II

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105TH CONGRESS

2D SESSION S. 1638

To help parents keep their children from starting to use tobacco products,

to expose the tobacco industry’s past misconduct and to stop the tobacco

industry from targeting children, to eliminate or greatly reduce the

illegal use of tobacco products by children, to improve the public health

by reducing the overall use of tobacco products, and for other purposes.

IN THE SENATE OF THE UNITED STATES

FEBRUARY 12, 1998

Mr. CONRAD (for himself, Mr. DASCHLE, Mr. KENNEDY, Mr. LAUTENBERG,

Mr. REED, Mr. LEAHY, Mr. DODD, Mr. BINGAMAN, Mr. DURBIN, Mr.

BAUCUS, Mr. DORGAN, Mr. ROCKEFELLER, Mr. KERREY, Mr. WYDEN,

Mr. WELLSTONE, Mr. TORRICELLI, Mrs. BOXER, Mr. KERRY, Mr. BUMPERS, Mr. MOYNIHAN, Mr. JOHNSON, Mr. BREAUX, Mr. KOHL, Ms.

LANDRIEU, Ms. MOSELEY-BRAUN, Mr. BRYAN, Mr. AKAKA, and Mr.

LIEBERMAN) introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL

To help parents keep their children from starting to use

tobacco products, to expose the tobacco industry’s past

misconduct and to stop the tobacco industry from targeting children, to eliminate or greatly reduce the illegal

use of tobacco products by children, to improve the public

health by reducing the overall use of tobacco products,

and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

2 (a) SHORT TITLE.—This Act may be cited as the

3 ‘‘Healthy Kids Act’’.

4 (b) TABLE OF CONTENTS.—The table of contents of

5 this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Findings.

Sec. 3. Purposes.

Sec. 4. Definitions.

TITLE I—HEALTHY KIDS TRUST FUND

Subtitle A—General Provisions

Sec. 101. Establishment of Trust Fund.

Sec. 102. Liability of tobacco product manufacturers.

Sec. 103. Licensing of manufacturers.

Sec. 104. Enforcement.

Subtitle B—Payments

CHAPTER 1—TO STATES

Sec. 111. Payments to States.

CHAPTER 2—FEDERAL HEALTH PROGRAMS

Sec. 121. National Institutes of Health Trust Fund for Health Research.

CHAPTER 3—INVESTMENTS FOR CHILDREN

Sec. 131. Improving child care and early childhood development.

Sec. 132. Improving elementary education.

Sec. 133. Increased enrollment of children with the medicaid and State children’s health insurance programs.

Sec. 134. Medicare cancer patient demonstration project; evaluation and report

to Congress.

TITLE II—FDA JURISDICTION OVER TOBACCO PRODUCTS

Sec. 201. Reference.

Sec. 202. Statement of general authority.

Sec. 203. Treatment of tobacco products as drugs and devices.

Sec. 204. Safety and efficacy standard and recall authority.

Sec. 205. General health and safety regulation of tobacco products.

‘‘SUBCHAPTER F—TOBACCO PRODUCTS

‘‘Sec. 571. Promulgation of regulations.

‘‘Sec. 572. Scientific Advisory Committee.

‘‘Sec. 573. Performance standards.

‘‘Sec. 574. Disclosure and reporting of tobacco and nontobacco ingredients

and constituents.
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‘‘Sec. 575. Tobacco product warnings, labeling and packaging.

‘‘Sec. 576. Preservation of State and local authority.

‘‘Sec. 577. Restrictions on youth access to tobacco products.

‘‘Sec. 578. Public disclosure of health research.

‘‘Sec. 579. Citizen suits.

‘‘Sec. 580. Agricultural producers.

‘‘Sec. 581. Authority of Secretary.

Sec. 206. Repeals.

Sec. 207. Authority of Federal Trade Commission.

TITLE III—YOUTH SMOKING REDUCTION TARGETS AND

INCENTIVES TO REDUCE YOUTH SMOKING RATES

Sec. 301. Purpose.

Sec. 302. Child tobacco use surveys.

Sec. 303. Reduction in underage tobacco product usage.

Sec. 304. Noncompliance.

Sec. 305. Rulemaking procedures.

Sec. 306. Miscellaneous provisions.

TITLE IV—TOBACCO TRANSITION ASSISTANCE FUND

Sec. 401. Tobacco transition assistance fund.

TITLE V—STANDARDS TO REDUCE INVOLUNTARY EXPOSURE TO

TOBACCO SMOKE

Sec. 501. Standards to reduce involuntary exposure to tobacco smoke.

TITLE VI—PUBLIC HEALTH AND OTHER PROGRAMS

Subtitle A—Research Programs

Sec. 601. Tobacco-related research.

Sec. 602. Research relating to patterns of smoking.

Sec. 603. Surveillance and evaluation.

Subtitle B—Education and Prevention Programs

Sec. 611. Grants for school- and community-based tobacco danger education

programs.

Subtitle C—Miscellaneous Programs

Sec. 621. Counter-advertising programs.

Sec. 622. National Tobacco Cessation Program.

Sec. 623. Assistance for those suffering from tobacco-related illnesses.

Sec. 624. International tobacco control.

Sec. 625. National Event Sponsorship Program.

Sec. 626. Programs to reduce alcohol and illicit drug use by minors.

TITLE VII—LIABILITY PROTECTION; CONSENT DECREES;

NATIONAL PROTOCOL

Subtitle A—Liability Protection and Attorney Fees

Sec. 701. Dismissal of and limitations on civil actions.

Sec. 702. Attorney’s fees and expenses.
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Subtitle B—Consent Decrees

Sec. 711. Consent decrees.

Sec. 712. Non-participating manufacturers.

Subtitle C—National Tobacco Control Protocol

CHAPTER 1—ESTABLISHMENT

Sec. 721. National Tobacco Control Protocol.

CHAPTER 2—TERMS AND CONDITIONS

Sec. 725. Application of chapter.

Sec. 726. Agreement to prohibit certain advertising.

Sec. 727. Consensual restrictions.

Sec. 728. Agreement on format and content requirements for labeling and advertising.

Sec. 729. Agreement to ban on nontobacco items and services, contests and

games of chance, and sponsorship of events.

CHAPTER 3—ENFORCEMENT

Sec. 731. Federal enforcement of the protocol.

Sec. 732. State enforcement of the protocol.

Sec. 733. Private enforcement of protocol.

TITLE VIII—MISCELLANEOUS PROVISIONS

Sec. 801. Prohibition on use of funds to facilitate the exportation or promotion

of tobacco.

Sec. 802. Whistleblower protections.

Sec. 803. Prohibitions relating to tobacco products and children.

Sec. 804. Preservation of State and local authority.

Sec. 805. Severability.

TITLE IX—PROVISIONS RELATING TO NATIVE AMERICANS

Sec. 901. Provisions relating to Native Americans.

1 SEC. 2. FINDINGS.

2 Congress makes the following findings:

3 (1) Approximately 3,000 children begin smok4 ing each day. 1,000 of these children will die pre5 maturely from a tobacco-related illness or condition.

6 (2) The tobacco industry has targeted tobacco

7 product marketing and promotional efforts toward
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1 children as a source of replacement smokers. The

2 industry has also targeted minorities.

3 (3) Approximately 90 percent of smokers start

4 by the time they are 18 years old. Half of all smok5 ers start by age 14.

6 (4) Although most children plan to quit smok7 ing after experimenting, the vast majority find that

8 they have become addicted and cannot quit.

9 (5) Seventy percent of adult smokers would like

10 to quit smoking, but the tobacco industry has ma11 nipulated the level of nicotine in tobacco products

12 and added ingredients to enhance the addictive ef13 fects of nicotine to ensure that users of these prod14 ucts remain addicted.

15 (6) Tobacco products cause cancer, heart dis16 ease, lung disease, and other fatal illnesses. More

17 than 400,000 Americans die each year of these to18 bacco-related illnesses and conditions.

19 (7) Tobacco-related illnesses, medical conditions

20 resulting from tobacco use, and lost wages and pro21 ductivity cost the United States in excess of

22 $100,000,000,000 annually.

23 (8) Federal and State taxpayers have spent and

24 will continue to spend tens of billions of dollars an25 nually paying for the medicare, medicaid, and other
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1 Federal and State health program costs arising from

2 tobacco-related illnesses and conditions.

3 (9) The tobacco industry has systematically in4 voked and abused the attorney-client privilege to

5 hide its attempts to mislead the American public

6 about the health risks associated with tobacco use,

7 its manipulation of nicotine levels, and its efforts to

8 lure underage users and minorities to its products.

9 (10) Nicotine is an addictive drug. The market10 place for tobacco products is largely based on addic11 tion.

12 (11) Worldwide, smoking kills 3,000,000 people

13 each year. If current smoking patterns continue, to14 bacco use will kill 10,000,000 people a year by 2025.

15 (12) Environmental tobacco smoke is respon16 sible for 3,000 lung cancer deaths annually in Amer17 ican nonsmokers. Environmental tobacco smoke also

18 harms children’s health.

19 (13) In 1995, the tobacco industry spent close

20 to $4,900,000,000 to attract new users, retain cur21 rent users, increase current consumption, and gen22 erate favorable long-term attitudes toward smoking

23 and tobacco use.
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1 (14) Tobacco product advertising misleadingly

2 portrays the use of tobacco as socially acceptable

3 and healthful.

4 (15) Tobacco product advertising is regularly

5 seen by persons under the age of 18, and persons

6 under the age of 18 are regularly exposed to tobacco

7 product promotional efforts.

8 (16) Through advertisements during and spon9 sorship of sporting events, tobacco has become

10 strongly associated with sports and has become por11 trayed as an integral part of sports and the healthy

12 lifestyle associated with rigorous sporting activity.

13 (17) Children are exposed to substantial and

14 unavoidable tobacco advertising, that leads to favor15 able beliefs about tobacco use, plays a role in leading

16 young people to overestimate the prevalence of to17 bacco use, and increases the number of young people

18 who begin to use tobacco.

19 (18) Tobacco advertising increases the size of

20 the tobacco market by increasing consumption of to21 bacco products including increasing tobacco sales to

22 young people.

23 (19) Children are more influenced by tobacco

24 advertising than adults. They smoke the most adver25 tised brands, and children as young as 3 to 6 can
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1 recognize a character associated with smoking at the

2 same rate that they recognize cartoons and fast food

3 characters.

4 (20) Tobacco company documents indicate that

5 young people are an important and often crucial seg6 ment of the tobacco market.

7 (21) Comprehensive advertising restrictions will

8 have a positive effect on the smoking rates of young

9 people, as evidenced by the experience in Norway,

10 Finland, and other countries.

11 (22) Restrictions on advertising are necessary

12 to prevent unrestricted tobacco advertising from un13 dermining the ability of the Congress and the States

14 to prohibit access to young people and to provide for

15 education about tobacco use.

16 (23) International experience shows that adver17 tising regulations that are stringent and comprehen18 sive have a greater impact on overall tobacco use

19 and young people’s use than weaker or less com20 prehensive ones. Text only requirements, while not

21 as stringent as a ban, will accomplish this purpose

22 while preserving the informational function of adver23 tising.

24 SEC. 3. PURPOSES.

25 The purposes of this Act are—
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1 (1) to help American families dramatically re2 duce the number of children illegally using tobacco

3 products by—

4 (A) increasing the price of cigarettes by at

5 least $1.50 per pack in order to discourage

6 youth purchases;

7 (B) implementing prevention, education,

8 cessation, and counter-advertising programs;

9 (C) restricting advertisements designed to

10 encourage kids to use tobacco products;

11 (D) imposing penalties on manufacturers

12 for failing to reach youth smoking rate reduc13 tion targets;

14 (E) requiring retailers to comply with laws

15 forbidding sales to minors; and

16 (F) giving the Food and Drug Administra17 tion and State and local governments the au18 thority and resources to keep tobacco products

19 out of the hands of minors;

20 (2) to compensate taxpayers for their costs at21 tributable to tobacco-related illnesses by reimbursing

22 the medicaid and medicare programs and resolving

23 the legal claims of Federal, State and local govern24 ments for those costs that resulted from past mis25 conduct by the tobacco industry;
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1 (3) to improve the public health by reducing the

2 number of adult users of tobacco products through

3 approved cessation programs and limiting public ex4 posure to environmental tobacco smoke;

5 (4) to provide assistance to tobacco farmers, to6 bacco factory workers, and rural communities;

7 (5) to affirm the full authority of the Food and

8 Drug Administration to regulate the manufacture,

9 labeling, sale, distribution, and advertising of to10 bacco products to the fullest extent authorized by

11 the commerce clause of the United States Constitu12 tion;

13 (6) to make available to the public tobacco in14 dustry documents regarding the health effects of to15 bacco products, addiction, the agricultural produc16 tion of tobacco, the manufacture of tobacco prod17 ucts, the distribution of tobacco products, and the

18 marketing of tobacco products to youths; and

19 (7) to enhance global anti-tobacco efforts to

20 minimize the adverse health effects of tobacco prod21 ucts.

22 SEC. 4. DEFINITIONS.

23 In this Act:

24 (1) BRAND.—The term ‘‘brand’’ means a vari25 ety of a tobacco product distinguished by the tobacco
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1 used, tar content, nicotine content, flavoring used,

2 size, filtration, or packaging.

3 (2) CIGAR.—The term ‘‘cigar’’ means any roll

4 of tobacco wrapped in leaf tobacco or in any sub5 stance containing tobacco (other than any roll of to6 bacco which is a cigarette or cigarillo within the

7 meaning of paragraph (3) or (4)).

8 (3) CIGARETTE.—The term ‘‘cigarette’’

9 means—

10 (A) any roll of tobacco wrapped in paper

11 or in any substance not containing tobacco; and

12 (B) any roll of tobacco wrapped in any

13 substance containing tobacco which, because of

14 its appearance, the type of tobacco used in the

15 filler, or its packaging and labeling, is likely to

16 be offered to, or purchased by, consumers as a

17 cigarette described in subparagraph (A).

18 (4) CIGARILLOS.—The term ‘‘cigarillos’’ means

19 any roll of tobacco wrapped in leaf tobacco or any

20 substance containing tobacco (other than any roll of

21 tobacco which is a cigarette within the meaning of

22 paragraph (3)) and as to which 1,000 units weigh

23 not more than 3 pounds.

24 (5) CIGARETTE TOBACCO.—The term ‘‘cigarette

25 tobacco’’ means any product that consists of loose
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1 tobacco and is intended for use by persons in a ciga2 rette. Unless otherwise stated, the requirements of

3 this Act pertaining to cigarettes shall also apply to

4 cigarette tobacco.

5 (6) DISTRIBUTOR.—The term ‘‘distributor’’

6 means any person who furthers the distribution of

7 tobacco products, whether domestic or imported, at

8 any point from the original place of manufacture to

9 the person who sells or distributes the product to in10 dividuals for personal consumption. Such term shall

11 not include common carriers.

12 (7) LITTLE CIGAR.—The term ‘‘little cigar’’

13 means any roll of tobacco wrapped in leaf tobacco or

14 any substance containing tobacco (other than any

15 roll of tobacco which is a cigarette within the mean16 ing of subsection (1)) and as to which 1,000 units

17 weigh not more than 3 pounds.

18 (8) MANUFACTURER.—The term ‘‘manufac19 turer’’ means any person, including any repacker or

20 relabeler, who manufactures, fabricates, assembles,

21 processes, or labels a tobacco product.

22 (9) PACKAGE.—The term ‘‘package’’ means a

23 pack, box, carton, or container of any kind in which

24 tobacco products are offered for sale, sold, or other25 wise distributed to consumers.
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1 (10) PERSON.—The term ‘‘person’’ means an

2 individual, partnership, corporation, parent corpora3 tion, or any other business or legal entity or succes4 sor in interest of any such person.

5 (11) PIPE TOBACCO.—The term ‘‘pipe tobacco’’

6 means any loose tobacco that, because of its appear7 ance, type, packaging, or labeling, is likely to be of8 fered to, or purchased by, consumers as a tobacco

9 product to be smoked in a pipe.

10 (12) POINT OF SALE.—The term ‘‘point of

11 sale’’ means any location at which an individual can

12 purchase or otherwise obtain tobacco products for

13 personal consumption.

14 (13) RETAILER.—The term ‘‘retailer’’ means

15 any person who sells tobacco products to individuals

16 for personal consumption, or who operates a facility

17 where vending machines or self-service displays are

18 permitted under this Act.

19 (14) ROLL-YOUR-OWN TOBACCO.—The term

20 ‘‘roll-your-own tobacco’’ means any tobacco which,

21 because of its appearance, type, packaging, or label22 ing, is suitable for use and likely to be offered to,

23 or purchased by, consumers as tobacco for making

24 cigarettes.
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1 (15) SALE.—The term ‘‘sale’’ includes the sell2 ing, providing samples of, or otherwise making to3 bacco products available for personal consumption in

4 any place within the scope of this Act.

5 (16) SECRETARY.—Except as provided in title

6 IV, the term ‘‘Secretary’’ means the Secretary of

7 Health and Human Services.

8 (17) SMOKELESS TOBACCO.—The term ‘‘smoke9 less tobacco’’ means any product that consists of

10 cut, ground, powdered, or leaf tobacco that is in11 tended to be placed in the oral or nasal cavity.

12 (18) STATE.—The term ‘‘State’’ includes the

13 several States, the District of Columbia, the Com14 monwealth of Puerto Rico, Guam, the Virgin Is15 lands, American Samoa, the Northern Mariana Is16 lands, and any other territory or possession of the

17 United States. Such term includes any political divi18 sion of any State.

19 (19) TOBACCO.—The term ‘‘tobacco’’ means to20 bacco in its unmanufactured form.

21 (20) TOBACCO PRODUCT.—The term ‘‘tobacco

22 product’’ means any product made of or derived

23 from tobacco leaf for human consumption, including,

24 but not limited to, cigarettes, cigarillos, cigarette to-
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1 bacco, cigars, little cigars, pipe tobacco, and smoke2 less tobacco, and roll-your-own tobacco.

3 (21) TRUST FUND.—Except as provided in sec4 tion 121 and title IV, the term ‘‘Trust Fund’’ means

5 the Health Enhancement and Lowered Tobacco

6 Hazards for Young Kids Trust Fund established

7 under section 101.

8 TITLE I—HEALTHY KIDS TRUST

9 FUND

10 Subtitle A—General Provisions

11 SEC. 101. ESTABLISHMENT OF TRUST FUND.

12 (a) CREATION.—

13 (1) IN GENERAL.—There is established in the

14 Treasury of the United States a trust fund to be

15 known as the ‘‘Health Enhancement and Lowered

16 Tobacco Hazards for Young Kids Trust Fund’’ (re17 ferred to as the ‘‘HEALTHY Kids Trust Fund’’),

18 consisting of such amounts as may be appropriated

19 or credited to the Trust Fund.

20 (2) TRUSTEES.—The trustees of the Trust

21 Fund shall be the Secretary of the Treasury and the

22 Secretary of Health and Human Services.

23 (b) TRANSFERS.—There are hereby appropriated and

24 transferred to the Trust Fund an amount equal to the

25 initial payment under section 102 and 75 percent of the—
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1 (1) amounts received under the annual assess2 ments made under section 102;

3 (2) amounts paid as fines or penalties, includ4 ing interest thereon, under section 103; and

5 (3) amounts repaid or recovered under title III,

6 including interest thereon.

7 (c) REPAYABLE ADVANCES.—

8 (1) AUTHORIZATION.—There are authorized to

9 be appropriated to the Trust Fund, as repayable ad10 vances, such sums as may from time to time be nec11 essary to make the expenditures described in sub12 section (d).

13 (2) REPAYMENT WITH INTEREST.—Repayable

14 advances made to the Trust Fund shall be repaid,

15 and interest on such advances shall be paid, to the

16 general fund of the Treasury when the Secretary of

17 the Treasury determines that moneys are available

18 in the Trust Fund for such purposes.

19 (3) RATE OF INTEREST.—Interest on advances

20 made pursuant to this subsection shall be at a rate

21 determined by the Secretary of the Treasury (as of

22 the close of the calendar month preceding the month

23 in which the advance is made) to be equal to the

24 current average market yield on outstanding market25 able obligations of the United States with remaining
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1 period to maturity comparable to the anticipated pe2 riod during which the advance will be outstanding.

3 (d) EXPENDITURES FROM TRUST FUND.—Amounts

4 in the Trust Fund shall be made available in each fiscal

5 year, without further appropriation as follows:

6 (1) 14.5 percent of such amounts shall be made

7 available for payments to States as provided for

8 under section 111.

9 (2) 17 percent of such amounts shall be made

10 available for grants to the States for child care and

11 early childhood development as provided for in sec12 tion 131.

13 (3) 6 percent of such amounts shall be made

14 available for grants to States for education as pro15 vided for in section 132.

16 (4) 4 percent of such amounts shall be made

17 available to carry out the outreach and increased en18 rollment provisions under the amendments made by

19 section 133 to the medicaid program under title XIX

20 of the Social Security Act (42 U.S.C. 1396 et seq.)

21 and the children’s health insurance program under

22 title XXI of such Act (42 U.S.C. 1397aa et seq.).

23 (5) 15.5 percent of such amounts shall be made

24 available for public health programs, of which—
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1 (A) $300,000,000 shall be made available

2 to the Secretary to carry out subchapter F of

3 chapter V of the Food Drug and Cosmetic Act

4 (as added by section 204);

5 (B) $200,000,000 shall be made available

6 to the Indian Health Service to be used as pro7 vided for in title IX; and

8 (C) the remainder shall be made available

9 for public health programs as provided for in

10 title VI.

11 (6) 21 percent of such amounts shall be made

12 available to the National Institutes of Health Trust

13 Fund for Health Research for the conduct of health

14 research as provided for in section 121.

15 (7) For agricultural programs as provided for

16 in title IV—

17 (A) 12 percent of such amounts shall be

18 made available to the Tobacco Community Re19 vitalization Trust Fund for each of the first 10

20 fiscal years after the date of enactment of this

21 Act;

22 (B) 4 percent of such amounts shall be

23 made available to the Tobacco Community Re24 vitalization Trust Fund for each of the 11th
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1 through 15th fiscal years after the date of en2 actment of this Act; and

3 (C) 2 percent of such amounts shall be

4 made available to the Tobacco Community Re5 vitalization Trust Fund for each of the 16th

6 through 25th fiscal years after the date of en7 actment of this Act.

8 (8) For the Hospital Insurance Trust Fund—

9 (A) 4 percent of such amounts shall be

10 made available to such Trust Fund for each of

11 the first 10 fiscal years after the date of enact12 ment of this Act (less amounts made available

13 under paragraph (9) for the first 3 such fiscal

14 years);

15 (B) 8 percent of such amounts shall be

16 made available to such Trust Fund for each of

17 the 11th through 15th fiscal years after the

18 date of enactment of this Act;

19 (C) 9 percent of such amounts shall be

20 made available to such Trust Fund for each of

21 the 16th through 25th fiscal years after the

22 date of enactment of this Act; and

23 (D) 10 percent of such amounts shall be

24 made available to such Trust Fund for each

25 subsequent fiscal year.
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1 (9) For carrying out section 134, $250,000,000

2 shall be made available in each of the 3 fiscal years

3 described in such section;

4 (10) For reducing the debt—

5 (A) 6 percent of such amounts shall be

6 made available for such reduction in each of the

7 first 10 fiscal years after the date of enactment

8 of this Act;

9 (B) 10 percent of such amounts shall be

10 made available for such reduction in each of the

11 11th through 15th fiscal years after the date of

12 enactment of this Act;

13 (C) 11 percent of such amounts shall be

14 made available for such reduction in each of the

15 16th through 25th fiscal years after the date of

16 enactment of this Act; and

17 (D) 12 percent of such amounts shall be

18 made available for such reduction in each sub19 sequent fiscal year.

20 (e) BUDGETARY TREATMENT AND DEFINITION.—

21 (1) TREATMENT.—Amounts made available

22 under paragraphs (8) and (10) of subsection (d)

23 shall not be included—

24 (A) by the Office of Management and

25 Budget in the estimates and reports required by
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1 sections 252(b) and 254 of the Balanced Budg2 et and Emergency Deficit Control Act of 1985;

3 and

4 (B) by the Committee on the Budget of

5 the House of Representatives and the Commit6 tee on the Budget of the Senate for purposes of

7 congressional enforcement under section 302(f)

8 and 311(2)(B) of the Congressional Budget Act

9 of 1974 and section 202 of House Concurrent

10 Resolution 67 (104th Congress).

11 (2) DEFINITION.—In subsection (d)(109), the

12 term ‘‘debt’’ means any obligation of the Federal

13 Government included in the debt subject to limit.

14 SEC. 102. LIABILITY OF TOBACCO PRODUCT MANUFACTUR15 ERS.

16 (a) PAYMENTS.—

17 (1) INITIAL PAYMENT.—Not later than 90 days

18 after the date of enactment of this Act, each manu19 facturer shall pay to the Trust Fund an amount

20 that bears the same ratio to $15,000,000,000 as the

21 average stock market capitalization of the tobacco

22 manufacturer (as defined in paragraph (3)) bears to

23 the average stock market capitalization of all to24 bacco manufacturers for 1996.
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1 (2) ANNUAL ASSESSMENTS AND COLLECTION.—

2 For each calendar year beginning with the first full

3 calendar year following the year in which this Act is

4 enacted, the Secretary shall assess each manufac5 turer an amount determined under subsection (b).

6 Such assessments shall be collected in a manner

7 similar to the manner in which excise taxes are col8 lected under chapter 52 of the Internal Revenue

9 Code of 1986.

10 (3) AVERAGE STOCK MARKET CAPITALIZA11 TION.—For purposes of this subsection, the average

12 stock market capitalization of a manufacturer for a

13 year shall be determined by the Secretary of the

14 Treasury based on data submitted by manufacturers

15 and other appropriate data. Such determinations

16 shall be made regardless of whether the manufac17 turer issues stock.

18 (b) ANNUAL ASSESSMENTS.—The Secretary shall as19 sess each manufacturer (in accordance with regulations,

20 relating to the timing and method of payment of assess21 ments, to be promulgated by the Secretary of the Treas22 ury) an amount in accordance with the following:

23 (1) SMALL CIGARETTES.—With respect to a

24 manufacturer of cigarettes weighing not more than

25 3 pounds per thousand, the assessment shall equal—
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1 (A) for cigarettes removed during calendar

2 year 1999, $25 per thousand;

3 (B) for cigarettes removed during calendar

4 year 2000, $50 per thousand; and

5 (C) for cigarettes removed during calendar

6 year 2001, $75 per thousand.

7 (2) LARGE CIGARETTES.—

8 (A) IN GENERAL.—With respect to a man9 ufacturer of cigarettes weighing more than 3

10 pounds per thousand, the assessment shall

11 equal—

12 (i) for cigarettes removed during cal13 endar year 1999, $52.50 per thousand;

14 (ii) for cigarettes removed during cal15 endar year 2000, $105 per thousand; and

16 (iii) for cigarettes removed during cal17 endar year 2001, $157.50 per thousand.

18 (B) EXCEPTION.—On cigarettes more than

61 19 ⁄2 inches in length, at the rate prescribed for

20 cigarettes weighing not more than 3 pounds per

thousand, counting each 23 21 ⁄4 inches, or fraction

22 thereof, of the length of each as one cigarette.

23 (3) SMALL CIGARS.—With respect to a manu24 facturer of cigars weighing not more than 3 pounds

25 per thousand, the assessment shall equal—
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1 (A) for cigars removed during calendar

2 year 1999, $25 per thousand;

3 (B) for cigars removed during calendar

4 year 2000, $50 per thousand; and

5 (C) for cigars removed during calendar

6 year 2001, $75 per thousand.

7 (4) LARGE CIGARS.—With respect to a manu8 facturer of cigars weighing more than 3 pounds per

9 thousand, the assessment shall equal—

10 (A) for cigars removed during calendar

11 year 1999, 25 percent of the price for which

12 such cigars are sold but not more than $500

13 per thousand;

14 (B) for cigars removed during calendar

15 year 2000, 50 percent of the price for which

16 such cigars are sold but not more than $1,000

17 per thousand; and

18 (C) for cigars removed during calendar

19 year 2001, 75 percent of the price for which

20 such cigars are sold but not more than $1,500

21 per thousand.

22 (5) SNUFF.—With respect to a manufacturer of

23 snuff (as such term is defined for purposes of chap24 ter 52 of the Internal Revenue Code of 1986) the

25 assessment shall equal—
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1 (A) for snuff removed during calendar year

2 1999, $6.67 per pound (and a proportionate as3 sessment at the like rate on all fractional parts

4 of a pound);

5 (B) for snuff removed during calendar year

6 2000, $13.33 per pound (and a proportionate

7 assessment at the like rate on all fractional

8 parts of a pound); and

9 (C) for snuff removed during calendar year

10 2001, $20 per pound (and a proportionate as11 sessment at the like rate on all fractional parts

12 of a pound).

13 (6) CHEWING TOBACCO.—With respect to a

14 manufacturer of chewing tobacco (as such term is

15 defined for purposes of chapter 52 of the Internal

16 Revenue Code of 1986) the assessment shall equal—

17 (A) for chewing tobacco removed during

18 calendar year 1999, $2.67 per pound (and a

19 proportionate assessment at the like rate on all

20 fractional parts of a pound);

21 (B) for chewing tobacco removed during

22 calendar year 2000, $5.33 per pound (and a

23 proportionate assessment at the like rate on all

24 fractional parts of a pound); and
26

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1 (C) for chewing tobacco removed during

2 calendar year 2001, $8 per pound (and a pro3 portionate assessment at the like rate on all

4 fractional parts of a pound).

5 (7) PIPE TOBACCO.—With respect to a manu6 facturer of pipe tobacco (as such term is defined for

7 purposes of chapter 52 of the Internal Revenue Code

8 of 1986) the assessment shall equal—

9 (A) for pipe tobacco removed during cal10 endar year 1999, $5.33 per pound (and a pro11 portionate assessment at the like rate on all

12 fractional parts of a pound);

13 (B) for pipe tobacco removed during cal14 endar year 2000, $10.67 per pound (and a pro15 portionate assessment at the like rate on all

16 fractional parts of a pound); and

17 (C) for pipe tobacco removed during cal18 endar year 2001, $16.00 per pound (and a pro19 portionate assessment at the like rate on all

20 fractional parts of a pound).

21 (8) ROLL-YOUR-OWN TOBACCO.—With respect

22 to a manufacturer of roll-your-own tobacco the as23 sessment shall equal—

24 (A) for roll-your-own tobacco removed dur25 ing calendar year 1999, $5.71 per pound (and
27

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1 a proportionate assessment at the like rate on

2 all fractional parts of a pound);

3 (B) for roll-your-own tobacco removed dur4 ing calendar year 2000, $11.43 per pound (and

5 a proportionate assessment at the like rate on

6 all fractional parts of a pound); and

7 (C) for roll-your-own tobacco removed dur8 ing calendar year 2001, $17.14 per pound (and

9 a proportionate assessment at the like rate on

10 all fractional parts of a pound).

11 (c) INFLATION ADJUSTMENT.—In the case of a cal12 endar year after 2001, the dollar amount described in sub13 paragraph (C) of paragraphs (1), (2), (3), (4), (5), (6),

14 (7), and (8), and the percentage in subparagraph (C) of

15 paragraph (4), applicable to the preceding calendar year

16 shall be increased by an amount equal to—

17 (1) such dollar amount (or percentage), multi18 plied by

19 (2) the greater of—

20 (A) the medical consumer price percentage

21 increase for such calendar year as determined

22 in the same manner as the adjustment is deter23 mined under section 1(f)(3) of the Internal

24 Revenue Code of 1986 for such calendar year

25 by substituting ‘‘the second preceding calendar
28

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1 year’’ for ‘‘calendar year 1992’’ in subpara2 graph (B) thereof; or

3 (B) 3 percent.

4 (d) ASSESSMENTS APPLICABLE TO FLOOR

5 STOCKS.—

6 (1) IN GENERAL.—Tobacco products manufac7 tured in or imported into the United States which

8 are removed before any assessment date, and held

9 on such date for sale by any person, shall be subject

10 to an assessment in an amount equal to the excess

11 of—

12 (A) the assessment which would be im13 posed under subsection (b) on the product if the

14 product had been removed on such date, over

15 (B) the prior assessment (if any) imposed

16 under such subsection on such product.

17 (2) LIABILITY FOR ASSESSMENT AND METHOD

18 OF PAYMENT.—

19 (A) LIABILITY FOR ASSESSMENT.—A per20 son holding tobacco products on any assessment

21 date, to which any assessment imposed under

22 paragraph (1) applies shall be liable for such

23 assessment.

24 (B) METHOD OF PAYMENT.—The assess25 ment imposed under paragraph (1) shall be
29

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1 paid in such manner as the Secretary of the

2 Treasury shall prescribe by regulations.

3 (C) TIME FOR PAYMENT.—The assessment

4 imposed under paragraph (1) shall be paid on

5 or before April 1 following any assessment date.

6 (3) ARTICLES IN FOREIGN TRADE ZONES.—

7 Notwithstanding the Act of June 18, 1934 (48 Stat.

8 998, 19 U.S.C. 81a) and any other provision of law,

9 any product which is located in a foreign trade zone

10 on any assessment date, shall be subject to the as11 sessment imposed by paragraph (1) if—

12 (A) internal revenue taxes have been deter13 mined, or customs duties liquidated, with re14 spect to such product before such date; or

15 (B) such article is held on such date under

16 the supervision of a customs officer.

17 (4) ASSESSMENT DATE.—The term ‘‘assess18 ment date’’ means January 1.

19 (e) NO TAX BENEFIT.—

20 (1) IN GENERAL.—The initial payment de21 scribed in subsection (a)(1) shall not be considered

22 to be an ordinary and necessary expense in carrying

23 on a trade or business for purposes of the Internal

24 Revenue Code of 1986 and shall not be tax deduct25 ible.
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1 (2) LOOK-BACK PENALTIES.—The payment of

2 penalties under title III shall not be considered to be

3 an ordinary and necessary expense in carrying on a

4 trade or business for purposes of the Internal Reve5 nue Code of 1986 and shall not be deductible.

6 (f) EFFECT OF BANKRUPTCY.—Section 507(a)(8) of

7 title 11, United States Code, is amended—

8 (1) in subparagraph (F)(iii), by striking ‘‘or’’ at

9 the end;

10 (2) in subparagraph (G), by striking the period

11 and inserting ‘‘; or’’; and

12 (3) by adding at the end the following:

13 ‘‘(H) a payment, an assessment, or a pen14 alty to be paid into the Health Enhancement

15 and Lowered Tobacco Hazards for Young Kids

16 Trust Fund under section 102 (or any other

17 section) of the Healthy Kids Act.’’.

18 (g) LIMITATION.—A manufacturer may not utilize

19 any proceeds from liability insurance coverage to make

20 payments or pay assessments under this section.

21 (h) HEALTHY KIDS STAMP.—The Secretary shall

22 promulgate regulations to provide that a Healthy Kids

23 Stamp be affixed to each package of a tobacco product

24 for which an assessment has been paid under this section.
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1 (i) NONAPPLICATION TO CERTAIN MANUFACTUR2 ERS.—

3 (1) EXEMPTION.—A manufacturer described in

4 paragraph (2) shall be exempt from the require5 ments of this section relating to—

6 (A) the payment of an initial payment

7 under subsection (a)(1); and

8 (B) the payment of that portion of the

9 annual assessments under this section that

10 will be provided under paragraphs (1)

11 through (4) of section 101(d) to States.

12 (2) MANUFACTURER.—A manufacturer de13 scribed in this section is a manufacturer that has re14 solved tobacco-related civil actions with more than

15 25 States (in this paragraph referred to as ‘‘settling

16 States’’) prior to January 1, 1998 through written

17 settlement agreements signed by the attorneys gen18 eral of such States, so long as such manufacturer

19 provides to all other States by not later than Decem20 ber 31, 1998, the opportunity to enter into written

21 settlement agreements that are substantially similar

22 to the agreements that such manufacturer has en23 tered into with the settling States and that provide

24 such other States with the most favorable annual
32

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1 payment terms of its written settlement offers to

2 such other States.

3 (3) LIMITATION.—The provisions of paragraph

4 (1) shall apply only to assessments on cigarettes to

5 the extent that such cigarettes constitute less than

6 3 percent of all cigarettes manufactured and distrib7 uted for consumer use in any year.

8 SEC. 103. LICENSING OF MANUFACTURERS.

9 (a) IN GENERAL.—The Secretary, acting through the

10 Food and Drug Administration, shall establish a tobacco

11 manufacturer licensing program.

12 (b) REQUIREMENT.—A manufacturer or importer

13 shall have in effect a license issued under the program

14 under subsection (a) in order—

15 (1) to be eligible to manufacture and distribute

16 tobacco products in the United States, or, in the

17 case of an importer, to be eligible to import tobacco

18 products; and

19 (2) to be eligible to receive the protections pro20 vided under subtitle A of title VII.

21 (c) ELIGIBILITY.—A manufacturer or importer shall

22 not be eligible to receive a license under this section if

23 such manufacturer or importer has failed to pay the pay24 ment of assessment required under section 102 or fails
33

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1 to comply with such other requirements as the Secretary

2 may prescribe in futherance of the purposes of this Act.

3 (d) REVOCATION AND SUSPENSION.—The Secretary

4 shall promulgate regulations to provide for the enforce5 ment of the program established under section (a). Such

6 regulations shall provide for the revocation or suspension

7 of a license for nonpayment of required assessments.

8 SEC. 104. ENFORCEMENT.

9 (a) IN GENERAL.—The Secretary of the Treasury, in

10 consultation with the Secretary of Health and Human

11 Services, shall enforce the provisions of section 102 with

12 respect to any manufacturer that fails to pay any amount

13 assessed under section 102.

14 (b) AMOUNT OF PENALTY.—The amount of the pen15 alty imposed by subsection (a) on any failure with respect

16 to a manufacturer shall be established by the Secretary

17 of the Treasury for each day during the noncompliance

18 period, except that no such penalty shall be less than

19 $25,000 plus interest.

20 (c) NONCOMPLIANCE PERIOD.—For purposes of this

21 section, the term ‘‘noncompliance period’’ means, with re22 spect to any failure to pay an assessment under section

23 102, the period—

24 (1) beginning on the due date for such pay25 ment; and
34

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1 (2) ending on the date on which such payment

2 is paid in full.

3 Subtitle B—Payments

4 CHAPTER 1—TO STATES

5 SEC. 111. PAYMENTS TO STATES.

6 (a) AVAILABILITY OF FUNDS.—

7 (1) IN GENERAL.—The amounts made available

8 for a fiscal year under section 101(d)(1) shall be

9 made available to carry out subsections (b) and (d).

10 (2) NO OVERPAYMENT.—With respect to the

11 amount provided to a State under paragraph (1) for

12 a fiscal year, the Secretary shall not treat such

13 amount as an overpayment under any joint Federal14 State health program.

15 (3) FISCAL YEAR LIMITATION.—Amounts made

16 available for a fiscal year under subsection (b) shall

17 not exceed the amount available for such fiscal year

18 under section 101(d)(1).

19 (b) REIMBURSEMENT.—

20 (1) IN GENERAL.—The Secretary shall use

21 amounts made available under subsection (a)(1) in

22 each fiscal year to provide funds to each State that

23 is eligible under subsection (c) to reimburse such

24 State for amounts expended by the State under the

25 State program under title XIX of the Social Security
35

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1 Act (42 U.S.C. 1396 et seq.) or any other State

2 health program for the treatment of individuals with

3 tobacco-related illnesses or conditions.

4 (2) AMOUNT.—The amount for which a State is

5 eligible under paragraph (1) shall be based on the

6 ratio of the total Federal payments to the State

7 under title XIX of the Social Security Act (42

8 U.S.C. 1396 et seq.) for the fiscal year involved to

9 the total Federal payments to all States under such

10 title for such fiscal year.

11 (3) ADJUSTMENT.—With respect to a fiscal

12 year in which the amount determined under para13 graphs (1) and (2) of subsection (a) exceeds the lim14 itation under subsection (a)(3), the Secretary shall

15 make pro rata reductions in the amounts provided to

16 States under this subsection.

17 (4) REALLOTMENT.—The amount for which a

18 State is eligible under this subsection that is not

19 made available to the State as a result of the failure

20 of the State to meet the requirements of subsection

21 (c) shall be made available to other States on a pro

22 rata basis.

23 (5) USE OF FUNDS.—Amounts provided to a

24 State under this subsection shall be used—
36

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1 (A) to reimburse the State for expenses in2 curred by the State under the State program

3 under title XIX of the Social Security Act (42

4 U.S.C. 1396 et seq.) relating to the treatment

5 of tobacco-related illnesses or conditions;

6 (B) to reimburse the State for other ex7 penses incurred by the State in providing di8 rectly, or reimbursing others for the provision

9 of, treatment for tobacco-related illnesses or

10 conditions; and

11 (C) to provide funds to local governmental

12 entities as provided for in subsection (d).

13 (c) ELIGIBILITY.—To be eligible to receive funds

14 under this section a State shall—

15 (1) agree to resolve in accordance with section

16 701 any civil action that has been commenced by the

17 State against a tobacco manufacturer, distributor, or

18 retailer of a tobacco product seeking recovery for ex19 penditures attributable to the treatment of tobacco

20 induced illnesses and conditions or other damages;

21 (2) prepare and submit to the Secretary for ap22 proval a plan describing the manner in which the

23 State will comply with the requirements of sub24 section (d) and a certification that all actions de25 scribed in paragraph (1) have been resolved; and
37

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1 (3) comply with the provisions of subsection (d)

2 with respect to State and local governments.

3 (d) FUNDS FOR LOCAL GOVERNMENTAL ENTI4 TIES.—To be eligible to receive funds under subsection

5 (b), a State shall have adopted procedures to provide an

6 equitable portion of such funds to local governmental enti7 ties within the State that can demonstrate that such enti8 ties incurred tobacco-related health costs through—

9 (1) contributions to the program under title

10 XIX of the Social Security Act (42 U.S.C. 1396 et

11 seq.);

12 (2) the provision of indigent care;

13 (3) the provision of health care coverage to gov14 ernmental employees; or

15 (4) the implementation of tobacco product en16 forcement or tobacco product regulatory require17 ments in accordance with this Act.

18 CHAPTER 2—FEDERAL HEALTH

19 PROGRAMS

20 SEC. 121. NATIONAL INSTITUTES OF HEALTH TRUST FUND

21 FOR HEALTH RESEARCH.

22 (a) CREATION OF TRUST FUND.—There is estab23 lished in the Treasury of the United States a trust fund

24 to be known as the ‘‘National Institutes of Health Trust

25 Fund for Health Research’’ (hereafter referred to in this
38

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1 section as the ‘‘Trust Fund’’), consisting of such amounts

2 as may be appropriated or transferred to the Trust Fund

3 as provided in this section.

4 (b) FUNDING.—There shall be transferred to the

5 Trust Fund an amount equal to the amount made avail6 able for a fiscal year under section 101(d)(6) to carry out

7 this section in such fiscal year.

8 (c) OBLIGATIONS FROM TRUST FUND.—

9 (1) IN GENERAL.—Subject to the provisions of

10 paragraph (4), with respect to the amounts made

11 available in the Trust Fund in a fiscal year, the Sec12 retary shall distribute during any fiscal year—

13 (A) 2 percent of such amounts to the Of14 fice of the Director of the National Institutes of

15 Health to be allocated at the Director’s discre16 tion—

17 (i) for carrying out the responsibilities

18 of the Office of the Director, including the

19 Office of Research on Women’s Health and

20 the Office of Research on Minority Health,

21 the Office of Alternative Medicine, the Of22 fice of Rare Disease Research, the Office

23 of Behavioral and Social Sciences Research

24 (for use for efforts to reduce tobacco use),
39

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1 the Office of Dietary Supplements, and the

2 Office for Disease Prevention; and

3 (ii) for construction and acquisition of

4 equipment for or facilities of or used by

5 the National Institutes of Health;

6 (B) 2 percent of such amounts for transfer

7 to the National Center for Research Resources

8 to carry out section 1502 of the National Insti9 tutes of Health Revitalization Act of 1993 con10 cerning Biomedical and Behavioral Research

11 Facilities;

12 (C) 7.5 percent of such amounts to be used

13 for research into the prevention and cure of

14 cancer;

15 (D) 7.5 percent of such amounts to be

16 used as provided for in section 601;

17 (E) 1 percent of such amounts to be used

18 for prevention research programs at the Centers

19 for Disease Control and Prevention;

20 (F) 1 percent of such amounts to be used

21 for quality and health outcomes research at the

22 Agency for Health Care Policy and Research;

23 and

24 (G) the remainder of such amounts to

25 member institutes and centers, including the
40

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1 Office of AIDS Research, of the National Insti2 tutes of Health in the same proportion to such

3 remainder, as the amount of annual appropria4 tions under appropriations Acts for each mem5 ber institute and center for the fiscal year bears

6 to the total amount of appropriations under ap7 propriations Acts for all member institutes and

8 centers of the National Institutes of Health for

9 the fiscal year.

10 (2) PLANS OF ALLOCATION.—The amounts

11 transferred under paragraph (1)(G) shall be allo12 cated by the Director of the National Institutes of

13 Health or the various directors of the institutes and

14 centers, as the case may be, pursuant to allocation

15 plans developed by the various advisory councils to

16 such directors, after consultation with such

17 directors.

18 (3) GRANTS AND CONTRACTS FULLY FUNDED

19 IN FIRST YEAR.—With respect to any grant or con20 tract funded by amounts distributed under para21 graph (1), the full amount of the total obligation of

22 such grant or contract shall be funded in the first

23 year of such grant or contract, and shall remain

24 available until expended.
41

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1 (4) TRIGGER AND RELEASE OF MONIES AND

2 PHASE-IN.—

3 (A) TRIGGER AND RELEASE.—No expendi4 ture shall be made under paragraph (1) during

5 any fiscal year in which the annual amount ap6 propriated for the National Institutes of Health

7 under 1 or more appropriations Acts (not in8 cluding amounts provided for purposes of this

9 section) is less than the amount so appropriated

10 for the fiscal year.

11 (B) PHASE-IN.—The Secretary shall phase

12 in the distributions required under paragraph

13 (1) so that—

14 (i) 25 percent of the amount in the

15 Trust Fund is distributed in the first fiscal

16 year for which funds are available;

17 (ii) 50 percent of the amount in the

18 Trust Fund is distributed in the second

19 fiscal year for which funds are available;

20 (iii) 75 percent of the amount in the

21 Trust Fund is distributed in the third fis22 cal year for which funds are available; and

23 (iv) 100 percent of the amount in the

24 Trust Fund is distributed in the fourth
42

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1 and each succeeding fiscal year for which

2 funds are available.

3 CHAPTER 3—INVESTMENTS FOR

4 CHILDREN

5 SEC. 131. IMPROVING CHILD CARE AND EARLY CHILDHOOD

6 DEVELOPMENT.

7 (a) IN GENERAL.—The Secretary shall use amounts

8 made available under section 101(d)(2) for a fiscal year

9 for the following purposes:

10 (1) Improving the affordability of child care

11 through increased appropriations for child care

12 under the Child Care and Development Block Grant

13 Act of 1990 (42 U.S.C. 9858 et seq.).

14 (2) Enhancing the quality of child care and

15 early childhood development through the provision of

16 grants to States under the Child Care and Develop17 ment Block Grant Act of 1990 (42 U.S.C. 9858 et

18 seq.).

19 (3) Expanding the availability and quality of

20 school-age care through the provision of grants to

21 States under the Child Care and Development Block

22 Grant Act of 1990 (42 U.S.C. 9858 et seq.).

23 (4) Assisting young children by providing

24 grants to local collaboratives under the Child Care

25 and Development Block Grant Act of 1990 (42
43

S 1638 IS1S

1 U.S.C. 9858 et seq.) for the purpose of improving

2 parent education and supportive services, strength3 ening the quality of child care, improving health

4 services, and improving services for children with

5 disabilities.

6 (b) SUPPLEMENT NOT SUPPLANT.—Amounts made

7 available to a State under this section shall be used to

8 supplement and not supplant other Federal, State and

9 local funds provided for programs that serve the health

10 and developmental needs of children. Amounts provided

11 to the State under any of the provisions of law referred

12 to in this section shall not be reduced solely as a result

13 of the availability of funds under this section.

14 (c) AUTHORITY OF SECRETARY.—In providing funds

15 to States under this section, the Secretary may consider

16 the amount of funds allocated to States under section 111.

17 The Secretary may allocate funds under this section based

18 on the relative need for funds in the various States and

19 the strength of the State plans or applications for such

20 funds.

21 SEC. 132. IMPROVING ELEMENTARY EDUCATION.

22 (a) GRANTS AUTHORIZED.—The Secretary of Edu23 cation shall use amounts made available under section

24 101(d)(3) for a fiscal year to award grants to States and

25 local educational agencies to train, recruit and hire ele-
44

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1 mentary school teachers for the purpose of reducing the

2 average class size for students in grades 1 through 3 to

3 not more than 18 students per teacher.

4 (b) REGULATIONS REQUIRED.—The Secretary of

5 Education, not later than March 1, 1999, shall promulgate

6 regulations as the Secretary determines necessary to assist

7 States and school districts in providing smaller class sizes

8 with qualified teachers in early grades. Such regulations

9 may include provisions relating to—

10 (1) the use of funds by the State, including the

11 awarding of grants to local educational agencies;

12 (2) teacher preparation and certification; and

13 (3) accountability for improved student achieve14 ment.

15 (c) ENSURING A QUALIFIED TEACHER IN EVERY

16 CLASSROOM.—To be eligible to receive funds under this

17 Act, each State shall ensure that—

18 (1) not later than the period that begins on the

19 date of enactment of this Act and ends 5 years after

20 such date, and subject to paragraphs (2) and (3),

21 each teacher in a public elementary or secondary

22 school in the State has demonstrated the subject

23 matter knowledge, teaching knowledge, and teaching

24 skill necessary to teach effectively in the content
45

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1 area or areas in which the teacher provides instruc2 tion;

3 (2) each teacher in the State for whom the

4 demonstration described in paragraph (1) has been

5 waived temporarily by State or local education agen6 cies to respond to emergency teacher shortages or

7 other circumstances shall, not later than 3 years

8 after such waiver, demonstrate the subject matter

9 knowledge, teaching knowledge, and teaching skill

10 necessary to teach effectively in the content area or

11 areas in which the teacher provides instruction;

12 (3) no student will be taught for more than 1

13 year by an elementary school teacher, or for more

14 than 2 consecutive years in the same subject by a

15 secondary school teacher, who has not made the

16 demonstration described in paragraph (1); and

17 (4) during the period described in paragraph

18 (1), elementary school and secondary school teachers

19 who do not meet the requirements of paragraph (1),

20 are not disproportionately employed in high poverty

21 elementary schools or secondary schools.

22 (d) STATE PLAN.—

23 (1) IN GENERAL.—Each State desiring a grant

24 under this section shall submit to the Secretary of

25 Education a State plan at such time, in such man-
46

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1 ner, and accompanied by such information as the

2 Secretary may require.

3 (2) CONTENTS.—Each State plan shall dem4 onstrate to the satisfaction of the Secretary of Edu5 cation that—

6 (A) the activities assisted by the State with

7 funds made available under this section will be

8 conducted in compliance with any regulations

9 promulgated under subsection (a);

10 (B) the State will use the funds made

11 available under this section to reduce class size

12 for students in grades 1 through 3 in elemen13 tary schools throughout the State, focusing on

14 using the funds to train, recruit, and hire

15 teachers for elementary schools serving commu16 nities with the least available resources for such

17 activities and the largest class sizes in those

18 grades; and

19 (C) of the funds that are made available to

20 the State under this section, the State will

21 make available to each local educational agency

22 that serves children in grades 1 through 3 and

23 in which at least 30 percent of the children are

24 from families below the Federal poverty level, at

25 least as great a percentage of such funds as the
47

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1 percentage of funds provided to that local edu2 cational agency as compared to other local edu3 cational agencies in the State under part A of

4 title I of the Elementary and Secondary Edu5 cation Act of 1965.

6 (3) APPROVAL.—The Secretary shall approve a

7 State plan submitted under paragraph (1) if the

8 State plan meets the requirements of this sub9 section.

10 (e) SUPPLEMENT NOT SUPPLANT.—Amounts made

11 available to a State under this section shall be used to

12 supplement and not supplant other Federal, State and

13 local funds provided for programs that improve elementary

14 education as provided for in this section. Amounts pro15 vided to the State under this section shall not be reduced

16 solely as a result of the availability of funds under this

17 section.

18 (f) AUTHORITY OF SECRETARY.—In providing funds

19 to States under this section, the Secretary may consider

20 the amount of funds allocated to States under section 111.

21 The Secretary may allocate funds under this section based

22 on the relative need for funds in the various States and

23 the strength of the State plans.
48

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1 SEC. 133. INCREASED ENROLLMENT OF CHILDREN WITH

2 THE MEDICAID AND STATE CHILDREN’S

3 HEALTH INSURANCE PROGRAMS.

4 (a) TRANSITIONAL INCREASED FEDERAL MATCHING

5 RATE FOR INCREASED MEDICAID ADMINISTRATIVE

6 COSTS.—Section 1931(h) of the Social Security Act (42

7 U.S.C. 1396u–1(h)) is amended—

8 (1) in paragraph (2), by striking ‘‘attributable

9 to’’ and all that follows and inserting ‘‘attributable

10 to—

11 ‘‘(A) administrative costs of eligibility de12 terminations that (but for the enactment of this

13 section) would not be incurred; and

14 ‘‘(B) outreach activities to enroll uninsured

15 children in a State plan approved under this

16 title or title XXI.’’; and

17 (2) by striking paragraphs (3) and (4) and in18 serting the following:

19 ‘‘(3) LIMITATION.—

20 ‘‘(A) IN GENERAL.—Beginning with fiscal

21 year 1998, the total amount of additional Fed22 eral funds that are expended as a result of the

23 application of this subsection shall not exceed

24 $525,000,000.

25 ‘‘(B) AVAILABILITY OF APPROPRIATION.—

26 Any amount appropriated in accordance with
49

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1 this paragraph shall remain available until ex2 pended.

3 ‘‘(C) EQUITABLE DISTRIBUTION OF

4 FUNDS.—In applying this paragraph, the Sec5 retary shall ensure the equitable distribution of

6 additional funds among the States.’’.

7 (b) MEDICAID PRESUMPTIVE ELIGIBILITY FOR LOW8 INCOME CHILDREN.—

9 (1) IN GENERAL.—Section 1920A(b)(3) of the

10 Social Security Act (42 U.S.C. 1396r–1a(b)(3)) is

11 amended—

12 (A) in subparagraph (A)(i))—

13 (i) by striking ‘‘or (II)’’ and inserting

14 ‘‘, (II)’’; and

15 (ii) by inserting ‘‘, or (III) is an ele16 mentary school or secondary school, as

17 such terms are defined in section 14101 of

18 the Elementary and Secondary Education

19 Act of 1965 (20 U.S.C. 8801), is a child

20 care resource and referral agency, a child

21 support enforcement agency, or is author22 ized to determine the eligibility of a child

23 for obtaining child health assistance under

24 title XXI that is in the form of coverage
50

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1 that meets the requirements of section

2 2103’’ before the semicolon; and

3 (B) in subparagraph (C), by striking ‘‘lim4 iting the classes of’’ and inserting ‘‘imposing

5 limitations on’’.

6 (2) RETROACTIVITY.—The amendments made

7 by paragraph (1) take effect as if included in the en8 actment of section 4912 of the Balanced Budget Act

9 of 1997 (Public Law 105–33; 111 Stat. 571).

10 (c) MEDICAID EXPENDITURES COUNTED AGAINST

11 STATE ALLOTMENTS UNDER TITLE XXI.—

12 (1) IN GENERAL.—Section 2104(d) of the So13 cial Security Act (42 U.S.C. 1397dd(d)) is amended

14 to read as follows:

15 ‘‘(d) CERTAIN MEDICAID EXPENDITURES COUNTED

16 AGAINST INDIVIDUAL STATE ALLOTMENTS.—The amount

17 of the allotment otherwise provided to a State under sub18 section (b) or (c) for a fiscal year shall be reduced by the

19 amount (if any) of the payments made to that State under

20 section 1903(a) for expenditures claimed by the State dur21 ing such fiscal year that is attributable to the provision

22 of medical assistance to a child for which payment is made

23 under section 1903(a)(1) on the basis of an enhanced

24 FMAP under the fourth sentence of section 1905(b).’’.
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1 (2) RETROACTIVITY.—The amendment made by

2 paragraph (1) takes effect as if included in the en3 actment of section 4901 of the Balanced Budget Act

4 of 1997 (Public Law 105–33; 111 Stat. 552).

5 (d) MEDICAID AND STATE CHILDREN’S HEALTH IN6 SURANCE PROGRAM ELIGIBILITY FOR LEGAL IMMIGRANT

7 CHILDREN WHO ENTERED THE UNITED STATES AFTER

8 AUGUST 1996.—

9 (1) EXEMPTION FROM 5-YEAR BAN.—Section

10 403 of the Personal Responsibility and Work Oppor11 tunity Reconciliation Act of 1996 (8 U.S.C. 1613),

12 as amended by sections 5302(c)(1)(B) and 5303(c)

13 of the Balanced Budget Act of 1997 (Public Law

14 105–33; 111 Stat. 599, 600), is amended by adding

15 at the end the following:

16 ‘‘(e) MEDICAID AND SCHIP BENEFITS FOR CERTAIN

17 CHILDREN.—Notwithstanding any other provision of law,

18 the limitations under section 401(a) and subsection (a)

19 shall not apply to an individual who is under 19 years of

20 age and who lawfully entered the United States after Au21 gust 22, 1996, but only with respect to the eligibility of

22 that individual for—

23 ‘‘(1) child health assistance under title XXI of

24 the Social Security Act (42 U.S.C. 1397aa et seq.);

25 and
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1 ‘‘(2) medical assistance under title XIX of such

2 Act (42 U.S.C. 1396 et seq.), if the individual is an

3 optional targeted low-income child described in sec4 tion 1905(u)(2)(B) of such Act (42 U.S.C.

5 1396d(u)(2)(B)).’’.

6 (2) NONAPPLICATION OF STATE AUTHORITY TO

7 DETERMINE ELIGIBILITY FOR MEDICAID.—Section

8 402(b)(2) of the Personal Responsibility and Work

9 Opportunity Reconciliation Act of 1996 (8 U.S.C.

10 1612(b)(2)), as amended by sections 5303(b) and

11 5305(b) of the Balanced Budget Act of 1997 (Public

12 Law 105–33; 111 Stat. 600, 601), is amended—

13 (A) in the matter preceding subparagraph

14 (A), by striking ‘‘Qualified’’ and inserting ‘‘Ex15 cept as provided in subparagraphs (A), (E),

16 (F), and (G), qualified’’; and

17 (B) by adding at the end the following:

18 ‘‘(G) MEDICAID EXCEPTION FOR CERTAIN

19 CHILDREN.—With respect to eligibility for bene20 fits for the program described in section

21 403(e)(2), paragraph (1) shall not apply to any

22 individual described in that section.’’.

23 (3) RETROACTIVITY.—The amendments made

24 by paragraphs (1) and (2) take effect as if included
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1 in the enactment of the Balanced Budget Act of

2 1997 (Public Law 105–33; 111 Stat. 251).

3 (e) ANNUAL PERFORMANCE BONUS FOR REDUCTION

4 IN MEDICAID ELIGIBLE BUT UNENROLLED CHILDREN.—

5 Section 1903 of the Social Security Act (42 U.S.C. 1396b)

6 is amended by adding at the end the following:

7 ‘‘(x) PERFORMANCE BONUS FOR REDUCTION IN ELI8 GIBLE BUT UNENROLLED CHILDREN.—

9 ‘‘(1) PERFORMANCE BONUS.—Beginning with

10 fiscal year 1999, in addition to the amounts paid to

11 a State under subsection (a), the Secretary shall pay

12 to each State that has an approved plan under this

13 title an amount equal to the performance bonus de14 termined under paragraph (2).

15 ‘‘(2) PERFORMANCE BONUS.—

16 ‘‘(A) FORMULA.—The performance bonus

17 for a State for a fiscal year is equal to the

18 product of—

19 ‘‘(i) the excess baseline enrollment for

20 the State for the fiscal year;

21 ‘‘(ii) the average per child expendi22 tures by the State under this title for the

23 fiscal year; and

24 ‘‘(iii) the difference between the en25 hanced FMAP and the Federal medical as-
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1 sistance percentage (as defined in the first

2 sentence of section 1905(b)) of the State

3 for the fiscal year described in section

4 2105(b).

5 ‘‘(B) DETERMINATION OF THE EXCESS

6 BASELINE ENROLLMENT.—

7 ‘‘(i) IN GENERAL.—For purposes of

8 subparagraph (A)(i), the excess baseline

9 enrollment for a State for a fiscal year is

10 the difference between (I) the actual num11 ber of full year equivalent children enrolled

12 under the State plan and (II) the baseline

13 number of full year equivalent children

14 that would be enrolled under the State

15 plan in the absence of the performance

16 bonus outreach efforts of the State.

17 ‘‘(ii) DETERMINATION OF THE BASE18 LINE NUMBER OF FULL YEAR EQUIVALENT

19 CHILDREN.—For purposes of clause (i)(II),

20 the baseline number of full year equivalent

21 children that would be enrolled under the

22 State plan in the absence of the perform23 ance bonus outreach efforts of the State

24 is—
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1 ‘‘(I) in the case of fiscal year

2 1999, the actual number of full year

3 equivalent children enrolled under the

4 State plan in fiscal year 1998, in5 creased by the national percentage in6 crease for fiscal year 1999 in the

7 number of full year equivalent chil8 dren enrolled in all State plans under

9 this title, as projected by the Congres10 sional Budget Office in January 1998;

11 and

12 ‘‘(II) in the case of any succeed13 ing fiscal year, the baseline number of

14 full year equivalent children that

15 would be enrolled under the State

16 plan in the absence of the perform17 ance bonus outreach efforts of the

18 State determined for the preceding

19 fiscal year, increased by the national

20 percentage increase for that succeed21 ing fiscal year in the number of full

22 year equivalent children enrolled in all

23 State plans under this title, as pro24 jected by the Congressional Budget

25 Office in January 1998.
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1 ‘‘(C) DETERMINATION OF AVERAGE PER

2 CHILD EXPENDITURES.—For purposes of sub3 paragraph (A)(ii), the average per child expend4 itures by a State under this title for a fiscal

5 year is—

6 ‘‘(i) the total amount paid to the

7 State under subsection (a)(1) that is at8 tributable to medical assistance provided to

9 children under the State plan; divided by

10 ‘‘(ii) the actual number of full year

11 equivalent children enrolled under the

12 State plan in that fiscal year.

13 ‘‘(3) DATA REQUIREMENTS.—Each State shall

14 submit to the Secretary such data, at such time and

15 in such manner, as the Secretary determines is nec16 essary to make the payments required under this

17 subsection. The Secretary shall ensure that data is

18 provided under this subsection in a manner that is

19 consistent with other data reporting requirements

20 for information required to be submitted by a State

21 under this title and title XXI, and that avoids dupli22 cation of reporting requirements.

23 ‘‘(4) STATES WITH SIGNIFICANTLY HIGHER IN24 CREASED ACTUAL ENROLLMENT THAN THE EX25 PECTED NATIONAL INCREASE.—For any fiscal year,
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1 if a State’s actual full year equivalent children en2 rollment percentage increase over the preceding fis3 cal year is at least twice the estimated national per4 centage increase in such enrollment for that fiscal

5 year, as projected by the Congressional Budget Of6 fice in January 1998, the State shall submit such

7 additional information as the Secretary determines

8 is necessary to verify that the increase is the result

9 of the State reducing the number of unenrolled chil10 dren who are eligible for medical assistance under

11 this title in the State.

12 ‘‘(5) TIMING OF PERFORMANCE BONUS PAY13 MENTS; RECONCILIATION.—The Secretary shall pay

14 the performance bonuses required under this sub15 section for a fiscal year not later than September 30

16 of the succeeding fiscal year based on reporting data

17 that reflects each State’s actual number of full year

18 equivalent children enrolled under the State plan

19 and average per child expenditures. A State shall

20 provide the Secretary with access to any records or

21 information relevant to the payment of a perform22 ance bonus under this subsection for the purposes of

23 review or audit.

24 ‘‘(6) WAIVERS.—The provisions of this sub25 section apply to a State providing medical assistance
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1 under this title under waiver authority in the same

2 manner as they apply to a State with an approved

3 plan under this title.

4 ‘‘(7) LIMITATION.—Amounts paid to States for

5 a fiscal year under this subsection shall not exceed

6 the amount made available under section 101(d)(4)

7 of the Healthy Kids Act for such fiscal year (less

8 amounts paid to States under the amendments made

9 by subsections (a) through (d) of section 133 of such

10 Act).’’.

11 SEC. 134. MEDICARE CANCER PATIENT DEMONSTRATION

12 PROJECT; EVALUATION AND REPORT TO

13 CONGRESS.

14 (a) ESTABLISHMENT.—The Secretary shall establish

15 a 3-year demonstration project which provides for pay16 ment under the medicare program under title XVIII of

17 the Social Security Act (42 U.S.C. 1395 et seq.) of routine

18 patient care costs—

19 (1) which are provided to an individual diag20 nosed with cancer and enrolled in the medicare pro21 gram under such title as part of the individual’s par22 ticipation in an approved clinical trial program; and

23 (2) which are not otherwise eligible for payment

24 under such title for individuals who are entitled to

25 benefits under such title.
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1 (b) APPLICATION.—The beneficiary cost sharing pro2 visions under the medicare program, such as deductibles,

3 coinsurance, and copayment amounts, shall apply to any

4 individual participating in a demonstration project con5 ducted under this section.

6 (c) APPROVED CLINICAL TRIAL PROGRAM.—

7 (1) IN GENERAL.—For purposes of this section,

8 the term ‘‘approved clinical trial program’’ means a

9 clinical trial program which is approved by—

10 (A) the National Institutes of Health;

11 (B) a National Institutes of Health cooper12 ative group or a National Institutes of Health

13 center; and

14 (C) the National Cancer Institute, with re15 spect to programs that oversee and coordinate

16 extramural clinical cancer research, trials spon17 sored by such Institute and conducted at des18 ignated cancer centers, clinical trials, and Insti19 tute grants that support clinical investigators.

20 (2) MODIFICATIONS IN APPROVED TRAILS.—

21 Beginning 1 year after the date of enactment of this

22 Act, the Secretary, in consultation with the Cancer

23 Policy Board of the Institute of Medicine, may mod24 ify or add to the requirements of paragraph (1) with

25 respect to an approved clinical trial program.
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1 (d) ROUTINE PATIENT CARE COSTS.—

2 (1) IN GENERAL.—For purposes of this section,

3 ‘‘routine patient care costs’’ shall include the costs

4 associated with the provision of items and services

5 that—

6 (A) would otherwise be covered under the

7 medicare program if such items and services

8 were not provided in connection with an ap9 proved clinical trial program; and

10 (B) are furnished according to the design

11 of an approved clinical trial program.

12 (2) EXCLUSION.—For purposes of this section,

13 ‘‘routine patient care costs’’ shall not include the

14 costs associated with the provision of—

15 (A) an investigational drug or device, un16 less the Secretary has authorized the manufac17 turer of such drug or device to charge for such

18 drug or device; or

19 (B) any item or service supplied without

20 charge by the sponsor of the approved clinical

21 trial program.

22 (e) STUDY.—The Secretary shall study the impact on

23 the medicare program under title XVIII of the Social Se24 curity Act of covering routine patient care costs for indi25 viduals with a diagnosis of cancer and other diagnoses,
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1 who are entitled to benefits under such title and who are

2 enrolled in an approved clinical trial program.

3 (f) REPORT TO CONGRESS.—Not later than 30

4 months after the date of enactment of this Act, the Sec5 retary shall submit a report to Congress that contains a

6 detailed description of the results of the study conducted

7 under subsection (e) including recommendations regarding

8 the extension and expansion of the demonstration project

9 conducted under this section.

10 (g) FUNDING.—The Secretary shall use amounts

11 made available under section 101(d)(9)(A) for a fiscal

12 year to carry out this section.

13 TITLE II—FDA JURISDICTION

14 OVER TOBACCO PRODUCTS

15 SEC. 201. REFERENCE.

16 Whenever in this title an amendment or repeal is ex17 pressed in terms of an amendment to, or repeal of, a sec18 tion or other provision, the reference shall be considered

19 to be made to a section or other provision of the Federal

20 Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.).

21 SEC. 202. STATEMENT OF GENERAL AUTHORITY.

22 The regulations promulgated by the Secretary in the

23 rule dated August 28, 1996 (Vol. 61, No. 168 C.F.R.),

24 adding part 897 to title 21, Code of Federal Regulations,
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1 shall be deemed to have been promulgated under the Food,

2 Drug and Cosmetic Act as amended by this title.

3 SEC. 203. TREATMENT OF TOBACCO PRODUCTS AS DRUGS

4 AND DEVICES.

5 (a) DEFINITIONS.—

6 (1) DRUG.—Section 201(g)(1) (21 U.S.C.

7 321(g)(1)) is amended by striking ‘‘; and (D)’’ and

8 inserting ‘‘; (D) nicotine in tobacco products; and

9 (E)’’.

10 (2) DEVICES.—Section 201(h) (21 U.S.C.

11 321(h)) is amended—

12 (A) in paragraph (2), by striking ‘‘or’’ at

13 the end;

14 (B) in paragraph (3), by striking ‘‘and’’ at

15 the end and inserting ‘‘or’’; and

16 (C) by inserting after paragraph (3), the

17 following:

18 ‘‘(4) a delivery component of a tobacco product;

19 and’’.

20 (3) OTHER DEFINITIONS.—Section 201 (21

21 U.S.C. 321) is amended by adding at the end the

22 following:

23 ‘‘(kk) The term ‘tobacco product’ means any product

24 made or derived from tobacco leaf made for human con25 sumption including, but not limited to, cigarettes,
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1 cigarillos, cigarette tobacco, cigars, little cigars, pipe to2 bacco, and smokeless tobacco, and roll-your-own tobacco.’’.

3 (b) REGULATORY AUTHORITY.—Section 503(g) (21

4 U.S.C. 353(g)) is amended by adding at the end the fol5 lowing:

6 ‘‘(5) The Secretary may regulate any tobacco product

7 as a drug, device, or both, and may designate the office

8 of the Administration that shall be responsible for regulat9 ing such products.’’.

10 (c) DEVICES.—Section 520(e)(1) (21 U.S.C.

11 360j(e)(1)) is amended by striking ‘‘or use—’’ and insert12 ing ‘‘or use, including restrictions on the access to, and

13 the advertising and promotion of, tobacco products—’’.

14 (d) MISBRANDING.—Section 502 (21 U.S.C. 360) is

15 amended by adding at the end the following:

16 ‘‘(u) In the case of a tobacco product, it is sold, dis17 tributed, advertised, or labeled in violation of this Act or

18 the regulations promulgated under this Act.

19 ‘‘(v) The regulations promulgated in accordance with

20 subchapter E shall, at a minimum, require that a tobacco

21 product be deemed to be misbranded if the labeling of the

22 package of the product, or any claim of the manufacturer

23 in connection with the product, states or implies (as deter24 mined by the Secretary) that the product presents a re25 duced health risk unless it is demonstrated to the satisfac-
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1 tion of the Secretary that the product will achieve the best

2 public health result, taking into account all relevant fac3 tors including, but not limited to, the probability of the

4 increased number of new users of tobacco products and

5 the reduced probability that existing users of tobacco

6 products will quit.’’.

7 (e) ENFORCEMENT.—Section 301 (42 U.S.C. 331) is

8 amended by adding at the end the following:

9 ‘‘(aa) The failure to comply with the requirements of

10 section 581.

11 ‘‘(bb) The failure or refusal to comply with any of

12 the requirements of subsections (a), (b) or (e) of section

13 578.’’.

14 (f) STATE AND LOCAL REQUIREMENTS.—Section

15 521 (21 U.S.C. 360k) is amended—

16 (1) in subsection (a), by striking ‘‘subsection

17 (b)’’ and inserting ‘‘subsections (b) and (c)’’; and

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

19 ‘‘(c) This section shall not apply to devices that are

20 tobacco products.’’.

21 SEC. 204. SAFETY AND EFFICACY STANDARD AND RECALL

22 AUTHORITY.

23 (a) SAFETY AND EFFICACY STANDARD.—Section

24 513(a) (21 U.S.C. 360c(a)) is amended—
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1 (1) in paragraph (1)(B), by inserting after the

2 first sentence the following: ‘‘For a device which is

3 a tobacco product, the assurance in the previous sen4 tence need not be found if the Secretary finds that

5 special controls achieve the best public health re6 sult.’’; and

7 (2) in paragraph (2)—

8 (A) by redesignating subparagraphs (A),

9 (B) and (C) as clauses (i), (ii) and (iii), respec10 tively;

11 (B) by striking ‘‘(2) For’’ and inserting

12 ‘‘(2)(A) For’’; and

13 (C) by adding at the end the following:

14 ‘‘(B) For purposes of paragraph (1)(B), subsections

15 (c)(2)(C), (d)(2)(B), (e)(2)(A), (f)(3)(B)(i), and

16 (f)(3)(C)(i), and sections 514, 519(a), 520(e), and 520(f),

17 the safety and effectiveness of a device that is a tobacco

18 product need not be found if the Secretary finds that the

19 action to be taken under any such provision would achieve

20 the best public health result. The finding as to whether

21 the best public health result has been achieved shall be

22 determined with respect to the risks and benefits to the

23 population as a whole, including users and non-users of

24 the tobacco product, and taking into account—
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1 ‘‘(i) the increased or decreased likelihood that

2 existing consumers of tobacco products will stop

3 using such products; and

4 ‘‘(ii) the increased or decreased likelihood that

5 those who do not use tobacco products will start

6 using such products.’’.

7 (b) RECALL AUTHORITY.—Section 518(e)(1) (21

8 U.S.C. 360h(e)(1)) is amended by inserting after ‘‘adverse

9 health consequences or death,’’ the following: ‘‘and for to10 bacco products that the best public health result would

11 be achieved,’’.

12 SEC. 205. GENERAL HEALTH AND SAFETY REGULATION OF

13 TOBACCO PRODUCTS.

14 Chapter V (21 U.S.C. 351 et seq.) is amended by

15 adding at the end the following:

16 ‘‘SUBCHAPTER F—TOBACCO PRODUCTS

17 ‘‘SEC. 571. PROMULGATION OF REGULATIONS.

18 ‘‘Any regulations necessary to implement this sub19 chapter shall be promulgated not later than 12 months

20 after the date of enactment of this subchapter using notice

21 and comment rulemaking (in accordance with chapter 5

22 of title 5, United States Code). Such regulations may be

23 revised thereafter as determined necessary by the Sec24 retary.
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1 ‘‘SEC. 572. SCIENTIFIC ADVISORY COMMITTEE.

2 ‘‘(a) ESTABLISHMENT.—Not later than 1 year after

3 the date of enactment of this subchapter, the Secretary

4 shall establish an advisory committee, to be known as the

5 ‘Scientific Advisory Committee’, to assist the Secretary.

6 ‘‘(b) MEMBERSHIP.—

7 ‘‘(1) IN GENERAL.—The Secretary shall appoint

8 as members of the Scientific Advisory Committee

9 any individuals with expertise in the medical, sci10 entific, or other technological data involving the

11 manufacture and use of tobacco products, and of ap12 propriately diversified professional backgrounds.

13 ‘‘(2) LIMITATIONS.—Notwithstanding section

14 5(b) of the Federal Advisory Committee Act (5

15 U.S.C. App. 3), the Secretary may not appoint to

16 the Committee any individual who—

17 ‘‘(A) is in the regular full-time employ of

18 the Federal Government;

19 ‘‘(B) is, or is in the employ of, a manufac20 turer, distributor, or retailer of a tobacco prod21 uct, or organization substantially funded by

22 manufacturers, distributors, or retailers of to23 bacco products;

24 ‘‘(C) is, or is in the employ of, an attorney

25 representing an entity described in subpara26 graph (B); or
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1 ‘‘(D) is, or is in the employ of, a consult2 ant employed by or under retainer to an entity

3 described in subparagraph (B).

4 ‘‘(3) CHAIRPERSON.—The Secretary shall des5 ignate 1 of the members of the advisory committee

6 to serve as chairperson of the Committee.

7 ‘‘(c) COMPENSATION AND EXPENSES.—Members of

8 the Scientific Advisory Committee shall be entitled to the

9 same compensation and expenses as the compensation and

10 expenses provided to members of the advisory committees

11 established under section 514(b)(5)(B).

12 ‘‘(d) DUTIES.—The Scientific Advisory Committee

13 shall—

14 ‘‘(1) provide assistance to the Secretary;

15 ‘‘(2) examine the effects of the alteration of the

16 nicotine yield levels in tobacco products;

17 ‘‘(3) examine whether there is a threshold level

18 below which nicotine yields do not produce depend19 ence on the tobacco product involved, and, if so,

20 what that level is; and

21 ‘‘(4) review other safety, dependence or health

22 issues relating to tobacco products as determined ap23 propriate by the Secretary.
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1 ‘‘SEC. 573. PERFORMANCE STANDARDS.

2 ‘‘(a) GENERAL RULE.—The Secretary may adopt a

3 performance standard under section 514(a)(2) for a to4 bacco product regardless of whether the product has been

5 classified under section 513. Such standards may in6 clude—

7 ‘‘(1) the reduction or elimination of nicotine

8 yields of the product;

9 ‘‘(2) the reduction or elimination of other con10 stituents or harmful components of the product; or

11 ‘‘(3) standards relating to any other require12 ment pursuant to section 512(a)(2).

13 ‘‘(b) TOBACCO CONSTITUENTS.—The Secretary may

14 require that a manufacturer test, report and disclose to15 bacco and tobacco smoke constituents, including labeling

16 and advertising disclosures relating to such constituents,

17 including, but not limited to, tar and nicotine.

18 ‘‘SEC. 574. DISCLOSURE AND REPORTING OF TOBACCO AND

19 NONTOBACCO INGREDIENTS AND CONSTITU20 ENTS.

21 ‘‘(a) DISCLOSURE OF ALL INGREDIENTS.—

22 ‘‘(1) IMMEDIATE AND ANNUAL DISCLOSURE.—

23 Not later than 30 days after the date of enactment

24 of this subchapter, and annually thereafter, each

25 manufacturer of a tobacco product shall submit to

26 the Secretary an ingredient list for each brand of to-
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1 bacco product it manufactures that contains the in2 formation described in paragraph (2).

3 ‘‘(2) REQUIREMENTS.—The list described in

4 paragraph (1) shall, with respect to each brand or

5 variety of tobacco product of a manufacturer, in6 clude—

7 ‘‘(A) a list of all ingredients, constituents,

8 substances, and compounds that are found in or

9 added to the tobacco or tobacco product (in10 cluding the paper, filter, or packaging of the

11 product if applicable) in the manufacture of the

12 tobacco product, for each brand or variety of to13 bacco product so manufactured, including, if

14 determined necessary by the Secretary, any ma15 terial added to the tobacco used in the product

16 prior to harvesting;

17 ‘‘(B) the quantity of the ingredients, con18 stituents, substances, and compounds that are

19 listed under subparagraph (A) in each brand or

20 variety of tobacco product;

21 ‘‘(C) the nicotine content of the product,

22 measured in milligrams of nicotine;

23 ‘‘(D) for each brand or variety of ciga24 rettes—
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1 ‘‘(i) the filter ventilation percentage

2 (the level of air dilution in the cigarette as

3 provided by the ventilation holes in the fil4 ter, described as a percentage);

5 ‘‘(ii) the pH level of the smoke of the

6 cigarette; and

7 ‘‘(iii) the tar, nicotine, and carbon

8 monoxide delivery level under Federal

9 Trade Commission parameters and any

10 other smoking conditions established by

11 the Secretary, reported in milligrams of

12 tar, nicotine, and carbon monoxide per cig13 arette;

14 ‘‘(E) for each brand or variety of smoke15 less tobacco products—

16 ‘‘(i) the pH level of the tobacco;

17 ‘‘(ii) the moisture content of the to18 bacco expressed as a percentage of the

19 weight of the tobacco; and

20 ‘‘(iii) the nicotine content—

21 ‘‘(I) for each gram of the prod22 uct, measured in milligrams of nico23 tine;

24 ‘‘(II) expressed as a percentage

25 of the dry weight of the tobacco; and
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1 ‘‘(III) with respect to unionized

2 (free) nicotine, expressed as a percent3 age per gram of the tobacco and ex4 pressed in milligrams per gram of the

5 tobacco; and

6 ‘‘(F) any other information determined ap7 propriate by the Secretary.

8 ‘‘(3) METHODS.—The Secretary shall have the

9 authority to promulgate regulations to establish the

10 methods to be used by manufacturers in making the

11 determinations required under paragraph (2).

12 ‘‘(b) SAFETY ASSESSMENTS.—

13 ‘‘(1) APPLICATION TO NEW INGREDIENTS.—

14 ‘‘(A) IN GENERAL.—Not later than 1 year

15 after the date of enactment of this subchapter,

16 and annually thereafter, each manufacturer

17 shall submit to the Secretary a safety assess18 ment for each new ingredient, constituent, sub19 stance, or compound that such manufacturer

20 desires to make a part of a tobacco product.

21 Such new ingredient, constituent, substance, or

22 compound shall not be included in a tobacco

23 product prior to approval by the Secretary of

24 such a safety assessment.
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1 ‘‘(B) METHOD OF FILING.—A safety as2 sessment submitted under subparagraph (A)

3 shall be signed by an officer of the manufac4 turer who is acting on behalf of the manufac5 turer and who has the authority to bind the

6 manufacturer, and contain a statement that en7 sures that the information contained in the as8 sessment is true, complete and accurate.

9 ‘‘(C) DEFINITION OF NEW INGREDIENT.—

10 For purposes of subparagraph (A), the term

11 ‘new ingredient, constituent, substance, or com12 pound’ means an ingredient, constituent sub13 stance, or compound listed under subsection

14 (a)(1) that was not used in the brand or variety

15 of tobacco product involved prior to January 1,

16 1998.

17 ‘‘(2) APPLICATION TO OTHER INGREDIENTS.—

18 With respect to the application of this section to in19 gredients, constituents substances, or compounds

20 listed under subsection (a) to which paragraph (1)

21 does not apply, all such ingredients, constituents,

22 substances, or compounds shall be reviewed through

23 the safety assessment process within the 5-year pe24 riod beginning on the date of enactment of this sub25 chapter. The Secretary shall develop a procedure for
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1 the submission of safety assessments of such ingre2 dients, constituents, substances, or compounds that

3 staggers such safety assessments within the 5-year

4 period.

5 ‘‘(3) BASIS OF ASSESSMENT.—The safety as6 sessment of an ingredient, constituents, substance,

7 or compound described in paragraphs (1) and (2)

8 shall—

9 ‘‘(A) be based on the best scientific evi10 dence available at the time of the submission of

11 the assessment; and

12 ‘‘(B) demonstrate that there is a reason13 able certainty among experts qualified by sci14 entific training and experience who are con15 sulted, that the ingredient, constituents, sub16 stance, or compound will not present any risk

17 to consumers or the public in the quantities

18 used under the intended conditions of use.

19 ‘‘(c) PROHIBITION.—

20 ‘‘(1) REGULATIONS.—Not later than 12 months

21 after the date of enactment of this subchapter, the

22 Secretary shall promulgate regulations to prohibit

23 the use of any ingredient, constituent, substance, or

24 compound in the tobacco product of a manufac25 turer—
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1 ‘‘(A) if no safety assessment has been sub2 mitted by the manufacturer for the ingredient,

3 constituent, substance, or compound as other4 wise required under this section; or

5 ‘‘(B) if the Secretary finds that the manu6 facturer has failed to demonstrate the safety of

7 the ingredient, constituent, substance, or com8 pound that was the subject of the assessment

9 under paragraph (2).

10 ‘‘(2) REVIEW OF ASSESSMENTS.—

11 ‘‘(A) GENERAL REVIEW.—Not later than

12 180 days after the receipt of a safety assess13 ment under subsection (b), the Secretary shall

14 review the findings contained in such assess15 ment and approve or disapprove of the safety of

16 the ingredient, constituents, substance, or com17 pound that was the subject of the assessment.

18 The Secretary may, for good cause, extend the

19 period for such review. The Secretary shall pro20 vide notice to the manufacturer of an action

21 under this subparagraph.

22 ‘‘(B) INACTION BY SECRETARY.—If the

23 Secretary fails to act with respect to an assess24 ment of an existing ingredient, constituent, sub25 stance, or additive during the period referred to
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1 in subparagraph (A), the manufacturer of the

2 tobacco product involved may continue to use

3 the ingredient, constituents, substance, or com4 pound involved until such time as the Secretary

5 makes a determination with respect to the as6 sessment.

7 ‘‘(d) RIGHT TO KNOW; FULL DISCLOSURE OF INGRE8 DIENTS TO THE PUBLIC.—

9 ‘‘(1) IN GENERAL.—Except as provided in para10 graph (3), a package of a tobacco product shall dis11 close all ingredients, constituents, substances, or

12 compounds contained in the product in accordance

13 with regulations promulgated under section 701(a)

14 by the Secretary.

15 ‘‘(2) DISCLOSURE OF PERCENTAGE OF DOMES16 TIC AND FOREIGN TOBACCO.—The regulations re17 ferred to in paragraph (1) shall require that the

18 package of a tobacco product disclose, with respect

19 to the tobacco contained in the product—

20 ‘‘(A) the percentage that is domestic to21 bacco; and

22 ‘‘(B) the percentage that is foreign to23 bacco.

24 ‘‘(3) HEALTH DISCLOSURE.—Notwithstanding

25 section 301(j), the Secretary may require the public
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1 disclosure of any ingredient, constituent, substance,

2 or compound contained in a tobacco product that re3 lates to a trade secret or other matter referred to in

4 section 1905 of title 18, United States Code, if the

5 Secretary determines that such disclosure will pro6 mote the public health.

7 ‘‘SEC. 575. TOBACCO PRODUCT WARNINGS, LABELING AND

8 PACKAGING.

9 ‘‘(a) CIGARETTE WARNINGS.—

10 ‘‘(1) IN GENERAL.—

11 ‘‘(A) PACKAGING.—It shall be unlawful for

12 any person to manufacture, package, or import

13 for sale or distribution any cigarettes the pack14 age of which fails to bear, in accordance with

15 the requirements of this subsection, one of the

16 following labels:

17 ‘‘WARNING: Cigarettes Are Addictive.

18 ‘‘WARNING: Tobacco Smoke Can Harm

19 Your Children.

20 ‘‘WARNING: Cigarettes Cause Fatal Lung

21 Disease.

22 ‘‘WARNING: Cigarettes Cause Cancer.

23 ‘‘WARNING: Cigarettes Cause Strokes

24 And Heart Disease.
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1 ‘‘WARNING: Smoking During Pregnancy

2 Can Harm Your Baby.

3 ‘‘WARNING: Smoking Can Kill You.

4 ‘‘WARNING: Tobacco Smoke Causes

5 Fatal Lung Disease In Nonsmokers.

6 ‘‘WARNING: Quitting Smoking Now

7 Greatly Reduces Serious Risks To Your

8 Health.

9 ‘‘(B) ADVERTISING.—It shall be unlawful

10 for any manufacturer, importer, distributor or

11 retailer of cigarettes to advertise or cause to be

12 advertised any cigarette unless the advertising

13 bears, in accordance with the requirements of

14 this subsection, one of the following labels:

15 ‘‘WARNING: Cigarettes Are Addictive.

16 ‘‘WARNING: Tobacco Smoke Can Harm

17 Your Children.

18 ‘‘WARNING: Cigarettes Cause Fatal Lung

19 Disease.

20 ‘‘WARNING: Cigarettes Cause Cancer.

21 ‘‘WARNING: Cigarettes Cause Strokes

22 And Heart Disease.

23 ‘‘WARNING: Smoking During Pregnancy

24 Can Harm Your Baby.

25 ‘‘WARNING: Smoking Can Kill You.
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1 ‘‘WARNING: Tobacco Smoke Causes

2 Fatal Lung Disease In Nonsmokers.

3 ‘‘WARNING: Quitting Smoking Now

4 Greatly Reduces Serious Risks To Your

5 Health.

6 ‘‘(C) ADDITIONAL WARNINGS.—Beginning

7 on the date that is 18 months after the date of

8 enactment of this subchapter, the Secretary

9 may substitute for, or require warnings in addi10 tion to, those otherwise required under subpara11 graphs (A) and (B) if the Secretary determines

12 that such warnings would be more effective in

13 deterring the use of cigarettes.

14 ‘‘(2) REQUIREMENTS FOR LABELING.—

15 ‘‘(A) LOCATION.—Each label statement re16 quired by subparagraph (A) of paragraph (1)

17 shall be located on the upper portion of the

18 front and rear panels of the cigarette package

19 (or carton) directly on the package underneath

20 the cellophane or other clear wrapping and oc21 cupy not less than 25 percent of such panels.

22 ‘‘(B) TYPE AND COLOR.—With respect to

23 each label statement required by subparagraph

24 (A) of paragraph (1), the phrase ‘WARNING’

25 shall appear in capital letters and the label
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1 statement shall be printed in 17 point type with

2 adjustments as determined appropriate by the

3 Secretary to reflect the length of the required

4 statement. All the letters in the label shall ap5 pear in conspicuous and legible type, in contrast

6 by typography, layout, or color with all other

7 printed material on the package, and be printed

8 in an alternating black-on-white and white-on9 black format as determined appropriate by the

10 Secretary.

11 ‘‘(C) EXCEPTION.—With respect to ciga12 rettes manufactured and distributed prior to

13 January 1, 2000, the provisions of subpara14 graph (A) shall not apply with respect to the

15 front panel in the case of a flip-top cigarette

16 package (offered for sale on June 1, 1997)

17 where the front portion of the flip-top does not

18 comprise at least 25 percent of the front panel.

19 In the case of such a package, the label state20 ment required by subparagraph (A) of para21 graph (1) shall occupy the entire front portion

22 of the flip-top.

23 ‘‘(3) REQUIREMENTS FOR ADVERTISING.—

24 ‘‘(A) LOCATION.—Each label statement re25 quired by subparagraph (B) of paragraph (1)
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1 shall appear in a conspicuous and prominent

2 format and location at the top of each adver3 tisement within the trim area and shall occupy

4 not less than 20 percent of the area of the ad5 vertisement involved.

6 ‘‘(B) TYPE, COLOR AND FORMAT.—

7 ‘‘(i) TYPE.—With respect to each

8 label statement required by subparagraph

9 (B) of paragraph (1), the phrase ‘WARN10 ING’ shall appear in capital letters and the

11 label statement shall be printed in the fol12 lowing types:

13 ‘‘(I) With respect to whole page

14 advertisements on broadsheet news15 paper—45 point type.

16 ‘‘(II) With respect to half page

17 advertisements on broadsheet news18 paper—39 point type.

19 ‘‘(III) With respect to whole page

20 advertisements on tabloid news21 paper—39 point type.

22 ‘‘(IV) With respect to half page

23 advertisements on tabloid news24 paper—27 point type.
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1 ‘‘(V) With respect to DPS maga2 zine advertisements—31.5 point type.

3 ‘‘(VI) With respect to whole page

4 magazine advertisements—31.5 point

5 type.

6 ‘‘(VII) With respect to 28cm x 3

7 column advertisements—22.5 point

8 type.

9 ‘‘(VIII) With respect to 20cm x 2

10 column advertisements—15 point

11 type.

12 Within the 20 percent requirement de13 scribed in subparagraph (A), the Secretary

14 may revise the required type sizes if the

15 Secretary determines that such revisions

16 will enhance public health protections.

17 ‘‘(ii) COLOR.—All the letters in the

18 label under this subparagraph shall appear

19 in conspicuous and legible type, in contrast

20 by typography, layout, or color with all

21 other printed material on the package, and

22 be printed in an alternating black-on-white

23 and white-on-black format as determined

24 appropriate by the Secretary.
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1 ‘‘(iii) FORMAT.—The label statements

2 under subparagraph (B) of paragraph (1)

3 shall be black when the background is

4 white and white when the background is

5 black, and shall be in the point size re6 quired under this subparagraph. The label

7 statements shall be enclosed by a rectangu8 lar border that is the same color as the let9 ters of the statements and that is the

10 width of the first down stroke of the cap11 ital ‘W’ of the word ‘WARNING’ in the

12 label statements.

13 ‘‘(C) LANGUAGE REQUIREMENT.—The

14 label statements required under paragraph

15 (1)(B) shall be in English, except that—

16 ‘‘(i) in the case of an advertisement

17 that appears in a newspaper, magazine, pe18 riodical or other publication that is not in

19 English, such statements shall appear in

20 the predominant language of the publica21 tion; or

22 ‘‘(ii) in the case of any other adver23 tisement that is not in English, such state24 ments shall appear in the same language
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1 as that principally used in the advertise2 ment.

3 ‘‘(4) ROTATION OF LABEL STATEMENTS.—

4 ‘‘(A) LABELING.—The label statements

5 specified in subparagraph (A) of paragraph (1)

6 shall be randomly displayed in each 12 month

7 period, in as equal a number of times as is pos8 sible on each brand of the product and be ran9 domly distributed in all areas of the United

10 States in which such product is marketed in ac11 cordance with a plan submitted by the manu12 facturer, importer, distributor or retailer and

13 approved by the Secretary.

14 ‘‘(B) ADVERTISING.—The label statements

15 specified in subparagraph (B) of paragraph (1)

16 shall be rotated quarterly in alternating se17 quence in advertisements for each such brand

18 of cigarettes in accordance with a plan submit19 ted by the manufacturer, importer, distributor

20 or retailer and approved by the Secretary.

21 ‘‘(C) APPROVAL OF PLANS.—The Sec22 retary shall review each plan submitted by a

23 manufacturer, importer, distributor or retailer

24 of cigarettes under this paragraph and approve

25 such plan if the plan will provide for the equal
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1 distribution and display on packaging and the

2 rotation required in advertising under this para3 graph and if such plan assures that all of the

4 labels required under subparagraphs (A) and

5 (B) will be displayed by the manufacturer, im6 porter, distributor or retailer at the same time.

7 ‘‘(b) SMOKELESS TOBACCO PRODUCTS.—

8 ‘‘(1) IN GENERAL.—

9 ‘‘(A) PACKAGING.—It shall be unlawful for

10 any person to manufacture, package, or import

11 for sale or distribution any smokeless tobacco

12 product the package of which fails to bear, in

13 accordance with the requirements of this sub14 section, one of the following labels:

15 ‘‘WARNING: This Product Can Cause

16 Mouth Cancer.

17 ‘‘WARNING: This Product Can Kill You.

18 ‘‘WARNING: This Product Can Cause

19 Gum Disease And Tooth Loss.

20 ‘‘WARNING: This Product Is Not A Safe

21 Alternative To Cigarettes.

22 ‘‘WARNING: This Product Contains Can23 cer-Causing Chemicals.

24 ‘‘WARNING: Smokeless Tobacco Is Ad25 dictive.
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1 ‘‘(B) ADVERTISING.—It shall be unlawful

2 for any manufacturer, importer, distributor or

3 retailer of smokeless tobacco products to adver4 tise or cause to be advertised any smokeless to5 bacco product unless the advertising bears, in

6 accordance with the requirements of this sub7 section, one of the following labels:

8 ‘‘WARNING: This Product Can Cause

9 Mouth Cancer.

10 ‘‘WARNING: This Product Can Kill You.

11 ‘‘WARNING: This Product Can Cause

12 Gum Disease And Tooth Loss.

13 ‘‘WARNING: This Product Is Not A Safe

14 Alternative To Cigarettes.

15 ‘‘WARNING: This Product Contains Can16 cer-Causing Chemicals.

17 ‘‘WARNING: Smokeless Tobacco Is Ad18 dictive.

19 ‘‘(C) ADDITIONAL WARNINGS.—Beginning

20 on the date that is 18 months after the date of

21 enactment of this subchapter, the Secretary

22 may substitute for, or require warnings in addi23 tion to, those otherwise required under subpara24 graphs (A) and (B) if the Secretary determines
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1 that such warnings would be more effective in

2 deterring the use of smokeless tobacco products.

3 ‘‘(2) REQUIREMENTS FOR LABELING.—

4 ‘‘(A) LOCATION.—Each label statement re5 quired by subparagraph (A) of paragraph (1)

6 shall be located on the 2 most prominent dis7 play panels of the product and occupy not less

8 than 25 percent of such panels.

9 ‘‘(B) TYPE AND COLOR.—With respect to

10 each label statement required by subparagraph

11 (A) of paragraph (1), the phrase ‘WARNING’

12 shall appear in capital letters and the label

13 statement shall be printed in 17 point type with

14 adjustments as determined appropriate by the

15 Secretary to reflect the length of the required

16 statement and the size of the package. All the

17 letters in the label shall appear in conspicuous

18 and legible type in contrast by typography, lay19 out, or color with all other printed material on

20 the package and be printed in an alternating

21 black-on-white and white-on-black format as de22 termined appropriate by the Secretary.

23 ‘‘(3) ADVERTISING AND ROTATION.—The provi24 sions of paragraph (3) and (4) of subsection (a)

25 shall apply to advertisements for smokeless tobacco
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1 products and the rotation of the label statements re2 quired under paragraph (1)(A) on such products.

3 ‘‘(c) OTHER TOBACCO PRODUCTS.—The Secretary

4 may prescribe such regulations as may be necessary to es5 tablish warning labels for other tobacco product packag6 ing, labeling and advertising.

7 ‘‘(d) CONSTRUCTION.—

8 ‘‘(1) IN GENERAL.—Nothing in this section

9 shall be construed to limit the ability of the Sec10 retary to change the text or layout of any of the

11 warning statements, or any of the labeling provi12 sions, under subsections (a) and (b) and other provi13 sions of this Act, if determined necessary by the Sec14 retary in order to make such statements or labels

15 larger, more prominent, more conspicuous, or more

16 effective.

17 ‘‘(2) UNFAIR ACTS.—Nothing in this section

18 (other than the requirements of subsections (a), (b)

19 and (c)) shall be construed to limit or restrict the

20 authority of the Federal Trade Commission with re21 spect to unfair or deceptive acts or practices in the

22 advertising of cigarettes or smokeless tobacco prod23 ucts.

24 ‘‘(e) LIMITED PREEMPTION.—
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1 ‘‘(1) STATE AND LOCAL ACTION.—No warning

2 label with respect to cigarettes or smokeless tobacco

3 products, or any other tobacco product for which

4 warning labels have been required under this section,

5 other than the warning labels required under this

6 Act, shall be required by any State or local statute

7 or regulation to be included on any package of ciga8 rettes or a smokeless tobacco product.

9 ‘‘(2) EFFECT ON LIABILITY LAW.—Nothing in

10 this section shall relieve any person from liability at

11 common law or under State statutory law to any

12 other person.

13 ‘‘(f) ELECTRONIC MEDIUM ADVERTISING.—It shall

14 be unlawful to advertise tobacco products on any medium

15 of electronic communications subject to the jurisdiction of

16 the Federal Communications Commission.

17 ‘‘SEC. 576. PRESERVATION OF STATE AND LOCAL AUTHOR18 ITY.

19 ‘‘Except as otherwise provided for in section 575(e),

20 nothing in this subchapter shall be construed as prohibit21 ing a State or locality from imposing requirements, prohi22 bitions, penalties or other measures to further the pur23 poses of this subchapter that are in addition to the re24 quirements, prohibitions, or penalties required under this

25 subchapter. State and local governments may impose addi-
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1 tional tobacco product control measures to further restrict

2 or limit the use of such products.

3 ‘‘SEC. 577. RESTRICTIONS ON YOUTH ACCESS TO TOBACCO

4 PRODUCTS.

5 ‘‘(a) IN GENERAL.—The Secretary shall restrict the

6 access of minors to tobacco products.

7 ‘‘(b) STATE LICENSING.—

8 ‘‘(1) IN GENERAL.—Except as provided in para9 graph (2), in order to receive any amounts under

10 section 111 of the Healthy Kids Act, a State shall

11 have in place a program that meets or exceeds (as

12 determined by the Secretary) the requirements of

13 the model State program described in paragraph (3)

14 under which a retailer would be required to obtain

15 a State or local license to sell or otherwise distribute

16 tobacco products directly to consumers in such

17 State.

18 ‘‘(2) START-UP PERIOD.—

19 ‘‘(A) IN GENERAL.—The Secretary may

20 waive the requirement of paragraph (1) for

21 such time as the Secretary determines is nec22 essary, after promulgation of the model pro23 gram described in paragraph (3), to permit the

24 legislature of a State to meet and enact laws to

25 comply with paragraph (1) and to permit the
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1 State to implement the program described in

2 paragraph (1).

3 ‘‘(B) ELIGIBILITY.—To be eligible for a

4 waiver under subparagraph (A), the Governor

5 of the State involved shall certify to the Sec6 retary in writing that the State intends to im7 plement a program that meets the requirements

8 of this section at the earliest possible oppor9 tunity. If, subsequent to such notification, the

10 Secretary determines that the State has failed

11 to implement such a program, the Secretary

12 may recover any funds distributed to the State

13 under section 111 of the Healthy Kids Act.

14 ‘‘(3) MODEL PROGRAM.—Not later than 12

15 months after the date of enactment of this sub16 chapter, the Secretary shall promulgate a model

17 State program. Such model State program shall at

18 a minimum—

19 ‘‘(A) provide for the collection of licensing

20 fees by the State or locality to defray the costs

21 of administering the program;

22 ‘‘(B) prohibit retailers from selling or oth23 erwise distributing tobacco products directly to

24 consumers in a State unless such retailers have
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1 in effect tobacco licenses issued or renewed in

2 accordance with State or local laws;

3 ‘‘(C) provide for the notification of every

4 person in the State who is engaged in the dis5 tribution at retail of tobacco products of the li6 cense requirement and of the date by which

7 such person shall have obtained a license in

8 order to continue to distribute such products;

9 ‘‘(D) prohibit licensed retailers from selling

10 or otherwise distributing tobacco products to

11 minors;

12 ‘‘(E) provide for penalties of up to $50,000

13 for each violation of the requirements under

14 such program relating to the sale or distribu15 tion of tobacco products without a license and

16 for appropriate penalties for other violations of

17 laws relating to youth access to tobacco prod18 ucts;

19 ‘‘(F) require retailers to comply with the

20 applicable requirements of this section and any

21 regulations relating to this section; and

22 ‘‘(G) provide for the suspension or revoca23 tion of a license in the case of a retailer that

24 repeatedly sells or distributes tobacco products
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1 to individuals in violation of subsection (a) or

2 State or local law.

3 ‘‘(c) PENALTIES.—The Secretary shall promulgate

4 regulations providing for the application of penalties for

5 the sale or distribution of tobacco products to minors in

6 violation of the requirements of subsection (a) that are

7 consistent with the following:

8 ‘‘(1) EMPLOYEES OF RETAILERS.—In the case

9 of an employee of a retailer who distributes a to10 bacco product to a minor in violation of subsection

11 (a), the regulations shall provide for the application

12 of a civil money penalty of—

13 ‘‘(A) $25 for the 1st violation;

14 ‘‘(B) $50 for the 2nd violation; and

15 ‘‘(C) $150 for the 3rd and subsequent vio16 lations.

17 ‘‘(2) MINORS.—In the case of a minor who pur18 chases or attempts to purchase a tobacco product in

19 violation of subsection (a) (other than a minor en20 gaged in an authorized sting or a law enforcement

21 operation), the regulations may provide for civil

22 money penalties, loss of driving privileges, or other

23 penalties.

24 ‘‘(3) RETAILERS.—In the case of a retailer who

25 distributes a tobacco product to a minor in violation
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1 of subsection (a), the regulations shall provide for

2 the application of a civil money penalty of at least—

3 ‘‘(A) $250 for the 1st violation;

4 ‘‘(B) $500 for the 2nd violation;

5 ‘‘(C) $1,500 for the 3rd violation;

6 ‘‘(D) $5,000 for the 4th violation; and

7 ‘‘(E) $10,000 for the 5th and subsequent

8 violations.

9 ‘‘(d) ENFORCEMENT.—

10 ‘‘(1) IN GENERAL.—The Secretary may enter

11 into agreements with, and provide grants to, States

12 to enforce this section. Any State that elects to en13 force the provisions of this section within the State

14 shall conduct sting operations and other compliance

15 checks and enforce State laws under this section

16 through the use of penalties described in subsection

17 (c) so as to ensure that minors are successful in pur18 chasing tobacco products less than 5 percent of the

19 time.

20 ‘‘(2) REQUIREMENTS.—The Secretary may by

21 regulation implement such requirements as the Sec22 retary determines necessary to ensure that any com23 pliance checks performed by the State under para24 graph (1) are accurate.
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1 ‘‘(3) VIOLATIONS.—If the Secretary determines

2 that the provisions of subsection (a) are being or

3 have been violated within a State, the Secretary

4 shall have the authority to enforce such provisions in

5 the State.

6 ‘‘(e) STATE COMPLIANCE.—Beginning with the 3rd

7 full calendar year following the date of enactment of this

8 subchapter, if, with respect to a State, the Secretary deter9 mines that minors are successful in purchasing tobacco

10 products more than 5 percent of the time, the Secretary

11 shall notify the State and reduce payments to the State

12 under section 111 of the Healthy Kids Act by 1 percent

13 for each percentage point by which the State is not in com14 pliance with this subsection.

15 ‘‘(f) PREEMPTION.—The provisions of this section

16 shall not preempt any provision of State or local law that

17 provides greater restrictions than those required in this

18 section.

19 ‘‘(g) FEDERAL LICENSING OF ENTITIES.—

20 ‘‘(1) IN GENERAL.—The Secretary, in consulta21 tion with the Secretary of Defense, Secretary of

22 State, and other appropriate Federal officials, shall

23 establish and implement a Federal tobacco licensing

24 program to be applied to entities that sell or distrib25 ute tobacco products—
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1 ‘‘(A) on any military installation (as de2 fined in section 2801(c)(2) of title X, United

3 States Code);

4 ‘‘(B) in any United States embassy;

5 ‘‘(C) in any facility owned and operated by

6 the Federal Government either in the United

7 States or in a foreign country;

8 ‘‘(D) in any duty-free shop located within

9 the United States; or

10 ‘‘(E) through any other Federal entity or

11 on any other Federal property as determined

12 appropriate by the Secretary.

13 ‘‘(2) REQUIREMENTS.—The program estab14 lished under paragraph (1) shall apply requirements

15 (including those for penalties, suspensions, and rev16 ocations) similar to those required to be imple17 mented by States under this section.

18 ‘‘(3) INDIAN TRIBES AND TRIBAL LANDS.—For

19 purposes of applying and enforcing the provisions of

20 this section to entities that sell or otherwise distrib21 ute tobacco products on Indian reservations (as de22 fined in section 403(9) of the Indian Child Protec23 tion and Family Violence Prevention Act (25 U.S.C.

24 3202(9))), an Indian tribe or tribal organization (as

25 such terms are defined in section 4 of the Indian
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1 Self Determination and Education Assistance Act

2 (25 U.S.C. 450b)) shall be treated as a State.

3 ‘‘SEC. 578. PUBLIC DISCLOSURE OF HEALTH RESEARCH.

4 ‘‘(a) SUBMISSION BY MANUFACTURERS.—Not later

5 than 3 months after the date of the enactment of this sub6 chapter and thereafter as required by the Secretary, each

7 manufacturer of a tobacco product shall submit to the Sec8 retary a copy of each document in the manufacturer’s pos9 session or control, directly or indirectly—

10 ‘‘(1) relating, referring, or pertaining to—

11 ‘‘(A) any health effects in humans or ani12 mals, including addiction, caused by the use of

13 tobacco products or components of tobacco

14 products;

15 ‘‘(B) the engineering, manipulation or con16 trol of nicotine in tobacco products;

17 ‘‘(C) the sale or marketing of tobacco

18 products;

19 ‘‘(D) any research involving safer tobacco

20 products; or

21 ‘‘(E) such other matters as the Secretary

22 may prescribe; or

23 ‘‘(2) produced, or ordered to be produced, by

24 the tobacco product manufacturer in any health-re25 lated civil or criminal proceeding, judicial or admin-
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1 istrative, that has been commenced by the United

2 States, an agency of the United States, a State or

3 local governmental entity, or any person, or on be4 half of such an entity or person, including attorney5 client and other documents produced or ordered to

6 be produced for in camera inspection.

7 ‘‘(b) ADDITIONAL INFORMATION.—For the purpose

8 of obtaining additional information relating to the matters

9 in subsection (a), the Secretary may hold hearings, require

10 testimony, the deposition of witnesses, the answering of

11 interrogatories, or enter into and inspect facilities.

12 ‘‘(c) DISCLOSURE BY THE SECRETARY.—Starting not

13 later than 6 months after the date of the enactment of

14 this subchapter, the Secretary shall begin to make avail15 able to the public, using the Internet and other means,

16 the documents submitted under subsection (a).

17 ‘‘(d) PROTECTION OF CERTAIN INFORMATION.—The

18 Secretary shall not disclose information obtained under

19 this section if such information is entitled to protection

20 as a trade secret or under the attorney-client privilege un21 less the Secretary determines that the disclosure of such

22 information is necessary to promote the public health.

23 ‘‘(e) ENFORCEMENT.—Notwithstanding any other

24 provision of law, manufacturers of tobacco products shall

25 provide any deposition, documents, or other information,
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1 answer any interrogatories, and allow any entry or inspec2 tion required pursuant to this section.

3 ‘‘(f) RULE OF CONSTRUCTION.—Nothing in this sec4 tion shall be construed to interfere in any way with the

5 discovery rights of courts or parties in civil or criminal

6 proceedings, administrative or judicial, involving tobacco

7 products, or the right of access to such documents under

8 any other provision of law.

9 ‘‘(g) DEFINITION.—In this section:

10 ‘‘(1) DOCUMENTS.—The term ‘documents’ in11 cludes originals and drafts of any kind of written or

12 graphic matter, regardless of the manner of produc13 tion or reproduction, of any kind of description,

14 whether sent or received or neither, and all copies

15 thereof that are different in any way from the origi16 nal (whether by interlineation, receipt stamp, nota17 tion, indication of copies sent or received or other18 wise) regardless of whether ‘confidential’, ‘privi19 leged’, or otherwise, including any paper, book, ac20 count, photograph, blueprint, drawing, agreement,

21 contract, memorandum, advertising material, letter,

22 telegram, object, report, record, transcript, study,

23 note, notation, working paper, intra-office commu24 nication, intra-department communication, inter25 department communication, chart, minute, index
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1 sheet, routing sheet, computer software, computer

2 data, delivery ticket, flow sheet, price list, quotation,

3 bulletin, circular, manual, summary, recording of

4 telephone or other conversation or of interviews, or

5 of conferences, or any other written, recorded, tran6 scribed, punched, taped, filmed, or graphic matter,

7 regardless of the manner produced or reproduced.

8 Such term shall also include any tape, recording,

9 videotape, computerization, or other electronic re10 cording, whether digital or analog or a combination

11 of the two.

12 ‘‘(2) MANUFACTURER OF A TOBACCO PROD13 UCT.—The term ‘manufacturer of a tobacco product’

14 also includes the Tobacco Institute, the Council for

15 Tobacco Research, the Smokeless Tobacco Council,

16 the Center for Indoor Air Research, or any other

17 trade association or entity that is primarily funded

18 by persons who manufacture a tobacco product.

19 ‘‘SEC. 579. CITIZEN SUITS.

20 ‘‘(a) AUTHORITY.—Any individual on his or her own

21 behalf may commence a civil action—

22 ‘‘(1) against any person who is alleged to be in

23 violation of this subchapter, in the district court for

24 the district in which the alleged violation occurred or

25 in which the defendant resides or is found; or
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1 ‘‘(2) against the Secretary or the Commissioner

2 where there is alleged a failure of the Secretary or

3 Commissioner to perform any act or duty required

4 under this subchapter, in a district court for the dis5 trict in which an alleged failure to perform occurred

6 or in the district court of the District of Columbia.

7 ‘‘(b) JURISDICTION.—The district courts of the

8 United States shall have jurisdiction, without regard to

9 the amount in controversy or the citizenship of the parties,

10 to enforce the provisions of this subchapter, or to order

11 the Secretary to perform such act or duty, as the case

12 may be, and to apply any appropriate civil penalties. The

13 district courts of the United States shall have jurisdiction

14 to compel action by an agency where such action is found

15 to be unreasonably delayed, except that such an action

16 may not be maintained unless the plaintiff has provided

17 the Secretary with a notice of the intent of the plaintiff

18 to file such action at least 90 days prior to the filing of

19 such action.

20 ‘‘(c) COSTS AND DAMAGES.—A court under sub21 section (b) may award costs of litigation, including reason22 able attorney’s fees, to any party where the court deter23 mines that such an award is appropriate. No damages of

24 any kind, whether compensatory or punitive, may be

25 awarded to the individual in actions described in sub-
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1 section (a)(2). Any damages awarded to the Federal Gov2 ernment shall be paid to the Treasury.

3 ‘‘SEC. 580. AGRICULTURAL PRODUCERS.

4 ‘‘The Secretary may not promulgate any regulation

5 under this subchapter that has the effect of placing regu6 latory burdens on tobacco producers (as such term is used

7 for purposes of the Agricultural Adjustment Act of 1938

8 (7 U.S.C. 1281 et seq.) and the Agricultural Act of 1949

9 (7 U.S.C. 1441 et seq.)) in excess of the regulatory bur10 dens generally placed on other agricultural commodity

11 producers. This section shall not be construed to limit the

12 regulatory requirements that may be imposed on produc13 ers who are also manufacturers under this Act.

14 ‘‘SEC. 581. AUTHORITY OF SECRETARY.

15 ‘‘To carry out this subchapter, the Secretary may

16 hold hearings, administer oaths, issue subpoenas, require

17 the testimony or deposition of witnesses, the production

18 of documents, or the answering of interrogatories, or,

19 upon presentation of the proper credentials, enter and in20 spect facilities. In the case of a refusal of a person to obey

21 a subpoena, any district court of the United States for

22 the district in which such person is found, resides or con23 ducts business, upon application by the Commissioner,

24 shall have jurisdiction to issue an order requiring such

25 person to appear and give testimony or to appear and
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1 produce evidence or both. The failure to obey such an

2 order of the court may be punished by the court as con3 tempt thereof, and by penalties of up to $25,000 per

4 day.’’.

5 SEC. 206. REPEALS.

6 The following provisions of law shall be repealed:

7 (1) The Federal Cigarette Labeling and Adver8 tising Act (15 U.S.C. 1331 et seq.).

9 (2) The Comprehensive Smokeless Tobacco

10 Health Education Act of 1986 (15 U.S.C. 4401 et

11 seq.).

12 SEC. 207. AUTHORITY OF FEDERAL TRADE COMMISSION.

13 Nothing in this title, or an amendment made by this

14 title, shall be construed to in any way reduce the jurisdic15 tion of the Federal Trade Commission over the advertising

16 of tobacco products.

17 TITLE III—YOUTH SMOKING RE18 DUCTION TARGETS AND IN19 CENTIVES TO REDUCE YOUTH

20 SMOKING RATES

21 SEC. 301. PURPOSE.

22 It is the purpose of this title to encourage the achieve23 ment of reductions in the proportion of underage consum24 ers of tobacco products through the imposition of addi25 tional financial deterrents relating to tobacco products if
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1 certain underage tobacco-use reduction targets are not

2 met.

3 SEC. 302. CHILD TOBACCO USE SURVEYS.

4 (a) ANNUAL PERFORMANCE SURVEY.—Not later

5 than 1 year after the date of the enactment of this Act

6 and annually thereafter the Secretary shall conduct a sur7 vey to determine, in accordance with subsection (b)—

8 (1) the percentage of all individuals under 18

9 years of age who used a tobacco product within the

10 past 30 days; and

11 (2) the percentage of all individuals under 18

12 years of age who identify each brand of tobacco

13 product as the usual brand smoked or used within

14 the past 30 days.

15 (b) EXCLUSION OF CERTAIN AGES.—The Secretary

16 shall exclude from the survey conducted under subsection

17 (a), children under the age of 12 years (or such other less18 er age as the Secretary may establish to strengthen the

19 validity of the survey).

20 (c) BASELINE LEVEL.—

21 (1) IN GENERAL.—The baseline level of the

22 child tobacco product use (referred to in this title as

23 the ‘‘baseline level’’) is the percentage of individuals

24 under 18 years of age determined to have used the
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1 tobacco product in the first annual performance sur2 vey for 1999.

3 (2) MANUFACTURERS.—The baseline level of

4 tobacco product use with respect to a manufacturer

5 is the percentage of individuals under 18 years of

6 age determined to have used any tobacco product of

7 such manufacturer in the first annual performance

8 survey for 1999.

9 (d) ADDITIONAL MEASURES.—In order to increase

10 the understanding of youth tobacco product use, the Sec11 retary may, for informational purposes only, add addi12 tional measures to the survey under subsection (a), con13 duct periodic or occasional surveys at other times, and

14 conduct surveys of other populations such as young adults.

15 The results of such surveys shall be made available to

16 manufacturers and the public to assist in efforts to reduce

17 youth tobacco use.

18 (e) ADMINISTRATION.—

19 (1) RESULTS.—The Secretary shall establish a

20 scientific advisory board to ensure that surveys con21 ducted under this section produce results that are

22 reasonably precise and valid.

23 (2) TECHNICAL ADJUSTMENTS.—The Secretary

24 may make technical changes in the manner in which

25 the surveys are conducted so long as adjustments
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1 are made to ensure that the results of the surveys

2 are comparable from year to year.

3 (3) PARTICIPATION IN SURVEY.—Notwithstand4 ing any other provision of law, the Secretary may

5 conduct a survey involving minors if the results of

6 such survey with respect to such minors are kept

7 confidential and not disclosed.

8 SEC. 303. REDUCTION IN UNDERAGE TOBACCO PRODUCT

9 USAGE.

10 (a) ANNUAL DETERMINATION.—The Secretary shall

11 annually determine, based on the annual performance sur12 veys under section 302, whether the required percentage

13 reduction (as described in subsection (b)) in the underage

14 use of tobacco products for a year has been achieved for

15 the year involved. Such determination shall be based on—

16 (1) with respect to cigarette products, the aver17 age annual percentage prevalence of the use of to18 bacco products by individuals who are under 18

19 years of age (as determined under section 302(a))

20 for the year involved as compared to the baseline

21 level for cigarette products (as determined under

22 section 302(c)); and

23 (2) with respect to smokeless tobacco products,

24 the average annual percentage prevalence of the use

25 of smokeless tobacco products by individuals who are
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1 under 18 years of age (as determined under section

2 302(a)) for the year involved as compared to the

3 baseline level for smokeless tobacco products (as de4 termined under section 302(c)).

5 (b) PERCENTAGE REDUCTION IN UNDERAGE USE OF

6 TOBACCO PRODUCTS.—For purposes of this section, the

7 required percentage reduction from the baseline level in

8 the percentage underage use of tobacco products with re9 spect to each tobacco product shall be as follows:

10 (1) CIGARETTES.—With respect to cigarettes—

11 (A) the percentage reduction in the per12 centage use of cigarettes shall be at least 20

13 percent for each of the calendar years 2001 and

14 2002;

15 (B) the percentage reduction in the per16 centage use of cigarettes shall be at least 40

17 percent for each of the calendar years 2003 and

18 2004;

19 (C) the percentage reduction in the per20 centage use of cigarettes shall be at least 55

21 percent for each of the calendar years 2005

22 through 2007; and

23 (D) the percentage reduction in the per24 centage use of cigarettes shall be at least 67
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1 percent for calendar year 2008 and each subse2 quent calendar year.

3 (2) SMOKELESS TOBACCO PRODUCTS.—With re4 spect to smokeless tobacco products—

5 (A) the percentage reduction in the per6 centage use of smokeless tobacco products shall

7 be at least 15 percent for each of the calendar

8 years 2001 and 2002;

9 (B) the percentage reduction in the per10 centage use of smokeless tobacco products shall

11 be at least 25 percent for each of the calendar

12 years 2003 and 2004;

13 (C) the percentage reduction in the per14 centage use of smokeless tobacco products shall

15 be at least 35 percent for each of the calendar

16 years 2005 and 2007; and

17 (D) the percentage reduction in the per18 centage use of smokeless tobacco products shall

19 be at least 45 percent for calendar year 2008

20 and each subsequent calendar year.

21 (c) APPLICATION TO MANUFACTURER.—With respect

22 to the average annual percentage prevalence of the use

23 of each manufacturer’s brands of tobacco product by indi24 viduals who are under 18 years of age, as determined on

25 the basis of the annual performance survey conducted
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1 under section 302(a), each manufacturer which manufac2 tured a brand or brands of tobacco product on or before

3 the date of the enactment of this Act shall reduce the per4 centage of children who use such manufacturer’s brand

5 or brands in accordance with the percentage reductions

6 required under subsection (b).

7 (d) REPORT.—Not later than December 31, 2005,

8 the Secretary shall prepare and submit to the appropriate

9 committees of Congress a report concerning the progress

10 made in achieving percentage reductions in the use of to11 bacco products together with the recommendations, if any,

12 of the Secretary for stronger reductions in calendar years

13 after 2008.

14 SEC. 304. NONCOMPLIANCE.

15 (a) INDUSTRY-WIDE PENALTY.—If, with respect to

16 a year, the Secretary determines under section 303(a) that

17 the required percentage reduction for either cigarettes or

18 smokeless tobacco products has not been achieved as re19 quired under section 303(b), the Secretary shall impose

20 an industry-wide penalty on the manufacturers of such

21 product in an amount that is equal to $.10 cents for each

22 unit of the tobacco product involved that is manufactured

23 and distributed for consumer use in the year following the

24 year in which the noncompliance occurs.

25 (b) MANUFACTURER-SPECIFIC PENALTY.—
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1 (1) IN GENERAL.—With respect to each manu2 facturer for a year, if the Secretary determines

3 under section 303(a) that the required percentage

4 reduction for either cigarettes or smokeless tobacco

5 products have not been achieved by such manufac6 turer as required under section 303(b), the Sec7 retary shall impose a penalty on such manufacturer

8 in an amount equal to

9 (A) $.10 cents if the noncompliance factor

10 exceeds 0 but does not exceed 10;

11 (B) $.20 cents if the noncompliance factor

12 exceeds 10 but does not exceed 15;

13 (C) $.30 cents if the noncompliance factor

14 exceeds 15 but does not exceed 20; and

15 (D) $.40 cents if the noncompliance factor

16 exceeds 20;

17 for each unit of a tobacco product that is manufac18 tured and distributed for consumer use by such

19 manufacturer in the year following the year for

20 which the determination is made.

21 (2) NONCOMPLIANCE FACTOR.—The noncompli22 ance factor of a manufacturer for a year shall be

23 equal to the percentage reduction required under

24 section 303(b) for the year less the actual percent-
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1 age reduction for the year (as determined under

2 paragraph (3)).

3 (3) ACTUAL PERCENTAGE REDUCTION.—The

4 actual percentage reduction of a manufacturer shall

5 be equal to 1 less the ratio of—

6 (A) the percentage of individuals under 18

7 years of age who have been determined to use

8 the manufacturer’s products (as determined

9 under section 302(a)) for the year involved; and

10 (B) the baseline level for the manufacturer

11 (as determined under section 302(c));

12 multiplied by 100.

13 (c) DE MINIMIS RULES.—

14 (1) EXEMPTION.—The Secretary shall not im15 pose a penalty on a manufacturer under subsection

16 (b) if the Secretary determines that the tobacco

17 products manufactured by such manufacturer are

18 used by less than 0.5 percent of the total number

19 of children determined to have used such tobacco

20 products for the year involved.

21 (2) PENALTY.—If the Secretary determines

22 that—

23 (A) either—

24 (i) the tobacco products manufactured

25 by a manufacturer under the baseline sur-
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1 vey conducted under section 302(c), are

2 used by less than 0.5 percent of the total

3 number of children determined to have

4 used such tobacco products for the year in5 volved; or

6 (ii) the manufacturer was not manu7 facturing tobacco products in the year the

8 baseline survey was conducted; and

9 (B) under an annual survey conducted

10 under section 302(a) for the year involved, the

11 tobacco products manufactured by such manu12 facturer are used by more than 0.5 percent of

13 the total number of children determined to have

14 used such tobacco products for the year in15 volved;

16 the Secretary shall impose a penalty on such manu17 facturer in an amount equal to $.40 cents for each

18 unit of the tobacco product involved that is manufac19 tured and distributed for consumer use in the year

20 following the year for which the determination is

21 made.

22 (d) NONCOMPLIANCE FEES FOR CONSECUTIVE VIO23 LATIONS.—

24 (1) IN GENERAL.—If a manufacturer of a to25 bacco product, the cigarette industry, or the smoke-
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1 less tobacco industry fails to comply with the reduc2 tions required under this title in 3 or 4 consecutive

3 years, the noncompliance fee that is required to be

4 paid by the manufacturer, cigarette industry, or

5 smokeless tobacco industry, whichever is applicable,

6 under this section for each unit of tobacco products

7 manufactured by such manufacturer or industry

8 which is distributed for consumer use in the year fol9 lowing the year in which the noncompliance occurs,

10 shall be the amount determined under subsection (b)

11 for the year multiplied by 2.

12 (2) ADDITIONAL NONCOMPLIANCE.—If a manu13 facturer or industry described in paragraph (1) fails

14 to comply with the reductions required under this

15 title—

16 (A) in 5 or 6 consecutive years, the non17 compliance fee described in such paragraph

18 shall be the amount determined under sub19 section (b) for the year multiplied by 3; and

20 (B) in 7 or more consecutive years, the

21 noncompliance fee described in such paragraph

22 shall be the amount determined under sub23 section (b) for the year multiplied by 4.

24 (e) PROHIBITION ON SINGLE-PACK SALES IN CASES

25 OF REPEATED NONCOMPLIANCE.—Not later than 2 years
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1 after the date of enactment of this Act, the Secretary shall

2 establish regulations to prohibit the sale of single packs

3 of a manufacturer’s tobacco products in cases of repeated

4 noncompliance with the reductions required under section

5 303(b). Such regulations shall require that, if a manufac6 turer fails to comply with such reductions in 4 or more

7 consecutive years, the manufacturer’s tobacco products

8 may be sold in the following year only in packages contain9 ing not less than 10 units of the product per package (200

10 cigarettes per package in the case of cigarettes, and a cor11 responding package size for other tobacco products).

12 (f) REQUIRED GENERIC PACKAGING IN SEVERE

13 CASES OF REPEATED NONCOMPLIANCE.—Not later than

14 2 years after the date of enactment of this Act, the Sec15 retary shall establish regulations to require units and

16 packages of a manufacturer’s tobacco products to have ge17 neric packaging in severe cases of repeated noncompliance

18 with the reductions required under section 303(b). Such

19 regulations shall require that, if a manufacturer fails to

20 comply with such reductions in 6 or more consecutive

21 years, the manufacturer’s tobacco products may be sold

22 in the following year only in units and packages whose

23 packaging contains no external images, logos, or text

24 (other than any required labels), except that the brand

25 name and the identifier ‘tobacco’ may appear on the pack-
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1 aging in block lettering in black type on a white back2 ground.

3 (g) PAYMENT.—The penalty to be paid by a manufac4 turer under this section shall be paid on a quarterly basis,

5 with payments due not later than 30 days after the end

6 of each calendar quarter.

7 (h) PROCEDURES.—In assessing penalties under this

8 section, the Secretary shall have in place procedures to

9 take into account the effect that the margin of error of

10 the annual survey may have on the amounts of penalties

11 assessed to manufacturers.

12 (i) OTHER PRODUCTS.—The Secretary may promul13 gate regulations requiring reductions in the use of other

14 tobacco products by individuals under 18 years of age.

15 Such regulations shall contain provisions for the applica16 tion of monetary penalties for the failure of manufacturers

17 to achieve such reductions.

18 SEC. 305. RULEMAKING PROCEDURES.

19 (a) DOCKET.—Not later than the date of the proposal

20 of any regulation under this title, the Secretary shall es21 tablish a rulemaking docket for action on such regulation

22 (referred to in this section as a ‘‘rule’’). Whenever a rule

23 applies only within a particular State, a second (identical)

24 docket shall be established in the appropriate regional of25 fice of the Department of Health and Human Services.
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1 (b) PUBLICATION.—In the case of any rule to which

2 this section applies, notice of proposed rulemaking shall

3 be published in the Federal Register, as provided under

4 section 553(b) of title 5, United States Code, shall be ac5 companied by a statement of its basis and purpose and

6 shall specify the period available for public comment (here7 inafter referred to as the ‘‘comment period’’). The notice

8 of proposed rulemaking shall also state the docket num9 ber, the location or locations of the docket, and the times

10 it will be open to public inspection. The statement of basis

11 and purpose shall include a summary of—

12 (1) the factual data on which the proposed rule

13 is based;

14 (2) the methodology used in obtaining the data

15 and in analyzing the data; and

16 (3) the major legal interpretations and policy

17 considerations underlying the proposed rule.

18 (c) PUBLIC COMMENT.—

19 (1) PUBLIC INSPECTION.—The rulemaking

20 docket required under subsection (a) shall be open

21 for inspection by the public at reasonable times spec22 ified in the notice of proposed rulemaking. Any per23 son may copy documents contained in the docket.

24 The Secretary shall provide copying facilities which

25 may be used at the expense of the person seeking
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1 copies, but the Secretary may waive or reduce such

2 expenses in such instances as the public interest re3 quires. Any person may request copies by mail if the

4 person pays the expenses, including personnel costs

5 to do the copying.

6 (2) COMMENTS AND OTHER MATERIAL IN

7 DOCKET.—

8 (A) COMMENTS.—Promptly upon receipt

9 by the Secretary, all written comments and doc10 umentary information on the proposed rule re11 ceived from any person for inclusion in the

12 docket during the comment period shall be

13 placed in the docket. The transcript of public

14 hearings, if any, on the proposed rule shall also

15 be included in the docket promptly upon receipt

16 from the person who transcribed such hearings.

17 All documents which become available after the

18 proposed rule has been published and which the

19 Secretary determines are of central relevance to

20 the rulemaking shall be placed in the docket as

21 soon as possible after their availability.

22 (B) REQUIREMENT TO PLACE IN DOCK23 ET.—The drafts of proposed rules submitted by

24 the Secretary to the Office of Management and

25 Budget for any interagency review process prior
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1 to the proposal of any such rule, all documents

2 accompanying such drafts, and all written com3 ments thereon by other agencies and all written

4 responses to such written comments by the Sec5 retary shall be placed in the docket no later

6 than the date of proposal of the rule. The

7 drafts of the final rule submitted for such re8 view process prior to promulgation and all such

9 written comments thereon, all documents ac10 companying such drafts, and written responses

11 thereto shall be placed in the docket no later

12 than the date of promulgation.

13 (3) LIMITATION.—No objection may be submitted

14 with respect to a rule under this section on a date that

15 is more than 90 days after the date on which the rule

16 is published under subsection (b).

17 (d) OPPORTUNITY FOR ORAL PRESENTATION.—In

18 promulgating a rule to which this section applies—

19 (1) the Secretary shall allow any person to sub20 mit written comments, data, or documentary infor21 mation;

22 (2) the Secretary shall give interested persons

23 an opportunity for the oral presentation of data,

24 views, or arguments, in addition to an opportunity

25 to make written submissions;
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1 (3) a transcript shall be kept of any oral pres2 entation; and

3 (4) the Secretary shall keep the record of such

4 proceeding open for 30 days after completion of the

5 proceeding to provide an opportunity for submission

6 of rebuttal and supplementary information.

7 (e) MATERIAL TO ACCOMPANY RULE.—

8 (1) IN GENERAL.—The promulgated rule shall

9 be accompanied by—

10 (A) a statement of basis and purpose like

11 that referred to in subsection (b) with respect

12 to a proposed rule; and

13 (B) an explanation of the reasons for any

14 major changes in the promulgated rule from the

15 proposed rule.

16 (2) RESPONSES.—The promulgated rule shall

17 also be accompanied by a response to each of the

18 significant comments, criticisms, and new data sub19 mitted in written or oral presentations during the

20 comment period.

21 (3) LIMITATION.—The promulgated rule may

22 not be based (in part or whole) on any information

23 or data which has not been placed in the docket as

24 of the date of such promulgation.

25 (f) JUDICIAL REVIEW.—
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1 (1) IN GENERAL.—The record for judicial re2 view shall consist exclusively of the material referred

3 to in subsection (b), subparagraph (A) of subsection

4 (c)(2), and paragraphs (1) and (2) of subsection (e).

5 (2) LIMITATIONS.—Only an objection to a rule

6 or procedure which was raised with reasonable speci7 ficity during the period for public comment (includ8 ing any public hearing) may be raised during judi9 cial review. If the person raising an objection can

10 demonstrate to the Secretary that it was impractica11 ble to raise such objection within such time or if the

12 grounds for such objection arose after the period for

13 public comment (but within the time specified for ju14 dicial review) and if such objection is of central rel15 evance to the outcome of the rule, the Secretary

16 shall convene a proceeding for reconsideration of the

17 rule and provide the same procedural rights as

18 would have been afforded had the information been

19 available at the time the rule was proposed. If the

20 Secretary refuses to convene such a proceeding, such

21 person may seek review of such refusal in the United

22 States court of appeals for the appropriate circuit.

23 Such reconsideration shall not postpone the effec24 tiveness of the rule. The effectiveness of the rule

25 may be stayed during such reconsideration, however,
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1 by the Secretary or the court for a period not to ex2 ceed 3 months.

3 (g) JURISDICTION.—The sole forum for challenging

4 procedural determinations made by the Secretary under

5 this section shall be in the United States court of appeals

6 for the appropriate circuit at the time of the substantive

7 review of the rule. No interlocutory appeals shall be per8 mitted with respect to such procedural determinations. In

9 reviewing alleged procedural errors, the court may invali10 date the rule only if the errors were so serious and related

11 to matters of such central relevance to the rule that there

12 is a substantial likelihood that the rule would have been

13 significantly changed if such errors had not been made.

14 (h) REVERSAL OF SECRETARY’S ACTION.—In the

15 case of review of any action of the Secretary to which this

16 section applies, the court may reverse any such action

17 found to be—

18 (1) arbitrary, capricious, an abuse of discretion,

19 or otherwise not in accordance with law;

20 (2) contrary to constitutional right, power,

21 privilege, or immunity;

22 (3) in excess of statutory jurisdiction, authority,

23 or limitations, or short of statutory right; or

24 (4) without observance of procedure required by

25 law, if—
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1 (A) such failure to observe such procedure

2 is arbitrary or capricious;

3 (B) the requirement of subsection (f)(2)

4 has been met; and

5 (C) the condition of the last sentence of

6 subsection (g) is met.

7 (i) DEADLINES.—Each statutory deadline for pro8 mulgation of rules to which this section applies which re9 quires promulgation less than 6 months after date of pro10 posal may be extended to not more than 6 months after

11 date of proposal by the Secretary upon a determination

12 that such extension is necessary to afford the public, and

13 the agency, adequate opportunity to carry out the pur14 poses of this section.

15 (j) EFFECTIVE DATE.—The requirements of this sec16 tion shall take effect with respect to any rule the proposal

17 of which occurs after 90 days after the date of enactment

18 of this Act.

19 (k) RULE OF CONSTRUCTION.—Nothing in this Act

20 shall be construed to authorize judicial review of regula21 tions or orders of the Secretary under this Act, except as

22 otherwise provided for in this title.

23 (l) NO STAY.—In any action respecting the promul24 gation of regulations under this title or the administration

25 or enforcement of this title no court shall grant any stay,
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1 injunctive, or similar relief before final judgment by such

2 court in such action.

3 (m) PUBLIC PARTICIPATION.—It is the intent of

4 Congress that, consistent with the policy of the Adminis5 trative Procedures Act, the Secretary in promulgating any

6 regulation under this title, including a regulation subject

7 to a deadline, shall ensure a reasonable period for public

8 participation of at least 30 days, except as otherwise ex9 pressly provided for.

10 SEC. 306. MISCELLANEOUS PROVISIONS.

11 (a) JUDICIAL REVIEW.—A manufacturer of tobacco

12 products may seek judicial review of any action under this

13 title only after a penalty has been assessed and paid by

14 the manufacturer to the Department of the Treasury and

15 only in the United States District Court for the District

16 of Columbia. In an action by a manufacturer seeking judi17 cial review of an annual performance survey, the manufac18 turer may prevail—

19 (1) only if the manufacturer shows that the re20 sults of the performance survey were arbitrary and

21 capricious; and

22 (2) only to the extent that the manufacturer

23 shows that it would have been required to pay a sub24 stantially lesser penalty if the results of the perform25 ance survey were not arbitrary and capricious.
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1 (b) PROHIBITION.—No stay or other injunctive relief

2 may be granted by the Secretary or any court that has

3 the effect of enjoining the imposition and collection of pen4 alties to be applied under this section.

5 (c) DEFINITIONS.—As used in this title:

6 (1) CHILD.—The term ‘‘child’’ means, except as

7 provided in section 302(b), an individual who is

8 under the age of 18.

9 (2) MANUFACTURER.—The term ‘‘manufac10 turer’’ includes any person who imports a finished

11 tobacco product.

12 TITLE IV—TOBACCO TRANSI13 TION ASSISTANCE TRUST

14 FUND

15 SEC. 401. TOBACCO TRANSITION ASSISTANCE TRUST FUND.

16 (a) ESTABLISHMENT.—There is established in the

17 Treasury of the United States a trust fund to be known

18 as the ‘‘Tobacco Transition Trust Fund’’, consisting of

19 such amounts as may be appropriated or credited to the

20 Trust Fund.

21 (b) TRANSFERS TO TRUST FUND.—There are appro22 priated and transferred to the Trust Fund for each fiscal

23 year amounts made available to the Trust Fund as pro24 vided for in section 101(d)(7).

25 (c) REPAYABLE ADVANCES.—
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1 (1) AUTHORIZATION.—There are authorized to

2 be appropriated to the Trust Fund, as repayable ad3 vances, such sums as may from time to time be nec4 essary to make expenditures under subsection (d).

5 (2) REPAYMENT WITH INTEREST.—Repayable

6 advances made to the Trust Fund shall be repaid,

7 and interest on the advances shall be paid, to the

8 general fund of the Treasury when the Secretary of

9 the Treasury determines that moneys are available

10 in the Trust Fund to make the payments.

11 (3) RATE OF INTEREST.—Interest on an ad12 vance made under this subsection shall be at a rate

13 determined by the Secretary of Treasury (as of the

14 close of the calendar month preceding the month in

15 which the advance is made) that is equal to the cur16 rent average market yield on outstanding marketable

17 obligations of the United States with remaining pe18 riod to maturity comparable to the anticipated pe19 riod during which the advance will be outstanding.

20 (d) EXPENDITURES FROM TRUST FUND.—

21 (1) IN GENERAL.—Subject to paragraph (2),

22 amounts in the Trust Fund shall be available for

23 making expenditures to provide transition assistance

24 to tobacco producers and tobacco-growing commu25 nities to adjust to reduced demand for tobacco, in-
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1 cluding economic development assistance, assistance

2 through retraining of tobacco producers and tobacco

3 factory workers, or scholarships for tobacco produc4 ers.

5 (2) IMPLEMENTATION.—Amounts in the Trust

6 Fund shall be available for making expenditures de7 scribed in paragraph (1) only if a law is enacted not

8 later than January 1, 2000, that specifically pre9 scribes authorized uses of the Trust Fund.

10 (e) BUDGETARY TREATMENT.—This section con11 stitutes budget authority in advance of appropriations

12 Acts.

13 (f) TERMINATION OF EFFECTIVENESS.—The author14 ity provided by this section terminates effective January

15 1, 2000, unless a law is enacted not later than January

16 1, 2000, that specifically prescribes authorized uses of the

17 Trust Fund.

18 TITLE V—STANDARDS TO RE19 DUCE INVOLUNTARY EXPO20 SURE TO TOBACCO SMOKE

21 SEC. 501. STANDARDS TO REDUCE INVOLUNTARY EXPO22 SURE TO TOBACCO SMOKE.

23 The Occupational Safety and Health Act of 1970 (29

24 U.S.C. 651 et seq.) is amended by adding at the end the

25 following:
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1 ‘‘SEC. 35. STANDARDS TO REDUCE INVOLUNTARY EXPO2 SURE TO TOBACCO SMOKE.

3 ‘‘(a) DEFINITIONS.—In this section—

4 ‘‘(1) PUBLIC FACILITY.—

5 ‘‘(A) IN GENERAL.—The term ‘public facil6 ity’ means any workplace covered by this Act

7 and any enclosed structure regularly entered by

8 10 or more individuals at least 1 day per week,

9 including any such building owned by or leased

10 to a Federal, State, or local government entity

11 (including Congress). Such term shall not in12 clude any building or portion thereof while used

13 as a private residence.

14 ‘‘(B) EXCLUSIONS.—The term ‘public fa15 cility’ does not include a portion of a building

16 which is used as a bar, a facility in which a re17 tailer engages primarily in the business of sell18 ing tobacco products, a hotel guest room that is

19 designated as a smoking room, a private club

20 while in use for social or fraternal activities

21 that are not open to the public, a casino, a

22 bingo parlor, a restaurant with an indoor seat23 ing capacity of fewer than 50 individuals that

24 is not a fast food restaurant, or a prison.

25 ‘‘(C) BAR.—The term ‘‘bar’’ means any in26 door area that is open to the general public and
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1 that is devoted to the sale and service of alco2 holic beverages for on-premises consumption

3 where the service of food is only incidental to

4 the consumption of such beverages. Service of

5 food shall be considered incidental if the food

6 service generates less than 50 percent of the

7 total annual gross food and liquor sales of the

8 establishment.

9 ‘‘(D) FAST FOOD RESTAURANT.—As used

10 in subparagraph (B), the term ‘fast food res11 taurant’ means any restaurant or chain of res12 taurants in which employees primarily distrib13 ute food through a customer pick-up (either at

14 a counter or drive-through window). The Ad15 ministrator of the Occupational Safety and

16 Health Administration may promulgate regula17 tions to clarify this subparagraph to ensure

18 that the intended inclusion of workers in estab19 lishments catering largely to individuals under

20 18 years of age is achieved.

21 ‘‘(2) RESPONSIBLE ENTITY.—The term ‘respon22 sible entity’ means, with respect to any public facil23 ity, the owner or operator of such facility except

24 that, in the case of any such facility or portion

25 thereof which is leased, such term means the lessee.
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1 ‘‘(b) SMOKE-FREE ENVIRONMENT POLICY.—

2 ‘‘(1) POLICY REQUIRED.—In order to protect

3 children and adults from cancer, respiratory disease,

4 heart disease, and other adverse health effects asso5 ciated with breathing environmental tobacco smoke,

6 the responsible entity for each public facility shall

7 adopt and implement at such facility a smoke-free

8 environment policy which meets the requirements of

9 paragraph (2) or (4).

10 ‘‘(2) ELEMENTS OF POLICY.—

11 ‘‘(A) IN GENERAL.—Each smoke-free envi12 ronment policy for a public facility shall—

13 ‘‘(i) prohibit the smoking of ciga14 rettes, cigars, and pipes, and any other

15 combustion of tobacco within the facility

16 and on facility property within the imme17 diate vicinity of the entrance to the facility

18 or any air intake vent (including open win19 dows and doors); and

20 ‘‘(ii) post a clear and prominent no21 tice of the smoking prohibition in appro22 priate and visible locations at the public fa23 cility.

24 ‘‘(B) EXCEPTION.—The smoke-free envi25 ronment policy for a public facility may provide
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1 an exception to the prohibition specified in sub2 paragraph (A) for 1 or more specially des3 ignated smoking areas within a public facility if

4 such area or areas meet the requirements of

5 paragraph (3).

6 ‘‘(3) SPECIALLY DESIGNATED SMOKING

7 AREAS.—A specially designated smoking area meets

8 the requirements of this subsection if—

9 ‘‘(A) the area is ventilated in accordance

10 with specifications promulgated by the Sec11 retary of Labor, in consultation with the Ad12 ministrator of the Environmental Protection

13 Agency, that ensure that air from the area is

14 directly exhausted to the outside of the building

15 and does not recirculate or drift to other areas

16 within the public facility;

17 ‘‘(B) the area is maintained at negative

18 pressure, as compared to adjacent nonsmoking

19 areas, as determined under regulations promul20 gated by the Secretary of Labor, in consultation

21 with the Administrator of the Environmental

22 Protection Agency; and

23 ‘‘(C) nonsmoking individuals are fully ad24 vised that the area is a smoking area and such

25 individuals do not have to enter the area for
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1 any purpose while smoking is occurring in such

2 area, and for an additional period that allows

3 for at least 3 air exchanges to occur in the

4 room.

5 Cleaning and maintenance work shall be conducted

6 in such area only while no smoking is occurring in

7 the area, following an additional period that allows

8 for at least 3 air exchanges to occur in the room.

9 ‘‘(4) SPECIAL RULES.—

10 ‘‘(A) SCHOOLS AND OTHER FACILITIES

11 SERVING CHILDREN.—

12 ‘‘(i) IN GENERAL.—With respect to a

13 facility described in clause (ii), the respon14 sible entity for the facility shall—

15 ‘‘(I) adopt and implement at

16 such facility a smoke-free environment

17 policy that prohibits the smoking of

18 cigarettes, cigars, and pipes, and any

19 other combustion of tobacco within

20 the facility and on facility property;

21 ‘‘(II) adopt and implement at

22 such facility a smoke-free environment

23 policy that prohibits the use of smoke24 less tobacco products within the facil25 ity and on facility property; and
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1 ‘‘(III) post a clear and prominent

2 notice of the smoking and smokeless

3 tobacco prohibition in appropriate and

4 visible locations at the public facility.

5 ‘‘(ii) FACILITY.—A facility described

6 in this clause is—

7 ‘‘(I) an elementary or secondary

8 school (as such term is defined in sec9 tion 14101 of the Elementary and

10 Secondary Education Act of 1965 (20

11 U.S.C. 8801);

12 ‘‘(II) any facility at which a

13 Head Start program or project is

14 being carried out under the Head

15 Start Act (42 U.S.C. 9831 et seq.);

16 ‘‘(III) any facility at which a li17 censed or certified child care provider

18 provides child care services; and

19 ‘‘(IV) any recreation or other fa20 cility maintained primarily to provide

21 services to children as determined by

22 the Secretary of Labor.

23 ‘‘(B) PUBLIC TRANSPORTATION.—

24 ‘‘(i) IN GENERAL.—With respect to

25 any responsible entity which operates con-
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1 veyances of public transportation (includ2 ing bus, rail, aircraft, boat, or any other

3 conveyance determined appropriate by the

4 Secretary of Labor), the responsible entity

5 shall—

6 ‘‘(I) adopt and implement on

7 such conveyances a smoke-free envi8 ronment policy that prohibits the

9 smoking of cigarettes, cigars, and

10 pipes, and any other combustion of to11 bacco within the conveyance and on

12 property affiliated with the convey13 ance; and

14 ‘‘(II) post a clear and prominent

15 notice of the smoking prohibition in

16 appropriate and visible locations on

17 the conveyance.

18 ‘‘(ii) RAIL TRANSPORTATION.—The

19 smoke-free environment policy for a re20 sponsible entity that operates a rail carrier

21 providing rail commuter service may pro22 vide an exception to the prohibition speci23 fied in clause (i) with respect to such serv24 ice for 1 or more specially designated
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1 smoking cars if such cars meet the require2 ments of paragraph (3).

3 ‘‘(c) ENFORCEMENT.—To be eligible to receive funds

4 under the Healthy Kids Act, a State shall make a dem5 onstration to the Secretary that the State is enforcing this

6 section within the State. Such laws or procedures shall

7 permit aggrieved individuals to enforce this section

8 through administrative and judicial means.

9 ‘‘(d) PREEMPTION.—Notwithstanding section 18,

10 nothing in this section shall preempt or otherwise affect

11 any other existing or future Federal, State or local law

12 which provides protection from health hazards from envi13 ronmental tobacco smoke that are as least as stringent

14 as those provided for in this section.

15 ‘‘(e) REGULATIONS.—Not later than 12 months after

16 the date of enactment of this section, the Secretary of

17 Labor shall promulgate such regulations as the Secretary

18 deems necessary to carry out this section.

19 ‘‘(f) EFFECTIVE DATE.—The provisions of this sec20 tion shall take effect on the date that is 1 year after the

21 date of enactment of this section.’’.
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1 TITLE VI—PUBLIC HEALTH AND

2 OTHER PROGRAMS

3 Subtitle A—Research Programs

4 SEC. 601. TOBACCO-RELATED RESEARCH.

5 (a) IN GENERAL.—The Secretary shall establish a

6 program to encourage and promote (through grants, con7 tracts, or otherwise) expanded research, investigations, ex8 periments and studies, concerning—

9 (1) the relationship between the use of tobacco

10 products and cancer, cardiovascular diseases, lung

11 diseases and other diseases;

12 (2) the effects of tobacco products, ingredients

13 of tobacco products, and tobacco smoke on the

14 human body and methods of reducing any negative

15 effects, including the development of non-addictive,

16 reduced risk tobacco products;

17 (3) the addictive effects of nicotine and how

18 such effects differ with respect to different individ19 uals;

20 (4) the prevention and cure of diseases and ill21 nesses most associated with the use of tobacco prod22 ucts;

23 (5) differentials between brands of tobacco

24 products with respect to health effects or addiction;
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1 (6) the effectiveness of drugs and devices in as2 sisting individuals to stop using tobacco products;

3 and

4 (7) the relationship between the use of tobacco

5 products and cancer, particularly among minorities.

6 (b) ELIGIBILITY.—To be eligible to receive a grant,

7 contract, or other assistance under this section an entity

8 or individual shall prepare and submit to the Secretary

9 an application at such time, in such manner, and contain10 ing such information as the Secretary may require.

11 (c) USE OF FUNDS.—Amounts received by an indi12 vidual or entity under this section shall be used to carry

13 out activities under the program established under sub14 section (a).

15 (d) ADDITIONAL REQUIREMENTS.—To be eligible to

16 receive a grant, contract, or other assistance under this

17 section an entity or individual shall provide assurances to

18 the Secretary that—

19 (1) any research to be conducted under the

20 grant or contract will be generally consistent with

21 the requirements applicable to research conducted

22 under the authority of the National Institutes of

23 Health;

24 (2) adequate records will be maintained with re25 spect to such assistance; and
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1 (3) amounts provided to the individual or entity

2 will be subject to independent audit.

3 (e) EFFECT ON MINORITIES AND WOMEN.—The pro4 gram established under subsection (a) shall be conducted

5 in a manner that ensures that research will be conducted

6 to investigate the different effects of tobacco use on mi7 norities and women in proportion to their prevalence in

8 the smoking population.

9 (f) DISSEMINATION OF RESULTS.—The Secretary

10 shall establish procedures for the dissemination of the re11 sults of the research conducted under this section.

12 (g) FUNDING.—There shall be made available to

13 carry out this section an amount equal to the amount

14 made available under section 121(c)(1)(D) for a fiscal

15 year.

16 SEC. 602. RESEARCH RELATING TO PATTERNS OF SMOK17 ING.

18 (a) IN GENERAL.—The Secretary shall establish a

19 program to provide for the conduct of research (through

20 the provision of grants, contracts, or otherwise) concern21 ing the cultural, social, behavioral, neurological and psy22 chological reasons that individuals refrain from using to23 bacco products, begin to use tobacco products, continue

24 using tobacco products, or quit using tobacco products.
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1 (b) ELIGIBILITY.—To be eligible to receive a grant,

2 contract, or other assistance under this section an entity

3 or individual shall prepare and submit to the Secretary

4 an application at such time, in such manner, and contain5 ing such information as the Secretary may require.

6 (c) USE OF FUNDS.—Amounts received by an indi7 vidual or entity under this section shall be used to carry

8 out activities under the program established under sub9 section (a).

10 (d) ADDITIONAL REQUIREMENTS.—To be eligible to

11 receive a grant, contract, or other assistance under this

12 section an entity or individual shall provide assurances to

13 the Secretary that—

14 (1) any research to be conducted under the

15 grant or contract will be generally consistent with

16 the requirements applicable to research conducted

17 under the authority of the National Institutes of

18 Health;

19 (2) adequate records will be maintained with re20 spect to such assistance; and

21 (3) amounts provided to the individual or entity

22 will be subject to independent audit.

23 (e) EFFECT ON MINORITIES AND WOMEN.—The pro24 gram established under subsection (a) shall be conducted

25 by minority institutions or minority researchers where pos-
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1 sible and in a manner that ensures that research will be

2 conducted to investigate the different factors affecting to3 bacco use among minorities and women in proportion to

4 their prevalence in the smoking population.

5 (f) DISSEMINATION OF RESULTS.—The Secretary

6 shall establish procedures for the dissemination of the re7 sults of the research conducted under this section.

8 (g) FUNDING.—There shall be made available to

9 carry out this section an amount equal to 10 percent of

10 the amounts made available under section 101(d)(5)(C)

11 for a fiscal year.

12 SEC. 603. SURVEILLANCE AND EVALUATION.

13 (a) IN GENERAL.—The Secretary, acting through the

14 Director of the Centers for Disease Control and Preven15 tion, shall conduct surveillance and evaluation activities,

16 including the surveys authorized under title III, to monitor

17 patterns of tobacco use and determine the effectiveness of

18 various anti-tobacco programs funded under this Act.

19 Such activities shall include studies of the responsiveness

20 of smokers and potential smokers, particularly youth

21 smokers, to price increases and non-price incentives.

22 (b) FUNDING.—There shall be made available to

23 carry out this section an amount equal to 5 percent of

24 the amounts made available under section 101(d)(5)(C)

25 for a fiscal year.
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1 Subtitle B—Education and

2 Prevention Programs

3 SEC. 611. GRANTS FOR SCHOOL- AND COMMUNITY-BASED

4 TOBACCO DANGER EDUCATION PROGRAMS.

5 (a) IN GENERAL.—The Secretary shall establish a

6 program to award grants to States to enable such States

7 to assist schools, colleges, universities, communities, or

8 community organizations—

9 (1) to carry out school-based and college- or

10 university-based education programs concerning the

11 dangers of using tobacco products using methods

12 that are proven and effective; and

13 (2) to carry out community-based prevention

14 programs, including in predominantly minority com15 munities, using methods that are proven and effec16 tive.

17 (b) ELIGIBILITY.—To be eligible to receive a grant

18 under this section a State shall prepare and submit to the

19 Secretary an application at such time, in such manner,

20 and containing such information as the Secretary may re21 quire, including a State plan (that is subject to approval

22 by the Secretary) that describes—

23 (1) the types of programs that the State will

24 fund under the grant;
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1 (2) the manner in which the State will ensure

2 that the programs will be age-appropriate, culturally

3 appropriate, and linguistically appropriate for the

4 target population; and

5 (3) the manner in which the State will monitor

6 the effectiveness of such programs.

7 (c) USE OF FUNDS.—Amounts received by a State

8 under this section shall be used to—

9 (1) carry out State-wide school-based education

10 programs that are focused on those regions of the

11 State with high smoking rates and targeted at popu12 lations who are most at risk to start smoking;

13 (2) carry out State-wide college- and university14 based education programs to discourage individuals

15 between the ages of 18 and 24 from beginning to

16 use tobacco products, such programs to be focused

17 on colleges or universities with high smoking rates;

18 (3) carry out community-based prevention pro19 grams that are focused on those populations, includ20 ing predominantly minority communities, within the

21 community that are most at-risk to use tobacco

22 products or that have been targeted by tobacco ad23 vertising or marketing;

24 (4) develop curriculums for such programs;

25 (5) acquire materials for such programs;
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1 (6) expand the IMPACT or ASSIST program;

2 and

3 (7) carry out other activities determined appro4 priate by the Secretary.

5 (d) ADDITIONAL REQUIREMENTS.—To be eligible to

6 receive a grant under this section a State shall provide

7 assurances to the Secretary that—

8 (1) the State will annually report to the Sec9 retary on the effectiveness of the educational ap10 proaches implemented by the State;

11 (2) adequate records will be maintained with re12 spect to such assistance;

13 (3) amounts provided to individuals or entities

14 will be subject to independent audit; and

15 (4) the State will involve local public health of16 ficials in the planning and implementation of the

17 program.

18 (e) FUNDING.—There shall be made available to

19 carry out this section an amount equal to 15 percent of

20 the amounts made available under section 101(d)(5)(C)

21 for a fiscal year.
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1 Subtitle C—Miscellaneous

2 Programs

3 SEC. 621. COUNTER-ADVERTISING PROGRAMS.

4 (a) IN GENERAL.—The Secretary shall carry out pro5 grams to reduce tobacco usage through media-based (such

6 as counter-advertising campaigns) and nonmedia-based

7 education, prevention and cessation campaigns designed to

8 discourage the use of tobacco products by individuals and

9 to encourage those who use such products to quit. Such

10 programs shall include national and local campaigns and

11 shall target, in a culturally and linguistically appropriate

12 manner and utilizing appropriate media outlets (including

13 newspapers and other media owned by or targeted to mi14 norities), adults, children, women and minorities who have

15 been targeted by tobacco industry advertising.

16 (b) ELIGIBILITY.—To be eligible to receive assistance

17 under this section an entity or individual shall prepare and

18 submit to the Secretary an application at such time, in

19 such manner, and containing such information as the Sec20 retary may require.

21 (c) USE OF FUNDS.—Amounts received by an indi22 vidual or entity under this section shall be used to carry

23 out activities under the programs established under sub24 section (a). Such amounts may be used to design and im-
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1 plement such activities and to conduct research concerning

2 the effectiveness of such programs.

3 (d) FUNDING.—There shall be made available to

4 carry out this section an amount equal to 25 percent of

5 the amounts made available under section 101(d)(5)(C)

6 for a fiscal year.

7 SEC. 622. NATIONAL TOBACCO CESSATION PROGRAM.

8 (a) ESTABLISHMENT.—There is established a pro9 gram to be known as the ‘‘National Tobacco Cessation

10 Program’’. The Secretary may award grants to, and enter

11 into contracts and cooperative agreements with, public and

12 private entities for the purpose of expanding the availabil13 ity and utilization of tobacco use cessation services. The

14 program established under this section shall ensure that

15 cessation programs will be conducted in a manner that

16 targets minorities and woman in proportion to their preva17 lence in the smoking population.

18 (b) USE OF FUNDS.—Amounts made available under

19 a grant, contract or cooperative agreement under sub20 section (a) shall be used for the planning, establishment,

21 or administration of tobacco use cessation programs ap22 proved in accordance with subsection (c).

23 (c) CESSATION PROGRAMS.—Programs receiving as24 sistance under this section shall provide a range and qual25 ity of services consistent with the most recent cessation
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1 service guidelines issued by the Agency for Health Care

2 Policy and Research. Using the best available scientific in3 formation, the Secretary shall promulgate such additional

4 guidelines as are necessary to assure the quality, acces5 sibility and cost effectiveness of services receiving funds

6 under this section.

7 (d) FUNDING.—There shall be made available to

8 carry out this section an amount equal to 33 percent of

9 the amounts made available under section 101(d)(5)(C)

10 for a fiscal year.

11 SEC. 623. ASSISTANCE FOR THOSE SUFFERING FROM TO12 BACCO-RELATED ILLNESSES.

13 (a) IN GENERAL.—The Secretary shall establish a

14 program to provide assistance and compensation to indi15 viduals (and entities providing services to such individuals)

16 suffering from tobacco-related illnesses and conditions.

17 Under such program assistance shall be targeted at indi18 viduals who are determined to be uninsured or under19 insured and who can demonstrate financial hardship.

20 (b) DEVELOPMENT OF PLAN.—The Secretary shall

21 carry out the program established under subsection (a)

22 under a plan to be developed by the Secretary, not later

23 than 1 year after the date of enactment of this Act.

24 (c) ELIGIBILITY.—
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1 (1) OF ENTITIES.—To be eligible to receive as2 sistance under this section an entity shall—

3 (A) be a public or nonprofit private entity;

4 (B) prepare and submit to the Secretary

5 an application at such time, in such manner,

6 and containing such information as the Sec7 retary may require;

8 (C) provide assurances that amounts re9 ceived under the grant will be used in accord10 ance with subsection (d)(1); and

11 (D) meet any other requirements deter12 mined appropriate by the Secretary.

13 (2) OF INDIVIDUALS.—To be eligible to receive

14 assistance under this section an individual shall—

15 (A) prepare and submit to the Secretary

16 an application at such time, in such manner,

17 and containing such information as the Sec18 retary may require;

19 (B) provide assurances that amounts re20 ceived under the grant will be used only in ac21 cordance with subsection (d)(2); and

22 (C) meet any other requirements deter23 mined appropriate by the Secretary.

24 (d) USE OF FUNDS.—Assistance provided under this

25 section shall be used—
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1 (1) in the case of an entity eligible under sub2 section (c)(1), to provide treatment for tobacco-relat3 ed illnesses; or

4 (2) in the case of an individual eligible under

5 subsection (c)(2), to pay for the receipt of treat6 ments for tobacco-related illnesses.

7 (e) ADDITIONAL REQUIREMENTS.—In providing as8 sistance under this section, the Secretary shall ensure that

9 such assistance is not used to duplicate any payments

10 made under any health insurance plans but rather to cover

11 uncompensated care provided to individuals with tobacco12 related illnesses.

13 (f) FUNDING.—There shall be made available to

14 carry out this section an amount equal to 3 percent of

15 the amounts made available under section 101(d)(5)(C)

16 for a fiscal year.

17 SEC. 624. INTERNATIONAL TOBACCO CONTROL.

18 (a) GOVERNMENTAL ACTIVITIES.—

19 (1) IN GENERAL.—The Secretary (in consulta20 tion with the Secretary of State) may provide bilat21 eral assistance, including technical assistance

22 through the Centers for Disease Control and Preven23 tion, to foreign countries and multilateral assistance

24 to reduce and prevent the use of tobacco in foreign
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1 countries. Such assistance shall be focused on pre2 venting the use of tobacco products by minors.

3 (2) FUNDING.—There shall be made available

4 to carry out this subsection an amount equal to 2

5 percent of the amounts made available under section

6 101(d)(5)(C) for a fiscal year. Such amount shall be

7 split equally between bilateral and multilateral as8 sistance.

9 (b) NONGOVERNMENTAL ACTIVITIES.—

10 (1) PURPOSE.—The purpose of this subsection

11 is to establish the American Center on Global

12 Health and Tobacco (referred to in this subsection

13 as ‘‘ACT’’). ACT shall assist organizations in other

14 countries to reduce and prevent the use of tobacco.

15 Activities ACT supports shall include—

16 (A) public education programs that inform

17 the public about the hazards of tobacco use and

18 of environmental tobacco smoke;

19 (B) mass media campaigns, including paid

20 counter-tobacco advertisements, to reverse the

21 image appeal of pro-tobacco messages, espe22 cially those that glamorize and ‘‘Westernize’’ to23 bacco use to young people; and

24 (C) education about the economic and soci25 etal costs of tobacco use, and effective tobacco
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1 use prevention and cessation strategies that are

2 appropriate for the country involved.

3 (2) ESTABLISHMENT.—

4 (A) IN GENERAL.—There is hereby estab5 lished in the District of Columbia a private,

6 nonprofit corporation to be known as the Amer7 ican Center on Global Health and Tobacco.

8 ACT shall—

9 (i) not be an agency or establishment

10 of the United States; and

11 (ii) except as otherwise provided in

12 this section, be subject to, and have all the

13 powers conferred upon a nonprofit corpora14 tion by the District of Columbia Nonprofit

15 Corporation Act (D.C. Code section 29-501

16 et seq.).

17 (B) RELATION TO UNITED STATES.—

18 Nothing in this subsection shall be construed as

19 making ACT an agency or establishment of the

20 United States, or as making the members of

21 the Board of ACT, or its employees, officers or

22 employees of the United States.

23 (C) RELATION TO NONGOVERNMENTAL OR24 GANIZATIONS.—ACT shall have a limited staff,

25 and, to the maximum extent practicable, utilize
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1 the available experience and talents of non2 governmental organizations with specialized ex3 perience in health, education, media, and to4 bacco.

5 (D) GOVERNING BOARD.—The Secretary

6 shall appoint a governing board of up to 25

7 members including—

8 (i) on a bipartisan basis, Members of

9 the Senate and of the House of Represent10 atives;

11 (ii) the heads of United States public

12 health organizations;

13 (iii) the heads of United States media,

14 marketing, and other nongovernment insti15 tutions and corporations; and

16 (iv) individuals active in education,

17 public health, and other relevant activities.

18 (E) INTERNATIONAL ADVISORY COUN19 CIL.—An International Advisory Council con20 sisting of representatives from key global, re21 gional, and national public health organizations,

22 and leading individual educators and health

23 professionals shall provide advisory assistance

24 to ACT.
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1 (3) FUNDING.—The Secretary of the Treasury

2 shall on October 1 of each fiscal year beginning after

3 the date of enactment of this Act, transfer an

4 amount equal to 1 percent of the amounts made

5 available under section 101(d)(5)(C) for the fiscal

6 year to ACT to carry out this subsection.

7 (4) REQUIREMENTS FOR ELIGIBILITY FOR AN8 NUAL TRANSFERS FROM THE TRUST FUND.—

9 (A) OVERSIGHT.—ACT and its grantees

10 shall be subject to the oversight and supervision

11 of Congress.

12 (B) COMPLIANCE.—

13 (i) FUNDING CONTINGENT ON COM14 PLIANCE.—Annual payments from the

15 Trust Fund may be made to ACT under

16 this subsection only if ACT complies with

17 the requirements specified in this sub18 section.

19 (ii) USE OF FUNDS.—ACT may only

20 fund programs for private sector groups,

21 and may not carry out programs directly.

22 ACT may provide funding only for pro23 grams which are consistent with the pur24 poses of this subsection.

25 (C) SALARIES AND COMPENSATION.—
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1 (i) NO OTHER SOURCE OF COMPENSA2 TION.—Officers and employees of ACT

3 may not receive any salary or other com4 pensation from any source other than ACT

5 for services performed for ACT.

6 (ii) UNITED STATES OFFICERS AND

7 EMPLOYEES.—An individual who is an offi8 cer or employee of the United States who

9 also serves on the Board of Directors or as

10 an officer or employee of ACT, may not re11 ceive any compensation or travel expenses

12 in connection with services performed for

13 ACT.

14 (D) STOCKS AND DIVIDENDS.—ACT shall

15 not issue any shares of stock or declare or pay

16 any dividends.

17 (E) AUDITS.—

18 (i) PUBLIC ACCOUNTS.—The accounts

19 of ACT shall be audited annually in ac20 cordance with generally accepted auditing

21 standards.

22 (ii) COMPTROLLER GENERAL.—The

23 financial transactions of ACT for each fis24 cal year may be audited by the Comptroller

25 General. A report of each audit shall be
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1 made by the Comptroller General to Con2 gress. A copy of each report shall be fur3 nished to the President and to ACT at the

4 time the report is submitted to Congress.

5 (F) RECORDKEEPING.—ACT shall ensure

6 that each recipient of assistance from ACT

7 under this subsection keeps such records as

8 may be reasonably necessary to fully disclose

9 the amount and the disposition by such recipi10 ent of the proceeds of such assistance, the total

11 cost of the project or undertaking in connection

12 with which such assistance is given or used, and

13 the amount and nature of that portion of the

14 cost of the project or undertaking supplied by

15 other sources, and such other records as will fa16 cilitate an effective audit. ACT shall ensure

17 that it, or any of its duly authorized representa18 tives, shall have access for the purpose of audit

19 and examination to any books, documents, pa20 pers, and records of each recipient of assistance

21 from ACT that are pertinent to assistance pro22 vided through ACT under this subsection.

23 SEC. 625. NATIONAL EVENT SPONSORSHIP PROGRAM.

24 (a) ESTABLISHMENT.—The Secretary shall establish

25 a program to be known as the ‘‘National Event Sponsor-
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1 ship Program’’ under which the Secretary may award

2 grants to eligible entities or individuals for the sponsorship

3 of activities described in subsection (c).

4 (b) ELIGIBILITY.—To be eligible to receive a grant

5 under this section an entity or individual shall—

6 (1) prepare and submit to the Secretary an ap7 plication at such time, in such manner, and contain8 ing such information as the Secretary may require,

9 including—

10 (A) a description of the event, activity,

11 team, or entry for which the grant is to be pro12 vided;

13 (B) documentation that the event, activity,

14 team, or entry involved was sponsored or other15 wise funded by a tobacco manufacturer or dis16 tributor prior to the date of the application; and

17 (C) a certification that the applicant is un18 able to secure funding for the event, activity,

19 team, or entry involved from sources other than

20 those described in paragraph (2);

21 (2) provide assurances that amounts received

22 under the grant will be used in accordance with sub23 section (d); and

24 (3) meet any other requirements determined ap25 propriate by the Secretary.
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1 (c) PERMISSIBLE SPONSORSHIP ACTIVITIES.—

2 Events, activities, teams, or entries for which a grant may

3 be provided under this section include—

4 (1) an athletic, musical, artistic, educational, or

5 other social or cultural event or activity that was

6 sponsored in whole or in part by a tobacco manufac7 turer or distributor prior to the date of enactment

8 of this Act with particular emphasis on smaller com9 munity-based events and activities;

10 (2) the participation of a team that was spon11 sored in whole or in part by a tobacco manufacturer

12 or distributor prior to the date of enactment of this

13 Act, in an athletic event or activity; and

14 (3) the payment of a portion or all of the entry

15 fees of, or other financial or technical support pro16 vided to, an individual or team by a tobacco manu17 facturer or distributor prior to the date of enactment

18 of this Act, for participation of the individual in an

19 athletic, musical, artistic, or other social or cultural

20 event.

21 (d) USE OF FUNDS.—Amounts received under a

22 grant under this section shall be used to—

23 (1)(A) pay the costs associated with the spon24 sorship of an event or activity described in sub25 section (c)(1);
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1 (B) provide for the sponsorship of an individual

2 or team;

3 (C) pay the required entry fees associated with

4 the participation of an individual or team in an

5 event or activity described in subsection (c)(3);

6 (D) provide financial or technical support to an

7 individual or team in connection with the participa8 tion of that individual or team in an activity de9 scribed in subsection (c)(3); or

10 (E) for any other purposes determined appro11 priate by the Secretary; and

12 (2) promote images or activities to discourage

13 individuals from using tobacco products or encour14 age individuals who use such products to quit.

15 (e) ALLOCATION OF UNEXPENDED FUNDS.—

16 Amounts available for purposes of carrying out this sec17 tion and remaining available at the end of the 10-year pe18 riod following the date of the establishment of the program

19 under this section, shall be used as follows:

20 (1) 50 percent of such amounts shall be used

21 to supplement amounts available for multi-media

22 campaigns under section 621;

23 (2) 25 percent of such amounts shall be used

24 to supplement amounts available for Federal or

25 State tobacco product enforcement purposes; and
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1 (3) 25 percent of such amounts shall be used

2 to supplement amounts available for community3 based programs under this subtitle or subtitle B.

4 (f) FUNDING.—There shall be made available to

5 carry out this section an amount equal to 1 percent of

6 the amounts made available under section 101(d)(5)(C)

7 for a fiscal year.

8 (g) SUNSET.—The program established under this

9 section shall terminate on the date that is 10-years after

10 the date of enactment of this Act.

11 SEC. 626. PROGRAMS TO REDUCE ALCOHOL AND ILLICIT

12 DRUG USE BY MINORS.

13 (a) IN GENERAL.—The Secretary shall establish a

14 program under which grants are awarded to States to aug15 ment funding for existing programs that are designed to

16 reduce alcohol and illicit drug use by individuals under 18

17 years of age and that have been proven effective.

18 (b) ELIGIBILITY.—To be eligible to receive a grant

19 under this section a State shall prepare and submit to the

20 Secretary an application at such time, in such manner,

21 and containing such information as the Secretary may re22 quire, including a State plan (that is subject to approval

23 by the Secretary) that describes—

24 (1) the types of programs that the State will

25 fund under the grant;
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1 (2) the manner in which the State will ensure

2 that the programs will be age-appropriate;

3 (3) the manner in which the State will monitor

4 the effectiveness of such programs; and

5 (4) the manner in which the State program will

6 be targeted at populations that are most at risk to

7 use alcohol or illicit drugs.

8 (c) USE OF FUNDS.—Amounts received by a State

9 under this section shall be used to expand and enhance

10 existing programs to discourage the use of alcohol and il11 licit drugs and to encourage those who use such products

12 to quit such use.

13 (d) ADDITIONAL REQUIREMENTS.—To be eligible to

14 receive a grant under this section a State shall provide

15 assurances to the Secretary that—

16 (1) the State will annually report to the Sec17 retary on the effectiveness of the programs imple18 mented by the State;

19 (2) adequate records will be maintained with re20 spect to such assistance; and

21 (3) amounts provided to the individual or entity

22 will be subject to independent audit.

23 (e) FUNDING.—There shall be made available to

24 carry out this section an amount equal to 5 percent of
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1 the amounts made available under section 101(d)(5)(C)

2 for a fiscal year.

3 TITLE VII—LIABILITY PROTEC4 TION; CONSENT DECREES; NA5 TIONAL PROTOCOL

6 Subtitle A—Liability Protection

7 and Attorney Fees

8 SEC. 701. RESOLUTION OF AND LIMITATIONS ON CIVIL AC9 TIONS.

10 (a) STATE ATTORNEY GENERAL ACTIONS.—

11 (1) PENDING CLAIMS.—With respect to a State,

12 to be eligible to receive funds under section 111 sec13 tion 131 or section 132, the attorney general for

14 such State shall resolve any civil action seeking re15 covery for expenditures attributable to the treatment

16 of tobacco-related illnesses and conditions that has

17 been commenced by the State against a manufac18 turer, distributor, or retailer of a tobacco product

19 and is pending on the date of enactment of this Act.

20 (2) FUTURE ACTIONS BASED ON PRIOR CON21 DUCT.—With respect to a State, to be eligible to re22 ceive funds under section 111, section 131 or section

23 132, the attorney general for such State shall agree

24 that the State will not commence any new civil ac25 tion after the date of enactment of this Act (other
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1 than to enforce the terms of a previous judgment)

2 that is based on the conduct of a participating man3 ufacturer, distributor or retailer of a tobacco product

4 that occurred prior to the date of enactment of this

5 Act seeking recovery for expenditures attributable to

6 the treatment of tobacco induced illnesses and condi7 tions against such a manufacturer, distributor or re8 tailer.

9 (3) APPLICATION TO LOCAL GOVERNMENTAL

10 ENTITIES.—The requirements described in para11 graphs (1) and (2) shall apply to civil actions com12 menced by or on behalf of local governmental enti13 ties for the recovery of costs attributable to tobacco14 related illnesses if such localities are within a State

15 whose attorney general has elected to resolve claims

16 under paragraph (1) and enter into the agreement

17 described in paragraph (2). Such provisions shall not

18 apply to those local governmental entities that are

19 within a State whose attorney general has not re20 solved such claims or entered into such agreements.

21 (b) STATE AND LOCAL OPTION FOR ONE-TIME OPT

22 OUT.—

23 (1) IN GENERAL.—The Secretary shall establish

24 procedures under which the attorney general of a

25 State may, not later than 1 year after the date of
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1 enactment of this Act, elect not to resolve an action

2 described in subsection (a)(1) or not enter into an

3 agreement under subsection (a)(2). A State whose

4 attorney general makes such an election shall not be

5 eligible to receive payments from the Trust Fund

6 under section 111 section 131 or section 132. Proce7 dures under this paragraph shall permit such a

8 State to make such an election on a one-time basis.

9 (2) EXTENSION.—In the case of a State that

10 has secured a judgment against a manufacturer, dis11 tributor or retailer of a tobacco product in an action

12 described in subsection (a)(1) prior to or during the

13 period described in paragraph (1), and such judg14 ment has been appealed by such manufacturer, dis15 tributor, or retailer, such period shall be extended

16 during the pendency of the appeal and for an addi17 tional period as determined appropriate by the Sec18 retary.

19 (3) APPLICATION TO CERTAIN STATES.—A

20 State that has resolved a claim described in sub21 section (a)(1) with a manufacturer, distributor or re22 tailer of a tobacco product prior to the date of en23 actment of this Act may not make an election de24 scribed in paragraph (1) if, as part of the resolution

25 of such claim, the State agreed that the enactment
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1 of any national tobacco settlement legislation would

2 supersede the provisions of the resolution.

3 (4) LOCAL GOVERNMENTAL ENTITY OPTION

4 FOR ONE-TIME OPT OUT.—

5 (A) IN GENERAL.—The Secretary shall es6 tablish procedures under which the attorney for

7 a local governmental entity which commenced a

8 civil action prior to June 20, 1997, against a

9 manufacturer, distributor, or retailer of a to10 bacco product seeking recovery for expenditures

11 attributable to the treatment of tobacco related

12 illnesses and conditions, not later than 1 year

13 after the date of enactment of this Act, may

14 elect not to resolve any action described in sub15 section (a)(3). A local governmental entity

16 whose attorney makes such an election shall not

17 be eligible to receive payments from the Trust

18 Fund under section 111. Procedures under this

19 paragraph shall permit such a local govern20 mental entity to make such an election on a

21 one-time basis.

22 (B) EXTENSION.—In the case of a local

23 governmental entity that has secured a judg24 ment against a manufacturer, distributor, or re25 tailer of a tobacco product in a claim described
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1 in subsection (a)(3) prior to or during the pe2 riod described in subparagraph (A), and such

3 judgment has been appealed by such manufac4 turer, distributor, or retailer, such period shall

5 be extended during the pendency of the appeal

6 and for an additional period as determined ap7 propriate by the Secretary.

8 (C) APPLICATION TO CERTAIN LOCAL GOV9 ERNMENTAL ENTITIES.—A local governmental

10 entity that has resolved a claim described in

11 subsection (a)(3) with a manufacturer, distribu12 tor, or retailer of a tobacco product prior to the

13 date of enactment of this Act may not make an

14 election described in subparagraph (A) if, as

15 part of the resolution of such claim, the local

16 governmental entity agreed that the enactment

17 of any national tobacco settlement legislation

18 would supersede the provisions of the resolu19 tion.

20 (c) FEDERAL CLAIMS.—The Federal Government is

21 barred from commencing a civil action against a partici22 pating manufacturer, distributor, or retailer of a tobacco

23 product seeking recovery for expenditures attributable to

24 the treatment of tobacco-related illnesses associated with
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1 the conduct of a manufacturer that occurred prior to the

2 date of enactment of this Act.

3 (d) RULES OF CONSTRUCTION.—

4 (1) POST ENACTMENT CLAIMS.—Nothing in

5 this title shall be construed to limit the ability of a

6 government, entity, or person to commence an action

7 against a participating manufacturer, distributor or

8 retailer of a tobacco product with respect to a claim

9 that is based on the conduct of such manufacturer,

10 distributor or retailer that occurred after the date of

11 enactment of this Act.

12 (2) NO LIMITATION ON PERSONS.—Nothing in

13 this title shall be construed to limit the right of a

14 person (other than a State, Federal or local govern15 ment as provided in subsections (a)–(c)) to com16 mence any civil claim for past, present, or future

17 conduct by manufacturers, distributors or retailers

18 of tobacco products.

19 (3) CRIMINAL LIABILITY.—Nothing in this title

20 shall be construed to limit the criminal liability of a

21 tobacco manufacturer, retailer, or distributor or its

22 officers, directors, employees, successors, or assigns.

23 (e) DEFINITION.—As used in this section, the term

24 ‘‘participating manufacturer’’ means a manufacturer of

25 tobacco products that has entered into a consent decree
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1 under section 711 and that is a signatory to the Protocol

2 under section 721.

3 SEC. 702. ATTORNEY’S FEES AND EXPENSES.

4 (a) SOURCE AND PAYMENT OF AWARDS.—In no

5 event shall any award of the Arbitration Panel established

6 under subsection (b) be paid from, credited against, or

7 otherwise affect in any way any fee payments that are re8 quired to be made by any participating manufacturer

9 under section 102 or under any other provision of this Act.

10 Any such award shall be paid by those participating manu11 facturers that are signators to the June 20, 1997, pro12 posed resolution with certain State attorneys general pur13 suant to an allocation agreement among such manufactur14 ers.

15 (b) ARBITRATION PANEL.—

16 (1) ESTABLISHMENT.—For the purpose of

17 awarding of attorneys’ fees and expenses relating to

18 litigation affected by, or legal services that, in whole

19 or in part, resulted in or created a model for pro20 grams in, this Act, and where attorneys involved are

21 unable to agree with the plaintiffs who hired them

22 with respect to any dispute that may arise between

23 them regarding their fee agreement, then the matter

24 at issue shall be submitted to arbitration. In any

25 such arbitration, the arbitration panel shall consist
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1 of 3 persons, one of whom shall be chosen by the

2 plaintiffs, one of whom shall be chosen by the plain3 tiffs’ attorneys, and one of whom shall be chosen

4 jointly by the first 2 arbitrators chosen as specified

5 herein.

6 (2) OPERATION.—Not later than 30 days after

7 the date on which all members of an Arbitration

8 Panel are appointed under paragraph (1), the Panel

9 shall establish the procedures under which the Panel

10 will operate which shall include—

11 (A) A requirement that any finding by the

12 Arbitration Panel must be in writing and sup13 ported by written reasons;

14 (B) procedures for the exchanging of ex15 hibits and witness lists by the various claimants

16 for awards;

17 (C) to the maximum extent practicable, re18 quirements that proceedings before the Panel

19 be based on affidavits rather than live testi20 mony; and

21 (D) a requirement that all claims be sub22 mitted to an Arbitration Panel not later than 3

23 months after the effective date of this Act and

24 a determination made by the Panel with respect
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1 to such claims not later than 7 months after

2 such date of enactment.

3 (3) RIGHT TO PETITION.—Any individual attor4 ney or group of attorneys involved in litigation af5 fected by this Act shall have the right to petition an

6 Arbitration Panel for attorneys’ fees and expenses.

7 (4) CRITERIA.—In making any award pursuant

8 to this section, an Arbitration Panel shall consider

9 the following criteria:

10 (A) The time and labor required by the

11 claimant.

12 (B) The novelty and difficulty of the ques13 tions involved in the action for which the claim14 ant is making a claim.

15 (C) The skill requisite to perform the legal

16 service involved properly.

17 (D) The preclusion of other employment by

18 the attorney due to acceptance of the action in19 volved.

20 (E) Whether the fee is fixed or a percent21 age.

22 (F) Time limitations imposed by the client

23 or the circumstances.

24 (G) The amount involved and the results

25 obtained.
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1 (H) The experience, reputation, and ability

2 of the attorneys involved.

3 (I) The undesirability of the action.

4 (J) Such other factors as justice may re5 quire.

6 (5) APPEAL AND ENFORCEMENT.—The findings

7 of an Arbitration Panel shall be final, binding, non8 appealable, and payable within 30 days after the

9 date on which the finding is made public, except that

10 if an award is to be paid in installments, the first

11 installment shall be payable within such 30 day pe12 riod and succeeding installments shall be paid annu13 ally thereafter.

14 (6) SENSE OF THE SENATE.—It is the sense of

15 the Senate that the legal services rendered by attor16 neys in the various class actions filed by the Castano

17 Plaintiffs Legal Committee against certain tobacco

18 manufacturers provided public benefits, including

19 many of the specific public health programs in the

20 proposed resolution dated June 20, 1997, upon

21 which programs in Title VI of this Act are in part

22 modeled. It is further the sense of the Senate that

23 such programs do not constitute an exclusive remedy

24 for claims based on addiction to or dependence on

25 tobacco products, that such programs do not operate
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1 to preclude or otherwise limit any litigation premised

2 or otherwise depending on addiction to or depend3 ence on tobacco products, and that the preceding

4 sentence does not in any way affect the interpreta5 tion of section 701(d) of this Act.

6 (c) VALIDITY AND ENFORCEABILITY OF PRIVATE

7 AGREEMENTS.—Notwithstanding any other provision of

8 this Act, nothing in this section shall be construed to abro9 gate or restrict in any way the rights of any parties to

10 mediate, negotiate, or settle any fee or expense disputes

11 or issues to which this section applies, or to enter into

12 private agreements with respect to the allocation or divi13 sion of fees among the attorneys party to any such agree14 ment.

15 Subtitle B—Consent Decrees

16 SEC. 711. CONSENT DECREES.

17 (a) REQUIREMENT.—

18 (1) IN GENERAL.—Except as provided in para19 graph (2), to be eligible to receive payments under

20 section 111 section 131 or section 132, a State, and

21 to be eligible to receive liability protections under

22 subtitle A, a tobacco manufacturer, shall enter into

23 consent decrees under this section to be effective on

24 the date of enactment of this Act.
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1 (2) GOOD FAITH EFFORTS.—The limitation de2 scribed in paragraph (1) with respect to payments

3 under section 111, section 131 or section 132 shall

4 not apply to a State if the attorney general of the

5 State certifies to the Secretary that—

6 (A) the State has made good faith efforts

7 to enter into a consent decree in accordance

8 with this subtitle; and

9 (B) such State is willing to be bound by

10 such decree but such decree does not exist be11 cause—

12 (i) of the refusal on the part of a to13 bacco manufacturer to enter into such de14 cree; or

15 (ii) the appropriate court has not en16 tered the decree even though the parties

17 have lodged such a decree with the court.

18 (b) TERMS AND CONDITIONS.—

19 (1) IN GENERAL.—The consent decrees de20 scribed in subsection (a) shall resolve the State ac21 tion (or potential action in the case of a manufac22 turer that was not a defendant in a State action but

23 that desires to become a participating manufacturer

24 or in the case of a State that does not have a suit

25 pending against a manufacturer) for claims associ-
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1 ated with the conduct of the manufacturer that oc2 curred prior to the date of enactment of this Act.

3 (2) GENERAL TERMS AND CONDITIONS.—The

4 terms and conditions contained in the consent de5 crees described in subsection (a) shall contain the

6 following provisions relating to—

7 (A) restrictions on tobacco product adver8 tising and marketing and youth access to such

9 products;

10 (B) the termination, establishment, and

11 operation of trade associations;

12 (C) the disclosure of tobacco smoke con13 stituents;

14 (D) the disclosure of nontobacco constitu15 ents and ingredients found in tobacco products;

16 (E) the disclosure of existing and future

17 documents relating to health, toxicity, and ad18 diction related to tobacco product usage;

19 (F) the obligation of manufacturers to

20 make payments for the benefit of States, pri21 vate litigants and the general public;

22 (G) the obligation of manufacturers to

23 enter into the Protocol under subtitle C;

24 (I) the obligation of manufacturers to

25 interact only with distributors and retailers that
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1 operate in compliance with the applicable provi2 sions of Federal, State, or local law regarding

3 the marketing and sale of tobacco products;

4 (J) requirements for warnings, labeling,

5 and packaging of tobacco products;

6 (K) the resolution of pending litigation (or

7 potential future litigation for misconduct that

8 occurred prior to the date of enactment of this

9 Act) as required under subtitle A and as agreed

10 to by the parties to the decree; and

11 (L) any other matter determined appro12 priate by the Secretary or the parties involved.

13 (3) LIMITATIONS.—The terms and conditions

14 contained in the consent decrees described in sub15 section (a) shall not contain provisions relating to—

16 (A) tobacco product design, performance,

17 or modification;

18 (B) manufacturing standards and good

19 manufacturing practices;

20 (C) testing and regulation with respect to

21 toxicity and ingredients approval; and

22 (D) the tobacco usage reduction require23 ment described in section 303.

24 (4) ENFORCEABILITY.—The terms and condi25 tions contained in the consent decrees described in
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1 subsection (a) shall be enforceable by the signato2 ries, as well as the Attorney General, and shall in3 clude a provision that prohibits signatories from

4 challenging the enforceability of the consent decrees.

5 (5) CONSTRUCTION.—The terms and conditions

6 contained in the consent decrees described in sub7 section (a) shall provide that the terms of the decree

8 will be construed in a manner that is consistent with

9 the provision of this Act.

10 (c) APPROVAL.—

11 (1) IN GENERAL.—Prior to the entry of a con12 sent decree by a court under this section the court

13 must find that the provisions of the consent de14 cree—

15 (A) have been approved by the Secretary

16 and the Attorney General;

17 (B) are fair and reasonable; and

18 (C) are in the public interest.

19 (2) DETERMINATION BY SECRETARY.—To ap20 prove a consent decree under paragraph (1)(A), the

21 Secretary and the Attorney General shall have deter22 mined whether the provisions of the decree are con23 sistent with this Act and the Food, Drug and Cos24 metic Act or the rules and regulations promulgated

25 under such Acts.
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1 (3) NOTICE TO PUBLIC.—With respect to the

2 approval of a consent decree under this section, the

3 court shall ensure that the public has been given not

4 less than 60 days notice of the filing of the decree

5 by the parties and any objections thereto must be

6 addressed to the satisfaction of the court.

7 (d) ENFORCEMENT.—The provisions of a consent de8 cree entered under this section shall remain in effect and

9 enforceable in the court in which the decree is entered,

10 even if the underlying action is dismissed.

11 SEC. 712. NON-PARTICIPATING MANUFACTURERS.

12 With respect to a manufacturer that elects not to

13 enter into a consent decree under section 711, such manu14 facturer shall not be eligible to receive the liability protec15 tions under section 701.

16 Subtitle C—National Tobacco

17 Control Protocol

18 CHAPTER 1—ESTABLISHMENT

19 SEC. 721. NATIONAL TOBACCO CONTROL PROTOCOL.

20 (a) REQUIREMENT.—To be eligible to receive the li21 ability protections provided for in subtitle A, each tobacco

22 manufacturer to which this Act applies shall, not later

23 than 90 days after the date of enactment of this Act, enter

24 into a National Tobacco Control Protocol with the Attor25 ney General of the United States and the attorney general
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1 of each State that does not elect to opt out under section

2 701(b)(1).

3 (b) TERMS AND CONDITIONS.—The Protocol referred

4 to in subsection (a) shall be—

5 (1) developed by the Attorney General, in con6 sultation with the Secretary, the State attorneys’

7 general, the Federal Trade Commission and other

8 individuals determined appropriate by the Attorney

9 General, as a binding and enforceable contract that

10 embodies the terms of this subtitle; and

11 (2) designed to be enforceable in Federal or

12 State courts as provided for in this subtitle.

13 (c) CONTRACTS.—As part of the Protocol under this

14 section, a manufacturer shall agree, with respect to any

15 contract entered into by the manufacturer with an entity

16 that is a distributor or retailer of tobacco products, to in17 clude in such contract as a term and condition a require18 ment that such distributor or retailer comply with the pro19 visions of the Protocol.

20 CHAPTER 2—TERMS AND CONDITIONS

21 SEC. 725. APPLICATION OF CHAPTER.

22 The provisions of this chapter shall be considered as

23 part of the Protocol.
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1 SEC. 726. AGREEMENT TO PROHIBIT CERTAIN ADVERTIS2 ING.

3 (a) PROHIBITION ON OUTDOOR ADVERTISING.—

4 (1) IN GENERAL.—No manufacturer, distribu5 tor, or retailer may use any form of outdoor tobacco

6 product advertising, including billboards, posters, or

7 placards.

8 (2) STADIA AND ARENAS.—Except as otherwise

9 provided in this Act, a manufacturer, distributor, or

10 retailer shall not advertise tobacco products in any

11 arena or stadium where athletic, musical, artistic or

12 other social or cultural events or activities occur.

13 (b) PROHIBITION ON USE OF HUMAN IMAGES AND

14 CARTOONS.—No manufacturer, distributor, or retailer

15 may use a human image or a cartoon character or cartoon16 type character in its advertising, labeling or promotional

17 material with respect to a tobacco product.

18 (c) PROHIBITION ON ADVERTISING ON THE INTER19 NET.—No manufacturer, distributor, or retailer may use

20 the Internet to advertise tobacco products unless such an

21 advertisement is inaccessible in or from the United States.

22 (d) PROHIBITION ON POINT OF SALE ADVERTIS23 ING.—

24 (1) IN GENERAL.—Except as otherwise pro25 vided in this subsection, no manufacturer, distribu-
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1 tor, or retailer may use point of sale advertising of

2 tobacco products.

3 (2) ADULT ONLY STORES AND TOBACCO OUT4 LETS.—Paragraph (1) shall not apply to point of

5 sale advertising at adult only stores and tobacco out6 lets.

7 (3) PERMISSIBLE ADVERTISING.—

8 (A) IN GENERAL.—Each manufacturer of

9 tobacco products may display not more than 2

10 separate point of sale advertisements in or at

11 each location at which tobacco products are of12 fered for sale.

13 (B) RETAILERS.—No manufacturer, dis14 tributor, or retailer may enter into any arrange15 ment with a retailer to limit the ability of the

16 retailer to display any form of permissible point

17 of sale advertisement or promotional material

18 originating with another manufacturer, dis19 tributor, or retailer.

20 (4) LIMITATIONS.—

21 (A) IN GENERAL.—A point of sale adver22 tisement permitted under this subsection shall

23 be comprised of a display area that is not larger

24 than 576 square inches (either individually or

25 in the aggregate) and shall consist only of black
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1 letters on a white background or other recog2 nized typographical marks. Such advertisement

3 shall not be attached to nor located within 2

4 feet of any fixture on which candy is displayed

5 for sale.

6 (B) AUDIO AND VIDEO FORMATS.—Audio

7 and video advertisements otherwise permitted

8 under this Act may be distributed to individuals

9 who are 18 years of age or older at point of sale

10 but may not be played or viewed at such point

11 of sale.

12 (C) DISPLAY FIXTURES.—Display fixtures

13 in the form of signs consisting of brand name

14 and price and not larger than 2 inches in height

15 are permitted.

16 (5) DEFINITION.—For purposes of this sub17 section, the term ‘‘point of sale advertising’’ means

18 all printed or graphical materials bearing the brand

19 name (alone or in conjunction with any other word),

20 logo, motto, selling message, recognizable color or

21 pattern of colors, or any other indicia of product

22 identification similar or identical to those used for

23 tobacco products, which, when used for its intended

24 purpose, can reasonably be anticipated to be seen by
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1 customers at a location at which tobacco products

2 are offered for sale.

3 SEC. 727. CONSENSUAL RESTRICTIONS.

4 (a) RESTRICTION ON PRODUCT NAMES.—A manu5 facturer shall not use a trade or brand name of a non6 tobacco product as the trade or brand name for a cigarette

7 or smokeless tobacco product, except for a tobacco product

8 whose trade or brand name was on both a tobacco product

9 and a nontobacco product that were sold in the United

10 States on January 1, 1998.

11 (b) ADVERTISING LIMIT ACTIONS.—

12 (1) IN GENERAL.—A manufacturer, distributor,

13 or retailer may in accordance with this Act, dissemi14 nate or cause to be disseminated advertising or la15 beling which bears a tobacco product brand name

16 (alone or on conjunction with any other word) or

17 any other indicia of tobacco product identification

18 only in newspapers, in magazines, in periodicals or

19 other publications (whether periodic or limited dis20 tribution), on billboards, posters and placards in ac21 cordance with section 726(a), in nonpoint of sale

22 promotional material (including direct mail), in

23 point-of-sale promotional material, and in audio or

24 video formats delivered at a point-of-sale.
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1 (2) LIMITATION.—A manufacturer, distributor,

2 or retailer that intends to disseminate, or to cause

3 to be disseminated, advertising or labeling for a to4 bacco product in a medium that is not described in

5 paragraph (1) shall notify the Secretary not less

6 than 30 days prior to the date on which such me7 dium is to be used. Such notice shall describe the

8 medium and discuss the extent to which the adver9 tising or labeling may be seen by individuals who are

10 under 18 years of age.

11 (3) ACTION BY SECRETARY.—Not later than 30

12 days after the date on which the Secretary receives

13 a notice under paragraph (2), the Secretary shall

14 make a determination with respect to the action to

15 be taken concerning such notice.

16 (c) RESTRICTION ON PLACEMENT IN ENTERTAIN17 MENT MEDIA.—

18 (1) IN GENERAL.—No payment shall be made

19 by any manufacturer, distributor, or retailer for the

20 placement of any tobacco product or tobacco product

21 package or advertisement—

22 (A) as a prop in any television program or

23 motion picture produced for viewing by the gen24 eral public; or

25 (B) in a video or on a video game machine.
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1 (2) VIDEO GAME.—The term ‘‘video game’’

2 means any electronic amusement device that utilizes

3 a computer, microprocessor, or similar electronic cir4 cuitry and its own cathode ray tube, or is designed

5 to be used with a television set or a monitor, that

6 interacts with the user of the device.

7 (3) VIDEO.—The term ‘‘video’’ means an audio8 visual work produced for viewing by the general pub9 lic, such as a television program, a motion picture,

10 a music video, and the audiovisual display of a video

11 game.

12 (d) RESTRICTIONS ON GLAMORIZATION OF TOBACCO

13 PRODUCTS.—No direct or indirect payment shall be made,

14 or consideration given, by any manufacturer, distributor,

15 or retailer to any entity for the purpose of promoting the

16 image or use of a tobacco product through print, film or

17 broadcast media that appeals to individuals under 18

18 years of age or through a live performance by an enter19 tainment artist that appeals to such individuals.

20 SEC. 728. AGREEMENT ON FORMAT AND CONTENT RE21 QUIREMENTS FOR LABELING AND ADVERTIS22 ING.

23 (a) IN GENERAL.—Except as provided in subsections

24 (b) and (c), each manufacturer, distributor, or retailer ad25 vertising or causing to be advertised, disseminating or
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1 causing to be disseminated, any labeling or advertising for

2 a tobacco product shall use only black text on a white

3 background.

4 (b) CERTAIN ADVERTISING EXCEPTED.—

5 (1) IN GENERAL.—Subsection (a) shall not

6 apply to advertising—

7 (A) in any facility where vending machines

8 and self-service displays are permitted under

9 this title if the advertising involved—

10 (i) is not visible from outside of the

11 facility; and

12 (ii) is affixed to a wall or fixture in

13 the facility;

14 (B) that appears in any publication

15 (whether periodic or limited distribution) that is

16 an adult publication.

17 (2) ADULT PUBLICATION.—For purposes of

18 paragraph (1)(B), the term ‘‘adult publication’’

19 means a newspaper, magazine, periodical, or other

20 publication—

21 (A) whose readers under 18 years of age

22 constitute 15 percent or less of the total reader23 ship as measured by competent and reliable

24 survey evidence; and
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1 (B) that is read by fewer than 2,000,000

2 individuals who are under 18 years of age as

3 measured by competent and reliable survey evi4 dence.

5 (c) AUDIO OR VIDEO FORMATS.—Each manufac6 turer, distributor or retailer advertising or causing to be

7 advertised any advertising for a tobacco product in an

8 audio or video format shall comply with the following:

9 (1) With respect to an audio format, the adver10 tising shall be limited to words only with no music

11 or sound effects.

12 (2) With respect to a video format, the advertis13 ing shall be limited to static black text only on a

14 white background. Any audio with the video adver15 tising shall be limited to words only with no music

16 or sound effects.

17 SEC. 729. AGREEMENT TO BAN ON NONTOBACCO ITEMS

18 AND SERVICES, CONTESTS AND GAMES OF

19 CHANCE, AND SPONSORSHIP OF EVENTS.

20 (a) BAN ON ALL NON-TOBACCO MERCHANDISE.—No

21 manufacturer, importer, distributor, or retailer shall mar22 ket, license, distribute, sell or cause to be marketed, li23 censed, distributed or sold any item (other than tobacco

24 products) or service, which bears the brand name (alone

25 or in conjunction with any other word), logo, symbol,
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1 motto, selling message, recognizable color or pattern of

2 colors, or any other indicia of product identification simi3 lar or identifiable to those used for any brand of tobacco

4 products.

5 (b) GIFTS, CONTESTS, AND LOTTERIES.—No manu6 facturer, distributor, or retailer shall offer or cause to be

7 offered to any person purchasing tobacco products any gift

8 or item (other than a tobacco product) in consideration

9 of the purchase of such products, or to any person in con10 sideration of furnishing evidence, such as credits, proofs11 of-purchase, or coupons, of such a purchase.

12 (c) SPONSORSHIP.—

13 (1) IN GENERAL.—No manufacturer, distribu14 tor, or retailer shall sponsor or cause to be spon15 sored any athletic, musical, artistic or other social or

16 cultural event, or any entry or team in any event, in

17 which the brand name (alone or in conjunction with

18 any other word), logo, motto, selling message, rec19 ognizable color or pattern of colors, or any other in20 dicia of product identification similar or identical to

21 those used for tobacco products is used.

22 (2) USE OF CORPORATE NAME.—A manufac23 turer, distributor, or retailer may sponsor or cause

24 to be sponsored any athletic, musical, artistic or

25 other social or cultural event in the name of the cor-
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1 poration which manufactures the tobacco product

2 if—

3 (A) both the corporate name and the cor4 poration were registered and in use in the

5 United States prior to January 1, 1995; and

6 (B) the corporate name does not include

7 any brand name (alone or in conjunction with

8 any other word), logo, symbol, motto, selling

9 message, recognizable color or pattern of colors,

10 or any other indicia or product identification

11 identical or similar to, or identifiable with,

12 those used for any brand of tobacco products.

13 CHAPTER 3—ENFORCEMENT

14 SEC. 731. FEDERAL ENFORCEMENT OF THE PROTOCOL.

15 (a) ACTIONS.—The Attorney General may bring an

16 action for the enforcement, or to restrain any breach, of

17 the Protocol in the United States District Court for the

18 District of Columbia or in the district court of the United

19 States for the district in which the breach occurred.

20 (b) REMEDY.—In any action under subsection (a),

21 the district court involved—

22 (1) shall restrain the conduct that is the subject

23 of the breach of the Protocol;

24 (2) shall order specific performance of the obli25 gations set forth in the Protocol;
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1 (3) may order civil penalties against any manu2 facturer who violates a requirement of the Protocol

3 in an amount not more than $250,000 per violation

4 per day; and

5 (4) with respect to officers of manufacturers

6 who knowingly violate the protocol, may impose ap7 propriate criminal penalties, including incarceration.

8 (c) CONTRACTS WITH STATE AGENCIES.—The Sec9 retary may award grants to or enter into contracts with

10 an agency of any State to assist in the enforcement of

11 the provisions of the Protocol.

12 (d) ACTION BY ATTORNEY GENERAL.—With respect

13 to the funding of any activities under subsection (a), the

14 Attorney General shall use amounts available in the Trust

15 Fund under section 102. If the Attorney General deter16 mines that amounts available in the Trust Fund are insuf17 ficient, the Attorney General may use amounts available

18 for the activities of the Department of Justice.

19 SEC. 732. STATE ENFORCEMENT OF THE PROTOCOL.

20 (a) CIVIL ACTION.—The attorney general of a State

21 may bring an action for the enforcement, or to restrain

22 a breach, of the Protocol if the alleged violation that is

23 the subject of the proceedings occurred in that State.

24 (b) CONCURRENT JURISDICTION.—Both Federal and

25 State courts shall have jurisdiction over a proceeding de-
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1 scribed in subsection (a). If such a proceeding is com2 menced in a district court of the United States, the court

3 shall take into consideration the size and scope of any

4 State penalties that have been applied for the identical vio5 lations.

6 (c) REMEDIES.—In any proceeding described in sub7 section (b) the remedies available shall be those described

8 in section 731(b).

9 SEC. 733. PRIVATE ENFORCEMENT OF PROTOCOL.

10 (a) IN GENERAL.—A manufacturer may seek a dec11 laration of the rights and obligations of the manufacturer

12 under the Protocol by filing an action pursuant to section

13 2201 of title 28, United States Code.

14 (b) CIVIL ACTION.—Any person may bring a civil ac15 tion against a manufacturer to enforce, or restrain

16 breaches of, the Protocol by such manufacturer, except

17 that—

18 (1) no such action may be commenced or main19 tained if the Secretary has settled a proceeding per20 taining to such alleged breach; and

21 (2) the court, in any such action, shall restrain

22 conduct in breach of the Protocol and order specific

23 performance of the obligations set forth in the Pro24 tocol, and may award damages which at a minimum

25 will recover any economic benefit derived as a result
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1 of the noncompliance involved together with an

2 amount awarded as a suitable penalty associated

3 with such breach.

4 Any damages awarded under this subsection shall be re5 mitted to the Treasury.

6 (c) RIGHT OF INTERVENTION.—In any proceeding

7 described in section 731(a) or 732(a), any manufacturer

8 may intervene as a matter of right.

9 TITLE VIII—MISCELLANEOUS

10 PROVISIONS

11 SEC. 801. PROHIBITION ON USE OF FUNDS TO FACILITATE

12 THE EXPORTATION OR PROMOTION OF TO13 BACCO.

14 (a) IN GENERAL.—Notwithstanding any other provi15 sion of law, no funds made available by appropriations or

16 otherwise made available may be used by any officer, em17 ployee, department, or agency of the United States—

18 (1) to promote or encourage the export, reex19 port, sale, manufacture, advertising, promotion, dis20 tribution, or use of tobacco or tobacco products to

21 or in a foreign country; or

22 (2) to seek, through negotiation or otherwise,

23 the removal or reduction by any foreign country of

24 any restriction or proposed restriction in that coun25 try on the importation, export, reexport, sale, manu-
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1 facture, advertising, promotion, distribution, packag2 ing, labeling, use, content, imposition of tariffs, or

3 taxation, of tobacco or tobacco products.

4 (b) EXCEPTION.—Subsection (a)(2) shall not apply

5 to any restriction or proposed restriction by a foreign

6 country if—

7 (1) the restriction is applied in a manner which

8 constitutes a means of arbitrary or unjustifiable dis9 crimination between countries;

10 (2) the Secretary of Commerce certifies in writ11 ing to Congress that the restriction is being applied

12 in a manner that constitutes a means of arbitrary or

13 unjustifiable discrimination between countries; and

14 (3) the Secretary of Health and Human Serv15 ices certifies to Congress in writing that the restric16 tion is not a reasonable means of protecting the pub17 lic health.

18 (c) DEFINITION.—In this section, the term ‘‘arbi19 trary or unjustifiable discrimination’’ means a restriction

20 or proposed restriction by a foreign country that—

21 (1) is arbitrary or unjustifiable; and

22 (2) does not adhere to the principle of national

23 treatment and applies less favorable treatment to

24 goods that are imported into that country than the
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1 country applies to like goods that are the product,

2 growth, or manufacture of that country.

3 SEC. 802. WHISTLEBLOWER PROTECTIONS.

4 (a) PROHIBITION OF REPRISALS.—An employee of

5 any manufacturer, distributor, or retailer of a tobacco

6 product may not be discharged, demoted, or otherwise dis7 criminated against (with respect to compensation, terms,

8 conditions, or privileges of employment) as a reprisal for

9 disclosing to an employee of the Food and Drug Adminis10 tration, the Department of Health and Human Services,

11 the Department of Justice, the Congress, or any State or

12 local regulatory or enforcement authority, information re13 lating to a violation of law related to this Act or a State

14 or local law that furthers the purposes of this Act.

15 (b) ENFORCEMENT.—Any employee or former em16 ployee who believes that such employee has been dis17 charged, demoted, or otherwise discriminated against in

18 violation of subsection (a) may file a civil action in the

19 appropriate United States district court before the end of

20 the 2-year period beginning on the date of such discharge,

21 demotion, or discrimination.

22 (c) REMEDIES.—If the district court determines that

23 a violation has occurred, the court may order the manufac24 turer, distributor, or retailer involved to—
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1 (1) reinstate the employee to the employee’s

2 former position;

3 (2) pay compensatory damages; or

4 (3) take other appropriate actions to remedy

5 any past discrimination.

6 (d) LIMITATION.—The protections of this section

7 shall not apply to any employee who—

8 (1) deliberately causes or participates in the al9 leged violation of law or regulation; or

10 (2) knowingly or recklessly provides substan11 tially false information to the Food and Drug Ad12 ministration, the Department of Health and Human

13 Services, the Department of Justice, or any State or

14 local regulatory or enforcement authority.

15 (e) APPLICATION OF FALSE CLAIMS ACT.—Section

16 3730(d) of title 31, United States Code, shall apply with

17 respect to any employee to which this section applies if

18 the disclosure of such employee results in a payment of

19 any fee or fine to the Federal Government by the manu20 facturer, distributor or retailer involved, regardless of

21 whether such employee ever commenced an action con22 cerning the disclosure.
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1 SEC. 803. PROHIBITIONS RELATING TO TOBACCO PROD2 UCTS AND CHILDREN.

3 (a) IN GENERAL.—Chapter VIII of the Federal

4 Food, Drug, and Cosmetic Act (21 U.S.C. 381 et seq.)

5 is amended by adding at the end the following:

6 ‘‘SEC. 804. PROHIBITION ON SALE OR DISTRIBUTION OF TO7 BACCO PRODUCTS TO CHILDREN.

8 ‘‘(a) GENERAL RULE.—It shall be unlawful for any

9 domestic concern or any officer, director, employee, or

10 agent of such concern to make use of the mails or any

11 means or instrumentality of interstate commerce to cause

12 or contribute, either directly or through a foreign subsidi13 ary, joint venture, affiliate, or licensee, to—

14 ‘‘(1) the sale or distribution of tobacco products

15 in a foreign country to children; or

16 ‘‘(2) the advertising or promotion of tobacco

17 products in a foreign country in a manner that ap18 peals to children.

19 ‘‘(b) INTERPRETATION.—For purposes of subsection

20 (a), the advertising or promotion of tobacco products shall

21 be considered to be in a manner that appeals to children

22 if the advertising or promotion is carried out in a manner

23 that would not be permissible under the regulations re24 ferred to in section 202 of the Healthy Kids Act if it oc25 curred in the United States.
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1 ‘‘SEC. 805. LABELING.

2 ‘‘It shall be unlawful for any domestic concern or any

3 officer, director, employee, or agent of such concern, either

4 directly or through a foreign subsidiary, joint venture, af5 filiate, or licensee, to make use of the mails or any means

6 or instrumentality of interstate commerce to cause or con7 tribute to the export from the United States or the sale

8 or distribution in, or export from, any other country any

9 tobacco product the package of which does not contain a

10 warning label that—

11 ‘‘(1) is in the primary language or languages of

12 the country in which the tobacco product is sold or

13 distributed to consumers; and

14 ‘‘(2) except for the requirement of paragraph

15 (1)—

16 ‘‘(A) complies with Federal requirements

17 for labeling of similar tobacco products manu18 factured, imported, or packaged for sale or dis19 tribution in the United States; or

20 ‘‘(B) complies with the labeling require21 ments of the foreign country in which the prod22 uct is sold or distributed to consumers and

23 which labeling requirements the Secretary de24 termines are substantially similar to Federal re25 quirements and are adequately enforced by such

26 country.’’.
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1 (b) ENFORCEMENT.—Section 301 of the Federal

2 Food, Drug, and Cosmetic Act (21 U.S.C. 331) as amend3 ed by section 203(e), is further amended by adding at the

4 end the following:

5 ‘‘(cc) To carry out an act made unlawful by section

6 804 or 805.

7 (c) REWARD.—Section 303(b)(5) of the Federal

8 Food, Drug, and Cosmetic Act (21 U.S.C. 333)(b)(5)) is

9 amended by adding at the end the following: ‘‘If a person

10 provides information leading to the institution of a crimi11 nal proceeding against, and conviction of, a person for a

12 violation of section 301(cc), such person shall be entitled

13 to one-half of the criminal fine imposed and collected for

14 such violation but not more than $125,000.’’.

15 (d) DEFINITIONS.—Section 201 of the Federal Food,

16 Drug, and Cosmetic Act (21 U.S.C. 321) as amended by

17 section 203(a)(3), is further amended by adding at the

18 end the following:

19 ‘‘(ll) The term ‘domestic concern’ means—

20 ‘‘(1) any individual who is a citizen, national, or

21 resident of the United States; and

22 ‘‘(2) any corporation, partnership, association,

23 joint-stock company, business trust, unincorporated

24 organization, or sole proprietorship which has its

25 principal place of business in the United States or
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1 which is organized under the laws of a State of the

2 United States or a territory, possession, or common3 wealth of the United States.

4 ‘‘(mm) The term ‘children’ means an individual under

5 the age of 18.’’.

6 SEC. 804. PRESERVATION OF STATE AND LOCAL AUTHOR7 ITY.

8 Except as otherwise provided for in this Act (or an

9 amendment made by this Act), nothing in this Act shall

10 be construed as prohibiting a State or political subdivision

11 of a State from imposing requirements, prohibitions, pen12 alties or other measures, whether by statute, rule, regula13 tion, ordinance, judicial decree, consent decree, or settle14 ment agreement, to further the purposes of this Act that

15 are in addition to the requirements, prohibitions, or pen16 alties required under this Act. Nothing in this Act (or an

17 amendment made by this Act) shall preclude or deny the

18 right of any State or political subdivision of a State to

19 adopt or enforce any requirements, prohibitions, or pen20 alties relating to tobacco products to the extent that such

21 requirements, prohibitions or penalties are not less strin22 gent than those required under this Act (or amendments).

23 SEC. 805. SEVERABILITY.

24 If any provision of this Act, an amendment made by

25 this Act, or the application of such provision or amend-
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1 ment to any person or circumstance is held to be unconsti2 tutional, the remainder of this Act, the amendments made

3 by this Act, and the application of the provisions of such

4 to any person or circumstance shall not be affected there5 by.

6 TITLE IX—PROVISIONS RELAT7 ING TO NATIVE AMERICANS

8 SEC. 901. PROVISIONS RELATING TO NATIVE AMERICANS.

9 (a) IN GENERAL.—The provisions of this Act (or an

10 amendment made by this Act) shall apply to the manufac11 ture, distribution, and sale of tobacco products in any area

12 within the jurisdiction of an Indian tribe or tribal organi13 zation.

14 (b) RELIGIOUS PRACTICE EXCEPTION.—In recogni15 tion of the religious, traditional and ceremonial uses of

16 tobacco and tobacco products by many Indian tribes and

17 the members of such tribes, nothing in this Act (or an

18 amendment made by this Act) shall be construed to in19 fringe upon the rights of such tribes or members to trans20 fer, acquire, possess, or use any tobacco or tobacco prod21 ucts for such purposes. The preceding sentence shall only

22 be construed to apply to those quantities of tobacco prod23 ucts necessary to fulfill recognized religious, traditional or

24 ceremonial purposes and not to permit the general market25 ing of tobacco products not in compliance with subchapter
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1 F of chapter V of the Federal Food, Drug and Cosmetic

2 Act.

3 (c) PAYMENTS TO TRUST FUND.—Any Indian tribe

4 or tribal organization that engages in the manufacturer

5 of tobacco products shall be subject to liability for an as6 sessment under section 102.

7 (d) APPLICATION OF FEDERAL FOOD, DRUG AND

8 COSMETIC ACT REQUIREMENTS.—

9 (1) IN GENERAL.—The Secretary, in consulta10 tion with the Secretary of the Interior, shall promul11 gate regulations to provide for the application of any

12 requirements of the Food, Drug and Cosmetic Act

13 with respect to tobacco products manufactured, dis14 tributed, or sold in any area within the jurisdiction

15 of an Indian tribe or tribal organization as appro16 priate to comply with subsections (a) and (b).

17 (2) ELIGIBILITY FOR ASSISTANCE.—Under the

18 regulations promulgated under paragraph (1), the

19 Secretary, after consultation with the Secretary of

20 the Interior, may provide assistance to an Indian

21 tribe or tribal organization in meeting and enforcing

22 the requirements under such regulations if—

23 (A) the tribe or organization has a govern24 ing body that has powers and carries out duties

25 that are similar to the powers and duties of
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1 State or local governments and requests such

2 assistance by application to the Secretary;

3 (B) the functions to be exercised through

4 the use of such assistance relate to activities

5 within the exterior boundaries of the reservation

6 or other areas within the jurisdiction of the

7 tribe involved; and

8 (C) the tribe or organization is reasonably

9 expected to be capable of carrying out the func10 tions required by the Secretary.

11 (3) DETERMINATIONS.—The Secretary, in con12 sultation with the Secretary of the Interior, shall

13 make determinations concerning the eligibility of an

14 Indian tribe or tribal organization for assistance

15 under regulations under paragraph (1) not later

16 than 90 days after the date on which such tribe or

17 organization submits an application for such assist18 ance.

19 (4) IMPLEMENTATION BY SECRETARY.—If the

20 Secretary determines that the Indian tribe or tribal

21 organization is not willing or qualified to administer

22 the requirements of the regulations promulgated

23 under this subsection, the Secretary, in consultation

24 with the Secretary of the Interior, shall implement
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1 and enforce such regulations on behalf of the tribe

2 or organization.

3 (e) RETAIL LICENSING REQUIREMENTS.—

4 (1) IN GENERAL.—The requirements of section

5 577 of the Federal Food, Drug and Cosmetic Act

6 (as added by section 204 of this Act) shall apply to

7 retailers that sell tobacco products in any area with8 in the jurisdiction of an Indian tribe or tribal orga9 nization.

10 (2) SELF-REGULATION.—In order to be eligible

11 for funds under subsection (f), an Indian tribe or

12 tribal organization shall implement a tribal licensing

13 program within the exterior boundaries of the res14 ervation and other areas within the jurisdiction of

15 the tribe consistent with the regulations promulgated

16 under section 577 of the Federal Food, Drug and

17 Cosmetic Act.

18 (3) IMPLEMENTATION BY SECRETARY.—If the

19 Secretary, in consultation with the Secretary of the

20 Interior, determines that the Indian tribe or tribal

21 organization is not qualified to administer the re22 quirements of section 577 of the Federal Food,

23 Drug and Cosmetic Act, the Secretary, in consulta24 tion with the Secretary of the Interior, shall imple-
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1 ment such requirements on behalf of the tribe or or2 ganization.

3 (f) ELIGIBILITY FOR PUBLIC HEALTH PAYMENTS.—

4 (1) IN GENERAL.—For each fiscal year the Sec5 retary shall pay to each Indian tribe that has an ap6 proved tribal anti-smoking plan a tribal grant for

7 the fiscal year in an amount equal to the amount de8 termined under paragraph (3), and shall reduce the

9 amounts payable under section 111 to any State in

10 which the service area or areas of the Indian tribe

11 are located by the amount so determined.

12 (2) PLAN.—To be eligible to receive a payment

13 under paragraph (1), an Indian tribe shall prepare

14 and submit to the Secretary for approval an anti15 smoking plan and shall otherwise meet the require16 ments of subsection (e).

17 (3) AMOUNT DETERMINED.—The amount of

18 any funds for which an Indian tribe is eligible under

19 paragraph (1) shall be determined by the Secretary

20 based on the ratio of the total number of Indians re21 siding on such tribe’s reservation or in areas within

22 the jurisdiction of the tribe in the State to the total

23 population of the State multiplied by the amount al24 located to State under section 111.
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1 (4) USE.—Amounts provided to a tribe or orga2 nization under this paragraph shall be used to reim3 burse the tribe for smoking-related health expendi4 tures, to further the purposes of this Act, and in ac5 cordance with a plan submitted by the tribe or orga6 nization and approved by the Secretary as being in

7 compliance with this Act. Tribes and tribal organiza8 tions shall have the flexibility to utilize such

9 amounts to meet the unique health needs of such

10 tribes within the context of tribal health programs

11 if such programs meet the fundamental Federal re12 quirements under this Act as determined by the Sec13 retary.

14 (5) REALLOTMENT.—Any amounts set-aside

15 and not expended under this paragraph shall be re16 allotted among other eligible tribes and organiza17 tions.

18 (g) OBLIGATION OF MANUFACTURERS.—A partici19 pating manufacturer shall not engage in any activity in

20 an area within the jurisdiction of an Indian tribe or tribal

21 organization that is prohibited under the Protocol.

22 (h) INDIAN HEALTH SERVICE.—Amounts made

23 available under section 101(d)(5)(B) shall be provided to

24 the Indian Health Service to be used for anti-tobacco-re25 lated consumption and cessation activities including—
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1 (1) clinic and facility design, construction, re2 pair, renovation, maintenance and improvement;

3 (2) provider services and equipment;

4 (3) domestic and community sanitation associ5 ated with clinic and facility construction and im6 provement;

7 (4) inpatient and outpatient services; and

8 (5) other programs and services provided

9 through the Indian Health Service or through tribal

10 contracts, compacts, grants or cooperative agree11 ments with the Indian Health Service and which are

12 deemed appropriate to raising the health status of

13 Indians.

14 (i) PREEMPTION.—

15 (1) GENERAL PREEMPTION.—Except as other16 wise provided for in this section, nothing in this Act

17 shall be construed as prohibiting an Indian tribe or

18 tribal organization from imposing requirements, pro19 hibitions, penalties or other measures to further the

20 purposes of this Act that are in addition to the re21 quirements, prohibitions, or penalties required under

22 this Act.

23 (2) PUBLIC EXPOSURE TO SMOKE.—Nothing in

24 the amendment made by title V shall be construed

25 to preempt or otherwise affect any Indian tribe or
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1 tribal organization rule or practice that provides

2 greater protection from the health hazards of envi3 ronmental tobacco smoke.

4 (3) NATIVE AMERICANS.—A State may not im5 pose obligations or requirements relating to the ap6 plication of this Act to Indian tribes and tribal orga7 nizations.

Æ