[Congressional Record Volume 144, Number 75 (Thursday, June 11, 1998)]
[Senate]
[Pages S6206-S6253]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          AMENDMENTS SUBMITTED

                                 ______
                                 

        NATIONAL TOBACCO POLICY AND YOUTH SMOKING REDUCTION ACT

                                 ______
                                 

                 KERRY (AND OTHERS) AMENDMENT NO. 2689

  Mr. KERRY (for himself, Mr. Bond, Mr. Chafee, Mr. Kennedy, Mr. Dodd, 
Mr. Wellstone, Mr. Johnson, Mrs. Boxer, Mr. Specter, Ms. Landrieu, Mr. 
Durbin, Mr. Graham, Mr. Bingaman, and Mr. Kohl) proposed an amendment 
to the bill (S. 1415) to reform and restructure the process by which 
tobacco products are manufactured, marketed, and distributed, to 
prevent the use of tobacco products by minors, to redress the adverse 
health effects of tobacco use, and for other purposes; as follows:

       At the end, add the following:
       (  ) Assistance for Children.--A State shall use not less 
     than 50 percent of the amount described in subsection (b)(2) 
     of section 452 for each fiscal year to carry out activities 
     under the Child Care and Development Block Grant Act of 1990 
     (42 U.S.C. 9858 et seq.)
                                 ______
                                 

             TORRICELLI (AND WELLSTONE) AMENDMENT NO. 2690

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

       On page 201, between lines 19 and 20, insert the following:
       (3) Medicaid children's enrollment performance bonus.--
       (A) Set aside of funds.--Notwithstanding the preceding 
     paragraphs of this subsection, 15 percent of the amount 
     received under this section in a fiscal year shall not be 
     used by a State unless the State satisfies the requirements 
     of subparagraphs (B) and (C).
       (B) Demonstration of implementation of outreach 
     strategies.--A State shall demonstrate to the satisfaction of 
     the Secretary that the State has a commitment to reach and 
     enroll children who are eligible for but not enrolled under 
     the State plan through effective implementation of each of 
     the following outreach activities:
       (i) Streamlined eligibility procedures.--

       (I) In general.--The State uses streamlined procedures 
     described in subclause (II) for determining the eligibility 
     for medical assistance of, and enrollment in the State plan 
     under title XIX of the Social Security Act (42 U.S.C. 1396 et 
     seq.) of--

       (aa) children in families with incomes that do not exceed 
     the effective income level (expressed as a percent of the 
     poverty line) that has been specified under such State plan 
     (including under a waiver authorized by the Secretary or 
     under section 1902(r)(2) of such Act (42 U.S.C. 1396a(r)(2))) 
     for the child to be eligible for medical assistance under 
     section 1902(l)(2) or 1905(n)(2) (as selected by a State) of 
     such Act (42 U.S.C. 1396a(l)(2), 1396d(n)(2)) for the age of 
     such child; and
       (bb) children determined eligible for such assistance, and 
     enrolled in the State plan under title XIX of the Social 
     Security Act, in accordance with the requirements of 
     paragraphs (1) and (2) of section 1931(b) of such Act (42 
     U.S.C. 1396u-1(b)).

       (II) Procedures described.--The streamlined procedures 
     described in this subclause include--

       (aa) using shortened and simplified applications for the 
     children described in subclause (I);
       (bb) eliminating the assets test for determining the 
     eligibility of such children; and
       (cc) allowing applications for such children to be 
     submitted by mail or telephone.
       (ii) Continuous eligibility for children.--The State 
     provides (or demonstrates to the satisfaction of the 
     Secretary that, not later than fiscal year 2001, the State 
     shall provide) for 12-months of continuous eligibility for 
     children in accordance with section 1902(e)(12) of the Social 
     Security Act (42 U.S.C. 1396a(e)(12)).
       (iii) Presumptive eligibility for children.--The State 
     provides (or demonstrates to the satisfaction of the 
     Secretary that, not later than fiscal year 2001, the State 
     shall provide) for making medical assistance available to 
     children during a presumptive eligibility period in 
     accordance with section 1920A of the Social Security Act (42 
     U.S.C. 1396r-1a).
       (iv) Outstationing and alternative applications.--The State 
     complies with the requirements of section 1902(a)(55) of the 
     Social Security Act (42 U.S.C. 1396a(a)(55)) (relating to 
     outstationing of eligibility workers for the receipt and 
     initial processing of applications for medical assistance and 
     the use of alternative application forms).
       (v) Simplified verification of eligibility requirements.--
     The State demonstrates to the satisfaction of the Secretary 
     that the State uses only the minimum level of verification 
     requirements as are necessary for the State to ensure 
     accurate eligibility determinations under the State plan 
     under title XIX of the Social Security Act (42 U.S.C. 1396 et 
     seq.).
       (C) Report on number of enrollments resulting from 
     outreach.--A State shall annually report to the Secretary on 
     the number of full year equivalent children that are 
     determined to be eligible for medical assistance under the 
     State plan under title XIX of the Social Security Act and are 
     enrolled under the plan as a result of--
       (i) having been provided presumptive eligibility in 
     accordance with section 1920A of such Act (42 U.S.C. 1396r-
     1a);
       (ii) having submitted an application for such assistance 
     through an outstationed eligibility worker; and
       (iii) having submitted an application for such assistance 
     by mail or telephone.

[[Page S6207]]

       (D) Procedure for redistribution of unused set asides.--The 
     Secretary shall determine an appropriate procedure for the 
     redistribution of funds set aside under this paragraph for a 
     State for a fiscal year that are not used by the State during 
     that fiscal year because the State did not satisfy the 
     requirements of subparagraphs (B) and (C) to States that have 
     satisfied such requirements for such fiscal year and have 
     fully expended the amount of State funds so set aside.
       (E) Application of restriction on substitution of 
     spending.--The provisions of subsection (c) of this section 
     apply to this paragraph in the same manner and to the same 
     extent as such provisions apply to the program described in 
     paragraph (2)(G) of this subsection.
                                 ______
                                 

              FORD (AND OTHERS) AMENDMENTS NOS. 2691-2692

  (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. 2691

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


                           Amendment No. 2692

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

     SEC. 1418. EFFECTIVE DATE.

       The amendments made by this subtitle take effect on the 
     date of enactment of this Act.
                                 ______
                                 

                        FORD AMENDMENT No. 2693

  (Ordered to lie on the table.)
  Mr. FORD submitted an amendment intended to be proposed by him 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.

[[Page S6208]]

       (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--
       (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,

[[Page S6209]]

     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.--
       (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.

[[Page S6210]]

       (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).
       (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

[[Page S6211]]

     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 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,

[[Page S6212]]

     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.--
       ``(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

[[Page S6213]]

       ``(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 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

[[Page S6214]]

     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 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

[[Page S6215]]

     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); or
       ``(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

[[Page S6216]]

     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. Notwithstanding any other provision of law, 
     Title XV shall have no force and effect.

                       Subtitle F--Effective Date

       Sec. 1061. The provisions of this title shall be effective 
     one day after the enactment of this Act.
                                 ______
                                 

                  FORD (AND OTHERS) AMENDMENT NO. 2694

  (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. 2501 
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;

[[Page S6217]]

       (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 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

[[Page S6218]]

     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 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

[[Page S6219]]

     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);
       (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;

[[Page S6220]]

       (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 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

[[Page S6221]]

       ``(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 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.--

[[Page S6222]]

       ``(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 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

[[Page S6223]]

     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 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

[[Page S6224]]

     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 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.).

[[Page S6225]]

     ``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

                           *   *   *   *   *

                                 ______
                                 

                  FORD (AND OTHERS) AMENDMENT NO. 2695

  (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

[[Page S6226]]

     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 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--

[[Page S6227]]

       (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 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--

[[Page S6228]]

       (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 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--

[[Page S6229]]

       (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--
       ``(A) prior to--
       ``(i) any increase or decrease in the number due to 
     undermarketings or overmarketings; and
       ``(ii) any reduction under subsection (i); and

[[Page S6230]]

       ``(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 S6231]]

       ``(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 S6232]]

     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 S6233]]

     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 S6234]]

     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--Miscellaneous

     SEC. 1051. ASSISTANCE FOR PRODUCERS EXPERIENCING LOSSES OF 
                   FARM INCOME.

       (a) In General.--Notwithstanding any other provision of 
     this title, from amounts made available to carry out this 
     title, the Secretary of Agriculture shall use $250,000,000 
     for each of fiscal years 1999 through 2004 to establish a 
     program to indemnify eligible producers that have 
     experienced, or are experiencing, catastrophic losses in farm 
     income, as determined by the Secretary.
       (b) Gross Income and Payment Limitations.--In carrying out 
     this section, the Secretary shall, to the maximum extent 
     practicable, use gross income and payment limitations 
     established for the Disaster Reserve Assistance Program under 
     section 813 of the Agricultural Act of 1970 (7 U.S.C. 1427a).

     SEC. 1052. APPLICABILITY OF TITLE XV.

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

                     FORD AMENDMENT NOS. 2696-2697

  (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 amendment No. 2493 
proposed by Mr. Lugar to the bill, S. 1415, supra; as follows:

                           Amendment No. 2696

       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.

[[Page S6235]]

       (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.--
       (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,

[[Page S6236]]

     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), (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

[[Page S6237]]

       (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 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).

[[Page S6238]]

       (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 
     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

[[Page S6239]]

     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.--
       ``(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

[[Page S6240]]

     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.
       ``(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

[[Page S6241]]

     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 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,''.

[[Page S6242]]

          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 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

[[Page S6243]]

     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 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'

[[Page S6244]]

     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--Miscellaneous

     SEC. 1051. ASSISTANCE FOR PRODUCERS EXPERIENCING LOSSES OF 
                   FARM INCOME.

       (a) In General.--Notwithstanding any other provision of 
     this title, from amounts made available to carry out this 
     title, the Secretary of Agriculture shall use $250,000,000 
     for each of fiscal years 1999 through 2004 to establish a 
     program to indemnify eligible producers that have 
     experienced, or are experiencing, catastrophic losses in farm 
     income, as determined by the Secretary.
       (b) Gross Income and Payment Limitations.--In carrying out 
     this section, the Secretary shall, to the maximum extent 
     practicable, use gross income and payment limitations 
     established for the Disaster Reserve Assistance Program under 
     section 813 of the Agricultural Act of 1970 (7 U.S.C. 1427a).

     SEC. 1052. APPLICABILITY OF TITLE XV.

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


                           Amendment No. 2697

       Strike title X and insert the following:
       Strike ``Strike title X.'' and 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 S6245]]

       (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 S6246]]

       (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 S6247]]

       (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 S6248]]

       (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 S6249]]

     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 S6250]]

       ``(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 S6251]]

     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 S6252]]

     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;(I26  ``(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 S6253]]

       ``(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--Resolution of Conflict with Title XV

     SEC. 1051. TITLE XV NULL AND VOID.

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

                          ____________________