I
107TH CONGRESS
2D SESSION
H. R. 4753
To replace the existing Federal tobacco program with a federally chartered
corporation to ensure the stability of the price and supply of domestically
produced tobacco, to compensate quota holders for the loss of tobacco
quota asset value, to provide transition assistance for active tobacco
producers, to increase the competitiveness of domestically produced to-
bacco, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MAY 16, 2002
Mr. GOODE (for himself, Mr. BOUCHER, and Mr. JONES of North Carolina)
introduced the following bill; which was referred to the Committee on Ag-
riculture, and in addition to the Committee on Ways and Means, for a
period to be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the com-
mittee concerned
A BILL
To replace the existing Federal tobacco program with a fed-
erally chartered corporation to ensure the stability of
the price and supply of domestically produced tobacco,
to compensate quota holders for the loss of tobacco quota
asset value, to provide transition assistance for active
tobacco producers, to increase the competitiveness of do-
mestically produced tobacco, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives 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 Market Transition Act of 2002’’.
(b) TABLE OF CONTENTS.—The table of contents of
this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. Purposes.
TITLE I—TOBACCO COMMUNITY REVITALIZATION TRUST FUND
Sec. 101. Tobacco Community Revitalization Trust Fund.
TITLE II—TOBACCO MARKET TRANSITION ASSISTANCE
Sec. 201. Compensation to quota holders for loss of tobacco quota asset value.
Sec. 202. Transition payments for active tobacco producers.
Sec. 203. Tobacco loan associations.
Sec. 204. Transition payments for other persons involved in tobacco production
and marketing.
Sec. 205. Tax treatment of compensation and transition payments.
TITLE III—ESTABLISHMENT OF PRIVATE TOBACCO PRODUCTION
ADJUSTMENT AND QUALITY ASSURANCE PROGRAMS
Sec. 301. Establishment and duties of Tobacco Production Control Corporation.
Sec. 302. Board of directors of Corporation.
Sec. 303. Board meetings.
Sec. 304. Staff.
Sec. 305. General powers of Corporation.
Sec. 306. Corporation relationship with tobacco loan associations.
Sec. 307. Tobacco base price levels.
Sec. 308. Penalties.
Sec. 309. Program referenda.
TITLE IV—TERMINATION OF CURRENT TOBACCO PROGRAMS
Sec. 401. Termination of marketing quota programs and repeal of related pro-
visions.
Sec. 402. Termination of tobacco price support loan and no net cost provisions
and repeal of related provisions.
Sec. 403. Continued availability of Federal crop insurance.
SEC. 2. DEFINITIONS.
In this Act:
(1) ACTIVE
TOBACCO
PRODUCER.—The term
‘‘active tobacco producer’’ means a person that—
(A) is the actual producer, as determined
by the Secretary, of tobacco on a farm where
tobacco is produced pursuant to a tobacco farm
marketing quota or farm acreage allotment es-
tablished under the Agricultural Adjustment
Act of 1938 (7 U.S.C. 1281 et seq.) for the
2002 crop year; and
(B) planted the crop, or is considered to
have planted the crop under that Act, in 2001
or 2002.
(2) ASSOCIATION.—The term ‘‘Association’’
means a producer-owned cooperative marketing asso-
ciation.
(3) CORPORATION.—The term ‘‘Corporation’’
means the Tobacco Production Control Corporation
established by section 301.
(4) QUOTA HOLDER.—The term ‘‘quota holder’’
means an owner, as of July 1, 2002, of a tobacco
farm marketing quota or a farm acreage allotment
established under the Agricultural Adjustment Act
of 1938 (7 U.S.C. 1281 et seq.) for the 2002 mar-
keting year.
(5) SECRETARY.—The term ‘‘Secretary’’ means
the Secretary of Agriculture.
(6) TRUST
FUND.—The term ‘‘Trust Fund’’
means the Tobacco Community Revitalization Trust
Fund established by section 101.
SEC. 3. PURPOSES.
It is the purpose of this Act—
(1) to terminate the existing Federal tobacco
program and establish federally chartered corpora-
tion to ensure the stability of the price and supply
of domestically produced tobacco;
(2) to compensate quota holders for the loss of
tobacco quota asset value as a result of the termi-
nation of the existing Federal tobacco program;
(3) to provide transition assistance to active to-
bacco producers; and
(4) to make domestically produced tobacco
more competitive with tobacco produced in other
countries by reducing the operating costs of tobacco
producers through the elimination of expenses asso-
ciated with buying or leasing tobacco quota.
TITLE I—TOBACCO COMMUNITY
REVITALIZATION TRUST FUND
SEC. 101. TOBACCO COMMUNITY REVITALIZATION TRUST
FUND.
(a) IN GENERAL.—
(1) ESTABLISHMENT.—There is established in
the Treasury of the United States a trust fund to
be known as the ‘‘Tobacco Community Revitalization
Trust Fund’’.
(2) CONTENTS.—The Trust Fund shall consist
of such amounts as may be appropriated or credited
to the Trust Fund, including funds held in a No Net
Cost Tobacco Fund or No Net Cost Tobacco Ac-
count that are transferred to the Trust Fund under
section 203(c).
(b) ADMINISTRATION.—The Trust Fund shall be ad-
ministered by the Tobacco Production Control Corpora-
tion.
(c) EXPENDITURES FROM TRUST FUND.—Amounts
in the Trust Fund shall be available for making expendi-
tures to defray—
(1) the costs of providing compensation to
quota holders for the loss of tobacco quota asset
value under section 201;
(2) the costs of making transition payments to
active tobacco producers under section 202;
(3) the costs of forgiving loans and transferring
title to inventories of tobacco and funds to the Com-
modity Credit Corporation under section 203;
(4) the costs of making transition payments to
other persons directly involved in tobacco production
and marketing under section 204;
(5) the costs of carrying out the duties of the
Corporation and the Associations, including assuring
the quality and controlling the production and mar-
keting of domestic tobacco and otherwise carrying
out title III; and
(6) the costs to the Secretary and the Corpora-
tion of enforcing title III.
TITLE II—TOBACCO MARKET
TRANSITION ASSISTANCE
SEC. 201. COMPENSATION TO QUOTA HOLDERS FOR LOSS
OF TOBACCO QUOTA ASSET VALUE.
(a) PAYMENT AUTHORITY.—Using amounts in the
Trust Fund, the Corporation shall make payments for to-
bacco quota to eligible quota holders.
(b) ELIGIBILITY.—To be eligible to receive payments
under this section, a quota holder shall prepare and sub-
mit to the Corporation an application at such time, in such
manner, and containing such information as the Corpora-
tion may require, including information sufficient to dem-
onstrate to the satisfaction of the Corporation that the
person was a quota holder on July 1, 2002.
(c) BASE QUOTA LEVEL.—
(1) IN GENERAL.—For each eligible quota hold-
er that submits an application under subsection (b),
the Secretary shall determine and provide to the
Corporation the base quota level of the quota holder.
(2) LEVEL.—For each kind of tobacco for
which the marketing quota is expressed in pounds,
the base quota level for a quota holder shall be equal
to, at the election of the quota holder—
(A) the tobacco farm marketing quota es-
tablished under the Agriculture Adjustment Act
of 1938 for the 2002 marketing year for quota
tobacco on the farm owned by the quota holder;
or
(B) the average of the tobacco farm mar-
keting quota established under the Agriculture
Adjustment Act of 1938 for the 1997, 1998,
and 1999 marketing years for quota tobacco on
the farm owned by the 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 each eligible
quota holder shall be determined in accordance with
this subsection (based on a poundage conversion) in
an amount equal to the product obtained by
multiplying—
(A) the tobacco farm marketing quota or
allotment established under the Agriculture Ad-
justment Act of 1938 for the 2002 marketing
year (or, at the election of the quota holder, the
average of the tobacco farm marketing quota or
allotment established under such for the 1997,
1998, and 1999 marketing years, for the quota
holder’s farm; by
(B) the average yield per acre for the
quota holder’s farm for the kind of tobacco for
that marketing year or those marketing years,
whichever applies.
(d) PAYMENT
AMOUNT.—The Corporation shall
make payments to each eligible quota holder in a total
amount equal to the product obtained by multiplying—
(1) $8 per pound; by
(2) the base quota level established for the
quota holder under subsection (c).
(e) TIME FOR PAYMENT.—The amount determined
under subsection (d) for a quota holder shall be paid in
five equal installments during each of the 2002 through
2006 crops of tobacco.
SEC. 202. TRANSITION PAYMENTS FOR ACTIVE TOBACCO
PRODUCERS.
(a) PAYMENT AUTHORITY.—Using amounts in the
Trust Fund, the Corporation shall make transition pay-
ments to eligible active tobacco producers.
(b) ELIGIBILITY.—To be eligible to receive payments
under this section, an active tobacco producer shall pre-
pare and submit to the Corporation an application at such
time, in such manner, and containing such information as
the Corporation may require, including information suffi-
cient to demonstrate to the satisfaction of the Corporation
that, the person planted, or is considered to have planted,
a 2001 or 2002 crop of tobacco.
(c) PAYMENT QUANTITY.—
(1) IN GENERAL.—For each eligible active to-
bacco producer that submits an application under
subsection (b), the Secretary shall determine and
provide to the Corporation, the production quantity
of the producer eligible for payments under this sec-
tion.
(2) ELIGIBLE
PRODUCTION
QUANTITY.—The
production quantity eligible for payment for an ac-
tive tobacco producer shall be equal to, at the elec-
tion of the active tobacco producer—
(A) the quantity, in pounds, of quota to-
bacco subject to the quota produced by the pro-
ducer under the Agriculture Adjustment Act of
1938 for the 2002 marketing year; or
(B) the average quantity, in pounds, of
quota tobacco subject to the quota produced by
the producer under the Agriculture Adjustment
Act of 1938 for the 1997, 1998, and 1999 mar-
keting 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 production quantity eligible for pay-
ment for each active tobacco producer shall be equal
to, at the election of the active tobacco producer—
(A) the actual pounds marketed for the
2002 crop year; or
(B) the average of the actual pounds mar-
keted for the 1997, 1998, and 1999 crop years.
(d) PAYMENT
AMOUNT.—The Corporation shall
make payments to each active tobacco producer in a total
amount equal to the product obtained by multiplying—
(1) $4 per pound; by
(2) the production base established for the ac-
tive producer under subsection (c).
(e) TIME FOR PAYMENT.—The amount determined
under subsection (d) for an active tobacco producer shall
be paid in five equal installments during each of the 2002
through 2006 crops of tobacco.
(f) DEATH OF ACTIVE TOBACCO PRODUCER.—If an
active tobacco producer 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
transfer to the surviving spouse or, if there is no surviving
spouse, to the estate of the producer.
SEC. 203. TOBACCO LOAN ASSOCIATIONS.
(a) PRIOR LOANS.—The Secretary shall forgive each
loan made to an Association under section 106A or 106B
of the Agricultural Act of 1949 (7 U.S.C. 1445 1, 1445
2) that is outstanding on the date of enactment of this
Act.
(b) TRANSFER OF TITLE FOR LOAN INVENTORIES.—
The Secretary shall transfer to the Commodity Credit Cor-
poration the title to all inventories of tobacco held by the
Secretary to secure loans made to the Association under
section 106A or 106B of the Agricultural Act of 1949 (7
U.S.C. 1445 1, 1445 2).
(c) NO NET COST TOBACCO FUNDS.—Notwith-
standing sections 106A(f) and 106B(g) of the Agricultural
Act of 1949 (7 U.S.C. 1445–1(f) and 1445–2(g)), all
funds held in a No Net Cost Tobacco Fund or No Net
Cost Tobacco Account on behalf of an Association under
section 106A or 106B of that Act (7 U.S.C. 1445–1,
1445–2) on the day before the date of enactment of this
Act shall be transferred to the Trust Fund.
SEC. 204. TRANSITION PAYMENTS FOR OTHER PERSONS IN-
VOLVED 
IN 
TOBACCO 
PRODUCTION 
AND
MARKETING.
(a) PAYMENTS
FOR OTHER PERSONS.—The Cor-
poration shall consider the feasibility of making transition
payments to tobacco graders, inspectors, checkers, auc-
tioneers, equipment dealers, warehousemen, and other
persons who are adversely and directly affected by the ter-
mination of the Federal tobacco program.
(b) RULES.—Payment amounts under this section
shall be established by and made according to the rules
issued by the Corporation.
SEC. 205. TAX TREATMENT OF COMPENSATION AND TRAN-
SITION PAYMENTS.
(a) IN GENERAL.—Part II of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to
items specifically included in gross income) is amended by
adding at the end the following new section:
‘‘SEC. 91. TOBACCO QUOTA HOLDER COMPENSATION AND
TRANSITION PAYMENTS.
‘‘(a) COMPENSATION TO QUOTA HOLDERS FOR LOSS
OF TOBACCO QUOTA ASSET VALUE.—Any amount re-
ceived under section 201 of the Tobacco Market Transi-
tion Act of 2002 shall be treated as gain from the sale
of a capital asset held for more than 1 year.
‘‘(b) TRANSITION PAYMENTS FOR ACTIVE TOBACCO
PRODUCERS.—Any amount received under section 202 of
such Act shall be included in gross income as ordinary
income.’’
(b) CLERICAL AMENDMENT.—The table of sections
for part II of subchapter B of chapter 1 of such Code
is amended by adding at the end the following new item:
‘‘Sec. 91. Tobacco quota holder compensation and transition pay-
ments.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 2001.
TITLE III—ESTABLISHMENT OF
PRIVATE TOBACCO PRODUC-
TION 
ADJUSTMENT 
AND
QUALITY 
ASSURANCE 
PRO-
GRAM
SEC. 301. ESTABLISHMENT AND DUTIES OF TOBACCO PRO-
DUCTION CONTROL CORPORATION.
(a) ESTABLISHMENT.—There is established a cor-
poration to be known as the ‘‘Tobacco Production Control
Corporation’’, which shall be a federally chartered instru-
mentality of the United States.
(b) DUTIES.—
(1) IN GENERAL.—Effective for the 2002 and
each subsequent crop of each kind of tobacco, the
Corporation shall be responsible for the promulga-
tion of rules governing the production, marketing,
importation, exportation, and consumer quality as-
surances for each kind of tobacco.
(2) MAJORITY VOTE REQUIRED.—The promul-
gation of rules under this section and other decisions
of the Corporation under this section shall require at
least a majority vote of the Board of Directors of
the Corporation.
(c) PRODUCTION AND MARKETING LICENSES.—
(1) IN GENERAL.—The Corporation shall estab-
lish a licensing system that provides for the orderly
production and marketing of tobacco in the United
States. The Corporation shall issue marketing li-
censes to tobacco marketing facilities and tobacco
purchasing entities.
(2) INITIAL LICENSE.—The Corporation shall
issue a license to each active tobacco producer, or
other person that meets requirements established by
the Corporation, initially based upon the eligible pro-
duction quantity determined for each active tobacco
producer under section 202(c).
(3) SUBSEQUENT CROP YEARS.—The Corpora-
tion shall establish the amount that each licensee
may market for each subsequent year based on the
production level recommended by the Secretary for
that year, which shall be based on the information
collected under section 320A of the Agricultural Ad-
justment Act of 1938 (7 U.S.C. 1314g), and the li-
censee’s production quantity for the preceding year.
(4) SURRENDER.—The licensee shall surrender
the license to the Corporation if the licensee fails to
actively engage in the production of tobacco.
(5) PROHIBITIONS.—
(A) MARKETING WITHOUT LICENSE.—The
sale or marketing of a type of tobacco which
prior to the date of enactment of this Act was
produced pursuant to a tobacco farm marketing
quota or farm acreage allotment issued under
the Agricultural Act of 1938 is prohibited with-
out a license.
(B) TRANSFER
OF
LICENSE.—The sale,
lease, or other transfer of a license shall be pro-
hibited except pursuant to subsection (h).
(d) COMPLIANCE.—The Corporation shall ensure
compliance, through whatever means is available, of all
persons with any license, regulation, rule, limitation, or
guideline issued under, or in order to carry out, this Act.
(e) QUALITY ASSURANCE.—The Corporation shall es-
tablish a system that will provide assurance to consumers
of the quality of all tobacco marketed in the United States
and that, at a minimum—
(1) provides for the inspection and grading of
domestically produced tobacco and imported tobacco;
(2) determines and describes the physical char-
acteristics of domestically produced tobacco and im-
ported tobacco; and
(3) ensures the physical and chemical integrity
of domestically produced tobacco and imported to-
bacco;
(f) METHODS TO CARRY OUT DUTIES.—To carry out
its duties, functions, and determinations, the Corporation
shall utilize Associations and local committees to the ex-
tent practicable and appropriate.
(g) TRANSITION.—The Corporation shall continue to
maintain and carry out a tobacco program in accordance
with the rules and regulations contained in chapter 7 of
the Code of Federal Regulations unless and until the Cor-
poration promulgates rules under subsection (b).
(h) TRANSFER OF LICENSE.—
(1) RIGHT OF SURVIVORSHIP.—In the case of
the death of a person to whom a license has been
issued under this section, the license shall transfer
to the surviving spouse of the person or, if there is
no surviving spouse, to surviving direct descendants
of the persons.
(2) HARDSHIP.—In the case of the death of a
person to whom a license has been issued under this
section and whose descendants are temporarily un-
able to produce a crop of tobacco, the Corporation
may hold the license in the name of the descendants
for a period of not more than 18 months, at the dis-
cretion of the Corporation.
(3) LIFETIME TRANSFER.—A person that is eli-
gible to obtain a license under this section may at
any time transfer all or part of the license to the
person’s spouse or direct descendants that are ac-
tively engaged in the production of tobacco.
SEC. 302. BOARD OF DIRECTORS OF CORPORATION.
(a) IN GENERAL.—The powers of the Corporation
shall be vested in a Board of Directors.
(b) MEMBERS.—The Board of Directors shall consist
of 25 members as follows:
(1) The Secretary of Agriculture.
(2) 
The 
Secretary 
of 
Agriculture 
shall
appoint—
(A) two members from each State that
produces more than 250,000,000 pounds of to-
bacco;
(B) one member from each State that pro-
duces more than 50,000,000 pounds, but less
than 250,000,000 pounds, of tobacco; and
(C) one member, to be appointed on a ro-
tating basis, from a State that produces less
than 50,000,000 pounds of tobacco.
(3) Three members appointed by Flue-cured to-
bacco associations and two members appointed by
Burley tobacco associations.
(4) One member appointed by tobacco associa-
tions other than those specified in paragraph (3), on
a rotating basis.
(5) The Secretary of Health and Human Serv-
ices shall appoint three members representing public
health interests.
(6) The Secretary of Agriculture shall appoint
four members representing domestic tobacco product
manufacturers, except that—
(A) no manufacturer may have more than
one member on the Board;
(B) at least one of the members must be
from a domestic smokeless tobacco manufac-
turer; and
(C) one of the members must be from a
domestic cigarette manufacturer that comprises
less than 5 percent of domestic cigarette sales,
or a cigar manufacturer, or a pipe tobacco man-
ufacturer, on a rotating basis.
(7) The Secretary of Agriculture shall appoint
one member representing domestic export leaf deal-
ers.
(8) The Secretary of Agriculture shall appoint
one member that is the person responsible for oper-
ating the quality assurance system of the Corpora-
tion described in section 301(e).
(c) MEMBERSHIP QUALIFICATIONS.—A member of
the Board shall not hold any Federal, State, or local elect-
ed office. The members appointed under paragraphs (2),
(3), and (4) of subsection (b) must be licensees under sec-
tion 301.
(d) CHAIRPERSONS.—The Secretary of Agriculture
shall serve as chairperson of the Board.
(e) TERM; VACANCIES.—
(1) TERM.—The term of office of a member of
the Board appointed under any of paragraphs (2)
through (8) of subsection (b) shall be four years.
(2) VACANCIES.—A vacancy on the Board shall
be filled in the same manner as the original appoint-
ment was made.
(f) COMPENSATION.—
(1) FEDERAL
MEMBERS.—A member of the
Board who is an officer or employee of the United
States shall not receive any additional compensation
by reason of service on the Board.
(2) NON-FEDERAL MEMBERS.—Any other mem-
ber shall receive compensation, for each day (includ-
ing travel time) that the member is engaged in the
performance of the functions of the Board, at a rate
determined appropriate by the Board.
(3) EXPENSES.—A member of the Board shall
be reimbursed for travel, subsistence, and other nec-
essary expenses incurred by the member in the per-
formance of the duties of the member.
(4) REPRESENTATION.—No member of the
Board shall receive compensation from more than
one interest represented on the Board.
(g) CONFLICT OF INTEREST.—
(1) CONFLICT OF INTEREST.—Except as pro-
vided in paragraph (3), a member of the Board shall
not vote on any matter concerning any application,
contract, or claim, or other particular matter pend-
ing before the Corporation, in which, to the knowl-
edge of the member, the member, spouse, or child of
the member, partner of the member, or organization
in which the member is serving as officer, director,
trustee, partner, or employee, or any person or orga-
nization with which the member is negotiating or
has any arrangement concerning prospective employ-
ment, has a financial interest.
(2) VIOLATIONS.—Violation of paragraph (1)
by a member of the Board shall be cause for removal
of the member, but shall not impair or otherwise af-
fect the validity of any otherwise lawful action by
the Corporation in which the member participated.
(3) EXCEPTIONS.—The prohibitions contained
in paragraph (1) shall not apply to a member of the
Board that is a tobacco producer if the member ad-
vises the Board of the nature of the particular mat-
ter in which the member proposes to participate, and
if the member makes a full disclosure of the finan-
cial interest, prior to any participation.
(h) FINANCIAL DISCLOSURE.—A Board member
shall be subject to the financial disclosure requirements
of subchapter B of chapter XVI of title 5, Code of Federal
Regulations (or any corresponding or similar regulation
or ruling), applicable to a special Government employee
(as defined in section 202(a) of title 18, United States
Code).
SEC. 303. BOARD MEETINGS.
(a) IN GENERAL.—The Board shall meet at least
three times each fiscal year at the call of a Chairperson
or at the request of the Executive Director.
(b) LOCATION.—The location of a meeting shall be
subject to approval of the Executive Director.
(c) QUORUM.—A quorum of the Board shall consist
of a majority of the members.
SEC. 304. STAFF.
(a) EXECUTIVE DIRECTOR.—
(1) APPOINTMENT.—The Board shall appoint
an Executive Director.
(2) DUTIES.—The Executive Director shall be
the chief executive officer of the Corporation, with
such power and authority as may be conferred by
the Board.
(3) COMPENSATION.—The Executive Director
shall receive basic pay at the rate provided for level
IV of the Executive Schedule under section 5315 of
title 5, United States Code.
(b) OFFICERS.—The Board shall establish the offices
and appoint the officers of the Corporation, including a
Secretary, and define the duties of the officers in a man-
ner consistent with this section.
(c) OTHER PERSONNEL.—The Corporation may se-
lect and appoint officers, attorneys, employees, and
agents, who shall be vested with such powers and duties
as the Corporation may determine. The Corporation in-
demnify such personnel, as the Board considers necessary
and desirable, except that an officer, attorney, or employee
of the Corporation shall not be indemnified for an act out-
side the scope of employment.
(d) CONSULTANT AND INTERMITTENT SERVICES.—
The Corporation may obtain the services and fix the com-
pensation of any consultant and otherwise procure tem-
porary and intermittent services under section 3109(b) of
title 5, United States Code.
(e) COMMITTEES.—The Corporation may provide for
and designate such committees, and the functions of the
committees, as the Board considers necessary or desirable.
SEC. 305. GENERAL POWERS OF CORPORATION.
(a) BYLAWS.—The Board shall adopt, and may from
time to time amend, any bylaw that is necessary for the
proper management and functioning of the Corporation
and adopt and alter a corporate seal, which shall be judi-
cially noticed.
(b) CORPORATION NAME.—The Corporation shall
have succession in its corporate name.
(c) AGREEMENT AND CONTRACT AUTHORITY.—The
Corporation may enter into any agreement or contract
with a person or private or governmental agency.
(d) ACQUISITION AND DISPOSAL AUTHORITY.—The
Corporation may lease, purchase, accept a gift or donation
of, or otherwise acquire, use, own, hold, improve, or other-
wise deal in or with, and sell, convey, mortgage, pledge,
lease, exchange, or otherwise dispose of, any property or
interest in property, as the Corporation considers nec-
essary in the transaction of the business of the Corpora-
tion. The Corporation may sell assets, loans, and equity
interests acquired in connection with the financing of
projects funded by the Corporation.
(e) LEGAL ACTIONS.—The Corporation may sue and
be sued in the corporate name of the Corporation and may
independently retain legal representation, except that—
(1) no attachment, injunction, garnishment, or
similar process shall be issued against the Corpora-
tion or property of the Corporation; and
(2) exclusive original jurisdiction shall reside in
the district courts of the United States, and the Cor-
poration may intervene in any court in any suit, ac-
tion, or proceeding in which the Corporation has an
interest.
(f) ASSISTANCE OF FEDERAL AGENCIES.—The Cor-
poration may, with the consent of any board, commission,
independent establishment, or executive department of the
Federal Government, including any field service, use infor-
mation, services, facilities, officials, and employees in car-
rying out the duties of the Corporation, and pay for the
use, which payments shall be transferred to the applicable
appropriation account that incurred the expense.
(g) RIGHTS, PRIVILEGES, AND IMMUNITIES.—The
Corporation shall have the rights, privileges, and immuni-
ties of the United States with respect to the right to pri-
ority of payment with respect to debts due from bankrupt,
insolvent, or deceased creditors.
(h) FINANCIAL
AUTHORITIES.—The Corporation
may collect or compromise any obligations assigned to or
held by the Corporation, including any legal or equitable
rights accruing to the Corporation, and shall determine
the character of, and necessity for, obligations and ex-
penditures of the Corporation and the manner in which
the obligations and expenditures shall be incurred, al-
lowed, and paid, subject to provisions of law specifically
applicable to Government corporations. The Corporation
may make final and conclusive settlement and adjustment
of any claim by or against the Corporation or a fiscal offi-
cer of the Corporation.
(i) OTHER POWERS.—The Corporation may exercise
all other lawful powers necessarily or reasonably related
to the establishment of the Corporation to carry out this
title and the powers, purposes, functions, duties, and au-
thorized activities of the Corporation.
SEC. 306. CORPORATION RELATIONSHIP WITH TOBACCO
LOAN ASSOCIATIONS.
The Corporation shall enter into an agreement with
producer-owned cooperative marketing loan associations
for each kind of tobacco—
(1) to make a base price available to producers
of the kind of tobacco;
(2) arrange for financing and the administra-
tion of a base price for the kind of tobacco; and
(4) receive, process, store, and sell any domesti-
cally produced tobacco received as collateral for a
base price loan.
SEC. 307. TOBACCO BASE PRICE LEVELS.
(a) DETERMINATION.—The Corporation, in consulta-
tion with the Secretary and the Associations, shall deter-
mine, and revise as necessary, a base price for each kind
of tobacco, which shall be based on the cost of producing
that kind of tobacco.
(b) EFFECTIVE DATE.—The base prices determined
under subsection (a) shall take effect beginning with the
2003 tobacco crops.
SEC. 308. PENALTIES.
(a) IN GENERAL.—The violation of any provision of
this Act, or any rule or regulation issued to carry out this
Act, or the terms of any license issued under this Act,
by a person (including the marketing of any kind of to-
bacco without a license issued under this title or in excess
of the quantity permitted under such a license) shall sub-
ject the person to revocation or suspension of the person’s
license, a penalty of 100 percent of the average market
price (calculated to the nearest whole cent) for the kind
of tobacco for the immediately preceding marketing year,
or both, in the discretion of the Secretary.
(b) PAYER.—
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the penalty shall be paid by
the person who acquired the tobacco from the pro-
ducer.
(2) DEDUCTION
FROM
PRICE.—An amount
equivalent to the penalty may be deducted by the
buyer from the price paid to the producer in any
case in which the tobacco is marketed by sale.
(3) HANDLER.—If the tobacco is marketed by
the producer through a handler, the penalty shall be
paid by the handler, which may deduct an amount
equivalent to the penalty from the price paid to the
producer.
(4) DIRECT
MARKETING
OUTSIDE
UNITED
STATES.—In any case in which tobacco is marketed
directly to any person outside the United States, the
penalty shall be paid and remitted by the producer.
(c) FALSE STATEMENT OR OMISSION.—If any pro-
ducer falsely identifies or fails to account for the disposi-
tion of any tobacco—
(1) an amount of tobacco equal to the normal
yield of the number of acres harvested in excess of
the quantity permitted under a license issued under
this title shall be considered to have been marketed
in excess of the license for the farm; and
(2) the penalty for the excess marketing shall
be paid and remitted by the producer.
(d) CARRYOVER.—Tobacco carried over by the pro-
ducer of the tobacco from 1 marketing year to another
marketing year may be marketed without payment of the
penalty imposed by this section if—
(1) the total quantity of tobacco available for
marketing from the farm in the marketing year from
which the tobacco is carried over does not exceed the
quantity that may be marketed under a license
issued for the farm for the marketing year; or
(2) the quantity of tobacco carried over does
not exceed the normal production of that number of
acres by which the harvested acreage of tobacco in
the calendar year in which the marketing year be-
gins is less than the quantity that may be marketed
under the license.
(e) TOBACCO MARKETED PRIOR
TO MARKETING
YEAR.—Tobacco produced in a calendar year for the mar-
keting year beginning during the calendar year shall be
subject to licenses issued for the marketing year even
though the tobacco is marketed prior to the date on which
the marketing year begins.
(f) PROPORTIONAL PAYMENTS.—The Secretary shall
require collection of the penalty on a proportion of each
lot of tobacco marketed from the farm equal to the propor-
tion that the tobacco available for marketing from the
farm in excess of the quantity that may be marketed under
a license is of the total quantity of tobacco available for
marketing from the farm if satisfactory proof is not fur-
nished as to the disposition to be made of the excess to-
bacco prior to the marketing of any tobacco from the farm.
(g) LIEN.—Until the amount of the penalty provided
by this section is paid, a lien on the tobacco with respect
to which the penalty is incurred, and on any subsequent
tobacco subject to licenses issued under this title in which
the person liable for payment of the penalty has an inter-
est, shall be in effect in favor of the Corporation for the
amount of the penalty.
SEC. 309. PROGRAM REFERENDA.
(a) INITIAL REFERENDUM.—
(1) REFERENDUM REQUIRED.—After the end of
the three-year period beginning on the date of enact-
ment of this Act, if at least one-third of the licensees
engaged in the production of a kind of tobacco re-
quest a referendum under this subsection, the Cor-
poration shall conduct a referendum among the li-
censees engaged in the production of that kind of to-
bacco to determine whether the licensees are in favor
of continuing the operation of the program estab-
lished under this Act with respect to that kind of to-
bacco.
(2) PROCESS AND RESULTS.—If more than one-
half of the licensees voting in a referendum con-
ducted under paragraph (1) with respect to a kind
of tobacco oppose the continuation of the program,
the Corporation shall announce the result and shall
conduct a second referendum with respect to that
kind of tobacco one year later. If more than one-half
of the licensees voting in the second referendum also
oppose the continuation of the program, the Cor-
poration shall announce the result and the program
shall cease to be in effect for that kind of tobacco.
(b) SUBSEQUENT REFERENDA.—The Corporation
may conduct subsequent referenda from time to time as
the Corporation considers appropriate to determine wheth-
er producers are in favor of continuing the program estab-
lished under this Act, the use of licenses, limitations on
license transfer, or any other aspect of the program.
TITLE IV—TERMINATION OF
CURRENT TOBACCO PROGRAMS
SEC. 401. TERMINATION OF MARKETING QUOTA PROGRAMS
AND REPEAL OF RELATED PROVISIONS.
(a) TOBACCO CONTROL ACT.—The Act of April 25,
1936 (commonly known as the Tobacco Control Act; 7
U.S.C. 515–515k), is repealed.
(b) COMMODITY HANDLING ORDERS.—Section 8c(2)
of the Agricultural Adjustment Act (7 U.S.C. 608c(2)),
reenacted with amendments by the Agricultural Marketing
Agreement Act of 1937, is amended by striking ‘‘to-
bacco,’’.
(c) PROCESSING TAX.—Section 9(b) of the Agricul-
tural Adjustment Act (7 U.S.C. 609(b)), reenacted with
amendments by the Agricultural Marketing Agreement
Act of 1937, is amended—
(1) in paragraph (2), by striking ‘‘tobacco,’’
(2) in paragraph (6)(B)(i), by striking ‘‘, or, in
the case of tobacco, is less than the fair exchange
value by not more than 10 per centum,’’.
(d) BURLEY TOBACCO IMPORT REVIEW.—Section 3
of Public Law 98–59 (7 U.S.C. 625) is repealed.
(e) DECLARATION OF POLICY.—Section 2 of the Ag-
ricultural Adjustment Act of 1938 (7 U.S.C. 1282) is
amended by striking ‘‘tobacco,’’.
(f) 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-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.—
(1) REPEAL.—Except for the section referred
to in paragraph (2), part I of subtitle B of title III
of the Agricultural Adjustment Act of 1938 (7
U.S.C. 1311 et seq.) is repealed.
(2) SUBMISSION OF MANUFACTURER PURCHASE
INTENTIONS.—Section 320A of the Agricultural Ad-
justment Act of 1938 (7 U.S.C. 1314g) is not re-
pealed, but subsection (a)(1) of such section is
amended to read as follows:
‘‘(1) Not later than December 1 of each marketing
year with respect to Flue-cured tobacco, and January 15
of each marketing year with respect to Burley tobacco or
other types of tobacco, each domestic manufacturer of
cigarettes shall submit to the Secretary a statement, by
kind, of the quantity of Flue-cured tobacco, Burley to-
bacco, and other types of tobacco that the manufacturer
intends to purchase, directly or indirectly, on the United
States auction markets or from producers during the next
succeeding marketing year (in this section referred to as
the ‘quantity of intended purchases’).’’.
(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).
(u) APPLICATION OF AMENDMENTS.—The amend-
ments made by this section shall apply with respect to the
2003 and subsequent tobacco crops.
SEC. 402. TERMINATION OF TOBACCO PRICE SUPPORT
LOAN AND NO NET COST PROVISIONS AND
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) TERMINATION OF TOBACCO PRICE SUPPORT AND
NO NET COST PROVISIONS.—Sections 106, 106A, 106B,
and 106C of the Agricultural Act of 1949 (7 U.S.C. 1445,
1445–1, 1445–2, 1445–3) are repealed.
(c) 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,’’.
(d) REVIEW OF BURLEY TOBACCO IMPORTS.—Sec-
tion 3 of Public Law 98–59 (7 U.S.C. 625) is repealed.
(e) POWERS
OF COMMODITY CREDIT CORPORA-
TION.—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) PRICE SUPPORT LOAN OBLIGATIONS.—The
amendments made by this section shall not affect
any person’s obligations that arise under or with re-
spect to the price support loan program or loans
issued through such program under any provision of
law in effect before the amendments take effect as
provided under subsection (g).
(2) TOBACCO STOCKS AND LOANS.—The Sec-
retary of Agriculture shall issue regulations that
require—
(A) the orderly disposition of quota to-
bacco held by any producer-owned cooperative
marketing association that has entered into a
loan agreement with the Commodity Credit
Corporation to make price support available to
producers of quota tobacco;
(B) the repayment of all tobacco price sup-
port loans or surrender of collateral by such as-
sociations not later than one year after this sec-
tion becomes effective.
(3) SPECIAL RULES FOR TERMINATION OF NO
NET COST FUNDS AND ACCOUNTS.—Notwithstanding
any other provision of law, upon the repeal by sub-
section (b) of the authorities in section 106A and
106B of the Agricultural Act of 1949 for the estab-
lishment of tobacco no net cost funds and accounts,
respectively—
(A) any obligation of a tobacco producer,
purchaser, or importer to make payments into
any such fund or account also shall terminate;
and
(B) any monies in any such fund or ac-
count shall be disposed of in the manner pre-
scribed by the Secretary of Agriculture, except
that—
(i) to the extent needed, such monies
shall be applied or used for the purposes
therefor prescribed by such sections; and
(ii) if any monies remain, the Sec-
retary shall transfer such monies to the
Secretary of Health and Human Services
for use in accordance with section 402.
(g) APPLICATION OF AMENDMENTS.—This section
and the amendments made by this section shall apply with
respect to the 2003 and subsequent tobacco crops.
SEC. 403. CONTINUED AVAILABILITY OF FEDERAL CROP IN-
SURANCE.
Nothing in this title shall be construed to affect the
eligibility of tobacco producers to obtain crop insurance
for their crops pursuant to the Federal Crop Insurance
Act (7 U.S.C. 1501 et seq.) under the terms of such Act.
Æ