I 

108TH CONGRESS 

1ST SESSION H. R. 3160

To eliminate the Federal quota and price support programs for tobacco, 

to provide transitional assistance to tobacco quota holders and traditional 

producers of tobacco affected by the elimination of these programs, 

to ensure the future quality and availability of United States-grown 

tobacco, to protect against the disruption of tobacco markets, to establish 

a trust fund to finance this Act, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 24, 2003

Mr. FLETCHER (for himself, Mr. MCINTYRE, Mr. GOODE, Mr. ETHERIDGE, 

Mr. BALLANCE, Mr. BALLENGER, Mr. BARRETT of South Carolina, Mr. 

BISHOP of Georgia, Mrs. BLACKBURN, Mr. BOUCHER, Mr. BOYD, Mr. 

BROWN of South Carolina, Mr. CLYBURN, Mr. COLLINS, Mr. COOPER, 

Mr. DAVIS of Tennessee, Mr. TOM DAVIS of Virginia, Mr. DEMINT, Mr. 

GORDON, Mr. HAYES, Mr. HILL, Mr. KINGSTON, Mr. LEWIS of Kentucky, Mr. LUCAS of Kentucky, Mr. MARSHALL, Mr. MILLER of North 

Carolina, Mr. NORWOOD, Mr. PETERSON of Minnesota, Mr. PRICE of 

North Carolina, Mr. ROGERS of Kentucky, Mr. SCOTT of Georgia, Mr. 

SPRATT, Mr. THOMPSON of Mississippi, Mr. WAMP, Mr. WHITFIELD, Mr. 

WILSON of South Carolina, Mr. DUNCAN, Mr. MURTHA, and Mr. 

ISAKSON) introduced the following bill; which was referred to the Committee on Agriculture 

A BILL

To eliminate the Federal quota and price support programs 

for tobacco, to provide transitional assistance to tobacco 

quota holders and traditional producers of tobacco affected by the elimination of these programs, to ensure 

the future quality and availability of United States-grown 

tobacco, to protect against the disruption of tobacco mar-
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kets, to establish a trust fund to finance this Act, 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, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

5 ‘‘Tobacco Reduction, Accountability, and Community En6 hancement Act of 2003’’. 

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

8 this Act is as follows:

Sec. 1. Short title; table of contents. 

Sec. 2. Termination of tobacco production adjustment programs. 

Sec. 3. Termination of tobacco price support program. 

Sec. 4. Liability. 

Sec. 5. Replacement tobacco assistance programs. 

Sec. 6. Regulations. 

Sec. 7. Severability. 

Sec. 8. Effective date.

9 SEC. 2. TERMINATION OF TOBACCO PRODUCTION ADJUST10 MENT PROGRAMS. 

11 (a) TOBACCO STANDARDS.—The Tobacco Inspection 

12 Act (7 U.S.C. 511 et seq.) is repealed. 

13 (b) TOBACCO FIELD MEASUREMENT.—Section 1112 

14 of the Omnibus Budget Reconciliation Act of 1987 (Public 

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

16 (c) TOBACCO INSPECTIONS.—Section 213 of the To17 bacco Adjustment Act of 1983 (7 U.S.C. 511r) is repealed. 
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1 (d) TOBACCO CONTROL.—The Act of April 25, 1936 

2 (commonly known as the Tobacco Control Act; 7 U.S.C. 

3 515 et seq.), is repealed. 

4 (e) COMMODITY HANDLING ORDERS.—Section 

5 8c(2)(A) of the Agricultural Adjustment Act (7 U.S.C. 

6 608c(2)(A)), reenacted with amendments by the Agricul7 tural Marketing Agreement Act of 1937, is amended by 

8 striking ‘‘tobacco,’’. 

9 (f) PROCESSING TAX.—Section 9(b) of the Agricul10 tural Adjustment Act (7 U.S.C. 609(b)), reenacted with 

11 amendments by the Agricultural Marketing Agreement 

12 Act of 1937, is amended—

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

14 and 

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

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

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

18 (g) BURLEY TOBACCO IMPORT REVIEW.—Section 3 

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

20 (h) DECLARATION OF POLICY.—Section 2 of the Ag21 ricultural Adjustment Act of 1938 (7 U.S.C. 1282) is 

22 amended by striking ‘‘tobacco,’’. 

23 (i) DEFINITIONS.—Section 301(b) of the Agricultural 

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

25 (1) in paragraph (3)—
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1 (A) by striking subparagraph (C); and 

2 (B) by redesignating subparagraph (D) as 

3 subparagraph (C); 

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

5 (3) in paragraph (10)—

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

7 (B) by redesignating subparagraph (C) as 

8 subparagraph (B); 

9 (4) in paragraph (11)(B), by striking ‘‘and to10 bacco’’; 

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

12 (6) in paragraph (14)—

13 (A) in subparagraph (A), by striking 

14 ‘‘(A)’’; and 

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

16 and (D); 

17 (7) by striking paragraph (15); 

18 (8) in paragraph (16)—

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

20 (B) by redesignating subparagraph (C) as 

21 subparagraph (B); 

22 (9) by striking paragraph (17); and 

23 (10) by redesignating paragraph (16) as para24 graph (15). 
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1 (j) 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 (k) 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 (l) ADMINISTRATIVE PROVISIONS.—Section 361 of 

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

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

11 (m) 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 (n) 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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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 

6 ‘‘$500;’’ and all that follows through the period 

7 at the end of the sentence and inserting 

8 ‘‘$500.’’. 

9 (o) REGULATIONS.—Section 375 of the Agricultural 

10 Adjustment Act of 1938 (7 U.S.C. 1375) is amended—

11 (1) in subsection (a), by striking ‘‘peanuts, or 

12 tobacco’’ and inserting ‘‘or peanuts’’; and 

13 (2) by striking subsection (c). 

14 (p) EMINENT DOMAIN.—Section 378 of the Agricul15 tural Adjustment Act of 1938 (7 U.S.C. 1378) is amend16 ed—

17 (1) in the first sentence of subsection (c), by 

18 striking ‘‘cotton, and tobacco’’ and inserting ‘‘and 

19 cotton’’; and 

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

21 (q) BURLEY TOBACCO FARM RECONSTITUTION.—

22 Section 379 of the Agricultural Adjustment Act of 1938 

23 (7 U.S.C. 1379) is amended—

24 (1) in subsection (a)—

25 (A) by striking ‘‘(a)’’; and 
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1 (B) in paragraph (6), by striking ‘‘, but 

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

3 case of burley tobacco’’; and 

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

5 (r) ACREAGE-POUNDAGE QUOTAS.—Section 4 of the 

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

7 note), is repealed. 

8 (s) BURLEY TOBACCO ACREAGE ALLOTMENTS.—The 

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

10 (t) TRANSFER OF ALLOTMENTS.—Section 703 of the 

11 Food and Agriculture Act of 1965 (7 U.S.C. 1316) is re12 pealed. 

13 (u) ADVANCE RECOURSE LOANS.—Section 

14 13(a)(2)(B) of the Food Security Improvements Act of 

15 1986 (7 U.S.C. 1433c–1(a)(2)(B)) is amended by striking 

16 ‘‘tobacco and’’. 

17 SEC. 3. TERMINATION OF TOBACCO PRICE SUPPORT PRO18 GRAM. 

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 subsections (c), (g), (h), and (i); 

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 subsections (c) and (d), respectively. 

8 (b) TERMINATION OF TOBACCO PRICE SUPPORT AND

9 NO NET COST PROVISIONS.—Sections 106, 106A, and 

10 106B of the Agricultural Act of 1949 (7 U.S.C. 1445, 

11 1445–1, 1445–2) are repealed. 

12 (c) DEFINITION OF BASIC AGRICULTURAL COM13 MODITY.—Section 408(c) of the Agricultural Act of 1949 

14 (7 U.S.C. 1428(c)) is amended by striking ‘‘tobacco,’’. 

15 (d) REVIEW OF BURLEY TOBACCO IMPORTS.—Sec16 tion 3 of Public Law 98–59 (7 U.S.C. 625) is repealed. 

17 (e) POWERS OF COMMODITY CREDIT CORPORA18 TION.—Section 5 of the Commodity Credit Corporation 

19 Charter Act (15 U.S.C. 714c) is amended by inserting 

20 ‘‘(other than tobacco)’’ after ‘‘agricultural commodities’’ 

21 each place it appears. 

22 SEC. 4. LIABILITY. 

23 The amendments made by sections 2 and 3 shall not 

24 affect the liability of any person under any provision of 
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1 law so amended with respect to any crop of tobacco plant2 ed before the effective date of this Act. 

3 SEC. 5. REPLACEMENT TOBACCO ASSISTANCE PROGRAMS. 

4 (a) IN GENERAL.—Title III of the Agricultural Ad5 justment Act of 1938 is amended by inserting after sub6 title D (7 U.S.C. 1379a et seq.) the following: 

7 ‘‘Subtitle E—Tobacco Assistance 

8 ‘‘SEC. 380A. DEFINITIONS. 

9 ‘‘In this subtitle: 

10 ‘‘(1) ACTIVE TOBACCO PRODUCER.—The term 

11 ‘active tobacco producer’, with respect to a kind of 

12 tobacco, means a person that—

13 ‘‘(A) is actively engaged in the production 

14 of tobacco marketed or considered planted; and 

15 ‘‘(B) shares in the risk of producing the 

16 tobacco. 

17 ‘‘(2) APPLICABLE FISCAL YEAR.—The term ‘ap18 plicable fiscal year’ means each of fiscal years 2004 

19 through 2011. 

20 ‘‘(3) BASE PERIOD.—The term ‘base period’ 

21 means the six-month period from January 1, 2004, 

22 through June 30, 2004, and each three-month pe23 riod thereafter through the three-month period end24 ing on June 30, 2011. 
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1 ‘‘(4) CONSIDERED PLANTED.—The term ‘con2 sidered planted’ means tobacco planted but failed to 

3 be produced as a result of a natural disaster, as de4 termined by the Secretary.

5 ‘‘(5) DEPARTMENT.—The term ‘Department’ 

6 means the Department of Agriculture. 

7 ‘‘(6) ELIGIBLE STATE.—The term ‘eligible 

8 State’ means each of the States of Alabama, Arkan9 sas, Florida, Georgia, Indiana, Kansas, Kentucky, 

10 Minnesota, Missouri, North Carolina, Ohio, Okla11 homa, South Carolina, Tennessee, Virginia, West 

12 Virginia, and Wisconsin. 

13 ‘‘(7) MARKET SHARE.—The term ‘market 

14 share’ means the share of each manufacturer or im15 porter of a class of tobacco product (expressed as a 

16 decimal to the fourth place) of the total volume of 

17 domestic sales of the class of tobacco product during 

18 the base period for the applicable fiscal year for an 

19 assessment under section 380T. 

20 ‘‘(8) QUOTA TOBACCO.—The term ‘quota to21 bacco’ means a kind of tobacco that is subject to a 

22 farm marketing quota or farm acreage allotment for 

23 the 2002 tobacco marketing year under a marketing 

24 quota or allotment program established under part 

25 I of subtitle B of this title (as in effect on the day 
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1 before the date of the enactment of the Tobacco Re2 duction, Accountability, and Community Enhance3 ment Act of 2003). 

4 ‘‘(9) TOBACCO.—The term ‘tobacco’ means 

5 each of the following kinds of tobacco: 

6 ‘‘(A) Flue-cured tobacco, comprising types 

7 11, 12, 13, and 14. 

8 ‘‘(B) Fire-cured tobacco, comprising types 

9 22 and 23. 

10 ‘‘(C) Dark air-cured tobacco, comprising 

11 types 35 and 36. 

12 ‘‘(D) Virginia sun-cured tobacco, com13 prising type 37. 

14 ‘‘(E) Virginia fire-cured tobacco, com15 prising type 21. 

16 ‘‘(F) Burley tobacco, comprising type 31. 

17 ‘‘(G) Cigar-filler and cigar-binder tobacco, 

18 comprising types 42, 43, 44, 53, 54, and 55. 

19 ‘‘(10) TOBACCO ADVISORY BOARD.—The terms 

20 ‘Tobacco Advisory Board’ and ‘Board’ mean a To21 bacco Advisory Board established under section 

22 380G for a kind of tobacco. 

23 ‘‘(11) TOBACCO QUOTA HOLDER.—The term 

24 ‘tobacco quota holder’ means a person that is con-
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1 sidered a tobacco quota holder under section 

2 380B(b). 

3 ‘‘(12) TOBACCO TRUST FUND.—The terms ‘To4 bacco Trust Fund’ and ‘Fund’ mean the Tobacco 

5 Trust Fund established under section 380S. 

6 ‘‘(13) TRADITIONAL PRODUCER OF TOBACCO.—

7 The term ‘traditional producer of tobacco’ means a 

8 person that, for at least 1 of the 2000, 2001, or 

9 2002 tobacco marketing years—

10 ‘‘(A) was actively engaged in the produc11 tion of tobacco marketed, or considered planted, 

12 under a marketing quota established under part 

13 I of subtitle B of this title (as in effect on the 

14 day before the date of the enactment of the To15 bacco Reduction, Accountability, and Commu16 nity Enhancement Act of 2003); and 

17 ‘‘(B) shared in the risk of producing the 

18 tobacco. 

19 ‘‘(14) TRADITIONAL TOBACCO COUNTY.—The 

20 term ‘traditional tobacco county’ means a county in 

21 the United States that had 1 or more farms oper22 ated by traditional producers of tobacco under a 

23 marketing quota for at least 1 of the 2000, 2001, 

24 or 2002 tobacco marketing years. To determine the 

25 crop poundage base of an active tobacco producer 
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1 for a kind of tobacco produced in the State of Geor2 gia under section 380I, the term includes a county 

3 that is contiguous to a county described in the pre4 ceding sentence. 

5 ‘‘CHAPTER 1—PAYMENTS TO TOBACCO 

6 QUOTA HOLDERS AND TRADITIONAL 

7 PRODUCERS 

8 ‘‘SEC. 380B. EQUITY RELIEF PAYMENTS TO TOBACCO 

9 QUOTA HOLDERS. 

10 ‘‘(a) IN GENERAL.—The Secretary shall make transi11 tion payments under this section to each tobacco quota 

12 holder. 

13 ‘‘(b) TOBACCO QUOTA HOLDER.—

14 ‘‘(1) IN GENERAL.—Except as otherwise pro15 vided in this subsection, the Secretary shall consider 

16 a person to be a tobacco quota holder under this sec17 tion if the person was an owner of a farm, as of July 

18 1, 2002, for which a basic tobacco farm marketing 

19 quota or farm acreage allotment for quota tobacco 

20 was established with respect to the 2002 tobacco 

21 marketing year under a marketing quota program 

22 established under part I of subtitle B of this title (as 

23 in effect on the day before the date of the enactment 

24 of the Tobacco Reduction, Accountability, and Com25 munity Enhancement Act of 2003). 
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1 ‘‘(2) EFFECT OF PURCHASE CONTRACT.—If 

2 there was an agreement for the purchase of all or 

3 part of a farm described in paragraph (1) as of July 

4 1, 2002, and the parties to the sale are unable to 

5 agree to the disposition of eligibility for payments 

6 under this section, the Secretary, taking into ac7 count any transfer of quota that has been agreed to, 

8 shall provide for the equitable division of the pay9 ments among the parties by adjusting the deter10 mination of who is the tobacco quota holder with re11 spect to particular pounds of the quota. 

12 ‘‘(3) EFFECT OF AGREEMENT FOR PERMANENT

13 QUOTA TRANSFER.—If the Secretary determines 

14 that there was in existence, as of July 1, 2002, an 

15 agreement for the permanent transfer of quota, but 

16 that the transfer was not completed by that date, 

17 the Secretary shall consider the tobacco quota holder 

18 to be the party to the agreement that, as of that 

19 date, was the owner of the farm to which the quota 

20 was to be transferred. 

21 ‘‘(4) PROTECTED BASES.—A person that owns 

22 a farm with a tobacco poundage quota that is pro23 tected under a conservation reserve program con24 tract entered into under section 1231 of the Food 

25 Security Act of 1985 (16 U.S.C. 3831) shall be con-
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1 sidered to be a tobacco quota holder with respect to 

2 the protected poundage.

3 ‘‘(5) SECRETARIAL DISCRETION.—Notwith4 standing paragraphs (1) through (4), the Secretary 

5 may declare a person to be the tobacco quota holder 

6 with respect to certain pounds of quota or otherwise 

7 for purposes of this section if the Secretary—

8 ‘‘(A) considers the declaration is needed to 

9 ensure a fair and equitable administration of 

10 the payments provided for in this section, in11 cluding such actions as are necessary to prevent 

12 payments based on speculation; and 

13 ‘‘(B) does not, in exercising the authority 

14 provided under this paragraph, effectively in15 crease the total quota in excess of the quota 

16 that was available to all producers for the 2002 

17 marketing year for other than seed or experi18 mental use. 

19 ‘‘(6) LIMITATION ON QUANTITY OF QUOTA

20 HELD.—

21 ‘‘(A) IN GENERAL.—A person shall be con22 sidered a tobacco quota holder for purposes of 

23 this section only with respect to the quantity of 

24 basic quota that qualifies the person as a to25 bacco quota holder. 
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1 ‘‘(B) INCLUDED QUOTA.—The determina2 tion of the tobacco poundage amount for which 

3 the person qualifies shall—

4 ‘‘(i) be made based on the 2002 crop 

5 quota levels; and 

6 ‘‘(ii) take into account sales of the 

7 farm that occurred before July 1, 2002, 

8 and any permanent transfers of quota that 

9 took place before that date.

10 ‘‘(c) APPLICATION.—To be eligible to receive pay11 ments under this section, a person shall prepare and sub12 mit to the Secretary an application at such time, in such 

13 manner, and containing such information as the Secretary 

14 may require, including information sufficient to dem15 onstrate that the person satisfies the definition of tobacco 

16 quota holder. 

17 ‘‘(d) TOTAL AMOUNT AVAILABLE FOR PAYMENTS.—

18 ‘‘(1) IN GENERAL.—The Secretary shall deter19 mine the total amount to be paid to all tobacco 

20 quota holders under this section with respect to each 

21 kind of tobacco. 

22 ‘‘(2) POUNDAGE QUOTA TOBACCO.—For each 

23 kind of tobacco for which the marketing quota is ex24 pressed in pounds, the total amount available for 

25 payments to tobacco quota holders under this section 
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1 shall be equal to the product obtained by multi2 plying—

3 ‘‘(A) $8 per pound; by 

4 ‘‘(B) the annual average of tobacco farm 

5 basic quotas established under this Act for the 

6 1997 through 2002 marketing years for that 

7 kind of tobacco. 

8 ‘‘(3) MARKETING QUOTAS OTHER THAN POUND9 AGE QUOTAS.—For each kind of tobacco for which 

10 there is a marketing quota or allotment on an acre11 age basis, the Secretary shall convert the tobacco 

12 farm marketing quotas or allotments established 

13 under this Act for the 1997 through 2002 marketing 

14 year for that kind of tobacco to a poundage basis be15 fore executing the mathematical equation specified 

16 in paragraph (2). 

17 ‘‘(e) BASE QUOTA LEVEL.—

18 ‘‘(1) IN GENERAL.—The Secretary shall deter19 mine the base quota level of each tobacco quota 

20 holder with respect to each kind of tobacco. 

21 ‘‘(2) POUNDAGE QUOTA TOBACCO.—For each 

22 kind of tobacco for which the marketing quota is ex23 pressed in pounds, the base quota level for a tobacco 

24 quota holder shall be equal to the tobacco farm mar25 keting quota established under this Act for the 2002 
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1 marketing year for quota tobacco on the farm owned 

2 by the tobacco quota holder. 

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 base quota level for a tobacco quota 

7 holder shall be equal to the product obtained (based 

8 on a poundage conversion) by multiplying—

9 ‘‘(A) the tobacco farm marketing quota or 

10 allotment established under this Act for the 

11 2002 marketing year for the tobacco quota 

12 holder’s farm; by 

13 ‘‘(B) the average yield per acre for the to14 bacco quota holder’s farm for the kind of to15 bacco for that marketing year. 

16 ‘‘(f) PAYMENT AMOUNT.—The Secretary shall make 

17 payments to a tobacco quota holder with respect to a kind 

18 of tobacco under this section in a total amount that bears 

19 the same ratio to the amount determined by the Secretary 

20 under subsection (d) with respect to that kind of tobacco 

21 as the base quota level of the tobacco quota holder with 

22 respect to that kind of tobacco bears to the base quota 

23 level of all tobacco quota holders with respect to that kind 

24 of tobacco. 
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1 ‘‘(g) TIME FOR PAYMENT.—The amount determined 

2 under subsection (f) for a tobacco quota holder shall be 

3 paid in seven equal installments on November 1 of each 

4 of the calendar years 2004 through 2010, except that 50 

5 percent of the payment required to be made on November 

6 1, 2004, shall be paid on September 30, 2004. 

7 ‘‘(h) DEATH OF TOBACCO QUOTA HOLDER.—If a to8 bacco quota holder who is entitled to payments under this 

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

10 dependents, the right to receive the payments shall trans11 fer to the surviving spouse or, if there is no surviving 

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

13 ‘‘SEC. 380C. DIRECT PAYMENTS TO TRADITIONAL PRO14 DUCERS OF TOBACCO. 

15 ‘‘(a) IN GENERAL.—The Secretary shall make direct 

16 payments under this section to traditional producers of to17 bacco. 

18 ‘‘(b) APPLICATION.—To be eligible to receive pay19 ments under this section, a person shall prepare and sub20 mit to the Secretary an application at such time, in such 

21 manner, and containing such information as the Secretary 

22 may require, including information sufficient to dem23 onstrate that the person satisfies the definition of tradi24 tional producer of tobacco. 

25 ‘‘(c) TOTAL AMOUNT AVAILABLE FOR PAYMENTS.—
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1 ‘‘(1) IN GENERAL.—The Secretary shall deter2 mine the total amount to be paid to traditional pro3 ducers of tobacco under this section with respect to 

4 each kind of tobacco. 

5 ‘‘(2) POUNDAGE QUOTA TOBACCO.—For each 

6 kind of tobacco for which the marketing quota is ex7 pressed in pounds, the total amount available for 

8 payments to traditional producers of tobacco under 

9 this section shall be equal to the product obtained by 

10 multiplying—

11 ‘‘(A) $4 per pound; by 

12 ‘‘(B) the annual average of tobacco farm 

13 effective quotas established under this Act for 

14 the 1997 through 2002 marketing years for 

15 that kind of tobacco. 

16 ‘‘(3) MARKETING QUOTAS OTHER THAN POUND17 AGE QUOTAS.—For each kind of tobacco for which 

18 there is a marketing quota or allotment on an acre19 age basis, the Secretary shall convert the tobacco 

20 farm marketing quotas or allotments established 

21 under this Act for the 1997 through 2002 marketing 

22 years for that kind of tobacco to a poundage basis 

23 before executing the mathematical equation specified 

24 in paragraph (2). 

25 ‘‘(d) PAYMENT QUANTITY.—
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1 ‘‘(1) IN GENERAL.—The Secretary shall deter2 mine the payment quantity of tobacco for each tradi3 tional producer of tobacco with respect to each kind 

4 of tobacco. 

5 ‘‘(2) POUNDAGE QUOTA TOBACCO.—For each 

6 kind of tobacco for which the marketing quota is ex7 pressed in pounds, the payment quantity for a tradi8 tional producer of tobacco shall be equal to the aver9 age of the July 1 effective quota for that quota to10 bacco produced by the producer under this Act for 

11 the 2000, 2001 and 2002 marketing years. 

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 payment quantity for a traditional 

16 producer of tobacco shall be equal to the average of 

17 the actual pounds of that kind of tobacco produced 

18 by the traditional producer of tobacco for the 2000, 

19 2001 and 2002 marketing years. 

20 ‘‘(e) PAYMENT AMOUNT.—The Secretary shall make 

21 payments to each traditional producer of tobacco with re22 spect to a kind of tobacco under this section in a total 

23 amount that bears the same ratio to the amount deter24 mined by the Secretary under subsection (c) with respect 

25 to that kind of tobacco as the payment quantity of the 
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1 producer with respect to that kind of tobacco bears to the 

2 payment quantities of all traditional producers of tobacco 

3 with respect to that kind of tobacco. 

4 ‘‘(f) TIME FOR PAYMENT.—The amount determined 

5 under subsection (e) for a traditional producer of tobacco 

6 shall be paid in seven equal installments on November 1 

7 of each of the calendar years 2004 through 2010, except 

8 that 50 percent of the payment required to be made on 

9 November 1, 2004, shall be paid on September 30, 2004. 

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

11 traditional producer of tobacco who is entitled to transi12 tion payments under this section dies and is survived by 

13 a spouse or one or more dependents, the right to receive 

14 the payments shall transfer to the surviving spouse or, if 

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

16 ‘‘SEC. 380D. ADMINISTRATION. 

17 ‘‘(a) RESOLUTION OF DISPUTES.—

18 ‘‘(1) IN GENERAL.—Any dispute regarding the 

19 eligibility of a person to receive a payment under 

20 this subtitle, or the amount of the payment, may be 

21 appealed to the county committee established under 

22 section 8 of the Soil Conservation and Domestic Al23 lotment Act (16 U.S.C. 590h) for the county or 

24 other area in which the farming operation of the 

25 person is located. 
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1 ‘‘(2) NATIONAL APPEALS DIVISION.—Any ad2 verse determination of a county committee under 

3 subsection (a) may be appealed to the National Ap4 peals Division established under subtitle H of the 

5 Department of Agriculture Reorganization Act of 

6 1994 (7 U.S.C. 6991 et seq.). 

7 ‘‘(b) USE OF QUALIFIED FINANCIAL INSTITU8 TIONS.—The Secretary may use qualified financial institu9 tions to manage assets, make payments, and otherwise 

10 carry out this subtitle. 

11 ‘‘CHAPTER 2—TOBACCO QUALITY AND 

12 QUANTITY 

13 ‘‘SEC. 380G. TOBACCO ADVISORY BOARDS. 

14 ‘‘(a) ESTABLISHMENT.—The Secretary shall estab15 lish in the Department a permanent advisory board for 

16 each kind of tobacco, to be known as a ‘Tobacco Advisory 

17 Board’. 

18 ‘‘(b) MEMBERSHIP.—

19 ‘‘(1) NUMBER.—Each Tobacco Advisory Board 

20 shall have 11 members. 

21 ‘‘(2) COMPOSITION.—The Board for a kind of 

22 tobacco shall consist of the following: 

23 ‘‘(A) 5 members appointed by the Sec24 retary from nominations submitted by rep-
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1 resentatives of active tobacco producers in the 

2 United States of that kind of tobacco. 

3 ‘‘(B) 5 members appointed by the Sec4 retary from nominations submitted by rep5 resentatives of tobacco product manufacturers 

6 in the United States that purchase that type of 

7 tobacco, including at least 1 representative of 

8 export dealers of tobacco or tobacco products 

9 appointed from nominations submitted by ex10 port dealers. 

11 ‘‘(C) An officer or employee of the Depart12 ment appointed by the Secretary. 

13 ‘‘(3) ALLOCATION OF PRODUCER MEMBER14 SHIP.—In appointing members to the Tobacco Advi15 sory Board for a kind of tobacco under paragraph 

16 (2)(A), the number of members appointed by the 

17 Secretary to represent active tobacco producers of 

18 that kind of tobacco in a particular State shall, to 

19 the maximum extent practicable, bear the same ratio 

20 to the total number of members of the Board as—

21 ‘‘(A) the total volume of domestic sales of 

22 the kind of tobacco produced in the State dur23 ing the most recent period for which data is 

24 available; bears to
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1 ‘‘(B) the total volume of domestic sales of 

2 the kind of tobacco produced in all States dur3 ing the most recent period for which data is 

4 available. 

5 ‘‘(c) CHAIRPERSON.—The Secretary shall appoint the 

6 chairperson of each Tobacco Advisory Board, with a dif7 ferent member serving as chairperson of a Board every 

8 2 years. 

9 ‘‘(d) TERMS.—Members of a Tobacco Advisory Board 

10 shall serve for 2-year terms, except that the terms of the 

11 members first appointed to the Boards shall be staggered 

12 so as to establish a rotating membership of the Boards, 

13 as determined by the Secretary. 

14 ‘‘SEC. 380H. DUTIES AND ADMINISTRATION OF TOBACCO 

15 ADVISORY BOARDS. 

16 ‘‘(a) DUTIES.—The Tobacco Advisory Board for a 

17 kind of tobacco shall—

18 ‘‘(1) determine and describe the physical char19 acteristics of that kind of tobacco produced in the 

20 United States and unmanufactured tobacco of that 

21 kind imported into the United States; 

22 ‘‘(2) assemble and evaluate, in a systematic 

23 manner, concerns and problems with the quality of 

24 that kind of tobacco produced in the United States, 
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1 expressed by domestic and foreign buyers and manu2 facturers of tobacco products; 

3 ‘‘(3) review data collected by Federal agencies 

4 on the physical and chemical integrity of that kind 

5 of tobacco produced in the United States and un6 manufactured tobacco imported into the United 

7 States, to ensure that tobacco being used in domesti8 cally-manufactured tobacco products is of the high9 est quality and is free from prohibited physical and 

10 chemical agents; 

11 ‘‘(4) not later than a date determined by the 

12 Secretary, make recommendations to the Secretary 

13 on the base year, for the maximum crop poundage 

14 base under section 380I(f) for each crop of that kind 

15 of tobacco; 

16 ‘‘(5) establish a registration system to monitor 

17 the production of that kind of tobacco; 

18 ‘‘(6) investigate and communicate to the Sec19 retary—

20 ‘‘(A) conditions with respect to the produc21 tion of that kind of tobacco that discourage im22 provements in the quality of tobacco produced 

23 in the United States; and 
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1 ‘‘(B) recommendations for regulatory 

2 changes that would address tobacco quality 

3 issues affecting that kind of tobacco; 

4 ‘‘(7) conduct oversight regarding tobacco mar5 keting issues (such as opening sales dates and mar6 keting regulations) affecting that kind of tobacco 

7 and applicable to auction markets; 

8 ‘‘(8) provide assistance to Federal agencies on 

9 actions taken by the Federal agencies that affect the 

10 quality or quantity of that kind of tobacco produced 

11 in the United States; and 

12 ‘‘(9) carry out such other related activities as 

13 are assigned to the Board by the Secretary. 

14 ‘‘(b) ADMINISTRATION.—The Secretary shall provide 

15 the Tobacco Advisory Boards with (as determined by the 

16 Secretary)—

17 ‘‘(1) a staff that is—

18 ‘‘(A) experienced in the sampling and anal19 ysis of unmanufactured tobacco; and 

20 ‘‘(B) capable of collecting data and moni21 toring tobacco production information; and 

22 ‘‘(2) other resources and information necessary 

23 for the Boards to perform their duties, including in24 formation concerning acreage devoted to the produc25 tion of each kind of tobacco. 
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1 ‘‘(c) APPLICABILITY OF FEDERAL ADVISORY COM2 MITTEE ACT.—The Federal Advisory Committee Act (5 

3 U.S.C. App.) shall not apply to the Tobacco Advisory 

4 Boards. 

5 ‘‘SEC. 380I. TOBACCO POUNDAGE LIMITATION PROGRAM. 

6 ‘‘(a) DEFINITIONS.—In this section: 

7 ‘‘(1) CROP POUNDAGE BASE.—The term ‘crop 

8 poundage base’ means the crop poundage base for a 

9 kind of tobacco for a crop for an active tobacco pro10 ducer, as determined by the Secretary under sub11 section (e). 

12 ‘‘(2) PERMITTED POUNDAGE.—The term ‘per13 mitted poundage’ means the number of pounds of a 

14 kind of tobacco authorized to be produced by an ac15 tive tobacco producer, consistent with the annual 

16 poundage limitation program announced by the Sec17 retary for the kind of tobacco. 

18 ‘‘(b) ESTABLISHMENT AND MAINTENANCE.—

19 ‘‘(1) IN GENERAL.—The Secretary shall estab20 lish and may maintain a poundage limitation pro21 gram for each crop of each kind of tobacco. 

22 ‘‘(2) SUPPLY.—In determining whether to 

23 maintain the poundage limitation program for a crop 

24 of a kind of tobacco, the Secretary shall determine 

25 whether the total supply of that kind of tobacco, in 
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1 the absence of limitations, will be excessive, taking 

2 into account the need for an adequate carry-over to 

3 maintain reasonable and stable supplies and prices. 

4 ‘‘(3) ANNOUNCEMENT.—

5 ‘‘(A) IN GENERAL.—The Secretary shall 

6 announce the annual poundage limitation pro7 gram for a kind of tobacco as soon as prac8 ticable preceding the year in which the crop is 

9 harvested. 

10 ‘‘(B) SPECIAL RULE FOR 2004 CROP.—In 

11 the case of the 2004 crop for a kind of tobacco, 

12 the Secretary shall announce the poundage limi13 tation program as soon as practicable after the 

14 date of the enactment of the Tobacco Reduc15 tion, Accountability, and Community Enhance16 ment Act of 2003. 

17 ‘‘(4) CONSULTATION.—The Secretary shall 

18 carry out this subsection with regard to a kind of to19 bacco in consultation with the Tobacco Advisory 

20 Board established for that kind of tobacco. 

21 ‘‘(c) APPLICATION OF LIMITATION.—Under a pound22 age limitation program for a kind of tobacco, the Sec23 retary shall achieve the limitation by applying a uniform 

24 percentage adjustment to the crop poundage base for the 

25 kind of tobacco in each traditional tobacco county for the
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1 crop for active tobacco producers that produce that kind 

2 of tobacco in that county, as determined by the Secretary. 

3 ‘‘(d) COMPLIANCE.—

4 ‘‘(1) LOANS, PURCHASES, OR PAYMENTS.—An 

5 active tobacco producer that knowingly produces a 

6 kind of tobacco in excess of the permitted poundage 

7 for the kind of tobacco, or violates any lease or 

8 transfer requirements of this section, shall be ineli9 gible for any loans, purchases, or payments for the 

10 kind of tobacco. 

11 ‘‘(2) NO CARRY OVER.—An active tobacco pro12 ducer may not carry over permitted poundage for a 

13 crop of a kind of tobacco, which is not produced by 

14 the producer, for production in a subsequent crop 

15 year. 

16 ‘‘(3) PENALTIES.—

17 ‘‘(A) CRIMINAL PENALTY.—A producer 

18 that violates this subsection may be fined not 

19 more than $100,000 or imprisoned not more 

20 than 2 years, or both. 

21 ‘‘(B) CIVIL PENALTY.—In addition to any 

22 penalty imposed under paragraph (1), the Sec23 retary may assess against a producer that vio24 lates this subsection a civil penalty in an 

25 amount not to exceed 2 percent of the value of 
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1 the kind of tobacco produced by the producer 

2 during the crop year in which the violation oc3 curred, as determined by the Secretary. 

4 ‘‘(3) JURISDICTION TO PREVENT AND RE5 STRAIN VIOLATIONS.—A United States district court 

6 shall have jurisdiction to prevent and restrain a pro7 ducer from producing a kind of tobacco in excess of 

8 the permitted poundage for the kind of tobacco. 

9 ‘‘(e) DETERMINATION OF CROP POUNDAGE

10 BASES.—

11 ‘‘(1) 2004 CROP YEAR.—Subject to subsections 

12 (f) through (i), the crop poundage base for an active 

13 tobacco producer for the 2004 crop of each kind of 

14 tobacco shall equal the average of the number of 

15 pounds of that kind of tobacco harvested by the ac16 tive tobacco producer in a traditional tobacco county 

17 and marketed in each of the 5 crop years preceding 

18 the crop year, as determined and adjusted by the 

19 Secretary. 

20 ‘‘(2) SUBSEQUENT CROP YEARS.—Subject to 

21 subsections (f) through (i), in the case of the 2005 

22 and subsequent crops of each kind of tobacco, the 

23 crop poundage base for an active tobacco producer 

24 of a kind of tobacco shall equal the number of 

25 pounds of that kind of tobacco harvested by the ac-
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•HR 3160 IH 

1 tive tobacco producer in a traditional tobacco county 

2 and marketed in the preceding crop year, as deter3 mined and adjusted by the Secretary. 

4 ‘‘(3) CONSULTATION.—The Secretary shall 

5 carry out this subsection with regard to a kind of to6 bacco in consultation with the Tobacco Advisory 

7 Board established for that kind of tobacco. 

8 ‘‘(f) MAXIMUM CROP POUNDAGE BASES.—

9 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

10 the total number of pounds devoted to a kind of to11 bacco by active tobacco producers during a crop year 

12 shall not exceed the total number of pounds devoted 

13 to the kind of tobacco by active tobacco producers 

14 during a crop year determined by the Secretary. 

15 ‘‘(2) ADJUSTMENT.—If the active tobacco pro16 ducers of a kind of tobacco demonstrate to the Sec17 retary that the application of paragraph (1) to a 

18 crop of a kind of tobacco will result in unbalanced 

19 supply and demand conditions, the Secretary may 

20 adjust the total number of pounds that may be de21 voted to the kind of tobacco by active tobacco pro22 ducers during the crop year. 

23 ‘‘(g) SALE, LEASE, OR TRANSFER OF CROP POUND24 AGE BASES.—
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1 ‘‘(1) PROHIBITION.—Except as provided in 

2 paragraph (2), an active tobacco producer shall not 

3 directly or indirectly sell, lease, or transfer to an4 other person or other legal entity a crop poundage 

5 base established for an active tobacco producer 

6 under this section. 

7 ‘‘(2) EXCEPTION.—If the crop poundage base 

8 of an active tobacco producer for a type of tobacco 

9 covers tobacco that was produced by the producer in 

10 more than one traditional tobacco county, the pro11 ducer may elect to consolidate the base in a single 

12 traditional tobacco county in which the producer 

13 bore or shared in the risk of producing a crop of 

14 that kind of tobacco for the 2002 crop year. 

15 ‘‘(h) REALLOCATION OF UNUSED CROP POUNDAGE

16 BASES.—

17 ‘‘(1) COUNTY POOL.—Subject to paragraphs 

18 (2), (3), and (4), if an active tobacco producer with 

19 a crop poundage base for a kind of tobacco elects 

20 not to use all or part of the crop poundage base to 

21 continue to produce that kind of tobacco, the unused 

22 crop poundage base shall be placed in a pool estab23 lished for the traditional tobacco county where the 

24 unused crop poundage base was originally located 

25 for reallocation by the Secretary to other active to-
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•HR 3160 IH 

1 bacco producers of that kind of tobacco in the tradi2 tional tobacco county. The Secretary shall distribute 

3 the unused crop poundage base among those pro4 ducers that request a portion of the unused crop 

5 poundage base according to the percentage of pre6 vious year production, by pound, of that kind of to7 bacco in that county. 

8 ‘‘(2) STATE POOL.—Subject to paragraph (4), 

9 if any crop poundage base for a kind of tobacco re10 mains after the crop poundage base is made avail11 able to producers of that kind of tobacco in the tra12 ditional tobacco county in a State under paragraph 

13 (1), the unused crop poundage base shall be placed 

14 in a pool established for the State for reallocation by 

15 the Secretary to other producers of that kind of to16 bacco in traditional tobacco counties. The Secretary 

17 shall distribute the available unused crop poundage 

18 base among those producers that request a portion 

19 of the unused crop poundage base according to the 

20 percentage of previous year production, by pound, of 

21 that kind of tobacco in the State. 

22 ‘‘(3) TRADITIONAL GROWING AREA POOL.—

23 Subject to paragraph (4), if any crop poundage base 

24 for a kind of tobacco remains after the crop pound25 age base is made available to producers of that kind
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1 of tobacco in the traditional tobacco county in a 

2 State under paragraph (1), and remains after the 

3 crop poundage base is made available to producers 

4 of that kind of tobacco in the State under paragraph 

5 (2), the unused crop poundage base shall be placed 

6 in a pool established for reallocation by the Sec7 retary to other producers of that kind of tobacco in 

8 a traditional tobacco county for that kind of tobacco. 

9 The Secretary shall distribute the available unused 

10 crop poundage base among those producers that re11 quest a portion of the unused crop poundage base 

12 according to the percentage of previous year produc13 tion, by pound, of that kind of tobacco in that tradi14 tional growing area. 

15 ‘‘(4) NEW PRODUCERS.—In reallocating unused 

16 crop poundage bases for a kind of tobacco in a tradi17 tional tobacco county made available under any of 

18 the preceding paragraphs, the Secretary shall make 

19 available to any new producers of that kind of to20 bacco in the traditional tobacco county up to 10 per21 cent of the crop poundage bases available for re22 allocation for the kind of tobacco in the traditional 

23 tobacco county. 

24 ‘‘(5) REALLOCATION PROCEDURES.—The Sec25 retary shall establish procedures by which producers 
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1 of a kind of tobacco, including new producers under 

2 paragraph (4), may request the reallocation unused 

3 crop poundage base available under this subsection. 

4 ‘‘(i) COMPLIANCE WITH CONSERVATION AND AGRI5 CULTURAL REQUIREMENTS.—As a condition of the estab6 lishment of a crop poundage base for an active tobacco 

7 producer for a crop of a kind of tobacco, the producer shall 

8 agree, during the crop year for which the crop poundage 

9 base is established—

10 ‘‘(1) to comply with applicable conservation re11 quirements under subtitle B of title XII of the Food 

12 Security Act of 1985 (16 U.S.C. 3811 et seq.); 

13 ‘‘(2) to comply with applicable wetland protec14 tion requirements under subtitle C of title XII of the 

15 Act (16 U.S.C. 3821 et seq.); 

16 ‘‘(3) to use the land of the active tobacco pro17 ducer, in a quantity consistent with the crop pound18 age base, for an agricultural or conserving use, and 

19 not for a nonagricultural commercial or industrial 

20 use, as determined by the Secretary; and 

21 ‘‘(4) to effectively control noxious weeds and 

22 otherwise maintain the land in accordance with 

23 sound agricultural practices, as determined by the 

24 Secretary, if the agricultural or conserving use in-
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1 volves the noncultivation of any portion of the land 

2 referred to in paragraph (3). 

3 ‘‘CHAPTER 3—TOBACCO MARKET 

4 STABILITY PROGRAM 

5 ‘‘SEC. 380M. TOBACCO MARKET STABILITY PROGRAM. 

6 ‘‘(a) IN GENERAL.—If during any period of a mar7 keting year, to be established by the Secretary, the insured 

8 price for the crop of a kind of tobacco exceeds the average 

9 domestic price for the crop of the kind of tobacco, as de10 termined by the Secretary, the Secretary shall make avail11 able to active tobacco producers of that kind of tobacco 

12 market stability payments for the marketing year in an 

13 amount obtained by multiplying—

14 ‘‘(1) the payment rate for the crop (as deter15 mined under subsection (b)); and 

16 ‘‘(2) the permitted poundage for the active to17 bacco producer (as determined under section 380I). 

18 ‘‘(b) PAYMENT RATE.—

19 ‘‘(1) IN GENERAL.—Subject to paragraphs (2) 

20 and (3), the payment rate for a crop of a kind of 

21 tobacco under this section shall be the amount by 

22 which—

23 ‘‘(A) the insured price for the crop; ex24 ceeds 

25 ‘‘(B) the domestic price for the crop. 
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1 ‘‘(2) INSURED PRICES.—

2 ‘‘(A) IN GENERAL.—Except as provided in 

3 subparagraph (B), the insured price for each 

4 crop of a kind of tobacco under this section 

5 shall be a price, which is determined by the 

6 Secretary to be necessary to provide market 

7 stability for that kind of tobacco and for which 

8 private insurance may be obtained in accord9 ance with subsection (c) at a cost that does not 

10 exceed (but may be less than) the assessment 

11 imposed for that kind of tobacco pursuant to 

12 subsection (f). 

13 ‘‘(B) MINIMUM PRICE.—The insured price 

14 for each crop of a kind of tobacco under this 

15 section shall not be less than $1.00 per pound, 

16 unless the Secretary determines that lower in17 sured price is necessary. 

18 ‘‘(3) DOMESTIC PRICES.—The domestic price 

19 for the crop of a kind of tobacco under this section 

20 shall be determined by the Secretary. 

21 ‘‘(c) DELIVERY THROUGH PRIVATE PROVIDERS.—

22 ‘‘(1) IN GENERAL.—The Secretary shall carry 

23 out this section, to the maximum extent practicable, 

24 through contracts with private insurance companies 
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1 and other private entities approved by the Secretary 

2 (referred to in this section as ‘private providers’). 

3 ‘‘(2) REIMBURSEMENT.—The Secretary shall 

4 reimburse private providers for administrative ex5 penses incurred in carrying out this section, as de6 termined by the Secretary. 

7 ‘‘(d) DELIVERY THROUGH LOCAL DEPARTMENT OF8 FICES.—If the Secretary determines that there are an in9 sufficient number of private providers to carry out this 

10 section in all or part of a State, the Secretary (acting 

11 through local offices of the Department) shall carry out 

12 this section directly in all or part of the State. 

13 ‘‘(e) ADDITIONAL COVERAGE.—The Secretary may 

14 offer additional coverage to active tobacco producers on 

15 a farm of a crop of a kind of tobacco under this section 

16 under which a higher level of price coverage is made avail17 able to the active tobacco producers on the farm, in ex18 change for an additional premium paid by the active to19 bacco producers on the farm. 

20 ‘‘(f) ASSESSMENT.—

21 ‘‘(1) IN GENERAL.—Effective for each mar22 keting year for a kind of tobacco for which tobacco 

23 market stability payments are made available under 

24 this section, subject to paragraph (2), each producer 

25 and purchaser of that kind of tobacco shall remit to
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1 the Commodity Credit Corporation a marketing as2 sessment in an amount determined by the Secretary 

3 that is sufficient to provide the payments for that 

4 kind of tobacco. 

5 ‘‘(2) LIMITATION ON ASSESSMENT.—The Sec6 retary shall not impose or collect an assessment 

7 under this section for a marketing year until and 

8 unless the Secretary determines that the amounts 

9 made available under section 380S(c)(1)(C) to carry 

10 out this section for that marketing year will be in11 sufficient. 

12 ‘‘(3) AMOUNT.—Subject to paragraph (2), the 

13 amount of producer and purchaser assessments for 

14 a kind of tobacco under this subsection—

15 ‘‘(A) shall be determined in such a manner 

16 that producers and purchasers share equally in 

17 paying assessments required under this sub18 section; and 

19 ‘‘(B) shall not exceed 5 cents per pound. 

20 ‘‘(4) COLLECTION.—The producer and pur21 chaser assessments shall be—

22 ‘‘(A) collected in the same manner as pro23 vided for in section 106A(d)(2) or 106B(d)(3) 

24 of the Agricultural Act of 1949 (7 U.S.C. 

25 1445–1(d)(2), 1445–2(d)(3)) (as in effect on 
41

•HR 3160 IH 

1 the day before the date of the enactment of the 

2 Tobacco Reduction, Accountability, and Com3 munity Enhancement Act of 2003), as applica4 ble; and 

5 ‘‘(B) enforced in the same manner as pro6 vided in section 106A(h) or 106B(j) of the Ag7 ricultural Act of 1949 (7 U.S.C. 1445–1(h), 

8 1445–2(j)) (as in effect on the day before the 

9 date of the enactment of the Tobacco Reduc10 tion, Accountability, and Community Enhance11 ment Act of 2003), as applicable. 

12 ‘‘(5) USE OF QUALIFIED FINANCIAL INSTITU13 TIONS.—The Secretary may use qualified financial 

14 institutions to manage assets, make collections, and 

15 otherwise carry out this subsection. 

16 ‘‘(6) ENFORCEMENT.—The Secretary may en17 force this subsection in the courts of the United 

18 States. 

19 ‘‘(g) CONSULTATION.—The Secretary shall make the 

20 determinations required by this section with regard to a 

21 kind of tobacco in consultation with the Tobacco Advisory 

22 Board established for that kind of tobacco. After the Sec23 retary announces the terms and conditions of the tobacco 

24 market stability program for a crop year for a kind of 

25 tobacco, the Secretary shall consult with the Tobacco Ad-
42

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1 visory Board established for that kind of tobacco before 

2 making any change to the program for the crop year. 

3 ‘‘CHAPTER 4—COMPETITIVE GRANTS FOR 

4 TOBACCO RESEARCH 

5 ‘‘SEC. 380Q. COMPETITIVE GRANTS FOR TOBACCO RE6 SEARCH. 

7 ‘‘(a) IN GENERAL.—Notwithstanding any other pro8 vision of law, the Secretary shall make competitive grants 

9 under section 406 of the Agricultural Research, Exten10 sion, and Education Reform Act of 1998 (7 U.S.C. 7626) 

11 to colleges and universities located in eligible States to 

12 conduct research—

13 ‘‘(1) to assist tobacco producers to diversify 

14 crops or implement other means to reduce or elimi15 nate the reliance of the producers on the production 

16 of tobacco or to promote alternative uses of tobacco 

17 or enhance the quality of tobacco produced in the 

18 United States; and 

19 ‘‘(2) to foster and facilitate development, eval20 uation, and implementation of economically viable 

21 new agricultural technologies and enterprises for 

22 rural communities. 

23 ‘‘(b) GRANT DISTRIBUTION.—In making grants 

24 under this section, the Secretary shall provide for an equi25 table distribution of the grants based on the volume of 
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1 each kind of tobacco that is produced in each eligible 

2 State, as determined by the Secretary 

3 ‘‘CHAPTER 5—FUNDING 

4 ‘‘SEC. 380S. TOBACCO TRUST FUND. 

5 ‘‘(a) ESTABLISHMENT.—There is established in the 

6 Commodity Credit Corporation a revolving trust fund to 

7 be known as the ‘Tobacco Trust Fund’ and to be used 

8 in carrying out this subtitle. The Fund shall consist of—

9 ‘‘(1) such amounts as are deposited in the 

10 Fund under subsection (b); 

11 ‘‘(2) such amounts as are necessary from the 

12 Commodity Credit Corporation; and 

13 ‘‘(3) any interest earned on investment of 

14 amounts in the Fund under subsection (d). 

15 ‘‘(b) DEPOSITS.—Revenues from assessments col16 lected under section 380T shall be deposited in the Fund. 

17 ‘‘(c) EXPENDITURES.—

18 ‘‘(1) IN GENERAL.—Subject to paragraphs (2) 

19 and (3) and notwithstanding any other provision of 

20 law, in addition to any other funds that may be 

21 available, the Secretary may use from the Fund such 

22 amounts as the Secretary determines are nec23 essary—
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1 ‘‘(A) to make payments to tobacco quota 

2 holders and traditional producers of tobacco 

3 under chapter 1; 

4 ‘‘(B) to pay necessary expenses of the To5 bacco Advisory Boards and to carry out the 

6 poundage limitation program under chapter 2; 

7 ‘‘(C) to carry out the tobacco market sta8 bility program under chapter 3, in an amount 

9 equal to $50,000,000 for each of fiscal years 

10 2005 through 2008; 

11 ‘‘(D) to make competitive grants for to12 bacco research under chapter 4, in an amount 

13 equal to $12,000,000 for each of fiscal years 

14 2005 through 2009; 

15 ‘‘(E) to make grants to each association 

16 that has entered into a loan agreement with the 

17 Commodity Credit Corporation under section 

18 106A or 106B of the Agricultural Act of 1949 

19 (7 U.S.C. 1445–1, 1445–2) (as in effect on the 

20 day before the date of the enactment of the To21 bacco Reduction, Accountability, and Commu22 nity Enhancement Act of 2003) to assist the 

23 association to transition to alternative methods 

24 of marketing tobacco in accordance with a plan 

25 approved by the Secretary, with the grants allo-
45

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1 cated on the basis of the proportion of the kind 

2 of tobacco marketed by each association, in an 

3 amount not to exceed $1,500,000 for each kind 

4 of tobacco for each of fiscal years 2004 through 

5 2008; 

6 ‘‘(F) to make payments to appropriate to7 bacco warehouse associations, as determined by 

8 the Secretary, in an amount not to exceed 

9 $1,500,000 for each of fiscal years 2004 

10 through 2008; and 

11 ‘‘(G) to pay administrative costs incurred 

12 by the Secretary in carrying out this subtitle 

13 and reimburse the Commodity Credit Corpora14 tion for costs incurred by the Commodity Credit 

15 Corporation under paragraph (2). 

16 ‘‘(2) EXPENDITURES BY COMMODITY CREDIT

17 CORPORATION.—

18 ‘‘(A) IN GENERAL.—Subject to subpara19 graph (B) and notwithstanding any other provi20 sion of law, the Secretary may use funds of the 

21 Commodity Credit Corporation to make pay22 ments under paragraph (1). 

23 ‘‘(B) REIMBURSEMENT TO COMMODITY

24 CREDIT CORPORATION.—Not later than Janu25 ary 1, 2011, the Commodity Credit Corporation 
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•HR 3160 IH 

1 shall be reimbursed in full, with interest, for all 

2 funds of the Commodity Credit Corporation ex3 pended under subparagraph (A). 

4 ‘‘(3) ADMINISTRATIVE EXPENSES.—An amount 

5 not to exceed $20,000,000 for each fiscal year of the 

6 amounts in the Fund shall be available to pay the 

7 administrative expenses necessary to carry out this 

8 subtitle. 

9 ‘‘(d) INVESTMENT OF AMOUNTS.—

10 ‘‘(1) IN GENERAL.—The Commodity Credit 

11 Corporation shall invest such portion of the Fund as 

12 is not, in the judgment of the Commodity Credit 

13 Corporation, required to meet current withdrawals. 

14 ‘‘(2) INTEREST-BEARING OBLIGATIONS.—In15 vestments may be made only in interest-bearing obli16 gations of the United States. 

17 ‘‘(3) ACQUISITION OF OBLIGATIONS.—For the 

18 purpose of investments under paragraph (1), obliga19 tions may be acquired—

20 ‘‘(A) on original issue at the issue price; or 

21 ‘‘(B) by purchase of outstanding obliga22 tions at the market price. 

23 ‘‘(4) SALE OF OBLIGATIONS.—Any obligation 

24 acquired by the Fund may be sold by the Com25 modity Credit Corporation at the market price.
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•HR 3160 IH 

1 ‘‘(5) CREDITS TO FUND.—The interest on, and 

2 the proceeds from the sale or redemption of, any ob3 ligations held in the Fund shall be credited to and 

4 form a part of the Fund. 

5 ‘‘(e) ADMINISTRATION.—In administering the Fund, 

6 the Secretary shall make payments, reimburse agencies of 

7 the Department, and accept deposits without regard to 

8 limitations on total amounts of allotments and fund trans9 fers under section 11 of the Commodity Credit Corpora10 tion Charter Act (15 U.S.C. 714i). 

11 ‘‘(f) USE OF QUALIFIED FINANCIAL INSTITU12 TIONS.—The Secretary may use qualified financial institu13 tions to manage assets, make payments, and otherwise 

14 carry out this subtitle. 

15 ‘‘SEC. 380T. ASSESSMENTS. 

16 ‘‘(a) IN GENERAL.—The Secretary, acting through 

17 the Commodity Credit Corporation, shall impose quarterly 

18 assessments, calculated in accordance with this section, on 

19 each tobacco product manufacturer and tobacco product 

20 importer that sells tobacco products in domestic commerce 

21 in the United States. 

22 ‘‘(b) TOBACCO TRUST FUND.—Assessments collected 

23 under this section shall be deposited in the Tobacco Trust 

24 Fund. 
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1 ‘‘(c) ASSESSMENT FOR EACH CLASS OF TOBACCO

2 PRODUCT.—

3 ‘‘(1) ALLOCATION BY CLASS OF TOBACCO PROD4 UCTS.—The percentage of the total amount to be as5 sessed against, and paid by, the manufacturers and 

6 importers of each class of tobacco product in each 

7 applicable fiscal year shall be—

8 ‘‘(A) for cigarette manufacturers and im9 porters, 98.303 percent; 

10 ‘‘(B) for snuff manufacturers and import11 ers, 0.428 percent; 

12 ‘‘(C) for chewing tobacco manufacturers 

13 and importers, 0.098 percent; 

14 ‘‘(D) for manufacturers and importers of 

15 small cigars, 0.011 percent; 

16 ‘‘(E) for manufacturers and importers of 

17 large cigars, 1.095 percent; 

18 ‘‘(F) for pipe tobacco manufacturers and 

19 importers, 0.021 percent; and 

20 ‘‘(G) for roll-your-own tobacco manufactur21 ers and importers, 0.044 percent. 

22 ‘‘(2) ADJUSTMENT.—The Secretary shall adjust 

23 the percentage of the total amount to be assessed 

24 against, as determined by paragraph (1), and paid 

25 by, the manufacturers and importers of each class of
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1 tobacco product in each applicable fiscal year by 

2 multiplying the percentage of the total amount to 

3 be assessed, as determined by such paragraph, by 

4 a fraction—

5 ‘‘(A) the numerator of which is the total 

6 volume of domestic sales of that class of to7 bacco product during the preceding applicable 

8 fiscal year; and 

9 ‘‘(B) the denominator of which is the total 

10 volume of domestic sales of that class of to11 bacco product during the fiscal year ending 

12 September 30, 2003.

13 ‘‘(3) TOTAL ASSESSMENT.—The total amount 

14 to be assessed against all manufacturers and import15 ers of all classes of tobacco product in each applica16 ble fiscal year shall be equal to the amount required 

17 to carry out this subtitle during the applicable fiscal 

18 year, as determined by the Secretary. If the amount 

19 to be assessed after the application of paragraphs 

20 (1) and (2) is insufficient to carry out this subtitle 

21 during the applicable fiscal year, the Secretary may 

22 assess such additional amount as the Secretary de23 termines to be necessary to carry out this subtitle 

24 during the applicable fiscal year. Such additional 

25 amount shall be allocated to the manufacturers and 
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1 importers of each class of tobacco product in the 

2 same manner and based on the same percentages 

3 applied in determining the total amount to be as4 sessed under paragraph (1), as adjusted by para5 graph (2) during the applicable fiscal year. 

6 ‘‘(4) NOTIFICATION OF ASSESSMENTS.—The 

7 Secretary shall notify all manufacturers and import8 ers of tobacco products of the amount of the assess9 ment for each quarterly payment period. The notice 

10 for a quarterly payment period shall refer gross do11 mestic sales and market shares for the quarterly 

12 payment period and conform with the requirements 

13 of subsection (h). 

14 ‘‘(5) TIMING OF ASSESSMENT PAYMENTS.—

15 ‘‘(A) IN GENERAL.—Assessments shall be 

16 collected at the end of each calendar year quar17 ter, and the assessment for a calendar year 

18 quarter shall correspond to the base period 

19 quarter that ended at the end of the preceding 

20 calendar year quarter. The payments over four 

21 calendar quarters, beginning with the calendar 

22 quarter ending on December 31 of each applica23 ble fiscal year, shall be sufficient to cover the 

24 payments required under chapter 1 on Novem25 ber 1 of that same applicable fiscal year and 
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1 other expenditures of the Tobacco Trust Fund 

2 required by section 380S during the base quar3 ter periods corresponding to those four calendar 

4 quarters. 

5 ‘‘(B) SPECIAL RULE.—In the case of the 

6 chapter 1 payments required to be made on 

7 September 30, 2004, the assessments shall be 

8 paid on that same date and correspond to the 

9 first base period of six months. 

10 ‘‘(d) ALLOCATION OF ASSESSMENT WITHIN EACH

11 CLASS OF TOBACCO PRODUCT.—

12 ‘‘(1) ALLOCATION.—The assessment for each 

13 class of tobacco product shall be allocated on a pro 

14 rata basis among manufacturers and importers 

15 based on each manufacturer’s or importer’s share of 

16 gross domestic volume. No manufacturer or importer 

17 shall be required to pay an assessment in excess of 

18 the manufacturer’s or importer’s share of domestic 

19 volume. 

20 ‘‘(2) GROSS DOMESTIC VOLUME DEFINED.—In 

21 this section, the term ‘gross domestic volume’ means 

22 the volume of tobacco products removed, as defined 

23 by section 5702(k) of the Internal Revenue Code of 

24 1986, and not exempt from tax under chapter 52 of 

25 the Internal Revenue Code at the time of their re-
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1 moval under such chapter or the Harmonized Tariff 

2 Schedule of the United States (19 U.S.C. 1202). 

3 ‘‘(e) ALLOCATION OF TOTAL ASSESSMENTS BY MAR4 KET SHARE.—The amount of the assessment for each 

5 class of tobacco product to be paid by each manufacturer 

6 or importer of the class of tobacco product under sub7 section (a) shall be determined for each quarterly payment 

8 period by multiplying—

9 ‘‘(1) the market share of the manufacturer or 

10 importer, as calculated with respect to that payment 

11 period, of the class of tobacco product; by 

12 ‘‘(2) the total amount of the assessment for 

13 that quarterly payment period under subsection (c), 

14 for the class of tobacco product. 

15 ‘‘(f) DETERMINATION OF VOLUME OF DOMESTIC

16 SALES.—

17 ‘‘(1) IN GENERAL.—The calculation of the vol18 ume of domestic sales of a class of tobacco product 

19 by a manufacturer or importer, and by all manufac20 turers and importers as a group, shall be made by 

21 the Secretary based on information provided by the 

22 manufacturers and importers pursuant to subsection 

23 (g), as well as any other relevant information pro24 vided to or obtained by the Secretary. The volume
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1 of domestic sales shall be calculated based on gross 

2 domestic volume. 

3 ‘‘(2) MEASUREMENT.—For purposes of the cal4 culations under this subsection and the certifications 

5 under subsection (g) by the Secretary, the volumes 

6 of domestic sales shall be measured by—

7 ‘‘(A) in the case of cigarettes, the numbers 

8 of cigarettes; 

9 ‘‘(B) in the case of small cigars, the num10 ber of cigars weighing not more than three 

11 pounds per thousand; 

12 ‘‘(C) in the case of large cigars, the num13 ber of cigars weighing more than three pounds 

14 per thousand; and 

15 ‘‘(D) in the case of other classes of tobacco 

16 products, in terms of number of pounds, or 

17 fraction thereof, of these products.

18 ‘‘(g) MEASUREMENT OF VOLUME OF DOMESTIC

19 SALES.—

20 ‘‘(1) IN GENERAL.—Each manufacturer and 

21 importer of tobacco products shall submit to the 

22 Secretary a certified copy of each of the returns or 

23 forms described by this paragraph that are required 

24 to be filed with a Government agency on the same 

25 date that those returns or forms are filed, or re-
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1 quired to be filed, with such agency. The returns 

2 and forms described by this paragraph are those re3 turns and forms related to the release of tobacco 

4 products into domestic commerce, as defined by sec5 tion 5702(k) of the Internal Revenue Code of 1986 

6 and the payment of the taxes imposed under charter 

7 52 of the Internal Revenue Code of 1986, including 

8 AFT Form 5000.24 and United States Customs 

9 Form 7501 under currently applicable regulations. 

10 ‘‘(2) PENALTIES.—Any person that knowingly 

11 fails to provide information required under this sub12 section or that provides false information under this 

13 subsection shall be subject to the penalties described 

14 in section 1003 of title 18, United States Code. In 

15 addition, the Secretary may assess against the per16 son a civil penalty in an amount not to exceed 2 per17 cent of the value of the kind of tobacco products 

18 manufactured or imported by such person during the 

19 applicable fiscal year, as determined by the Sec20 retary. 

21 ‘‘(h) ASSESSMENT NOTIFICATION; CONTENT.—The 

22 Secretary shall provide each manufacturer or importer 

23 subject to an assessment under subsection (a) with written 

24 notice setting forth the amount to be assessed against 

25 such manufacturer or importer for the applicable quar-
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1 terly period. The notice for a quarterly period shall be pro2 vided not later than 30 days before the date payment is 

3 due under subsection (c)(5). The notice shall include the 

4 following information with respect to such quarterly period 

5 used by the Secretary in calculating such amount: 

6 ‘‘(1) The total combined assessment for all 

7 manufacturers and importers of tobacco products. 

8 ‘‘(2) The total assessment with respect to the 

9 class of tobacco products manufactured or imported 

10 by such manufacturer or importer. 

11 ‘‘(3) Any adjustments to the percentage alloca12 tions among the classes of tobacco products made 

13 pursuant to subsection (c)(2). 

14 ‘‘(4) The volume of gross sales of the applicable 

15 class of tobacco product treated as made by such 

16 manufacturer or importer for purposes of calculating 

17 such manufacturer’s or importer’s market share 

18 under subsection (e). 

19 ‘‘(5) The total volume of gross sales of the ap20 plicable class of tobacco product that the Secretary 

21 treated as made by all manufacturers and importers 

22 for purposes of calculating such manufacturer’s or 

23 importer’s market share under subsection (e). 
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1 ‘‘(6) Such manufacturer’s or importer’s market 

2 share of the applicable class of tobacco product as 

3 determined by the Secretary under subsection (e). 

4 ‘‘(7) The market share, as determined by the 

5 Secretary under subsection (e), of each other manu6 facturer and importer, for each applicable class of 

7 tobacco product. 

8 ‘‘(i) CHALLENGE TO ASSESSMENT.—

9 ‘‘(1) APPEAL TO SECRETARY.—A manufacturer 

10 or importer subject to this section may contest an 

11 assessment imposed on such person pursuant to this 

12 section by notifying the Secretary within 10 business 

13 days after receiving the assessment notification re14 quired by subsection (h). Such manufacturer and 

15 importer may place into escrow, in accordance with 

16 rules promulgated by the Secretary, only the portion 

17 of the assessment being challenged in good faith 

18 pending final determination of the assessment under 

19 this subsection. 

20 ‘‘(2) PROCEDURE FOR APPEAL.—The Secretary 

21 shall by regulation establish a procedure whereby a 

22 person contesting an assessment pursuant to this 

23 subsection may present information to the Secretary 

24 to demonstrate that such assessment is incorrect, in25 cluding information to demonstrate the following:
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1 ‘‘(A) The total combined assessment im2 posed by the Secretary on all manufacturers 

3 and importers is excessive. 

4 ‘‘(B) The Secretary’s allocation of the total 

5 assessment among the classes of tobacco prod6 ucts is incorrect. 

7 ‘‘(C) The total volume of gross domestic 

8 sales of all manufacturers and importers of the 

9 relevant class of tobacco product calculated by 

10 the Secretary under subsection (e) is incorrect. 

11 ‘‘(D) The level of gross domestic sales at12 tributed to such person by the Secretary for 

13 purposes of calculating such person’s market 

14 share under subsection (e) exceeds such per15 son’s actual domestic sales of such class of to16 bacco product. 

17 ‘‘(E) The amount of the assessment attrib18 uted to such person by the Secretary exceeds 

19 such person’s pro rata share based on such per20 son’s share of gross domestic sales. 

21 ‘‘(3) CHALLENGE.—In challenging an assess22 ment under this subsection, the manufacturer or im23 porter may use any information that is available, in24 cluding third party data on industry or individual 

25 company sales volumes. Such information may con-
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1 stitute evidence sufficient to establish that the Sec2 retary’s initial determination was incorrect, in which 

3 event the assessment shall be revised so that the 

4 manufacturer or importer is required only to pay the 

5 amount correctly determined. 

6 ‘‘(4) TIME FOR REVIEW.—Within 30 days after 

7 receiving notice from a manufacturer or importer 

8 under paragraph (2), the Secretary shall decide 

9 whether the information provided to the Secretary 

10 pursuant to such paragraph and any other informa11 tion which the Secretary determines is appropriate is 

12 sufficient to establish that the original assessment 

13 was incorrect, and shall make any revisions nec14 essary to ensure that each manufacturer and im15 porter pays only its correct pro rata share of total 

16 gross domestic volume from all sources. 

17 ‘‘(5) IMMEDIATE PAYMENT OF UNDISPUTED

18 AMOUNTS.—The regulations promulgated by the 

19 Secretary under paragraph (2) shall provide for the 

20 immediate payment by a manufacturer or importer 

21 challenging an assessment of such portion of the as22 sessment that is not in dispute. 

23 ‘‘(6) JUDICIAL REVIEW.—Any manufacturer or 

24 importer aggrieved by a determination of the Sec25 retary with respect to the amount of any assessment 
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1 may seek review of such determination in the United 

2 States District Court for the District of Columbia or 

3 for the district in which the manufacturer or im4 porter resides or has its principal place of business 

5 at any time following exhaustion of the administra6 tive remedies under this subsection. Administrative 

7 remedies shall be deemed exhausted if no decision by 

8 the Secretary is made within the time limits under 

9 paragraph (4). The court shall restrain collection of 

10 the excessive portion of any assessment or order a 

11 refund of excessive assessments already paid, along 

12 with interest calculated at the rate prescribed in sec13 tion 3717 of title 31, United States Code, if it finds 

14 that the Secretary’s determination is not supported 

15 by a preponderance of the information available to 

16 the Secretary. 

17 ‘‘(7) REGULATIONS.—The Secretary shall issue 

18 regulations to implement this subsection within 6 

19 months after the date of the enactment of this Act. 

20 ‘‘(j) TERMINATION DATE.—The authority provided 

21 by this section terminates on September 30, 2011. 

22 ‘‘SEC. 380U. COMMODITY CREDIT CORPORATION. 

23 The Secretary shall use the funds, facilities, and au24 thorities of the Commodity Credit Corporation to carry 

25 out this subtitle, to remain available until expended. 
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1 ‘‘SEC. 380V. TRANSITION PROVISIONS. 

2 ‘‘(a) TOBACCO STOCKS.—

3 ‘‘(1) IN GENERAL.—To provide for the orderly 

4 disposition of quota tobacco held by an association 

5 that has entered into a loan agreement with the 

6 Commodity Credit Corporation under section 106A 

7 or 106B of the Agricultural Act of 1949 (7 U.S.C. 

8 1445–1, 1445–2) (referred to in this section as an 

9 ‘association’), loan pool stocks for each kind of to10 bacco held by the association shall be disposed of in 

11 accordance with this subsection.

12 ‘‘(2) ASSOCIATIONS.—For each kind of tobacco 

13 held by an association, the proportion of loan pool 

14 stocks for each kind of tobacco held by the associa15 tion that shall be transferred to the association shall 

16 be equal to—

17 ‘‘(A) the amount of funds held by the asso18 ciation in the No Net Cost Tobacco Fund and 

19 the No Net Cost Tobacco Account established 

20 under sections 106A and 106B of the Agricul21 tural Act of 1949 (7 U.S.C. 1445–1, 1445–2), 

22 respectively, for the kind of tobacco; divided by 

23 ‘‘(B) the average list price per pound for 

24 the kind of tobacco, as determined by the Sec25 retary. 
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1 ‘‘(3) COMMODITY CREDIT CORPORATION.—Any 

2 loan pool stocks of a kind of tobacco of an associa3 tion that are not disposed of in accordance with 

4 paragraph (2) shall be—

5 ‘‘(A) transferred by the association to the 

6 Commodity Credit Corporation; 

7 ‘‘(B) disposed of in a manner determined 

8 by the Secretary; and 

9 ‘‘(C) should any loss be incurred by the 

10 disposals described in subparagraph (B), these 

11 losses shall first be paid by the association for 

12 that kind of tobacco to the extent of the rev13 enue received from the sale of tobacco trans14 ferred to the association pursuant to paragraph 

15 (2). 

16 ‘‘(b) NO NET COST FUNDS.—

17 ‘‘(1) IN GENERAL.—Any funds in the No Net 

18 Cost Tobacco Fund or the No Net Cost Tobacco Ac19 count of an association established under sections 

20 106A and 106B of the Agricultural Act of 1949 (7 

21 U.S.C. 1445–1, 1445–2), respectively, that remain 

22 after the application of subsection (a) and sections 

23 106A and 106B of the Agricultural Act of 1949 (7 

24 U.S.C. 1445, 1445–1) (as in effect on the day before 

25 the date of the enactment of the Tobacco Reduction,
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1 Accountability, and Community Enhancement Act of 

2 2003) shall be transferred to the association for dis3 tribution to members of the association in accord4 ance with a plan approved by the Secretary. 

5 ‘‘(2) ASSOCIATIONS WITH NO LOAN POOL

6 STOCKS.—In the case of an association that does not 

7 hold any loan pool stocks that are covered by sub8 section (a)(2), any funds in the No Net Cost To9 bacco Fund or the No Net Cost Tobacco Account of 

10 the association established under sections 106A and 

11 106B of the Agricultural Act of 1949 (7 U.S.C. 

12 1445–1, 1445–2), respectively, shall be transferred 

13 to the association for distribution to members of the 

14 association in accordance with a plan approved by 

15 the Secretary.’’. 

16 (b) CONFORMING AMENDMENTS.—Section 

17 320B(c)(1) of the Agricultural Adjustment Act of 1938 

18 (7 U.S.C. 1314h(c)(1)) is amended—

19 (1) by inserting ‘‘(A)’’ after ‘‘(1)’’; 

20 (2) by striking ‘‘by’’ at the end and inserting 

21 ‘‘or’’; and 

22 (3) by adding at the end the following: 

23 ‘‘(B) in the case of the 2003 marketing year, 

24 the price support rate for the kind of tobacco in25 volved in effect under section 106 of the Agricultural 
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1 Act of 1949 (7 U.S.C. 1445) at the time of the vio2 lation; by’’. 

3 SEC. 6. REGULATIONS. 

4 (a) IN GENERAL.—In accordance with the notice and 

5 comment provisions of section 533 of title 5, United States 

6 Code, the Secretary of Agriculture may promulgate such 

7 regulations as are necessary to implement this Act and 

8 the amendments made by this Act. 

9 (b) PROCEDURE.—The promulgation of the regula10 tions and administration of this Act and the amendments 

11 made by this Act shall be made without regard to chapter 

12 35 of title 44, United States Code (commonly known as 

13 the ‘‘Paperwork Reduction Act’’). 

14 (c) CONGRESSIONAL REVIEW OF AGENCY RULE15 MAKING.—In carrying out this section, the Secretary shall 

16 use the authority provided under section 808 of title 5, 

17 United States Code. 

18 SEC. 7. SEVERABILITY.

19 If any provision of this Act or the application of any 

20 provision of this Act to any person or circumstance is held 

21 to invalid, the remainder of this Act and the application 

22 of the provisions of the Act to any other person or cir23 cumstance shall not be affected thereby and shall continue 

24 to be enforced to the fullest extent possible. 
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1 SEC. 8. EFFECTIVE DATE. 

2 This Act and the amendments made by this Act shall 

3 apply to the 2004 and subsequent crops of each kind of 

4 tobacco.

Æ