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properly allocable to qualified intellectual property 
for purposes of this subsection if such income is re-
ceived by or accrued to the donee after the expira-
tion of the legal life of such property. 
‘‘(7) APPLICABLE PERCENTAGE.—For purposes 
of this subsection, the term ‘applicable percentage’ 
means the percentage determined under the fol-
lowing table which corresponds to a taxable year of 
the donor ending on or after the date of the quali-
fied intellectual property contribution: 
‘‘Taxable Year of Donor 
Ending on or After 
Applicable 
Date of Contribution: 
Percentage: 
1st ......................................................................................................
100
2nd .....................................................................................................
100
3rd ......................................................................................................
4th ......................................................................................................
5th ......................................................................................................
6th ......................................................................................................
7th ......................................................................................................
8th ......................................................................................................
9th ......................................................................................................
10th ....................................................................................................
11th ....................................................................................................
12th ....................................................................................................
10. 
‘‘(8) QUALIFIED
INTELLECTUAL
PROPERTY 
CONTRIBUTION.—For purposes of this subsection, 
the term ‘qualified intellectual property contribution’ 
means any charitable contribution of qualified intel-
lectual property— 
‘‘(A) the amount of which taken into ac-
count under this section is reduced by reason of 
subsection (e)(1), and
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‘‘(B) with respect to which the donor in-
forms the donee at the time of such contribu-
tion that the donor intends to treat such con-
tribution as a qualified intellectual property 
contribution for purposes of this subsection and 
section 6050L. 
‘‘(9) QUALIFIED INTELLECTUAL PROPERTY.— 
For purposes of this subsection, the term ‘qualified 
intellectual property’ means property described in 
subsection (e)(1)(B)(iii) (other than property con-
tributed to or for the use of an organization de-
scribed in subsection (e)(1)(B)(ii)). 
‘‘(10) OTHER SPECIAL RULES.— 
‘‘(A) APPLICATION
OF
LIMITATIONS
ON 
CHARITABLE
CONTRIBUTIONS.—Any increase 
under this subsection of the deduction provided 
under subsection (a) shall be treated for pur-
poses of subsection (b) as a deduction which is 
attributable to a charitable contribution to the 
donee to which such increase relates. 
‘‘(B) 
NET
INCOME
DETERMINED
BY 
DONEE.—The net income taken into account 
under paragraph (3) shall not exceed the 
amount of such income reported under section 
6050L(b)(1).
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‘‘(C) DEDUCTION LIMITED TO 12 TAXABLE 
YEARS.—Except as may be provided under sub-
paragraph (D)(i), this subsection shall not 
apply with respect to any qualified intellectual 
property contribution for any taxable year of 
the donor after the 12th taxable year of the 
donor which ends on or after the date of such 
contribution. 
‘‘(D) REGULATIONS.—The Secretary may 
issue regulations or other guidance to carry out 
the purposes of this subsection, including regu-
lations or guidance— 
‘‘(i) modifying the application of this 
subsection in the case of a donor or donee 
with a short taxable year, and 
‘‘(ii) providing for the determination 
of an amount to be treated as net income 
of the donee which is properly allocable to 
qualified intellectual property in the case 
of a donee who uses such property to fur-
ther a purpose or function constituting the 
basis of the donee’s exemption under sec-
tion 501 (or, in the case of a governmental 
unit, any purpose described in section 
170(c)) and does not possess a right to re-
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ceive any payment from a third party with 
respect to such property.’’. 
(c) REPORTING REQUIREMENTS.— 
(1) IN GENERAL.—Section 6050L (relating to 
returns relating to certain dispositions of donated 
property) is amended to read as follows: 
‘‘SEC. 6050L. RETURNS RELATING TO CERTAIN DONATED 
PROPERTY. 
‘‘(a) DISPOSITIONS OF DONATED PROPERTY.— 
‘‘(1) IN GENERAL.—If the donee of any chari-
table deduction property sells, exchanges, or other-
wise disposes of such property within 2 years after 
its receipt, the donee shall make a return (in accord-
ance with forms and regulations prescribed by the 
Secretary) showing— 
‘‘(A) the name, address, and TIN of the 
donor, 
‘‘(B) a description of the property, 
‘‘(C) the date of the contribution, 
‘‘(D) the amount received on the disposi-
tion, and 
‘‘(E) the date of such disposition. 
‘‘(2) DEFINITIONS.—For purposes of this sub-
section—
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‘‘(A) 
CHARITABLE
DEDUCTION
PROP-
ERTY.—The term ‘charitable deduction prop-
erty’ means any property (other than publicly 
traded securities) contributed in a contribution 
for which a deduction was claimed under sec-
tion 170 if the claimed value of such property 
(plus the claimed value of all similar items of 
property donated by the donor to 1 or more 
donees) exceeds $5,000. 
‘‘(B) PUBLICLY
TRADED
SECURITIES.— 
The term ‘publicly traded securities’ means se-
curities for which (as of the date of the con-
tribution) market quotations are readily avail-
able on an established securities market. 
‘‘(b) QUALIFIED INTELLECTUAL PROPERTY CON-
TRIBUTIONS.— 
‘‘(1) IN GENERAL.—Each donee with respect to 
a qualified intellectual property contribution shall 
make a return (at such time and in such form and 
manner as the Secretary may by regulations pre-
scribe) with respect to each specified taxable year of 
the donee showing— 
‘‘(A) the name, address, and TIN of the 
donor,
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time and in such manner as the Secretary may by regula-
tions prescribe.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions for subpart A of part II of subchapter A of 
chapter 61 is amended by striking the item relating 
to section 6050L and inserting the following new 
item: 
‘‘Sec. 6050L. Returns relating to certain donated property.’’. 
(d) COORDINATION
WITH
APPRAISAL
REQUIRE-
MENTS.—Subclause (I) of section 170(f)(11)(A)(ii), as 
added by section 683, is amended by inserting ‘‘subsection 
(e)(1)(B)(iii) or’’ before ‘‘section 1221(a)(1)’’. 
(e) ANTI-ABUSE RULES.—The Secretary of the 
Treasury may prescribe such regulations or other guid-
ance as may be necessary or appropriate to prevent the 
avoidance of the purposes of section 170(e)(1)(B)(iii) of 
the Internal Revenue Code of 1986 (as added by sub-
section (a)), including preventing— 
(1) the circumvention of the reduction of the 
charitable deduction by embedding or bundling the 
patent or similar property as part of a charitable 
contribution of property that includes the patent or 
similar property, 
(2) the manipulation of the basis of the prop-
erty to increase the amount of the charitable deduc-
tion through the use of related persons, pass-thru
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entities, or other intermediaries, or through the use 
of any provision of law or regulation (including the 
consolidated return regulations), and 
(3) a donor from changing the form of the pat-
ent or similar property to property of a form for 
which different deduction rules would apply. 
(f) EFFECTIVE DATE.—The amendments made by 
this section shall apply to contributions made after June 
3, 2004. 
SEC. 683. INCREASED REPORTING FOR NONCASH CHARI-
TABLE CONTRIBUTIONS. 
(a) IN GENERAL.—Subsection (f) of section 170 (re-
lating to disallowance of deduction in certain cases and 
special rules) is amended by adding after paragraph (10) 
the following new paragraph: 
‘‘(11) QUALIFIED APPRAISAL AND OTHER DOC-
UMENTATION FOR CERTAIN CONTRIBUTIONS.— 
‘‘(A) IN GENERAL.— 
‘‘(i) DENIAL OF DEDUCTION.—In the 
case of an individual, partnership, or cor-
poration, no deduction shall be allowed 
under subsection (a) for any contribution 
of property for which a deduction of more 
than $500 is claimed unless such person 
meets the requirements of subparagraphs
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(B), (C), and (D), as the case may be, 
with respect to such contribution. 
‘‘(ii) EXCEPTIONS.— 
‘‘(I) READILY
VALUED
PROP-
ERTY.—Subparagraphs (C) and (D) 
shall not apply to cash, property de-
scribed in section 1221(a)(1), and 
publicly traded securities (as defined 
in section 6050L(a)(2)(B)). 
‘‘(II) 
REASONABLE
CAUSE.— 
Clause (i) shall not apply if it is 
shown that the failure to meet such 
requirements is due to reasonable 
cause and not to willful neglect. 
‘‘(B) PROPERTY
DESCRIPTION
FOR
CON-
TRIBUTIONS OF MORE THAN $500.—In the case 
of contributions of property for which a deduc-
tion of more than $500 is claimed, the require-
ments of this subparagraph are met if the indi-
vidual, partnership or corporation includes with 
the return for the taxable year in which the 
contribution is made a description of such prop-
erty and such other information as the Sec-
retary may require. The requirements of this 
subparagraph shall not apply to a C corporation
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which is not a personal service corporation or a 
closely held C corporation. 
‘‘(C) QUALIFIED
APPRAISAL
FOR
CON-
TRIBUTIONS
OF
MORE
THAN
$5,000.—In the 
case of contributions of property for which a 
deduction of more than $5,000 is claimed, the 
requirements of this subparagraph are met if 
the individual, partnership, or corporation ob-
tains a qualified appraisal of such property and 
attaches to the return for the taxable year in 
which such contribution is made such informa-
tion regarding such property and such appraisal 
as the Secretary may require. 
‘‘(D) SUBSTANTIATION
FOR
CONTRIBU-
TIONS OF MORE THAN $500,000.—In the case of 
contributions of property for which a deduction 
of more than $500,000 is claimed, the require-
ments of this subparagraph are met if the indi-
vidual, partnership, or corporation attaches to 
the return for the taxable year a qualified ap-
praisal of such property. 
‘‘(E) QUALIFIED
APPRAISAL.—For pur-
poses of this paragraph, the term ‘qualified ap-
praisal’ means, with respect to any property, an 
appraisal of such property which is treated for
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purposes of this paragraph as a qualified ap-
praisal under regulations or other guidance pre-
scribed by the Secretary. 
‘‘(F) AGGREGATION OF SIMILAR ITEMS OF 
PROPERTY.—For 
purposes 
of 
determining 
thresholds under this paragraph, property and 
all similar items of property donated to 1 or 
more donees shall be treated as 1 property. 
‘‘(G) SPECIAL RULE FOR PASS-THRU ENTI-
TIES.—In the case of a partnership or S cor-
poration, this paragraph shall be applied at the 
entity level, except that the deduction shall be 
denied at the partner or shareholder level. 
‘‘(H) REGULATIONS.—The Secretary may 
prescribe such regulations as may be necessary 
or appropriate to carry out the purposes of this 
paragraph, including regulations that may pro-
vide that some or all of the requirements of this 
paragraph do not apply in appropriate cases.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to contributions made after June 
3, 2004.
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SEC. 684. DONATIONS OF MOTOR VEHICLES, BOATS, AND 
AIRCRAFT. 
(a) IN GENERAL.—Subsection (f) of section 170 (re-
lating to disallowance of deduction in certain cases and 
special rules) is amended by adding after paragraph (11) 
the following new paragraph: 
‘‘(12) CONTRIBUTIONS
OF
MOTOR
VEHICLES, 
BOATS, AND AIRCRAFT.— 
‘‘(A) IN GENERAL.—Except as provided in 
regulations or other guidance, in the case of a 
contribution of a specified vehicle to which 
paragraph (8) applies, no deduction shall be al-
lowed under subsection (a) for such contribu-
tion unless the taxpayer obtains a qualified ap-
praisal of the specified vehicle on or before the 
date of such contribution. 
‘‘(B) EXCEPTION FOR INVENTORY PROP-
ERTY.—Subparagraph (A) shall not apply to 
property 
which 
is 
described 
in 
section 
1221(a)(1). 
‘‘(C) SPECIFIED VEHICLE.—For purposes 
of this paragraph, the term ‘specified vehicle’ 
means any— 
‘‘(i) motor vehicle manufactured pri-
marily for use on public streets, roads, and 
highways,
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‘‘(ii) boat, or 
‘‘(iii) aircraft. 
‘‘(D) QUALIFIED
APPRAISAL.—For pur-
poses of this paragraph, the term ‘qualified ap-
praisal’ means any appraisal which is treated 
for purposes of this paragraph as a qualified 
appraisal under regulations or other guidance 
prescribed by the Secretary. 
‘‘(E) REGULATIONS
OR
OTHER
GUID-
ANCE.—The Secretary shall prescribe such reg-
ulations or other guidance as may be necessary 
to carry out the purposes of this paragraph.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to contributions made after 
June 3, 2004. 
SEC. 685. EXTENSION OF AMORTIZATION OF INTANGIBLES 
TO SPORTS FRANCHISES. 
(a) IN GENERAL.—Section 197(e) (relating to excep-
tions to definition of section 197 intangible) is amended 
by striking paragraph (6) and by redesignating para-
graphs (7) and (8) as paragraphs (6) and (7), respectively. 
(b) CONFORMING AMENDMENTS.— 
(1)(A) Section 1056 (relating to basis limitation 
for player contracts transferred in connection with 
the sale of a franchise) is repealed.
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(B) The table of sections for part IV of sub-
chapter O of chapter 1 is amended by striking the 
item relating to section 1056. 
(2) Section 1245(a) (relating to gain from dis-
position of certain depreciable property) is amended 
by striking paragraph (4). 
(3) Section 1253 (relating to transfers of fran-
chises, trademarks, and trade names) is amended by 
striking subsection (e). 
(c) EFFECTIVE DATES.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section 
shall apply to property acquired after the date of the 
enactment of this Act. 
(2) SECTION 1245.—The amendment made by 
subsection (b)(2) shall apply to franchises acquired 
after the date of the enactment of this Act. 
SEC. 686. MODIFICATION OF CONTINUING LEVY ON PAY-
MENTS TO FEDERAL VENDERS. 
(a) IN GENERAL.—Section 6331(h) (relating to con-
tinuing levy on certain payments) is amended by adding 
at the end the following new paragraph: 
‘‘(3) INCREASE
IN
LEVY
FOR
CERTAIN
PAY-
MENTS.—Paragraph (1) shall be applied by sub-
stituting ‘100 percent’ for ‘15 percent’ in the case
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of any specified payment due to a vendor of goods 
or services sold or leased to the Federal Govern-
ment.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall take effect on the date of the enactment 
of this Act. 
SEC. 687. MODIFICATION OF STRADDLE RULES. 
(a) RULES RELATING TO IDENTIFIED STRADDLES.— 
(1) IN GENERAL.—Subparagraph (A) of section 
1092(a)(2) (relating to special rule for identified 
straddles) is amended to read as follows: 
‘‘(A) IN
GENERAL.—In the case of any 
straddle which is an identified straddle— 
‘‘(i) paragraph (1) shall not apply 
with respect to identified positions com-
prising the identified straddle, 
‘‘(ii) if there is any loss with respect 
to any identified position of the identified 
straddle, the basis of each of the identified 
offsetting positions in the identified strad-
dle shall be increased by an amount which 
bears the same ratio to the loss as the un-
recognized gain with respect to such offset-
ting position bears to the aggregate unrec-
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ognized gain with respect to all such off-
setting positions, and 
‘‘(iii) any loss described in clause (ii) 
shall not otherwise be taken into account 
for purposes of this title.’’. 
(2) 
IDENTIFIED
STRADDLE.—Section 
1092(a)(2)(B) 
(defining 
identified 
straddle) 
is 
amended— 
(A) by striking clause (ii) and inserting the 
following: 
‘‘(ii) to the extent provided by regula-
tions, the value of each position of which 
(in the hands of the taxpayer immediately 
before the creation of the straddle) is not 
less than the basis of such position in the 
hands of the taxpayer at the time the 
straddle is created, and’’, and 
(B) by adding at the end the following new 
flush sentence: 
‘‘The Secretary shall prescribe regulations 
which specify the proper methods for clearly 
identifying a straddle as an identified straddle 
(and the positions comprising such straddle), 
which specify the rules for the application of 
this section for a taxpayer which fails to prop-
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erly identify the positions of an identified strad-
dle, and which specify the ordering rules in 
cases where a taxpayer disposes of less than an 
entire position which is part of an identified 
straddle.’’. 
(3) UNRECOGNIZED GAIN.—Section 1092(a)(3) 
(defining unrecognized gain) is amended by redesig-
nating subparagraph (B) as subparagraph (C) and 
by inserting after subparagraph (A) the following 
new subparagraph: 
‘‘(B) SPECIAL
RULE
FOR
IDENTIFIED 
STRADDLES.—For 
purposes 
of 
paragraph 
(2)(A)(ii), the unrecognized gain with respect to 
any identified offsetting position shall be the ex-
cess of the fair market value of the position at 
the time of the determination over the fair mar-
ket value of the position at the time the tax-
payer identified the position as a position in an 
identified straddle.’’. 
(4) 
CONFORMING
AMENDMENT.—Section 
1092(c)(2) is amended by striking subparagraph (B) 
and by redesignating subparagraph (C) as subpara-
graph (B). 
(b) PHYSICALLY
SETTLED
POSITIONS.—Section 
1092(d) (relating to definitions and special rules) is
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amended by adding at the end the following new para-
graph: 
‘‘(8) SPECIAL
RULES
FOR
PHYSICALLY
SET-
TLED POSITIONS.—For purposes of subsection (a), if 
a taxpayer settles a position which is part of a strad-
dle by delivering property to which the position re-
lates (and such position, if terminated, would result 
in a realization of a loss), then such taxpayer shall 
be treated as if such taxpayer— 
‘‘(A) terminated the position for its fair 
market value immediately before the settlement, 
and 
‘‘(B) sold the property so delivered by the 
taxpayer at its fair market value.’’. 
(c) REPEAL OF STOCK EXCEPTION.— 
(1) IN
GENERAL.—Paragraph (3) of section 
1092(d) (relating to definitions and special rules) is 
amended to read as follows: 
‘‘(3) SPECIAL
RULES
FOR
STOCK.—For pur-
poses of paragraph (1)— 
‘‘(A) IN
GENERAL.—The term ‘personal 
property’ includes— 
‘‘(i) any stock which is a part of a 
straddle at least 1 of the offsetting posi-
tions of which is a position with respect to
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such stock or substantially similar or re-
lated property, or 
‘‘(ii) any stock of a corporation 
formed or availed of to take positions in 
personal property which offset positions 
taken by any shareholder. 
‘‘(B) RULE FOR APPLICATION.—For pur-
poses of determining whether subsection (e) ap-
plies to any transaction with respect to stock 
described in subparagraph (A)(ii), all includible 
corporations of an affiliated group (within the 
meaning of section 1504(a)) shall be treated as 
1 taxpayer.’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
1258(d)(1) is amended by striking ‘‘; except that the 
term ‘personal property’ shall include stock’’. 
(d) HOLDING PERIOD FOR DIVIDEND EXCLUSION.— 
The last sentence of section 246(c) is amended by insert-
ing: ‘‘, other than a qualified covered call option to which 
section 1092(f) applies’’ before the period at the end. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to positions established on or after 
the date of the enactment of this Act.
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SEC. 688. ADDITION OF VACCINES AGAINST HEPATITIS A 
TO LIST OF TAXABLE VACCINES. 
(a) IN GENERAL.—Paragraph (1) of section 4132(a) 
(defining taxable vaccine) is amended by redesignating 
subparagraphs (I), (J), (K), and (L) as subparagraphs 
(J), (K), (L), and (M), respectively, and by inserting after 
subparagraph (H) the following new subparagraph: 
‘‘(I) Any vaccine against hepatitis A.’’ 
(b) EFFECTIVE DATE.— 
(1) SALES, ETC.—The amendments made by 
subsection (a) shall apply to sales and uses on or 
after the first day of the first month which begins 
more than 4 weeks after the date of the enactment 
of this Act. 
(2) DELIVERIES.—For purposes of paragraph 
(1) and section 4131 of the Internal Revenue Code 
of 1986, in the case of sales on or before the effec-
tive date described in such paragraph for which de-
livery is made after such date, the delivery date shall 
be considered the sale date. 
SEC. 689. ADDITION OF VACCINES AGAINST INFLUENZA TO 
LIST OF TAXABLE VACCINES. 
(a) IN GENERAL.—Section 4132(a)(1) (defining tax-
able vaccine), as amended by this Act, is amended by add-
ing at the end the following new subparagraph:
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‘‘(N) Any trivalent vaccine against influ-
enza.’’. 
(b) EFFECTIVE DATE.— 
(1) SALES, ETC.—The amendment made by this 
section shall apply to sales and uses on or after the 
later of— 
(A) the first day of the first month which 
begins more than 4 weeks after the date of the 
enactment of this Act, or 
(B) the date on which the Secretary of 
Health and Human Services lists any vaccine 
against influenza for purposes of compensation 
for any vaccine-related injury or death through 
the Vaccine Injury Compensation Trust Fund. 
(2) DELIVERIES.—For purposes of paragraph 
(1) and section 4131 of the Internal Revenue Code 
of 1986, in the case of sales on or before the effec-
tive date described in such paragraph for which de-
livery is made after such date, the delivery date shall 
be considered the sale date. 
SEC. 690. EXTENSION OF IRS USER FEES. 
(a) IN GENERAL.—Section 7528(c) (relating to ter-
mination) is amended by striking ‘‘December 31, 2004’’ 
and inserting ‘‘September 30, 2014’’.
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(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to requests after the date of the 
enactment of this Act. 
SEC. 691. COBRA FEES. 
(a) USE OF MERCHANDISE PROCESSING FEE.—Sec-
tion 13031(f) of the Consolidated Omnibus Budget Rec-
onciliation Act of 1985 (19 U.S.C. 58c(f)) is amended— 
(1) in paragraph (1), by aligning subparagraph 
(B) with subparagraph (A); and 
(2) in paragraph (2), by striking ‘‘commercial 
operations’’ and all that follows through ‘‘proc-
essing.’’ and inserting ‘‘customs revenue functions as 
defined in section 415 of the Homeland Security Act 
of 2002 (other than functions performed by the Of-
fice of International Affairs referred to in section 
415(8) of that Act), and for automation (including 
the Automation Commercial Environment computer 
system), and for no other purpose. To the extent 
that funds in the Customs User Fee Account are in-
sufficient to pay the costs of such customs revenue 
functions, customs duties in an amount equal to the 
amount of such insufficiency shall be available, to 
the extent provided for in appropriations Acts, to 
pay the costs of such customs revenue functions in 
the amount of such insufficiency, and shall be avail-
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able for no other purpose. The provisions of the first 
and second sentences of this paragraph specifying 
the purposes for which amounts in the Customs 
User Fee Account may be made available shall not 
be superseded except by a provision of law which 
specifically modifies or supersedes such provisions.’’. 
(b) REIMBURSEMENT
OF APPROPRIATIONS FROM 
COBRA FEES.—Section 13031(f)(3) of the Consolidated 
Omnibus Budget Reconciliation Act of 1985 (19 U.S.C. 
58c(f)(3)) is amended by adding at the end the following: 
‘‘(E) Nothing in this paragraph shall be construed 
to preclude the use of appropriated funds, from sources 
other than the fees collected under subsection (a), to pay 
the costs set forth in clauses (i), (ii), and (iii) of subpara-
graph (A).’’. 
(c) SENSE OF CONGRESS; EFFECTIVE PERIOD FOR 
COLLECTING FEES; STANDARD FOR SETTING FEES.— 
(1) SENSE OF CONGRESS.—The Congress finds 
that— 
(A) the fees set forth in paragraphs (1) 
through (8) of subsection (a) of section 13031 
of the Consolidated Omnibus Budget Reconcili-
ation Act of 1985 have been reasonably related 
to the costs of providing customs services in 
connection with the activities or items for which
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the fees have been charged under such para-
graphs; and 
(B) the fees collected under such para-
graphs have not exceeded, in the aggregate, the 
amounts paid for the costs described in sub-
section (f)(3)(A) incurred in providing customs 
services in connection with the activities or 
items for which the fees were charged under 
such paragraphs. 
(2) EFFECTIVE PERIOD; STANDARD FOR SET-
TING
FEES.—Section 13031(j)(3) of the Consoli-
dated Omnibus Budget Reconciliation Act of 1985 is 
amended to read as follows: 
‘‘(3)(A) Fees may not be charged under paragraphs 
(9) and (10) of subsection (a) after September 30, 2014. 
‘‘(B)(i) Subject to clause (ii), Fees may not be 
charged under paragraphs (1) through (8) of subsection 
(a) after September 30, 2014. 
‘‘(ii) In fiscal year 2006 and in each succeeding fiscal 
year for which fees under paragraphs (1) through (8) of 
subsection (a) are authorized— 
‘‘(I) the Secretary of the Treasury shall charge 
fees under each such paragraph in amounts that are 
reasonably related to the costs of providing customs 
services in connection with the activity or item for
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which the fee is charged under such paragraph, ex-
cept that in no case may the fee charged under any 
such paragraph exceed by more than 10 percent the 
amount otherwise prescribed by such paragraph; 
‘‘(II) the amount of fees collected under such 
paragraphs may not exceed, in the aggregate, the 
amounts paid in that fiscal year for the costs de-
scribed in subsection (f)(3)(A) incurred in providing 
customs services in connection with the activity or 
item for which the fees are charged under such 
paragraphs; 
‘‘(III) a fee may not be collected under any 
such paragraph except to the extent such fee will be 
expended to pay the costs described in subsection 
(f)(3)(A) incurred in providing customs services in 
connection with the activity or item for which the fee 
is charged under such paragraph; and 
‘‘(IV) any fee collected under any such para-
graph shall be available for expenditure only to pay 
the costs described in subsection (f)(3)(A) incurred 
in providing customs services in connection with the 
activity or item for which the fee is charged under 
such paragraph.’’.
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(d) CLERICAL AMENDMENTS.—Section 13031 of the 
Consolidated Omnibus Budget Reconciliation Act of 1985 
is amended— 
(1) in subsection (a)(5)(B), by striking ‘‘$1.75’’ 
and inserting ‘‘$1.75.’’; 
(2) in subsection (b)— 
(A) in paragraph (1)(A), by aligning clause 
(iii) with clause (ii); 
(B) in paragraph (7), by striking ‘‘para-
graphs’’ and inserting ‘‘paragraph’’; and 
(C) in paragraph (9), by aligning subpara-
graph (B) with subparagraph (A); and 
(3) in subsection (e)(2), by aligning subpara-
graph (B) with subparagraph (A). 
(e) STUDY OF ALL FEES COLLECTED BY DEPART-
MENT OF HOMELAND SECURITY.—The Secretary of the 
Treasury shall conduct a study of all the fees collected 
by the Department of Homeland Security, and shall sub-
mit to the Congress, not later than September 30, 2005, 
a report containing the recommendations of the Secretary 
on— 
(1) what fees should be eliminated; 
(2) what the rate of fees retained should be; 
and
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(3) any other recommendations with respect to 
the fees that the Secretary considers appropriate. 
TITLE VII—MARKET REFORM 
FOR TOBACCO GROWERS 
SEC. 701. SHORT TITLE. 
This title may be cited as the ‘‘Fair and Equitable 
Tobacco Reform Act of 2004’’. 
SEC. 702. EFFECTIVE DATE. 
This title and the amendments made by this title 
shall apply beginning with the 2005 marketing year of 
each kind of tobacco. 
Subtitle A—Termination of Federal 
Tobacco Quota and Price Sup-
port Programs 
SEC. 711. TERMINATION OF TOBACCO QUOTA PROGRAM 
AND RELATED PROVISIONS. 
(a) 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. 
(b) PROCESSING.—Section 9(b) of the Agricultural 
Adjustment Act (7 U.S.C. 609(b)), reenacted with amend-
ments by the Agricultural Marketing Agreement Act of 
1937, is amended— 
(1) in paragraph (2), by striking ‘‘tobacco,’’; 
and
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(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
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(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’’.
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(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.
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(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. 712. 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)—
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(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. 713. CONTINUATION OF LIABILITY AND NO NET LOSS 
ASSESSMENTS 
TO 
PREVENT 
LOSSES 
ON 
PRICE SUPPORT LOANS. 
(a) LIABILITY.—The amendments made by this sub-
title shall not affect the liability of any person under any 
provision of law so amended with respect to any crop of 
tobacco planted before the effective date applicable to that 
kind of tobacco under section 702. 
(b) ASSESSMENT AUTHORITY.—
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(1) ASSESSMENTS
TO
COVER
OUTSTANDING 
LOAN COSTS.—The Commodity Credit Corporation 
shall impose and collect an assessment on the sale 
of 2005 and subsequent crops of each kind of to-
bacco and on the importation of tobacco in such 
amounts as may be necessary to obtain funds suffi-
cient to cover any losses incurred by the Corporation 
with respect to price support loans that— 
(A) were made for that kind of tobacco 
under section 106 of the Agricultural Act of 
1949 (7 U.S.C. 1445), before the repeal of such 
section by section 712 of this Act; and 
(B) remain outstanding on or after the 
date of the enactment of this Act. 
(2) 
ADMINISTRATION.—Assessments 
under 
paragraph (1) shall be administered in the manner 
provided for in section 106B of the Agricultural Act 
of 1949 (7 U.S.C. 1445–2), as in effect the day be-
fore the date of the enactment of this Act. To cover 
the costs of administering such assessments, the 
Commodity Credit Corporation shall use funds re-
maining in the No Net Cost Tobacco Funds and No 
Net Cost Tobacco Accounts established pursuant to 
sections 106A and 106B of the Agricultural Act of 
1949 (7 U.S.C. 1445–1, 1445–2).
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Subtitle B—Transitional Payments 
to Tobacco Quota Holders and 
Active Producers of Tobacco 
SEC. 721. DEFINITIONS OF ACTIVE TOBACCO PRODUCER 
AND QUOTA HOLDER. 
In this subtitle: 
(1) ACTIVE
TOBACCO
PRODUCER.—The term 
‘‘active tobacco producer’’ means an owner, oper-
ator, landlord, tenant, or sharecropper who— 
(A) shared in the risk of producing tobacco 
on a farm where tobacco was produced or con-
sidered planted pursuant to a tobacco farm 
marketing quota or farm acreage allotment es-
tablished under part I of subtitle B of title III 
of the Agricultural Adjustment Act of 1938 (7 
U.S.C. 1311 et seq.) for the 2004 marketing 
year; and 
(B) was actively engaged on that farm. 
(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 a person that was an 
owner of a farm, as of July 1, 2004, for which a
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basic tobacco farm marketing quota or farm acreage 
allotment for quota tobacco was established for the 
2004 tobacco marketing year. 
(4) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Agriculture. 
SEC. 722. 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 subtitle A, which shall constitute full and 
fair compensation for any losses relating to such termi-
nation. 
(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).
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(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-