Text: H.R.245 — 108th Congress (2003-2004)All Bill Information (Except Text)

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[Congressional Bills 108th Congress]
[From the U.S. Government Printing Office]
[H.R. 245 Introduced in House (IH)]







108th CONGRESS
  1st Session
                                H. R. 245

 To replace the existing Federal price support and quota programs for 
 tobacco with price support and quota programs designed to assist the 
 actual producers of tobacco, to compensate quota holders for the loss 
of tobacco quota asset value, to provide assistance for active tobacco 
  producers, including those producers who forgo obtaining a tobacco 
production license, during the transition of the new programs, and for 
                            other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 8, 2003

  Mr. Fletcher (for himself, Mr. Etheridge, Mr. Tanner, Mr. Bishop of 
Georgia, Mr. Boucher, Mr. Lewis of Kentucky, Ms. McCarthy of Missouri, 
  Mr. Lucas of Kentucky, Mr. Wamp, Mr. Whitfield, Mr. Price of North 
 Carolina, and Mr. Rogers of Kentucky) introduced the following bill; 
           which was referred to the Committee on Agriculture

_______________________________________________________________________

                                 A BILL


 
 To replace the existing Federal price support and quota programs for 
 tobacco with price support and quota programs designed to assist the 
 actual producers of tobacco, to compensate quota holders for the loss 
of tobacco quota asset value, to provide assistance for active tobacco 
  producers, including those producers who forgo obtaining a tobacco 
production license, during the transition of the new programs, and for 
                            other purposes.

    Be it enacted by the Senate and House of Representatives 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 Equity 
Elimination Act of 2003''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings and purpose.
                  TITLE I--TOBACCO EQUITY ELIMINATION

Sec. 101. Definitions of active tobacco producer and quota holder.
Sec. 102. Payments to tobacco quota holders.
Sec. 103. Transition payments for active tobacco producers.
Sec. 104. Tobacco product manufacturer and importer user fees.
Sec. 105. Reimbursement of Commodity Credit Corporation expenditures.
                    TITLE II--TOBACCO PRICE SUPPORT

Sec. 201. Availability of tobacco price support.
Sec. 202. Repeal of related provisions.
Sec. 203. Effective date.
                 TITLE III--TOBACCO PRODUCTION LICENSES

Sec. 301. Definitions of historic tobacco producer and licensed tobacco 
                            producer.
Sec. 302. Annual estimate of tobacco purchase intentions.
Sec. 303. National tobacco marketing factor.
Sec. 304. Issuance of tobacco production licenses.
Sec. 305. Annual authorized tobacco production under tobacco production 
                            licenses.
Sec. 306. Assessment on licensed tobacco producers for administrative 
                            costs.
Sec. 307. Termination of marketing quota programs and repeal of related 
                            provisions.
Sec. 308. Effective date.
                    TITLE IV--TOBACCO ADVISORY BOARD

Sec. 401. Establishment and duties of Tobacco Advisory Board.
          TITLE V--ASSISTANCE TO TOBACCO-DEPENDENT COMMUNITIES

Sec. 501. Center for Tobacco-Dependent Communities.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--Congress finds the following:
            (1) Tobacco production is conducted extensively in a number 
        of States and generates significant income in local communities 
        in these States, which are dependent on such production for 
        economic vitality.
            (2) Tobacco products manufactured from tobacco grown in the 
        these States are transported in interstate commerce.
            (3) While manufacturers of tobacco products enjoy 
        profitable circumstances, many tobacco growers and their 
        communities are in dire economic situations.
            (4) Downturns in domestic manufacturing demand for tobacco 
        grown in the United States, losses in the United States share 
        of the world tobacco market, reduced domestic demand for 
        tobacco products, and State and Federal tobacco policies that 
        have inadvertently encouraged economic dependence on tobacco 
        have contributed to such dire economic situations.
            (5) Many tobacco-producing communities are experiencing the 
        loss of tobacco farms, reductions in quota level, and a lowered 
        value for tobacco quotas.
            (6) Such communities often have difficulty developing non-
        tobacco income, and are therefore quite dependent on tobacco 
        and vulnerable to changes in the tobacco-growing industry.
            (7) Domestic and world economic trends have had a 
        disproportionately harsh impact on small family farms and on 
        their communities, as the number of tobacco farms in the United 
        States declined by more than 50 percent between 1978 and 1997.
            (8) A failure to respond to the current crisis affecting 
        family farms will result in a continued reduction in the number 
        of such farms and the jobs and income that they provide to 
        their communities.
            (9) A continued program of assistance will provide many 
        benefits to most tobacco-dependent communities, particularly to 
        small family farms.
            (10) While tobacco-growing States have some financial 
        resources to support community revitalization, few States have 
        the resources necessary to support the transition from 
        dependence on tobacco to a varied economy.
    (b) Purpose.--It is the purpose of this Act to provide assistance 
to tobacco-dependent communities, and particularly to those comprised 
of small family farms, to assist them in making the transition from 
tobacco-dependent economies to a diversified economic base.

                  TITLE I--TOBACCO EQUITY ELIMINATION

SEC. 101. DEFINITIONS OF ACTIVE TOBACCO PRODUCER AND QUOTA HOLDER.

    In this title:
            (1) The term ``active tobacco producer'' means a owner, 
        operator, landlord, tenant, or sharecropper who--
                    (A) shares in the risk of producing tobacco on a 
                farm where tobacco is produced pursuant to a tobacco 
                farm marketing quota or farm acreage allotment 
                established under the Agricultural Adjustment Act of 
                1938 (7 U.S.C. 1281 et seq.) for the 2002 crop year; 
                and
                    (B) planted the crop, or is considered to have 
                planted the crop under that Act, in 2002.
            (2) The term ``tobacco quota holder'' means an owner, as of 
        July 1, 2002, of a tobacco farm marketing quota or a farm 
        acreage allotment established under the Agricultural Adjustment 
        Act of 1938 (7 U.S.C. 1281 et seq.) for the 2002 marketing 
        year.

SEC. 102. PAYMENTS TO TOBACCO QUOTA HOLDERS.

    (a) Payment Authority.--The Secretary of Agriculture shall use 
funds of the Commodity Credit Corporation to make payments under this 
section to tobacco quota holders as compensation for the loss of 
tobacco quota asset value on account of the repeal of part I of 
subtitle B of title III of the Agricultural Adjustment Act of 1938 (7 
U.S.C. 1311 et seq.).
    (b) Application.--To receive payments under this section, a person 
shall prepare and submit to the Secretary of Agriculture an application 
at such time, in such manner, and containing such information as the 
Secretary may require, including information sufficient to demonstrate 
that the person satisfies the definition of tobacco quota holder.
    (c) Total Payment Amount.--
            (1) In general.--The Secretary of Agriculture shall 
        determine 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 expressed in pounds, the total 
        amount available for payments to tobacco quota holders under 
        this section shall be equal to the product obtained by 
        multiplying--
                    (A) $8 per pound; by
                    (B) the total tobacco farm marketing quotas 
                established under the Agriculture Adjustment Act of 
                1938 for the 1998 marketing year for that kind of 
                tobacco.
            (3) Marketing quotas other than poundage quotas.--For each 
        kind of tobacco for which there is a marketing quota or 
        allotment on an acreage basis, the Secretary shall convert the 
        tobacco farm marketing quotas or allotments established under 
        the Agriculture Adjustment Act of 1938 for the 1998 marketing 
        year for that kind of tobacco to a poundage basis before 
        executing the mathematical equation specified in paragraph (2).
    (d) Base Quota Level.--
            (1) In general.--The Secretary of Agriculture shall 
        determine the base quota level of each tobacco quota holder 
        with respect to each kind of tobacco.
            (2) Poundage quota tobacco.--For each kind of tobacco for 
        which the marketing quota is expressed in pounds, the base 
        quota level for a tobacco quota holder shall be equal to the 
        average of the tobacco farm marketing quota established under 
        the Agriculture Adjustment Act of 1938 for the 2002 marketing 
        year for quota tobacco on the farm owned by the tobacco quota 
        holder.
            (3) Marketing quotas other than poundage quotas.--For each 
        kind of tobacco for which there is a marketing quota or 
        allotment on an acreage basis, the base quota level for a 
        tobacco quota holder shall be equal to the product obtained 
        (based on a poundage conversion) by multiplying--
                    (A) the average tobacco farm marketing quota or 
                allotment established under the Agriculture Adjustment 
                Act of 1938 for the 2002 marketing year for the tobacco 
                quota holder's farm; by
                    (B) the average yield per acre for the tobacco 
                quota holder's farm for the kind of tobacco for that 
                marketing year.
    (e) Payment Amount.--The Secretary of Agriculture 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 (c) 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.
    (f) Time for Payment.--The amount determined under subsection (e) 
for a tobacco quota holder shall be paid in five equal installments 
during each of the 2003 through 2007 crops of tobacco.
    (g) Death of Tobacco Quota Holder.--If a tobacco 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 transfer to the surviving spouse or, if there is no surviving 
spouse, to the estate of the tobacco quota holder.

SEC. 103. TRANSITION PAYMENTS FOR ACTIVE TOBACCO PRODUCERS.

    (a) Payment Authority.--The Secretary of Agriculture shall use 
funds of the Commodity Credit Corporation to make transition payments 
under this section to active tobacco producers.
    (b) Application.--To receive payments under this section, a person 
shall prepare and submit to the Secretary of Agriculture an application 
at such time, in such manner, and containing such information as the 
Secretary may require, including information sufficient to demonstrate 
that the person satisfies the definition of active tobacco producer.
    (c) Total Payment Amount.--
            (1) In general.--The Secretary of Agriculture shall 
        determine the total amount to be paid to all active tobacco 
        producers 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 expressed in pounds, the total 
        amount available for payments to active tobacco producers under 
        this section shall be equal to the product obtained by 
        multiplying--
                    (A) $4 per pound; by
                    (B) the total tobacco farm marketing quotas 
                established under the Agriculture Adjustment Act of 
                1938 for the 1998 marketing year for that kind of 
                tobacco.
            (3) Marketing quotas other than poundage quotas.--For each 
        kind of tobacco for which there is a marketing quota or 
        allotment on an acreage basis, the Secretary shall convert the 
        tobacco farm marketing quotas or allotments established under 
        the Agriculture Adjustment Act of 1938 for the 1998 marketing 
        year for that kind of tobacco to a poundage basis before 
        executing the mathematical equation specified in paragraph (2).
    (d) Payment Quantity.--
            (1) In general.--The Secretary of Agriculture shall 
        determine the payment quantity of tobacco for each active 
        tobacco producer with respect to each kind of tobacco.
            (2) Poundage quota tobacco.--For each kind of tobacco for 
        which the marketing quota is expressed in pounds, the payment 
        quantity for an active tobacco producer shall be equal to the 
        average of the following:
                    (A) The July 1 effective quota for that quota 
                tobacco produced by the producer under the Agriculture 
                Adjustment Act of 1938 for the 2001 marketing year.
                    (B) The marketing quota for that quota tobacco 
                produced by the producer under the Agriculture 
                Adjustment Act of 1938 for the 2001 marketing year.
                    (C) The July 1 effective quota for that quota 
                tobacco produced by the producer under the Agriculture 
                Adjustment Act of 1938 for the 2002 marketing year.
            (3) Marketing quotas other than poundage quotas.--For each 
        kind of tobacco for which there is a marketing quota or 
        allotment on an acreage basis, the payment quantity for an 
        active tobacco producer shall be equal to the average of the 
        actual pounds of that kind of tobacco produced by the active 
        tobacco producer for the 2001 and 2002 marketing years.
    (e) Payment Amount.--
            (1) All tobacco producers.--The Secretary of Agriculture 
        shall make payments to each active tobacco producer with 
        respect to a kind of tobacco under this section in a total 
        amount that bears the same ratio to the amount determined by 
        the Secretary under subsection (c) with respect to that kind of 
        tobacco as the payment quantity of the active tobacco producer 
        with respect to that kind of tobacco bears to the payment 
        quantities of all active tobacco producers with respect to that 
        kind of tobacco.
            (2) Producers who forgo obtaining tobacco production 
        license.--If an active tobacco producer who is entitled to 
        transition payments under this section with respect to a kind 
        of tobacco agrees to permanently forgo the opportunity to 
        obtain a tobacco production license under section 304 for the 
        same type of tobacco, the Secretary shall pay to the active 
        tobacco producer, in addition to the amount determined under 
        paragraph (1), an amount equal to the product obtained by 
        multiplying--
                    (A) $2 per pound; by
                    (B) the payment quantity of the active tobacco 
                producer with respect to that kind of tobacco.
    (f) Time for Payment.--The amount determined under subsection (e) 
for an active tobacco producer shall be paid in five equal installments 
during each of the 2003 through 2007 crops of tobacco, except that an 
active tobacco producer who is also a quota owner with a base quota 
level of 1,000 pounds or less and who no longer intends to engage in 
tobacco production may elect to receive the total amount in the first 
year after the date on which the agreement is signed.
    (g) Death of Active Tobacco Producer.--If an active tobacco 
producer who is entitled to transition 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. 104. TOBACCO PRODUCT MANUFACTURER AND IMPORTER USER FEES.

    (a) In General.--The Secretary of Agriculture shall assess an 
annual user fee, calculated in accordance with this section, upon each 
tobacco product manufacturer and tobacco product importer that sells 
tobacco products in domestic commerce in the United States. The 
assessments shall commence during calendar year 2003, based on domestic 
sales of tobacco products during fiscal year 2003.
    (b) Base Amount of User Fee for Each Class of Tobacco Product.--
            (1) The base amount of the user fee for cigarette 
        manufacturers and importers shall be $2,116,252,000.
            (2) The base amount of the user fee for small cigar 
        manufacturers and importers shall be $1,051,000.
            (3) The base amount of the user fee for large cigar 
        manufacturers and importers shall be $164,274,000.
            (4) The base amount of the user fee for snuff manufacturers 
        and importers shall be $9,920,000.
            (5) The base amount of the user fee for chewing tobacco 
        manufacturers and importers shall be $2,275,000.
            (6) The base amount of the user fee for pipe tobacco 
        manufacturers and importers shall be $1,505,000.
            (7) The base amount of the user fee for roll-your-own 
        tobacco manufacturers and importers shall be $3,231,000.
    (c) Determination of Annual User Fee for Each Class of Tobacco 
Product.--The total user fee to be assessed upon, and paid by, the 
manufacturers and importers of each class of tobacco product in each 
calendar year, as allocated pursuant to subsection (d), shall be the 
base amount for that class of tobacco product provided in subsection 
(b) multiplied by a fraction--
            (1) the numerator of which is the total volume of domestic 
        sales of that class of tobacco product in the fiscal year 
        ending on September 30 of that calendar year; and
            (2) the denominator of which is the total volume of 
        domestic sales of that class of tobacco product in fiscal year 
        2003.
    (d) Allocation of Total User Fee Amounts by Market Share--
            (1) Formula.--The user fee for each class of tobacco 
        product to be paid by each manufacturer or importer of that 
        class of tobacco product under subsection (a) shall be 
        determined in each year by multiplying--
                    (A) such manufacturer's or importer's market share, 
                as calculated with respect to the current calendar 
                year, of that class of tobacco product; by
                    (B) the total user fee amount for the current 
                calendar year, as determined under subsection (c), for 
                that class of tobacco product.
            (2) Market share defined.--In this subsection, the term 
        ``market share'' for each manufacturer or importer of a class 
        of tobacco product for the purpose of the assessment to be 
        calculated in the current calendar year shall be equal to that 
        manufacturer's or importer's respective share (expressed as a 
        decimal to the fourth place) of the total volume of domestic 
        sales of that class of tobacco product during the calendar year 
        immediately preceding the year of such assessment.
    (e) Determination of Volume of Domestic Sales.--
            (1) Based on certified reports.--The calculation of the 
        volume of domestic sales of a class of tobacco product by a 
        manufacturer or importer, and by all manufacturers and 
        importers as a group, shall be made by the Secretary of 
        Agriculture based on certified reports submitted by such 
        manufacturers and importers pursuant to subsection (f).
            (2) Measurement criteria.--For purposes of the Secretary's 
        calculations under this subsection and the certifications under 
        subsection (f), the volumes of domestic sales shall be measured 
        as follows:
                    (A) With respect to cigarettes, in terms of the 
                numbers of cigarettes sold.
                    (B) With respect to small cigars, the number of 
                cigars weighing not more than three pounds per thousand 
                sold.
                    (C) With respect to large cigars, the number of 
                cigars weighing more than three pounds per thousand 
                sold.
                    (D) With respect to other classes of tobacco 
                products, in terms of the number of pounds, or fraction 
                thereof, or these tobacco products sold.
    (f) Certification of Volume of Domestic Sales.-- Every manufacturer 
and importer of tobacco products shall submit each year a certified 
report to the Secretary of Agriculture setting forth for each class of 
tobacco products the total, for the prior year, of such manufacturer's 
or importer's domestic sales to wholesalers and retailers and directly 
to consumers. These certified reports must be submitted to the 
Secretary not later than March 1 of the year after the year for which 
the certified report is being made.
    (g) Termination.--The user fees imposed under this section shall 
terminate at the end of the fiscal year in which the Secretary of 
Agriculture determines that the Commodity Credit Corporation has been 
fully reimbursed for all expenditures made using Commodity Credit 
Corporation funds under this title.

SEC. 105. REIMBURSEMENT OF COMMODITY CREDIT CORPORATION EXPENDITURES.

    Amounts collected by the Secretary of Agriculture under section 104 
shall be used to reimburse the Commodity Credit Corporation for all 
expenditures made under this title.

                    TITLE II--TOBACCO PRICE SUPPORT

SEC. 201. AVAILABILITY OF TOBACCO PRICE SUPPORT.

    (a) New Approach to Price Support.--Section 106 of the Agricultural 
Act of 1949 (7 U.S.C. 1445) is amended to read as follows:

``SEC. 106. TOBACCO PRICE SUPPORT.

    ``(a) Price Support Rate To Reflect Cost of Production.--
            ``(1) Establishment and annual adjustment.--The price of 
        each type of tobacco produced in the United States shall be 
        supported at a rate established by the Secretary, and adjusted 
        annually, to reflect the costs of production for producers of 
        that type of tobacco.
            ``(2) Determination of cost of production.--The Secretary 
        shall use the information collection and survey resources of 
        the Economic Research Service and National Agricultural 
        Statistics Service of the Department of Agriculture to 
        determine the cost of domestic tobacco production. The Economic 
        Research Service shall reevaluate the cost-of-production 
        annually, based on the survey of factors used by the Economic 
        Research Service, which shall be conducted once every five 
        years.
    ``(b) Consideration of International Price Levels.--In establishing 
the price support rate for a type of tobacco, the Secretary shall also 
consider the international tobacco price levels.
    ``(c) Consultation.--The Secretary shall consult with the Tobacco 
Advisory Board, farm organizations, producer cooperatives and 
associations, colleges and universities in tobacco-producing States, 
and other interested persons when determining the costs of tobacco 
production and establishing or adjusting the price support rate.
    ``(d) Differences in Grade.--The Secretary may take into 
consideration differences in tobacco grades when establishing or 
adjusting the price support rate for a type of tobacco.''.
    (b) Elimination of References to Quota Tobacco in No Net Cost 
Provisions.--(1) Section 106A of the Agricultural Act of 1949 (7 U.S.C. 
1445-1) is amended as follows:
            (A) In subsection (a), by striking ``quota'' each place it 
        appears in paragraphs (4), (5), and (6).
            (B) By striking subsection (a)(7).
            (C) In subsection (d), by striking ``quota'' each place it 
        appears in paragraphs (1), (3), and (7).
            (D) In subsection (e), by striking ``quota''.
    (2) Section 106B of the Agricultural Act of 1949 (7 U.S.C. 1445-2) 
is amended as follows:
            (A) In subsection (a)(5), by striking ``, for which 
        marketing quotas are in effect or for which marketing quotas 
        are not disapproved by producers''.
            (B) In subsection (a)(8), by striking ``quota''.
            (C) In subsection (d), by striking ``quota'' each place it 
        appears in paragraphs (1)(B) and (2)(A).

SEC. 202. REPEAL OF RELATED PROVISIONS.

    (a) Parity Price Support.--Section 101 of the Agricultural 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 herein), corn'' and 
        inserting ``corn'';
            (2) by striking subsection (c);
            (3) in subsection (d)(3)--
                    (A) by striking ``, except tobacco,''; and
                    (B) by striking ``and no price support shall be 
                made available for any crop of tobacco for which 
                marketing quotas have been disapproved by producers;''; 
                and
            (4) by redesignating subsections (d) and (e) as subsection 
        (c) and (d), respectively.
    (b) Definition of Basic Agricultural Commodity.--Section 408(c) of 
the Agricultural Act of 1949 (7 U.S.C. 1428(c)) is amended by striking 
``tobacco,''.

SEC. 203. EFFECTIVE DATE.

    This title and the amendments made by this title shall apply with 
respect to the 2003 and subsequent tobacco crops.

                 TITLE III--TOBACCO PRODUCTION LICENSES

SEC. 301. DEFINITIONS OF HISTORIC TOBACCO PRODUCER AND LICENSED TOBACCO 
              PRODUCER.

    In this title:
            (1) The term ``historic tobacco producer'' means an owner, 
        operator, landlord, tenant, or sharecropper who bore, 
        individually or collectively, the risk of producing a crop of 
        tobacco on a farm for the 2002 crop year.
            (2) The term ``licensed tobacco producer'' means an owner, 
        operator, landlord, tenant, or sharecropper who holds a license 
        issued under this title--
                    (A) to plant a crop of tobacco on a farm in a 
                specified county for the 2003 or a subsequent crop 
                year; and
                    (B) to harvest and market an authorized quantity of 
                tobacco.

SEC. 302. ANNUAL ESTIMATE OF TOBACCO PURCHASE INTENTIONS.

    (a) Annual Estimate.--Not later than February 1 of each calendar 
year, the Secretary of Agriculture shall publish in the Federal 
Register an estimate of the quantity in pounds of each type of tobacco 
necessary--
            (1) to satisfy domestic use and export needs during the 
        next marketing year; and
            (2) to maintain a reasonable reserve.
    (b) Rules for Estimate.--When making an estimate under subsection 
(a), the Secretary of Agriculture shall consider--
            (1) the industry purchase estimates submitted under 
        subsection (c);
            (2) export estimates; and
            (3) an appropriate reserve stock adjustment.
    (c) Industry Purchase Estimates.--Not later than December 1 of each 
calendar year with respect to Flue-cured tobacco, and January 15 of 
each calendar year with respect to Burley tobacco or other types of 
tobacco, each domestic manufacturer of cigarettes or other type of 
domestic tobacco-product manufacturer shall submit to the Secretary of 
Agriculture a statement, by kind, of the quantity of Flue-cured 
tobacco, Burley tobacco, and other types of tobacco that the 
manufacturer intends to purchase, directly or indirectly, on the United 
States auction markets or from licensed tobacco producers during the 
next marketing year.
    (d) Failure To Submit, or Over-Declaration of, Purchase 
Intentions.--If a domestic manufacturer of cigarettes or other type of 
domestic tobacco-product manufacturer fails to submit to the Secretary 
of Agriculture purchase intentions as required under subsection (c) for 
a marketing year, but subsequently purchases tobacco on the United 
States auction markets or from licensed tobacco producers during that 
marketing year, or if a domestic manufacturer of cigarettes or other 
type of domestic tobacco-product manufacturer over-estimates such 
purchase intentions by more than 5 percent, the domestic manufacturer 
of cigarettes or other type of domestic tobacco-product manufacturer 
shall be liable for a civil penalty up to an amount determined by 
multiplying--
            (1) the quantity of tobacco involved in the violation; by
            (2) price support rate for the type of tobacco involved in 
        effect under section 106 of the Agriculture Act of 1949 at the 
        time of the violation.
    (e) Enforcement.--The Secretary of Agriculture may enforce 
subsection (d) in the courts of the United States.
    (f) Consultation With Tobacco Advisory Board.--The Secretary of 
Agriculture shall prepare the estimate under subsection (a) and 
otherwise carry out this title in consultation with the Tobacco 
Advisory Board appointed under title IV.

SEC. 303. NATIONAL TOBACCO MARKETING FACTOR.

    The national marketing factor for a type of tobacco for a crop year 
shall be the ratio of--
            (1) the aggregate quantity of that type of tobacco 
        estimated by the Secretary of Agriculture under section 302 to 
        be necessary to satisfy domestic consumption and exports of 
        tobacco for the corresponding marketing year; to
            (2) the estimated aggregate quantity of that type of 
        tobacco to be produced in the United States for that year.

SEC. 304. ISSUANCE OF TOBACCO PRODUCTION LICENSES.

    (a) Initial Issuance to Historic Tobacco Producers.--
            (1) Issuance.--
                    (A) Issuance required.--As soon as practicable 
                after the date of the enactment of this Act, the 
                Secretary of Agriculture shall issue to each historic 
                tobacco producer a tobacco production license for the 
                purpose of ensuring sufficient production of each type 
                of tobacco to satisfy annual purchase intentions for 
                that type of tobacco estimated under section 302, but 
                also preventing over-production of that type of 
                tobacco.
                    (B) Exception.--The Secretary shall not issue a 
                tobacco production license to an historic tobacco 
                producer with respect to a kind of tobacco if the 
                historic tobacco producer agreed under subsection (e) 
                of section 103 to permanently forgo the tobacco 
                production license for that type of tobacco in exchange 
                for additional transition payments under such section.
            (2) Tobacco production history.--The tobacco production 
        license issued to an historic tobacco producer under paragraph 
        (1) shall specify the tobacco production history of the 
        producer for each type of tobacco for each county in which the 
        producer bore, individually or collectively, the risk of 
        producing a crop of tobacco on a farm in the county for the 
        2002 crop year. In the case of an historic tobacco producer who 
        bore 100 percent of the risk of producing a type of tobacco on 
        a farm for the 2002 crop year, the tobacco production history 
        of the historic tobacco producer for that type of tobacco in a 
        county shall be equal to the 2002 marketing and effective quota 
        of that type tobacco produced by the producer in the county for 
        commercial use during the 2002 crop year. In the case of an 
        historic tobacco producer who bore less than 100 percent of the 
        risk of production, the Secretary of Agriculture shall adjust 
        the tobacco production history to reflect the percentage of 
        risk that was borne by the producer.
            (3) Adjustment authority.--An historic tobacco producer may 
        petition the Secretary of Agriculture to increase the tobacco 
        production history determined under paragraph (2) for the 
        producer for a type of tobacco on the grounds that the 
        producer's 2002 production under-represents the producer's 
        historic production of that type of tobacco.
            (4) Consolidation of counties.--If the initial issuance of 
        a tobacco production license to an historic tobacco producer 
        for a type of tobacco would result in the producer receiving a 
        license for that type of tobacco for more than one county, the 
        producer may elect to consolidate the licenses in a single 
        county in which the producer bore or shared in the risk of 
        producing a crop of that type of tobacco for the 2002 crop 
        year. The option to make this election shall be provided only 
        once.
    (b) Subsequent Issuance.--
            (1) In general.--If a tobacco production license is 
        surrendered or revoked, the Secretary of Agriculture shall 
        transfer the license and the corresponding tobacco production 
        history to beginning tobacco producers or licensed tobacco 
        producers in the following order of preference:
                    (A) Producers in the same county as the county in 
                which the tobacco production history was derived.
                    (B) Producers in the same State.
                    (C) Producers in counties in other States in which 
                licensed tobacco producers are operating.
            (2) Reservation for beginning producers.--In all instances 
        specified in subparagraphs (A), (B), and (C) of paragraph (1), 
        the Secretary shall reserve for beginning tobacco producers at 
        least five percent of the tobacco production history 
        surrendered or revoked under this section.
            (3) Producers who forgo obtaining tobacco production 
        license.--The tobacco production history of those historic 
        tobacco producers who agree under section 103(e) to permanently 
        forgo the opportunity to obtain a tobacco production license 
        under subsection (a) shall also be available to the Secretary 
        for distribution as provided in paragraph (1).
    (c) Limitations on Use of License.--
            (1) In general.--A tobacco production license specifying a 
        particular type of tobacco and the county in which that type of 
        tobacco may be grown may not be used as the basis to grow a 
        different type of tobacco or to grow that type of tobacco in a 
        different county.
            (2) Revocation.--Any use of a tobacco production license 
        contrary to this subsection shall result in the revocation of 
        the license.
    (d) Limitations on Sale, Lease, or Transfer of License.--
            (1) Sale prohibited.--A tobacco production license and the 
        corresponding tobacco production history may not be sold or 
        leased.
            (2) Transfer under limited circumstances.--A licensed 
        tobacco producer may not transfer a tobacco production license 
        and the corresponding tobacco production history unless--
                    (A) in the case of a licensed tobacco producer who 
                is in a partnership, the transfer is among the 
                partners; or
                    (B) in the case of a licensed tobacco producer who 
                is an individual, the transfer is made to the spouse, 
                parent, brother, sister, or natural or adopted child of 
                the licensed tobacco producer.
            (3) Revocation.--Any sale, lease, or transfer of a tobacco 
        production license or the corresponding tobacco production 
        history contrary to this subsection shall result in the 
        revocation of the license.
    (e) Surrender or Revocation of License for Non-Use.--
            (1) Surrender.--A licensed tobacco producer may surrender a 
        tobacco production license and the corresponding tobacco 
        production history to the Secretary of Agriculture at any time.
            (2) Revocation.--The Secretary of Agriculture shall revoke 
        the tobacco production license and the corresponding tobacco 
        production history of a licensed tobacco producer if the 
        licensed tobacco producer--
                    (A) fails to share, individually or collectively, 
                in 100 percent of the risk of producing a crop of 
                tobacco of the type specified in the tobacco production 
                license for any year; or
                    (B) fails to produce at least 75 percent of the 
                quantity of that type of tobacco specified in the 
                tobacco production license for two out of three years, 
                unless that Secretary determines the failure was due to 
                damaging weather or related condition.
            (3) Annual monitoring of risk.--The Secretary of 
        Agriculture, acting through the Farm Service Agency, shall 
        monitor at least five percent of all licensed tobacco producers 
        annually to ensure that  the producers comply with the risk-
sharing requirements of paragraph (2). The licensed tobacco producers 
to be monitored in a given crop year under the authority of this 
paragraph shall be selected at random. Nothing in this paragraph 
prevents the Secretary from instituting an investigation of a specific 
licensed tobacco producer if the Secretary has reasonable cause to 
believe the producer is not complying with such risk-sharing 
requirements.

SEC. 305. ANNUAL AUTHORIZED TOBACCO PRODUCTION UNDER TOBACCO PRODUCTION 
              LICENSES.

    (a) Notification of Licensed Tobacco Producers.--As soon as 
practicable after preparing the estimate required by section 302 for a 
type of tobacco for a marketing year, the Secretary of Agriculture 
shall notify each licensed tobacco producer of that type of tobacco of 
the authorized quantity of tobacco that the producer may produce in a 
county in the corresponding crop year under the tobacco production 
license.
    (b) Determination of Authorized Production Levels.--The authorized 
tobacco production level for a licensed tobacco producer for a type of 
tobacco in a county for a crop year is equal to the product of--
            (1) the tobacco production history of the producer for that 
        type of tobacco in that county; and
            (2) the national tobacco marketing factor for that year 
        determined by the Secretary of Agriculture under section 303.
    (c) Excess Production.--Except as provided in subsection (e), if a 
licensed tobacco producer harvests and markets tobacco in excess of the 
quantity specified in the producer's tobacco production license or any 
other person produces tobacco without a tobacco production license, the 
licensed tobacco producer or other person shall be liable for a civil 
penalty up to an amount determined by multiplying--
            (1) the quantity of tobacco involved in the violation; by
            (2) price support rate for the type of tobacco involved in 
        effect under section 106 of the Agriculture Act of 1949 at the 
        time of the violation.
    (d) Enforcement.--The Secretary of Agriculture may enforce 
subsection (c) in the courts of the United States.
    (e) Limited Authority To Exceed License.--If the Tobacco Advisory 
Board notifies the Secretary of Agriculture that the actual production 
of a type of tobacco for a crop year will be less than 80 percent of 
the production authorized under all licenses issued for that type of 
tobacco, the Secretary may authorize a licensed tobacco producer of 
that type of tobacco to harvest and market tobacco in excess of the 
quantity specified in the producer's tobacco production license. The 
Secretary shall establish a mechanism under which a licensed tobacco 
producer may apply for the authority to exceed the quantity specified 
in the producer's license.

SEC. 306. ASSESSMENT ON LICENSED TOBACCO PRODUCERS FOR ADMINISTRATIVE 
              COSTS.

    (a) Assessment.--Effective for the 2003 and subsequent marketing 
years for each type of tobacco covered by this title, each licensed 
tobacco producer shall remit to the Secretary a nonrefundable marketing 
assessment in an amount determined by the Secretary that, in the 
aggregate, will cover all administrative expenses incurred by the 
Secretary and the Corporation in carrying out this title.
    (b) Limitation.--The amount of the assessment imposed under this 
section shall not exceed 1 cent for each pound of covered tobacco 
produced.

SEC. 307. TERMINATION OF MARKETING QUOTA PROGRAMS AND REPEAL OF RELATED 
              PROVISIONS.

    (a) Tobacco Control Act.--The Act of April 25, 1936 (commonly known 
as the Tobacco Control Act; 7 U.S.C. 515-515k), is repealed.
    (b) Commodity Handling Orders.--Section 8c(2) of the Agricultural 
Adjustment Act (7 U.S.C. 608c(2)), reenacted with amendments by the 
Agricultural Marketing Agreement Act of 1937, is amended by striking 
``tobacco,''.
    (c) Processing Tax.--Section 9(b) of the Agricultural Adjustment 
Act (7 U.S.C. 609(b)), reenacted with amendments by the Agricultural 
Marketing Agreement Act of 1937, is amended--
            (1) in paragraph (2), by striking ``tobacco,''; and
            (2) in paragraph (6)(B)(i), by striking ``, or, in the case 
        of tobacco, is less than the fair exchange value by not more 
        than 10 per centum,''.
    (d) Burley Tobacco Import Review.--Section 3 of Public Law 98-59 (7 
U.S.C. 625) is repealed.
    (e) Declaration of Policy.--Section 2 of the Agricultural 
Adjustment Act of 1938 (7 U.S.C. 1282) is amended by striking 
``tobacco,''.
    (f) Definitions.--Section 301(b) of the Agricultural Adjustment Act 
of 1938 (7 U.S.C. 1301(b)) is amended--
            (1) in paragraph (3)--
                    (A) by striking subparagraph (C); and
                    (B) by redesignating subparagraph (D) as 
                subparagraph (C);
            (2) in paragraph (6)(A), by striking ``tobacco,'';
            (3) in paragraph (7), by striking the following:
    ``Tobacco (flue-cured), July 1-June 30;
    Tobacco (other than flue-cured), October 1-September 30);''
            (4) in paragraph (10)--
                    (A) by striking subparagraph (B); and
                    (B) by redesignating subparagraph (C) as 
                subparagraph (B);
            (5) in paragraph (11)(B), by striking ``and tobacco'';
            (6) in paragraph (12), by striking ``tobacco,'';
            (7) in paragraph (14)--
                    (A) by striking ``(A)'' in subparagraph (A); and
                    (B) by striking subparagraphs (B), (C), and (D);
            (8) by striking paragraph (15);
            (9) in paragraph (16)--
                    (A) by striking subparagraph (B); and
                    (B) by redesignating subparagraph (C) as 
                subparagraph (B);
            (10) by striking paragraph (17); and
            (11) by redesignating paragraph (16) as paragraph (15).
    (g) Parity Payments.--Section 303 of the Agricultural Adjustment 
Act of 1938 (7 U.S.C. 1303) is amended in the first sentence by 
striking ``rice, or tobacco'' and inserting ``or rice''.
    (h) Marketing Quotas.--Part I of subtitle B of title III of the 
Agricultural Adjustment Act of 1938 (7 U.S.C. 1311 et seq.) is 
repealed.
    (i) Administrative Provisions.--Section 361 of the Agricultural 
Adjustment Act of 1938 (7 U.S.C. 1361) is amended by striking 
``tobacco,''.
    (j) Adjustment of Quotas.--Section 371 of the Agricultural 
Adjustment Act of 1938 (7 U.S.C. 1371) is amended--
            (1) in the first sentence of subsection (a) by striking ``, 
        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''.
    (k) Reports and Records.--Section 373 of the Agricultural 
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.''.
    (l) Regulations.--Section 375(a) of the Agricultural Adjustment Act 
of 1938 (7 U.S.C. 1375(a)) is amended by striking ``peanuts, or 
tobacco'' and inserting ``or peanuts''.
    (m) Eminent Domain.--Section 378 of the Agricultural Adjustment Act 
of 1938 (7 U.S.C. 1378) is amended--
            (1) in the first sentence of subsection (c) by striking 
        ``and tobacco'' and inserting ``cotton''; and
            (2) by striking subsections (d), (e), and (f).
    (n) Burley Tobacco Farm Reconstitution.--Section 379 of the 
Agricultural Adjustment Act of 1938 (7 U.S.C. 1379) is amended--
            (1) in subsection (a)--
                    (A) by striking ``(a)''; and
                    (B) in paragraph (6) by striking ``, but this 
                clause (6) shall not be applicable in the case of 
                burley tobacco''; and
            (2) by striking subsections (b) and (c).
    (o) Acreage-Poundage Quotas.--Section 4 of the Act of April 16, 
1955 (Public Law 89-12; 7 U.S.C. 1314c note), is repealed.
    (p) Burley Tobacco Acreage Allotments.--The Act of July 12, 1952 (7 
U.S.C. 1315), is repealed.
    (q) Transfer of Allotments.--Section 703 of the Food and 
Agriculture Act of 1965 (7 U.S.C. 1316) is repealed.
    (r) Advance Recourse Loans.--Section 13(a)(2)(B) of the Food 
Security Improvements Act of 1986 (7 U.S.C. 1433c-1(a)(2)(B)) is 
amended by striking ``tobacco and''.
    (s) Tobacco Field Measurement.--Section 1112 of the Omnibus Budget 
Reconciliation Act of 1987 (Public Law 100-203) is amended by striking 
subsection (c).
    (t) Liability.--The amendments made by this section shall not 
affect the liability of any person under any provision of law in effect 
before the amendments take effect as provided under subsection (u).

SEC. 308. EFFECTIVE DATE.

    This title and the amendments made by this title shall apply with 
respect to the 2003 and subsequent tobacco crops.

                    TITLE IV--TOBACCO ADVISORY BOARD

SEC. 401. ESTABLISHMENT AND DUTIES OF TOBACCO ADVISORY BOARD.

    (a) Establishment.--The Secretary of Agriculture shall establish a 
permanent advisory board in the Department of Agriculture to be known 
as the Tobacco Advisory Board.
    (b) Members.--The Tobacco Advisory Board shall consist of 12 
appointed by the Secretary of Agriculture as follows:
            (1) Three licensed tobacco producers of Flue-cured tobacco.
            (2) Three licensed tobacco producers of Burley tobacco.
            (3) One licensed tobacco producer of dark-type tobacco.
            (4) One representative of United States cigarette 
        manufacturers.
            (5) One representative of United States moist snuff 
        manufacturers.
            (6) One dealer.
            (7) One representative of Flue-cured tobacco marketing 
        facilities.
            (8) One representative of Burley tobacco marketing 
        facilities.
    (c) Non-Voting Members.--The Tobacco Advisory Board shall also have 
the following non-voting members:
            (1) The Secretary of Agriculture, or an officer or employee 
        of the Department of Agriculture.
            (2) A tobacco analyst of the Department of Agriculture, 
        appointed by the Secretary of Agriculture.
            (3) The United States Trade Representative, or the designee 
        of the United States Trade Representative.
            (4) One representative from a college or university in a 
        predominately Flue-cured tobacco producing State.
            (5) One representative from a college or university in a 
        predominately Burley tobacco producing State.
    (d) Duties.--The Tobacco Advisory Board shall be responsible for--
            (1) making recommendations for modifications of the tobacco 
        price support program under section 106 of the Agriculture Act 
        of 1949;
            (2) making recommendations for modifications of the tobacco 
        production license program under title III;
            (3) determining adequate reserve stock levels for each type 
        of tobacco;
            (4) conducting oversight regarding tobacco marketing 
        issues, such as opening sales dates, marketing regulations, and 
        grading fees; and
            (5) making recommendations regarding a simplification and 
        reform of the grading system for tobacco, which the Secretary 
        of Agriculture is authorized to implement.

          TITLE V--ASSISTANCE TO TOBACCO-DEPENDENT COMMUNITIES

SEC. 501. CENTER FOR TOBACCO-DEPENDENT COMMUNITIES.

    (a) Findings.--The Congress finds the following:
            (1) The economies of many local communities are dependent 
        on tobacco production.
            (2) Many tobacco-producing communities are facing 
        significant challenges in developing non-tobacco income, and 
        remain therefore quite dependent on tobacco and vulnerable to 
        changes in the tobacco-growing industry.
            (3) Greater analysis and study is needed of economic 
        conditions in these communities in order to gain critical 
        information, including identification of the interconnections 
        among various tobacco-related activities, the degree to which 
        the economic base of these communities is diversified, and the 
        extent to which these communities are dependent on other 
        declining economic sectors.
    (b) Corporation Established.--There is authorized to be established 
a nonprofit corporation, to be known as the ``Center for Tobacco-
Dependent Communities'', which will not be an agency or establishment 
of the United States Government. The Center shall be subject to the 
provisions of this section, and (to the extent consistent with this 
section) to the laws and regulations applicable to nonprofit 
corporations in the State in which the corporation is established.
    (c) Board of Directors.--
            (1) The Center shall have a Board of Directors consisting 
        of 7 members. Six of the members of the Board shall be 
        appointed by the President, by and with the advice and consent 
        of the Senate, and such members shall appoint the Center's 
        Executive Director, who shall also be a member of the Board. No 
        more than 3 of the 6 members appointed by the President may be 
        members of the same political party.
            (2) The 6 members of the Board appointed by the President 
        shall be citizens of the United States who have knowledge and 
        experience regarding the matters for which the Center is 
        responsible, and who are eminent in issues related to rural 
        development (including small-crop agriculture; entrepreneurial 
        activity; and industrial, small business and community 
        development).
            (3) The members of the initial Board of Directors shall 
        serve as incorporators and shall take whatever actions are 
        necessary to establish the Center.
            (4) The term of office of each member of the Board 
        appointed by the President shall be 4 years, except that of the 
        members initially so appointed, 3 members shall serve for a 2-
        year term. Any member whose term has expired may serve until 
        such member's successor has taken office, or until the end of 
        the calendar year in which such member's term has expired, 
        whichever is earlier. Any member appointed to fill a vacancy 
        occurring prior to the expiration of the term for which such 
        member's predecessor was appointed shall be appointed for the 
        remainder of such term. No member of the Board shall be 
        eligible to serve in excess of 2 consecutive full terms.
            (5) Any vacancy in the Board shall not affect its power, 
        but shall be filled in the manner consistent with this section.
            (6) Members of the Board shall attend not less than 50 
        percent of all duly convened meetings of the Board in any 
        calendar year. A member who fails to meet the requirement of 
        the preceding sentence shall forfeit membership, and the 
        President shall appoint a new member to fill such vacancy not 
        later than 30 days after such vacancy is determined by the 
        Chairman of the Board.
            (7) Members of the Board shall annually elect 1 of their 
        members to be Chair and elect 1 or more of their members as a 
        Vice Chair or Chairs. The members of the Board shall not, by 
        reason of such membership, be officers or employees of the 
        United States. Members of the Board shall, while attending 
        meetings of the Board or while engaged in duties related to 
        such meetings or other activities of the Board pursuant to this 
        section, be entitled to receive compensation at the rate of 
        $150 per day, including traveltime. No Board member shall 
        receive compensation of more than $10,000 in any fiscal year. 
        While away from their homes or regular places of business, 
        Board members shall be allowed travel and actual, reasonable, 
        and necessary expenses.
            (8) All meetings of the Board, including any committee of 
        the Board, shall be open to the public.
    (d) Officers and Employees.--
            (1) The Center shall have a President, and such other 
        officers as may be named and appointed by the Board for terms 
        and at rates of compensation fixed by the Board. No officer or 
        employee of the Corporation may be compensated by the 
        Corporation at an annual rate of pay which exceeds the rate of 
        basic pay in effect from time to time for level I of the 
        Executive Schedule under section 5312 of title 5, United States 
        Code. No individual other than a citizen of the United States 
        may be an officer of the Center. No officer of the Center, 
        other than the Chair or a Vice Chair, may receive any salary or 
        other compensation (except for compensation for services on 
        boards of directors of other organizations that do not receive 
        funds from the Center, on committees of such boards, and in 
        similar activities for such organizations) from any sources 
        other than the Center for services rendered during the period 
        of his or her employment by the Center. Service by any officer 
        on boards of directors of other organizations,  on committees 
of such boards, and in similar activities for such organizations shall 
be subject to annual advance approval by the Board and subject to the 
provisions of the Center's Statement of Ethical Conduct. All officers 
shall serve at the pleasure of the Board.
            (2) Except as provided in subsection (c)(1), no political 
        test or qualification shall be used in selecting, appointing, 
        promoting, or taking other personnel actions with respect to 
        officers, agents, and employees of the Center.
    (e) Nonprofit and Nonpolitical Nature of the Center.--
            (1) The Center shall have no power to issue any shares of 
        stock, or to declare or pay any dividends.
            (2) No part of the income or assets of the Center shall 
        inure to the benefit of any director, officer, employee, or any 
        other individual except as salary or reasonable compensation 
        for services.
            (3) The Center may not contribute to or otherwise support 
        any political party or candidate for elective public office.
    (f) Purposes and Activities of the Center.--
            (1) In order to achieve the objectives and to carry out the 
        purposes of this section, the Center shall provide economic and 
        community development assistance for tobacco communities to 
        assist them in making the transition from tobacco-based 
        economies. The primary activities of the Center shall be 
        agricultural and entrepreneurial, and shall include outreach 
        and education to tobacco quota owners, growers and others 
        (including small communities) with limited ability to obtain 
        access to current economic development resources. In 
        particular, the Center shall provide assistance to tobacco-
        producing communities identified by the Economic Research 
        Service within the Department, with emphasis on those 
        communities that are especially dependent on tobacco production 
        for the generation of revenue.
            (2) The Center is authorized to--
                    (A) provide communities and producers with targeted 
                technical assistance;
                    (B) convene meetings and conduct workshops and 
                conferences;
                    (C) serve as a clearinghouse for exchange of 
                information regarding best industry practices;
                    (D) provide research and policy development 
                activities;
                    (E) serve as an advocate for communities making the 
                transition from tobacco-based economies;
                    (F) make grants to individuals or entities, 
                including challenge grants, community mini-grants, 
                technical assistance grants and grants for pilot 
                projects and demonstrations;
                    (G) hire or accept the voluntary services of 
                consultants, experts, advisory boards, and panels to 
                aid the Center in carrying out the purposes of this 
                section;
                    (H) accept bequests, donations, and other forms of 
                assistance; and
                    (I) take such other actions as may be necessary to 
                accomplish the purposes set forth in this section.
            (3) Nothing contained in paragraph (2) shall be construed 
        to commit the Federal Government to provide any sums for the 
        payment of any obligation of the Center.
            (4) To carry out the foregoing purposes and engage in the 
        foregoing activities, the Center shall have the usual powers 
        conferred upon a nonprofit corporation by applicable laws and 
        regulations of the State in which the corporation is 
        established, except that the Center is prohibited from owning 
        or operating any tobacco-related interest.
    (g) Annual Report.--
            (1) The Center shall submit an annual report for the 
        preceding fiscal year ending September 30 to the President for 
        transmittal to the Congress on or before the 15th day of May of 
        each year. The report shall include--
                    (A) a comprehensive and detailed report of the 
                Center's operations, activities, financial condition, 
                and accomplishments under this section and such 
                recommendations as the Center considers appropriate; 
                and
                    (B) a listing of each organization that receives a 
                grant from the Center, the purpose of such grant, and 
                the amount of each such grant.
            (2) The officers and directors of the Center shall be 
        available to testify before appropriate committees of the 
        Congress with respect to such report, the report of any audit 
        made by the Comptroller General of the United States pursuant 
        to this section, or any other matter which such committees may 
        determine.
    (h) Authorization of Appropriations.--There is authorized to be 
appropriated to the Secretary of Agriculture, from funds derived from 
the user fees imposed under section 104, $5,000,000 for each of the 
fiscal years 2003 through 2013 to provide funds for the operations and 
activities of the Center. Funds so appropriated shall remain available 
until expended. The Corporation shall establish an annual budget for 
use in allocating amounts made available to the Center under this 
section.
    (i) Financial Management and Records.--
            (1)(A) The accounts of the Center shall be audited annually 
        in accordance with generally accepted auditing standards by 
        independent certified public accountants or independent 
        licensed public accountants certified or licensed by a 
        regulatory authority of a State or other political subdivision 
        of the United States. The audits shall be conducted at the 
        place or places where the accounts of the Center are normally 
        kept. All books, accounts, financial records, reports, files, 
        and all other papers, things, or property belonging to or in 
        use by the Center and necessary to facilitate the audits shall 
        be made available to the person or persons conducting the 
        audits; and full facilities for verifying transactions with the 
        balances or securities held by depositories, fiscal agents and 
        custodians shall be afforded to such person or persons.
            (B) The report of each such independent audit shall be 
        included in the annual report required by this subsection. The 
        audit report shall set forth the scope of the audit and include 
        such statements as are necessary to present fairly the Center's 
        assets and liabilities, surplus or deficit, with an analysis of 
        the changes therein during the year, supplemented in reasonable 
        detail by a statement of the Center's expenses during the year, 
        and a statement of the sources and application of funds, 
        together with the independent auditor's opinion of such 
        statements.
            (2)(A) The financial transactions of the Center for any 
        fiscal year during which Federal funds are available to finance 
        any portion of its operations may be audited by the General 
        Accounting Office in accordance with the principles and 
        procedures applicable to commercial corporate transactions and 
        under such rules and regulations as may be prescribed by the 
        Comptroller General of the United States. Any such audit shall 
        be conducted at the place or places where accounts of the 
        Center are normally kept. The representative of the General 
        Accounting Office shall have access to all books, accounts, 
        records, reports, files, and all other papers, things, or 
        property belonging to or in use by the Center pertaining to its 
        financial transactions and necessary to facilitate the audit, 
        and they shall be afforded full facilities for verifying 
        transactions with the balances or securities held by 
        depositories, fiscal agents, and custodians. All such books, 
        accounts, records, reports, files, papers and property of the 
        Center shall remain in possession and custody of the Center.
            (B) A report of each such audit shall be made by the 
        Comptroller General to the Congress. The report to the Congress 
        shall contain such comments and information as the Comptroller 
        General may deem necessary to inform Congress of the financial 
        operations and condition of the Center, together with such 
        recommendations with respect thereto as the Comptroller General 
        may consider advisable. The report shall also show specifically 
        any program, expenditure, or other financial transaction or 
        undertaking observed in the course of the audit, which, in the 
        opinion of the Comptroller General, has been carried on or made 
        without authority of law. A copy of each report shall be 
        furnished to the President, to the Secretary, and to the Center 
        at the time submitted to the Congress.
            (3)(A) Not later than 1 year after the date of enactment of 
        this Act, the Center, in consultation with the Comptroller 
        General, and as appropriate with others, shall develop 
        accounting principles which shall be used uniformly by all 
        individuals and entities receiving funds under this section, 
        taking into account organizational differences among various 
        categories of such entities. Such principles shall be designed 
        to account fully for all funds received and expended by such 
        entities under this section.
            (B) Each individual and entity receiving funds under this 
        section shall be required--
                    (i) to keep its books, records, and accounts in 
                such form as may be required by the Center;
                    (ii)(I) to undergo a biennial audit by independent 
                certified public accountants or independent licensed 
                public accountants certified or licensed by a 
                regulatory authority of a State, which audit shall be 
                in accordance with auditing standards developed by the 
                Center, in consultation with the Comptroller General; 
                or
                    (II) to submit a financial statement in lieu of the 
                audit required by subclause (I) if the Center 
                determines that the cost burden of such audit on such 
                entity is excessive in light of the financial condition 
                of such entity; and
                    (iii) to furnish biennially to the Center a copy of 
                the audit report required pursuant to clause (ii), as 
                well as such other information regarding finances 
                (including an annual financial report) as the Center 
                may require.
                    (C) Any recipient of assistance by grant under this 
                section shall keep such records as may be reasonably 
                necessary to disclose fully the amount and the 
                disposition by such recipient of such assistance, the 
                total cost of the project or undertaking in connection 
                with which such assistance is given or used, and the 
                amount and nature of that portion of the cost of the 
                project or undertaking supplied by other sources, and 
                such other records as will facilitate an effective 
                audit.
                    (D) The Center or any of its duly authorized 
                representatives shall have access to any books, 
                documents, papers, and records of any recipient of 
                assistance for the purpose of auditing and examining 
                all funds received or expended by the recipient under 
                this section. The Comptroller General of the United 
                States or any duly authorized representatives of the 
                Comptroller General also shall have access to such 
                books, documents, papers, and records for the purpose 
                of auditing and examining all funds received or 
                expended under this section during any fiscal year for 
                which Federal funds are available to the Center.
            (4) The Center shall maintain the information described in 
        paragraph (3) at its offices for public inspection and copying 
        for at least 3 years, according to such reasonable guidelines 
        as the Center may issue. This public file shall be updated 
        regularly.
                                 <all>