II

106TH CONGRESS

1ST SESSION S. 584

To amend title XIX of the Social Security Act to permit the Secretary

of Health and Human Services to waive recoupment under the medicaid

program of certain tobacco-related funds received by a State if a State

uses a portion of such funds for tobacco use prevention and health

care and early learning programs.

IN THE SENATE OF THE UNITED STATES

MARCH 10, 1999

Mr. KENNEDY (for himself and Mr. LAUTENBERG) introduced the following

bill; which was read twice and referred to the Committee on Finance

A BILL

To amend title XIX of the Social Security Act to permit

the Secretary of Health and Human Services to waive

recoupment under the medicaid program of certain tobacco-related funds received by a State if a State uses

a portion of such funds for tobacco use prevention and

health care and early learning programs.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Children’s Smoking

5 Prevention, Health, and Learning Trust Fund Act of

6 1999’’.
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1 SEC. 2. AUTHORITY TO WAIVE RECOUPMENT UNDER THE

2 MEDICAID PROGRAM OF TOBACCO-RELATED

3 FUNDS.

4 (a) IN GENERAL.—Section 1903(d)(3) of the Social

5 Security Act (42 U.S.C. 1396b(d)(3)) is amended—

6 (1) by inserting ‘‘(A)’’ before ‘‘The’’; and

7 (2) by adding at the end the following:

8 ‘‘(B) Subparagraph (A) and paragraph (2)(B) shall

9 not apply to any amount recovered or paid to a State as

10 part of the comprehensive settlement of November 1998

11 between manufacturers of tobacco products (as defined in

12 section 5702(d) of the Internal Revenue Code of 1986)

13 and States, or as part of any individual State settlement

14 or judgment reached in litigation initiated or pursued by

15 a State against one or more such manufacturers, if the

16 Secretary finds that the following conditions are met:

17 ‘‘(i) Subject to subparagraph (C), with respect

18 to any fiscal year, the State demonstrates, through

19 a plan submitted to, and approved by, the Secretary,

20 that 50 percent of amounts so recovered or paid (in

21 this subparagraph referred to as the ‘Federal share’)

22 during the fiscal year shall be expended consistent

23 with the following:

24 ‘‘(I) At least 35 percent of the Federal

25 share shall be expended on one or more of the
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1 tobacco use prevention programs described in

2 subparagraph (D).

3 ‘‘(II) Subject to subparagraph (F), the re4 mainder of the Federal share (determined after

5 the application of subclause (I)) shall be ex6 pended on one or more of the health care and

7 early learning programs described in subpara8 graph (E).

9 ‘‘(ii) With respect to any fiscal year—

10 ‘‘(I) the level of funds expended by the

11 State (determined without regard to any por12 tion of the Federal share expended by the

13 State) for any program on which a portion of

14 the Federal share is to be expended is not less

15 than the level of funds expended by the State

16 during the most recent State fiscal year ending

17 before the date on which the State first recov18 ered or received any funds pursuant to a settle19 ment or judgment described in this subpara20 graph; and

21 ‘‘(II) an amount equal to the Federal

22 share is used to supplement and not supplant

23 the level of funds expended by the State for any

24 such program during such State fiscal year.
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1 ‘‘(iii) The State files with the Secretary an an2 nual report that, with respect to a fiscal year—

3 ‘‘(I) details how the Federal share of the

4 amounts so recovered or paid has been spent

5 consistent with clause (i); and

6 ‘‘(II) identifies, with respect to each pro7 gram funded in accordance with clause (i) (and,

8 if applicable, subparagraph (F))—

9 ‘‘(aa) the amount of additional ex10 penditures made for each such program;

11 ‘‘(bb) the number of additional indi12 viduals participating in the program and

13 the nature of the services provided; and

14 ‘‘(cc) such other information as the

15 Secretary determines is necessary.

16 ‘‘(C) If any State can demonstrate to the Secretary

17 that the Federal share of the total amount expended by

18 the State under this title to treat tobacco-induced illnesses

19 is less than 50 percent of the total amount recovered or

20 paid to the State as a result of a settlement or judgment

21 described in subparagraph (B), clause (i) of that subpara22 graph shall be applied by substituting for ‘50 percent’ the

23 percentage so demonstrated by the State.
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1 ‘‘(D) For purposes of subparagraph (B)(i)(I), tobacco

2 use prevention programs described in this subparagraph

3 are the following:

4 ‘‘(i) Counter-advertising programs to discourage

5 tobacco use.

6 ‘‘(ii) Smoking cessation programs.

7 ‘‘(iii) School-based tobacco use prevention pro8 grams.

9 ‘‘(iv) Community-based tobacco use prevention

10 programs.

11 ‘‘(v) Programs to enforce prohibitions on the

12 sale of tobacco products to youth.

13 ‘‘(vi) Other State-initiated programs to deter

14 tobacco use and assist individuals suffering from

15 nicotine addiction or smoking-induced disease.

16 ‘‘(E) For purposes of subparagraph (B)(i)(II), health

17 care and early learning programs described in this sub18 paragraph are the following:

19 ‘‘(i) Community health centers that receive

20 funds under section 330 of the Public Health Serv21 ice Act (42 U.S.C. 254b).

22 ‘‘(ii) Prescription drug assistance programs to

23 help senior citizens pay for pharmaceuticals.

24 ‘‘(iii) The State Children’s Health Insurance

25 Program established under title XXI.
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1 ‘‘(iv) Maternal and child health services pro2 vided under title V.

3 ‘‘(v) The Child Care and Development Block

4 Grant Act of 1990 (42 U.S.C. (42 U.S.C. 9858 et

5 seq.).

6 ‘‘(vi) The Safe and Drug-Free Schools and

7 Communities Program under title IV of the Elemen8 tary and Secondary Education Act of 1965 (20

9 U.S.C. 7101 et seq.).

10 ‘‘(vii) State-initiated programs approved by the

11 Secretary to—

12 ‘‘(I) make health insurance available to the

13 uninsured;

14 ‘‘(II) provide health services to the under15 served or uninsured;

16 ‘‘(III) reduce public health risks; or

17 ‘‘(IV) support medical research and expand

18 access to clinical trials for individuals with seri19 ous illnesses.

20 ‘‘(viii) State-initiated programs approved by the

21 Secretary to—

22 ‘‘(I) award grants to communities for the

23 creation, improvement, and expansion of early

24 childhood education opportunities; or
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1 ‘‘(II) serve the educational and develop2 mental needs of children 5 years of age or

3 younger.

4 ‘‘(F) In the case of any State that is a tobacco-grow5 ing State, the State may use up to 25 percent of the re6 mainder of the Federal share (determined after the appli7 cation of subparagraph (B)(i)(I)) for programs to assist

8 tobacco farmers and tobacco workers who have sustained

9 an adverse financial impact as a direct result of a settle10 ment or judgment described in subparagraph (B).

11 ‘‘(G) Amounts provided to a State under any provi12 sion of law referred to in subparagraph (D) or (E) shall

13 not be reduced solely as a result of the availability of funds

14 recovered or received pursuant to a settlement or judg15 ment described in subparagraph (B).

16 ‘‘(H) If the Secretary determines that amounts de17 scribed in subparagraph (B)(i) are not being spent in ac18 cordance with subparagraphs (D), (E), and, as applicable,

19 (C) and (F), or that a State has failed to comply with

20 the requirements of clauses (ii) and (iii) of subparagraph

21 (B), subparagraph (A) and paragraph (2)(B) shall apply

22 to such amounts and the Secretary shall take appropriate

23 action to offset such amounts from the amounts otherwise

24 paid to the State under this title.’’.
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1 (b) PROHIBITION ON PAYMENT FOR ADMINISTRA2 TIVE EXPENSES INCURRED IN PURSUING TOBACCO LITI3 GATION.—Section 1903(i) of the Social Security Act (42

4 U.S.C. 1396b(i)) is amended—

5 (1) in paragraph (18), by striking the period

6 and inserting ‘‘; or’’; and

7 (2) by inserting after paragraph (18) the fol8 lowing:

9 ‘‘(19) with respect to any amount expended on

10 administrative costs to initiate or pursue litigation

11 against one or more manufacturers of tobacco prod12 ucts (as defined in section 5702(d) of the Internal

13 Revenue Code of 1986).’’.

14 (c) EFFECTIVE DATE.—The amendments made by

15 this section apply to amounts recovered or paid to a State

16 before, on, or after the date of enactment of this Act.

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