(b) 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,’’; 
and 
(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,’’. 
(c) DECLARATION OF POLICY.—Section 2 of the Ag-
ricultural Adjustment Act of 1938 (7 U.S.C. 1282) is 
amended by striking ‘‘tobacco,’’. 
(d) DEFINITIONS.—Section 301(b) of the Agricul-
tural 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 (10)—
(A) by striking subparagraph (B); and 
(B) by redesignating subparagraph (C) as 
subparagraph (B);
(4) in paragraph (11)(B), by striking ‘‘and to-
bacco’’; 
(5) in paragraph (12), by striking ‘‘tobacco,’’; 
(6) in paragraph (14)—
(A) in subparagraph (A), by striking 
‘‘(A)’’; and 
(B) by striking subparagraphs (B), (C), 
and (D); 
(7) by striking paragraph (15); 
(8) in paragraph (16)—
(A) by striking subparagraph (B); and 
(B) by redesignating subparagraph (C) as 
subparagraph (B); 
(9) by striking paragraph (17); and 
(10) by redesignating paragraph (16) as para-
graph (15). 
(e) 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,’’. 
(f) ADMINISTRATIVE PROVISIONS.—Section 361 of 
the Agricultural Adjustment Act of 1938 (7 U.S.C. 1361) 
is amended by striking ‘‘tobacco,’’.
(g) 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 ‘‘rice, or tobacco’’ and inserting ‘‘or rice’’; 
and 
(2) in the first sentence of subsection (b), by 
striking ‘‘rice, or tobacco’’ and inserting ‘‘or rice’’. 
(h) REGULATIONS.—Section 375 of the Agricultural 
Adjustment Act of 1938 (7 U.S.C. 1375) is amended—
(1) in subsection (a), by striking ‘‘peanuts, or 
tobacco’’ and inserting ‘‘or peanuts’’; and 
(2) by striking subsection (c). 
(i) EMINENT DOMAIN.—Section 378 of the Agricul-
tural Adjustment Act of 1938 (7 U.S.C. 1378) is amend-
ed—
(1) in the first sentence of subsection (c), by 
striking ‘‘cotton, and tobacco’’ and inserting ‘‘and 
cotton’’; and 
(2) by striking subsections (d), (e), and (f). 
(j) BURLEY TOBACCO FARM RECONSTITUTION.—
Section 379 of the Agricultural Adjustment Act of 1938 
(7 U.S.C. 1379) is amended—
(1) in subsection (a)—
(A) by striking ‘‘(a)’’; and
(B) in paragraph (6), by striking ‘‘, but 
this clause (6) shall not be applicable in the 
case of burley tobacco’’; and 
(2) by striking subsections (b) and (c). 
(k) ACREAGE-POUNDAGE QUOTAS.—Section 4 of the 
Act of April 16, 1955 (Public Law 89–12; 7 U.S.C. 1314c 
note), is repealed. 
(l) BURLEY TOBACCO ACREAGE ALLOTMENTS.—The 
Act of July 12, 1952 (7 U.S.C. 1315), is repealed. 
(m) TRANSFER OF ALLOTMENTS.—Section 703 of 
the Food and Agriculture Act of 1965 (7 U.S.C. 1316) 
is repealed. 
(n) 
ADVANCE
RECOURSE
LOANS.—Section 
13(a)(2)(B) of the Food Security Improvements Act of 
1986 (7 U.S.C. 1433c–1(a)(2)(B)) is amended by striking 
‘‘tobacco and’’. 
(o) TOBACCO FIELD MEASUREMENT.—Section 1112 
of the Omnibus Budget Reconciliation Act of 1987 (Public 
Law 100–203) is amended by striking subsection (c). 
SEC. 102. TERMINATION OF TOBACCO PRICE SUPPORT 
PROGRAM AND RELATED PROVISIONS. 
(a) TERMINATION OF TOBACCO PRICE SUPPORT AND 
NO NET COST PROVISIONS.—Sections 106, 106A, and 
106B of the Agricultural Act of 1949 (7 U.S.C. 1445, 
1445–1, 1445–2) are repealed.
(b) 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 subsections (c), (g), (h), and (i); 
(3) in subsection (d)(3)—
(A) by striking ‘‘, except tobacco,’’; and 
(B) by striking ‘‘and no price support shall 
be made available for any crop of tobacco for 
which marketing quotas have been disapproved 
by producers;’’; and 
(4) by redesignating subsections (d) and (e) as 
subsections (c) and (d), respectively. 
(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) 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. 
SEC. 103. LIABILITY. 
The amendments made by this title shall not affect 
the liability of any person under any provision of law so
amended with respect to any crop of tobacco planted be-
fore the effective date of this Act. 
TITLE 
II—TRANSITIONAL 
PAY-
MENTS TO TOBACCO QUOTA 
HOLDERS AND ACTIVE PRO-
DUCERS OF TOBACCO 
SEC. 201. DEFINITIONS OF ACTIVE TOBACCO PRODUCER 
AND QUOTA HOLDER. 
In this title: 
(1) ACTIVE
TOBACCO
PRODUCER.—The term 
‘‘active tobacco producer’’ means an owner, oper-
ator, landlord, tenant, or sharecropper who, as of 
the day before the date of the enactment of this 
Act—
(A) shared in the risk of producing tobacco 
on a farm where tobacco was produced pursu-
ant to a tobacco farm marketing quota or farm 
acreage allotment established under part I of 
subtitle B of title III of the Agricultural Ad-
justment Act of 1938 (7 U.S.C. 1311 et seq.), 
as in effect on the day before the date of the 
enactment of this Act; and 
(B) was actively engaged on that farm in 
the production of tobacco marketed or consid-
ered planted.
(2) CONSIDERED PLANTED.—The term ‘‘con-
sidered planted’’ means tobacco that was planted, 
but failed to be produced as a result of a natural 
disaster, as determined by the Secretary. 
(3) TOBACCO QUOTA HOLDER.—The term ‘‘to-
bacco quota holder’’ means an owner, as of the day 
before the date of the enactment of this Act, of a 
tobacco farm marketing quota or a farm acreage al-
lotment established under part I of subtitle B of title 
III of the Agricultural Adjustment Act of 1938 (7 
U.S.C. 1311 et seq.), as in effect on the day before 
the date of the enactment of this Act. 
(4) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Agriculture. 
SEC. 202. PAYMENTS TO TOBACCO QUOTA HOLDERS. 
(a) PAYMENT REQUIRED.—The Secretary shall make 
payments to each eligible tobacco quota holder for the ter-
mination of tobacco marketing quotas and related price 
support under title I, which shall constitute full and fair 
compensation for any losses relating to such termination. 
(b) ELIGIBILITY.—To be eligible to receive a payment 
under this section, a person shall submit to the Secretary 
an application containing such information as the Sec-
retary may require to demonstrate to the satisfaction of 
the Secretary that the person satisfies the definition of
tobacco quota holder. The application shall be submitted 
within such time, in such form, and in such manner as 
the Secretary may require. 
(c) INDIVIDUAL BASE QUOTA LEVEL.—
(1) IN GENERAL.—The Secretary shall establish 
a base quota level applicable to each eligible tobacco 
quota holder identified under subsection (b). 
(2) POUNDAGE
QUOTAS.—Subject to adjust-
ment under subsection (d), for each kind of tobacco 
for which the marketing quota is expressed in 
pounds, the base quota level for each tobacco quota 
holder shall be equal to the basic tobacco marketing 
quota under the Agriculture Adjustment Act of 1938 
for the marketing year in effect on the date of the 
enactment of this Act for quota tobacco on the farm 
owned by the tobacco quota holder. 
(3) MARKETING QUOTAS OTHER THAN POUND-
AGE
QUOTAS.—Subject to adjustment under sub-
section (d), for each kind of tobacco for which there 
is marketing quota or allotment on an acreage basis, 
the base quota level for each tobacco quota holder 
shall be the amount equal to the product obtained 
by multiplying—
(A) the basic tobacco farm marketing 
quota or allotment for the marketing year in ef-
fect on the date of the enactment of this Act, 
as established by the Secretary for quota to-
bacco on the farm owned by the tobacco quota 
holder; by 
(B) the average county production yield 
per acre for the county in which the farm is lo-
cated for the kind of tobacco for that marketing 
year. 
(d) TREATMENT
OF
CERTAIN
CONTRACTS
AND 
AGREEMENTS.—
(1) EFFECT
OF
PURCHASE
CONTRACT.—If 
there was an agreement for the purchase of all or 
part of a farm described in subsection (c) as of the 
date of the enactment of this Act, and the parties 
to the sale are unable to agree to the disposition of 
eligibility for payments under this section, the Sec-
retary, taking into account any transfer of quota 
that has been agreed to, shall provide for the equi-
table division of the payments among the parties by 
adjusting the determination of who is the tobacco 
quota holder with respect to particular pounds of the 
quota. 
(2) EFFECT OF AGREEMENT FOR PERMANENT 
QUOTA
TRANSFER.—If the Secretary determines 
that there was in existence, as of the day before the
date of the enactment of this Act, an agreement for 
the permanent transfer of quota, but that the trans-
fer was not completed by that date, the Secretary 
shall consider the tobacco quota holder to be the 
party to the agreement that, as of that date, was the 
owner of the farm to which the quota was to be 
transferred. 
(e) TOTAL PAYMENT AMOUNTS BASED
ON 2002 
MARKETING YEAR.—
(1) 
CALCULATION
OF
ANNUAL
PAYMENT 
AMOUNT.—During fiscal years 2005 through 2009, 
the Secretary shall make payments to all eligible to-
bacco quota holders identified under subsection (b) 
in an annual amount equal to the product obtained 
by multiplying, for each kind of tobacco for which 
the marketing quota is expressed in pounds—
(A) $1.40 per pound; by 
(B) the total tobacco farm marketing 
quotas established under the Agriculture Ad-
justment Act of 1938 for the 2002 marketing 
year for that kind of tobacco. 
(2) 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 2002 marketing year for that kind of tobacco to 
a poundage basis before executing the mathematical 
equation specified in paragraph (1). 
(f) INDIVIDUAL PAYMENT AMOUNTS.—The annual 
payment amount for each eligible tobacco quota holder 
with respect to a kind of tobacco under this section shall 
bear the same ratio to the amount determined by the Sec-
retary under subsection (e) with respect to that kind of 
tobacco as the individual base quota level of that eligible 
tobacco quota holder under subsection (c) with respect to 
that kind of tobacco bears to the total base quota levels 
of all eligible tobacco quota holders with respect to that 
kind 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. 203. TRANSITION PAYMENTS FOR ACTIVE PRODUCERS 
OF QUOTA TOBACCO. 
(a) TRANSITION PAYMENTS REQUIRED.—The Sec-
retary shall make transition payments under this section 
to eligible active producers of quota tobacco. 
(b) ELIGIBILITY.—To be eligible to receive a transi-
tion payment under this section, a person shall submit to 
the Secretary an application containing such information 
as the Secretary may require to demonstrate to the satis-
faction of the Secretary that the person satisfies the defi-
nition of active producer of quota tobacco. The application 
shall be submitted within such time, in such form, and 
in such manner as the Secretary may require. 
(c) CURRENT PRODUCTION BASE.—The Secretary 
shall establish a production base applicable to each eligible 
active producer of quota tobacco identified under sub-
section (b). A producer’s production base shall be equal 
to the quantity, in pounds, of quota tobacco subject to the 
basic marketing quota marketed or considered planted by 
the producer under the Agriculture Adjustment Act of 
1938 for the marketing year in effect on the date of the 
enactment of this Act. 
(d) TOTAL PAYMENT AMOUNTS BASED
ON 2002 
MARKETING YEAR.—
(1) 
CALCULATION
OF
ANNUAL
PAYMENT 
AMOUNT.—During fiscal years 2005 through 2009,
the Secretary shall make payments to all eligible ac-
tive producers of quota tobacco identified under sub-
section (b) in an annual amount equal to the prod-
uct obtained by multiplying, for each kind of tobacco 
for which the marketing quota is expressed in 
pounds—
(A) $0.60 per pound; by 
(B) the total tobacco farm marketing 
quotas established under the Agriculture Ad-
justment Act of 1938 for the 2002 marketing 
year for that kind of tobacco. 
(2) 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 2002 marketing year for that kind of tobacco to 
a poundage basis before executing the mathematical 
equation specified in paragraph (1). 
(e) INDIVIDUAL PAYMENT AMOUNTS.—The annual 
payment amount for each eligible active producer of quota 
tobacco identified under subsection (b) with respect to a 
kind of tobacco under this section shall bear the same 
ratio to the amount determined by the Secretary under
subsection (d) with respect to that kind of tobacco as the 
individual production base of that eligible active producer 
under subsection (c) with respect to that kind of tobacco 
bears to the total production bases determined under that 
subsection for all eligible active producers of that kind of 
tobacco. 
(f) DEATH OF TOBACCO PRODUCER.—If a tobacco 
producer who is entitled to payments under this section 
dies and is survived by a spouse or one or more depend-
ents, the right to receive the payments shall transfer to 
the surviving spouse or, if there is no surviving spouse, 
to the estate of the tobacco producer. 
SEC. 204. GEOGRAPHICAL RESTRICTIONS ON EXPANSION 
OF TOBACCO PRODUCTION. 
(a) PURPOSE.—The purpose of this section is to pro-
vide an orderly economic transition away from the mar-
keting of tobacco based on quotas and price support while 
also addressing the economic dislocation, and the resulting 
impact on interstate commerce, that the termination of the 
tobacco quota and price support programs might cause. 
(b) PENALTY APPLICABLE
TO TOBACCO GROWN 
OUTSIDE TRADITIONAL TOBACCO COUNTIES.—The mar-
keting of tobacco in the 2005 or subsequent marketing 
years, of a kind of tobacco that was subject to a marketing 
quota in the 2002 marketing year, shall be subject to a
penalty equal to 100 percent of the total amount received 
on the marketing of the tobacco unless the tobacco was 
grown in a traditional tobacco county. 
(c) DEFINITIONS.—In this section: 
(1) The term ‘‘marketing year’’ means July 1 
to June 30 for flue-cured tobacco and October 1 to 
September 30 for all other kinds of tobacco. 
(2) The term ‘‘marketing quota in the 2002 
marketing year’’ means a quota established for that 
year pursuant to part I of subtitle B of title III of 
the Agricultural Adjustment Act of 1938 (7 U.S.C. 
1311 et seq.) and related provisions, as in effect for 
that marketing year. 
(3) The term ‘‘traditional tobacco county’’, with 
respect to a kind of tobacco, means—
(A) a county in the United States that had 
1 or more farms operated by active producers 
of quota tobacco of that kind of tobacco under 
a marketing quota in the 2002 marketing year; 
or 
(B) a county contiguous to a county de-
scribed in subparagraph (A) for that kind of to-
bacco.
SEC. 205. RESOLUTION OF DISPUTES. 
Any dispute regarding the eligibility of a person to 
receive a payment under this title, or the amount of the 
payment, shall be resolved by the county committee estab-
lished under section 8 of the Soil Conservation and Do-
mestic Allotment Act (16 U.S.C. 590h) for the county or 
other area in which the farming operation of the person 
is located. 
SEC. 206. SOURCE OF FUNDS FOR PAYMENTS. 
There is hereby appropriated to the Secretary, from 
amounts in the general fund of the Treasury, such 
amounts as the Secretary needs in order to make the pay-
ments required by sections 202 and 203, provided such 
amounts do not exceed amounts received in the Treasury 
under chapter 52 of the Internal Revenue Code of 1986 
(relating to tobacco products and cigarette papers and 
tubes).
Æ