II

105TH CONGRESS

1ST SESSION S. 1310

To provide market transition assistance for tobacco producers, tobacco

industry workers, and their communities.

IN THE SENATE OF THE UNITED STATES

OCTOBER 23, 1997

Mr. FORD (for himself, Mr. HELMS, Mr. FAIRCLOTH, Mr. MCCONNELL, Mr.

CLELAND, Mr. HOLLINGS, and Mr. THURMOND) introduced the following

bill; which was read twice and referred to the Committee on Agriculture,

Nutrition, and Forestry

A BILL

To provide market transition assistance for tobacco

producers, tobacco industry workers, and their communities.

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 ‘‘Long-Term Economic Assistance for Farmers Act’’ or

6 the ‘‘LEAF Act’’.

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

8 this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Definitions.
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TITLE I—TOBACCO COMMUNITY REVITALIZATION TRUST FUND

Sec. 101. Establishment of Trust Fund.

Sec. 102. Contributions by tobacco product manufacturers and importers.

TITLE II—AGRICULTURAL MARKET TRANSITION ASSISTANCE

Sec. 201. Payments for lost tobacco quota.

Sec. 202. Industry payments for all Department costs associated with tobacco

production.

Sec. 203. Tobacco community economic development grants.

Sec. 204. Modifications in Federal tobacco programs.

TITLE III—FARMER AND WORKER TRANSITION ASSISTANCE

Sec. 301. Tobacco worker transition program.

Sec. 302. Farmer opportunity grants.

TITLE IV—IMMUNITY

Sec. 401. General immunity for tobacco producers and warehousers.

1 SEC. 2. DEFINITIONS.

2 In this Act:

3 (1) ACTIVE TOBACCO PRODUCER.—The term

4 ‘‘active tobacco producer’’ means a quota holder,

5 quota lessee, or quota tenant.

6 (2) QUOTA HOLDER.—The term ‘‘quota holder’’

7 means a producer that owns a farm for which a to8 bacco farm marketing quota or farm acreage allot9 ment was established under the Agricultural Adjust10 ment Act of 1938 (7 U.S.C. 1281 et seq.) for any

11 of the 1994, 1995, or 1996 crop years.

12 (3) QUOTA LESSEE.—The term ‘‘quota lessee’’

13 means—

14 (A) a producer that owns a farm that pro15 duced tobacco pursuant to a lease and transfer

16 to that farm of all or part of a tobacco farm
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1 marketing quota or farm acreage allotment es2 tablished under the Agricultural Adjustment

3 Act of 1938 (7 U.S.C. 1281 et seq.) for any of

4 the 1994, 1995, or 1996 crop years; or

5 (B) a producer that rented land from a

6 farm operator to produce tobacco under a to7 bacco farm marketing quota or farm acreage al8 lotment established under the Agricultural Ad9 justment Act of 1938 (7 U.S.C. 1281 et seq.)

10 for any of the 1994, 1995, or 1996 crop years.

11 (4) QUOTA TENANT.—The term ‘‘quota tenant’’

12 means a producer who—

13 (A) is the principal producer, as deter14 mined by the Secretary, of tobacco on a farm

15 where tobacco is produced pursuant to a to16 bacco farm marketing quota or farm acreage al17 lotment established under the Agricultural Ad18 justment Act of 1938 (7 U.S.C. 1281 et seq.)

19 for any of the 1994, 1995, or 1996 crop years;

20 and

21 (B) is not a quota holder or quota lessee.

22 (5) SECRETARY.—The term ‘‘Secretary’’

23 means—

24 (A) in titles I and II, the Secretary of Ag25 riculture; and
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1 (B) in section 301, the Secretary of Labor.

2 (6) TOBACCO PRODUCT IMPORTER.—The term

3 ‘‘tobacco product importer’’ has the meaning given

4 the term ‘‘importer’’ in section 5702 of the Internal

5 Revenue Code of 1986.

6 (7) TOBACCO PRODUCT MANUFACTURER.—

7 (A) IN GENERAL.—The term ‘‘tobacco

8 product manufacturer’’ has the meaning given

9 the term ‘‘manufacturer of tobacco products’’ in

10 section 5702 of the Internal Revenue Code of

11 1986.

12 (B) EXCLUSION.—The term ‘‘tobacco

13 product manufacturer’’ does not include a per14 son that manufactures cigars or pipe tobacco.

15 (8) TRUST FUND.—The term ‘‘Trust Fund’’

16 means the Tobacco Community Revitalization Trust

17 Fund established under section 101.

18 TITLE I—TOBACCO COMMUNITY

19 REVITALIZATION TRUST FUND

20 SEC. 101. ESTABLISHMENT OF TRUST FUND.

21 (a) IN GENERAL.—There is established in the Treas22 ury of the United States a trust fund to be known as the

23 ‘‘Tobacco Community Revitalization Trust Fund’’, con24 sisting of such amounts as may be appropriated or cred-
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1 ited to the Trust Fund. The Trust Fund shall be adminis2 tered by the Secretary.

3 (b) TRANSFERS TO TRUST FUND.—There are appro4 priated and transferred to the Trust Fund for each fiscal

5 year—

6 (1) amounts contributed by tobacco product

7 manufacturers and tobacco product importers under

8 section 102; and

9 (2) amounts made available to the Trust Fund

10 out of funds allocated through national tobacco set11 tlement legislation.

12 (c) REPAYABLE ADVANCES.—

13 (1) AUTHORIZATION.—There are authorized to

14 be appropriated to the Trust Fund, as repayable ad15 vances, such sums as may from time to time be nec16 essary to make expenditures under subsection (d).

17 (2) REPAYMENT WITH INTEREST.—Repayable

18 advances made to the Trust Fund shall be repaid,

19 and interest on the advances shall be paid, to the

20 general fund of the Treasury when the Secretary of

21 the Treasury determines that moneys are available

22 in the Trust Fund to make the payments.

23 (3) RATE OF INTEREST.—Interest on an ad24 vance made under this subsection shall be at a rate

25 determined by the Secretary of Treasury (as of the
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1 close of the calendar month preceding the month in

2 which the advance is made) that is equal to the cur3 rent average market yield on outstanding marketable

4 obligations of the United States with remaining pe5 riod to maturity comparable to the anticipated pe6 riod during which the advance will be outstanding.

7 (d) EXPENDITURES FROM TRUST FUND.—Amounts

8 in the Trust Fund shall be available for making expendi9 tures after October 1, 1998, to meet those necessary obli10 gations of the Federal Government that are authorized to

11 be paid under—

12 (1) section 201 for payments for lost tobacco

13 quota for each of fiscal years 1999 through 2023,

14 but not to exceed $1,600,000,000 for any fiscal year

15 except to the extent the payments are made in ac16 cordance with section 201(j);

17 (2) section 202 for industry payments for all

18 costs of the Department of Agriculture associated

19 with the production of tobacco;

20 (3) section 203 for tobacco community eco21 nomic development grants, but not to exceed—

22 (A) $400,000,000 for each of fiscal years

23 1999 through 2008, less any amount required

24 to be paid under section 202 for the fiscal year;

25 and
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1 (B) $450,000,000 for each of fiscal year

2 2009 through 2023, less any amount required

3 to be paid under section 202 during the fiscal

4 year;

5 (4) section 301 for assistance provided under

6 the tobacco worker transition program, but not to

7 exceed $50,000,000 for any fiscal year; and

8 (5) subpart 9 of part A of title IV of the High9 er Education Act of 1965 for farmer opportunity

10 grants, but not to exceed—

11 (A) $42,500,000 for each of the academic

12 years 1999–2000 through 2003–2004;

13 (B) $50,000,000 for each of the academic

14 years 2004–2005 through 2008–2009;

15 (C) $57,500,000 for each of the academic

16 years 2009–2010 through 2013–2014;

17 (D) $65,000,000 for each of the academic

18 years 2014–2015 through 2018–2019; and

19 (E) $72,500,000 for each of the academic

20 years 2019–2020 through 2023–2024.

21 (e) BUDGETARY TREATMENT.—This section con22 stitutes budget authority in advance of appropriations

23 Acts and represents the obligation of the Federal Govern24 ment to provide payments to States and eligible persons

25 in accordance with this Act.
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1 SEC. 102. CONTRIBUTIONS BY TOBACCO PRODUCT MANU2 FACTURERS AND IMPORTERS.

3 (a) DEFINITION OF MARKET SHARE.—In this sec4 tion, the term ‘‘market share’’ means the ratio of—

5 (1) the tax liability of a tobacco product manu6 facturer or tobacco product importer (as defined in

7 section 2) for a calendar year under section 5703 of

8 the Internal Revenue Code of 1986; to

9 (2) the tax liability of all tobacco product man10 ufacturers or tobacco product importers (as defined

11 in section 2) for the calendar year under section

12 5703 of the Internal Revenue Code of 1986.

13 (b) DETERMINATIONS.—Not later than September

14 30 of each fiscal year, the Secretary of the Treasury

15 shall—

16 (1) determine—

17 (A) the market share of each tobacco prod18 uct manufacturer or tobacco product importer

19 during the most recent calendar year;

20 (B) the total amount of assessments pay21 able for the subsequent fiscal year under sub22 section (c); and

23 (C) the amount of an assessment payable

24 by the tobacco product manufacturer or tobacco

25 product importer for the fiscal year under sub26 section (d); and
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1 (2) notify each tobacco product manufacturer

2 and tobacco product importer of the determinations

3 made under paragraph (1) with respect to the manu4 facturer or importer.

5 (c) TOTAL AMOUNT OF ASSESSMENTS.—

6 (1) IN GENERAL.—The total amount of assess7 ments payable by all tobacco product manufacturers

8 and tobacco product importers into the Trust Fund

9 for a fiscal year shall be equal to—

10 (A) the amount of the contribution to the

11 Trust Fund for the fiscal year required under

12 paragraph (2); less

13 (B) any amount made available during the

14 preceding fiscal year to the Trust Fund out of

15 funds allocated through national tobacco settle16 ment legislation.

17 (2) TRUST FUND CONTRIBUTIONS.—The

18 amount of the contribution to the Trust Fund shall

19 be—

20 (A) $2,100,000,000 for each of fiscal years

21 1999 through 2008;

22 (B) $500,000,000 for each of fiscal years

23 2009 through 2023; and
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1 (C) for fiscal year 2024 and each subse2 quent fiscal year, the amount payable under

3 section 202.

4 (d) INDIVIDUAL AMOUNT OF ASSESSMENTS.—The

5 amount of an assessment payable by each tobacco product

6 manufacturer and tobacco product importer into the Trust

7 Fund for a fiscal year shall be equal to the product ob8 tained by multiplying—

9 (1) the total amount of assessments payable by

10 all tobacco product manufacturers and tobacco prod11 uct importers for the fiscal year under subsection

12 (c); by

13 (2) the market share of the tobacco product

14 manufacturer or tobacco product importer during

15 the most recent calendar year determined under sub16 section (b)(1)(A).

17 TITLE II—AGRICULTURAL MAR18 KET TRANSITION ASSISTANCE

19 SEC. 201. PAYMENTS FOR LOST TOBACCO QUOTA.

20 (a) IN GENERAL.—Beginning with the 1999 market21 ing year, the Secretary shall make payments for lost to22 bacco quota to eligible quota holders, quota lessees, and

23 quota tenants as reimbursement for lost tobacco quota as

24 a result of a decrease in demand for domestically produced

25 tobacco.
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1 (b) ELIGIBILITY.—To be eligible to receive payments

2 under this section, a quota holder, quota lessee, or quota

3 tenant shall—

4 (1) prepare and submit to the Secretary an ap5 plication at such time, in such manner, and contain6 ing such information as the Secretary may require,

7 including information sufficient to make the dem8 onstration required under paragraph (2); and

9 (2) demonstrate to the satisfaction of the Sec10 retary that, with respect to the 1996 marketing

11 year—

12 (A) the producer was a quota holder and

13 realized income from the production of tobacco

14 through—

15 (i) the active production of tobacco;

16 (ii) the lease and transfer of tobacco

17 quota to another farm;

18 (iii) the rental of all or part of the

19 farm of the quota holder, including the

20 right to produce tobacco, to another to21 bacco producer; or

22 (iv) the hiring of a quota tenant to

23 produce tobacco;

24 (B) the producer was a quota lessee; or

25 (C) the producer was a quota tenant.
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1 (c) BASE QUOTA LEVEL.—

2 (1) IN GENERAL.—The Secretary shall deter3 mine, for each quota holder, quota lessee, and quota

4 tenant, the base quota level for the 1994 through

5 1996 marketing years.

6 (2) QUOTA HOLDERS.—The base quota level for

7 a quota holder shall be equal to the average tobacco

8 farm marketing quota established for the farm

9 owned by the quota holder for the 1994 through

10 1996 marketing years.

11 (3) QUOTA LESSEES.—The base quota level for

12 a quota lessee shall be equal to—

13 (A) 50 percent of the average number of

14 pounds of tobacco quota established for a farm

15 for the 1994 through 1996 marketing years—

16 (i) that was leased and transferred to

17 a farm owned by the quota lessee; or

18 (ii) for which the rights to produce

19 the tobacco were rented to the quota les20 see; less

21 (B) 25 percent of the average number of

22 pounds of tobacco quota described in paragraph

23 (A) for which a quota tenant was the principal

24 producer of the tobacco quota.
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1 (4) QUOTA TENANTS.—The base quota level for

2 a quota tenant shall be equal to the sum of—

3 (A) 50 percent of the average number of

4 pounds of tobacco quota established for a farm

5 for the 1994 through 1996 marketing years—

6 (i) that was owned by a quota holder;

7 and

8 (ii) for which the quota tenant was

9 the principal producer of the tobacco on

10 the farm; and

11 (B) 25 percent of the average number of

12 pounds of tobacco quota for the 1994 through

13 1996 marketing years—

14 (i)(I) that was leased and transferred

15 to a farm owned by the quota lessee; or

16 (II) for which the rights to produce

17 the tobacco were rented to the quota les18 see; and

19 (ii) for which the quota tenant was

20 the principal producer of the tobacco on

21 the farm.

22 (5) MARKETING QUOTAS OTHER THAN POUND23 AGE QUOTAS.—For each kind of tobacco for which

24 there is a marketing quota or allotment (on an acre25 age basis), the base quota level for each quota hold-
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1 er, quota lessee, or quota tenant shall be determined

2 in accordance with this subsection (based on a

3 poundage conversion) in an amount equal to the

4 product obtained by multiplying—

5 (A) the average tobacco farm marketing

6 quota or allotment for the 1994 through 1996

7 marketing years; by

8 (B) the average county yield per acre for

9 the county in which the farm is located for the

10 kind of tobacco for the marketing years.

11 (d) PAYMENTS.—Except as otherwise provided in this

12 section, during any marketing year in which the national

13 marketing quota for a kind of tobacco is less than the av14 erage national marketing quota level for the kind of to15 bacco for the 1994 through 1996 marketing years, the

16 Secretary shall make payments for lost tobacco quota to

17 each quota holder, quota lessee, and quota tenant that is

18 eligible under subsection (b) in an amount that is equal

19 to the product obtained by multiplying—

20 (1) the percentage by which the national mar21 keting quota for the kind of tobacco is less than the

22 average national marketing quota level for the kind

23 of tobacco for the 1994 through 1996 marketing

24 years; by
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1 (2) the base quota level for the quota holder,

2 quota lessee, or quota tenant; by

3 (3) $4 per pound.

4 (e) LIFETIME LIMITATION ON PAYMENTS.—Except

5 as otherwise provided in this section, the total amount of

6 payments made under this section to a quota holder, quota

7 lessee, or quota tenant during the lifetime of the holder,

8 lessee, or tenant shall not exceed the product obtained by

9 multiplying—

10 (1) the base quota level for the quota holder,

11 quota lessee, or quota tenant; by

12 (2) $8 per pound.

13 (f) LIMITATIONS ON AGGREGATE ANNUAL PAY14 MENTS.—

15 (1) IN GENERAL.—Except as otherwise pro16 vided in this subsection, the total amount payable

17 under this section for any marketing year shall not

18 exceed $1,600,000,000.

19 (2) ACCELERATED PAYMENTS.—Paragraph (1)

20 shall not apply if accelerated payments for lost to21 bacco quota are made in accordance with subsection

22 (j).

23 (3) REDUCTIONS.—If the amount determined

24 under subsection (d) for a marketing year exceeds

25 the amount described in paragraph (1), the Sec-
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1 retary shall make a pro rata reduction in the

2 amounts payable to quota holders, quota lessees, and

3 quota tenants under this section to ensure that the

4 total amount of the payments for lost tobacco quota

5 does not exceed the limitation established under

6 paragraph (1).

7 (4) ROLLOVER OF PAYMENTS FOR LOST TO8 BACCO QUOTA.—Subject to paragraph (1), if the

9 Secretary makes a reduction in accordance with

10 paragraph (3), the amount of the reduction shall be

11 applied to the next marketing year and added to the

12 payments for lost tobacco for the marketing year.

13 (g) SUBSEQUENT SALE AND TRANSFER OF

14 QUOTA.—Effective beginning January 1, 1999, on the

15 sale and transfer of a farm marketing quota under section

16 316(g) or 319(g) of the Agricultural Adjustment Act of

17 1938 (7 U.S.C. 1314b(g), 1314e(g))—

18 (1) the person who sold and transferred the

19 quota shall have—

20 (A) the base quota level attributable to the

21 person reduced by the base quota level attrib22 utable to the quota that is sold and transferred;

23 and

24 (B) the lifetime limitation on payments es25 tablished under subsection (e) attributable to
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1 the person reduced by the product obtained by

2 multiplying—

3 (i) the base quota level attributable to

4 the quota; by

5 (ii) $8 per pound; and

6 (2) the person who acquired the quota shall

7 have—

8 (A) the base quota level attributable to the

9 person increased by the base quota level attrib10 utable to the quota that was sold and trans11 ferred; and

12 (B) the lifetime limitation on payments es13 tablished under subsection (e) attributable to

14 the person—

15 (i) increased by the product obtained

16 by multiplying—

17 (I) the base quota level attrib18 utable to the quota; by

19 (II) $8 per pound; but

20 (ii) decreased by any payments for

21 lost tobacco quota previously made that

22 are attributable to the quota that was sold

23 and transferred.

24 (h) SALE OR TRANSFER OF FARM.—On the sale or

25 transfer of ownership of a farm that is owned by a quota
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1 holder, the base quota level established under subsection

2 (c), the right to payments under subsection (d), and the

3 lifetime limitation on payments established under sub4 section (e) shall transfer to the new owner of the farm

5 to the same extent and in the same manner as those sub6 sections applied to the previous quota holder.

7 (i) DEATH OF QUOTA LESSEE OR QUOTA TENANT.—

8 If a quota lessee or quota tenant who is entitled to pay9 ments under this section dies and is survived by a spouse

10 or 1 or more dependents, the right to receive the payments

11 shall transfer to the surviving spouse or, if there is no

12 surviving spouse, to the surviving dependents in equal

13 shares.

14 (j) ACCELERATION OF PAYMENTS.—

15 (1) IN GENERAL.—On the occurrence of any of

16 the events described in paragraph (2), the Secretary

17 shall make an accelerated lump sum payment for

18 lost tobacco quota to each quota holder, quota les19 see, and quota tenant for any affected kind of to20 bacco in accordance with paragraph (3).

21 (2) TRIGGERING EVENTS.—The Secretary shall

22 make accelerated payments under paragraph (1) if

23 after the date of enactment of this Act—

24 (A) for 3 consecutive marketing years, the

25 national marketing quota for a kind of tobacco
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1 is less than 50 percent of the national market2 ing quota for the kind of tobacco for the 1996

3 marketing year; or

4 (B) Congress repeals or makes ineffective,

5 directly or indirectly, any provision of—

6 (i) section 316(g) of the Agricultural

7 Adjustment Act of 1938 (7 U.S.C.

8 1314b(g));

9 (ii) section 319(g) of the Agricultural

10 Adjustment Act of 1938 (7 U.S.C.

11 1314e(g));

12 (iii) section 106 of the Agricultural

13 Act of 1949 (7 U.S.C. 1445);

14 (iv) section 106A of the Agricultural

15 Act of 1949 (7 U.S.C. 1445–1); or

16 (v) section 106B of the Agricultural

17 Act of 1949 (7 U.S.C. 1445–2).

18 (3) AMOUNT.—The amount of the accelerated

19 payments made to each quota holder, quota lessee,

20 and quota tenant under this subsection shall be

21 equal to—

22 (A) the amount of the lifetime limitation

23 established for the quota holder, quota lessee,

24 or quota tenant under subsection (e); less
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1 (B) any payments for lost tobacco quota

2 received by the quota holder, quota lessee, or

3 quota tenant before the occurrence of any of

4 the events described in paragraph (2).

5 SEC. 202. INDUSTRY PAYMENTS FOR ALL DEPARTMENT

6 COSTS ASSOCIATED WITH TOBACCO PRODUC7 TION.

8 (a) IN GENERAL.—The Secretary shall use such

9 amounts as are necessary from the Trust Fund at the end

10 of each fiscal year to reimburse the Secretary for—

11 (1) costs associated with the administration of

12 programs established under this Act and amend13 ments made by this Act;

14 (2) costs associated with the administration of

15 the tobacco quota and price support programs ad16 ministered by the Secretary;

17 (3) costs to the Federal Government of carrying

18 out crop insurance programs for tobacco;

19 (4) costs associated with all agricultural re20 search, extension, or education activities associated

21 with tobacco;

22 (5) costs associated with the administration of

23 loan association and cooperative programs for to24 bacco producers, as approved by the Secretary; and
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1 (6) any other costs incurred by the Department

2 of Agriculture associated with the production of to3 bacco.

4 (b) LIMITATIONS.—Amounts made available under

5 subsection (a) may not be used—

6 (1) to provide direct benefits to quota holders,

7 quota lessees, or quota tenants; or

8 (2) in a manner that results in a decrease, or

9 an increase relative to other crops, in the amount of

10 the crop insurance premiums assessed to active to11 bacco producers under the Federal Crop Insurance

12 Act (7 U.S.C. 1501 et seq.).

13 (c) DETERMINATIONS.—Not later than September

14 30, 1998, and each fiscal year thereafter, the Secretary

15 shall determine—

16 (1) the amount of costs described in subsection

17 (a); and

18 (2) the amount that will be provided under this

19 section as reimbursement for the costs.

20 SEC. 203. TOBACCO COMMUNITY ECONOMIC DEVELOP21 MENT GRANTS.

22 (a) AUTHORITY.—The Secretary shall make grants to

23 tobacco-growing States in accordance with this section to

24 enable the States to carry out economic development ini25 tiatives in tobacco-growing communities.
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1 (b) APPLICATION.—To be eligible to receive payments

2 under this section, a State shall prepare and submit to

3 the Secretary an application at such time, in such manner,

4 and containing such information as the Secretary may re5 quire, including—

6 (1) a description of the activities that the State

7 will carry out using amounts received under the

8 grant;

9 (2) a designation of an appropriate State agen10 cy to administer amounts received under the grant;

11 and

12 (3) a description of the steps to be taken to en13 sure that the funds are distributed in accordance

14 with subsection (e).

15 (c) AMOUNT OF GRANT.—

16 (1) IN GENERAL.—From the amounts available

17 to carry out this section for a fiscal year, the Sec18 retary shall allot to each State an amount that bears

19 the same ratio to the amounts available as the total

20 income of the State derived from the production of

21 tobacco during the 1994 through 1996 marketing

22 years (as determined under paragraph (2)) bears to

23 the total income of all States derived from the pro24 duction of tobacco during the 1994 through 1996

25 marketing years.
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1 (2) TOBACCO INCOME.—For the 1994 through

2 1996 marketing years, the Secretary shall determine

3 the amount of income derived from the production

4 of tobacco in each State and in all States.

5 (d) PAYMENTS.—

6 (1) IN GENERAL.—A State that has an applica7 tion approved by the Secretary under subsection (b)

8 shall be entitled to a payment under this section in

9 an amount that is equal to its allotment under sub10 section (c).

11 (2) FORM OF PAYMENTS.—The Secretary may

12 make payments under this section to a State in in13 stallments, and in advance or by way of reimburse14 ment, with necessary adjustments on account of

15 overpayments or underpayments, as the Secretary

16 may determine.

17 (3) REALLOTMENTS.—Any portion of the allot18 ment of a State under subsection (c) that the Sec19 retary determines will not be used to carry out this

20 section in accordance with an approved State appli21 cation required under subsection (b), shall be reallot22 ted by the Secretary to other States in proportion to

23 the original allotments to the other States.

24 (e) USE AND DISTRIBUTION OF FUNDS.—
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1 (1) IN GENERAL.—Amounts received by a State

2 under this section shall be used to carry out eco3 nomic development activities, including—

4 (A) rural business enterprise activities de5 scribed in subsections (c) and (e) of section

6 310B of the Consolidated Farm and Rural De7 velopment Act (7 U.S.C. 1932);

8 (B) down payment loan assistance pro9 grams that are similar to the program described

10 in section 310E of the Consolidated Farm and

11 Rural Development Act (7 U.S.C. 1935);

12 (C) activities designed to help create pro13 ductive farm or off-farm employment in rural

14 areas to provide a more viable economic base

15 and enhance opportunities for improved in16 comes, living standards, and contributions by

17 rural individuals to the economic and social de18 velopment of tobacco communities;

19 (D) activities that expand existing infra20 structure, facilities, and services to capitalize on

21 opportunities to diversify economies in tobacco

22 communities and that support the development

23 of new industries or commercial ventures;

24 (E) activities by agricultural organizations

25 that provide assistance directly to active tobacco
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1 producers to assist in developing other agricul2 tural activities that supplement tobacco-produc3 ing activities;

4 (F) initiatives designed to create or expand

5 locally owned value-added processing and mar6 keting operations in tobacco communities; and

7 (G) technical assistance activities by per8 sons to support farmer-owned enterprises, or

9 agriculture-based rural development enterprises,

10 of the type described in section 252 or 253 of

11 the Trade Act of 1974 (19 U.S.C. 2342, 2343).

12 (2) TOBACCO-GROWING COUNTIES.—Assistance

13 may be provided by a State under this section only

14 to assist a county in the State that has been deter15 mined by the Secretary to have in excess of

16 $100,000 in income derived from the production of

17 tobacco during 1 or more of the 1994 through 1996

18 marketing years.

19 (3) DISTRIBUTION.—

20 (A) ECONOMIC DEVELOPMENT ACTIVI21 TIES.—Not less than 20 percent of the amounts

22 received by a State under this section shall be

23 used to carry out—
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1 (i) economic development activities de2 scribed in subparagraph (E) or (F) of

3 paragraph (1); or

4 (ii) agriculture-based rural develop5 ment activities described in paragraph

6 (1)(G).

7 (B) TECHNICAL ASSISTANCE ACTIVI8 TIES.—Not less than 4 percent of the amounts

9 received by a State under this section shall be

10 used to carry out technical assistance activities

11 described in paragraph (1)(G).

12 (C) TOBACCO-GROWING COUNTIES.—To be

13 eligible to receive payments under this section,

14 a State shall demonstrate to the Secretary that

15 funding will be provided, during each 5-year pe16 riod for which funding is provided under this

17 section, for activities in each county in the

18 State that has been determined under para19 graph (2) to have in excess of $100,000 in in20 come derived from the production of tobacco, in

21 amounts that are at least equal to the product

22 obtained by multiplying—

23 (i) the ratio that the tobacco produc24 tion income in the county determined

25 under paragraph (2) bears to the total to-
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1 bacco production income for the State de2 termined under subsection (c); by

3 (ii) 50 percent of the total amounts

4 received by a State under this section dur5 ing the 5-year period.

6 (f) PREFERENCES IN HIRING.—A State may require

7 recipients of funds under this section to provide a pref8 erence in employment to—

9 (1) an individual who—

10 (A) during the 1996 calendar year, was

11 employed in the manufacture, processing, or

12 warehousing of tobacco or tobacco products, or

13 resided, in a county described in subsection

14 (e)(2); and

15 (B) is eligible for assistance under the to16 bacco worker transition program established

17 under section 301; or

18 (2) an individual who—

19 (A) during the 1996 marketing year, car20 ried out tobacco quota or relevant tobacco pro21 duction activities in a county described in sub22 section (e)(2);

23 (B) is eligible for a farmer opportunity

24 grant under subpart 9 of part A of title IV of

25 the Higher Education Act of 1965; and
28

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1 (C) has successfully completed a course of

2 study at an institution of higher education.

3 SEC. 204. MODIFICATIONS IN FEDERAL TOBACCO PRO4 GRAMS.

5 (a) PROGRAM REFERENDA.—Section 312(c) of the

6 Agricultural Adjustment Act of 1938 (7 U.S.C. 1312(c))

7 is amended—

8 (1) by striking ‘‘(c) Within thirty’’ and insert9 ing the following:

10 ‘‘(c) REFERENDA ON QUOTAS.—

11 ‘‘(1) IN GENERAL.—Not later than 30’’; and

12 (2) by adding at the end the following:

13 ‘‘(2) REFERENDA ON PROGRAM CHANGES.—

14 ‘‘(A) IN GENERAL.—In the case of any

15 kind of tobacco for which marketing quotas are

16 in effect, on the receipt of a petition from more

17 than 5 percent of the producers of that kind of

18 tobacco in a State, the Secretary shall conduct

19 a statewide referendum on any proposal related

20 to the lease and transfer of tobacco quota with21 in a State requested by the petition that is au22 thorized under this part.

23 ‘‘(B) APPROVAL OF PROPOSALS.—If a ma24 jority of producers of the kind of tobacco in the

25 State approve a proposal in a referendum con-
29

•S 1310 IS

1 ducted under subparagraph (A), the Secretary

2 shall implement the proposal in a manner that

3 applies to all producers and quota holders of

4 that kind of tobacco in the State.’’.

5 (b) PURCHASE REQUIREMENTS.—Section 320B of

6 the Agricultural Adjustment Act of 1938 (7 U.S.C.

7 1314h) is amended—

8 (1) in subsection (c), by striking paragraph (1)

9 and inserting the following:

10 ‘‘(1) 105 percent of the average market price

11 for the kind of tobacco involved during the preceding

12 marketing year; by’’; and

13 (2) by striking subsection (d) and inserting the

14 following:

15 ‘‘(d) USE OF PENALTY PAYMENTS.—An amount

16 equivalent to each penalty collected by the Secretary under

17 this section shall be transmitted by the Secretary to the

18 Secretary of the Treasury for deposit in the Tobacco Com19 munity Revitalization Trust Fund established under sec20 tion 101 of the LEAF Act.’’.

21 (c) ELIMINATION OF TOBACCO MARKETING ASSESS22 MENT.—

23 (1) IN GENERAL.—Section 106 of the Agricul24 tural Act of 1949 (7 U.S.C. 1445(g)) is amended by

25 striking subsection (g).
30

•S 1310 IS

1 (2) CONFORMING AMENDMENT.—Section

2 422(c) of the Uruguay Round Agreements Act (Pub3 lic Law 103–465; 7 U.S.C. 1445 note) is amended

4 by striking ‘‘section 106(g), 106A, or 106B of the

5 Agricultural Act of 1949 (7 U.S.C. 1445(g), 1445–

6 1, or 1445–2)’’ and inserting ‘‘section 106A or

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

8 1445–1, 1445–2)’’.

9 TITLE III—FARMER AND WORK10 ER TRANSITION ASSISTANCE

11 SEC. 301. TOBACCO WORKER TRANSITION PROGRAM.

12 (a) GROUP ELIGIBILITY REQUIREMENTS.—

13 (1) CRITERIA.—A group of workers (including

14 workers in any firm or subdivision of a firm involved

15 in the manufacture, processing, or warehousing of

16 tobacco or tobacco products) shall be certified as eli17 gible to apply for adjustment assistance under this

18 section pursuant to a petition filed under subsection

19 (b) if the Secretary of Labor determines that a sig20 nificant number or proportion of the workers in such

21 workers’ firm or an appropriate subdivision of the

22 firm have become totally or partially separated, or

23 are threatened to become totally or partially sepa24 rated, and—
31

•S 1310 IS

1 (A) the sales or production, or both, of

2 such firm or subdivision have decreased abso3 lutely; and

4 (B) the implementation of the national to5 bacco settlement contributed importantly to

6 such workers’ separation or threat of separation

7 and to the decline in the sales or production of

8 such firm or subdivision.

9 (2) DEFINITION OF CONTRIBUTED IMPOR10 TANTLY.—In paragraph (1)(B), the term ‘‘contrib11 uted importantly’’ means a cause that is important

12 but not necessarily more important than any other

13 cause.

14 (3) REGULATIONS.—The Secretary shall issue

15 regulations relating to the application of the criteria

16 described in paragraph (1) in making preliminary

17 findings under subsection (b) and determinations

18 under subsection (c).

19 (b) PRELIMINARY FINDINGS AND BASIC ASSIST20 ANCE.—

21 (1) FILING OF PETITIONS.—A petition for cer22 tification of eligibility to apply for adjustment assist23 ance under this section may be filed by a group of

24 workers (including workers in any firm or subdivi25 sion of a firm involved in the manufacture, process-
32

•S 1310 IS

1 ing, or warehousing of tobacco or tobacco products)

2 or by their certified or recognized union or other

3 duly authorized representative with the Governor of

4 the State in which such workers’ firm or subdivision

5 thereof is located.

6 (2) FINDINGS AND ASSISTANCE.—Upon receipt

7 of a petition under paragraph (1), the Governor

8 shall—

9 (A) notify the Secretary that the Governor

10 has received the petition;

11 (B) within 10 days after receiving the peti12 tion—

13 (i) make a preliminary finding as to

14 whether the petition meets the criteria de15 scribed in subsection (a)(1); and

16 (ii) transmit the petition, together

17 with a statement of the finding under

18 clause (i) and reasons for the finding, to

19 the Secretary for action under subsection

20 (c); and

21 (C) if the preliminary finding under sub22 paragraph (B)(i) is affirmative, ensure that

23 rapid response and basic readjustment services

24 authorized under other Federal laws are made

25 available to the workers.
33

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1 (c) REVIEW OF PETITIONS BY SECRETARY; CERTIFI2 CATIONS.—

3 (1) IN GENERAL.—The Secretary, within 30

4 days after receiving a petition under subsection

5 (b)(2)(B)(ii), shall determine whether the petition

6 meets the criteria described in subsection (a)(1).

7 Upon a determination that the petition meets such

8 criteria, the Secretary shall issue to workers covered

9 by the petition a certification of eligibility to apply

10 for the assistance described in subsection (d).

11 (2) DENIAL OF CERTIFICATION.—Upon the de12 nial of a certification with respect to a petition

13 under paragraph (1), the Secretary shall review the

14 petition in accordance with the requirements of

15 other applicable assistance programs to determine if

16 the workers may be certified under such other provi17 sions.

18 (d) COMPREHENSIVE ASSISTANCE.—

19 (1) IN GENERAL.—Workers covered by a certifi20 cation issued by the Secretary under subsection

21 (c)(1) shall be provided with benefits and services

22 described in paragraph (2) in the same manner and

23 to the same extent as workers covered under a cer24 tification under subchapter A of title II of the Trade

25 Act of 1974 (19 U.S.C. 2271 et seq.), except that
34

•S 1310 IS

1 the total amount of payments under this section for

2 any fiscal year shall not exceed $50,000,000.

3 (2) BENEFITS AND SERVICES.—The benefits

4 and services described in this paragraph are the fol5 lowing:

6 (A) Employment services of the type de7 scribed in section 235 of the Trade Act of 1974

8 (19 U.S.C. 2295).

9 (B) Training described in section 236 of

10 the Trade Act of 1974 (19 U.S.C. 2296), ex11 cept that notwithstanding the provisions of sec12 tion 236(a)(2)(A) of such Act, the total amount

13 of payments for training under this section for

14 any fiscal year shall not exceed $25,000,000.

15 (C) Tobacco worker readjustment allow16 ances, which shall be provided in the same man17 ner as trade readjustment allowances are pro18 vided under part I of subchapter B of chapter

19 2 of title II of the Trade Act of 1974 (19

20 U.S.C. 2291 et seq.), except that—

21 (i) the provisions of sections

22 231(a)(5)(C) and 231(c) of such Act (19

23 U.S.C. 2291(a)(5)(C), 2291(c)), authoriz24 ing the payment of trade readjustment al25 lowances upon a finding that it is not fea-
35

•S 1310 IS

1 sible or appropriate to approve a training

2 program for a worker, shall not be applica3 ble to payment of allowances under this

4 section; and

5 (ii) notwithstanding the provisions of

6 section 233(b) of such Act (19 U.S.C.

7 2293(b)), in order for a worker to qualify

8 for tobacco readjustment allowances under

9 this section, the worker shall be enrolled in

10 a training program approved by the Sec11 retary of the type described in section

12 236(a) of such Act (19 U.S.C. 2296(a)) by

13 the later of—

14 (I) the last day of the 16th week

15 of such worker’s initial unemployment

16 compensation benefit period; or

17 (II) the last day of the 6th week

18 after the week in which the Secretary

19 issues a certification covering such

20 worker.

21 In cases of extenuating circumstances re22 lating to enrollment of a worker in a train23 ing program under this section, the Sec24 retary may extend the time for enrollment

25 for a period of not to exceed 30 days.
36

•S 1310 IS

1 (D) Job search allowances of the type de2 scribed in section 237 of the Trade Act of 1974

3 (19 U.S.C. 2297).

4 (E) Relocation allowances of the type de5 scribed in section 238 of the Trade Act of 1974

6 (19 U.S.C. 2298).

7 (e) INELIGIBILITY OF INDIVIDUALS RECEIVING PAY8 MENTS FOR LOST TOBACCO QUOTA.—No benefits or serv9 ices may be provided under this section to any individual

10 who has received payments for lost tobacco quota under

11 section 201.

12 (f) FUNDING.—Of the amounts in the Trust Fund,

13 the Secretary may use not to exceed $50,000,000 for each

14 of fiscal years 1999 through 2008 to provide assistance

15 under this section.

16 (g) EFFECTIVE DATE.—This section shall take effect

17 on the date that is the later of—

18 (1) October l, 1998; or

19 (2) the date on which legislation implementing

20 the national tobacco settlement is enacted.

21 (h) TERMINATION DATE.—No assistance, vouchers,

22 allowances, or other payments may be provided under this

23 section after the date that is the earlier of—

24 (1) the date that is 10 years after the effective

25 date of this section under subsection (g); or
37

•S 1310 IS

1 (2) the date on which legislation establishing a

2 program providing dislocated workers with com3 prehensive assistance substantially similar to the as4 sistance provided by this section becomes effective.

5 SEC. 302. FARMER OPPORTUNITY GRANTS.

6 Part A of title IV of the Higher Education Act of

7 1965 (20 U.S.C. 1070 et seq.) is amended by adding at

8 the end the following:

9 ‘‘Subpart 9—Farmer Opportunity Grants

10 ‘‘SEC. 420D. STATEMENT OF PURPOSE.

11 ‘‘It is the purpose of this subpart to assist in making

12 available the benefits of postsecondary education to eligi13 ble students (determined in accordance with section 420F)

14 in institutions of higher education by providing farmer op15 portunity grants to all eligible students.

16 ‘‘SEC. 420E. PROGRAM AUTHORITY; AMOUNT AND DETER17 MINATIONS; APPLICATIONS.

18 ‘‘(a) PROGRAM AUTHORITY AND METHOD OF

19 DISTRIBUTION.—

20 ‘‘(1) PROGRAM AUTHORITY.—From amounts

21 made available under section 101(d)(5) of the LEAF

22 Act, the Secretary, during the period beginning July

23 1, 1999, and ending September 30, 2024, shall pay

24 to each eligible institution such sums as may be nec25 essary to pay to each eligible student (determined in
38

•S 1310 IS

1 accordance with section 420F) for each academic

2 year during which that student is in attendance at

3 an institution of higher education, as an under4 graduate, a farmer opportunity grant in the amount

5 for which that student is eligible, as determined pur6 suant to subsection (b). Not less than 85 percent of

7 such sums shall be advanced to eligible institutions

8 prior to the start of each payment period and shall

9 be based upon an amount requested by the institu10 tion as needed to pay eligible students, except that

11 this sentence shall not be construed to limit the au12 thority of the Secretary to place an institution on a

13 reimbursement system of payment.

14 ‘‘(2) CONSTRUCTION.—Nothing in this section

15 shall be construed to prohibit the Secretary from

16 paying directly to students, in advance of the begin17 ning of the academic term, an amount for which the

18 students are eligible, in cases where the eligible in19 stitution elects not to participate in the disburse20 ment system required by paragraph (1).

21 ‘‘(3) DESIGNATION.—Grants made under this

22 subpart shall be known as ‘farmer opportunity

23 grants’.

24 ‘‘(b) AMOUNT OF GRANTS.—

25 ‘‘(1) AMOUNTS.—
39

•S 1310 IS

1 ‘‘(A) IN GENERAL.—The amount of the

2 grant for a student eligible under this subpart

3 shall be—

4 ‘‘(i) $1,700 for each of the academic

5 years 1999–2000 through 2003–2004;

6 ‘‘(ii) $2,000 for each of the academic

7 years 2004–2005 through 2008–2009;

8 ‘‘(iii) $2,300 for each of the academic

9 years 2009–2010 through 2013–2014;

10 ‘‘(iv) $2,600 for each of the academic

11 years 2014–2015 through 2018–2019; and

12 ‘‘(v) $2,900 for each of the academic

13 years 2019–2020 through 2023–2024.

14 ‘‘(B) PART-TIME RULE.—In any case

15 where a student attends an institution of higher

16 education on less than a full-time basis (includ17 ing a student who attends an institution of

18 higher education on less than a half-time basis)

19 during any academic year, the amount of the

20 grant for which that student is eligible shall be

21 reduced in proportion to the degree to which

22 that student is not so attending on a full-time

23 basis, in accordance with a schedule of reduc24 tions established by the Secretary for the pur25 poses of this subparagraph, computed in ac-
40

•S 1310 IS

1 cordance with this subpart. Such schedule of re2 ductions shall be established by regulation and

3 published in the Federal Register.

4 ‘‘(2) MAXIMUM.—No grant under this subpart

5 shall exceed the cost of attendance (as described in

6 section 472) at the institution at which that student

7 is in attendance. If, with respect to any student, it

8 is determined that the amount of a grant exceeds

9 the cost of attendance for that year, the amount of

10 the grant shall be reduced to an amount equal to the

11 cost of attendance at such institution.

12 ‘‘(3) PROHIBITION.—No grant shall be awarded

13 under this subpart to any individual who is incarcer14 ated in any Federal, State, or local penal institution.

15 ‘‘(c) PERIOD OF ELIGIBILITY FOR GRANTS.—

16 ‘‘(1) IN GENERAL.—The period during which a

17 student may receive grants shall be the period re18 quired for the completion of the first undergraduate

19 baccalaureate course of study being pursued by that

20 student at the institution at which the student is in

21 attendance, except that any period during which the

22 student is enrolled in a noncredit or remedial course

23 of study as described in paragraph (2) shall not be

24 counted for the purpose of this paragraph.
41

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1 ‘‘(2) CONSTRUCTION.—Nothing in this section

2 shall be construed to—

3 ‘‘(A) exclude from eligibility courses of

4 study that are noncredit or remedial in nature

5 and that are determined by the institution to be

6 necessary to help the student be prepared for

7 the pursuit of a first undergraduate bacca8 laureate degree or certificate or, in the case of

9 courses in English language instruction, to be

10 necessary to enable the student to utilize al11 ready existing knowledge, training, or skills;

12 and

13 ‘‘(B) exclude from eligibility programs of

14 study abroad that are approved for credit by

15 the home institution at which the student is

16 enrolled.

17 ‘‘(3) PROHIBITION.—No student is entitled to

18 receive farmer opportunity grant payments concur19 rently from more than 1 institution or from the Sec20 retary and an institution.

21 ‘‘(d) APPLICATIONS FOR GRANTS.—

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

23 time to time set dates by which students shall file

24 applications for grants under this subpart. The filing

25 of applications under this subpart shall be coordi-
42

•S 1310 IS

1 nated with the filing of applications under section

2 401(c).

3 ‘‘(2) INFORMATION AND ASSURANCES.—Each

4 student desiring a grant for any year shall file with

5 the Secretary an application for the grant containing

6 such information and assurances as the Secretary

7 may deem necessary to enable the Secretary to carry

8 out the Secretary’s functions and responsibilities

9 under this subpart.

10 ‘‘(e) DISTRIBUTION OF GRANTS TO STUDENTS.—

11 Payments under this section shall be made in accordance

12 with regulations promulgated by the Secretary for such

13 purpose, in such manner as will best accomplish the pur14 pose of this section. Any disbursement allowed to be made

15 by crediting the student’s account shall be limited to tui16 tion and fees and, in the case of institutionally owned

17 housing, room and board. The student may elect to have

18 the institution provide other such goods and services by

19 crediting the student’s account.

20 ‘‘(f) INSUFFICIENT FUNDING.—If, for any fiscal

21 year, the funds made available to carry out this subpart

22 from the Tobacco Community Revitalization Trust Fund

23 are insufficient to satisfy fully all grants for students de24 termined to be eligible under section 420F, the amount
43

•S 1310 IS

1 of the grant provided under subsection (b) shall be re2 duced on a pro rata basis among all eligible students.

3 ‘‘(g) TREATMENT OF INSTITUTIONS AND STUDENTS

4 UNDER OTHER LAWS.—Any institution of higher edu5 cation that enters into an agreement with the Secretary

6 to disburse to students attending that institution the

7 amounts those students are eligible to receive under this

8 subpart shall not be deemed, by virtue of such agreement,

9 to be a contractor maintaining a system of records to ac10 complish a function of the Secretary. Recipients of farmer

11 opportunity grants shall not be considered to be individual

12 grantees for purposes of the Drug-Free Workplace Act of

13 1988 (41 U.S.C. 701 et seq.).

14 ‘‘SEC. 420F. STUDENT ELIGIBILITY.

15 ‘‘(a) IN GENERAL.—In order to receive any grant

16 under this subpart, a student shall—

17 ‘‘(1) be a member of a tobacco farm family in

18 accordance with subsection (b);

19 ‘‘(2) be enrolled or accepted for enrollment in

20 a degree, certificate, or other program (including a

21 program of study abroad approved for credit by the

22 eligible institution at which such student is enrolled)

23 leading to a recognized educational credential at an

24 institution of higher education that is an eligible in-
44

•S 1310 IS

1 stitution in accordance with section 487, and not be

2 enrolled in an elementary or secondary school;

3 ‘‘(3) if the student is presently enrolled at an

4 institution of higher education, be maintaining satis5 factory progress in the course of study the student

6 is pursuing in accordance with subsection (c);

7 ‘‘(4) not owe a refund on grants previously re8 ceived at any institution of higher education under

9 this title, or be in default on any loan from a stu10 dent loan fund at any institution provided for in

11 part D, or a loan made, insured, or guaranteed by

12 the Secretary under this title for attendance at any

13 institution;

14 ‘‘(5) file with the institution of higher education

15 that the student intends to attend, or is attending,

16 a document, that need not be notarized, but that

17 shall include—

18 ‘‘(A) a statement of educational purpose

19 stating that the money attributable to such

20 grant will be used solely for expenses related to

21 attendance or continued attendance at such in22 stitution; and

23 ‘‘(B) such student’s social security num24 ber; and

25 ‘‘(6) be a citizen of the United States.
45

•S 1310 IS

1 ‘‘(b) TOBACCO FARM FAMILIES.—

2 ‘‘(1) IN GENERAL.—For the purpose of sub3 section (a)(1), a student is a member of a tobacco

4 farm family if during calendar year 1996 the stu5 dent was—

6 ‘‘(A) an individual who—

7 ‘‘(i) is an active tobacco producer (as

8 defined in section 2 of the LEAF Act); or

9 ‘‘(ii) is otherwise actively engaged in

10 the production of tobacco;

11 ‘‘(B) a spouse, son, daughter, stepson, or

12 stepdaughter of an individual described in sub13 paragraph (A);

14 ‘‘(C) an individual—

15 ‘‘(i) who was a brother, sister, step16 brother, stepsister, son-in-law, or daughter17 in-law of an individual described in sub18 paragraph (A); and

19 ‘‘(ii) whose principal place of resi20 dence was the home of the individual de21 scribed in subparagraph (A); or

22 ‘‘(D) an individual who was a dependent

23 (within the meaning of section 152 of the Inter24 nal Revenue Code of 1986) of an individual de25 scribed in subparagraph (A).
46

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1 ‘‘(2) ADMINISTRATION.—On request, the Sec2 retary of Agriculture shall provide to the Secretary

3 such information as is necessary to carry out this

4 subsection.

5 ‘‘(c) SATISFACTORY PROGRESS.—

6 ‘‘(1) IN GENERAL.—For the purpose of sub7 section (a)(3), a student is maintaining satisfactory

8 progress if—

9 ‘‘(A) the institution at which the student is

10 in attendance reviews the progress of the stu11 dent at the end of each academic year, or its

12 equivalent, as determined by the institution;

13 and

14 ‘‘(B) the student has at least a cumulative

15 C average or its equivalent, or academic stand16 ing consistent with the requirements for grad17 uation, as determined by the institution, at the

18 end of the second such academic year.

19 ‘‘(2) SPECIAL RULE.—Whenever a student fails

20 to meet the eligibility requirements of subsection

21 (a)(3) as a result of the application of this sub22 section and subsequent to that failure the student

23 has academic standing consistent with the require24 ments for graduation, as determined by the institu25 tion, for any grading period, the student may, sub-
47

•S 1310 IS

1 ject to this subsection, again be eligible under sub2 section (a)(3) for a grant under this subpart.

3 ‘‘(3) WAIVER.—Any institution of higher edu4 cation at which the student is in attendance may

5 waive paragraph (1) or (2) for undue hardship based

6 on—

7 ‘‘(A) the death of a relative of the student;

8 ‘‘(B) the personal injury or illness of the

9 student; or

10 ‘‘(C) special circumstances as determined

11 by the institution.

12 ‘‘(d) STUDENTS WHO ARE NOT SECONDARY SCHOOL

13 GRADUATES.—In order for a student who does not have

14 a certificate of graduation from a school providing second15 ary education, or the recognized equivalent of such certifi16 cate, to be eligible for any assistance under this subpart,

17 the student shall meet either 1 of the following standards:

18 ‘‘(1) EXAMINATION.—The student shall take an

19 independently administered examination and shall

20 achieve a score, specified by the Secretary, dem21 onstrating that such student can benefit from the

22 education or training being offered. Such examina23 tion shall be approved by the Secretary on the basis

24 of compliance with such standards for development,
48

•S 1310 IS

1 administration, and scoring as the Secretary may

2 prescribe in regulations.

3 ‘‘(2) DETERMINATION.—The student shall be

4 determined as having the ability to benefit from the

5 education or training in accordance with such proc6 ess as the State shall prescribe. Any such process

7 described or approved by a State for the purposes of

8 this section shall be effective 6 months after the date

9 of submission to the Secretary unless the Secretary

10 disapproves such process. In determining whether to

11 approve or disapprove such process, the Secretary

12 shall take into account the effectiveness of such

13 process in enabling students without secondary

14 school diplomas or the recognized equivalent to bene15 fit from the instruction offered by institutions utiliz16 ing such process, and shall also take into account

17 the cultural diversity, economic circumstances, and

18 educational preparation of the populations served by

19 the institutions.

20 ‘‘(e) SPECIAL RULE FOR CORRESPONDENCE

21 COURSES.—A student shall not be eligible to receive a

22 grant under this subpart for a correspondence course un23 less such course is part of a program leading to an associ24 ate, bachelor, or graduate degree.
49

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1 ‘‘(f) COURSES OFFERED THROUGH TELECOMMUNI2 CATIONS.—

3 ‘‘(1) RELATION TO CORRESPONDENCE

4 COURSES.—A student enrolled in a course of in5 struction at an eligible institution of higher edu6 cation (other than an institute or school that meets

7 the definition in section 521(4)(C) of the Carl D.

8 Perkins Vocational and Applied Technology Edu9 cation Act (20 U.S.C. 2471(4)(C))) that is offered

10 in whole or in part through telecommunications and

11 leads to a recognized associate, bachelor, or graduate

12 degree conferred by such institution shall not be

13 considered to be enrolled in correspondence courses

14 unless the total amount of telecommunications and

15 correspondence courses at such institution equals or

16 exceeds 50 percent of such courses.

17 ‘‘(2) RESTRICTION OR REDUCTIONS OF FINAN18 CIAL AID.—A student’s eligibility to receive a grant

19 under this subpart may be reduced if a financial aid

20 officer determines under the discretionary authority

21 provided in section 479A that telecommunications

22 instruction results in a substantially reduced cost of

23 attendance to such student.

24 ‘‘(3) DEFINITION.—For the purposes of this

25 subsection, the term ‘telecommunications’ means the
50

•S 1310 IS

1 use of television, audio, or computer transmission,

2 including open broadcast, closed circuit, cable,

3 microwave, or satellite, audio conferencing, computer

4 conferencing, or video cassettes or discs, except that

5 such term does not include a course that is delivered

6 using video cassette or disc recordings at such insti7 tution and that is not delivered in person to other

8 students of that institution.

9 ‘‘(g) STUDY ABROAD.—Nothing in this subpart shall

10 be construed to limit or otherwise prohibit access to study

11 abroad programs approved by the home institution at

12 which a student is enrolled. An otherwise eligible student

13 who is engaged in a program of study abroad approved

14 for academic credit by the home institution at which the

15 student is enrolled shall be eligible to receive a grant under

16 this subpart, without regard to whether such study abroad

17 program is required as part of the student’s degree

18 program.

19 ‘‘(h) VERIFICATION OF SOCIAL SECURITY NUM20 BER.—The Secretary, in cooperation with the Commis21 sioner of Social Security, shall verify any social security

22 number provided by a student to an eligible institution

23 under subsection (a)(5)(B) and shall enforce the following

24 conditions:
51

•S 1310 IS

1 ‘‘(1) PENDING VERIFICATION.—Except as pro2 vided in paragraphs (2) and (3), an institution shall

3 not deny, reduce, delay, or terminate a student’s eli4 gibility for assistance under this subpart because so5 cial security number verification is pending.

6 ‘‘(2) DENIAL OR TERMINATION.—If there is a

7 determination by the Secretary that the social secu8 rity number provided to an eligible institution by a

9 student is incorrect, the institution shall deny or ter10 minate the student’s eligibility for any grant under

11 this subpart until such time as the student provides

12 documented evidence of a social security number

13 that is determined by the institution to be correct.

14 ‘‘(3) CONSTRUCTION.—Nothing in this sub15 section shall be construed to permit the Secretary to

16 take any compliance, disallowance, penalty, or other

17 regulatory action against—

18 ‘‘(A) any institution of higher education

19 with respect to any error in a social security

20 number, unless such error was a result of fraud

21 on the part of the institution; or

22 ‘‘(B) any student with respect to any error

23 in a social security number, unless such error

24 was a result of fraud on the part of the

25 student.’’.
52

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1 TITLE IV—IMMUNITY

2 SEC. 401. GENERAL IMMUNITY FOR TOBACCO PRODUCERS

3 AND WAREHOUSERS.

4 Notwithstanding any other provision of this Act, an

5 active tobacco producer, tobacco-related growers associa6 tion, or tobacco warehouse owner or employee may not be

7 subject to liability in any Federal or State court for any

8 cause of action resulting from the failure of any tobacco

9 product manufacturer, distributor, or retailer to comply

10 with national tobacco settlement legislation.

Æ