eligible to receive under this subpart shall not be deemed, 
     by virtue of the agreement, to be a contractor maintaining a 
     system of records to accomplish a function of the Secretary. 
     Recipients of farmer opportunity grants shall not be 
     considered to be individual grantees for purposes of the 
     Drug-Free Workplace Act of 1988 (41 U.S.C. 701 et seq.).

     ``SEC. 420F. STUDENT ELIGIBILITY.

       ``(a) In General.--In order to receive any grant under this 
     subpart, a student shall--
       ``(1) be a member of a tobacco farm family in accordance 
     with subsection (b);
       ``(2) be enrolled or accepted for enrollment in a degree, 
     certificate, or other program (including a program of study 
     abroad approved for credit by the eligible institution at 
     which the student is enrolled) leading to a recognized 
     educational credential at an institution of higher education 
     that is an eligible institution in accordance with section 
     487, and not be enrolled in an elementary or secondary 
     school;
       ``(3) if the student is presently enrolled at an 
     institution of higher education, be maintaining satisfactory 
     progress in the course of study the student is pursuing in 
     accordance with subsection (c);
       ``(4) not owe a refund on grants previously received at any 
     institution of higher education under this title, or be in 
     default on any loan from a student loan fund at any 
     institution provided for in part D, or a loan made, insured, 
     or guaranteed by the Secretary under this title for 
     attendance at any institution;
       ``(5) file with the institution of higher education that 
     the student intends to attend, or is attending, a document, 
     that need not be notarized, but that shall include--
       ``(A) a statement of educational purpose stating that the 
     money attributable to the grant will be used solely for 
     expenses related to attendance or continued attendance at the 
     institution; and
       ``(B) the student's social security number; and
       ``(6) be a citizen of the United States.
       ``(b) Tobacco Farm Families.--
       ``(1) In general.--For the purpose of subsection (a)(1), a 
     student is a member of a tobacco farm family if during 
     calendar year 1998 the student was--
       ``(A) an individual who--
       ``(i) is a participating tobacco producer (as defined in 
     section 1002 of the LEAF Act) who is a principal producer of 
     tobacco on a farm; or
       ``(ii) is otherwise actively engaged in the production of 
     tobacco;
       ``(B) a spouse, son, daughter, stepson, or stepdaughter of 
     an individual described in subparagraph (A);
       ``(C) an individual who was a dependent (within the meaning 
     of section 152 of the Internal Revenue Code of 1986) of an 
     individual described in subparagraph (A).
       ``(2) Administration.--On request, the Secretary of 
     Agriculture shall provide to the Secretary such information 
     as is necessary to carry out this subsection.
       ``(c) Satisfactory Progress.--
       ``(1) In general.--For the purpose of subsection (a)(3), a 
     student is maintaining satisfactory progress if--
       ``(A) the institution at which the student is in attendance 
     reviews the progress of the student at the end of each 
     academic year, or its equivalent, as determined by the 
     institution; and
       ``(B) the student has at least a cumulative C average or 
     its equivalent, or academic standing consistent with the 
     requirements for graduation, as determined by the 
     institution, at the end of the second such academic year.
       ``(2) Special rule.--Whenever a student fails to meet the 
     eligibility requirements of subsection (a)(3) as a result of 
     the application of this subsection and subsequent to that 
     failure the student has academic standing consistent with the 
     requirements for graduation, as determined by the 
     institution, for any grading period, the student may, subject 
     to this subsection, again be eligible under subsection (a)(3) 
     for a grant under this subpart.
       ``(3) Waiver.--Any institution of higher education at which 
     the student is in attendance may waive paragraph (1) or (2) 
     for undue hardship based on--
       ``(A) the death of a relative of the student;
       ``(B) the personal injury or illness of the student; or
       ``(C) special circumstances as determined by the 
     institution.
       ``(d) Students Who Are Not Secondary School Graduates.--In 
     order for a student who does not have a certificate of 
     graduation from a school providing secondary education, or 
     the recognized equivalent of the certificate, to be eligible 
     for any assistance under this subpart, the student shall meet 
     either 1 of the following standards:
       ``(1) Examination.--The student shall take an independently 
     administered examination and shall achieve a score, specified 
     by the Secretary, demonstrating that the student can benefit 
     from the education or training being offered. The examination 
     shall be approved by the Secretary on the basis of compliance 
     with such standards for development, administration, and 
     scoring as the Secretary may prescribe in regulations.
       ``(2) Determination.--The student shall be determined as 
     having the ability to benefit from the education or training 
     in accordance with such process as the State shall prescribe. 
     Any such process described or approved by a State for the 
     purposes of this section shall be effective 6 months after 
     the date of submission to the Secretary unless the Secretary 
     disapproves the process. In determining whether to approve or 
     disapprove the process, the Secretary shall take into account 
     the effectiveness of the process in enabling students without 
     secondary school diplomas or the recognized equivalent to 
     benefit from the instruction offered by institutions 
     utilizing the process, and shall also

[[Page S5962]]

     take into account the cultural diversity, economic 
     circumstances, and educational preparation of the populations 
     served by the institutions.
       ``(e) Special Rule for Correspondence Courses.--A student 
     shall not be eligible to receive a grant under this subpart 
     for a correspondence course unless the course is part of a 
     program leading to an associate, bachelor, or graduate 
     degree.
       ``(f) Courses Offered Through Telecommunications.--
       ``(1) Relation to correspondence courses.--A student 
     enrolled in a course of instruction at an eligible 
     institution of higher education (other than an institute or 
     school that meets the definition in section 521(4)(C) of the 
     Carl D. Perkins Vocational and Applied Technology Education 
     Act (20 U.S.C. 2471(4)(C))) that is offered in whole or in 
     part through telecommunications and leads to a recognized 
     associate, bachelor, or graduate degree conferred by the 
     institution shall not be considered to be enrolled in 
     correspondence courses unless the total amount of 
     telecommunications and correspondence courses at the 
     institution equals or exceeds 50 percent of the courses.
       ``(2) Restriction or reductions of financial aid.--A 
     student's eligibility to receive a grant under this subpart 
     may be reduced if a financial aid officer determines under 
     the discretionary authority provided in section 479A that 
     telecommunications instruction results in a substantially 
     reduced cost of attendance to the student.
       ``(3) Definition.--For the purposes of this subsection, the 
     term `telecommunications' means the use of television, audio, 
     or computer transmission, including open broadcast, closed 
     circuit, cable, microwave, or satellite, audio conferencing, 
     computer conferencing, or video cassettes or discs, except 
     that the term does not include a course that is delivered 
     using video cassette or disc recordings at the institution 
     and that is not delivered in person to other students of that 
     institution.
       ``(g) Study Abroad.--Nothing in this subpart shall be 
     construed to limit or otherwise prohibit access to study 
     abroad programs approved by the home institution at which a 
     student is enrolled. An otherwise eligible student who is 
     engaged in a program of study abroad approved for academic 
     credit by the home institution at which the student is 
     enrolled shall be eligible to receive a grant under this 
     subpart, without regard to whether the study abroad program 
     is required as part of the student's degree program.
       ``(h) Verification of Social Security Number.--The 
     Secretary, in cooperation with the Commissioner of Social 
     Security, shall verify any social security number provided by 
     a student to an eligible institution under subsection 
     (a)(5)(B) and shall enforce the following conditions:
       ``(1) Pending verification.--Except as provided in 
     paragraphs (2) and (3), an institution shall not deny, 
     reduce, delay, or terminate a student's eligibility for 
     assistance under this subpart because social security number 
     verification is pending.
       ``(2) Denial or termination.--If there is a determination 
     by the Secretary that the social security number provided to 
     an eligible institution by a student is incorrect, the 
     institution shall deny or terminate the student's eligibility 
     for any grant under this subpart until such time as the 
     student provides documented evidence of a social security 
     number that is determined by the institution to be correct.
       ``(3) Construction.--Nothing in this subsection shall be 
     construed to permit the Secretary to take any compliance, 
     disallowance, penalty, or other regulatory action against--
       ``(A) any institution of higher education with respect to 
     any error in a social security number, unless the error was a 
     result of fraud on the part of the institution; or
       ``(B) any student with respect to any error in a social 
     security number, unless the error was a result of fraud on 
     the part of the student.''.
                          Subtitle D--Immunity

     SEC. 1041. GENERAL IMMUNITY FOR TOBACCO PRODUCERS AND TOBACCO 
                   WAREHOUSE OWNERS.

       Notwithstanding any other provision of this title, a 
     participating tobacco producer, tobacco-related growers 
     association, or tobacco warehouse owner or employee may not 
     be subject to liability in any Federal or State court for any 
     cause of action resulting from the failure of any tobacco 
     product manufacturer, distributor, or retailer to comply with 
     the National Tobacco Policy and Youth Smoking Reduction Act.
                       Subtitle E--Applicability

     SEC. 1051. APPLICABILITY OF TITLE XV.

       Notwithstanding any other provision of this Act, title XV 
     of this Act shall have no force or effect.

     SEC. 1052. EFFECTIVE DATE.

       This subtitle takes effect on the day after the date of 
     enactment of this Act, but shall apply as of such date of 
     enactment.
                                 ______
                                 

                  FORD (AND OTHERS) AMENDMENT NO. 2626

  (Ordered to lie on the table.)
  Mr. FORD (for himself, Mr. Holdings, and Mr. Robb) submitted an 
amendment intended to be proposed by them to amendment No. 2496, 
proposed by Mr. Lugar to the bill, S. 1415, supra; as follows:

       In lieu of the matter proposed to be stricken, insert the 
     following:
           TITLE X--LONG-TERM ECONOMIC ASSISTANCE FOR FARMERS

     SEC. 1001. SHORT TITLE.

       This title may be cited as the ``Long-Term Economic 
     Assistance for Farmers Act'' or the ``LEAF Act''.

     SEC. 1002. DEFINITIONS.

       In this title:
       (1) Participating tobacco producer.--The term 
     ``participating tobacco producer'' means a quota holder, 
     quota lessee, or quota tenant.
       (2) Quota holder.--The term ``quota holder'' means an owner 
     of a farm on January 1, 1998, for which a tobacco farm 
     marketing quota or farm acreage allotment was established 
     under the Agricultural Adjustment Act of 1938 (7 U.S.C. 1281 
     et seq.).
       (3) Quota lessee.--The term ``quota lessee'' means--
       (A) a producer that owns a farm that produced tobacco 
     pursuant to a lease and transfer to that farm of all or part 
     of a tobacco farm marketing quota or farm acreage allotment 
     established under the Agricultural Adjustment Act of 1938 (7 
     U.S.C. 1281 et seq.) for any of the 1995, 1996, or 1997 crop 
     years; or
       (B) a producer that rented land from a farm operator to 
     produce tobacco under a tobacco farm marketing quota or farm 
     acreage allotment established under the Agricultural 
     Adjustment Act of 1938 (7 U.S.C. 1281 et seq.) for any of the 
     1995, 1996, or 1997 crop years.
       (4) Quota tenant.--The term ``quota tenant'' means a 
     producer that--
       (A) is the principal producer, as determined by the 
     Secretary, of tobacco on a farm where tobacco is produced 
     pursuant to a tobacco farm marketing quota or farm acreage 
     allotment established under the Agricultural Adjustment Act 
     of 1938 (7 U.S.C. 1281 et seq.) for any of the 1995, 1996, or 
     1997 crop years; and
       (B) is not a quota holder or quota lessee.
       (5) Secretary.--The term ``Secretary'' means--
       (A) in subtitles A and B, the Secretary of Agriculture; and
       (B) in section 1031, the Secretary of Labor.
       (6) Tobacco product importer.--The term ``tobacco product 
     importer'' has the meaning given the term ``importer'' in 
     section 5702 of the Internal Revenue Code of 1986.
       (7) Tobacco product manufacturer.--
       (A) In general.--The term ``tobacco product manufacturer'' 
     has the meaning given the term ``manufacturer of tobacco 
     products'' in section 5702 of the Internal Revenue Code of 
     1986.
       (B) Exclusion.--The term ``tobacco product manufacturer'' 
     does not include a person that manufactures cigars or pipe 
     tobacco.
       (8) Tobacco warehouse owner.--The term ``tobacco warehouse 
     owner'' means a warehouseman that participated in an auction 
     market (as defined in the first section of the Tobacco 
     Inspection Act (7 U.S.C. 511)) during the 1998 marketing 
     year.
       (9) Flue-cured tobacco.--The term ``flue-cured tobacco'' 
     includes type 21 and type 37 tobacco.
              Subtitle A--Tobacco Community Revitalization

     SEC. 1011. AUTHORIZATION OF APPROPRIATIONS.

       There are appropriated and transferred to the Secretary for 
     each fiscal year such amounts from the National Tobacco Trust 
     Fund established by section 401, other than from amounts in 
     the State Litigation Settlement Account, as may be necessary 
     to carry out the provisions of this title.

     SEC. 1012. EXPENDITURES.

       The Secretary is authorized, subject to appropriations, to 
     make payments under--
       (1) section 1021 for payments for lost tobacco quota for 
     each of fiscal years 1999 through 2023, but not to exceed 
     $1,650,000,000 for any fiscal year except to the extent the 
     payments are made in accordance with subsection (d)(12) or 
     (e)(9) of section 1021;
       (2) section 1022 for industry payments for all costs of the 
     Department of Agriculture associated with the production of 
     tobacco;
       (3) section 1023 for tobacco community economic development 
     grants, but not to exceed--
       (A) $375,000,000 for each of fiscal years 1999 through 
     2008, less any amount required to be paid under section 1022 
     for the fiscal year; and
       (B) $450,000,000 for each of fiscal year 2009 through 2023, 
     less any amount required to be paid under section 1022 during 
     the fiscal year;
       (4) section 1031 for assistance provided under the tobacco 
     worker transition program, but not to exceed $25,000,000 for 
     any fiscal year; and
       (5) subpart 9 of part A of title IV of the Higher Education 
     Act of 1965 for farmer opportunity grants, but not to 
     exceed--
       (A) $42,500,000 for each of the academic years 1999-2000 
     through 2003-2004;
       (B) $50,000,000 for each of the academic years 2004-2005 
     through 2008-2009;
       (C) $57,500,000 for each of the academic years 2009-2010 
     through 2013-2014;
       (D) $65,000,000 for each of the academic years 2014-2015 
     through 2018-2019; and
       (E) $72,500,000 for each of the academic years 2019-2020 
     through 2023-2024.

     SEC. 1013. BUDGETARY TREATMENT.

       This subtitle constitutes budget authority in advance of 
     appropriations Acts and represents the obligation of the 
     Federal Government to provide payments to States and eligible 
     persons in accordance with this title.

[[Page S5963]]

            Subtitle B--Tobacco Market Transition Assistance

     SEC. 1021. PAYMENTS FOR LOST TOBACCO QUOTA.

       (a) In General.--Beginning with the 1999 marketing year, 
     the Secretary shall make payments for lost tobacco quota to 
     eligible quota holders, quota lessees, and quota tenants as 
     reimbursement for lost tobacco quota.
       (b) Eligibility.--To be eligible to receive payments under 
     this section, a quota holder, quota lessee, or quota tenant 
     shall--
       (1) 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 make the demonstration required under paragraph (2); and
       (2) demonstrate to the satisfaction of the Secretary that, 
     with respect to the 1997 marketing year--
       (A) the producer was a quota holder and realized income (or 
     would have realized income, as determined by the Secretary, 
     but for a medical hardship or crop disaster during the 1997 
     marketing year) from the production of tobacco through--
       (i) the active production of tobacco;
       (ii) the lease and transfer of tobacco quota to another 
     farm;
       (iii) the rental of all or part of the farm of the quota 
     holder, including the right to produce tobacco, to another 
     tobacco producer; or
       (iv) the hiring of a quota tenant to produce tobacco;
       (B) the producer was a quota lessee; or
       (C) the producer was a quota tenant.
       (c) Base Quota Level.--
       (1) In general.--The Secretary shall determine, for each 
     quota holder, quota lessee, and quota tenant, the base quota 
     level for the 1995 through 1997 marketing years.
       (2) Quota holders.--The base quota level for a quota holder 
     shall be equal to the average tobacco farm marketing quota 
     established for the farm owned by the quota holder for the 
     1995 through 1997 marketing years.
       (3) Quota lessees.--The base quota level for a quota lessee 
     shall be equal to--
       (A) 50 percent of the average number of pounds of tobacco 
     quota established for the farm for the 1995 through 1997 
     marketing years--
       (i) that was leased and transferred to a farm owned by the 
     quota lessee; or
       (ii) that was rented to the quota lessee for the right to 
     produce the tobacco; less
       (B) 25 percent of the average number of pounds of tobacco 
     quota described in subparagraph (A) for which a quota tenant 
     was the principal producer of the tobacco quota.
       (4) Quota tenants.--The base quota level for a quota tenant 
     shall be equal to the sum of--
       (A) 50 percent of the average number of pounds of tobacco 
     quota established for a farm for the 1995 through 1997 
     marketing years--
       (i) that was owned by a quota holder; and
       (ii) for which the quota tenant was the principal producer 
     of the tobacco on the farm; and
       (B) 25 percent of the average number of pounds of tobacco 
     quota for the 1995 through 1997 marketing years--
       (i)(I) that was leased and transferred to a farm owned by 
     the quota lessee; or
       (II) for which the rights to produce the tobacco were 
     rented to the quota lessee; and
       (ii) for which the quota tenant was the principal producer 
     of the tobacco on the farm.
       (5) Marketing quotas other than poundage quotas.--
       (A) In general.--For each type of tobacco for which there 
     is a marketing quota or allotment (on an acreage basis), the 
     base quota level for each quota holder, quota lessee, or 
     quota tenant shall be determined in accordance with this 
     subsection (based on a poundage conversion) by multiplying--
       (i) the average tobacco farm marketing quota or allotment 
     for the 1995 through 1997 marketing years; and
       (ii) the average yield per acre for the farm for the type 
     of tobacco for the marketing years.
       (B) Yields not available.--If the average yield per acre is 
     not available for a farm, the Secretary shall calculate the 
     base quota for the quota holder, quota lessee, or quota 
     tenant (based on a poundage conversion) by determining the 
     amount equal to the product obtained by multiplying--
       (i) the average tobacco farm marketing quota or allotment 
     for the 1995 through 1997 marketing years; and
       (ii) the average county yield per acre for the county in 
     which the farm is located for the type of tobacco for the 
     marketing years.
       (d) Payments for Lost Tobacco Quota for Types of Tobacco 
     Other Than Flue-Cured Tobacco.--
       (1) Allocation of funds.--Of the amounts made available 
     under section 1011(d)(1) for payments for lost tobacco quota, 
     the Secretary shall make available for payments under this 
     subsection an amount that bears the same ratio to the amounts 
     made available as--
       (A) the sum of all national marketing quotas for all types 
     of tobacco other than flue-cured tobacco during the 1995 
     through 1997 marketing years; bears to
       (B) the sum of all national marketing quotas for all types 
     of tobacco during the 1995 through 1997 marketing years.
       (2) Option to relinquish quota.--
       (A) In general.--Each quota holder, for types of tobacco 
     other than flue-cured tobacco, shall be given the option to 
     relinquish the farm marketing quota or farm acreage allotment 
     of the quota holder in exchange for a payment made under 
     paragraph (3).
       (B) Notification.--A quota holder shall give notification 
     of the intention of the quota holder to exercise the option 
     at such time and in such manner as the Secretary may require, 
     but not later than January 15, 1999.
       (3) Payments for lost tobacco quota to quota holders 
     exercising options to relinquish quota.--
       (A) In general.--Subject to subparagraph (E), for each of 
     fiscal years 1999 through 2008, the Secretary shall make 
     annual payments for lost tobacco quota to each quota holder 
     that has relinquished the farm marketing quota or farm 
     acreage allotment of the quota holder under paragraph (2).
       (B) Amount.--The amount of a payment made to a quota holder 
     described in subparagraph (A) for a marketing year shall 
     equal \1/10\ of the lifetime limitation established under 
     subparagraph (E).
       (C) Timing.--The Secretary shall begin making annual 
     payments under this paragraph for the marketing year in which 
     the farm marketing quota or farm acreage allotment is 
     relinquished.
       (D) Additional payments.--The Secretary may increase annual 
     payments under this paragraph in accordance with paragraph 
     (7)(E) to the extent that funding is available.
       (E) Lifetime limitation on payments.--The total amount of 
     payments made under this paragraph to a quota holder shall 
     not exceed the product obtained by multiplying the base quota 
     level for the quota holder by $8 per pound.
       (4) Reissuance of quota.--
       (A) Reallocation to lessee or tenant.--If a quota holder 
     exercises an option to relinquish a tobacco farm marketing 
     quota or farm acreage allotment under paragraph (2), a quota 
     lessee or quota tenant that was the primary producer during 
     the 1997 marketing year of tobacco pursuant to the farm 
     marketing quota or farm acreage allotment, as determined by 
     the Secretary, shall be given the option of having an 
     allotment of the farm marketing quota or farm acreage 
     allotment reallocated to a farm owned by the quota lessee or 
     quota tenant.
       (B) Conditions for reallocation.--
       (i) Timing.--A quota lessee or quota tenant that is given 
     the option of having an allotment of a farm marketing quota 
     or farm acreage allotment reallocated to a farm owned by the 
     quota lessee or quota tenant under subparagraph (A) shall 
     have 1 year from the date on which a farm marketing quota or 
     farm acreage allotment is relinquished under paragraph (2) to 
     exercise the option.
       (ii) Limitation on acreage allotment.--In the case of a 
     farm acreage allotment, the acreage allotment determined for 
     any farm subsequent to any reallocation under subparagraph 
     (A) shall not exceed 50 percent of the acreage of cropland of 
     the farm owned by the quota lessee or quota tenant.
       (iii) Limitation on marketing quota.--In the case of a farm 
     marketing quota, the marketing quota determined for any farm 
     subsequent to any reallocation under subparagraph (A) shall 
     not exceed an amount determined by multiplying--

       (I) the average county farm yield, as determined by the 
     Secretary; and
       (II) 50 percent of the acreage of cropland of the farm 
     owned by the quota lessee or quota tenant.

       (C) Eligibility of lessee or tenant for payments.--If a 
     farm marketing quota or farm acreage allotment is reallocated 
     to a quota lessee or quota tenant under subparagraph (A)--
       (i) the quota lessee or quota tenant shall not be eligible 
     for any additional payments under paragraph (5) or (6) as a 
     result of the reallocation; and
       (ii) the base quota level for the quota lessee or quota 
     tenant shall not be increased as a result of the 
     reallocation.
       (D) Reallocation to quota holders within same county or 
     state.--
       (i) In general.--Except as provided in clause (ii), if 
     there was no quota lessee or quota tenant for the farm 
     marketing quota or farm acreage allotment for a type of 
     tobacco, or if no quota lessee or quota tenant exercises an 
     option of having an allotment of the farm marketing quota or 
     farm acreage allotment for a type of tobacco reallocated, the 
     Secretary shall reapportion the farm marketing quota or farm 
     acreage allotment among the remaining quota holders for the 
     type of tobacco within the same county.
       (ii) Cross-county leasing.--In a State in which cross-
     county leasing is authorized pursuant to section 319(l) of 
     the Agricultural Adjustment Act of 1938 (7 U.S.C. 1314e(l)), 
     the Secretary shall reapportion the farm marketing quota 
     among the remaining quota holders for the type of tobacco 
     within the same State.
       (iii) Eligibility of quota holder for payments.--If a farm 
     marketing quota is reapportioned to a quota holder under this 
     subparagraph--

       (I) the quota holder shall not be eligible for any 
     additional payments under paragraph (5) or (6) as a result of 
     the reapportionment; and
       (II) the base quota level for the quota holder shall not be 
     increased as a result of the reapportionment.

       (E) Special rule for tenant of leased tobacco.--If a quota 
     holder exercises an option to relinquish a tobacco farm 
     marketing quota or farm acreage allotment under paragraph 
     (2), the farm marketing quota or farm

[[Page S5964]]

     acreage allotment shall be divided evenly between, and the 
     option of reallocating the farm marketing quota or farm 
     acreage allotment shall be offered in equal portions to, the 
     quota lessee and to the quota tenant, if--
       (i) during the 1997 marketing year, the farm marketing 
     quota or farm acreage allotment was leased and transferred to 
     a farm owned by the quota lessee; and
       (ii) the quota tenant was the primary producer, as 
     determined by the Secretary, of tobacco pursuant to the farm 
     marketing quota or farm acreage allotment.
       (5) Payments for lost tobacco quota to quota holders.--
       (A) In general.--Except as otherwise provided in this 
     subsection, during any marketing year in which the national 
     marketing quota for a type of tobacco is less than the 
     average national marketing quota for the 1995 through 1997 
     marketing years, the Secretary shall make payments for lost 
     tobacco quota to each quota holder, for types of tobacco 
     other than flue-cured tobacco, that is eligible under 
     subsection (b), and has not exercised an option to relinquish 
     a tobacco farm marketing quota or farm acreage allotment 
     under paragraph (2), in an amount that is equal to the 
     product obtained by multiplying--
       (i) the number of pounds by which the basic farm marketing 
     quota (or poundage conversion) is less than the base quota 
     level for the quota holder; and
       (ii) $4 per pound.
       (B) Poundage conversion for marketing quotas other than 
     poundage quotas.--
       (i) In general.--For each type of tobacco for which there 
     is a marketing quota or allotment (on an acreage basis), the 
     poundage conversion for each quota holder during a marketing 
     year shall be determined by multiplying--

       (I) the basic farm acreage allotment for the farm for the 
     marketing year; and
       (II) the average yield per acre for the farm for the type 
     of tobacco.

       (ii) Yield not available.--If the average yield per acre is 
     not available for a farm, the Secretary shall calculate the 
     poundage conversion for each quota holder during a marketing 
     year by multiplying--

       (I) the basic farm acreage allotment for the farm for the 
     marketing year; and
       (II) the average county yield per acre for the county in 
     which the farm is located for the type of tobacco.

       (6) Payments for lost tobacco quota to quota lessees and 
     quota tenants.--Except as otherwise provided in this 
     subsection, during any marketing year in which the national 
     marketing quota for a type of tobacco is less than the 
     average national marketing quota for the type of tobacco for 
     the 1995 through 1997 marketing years, the Secretary shall 
     make payments for lost tobacco quota to each quota lessee and 
     quota tenant, for types of tobacco other than flue-cured 
     tobacco, that is eligible under subsection (b) in an amount 
     that is equal to the product obtained by multiplying--
       (A) the percentage by which the national marketing quota 
     for the type of tobacco is less than the average national 
     marketing quota for the type of tobacco for the 1995 through 
     1997 marketing years;
       (B) the base quota level for the quota lessee or quota 
     tenant; and
       (C) $4 per pound.
       (7) Lifetime limitation on payments.--Except as otherwise 
     provided in this subsection, the total amount of payments 
     made under this subsection to a quota holder, quota lessee, 
     or quota tenant during the lifetime of the quota holder, 
     quota lessee, or quota tenant shall not exceed the product 
     obtained by multiplying--
       (A) the base quota level for the quota holder, quota 
     lessee, or quota tenant; and
       (B) $8 per pound.
       (8) Limitations on aggregate annual payments.--
       (A) In general.--Except as otherwise provided in this 
     paragraph, the total amount payable under this subsection for 
     any marketing year shall not exceed the amount made available 
     under paragraph (1).
       (B) Accelerated payments.--Paragraph (1) shall not apply if 
     accelerated payments for lost tobacco quota are made in 
     accordance with paragraph (12).
       (C) Reductions.--If the sum of the amounts determined under 
     paragraphs (3), (5), and (6) for a marketing year exceeds the 
     amount made available under paragraph (1), the Secretary 
     shall make a pro rata reduction in the amounts payable under 
     paragraphs (5) and (6) to quota holders, quota lessees, and 
     quota tenants under this subsection to ensure that the total 
     amount of payments for lost tobacco quota does not exceed the 
     amount made available under paragraph (1).
       (D) Rollover of payments for lost tobacco quota.--Subject 
     to subparagraph (A), if the Secretary makes a reduction in 
     accordance with subparagraph (C), the amount of the reduction 
     shall be applied to the next marketing year and added to the 
     payments for lost tobacco quota for the marketing year.
       (E) Additional payments to quota holders exercising option 
     to relinquish quota.--If the amount made available under 
     paragraph (1) exceeds the sum of the amounts determined under 
     paragraphs (3), (5), and (6) for a marketing year, the 
     Secretary shall distribute the amount of the excess pro rata 
     to quota holders that have exercised an option to relinquish 
     a tobacco farm marketing quota or farm acreage allotment 
     under paragraph (2) by increasing the amount payable to each 
     such holder under paragraph (3).
       (9) Subsequent sale and transfer of quota.--Effective 
     beginning with the 1999 marketing year, on the sale and 
     transfer of a farm marketing quota or farm acreage allotment 
     under section 316(g) or 319(g) of the Agricultural Adjustment 
     Act of 1938 (7 U.S.C. 1314b(g), 1314e(g))--
       (A) the person that sold and transferred the quota or 
     allotment shall have--
       (i) the base quota level attributable to the person reduced 
     by the base quota level attributable to the quota that is 
     sold and transferred; and
       (ii) the lifetime limitation on payments established under 
     paragraph (7) attributable to the person reduced by the 
     product obtained by multiplying--

       (I) the base quota level attributable to the quota; and
       (II) $8 per pound; and

       (B) if the quota or allotment has never been relinquished 
     by a previous quota holder under paragraph (2), the person 
     that acquired the quota shall have--
       (i) the base quota level attributable to the person 
     increased by the base quota level attributable to the quota 
     that is sold and transferred; and
       (ii) the lifetime limitation on payments established under 
     paragraph (7) attributable to the person--

       (I) increased by the product obtained by multiplying--

       (aa) the base quota level attributable to the quota; and
       (bb) $8 per pound; but

       (II) decreased by any payments under paragraph (5) for lost 
     tobacco quota previously made that are attributable to the 
     quota that is sold and transferred.

       (10) Sale or transfer of farm.--On the sale or transfer of 
     ownership of a farm that is owned by a quota holder, the base 
     quota level established under subsection (c), the right to 
     payments under paragraph (5), and the lifetime limitation on 
     payments established under paragraph (7) shall transfer to 
     the new owner of the farm to the same extent and in the same 
     manner as those provisions applied to the previous quota 
     holder.
       (11) Death of quota lessee or quota tenant.--If a quota 
     lessee or quota tenant that is entitled to payments under 
     this subsection dies and is survived by a spouse or 1 or more 
     dependents, the right to receive the payments shall transfer 
     to the surviving spouse or, if there is no surviving spouse, 
     to the surviving dependents in equal shares.
       (12) Acceleration of payments.--
       (A) In general.--On the occurrence of any of the events 
     described in subparagraph (B), the Secretary shall make an 
     accelerated lump sum payment for lost tobacco quota as 
     established under paragraphs (5) and (6) to each quota 
     holder, quota lessee, and quota tenant for any affected type 
     of tobacco in accordance with subparagraph (C).
       (B) Triggering events.--The Secretary shall make 
     accelerated payments under subparagraph (A) if after the date 
     of enactment of this Act--
       (i) subject to subparagraph (D), for 3 consecutive 
     marketing years, the national marketing quota or national 
     acreage allotment for a type of tobacco is less than 50 
     percent of the national marketing quota or national acreage 
     allotment for the type of tobacco for the 1998 marketing 
     year; or
       (ii) Congress repeals or makes ineffective, directly or 
     indirectly, any provision of--

       (I) section 316 of the Agricultural Adjustment Act of 1938 
     (7 U.S.C. 1314b);
       (II) section 319 of the Agricultural Adjustment Act of 1938 
     (7 U.S.C. 1314e);
       (III) section 106 of the Agricultural Act of 1949 (7 U.S.C. 
     1445);
       (IV) section 106A of the Agricultural Act of 1949 (7 U.S.C. 
     1445-1); or
       (V) section 106B of the Agricultural Act of 1949 (7 U.S.C. 
     1445-2).

       (C) Amount.--The amount of the accelerated payments made to 
     each quota holder, quota lessee, and quota tenant under this 
     subsection shall be equal to--
       (i) the amount of the lifetime limitation established for 
     the quota holder, quota lessee, or quota tenant under 
     paragraph (7); less
       (ii) any payments for lost tobacco quota received by the 
     quota holder, quota lessee, or quota tenant before the 
     occurrence of any of the events described in subparagraph 
     (B).
       (D) Referendum vote not a triggering event.--A referendum 
     vote of producers for any type of tobacco that results in the 
     national marketing quota or national acreage allotment not 
     being in effect for the type of tobacco shall not be 
     considered a triggering event under this paragraph.
       (13) Ban on subsequent sale or leasing of farm marketing 
     quota or farm acreage allotment to quota holders exercising 
     option to relinquish quota.--No quota holder that exercises 
     the option to relinquish a farm marketing quota or farm 
     acreage allotment for any type of tobacco under paragraph (2) 
     shall be eligible to acquire a farm marketing quota or farm 
     acreage allotment for the type of tobacco, or to obtain the 
     lease or transfer of a farm marketing quota or farm acreage 
     allotment for the type of tobacco, for a period of 25 crop 
     years after the date on which the quota or allotment was 
     relinquished.
       (e) Payments for Lost Tobacco Quota for Flue-Cured 
     Tobacco.--
       (1) Allocation of funds.--Of the amounts made available 
     under section 1011(d)(1) for

[[Page S5965]]

     payments for lost tobacco quota, the Secretary shall make 
     available for payments under this subsection an amount that 
     bears the same ratio to the amounts made available as--
       (A) the sum of all national marketing quotas for flue-cured 
     tobacco during the 1995 through 1997 marketing years; bears 
     to
       (B) the sum of all national marketing quotas for all types 
     of tobacco during the 1995 through 1997 marketing years.
       (2) Relinquishment of quota.--
       (A) In general.--Each quota holder of flue-cured tobacco 
     shall relinquish the farm marketing quota or farm acreage 
     allotment in exchange for a payment made under paragraph (3) 
     due to the transition from farm marketing quotas as provided 
     under section 317 of the Agricultural Adjustment Act of 1938 
     for flue-cured tobacco to individual tobacco production 
     permits as provided under section 317A of the Agricultural 
     Adjustment Act of 1938 for flue-cured tobacco.
       (B) Notification.--The Secretary shall notify the quota 
     holders of the relinquishment of their quota or allotment at 
     such time and in such manner as the Secretary may require, 
     but not later than November 15, 1998.
       (3) Payments for lost flue-cured tobacco quota to quota 
     holders that relinquish quota.--
       (A) In general.--For each of fiscal years 1999 through 
     2008, the Secretary shall make annual payments for lost flue-
     cured tobacco to each quota holder that has relinquished the 
     farm marketing quota or farm acreage allotment of the quota 
     holder under paragraph (2).
       (B) Amount.--The amount of a payment made to a quota holder 
     described in subparagraph (A) for a marketing year shall 
     equal \1/10\ of the lifetime limitation established under 
     paragraph (6).
       (C) Timing.--The Secretary shall begin making annual 
     payments under this paragraph for the marketing year in which 
     the farm marketing quota or farm acreage allotment is 
     relinquished.
       (D) Additional payments.--The Secretary may increase annual 
     payments under this paragraph in accordance with paragraph 
     (7)(E) to the extent that funding is available.
       (4) Payments for lost flue-cured tobacco quota to quota 
     lessees and quota tenants that have not relinquished 
     permits.--
       (A) In general.--Except as otherwise provided in this 
     subsection, during any marketing year in which the national 
     marketing quota for flue-cured tobacco is less than the 
     average national marketing quota for the 1995 through 1997 
     marketing years, the Secretary shall make payments for lost 
     tobacco quota to each quota lessee or quota tenant that--
       (i) is eligible under subsection (b);
       (ii) has been issued an individual tobacco production 
     permit under section 317A(b) of the Agricultural Adjustment 
     Act of 1938; and
       (iii) has not exercised an option to relinquish the permit.
       (B) Amount.--The amount of a payment made to a quota lessee 
     or quota tenant described in subparagraph (A) for a marketing 
     year shall be equal to the product obtained by multiplying--
       (i) the number of pounds by which the individual marketing 
     limitation established for the permit is less than twice the 
     base quota level for the quota lessee or quota tenant; and
       (ii) $2 per pound.
       (5) Payments for lost flue-cured tobacco quota to quota 
     lessees and quota tenants that have relinquished permits.--
       (A) In general.--For each of fiscal years 1999 through 
     2008, the Secretary shall make annual payments for lost flue-
     cured tobacco quota to each quota lessee and quota tenant 
     that has relinquished an individual tobacco production permit 
     under section 317A(b)(5) of the Agricultural Adjustment Act 
     of 1938.
       (B) Amount.--The amount of a payment made to a quota lessee 
     or quota tenant described in subparagraph (A) for a marketing 
     year shall be equal to \1/10\ of the lifetime limitation 
     established under paragraph (6).
       (C) Timing.--The Secretary shall begin making annual 
     payments under this paragraph for the marketing year in which 
     the individual tobacco production permit is relinquished.
       (D) Additional payments.--The Secretary may increase annual 
     payments under this paragraph in accordance with paragraph 
     (7)(E) to the extent that funding is available.
       (E) Prohibition against permit expansion.--A quota lessee 
     or quota tenant that receives a payment under this paragraph 
     shall be ineligible to receive any new or increased tobacco 
     production permit from the county production pool established 
     under section 317A(b)(8) of the Agricultural Adjustment Act 
     of 1938.
       (6) Lifetime limitation on payments.--Except as otherwise 
     provided in this subsection, the total amount of payments 
     made under this subsection to a quota holder, quota lessee, 
     or quota tenant during the lifetime of the quota holder, 
     quota lessee, or quota tenant shall not exceed the product 
     obtained by multiplying--
       (A) the base quota level for the quota holder, quota 
     lessee, or quota tenant; and
       (B) $8 per pound.
       (7) Limitations on aggregate annual payments.--
       (A) In general.--Except as otherwise provided in this 
     paragraph, the total amount payable under this subsection for 
     any marketing year shall not exceed the amount made available 
     under paragraph (1).
       (B) Accelerated payments.--Paragraph (1) shall not apply if 
     accelerated payments for lost flue-cured tobacco quota are 
     made in accordance with paragraph (9).
       (C) Reductions.--If the sum of the amounts determined under 
     paragraphs (3), (4), and (5) for a marketing year exceeds the 
     amount made available under paragraph (1), the Secretary 
     shall make a pro rata reduction in the amounts payable under 
     paragraph (4) to quota lessees and quota tenants under this 
     subsection to ensure that the total amount of payments for 
     lost flue-cured tobacco quota does not exceed the amount made 
     available under paragraph (1).
       (D) Rollover of payments for lost flue-cured tobacco 
     quota.--Subject to subparagraph (A), if the Secretary makes a 
     reduction in accordance with subparagraph (C), the amount of 
     the reduction shall be applied to the next marketing year and 
     added to the payments for lost flue-cured tobacco quota for 
     the marketing year.
       (E) Additional payments to quota holders exercising option 
     to relinquish quotas or permits, or to quota lessees or quota 
     tenants relinquishing permits.--If the amount made available 
     under paragraph (1) exceeds the sum of the amounts determined 
     under paragraphs (3), (4), and (5) for a marketing year, the 
     Secretary shall distribute the amount of the excess pro rata 
     to quota holders by increasing the amount payable to each 
     such holder under paragraphs (3) and (5).
       (8) Death of quota holder, quota lessee, or quota tenant.--
     If a quota holder, quota lessee or quota tenant that is 
     entitled to payments under paragraph (4) or (5) dies and is 
     survived by a spouse or 1 or more descendants, the right to 
     receive the payments shall transfer to the surviving spouse 
     or, if there is no surviving spouse, to the surviving 
     descendants in equal shares.
       (9) Acceleration of payments.--
       (A) In general.--On the occurrence of any of the events 
     described in subparagraph (B), the Secretary shall make an 
     accelerated lump sum payment for lost flue-cured tobacco 
     quota as established under paragraphs (3), (4), and (5) to 
     each quota holder, quota lessee, and quota tenant for flue-
     cured tobacco in accordance with subparagraph (C).
       (B) Triggering events.--The Secretary shall make 
     accelerated payments under subparagraph (A) if after the date 
     of enactment of this Act--
       (i) subject to subparagraph (D), for 3 consecutive 
     marketing years, the national marketing quota or national 
     acreage allotment for flue-cured tobacco is less than 50 
     percent of the national marketing quota or national acreage 
     allotment for flue-cured tobacco for the 1998 marketing year; 
     or
       (ii) Congress repeals or makes ineffective, directly or 
     indirectly, any provision of--

       (I) section 316 of the Agricultural Adjustment Act of 1938 
     (7 U.S.C. 1314b);
       (II) section 319 of the Agricultural Adjustment Act of 1938 
     (7 U.S.C. 1314e);
       (III) section 106 of the Agricultural Act of 1949 (7 U.S.C. 
     1445);
       (IV) section 106A of the Agricultural Act of 1949 (7 U.S.C. 
     1445-1);
       (V) section 106B of the Agricultural Act of 1949 (7 U.S.C. 
     1445-2); or
       (VI) section 317A of the Agricultural Adjustment Act of 
     1938.

       (C) Amount.--The amount of the accelerated payments made to 
     each quota holder, quota lessee, and quota tenant under this 
     subsection shall be equal to--
       (i) the amount of the lifetime limitation established for 
     the quota holder, quota lessee, or quota tenant under 
     paragraph (6); less
       (ii) any payments for lost flue-cured tobacco quota 
     received by the quota holder, quota lessee, or quota tenant 
     before the occurrence of any of the events described in 
     subparagraph (B).
       (D) Referendum vote not a triggering event.--A referendum 
     vote of producers for flue-cured tobacco that results in the 
     national marketing quota or national acreage allotment not 
     being in effect for flue-cured tobacco shall not be 
     considered a triggering event under this paragraph.

     SEC. 1022. INDUSTRY PAYMENTS FOR ALL DEPARTMENT COSTS 
                   ASSOCIATED WITH TOBACCO PRODUCTION.

       (a) In General.--The Secretary shall use such amounts 
     remaining unspent and obligated at the end of each fiscal 
     year to reimburse the Secretary for--
       (1) costs associated with the administration of programs 
     established under this title and amendments made by this 
     title;
       (2) costs associated with the administration of the tobacco 
     quota and price support programs administered by the 
     Secretary;
       (3) costs to the Federal Government of carrying out crop 
     insurance programs for tobacco;
       (4) costs associated with all agricultural research, 
     extension, or education activities associated with tobacco;
       (5) costs associated with the administration of loan 
     association and cooperative programs for tobacco producers, 
     as approved by the Secretary; and
       (6) any other costs incurred by the Department of 
     Agriculture associated with the production of tobacco.
       (b) Limitations.--Amounts made available under subsection 
     (a) may not be used--
       (1) to provide direct benefits to quota holders, quota 
     lessees, or quota tenants; or
       (2) in a manner that results in a decrease, or an increase 
     relative to other crops, in the amount of the crop insurance 
     premiums assessed to participating tobacco producers

[[Page S5966]]

     under the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.).
       (c) Determinations.--Not later than September 30, 1998, and 
     each fiscal year thereafter, the Secretary shall determine--
       (1) the amount of costs described in subsection (a); and
       (2) the amount that will be provided under this section as 
     reimbursement for the costs.

     SEC. 1023. TOBACCO COMMUNITY ECONOMIC DEVELOPMENT GRANTS.

       (a) Authority.--The Secretary shall make grants to tobacco-
     growing States in accordance with this section to enable the 
     States to carry out economic development initiatives in 
     tobacco-growing communities.
       (b) Application.--To be eligible to receive payments under 
     this section, a State shall prepare and submit to the 
     Secretary an application at such time, in such manner, and 
     containing such information as the Secretary may require, 
     including--
       (1) a description of the activities that the State will 
     carry out using amounts received under the grant;
       (2) a designation of an appropriate State agency to 
     administer amounts received under the grant; and
       (3) a description of the steps to be taken to ensure that 
     the funds are distributed in accordance with subsection (e).
       (c) Amount of Grant.--
       (1) In general.--From the amounts available to carry out 
     this section for a fiscal year, the Secretary shall allot to 
     each State an amount that bears the same ratio to the amounts 
     available as the total farm income of the State derived from 
     the production of tobacco during the 1995 through 1997 
     marketing years (as determined under paragraph (2)) bears to 
     the total farm income of all States derived from the 
     production of tobacco during the 1995 through 1997 marketing 
     years.
       (2) Tobacco income.--For the 1995 through 1997 marketing 
     years, the Secretary shall determine the amount of farm 
     income derived from the production of tobacco in each State 
     and in all States.
       (d) Payments.--
       (1) In general.--A State that has an application approved 
     by the Secretary under subsection (b) shall be entitled to a 
     payment under this section in an amount that is equal to its 
     allotment under subsection (c).
       (2) Form of payments.--The Secretary may make payments 
     under this section to a State in installments, and in advance 
     or by way of reimbursement, with necessary adjustments on 
     account of overpayments or underpayments, as the Secretary 
     may determine.
       (3) Reallotments.--Any portion of the allotment of a State 
     under subsection (c) that the Secretary determines will not 
     be used to carry out this section in accordance with an 
     approved State application required under subsection (b), 
     shall be reallotted by the Secretary to other States in 
     proportion to the original allotments to the other States.
       (e) Use and Distribution of Funds.--
       (1) In general.--Amounts received by a State under this 
     section shall be used to carry out economic development 
     activities, including--
       (A) rural business enterprise activities described in 
     subsections (c) and (e) of section 310B of the Consolidated 
     Farm and Rural Development Act (7 U.S.C. 1932);
       (B) down payment loan assistance programs that are similar 
     to the program described in section 310E of the Consolidated 
     Farm and Rural Development Act (7 U.S.C. 1935);
       (C) activities designed to help create productive farm or 
     off-farm employment in rural areas to provide a more viable 
     economic base and enhance opportunities for improved incomes, 
     living standards, and contributions by rural individuals to 
     the economic and social development of tobacco communities;
       (D) activities that expand existing infrastructure, 
     facilities, and services to capitalize on opportunities to 
     diversify economies in tobacco communities and that support 
     the development of new industries or commercial ventures;
       (E) activities by agricultural organizations that provide 
     assistance directly to participating tobacco producers to 
     assist in developing other agricultural activities that 
     supplement tobacco-producing activities;
       (F) initiatives designed to create or expand locally owned 
     value-added processing and marketing operations in tobacco 
     communities;
       (G) technical assistance activities by persons to support 
     farmer-owned enterprises, or agriculture-based rural 
     development enterprises, of the type described in section 252 
     or 253 of the Trade Act of 1974 (19 U.S.C. 2342, 2343); and
       (H) initiatives designed to partially compensate tobacco 
     warehouse owners for lost revenues and assist the tobacco 
     warehouse owners in establishing successful business 
     enterprises.
       (2) Tobacco-growing counties.--Assistance may be provided 
     by a State under this section only to assist a county in the 
     State that has been determined by the Secretary to have in 
     excess of $100,000 in income derived from the production of 
     tobacco during 1 or more of the 1995 through 1997 marketing 
     years. For purposes of this section, the term ``tobacco-
     growing county'' includes a political subdivision surrounded 
     within a State by a county that has been determined by the 
     Secretary to have in excess of $100,000 in income derived 
     from the production of tobacco during 1 or more of the 1995 
     through 1997 marketing years.
       (3) Distribution.--
       (A) Economic development activities.--Not less than 20 
     percent of the amounts received by a State under this section 
     shall be used to carry out--
       (i) economic development activities described in 
     subparagraph (E) or (F) of paragraph (1); or
       (ii) agriculture-based rural development activities 
     described in paragraph (1)(G).
       (B) Technical assistance activities.--Not less than 4 
     percent of the amounts received by a State under this section 
     shall be used to carry out technical assistance activities 
     described in paragraph (1)(G).
       (C) Tobacco warehouse owner initiatives.--Not less than 6 
     percent of the amounts received by a State under this section 
     during each of fiscal years 1999 through 2008 shall be used 
     to carry out initiatives described in paragraph (1)(H).
       (D) Tobacco-growing counties.--To be eligible to receive 
     payments under this section, a State shall demonstrate to the 
     Secretary that funding will be provided, during each 5-year 
     period for which funding is provided under this section, for 
     activities in each county in the State that has been 
     determined under paragraph (2) to have in excess of $100,000 
     in income derived from the production of tobacco, in amounts 
     that are at least equal to the product obtained by 
     multiplying--
       (i) the ratio that the tobacco production income in the 
     county determined under paragraph (2) bears to the total 
     tobacco production income for the State determined under 
     subsection (c); and
       (ii) 50 percent of the total amounts received by a State 
     under this section during the 5-year period.
       (f) Preferences in Hiring.--A State may require recipients 
     of funds under this section to provide a preference in 
     employment to--
       (1) an individual who--
       (A) during the 1998 calendar year, was employed in the 
     manufacture, processing, or warehousing of tobacco or tobacco 
     products, or resided, in a county described in subsection 
     (e)(2); and
       (B) is eligible for assistance under the tobacco worker 
     transition program established under section 1031; or
       (2) an individual who--
       (A) during the 1998 marketing year, carried out tobacco 
     quota or relevant tobacco production activities in a county 
     described in subsection (e)(2);
       (B) is eligible for a farmer opportunity grant under 
     subpart 9 of part A of title IV of the Higher Education Act 
     of 1965; and
       (C) has successfully completed a course of study at an 
     institution of higher education.
       (g) Maintenance of Effort.--
       (1) In general.--Subject to paragraph (2), a State shall 
     provide an assurance to the Secretary that the amount of 
     funds expended by the State and all counties in the State 
     described in subsection (e)(2) for any activities funded 
     under this section for a fiscal year is not less than 90 
     percent of the amount of funds expended by the State and 
     counties for the activities for the preceding fiscal year.
       (2) Reduction of grant amount.--If a State does not provide 
     an assurance described in paragraph (1), the Secretary shall 
     reduce the amount of the grant determined under subsection 
     (c) by an amount equal to the amount by which the amount of 
     funds expended by the State and counties for the activities 
     is less than 90 percent of the amount of funds expended by 
     the State and counties for the activities for the preceding 
     fiscal year, as determined by the Secretary.
       (3) Federal funds.--For purposes of this subsection, the 
     amount of funds expended by a State or county shall not 
     include any amounts made available by the Federal Government.

     SEC. 1024. FLUE-CURED TOBACCO PRODUCTION PERMITS.

       The Agricultural Adjustment Act of 1938 is amended by 
     inserting after section 317 (7 U.S.C. 1314c) the following:

     ``SEC. 317A. FLUE-CURED TOBACCO PRODUCTION PERMITS.

       ``(a) Definitions.--In this section:
       ``(1) Individual acreage limitation.--The term `individual 
     acreage limitation' means the number of acres of flue-cured 
     tobacco that may be planted by the holder of a permit during 
     a marketing year, calculated--
       ``(A) prior to--
       ``(i) any increase or decrease in the number due to 
     undermarketings or overmarketings; and
       ``(ii) any reduction under subsection (i); and
       ``(B) in a manner that ensures that--
       ``(i) the total of all individual acreage limitations is 
     equal to the national acreage allotment, less the reserve 
     provided under subsection (h); and
       ``(ii) the individual acreage limitation for a marketing 
     year bears the same ratio to the individual acreage 
     limitation for the previous marketing year as the ratio that 
     the national acreage allotment for the marketing year bears 
     to the national acreage allotment for the previous marketing 
     year, subject to adjustments by the Secretary to account for 
     any reserve provided under subsection (h).
       ``(2) Individual marketing limitation.--The term 
     `individual marketing limitation' means the number of pounds 
     of flue-cured tobacco that may be marketed by the holder of a 
     permit during a marketing year, calculated--

[[Page S5967]]

       ``(A) prior to--
       ``(i) any increase or decrease in the number due to 
     undermarketings or overmarketings; and
       ``(ii) any reduction under subsection (i); and
       ``(B) in a manner that ensures that--
       ``(i) the total of all individual marketing limitations is 
     equal to the national marketing quota, less the reserve 
     provided under subsection (h); and
       ``(ii) the individual marketing limitation for a marketing 
     year is obtained by multiplying the individual acreage 
     limitation by the permit yield, prior to any adjustment for 
     undermarketings or overmarketings.
       ``(3) Individual tobacco production permit.--The term 
     `individual tobacco production permit' means a permit issued 
     by the Secretary to a person authorizing the production of 
     flue-cured tobacco for any marketing year during which this 
     section is effective.
       ``(4) National acreage allotment.--The term `national 
     acreage allotment' means the quantity determined by 
     dividing--
       ``(A) the national marketing quota; by
       ``(B) the national average yield goal.
       ``(5) National average yield goal.--The term `national 
     average yield goal' means the national average yield for 
     flue-cured tobacco during the 5 marketing years immediately 
     preceding the marketing year for which the determination is 
     being made.
       ``(6) National marketing quota.--For the 1999 and each 
     subsequent crop of flue-cured tobacco, the term `national 
     marketing quota' for a marketing year means the quantity of 
     flue-cured tobacco, as determined by the Secretary, that is 
     not more than 103 percent nor less than 97 percent of the 
     total of--
       ``(A) the aggregate of the quantities of flue-cured tobacco 
     that domestic manufacturers of cigarettes estimate that the 
     manufacturers intend to purchase on the United States auction 
     markets or from producers during the marketing year, as 
     compiled and determined under section 320A;
       ``(B) the average annual quantity of flue-cured tobacco 
     exported from the United States during the 3 marketing years 
     immediately preceding the marketing year for which the 
     determination is being made; and
       ``(C) the quantity, if any, of flue-cured tobacco that the 
     Secretary, in the discretion of the Secretary, determines is 
     necessary to increase or decrease the inventory of the 
     producer-owned cooperative marketing association that has 
     entered into a loan agreement with the Commodity Credit 
     Corporation to make price support available to producers of 
     flue-cured tobacco to establish or maintain the inventory at 
     the reserve stock level for flue-cured tobacco.
       ``(7) Permit yield.--The term `permit yield' means the 
     yield of tobacco per acre for an individual tobacco 
     production permit holder that is--
       ``(A) based on a preliminary permit yield that is equal to 
     the average yield during the 5 marketing years immediately 
     preceding the marketing year for which the determination is 
     made in the county where the holder of the permit is 
     authorized to plant flue-cured tobacco, as determined by the 
     Secretary, on the basis of actual yields of farms in the 
     county; and
       ``(B) adjusted by a weighted national yield factor 
     calculated by--
       ``(i) multiplying each preliminary permit yield by the 
     individual acreage limitation, prior to adjustments for 
     overmarketings, undermarketings, or reductions required under 
     subsection (i); and
       ``(ii) dividing the sum of the products under clause (i) 
     for all flue-cured individual tobacco production permit 
     holders by the national acreage allotment.
       ``(b) Initial Issuance of Permits.--
       ``(1) Termination of flue-cured marketing quotas.--On the 
     date of enactment of the National Tobacco Policy and Youth 
     Smoking Reduction Act, farm marketing quotas as provided 
     under section 317 shall no longer be in effect for flue-cured 
     tobacco.
       ``(2) Issuance of permits to quota holders that were 
     principal producers.--
       ``(A) In general.--By January 15, 1999, each individual 
     quota holder under section 317 that was a principal producer 
     of flue-cured tobacco during the 1998 marketing year, as 
     determined by the Secretary, shall be issued an individual 
     tobacco production permit under this section.
       ``(B) Notification.--The Secretary shall notify the holder 
     of each permit of the individual acreage limitation and the 
     individual marketing limitation applicable to the holder for 
     each marketing year.
       ``(C) Individual acreage limitation for 1999 marketing 
     year.--In establishing the individual acreage limitation for 
     the 1999 marketing year under this section, the farm acreage 
     allotment that was allotted to a farm owned by the quota 
     holder for the 1997 marketing year shall be considered the 
     individual acreage limitation for the previous marketing 
     year.
       ``(D) Individual marketing limitation for 1999 marketing 
     year.--In establishing the individual marketing limitation 
     for the 1999 marketing year under this section, the farm 
     marketing quota that was allotted to a farm owned by the 
     quota holder for the 1997 marketing year shall be considered 
     the individual marketing limitation for the previous 
     marketing year.
       ``(3) Quota holders that were not principal producers.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     on approval through a referendum under subsection (c)--
       ``(i) each person that was a quota holder under section 317 
     but that was not a principal producer of flue-cured tobacco 
     during the 1997 marketing year, as determined by the 
     Secretary, shall not be eligible to own a permit; and
       ``(ii) the Secretary shall not issue any permit during the 
     25-year period beginning on the date of enactment of this Act 
     to any person that was a quota holder and was not the 
     principal producer of flue-cured tobacco during the 1997 
     marketing year.
       ``(B) Medical hardships and crop disasters.--Subparagraph 
     (A) shall not apply to a person that would have been the 
     principal producer of flue-cured tobacco during the 1997 
     marketing year but for a medical hardship or crop disaster 
     that occurred during the 1997 marketing year.
       ``(C) Administration.--The Secretary shall issue 
     regulations--
       ``(i) defining the term `person' for the purpose of this 
     paragraph; and
       ``(ii) prescribing such rules as the Secretary determines 
     are necessary to ensure a fair and reasonable application of 
     the prohibition established under this paragraph.
       ``(4) Issuance of permits to principal producers of flue-
     cured tobacco.--
       ``(A) In general.--By January 15, 1999, each individual 
     quota lessee or quota tenant (as defined in section 1002 of 
     the LEAF Act) that was the principal producer of flue-cured 
     tobacco during the 1997 marketing year, as determined by the 
     Secretary, shall be issued an individual tobacco production 
     permit under this section.
       ``(B) Individual acreage limitations.--In establishing the 
     individual acreage limitation for the 1999 marketing year 
     under this section, the farm acreage allotment that was 
     allotted to a farm owned by a quota holder for whom the quota 
     lessee or quota tenant was the principal producer of flue-
     cured tobacco during the 1997 marketing year shall be 
     considered the individual acreage limitation for the previous 
     marketing year.
       ``(C) Individual marketing limitations.--In establishing 
     the individual marketing limitation for the 1999 marketing 
     year under this section, the individual marketing limitation 
     for the previous year for an individual described in this 
     paragraph shall be calculated by multiplying--
       ``(i) the farm marketing quota that was allotted to a farm 
     owned by a quota holder for whom the quota lessee or quota 
     holder was the principal producer of flue-cured tobacco 
     during the 1997 marketing year, by
       ``(ii) the ratio that--

       ``(I) the sum of all flue-cured tobacco farm marketing 
     quotas for the 1997 marketing year prior to adjusting for 
     undermarketing and overmarketing; bears to
       ``(II) the sum of all flue-cured tobacco farm marketing 
     quotas for the 1998 marketing year, after adjusting for 
     undermarketing and overmarketing.

       ``(D) Special rule for tenant of leased flue-cured 
     tobacco.--If the farm marketing quota or farm acreage 
     allotment of a quota holder was produced pursuant to an 
     agreement under which a quota lessee rented land from a quota 
     holder and a quota tenant was the primary producer, as 
     determined by the Secretary, of flue-cured tobacco pursuant 
     to the farm marketing quota or farm acreage allotment, the 
     farm marketing quota or farm acreage allotment shall be 
     divided proportionately between the quota lessee and quota 
     tenant for purposes of issuing individual tobacco production 
     permits under this paragraph.
       ``(5) Option of quota lessee or quota tenant to relinquish 
     permit.--
       ``(A) In general.--Each quota lessee or quota tenant that 
     is issued an individual tobacco production permit under 
     paragraph (4) shall be given the option of relinquishing the 
     permit in exchange for payments made under section 1021(e)(5) 
     of the LEAF Act.
       ``(B) Notification.--A quota lessee or quota tenant that is 
     issued an individual tobacco production permit shall give 
     notification of the intention to exercise the option at such 
     time and in such manner as the Secretary may require, but not 
     later than 45 days after the permit is issued.
       ``(C) Reallocation of permit.--The Secretary shall add the 
     authority to produce flue-cured tobacco under the individual 
     tobacco production permit relinquished under this paragraph 
     to the county production pool established under paragraph (8) 
     for reallocation by the appropriate county committee.
       ``(6) Active producer requirement.--
       ``(A) Requirement for sharing risk.--No individual tobacco 
     production permit shall be issued to, or maintained by, a 
     person that does not fully share in the risk of producing a 
     crop of flue-cured tobacco.
       ``(B) Criteria for sharing risk.--For purposes of this 
     paragraph, a person shall be considered to have fully shared 
     in the risk of production of a crop if--
       ``(i) the investment of the person in the production of the 
     crop is not less than 100 percent of the costs of production 
     associated with the crop;
       ``(ii) the amount of the person's return on the investment 
     is dependent solely on the sale price of the crop; and
       ``(iii) the person may not receive any of the return before 
     the sale of the crop.
       ``(C) Persons not sharing risk.--
       ``(i) Forfeiture.--Any person that fails to fully share in 
     the risks of production under this paragraph shall forfeit an 
     individual tobacco production permit if, after notice and 
     opportunity for a hearing, the appropriate county committee 
     determines that the conditions for forfeiture exist.

[[Page S5968]]

       ``(ii) Reallocation.--The Secretary shall add the authority 
     to produce flue-cured tobacco under the individual tobacco 
     production permit forfeited under this subparagraph to the 
     county production pool established under paragraph (8) for 
     reallocation by the appropriate county committee.
       ``(D) Notice.--Notice of any determination made by a county 
     committee under subparagraph (C) shall be mailed, as soon as 
     practicable, to the person involved.
       ``(E) Review.--If the person is dissatisfied with the 
     determination, the person may request, not later than 15 days 
     after notice of the determination is received, a review of 
     the determination by a local review committee under the 
     procedures established under section 363 for farm marketing 
     quotas.
       ``(7) County of origin requirement.--For the 1999 and each 
     subsequent crop of flue-cured tobacco, all tobacco produced 
     pursuant to an individual tobacco production permit shall be 
     produced in the same county in which was produced the tobacco 
     produced during the 1997 marketing year pursuant to the farm 
     marketing quota or farm acreage allotment on which the 
     individual tobacco production permit is based.
       ``(8) County production pool.--
       ``(A) In general.--The authority to produce flue-cured 
     tobacco under an individual tobacco production permit that is 
     forfeited, relinquished, or surrendered within a county may 
     be reallocated by the appropriate county committee to tobacco 
     producers located in the same county that apply to the 
     committee to produce flue-cured tobacco under the authority.
       ``(B) Priority.--In reallocating individual tobacco 
     production permits under this paragraph, a county committee 
     shall provide a priority to--
       ``(i) an active tobacco producer that controls the 
     authority to produce a quantity of flue-cured tobacco under 
     an individual tobacco production permit that is equal to or 
     less than the average number of pounds of flue-cured tobacco 
     that was produced by the producer during each of the 1995 
     through 1997 marketing years, as determined by the Secretary; 
     and
       ``(ii) a new tobacco producer.
       ``(C) Criteria.--Individual tobacco production permits 
     shall be reallocated by the appropriate county committee 
     under this paragraph in a fair and equitable manner after 
     taking into consideration--
       ``(i) the experience of the producer;
       ``(ii) the availability of land, labor, and equipment for 
     the production of tobacco;
       ``(iii) crop rotation practices; and
       ``(iv) the soil and other physical factors affecting the 
     production of tobacco.
       ``(D) Medical hardships and crop disasters.--
     Notwithstanding any other provision of this Act, the 
     Secretary may issue an individual tobacco production permit 
     under this paragraph to a producer that is otherwise 
     ineligible for the permit due to a medical hardship or crop 
     disaster that occurred during the 1997 marketing year.
       ``(c) Referendum.--
       ``(1) Announcement of quota and allotment.--Not later than 
     December 15, 1998, the Secretary pursuant to subsection (b) 
     shall determine and announce--
       ``(A) the quantity of the national marketing quota for 
     flue-cured tobacco for the 1999 marketing year; and
       ``(B) the national acreage allotment and national average 
     yield goal for the 1999 crop of flue-cured tobacco.
       ``(2) Special referendum.--Not later than 30 days after the 
     announcement of the quantity of the national marketing quota 
     in 2001, the Secretary shall conduct a special referendum of 
     the tobacco production permit holders that were the principal 
     producers of flue-cured tobacco of the 1997 crop to determine 
     whether the producers approve or oppose the continuation of 
     individual tobacco production permits on an acreage-poundage 
     basis as provided in this section for the 2002 through 2004 
     marketing years.
       ``(3) Approval of permits.--If the Secretary determines 
     that more than 66\2/3\ percent of the producers voting in the 
     special referendum approve the establishment of individual 
     tobacco production permits on an acreage-poundage basis--
       ``(A) individual tobacco production permits on an acreage-
     poundage basis as provided in this section shall be in effect 
     for the 2002 through 2004 marketing years; and
       ``(B) marketing quotas on an acreage-poundage basis shall 
     cease to be in effect for the 2002 through 2004 marketing 
     years.
       ``(4) Disapproval of permits.--If individual tobacco 
     production permits on an acreage-poundage basis are not 
     approved by more than 66\2/3\ percent of the producers voting 
     in the referendum, no marketing quotas on an acreage-poundage 
     basis shall continue in effect that were proclaimed under 
     section 317 prior to the referendum.
       ``(5) Applicable marketing years.--If individual tobacco 
     production permits have been made effective for flue-cured 
     tobacco on an acreage-poundage basis pursuant to this 
     subsection, the Secretary shall, not later than December 15 
     of any future marketing year, announce a national marketing 
     quota for that type of tobacco for the next 3 succeeding 
     marketing years if the marketing year is the last year of 3 
     consecutive years for which individual tobacco production 
     permits previously proclaimed will be in effect.
       ``(d) Annual Announcement of National Marketing Quota.--The 
     Secretary shall determine and announce the national marketing 
     quota, national acreage allotment, and national average yield 
     goal for the second and third marketing years of any 3-year 
     period for which individual tobacco production permits are in 
     effect on or before the December 15 immediately preceding the 
     beginning of the marketing year to which the quota, 
     allotment, and goal apply.
       ``(e) Annual Announcement of Individual Tobacco Production 
     Permits.--If a national marketing quota, national acreage 
     allotment, and national average yield goal are determined and 
     announced, the Secretary shall provide for the determination 
     of individual tobacco production permits, individual acreage 
     limitations, and individual marketing limitations under this 
     section for the crop and marketing year covered by the 
     determinations.
       ``(f) Assignment of Tobacco Production Permits.--
       ``(1) Limitation to same county.--Each individual tobacco 
     production permit holder shall assign the individual acreage 
     limitation and individual marketing limitation to 1 or more 
     farms located within the county of origin of the individual 
     tobacco production permit.
       ``(2) Filing with county committee.--The assignment of an 
     individual acreage limitation and individual marketing 
     limitation shall not be effective until evidence of the 
     assignment, in such form as required by the Secretary, is 
     filed with and determined by the county committee for the 
     county in which the farm involved is located.
       ``(3) Limitation on tillable cropland.--The total acreage 
     assigned to any farm under this subsection shall not exceed 
     the acreage of cropland on the farm.
       ``(g) Prohibition on Sale or Leasing of Individual Tobacco 
     Production Permits.--
       ``(1) In general.--Except as provided in paragraphs (2) and 
     (3), the Secretary shall not permit the sale and transfer, or 
     lease and transfer, of an individual tobacco production 
     permit issued under this section.
       ``(2) Transfer to descendants.--
       ``(A) Death.--In the case of the death of a person to whom 
     an individual tobacco production permit has been issued under 
     this section, the permit shall transfer to the surviving 
     spouse of the person or, if there is no surviving spouse, to 
     surviving direct descendants of the person.
       ``(B) Temporary inability to farm.--In the case of the 
     death of a person to whom an individual tobacco production 
     permit has been issued under this section and whose 
     descendants are temporarily unable to produce a crop of 
     tobacco, the Secretary may hold the license in the name of 
     the descendants for a period of not more than 18 months.
       ``(3) Voluntary transfers.--A person that is eligible to 
     obtain an individual tobacco production permit under this 
     section may at any time transfer all or part of the permit to 
     the person's spouse or direct descendants that are actively 
     engaged in the production of tobacco.
       ``(h) Reserve.--
       ``(1) In general.--For each marketing year for which 
     individual tobacco production permits are in effect under 
     this section, the Secretary may establish a reserve from the 
     national marketing quota in a quantity equal to not more than 
     1 percent of the national marketing quota to be available 
     for--
       ``(A) making corrections of errors in individual acreage 
     limitations and individual marketing limitations;
       ``(B) adjusting inequities; and
       ``(C) establishing individual tobacco production permits 
     for new tobacco producers (except that not less than two-
     thirds of the reserve shall be for establishing such permits 
     for new tobacco producers).
       ``(2) Eligible persons.--To be eligible for a new 
     individual tobacco production permit, a producer must not 
     have been the principal producer of tobacco during the 
     immediately preceding 5 years.
       ``(3) Apportionment for new producers.--The part of the 
     reserve held for apportionment to new individual tobacco 
     producers shall be allotted on the basis of--
       ``(A) land, labor, and equipment available for the 
     production of tobacco;
       ``(B) crop rotation practices;
       ``(C) soil and other physical factors affecting the 
     production of tobacco; and
       ``(D) the past tobacco-producing experience of the 
     producer.
       ``(4) Permit yield.--The permit yield for any producer for 
     which a new individual tobacco production permit is 
     established shall be determined on the basis of available 
     productivity data for the land involved and yields for 
     similar farms in the same county.
       ``(i) Penalties.--
       ``(1) Production on other farms.--If any quantity of 
     tobacco is marketed as having been produced under an 
     individual acreage limitation or individual marketing 
     limitation assigned to a farm but was produced on a different 
     farm, the individual acreage limitation or individual 
     marketing limitation for the following marketing year shall 
     be forfeited.
       ``(2) False report.--If a person to which an individual 
     tobacco production permit is issued files, or aids or 
     acquiesces in the filing of, a false report with respect to 
     the assignment of an individual acreage limitation or 
     individual marketing limitation for a quantity of tobacco, 
     the individual acreage limitation or individual marketing 
     limitation for the following marketing year shall be 
     forfeited.
       ``(j) Marketing Penalties.--
       ``(1) In general.--When individual tobacco production 
     permits under this section are in effect, provisions with 
     respect to penalties

[[Page S5969]]

     for the marketing of excess tobacco and the other provisions 
     contained in section 314 shall apply in the same manner and 
     to the same extent as they would apply under section 317(g) 
     if farm marketing quotas were in effect.
       ``(2) Production on other farms.--If a producer falsely 
     identifies tobacco as having been produced on or marketed 
     from a farm to which an individual acreage limitation or 
     individual marketing limitation has been assigned, future 
     individual acreage limitations and individual marketing 
     limitations shall be forfeited.''.

     SEC. 1025. MODIFICATIONS IN FEDERAL TOBACCO PROGRAMS.

       (a) Program Referenda.--Section 312(c) of the Agricultural 
     Adjustment Act of 1938 (7 U.S.C. 1312(c)) is amended--
       (1) by striking ``(c) Within thirty'' and inserting the 
     following:
       ``(c) Referenda on Quotas.--
       ``(1) In general.--Not later than 30''; and
       (2) by adding at the end the following:
       ``(2) Referenda on program changes.--
       ``(A) In general.--In the case of any type of tobacco for 
     which marketing quotas are in effect, on the receipt of a 
     petition from more than 5 percent of the producers of that 
     type of tobacco in a State, the Secretary shall conduct a 
     statewide referendum on any proposal related to the lease and 
     transfer of tobacco quota within a State requested by the 
     petition that is authorized under this part.
       ``(B) Approval of proposals.--If a majority of producers of 
     the type of tobacco in the State approve a proposal in a 
     referendum conducted under subparagraph (A), the Secretary 
     shall implement the proposal in a manner that applies to all 
     producers and quota holders of that type of tobacco in the 
     State.''.
       (b) Purchase Requirements.--Section 320B of the 
     Agricultural Adjustment Act of 1938 (7 U.S.C. 1314h) is 
     amended--
       (1) in subsection (c)--
       (A) by striking ``(c) The amount'' and inserting ``(c) 
     Amount of Penalty.--For the 1998 and subsequent marketing 
     years, the amount''; and
       (B) by striking paragraph (1) and inserting the following:
       ``(1) 105 percent of the average market price for the type 
     of tobacco involved during the preceding marketing year; 
     and''.
       (c) Elimination of Tobacco Marketing Assessment.--
       (1) In general.--Section 106 of the Agricultural Act of 
     1949 (7 U.S.C. 1445) is amended by striking subsection (g).
       (2) Conforming amendment.--Section 422(c) of the Uruguay 
     Round Agreements Act (Public Law 103-465; 7 U.S.C. 1445 note) 
     is amended by striking ``section 106(g), 106A, or 106B of the 
     Agricultural Act of 1949 (7 U.S.C. 1445(g), 1445-1, or 1445-
     2)'' and inserting ``section 106A or 106B of the Agricultural 
     Act of 1949 (7 U.S.C. 1445-1, 1445-2)''.
       (d) Adjustment for Land Rental Costs.--Section 106 of the 
     Agricultural Act of 1949 (7 U.S.C. 1445) is amended by adding 
     at the end the following:
       ``(h) Adjustment for Land Rental Costs.--For each of the 
     1999 and 2000 marketing years for flue-cured tobacco, after 
     consultation with producers, State farm organizations and 
     cooperative associations, the Secretary shall make an 
     adjustment in the price support level for flue-cured tobacco 
     equal to the annual change in the average cost per pound to 
     flue-cured producers, as determined by the Secretary, under 
     agreements through which producers rent land to produce flue-
     cured tobacco.''.
       (e) Fire-Cured and Dark Air-Cured Tobacco Programs.--
       (1) Limitation on transfers.--Section 318(g) of the 
     Agricultural Adjustment Act of 1938 (7 U.S.C. 13l4d(g)) is 
     amended--
       (A) by striking ``ten'' and inserting ``30''; and
       (B) by inserting ``during any crop year'' after 
     ``transferred to any farm''.
       (2) Loss of allotment or quota through underplanting.--
     Section 318 of the Agricultural Adjustment Act of 1938 (7 
     U.S.C. 1314d) is amended by adding at the end the following:
       ``(k) Loss of Allotment or Quota Through Underplanting.--
     Effective for the 1999 and subsequent marketing years, no 
     acreage allotment or acreage-poundage quota, other than a new 
     marketing quota, shall be established for a farm on which no 
     fire-cured or dark air-cured tobacco was planted or 
     considered planted during at least 2 of the 3 crop years 
     immediately preceding the crop year for which the acreage 
     allotment or acreage-poundage quota would otherwise be 
     established.''.
       (f) Expansion of Types of Tobacco Subject to No Net Cost 
     Assessment.--
       (1) No net cost tobacco fund.--Section 106A(d)(1)(A) of the 
     Agricultural Act of 1949 (7 U.S.C. 1445-1(d)(1)(A)) is 
     amended--
       (A) in clause (ii), by inserting after ``Burley quota 
     tobacco'' the following: ``and fire-cured and dark air-cured 
     quota tobacco''; and
       (B) in clause (iii)--
       (i) in the matter preceding subclause (I), by striking 
     ``Flue-cured or Burley tobacco'' and inserting ``each kind of 
     tobacco for which price support is made available under this 
     Act, and each kind of like tobacco,''; and
       (ii) by striking subclause (II) and inserting the 
     following:

       ``(II) the sum of the amount of the per pound producer 
     contribution and purchaser assessment (if any) for the kind 
     of tobacco payable under clauses (i) and (ii); and''.

       (2) No net cost tobacco account.--Section 106B(d)(1) of the 
     Agricultural Act of 1949 (7 U.S.C. 1445-2(d)(1)) is amended--
       (A) in subparagraph (B), by inserting after ``Burley quota 
     tobacco'' the following: ``and fire-cured and dark air-cured 
     tobacco''; and
       (B) in subparagraph (C), by striking ``Flue-cured and 
     Burley tobacco'' and inserting ``each kind of tobacco for 
     which price support is made available under this Act, and 
     each kind of like tobacco,''.
          Subtitle C--Farmer and Worker Transition Assistance

     SEC. 1031. TOBACCO WORKER TRANSITION PROGRAM.

       (a) Group Eligibility Requirements.--
       (1) Criteria.--A group of workers (including workers in any 
     firm or subdivision of a firm involved in the manufacture, 
     processing, or warehousing of tobacco or tobacco products) 
     shall be certified as eligible to apply for adjustment 
     assistance under this section pursuant to a petition filed 
     under subsection (b) if the Secretary of Labor determines 
     that a significant number or proportion of the workers in the 
     workers' firm or an appropriate subdivision of the firm have 
     become totally or partially separated, or are threatened to 
     become totally or partially separated, and--
       (A) the sales or production, or both, of the firm or 
     subdivision have decreased absolutely; and
       (B) the implementation of the national tobacco settlement 
     contributed importantly to the workers' separation or threat 
     of separation and to the decline in the sales or production 
     of the firm or subdivision.
       (2) Definition of contributed importantly.--In paragraph 
     (1)(B), the term ``contributed importantly'' means a cause 
     that is important but not necessarily more important than any 
     other cause.
       (3) Regulations.--The Secretary shall issue regulations 
     relating to the application of the criteria described in 
     paragraph (1) in making preliminary findings under subsection 
     (b) and determinations under subsection (c).
       (b) Preliminary Findings and Basic Assistance.--
       (1) Filing of petitions.--A petition for certification of 
     eligibility to apply for adjustment assistance under this 
     section may be filed by a group of workers (including workers 
     in any firm or subdivision of a firm involved in the 
     manufacture, processing, or warehousing of tobacco or tobacco 
     products) or by their certified or recognized union or other 
     duly authorized representative with the Governor of the State 
     in which the workers' firm or subdivision thereof is located.
       (2) Findings and assistance.--On receipt of a petition 
     under paragraph (1), the Governor shall--
       (A) notify the Secretary that the Governor has received the 
     petition;
       (B) within 10 days after receiving the petition--
       (i) make a preliminary finding as to whether the petition 
     meets the criteria described in subsection (a)(1); and
       (ii) transmit the petition, together with a statement of 
     the finding under clause (i) and reasons for the finding, to 
     the Secretary for action under subsection (c); and
       (C) if the preliminary finding under subparagraph (B)(i) is 
     affirmative, ensure that rapid response and basic 
     readjustment services authorized under other Federal laws are 
     made available to the workers.
       (c) Review of Petitions by Secretary; Certifications.--
       (1) In general.--The Secretary, within 30 days after 
     receiving a petition under subsection (b)(2)(B)(ii), shall 
     determine whether the petition meets the criteria described 
     in subsection (a)(1). On a determination that the petition 
     meets the criteria, the Secretary shall issue to workers 
     covered by the petition a certification of eligibility to 
     apply for the assistance described in subsection (d).
       (2) Denial of certification.--On the denial of a 
     certification with respect to a petition under paragraph (1), 
     the Secretary shall review the petition in accordance with 
     the requirements of other applicable assistance programs to 
     determine if the workers may be certified under the other 
     programs.
       (d) Comprehensive Assistance.--
       (1) In general.--Workers covered by a certification issued 
     by the Secretary under subsection (c)(1) shall be provided 
     with benefits and services described in paragraph (2) in the 
     same manner and to the same extent as workers covered under a 
     certification under subchapter A of title II of the Trade Act 
     of 1974 (19 U.S.C. 2271 et seq.), except that the total 
     amount of payments under this section for any fiscal year 
     shall not exceed $25,000,000.
       (2) Benefits and services.--The benefits and services 
     described in this paragraph are the following:
       (A) Employment services of the type described in section 
     235 of the Trade Act of 1974 (19 U.S.C. 2295).
       (B) Training described in section 236 of the Trade Act of 
     1974 (19 U.S.C. 2296), except that notwithstanding the 
     provisions of section 236(a)(2)(A) of that Act, the total 
     amount of payments for training under this section for any 
     fiscal year shall not exceed $12,500,000.
       (C) Tobacco worker readjustment allowances, which shall be 
     provided in the same manner as trade readjustment allowances 
     are provided under part I of subchapter B of chapter 2 of 
     title II of the Trade Act of 1974 (19 U.S.C. 2291 et seq.), 
     except that--
       (i) the provisions of sections 231(a)(5)(C) and 231(c) of 
     that Act (19 U.S.C. 2291(a)(5)(C), 2291(c)), authorizing the 
     payment of trade readjustment allowances on a finding that it 
     is

[[Page S5970]]

     not feasible or appropriate to approve a training program for 
     a worker, shall not be applicable to payment of allowances 
     under this section; and
       (ii) notwithstanding the provisions of section 233(b) of 
     that Act (19 U.S.C. 2293(b)), in order for a worker to 
     qualify for tobacco readjustment allowances under this 
     section, the worker shall be enrolled in a training program 
     approved by the Secretary of the type described in section 
     236(a) of that Act (19 U.S.C. 2296(a)) by the later of--

       (I) the last day of the 16th week of the worker's initial 
     unemployment compensation benefit period; or
       (II) the last day of the 6th week after the week in which 
     the Secretary issues a certification covering the worker

     .In cases of extenuating circumstances relating to enrollment 
     of a worker in a training program under this section, the 
     Secretary may extend the time for enrollment for a period of 
     not to exceed 30 days.
       (D) Job search allowances of the type described in section 
     237 of the Trade Act of 1974 (19 U.S.C. 2297).
       (E) Relocation allowances of the type described in section 
     238 of the Trade Act of 1974 (19 U.S.C. 2298).
       (e) Ineligibility of Individuals Receiving Payments for 
     Lost Tobacco Quota.--No benefits or services may be provided 
     under this section to any individual who has received 
     payments for lost tobacco quota under section 1021.
       (f) Funding.--Of the amounts appropriated to carry out this 
     title, the Secretary may use not to exceed $25,000,000 for 
     each of fiscal years 1999 through 2008 to provide assistance 
     under this section.
       (g) Effective Date.--This section shall take effect on the 
     date that is the later of--
       (1) October l, 1998; or
       (2) the date of enactment of this Act.
       (h) Termination Date.--No assistance, vouchers, allowances, 
     or other payments may be provided under this section after 
     the date that is the earlier of--
       (1) the date that is 10 years after the effective date of 
     this section under subsection (g); or
       (2) the date on which legislation establishing a program 
     providing dislocated workers with comprehensive assistance 
     substantially similar to the assistance provided by this 
     section becomes effective.

     SEC. 1032. FARMER OPPORTUNITY GRANTS.

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

                 ``Subpart 9--Farmer Opportunity Grants

     ``SEC. 420D. STATEMENT OF PURPOSE.

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

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

       ``(a) Program Authority and Method of Distribution.--
       ``(1) Program authority.--From amounts made available under 
     section 1011(d)(5) of the LEAF Act, the Secretary, during the 
     period beginning July 1, 1999, and ending September 30, 2024, 
     shall pay to each eligible institution such sums as may be 
     necessary to pay to each eligible student (determined in 
     accordance with section 420F) for each academic year during 
     which that student is in attendance at an institution of 
     higher education, as an undergraduate, a farmer opportunity 
     grant in the amount for which that student is eligible, as 
     determined pursuant to subsection (b). Not less than 85 
     percent of the sums shall be advanced to eligible 
     institutions prior to the start of each payment period and 
     shall be based on an amount requested by the institution as 
     needed to pay eligible students, except that this sentence 
     shall not be construed to limit the authority of the 
     Secretary to place an institution on a reimbursement system 
     of payment.
       ``(2) Construction.--Nothing in this section shall be 
     construed to prohibit the Secretary from paying directly to 
     students, in advance of the beginning of the academic term, 
     an amount for which the students are eligible, in cases where 
     the eligible institution elects not to participate in the 
     disbursement system required by paragraph (1).
       ``(3) Designation.--Grants made under this subpart shall be 
     known as `farmer opportunity grants'.
       ``(b) Amount of Grants.--
       ``(1) Amounts.--
       ``(A) In general.--The amount of the grant for a student 
     eligible under this subpart shall be--
       ``(i) $1,700 for each of the academic years 1999-2000 
     through 2003-2004;
       ``(ii) $2,000 for each of the academic years 2004-2005 
     through 2008-2009;
       ``(iii) $2,300 for each of the academic years 2009-2010 
     through 2013-2014;
       ``(iv) $2,600 for each of the academic years 2014-2015 
     through 2018-2019; and
       ``(v) $2,900 for each of the academic years 2019-2020 
     through 2023-2024.
       ``(B) Part-time rule.--In any case where a student attends 
     an institution of higher education on less than a full-time 
     basis (including a student who attends an institution of 
     higher education on less than a half-time basis) during any 
     academic year, the amount of the grant for which that student 
     is eligible shall be reduced in proportion to the degree to 
     which that student is not so attending on a full-time basis, 
     in accordance with a schedule of reductions established by 
     the Secretary for the purposes of this subparagraph, computed 
     in accordance with this subpart. The schedule of reductions 
     shall be established by regulation and published in the 
     Federal Register.
       ``(2) Maximum.--No grant under this subpart shall exceed 
     the cost of attendance (as described in section 472) at the 
     institution at which that student is in attendance. If, with 
     respect to any student, it is determined that the amount of a 
     grant exceeds the cost of attendance for that year, the 
     amount of the grant shall be reduced to an amount equal to 
     the cost of attendance at the institution.
       ``(3) Prohibition.--No grant shall be awarded under this 
     subpart to any individual who is incarcerated in any Federal, 
     State, or local penal institution.
       ``(c) Period of Eligibility for Grants.--
       ``(1) In general.--The period during which a student may 
     receive grants shall be the period required for the 
     completion of the first undergraduate baccalaureate course of 
     study being pursued by that student at the institution at 
     which the student is in attendance, except that any period 
     during which the student is enrolled in a noncredit or 
     remedial course of study as described in paragraph (2) shall 
     not be counted for the purpose of this paragraph.
       ``(2) Construction.--Nothing in this section shall be 
     construed to--
       ``(A) exclude from eligibility courses of study that are 
     noncredit or remedial in nature and that are determined by 
     the institution to be necessary to help the student be 
     prepared for the pursuit of a first undergraduate 
     baccalaureate degree or certificate or, in the case of 
     courses in English language instruction, to be necessary to 
     enable the student to utilize already existing knowledge, 
     training, or skills; and
       ``(B) exclude from eligibility programs of study abroad 
     that are approved for credit by the home institution at which 
     the student is enrolled.
       ``(3) Prohibition.--No student is entitled to receive 
     farmer opportunity grant payments concurrently from more than 
     1 institution or from the Secretary and an institution.
       ``(d) Applications for Grants.--
       ``(1) In general.--The Secretary shall from time to time 
     set dates by which students shall file applications for 
     grants under this subpart. The filing of applications under 
     this subpart shall be coordinated with the filing of 
     applications under section 401(c).
       ``(2) Information and assurances.--Each student desiring a 
     grant for any year shall file with the Secretary an 
     application for the grant containing such information and 
     assurances as the Secretary may deem necessary to enable the 
     Secretary to carry out the Secretary's functions and 
     responsibilities under this subpart.
       ``(e) Distribution of Grants to Students.--Payments under 
     this section shall be made in accordance with regulations 
     promulgated by the Secretary for such purpose, in such manner 
     as will best accomplish the purpose of this section. Any 
     disbursement allowed to be made by crediting the student's 
     account shall be limited to tuition and fees and, in the case 
     of institutionally owned housing, room and board. The student 
     may elect to have the institution provide other such goods 
     and services by crediting the student's account.
       ``(f) Insufficient Funding.--If, for any fiscal year, the 
     funds made available to carry out this subpart are 
     insufficient to satisfy fully all grants for students 
     determined to be eligible under section 420F, the amount of 
     the grant provided under subsection (b) shall be reduced on a 
     pro rata basis among all eligible students.
       ``(g) Treatment of Institutions and Students Under Other 
     Laws.--Any institution of higher education that enters into 
     an agreement with the Secretary to disburse to students 
     attending that institution the amounts those students are 
     eligible to receive under this subpart shall not be deemed, 
     by virtue of the agreement, to be a contractor maintaining a 
     system of records to accomplish a function of the Secretary. 
     Recipients of farmer opportunity grants shall not be 
     considered to be individual grantees for purposes of the 
     Drug-Free Workplace Act of 1988 (41 U.S.C. 701 et seq.).

     ``SEC. 420F. STUDENT ELIGIBILITY.

       ``(a) In General.--In order to receive any grant under this 
     subpart, a student shall--
       ``(1) be a member of a tobacco farm family in accordance 
     with subsection (b);
       ``(2) be enrolled or accepted for enrollment in a degree, 
     certificate, or other program (including a program of study 
     abroad approved for credit by the eligible institution at 
     which the student is enrolled) leading to a recognized 
     educational credential at an institution of higher education 
     that is an eligible institution in accordance with section 
     487, and not be enrolled in an elementary or secondary 
     school;
       ``(3) if the student is presently enrolled at an 
     institution of higher education, be maintaining satisfactory 
     progress in the course of study the student is pursuing in 
     accordance with subsection (c);
       ``(4) not owe a refund on grants previously received at any 
     institution of higher education under this title, or be in 
     default on any loan from a student loan fund at any 
     institution provided for in part D, or a loan made, insured, 
     or guaranteed by the Secretary under this title for 
     attendance at any institution;
       ``(5) file with the institution of higher education that 
     the student intends to attend, or

[[Page S5971]]

     is attending, a document, that need not be notarized, but 
     that shall include--
       ``(A) a statement of educational purpose stating that the 
     money attributable to the grant will be used solely for 
     expenses related to attendance or continued attendance at the 
     institution; and
       ``(B) the student's social security number; and
       ``(6) be a citizen of the United States.
       ``(b) Tobacco Farm Families.--
       ``(1) In general.--For the purpose of subsection (a)(1), a 
     student is a member of a tobacco farm family if during 
     calendar year 1998 the student was--
       ``(A) an individual who--
       ``(i) is a participating tobacco producer (as defined in 
     section 1002 of the LEAF Act) who is a principal producer of 
     tobacco on a farm; or
       ``(ii) is otherwise actively engaged in the production of 
     tobacco;
       ``(B) a spouse, son, daughter, stepson, or stepdaughter of 
     an individual described in subparagraph (A);
       ``(C) an individual who was a dependent (within the meaning 
     of section 152 of the Internal Revenue Code of 1986) of an 
     individual described in subparagraph (A).
       ``(2) Administration.--On request, the Secretary of 
     Agriculture shall provide to the Secretary such information 
     as is necessary to carry out this subsection.
       ``(c) Satisfactory Progress.--
       ``(1) In general.--For the purpose of subsection (a)(3), a 
     student is maintaining satisfactory progress if--
       ``(A) the institution at which the student is in attendance 
     reviews the progress of the student at the end of each 
     academic year, or its equivalent, as determined by the 
     institution; and
       ``(B) the student has at least a cumulative C average or 
     its equivalent, or academic standing consistent with the 
     requirements for graduation, as determined by the 
     institution, at the end of the second such academic year.
       ``(2) Special rule.--Whenever a student fails to meet the 
     eligibility requirements of subsection (a)(3) as a result of 
     the application of this subsection and subsequent to that 
     failure the student has academic standing consistent with the 
     requirements for graduation, as determined by the 
     institution, for any grading period, the student may, subject 
     to this subsection, again be eligible under subsection (a)(3) 
     for a grant under this subpart.
       ``(3) Waiver.--Any institution of higher education at which 
     the student is in attendance may waive paragraph (1) or (2) 
     for undue hardship based on--
       ``(A) the death of a relative of the student;
       ``(B) the personal injury or illness of the student; or
       ``(C) special circumstances as determined by the 
     institution.
       ``(d) Students Who Are Not Secondary School Graduates.--In 
     order for a student who does not have a certificate of 
     graduation from a school providing secondary education, or 
     the recognized equivalent of the certificate, to be eligible 
     for any assistance under this subpart, the student shall meet 
     either 1 of the following standards:
       ``(1) Examination.--The student shall take an independently 
     administered examination and shall achieve a score, specified 
     by the Secretary, demonstrating that the student can benefit 
     from the education or training being offered. The examination 
     shall be approved by the Secretary on the basis of compliance 
     with such standards for development, administration, and 
     scoring as the Secretary may prescribe in regulations.
       ``(2) Determination.--The student shall be determined as 
     having the ability to benefit from the education or training 
     in accordance with such process as the State shall prescribe. 
     Any such process described or approved by a State for the 
     purposes of this section shall be effective 6 months after 
     the date of submission to the Secretary unless the Secretary 
     disapproves the process. In determining whether to approve or 
     disapprove the process, the Secretary shall take into account 
     the effectiveness of the process in enabling students without 
     secondary school diplomas or the recognized equivalent to 
     benefit from the instruction offered by institutions 
     utilizing the process, and shall also take into account the 
     cultural diversity, economic circumstances, and educational 
     preparation of the populations served by the institutions.
       ``(e) Special Rule for Correspondence Courses.--A student 
     shall not be eligible to receive a grant under this subpart 
     for a correspondence course unless the course is part of a 
     program leading to an associate, bachelor, or graduate 
     degree.
       ``(f) Courses Offered Through Telecommunications.--
       ``(1) Relation to correspondence courses.--A student 
     enrolled in a course of instruction at an eligible 
     institution of higher education (other than an institute or 
     school that meets the definition in section 521(4)(C) of the 
     Carl D. Perkins Vocational and Applied Technology Education 
     Act (20 U.S.C. 2471(4)(C))) that is offered in whole or in 
     part through telecommunications and leads to a recognized 
     associate, bachelor, or graduate degree conferred by the 
     institution shall not be considered to be enrolled in 
     correspondence courses unless the total amount of 
     telecommunications and correspondence courses at the 
     institution equals or exceeds 50 percent of the courses.
       ``(2) Restriction or reductions of financial aid.--A 
     student's eligibility to receive a grant under this subpart 
     may be reduced if a financial aid officer determines under 
     the discretionary authority provided in section 479A that 
     telecommunications instruction results in a substantially 
     reduced cost of attendance to the student.
       ``(3) Definition.--For the purposes of this subsection, the 
     term `telecommunications' means the use of television, audio, 
     or computer transmission, including open broadcast, closed 
     circuit, cable, microwave, or satellite, audio conferencing, 
     computer conferencing, or video cassettes or discs, except 
     that the term does not include a course that is delivered 
     using video cassette or disc recordings at the institution 
     and that is not delivered in person to other students of that 
     institution.
       ``(g) Study Abroad.--Nothing in this subpart shall be 
     construed to limit or otherwise prohibit access to study 
     abroad programs approved by the home institution at which a 
     student is enrolled. An otherwise eligible student who is 
     engaged in a program of study abroad approved for academic 
     credit by the home institution at which the student is 
     enrolled shall be eligible to receive a grant under this 
     subpart, without regard to whether the study abroad program 
     is required as part of the student's degree program.
       ``(h) Verification of Social Security Number.--The 
     Secretary, in cooperation with the Commissioner of Social 
     Security, shall verify any social security number provided by 
     a student to an eligible institution under subsection 
     (a)(5)(B) and shall enforce the following conditions:
       ``(1) Pending verification.--Except as provided in 
     paragraphs (2) and (3), an institution shall not deny, 
     reduce, delay, or terminate a student's eligibility for 
     assistance under this subpart because social security number 
     verification is pending.
       ``(2) Denial or termination.--If there is a determination 
     by the Secretary that the social security number provided to 
     an eligible institution by a student is incorrect, the 
     institution shall deny or terminate the student's eligibility 
     for any grant under this subpart until such time as the 
     student provides documented evidence of a social security 
     number that is determined by the institution to be correct.
       ``(3) Construction.--Nothing in this subsection shall be 
     construed to permit the Secretary to take any compliance, 
     disallowance, penalty, or other regulatory action against--
       ``(A) any institution of higher education with respect to 
     any error in a social security number, unless the error was a 
     result of fraud on the part of the institution; or
       ``(B) any student with respect to any error in a social 
     security number, unless the error was a result of fraud on 
     the part of the student.''.
                          Subtitle D--Immunity

     SEC. 1041. GENERAL IMMUNITY FOR TOBACCO PRODUCERS AND TOBACCO 
                   WAREHOUSE OWNERS.

       Notwithstanding any other provision of this title, a 
     participating tobacco producer, tobacco-related growers 
     association, or tobacco warehouse owner or employee may not 
     be subject to liability in any Federal or State court for any 
     cause of action resulting from the failure of any tobacco 
     product manufacturer, distributor, or retailer to comply with 
     the National Tobacco Policy and Youth Smoking Reduction Act.
                       Subtitle E--Applicability

     SEC. 1051. APPLICABILITY OF TITLE XV.

       Notwithstanding any other provision of this Act, title XV 
     of this Act shall have no force or effect.
                                 ______
                                 

                  FORD (AND OTHERS) AMENDMENT NO. 2627

  (Ordered to lie on the table.)
  Mr. FORD (for himself, Mr. Hollings, and Mr. Robb) submitted an 
amendment intended to be proposed by them to the bill, S. 1415, supra; 
as follows:

       On page 444, beginning with line 12, strike through the end 
     of the bill, and insert the following:
       (E) Secretary.--The term ``Secretary'' means the Secretary 
     of the Treasury, except where the context otherwise requires.
                                 ______
                                 

                  FORD (AND OTHERS) AMENDMENT NO. 2628

  (Ordered to lie on the table.)
  Mr. FORD (for himself, Mr. Hollings, and Mr. Robb) submitted an 
amendment intended to be proposed by them to amendment No. 2497 
proposed by Mr. Lugar to the bill, S. 1415, supra; as follows:

       In lieu of the matter proposed to be inserted, insert the 
     following:
           TITLE X--LONG-TERM ECONOMIC ASSISTANCE FOR FARMERS

     SEC. 1001. SHORT TITLE.

       This title may be cited as the ``Long-Term Economic 
     Assistance for Farmers Act'' or the ``LEAF Act''.

     SEC. 1002. DEFINITIONS.

       In this title:
       (1) Participating tobacco producer.--The term 
     ``participating tobacco producer'' means a quota holder, 
     quota lessee, or quota tenant.
       (2) Quota holder.--The term ``quota holder'' means an owner 
     of a farm on January 1,

[[Page S5972]]

     1998, for which a tobacco farm marketing quota or farm 
     acreage allotment was established under the Agricultural 
     Adjustment Act of 1938 (7 U.S.C. 1281 et seq.).
       (3) Quota lessee.--The term ``quota lessee'' means--
       (A) a producer that owns a farm that produced tobacco 
     pursuant to a lease and transfer to that farm of all or part 
     of a tobacco farm marketing quota or farm acreage allotment 
     established under the Agricultural Adjustment Act of 1938 (7 
     U.S.C. 1281 et seq.) for any of the 1995, 1996, or 1997 crop 
     years; or
       (B) a producer that rented land from a farm operator to 
     produce tobacco under a tobacco farm marketing quota or farm 
     acreage allotment established under the Agricultural 
     Adjustment Act of 1938 (7 U.S.C. 1281 et seq.) for any of the 
     1995, 1996, or 1997 crop years.
       (4) Quota tenant.--The term ``quota tenant'' means a 
     producer that--
       (A) is the principal producer, as determined by the 
     Secretary, of tobacco on a farm where tobacco is produced 
     pursuant to a tobacco farm marketing quota or farm acreage 
     allotment established under the Agricultural Adjustment Act 
     of 1938 (7 U.S.C. 1281 et seq.) for any of the 1995, 1996, or 
     1997 crop years; and
       (B) is not a quota holder or quota lessee.
       (5) Secretary.--The term ``Secretary'' means--
       (A) in subtitles A and B, the Secretary of Agriculture; and
       (B) in section 1031, the Secretary of Labor.
       (6) Tobacco product importer.--The term ``tobacco product 
     importer'' has the meaning given the term ``importer'' in 
     section 5702 of the Internal Revenue Code of 1986.
       (7) Tobacco product manufacturer.--
       (A) In general.--The term ``tobacco product manufacturer'' 
     has the meaning given the term ``manufacturer of tobacco 
     products'' in section 5702 of the Internal Revenue Code of 
     1986.
       (B) Exclusion.--The term ``tobacco product manufacturer'' 
     does not include a person that manufactures cigars or pipe 
     tobacco.
       (8) Tobacco warehouse owner.--The term ``tobacco warehouse 
     owner'' means a warehouseman that participated in an auction 
     market (as defined in the first section of the Tobacco 
     Inspection Act (7 U.S.C. 511)) during the 1998 marketing 
     year.
       (9) Flue-cured tobacco.--The term ``flue-cured tobacco'' 
     includes type 21 and type 37 tobacco.
              Subtitle A--Tobacco Community Revitalization

     SEC. 1011. AUTHORIZATION OF APPROPRIATIONS.

       There are appropriated and transferred to the Secretary for 
     each fiscal year such amounts from the National Tobacco Trust 
     Fund established by section 401, other than from amounts in 
     the State Litigation Settlement Account, as may be necessary 
     to carry out the provisions of this title.

     SEC. 1012. EXPENDITURES.

       The Secretary is authorized, subject to appropriations, to 
     make payments under--
       (1) section 1021 for payments for lost tobacco quota for 
     each of fiscal years 1999 through 2023, but not to exceed 
     $1,650,000,000 for any fiscal year except to the extent the 
     payments are made in accordance with subsection (d)(12) or 
     (e)(9) of section 1021;
       (2) section 1022 for industry payments for all costs of the 
     Department of Agriculture associated with the production of 
     tobacco;
       (3) section 1023 for tobacco community economic development 
     grants, but not to exceed--
       (A) $375,000,000 for each of fiscal years 1999 through 
     2008, less any amount required to be paid under section 1022 
     for the fiscal year; and
       (B) $450,000,000 for each of fiscal year 2009 through 2023, 
     less any amount required to be paid under section 1022 during 
     the fiscal year;
       (4) section 1031 for assistance provided under the tobacco 
     worker transition program, but not to exceed $25,000,000 for 
     any fiscal year; and
       (5) subpart 9 of part A of title IV of the Higher Education 
     Act of 1965 for farmer opportunity grants, but not to 
     exceed--
       (A) $42,500,000 for each of the academic years 1999-2000 
     through 2003-2004;
       (B) $50,000,000 for each of the academic years 2004-2005 
     through 2008-2009;
       (C) $57,500,000 for each of the academic years 2009-2010 
     through 2013-2014;
       (D) $65,000,000 for each of the academic years 2014-2015 
     through 2018-2019; and
       (E) $72,500,000 for each of the academic years 2019-2020 
     through 2023-2024.

     SEC. 1013. BUDGETARY TREATMENT.

       This subtitle constitutes budget authority in advance of 
     appropriations Acts and represents the obligation of the 
     Federal Government to provide payments to States and eligible 
     persons in accordance with this title.
            Subtitle B--Tobacco Market Transition Assistance

     SEC. 1021. PAYMENTS FOR LOST TOBACCO QUOTA.

       (a) In General.--Beginning with the 1999 marketing year, 
     the Secretary shall make payments for lost tobacco quota to 
     eligible quota holders, quota lessees, and quota tenants as 
     reimbursement for lost tobacco quota.
       (b) Eligibility.--To be eligible to receive payments under 
     this section, a quota holder, quota lessee, or quota tenant 
     shall--
       (1) 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 make the demonstration required under paragraph (2); and
       (2) demonstrate to the satisfaction of the Secretary that, 
     with respect to the 1997 marketing year--
       (A) the producer was a quota holder and realized income (or 
     would have realized income, as determined by the Secretary, 
     but for a medical hardship or crop disaster during the 1997 
     marketing year) from the production of tobacco through--
       (i) the active production of tobacco;
       (ii) the lease and transfer of tobacco quota to another 
     farm;
       (iii) the rental of all or part of the farm of the quota 
     holder, including the right to produce tobacco, to another 
     tobacco producer; or
       (iv) the hiring of a quota tenant to produce tobacco;
       (B) the producer was a quota lessee; or
       (C) the producer was a quota tenant.
       (c) Base Quota Level.--
       (1) In general.--The Secretary shall determine, for each 
     quota holder, quota lessee, and quota tenant, the base quota 
     level for the 1995 through 1997 marketing years.
       (2) Quota holders.--The base quota level for a quota holder 
     shall be equal to the average tobacco farm marketing quota 
     established for the farm owned by the quota holder for the 
     1995 through 1997 marketing years.
       (3) Quota lessees.--The base quota level for a quota lessee 
     shall be equal to--
       (A) 50 percent of the average number of pounds of tobacco 
     quota established for the farm for the 1995 through 1997 
     marketing years--
       (i) that was leased and transferred to a farm owned by the 
     quota lessee; or
       (ii) that was rented to the quota lessee for the right to 
     produce the tobacco; less
       (B) 25 percent of the average number of pounds of tobacco 
     quota described in subparagraph (A) for which a quota tenant 
     was the principal producer of the tobacco quota.
       (4) Quota tenants.--The base quota level for a quota tenant 
     shall be equal to the sum of--
       (A) 50 percent of the average number of pounds of tobacco 
     quota established for a farm for the 1995 through 1997 
     marketing years--
       (i) that was owned by a quota holder; and
       (ii) for which the quota tenant was the principal producer 
     of the tobacco on the farm; and
       (B) 25 percent of the average number of pounds of tobacco 
     quota for the 1995 through 1997 marketing years--
       (i)(I) that was leased and transferred to a farm owned by 
     the quota lessee; or
       (II) for which the rights to produce the tobacco were 
     rented to the quota lessee; and
       (ii) for which the quota tenant was the principal producer 
     of the tobacco on the farm.
       (5) Marketing quotas other than poundage quotas.--
       (A) In general.--For each type of tobacco for which there 
     is a marketing quota or allotment (on an acreage basis), the 
     base quota level for each quota holder, quota lessee, or 
     quota tenant shall be determined in accordance with this 
     subsection (based on a poundage conversion) by multiplying--
       (i) the average tobacco farm marketing quota or allotment 
     for the 1995 through 1997 marketing years; and
       (ii) the average yield per acre for the farm for the type 
     of tobacco for the marketing years.
       (B) Yields not available.--If the average yield per acre is 
     not available for a farm, the Secretary shall calculate the 
     base quota for the quota holder, quota lessee, or quota 
     tenant (based on a poundage conversion) by determining the 
     amount equal to the product obtained by multiplying--
       (i) the average tobacco farm marketing quota or allotment 
     for the 1995 through 1997 marketing years; and
       (ii) the average county yield per acre for the county in 
     which the farm is located for the type of tobacco for the 
     marketing years.
       (d) Payments for Lost Tobacco Quota for Types of Tobacco 
     Other Than Flue-Cured Tobacco.--
       (1) Allocation of funds.--Of the amounts made available 
     under section 1011(d)(1) for payments for lost tobacco quota, 
     the Secretary shall make available for payments under this 
     subsection an amount that bears the same ratio to the amounts 
     made available as--
       (A) the sum of all national marketing quotas for all types 
     of tobacco other than flue-cured tobacco during the 1995 
     through 1997 marketing years; bears to
       (B) the sum of all national marketing quotas for all types 
     of tobacco during the 1995 through 1997 marketing years.
       (2) Option to relinquish quota.--
       (A) In general.--Each quota holder, for types of tobacco 
     other than flue-cured tobacco, shall be given the option to 
     relinquish the farm marketing quota or farm acreage allotment 
     of the quota holder in exchange for a payment made under 
     paragraph (3).
       (B) Notification.--A quota holder shall give notification 
     of the intention of the quota holder to exercise the option 
     at such time and in such manner as the Secretary may require, 
     but not later than January 15, 1999.
       (3) Payments for lost tobacco quota to quota holders 
     exercising options to relinquish quota.--
       (A) In general.--Subject to subparagraph (E), for each of 
     fiscal years 1999 through 2008, the Secretary shall make 
     annual payments for lost tobacco quota to each quota holder

[[Page S5973]]

     that has relinquished the farm marketing quota or farm 
     acreage allotment of the quota holder under paragraph (2).
       (B) Amount.--The amount of a payment made to a quota holder 
     described in subparagraph (A) for a marketing year shall 
     equal \1/10\ of the lifetime limitation established under 
     subparagraph (E).
       (C) Timing.--The Secretary shall begin making annual 
     payments under this paragraph for the marketing year in which 
     the farm marketing quota or farm acreage allotment is 
     relinquished.
       (D) Additional payments.--The Secretary may increase annual 
     payments under this paragraph in accordance with paragraph 
     (7)(E) to the extent that funding is available.
       (E) Lifetime limitation on payments.--The total amount of 
     payments made under this paragraph to a quota holder shall 
     not exceed the product obtained by multiplying the base quota 
     level for the quota holder by $8 per pound.
       (4) Reissuance of quota.--
       (A) Reallocation to lessee or tenant.--If a quota holder 
     exercises an option to relinquish a tobacco farm marketing 
     quota or farm acreage allotment under paragraph (2), a quota 
     lessee or quota tenant that was the primary producer during 
     the 1997 marketing year of tobacco pursuant to the farm 
     marketing quota or farm acreage allotment, as determined by 
     the Secretary, shall be given the option of having an 
     allotment of the farm marketing quota or farm acreage 
     allotment reallocated to a farm owned by the quota lessee or 
     quota tenant.
       (B) Conditions for reallocation.--
       (i) Timing.--A quota lessee or quota tenant that is given 
     the option of having an allotment of a farm marketing quota 
     or farm acreage allotment reallocated to a farm owned by the 
     quota lessee or quota tenant under subparagraph (A) shall 
     have 1 year from the date on which a farm marketing quota or 
     farm acreage allotment is relinquished under paragraph (2) to 
     exercise the option.
       (ii) Limitation on acreage allotment.--In the case of a 
     farm acreage allotment, the acreage allotment determined for 
     any farm subsequent to any reallocation under subparagraph 
     (A) shall not exceed 50 percent of the acreage of cropland of 
     the farm owned by the quota lessee or quota tenant.
       (iii) Limitation on marketing quota.--In the case of a farm 
     marketing quota, the marketing quota determined for any farm 
     subsequent to any reallocation under subparagraph (A) shall 
     not exceed an amount determined by multiplying--

       (I) the average county farm yield, as determined by the 
     Secretary; and
       (II) 50 percent of the acreage of cropland of the farm 
     owned by the quota lessee or quota tenant.

       (C) Eligibility of lessee or tenant for payments.--If a 
     farm marketing quota or farm acreage allotment is reallocated 
     to a quota lessee or quota tenant under subparagraph (A)--
       (i) the quota lessee or quota tenant shall not be eligible 
     for any additional payments under paragraph (5) or (6) as a 
     result of the reallocation; and
       (ii) the base quota level for the quota lessee or quota 
     tenant shall not be increased as a result of the 
     reallocation.
       (D) Reallocation to quota holders within same county or 
     state.--
       (i) In general.--Except as provided in clause (ii), if 
     there was no quota lessee or quota tenant for the farm 
     marketing quota or farm acreage allotment for a type of 
     tobacco, or if no quota lessee or quota tenant exercises an 
     option of having an allotment of the farm marketing quota or 
     farm acreage allotment for a type of tobacco reallocated, the 
     Secretary shall reapportion the farm marketing quota or farm 
     acreage allotment among the remaining quota holders for the 
     type of tobacco within the same county.
       (ii) Cross-county leasing.--In a State in which cross-
     county leasing is authorized pursuant to section 319(l) of 
     the Agricultural Adjustment Act of 1938 (7 U.S.C. 1314e(l)), 
     the Secretary shall reapportion the farm marketing quota 
     among the remaining quota holders for the type of tobacco 
     within the same State.
       (iii) Eligibility of quota holder for payments.--If a farm 
     marketing quota is reapportioned to a quota holder under this 
     subparagraph--

       (I) the quota holder shall not be eligible for any 
     additional payments under paragraph (5) or (6) as a result of 
     the reapportionment; and
       (II) the base quota level for the quota holder shall not be 
     increased as a result of the reapportionment.

       (E) Special rule for tenant of leased tobacco.--If a quota 
     holder exercises an option to relinquish a tobacco farm 
     marketing quota or farm acreage allotment under paragraph 
     (2), the farm marketing quota or farm acreage allotment shall 
     be divided evenly between, and the option of reallocating the 
     farm marketing quota or farm acreage allotment shall be 
     offered in equal portions to, the quota lessee and to the 
     quota tenant, if--
       (i) during the 1997 marketing year, the farm marketing 
     quota or farm acreage allotment was leased and transferred to 
     a farm owned by the quota lessee; and
       (ii) the quota tenant was the primary producer, as 
     determined by the Secretary, of tobacco pursuant to the farm 
     marketing quota or farm acreage allotment.
       (5) Payments for lost tobacco quota to quota holders.--
       (A) In general.--Except as otherwise provided in this 
     subsection, during any marketing year in which the national 
     marketing quota for a type of tobacco is less than the 
     average national marketing quota for the 1995 through 1997 
     marketing years, the Secretary shall make payments for lost 
     tobacco quota to each quota holder, for types of tobacco 
     other than flue-cured tobacco, that is eligible under 
     subsection (b), and has not exercised an option to relinquish 
     a tobacco farm marketing quota or farm acreage allotment 
     under paragraph (2), in an amount that is equal to the 
     product obtained by multiplying--
       (i) the number of pounds by which the basic farm marketing 
     quota (or poundage conversion) is less than the base quota 
     level for the quota holder; and
       (ii) $4 per pound.
       (B) Poundage conversion for marketing quotas other than 
     poundage quotas.--
       (i) In general.--For each type of tobacco for which there 
     is a marketing quota or allotment (on an acreage basis), the 
     poundage conversion for each quota holder during a marketing 
     year shall be determined by multiplying--

       (I) the basic farm acreage allotment for the farm for the 
     marketing year; and
       (II) the average yield per acre for the farm for the type 
     of tobacco.

       (ii) Yield not available.--If the average yield per acre is 
     not available for a farm, the Secretary shall calculate the 
     poundage conversion for each quota holder during a marketing 
     year by multiplying--

       (I) the basic farm acreage allotment for the farm for the 
     marketing year; and
       (II) the average county yield per acre for the county in 
     which the farm is located for the type of tobacco.

       (6) Payments for lost tobacco quota to quota lessees and 
     quota tenants.--Except as otherwise provided in this 
     subsection, during any marketing year in which the national 
     marketing quota for a type of tobacco is less than the 
     average national marketing quota for the type of tobacco for 
     the 1995 through 1997 marketing years, the Secretary shall 
     make payments for lost tobacco quota to each quota lessee and 
     quota tenant, for types of tobacco other than flue-cured 
     tobacco, that is eligible under subsection (b) in an amount 
     that is equal to the product obtained by multiplying--
       (A) the percentage by which the national marketing quota 
     for the type of tobacco is less than the average national 
     marketing quota for the type of tobacco for the 1995 through 
     1997 marketing years;
       (B) the base quota level for the quota lessee or quota 
     tenant; and
       (C) $4 per pound.
       (7) Lifetime limitation on payments.--Except as otherwise 
     provided in this subsection, the total amount of payments 
     made under this subsection to a quota holder, quota lessee, 
     or quota tenant during the lifetime of the quota holder, 
     quota lessee, or quota tenant shall not exceed the product 
     obtained by multiplying--
       (A) the base quota level for the quota holder, quota 
     lessee, or quota tenant; and
       (B) $8 per pound.
       (8) Limitations on aggregate annual payments.--
       (A) In general.--Except as otherwise provided in this 
     paragraph, the total amount payable under this subsection for 
     any marketing year shall not exceed the amount made available 
     under paragraph (1).
       (B) Accelerated payments.--Paragraph (1) shall not apply if 
     accelerated payments for lost tobacco quota are made in 
     accordance with paragraph (12).
       (C) Reductions.--If the sum of the amounts determined under 
     paragraphs (3), (5), and (6) for a marketing year exceeds the 
     amount made available under paragraph (1), the Secretary 
     shall make a pro rata reduction in the amounts payable under 
     paragraphs (5) and (6) to quota holders, quota lessees, and 
     quota tenants under this subsection to ensure that the total 
     amount of payments for lost tobacco quota does not exceed the 
     amount made available under paragraph (1).
       (D) Rollover of payments for lost tobacco quota.--Subject 
     to subparagraph (A), if the Secretary makes a reduction in 
     accordance with subparagraph (C), the amount of the reduction 
     shall be applied to the next marketing year and added to the 
     payments for lost tobacco quota for the marketing year.
       (E) Additional payments to quota holders exercising option 
     to relinquish quota.--If the amount made available under 
     paragraph (1) exceeds the sum of the amounts determined under 
     paragraphs (3), (5), and (6) for a marketing year, the 
     Secretary shall distribute the amount of the excess pro rata 
     to quota holders that have exercised an option to relinquish 
     a tobacco farm marketing quota or farm acreage allotment 
     under paragraph (2) by increasing the amount payable to each 
     such holder under paragraph (3).
       (9) Subsequent sale and transfer of quota.--Effective 
     beginning with the 1999 marketing year, on the sale and 
     transfer of a farm marketing quota or farm acreage allotment 
     under section 316(g) or 319(g) of the Agricultural Adjustment 
     Act of 1938 (7 U.S.C. 1314b(g), 1314e(g))--
       (A) the person that sold and transferred the quota or 
     allotment shall have--
       (i) the base quota level attributable to the person reduced 
     by the base quota level attributable to the quota that is 
     sold and transferred; and
       (ii) the lifetime limitation on payments established under 
     paragraph (7) attributable to

[[Page S5974]]

     the person reduced by the product obtained by multiplying--

       (I) the base quota level attributable to the quota; and
       (II) $8 per pound; and

       (B) if the quota or allotment has never been relinquished 
     by a previous quota holder under paragraph (2), the person 
     that acquired the quota shall have--
       (i) the base quota level attributable to the person 
     increased by the base quota level attributable to the quota 
     that is sold and transferred; and
       (ii) the lifetime limitation on payments established under 
     paragraph (7) attributable to the person--

       (I) increased by the product obtained by multiplying--

       (aa) the base quota level attributable to the quota; and
       (bb) $8 per pound; but

       (II) decreased by any payments under paragraph (5) for lost 
     tobacco quota previously made that are attributable to the 
     quota that is sold and transferred.

       (10) Sale or transfer of farm.--On the sale or transfer of 
     ownership of a farm that is owned by a quota holder, the base 
     quota level established under subsection (c), the right to 
     payments under paragraph (5), and the lifetime limitation on 
     payments established under paragraph (7) shall transfer to 
     the new owner of the farm to the same extent and in the same 
     manner as those provisions applied to the previous quota 
     holder.
       (11) Death of quota lessee or quota tenant.--If a quota 
     lessee or quota tenant that is entitled to payments under 
     this subsection dies and is survived by a spouse or 1 or more 
     dependents, the right to receive the payments shall transfer 
     to the surviving spouse or, if there is no surviving spouse, 
     to the surviving dependents in equal shares.
       (12) Acceleration of payments.--
       (A) In general.--On the occurrence of any of the events 
     described in subparagraph (B), the Secretary shall make an 
     accelerated lump sum payment for lost tobacco quota as 
     established under paragraphs (5) and (6) to each quota 
     holder, quota lessee, and quota tenant for any affected type 
     of tobacco in accordance with subparagraph (C).
       (B) Triggering events.--The Secretary shall make 
     accelerated payments under subparagraph (A) if after the date 
     of enactment of this Act--
       (i) subject to subparagraph (D), for 3 consecutive 
     marketing years, the national marketing quota or national 
     acreage allotment for a type of tobacco is less than 50 
     percent of the national marketing quota or national acreage 
     allotment for the type of tobacco for the 1998 marketing 
     year; or
       (ii) Congress repeals or makes ineffective, directly or 
     indirectly, any provision of--

       (I) section 316 of the Agricultural Adjustment Act of 1938 
     (7 U.S.C. 1314b);
       (II) section 319 of the Agricultural Adjustment Act of 1938 
     (7 U.S.C. 1314e);
       (III) section 106 of the Agricultural Act of 1949 (7 U.S.C. 
     1445);
       (IV) section 106A of the Agricultural Act of 1949 (7 U.S.C. 
     1445-1); or
       (V) section 106B of the Agricultural Act of 1949 (7 U.S.C. 
     1445-2).

       (C) Amount.--The amount of the accelerated payments made to 
     each quota holder, quota lessee, and quota tenant under this 
     subsection shall be equal to--
       (i) the amount of the lifetime limitation established for 
     the quota holder, quota lessee, or quota tenant under 
     paragraph (7); less
       (ii) any payments for lost tobacco quota received by the 
     quota holder, quota lessee, or quota tenant before the 
     occurrence of any of the events described in subparagraph 
     (B).
       (D) Referendum vote not a triggering event.--A referendum 
     vote of producers for any type of tobacco that results in the 
     national marketing quota or national acreage allotment not 
     being in effect for the type of tobacco shall not be 
     considered a triggering event under this paragraph.
       (13) Ban on subsequent sale or leasing of farm marketing 
     quota or farm acreage allotment to quota holders exercising 
     option to relinquish quota.--No quota holder that exercises 
     the option to relinquish a farm marketing quota or farm 
     acreage allotment for any type of tobacco under paragraph (2) 
     shall be eligible to acquire a farm marketing quota or farm 
     acreage allotment for the type of tobacco, or to obtain the 
     lease or transfer of a farm marketing quota or farm acreage 
     allotment for the type of tobacco, for a period of 25 crop 
     years after the date on which the quota or allotment was 
     relinquished.
       (e) Payments for Lost Tobacco Quota for Flue-Cured 
     Tobacco.--
       (1) Allocation of funds.--Of the amounts made available 
     under section 1011(d)(1) for payments for lost tobacco quota, 
     the Secretary shall make available for payments under this 
     subsection an amount that bears the same ratio to the amounts 
     made available as--
       (A) the sum of all national marketing quotas for flue-cured 
     tobacco during the 1995 through 1997 marketing years; bears 
     to
       (B) the sum of all national marketing quotas for all types 
     of tobacco during the 1995 through 1997 marketing years.
       (2) Relinquishment of quota.--
       (A) In general.--Each quota holder of flue-cured tobacco 
     shall relinquish the farm marketing quota or farm acreage 
     allotment in exchange for a payment made under paragraph (3) 
     due to the transition from farm marketing quotas as provided 
     under section 317 of the Agricultural Adjustment Act of 1938 
     for flue-cured tobacco to individual tobacco production 
     permits as provided under section 317A of the Agricultural 
     Adjustment Act of 1938 for flue-cured tobacco.
       (B) Notification.--The Secretary shall notify the quota 
     holders of the relinquishment of their quota or allotment at 
     such time and in such manner as the Secretary may require, 
     but not later than November 15, 1998.
       (3) Payments for lost flue-cured tobacco quota to quota 
     holders that relinquish quota.--
       (A) In general.--For each of fiscal years 1999 through 
     2008, the Secretary shall make annual payments for lost flue-
     cured tobacco to each quota holder that has relinquished the 
     farm marketing quota or farm acreage allotment of the quota 
     holder under paragraph (2).
       (B) Amount.--The amount of a payment made to a quota holder 
     described in subparagraph (A) for a marketing year shall 
     equal \1/10\ of the lifetime limitation established under 
     paragraph (6).
       (C) Timing.--The Secretary shall begin making annual 
     payments under this paragraph for the marketing year in which 
     the farm marketing quota or farm acreage allotment is 
     relinquished.
       (D) Additional payments.--The Secretary may increase annual 
     payments under this paragraph in accordance with paragraph 
     (7)(E) to the extent that funding is available.
       (4) Payments for lost flue-cured tobacco quota to quota 
     lessees and quota tenants that have not relinquished 
     permits.--
       (A) In general.--Except as otherwise provided in this 
     subsection, during any marketing year in which the national 
     marketing quota for flue-cured tobacco is less than the 
     average national marketing quota for the 1995 through 1997 
     marketing years, the Secretary shall make payments for lost 
     tobacco quota to each quota lessee or quota tenant that--
       (i) is eligible under subsection (b);
       (ii) has been issued an individual tobacco production 
     permit under section 317A(b) of the Agricultural Adjustment 
     Act of 1938; and
       (iii) has not exercised an option to relinquish the permit.
       (B) Amount.--The amount of a payment made to a quota lessee 
     or quota tenant described in subparagraph (A) for a marketing 
     year shall be equal to the product obtained by multiplying--
       (i) the number of pounds by which the individual marketing 
     limitation established for the permit is less than twice the 
     base quota level for the quota lessee or quota tenant; and
       (ii) $2 per pound.
       (5) Payments for lost flue-cured tobacco quota to quota 
     lessees and quota tenants that have relinquished permits.--
       (A) In general.--For each of fiscal years 1999 through 
     2008, the Secretary shall make annual payments for lost flue-
     cured tobacco quota to each quota lessee and quota tenant 
     that has relinquished an individual tobacco production permit 
     under section 317A(b)(5) of the Agricultural Adjustment Act 
     of 1938.
       (B) Amount.--The amount of a payment made to a quota lessee 
     or quota tenant described in subparagraph (A) for a marketing 
     year shall be equal to \1/10\ of the lifetime limitation 
     established under paragraph (6).
       (C) Timing.--The Secretary shall begin making annual 
     payments under this paragraph for the marketing year in which 
     the individual tobacco production permit is relinquished.
       (D) Additional payments.--The Secretary may increase annual 
     payments under this paragraph in accordance with paragraph 
     (7)(E) to the extent that funding is available.
       (E) Prohibition against permit expansion.--A quota lessee 
     or quota tenant that receives a payment under this paragraph 
     shall be ineligible to receive any new or increased tobacco 
     production permit from the county production pool established 
     under section 317A(b)(8) of the Agricultural Adjustment Act 
     of 1938.
       (6) Lifetime limitation on payments.--Except as otherwise 
     provided in this subsection, the total amount of payments 
     made under this subsection to a quota holder, quota lessee, 
     or quota tenant during the lifetime of the quota holder, 
     quota lessee, or quota tenant shall not exceed the product 
     obtained by multiplying--
       (A) the base quota level for the quota holder, quota 
     lessee, or quota tenant; and
       (B) $8 per pound.
       (7) Limitations on aggregate annual payments.--
       (A) In general.--Except as otherwise provided in this 
     paragraph, the total amount payable under this subsection for 
     any marketing year shall not exceed the amount made available 
     under paragraph (1).
       (B) Accelerated payments.--Paragraph (1) shall not apply if 
     accelerated payments for lost flue-cured tobacco quota are 
     made in accordance with paragraph (9).
       (C) Reductions.--If the sum of the amounts determined under 
     paragraphs (3), (4), and (5) for a marketing year exceeds the 
     amount made available under paragraph (1), the Secretary 
     shall make a pro rata reduction in the amounts payable under 
     paragraph (4) to quota lessees and quota tenants under this 
     subsection to ensure that the total amount of payments for 
     lost flue-cured tobacco quota does not exceed the amount made 
     available under paragraph (1).
       (D) Rollover of payments for lost flue-cured tobacco 
     quota.--Subject to subparagraph (A), if the Secretary makes a 
     reduction in accordance with subparagraph (C),

[[Page S5975]]

     the amount of the reduction shall be applied to the next 
     marketing year and added to the payments for lost flue-cured 
     tobacco quota for the marketing year.
       (E) Additional payments to quota holders exercising option 
     to relinquish quotas or permits, or to quota lessees or quota 
     tenants relinquishing permits.--If the amount made available 
     under paragraph (1) exceeds the sum of the amounts determined 
     under paragraphs (3), (4), and (5) for a marketing year, the 
     Secretary shall distribute the amount of the excess pro rata 
     to quota holders by increasing the amount payable to each 
     such holder under paragraphs (3) and (5).
       (8) Death of quota holder, quota lessee, or quota tenant.--
     If a quota holder, quota lessee or quota tenant that is 
     entitled to payments under paragraph (4) or (5) dies and is 
     survived by a spouse or 1 or more descendants, the right to 
     receive the payments shall transfer to the surviving spouse 
     or, if there is no surviving spouse, to the surviving 
     descendants in equal shares.
       (9) Acceleration of payments.--
       (A) In general.--On the occurrence of any of the events 
     described in subparagraph (B), the Secretary shall make an 
     accelerated lump sum payment for lost flue-cured tobacco 
     quota as established under paragraphs (3), (4), and (5) to 
     each quota holder, quota lessee, and quota tenant for flue-
     cured tobacco in accordance with subparagraph (C).
       (B) Triggering events.--The Secretary shall make 
     accelerated payments under subparagraph (A) if after the date 
     of enactment of this Act--
       (i) subject to subparagraph (D), for 3 consecutive 
     marketing years, the national marketing quota or national 
     acreage allotment for flue-cured tobacco is less than 50 
     percent of the national marketing quota or national acreage 
     allotment for flue-cured tobacco for the 1998 marketing year; 
     or
       (ii) Congress repeals or makes ineffective, directly or 
     indirectly, any provision of--

       (I) section 316 of the Agricultural Adjustment Act of 1938 
     (7 U.S.C. 1314b);
       (II) section 319 of the Agricultural Adjustment Act of 1938 
     (7 U.S.C. 1314e);
       (III) section 106 of the Agricultural Act of 1949 (7 U.S.C. 
     1445);
       (IV) section 106A of the Agricultural Act of 1949 (7 U.S.C. 
     1445-1);
       (V) section 106B of the Agricultural Act of 1949 (7 U.S.C. 
     1445-2); or
       (VI) section 317A of the Agricultural Adjustment Act of 
     1938.

       (C) Amount.--The amount of the accelerated payments made to 
     each quota holder, quota lessee, and quota tenant under this 
     subsection shall be equal to--
       (i) the amount of the lifetime limitation established for 
     the quota holder, quota lessee, or quota tenant under 
     paragraph (6); less
       (ii) any payments for lost flue-cured tobacco quota 
     received by the quota holder, quota lessee, or quota tenant 
     before the occurrence of any of the events described in 
     subparagraph (B).
       (D) Referendum vote not a triggering event.--A referendum 
     vote of producers for flue-cured tobacco that results in the 
     national marketing quota or national acreage allotment not 
     being in effect for flue-cured tobacco shall not be 
     considered a triggering event under this paragraph.

     SEC. 1022. INDUSTRY PAYMENTS FOR ALL DEPARTMENT COSTS 
                   ASSOCIATED WITH TOBACCO PRODUCTION.

       (a) In General.--The Secretary shall use such amounts 
     remaining unspent and obligated at the end of each fiscal 
     year to reimburse the Secretary for--
       (1) costs associated with the administration of programs 
     established under this title and amendments made by this 
     title;
       (2) costs associated with the administration of the tobacco 
     quota and price support programs administered by the 
     Secretary;
       (3) costs to the Federal Government of carrying out crop 
     insurance programs for tobacco;
       (4) costs associated with all agricultural research, 
     extension, or education activities associated with tobacco;
       (5) costs associated with the administration of loan 
     association and cooperative programs for tobacco producers, 
     as approved by the Secretary; and
       (6) any other costs incurred by the Department of 
     Agriculture associated with the production of tobacco.
       (b) Limitations.--Amounts made available under subsection 
     (a) may not be used--
       (1) to provide direct benefits to quota holders, quota 
     lessees, or quota tenants; or
       (2) in a manner that results in a decrease, or an increase 
     relative to other crops, in the amount of the crop insurance 
     premiums assessed to participating tobacco producers under 
     the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.).
       (c) Determinations.--Not later than September 30, 1998, and 
     each fiscal year thereafter, the Secretary shall determine--
       (1) the amount of costs described in subsection (a); and
       (2) the amount that will be provided under this section as 
     reimbursement for the costs.

     SEC. 1023. TOBACCO COMMUNITY ECONOMIC DEVELOPMENT GRANTS.

       (a) Authority.--The Secretary shall make grants to tobacco-
     growing States in accordance with this section to enable the 
     States to carry out economic development initiatives in 
     tobacco-growing communities.
       (b) Application.--To be eligible to receive payments under 
     this section, a State shall prepare and submit to the 
     Secretary an application at such time, in such manner, and 
     containing such information as the Secretary may require, 
     including--
       (1) a description of the activities that the State will 
     carry out using amounts received under the grant;
       (2) a designation of an appropriate State agency to 
     administer amounts received under the grant; and
       (3) a description of the steps to be taken to ensure that 
     the funds are distributed in accordance with subsection (e).
       (c) Amount of Grant.--
       (1) In general.--From the amounts available to carry out 
     this section for a fiscal year, the Secretary shall allot to 
     each State an amount that bears the same ratio to the amounts 
     available as the total farm income of the State derived from 
     the production of tobacco during the 1995 through 1997 
     marketing years (as determined under paragraph (2)) bears to 
     the total farm income of all States derived from the 
     production of tobacco during the 1995 through 1997 marketing 
     years.
       (2) Tobacco income.--For the 1995 through 1997 marketing 
     years, the Secretary shall determine the amount of farm 
     income derived from the production of tobacco in each State 
     and in all States.
       (d) Payments.--
       (1) In general.--A State that has an application approved 
     by the Secretary under subsection (b) shall be entitled to a 
     payment under this section in an amount that is equal to its 
     allotment under subsection (c).
       (2) Form of payments.--The Secretary may make payments 
     under this section to a State in installments, and in advance 
     or by way of reimbursement, with necessary adjustments on 
     account of overpayments or underpayments, as the Secretary 
     may determine.
       (3) Reallotments.--Any portion of the allotment of a State 
     under subsection (c) that the Secretary determines will not 
     be used to carry out this section in accordance with an 
     approved State application required under subsection (b), 
     shall be reallotted by the Secretary to other States in 
     proportion to the original allotments to the other States.
       (e) Use and Distribution of Funds.--
       (1) In general.--Amounts received by a State under this 
     section shall be used to carry out economic development 
     activities, including--
       (A) rural business enterprise activities described in 
     subsections (c) and (e) of section 310B of the Consolidated 
     Farm and Rural Development Act (7 U.S.C. 1932);
       (B) down payment loan assistance programs that are similar 
     to the program described in section 310E of the Consolidated 
     Farm and Rural Development Act (7 U.S.C. 1935);
       (C) activities designed to help create productive farm or 
     off-farm employment in rural areas to provide a more viable 
     economic base and enhance opportunities for improved incomes, 
     living standards, and contributions by rural individuals to 
     the economic and social development of tobacco communities;
       (D) activities that expand existing infrastructure, 
     facilities, and services to capitalize on opportunities to 
     diversify economies in tobacco communities and that support 
     the development of new industries or commercial ventures;
       (E) activities by agricultural organizations that provide 
     assistance directly to participating tobacco producers to 
     assist in developing other agricultural activities that 
     supplement tobacco-producing activities;
       (F) initiatives designed to create or expand locally owned 
     value-added processing and marketing operations in tobacco 
     communities;
       (G) technical assistance activities by persons to support 
     farmer-owned enterprises, or agriculture-based rural 
     development enterprises, of the type described in section 252 
     or 253 of the Trade Act of 1974 (19 U.S.C. 2342, 2343); and
       (H) initiatives designed to partially compensate tobacco 
     warehouse owners for lost revenues and assist the tobacco 
     warehouse owners in establishing successful business 
     enterprises.
       (2) Tobacco-growing counties.--Assistance may be provided 
     by a State under this section only to assist a county in the 
     State that has been determined by the Secretary to have in 
     excess of $100,000 in income derived from the production of 
     tobacco during 1 or more of the 1995 through 1997 marketing 
     years. For purposes of this section, the term ``tobacco-
     growing county'' includes a political subdivision surrounded 
     within a State by a county that has been determined by the 
     Secretary to have in excess of $100,000 in income derived 
     from the production of tobacco during 1 or more of the 1995 
     through 1997 marketing years.
       (3) Distribution.--
       (A) Economic development activities.--Not less than 20 
     percent of the amounts received by a State under this section 
     shall be used to carry out--
       (i) economic development activities described in 
     subparagraph (E) or (F) of paragraph (1); or
       (ii) agriculture-based rural development activities 
     described in paragraph (1)(G).
       (B) Technical assistance activities.--Not less than 4 
     percent of the amounts received by a State under this section 
     shall be used to carry out technical assistance activities 
     described in paragraph (1)(G).
       (C) Tobacco warehouse owner initiatives.--Not less than 6 
     percent of the amounts received by a State under this section 
     during each of fiscal years 1999 through

[[Page S5976]]

     2008 shall be used to carry out initiatives described in 
     paragraph (1)(H).
       (D) Tobacco-growing counties.--To be eligible to receive 
     payments under this section, a State shall demonstrate to the 
     Secretary that funding will be provided, during each 5-year 
     period for which funding is provided under this section, for 
     activities in each county in the State that has been 
     determined under paragraph (2) to have in excess of $100,000 
     in income derived from the production of tobacco, in amounts 
     that are at least equal to the product obtained by 
     multiplying--
       (i) the ratio that the tobacco production income in the 
     county determined under paragraph (2) bears to the total 
     tobacco production income for the State determined under 
     subsection (c); and
       (ii) 50 percent of the total amounts received by a State 
     under this section during the 5-year period.
       (f) Preferences in Hiring.--A State may require recipients 
     of funds under this section to provide a preference in 
     employment to--
       (1) an individual who--
       (A) during the 1998 calendar year, was employed in the 
     manufacture, processing, or warehousing of tobacco or tobacco 
     products, or resided, in a county described in subsection 
     (e)(2); and
       (B) is eligible for assistance under the tobacco worker 
     transition program established under section 1031; or
       (2) an individual who--
       (A) during the 1998 marketing year, carried out tobacco 
     quota or relevant tobacco production activities in a county 
     described in subsection (e)(2);
       (B) is eligible for a farmer opportunity grant under 
     subpart 9 of part A of title IV of the Higher Education Act 
     of 1965; and
       (C) has successfully completed a course of study at an 
     institution of higher education.
       (g) Maintenance of Effort.--
       (1) In general.--Subject to paragraph (2), a State shall 
     provide an assurance to the Secretary that the amount of 
     funds expended by the State and all counties in the State 
     described in subsection (e)(2) for any activities funded 
     under this section for a fiscal year is not less than 90 
     percent of the amount of funds expended by the State and 
     counties for the activities for the preceding fiscal year.
       (2) Reduction of grant amount.--If a State does not provide 
     an assurance described in paragraph (1), the Secretary shall 
     reduce the amount of the grant determined under subsection 
     (c) by an amount equal to the amount by which the amount of 
     funds expended by the State and counties for the activities 
     is less than 90 percent of the amount of funds expended by 
     the State and counties for the activities for the preceding 
     fiscal year, as determined by the Secretary.
       (3) Federal funds.--For purposes of this subsection, the 
     amount of funds expended by a State or county shall not 
     include any amounts made available by the Federal Government.

     SEC. 1024. FLUE-CURED TOBACCO PRODUCTION PERMITS.

       The Agricultural Adjustment Act of 1938 is amended by 
     inserting after section 317 (7 U.S.C. 1314c) the following:

     ``SEC. 317A. FLUE-CURED TOBACCO PRODUCTION PERMITS.

       ``(a) Definitions.--In this section:
       ``(1) Individual acreage limitation.--The term `individual 
     acreage limitation' means the number of acres of flue-cured 
     tobacco that may be planted by the holder of a permit during 
     a marketing year, calculated--
       ``(A) prior to--
       ``(i) any increase or decrease in the number due to 
     undermarketings or overmarketings; and
       ``(ii) any reduction under subsection (i); and
       ``(B) in a manner that ensures that--
       ``(i) the total of all individual acreage limitations is 
     equal to the national acreage allotment, less the reserve 
     provided under subsection (h); and
       ``(ii) the individual acreage limitation for a marketing 
     year bears the same ratio to the individual acreage 
     limitation for the previous marketing year as the ratio that 
     the national acreage allotment for the marketing year bears 
     to the national acreage allotment for the previous marketing 
     year, subject to adjustments by the Secretary to account for 
     any reserve provided under subsection (h).
       ``(2) Individual marketing limitation.--The term 
     `individual marketing limitation' means the number of pounds 
     of flue-cured tobacco that may be marketed by the holder of a 
     permit during a marketing year, calculated--
       ``(A) prior to--
       ``(i) any increase or decrease in the number due to 
     undermarketings or overmarketings; and
       ``(ii) any reduction under subsection (i); and
       ``(B) in a manner that ensures that--
       ``(i) the total of all individual marketing limitations is 
     equal to the national marketing quota, less the reserve 
     provided under subsection (h); and
       ``(ii) the individual marketing limitation for a marketing 
     year is obtained by multiplying the individual acreage 
     limitation by the permit yield, prior to any adjustment for 
     undermarketings or overmarketings.
       ``(3) Individual tobacco production permit.--The term 
     `individual tobacco production permit' means a permit issued 
     by the Secretary to a person authorizing the production of 
     flue-cured tobacco for any marketing year during which this 
     section is effective.
       ``(4) National acreage allotment.--The term `national 
     acreage allotment' means the quantity determined by 
     dividing--
       ``(A) the national marketing quota; by
       ``(B) the national average yield goal.
       ``(5) National average yield goal.--The term `national 
     average yield goal' means the national average yield for 
     flue-cured tobacco during the 5 marketing years immediately 
     preceding the marketing year for which the determination is 
     being made.
       ``(6) National marketing quota.--For the 1999 and each 
     subsequent crop of flue-cured tobacco, the term `national 
     marketing quota' for a marketing year means the quantity of 
     flue-cured tobacco, as determined by the Secretary, that is 
     not more than 103 percent nor less than 97 percent of the 
     total of--
       ``(A) the aggregate of the quantities of flue-cured tobacco 
     that domestic manufacturers of cigarettes estimate that the 
     manufacturers intend to purchase on the United States auction 
     markets or from producers during the marketing year, as 
     compiled and determined under section 320A;
       ``(B) the average annual quantity of flue-cured tobacco 
     exported from the United States during the 3 marketing years 
     immediately preceding the marketing year for which the 
     determination is being made; and
       ``(C) the quantity, if any, of flue-cured tobacco that the 
     Secretary, in the discretion of the Secretary, determines is 
     necessary to increase or decrease the inventory of the 
     producer-owned cooperative marketing association that has 
     entered into a loan agreement with the Commodity Credit 
     Corporation to make price support available to producers of 
     flue-cured tobacco to establish or maintain the inventory at 
     the reserve stock level for flue-cured tobacco.
       ``(7) Permit yield.--The term `permit yield' means the 
     yield of tobacco per acre for an individual tobacco 
     production permit holder that is--
       ``(A) based on a preliminary permit yield that is equal to 
     the average yield during the 5 marketing years immediately 
     preceding the marketing year for which the determination is 
     made in the county where the holder of the permit is 
     authorized to plant flue-cured tobacco, as determined by the 
     Secretary, on the basis of actual yields of farms in the 
     county; and
       ``(B) adjusted by a weighted national yield factor 
     calculated by--
       ``(i) multiplying each preliminary permit yield by the 
     individual acreage limitation, prior to adjustments for 
     overmarketings, undermarketings, or reductions required under 
     subsection (i); and
       ``(ii) dividing the sum of the products under clause (i) 
     for all flue-cured individual tobacco production permit 
     holders by the national acreage allotment.
       ``(b) Initial Issuance of Permits.--
       ``(1) Termination of flue-cured marketing quotas.--On the 
     date of enactment of the National Tobacco Policy and Youth 
     Smoking Reduction Act, farm marketing quotas as provided 
     under section 317 shall no longer be in effect for flue-cured 
     tobacco.
       ``(2) Issuance of permits to quota holders that were 
     principal producers.--
       ``(A) In general.--By January 15, 1999, each individual 
     quota holder under section 317 that was a principal producer 
     of flue-cured tobacco during the 1998 marketing year, as 
     determined by the Secretary, shall be issued an individual 
     tobacco production permit under this section.
       ``(B) Notification.--The Secretary shall notify the holder 
     of each permit of the individual acreage limitation and the 
     individual marketing limitation applicable to the holder for 
     each marketing year.
       ``(C) Individual acreage limitation for 1999 marketing 
     year.--In establishing the individual acreage limitation for 
     the 1999 marketing year under this section, the farm acreage 
     allotment that was allotted to a farm owned by the quota 
     holder for the 1997 marketing year shall be considered the 
     individual acreage limitation for the previous marketing 
     year.
       ``(D) Individual marketing limitation for 1999 marketing 
     year.--In establishing the individual marketing limitation 
     for the 1999 marketing year under this section, the farm 
     marketing quota that was allotted to a farm owned by the 
     quota holder for the 1997 marketing year shall be considered 
     the individual marketing limitation for the previous 
     marketing year.
       ``(3) Quota holders that were not principal producers.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     on approval through a referendum under subsection (c)--
       ``(i) each person that was a quota holder under section 317 
     but that was not a principal producer of flue-cured tobacco 
     during the 1997 marketing year, as determined by the 
     Secretary, shall not be eligible to own a permit; and
       ``(ii) the Secretary shall not issue any permit during the 
     25-year period beginning on the date of enactment of this Act 
     to any person that was a quota holder and was not the 
     principal producer of flue-cured tobacco during the 1997 
     marketing year.
       ``(B) Medical hardships and crop disasters.--Subparagraph 
     (A) shall not apply to a person that would have been the 
     principal producer of flue-cured tobacco during the 1997 
     marketing year but for a medical hardship or crop disaster 
     that occurred during the 1997 marketing year.

[[Page S5977]]

       ``(C) Administration.--The Secretary shall issue 
     regulations--
       ``(i) defining the term `person' for the purpose of this 
     paragraph; and
       ``(ii) prescribing such rules as the Secretary determines 
     are necessary to ensure a fair and reasonable application of 
     the prohibition established under this paragraph.
       ``(4) Issuance of permits to principal producers of flue-
     cured tobacco.--
       ``(A) In general.--By January 15, 1999, each individual 
     quota lessee or quota tenant (as defined in section 1002 of 
     the LEAF Act) that was the principal producer of flue-cured 
     tobacco during the 1997 marketing year, as determined by the 
     Secretary, shall be issued an individual tobacco production 
     permit under this section.
       ``(B) Individual acreage limitations.--In establishing the 
     individual acreage limitation for the 1999 marketing year 
     under this section, the farm acreage allotment that was 
     allotted to a farm owned by a quota holder for whom the quota 
     lessee or quota tenant was the principal producer of flue-
     cured tobacco during the 1997 marketing year shall be 
     considered the individual acreage limitation for the previous 
     marketing year.
       ``(C) Individual marketing limitations.--In establishing 
     the individual marketing limitation for the 1999 marketing 
     year under this section, the individual marketing limitation 
     for the previous year for an individual described in this 
     paragraph shall be calculated by multiplying--
       ``(i) the farm marketing quota that was allotted to a farm 
     owned by a quota holder for whom the quota lessee or quota 
     holder was the principal producer of flue-cured tobacco 
     during the 1997 marketing year, by
       ``(ii) the ratio that--

       ``(I) the sum of all flue-cured tobacco farm marketing 
     quotas for the 1997 marketing year prior to adjusting for 
     undermarketing and overmarketing; bears to
       ``(II) the sum of all flue-cured tobacco farm marketing 
     quotas for the 1998 marketing year, after adjusting for 
     undermarketing and overmarketing.

       ``(D) Special rule for tenant of leased flue-cured 
     tobacco.--If the farm marketing quota or farm acreage 
     allotment of a quota holder was produced pursuant to an 
     agreement under which a quota lessee rented land from a quota 
     holder and a quota tenant was the primary producer, as 
     determined by the Secretary, of flue-cured tobacco pursuant 
     to the farm marketing quota or farm acreage allotment, the 
     farm marketing quota or farm acreage allotment shall be 
     divided proportionately between the quota lessee and quota 
     tenant for purposes of issuing individual tobacco production 
     permits under this paragraph.
       ``(5) Option of quota lessee or quota tenant to relinquish 
     permit.--
       ``(A) In general.--Each quota lessee or quota tenant that 
     is issued an individual tobacco production permit under 
     paragraph (4) shall be given the option of relinquishing the 
     permit in exchange for payments made under section 1021(e)(5) 
     of the LEAF Act.
       ``(B) Notification.--A quota lessee or quota tenant that is 
     issued an individual tobacco production permit shall give 
     notification of the intention to exercise the option at such 
     time and in such manner as the Secretary may require, but not 
     later than 45 days after the permit is issued.
       ``(C) Reallocation of permit.--The Secretary shall add the 
     authority to produce flue-cured tobacco under the individual 
     tobacco production permit relinquished under this paragraph 
     to the county production pool established under paragraph (8) 
     for reallocation by the appropriate county committee.
       ``(6) Active producer requirement.--
       ``(A) Requirement for sharing risk.--No individual tobacco 
     production permit shall be issued to, or maintained by, a 
     person that does not fully share in the risk of producing a 
     crop of flue-cured tobacco.
       ``(B) Criteria for sharing risk.--For purposes of this 
     paragraph, a person shall be considered to have fully shared 
     in the risk of production of a crop if--
       ``(i) the investment of the person in the production of the 
     crop is not less than 100 percent of the costs of production 
     associated with the crop;
       ``(ii) the amount of the person's return on the investment 
     is dependent solely on the sale price of the crop; and
       ``(iii) the person may not receive any of the return before 
     the sale of the crop.
       ``(C) Persons not sharing risk.--
       ``(i) Forfeiture.--Any person that fails to fully share in 
     the risks of production under this paragraph shall forfeit an 
     individual tobacco production permit if, after notice and 
     opportunity for a hearing, the appropriate county committee 
     determines that the conditions for forfeiture exist.
       ``(ii) Reallocation.--The Secretary shall add the authority 
     to produce flue-cured tobacco under the individual tobacco 
     production permit forfeited under this subparagraph to the 
     county production pool established under paragraph (8) for 
     reallocation by the appropriate county committee.
       ``(D) Notice.--Notice of any determination made by a county 
     committee under subparagraph (C) shall be mailed, as soon as 
     practicable, to the person involved.
       ``(E) Review.--If the person is dissatisfied with the 
     determination, the person may request, not later than 15 days 
     after notice of the determination is received, a review of 
     the determination by a local review committee under the 
     procedures established under section 363 for farm marketing 
     quotas.
       ``(7) County of origin requirement.--For the 1999 and each 
     subsequent crop of flue-cured tobacco, all tobacco produced 
     pursuant to an individual tobacco production permit shall be 
     produced in the same county in which was produced the tobacco 
     produced during the 1997 marketing year pursuant to the farm 
     marketing quota or farm acreage allotment on which the 
     individual tobacco production permit is based.
       ``(8) County production pool.--
       ``(A) In general.--The authority to produce flue-cured 
     tobacco under an individual tobacco production permit that is 
     forfeited, relinquished, or surrendered within a county may 
     be reallocated by the appropriate county committee to tobacco 
     producers located in the same county that apply to the 
     committee to produce flue-cured tobacco under the authority.
       ``(B) Priority.--In reallocating individual tobacco 
     production permits under this paragraph, a county committee 
     shall provide a priority to--
       ``(i) an active tobacco producer that controls the 
     authority to produce a quantity of flue-cured tobacco under 
     an individual tobacco production permit that is equal to or 
     less than the average number of pounds of flue-cured tobacco 
     that was produced by the producer during each of the 1995 
     through 1997 marketing years, as determined by the Secretary; 
     and
       ``(ii) a new tobacco producer.
       ``(C) Criteria.--Individual tobacco production permits 
     shall be reallocated by the appropriate county committee 
     under this paragraph in a fair and equitable manner after 
     taking into consideration--
       ``(i) the experience of the producer;
       ``(ii) the availability of land, labor, and equipment for 
     the production of tobacco;
       ``(iii) crop rotation practices; and
       ``(iv) the soil and other physical factors affecting the 
     production of tobacco.
       ``(D) Medical hardships and crop disasters.--
     Notwithstanding any other provision of this Act, the 
     Secretary may issue an individual tobacco production permit 
     under this paragraph to a producer that is otherwise 
     ineligible for the permit due to a medical hardship or crop 
     disaster that occurred during the 1997 marketing year.
       ``(c) Referendum.--
       ``(1) Announcement of quota and allotment.--Not later than 
     December 15, 1998, the Secretary pursuant to subsection (b) 
     shall determine and announce--
       ``(A) the quantity of the national marketing quota for 
     flue-cured tobacco for the 1999 marketing year; and
       ``(B) the national acreage allotment and national average 
     yield goal for the 1999 crop of flue-cured tobacco.
       ``(2) Special referendum.--Not later than 30 days after the 
     announcement of the quantity of the national marketing quota 
     in 2001, the Secretary shall conduct a special referendum of 
     the tobacco production permit holders that were the principal 
     producers of flue-cured tobacco of the 1997 crop to determine 
     whether the producers approve or oppose the continuation of 
     individual tobacco production permits on an acreage-poundage 
     basis as provided in this section for the 2002 through 2004 
     marketing years.
       ``(3) Approval of permits.--If the Secretary determines 
     that more than 66\2/3\ percent of the producers voting in the 
     special referendum approve the establishment of individual 
     tobacco production permits on an acreage-poundage basis--
       ``(A) individual tobacco production permits on an acreage-
     poundage basis as provided in this section shall be in effect 
     for the 2002 through 2004 marketing years; and
       ``(B) marketing quotas on an acreage-poundage basis shall 
     cease to be in effect for the 2002 through 2004 marketing 
     years.
       ``(4) Disapproval of permits.--If individual tobacco 
     production permits on an acreage-poundage basis are not 
     approved by more than 66\2/3\ percent of the producers voting 
     in the referendum, no marketing quotas on an acreage-poundage 
     basis shall continue in effect that were proclaimed under 
     section 317 prior to the referendum.
       ``(5) Applicable marketing years.--If individual tobacco 
     production permits have been made effective for flue-cured 
     tobacco on an acreage-poundage basis pursuant to this 
     subsection, the Secretary shall, not later than December 15 
     of any future marketing year, announce a national marketing 
     quota for that type of tobacco for the next 3 succeeding 
     marketing years if the marketing year is the last year of 3 
     consecutive years for which individual tobacco production 
     permits previously proclaimed will be in effect.
       ``(d) Annual Announcement of National Marketing Quota.--The 
     Secretary shall determine and announce the national marketing 
     quota, national acreage allotment, and national average yield 
     goal for the second and third marketing years of any 3-year 
     period for which individual tobacco production permits are in 
     effect on or before the December 15 immediately preceding the 
     beginning of the marketing year to which the quota, 
     allotment, and goal apply.
       ``(e) Annual Announcement of Individual Tobacco Production 
     Permits.--If a national marketing quota, national acreage 
     allotment, and national average yield goal are determined and 
     announced, the Secretary shall provide for the determination 
     of individual tobacco production permits, individual acreage 
     limitations, and individual marketing limitations under this 
     section for the crop and marketing year covered by the 
     determinations.

[[Page S5978]]

       ``(f) Assignment of Tobacco Production Permits.--
       ``(1) Limitation to same county.--Each individual tobacco 
     production permit holder shall assign the individual acreage 
     limitation and individual marketing limitation to 1 or more 
     farms located within the county of origin of the individual 
     tobacco production permit.
       ``(2) Filing with county committee.--The assignment of an 
     individual acreage limitation and individual marketing 
     limitation shall not be effective until evidence of the 
     assignment, in such form as required by the Secretary, is 
     filed with and determined by the county committee for the 
     county in which the farm involved is located.
       ``(3) Limitation on tillable cropland.--The total acreage 
     assigned to any farm under this subsection shall not exceed 
     the acreage of cropland on the farm.
       ``(g) Prohibition on Sale or Leasing of Individual Tobacco 
     Production Permits.--
       ``(1) In general.--Except as provided in paragraphs (2) and 
     (3), the Secretary shall not permit the sale and transfer, or 
     lease and transfer, of an individual tobacco production 
     permit issued under this section.
       ``(2) Transfer to descendants.--
       ``(A) Death.--In the case of the death of a person to whom 
     an individual tobacco production permit has been issued under 
     this section, the permit shall transfer to the surviving 
     spouse of the person or, if there is no surviving spouse, to 
     surviving direct descendants of the person.
       ``(B) Temporary inability to farm.--In the case of the 
     death of a person to whom an individual tobacco production 
     permit has been issued under this section and whose 
     descendants are temporarily unable to produce a crop of 
     tobacco, the Secretary may hold the license in the name of 
     the descendants for a period of not more than 18 months.
       ``(3) Voluntary transfers.--A person that is eligible to 
     obtain an individual tobacco production permit under this 
     section may at any time transfer all or part of the permit to 
     the person's spouse or direct descendants that are actively 
     engaged in the production of tobacco.
       ``(h) Reserve.--
       ``(1) In general.--For each marketing year for which 
     individual tobacco production permits are in effect under 
     this section, the Secretary may establish a reserve from the 
     national marketing quota in a quantity equal to not more than 
     1 percent of the national marketing quota to be available 
     for--
       ``(A) making corrections of errors in individual acreage 
     limitations and individual marketing limitations;
       ``(B) adjusting inequities; and
       ``(C) establishing individual tobacco production permits 
     for new tobacco producers (except that not less than two-
     thirds of the reserve shall be for establishing such permits 
     for new tobacco producers).
       ``(2) Eligible persons.--To be eligible for a new 
     individual tobacco production permit, a producer must not 
     have been the principal producer of tobacco during the 
     immediately preceding 5 years.
       ``(3) Apportionment for new producers.--The part of the 
     reserve held for apportionment to new individual tobacco 
     producers shall be allotted on the basis of--
       ``(A) land, labor, and equipment available for the 
     production of tobacco;
       ``(B) crop rotation practices;
       ``(C) soil and other physical factors affecting the 
     production of tobacco; and
       ``(D) the past tobacco-producing experience of the 
     producer.
       ``(4) Permit yield.--The permit yield for any producer for 
     which a new individual tobacco production permit is 
     established shall be determined on the basis of available 
     productivity data for the land involved and yields for 
     similar farms in the same county.
       ``(i) Penalties.--
       ``(1) Production on other farms.--If any quantity of 
     tobacco is marketed as having been produced under an 
     individual acreage limitation or individual marketing 
     limitation assigned to a farm but was produced on a different 
     farm, the individual acreage limitation or individual 
     marketing limitation for the following marketing year shall 
     be forfeited.
       ``(2) False report.--If a person to which an individual 
     tobacco production permit is issued files, or aids or 
     acquiesces in the filing of, a false report with respect to 
     the assignment of an individual acreage limitation or 
     individual marketing limitation for a quantity of tobacco, 
     the individual acreage limitation or individual marketing 
     limitation for the following marketing year shall be 
     forfeited.
       ``(j) Marketing Penalties.--
       ``(1) In general.--When individual tobacco production 
     permits under this section are in effect, provisions with 
     respect to penalties for the marketing of excess tobacco and 
     the other provisions contained in section 314 shall apply in 
     the same manner and to the same extent as they would apply 
     under section 317(g) if farm marketing quotas were in effect.
       ``(2) Production on other farms.--If a producer falsely 
     identifies tobacco as having been produced on or marketed 
     from a farm to which an individual acreage limitation or 
     individual marketing limitation has been assigned, future 
     individual acreage limitations and individual marketing 
     limitations shall be forfeited.''.

     SEC. 1025. MODIFICATIONS IN FEDERAL TOBACCO PROGRAMS.

       (a) Program Referenda.--Section 312(c) of the Agricultural 
     Adjustment Act of 1938 (7 U.S.C. 1312(c)) is amended--
       (1) by striking ``(c) Within thirty'' and inserting the 
     following:
       ``(c) Referenda on Quotas.--
       ``(1) In general.--Not later than 30''; and
       (2) by adding at the end the following:
       ``(2) Referenda on program changes.--
       ``(A) In general.--In the case of any type of tobacco for 
     which marketing quotas are in effect, on the receipt of a 
     petition from more than 5 percent of the producers of that 
     type of tobacco in a State, the Secretary shall conduct a 
     statewide referendum on any proposal related to the lease and 
     transfer of tobacco quota within a State requested by the 
     petition that is authorized under this part.
       ``(B) Approval of proposals.--If a majority of producers of 
     the type of tobacco in the State approve a proposal in a 
     referendum conducted under subparagraph (A), the Secretary 
     shall implement the proposal in a manner that applies to all 
     producers and quota holders of that type of tobacco in the 
     State.''.
       (b) Purchase Requirements.--Section 320B of the 
     Agricultural Adjustment Act of 1938 (7 U.S.C. 1314h) is 
     amended--
       (1) in subsection (c)--
       (A) by striking ``(c) The amount'' and inserting ``(c) 
     Amount of Penalty.--For the 1998 and subsequent marketing 
     years, the amount''; and
       (B) by striking paragraph (1) and inserting the following:
       ``(1) 105 percent of the average market price for the type 
     of tobacco involved during the preceding marketing year; 
     and''.
       (c) Elimination of Tobacco Marketing Assessment.--
       (1) In general.--Section 106 of the Agricultural Act of 
     1949 (7 U.S.C. 1445) is amended by striking subsection (g).
       (2) Conforming amendment.--Section 422(c) of the Uruguay 
     Round Agreements Act (Public Law 103-465; 7 U.S.C. 1445 note) 
     is amended by striking ``section 106(g), 106A, or 106B of the 
     Agricultural Act of 1949 (7 U.S.C. 1445(g), 1445-1, or 1445-
     2)'' and inserting ``section 106A or 106B of the Agricultural 
     Act of 1949 (7 U.S.C. 1445-1, 1445-2)''.
       (d) Adjustment for Land Rental Costs.--Section 106 of the 
     Agricultural Act of 1949 (7 U.S.C. 1445) is amended by adding 
     at the end the following:
       ``(h) Adjustment for Land Rental Costs.--For each of the 
     1999 and 2000 marketing years for flue-cured tobacco, after 
     consultation with producers, State farm organizations and 
     cooperative associations, the Secretary shall make an 
     adjustment in the price support level for flue-cured tobacco 
     equal to the annual change in the average cost per pound to 
     flue-cured producers, as determined by the Secretary, under 
     agreements through which producers rent land to produce flue-
     cured tobacco.''.
       (e) Fire-Cured and Dark Air-Cured Tobacco Programs.--
       (1) Limitation on transfers.--Section 318(g) of the 
     Agricultural Adjustment Act of 1938 (7 U.S.C. 13l4d(g)) is 
     amended--
       (A) by striking ``ten'' and inserting ``30''; and
       (B) by inserting ``during any crop year'' after 
     ``transferred to any farm''.
       (2) Loss of allotment or quota through underplanting.--
     Section 318 of the Agricultural Adjustment Act of 1938 (7 
     U.S.C. 1314d) is amended by adding at the end the following:
       ``(k) Loss of Allotment or Quota Through Underplanting.--
     Effective for the 1999 and subsequent marketing years, no 
     acreage allotment or acreage-poundage quota, other than a new 
     marketing quota, shall be established for a farm on which no 
     fire-cured or dark air-cured tobacco was planted or 
     considered planted during at least 2 of the 3 crop years 
     immediately preceding the crop year for which the acreage 
     allotment or acreage-poundage quota would otherwise be 
     established.''.
       (f) Expansion of Types of Tobacco Subject to No Net Cost 
     Assessment.--
       (1) No net cost tobacco fund.--Section 106A(d)(1)(A) of the 
     Agricultural Act of 1949 (7 U.S.C. 1445-1(d)(1)(A)) is 
     amended--
       (A) in clause (ii), by inserting after ``Burley quota 
     tobacco'' the following: ``and fire-cured and dark air-cured 
     quota tobacco''; and
       (B) in clause (iii)--
       (i) in the matter preceding subclause (I), by striking 
     ``Flue-cured or Burley tobacco'' and inserting ``each kind of 
     tobacco for which price support is made available under this 
     Act, and each kind of like tobacco,''; and
       (ii) by striking subclause (II) and inserting the 
     following:

       ``(II) the sum of the amount of the per pound producer 
     contribution and purchaser assessment (if any) for the kind 
     of tobacco payable under clauses (i) and (ii); and''.

       (2) No net cost tobacco account.--Section 106B(d)(1) of the 
     Agricultural Act of 1949 (7 U.S.C. 1445-2(d)(1)) is amended--
       (A) in subparagraph (B), by inserting after ``Burley quota 
     tobacco'' the following: ``and fire-cured and dark air-cured 
     tobacco''; and
       (B) in subparagraph (C), by striking ``Flue-cured and 
     Burley tobacco'' and inserting ``each kind of tobacco for 
     which price support is made available under this Act, and 
     each kind of like tobacco,''.
          Subtitle C--Farmer and Worker Transition Assistance

     SEC. 1031. TOBACCO WORKER TRANSITION PROGRAM.

       (a) Group Eligibility Requirements.--
       (1) Criteria.--A group of workers (including workers in any 
     firm or subdivision of a

[[Page S5979]]

     firm involved in the manufacture, processing, or warehousing 
     of tobacco or tobacco products) shall be certified as 
     eligible to apply for adjustment assistance under this 
     section pursuant to a petition filed under subsection (b) if 
     the Secretary of Labor determines that a significant number 
     or proportion of the workers in the workers' firm or an 
     appropriate subdivision of the firm have become totally or 
     partially separated, or are threatened to become totally or 
     partially separated, and--
       (A) the sales or production, or both, of the firm or 
     subdivision have decreased absolutely; and
       (B) the implementation of the national tobacco settlement 
     contributed importantly to the workers' separation or threat 
     of separation and to the decline in the sales or production 
     of the firm or subdivision.
       (2) Definition of contributed importantly.--In paragraph 
     (1)(B), the term ``contributed importantly'' means a cause 
     that is important but not necessarily more important than any 
     other cause.
       (3) Regulations.--The Secretary shall issue regulations 
     relating to the application of the criteria described in 
     paragraph (1) in making preliminary findings under subsection 
     (b) and determinations under subsection (c).
       (b) Preliminary Findings and Basic Assistance.--
       (1) Filing of petitions.--A petition for certification of 
     eligibility to apply for adjustment assistance under this 
     section may be filed by a group of workers (including workers 
     in any firm or subdivision of a firm involved in the 
     manufacture, processing, or warehousing of tobacco or tobacco 
     products) or by their certified or recognized union or other 
     duly authorized representative with the Governor of the State 
     in which the workers' firm or subdivision thereof is located.
       (2) Findings and assistance.--On receipt of a petition 
     under paragraph (1), the Governor shall--
       (A) notify the Secretary that the Governor has received the 
     petition;
       (B) within 10 days after receiving the petition--
       (i) make a preliminary finding as to whether the petition 
     meets the criteria described in subsection (a)(1); and
       (ii) transmit the petition, together with a statement of 
     the finding under clause (i) and reasons for the finding, to 
     the Secretary for action under subsection (c); and
       (C) if the preliminary finding under subparagraph (B)(i) is 
     affirmative, ensure that rapid response and basic 
     readjustment services authorized under other Federal laws are 
     made available to the workers.
       (c) Review of Petitions by Secretary; Certifications.--
       (1) In general.--The Secretary, within 30 days after 
     receiving a petition under subsection (b)(2)(B)(ii), shall 
     determine whether the petition meets the criteria described 
     in subsection (a)(1). On a determination that the petition 
     meets the criteria, the Secretary shall issue to workers 
     covered by the petition a certification of eligibility to 
     apply for the assistance described in subsection (d).
       (2) Denial of certification.--On the denial of a 
     certification with respect to a petition under paragraph (1), 
     the Secretary shall review the petition in accordance with 
     the requirements of other applicable assistance programs to 
     determine if the workers may be certified under the other 
     programs.
       (d) Comprehensive Assistance.--
       (1) In general.--Workers covered by a certification issued 
     by the Secretary under subsection (c)(1) shall be provided 
     with benefits and services described in paragraph (2) in the 
     same manner and to the same extent as workers covered under a 
     certification under subchapter A of title II of the Trade Act 
     of 1974 (19 U.S.C. 2271 et seq.), except that the total 
     amount of payments under this section for any fiscal year 
     shall not exceed $25,000,000.
       (2) Benefits and services.--The benefits and services 
     described in this paragraph are the following:
       (A) Employment services of the type described in section 
     235 of the Trade Act of 1974 (19 U.S.C. 2295).
       (B) Training described in section 236 of the Trade Act of 
     1974 (19 U.S.C. 2296), except that notwithstanding the 
     provisions of section 236(a)(2)(A) of that Act, the total 
     amount of payments for training under this section for any 
     fiscal year shall not exceed $12,500,000.
       (C) Tobacco worker readjustment allowances, which shall be 
     provided in the same manner as trade readjustment allowances 
     are provided under part I of subchapter B of chapter 2 of 
     title II of the Trade Act of 1974 (19 U.S.C. 2291 et seq.), 
     except that--
       (i) the provisions of sections 231(a)(5)(C) and 231(c) of 
     that Act (19 U.S.C. 2291(a)(5)(C), 2291(c)), authorizing the 
     payment of trade readjustment allowances on a finding that it 
     is not feasible or appropriate to approve a training program 
     for a worker, shall not be applicable to payment of 
     allowances under this section; and
       (ii) notwithstanding the provisions of section 233(b) of 
     that Act (19 U.S.C. 2293(b)), in order for a worker to 
     qualify for tobacco readjustment allowances under this 
     section, the worker shall be enrolled in a training program 
     approved by the Secretary of the type described in section 
     236(a) of that Act (19 U.S.C. 2296(a)) by the later of--

       (I) the last day of the 16th week of the worker's initial 
     unemployment compensation benefit period; or
       (II) the last day of the 6th week after the week in which 
     the Secretary issues a certification covering the worker.

     In cases of extenuating circumstances relating to enrollment 
     of a worker in a training program under this section, the 
     Secretary may extend the time for enrollment for a period of 
     not to exceed 30 days.
       (D) Job search allowances of the type described in section 
     237 of the Trade Act of 1974 (19 U.S.C. 2297).
       (E) Relocation allowances of the type described in section 
     238 of the Trade Act of 1974 (19 U.S.C. 2298).
       (e) Ineligibility of Individuals Receiving Payments for 
     Lost Tobacco Quota.--No benefits or services may be provided 
     under this section to any individual who has received 
     payments for lost tobacco quota under section 1021.
       (f) Funding.--Of the amounts appropriated to carry out this 
     title, the Secretary may use not to exceed $25,000,000 for 
     each of fiscal years 1999 through 2008 to provide assistance 
     under this section.
       (g) Effective Date.--This section shall take effect on the 
     date that is the later of--
       (1) October l, 1998; or
       (2) the date of enactment of this Act.
       (h) Termination Date.--No assistance, vouchers, allowances, 
     or other payments may be provided under this section after 
     the date that is the earlier of--
       (1) the date that is 10 years after the effective date of 
     this section under subsection (g); or
       (2) the date on which legislation establishing a program 
     providing dislocated workers with comprehensive assistance 
     substantially similar to the assistance provided by this 
     section becomes effective.

     SEC. 1032. FARMER OPPORTUNITY GRANTS.

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

                 ``Subpart 9--Farmer Opportunity Grants

     ``SEC. 420D. STATEMENT OF PURPOSE.

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

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

       ``(a) Program Authority and Method of Distribution.--
       ``(1) Program authority.--From amounts made available under 
     section 1011(d)(5) of the LEAF Act, the Secretary, during the 
     period beginning July 1, 1999, and ending September 30, 2024, 
     shall pay to each eligible institution such sums as may be 
     necessary to pay to each eligible student (determined in 
     accordance with section 420F) for each academic year during 
     which that student is in attendance at an institution of 
     higher education, as an undergraduate, a farmer opportunity 
     grant in the amount for which that student is eligible, as 
     determined pursuant to subsection (b). Not less than 85 
     percent of the sums shall be advanced to eligible 
     institutions prior to the start of each payment period and 
     shall be based on an amount requested by the institution as 
     needed to pay eligible students, except that this sentence 
     shall not be construed to limit the authority of the 
     Secretary to place an institution on a reimbursement system 
     of payment.
       ``(2) Construction.--Nothing in this section shall be 
     construed to prohibit the Secretary from paying directly to 
     students, in advance of the beginning of the academic term, 
     an amount for which the students are eligible, in cases where 
     the eligible institution elects not to participate in the 
     disbursement system required by paragraph (1).
       ``(3) Designation.--Grants made under this subpart shall be 
     known as `farmer opportunity grants'.
       ``(b) Amount of Grants.--
       ``(1) Amounts.--
       ``(A) In general.--The amount of the grant for a student 
     eligible under this subpart shall be--
       ``(i) $1,700 for each of the academic years 1999-2000 
     through 2003-2004;
       ``(ii) $2,000 for each of the academic years 2004-2005 
     through 2008-2009;
       ``(iii) $2,300 for each of the academic years 2009-2010 
     through 2013-2014;
       ``(iv) $2,600 for each of the academic years 2014-2015 
     through 2018-2019; and
       ``(v) $2,900 for each of the academic years 2019-2020 
     through 2023-2024.
       ``(B) Part-time rule.--In any case where a student attends 
     an institution of higher education on less than a full-time 
     basis (including a student who attends an institution of 
     higher education on less than a half-time basis) during any 
     academic year, the amount of the grant for which that student 
     is eligible shall be reduced in proportion to the degree to 
     which that student is not so attending on a full-time basis, 
     in accordance with a schedule of reductions established by 
     the Secretary for the purposes of this subparagraph, computed 
     in accordance with this subpart. The schedule of reductions 
     shall be established by regulation and published in the 
     Federal Register.
       ``(2) Maximum.--No grant under this subpart shall exceed 
     the cost of attendance (as described in section 472) at the 
     institution at which that student is in attendance. If, with 
     respect to any student, it is determined that the amount of a 
     grant exceeds the cost of attendance for that year, the 
     amount of the grant shall be reduced to an amount equal to 
     the cost of attendance at the institution.
       ``(3) Prohibition.--No grant shall be awarded under this 
     subpart to any individual who

[[Page S5980]]

     is incarcerated in any Federal, State, or local penal 
     institution.
       ``(c) Period of Eligibility for Grants.--
       ``(1) In general.--The period during which a student may 
     receive grants shall be the period required for the 
     completion of the first undergraduate baccalaureate course of 
     study being pursued by that student at the institution at 
     which the student is in attendance, except that any period 
     during which the student is enrolled in a noncredit or 
     remedial course of study as described in paragraph (2) shall 
     not be counted for the purpose of this paragraph.
       ``(2) Construction.--Nothing in this section shall be 
     construed to--
       ``(A) exclude from eligibility courses of study that are 
     noncredit or remedial in nature and that are determined by 
     the institution to be necessary to help the student be 
     prepared for the pursuit of a first undergraduate 
     baccalaureate degree or certificate or, in the case of 
     courses in English language instruction, to be necessary to 
     enable the student to utilize already existing knowledge, 
     training, or skills; and
       ``(B) exclude from eligibility programs of study abroad 
     that are approved for credit by the home institution at which 
     the student is enrolled.
       ``(3) Prohibition.--No student is entitled to receive 
     farmer opportunity grant payments concurrently from more than 
     1 institution or from the Secretary and an institution.
       ``(d) Applications for Grants.--
       ``(1) In general.--The Secretary shall from time to time 
     set dates by which students shall file applications for 
     grants under this subpart. The filing of applications under 
     this subpart shall be coordinated with the filing of 
     applications under section 401(c).
       ``(2) Information and assurances.--Each student desiring a 
     grant for any year shall file with the Secretary an 
     application for the grant containing such information and 
     assurances as the Secretary may deem necessary to enable the 
     Secretary to carry out the Secretary's functions and 
     responsibilities under this subpart.
       ``(e) Distribution of Grants to Students.--Payments under 
     this section shall be made in accordance with regulations 
     promulgated by the Secretary for such purpose, in such manner 
     as will best accomplish the purpose of this section. Any 
     disbursement allowed to be made by crediting the student's 
     account shall be limited to tuition and fees and, in the case 
     of institutionally owned housing, room and board. The student 
     may elect to have the institution provide other such goods 
     and services by crediting the student's account.
       ``(f) Insufficient Funding.--If, for any fiscal year, the 
     funds made available to carry out this subpart are 
     insufficient to satisfy fully all grants for students 
     determined to be eligible under section 420F, the amount of 
     the grant provided under subsection (b) shall be reduced on a 
     pro rata basis among all eligible students.
       ``(g) Treatment of Institutions and Students Under Other 
     Laws.--Any institution of higher education that enters into 
     an agreement with the Secretary to disburse to students 
     attending that institution the amounts those students are 
     eligible to receive under this subpart shall not be deemed, 
     by virtue of the agreement, to be a contractor maintaining a 
     system of records to accomplish a function of the Secretary. 
     Recipients of farmer opportunity grants shall not be 
     considered to be individual grantees for purposes of the 
     Drug-Free Workplace Act of 1988 (41 U.S.C. 701 et seq.).

     ``SEC. 420F. STUDENT ELIGIBILITY.

       ``(a) In General.--In order to receive any grant under this 
     subpart, a student shall--
       ``(1) be a member of a tobacco farm family in accordance 
     with subsection (b);
       ``(2) be enrolled or accepted for enrollment in a degree, 
     certificate, or other program (including a program of study 
     abroad approved for credit by the eligible institution at 
     which the student is enrolled) leading to a recognized 
     educational credential at an institution of higher education 
     that is an eligible institution in accordance with section 
     487, and not be enrolled in an elementary or secondary 
     school;
       ``(3) if the student is presently enrolled at an 
     institution of higher education, be maintaining satisfactory 
     progress in the course of study the student is pursuing in 
     accordance with subsection (c);
       ``(4) not owe a refund on grants previously received at any 
     institution of higher education under this title, or be in 
     default on any loan from a student loan fund at any 
     institution provided for in part D, or a loan made, insured, 
     or guaranteed by the Secretary under this title for 
     attendance at any institution;
       ``(5) file with the institution of higher education that 
     the student intends to attend, or is attending, a document, 
     that need not be notarized, but that shall include--
       ``(A) a statement of educational purpose stating that the 
     money attributable to the grant will be used solely for 
     expenses related to attendance or continued attendance at the 
     institution; and
       ``(B) the student's social security number; and
       ``(6) be a citizen of the United States.
       ``(b) Tobacco Farm Families.--
       ``(1) In general.--For the purpose of subsection (a)(1), a 
     student is a member of a tobacco farm family if during 
     calendar year 1998 the student was--
       ``(A) an individual who--
       ``(i) is a participating tobacco producer (as defined in 
     section 1002 of the LEAF Act) who is a principal producer of 
     tobacco on a farm; or
       ``(ii) is otherwise actively engaged in the production of 
     tobacco;
       ``(B) a spouse, son, daughter, stepson, or stepdaughter of 
     an individual described in subparagraph (A);
       ``(C) an individual who was a dependent (within the meaning 
     of section 152 of the Internal Revenue Code of 1986) of an 
     individual described in subparagraph (A).
       ``(2) Administration.--On request, the Secretary of 
     Agriculture shall provide to the Secretary such information 
     as is necessary to carry out this subsection.
       ``(c) Satisfactory Progress.--
       ``(1) In general.--For the purpose of subsection (a)(3), a 
     student is maintaining satisfactory progress if--
       ``(A) the institution at which the student is in attendance 
     reviews the progress of the student at the end of each 
     academic year, or its equivalent, as determined by the 
     institution; and
       ``(B) the student has at least a cumulative C average or 
     its equivalent, or academic standing consistent with the 
     requirements for graduation, as determined by the 
     institution, at the end of the second such academic year.
       ``(2) Special rule.--Whenever a student fails to meet the 
     eligibility requirements of subsection (a)(3) as a result of 
     the application of this subsection and subsequent to that 
     failure the student has academic standing consistent with the 
     requirements for graduation, as determined by the 
     institution, for any grading period, the student may, subject 
     to this subsection, again be eligible under subsection (a)(3) 
     for a grant under this subpart.
       ``(3) Waiver.--Any institution of higher education at which 
     the student is in attendance may waive paragraph (1) or (2) 
     for undue hardship based on--
       ``(A) the death of a relative of the student;
       ``(B) the personal injury or illness of the student; or
       ``(C) special circumstances as determined by the 
     institution.
       ``(d) Students Who Are Not Secondary School Graduates.--In 
     order for a student who does not have a certificate of 
     graduation from a school providing secondary education, or 
     the recognized equivalent of the certificate, to be eligible 
     for any assistance under this subpart, the student shall meet 
     either 1 of the following standards:
       ``(1) Examination.--The student shall take an independently 
     administered examination and shall achieve a score, specified 
     by the Secretary, demonstrating that the student can benefit 
     from the education or training being offered. The examination 
     shall be approved by the Secretary on the basis of compliance 
     with such standards for development, administration, and 
     scoring as the Secretary may prescribe in regulations.
       ``(2) Determination.--The student shall be determined as 
     having the ability to benefit from the education or training 
     in accordance with such process as the State shall prescribe. 
     Any such process described or approved by a State for the 
     purposes of this section shall be effective 6 months after 
     the date of submission to the Secretary unless the Secretary 
     disapproves the process. In determining whether to approve or 
     disapprove the process, the Secretary shall take into account 
     the effectiveness of the process in enabling students without 
     secondary school diplomas or the recognized equivalent to 
     benefit from the instruction offered by institutions 
     utilizing the process, and shall also take into account the 
     cultural diversity, economic circumstances, and educational 
     preparation of the populations served by the institutions.
       ``(e) Special Rule for Correspondence Courses.--A student 
     shall not be eligible to receive a grant under this subpart 
     for a correspondence course unless the course is part of a 
     program leading to an associate, bachelor, or graduate 
     degree.
       ``(f) Courses Offered Through Telecommunications.--
       ``(1) Relation to correspondence courses.--A student 
     enrolled in a course of instruction at an eligible 
     institution of higher education (other than an institute or 
     school that meets the definition in section 521(4)(C) of the 
     Carl D. Perkins Vocational and Applied Technology Education 
     Act (20 U.S.C. 2471(4)(C))) that is offered in whole or in 
     part through telecommunications and leads to a recognized 
     associate, bachelor, or graduate degree conferred by the 
     institution shall not be considered to be enrolled in 
     correspondence courses unless the total amount of 
     telecommunications and correspondence courses at the 
     institution equals or exceeds 50 percent of the courses.
       ``(2) Restriction or reductions of financial aid.--A 
     student's eligibility to receive a grant under this subpart 
     may be reduced if a financial aid officer determines under 
     the discretionary authority provided in section 479A that 
     telecommunications instruction results in a substantially 
     reduced cost of attendance to the student.
       ``(3) Definition.--For the purposes of this subsection, the 
     term `telecommunications' means the use of television, audio, 
     or computer transmission, including open broadcast, closed 
     circuit, cable, microwave, or satellite, audio conferencing, 
     computer conferencing, or video cassettes or discs, except 
     that the term does not include a course that is delivered 
     using video cassette or disc recordings at the institution 
     and that is not

[[Page S5981]]

     delivered in person to other students of that institution.
       ``(g) Study Abroad.--Nothing in this subpart shall be 
     construed to limit or otherwise prohibit access to study 
     abroad programs approved by the home institution at which a 
     student is enrolled. An otherwise eligible student who is 
     engaged in a program of study abroad approved for academic 
     credit by the home institution at which the student is 
     enrolled shall be eligible to receive a grant under this 
     subpart, without regard to whether the study abroad program 
     is required as part of the student's degree program.
       ``(h) Verification of Social Security Number.--The 
     Secretary, in cooperation with the Commissioner of Social 
     Security, shall verify any social security number provided by 
     a student to an eligible institution under subsection 
     (a)(5)(B) and shall enforce the following conditions:
       ``(1) Pending verification.--Except as provided in 
     paragraphs (2) and (3), an institution shall not deny, 
     reduce, delay, or terminate a student's eligibility for 
     assistance under this subpart because social security number 
     verification is pending.
       ``(2) Denial or termination.--If there is a determination 
     by the Secretary that the social security number provided to 
     an eligible institution by a student is incorrect, the 
     institution shall deny or terminate the student's eligibility 
     for any grant under this subpart until such time as the 
     student provides documented evidence of a social security 
     number that is determined by the institution to be correct.
       ``(3) Construction.--Nothing in this subsection shall be 
     construed to permit the Secretary to take any compliance, 
     disallowance, penalty, or other regulatory action against--
       ``(A) any institution of higher education with respect to 
     any error in a social security number, unless the error was a 
     result of fraud on the part of the institution; or
       ``(B) any student with respect to any error in a social 
     security number, unless the error was a result of fraud on 
     the part of the student.''.
                          Subtitle D--Immunity

     SEC. 1041. GENERAL IMMUNITY FOR TOBACCO PRODUCERS AND TOBACCO 
                   WAREHOUSE OWNERS.

       Notwithstanding any other provision of this title, a 
     participating tobacco producer, tobacco-related growers 
     association, or tobacco warehouse owner or employee may not 
     be subject to liability in any Federal or State court for any 
     cause of action resulting from the failure of any tobacco 
     product manufacturer, distributor, or retailer to comply with 
     the National Tobacco Policy and Youth Smoking Reduction Act.
                       Subtitle E--Applicability

     SEC. 1051. APPLICABILITY OF TITLE XV.

       Notwithstanding any other provision of this Act, title XV 
     of this Act shall have no force or effect.
                                 ______
                                 

              FORD (AND OTHERS) AMENDMENTS NOS. 2629-2630

  (Ordered to lie on the table.)
  Mr. FORD (for himself, Mr. Hollings, and Mr. Robb) submitted two 
amendments intended to be proposed by them to the bill, S. 1415, supra; 
as follows:

                           Amendment No. 2629

       Beginning after line 14 on page 444, strike through the end 
     of the bill.
                                  ____


                           Amendment No. 2630

       On page 457, beginning with line 1, strike through line 16 
     on page 482.
                                 ______
                                 

                     FORD AMENDMENTS NOS. 2631-2632

  (Ordered to lie on the table.)
  Mr. FORD submitted two amendments intended to be proposed by him to 
amendment No. 2435 proposed by him to the bill, S. 1415, supra; as 
follows:

                           Amendment No. 2631

       Beginning on page 444, line 11, strike everything through 
     the end of the bill and insert the following:
       (E) Secretary.--The term ``Secretary'' means the Secretary 
     of the Treasury, except where the context otherwise requires.

     SEC. 1418. EFFECTIVE DATE.

       Notwithstanding any other provision of this Act, this title 
     shall take effect one day after the date of enactment of this 
     Act.
                                  ____


                           Amendment No. 2632

       In lieu of the matter proposed to be inserted, insert the 
     following:
       (E) Secretary.--The term ``Secretary'' means the Secretary 
     of the Treasury, except where the context otherwise requires.
                                 ______
                                 

               LAUTENBERG (AND SMITH) AMENDMENT NO. 2633

  (Ordered to lie on the table.)
  Mr. LAUTENBERG (for himself and Mr. Smith of Oregon) submitted an 
amendment intended to be proposed by them to the bill, S. 1415, supra; 
as follows:

       On page 215, line 21, insert ``A local government within a 
     State shall have the authority to promulgate or enforce a law 
     that provides additional protection from health hazards from 
     environmental tobacco smoke to the protection provided under 
     this title or, in the case of a local government situated in 
     a State that has opted out of this title pursuant to section 
     507, provided under the law of such State.'' after the 
     period.
                                 ______
                                 

                DASCHLE (AND OTHERS) AMENDMENT NO. 2634

  Mr. KERRY (for Mr. Daschle, for himself, and Mr. Biden) proposed an 
amendment to the bill, S. 1415, supra; as follows:

       In lieu of the matter proposed to be inserted, insert the 
     following:

                   TITLE __--DRUG-FREE NEIGHBORHOODS

     SEC. __01. SHORT TITLE.

       This title may be cited as the ``Drug-Free Neighborhoods 
     Act''.

         Subtitle A--Stopping the Flow of Drugs at Our Borders

            CHAPTER 1--INCREASED RESOURCES FOR INTERDICTION

     SEC. __11. INCREASED RESOURCES FOR INTERDICTION.

       (a) Customs.--In addition to other amounts appropriated for 
     the United States Customs Service for a fiscal year, there is 
     authorized to be appropriated, $500,000,000 for each of the 
     fiscal years 1999 through 2003 to be used to monitor border 
     ports of entry to stop the flow of illegal drugs into the 
     United States, of which not less than 20 percent of such 
     funds shall be used to provide assistance to State and local 
     law enforcement entities.
       (b) Coast Guard.--In addition to other amounts appropriated 
     for the United States Coast Guard for a fiscal year, there is 
     authorized to be appropriated, $400,000,000 for each of the 
     fiscal years 1999 through 2003 to be used to expand 
     activities to stop the flow of illegal drugs into the United 
     States.
       (c) Department of Defense.--In addition to other amounts 
     appropriated for the Department of Defense for a fiscal year, 
     there is authorized to be appropriated, $470,000,000 for each 
     of the fiscal years 1999 through 2003 to be used to expand 
     activities to stop the flow of illegal drugs into the United 
     States, of which not less than 20 percent of such funds shall 
     be used to provide assistance to State and local law 
     enforcement entities.

                      CHAPTER 2--DRUG-FREE BORDERS

     SEC. __15. SHORT TITLE.

       This chapter may be cited as the ``Drug-Free Borders Act of 
     1998''.

     SEC. __16. FELONY PUNISHMENT FOR VIOLENCE COMMITTED ALONG THE 
                   UNITED STATES BORDER.

       (a) In General.--Chapter 27 of title 18, United States 
     Code, is amended by adding at the end the following:

     ``Sec. 554. Violence while eluding inspection or during 
       violation of arrival, reporting, entry, or clearance 
       requirements

       ``(a) In General.--Whoever attempts to commit or commits a 
     crime of violence during and in relation to--
       ``(1) attempting to elude or eluding customs, immigration, 
     or agriculture inspection or failing to stop at the command 
     of an officer of customs, immigration, or animal and plant 
     and health inspection services; or
       ``(2) an intentional violation of arrival, reporting, 
     entry, or clearance requirements, as set forth in a provision 
     of law listed in subsection (c);

     shall be fined under this title or imprisoned for not more 
     than 5 years, or both, except that if bodily injury (as 
     defined in section 1365(g) of this title) results, the 
     maximum term of imprisonment is 10 years, and if death 
     results, the offender may imprisoned for any term of years or 
     for life, and may be sentenced to death.
       ``(b) Conspiracy.--If 2 or more persons conspire to commit 
     an offense under subsection (a), and 1 or more of such 
     persons do any act to effect the object of the conspiracy, 
     each shall be punishable as a principal, except that the 
     sentence of death may not be imposed.
       ``(c) Provisions of Law.--The provisions of law referred to 
     in subsection (a) are--
       ``(1) section 107 of the Federal Plant Pest Act (7 U.S.C. 
     150ff));
       ``(2) section 7 of the Federal Noxious Weed Act of 1974 (7 
     U.S.C. 2806);
       ``(3) section 431, 433, 434, or 459 of the Tariff Act of 
     1930 (19 U.S.C. 1431, 1433, 1434, 1459);
       ``(4) section 6 of the Act of August 30, 1890 (21 U.S.C. 
     105; Chapter 839, 26 Stat. 416);
       ``(5) section 2 of the Act of February 2, 1903 (21 U.S.C. 
     111; Chapter 349, 32 Stat. 791)
       ``(6) section 231, 232, 234, 235, 236, 237, or 238 of the 
     Immigration and Nationality Act (8 U.S.C. 1221, 1222, 1224, 
     1225, 1226, 1227, 1228);
       ``(7) section 4197 of the Revised Statutes of the United 
     States (46 U.S.C. App. 91); or
       ``(8) section 111 of title 21, United States Code.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of chapter 27 of title 18, United States Code, is 
     amended by inserting at the end the following:

``554. Violence while eluding inspection or during violation of 
              arrival, reporting, entry, or clearance requirements.''.

     SEC. __17. INCREASED PENALTY FOR FALSE STATEMENT OFFENSE.

       Section 542 of title 18, United States Code, is amended by 
     striking ``two years'' and inserting ``5 years''.

[[Page S5982]]

     SEC. __18. SANCTIONS FOR FAILURE TO LAND OR HEAVE TO, 
                   OBSTRUCTING A LAWFUL BOARDING, AND PROVIDING 
                   FALSE INFORMATION.

       (a) In General.--Chapter 109 of title 18, United States 
     Code, is amended by adding at the end the following:

     ``Sec. 2237. Sanctions for failure to heave to; sanctions for 
       obstruction of boarding and providing false information

       ``(a) Failure to Heave To.--
       ``(1) In general.--It shall be unlawful for the master, 
     operator, or person in charge of a vessel of the United 
     States or a vessel subject to the jurisdiction of the United 
     States, to fail to obey an order to heave to that vessel on 
     being ordered to do so by an authorized Federal law 
     enforcement officer.
       ``(2) Obstruction.--It shall be unlawful for any person on 
     board a vessel of the United States or a vessel subject to 
     the jurisdiction of the United States knowingly or willfully 
     to--
       ``(A) fail to comply with an order of an authorized Federal 
     law enforcement officer in connection with the boarding of 
     the vessel;
       ``(B) impede or obstruct a boarding or arrest, or other law 
     enforcement action authorized by any Federal law; or
       ``(C) provide false information to a Federal law 
     enforcement officer during a boarding of a vessel regarding 
     the vessel's destination, origin, ownership, registration, 
     nationality, cargo, or crew.
       ``(3) Aircraft.--
       ``(A) In general.--It shall be unlawful for the pilot, 
     operator, or person in charge of an aircraft which has 
     crossed the border of the United States, or an aircraft 
     subject to the jurisdiction of the United States operating 
     outside the United States, to fail to obey an order to land 
     by an authorized Federal law enforcement officer who is 
     enforcing the laws of the United States relating to 
     controlled substances, as that term is defined in section 
     102(6) of the Controlled Substances Act (21 U.S.C. 802(6)), 
     or relating to money laundering (sections 1956-57 of this 
     title).
       ``(B) Regulations.--The Administrator of the Federal 
     Aviation Administration, in consultation with the 
     Commissioner of Customs and the Attorney General, shall 
     prescribe regulations governing the means by, and 
     circumstances under which a Federal law enforcement officer 
     may communicate an order to land to a pilot, operator, or 
     person in charge of an aircraft. Such regulations shall 
     ensure that any such order is clearly communicated in 
     accordance with applicable international standards. Further, 
     such regulations shall establish guidelines based on observed 
     conduct, prior information, or other circumstances for 
     determining when an officer may use the authority granted 
     under subparagraph (A).
       ``(b) No Limitation of Existing Authority.--This section 
     does not limit in any way the preexisting authority of a 
     customs officer under section 581 of the Tariff Act of 1930 
     or any other provision of law enforced or administered by the 
     Customs Service, or the preexisting authority of any Federal 
     law enforcement officer under any law of the United States to 
     order an aircraft to land or a vessel to heave to.
       ``(c) Foreign Nations.--A foreign nation may consent or 
     waive objection to the enforcement of United States law by 
     the United States under this section by international 
     agreement or, on a case-by-case basis, by radio, telephone, 
     or similar oral or electronic means. Consent or waiver may be 
     proven by certification of the Secretary of State or the 
     Secretary's designee.
       ``(d) Definitions.--In this section:
       ``(1) Federal law enforcement officer.--The term `Federal 
     law enforcement officer' has the meaning set forth in section 
     115 of this title.
       ``(2) Heave to.--The term `heave to' means to cause a 
     vessel to slow or come to a stop to facilitate a law 
     enforcement boarding by adjusting the course and speed of the 
     vessel to account for the weather conditions and sea state.
       ``(3) Subject to the jurisdiction of the united states.--An 
     aircraft `subject to the jurisdiction of the United States' 
     includes--
       ``(A) an aircraft located over the United States or the 
     customs waters of the United States;
       ``(B) an aircraft located in the airspace of a foreign 
     nation, where that nation consents to the enforcement of 
     United States law by the United States; and
       ``(C) over the high seas, an aircraft without nationality, 
     an aircraft of United States registry, or an aircraft 
     registered in a foreign nation that has consented or waived 
     objection to the enforcement of United States law by the 
     United States.
       ``(4) Vessel.--The terms `vessel of the United States' and 
     `vessel subject to the jurisdiction of the United States' 
     have the meanings set forth for these terms, respectively, in 
     the Maritime Drug Law Enforcement Act (46 App. U.S.C. 1903).
       ``(5) Without nationality.--An aircraft `without 
     nationality' includes--
       ``(A) an aircraft aboard which the pilot, operator, or 
     person in charge makes a claim of registry, which claim is 
     denied by the nation whose registry is claimed; and
       ``(B) an aircraft aboard which the pilot, operator, or 
     person in charge fails, upon request of an officer of the 
     United States empowered to enforce applicable provisions of 
     United States law, to make a claim of registry for that 
     aircraft.
       ``(e) Fines or Imprisonment.--Whoever intentionally 
     violates this section shall be fined under this title or 
     imprisoned for not more than 5 years, or both.
       ``(f) Seizure and Forfeiture.--A aircraft or vessel that is 
     used in violation of this section may be seized and forfeited 
     to the United States. The laws relating to the seizure, 
     summary and judicial forfeiture, and condemnation of property 
     for violation of the customs laws, the disposition of such 
     property or the proceeds from the sale thereof, the remission 
     or mitigation of such forfeitures, and the compromise of 
     claims, shall apply to seizures and forfeitures undertaken, 
     or alleged to have been undertaken, under any of the 
     provisions of this section; except that such duties as are 
     imposed upon the customs officer or any other person with 
     respect to the seizure and forfeiture of property under the 
     customs laws shall be performed with respect to seizures and 
     forfeitures of property under this section by such officers, 
     agents, or other persons as may be authorized or designated 
     for that purpose. An aircraft or vessel that is used in 
     violation of this section is also liable in rem for any fine 
     imposed under this section.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of chapter 109 of title 18, United States Code, is 
     amended by adding at the end the following:

``2237. Sanctions for failure to heave to; sanctions for obstruction of 
              boarding or providing false information.''.

     SEC. __19. CIVIL PENALTIES TO SUPPORT MARITIME LAW 
                   ENFORCEMENT.

       (a) In General.--Chapter 17 of title 14, United States 
     Code, is amended by adding at the end the following:

     ``Sec. 676. Civil penalty for failure to comply with vessel 
       boarding

       ``(a) In General.--Any person that engages in conduct that 
     violates section 2237(a)(1) or (2) of title 18, United States 
     Code, shall be liable to the United States Government--
       ``(1) for a civil penalty of not more than $25,000, in the 
     case of an intentional violation; or
       ``(2) for a civil penalty of not more than $15,000, in the 
     case of any other violation.
       ``(b) Seizure or Forfeiture.--A vessel used to engage in 
     conduct for which a penalty is imposed under subsection (a) 
     is liable in rem for that penalty and may be seized, 
     forfeited, and sold in accordance with customs laws.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of chapter 17 of title 14, United States Code, is 
     amended by adding at the end the following new item:

``676. Civil penalty for failure to comply with vessel boarding.''.

     SEC. __20. INCREASED NUMBER OF BORDER PATROL AGENTS.

       Section 101(a) of the Illegal Immigration Reform and 
     Immigrant Responsibility Act of 1996 (Public Law 104-208; 110 
     Stat. 3009-553) is amended to read as follows:
       ``(a) Increased Number of Border Patrol Agents.--The 
     Attorney General in each of fiscal years 1999, 2000, 2001, 
     2002, and 2003 shall increase by not less than 1,500 the 
     number of positions for full-time, active-duty border patrol 
     agents within the Immigration and Naturalization Service 
     above the number of such positions for which funds were 
     allotted for the preceding fiscal year, to achieve a level of 
     15,000 positions by fiscal year 2003.''.

     SEC. __21. BORDER PATROL PURSUIT POLICY.

       A border patrol agent of the United States Border Patrol 
     may not cease pursuit of an alien who the agent suspects has 
     unlawfully entered the United States, or an individual who 
     the agent suspects has unlawfully imported a narcotic into 
     the United States, until State or local law enforcement 
     authorities are in pursuit of the alien or individual and 
     have the alien or individual in their visual range.

     SEC. __22. ROTATION OF DUTY STATIONS AND TEMPORARY DUTY 
                   ASSIGNMENTS OF OFFICERS OF THE UNITED STATES 
                   CUSTOMS SERVICE.

       Section 5 of the Act of February 13, 1911 (19 U.S.C. 267) 
     is amended--
       (1) by redesignating subsection (f) as subsection (g); and
       (2) by inserting after subsection (e) the following:
       ``(f) Rotation of Duty Stations and Temporary Duty 
     Assignments of Customs Officers.--
       ``(1) In general.--Notwithstanding any other provision of 
     law or Executive order, beginning October 1, 1999, in order 
     to ensure the integrity of the United States Customs Service, 
     the Secretary of the Treasury--
       ``(A) may transfer up to 5 percent of the customs officers 
     employed as of the beginning of each fiscal year to new duty 
     stations in that fiscal year on a permanent basis; and
       ``(B) may transfer customs officers to temporary duty 
     assignments for not more than 90 days.
       ``(2) Voluntary and other transfers.--A transfer of a 
     customs officer to a new duty station or a temporary duty 
     assignment under paragraph (1) is in addition to any 
     voluntary transfer or transfer for other reasons.''.

     SEC. __23. EFFECT OF COLLECTIVE BARGAINING AGREEMENTS ON 
                   ABILITY OF UNITED STATES CUSTOMS SERVICE TO 
                   INTERDICT CONTRABAND.

       Section 5 of the Act of February 13, 1911 (19 U.S.C. 267), 
     as amended by this Act, is further amended--
       (1) by redesignating subsection (g) as subsection (h); and

[[Page S5983]]

       (2) by inserting after subsection (f) the following:
       ``(g) Effect of Collective Bargaining Agreements on Ability 
     of Customs Service To Interdict Contraband.--
       ``(1) Sense of the congress.--It is the sense of the 
     Congress that collective bargaining agreements should not 
     have any adverse impact on the ability of the United States 
     Customs Service to interdict contraband, including controlled 
     substances.
       ``(2) Provisions causing adverse impact to interdict 
     contraband.--
       ``(A) Requirement to meet.--If the Commissioner of the 
     Customs Service or an exclusive representative of Customs 
     Service employees determines that any collective bargaining 
     agreement between the parties has an adverse impact upon the 
     interdiction of contraband, including controlled substances, 
     the parties shall meet to address the issue.
       ``(B) Failure to reach agreement.--If the parties do not 
     reach agreement within 90 days of the date of the 
     determination of adverse impact, either party may enlist the 
     services of the Federal Mediation and Conciliation Service to 
     facilitate the resolution of the dispute. If an impasse is 
     declared, either party may pursue such impasse with the 
     Federal Service Impasses Panel pursuant to section 7119(c) of 
     title 5, United States Code, for ultimate resolution.
       ``(C) Rule of construction.--Nothing in this paragraph 
     shall be construed to limit the authority of the Customs 
     Service to implement immediately any proposed changes without 
     waiting 90 days, if emergency circumstances, as defined in 
     section 7106(a)(2)(D) of title 5, United States Code, warrant 
     such immediate implementation, or if an impasse is reached in 
     less than 90 days.''.

    Subtitle B--Protecting Our Neighborhoods and Schools from Drugs

                   CHAPTER 1--DRUG-FREE TEEN DRIVERS

     SEC. __25. SHORT TITLE.

       This subtitle may be cited as the ``Drug Free Teenage 
     Drivers Act''.

     SEC. __26. DEMONSTRATION PROGRAM.

       The National Highway Traffic Safety Administration shall 
     establish a demonstration program in several States to 
     provide voluntary drug testing for all teenager applicants 
     (or other first time applicants for a driver's license 
     regardless of age) for a driver's license. Information 
     respecting an applicant's choice not to take the drug test or 
     the result of the drug test on the applicant shall be made 
     available to the applicant's automobile insurance company. If 
     an applicant tests positive in the drug test, the State in 
     which the program is established will not issue a license to 
     the applicant and will require the applicant to complete a 
     State drug treatment program and to not test positive in a 
     drug test before reapplying for a license.

     SEC. __27. INCENTIVE GRANT PROGRAM.

       (a) In General.--The Secretary of Transportation shall 
     establish an incentive grant program for States to assist the 
     States in improving their laws relating to controlled 
     substances and driving.
       (b) Grant Requirements.--To qualify for a grant under 
     subsection (a) a State shall carry out the following:
       (1) Enact, actively enforce, and publicize a law which 
     makes it illegal to drive in the State with any measurable 
     amount of an illegal controlled substance in the driver's 
     body. An illegal controlled substance is a controlled 
     substance for which an individual does not have a legal 
     written prescription. An individual who is convicted of such 
     illegal driving shall be referred to appropriate services, 
     including intervention, counselling, and treatment.
       (2) Enact, actively enforce, and publicize a law which 
     makes it illegal to drive in the State when driving is 
     impaired by the presence of any drug. The State shall provide 
     that in the enforcement of such law, a driver shall be tested 
     for the presence of a drug when there is evidence of impaired 
     driving and a driver will have the driver's license 
     suspended. An individual who is convicted of such illegal 
     driving shall be referred to appropriate services, including 
     intervention, counselling, and treatment.
       (3) Enact, actively enforce, and publicize a law which 
     authorizes the suspension of a driver's license if the driver 
     is convicted of any criminal offense relating to drugs.
       (4) Enact a law which provides that beginning driver 
     applicants and other individuals applying for or renewing a 
     driver's license will be provided information about the laws 
     referred to in paragraphs (1), (2), and (3) and will be 
     required to answer drug-related questions on their 
     applications.
       (c) Use.--A State may only use a grant under subsection (a) 
     to implement and enforce the programs described in subsection 
     (b).

     SEC. __28. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated, $10,000,000 for 
     each of the fiscal years 1999 through 2003 to carry out this 
     chapter.

                      CHAPTER 2--DRUG-FREE SCHOOLS

     SEC. __31. FINDINGS.

       Congress finds that--
       (1) the continued presence in schools of violent students 
     who are a threat to both teachers and other students is 
     incompatible with a safe learning environment;
       (2) unsafe school environments place students who are 
     already at risk of school failure for other reasons in 
     further jeopardy;
       (3) recently, over one-fourth of high school students 
     surveyed reported being threatened at school;
       (4) 2,000,000 more children are using drugs in 1997 than 
     were doing so a few short years prior to 1997;
       (5) nearly 1 out of every 20 students in 6th through 12th 
     grade uses drugs on school grounds;
       (6) more of our children are becoming involved with hard 
     drugs at earlier ages, as use of heroin and cocaine by 8th 
     graders has more than doubled since 1991; and
       (7) greater cooperation between schools, parents, law 
     enforcement, the courts, and the community is essential to 
     making our schools safe from drugs and violence.

 Subchapter A--Victim and Witness Assistance Programs for Teachers and 
                                Students

     SEC. __32. AMENDMENTS TO VICTIMS OF CRIME ACT OF 1984.

       (a) Victim Compensation.--Section 1403 of the Victims of 
     Crime Act of 1984 (42 U.S.C. 10602) is amended by adding at 
     the end the following:
       ``(f) Victims of School Violence.--
       ``(1) In general.--Notwithstanding any other provision of 
     law, an eligible crime victim compensation program may expend 
     funds appropriated under paragraph (2) to offer compensation 
     to elementary and secondary school students or teachers who 
     are victims of elementary and secondary school violence (as 
     school violence is defined under applicable State law).
       ``(2) Funding.--There is authorized to be appropriated such 
     sums as may be necessary to carry out paragraph (1).''.
       (b) Victim and Witness Assistance.--Section 1404(c) of the 
     Victims of Crime Act of 1984 (42 U.S.C. 10603(c)) is amended 
     by adding at the end the following:
       ``(5) Assistance for victims of and witnesses to school 
     violence.--Notwithstanding any other provision of law, the 
     Director may make a grant under this section for a 
     demonstration project or for training and technical 
     assistance services to a program that--
       ``(A) assists State educational agencies and local 
     educational agencies (as the terms are defined in section 
     14101 of the Elementary and Secondary Education Act of 1965 
     (20 U.S.C. 8801)) in developing, establishing, and operating 
     programs that are designed to protect victims of and 
     witnesses to incidents of elementary and secondary school 
     violence (as school violence is defined under applicable 
     State law), including programs designed to protect witnesses 
     testifying in school disciplinary proceedings; or
       ``(B) supports a student safety toll-free hotline that 
     provides students and teachers in elementary and secondary 
     schools with confidential assistance relating to the issues 
     of school crime, violence, drug dealing, and threats to 
     personal safety.''.

   Subchapter B--Innovative Programs to Protect Teachers and Students

     SEC. __35. DEFINITIONS.

       In this subchapter:
       (1) Elementary school, local educational agency, secondary 
     school, and state educational agency.--The terms ``elementary 
     school'', ``local educational agency'', ``secondary school'', 
     and ``State educational agency'' have the meanings given the 
     terms in section 14101 of the Elementary and Secondary 
     Education Act of 1965 (20 U.S.C. 8801).
       (2) Secretary.--The term ``Secretary'' means the Secretary 
     of Education.

     SEC. __36. AUTHORIZATION OF APPROPRIATIONS.

       There is authorized to be appropriated such sums as may be 
     necessary to carry out this subchapter.

     SEC. __37. AUTHORIZATION FOR REPORT CARDS ON SCHOOLS.

       (a) In General.--The Secretary is authorized to award 
     grants to States, State educational agencies, and local 
     educational agencies to develop, establish, or conduct 
     innovative programs to improve unsafe elementary schools or 
     secondary schools.
       (b) Priority.--The Secretary shall give priority to 
     awarding grants under subsection (a) to--
       (1) programs that provide parent and teacher notification 
     about incidents of physical violence, weapon possession, or 
     drug activity on school grounds as soon after the incident as 
     practicable;
       (2) programs that provide to parents and teachers an annual 
     report regarding--
       (A) the total number of incidents of physical violence, 
     weapon possession, and drug activity on school grounds;
       (B) the percentage of students missing 10 or fewer days of 
     school; and
       (C) a comparison, if available, to previous annual reports 
     under this paragraph, which comparison shall not involve a 
     comparison of more than 5 such previous annual reports; and
       (3) programs to enhance school security measures that may 
     include--
       (A) equipping schools with fences, closed circuit cameras, 
     and other physical security measures;
       (B) providing increased police patrols in and around 
     elementary schools and secondary schools, including canine 
     patrols; and
       (C) mailings to parents at the beginning of the school year 
     stating that the possession of a gun or other weapon, or the 
     sale of drugs in school, will not be tolerated by school 
     authorities.

     SEC. __38. APPLICATION.

       (a) In General.--Each State, State educational agency, or 
     local educational agency

[[Page S5984]]

     desiring a grant under this subchapter shall submit an 
     application to the Secretary at such time, in such manner, 
     and accompanied by such information as the Secretary may 
     require.
       (b) Contents.--Each application submitted under subsection 
     (a) shall contain an assurance that the State or agency has 
     implemented or will implement policies that--
       (1) provide protections for victims and witnesses to school 
     crime, including protections for attendance at school 
     disciplinary proceedings;
       (2) expel students who, on school grounds, sell drugs, or 
     who commit a violent offense that causes serious bodily 
     injury of another student or teacher; and
       (3) require referral to law enforcement authorities or 
     juvenile authorities of any student who on school grounds--
       (A) commits a violent offense resulting in serious bodily 
     injury; or
       (B) sells drugs.
       (c) Special Rule.--For purposes of paragraphs (2) and (3) 
     of subsection (b), State law shall determine what constitutes 
     a violent offense or serious bodily injury.

     SEC. __39. INNOVATIVE VOLUNTARY RANDOM DRUG TESTING PROGRAMS.

       Section 4116(b) of the Safe and Drug-Free Schools and 
     Communities Act of 1994 (20 U.S.C. 7116(b)) is amended--
       (1) in paragraph (9), by striking ``and'' after the 
     semicolon;
       (2) by redesignating paragraph (10) as paragraph (11); and
       (3) by inserting after paragraph (9) the following:
       ``(10) innovative voluntary random drug testing programs; 
     and''.

              Subchapter C--Parental Consent Drug Testing

     SEC. __40. GRANTS FOR PARENTAL CONSENT DRUG TESTING 
                   DEMONSTRATION PROJECTS.

       (a) In General.--The Administrator is authorized to award 
     grants to States, State educational agencies, and local 
     educational agencies to develop, establish, or conduct 
     programs for testing students for illegal drug use with prior 
     parental consent.
       (b) Guidelines.--The Administrator may award grants under 
     subsection (a) only to programs that substantially comply 
     with the following guidelines:
       (1) Students will only be tested with their parent's 
     consent. If the program also requires the consent of the 
     student, the parent will be informed of any refusal by the 
     student to give consent.
       (2) The program may involve random testing or testing of 
     all students within certain grade or age parameters at a 
     participating school. No students under seventh grade or over 
     12th grade may be tested using funds from grants awarded 
     under this section.
       (3) Students who test positive for illegal drugs will not 
     be penalized, except that the privilege of participating in 
     optional courses or extra-curricula activities in which drug 
     impairment might pose a safety risk (such as athletic teams, 
     drivers education, or industrial arts) may be restricted.
       (4) The parent of a student who tests positive for illegal 
     drugs shall be notified of the results in a discrete manner 
     by a health care professional, a counselor, or other 
     appropriate person. Parents shall be advised of resources 
     that may be available in the local area to treat drug 
     dependency.
       (5) The procedures used in the demonstration project shall 
     be designed to ensure fairness and accuracy. The procedures 
     shall also require personnel administering the drug testing 
     program to treat individual test results confidentially, and 
     not to provide individual test results to law enforcement 
     officials. Statistical information which does not reveal 
     individual identifying information should be provided to law 
     enforcement officials.
       (c) Subpoenas and Discovery.--Test results for tests 
     conducted under a demonstration project receiving funds under 
     this section shall not be subject to subpoena or discovery in 
     any court or administrative forum, without the consent of the 
     individual's parent, unless the individual is no longer a 
     minor, in which case the individual's consent is required.
       (d) Matching Funds.--The Administrator may give a 
     preference in the award of grants under this section to 
     applicants who provide an assurance that such applicant will 
     commit some level of matching funds or resources for the 
     program.
       (e) Construction of This Section.--Nothing in this section 
     shall be construed to restrict other permissible drug testing 
     activities in schools. Additional drug testing not conducted 
     in accordance with the guidelines in subsection (b) may be 
     conducted in schools which receive funding under this 
     section, except that grants awarded under this section shall 
     not be used to fund such additional testing.
       (f) Definitions.--In this section:
       (1) Administrator.--The term ``Administrator'' means the 
     Administrator of the Office of Juvenile Justice and 
     Delinquency Prevention of the Department of Justice.
       (2) Parent.--The term ``parent'' means a custodial parent 
     or legal guardian.
       (3) State, state educational agency, and local educational 
     agency.--The terms ``State'', ``State educational agency'', 
     and ``local educational agency'' have the meanings given such 
     terms in section 14101 of the Elementary and Secondary 
     Education Act of 1965 (20 U.S.C. 8801).
       (g) Authorization of Appropriations.--There is authorized 
     to be appropriated, $10,000,000 for each of the fiscal years 
     1999 through 2003. Such sums shall remain available until 
     expended.

                   CHAPTER 3--DRUG-FREE STUDENT LOANS

     SEC. __41. DRUG-FREE STUDENT LOANS

       (a) In General.--Section 484 of the Higher Education Act of 
     1965 (20 U.S.C. 1091) is amended by adding at the end the 
     following:
       ``(q) Suspension of Eligibility for Drug Related 
     Offenses.--
       ``(1) In general.--An individual student who has been 
     convicted of any felony offense under any Federal or State 
     law involving the possession or sale of a controlled 
     substance shall not be eligible to receive any grant, loan, 
     or work assistance under this title during the period 
     beginning on the date of such conviction and ending after the 
     interval specified in the following table:

 
 
 
``If convicted of an offense
 involving:
 
    The possession of a controlled  Ineligibility period is:
     substance:
      First offense...............    1 year
      Second offense..............    2 years
      Third offense...............    indefinite
 
    The sale of a controlled
     substance:
      First offense...............    2 years
      Second offense..............    indefinite
 

       ``(2) Rehabilitation.--A student whose eligibility has been 
     suspended under paragraph (1) may resume eligibility before 
     the end of the period determined under such paragraph if the 
     student satisfactorily completes a drug rehabilitation 
     program that complies with such criteria as the Secretary 
     shall prescribe for purposes of this paragraph and that 
     includes two unannounced drug tests.
       ``(3) Definitions.--As used in this subsection, the term 
     `controlled substance' has the meaning given in section 
     102(6) of the Controlled Substances Act (21 U.S.C. 
     802(6)).''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply with respect to financial assistance to cover the 
     costs of attendance for periods of enrollment beginning after 
     the date of enactment of this Act.

                    CHAPTER 4--DRUG-FREE WORKPLACES

     SEC. __51. SHORT TITLE.

       This chapter may be cited as the ``Drug-Free Workplace Act 
     of 1998''.

     SEC. __52. FINDINGS; PURPOSES.

       (a) Findings.--Congress finds that--
       (1) 74 percent of adults who use illegal drugs are 
     employed;
       (2) small business concerns employ over 50 percent of the 
     Nation's workforce;
       (3) in over 88 percent of families with children under the 
     age of 18, at least 1 parent is employed; and
       (4) employees who use drugs increase costs for businesses 
     and risk the health and safety of all employees because--
       (A) absenteeism is 66 percent higher among drug users than 
     nondrug users;
       (B) health benefit utilization is 300 percent higher among 
     drug users than nondrug users;
       (C) 47 percent of workplace accidents are drug-related;
       (D) disciplinary actions are 90 percent higher among drug 
     users than nondrug users; and
       (E) employee turnover is significantly higher among drug 
     users than nondrug users.
       (b) Purposes.--The purposes of this chapter are to--
       (1) educate small business concerns about the advantages of 
     a drug-free workplace;
       (2) provide financial incentives and technical assistance 
     to enable small business concerns to create a drug-free 
     workplace; and
       (3) assist working parents in keeping their children drug-
     free.

     SEC. __53. SENSE OF CONGRESS.

       It is the sense of Congress that--
       (1) businesses should adopt drug-free workplace programs; 
     and
       (2) States should consider financial incentives, such as 
     reductions in workers' compensation premiums, to encourage 
     businesses to adopt drug-free workplace programs.

     SEC. __54. DRUG-FREE WORKPLACE DEMONSTRATION PROGRAM.

       The Small Business Act (15 U.S.C. 636 et seq.) is amended--
       (1) by redesignating section (32) as section (33); and
       (2) by inserting after section 31 the following:

     ``SEC. 30. DRUG-FREE WORKPLACE DEMONSTRATION PROGRAM.

       ``(a) Establishment.--There is established a drug-free 
     workplace demonstration program, under which the 
     Administration may make grants to eligible intermediaries 
     described in subsection (b) for the purpose of providing 
     financial and technical assistance to small business concerns 
     seeking to start a drug-free workplace program.
       ``(b) Eligibility for Participation.--An intermediary shall 
     be eligible to receive a grant under subsection (a) if it 
     meets the following criteria:
       ``(1) It is an organization described in section 501(c)(3) 
     of the Internal Revenue Code of 1986 that is exempt from tax 
     under section 5(a) of such Act, a program of such 
     organization, or provides services to such organization.
       ``(2) Its primary purpose is to develop comprehensive drug-
     free workplace programs or to supply drug-free workplace 
     services.
       ``(3) It has at least 2 years of experience in drug-free 
     workplace programs.

[[Page S5985]]

       ``(4) It has a drug-free workplace policy in effect.
       ``(c) Requirements for Program.--Any drug-free workplace 
     program established as a result of this section shall 
     include--
       ``(1) a written policy, including a clear statement of 
     expectations for workplace behavior, prohibitions against 
     substances in the workplace, and the consequences of 
     violating such expectations and prohibitions;
       ``(2) training for at least 60 minutes for employees and 
     supervisors;
       ``(3) additional training for supervisors and employees who 
     are parents;
       ``(4) employee drug testing; and
       ``(5) employee access to an employee assistance program, 
     including assessment, referral, and short-term problem 
     resolution.
       ``(d) Authorization.--There is authorized to be 
     appropriated to carry out this section, $10,000,000 for 
     fiscal year 1999. Such sums shall remain available until 
     expended.''.

     SEC. __55. SMALL BUSINESS DEVELOPMENT CENTERS.

       Section 21(c)(3) of the Small Business Act (15 U.S.C. 
     648(c)(3)) is amended--
       (1) in subparagraph (R), by striking ``and'' at the end;
       (2) in subparagraph (S), by striking the period and 
     inserting ``; and''; and
       (3) by inserting after subparagraph (S) the following:
       ``(T) providing information and assistance to small 
     business concerns with respect to developing drug-free 
     workplace programs.''.

     SEC. __56. CONTRACT AUTHORITY.

       The Administrator of the Small Business Administration may 
     contract with and compensate government and private agencies 
     or persons for services related to carrying out the 
     provisions of this chapter.

                    CHAPTER 5--DRUG-FREE COMMUNITIES

     SEC. __61. DRUG-FREE COMMUNITIES.

       Section 1024(a) of the National Leadership Act of 1988 (21 
     U.S.C. 1524(a)) is amended--
       (1) in paragraph (1), by adding ``and'' after the 
     semicolon; and
       (2) by striking paragraphs (2) through (5), and inserting 
     the following:
       ``(2) $50,000,000 for each of the fiscal years 1999 through 
     2003, of which $10,000,000 in each such fiscal year shall be 
     used for volunteer grassroots drug prevention programs that 
     mobilize parent action teams nationwide to conduct community 
     teen drug awareness education and prevention activities that 
     guarantee increased parental involvement.''.

            CHAPTER 6--BANNING FREE NEEDLES FOR DRUG ADDICTS

     SEC. __65. PROHIBITION ON USE OF FUNDS FOR HYPODERMIC 
                   NEEDLES.

       Notwithstanding any other provision of law, no Federal 
     funds for fiscal years 1998 and 1999 shall be made available 
     or used to carry out any program of distributing sterile 
     hypodermic needles or syringes to individuals for the 
     hypodermic injection of any illegal drug.

                  Subtitle C--Defeating the Drug Mafia

           CHAPTER 1--INCREASED RESOURCES FOR LAW ENFORCEMENT

     SEC. __71. INCREASED RESOURCES FOR LAW ENFORCEMENT.

       (a) Drug Enforcement Administration.--In addition to other 
     amounts appropriated for the Drug Enforcement Administration 
     for a fiscal year, there is authorized to be appropriated, 
     $300,000,000 for each of the fiscal years 1999 through 2003 
     to be used for additional activities to disrupt and dismantle 
     drug trafficking organizations, of which not less than 20 
     percent of such funds shall be used to provide assistance to 
     State and local law enforcement entities.
       (b) Federal Bureau of Investigation.--In addition to other 
     amounts appropriated for the Federal Bureau of Investigation 
     for a fiscal year, there is authorized to be appropriated, 
     $200,000,000 for each of the fiscal years 1999 through 2003 
     to be used to enhance investigative and intelligence 
     gathering capabilities relating to illegal drugs, of which 
     not less than 20 percent of such funds shall be used to 
     provide assistance to State and local law enforcement 
     entities.

           CHAPTER 2--REGISTRATION OF CONVICTED DRUG DEALERS

     SEC. __99B. REGISTRATION OF CONVICTED DRUG DEALERS.

       (a) In General.--The Attorney General shall establish an 
     incentive grant program for States to assist the States in 
     enacting laws that establish State registration programs for 
     individuals convicted of criminals offenses involving drug 
     trafficking.
       (b) Grant Requirements.--To qualify for a grant under 
     subsection (a) a State shall enact, actively enforce, and 
     publicize a law that requires that a person who is convicted 
     of a criminal offense involving drug trafficking register a 
     current address with a designated State law enforcement 
     agency for up to 10-years following the date on which such 
     individual is convicted or released from prison.
       (c) Requirements of State Law.--A State law enacted under 
     subsection (b) shall contain the following elements:
       (1) Duties of responsible officials.--If a person who is 
     required to register under a State law under this section is 
     released from prison, or placed on parole, supervised 
     release, or probation, a State prison officer, the court, or 
     another responsible officer or official, shall--
       (A) inform the person of the duty to register and obtain 
     the information required for such registration;
       (B) inform the person that if the person changes residence 
     address, the person shall report the change of address as 
     provided by State law;
       (C) inform the person that if the person changes residence 
     to another State, the person shall report the change of 
     address as provided by State law and comply with any 
     registration requirement in the new State of residence, and 
     inform the person that the person must also register in a 
     State where the person is employed, carries on a vocation, or 
     is a student;
       (D) obtain fingerprints and a photograph of the person if 
     these have not already been obtained in connection with the 
     offense that triggers registration; and
       (E) require the person to read and sign a form stating that 
     the duty of the person to register under this section has 
     been explained.
       (2) Transfer of information to state.--State procedures 
     under the State law shall ensure that the registration 
     information is promptly made available to a law enforcement 
     agency having jurisdiction where the person expects to reside 
     and entered into the appropriate State records or data 
     system.
       (3) Verification.--For a person required to register, State 
     procedures under the State law shall provide for verification 
     of address at least annually.
       (4) Notification of local law enforcement agencies of 
     changes in address.--A change of address by a person required 
     to register under a State law under this section shall be 
     reported by the person in the manner provided by State law. 
     State procedures shall ensure that the updated address 
     information is promptly made available to a law enforcement 
     agency having jurisdiction where the person will reside and 
     entered into the appropriate State records or data system.
       (5) Registration for change of address to another state.--A 
     person who has been convicted of an offense which requires 
     registration under a State law under this section and who 
     moves to another State, shall report the change of address to 
     the responsible agency in the State the person is leaving, 
     and shall comply with any registration requirement in the new 
     State of residence. The procedures of the State the person is 
     leaving shall ensure that notice is provided promptly to an 
     agency responsible for registration in the new State, if that 
     State requires registration.
       (6) Length of registration.--A person required to register 
     under a State law under this section shall continue to comply 
     with this section, except during ensuing periods of 
     incarceration, until 10 years have elapsed since the person 
     was released from prison or placed on parole, supervised 
     release, or probation.
       (7) Registration of out-of-state offenders, federal 
     offenders, persons sentenced by courts martial, and offenders 
     crossing state borders.--A State shall include in its 
     registration program residents who were convicted in another 
     State and shall ensure that procedures are in place to accept 
     registration information from--
       (A) residents who were convicted in another State, 
     convicted of a Federal offense, or sentenced by a court 
     martial; and
       (B) nonresident offenders who have crossed into another 
     State in order to work or attend school.
       (8) Registration of offender crossing state border.--Any 
     person who is required under a State law under this section 
     to register in the State in which such person resides shall 
     also register in any State in which the person is employed, 
     carries on a vocation, or is a student.
       (9) Penalty.--A person required to register under a State 
     law under this section who knowingly fails to so register and 
     keep such registration current shall be subject to criminal 
     penalties in any State in which the person has so failed.
       (10) Release of information.--
       (A) In general.--The information collected under a State 
     registration program under this section may be disclosed for 
     any purpose permitted under the laws of the State.
       (B) Protection of the public.--The State or any agency 
     authorized by the State shall release relevant information 
     that is necessary to protect the public concerning a specific 
     person required to register under this section.
       (11) Immunity for good faith conduct.--Law enforcement 
     agencies, employees of law enforcement agencies and 
     independent contractors acting at the direction of such 
     agencies, and State officials shall be immune from liability 
     for good faith conduct under a State law under this section.
       (12) Fingerprints.--Each requirement to register under a 
     State law under this section shall be deemed to also require 
     the submission of a set of fingerprints of the person 
     required to register, obtained in accordance with regulations 
     prescribed by the Attorney General under section 170102(h).
       (d) Use.--A State may only use a grant under subsection (a) 
     to implement and enforce the law described in subsection (b).
       (e) Definition.--In this section, the term ``offenses 
     involving drug trafficking'' means a criminal offense under 
     Federal or applicable State law relating to--
       (1) the distribution of illegal drugs to individuals under 
     the age of 21 years;
       (2) the distribution of manufacturing of illegal drugs in 
     or near schools, colleges, universities, or youth-centered 
     recreational facilities; or

[[Page S5986]]

       (3) any other activity relating to illegal drugs determined 
     appropriate by the chief executive officer of the State 
     involved.
       (f) Authorization of Appropriations.--There are authorized 
     to be appropriated, $5,000,000 for each of the fiscal years 
     1999 through 2003.

               Subtitle D--National Drug Control Strategy

     SEC. __99C. DEVELOPMENT, SUBMISSION, IMPLEMENTATION, AND 
                   ASSESSMENT OF NATIONAL DRUG CONTROL STRATEGY.

       Section 1005 of the National Narcotics Leadership Act of 
     1988 (21 U.S.C. 1504) is amended to read as follows:

     ``SEC. 1005. DEVELOPMENT, SUBMISSION, IMPLEMENTATION, AND 
                   ASSESSMENT OF NATIONAL DRUG CONTROL STRATEGY.

       ``(a) Timing, Contents, and Process for Development and 
     Submission of National Drug Control Strategy.--
       ``(1) Timing.--
       ``(A) In general.--Not later than October 1, 1998, the 
     President shall submit to Congress a National Drug Control 
     Strategy, which shall set forth a comprehensive 2-year plan 
     for reducing drug abuse and the consequences of drug abuse in 
     the United States, by limiting the availability of and 
     reducing the demand for illegal drugs.
       ``(B) 4-year plan.--Not later than October 1, 2001, and on 
     October 1 of every fourth year thereafter, the President 
     shall submit to Congress a revised National Drug Control 
     Strategy, which shall set forth a comprehensive 4-year plan 
     for reducing drug abuse and the consequences of drug abuse in 
     the United States, by limiting the availability of and 
     reducing the demand for illegal drugs, and shall include 
     quantifiable 4-year performance objectives, targets, and 
     measures for each National Drug Control Strategy goal and 
     objective.
       ``(2) Contents.--
       ``(A) In general.--The National Drug Control Strategy 
     submitted under paragraph (1) shall include--
       ``(i) comprehensive, research-based, long-range, 
     quantifiable, goals for reducing drug abuse and the 
     consequences of drug abuse in the United States;
       ``(ii) short-term measurable objectives to accomplish long-
     term quantifiable goals that the Director determines may be 
     realistically achieved during the 2-year period beginning on 
     the date on which the strategy is submitted;
       ``(iii) 5-year projections for program and budget 
     priorities; and
       ``(iv) a review of State, local, and private sector drug 
     control activities to ensure that the United States pursues 
     well-coordinated and effective drug control at all levels of 
     government.
       ``(B) Classified information.--Any contents of the National 
     Drug Control Strategy that involves information properly 
     classified under criteria established by an Executive order 
     shall be presented to Congress separately from the rest of 
     the Strategy.
       ``(3) Process for development and submission.--
       ``(A) Consultation.--In developing and effectively 
     implementing the National Drug Control Strategy, the 
     Director--
       ``(i) shall consult with--

       ``(I) the heads of the National Drug Control Program 
     agencies;
       ``(II) Congress;
       ``(III) State and local officials;
       ``(IV) private citizens and organizations with experience 
     and expertise in demand reduction; and
       ``(V) private citizens and organizations with experience 
     and expertise in supply reduction; and

       ``(ii) may require the National Drug Intelligence Center 
     and the El Paso Intelligence Center to undertake specific 
     tasks or projects to implement the Strategy.
       ``(B) Inclusion in strategy.--The National Drug Control 
     Strategy under this subsection, and each report submitted 
     under subsection (b), shall include a list of each entity 
     consulted under subparagraph (A)(i).
       ``(4) Modification and resubmittal.--Notwithstanding any 
     other provision of law, the Director may modify a National 
     Drug Control Strategy submitted under paragraph (1) at any 
     time.
       ``(b) Annual Strategy Report.--
       ``(1) In general.--Not later than February 1, 1999, and on 
     February 1 of each year thereafter, the President shall 
     submit to Congress a report on the progress in implementing 
     the Strategy under subsection (a), which shall include--
       ``(A) an assessment of the Federal effectiveness in 
     achieving the Strategy goals and objectives using the 
     performance measurement system described in subsection (c), 
     including--
       ``(i) an assessment of drug use and availability in the 
     United States; and
       ``(ii) an estimate of the effectiveness of interdiction, 
     treatment, prevention, law enforcement, and international 
     programs under the National Drug Control Strategy in effect 
     during the preceding year, or in effect as of the date on 
     which the report is submitted;
       ``(B) any modifications of the Strategy or the performance 
     measurement system described in subsection (c);
       ``(C) an assessment of how the budget proposal submitted 
     under section 1003(c) is intended to implement the Strategy 
     and whether the funding levels contained in such proposal are 
     sufficient to implement such Strategy;
       ``(D) beginning on February 1, 1999, and every 2 years 
     thereafter, measurable data evaluating the success or failure 
     in achieving the short-term measurable objectives described 
     in subsection (a)(2)(A)(ii);
       ``(E) an assessment of current drug use (including 
     inhalants) and availability, impact of drug use, and 
     treatment availability, which assessment shall include--
       ``(i) estimates of drug prevalence and frequency of use as 
     measured by national, State, and local surveys of illicit 
     drug use and by other special studies of--

       ``(I) casual and chronic drug use;
       ``(II) high-risk populations, including school dropouts, 
     the homeless and transient, arrestees, parolees, 
     probationers, and juvenile delinquents; and
       ``(III) drug use in the workplace and the productivity lost 
     by such use;

       ``(ii) an assessment of the reduction of drug availability 
     against an ascertained baseline, as measured by--

       ``(I) the quantities of cocaine, heroin, marijuana, 
     methamphetamine, and other drugs available for consumption in 
     the United States;
       ``(II) the amount of marijuana, cocaine, and heroin 
     entering the United States;
       ``(III) the number of hectares of marijuana, poppy, and 
     coca cultivated and destroyed;
       ``(IV) the number of metric tons of marijuana, heroin, and 
     cocaine seized;
       ``(V) the number of cocaine and methamphetamine processing 
     laboratories destroyed;
       ``(VI) changes in the price and purity of heroin and 
     cocaine;
       ``(VII) the amount and type of controlled substances 
     diverted from legitimate retail and wholesale sources; and
       ``(VIII) the effectiveness of Federal technology programs 
     at improving drug detection capabilities in interdiction, and 
     at United States ports of entry;

       ``(iii) an assessment of the reduction of the consequences 
     of drug use and availability, which shall include estimation 
     of--

       ``(I) the burden drug users placed on hospital emergency 
     departments in the United States, such as the quantity of 
     drug-related services provided;
       ``(II) the annual national health care costs of drug use, 
     including costs associated with people becoming infected with 
     the human immunodeficiency virus and other infectious 
     diseases as a result of drug use;
       ``(III) the extent of drug-related crime and criminal 
     activity; and
       ``(IV) the contribution of drugs to the underground 
     economy, as measured by the retail value of drugs sold in the 
     United States;

       ``(iv) a determination of the status of drug treatment in 
     the United States, by assessing--

       ``(I) public and private treatment capacity within each 
     State, including information on the treatment capacity 
     available in relation to the capacity actually used;
       ``(II) the extent, within each State, to which treatment is 
     available;
       ``(III) the number of drug users the Director estimates 
     could benefit from treatment; and
       ``(IV) the specific factors that restrict the availability 
     of treatment services to those seeking it and proposed 
     administrative or legislative remedies to make treatment 
     available to those individuals; and

       ``(v) a review of the research agenda of the Counter-Drug 
     Technology Assessment Center to reduce the availability and 
     abuse of drugs; and
       ``(F) an assessment of private sector initiatives and 
     cooperative efforts between the Federal Government and State 
     and local governments for drug control.
       ``(2) Submission of revised strategy.--The President may 
     submit to Congress a revised National Drug Control Strategy 
     that meets the requirements of this section--
       ``(A) at any time, upon a determination by the President 
     and the Director that the National Drug Control Strategy in 
     effect is not sufficiently effective; and
       ``(B) if a new President or Director takes office.
       ``(c) Performance Measurement System.--
       ``(1) In general.--Not later than October 1, 1998, the 
     Director shall submit to Congress a description of the 
     national drug control performance measurement system, 
     designed in consultation with affected National Drug Control 
     Program agencies, that--
       ``(A) develops performance objectives, measures, and 
     targets for each National Drug Control Strategy goal and 
     objective;
       ``(B) revises performance objectives, measures, and 
     targets, to conform with National Drug Control Program Agency 
     budgets;
       ``(C) identifies major programs and activities of the 
     National Drug Control Program agencies that support the goals 
     and objectives of the National Drug Control Strategy;
       ``(D) evaluates implementation of major program activities 
     supporting the National Drug Control Strategy developed under 
     section 1005;
       ``(E) monitors consistency between the drug-related goals 
     and objectives of the National Drug Control Program agencies 
     and ensures that drug control agency goals and budgets 
     support and are fully consistent with the National Drug 
     Control Strategy; and
       ``(F) coordinates the development and implementation of 
     national drug control data collection and reporting systems 
     to support policy formulation and performance measurement, 
     including an assessment of--
       ``(i) the quality of current drug use measurement 
     instruments and techniques to

[[Page S5987]]

     measure supply reduction and demand reduction activities;
       ``(ii) the adequacy of the coverage of existing national 
     drug use measurement instruments and techniques to measure 
     the casual drug user population and groups that are at risk 
     for drug use; and
       ``(iii) the actions the Director shall take to correct any 
     deficiencies and limitations identified pursuant to 
     subparagraphs (A) and (B) of subsection (b)(4).
       ``(2) Modifications.--A description of any modifications 
     made during the preceding year to the national drug control 
     performance measurement system described in paragraph (1) 
     shall be included in each report submitted under subsection 
     (b).''.

     SEC. __99D. REPORT BY PRESIDENT.

       Not later than October 1, 1998, and every April 1 and 
     October 1 thereafter, the President shall prepare and submit 
     to the appropriate committees of Congress a report on the 
     prevalence of the use of any illegal drugs by youth between 
     the ages of 12 and 17.

 TITLE __--MONEY LAUNDERING ENFORCEMENT AND COMBATTING DRUGS IN PRISONS

     SEC. __00. SHORT TITLE.

       This title may be cited as the ``Money Laundering 
     Enforcement and Combatting Drugs in Prisons Act of 1998''.

               Subtitle A--International Money Laundering

     SEC. __11. SHORT TITLE.

       This subtitle may be cited as the ``Money Laundering 
     Enforcement Act of 1998''.

     SEC. __12. ILLEGAL MONEY TRANSMITTING BUSINESSES.

       (a) Civil Forfeiture for Money Transmitting Violation.--
     Section 981(a)(1)(A) of title 18, United States Code, is 
     amended by striking ``or 1957'' and inserting ``, 1957, or 
     1960''.
       (b) Scienter Requirement for Section 1960 Violation.--
     Section 1960 of title 18, United States Code, is amended by 
     adding at the end the following:
       ``(c) Scienter Requirement.--For the purposes of proving a 
     violation of this section involving an illegal money 
     transmitting business--
       ``(1) it shall be sufficient for the Government to prove 
     that the defendant knew that the money transmitting business 
     lacked a license required by State law; and
       ``(2) it shall not be necessary to show that the defendant 
     knew that the operation of such a business without the 
     required license was an offense punishable as a felony or 
     misdemeanor under State law.''.

     SEC. __13. RESTRAINT OF ASSETS OF PERSONS ARRESTED ABROAD.

       Section 981(b) of title 18, United States Code, is amended 
     by adding at the end the following:
       ``(3) Restraint of assets.--
       ``(A) In general.--If any person is arrested or charged in 
     a foreign country in connection with an offense that would 
     give rise to the forfeiture of property in the United States 
     under this section or under the Controlled Substances Act, 
     the Attorney General may apply to any Federal judge or 
     magistrate judge in the district in which the property is 
     located for an ex parte order restraining the property 
     subject to forfeiture for not more than 30 days, except that 
     the time may be extended for good cause shown at a hearing 
     conducted in the manner provided in Rule 43(e) of the Federal 
     Rules of Civil Procedure.
       ``(B) Application.--An application for a restraining order 
     under subparagraph (A) shall--
       ``(i) set forth the nature and circumstances of the foreign 
     charges and the basis for belief that the person arrested or 
     charged has property in the United States that would be 
     subject to forfeiture; and
       ``(ii) contain a statement that the restraining order is 
     needed to preserve the availability of property for such time 
     as is necessary to receive evidence from the foreign country 
     or elsewhere in support of probable cause for the seizure of 
     the property under this subsection.''.

     SEC. __14. ACCESS TO RECORDS IN BANK SECRECY JURISDICTIONS.

       Section 986 of title 18, United States Code, is amended by 
     adding at the end the following:
       ``(d) Access to Records Located Abroad.--
       ``(1) In general.--In any civil forfeiture case, or in any 
     ancillary proceeding in any criminal forfeiture case governed 
     by section 413(n) of the Controlled Substances Act (21 U.S.C. 
     853(n)), the refusal of the claimant to provide financial 
     records located in a foreign country in response to a 
     discovery request or take the action necessary otherwise to 
     make the records available, shall result in the dismissal of 
     the claim with prejudice, if--
       ``(A) the financial records may be material--
       ``(i) to any claim or to the ability of the government to 
     respond to such claim; or
       ``(ii) in a civil forfeiture case, to the ability of the 
     government to establish the forfeitability of the property; 
     and
       ``(B) it is within the capacity of the claimant to waive 
     his or her rights under such secrecy laws, or to obtain the 
     financial records himself or herself, so that the financial 
     records may be made available.
       ``(2) Privilege.--Nothing in this subsection shall be 
     construed to affect the rights of a claimant to refuse 
     production of any records on the basis of any privilege 
     guaranteed by the Constitution of the United States or any 
     other provision of Federal law.''.

     SEC. __15. CIVIL MONEY LAUNDERING JURISDICTION OVER FOREIGN 
                   PERSONS.

       Section 1956(b) of title 18, United States Code, is 
     amended--
       (1) by redesignating paragraphs (1) and (2) as 
     subparagraphs (A) and (B), respectively, and indenting each 
     subparagraph appropriately;
       (2) by striking ``(b) Whoever'' and inserting the 
     following:
       ``(b) Civil Penalties.--
       ``(1) In general.--Whoever''; and
       (3) by adding at the end the following:
       ``(2) Jurisdiction.--For purposes of adjudicating an action 
     filed or enforcing a penalty ordered under this section, the 
     district courts of the United States shall have jurisdiction 
     over any foreign person, including any financial institution 
     authorized under the laws of a foreign country, that commits 
     an offense under subsection (a) involving a financial 
     transaction that occurs in whole or in part in the United 
     States, if service of process upon such foreign person is 
     made in accordance with the Federal Rules of Civil Procedure 
     or the laws of the foreign country in which the foreign 
     person is found.
       ``(3) Satisfaction of judgment.--In any action described in 
     paragraph (2), the court may issue a pretrial restraining 
     order or take any other action necessary to ensure that any 
     bank account or other property held by the defendant in the 
     United States is available to satisfy a judgment under this 
     section.''.

     SEC. __16. LAUNDERING MONEY THROUGH A FOREIGN BANK.

       Section 1956(c)(6) of title 18, United States Code, is 
     amended to read as follows:
       ``(6) the term `financial institution' includes--
       ``(A) any financial institution described in section 
     5312(a)(2) of title 31, or the regulations promulgated 
     thereunder; and
       ``(B) any foreign bank, as defined in section 1(b)(7) of 
     the International Banking Act of 1978 (12 U.S.C. 3101(7));''.

     SEC. __17. SPECIFIED UNLAWFUL ACTIVITY FOR MONEY LAUNDERING.

       (a) In General.--Section 1956(c)(7) of title 18, United 
     States Code, is amended--
       (1) in subparagraph (B)--
       (A) by striking clause (ii) and inserting the following:
       ``(ii) any act or acts constituting a crime of violence;''; 
     and
       (B) by adding at the end the following:
       ``(iv) fraud, or any scheme to defraud, committed against a 
     foreign government or foreign governmental entity;
       ``(v) bribery of a public official, or the 
     misappropriation, theft, or embezzlement of public funds by 
     or for the benefit of a public official;
       ``(vi) smuggling or export control violations involving 
     munitions listed in the United States Munitions List or 
     technologies with military applications as defined in the 
     Commerce Control List of the Export Administration 
     Regulations; or
       ``(vii) an offense with respect to which the United States 
     would be obligated by a multilateral treaty either to 
     extradite the alleged offender or to submit the case for 
     prosecution, if the offender were found with the territory of 
     the United States;'';
       (2) in subparagraph (D)--
       (A) by inserting ``section 541 (relating to goods falsely 
     classified),'' before ``section 542'';
       (B) by inserting ``section 922(l) (relating to the unlawful 
     importation of firearms), section 924(m) (relating to 
     firearms trafficking),'' before ``section 956'';
       (C) by inserting ``section 1030 (relating to computer fraud 
     and abuse),'' before ``1032''; and
       (D) by inserting ``any felony violation of the Foreign 
     Agents Registration Act of 1938 (22 U.S.C. 611 et seq.),'' 
     before ``or any felony violation of the Foreign Corrupt 
     Practices Act''; and
       (3) in subparagraph (E), by inserting ``the Clean Air Act 
     (42 U.S.C. 6901 et seq.),'' after ``the Safe Drinking Water 
     Act (42 U.S.C. 300f et seq.),''.

     SEC. __18. CRIMINAL FORFEITURE FOR MONEY LAUNDERING 
                   CONSPIRACIES.

       Section 982(a)(1) of title 18, United States Code, is 
     amended by inserting ``or a conspiracy to commit any such 
     offense,'' after ``of this title,''.

     SEC. __19. FUNGIBLE PROPERTY IN FOREIGN BANK ACCOUNTS.

       Section 984(d) of title 18, United States Code, is amended 
     by adding at the end the following:
       ``(3) In this subsection, the term `financial institution' 
     includes a foreign bank, as defined in section 1(b)(7) of the 
     International Banking Act of 1978 (12 U.S.C. 3101(7)).''.

     SEC. __20. SUBPOENAS FOR BANK RECORDS.

       Section 986(a) of title 18, United States Code, is 
     amended--
       (1) by striking ``section 1956, 1957, or 1960 of this 
     title, section 5322 or 5324 of title 31, United States Code'' 
     and inserting ``section 981 of this title'';
       (2) by inserting ``before or'' before ``after''; and
       (3) by striking the last sentence.

     SEC. __21. FUGITIVE DISENTITLEMENT.

       (a) In General.--Chapter 163 of title 28, United States 
     Code, is amended by adding at the end the following:

     ``Sec. 2467. Fugitive disentitlement

       ``Any person who, in order to avoid criminal prosecution, 
     purposely leaves the jurisdiction of the United States, 
     declines to enter or reenter the United States to submit

[[Page S5988]]

     to the jurisdiction of the United States, or otherwise evades 
     the jurisdiction of a court of the United States in which a 
     criminal case is pending against the person, may not use the 
     resources of the courts of the United States in furtherance 
     of a claim in any related civil forfeiture action or a claim 
     in any third-party proceeding in any related criminal 
     forfeiture action.''.
       (b) Conforming Amendment.--The analysis for chapter 163 of 
     title 28, United States Code, is amended by adding at the end 
     the following:

``2467. Fugitive disentitlement.''.

     SEC. __22. ADMISSIBILITY OF FOREIGN BUSINESS RECORDS.

       (a) In General.--Chapter 163 of title 28, United States 
     Code, is amended by adding at the end the following:

     ``Sec. 2468. Foreign records

       ``(a) Definitions.--In this section--
       ``(1) the term `business' includes business, institution, 
     association, profession, occupation, and calling of every 
     kind whether or not conducted for profit;
       ``(2) the term `foreign certification' means a written 
     declaration made and signed in a foreign country by the 
     custodian of a record of regularly conducted activity or 
     another qualified person, that if falsely made, would subject 
     the maker to criminal penalty under the law of that country;
       ``(3) the term `foreign record of regularly conducted 
     activity' means a memorandum, report, record, or data 
     compilation, in any form, of acts, events, conditions, 
     opinions, or diagnoses, maintained in a foreign country; and
       ``(4) the term `official request' means a letter rogatory, 
     a request under an agreement, treaty or convention, or any 
     other request for information or evidence made by a court of 
     the United States or an authority of the United States having 
     law enforcement responsibility, to a court or other authority 
     of a foreign country.
       ``(b) Admissibility.--In a civil proceeding in a court of 
     the United States, including a civil forfeiture proceeding 
     and a proceeding in the United States Claims Court and the 
     United States Tax Court, unless the source of information or 
     the method or circumstances of preparation indicate lack of 
     trustworthiness, a foreign record of regularly conducted 
     activity (or a duplicate of such record), obtained pursuant 
     to an official request, shall not be excluded as evidence by 
     the hearsay rule if a foreign certification, also obtained 
     pursuant to the same official request or subsequent official 
     request that adequately identifies such foreign record, 
     attests that--
       ``(1) the foreign record was made, at or near the time of 
     the occurrence of the matters set forth, by (or from 
     information transmitted by) a person with knowledge of those 
     matters;
       ``(2) the foreign record was kept in the course of a 
     regularly conducted business activity;
       ``(3) the business activity made such a record as a regular 
     practice; and
       ``(4) if the foreign record is not the original, the record 
     is a duplicate of the original.
       ``(c) Foreign Certification.--A foreign certification under 
     this section shall authenticate a record or duplicate 
     described in subsection (b).
       ``(d) Notice.--
       ``(1) In general.--As soon as practicable after a 
     responsive pleading has been filed, a party intending to 
     offer in evidence under this section a foreign record of 
     regularly conducted activity shall provide written notice of 
     that intention to each other party.
       ``(2) Opposition.--A motion opposing admission in evidence 
     of a record under paragraph (1) shall be made by the opposing 
     party and determined by the court before trial. Failure by a 
     party to file such motion before trial shall constitute a 
     waiver of objection to such record, except that the court for 
     cause shown may grant relief from the waiver.''.
       (b) Conforming Amendment.--The analysis for chapter 163 of 
     title 28, United States Code, is amended by adding at the end 
     the following:

``2468. Foreign records.''.

     SEC. __23. CHARGING MONEY LAUNDERING AS A COURSE OF CONDUCT.

       Section 1956(h) of title 18, United States Code, is 
     amended--
       (1) by striking ``(h) Any person'' and inserting the 
     following:
       ``(h) Conspiracy; Multiple Violations.--
       ``(1) Conspiracy.--Any person''; and
       (2) by adding at the end the following:
       ``(2) Multiple violations.--Any person who commits multiple 
     violations of this section or section 1957 that are part of 
     the same scheme or continuing course of conduct may be 
     charged, at the election of the Government, in a single count 
     in an indictment or information.''.

     SEC. __24. VENUE IN MONEY LAUNDERING CASES.

       Section 1956 of title 18, United States Code, is amended by 
     adding at the end the following:
       ``(i) Venue.--
       ``(1) In general.--Except as provided in paragraph (2), a 
     prosecution for an offense under this section or section 1957 
     may be brought in any district in which the financial or 
     monetary transaction is conducted, or in which a prosecution 
     for the underlying specified unlawful activity could be 
     brought.
       ``(2) Exception.--A prosecution for an attempt or 
     conspiracy offense under this section or section 1957 may be 
     brought in the district in which venue would lie for the 
     completed offense under paragraph (1), or in any other 
     district in which an act in furtherance of the attempt or 
     conspiracy took place.''.

     SEC. __25. TECHNICAL AMENDMENT TO RESTORE WIRETAP AUTHORITY 
                   FOR CERTAIN MONEY LAUNDERING OFFENSES.

       Section 2516(1)(g) of title 18, United States Code, is 
     amended by striking ``of title 31, United States Code 
     (dealing with the reporting of currency transactions)'' and 
     inserting ``or 5324 of title 31 (dealing with the reporting 
     and illegal structuring of currency transactions)''.

 Subtitle B--Drug Testing and Intervention for Inmates and Probationers

     SEC. __31. SHORT TITLE.

       This subtitle may be cited as the ``Combatting Drugs in 
     Prisons Act of 1998''.

     SEC. __32. ADDITIONAL REQUIREMENTS FOR THE USE OF FUNDS UNDER 
                   THE VIOLENT OFFENDER INCARCERATION AND TRUTH-
                   IN-SENTENCING INCENTIVE GRANT PROGRAMS.

       Section 20105(b) of the Violent Crime Control and Law 
     Enforcement Act of 1994 (42 U.S.C. 13705(b)) is amended--
       (1) by striking ``(b) To be eligible'' and inserting the 
     following:
       ``(b) Additional Requirements.--
       ``(1) Eligibility for a grant.--To be eligible'';
       (2) by striking ``a State shall provide assurances'' and 
     inserting the following: ``a State shall--
       ``(A) provide assurances'';
       (3) by striking the period at the end and inserting ``; 
     and''; and
       (4) by adding at the end the following:
       ``(B) not later than September 1, 1998, have established 
     and implemented, consistent with guidelines issued by the 
     Attorney General, a program of drug testing and intervention 
     for appropriate categories of convicted offenders during 
     periods of incarceration and criminal justice supervision, 
     with sanctions (including denial or revocation of release) 
     for positive drug tests.
       ``(2) Use of funds.--Notwithstanding section 20102, amounts 
     received by a State pursuant to section 20103 or section 
     20104 may be--
       ``(A) applied to the cost of offender drug testing and 
     appropriate intervention programs during periods of 
     incarceration and criminal justice supervision, consistent 
     with guidelines issued by the Attorney General;
       ``(B) used by a State to pay the costs of providing to the 
     Attorney General a baseline study, which shall be consistent 
     with guidelines issued by the Attorney General, on the prison 
     drug abuse problem in the State; and
       ``(C) used by a State to develop policies, practices, or 
     laws establishing, in accordance with guidelines issued by 
     the Attorney General, a system of sanctions and penalties to 
     address drug trafficking within and into correctional 
     facilities under the jurisdiction of the State.''.

     SEC. __33. USE OF RESIDENTIAL SUBSTANCE ABUSE TREATMENT 
                   GRANTS TO PROVIDE FOR SERVICES DURING AND AFTER 
                   INCARCERATION.

       Section 1901 of part S of the Omnibus Crime Control and 
     Safe Streets Act of 1968 (42 U.S.C. 3796ff) is amended by 
     adding at the end the following:
       ``(c) Additional Use of Funds.--Each State that 
     demonstrates that the State has established 1 or more 
     residential substance abuse treatment programs that meet the 
     requirements of this part may use amounts made available 
     under this part for drug treatment and to impose appropriate 
     sanctions for positive drug tests, both during incarceration 
     and after release.''.

       Subtitle A--Performance Objectives to Reduce Underage Use

     SEC. 201. FINDINGS.

       Congress finds the following:
       (1) Reductions in the underage use of tobacco products are 
     critically important to the public health.
       (2) Achieving this critical public health goal can be 
     substantially furthered by increasing the price of tobacco 
     products to discourage underage use if reduction targets are 
     not achieved and by creating financial incentives for 
     manufacturers to discourage youth from using their tobacco 
     products.
       (3) When reduction targets in underage use are not achieved 
     on an industry-wide basis, the price increases that will 
     result from an industry-wide assessment will provide an 
     additional deterrence to youth tobacco use.
       (4) Manufacturer-specific incentives that will be imposed 
     if reduction targets are not met by a manufacturer provide a 
     strong incentive for each manufacturer to make all efforts to 
     discourage youth use of its brands and insure the 
     effectiveness of the industry-wide assessments.

     SEC. 202. PURPOSES AND GOALS.

       (a) Purpose.--It is the purpose of this subtitle to create 
     incentives to achieve reductions in the percentage of 
     children who use tobacco products and to ensure that, in the 
     event that other measures contained in this Act prove to be 
     inadequate to produce substantial reductions in tobacco use 
     by minors, tobacco companies will pay additional assessments. 
     These additional assessments are designed to lower youth 
     tobacco consumption in a variety of ways, including by 
     triggering further increases in the price of tobacco 
     products, by encouraging tobacco companies to work to meet 
     statutory targets for reductions in youth tobacco 
     consumption,

[[Page S5989]]

     and by providing support for further reduction efforts.
       (b) Goals.--As part of a comprehensive national tobacco 
     control policy, the Secretary, working in cooperation with 
     State, Tribal, and local governments and the private sector, 
     shall take all actions under this Act necessary to ensure 
     that the required performance objectives for percentage 
     reductions in underage use of tobacco products set forth in 
     this title are achieved.

     SEC. 203. ANNUAL PERFORMANCE SURVEYS.

       (a) Annual Performance Survey.--Beginning not later than 
     1999 and annually thereafter the Secretary shall conduct a 
     survey, in accordance with the methodology in subsection 
     (e)(1), to determine for each type of tobacco product--
       (1) the percentage of all children who used such type of 
     tobacco product within the past 30 days; and
       (2) the percentage of children who identify each brand of 
     each type of tobacco product as the usual brand of the type 
     smoked or used within the past 30 days.
       (b) Use of Product.--A child shall be considered to have 
     used a manufacturer's tobacco product if the child identifies 
     the manufacturer's tobacco product as the usual brand of 
     tobacco product smoked or used by the child within the past 
     30 days.
       (c) Separate Types of Products.--For purposes of this 
     subtitle (except as provided in subsection 205(h)), 
     cigarettes and smokeless tobacco shall be considered separate 
     types of tobacco products.
       (d) Confidentiality of data.--The Secretary may conduct a 
     survey relating to tobacco use involving minors. If the 
     information collected in the course of conducting the annual 
     performance survey results in the individual supplying the 
     information, or described in the information, being 
     identifiable, the information may not be used for any purpose 
     other than the purpose for which it was supplied unless that 
     individual (or that individual's guardian) consents to its 
     use for such other purposes. The information may not be 
     published or released in any other form if the individual 
     supplying the information, or described in the information, 
     is identifiable unless that individual (or that individual's 
     guardian) consents to its publication or release in other 
     form.
       (e) Methodology.--
       (1) In general.--The survey required by subsection (a) 
     shall--
       (A) be based on a nationally representative sample of young 
     individuals;
       (B) measure use of each type of tobacco product within the 
     past 30 days;
       (C) identify the usual brand of each type of tobacco 
     product used within the past 30 days; and
       (D) permit the calculation of the actual percentage 
     reductions in underage use of a type of tobacco product (or, 
     in the case of the manufacturer-specific surcharge, the use 
     of a type of the tobacco products of a manufacturer) based on 
     the point estimates of the percentage of young individuals 
     reporting use of a type of tobacco product (or, in the case 
     of the manufacturer-specific surcharge, the use of a type of 
     the tobacco products of a manufacturer) from the annual 
     performance survey.
       (2) Criteria for deeming point estimates correct.--Point 
     estimates under paragraph (1)(D) are deemed conclusively to 
     be correct and accurate for calculating actual percentage 
     reductions in underage use of a type of tobacco product (or, 
     in the case of the manufacturer-specific surcharge, the use 
     of a type of the tobacco products of a manufacturer) for the 
     purpose of measuring compliance with percent reduction 
     targets and calculating surcharges provided that the 
     precision of estimates (based on sampling error) of the 
     percentage of children reporting use of a type of tobacco 
     product (or, in the case of the manufacturer-specific 
     surcharge, the use of a type of the tobacco products of a 
     manufacturer) is such that the 95 percent confidence interval 
     around such point estimates is no more than plus or minus 1 
     percent.
       (3) Survey deemed correct, proper, and accurate.--A survey 
     using the methodology required by this subsection is deemed 
     conclusively to be proper, correct, and accurate for purposes 
     of this Act.
       (4) Secretary may adopt different methodology.--The 
     Secretary by notice and comment rulemaking may adopt a survey 
     methodology that is different than the methodology described 
     in paragraph (1) if the different methodology is at least as 
     statistically precise as that methodology.
       (f) Additional Measures.--In order to increase the 
     understanding of youth tobacco product use, the Secretary 
     may, for informational purposes only, add additional measures 
     to the survey under subsection (a), conduct periodic or 
     occasional surveys at other times, and conduct surveys of 
     other populations such as young adults. The results of such 
     surveys shall be made available to manufacturers and the 
     public to assist in efforts to reduce youth tobacco use.
       (g) Technical Adjustments.--The Secretary may make 
     technical changes in the manner in which surveys are 
     conducted under this section so long as adjustments are made 
     to ensure that the results of such surveys are comparable 
     from year to year.

     SEC. 204. PERFORMANCE OBJECTIVES.

       (a) Baseline Level.--The baseline level for each type of 
     tobacco product, and for each manufacturer with respect to 
     each type of tobacco product, is the percentage of children 
     determined to have used such tobacco product in the first 
     annual performance survey (in 1999).
       (b) Industry-Wide Non-Attainment Assessments.--For the 
     purpose of determining industry-wide non-attainment 
     assessments, the performance objective for the reduction of 
     the percentage of children determined to have used each type 
     of tobacco product is the percentage in subsection (d) as 
     measured from the baseline level for such type of tobacco 
     product.
       (c) Performance Objectives for Existing Manufacturers.--
     Each existing manufacturer shall have as a performance 
     objective the reduction of the percentage of children 
     determined to have used each type of such manufacturer's 
     tobacco products by at least the percentage specified in 
     subsection (d) as measured from the baseline level for such 
     manufacturer for such product.
       (d) Required Percentage Reductions.--The reductions 
     required in this subsection are as follows:
       (1) In the case of cigarettes--
       (A) with respect to the third and fourth annual performance 
     surveys, 20 percent;
       (B) with respect to the fifth and sixth annual performance 
     surveys, 40 percent;
       (C) with respect to the seventh, eighth, and ninth annual 
     performance surveys, 55 percent; and
       (D) with respect to the 10th annual performance survey and 
     each annual performance survey thereafter, 67 percent.
       (2) In the case of smokeless tobacco--
       (A) with respect to the third and fourth annual performance 
     surveys, 12.5 percent;
       (B) with respect to the fifth and sixth annual performance 
     surveys, 25 percent;
       (C) with respect to the seventh, eighth, and ninth annual 
     performance surveys, 35 percent; and
       (D) with respect to the 10th annual performance survey and 
     each annual performance survey thereafter, 45 percent.
       (e) Report on Further Reductions.--The Secretary shall 
     report to Congress by the end of 2006 on the feasibility of 
     further reduction in underage tobacco use.
       (f) Performance Objective Relative to the De Minimis 
     Level.--If the percentage of children determined to have used 
     a type of the tobacco products of an existing manufacturer in 
     an annual performance survey is equal to or less than the de 
     minimis level, the manufacturer shall be considered to have 
     achieved the applicable performance objective.
       (g) Performance Objectives for New Manufacturers.--Each new 
     manufacturer shall have as its performance objective 
     maintaining the percentage of children determined to have 
     used each type of such manufacturer's tobacco products in 
     each annual performance survey at a level equal to or less 
     than the de minimis level for that year.
       (h) De Minimis Level.--The de minimis level shall be 1 
     percent of children for the applicable year.

     SEC. 205. MEASURES TO HELP ACHIEVE THE PERFORMANCE 
                   OBJECTIVES.

       (a) Annual Determination.--Beginning in 2001, and annually 
     thereafter, the Secretary shall, based on the annual 
     performance surveys conducted under section 203, determine if 
     the performance objectives for each type of tobacco product 
     under section 204 has been achieved and if each manufacturer 
     has achieved the applicable performance objective under 
     section 204. The Secretary shall publish in the Federal 
     Register such determinations and any appropriate additional 
     information regarding actions taken under this section.
       (b) Industry-Wide Non-Attainment Assessments.--
       (1) Industry-wide non-attainment percentage.--The Secretary 
     shall determine the industry-wide non-attainment percentage, 
     if any, for cigarettes and for smokeless tobacco for each 
     calendar year.
       (2) Non-attainment assessment for cigarettes.--For each 
     calendar year in which the performance objective under 
     section 204(b) is not attained for cigarettes, the Secretary 
     shall assess a surcharge on cigarette manufacturers as 
     follows:

----------------------------------------------------------------------------------------------------------------
                If the non-attainment percentage is:                             The surcharge is:
----------------------------------------------------------------------------------------------------------------
Not more than 5 percentage points                                   $40,000,000 multiplied by the non-attainment
                                                                                                      percentage
More than 5 but not more than 20 percentage points                 $200,000,000, plus $120,000,000 multiplied by
                                                                    the non-attainment percentage in excess of 5
                                                                       but not in excess of 20 percentage points
More than 20 percentage points                                                                    $2,000,000,000
----------------------------------------------------------------------------------------------------------------

       (3) Non-attainment assessment for smokeless tobacco.--For 
     each year in which the performance objective under section 
     204(b) is not attained for smokeless tobacco, the Secretary 
     shall assess a surcharge on smokeless tobacco product 
     manufacturers as follows:

----------------------------------------------------------------------------------------------------------------
                If the non-attainment percentage is:                             The surcharge is:
----------------------------------------------------------------------------------------------------------------
Not more than 5 percentage points                                    $4,000,000 multiplied by the non-attainment
                                                                                                      percentage
More than 5 but not more than 20 percentage points                   $20,000,000, plus $12,000,000 multiplied by
                                                                    the non-attainment percentage in excess of 5
                                                                       but not in excess of 20 percentage points
More than 20 percentage points                                                                      $200,000,000
----------------------------------------------------------------------------------------------------------------

       (4) Strict liability; joint and several liability.--
     Liability for any surcharge imposed under this subsection 
     shall be--
       (A) strict liability; and

[[Page S5990]]

       (B) joint and several liability--
       (i) among all cigarette manufacturers for surcharges 
     imposed under paragraph (2); and
       (ii) among all smokeless tobacco manufacturers for 
     surcharges imposed under paragraph (3).
       (5) Surcharge liability among manufacturers.--A tobacco 
     product manufacturer shall be liable under this subsection to 
     one or more other manufacturers if the plaintiff tobacco 
     product manufacturer establishes by a preponderance of the 
     evidence that the defendant tobacco product manufacturer, 
     through its acts or omissions, was responsible for a 
     disproportionate share of the non-attainment surcharge as 
     compared to the responsibility of the plaintiff manufacturer.
       (6) Exemptions for small manufacturers.--
       (A) Allocation by market share.--The Secretary shall 
     allocate the assessments under this subsection according to 
     each manufacturer's share of the domestic cigarette or 
     domestic smokeless tobacco market, as appropriate, in the 
     year for which the surcharge is being assessed, based on 
     actual Federal excise tax payments.
       (B) Exemption.--In any year in which a surcharge is being 
     assessed, the Secretary shall exempt from payment any tobacco 
     product manufacturer with less than 1 percent of the domestic 
     market share for a specific category of tobacco product 
     unless the Secretary finds that the manufacturer's products 
     are used by underage individuals at a rate equal to or 
     greater than the manufacturer's total market share for the 
     type of tobacco product.
       (c) Manufacturer-Specific Surcharges.--
       (1) In general.--If the Secretary determines that the 
     required percentage reduction in use of a type of tobacco 
     product has not been achieved by a manufacturer for a year, 
     the Secretary shall impose a surcharge on such manufacturer 
     under this paragraph.
       (2) Cigarettes.--For each calendar year in which a 
     cigarette manufacturer fails to achieve the performance 
     objective under section 204(c), the Secretary shall assess a 
     surcharge on that manufacturer in an amount equal to the 
     manufacturer's share of youth incidence for cigarettes 
     multiplied by the following surcharge level:

----------------------------------------------------------------------------------------------------------------
     If the non-attainment percentage for the manufacturer is:                The surcharge level is:
----------------------------------------------------------------------------------------------------------------
Not more than 5 percentage points                                   $80,000,000 multiplied by the non-attainment
                                                                                                      percentage
More than 5 but not more than 24.1 percentage points               $400,000,000, plus $240,000,000 multiplied by
                                                                    the non-attainment percentage in excess of 5
                                                                     but not in excess of 24.1 percentage points
More than 24.1 percentage points                                                                  $5,000,000,000
----------------------------------------------------------------------------------------------------------------

       (3) Smokeless tobacco.--For each calendar year in which a 
     smokeless tobacco product manufacturer fails to achieve the 
     performance objective under section 204(c), the Secretary 
     shall assess a surcharge on that manufacturer in an amount 
     equal to the manufacturer's share of youth incidence for 
     smokeless tobacco products multiplied by the following 
     surcharge level:

----------------------------------------------------------------------------------------------------------------
     If the non-attainment percentage for the manufacturer is:                The surcharge level is:
----------------------------------------------------------------------------------------------------------------
Not more than 5 percentage points                                    $8,000,000 multiplied by the non-attainment
                                                                                                      percentage
More than 5 but not more than 24.1 percentage points                 $40,000,000, plus $24,000,000 multiplied by
                                                                    the non-attainment percentage in excess of 5
                                                                     but not in excess of 24.1 percentage points
More than 24.1 percentage points                                                                    $500,000,000
----------------------------------------------------------------------------------------------------------------

       (4) Manufacturer's share of youth incidence.--For purposes 
     of this subsection, the them ``manufacturer's share of youth 
     incidence'' means--
       (A) for cigarettes, the percentage of all youth smokers 
     determined to have used that manufacturer's cigarettes; and
       (B) for smokeless tobacco products, the percentage of all 
     youth users of smokeless tobacco products determined to have 
     used that manufacturer's smokeless tobacco products.
       (5) De minimis levels.--If a manufacturer is a new 
     manufacturer or the manufacturer's baseline level for a type 
     of tobacco product is less than the de minimis level, the 
     non-attainment percentage (for purposes of paragraph (2) or 
     (3)) shall be equal to the number of percentage points by 
     which the percentage of children who used the manufacturer's 
     tobacco products of the applicable type exceeds the de 
     minimis level.
       (d) Surcharges To Be Adjusted for Inflation.--
       (1) In general.--Beginning with the fourth calendar year 
     after the date of enactment of this Act, each dollar amount 
     in the tables in subsections (b)(2), (b)(3), (c)(2), and 
     (c)(3) shall be increased by the inflation adjustment.
       (2) Inflation adjustment.--For purposes of paragraph (1), 
     the inflation adjustment for any calendar year is the 
     percentage (if any) by which--
       (A) the CPI for the preceding calendar year; exceeds
       (B) the CPI for the calendar year 1998.
       (3) CPI.--For purposes of paragraph (2), the CPI for any 
     calendar year is the average of the Consumer Price Index for 
     all-urban consumers published by the Department of Labor.
       (4) Rounding.--If any increase determined under paragraph 
     (1) is not a multiple of $1,000, the increase shall be 
     rounded to the nearest multiple of $1,000.
       (e) Method of Surcharge Assessment.--The Secretary shall 
     assess a surcharge for a specific calendar year on or before 
     May 1 of the subsequent calendar year. Surcharge payments 
     shall be paid on or before July 1 of the year in which they 
     are assessed. The Secretary may establish, by regulation, 
     interest at a rate up to 3 times the prevailing prime rate at 
     the time the surcharge is assessed, and additional charges in 
     an amount up to 3 times the surcharge, for late payment of 
     the surcharge.
       (f) Business Expense Deduction.--In order to maximize the 
     financial deterrent effect of the assessments and surcharges 
     established in this section, any such payment shall not be 
     deductible as an ordinary and necessary business expense or 
     otherwise under the Internal Revenue Code of 1986.
       (g) Procedures.--In assessing price increase assessments 
     and enforcing other measures under this section, the 
     Secretary shall have in place procedures to take into account 
     the effect that the margin of error of the annual performance 
     survey may have on the amounts assessed to or measures 
     required of such manufacturers.
       (h) Other Products.--The Secretary shall promulgate 
     regulations establishing performance objectives for the 
     reduction of the use by children of other products made or 
     derived from tobacco and intended for human consumption if 
     significant percentages of children use or begin to use such 
     products and the inclusion of such products as types of 
     tobacco products under this subtitle would help protect the 
     public health. Such regulations shall contain provisions, 
     consistent with the provisions in this subtitle applicable to 
     cigarettes and smokeless tobacco, for the application of 
     assessments and surcharges to achieve reductions in the 
     percentage of children who use such products.
       (i) Appeal Rights.--The amount of any surcharge is 
     committed to the sound discretion of the Secretary and shall 
     be subject to judicial review by the United States Court of 
     Appeals for the District of Columbia Circuit, based on the 
     arbitrary and capricious standard of section 706(2)(A) of 
     title 5, United States Code. Notwithstanding any other 
     provisions of law, no court shall have authority to stay any 
     surcharge payments due the Secretary under this Act pending 
     judicial review.
       (j) Responsibility for Agents.--In any action brought under 
     this subsection, a tobacco product manufacturer shall be held 
     responsible for any act or omission of its attorneys, 
     advertising agencies, or other agents that contributed to 
     that manufacturer's responsibility for the surcharge assessed 
     under this section.

     SEC. 206. DEFINITIONS.

       In this subtitle:
       (1) Children.--The term ``children'' means individuals who 
     are 12 years of age or older and under the age of 18.
       (2) Cigarette manufacturers.--The term ``cigarette 
     manufacturers'' means manufacturers of cigarettes sold in the 
     United States.
       (3) Existing manufacturer.--The term ``existing 
     manufacturer'' means a manufacturer which manufactured a 
     tobacco product on or before the date of the enactment of 
     this title.
       (4) New manufacturer.--The term ``new manufacturer'' means 
     a manufacturer which begins to manufacture a type of tobacco 
     product after the date of the enactment of this title.
       (5) Non-attainment percentage.--The term ``non-attainment 
     percentage'' means the number of percentage points yielded--
       (A) for a calendar year in which the percent incidence of 
     underage use of the applicable type of tobacco product is 
     less than the baseline level, by subtracting--
       (i) the percentage by which the percent incidence of 
     underage use of the applicable type of tobacco product in 
     that year is less than the baseline level, from
       (ii) the required percentage reduction applicable in that 
     year; and
       (B) for a calendar year in which the percent incidence of 
     underage use of the applicable type of tobacco product is 
     greater than the baseline level, adding--
       (i) the percentage by which the percent incidence of 
     underage use of the applicable type of tobacco product in 
     that year is greater than the baseline level; and
       (ii) the required percentage reduction applicable in that 
     year.
       (6) Smokeless tobacco product manufacturers.--The term 
     ``smokeless tobacco product manufacturers'' means 
     manufacturers of smokeless tobacco products sold in the 
     United States.

                          ____________________