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[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 1889 Placed on Calendar Senate (PCS)]

                                                       Calendar No. 333

105th CONGRESS

  2d Session

                                S. 1889

_______________________________________________________________________

                                 A BILL

To reduce tobacco use by children and others through an increase in the 
 cost of tobacco products, the imposition of advertising and marketing 
limitations, assuring appropriate tobacco industry oversight, expanding 
the availability of tobacco use cessation programs, and implementing a 
 strong public health prevention and education strategy that involves 
      the private sector, schools, States, and local communities.

_______________________________________________________________________

                             April 1, 1998

            Read the second time and placed on the calendar

                                                       Calendar No. 333
105th CONGRESS
  2d Session
                                S. 1889

To reduce tobacco use by children and others through an increase in the 
 cost of tobacco products, the imposition of advertising and marketing 
limitations, assuring appropriate tobacco industry oversight, expanding 
the availability of tobacco use cessation programs, and implementing a 
 strong public health prevention and education strategy that involves 
      the private sector, schools, States, and local communities.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             March 31, 1998

  Mr. Harkin (for himself, Mr. Chafee, and Mr. Graham) introduced the 
             following bill; which was read the first time

                             April 1, 1998

            Read the second time and placed on the calendar

_______________________________________________________________________

                                 A BILL

 
To reduce tobacco use by children and others through an increase in the 
 cost of tobacco products, the imposition of advertising and marketing 
limitations, assuring appropriate tobacco industry oversight, expanding 
the availability of tobacco use cessation programs, and implementing a 
 strong public health prevention and education strategy that involves 
      the private sector, schools, States, and local communities.

    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 ``Kids Deserve 
Freedom From Tobacco Act of 1998'' or the ``KIDS Act''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Purpose.
Sec. 4. Scope and effect.
Sec. 5. Definitions.
            TITLE I--INCENTIVES TO REDUCE YOUTH TOBACCO USE

                Subtitle A--National Tobacco Trust Fund

Sec. 101. Establishment.
Sec. 102. Payments by tobacco product manufacturers.
Sec. 103. Enforcement.
                     Subtitle B--Payments to States

Sec. 111. Payments to States.
Sec. 112. State bonus payments.
            Subtitle C--Annual Youth Tobacco Use Reductions

Sec. 131. Purpose.
Sec. 132. Child tobacco use surveys.
Sec. 133. Reduction in underage tobacco product usage.
Sec. 134. Noncompliance.
Sec. 135. Enforcement.
              TITLE II--REGULATION OF THE TOBACCO INDUSTRY

   Subtitle A--Food and Drug Administration Jurisdiction and General 
                               Authority

Sec. 201. Statement of general authority.
Sec. 202. Nonapplicability to other drugs or devices.
Sec. 203. Conforming amendments to confirm jurisdiction.
Sec. 204. General rule.
Sec. 205. Safety and efficacy standard and recall authority.
               Subtitle B--Regulation of Tobacco Products

Sec. 211. Performance standards.
Sec. 212. Application of Federal Food, Drug, and Cosmetic Act to 
                            tobacco products.
``SUBCHAPTER F--TOBACCO PRODUCT DEVELOPMENT, MANUFACTURING, AND ACCESS 
              RESTRICTIONS, LICENSING, AND ANTI-SMUGGLING

   ``Part A--Tobacco Product Development, Manufacturing, and Access 
                              Restrictions

        ``Sec. 570. Promulgation of regulations.
        ``Sec. 571. Mail-order sales.
        ``Sec. 572. Tobacco product warnings and packaging.
        ``Sec. 573. General responsibilities of manufacturers, 
                            distributors and retailers.
        ``Sec. 574. Disclosure and reporting of tobacco and nontobacco 
                            ingredients and constituents.
        ``Sec. 575. Reduced risk products.
        ``Sec. 576. Access to company information.
        ``Sec. 577. Oversight of tobacco product manufacturing.
        ``Sec. 578. Preservation of State and local authority.
        ``Sec. 579. General responsibilities of manufacturers, 
                            distributors and retailers.
Sec. 213. Funding.
Sec. 214. Repeals.
    Subtitle C--Manufacturer and Product Seller Licensing and Anti-
                               Smuggling

Sec. 221. Definitions.
Sec. 222. Minimal Federal licensing and registration program.
Sec. 223. Licensing and retailer registration.
Sec. 224. Unlawful acts.
Sec. 225. Penalties and compromise of liability.
Sec. 226. General administrative provisions.
Sec. 227. Funding.
Sec. 228. Transitional rules.
Sec. 229. Rules and regulations.
Sec. 230. Severability.
Sec. 231. Effect on State or local law.
Sec. 232. Amendment to Contraband Cigarette Trafficking Act.
                         Subtitle D--Penalties

Sec. 241. Penalties.
Sec. 242. Application of penalties with respect to violations of 
                            certain licensing provisions.
                  TITLE III--PUBLIC HEALTH INITIATIVES

           Subtitle A--State-Federal Anti-Tobacco Partnership

            Chapter 1--School- and Community-Based Programs

Sec. 301. School- and community-based programs.
Sec. 302. National event sponsorship program.
                Chapter 2--Counter-advertising Programs

Sec. 311. Federal-State counter-advertising programs.
                 Chapter 3--National Cessation Program

Sec. 321. National tobacco cessation program.
Sec. 322. Reports, data, and audits.
                  Subtitle B--Health Research Program

              Chapter 1--National Fund for Health Research

Sec. 331. Establishment of National Fund for Health Research.
                 Chapter 2--Tobacco Prevention Research

Sec. 335. National Tobacco Research Task Force.
Sec. 336. Research activities.
Sec. 337. Tobacco prevention database and evaluation.
                  Subtitle C--Miscellaneous Provisions

Sec. 341. Limitation on administrative costs.
Sec. 342. Withholding. 
Sec. 343. Nondiscrimination.
Sec. 344. International tobacco control.
           TITLE IV--LIABILITY PROVISIONS AND CONSENT DECREES

Sec. 400. Dismissal of and limitations on civil actions.
                    Subtitle A--Liability Provisions

Sec. 401. National victims' compensation fund.
Sec. 402. Rule of construction.
Sec. 403. Attorney's fees and expenses.
Sec. 404. Public disclosure of tobacco industry documents.
                      Subtitle B--Consent Decrees

Sec. 411. Consent decrees.
    TITLE V--TOBACCO FARM FAMILY AND COMMUNITY ASSISTANCE TRUST FUND

Sec. 501. Tobacco farm family and community assistance trust fund.
       TITLE VI--REDUCING EXPOSURE TO ENVIRONMENTAL TOBACCO SMOKE

Sec. 601. Education and outreach.
Sec. 602. Involuntary exposure to environmental tobacco smoke.
Sec. 603. Coverage of Congressional buildings.
                  TITLE VII--MISCELLANEOUS PROVISIONS

Sec. 701. Whistleblower protections.
Sec. 702. Prohibition on use of funds to facilitate the exportation or 
                            promotion of tobacco.
Sec. 703. Provisions relating to Native Americans.
Sec. 704. Preservation of State and local authority.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) Tobacco products are the foremost preventable health 
        problem facing America today. More than 400,000 individuals die 
        each year as a result of tobacco induced illnesses and 
        conditions.
            (2) The use of tobacco products by the Nation's children is 
        a pediatric disease of epic and worsening proportions that 
        results in new generations of tobacco-dependent children and 
        adults.
            (3) Virtually all new users of tobacco products are under 
        legal age. Every day, 3,000 young people become regular 
        smokers. Of these children, 1,000 will die prematurely from a 
        tobacco-related disease.
            (4) Tobacco products are inherently dangerous and cause 
        cancer, heart disease, and other serious adverse health 
        effects.
            (5) Tobacco advertising and marketing is often deceptive 
        and misleading and contributes significantly to the use of 
        nicotine-containing tobacco products by children.
            (6) Because past efforts to restrict the advertising and 
        marketing of tobacco products have failed to effectively curb 
        tobacco use by children, new, more comprehensive restrictions 
        on the sale, promotion, and distribution of such products are 
        needed.
            (7) Federal and State governments have lacked the resources 
        to adequately address the public health and societal problems 
        caused by the use of tobacco products.
            (8) Federal and State public health officials, the public 
        health community, Congress, and the public at large recognize 
        that the tobacco industry should be subject to ongoing 
        oversight.
            (9) Under Article 1, section 8 of the Constitution, 
        Congress is vested with the responsibility for regulating 
        interstate commerce.
            (10) The sale, distribution, marketing, advertising and use 
        of tobacco products are activities in and substantially 
        affecting interstate commerce. Such products are sold, 
        marketed, advertised, and distributed in interstate commerce on 
        a nationwide basis, and have a substantial effect on the 
        Nation's economy.
            (11) The sale, distribution, marketing, advertising, and 
        use of such products substantially affect interstate commerce 
        through the health care and other costs attributable to the use 
        of tobacco products.
            (12) Civil actions against tobacco product manufacturers 
        and others are pending in Federal and State courts arising from 
        the sale, distribution, marketing, advertising, and use of 
        tobacco products. Among these actions are cases brought by the 
        attorneys general of more than 40 States, certain cities and 
        counties, the Commonwealth of Puerto Rico, and other parties 
        seeking to recover monies expended to treat tobacco-related 
        diseases and for the protection of minors and consumers, as 
        well as penalties and other relief for violations of antitrust, 
        health, consumer protection, and other laws.
            (13) Civil actions have been filed throughout the United 
        States against tobacco product manufacturers and their 
        distributors, trade associations, law firms and consultants on 
        behalf of individuals or classes of individuals claiming to be 
        dependent upon and injured by tobacco products.
            (14) It is in the public interest for Congress to adopt 
        comprehensive public health legislation because of tobacco's 
        unique position in the Nation's history and economy; the need 
        to prevent the sale, distribution, marketing, and advertising 
        of tobacco products to persons below legal age; and the need to 
        educate the public, especially young people, regarding the 
        health effects of using tobacco products.
            (15) The public interest requires a timely, fair, 
        equitable, and consistent result that will serve the public 
        interest by--
                    (A) providing that a portion of the costs of 
                treatment for diseases and adverse health effects 
                associated with the use of tobacco products is borne by 
                the manufacturers of these products; and
                    (B) restricting throughout the Nation the sale, 
                distribution, marketing, and advertising of tobacco 
                products only to persons of legal age.
            (16) The benefits to the Nation of enacting Federal 
        legislation to accomplish these goals would be significant in 
        human and economic terms.
            (17) The Food and Drug Administration has found that 
        reducing the use of tobacco by minors by 50 percent would 
        prevent well over 60,000 premature deaths, and that the 
        monetary value of its regulations on tobacco will save up to 
        $43,000,000,000 each year in reduced medical costs, improved 
        productivity, and the avoidance of premature deaths.
            (18) The Nation's major tobacco product manufacturers have 
        pledged in an agreement reached with several State attorneys 
        general that such manufacturers will comply fully with 
        increased Federal regulation, substantial industry payments, 
        and focus intense efforts on dramatic reductions in youth 
        access and underage usage of tobacco products. Further, the 
        industry has agreed to pay significant penalties for failure to 
        meet targets for the reduction of youth use. In addition, the 
        industry has actively sought passage of tobacco settlement 
        legislation by Congress.
            (19) As new restrictions on the sale of tobacco products 
        are enacted, greater controls on the distribution of tobacco 
        products will be needed to ensure that the new restriction are 
        not evaded.
            (20) It is in the public interest for Congress to adopt 
        legislation to address the public health crisis created by the 
        actions of the tobacco industry.

SEC. 3. PURPOSE.

    It is the purpose of this Act to--
            (1) dramatically reduce the use of tobacco products, 
        especially among children;
            (2) assist individuals who are currently addicted to 
        tobacco products in overcoming that addiction;
            (3) affirm the authority of the Food and Drug 
        Administration to regulate the manufacture, marketing, 
        distribution, and sale of tobacco products under the Food, Drug 
        and Cosmetic Act (21 U.S.C. 321 et seq.);
            (4) require that the tobacco industry fund both Federal and 
        State oversight of the tobacco industry from on-going payments 
        by tobacco product manufacturers;
            (5) require tobacco product manufacturers to provide 
        ongoing funding to be used for an aggressive Federal, State, 
        and local enforcement program and for a nationwide retail 
        licensing system to prevent minors from obtaining tobacco 
        products, while expressly permitting and providing incentives 
        to the States to adopt additional measures that further reduce 
        the products' use;
            (6) impose severe financial surcharges on tobacco product 
        manufacturers if they do not substantially reduce tobacco use 
        by children;
            (7) authorize the Food and Drug Administration to set 
        national standards controlling the manufacture of tobacco 
        products and the identity, public disclosure, and amount of 
        ingredients used in such products;
            (8) provide new and flexible enforcement authority to 
        ensure that the tobacco industry makes efforts to develop and 
        introduce tobacco products that are less harmful;
            (9) ensure that the public is better informed by requiring 
        that manufacturers of tobacco products disclose all research 
        which has not previously been made available, as well as all 
        research generated in the future relating to the health and 
        dependency effects or safety of tobacco products;
            (10) require tobacco product manufacturers to provide 
        funding for a variety of public health initiatives;
            (11) establish enhanced protections against environmental 
        tobacco smoke while also permitting State and local governments 
        to enact additional and more stringent standards;
            (12) authorize and fund from payments by tobacco 
        manufacturers a continuing national counter-advertising and 
        tobacco control campaign which seeks to educate and discourage 
        the public from beginning or continuing to use tobacco 
        products;
            (13) establish a mechanism to compensate the States in the 
        settlement of their various claims against tobacco product 
        manufacturers;
            (14) authorize and fund from payments by tobacco product 
        manufacturers a nationwide program of smoking cessation;
            (15) establish and fund from payments by tobacco product 
        manufacturers a Victims' Compensation Fund; and
            (16) continue to permit the sale of tobacco products to 
        adults in conjunction with measures to ensure that they are not 
        sold or accessible to underage purchasers.

SEC. 4. SCOPE AND EFFECT.

    (a) Intended Effect.--This Act is not intended by Congress to--
            (1) establish a precedent with regard to any other 
        industry, situation, circumstance, or legal action;
            (2) be construed to provide civil or criminal immunity; or
            (3) except as provided in this Act, affect any action 
        pending in Federal or State court, or any agreement, consent 
        decree, or contract of any kind.
    (b) Taxation.--Notwithstanding any other provision of law, this Act 
(and the amendments made by this Act) shall not affect any authority of 
the Secretary of the Treasury (including any authority assigned to the 
Bureau of Alcohol, Tobacco and Firearms) or of State or local 
governments with regard to the taxation of tobacco or tobacco products.
    (c) Federal Trade Commission Authority.--Except as expressly 
provided in this Act, nothing in this Act (or the amendments made by 
this Act) shall be construed to reduce any authority of the Federal 
Trade Commission over tobacco or tobacco products.
    (d) Agricultural Activities.--Except as otherwise provided in this 
Act, nothing in this Act shall be construed to reduce any authority 
under existing law of the Secretary of Agriculture regarding the 
growing, cultivation or curing of raw tobacco.

SEC. 5. DEFINITIONS.

    In this Act:
            (1) Brand.--The term ``brand'' means a variety of a tobacco 
        product distinguished by the tobacco used, tar content, 
        nicotine content, flavoring used, size, filtration, or 
        packaging.
            (2) Cigar.--The term ``cigar'' means any roll of tobacco 
        wrapped in leaf tobacco or in any substance containing tobacco 
        (other than any roll of tobacco which is a cigarette or 
        cigarillo within the meaning of paragraph (3) or (5)).
            (3) Cigarette.--The term ``cigarette'' means any product 
        that contains nicotine, is intended to be burned under ordinary 
        conditions of use, and consists of--
                    (A) any roll of tobacco wrapped in paper or in any 
                substance not containing tobacco; or
                    (B) any roll of tobacco wrapped in any substance 
                containing tobacco 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 described in 
                subparagraph (A).
            (4) Cigarette tobacco.--The term ``cigarette tobacco'' 
        means any product that consists of loose tobacco that contains 
        or delivers nicotine and is intended for use by consumers in a 
        cigarette. Unless otherwise stated, the requirements of this 
        Act for cigarettes shall also apply to cigarette tobacco.
            (5) Cigarillos.--The term ``cigarillos'' means any roll of 
        tobacco wrapped in leaf tobacco or any substance containing 
        tobacco (other than any roll of tobacco which is a cigarette 
        within the meaning of paragraph (3)) and as to which 1,000 
        units weigh not more than 3 pounds.
            (6) Distributor.--The term ``distributor'' means any person 
        who furthers the distribution of tobacco products, whether 
        domestic or imported, at any point from the original place of 
        manufacture to the person who sells or distributes the product 
        to individuals for personal consumption. Such term shall not 
        include common carriers.
            (7) Little cigar.--The term ``little cigar'' means any roll 
        of tobacco wrapped in leaf tobacco or any substance containing 
        tobacco (other than any roll of tobacco which is a cigarette 
        within the meaning of paragraph(3)) and as to which 1,000 units 
        weigh not more than 3 pounds.
            (8) Manufacturer.--The term ``manufacturer'' means any 
        person, including any repacker or relabeler, who manufacturers, 
        fabricates, assembles, processes, packs, or labels a tobacco 
        product. Any successor or assign of a manufacturer, as well as 
        any person affiliated with the manufacturer, shall have all of 
        the manufacturer's responsibilities and liabilities as set 
        forth in this Act.
            (9) Nicotine.--The term ``nicotine'' means the chemical 
        substance named 3-(1-Methyl-2-pyrrolidinyl)pyridine or 
        C<INF>10</INF>H<INF>14</INF>N<INF>2</INF>, including any salt 
        or complex of nicotine.
            (10) Package.--The term ``package'' means the innermost 
        sealed container, irrespective of the material from which such 
        container is made, in which a tobacco product is placed by the 
        manufacturer and in which such tobacco product is offered for 
        sale to a member of the general public.
            (11) Person.--The term ``person'' means a firm, 
        partnership, association, corporation, legal representative, 
        trustee, receiver or any other legally recognized entity, 
        including an individual.
            (12) Pipe tobacco.--The term ``pipe tobacco'' means any 
        loose tobacco that, because of its appearance, type, packaging, 
        or labeling, is likely to be offered to, or purchased by, 
        consumers as a tobacco product to be smoked in a pipe.
            (13) Point of sale.--The term ``point of sale'' means any 
        location at which an individual can purchase or otherwise 
        obtain tobacco products for personal consumption.
            (14) Retailer.--The term ``retailer'' means any person who 
        sells or distributes tobacco products at retail, or who 
        operates a facility where vending machines or self-service 
        displays are permitted under this Act.
            (15) Roll-your-own tobacco.--The term ``roll-your-own 
        tobacco'' means 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.
            (16) Sale.--The term ``sale'' includes the selling, 
        providing samples of, or otherwise making tobacco products 
        available for personal consumption in any place within the 
        scope of this Act.
            (17) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (18) Smokeless tobacco.--The term ``smokeless tobacco'' 
        means any product that consists of cut, ground, powdered or 
        leaf tobacco that contains nicotine and that is intended to be 
        placed in the oral or nasal cavity.
            (19) State.--The term ``State'' includes the several 
        States, the District of Columbia, the Commonwealth of Puerto 
        Rico, Guam, the Virgin Islands, American Samoa, the Northern 
        Mariana Islands, and any other territory or possession of the 
        United States. Such term includes any political division of any 
        State.
            (20) Tobacco.--The term `tobacco' means tobacco in its 
        unmanufactured form.
            (21) Tobacco product.--The term ``tobacco product'' means 
        cigarettes, cigarette tobacco, smokeless tobacco, little 
        cigars, roll-your-own products, cigars, cigarillos, pipe 
        tobacco, roll-your-own products, and any other product made or 
        derived from tobacco intended for human consumption.

            TITLE I--INCENTIVES TO REDUCE YOUTH TOBACCO USE

                Subtitle A--National Tobacco Trust Fund

SEC. 101. ESTABLISHMENT.

    (a) Establishment and Trustees.--
            (1) In general.--There is established in the Treasury of 
        the United States a trust fund to be known as the ``National 
        Tobacco Trust Fund'' (referred to in this Act as the ``Trust 
        Fund''), consisting of such amounts as may be appropriated or 
        credited to the Trust Fund.
            (2) Trustees.--The trustees of the Trust Fund shall be the 
        Secretary of the Treasury, the Secretary of Health and Human 
        Services, and the Attorney General.
    (b) Transfers.--There are hereby appropriated and transferred to 
the Trust Fund an amount equal to the--
            (1) amounts received under the annual assessments made 
        under section 102;
            (2) amounts paid as fines or penalties, including interest 
        thereon, under section 103; and
            (3) amounts repaid or recovered under subtitle B, including 
        interest thereon.
    (c) Repayable Advances.--
            (1) Authorization.--There are authorized to be appropriated 
        to the Trust Fund, as repayable advances, such sums as may from 
        time to time be necessary to make the expenditures described in 
        subsection (d).
            (2) Repayment with interest.--Repayable advances made to 
        the Trust Fund shall be repaid, and interest on such advances 
        shall be paid, to the general fund of the Treasury when the 
        Secretary of the Treasury determines that moneys are available 
        in the Trust Fund for such purposes.
            (3) Rate of interest.--Interest on advances made pursuant 
        to this subsection shall be at a rate determined by the 
        Secretary of the Treasury (as of the close of the calendar 
        month preceding the month in which the advance is made) to be 
        equal to the current average market yield on outstanding 
        marketable obligations of the United States with remaining 
        period to maturity comparable to the anticipated period during 
        which the advance will be outstanding.
    (d) Expenditures From Trust Fund.--
            (1) Appropriations.--
                    (A) In general.--Amounts in the National Tobacco 
                Trust Fund shall be appropriated by the Committee on 
                Appropriations of the House of Representatives and the 
                Committee on Appropriations of the Senate exclusively 
                for the purposes authorized in this Act. Amounts 
                appropriated for each program authorized under this Act 
                shall be determined by the percentages contained in the 
                tables in paragraph (2).
                    (B) Permissible transfers.--Notwithstanding 
                subparagraph (A), the Committees referred to in such 
                subparagraph may transfer funds among the programs 
                authorized under this Act if the Committee reports and 
                statement of managers that accompany any such 
                appropriations Act provide an explanation of any such 
                transfers, except that no transfers shall be made under 
                this subparagraph--
                            (i) to the National Institutes of Health;
                            (ii) for purposes of making payments under 
                        section 111;
                            (iii) from the National Victim's 
                        Compensation Fund; or
                            (iv) from the amounts available for States 
                        under section 111(b)(1).
            (2) Expenditure tables.--For purposes of paragraph (1), 
        amounts shall be made available in each fiscal year as follows:
                    (A) State reimbursement; food and drug 
                administration.--

      

                               STATE SHARE                              
      (Percentage of amount in Trust Fund for fiscal year involved)     
------------------------------------------------------------------------
      Fiscal Year         Base Payment     Block Grant      Bonus Pool  
------------------------------------------------------------------------
                                                                        
 1999                     35.0             35.0             0.00        
 2000                     10.0             10.0             0.00        
 2001                      9.0              9.0             0.00        
 2002                     10.0             10.0             2.67        
 2003                     13.0             13.0             2.67        
 2004                     13.0             13.0             2.67        
 2005                     16.0             16.0             2.67        
 2006                     16.0             16.0             2.67        
 2007                     16.0             16.0             2.67        
 2008                     16.0             16.0             2.67        
 2009                     16.0             16.0             2.67        
 2010                     16.0             16.0             2.67        
 2011                     16.0             16.0             2.67        
 2012                     16.0             16.0             2.67        
 2013                     16.0             16.0             2.67        
 2014                     16.0             16.0             2.67        
 2015-2024                16.0             16.0             2.67        
------------------------------------------------------------------------

                    (B) Public health programs.--

      

                                                  PUBLIC HEALTH                                                 
                          (Percentage of amount in Trust Fund for fiscal year involved)                         
----------------------------------------------------------------------------------------------------------------
                                                        Community-                                              
     Fiscal Year           Smoking        Counter-        Based       School-Based      Event          Youth    
                          Cessation     advertising     Prevention     Prevention    Sponsorship      Database  
----------------------------------------------------------------------------------------------------------------
                                                                                                                
 1999                    1.3333          2.6667         2.6667         1.3333         0.0            2.6667     
 2000                    6.6667          4.0000         3.8333         1.1667         0.5            1.1667     
 2001                    5.3333          3.2000         3.4667         1.0667         0.4            0.9333     
 2002                    5.3333          2.6667         3.3333         1.0667         0.4            0.9333     
 2003                    5.3333          2.9333         4.2667         1.2000         0.4            0.9333     
 2004                    5.3333          2.9333         5.0667         1.3333         0.4            0.9333     
 2005                    5.3333          2.9333         5.0667         1.4667         0.4            0.9333     
 2006                    8.0000          2.6667         5.0667         1.4667         0.4            0.9333     
 2007                    8.0000          2.6667         5.0667         1.4667         0.4            0.9333     
 2008                    8.0000          2.6667         5.0667         1.4667         0.4            0.9333     
 2009                    8.0000          2.6667         5.0667         1.4667         0.4            0.9333     
 2010                    8.0000          2.6667         5.0667         1.6000         0.0            0.9333     
 2011                    8.0000          2.6667         5.0667         1.6000         0.0            0.9333     
 2012                    8.0000          2.6667         5.0667         1.6000         0.0            0.9333     
 2013                    8.0000          2.6667         5.0667         1.6000         0.0            0.9333     
 2014                    8.0000          2.6667         5.0667         1.6000         0.0            0.9333     
 2015-2024               8.0000          2.9333         5.3333         1.6000         0.0            0.9333     
----------------------------------------------------------------------------------------------------------------

                    (C) Research.--

      

                              RESEARCH/FDA                              
      (Percentage of amount in Trust Fund for fiscal year involved)     
------------------------------------------------------------------------
                                            Tobacco                     
     Fiscal Year       Health Research     Prevention          FDA      
------------------------------------------------------------------------
                                                                        
 1999                     2.67            0.0              2.667        
 2000                    21.5             4.0              2.0          
 2001                    17.2             3.2              1.6          
 2002                    17.2             3.2              1.6          
 2003                    17.2             3.2              1.6          
 2004                    17.2             3.2              1.6          
 2005                    17.2             3.2              1.6          
 2006                    17.2             3.2              1.6          
 2007                    17.2             3.2              1.6          
 2008                    17.2             3.2              1.6          
 2009                    17.2             3.2              1.6          
 2010                    17.2             3.2              1.6          
 2011                    17.2             3.2              1.6          
 2012                    17.2             3.2              1.6          
 2013                    17.2             3.2              1.6          
 2014                    17.2             3.2              1.6          
 2015-2024               17.2             3.2              1.6          
------------------------------------------------------------------------

                    (D) Miscellaneous programs and activities.--

      

                                                  MISCELLANEOUS                                                 
                          (Percentage of amount in Trust Fund for fiscal year involved)                         
----------------------------------------------------------------------------------------------------------------
                                        Victims'                        Native      International       Anti-   
     Fiscal Year       Agriculture    Compensation        ETS         Americans       Education       Smuggling 
----------------------------------------------------------------------------------------------------------------
                                                                                                                
 1999                  0.0000         0.000          0.0000         0.3333         0.3333           1.3333      
 2000                  4.5000        26.665          1.3333         1.3333         0.6667           0.6667      
 2001                 21.0667        21.332          1.0667         1.0667         0.5333           0.5333      
 2002                 17.0667        21.332          1.0667         1.0667         0.5333           0.5333      
 2003                  9.7333        21.332          1.0667         1.0667         0.5333           0.5333      
 2004                  8.8000        21.332          1.0667         1.0667         0.5333           0.5333      
 2005                  2.6667        21.332          1.0667         1.0667         0.5333           0.5333      
 2006                  0.2667        21.332          1.0667         1.0667         0.5333           0.5333      
 2007                  0.2667        21.332          1.0667         1.0667         0.5333           0.5333      
 2008                  0.2667        21.332          1.0667         1.0667         0.5333           0.5333      
 2009                  0.2667        21.332          1.0667         1.0667         0.5333           0.5333      
 2010                  0.5333        21.332          1.0667         1.0667         0.5333           0.5333      
 2011                  0.5333        21.332          1.0667         1.0667         0.5333           0.5333      
 2012                  0.5333        21.332          1.0667         1.0667         0.5333           0.5333      
 2013                  0.5333        21.332          1.0667         1.0667         0.5333           0.5333      
 2014                  0.5333        21.332          1.0667         1.0667         0.5333           0.5333      
 2015-2024             0.0000        21.332          1.0667         1.0667         0.5333           0.5333      
----------------------------------------------------------------------------------------------------------------

            (3) Budgetary impact.--Amounts appropriated under paragraph 
        (1) and outlays flowing from such appropriations shall not be 
        taken into account for purposes of any budget enforcement 
        procedures under the Congressional Budget of 1974 and the 
        Balanced Budget and Emergency Deficit Control Act of 1985.
            (3) Definitions and use of funds.--With respect to the 
        tables in paragraph (2)--
                    (A) the term ``base payment'' as used in the table 
                under subparagraph (A) means the amounts for payments 
                to States under section 111(b)(1);
                    (B) the term ``block grant'' as used in the table 
                under subparagraph (A) means the amount for payments to 
                States under section 111(b)(2);
                    (C) the term ``bonus pool'' as used in the table 
                under subparagraph (A) means the amounts for payments 
                to States under section 112;
                    (D) the term ``smoking cessation'' as used in the 
                table under subparagraph (B) means the amounts to carry 
                out section 321;
                    (E) the term ``counter-advertising'' as used in the 
                table under subparagraph (B) means the amounts to carry 
                out section 311;
                    (F) the term ``community-based prevention'' as used 
                in the table under subparagraph (B) means the amounts 
                to carry out section 301;
                    (G) the term ``school-based prevention'' as used in 
                the table under subparagraph (B) means the amounts to 
                carry out section 301;
                    (H) the term ``event sponsorship'' as used in the 
                table under subparagraph (B) means the amounts to carry 
                out section 302;
                    (I) the term ``youth database'' as used in the 
                table under subparagraph (B) means the amounts to carry 
                out section 337;
                    (J) the term ``biomedical research'' as used in the 
                table under subparagraph (C) means the amounts to carry 
                out section 331;
                    (K) the term ``applied research'' as used in the 
                table under subparagraph (C) means the amounts to carry 
                out section 336;
                    (L) the term ``FDA'' as used in the table under 
                subparagraph (C) means the amounts for the Food and 
                Drug Administration to carry out title II (and the 
                amendments made by such title);
                    (M) the term ``agriculture'' as used in the table 
                under subparagraph (D) means the amounts to carry out 
                title V;
                    (N) the term ``victims' compensation'' as used in 
                the table under subparagraph (D) means the amounts to 
                carry out section 401;
                    (O) the term ``ETS'' as used in the table under 
                subparagraph (D) means the amounts to carry out title 
                VI;
                    (P) the term ``Native Americans'' as used in the 
                table under subparagraph (D) means the amounts to carry 
                out section 703;
                    (Q) the term ``international education'' as used in 
                the table under subparagraph (D) means the amounts to 
                carry out section 344; and
                    (R) the term ``anti-smuggling'' as used in the 
                table under subparagraph (D) means the amounts to carry 
                out section 226.
    (e) Prohibition On Treatment As Overpayment.--
            (1) In general.--Section 1903(d)(3) of the Social Security 
        Act (42 U.S.C. 1396b(d)(3)) is amended--
                    (A) by inserting ``(A)'' before ``The''; and
                    (B) by adding at the end the following:
    ``(B) Subparagraph (A) and paragraph (2)(B) shall not apply to any 
amount recovered or paid to a State as part of a settlement or judgment 
reached in litigation initiated or pursued by a State against one or 
more manufacturers of tobacco products, as defined in section 5702(d) 
of the Internal Revenue Code of 1986.''.
            (2) Effective date.--The amendment made by subsection (a) 
        applies to amounts recovered or paid to a State before, on, or 
        after the date of enactment of this Act.
    (f) Budgetary Effect.--
            (1) In general.--The Director of the Office of Management 
        and Budget shall annually determine whether the payments made 
        under section 102 have resulted in a decrease in the amount of 
        revenues collected under the excise tax provisions of chapter 
        52 of the Internal Revenue Code of 1986.
            (2) Notice.--The Director shall notify the trustees in any 
        year in which the Director determines that a shortfall 
        described in paragraph (1) exists. Upon such a notification, 
        the trustees shall transfer from the Trust Fund to the General 
        Fund of the Treasury an amount necessary to make up such 
        shortfall.
    (g) Increase in Amounts.--The amounts described in the tables under 
subsection (d)(2) shall be adjusted by the Trustees to account for any 
adjustments made under section 102(b) relating to inflationary 
adjustments or section 102(e)(1) relating to the deductibility of 
payments by manufacturers.

SEC. 102. PAYMENTS BY TOBACCO PRODUCT MANUFACTURERS.

    (a) Payments.--
            (1) Initial payment.--Not later than 90 days after the date 
        of enactment of this Act, each manufacturer shall pay to the 
        Trust Fund an amount that bears the same ratio to 
        $10,000,000,000 as the tobacco product market share of the 
        manufacturer bears to the tobacco market share of all tobacco 
        manufacturers for the year preceding the year in which the 
        determination is being made.
            (2) Subsequent payment.--Not later than October 1, 1999, 
        each manufacturer shall pay to the Trust Fund an amount that 
        bears the same ratio to $20,000,000,000 as the tobacco product 
        market share of the manufacturer bears to the tobacco market 
        share of all tobacco manufacturers for the year preceding the 
        year in which the determination is being made.
            (3) Annual payments and collection.--Not later than October 
        1, 2000, and each October 1 thereafter, each manufacturer shall 
        pay to the Trust Fund an amount that bears the same ratio to 
        $25,000,000,000 as the tobacco product market share of the 
        manufacturer bears to the tobacco market share of all tobacco 
        manufacturers for the year preceding the year in which the 
        determination is being made.
            (4) Payments applicable to cigars.--Prior to the date of 
        the completion of the first annual performance survey under 
        section 132(a), the Secretary shall not consider the 
        manufacture of cigars for purposes of determining the amount 
        that a manufacturer shall be assessed under this subsection.
            (5) No requirement for payment.--The Secretary shall not 
        require that a manufacturer make a payment under this 
        subsection for any tobacco product for any fiscal year if the 
        Secretary determines that the tobacco product involved as 
        manufactured by the manufacturer is used by less than 0.5 
        percent of the total number of children determined to have used 
        any tobacco product as manufactured by all manufacturers for 
        the year involved.
            (6) Application to certain manufacturers.--The provisions 
        of this subsection shall apply to a manufacturer that begins 
        manufacturing tobacco products after the date of enactment of 
        this Act, except that if such a manufacturer fails to make 
        payments as provided for in this subsection, such manufacturer 
        shall pay to the Trust Fund an amount equal to 150 percent of 
        the amount that such manufacturer would have paid under this 
        subsection.
            (7) Nonapplication to certain manufacturers.--
                    (A) Exemption.--A manufacturer described in 
                subparagraph (B) shall be exempt from the requirements 
of this section relating to--
                            (i) the payment of an initial payment under 
                        subsection (a)(1); and
                            (ii) the payment of an amount equal to 40 
                        percent of the annual assessments under this 
                        section otherwise applicable to such 
                        manufacturer.
                    (B) Manufacturer.--A manufacturer described in this 
                subparagraph is a manufacturer that--
                            (i) has resolved tobacco-related civil 
                        actions with more than 25 States prior to 
                        January 1, 1998 through written settlement 
                        agreements signed by the attorneys general of 
                        such States; and
                            (ii) not later than December 31, 1998, 
                        provides to all other States the opportunity to 
                        enter into written settlement agreements that 
                        are substantially similar to the agreements 
                        described in clause (i) and provides such other 
                        States with the most favorable annual payment 
                        terms provided in the settlement agreements 
                        described in clause (i).
                    (C) Limitation.--The provisions of subparagraph 
                (A)(ii) shall apply only to assessments on cigarettes 
                to the extent that such cigarettes constitute less than 
                3 percent of all cigarettes manufactured and 
                distributed for consumers in any year.
    (b) Inflation Adjustment.--
            (1) In general.--Except with respect to the amount relating 
        to the National Victims' Compensation Fund under section 401 as 
        described in the table under section 101(d)(2), the amount 
        described in subsection (a)(3) shall be increased by 3 percent 
        each year, or adjusted each year to reflect the increase in the 
        Consumer Price Index for all urban consumers (as published by 
        the Bureau of Labor Statistics) from the year previous to the 
        year for which the adjustment is being applied, whichever is 
        greater.
            (2) National victims' compensation fund.--The amount 
        described in subsection (a)(3) relating to the National 
        Victims' Compensation Fund under section 401 as described in 
        the table under section 101(d)(2), shall be increased by 3 
        percent each year, or adjusted each year to reflect the 
        increase in the Medical Consumer Price Index (as published by 
        the Bureau of Labor Statistics) from the year previous to the 
        year for which the adjustment is being applied, whichever is 
        greater.
    (c) Required Pass Through.--The trustees shall certify that, with 
respect to an assessment paid by a manufacturer under this section 
under paragraphs (1) and (2) of subsection (a), the manufacturer shall 
increase the price of its tobacco products so as to reflect the amount 
of the assessment, but in no case shall such increase be less than--
            (1) in the case of cigarettes, $1.00 with respect to the 
        assessment under subsection (a)(2), and an additional $.50 
        cents with respect to the assessment under subsection (a)(3); 
        and
            (2) in the case of other tobacco products, an amount 
        comparable to the amount of the increase under paragraph (1).
    (d) Failure To Make Payment.--Upon a determination that a 
manufacturer has failed to pay an assessment as required under this 
section--
            (1) the provisions of subtitle A of title IV shall not 
        apply with respect to such manufacturer;
            (2) the Secretary shall impose penalties on the 
        manufacturer as provided for under section 103; and
            (3) in full within 90 days of the date on which such 
        payment is due, the Secretary shall revoke the tobacco license 
        of such manufacturer under section 222 until such time as such 
        assessment is fully paid.
    (e) No Tax Benefit.--
            (1) In general.--With respect to a payment under subsection 
        (a), an amount equal to 25 percent of such payment shall not be 
        considered to be an ordinary and necessary expense in carrying 
        on a trade or business for purposes of the Internal Revenue 
        Code of 1986 and shall not be tax deductible.
            (2) Look-back penalties.--The payment of penalties under 
        subtitle B shall not be considered to be an ordinary and 
        necessary expense in carrying on a trade or business for 
        purposes of the Internal Revenue Code of 1986 and shall not be 
        deductible.
    (f) Effect of Bankruptcy.--Section 507(a)(8) of title 11, United 
States Code, is amended--
            (1) in subparagraph (F)(iii), by striking ``or'' at the 
        end;
            (2) in subparagraph (G), by striking the period and 
        inserting ``; or''; and
            (3) by adding at the end the following:
                    ``(H) a payment, an assessment, or a penalty to be 
                paid into the National Tobacco Trust Fund under section 
                102 (or any other section) of the KIDS Act.''.

SEC. 103. ENFORCEMENT.

    (a) In General.--The Secretary of the Treasury, in consultation 
with the Secretary of Health and Human Services, shall enforce the 
provisions of section 102 with respect to the manufacturer that fails 
to pay any amount assessed under section 102.
    (b) Amount of Penalty.--The amount of the penalty imposed by 
subsection (a) on any failure with respect to a manufacturer shall be 
established by the Secretary of the Treasury for each day during the 
noncompliance period, except that no such penalty shall be less than 
the greater of--
            (1) $100,000 plus interest; or
            (2) an amount equal to 2 percent of the amount of the 
        annual payment involved with respect to the manufacturer.
    (c) Noncompliance Period.--For purposes of this section, the term 
``noncompliance period'' means, with respect to any failure to pay an 
assessment under section 102, the period--
            (1) beginning on the due date for such payment; and
            (2) ending on the date on which such payment is paid in 
        full.
    (d) Financial Obligations Not Dischargeable.--No financial 
responsibility or liability of any person under this Act shall be 
extinguished, reduced, or modified as the result of any proceeding in 
bankruptcy by or on behalf of a person or the person's successor or 
assign.

                     Subtitle B--Payments to States

SEC. 111. PAYMENTS TO STATES.

    (a) Payments.--
            (1) In general.--There are authorized to be appropriated 
        amounts provided for under section 101(d)(2)(A) in each fiscal 
        year to provide funds to each State to reimburse such State for 
        amounts expended by the State for the treatment of individuals 
        with tobacco-related illnesses or conditions.
            (2) Amount.--From the amount made available under section 
        101(d)(2)(A) for any fiscal year, each State shall receive the 
        applicable percentage of such amount in accordance with the 
        following table:

                State
                                                  Applicable Percentage
                  Alabama............................             1.400
                  Alaska.............................             0.400
                  Arizona............................             1.334
                  Arkansas...........................             0.800
                  California.........................             9.696
                  Colorado...........................             1.204
                  Connecticut........................             1.612
                  Delaware...........................             0.400
                  District of Columbia...............             0.600
                  Florida............................             4.977
                  Georgia............................             2.174
                  Hawaii.............................             0.600
                  Idaho..............................             0.400
                  Illinois...........................             4.241
                  Indiana............................             1.780
                  Iowa...............................             0.802
                  Kansas.............................             0.800
                  Kentucky...........................             1.575
                  Louisiana..........................             1.734
                  Maine..............................             0.800
                  Maryland...........................             2.065
                  Massachusetts......................             3.571
                  Michigan...........................             3.917
                  Minnesota..........................             2.138
                  Mississippi........................             0.800
                  Missouri...........................             1.930
                  Montana............................             0.400
                  Nebraska...........................             0.600
                  Nevada.............................             0.600
                  New Hampshire......................             0.600
                  New Jersey.........................             3.193
                  New Mexico.........................             0.600
                  New York...........................            10.899
                  North Carolina.....................             2.143
                  North Dakota.......................             0.400
                  Ohio...............................             4.463
                  Oklahoma...........................             0.943
                  Oregon.............................             1.076
                  Pennsylvania.......................             5.202
                  Rhode Island.......................             0.800
                  South Carolina.....................             0.961
                  South Dakota.......................             0.400
                  Tennessee..........................             2.230
                  Texas..............................             4.905
                  Utah...............................             0.400
                  Vermont............................             0.400
                  Virginia...........................             1.827
                  Washington.........................             1.823
                  West Virginia......................             0.818
                  Wisconsin..........................             1.919
                  Wyoming............................             0.200
                  American Samoa.....................             0.009
                  N. Mariana Islands.................             0.002
                  Guam...............................             0.007
                  U.S. Virgin Islands................             0.005
                  Puerto Rico........................             0.428
    (b) Use of Funds.--
            (1) Discretionary amounts.--A State may use not to exceed 
        50 percent of the amount received under this section in a 
        fiscal year for any activities determined appropriate by the 
        State.
            (2) Mandatory expenditures.--A State shall use not less 
        than 50 percent of the amount received under this section in a 
        fiscal year
                    (A) to carry out additional activities or provide 
                additional services under--
                            (i) subject to subsection (d), the State 
                        program under title XIX of the Social Security 
                        Act (42 U.S.C. 1396 et seq.);
                            (ii) the State program under title XXI of 
                        the Social Security Act (42 U.S.C. 1397aa et 
                        seq.);
                            (iii) the State program under the maternal 
                        and child health services block grant under 
                        title V of the Social Security Act (42 U.S.C. 
                        701 et seq.);
                            (iv) the community health center program 
                        under section 330 of the Public Health Service 
                        Act (42 U.S.C. 254b);
                            (v) programs administered within the State 
                        under the authority of the Substance Abuse and 
                        Mental Health Services Administration;
                            (vi) the State program under the preventive 
                        health services block grant under part A of 
                        title XIX of the Public Health Service Act (42 
                        U.S.C. 300w et seq.);
                            (vii) the State program for temporary 
                        assistance to needy families funded under part 
                        A of title IV of the Social Security (42 U.S.C. 
                        601 et seq.);
                            (viii) federally funded child welfare and 
                        abuse programs;
                            (ix) federally funded child care programs 
                        operating in the State;
                            (x) programs to aid disabled children;
                            (xi) the State program under section 17 of 
                        the Child Nutrition Act of 1966 (42 U.S.C. 1786 
                        et seq.);
                            (xii) federally funded child abuse 
                        programs;
                            (xiii) the Head Start Act (42 U.S.C. 9831 
                        et seq.);
                            (xiv) the even start family literacy 
                        program carried out under part B of title I of 
                        the Elementary and Secondary Education Act of 
                        1965 (20 U.S.C. 6361 et seq.);
                            (xv) the State program under part B of the 
                        Individuals With Disabilities Education Act (20 
                        U.S.C. 1411 et seq.);
                            (xvi) the State program under the social 
                        services block grant under title XX of Social 
                        Security Act (42 U.S.C. 1397 et seq.);
                            (xvii) the State program under the 
                        Community Services Block Grant Act (42 U.S.C. 
                        9901 et seq.);
                            (xviii) the State program under the Food 
                        Stamp Act of 1977 (7 U.S.C. 2011 et seq.);
                            (xix) the State program under Low-Income 
                        Home Energy Assistance Act of 1981 (42 U.S.C. 
                        8621 et seq.); and
                            (xx) federally funded programs providing 
                        assistance for general public education from 
                        kindergarten through 12th grade; and
                    (B) to carry out any other anti-tobacco or health 
                activities determined appropriate by the Secretary.
    (c) Supplement not Supplant.--Amounts referred to in subsection 
(b)(2) shall be used to supplement and not supplant other Federal, 
State and local funds provided for any of the programs described in 
subparagraphs (A) and (B) of such subsection. Amounts provided to the 
State under any of the provisions of law referred to in such 
subparagraph shall not be reduced solely as a result of the 
availability of funds under this section.
    (d) No Inclusion of Funds for Purposes of Medicaid Match.--Amounts 
received under this section and expended by a State under a program 
described in subsection (b) may not be used for purposes of claiming a 
State expenditure under title XIX (42 U.S.C. 1396 et seq.) including 
expenditures for which an enhanced FMAP is made under the fourth 
sentence of section 1905(b) of such Act.

SEC. 112. STATE BONUS PAYMENTS.

    (a) In General.--The Secretary shall make a grant pursuant to this 
section to each State for each year for which the State is a high 
performing State.
    (b) Amount of Grant.--
            (1) In general.--Subject to paragraph (2), the Secretary 
        shall determine the amount of the grant payable under this 
        section to a high performing State for a year, which shall be 
        based on the score assigned to the State under subsection (d) 
        for the fiscal year that immediately precedes the year for 
        which the bonus is being given.
            (2) Limitation.--The amount payable to a State under this 
        section for a year shall not exceed 10 percent of the amount 
        made available for purposes of this section under the table 
        under section 101(d)(2).
    (c) Formula for Measuring State Performance.--Not later than 1 year 
after the date of the enactment of this Act, the Secretary shall 
develop a formula for measuring State performance in achieving the 
underage reduction goals described in section 133(b) with respect to 
the State in the year involved. Such formula shall include the 
development and utilization of State-specific underage use baselines 
and targets under a standardized methodology developed by the Centers 
for Disease Control and Prevention.
    (d) Scoring of State Performance; Setting of Performance 
Thresholds.--For each year, the Secretary shall use the formula 
developed under subsection (c) to assign a score to each eligible State 
for the fiscal year that immediately precedes the year for which the 
eligibility for the bonus is being determined.
    (e) High Performing State.--The term ``high performing State'' 
means, with respect to a year, a State whose score assigned pursuant to 
subsection (d) for the year immediately preceding the year for which 
eligibility for the bonus is being determined equals or exceeds the 
performance threshold prescribed under such subsection for such 
preceding year.
    (f) Amount of Awards.--In determining the amount of an award under 
this section for any year for a high performing State, the Secretary 
shall award 20 percent of the funds available for such fiscal year to 
States that have adopted any or all of the following policies to help 
meet their annual youth reduction targets:
            (1) Further increasing the price of cigarettes and other 
        tobacco products.
            (2) Exceeding Federal minors' access restrictions 
        (including penalties for employees who sell to minors, 
        penalties for minors who purchase, and increasing the legal 
        purchase age).
            (3) Increased State investments in anti-tobacco programs 
        (including counter-advertising, school and community-based 
        activities, and event sponsorship).
            (4) Enactment of more stringent policies to reduce or 
        eliminate exposures to environmental tobacco smoke (including 
        bars, restaurants, bowling alleys, bingo parlors, public 
        transportation, public arenas and stadia).
            (5) Other activities or actions that the Secretary may deem 
        appropriate.
    (g) Funding.--The Secretary shall use amounts made available for 
each fiscal year under section 101(d)(2)(A) to carry out this section. 
Amounts remaining available under this section at the end of the fiscal 
year involved shall be used in subsequent fiscal years to carry out 
this section.

            Subtitle C--Annual Youth Tobacco Use Reductions

SEC. 131. PURPOSE.

    It is the purpose of this subtitle to achieve reductions in the 
proportion of underage consumers of tobacco products through the 
imposition of financial deterrents relating to the use of tobacco 
products if certain underage tobacco-use reduction targets are not met.

SEC. 132. CHILD TOBACCO USE SURVEYS.

    (a) Annual Performance Survey.--Not later than October 1, 1999, and 
annually thereafter, the Secretary shall conduct a survey to 
determine--
            (1) the percentage of all young individuals who used a type 
        of tobacco product within the 30-day period prior to the 
        conduct of the survey; and
            (2) the percentage of young individuals who identify each 
        brand of each type of tobacco product as the usual brand smoked 
        or used within such 30-day period.
    (b) Young Individuals.--For the purposes of this subtitle, the term 
``young individuals'' means individuals who are under 18 years of age.
    (c) Baseline Level.--
            (1) In general.--For the purposes of this subtitle, the 
        term ``baseline level'' means, with respect to each type of 
        tobacco product, the percentage of young individuals determined 
        to have used such tobacco products in the annual performance 
        survey described in subsection (a) completed by October 1, 
        1999.
            (2) Manufacturer's baseline level.--For the purposes of 
        this subtitle, the term ``manufacturer's baseline level'' 
        means, with respect to each type of tobacco product, the 
        percentage of young individuals determined to have identified a 
        brand of each such tobacco product of such manufacturer as the 
        usual brand smoked or used in the annual performance survey 
        described in subsection (a) completed by October 1, 1999.
            (3) Use of certain data or methodology.--
                    (A) In general.--For purposes of determining the 
                percentages under paragraphs (1) and (2), the Secretary 
                may use the data collected through national surveys of 
                young individuals. Such surveys shall--
                            (i) be based on a nationally representative 
                        sample of at least 20,000 completed interviews 
                        of young individuals;
                            (ii) be on a household-based in person 
                        survey;
                            (iii) measure the use of tobacco product 
                        within the past 30 days;
                            (iv) identify the usual brand of each type 
                        of tobacco product used within the past 30 
                        days; and
                            (v) calculate the actual percentage 
                        reductions in underage the use of a type of 
                        tobacco product (or, in the case of the 
                        manufacturer-specific surcharge, the use of a 
                        type of tobacco product of a manufacturer) 
                        based on the point estimates from the annual 
                        performance survey.
                For purposes of clause (iv), point estimates shall be 
                deemed acceptable for measuring compliance with percent 
                reduction targets and for calculating surcharges if the 
                precision of estimates of the proportion of young 
                individuals reporting the use of a type of tobacco 
                product (or, in the case of the manufacturer-specific 
                surcharge, the use of a type of tobacco product of a 
                manufacturer) for the purpose of measuring compliance 
                with percentage reduction targets and calculating 
                surcharges without regard to the 95 percent confidence 
                interval around such point estimates if the precision 
                of estimates of the percentage of young individuals 
                reporting use of a type of tobacco product (or, in the 
                case of the manufacturer-specific surcharge, the use of 
                a type of tobacco product of a manufacturer) is such 
                that the 95 percent confidence interval around such 
                point estimates is no more than plus or minus 1 
                percent.
                    (B) Conclusive accurateness.--A survey using the 
                methodology described in subparagraph (A) shall be 
                deemed conclusively proper, correct and accurate for 
                purposes of this Act. The Secretary may, by notice and 
                comment rulemaking, subsequently adopt a different 
                survey methodology.
                    (C) Final determination.--The determination of the 
                Secretary as to the amount and allocation of the 
                surcharge under this subtitle shall be final and the 
                manufacturer shall pay such surcharge within 30 days of 
                the date on which the manufacturer is assessed. Such 
                payment shall be retained by the Secretary pending 
                final judicial review of what, if any, change in the 
                surcharge is appropriate.
                    (D) Review.--The amount of any surcharge paid under 
                this subtitle shall be subject to judicial review by 
                the United States Court of Appeals for the District of 
                Columbia Circuit, based on the arbitrary and capricious 
                standard of section 706 of title 5, United States Code. 
                Notwithstanding any other provision of law, no court 
                shall have the authority to stay any surcharge payment 
                due to the Secretary under this subtitle pending 
                judicial review until the Secretary has made or failed 
                to make a compliance determination, as described under 
                this subtitle, that has adversely affected the person 
                seeking the review.
                    (E) Nonapplicability.--Chapter 35 of title 44, 
                United States Code, shall not apply to information 
                required for the purposes of carrying out this 
                subsection.
                    (F) Amendment to public health service act.--
                Section 308(d) of the Public Health Service Act (42 
                U.S.C. 242m(d)) is amended--
                            (i) by inserting after ``or 307'' the 
                        following: ``, or a survey conducted under 
                        section 132 of the KIDS Act,''; and
                            (ii) by inserting after ``or 306'' the 
                        following: ``, or in the course of a survey 
                        conducted under section 132 of the KIDS Act,''.
    (d) Administration.--
            (1) Technical adjustments.--The Secretary may make 
        technical changes in the manner in which the surveys are 
        conducted under this section to reflect improved methodology so 
        long as adjustments are made to ensure that the results of the 
        surveys are comparable from year to year.
            (2) Participation in survey.--Notwithstanding any other 
        provision of law, the Secretary may conduct a survey under this 
        section involving minors if the results of such survey with 
        respect to such minors are kept confidential and not disclosed.
    (e) Tobacco Product.--For the purposes of this subtitle, 
cigarettes, cigars, little cigars, smokeless tobacco, and roll-your-own 
tobacco shall each be considered as a separate type of tobacco product.

SEC. 133. REDUCTION IN UNDERAGE TOBACCO PRODUCT USAGE.

    (a) Annual Determination.--The Secretary shall annually determine, 
based on the annual performance surveys under section 132, whether the 
required percentage reductions in underage use of tobacco products (as 
described in subsection (b)) for a year have been achieved for the year 
involved. Such determination shall be based on the average annual 
percentage prevalence of the use of tobacco products by young 
individuals (as determined using the annual surveys conducted by the 
Secretary under section 132) for the year involved as compared to the 
baseline level.
    (b) Required Percentage Reduction in Underage Use of Tobacco 
Products.--For purposes of this section, the required percentage 
reduction from the baseline level in the percentage of underage use of 
tobacco products with respect to each tobacco product shall be as 
follows:
            (1) With respect to calendar year 2000, at least 15 
        percent.
            (2) With respect to calendar year 2001, at least 20 
        percent.
            (3) With respect to calendar year 2002, at least 25 
        percent.
            (4) With respect to calendar year 2003, at least 30 
        percent.
            (5) With respect to calendar year 2004, at least 40 
        percent.
            (6) With respect to calendar year 2005, at least 50 
        percent.
            (7) With respect to calendar year 2006, at least 55 
        percent.
            (8) With respect to calendar year 2007, at least 60 
        percent.
            (9) With respect to calendar year 2008, and each subsequent 
        calendar year, at least 65 percent.
    (c) Required Reduction for Manufacturers.--With respect to the 
average percentage prevalence of the use of each manufacturer's brands 
of tobacco products by young individuals (as determined on the basis of 
the annual performance surveys conducted by the Secretary under section 
132) for a year--
            (1) each manufacturer which manufactured a brand or brands 
        of tobacco product on or before the date of the enactment of 
        this Act shall reduce the percentage of young individuals who 
use such manufacturer's brand or brands as their usual brand in 
accordance with the percentage reductions described under subsection 
(b); and
            (2) each manufacturer which manufactures a new brand or 
        brands of tobacco products (a brand of tobacco product that was 
        not manufactured prior to the date of enactment of this Act) 
        after the date of the enactment of this Act shall ensure that 
        the percentage prevalence of young individuals who use such 
        manufacturer's brand or brands as their usual brand is equal to 
        or less than the de minimis level described in section 134(b).

SEC. 134. NONCOMPLIANCE.

    (a) Industry-Wide Penalty.--
            (1) In general.--If, with respect to a year, the Secretary 
        determines that the required percentage reduction in underage 
        use of a tobacco product has not been achieved as required 
        under section 133(b), the Secretary shall impose an industry-
        wide penalty on the manufacturers of such product in an amount 
        that is equal to the product of--
                    (A) the amount applicable under paragraph (2) for 
                each unit of the tobacco product involved that is sold 
                for consumer use by such manufacturers in the year 
                following the year in which the noncompliance occurs; 
                and
                    (B) the number of percentage points by which the 
                required percentage reduction in underage use of 
                tobacco products under section 133(b) for the year 
                exceeds the actual reduction in the use of such 
                products for the year (as determined under subsection 
                (c)).
            (2) Applicable amount.--The amount applicable for purposes 
        of paragraph (1)(A) for a year shall equal--
                    (A) for the first 10 percentage points by which the 
                required percentage reduction in underage use of 
                tobacco products under section 133(b) for the year 
                exceeds the actual reduction in the use of such 
                products for the year (as determined under subsection 
                (c)), $.01 cent for each such excess percentage point;
                    (B) for each percentage point in excess of 11 and 
                less than 21 by which the required percentage reduction 
                in underage use of tobacco products under section 
                133(b) for the year exceeds the actual reduction in the 
                use of such products for the year (as determined under 
                subsection (c)), $.02 cents for each such excess 
                percentage point; and
                    (C) for each percentage point in excess of 20 by 
                which the required percentage reduction in underage use 
                of tobacco products under section 133(b) for the year 
                exceeds the actual reduction in the use of such 
                products for the year (as determined under subsection 
                (c)), $.03 cents for each such excess percentage point.
            (3) Increased penalty for consecutive failures.--If the 
        Secretary determines that the required percentage reduction in 
        underage use of a type of tobacco product has not been achieved 
        as required under section 133(b) in 3 or more consecutive 
        years, the amount described in paragraph (2) shall be increased 
        by a factor of 2.
            (4) De minimis rule.--The Secretary shall not impose a 
        penalty on a manufacturer under paragraph (1) with respect to a 
        type of tobacco product if the Secretary determines that the 
        percentage of young individuals using such tobacco product (as 
        determined using the annual surveys conducted by the Secretary 
        under section 132) is less than 0.5 percent of the total number 
        of young individuals determined to have used tobacco products 
        in the year involved.
            (5) Payment.--An industry-wide penalty imposed under this 
        subsection for a tobacco product shall be paid by each 
        manufacturer based on each such manufacturers market share for 
        the type of tobacco product involved.
    (b) Manufacturer-Specific Penalty.--
            (1) In general.--With respect to each manufacturer for a 
        year, if the Secretary determines that the required percentage 
        reduction in underage use of a type of tobacco product has not 
        been achieved by such manufacturer as required under section 
        134, the Secretary shall impose a penalty on the tobacco 
        products of such type of such manufacturer in an amount that is 
        equal to the product of--
                    (A) the amount applicable under paragraph (2) for 
                each unit of the tobacco product involved that is sold 
                for consumer use by such manufacturer in the year 
                following the year in which the noncompliance occurs; 
                and
                    (B) the number of percentage points by which the 
                required percentage reduction in underage use of the 
                type of tobacco product of such manufacturer under 
                section 133(b) for the year exceeds the actual 
                reduction in the use of such product of such 
manufacturer for the year (as determined under subsection (c)).
            (2) Applicable amount.--The amount applicable for purposes 
        of paragraph (1)(A) for a year shall equal--
                    (A) for the first 10 percentage points by which the 
                required percentage reduction in underage use of 
                tobacco products under section 133(b) for the year 
                exceeds the actual reduction in the use of such 
                products for the year (as determined under subsection 
                (c)), $.01 cent for each such excess percentage point;
                    (B) for each percentage point in excess of 11 and 
                less than 21 by which the required percentage reduction 
                in underage use of tobacco products under section 
                133(b) for the year exceeds the actual reduction in the 
                use of such products for the year (as determined under 
                subsection (c)), $.02 cents for each such excess 
                percentage point; and
                    (C) for each percentage point in excess of 20 by 
                which the required percentage reduction in underage use 
                of tobacco products under section 133(b) for the year 
                exceeds the actual reduction in the use of such 
                products for the year (as determined under subsection 
                (c)), $.03 cents for each such excess percentage point.
            (3) Increased penalty for consecutive failures.--If the 
        Secretary determines that a particular manufacturer has failed 
        to meet the required percentage reduction in underage use of a 
        type of tobacco product (under section 133(b)) by at least 30 
        percentage points for a period of at least 3 consecutive years, 
        the amount applicable under paragraph (2) shall be, for each 
        percentage point in excess of 30 by which the required 
        percentage reduction in underage use of tobacco products 
        exceeds the actual reduction in the use of such products for 
        the year (as determined under subsection (c)), $.06 cents for 
        each such excess percentage point.
            (4) De minimis rule.--The Secretary shall not impose a 
        penalty on a manufacturer under this subsection for a type of 
        tobacco product for a year if the Secretary determines that the 
        percentage of young individuals identifying a brand of such 
        tobacco product of such manufacturer as the usual brand smoked 
        or used for such year (as determined using the annual surveys 
        conducted by the Secretary under section 132) is less than 0.5 
        percent of the total number of young individuals determined to 
        have used such tobacco products in such year.
            (5) Payment.--Penalties under this section shall be paid 
        within 30 days of the date on which an assessment is made by 
        the Secretary.
    (c) Actual Percentage Reduction in Underage Use of Tobacco 
Products.--For purposes of this section, the term ``actual percentage 
reduction in underage use of tobacco products'' means, with respect to 
a type of tobacco product involved for a year, the percentage 
reduction, as determined by the Secretary using the annual performance 
surveys under section 132, in the use of such tobacco product by young 
individuals as compared to the baseline for such tobacco product under 
section 132(c).
    (d) Procedures.--In assessing penalties under this section, the 
Secretary may apply such statistical methods, including sampling, as 
may be appropriate to increase the accuracy of the estimates from the 
annual performance survey. In determining the industry-wide and 
manufacturer-specific penalties under this section, the Secretary shall 
determine what confidence interval to use from the survey information 
made available from the annual performance survey under section 132.
    (e) Adjustments.--If for any calendar year the Secretary determines 
that the average annual percentage prevalence of the use of tobacco 
products by young individuals (as determined using the annual surveys 
conducted by the Secretary under section 132) for the year involved is 
greater than the baseline level for such products (as determined under 
section 132(b)), the amount determined under subsections (a)(1) and 
(b)(1) shall be adjusted to reflect the--
            (1) the percentage point amount applicable under section 
        133(b); and
            (2) the percentage increase in the average annual 
        percentage prevalence of the use of the tobacco products 
        involved by individuals who are under 18 years of age for the 
        year (as determined under section 132) compared to the baseline 
        level for such products (as determined under section 132(b)).
    (f) Penalties Nondeductible.--The payment of penalties under this 
subtitle shall not be considered to be an ordinary and necessary 
expense in carrying on a trade or business for purposes of the Internal 
Revenue Code of 1986 and shall not be deductible.
    (g) Use of Amounts.--With respect to amounts paid by manufacturers 
under this section or section 135, the Secretary shall use such amounts 
as follows:
            (1) \1/3\ of such amounts shall be used for smoking 
        cessation programs under chapter 2 of subtitle B of title III.
            (2) \1/3\ of such amounts shall be used for community and 
        school-based prevention programs under subtitle A, and counter 
        advertising under chapter 1 of subtitle B, of title III.
            (3) \1/3\ of such amounts shall be used for biomedical and 
        applied research under subtitle C of title III.
    (h) Judicial Review.--A manufacturer of tobacco products may seek 
judicial review of any action under this subtitle only after the 
assessment involved has been paid by the manufacturer to the Department 
of the Treasury and only in the United States District Court for the 
District of Columbia.
    (i) Limitation on Penalties for Noncompliance.--With respect to 
penalties applicable for a year under this section, the sum of the 
penalties imposed shall not exceed $10,000,000,000 per year, increased 
by the increase in the Consumer Price Index for the year involved. In 
complying with this subsection, the Secretary shall apply penalties 
under subsection (b) prior to the application of penalties under 
subsection (a).

SEC. 135. ENFORCEMENT.

    (a) Initial Penalty.--There is hereby imposed an initial penalty on 
the failure of any manufacturer to make any payment required under this 
subtitle within 30 days after the date on which such payment is due.
    (b) Amount of Penalty.--The amount of the penalty imposed by 
subsection (a) on any failure with respect to a manufacturer shall be 
the greater of $100,000 or an amount equal to 2 percent of the penalty 
owed under section 134 for each day during the noncompliance period.
    (c) Noncompliance Period.--For purposes of this section, the term 
``noncompliance period'' means, with respect to any failure to make the 
surcharge payment required under this subtitle, the period--
            (1) beginning on the due date for such payment; and
            (2) ending on the date on which such payment is paid in 
        full.
    (d) Limitations.--No penalty shall be imposed by subsection (a) on 
any failure to make a surcharge payment under this subtitle during any 
period for which it is established to the satisfaction of the Secretary 
that none of the persons responsible for such failure knew or, 
exercising reasonable diligence, would have known, that such failure 
existed.

              TITLE II--REGULATION OF THE TOBACCO INDUSTRY

   Subtitle A--Food and Drug Administration Jurisdiction and General 
                               Authority

SEC. 201. STATEMENT OF GENERAL AUTHORITY.

    The regulations promulgated by the Secretary in the rule dated 
August 28, 1996 (Vol. 61, No. 168 C.F.R.), adding part 897 to title 21, 
Code of Federal Regulations, shall be deemed to have been lawfully 
promulgated under the Food, Drug and Cosmetic Act as amended by this 
title. Such regulations shall apply to all tobacco products.

SEC. 202. NONAPPLICABILITY TO OTHER DRUGS OR DEVICES.

    Nothing in this Act, or an amendment made by this title, shall be 
construed to affect the regulation of drugs and devices that are not 
tobacco products by the Secretary under the Federal Food, Drug and 
Cosmetic Act.

SEC. 203. CONFORMING AMENDMENTS TO CONFIRM JURISDICTION.

    (a) Definitions.--
            (1) Drug.--Section 201(g)(1) of the Federal Food, Drug, and 
        Cosmetic Act (21 U.S.C. 321 (g)(1)) is amended by striking 
        ``and (D)'' and inserting ``(D) nicotine in tobacco products, 
        and (E)''.
            (2) Device.--Section 201(h) of the Federal Food, Drug, and 
        Cosmetic Act (21 U.S.C. 321(h)) is amended--
                    (A) in paragraph (2), by striking ``or'' at the 
                end;
                    (B) in paragraph (3), by striking ``and'' at the 
                end and inserting ``or''; and
                    (C) by inserting after paragraph (3), the 
                following:
            ``(4) nicotine-containing tobacco products, and''.
            (3) Additional definitions.--Section 201 of the Federal 
        Food, Drug and Cosmetic Act (21 U.S.C. 321) is amended by 
        adding at the end the following:
    ``(kk) The term `cigarette' means any product that contains 
nicotine, is intended to be burned under ordinary conditions of use, 
and consists of--
            ``(1) any roll of tobacco wrapped in paper or in any 
        substance not containing tobacco; or
            ``(2) any roll of tobacco wrapped in any substance 
        containing tobacco 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 described in paragraph (1).
    ``(ll) The term `cigarette tobacco' means any product that consists 
of loose tobacco that contains or delivers nicotine and is intended for 
use by consumers in a cigarette. Unless otherwise stated, the 
requirements for cigarettes shall also apply to cigarette tobacco.
    ``(mm) The term `cigar' means any roll of tobacco wrapped in leaf 
tobacco or in any substance containing tobacco (other than any roll of 
tobacco that is a cigarette or little cigar with the meaning of 
paragraph (kk) or (oo).
    ``(nn) The term `distributor' with respect to a tobacco product 
means any person who furthers the distribution of cigarette or 
smokeless tobacco, whether domestic or imported, at any point from the 
original place of manufacture to the person who sells or distributes 
the product to individuals for personal consumption. Common carriers 
shall not be considered distributors for purposes of this Act.
    ``(oo) The term `little cigar' means any roll of tobacco wrapped in 
leaf tobacco or any substance containing tobacco (other than any roll 
of tobacco which is a cigarette) and as to which 1,000 units weigh not 
more than 3 pounds.
    ``(pp) The term `manufacturer' means any person, including any 
repacker or relabeler, who manufactures, fabricates, assembles, 
processes, packs, or labels a tobacco product. Any successor or assign 
of a manufacturer, as well as any person affiliated with the 
manufacturer, shall have all of the manufacturer's responsibilities and 
liabilities under this Act.
    ``(qq) The term `nicotine' means the chemical substance named 3-(1-
Methyl-2-pyrrolidinyl)pyridine or 
C<INF>10</INF>H<INF>14</INF>N<INF>2</INF>, including any salt or 
complex of nicotine.
    ``(rr) The term `package' means the innermost sealed contained, 
irrespective of the material from which such container is made, in 
which a tobacco product is placed by the manufacturer and in which such 
tobacco product is offered for sale to a member of the general public.
    ``(ss) The term `person' means a firm, partnership, association, 
corporation, legal representative, trustee, receiver or any other 
legally recognized entity.
    ``(tt) The term `pipe tobacco' means any loose tobacco that, 
because of its appearance, type, packaging, or labeling is likely to be 
offered to or purchased by, consumers as a tobacco product to be smoked 
in a pipe.
    ``(uu) The term `point-of-sale' means any location at which a 
consumer can purchase or otherwise obtain tobacco products for personal 
consumption.
    ``(vv) The term `retailer' means any person who sells tobacco 
products to individuals for personal consumption or who operates a 
facility where vending machines or self-service displays are permitted 
under this Act.
    ``(ww) The term `roll-your-own' means 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.
    ``(xx) The term `smokeless tobacco' means any product that consists 
of cut, ground, powdered or leaf tobacco that contains nicotine and 
that is intended to be placed in the oral or nasal cavity.
    ``(yy) The term `tobacco product' means any product made of or 
derived from tobacco leaf for human consumption, including, but not 
limited to, cigarettes, cigarillos, cigarette tobacco, cigars, little 
cigars, pipe tobacco, smokeless tobacco, and roll-your-own tobacco.''.
            (4) Combination of products.--Section 503(g) of the Federal 
        Food, Drug, and Cosmetic Act (21 U.S.C. 353(g)) is amended by 
        inserting ``(including any tobacco product)'' after 
        ``products'' the first place that such appears.
    (b) Prohibited Acts.--Section 301 of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 331) is amended by adding at the end the 
following:
    ``(x) The manufacture, labeling, distribution, advertising and sale 
of any adulterated or misbranded tobacco product in violation of--
            ``(1) regulations issued under this Act; or
            ``(2) the KIDS Act, or regulations issued under such 
        Act.''.
    (c) Adulterated Drugs and Devices.--
            (1) In general.--Section 501 of the Federal Food, Drug, and 
        Cosmetic Act (21 U.S.C. 351) is amended by adding at the end 
        the following:
    ``(j) If it is a tobacco product and it does not comply with the 
provisions of subchapter D of this chapter or the KIDS Act.''.
            (2) Misbranding.--Section 502(q) of the Federal Food, Drug, 
        and Cosmetic Act (21 U.S.C. 352(q)) is amended--
                    (A) by striking ``or (2)'' and inserting in lieu 
                thereof ``(2)''; and
                    (B) by inserting before the period the following: 
                ``, or (3) in the case of a tobacco product, it is 
                sold, distributed, advertised, labeled, or used in 
                violation of this Act or the KIDS Act, or regulations 
                prescribed under such Acts''.
    (d) Restricted Device.--Section 520(e) of the Federal Food, Drug, 
and Cosmetic Act (21 U.S.C. 360j(e)) is amended--
            (1) in paragraph (1), by striking ``or use--'' and 
        inserting ``or use, including restrictions on the access to, 
        and the advertising and promotion of, tobacco products--''; and
            (2) by adding at the end the following:
    ``(3) Tobacco products are a restricted device under this 
paragraph.''.
    (e) Regulatory Authority.--Section 503(g) (21 U.S.C. 353(g)) is 
amended by adding at the end the following:
    ``(5) The Secretary may regulate any tobacco product as a drug, 
device, or both, and may designate the office of the Administration 
that shall be responsible for regulating such products.''.

SEC. 204. GENERAL RULE.

    Section 513(a)(1)(B) of the Federal Food, Drug and Cosmetic Act (21 
U.S.C. 360c(a)(1)(B)) is amended by adding at the end the following: 
``The sale of tobacco products to adults that comply with performance 
standards established for these products under section 514 and other 
provisions of this Act and any regulations prescribed under this Act 
shall not be prohibited by the Secretary, notwithstanding sections 
502(j), 516, and 518.''.

SEC. 205. SAFETY AND EFFICACY STANDARD AND RECALL AUTHORITY.

    (a) Safety and Efficacy Standard.--Section 513(a) (21 U.S.C. 
360c(a)) is amended--
            (1) in paragraph (1)(B), by inserting after the first 
        sentence the following: ``For a device which is a tobacco 
        product, the assurance in the previous sentence need not be 
        found if the Secretary finds that special controls achieve the 
        best public health result.''; and
            (2) in paragraph (2)--
                    (A) by redesignating subparagraphs (A), (B) and (C) 
                as clauses (i), (ii) and (iii), respectively;
                    (B) by striking ``(2) For'' and inserting ``(2)(A) 
                For''; and
                    (C) by adding at the end the following:
    ``(B) For purposes of paragraph (1)(B), subsections (c)(2)(C), 
(d)(2)(B), (e)(2)(A), (f)(3)(B)(i), and (f)(3)(C)(i), and sections 514, 
519(a), 520(e), and 520(f), the safety and effectiveness of a device 
that is a tobacco product need not be found if the Secretary finds that 
the action to be taken under any such provision would achieve the best 
public health result. The finding as to whether the best public health 
result has been achieved shall be determined with respect to the risks 
and benefits to the population as a whole, including users and non-
users of the tobacco product, and taking into account--
            ``(i) the increased or decreased likelihood that existing 
        consumers of tobacco products will stop using such products; 
        and
            ``(ii) the increased or decreased likelihood that those who 
        do not use tobacco products will start using such products.''.
    (b) Recall Authority.--Section 518(e)(1) (21 U.S.C. 360h(e)(1)) is 
amended by inserting after ``adverse health consequences or death,'' 
the following: ``and for tobacco products that the best public health 
result would be achieved,''.

               Subtitle B--Regulation of Tobacco Products

SEC. 211. PERFORMANCE STANDARDS.

    Section 514(a) of the Federal Food, Drug, and Cosmetic Act (21 
U.S.C. 60d(a)) is amended--
            (1) in paragraph (2), by striking ``device'' and inserting 
        ``nontobacco product device'';
            (2) by redesignating paragraphs (3) and (4) as paragraphs 
        (6) and (7), respectively; and
            (3) by inserting after paragraph (2) the following:
    ``(3) The Secretary may adopt a performance standard under section 
514(a)(2) for a tobacco product regardless of whether the product has 
been classified under section 513. Such standard may--
            ``(A) include provisions to achieve the best public health 
        result;
            ``(B) where necessary to achieve the best public health 
        result, include--
                    ``(i) provisions respecting the construction, 
                components, constituents, ingredients, and properties 
                of the tobacco product device, including the reduction 
                or elimination (or both) of nicotine and the other 
                components, ingredients, and constituents of the 
                tobacco product, its components and its by-products, 
                based upon the best available technology;
                    ``(ii) provisions for the testing (on a sample 
                basis or, if necessary, on an individual basis) of the 
                tobacco product device or, if it is determined that no 
                other more practicable means are available to the 
                Secretary to assure the conformity of the tobacco 
                product device to such standard, provisions for the 
                testing (on a sample basis or, if necessary, on an 
                individual basis) by the Secretary or by another person 
                at the direction of the Secretary;
                    ``(iii) provisions for the measurement of the 
                performance characteristics of the tobacco product 
                device;
                    ``(iv) provisions requiring that the results of 
                each test or of certain tests of the tobacco product 
                device required to be made under clause (ii) 
                demonstrate that the tobacco product device is in 
                conformity with the portions of the standard for which 
                the test or tests were required; and
                    ``(v) a provision that the sale and distribution of 
                the tobacco product device be restricted but only to 
                the extent that the sale and distribution of a tobacco 
                product device may otherwise be restricted under this 
                Act; and
            ``(C) where appropriate, require the use and prescribe the 
        form and content of labeling for the use of the tobacco product 
        device.
    ``(4) Not later than 1 year after the date of enactment of this 
paragraph, the Secretary (acting through the Commissioner of Food and 
Drugs) shall establish a Scientific Advisory Committee to evaluate 
whether a level or range of levels exists at which nicotine yields do 
not produce drug-dependence. The Advisory Committee shall also review 
any other safety, dependence or health issue assigned to it by the 
Secretary. The Secretary need not promulgate regulations to establish 
the Committee.''.

SEC. 212. APPLICATION OF FEDERAL FOOD, DRUG, AND COSMETIC ACT TO 
              TOBACCO PRODUCTS.

    (a) Tobacco Products Regulation.--Chapter V of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 351 et seq.) is amended by adding at 
the end the following:

``SUBCHAPTER F--TOBACCO PRODUCT DEVELOPMENT, MANUFACTURING, AND ACCESS 
              RESTRICTIONS, LICENSING, AND ANTI-SMUGGLING

   ``PART A--TOBACCO PRODUCT DEVELOPMENT, MANUFACTURING, AND ACCESS 
                              RESTRICTIONS

``SEC. 570. PROMULGATION OF REGULATIONS.

    ``Any regulations necessary to implement this subchapter shall be 
promulgated not later than 12 months after the date of enactment of 
this subchapter using notice and comment rulemaking (in accordance with 
chapter 5 of title 5, United States Code). Such regulations may 
be revised thereafter as determined necessary by the Secretary.

``SEC. 571. MAIL-ORDER SALES.

    ``(a) In General.--Not later than 2 years after the date of 
enactment of this subchapter, the Secretary shall review and determine 
whether persons under the age of 18 years are obtaining tobacco 
products by means of the mail.
    ``(b) Restrictions.--Based solely upon the review conducted under 
subsection (a), the Secretary may take regulatory and administrative 
action to restrict or eliminate mail order sales of tobacco products.

``SEC. 572. TOBACCO PRODUCT WARNINGS AND PACKAGING.

    ``(a) Cigarette Warnings.--
            ``(1) In general.--
                    ``(A) Packaging.--It shall be unlawful for any 
                person to manufacture, package, or import for sale or 
                distribution any cigarettes the package of which fails 
                to bear, in accordance with the requirements of this 
                subsection, one of the following labels:
                        ``WARNING: Cigarettes Are Addictive.
                        ``WARNING: Tobacco Smoke Can Harm Your 
                        Children.
                        ``WARNING: Cigarettes Cause Fatal Lung Disease.
                        ``WARNING: Cigarettes Cause Cancer.
                        ``WARNING: Cigarettes Cause Strokes And Heart 
                        Disease.
                        ``WARNING: Smoking During Pregnancy Can Harm 
                        Your Baby.
                        ``WARNING: Smoking Can Kill You.
                        ``WARNING: Tobacco Smoke Causes Fatal Lung 
                        Disease In Nonsmokers.
                        ``WARNING: Quitting Smoking Now Greatly Reduces 
                        Serious Risks To Your Health.
                    ``(B) Advertising.--It shall be unlawful for any 
                manufacturer, importer, distributor or retailer of 
                cigarettes to advertise or cause to be advertised any 
cigarette unless the advertising bears, in accordance with the 
requirements of this subsection, one of the following labels:
                        ``WARNING: Cigarettes Are Addictive.
                        ``WARNING: Tobacco Smoke Can Harm Your 
                        Children.
                        ``WARNING: Cigarettes Cause Fatal Lung Disease.
                        ``WARNING: Cigarettes Cause Cancer.
                        ``WARNING: Cigarettes Cause Strokes And Heart 
                        Disease.
                        ``WARNING: Smoking During Pregnancy Can Harm 
                        Your Baby.
                        ``WARNING: Smoking Can Kill You.
                        ``WARNING: Tobacco Smoke Causes Fatal Lung 
                        Disease In Nonsmokers.
                        ``WARNING: Quitting Smoking Now Greatly Reduces 
                        Serious Risks To Your Health.
                    ``(C) Additional warnings.--Beginning on the date 
                that is 18 months after the date of enactment of this 
                subchapter, the Secretary may substitute for, or 
                require warnings in addition to, those otherwise 
                required under subparagraphs (A) and (B) if the 
                Secretary determines that such warnings would be more 
                effective in deterring the use of cigarettes.
            ``(2) Requirements for labeling.--
                    ``(A) Location.--Each label statement required by 
                subparagraph (A) of paragraph (1) shall be located on 
                the upper portion of the front and rear panels of the 
                cigarette package (or carton) directly on the package 
                underneath the cellophane or other clear wrapping and 
                occupy not less than 25 percent of such panels.
                    ``(B) Type and color.--With respect to each label 
                statement required by subparagraph (A) of paragraph 
                (1), the phrase `WARNING' shall appear in capital 
                letters and the label statement shall be printed in 17 
                point type with adjustments as determined appropriate 
                by the Secretary to reflect the length of the required 
                statement. All the letters in the label shall appear in 
                conspicuous and legible type, in contrast by 
                typography, layout, or color with all other printed 
                material on the package, and be printed in an 
                alternating black-on-white and white-on-black format as 
                determined appropriate by the Secretary.
                    ``(C) Exception.--With respect to cigarettes 
                manufactured and distributed prior to January 1, 2000, 
                the provisions of subparagraph (A) shall not apply with 
                respect to the front panel in the case of a flip-top 
                cigarette package (offered for sale prior to or on June 
                1, 1997) where the front portion of the flip-top does 
                not comprise at least 25 percent of the front panel. In 
                the case of such a package, the label statement 
                required by subparagraph (A) of paragraph (1) shall 
                occupy the entire front portion of the flip-top.
            ``(3) Requirements for advertising.--
                    ``(A) Location.--Each label statement required by 
                subparagraph (B) of paragraph (1) shall appear in a 
                conspicuous and prominent format and location at the 
                top of each advertisement within the trim area and 
                shall occupy not less than 20 percent of the area of 
                the advertisement involved.
                    ``(B) Type, color and format.--
                            ``(i) Type.--With respect to each label 
                        statement required by subparagraph (B) of 
                        paragraph (1), the phrase `WARNING' shall 
                        appear in capital letters and the label 
                        statement shall be printed in the following 
                        types:
                                    ``(I) With respect to whole page 
                                advertisements on broadsheet 
                                newspaper--45 point type.
                                    ``(II) With respect to half page 
                                advertisements on broadsheet 
                                newspaper--39 point type.
                                    ``(III) With respect to whole page 
                                advertisements on tabloid newspaper--39 
                                point type.
                                    ``(IV) With respect to half page 
                                advertisements on tabloid newspaper--27 
                                point type.
                                    ``(V) With respect to DPS magazine 
                                advertisements--31.5 point type.
                                    ``(VI) With respect to whole page 
                                magazine advertisements--31.5 point 
                                type.
                                    ``(VII) With respect to 28cm x 3 
                                column advertisements--22.5 point type.
                                    ``(VIII) With respect to 20cm x 2 
                                column advertisements--15 point type.
                        Within the 20 percent requirement described in 
                        subparagraph (A), the Secretary may revise the 
                        required type sizes if the Secretary determines 
                        that such revisions will enhance public health 
                        protections.
                            ``(ii) Color.--All the letters in the label 
                        under this subparagraph shall appear in 
                        conspicuous and legible type, in contrast by 
                        typography, layout, or color with all other 
                        printed material on the package, and be printed 
                        in an alternating black-on-white and white-on-
                        black format as determined appropriate by the 
                        Secretary.
                            ``(iii) Format.--The label statements under 
                        subparagraph (B) of paragraph (1) shall be 
                        black when the background is white and white 
                        when the background is black, and shall be in 
                        the point size required under this 
                        subparagraph. The label statements shall be 
                        enclosed by a rectangular border that is the 
                        same color as the letters of the statements and 
                        that is the width of the first down stroke of 
                        the capital `W' of the word `WARNING' in the 
                        label statements.
                    ``(C) Language requirement.--The label statements 
                required under paragraph (1)(B) shall be in English, 
                except that--
                            ``(i) in the case of an advertisement that 
                        appears in a newspaper, magazine, periodical or 
                        other publication that is not in English, such 
                        statements shall appear in the predominant 
                        language of the publication; or
                            ``(ii) in the case of any other 
                        advertisement that is not in English, such 
                        statements shall appear in the same language as 
                        that principally used in the advertisement.
            ``(4) Rotation of label statements.--
                    ``(A) Labeling.--The label statements specified in 
                subparagraph (A) of paragraph (1) shall be randomly 
                displayed in each 12 month period, in as equal a number 
                of times as is possible on each brand of the product 
                and be randomly distributed in all areas of the United 
                States in which such product is marketed in accordance 
                with a plan submitted by the manufacturer, importer, 
                distributor or retailer and approved by the Secretary.
                    ``(B) Advertising.--The label statements specified 
                in subparagraph (B) of paragraph (1) shall be rotated 
                quarterly in alternating sequence in advertisements for 
                each such brand of cigarettes in accordance with a plan 
                submitted by the manufacturer, importer, distributor or 
                retailer and approved by the Secretary.
                    ``(C) Approval of plans.--The Secretary shall 
                review each plan submitted by a manufacturer, importer, 
                distributor or retailer of cigarettes under this 
                paragraph and approve such plan if the plan will 
                provide for the equal distribution and display on 
                packaging and the rotation required in advertising 
                under this paragraph and if such plan assures that all 
                of the labels required under subparagraphs (A) and (B) 
                will be displayed by the manufacturer, importer, 
                distributor or retailer at the same time.
    ``(b) Smokeless Tobacco Products.--
            ``(1) In general.--
                    ``(A) Packaging.--It shall be unlawful for any 
                person to manufacture, package, or import for sale or 
                distribution any smokeless tobacco product the package 
                of which fails to bear, in accordance with the 
                requirements of this subsection, one of the following 
                labels:
                        ``WARNING: This Product Can Cause Mouth Cancer.
                        ``WARNING: This Product Can Kill You.
                        ``WARNING: This Product Can Cause Gum Disease 
                        And Tooth Loss.
                        ``WARNING: This Product Is Not A Safe 
                        Alternative To Cigarettes.
                        ``WARNING: This Product Contains Cancer-Causing 
                        Chemicals.
                        ``WARNING: Smokeless Tobacco Is Addictive.
                    ``(B) Advertising.--It shall be unlawful for any 
                manufacturer, importer, distributor or retailer of 
                smokeless tobacco products to advertise or cause to be 
                advertised any smokeless tobacco product unless the 
                advertising bears, in accordance with the requirements 
                of this subsection, one of the following labels:
                        ``WARNING: This Product Can Cause Mouth Cancer.
                        ``WARNING: This Product Can Kill You.
                        ``WARNING: This Product Can Cause Gum Disease 
                        And Tooth Loss.
                        ``WARNING: This Product Is Not A Safe 
                        Alternative To Cigarettes.
                        ``WARNING: This Product Contains Cancer-Causing 
                        Chemicals.
                        ``WARNING: Smokeless Tobacco Is Addictive.
                    ``(C) Additional warnings.--Beginning on the date 
                that is 18 months after the date of enactment of this 
                subchapter, the Secretary may substitute for, or 
                require warnings in addition to, those otherwise 
                required under subparagraphs (A) and (B) if the 
                Secretary determines that such warnings would be more 
                effective in deterring the use of smokeless tobacco 
                products.
            ``(2) Requirements for labeling.--
                    ``(A) Location.--Each label statement required by 
                subparagraph (A) of paragraph (1) shall be located on 
                the 2 most prominent display panels of the product and 
                occupy not less than 25 percent of such panels.
                    ``(B) Type and color.--With respect to each label 
                statement required by subparagraph (A) of paragraph 
                (1), the phrase `WARNING' shall appear in capital 
                letters and the label statement shall be printed in 17 
                point type with adjustments as determined appropriate 
                by the Secretary to reflect the length of the required 
                statement and the size of the package. All the letters 
                in the label shall appear in conspicuous and legible 
                type in contrast by typography, layout, or color with 
                all other printed material on the package and be 
                printed in an alternating black-on-white and white-on-
                black format as determined appropriate by the 
                Secretary.
            ``(3) Advertising and rotation.--The provisions of 
        paragraph (3) and (4) of subsection (a) shall apply to 
        advertisements for smokeless tobacco products and the rotation 
        of the label statements required under paragraph (1)(A) on such 
        products.
    ``(c) Other Tobacco Products.--The Secretary shall prescribe such 
regulations as may be necessary to establish warning labels for other 
tobacco product packaging, labeling and advertising.
    ``(d) Rules of Construction.--
            ``(1) In general.--Nothing in this section shall be 
        construed to limit the ability of the Secretary to change the 
        text or layout of any of the warning statements, or any of the 
        labeling provisions, under subsections (a) and (b) and other 
        provisions of this Act, if determined necessary by the 
        Secretary in order to make such statements or labels larger, 
        more prominent, more conspicuous, or more effective.
            ``(2) Unfair acts.--Nothing in this section (other than the 
        requirements of subsections (a), (b) and (c)) shall be 
        construed to limit or restrict the authority of the Federal 
        Trade Commission with respect to unfair or deceptive acts or 
        practices in the advertising of tobacco products.
    ``(e) Limited Preemption.--
            ``(1) State and local action.--No warning label with 
        respect to tobacco products, or any other tobacco product for 
        which warning labels have been required under this section, 
        other than the warning labels required under this Act, shall be 
        required by any State or local statute or regulation to be 
        included on any package of a tobacco product.
            ``(2) Effect on liability law.--Nothing in this section 
        shall relieve any person from liability at common law or under 
        State statutory law to any other person.
    ``(f) Violation of Section.--Any tobacco product that is in 
violation of this section shall be deemed to be misbranded.

``SEC. 573. GENERAL RESPONSIBILITIES OF MANUFACTURERS, DISTRIBUTORS AND 
              RETAILERS.

    ``Each manufacturer, distributor, and retailer shall ensure that 
the tobacco products it manufactures, labels, advertises, packages, 
distributes, sells, or otherwise holds for sale comply with all 
applicable requirements of this Act.

``SEC. 574. DISCLOSURE AND REPORTING OF TOBACCO AND NONTOBACCO 
              INGREDIENTS AND CONSTITUENTS.

    ``(a) Disclosure of All Ingredients.--
            ``(1) Immediate and annual disclosure.--Not later than 30 
        days after the date of enactment of this subchapter, and 
        annually thereafter, each manufacturer of a tobacco product 
        shall submit to the Secretary an ingredient list for each brand 
        of tobacco product it manufactures that contains the 
        information described in paragraph (2).
            ``(2) Requirements.--The list described in paragraph (1) 
        shall, with respect to each brand or variety of tobacco product 
        of a manufacturer, include--
                    ``(A) a list of all ingredients, constituents, 
                substances, and compounds that are found in or added to 
                the tobacco or tobacco product (including the paper, 
                filter, or packaging of the product if applicable) in 
                the manufacture of the tobacco product, for each brand 
                or variety of tobacco product so manufactured, 
                including, if determined necessary by the Secretary, 
                any material added to the tobacco used in the product 
                prior to harvesting;
                    ``(B) the quantity of the ingredients, 
                constituents, substances, and compounds that are listed 
                under subparagraph (A) in each brand or variety of 
                tobacco product;
                    ``(C) the nicotine content of the product, measured 
                in milligrams of nicotine;
                    ``(D) for each brand or variety of cigarettes--
                            ``(i) the filter ventilation percentage 
                        (the level of air dilution in the cigarette as 
                        provided by the ventilation holes in the 
                        filter, described as a percentage);
                            ``(ii) the pH level of the smoke of the 
                        cigarette; and
                            ``(iii) the tar, unionized (free) nicotine, 
                        and carbon monoxide delivery level and any 
                        other smoking conditions established by the 
                        Secretary, reported in milligrams of tar, 
                        nicotine, and carbon monoxide per cigarette;
                    ``(E) for each brand or variety of smokeless 
                tobacco products--
                            ``(i) the pH level of the tobacco;
                            ``(ii) the moisture content of the tobacco 
                        expressed as a percentage of the weight of the 
                        tobacco; and
                            ``(iii) the nicotine content--
                                    ``(I) for each gram of the product, 
                                measured in milligrams of nicotine;
                                    ``(II) expressed as a percentage of 
                                the dry weight of the tobacco; and
                                    ``(III) with respect to unionized 
                                (free) nicotine, expressed as a 
                                percentage per gram of the tobacco and 
                                expressed in milligrams per gram of the 
                                tobacco; and
                    ``(F) any other information determined appropriate 
                by the Secretary.
            ``(3) Methods.--The Secretary shall have the authority to 
        promulgate regulations to establish the methods to be used by 
        manufacturers in making the determinations required under 
        paragraph (2).
            ``(4) Other tobacco products.--The Secretary shall 
        prescribe such regulations as may be necessary to establish 
        information disclosure procedures for other tobacco products.
    ``(b) Safety Assessments.--
            ``(1) Application to new ingredients.--
                    ``(A) In general.--Not later than 1 year after the 
                date of enactment of this subchapter, and annually 
                thereafter, each manufacturer shall submit to the 
                Secretary a safety assessment for each new ingredient, 
                constituent, substance, or compound that such 
                manufacturer desires to make a part of a tobacco 
                product. Such new ingredient, constituent, substance, 
                or compound shall not be included in a tobacco product 
                prior to approval by the Secretary of such a safety 
                assessment.
                    ``(B) Method of filing.--A safety assessment 
                submitted under subparagraph (A) shall be signed by an 
                officer of the manufacturer who is acting on behalf of 
                the manufacturer and who has the authority to bind the 
                manufacturer, and contain a statement that ensures that 
                the information contained in the assessment is true, 
                complete and accurate.
                    ``(C) Definition of new ingredient.--For purposes 
                of subparagraph (A), the term `new ingredient, 
                constituent, substance, or compound' means an 
                ingredient, constituent, substance, or compound listed 
                under subsection (a)(1) that was not used in the brand 
                or variety of tobacco product involved prior to January 
                1, 1998.
            ``(2) Application to other ingredients.--With respect to 
        the application of this section to ingredients, constituents 
        substances, or compounds listed under subsection (a) to which 
        paragraph (1) does not apply, all such ingredients, 
        constituents, substances, or compounds shall be reviewed 
        through the safety assessment process within the 5-year period 
        beginning on the date of enactment of this subchapter. The 
        Secretary shall develop a procedure for the submission of 
        safety assessments of such ingredients, constituents, 
        substances, or compounds that staggers such safety assessments 
        within the 5-year period.
            ``(3) Basis of assessment.--The safety assessment of an 
        ingredient, constituent, substance, or compound described in 
        paragraphs (1) and (2) shall--
                    ``(A) be based on the best scientific evidence 
                available at the time of the submission of the 
                assessment; and
                    ``(B) demonstrate that there is a reasonable 
                certainty among experts qualified by scientific 
                training and experience who are consulted, that the 
                ingredient, constituent, substance, or compound will 
                not present any risk to consumers or the public in the 
                quantities used under the intended conditions of use.
    ``(c) Prohibition.--
            ``(1) Regulations.--Not later than 12 months after the date 
        of enactment of this subchapter, the Secretary shall promulgate 
        regulations to prohibit the use of any ingredient, constituent, 
        substance, or compound in the tobacco product of a 
        manufacturer--
                    ``(A) if no safety assessment has been submitted by 
                the manufacturer for the ingredient, constituent, 
                substance, or compound as otherwise required under this 
                section; or
                    ``(B) if the Secretary finds that the manufacturer 
                has failed to demonstrate the safety of the ingredient, 
                constituent, substance, or compound that was the 
                subject of the assessment under paragraph (2).
            ``(2) Review of assessments.--
                    ``(A) General review.--Not later than 180 days 
                after the receipt of a safety assessment under 
                subsection (b), the Secretary shall review the findings 
contained in such assessment and approve or disapprove of the safety of 
the ingredient, constituent, substance, or compound that was the 
subject of the assessment. The Secretary may, for good cause, extend 
the period for such review. The Secretary shall provide notice to the 
manufacturer of an action under this subparagraph.
                    ``(B) Inaction by secretary.--If the Secretary 
                fails to act with respect to an assessment of an 
                existing ingredient, constituent, substance, or 
                additive during the period referred to in subparagraph 
                (A), the manufacturer of the tobacco product involved 
                may continue to use the ingredient, constituent, 
                substance, or compound involved until such time as the 
                Secretary makes a determination with respect to the 
                assessment.
    ``(d) Right To Know; Full Disclosure of Ingredients to the 
Public.--
            ``(1) In general.--Except as provided in paragraph (3), a 
        package of a tobacco product shall disclose all ingredients, 
        constituents, substances, or compounds contained in the product 
        in accordance with regulations promulgated under section 701(a) 
        by the Secretary.
            ``(2) Disclosure of percentage of domestic and foreign 
        tobacco.--The regulations referred to in paragraph (1) shall 
        require that the package of a tobacco product disclose, with 
        respect to the tobacco contained in the product--
                    ``(A) the percentage that is domestic tobacco; and
                    ``(B) the percentage that is foreign tobacco.
            ``(3) Health disclosure.--Notwithstanding section 301(j), 
        the Secretary may require the public disclosure of any 
        ingredient, constituent, substance, or compound contained in a 
        tobacco product that relates to a trade secret or other matter 
        referred to in section 1905 of title 18, United States Code, if 
        the Secretary determines that such disclosure will promote the 
        public health.

``SEC. 575. REDUCED RISK PRODUCTS.

    ``(a) Prohibition.--
            ``(1) In general.--No manufacturer, distributor or retailer 
        of tobacco products may make any direct or implied statement in 
        advertising or on a product package that could reasonably be 
        interpreted to state or imply a reduced health risk associated 
        with a tobacco product unless the manufacturer demonstrates to 
        the Secretary, in such form as the Secretary may require, that 
        based on the best available scientific evidence the product 
        significantly reduces the overall health risk to the public 
        when compared to other tobacco products.
            ``(2) Submission to secretary.--Prior to making any 
        statement described in paragraph (1), a manufacturer, 
        distributor or retailer shall submit such statement to the 
        Secretary, who shall review such statement to ensure its 
        accuracy and, in the case of advertising, to prevent such 
        statement from increasing, or preventing the contraction of, 
        the size of the overall market for tobacco products.
    ``(b) Determination by Secretary.--If the Secretary determines that 
a statement described in subsection (a)(2) is permissible because the 
tobacco product does present a significantly reduced overall health 
risk to the public, the Secretary may permit such statement to be made.
    ``(c) Development or Acquisition of Reduced Risk Technology.--
            ``(1) In general.--Any manufacturer that develops or 
        acquires any technology that the manufacturer reasonably 
        believes will reduce the risk from tobacco products shall 
        notify the Secretary of the development or acquisition of the 
        technology. Such notice shall be in such form and within such 
        time as the Secretary shall require.
            ``(2) Confidentiality.--With respect to any technology 
        described in paragraph (1) that is in the early stages of 
        development (as determined by the Secretary), the Secretary 
        shall establish protections to ensure the confidentiality of 
        any proprietary information submitted to the Secretary under 
        this subsection during such development.

``SEC. 576. ACCESS TO COMPANY INFORMATION.

    ``(a) Compliance Procedures.--Each manufacturer of tobacco products 
shall establish procedures to ensure compliance with this Act.
    ``(b) Requirement.--In addition to any other disclosure obligations 
under this Act, the KIDS Act, or any other law, each manufacturer of 
tobacco products shall, not later than 90 days after the date of the 
enactment of the KIDS Act and thereafter as required by the Secretary, 
disclose to the Secretary all nonpublic information and research in its 
possession or control relating to the addiction or dependency, or the 
health or safety of tobacco products, including (without limitation) 
all research relating to processes to make tobacco products less 
hazardous to consumers and the research and documents described in 
subsection (c).
    ``(c) Research and Documents.--The documents described in this 
section include any documents concerning tobacco product research 
relating to--
            ``(1) nicotine, including--
                    ``(A) the interaction between nicotine and other 
                components in tobacco products including ingredients in 
                the tobacco and smoke components;
                    ``(B) the role of nicotine in product design and 
                manufacture, including product charters, and parameters 
                in product development, the tobacco blend, filter 
                technology, and paper;
                    ``(C) the role of nicotine in tobacco leaf 
                purchasing;
                    ``(D) reverse engineering activities involving 
                nicotine (such as analyzing the products of other 
                companies);
                    ``(E) an analysis of nicotine delivery; and
                    ``(F) the biology, psychopharmacology and any other 
                health effects of nicotine;
            ``(2) other ingredients, including--
                    ``(A) the identification of ingredients in tobacco 
                products and constituents in smoke, including additives 
                used in product components such as paper, filter, and 
                wrapper;
                    ``(B) any research on the health effects of 
                ingredients; and
                    ``(C) any research or other information explaining 
                what happens to ingredients when they are heated and 
                burned;
            ``(3) less hazardous or safer products, including any 
        research or product development information on activities 
        involving reduced risk, less hazardous, low-tar or reduced-tar, 
        low-nicotine or reduced-nicotine or nicotine-free products; and
            ``(4) tobacco product advertising, marketing and promotion, 
        including--
                    ``(A) documents related to the design of 
                advertising campaigns, including the desired 
                demographics for individual products on the market or 
                being tested;
                    ``(B) documents concerning the age of initiation of 
                tobacco use, general tobacco use behavior, beginning 
                smokers, pre-smokers, and new smokers;
                    ``(C) documents concerning the effects of 
                advertising; and
                    ``(D) documents concerning future marketing options 
                or plans in light of the requirements and regulations 
                to be imposed under this subchapter or the KIDS Act.
    ``(d) Authority of Secretary.--With respect to tobacco product 
manufacturers, the Secretary shall have the same access to records and 
information and inspection authority as is available with respect to 
manufacturers of other medical devices.

``SEC. 577. OVERSIGHT OF TOBACCO PRODUCT MANUFACTURING.

    ``The Secretary shall by regulation prescribe good manufacturing 
practice standards for tobacco products. Such regulations shall be 
modeled after good manufacturing practice regulations for medical 
devices, food, and other items under section 520(f). Such standards 
shall be directed specifically toward tobacco products, and shall 
include--
            ``(1) a quality control system, to ensure that tobacco 
        products comply with such standards;
            ``(2) a system for inspecting tobacco product materials to 
        ensure their compliance with such standards;
            ``(3) requirements for the proper handling of finished 
        tobacco products;
            ``(4) strict tolerances for pesticide chemical residues in 
        or on tobacco or tobacco product commodities in the possession 
        of the manufacturer, except that nothing in this paragraph 
        shall be construed to affect any authority of the Environmental 
        Protection Agency;
            ``(5) authority for officers or employees of the Secretary 
        to inspect any factory, warehouse, or other establishment of 
        any tobacco product manufacturer, and to have access to 
        records, files, papers, processes, controls and facilities 
        related to tobacco product manufacturing, in accordance with 
        appropriate authority and rules promulgated under this Act; and
            ``(6) a requirement that the tobacco product manufacturer 
        maintain such files and records as the Secretary may specify, 
        as well as that the manufacturer report to the Secretary such 
        information as the Secretary shall require, in accordance with 
        section 519.

``SEC. 578. PRESERVATION OF STATE AND LOCAL AUTHORITY.

    ``Notwithstanding section 521 and except as otherwise provided for 
in section 572(e), nothing in this subchapter shall be construed as 
prohibiting a State or locality from imposing requirements, 
prohibitions, penalties or other measures to further the purposes of 
this subchapter that are in addition to the requirements, prohibitions, 
or penalties required under this subchapter. State and local 
governments may impose additional tobacco product control measures to 
further restrict or limit the use of such products.''.

SEC. 213. FUNDING.

    (a) Authorization of Appropriations.--There are authorized to be 
appropriated amounts provided under section 101(d)(2)(C) to carry out 
this subtitle (and the amendments made by this subtitle).
    (b) Trigger.--No expenditures shall be made under this subtitle (or 
the amendments made by this subtitle) during any fiscal year in which 
the annual amount appropriated for the Food and Drug Administration is 
less than the amount so appropriated for the prior fiscal year.

SEC. 214. REPEALS.

    The following provisions of law shall be repealed:
            (1) The Federal Cigarette Labeling and Advertising Act (15 
        U.S.C. 1331 et seq.), except for sections 5(d) (1) and (2) and 
        6.
            (2) The Comprehensive Smokeless Tobacco Health Education 
        Act of 1986 (15 U.S.C. 4401 et seq.), except for sections 3(f) 
        and 8(a) and (b).
            (3) The Comprehensive Smoking Education Act of 1964 (Public 
        law 98-474).

    Subtitle C--Manufacturer and Product Seller Licensing and Anti-
                               Smuggling

SEC. 221. DEFINITIONS.

    In this subtitle:
            (1) Contraband tobacco product.--The term ``contraband 
        tobacco product'' means any tobacco product that is 
        manufactured, sold or offered for sale, shipped, delivered, 
        transferred, or possessed in violation of this subtitle, 
        chapter 52 of the Internal Revenue Code of 1986, or Chapter 114 
        of Title 18, United States Code, or any regulations issued 
        under any such provision.
            (2) Dealer.--The term ``dealer'' means any person lawfully 
        engaged in the business of selling tobacco products.
            (3) Engaged in the business.--The term ``engaged in the 
        business'' means--
                    (A) as applied to a manufacturer of tobacco 
                products, any person who devotes time, attention, and 
                labor to manufacturing tobacco products for sale or 
                distribution;
                    (B) as applied to an importer of tobacco products, 
                any person who devotes time, attention, and labor to 
                importing tobacco products into the United States from 
                a place outside of the United States for sale or 
                distribution;
                    (C) as applied to an exporter of tobacco products, 
                any person who devotes time, attention, and labor to 
                exporting tobacco products for sale or distribution 
                outside of the United States;
                    (D) as applied to a wholesaler in tobacco products, 
                any person who devotes time, attention, and labor to 
                the sale or distribution of tobacco products at 
                wholesale; and
                    (E) as applied to a retailer in tobacco products, 
                any person who devotes time, attention, and labor to 
                the sale or distribution of tobacco products to 
                consumers.
            (4) Exporter.--The term ``exporter'' means any person 
        engaged in the business of exporting tobacco products from the 
        United States for purposes of sale or distribution. The term 
        ``licensed exporter'' means any such person licensed under the 
        provisions of this subtitle.
            (5) Importer.--The term ``importer'' means any person 
        engaged in the business of importing tobacco products into the 
        United States for purposes of sale or distribution. The term 
        ``licensed importer'' means any such person licensed under the 
        provisions of this subtitle.
            (6) Intentionally.--The term ``intentionally'' means doing 
        an act, or omitting to do an act, deliberately, and not due to 
        accident, inadvertence, or mistake. An intentional act does not 
        require that a person knew that such person's act constituted 
        an offense.
            (7) Manufacturer.--The term ``manufacturer'' means any 
        person engaged in the business of manufacturing a tobacco 
        product for purposes of sale or distribution. The term 
        ``licensed manufacturer'' means any such person licensed under 
        the provisions of this subtitle, except that such term shall 
        not include a person who produces cigars, cigarettes, smokeless 
        tobacco, or pipe tobacco solely for his own personal 
        consumption or use.
            (8) Person.--The term ``person'' includes any individual, 
        corporation, company, association, firm, partnership, society, 
        or joint stock company.
            (9) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury.
            (10) United states.--The term ``United States'' means the 
        several States, the District of Columbia, the Commonwealth of 
        Puerto Rico, and the possessions of the United States.
            (11) Wholesaler.--The term ``wholesaler'' means any person 
        engaged in the business of purchasing tobacco products for 
        resale at wholesale, or any person acting as an agent or broker 
        for any person engaged in the business of purchasing tobacco 
        products for resale at wholesale.

SEC. 222. MINIMAL FEDERAL LICENSING AND REGISTRATION PROGRAM.

    (a) Establishment.--The Secretary shall establish a minimum Federal 
licensing and registration program that provides for a comprehensive 
system to support State efforts to collect State tobacco excise taxes 
and to prevent tobacco contraband activities.
    (b) Funding.--The Secretary shall use amounts made available under 
section 101(d)(2)(D) to carry out this section.

SEC. 223. LICENSING AND RETAILER REGISTRATION.

    (a) Licensing.--
            (1) Requirement.--No person shall engage in the business as 
        a manufacturer, importer, exporter, or wholesaler of tobacco 
        products until such person has been licensed to do so by the 
        Secretary.
            (2) Application.--To be licensed under this section, a 
        manufacturer, importer, exporter or wholesaler shall prepare 
        and submit to the Secretary an application at such time, in 
        such manner and containing such information as the Secretary 
        determines necessary to determine the eligibility of the 
        applicant to be licensed under this section. The Secretary may 
        promulgate regulations to prescribe application requirements 
        under this paragraph.
            (3) Fee.--Each applicant under paragraph (2) shall pay an 
        annual fee to the Secretary for obtaining and maintaining a 
        license under this section. A separate license and fee shall be 
        required for each place in which the applicant is to do 
        business. Failure to pay an annual fee will result in the 
        automatic termination of the license.
            (4) Eligibility.--A person shall be entitled to a license 
        under this section unless the Secretary finds--
                    (A) that such person has been previously convicted 
                of a Federal crime relating to tobacco, including the 
                taxation thereof;
                    (B) that such person has, during the 5-year period 
                prior to the date on which the application is 
                submitted, been convicted of any felony under Federal 
                or State law; or
                    (C) that such person is, by virtue of that person's 
                business experience, financial standing, or trade 
                connections, not likely to maintain such operations in 
                conformity with Federal law.
            (5) Issuance of license.--Upon the filing of a proper 
        application under paragraph (2), the payment of the prescribed 
        annual fee under paragraph (3), and a finding by the Secretary 
        that the person is entitled to a license under paragraph (4), 
        the Secretary shall issue to the applicant the appropriate 
        license and such license shall entitle the licensee to engage 
        in the business of manufacturing, importing, exporting, or 
        wholesaling in tobacco products as the case may be, subject to 
        the provisions of this subtitle and other applicable provisions 
        of law.
            (6) Duration.--A license issued under this subtitle shall 
        continue in effect until revoked, suspended, or annulled as 
        provided for in this subtitle, or until voluntarily 
        surrendered, except that--
                    (A) if leased, sold, or otherwise transferred, the 
                license shall be automatically terminated; and
                    (B) if transferred by operation of law or if actual 
                or legal control of the licensee is acquired, directly 
                or indirectly, whether by stock-ownership or in any 
                other manner, by any person, then such license shall be 
                terminated after 30 days.
        If within the 30-day period described in subparagraph (B), an 
        application is made for a new license, the outstanding license 
        to which such subparagraph applies shall continue in effect 
        until such application is finally acted upon by the Secretary.
            (7) Conditions.--All licenses issued under this subtitle 
        shall be conditioned upon compliance with the provisions of 
        this subtitle, all Federal laws relating to the taxation of 
        tobacco products, chapter 114 of title 18, United States Code, 
        the Jenkins Act (15 U.S.C. 375, et seq.) and any regulations 
        issued pursuant to such provisions.
    (b) Retailer Registration.--
            (1) Requirement.--No person shall engage in the business as 
        a retailer of tobacco products until such person has registered 
        with the Secretary and paid a fee for obtaining such 
        registration. A separate registration and fee shall be required 
        for each place in which the retailer is to do business. Such 
        fee shall be paid in such form, manner, and at such time as the 
        Secretary by regulation shall prescribe. No fee shall be pro-
        rated if a retailer commences operations any time after the 
        first of the year.
            (2) Form and content.--A registration under this subsection 
        shall be in such form and contain such information as 
        determined to be necessary by the Secretary. The Secretary may 
        promulgate regulations to prescribe registration requirements 
        under this paragraph.
            (3) Duration.--
                    (A) In general.--A registration issued under this 
                subsection shall continue in effect for a period of 1 
                year from the date of issuance.
                    (B) Limitation.--A registration issued under this 
                subsection may not be leased, sold, or transferred, by 
                operation of law or otherwise. Any registration issued 
                under this subsection shall terminate upon the lease, 
                sale, or transfer, by operation of law, or otherwise, 
of such registration to another person.
            (4) Issuance of registration.--Upon the filing of a proper 
        registration and payment of the prescribed fee under paragraph 
        (1), the Secretary shall register a qualified retailer that, 
        subject to the provisions of this subtitle and other applicable 
        provisions of law, shall entitle the retailer to engage in the 
        business as a retailer in tobacco products, unless the 
        Secretary finds that the person submitting a registration has 
        previously had a registration under this subtitle revoked.
            (5) Conditions.--A retailer registration under this 
        subtitle shall be conditioned upon compliance with this 
        subtitle, all Federal laws relating to the taxation of tobacco 
        products, chapter 114 of title 18, United States Code, and any 
        regulations issued pursuant to such provisions.
    (c) Procedures.--
            (1) Annulment.--The Secretary may, after providing notice, 
        annul any license or registration issued under this subtitle if 
        the Secretary finds that the license or registration was 
        procured through fraud, misrepresentation, or concealment of 
        material fact. If the Secretary annuls a license or 
        registration under this paragraph, the Secretary shall, upon a 
        request by the aggrieved party, promptly hold a hearing to 
        review the annulment of such license or registration.
            (2) Denial.--The Secretary may, after providing notice, 
        deny any application for a license or reject any registration 
        submitted under this subtitle by a person the Secretary has 
        reason to believe is not entitled to receive such license or 
        registration. If the Secretary denies an application for a 
        license or rejects a registration, the Secretary shall, upon a 
        request by the aggrieved party, promptly hold a hearing to 
        review the denial, revocation, or suspension of such license or 
        registration.
            (3) Revocation or suspension.--The Secretary may, after 
        providing notice, revoke, or suspend any license or 
        registration issued under this subtitle if the Secretary finds 
        the person holding the license or registration has violated the 
        conditions of licensing or registration. If the Secretary 
        revokes or suspends a license or registration, the Secretary 
        shall, upon request by the aggrieved party, promptly hold a 
        hearing to review the revocation or suspension of such license 
        or registration.
            (4) Violation of youth access restrictions.--
                    (A) In general.--Upon the issuance of a final order 
                by the Secretary of Health and Human Services pursuant 
                to the Federal Food, Drug and Cosmetic Act (21 U.S.C. 
                321 et seq.) that a registered retailer has violated 
                section 520(e) of the Federal Food, Drug and Cosmetic 
                Act (21 U.S.C. 360j(e)), or the regulations issued 
                thereunder, and upon proper referral of such final 
                order to the Secretary, a registration issued under 
                this subtitle shall be automatically suspended or 
                revoked in accordance with the final order of the 
                Secretary of Health and Human Services. Upon receipt of 
                such order, the Secretary shall, within 30 days, 
                provide notice to the registrant that the registration 
                involved is suspended or revoked.
                    (B) Nonapplication of certain provisions.--The 
                provisions of subsections (d) and (e) shall not apply 
                with respect to the revocation or suspension of any 
                registration issued under this subtitle resulting from 
                a final order from the Secretary of Health and Human 
                Services under subparagraph (A).
            (5) Violation of kids act provisions.--Upon a certification 
        by the Secretary of Health and Human Services that a licensed 
        or registered entity under this section has violated a 
        provision of this Act (or an amendment made by this Act) the 
        Secretary of the Treasury may, after providing notice, revoke, 
        or suspend any license or registration. If the Secretary 
        revokes or suspends a license or registration, the Secretary 
        shall, upon a request by the aggrieved party, promptly hold a 
        hearing to review the revocation, or suspension of such license 
        or registration.
    (d) Process.--
            (1) In general.--Any person whose application for a license 
        is denied or application for registration is rejected, or any 
        holder of a license or registration that is revoked, suspended, 
        or annulled shall receive a written notice from the Secretary 
        stating specifically the grounds upon which the application was 
        denied or upon which the license or registration was revoked, 
        suspended, or annulled. Notice of a revocation or suspension of 
        a license or registration shall be given to the holder of such 
        license or registration prior to the effective date of the 
        revocation or suspension.
            (2) Notice.--Written notice of any denial of application, 
        rejection of registration, suspension, revocation, annulment, 
        or other proceedings, shall be served--
                    (A) in person by any officer or employee of the 
                Secretary authorized for such purpose; or
                    (B) by mailing the order certified mail, addressed 
                to the applicant or respondent at the last known 
                address in the records of the Secretary.
    (e) Appeal.--
            (1) In general.--An applicant, registrant, or licensee may 
        appeal any final order of the Secretary denying an application 
        for a license, rejecting a registration, or suspending, 
        revoking, or annulling, a license or registration.
            (2) Filing.--An aggrieved party may, at any time within 60 
        days after the date on which a notice of a final order 
        described in paragraph (1) was received, file a petition in the 
        circuit court of appeals of the United States within any 
        circuit in which such person resides or has as a principal 
        place of business, or in the United States Court of Appeals for 
        the District of Columbia, asking that the order of the 
        Secretary be modified or set aside in whole or in part.
            (3) Requirement.--With respect to a filing under paragraph 
        (2), a copy of the petition shall be transmitted by the clerk 
        of the court to the Secretary, or any officer designated by the 
        Secretary for that purpose, and thereupon the Secretary shall 
        file in the court the record upon which the order complained of 
        was entered, as provided for in section 2112 of title 28, 
        United States Code.
            (4) Jurisdiction.--Upon the filing of a petition with the 
        court under this subsection, the court shall have exclusive 
        jurisdiction to affirm, modify, or set aside such order, in 
        whole or in part.
            (5) Procedure.--
                    (A) Objection.--No objection to the order of the 
                Secretary shall be considered by the court under this 
                subsection unless such objection shall have been urged 
                before the Secretary or unless there were reasonable 
                grounds for failure to do so.
                    (B) Findings.--The findings of the Secretary as to 
                the facts, if supported by substantial evidence, shall 
                be conclusive in any action under this subsection.
                    (C) Additional evidence.--If any party in an action 
                under this subsection applies to the court for leave to 
                adduce additional evidence, and demonstrated to the 
                satisfaction of the court that such additional evidence 
                is material and there were reasonable grounds for 
                failure to adduce such evidence on the proceeding 
                before the Secretary, the court may order such 
                additional evidence to be taken before the Secretary 
                and to be adduced upon the hearing in such manner and 
                upon such terms and conditions as the court may deem 
                proper.
                    (D) Modification of findings.--The Secretary may 
                modify findings to which this subsection applies as to 
                the facts by reason of additional evidence taken under 
                subparagraph (C), and the Secretary shall file with the 
                court such new or modified findings, which, if 
                supported by substantial evidence, shall be conclusive. 
                The recommendations of the Secretary, if any, for the 
                modification or setting aside of the original order 
                shall be conclusive.
            (6) Order of court.--The judgment or decree of the court 
        affirming, modifying, or setting aside, in whole or in part, 
        any order of the Secretary under this section shall be final, 
        subject to review by the Supreme Court of the United States 
        upon certiorari or certification as provided for in section 
        1254 of title 28, United States Code.
            (7) Stay.--The commencement of proceedings under this 
        subsection shall, unless specifically ordered by the court to 
        the contrary, operate as a stay of the Secretary's order.

SEC. 224. UNLAWFUL ACTS.

    (a) In General.--It shall be unlawful for any person--
            (1) except a licensed manufacturer, licensed exporter, 
        licensed importer, or licensed wholesaler to engage 
        intentionally in the business of manufacturing, exporting, 
        importing or wholesaling any tobacco product; or
            (2) except a registered retailer to engage intentionally in 
        the business of selling or offering for sale tobacco products 
        at retail.
    (b) Shipment to Other Than Licensed or Registered Entity.--It shall 
be unlawful for any licensed importer, licensed manufacturer, licensed 
wholesaler intentionally to ship, transport, deliver or receive any 
tobacco products from or to any person other than a person licensed or 
registered under this subtitle.
    (c) Retailers.--It shall be unlawful for any retailer registered 
under this subtitle intentionally--
            (1) to receive tobacco products from any person other than 
        a licensed manufacturer, licensed importer, or licensed 
        wholesaler; or
            (2) to sell or offer for sale to any person in a single 
        transaction any tobacco products in quantities of more than 50 
        packages, other than a direct return to a licensee for credit.
    (d) Exporters.--
            (1) In general.--It shall be unlawful for any licensed 
        exporter intentionally--
                    (A) to ship, transport, sell or deliver for sale 
                any tobacco products to any person other than a 
                licensed manufacturer, licensed importer, licensed 
                wholesaler, or foreign purchaser;
                    (B) to receive any tobacco products from any person 
                other than a licensed manufacturer, licensed importer, 
                or licensed wholesaler; or
                    (C) to ship, transport, sell, deliver or otherwise 
                transfer any tobacco product intended for export unless 
                the package containing the tobacco product is marked 
                ``FOR EXPORT ONLY FROM THE UNITED STATES''.
            (2) Limitation.--It shall be unlawful for any person other 
        than a licensed exporter intentionally to ship, transport, 
        receive or possess, for purposes of resale, any tobacco product 
        in packages marked ``FOR EXPORT ONLY FROM THE UNITED STATES,'' 
        other than for direct return to the manufacturer or exporter 
        for re-packing or for re-exportation.
    (e) False Records.--It shall be unlawful for any licensed 
manufacturer, licensed exporter, licensed importer, licensed 
wholesaler, or retailer to make intentionally any false entry in, to 
fail willfully to make appropriate entry in, or to fail willfully to 
maintain properly any record or report that such person is required to 
keep as required by this subtitle or the regulations promulgated 
thereunder.
    (f) Contraband Products.--It shall be unlawful for any person 
intentionally to ship, transport, receive, possess, sell, offer for 
sale, distribute, or purchase contraband tobacco products in or 
affecting interstate commerce.

SEC. 225. PENALTIES AND COMPROMISE OF LIABILITY.

    (a) Criminal Penalties.--Any person violating any of the provisions 
of section 224 shall upon conviction be fined as provided for in 
section 3571 of title 18, United States Code, imprisoned for not more 
than 5 years, or both.
    (b) Civil Penalties.--The Secretary may, in lieu of referring 
violations of this section for criminal prosecution, impose a civil 
penalty of not more than $10,000 for each offense.
    (c) Compromise of Liability.--The Secretary is authorized, with 
respect to any violation of this subtitle or any regulation issued 
thereunder, to compromise the liability arising with respect to such 
violation upon payment of a sum for each offense prior to referral to 
the Department of Justice for prosecution or defense. The Attorney 
General may compromise any such case after referral to the Department 
of Justice for prosecution or defense.
    (d) Forfeiture.--
            (1) In general.--The Secretary shall seize and forfeit, in 
        accordance with section 9703(o) of title 31, United States 
        Code, any conveyance, tobacco products, or monetary instrument 
        (as defined in section 5312 of title 31, United States Code) 
        involved in a violation of this subtitle or any property, real 
        or personal, which constitutes or is derived from proceeds 
        traceable to a violation of this subtitle.
            (2) Sentencing.--The court, in imposing sentence on a 
        person convicted of violating this subtitle, shall order that 
        person to forfeit to the United States any property described 
        in paragraph (1) involved in such violation. The seizure and 
        forfeiture of such property shall be governed by subsections 
        (b), (c) and (e) through (p) of section 853 of title 21, United 
        States Code.

SEC. 226. GENERAL ADMINISTRATIVE PROVISIONS.

    (a) Records.--
            (1) In general.--Every manufacturer, importer, wholesaler, 
        or exporter shall maintain records in such manner as the 
        Secretary shall by regulation prescribe.
            (2) Retailer.--Every retailer of tobacco products shall 
        maintain records in a manner as the Secretary shall by 
        regulation prescribe, including records of tobacco products 
        received, and the person from whom such tobacco products were 
        received.
            (3) Requirement.--The records required by this subsection 
        shall be maintained for a period of not less than 5 years and 
        the Secretary may, by giving written notice to the 
        manufacturer, importer, wholesaler, exporter, or retailer 
        require the retention for an additional period of not more than 
        2 years.
    (b) Preservation and Inspection of Records.--Any records or 
documents required to be maintained under subsection (a) or any 
regulations issued pursuant thereto shall be preserved by the person 
required to keep such records or documents available for inspection by 
the Secretary during business hours.
    (c) Entry of Premises for Inspection.--The Secretary may enter, 
during business hours, the premises (including places of storage) of 
any manufacturer, importer, wholesaler, exporter, or retailer for the 
purposes of inspecting such premises and for the examination of any 
required record or inventory of tobacco products kept or stored by such 
person on the business premises.
    (d) Examination and Summons.--
            (1) In general.--For the purpose of determining whether any 
        manufacturer, importer, wholesaler, exporter, retailer, or any 
        other person is in compliance with the provisions of this 
        subtitle, the Secretary is authorized, at all reasonable times, 
        to examine and copy any books, paper, records, or other data 
        that may be relevant or material to such inquiry.
            (2) Summons.--In order to conduct an inspection, 
        investigation, or maintain an enforcement action under this 
        section, the Secretary may summon any person having information 
        on the compliance of the provisions of this subtitle by any 
        manufacturer, importer, wholesaler, exporter, retailer, or any 
        other person to appear before the Secretary at a time and place 
        named in the summons and to give testimony under oath or 
        produce such books, papers, records, or other data as may be 
        relevant or material to such inquiry.
            (3) Service.--A summons shall be served by the Secretary, 
        by an attested copy delivered in hand to the person to whom it 
        is directed, or left at such person's last place of business or 
        abode. The certificate of service signed by the person serving 
        the summons shall be evidence of the facts it states on the 
        hearing of an application for the enforcement of the summons. 
        When the summons requires the production of books, papers, 
        records, or other data, it shall be sufficient if such books, 
        papers, records, or other data are described with reasonable 
        certainty.
            (4) Jurisdiction.--Any of the district courts of the United 
        States within the jurisdiction of which such inquiry is carried 
        on may, in case of contumacy or refusal to obey a summons, 
        issue to a person an order requiring such person to appear 
        before the Secretary and give such testimony or produce such 
        books, papers, records, or other data relating to the inquiry. 
        Any failure to obey such order of the court may be punished by 
        such court as a contempt thereof.
    (e) Industry Compliance Program.--The Secretary shall prescribe 
regulations necessary to ensure each licensee establishes and maintains 
a compliance program. Such program shall be designed to ensure that 
retailers comply with Federal laws and regulations relating to the 
distribution of tobacco products to consumers.
    (f) Reports to the Secretary.--
            (1) In general.--The Secretary is authorized to require, in 
        such manner and form as shall be prescribed in regulations, 
        such reports as are necessary to carry out the powers and 
        duties under this subtitle including any reports deemed 
        necessary to ensure the proper accounting of materials 
        necessary to manufacture tobacco products. Such reports will 
        include detailed descriptions of licensee compliance programs 
        that have been developed by the licensees to ensure that 
        retailers comply with the Federal laws and regulations relating 
        to the distribution of tobacco products to consumers.
            (2) Reports to congress.--The Secretary shall biennially 
        prepare and submit to the appropriate committees of Congress a 
        report concerning the activities of the Secretary under this 
        subtitle.
    (g) Utilization of Other Government Agencies.--The Secretary may, 
with the consent of the department or agency affected, utilize the 
services of any department or other agency of the Federal Government to 
the extent necessary to carry out the powers and duties under this 
subtitle and authorize officers and employees thereof to act as agents 
of the Secretary. The Secretary may provide funds to State and local 
enforcement entities to be used to support training and technical 
assistance. Such activities shall be coordinated with the Secretary of 
Health and Human Services in the conduct of State-based enforcement of 
requirements relating to restriction on minors' access to tobacco 
products.
    (h) Markings, Branding, Identification.--Tobacco products shall be 
marked, branded, packaged, or identified in such a manner as the 
Secretary shall by regulation prescribe.
    (i) Proceeds of Investigative Operations.--With respect to any 
undercover investigative operation of the Bureau of Alcohol, Tobacco 
and Firearms (referred to in this subtitle as ``ATF'') that is 
necessary for the detection and prosecution of offenses against the 
United States under this subtitle, and notwithstanding any other 
provision of law--
            (1) amounts collected under section 227 and the proceeds 
        from such operation may be deposited in banks or other 
        financial institutions;
            (2) the proceeds from such operation may be used to offset 
        necessary and reasonable expenses incurred in such operation;
            (3) amounts collected under section 227 may be used to 
        purchase property, building, and other facilities, and to lease 
        space within the United States, the District of Columbia, and 
        the territories and possessions of the United States, and to 
        establish or acquire proprietary corporations or business 
        entities on a commercial basis; and
            (4) ATF shall comply with liquidation, deposit, audit, and 
        reporting provisions in sections 2081(b) through (d) of title 
        19, United States Code, to the extent applicable and not 
        inconsistent with this subsection;
if, with respect to paragraphs (1), (2) and (3), the Director has 
certified in writing that the actions authorized by paragraphs (1), 
(2), and (3) are necessary for the conduct of such operation.
    (j) Authorization of Appropriations and Tracking System.--
            (1) Authorization of appropriations.--There are authorized 
        to be appropriated amounts provided under section 101(d)(2)(D) 
        to enable the Department of the Treasury to carry out 
        activities under this subtitle relating to--
                    (A) training of Federal, State, and foreign tobacco 
                administrators and enforcement officials;
                    (B) training for smuggling and diversion 
                interdiction;
                    (C) educational outreach for tobacco industry 
                members on the objectives of this Act and the 
                responsibilities of such individuals under this Act;
                    (D) research by the Customs Services and the Bureau 
                relating to tracking technologies; and
                    (E) other activities relating to the purposes of 
                this subtitle.
            (2) Tracking system.--In establishing a controlled 
        commodity tracking system for tobacco products, the Secretary 
        shall evaluate the deployment of an innovative anti-diversion 
        system that can be implemented at the manufacturing level to 
        track products through the stream of commerce to the point of 
        retail sale.

SEC. 227. FUNDING.

    (a) Licensing and Registration Fees.--The Secretary may, in the 
Secretary's sole discretion, set the licensing and registration fees 
required by this subtitle, in such amounts as are necessary to recover 
the costs of administering the provisions of this subtitle, including 
preventing trafficking in contraband tobacco products.
    (b) Disposition of Fees.--
            (1) Account.--Fees collected by the Secretary under this 
        subtitle shall be deposited in an account within the Treasury 
        of the United States that is specially designated for paying 
        the costs associated with the administration or enforcement of 
        this subtitle or any other Federal law relating to the unlawful 
        trafficking of tobacco products.
            (2) Payments.--The Secretary is authorized and directed to 
        pay out of any funds in the account referred to in paragraph 
        (1) any expenses incurred by the Federal Government in 
        administering and enforcing this subtitle or any other Federal 
        law relating to the unlawful trafficking in tobacco products 
        (including expenses incurred for the salaries and expenses of 
        individuals employed to provide such services).
            (3) Limitation.--None of the funds deposited into the 
        account referred to in paragraph (1) shall be made available 
        for any purpose other than making payments authorized under the 
        preceding sentence.
    (c) Supplement not Supplant.--Amounts provided under this subtitle 
for the Department of the Treasury shall be in addition to any other 
amounts appropriated for such Department. Amounts otherwise 
appropriated for such Department shall not be reduced below the amounts 
so appropriated for fiscal year 1998, as a result of the amounts made 
available under this subtitle.

SEC. 228. TRANSITIONAL RULES.

    (a) Manufacturers or Exporters.--Any manufacturer or export 
warehouse proprietor, who, on the date of enactment of this Act, is a 
permittee under chapter 52 of the Internal Revenue Code of 1986, and 
who submits an application pursuant to the provisions of this subtitle 
not later than 90 days after the date of enactment of this Act, may 
continue to engage in such business pending final action on such 
application.
    (b) Importers, Exporters, Wholesalers and Retailers.--Any person 
engaged in the business of importing, exporting, wholesaling, or 
retailing tobacco products on the date of enactment of this Act, who 
submits an application pursuant to the provisions of this subtitle not 
later than 90 days after the date of enactment of this Act, may 
continue to engage in such business pending final action on such 
application.

SEC. 229. RULES AND REGULATIONS.

    The Secretary shall prescribe rules and regulations for the 
enforcement of this subtitle, including all rules and regulations that 
are necessary to ensure the lawful distribution of tobacco products in 
interstate or foreign commerce.

SEC. 230. SEVERABILITY.

    If any provision of this subtitle or the application thereof to any 
person or circumstance is held invalid, the validity of the remainder 
of this subtitle and of the application of such provision to other 
persons and circumstances shall not be affected thereby.

SEC. 231. EFFECT ON STATE OR LOCAL LAW.

    No provision of this subtitle shall be construed to occupy the 
field in which such provision operates to the exclusion of the law of 
any State or political subdivision thereof on the same subject matter, 
unless there is a direct and positive conflict between such provision 
and the law of the State or political subdivision thereof so that the 
two cannot be reconciled or consistently stand together.

SEC. 232. AMENDMENT TO CONTRABAND CIGARETTE TRAFFICKING ACT.

    Chapter 114 of title 18, United States Code, is amended--
            (1) in section 2341--
                    (A) in paragraph (2)--
                            (i) by striking ``60,000'' and inserting 
                        ``30,000''; and
                            (ii) by striking ``if such State'' and all 
                        that follows through ``payment of cigarette 
                        taxes'';
                    (B) in paragraph (4), by striking ``and'' at the 
                end;
                    (C) in paragraph (5), by striking the period and 
                inserting ``; and''; and
                    (D) by adding at the end the following:
            ``(6) the term `tobacco product' means cigarettes, 
        cigarette tobacco, smokeless tobacco, little cigars, roll-your-
        own products, cigars, cigarillos, pipe tobacco, roll-your-own 
        products, (as such terms are defined in section 5 of the KIDS 
        Act) and any other product made or derived from tobacco 
        intended for human consumption.'';
            (2) in section 2342(b), by striking ``60,000'' and 
        inserting ``30,000'';
            (3) in sections 2343, by striking ``60,000'' each place 
        that such term appears and inserting ``30,000''.
            (4) by striking ``cigarette'' each place that such term 
        appears, other than in paragraphs (1) and (6) of section 2341, 
        and inserting ``tobacco product''; and
            (5) by striking ``cigarettes'' each place that such term 
        appears and inserting ``tobacco products''.

                         Subtitle D--Penalties

SEC. 241. PENALTIES.

    Section 307 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
335b) is amended by adding at the end the following:
    ``(f) Penalties Relating to Tobacco Products.--
            ``(1) Compliance and disclosure.--
                    ``(A) In general.--Any tobacco manufacturer, or 
                employee or agent of any tobacco manufacturer which 
                violates this Act or the KIDS Act shall be subject to a 
                civil penalty of $25,000 per day of violation. In 
                addition, the Secretary may require any such 
                manufacturer to include in its advertising for the 
                relevant tobacco product a statement of such violation.
                    ``(B) Disclosure.--Any tobacco product manufacturer 
                or employee or agent of any tobacco product 
                manufacturer who fails to disclose to the Secretary 
                research documents or information required to be 
                disclosed by this Act or the KIDS Act or any other 
                provision of law relating to the health effects or 
                toxicity of tobacco products, nontobacco ingredients 
                and tobacco product constituents shall be subject to a 
                civil penalty of not more than $10,000,000 for each 
                such violation. Such civil penalty shall be in addition 
                to any other criminal, civil or administrative penalty 
                prescribed by law.
            ``(2) Civil actions to recover penalties.--The Secretary 
        may commence a civil action to assess and recover any civil 
        penalty under paragraph (1) in the district court of the United 
        States for the district in which the violation is alleged to 
        have occurred or in which the defendant resides or has its 
        principal place of business. The court shall have jurisdiction 
        to assess a civil penalty in such an action. In determining the 
        amount of any civil penalty to be assessed under this 
        subsection, the court shall take into account--
                    ``(A) the gravity of the violation;
                    ``(B) the economic benefit or savings (if any) 
                resulting from the violation;
                    ``(C) the size of the violator's business;
                    ``(D) the violator's history of compliance with 
                this Act;
                    ``(E) action taken to remedy the violation;
                    ``(F) the effect of the penalty on the violator's 
                ability to continue business operations; and
                    ``(G) such other matters as justice may require.
        In any such action, subpoenas for witnesses who are required to 
        attend a district court in any district may run into any other 
        district.''.

SEC. 242. APPLICATION OF PENALTIES WITH RESPECT TO VIOLATIONS OF 
              CERTAIN LICENSING PROVISIONS.

    (a) In General.--A manufacturer, exporter, importer, wholesaler or 
retailer who violates any provision of this Act (or an amendment made 
by this Act) or regulations issued thereunder with respect to tobacco 
products shall, in addition to any applicable penalties otherwise 
provided for in this Act (or amendments), be liable to an order of the 
Secretary suspending or revoking a license or registration issued 
pursuant to section 223(b). Such revocation or suspension shall be 
adjudicated in accordance with the procedures provided for in 
subsection 303(f) (3)(A) and (4) of the Federal Food, Drug and Cosmetic 
Act (21 U.S.C. 333(f)(3)(A) and (4)). If civil penalties pursuant to 
such section 303(f)(1)(A) are being sought for the same violation or 
violations, such violation will be adjudicated in a single proceeding 
for purposes of such subsection.
    (b) Notification.--Upon receiving a final order issued by the 
Secretary suspending or revoking a license or registration issued under 
section 223(c), the Secretary of the Treasury shall notify the licensee 
or registrant that such license or registration has been suspended or 
revoked in accordance with this section.

                  TITLE III--PUBLIC HEALTH INITIATIVES

           Subtitle A--State-Federal Anti-Tobacco Partnership

            CHAPTER 1--SCHOOL- AND COMMUNITY-BASED PROGRAMS

SEC. 301. SCHOOL- AND COMMUNITY-BASED PROGRAMS.

    (a) In General.--The Secretary, acting through the Centers for 
Disease Control and Prevention, shall establish a program to award 
cooperative agreements to States to enable such States--
            (1) to carry out school-based programs concerning the 
        dangers of using tobacco products using methods that are 
        effective and evidence-based; and
            (2) to carry out community-based prevention programs, 
        including in predominantly minority communities, using methods 
        that are effective and evidence-based.
    (b) Eligibility.--To be eligible to receive funds under this 
section a State shall prepare and submit to the Secretary an 
application at such time, in such manner, and containing such 
information as the Secretary may require, including a State plan (that 
is subject to approval by the Secretary) that describes--
            (1) the types of programs that the State will fund under 
        the cooperative agreement; and
            (2) the manner in which the State will monitor the 
        effectiveness of such programs.
    (c) Allocation of Funds.--
            (1) Population-based determination.--From amounts made 
        available under subsection (f) for each fiscal year, the 
        Secretary shall provide to a State an amount that bears the 
        same ratio to 60 percent of such available amounts as the 
        population of the State bears to the total population of all 
        States.
            (2) Allocation based on needs.--The Secretary shall 
        allocate 40 percent of the amount made available under 
        subsection (f) for a fiscal year to States based on a formula 
        to be determined by the Secretary that takes into consideration 
        the anti-tobacco needs of the State.
    (d) Use of Funds.--Amounts received by a State under this section 
shall be used to--
            (1) carry out school-based programs that are focused on 
        those regions of the State with high smoking rates and targeted 
        at populations which are most at risk to start smoking;
            (2) carry out community-based prevention programs that are 
        focused on those populations within the community that are most 
        at-risk to use tobacco products or that have been targeted by 
        tobacco advertising or marketing;
            (3) carry out other activities determined appropriate by 
        the Secretary; and
            (4) assist local governmental entities within the State to 
        conduct appropriate anti-tobacco activities.
    (e) Additional Requirements.--To be eligible to receive funds under 
this section a State shall provide assurances to the Secretary that--
            (1) the State will annually report to the Secretary on the 
        effectiveness of the educational approaches implemented by the 
        State;
            (2) adequate records will be maintained with respect to 
        such assistance;
            (3) amounts provided to individuals or entities will be 
        subject to independent audit;
            (4) the State will fully involve local public health 
        officials in the planning and implementation of the program; 
        and
            (5) the State will coordinate activities under this section 
        with other Federal anti-tobacco programs.
    (f) Authorization of Appropriations.--There are authorized to be 
appropriated amounts provided under section 101(d)(2)(B) for a fiscal 
year to carry out this section.
    (g) Trigger.--No expenditures shall be made under this section 
during any fiscal year in which the annual amount appropriated for the 
Centers for Disease Control and Prevention is less than the amount so 
appropriated for the prior fiscal year.

SEC. 302. NATIONAL EVENT SPONSORSHIP PROGRAM.

    (a) Establishment.--The Secretary, acting through the Centers for 
Disease Control and Prevention, shall establish a program to be known 
as the ``National Event Sponsorship Program'' under which the Secretary 
may award grants to eligible entities or individuals for the 
sponsorship of activities described in subsection (c).
    (b) Eligibility.--To be eligible to receive a grant under this 
section an entity or individual shall--
            (1) prepare and submit to the Secretary an application at 
        such time, in such manner, and containing such information as 
        the Secretary may require, including--
                    (A) a description of the event, activity, team, or 
                entry for which the grant is to be provided;
                    (B) documentation that the event, activity, team, 
                or entry involved was sponsored or otherwise funded by 
                a tobacco manufacturer or distributor prior to the date 
                of the application; and
                    (C) a certification that the applicant is unable to 
                secure funding for the event, activity, team, or entry 
                involved from sources other than those described in 
                paragraph (2);
            (2) provide assurances that amounts received under the 
        grant will be used in accordance with subsection (d); and
            (3) meet any other requirements determined appropriate by 
        the Secretary.
    (c) Permissible Sponsorship Activities.--Events, activities, teams, 
or entries for which a grant may be provided under this section 
include--
            (1) an athletic, musical, artistic, or other social or 
        cultural event or activity that was sponsored in whole or in 
        part by a tobacco manufacturer or distributor prior to the date 
        of enactment of this Act;
            (2) the participation of a team that was sponsored in whole 
        or in part by a tobacco manufacturer or distributor prior to 
        the date of enactment of this Act, in an athletic event or 
        activity; and
            (3) the payment of a portion or all of the entry fees of, 
        or other financial or technical support provided to, an 
        individual or team by a tobacco manufacturer or distributor 
        prior to the date of enactment of this Act, for participation 
        of the individual in an athletic, musical, artistic, or other 
        social or cultural event.
    (d) Use of Funds.--Amounts received under a grant under this 
section shall be used to--
            (1)(A) pay the costs associated with the sponsorship of an 
        event or activity described in subsection (c)(1);
            (B) provide for the sponsorship of an individual or team;
            (C) pay the required entry fees associated with the 
        participation of an individual or team in an event or activity 
        described in subsection (c)(3);
            (D) provide financial or technical support to an individual 
        or team in connection with the participation of that individual 
        or team in an activity described in subsection (c)(3); or
            (E) for any other purposes determined appropriate by the 
        Secretary; and
            (2) promote images or activities to discourage individuals 
        from using tobacco products or encourage individuals who use 
        such products to quit.
    (e) Allocation of Unexpended Funds.--Amounts available for purposes 
of carrying out this section and remaining available at the end of the 
10-year period following the date of the establishment of the program 
under this section, shall be used as follows:
            (1) 50 percent of such amounts shall be used to supplement 
        amounts available for multi-media campaigns under section 311;
            (2) 25 percent of such amounts shall be used to supplement 
        amounts available for Federal or State tobacco product 
        enforcement purposes; and
            (3) 25 percent of such amounts shall be used to supplement 
        amounts available for other community-based programs under this 
        subtitle.
    (f) Authorization of Appropriations.--There are authorized to be 
appropriated amounts provided under section 101(d)(2)(B) to carry out 
this section.
    (g) Sunset.--The program established under this section shall 
terminate on the date that is 10-years after the date of enactment of 
this Act.

                CHAPTER 2--COUNTER-ADVERTISING PROGRAMS

SEC. 311. FEDERAL-STATE COUNTER-ADVERTISING PROGRAMS.

    (a) In General.--The Secretary, acting through the Centers for 
Disease Control and Prevention, shall carry out programs to reduce 
tobacco usage through media-based (such as counter-advertising 
campaigns) and nonmedia-based education, prevention and cessation 
campaigns designed to discourage the use of tobacco products by 
individuals, to encourage those who use such products to quit, and to 
educate the public about the hazards of exposure to environmental 
tobacco smoke. Such programs shall include national and local campaigns 
and shall target those populations that have been targeted by tobacco 
industry advertising.
    (b) Establishment of Board.--
            (1) In general.--The Secretary shall establish within the 
        executive branch a board to be known as the ``Anti-Tobacco 
        Public Education Board'' (referred to in this section as the 
        ``Board'') to enter into contracts with or award grants to 
        eligible entities for the development and dissemination of 
        public informational and educational campaigns and messages to 
        reduce the use of tobacco products.
            (2) Composition.--The Board shall be composed of--
                    (A) 7 non-Federal members to be appointed by the 
                Secretary, of which--
                            (i) at least 3 such members shall be 
                        individuals who are widely recognized by the 
                        general public for cultural, educational, 
                        behavioral science or medical achievement;
                            (ii) at least 2 of whom shall be 
                        individuals who hold positions of leadership in 
                        major public health organizations; and
                            (iii) at least 2 of whom shall be 
                        individuals recognized as experts in the field 
                        of advertising and marketing; and
                    (B) the Director of the Office on Smoking and 
                Health of the Centers for Disease Control and 
                Prevention who shall serve as an ex officio member of 
                the Board.
            (3) Terms and vacancies.--The members of the Board shall 
        serve staggered terms as determined appropriate at the time of 
        appointment by the Secretary. Any vacancy in the Board shall 
        not affect its powers, but shall be filled in the same manner 
        as the original appointment.
            (4) Travel expenses.--The members of the Board shall be 
        allowed travel expenses, including per diem in lieu of 
        subsistence, at rates authorized for employees of agencies 
        under subchapter I of chapter 57 of title 5, United States 
        Code, while away from their homes or regular places of business 
        in the performance of services for the Board.
            (5) Removal.--Members of the Board may only be removed by a 
        majority vote of the members of the Board for neglect of duty 
        or malfeasance in office.
            (6) Duties.--The Board may--
                    (A) enter into contracts with or award grants to 
                eligible entities to develop messages and campaigns 
                designed to reduce the use of tobacco products that are 
                based on effective strategies to affect behavioral 
                changes in children and other targeted populations; and
                    (B) enter into contracts with or award grants to 
                eligible entities to carry out public informational and 
                educational activities designed to reduce the use of 
                tobacco products.
    (c) Eligibility.--To be eligible to receive funding under this 
section an entity shall--
            (1) be a--
                    (A) public entity or a State health department; or
                    (B) private or nonprofit private entity that--
                            (i)(I) is not affiliated with a tobacco 
                        product manufacturer or importer;
                            (II) has a demonstrated record of working 
                        effectively to reduce tobacco product use; or
                            (III) has expertise in conducting a multi-
                        media communications campaign; and
                            (ii) has expertise in developing strategies 
                        that affect behavioral changes in children and 
                        other targeted populations;
            (2) prepare and submit to the Board an application at such 
        time, in such manner, and containing such information as the 
        Board may require, including a description of the activities to 
        be conducted using amounts received under the grant or 
        contract;
            (3) provide assurances that amounts received under this 
        section will be used in accordance with subsection (c); and
            (4) meet any other requirements determined appropriate by 
        the Board.
    (d) Use of Funds.--An entity that receives funds under this section 
shall use amounts provided under the grant or contract to conduct 
multi-media public educational and social marketing campaigns that are 
designed to discourage and de-glamorize the use of tobacco products, 
encourage those using such products to quit, and educate the public 
about the hazards of exposure to environmental tobacco smoke. Such 
amounts may be used to design and implement such activities and to 
conduct research concerning the effectiveness of such programs.
    (e) Needs of Certain Populations.--In awarding grants and contracts 
under this section, the Board shall take into consideration the needs 
of particular populations.
    (f) Coordination.--
            (1) In general.--The Secretary shall ensure that programs 
        and activities under this section are coordinated with programs 
        and activities carried out under this title.
            (2) Other federal entities.--The Board may secure directly 
        from any Federal department or agency such information as the 
        Board considers necessary to carry out the provision of this 
        section.
    (g) Allocation of Funds.--Not to exceed--
            (1) 25 percent of the amount made available under 
        subsection (h) for each fiscal year shall be provided to States 
        for State and local media-based and nonmedia-based education, 
        prevention and cessation campaigns;
            (2) 20 percent of the amount made available under 
        subsection (h) for each fiscal year shall be used specifically 
        for the development of new messages and campaigns; and
            (3) not less than 50 percent of the amount made available 
        under subsection (h) for each fiscal year shall be used 
        specifically to place media messages and carry out other 
        dissemination activities described in subsection (d).
    (h) Authorization of Appropriations.--There are authorized to be 
appropriated amounts provided under section 101(d)(2)(B) to carry out 
this section.
    (i) Trigger.--No expenditures shall be made under this section 
during any fiscal year in which the annual amount appropriated for the 
Centers for Disease Control and Prevention is less than the amount so 
appropriated for the prior fiscal year.

                 CHAPTER 3--NATIONAL CESSATION PROGRAM

SEC. 321. NATIONAL TOBACCO CESSATION PROGRAM.

    (a) Establishment.--There is established a program to be known as 
the ``National Tobacco Cessation Program''. The Secretary may award 
grants to, and enter into contracts and cooperative agreements with, 
public and private entities for the purpose of expanding the 
availability and utilization of tobacco use cessation products and 
services.
    (b) Use of Funds.--Amounts made available under a grant, contract 
or cooperative agreement under subsection (a) shall be used for the 
planning, establishment, or administration of tobacco use cessation 
programs approved in accordance with subsection (d).
    (c) Cessation Programs and Activities.--
            (1) In general.--
                    (A) Requirements.--Programs receiving assistance 
                under this section shall provide a range of cost-
                effective and evidence-based products and services that 
                are--
                            (i) consistent with the most recent tobacco 
                        cessation guidelines issued by the Agency for 
                        Health Care Policy and Research; or
                            (ii) approved as safe and effective for 
                        cessation by the Food and Drug Administration.
                    (B) Additional guidelines.--Using the best 
                available scientific information, the Secretary shall 
                promulgate such additional guidelines as are necessary 
                to assure the quality, accessibility and cost 
                effectiveness of products and services receiving funds 
                under this section.
            (2) Activities.--Except as provided in subsections (d) and 
        (e), amounts provided under this section may be used for the 
        following:
                    (A) Evidence-based cessation products and 
                activities described in the application for assistance 
                under this section, including--
                            (i) science-based programs designed to 
                        assist individuals to quit their use of tobacco 
                        products;
                            (ii) training in cessation intervention 
                        methods for health plans and health 
                        professionals, including physicians, nurses, 
                        dentists, health educators, public health 
                        professionals, and other health care providers;
                            (iii) programs to encourage health insurers 
                        and health plans to provide coverage for 
                        evidence-based tobacco use cessation 
                        interventions and therapies, except that the 
                        use of any funds under this clause to offset 
                        the cost of providing a smoking cessation 
                        benefit may only be used on a temporary 
                        demonstration basis;
                            (iv) programs to encourage employer-based 
                        wellness programs to provide evidence-based 
                        tobacco use cessation interventions and 
                        therapies; and
                            (v) programs targeted toward minority and 
                        low-income individuals, individuals residing in 
                        medically underserved areas, and uninsured 
                        individuals.
                    (B) Planning, administration, and educational 
                activities related to the activities described in 
                subparagraph (A).
                    (C) The monitoring and evaluation of activities 
                carried out under subparagraphs (A) and (B), and 
                reporting and disseminating resulting information to 
                health professionals and the public.
                    (D) Targeted pilot programs with evaluation 
                components to encourage innovation and experimentation 
                with new methodologies.
            (3) Analyses and evaluation.--
                    (A) In general.--Not less than $30,000,000 of the 
                amount available in each fiscal year to carry out this 
                section shall be made available to the Agency for 
                Health Care Policy and Research, acting in consultation 
                with the Centers for Disease Control and Prevention, to 
                support and conduct periodic analyses and evaluations 
                of effective interventions for smoking cessation and 
                appropriate strategies for disseminating and 
                implementing these services, including--
                            (i) the regular updating of tobacco use 
                        cessation guidelines;
                            (ii) the development and dissemination of 
                        special programs in tobacco cessation 
                        intervention for national physician and other 
                        health care provider speciality societies as 
                        well as for national and regional health plans;
                            (iii) outcomes, effectiveness, cost-
                        effectiveness and other health services 
                        research on tobacco product cessation; and
                            (iv) the evaluation of the effectiveness of 
                        such activities.
                    (B) Research.--In carrying subparagraph (A), the 
                Centers for Disease Control and Prevention, in 
                coordination with the Agency for Health Care Policy and 
                Research, the Food and Drug Administration and the 
                National Institutes of Health, shall conduct research 
                on--
                            (i) cultural, social, behavioral, 
                        neurological and psychological factors 
                        affecting how individuals, including youth, 
                        successfully quit using tobacco products;
                            (ii) the effectiveness of drugs and devices 
                        in assisting individuals to stop using tobacco 
                        products, including differences among 
                        populations based on race, gender or age;
                            (iii) the effects of cessation 
                        methodologies, including pharmacological 
                        products, on pregnant women; and
                            (iv) other research activities relating to 
                        the cessation of tobacco products.
            (4) Coordination.--Tobacco use cessation activities 
        permitted under this subsection may be conducted in 
        coordination with other federally funded programs, including--
                    (A) the special supplemental food program under 
                section 17 of the Child Nutrition Act of 1966 (42 
                U.S.C. 1786);
                    (B) the Maternal and Child Health Services Block 
                Grant program under title V of the Social Security Act 
                (42 U.S.C. 701 et seq.);
                    (C) the State Children's Health Insurance Program 
                of the State under title XXI of the Social Security Act 
                (42 U.S.C. 13397aa et seq.);
                    (D) the school lunch program under the National 
                School Lunch Act (42 U.S.C. 1751 et seq.);
                    (E) an Indian Health Service Program;
                    (F) the community health center program under 
                section 330 of the Public Health Service Act (42 U.S.C. 
                254b);
                    (G) State-initiated smoking cessation programs that 
                include provisions for reimbursing individuals for 
                medications or therapeutic techniques;
                    (H) the substance abuse and mental health services 
                block grant program, and the preventive health services 
                block grant program, under title XIX of the Public 
                Health Service Act (42 U.S.C. 300w et seq.);
                    (I) the medicaid program under title XIX of the 
                Social Security Act (42 U.S.C. 1396 et seq.); and
                    (J) programs administered by the Department of 
                Defense and the Department of Veterans Affairs.
            (5) Technical assistance.--The Secretary may provide 
        technical assistance to entities receiving assistance under 
        this section in planning and operating activities to be carried 
        out under this chapter.
    (d) Limitation.--Payments made under this chapter may not be used 
for--
            (1) making cash payments to intended recipients of tobacco 
        use cessation services;
            (2) purchasing or improving land, purchasing, constructing, 
        or permanently improving (other than minor remodeling) any 
        building or other facility, or purchasing major medical 
        equipment;
            (3) satisfying any requirement for the expenditure of non-
        Federal funds as a condition of the receipt of Federal funds; 
        or
            (4) providing financial assistance to any entity other than 
        a public or private entity.
    (e) Application.--The Secretary may make payments under this 
section to an entity for a fiscal year only if--
            (1) the entity submits to the Secretary an application for 
        such payments;
            (2) the application contains a plan that meets the 
        requirements proscribed by the Secretary;
            (3) the application contains such assurances as the 
        Secretary may require regarding compliance with the 
        requirements of this chapter;
            (4) the application is in such form and is submitted by 
        such date as the Secretary may require; and
            (5) the applicant agrees to permit and cooperate with 
        Federal investigations, including audits, undertaken in 
        accordance with regulations promulgated by the Secretary.
    (f) Funding.--The Secretary shall use amounts made available under 
section 101(d)(2)(B) for a fiscal year to carry out this section.

SEC. 322. REPORTS, DATA, AND AUDITS.

    (a) Data.--
            (1) Collection and reporting.--A State shall collect and 
        report data for a fiscal year and submit to the Secretary, not 
        later than February 1 of the succeeding fiscal year, a report 
        that--
                    (A) describes the purposes for which the State 
                expended payments made to the State under section 321;
                    (B) describes the extent of progress made by the 
                State for purposes of such section;
                    (C) meets the conditions described in paragraph 
                (2); and
                    (D) contains such additional information as 
                determined necessary by the Secretary, and which is 
                submitted in such form, as the Secretary may require.
            (2) Uniform data sets.--
                    (A) In general.--The Secretary, in consultation 
                with the States, shall develop sets of data for 
                uniformly defining levels of youth and adult use of 
                tobacco products (referred to as `uniform tobacco 
                product use data items'). The Secretary shall develop 
                formats for the uniform collecting and reporting of 
                information on such items.
                    (B) Later fiscal years.--In the case of fiscal year 
                2000 and each subsequent fiscal year, a condition under 
                paragraph (1) for a State is that the State will, in 
                accordance with the applicable format under 
                subparagraph (A), collect during such year, and include 
                in the report under paragraph (1), the necessary 
                information for each of the tobacco product use data 
                items.
            (3) Uniform criteria.--The Secretary, in consultation with 
        the States, shall establish criteria for the uniform collection 
        and reporting of data on activities authorized in section 321 
        with respect to which no uniform tobacco product use data items 
        under paragraph (2) exist.
            (4) Public inspection of reports.--A condition under 
        paragraph (1) for a fiscal year is that the State involved will 
        make copies of the report submitted under such paragraph for 
        the fiscal year available for public inspection, and will upon 
        request provide a copy of the report to any individual for a 
        charge not exceeding the cost of providing the copy.
    (b) Audits.--
            (1) Fiscal control and accounting procedures.--Each State 
        shall establish fiscal control and fund accounting procedures 
        as may be necessary to ensure the proper disbursal of and 
        accounting for Federal funds paid to the State under section 
        321 and funds transferred for use under this chapter.
            (2) Annual submission.--Each State shall annually audit its 
        expenditures from payments received under section 321. Such 
        State audits shall be conducted by an entity independent of any 
        agency administering a program funded under this chapter, and, 
        in so far as practical, in accordance with the Comptroller 
        General's standards for auditing governmental organizations, 
        programs, activities, and functions. Within 30 days following 
        the date on which each audit is completed, the chief executive 
        officer of the State shall transmit a copy of that audit to the 
        Secretary.
            (3) Repayments.--Each State shall, after being provided by 
        the Secretary with adequate notice and an opportunity for a 
        hearing within the State, repay to the United States amounts 
        found not to have been expended in accordance with the 
        requirements of this chapter. If such repayment is not made, 
        the Secretary shall, after providing the State with adequate 
        notice and opportunity for a hearing within the State, offset 
        such amounts against the amount of any funding to which the 
        State is or may become entitled under this subtitle.
            (4) Availability.--The State shall make copies of the 
        reports and audits required by this subsection available for 
        public inspection within the State.
            (5) Evaluation.--The Comptroller General of the United 
        States shall, from time to time, evaluate the expenditures by 
        the States of payments under this chapter in order to ensure 
        that expenditures are consistent with the provisions of this 
        chapter.
            (6) Report by secretary.--Not later than October 1, 2000, 
        the Secretary shall prepare and submit to the appropriate 
        committees of Congress a report concerning the activities of 
        the States that have received funds under this chapter and may 
        include in the report any recommendations for appropriate 
        changes in legislation.
    (c) Nonapplication of Certain Provisions.--Title XVII of the 
Omnibus Budget Reconciliation Act of 1981 shall not apply with respect 
to audits of funds allotted under this chapter.

                  Subtitle B--Health Research Program

              CHAPTER 1--NATIONAL FUND FOR HEALTH RESEARCH

SEC. 331. ESTABLISHMENT OF NATIONAL FUND FOR HEALTH RESEARCH.

    (a) Establishment.--There is established within the National 
Tobacco Trust Fund a fund, to be known as the ``National Fund for 
Health Research'' (hereafter in this section referred to as the 
``Fund''), consisting of such amounts as are transferred to the Fund 
under subsection (b) and any interest earned on investment of amounts 
in the Fund.
    (b) Transfers to Fund.--There are authorized to be appropriated 
amounts provided under section 101(d)(2)(C) to carry out this section.
    (c) Obligations From Fund.--Appropriations shall be made under this 
section to each member Institute or Center of the National Institutes 
of Health in proportion to the amount otherwise annually appropriated 
for each such Institute or Center.
    (d) Spending Priorities.--The director of each member Institute or 
Center of the National Institutes of Health shall appropriately 
prioritize the use of funds made available from the Fund for tobacco-
related diseases and conditions, including those affecting women and 
minorities.

                 CHAPTER 2--TOBACCO PREVENTION RESEARCH

SEC. 335. NATIONAL TOBACCO RESEARCH TASK FORCE.

    (a) Establishment.--The Secretary shall establish a National 
Tobacco Research Task Force (referred to in this subtitle as the 
`National Task Force') to foster coordination among public health 
agencies, academic bodies, and community groups that conduct or support 
tobacco-related biomedical, clinical, behavioral, health services, 
public health and community, and surveillance and epidemiology research 
activities.
    (b) Composition.--The National Task Force shall be composed of--
            (1) the Surgeon General;
            (2) the Director of the Office of Smoking and Health of the 
        Centers for Disease Control and Prevention;
            (3) the Administrator of the Agency for Health Care Policy 
        and Research;
            (4) the Director of the National Institutes of Health;
            (5) the Director of the Office of Minority Health;
            (6) the Commissioner on Food and Drugs;
            (7) the Administrator of the Environmental Protection 
        Agency;
            (8) two representatives from non-governmental public health 
        or tobacco control organizations; and
            (9) two representatives from State or local government 
        public health agencies and offices.
A vacancy on the Task Force shall not effect its ability to conduct 
business.
    (c) Chair.--The National Task Force shall be chaired by the 
Secretary or the designee of the Secretary.
    (d) Duties.--The Task Force shall--
            (1) in accordance with research agenda recommended under 
        section 336, coordinate and advise tobacco-related research 
        activities among Federal public health service agencies;
            (2) collect and make available to States and communities, 
        through publication and other appropriate means, evidence-based 
        tobacco-related research results and recommendations as to the 
        practical application of such results; and
            (3) report on a biennial basis to the Secretary and the 
        Committee on Labor and Human Resources of the Senate, and the 
        Committee on Commerce of the House of Representatives on the 
        current and planned activities of participating Federal 
        agencies.

SEC. 336. RESEARCH ACTIVITIES.

    (a) In General.--The Director of the Centers for Disease Control 
and Prevention, in conjunction with the National Tobacco Research Task 
Force, shall carry out tobacco-related research, including research 
on--
            (1) the relationship between the use of tobacco products 
        and cancer, cardiovascular diseases, lung diseases and other 
        diseases;
            (2) the effects of tobacco products, ingredients of tobacco 
        products, and tobacco smoke on the human body and methods of 
        reducing any negative effects, including the development of 
        non-addictive, reduced risk tobacco products;
            (3) the addictive effects of nicotine and how such effects 
        differ with respect to different individuals;
            (4) the prevention of diseases and conditions most 
        associated with the use of tobacco products;
            (5) differentials between brands of tobacco products with 
        respect to health effects or addiction;
            (6) the relationship between the use of tobacco products 
        and cancer, particularly among minorities;
            (7) risk factors for tobacco use by children, including 
        respiratory illness related to exposure to environmental 
        tobacco smoke;
            (8) risks associated with environmental exposure to tobacco 
        smoke;
            (9) effects of tobacco use by pregnant women; and
            (10) cultural, social, behavioral, neurological and 
        psychological reasons that individuals refrain from using 
        tobacco products, or continue using tobacco products.
    (b) Authorization of Appropriations.--There are authorized to be 
appropriated amounts provided under section 101(d)(2)(C) to carry out 
this section.
    (c) Trigger.--No expenditures shall be made under this section 
during any fiscal year in which the annual amount appropriated for the 
Centers for Disease Control and Prevention is less than the amount so 
appropriated for the prior fiscal year.

SEC. 337. TOBACCO PREVENTION DATABASE AND EVALUATION.

    (a) Duties.--The Director of the Centers for Disease Control and 
Prevention, working in consultation with National Task Force, shall 
carry out tobacco-related surveillance and epidemiologic studies, 
including--
            (1) the use of youth surveillance systems to monitor the 
        use of all tobacco products by individuals under the age of 18, 
        including brands used to enable determinations to be made of 
        company-specific youth market share;
            (2) the conduct of State-specific youth tobacco use surveys 
        to monitor trends in the use of tobacco products in all States 
        and the District of Columbia;
            (3) the conduct of tobacco product surveillance to monitor 
        changes in the design, toxicity and biological affects of 
        tobacco products;
            (4) the conduct of social and policy monitoring of the 
        effects of legislative, policy and media programs on tobacco 
        use;
            (5) the conduct of environmental tobacco smoke exposure 
        monitoring, including biochemical monitoring of such exposure;
            (6) adult surveillance to track the adult use of all 
        tobacco products;
            (7) the use of cancer registries to monitor the effects of 
        tobacco use and anti-tobacco programs on cancer incidence;
            (8) the use of State-based behavioral risk factor 
        surveillance to monitor health risk behaviors associated with 
        tobacco use, including youth drug use; and
            (9) the use of State-based pregnancy risk assessments to 
        monitor the effects of tobacco use on pregnancy outcomes.
    (b) Authorization of Appropriations.--There are authorized to be 
appropriated amounts provided under section 101(d)(2)(b) to carry out 
this section.
    (c) Trigger.--No expenditures shall be made under this section 
during any fiscal year in which the annual amount appropriated for the 
Centers for Disease Control and Prevention is less than the amount so 
appropriated for the prior fiscal year.

                  Subtitle C--Miscellaneous Provisions

SEC. 341. LIMITATION ON ADMINISTRATIVE COSTS.

    (a) Federal Administration.--The Secretary may use not to exceed--
            (1) 4 percent of the amount made available under each 
        program under this title in the first fiscal year for which 
        amounts are made available; and
            (2) 3 percent of the amount made available under each 
        program under this title in the 2nd and each subsequent fiscal 
        year for which amounts are made available;
for the administration (exclusive of scientific and programmatic 
technical assistance) of each such program under this title.
    (b) State Administration.--A State may use not to exceed--
            (1) 4 percent of the amount made available to the State 
        under any program under this title in the first fiscal year for 
        which amounts are made available; and
            (2) 3 percent of the amount made available to the State 
        under any program under this title in the 2nd and each 
        subsequent fiscal year for which amounts are made available;
for the administration of each such program.

SEC. 342. WITHHOLDING.

    (a) Withholding for Misuse.--
            (1) In general.--The Secretary shall, after adequate notice 
        and opportunity for a hearing conducted within the affected 
        State, withhold funds from any State which does not use amounts 
        provided under this title in accordance with the requirements 
        of this title or the certifications otherwise provided by 
        States under this title. The Secretary shall withhold such 
        funds until the Secretary finds that the reason for the 
        withholding has been removed and there is reasonable assurance 
        that it will not recur.
            (2) Investigation.--The Secretary may not institute 
        proceedings to withhold funds under paragraph (1) unless the 
        Secretary has conducted an investigation concerning whether the 
        State has used its amounts provided under this title in 
        accordance with the requirements of this title or the 
        certifications otherwise provided under this title. 
        Investigations required by this paragraph shall be conducted 
        within the affected State by qualified investigators.
            (3) Response to complaints.--The Secretary shall respond in 
        an expeditious manner to complaints of a substantial or serious 
        nature that a State has failed to use funds in accordance with 
        the requirements of this title or the certifications otherwise 
        provided under this title.
            (4) Minor failures.--The Secretary may not withhold funds 
        under paragraph (1) from a State for a minor failure to comply 
        with the requirements of this title or certifications otherwise 
        provided under this title.
    (b) Investigations.--
            (1) By secretary.--The Secretary shall conduct in several 
        States in each fiscal year investigations of the use of funds 
        received by the States under this title in order to evaluate 
        compliance with the requirements of this title and 
        certifications otherwise provided under this title.
            (2) By comptroller general.--The Comptroller General of the 
        United States may conduct investigations of the use of funds 
        received under this title by a State in order to insure 
        compliance with the requirements of this title and 
        certifications otherwise provided under this title.
    (c) Availability of Records.--Each State, and each entity which has 
received funds from amounts provided under this title to a State, shall 
make appropriate books, documents, papers, and records available to the 
Secretary or the Comptroller General of the United States, or any of 
their duly authorized representatives, for examination, copying, or 
mechanical reproduction on or off the premises of the appropriate 
entity upon a reasonable request therefore.
    (d) Limitation.--
            (1) In general.--In conducting any investigation in a 
        State, the Secretary or the Comptroller General of the United 
        States may not make a request for any information not readily 
        available to such State or an entity which has received 
funds from amounts made available to the State under this title or make 
an unreasonable request for information to be compiled, collected, or 
transmitted in any form not readily available.
            (2) Nonapplication to judicial proceedings.--Paragraph (1) 
        does not apply to the collection, compilation, or transmittal 
        of data in the course of a judicial proceeding.

SEC. 343. NONDISCRIMINATION.

    (a) Programs and Activities.--
            (1) In general.--For the purpose of applying the 
        prohibitions against discrimination on the basis of age under 
        the Age Discrimination Act of 1975, on the basis of handicap 
        under section 504 of the Rehabilitation Act of 1973, on the 
        basis of sex under title IX of the Education Amendments of 
        1972, or on the basis of race, color, or national origin under 
        title VI of the Civil Rights Act of 1964, programs and 
        activities funded in whole or in part with funds made available 
        under this title are considered to be programs and activities 
        receiving Federal financial assistance.
            (2) Sex or religion.--No person shall on the ground of sex 
        or religion be excluded from participation in, be denied the 
        benefits of, or be subjected to discrimination under, any 
        program or activity funded in whole or in part with funds made 
        available under this title.
    (b) Failure To Comply.--Whenever the Secretary finds that a State, 
or an entity that has received a payment from a State under this title, 
has failed to comply with a provision of law referred to in subsection 
(a)(1), with subsection (a)(2), or with an applicable regulation 
(including one prescribed to carry out subsection (a)(2)), the 
Secretary shall notify the chief executive officer of the State and 
shall request such officer to secure compliance. If within a reasonable 
period of time, not to exceed 60 days, the chief executive officer 
fails or refuses to secure compliance, the Secretary may--
            (1) refer the matter to the Attorney General with a 
        recommendation that an appropriate civil action be instituted;
            (2) exercise the powers and functions provided by title VI 
        of the Civil Rights Act of 1964, the Age Discrimination Act of 
        1975, or section 504 of the Rehabilitation Act of 1973, as may 
        be applicable; or
            (3) take such other action as may be provided by law.
    (c) Action by Attorney General.--When a matter is referred to the 
Attorney General pursuant to subsection (b)(1), or whenever he has 
reason to believe that a State or an entity is engaged in a pattern or 
practice in violation of a provision of law referred to in subsection 
(a)(1) or in violation of subsection (a)(2), the Attorney General may 
bring a civil action in any appropriate district court of the United 
States for such relief as may be appropriate, including injunctive 
relief.

SEC. 344. INTERNATIONAL TOBACCO CONTROL.

    (a) Governmental Activities.--
            (1) In general.--The Secretary (in consultation with the 
        Secretary of State and the Secretary of the Treasury, and 
        acting through the Director of the Centers for Disease Control 
        and Prevention (referred to in this section as the 
        ``Director'')) shall provide bilateral assistance to foreign 
        countries, and multilateral assistance to assist such countries 
        in reducing and preventing the use of tobacco in foreign 
        countries and in promoting tobacco use cessation. Such 
        assistance shall be focused on preventing the use of tobacco 
        products by minors.
            (2) Use.--In carrying out paragraph (1), the Secretary may 
        provide funding and technical assistance, in a manner that 
        encourages program development based on the cultural 
        environment of the country involved, to--
                    (A) strengthen the coordination of international 
                tobacco product use prevention, reduction, and 
                cessation data collection and analysis;
                    (B) assist countries to design, implement and 
                evaluate effective anti-tobacco strategies that are 
                based on evidence from successful programs used in the 
                United States or other countries; or
                    (C) provide leadership in the global harmonization 
                of tobacco product use prevention, reduction, and 
                cessation policies, particularly those that control 
                smuggling, prevent children from using tobacco products 
                and protect the public from exposure to environmental 
                tobacco smoke.
            (3) Partnerships.--In providing multilateral assistance 
        under this subsection, the Director may provide for the 
        establishment of partnerships between entities and organization 
        such as the World Bank, the World Health Organization, the 
        United Nations International Children's Emergency Fund, and 
        other similar organization, to create linkages to advance 
        tobacco control practices globally.
            (4) Administration.--
                    (A) Application.--To be eligible to receive 
                assistance under this subsection, an entity shall 
                prepare and submit to the Director an application at 
                such time, in such manner and containing such 
                information as the Director may require. The evaluation 
                of such applications shall be made based on selective 
                and appropriate criteria determined appropriate by the 
                Director.
                    (B) Technical assistance.--The Director shall 
                provide technical assistance and scientific support in 
                carrying out the activities described in paragraph (1).
            (5) Authorization of appropriations.--There are authorized 
        to be appropriated amounts provided under section 101(d)(2)(D) 
        to carry out this section.
    (b) Nongovernmental Activities.--
            (1) Purpose.--The purpose of this subsection is to 
        establish the American Center on Global Health and Tobacco 
        (referred to in this subsection as ``ACT''). ACT shall assist 
        organizations in other countries to reduce and prevent the use 
        of tobacco. Activities ACT supports shall include--
                    (A) public education programs that inform the 
                public about the hazards of tobacco use and of 
                environmental tobacco smoke;
                    (B) mass media campaigns, including paid counter-
                tobacco advertisements, to reverse the image appeal of 
                pro-tobacco messages, especially those that glamorize 
                and ``Westernize'' tobacco use to young people; and
                    (C) education about the economic and societal costs 
                of tobacco use, and effective tobacco use prevention 
                and cessation strategies that are appropriate for the 
                country involved.
            (2) Establishment.--
                    (A) In general.--There is hereby established in the 
                District of Columbia a private, nonprofit corporation 
                to be known as the American Center on Global Health and 
                Tobacco. ACT shall--
                            (i) not be an agency or establishment of 
                        the United States; and
                            (ii) except as otherwise provided in this 
                        section, be subject to, and have all the powers 
                        conferred upon a nonprofit corporation by the 
                        District of Columbia Nonprofit Corporation Act 
                        (D.C. Code section 29-501 et seq.).
                    (B) Relation to united states.--Nothing in this 
                subsection shall be construed as making ACT an agency 
                or establishment of the United States, or as making the 
                members of ACT, or its employees, officers or employees 
                of the United States.
                    (C) Relation to nongovernmental organizations.--ACT 
                shall have a limited staff, and, to the maximum extent 
                practicable, utilize the available experience and 
                talents of nongovernmental organizations with 
                specialized experience in health, behavioral sciences, 
                education, media, marketing and tobacco.
                    (D) International advisory council.--An 
                International Advisory Council consisting of 
                representatives from key global, regional, and national 
                public health organizations, and leading individual 
                educators and health professionals shall provide 
                advisory assistance to ACT.
            (3) Authorization of appropriations.--There are authorized 
        to be appropriated an amount equal to 50 percent amounts 
        provided under section 101(d)(2)(D) to carry out this section.
            (4) Requirements for eligibility.--
                    (A) Oversight.--ACT and its grantees shall be 
                subject to the oversight and supervision of Congress.
                    (B) Compliance.--
                            (i) Funding contingent on compliance.--
                        Annual payments may be made to ACT under this 
                        subsection only if ACT complies with the 
                        requirements specified in this subsection.
                            (ii) Use of funds.--ACT may only fund 
                        programs for private sector or quasi-
                        governmental groups for programs which are 
                        consistent with the purposes of this 
                        subsection.
                    (C) Salaries and compensation.--Officers and 
                employees of ACT may not receive any salary or other 
                compensation from any source other than ACT for 
                services performed for ACT.
                    (D) Stocks and dividends.--ACT shall not issue any 
                shares of stock or declare or pay any dividends.
                    (E) Audits.--
                            (i) Public accounts.--The accounts of ACT 
                        shall be audited annually in accordance with 
                        generally accepted auditing standards.
                            (ii) Comptroller general.--The financial 
                        transactions of ACT for each fiscal year may be 
                        audited by the Comptroller General, and a 
                        report of each such audit submitted to 
                        Congress. A copy of each report shall be 
                        furnished to the Secretary and to ACT at the 
                        time the report is submitted to Congress.
                    (F) Recordkeeping.--ACT shall ensure that each 
                recipient of assistance from ACT under this subsection 
                keeps such records as may be reasonably necessary to 
                fully disclose the amount and the disposition by such 
                recipient of the proceeds 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. 
                ACT shall ensure that it, or any of its duly authorized 
representatives, shall have access for the purpose of audit and 
examination to any books, documents, papers, and records of each 
recipient of assistance from ACT that are pertinent to assistance 
provided through ACT under this subsection.

           TITLE IV--LIABILITY PROVISIONS AND CONSENT DECREES

SEC. 400. DISMISSAL OF AND LIMITATIONS ON CIVIL ACTIONS.

    (a) State Attorney General Actions.--
            (1) Pending actions.--With respect to a State, to be 
        eligible to receive funds under section 111, the attorney 
        general for such State shall resolve any civil action seeking 
        recovery for expenditures attributable to the treatment of 
        tobacco-related illnesses and conditions that has been 
        commenced by the State against a manufacturer, distributor, or 
        retailer of a tobacco product and is pending on the date of 
        enactment of this Act.
            (2) Future actions based on prior conduct.--With respect to 
        a State, to be eligible to receive funds under section 111, the 
        attorney general for such State shall agree that the State will 
        not commence a civil action after the date of enactment of this 
        Act that is based on the conduct of a participating 
        manufacturer, distributor or retailer of a tobacco product that 
        occurred prior to the date of enactment of this Act seeking 
        recovery for expenditures attributable to the treatment of 
        tobacco induced illnesses and conditions against such a 
        manufacturer, distributor or retailer.
    (b) State Option for One-Time Opt Out.--
            (1) In general.--The Secretary shall establish procedures 
        under which the attorney general of a State may, not later than 
        1 year after the date of enactment of this Act, elect not to 
        resolve an action described in subsection (a)(1) or not enter 
        into an agreement under subsection (a)(2). A State whose 
        attorney general that makes such an election shall not be 
        eligible to receive payments from the Trust Fund under section 
        111. Procedures under this paragraph shall permit such a State 
        to make such an election on a one-time basis.
            (2) Extension.--In the case of a State that has secured a 
        judgment against a manufacturer, distributor or retailer of a 
        tobacco product in an action described in subsection (a)(1) 
        prior to or during the period described in paragraph (1), and 
        such judgment has been appealed by such manufacturer, 
        distributor, or retailer, such period shall be extended during 
        the pendency of the appeal and for an additional period as 
        determined appropriate by the Secretary.
            (3) Application to certain states.--A State that has 
        resolved an action described in subsection (a)(1) with a 
        manufacturer, distributor or retailer of a tobacco product 
        prior to the date of enactment of this Act may not make an 
        election described in paragraph (1) if, as part of the 
        resolution of such action, the State agreed that the enactment 
        of any national tobacco settlement legislation would supersede 
        the provisions of the resolution.
    (c) Rules of Construction.--
            (1) Post enactment claims.--Nothing in this title shall be 
        construed to limit the ability of a State to commence an action 
        against a participating manufacturer, distributor or retailer 
        of a tobacco product with respect to a claim that is based on 
        the conduct of such manufacturer, distributor or retailer that 
        occurred after the date of enactment of this Act.
            (2) No limitation on individuals.--Nothing in this section 
        shall be construed to limit the right of an individual or group 
        of individuals to commence a civil action for past, present, or 
        future conduct by manufacturers, distributors or retailers of 
        tobacco products.
    (d) Definition.--As used in this section, the term ``participating 
manufacturer'' means a manufacturer of tobacco products that has 
entered into a consent decree under section 411.
    (e) Other Actions.--Any civil action for claims based on addiction 
to or dependence on a tobacco product filed by the Castano Plaintiffs 
Legal Committee that is pending against a manufacturer that has entered 
into a consent decree under section 411, is preempted, terminated, and 
settled in consideration for the establishment of the National Tobacco 
Cessation Program described in section 321.

                    Subtitle A--Liability Provisions

SEC. 401. NATIONAL VICTIMS' COMPENSATION FUND.

    (a) Establishment.--
            (1) In general.--The Secretary of the Treasury, using 
        amounts made available under section 101(d)(2)(D), shall 
        establish a fund within the National Tobacco Trust Fund to be 
        known as the ``National Victims' Compensation Fund'' (referred 
        to in this section as the ``Fund'') to be used by the Attorney 
        General solely for tobacco-related liability judgments and 
        settlements that are based on the conduct of a manufacturer.
            (2) Base payment.--The Secretary of the Treasury shall 
        annually deposit into the Fund amounts made available for such 
        purposes under section 101(d)(2)(D).
            (3) Contingency reserve account.--
                    (A) In general.--As part of the Fund, the Secretary 
                of the Treasury shall establish a Contingency Reserve 
                Account (referred to in this section as the `Account'). 
                The Secretary shall deposit into the Account any 
                amounts remaining in the Fund and unobligated at the 
                end of each fiscal year. Such Account shall be 
                established as an interest-bearing account.
                    (B) Use of account.--Amounts contained in the 
                Account shall be used as provided for in subsection 
                (d)(2).
                    (C) Public health activities.--With respect to any 
                fiscal year, if amounts in the Account exceed 
                $20,000,000,000, the Attorney General, in consultation 
                with the Secretary, shall determine whether any such 
                excess amounts should be transferred to the Secretary 
for use under title III.
    (b) Use of Fund.--The Attorney General shall use amounts in the 
Fund to pay the damages associated with any judgments or settlements 
for tobacco-related civil actions that are based on the conduct of a 
manufacturer that occurred prior to the date of enactment of this Act 
(including actions under section 1964 of title 18, United States Code).
    (c) Procedure.--
            (1) Application.--Upon the settlement of a tobacco-related 
        civil action described in subsection (b), or upon the entry of 
        a judgment in such an action, in a manner that provides for the 
        payment of amounts to compensate the plaintiff for damages 
        sustained as a result of a tobacco-related condition or 
        illness, the plaintiff shall submit to the Attorney General an 
        application for the payment of the amount of such settlement or 
        judgment from the Fund.
            (2) Certification.--Not later than 90 days after the date 
        on which an application is submitted under paragraph (1), the 
        Attorney General shall determine the validity of such 
        application and any amount for which the applicant is eligible 
        under this section.
            (3) Payment.--Not later than 30 days after making a 
        determination that an applicant under paragraph (1) is eligible 
        for a payment under this section, the Attorney General shall 
        make a lump sum payment from the Fund to the applicant.
            (4) Small claimants.--The Attorney General shall establish 
        procedures to ensure that priority is given under this section 
        to the payment of claims of individuals and small classes of 
        claimants.
    (d) Liability for Claims in Excess of Amounts in Fund.--
            (1) Liability of manufacturers.--
                    (A) In general.--If, with respect to a fiscal year, 
                the aggregate amount of all payments to be made to 
                eligible applicants under subsection (b) exceed the 
                amount in the Fund for such year, such excess amount 
                shall, except as provided in subparagraph (B), be paid 
                by manufacturers.
                    (B) Limitation on amount.--The aggregate amount of 
                all payments described in subparagraph (A) (excluding 
                amounts paid through the Fund) for which manufacturers 
                shall be liable in any fiscal year shall not exceed 
                $4,000,000,000. Amounts paid by a manufacturer to 
                settle a civil action commenced by a State prior to the 
                date of enactment of this Act shall not apply in 
                determining the liability of a manufacturer under this 
                subparagraph.
            (2) Use of contingency reserve account.--In any fiscal year 
        in which the aggregate amount of all payments to be made to 
        eligible applicants under subsection (b) exceed the sum of the 
        amount in the Fund for such year and the limitation described 
        in paragraph (2)(B), such excess amount shall be paid from 
        amounts contained in the Account.
            (3) Payment of excess.--If the Attorney General determines 
        under subsection (b) that amounts to be paid to eligible 
        applicants for a fiscal year exceed the sum of the amounts 
        available in the Fund for such year, the limitation described 
        in paragraph (1)(B), and the amounts contained in the Account, 
        the Attorney General shall provide for the payment of any 
        unpaid amounts in the subsequent fiscal year.
    (e) Application to Certain Manufacturers.--The provisions of this 
section shall apply to a manufacturer that begins manufacturing tobacco 
products after the date of enactment of this Act, except that if such a 
manufacturer fails to make payments as provided for in subsection 
(d)(1), such manufacturer shall pay to the Attorney General an amount 
equal to 150 percent of the amount that such manufacturer would have 
paid under such subsection.
    (f) Regulations.--The Attorney General shall promulgate regulations 
to establish procedures for the implementation and enforcement of this 
section.
    (g) Limitation on Application of Cap.--
            (1) In general.--The provisions of subsection (d) shall not 
        apply with respect to any judgment or settlement in any civil 
        action where it has been determined that the manufacturer 
        involved--
                    (A) has failed to make payments on assessment under 
                section 102;
                    (B) has failed to disclose documents in accordance 
                with discovery requests or section 404;
                    (C) has failed to enter into or comply with consent 
                decrees under subtitle B; or
                    (D) has otherwise failed to comply with the 
                provisions of this Act, or an amendment made by this 
                Act.
            (2) Year involved.--If, with respect to a manufacturer to 
        which paragraph (1) applies, the cap contained in subsection 
        (d)(1)(B) is not reached for the year involved, the limitation 
        in such paragraph (1) shall apply to such manufacturer in the 
        first year in which the cap is reached.
    (h) Distributors and Retailers.--Nothing in this section shall be 
construed as limiting the liability of any distributor or retailer of a 
tobacco product.

SEC. 402. RULE OF CONSTRUCTION.

    Nothing in this title shall be construed as granting immunity to 
any manufacturer of tobacco products with respect to tobacco-related 
civil actions for damages sustained as a result of tobacco-related 
conditions or illnesses, or for criminal actions relating to tobacco 
products, regardless of whether the conduct involved occurred prior to 
or after the date of enactment of this Act.

SEC. 403. ATTORNEY'S FEES AND EXPENSES.

    (a) Arbitration Panel.--
            (1) Establishment.--For the purpose of awarding of 
        attorneys' fees and expenses relating to litigation, involving 
        a claim brought by a Federal, State or local government entity, 
        affected by, or legal services that resulted in whole or in 
        part in, this Act, there is established an Arbitration Panel 
        which shall consist of--
                    (A) 3 members to be appointed by the Trustees;
                    (B) 1 member to be appointed by the participating 
                manufacturers;
                    (C) 1 member to be appointed by the Attorneys 
                General of the States who were signatories to the 
                Memorandum of Understanding dated June 20, 1997, by and 
                between tobacco manufacturers, the Attorneys Generals, 
                and private attorneys; and
                    (D) 1 member to be appointed by the private 
                attorneys, including attorneys representing plaintiffs 
                in the case of Dianne Castano v. American Tobacco 
                Company.
            (2) Operation.--
                    (A) Establishment.--The members of the Arbitration 
                Panel shall be appointed not later than 30 days after 
                the effective date of this Act.
                    (B) Procedures.--Not later than 30 days after the 
                date on which all members of the Arbitration Panel are 
                appointed under paragraph (1), the Panel shall 
                establish the procedures under which the Panel will 
                operate which shall include--
                            (i) a requirement that any finding by the 
                        Arbitration Panel must be in writing and 
                        supported by written reasons;
                            (ii) procedures for the exchanging of 
                        exhibits and witness lists by the various 
                        claimants for awards;
                            (iii) to the maximum extent practicable, 
                        requirements that proceedings before the Panel 
                        be based on affidavits rather than live 
                        testimony; and
                            (iv) a requirement that all claims be 
                        submitted to the Arbitration Panel not later 
                        than 3 months after the effective date of this 
                        Act and a determination made by the Panel with 
                        respect to such claims not later than 7 months 
                        after such date of enactment.
            (3) Right to petition.--Any individual attorney or group of 
        attorneys involved in litigation affected by this Act shall 
        have the right to petition the Arbitration Panel for attorneys' 
        fees and expenses.
            (4) Criteria.--In making any award pursuant to this 
        section, the Arbitration Panel shall consider the following 
        criteria:
                    (A) The time and labor required by the claimant.
                    (B) The novelty and difficulty of the questions 
                involved in the action for which the claimant is making 
                a claim.
                    (C) The skill requisite to perform the legal 
                service involved properly.
                    (D) The preclusion of other employment by the 
                attorney due to acceptance of the action involved.
                    (E) Whether the fee is fixed or a percentage.
                    (F) Time limitations imposed by the client or the 
                circumstances.
                    (G) The amount involved and the results obtained.
                    (H) The experience, reputation, and ability of the 
                attorneys involved.
                    (I) The undesirability of the action.
                    (J) Whether the fee is excessive in relation to the 
                overall judgment or settlement award.
            (5) Appeal and enforcement.--The findings of the 
        Arbitration Panel shall be final, binding, nonappealable, and 
        payable within 30 days after the date on which the finding is 
        made public, except that if an award is to be paid in 
        installments, the first installment shall be payable within 
        such 30 day period and succeeding installments shall be paid 
        annually thereafter.
    (b) Source and Payment of Awards.--In no event shall any award of 
the Arbitration Panel be paid from, credited against, or otherwise 
affect in any way any fee payments that are required to be made by any 
participating manufacturer under section 102 or under any other 
provision of this Act. Any such award shall be paid by participating 
manufacturers (except a manufacturer described in section 102(a)(7)(B)) 
pursuant to an allocation agreement among such manufacturers.
    (c) Validity and Enforceability of Private Agreements.--
Notwithstanding any other provision of this Act, nothing in this 
section shall be construed to abrogate or restrict in any way the 
rights of any parties to mediate, negotiate, or settle any fee or 
expense disputes or issues to which this section applies, or to enter 
into private agreements with respect to the allocation or division of 
fees among the attorneys party to any such agreement.
    (d) Disclosure.--The Secretary shall promulgate regulations for the 
public disclosure of any award of attorneys' fees under this section.

SEC. 404. PUBLIC DISCLOSURE OF TOBACCO INDUSTRY DOCUMENTS.

    (a) Findings.--Congress finds that--
            (1) the American tobacco industry has made claims of 
        attorney-client privilege, attorney work product, and trade 
        secrets to protect from public disclosure thousands of internal 
        documents sought by civil litigants;
            (2) a number of courts have found that these claims of 
        privilege were not made in good faith; and
            (3) to promote understanding by the public of the tobacco 
        industry's research and practices, a prompt and full exposition 
        of tobacco documents will further the purposes of this Act.
    (b) Applicability.--To be eligible to be issued a license to 
manufacture tobacco products under section 222, a manufacturer shall 
comply with the provisions of this section.
    (c) National Tobacco Document Depository.--Manufacturers of tobacco 
products shall, not later than 60 days after the date of enactment of 
this Act, establish a National Tobacco Document Depository (in this 
section referred to as the ``Depository''). Such Depository shall be 
located in the Washington, D.C. area.
    (d) Submission of Documents.--Not later than 60 days after the date 
on which the Depository is established under subsection (c), each 
manufacturer of a tobacco product shall submit to the Depository every 
existing document (including any document subject to a claim of 
attorney-client privilege, attorney work product, or trade secret 
protection) in the manufacturer's possession, custody, or control--
            (1) relating, referring, or pertaining to--
                    (A) any studies, research, or analysis of any 
                possible health or pharmacological effects in humans or 
                animals, including addiction, associated with the use 
                of tobacco products or components of tobacco products;
                    (B) the engineering, manipulation, or control of 
                nicotine in tobacco products;
                    (C) the sale or marketing of tobacco products;
                    (D) any research involving safer or less hazardous 
                tobacco products;
                    (E) tobacco use by minors; or
                    (F) the relationship between advertising or 
                promotion and the use of tobacco products;
            (2) produced, or ordered to be produced, by the tobacco 
        product manufacturer in any health-related civil or criminal 
        proceeding, judicial or administrative; and
            (3) that the National Tobacco Documents Review Board 
        (established under subsection (h)) determines is appropriate 
        for submission to the Depository.
    (e) Document Identification and Index.--Documents submitted to the 
depository under this section shall be sequentially numbered and marked 
to identify the tobacco manufacturer. Not later than 30 days after the 
date on which such documents are submitted to the Depository, each 
tobacco manufacturer shall supply the Depository with a comprehensive 
document index which references the applicable documents described in 
subsection (c)(1).
    (f) Privilege and Trade Secret Claims.--
            (1) In general.--Any document that is subject to a claim by 
        a tobacco manufacturer of attorney-client privilege, attorney 
        work product, or trade secret protection shall be identified as 
        such and shall be submitted separately to the Depository. The 
        compliance with this section by a manufacturer shall not be 
        deemed to be a waiver of any applicable claim of privilege or 
        trade secret protection.
            (2) Privilege and trade secret logs.--Not later than 90 
        days after the date on which the Depository is established, 
        each manufacturer shall submit to the Depository a 
        comprehensive log that identifies on a document-by-document 
        basis all documents submitted to the Depository for which the 
        manufacturer asserts attorney-client privilege, attorney work 
        product, or trade secrecy. Any such claim shall be made by a 
        manufacturer in good faith.
            (3) Requirements.--The log established under paragraph (2) 
        shall--
                    (A) be organized in numerical order based upon the 
                document identifier assigned to each document;
                    (B) with respect to each such document contained in 
                the log, the log shall contain--
                            (i) a description of the document, 
                        including type of document, title of document, 
                        name and position or title of each author, 
                        addressee, and other recipient, the document 
                        date, the document purpose and general subject 
                        matter;
                            (ii) an explanation of why the document or 
                        a portion of the document is privileged or 
                        subject to trade secret protection; and
                            (iii) a statement whether any previous 
                        claim of privilege or trade secret was denied 
                        and, if so, in what proceeding.
            (4) Review.--With respect to documents for which the 
        manufacturer previously has asserted one or more of the 
        privileges described in paragraph (2), or has asserted a claim 
        of trade secret protection, the manufacturer shall conduct a 
        good faith de novo review of such documents to determine 
        whether such privilege or trade secret protection is 
        appropriate. Each manufacturer shall submit a declaration, 
        pursuant to section 1746 of title 28, United States Code, by an 
        individual with responsibility for the de novo review of such 
        documents, the preparation of the privilege log and who has 
        knowledge of its contents. The declarant shall attest to the 
        manufacturer's compliance with the requirements of this section 
        pertaining to the review of documents and preparation of a 
        privilege log.
            (5) Public availability.--Not later than 30 days after the 
        receipt of a log under this subsection, the Depository shall 
        make such log available for public inspection and review.
    (g) Disclosure by the Depository.--Not later than 30 days after the 
receipt of a document that is not subject to a claim of attorney-client 
privilege, attorney work product, or trade secret protection, the 
Depository shall make the document available to the public using the 
Internet and other means.
    (h) Tobacco Documents Review Board.--
            (1) In general.--There shall be established a Tobacco 
        Documents Review Board (referred to in this subsection as the 
        ``Board'') that shall consist of 5 members to be appointed by 
        the President with the advice and consent of the Senate.
            (2) Administrative provisions.--
                    (A) Eligibility.--To be eligible to serve as a 
                member of the Board, a individual shall--
                            (i) be a citizen of the United States;
                            (ii) not be in violation of any Federal 
                        ethics or conflict of interest rules applicable 
                        to Federal appointees; and
                            (iii) have a demonstrated skill in the law.
                    (B) Terms.--A member of the Board shall be 
                appointed for a term of 7 years and shall be eligible 
                for reappointment.
                    (C) Staff.--The Board may hire such staff and 
                establish such operating procedures as the Board 
                determines to be necessary to carry out its functions 
                under this section.
            (3) Responsibility for depository.--The Board shall 
        maintain the Depository and, in consultation with the General 
        Services Administration, establish guidelines and procedures 
        for the establishment and operation of the Depository, 
        including guidelines for the immediate disclosure of documents 
        that are not subject to unresolved claims of privilege or trade 
        secrecy. In establishing such guidelines and procedures, the 
        Board shall ensure that the Depository is open to the public 
        and maintained in a manner that permits it to be used as a 
        resource for litigants, public health groups, and persons with 
        an interest in tobacco industry records and research concerning 
        smoking and health, addiction or nicotine dependency, safer or 
        less hazardous cigarettes, and underage tobacco use and 
        marketing.
            (4) Resolution of disputed privilege and trade secret 
        claims.--
                    (A) In general.--The Board, upon a petition by any 
                individual to resolve a claim relating to the 
                disclosure of a document to the public, shall determine 
                whether to uphold or reject disputed claims of 
                attorney-client privilege, attorney work product, or 
                trade secret protection with respect to documents 
                submitted to the Depository under subsection (f).
                    (B) Determination.--A determination under 
                subparagraph (A) shall be made by a single member of 
                the Board, in writing, and shall be subject to judicial 
                review as specified in this section. All such 
                determinations shall be based solely on consideration 
                of the subject of the document involved and on written 
                submissions from the person claiming that the document 
                is privileged or protected by trade secrecy and from 
                any person seeking disclosure of the document.
                    (C) Privilege.--In making determination under 
                subparagraph (B), the Board shall apply the attorney-
                client privilege and the attorney work-product doctrine 
                in a manner consistent with Federal law.
                    (D) Trade secret.--In making determinations under 
                subparagraph (B), the Board shall define ``trade 
                secret'' as `any commercially valuable plan, formula, 
                process or device that is used for making or preparing 
                trade commodities and that can be said to be the end 
                product of either innovation or substantial effort. 
                There must be a direct relationship between the trade 
                secret and the productive process.
                    (E) Final determination.--The Board may uphold a 
                claim of privilege or trade protection with respect to 
                a claim under this section in its entirety or, in its 
                sole discretion, it may redact that portion of a 
                document that it determines is protected from public 
                disclosure under this paragraph. Any decision of the 
                Board shall be final unless judicial review is sought 
                as provided for in subparagraph (F). In the event that 
                judicial review is sought, the Board's decision shall 
                be stayed pending a final judicial decision.
                    (F) Petition; right of appeal.--
                            (i) In general.--Any person may obtain 
                        judicial review of a final determination of the 
                        Board under subparagraph (E) by filing a 
                        petition for review with the United States 
                        Court of Appeals for the Federal Circuit within 
                        30 days after the entry of such determination. 
                        A copy of the petition shall be transmitted by 
                        the Clerk of the Court to the Board. The Board 
                        shall file in the court the record of the 
                        proceedings on which the Board based its 
                        decision (including any documents reviewed by 
                        the Board in camera) as provided for in section 
                        2112 of title 28, United States Code. Upon the 
                        filing of such a petition, the court shall have 
                        exclusive jurisdiction to affirm or set aside 
                        the Board's decision, except that until the 
                        filing of the record the Board may modify or 
                        set aside its decision.
                            (ii) Additional evidence and arguments.--If 
                        a petitioner under clause (i) applies to the 
                        court for leave to adduce additional evidence 
                        or arguments with respect to the determination 
                        being reviewed and demonstrated to the 
                        satisfaction of the court that such additional 
                        evidence or arguments are material and that 
                        there were reasonable grounds for the failure 
                        to adduce such evidence or arguments in the 
                        proceedings before the Board, the court may 
                        order the Board to provide additional 
                        opportunity for the presentation of evidence or 
                        arguments in such manner and upon such terms as 
                        the court determines to be proper. The Board 
                        may modify its findings or make new findings by 
                        reason of the additional evidence or arguments 
                        and shall file with the court such modified or 
                        new findings, and its recommendation, if any, 
                        for the modification or setting aside of the 
                        decision being reviewed.
                            (iii) Standard of review; finality of 
                        judgments.--With respect to a review by the 
                        court under this subparagraph, the Board's 
                        findings of fact, if supported by substantial 
                        evidence on the record taken as a whole, shall 
                        be conclusive. The court shall review the 
                        Board's legal conclusions on a de novo basis. 
                        The judgment of the court affirming or setting 
                        aside the Board's decision shall be final, 
                        subject to review by the Supreme Court of the 
                        United States upon certiorari or certification, 
                        as provided in section 1254 of title 28, United 
                        States Code.
            (5) Public disclosure after final decision.--Not later than 
        30 days after the date of a final determination by the Board 
        that a document, as redacted by the Board or in its entirely, 
        is not protected from disclosure by a claim of attorney-client 
        privilege, attorney work product, or trade secret protection, 
        the Board shall direct the Depository to make the document 
        available to the public. No Federal or State court shall have 
        jurisdiction to review a claim of attorney-client privilege, 
        attorney work product, or trade secret protection for a 
        document that has lawfully been made available to the public 
        pursuant to this paragraph.
            (6) Effect of nondisclosure decision on judicial 
        proceedings.--The Board's decision that a document is protected 
        by attorney-client privilege, attorney work product, or trade 
        secret protection is binding only for the purpose of protecting 
        the document from disclosure by the Depository. The decision by 
        the Board shall not be construed to resolve a claim that a 
        document should not be disclosed in a judicial proceeding.
    (i) Sanctions.--
            (1) Requirement of good faith.--
                    (A) In general.--Each tobacco manufacturer shall 
                act in good faith and have a readily understood claim 
                of privilege or trade secret protection based on fact 
                and law as described in subsection (h)(4). If the Board 
                determines that a tobacco manufacturer has not acted in 
                good faith with full knowledge of the truth of the 
                facts asserted and with a reasonable basis under 
                existing law, the manufacturer shall be assessed costs, 
                which shall include the full administrative costs of 
                handling the claim of privilege, and all attorneys' 
                fees incurred by the Board and any party contesting the 
                privilege.
                    (B) Civil penalties.--With respect to a 
                manufacturer that has failed to act in good faith as 
                required under subparagraph (A), the Board may impose 
                civil penalties of not to exceed $50,000 per violation 
                if it determines that the manufacturer knowingly acted 
                with the intent to delay, frustrate, defraud, or 
                obstruct the Board's determination of privilege, 
                attorney work product, or trade secret protection 
                claims.
            (2) Failure to produce.--The Board may impose a civil 
        penalty upon the failure of a tobacco manufacturer to produce 
        indexes and documents in compliance with this section, of not 
        to exceed $50,000 per violation.
            (3) Separate violations.--For purposes of this subsection, 
        a separate violation shall be deemed to have occurred for each 
        document the manufacturer has failed to produce in a timely 
        manner.
            (4) Limitation.--The maximum penalty that may be imposed on 
        a manufacturer under this subsection for a related series of 
        violations is $5,000,000.
            (5) Amount of penalty.--In determining the amount of any 
        civil penalty under this subsection, the Board shall consider 
        the number of documents, length of delay, any history of prior 
        violations, the ability to pay, and such other matters as 
        justice requires.
            (6) Rule of construction.--Nothing in this subsection shall 
        be construed to replace or supersede any criminal sanctions 
        that may apply under title 18, United States Code, or under any 
        other title of the United States Code.
    (j) Rule of Construction.--The disclosure process in this section 
shall not be construed to affect the Federal Rules of Civil or Criminal 
Procedure or any Federal law which requires the disclosure of documents 
or which deals with attorney-client privilege, attorney work product, 
or trade secret protection.
    (k) Definitions.--In this section:
            (1) Document.--The term ``document'' shall include 
        originals and drafts of any kind of written or graphic matter, 
        regardless of the manner of production or reproduction, of any 
        kind of description, whether sent or received or neither, and 
        all copies thereof that are different in any way from the 
        original (whether by interlineation, receipt stamp, notation, 
        indication of copies sent or received or otherwise) regardless 
        of whether confidential, privileged, or otherwise, including 
        any paper, book, account, photograph, blueprint, drawing, 
        agreement, contract, memorandum, advertising material, letter, 
        telegram, object, report, record, transcript, study, note, 
        notation, working paper, intra-office communication, intra-
        department communication, chart, minute, index sheet, routing 
        sheet, computer software, computer data, delivery ticket, flow 
        sheet, price list, quotation, bulletin, circular, manual, 
        summary, recording of telephone or other conversation or of 
        interviews, or of conferences, or any other written, recorded, 
        transcribed, punched, taped, filmed, or graphic matter, 
        regardless of the manner produced or reproduced. Such term 
        shall also include any tape, recording, videotape, 
        computerization, or other electronic recording, whether digital 
        or analog or a combination of the two.
            (2) Manufacturer.--The term ``manufacturer'' includes 
        subsidiaries, assigns, agents, and related or affiliated 
        entities that are primarily funded by persons who manufacture a 
        tobacco product;
            (3) Proceeding.--The term ``proceeding'' includes any 
        action undertaken pursuant to this section including the 
        search, indexing, and production of documents.

                      Subtitle B--Consent Decrees

SEC. 411. CONSENT DECREES.

    (a) Requirement.--
            (1) In general.--Except as provided in paragraph (2), to be 
        eligible to receive payments under section 111, a State, and to 
        be eligible to receive the damages protections under section 
        401, a tobacco manufacturer, shall enter into consent decrees 
        under this section to be effective on the date of enactment of 
        this Act.
            (2) Good faith efforts.--The limitation described in 
        paragraph (1) with respect to payments under section 111 shall 
not apply to a State if the attorney general of the State certifies to 
the Secretary that--
                    (A) the State has made good faith efforts to enter 
                into a consent decree in accordance with this subtitle; 
                and
                    (B) such State is willing to be bound by such 
                decree but such decree does not exist because--
                            (i) of the refusal on the part of a tobacco 
                        manufacturer to enter into such decree; or
                            (ii) the appropriate court has not entered 
                        the decree even though the parties have lodged 
                        such a decree with the court.
    (b) Terms and Conditions.--
            (1) In general.--The terms and conditions contained in the 
        consent decrees described in subsection (a) shall contain 
        provisions relating to--
                    (A) an agreement not to directly or indirectly 
                pursue or support legal challenges to the 
                implementation of any aspect of this Act (or an 
                amendment made by this Act), including any existing or 
                future regulatory authority under the Federal Food, 
                Drug and Cosmetic Act, any document disclosure 
                requirements, any survey methodology used or penalties 
                applied under title III, and any advertising and 
                marketing restrictions aimed at reducing youth tobacco 
                use;
                    (B) an agreement to pass-through the costs of the 
                assessments made under section 102 to consumers through 
                increases in the price of tobacco products;
                    (C) restrictions on tobacco product advertising and 
                marketing aimed at preventing youth tobacco use and 
                youth access to such products;
                    (D) in order to reduce youth tobacco use, 
                restrictions on tobacco industry trade associations;
                    (E) the disclosure of tobacco smoke constituents;
                    (F) the disclosure of nontobacco constituents and 
                ingredients found in tobacco products;
                    (G) the disclosure of existing and future documents 
                relating to health, toxicity, and addiction related to 
                tobacco product usage;
                    (H) the obligation of manufacturers to make 
                payments for the benefit of States, private litigants 
                and the general public;
                    (I) the obligation of manufacturers to interact 
                only with exporters, importers, wholesalers, 
                distributors and retailers that operate in compliance 
                with the applicable provisions of Federal, State, or 
                local law regarding the marketing and sale of tobacco 
                products;
                    (J) requirements for warnings, labeling, and 
                packaging of tobacco products; and
                    (K) any other matter determined appropriate by the 
                Secretary or the parties involved.
            (2) Limitations.--The terms and conditions contained in the 
        consent decrees described in subsection (a) shall not contain 
        provisions relating to--
                    (A) tobacco product design, performance, or 
                modification;
                    (B) manufacturing standards and good manufacturing 
                practices; and
                    (C) testing and regulation with respect to toxicity 
                and ingredients approval.
            (3) Enforceability.--The terms and conditions contained in 
        the consent decrees described in subsection (a) shall be 
        enforceable by the signatories, as well as the Attorney 
        General, and shall include a provision that prohibits 
        signatories from challenging the enforceability of the consent 
        decrees.
            (4) Construction.--The terms and conditions contained in 
        the consent decrees described in subsection (a) shall provide 
        that the terms of the decree will be construed in a manner that 
        is consistent with the provision of this Act.
    (c) Approval.--
            (1) In general.--Prior to the entry of a consent decree by 
        a court under this section the court must find that the 
        provisions of the consent decree--
                    (A) have been approved by the Secretary and the 
                Attorney General;
                    (B) are fair and reasonable; and
                    (C) are in the public interest.
            (2) Determination by secretary.--To approve a consent 
        decree under paragraph (1)(A), the Secretary and the Attorney 
        General shall have determined whether the provisions of the 
        decree are consistent with this Act and the Food, Drug and 
        Cosmetic Act or the rules and regulations promulgated under 
        such Acts.
            (3) Notice to public.--With respect to the approval of a 
        consent decree under this section, the court shall ensure that 
        the public has been given not less than 60 days notice of the 
        filing of the decree by the parties and any objections thereto 
must be addressed to the satisfaction of the court.
    (d) Enforcement.--The provisions of a consent decree entered under 
this section shall remain in effect and enforceable in the court in 
which the decree is entered.
    (e) Nonapplication of Provisions.--If any of the provisions of a 
consent decree entered into under this section by a tobacco 
manufacturer are held to be unconstitutional or otherwise held not to 
apply to such manufacturer, the liability protection contained in 
section 401 shall cease to apply to such manufacturer.

    TITLE V--TOBACCO FARM FAMILY AND COMMUNITY ASSISTANCE TRUST FUND

SEC. 501. TOBACCO FARM FAMILY AND COMMUNITY ASSISTANCE TRUST FUND.

    (a) Establishment.--There is established within the National 
Tobacco Trust Fund a fund to be known as the ``Trust Fund for Tobacco 
Farming Families and Communities'' (referred to in this section as the 
``Fund''), consisting of such amounts as may be appropriated or 
credited to the Trust Fund.
    (b) Transfers to Trust Fund.--There are authorized to be 
appropriated to the Fund for each fiscal year amounts made available to 
the Trust Fund as provided for in section 101(d)(2)(D) and any amounts 
provided under section 102(a)(1) that are not appropriated in fiscal 
year 1999.
    (c) Repayable Advances.--
            (1) Authorization.--There are authorized to be appropriated 
        to the Fund, as repayable advances, such sums as may from time 
        to time be necessary to make expenditures under subsection (d).
            (2) Repayment with interest.--Repayable advances made to 
        the Fund shall be repaid, and interest on the advances shall be 
        paid, to the general fund of the Treasury when the Secretary of 
        the Treasury determines that moneys are available in the Fund 
        to make the payments.
            (3) Rate of interest.--Interest on an advance made under 
        this subsection shall be at a rate determined by the Secretary 
        of Treasury (as of the close of the calendar month preceding 
        the month in which the advance is made) that is equal to the 
        current average market yield on outstanding marketable 
        obligations of the United States with remaining period to 
        maturity comparable to the anticipated period during which the 
        advance will be outstanding.
    (d) Expenditures From Fund.--
            (1) In general.--Subject to paragraph (2), amounts in the 
        Fund shall be available for making expenditures to assist 
        tobacco-dependent farm families, workers and communities, 
        including--
                    (A) compensation and economic and transitional 
                assistance to tobacco farming families;
                    (B) economic and transitional assistance, including 
                employment-related compensation and services, to 
                workers and businesses (not including manufacturers of 
                tobacco products) in tobacco-related industries; and
                    (C) economic development and related transitional 
                assistance for communities whose economies depend 
                significantly upon the production, handling, marketing 
                and processing of tobacco.
            (2) Implementation.--Amounts in the Fund shall be available 
        for making expenditures described in paragraph (1) only if a 
        law is enacted not later than January 1, 2000, that 
        specifically prescribes authorized uses of the Fund.
    (e) Budgetary Treatment.--This section constitutes budget authority 
in advance of appropriations Acts.
    (f) Termination of Effectiveness.--The authority provided by this 
section terminates effective January 1, 2000, unless a law is enacted 
not later than January 1, 2000, that specifically prescribes authorized 
uses of the Fund.

       TITLE VI--REDUCING EXPOSURE TO ENVIRONMENTAL TOBACCO SMOKE

SEC. 601. EDUCATION AND OUTREACH.

    From amounts made available for each fiscal year under section 
101(d)(2)(D), $100,000,000 shall be provided to enable States to 
conduct education and outreach activities relating to the health-
related effects of environmental tobacco smoke.

SEC. 602. INVOLUNTARY EXPOSURE TO ENVIRONMENTAL TOBACCO SMOKE.

    From amounts made available for each fiscal year under section 
101(d)(2)(D), $100,000,000 shall be provided to enable States to 
establish programs to reduce involuntary exposure to environmental 
tobacco smoke.

SEC. 603. COVERAGE OF CONGRESSIONAL BUILDINGS.

    The provisions of Executive Order 13058 (62 FR 43451; August 13, 
1997) shall apply to any public facility at which a covered employee 
(as such term is defined in section 101(3) of the Congressional 
Accountability Act of 1995 (2 U.S.C. 1301(3)) performs work. With 
respect to such facilities, the enforcement provisions of such 
Executive Order shall be carried out by the Office of Compliance.

                  TITLE VII--MISCELLANEOUS PROVISIONS

SEC. 701. WHISTLEBLOWER PROTECTIONS.

    (a) Prohibition of Reprisals.--An employee of any manufacturer, 
distributor, or retailer of a tobacco product may not be discharged, 
demoted, or otherwise discriminated against (with respect to 
compensation, terms, conditions, or privileges of employment) as a 
reprisal for disclosing to an employee of the Food and Drug 
Administration, the Department of Health and Human Services, the 
Department of Justice, or any State or local regulatory or enforcement 
authority, information relating to a substantial violation of law 
related to this Act or a State or local law enacted to further the 
purposes of this Act.
    (b) Enforcement.--Any employee or former employee who believes that 
such employee has been discharged, demoted, or otherwise discriminated 
against in violation of subsection (a) may file a civil action in the 
appropriate United States district court before the end of the 2-year 
period beginning on the date of such discharge, demotion, or 
discrimination.
    (c) Remedies.--If the district court determines that a violation 
has occurred, the court may order the manufacturer, distributor, or 
retailer involved to--
            (1) reinstate the employee to the employee's former 
        position;
            (2) pay compensatory damages; or
            (3) take other appropriate actions to remedy any past 
        discrimination.
    (d) Limitation.--The protections of this section shall not apply to 
any employee who--
            (1) deliberately causes or participates in the alleged 
        violation of law or regulation; or
            (2) knowingly or recklessly provides substantially false 
        information to the Food and Drug Administration, the Department 
        of Health and Human Services, the Department of Justice, or any 
        State or local regulatory or enforcement authority.

SEC. 702. PROHIBITION ON USE OF FUNDS TO FACILITATE THE EXPORTATION OR 
              PROMOTION OF TOBACCO.

    (a) Limitations.--
            (1) In general.--Notwithstanding any other provision of 
        law, no funds made available by appropriations or otherwise 
        made available may be used by any officer, employee, 
        department, or agency of the United States--
                    (A) to challenge tobacco-related laws or 
                regulations in any country if such laws or 
                regulations--
                            (i) are based on sound public health 
                        principles;
                            (ii) are applied in a nondiscriminatory 
                        manner to both imported and domestic tobacco 
                        and tobacco products; and
                            (iii) if sufficient notice (not to exceed 6 
                        months) of the application of such laws or 
                        regulations has been made public;
                    (B) promote the sale or exportation of tobacco or 
                tobacco products or to assist the efforts of a domestic 
                individual or entity in any such promotion; or
                    (C) to attend or otherwise support receptions that 
                feature tobacco products brand names, trade promotions, 
                or any events that are sponsored by individuals or 
                entities involved in the export, manufacture, 
                promotion, distribution or sale of tobacco or tobacco 
                products.
            (2) Requirements.--With respect to tobacco or tobacco 
        products, United States Diplomatic Posts shall--
                    (A) assist and promote tobacco-control efforts in 
                foreign countries; and
                    (B) with respect to laws or regulations described 
                in paragraph (1)(A), refer such laws or regulations to 
                the appropriate trade agencies of the United States if 
                it is suspected that such laws or regulations do not 
                comply with any of the requirements of such paragraph.
    (b) Exception.--Subsection (a)(1) shall not apply to any 
restriction or proposed restriction by a foreign country if--
            (1) the restriction is applied in a manner which 
        constitutes a means of arbitrary or unjustifiable 
        discrimination between countries; and
            (2) the United States Trade Representative, in conjunction 
        with the Secretary of Health and Human Services, determines 
        that--
                    (A) the restriction is being applied in a manner 
                that constitutes a means of arbitrary or unjustifiable 
                discrimination between countries; and
                    (B) that the restriction is not a reasonable means 
                of protecting the public health.
    (c) Reports.--The United States Trade Representative shall include 
a description of all exceptions made pursuant to subsection (b) in 
reports submitted to Congress as required under Federal law prior to 
the date of enactment of this Act.
    (d) Definition.--In this section, the term ``arbitrary or 
unjustifiable discrimination'' means a restriction or proposed 
restriction by a foreign country that--
            (1) is arbitrary or unjustifiable; and
            (2) does not adhere to the principle of national treatment 
        and applies less favorable treatment to goods that are imported 
        into that country than the country applies to like goods that 
        are the product, growth, or manufacture of that country.

SEC. 703. PROVISIONS RELATING TO NATIVE AMERICANS.

    (a) In General.--The provisions of this Act (or an amendment made 
by this Act) shall apply to the manufacture, distribution, and sale of 
tobacco products in any area within the jurisdiction of an Indian tribe 
or tribal organization.
    (b) Religious Practice Exception.--In recognition of the religious, 
traditional and ceremonial uses of tobacco and tobacco products by many 
Indian tribes and the members of such tribes, nothing in this Act (or 
an amendment made by this Act) shall be construed to infringe upon the 
rights of such tribes or members to transfer, acquire, possess, or use 
any tobacco or tobacco products for such purposes. The preceding 
sentence shall only be construed to apply to those quantities of 
tobacco products necessary to fulfill recognized religious, traditional 
or ceremonial purposes and not to permit the general marketing of 
tobacco products not in compliance with subchapter F of chapter V of 
the Federal Food, Drug and Cosmetic Act.
    (c) Payments to Trust Fund.--Any Indian tribe or tribal 
organization that engages in the manufacture of tobacco products shall 
be subject to liability for an assessment under section 102.
    (d) Application of Federal Food, Drug and Cosmetic Act 
Requirements.--
            (1) In general.--The Secretary, in consultation with the 
        Secretary of the Interior, shall promulgate regulations to 
        provide for the application of any requirements of the Food, 
        Drug and Cosmetic Act with respect to tobacco products 
        manufactured, distributed, or sold in any area within the 
        jurisdiction of an Indian tribe or tribal organization as 
        appropriate to comply with subsections (a) and (b).
            (2) Eligibility for assistance.--Under the regulations 
        promulgated under paragraph (1), the Secretary, after 
        consultation with the Secretary of the Interior, may provide 
        assistance to an Indian tribe or tribal organization in meeting 
        and enforcing the requirements under such regulations if--
                    (A) the tribe or organization has a governing body 
                that has powers and carries out duties that are similar 
                to the powers and duties of State or local governments 
                and requests such assistance by application to the 
                Secretary;
                    (B) the functions to be exercised through the use 
                of such assistance relate to activities within the 
                exterior boundaries of the reservation or other areas 
                within the jurisdiction of the tribe involved; and
                    (C) the tribe or organization is reasonably 
                expected to be capable of carrying out the functions 
                required by the Secretary.
            (3) Determinations.--The Secretary, in consultation with 
        the Secretary of the Interior, shall make determinations 
        concerning the eligibility of an Indian tribe or tribal 
        organization for assistance under regulations under paragraph 
        (1) not later than 90 days after the date on which such tribe 
        or organization submits an application for such assistance.
            (4) Implementation by secretary.--If the Secretary 
        determines that the Indian tribe or tribal organization is not 
        willing or qualified to administer the requirements of the 
        regulations promulgated under this subsection, the Secretary, 
        in consultation with the Secretary of the Interior, shall 
        implement and enforce such regulations on behalf of the tribe 
        or organization.
    (e) Retail Licensing Requirements.--
            (1) In general.--The requirements of subchapter F of 
        chapter V of the Federal Food, Drug and Cosmetic Act (as added 
        by section 221 of this Act) relating to minors' access to 
        tobacco products shall apply to retailers that sell tobacco 
        products in any area within the jurisdiction of an Indian tribe 
        or tribal organization.
            (2) Self-regulation.--In order to be eligible for funds 
        under subsection (f), an Indian tribe or tribal organization 
        shall implement a tribal licensing program within the exterior 
        boundaries of the reservation and other areas within the 
        jurisdiction of the tribe consistent with the regulations 
        promulgated under such subchapter F of chapter V of the Federal 
        Food, Drug and Cosmetic Act relating to minors' access to 
        tobacco products.
            (3) Implementation by secretary.--If the Secretary, in 
        consultation with the Secretary of the Interior, determines 
        that the Indian tribe or tribal organization is not qualified 
        to administer the requirements of subchapter F of chapter V of 
        the Federal Food, Drug and Cosmetic Act relating to minors' 
        access to tobacco products, the Secretary, in consultation with 
        the Secretary of the Interior, shall implement such 
        requirements on behalf of the tribe or organization.
    (f) Eligibility for Public Health Payments.--
            (1) In general.--For each fiscal year the Secretary shall 
        pay to each Indian tribe that has an approved tribal anti-
        smoking plan a tribal grant for the fiscal year in an amount 
        equal to the amount determined under paragraph (3), and shall 
        reduce the amounts payable under section 111 to any State in 
        which the service area or areas of the Indian tribe are located 
        by the amount so determined.
            (2) Plan.--To be eligible to receive a payment under 
        paragraph (1), an Indian tribe shall prepare and submit to the 
        Secretary for approval an anti-smoking plan and shall otherwise 
        meet the requirements of subsection (e).
            (3) Amount determined.--The amount of any funds for which 
        an Indian tribe is eligible under paragraph (1) shall be 
        determined by the Secretary based on the ratio of the total 
        number of Indians residing on such tribe's reservation or in 
        areas within the jurisdiction of the tribe in the State to the 
        total population of the State multiplied by the amount 
        allocated to State under section 111.
            (4) Use.--Amounts provided to a tribe or organization under 
        this paragraph shall be used to reimburse the tribe for 
        smoking-related health expenditures, to further the purposes of 
        this Act, and in accordance with a plan submitted by the tribe 
        or organization and approved by the Secretary as being in 
        compliance with this Act. Tribes and tribal organizations shall 
        have the flexibility to utilize such amounts to meet the unique 
        health needs of such tribes within the context of tribal health 
        programs if such programs meet the fundamental Federal 
        requirements under this Act as determined by the Secretary.
            (5) Reallotment.--Any amounts set-aside and not expended 
        under this paragraph shall be reallotted among other eligible 
        tribes and organizations.
    (g) Obligation of Manufacturers.--A participating manufacturer 
shall not engage in any activity in an area within the jurisdiction of 
an Indian tribe or tribal organization that is prohibited under this 
Act.
    (h) Indian Health Service.--Amounts made available under section 
101(d)(2)(D) shall be provided to the Indian Health Service to be used 
for anti-tobacco-related consumption and cessation activities 
including--
            (1) clinic and facility design, construction, repair, 
        renovation, maintenance and improvement;
            (2) provider services and equipment;
            (3) domestic and community sanitation associated with 
        clinic and facility construction and improvement;
            (4) inpatient and outpatient services; and
            (5) other programs and services provided through the Indian 
        Health Service or through tribal contracts, compacts, grants or 
        cooperative agreements with the Indian Health Service and which 
        are deemed appropriate to raising the health status of Indians.
    (i) Preemption.--
            (1) General preemption.--Except as otherwise provided for 
        in this section, nothing in this Act shall be construed as 
        prohibiting an Indian tribe or tribal organization from 
        imposing requirements, prohibitions, penalties or other 
        measures to further the purposes of this Act that are in 
        addition to the requirements, prohibitions, or penalties 
        required under this Act.
            (2) Public exposure to smoke.--Nothing in the amendment 
        made by title V shall be construed to preempt or otherwise 
        affect any Indian tribe or tribal organization rule or practice 
        that provides greater protection from the health hazards of 
        environmental tobacco smoke.
            (3) Native americans.--A State may not impose obligations 
        or requirements relating to the application of this Act to 
        Indian tribes and tribal organizations.

SEC. 704. PRESERVATION OF STATE AND LOCAL AUTHORITY.

    Except as otherwise provided for in this Act (or an amendment made 
by this Act), nothing in this Act shall be construed as prohibiting a 
State from imposing requirements, prohibitions, penalties or other 
measures to further the purposes of this Act that are in addition to 
the requirements, prohibitions, or penalties required under this Act. 
To the extent not inconsistent with the purposes of this Act, State and 
local governments may impose additional tobacco product control 
measures to further restrict or limit the use of such products by 
minors, except that such State and local governments may not impose any 
labeling requirements in addition to those required under Federal law.
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