(B) 8 percent of such amounts shall be
made available to such Trust Fund for each of
the 11th through 15th fiscal years after the
date of enactment of this Act;
(C) 9 percent of such amounts shall be
made available to such Trust Fund for each of
the 16th through 25th fiscal years after the
date of enactment of this Act; and
(D) 10 percent of such amounts shall be
made available to such Trust Fund for each
subsequent fiscal year.
(9) For carrying out section 134, $250,000,000
shall be made available in each of the 3 fiscal years
described in such section;
(10) For reducing the debt—
(A) 6 percent of such amounts shall be
made available for such reduction in each of the
6th through 10th fiscal years after the date of
enactment of this Act;
(B) 10 percent of such amounts shall be
made available for such reduction in each of the
11th through 15th fiscal years after the date of
enactment of this Act;
(C) 11 percent of such amounts shall be
made available for such reduction in each of the
16th through 25th fiscal years after the date of
enactment of this Act; and
(D) 12 percent of such amounts shall be
made available for such reduction in each sub-
sequent fiscal year.
(e) BUDGETARY TREATMENT AND DEFINITION.—
(1) TREATMENT.—Amounts made available
under paragraphs (8) and (10) of subsection (d)
shall not be included—
(A) by the Office of Management and
Budget in the estimates and reports required by
sections 252(b) and 254 of the Balanced Budg-
et and Emergency Deficit Control Act of 1985;
and
(B) by the Committee on the Budget of
the House of Representatives and the Commit-
tee on the Budget of the Senate for purposes of
congressional enforcement under section 302(f)
and 311(2)(B) of the Congressional Budget Act
of 1974 and section 202 of House Concurrent
Resolution 67 (104th Congress).
(2) DEFINITION.—In subsection (d)(10), the
term ‘‘debt’’ means any obligation of the Federal
Government included in the debt subject to limit.
SEC. 102. LIABILITY OF TOBACCO PRODUCT MANUFACTUR-
ERS.
(a) PAYMENTS.—
(1) INITIAL PAYMENT.—
(A) IN GENERAL.—Not later than 90 days
after the date of enactment of this Act, each
manufacturer shall pay to the Trust Fund an
amount 
that 
bears 
the 
same 
ratio 
to
$16,000,000,000 as the average stock market
capitalization of the tobacco manufacturer (as
defined in subparagraph (B)) bears to the aver-
age stock market capitalization of all tobacco
manufacturers for 1996.
(B) AVERAGE STOCK MARKET CAPITALIZA-
TION.—For purposes of paragraph (1), the av-
erage stock market capitalization of a manufac-
turer for a year shall be determined by the Sec-
retary of the Treasury based on data submitted
by manufacturers and other appropriate data.
Such determinations shall be made regardless
of whether the manufacturer issues stock.
(2) SUBSEQUENT PAYMENTS.—
(A) with respect to the first fiscal year fol-
lowing the year in which the amount is paid
under paragraph (1), each manufacturer shall
pay to the Trust Fund an amount which bears
the same ratio to $24,330,000,000 as the man-
ufacturer’s gross receipts from the domestic vol-
ume of sales of tobacco products it made during
the year for which the payment is made bears
to $24,330,000,000;
(B) with respect to the 2d such fiscal year
following the year in which the amount is paid
under paragraph (1) and each of the next 2
succeeding fiscal years, each manufacturer shall
pay to the Trust Fund an amount which bears
the same ratio to $26,330,000,000 as the man-
ufacturer’s gross receipts from the domestic vol-
ume of sales of tobacco products it made during
the year for which the payment is made bears
to $26,330,000,000;
(C) with respect to the 5th fiscal year fol-
lowing the year in which the amount is paid
under paragraph (1) and each of the next 4
succeeding fiscal years, each manufacturer shall
pay to the Trust Fund an amount which bears
the same ratio to $27,360,000,000 as the man-
ufacturer’s gross receipts from the domestic vol-
ume of sales of tobacco products it made during
the year for which the payment is made bears
to $27,360,000,000;
(D) with respect to the 10th fiscal year fol-
lowing the year in which the amount is paid
under paragraph (1) and each of the next 5
succeeding fiscal years, each manufacturer shall
pay to the Trust Fund an amount which bears
the same ratio to $29,850,000,000 as the man-
ufacturer’s gross receipts from the domestic vol-
ume of sales of tobacco products it made during
the year for which the payment is made bears
to $29,850,000,000;
(E) with respect to the 16th fiscal year fol-
lowing the year in which the amount is paid
under paragraph (1) and each of the next 8
succeeding fiscal years, each manufacturer shall
pay to the Trust Fund an amount which bears
the same ratio to $29,120,000,000 as the man-
ufacturer’s gross receipts from the domestic vol-
ume of sales of tobacco products it made during
the year for which the payment is made bears
to $29,120,000,000;
(3) SMALL MANUFACTURERS.—In the case of
small cigar, large cigar, snuff, chewing tobacco, pipe
tobacco, and roll-your-own tobacco manufacturers,
the amount to be paid under paragraph (2) shall be
based on one-half of the gross receipts from the do-
mestic volume of sales of the tobacco product it
made during the year for which the payment is to
be made.
(4) ANNUAL ASSESSMENTS AND COLLECTION.—
For each calendar year beginning with the first full
fiscal year following the calendar year in which this
Act is enacted, the Secretary shall assess each man-
ufacturer an amount determined under this sub-
section. Such assessments shall be collected in a
manner similar to the manner in which excise taxes
are collected under chapter 52 of the Internal Reve-
nue Code of 1986.
(b) INFLATION ADJUSTMENT.—In the case of a cal-
endar year after 2001, the dollar amount described in sub-
paragraph (C) of paragraphs (1), (2), (3), (4), (5), (6),
(7), and (8), and the percentage in subparagraph (C) of
paragraph (4), applicable to the preceding calendar year
shall be increased by an amount equal to—
(1) such dollar amount (or percentage), multi-
plied by
(2) the greater of—
(A) the medical consumer price percentage
increase for such calendar year as determined
in the same manner as the adjustment is deter-
mined under section 1(f)(3) of the Internal
Revenue Code of 1986 for such calendar year
by substituting ‘‘the second preceding calendar
year’’ for ‘‘calendar year 1992’’ in subpara-
graph (B) thereof; or
(B) 3 percent.
(c) 
ASSESSMENTS
APPLICABLE
TO
FLOOR
STOCKS.—
(1) IN GENERAL.—Tobacco products manufac-
tured in or imported into the United States which
are removed before any assessment date, and held
on such date for sale by any person, shall be subject
to an assessment in an amount equal to the excess
of—
(A) the assessment which would be im-
posed under subsection (b) on the product if the
product had been removed on such date, over
(B) the prior assessment (if any) imposed
under such subsection on such product.
(2) LIABILITY FOR ASSESSMENT AND METHOD
OF PAYMENT.—
(A) LIABILITY FOR ASSESSMENT.—A per-
son holding tobacco products on any assessment
date, to which any assessment imposed under
paragraph (1) applies shall be liable for such
assessment.
(B) METHOD OF PAYMENT.—The assess-
ment imposed under paragraph (1) shall be
paid in such manner as the Secretary of the
Treasury shall prescribe by regulations.
(C) TIME FOR PAYMENT.—The assessment
imposed under paragraph (1) shall be paid on
or before April 1 following any assessment date.
(3) ARTICLES
IN
FOREIGN
TRADE
ZONES.—
Notwithstanding the Act of June 18, 1934 (48 Stat.
998, 19 U.S.C. 81a) and any other provision of law,
any product which is located in a foreign trade zone
on any assessment date, shall be subject to the as-
sessment imposed by paragraph (1) if—
(A) internal revenue taxes have been deter-
mined, or customs duties liquidated, with re-
spect to such product before such date; or
(B) such article is held on such date under
the supervision of a customs officer.
(4) ASSESSMENT
DATE.—The term ‘‘assess-
ment date’’ means January 1.
(d) NO TAX BENEFIT.—
(1) IN
GENERAL.—The initial payment de-
scribed in subsection (a)(1) shall not be considered
to be an ordinary and necessary expense in carrying
on a trade or business for purposes of the Internal
Revenue Code of 1986 and shall not be tax deduct-
ible.
(2) LOOK-BACK PENALTIES.—The payment of
penalties under title III shall not be considered to be
an ordinary and necessary expense in carrying on a
trade or business for purposes of the Internal Reve-
nue Code of 1986 and shall not be deductible.
(e) EFFECT OF BANKRUPTCY.—Section 507(a)(8) of
title 11, United States Code, is amended—
(1) in subparagraph (F)(iii), by striking ‘‘or’’ at
the end;
(2) in subparagraph (G), by striking the period
and inserting ‘‘; or’’; and
(3) by adding at the end the following:
‘‘(H) a payment, an assessment, or a pen-
alty to be paid into the Health Enhancement
and Lowered Tobacco Hazards for Young Kids
Trust Fund under section 102 (or any other
section) of the Healthy Kids Act.’’.
(f) LIMITATION.—A manufacturer may not utilize
any proceeds from liability insurance coverage to make
payments or pay assessments under this section.
(g) HEALTHY KIDS STAMP.—The Secretary shall
promulgate regulations to provide that a Healthy Kids
Stamp be affixed to each package of a tobacco product
for which an assessment has been paid under this section.
(h) NONAPPLICATION
TO CERTAIN MANUFACTUR-
ERS.—
(1) EXEMPTION.—A manufacturer described in
paragraph (2) shall be exempt from the require-
ments of this section relating to—
(A) the payment of an initial payment
under subsection (a)(1); and
(B) the payment of that portion of the an-
nual assessments under this section that will be
provided under paragraphs (1) through (4) of
section 101(d) to States.
(2) MANUFACTURER.—A manufacturer de-
scribed in this section is a manufacturer that has re-
solved tobacco-related civil actions with more than
25 States (in this paragraph referred to as ‘‘settling
States’’) prior to January 1, 1998 through written
settlement agreements signed by the attorneys gen-
eral of such States, so long as such manufacturer
provides to all other States by not later than Decem-
ber 31, 1998, the opportunity to enter into written
settlement agreements that are substantially similar
to the agreements that such manufacturer has en-
tered into with the settling States and that provide
such other States with the most favorable annual
payment terms of its written settlement offers to the
settling States.
(3) LIMITATION.—The provisions of paragraph
(1) shall apply only to assessments on cigarettes to
the extent that such cigarettes constitute less than
3 percent of all cigarettes manufactured and distrib-
uted for consumer use in any year.
SEC. 103. LICENSING OF MANUFACTURERS.
(a) IN GENERAL.—The Secretary, acting through the
Food and Drug Administration, shall establish a tobacco
manufacturer licensing program.
(b) REQUIREMENT.—A manufacturer or importer
shall have in effect a license issued under the program
under subsection (a) in order—
(1) to be eligible to manufacture and distribute
tobacco products in the United States, or, in the
case of an importer, to be eligible to import tobacco
products; and
(2) to be eligible to receive the protections pro-
vided under subtitle A of title VII.
(c) ELIGIBILITY.—A manufacturer or importer shall
not be eligible to receive a license under this section if
such manufacturer or importer has failed to pay the pay-
ment of assessment required under section 102 or fails
to comply with such other requirements as the Secretary
may prescribe in furtherance of the purposes of this Act.
(d) REVOCATION AND SUSPENSION.—The Secretary
shall promulgate regulations to provide for the enforce-
ment of the program established under section (a). Such
regulations shall provide for the revocation or suspension
of a license for nonpayment of required assessments.
SEC. 104. ENFORCEMENT.
(a) IN GENERAL.—The Secretary of the Treasury, in
consultation with the Secretary of Health and Human
Services, shall enforce the provisions of section 102 with
respect to any manufacturer that fails to pay any amount
assessed under section 102.
(b) AMOUNT OF PENALTY.—The amount of the pen-
alty imposed by subsection (a) on any failure with respect
to a manufacturer shall be established by the Secretary
of the Treasury for each day during the noncompliance
period, except that no such penalty shall be less than
$25,000 plus interest.
(c) NONCOMPLIANCE PERIOD.—For purposes of this
section, the term ‘‘noncompliance period’’ means, with re-
spect to any failure to pay an assessment under section
102, the period—
(1) beginning on the due date for such pay-
ment; and
(2) ending on the date on which such payment
is paid in full.
Subtitle B—Payments
CHAPTER 1—TO STATES
SEC. 111. PAYMENTS TO STATES.
(a) AVAILABILITY OF FUNDS.—
(1) IN GENERAL.—The amounts made available
for a fiscal year under section 101(d)(1) shall be
made available to carry out subsections (b) and (d).
(2) NO
OVERPAYMENT.—With respect to the
amount provided to a State under paragraph (1) for
a fiscal year, the Secretary shall not treat such
amount as an overpayment under any joint Federal-
State health program.
(3) FISCAL YEAR LIMITATION.—Amounts made
available for a fiscal year under subsection (b) shall
not exceed the amount available for such fiscal year
under section 101(d)(1).
(b) REIMBURSEMENT.—
(1) IN
GENERAL.—The Secretary shall use
amounts made available under subsection (a)(1) in
each fiscal year to provide funds to each State that
is eligible under subsection (c) to reimburse such
State for amounts expended by the State under the
State program under title XIX of the Social Security
Act (42 U.S.C. 1396 et seq.) or any other State
health program for the treatment of individuals with
tobacco-related illnesses or conditions.
(2) AMOUNT.—
(A) IN GENERAL.—Except as provided in
subparagraph (B), the amount for which a
State is eligible under paragraph (1) shall be
based on the ratio of the total Federal pay-
ments to the State under title XIX of the Social
Security Act (42 U.S.C. 1396 et seq.) for the
fiscal year involved to the total Federal pay-
ments to all States under such title for such fis-
cal year.
(B) FEDERAL
PAYMENT
REVISION.—For
purposes of subparagraph (A), the Common-
wealth of Puerto Rico, Guam, the Virgin Is-
lands, the Northern Mariana Islands, and
American Samoa shall be treated as having re-
ceived Federal payments under title XIX of the
Social Security Act (42 U.S.C. 1396 et seq.)
without limitation under section 1108(c) of
such Act (42 U.S.C.1308(c)).
(3) ADJUSTMENT.—With respect to a fiscal
year in which the amount determined under para-
graphs (1) and (2) of subsection (a) exceeds the lim-
itation under subsection (a)(3), the Secretary shall
make pro rata reductions in the amounts provided to
States under this subsection.
(4) REALLOTMENT.—The amount for which a
State is eligible under this subsection that is not
made available to the State as a result of the failure
of the State to meet the requirements of subsection
(c) shall be made available to other States on a pro
rata basis.
(5) USE OF FUNDS.—Amounts provided to a
State under this subsection shall be used—
(A) to reimburse the State for expenses in-
curred by the State under the State program
under title XIX of the Social Security Act (42
U.S.C. 1396 et seq.) relating to the treatment
of tobacco-related illnesses or conditions;
(B) to reimburse the State for other ex-
penses incurred by the State in providing di-
rectly, or reimbursing others for the provision
of, treatment for tobacco-related illnesses or
conditions; and
(C) to provide funds to local governmental
entities as provided for in subsection (d).
(c) ELIGIBILITY.—To be eligible to receive funds
under this section a State shall—
(1) agree to resolve in accordance with section
701 any civil action that has been commenced by the
State against a tobacco manufacturer, distributor, or
retailer of a tobacco product seeking recovery for ex-
penditures attributable to the treatment of tobacco
induced illnesses and conditions or other damages;
(2) prepare and submit to the Secretary for ap-
proval a plan describing the manner in which the
State will comply with the requirements of sub-
section (d) and a certification that all actions de-
scribed in paragraph (1) have been resolved; and
(3) comply with the provisions of subsection (d)
with respect to State and local governments.
(d) FUNDS
FOR
LOCAL
GOVERNMENTAL
ENTI-
TIES.—To be eligible to receive funds under subsection
(b), a State shall have adopted procedures to provide an
equitable portion of such funds to local governmental enti-
ties within the State that can demonstrate that such enti-
ties incurred tobacco-related health costs through—
(1) contributions to the program under title
XIX of the Social Security Act (42 U.S.C. 1396 et
seq.);
(2) the provision of indigent care;
(3) the provision of health care coverage to gov-
ernmental employees; or
(4) the implementation of tobacco product en-
forcement or tobacco product regulatory require-
ments in accordance with this Act.
(e) REVIEW OF STATE PLANS BY SECRETARY.—The
Secretary shall, in accordance with regulations of the Sec-
retary, review each State plan submitted in accordance
with subsection (c)(2) and shall provide local governments
located within each State with an opportunity to comment
on the adequacy of the State plan for such State. The
Secretary shall not approve any such State plan unless
the Secretary makes an explicit written finding that local
governmental entities will receive an equitable portion of
the funds provided under subsection (a) or (b) of this sec-
tion in light of the factors listed in subsection (d).
CHAPTER 2—FEDERAL HEALTH
PROGRAMS
SEC. 121. NATIONAL INSTITUTES OF HEALTH TRUST FUND
FOR HEALTH RESEARCH.
(a) CREATION OF TRUST FUND.—There is estab-
lished in the Treasury of the United States a trust fund
to be known as the ‘‘National Institutes of Health Trust
Fund for Health Research’’ (hereafter referred to in this
section as the ‘‘Trust Fund’’), consisting of such amounts
as may be appropriated or transferred to the Trust Fund
as provided in this section.
(b) FUNDING.—There shall be transferred to the
Trust Fund an amount equal to the amount made avail-
able for a fiscal year under section 101(d)(6) to carry out
this section in such fiscal year.
(c) OBLIGATIONS FROM TRUST FUND.—
(1) IN GENERAL.—Subject to the provisions of
paragraph (4), with respect to the amounts made
available in the Trust Fund in a fiscal year, the Sec-
retary shall distribute during any fiscal year—
(A) 2 percent of such amounts to the Of-
fice of the Director of the National Institutes of
Health to be allocated at the Director’s discre-
tion—
(i) for carrying out the responsibilities
of the Office of the Director, including the
Office of Research on Women’s Health and
the Office of Research on Minority Health,
the Office of Alternative Medicine, the Of-
fice of Rare Disease Research, the Office
of Behavioral and Social Sciences Research
(for use for efforts to reduce tobacco use),
the Office of Dietary Supplements, and the
Office for Disease Prevention; and
(ii) for construction and acquisition of
equipment for or facilities of or used by
the National Institutes of Health;
(B) 2 percent of such amounts for transfer
to the National Center for Research Resources
to carry out section 1502 of the National Insti-
tutes of Health Revitalization Act of 1993 con-
cerning Biomedical and Behavioral Research
Facilities;
(C) 7.5 percent of such amounts to be used
for research into the prevention and cure of
cancer;
(D) 7.5 percent of such amounts to be
used as provided for in section 601;
(E) 1 percent of such amounts to be used
for prevention research programs at the Centers
for Disease Control and Prevention;
(F) 1 percent of such amounts to be used
for quality and health outcomes research at the
Agency for Health Care Policy and Research;
(G) the remainder of such amounts to
member institutes and centers, including the
Office of AIDS Research, of the National Insti-
tutes of Health in the same proportion to such
remainder, as the amount of annual appropria-
tions under appropriations Acts for each mem-
ber institute and center for the fiscal year bears
to the total amount of appropriations under ap-
propriations Acts for all member institutes and
centers of the National Institutes of Health for
the fiscal year.
(2) PLANS
OF
ALLOCATION.—The amounts
transferred under paragraph (1)(G) shall be allo-
cated by the Director of the National Institutes of
Health or the various directors of the institutes and
centers, as the case may be, pursuant to allocation
plans developed by the various advisory councils to
such 
directors, 
after 
consultation 
with 
such
directors.
(3) GRANTS AND CONTRACTS FULLY FUNDED
IN FIRST YEAR.—With respect to any grant or con-
tract funded by amounts distributed under para-
graph (1), the full amount of the total obligation of
such grant or contract shall be funded in the first
year of such grant or contract, and shall remain
available until expended.
(4) TRIGGER AND RELEASE OF MONIES AND
PHASE-IN.—
(A) TRIGGER AND RELEASE.—No expendi-
ture shall be made under paragraph (1) during
any fiscal year in which the annual amount ap-
propriated for the National Institutes of Health
under 1 or more appropriations Acts (not in-
cluding amounts provided for purposes of this
section) is less than the amount so appropriated
for the prior fiscal year.
(B) PHASE-IN.—The Secretary shall phase
in the distributions required under paragraph
(1) so that—
(i) 25 percent of the amount in the
Trust Fund is distributed in the first fiscal
year for which funds are available;
(ii) 50 percent of the amount in the
Trust Fund is distributed in the second
fiscal year for which funds are available;
(iii) 75 percent of the amount in the
Trust Fund is distributed in the third fis-
cal year for which funds are available; and
(iv) 100 percent of the amount in the
Trust Fund is distributed in the fourth
and each succeeding fiscal year for which
funds are available.
CHAPTER 3—INVESTMENTS FOR
CHILDREN
SEC. 131. IMPROVING CHILD CARE AND EARLY CHILDHOOD
DEVELOPMENT.
(a) IN GENERAL.—The Secretary shall use amounts
made available under section 101(d)(2) for a fiscal year
for the following purposes:
(1) Improving the affordability of child care
through increased appropriations for child care
under the Child Care and Development Block Grant
Act of 1990 (42 U.S.C. 9858 et seq.).
(2) Enhancing the quality of child care and
early childhood development through the provision of
grants to States under the Child Care and Develop-
ment Block Grant Act of 1990 (42 U.S.C. 9858 et
seq.).
(3) Expanding the availability and quality of
school-age care through the provision of grants to
States under the Child Care and Development Block
Grant Act of 1990 (42 U.S.C. 9858 et seq.).
(4) Assisting young children by providing
grants to local collaboratives under the Child Care
and Development Block Grant Act of 1990 (42
U.S.C. 9858 et seq.) for the purpose of improving
parent education and supportive services, strength-
ening the quality of child care, improving health
services, and improving services for children with
disabilities.
(b) SUPPLEMENT NOT SUPPLANT.—Amounts made
available to a State under this section shall be used to
supplement and not supplant other Federal, State and
local funds provided for programs that serve the health
and developmental needs of children. Amounts provided
to the State under any of the provisions of law referred
to in this section shall not be reduced solely as a result
of the availability of funds under this section.
(c) AUTHORITY OF SECRETARY.—In providing funds
to States under this section, the Secretary may consider
the amount of funds allocated to States under section 111.
The Secretary may allocate funds under this section based
on the relative need for funds in the various States and
the strength of the State plans or applications for such
funds.
SEC. 132. IMPROVING ELEMENTARY EDUCATION.
(a) GRANTS AUTHORIZED.—The Secretary of Edu-
cation shall use amounts made available under section
101(d)(3) for a fiscal year to award grants to States and
local educational agencies to train, recruit and hire ele-
mentary school teachers for the purpose of reducing the
average class size for students in grades 1 through 3 to
not more than 18 students per teacher.
(b) REGULATIONS REQUIRED.—The Secretary of
Education, not later than March 1, 1999, shall promulgate
regulations as the Secretary determines necessary to assist
States and school districts in providing smaller class sizes
with qualified teachers in early grades. Such regulations
may include provisions relating to—
(1) the use of funds by the State, including the
awarding of grants to local educational agencies;
(2) teacher preparation and certification; and
(3) accountability for improved student achieve-
ment.
(c) STATE PLAN.—
(1) IN GENERAL.—Each State desiring a grant
under this section shall submit to the Secretary of
Education a State plan at such time, in such man-
ner, and accompanied by such information as the
Secretary may require.
(2) CONTENTS.—Each State plan shall dem-
onstrate to the satisfaction of the Secretary of Edu-
cation that—
(A) the activities assisted by the State with
funds made available under this section will be
conducted in compliance with any regulations
promulgated under subsection (a);
(B) the State will use the funds made
available under this section to reduce class size
for students in grades 1 through 3 in elemen-
tary schools throughout the State, focusing on
using the funds to train, recruit, and hire
teachers for elementary schools serving commu-
nities with the least available resources for such
activities and the largest class sizes in those
grades; and
(C) of the funds that are made available to
the State under this section, the State will
make available to each local educational agency
that serves children in grades 1 through 3 and
in which at least 30 percent of the children are
from families below the Federal poverty level, at
least as great a percentage of such funds as the
percentage of funds provided to that local edu-
cational agency as compared to other local edu-
cational agencies in the State under part A of
title I of the Elementary and Secondary Edu-
cation Act of 1965.
(3) APPROVAL.—The Secretary shall approve a
State plan submitted under paragraph (1) if the
State plan meets the requirements of this sub-
section.
(d) ENSURING A QUALIFIED TEACHER IN EVERY
CLASSROOM.—To be eligible to receive funds under this
Act, each State shall ensure that—
(1) not later than the period that begins on the
date of enactment of this Act and ends 5 years after
such date, and subject to paragraphs (2) and (3),
each teacher in a public elementary or secondary
school in the State has demonstrated the subject
matter knowledge, teaching knowledge, and teaching
skill necessary to teach effectively in the content
area or areas in which the teacher provides instruc-
tion;
(2) each teacher in the State for whom the
demonstration described in paragraph (1) has been
waived temporarily by State or local education agen-
cies to respond to emergency teacher shortages or
other circumstances shall, not later than 1 year after
such waiver, demonstrate the subject matter knowl-
edge, teaching knowledge, and teaching skill nec-
essary to teach effectively in the content area or
areas in which the teacher provides instruction;
(3) no student will be taught for more than 1
year by an elementary school teacher, or for more
than 2 consecutive years in the same subject by a
secondary school teacher, who has not made the
demonstration described in paragraph (1); and
(4) during the period described in paragraph
(1), elementary school and secondary school teachers
who do not meet the requirements of paragraph (1),
are not disproportionately employed in high poverty
elementary schools or secondary schools.
(e) SUPPLEMENT NOT SUPPLANT.—Amounts made
available to a State under this section shall be used to
supplement and not supplant other Federal, State and
local funds provided for programs that improve elementary
education as provided for in this section. Amounts pro-
vided to the State under this section shall not be reduced
solely as a result of the availability of funds under this
section.
(f) AUTHORITY OF SECRETARY.—In providing funds
to States under this section, the Secretary may consider
the amount of funds allocated to States under section 111.
The Secretary may allocate funds under this section based
on the relative need for funds in the various States and
the strength of the State plans.
SEC. 133. INCREASED ENROLLMENT OF CHILDREN WITH
THE 
MEDICAID 
AND 
STATE 
CHILDREN’S
HEALTH INSURANCE PROGRAMS.
(a) TRANSITIONAL INCREASED FEDERAL MATCHING
RATE
FOR
INCREASED
MEDICAID
ADMINISTRATIVE
COSTS.—Section 1931(h) of the Social Security Act (42
U.S.C. 1396u–1(h)) is amended—
(1) in paragraph (2), by striking ‘‘attributable
to’’ and all that follows and inserting ‘‘attributable
to—
‘‘(A) administrative costs of eligibility de-
terminations that (but for the enactment of this
section) would not be incurred; and
‘‘(B) outreach activities to enroll uninsured
children in a State plan approved under this
title or title XXI.’’; and
(2) by striking paragraphs (3) and (4) and in-
serting the following:
‘‘(3) LIMITATION.—
‘‘(A) IN GENERAL.—Beginning with fiscal
year 1998, the total amount of additional Fed-
eral funds that are expended as a result of the
application of this subsection shall not exceed
$525,000,000.
‘‘(B) AVAILABILITY OF APPROPRIATION.—
Any amount appropriated in accordance with
this paragraph shall remain available until ex-
pended.
‘‘(C) 
EQUITABLE
DISTRIBUTION
OF
FUNDS.—In applying this paragraph, the Sec-
retary shall ensure the equitable distribution of
additional funds among the States.’’.
(b) MEDICAID PRESUMPTIVE ELIGIBILITY FOR LOW-
INCOME CHILDREN.—
(1) IN GENERAL.—Section 1920A(b)(3) of the
Social Security Act (42 U.S.C. 1396r–1a(b)(3)) is
amended—
(A) in subparagraph (A)(i))—
(i) by striking ‘‘or (II)’’ and inserting
‘‘, (II)’’; and
(ii) by inserting ‘‘, or (III) is an ele-
mentary school or secondary school, as
such terms are defined in section 14101 of
the Elementary and Secondary Education
Act of 1965 (20 U.S.C. 8801), is a child
care resource and referral agency, a child
support enforcement agency, TANF and
Medicaid agencies (and, in the case of
TANF, contractors), public housing agen-
cies, and contractors that process applica-
tions and perform rent recertification func-
tions for the public housing and section 8
programs, owners and managers of hous-
ing with project-based section 8 assistance,
or is authorized to determine the eligibility
of a child for obtaining child health assist-
ance under title XXI that is in the form of
coverage that meets the requirements of
section 2103’’ before the semicolon; and
(B) in subparagraph (C), by striking ‘‘lim-
iting the classes of’’ and inserting ‘‘imposing
limitations on’’.
(2) RETROACTIVITY.—The amendments made
by paragraph (1) take effect as if included in the en-
actment of section 4912 of the Balanced Budget Act
of 1997 (Public Law 105–33; 111 Stat. 571).
(c) MEDICAID EXPENDITURES COUNTED AGAINST
STATE ALLOTMENTS UNDER TITLE XXI.—
(1) IN GENERAL.—Section 2104(d) of the So-
cial Security Act (42 U.S.C. 1397dd(d)) is amended
to read as follows:
‘‘(d) CERTAIN MEDICAID EXPENDITURES COUNTED
AGAINST INDIVIDUAL STATE ALLOTMENTS.—The amount
of the allotment otherwise provided to a State under sub-
section (b) or (c) for a fiscal year shall be reduced by the
amount (if any) of the payments made to that State under
section 1903(a) for expenditures claimed by the State dur-
ing such fiscal year that is attributable to the provision
of medical assistance to a child for which payment is made
under section 1903(a)(1) on the basis of an enhanced
FMAP under the fourth sentence of section 1905(b).’’.
(2) RETROACTIVITY.—The amendment made by
paragraph (1) takes effect as if included in the en-
actment of section 4901 of the Balanced Budget Act
of 1997 (Public Law 105–33; 111 Stat. 552).
(d) OPTIONAL MEDICAID AND STATE CHILDREN’S
HEALTH INSURANCE PROGRAM ELIGIBILITY FOR LAW-
FULLY PRESENT ALIEN CHILDREN.—
(1) ESTABLISHMENT OF OPTIONAL MEDICAID
ELIGIBILITY
CATEGORY.—Section
1902(a)(10)(A)(ii) of the Social Security Act (42
U.S.C. 1396a(a)(10)(A)(ii)) is amended—
(A) in subclause (XIII), by striking ‘‘or’’
at the end;
(B) in subclause (XIV), by adding ‘‘or’’ at
the end; and
(C) by adding after subclause (XIV) the
following:
‘‘(XV) who are children lawfully
present in the United States and eligi-
ble under clause (i) of this subpara-
graph or under any subclause of this
clause but for title IV of the Personal
Responsibility and Work Opportuni-
ties Reconciliation Act of 1996 (8
U.S.C. 1601 et seq.);’’.
(2) APPLICABILITY OF TITLE IV OF THE PER-
SONAL RESPONSIBILITY AND WORK OPPORTUNITIES
RECONCILIATION ACT OF 1996.—Section 1902(l) of
the Social Security Act (42 U.S.C. 1396a(l)) is
amended by adding after paragraph (4) the follow-
ing:
‘‘(5) In the case of any State that is providing medi-
cal 
assistance 
to 
children 
described 
in 
section
1902(a)(10)(A)(ii)(XV), title IV of the Personal Respon-
sibility and Work Opportunities Reconciliation Act of
1996 shall not apply to such children.’’.
(3) ESTABLISHMENT OF OPTIONAL ELIGIBILITY
CATEGORY.—Section 2110(b) of the Social Security
Act, as created by section 4901 of the Balanced
Budget Act of 1997 (P.L. 105–33) is amended by
adding after paragraph (4) the following:
‘‘(5) CHILDREN
INCLUDED
AT
STATE
OP-
TION.—For States electing to provide medical assist-
ance under title XIX to children described in section
1902(a)(10)(A)(ii)(XV), at State option the term
‘targeted low-income child’ may include children law-
fully present in the United States notwithstanding
title IV of the Personal Responsibility and Work Op-
portunities Reconciliation Act of 1996. For States
electing this option, the provisions of such title IV
shall not apply to such children.’’.
(3) RETROACTIVITY.—The amendments made
by paragraphs (1), (2), and (3) take effect as if in-
cluded in the enactment of the Balanced Budget Act
of 1997 (Public Law 105–33; 111 Stat. 251).
(e) AUTHORIZING INCREASE IN FEDERAL MEDICAL
ASSISTANCE PERCENTAGE TO REWARD STATES FOR EN-
ROLLING
ELIGIBLE, BUT
OTHERWISE
UNENROLLED,
CHILDREN UNDER MEDICAID PLANS.—Section 1903 of
the Social Security Act (42 U.S.C. 1396b) is amended—
(1) in subsection (a), by striking ‘‘and (j)’’ and
inserting ‘‘, (j), and (x)(2)’’; and
(2) by adding at the end the following new sub-
section:
‘‘(x) AUTHORIZING INCREASE IN FEDERAL MEDICAL
ASSISTANCE PERCENTAGE TO REWARD STATES FOR EN-
ROLLING
ELIGIBLE, BUT
OTHERWISE
UNENROLLED,
CHILDREN UNDER MEDICAID PLANS.—
‘‘(1) ESTABLISHMENT
OF
MECHANISM.—The
Secretary shall establish a mechanism to recognize a
State’s above average performance in conducting
outreach activities and enrolling children who are eli-
gible, but would not otherwise be enrolled, under
this title. In determining whether a State has an
above average performance for purposes of this sub-
section, the Secretary shall take into account—
‘‘(A) the State’s enrollment of children in
families 
described 
in 
sections 
1925 
and
1931(b);
‘‘(B) the State’s implementation of the
presumptive eligibility provisions described in
section 1920A;
‘‘(C) the State’s implementation of a
streamlined eligibility and enrollment process
for children; and
‘‘(D) the State’s implementation of the 12-
month continuous eligibility option described in
section 1902(e)(12).
‘‘(2) AUTHORIZING INCREASED FMAP FOR MED-
ICAL
ASSISTANCE
FOR
CHILDREN.—Under such
mechanism, if the Secretary determines that a State
has an above average performance with respect to
such activities and enrollment, subject to paragraph
(3), the Secretary may increase the Federal medical
assistance percentage otherwise applicable under
subsection (a)(1), with respect to some or all ex-
penditures for medical assistance for some or all
children enrolled under the plan, to a percentage not
to exceed the enhanced FMAP described in section
2105(b) for the State and fiscal year involved.
‘‘(3) LIMITATION ON AGGREGATE PAYMENTS.—
The aggregate amount to be paid to all States for
a fiscal year under this section as a result of this
subsection shall not exceed the amount provided
under section 101(d)(4) of the Healthy Kids Act for
such fiscal year (less aggregate amounts paid to
States for the fiscal year under the amendments
made by subsections (a) through (d) of section 133
of such Act).
‘‘(4) INFORMATION.—As a condition of provid-
ing for an increase in payments to a State under
this subsection, the Secretary may require the State
to provide (or provide access to) such information as
the Secretary may require to carry out the mecha-
nism established under paragraph (1).’’.
SEC. 134. MEDICARE CANCER PATIENT DEMONSTRATION
PROJECT; EVALUATION AND REPORT TO
CONGRESS.
(a) ESTABLISHMENT.—The Secretary shall establish
a 3-year demonstration project which provides for pay-
ment under the medicare program under title XVIII of
the Social Security Act (42 U.S.C. 1395 et seq.) of routine
patient care costs—
(1) which are provided to an individual diag-
nosed with cancer and enrolled in the medicare pro-
gram under such title as part of the individual’s par-
ticipation in an approved clinical trial program; and
(2) which are not otherwise eligible for payment
under such title for individuals who are entitled to
benefits under such title.
(b) APPLICATION.—The beneficiary cost sharing pro-
visions under the medicare program, such as deductibles,
coinsurance, and copayment amounts, shall apply to any
individual participating in a demonstration project con-
ducted under this section.
(c) APPROVED CLINICAL TRIAL PROGRAM.—
(1) IN GENERAL.—For purposes of this section,
the term ‘‘approved clinical trial program’’ means a
clinical trial program which is approved by—
(A) the National Institutes of Health;
(B) a National Institutes of Health cooper-
ative group or a National Institutes of Health
center; and
(C) the National Cancer Institute, with re-
spect to programs that oversee and coordinate
extramural clinical cancer research, trials spon-
sored by such Institute and conducted at des-
ignated cancer centers, clinical trials, and Insti-
tute grants that support clinical investigators.
(2) MODIFICATIONS
IN
APPROVED
TRAILS.—
Beginning 1 year after the date of enactment of this
Act, the Secretary, in consultation with the Cancer
Policy Board of the Institute of Medicine, may mod-
ify or add to the requirements of paragraph (1) with
respect to an approved clinical trial program.
(d) ROUTINE PATIENT CARE COSTS.—
(1) IN GENERAL.—For purposes of this section,
‘‘routine patient care costs’’ shall include the costs
associated with the provision of items and services
that—
(A) would otherwise be covered under the
medicare program if such items and services
were not provided in connection with an ap-
proved clinical trial program; and
(B) are furnished according to the design
of an approved clinical trial program.
(2) EXCLUSION.—For purposes of this section,
‘‘routine patient care costs’’ shall not include the
costs associated with the provision of—
(A) an investigational drug or device, un-
less the Secretary has authorized the manufac-
turer of such drug or device to charge for such
drug or device; or
(B) any item or service supplied without
charge by the sponsor of the approved clinical
trial program.
(e) STUDY.—The Secretary shall study the impact on
the medicare program under title XVIII of the Social Se-
curity Act of covering routine patient care costs for indi-
viduals with a diagnosis of cancer and other diagnoses,
who are entitled to benefits under such title and who are
enrolled in an approved clinical trial program.
(f) REPORT
TO CONGRESS.—Not later than 30
months after the date of enactment of this Act, the Sec-
retary shall submit a report to Congress that contains a
detailed description of the results of the study conducted
under subsection (e) including recommendations regarding
the extension and expansion of the demonstration project
conducted under this section.
(g) FUNDING.—The Secretary shall use amounts
made available under section 101(d)(9)(A) for a fiscal
year to carry out this section.
TITLE II—FDA JURISDICTION
OVER TOBACCO PRODUCTS
SEC. 201. REFERENCE.
Whenever in this title an amendment or repeal is ex-
pressed in terms of an amendment to, or repeal of, a sec-
tion or other provision, the reference shall be considered
to be made to a section or other provision of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.).
SEC. 202. STATEMENT OF GENERAL AUTHORITY.
The regulations promulgated by the Secretary in the
rule dated August 28, 1996 (Vol. 61, No. 168 C.F.R.),
adding part 897 to title 21, Code of Federal Regulations,
shall be deemed to have been promulgated under the Food,
Drug and Cosmetic Act as amended by this title.
SEC. 203. TREATMENT OF TOBACCO PRODUCTS AS DRUGS
AND DEVICES.
(a) DEFINITIONS.—
(1) DRUG.—Section 201(g)(1) (21 U.S.C.
321(g)(1)) is amended by striking ‘‘; and (D)’’ and
inserting ‘‘; (D) nicotine in tobacco products; and
(E)’’.
(2) DEVICES.—Section 201(h) (21 U.S.C.
321(h)) is amended—
(A) in paragraph (2), by striking ‘‘or’’ at
the end;
(B) in paragraph (3), by striking ‘‘and’’ at
the end and inserting ‘‘or’’; and
(C) by inserting after paragraph (3), the
following:
‘‘(4) a delivery component of a tobacco product;
and’’.
(3) OTHER
DEFINITIONS.—Section 201 (21
U.S.C. 321) is amended by adding at the end the
following:
‘‘(kk) The term ‘tobacco product’ means any product
made or derived from tobacco leaf made for human con-
sumption including, but not limited to, cigarettes,
cigarillos, cigarette tobacco, cigars, little cigars, pipe to-
bacco, and smokeless tobacco, and roll-your-own tobacco.’’.
(b) REGULATORY AUTHORITY.—Section 503(g) (21
U.S.C. 353(g)) is amended by adding at the end the fol-
lowing:
‘‘(5) The Secretary may regulate any tobacco product
as a drug, device, or both, and may designate the office
of the Administration that shall be responsible for regulat-
ing such products.’’.
(c) 
DEVICES.—Section 
520(e)(1) 
(21 
U.S.C.
360j(e)(1)) is amended by striking ‘‘or use—’’ and insert-
ing ‘‘or use, including restrictions on the access to, and
the advertising and promotion of, tobacco products—’’.
(d) MISBRANDING.—Section 502 (21 U.S.C. 360) is
amended by adding at the end the following:
‘‘(u) In the case of a tobacco product, it is sold, dis-
tributed, advertised, or labeled in violation of this Act or
the regulations promulgated under this Act.
‘‘(v) The regulations promulgated in accordance with
subchapter F shall, at a minimum, require that a tobacco
product be deemed to be misbranded if the labeling of the
package of the product, or any claim of the manufacturer
in connection with the product, states or implies (as deter-
mined by the Secretary) that the product presents a re-
duced health risk unless it is demonstrated to the satisfac-
tion of the Secretary that the product will achieve the best
public health result, taking into account all relevant fac-
tors including, but not limited to, the probability of the
increased number of new users of tobacco products and
the reduced probability that existing users of tobacco
products will quit.’’.
(e) ENFORCEMENT.—Section 301 (42 U.S.C. 331) is
amended by adding at the end the following:
‘‘(aa) The failure to comply with the requirements of
section 581.
‘‘(bb) The failure or refusal to comply with any of
the requirements of subsections (a), (b) or (e) of section
578.’’.
(f) STATE
AND LOCAL REQUIREMENTS.—Section
521 (21 U.S.C. 360k) is amended—
(1) in subsection (a), by striking ‘‘subsection
(b)’’ and inserting ‘‘subsections (b) and (c)’’; and
(2) by adding at the end the following:
‘‘(c) This section shall not apply to devices that are
tobacco products.’’.
SEC. 204. SAFETY AND EFFICACY STANDARD AND RECALL
AUTHORITY.
(a) SAFETY
AND EFFICACY STANDARD.—Section
513(a) (21 U.S.C. 360c(a)) is amended—
(1) in paragraph (1)(B), by inserting after the
first sentence the following: ‘‘For a device which is
a tobacco product, the assurance in the previous sen-
tence need not be found if the Secretary finds that
special controls achieve the best public health re-
sult.’’; and
(2) in paragraph (2)—
(A) by redesignating subparagraphs (A),
(B) and (C) as clauses (i), (ii) and (iii), respec-
tively;
(B) by striking ‘‘(2) For’’ and inserting
‘‘(2)(A) For’’; and
(C) by adding at the end the following:
‘‘(B) For purposes of paragraph (1)(B), subsections
(c)(2)(C), 
(d)(2)(B), 
(e)(2)(A), 
(f)(3)(B)(i), 
and
(f)(3)(C)(i), and sections 514, 519(a), 520(e), and 520(f),
the safety and effectiveness of a device that is a tobacco
product need not be found if the Secretary finds that the
action to be taken under any such provision would achieve
the best public health result. The finding as to whether
the best public health result has been achieved shall be
determined with respect to the risks and benefits to the
population as a whole, including users and non-users of
the tobacco product, and taking into account—
‘‘(i) the increased or decreased likelihood that
existing consumers of tobacco products will stop
using such products; and
‘‘(ii) the increased or decreased likelihood that
those who do not use tobacco products will start
using such products.’’.
(b) RECALL AUTHORITY.—Section 518(e)(1) (21
U.S.C. 360h(e)(1)) is amended by inserting after ‘‘adverse
health consequences or death,’’ the following: ‘‘and for to-
bacco products that the best public health result would
be achieved,’’.
SEC. 205. GENERAL HEALTH AND SAFETY REGULATION OF
TOBACCO PRODUCTS.
Chapter V (21 U.S.C. 351 et seq.) is amended by
adding at the end the following:
‘‘SUBCHAPTER F—TOBACCO PRODUCTS
‘‘SEC. 571. PROMULGATION OF REGULATIONS.
‘‘Any regulations necessary to implement this sub-
chapter shall be promulgated not later than 12 months
after the date of enactment of this subchapter using notice
and comment rulemaking (in accordance with chapter 5
of title 5, United States Code). Such regulations may be
revised thereafter as determined necessary by the Sec-
retary.
‘‘SEC. 572. SCIENTIFIC ADVISORY COMMITTEE.
‘‘(a) ESTABLISHMENT.—Not later than 1 year after
the date of enactment of this subchapter, the Secretary
shall establish an advisory committee, to be known as the
‘Scientific Advisory Committee’, to assist the Secretary.
‘‘(b) MEMBERSHIP.—
‘‘(1) IN GENERAL.—The Secretary shall appoint
as members of the Scientific Advisory Committee
any individuals with expertise in the medical, sci-
entific, or other technological data involving the
manufacture and use of tobacco products, and of ap-
propriately diversified professional backgrounds.
‘‘(2) LIMITATIONS.—Notwithstanding section
5(b) of the Federal Advisory Committee Act (5
U.S.C. App. 3), the Secretary may not appoint to
the Committee any individual who—
‘‘(A) is in the regular full-time employ of
the Federal Government;
‘‘(B) is, or is in the employ of, a manufac-
turer, distributor, or retailer of a tobacco prod-
uct, or organization substantially funded by
manufacturers, distributors, or retailers of to-
bacco products;
‘‘(C) is, or is in the employ of, an attorney
representing an entity described in subpara-
graph (B); or
‘‘(D) is, or is in the employ of, a consult-
ant employed by or under retainer to an entity
described in subparagraph (B).
‘‘(3) CHAIRPERSON.—The Secretary shall des-
ignate 1 of the members of the advisory committee
to serve as chairperson of the Committee.
‘‘(c) COMPENSATION AND EXPENSES.—Members of
the Scientific Advisory Committee shall be entitled to the
same compensation and expenses as the compensation and
expenses provided to members of the advisory committees
established under section 514(b)(5)(B).
‘‘(d) DUTIES.—The Scientific Advisory Committee
shall—
‘‘(1) provide assistance to the Secretary;
‘‘(2) examine the effects of the alteration of the
nicotine yield levels in tobacco products;
‘‘(3) examine whether there is a threshold level
below which nicotine yields do not produce depend-
ence on the tobacco product involved, and, if so,
what that level is; and
‘‘(4) review other safety, dependence or health
issues relating to tobacco products as determined ap-
propriate by the Secretary.
‘‘SEC. 573. PERFORMANCE STANDARDS.
‘‘(a) GENERAL RULE.—The Secretary may adopt a
performance standard under section 514(a)(2) for a to-
bacco product regardless of whether the product has been
classified under section 513. Such standards may in-
clude—
‘‘(1) the reduction or elimination of nicotine
yields of the product;
‘‘(2) the reduction or elimination of other con-
stituents or harmful components of the product; or
‘‘(3) standards relating to any other require-
ment pursuant to section 512(a)(2).
‘‘(b) TOBACCO CONSTITUENTS.—The Secretary may
require that a manufacturer test, report and disclose to-
bacco and tobacco smoke constituents, including labeling
and advertising disclosures relating to such constituents,
including, but not limited to, tar and nicotine.
‘‘SEC. 574. DISCLOSURE AND REPORTING OF TOBACCO AND
NONTOBACCO INGREDIENTS AND CONSTITU-
ENTS.
‘‘(a) DISCLOSURE OF ALL INGREDIENTS.—
‘‘(1) IMMEDIATE AND ANNUAL DISCLOSURE.—
Not later than 30 days after the date of enactment
of this subchapter, and annually thereafter, each
manufacturer of a tobacco product shall submit to
the Secretary an ingredient list for each brand of to-
bacco product it manufactures that contains the in-
formation described in paragraph (2).
‘‘(2) REQUIREMENTS.—The list described in
paragraph (1) shall, with respect to each brand or
variety of tobacco product of a manufacturer, in-
clude—
‘‘(A) a list of all ingredients, constituents,
substances, and compounds that are found in or
added to the tobacco or tobacco product (in-
cluding the paper, filter, or packaging of the
product if applicable) in the manufacture of the
tobacco product, for each brand or variety of to-
bacco product so manufactured, including, if
determined necessary by the Secretary, any ma-
terial added to the tobacco used in the product
prior to harvesting;
‘‘(B) the quantity of the ingredients, con-
stituents, substances, and compounds that are
listed under subparagraph (A) in each brand or
variety of tobacco product;
‘‘(C) the nicotine content of the product,
measured in milligrams of nicotine;
‘‘(D) for each brand or variety of ciga-
rettes—
‘‘(i) the filter ventilation percentage
(the level of air dilution in the cigarette as
provided by the ventilation holes in the fil-
ter, described as a percentage);
‘‘(ii) the pH level of the smoke of the
cigarette; and
‘‘(iii) the tar, nicotine, and carbon
monoxide delivery level under Federal
Trade Commission parameters and any
other smoking conditions established by
the Secretary, reported in milligrams of
tar, nicotine, and carbon monoxide per cig-
arette;
‘‘(E) for each brand or variety of smoke-
less tobacco products—
‘‘(i) the pH level of the tobacco;
‘‘(ii) the moisture content of the to-
bacco expressed as a percentage of the
weight of the tobacco; and
‘‘(iii) the nicotine content—
‘‘(I) for each gram of the prod-
uct, measured in milligrams of nico-
tine;
‘‘(II) expressed as a percentage
of the dry weight of the tobacco; and
‘‘(III) with respect to unionized
(free) nicotine, expressed as a percent-
age per gram of the tobacco and ex-
pressed in milligrams per gram of the
tobacco; and
‘‘(F) any other information determined ap-
propriate by the Secretary.
‘‘(3) METHODS.—The Secretary shall have the
authority to promulgate regulations to establish the
methods to be used by manufacturers in making the
determinations required under paragraph (2).
‘‘(b) SAFETY ASSESSMENTS.—
‘‘(1) APPLICATION TO NEW INGREDIENTS.—
‘‘(A) IN GENERAL.—Not later than 1 year
after the date of enactment of this subchapter,
and annually thereafter, each manufacturer
shall submit to the Secretary a safety assess-
ment for each new ingredient, constituent, sub-
stance, or compound that such manufacturer
desires to make a part of a tobacco product.
Such new ingredient, constituent, substance, or
compound shall not be included in a tobacco
product prior to approval by the Secretary of
such a safety assessment.
‘‘(B) METHOD OF FILING.—A safety as-
sessment submitted under subparagraph (A)
shall be signed by an officer of the manufac-
turer who is acting on behalf of the manufac-
turer and who has the authority to bind the
manufacturer, and contain a statement that en-
sures that the information contained in the as-
sessment is true, complete and accurate.
‘‘(C) DEFINITION OF NEW INGREDIENT.—
For purposes of subparagraph (A), the term
‘new ingredient, constituent, substance, or com-
pound’ means an ingredient, constituent, sub-
stance, or compound listed under subsection
(a)(1) that was not used in the brand or variety
of tobacco product involved prior to January 1,
1998.
‘‘(2) APPLICATION TO OTHER INGREDIENTS.—
With respect to the application of this section to in-
gredients, constituents, substances, or compounds
listed under subsection (a) to which paragraph (1)
does not apply, all such ingredients, constituents,
substances, or compounds shall be reviewed through
the safety assessment process within the 5-year pe-
riod beginning on the date of enactment of this sub-
chapter. The Secretary shall develop a procedure for
the submission of safety assessments of such ingre-
dients, constituents, substances, or compounds that
staggers such safety assessments within the 5-year
period.
‘‘(3) BASIS OF ASSESSMENT.—The safety as-
sessment of an ingredient, constituents, substance,
or compound described in paragraphs (1) and (2)
shall—
‘‘(A) be based on the best scientific evi-
dence available at the time of the submission of
the assessment; and
‘‘(B) demonstrate that there is a reason-
able certainty among experts qualified by sci-
entific training and experience who are con-
sulted, that the ingredient, constituents, sub-
stance, or compound will not present any risk
to consumers or the public in the quantities
used under the intended conditions of use.
‘‘(c) PROHIBITION.—
‘‘(1) REGULATIONS.—Not later than 12 months
after the date of enactment of this subchapter, the
Secretary shall promulgate regulations to prohibit
the use of any ingredient, constituent, substance, or
compound in the tobacco product of a manufac-
turer—
‘‘(A) if no safety assessment has been sub-
mitted by the manufacturer for the ingredient,
constituent, substance, or compound as other-
wise required under this section; or
‘‘(B) if the Secretary finds that the manu-
facturer has failed to demonstrate the safety of
the ingredient, constituent, substance, or com-
pound that was the subject of the assessment
under paragraph (2).
‘‘(2) REVIEW OF ASSESSMENTS.—
‘‘(A) GENERAL REVIEW.—Not later than
180 days after the receipt of a safety assess-
ment under subsection (b), the Secretary shall
review the findings contained in such assess-
ment and approve or disapprove of the safety of
the ingredient, constituents, substance, or com-
pound that was the subject of the assessment.
The Secretary may, for good cause, extend the
period for such review. The Secretary shall pro-
vide notice to the manufacturer of an action
under this subparagraph.
‘‘(B) INACTION
BY
SECRETARY.—If the
Secretary fails to act with respect to an assess-
ment of an existing ingredient, constituent, sub-
stance, or additive during the period referred to
in subparagraph (A), the manufacturer of the
tobacco product involved may continue to use
the ingredient, constituents, substance, or com-
pound involved until such time as the Secretary
makes a determination with respect to the as-
sessment.
‘‘(d) RIGHT TO KNOW; FULL DISCLOSURE OF INGRE-
DIENTS TO THE PUBLIC.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (3), a package of a tobacco product shall dis-
close all ingredients, constituents, substances, or
compounds contained in the product in accordance
with regulations promulgated under section 701(a)
by the Secretary.
‘‘(2) DISCLOSURE OF PERCENTAGE OF DOMES-
TIC AND FOREIGN TOBACCO.—The regulations re-
ferred to in paragraph (1) shall require that the
package of a tobacco product disclose, with respect
to the tobacco contained in the product—
‘‘(A) the percentage that is domestic to-
bacco; and
‘‘(B) the percentage that is foreign to-
bacco.
‘‘(3) HEALTH
DISCLOSURE.—Notwithstanding
section 301(j), the Secretary may require the public
disclosure of any ingredient, constituent, substance,
or compound contained in a tobacco product that re-
lates to a trade secret or other matter referred to in
section 1905 of title 18, United States Code, if the
Secretary determines that such disclosure will pro-
mote the public health.
‘‘SEC. 575. TOBACCO PRODUCT WARNINGS, LABELING AND
PACKAGING.
‘‘(a) CIGARETTE WARNINGS.—
‘‘(1) IN GENERAL.—
‘‘(A) PACKAGING.—It shall be unlawful for
any person to manufacture, package, or import
for sale or distribution any cigarettes the pack-
age of which fails to bear, in accordance with
the requirements of this subsection, one of the
following labels:
‘‘WARNING: Cigarettes Are Addictive.
‘‘WARNING: Tobacco Smoke Can Harm
Your Children.
‘‘WARNING: Cigarettes Cause Fatal Lung
Disease.
‘‘WARNING: Cigarettes Cause Cancer.
‘‘WARNING: Cigarettes Cause Strokes
And Heart Disease.
‘‘WARNING: Smoking During Pregnancy
Can Harm Your Baby.
‘‘WARNING: Smoking Can Kill You.
‘‘WARNING: 
Tobacco 
Smoke 
Causes
Fatal Lung Disease In Nonsmokers.
‘‘WARNING: 
Quitting 
Smoking 
Now
Greatly Reduces Serious Risks To Your
Health.
‘‘(B) ADVERTISING.—It shall be unlawful
for any manufacturer, importer, distributor or
retailer of cigarettes to advertise or cause to be
advertised any cigarette unless the advertising
bears, in accordance with the requirements of
this subsection, one of the following labels:
‘‘WARNING: Cigarettes Are Addictive.
‘‘WARNING: Tobacco Smoke Can Harm
Your Children.
‘‘WARNING: Cigarettes Cause Fatal Lung
Disease.
‘‘WARNING: Cigarettes Cause Cancer.
‘‘WARNING: Cigarettes Cause Strokes
And Heart Disease.
‘‘WARNING: Smoking During Pregnancy
Can Harm Your Baby.
‘‘WARNING: Smoking Can Kill You.
‘‘WARNING: 
Tobacco 
Smoke 
Causes
Fatal Lung Disease In Nonsmokers.
‘‘WARNING: 
Quitting 
Smoking 
Now
Greatly Reduces Serious Risks To Your
Health.
‘‘(C) ADDITIONAL WARNINGS.—Beginning
on the date that is 18 months after the date of
enactment of this subchapter, the Secretary
may substitute for, or require warnings in addi-
tion to, those otherwise required under subpara-
graphs (A) and (B) if the Secretary determines
that such warnings would be more effective in
deterring the use of cigarettes.
‘‘(2) REQUIREMENTS FOR LABELING.—
‘‘(A) LOCATION.—Each label statement re-
quired by subparagraph (A) of paragraph (1)
shall be located on the upper portion of the
front and rear panels of the cigarette package
(or carton) directly on the package underneath
the cellophane or other clear wrapping and oc-
cupy not less than 25 percent of such panels.
‘‘(B) TYPE AND COLOR.—With respect to
each label statement required by subparagraph
(A) of paragraph (1), the phrase ‘WARNING’
shall appear in capital letters and the label
statement shall be printed in 17 point type with
adjustments as determined appropriate by the
Secretary to reflect the length of the required
statement. All the letters in the label shall ap-
pear in conspicuous and legible type, in contrast
by typography, layout, or color with all other
printed material on the package, and be printed
in an alternating black-on-white and white-on-
black format as determined appropriate by the
Secretary.
‘‘(C) EXCEPTION.—With respect to ciga-
rettes manufactured and distributed prior to
January 1, 2000, the provisions of subpara-
graph (A) shall not apply with respect to the
front panel in the case of a flip-top cigarette
package (offered for sale on June 1, 1997)
where the front portion of the flip-top does not
comprise at least 25 percent of the front panel.
In the case of such a package, the label state-
ment required by subparagraph (A) of para-
graph (1) shall occupy the entire front portion
of the flip-top.
‘‘(D) SYMBOLS.—The Secretary shall des-
ignate or create symbols to represent the con-
tent of the warnings required under subpara-
graphs (A) and (B) and shall publish them in
the Federal Register. Each warning required by
subparagraphs (A) and (B) shall include the
symbol designated or created by the Secretary
for such warning within 180 days of publication
of the symbol in the Federal Register.
‘‘(3) REQUIREMENTS FOR ADVERTISING.—
‘‘(A) LOCATION.—Each label statement re-
quired by subparagraph (B) of paragraph (1)
shall appear in a conspicuous and prominent
format and location at the top of each adver-
tisement within the trim area and shall occupy
not less than 20 percent of the area of the ad-
vertisement involved.
‘‘(B) TYPE, COLOR AND FORMAT.—
‘‘(i) TYPE.—With respect to each
label statement required by subparagraph
(B) of paragraph (1), the phrase ‘WARN-
ING’ shall appear in capital letters and the
label statement shall be printed in the fol-
lowing types:
‘‘(I) With respect to whole page
advertisements on broadsheet news-
paper—45 point type.
‘‘(II) With respect to half page
advertisements on broadsheet news-
paper—39 point type.
‘‘(III) With respect to whole page
advertisements 
on 
tabloid 
news-
paper—39 point type.
‘‘(IV) With respect to half page
advertisements 
on 
tabloid 
news-
paper—27 point type.
‘‘(V) With respect to DPS maga-
zine advertisements—31.5 point type.
‘‘(VI) With respect to whole page
magazine advertisements—31.5 point
type.
‘‘(VII) With respect to 28cm x 3
column advertisements—22.5 point
type.
‘‘(VIII) With respect to 20cm x 2
column 
advertisements—15 
point
type.
Within the 20 percent requirement de-
scribed in subparagraph (A), the Secretary
may revise the required type sizes if the
Secretary determines that such revisions
will enhance public health protections.
‘‘(ii) COLOR.—All the letters in the
label under this subparagraph shall appear
in conspicuous and legible type, in contrast
by typography, layout, or color with all
other printed material on the package, and
be printed in an alternating black-on-white
and white-on-black format as determined
appropriate by the Secretary.
‘‘(iii) FORMAT.—The label statements
under subparagraph (B) of paragraph (1)
shall be black when the background is
white and white when the background is
black, and shall be in the point size re-
quired under this subparagraph. The label
statements shall be enclosed by a rectangu-
lar border that is the same color as the let-
ters of the statements and that is the
width of the first down stroke of the cap-
ital ‘W’ of the word ‘WARNING’ in the
label statements.
‘‘(C) 
LANGUAGE
REQUIREMENT.—The
label statements required under paragraph
(1)(B) shall be in English, except that—
‘‘(i) in the case of an advertisement
that appears in a newspaper, magazine, pe-
riodical or other publication that is not in
English, such statements shall appear in
the predominant language of the publica-
tion; or
‘‘(ii) in the case of any other adver-
tisement that is not in English, such state-
ments shall appear in the same language
as that principally used in the advertise-
ment.
‘‘(4) ROTATION OF LABEL STATEMENTS.—
‘‘(A) LABELING.—The label statements
specified in subparagraph (A) of paragraph (1)
shall be randomly displayed in each 12 month
period, in as equal a number of times as is pos-
sible on each brand of the product and be ran-
domly distributed in all areas of the United
States in which such product is marketed in ac-
cordance with a plan submitted by the manu-
facturer, importer, distributor or retailer and
approved by the Secretary.
‘‘(B) ADVERTISING.—The label statements
specified in subparagraph (B) of paragraph (1)
shall be rotated quarterly in alternating se-
quence in advertisements for each such brand
of cigarettes in accordance with a plan submit-
ted by the manufacturer, importer, distributor
or retailer and approved by the Secretary.
‘‘(C) APPROVAL
OF
PLANS.—The Sec-
retary shall review each plan submitted by a
manufacturer, importer, distributor or retailer
of cigarettes under this paragraph and approve
such plan if the plan will provide for the equal
distribution and display on packaging and the
rotation required in advertising under this para-
graph and if such plan assures that all of the
labels required under subparagraphs (A) and
(B) will be displayed by the manufacturer, im-
porter, distributor or retailer at the same time.
‘‘(b) SMOKELESS TOBACCO PRODUCTS.—
‘‘(1) IN GENERAL.—
‘‘(A) PACKAGING.—It shall be unlawful for
any person to manufacture, package, or import
for sale or distribution any smokeless tobacco
product the package of which fails to bear, in
accordance with the requirements of this sub-
section, one of the following labels:
‘‘WARNING: This Product Can Cause
Mouth Cancer.
‘‘WARNING: This Product Can Kill You.
‘‘WARNING: This Product Can Cause
Gum Disease And Tooth Loss.
‘‘WARNING: This Product Is Not A Safe
Alternative To Cigarettes.
‘‘WARNING: This Product Contains Can-
cer-Causing Chemicals.
‘‘WARNING: Smokeless Tobacco Is Ad-
dictive.
‘‘(B) ADVERTISING.—It shall be unlawful
for any manufacturer, importer, distributor or
retailer of smokeless tobacco products to adver-
tise or cause to be advertised any smokeless to-
bacco product unless the advertising bears, in
accordance with the requirements of this sub-
section, one of the following labels:
‘‘WARNING: This Product Can Cause
Mouth Cancer.
‘‘WARNING: This Product Can Kill You.
‘‘WARNING: This Product Can Cause
Gum Disease And Tooth Loss.
‘‘WARNING: This Product Is Not A Safe
Alternative To Cigarettes.
‘‘WARNING: This Product Contains Can-
cer-Causing Chemicals.
‘‘WARNING: Smokeless Tobacco Is Ad-
dictive.
‘‘(C) ADDITIONAL WARNINGS.—Beginning
on the date that is 18 months after the date of
enactment of this subchapter, the Secretary
may substitute for, or require warnings in addi-
tion to, those otherwise required under subpara-
graphs (A) and (B) if the Secretary determines
that such warnings would be more effective in
deterring the use of smokeless tobacco products.
‘‘(2) REQUIREMENTS FOR LABELING.—
‘‘(A) LOCATION.—Each label statement re-
quired by subparagraph (A) of paragraph (1)
shall be located on the 2 most prominent dis-
play panels of the product and occupy not less
than 25 percent of such panels.
‘‘(B) TYPE AND COLOR.—With respect to
each label statement required by subparagraph
(A) of paragraph (1), the phrase ‘WARNING’
shall appear in capital letters and the label
statement shall be printed in 17 point type with
adjustments as determined appropriate by the
Secretary to reflect the length of the required
statement and the size of the package. All the
letters in the label shall appear in conspicuous
and legible type in contrast by typography, lay-
out, or color with all other printed material on
the package and be printed in an alternating
black-on-white and white-on-black format as de-
termined appropriate by the Secretary.
‘‘(3) ADVERTISING AND ROTATION.—The provi-
sions of paragraphs (3) and (4) of subsection (a)
shall apply to advertisements for smokeless tobacco
products and the rotation of the label statements re-
quired under paragraph (1)(A) on such products.
‘‘(c) OTHER TOBACCO PRODUCTS.—The Secretary
may prescribe such regulations as may be necessary to es-
tablish warning labels for other tobacco product packag-
ing, labeling and advertising.
‘‘(d) CONSTRUCTION.—
‘‘(1) IN
GENERAL.—Nothing in this section
shall be construed to limit the ability of the Sec-
retary to change the text or layout of any of the
warning statements, or any of the labeling provi-
sions, under subsections (a) and (b) and other provi-
sions of this Act, if determined necessary by the Sec-
retary in order to make such statements or labels
larger, more prominent, more conspicuous, or more
effective.
‘‘(2) UNFAIR
ACTS.—Nothing in this section
(other than the requirements of subsections (a), (b)
and (c)) shall be construed to limit or restrict the
authority of the Federal Trade Commission with re-
spect to unfair or deceptive acts or practices in the
advertising of cigarettes or smokeless tobacco prod-
ucts.
‘‘(e) LIMITED PREEMPTION.—
‘‘(1) STATE AND LOCAL ACTION.—No warning
label with respect to cigarettes or smokeless tobacco
products, or any other tobacco product for which
warning labels have been required under this section,
other than the warning labels required under this
Act, shall be required by any State or local statute
or regulation to be included on any package of ciga-
rettes or a smokeless tobacco product.
‘‘(2) EFFECT ON LIABILITY LAW.—Nothing in
this section shall relieve any person from liability at
common law or under State statutory law to any
other person.
‘‘(f) ELECTRONIC MEDIUM ADVERTISING.—It shall
be unlawful to advertise tobacco products on any medium
of electronic communications subject to the jurisdiction of
the Federal Communications Commission.
‘‘SEC. 576. PRESERVATION OF STATE AND LOCAL AUTHOR-
ITY.
‘‘Except as otherwise provided for in section 575(e),
nothing in this subchapter shall be construed as prohibit-
ing a State or locality from imposing requirements, prohi-
bitions, penalties or other measures to further the pur-
poses of this subchapter that are in addition to the re-
quirements, prohibitions, or penalties required under this
subchapter. State and local governments may impose addi-
tional tobacco product control measures to further restrict
or limit the use of such products.
‘‘SEC. 577. RESTRICTIONS ON YOUTH ACCESS TO TOBACCO
PRODUCTS.
‘‘(a) IN GENERAL.—The Secretary shall restrict the
access of minors to tobacco products.
‘‘(b) STATE LICENSING.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), in order to receive any amounts under
section 111 of the Healthy Kids Act, a State shall
have in place a program that meets or exceeds (as
determined by the Secretary) the requirements of
the model State program described in paragraph (3)
under which a retailer would be required to obtain
a State or local license to sell or otherwise distribute
tobacco products directly to consumers in such
State.
‘‘(2) START-UP PERIOD.—
‘‘(A) IN
GENERAL.—The Secretary may
waive the requirement of paragraph (1) for
such time as the Secretary determines is nec-
essary, after promulgation of the model pro-
gram described in paragraph (3), to permit the
legislature of a State to meet and enact laws to
comply with paragraph (1) and to permit the
State to implement the program described in
paragraph (1).
‘‘(B) ELIGIBILITY.—To be eligible for a
waiver under subparagraph (A), the Governor
of the State involved shall certify to the Sec-
retary in writing that the State intends to im-
plement a program that meets the requirements
of this section at the earliest possible oppor-
tunity. If, subsequent to such notification, the
Secretary determines that the State has failed
to implement such a program, the Secretary
may recover any funds distributed to the State
under section 111 of the Healthy Kids Act.
‘‘(3) MODEL
PROGRAM.—Not later than 12
months after the date of enactment of this sub-
chapter, the Secretary shall promulgate a model
State program. Such model State program shall at
a minimum—
‘‘(A) provide for the collection of licensing
fees by the State or locality to defray the costs
of administering the program;
‘‘(B) prohibit retailers from selling or oth-
erwise distributing tobacco products directly to
consumers in a State unless such retailers have
in effect tobacco licenses issued or renewed in
accordance with State or local laws;
‘‘(C) provide for the notification of every
person in the State who is engaged in the dis-
tribution at retail of tobacco products of the li-
cense requirement and of the date by which
such person shall have obtained a license in
order to continue to distribute such products;
‘‘(D) prohibit licensed retailers from selling
or otherwise distributing tobacco products to
minors;
‘‘(E) provide for penalties of up to $50,000
for each violation of the requirements under
such program relating to the sale or distribu-
tion of tobacco products without a license and
for appropriate penalties for other violations of
laws relating to youth access to tobacco prod-
ucts;
‘‘(F) require retailers to comply with the
applicable requirements of this section and any
regulations relating to this section; and
‘‘(G) provide for the suspension or revoca-
tion of a license in the case of a retailer that
repeatedly sells or distributes tobacco products
to individuals in violation of subsection (a) or
State or local law.
‘‘(c) PENALTIES.—The Secretary shall promulgate
regulations providing for the application of penalties for
the sale or distribution of tobacco products to minors in
violation of the requirements of subsection (a) that are
consistent with the following:
‘‘(1) EMPLOYEES OF RETAILERS.—In the case
of an employee of a retailer who distributes a to-
bacco product to a minor in violation of subsection
(a), the regulations shall provide for the application
of a civil money penalty of—
‘‘(A) $25 for the 1st violation;
‘‘(B) $50 for the 2nd violation; and
‘‘(C) $150 for the 3rd and subsequent vio-
lations.
‘‘(2) MINORS.—In the case of a minor who pur-
chases or attempts to purchase a tobacco product in
violation of subsection (a) (other than a minor en-
gaged in an authorized sting or a law enforcement
operation), the regulations may provide for civil
money penalties, loss of driving privileges, or other
penalties.
‘‘(3) RETAILERS.—In the case of a retailer who
distributes a tobacco product to a minor in violation
of subsection (a), the regulations shall provide for
the application of a civil money penalty of at least—
‘‘(A) $250 for the 1st violation;
‘‘(B) $500 for the 2nd violation;
‘‘(C) $1,500 for the 3rd violation;
‘‘(D) $5,000 for the 4th violation; and
‘‘(E) $10,000 for the 5th and subsequent
violations.
‘‘(d) ENFORCEMENT.—
‘‘(1) IN GENERAL.—The Secretary may enter
into agreements with, and provide grants to, States
to enforce this section. Any State that elects to en-
force the provisions of this section within the State
shall conduct sting operations and other compliance
checks and enforce State laws under this section
through the use of penalties described in subsection
(c) so as to ensure that minors are successful in pur-
chasing tobacco products less than 5 percent of the
time. States may use funds made available under
this Act to provide the technologies necessary to aid
retailers in the verification of age to determine eligi-
bility to purchase tobacco products.
‘‘(2) REQUIREMENTS.—The Secretary may by
regulation implement such requirements as the Sec-
retary determines necessary to ensure that any com-
pliance checks performed by the State under para-
graph (1) are accurate.
‘‘(3) VIOLATIONS.—If the Secretary determines
that the provisions of subsection (a) are being vio-
lated within a State, the Secretary shall have the au-
thority to enforce such provisions in the State.
‘‘(e) STATE COMPLIANCE.—Beginning with the 3rd
full calendar year following the date of enactment of this
subchapter, if, with respect to a State, the Secretary deter-
mines that minors are successful in purchasing tobacco
products more than 5 percent of the time, the Secretary
shall notify the State and reduce payments to the State
under section 111 of the Healthy Kids Act by 1 percent
for each percentage point by which the State is not in com-
pliance with this subsection.
‘‘(f) PREEMPTION.—The provisions of this section
shall not preempt any provision of State or local law that
provides greater restrictions than those required in this
section.
‘‘(g) FEDERAL LICENSING OF ENTITIES.—
‘‘(1) IN GENERAL.—The Secretary, in consulta-
tion with the Secretary of Defense, Secretary of
State, and other appropriate Federal officials, shall
establish and implement a Federal tobacco licensing
program to be applied to entities that sell or distrib-
ute tobacco products—
‘‘(A) on any military installation (as de-
fined in section 2801(c)(2) of title X, United
States Code);
‘‘(B) in any United States embassy;
‘‘(C) in any facility owned and operated by
the Federal Government either in the United
States or in a foreign country;
‘‘(D) in any duty-free shop located within
the United States; or
‘‘(E) through any other Federal entity or
on any other Federal property as determined
appropriate by the Secretary.
‘‘(2) REQUIREMENTS.—The program estab-
lished under paragraph (1) shall apply requirements
(including those for penalties, suspensions, and rev-
ocations) similar to those required to be imple-
mented by States under this section.
‘‘(3) INDIAN TRIBES AND TRIBAL LANDS.—For
purposes of applying and enforcing the provisions of
this section to entities that sell or otherwise distrib-
ute tobacco products on Indian reservations (as de-
fined in section 403(9) of the Indian Child Protec-
tion and Family Violence Prevention Act (25 U.S.C.
3202(9))), an Indian tribe or tribal organization (as
such terms are defined in section 4 of the Indian
Self Determination and Education Assistance Act
(25 U.S.C. 450b)) shall be treated as a State.
‘‘SEC. 578. PUBLIC DISCLOSURE OF HEALTH RESEARCH.
‘‘(a) SUBMISSION BY MANUFACTURERS.—Not later
than 3 months after the date of the enactment of this sub-
chapter and thereafter as required by the Secretary, each
manufacturer of a tobacco product shall submit to the Sec-
retary a copy of each document in the manufacturer’s pos-
session or control, directly or indirectly—
‘‘(1) relating, referring, or pertaining to—
‘‘(A) any health effects in humans or ani-
mals, including addiction, caused by the use of
tobacco products or components of tobacco
products;
‘‘(B) the engineering, manipulation or con-
trol of nicotine in tobacco products;
‘‘(C) the sale or marketing of tobacco
products;
‘‘(D) any research involving safer tobacco
products; or
‘‘(E) such other matters as the Secretary
may prescribe; or
‘‘(2) produced, or ordered to be produced, by
the tobacco product manufacturer in any health-re-
lated civil or criminal proceeding, judicial or admin-
istrative, that has been commenced by the United
States, an agency of the United States, a State or
local governmental entity, or any person, or on be-
half of such an entity or person, including attorney-
client and other documents produced or ordered to
be produced for in camera inspection.
‘‘(b) ADDITIONAL INFORMATION.—For the purpose
of obtaining additional information relating to the matters
in subsection (a), the Secretary may hold hearings, require
testimony, the deposition of witnesses, the answering of
interrogatories, or enter into and inspect facilities.
‘‘(c) DISCLOSURE BY THE SECRETARY.—Starting not
later than 6 months after the date of the enactment of
this subchapter, the Secretary shall begin to make avail-
able to the public, using the Internet and other means,
the documents submitted under subsection (a).
‘‘(d) PROTECTION OF CERTAIN INFORMATION.—The
Secretary shall not disclose information obtained under
this section if such information is entitled to protection
as a trade secret or under the attorney-client privilege un-
less the Secretary determines that the disclosure of such
information is necessary to promote the public health.
‘‘(e) ENFORCEMENT.—Notwithstanding any other
provision of law, manufacturers of tobacco products shall
provide any deposition, documents, or other information,
answer any interrogatories, and allow any entry or inspec-
tion required pursuant to this section.
‘‘(f) RULE OF CONSTRUCTION.—Nothing in this sec-
tion shall be construed to interfere in any way with the
discovery rights of courts or parties in civil or criminal
proceedings, administrative or judicial, involving tobacco
products, or the right of access to such documents under
any other provision of law.
‘‘(g) DEFINITION.—In this section:
‘‘(1) DOCUMENTS.—The term ‘documents’ in-
cludes originals and drafts of any kind of written or
graphic matter, regardless of the manner of produc-
tion or reproduction, of any kind of description,
whether sent or received or neither, and all copies
thereof that are different in any way from the origi-
nal (whether by interlineation, receipt stamp, nota-
tion, indication of copies sent or received or other-
wise) regardless of whether ‘confidential’, ‘privi-
leged’, or otherwise, including any paper, book, ac-
count, photograph, blueprint, drawing, agreement,
contract, memorandum, advertising material, letter,
telegram, object, report, record, transcript, study,
note, notation, working paper, intra-office commu-
nication, intra-department communication, inter-
department communication, chart, minute, index
sheet, routing sheet, computer software, computer
data, delivery ticket, flow sheet, price list, quotation,
bulletin, circular, manual, summary, recording of
telephone or other conversation or of interviews, or
of conferences, or any other written, recorded, tran-
scribed, punched, taped, filmed, or graphic matter,
regardless of the manner produced or reproduced.
Such term shall also include any tape, recording,
videotape, computerization, or other electronic re-
cording, whether digital or analog or a combination
of the two.
‘‘(2) MANUFACTURER
OF
A
TOBACCO
PROD-
UCT.—The term ‘manufacturer of a tobacco product’
also includes the Tobacco Institute, the Council for
Tobacco Research, the Smokeless Tobacco Council,
the Center for Indoor Air Research, or any other
trade association or entity that is primarily funded
by persons who manufacture a tobacco product.
‘‘SEC. 579. CITIZEN SUITS.
‘‘(a) AUTHORITY.—Any individual on his or her own
behalf may commence a civil action—
‘‘(1) against any person who is alleged to be in
violation of this subchapter, in the district court for
the district in which the alleged violation occurred or
in which the defendant resides or is found; or
‘‘(2) against the Secretary or the Commissioner
where there is alleged a failure of the Secretary or
Commissioner to perform any act or duty required
under this subchapter, in a district court for the dis-
trict in which an alleged failure to perform occurred
or in the district court of the District of Columbia.
‘‘(b) JURISDICTION.—The district courts of the
United States shall have jurisdiction, without regard to
the amount in controversy or the citizenship of the parties,
to enforce the provisions of this subchapter, or to order
the Secretary to perform such act or duty, as the case
may be, and to apply any appropriate civil penalties. The
district courts of the United States shall have jurisdiction
to compel action by an agency where such action is found
to be unreasonably delayed, except that such an action
may not be maintained unless the plaintiff has provided
the Secretary with a notice of the intent of the plaintiff
to file such action at least 90 days prior to the filing of
such action.
‘‘(c) COSTS
AND DAMAGES.—A court under sub-
section (b) may award costs of litigation, including reason-
able attorney’s fees, to any party where the court deter-
mines that such an award is appropriate. No damages of
any kind, whether compensatory or punitive, may be
awarded to the individual in actions described in sub-
section (a)(2). Any damages awarded to the Federal Gov-
ernment shall be paid to the Treasury.
‘‘SEC. 580. AGRICULTURAL PRODUCERS.
‘‘The Secretary may not promulgate any regulation
under this subchapter that has the effect of placing regu-
latory burdens on tobacco producers (as such term is used
for purposes of the Agricultural Adjustment Act of 1938
(7 U.S.C. 1281 et seq.) and the Agricultural Act of 1949
(7 U.S.C. 1441 et seq.)) in excess of the regulatory bur-
dens generally placed on other agricultural commodity
producers. Any authority granted to the Secretary for reg-
ulation of any tobacco product as a drug, device, or com-
bination is not intended to include the authority to pro-
mulgate regulations that apply to any person engaged in
the growing, cultivation, or curing of raw tobacco. This
section shall not be construed to limit the regulatory re-
quirements that may be imposed on producers who are
also manufacturers under this Act.
‘‘SEC. 581. AUTHORITY OF SECRETARY.
‘‘To carry out this subchapter, the Secretary may
hold hearings, administer oaths, issue subpoenas, require
the testimony or deposition of witnesses, the production
of documents, or the answering of interrogatories, or,
upon presentation of the proper credentials, enter and in-
spect facilities. In the case of a refusal of a person to obey
100
a subpoena, any district court of the United States for
the district in which such person is found, resides or con-
ducts business, upon application by the Commissioner,
shall have jurisdiction to issue an order requiring such
person to appear and give testimony or to appear and
produce evidence or both. The failure to obey such an
order of the court may be punished by the court as con-
tempt thereof, and by penalties of up to $25,000 per
day.’’.
SEC. 206. REPEALS.
The following provisions of law shall be repealed:
(1) The Federal Cigarette Labeling and Adver-
tising Act (15 U.S.C. 1331 et seq.).
(2) The Comprehensive Smokeless Tobacco
Health Education Act of 1986 (15 U.S.C. 4401 et
seq.).
SEC. 207. AUTHORITY OF FEDERAL TRADE COMMISSION.
Nothing in this title, or an amendment made by this
title, shall be construed to in any way reduce the jurisdic-
tion of the Federal Trade Commission over the advertising
of tobacco products.
101
TITLE III—YOUTH SMOKING RE-
DUCTION TARGETS AND IN-
CENTIVES TO REDUCE YOUTH
SMOKING RATES
SEC. 301. PURPOSE.
It is the purpose of this title to encourage the achieve-
ment of reductions in the proportion of underage consum-
ers of tobacco products through the imposition of addi-
tional financial deterrents relating to tobacco products if
certain underage tobacco-use reduction targets are not
met.
SEC. 302. CHILD TOBACCO USE SURVEYS.
(a) ANNUAL PERFORMANCE SURVEY.—Not later
than 1 year after the date of the enactment of this Act
and annually thereafter the Secretary shall conduct a sur-
vey to determine, in accordance with subsection (b), the
percentage of all individuals under 18 years of age who
identify each manufacturer’s tobacco product as the usual
tobacco product smoked or used within the past 30 days
and the percentage of each ethnic group of such individ-
uals who identify each manufacturer’s tobacco product as
the usual tobacco product smoked or used within the past
30 days.
(b) EXCLUSION OF CERTAIN AGES.—The Secretary
shall exclude from the survey conducted under subsection
102
(a), children under the age of 12 years (or such other less-
er age as the Secretary may establish to strengthen the
validity of the survey).
(c) BASELINE LEVEL.—The baseline level of tobacco
product use with respect to a manufacturer is the percent-
age of each ethnic group of individuals under 18 years
of age determined to have used any tobacco product of
such manufacturer in the first annual performance survey
for 1999.
(d) ADDITIONAL MEASURES.—In order to increase
the understanding of youth tobacco product use, the Sec-
retary may, for informational purposes only, add addi-
tional measures to the survey under subsection (a), con-
duct periodic or occasional surveys at other times, and
conduct surveys of other populations such as young adults.
The results of such surveys shall be made available to
manufacturers and the public to assist in efforts to reduce
youth tobacco use.
(e) ADMINISTRATION.—
(1) RESULTS.—The Secretary shall establish a
scientific advisory board to ensure that surveys con-
ducted under this section produce results that are
reasonably precise and valid.
(2) TECHNICAL ADJUSTMENTS.—The Secretary
may make technical changes in the manner in which
103
the surveys are conducted so long as adjustments
are made to ensure that the results of the surveys
are comparable from year to year.
(3) PARTICIPATION IN SURVEY.—Notwithstand-
ing any other provision of law, the Secretary may
conduct a survey involving minors if the results of
such survey with respect to such minors are kept
confidential and not disclosed.
SEC. 303. REDUCTION IN UNDERAGE TOBACCO PRODUCT
USAGE.
(a) ANNUAL DETERMINATION.—The Secretary shall
annually determine, based on the annual performance sur-
veys under section 302, whether the required percentage
reduction (as described in subsection (b)) in the underage
use of tobacco products for a year has been achieved for
the year involved. Such determination shall be based on—
(1) with respect to cigarette products, the per-
centage prevalence of the use of a manufacturer’s
tobacco products by each ethnic group of individuals
who are under 18 years of age (as determined under
section 302(a)) for the year involved as compared to
the baseline level for the manufacturer (as deter-
mined under section 302(c)); and
(2) with respect to smokeless tobacco products,
the percentage prevalence of the use of a manufac-
104
turer’s smokeless tobacco products by each ethnic
group of individuals who are under 18 years of age
(as determined under section 302(a)) for the year
involved as compared to the baseline level for the
manufacturer (as determined under section 302(c)).
(b) PERCENTAGE REDUCTION IN UNDERAGE USE OF
TOBACCO PRODUCTS.—For purposes of this section, the
required percentage reduction from the baseline level in
the percentage underage use of tobacco products with re-
spect to each manufacturer of cigarettes and smokeless
tobacco products shall be as follows:
(1) CIGARETTES.—With respect to cigarettes—
(A) the percentage reduction in the per-
centage use of a manufacturer’s cigarettes shall
be at least 20 percent for each of the calendar
years 2001 and 2002;
(B) the percentage reduction in the per-
centage use of a manufacturer’s cigarettes shall
be at least 40 percent for each of the calendar
years 2003 and 2004;
(C) the percentage reduction in the per-
centage use of a manufacturer’s cigarettes shall
be at least 55 percent for each of the calendar
years 2005 through 2007; and
105
(D) the percentage reduction in the per-
centage use of a manufacturer’s cigarettes shall
be at least 67 percent for calendar year 2008
and each subsequent calendar year.
(2) SMOKELESS TOBACCO PRODUCTS.—With re-
spect to smokeless tobacco products—
(A) the percentage reduction in the per-
centage use of a manufacturer’s smokeless to-
bacco products shall be at least 20 percent for
each of the calendar years 2001 and 2002;
(B) the percentage reduction in the per-
centage use of a manufacturer’s smokeless to-
bacco products shall be at least 40 percent for
each of the calendar years 2003 and 2004;
(C) the percentage reduction in the per-
centage use of a manufacturer’s smokeless to-
bacco products shall be at least 55 percent for
each of the calendar years 2005 and 2007; and
(D) the percentage reduction in the per-
centage use of a manufacturer’s smokeless to-
bacco products shall be at least 67 percent for
calendar year 2008 and each subsequent cal-
endar year.
(c) REPORT.—Not later than December 31, 2005, the
Secretary shall prepare and submit to the appropriate
106
committees of Congress a report concerning the progress
made in achieving percentage reductions in the use of to-
bacco products by each ethnic group together with the rec-
ommendations, if any, of the Secretary for stronger reduc-
tions in calendar years after 2008.
SEC. 304. NONCOMPLIANCE.
(a) MANUFACTURER-SPECIFIC
PENALTY.—If the
Secretary determines under section 303(a) that the re-
quired percentage reduction for either cigarettes or smoke-
less tobacco products has not been achieved by a manufac-
turer as required under section 303(b), the Secretary shall
impose a penalty on the manufacturer in an amount equal
to $.02 cents multiplied by (1) the difference between the
percentage reduction required under section 303(b) for the
year involved and the actual percentage reduction achieved
by the manufacturer, and (2) the number of units of the
tobacco product involved that is manufactured and distrib-
uted for consumer use by such manufacturer in the year
following the year for which the determination is made.
(b) DE MINIMIS RULES.—
(1) EXEMPTION.—The Secretary shall not im-
pose a penalty on a manufacturer under subsection
(b) if the Secretary determines that the tobacco
products manufactured by such manufacturer are
used by less than 0.5 percent of children.
107
(2) PENALTY.—If the Secretary determines
that—
(A) the manufacturer was not manufactur-
ing tobacco products in the year the baseline
survey was conducted; and
(B) under an annual survey conducted
under section 302(a) for the year involved, the
tobacco products manufactured by such manu-
facturer are used by more than 0.5 percent of
children;
the Secretary shall impose a penalty on such manu-
facturer in an amount equal to $.02 cents multiplied
by the percentage reduction required under section
303(b) for the year involved and the total number of
units of the tobacco product involved that is manu-
factured and distributed for consumer use in the
year following the year for which the determination
is made.
(c) NONCOMPLIANCE FEES FOR CONSECUTIVE VIO-
LATIONS.—
(1) IN GENERAL.—If a manufacturer of a to-
bacco product fails to comply with the reductions re-
quired under this title in 3 or 4 consecutive years,
the noncompliance fee that is required to be paid by
the manufacturer under this section for each unit of
108
tobacco products manufactured by such manufac-
turer which is distributed for consumer use in the
year following the year in which the noncompliance
occurs, shall be the amount determined under sub-
section (b) for the year multiplied by 2.
(2) ADDITIONAL NONCOMPLIANCE.—If a manu-
facturer or industry described in paragraph (1) fails
to comply with the reductions required under this
title in 5 or 6 consecutive years, the noncompliance
fee described in such paragraph shall be the amount
determined under subsection (b) for the year multi-
plied by 3.
(d) PROHIBITION ON SINGLE-PACK SALES IN CASES
OF REPEATED NONCOMPLIANCE.—Not later than 2 years
after the date of enactment of this Act, the Secretary shall
establish regulations to prohibit the sale of single packs
of a manufacturer’s tobacco products in cases of repeated
noncompliance with the reductions required under section
303(b). Such regulations shall require that, if a manufac-
turer fails to comply with such reductions in 4 or more
consecutive years, the manufacturer’s tobacco products
may be sold in the following year only in packages contain-
ing not less than 10 units of the product per package (200
cigarettes per package in the case of cigarettes, and a cor-
responding package size for other tobacco products).
109
(e) REQUIRED GENERIC PACKAGING
IN SEVERE
CASES OF REPEATED NONCOMPLIANCE.—Not later than
2 years after the date of enactment of this Act, the Sec-
retary shall establish regulations to require units and
packages of a manufacturer’s tobacco products to have ge-
neric packaging in severe cases of repeated noncompliance
with the reductions required under section 303(b). Such
regulations shall require that, if a manufacturer fails to
comply with such reductions in 6 or more consecutive
years, the manufacturer’s tobacco products may be sold
in the following year only in units and packages whose
packaging contains no external images, logos, or text
(other than any required labels), except that the brand
name and the identifier ‘tobacco’ may appear on the pack-
aging in block lettering in black type on a white back-
ground.
(f) PAYMENT.—The penalty to be paid by a manufac-
turer under this section shall be paid on a quarterly basis,
with payments due not later than 30 days after the end
of each calendar quarter.
(g) PROCEDURES.—In assessing penalties under this
section, the Secretary shall have in place procedures to
take into account the effect that the margin of error of
the annual survey may have on the amounts of penalties
assessed to manufacturers.
110
(h) OTHER PRODUCTS.—The Secretary may promul-
gate regulations requiring reductions in the use of other
tobacco products by individuals under 18 years of age.
Such regulations shall contain provisions for the applica-
tion of monetary penalties for the failure of manufacturers
to achieve such reductions.
SEC. 305. RULEMAKING PROCEDURES.
(a) DOCKET.—Not later than the date of the proposal
of any regulation under this title, the Secretary shall es-
tablish a rulemaking docket for action on such regulation
(referred to in this section as a ‘‘rule’’). Whenever a rule
applies only within a particular State, a second (identical)
docket shall be established in the appropriate regional of-
fice of the Department of Health and Human Services.
(b) PUBLICATION.—In the case of any rule to which
this section applies, notice of proposed rulemaking shall
be published in the Federal Register, as provided under
section 553(b) of title 5, United States Code, shall be ac-
companied by a statement of its basis and purpose and
shall specify the period available for public comment (here-
inafter referred to as the ‘‘comment period’’). The notice
of proposed rulemaking shall also state the docket num-
ber, the location or locations of the docket, and the times
it will be open to public inspection. The statement of basis
and purpose shall include a summary of—
111
(1) the factual data on which the proposed rule
is based;
(2) the methodology used in obtaining the data
and in analyzing the data; and
(3) the major legal interpretations and policy
considerations underlying the proposed rule.
(c) PUBLIC COMMENT.—
(1) 
PUBLIC
INSPECTION.—The 
rulemaking
docket required under subsection (a) shall be open
for inspection by the public at reasonable times spec-
ified in the notice of proposed rulemaking. Any per-
son may copy documents contained in the docket.
The Secretary shall provide copying facilities which
may be used at the expense of the person seeking
copies, but the Secretary may waive or reduce such
expenses in such instances as the public interest re-
quires. Any person may request copies by mail if the
person pays the expenses, including personnel costs
to do the copying.
(2) COMMENTS
AND
OTHER
MATERIAL
IN
DOCKET.—
(A) COMMENTS.—Promptly upon receipt
by the Secretary, all written comments and doc-
umentary information on the proposed rule re-
ceived from any person for inclusion in the
112
docket during the comment period shall be
placed in the docket. The transcript of public
hearings, if any, on the proposed rule shall also
be included in the docket promptly upon receipt
from the person who transcribed such hearings.
All documents which become available after the
proposed rule has been published and which the
Secretary determines are of central relevance to
the rulemaking shall be placed in the docket as
soon as possible after their availability.
(B) REQUIREMENT
TO
PLACE
IN
DOCK-
ET.—The drafts of proposed rules submitted by
the Secretary to the Office of Management and
Budget for any interagency review process prior
to the proposal of any such rule, all documents
accompanying such drafts, and all written com-
ments thereon by other agencies and all written
responses to such written comments by the Sec-
retary shall be placed in the docket no later
than the date of proposal of the rule. The
drafts of the final rule submitted for such re-
view process prior to promulgation and all such
written comments thereon, all documents ac-
companying such drafts, and written responses
113
thereto shall be placed in the docket no later
than the date of promulgation.
(3) LIMITATION.—No objection may be submit-
ted with respect to a rule under this section on a
date that is more than 90 days after the date on
which the rule is published under subsection (b).
(d) OPPORTUNITY FOR ORAL PRESENTATION.—In
promulgating a rule to which this section applies—
(1) the Secretary shall allow any person to sub-
mit written comments, data, or documentary infor-
mation;
(2) the Secretary shall give interested persons
an opportunity for the oral presentation of data,
views, or arguments, in addition to an opportunity
to make written submissions;
(3) a transcript shall be kept of any oral pres-
entation; and
(4) the Secretary shall keep the record of such
proceeding open for 30 days after completion of the
proceeding to provide an opportunity for submission
of rebuttal and supplementary information.
(e) MATERIAL TO ACCOMPANY RULE.—
(1) IN GENERAL.—The promulgated rule shall
be accompanied by—
114
(A) a statement of basis and purpose like
that referred to in subsection (b) with respect
to a proposed rule; and
(B) an explanation of the reasons for any
major changes in the promulgated rule from the
proposed rule.
(2) RESPONSES.—The promulgated rule shall
also be accompanied by a response to each of the
significant comments, criticisms, and new data sub-
mitted in written or oral presentations during the
comment period.
(3) LIMITATION.—The promulgated rule may
not be based (in part or whole) on any information
or data which has not been placed in the docket as
of the date of such promulgation.
(f) JUDICIAL REVIEW.—
(1) IN GENERAL.—The record for judicial re-
view shall consist exclusively of the material referred
to in subsection (b), subparagraph (A) of subsection
(c)(2), and paragraphs (1) and (2) of subsection (e).
(2) LIMITATIONS.—Only an objection to a rule
or procedure which was raised with reasonable speci-
ficity during the period for public comment (includ-
ing any public hearing) may be raised during judi-
cial review. If the person raising an objection can
115
demonstrate to the Secretary that it was impractica-
ble to raise such objection within such time or if the
grounds for such objection arose after the period for
public comment (but within the time specified for ju-
dicial review) and if such objection is of central rel-
evance to the outcome of the rule, the Secretary
shall convene a proceeding for reconsideration of the
rule and provide the same procedural rights as
would have been afforded had the information been
available at the time the rule was proposed. If the
Secretary refuses to convene such a proceeding, such
person may seek review of such refusal in the United
States court of appeals for the appropriate circuit.
Such reconsideration shall not postpone the effec-
tiveness of the rule. The effectiveness of the rule
may be stayed during such reconsideration, however,
by the Secretary or the court for a period not to ex-
ceed 3 months.
(g) JURISDICTION.—The sole forum for challenging
procedural determinations made by the Secretary under
this section shall be in the United States court of appeals
for the appropriate circuit at the time of the substantive
review of the rule. No interlocutory appeals shall be per-
mitted with respect to such procedural determinations. In
reviewing alleged procedural errors, the court may invali-
116
date the rule only if the errors were so serious and related
to matters of such central relevance to the rule that there
is a substantial likelihood that the rule would have been
significantly changed if such errors had not been made.
(h) REVERSAL OF SECRETARY’S ACTION.—In the
case of review of any action of the Secretary to which this
section applies, the court may reverse any such action
found to be—
(1) arbitrary, capricious, an abuse of discretion,
or otherwise not in accordance with law;
(2) contrary to constitutional right, power,
privilege, or immunity;
(3) in excess of statutory jurisdiction, authority,
or limitations, or short of statutory right; or
(4) without observance of procedure required by
law, if—
(A) such failure to observe such procedure
is arbitrary or capricious;
(B) the requirement of subsection (f)(2)
has been met; and
(C) the condition of the last sentence of
subsection (g) is met.
(i) DEADLINES.—Each statutory deadline for pro-
mulgation of rules to which this section applies which re-
quires promulgation less than 6 months after date of pro-
117
posal may be extended to not more than 6 months after
date of proposal by the Secretary upon a determination
that such extension is necessary to afford the public, and
the agency, adequate opportunity to carry out the pur-
poses of this section.
(j) EFFECTIVE DATE.—The requirements of this sec-
tion shall take effect with respect to any rule the proposal
of which occurs after 90 days after the date of enactment
of this Act.
(k) RULE OF CONSTRUCTION.—Nothing in this Act
shall be construed to authorize judicial review of regula-
tions or orders of the Secretary under this Act, except as
otherwise provided for in this title.
(l) NO STAY.—In any action respecting the promul-
gation of regulations under this title or the administration
or enforcement of this title no court shall grant any stay,
injunctive, or similar relief before final judgment by such
court in such action.
(m) PUBLIC PARTICIPATION.—It is the intent of
Congress that, consistent with the policy of the Adminis-
trative Procedures Act, the Secretary in promulgating any
regulation under this title, including a regulation subject
to a deadline, shall ensure a reasonable period for public
participation of at least 30 days, except as otherwise ex-
pressly provided for.
118
SEC. 306. MISCELLANEOUS PROVISIONS.
(a) JUDICIAL REVIEW.—A manufacturer of tobacco
products may seek judicial review of any action under this
title only after a penalty has been assessed and paid by
the manufacturer to the Department of the Treasury and
only in the United States District Court for the District
of Columbia. In an action by a manufacturer seeking judi-
cial review of an annual performance survey, the manufac-
turer may prevail—
(1) only if the manufacturer shows that the re-
sults of the performance survey were arbitrary and
capricious; and
(2) only to the extent that the manufacturer
shows that it would have been required to pay a sub-
stantially lesser penalty if the results of the perform-
ance survey were not arbitrary and capricious.
(b) PROHIBITION.—No stay or other injunctive relief
may be granted by the Secretary or any court that has
the effect of enjoining the imposition and collection of pen-
alties to be applied under this section.
(c) DEFINITIONS.—As used in this title:
(1) CHILD.—The term ‘‘child’’ means, except as
provided in section 302(b), an individual who is
under the age of 18.
119
(2) MANUFACTURER.—The term ‘‘manufac-
turer’’ includes any person who imports a finished
tobacco product.
TITLE 
IV—TOBACCO 
TRANSI-
TION ASSISTANCE FOR PRO-
DUCERS, COMMUNITIES, AND
OTHER PERSONS
SEC. 401. MINIMUM PURCHASE REQUIREMENTS OF DOMES-
TIC FLUE–CURED AND BURLEY TOBACCO
FOR MANUFACTURERS OF CIGARETTES.
(a) DEFINITIONS.—For the purposes of this section:
(1) DOMESTIC TOBACCO.—The term ‘‘domestic
tobacco’’ means Flue-cured tobacco and Burley to-
bacco grown in the United States.
(2) MANUFACTURER
OF
CIGARETTES.—The
term ‘‘manufacturer of cigarettes’’ means any enter-
prise that produces cigarettes sold in the United
States with a total value, determined by the Sec-
retary of Agriculture for a calendar year, in excess
of a de minimus amount. The Secretary of Agri-
culture shall establish the de minimus amount to be
used for a calendar year, except that such amount
shall not be more than $1,000,000.
(b) PURCHASE REQUIREMENT.—
121
quantity of cigarettes sold in the United States for
the preceding year, as determined by the Secretary.
If the Secretary of Agriculture determines that it is
impracticable to use a particular preceding calendar
year as the base period, the Secretary may utilize
some other appropriate period as the base period.
(3) ADJUSTMENTS.—The amount of purchases
determined by the Secretary of Agriculture for a
manufacturer of cigarettes for any calendar year
may be increased by any increase in sales by the
manufacturer of cigarettes in the United States for
that calendar year as compared with the base period.
(4) AFFILIATES.—For purposes of the calcula-
tions required in this subsection, the Secretary of
Agriculture may combine the sales of a manufac-
turer of cigarettes with sales of affiliated manufac-
turers as determined to be needed or appropriate.
(d) PENALTY FOR VIOLATIONS.—
(1) IN GENERAL.—If a manufacturer of ciga-
rettes fails to make the required purchases for a cal-
endar year, the manufacturer of cigarettes shall be
subject to a penalty in the amount determined in
under paragraph (4). If the Secretary of Agriculture
determines that the manufacturer of cigarettes failed
to make the required purchases because of the use
122
of imported tobacco to manufacture cigarettes, the
Secretary may assess all or a portion of the penalty
amount against the importer or other party involved
in the marketing of the cigarettes, as the Secretary
considers appropriate or necessary to insure full en-
forcement of this section.
(2) LIABILITY.—The manufacturer of cigarettes
or other party potentially liable for a penalty under
this subsection will bear the burden of presenting
satisfactory proof of the required purchases.
(3) NOTICE AND HEARING.—The Secretary of
Agriculture shall assess a penalty under this sub-
section only after notice and opportunity for a hear-
ing.
(4) AMOUNT OF PENALTY.—The amount of a
penalty under this subsection shall be equal, for each
pound of the shortage, to an amount not to exceed
75 percent of the average per pound market price,
as determined by the Secretary of Agriculture, for
domestic tobacco of the like kind for the calendar
year preceding the calendar year in which the short-
age has occurred.
(5) RELATION TO OTHER SUMS DUE.—Penalty
amounts assessed under this subsection shall be in
123
addition to other amounts as may be due, including
late fees and interest.
(e) BARRING OF SALES OF CIGARETTES.—
(1) ORDER.—Until the amount of a penalty as-
sessed under subsection (d) is paid, the Secretary of
Agriculture may issue an order barring the manufac-
turer of cigarettes or other party subject to the pen-
alty, and its affiliates, from further sales of ciga-
rettes in the United States.
(2) ADDITIONAL REPORTS AND SANCTIONS.—
As part of an order under paragraph (1), the Sec-
retary of Agriculture may require such interim re-
ports of domestic tobacco purchases as the Secretary
considers warranted and demand reasonable interim
assurances of compliance with this section.
(3) ENFORCEMENT.—The Secretary of Agri-
culture may seek enforcement of an order under this
subsection in the district courts of the United
States.
(f) DISPOSITION OF FUNDS.—Notwithstanding any
other provision of law, sums collected as penalties, late
fees, or interest under this section shall be deposited in
the No Net Cost Tobacco Fund of, or the No Net Cost
Tobacco Account for, the relevant tobacco producer-owned
cooperative marketing associations handling the domestic
124
tobacco that is the subject of the shortage producing the
collection, as determined by the Secretary of Agriculture.
SEC. 402. TOBACCO TRANSITION TRUST FUND AND USE OF
TRUST FUND.
(a) ESTABLISHMENT.—There is established in the
Treasury of the United States a trust fund to be known
as the ‘‘Tobacco Transition Trust Fund’’ (in this section
referred to as the ‘‘Trust Fund’’), consisting of such
amounts as may be appropriated or credited to the Trust
Fund.
(b) TRANSFERS TO TRUST FUND.—There are appro-
priated and transferred to the Trust Fund for each fiscal
year amounts made available to the Trust Fund as pro-
vided for in section 101(d)(7).
(c) REPAYABLE ADVANCES.—
(1) AUTHORIZATION.—There are authorized to
be appropriated to the Trust Fund, as repayable ad-
vances, such sums as may from time to time be nec-
essary to make expenditures under subsection (d).
(2) REPAYMENT
WITH
INTEREST.—Repayable
advances made to the Trust Fund shall be repaid,
and interest on the advances shall be paid, to the
general fund of the Treasury when the Secretary of
the Treasury determines that moneys are available
in the Trust Fund to make the payments.
125
(3) RATE OF INTEREST.—Interest on an ad-
vance made under this subsection shall be at a rate
determined by the Secretary of Treasury (as of the
close of the calendar month preceding the month in
which the advance is made) that is equal to the cur-
rent average market yield on outstanding marketable
obligations of the United States with remaining pe-
riod to maturity comparable to the anticipated pe-
riod during which the advance will be outstanding.
(d) EXPENDITURES FROM TRUST FUND.—
(1) IN GENERAL.—Subject to paragraph (2),
amounts in the Trust Fund shall be available for ex-
penditure to provide—
(A) transition payments to tobacco quota
holders and quota lessees to compensate quota
holders and quota lessees for lost value of to-
bacco crops as a result of reduced demand for
tobacco;
(B) economic development assistance to to-
bacco producing communities;
(C) retraining for tobacco producers, to-
bacco factory workers; and tobacco warehouse-
men;
(D) educational scholarships for tobacco
producers and their immediate dependents;
126
(E) funds to cover the cost of providing
crop insurance for tobacco producers; and
(F) funds to cover the administrative costs
incurred by the Secretary of Agriculture to
carry out a price support program for tobacco.
(2) IMPLEMENTATION.—Amounts in the Trust
Fund shall be available for making expenditures de-
scribed in paragraph (1) only if a law is enacted not
later than January 1, 2000, that specifically pre-
scribes authorized uses of the Trust Fund.
(e) EFFECT ON PRICE SUPPORT PROGRAM.—Noth-
ing in this section shall prohibit the Secretary of Agri-
culture from administering a price support program for
tobacco so long as all administrative costs are paid out
of the Trust Fund.
(f) BUDGETARY TREATMENT.—This section con-
stitutes budget authority in advance of appropriations
Acts.
(g) TERMINATION OF EFFECTIVENESS.—The author-
ity provided by this section terminates effective January
1, 2000, unless a law is enacted not later than that date
that specifically prescribes authorized uses of the Trust
Fund.
127
TITLE V—STANDARDS TO RE-
DUCE 
INVOLUNTARY 
EXPO-
SURE TO TOBACCO SMOKE
SEC. 501. STANDARDS TO REDUCE INVOLUNTARY EXPO-
SURE TO TOBACCO SMOKE.
The Occupational Safety and Health Act of 1970 (29
U.S.C. 651 et seq.) is amended by adding at the end the
following:
‘‘SEC. 35. STANDARDS TO REDUCE INVOLUNTARY EXPO-
SURE TO TOBACCO SMOKE.
‘‘(a) DEFINITIONS.—In this section—
‘‘(1) PUBLIC FACILITY.—
‘‘(A) IN GENERAL.—The term ‘public facil-
ity’ means any workplace covered by this Act
and any enclosed structure regularly entered by
10 or more individuals at least 1 day per week,
including any such building owned by or leased
to a Federal, State, or local government entity
(including Congress). Such term shall not in-
clude any building or portion thereof while used
as a private residence.
‘‘(B) EXCLUSIONS.—The term ‘public fa-
cility’ does not include a portion of a building
which is used as a bar, a facility in which a re-
tailer engages primarily in the business of sell-
128
ing tobacco products, a hotel guest room that is
designated as a smoking room, a private club
while in use for social or fraternal activities
that are not open to the public, a casino, a
bingo parlor, or a prison.
‘‘(C) BAR.—The term ‘‘bar’’ means any in-
door area that is open to the general public and
that is devoted to the sale and service of alco-
holic beverages for on-premises consumption
where the service of food is only incidental to
the consumption of such beverages. Service of
food shall be considered incidental if the food
service generates less than 50 percent of the
total annual gross food and liquor sales of the
establishment.
‘‘(2) RESPONSIBLE ENTITY.—The term ‘respon-
sible entity’ means, with respect to any public facil-
ity, the owner or operator of such facility except
that, in the case of any such facility or portion
thereof which is leased, such term means the lessee.
‘‘(b) SMOKE-FREE ENVIRONMENT POLICY.—
‘‘(1) POLICY REQUIRED.—In order to protect
children and adults from cancer, respiratory disease,
heart disease, and other adverse health effects asso-
ciated with breathing environmental tobacco smoke,
129
the responsible entity for each public facility shall
adopt and implement at such facility a smoke-free
environment policy which meets the requirements of
paragraph (2) or (4).
‘‘(2) ELEMENTS OF POLICY.—
‘‘(A) IN GENERAL.—Each smoke-free envi-
ronment policy for a public facility shall—
‘‘(i) prohibit the smoking of ciga-
rettes, cigars, and pipes, and any other
combustion of tobacco within the facility
and on facility property within the imme-
diate vicinity of the entrance to the facility
or any air intake vent (including open win-
dows and doors); and
‘‘(ii) post a clear and prominent no-
tice of the smoking prohibition in appro-
priate and visible locations at the public fa-
cility.
‘‘(B) EXCEPTION.—The smoke-free envi-
ronment policy for a public facility may provide
an exception to the prohibition specified in sub-
paragraph (A) for 1 or more specially des-
ignated smoking areas within a public facility if
such area or areas meet the requirements of
paragraph (3).
130
‘‘(3) 
SPECIALLY
DESIGNATED
SMOKING
AREAS.—A specially designated smoking area meets
the requirements of this subsection if—
‘‘(A) the area is ventilated in accordance
with specifications promulgated by the Sec-
retary of Labor, in consultation with the Ad-
ministrator of the Environmental Protection
Agency, that ensure that air from the area is
directly exhausted to the outside of the building
and does not recirculate or drift to other areas
within the public facility;
‘‘(B) the area is maintained at negative
pressure, as compared to adjacent nonsmoking
areas, as determined under regulations promul-
gated by the Secretary of Labor, in consultation
with the Administrator of the Environmental
Protection Agency; and
‘‘(C) nonsmoking individuals are fully ad-
vised that the area is a smoking area and such
individuals do not have to enter the area for
any purpose while smoking is occurring in such
area, and for an additional period that allows
for at least 3 air exchanges to occur in the
room.
131
Cleaning and maintenance work shall be conducted
in such area only while no smoking is occurring in
the area, following an additional period that allows
for at least 3 air exchanges to occur in the room.
‘‘(4) SPECIAL RULES.—
‘‘(A) SCHOOLS
AND
OTHER
FACILITIES
SERVING CHILDREN.—
‘‘(i) IN GENERAL.—With respect to a
facility described in clause (ii), the respon-
sible entity for the facility shall—
‘‘(I) adopt and implement at
such facility a smoke-free environment
policy that prohibits the smoking of
cigarettes, cigars, and pipes, and any
other combustion of tobacco within
the facility and on facility property;
‘‘(II) adopt and implement at
such facility a smoke-free environment
policy that prohibits the use of smoke-
less tobacco products within the facil-
ity and on facility property; and
‘‘(III) post a clear and prominent
notice of the smoking and smokeless
tobacco prohibition in appropriate and
visible locations at the public facility.
132
‘‘(ii) FACILITY.—A facility described
in this clause is—
‘‘(I) an elementary or secondary
school (as such term is defined in sec-
tion 14101 of the Elementary and
Secondary Education Act of 1965 (20
U.S.C. 8801);
‘‘(II) any facility at which a
Head Start program or project is
being carried out under the Head
Start Act (42 U.S.C. 9831 et seq.);
‘‘(III) any facility at which a li-
censed or certified child care provider
provides child care services; and
‘‘(IV) any recreation or other fa-
cility maintained primarily to provide
services to children as determined by
the Secretary of Labor.
‘‘(B) PUBLIC TRANSPORTATION.—
‘‘(i) IN
GENERAL.—With respect to
any responsible entity which operates con-
veyances of public transportation (includ-
ing bus, rail, aircraft, boat, or any other
conveyance determined appropriate by the
133
Secretary of Labor), the responsible entity
shall—
‘‘(I) adopt and implement on
such conveyances a smoke-free envi-
ronment policy that prohibits the
smoking of cigarettes, cigars, and
pipes, and any other combustion of to-
bacco within the conveyance and on
property affiliated with the convey-
ance; and
‘‘(II) post a clear and prominent
notice of the smoking prohibition in
appropriate and visible locations on
the conveyance.
‘‘(ii) RAIL
TRANSPORTATION.—The
smoke-free environment policy for a re-
sponsible entity that operates a rail carrier
providing rail commuter service may pro-
vide an exception to the prohibition speci-
fied in clause (i) with respect to such serv-
ice for 1 or more specially designated
smoking cars if such cars meet the require-
ments of paragraph (3).
‘‘(c) ENFORCEMENT.—To be eligible to receive funds
under the Healthy Kids Act, a State shall make a dem-
134
onstration to the Secretary that the State is enforcing this
section within the State. Such laws or procedures shall
permit aggrieved individuals to enforce this section
through administrative and judicial means.
‘‘(d) PREEMPTION.—Notwithstanding section 18,
nothing in this section shall preempt or otherwise affect
any other existing or future Federal, State or local law
which provides protection from health hazards from envi-
ronmental tobacco smoke that are as least as stringent
as those provided for in this section.
‘‘(e) REGULATIONS.—Not later than 12 months after
the date of enactment of this section, the Secretary of
Labor shall promulgate such regulations as the Secretary
deems necessary to carry out this section.
‘‘(f) EFFECTIVE DATE.—The provisions of this sec-
tion shall take effect on the date that is 1 year after the
date of enactment of this section.’’.
TITLE VI—PUBLIC HEALTH AND
OTHER PROGRAMS
Subtitle A—Research Programs
SEC. 601. TOBACCO-RELATED RESEARCH.
(a) IN GENERAL.—The Secretary shall establish a
program to encourage and promote (through grants, con-
tracts, or otherwise) expanded research, investigations, ex-
periments and studies, concerning—
135
(1) the relationship between the use of tobacco
products and cancer, cardiovascular diseases, lung
diseases and other diseases;
(2) the effects of tobacco products, ingredients
of tobacco products, and tobacco smoke on the
human body and methods of reducing any negative
effects, including the development of non-addictive,
reduced risk tobacco products;
(3) the addictive effects of nicotine and how
such effects differ with respect to different individ-
uals;
(4) the prevention and cure of diseases and ill-
nesses most associated with the use of tobacco prod-
ucts;
(5) differentials between brands of tobacco
products with respect to health effects or addiction;
(6) the effectiveness of drugs and devices in as-
sisting individuals to stop using tobacco products;
and
(7) the relationship between the use of tobacco
products and cancer, particularly among minorities.
(b) ELIGIBILITY.—To be eligible to receive a grant,
contract, or other assistance under this section an entity
or individual shall prepare and submit to the Secretary
136
an application at such time, in such manner, and contain-
ing such information as the Secretary may require.
(c) USE OF FUNDS.—Amounts received by an indi-
vidual or entity under this section shall be used to carry
out activities under the program established under sub-
section (a).
(d) ADDITIONAL REQUIREMENTS.—To be eligible to
receive a grant, contract, or other assistance under this
section an entity or individual shall provide assurances to
the Secretary that—
(1) any research to be conducted under the
grant or contract will be generally consistent with
the requirements applicable to research conducted
under the authority of the National Institutes of
Health;
(2) adequate records will be maintained with re-
spect to such assistance; and
(3) amounts provided to the individual or entity
will be subject to independent audit.
(e) EFFECT ON MINORITIES AND WOMEN.—The pro-
gram established under subsection (a) shall be conducted
in a manner that ensures that research will be conducted
at minority education institutions, where available, or by
minority researchers and minority public health organiza-
tions to investigate the different effects of tobacco use on
137
minorities and women in proportion to their prevalence in
the smoking population.
(f) DISSEMINATION
OF RESULTS.—The Secretary
shall establish procedures for the dissemination of the re-
sults of the research conducted under this section.
(g) FUNDING.—There shall be made available to
carry out this section an amount equal to the amount
made available under section 121(c)(1)(D) for a fiscal
year.
SEC. 602. RESEARCH RELATING TO PATTERNS OF SMOK-
ING.
(a) IN GENERAL.—The Secretary shall establish a
program to provide for the conduct of research (through
the provision of grants, contracts, or otherwise) concern-
ing the cultural, social, behavioral, neurological and psy-
chological reasons that individuals refrain from using to-
bacco products, begin to use tobacco products, continue
using tobacco products, or quit using tobacco products.
(b) ELIGIBILITY.—To be eligible to receive a grant,
contract, or other assistance under this section an entity
or individual shall prepare and submit to the Secretary
an application at such time, in such manner, and contain-
ing such information as the Secretary may require.
(c) USE OF FUNDS.—Amounts received by an indi-
vidual or entity under this section shall be used to carry
138
out activities under the program established under sub-
section (a).
(d) ADDITIONAL REQUIREMENTS.—To be eligible to
receive a grant, contract, or other assistance under this
section an entity or individual shall provide assurances to
the Secretary that—
(1) any research to be conducted under the
grant or contract will be generally consistent with
the requirements applicable to research conducted
under the authority of the National Institutes of
Health;
(2) adequate records will be maintained with re-
spect to such assistance; and
(3) amounts provided to the individual or entity
will be subject to independent audit.
(e) EFFECT ON MINORITIES AND WOMEN.—The pro-
gram established under subsection (a) shall be conducted
at minority education institutions, where available, or by
minority researchers and minority public health organiza-
tions to investigate the different factors affecting tobacco
use among minorities and women in proportion to their
prevalence in the smoking population.
(f) DISSEMINATION
OF RESULTS.—The Secretary
shall establish procedures for the dissemination of the re-
sults of the research conducted under this section.
139
(g) FUNDING.—There shall be made available to
carry out this section an amount equal to 10 percent of
the amounts made available under section 101(d)(5)(C)
for a fiscal year.
SEC. 603. SURVEILLANCE AND EVALUATION.
(a) IN GENERAL.—The Secretary, acting through the
Director of the Centers for Disease Control and Preven-
tion, shall conduct surveillance and evaluation activities,
including the surveys authorized under title III, to monitor
patterns of tobacco use and determine the effectiveness of
various anti-tobacco programs funded under this Act.
Such activities shall include studies of the responsiveness
of smokers and potential smokers, particularly youth
smokers, to price increases and non-price incentives.
(b) FUNDING.—There shall be made available to
carry out this section an amount equal to 5 percent of
the amounts made available under section 101(d)(5)(C)
for a fiscal year.
Subtitle B—Education and
Prevention Programs
SEC. 611. GRANTS FOR SCHOOL- AND COMMUNITY-BASED
TOBACCO DANGER EDUCATION PROGRAMS.
(a) IN GENERAL.—The Secretary shall establish a
program to award grants to States to enable such States
140
to assist schools, colleges, universities, communities, or
community organizations—
(1) to carry out school-based and college- or
university-based education programs concerning the
dangers of using tobacco products using methods
that are proven and effective; and
(2) to carry out community-based prevention
programs, including utilizing education institutions
or minority public health clinics or organizations in
predominantly minority communities in proportion
to their prevalence in the smoking population, using
methods that are proven to be culturally and linguis-
tically appropriate.
Programs under paragraphs (1) and (2) which are de-
signed to deal with the use of tobacco products by blacks
shall be carried out by part B institutions as defined in
section 322(2) of the Higher Education Act (20 U.S.C.
1061(2)). Programs under such paragraphs which are de-
signed to deal with the use of tobacco products by His-
panics shall be carried out by Hispanic Serving Institu-
tions as defined in section 316(b)(1) of the Higher Edu-
cation Act (20 U.S.C. 1059c(b)(1)). Programs under such
paragraphs which are designed to deal with the use of to-
bacco products by Asian Americans and Pacific Islanders
shall be carried out by national or regional community
141
based programs or research institutions with proven expe-
rience in Asian American and Pacific Islander health re-
search.
(b) ELIGIBILITY.—To be eligible to receive a grant
under this section a State shall prepare and submit to the
Secretary an application at such time, in such manner,
and containing such information as the Secretary may re-
quire, including a State plan (that is subject to approval
by the Secretary) that describes—
(1) the types of programs that the State will
fund under the grant;
(2) the manner in which the State will ensure
that the programs will be age-appropriate, culturally
appropriate, and linguistically appropriate for the
target population; and
(3) the manner in which the State will monitor
the effectiveness of such programs.
(c) USE OF FUNDS.—Amounts received by a State
under this section shall be used to—
(1) carry out State-wide school-based education
programs that are focused on those regions of the
State with high smoking rates and targeted at popu-
lations who are most at risk to start smoking;
(2) carry out State-wide college- and university-
based education programs to discourage individuals
142
between the ages of 18 and 24 from beginning to
use tobacco products, such programs to be focused
on colleges or universities with high smoking rates;
(3) carry out community-based prevention pro-
grams that are focused on those populations, within
the community, including minority populations in
proportion to their prevalence in the smoking popu-
lation, that are most at-risk to use tobacco products
or that have been targeted by tobacco advertising or
marketing;
(4) develop curriculums for such programs;
(5) acquire materials for such programs;
(6) expand the IMPACT or ASSIST program;
and
(7) carry out other activities determined appro-
priate by the Secretary.
(d) ADDITIONAL REQUIREMENTS.—To be eligible to
receive a grant under this section a State shall provide
assurances to the Secretary that—
(1) the State will annually report to the Sec-
retary on the effectiveness of the educational ap-
proaches implemented by the State;
(2) adequate records will be maintained with re-
spect to such assistance;
143
(3) amounts provided to individuals or entities
will be subject to independent audit; and
(4) the State will involve local public health of-
ficials in the planning and implementation of the
program.
(e) FUNDING.—There shall be made available to
carry out this section an amount equal to 15 percent of
the amounts made available under section 101(d)(5)(C)
for a fiscal year.
Subtitle C—Miscellaneous
Programs
SEC. 621. COUNTER-ADVERTISING PROGRAMS.
(a) IN GENERAL.—The Secretary shall carry out pro-
grams to reduce tobacco usage through media-based (such
as counter-advertising campaigns) and nonmedia-based
education, prevention and cessation campaigns designed to
discourage the use of tobacco products by individuals and
to encourage those who use such products to quit. Such
programs shall include national and local campaigns and
shall target, in a culturally and linguistically appropriate
manner and utilizing appropriate media outlets (including
newspapers and other media owned by and targeted to mi-
norities), adults, children, women and minorities in pro-
portion to their prevalence in the smoking population who
have been targeted by tobacco industry advertising.
144
(b) ELIGIBILITY.—To be eligible to receive assistance
under this section an entity or individual shall prepare and
submit to the Secretary an application at such time, in
such manner, and containing such information as the Sec-
retary may require.
(c) USE OF FUNDS.—Amounts received by an indi-
vidual or entity under this section shall be used to carry
out activities under the programs established under sub-
section (a). Such amounts may be used to design and im-
plement such activities and to conduct research concerning
the effectiveness of such programs.
(d) FUNDING.—There shall be made available to
carry out this section an amount equal to 25 percent of
the amounts made available under section 101(d)(5)(C)
for a fiscal year.
SEC. 622. NATIONAL TOBACCO CESSATION PROGRAM.
(a) ESTABLISHMENT.—There is established a pro-
gram to be known as the ‘‘National Tobacco Cessation
Program’’. The Secretary may award grants to, and enter
into contracts and cooperative agreements with, public and
private entities for the purpose of expanding the availabil-
ity and utilization of tobacco use cessation services. The
program established under this section shall ensure that
cessation programs will be conducted in a manner that
145
targets minorities and women in proportion to their preva-
lence in the smoking population.
(b) USE OF FUNDS.—Amounts made available under
a grant, contract or cooperative agreement under sub-
section (a) shall be used for the planning, establishment,
or administration of tobacco use cessation programs ap-
proved in accordance with subsection (c).
(c) CESSATION PROGRAMS.—Programs receiving as-
sistance under this section shall provide a range and qual-
ity of services consistent with the most recent cessation
service guidelines issued by the Agency for Health Care
Policy and Research. Using the best available scientific in-
formation, the Secretary shall promulgate such additional
guidelines as are necessary to assure the quality, acces-
sibility and cost effectiveness of services receiving funds
under this section.
(d) CESSATION PROGRAMS
IN MINORITY COMMU-
NITIES.—The Secretary shall ensure programs established
under subsection (a) are directed to targeted populations
and minorities in proportion to their prevalence in the
smoking population. Programs operating in the minority
community should be culturally and linguistically appro-
priate, and operated by minority education institutions,
public health or community-based organizations.
146
(e) FUNDING.—There shall be made available to
carry out this section an amount equal to 33 percent of
the amounts made available under section 101(d)(5)(C)
for a fiscal year.
SEC. 623. ASSISTANCE FOR THOSE SUFFERING FROM TO-
BACCO-RELATED ILLNESSES.
(a) IN GENERAL.—The Secretary shall establish a
program to provide assistance and compensation to indi-
viduals (and entities providing services to such individuals)
suffering from tobacco-related illnesses and conditions.
Under such program assistance shall be targeted at indi-
viduals who are determined to be uninsured or under-
insured and who can demonstrate financial hardship.
(b) DEVELOPMENT OF PLAN.—The Secretary shall
carry out the program established under subsection (a)
under a plan to be developed by the Secretary, not later
than 1 year after the date of enactment of this Act.
(c) ELIGIBILITY.—
(1) OF ENTITIES.—To be eligible to receive as-
sistance under this section an entity shall—
(A) be a public or nonprofit private entity;
(B) prepare and submit to the Secretary
an application at such time, in such manner,
and containing such information as the Sec-
retary may require;
147
(C) provide assurances that amounts re-
ceived under the grant will be used in accord-
ance with subsection (d)(1); and
(D) meet any other requirements deter-
mined appropriate by the Secretary.
(2) OF INDIVIDUALS.—To be eligible to receive
assistance under this section an individual shall—
(A) prepare and submit to the Secretary
an application at such time, in such manner,
and containing such information as the Sec-
retary may require;
(B) provide assurances that amounts re-
ceived under the grant will be used only in ac-
cordance with subsection (d)(2); and
(C) meet any other requirements deter-
mined appropriate by the Secretary.
(d) USE OF FUNDS.—Assistance provided under this
section shall be used—
(1) in the case of an entity eligible under sub-
section (c)(1), to provide treatment for tobacco-relat-
ed illnesses; or
(2) in the case of an individual eligible under
subsection (c)(2), to pay for the receipt of treat-
ments for tobacco-related illnesses.
148
(e) ADDITIONAL REQUIREMENTS.—In providing as-
sistance under this section, the Secretary shall ensure that
such assistance is not used to duplicate any payments
made under any health insurance plans but rather to cover
uncompensated care provided to individuals with tobacco-
related illnesses.
(f) FUNDING.—There shall be made available to
carry out this section an amount equal to 3 percent of
the amounts made available under section 101(d)(5)(C)
for a fiscal year.
SEC. 624. INTERNATIONAL TOBACCO CONTROL.
(a) GOVERNMENTAL ACTIVITIES.—
(1) IN GENERAL.—The Secretary (in consulta-
tion with the Secretary of State) may provide bilat-
eral 
assistance, 
including 
technical 
assistance
through the Centers for Disease Control and Preven-
tion, to foreign countries and multilateral assistance
to reduce and prevent the use of tobacco in foreign
countries. Such assistance shall be focused on pre-
venting the use of tobacco products by minors.
(2) FUNDING.—There shall be made available
to carry out this subsection an amount equal to 2
percent of the amounts made available under section
101(d)(5)(C) for a fiscal year. Such amount shall be
149
split equally between bilateral and multilateral as-
sistance.
(b) NONGOVERNMENTAL ACTIVITIES.—
(1) PURPOSE.—The purpose of this subsection
is to establish the American Center on Global
Health and Tobacco (referred to in this subsection
as ‘‘ACT’’). ACT shall assist organizations in other
countries to reduce and prevent the use of tobacco.
Activities ACT supports shall include—
(A) public education programs that inform
the public about the hazards of tobacco use and
of environmental tobacco smoke;
(B) mass media campaigns, including paid
counter-tobacco advertisements, to reverse the
image appeal of pro-tobacco messages, espe-
cially those that glamorize and ‘‘Westernize’’ to-
bacco use to young people; and
(C) education about the economic and soci-
etal costs of tobacco use, and effective tobacco
use prevention and cessation strategies that are
appropriate for the country involved.
(2) ESTABLISHMENT.—
(A) IN GENERAL.—There is hereby estab-
lished in the District of Columbia a private,
nonprofit corporation to be known as the Amer-
150
ican Center on Global Health and Tobacco.
ACT shall—
(i) not be an agency or establishment
of the United States; and
(ii) except as otherwise provided in
this section, be subject to, and have all the
powers conferred upon a nonprofit corpora-
tion by the District of Columbia Nonprofit
Corporation Act (D.C. Code section 29-501
et seq.).
(B) RELATION
TO
UNITED
STATES.—
Nothing in this subsection shall be construed as
making ACT an agency or establishment of the
United States, or as making the members of
the Board of ACT, or its employees, officers or
employees of the United States.
(C) RELATION TO NONGOVERNMENTAL OR-
GANIZATIONS.—ACT shall have a limited staff,
and, to the maximum extent practicable, utilize
the available experience and talents of non-
governmental organizations with specialized ex-
perience in health, education, media, and to-
bacco.
151
(D) GOVERNING
BOARD.—The Secretary
shall appoint a governing board of up to 25
members including—
(i) on a bipartisan basis, Members of
the Senate and of the House of Represent-
atives;
(ii) the heads of United States public
health organizations;
(iii) the heads of United States media,
marketing, and other nongovernment insti-
tutions and corporations; and
(iv) individuals active in education,
public health, and other relevant activities.
(E) 
INTERNATIONAL
ADVISORY
COUN-
CIL.—An International Advisory Council con-
sisting of representatives from key global, re-
gional, and national public health organizations,
and leading individual educators and health
professionals shall provide advisory assistance
to ACT.
(3) FUNDING.—The Secretary of the Treasury
shall on October 1 of each fiscal year beginning after
the date of enactment of this Act, transfer an
amount equal to 1 percent of the amounts made
152
available under section 101(d)(5)(C) for the fiscal
year to ACT to carry out this subsection.
(4) REQUIREMENTS FOR ELIGIBILITY FOR AN-
NUAL TRANSFERS FROM THE TRUST FUND.—
(A) OVERSIGHT.—ACT and its grantees
shall be subject to the oversight and supervision
of Congress.
(B) COMPLIANCE.—
(i) FUNDING
CONTINGENT
ON
COM-
PLIANCE.—Annual payments from the
Trust Fund may be made to ACT under
this subsection only if ACT complies with
the requirements specified in this sub-
section.
(ii) USE OF FUNDS.—ACT may only
fund programs for private sector groups,
and may not carry out programs directly.
ACT may provide funding only for pro-
grams which are consistent with the pur-
poses of this subsection.
(C) SALARIES AND COMPENSATION.—
(i) NO OTHER SOURCE OF COMPENSA-
TION.—Officers and employees of ACT
may not receive any salary or other com-