I 
108TH CONGRESS 
1ST SESSION H. R. 3160
To eliminate the Federal quota and price support programs for tobacco, 
to provide transitional assistance to tobacco quota holders and traditional 
producers of tobacco affected by the elimination of these programs, 
to ensure the future quality and availability of United States-grown 
tobacco, to protect against the disruption of tobacco markets, to establish 
a trust fund to finance this Act, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 24, 2003
Mr. FLETCHER (for himself, Mr. MCINTYRE, Mr. GOODE, Mr. ETHERIDGE, 
Mr. BALLANCE, Mr. BALLENGER, Mr. BARRETT of South Carolina, Mr. 
BISHOP of Georgia, Mrs. BLACKBURN, Mr. BOUCHER, Mr. BOYD, Mr. 
BROWN of South Carolina, Mr. CLYBURN, Mr. COLLINS, Mr. COOPER, 
Mr. DAVIS of Tennessee, Mr. TOM DAVIS of Virginia, Mr. DEMINT, Mr. 
GORDON, Mr. HAYES, Mr. HILL, Mr. KINGSTON, Mr. LEWIS of Ken-
tucky, Mr. LUCAS of Kentucky, Mr. MARSHALL, Mr. MILLER of North 
Carolina, Mr. NORWOOD, Mr. PETERSON of Minnesota, Mr. PRICE of 
North Carolina, Mr. ROGERS of Kentucky, Mr. SCOTT of Georgia, Mr. 
SPRATT, Mr. THOMPSON of Mississippi, Mr. WAMP, Mr. WHITFIELD, Mr. 
WILSON of South Carolina, Mr. DUNCAN, Mr. MURTHA, and Mr. 
ISAKSON) introduced the following bill; which was referred to the Com-
mittee on Agriculture 
A BILL 
To eliminate the Federal quota and price support programs 
for tobacco, to provide transitional assistance to tobacco 
quota holders and traditional producers of tobacco af-
fected by the elimination of these programs, to ensure 
the future quality and availability of United States-grown 
tobacco, to protect against the disruption of tobacco mar-
kets, to establish a trust fund to finance this Act, 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 Reduction, Accountability, and Community En-
hancement Act of 2003’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows:
Sec. 1. Short title; table of contents. 
Sec. 2. Termination of tobacco production adjustment programs. 
Sec. 3. Termination of tobacco price support program. 
Sec. 4. Liability. 
Sec. 5. Replacement tobacco assistance programs. 
Sec. 6. Regulations. 
Sec. 7. Severability. 
Sec. 8. Effective date.
SEC. 2. TERMINATION OF TOBACCO PRODUCTION ADJUST-
MENT PROGRAMS. 
(a) TOBACCO STANDARDS.—The Tobacco Inspection 
Act (7 U.S.C. 511 et seq.) is repealed. 
(b) TOBACCO FIELD MEASUREMENT.—Section 1112 
of the Omnibus Budget Reconciliation Act of 1987 (Public 
Law 100–203) is amended by striking subsection (c). 
(c) TOBACCO INSPECTIONS.—Section 213 of the To-
bacco Adjustment Act of 1983 (7 U.S.C. 511r) is repealed.
(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).
(j) 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,’’. 
(k) 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.
(l) ADMINISTRATIVE PROVISIONS.—Section 361 of 
the Agricultural Adjustment Act of 1938 (7 U.S.C. 1361) 
is amended by striking ‘‘tobacco,’’. 
(m) 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’’. 
(n) REPORTS AND RECORDS.—Section 373 of the Ag-
ricultural Adjustment Act of 1938 (7 U.S.C. 1373) is 
amended—
(1) by striking ‘‘rice, or tobacco’’ each place it 
appears in subsections (a) and (b) and inserting ‘‘or 
rice’’; 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.’’. 
(o) 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). 
(p) 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). 
(q) 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). 
(r) ACREAGE-POUNDAGE QUOTAS.—Section 4 of the 
Act of April 16, 1955 (Public Law 89–12; 7 U.S.C. 1314c 
note), is repealed. 
(s) BURLEY TOBACCO ACREAGE ALLOTMENTS.—The 
Act of July 12, 1952 (7 U.S.C. 1315), is repealed. 
(t) TRANSFER OF ALLOTMENTS.—Section 703 of the 
Food and Agriculture Act of 1965 (7 U.S.C. 1316) is re-
pealed. 
(u) 
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’’. 
SEC. 3. TERMINATION OF TOBACCO PRICE SUPPORT PRO-
GRAM. 
(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 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. 
(b) 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. 
(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. 
SEC. 4. LIABILITY. 
The amendments made by sections 2 and 3 shall not 
affect the liability of any person under any provision of
law so amended with respect to any crop of tobacco plant-
ed before the effective date of this Act. 
SEC. 5. REPLACEMENT TOBACCO ASSISTANCE PROGRAMS. 
(a) IN GENERAL.—Title III of the Agricultural Ad-
justment Act of 1938 is amended by inserting after sub-
title D (7 U.S.C. 1379a et seq.) the following: 
‘‘Subtitle E—Tobacco Assistance 
‘‘SEC. 380A. DEFINITIONS. 
‘‘In this subtitle: 
‘‘(1) ACTIVE TOBACCO PRODUCER.—The term 
‘active tobacco producer’, with respect to a kind of 
tobacco, means a person that—
‘‘(A) is actively engaged in the production 
of tobacco marketed or considered planted; and 
‘‘(B) shares in the risk of producing the 
tobacco. 
‘‘(2) APPLICABLE FISCAL YEAR.—The term ‘ap-
plicable fiscal year’ means each of fiscal years 2004 
through 2011. 
‘‘(3) BASE
PERIOD.—The term ‘base period’ 
means the six-month period from January 1, 2004, 
through June 30, 2004, and each three-month pe-
riod thereafter through the three-month period end-
ing on June 30, 2011.
‘‘(4) CONSIDERED PLANTED.—The term ‘con-
sidered planted’ means tobacco planted but failed to 
be produced as a result of a natural disaster, as de-
termined by the Secretary.
‘‘(5) DEPARTMENT.—The term ‘Department’ 
means the Department of Agriculture. 
‘‘(6) ELIGIBLE
STATE.—The term ‘eligible 
State’ means each of the States of Alabama, Arkan-
sas, Florida, Georgia, Indiana, Kansas, Kentucky, 
Minnesota, Missouri, North Carolina, Ohio, Okla-
homa, South Carolina, Tennessee, Virginia, West 
Virginia, and Wisconsin. 
‘‘(7) MARKET
SHARE.—The term ‘market 
share’ means the share of each manufacturer or im-
porter of a class of tobacco product (expressed as a 
decimal to the fourth place) of the total volume of 
domestic sales of the class of tobacco product during 
the base period for the applicable fiscal year for an 
assessment under section 380T. 
‘‘(8) QUOTA
TOBACCO.—The term ‘quota to-
bacco’ means a kind of tobacco that is subject to a 
farm marketing quota or farm acreage allotment for 
the 2002 tobacco marketing year under a marketing 
quota or allotment program established under part 
I of subtitle B of this title (as in effect on the day
before the date of the enactment of the Tobacco Re-
duction, Accountability, and Community Enhance-
ment Act of 2003). 
‘‘(9) TOBACCO.—The term ‘tobacco’ means 
each of the following kinds of tobacco: 
‘‘(A) Flue-cured tobacco, comprising types 
11, 12, 13, and 14. 
‘‘(B) Fire-cured tobacco, comprising types 
22 and 23. 
‘‘(C) Dark air-cured tobacco, comprising 
types 35 and 36. 
‘‘(D) Virginia sun-cured tobacco, com-
prising type 37. 
‘‘(E) Virginia fire-cured tobacco, com-
prising type 21. 
‘‘(F) Burley tobacco, comprising type 31. 
‘‘(G) Cigar-filler and cigar-binder tobacco, 
comprising types 42, 43, 44, 53, 54, and 55. 
‘‘(10) TOBACCO ADVISORY BOARD.—The terms 
‘Tobacco Advisory Board’ and ‘Board’ mean a To-
bacco Advisory Board established under section 
380G for a kind of tobacco. 
‘‘(11) TOBACCO
QUOTA
HOLDER.—The term 
‘tobacco quota holder’ means a person that is con-
sidered a tobacco quota holder under section 
380B(b). 
‘‘(12) TOBACCO TRUST FUND.—The terms ‘To-
bacco Trust Fund’ and ‘Fund’ mean the Tobacco 
Trust Fund established under section 380S. 
‘‘(13) TRADITIONAL PRODUCER OF TOBACCO.—
The term ‘traditional producer of tobacco’ means a 
person that, for at least 1 of the 2000, 2001, or 
2002 tobacco marketing years—
‘‘(A) was actively engaged in the produc-
tion of tobacco marketed, or considered planted, 
under a marketing quota established under part 
I of subtitle B of this title (as in effect on the 
day before the date of the enactment of the To-
bacco Reduction, Accountability, and Commu-
nity Enhancement Act of 2003); and 
‘‘(B) shared in the risk of producing the 
tobacco. 
‘‘(14) TRADITIONAL
TOBACCO
COUNTY.—The 
term ‘traditional tobacco county’ means a county in 
the United States that had 1 or more farms oper-
ated by traditional producers of tobacco under a 
marketing quota for at least 1 of the 2000, 2001, 
or 2002 tobacco marketing years. To determine the 
crop poundage base of an active tobacco producer
for a kind of tobacco produced in the State of Geor-
gia under section 380I, the term includes a county 
that is contiguous to a county described in the pre-
ceding sentence. 
‘‘CHAPTER 1—PAYMENTS TO TOBACCO 
QUOTA HOLDERS AND TRADITIONAL 
PRODUCERS 
‘‘SEC. 380B. EQUITY RELIEF PAYMENTS TO TOBACCO 
QUOTA HOLDERS. 
‘‘(a) IN GENERAL.—The Secretary shall make transi-
tion payments under this section to each tobacco quota 
holder. 
‘‘(b) TOBACCO QUOTA HOLDER.—
‘‘(1) IN GENERAL.—Except as otherwise pro-
vided in this subsection, the Secretary shall consider 
a person to be a tobacco quota holder under this sec-
tion if the person was an owner of a farm, as of July 
1, 2002, for which a basic tobacco farm marketing 
quota or farm acreage allotment for quota tobacco 
was established with respect to the 2002 tobacco 
marketing year under a marketing quota program 
established under part I of subtitle B of this title (as 
in effect on the day before the date of the enactment 
of the Tobacco Reduction, Accountability, and Com-
munity Enhancement Act of 2003).
‘‘(2) EFFECT
OF
PURCHASE
CONTRACT.—If 
there was an agreement for the purchase of all or 
part of a farm described in paragraph (1) as of July 
1, 2002, and the parties to the sale are unable to 
agree to the disposition of eligibility for payments 
under this section, the Secretary, taking into ac-
count any transfer of quota that has been agreed to, 
shall provide for the equitable division of the pay-
ments among the parties by adjusting the deter-
mination of who is the tobacco quota holder with re-
spect to particular pounds of the quota. 
‘‘(3) EFFECT OF AGREEMENT FOR PERMANENT 
QUOTA
TRANSFER.—If the Secretary determines 
that there was in existence, as of July 1, 2002, an 
agreement for the permanent transfer of quota, but 
that the transfer 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. 
‘‘(4) PROTECTED BASES.—A person that owns 
a farm with a tobacco poundage quota that is pro-
tected under a conservation reserve program con-
tract entered into under section 1231 of the Food 
Security Act of 1985 (16 U.S.C. 3831) shall be con-
sidered to be a tobacco quota holder with respect to 
the protected poundage.
‘‘(5) 
SECRETARIAL
DISCRETION.—Notwith-
standing paragraphs (1) through (4), the Secretary 
may declare a person to be the tobacco quota holder 
with respect to certain pounds of quota or otherwise 
for purposes of this section if the Secretary—
‘‘(A) considers the declaration is needed to 
ensure a fair and equitable administration of 
the payments provided for in this section, in-
cluding such actions as are necessary to prevent 
payments based on speculation; and 
‘‘(B) does not, in exercising the authority 
provided under this paragraph, effectively in-
crease the total quota in excess of the quota 
that was available to all producers for the 2002 
marketing year for other than seed or experi-
mental use. 
‘‘(6) LIMITATION
ON
QUANTITY
OF
QUOTA 
HELD.—
‘‘(A) IN GENERAL.—A person shall be con-
sidered a tobacco quota holder for purposes of 
this section only with respect to the quantity of 
basic quota that qualifies the person as a to-
bacco quota holder.
‘‘(B) INCLUDED QUOTA.—The determina-
tion of the tobacco poundage amount for which 
the person qualifies shall—
‘‘(i) be made based on the 2002 crop 
quota levels; and 
‘‘(ii) take into account sales of the 
farm that occurred before July 1, 2002, 
and any permanent transfers of quota that 
took place before that date.
‘‘(c) APPLICATION.—To be eligible to receive pay-
ments under this section, a person shall prepare and sub-
mit to the Secretary an application at such time, in such 
manner, and containing such information as the Secretary 
may require, including information sufficient to dem-
onstrate that the person satisfies the definition of tobacco 
quota holder. 
‘‘(d) TOTAL AMOUNT AVAILABLE FOR PAYMENTS.—
‘‘(1) IN GENERAL.—The Secretary shall deter-
mine the total amount to be paid to all tobacco 
quota holders under this section with respect to each 
kind of tobacco. 
‘‘(2) POUNDAGE
QUOTA
TOBACCO.—For each 
kind of tobacco for which the marketing quota is ex-
pressed in pounds, the total amount available for 
payments to tobacco quota holders under this section
shall be equal to the product obtained by multi-
plying—
‘‘(A) $8 per pound; by 
‘‘(B) the annual average of tobacco farm 
basic quotas established under this Act for the 
1997 through 2002 marketing years for that 
kind of tobacco. 
‘‘(3) MARKETING QUOTAS OTHER THAN POUND-
AGE QUOTAS.—For each kind of tobacco for which 
there is a marketing quota or allotment on an acre-
age basis, the Secretary shall convert the tobacco 
farm marketing quotas or allotments established 
under this Act for the 1997 through 2002 marketing 
year for that kind of tobacco to a poundage basis be-
fore executing the mathematical equation specified 
in paragraph (2). 
‘‘(e) BASE QUOTA LEVEL.—
‘‘(1) IN GENERAL.—The Secretary shall deter-
mine the base quota level of each tobacco quota 
holder with respect to each kind of tobacco. 
‘‘(2) POUNDAGE
QUOTA
TOBACCO.—For each 
kind of tobacco for which the marketing quota is ex-
pressed in pounds, the base quota level for a tobacco 
quota holder shall be equal to the tobacco farm mar-
keting quota established under this Act for the 2002
marketing year for quota tobacco on the farm owned 
by the tobacco quota holder. 
‘‘(3) MARKETING QUOTAS OTHER THAN POUND-
AGE QUOTAS.—For each kind of tobacco for which 
there is a marketing quota or allotment on an acre-
age basis, the base quota level for a tobacco quota 
holder shall be equal to the product obtained (based 
on a poundage conversion) by multiplying—
‘‘(A) the tobacco farm marketing quota or 
allotment established under this Act for the 
2002 marketing year for the tobacco quota 
holder’s farm; by 
‘‘(B) the average yield per acre for the to-
bacco quota holder’s farm for the kind of to-
bacco for that marketing year. 
‘‘(f) PAYMENT AMOUNT.—The Secretary shall make 
payments to a tobacco quota holder with respect to a kind 
of tobacco under this section in a total amount that bears 
the same ratio to the amount determined by the Secretary 
under subsection (d) with respect to that kind of tobacco 
as the base quota level of the tobacco quota holder with 
respect to that kind of tobacco bears to the base quota 
level of all tobacco quota holders with respect to that kind 
of tobacco.
‘‘(g) TIME FOR PAYMENT.—The amount determined 
under subsection (f) for a tobacco quota holder shall be 
paid in seven equal installments on November 1 of each 
of the calendar years 2004 through 2010, except that 50 
percent of the payment required to be made on November 
1, 2004, shall be paid on September 30, 2004. 
‘‘(h) 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. 380C. DIRECT PAYMENTS TO TRADITIONAL PRO-
DUCERS OF TOBACCO. 
‘‘(a) IN GENERAL.—The Secretary shall make direct 
payments under this section to traditional producers of to-
bacco. 
‘‘(b) APPLICATION.—To be eligible to receive pay-
ments under this section, a person shall prepare and sub-
mit to the Secretary an application at such time, in such 
manner, and containing such information as the Secretary 
may require, including information sufficient to dem-
onstrate that the person satisfies the definition of tradi-
tional producer of tobacco. 
‘‘(c) TOTAL AMOUNT AVAILABLE FOR PAYMENTS.—
‘‘(1) IN GENERAL.—The Secretary shall deter-
mine the total amount to be paid to traditional pro-
ducers of tobacco under this section with respect to 
each kind of tobacco. 
‘‘(2) POUNDAGE
QUOTA
TOBACCO.—For each 
kind of tobacco for which the marketing quota is ex-
pressed in pounds, the total amount available for 
payments to traditional producers of tobacco under 
this section shall be equal to the product obtained by 
multiplying—
‘‘(A) $4 per pound; by 
‘‘(B) the annual average of tobacco farm 
effective quotas established under this Act for 
the 1997 through 2002 marketing years for 
that kind of tobacco. 
‘‘(3) MARKETING QUOTAS OTHER THAN POUND-
AGE QUOTAS.—For each kind of tobacco for which 
there is a marketing quota or allotment on an acre-
age basis, the Secretary shall convert the tobacco 
farm marketing quotas or allotments established 
under this Act for the 1997 through 2002 marketing 
years for that kind of tobacco to a poundage basis 
before executing the mathematical equation specified 
in paragraph (2). 
‘‘(d) PAYMENT QUANTITY.—
‘‘(1) IN GENERAL.—The Secretary shall deter-
mine the payment quantity of tobacco for each tradi-
tional producer of tobacco with respect to each kind 
of tobacco. 
‘‘(2) POUNDAGE
QUOTA
TOBACCO.—For each 
kind of tobacco for which the marketing quota is ex-
pressed in pounds, the payment quantity for a tradi-
tional producer of tobacco shall be equal to the aver-
age of the July 1 effective quota for that quota to-
bacco produced by the producer under this Act for 
the 2000, 2001 and 2002 marketing years. 
‘‘(3) MARKETING QUOTAS OTHER THAN POUND-
AGE QUOTAS.—For each kind of tobacco for which 
there is a marketing quota or allotment on an acre-
age basis, the payment quantity for a traditional 
producer of tobacco shall be equal to the average of 
the actual pounds of that kind of tobacco produced 
by the traditional producer of tobacco for the 2000, 
2001 and 2002 marketing years. 
‘‘(e) PAYMENT AMOUNT.—The Secretary shall make 
payments to each traditional producer of tobacco with re-
spect to a kind of tobacco under this section in a total 
amount that bears the same ratio to the amount deter-
mined by the Secretary under subsection (c) with respect 
to that kind of tobacco as the payment quantity of the
producer with respect to that kind of tobacco bears to the 
payment quantities of all traditional producers of tobacco 
with respect to that kind of tobacco. 
‘‘(f) TIME FOR PAYMENT.—The amount determined 
under subsection (e) for a traditional producer of tobacco 
shall be paid in seven equal installments on November 1 
of each of the calendar years 2004 through 2010, except 
that 50 percent of the payment required to be made on 
November 1, 2004, shall be paid on September 30, 2004. 
‘‘(g) DEATH OF ACTIVE TOBACCO PRODUCER.—If a 
traditional producer of tobacco who is entitled to transi-
tion 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. 380D. ADMINISTRATION. 
‘‘(a) RESOLUTION OF DISPUTES.—
‘‘(1) IN GENERAL.—Any dispute regarding the 
eligibility of a person to receive a payment under 
this subtitle, or the amount of the payment, may be 
appealed to the county committee established under 
section 8 of the Soil Conservation and Domestic Al-
lotment Act (16 U.S.C. 590h) for the county or 
other area in which the farming operation of the 
person is located.
‘‘(2) NATIONAL APPEALS DIVISION.—Any ad-
verse determination of a county committee under 
subsection (a) may be appealed to the National Ap-
peals Division established under subtitle H of the 
Department of Agriculture Reorganization Act of 
1994 (7 U.S.C. 6991 et seq.). 
‘‘(b) USE
OF
QUALIFIED
FINANCIAL
INSTITU-
TIONS.—The Secretary may use qualified financial institu-
tions to manage assets, make payments, and otherwise 
carry out this subtitle. 
‘‘CHAPTER 2—TOBACCO QUALITY AND 
QUANTITY 
‘‘SEC. 380G. TOBACCO ADVISORY BOARDS. 
‘‘(a) ESTABLISHMENT.—The Secretary shall estab-
lish in the Department a permanent advisory board for 
each kind of tobacco, to be known as a ‘Tobacco Advisory 
Board’. 
‘‘(b) MEMBERSHIP.—
‘‘(1) NUMBER.—Each Tobacco Advisory Board 
shall have 11 members. 
‘‘(2) COMPOSITION.—The Board for a kind of 
tobacco shall consist of the following: 
‘‘(A) 5 members appointed by the Sec-
retary from nominations submitted by rep-
resentatives of active tobacco producers in the 
United States of that kind of tobacco. 
‘‘(B) 5 members appointed by the Sec-
retary from nominations submitted by rep-
resentatives of tobacco product manufacturers 
in the United States that purchase that type of 
tobacco, including at least 1 representative of 
export dealers of tobacco or tobacco products 
appointed from nominations submitted by ex-
port dealers. 
‘‘(C) An officer or employee of the Depart-
ment appointed by the Secretary. 
‘‘(3) ALLOCATION
OF
PRODUCER
MEMBER-
SHIP.—In appointing members to the Tobacco Advi-
sory Board for a kind of tobacco under paragraph 
(2)(A), the number of members appointed by the 
Secretary to represent active tobacco producers of 
that kind of tobacco in a particular State shall, to 
the maximum extent practicable, bear the same ratio 
to the total number of members of the Board as—
‘‘(A) the total volume of domestic sales of 
the kind of tobacco produced in the State dur-
ing the most recent period for which data is 
available; bears to
‘‘(B) the total volume of domestic sales of 
the kind of tobacco produced in all States dur-
ing the most recent period for which data is 
available. 
‘‘(c) CHAIRPERSON.—The Secretary shall appoint the 
chairperson of each Tobacco Advisory Board, with a dif-
ferent member serving as chairperson of a Board every 
2 years. 
‘‘(d) TERMS.—Members of a Tobacco Advisory Board 
shall serve for 2-year terms, except that the terms of the 
members first appointed to the Boards shall be staggered 
so as to establish a rotating membership of the Boards, 
as determined by the Secretary. 
‘‘SEC. 380H. DUTIES AND ADMINISTRATION OF TOBACCO 
ADVISORY BOARDS. 
‘‘(a) DUTIES.—The Tobacco Advisory Board for a 
kind of tobacco shall—
‘‘(1) determine and describe the physical char-
acteristics of that kind of tobacco produced in the 
United States and unmanufactured tobacco of that 
kind imported into the United States; 
‘‘(2) assemble and evaluate, in a systematic 
manner, concerns and problems with the quality of 
that kind of tobacco produced in the United States,
expressed by domestic and foreign buyers and manu-
facturers of tobacco products; 
‘‘(3) review data collected by Federal agencies 
on the physical and chemical integrity of that kind 
of tobacco produced in the United States and un-
manufactured tobacco imported into the United 
States, to ensure that tobacco being used in domesti-
cally-manufactured tobacco products is of the high-
est quality and is free from prohibited physical and 
chemical agents; 
‘‘(4) not later than a date determined by the 
Secretary, make recommendations to the Secretary 
on the base year, for the maximum crop poundage 
base under section 380I(f) for each crop of that kind 
of tobacco; 
‘‘(5) establish a registration system to monitor 
the production of that kind of tobacco; 
‘‘(6) investigate and communicate to the Sec-
retary—
‘‘(A) conditions with respect to the produc-
tion of that kind of tobacco that discourage im-
provements in the quality of tobacco produced 
in the United States; and
‘‘(B) 
recommendations 
for 
regulatory 
changes that would address tobacco quality 
issues affecting that kind of tobacco; 
‘‘(7) conduct oversight regarding tobacco mar-
keting issues (such as opening sales dates and mar-
keting regulations) affecting that kind of tobacco 
and applicable to auction markets; 
‘‘(8) provide assistance to Federal agencies on 
actions taken by the Federal agencies that affect the 
quality or quantity of that kind of tobacco produced 
in the United States; and 
‘‘(9) carry out such other related activities as 
are assigned to the Board by the Secretary. 
‘‘(b) ADMINISTRATION.—The Secretary shall provide 
the Tobacco Advisory Boards with (as determined by the 
Secretary)—
‘‘(1) a staff that is—
‘‘(A) experienced in the sampling and anal-
ysis of unmanufactured tobacco; and 
‘‘(B) capable of collecting data and moni-
toring tobacco production information; and 
‘‘(2) other resources and information necessary 
for the Boards to perform their duties, including in-
formation concerning acreage devoted to the produc-
tion of each kind of tobacco.
‘‘(c) APPLICABILITY OF FEDERAL ADVISORY COM-
MITTEE ACT.—The Federal Advisory Committee Act (5 
U.S.C. App.) shall not apply to the Tobacco Advisory 
Boards. 
‘‘SEC. 380I. TOBACCO POUNDAGE LIMITATION PROGRAM. 
‘‘(a) DEFINITIONS.—In this section: 
‘‘(1) CROP POUNDAGE BASE.—The term ‘crop 
poundage base’ means the crop poundage base for a 
kind of tobacco for a crop for an active tobacco pro-
ducer, as determined by the Secretary under sub-
section (e). 
‘‘(2) PERMITTED POUNDAGE.—The term ‘per-
mitted poundage’ means the number of pounds of a 
kind of tobacco authorized to be produced by an ac-
tive tobacco producer, consistent with the annual 
poundage limitation program announced by the Sec-
retary for the kind of tobacco. 
‘‘(b) ESTABLISHMENT AND MAINTENANCE.—
‘‘(1) IN GENERAL.—The Secretary shall estab-
lish and may maintain a poundage limitation pro-
gram for each crop of each kind of tobacco. 
‘‘(2) SUPPLY.—In determining whether to 
maintain the poundage limitation program for a crop 
of a kind of tobacco, the Secretary shall determine 
whether the total supply of that kind of tobacco, in
the absence of limitations, will be excessive, taking 
into account the need for an adequate carry-over to 
maintain reasonable and stable supplies and prices. 
‘‘(3) ANNOUNCEMENT.—
‘‘(A) IN
GENERAL.—The Secretary shall 
announce the annual poundage limitation pro-
gram for a kind of tobacco as soon as prac-
ticable preceding the year in which the crop is 
harvested. 
‘‘(B) SPECIAL RULE FOR 2004 CROP.—In 
the case of the 2004 crop for a kind of tobacco, 
the Secretary shall announce the poundage limi-
tation program as soon as practicable after the 
date of the enactment of the Tobacco Reduc-
tion, Accountability, and Community Enhance-
ment Act of 2003. 
‘‘(4) CONSULTATION.—The Secretary shall 
carry out this subsection with regard to a kind of to-
bacco in consultation with the Tobacco Advisory 
Board established for that kind of tobacco. 
‘‘(c) APPLICATION OF LIMITATION.—Under a pound-
age limitation program for a kind of tobacco, the Sec-
retary shall achieve the limitation by applying a uniform 
percentage adjustment to the crop poundage base for the 
kind of tobacco in each traditional tobacco county for the
crop for active tobacco producers that produce that kind 
of tobacco in that county, as determined by the Secretary. 
‘‘(d) COMPLIANCE.—
‘‘(1) LOANS, PURCHASES, OR PAYMENTS.—An 
active tobacco producer that knowingly produces a 
kind of tobacco in excess of the permitted poundage 
for the kind of tobacco, or violates any lease or 
transfer requirements of this section, shall be ineli-
gible for any loans, purchases, or payments for the 
kind of tobacco. 
‘‘(2) NO CARRY OVER.—An active tobacco pro-
ducer may not carry over permitted poundage for a 
crop of a kind of tobacco, which is not produced by 
the producer, for production in a subsequent crop 
year. 
‘‘(3) PENALTIES.—
‘‘(A) CRIMINAL
PENALTY.—A producer 
that violates this subsection may be fined not 
more than $100,000 or imprisoned not more 
than 2 years, or both. 
‘‘(B) CIVIL PENALTY.—In addition to any 
penalty imposed under paragraph (1), the Sec-
retary may assess against a producer that vio-
lates this subsection a civil penalty in an 
amount not to exceed 2 percent of the value of
the kind of tobacco produced by the producer 
during the crop year in which the violation oc-
curred, as determined by the Secretary. 
‘‘(3) JURISDICTION
TO
PREVENT
AND
RE-
STRAIN VIOLATIONS.—A United States district court 
shall have jurisdiction to prevent and restrain a pro-
ducer from producing a kind of tobacco in excess of 
the permitted poundage for the kind of tobacco. 
‘‘(e) 
DETERMINATION
OF
CROP
POUNDAGE 
BASES.—
‘‘(1) 2004 CROP YEAR.—Subject to subsections 
(f) through (i), the crop poundage base for an active 
tobacco producer for the 2004 crop of each kind of 
tobacco shall equal the average of the number of 
pounds of that kind of tobacco harvested by the ac-
tive tobacco producer in a traditional tobacco county 
and marketed in each of the 5 crop years preceding 
the crop year, as determined and adjusted by the 
Secretary. 
‘‘(2) SUBSEQUENT
CROP
YEARS.—Subject to 
subsections (f) through (i), in the case of the 2005 
and subsequent crops of each kind of tobacco, the 
crop poundage base for an active tobacco producer 
of a kind of tobacco shall equal the number of 
pounds of that kind of tobacco harvested by the ac-
‘‘(1) PROHIBITION.—Except as provided in 
paragraph (2), an active tobacco producer shall not 
directly or indirectly sell, lease, or transfer to an-
other person or other legal entity a crop poundage 
base established for an active tobacco producer 
under this section. 
‘‘(2) EXCEPTION.—If the crop poundage base 
of an active tobacco producer for a type of tobacco 
covers tobacco that was produced by the producer in 
more than one traditional tobacco county, the pro-
ducer may elect to consolidate the base in a single 
traditional tobacco county in which the producer 
bore or shared in the risk of producing a crop of 
that kind of tobacco for the 2002 crop year. 
‘‘(h) REALLOCATION OF UNUSED CROP POUNDAGE 
BASES.—
‘‘(1) COUNTY
POOL.—Subject to paragraphs 
(2), (3), and (4), if an active tobacco producer with 
a crop poundage base for a kind of tobacco elects 
not to use all or part of the crop poundage base to 
continue to produce that kind of tobacco, the unused 
crop poundage base shall be placed in a pool estab-
lished for the traditional tobacco county where the 
unused crop poundage base was originally located 
for reallocation by the Secretary to other active to-
bacco producers of that kind of tobacco in the tradi-
tional tobacco county. The Secretary shall distribute 
the unused crop poundage base among those pro-
ducers that request a portion of the unused crop 
poundage base according to the percentage of pre-
vious year production, by pound, of that kind of to-
bacco in that county. 
‘‘(2) STATE POOL.—Subject to paragraph (4), 
if any crop poundage base for a kind of tobacco re-
mains after the crop poundage base is made avail-
able to producers of that kind of tobacco in the tra-
ditional tobacco county in a State under paragraph 
(1), the unused crop poundage base shall be placed 
in a pool established for the State for reallocation by 
the Secretary to other producers of that kind of to-
bacco in traditional tobacco counties. The Secretary 
shall distribute the available unused crop poundage 
base among those producers that request a portion 
of the unused crop poundage base according to the 
percentage of previous year production, by pound, of 
that kind of tobacco in the State. 
‘‘(3) TRADITIONAL
GROWING
AREA
POOL.—
Subject to paragraph (4), if any crop poundage base 
for a kind of tobacco remains after the crop pound-
age base is made available to producers of that kind
of tobacco in the traditional tobacco county in a 
State under paragraph (1), and remains after the 
crop poundage base is made available to producers 
of that kind of tobacco in the State under paragraph 
(2), the unused crop poundage base shall be placed 
in a pool established for reallocation by the Sec-
retary to other producers of that kind of tobacco in 
a traditional tobacco county for that kind of tobacco. 
The Secretary shall distribute the available unused 
crop poundage base among those producers that re-
quest a portion of the unused crop poundage base 
according to the percentage of previous year produc-
tion, by pound, of that kind of tobacco in that tradi-
tional growing area. 
‘‘(4) NEW PRODUCERS.—In reallocating unused 
crop poundage bases for a kind of tobacco in a tradi-
tional tobacco county made available under any of 
the preceding paragraphs, the Secretary shall make 
available to any new producers of that kind of to-
bacco in the traditional tobacco county up to 10 per-
cent of the crop poundage bases available for re-
allocation for the kind of tobacco in the traditional 
tobacco county. 
‘‘(5) REALLOCATION PROCEDURES.—The Sec-
retary shall establish procedures by which producers
of a kind of tobacco, including new producers under 
paragraph (4), may request the reallocation unused 
crop poundage base available under this subsection. 
‘‘(i) COMPLIANCE WITH CONSERVATION AND AGRI-
CULTURAL REQUIREMENTS.—As a condition of the estab-
lishment of a crop poundage base for an active tobacco 
producer for a crop of a kind of tobacco, the producer shall 
agree, during the crop year for which the crop poundage 
base is established—
‘‘(1) to comply with applicable conservation re-
quirements under subtitle B of title XII of the Food 
Security Act of 1985 (16 U.S.C. 3811 et seq.); 
‘‘(2) to comply with applicable wetland protec-
tion requirements under subtitle C of title XII of the 
Act (16 U.S.C. 3821 et seq.); 
‘‘(3) to use the land of the active tobacco pro-
ducer, in a quantity consistent with the crop pound-
age base, for an agricultural or conserving use, and 
not for a nonagricultural commercial or industrial 
use, as determined by the Secretary; and 
‘‘(4) to effectively control noxious weeds and 
otherwise maintain the land in accordance with 
sound agricultural practices, as determined by the 
Secretary, if the agricultural or conserving use in-
volves the noncultivation of any portion of the land 
referred to in paragraph (3). 
‘‘CHAPTER 3—TOBACCO MARKET 
STABILITY PROGRAM 
‘‘SEC. 380M. TOBACCO MARKET STABILITY PROGRAM. 
‘‘(a) IN GENERAL.—If during any period of a mar-
keting year, to be established by the Secretary, the insured 
price for the crop of a kind of tobacco exceeds the average 
domestic price for the crop of the kind of tobacco, as de-
termined by the Secretary, the Secretary shall make avail-
able to active tobacco producers of that kind of tobacco 
market stability payments for the marketing year in an 
amount obtained by multiplying—
‘‘(1) the payment rate for the crop (as deter-
mined under subsection (b)); and 
‘‘(2) the permitted poundage for the active to-
bacco producer (as determined under section 380I). 
‘‘(b) PAYMENT RATE.—
‘‘(1) IN GENERAL.—Subject to paragraphs (2) 
and (3), the payment rate for a crop of a kind of 
tobacco under this section shall be the amount by 
which—
‘‘(A) the insured price for the crop; ex-
ceeds 
‘‘(B) the domestic price for the crop.
‘‘(2) INSURED PRICES.—
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), the insured price for each 
crop of a kind of tobacco under this section 
shall be a price, which is determined by the 
Secretary to be necessary to provide market 
stability for that kind of tobacco and for which 
private insurance may be obtained in accord-
ance with subsection (c) at a cost that does not 
exceed (but may be less than) the assessment 
imposed for that kind of tobacco pursuant to 
subsection (f). 
‘‘(B) MINIMUM PRICE.—The insured price 
for each crop of a kind of tobacco under this 
section shall not be less than $1.00 per pound, 
unless the Secretary determines that lower in-
sured price is necessary. 
‘‘(3) DOMESTIC
PRICES.—The domestic price 
for the crop of a kind of tobacco under this section 
shall be determined by the Secretary. 
‘‘(c) DELIVERY THROUGH PRIVATE PROVIDERS.—
‘‘(1) IN GENERAL.—The Secretary shall carry 
out this section, to the maximum extent practicable, 
through contracts with private insurance companies
and other private entities approved by the Secretary 
(referred to in this section as ‘private providers’). 
‘‘(2) REIMBURSEMENT.—The Secretary shall 
reimburse private providers for administrative ex-
penses incurred in carrying out this section, as de-
termined by the Secretary. 
‘‘(d) DELIVERY THROUGH LOCAL DEPARTMENT OF-
FICES.—If the Secretary determines that there are an in-
sufficient number of private providers to carry out this 
section in all or part of a State, the Secretary (acting 
through local offices of the Department) shall carry out 
this section directly in all or part of the State. 
‘‘(e) ADDITIONAL COVERAGE.—The Secretary may 
offer additional coverage to active tobacco producers on 
a farm of a crop of a kind of tobacco under this section 
under which a higher level of price coverage is made avail-
able to the active tobacco producers on the farm, in ex-
change for an additional premium paid by the active to-
bacco producers on the farm. 
‘‘(f) ASSESSMENT.—
‘‘(1) IN
GENERAL.—Effective for each mar-
keting year for a kind of tobacco for which tobacco 
market stability payments are made available under 
this section, subject to paragraph (2), each producer 
and purchaser of that kind of tobacco shall remit to
the Commodity Credit Corporation a marketing as-
sessment in an amount determined by the Secretary 
that is sufficient to provide the payments for that 
kind of tobacco. 
‘‘(2) LIMITATION ON ASSESSMENT.—The Sec-
retary shall not impose or collect an assessment 
under this section for a marketing year until and 
unless the Secretary determines that the amounts 
made available under section 380S(c)(1)(C) to carry 
out this section for that marketing year will be in-
sufficient. 
‘‘(3) AMOUNT.—Subject to paragraph (2), the 
amount of producer and purchaser assessments for 
a kind of tobacco under this subsection—
‘‘(A) shall be determined in such a manner 
that producers and purchasers share equally in 
paying assessments required under this sub-
section; and 
‘‘(B) shall not exceed 5 cents per pound. 
‘‘(4) COLLECTION.—The producer and pur-
chaser assessments shall be—
‘‘(A) collected in the same manner as pro-
vided for in section 106A(d)(2) or 106B(d)(3) 
of the Agricultural Act of 1949 (7 U.S.C. 
1445–1(d)(2), 1445–2(d)(3)) (as in effect on
the day before the date of the enactment of the 
Tobacco Reduction, Accountability, and Com-
munity Enhancement Act of 2003), as applica-
ble; and 
‘‘(B) enforced in the same manner as pro-
vided in section 106A(h) or 106B(j) of the Ag-
ricultural Act of 1949 (7 U.S.C. 1445–1(h), 
1445–2(j)) (as in effect on the day before the 
date of the enactment of the Tobacco Reduc-
tion, Accountability, and Community Enhance-
ment Act of 2003), as applicable. 
‘‘(5) USE OF QUALIFIED FINANCIAL INSTITU-
TIONS.—The Secretary may use qualified financial 
institutions to manage assets, make collections, and 
otherwise carry out this subsection. 
‘‘(6) ENFORCEMENT.—The Secretary may en-
force this subsection in the courts of the United 
States. 
‘‘(g) CONSULTATION.—The Secretary shall make the 
determinations required by this section with regard to a 
kind of tobacco in consultation with the Tobacco Advisory 
Board established for that kind of tobacco. After the Sec-
retary announces the terms and conditions of the tobacco 
market stability program for a crop year for a kind of 
tobacco, the Secretary shall consult with the Tobacco Ad-
visory Board established for that kind of tobacco before 
making any change to the program for the crop year. 
‘‘CHAPTER 4—COMPETITIVE GRANTS FOR 
TOBACCO RESEARCH 
‘‘SEC. 380Q. COMPETITIVE GRANTS FOR TOBACCO RE-
SEARCH. 
‘‘(a) IN GENERAL.—Notwithstanding any other pro-
vision of law, the Secretary shall make competitive grants 
under section 406 of the Agricultural Research, Exten-
sion, and Education Reform Act of 1998 (7 U.S.C. 7626) 
to colleges and universities located in eligible States to 
conduct research—
‘‘(1) to assist tobacco producers to diversify 
crops or implement other means to reduce or elimi-
nate the reliance of the producers on the production 
of tobacco or to promote alternative uses of tobacco 
or enhance the quality of tobacco produced in the 
United States; and 
‘‘(2) to foster and facilitate development, eval-
uation, and implementation of economically viable 
new agricultural technologies and enterprises for 
rural communities. 
‘‘(b) GRANT
DISTRIBUTION.—In making grants 
under this section, the Secretary shall provide for an equi-
table distribution of the grants based on the volume of
each kind of tobacco that is produced in each eligible 
State, as determined by the Secretary 
‘‘CHAPTER 5—FUNDING 
‘‘SEC. 380S. TOBACCO TRUST FUND. 
‘‘(a) ESTABLISHMENT.—There is established in the 
Commodity Credit Corporation a revolving trust fund to 
be known as the ‘Tobacco Trust Fund’ and to be used 
in carrying out this subtitle. The Fund shall consist of—
‘‘(1) such amounts as are deposited in the 
Fund under subsection (b); 
‘‘(2) such amounts as are necessary from the 
Commodity Credit Corporation; and 
‘‘(3) any interest earned on investment of 
amounts in the Fund under subsection (d). 
‘‘(b) DEPOSITS.—Revenues from assessments col-
lected under section 380T shall be deposited in the Fund. 
‘‘(c) EXPENDITURES.—
‘‘(1) IN GENERAL.—Subject to paragraphs (2) 
and (3) and notwithstanding any other provision of 
law, in addition to any other funds that may be 
available, the Secretary may use from the Fund such 
amounts as the Secretary determines are nec-
essary—
‘‘(A) to make payments to tobacco quota 
holders and traditional producers of tobacco 
under chapter 1; 
‘‘(B) to pay necessary expenses of the To-
bacco Advisory Boards and to carry out the 
poundage limitation program under chapter 2; 
‘‘(C) to carry out the tobacco market sta-
bility program under chapter 3, in an amount 
equal to $50,000,000 for each of fiscal years 
2005 through 2008; 
‘‘(D) to make competitive grants for to-
bacco research under chapter 4, in an amount 
equal to $12,000,000 for each of fiscal years 
2005 through 2009; 
‘‘(E) to make grants to each association 
that has entered into a loan agreement with the 
Commodity Credit Corporation under section 
106A or 106B of the Agricultural Act of 1949 
(7 U.S.C. 1445–1, 1445–2) (as in effect on the 
day before the date of the enactment of the To-
bacco Reduction, Accountability, and Commu-
nity Enhancement Act of 2003) to assist the 
association to transition to alternative methods 
of marketing tobacco in accordance with a plan 
approved by the Secretary, with the grants allo-
cated on the basis of the proportion of the kind 
of tobacco marketed by each association, in an 
amount not to exceed $1,500,000 for each kind 
of tobacco for each of fiscal years 2004 through 
2008; 
‘‘(F) to make payments to appropriate to-
bacco warehouse associations, as determined by 
the Secretary, in an amount not to exceed 
$1,500,000 for each of fiscal years 2004 
through 2008; and 
‘‘(G) to pay administrative costs incurred 
by the Secretary in carrying out this subtitle 
and reimburse the Commodity Credit Corpora-
tion for costs incurred by the Commodity Credit 
Corporation under paragraph (2). 
‘‘(2) EXPENDITURES
BY
COMMODITY
CREDIT 
CORPORATION.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B) and notwithstanding any other provi-
sion of law, the Secretary may use funds of the 
Commodity Credit Corporation to make pay-
ments under paragraph (1). 
‘‘(B) REIMBURSEMENT
TO
COMMODITY 
CREDIT CORPORATION.—Not later than Janu-
ary 1, 2011, the Commodity Credit Corporation
shall be reimbursed in full, with interest, for all 
funds of the Commodity Credit Corporation ex-
pended under subparagraph (A). 
‘‘(3) ADMINISTRATIVE EXPENSES.—An amount 
not to exceed $20,000,000 for each fiscal year of the 
amounts in the Fund shall be available to pay the 
administrative expenses necessary to carry out this 
subtitle. 
‘‘(d) INVESTMENT OF AMOUNTS.—
‘‘(1) IN
GENERAL.—The Commodity Credit 
Corporation shall invest such portion of the Fund as 
is not, in the judgment of the Commodity Credit 
Corporation, required to meet current withdrawals. 
‘‘(2) 
INTEREST-BEARING
OBLIGATIONS.—In-
vestments may be made only in interest-bearing obli-
gations of the United States. 
‘‘(3) ACQUISITION OF OBLIGATIONS.—For the 
purpose of investments under paragraph (1), obliga-
tions may be acquired—
‘‘(A) on original issue at the issue price; or 
‘‘(B) by purchase of outstanding obliga-
tions at the market price. 
‘‘(4) SALE
OF
OBLIGATIONS.—Any obligation 
acquired by the Fund may be sold by the Com-
modity Credit Corporation at the market price.
‘‘(5) CREDITS TO FUND.—The interest on, and 
the proceeds from the sale or redemption of, any ob-
ligations held in the Fund shall be credited to and 
form a part of the Fund. 
‘‘(e) ADMINISTRATION.—In administering the Fund, 
the Secretary shall make payments, reimburse agencies of 
the Department, and accept deposits without regard to 
limitations on total amounts of allotments and fund trans-
fers under section 11 of the Commodity Credit Corpora-
tion Charter Act (15 U.S.C. 714i). 
‘‘(f) USE
OF
QUALIFIED
FINANCIAL
INSTITU-
TIONS.—The Secretary may use qualified financial institu-
tions to manage assets, make payments, and otherwise 
carry out this subtitle. 
‘‘SEC. 380T. ASSESSMENTS. 
‘‘(a) IN GENERAL.—The Secretary, acting through 
the Commodity Credit Corporation, shall impose quarterly 
assessments, calculated in accordance with this section, on 
each tobacco product manufacturer and tobacco product 
importer that sells tobacco products in domestic commerce 
in the United States. 
‘‘(b) TOBACCO TRUST FUND.—Assessments collected 
under this section shall be deposited in the Tobacco Trust 
Fund.
‘‘(c) ASSESSMENT FOR EACH CLASS OF TOBACCO 
PRODUCT.—
‘‘(1) ALLOCATION BY CLASS OF TOBACCO PROD-
UCTS.—The percentage of the total amount to be as-
sessed against, and paid by, the manufacturers and 
importers of each class of tobacco product in each 
applicable fiscal year shall be—
‘‘(A) for cigarette manufacturers and im-
porters, 98.303 percent; 
‘‘(B) for snuff manufacturers and import-
ers, 0.428 percent; 
‘‘(C) for chewing tobacco manufacturers 
and importers, 0.098 percent; 
‘‘(D) for manufacturers and importers of 
small cigars, 0.011 percent; 
‘‘(E) for manufacturers and importers of 
large cigars, 1.095 percent; 
‘‘(F) for pipe tobacco manufacturers and 
importers, 0.021 percent; and 
‘‘(G) for roll-your-own tobacco manufactur-
ers and importers, 0.044 percent. 
‘‘(2) ADJUSTMENT.—The Secretary shall adjust 
the percentage of the total amount to be assessed 
against, as determined by paragraph (1), and paid 
by, the manufacturers and importers of each class of
tobacco product in each applicable fiscal year by 
multiplying the percentage of the total amount to 
be assessed, as determined by such paragraph, by 
a fraction—
‘‘(A) the numerator of which is the total 
volume of domestic sales of that class of to-
bacco product during the preceding applicable 
fiscal year; and 
‘‘(B) the denominator of which is the total 
volume of domestic sales of that class of to-
bacco product during the fiscal year ending 
September 30, 2003.
‘‘(3) TOTAL ASSESSMENT.—The total amount 
to be assessed against all manufacturers and import-
ers of all classes of tobacco product in each applica-
ble fiscal year shall be equal to the amount required 
to carry out this subtitle during the applicable fiscal 
year, as determined by the Secretary. If the amount 
to be assessed after the application of paragraphs 
(1) and (2) is insufficient to carry out this subtitle 
during the applicable fiscal year, the Secretary may 
assess such additional amount as the Secretary de-
termines to be necessary to carry out this subtitle 
during the applicable fiscal year. Such additional 
amount shall be allocated to the manufacturers and
importers of each class of tobacco product in the 
same manner and based on the same percentages 
applied in determining the total amount to be as-
sessed under paragraph (1), as adjusted by para-
graph (2) during the applicable fiscal year. 
‘‘(4) NOTIFICATION
OF
ASSESSMENTS.—The 
Secretary shall notify all manufacturers and import-
ers of tobacco products of the amount of the assess-
ment for each quarterly payment period. The notice 
for a quarterly payment period shall refer gross do-
mestic sales and market shares for the quarterly 
payment period and conform with the requirements 
of subsection (h). 
‘‘(5) TIMING OF ASSESSMENT PAYMENTS.—
‘‘(A) IN GENERAL.—Assessments shall be 
collected at the end of each calendar year quar-
ter, and the assessment for a calendar year 
quarter shall correspond to the base period 
quarter that ended at the end of the preceding 
calendar year quarter. The payments over four 
calendar quarters, beginning with the calendar 
quarter ending on December 31 of each applica-
ble fiscal year, shall be sufficient to cover the 
payments required under chapter 1 on Novem-
ber 1 of that same applicable fiscal year and
other expenditures of the Tobacco Trust Fund 
required by section 380S during the base quar-
ter periods corresponding to those four calendar 
quarters. 
‘‘(B) SPECIAL RULE.—In the case of the 
chapter 1 payments required to be made on 
September 30, 2004, the assessments shall be 
paid on that same date and correspond to the 
first base period of six months. 
‘‘(d) ALLOCATION OF ASSESSMENT WITHIN EACH 
CLASS OF TOBACCO PRODUCT.—
‘‘(1) ALLOCATION.—The assessment for each 
class of tobacco product shall be allocated on a pro 
rata basis among manufacturers and importers 
based on each manufacturer’s or importer’s share of 
gross domestic volume. No manufacturer or importer 
shall be required to pay an assessment in excess of 
the manufacturer’s or importer’s share of domestic 
volume. 
‘‘(2) GROSS DOMESTIC VOLUME DEFINED.—In 
this section, the term ‘gross domestic volume’ means 
the volume of tobacco products removed, as defined 
by section 5702(k) of the Internal Revenue Code of 
1986, and not exempt from tax under chapter 52 of 
the Internal Revenue Code at the time of their re-
moval under such chapter or the Harmonized Tariff 
Schedule of the United States (19 U.S.C. 1202). 
‘‘(e) ALLOCATION OF TOTAL ASSESSMENTS BY MAR-
KET SHARE.—The amount of the assessment for each 
class of tobacco product to be paid by each manufacturer 
or importer of the class of tobacco product under sub-
section (a) shall be determined for each quarterly payment 
period by multiplying—
‘‘(1) the market share of the manufacturer or 
importer, as calculated with respect to that payment 
period, of the class of tobacco product; by 
‘‘(2) the total amount of the assessment for 
that quarterly payment period under subsection (c), 
for the class of tobacco product. 
‘‘(f) DETERMINATION
OF VOLUME
OF DOMESTIC 
SALES.—
‘‘(1) IN GENERAL.—The calculation of the vol-
ume of domestic sales of a class of tobacco product 
by a manufacturer or importer, and by all manufac-
turers and importers as a group, shall be made by 
the Secretary based on information provided by the 
manufacturers and importers pursuant to subsection 
(g), as well as any other relevant information pro-
vided to or obtained by the Secretary. The volume
of domestic sales shall be calculated based on gross 
domestic volume. 
‘‘(2) MEASUREMENT.—For purposes of the cal-
culations under this subsection and the certifications 
under subsection (g) by the Secretary, the volumes 
of domestic sales shall be measured by—
‘‘(A) in the case of cigarettes, the numbers 
of cigarettes; 
‘‘(B) in the case of small cigars, the num-
ber of cigars weighing not more than three 
pounds per thousand; 
‘‘(C) in the case of large cigars, the num-
ber of cigars weighing more than three pounds 
per thousand; and 
‘‘(D) in the case of other classes of tobacco 
products, in terms of number of pounds, or 
fraction thereof, of these products.
‘‘(g) MEASUREMENT
OF VOLUME
OF DOMESTIC 
SALES.—
‘‘(1) IN
GENERAL.—Each manufacturer and 
importer of tobacco products shall submit to the 
Secretary a certified copy of each of the returns or 
forms described by this paragraph that are required 
to be filed with a Government agency on the same 
date that those returns or forms are filed, or re-
quired to be filed, with such agency. The returns 
and forms described by this paragraph are those re-
turns and forms related to the release of tobacco 
products into domestic commerce, as defined by sec-
tion 5702(k) of the Internal Revenue Code of 1986 
and the payment of the taxes imposed under charter 
52 of the Internal Revenue Code of 1986, including 
AFT Form 5000.24 and United States Customs 
Form 7501 under currently applicable regulations. 
‘‘(2) PENALTIES.—Any person that knowingly 
fails to provide information required under this sub-
section or that provides false information under this 
subsection shall be subject to the penalties described 
in section 1003 of title 18, United States Code. In 
addition, the Secretary may assess against the per-
son a civil penalty in an amount not to exceed 2 per-
cent of the value of the kind of tobacco products 
manufactured or imported by such person during the 
applicable fiscal year, as determined by the Sec-
retary. 
‘‘(h) ASSESSMENT NOTIFICATION; CONTENT.—The 
Secretary shall provide each manufacturer or importer 
subject to an assessment under subsection (a) with written 
notice setting forth the amount to be assessed against 
such manufacturer or importer for the applicable quar-
terly period. The notice for a quarterly period shall be pro-
vided not later than 30 days before the date payment is 
due under subsection (c)(5). The notice shall include the 
following information with respect to such quarterly period 
used by the Secretary in calculating such amount: 
‘‘(1) The total combined assessment for all 
manufacturers and importers of tobacco products. 
‘‘(2) The total assessment with respect to the 
class of tobacco products manufactured or imported 
by such manufacturer or importer. 
‘‘(3) Any adjustments to the percentage alloca-
tions among the classes of tobacco products made 
pursuant to subsection (c)(2). 
‘‘(4) The volume of gross sales of the applicable 
class of tobacco product treated as made by such 
manufacturer or importer for purposes of calculating 
such manufacturer’s or importer’s market share 
under subsection (e). 
‘‘(5) The total volume of gross sales of the ap-
plicable class of tobacco product that the Secretary 
treated as made by all manufacturers and importers 
for purposes of calculating such manufacturer’s or 
importer’s market share under subsection (e).
‘‘(6) Such manufacturer’s or importer’s market 
share of the applicable class of tobacco product as 
determined by the Secretary under subsection (e). 
‘‘(7) The market share, as determined by the 
Secretary under subsection (e), of each other manu-
facturer and importer, for each applicable class of 
tobacco product. 
‘‘(i) CHALLENGE TO ASSESSMENT.—
‘‘(1) APPEAL TO SECRETARY.—A manufacturer 
or importer subject to this section may contest an 
assessment imposed on such person pursuant to this 
section by notifying the Secretary within 10 business 
days after receiving the assessment notification re-
quired by subsection (h). Such manufacturer and 
importer may place into escrow, in accordance with 
rules promulgated by the Secretary, only the portion 
of the assessment being challenged in good faith 
pending final determination of the assessment under 
this subsection. 
‘‘(2) PROCEDURE FOR APPEAL.—The Secretary 
shall by regulation establish a procedure whereby a 
person contesting an assessment pursuant to this 
subsection may present information to the Secretary 
to demonstrate that such assessment is incorrect, in-
cluding information to demonstrate the following:
‘‘(A) The total combined assessment im-
posed by the Secretary on all manufacturers 
and importers is excessive. 
‘‘(B) The Secretary’s allocation of the total 
assessment among the classes of tobacco prod-
ucts is incorrect. 
‘‘(C) The total volume of gross domestic 
sales of all manufacturers and importers of the 
relevant class of tobacco product calculated by 
the Secretary under subsection (e) is incorrect. 
‘‘(D) The level of gross domestic sales at-
tributed to such person by the Secretary for 
purposes of calculating such person’s market 
share under subsection (e) exceeds such per-
son’s actual domestic sales of such class of to-
bacco product. 
‘‘(E) The amount of the assessment attrib-
uted to such person by the Secretary exceeds 
such person’s pro rata share based on such per-
son’s share of gross domestic sales. 
‘‘(3) CHALLENGE.—In challenging an assess-
ment under this subsection, the manufacturer or im-
porter may use any information that is available, in-
cluding third party data on industry or individual 
company sales volumes. Such information may con-
stitute evidence sufficient to establish that the Sec-
retary’s initial determination was incorrect, in which 
event the assessment shall be revised so that the 
manufacturer or importer is required only to pay the 
amount correctly determined. 
‘‘(4) TIME FOR REVIEW.—Within 30 days after 
receiving notice from a manufacturer or importer 
under paragraph (2), the Secretary shall decide 
whether the information provided to the Secretary 
pursuant to such paragraph and any other informa-
tion which the Secretary determines is appropriate is 
sufficient to establish that the original assessment 
was incorrect, and shall make any revisions nec-
essary to ensure that each manufacturer and im-
porter pays only its correct pro rata share of total 
gross domestic volume from all sources. 
‘‘(5) IMMEDIATE
PAYMENT
OF
UNDISPUTED 
AMOUNTS.—The regulations promulgated by the 
Secretary under paragraph (2) shall provide for the 
immediate payment by a manufacturer or importer 
challenging an assessment of such portion of the as-
sessment that is not in dispute. 
‘‘(6) JUDICIAL REVIEW.—Any manufacturer or 
importer aggrieved by a determination of the Sec-
retary with respect to the amount of any assessment
may seek review of such determination in the United 
States District Court for the District of Columbia or 
for the district in which the manufacturer or im-
porter resides or has its principal place of business 
at any time following exhaustion of the administra-
tive remedies under this subsection. Administrative 
remedies shall be deemed exhausted if no decision by 
the Secretary is made within the time limits under 
paragraph (4). The court shall restrain collection of 
the excessive portion of any assessment or order a 
refund of excessive assessments already paid, along 
with interest calculated at the rate prescribed in sec-
tion 3717 of title 31, United States Code, if it finds 
that the Secretary’s determination is not supported 
by a preponderance of the information available to 
the Secretary. 
‘‘(7) REGULATIONS.—The Secretary shall issue 
regulations to implement this subsection within 6 
months after the date of the enactment of this Act. 
‘‘(j) TERMINATION DATE.—The authority provided 
by this section terminates on September 30, 2011. 
‘‘SEC. 380U. COMMODITY CREDIT CORPORATION. 
The Secretary shall use the funds, facilities, and au-
thorities of the Commodity Credit Corporation to carry 
out this subtitle, to remain available until expended.
‘‘(3) COMMODITY CREDIT CORPORATION.—Any 
loan pool stocks of a kind of tobacco of an associa-
tion that are not disposed of in accordance with 
paragraph (2) shall be—
‘‘(A) transferred by the association to the 
Commodity Credit Corporation; 
‘‘(B) disposed of in a manner determined 
by the Secretary; and 
‘‘(C) should any loss be incurred by the 
disposals described in subparagraph (B), these 
losses shall first be paid by the association for 
that kind of tobacco to the extent of the rev-
enue received from the sale of tobacco trans-
ferred to the association pursuant to paragraph 
(2). 
‘‘(b) NO NET COST FUNDS.—
‘‘(1) IN GENERAL.—Any funds in the No Net 
Cost Tobacco Fund or the No Net Cost Tobacco Ac-
count of an association established under sections 
106A and 106B of the Agricultural Act of 1949 (7 
U.S.C. 1445–1, 1445–2), respectively, that remain 
after the application of subsection (a) and sections 
106A and 106B of the Agricultural Act of 1949 (7 
U.S.C. 1445, 1445–1) (as in effect on the day before 
the date of the enactment of the Tobacco Reduction,
Accountability, and Community Enhancement Act of 
2003) shall be transferred to the association for dis-
tribution to members of the association in accord-
ance with a plan approved by the Secretary. 
‘‘(2) ASSOCIATIONS
WITH
NO
LOAN
POOL 
STOCKS.—In the case of an association that does not 
hold any loan pool stocks that are covered by sub-
section (a)(2), any funds in the No Net Cost To-
bacco Fund or the No Net Cost Tobacco Account of 
the association established under sections 106A and 
106B of the Agricultural Act of 1949 (7 U.S.C. 
1445–1, 1445–2), respectively, shall be transferred 
to the association for distribution to members of the 
association in accordance with a plan approved by 
the Secretary.’’. 
(b) 
CONFORMING
AMENDMENTS.—Section 
320B(c)(1) of the Agricultural Adjustment Act of 1938 
(7 U.S.C. 1314h(c)(1)) is amended—
(1) by inserting ‘‘(A)’’ after ‘‘(1)’’; 
(2) by striking ‘‘by’’ at the end and inserting 
‘‘or’’; and 
(3) by adding at the end the following: 
‘‘(B) in the case of the 2003 marketing year, 
the price support rate for the kind of tobacco in-
volved in effect under section 106 of the Agricultural
Act of 1949 (7 U.S.C. 1445) at the time of the vio-
lation; by’’. 
SEC. 6. REGULATIONS. 
(a) IN GENERAL.—In accordance with the notice and 
comment provisions of section 533 of title 5, United States 
Code, the Secretary of Agriculture may promulgate such 
regulations as are necessary to implement this Act and 
the amendments made by this Act. 
(b) PROCEDURE.—The promulgation of the regula-
tions and administration of this Act and the amendments 
made by this Act shall be made without regard to chapter 
35 of title 44, United States Code (commonly known as 
the ‘‘Paperwork Reduction Act’’). 
(c) CONGRESSIONAL REVIEW
OF AGENCY RULE-
MAKING.—In carrying out this section, the Secretary shall 
use the authority provided under section 808 of title 5, 
United States Code. 
SEC. 7. SEVERABILITY.
If any provision of this Act or the application of any 
provision of this Act to any person or circumstance is held 
to invalid, the remainder of this Act and the application 
of the provisions of the Act to any other person or cir-
cumstance shall not be affected thereby and shall continue 
to be enforced to the fullest extent possible.
SEC. 8. EFFECTIVE DATE. 
This Act and the amendments made by this Act shall 
apply to the 2004 and subsequent crops of each kind of 
tobacco.
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