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[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 1313 Introduced in Senate (IS)]

105th CONGRESS
  1st Session
                                S. 1313

   To provide market transition assistance to quota owners, tobacco 
producers, and communities that are dependent on tobacco production, to 
  phase out Federal programs that support tobacco production, and for 
                            other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                            October 24, 1997

   Mr. Lugar 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 to quota owners, tobacco 
producers, and communities that are dependent on tobacco production, to 
  phase out Federal programs that support tobacco production, and for 
                            other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Tobacco Transition 
Act''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Purposes.
Sec. 3. Definitions.
                 TITLE I--TOBACCO PRODUCTION TRANSITION

                Subtitle A--Tobacco Transition Contracts

Sec. 101. Tobacco Transition Account.
Sec. 102. Offer and terms of tobacco transition contracts.
Sec. 103. Elements of contracts.
Sec. 104. Buyout payments to owners.
Sec. 105. Transition payments to producers.
           Subtitle B--Rural Economic Assistance Block Grants

Sec. 111. Rural economic assistance block grants.
   TITLE II--TOBACCO PRICE SUPPORT AND PRODUCTION ADJUSTMENT PROGRAMS

               Subtitle A--Tobacco Price Support Program

Sec. 201. Interim reform of tobacco price support program.
Sec. 202. Termination of tobacco price support program.
           Subtitle B--Tobacco Production Adjustment Programs

Sec. 211. Termination of tobacco production adjustment programs.
                           TITLE III--FUNDING

Sec. 301. Trust Fund.
Sec. 302. Commodity Credit Corporation.

SEC. 2. PURPOSES.

    The purposes of this Act are--
            (1) to authorize the use of binding contracts between the 
        United States and tobacco quota owners and tobacco producers to 
        compensate them for the termination of Federal programs that 
        support the production of tobacco in the United States;
            (2) to make available to States funds for economic 
        assistance initiatives in counties of States that are dependent 
        on the production of tobacco; and
            (3) to terminate Federal programs that support the 
        production of tobacco in the United States.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Association.--The term ``association'' means a 
        producer-owned cooperative marketing association that has 
        entered into a loan agreement with the Commodity Credit 
        Corporation to make price support available to producers.
            (2) Buyout payment.--The term ``buyout payment'' means a 
        payment made to a quota owner under section 104 in 1 or more 
        installments in accordance with section 102(c)(1).
            (3) Contract.--The term ``contract'' or ``tobacco 
        transition contract'' means a contract entered into under 
        section 102.
            (4) Governor.--The term ``Governor'' means the chief 
        executive officer of a State.
            (5) Lease.--The term ``lease'' means a rental of quota on 
        either a cash rent or crop share basis.
            (6) Marketing year.--The term ``marketing year'' means--
                    (A) in the case of Flue-cured tobacco, the period 
                beginning July 1 and ending the following June 30; and
                    (B) in the case of each other kind of tobacco, the 
                period beginning October 1 and ending the following 
                September 30.
            (7) Owner.--The term ``owner'' means a person who, at the 
        time of entering into a tobacco transition contract, owns quota 
        provided by the Secretary.
            (8) Phaseout period.--The term ``phaseout period'' means 
        the 3-year period consisting of the 1999 through 2001 marketing 
        years.
            (9) Price support.--The term ``price support'' means a 
        nonrecourse loan provided by the Commodity Credit Corporation 
        through an association for the kind of tobacco involved.
            (10) Producer.--The term ``producer'' means a person who 
        during at least 3 of the 1993 through 1997 crops of tobacco (as 
        determined by the Secretary) that were subject to quota--
                    (A) leased quota;
                    (B) shared in the risk of producing a crop of 
                tobacco; and
                    (C) marketed the tobacco subject to quota.
            (11) Quota.--The term ``quota'' means the quantity of 
        tobacco produced in the United States, and marketed during a 
        marketing year, that will be used in, or exported from, the 
        United States during the marketing year (including an 
        adjustment for stocks), as estimated by the Secretary.
            (12) Secretary.--The term ``Secretary'' means the Secretary 
        of Agriculture.
            (13) State.--The term ``State'' means each of the several 
        States of the United States, the District of Columbia, the 
        Commonwealth of Puerto Rico, and any other territory or 
        possession of the United States.
            (14) Tobacco.--The term ``tobacco'' means any kind of 
        tobacco for which a marketing quota is in effect or for which a 
        marketing quota is not disapproved by producers.
            (15) Tobacco transition account.--The term ``Tobacco 
        Transition Account'' means the Tobacco Transition Account 
        established by section 101(a).
            (16) Transition payment.--The term ``transition payment'' 
        means a payment made to a producer under section 105 for each 
        of the 1999 through 2001 marketing years.
            (17) Trust fund.--The term ``Trust Fund'' means the 
        National Tobacco Settlement Trust Fund established in the 
        Treasury of the United States consisting of amounts that are 
        appropriated or credited to the Trust Fund from the tobacco 
        settlement approved by Congress.
            (18) United states.--The term ``United States'', when used 
        in a geographical sense, means all of the States.

                 TITLE I--TOBACCO PRODUCTION TRANSITION

                Subtitle A--Tobacco Transition Contracts

SEC. 101. TOBACCO TRANSITION ACCOUNT.

    (a) Establishment.--There is established in the Trust Fund a 
Tobacco Transition Account.
    (b) Use.--Funds appropriated or credited to the Tobacco Transition 
Account shall be available for providing buyout payments and transition 
payments authorized under this subtitle.
    (c) Termination.--The Tobacco Transition Account terminates 
effective September 30, 2001.

SEC. 102. OFFER AND TERMS OF TOBACCO TRANSITION CONTRACTS.

    (a) Offer.--The Secretary shall offer to enter into a tobacco 
transition contract with each owner and producer of tobacco.
    (b) Terms.--Under the terms of a contract, the owner or producer 
shall agree, in exchange for a payment made pursuant to section 104 or 
105, as applicable, to relinquish the value of quota that is owned or 
leased.
    (c) Rights of Owners and Producers.--
            (1) Owners.--An owner shall elect to receive a buyout 
        payment in--
                    (A) 1 installment for the kind of tobacco involved, 
                in exchange for permanently foregoing production of 
                tobacco; or
                    (B) 3 equal installments, 1 installment for each of 
                the 1999 through 2001 crops of tobacco, in which case 
                the owner shall have the right to continue production 
                of each of those crops.
            (2) Producers.--In the case of each of the 1999 through 
        2001 crops for the kind of tobacco involved, a producer who is 
        not an owner during the 1998 marketing year for the kind of 
        tobacco involved shall not be subject to any restrictions on 
        the quantity of tobacco produced or marketed.

SEC. 103. ELEMENTS OF CONTRACTS.

    (a) Deadlines for Contracting.--
            (1) Commencement.--To the maximum extent practicable, the 
        Secretary shall commence entering into contracts under this 
        subtitle not later than 90 days after the date of enactment of 
        this Act.
            (2) Deadline.--The Secretary may not enter into a contract 
        under this subtitle after June 31, 1999.
    (b) Duration of Contract.--
            (1) Beginning date.--The term of a contract shall begin on 
        the date that is the beginning of the 1999 marketing year for 
        the kind of tobacco involved.
            (2) Termination date.--
                    (A) In general.--Except as provided in subparagraph 
                (B), the term of a contract shall terminate on the date 
                that is the end of the 2001 marketing year for the kind 
                of tobacco involved.
                    (B) Exception.--In the case of an owner who enters 
                into a contract and elects to receive a buyout payment 
                in 1 installment under section 102(c)(1)(A), the 
                contract shall be permanent.
    (c) Time for Payment.--
            (1) In general.--A buyout payment or transition payment 
        shall be made not later than the date that is the beginning of 
        the marketing year for the kind of tobacco involved for each 
        year of the term of a tobacco transition contract of an owner 
or producer of tobacco.
            (2) Applicability.--This subsection shall be applicable to 
        all payments covered by section 102(c).

SEC. 104. BUYOUT PAYMENTS TO OWNERS.

    (a) In General.--During the phaseout period, the Secretary shall 
make buyout payments to owners in accordance with section 102(c)(1).
    (b) Compensation for Lost Value.--The payment shall constitute 
compensation for the lost value to the owner of the quota.
    (c) Payment Calculation.--Under this section, the total amount of 
the buyout payment made to an owner shall be determined by 
multiplying--
            (1) $8.00; by
            (2) the average annual quantity of quota owned by the owner 
        during the 1995 through 1997 crop years.

SEC. 105. TRANSITION PAYMENTS TO PRODUCERS.

    (a) In General.--The Secretary shall make transition payments 
during each of the 1999 through 2001 marketing years for a kind of 
tobacco that was subject to a quota to a producer who--
            (1) produced the kind of tobacco during at least 3 of the 
        1993 through 1997 crop years; and
            (2) entered into a tobacco transition contract.
    (b) Transition Payments Limited to Leased Quota.--A producer shall 
be eligible for transition payments only for the portion of the 
production of the producer that is subject to quota that is leased 
during the 3 crop years described in subsection (a)(1).
    (c) Compensation for Lost Revenue.--The payments shall constitute 
compensation for the lost revenue incurred by a tobacco producer during 
each of the 1999 through 2001 marketing years for the kind of tobacco 
involved.
    (d) Election by Producer; Production.--
            (1) Election.--The producer may elect which 3 of the 1993 
        through 1997 crop years shall be used for the calculation under 
        subsection (e).
            (2) Production.--The producer shall have the burden of 
        demonstrating to the Secretary the production of tobacco for 
        each year of the election.
    (e) Payment Calculation.--Under this section, each of the 3 
transition payments made to a producer for the kind of tobacco involved 
shall be determined by multiplying--
            (1) 40 cents; by
            (2) the average quantity of the kind of tobacco produced by 
        the producer during the 3 crop years elected by the producer 
        under subsection (d).

           Subtitle B--Rural Economic Assistance Block Grants

SEC. 111. RURAL ECONOMIC ASSISTANCE BLOCK GRANTS.

    (a) In General.--For each of fiscal years 1999 through 2001, the 
Secretary shall use funds in the Tobacco Transition Account to provide 
block grants to tobacco-growing States to assist areas of such a State 
that are economically dependent on the production of tobacco.
    (b) Funding.--To carry out this section, there shall be credited to 
the Tobacco Transition Account, from the Trust Fund, $100,000,000 for 
each of fiscal years 1999 through 2001.
    (c) Payments by Secretary to Tobacco-Growing States.--
            (1) In general.--The Secretary shall use the amount 
        available for a fiscal year under subsection (b) to make block 
        grant payments to the Governors of tobacco-growing States.
            (2) Amount.--The amount of a block grant paid to a tobacco-
        growing State shall be based on--
                    (A) the number of counties in the State in which 
                tobacco production is a significant part of the 
                county's economy; and
                    (B) the level of economic dependence of the county 
                on tobacco production.
    (d) Grants by States To Assist Tobacco-Growing Areas.--
            (1) In general.--A Governor of a tobacco-growing State 
        shall use the amount of the block grant to the State under 
        subsection (c) to make grants to counties or other public or 
        private entities in the State to assist areas that are 
        dependent on the production of tobacco, as determined by the 
        Governor.
            (2) Amount.--The amount of a grant paid to a county or 
        other entity to assist an area shall be based on (as determined 
        by the Secretary)--
                    (A) the ratio of gross tobacco sales receipts in 
                the area to the total farm income in the area; and
                    (B) the ratio of all tobacco related receipts in 
                the area to the total income in the area.
            (3) Use of grants.--A county or other entity that receives 
        a grant under this subsection shall use the grant in a manner 
        determined appropriate by the county or entity (with the 
approval of the State) to assist producers and other persons who are 
economically dependent on the production of tobacco, including use 
for--
                    (A) on-farm diversification and alternatives to the 
                production of tobacco and risk management; and
                    (B) off-farm activities such as development of non-
                tobacco related jobs.
    (e) Termination of Authority.--The authority provided by this 
section terminates October 1, 2001.

   TITLE II--TOBACCO PRICE SUPPORT AND PRODUCTION ADJUSTMENT PROGRAMS

               Subtitle A--Tobacco Price Support Program

SEC. 201. INTERIM REFORM OF TOBACCO PRICE SUPPORT PROGRAM.

    (a) Price Support Rates.--Section 106 of the Agricultural Act of 
1949 (7 U.S.C. 1445) is amended--
            (1) by striking subsection (a) and inserting the following:
    ``(a) In General.--The price support rate for each kind of tobacco 
for which quotas have been approved shall be reduced by--
            ``(1) for the 1999 crop, 25 percent from the 1998 support 
        rate for the kind of tobacco involved;
            ``(2) for the 2000 crop, 10 percent from the 1999 support 
        rate for the kind of tobacco involved; and
            ``(3) for the 2001 crop, 10 percent from the 2000 support 
        rate for the kind of tobacco involved.'';
            (2) by striking subsections (b) and (f); and
            (3) by redesignating subsections (c), (d), and (g) as 
        subsections (b), (c), and (d), respectively.
    (b) Budget Deficit Assessment.--Section 106 of the Agricultural Act 
of 1949 (7 U.S.C. 1445) (as amended by subsection (a)(3)) is amended by 
striking subsection (d) and inserting the following:
    ``(d) Tobacco Transition Payment.--Effective only for the 1998 crop 
of tobacco, the Secretary of the Treasury shall transfer from the 
Tobacco Transition Account of the National Tobacco Settlement Trust 
Fund an amount equal to the product obtained by multiplying--
            ``(1) the amount per pound equal to 2 percent of the 
        national price support level for each kind of tobacco for which 
        price support is made available under this Act; and
            ``(2) the total quantity of the kind of tobacco that is 
        produced or purchased in, or imported into, the United 
        States.''.
    (c) No Net Cost Tobacco Fund and Account.--
            (1) No net cost tobacco fund.--Section 106A of the 
        Agricultural Act of 1949 (7 U.S.C. 1445-1) is amended to read 
        as follows:

``SEC. 106A. NO NET COST TOBACCO FUND.

    ``(a) Definitions.--In this section:
            ``(1) Association.--The term `association' means a 
        producer-owned cooperative marketing association that has 
        entered into a loan agreement with the Corporation to make 
        price support available to producers of a kind of tobacco.
            ``(2) Corporation.--The term `Corporation' means the 
        Commodity Credit Corporation, an agency and instrumentality of 
        the United States within the Department of Agriculture through 
        which the Secretary makes price support available to producers.
            ``(3) Net gains.--The term `net gains' means the amount by 
        which the total proceeds obtained from the sale by an 
        association of a crop of quota tobacco pledged to the 
        Corporation for a price support loan exceeds the principal 
        amount of the price support loan made by the Corporation to the 
        association on the crop, plus interest, charges, and costs of 
        administering the price support program.
            ``(4) No net cost tobacco fund.--The term `No Net Cost 
        Tobacco Fund' means the capital account established within each 
        association under this section.
            ``(5) Purchaser.--The term `purchaser' means any person who 
        purchases in the United States, either directly or indirectly 
        for the account of the person or another person, Flue-cured or 
        burley quota tobacco.
            ``(6) Quota tobacco.--The term `quota tobacco' means any 
        kind of tobacco for which marketing quotas are in effect or for 
        which marketing quotas are not disapproved by producers.
            ``(7) Trust fund.--The term `Trust Fund' means the National 
        Tobacco Settlement Trust Fund established in the Treasury of 
        the United States consisting of amounts that are appropriated 
        or credited to the Trust Fund from the tobacco settlement 
        approved by Congress.
    ``(b) Price Support Program; Loans.--The Secretary--
            ``(1) may carry out the tobacco price support program 
        through the Corporation; and
            ``(2) shall, except as otherwise provided by this section, 
        continue to make price support available to producers through 
        loans to associations that, under agreements with the 
        Corporation, agree to make loan advances to producers.
    ``(c) Establishment of Fund.--
            ``(1) In general.--Each association shall establish within 
        the association a No Net Cost Tobacco Fund.
            ``(2) Amount.--There shall be transferred from the Trust 
        Fund to each No Net Cost Tobacco Fund such amount as the 
        Secretary determines will be adequate to reimburse the 
        Corporation for any net losses that the Corporation may sustain 
        under its loan agreements with the association, based on--
                    ``(A) reasonable estimates of the amounts that the 
                Corporation has lent or will lend to the association 
                for price support for the 1982 and subsequent crops of 
                quota tobacco, except that for the 1986 and subsequent 
                crops of burley quota tobacco, the Secretary shall 
                determine the amount of assessments without regard to 
                any net losses that the Corporation may sustain under 
                the loan agreements of the Corporation with the 
                association for the 1983 crop of burley quota tobacco;
                    ``(B) the cost of administering the tobacco price 
                support program (as determined by the Secretary); and
                    ``(C) the proceeds that will be realized from the 
                sales of tobacco that are pledged to the Corporation by 
                the association as security for loans.
    ``(d) Administration.--The Secretary shall--
            ``(1) require that the No Net Cost Tobacco Fund established 
        by each association be kept and maintained separately from all 
        other accounts of the association and be used exclusively, as 
        prescribed by the Secretary, for the purpose of ensuring, 
        insofar as practicable, that the Corporation, under its loan 
        agreements with the association with respect to 1982 and 
        subsequent crops of quota tobacco, will suffer no net losses 
        (including recovery of the amount of loans extended to cover 
        the overhead costs of the association), after any net gains are 
        applied to net losses of the Corporation under paragraph (3), 
        except that, notwithstanding any other provision of law, the 
        association may, with the approval of the Secretary, use funds 
        in the No Net Cost Tobacco Fund, including interest and other 
        earnings, for--
                    ``(A) the purposes of reducing the association's 
                outstanding indebtedness to the Corporation associated 
                with 1982 and subsequent crops of quota tobacco and 
                making loan advances to producers as authorized; and
                    ``(B) any other purposes that will be mutually 
                beneficial to producers and purchasers and to the 
                Corporation;
            ``(2) permit an association to invest the funds in the No 
        Net Cost Tobacco Fund in such manner as the Secretary may 
        approve, and require that the interest or other earnings on the 
        investment shall become a part of the No Net Cost Tobacco Fund;
            ``(3) require that loan agreements between the Corporation 
        and the association provide that the Corporation shall retain 
        the net gains from each of the 1982 and subsequent crops of 
        tobacco pledged by the association as security for price 
        support loans, and that the net gains will be used for the 
        purpose of--
                    ``(A) offsetting any losses sustained by the 
                Corporation under its loan agreements with the 
                association for any of the 1982 and subsequent crops of 
                tobacco; or
                    ``(B) reducing the outstanding balance of any price 
                support loan made by the Corporation to the association 
                under the loan agreements for 1982 and subsequent crops 
                of tobacco; and
            ``(4) effective for the 1986 and subsequent crops of quota 
        tobacco, if the Secretary determines that the amount in the No 
        Net Cost Tobacco Fund or the net gains referred to in paragraph 
        (3) exceeds the total amount necessary for the purposes 
        specified in this section, suspend the transfer of amounts from 
        the Trust Fund to the No Net Cost Tobacco Fund under this 
        section.
    ``(e) Noncompliance.--
            ``(1) In general.--If any association that has entered into 
        a loan agreement with the Corporation with respect to any of 
        the 1982 or subsequent crops of quota tobacco fails or refuses 
        to comply with this section (including regulations promulgated 
        under this section) or the terms of the agreement, the 
        Secretary may terminate the agreement or provide that no 
        additional loan funds may be made available under the agreement 
        to the association.
            ``(2) Price support.--If the Secretary takes action under 
        paragraph (1), the Secretary shall make price support available 
        to producers of the kind or kinds of tobacco, the price of 
        which had been supported through loans to the association, 
        through such other means as are authorized by this Act or the 
        Commodity Credit Corporation Charter Act (15 U.S.C. 714 et 
        seq.).
    ``(f) Termination of Agreement or Association.--If, under 
subsection (e), a loan agreement with an association is terminated, or 
if an association having a loan agreement with the Corporation is 
dissolved, merges with another association, or otherwise ceases to 
operate, the No Net Cost Tobacco Fund or the net gains referred to in 
subsection (d)(3) shall be applied or disposed of in such manner as the 
Secretary may approve or prescribe, except that the net gains shall, to 
the extent necessary, first be applied or used for the purposes 
specified in this section.
    ``(g) Regulations.--The Secretary shall issue such regulations as 
are necessary to carry out this section.''.
            (2) No net cost tobacco account.--Section 106B of the 
        Agricultural Act of 1949 (7 U.S.C. 1445-2) is amended to read 
        as follows:

``SEC. 106B. NO NET COST TOBACCO ACCOUNT.

    ``(a) Definitions.--In this section:
            ``(1) Area.--The term `area', when used in connection with 
        an association, means the general geographical area in which 
        farms of the producer-members of the association are located, 
        as determined by the Secretary.
            ``(2) Association.--The term `association' has the meaning 
        given the term in section 106A(a)(1).
            ``(3) Corporation.--The term `Corporation' has the meaning 
        given the term in section 106A(a)(2).
            ``(4) Net gains.--The term `net gains' has the meaning 
        given the term in section 106A(a)(3).
            ``(5) No net cost tobacco account.--The term `No Net Cost 
        Tobacco Account' means an account established by and in the 
        Corporation for an association under this section.
            ``(6) Purchaser.--The term `purchaser' has the meaning 
        given the term in section 106A(a)(5).
            ``(7) Tobacco.--The term `tobacco' means any kind of 
        tobacco (as defined in section 301(b) of the Agricultural 
        Adjustment Act of 1938 (7 U.S.C. 1301(b))) for which marketing 
        quotas are in effect or for which marketing quotas are not 
        disapproved by producers.
            ``(8) Trust fund.--The term `Trust Fund' has the meaning 
        given the term in section 106A(a)(7).
    ``(b) Price Support Program; Loans.--Notwithstanding section 106A, 
the Secretary shall, on the request of any association, and may, if the 
Secretary determines, after consultation with the association, that the 
accumulation of the No Net Cost Tobacco Fund for the association under 
section 106A is, and is likely to remain, inadequate to reimburse the 
Corporation for net losses that the Corporation sustains under its loan 
agreements with the association--
            ``(1) continue to make price support available to producers 
        through the association in accordance with loan agreements 
        entered into between the Corporation and the association; and
            ``(2) establish and maintain in accordance with this 
        section a No Net Cost Tobacco Account for the association in 
        lieu of the No Net Cost Tobacco Fund established within the 
        association under section 106A.
    ``(c) Establishment of Account.--
            ``(1) In general.--A No Net Cost Tobacco Account 
        established for an association under subsection (b)(2) shall be 
        established within the Corporation.
            ``(2) Amount.--There shall be transferred from the Trust 
        Fund to each No Net Cost Tobacco Account such amount as the 
        Secretary determines will be adequate to reimburse the 
        Corporation for any net losses that the Corporation may sustain 
        under its loan agreements with the association, based on--
                    ``(A) reasonable estimates of the amounts that the 
                Corporation has lent or will lend to the association 
                for price support for the 1982 and subsequent crops of 
                quota tobacco, except that for the 1986 and subsequent 
                crops of burley quota tobacco, the Secretary shall 
                determine the amount of assessments without regard to 
                any net losses that the Corporation may sustain under 
                the loan agreements of the Corporation with the 
                association for the 1983 crop of burley quota tobacco;
                    ``(B) the cost of administering the tobacco price 
                support program (as determined by the Secretary); and
                    ``(C) the proceeds that will be realized from the 
                sales of the kind of tobacco involved that are pledged 
to the Corporation by the association as security for loans.
            ``(3) Administration.--On the establishment of a No Net 
        Cost Tobacco Account for an association, any amount in the No 
        Net Cost Tobacco Fund established within the association under 
        section 106A shall be applied or disposed of in such manner as 
        the Secretary may approve or prescribe, except that the amount 
        shall, to the extent necessary, first be applied or used for 
        the purposes specified in that section.
    ``(d) Use.--Amounts deposited in a No Net Cost Tobacco Account 
established for an association shall be used by the Secretary for the 
purpose of ensuring, insofar as practicable, that the Corporation under 
its loan agreements with the association will suffer, with respect to 
the crop involved, no net losses (including recovery of the amount of 
loans extended to cover the overhead costs of the association), after 
any net gains are applied to net losses of the Corporation under 
subsection (g).
    ``(e) Excess Amounts.--If the Secretary determines that the amount 
in the No Net Cost Tobacco Account or the net gains referred to in 
subsection (g) exceed the total amount necessary to carry out this 
section, the Secretary shall suspend the transfer of amounts from the 
Trust Fund to the No Net Cost Tobacco Account under this section.
    ``(f) Termination of Agreement or Association.--In the case of an 
association for which a No Net Cost Tobacco Account is established 
under subsection (b)(2), if a loan agreement between the Corporation 
and the association is terminated, if the association is dissolved or 
merges with another association that has entered into a loan agreement 
with the Corporation to make price support available to producers of 
the kind of tobacco involved, or if the No Net Cost Tobacco Account 
terminates by operation of law, amounts in the No Net Cost Tobacco 
Account and the net gains referred to in subsection (g) shall be 
applied to or disposed of in such manner as the Secretary may 
prescribe, except that the net gains shall, to the extent necessary, 
first be applied to or used for the purposes specified in this section.
    ``(g) Net Gains.--The provisions of section 106A(d)(3) relating to 
net gains shall apply to any loan agreement between an association and 
the Corporation entered into on or after the establishment of a No Net 
Cost Tobacco Account for the association under subsection (b)(2).
    ``(h) Regulations.--The Secretary shall issue such regulations as 
are necessary to carry out this section.''.
            (3) Conforming amendments.--
                    (A) Section 314(a) of the Agricultural Adjustment 
                Act of 1938 (7 U.S.C. 1314(a)) is amended in the first 
                sentence--
                            (i) by striking ``(1)''; and
                            (ii) by striking ``, or (2)'' and all that 
                        follows through ``106B(d)(1) of that Act''.
                    (B) Section 320B(c)(1) of the Agricultural 
                Adjustment Act of 1938 (7 U.S.C. 1314h(c)(1)) is 
                amended by inserting after ``1445-2)'' the following: 
                ``(as in effect before the effective date of the 
                amendments made by section 201(c) of the Tobacco 
                Transition Act)''.
    (d) Administrative Costs.--Section 1109 of the Agriculture and Food 
Act of 1981 (Public Law 97-98; 7 U.S.C. 1445 note) is repealed.
    (e) Crops.--This section and the amendments made by this section 
shall apply with respect to the 1999 and subsequent crops of the kind 
of tobacco involved.

SEC. 202. TERMINATION OF TOBACCO PRICE SUPPORT PROGRAM.

    (a) Parity Price Support.--Section 101 of the Agricultural Act of 
1949 (7 U.S.C. 1441) is amended--
            (1) in the first sentence of subsection (a), by striking 
        ``tobacco (except as otherwise provided herein), corn,'' and 
        inserting ``corn'';
            (2) by striking subsections (c), (g), (h), and (i);
            (3) in subsection (d)(3)--
                    (A) by striking ``, except tobacco,''; and
                    (B) by striking ``and no price support shall be 
                made available for any crop of tobacco for which 
                marketing quotas have been disapproved by producers;''; 
                and
            (4) by redesignating subsections (d) and (e) as subsections 
        (c) and (d), respectively.
    (b) Termination of Tobacco Price Support and No Net Cost 
Provisions.--Sections 106, 106A, and 106B of the Agricultural Act of 
1949 (7 U.S.C. 1445, 1445-1, 1445-2) are repealed.
    (c) Definition of Basic Agricultural Commodity.--Section 408(c) of 
the Agricultural Act of 1949 (7 U.S.C. 1428(c)) is amended by striking 
``tobacco,''.
    (d) Review of Burley Tobacco Imports.--Section 3 of Public Law 98-
59 (7 U.S.C. 625) is repealed.
    (e) Powers of Commodity Credit Corporation.--Section 5 of the 
Commodity Credit Corporation Charter Act (15 U.S.C. 714c) is amended by 
inserting ``(other than tobacco)'' after ``agricultural commodities'' 
each place it appears.
    (f) Transition Provisions.--
            (1) Liability.--The amendments made by this section shall 
        not affect the liability of any person under any provision of 
        law as in effect before the effective date of this section.
            (2) Tobacco stocks and loans.--The Secretary shall issue 
        regulations that require--
                    (A) the orderly disposition of tobacco stocks; and
                    (B) the repayment of all tobacco price support 
                loans by not later than 1 year after the effective date 
                of this section.
    (g) Crops.--This section and the amendments made by this section 
shall apply with respect to the 2002 and subsequent crops of the kind 
of tobacco involved.

           Subtitle B--Tobacco Production Adjustment Programs

SEC. 211. TERMINATION OF TOBACCO PRODUCTION ADJUSTMENT PROGRAMS.

    (a) Declaration of Policy.--Section 2 of the Agricultural 
Adjustment Act of 1938 (7 U.S.C. 1282) is amended by striking 
``tobacco,''.
    (b) Definitions.--Section 301(b) of the Agricultural Adjustment Act 
of 1938 (7 U.S.C. 1301(b)) is amended--
            (1) in paragraph (3)--
                    (A) by striking subparagraph (C); and
                    (B) by redesignating subparagraph (D) as 
                subparagraph (C);
            (2) in paragraph (6)(A), by striking ``tobacco,'';
            (3) in paragraph (7), by striking the following:
                    ``tobacco (flue-cured), July 1--June 30;
                    ``tobacco (other than flue-cured), October 1-
                September 30;'';
            (4) in paragraph (10)--
                    (A) by striking subparagraph (B); and
                    (B) by redesignating subparagraph (C) as 
                subparagraph (B);
            (5) in paragraph (11)(B), by striking ``and tobacco'';
            (6) in paragraph (12), by striking ``tobacco,'';
            (7) in paragraph (14)--
                    (A) in subparagraph (A), by striking ``(A)''; and
                    (B) by striking subparagraphs (B), (C), and (D);
            (8) by striking paragraph (15);
            (9) in paragraph (16)--
                    (A) by striking subparagraph (B); and
                    (B) by redesignating subparagraph (C) as 
                subparagraph (B); and
            (10) by redesignating paragraphs (16) and (17) as 
        paragraphs (15) and (16), respectively.
    (c) Parity Payments.--Section 303 of the Agricultural Adjustment 
Act of 1938 (7 U.S.C. 1303) is amended in the first sentence by 
striking ``rice, or tobacco,'' and inserting ``or rice,''.
    (d) Marketing Quotas.--Part I of subtitle B of title III of the 
Agricultural Adjustment Act of 1938 (7 U.S.C. 1311 et seq.) is 
repealed.
    (e) Administrative Provisions.--Section 361 of the Agricultural 
Adjustment Act of 1938 (7 U.S.C. 1361) is amended by striking 
``tobacco,''.
    (f) Adjustment of Quotas.--Section 371 of the Agricultural 
Adjustment Act of 1938 (7 U.S.C. 1371) is amended--
            (1) in the first sentence of subsection (a), by striking 
        ``peanuts, or tobacco'' and inserting ``or peanuts''; and
            (2) in the first sentence of subsection (b), by striking 
        ``peanuts or tobacco'' and inserting ``or peanuts''.
    (g) Reports and Records.--Section 373 of the Agricultural 
Adjustment Act of 1938 (7 U.S.C. 1373) is amended--
            (1) by striking ``peanuts, or tobacco'' each place it 
        appears in subsections (a) and (b) and inserting ``or 
        peanuts''; and
            (2) in subsection (a)--
                    (A) in the first sentence, by striking ``all 
                persons engaged in the business of redrying, prizing, 
                or stemming tobacco for producers,''; and
                    (B) in the last sentence, by striking ``$500;'' and 
                all that follows through the period at the end of the 
                sentence and inserting ``$500.''.
    (h) Regulations.--Section 375(a) of the Agricultural Adjustment Act 
of 1938 (7 U.S.C. 1375(a)) is amended by striking ``peanuts, or 
tobacco'' and inserting ``or peanuts''.
    (i) Eminent Domain.--Section 378 of the Agricultural Adjustment Act 
of 1938 (7 U.S.C. 1378) is amended--
            (1) in the first sentence of subsection (c), by striking 
        ``cotton, tobacco, and peanuts'' and inserting ``cotton and 
        peanuts''; and
            (2) by striking subsections (d), (e), and (f).
    (j) Burley Tobacco Farm Reconstitution.--Section 379 of the 
Agricultural Adjustment Act of 1938 (7 U.S.C. 1379) is amended--
            (1) in subsection (a)--
                    (A) by striking ``(a)''; and
                    (B) in paragraph (6), by striking ``, but this 
                clause (6) shall not be applicable in the case of 
                burley tobacco''; and
            (2) by striking subsections (b) and (c).
    (k) Acreage-Poundage Quotas.--Section 4 of the Act entitled ``An 
Act to amend the Agricultural Adjustment Act of 1938, as amended, to 
provide for acreage-poundage marketing quotas for tobacco, to amend the 
tobacco price support provisions of the Agricultural Act of 1949, as 
amended, and for other purposes'', approved April 16, 1965 (Public Law 
89-12; 7 U.S.C. 1314c note), is repealed.
    (l) Burley Tobacco Acreage Allotments.--The Act entitled ``An Act 
relating to burley tobacco farm acreage allotments under the 
Agricultural Adjustment Act of 1938, as amended'', approved July 12, 
1952 (7 U.S.C. 1315), is repealed.
    (m) Transfer of Allotments.--Section 703 of the Food and 
Agriculture Act of 1965 (7 U.S.C. 1316) is repealed.
    (n) Advance Recourse Loans.--Section 13(a)(2)(B) of the Food 
Security Improvements Act of 1986 (7 U.S.C. 1433c-1(a)(2)(B)) is 
amended by striking ``tobacco and''.
    (o) Tobacco Field Measurement.--Section 1112 of the Omnibus Budget 
Reconciliation Act of 1987 (Public Law 100-203) is amended by striking 
subsection (c).
    (p) Liability.--The amendments made by this section shall not 
affect the liability of any person under any provision of law as in 
effect before the effective date under subsection (q).
    (q) Crops.--This section and the amendments made by this section 
shall apply with respect to the 1999 and subsequent crops of the kind 
of tobacco involved.

                           TITLE III--FUNDING

SEC. 301. TRUST FUND.

    (a) Request.--The Secretary of Agriculture shall request the 
Secretary of the Treasury to transfer, from the Tobacco Transition 
Account in the Trust Fund, amounts authorized under sections 104, 105, 
and 111, and the amendments made by section 201, to the account of the 
Commodity Credit Corporation.
    (b) Transfer.--On receipt of such a request, the Secretary of the 
Treasury shall transfer amounts requested under subsection (a).
    (c) Use.--The Secretary of Agriculture shall use the amounts 
transferred under subsection (b) to carry out the activities described 
in subsection (a).
    (d) Termination of Authority.--The authority provided under this 
section shall expire on September 30, 2001.

SEC. 302. COMMODITY CREDIT CORPORATION.

    The Secretary may use the funds, facilities, and authorities of the 
Commodity Credit Corporation to carry out this Act and the amendments 
made by this Act.
                                 <all>
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