justment Act of 1938 for the 1998 marketing
year for that kind of tobacco.
(3) MARKETING QUOTAS OTHER THAN POUND-
AGE QUOTAS.—For each kind of tobacco for which
there is a marketing quota or allotment on an acre-
age basis, the Secretary shall convert the tobacco
farm marketing quotas or allotments established
under the Agriculture Adjustment Act of 1938 for
the 1998 marketing year for that kind of tobacco to
a poundage basis before executing the mathematical
equation specified in paragraph (2).
(d) BASE QUOTA LEVEL.—
(1) IN GENERAL.—The Secretary of Agriculture
shall determine the base quota level of each tobacco
quota holder with respect to each kind of tobacco.
(2) POUNDAGE
QUOTA
TOBACCO.—For each
kind of tobacco for which the marketing quota is ex-
pressed in pounds, the base quota level for a tobacco
quota holder shall be equal to the average of the to-
bacco farm marketing quota established under the
Agriculture Adjustment Act of 1938 for the 2002
marketing year for quota tobacco on the farm owned
by the tobacco quota holder.
(3) MARKETING QUOTAS OTHER THAN POUND-
AGE QUOTAS.—For each kind of tobacco for which
there is a marketing quota or allotment on an acre-
age basis, the base quota level for a tobacco quota
holder shall be equal to the product obtained (based
on a poundage conversion) by multiplying—
(A) the average tobacco farm marketing
quota or allotment established under the Agri-
culture Adjustment Act of 1938 for the 2002
marketing year for the tobacco quota holder’s
farm; by
(B) the average yield per acre for the to-
bacco quota holder’s farm for the kind of to-
bacco for that marketing year.
(e) PAYMENT AMOUNT.—The Secretary of Agri-
culture shall make payments to a tobacco quota holder
with respect to a kind of tobacco under this section in a
total amount that bears the same ratio to the amount de-
termined by the Secretary under subsection (c) with re-
spect to that kind of tobacco as the base quota level of
the tobacco quota holder with respect to that kind of to-
bacco bears to the base quota level of all tobacco quota
holders with respect to that kind of tobacco.
(f) TIME FOR PAYMENT.—The amount determined
under subsection (e) for a tobacco quota holder shall be
paid in five equal installments during each of the 2003
through 2007 crops of tobacco.
(g) DEATH OF TOBACCO QUOTA HOLDER.—If a to-
bacco quota holder who is entitled to payments under this
section dies and is survived by a spouse or one or more
dependents, the right to receive the payments shall trans-
fer to the surviving spouse or, if there is no surviving
spouse, to the estate of the tobacco quota holder.
SEC. 103. TRANSITION PAYMENTS FOR ACTIVE TOBACCO
PRODUCERS.
(a) PAYMENT AUTHORITY.—The Secretary of Agri-
culture shall use funds of the Commodity Credit Corpora-
tion to make transition payments under this section to ac-
tive tobacco producers.
(b) APPLICATION.—To receive payments under this
section, a person shall prepare and submit to the Sec-
retary of Agriculture an application at such time, in such
manner, and containing such information as the Secretary
may require, including information sufficient to dem-
onstrate that the person satisfies the definition of active
tobacco producer.
(c) TOTAL PAYMENT AMOUNT.—
(1) IN GENERAL.—The Secretary of Agriculture
shall determine the total amount to be paid to all ac-
tive tobacco producers under this section with re-
spect to each kind of tobacco.
(2) POUNDAGE
QUOTA
TOBACCO.—For each
kind of tobacco for which the marketing quota is ex-
pressed in pounds, the total amount available for
payments to active tobacco producers under this sec-
tion shall be equal to the product obtained by
multiplying—
(A) $4 per pound; by
(B) the total tobacco farm marketing
quotas established under the Agriculture Ad-
justment Act of 1938 for the 1998 marketing
year for that kind of tobacco.
(3) MARKETING QUOTAS OTHER THAN POUND-
AGE QUOTAS.—For each kind of tobacco for which
there is a marketing quota or allotment on an acre-
age basis, the Secretary shall convert the tobacco
farm marketing quotas or allotments established
under the Agriculture Adjustment Act of 1938 for
the 1998 marketing year for that kind of tobacco to
a poundage basis before executing the mathematical
equation specified in paragraph (2).
(d) PAYMENT QUANTITY.—
(1) IN GENERAL.—The Secretary of Agriculture
shall determine the payment quantity of tobacco for
each active tobacco producer with respect to each
kind of tobacco.
(2) POUNDAGE
QUOTA
TOBACCO.—For each
kind of tobacco for which the marketing quota is ex-
pressed in pounds, the payment quantity for an ac-
tive tobacco producer shall be equal to the average
of the effective and marketing quotas for that quota
tobacco produced by the producer under the Agri-
culture Adjustment Act of 1938 for the 2001 and
2002 marketing years.
(3) MARKETING QUOTAS OTHER THAN POUND-
AGE QUOTAS.—For each kind of tobacco for which
there is a marketing quota or allotment on an acre-
age basis, the payment quantity for an active to-
bacco producer shall be equal to the average of the
actual pounds of that kind of tobacco produced by
the active tobacco producer for the 2001 and 2002
marketing years.
(e) PAYMENT AMOUNT.—
(1) ALL TOBACCO PRODUCERS.—The Secretary
of Agriculture shall make payments to each active
tobacco producer with respect to a kind of tobacco
under this section in a total amount that bears the
same ratio to the amount determined by the Sec-
retary under subsection (c) with respect to that kind
of tobacco as the payment quantity of the active to-
bacco producer with respect to that kind of tobacco
bears to the payment quantities of all active tobacco
producers with respect to that kind of tobacco.
(2) PRODUCERS
WHO
FORGO
OBTAINING
TO-
BACCO PRODUCTION LICENSE.—If an active tobacco
producer who is entitled to transition payments
under this section with respect to a kind of tobacco
agrees to permanently forgo the opportunity to ob-
tain a tobacco production license under section 304
for the same type of tobacco, the Secretary shall pay
to the active tobacco producer, in addition to the
amount determined under paragraph (1), an amount
equal to the product obtained by multiplying—
(A) $2 per pound; by
(B) the payment quantity of the active to-
bacco producer with respect to that kind of to-
bacco.
(f) TIME FOR PAYMENT.—The amount determined
under subsection (e) for an active tobacco producer shall
be paid in five equal installments during each of the 2003
through 2007 crops of tobacco, except that an active to-
bacco producer who is also a quota owner with a base
quota level of 1,000 pounds or less and who no longer in-
tends to engage in tobacco production may elect to receive
the total amount in the first year after the date on which
the agreement is signed.
(g) DEATH OF ACTIVE TOBACCO PRODUCER.—If an
active tobacco producer who is entitled to transition pay-
ments under this section dies and is survived by a spouse
or one or more dependents, the right to receive the pay-
ments shall transfer to the surviving spouse or, if there
is no surviving spouse, to the estate of the producer.
SEC. 104. TOBACCO PRODUCT MANUFACTURER AND IM-
PORTER USER FEES.
(a) IN GENERAL.—The Secretary of Agriculture shall
assess an annual user fee, calculated in accordance with
this section, upon each tobacco product manufacturer and
tobacco product importer that sells tobacco products in do-
mestic commerce in the United States. The assessments
shall commence during calendar year 2003, based on do-
mestic sales of tobacco products during fiscal year 2003.
(b) BASE AMOUNT OF USER FEE FOR EACH CLASS
OF TOBACCO PRODUCT.—
(1) The base amount of the user fee for ciga-
rette 
manufacturers 
and 
importers 
shall 
be
$2,116,252,000.
(2) The base amount of the user fee for small
cigar 
manufacturers 
and 
importers 
shall 
be
$1,051,000.
(3) The base amount of the user fee for large
cigar 
manufacturers 
and 
importers 
shall 
be
$164,274,000.
(4) The base amount of the user fee for snuff
manufacturers and importers shall be $9,920,000.
(5) The base amount of the user fee for chew-
ing tobacco manufacturers and importers shall be
$2,275,000.
(6) The base amount of the user fee for pipe to-
bacco 
manufacturers 
and 
importers 
shall 
be
$1,505,000.
(7) The base amount of the user fee for roll-
your-own tobacco manufacturers and importers shall
be $3,231,000.
(c) DETERMINATION OF ANNUAL USER FEE FOR
EACH CLASS OF TOBACCO PRODUCT.—The total user fee
to be assessed upon, and paid by, the manufacturers and
importers of each class of tobacco product in each calendar
year, as allocated pursuant to subsection (d), shall be the
base amount for that class of tobacco product provided
in subsection (b) multiplied by a fraction—
(1) the numerator of which is the total volume
of domestic sales of that class of tobacco product in
the fiscal year ending on September 30 of that cal-
endar year; and
(2) the denominator of which is the total vol-
ume of domestic sales of that class of tobacco prod-
uct in fiscal year 2003.
(d) ALLOCATION OF TOTAL USER FEE AMOUNTS BY
MARKET SHARE—
(1) FORMULA.—The user fee for each class of
tobacco product to be paid by each manufacturer or
importer of that class of tobacco product under sub-
section (a) shall be determined in each year by
multiplying—
(A) such manufacturer’s or importer’s
market share, as calculated with respect to the
current calendar year, of that class of tobacco
product; by
(B) the total user fee amount for the cur-
rent calendar year, as determined under sub-
section (c), for that class of tobacco product.
(2) MARKET
SHARE
DEFINED.—In this sub-
section, the term ‘‘market share’’ for each manufac-
turer or importer of a class of tobacco product for
the purpose of the assessment to be calculated in the
current calendar year shall be equal to that manu-
facturer’s or importer’s respective share (expressed
as a decimal to the fourth place) of the total volume
of domestic sales of that class of tobacco product
TITLE II—TOBACCO PRICE
SUPPORT
SEC. 201. AVAILABILITY OF TOBACCO PRICE SUPPORT.
(a) NEW APPROACH TO PRICE SUPPORT.—Section
106 of the Agricultural Act of 1949 (7 U.S.C. 1445) is
amended to read as follows:
‘‘SEC. 106. TOBACCO PRICE SUPPORT.
‘‘(a) PRICE SUPPORT RATE TO REFLECT COST OF
PRODUCTION.—
‘‘(1) ESTABLISHMENT
AND
ANNUAL
ADJUST-
MENT.—The price of each type of tobacco produced
in the United States shall be supported at a rate es-
tablished by the Secretary, and adjusted annually, to
reflect the costs of production for producers of that
type of tobacco.
‘‘(2) DETERMINATION
OF
COST
OF
PRODUC-
TION.—The Secretary shall use the information col-
lection and survey resources of the Economic Re-
search Service and National Agricultural Statistics
Service of the Department of Agriculture to deter-
mine the cost of domestic tobacco production. The
Economic Research Service shall reevaluate the cost-
of-production annually, based on the survey of fac-
tors used by the Economic Research Service, which
shall be conducted once every five years.
‘‘(b) CONSIDERATION
OF INTERNATIONAL PRICE
LEVELS.—In establishing the price support rate for a type
of tobacco, the Secretary shall also consider the inter-
national tobacco price levels.
‘‘(c) CONSULTATION.—The Secretary shall consult
with the Tobacco Advisory Board, farm organizations,
producer cooperatives and associations, colleges and uni-
versities in tobacco-producing States, and other interested
persons when determining the costs of tobacco production
and establishing or adjusting the price support rate.
‘‘(d) DIFFERENCES IN GRADE.—The Secretary may
take into consideration differences in tobacco grades when
establishing or adjusting the price support rate for a type
of tobacco.’’.
(b) ELIMINATION OF REFERENCES TO QUOTA TO-
BACCO IN NO NET COST PROVISIONS.—(1) Section 106A
of the Agricultural Act of 1949 (7 U.S.C. 1445–1) is
amended as follows:
(A) In subsection (a), by striking ‘‘quota’’ each
place it appears in paragraphs (4), (5), and (6).
(B) By striking subsection (a)(7).
(C) In subsection (d), by striking ‘‘quota’’ each
place it appears in paragraphs (1), (3), and (7).
(D) In subsection (e), by striking ‘‘quota’’.
(2) Section 106B of the Agricultural Act of 1949 (7
U.S.C. 1445–2) is amended as follows:
(A) In subsection (a)(5), by striking ‘‘, for
which marketing quotas are in effect or for which
marketing quotas are not disapproved by pro-
ducers’’.
(B) In subsection (a)(8), by striking ‘‘quota’’.
(C) In subsection (d), by striking ‘‘quota’’ each
place it appears in paragraphs (1)(B) and (2)(A).
SEC. 202. REPEAL OF RELATED PROVISIONS.
(a) PARITY PRICE SUPPORT.—Section 101 of the Ag-
ricultural 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 here-
in), corn’’ and inserting ‘‘corn’’;
(2) by striking subsection (c);
(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
subsection (c) and (d), respectively.
(b) DEFINITION
OF BASIC AGRICULTURAL COM-
MODITY.—Section 408(c) of the Agricultural Act of 1949
(7 U.S.C. 1428(c)) is amended by striking ‘‘tobacco,’’.
SEC. 203. EFFECTIVE DATE.
This title and the amendments made by this title
shall apply with respect to the 2003 and subsequent to-
bacco crops.
TITLE III—TOBACCO
PRODUCTION LICENSES
SEC. 301. DEFINITIONS OF HISTORIC TOBACCO PRODUCER
AND LICENSED TOBACCO PRODUCER.
In this title:
(1) The term ‘‘historic tobacco producer’’
means an owner, operator, landlord, tenant, or
sharecropper who bore, individually or collectively,
the risk of producing a crop of tobacco on a farm
for the 2002 crop year.
(2) The term ‘‘licensed tobacco producer’’
means an owner, operator, landlord, tenant, or
sharecropper who holds a license issued under this
title—
(A) to plant a crop of tobacco on a farm
in a specified county for the 2003 or a subse-
quent crop year; and
(B) to harvest and market an authorized
quantity of tobacco.
SEC. 302. ANNUAL ESTIMATE OF TOBACCO PURCHASE IN-
TENTIONS.
(a) ANNUAL ESTIMATE.—Not later than February 1
of each calendar year, the Secretary of Agriculture shall
publish in the Federal Register an estimate of the quantity
in pounds of each type of tobacco necessary—
(1) to satisfy domestic use and export needs
during the next marketing year; and
(2) to maintain a reasonable reserve.
(b) RULES FOR ESTIMATE.—When making an esti-
mate under subsection (a), the Secretary of Agriculture
shall consider—
(1) the industry purchase estimates submitted
under subsection (c);
(2) export estimates; and
(3) an appropriate reserve stock adjustment.
(c) INDUSTRY PURCHASE ESTIMATES.—Not later
than December 1 of each calendar year with respect to
Flue-cured tobacco, and January 15 of each calendar year
with respect to Burley tobacco or other types of tobacco,
each domestic manufacturer of cigarettes or other type of
domestic tobacco-product manufacturer shall submit to
the Secretary of Agriculture a statement, by kind, of the
quantity of Flue-cured tobacco, Burley tobacco, and other
types of tobacco that the manufacturer intends to pur-
chase, directly or indirectly, on the United States auction
markets or from licensed tobacco producers during the
next marketing year.
(d) FAILURE TO SUBMIT, OR OVER-DECLARATION
OF, PURCHASE INTENTIONS.—If a domestic manufacturer
of cigarettes or other type of domestic tobacco-product
manufacturer fails to submit to the Secretary of Agri-
culture purchase intentions as required under subsection
(c) for a marketing year, but subsequently purchases to-
bacco on the United States auction markets or from li-
censed tobacco producers during that marketing year, or
if a domestic manufacturer of cigarettes or other type of
domestic tobacco-product manufacturer over-estimates
such purchase intentions by more than 5 percent, the do-
mestic manufacturer of cigarettes or other type of domes-
tic tobacco-product manufacturer shall be liable for a civil
penalty up to an amount determined by multiplying—
(1) the quantity of tobacco involved in the viola-
tion; by
(2) price support rate for the type of tobacco
involved in effect under section 106 of the Agri-
culture Act of 1949 at the time of the violation.
(e) ENFORCEMENT.—The Secretary of Agriculture
may enforce subsection (d) in the courts of the United
States.
(f) CONSULTATION
WITH
TOBACCO
ADVISORY
BOARD.—The Secretary of Agriculture shall prepare the
estimate under subsection (a) and otherwise carry out this
title in consultation with the Tobacco Advisory Board ap-
pointed under title IV.
SEC. 303. NATIONAL TOBACCO MARKETING FACTOR.
The national marketing factor for a type of tobacco
for a crop year shall be the ratio of—
(1) the aggregate quantity of that type of to-
bacco estimated by the Secretary of Agriculture
under section 302 to be necessary to satisfy domes-
tic consumption and exports of tobacco for the cor-
responding marketing year; to
(2) the estimated aggregate quantity of that
type of tobacco to be produced in the United States
for that year.
SEC. 304. ISSUANCE OF TOBACCO PRODUCTION LICENSES.
(a) INITIAL ISSUANCE TO HISTORIC TOBACCO PRO-
DUCERS.—
(1) ISSUANCE.—
(A) ISSUANCE
REQUIRED.—As soon as
practicable after the date of the enactment of
this Act, the Secretary of Agriculture shall
issue to each historic tobacco producer a to-
bacco production license for the purpose of en-
suring sufficient production of each type of to-
bacco to satisfy annual purchase intentions for
that type of tobacco estimated under section
302, but also preventing over-production of that
type of tobacco.
(B) EXCEPTION.—The Secretary shall not
issue a tobacco production license to an historic
tobacco producer with respect to a kind of to-
bacco if the historic tobacco producer agreed
under subsection (e) of section 103 to perma-
nently forgo the tobacco production license for
that type of tobacco in exchange for additional
transition payments under such section.
(2) TOBACCO PRODUCTION HISTORY.—The to-
bacco production license issued to an historic to-
bacco producer under paragraph (1) shall specify the
tobacco production history of the producer for each
type of tobacco for each county in which the pro-
ducer bore, individually or collectively, the risk of
producing a crop of tobacco on a farm in the county
for the 2002 crop year. In the case of an historic to-
bacco producer who bore 100 percent of the risk of
gle county in which the producer bore or shared in
the risk of producing a crop of that type of tobacco
for the 2002 crop year. The option to make this
election shall be provided only once.
(b) SUBSEQUENT ISSUANCE.—
(1) IN GENERAL.—If a tobacco production li-
cense is surrendered or revoked, the Secretary of
Agriculture shall transfer the license and the cor-
responding tobacco production history to beginning
tobacco producers or licensed tobacco producers in
the following order of preference:
(A) Producers in the same county as the
county in which the tobacco production history
was derived.
(B) Producers in the same State.
(C) Producers in counties in other States
in which licensed tobacco producers are oper-
ating.
(2) 
RESERVATION
FOR
BEGINNING
PRO-
DUCERS.—In all instances specified in subpara-
graphs (A), (B), and (C) of paragraph (1), the Sec-
retary shall reserve for beginning tobacco producers
at least five percent of the tobacco production his-
tory surrendered or revoked under this section.
(3) PRODUCERS
WHO
FORGO
OBTAINING
TO-
BACCO PRODUCTION LICENSE.—The tobacco produc-
tion history of those historic tobacco producers who
agree under section 103(e) to permanently forgo the
opportunity to obtain a tobacco production license
under subsection (a) shall also be available to the
Secretary for distribution as provided in paragraph
(1).
(c) LIMITATIONS ON USE OF LICENSE.—
(1) IN GENERAL.—A tobacco production license
specifying a particular type of tobacco and the coun-
ty in which that type of tobacco may be grown may
not be used as the basis to grow a different type of
tobacco or to grow that type of tobacco in a different
county.
(2) REVOCATION.—Any use of a tobacco pro-
duction license contrary to this subsection shall re-
sult in the revocation of the license.
(d) LIMITATIONS ON SALE, LEASE, OR TRANSFER OF
LICENSE.—
(1) SALE PROHIBITED.—A tobacco production
license and the corresponding tobacco production
history may not be sold or leased.
(2) 
TRANSFER
UNDER
LIMITED
CIR-
CUMSTANCES.—A licensed tobacco producer may not
transfer a tobacco production license and the cor-
responding tobacco production history unless—
(A) in the case of a licensed tobacco pro-
ducer who is in a partnership, the transfer is
among the partners; or
(B) in the case of a licensed tobacco pro-
ducer who is an individual, the transfer is made
to the spouse, parent, brother, sister, or natural
or adopted child of the licensed tobacco pro-
ducer.
(3) REVOCATION.—Any sale, lease, or transfer
of a tobacco production license or the corresponding
tobacco production history contrary to this sub-
section shall result in the revocation of the license.
(e) SURRENDER OR REVOCATION OF LICENSE FOR
NON-USE.—
(1) SURRENDER.—A licensed tobacco producer
may surrender a tobacco production license and the
corresponding tobacco production history to the Sec-
retary of Agriculture at any time.
(2) REVOCATION.—The Secretary of Agri-
culture shall revoke the tobacco production license
and the corresponding tobacco production history of
a licensed tobacco producer if the licensed tobacco
producer—
(A) fails to share, individually or collec-
tively, in 100 percent of the risk of producing
a crop of tobacco of the type specified in the
tobacco production license for any year; or
(B) fails to produce at least 75 percent of
the quantity of that type of tobacco specified in
the tobacco production license for two out of
three years, unless that Secretary determines
the failure was due to damaging weather or re-
lated condition.
(3) ANNUAL MONITORING OF RISK.—The Sec-
retary of Agriculture, acting through the Farm Serv-
ice Agency, shall monitor at least five percent of all
licensed tobacco producers annually to ensure that
the producers comply with the risk-sharing require-
ments of paragraph (2). The licensed tobacco pro-
ducers to be monitored in a given crop year under
the authority of this paragraph shall be selected at
random. Nothing in this paragraph prevents the
Secretary from instituting an investigation of a spe-
cific licensed tobacco producer if the Secretary has
reasonable cause to believe the producer is not com-
plying with such risk-sharing requirements.
SEC. 305. ANNUAL AUTHORIZED TOBACCO PRODUCTION
UNDER TOBACCO PRODUCTION LICENSES.
(a) NOTIFICATION
OF LICENSED TOBACCO PRO-
DUCERS.—As soon as practicable after preparing the esti-
mate required by section 302 for a type of tobacco for
a marketing year, the Secretary of Agriculture shall notify
each licensed tobacco producer of that type of tobacco of
the authorized quantity of tobacco that the producer may
produce in a county in the corresponding crop year under
the tobacco production license.
(b) DETERMINATION OF AUTHORIZED PRODUCTION
LEVELS.—The authorized tobacco production level for a
licensed tobacco producer for a type of tobacco in a county
for a crop year is equal to the product of—
(1) the tobacco production history of the pro-
ducer for that type of tobacco in that county; and
(2) the national tobacco marketing factor for
that year determined by the Secretary of Agriculture
under section 303.
(c) EXCESS PRODUCTION.—Except as provided in
subsection (e), if a licensed tobacco producer harvests and
markets tobacco in excess of the quantity specified in the
producer’s tobacco production license or any other person
produces tobacco without a tobacco production license, the
licensed tobacco producer or other person shall be liable
for a civil penalty up to an amount determined by
multiplying—
(1) the quantity of tobacco involved in the viola-
tion; by
(2) price support rate for the type of tobacco
involved in effect under section 106 of the Agri-
culture Act of 1949 at the time of the violation.
(d) ENFORCEMENT.—The Secretary of Agriculture
may enforce subsection (c) in the courts of the United
States.
(e) LIMITED AUTHORITY TO EXCEED LICENSE.—If
the Tobacco Advisory Board notifies the Secretary of Agri-
culture that the actual production of a type of tobacco for
a crop year will be less than 80 percent of the production
authorized under all licenses issued for that type of to-
bacco, the Secretary may authorize a licensed tobacco pro-
ducer of that type of tobacco to harvest and market to-
bacco in excess of the quantity specified in the producer’s
tobacco production license. The Secretary shall establish
a mechanism under which a licensed tobacco producer may
apply for the authority to exceed the quantity specified
in the producer’s license.
(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-Sep-
tember 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 to-
bacco’’;
(6) in paragraph (12), by striking ‘‘tobacco,’’;
(7) in paragraph (14)—
(A) by striking ‘‘(A)’’ in subparagraph (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);
(10) by striking paragraph (17); and
(11) by redesignating paragraph (16) as para-
graph (15).
(g) PARITY PAYMENTS.—Section 303 of the Agricul-
tural Adjustment Act of 1938 (7 U.S.C. 1303) is amended
in the first sentence by striking ‘‘rice, or tobacco’’ and
inserting ‘‘or rice’’.
(h) 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.
(i) ADMINISTRATIVE PROVISIONS.—Section 361 of
the Agricultural Adjustment Act of 1938 (7 U.S.C. 1361)
is amended by striking ‘‘tobacco,’’.
(j) 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 pea-
nuts’’.
(k) REPORTS AND RECORDS.—Section 373 of the Ag-
ricultural 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.’’.
(l) REGULATIONS.—Section 375(a) of the Agricul-
tural Adjustment Act of 1938 (7 U.S.C. 1375(a)) is
amended by striking ‘‘peanuts, or tobacco’’ and inserting
‘‘or peanuts’’.
(m) EMINENT DOMAIN.—Section 378 of the Agricul-
tural 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 insert-
ing ‘‘cotton and peanuts’’; and
(2) by striking subsections (d), (e), and (f).
(n) 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).
(o) ACREAGE-POUNDAGE QUOTAS.—Section 4 of the
Act of April 16, 1955 (Public Law 89–12; 7 U.S.C. 1314c
note), is repealed.
(p) BURLEY TOBACCO ACREAGE ALLOTMENTS.—
The Act of July 12, 1952 (7 U.S.C. 1315), is repealed.
(q) TRANSFER OF ALLOTMENTS.—Section 703 of the
Food and Agriculture Act of 1965 (7 U.S.C. 1316) is re-
pealed.
(r) 
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’’.
(s) TOBACCO FIELD MEASUREMENT.—Section 1112
of the Omnibus Budget Reconciliation Act of 1987 (Public
Law 100–203) is amended by striking subsection (c).
(t) LIABILITY.—The amendments made by this sec-
tion shall not affect the liability of any person under any
provision of law in effect before the amendments take ef-
fect as provided under subsection (u).
SEC. 307. EFFECTIVE DATE.
This title and the amendments made by this title
shall apply with respect to the 2003 and subsequent to-
bacco crops.
TITLE IV—TOBACCO ADVISORY
BOARD
SEC. 401. ESTABLISHMENT AND DUTIES OF TOBACCO ADVI-
SORY BOARD.
(a) ESTABLISHMENT.—The Secretary of Agriculture
shall establish a permanent advisory board in the Depart-
ment of Agriculture to be known as the Tobacco Advisory
Board.
(b) MEMBERS.—The Tobacco Advisory Board shall
consist of 12 appointed by the Secretary of Agriculture
as follows:
(1) Three licensed tobacco producers of Flue-
cured tobacco.
(2) Three licensed tobacco producers of Burley
tobacco.
(3) One licensed tobacco producer of dark-type
tobacco.
(4) One representative of United States ciga-
rette manufacturers.
(5) One representative of United States moist
snuff manufacturers.
(6) One dealer.
(7) One representative of Flue-cured tobacco
marketing facilities.
(8) One representative of Burley tobacco mar-
keting facilities.
(c) NON-VOTING MEMBERS.—The Tobacco Advisory
Board shall also have the following non-voting members:
(1) The Secretary of Agriculture, or an officer
or employee of the Department of Agriculture.
(2) A tobacco analyst of the Department of Ag-
riculture, appointed by the Secretary of Agriculture.
(3) The United States Trade Representative, or
the designee of the United States Trade Representa-
tive.
(4) One representative from a college or univer-
sity in a predominately Flue-cured tobacco pro-
ducing State.
(5) One representative from a college or univer-
sity in a predominately Burley tobacco producing
State.
(d) DUTIES.—The Tobacco Advisory Board shall be
responsible for—
(1) making recommendations for modifications
of the tobacco price support program under section
106 of the Agriculture Act of 1949;
(2) making recommendations for modifications
of the tobacco production license program under title
III;
(3) determining adequate reserve stock levels
for each type of tobacco;
(4) conducting oversight regarding tobacco mar-
keting issues, such as opening sales dates, marketing
regulations, and grading fees; and
(5) making recommendations regarding a sim-
plification and reform of the grading system for to-
bacco, which the Secretary of Agriculture is author-
ized to implement.
TITLE V—ASSISTANCE TO TO-
BACCO-DEPENDENT COMMU-
NITIES
SEC. 501. CENTER FOR TOBACCO-DEPENDENT COMMU-
NITIES.
(a) FINDINGS.—The Congress finds the following:
(1) The economies of many local communities
are dependent on tobacco production.
(2) Many tobacco-producing communities are
facing significant challenges in developing non-to-
bacco income, and remain therefore quite dependent
on tobacco and vulnerable to changes in the tobacco-
growing industry.
(3) Greater analysis and study is needed of eco-
nomic conditions in these communities in order to
gain critical information, including identification of
the interconnections among various tobacco-related
activities, the degree to which the economic base of
these communities is diversified, and the extent to
which these communities are dependent on other de-
clining economic sectors.
(b) CORPORATION ESTABLISHED.—There is author-
ized to be established a nonprofit corporation, to be known
as the ‘‘Center for Tobacco-Dependent Communities’’,
which will not be an agency or establishment of the United
States Government. The Center shall be subject to the
provisions of this section, and (to the extent consistent
with this section) to the laws and regulations applicable
to nonprofit corporations in the State in which the cor-
poration is established.
(c) BOARD OF DIRECTORS.—
(1) The Center shall have a Board of Directors
consisting of 7 members. Six of the members of the
Board shall be appointed by the President, by and
with the advice and consent of the Senate, and such
members shall appoint the Center’s Executive Direc-
tor, who shall also be a member of the Board. No
more than 3 of the 6 members appointed by the
President may be members of the same political
party.
(2) The 6 members of the Board appointed by
the President shall be citizens of the United States
who have knowledge and experience regarding the
matters for which the Center is responsible, and who
are eminent in issues related to rural development
(including small-crop agriculture; entrepreneurial ac-
tivity; and industrial, small business and community
development).
(3) The members of the initial Board of Direc-
tors shall serve as incorporators and shall take what-
ever actions are necessary to establish the Center.
(4) The term of office of each member of the
Board appointed by the President shall be 4 years,
except that of the members initially so appointed, 3
members shall serve for a 2-year term. Any member
whose term has expired may serve until such mem-
ber’s successor has taken office, or until the end of
the calendar year in which such member’s term has
expired, whichever is earlier. Any member appointed
to fill a vacancy occurring prior to the expiration of
the term for which such member’s predecessor was
appointed shall be appointed for the remainder of
such term. No member of the Board shall be eligible
to serve in excess of 2 consecutive full terms.
(5) Any vacancy in the Board shall not affect
its power, but shall be filled in the manner con-
sistent with this section.
(6) Members of the Board shall attend not less
than 50 percent of all duly convened meetings of the
Board in any calendar year. A member who fails to
meet the requirement of the preceding sentence shall
forfeit membership, and the President shall appoint
a new member to fill such vacancy not later than 30
days after such vacancy is determined by the Chair-
man of the Board.
(7) Members of the Board shall annually elect
1 of their members to be Chair and elect 1 or more
of their members as a Vice Chair or Chairs. The
members of the Board shall not, by reason of such
membership, be officers or employees of the United
States. Members of the Board shall, while attending
meetings of the Board or while engaged in duties re-
lated to such meetings or other activities of the
Board pursuant to this section, be entitled to receive
compensation at the rate of $150 per day, including
traveltime. No Board member shall receive com-
pensation of more than $10,000 in any fiscal year.
While away from their homes or regular places of
business, Board members shall be allowed travel and
actual, reasonable, and necessary expenses.
(8) All meetings of the Board, including any
committee of the Board, shall be open to the public.
(d) OFFICERS AND EMPLOYEES.—
(1) The Center shall have a President, and such
other officers as may be named and appointed by
the Board for terms and at rates of compensation
fixed by the Board. No officer or employee of the
Corporation may be compensated by the Corporation
at an annual rate of pay which exceeds the rate of
basic pay in effect from time to time for level I of
the Executive Schedule under section 5312 of title
5, United States Code. No individual other than a
citizen of the United States may be an officer of the
Center. No officer of the Center, other than the
Chair or a Vice Chair, may receive any salary or
other compensation (except for compensation for
services on boards of directors of other organizations
that do not receive funds from the Center, on com-
mittees of such boards, and in similar activities for
such organizations) from any sources other than the
Center for services rendered during the period of his
or her employment by the Center. Service by any of-
ficer on boards of directors of other organizations,
on committees of such boards, and in similar activi-
ties for such organizations shall be subject to annual
advance approval by the Board and subject to the
provisions of the Center’s Statement of Ethical Con-
duct. All officers shall serve at the pleasure of the
Board.
(2) Except as provided in subsection (c)(1), no
political test or qualification shall be used in select-
ing, appointing, promoting, or taking other per-
sonnel actions with respect to officers, agents, and
employees of the Center.
(e) NONPROFIT AND NONPOLITICAL NATURE OF THE
CENTER.—
(1) The Center shall have no power to issue any
shares of stock, or to declare or pay any dividends.
(2) No part of the income or assets of the Cen-
ter shall inure to the benefit of any director, officer,
employee, or any other individual except as salary or
reasonable compensation for services.
(3) The Center may not contribute to or other-
wise support any political party or candidate for
elective public office.
(f) PURPOSES AND ACTIVITIES OF THE CENTER.—
(1) In order to achieve the objectives and to
carry out the purposes of this section, the Center
shall provide economic and community development
assistance for tobacco communities to assist them in
making the transition from tobacco-based economies.
The primary activities of the Center shall be agricul-
tural and entrepreneurial, and shall include outreach
and education to tobacco quota owners, growers and
others (including small communities) with limited
ability to obtain access to current economic develop-
ment resources. In particular, the Center shall pro-
vide assistance to tobacco-producing communities
identified by the Economic Research Service within
the Department, with emphasis on those commu-
nities that are especially dependent on tobacco pro-
duction for the generation of revenue.
(2) The Center is authorized to—
(A) provide communities and producers
with targeted technical assistance;
(B) convene meetings and conduct work-
shops and conferences;
(C) serve as a clearinghouse for exchange
of information regarding best industry prac-
tices;
(D) provide research and policy develop-
ment activities;
(E) serve as an advocate for communities
making the transition from tobacco-based
economies;
(F) make grants to individuals or entities,
including challenge grants, community mini-
grants, technical assistance grants and grants
for pilot projects and demonstrations;
(G) hire or accept the voluntary services of
consultants, experts, advisory boards, and pan-
els to aid the Center in carrying out the pur-
poses of this section;
(H) accept bequests, donations, and other
forms of assistance; and
(I) take such other actions as may be nec-
essary to accomplish the purposes set forth in
this section.
(3) Nothing contained in paragraph (2) shall be
construed to commit the Federal Government to pro-
vide any sums for the payment of any obligation of
the Center.
(4) To carry out the foregoing purposes and en-
gage in the foregoing activities, the Center shall
have the usual powers conferred upon a nonprofit
corporation by applicable laws and regulations of the
State in which the corporation is established, except
that the Center is prohibited from owning or oper-
ating any tobacco-related interest.
(g) ANNUAL REPORT.—
(1) The Center shall submit an annual report
for the preceding fiscal year ending September 30 to
the President for transmittal to the Congress on or
before the 15th day of May of each year. The report
shall include—
(A) a comprehensive and detailed report of
the Center’s operations, activities, financial con-
dition, and accomplishments under this section
and such recommendations as the Center con-
siders appropriate; and
(B) a listing of each organization that re-
ceives a grant from the Center, the purpose of
such grant, and the amount of each such grant.
(2) The officers and directors of the Center
shall be available to testify before appropriate com-
mittees of the Congress with respect to such report,
the report of any audit made by the Comptroller
General of the United States pursuant to this sec-
tion, or any other matter which such committees
may determine.
(h) AUTHORIZATION OF APPROPRIATIONS.—There is
authorized to be appropriated to the Secretary of Agri-
culture, from funds derived from the user fees imposed
under section 104, $5,000,000 for each of the fiscal years
2003 through 2013 to provide funds for the operations
and activities of the Center. Funds so appropriated shall
remain available until expended. The Corporation shall es-
tablish an annual budget for use in allocating amounts
made available to the Center under this section.
(i) FINANCIAL MANAGEMENT AND RECORDS.—
(1)(A) The accounts of the Center shall be au-
dited annually in accordance with generally accepted
auditing standards by independent certified public
accountants or independent licensed public account-
ants certified or licensed by a regulatory authority of
a State or other political subdivision of the United
States. The audits shall be conducted at the place or
places where the accounts of the Center are normally
kept. All books, accounts, financial records, reports,
files, and all other papers, things, or property be-
longing to or in use by the Center and necessary to
facilitate the audits shall be made available to the
person or persons conducting the audits; and full fa-
cilities for verifying transactions with the balances
or securities held by depositories, fiscal agents and
custodians shall be afforded to such person or per-
sons.
(B) The report of each such independent audit
shall be included in the annual report required by
this subsection. The audit report shall set forth the
scope of the audit and include such statements as
are necessary to present fairly the Center’s assets
and liabilities, surplus or deficit, with an analysis of
the changes therein during the year, supplemented
in reasonable detail by a statement of the Center’s
expenses during the year, and a statement of the
sources and application of funds, together with the
independent auditor’s opinion of such statements.
(2)(A) The financial transactions of the Center
for any fiscal year during which Federal funds are
available to finance any portion of its operations
may be audited by the General Accounting Office in
accordance with the principles and procedures appli-
cable to commercial corporate transactions and
under such rules and regulations as may be pre-
scribed by the Comptroller General of the United
States. Any such audit shall be conducted at the
place or places where accounts of the Center are
normally kept. The representative of the General Ac-
counting Office shall have access to all books, ac-
counts, records, reports, files, and all other papers,
things, or property belonging to or in use by the
Center pertaining to its financial transactions and
necessary to facilitate the audit, and they shall be
afforded full facilities for verifying transactions with
the balances or securities held by depositories, fiscal
agents, and custodians. All such books, accounts,
records, reports, files, papers and property of the
Center shall remain in possession and custody of the
Center.
(B) A report of each such audit shall be made
by the Comptroller General to the Congress. The re-
port to the Congress shall contain such comments
and information as the Comptroller General may
deem necessary to inform Congress of the financial
operations and condition of the Center, together
with such recommendations with respect thereto as
the Comptroller General may consider advisable. The
report shall also show specifically any program, ex-
penditure, or other financial transaction or under-
taking observed in the course of the audit, which, in
the opinion of the Comptroller General, has been
carried on or made without authority of law. A copy
of each report shall be furnished to the President, to
the Secretary, and to the Center at the time sub-
mitted to the Congress.
(3)(A) Not later than 1 year after the date of
enactment of this Act, the Center, in consultation
with the Comptroller General, and as appropriate
with others, shall develop accounting principles
which shall be used uniformly by all individuals and
entities receiving funds under this section, taking
into account organizational differences among var-
ious categories of such entities. Such principles shall
be designed to account fully for all funds received
and expended by such entities under this section.
(B) Each individual and entity receiving funds
under this section shall be required—
(i) to keep its books, records, and accounts
in such form as may be required by the Center;
(ii)(I) to undergo a biennial audit by inde-
pendent certified public accountants or inde-
pendent licensed public accountants certified or
licensed by a regulatory authority of a State,
which audit shall be in accordance with auditing
standards developed by the Center, in consulta-
tion with the Comptroller General; or
(II) to submit a financial statement in lieu
of the audit required by subclause (I) if the
Center determines that the cost burden of such
audit on such entity is excessive in light of the
financial condition of such entity; and
(iii) to furnish biennially to the Center a
copy of the audit report required pursuant to
clause (ii), as well as such other information re-
garding finances (including an annual financial
report) as the Center may require.
(C) Any recipient of assistance by grant
under this section shall keep such records as
may be reasonably necessary to disclose fully
the amount and the disposition by such recipi-
ent of such assistance, the total cost of the
project or undertaking in connection with which
such assistance is given or used, and the
amount and nature of that portion of the cost
of the project or undertaking supplied by other
sources, and such other records as will facilitate
an effective audit.
(D) The Center or any of its duly author-
ized representatives shall have access to any
books, documents, papers, and records of any
recipient of assistance for the purpose of audit-
ing and examining all funds received or ex-
pended by the recipient under this section. The
Comptroller General of the United States or
any duly authorized representatives of the
Comptroller General also shall have access to
such books, documents, papers, and records for
the purpose of auditing and examining all funds
received or expended under this section during
any fiscal year for which Federal funds are
available to the Center.
(4) The Center shall maintain the information
described in paragraph (3) at its offices for public
inspection and copying for at least 3 years, accord-
ing to such reasonable guidelines as the Center may
issue. This public file shall be updated regularly.
Æ