Tobacco Market Transition 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 advisory board, the Tobacco Quality Board; (2) a permanent advisory board for each kind of tobacco, a Production Board; and (3) an acreage limitation program for each crop of each kind of tobacco.
Directs the Secretary, during any consecutive 4-week period of a marketing year in which the world 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 grants: (1) to eligible States for the Federal share of carrying out economic development initiatives in impacted counties (counties in which tobacco producers have sustained a reduction in gross receipts from the sale of tobacco for a base period); and (2) to colleges and universities in eligible States to conduct research to assist tobacco producers to diversify so as to reduce or eliminate reliance on tobacco production (or to promote alternative uses of tobacco or enhance the quality of tobacco produced), and to foster development of economically viable new agricultural technologies and enterprises for rural communities.
Establishes in the Commodity Credit Corporation a revolving trust fund to carry out this subtitle. Deposits into the Fund an annual 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]
[S. 1490 Introduced in Senate (IS)]
108th CONGRESS
1st Session
S. 1490
To eliminate the Federal quota and price support programs for tobacco,
to provide assistance to quota holders, tobacco producers, and tobacco-
dependent communities, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
July 30 (legislative day, July 21), 2003
Mr. McConnell (for himself, Mrs. Dole, Mr. Bunning, Mr. Hollings, Mr.
Edwards, Mr. Miller, Mr. Frist, Mr. Warner, Mr. Allen, Mr. Chambliss,
Mr. Graham of South Carolina, Mr. Alexander, and Mr. Bayh) introduced
the following bill; which was read the first time
_______________________________________________________________________
A BILL
To eliminate the Federal quota and price support programs for tobacco,
to provide assistance to quota holders, tobacco producers, and tobacco-
dependent communities, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Tobacco Market
Transition Act of 2003''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--TERMINATION OF CURRENT TOBACCO PROGRAMS
Sec. 101. Termination of tobacco production adjustment programs.
Sec. 102. Termination of tobacco price support program.
Sec. 103. Liability.
TITLE II--TOBACCO ASSISTANCE
Sec. 201. Tobacco assistance.
``Subtitle E--Tobacco Assistance
``Sec. 380A. Definitions.
``Chapter 1--Payments To Tobacco Quota Holders and Traditional
Producers
``Sec. 380B. Transition payments to tobacco quota holders.
``Sec. 380C. Direct payments to traditional producers of
tobacco.
``Sec. 380D. Administration.
``Chapter 2--Tobacco Quality and Quantity
``Sec. 380G. Tobacco Quality Board.
``Sec. 380H. Production Boards.
``Sec. 380I. Acreage limitation program.
``Chapter 3--Tobacco Market Stability Program
``Sec. 380M. Tobacco market stability program.
``Chapter 4--Tobacco Community Economic Development Grants
``Sec. 380O. Tobacco community economic development grants.
``Chapter 5--Competitive Grants for Tobacco Research
``Sec. 380Q. Competitive grants for tobacco research.
``Chapter 6--Funding
``Sec. 380S. Tobacco Trust Fund.
``Sec. 380T. Assessments.
``Sec. 380U. Commodity Credit Corporation.
``Sec. 380V. Transition provisions.
Sec. 202. Conforming amendments.
TITLE III--IMPLEMENTATION
Sec. 301. Regulations.
Sec. 302. Effective date.
TITLE I--TERMINATION OF CURRENT TOBACCO PROGRAMS
SEC. 101. TERMINATION OF TOBACCO PRODUCTION ADJUSTMENT PROGRAMS.
(a) Tobacco Statistics.--The Act of January 14, 1929 (45 Stat.
1079; 7 U.S.C. 501 et seq.) is repealed.
(b) Tobacco Standards.--The Tobacco Inspection Act (7 U.S.C. 511 et
seq.) is repealed.
(c) Tobacco Inspections.--Section 213 of the Tobacco Adjustment Act
of 1983 (7 U.S.C. 511r) is repealed.
(d) Tobacco Control.--The Act of April 25, 1936 (commonly known as
the Tobacco Control Act; 7 U.S.C. 515 et seq.), is repealed.
(e) Commodity Handling Orders.--Section 8c(2)(A) of the
Agricultural Adjustment Act (7 U.S.C. 608c(2)(A)), reenacted with
amendments by the Agricultural Marketing Agreement Act of 1937, is
amended by striking ``tobacco,''.
(f) Processing Tax.--Section 9(b) of the Agricultural Adjustment
Act (7 U.S.C. 609(b)), reenacted with amendments by the Agricultural
Marketing Agreement Act of 1937, is amended--
(1) in paragraph (2), by striking ``tobacco,''; and
(2) in paragraph (6)(B)(i), by striking ``, or, in the case
of tobacco, is less than the fair exchange value by not more
than 10 per centum,''.
(g) Burley Tobacco Import Review.--Section 3 of Public Law 98-59 (7
U.S.C. 625) is repealed.
(h) Declaration of Policy.--Section 2 of the Agricultural
Adjustment Act of 1938 (7 U.S.C. 1282) is amended by striking
``tobacco,''.
(i) Definitions.--Section 301(b) of the Agricultural Adjustment Act
of 1938 (7 U.S.C. 1301(b)) is amended--
(1) in paragraph (3)--
(A) by striking subparagraph (C); and
(B) by redesignating subparagraph (D) as
subparagraph (C);
(2) in paragraph (6)(A), by striking ``tobacco,'';
(3) in paragraph (10)--
(A) by striking subparagraph (B); and
(B) by redesignating subparagraph (C) as
subparagraph (B);
(4) in paragraph (11)(B), by striking ``and tobacco'';
(5) in paragraph (12), by striking ``tobacco,'';
(6) in paragraph (14)--
(A) in subparagraph (A), by striking ``(A)''; and
(B) by striking subparagraphs (B), (C), and (D);
(7) by striking paragraph (15);
(8) in paragraph (16)--
(A) by striking subparagraph (B); and
(B) by redesignating subparagraph (C) as
subparagraph (B);
(9) by striking paragraph (17); and
(10) by redesignating paragraph (16) as paragraph (15).
(j) Parity Payments.--Section 303 of the Agricultural Adjustment
Act of 1938 (7 U.S.C. 1303) is amended in the first sentence by
striking ``rice, or tobacco,'' and inserting ``or rice,''.
(k) Marketing Quotas.--Part I of subtitle B of title III of the
Agricultural Adjustment Act of 1938 (7 U.S.C. 1311 et seq.) is
repealed.
(l) Administrative Provisions.--Section 361 of the Agricultural
Adjustment Act of 1938 (7 U.S.C. 1361) is amended by striking
``tobacco,''.
(m) Adjustment of Quotas.--Section 371 of the Agricultural
Adjustment Act of 1938 (7 U.S.C. 1371) is amended--
(1) in the first sentence of subsection (a), by striking
``rice, or tobacco'' and inserting ``or rice''; and
(2) in the first sentence of subsection (b), by striking
``rice, or tobacco'' and inserting ``or rice''.
(n) Reports and Records.--Section 373 of the Agricultural
Adjustment Act of 1938 (7 U.S.C. 1373) is amended--
(1) by striking ``rice, or tobacco'' each place it appears
in subsections (a) and (b) and inserting ``or rice''; and
(2) in subsection (a)--
(A) in the first sentence, by striking ``all
persons engaged in the business of redrying, prizing,
or stemming tobacco for producers,''; and
(B) in the last sentence, by striking ``$500;'' and
all that follows through the period at the end of the
sentence and inserting ``$500.''.
(o) Regulations.--Section 375 of the Agricultural Adjustment Act of
1938 (7 U.S.C. 1375) is amended--
(1) in subsection (a), by striking ``peanuts, or tobacco''
and inserting ``or peanuts''; and
(2) by striking subsection (c).
(p) Eminent Domain.--Section 378 of the Agricultural Adjustment Act
of 1938 (7 U.S.C. 1378) is amended--
(1) in the first sentence of subsection (c), by striking
``cotton, and tobacco'' and inserting ``and cotton''; and
(2) by striking subsections (d), (e), and (f).
(q) Burley Tobacco Farm Reconstitution.--Section 379 of the
Agricultural Adjustment Act of 1938 (7 U.S.C. 1379) is amended--
(1) in subsection (a)--
(A) by striking ``(a)''; and
(B) in paragraph (6), by striking ``, but this
clause (6) shall not be applicable in the case of
burley tobacco''; and
(2) by striking subsections (b) and (c).
(r) Acreage-Poundage Quotas.--Section 4 of the Act of April 16,
1955 (Public Law 89-12; 7 U.S.C. 1314c note), is repealed.
(s) Burley Tobacco Acreage Allotments.--The Act of July 12, 1952 (7
U.S.C. 1315), is repealed.
(t) Transfer of Allotments.--Section 703 of the Food and
Agriculture Act of 1965 (7 U.S.C. 1316) is repealed.
(u) Advance Recourse Loans.--Section 13(a)(2)(B) of the Food
Security Improvements Act of 1986 (7 U.S.C. 1433c-1(a)(2)(B)) is
amended by striking ``tobacco and''.
(v) Tobacco Field Measurement.--Section 1112 of the Omnibus Budget
Reconciliation Act of 1987 (Public Law 100-203) is amended by striking
subsection (c).
SEC. 102. TERMINATION OF TOBACCO PRICE SUPPORT PROGRAM.
(a) Parity Price Support.--Section 101 of the Agricultural Act of
1949 (7 U.S.C. 1441) is amended--
(1) in the first sentence of subsection (a), by striking
``tobacco (except as otherwise provided herein), corn,'' and
inserting ``corn'';
(2) by striking subsections (c), (g), (h), and (i);
(3) in subsection (d)(3)--
(A) by striking ``, except tobacco,''; and
(B) by striking ``and no price support shall be
made available for any crop of tobacco for which
marketing quotas have been disapproved by producers;'';
and
(4) by redesignating subsections (d) and (e) as subsections
(c) and (d), respectively.
(b) Termination of Tobacco Price Support and No Net Cost
Provisions.--Sections 106, 106A, and 106B of the Agricultural Act of
1949 (7 U.S.C. 1445, 1445-1, 1445-2) are repealed.
(c) Definition of Basic Agricultural Commodity.--Section 408(c) of
the Agricultural Act of 1949 (7 U.S.C. 1428(c)) is amended by striking
``tobacco,''.
(d) Review of Burley Tobacco Imports.--Section 3 of Public Law 98-
59 (7 U.S.C. 625) is repealed.
(e) Powers of Commodity Credit Corporation.--Section 5 of the
Commodity Credit Corporation Charter Act (15 U.S.C. 714c) is amended by
inserting ``(other than tobacco)'' after ``agricultural commodities''
each place it appears.
SEC. 103. LIABILITY.
This title and the amendments made by this title shall not affect
the liability of any person under any provision of law with respect to
any crop of tobacco planted before the effective date prescribed in
section 402.
TITLE II--TOBACCO ASSISTANCE
SEC. 201. TOBACCO ASSISTANCE.
Title III of the Agricultural Adjustment Act of 1938 is amended by
inserting after subtitle D (7 U.S.C. 1379a et seq.) the following:
``Subtitle E--Tobacco Assistance
``SEC. 380A. DEFINITIONS.
``In this subtitle:
``(1) Active producer of tobacco.--The term `active
producer of tobacco' means a person that--
``(A) is actively engaged in the production of
tobacco marketed or considered planted; and
``(B) shares in the risk of producing the tobacco.
``(2) Applicable fiscal year.--The term `applicable fiscal
year' means each of fiscal years 2004 through 2009.
``(3) Base period.--The term `base period' means the 1-year
period ending the June 30 preceding each applicable fiscal
year.
``(4) Considered planted.--The term `considered planted'
means tobacco planted but failed to be produced as a result of
a natural disaster, as determined by the Secretary.
``(5) Department.--The term `Department' means the
Department of Agriculture.
``(6) Eligible state.--The term `eligible State' means each
of the States of Alabama, Arkansas, Florida, Georgia, Indiana,
Kansas, Kentucky, Minnesota, Missouri, North Carolina, Ohio,
Oklahoma, South Carolina, Tennessee, Virginia, West Virginia,
and Wisconsin.
``(7) Impacted county.--The term `impacted county' means a
county in an eligible State in which tobacco producers have
sustained a reduction in gross receipts from the sale of
tobacco for the base period for the applicable fiscal year, as
compared to the base period for fiscal year 2002.
``(8) Market share.--The term `market share' means the
share of each manufacturer or importer of a class of tobacco
product (expressed as a decimal to the fourth place) of the
total volume of domestic sales of the class of tobacco product
during the base period for the applicable fiscal year for an
assessment under section 380T.
``(9) Production board.--The term `Production Board' means
a Production Board established for a kind of tobacco under
section 380H.
``(10) Quota tobacco.--The term `quota tobacco' means a
kind of tobacco that is subject to a farm marketing quota or
farm acreage allotment for the 2002 tobacco marketing years
under a marketing quota or allotment program established under
part I of subtitle B (as in effect before the effective date of
this subtitle).
``(11) Tobacco.--The term `tobacco' means each of the
following kinds of tobacco:
``(A) Flue-cured tobacco, comprising types 11, 12,
13, and 14.
``(B) Fire-cured tobacco, comprising types 22 and
23.
``(C) Dark air-cured tobacco, comprising types 35
and 36.
``(D) Virginia sun-cured tobacco, comprising type
37.
``(E) Virginia fire-cured tobacco, comprising type
21.
``(F) Burley tobacco, comprising type 31.
``(G) Cigar-filler and cigar-binder tobacco,
comprising types 42, 43, 44, 53, 54, and 55.
``(12) Tobacco quality board.--The term `Tobacco Quality
Board' means the Tobacco Quality Board established under
section 380G.
``(13) Tobacco quota holder.--The term `tobacco quota
holder' means a person that is considered an tobacco quota
holder under section 380B(b).
``(14) Tobacco trust fund.--The term `Tobacco Trust Fund'
means the Tobacco Trust Fund established under section 380S.
``(15) Traditional producer of tobacco.--The term
`traditional producer of tobacco' means a person that, for at
least 1 of the 2000, 2001, or 2002 tobacco marketing years--
``(A) was actively engaged in the production of
tobacco marketed, or considered planted, under a
marketing quota established under part I of subtitle B
(as in effect before the effective date of this
subtitle); and
``(B) shared in the risk of producing the tobacco.
``(16) Traditional tobacco county.--
``(A) In general.--The term `traditional tobacco
county' means a county in the United States that had 1
or more farms operated by traditional producers of
tobacco under a marketing quota for at least 1 of the
marketing years described in paragraph (15).
``(B) Inclusion.--For the purpose of determining
the crop acreage base of an active producer of tobacco
for a kind of tobacco produced in the State of Georgia
under section 380I(c)(3), the term `traditional tobacco
county' includes a county that is contiguous to a
county described in subparagraph (A).
``CHAPTER 1--PAYMENTS TO TOBACCO QUOTA HOLDERS AND TRADITIONAL
PRODUCERS
``SEC. 380B. TRANSITION PAYMENTS TO TOBACCO QUOTA HOLDERS.
``(a) In General.--The Secretary shall make transition payments to
each tobacco quota holder.
``(b) Tobacco Quota Holder.--
``(1) In general.--Except as otherwise provided in this
subsection, the Secretary shall consider a person to be a
tobacco quota holder under this section if the person was an
owner of a farm, as of July 1, 2002, for which a basic tobacco
farm marketing quota or farm acreage allotment for quota
tobacco was established with respect to the 2002 tobacco
marketing year under a marketing quota program established
under part I of subtitle B (as in effect before the effective
date of this subtitle).
``(2) Effect of purchase contract.--If there was an
agreement for the purchase of all or part of a farm described
in paragraph (1) as of July 1, 2002, and the parties to the
sale are unable to agree to the disposition of eligibility for
payments under this section, the Secretary, taking into account
any transfer of quota that has been agreed to, shall provide
for the equitable division of the payments among the parties by
adjusting the determination of who is the tobacco quota holder
with respect to particular pounds of the quota.
``(3) Effect of agreement for permanent quota transfer.--If
the Secretary determines that there was in existence, as of
July 1, 2002, an agreement for the permanent transfer of quota,
but that the transfer was not completed by that date, the
Secretary shall consider the tobacco quota holder to be the
party to the agreement that, as of that date, was the owner of
the farm to which the quota was to be transferred.
``(4) Protected bases.--A person that owns a farm with a
tobacco poundage quota that is protected under a conservation
reserve program contract entered into under section 1231 of the
Food Security Act of 1985 (16 U.S.C. 3831) shall be considered
to be a tobacco quota holder with respect to the protected
poundage.
``(5) Secretarial discretion.--Notwithstanding paragraphs
(1) through (4), the Secretary may declare a person to be the
tobacco quota holder with respect to certain pounds of quota or
otherwise for purposes of this section if the Secretary--
``(A) considers the declaration is needed to ensure
a fair and equitable administration of the payments
provided for in this section, including such actions as
are necessary to prevent payments based on speculation;
and
``(B) does not, in exercising the authority
provided under this paragraph, effectively increase the
total quota in excess of the quota that was available
to all producers for the 2002 marketing year for other
than seed or experimental use.
``(6) Limitation on quantity of quota held.--
``(A) In general.--A person shall be considered a
tobacco quota holder for purposes of this section only
with respect to that number of permanent pounds that
qualifies the person as a tobacco quota holder.
``(B) Included quota.--The determination of the
tobacco poundage amount for which the person qualifies
shall--
``(i) be made based on the 2002 crop quota
levels; and
``(ii) take into account sales of the farm
that occurred before July 1, 2002, and any
permanent transfers of quota that took place
before that date.
``(c) Application.--
``(1) In general.--To be eligible to receive a payment
under this section, a person shall submit to the Secretary an
application containing such information as the Secretary may
require to demonstrate to the satisfaction of the Secretary
that the person is a tobacco quota holder.
``(2) Administration.--The application shall be submitted
within such time, in such form, and in such manner as the
Secretary may require.
``(d) Base Quota Level.--
``(1) In general.--The Secretary shall establish a base
quota level applicable to each tobacco quota holder, as
determined under this subsection.
``(2) Level.--The base quota level for each tobacco quota
holder shall be equal to the basic tobacco marketing quota
under part I of subtitle B (as in effect before the effective
date of this subtitle) for the 2002 marketing year for quota
tobacco on the farm owned by the tobacco quota holder.
``(e) Payment.--The Secretary shall make payments to each tobacco
quota holder under subsection (b) in an amount obtained by
multiplying--
``(1)(A) for fiscal year 2004, $1.60 per pound;
``(B) for fiscal year 2005, $1.50 per pound;
``(C) for fiscal year 2006, $1.40 per pound;
``(D) for fiscal year 2007, $1.30 per pound;
``(E) for fiscal year 2008, $1.20 per pound; and
``(F) for fiscal year 2009, $1.00 per pound; by
``(2) the base quota level established for the quota holder
under subsection (d).
``(f) Time for Payment.--The payments to tobacco quota holders
required under this section shall be made by, to the maximum extent
practicable, the date that is 180 days after the date of enactment of
this subtitle, November 1, 2004, and each November 1 thereafter through
November 1, 2008, for each of fiscal years 2004 through 2009, as
applicable.
``SEC. 380C. DIRECT PAYMENTS TO TRADITIONAL PRODUCERS OF TOBACCO.
``(a) In General.--The Secretary shall make direct payments under
this section to traditional producers of tobacco.
``(b) Eligibility.--
``(1) In general.--To be eligible to receive a payment
under this section, a person shall submit to the Secretary an
application containing such information as the Secretary may
require to demonstrate to the satisfaction of the Secretary
that the person is a traditional producer of tobacco.
``(2) Administration.--The application shall be submitted
within such time, in such form, and in such manner as the
Secretary may require.
``(c) Base Quota Level.--
``(1) In general.--The Secretary shall establish a base
quota level applicable to each traditional producer of tobacco,
as determined under this subsection.
``(2) Flue-cured and burley tobacco.--In the case of Flue-
cured tobacco (types 11, 12, 13, and 14) and Burley tobacco
(type 31), the base quota level for each tobacco quota holder
shall be equal to the effective tobacco marketing quota
(irrespective of disaster lease and transfers) under part I of
subtitle B (as in effect before the effective date of this
subtitle) for the 2002 marketing year for quota tobacco
produced on the farm.
``(3) Other kinds of tobacco.--In the case of each kind of
tobacco other than Flue-cured tobacco (types 11, 12, 13, and
14) and Burley tobacco (type 31), for the purpose of
calculating a payment to a traditional producer of tobacco, the
base quota level for the traditional producer of tobacco shall
be the quantity obtained by multiplying--
``(A) the basic tobacco farm acreage allotment for
the 2002 marketing year established by the Secretary
for quota tobacco produced on the farm; by
``(B) the actual yield of the crop of quota tobacco
produced on the farm.
``(d) Payment.--
``(1) In general.--Subject to paragraph (2), the Secretary
shall make payments to each traditional producer of tobacco, as
determined under subsection (b), in an amount obtained by
multiplying--
``(A)(i) for fiscal year 2004, 75 cents per pound;
``(ii) for fiscal year 2005, 75 cents per pound;
``(iii) for fiscal year 2006, 70 cents per pound;
``(iv) for fiscal year 2007, 65 cents per pound;
``(v) for fiscal year 2008, 60 cents per pound; and
``(vi) for fiscal year 2009, 55 cents per pound; by
``(B) the base quota level established for the
traditional producer of tobacco under subsection (c).
``(2) Payment rate.--The rate for payments to a traditional
producer of quota tobacco under paragraph (1)(A) shall be equal
to--
``(A) in the case of a person that produced quota
tobacco marketed, or considered planted, under a
marketing quota for all 3 of the 2000, 2001, and 2002
tobacco marketing years, the rate prescribed under
paragraph (1)(A) for the applicable fiscal year;
``(B) in the case of a person that produced quota
tobacco marketed, or considered planted, under a
marketing quota for not more than 2 of the 2000, 2001,
and 2002 tobacco marketing years, \2/3\ of the rate
prescribed under paragraph (1)(A) for the applicable
fiscal year; and
``(C) in the case of a person that produced quota
tobacco marketed, or considered planted, under a
marketing quota for not more than 1 of the 2000, 2001,
and 2002 tobacco marketing years, \1/3\ of the rate
prescribed under paragraph (1)(A) for the applicable
fiscal year.
``(e) Time for Payment.--The payments to traditional producers of
tobacco required under this section shall be made by, to the maximum
extent practicable, the date that is 180 days after the date of
enactment of this subtitle, November 1, 2004, and each November 1
thereafter through November 1, 2008, for each of fiscal years 2004
through 2009, as applicable.
``SEC. 380D. ADMINISTRATION.
``(a) Resolution of Disputes.--
``(1) In general.--Any dispute regarding the eligibility of
a person to receive a payment under this subtitle, or the
amount of the payment, may be appealed to the county committee
established under section 8 of the Soil Conservation and
Domestic Allotment Act (16 U.S.C. 590h) for the county or other
area in which the farming operation of the person is located.
``(2) National appeals division.--Any adverse determination
of a county committee under subsection (a) may be appealed to
the National Appeals Division established under subtitle H of
the Department of Agriculture Reorganization Act of 1994 (7
U.S.C. 6991 et seq.).
``(b) Use of Qualified Financial Institutions.--The Secretary may
use qualified financial institutions to manage assets, make payments,
and otherwise carry out this subtitle.
``CHAPTER 2--TOBACCO QUALITY AND QUANTITY
``SEC. 380G. TOBACCO QUALITY BOARD.
``(a) In General.--The Secretary shall establish a permanent
advisory board within the Department, to be known as the `Tobacco
Quality Board'.
``(b) Membership.--
``(1) In general.--The Tobacco Quality Board shall consist
of 13 members, of which--
``(A) 5 members shall be appointed by the Secretary
from nominations submitted by representatives of
tobacco producers in the United States, including at
least--
``(i) 1 representative of Flue-cured
tobacco producers;
``(ii) 1 representative of Burley tobacco
producers; and
``(iii) 1 representative of dark fire-cured
tobacco producers;
``(B) 5 members shall be appointed by the Secretary
from nominations submitted by representatives of
tobacco product manufacturers in the United States,
including at least--
``(i) 1 representative of smokeless tobacco
product manufacturers; and
``(ii) 1 representative of export dealers
of tobacco and tobacco products; and
``(C) 3 at-large members shall be appointed by the
Secretary, including at least 1 officer or employee of
the Department.
``(2) Chairperson.--The Secretary shall appoint the
chairperson of the Tobacco Quality Board, with a different
member serving as chairperson of the Tobacco Quality Board each
term.
``(3) Terms.--Each member of the Tobacco Quality Board
shall serve for 2-year terms, except that the terms of the
members first appointed to the Tobacco Quality Board shall be
staggered so as to establish a rotating membership of the
Tobacco Quality Board, as determined by the Secretary.
``(c) Duties.--The Tobacco Quality Board shall--
``(1) determine and describe the physical characteristics
of tobacco produced in the United States and unmanufactured
tobacco imported into the United States;
``(2) assemble and evaluate, in a systematic manner,
concerns and problems with the quality of tobacco produced in
the United States, expressed by domestic and foreign buyers and
manufacturers of tobacco products;
``(3) review data collected by Federal agencies on the
physical and chemical integrity of tobacco produced in the
United States and unmanufactured tobacco imported into the
United States, to ensure that tobacco being used in
domestically-manufactured tobacco products is of the highest
quality and is free from prohibited physical and chemical
agents;
``(4) investigate and communicate to the Secretary--
``(A) conditions with respect to the production of
tobacco that discourage improvements in the quality of
tobacco produced in the United States; and
``(B) recommendations for regulatory changes that
would address tobacco quality issues;
``(5) conduct oversight regarding tobacco marketing issues
(such as opening sales dates and marketing regulations)
applicable to auction markets;
``(6) provide assistance to Federal agencies on actions
taken by the Federal agencies that affect the quality or
quantity of tobacco produced in the United States;
``(7) not later than a date determined by the Secretary,
make recommendations to the Secretary, and the applicable
Production Board established for the kind of tobacco, on the
range of base years for the maximum crop acreage base under
section 380I(c)(3)(B) for each crop of each kind of tobacco,
except that the range of base years shall be the crop years for
the 1998 through 2002 crops unless otherwise determined by the
Tobacco Quality Board; and
``(8) carry out such other related activities as are
assigned to the Tobacco Quality Board by the Secretary.
``(d) Administration.--The Secretary shall provide the Tobacco
Quality Board with (as determined by the Secretary)--
``(1) a staff that is--
``(A) experienced in the sampling and analysis of
unmanufactured tobacco; and
``(B) capable of collecting data and monitoring
tobacco production information; and
``(2) other resources and information necessary for the
Tobacco Quality Board to perform the duties of the Tobacco
Quality Board under this subtitle, including information
concerning acreage devoted to the production of each kind of
tobacco.
``(e) Applicability of Federal Advisory Committee Act.--The Federal
Advisory Committee Act (5 U.S.C. App.) shall not apply to the Tobacco
Quality Board.
``SEC. 380H. PRODUCTION BOARDS.
``(a) In General.--The Secretary shall establish a permanent
advisory board for each kind of tobacco, to be known as a `Production
Board'.
``(b) Membership.--
``(1) In general.--Subject to paragraph (2), a Production
Board for a kind of tobacco shall consist of--
``(A) not more than 10 members appointed by the
Secretary from nominations submitted by representatives
of producers of that kind of tobacco in the United
States; and
``(B) 1 officer or employee of the Department
appointed by the Secretary.
``(2) Allocation of membership.--In appointing members to a
Production Board established for a kind of tobacco, the number
of members appointed by the Secretary to represent each State
shall, to the maximum extent practicable, bear the same ratio
to the total number of members of the Production Board as--
``(A) the total volume of domestic sales of the
kind of tobacco produced in the State during the most
recent period for which data is available; bears to
``(B) the total volume of domestic sales of the
kind of tobacco produced in all States during the most
recent period for which data is available.
``(3) Chairperson.--The Secretary shall appoint the
chairperson of a Production Board, with a different member
serving as chairperson of the Production Board each term.
``(4) Terms.--Each member of a Production Board shall serve
for 2-year terms, except that the terms of the members first
appointed to the Production Board shall be staggered so as to
establish a rotating membership of the Production Board, as
determined by the Secretary.
``(c) Duties.--A Production Board established for a kind of tobacco
shall--
``(1) not later than a date determined by the Secretary,
make recommendations to the Secretary on the base year, within
the range of base years recommended by the Tobacco Quality
Board under section 380G(c)(7), for the maximum crop acreage
base under section 380I(c)(3)(B) for each crop of each kind of
tobacco; and
``(2) carry out such other related activities as are
assigned to the Production Board by the Secretary.
``(d) Administration.--The Secretary shall provide each Production
Board established for a kind of tobacco with (as determined by the
Secretary)--
``(1) a staff that is knowledgeable about production and
marketing of that kind of tobacco; and
``(2) other resources and information necessary for the
Production Board to perform the duties of the Production Board
under this subtitle, including information concerning acreage
devoted to the production of each kind of tobacco.
``(e) Applicability of Federal Advisory Committee Act.--The Federal
Advisory Committee Act (5 U.S.C. App.) shall not apply to a Production
Board.
``SEC. 380I. ACREAGE LIMITATION PROGRAM.
``(a) Definitions.--In this section:
``(1) Crop acreage base.--The term `crop acreage base'
means the crop acreage base for a kind of tobacco for a crop
for an active producer of tobacco, as determined by the
Secretary under subsection (c)(3).
``(2) Permitted acreage.--The term `permitted acreage'
means the number of acres devoted to the production of a kind
of tobacco consistent with the annual acreage limitation
program announced by the Secretary for the kind of tobacco, as
determined by the Secretary.
``(b) Announcement.--
``(1) In general.--The Secretary (in consultation with the
Tobacco Quality Board and the applicable Production Board)
shall establish and maintain an acreage limitation program for
each crop of each kind of tobacco.
``(2) Supply.--In establishing and carrying out an acreage
limitation program for a crop of a kind of tobacco, the
Secretary shall determine whether the total supply of that kind
of tobacco, in the absence of an acreage limitation program,
will be excessive, taking into account the need for an adequate
carry-over to maintain reasonable and stable supplies and
prices.
``(3) Deadline.--The Secretary (in consultation with the
Tobacco Quality Board and the applicable Production Board)
shall announce the annual acreage limitation program for each
kind of tobacco not later than December 15 of the calendar
year preceding the year in which the crop is harvested, except that in
the case of the 2004 crop, the Secretary shall announce the program as
soon as practicable after the date of enactment of this section.
``(c) Program.--
``(1) In general.--Under an acreage limitation program for
a kind of tobacco announced under subsection (b), the
limitation shall be achieved by applying a uniform percentage
reduction to the crop acreage base for the kind of tobacco for
the crop for active producers of tobacco that produce that kind
of tobacco, as determined by the Secretary.
``(2) Compliance.--
``(A) Loans, purchases, or payments.--A producer
that knowingly produces a kind of tobacco in excess of
the permitted acreage for the kind of tobacco, or
violate any lease or transfer requirements of this Act,
shall be ineligible for any loans, purchases, or
payments for the kind of tobacco.
``(B) Penalties.--
``(i) Criminal penalty.--A producer
described in subparagraph (A) shall be fined
not more than $100,000 or imprisoned not more
than 2 years, or both.
``(ii) Civil penalty.--A producer described
in subparagraph (A) shall be subject to a civil
penalty in an amount not to exceed 2 percent of
the value of the kind of tobacco produced by
the producer during the applicable crop year,
as determined by the Secretary.
``(iii) Additional penalties.--A civil
penalty under clause (ii) for a violation shall
be in addition to any criminal penalty under
clause (i) for the violation.
``(C) Jurisdiction to prevent and restrain
violations.--A United States district court shall have
jurisdiction to prevent and restrain the a producer
from producing a kind of tobacco in excess of the
permitted acreage for the kind of tobacco.
``(3) Crop acreage bases.--
``(A) In general.--Subject to subparagraphs (B)
through (D) and paragraph (4), the crop acreage base
for an active producer of tobacco for a crop of each
kind of tobacco shall equal the number of acres that is
equal to--
``(i) in the case of the 2004 crop year,
the average of the acreage planted and
considered planted by the active producer of
tobacco to the kind of tobacco for harvest in a
traditional tobacco county in each of the 5
crop years preceding the crop year, as
determined and adjusted by the Secretary (in
consultation with the Tobacco Quality Board and
the applicable Production Board); and
``(ii) in the case of each subsequent crop
year, the number of acres planted and
considered planted by the active producer of
tobacco to the kind of tobacco for harvest in a
traditional tobacco county in the preceding
crop year, as determined and adjusted by the
Secretary (in consultation with the Tobacco
Quality Board and the applicable Production
Board).
``(B) Maximum crop acreage bases.--
``(i) In general.--Subject to clause (ii),
the total quantity of acreage devoted to a kind
of tobacco by active producers of tobacco
during a crop year shall not exceed the total
quantity of acreage devoted to the kind of
tobacco by active producers during a crop year
determined by the Secretary.
``(ii) Adjustment.--If the active producers
of a kind of tobacco demonstrate to the
Secretary that the application of clause (i) to
a crop of a kind of tobacco will result in
unbalanced supply and demand conditions, the
Secretary may adjust the total quantity of
acreage that may be devoted to the kind of
tobacco by active producers during the crop
year.
``(C) Sale, lease, or transfer of crop acreage
bases.--An active producer of tobacco shall not sell,
lease, or transfer to another person a crop acreage
base established for the active producer of tobacco
under this paragraph.
``(D) Reallocation of unused crop acreage bases.--
``(i) County pool.--Subject to clauses (ii)
and (iii), if an active producer of tobacco
with a crop acreage base for a kind of tobacco
elect not to use all or part of the crop
acreage base to continue to produce that kind
of tobacco, the unused crop acreage base shall
be placed in a pool established for the
traditional tobacco county for reallocation by
the Secretary to other producers of that kind
of tobacco in the traditional tobacco county
that request the crop acreage base.
``(ii) State pool.--Subject to clause
(iii), if any crop acreage base for a kind of
tobacco remains after the crop acreage base is
made available to producers of that kind of
tobacco in the traditional tobacco county in a
State under clause (i), the unused crop acreage
base shall be placed in a pool established for
the State for reallocation by the Secretary to
other producers of that kind of tobacco in a
traditional tobacco county.
``(iii) New producers.--In reallocating
unused crop acreage bases for a kind of tobacco
in a traditional tobacco county made available
under each of clauses (i) and (ii), the
Secretary shall make available to any new
producers of that kind of tobacco in the
traditional tobacco county up to 10 percent of
the crop acreage bases available for
reallocation for the kind of tobacco in the
traditional tobacco county.
``(4) Compliance with certain requirements.--As a condition
of the establishment of a crop acreage base for active
producers of tobacco for a crop of a kind of tobacco, the
active producers of tobacco shall agree, during the crop year
for which the crop acreage base is established--
``(A) to comply with applicable conservation
requirements under subtitle B of title XII of the Food
Security Act of 1985 (16 U.S.C. 3811 et seq.);
``(B) to comply with applicable wetland protection
requirements under subtitle C of title XII of the Act
(16 U.S.C. 3821 et seq.);
``(C) to use the land of the active producer of
tobacco, in a quantity equal to the crop acreage base
for an agricultural or conserving use, and not for a
nonagricultural commercial or industrial use, as
determined by the Secretary; and
``(D) to effectively control noxious weeds and
otherwise maintain the land in accordance with sound
agricultural practices, as determined by the Secretary,
if the agricultural or conserving use involves the
noncultivation of any portion of the land referred to
in subparagraph (C).
``CHAPTER 3--TOBACCO MARKET STABILITY PROGRAM
``SEC. 380M. TOBACCO MARKET STABILITY PROGRAM.
``(a) In General.--If during any consecutive 4-week period of a
marketing year the world price for the crop of a kind of tobacco
exceeds the average domestic price for the crop of the kind of tobacco
(as determined by the Secretary, in consultation with the Tobacco
Quality Board and the applicable Production Board), the Secretary shall
make available to active producers of tobacco on a farm of the crop of
the kind of tobacco market stability payments for the marketing year in
an amount obtained by multiplying--
``(1) the payment rate for the crop (as determined under
subsection (b)); and
``(2) the permitted acreage for the active producer of
tobacco (as determined under section 380I).
``(b) Payment Rate.--
``(1) In general.--Subject to paragraphs (2) and (3), the
payment rate for a crop of a kind of tobacco under this section
shall be the amount by which--
``(A) the world price for the crop; exceeds
``(B) the domestic price for the crop.
``(2) World prices.--
``(A) In general.--Except as provided in
subparagraph (B), the world price for each crop of a
kind of tobacco under this section shall be determined
by Secretary (in consultation with the Tobacco Quality
Board and the applicable Production Board).
``(B) Minimum price.--
``(i) In general.--Except as provided in
clause (ii), the world price for each crop of a
kind of tobacco under this section shall be not
less than $1.00 per pound.
``(ii) Reduction.--The Secretary (in
consultation with the Tobacco Quality Board and
the applicable Production Board) may reduce the
world price for a crop of a kind of tobacco
under this section below the amount specified
in clause (i) if the Secretary determines that
such a reduction is necessary.
``(3) Domestic prices.--The domestic price for the crop of
a kind of tobacco under this section shall be determined by the
Secretary, in consultation with the Tobacco Quality Board and
the applicable Production Board.
``(c) Delivery Through Private Providers.--
``(1) In general.--The Secretary shall carry out this
section, to the maximum extent practicable, through contracts
with private insurance companies and other private entities
approved by the Secretary (referred to in this section as
`private providers').
``(2) Reimbursement.--The Secretary shall reimburse private
providers for administrative expenses incurred in carrying out
this section, as determined by the Secretary.
``(d) Delivery Through Local Department Offices.--If the Secretary
determines (in consultation with the Tobacco Quality Board) that there
are an insufficient number of private providers to carry out this
section in all or part of a State, the Secretary (acting through local
offices of the Department) shall carry out this section directly in all
or part of the State.
``(e) Adjustments.--After the Secretary announces the terms and
conditions of the tobacco market stability program for a crop year, the
Secretary shall consult with the Tobacco Quality Board and the
applicable Production Board before making any change to the program for
the crop year.
``(f) Additional Coverage.--The Secretary may offer additional
coverage to active producers of tobacco on a farm of a crop of a kind
of tobacco under this section under which a higher level of price
coverage is made available to the active producers of tobacco on the
farm, in exchange for an additional premium paid by the active
producers of tobacco on the farm.
``(g) Assessment.--
``(1) In general.--Effective for each marketing year for a
kind of tobacco for which tobacco market stability payments are
made available under this section, subject to paragraph (2) and
section 380S(c)(1)(C), each producer and purchaser of that kind
of tobacco shall remit to the Commodity Credit Corporation a
nonrefundable marketing assessment in an amount determined by
the Secretary that is sufficient to provide the payments for
that kind of tobacco.
``(2) Amount.--The amount of producer and purchaser
assessments for a kind of tobacco under this subsection--
``(A) shall be determined in such a manner that
producers and purchasers share equally, to the maximum
extent practicable, in paying assessments required under this
subsection; and
``(B) shall not exceed 5 cents per pound.
``(3) Collection.--The producer and purchaser assessments shall
be--
``(A) collected in the same manner as provided for in
section 106A(d)(2) or 106B(d)(3) of the Agricultural Act of
1949 (7 U.S.C. 1445-1(d)(2), 1445-2(d)(3)) (as in effect before
the effective date of this subtitle), as applicable; and
``(B) enforced in the same manner as provided in section
106A(h) or 106B(j) of the Agricultural Act of 1949 (7 U.S.C.
1445-1(h), 1445-2(j)) (as in effect before the effective date
of this subtitle), as applicable.
``(4) Enforcement.--The Secretary may enforce this subsection in
the courts of the United States.
``CHAPTER 4--TOBACCO COMMUNITY ECONOMIC DEVELOPMENT GRANTS
``SEC. 380O. TOBACCO COMMUNITY ECONOMIC DEVELOPMENT GRANTS.
``(a) In General.--The Secretary shall make grants to eligible
States in accordance with this section to pay the Federal share of the
cost of carrying out economic development initiatives in impacted
counties.
``(b) Application.--To be eligible to receive payments under this
section, an eligible State shall prepare and submit to the Secretary an
application at such time, in such manner, and containing such
information as the Secretary may require, including--
``(1) a description of the activities that the eligible
State will carry out using amounts received under the grant;
``(2) a designation of an appropriate State agency to
administer amounts received under the grant; and
``(3) a description of the steps to be taken to ensure that
the funds are distributed in accordance with subsection (e).
``(c) Amount of Grant.--From the amounts available to carry out
this section for an applicable fiscal year, the Secretary shall allot
to each eligible State an amount that bears the same ratio to the
amounts available as--
``(1) the reduction in gross receipts from the sale of
tobacco by tobacco producers in the eligible State for the base
period for the applicable fiscal year as compared to the base
period for fiscal year 2002; bears to
``(2) the reduction in gross receipts from the sale of
tobacco by tobacco producers in all eligible States for the
base period for the applicable fiscal year as compared to the
base period for fiscal year 2002.
``(d) Payments.--
``(1) In general.--An eligible State that has an
application approved by the Secretary under subsection (b)
shall be entitled to a payment under this section in an amount
that is equal to its allotment under subsection (c).
``(2) Form of payments.--The Secretary may make payments
under this section to an eligible State in installments, and in
advance or by way of reimbursement, with necessary adjustments
on account of overpayments or underpayments, as the Secretary
may determine.
``(3) Reallocation.--Any portion of the allotment of an
eligible State under subsection (c) that the Secretary
determines will not be used to carry out this section in
accordance with an approved State application required under
subsection (a) shall be reallocated by the Secretary to other
eligible States in proportion to the original allotments to the
other eligible States.
``(e) Use and Distribution of Funds.--
``(1) In general.--Amounts received by an eligible State
under this section shall be used to carry out economic
development activities, including--
``(A) rural business enterprise activities that are
similar to activities described in subsections (c) and
(e) of section 310B of the Consolidated Farm and Rural
Development Act (7 U.S.C. 1932);
``(B) down payment loan assistance activities that
are similar to activities described in section 310E of
the Consolidated Farm and Rural Development Act (7
U.S.C. 1935);
``(C) activities designed to help create productive
farm or off-farm employment in rural areas to provide a
more viable economic base and enhance opportunities for
improved incomes, living standards, and contributions
by rural individuals to the economic and social
development of impacted counties;
``(D) activities that expand existing
infrastructure, facilities, and services to capitalize
on opportunities to diversify economies in impacted
counties and that support the development of new
industries or commercial ventures;
``(E) initiatives designed to create or expand
locally owned value-added processing and marketing
operations in impacted counties for agricultural
commodities and products; and
``(F) technical assistance activities by persons to
support farmer-owned enterprises, or agriculture-based
rural development enterprises, that are similar to
enterprises described in section 252 or 253 of the
Trade Act of 1974 (19 U.S.C. 2342, 2343).
``(2) Distribution.--
``(A) Economic development activities.--Not less
than 20 percent of the amounts received by an eligible
State under this section shall be used to carry out--
``(i) economic development activities
described in subparagraph (C) or (D) of
paragraph (1); or
``(ii) agriculture-based rural development
activities described in paragraph (1)(E).
``(B) Technical assistance activities.--Not less
than 10 percent of the amounts received by an eligible
State under this section shall be used to carry out
technical assistance activities described in paragraph
(1)(F).
``(C) Impacted counties.--To be eligible to receive
payments for a fiscal year under this section, an
eligible State shall demonstrate to the Secretary that
funding will be provided, during the fiscal year, for
activities in each impacted county in the eligible
State, in amounts that provide the greatest amount of
funding for impacted counties that have sustained the
highest percentage reduction in gross receipts from the
sale of tobacco for the base period for the applicable
fiscal year, as compared to the base period for fiscal
year 2002.
``(f) Preferences in Hiring.--An eligible State may require
recipients of funds under this section to provide a preference in
employment to an individual who, during fiscal year 2003, was employed
in the production, manufacture, processing, or warehousing of tobacco
or tobacco products, or resided, in an impacted county described in
subsection (e)(2).
``(g) Federal Share.--A grant provided under this section shall be
for not more than 75 percent of the cost of carrying out activities
described in subsection (e).
``CHAPTER 5--COMPETITIVE GRANTS FOR TOBACCO RESEARCH
``SEC. 380Q. COMPETITIVE GRANTS FOR TOBACCO RESEARCH.
``(a) In General.--Notwithstanding any other provision of law, the
Secretary shall make competitive grants under section 406 of the
Agricultural Research, Extension, and Education Reform Act of 1998 (7
U.S.C. 7626) to colleges and universities located in eligible States to
conduct research--
``(1) to assist tobacco producers to diversify crops or
implement other means to reduce or eliminate the reliance of
the producers on the production of tobacco or to promote
alternative uses of tobacco or enhance the quality of tobacco
produced in the United States; and
``(2) to foster and facilitate development, evaluation, and
implementation of economically viable new agricultural
technologies and enterprises for rural communities.
``(b) Grant Distribution.--In making grants under this section, the
Secretary shall provide for an equitable distribution of the grants
based on the volume of each kind of tobacco that is produced in each
eligible State, as determined by the Secretary
``CHAPTER 6--FUNDING
``SEC. 380S. TOBACCO TRUST FUND.
``(a) Establishment.--There is established in the Commodity Credit
Corporation a revolving trust fund to be used in carrying out this
subtitle (referred to in this section as the `Fund'), consisting of--
``(1) such amounts as are deposited in the Fund under
subsection (b);
``(2) such amounts as are necessary from the Commodity
Credit Corporation; and
``(3) any interest earned on investment of amounts in the
Fund under subsection (d).
``(b) Deposits.--Revenues from assessments collected under section
380T shall be deposited in the Fund.
``(c) Expenditures.--
``(1) In general.--Subject to paragraphs (2) and (3) and
notwithstanding any other provision of law, in addition to any
other funds that may be available, the Secretary may use from
the Fund such amounts as the Secretary determines are
necessary--
``(A) to make payments to tobacco quota holders and
traditional producers under chapter 1;
``(B) to pay necessary expenses of the Tobacco
Quality Board and Production Boards and to carry out
the acreage limitation program under chapter 2;
``(C) in addition to funds made available under
section 380M(g), to carry out the tobacco market
stability program under chapter 3, in an amount equal
to $100,000,000 for each of fiscal years 2005 through
2009;
``(D) to make tobacco community economic
development grants under chapter 4, in an amount equal
to $100,000,000 for each of fiscal years 2005 through
2009;
``(E) to make competitive grants for tobacco
research under chapter 5, in an amount equal to
$12,000,000 for each of fiscal years 2005 through 2009;
``(F) to make grants to each association that has
entered into a loan agreement with the Commodity Credit
Corporation under section 106A or 106B of the
Agricultural Act of 1949 (7 U.S.C. 1445-1, 1445-2) (as
in effect before the effective date of this subtitle)
to assist the association to transition to alternative
methods of marketing tobacco in accordance with a plan
approved by the Secretary, with the grants allocated on
the basis of the proportion of tobacco marketed by each
association, in an amount not to exceed $1,500,000 for
each association for each kind of tobacco for each of
fiscal years 2004 through 2008;
``(G) to pay administrative costs incurred by the
Secretary in carrying out this subtitle; and
``(H) to reimburse the Commodity Credit Corporation
for costs incurred by the Commodity Credit Corporation
under paragraph (2).
``(2) Expenditures by commodity credit corporation.--
``(A) In general.--Subject to subparagraph (B) and
notwithstanding any other provision of law, the
Secretary may use funds of the Commodity Credit
Corporation to make payments under paragraph (1).
``(B) Reimbursement to commodity credit
corporation.--Not later than January 1, 2010, the
Commodity Credit Corporation shall be reimbursed in
full, with interest, for all funds of the Commodity
Credit Corporation expended under subparagraph (A).
``(3) Administrative expenses.--An amount not to exceed
$20,000,000 for each fiscal year of the amounts in the Fund
shall be available to pay the administrative expenses necessary
to carry out this subtitle.
``(d) Investment of Amounts.--
``(1) In general.--The Commodity Credit Corporation shall
invest such portion of the Fund as is not, in the judgment of
the Commodity Credit Corporation, required to meet current
withdrawals.
``(2) Interest-bearing obligations.--Investments may be
made only in interest-bearing obligations of the United States.
``(3) Acquisition of obligations.--For the purpose of
investments under paragraph (1), obligations may be acquired--
``(A) on original issue at the issue price; or
``(B) by purchase of outstanding obligations at the
market price.
``(4) Sale of obligations.--Any obligation acquired by the
Fund may be sold by the Commodity Credit Corporation at the
market price.
``(5) Credits to fund.--The interest on, and the proceeds
from the sale or redemption of, any obligations held in the
Fund shall be credited to and form a part of the Fund.
``(e) Administration.--In administering the Fund, the Secretary
shall make payments, reimburse agencies of the Department, and accept
deposits without regard to limitations on total amounts of allotments
and fund transfers under section 11 of the Commodity Credit Corporation
Charter Act (15 U.S.C. 714i).
``SEC. 380T. ASSESSMENTS.
``(a) Annual Assessment.--The Secretary, acting through the
Commodity Credit Corporation, shall impose an annual assessment,
calculated in accordance with this section, on each tobacco product
manufacturer and tobacco product importer that sells tobacco products
in domestic commerce in the United States.
``(b) Tobacco Trust Fund.--Assessments collected under this section
shall be deposited in the Tobacco Trust Fund.
``(c) Annual Assessment for Each Class of Tobacco Product.--
``(1) Total amount.--The total amount to be assessed, and
paid by, the manufacturers and importers of tobacco products
shall be a total of $13,000,000,000 for all applicable fiscal
years.
``(2) Annual allocation by class of tobacco products.--
Subject to paragraphs (3) and (4), the percentage of the total
amount to be assessed, and paid by, the manufacturers and
importers of each class of tobacco product in each applicable
fiscal year shall be--
``(A) for cigarette manufacturers and importers,
98.303 percent;
``(B) for snuff manufacturers and importers, 0.428
percent;
``(C) for chewing tobacco manufacturers and
importers, 0.098 percent;
``(D) for manufacturers and importers of small
cigars, 0.011 percent;
``(E) for manufacturers and importers of large
cigars, 1.095 percent;
``(F) for pipe tobacco manufacturers and importers,
0.021 percent; and
``(G) for roll-your-own tobacco manufacturers and
importers, 0.044 percent.
``(3) Adjustments.--Subject to paragraph (4), the Secretary
may adjust the percentage of the total amount to be assessed,
and paid by, the manufacturers and importers of a class of
tobacco product for an applicable fiscal year to reflect
changes in the relative market share of each class of tobacco
products.
``(4) Minimum amount.--The total amount to be assessed, and
paid by, the manufacturers and importers of each class of
tobacco product in each applicable fiscal year shall not be
less than the amount required to carry out this subtitle during
the applicable fiscal year, as determined by the Secretary.
``(d) Allocation of Total Assessments by Market Share.--The amount
of the assessment for each class of tobacco product to be paid by each
manufacturer or importer of the class of tobacco product under
subsection (a) shall be determined for each applicable fiscal year by
multiplying--
``(1) the market share of the manufacturer or importer, as
calculated with respect to the applicable fiscal year, of the
class of tobacco product; by
``(2) the total amount of the assessment for the applicable
fiscal year, under subsection (c), for the class of tobacco
product.
``(e) Determination of Volume of Domestic Sales.--
``(1) In general.--The calculation of the volume of
domestic sales of a class of tobacco product by a manufacturer
or importer, and by all manufacturers and importers as a group,
shall be made by the Secretary based on certified reports
submitted by the manufacturers and importers pursuant to
subsection (f).
``(2) Measurement.--For purposes of the calculations under
this subsection and the certifications under subsection (f) by
the Secretary, the volumes of domestic sales shall be measured
by--
``(A) in the case of cigarettes, the numbers of
cigarettes sold; and
``(B) in the case of each other class of tobacco
products, such unit as is specified by regulation by
the Secretary.
``(f) Certification of Volume of Domestic Sales.--
``(1) In general.--Each manufacturer and importer of
tobacco products shall submit for the base period for each
applicable fiscal year a certified report to the Secretary of
setting forth for each class of tobacco products marketed or
imported the total, for the base period, of domestic sales of
the tobacco products by the manufacturer and importer,
respectively, to wholesalers and retailers and directly to
consumers.
``(2) Penalties.--Any person that knowingly fails to
provide information required under this subsection or that
provides false information under this subsection shall be
subject to the penalties described in section 1003 of title 18,
United States Code.
``(g) Termination Date.--The authority provided by this section
terminates on September 30, 2009.
``SEC. 380U. COMMODITY CREDIT CORPORATION.
The Secretary shall use the funds, facilities, and authorities of
the Commodity Credit Corporation to carry out this subtitle, to remain
available until expended.
``SEC. 380V. TRANSITION PROVISIONS.
``(a) Tobacco Stocks.--
``(1) In general.--To provide for the orderly disposition
of quota tobacco held by an association that has entered into a
loan agreement with the Commodity Credit Corporation under
section 106A or 106B of the Agricultural Act of 1949 (7 U.S.C.
1445-1, 1445-2) (referred to in this section as an
`association'), loan pool stocks for each kind of tobacco held
by the association shall be disposed of in accordance with this
subsection.
``(2) Associations.--For each kind of tobacco held by an
association, the proportion of loan pool stocks for each kind
of tobacco held by the association that shall be transferred to
the association shall be equal to--
``(A) the amount of funds held by the association
in the No Net Cost Tobacco Fund and the No Net Cost
Tobacco Account established under sections 106A and
106B of the Agricultural Act of 1949 (7 U.S.C. 1445-1,
1445-2), respectively, for the kind of tobacco; divided
by
``(B) the average list price per pound for the kind
of tobacco, as determined by the Secretary.
``(3) Commodity credit corporation.--Any loan pool stocks
of a kind of tobacco of an association that are not disposed of
in accordance with paragraph (2) shall be--
``(A) transferred by the association to the
Commodity Credit Corporation; and
``(B) disposed of in a manner determined by the
Secretary.
``(b) No Net Cost Funds.--
``(1) In general.--Any funds in the No Net Cost Tobacco
Fund or the No Net Cost Tobacco Account of an association
established under sections 106A and 106B of the Agricultural
Act of 1949 (7 U.S.C. 1445-1, 1445-2), respectively, that
remain after the application of subsection (a) and sections
106A and 106B of the Agricultural Act of 1949 (7 U.S.C. 1445,
1445-1) (as in effect before the effective date of this
subtitle) shall be transferred to the association for
distribution to members of the association in accordance with a
plan approved by the Secretary.
``(2) Associations with no loan pool stocks.--In the case
of an association that does not hold any loan pool stocks that
are covered by subsection (a)(2), any funds in the No Net Cost
Tobacco Fund or the No Net Cost Tobacco Account of the
association established under sections 106A and 106B of the
Agricultural Act of 1949 (7 U.S.C. 1445-1, 1445-2),
respectively, shall be transferred to the association for
distribution to members of the association in accordance with a
plan approved by the Secretary.''.
SEC. 202. CONFORMING AMENDMENTS.
Section 320B(c)(1) of the Agricultural Adjustment Act of 1938 (7
U.S.C. 1314h(c)(1)) is amended--
(1) by inserting ``(A)'' after ``(1)'';
(2) by striking ``by'' at the end and inserting ``or''; and
(3) by adding at the end the following:
``(B) in the case of the 2003 marketing year, the price
support rate for the kind of tobacco involved in effect under
section 106 of the Agricultural Act of 1949 (7 U.S.C. 1445) at
the time of the violation; by''.
TITLE III--IMPLEMENTATION
SEC. 301. REGULATIONS.
(a) In General.--The Secretary of Agriculture may promulgate such
regulations as are necessary to implement this Act and the amendments
made by this Act.
(b) Procedure.--The promulgation of the regulations and
administration of this Act and the amendments made by this Act shall be
made without regard to--
(1) the notice and comment provisions of section 553 of
title 5, United States Code;
(2) the Statement of Policy of the Secretary of Agriculture
effective July 24, 1971 (36 Fed. Reg. 13804), relating to
notices of proposed rulemaking and public participation in
rulemaking; and
(3) chapter 35 of title 44, United States Code (commonly
known as the ``Paperwork Reduction Act'').
(c) Congressional Review of Agency Rulemaking.--In carrying out
this section, the Secretary shall use the authority provided under
section 808 of title 5, United States Code.
SEC. 302. EFFECTIVE DATE.
This Act and the amendments made by this Act shall apply to the
2004 and subsequent crops of each kind of tobacco.
<all>
Introduced in Senate
Introduced in the Senate. Read the first time. Placed on Senate Legislative Calendar under Read the First Time.
Read the second time. Placed on Senate Legislative Calendar under General Orders. Calendar No. 264.
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