I 

108TH CONGRESS 

1ST SESSION H. R. 245

To replace the existing Federal price support and quota programs for tobacco 

with price support and quota programs designed to assist the actual 

producers of tobacco, to compensate quota holders for the loss of tobacco 

quota asset value, to provide assistance for active tobacco producers, 

including those producers who forgo obtaining a tobacco production license, during the transition of the new programs, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 8, 2003

Mr. FLETCHER (for himself, Mr. ETHERIDGE, Mr. TANNER, Mr. BISHOP of 

Georgia, Mr. BOUCHER, Mr. LEWIS of Kentucky, Ms. MCCARTHY of Missouri, Mr. LUCAS of Kentucky, Mr. WAMP, Mr. WHITFIELD, Mr. PRICE

of North Carolina, and Mr. ROGERS of Kentucky) introduced the following bill; which was referred to the Committee on Agriculture 

A BILL

To replace the existing Federal price support and quota 

programs for tobacco with price support and quota programs designed to assist the actual producers of tobacco, 

to compensate quota holders for the loss of tobacco quota 

asset value, to provide assistance for active tobacco producers, including those producers who forgo obtaining 

a tobacco production license, during the transition of 

the new programs, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

2 (a) SHORT TITLE.—This Act may be cited as the 

3 ‘‘Tobacco Equity Elimination Act of 2003’’. 

4 (b) TABLE OF CONTENTS.—The table of contents of 

5 this Act is as follows:

Sec. 1. Short title; table of contents. 

Sec. 2. Findings and purpose. 

TITLE I—TOBACCO EQUITY ELIMINATION 

Sec. 101. Definitions of active tobacco producer and quota holder. 

Sec. 102. Payments to tobacco quota holders. 

Sec. 103. Transition payments for active tobacco producers. 

Sec. 104. Tobacco product manufacturer and importer user fees. 

Sec. 105. Reimbursement of Commodity Credit Corporation expenditures. 

TITLE II—TOBACCO PRICE SUPPORT 

Sec. 201. Availability of tobacco price support. 

Sec. 202. Repeal of related provisions. 

Sec. 203. Effective date. 

TITLE III—TOBACCO PRODUCTION LICENSES 

Sec. 301. Definitions of historic tobacco producer and licensed tobacco producer. 

Sec. 302. Annual estimate of tobacco purchase intentions. 

Sec. 303. National tobacco marketing factor. 

Sec. 304. Issuance of tobacco production licenses. 

Sec. 305. Annual authorized tobacco production under tobacco production licenses. 

Sec. 306. Assessment on licensed tobacco producers for administrative costs. 

Sec. 307. Termination of marketing quota programs and repeal of related provisions. 

Sec. 308. Effective date. 

TITLE IV—TOBACCO ADVISORY BOARD 

Sec. 401. Establishment and duties of Tobacco Advisory Board. 

TITLE V—ASSISTANCE TO TOBACCO-DEPENDENT COMMUNITIES 

Sec. 501. Center for Tobacco-Dependent Communities.

6 SEC. 2. FINDINGS AND PURPOSE. 

7 (a) FINDINGS.—Congress finds the following: 

8 (1) Tobacco production is conducted extensively 

9 in a number of States and generates significant in-
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1 come in local communities in these States, which are 

2 dependent on such production for economic vitality. 

3 (2) Tobacco products manufactured from to4 bacco grown in the these States are transported in 

5 interstate commerce. 

6 (3) While manufacturers of tobacco products 

7 enjoy profitable circumstances, many tobacco grow8 ers and their communities are in dire economic situ9 ations. 

10 (4) Downturns in domestic manufacturing de11 mand for tobacco grown in the United States, losses 

12 in the United States share of the world tobacco mar13 ket, reduced domestic demand for tobacco products, 

14 and State and Federal tobacco policies that have in15 advertently encouraged economic dependence on to16 bacco have contributed to such dire economic situa17 tions. 

18 (5) Many tobacco-producing communities are 

19 experiencing the loss of tobacco farms, reductions in 

20 quota level, and a lowered value for tobacco quotas. 

21 (6) Such communities often have difficulty de22 veloping non-tobacco income, and are therefore quite 

23 dependent on tobacco and vulnerable to changes in 

24 the tobacco-growing industry. 
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1 (7) Domestic and world economic trends have 

2 had a disproportionately harsh impact on small fam3 ily farms and on their communities, as the number 

4 of tobacco farms in the United States declined by 

5 more than 50 percent between 1978 and 1997. 

6 (8) A failure to respond to the current crisis af7 fecting family farms will result in a continued reduc8 tion in the number of such farms and the jobs and 

9 income that they provide to their communities. 

10 (9) A continued program of assistance will pro11 vide many benefits to most tobacco-dependent com12 munities, particularly to small family farms. 

13 (10) While tobacco-growing States have some 

14 financial resources to support community revitaliza15 tion, few States have the resources necessary to sup16 port the transition from dependence on tobacco to a 

17 varied economy. 

18 (b) PURPOSE.—It is the purpose of this Act to pro19 vide assistance to tobacco-dependent communities, and 

20 particularly to those comprised of small family farms, to 

21 assist them in making the transition from tobacco-depend22 ent economies to a diversified economic base.
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1 TITLE I—TOBACCO EQUITY 

2 ELIMINATION

3 SEC. 101. DEFINITIONS OF ACTIVE TOBACCO PRODUCER 

4 AND QUOTA HOLDER. 

5 In this title: 

6 (1) The term ‘‘active tobacco producer’’ means 

7 a owner, operator, landlord, tenant, or sharecropper 

8 who—

9 (A) shares in the risk of producing tobacco 

10 on a farm where tobacco is produced pursuant 

11 to a tobacco farm marketing quota or farm 

12 acreage allotment established under the Agri13 cultural Adjustment Act of 1938 (7 U.S.C. 

14 1281 et seq.) for the 2002 crop year; and 

15 (B) planted the crop, or is considered to 

16 have planted the crop under that Act, in 2002. 

17 (2) The term ‘‘tobacco quota holder’’ means an 

18 owner, as of July 1, 2002, of a tobacco farm mar19 keting quota or a farm acreage allotment established 

20 under the Agricultural Adjustment Act of 1938 (7 

21 U.S.C. 1281 et seq.) for the 2002 marketing year. 

22 SEC. 102. PAYMENTS TO TOBACCO QUOTA HOLDERS. 

23 (a) PAYMENT AUTHORITY.—The Secretary of Agri24 culture shall use funds of the Commodity Credit Corpora25 tion to make payments under this section to tobacco quota
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1 holders as compensation for the loss of tobacco quota asset 

2 value on account of the repeal of part I of subtitle B of 

3 title III of the Agricultural Adjustment Act of 1938 (7 

4 U.S.C. 1311 et seq.). 

5 (b) APPLICATION.—To receive payments under this 

6 section, a person shall prepare and submit to the Sec7 retary of Agriculture an application at such time, in such 

8 manner, and containing such information as the Secretary 

9 may require, including information sufficient to dem10 onstrate that the person satisfies the definition of tobacco 

11 quota holder. 

12 (c) TOTAL PAYMENT AMOUNT.—

13 (1) IN GENERAL.—The Secretary of Agriculture 

14 shall determine the total amount to be paid to all to15 bacco quota holders under this section with respect 

16 to each kind of tobacco.

17 (2) POUNDAGE QUOTA TOBACCO.—For each 

18 kind of tobacco for which the marketing quota is ex19 pressed in pounds, the total amount available for 

20 payments to tobacco quota holders under this section 

21 shall be equal to the product obtained by multi22 plying—

23 (A) $8 per pound; by 

24 (B) the total tobacco farm marketing 

25 quotas established under the Agriculture Ad-
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1 justment Act of 1938 for the 1998 marketing 

2 year for that kind of tobacco. 

3 (3) MARKETING QUOTAS OTHER THAN POUND4 AGE QUOTAS.—For each kind of tobacco for which 

5 there is a marketing quota or allotment on an acre6 age basis, the Secretary shall convert the tobacco 

7 farm marketing quotas or allotments established 

8 under the Agriculture Adjustment Act of 1938 for 

9 the 1998 marketing year for that kind of tobacco to 

10 a poundage basis before executing the mathematical 

11 equation specified in paragraph (2). 

12 (d) BASE QUOTA LEVEL.—

13 (1) IN GENERAL.—The Secretary of Agriculture 

14 shall determine the base quota level of each tobacco 

15 quota holder with respect to each kind of tobacco. 

16 (2) POUNDAGE QUOTA TOBACCO.—For each 

17 kind of tobacco for which the marketing quota is ex18 pressed in pounds, the base quota level for a tobacco 

19 quota holder shall be equal to the average of the to20 bacco farm marketing quota established under the 

21 Agriculture Adjustment Act of 1938 for the 2002 

22 marketing year for quota tobacco on the farm owned 

23 by the tobacco quota holder. 

24 (3) MARKETING QUOTAS OTHER THAN POUND25 AGE QUOTAS.—For each kind of tobacco for which 
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1 there is a marketing quota or allotment on an acre2 age basis, the base quota level for a tobacco quota 

3 holder shall be equal to the product obtained (based 

4 on a poundage conversion) by multiplying—

5 (A) the average tobacco farm marketing 

6 quota or allotment established under the Agri7 culture Adjustment Act of 1938 for the 2002 

8 marketing year for the tobacco quota holder’s 

9 farm; by 

10 (B) the average yield per acre for the to11 bacco quota holder’s farm for the kind of to12 bacco for that marketing year. 

13 (e) PAYMENT AMOUNT.—The Secretary of Agri14 culture shall make payments to a tobacco quota holder 

15 with respect to a kind of tobacco under this section in a 

16 total amount that bears the same ratio to the amount de17 termined by the Secretary under subsection (c) with re18 spect to that kind of tobacco as the base quota level of 

19 the tobacco quota holder with respect to that kind of to20 bacco bears to the base quota level of all tobacco quota 

21 holders with respect to that kind of tobacco. 

22 (f) TIME FOR PAYMENT.—The amount determined 

23 under subsection (e) for a tobacco quota holder shall be 

24 paid in five equal installments during each of the 2003 

25 through 2007 crops of tobacco. 
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1 (g) DEATH OF TOBACCO QUOTA HOLDER.—If a to2 bacco quota holder who is entitled to payments under this 

3 section dies and is survived by a spouse or one or more 

4 dependents, the right to receive the payments shall trans5 fer to the surviving spouse or, if there is no surviving 

6 spouse, to the estate of the tobacco quota holder. 

7 SEC. 103. TRANSITION PAYMENTS FOR ACTIVE TOBACCO 

8 PRODUCERS. 

9 (a) PAYMENT AUTHORITY.—The Secretary of Agri10 culture shall use funds of the Commodity Credit Corpora11 tion to make transition payments under this section to ac12 tive tobacco producers. 

13 (b) APPLICATION.—To receive payments under this 

14 section, a person shall prepare and submit to the Sec15 retary of Agriculture an application at such time, in such 

16 manner, and containing such information as the Secretary 

17 may require, including information sufficient to dem18 onstrate that the person satisfies the definition of active 

19 tobacco producer. 

20 (c) TOTAL PAYMENT AMOUNT.—

21 (1) IN GENERAL.—The Secretary of Agriculture 

22 shall determine the total amount to be paid to all ac23 tive tobacco producers under this section with re24 spect to each kind of tobacco. 
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1 (2) POUNDAGE QUOTA TOBACCO.—For each 

2 kind of tobacco for which the marketing quota is ex3 pressed in pounds, the total amount available for 

4 payments to active tobacco producers under this sec5 tion shall be equal to the product obtained by multi6 plying—

7 (A) $4 per pound; by 

8 (B) the total tobacco farm marketing 

9 quotas established under the Agriculture Ad10 justment Act of 1938 for the 1998 marketing 

11 year for that kind of tobacco. 

12 (3) MARKETING QUOTAS OTHER THAN POUND13 AGE QUOTAS.—For each kind of tobacco for which 

14 there is a marketing quota or allotment on an acre15 age basis, the Secretary shall convert the tobacco 

16 farm marketing quotas or allotments established 

17 under the Agriculture Adjustment Act of 1938 for 

18 the 1998 marketing year for that kind of tobacco to 

19 a poundage basis before executing the mathematical 

20 equation specified in paragraph (2). 

21 (d) PAYMENT QUANTITY.—

22 (1) IN GENERAL.—The Secretary of Agriculture 

23 shall determine the payment quantity of tobacco for 

24 each active tobacco producer with respect to each 

25 kind of tobacco. 
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1 (2) POUNDAGE QUOTA TOBACCO.—For each 

2 kind of tobacco for which the marketing quota is ex3 pressed in pounds, the payment quantity for an ac4 tive tobacco producer shall be equal to the average 

5 of the following: 

6 (A) The July 1 effective quota for that 

7 quota tobacco produced by the producer under 

8 the Agriculture Adjustment Act of 1938 for the 

9 2001 marketing year. 

10 (B) The marketing quota for that quota 

11 tobacco produced by the producer under the 

12 Agriculture Adjustment Act of 1938 for the 

13 2001 marketing year. 

14 (C) The July 1 effective quota for that 

15 quota tobacco produced by the producer under 

16 the Agriculture Adjustment Act of 1938 for the 

17 2002 marketing year. 

18 (3) MARKETING QUOTAS OTHER THAN POUND19 AGE QUOTAS.—For each kind of tobacco for which 

20 there is a marketing quota or allotment on an acre21 age basis, the payment quantity for an active to22 bacco producer shall be equal to the average of the 

23 actual pounds of that kind of tobacco produced by 

24 the active tobacco producer for the 2001 and 2002 

25 marketing years. 
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1 (e) PAYMENT AMOUNT.—

2 (1) ALL TOBACCO PRODUCERS.—The Secretary 

3 of Agriculture shall make payments to each active 

4 tobacco producer with respect to a kind of tobacco 

5 under this section in a total amount that bears the 

6 same ratio to the amount determined by the Sec7 retary under subsection (c) with respect to that kind 

8 of tobacco as the payment quantity of the active to9 bacco producer with respect to that kind of tobacco 

10 bears to the payment quantities of all active tobacco 

11 producers with respect to that kind of tobacco. 

12 (2) PRODUCERS WHO FORGO OBTAINING TO13 BACCO PRODUCTION LICENSE.—If an active tobacco 

14 producer who is entitled to transition payments 

15 under this section with respect to a kind of tobacco 

16 agrees to permanently forgo the opportunity to ob17 tain a tobacco production license under section 304 

18 for the same type of tobacco, the Secretary shall pay 

19 to the active tobacco producer, in addition to the 

20 amount determined under paragraph (1), an amount 

21 equal to the product obtained by multiplying—

22 (A) $2 per pound; by 

23 (B) the payment quantity of the active to24 bacco producer with respect to that kind of to25 bacco. 
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1 (f) TIME FOR PAYMENT.—The amount determined 

2 under subsection (e) for an active tobacco producer shall 

3 be paid in five equal installments during each of the 2003 

4 through 2007 crops of tobacco, except that an active to5 bacco producer who is also a quota owner with a base 

6 quota level of 1,000 pounds or less and who no longer in7 tends to engage in tobacco production may elect to receive 

8 the total amount in the first year after the date on which 

9 the agreement is signed. 

10 (g) DEATH OF ACTIVE TOBACCO PRODUCER.—If an 

11 active tobacco producer who is entitled to transition pay12 ments under this section dies and is survived by a spouse 

13 or one or more dependents, the right to receive the pay14 ments shall transfer to the surviving spouse or, if there 

15 is no surviving spouse, to the estate of the producer. 

16 SEC. 104. TOBACCO PRODUCT MANUFACTURER AND IM17 PORTER USER FEES. 

18 (a) IN GENERAL.—The Secretary of Agriculture shall 

19 assess an annual user fee, calculated in accordance with 

20 this section, upon each tobacco product manufacturer and 

21 tobacco product importer that sells tobacco products in do22 mestic commerce in the United States. The assessments 

23 shall commence during calendar year 2003, based on do24 mestic sales of tobacco products during fiscal year 2003. 
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1 (b) BASE AMOUNT OF USER FEE FOR EACH CLASS

2 OF TOBACCO PRODUCT.—

3 (1) The base amount of the user fee for ciga4 rette manufacturers and importers shall be 

5 $2,116,252,000. 

6 (2) The base amount of the user fee for small 

7 cigar manufacturers and importers shall be 

8 $1,051,000. 

9 (3) The base amount of the user fee for large 

10 cigar manufacturers and importers shall be 

11 $164,274,000. 

12 (4) The base amount of the user fee for snuff 

13 manufacturers and importers shall be $9,920,000. 

14 (5) The base amount of the user fee for chew15 ing tobacco manufacturers and importers shall be 

16 $2,275,000. 

17 (6) The base amount of the user fee for pipe to18 bacco manufacturers and importers shall be 

19 $1,505,000. 

20 (7) The base amount of the user fee for roll21 your-own tobacco manufacturers and importers shall 

22 be $3,231,000. 

23 (c) DETERMINATION OF ANNUAL USER FEE FOR

24 EACH CLASS OF TOBACCO PRODUCT.—The total user fee 

25 to be assessed upon, and paid by, the manufacturers and 
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1 importers of each class of tobacco product in each calendar 

2 year, as allocated pursuant to subsection (d), shall be the 

3 base amount for that class of tobacco product provided 

4 in subsection (b) multiplied by a fraction—

5 (1) the numerator of which is the total volume 

6 of domestic sales of that class of tobacco product in 

7 the fiscal year ending on September 30 of that cal8 endar year; and 

9 (2) the denominator of which is the total vol10 ume of domestic sales of that class of tobacco prod11 uct in fiscal year 2003. 

12 (d) ALLOCATION OF TOTAL USER FEE AMOUNTS BY

13 MARKET SHARE—

14 (1) FORMULA.—The user fee for each class of 

15 tobacco product to be paid by each manufacturer or 

16 importer of that class of tobacco product under sub17 section (a) shall be determined in each year by mul18 tiplying—

19 (A) such manufacturer’s or importer’s 

20 market share, as calculated with respect to the 

21 current calendar year, of that class of tobacco 

22 product; by 

23 (B) the total user fee amount for the cur24 rent calendar year, as determined under sub25 section (c), for that class of tobacco product.
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1 (2) MARKET SHARE DEFINED.—In this sub2 section, the term ‘‘market share’’ for each manufac3 turer or importer of a class of tobacco product for 

4 the purpose of the assessment to be calculated in the 

5 current calendar year shall be equal to that manu6 facturer’s or importer’s respective share (expressed 

7 as a decimal to the fourth place) of the total volume 

8 of domestic sales of that class of tobacco product 

9 during the calendar year immediately preceding the 

10 year of such assessment. 

11 (e) DETERMINATION OF VOLUME OF DOMESTIC

12 SALES.—

13 (1) BASED ON CERTIFIED REPORTS.—The cal14 culation of the volume of domestic sales of a class 

15 of tobacco product by a manufacturer or importer, 

16 and by all manufacturers and importers as a group, 

17 shall be made by the Secretary of Agriculture based 

18 on certified reports submitted by such manufactur19 ers and importers pursuant to subsection (f). 

20 (2) MEASUREMENT CRITERIA.—For purposes of 

21 the Secretary’s calculations under this subsection 

22 and the certifications under subsection (f), the vol23 umes of domestic sales shall be measured as follows: 

24 (A) With respect to cigarettes, in terms of 

25 the numbers of cigarettes sold. 
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1 (B) With respect to small cigars, the num2 ber of cigars weighing not more than three 

3 pounds per thousand sold. 

4 (C) With respect to large cigars, the num5 ber of cigars weighing more than three pounds 

6 per thousand sold. 

7 (D) With respect to other classes of to8 bacco products, in terms of the number of 

9 pounds, or fraction thereof, or these tobacco 

10 products sold. 

11 (f) CERTIFICATION OF VOLUME OF DOMESTIC

12 SALES.— Every manufacturer and importer of tobacco 

13 products shall submit each year a certified report to the 

14 Secretary of Agriculture setting forth for each class of to15 bacco products the total, for the prior year, of such manu16 facturer’s or importer’s domestic sales to wholesalers and 

17 retailers and directly to consumers. These certified reports 

18 must be submitted to the Secretary not later than March 

19 1 of the year after the year for which the certified report 

20 is being made. 

21 (g) TERMINATION.—The user fees imposed under 

22 this section shall terminate at the end of the fiscal year 

23 in which the Secretary of Agriculture determines that the 

24 Commodity Credit Corporation has been fully reimbursed 
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1 for all expenditures made using Commodity Credit Cor2 poration funds under this title. 

3 SEC. 105. REIMBURSEMENT OF COMMODITY CREDIT COR4 PORATION EXPENDITURES. 

5 Amounts collected by the Secretary of Agriculture 

6 under section 104 shall be used to reimburse the Com7 modity Credit Corporation for all expenditures made 

8 under this title.

9 TITLE II—TOBACCO PRICE 

10 SUPPORT 

11 SEC. 201. AVAILABILITY OF TOBACCO PRICE SUPPORT. 

12 (a) NEW APPROACH TO PRICE SUPPORT.—Section 

13 106 of the Agricultural Act of 1949 (7 U.S.C. 1445) is 

14 amended to read as follows: 

15 ‘‘SEC. 106. TOBACCO PRICE SUPPORT. 

16 ‘‘(a) PRICE SUPPORT RATE TO REFLECT COST OF

17 PRODUCTION.—

18 ‘‘(1) ESTABLISHMENT AND ANNUAL ADJUST19 MENT.—The price of each type of tobacco produced 

20 in the United States shall be supported at a rate es21 tablished by the Secretary, and adjusted annually, to 

22 reflect the costs of production for producers of that 

23 type of tobacco. 

24 ‘‘(2) DETERMINATION OF COST OF PRODUC25 TION.—The Secretary shall use the information col-
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1 lection and survey resources of the Economic Re2 search Service and National Agricultural Statistics 

3 Service of the Department of Agriculture to deter4 mine the cost of domestic tobacco production. The 

5 Economic Research Service shall reevaluate the cost6 of-production annually, based on the survey of fac7 tors used by the Economic Research Service, which 

8 shall be conducted once every five years. 

9 ‘‘(b) CONSIDERATION OF INTERNATIONAL PRICE

10 LEVELS.—In establishing the price support rate for a type 

11 of tobacco, the Secretary shall also consider the inter12 national tobacco price levels. 

13 ‘‘(c) CONSULTATION.—The Secretary shall consult 

14 with the Tobacco Advisory Board, farm organizations, 

15 producer cooperatives and associations, colleges and uni16 versities in tobacco-producing States, and other interested 

17 persons when determining the costs of tobacco production 

18 and establishing or adjusting the price support rate. 

19 ‘‘(d) DIFFERENCES IN GRADE.—The Secretary may 

20 take into consideration differences in tobacco grades when 

21 establishing or adjusting the price support rate for a type 

22 of tobacco.’’. 

23 (b) ELIMINATION OF REFERENCES TO QUOTA TO24 BACCO IN NO NET COST PROVISIONS.—(1) Section 106A 
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1 of the Agricultural Act of 1949 (7 U.S.C. 1445–1) is 

2 amended as follows: 

3 (A) In subsection (a), by striking ‘‘quota’’ each 

4 place it appears in paragraphs (4), (5), and (6). 

5 (B) By striking subsection (a)(7). 

6 (C) In subsection (d), by striking ‘‘quota’’ each 

7 place it appears in paragraphs (1), (3), and (7). 

8 (D) In subsection (e), by striking ‘‘quota’’. 

9 (2) Section 106B of the Agricultural Act of 1949 (7 

10 U.S.C. 1445–2) is amended as follows: 

11 (A) In subsection (a)(5), by striking ‘‘, for 

12 which marketing quotas are in effect or for which 

13 marketing quotas are not disapproved by pro14 ducers’’. 

15 (B) In subsection (a)(8), by striking ‘‘quota’’. 

16 (C) In subsection (d), by striking ‘‘quota’’ each 

17 place it appears in paragraphs (1)(B) and (2)(A). 

18 SEC. 202. REPEAL OF RELATED PROVISIONS. 

19 (a) PARITY PRICE SUPPORT.—Section 101 of the Ag20 ricultural Act of 1949 (7 U.S.C. 1441) is amended—

21 (1) in the first sentence of subsection (a), by 

22 striking ‘‘tobacco (except as otherwise provided here23 in), corn’’ and inserting ‘‘corn’’; 

24 (2) by striking subsection (c); 

25 (3) in subsection (d)(3)—
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1 (A) by striking ‘‘, except tobacco,’’; and 

2 (B) by striking ‘‘and no price support shall 

3 be made available for any crop of tobacco for 

4 which marketing quotas have been disapproved 

5 by producers;’’; and 

6 (4) by redesignating subsections (d) and (e) as 

7 subsection (c) and (d), respectively.

8 (b) DEFINITION OF BASIC AGRICULTURAL COM9 MODITY.—Section 408(c) of the Agricultural Act of 1949 

10 (7 U.S.C. 1428(c)) is amended by striking ‘‘tobacco,’’. 

11 SEC. 203. EFFECTIVE DATE. 

12 This title and the amendments made by this title 

13 shall apply with respect to the 2003 and subsequent to14 bacco crops. 

15 TITLE III—TOBACCO 

16 PRODUCTION LICENSES

17 SEC. 301. DEFINITIONS OF HISTORIC TOBACCO PRODUCER 

18 AND LICENSED TOBACCO PRODUCER. 

19 In this title: 

20 (1) The term ‘‘historic tobacco producer’’ 

21 means an owner, operator, landlord, tenant, or 

22 sharecropper who bore, individually or collectively, 

23 the risk of producing a crop of tobacco on a farm 

24 for the 2002 crop year. 
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1 (2) The term ‘‘licensed tobacco producer’’ 

2 means an owner, operator, landlord, tenant, or 

3 sharecropper who holds a license issued under this 

4 title—

5 (A) to plant a crop of tobacco on a farm 

6 in a specified county for the 2003 or a subse7 quent crop year; and 

8 (B) to harvest and market an authorized 

9 quantity of tobacco. 

10 SEC. 302. ANNUAL ESTIMATE OF TOBACCO PURCHASE IN11 TENTIONS. 

12 (a) ANNUAL ESTIMATE.—Not later than February 1 

13 of each calendar year, the Secretary of Agriculture shall 

14 publish in the Federal Register an estimate of the quantity 

15 in pounds of each type of tobacco necessary—

16 (1) to satisfy domestic use and export needs 

17 during the next marketing year; and 

18 (2) to maintain a reasonable reserve. 

19 (b) RULES FOR ESTIMATE.—When making an esti20 mate under subsection (a), the Secretary of Agriculture 

21 shall consider—

22 (1) the industry purchase estimates submitted 

23 under subsection (c); 

24 (2) export estimates; and 

25 (3) an appropriate reserve stock adjustment. 
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1 (c) INDUSTRY PURCHASE ESTIMATES.—Not later 

2 than December 1 of each calendar year with respect to 

3 Flue-cured tobacco, and January 15 of each calendar year 

4 with respect to Burley tobacco or other types of tobacco, 

5 each domestic manufacturer of cigarettes or other type of 

6 domestic tobacco-product manufacturer shall submit to 

7 the Secretary of Agriculture a statement, by kind, of the 

8 quantity of Flue-cured tobacco, Burley tobacco, and other 

9 types of tobacco that the manufacturer intends to pur10 chase, directly or indirectly, on the United States auction 

11 markets or from licensed tobacco producers during the 

12 next marketing year. 

13 (d) FAILURE TO SUBMIT, OR OVER-DECLARATION

14 OF, PURCHASE INTENTIONS.—If a domestic manufacturer 

15 of cigarettes or other type of domestic tobacco-product 

16 manufacturer fails to submit to the Secretary of Agri17 culture purchase intentions as required under subsection 

18 (c) for a marketing year, but subsequently purchases to19 bacco on the United States auction markets or from li20 censed tobacco producers during that marketing year, or 

21 if a domestic manufacturer of cigarettes or other type of 

22 domestic tobacco-product manufacturer over-estimates 

23 such purchase intentions by more than 5 percent, the do24 mestic manufacturer of cigarettes or other type of domes-
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1 tic tobacco-product manufacturer shall be liable for a civil 

2 penalty up to an amount determined by multiplying—

3 (1) the quantity of tobacco involved in the viola4 tion; by 

5 (2) price support rate for the type of tobacco 

6 involved in effect under section 106 of the Agri7 culture Act of 1949 at the time of the violation. 

8 (e) ENFORCEMENT.—The Secretary of Agriculture 

9 may enforce subsection (d) in the courts of the United 

10 States. 

11 (f) CONSULTATION WITH TOBACCO ADVISORY

12 BOARD.—The Secretary of Agriculture shall prepare the 

13 estimate under subsection (a) and otherwise carry out this 

14 title in consultation with the Tobacco Advisory Board ap15 pointed under title IV. 

16 SEC. 303. NATIONAL TOBACCO MARKETING FACTOR. 

17 The national marketing factor for a type of tobacco 

18 for a crop year shall be the ratio of—

19 (1) the aggregate quantity of that type of to20 bacco estimated by the Secretary of Agriculture 

21 under section 302 to be necessary to satisfy domes22 tic consumption and exports of tobacco for the cor23 responding marketing year; to 
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1 (2) the estimated aggregate quantity of that 

2 type of tobacco to be produced in the United States 

3 for that year. 

4 SEC. 304. ISSUANCE OF TOBACCO PRODUCTION LICENSES. 

5 (a) INITIAL ISSUANCE TO HISTORIC TOBACCO PRO6 DUCERS.—

7 (1) ISSUANCE.—

8 (A) ISSUANCE REQUIRED.—As soon as 

9 practicable after the date of the enactment of 

10 this Act, the Secretary of Agriculture shall 

11 issue to each historic tobacco producer a to12 bacco production license for the purpose of en13 suring sufficient production of each type of to14 bacco to satisfy annual purchase intentions for 

15 that type of tobacco estimated under section 

16 302, but also preventing over-production of that 

17 type of tobacco. 

18 (B) EXCEPTION.—The Secretary shall not 

19 issue a tobacco production license to an historic 

20 tobacco producer with respect to a kind of to21 bacco if the historic tobacco producer agreed 

22 under subsection (e) of section 103 to perma23 nently forgo the tobacco production license for 

24 that type of tobacco in exchange for additional 

25 transition payments under such section.
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1 (2) TOBACCO PRODUCTION HISTORY.—The to2 bacco production license issued to an historic to3 bacco producer under paragraph (1) shall specify the 

4 tobacco production history of the producer for each 

5 type of tobacco for each county in which the pro6 ducer bore, individually or collectively, the risk of 

7 producing a crop of tobacco on a farm in the county 

8 for the 2002 crop year. In the case of an historic to9 bacco producer who bore 100 percent of the risk of 

10 producing a type of tobacco on a farm for the 2002 

11 crop year, the tobacco production history of the his12 toric tobacco producer for that type of tobacco in a 

13 county shall be equal to the 2002 marketing and ef14 fective quota of that type tobacco produced by the 

15 producer in the county for commercial use during 

16 the 2002 crop year. In the case of an historic to17 bacco producer who bore less than 100 percent of 

18 the risk of production, the Secretary of Agriculture 

19 shall adjust the tobacco production history to reflect 

20 the percentage of risk that was borne by the pro21 ducer. 

22 (3) ADJUSTMENT AUTHORITY.—An historic to23 bacco producer may petition the Secretary of Agri24 culture to increase the tobacco production history 

25 determined under paragraph (2) for the producer for 
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•HR 245 IH 

1 a type of tobacco on the grounds that the producer’s 

2 2002 production under-represents the producer’s 

3 historic production of that type of tobacco. 

4 (4) CONSOLIDATION OF COUNTIES.—If the ini5 tial issuance of a tobacco production license to an 

6 historic tobacco producer for a type of tobacco would 

7 result in the producer receiving a license for that 

8 type of tobacco for more than one county, the pro9 ducer may elect to consolidate the licenses in a sin10 gle county in which the producer bore or shared in 

11 the risk of producing a crop of that type of tobacco 

12 for the 2002 crop year. The option to make this 

13 election shall be provided only once. 

14 (b) SUBSEQUENT ISSUANCE.—

15 (1) IN GENERAL.—If a tobacco production li16 cense is surrendered or revoked, the Secretary of 

17 Agriculture shall transfer the license and the cor18 responding tobacco production history to beginning 

19 tobacco producers or licensed tobacco producers in 

20 the following order of preference: 

21 (A) Producers in the same county as the 

22 county in which the tobacco production history 

23 was derived. 

24 (B) Producers in the same State. 
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1 (C) Producers in counties in other States 

2 in which licensed tobacco producers are oper3 ating. 

4 (2) RESERVATION FOR BEGINNING PRO5 DUCERS.—In all instances specified in subpara6 graphs (A), (B), and (C) of paragraph (1), the Sec7 retary shall reserve for beginning tobacco producers 

8 at least five percent of the tobacco production his9 tory surrendered or revoked under this section. 

10 (3) PRODUCERS WHO FORGO OBTAINING TO11 BACCO PRODUCTION LICENSE.—The tobacco produc12 tion history of those historic tobacco producers who 

13 agree under section 103(e) to permanently forgo the 

14 opportunity to obtain a tobacco production license 

15 under subsection (a) shall also be available to the 

16 Secretary for distribution as provided in paragraph 

17 (1). 

18 (c) LIMITATIONS ON USE OF LICENSE.—

19 (1) IN GENERAL.—A tobacco production license 

20 specifying a particular type of tobacco and the coun21 ty in which that type of tobacco may be grown may 

22 not be used as the basis to grow a different type of 

23 tobacco or to grow that type of tobacco in a different 

24 county. 
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1 (2) REVOCATION.—Any use of a tobacco pro2 duction license contrary to this subsection shall re3 sult in the revocation of the license. 

4 (d) LIMITATIONS ON SALE, LEASE, OR TRANSFER OF

5 LICENSE.—

6 (1) SALE PROHIBITED.—A tobacco production 

7 license and the corresponding tobacco production 

8 history may not be sold or leased. 

9 (2) TRANSFER UNDER LIMITED CIR10 CUMSTANCES.—A licensed tobacco producer may not 

11 transfer a tobacco production license and the cor12 responding tobacco production history unless—

13 (A) in the case of a licensed tobacco pro14 ducer who is in a partnership, the transfer is 

15 among the partners; or 

16 (B) in the case of a licensed tobacco pro17 ducer who is an individual, the transfer is made 

18 to the spouse, parent, brother, sister, or natural 

19 or adopted child of the licensed tobacco pro20 ducer. 

21 (3) REVOCATION.—Any sale, lease, or transfer 

22 of a tobacco production license or the corresponding 

23 tobacco production history contrary to this sub24 section shall result in the revocation of the license. 
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1 (e) SURRENDER OR REVOCATION OF LICENSE FOR

2 NON-USE.—

3 (1) SURRENDER.—A licensed tobacco producer 

4 may surrender a tobacco production license and the 

5 corresponding tobacco production history to the Sec6 retary of Agriculture at any time. 

7 (2) REVOCATION.—The Secretary of Agri8 culture shall revoke the tobacco production license 

9 and the corresponding tobacco production history of 

10 a licensed tobacco producer if the licensed tobacco 

11 producer—

12 (A) fails to share, individually or collec13 tively, in 100 percent of the risk of producing 

14 a crop of tobacco of the type specified in the to15 bacco production license for any year; or 

16 (B) fails to produce at least 75 percent of 

17 the quantity of that type of tobacco specified in 

18 the tobacco production license for two out of 

19 three years, unless that Secretary determines 

20 the failure was due to damaging weather or re21 lated condition. 

22 (3) ANNUAL MONITORING OF RISK.—The Sec23 retary of Agriculture, acting through the Farm Serv24 ice Agency, shall monitor at least five percent of all 

25 licensed tobacco producers annually to ensure that
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•HR 245 IH 

1 the producers comply with the risk-sharing require2 ments of paragraph (2). The licensed tobacco pro3 ducers to be monitored in a given crop year under 

4 the authority of this paragraph shall be selected at 

5 random. Nothing in this paragraph prevents the 

6 Secretary from instituting an investigation of a spe7 cific licensed tobacco producer if the Secretary has 

8 reasonable cause to believe the producer is not com9 plying with such risk-sharing requirements. 

10 SEC. 305. ANNUAL AUTHORIZED TOBACCO PRODUCTION 

11 UNDER TOBACCO PRODUCTION LICENSES. 

12 (a) NOTIFICATION OF LICENSED TOBACCO PRO13 DUCERS.—As soon as practicable after preparing the esti14 mate required by section 302 for a type of tobacco for 

15 a marketing year, the Secretary of Agriculture shall notify 

16 each licensed tobacco producer of that type of tobacco of 

17 the authorized quantity of tobacco that the producer may 

18 produce in a county in the corresponding crop year under 

19 the tobacco production license. 

20 (b) DETERMINATION OF AUTHORIZED PRODUCTION

21 LEVELS.—The authorized tobacco production level for a 

22 licensed tobacco producer for a type of tobacco in a county 

23 for a crop year is equal to the product of—

24 (1) the tobacco production history of the pro25 ducer for that type of tobacco in that county; and 
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1 (2) the national tobacco marketing factor for 

2 that year determined by the Secretary of Agriculture 

3 under section 303. 

4 (c) EXCESS PRODUCTION.—Except as provided in 

5 subsection (e), if a licensed tobacco producer harvests and 

6 markets tobacco in excess of the quantity specified in the 

7 producer’s tobacco production license or any other person 

8 produces tobacco without a tobacco production license, the 

9 licensed tobacco producer or other person shall be liable 

10 for a civil penalty up to an amount determined by multi11 plying—

12 (1) the quantity of tobacco involved in the viola13 tion; by 

14 (2) price support rate for the type of tobacco 

15 involved in effect under section 106 of the Agri16 culture Act of 1949 at the time of the violation. 

17 (d) ENFORCEMENT.—The Secretary of Agriculture 

18 may enforce subsection (c) in the courts of the United 

19 States. 

20 (e) LIMITED AUTHORITY TO EXCEED LICENSE.—If 

21 the Tobacco Advisory Board notifies the Secretary of Agri22 culture that the actual production of a type of tobacco for 

23 a crop year will be less than 80 percent of the production 

24 authorized under all licenses issued for that type of to25 bacco, the Secretary may authorize a licensed tobacco pro-
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•HR 245 IH 

1 ducer of that type of tobacco to harvest and market to2 bacco in excess of the quantity specified in the producer’s 

3 tobacco production license. The Secretary shall establish 

4 a mechanism under which a licensed tobacco producer may 

5 apply for the authority to exceed the quantity specified 

6 in the producer’s license. 

7 SEC. 306. ASSESSMENT ON LICENSED TOBACCO PRO8 DUCERS FOR ADMINISTRATIVE COSTS. 

9 (a) ASSESSMENT.—Effective for the 2003 and subse10 quent marketing years for each type of tobacco covered 

11 by this title, each licensed tobacco producer shall remit 

12 to the Secretary a nonrefundable marketing assessment 

13 in an amount determined by the Secretary that, in the 

14 aggregate, will cover all administrative expenses incurred 

15 by the Secretary and the Corporation in carrying out this 

16 title. 

17 (b) LIMITATION.—The amount of the assessment im18 posed under this section shall not exceed 1 cent for each 

19 pound of covered tobacco produced. 

20 SEC. 307. TERMINATION OF MARKETING QUOTA PROGRAMS 

21 AND REPEAL OF RELATED PROVISIONS. 

22 (a) TOBACCO CONTROL ACT.—The Act of April 25, 

23 1936 (commonly known as the Tobacco Control Act; 7 

24 U.S.C. 515–515k), is repealed. 
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1 (b) COMMODITY HANDLING ORDERS.—Section 8c(2) 

2 of the Agricultural Adjustment Act (7 U.S.C. 608c(2)), 

3 reenacted with amendments by the Agricultural Marketing 

4 Agreement Act of 1937, is amended by striking ‘‘to5 bacco,’’. 

6 (c) PROCESSING TAX.—Section 9(b) of the Agricul7 tural Adjustment Act (7 U.S.C. 609(b)), reenacted with 

8 amendments by the Agricultural Marketing Agreement 

9 Act of 1937, is amended—

10 (1) in paragraph (2), by striking ‘‘tobacco,’’; 

11 and 

12 (2) in paragraph (6)(B)(i), by striking ‘‘, or, in 

13 the case of tobacco, is less than the fair exchange 

14 value by not more than 10 per centum,’’. 

15 (d) BURLEY TOBACCO IMPORT REVIEW.—Section 3 

16 of Public Law 98–59 (7 U.S.C. 625) is repealed. 

17 (e) DECLARATION OF POLICY.—Section 2 of the Ag18 ricultural Adjustment Act of 1938 (7 U.S.C. 1282) is 

19 amended by striking ‘‘tobacco,’’. 

20 (f) DEFINITIONS.—Section 301(b) of the Agricultural 

21 Adjustment Act of 1938 (7 U.S.C. 1301(b)) is amended—

22 (1) in paragraph (3)—

23 (A) by striking subparagraph (C); and 

24 (B) by redesignating subparagraph (D) as 

25 subparagraph (C); 
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•HR 245 IH 

1 (2) in paragraph (6)(A), by striking ‘‘tobacco,’’; 

2 (3) in paragraph (7), by striking the following: 

3 ‘‘Tobacco (flue-cured), July 1-June 30; 

4 Tobacco (other than flue-cured), October 1-Sep5 tember 30);’’

6 (4) in paragraph (10)—

7 (A) by striking subparagraph (B); and 

8 (B) by redesignating subparagraph (C) as 

9 subparagraph (B); 

10 (5) in paragraph (11)(B), by striking ‘‘and to11 bacco’’; 

12 (6) in paragraph (12), by striking ‘‘tobacco,’’; 

13 (7) in paragraph (14)—

14 (A) by striking ‘‘(A)’’ in subparagraph (A); 

15 and 

16 (B) by striking subparagraphs (B), (C), 

17 and (D); 

18 (8) by striking paragraph (15); 

19 (9) in paragraph (16)—

20 (A) by striking subparagraph (B); and 

21 (B) by redesignating subparagraph (C) as 

22 subparagraph (B); 

23 (10) by striking paragraph (17); and 

24 (11) by redesignating paragraph (16) as para25 graph (15).
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•HR 245 IH 

1 (g) PARITY PAYMENTS.—Section 303 of the Agricul2 tural Adjustment Act of 1938 (7 U.S.C. 1303) is amended 

3 in the first sentence by striking ‘‘rice, or tobacco’’ and 

4 inserting ‘‘or rice’’. 

5 (h) MARKETING QUOTAS.—Part I of subtitle B of 

6 title III of the Agricultural Adjustment Act of 1938 (7 

7 U.S.C. 1311 et seq.) is repealed. 

8 (i) ADMINISTRATIVE PROVISIONS.—Section 361 of 

9 the Agricultural Adjustment Act of 1938 (7 U.S.C. 1361) 

10 is amended by striking ‘‘tobacco,’’. 

11 (j) ADJUSTMENT OF QUOTAS.—Section 371 of the 

12 Agricultural Adjustment Act of 1938 (7 U.S.C. 1371) is 

13 amended—

14 (1) in the first sentence of subsection (a) by 

15 striking ‘‘, rice, or tobacco’’ and inserting ‘‘or rice’’; 

16 and 

17 (2) in the first sentence of subsection (b), by 

18 striking ‘‘, rice, or tobacco’’ and inserting ‘‘or rice’’. 

19 (k) REPORTS AND RECORDS.—Section 373 of the Ag20 ricultural Adjustment Act of 1938 (7 U.S.C. 1373) is 

21 amended—

22 (1) by striking ‘‘rice, or tobacco’’ each place it 

23 appears in subsections (a) and (b) and inserting ‘‘or 

24 rice’’; and 

25 (2) in subsection (a)—
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•HR 245 IH 

1 (A) in the first sentence by striking ‘‘all 

2 persons engaged in the business of redrying, 

3 prizing, or stemming tobacco for producers,’’; 

4 and 

5 (B) in the last sentence by striking ‘‘$500’’ 

6 and all that follows through the period at the 

7 end of the sentence and inserting ‘‘$500.’’. 

8 (l) REGULATIONS.—Section 375(a) of the Agricul9 tural Adjustment Act of 1938 (7 U.S.C. 1375(a)) is 

10 amended by striking ‘‘peanuts, or tobacco’’ and inserting 

11 ‘‘or peanuts’’. 

12 (m) EMINENT DOMAIN.—Section 378 of the Agricul13 tural Adjustment Act of 1938 (7 U.S.C. 1378) is amend14 ed—

15 (1) in the first sentence of subsection (c) by 

16 striking ‘‘and tobacco’’ and inserting ‘‘cotton’’; and 

17 (2) by striking subsections (d), (e), and (f). 

18 (n) BURLEY TOBACCO FARM RECONSTITUTION.—

19 Section 379 of the Agricultural Adjustment Act of 1938 

20 (7 U.S.C. 1379) is amended—

21 (1) in subsection (a)—

22 (A) by striking ‘‘(a)’’; and 

23 (B) in paragraph (6) by striking ‘‘, but 

24 this clause (6) shall not be applicable in the 

25 case of burley tobacco’’; and 
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•HR 245 IH 

1 (2) by striking subsections (b) and (c). 

2 (o) ACREAGE-POUNDAGE QUOTAS.—Section 4 of the 

3 Act of April 16, 1955 (Public Law 89–12; 7 U.S.C. 1314c 

4 note), is repealed. 

5 (p) BURLEY TOBACCO ACREAGE ALLOTMENTS.—

6 The Act of July 12, 1952 (7 U.S.C. 1315), is repealed. 

7 (q) TRANSFER OF ALLOTMENTS.—Section 703 of the 

8 Food and Agriculture Act of 1965 (7 U.S.C. 1316) is re9 pealed. 

10 (r) ADVANCE RECOURSE LOANS.—Section 

11 13(a)(2)(B) of the Food Security Improvements Act of 

12 1986 (7 U.S.C. 1433c–1(a)(2)(B)) is amended by striking 

13 ‘‘tobacco and’’. 

14 (s) TOBACCO FIELD MEASUREMENT.—Section 1112 

15 of the Omnibus Budget Reconciliation Act of 1987 (Public 

16 Law 100–203) is amended by striking subsection (c). 

17 (t) LIABILITY.—The amendments made by this sec18 tion shall not affect the liability of any person under any 

19 provision of law in effect before the amendments take ef20 fect as provided under subsection (u). 

21 SEC. 308. EFFECTIVE DATE. 

22 This title and the amendments made by this title 

23 shall apply with respect to the 2003 and subsequent to24 bacco crops. 
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•HR 245 IH 

1 TITLE IV—TOBACCO ADVISORY 

2 BOARD 

3 SEC. 401. ESTABLISHMENT AND DUTIES OF TOBACCO ADVI4 SORY BOARD. 

5 (a) ESTABLISHMENT.—The Secretary of Agriculture 

6 shall establish a permanent advisory board in the Depart7 ment of Agriculture to be known as the Tobacco Advisory 

8 Board. 

9 (b) MEMBERS.—The Tobacco Advisory Board shall 

10 consist of 12 appointed by the Secretary of Agriculture 

11 as follows: 

12 (1) Three licensed tobacco producers of Flue13 cured tobacco. 

14 (2) Three licensed tobacco producers of Burley 

15 tobacco. 

16 (3) One licensed tobacco producer of dark-type 

17 tobacco. 

18 (4) One representative of United States ciga19 rette manufacturers. 

20 (5) One representative of United States moist 

21 snuff manufacturers. 

22 (6) One dealer. 

23 (7) One representative of Flue-cured tobacco 

24 marketing facilities. 
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•HR 245 IH 

1 (8) One representative of Burley tobacco mar2 keting facilities. 

3 (c) NON-VOTING MEMBERS.—The Tobacco Advisory 

4 Board shall also have the following non-voting members: 

5 (1) The Secretary of Agriculture, or an officer 

6 or employee of the Department of Agriculture. 

7 (2) A tobacco analyst of the Department of Ag8 riculture, appointed by the Secretary of Agriculture. 

9 (3) The United States Trade Representative, or 

10 the designee of the United States Trade Representa11 tive. 

12 (4) One representative from a college or univer13 sity in a predominately Flue-cured tobacco pro14 ducing State. 

15 (5) One representative from a college or univer16 sity in a predominately Burley tobacco producing 

17 State. 

18 (d) DUTIES.—The Tobacco Advisory Board shall be 

19 responsible for—

20 (1) making recommendations for modifications 

21 of the tobacco price support program under section 

22 106 of the Agriculture Act of 1949;

23 (2) making recommendations for modifications 

24 of the tobacco production license program under title 

25 III;
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•HR 245 IH 

1 (3) determining adequate reserve stock levels 

2 for each type of tobacco; 

3 (4) conducting oversight regarding tobacco mar4 keting issues, such as opening sales dates, marketing 

5 regulations, and grading fees; and 

6 (5) making recommendations regarding a sim7 plification and reform of the grading system for to8 bacco, which the Secretary of Agriculture is author9 ized to implement.

10 TITLE V—ASSISTANCE TO TO11 BACCO-DEPENDENT COMMU12 NITIES 

13 SEC. 501. CENTER FOR TOBACCO-DEPENDENT COMMU14 NITIES. 

15 (a) FINDINGS.—The Congress finds the following: 

16 (1) The economies of many local communities 

17 are dependent on tobacco production. 

18 (2) Many tobacco-producing communities are 

19 facing significant challenges in developing non-to20 bacco income, and remain therefore quite dependent 

21 on tobacco and vulnerable to changes in the tobacco22 growing industry. 

23 (3) Greater analysis and study is needed of eco24 nomic conditions in these communities in order to 

25 gain critical information, including identification of 
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•HR 245 IH 

1 the interconnections among various tobacco-related 

2 activities, the degree to which the economic base of 

3 these communities is diversified, and the extent to 

4 which these communities are dependent on other de5 clining economic sectors. 

6 (b) CORPORATION ESTABLISHED.—There is author7 ized to be established a nonprofit corporation, to be known 

8 as the ‘‘Center for Tobacco-Dependent Communities’’, 

9 which will not be an agency or establishment of the United 

10 States Government. The Center shall be subject to the 

11 provisions of this section, and (to the extent consistent 

12 with this section) to the laws and regulations applicable 

13 to nonprofit corporations in the State in which the cor14 poration is established. 

15 (c) BOARD OF DIRECTORS.—

16 (1) The Center shall have a Board of Directors 

17 consisting of 7 members. Six of the members of the 

18 Board shall be appointed by the President, by and 

19 with the advice and consent of the Senate, and such 

20 members shall appoint the Center’s Executive Direc21 tor, who shall also be a member of the Board. No 

22 more than 3 of the 6 members appointed by the 

23 President may be members of the same political 

24 party. 
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1 (2) The 6 members of the Board appointed by 

2 the President shall be citizens of the United States 

3 who have knowledge and experience regarding the 

4 matters for which the Center is responsible, and who 

5 are eminent in issues related to rural development 

6 (including small-crop agriculture; entrepreneurial ac7 tivity; and industrial, small business and community 

8 development). 

9 (3) The members of the initial Board of Direc10 tors shall serve as incorporators and shall take what11 ever actions are necessary to establish the Center. 

12 (4) The term of office of each member of the 

13 Board appointed by the President shall be 4 years, 

14 except that of the members initially so appointed, 3 

15 members shall serve for a 2-year term. Any member 

16 whose term has expired may serve until such mem17 ber’s successor has taken office, or until the end of 

18 the calendar year in which such member’s term has 

19 expired, whichever is earlier. Any member appointed 

20 to fill a vacancy occurring prior to the expiration of 

21 the term for which such member’s predecessor was 

22 appointed shall be appointed for the remainder of 

23 such term. No member of the Board shall be eligible 

24 to serve in excess of 2 consecutive full terms. 
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•HR 245 IH 

1 (5) Any vacancy in the Board shall not affect 

2 its power, but shall be filled in the manner con3 sistent with this section. 

4 (6) Members of the Board shall attend not less 

5 than 50 percent of all duly convened meetings of the 

6 Board in any calendar year. A member who fails to 

7 meet the requirement of the preceding sentence shall 

8 forfeit membership, and the President shall appoint 

9 a new member to fill such vacancy not later than 30 

10 days after such vacancy is determined by the Chair11 man of the Board. 

12 (7) Members of the Board shall annually elect 

13 1 of their members to be Chair and elect 1 or more 

14 of their members as a Vice Chair or Chairs. The 

15 members of the Board shall not, by reason of such 

16 membership, be officers or employees of the United 

17 States. Members of the Board shall, while attending 

18 meetings of the Board or while engaged in duties re19 lated to such meetings or other activities of the 

20 Board pursuant to this section, be entitled to receive 

21 compensation at the rate of $150 per day, including 

22 traveltime. No Board member shall receive com23 pensation of more than $10,000 in any fiscal year. 

24 While away from their homes or regular places of 
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•HR 245 IH 

1 business, Board members shall be allowed travel and 

2 actual, reasonable, and necessary expenses. 

3 (8) All meetings of the Board, including any 

4 committee of the Board, shall be open to the public. 

5 (d) OFFICERS AND EMPLOYEES.—

6 (1) The Center shall have a President, and such 

7 other officers as may be named and appointed by 

8 the Board for terms and at rates of compensation 

9 fixed by the Board. No officer or employee of the 

10 Corporation may be compensated by the Corporation 

11 at an annual rate of pay which exceeds the rate of 

12 basic pay in effect from time to time for level I of 

13 the Executive Schedule under section 5312 of title 

14 5, United States Code. No individual other than a 

15 citizen of the United States may be an officer of the 

16 Center. No officer of the Center, other than the 

17 Chair or a Vice Chair, may receive any salary or 

18 other compensation (except for compensation for 

19 services on boards of directors of other organizations 

20 that do not receive funds from the Center, on com21 mittees of such boards, and in similar activities for 

22 such organizations) from any sources other than the 

23 Center for services rendered during the period of his 

24 or her employment by the Center. Service by any of25 ficer on boards of directors of other organizations,
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•HR 245 IH 

1 on committees of such boards, and in similar activi2 ties for such organizations shall be subject to annual 

3 advance approval by the Board and subject to the 

4 provisions of the Center’s Statement of Ethical Con5 duct. All officers shall serve at the pleasure of the 

6 Board. 

7 (2) Except as provided in subsection (c)(1), no 

8 political test or qualification shall be used in select9 ing, appointing, promoting, or taking other per10 sonnel actions with respect to officers, agents, and 

11 employees of the Center. 

12 (e) NONPROFIT AND NONPOLITICAL NATURE OF THE

13 CENTER.—

14 (1) The Center shall have no power to issue any 

15 shares of stock, or to declare or pay any dividends. 

16 (2) No part of the income or assets of the Cen17 ter shall inure to the benefit of any director, officer, 

18 employee, or any other individual except as salary or 

19 reasonable compensation for services. 

20 (3) The Center may not contribute to or other21 wise support any political party or candidate for 

22 elective public office. 

23 (f) PURPOSES AND ACTIVITIES OF THE CENTER.—

24 (1) In order to achieve the objectives and to 

25 carry out the purposes of this section, the Center 
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•HR 245 IH 

1 shall provide economic and community development 

2 assistance for tobacco communities to assist them in 

3 making the transition from tobacco-based economies. 

4 The primary activities of the Center shall be agricul5 tural and entrepreneurial, and shall include outreach 

6 and education to tobacco quota owners, growers and 

7 others (including small communities) with limited 

8 ability to obtain access to current economic develop9 ment resources. In particular, the Center shall pro10 vide assistance to tobacco-producing communities 

11 identified by the Economic Research Service within 

12 the Department, with emphasis on those commu13 nities that are especially dependent on tobacco pro14 duction for the generation of revenue. 

15 (2) The Center is authorized to—

16 (A) provide communities and producers 

17 with targeted technical assistance; 

18 (B) convene meetings and conduct work19 shops and conferences; 

20 (C) serve as a clearinghouse for exchange 

21 of information regarding best industry prac22 tices; 

23 (D) provide research and policy develop24 ment activities; 
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•HR 245 IH 

1 (E) serve as an advocate for communities 

2 making the transition from tobacco-based 

3 economies; 

4 (F) make grants to individuals or entities, 

5 including challenge grants, community mini6 grants, technical assistance grants and grants 

7 for pilot projects and demonstrations; 

8 (G) hire or accept the voluntary services of 

9 consultants, experts, advisory boards, and pan10 els to aid the Center in carrying out the pur11 poses of this section; 

12 (H) accept bequests, donations, and other 

13 forms of assistance; and 

14 (I) take such other actions as may be nec15 essary to accomplish the purposes set forth in 

16 this section. 

17 (3) Nothing contained in paragraph (2) shall be 

18 construed to commit the Federal Government to pro19 vide any sums for the payment of any obligation of 

20 the Center. 

21 (4) To carry out the foregoing purposes and en22 gage in the foregoing activities, the Center shall 

23 have the usual powers conferred upon a nonprofit 

24 corporation by applicable laws and regulations of the 

25 State in which the corporation is established, except 
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•HR 245 IH 

1 that the Center is prohibited from owning or oper2 ating any tobacco-related interest. 

3 (g) ANNUAL REPORT.—

4 (1) The Center shall submit an annual report 

5 for the preceding fiscal year ending September 30 to 

6 the President for transmittal to the Congress on or 

7 before the 15th day of May of each year. The report 

8 shall include—

9 (A) a comprehensive and detailed report of 

10 the Center’s operations, activities, financial con11 dition, and accomplishments under this section 

12 and such recommendations as the Center con13 siders appropriate; and 

14 (B) a listing of each organization that re15 ceives a grant from the Center, the purpose of 

16 such grant, and the amount of each such grant. 

17 (2) The officers and directors of the Center 

18 shall be available to testify before appropriate com19 mittees of the Congress with respect to such report, 

20 the report of any audit made by the Comptroller 

21 General of the United States pursuant to this sec22 tion, or any other matter which such committees 

23 may determine.

24 (h) AUTHORIZATION OF APPROPRIATIONS.—There is 

25 authorized to be appropriated to the Secretary of Agri-
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•HR 245 IH 

1 culture, from funds derived from the user fees imposed 

2 under section 104, $5,000,000 for each of the fiscal years 

3 2003 through 2013 to provide funds for the operations 

4 and activities of the Center. Funds so appropriated shall 

5 remain available until expended. The Corporation shall es6 tablish an annual budget for use in allocating amounts 

7 made available to the Center under this section. 

8 (i) FINANCIAL MANAGEMENT AND RECORDS.—

9 (1)(A) The accounts of the Center shall be au10 dited annually in accordance with generally accepted 

11 auditing standards by independent certified public 

12 accountants or independent licensed public account13 ants certified or licensed by a regulatory authority of 

14 a State or other political subdivision of the United 

15 States. The audits shall be conducted at the place or 

16 places where the accounts of the Center are normally 

17 kept. All books, accounts, financial records, reports, 

18 files, and all other papers, things, or property be19 longing to or in use by the Center and necessary to 

20 facilitate the audits shall be made available to the 

21 person or persons conducting the audits; and full fa22 cilities for verifying transactions with the balances 

23 or securities held by depositories, fiscal agents and 

24 custodians shall be afforded to such person or per25 sons.
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1 (B) The report of each such independent audit 

2 shall be included in the annual report required by 

3 this subsection. The audit report shall set forth the 

4 scope of the audit and include such statements as 

5 are necessary to present fairly the Center’s assets 

6 and liabilities, surplus or deficit, with an analysis of 

7 the changes therein during the year, supplemented 

8 in reasonable detail by a statement of the Center’s 

9 expenses during the year, and a statement of the 

10 sources and application of funds, together with the 

11 independent auditor’s opinion of such statements. 

12 (2)(A) The financial transactions of the Center 

13 for any fiscal year during which Federal funds are 

14 available to finance any portion of its operations 

15 may be audited by the General Accounting Office in 

16 accordance with the principles and procedures appli17 cable to commercial corporate transactions and 

18 under such rules and regulations as may be pre19 scribed by the Comptroller General of the United 

20 States. Any such audit shall be conducted at the 

21 place or places where accounts of the Center are 

22 normally kept. The representative of the General Ac23 counting Office shall have access to all books, ac24 counts, records, reports, files, and all other papers, 

25 things, or property belonging to or in use by the 
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1 Center pertaining to its financial transactions and 

2 necessary to facilitate the audit, and they shall be 

3 afforded full facilities for verifying transactions with 

4 the balances or securities held by depositories, fiscal 

5 agents, and custodians. All such books, accounts, 

6 records, reports, files, papers and property of the 

7 Center shall remain in possession and custody of the 

8 Center. 

9 (B) A report of each such audit shall be made 

10 by the Comptroller General to the Congress. The re11 port to the Congress shall contain such comments 

12 and information as the Comptroller General may 

13 deem necessary to inform Congress of the financial 

14 operations and condition of the Center, together 

15 with such recommendations with respect thereto as 

16 the Comptroller General may consider advisable. The 

17 report shall also show specifically any program, ex18 penditure, or other financial transaction or under19 taking observed in the course of the audit, which, in 

20 the opinion of the Comptroller General, has been 

21 carried on or made without authority of law. A copy 

22 of each report shall be furnished to the President, to 

23 the Secretary, and to the Center at the time sub24 mitted to the Congress. 
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1 (3)(A) Not later than 1 year after the date of 

2 enactment of this Act, the Center, in consultation 

3 with the Comptroller General, and as appropriate 

4 with others, shall develop accounting principles 

5 which shall be used uniformly by all individuals and 

6 entities receiving funds under this section, taking 

7 into account organizational differences among var8 ious categories of such entities. Such principles shall 

9 be designed to account fully for all funds received 

10 and expended by such entities under this section. 

11 (B) Each individual and entity receiving funds 

12 under this section shall be required—

13 (i) to keep its books, records, and accounts 

14 in such form as may be required by the Center; 

15 (ii)(I) to undergo a biennial audit by inde16 pendent certified public accountants or inde17 pendent licensed public accountants certified or 

18 licensed by a regulatory authority of a State, 

19 which audit shall be in accordance with auditing 

20 standards developed by the Center, in consulta21 tion with the Comptroller General; or 

22 (II) to submit a financial statement in lieu 

23 of the audit required by subclause (I) if the 

24 Center determines that the cost burden of such 
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1 audit on such entity is excessive in light of the 

2 financial condition of such entity; and 

3 (iii) to furnish biennially to the Center a 

4 copy of the audit report required pursuant to 

5 clause (ii), as well as such other information re6 garding finances (including an annual financial 

7 report) as the Center may require. 

8 (C) Any recipient of assistance by grant 

9 under this section shall keep such records as 

10 may be reasonably necessary to disclose fully 

11 the amount and the disposition by such recipi12 ent of such assistance, the total cost of the 

13 project or undertaking in connection with which 

14 such assistance is given or used, and the 

15 amount and nature of that portion of the cost 

16 of the project or undertaking supplied by other 

17 sources, and such other records as will facilitate 

18 an effective audit. 

19 (D) The Center or any of its duly author20 ized representatives shall have access to any 

21 books, documents, papers, and records of any 

22 recipient of assistance for the purpose of audit23 ing and examining all funds received or ex24 pended by the recipient under this section. The 

25 Comptroller General of the United States or 
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1 any duly authorized representatives of the 

2 Comptroller General also shall have access to 

3 such books, documents, papers, and records for 

4 the purpose of auditing and examining all funds 

5 received or expended under this section during 

6 any fiscal year for which Federal funds are 

7 available to the Center. 

8 (4) The Center shall maintain the information 

9 described in paragraph (3) at its offices for public 

10 inspection and copying for at least 3 years, accord11 ing to such reasonable guidelines as the Center may 

12 issue. This public file shall be updated regularly.

Æ