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(c) PAYMENT CALCULATION.—The total amount of
the transition payment made to a producer shall be deter-
mined by multiplying—
(1) $4 by
(2) the average quantity of quota tobacco leased
or rented from quota owners during the period 1995
through 1997.
SEC. 413. PRODUCER TRANSITION PAYMENTS FOR NON-
QUOTA TOBACCO.
(a) OFFER.—The Secretary shall offer to producers
of nonquota tobacco a producer nonquota transition pay-
ment contract.
(b) TERMS.—Under the terms of the transition pay-
ment, the producer shall agree, in exchange for a payment,
to permanently refrain from growing tobacco for which a
quota program is in effect.
(c) PAYMENT CALCULATION.—The total amount of
the transition payment made to a producer shall be deter-
mined by multiplying—
(1) $4 by
(2) the average annual quantity of nonquota to-
bacco marketed during the period 1995 through
1997.
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SEC. 414. ELEMENTS OF CONTRACTS.
(a) COMMENCEMENT.—To the maximum extent prac-
ticable, the Secretary shall commence entering into con-
tracts under this subtitle not later than 90 days after the
date of enactment of this Act.
(b) DEADLINE.—The Secretary may not enter into
a contract under this subtitle after the date that is 3 years
after the date of enactment of this Act.
(c) BEGINNING DATE.—A contract under this sub-
title shall take effect and become binding beginning in the
tobacco marketing year following the year in which the
contract is entered into.
(d) TIME FOR PAYMENT.—A contract payment shall
be made not later than the date that is the beginning of
the marketing year in which the contract becomes binding,
or at any later time selected by the quota owner or
producer.
(e) PROHIBITION OF DOUBLE PAYMENTS.—In no
case shall a contract holder receive overlapping payments
as a quota owner and as a producer on the same tobacco.
Subtitle B—No Net Cost Tobacco
Program
SEC. 421. BUDGET DEFICIT ASSESSMENT.
Section 106(g)(1) of the Agricultural Act of 1949 (7
U.S.C. 1445(g)(1)) is amended—
134
(1) by striking ‘‘only for each of the 1994
through 1998 crops’’ and inserting ‘‘for the 1998
and each subsequent crop’’; and
(2) by striking ‘‘equal to—’’ and all that follows
and inserting ‘‘equal to 1 or more amounts deter-
mined by the Secretary that are sufficient to cover
the costs of the administration of the tobacco quota
and price support programs administered by the
Secretary.’’.
Subtitle C—Tobacco Community
Empowerment Block Grants
SEC. 431. TOBACCO COMMUNITY EMPOWERMENT BLOCK
GRANTS.
(a) AUTHORITY.—The Secretary shall make grants to
tobacco States in accordance with this section to enable
the States to—
(1) empower active tobacco producers and to-
bacco product manufacturing workers by providing
economic alternatives to tobacco; and
(2) carry out non-tobacco economic development
initiatives in tobacco communities.
(b) APPLICATION.—To be eligible to receive payments
under this section, a tobacco State shall prepare and sub-
mit to the Secretary an application at such time, in such
135
manner, and containing such information as the Secretary
may require, including—
(1) a description of the activities that the State
will carry out using amounts received under the
grant;
(2) a designation of an appropriate State agen-
cy to administer amounts received under the grant;
and
(3) a description of the steps to be taken to en-
sure that the funds are distributed in accordance
with subsection (e).
(c) AMOUNT OF GRANT.—
(1) IN GENERAL.—From the amounts available
to carry out this section for a fiscal year, the Sec-
retary shall allot to each tobacco State an amount
that bears the same ratio to the amounts available
as the total income of the State derived from the
production of tobacco and the manufacture of to-
bacco products during the 1994 through 1996 mar-
keting years (as determined under paragraph (2))
bears to the total income of all tobacco States de-
rived from the production of tobacco and the manu-
facturing of tobacco products during the 1994
through 1996 marketing years.
136
(2) TOBACCO INCOME.—For the 1994 through
1996 marketing years, the Secretary shall determine
the amount of income derived from the production
of tobacco and the manufacture of tobacco products
in each tobacco State and in all tobacco States.
(d) PAYMENTS.—
(1) IN GENERAL.—A tobacco State that has an
application approved by the Secretary under sub-
section (b) shall be entitled to a payment under this
section in an amount that is equal to its allotment
under subsection (c).
(2) FORM OF PAYMENTS.—The Secretary may
make payments under this section to a tobacco State
in installments, and in advance or by way of reim-
bursement, with necessary adjustments on account
of overpayments or underpayments, as the Secretary
may determine.
(3) REALLOTMENTS.—Any portion of the allot-
ment of a tobacco State under subsection (c) that
the Secretary determines will not be used to carry
out this section in accordance with an approved
State application required under subsection (b), shall
be reallotted by the Secretary to other tobacco
States in proportion to the original allotments to the
other States.
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(e) USE AND DISTRIBUTION OF FUNDS.—
(1) IN GENERAL.—Amounts received by a to-
bacco State under this section shall be used to carry
out economic development activities, including—
(A) rural business enterprise activities de-
scribed in subsections (c) and (e) of section
310B of the Consolidated Farm and Rural De-
velopment Act (7 U.S.C. 1932);
(B) down payment loan assistance pro-
grams that are similar to the program described
in section 310E of the Consolidated Farm and
Rural Development Act (7 U.S.C. 1935);
(C) activities designed to help create pro-
ductive farm or off-farm employment in rural
areas to provide a more viable economic base
and enhance opportunities for improved in-
comes, living standards, and contributions by
rural individuals to the economic and social de-
velopment of tobacco communities;
(D) activities that expand existing infra-
structure, facilities, and services to capitalize on
opportunities to diversify economies in tobacco
communities and that support the development
of new industries or commercial ventures;
138
(E) activities by agricultural organizations
that provide assistance directly to active tobacco
producers to assist in developing other agricul-
tural activities that supplement tobacco-produc-
ing activities;
(F) initiatives designed to create or expand
locally owned value-added processing and mar-
keting operations in tobacco communities;
(G) technical assistance activities by per-
sons to support farmer-owned enterprises, or
agriculture-based rural development enterprises,
of the type described in section 252 or 253 of
the Trade Act of 1974 (19 U.S.C. 2342, 2343);
and
(H) investments in community colleges and
trade schools to provide skills training to active
tobacco producers and tobacco product manu-
facturing workers and ensure that the off-farm
sector remains vital and robust.
(2) TOBACCO
COUNTIES.—Assistance may be
provided by a tobacco State under this section only
to assist a county in the State that has been deter-
mined by the Secretary to have in excess of
$100,000 in income derived from the production of
tobacco and the manufacture of tobacco products
139
during 1 or more of the 1994 through 1996 market-
ing years.
(3) DISTRIBUTION.—
(A) ECONOMIC
DEVELOPMENT
ACTIVI-
TIES.—Not less than 20 percent of the amounts
received by a tobacco State under this section
shall be used to carry out—
(i) economic development activities de-
scribed in subparagraph (E) or (F) of
paragraph (1); or
(ii) agriculture-based rural develop-
ment activities described in paragraph
(1)(G).
(B) 
TECHNICAL
ASSISTANCE
ACTIVI-
TIES.—Not less than 4 percent of the amounts
received by a tobacco State under this section
shall be used to carry out technical assistance
activities described in paragraph (1)(G).
(C) TOBACCO COUNTIES.—To be eligible to
receive payments under this section, a tobacco
State shall demonstrate to the Secretary that
funding will be provided, during the 1999
through 2004 fiscal years, for activities in each
county in the State that has been determined
under paragraph (2) to have in excess of
140
$100,000 in income derived from the produc-
tion of tobacco and the manufacture of tobacco
products, in amounts that are at least equal to
the product obtained by multiplying—
(i) the ratio that the tobacco produc-
tion and tobacco product manufacturing
income in the county determined under
paragraph (2) bears to the total tobacco
production and tobacco product manufac-
turing income for the State determined
under subsection (c); by
(ii) 50 percent of the total amounts
received by the State under this section
during the 1999 through 2004 fiscal years.
TITLE V—MISCELLANEOUS
PROVISIONS
SEC. 501. SENSE OF THE SENATE.
It is the sense of the Senate that, in order to provide
funds to carry out this Act, Congress should enact an in-
crease in the excise taxes on tobacco products of approxi-
mately $1.50 per pack of cigarettes (and corresponding
increases on taxes on other tobacco products) over a 3-
year period, that increases in such tax in future years
should be indexed to inflation, and that the payment of
such tax should not be considered to be an ordinary and
141
necessary expense in carrying on a trade or business and
should not be deductible.
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