HR 5035 IH

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.

JUNE 27, 2002

Mr. FLETCHER (for himself, Mr. HAYES, Mr. BISHOP, Mr. ROGERS of Kentucky, Mr. WHITFIELD, Mr. LEWIS of Kentucky, Mr. LUCAS of Kentucky, and Mr. HILLEARY) introduced the following bill; which was referred to the Committee on Agriculture

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 2002'.

(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. Termination of marketing quota programs and repeal of related provisions.

Sec. 307. 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 effective and marketing quotas for that quota tobacco produced by the producer under the Agriculture Adjustment Act of 1938 for the 2001 and 2002 marketing years.

(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. 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,'

(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 `peanuts, or tobacco' and inserting `or peanuts'; and

(2) in the first sentence of subsection (b), by striking `peanuts or tobacco' and inserting `or peanuts'.

(k) REPORTS AND RECORDS- Section 373 of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1373) is amended--

(1) by striking `peanuts, or tobacco' each place it appears in subsections (a) and (b) and inserting `or peanuts'; and

(2) in subsection (a)--

(A) in the first sentence by striking `all persons engaged in the business of redrying, prizing, or stemming tobacco for producers,'; and

(B) in the last sentence by striking `$500' and all that follows through the period at the end of the sentence and inserting `$500.'.

(l) REGULATIONS- Section 375(a) of the 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 `cotton, tobacco, and peanuts' and inserting `cotton and peanuts'; and

(2) by striking subsections (d), (e), and (f).

(n) BURLEY TOBACCO FARM RECONSTITUTION- Section 379 of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1379) is amended--

(1) in subsection (a)--

(A) by striking `(a)'; and

(B) in paragraph (6) by striking `, but this clause (6) shall not be applicable in the case of burley tobacco'; and

(2) by striking subsections (b) and (c).

(o) ACREAGE-POUNDAGE QUOTAS- Section 4 of the Act of April 16, 1955 (Public Law 89-12; 7 U.S.C. 1314c note), is repealed.

(p) BURLEY TOBACCO ACREAGE ALLOTMENTS- The Act of July 12, 1952 (7 U.S.C. 1315), is repealed.

(q) TRANSFER OF ALLOTMENTS- Section 703 of the Food and Agriculture Act of 1965 (7 U.S.C. 1316) is 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. 307. 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.

END