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.

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

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

`Chapter 1--Payments To Tobacco Quota Holders and Traditional Producers

`Chapter 2--Tobacco Quality and Quantity

`Chapter 3--Tobacco Market Stability Program

`Chapter 4--Tobacco Community Economic Development Grants

`Chapter 5--Competitive Grants for Tobacco Research

`Chapter 6--Funding

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 is repealed.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 is repealed.

(c) TOBACCO INSPECTIONS- Section 213 of the Tobacco Adjustment Act of 1983 (7 U.S.C. 511r) is repealed.

(d) TOBACCO CONTROL- The Act of April 25, 1936 (commonly known as the Tobacco Control Act; 7 U.S.C. 515 et seq.), is repealed.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.

END