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[Senate Report 110-512]
[From the U.S. Government Publishing Office]

110th Congress 
 2d Session                      SENATE                          Report
                                                                110-512
_______________________________________________________________________

                                     

                                                      Calendar No. 1095

                    TRUTH IN CIGARETTE LABELING ACT

                               __________

                              R E P O R T

                                 OF THE

           COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                                   on

                                S. 2685

                                     

  September 26 (legislative day, September 17), 2008.--Ordered to be 
                                printed

       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
                       one hundred tenth congress
                             second session

                   DANIEL K. INOUYE, Hawaii, Chairman
JOHN D. ROCKEFELLER IV, West         KAY BAILEY HUTCHISON, Texas
    Virginia                         TED STEVENS, Alaska
JOHN F. KERRY, Massachusetts         JOHN McCAIN, Arizona
BYRON L. DORGAN, North Dakota        OLYMPIA J. SNOWE, Maine
BARBARA BOXER, California            GORDON H. SMITH, Oregon
BILL NELSON, Florida                 JOHN ENSIGN, Nevada
MARIA CANTWELL, Washington           JOHN E. SUNUNU, New Hampshire
FRANK R. LAUTENBERG, New Jersey      JIM DeMINT, South Carolina
MARK PRYOR, Arkansas                 DAVID VITTER, Louisiana
THOMAS CARPER, Delaware              JOHN THUNE, South Dakota
CLAIRE McCASKILL, Missouri           ROGER F. WICKER, Mississippi
AMY KLOBUCHAR, Minnesota

          Margaret Cummisky, Staff Director and Chief Counsel
         Lila Helms, Deputy Staff Director and Policy Director
       Jean Toal Eisen, Senior Advisor and Deputy Policy Director
     Christine Kurth, Republican Staff Director and General Counsel
                Paul J. Nagle, Republican Chief Counsel
             Mimi Braniff, Republican Deputy Chief Counsel

                                                      Calendar No. 1095
110th Congress                                                   Report
                                 SENATE
 2d Session                                                     110-512

======================================================================

 
                    TRUTH IN CIGARETTE LABELING ACT

                                _______
                                

  September 26 (legislative day, September 17), 2008.--Ordered to be 
                                printed

                                _______
                                

       Mr. Inouye, from the Committee on Commerce, Science, and 
                Transportation, submitted the following

                                 REPORT

                         [To accompany S. 2685]

    The Committee on Commerce, Science, and Transportation, to 
which was referred the bill (S. 2685) to prohibit cigarette 
manufacturers from making claims or representations based on 
data derived from the cigarette testing method established by 
the Federal Trade Commission, having considered the same, 
reports favorably thereon without amendment and recommends that 
the bill do pass.

                          PURPOSE OF THE BILL

  S. 2685 would prohibit cigarette manufacturers from using the 
modified Cambridge Filter method, adopted by the Federal Trade 
Commission (FTC or Commission) and also known as the FTC 
method, as the basis for making representations or claims about 
the nicotine and tar content of their products.

                          BACKGROUND AND NEEDS

  Development of the FTC Method. Before a standardized 
procedure for testing cigarette yields existed, cigarette 
manufacturers started advertising their products' tar and 
nicotine content. In 1955, the FTC responded to these practices 
by publishing cigarette advertising guides that banned claims 
that a specific cigarette brand had low tar or nicotine--or had 
lower tar or nicotine than another brand--if no scientific 
evidence validated the claim. Contradicting the FTC's 
instruction, manufacturers continued to advertise tar numbers, 
producing a host of inconsistent product assertions that failed 
to equip consumers with an ability to accurately assess 
different cigarette tar deliveries. In 1960, after talks with 
the Commission, industry agreed to halt tar and nicotine 
advertising.
  In 1964, the U.S. Department of Health and Human Services 
issued the first Surgeon General's report on the health risks 
of smoking. The report concluded that cigarette smoking was a 
cause of lung cancer in men. Two years later, the Public Health 
Service announced that most scientific evidence suggested that 
lower levels of tar and nicotine would produce a less harmful 
effect on consumers. In 1966, the FTC initiated two actions to 
encourage manufacturers to disclose comparative tar and 
nicotine yield information to consumers. First, the Commission 
lifted the ban on nicotine and tar advertising but made future 
industry factual statements conditional: Statements would be 
required to support tests conducted in keeping with the 
Cambridge Filter method, and they could not include assertions 
of reduced health hazards. Second, the Commission authorized 
the creation of a laboratory designed to analyze cigarette 
smoke and sought public comment on suggested changes to the 
Cambridge Filter method. Analysts often refer to the modified 
Cambridge Filter method adopted by the Commission as the ``FTC 
method.''
  The FTC method was designed to obtain uniform and 
standardized data about tar and nicotine yields of cigarette 
smoke. It was not designed to replicate human smoking. 
According to the 1967 FTC publication, ``Cigarette Testing and 
the Federal Trade Commission: A Historical Overview,'' the 
purpose of the cigarette testing was ``not to determine the 
amount of `tar' and nicotine inhaled by any human smoker, but 
rather to determine the amount of tar and nicotine generated 
when a cigarette is smoked by machine in accordance with the 
prescribed method.'' Changes in cigarette technology have 
created ways to lower a cigarette's tar and nicotine ratings 
when tested by the FTC method. These have included: (1) Adding 
filters that trapped some tobacco smoke particles before they 
reached the machine; (2) wrapping the tobacco plug in paper 
with a quick burning rate; and (3) inserting ventilation holes 
around the filter's circumference, creating an ``aeration'' 
effect in which air is absorbed into the filter generating a 
diluted mixture of air and smoke which produces lower tar and 
nicotine ratings.
  According to the FTC, disclosures of tar and nicotine ratings 
in advertising by manufacturers are voluntary. No formal legal 
requirement obligates companies to disclose the tar and 
nicotine ratings in their advertisements. The disclosure of the 
ratings in advertisements is the result of a voluntary 
agreement in 1971 among five of the then-largest companies and 
three smaller companies. Due to the voluntary agreement, the 
Commission suspended indefinitely a rulemaking proceeding that 
would have required such disclosures.
  FTC Critique of the Method. On several occasions, the 
Commission has questioned the applicability of its standardized 
cigarette testing method and has invited public comment on 
proposed revisions to its test. A lack of consensus among the 
commenters, however, in addition to related unresolved 
scientific issues, have kept the Commission from altering the 
testing protocol. Chairman Kovacic in his testimony before the 
Commerce Committee in November 2007 noted, ``Despite these 
dramatic decreases in machine-measured yields, the Commission 
has been concerned for some time that the current test method 
may be misleading to individual consumers who rely on the 
ratings it produces as indicators of the amount of tar and 
nicotine they actually will get from their cigarettes. In fact, 
the current ratings tend to be relatively poor predictors of 
tar and nicotine exposure. This appears to be primarily due to 
compensation--or the tendency of smokers of lower rated 
cigarettes to take bigger, deeper, or more frequent puffs, or 
otherwise alter their smoking behavior in order to obtain the 
dosage of nicotine they need. Such variations in the way people 
smoke can have significant effects on the amount of tar, 
nicotine, and carbon monoxide they get from any particular 
cigarette.''
  Smokers' Perceptions: Effects of Marketing Practices. Despite 
scientific evidence revealing that ``light'' cigarettes have 
neither lowered the disease risk of smokers nor created a 
public health benefit, many smokers assume that light or ultra 
light cigarettes present less of a health risk than the risk 
associated with other cigarettes. Many smokers also 
misapprehend ``light'' and ``ultra light'' cigarettes as 
exposing them to lower nicotine and tar levels. For example, a 
July 1998 survey in the American Journal of Preventive Medicine 
indicated that many smokers choose light or ultra light 
cigarettes in order to reduce smoking risks. Almost three-
fourths of the ultra light smokers said they smoked ultra light 
cigarettes to reduce their intake of tar and nicotine. Thirty 
nine percent of light smokers and fifty eight percent of ultra 
light smokers said they smoke the lighter brands in order to 
reduce risks without having to quit smoking entirely. A 1986 
study by the Centers for Disease Control and Prevention (CDC) 
found that smokers of light/ultra light cigarettes had a lower 
likelihood of quitting than smokers of regular cigarettes. The 
study also found that smokers who had never changed to low tar 
or nicotine brands had a higher likelihood of quitting than 
smokers who had changed to lower tar brands.
  Health Advocacy Community's Critique of Marketing Practices. 
Health experts and consumer safety advocates have criticized 
the use of the words ``light'' and ``low tar'' as inaccurate. 
The Campaign for Tobacco-Free Kids points to a distinction 
between food advertising and cigarette advertising: ``Foods 
with descriptors such as `light' or `low in fat' are required 
by the Food and Drug Administration (FDA) to provide an actual 
benefit to consumers--a specified reduction in calorie content 
or fat grams. With the absence of FDA regulation over tobacco 
products, there is no equivalent protection for consumers of 
cigarettes branded as `light' or `low tar.''' The National 
Cancer Institute (NCI) has affirmed that the FTC's testing 
method does not provide smokers with meaningful information 
regarding the amount of tar and nicotine smokers will 
realistically intake from a cigarette.
  In addition, the NCI has concluded that light cigarettes 
provide no benefit to smokers' health: ``According to the NCI 
monograph Risks Associated with Smoking Cigarettes with Low 
Machine-Measured Yields of Tar and Nicotine, people who switch 
to light cigarettes from regular cigarettes are likely to 
inhale the same amount of hazardous chemicals, and they remain 
at high risk for developing smoking-related cancers and other 
diseases.'' Finally, according to the NCI, no evidence exists 
showing that switching to light or ultra-light cigarettes aids 
smokers in quitting.

                         SUMMARY OF PROVISIONS

  S. 2685 would mandate that a cigarette manufacturer cannot 
make any claims or representations based on data derived from a 
cigarette testing method established by the FTC. A violation of 
the prohibition would be treated as a violation of a rule 
defining an unfair or deceptive act or practice, which would 
allow the Commission to assess civil penalties of up to $11,000 
per day per violation.

                          LEGISLATIVE HISTORY

  On March 3, 2008, Senator Lautenberg introduced S. 2685, the 
Truth in Cigarette Labeling Act, which was referred to the 
Committee on Commerce, Science and Transportation. Senators 
Snowe and Clinton cosponsored the measure. The Commerce 
Committee held a hearing titled the ``Accuracy of the FTC Tar 
and Nicotine Cigarette Rating System'' on November 13, 2007. At 
the hearing, the Committee explored the FTC testing method for 
determining cigarettes' tar and nicotine ratings, tobacco 
companies' marketing of light cigarettes to Americans, and the 
public health implications of changes in cigarette design. FTC 
Chairman William Kovacic, the NCI, the CDC and other 
stakeholders testified at the hearing.
  On May 15, 2008, the Committee met in open executive session 
to consider S. 2685, as introduced. The measure was accepted by 
voice vote. Without objection, the Committee ordered the bill 
to be reported favorably without amendment.
  Staff assigned to this bill are David Strickland, Democratic 
Senior Counsel, Jana Fong-Swamidoss, Democratic Counsel, and 
Rebecca Hooks, Republican Professional Staff member.

                            ESTIMATED COSTS

  In accordance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate and section 403 of the 
Congressional Budget Act of 1974, the Committee provides the 
following cost estimate, prepared by the Congressional Budget 
Office:

                                                     June 25, 2008.
Hon. Daniel K. Inouye,
Chairman, Committee on Commerce, Science, and Transportation,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 2685, the Truth in 
Cigarette Labeling Act of 2008.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Susan Willie.
            Sincerely,
                                                   Peter R. Orszag.
    Enclosure.

S. 2685--Truth in Cigarette Labeling Act of 2008

    S. 2685 would prohibit cigarette manufacturers from making 
certain claims based on data derived from a cigarette testing 
method developed by the Federal Trade Commission (FTC). The 
bill would authorize the FTC to enforce this new prohibition.
    The cigarette testing method developed by the FTC is used 
by manufacturers to determine the relative levels of tar, 
nicotine, and carbon monoxide produced by a cigarette. Based on 
the results of those tests, cigarette manufacturers make claims 
about a product that it is ``low tar'' or ``light,'' for 
example. S. 2685 would prohibit this practice.
    Based on information from the FTC, CBO estimates that 
implementing the provisions of S. 2685 would not significantly 
increase spending subject to appropriation. Under current law, 
the FTC enforces certain laws governing both warnings printed 
on cigarette labels and advertising claims made by cigarette 
manufacturers, including claims about tar and nicotine ratings. 
The new prohibition created by S. 2685 would not add a 
significant new burden to the FTC's enforcement efforts.
    Enacting S. 2685 could increase federal revenues from civil 
monetary penalties on cigarette manufacturers for violations of 
the new prohibition; CBO estimates that the effect would not be 
significant. Enacting the bill would not affect direct 
spending.
    The bill would impose a private-sector and 
intergovernmental mandate as defined in the Unfunded Mandates 
Reform Act (UMRA) on manufacturers of cigarettes and certain 
other tobacco products, including certain Indian tribes, by 
prohibiting them from making any claims or representations 
based on the level of tar and nicotine as measured by the FTC 
test method. Based on information from tobacco companies and 
tribal manufacturers of cigarettes, CBO expects that the 
aggregate costs of complying with the mandate would not exceed 
the annual thresholds established in UMRA ($136 million in 2008 
for private-sector mandates and $68 million in 2008 for 
intergovernmental mandates, adjusted annually for inflation).
    The CBO staff contacts for this estimate are Susan Willie 
(for federal costs), Elizabeth Cove (for the state and local 
impact), and MarDestinee Perez (for the impact on the private 
sector). The estimate was approved by Theresa Gullo, Deputy 
Assistant Director for Budget Analysis.

                      REGULATORY IMPACT STATEMENT

  In accordance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee provides the 
following evaluation of the regulatory impact of the 
legislation, as reported:

Number of persons covered

  The prohibition on basing advertisements of cigarettes on the 
FTC method would affect every cigarette consumer who relied 
upon those statements when purchasing their cigarettes.

Economic impact

  S. 2685 could impact sales of light cigarettes in that the 
marketing of the product would have to change to reflect the 
prohibition of the usage of the FTC method.

Privacy

  S. 2685 would not impact the privacy of individuals.

Paperwork

  It is not expected that the legislation would increase the 
paperwork requirements of the FTC.

                   CONGRESSIONALLY DIRECTED SPENDING

  In compliance with paragraph 4(b) of rule XLIV of the 
Standing Rules of the Senate, the Committee provides that no 
provisions contained in the bill, as reported, meet the 
definition of congressionally directed spending items under the 
rule.

                      SECTION-BY-SECTION ANALYSIS

Section 1. Short title

  Section 1 would provide that the legislation may be cited as 
the ``Truth in Cigarette Labeling Act of 2008.''

Section 2. Prohibition on claims regarding tar or nicotine yield levels 
        of cigarettes

  Subsection (a) of section 2 would set forth a number of 
Congressional findings related to the marketing of cigarettes 
using the FTC method for testing tar and nicotine intake.
  Subsection (b) of section 2 would define the terms 
``cigarette'' and ``roll-your-own-tobacco''. Cigarette would be 
given the same definition as in section 3(1) of the Federal 
Cigarette Labeling and Advertising Act (15 U.S.C. 1332(1)) but 
also would include tobacco, in any form, that is functional in 
the product, which, because of its appearance, the type of 
tobacco used in the filler, or its packaging and labeling, is 
likely to be offered to, or purchased by, consumers as a 
cigarette or as roll-your-own tobacco. Roll-your-own-tobacco 
would be defined as any tobacco which, because of its 
appearance, type, packaging, or labeling, is suitable for use 
and likely to be offered to, or purchased by, consumers as 
tobacco for making cigarettes.
  Subsection (c) of section 2 would prohibit cigarette 
manufacturers from making claims or any other representations 
based on data derived from a cigarette testing method 
established by the FTC and in effect on the day before the date 
of enactment of this Act. The subsection also would establish 
that a violation of this prohibition be treated as a violation 
of a rule defining an unfair or deceptive act or practice 
prescribed under section 18(a)(1)(B) of the Federal Trade 
Commission Act, and that the FTC shall enforce section 2 in the 
same manner, by the same means, and with the same jurisdiction, 
powers, and duties as though all applicable terms and 
provisions of the Federal Trade Commission Act were 
incorporated into and made a part of section 2.

                        CHANGES IN EXISTING LAW

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, the Committee states that the 
bill as reported would make no change to existing law.

                                  
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