Tobacco Reduction, Accountability, and Community Enhancement Act of 2003 - Amends, and repeals, specified agricultural Acts to eliminate tobacco quota and price support programs, including no net cost provisions.
Adds a new subtitle, Subtitle E: Tobacco Assistance, to title III of the Agricultural Adjustment Act of 1938 which requires the Secretary of Agriculture to make transition payments to each tobacco quota holder (generally, an owner of a farm, as of July 1, 2002, for which a basic tobacco marketing or farm acreage allotment for quota tobacco was established for the 2002 tobacco marketing year under a marketing quota program).
Requires the Secretary to make direct payments to a traditional producer of tobacco (a person that, for at least one of the 2000, 2001, or 2002 tobacco marketing years, was actively engaged in the production of tobacco marketed, or considered planted, under a marketing quota and shared in the risk of producing the tobacco).
Directs the Secretary to establish: (1) a permanent Tobacco Advisory Board for each kind of tobacco; and (2) a poundage limitation program for each crop of each kind of tobacco.
Directs the Secretary, during any marketing year period in which the insured price for the crop of a kind of tobacco exceeds the average domestic price for such tobacco, to make market stability payments available to active producers of such tobacco.
Directs the Secretary to make research grants to colleges and universities in eligible States to: (1) assist tobacco producers reduce or eliminate reliance on tobacco production through crop diversification, or to promote alternative tobacco uses or enhance tobacco quality; and (2) foster development of economically viable new agricultural technologies and enterprises for rural communities.
Establishes in the Commodity Credit Corporation a revolving Tobacco Trust Fund to carry this subtitle. Deposits into the Fund a quarterly assessment (imposed by this Act) on each tobacco product manufacturer and tobacco product importer that sells tobacco products in domestic U.S. commerce.
Sets forth tobacco stocks and no net cost transition provisions.
[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3160 Introduced in House (IH)]
108th CONGRESS
1st Session
H. R. 3160
To eliminate the Federal quota and price support programs for tobacco,
to provide transitional assistance to tobacco quota holders and
traditional producers of tobacco affected by the elimination of these
programs, to ensure the future quality and availability of United
States-grown tobacco, to protect against the disruption of tobacco
markets, to establish a trust fund to finance this Act, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
September 24, 2003
Mr. Fletcher (for himself, Mr. McIntyre, Mr. Goode, Mr. Etheridge, Mr.
Ballance, Mr. Ballenger, Mr. Barrett of South Carolina, Mr. Bishop of
Georgia, Mrs. Blackburn, Mr. Boucher, Mr. Boyd, Mr. Brown of South
Carolina, Mr. Clyburn, Mr. Collins, Mr. Cooper, Mr. Davis of Tennessee,
Mr. Tom Davis of Virginia, Mr. DeMint, Mr. Gordon, Mr. Hayes, Mr. Hill,
Mr. Kingston, Mr. Lewis of Kentucky, Mr. Lucas of Kentucky, Mr.
Marshall, Mr. Miller of North Carolina, Mr. Norwood, Mr. Peterson of
Minnesota, Mr. Price of North Carolina, Mr. Rogers of Kentucky, Mr.
Scott of Georgia, Mr. Spratt, Mr. Thompson of Mississippi, Mr. Wamp,
Mr. Whitfield, Mr. Wilson of South Carolina, Mr. Duncan, Mr. Murtha,
and Mr. Isakson) introduced the following bill; which was referred to
the Committee on Agriculture
_______________________________________________________________________
A BILL
To eliminate the Federal quota and price support programs for tobacco,
to provide transitional assistance to tobacco quota holders and
traditional producers of tobacco affected by the elimination of these
programs, to ensure the future quality and availability of United
States-grown tobacco, to protect against the disruption of tobacco
markets, to establish a trust fund to finance this Act, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Tobacco Reduction,
Accountability, and Community Enhancement Act of 2003''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Termination of tobacco production adjustment programs.
Sec. 3. Termination of tobacco price support program.
Sec. 4. Liability.
Sec. 5. Replacement tobacco assistance programs.
Sec. 6. Regulations.
Sec. 7. Severability.
Sec. 8. Effective date.
SEC. 2. TERMINATION OF TOBACCO PRODUCTION ADJUSTMENT PROGRAMS.
(a) Tobacco Standards.--The Tobacco Inspection Act (7 U.S.C. 511 et
seq.) is repealed.
(b) Tobacco Field Measurement.--Section 1112 of the Omnibus Budget
Reconciliation Act of 1987 (Public Law 100-203) is amended by striking
subsection (c).
(c) Tobacco Inspections.--Section 213 of the Tobacco Adjustment Act
of 1983 (7 U.S.C. 511r) is repealed.
(d) Tobacco Control.--The Act of April 25, 1936 (commonly known as
the Tobacco Control Act; 7 U.S.C. 515 et seq.), is repealed.
(e) Commodity Handling Orders.--Section 8c(2)(A) of the
Agricultural Adjustment Act (7 U.S.C. 608c(2)(A)), reenacted with
amendments by the Agricultural Marketing Agreement Act of 1937, is
amended by striking ``tobacco,''.
(f) Processing Tax.--Section 9(b) of the Agricultural Adjustment
Act (7 U.S.C. 609(b)), reenacted with amendments by the Agricultural
Marketing Agreement Act of 1937, is amended--
(1) in paragraph (2), by striking ``tobacco,''; and
(2) in paragraph (6)(B)(i), by striking ``, or, in the case
of tobacco, is less than the fair exchange value by not more
than 10 per centum,''.
(g) Burley Tobacco Import Review.--Section 3 of Public Law 98-59 (7
U.S.C. 625) is repealed.
(h) Declaration of Policy.--Section 2 of the Agricultural
Adjustment Act of 1938 (7 U.S.C. 1282) is amended by striking
``tobacco,''.
(i) Definitions.--Section 301(b) of the Agricultural Adjustment Act
of 1938 (7 U.S.C. 1301(b)) is amended--
(1) in paragraph (3)--
(A) by striking subparagraph (C); and
(B) by redesignating subparagraph (D) as
subparagraph (C);
(2) in paragraph (6)(A), by striking ``tobacco,'';
(3) in paragraph (10)--
(A) by striking subparagraph (B); and
(B) by redesignating subparagraph (C) as
subparagraph (B);
(4) in paragraph (11)(B), by striking ``and tobacco'';
(5) in paragraph (12), by striking ``tobacco,'';
(6) in paragraph (14)--
(A) in subparagraph (A), by striking ``(A)''; and
(B) by striking subparagraphs (B), (C), and (D);
(7) by striking paragraph (15);
(8) in paragraph (16)--
(A) by striking subparagraph (B); and
(B) by redesignating subparagraph (C) as
subparagraph (B);
(9) by striking paragraph (17); and
(10) by redesignating paragraph (16) as paragraph (15).
(j) Parity Payments.--Section 303 of the Agricultural Adjustment
Act of 1938 (7 U.S.C. 1303) is amended in the first sentence by
striking ``rice, or tobacco,'' and inserting ``or rice,''.
(k) Marketing Quotas.--Part I of subtitle B of title III of the
Agricultural Adjustment Act of 1938 (7 U.S.C. 1311 et seq.) is
repealed.
(l) Administrative Provisions.--Section 361 of the Agricultural
Adjustment Act of 1938 (7 U.S.C. 1361) is amended by striking
``tobacco,''.
(m) Adjustment of Quotas.--Section 371 of the Agricultural
Adjustment Act of 1938 (7 U.S.C. 1371) is amended--
(1) in the first sentence of subsection (a), by striking
``rice, or tobacco'' and inserting ``or rice''; and
(2) in the first sentence of subsection (b), by striking
``rice, or tobacco'' and inserting ``or rice''.
(n) Reports and Records.--Section 373 of the Agricultural
Adjustment Act of 1938 (7 U.S.C. 1373) is amended--
(1) by striking ``rice, or tobacco'' each place it appears
in subsections (a) and (b) and inserting ``or rice''; and
(2) in subsection (a)--
(A) in the first sentence, by striking ``all
persons engaged in the business of redrying, prizing,
or stemming tobacco for producers,''; and
(B) in the last sentence, by striking ``$500;'' and
all that follows through the period at the end of the
sentence and inserting ``$500.''.
(o) Regulations.--Section 375 of the Agricultural Adjustment Act of
1938 (7 U.S.C. 1375) is amended--
(1) in subsection (a), by striking ``peanuts, or tobacco''
and inserting ``or peanuts''; and
(2) by striking subsection (c).
(p) Eminent Domain.--Section 378 of the Agricultural Adjustment Act
of 1938 (7 U.S.C. 1378) is amended--
(1) in the first sentence of subsection (c), by striking
``cotton, and tobacco'' and inserting ``and cotton''; and
(2) by striking subsections (d), (e), and (f).
(q) Burley Tobacco Farm Reconstitution.--Section 379 of the
Agricultural Adjustment Act of 1938 (7 U.S.C. 1379) is amended--
(1) in subsection (a)--
(A) by striking ``(a)''; and
(B) in paragraph (6), by striking ``, but this
clause (6) shall not be applicable in the case of
burley tobacco''; and
(2) by striking subsections (b) and (c).
(r) Acreage-Poundage Quotas.--Section 4 of the Act of April 16,
1955 (Public Law 89-12; 7 U.S.C. 1314c note), is repealed.
(s) Burley Tobacco Acreage Allotments.--The Act of July 12, 1952 (7
U.S.C. 1315), is repealed.
(t) Transfer of Allotments.--Section 703 of the Food and
Agriculture Act of 1965 (7 U.S.C. 1316) is repealed.
(u) Advance Recourse Loans.--Section 13(a)(2)(B) of the Food
Security Improvements Act of 1986 (7 U.S.C. 1433c-1(a)(2)(B)) is
amended by striking ``tobacco and''.
SEC. 3. TERMINATION OF TOBACCO PRICE SUPPORT PROGRAM.
(a) Parity Price Support.--Section 101 of the Agricultural Act of
1949 (7 U.S.C. 1441) is amended--
(1) in the first sentence of subsection (a), by striking
``tobacco (except as otherwise provided herein), corn,'' and
inserting ``corn'';
(2) by striking subsections (c), (g), (h), and (i);
(3) in subsection (d)(3)--
(A) by striking ``, except tobacco,''; and
(B) by striking ``and no price support shall be
made available for any crop of tobacco for which
marketing quotas have been disapproved by producers;'';
and
(4) by redesignating subsections (d) and (e) as subsections
(c) and (d), respectively.
(b) Termination of Tobacco Price Support and No Net Cost
Provisions.--Sections 106, 106A, and 106B of the Agricultural Act of
1949 (7 U.S.C. 1445, 1445-1, 1445-2) are repealed.
(c) Definition of Basic Agricultural Commodity.--Section 408(c) of
the Agricultural Act of 1949 (7 U.S.C. 1428(c)) is amended by striking
``tobacco,''.
(d) Review of Burley Tobacco Imports.--Section 3 of Public Law 98-
59 (7 U.S.C. 625) is repealed.
(e) Powers of Commodity Credit Corporation.--Section 5 of the
Commodity Credit Corporation Charter Act (15 U.S.C. 714c) is amended by
inserting ``(other than tobacco)'' after ``agricultural commodities''
each place it appears.
SEC. 4. LIABILITY.
The amendments made by sections 2 and 3 shall not affect the
liability of any person under any provision of law so amended with
respect to any crop of tobacco planted before the effective date of
this Act.
SEC. 5. REPLACEMENT TOBACCO ASSISTANCE PROGRAMS.
(a) In General.--Title III of the Agricultural Adjustment Act of
1938 is amended by inserting after subtitle D (7 U.S.C. 1379a et seq.)
the following:
``Subtitle E--Tobacco Assistance
``SEC. 380A. DEFINITIONS.
``In this subtitle:
``(1) Active tobacco producer.--The term `active tobacco
producer', with respect to a kind of tobacco, means a person
that--
``(A) is actively engaged in the production of
tobacco marketed or considered planted; and
``(B) shares in the risk of producing the tobacco.
``(2) Applicable fiscal year.--The term `applicable fiscal
year' means each of fiscal years 2004 through 2011.
``(3) Base period.--The term `base period' means the six-
month period from January 1, 2004, through June 30, 2004, and
each three-month period thereafter through the three-month
period ending on June 30, 2011.
``(4) Considered planted.--The term `considered planted'
means tobacco planted but failed to be produced as a result of
a natural disaster, as determined by the Secretary.
``(5) Department.--The term `Department' means the
Department of Agriculture.
``(6) Eligible state.--The term `eligible State' means each
of the States of Alabama, Arkansas, Florida, Georgia, Indiana,
Kansas, Kentucky, Minnesota, Missouri, North Carolina, Ohio,
Oklahoma, South Carolina, Tennessee, Virginia, West Virginia,
and Wisconsin.
``(7) Market share.--The term `market share' means the
share of each manufacturer or importer of a class of tobacco
product (expressed as a decimal to the fourth place) of the
total volume of domestic sales of the class of tobacco product
during the base period for the applicable fiscal year for an
assessment under section 380T.
``(8) Quota tobacco.--The term `quota tobacco' means a kind
of tobacco that is subject to a farm marketing quota or farm
acreage allotment for the 2002 tobacco marketing year under a
marketing quota or allotment program established under part I
of subtitle B of this title (as in effect on the day before the
date of the enactment of the Tobacco Reduction, Accountability,
and Community Enhancement Act of 2003).
``(9) Tobacco.--The term `tobacco' means each of the
following kinds of tobacco:
``(A) Flue-cured tobacco, comprising types 11, 12,
13, and 14.
``(B) Fire-cured tobacco, comprising types 22 and
23.
``(C) Dark air-cured tobacco, comprising types 35
and 36.
``(D) Virginia sun-cured tobacco, comprising type
37.
``(E) Virginia fire-cured tobacco, comprising type
21.
``(F) Burley tobacco, comprising type 31.
``(G) Cigar-filler and cigar-binder tobacco,
comprising types 42, 43, 44, 53, 54, and 55.
``(10) Tobacco advisory board.--The terms `Tobacco Advisory
Board' and `Board' mean a Tobacco Advisory Board established
under section 380G for a kind of tobacco.
``(11) Tobacco quota holder.--The term `tobacco quota
holder' means a person that is considered a tobacco quota
holder under section 380B(b).
``(12) Tobacco trust fund.--The terms `Tobacco Trust Fund'
and `Fund' mean the Tobacco Trust Fund established under
section 380S.
``(13) Traditional producer of tobacco.--The term
`traditional producer of tobacco' means a person that, for at
least 1 of the 2000, 2001, or 2002 tobacco marketing years--
``(A) was actively engaged in the production of
tobacco marketed, or considered planted, under a
marketing quota established under part I of subtitle B
of this title (as in effect on the day before the date
of the enactment of the Tobacco Reduction,
Accountability, and Community Enhancement Act of 2003);
and
``(B) shared in the risk of producing the tobacco.
``(14) Traditional tobacco county.--The term `traditional
tobacco county' means a county in the United States that had 1
or more farms operated by traditional producers of tobacco
under a marketing quota for at least 1 of the 2000, 2001, or
2002 tobacco marketing years. To determine the crop poundage
base of an active tobacco producer for a kind of tobacco
produced in the State of Georgia under section 380I, the term
includes a county that is contiguous to a county described in
the preceding sentence.
``CHAPTER 1--PAYMENTS TO TOBACCO QUOTA HOLDERS AND TRADITIONAL
PRODUCERS
``SEC. 380B. EQUITY RELIEF PAYMENTS TO TOBACCO QUOTA HOLDERS.
``(a) In General.--The Secretary shall make transition payments
under this section to each tobacco quota holder.
``(b) Tobacco Quota Holder.--
``(1) In general.--Except as otherwise provided in this
subsection, the Secretary shall consider a person to be a
tobacco quota holder under this section if the person was an
owner of a farm, as of July 1, 2002, for which a basic tobacco
farm marketing quota or farm acreage allotment for quota
tobacco was established with respect to the 2002 tobacco
marketing year under a marketing quota program established
under part I of subtitle B of this title (as in effect on the
day before the date of the enactment of the Tobacco Reduction,
Accountability, and Community Enhancement Act of 2003).
``(2) Effect of purchase contract.--If there was an
agreement for the purchase of all or part of a farm described
in paragraph (1) as of July 1, 2002, and the parties to the
sale are unable to agree to the disposition of eligibility for
payments under this section, the Secretary, taking into account
any transfer of quota that has been agreed to, shall provide
for the equitable division of the payments among the parties by
adjusting the determination of who is the tobacco quota holder
with respect to particular pounds of the quota.
``(3) Effect of agreement for permanent quota transfer.--If
the Secretary determines that there was in existence, as of
July 1, 2002, an agreement for the permanent transfer of quota,
but that the transfer was not completed by that date, the
Secretary shall consider the tobacco quota holder to be the
party to the agreement that, as of that date, was the owner of
the farm to which the quota was to be transferred.
``(4) Protected bases.--A person that owns a farm with a
tobacco poundage quota that is protected under a conservation
reserve program contract entered into under section 1231 of the
Food Security Act of 1985 (16 U.S.C. 3831) shall be considered
to be a tobacco quota holder with respect to the protected
poundage.
``(5) Secretarial discretion.--Notwithstanding paragraphs
(1) through (4), the Secretary may declare a person to be the
tobacco quota holder with respect to certain pounds of quota or
otherwise for purposes of this section if the Secretary--
``(A) considers the declaration is needed to ensure
a fair and equitable administration of the payments
provided for in this section, including such actions as
are necessary to prevent payments based on speculation;
and
``(B) does not, in exercising the authority
provided under this paragraph, effectively increase the
total quota in excess of the quota that was available
to all producers for the 2002 marketing year for other
than seed or experimental use.
``(6) Limitation on quantity of quota held.--
``(A) In general.--A person shall be considered a
tobacco quota holder for purposes of this section only
with respect to the quantity of basic quota that
qualifies the person as a tobacco quota holder.
``(B) Included quota.--The determination of the
tobacco poundage amount for which the person qualifies
shall--
``(i) be made based on the 2002 crop quota
levels; and
``(ii) take into account sales of the farm
that occurred before July 1, 2002, and any
permanent transfers of quota that took place
before that date.
``(c) Application.--To be eligible to receive payments under this
section, a person shall prepare and submit to the Secretary an
application at such time, in such manner, and containing such
information as the Secretary may require, including information
sufficient to demonstrate that the person satisfies the definition of
tobacco quota holder.
``(d) Total Amount Available for Payments.--
``(1) In general.--The Secretary shall determine the total
amount to be paid to all tobacco quota holders under this
section with respect to each kind of tobacco.
``(2) Poundage quota tobacco.--For each kind of tobacco for
which the marketing quota is expressed in pounds, the total
amount available for payments to tobacco quota holders under
this section shall be equal to the product obtained by
multiplying--
``(A) $8 per pound; by
``(B) the annual average of tobacco farm basic
quotas established under this Act for the 1997 through
2002 marketing years for that kind of tobacco.
``(3) Marketing quotas other than poundage quotas.--For
each kind of tobacco for which there is a marketing quota or
allotment on an acreage basis, the Secretary shall convert the
tobacco farm marketing quotas or allotments established under
this Act for the 1997 through 2002 marketing year for that kind
of tobacco to a poundage basis before executing the
mathematical equation specified in paragraph (2).
``(e) Base Quota Level.--
``(1) In general.--The Secretary shall determine the base
quota level of each tobacco quota holder with respect to each
kind of tobacco.
``(2) Poundage quota tobacco.--For each kind of tobacco for
which the marketing quota is expressed in pounds, the base
quota level for a tobacco quota holder shall be equal to the
tobacco farm marketing quota established under this Act for the
2002 marketing year for quota tobacco on the farm owned by the
tobacco quota holder.
``(3) Marketing quotas other than poundage quotas.--For
each kind of tobacco for which there is a marketing quota or
allotment on an acreage basis, the base quota level for a
tobacco quota holder shall be equal to the product obtained
(based on a poundage conversion) by multiplying--
``(A) the tobacco farm marketing quota or allotment
established under this Act for the 2002 marketing year
for the tobacco quota holder's farm; by
``(B) the average yield per acre for the tobacco
quota holder's farm for the kind of tobacco for that
marketing year.
``(f) Payment Amount.--The Secretary shall make payments to a
tobacco quota holder with respect to a kind of tobacco under this
section in a total amount that bears the same ratio to the amount
determined by the Secretary under subsection (d) with respect to that
kind of tobacco as the base quota level of the tobacco quota holder
with respect to that kind of tobacco bears to the base quota level of
all tobacco quota holders with respect to that kind of tobacco.
``(g) Time for Payment.--The amount determined under subsection (f)
for a tobacco quota holder shall be paid in seven equal installments on
November 1 of each of the calendar years 2004 through 2010, except that
50 percent of the payment required to be made on November 1, 2004,
shall be paid on September 30, 2004.
``(h) Death of Tobacco Quota Holder.--If a tobacco quota holder who
is entitled to payments under this section dies and is survived by a
spouse or one or more dependents, the right to receive the payments
shall transfer to the surviving spouse or, if there is no surviving
spouse, to the estate of the tobacco quota holder.
``SEC. 380C. DIRECT PAYMENTS TO TRADITIONAL PRODUCERS OF TOBACCO.
``(a) In General.--The Secretary shall make direct payments under
this section to traditional producers of tobacco.
``(b) Application.--To be eligible to receive payments under this
section, a person shall prepare and submit to the Secretary an
application at such time, in such manner, and containing such
information as the Secretary may require, including information
sufficient to demonstrate that the person satisfies the definition of
traditional producer of tobacco.
``(c) Total Amount Available for Payments.--
``(1) In general.--The Secretary shall determine the total
amount to be paid to traditional producers of tobacco under
this section with respect to each kind of tobacco.
``(2) Poundage quota tobacco.--For each kind of tobacco for
which the marketing quota is expressed in pounds, the total
amount available for payments to traditional producers of
tobacco under this section shall be equal to the product
obtained by multiplying--
``(A) $4 per pound; by
``(B) the annual average of tobacco farm effective
quotas established under this Act for the 1997 through
2002 marketing years for that kind of tobacco.
``(3) Marketing quotas other than poundage quotas.--For
each kind of tobacco for which there is a marketing quota or
allotment on an acreage basis, the Secretary shall convert the
tobacco farm marketing quotas or allotments established under
this Act for the 1997 through 2002 marketing years for that
kind of tobacco to a poundage basis before executing the
mathematical equation specified in paragraph (2).
``(d) Payment Quantity.--
``(1) In general.--The Secretary shall determine the
payment quantity of tobacco for each traditional producer of
tobacco with respect to each kind of tobacco.
``(2) Poundage quota tobacco.--For each kind of tobacco for
which the marketing quota is expressed in pounds, the payment
quantity for a traditional producer of tobacco shall be equal
to the average of the July 1 effective quota for that quota
tobacco produced by the producer under this Act for the 2000,
2001 and 2002 marketing years.
``(3) Marketing quotas other than poundage quotas.--For
each kind of tobacco for which there is a marketing quota or
allotment on an acreage basis, the payment quantity for a
traditional producer of tobacco shall be equal to the average
of the actual pounds of that kind of tobacco produced by the
traditional producer of tobacco for the 2000, 2001 and 2002
marketing years.
``(e) Payment Amount.--The Secretary shall make payments to each
traditional producer of tobacco with respect to a kind of tobacco under
this section in a total amount that bears the same ratio to the amount
determined by the Secretary under subsection (c) with respect to that
kind of tobacco as the payment quantity of the producer with respect to
that kind of tobacco bears to the payment quantities of all traditional
producers of tobacco with respect to that kind of tobacco.
``(f) Time for Payment.--The amount determined under subsection (e)
for a traditional producer of tobacco shall be paid in seven equal
installments on November 1 of each of the calendar years 2004 through
2010, except that 50 percent of the payment required to be made on
November 1, 2004, shall be paid on September 30, 2004.
``(g) Death of Active Tobacco Producer.--If a traditional producer
of tobacco who is entitled to transition payments under this section
dies and is survived by a spouse or one or more dependents, the right
to receive the payments shall transfer to the surviving spouse or, if
there is no surviving spouse, to the estate of the producer.
``SEC. 380D. ADMINISTRATION.
``(a) Resolution of Disputes.--
``(1) In general.--Any dispute regarding the eligibility of
a person to receive a payment under this subtitle, or the
amount of the payment, may be appealed to the county committee
established under section 8 of the Soil Conservation and
Domestic Allotment Act (16 U.S.C. 590h) for the county or other
area in which the farming operation of the person is located.
``(2) National appeals division.--Any adverse determination
of a county committee under subsection (a) may be appealed to
the National Appeals Division established under subtitle H of
the Department of Agriculture Reorganization Act of 1994 (7
U.S.C. 6991 et seq.).
``(b) Use of Qualified Financial Institutions.--The Secretary may
use qualified financial institutions to manage assets, make payments,
and otherwise carry out this subtitle.
``CHAPTER 2--TOBACCO QUALITY AND QUANTITY
``SEC. 380G. TOBACCO ADVISORY BOARDS.
``(a) Establishment.--The Secretary shall establish in the
Department a permanent advisory board for each kind of tobacco, to be
known as a `Tobacco Advisory Board'.
``(b) Membership.--
``(1) Number.--Each Tobacco Advisory Board shall have 11
members.
``(2) Composition.--The Board for a kind of tobacco shall
consist of the following:
``(A) 5 members appointed by the Secretary from
nominations submitted by representatives of active
tobacco producers in the United States of that kind of
tobacco.
``(B) 5 members appointed by the Secretary from
nominations submitted by representatives of tobacco
product manufacturers in the United States that
purchase that type of tobacco, including at least 1
representative of export dealers of tobacco or tobacco
products appointed from nominations submitted by export
dealers.
``(C) An officer or employee of the Department
appointed by the Secretary.
``(3) Allocation of producer membership.--In appointing
members to the Tobacco Advisory Board for a kind of tobacco
under paragraph (2)(A), the number of members appointed by the
Secretary to represent active tobacco producers of that kind of
tobacco in a particular State shall, to the maximum extent
practicable, bear the same ratio to the total number of members
of the Board as--
``(A) the total volume of domestic sales of the
kind of tobacco produced in the State during the most
recent period for which data is available; bears to
``(B) the total volume of domestic sales of the
kind of tobacco produced in all States during the most
recent period for which data is available.
``(c) Chairperson.--The Secretary shall appoint the chairperson of
each Tobacco Advisory Board, with a different member serving as
chairperson of a Board every 2 years.
``(d) Terms.--Members of a Tobacco Advisory Board shall serve for
2-year terms, except that the terms of the members first appointed to
the Boards shall be staggered so as to establish a rotating membership
of the Boards, as determined by the Secretary.
``SEC. 380H. DUTIES AND ADMINISTRATION OF TOBACCO ADVISORY BOARDS.
``(a) Duties.--The Tobacco Advisory Board for a kind of tobacco
shall--
``(1) determine and describe the physical characteristics
of that kind of tobacco produced in the United States and
unmanufactured tobacco of that kind imported into the United
States;
``(2) assemble and evaluate, in a systematic manner,
concerns and problems with the quality of that kind of tobacco
produced in the United States, expressed by domestic and
foreign buyers and manufacturers of tobacco products;
``(3) review data collected by Federal agencies on the
physical and chemical integrity of that kind of tobacco
produced in the United States and unmanufactured tobacco
imported into the United States, to ensure that tobacco being
used in domestically-manufactured tobacco products is of the
highest quality and is free from prohibited physical and
chemical agents;
``(4) not later than a date determined by the Secretary,
make recommendations to the Secretary on the base year, for the
maximum crop poundage base under section 380I(f) for each crop
of that kind of tobacco;
``(5) establish a registration system to monitor the
production of that kind of tobacco;
``(6) investigate and communicate to the Secretary--
``(A) conditions with respect to the production of
that kind of tobacco that discourage improvements in
the quality of tobacco produced in the United States;
and
``(B) recommendations for regulatory changes that
would address tobacco quality issues affecting that
kind of tobacco;
``(7) conduct oversight regarding tobacco marketing issues
(such as opening sales dates and marketing regulations)
affecting that kind of tobacco and applicable to auction
markets;
``(8) provide assistance to Federal agencies on actions
taken by the Federal agencies that affect the quality or
quantity of that kind of tobacco produced in the United States;
and
``(9) carry out such other related activities as are
assigned to the Board by the Secretary.
``(b) Administration.--The Secretary shall provide the Tobacco
Advisory Boards with (as determined by the Secretary)--
``(1) a staff that is--
``(A) experienced in the sampling and analysis of
unmanufactured tobacco; and
``(B) capable of collecting data and monitoring
tobacco production information; and
``(2) other resources and information necessary for the
Boards to perform their duties, including information
concerning acreage devoted to the production of each kind of
tobacco.
``(c) Applicability of Federal Advisory Committee Act.--The Federal
Advisory Committee Act (5 U.S.C. App.) shall not apply to the Tobacco
Advisory Boards.
``SEC. 380I. TOBACCO POUNDAGE LIMITATION PROGRAM.
``(a) Definitions.--In this section:
``(1) Crop poundage base.--The term `crop poundage base'
means the crop poundage base for a kind of tobacco for a crop
for an active tobacco producer, as determined by the Secretary
under subsection (e).
``(2) Permitted poundage.--The term `permitted poundage'
means the number of pounds of a kind of tobacco authorized to
be produced by an active tobacco producer, consistent with the
annual poundage limitation program announced by the Secretary
for the kind of tobacco.
``(b) Establishment and Maintenance.--
``(1) In general.--The Secretary shall establish and may
maintain a poundage limitation program for each crop of each
kind of tobacco.
``(2) Supply.--In determining whether to maintain the
poundage limitation program for a crop of a kind of tobacco,
the Secretary shall determine whether the total supply of that
kind of tobacco, in the absence of limitations, will be
excessive, taking into account the need for an adequate carry-
over to maintain reasonable and stable supplies and prices.
``(3) Announcement.--
``(A) In general.--The Secretary shall announce the
annual poundage limitation program for a kind of
tobacco as soon as practicable preceding the year in
which the crop is harvested.
``(B) Special rule for 2004 crop.--In the case of
the 2004 crop for a kind of tobacco, the Secretary
shall announce the poundage limitation program as soon
as practicable after the date of the enactment of the
Tobacco Reduction, Accountability, and Community
Enhancement Act of 2003.
``(4) Consultation.--The Secretary shall carry out this
subsection with regard to a kind of tobacco in consultation
with the Tobacco Advisory Board established for that kind of
tobacco.
``(c) Application of Limitation.--Under a poundage limitation
program for a kind of tobacco, the Secretary shall achieve the
limitation by applying a uniform percentage adjustment to the crop
poundage base for the kind of tobacco in each traditional tobacco
county for the crop for active tobacco producers that produce that kind
of tobacco in that county, as determined by the Secretary.
``(d) Compliance.--
``(1) Loans, purchases, or payments.--An active tobacco
producer that knowingly produces a kind of tobacco in excess of
the permitted poundage for the kind of tobacco, or violates any
lease or transfer requirements of this section, shall be
ineligible for any loans, purchases, or payments for the kind
of tobacco.
``(2) No carry over.--An active tobacco producer may not
carry over permitted poundage for a crop of a kind of tobacco,
which is not produced by the producer, for production in a
subsequent crop year.
``(3) Penalties.--
``(A) Criminal penalty.--A producer that violates
this subsection may be fined not more than $100,000 or
imprisoned not more than 2 years, or both.
``(B) Civil penalty.--In addition to any penalty
imposed under paragraph (1), the Secretary may assess
against a producer that violates this subsection a
civil penalty in an amount not to exceed 2 percent of
the value of the kind of tobacco produced by the
producer during the crop year in which the violation
occurred, as determined by the Secretary.
``(3) Jurisdiction to prevent and restrain violations.--A
United States district court shall have jurisdiction to prevent
and restrain a producer from producing a kind of tobacco in
excess of the permitted poundage for the kind of tobacco.
``(e) Determination of Crop Poundage Bases.--
``(1) 2004 crop year.--Subject to subsections (f) through
(i), the crop poundage base for an active tobacco producer for
the 2004 crop of each kind of tobacco shall equal the average
of the number of pounds of that kind of tobacco harvested by
the active tobacco producer in a traditional tobacco county and
marketed in each of the 5 crop years preceding the crop year,
as determined and adjusted by the Secretary.
``(2) Subsequent crop years.--Subject to subsections (f)
through (i), in the case of the 2005 and subsequent crops of
each kind of tobacco, the crop poundage base for an active
tobacco producer of a kind of tobacco shall equal the number of
pounds of that kind of tobacco harvested by the active tobacco
producer in a traditional tobacco county and marketed in the
preceding crop year, as determined and adjusted by the
Secretary.
``(3) Consultation.--The Secretary shall carry out this
subsection with regard to a kind of tobacco in consultation
with the Tobacco Advisory Board established for that kind of
tobacco.
``(f) Maximum Crop Poundage Bases.--
``(1) In general.--Subject to paragraph (2), the total
number of pounds devoted to a kind of tobacco by active tobacco
producers during a crop year shall not exceed the total number
of pounds devoted to the kind of tobacco by active tobacco
producers during a crop year determined by the Secretary.
``(2) Adjustment.--If the active tobacco producers of a
kind of tobacco demonstrate to the Secretary that the
application of paragraph (1) to a crop of a kind of tobacco
will result in unbalanced supply and demand conditions, the
Secretary may adjust the total number of pounds that may be
devoted to the kind of tobacco by active tobacco producers
during the crop year.
``(g) Sale, Lease, or Transfer of Crop Poundage Bases.--
``(1) Prohibition.--Except as provided in paragraph (2), an
active tobacco producer shall not directly or indirectly sell,
lease, or transfer to another person or other legal entity a
crop poundage base established for an active tobacco producer
under this section.
``(2) Exception.--If the crop poundage base of an active
tobacco producer for a type of tobacco covers tobacco that was
produced by the producer in more than one traditional tobacco
county, the producer may elect to consolidate the base in a
single traditional tobacco county in which the producer bore or
shared in the risk of producing a crop of that kind of tobacco
for the 2002 crop year.
``(h) Reallocation of Unused Crop Poundage Bases.--
``(1) County pool.--Subject to paragraphs (2), (3), and
(4), if an active tobacco producer with a crop poundage base
for a kind of tobacco elects not to use all or part of the crop
poundage base to continue to produce that kind of tobacco, the
unused crop poundage base shall be placed in a pool established
for the traditional tobacco county where the unused crop
poundage base was originally located for reallocation by the
Secretary to other active tobacco producers of that kind of
tobacco in the traditional tobacco county. The Secretary shall
distribute the unused crop poundage base among those producers
that request a portion of the unused crop poundage base
according to the percentage of previous year production, by
pound, of that kind of tobacco in that county.
``(2) State pool.--Subject to paragraph (4), if any crop
poundage base for a kind of tobacco remains after the crop
poundage base is made available to producers of that kind of
tobacco in the traditional tobacco county in a State under
paragraph (1), the unused crop poundage base shall be placed in
a pool established for the State for reallocation by the
Secretary to other producers of that kind of tobacco in
traditional tobacco counties. The Secretary shall distribute
the available unused crop poundage base among those producers
that request a portion of the unused crop poundage base
according to the percentage of previous year production, by
pound, of that kind of tobacco in the State.
``(3) Traditional growing area pool.--Subject to paragraph
(4), if any crop poundage base for a kind of tobacco remains
after the crop poundage base is made available to producers of
that kind of tobacco in the traditional tobacco county in a
State under paragraph (1), and remains after the crop poundage base is
made available to producers of that kind of tobacco in the State under
paragraph (2), the unused crop poundage base shall be placed in a pool
established for reallocation by the Secretary to other producers of
that kind of tobacco in a traditional tobacco county for that kind of
tobacco. The Secretary shall distribute the available unused crop
poundage base among those producers that request a portion of the
unused crop poundage base according to the percentage of previous year
production, by pound, of that kind of tobacco in that traditional
growing area.
``(4) New producers.--In reallocating unused crop poundage
bases for a kind of tobacco in a traditional tobacco county
made available under any of the preceding paragraphs, the
Secretary shall make available to any new producers of that
kind of tobacco in the traditional tobacco county up to 10
percent of the crop poundage bases available for reallocation
for the kind of tobacco in the traditional tobacco county.
``(5) Reallocation procedures.--The Secretary shall
establish procedures by which producers of a kind of tobacco,
including new producers under paragraph (4), may request the
reallocation unused crop poundage base available under this
subsection.
``(i) Compliance With Conservation and Agricultural Requirements.--
As a condition of the establishment of a crop poundage base for an
active tobacco producer for a crop of a kind of tobacco, the producer
shall agree, during the crop year for which the crop poundage base is
established--
``(1) to comply with applicable conservation requirements
under subtitle B of title XII of the Food Security Act of 1985
(16 U.S.C. 3811 et seq.);
``(2) to comply with applicable wetland protection
requirements under subtitle C of title XII of the Act (16
U.S.C. 3821 et seq.);
``(3) to use the land of the active tobacco producer, in a
quantity consistent with the crop poundage base, for an
agricultural or conserving use, and not for a nonagricultural
commercial or industrial use, as determined by the Secretary;
and
``(4) to effectively control noxious weeds and otherwise
maintain the land in accordance with sound agricultural
practices, as determined by the Secretary, if the agricultural
or conserving use involves the noncultivation of any portion of
the land referred to in paragraph (3).
``CHAPTER 3--TOBACCO MARKET STABILITY PROGRAM
``SEC. 380M. TOBACCO MARKET STABILITY PROGRAM.
``(a) In General.--If during any period of a marketing year, to be
established by the Secretary, the insured price for the crop of a kind
of tobacco exceeds the average domestic price for the crop of the kind
of tobacco, as determined by the Secretary, the Secretary shall make
available to active tobacco producers of that kind of tobacco market
stability payments for the marketing year in an amount obtained by
multiplying--
``(1) the payment rate for the crop (as determined under
subsection (b)); and
``(2) the permitted poundage for the active tobacco
producer (as determined under section 380I).
``(b) Payment Rate.--
``(1) In general.--Subject to paragraphs (2) and (3), the
payment rate for a crop of a kind of tobacco under this section
shall be the amount by which--
``(A) the insured price for the crop; exceeds
``(B) the domestic price for the crop.
``(2) Insured prices.--
``(A) In general.--Except as provided in
subparagraph (B), the insured price for each crop of a
kind of tobacco under this section shall be a price,
which is determined by the Secretary to be necessary to
provide market stability for that kind of tobacco and
for which private insurance may be obtained in
accordance with subsection (c) at a cost that does not
exceed (but may be less than) the assessment imposed
for that kind of tobacco pursuant to subsection (f).
``(B) Minimum price.--The insured price for each
crop of a kind of tobacco under this section shall not
be less than $1.00 per pound, unless the Secretary
determines that lower insured price is necessary.
``(3) Domestic prices.--The domestic price for the crop of
a kind of tobacco under this section shall be determined by the
Secretary.
``(c) Delivery Through Private Providers.--
``(1) In general.--The Secretary shall carry out this
section, to the maximum extent practicable, through contracts
with private insurance companies and other private entities
approved by the Secretary (referred to in this section as
`private providers').
``(2) Reimbursement.--The Secretary shall reimburse private
providers for administrative expenses incurred in carrying out
this section, as determined by the Secretary.
``(d) Delivery Through Local Department Offices.--If the Secretary
determines that there are an insufficient number of private providers
to carry out this section in all or part of a State, the Secretary
(acting through local offices of the Department) shall carry out this
section directly in all or part of the State.
``(e) Additional Coverage.--The Secretary may offer additional
coverage to active tobacco producers on a farm of a crop of a kind of
tobacco under this section under which a higher level of price coverage
is made available to the active tobacco producers on the farm, in
exchange for an additional premium paid by the active tobacco producers
on the farm.
``(f) Assessment.--
``(1) In general.--Effective for each marketing year for a
kind of tobacco for which tobacco market stability payments are
made available under this section, subject to paragraph (2),
each producer and purchaser of that kind of tobacco shall remit
to the Commodity Credit Corporation a marketing assessment in
an amount determined by the Secretary that is sufficient to provide the
payments for that kind of tobacco.
``(2) Limitation on assessment.--The Secretary shall not
impose or collect an assessment under this section for a
marketing year until and unless the Secretary determines that
the amounts made available under section 380S(c)(1)(C) to carry
out this section for that marketing year will be insufficient.
``(3) Amount.--Subject to paragraph (2), the amount of
producer and purchaser assessments for a kind of tobacco under
this subsection--
``(A) shall be determined in such a manner that
producers and purchasers share equally in paying
assessments required under this subsection; and
``(B) shall not exceed 5 cents per pound.
``(4) Collection.--The producer and purchaser assessments
shall be--
``(A) collected in the same manner as provided for
in section 106A(d)(2) or 106B(d)(3) of the Agricultural
Act of 1949 (7 U.S.C. 1445-1(d)(2), 1445-2(d)(3)) (as
in effect on the day before the date of the enactment
of the Tobacco Reduction, Accountability, and Community
Enhancement Act of 2003), as applicable; and
``(B) enforced in the same manner as provided in
section 106A(h) or 106B(j) of the Agricultural Act of
1949 (7 U.S.C. 1445-1(h), 1445-2(j)) (as in effect on
the day before the date of the enactment of the Tobacco
Reduction, Accountability, and Community Enhancement
Act of 2003), as applicable.
``(5) Use of qualified financial institutions.--The
Secretary may use qualified financial institutions to manage
assets, make collections, and otherwise carry out this
subsection.
``(6) Enforcement.--The Secretary may enforce this
subsection in the courts of the United States.
``(g) Consultation.--The Secretary shall make the determinations
required by this section with regard to a kind of tobacco in
consultation with the Tobacco Advisory Board established for that kind
of tobacco. After the Secretary announces the terms and conditions of
the tobacco market stability program for a crop year for a kind of
tobacco, the Secretary shall consult with the Tobacco Advisory Board
established for that kind of tobacco before making any change to the
program for the crop year.
``CHAPTER 4--COMPETITIVE GRANTS FOR TOBACCO RESEARCH
``SEC. 380Q. COMPETITIVE GRANTS FOR TOBACCO RESEARCH.
``(a) In General.--Notwithstanding any other provision of law, the
Secretary shall make competitive grants under section 406 of the
Agricultural Research, Extension, and Education Reform Act of 1998 (7
U.S.C. 7626) to colleges and universities located in eligible States to
conduct research--
``(1) to assist tobacco producers to diversify crops or
implement other means to reduce or eliminate the reliance of
the producers on the production of tobacco or to promote
alternative uses of tobacco or enhance the quality of tobacco
produced in the United States; and
``(2) to foster and facilitate development, evaluation, and
implementation of economically viable new agricultural
technologies and enterprises for rural communities.
``(b) Grant Distribution.--In making grants under this section, the
Secretary shall provide for an equitable distribution of the grants
based on the volume of each kind of tobacco that is produced in each
eligible State, as determined by the Secretary
``CHAPTER 5--FUNDING
``SEC. 380S. TOBACCO TRUST FUND.
``(a) Establishment.--There is established in the Commodity Credit
Corporation a revolving trust fund to be known as the `Tobacco Trust
Fund' and to be used in carrying out this subtitle. The Fund shall
consist of--
``(1) such amounts as are deposited in the Fund under
subsection (b);
``(2) such amounts as are necessary from the Commodity
Credit Corporation; and
``(3) any interest earned on investment of amounts in the
Fund under subsection (d).
``(b) Deposits.--Revenues from assessments collected under section
380T shall be deposited in the Fund.
``(c) Expenditures.--
``(1) In general.--Subject to paragraphs (2) and (3) and
notwithstanding any other provision of law, in addition to any
other funds that may be available, the Secretary may use from
the Fund such amounts as the Secretary determines are
necessary--
``(A) to make payments to tobacco quota holders and
traditional producers of tobacco under chapter 1;
``(B) to pay necessary expenses of the Tobacco
Advisory Boards and to carry out the poundage
limitation program under chapter 2;
``(C) to carry out the tobacco market stability
program under chapter 3, in an amount equal to
$50,000,000 for each of fiscal years 2005 through 2008;
``(D) to make competitive grants for tobacco
research under chapter 4, in an amount equal to
$12,000,000 for each of fiscal years 2005 through 2009;
``(E) to make grants to each association that has
entered into a loan agreement with the Commodity Credit
Corporation under section 106A or 106B of the
Agricultural Act of 1949 (7 U.S.C. 1445-1, 1445-2) (as
in effect on the day before the date of the enactment
of the Tobacco Reduction, Accountability, and Community
Enhancement Act of 2003) to assist the association to
transition to alternative methods of marketing tobacco
in accordance with a plan approved by the Secretary,
with the grants allocated on the basis of the
proportion of the kind of tobacco marketed by each
association, in an amount not to exceed $1,500,000 for
each kind of tobacco for each of fiscal years 2004
through 2008;
``(F) to make payments to appropriate tobacco
warehouse associations, as determined by the Secretary,
in an amount not to exceed $1,500,000 for each of
fiscal years 2004 through 2008; and
``(G) to pay administrative costs incurred by the
Secretary in carrying out this subtitle and reimburse
the Commodity Credit Corporation for costs incurred by
the Commodity Credit Corporation under paragraph (2).
``(2) Expenditures by commodity credit corporation.--
``(A) In general.--Subject to subparagraph (B) and
notwithstanding any other provision of law, the
Secretary may use funds of the Commodity Credit
Corporation to make payments under paragraph (1).
``(B) Reimbursement to commodity credit
corporation.--Not later than January 1, 2011, the
Commodity Credit Corporation shall be reimbursed in
full, with interest, for all funds of the Commodity
Credit Corporation expended under subparagraph (A).
``(3) Administrative expenses.--An amount not to exceed
$20,000,000 for each fiscal year of the amounts in the Fund
shall be available to pay the administrative expenses necessary
to carry out this subtitle.
``(d) Investment of Amounts.--
``(1) In general.--The Commodity Credit Corporation shall
invest such portion of the Fund as is not, in the judgment of
the Commodity Credit Corporation, required to meet current
withdrawals.
``(2) Interest-bearing obligations.--Investments may be
made only in interest-bearing obligations of the United States.
``(3) Acquisition of obligations.--For the purpose of
investments under paragraph (1), obligations may be acquired--
``(A) on original issue at the issue price; or
``(B) by purchase of outstanding obligations at the
market price.
``(4) Sale of obligations.--Any obligation acquired by the
Fund may be sold by the Commodity Credit Corporation at the
market price.
``(5) Credits to fund.--The interest on, and the proceeds
from the sale or redemption of, any obligations held in the
Fund shall be credited to and form a part of the Fund.
``(e) Administration.--In administering the Fund, the Secretary
shall make payments, reimburse agencies of the Department, and accept
deposits without regard to limitations on total amounts of allotments
and fund transfers under section 11 of the Commodity Credit Corporation
Charter Act (15 U.S.C. 714i).
``(f) Use of Qualified Financial Institutions.--The Secretary may
use qualified financial institutions to manage assets, make payments,
and otherwise carry out this subtitle.
``SEC. 380T. ASSESSMENTS.
``(a) In General.--The Secretary, acting through the Commodity
Credit Corporation, shall impose quarterly assessments, calculated in
accordance with this section, on each tobacco product manufacturer and
tobacco product importer that sells tobacco products in domestic
commerce in the United States.
``(b) Tobacco Trust Fund.--Assessments collected under this section
shall be deposited in the Tobacco Trust Fund.
``(c) Assessment for Each Class of Tobacco Product.--
``(1) Allocation by class of tobacco products.--The
percentage of the total amount to be assessed against, and paid
by, the manufacturers and importers of each class of tobacco
product in each applicable fiscal year shall be--
``(A) for cigarette manufacturers and importers,
98.303 percent;
``(B) for snuff manufacturers and importers, 0.428
percent;
``(C) for chewing tobacco manufacturers and
importers, 0.098 percent;
``(D) for manufacturers and importers of small
cigars, 0.011 percent;
``(E) for manufacturers and importers of large
cigars, 1.095 percent;
``(F) for pipe tobacco manufacturers and importers,
0.021 percent; and
``(G) for roll-your-own tobacco manufacturers and
importers, 0.044 percent.
``(2) Adjustment.--The Secretary shall adjust the
percentage of the total amount to be assessed against, as
determined by paragraph (1), and paid by, the manufacturers and
importers of each class of tobacco product in each applicable
fiscal year by multiplying the percentage of the total amount to be
assessed, as determined by such paragraph, by a fraction--
``(A) the numerator of which is the total volume of
domestic sales of that class of tobacco product during
the preceding applicable fiscal year; and
``(B) the denominator of which is the total volume
of domestic sales of that class of tobacco product
during the fiscal year ending September 30, 2003.
``(3) Total assessment.--The total amount to be assessed
against all manufacturers and importers of all classes of
tobacco product in each applicable fiscal year shall be equal
to the amount required to carry out this subtitle during the
applicable fiscal year, as determined by the Secretary. If the
amount to be assessed after the application of paragraphs (1)
and (2) is insufficient to carry out this subtitle during the
applicable fiscal year, the Secretary may assess such
additional amount as the Secretary determines to be necessary
to carry out this subtitle during the applicable fiscal year.
Such additional amount shall be allocated to the manufacturers
and importers of each class of tobacco product in the same
manner and based on the same percentages applied in determining
the total amount to be assessed under paragraph (1), as
adjusted by paragraph (2) during the applicable fiscal year.
``(4) Notification of assessments.--The Secretary shall
notify all manufacturers and importers of tobacco products of
the amount of the assessment for each quarterly payment period.
The notice for a quarterly payment period shall refer gross
domestic sales and market shares for the quarterly payment
period and conform with the requirements of subsection (h).
``(5) Timing of assessment payments.--
``(A) In general.--Assessments shall be collected
at the end of each calendar year quarter, and the
assessment for a calendar year quarter shall correspond
to the base period quarter that ended at the end of the
preceding calendar year quarter. The payments over four
calendar quarters, beginning with the calendar quarter
ending on December 31 of each applicable fiscal year,
shall be sufficient to cover the payments required
under chapter 1 on November 1 of that same applicable
fiscal year and other expenditures of the Tobacco Trust
Fund required by section 380S during the base quarter
periods corresponding to those four calendar quarters.
``(B) Special rule.--In the case of the chapter 1
payments required to be made on September 30, 2004, the
assessments shall be paid on that same date and
correspond to the first base period of six months.
``(d) Allocation of Assessment Within Each Class of Tobacco
Product.--
``(1) Allocation.--The assessment for each class of tobacco
product shall be allocated on a pro rata basis among
manufacturers and importers based on each manufacturer's or
importer's share of gross domestic volume. No manufacturer or
importer shall be required to pay an assessment in excess of
the manufacturer's or importer's share of domestic volume.
``(2) Gross domestic volume defined.--In this section, the
term `gross domestic volume' means the volume of tobacco
products removed, as defined by section 5702(k) of the Internal
Revenue Code of 1986, and not exempt from tax under chapter 52
of the Internal Revenue Code at the time of their removal under
such chapter or the Harmonized Tariff Schedule of the United
States (19 U.S.C. 1202).
``(e) Allocation of Total Assessments by Market Share.--The amount
of the assessment for each class of tobacco product to be paid by each
manufacturer or importer of the class of tobacco product under
subsection (a) shall be determined for each quarterly payment period by
multiplying--
``(1) the market share of the manufacturer or importer, as
calculated with respect to that payment period, of the class of
tobacco product; by
``(2) the total amount of the assessment for that quarterly
payment period under subsection (c), for the class of tobacco
product.
``(f) Determination of Volume of Domestic Sales.--
``(1) In general.--The calculation of the volume of
domestic sales of a class of tobacco product by a manufacturer
or importer, and by all manufacturers and importers as a group,
shall be made by the Secretary based on information provided by
the manufacturers and importers pursuant to subsection (g), as
well as any other relevant information provided to or obtained
by the Secretary. The volume of domestic sales shall be
calculated based on gross domestic volume.
``(2) Measurement.--For purposes of the calculations under
this subsection and the certifications under subsection (g) by
the Secretary, the volumes of domestic sales shall be measured
by--
``(A) in the case of cigarettes, the numbers of
cigarettes;
``(B) in the case of small cigars, the number of
cigars weighing not more than three pounds per
thousand;
``(C) in the case of large cigars, the number of
cigars weighing more than three pounds per thousand;
and
``(D) in the case of other classes of tobacco
products, in terms of number of pounds, or fraction
thereof, of these products.
``(g) Measurement of Volume of Domestic Sales.--
``(1) In general.--Each manufacturer and importer of
tobacco products shall submit to the Secretary a certified copy
of each of the returns or forms described by this paragraph
that are required to be filed with a Government agency on the
same date that those returns or forms are filed, or required to
be filed, with such agency. The returns and forms described by
this paragraph are those returns and forms related to the
release of tobacco products into domestic commerce, as defined
by section 5702(k) of the Internal Revenue Code of 1986 and the
payment of the taxes imposed under charter 52 of the Internal
Revenue Code of 1986, including AFT Form 5000.24 and United
States Customs Form 7501 under currently applicable
regulations.
``(2) Penalties.--Any person that knowingly fails to
provide information required under this subsection or that
provides false information under this subsection shall be
subject to the penalties described in section 1003 of title 18,
United States Code. In addition, the Secretary may assess
against the person a civil penalty in an amount not to exceed 2
percent of the value of the kind of tobacco products
manufactured or imported by such person during the applicable
fiscal year, as determined by the Secretary.
``(h) Assessment Notification; Content.--The Secretary shall
provide each manufacturer or importer subject to an assessment under
subsection (a) with written notice setting forth the amount to be
assessed against such manufacturer or importer for the applicable
quarterly period. The notice for a quarterly period shall be provided
not later than 30 days before the date payment is due under subsection
(c)(5). The notice shall include the following information with respect
to such quarterly period used by the Secretary in calculating such
amount:
``(1) The total combined assessment for all manufacturers
and importers of tobacco products.
``(2) The total assessment with respect to the class of
tobacco products manufactured or imported by such manufacturer
or importer.
``(3) Any adjustments to the percentage allocations among
the classes of tobacco products made pursuant to subsection
(c)(2).
``(4) The volume of gross sales of the applicable class of
tobacco product treated as made by such manufacturer or
importer for purposes of calculating such manufacturer's or
importer's market share under subsection (e).
``(5) The total volume of gross sales of the applicable
class of tobacco product that the Secretary treated as made by
all manufacturers and importers for purposes of calculating
such manufacturer's or importer's market share under subsection
(e).
``(6) Such manufacturer's or importer's market share of the
applicable class of tobacco product as determined by the
Secretary under subsection (e).
``(7) The market share, as determined by the Secretary
under subsection (e), of each other manufacturer and importer,
for each applicable class of tobacco product.
``(i) Challenge to Assessment.--
``(1) Appeal to secretary.--A manufacturer or importer
subject to this section may contest an assessment imposed on
such person pursuant to this section by notifying the Secretary
within 10 business days after receiving the assessment
notification required by subsection (h). Such manufacturer and
importer may place into escrow, in accordance with rules
promulgated by the Secretary, only the portion of the
assessment being challenged in good faith pending final
determination of the assessment under this subsection.
``(2) Procedure for appeal.--The Secretary shall by
regulation establish a procedure whereby a person contesting an
assessment pursuant to this subsection may present information
to the Secretary to demonstrate that such assessment is
incorrect, including information to demonstrate the following:
``(A) The total combined assessment imposed by the
Secretary on all manufacturers and importers is
excessive.
``(B) The Secretary's allocation of the total
assessment among the classes of tobacco products is
incorrect.
``(C) The total volume of gross domestic sales of
all manufacturers and importers of the relevant class
of tobacco product calculated by the Secretary under
subsection (e) is incorrect.
``(D) The level of gross domestic sales attributed
to such person by the Secretary for purposes of
calculating such person's market share under subsection
(e) exceeds such person's actual domestic sales of such
class of tobacco product.
``(E) The amount of the assessment attributed to
such person by the Secretary exceeds such person's pro
rata share based on such person's share of gross
domestic sales.
``(3) Challenge.--In challenging an assessment under this
subsection, the manufacturer or importer may use any
information that is available, including third party data on
industry or individual company sales volumes. Such information
may constitute evidence sufficient to establish that the
Secretary's initial determination was incorrect, in which event
the assessment shall be revised so that the manufacturer or
importer is required only to pay the amount correctly
determined.
``(4) Time for review.--Within 30 days after receiving
notice from a manufacturer or importer under paragraph (2), the
Secretary shall decide whether the information provided to the
Secretary pursuant to such paragraph and any other information
which the Secretary determines is appropriate is sufficient to
establish that the original assessment was incorrect, and shall
make any revisions necessary to ensure that each manufacturer
and importer pays only its correct pro rata share of total
gross domestic volume from all sources.
``(5) Immediate payment of undisputed amounts.--The
regulations promulgated by the Secretary under paragraph (2)
shall provide for the immediate payment by a manufacturer or
importer challenging an assessment of such portion of the
assessment that is not in dispute.
``(6) Judicial review.--Any manufacturer or importer
aggrieved by a determination of the Secretary with respect to
the amount of any assessment may seek review of such
determination in the United States District Court for the
District of Columbia or for the district in which the
manufacturer or importer resides or has its principal place of
business at any time following exhaustion of the administrative
remedies under this subsection. Administrative remedies shall
be deemed exhausted if no decision by the Secretary is made
within the time limits under paragraph (4). The court shall
restrain collection of the excessive portion of any assessment
or order a refund of excessive assessments already paid, along
with interest calculated at the rate prescribed in section 3717
of title 31, United States Code, if it finds that the
Secretary's determination is not supported by a preponderance
of the information available to the Secretary.
``(7) Regulations.--The Secretary shall issue regulations
to implement this subsection within 6 months after the date of
the enactment of this Act.
``(j) Termination Date.--The authority provided by this section
terminates on September 30, 2011.
``SEC. 380U. COMMODITY CREDIT CORPORATION.
The Secretary shall use the funds, facilities, and authorities of
the Commodity Credit Corporation to carry out this subtitle, to remain
available until expended.
``SEC. 380V. TRANSITION PROVISIONS.
``(a) Tobacco Stocks.--
``(1) In general.--To provide for the orderly disposition
of quota tobacco held by an association that has entered into a
loan agreement with the Commodity Credit Corporation under
section 106A or 106B of the Agricultural Act of 1949 (7 U.S.C.
1445-1, 1445-2) (referred to in this section as an
`association'), loan pool stocks for each kind of tobacco held
by the association shall be disposed of in accordance with this
subsection.
``(2) Associations.--For each kind of tobacco held by an
association, the proportion of loan pool stocks for each kind
of tobacco held by the association that shall be transferred to
the association shall be equal to--
``(A) the amount of funds held by the association
in the No Net Cost Tobacco Fund and the No Net Cost
Tobacco Account established under sections 106A and
106B of the Agricultural Act of 1949 (7 U.S.C. 1445-1,
1445-2), respectively, for the kind of tobacco; divided
by
``(B) the average list price per pound for the kind
of tobacco, as determined by the Secretary.
``(3) Commodity credit corporation.--Any loan pool stocks
of a kind of tobacco of an association that are not disposed of
in accordance with paragraph (2) shall be--
``(A) transferred by the association to the
Commodity Credit Corporation;
``(B) disposed of in a manner determined by the
Secretary; and
``(C) should any loss be incurred by the disposals
described in subparagraph (B), these losses shall first
be paid by the association for that kind of tobacco to
the extent of the revenue received from the sale of
tobacco transferred to the association pursuant to
paragraph (2).
``(b) No Net Cost Funds.--
``(1) In general.--Any funds in the No Net Cost Tobacco
Fund or the No Net Cost Tobacco Account of an association
established under sections 106A and 106B of the Agricultural
Act of 1949 (7 U.S.C. 1445-1, 1445-2), respectively, that
remain after the application of subsection (a) and sections
106A and 106B of the Agricultural Act of 1949 (7 U.S.C. 1445,
1445-1) (as in effect on the day before the date of the
enactment of the Tobacco Reduction, Accountability, and
Community Enhancement Act of 2003) shall be transferred to the
association for distribution to members of the association in
accordance with a plan approved by the Secretary.
``(2) Associations with no loan pool stocks.--In the case
of an association that does not hold any loan pool stocks that
are covered by subsection (a)(2), any funds in the No Net Cost
Tobacco Fund or the No Net Cost Tobacco Account of the
association established under sections 106A and 106B of the
Agricultural Act of 1949 (7 U.S.C. 1445-1, 1445-2),
respectively, shall be transferred to the association for
distribution to members of the association in accordance with a
plan approved by the Secretary.''.
(b) Conforming Amendments.--Section 320B(c)(1) of the Agricultural
Adjustment Act of 1938 (7 U.S.C. 1314h(c)(1)) is amended--
(1) by inserting ``(A)'' after ``(1)'';
(2) by striking ``by'' at the end and inserting ``or''; and
(3) by adding at the end the following:
``(B) in the case of the 2003 marketing year, the price
support rate for the kind of tobacco involved in effect under
section 106 of the Agricultural Act of 1949 (7 U.S.C. 1445) at
the time of the violation; by''.
SEC. 6. REGULATIONS.
(a) In General.--In accordance with the notice and comment
provisions of section 533 of title 5, United States Code, the Secretary
of Agriculture may promulgate such regulations as are necessary to
implement this Act and the amendments made by this Act.
(b) Procedure.--The promulgation of the regulations and
administration of this Act and the amendments made by this Act shall be
made without regard to chapter 35 of title 44, United States Code
(commonly known as the ``Paperwork Reduction Act'').
(c) Congressional Review of Agency Rulemaking.--In carrying out
this section, the Secretary shall use the authority provided under
section 808 of title 5, United States Code.
SEC. 7. SEVERABILITY.
If any provision of this Act or the application of any provision of
this Act to any person or circumstance is held to invalid, the
remainder of this Act and the application of the provisions of the Act
to any other person or circumstance shall not be affected thereby and
shall continue to be enforced to the fullest extent possible.
SEC. 8. EFFECTIVE DATE.
This Act and the amendments made by this Act shall apply to the
2004 and subsequent crops of each kind of tobacco.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Agriculture.
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