121 
(2) YOUNG INDIVIDUALS.—For the purposes of 
this subtitle, the term ‘‘young individuals’’ means in-
dividuals who are under 18 years of age. 
(b) SIZE AND METHODOLOGY.— 
(1) IN GENERAL.—The survey referred to in 
subsection (a) shall be comparable in size and meth-
odology to the Monitoring the Future survey that 
was completed in 1999 to measure the use of ciga-
rettes (by brand) by youths under 18 years of age 
within the 30-day period prior to the conduct of the 
study. 
(2) CONCLUSIVE
ACCURATENESS.—A survey 
using the methodology described in paragraph (1) 
shall be deemed conclusively proper, correct, and ac-
curate for purposes of this section. 
(3) DEFINITION.—In this subtitle, the term 
‘‘Monitoring the Future survey’’ means the com-
bined survey of 8th, 10th, and 12th grade students 
that was conducted at the Institute for Social Re-
search at the University of Michigan. 
(c) REDUCTION.—The Secretary, based on a com-
parison of the results of the first annual cigarette survey 
referred to in subsection (a) and the Monitoring the Fu-
ture survey referred to in subsection (b)(1), shall deter-
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mine the percentage reduction (if any) in youth cigarette 
use for each manufacturer of cigarettes. 
(d) PARTICIPATION
IN SURVEY.—Notwithstanding 
any other provision of law, the Secretary may conduct a 
survey under this section involving minors if the results 
of such survey with respect to such minors are kept con-
fidential and not disclosed. 
(e) NONAPPLICABILITY.—Chapter 35 of title 44, 
United States Code, shall not apply to information re-
quired for the purposes of carrying out this section. 
(f) DEFINITION.—In this subtitle the term ‘‘ciga-
rette’’ has the meaning given such term in section 3(1) 
of the Federal Cigarette Labeling and Advertising Act (15 
U.S.C. 1332(1)). 
SEC. 412. CIGARETTE USE REDUCTION GOAL AND NON-
COMPLIANCE. 
(a) GOAL.—It shall be the cigarette use reduction 
goal that each manufacturer reduce youth cigarette use 
by at least 15 percent during the period between the Moni-
toring the Future survey referred to in section 411(b)(1) 
and the completion of the first annual cigarette survey 
(and such subsequent surveys as compared to the previous 
year’s survey) referred to in section 411(a). 
(b) NONCOMPLIANCE.— 
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123 
(1) INDUSTRY-WIDE
PENALTY.—If the Sec-
retary determines that the cigarette use reduction 
goal under subsection (a) has not been achieved, the 
Secretary shall, not later than September 10, 2007, 
and September 10 of each year thereafter, impose 
an industry-wide penalty on the manufacturers of 
cigarettes in an amount that is in the aggregate 
equal to— 
(A) if youth cigarette use has been reduced 
by 5 percent or less, $6,000,000,000; 
(B) if youth cigarette use has been reduced 
by at least 6 percent but less than 10 percent, 
$4,000,000,000; and 
(C) if youth cigarette use has been reduced 
by at least 11 percent but less than 15 percent, 
$2,000,000,000. 
(2) PAYMENT.—The industry-wide penalty im-
posed under this subsection shall be paid by each 
manufacturer based on the percentage of cigarettes 
of each such manufacturer that are used by youth 
(as determined under the Monitoring the Future 
survey and compared to the cigarettes manufactured 
by all manufacturers) as such percentage relates to 
the total amount to be paid by all manufacturers. 
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(3) FINAL
DETERMINATION.—The determina-
tion of the Secretary as to the amount and allocation 
of a surcharge under this subtitle shall be final and 
the manufacturer shall pay such surcharge within 10 
days of the date on which the manufacturer is as-
sessed. Such payment shall be retained by the Sec-
retary pending final judicial review of what, if any, 
change in the surcharge is appropriate. 
(4) COMPLIANCE
BY
CERTAIN
MANUFACTUR-
ERS.—A manufacturer that individually complies 
with the goal under subsection (a) shall not be liable 
for the payment of any portion of the penalty under 
this subsection. 
(5) LIMITATION.—With respect to cigarettes, a 
manufacturer with a market share of 1 percent or 
less of youth cigarette use shall not be liable for the 
payment of a surcharge under this section. 
(c) PENALTIES NONDEDUCTIBLE.—The payment of 
penalties under this subtitle shall not be considered to be 
an ordinary and necessary expense in carrying on a trade 
or business for purposes of the Internal Revenue Code of 
1986 and shall not be deductible. 
(d) JUDICIAL REVIEW.— 
(1) AFTER PAYMENT.—A manufacturer of ciga-
rettes may seek judicial review of any action under 
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this subtitle only after the assessment involved has 
been paid by the manufacturer to the Department of 
the Treasury and only in the United States District 
Court for the District of Columbia. 
(2) REVIEW BY ATTORNEY GENERAL.—Prior to 
the filing of an action by a manufacturer seeking ju-
dicial review of an action under this subtitle, the 
manufacturer shall notify the Attorney General of 
such intent to file and the Attorney General shall 
have 30 days in which to respond to the action. 
(3) REVIEW.—The amount of any surcharge 
paid under this subtitle shall be subject to judicial 
review by the United States Court of Appeals for the 
District of Columbia Circuit, based on the arbitrary 
and capricious standard of section 706 of title 5, 
United States Code. Notwithstanding any other pro-
vision of law, no court shall have the authority to 
stay any surcharge payment due to the Secretary 
under this subtitle pending judicial review until the 
Secretary has made or failed to make a compliance 
determination, as described under this subtitle, that 
has adversely affected the person seeking the review. 
SEC. 413. ENFORCEMENT. 
(a) INITIAL PENALTY.—There is hereby imposed an 
initial penalty on the failure of any manufacturer to make 
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