141 
make recommendations on how to prevent or elimi-
nate, and what technologies could help facilitate the 
elimination of, such advertising; and 
(3) collect data on such trade in tobacco prod-
ucts by person that is not— 
(A) a participating manufacturer (as that 
term is defined in section II(jj) of the Master 
Settlement Agreement of November 23, 1998, 
between certain of the States and certain to-
bacco product manufacturers); or 
(B) an affiliate or subsidiary of a partici-
pating manufacturer. 
(b) Not later than 18 months after the effective date 
of this Act, the Administrator shall submit to the Sec-
retary, and committees of relevant jurisdiction in Con-
gress, a report the recommendations of the study con-
ducted under subsection (a). 
SEC. 402. AMENDMENT TO SECTION 1926 OF THE PUBLIC 
HEALTH SERVICE ACT. 
Section 1926 of the Public Health Service Act (42 
U.S.C. § 300x–26) is amended by adding at the end there-
of the following: 
‘‘(e)(1) Subject to paragraphs (2) and (3), for the 
first fiscal year after enactment and each subsequent fiscal 
year, the Secretary shall reduce, as provided in subsection 
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(h), the amount of any grant under section 300x–21 of 
this title for any State that does not have in effect a stat-
ute with substantially the following provisions: 
‘‘ ‘SEC. 1. DISTRIBUTION TO MINORS. 
‘‘ ‘(a) No person shall distribute a tobacco product 
to an individual under 18 years of age or a different min-
imum age established under State law. A person who vio-
lates this subsection is liable for a civil money penalty of 
not less than $25 nor more than $125 for each violation 
of this subsection; 
‘‘ ‘(b) The employer of an employee who has violated 
subsection (a) twice while in the employ of such employer 
is liable for a civil money penalty of $125 for each subse-
quent violation by such employee. 
‘‘ ‘(c) It shall be a defense to a charge brought under 
subsection (a) that— 
‘‘ ‘(1) the defendant— 
‘‘ ‘(A) relied upon proof of age that ap-
peared on its face to be valid in accordance with 
the Federal Tobacco Act of 2007; 
‘‘ ‘(B) had complied with the requirements 
of section 5 and, if applicable, section 7; or 
‘‘ ‘(C) relied upon a commercially available 
electronic age verification service to confirm 
that the person was an age-verified adult; or 
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‘‘ ‘(2) the individual to whom the tobacco prod-
uct was distributed was at the time of the distribu-
tion used in violation of subsection 8(b). 
‘‘ ‘SEC. 2. PURCHASE, RECEIPT, OR POSSESSION BY MINORS 
PROHIBITED. 
‘‘ ‘(a) An individual under 18 years of age or a dif-
ferent minimum age established under State law shall not 
purchase or attempt to purchase, receive or attempt to re-
ceive, possess or attempt to possess, a tobacco product. 
An individual who violates this subsection is liable for a 
civil money penalty of not less than $25 nor more than 
$125 for each such violation, and shall be required to per-
form not less than four hours nor more than ten hours 
of community service. Upon the second or each subsequent 
violation of this subsection, such individual shall be re-
quired to perform not less than eight hours nor more than 
twenty hours of community service. 
‘‘ ‘(b) A law enforcement agency, upon determining 
that an individual under 18 years of age or a different 
minimum age established under State law allegedly pur-
chased, received, possessed, or attempted to purchase, re-
ceive, or possess, a tobacco product in violation of sub-
section (a) shall notify the individual’s parent or parents, 
custodian, or guardian as to the nature of the alleged vio-
lation if the name and address of a parent or parents, 
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guardian, or custodian is reasonably ascertainable by the 
law enforcement agency. The notice required by this sub-
section shall be made not later than 48 hours after the 
individual who allegedly violated subsection (a) is cited by 
such agency for the violation. The notice may be made 
by any means reasonably calculated to give prompt actual 
notice, including notice in person, by telephone, or by first- 
class mail. 
‘‘ ‘(c) Subsection (a) does not prohibit an individual 
under 18 years of age or a different minimum age estab-
lished under State law from possessing a tobacco product 
during regular working hours and in the course of such 
individual’s employment if the tobacco product is not pos-
sessed for such individual’s consumption. 
‘‘ ‘SEC. 3. OUT-OF-PACKAGE DISTRIBUTION. 
‘‘ ‘It shall be unlawful for any person to distribute 
cigarettes or a smokeless tobacco product other than in 
an unopened package that complies in full with section 
108 of the Federal Tobacco Act of 2007. A person who 
distributes a cigarette or a smokeless tobacco product in 
violation of this section is liable for a civil money penalty 
of not less than $25 nor more than $125 for each such 
violation. 
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145 
‘‘ ‘SEC. 4. SIGNAGE. 
‘‘ ‘It shall be unlawful for any person who sells to-
bacco products over-the-counter to fail to post conspicu-
ously on the premises where such person sells tobacco 
products over-the-counter a sign communicating that— 
‘‘ ‘(1) the sale of tobacco products to individuals 
under 18 years of age or a different minimum age 
established under State law is prohibited by law; 
‘‘ ‘(2) the purchase of tobacco products by indi-
viduals under 18 years of age or a different min-
imum age established under State law is prohibited 
by law; and 
‘‘ ‘(3) proof of age may be demanded before to-
bacco products are sold. 
A person who fails to post a sign that complies fully with 
this section is liable for a civil money penalty of not less 
than $25 nor more than $125. 
‘‘ ‘SEC. 5. NOTIFICATION OF EMPLOYEES. 
‘‘ ‘(a) Within 180 days of the effective date of the 
Youth Prevention and Tobacco Harm Reduction Act, 
every person engaged in the business of selling tobacco 
products at retail shall implement a program to notify 
each employee employed by that person who sells tobacco 
products at retail that— 
‘‘ ‘(1) the sale or other distribution of tobacco 
products to any individual under 18 years of age or 
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a different minimum age established under State 
law, and the purchase, receipt, or possession of to-
bacco products in a place open to the public by any 
individual under 18 years of age or a different min-
imum age established under State law, is prohibited; 
and 
‘‘ ‘(2) out-of-package distribution of cigarettes 
and smokeless tobacco products is prohibited. 
Any employer failing to provide the required notice to any 
employee shall be liable for a civil money penalty of not 
less than $25 nor more than $125 for each such violation. 
‘‘ ‘(b) It shall be a defense to a charge that an em-
ployer violated subsection (a) of this section that the em-
ployee acknowledged receipt, either in writing or by elec-
tronic means, prior to the alleged violation, of a statement 
in substantially the following form: 
‘‘I understand that State law prohibits the distribu-
tion of tobacco products to individuals under 18 years of 
age or a different minimum age established under State 
law and out-of-package distribution of cigarettes and 
smokeless tobacco products, and permits a defense based 
on evidence that a prospective purchaser’s proof of age 
was reasonably relied upon and appeared on its face to 
be valid. I understand that if I sell, give, or voluntarily 
provide a tobacco product to an individual under 18 years 
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‘‘ ‘SEC. 7. DISTRIBUTION BY MAIL OR COURIER. 
‘‘ ‘(a) It shall be unlawful to distribute or sell tobacco 
products directly to consumers by mail or courier, unless 
the person receiving purchase requests for tobacco prod-
ucts takes reasonable action to prevent delivery to individ-
uals who are not adults by— 
‘‘ ‘(1) requiring that addressees of the tobacco 
products be age-verified adults; 
‘‘ ‘(2) making good faith efforts to verify that 
such addressees have attained the minimum age for 
purchase of tobacco products established by the re-
spective States wherein the addresses of the address-
ees are located; and 
‘‘ ‘(3) addressing the tobacco products delivered 
by mail or courier to a physical addresses and not 
to post office boxes. 
‘‘ ‘(b) Any person who violates subsection (a) is liable 
for a civil money penalty of not less than $25 nor more 
than $125 for each such violation. 
‘‘ ‘SEC. 8. RANDOM UNANNOUNCED INSPECTIONS; REPORT-
ING; AND COMPLIANCE. 
‘‘ ‘(a) The State Police, or a local law enforcement 
authority duly designated by the State Police, shall en-
force this Act in a manner that can reasonably be expected 
to reduce the extent to which tobacco products are distrib-
uted to individuals under 18 years of age or a different 
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149 
minimum age established under State law and shall con-
duct random, unannounced inspections in accordance with 
the procedures set forth in this Act and in regulations 
issued under section 1926 of the Federal Public Health 
Service Act (42 U.S.C. § 300x–26). 
‘‘ ‘(b) The State may engage an individual under 18 
years of age or a different minimum age established under 
State law to test compliance with this Act, except that 
such an individual may be used to test compliance with 
this Act only if the testing is conducted under the fol-
lowing conditions: 
‘‘ ‘(1) Prior to use of any individual under 18 
years of age or a different minimum age established 
under State law in a random, unannounced inspec-
tion, written consent shall be obtained from a par-
ent, custodian, or guardian of such individual; 
‘‘ ‘(2) An individual under 18 years of age or a 
different minimum age established under State law 
shall act solely under the supervision and direction 
of the State Police or a local law enforcement au-
thority duly designated by the State Police during a 
random, unannounced inspection; 
‘‘ ‘(3) An individual under 18 years of age or a 
different minimum age established under State law 
used in random, unannounced inspections shall not 
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150 
be used in any such inspection at a store in which 
such individual is a regular customer; and 
‘‘ ‘(4) If an individual under 18 years of age or 
a different minimum age established under State law 
participating in random, unannounced inspections is 
questioned during such an inspection about such in-
dividual’s age, such individual shall state his or her 
actual age and shall present a true and correct proof 
of age if requested at any time during the inspection 
to present it. 
‘‘ ‘(c) Any person who uses any individual under 18 
years of age or a different minimum age established under 
State law, other than as permitted by subsection (b), to 
test compliance with this Act, is liable for a civil money 
penalty of not less than $25 nor more than $125 for each 
such violation. 
‘‘ ‘(d) Civil money penalties collected for violations of 
this Act and fees collected under section 9 shall be used 
only to defray the costs of administration and enforcement 
of this Act. 
‘‘ ‘SEC. 9. LICENSURE. 
‘‘ ‘(a) Each person engaged in the over-the-counter 
distribution at retail of tobacco products shall hold a li-
cense issued under this section. A separate license shall 
be required for each place of business where tobacco prod-
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151 
ucts are distributed at retail. A license issued under this 
section is not assignable and is valid only for the person 
in whose name it is issued and for the place of business 
designated in the license. 
‘‘ ‘(b) The annual license fee is $25 for each place 
of business where tobacco products are distributed at re-
tail. 
‘‘ ‘(c) Every application for a license, including re-
newal of a license, under this section shall be made upon 
a form provided by the appropriate State agency or de-
partment, and shall set forth the name under which the 
applicant transacts or intends to transact business, the lo-
cation of the place of business for which the license is to 
be issued, the street address to which all notices relevant 
to the license are to be sent (in this Act referred to as 
‘‘notice address’’), and any other identifying information 
that the appropriate State agency or department may re-
quire. 
‘‘ ‘(d) The appropriate State agency or department 
shall issue or renew a license or deny an application for 
a license or the renewal of a license within 30 days of 
receiving a properly completed application and the license 
fee. The appropriate State agency or department shall 
provide notice to an applicant of action on an application 
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152 
denying the issuance of a license or refusing to renew a 
license. 
‘‘ ‘(e) Every license issued by the appropriate State 
agency or department pursuant to this section shall be 
valid for 1 year from the date of issuance and shall be 
renewed upon application except as otherwise provided in 
this Act. 
‘‘ ‘(f) Upon notification of a change of address for a 
place of business for which a license has been issued, a 
license shall be reissued for the new address without the 
filing of a new application. 
‘‘ ‘(g) The appropriate State agency or department 
shall notify every person in the State who is engaged in 
the distribution at retail of tobacco products of the license 
requirements of this section and of the date by which such 
person should have obtained a license. 
‘‘ ‘(h)(1) Except as provided in paragraph (2), any 
person who engages in the distribution at retail of tobacco 
products without a license required by this section is liable 
for a civil money penalty in an amount equal to (i) two 
times the applicable license fee, and (ii) $50 for each day 
that such distribution continues without a license. 
‘‘ ‘(2) Any person who engages in the distribu-
tion at retail of tobacco products after a license 
issued under this section has been suspended or re-
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153 
voked is liable for a civil money penalty of $100 per 
day for each day on which such distribution con-
tinues after the date such person received notice of 
such suspension or revocation. 
‘‘ ‘(i) No person shall engage in the distribution at 
retail of tobacco products on or after 180 days after the 
date of enactment this Act unless such person is author-
ized to do so by a license issued pursuant to this section 
or is an employee or agent of a person that has been 
issued such a license. 
‘‘ ‘SEC. 10. SUSPENSION, REVOCATION, DENIAL, AND NON-
RENEWAL OF LICENSES. 
‘‘ ‘(a) Upon a finding that a licensee has been deter-
mined by a court of competent jurisdiction to have violated 
this Act during the license term, the State shall notify the 
licensee in writing, served personally or by registered mail 
at the notice address, that any subsequent violation of this 
Act at the same place of business may result in an admin-
istrative action to suspend the license for a period deter-
mined by the specify the appropriate State agency or de-
partment. 
‘‘ ‘(b) Upon finding that a further violation by this 
Act has occurred involving the same place of business for 
which the license was issued and the licensee has been 
served notice once under subsection (a), the appropriate 
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158 
‘‘(2) For the first applicable fiscal year and for each 
subsequent fiscal year, a funding agreement for a grant 
under section 300x–21 of this title is a funding agreement 
under which the State involved will— 
‘‘(A) conduct random, unannounced inspections 
to ensure compliance with the law described in sub-
section (e)(1); and 
‘‘(B) annually submit to the Secretary a report 
describing— 
‘‘(i) the activities carried out by the State 
to enforce such law during the fiscal year pre-
ceding the fiscal year for which the State is 
seeking the grant; 
‘‘(ii) the extent of success the State has 
achieved in reducing the availability of tobacco 
products to individuals under 18 years of age or 
a different minimum age established under 
State law, including the results of the inspec-
tions conducted under subparagraph (A); and 
‘‘(iii) the strategies to be utilized by the 
State for enforcing such law during the fiscal 
year for which the grant is sought. 
‘‘(g) The law specified in subsection (e)(1) may be 
administered and enforced by a State using— 
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159 
‘‘(1) any amounts made available to the State 
through a grant under section 300x–21 of this title; 
‘‘(2) any amounts made available to the State 
under section 300w of this title; 
‘‘(3) any fees collected for licenses issued pursu-
ant to the law described in subsection (e)(1); 
‘‘(4) any fines or penalties assessed for viola-
tions of the law specified in subsection (e)(1); or 
‘‘(5) any other funding source that the legisla-
ture of the State may prescribe by statute. 
‘‘(h) Before making a grant under section 300x–21 
of this title to a State for the first applicable fiscal year 
or any subsequent fiscal year, the Secretary shall make 
a determination of whether the State has maintained com-
pliance with subsections (e) and (f) of this section. If, after 
notice to the State and an opportunity for a hearing, the 
Secretary determines that the State is not in compliance 
with such subsections, the Secretary shall reduce the 
amount of the allotment under section 300x–21 of this 
title for the State for the fiscal year involved by an amount 
equal to— 
‘‘(1) In the case of the first applicable fiscal 
year, 10 percent of the amount determined under 
section 300x–33 for the State for the fiscal year; 
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160 
‘‘(2) In the case of the first fiscal year following 
such applicable fiscal year, 20 percent of the amount 
determined under section 300x–33 for the State for 
the fiscal year; 
‘‘(3) In the case of the second such fiscal year, 
30 percent of the amount determined under section 
300x–33 for the State for the fiscal year; and 
‘‘(4) In the case of the third such fiscal year or 
any subsequent fiscal year, 40 percent of the amount 
determined under section 300x–33 for the State for 
the fiscal year. 
The Secretary shall not have authority or discretion to 
grant to any State a waiver of the terms and requirements 
of this subsection or subsection (e) or (f). 
‘‘(i) For the purposes of subsections (e) through (h) 
of this section the term ‘first applicable fiscal year’ 
means— 
‘‘(1) fiscal year 2009, in the case of any State 
described in subsection (e)(2) of this section; and 
‘‘(2) fiscal year 2008, in the case of any other 
State. 
‘‘(j) For purposes of subsections (e) through (h) of 
this section, references to section 300x–21 shall include 
any successor grant programs.‘’ 
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161 
‘‘(k) As required by paragraph (1), and subject to 
paragraph (4), an Indian tribe shall satisfy the require-
ments of subsection (e)(1) of this section by enacting a 
law or ordinance with substantially the same provisions 
as the law described in subsection (e)(1). 
‘‘(1) An Indian tribe shall comply with sub-
section (e)(1) of this section within 180 days after 
the Administrator finds, in accordance with this 
paragraph, that— 
‘‘(A) the Indian tribe has a governing body 
carrying out substantial governmental powers 
and duties; 
‘‘(B) the functions to be exercised by the 
Indian tribe under this Act pertain to activities 
on trust land within the jurisdiction of the 
tribe; and 
‘‘(C) the Indian tribe is reasonably ex-
pected to be capable of carrying out the func-
tions required under this section. 
Within 2 years of the date of enactment of the Fed-
eral Tobacco Act of 2007, as to each Indian tribe in 
the United States, the Administrator shall make the 
findings contemplated by this paragraph or deter-
mine that such findings cannot be made, in accord-
ance with the procedures specified in paragraph (4). 
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162 
‘‘(2) As to Indian tribes subject to subsection 
(e)(1) of this section, the Administrator shall pro-
mulgate regulations that— 
‘‘(A) provide whether and to what extent, 
if any, the law described in subsection (e)(1) 
may be modified as adopted by Indian tribes; 
and 
‘‘(B) ensure, to the extent possible, that 
each Indian tribe’s retailer licensing program 
under subsection (e)(1) is no less stringent than 
the program of the State or States in which the 
Indian tribe is located. 
‘‘(3) If with respect to any Indian tribe the Ad-
ministrator determines that compliance with the re-
quirements of subsection (e)(1) is inappropriate or 
administratively infeasible, the Administrator shall 
specify other means for the Indian tribe to achieve 
the purposes of the law described in subsection 
(e)(1) with respect to persons who engage in the dis-
tribution at retail of tobacco products on tribal 
lands. 
‘‘(4) The findings and regulations promulgated 
under paragraphs (1) and (2) shall be promulgated 
in conformance with section 553 of title 5, United 
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163 
States Code, and shall comply with the following 
provisions: 
‘‘(A) In making findings as provided in 
paragraph (1), and in drafting and promul-
gating regulations as provided in paragraph (2) 
(including drafting and promulgating any re-
vised regulations), the Administrator shall con-
fer with, and allow for active participation by, 
representatives and members of Indian tribes, 
and tribal organizations. 
‘‘(B) In carrying out rulemaking processes 
under this subsection, the Administrator shall 
follow the guidance of subchapter III of chapter 
5 of title 5, United States Code, commonly 
known as the ‘Negotiated Rulemaking Act of 
1990.’ 
‘‘(C) The tribal participants in the negotia-
tion process referred to in subparagraph (B) 
shall be nominated by and shall represent the 
groups described in this subsection and shall in-
clude tribal representatives from all geographic 
regions. 
‘‘(D) The negotiations conducted under 
this paragraph (4) shall be conducted in a time-
ly manner. 
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164 
‘‘(E) If the Administrator determines that 
an extension of the deadlines under subsection 
(k)(1) of this section is appropriate, the Sec-
retary may submit proposed legislation to Con-
gress for the extension of such deadlines. 
‘‘(5) This subsection shall not affect any law or 
ordinance that (A) was in effect on tribal lands on 
the date of introduction of the Youth Prevention and 
Tobacco Harm Reduction Act, and (B) covers the 
same subject matter as the law described in sub-
section (e)(1). Any law or ordinance that meets the 
conditions of this paragraph shall also be deemed to 
meet the requirement described in subsection (k)(1), 
if such law or ordinance is at least as stringent as 
the law described in subsection (e)(1). 
‘‘(6) For purposes of this subsection— 
‘‘(A) ‘Administrator’ means the Adminis-
trator of the Tobacco Harm Reduction Center. 
‘‘(B) ‘Indian tribe’ has the meaning as-
signed that term in section 4(e) of the Indian 
Self Determination and Education Assistance 
Act, section 450b(e) of title 25, United States 
Code. 
‘‘(C) ‘Tribal lands’ means all lands within 
the exterior boundaries of any Indian reserva-
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165 
tion, all lands the title to which is held by the 
United States in trust for an Indian tribe, or 
lands the title to which is held by an Indian 
tribe subject to a restriction by the United 
States against alienation, and all dependent In-
dian communities. 
‘‘(D) ‘tribal organization’ has the meaning 
assigned that term in section 4(l) of the Indian 
Self Determination and Education Assistance 
Act, section 450b(l) of title 25, United States 
Code.’’. 
SEC. 403. ESTABLISHMENT OF RANKINGS. 
(a) 
STANDARDS
AND
PROCEDURES
FOR 
RANKINGS.—Within 24 months after the effective date of 
this Act, the Administrator shall, by regulation, after con-
sultation with an Advisory Committee established for such 
purpose, establish the standards and procedures for pro-
mulgating rankings, comprehensible to consumers of to-
bacco products, of the following categories of tobacco 
products and also nicotine-containing products on the 
basis of the relative risks of serious or chronic tobacco- 
related diseases and adverse health conditions those cat-
egories of tobacco products and also nicotine-containing 
products respectively present— 
(1) cigarettes; 
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166 
(2) loose tobacco for roll-your-own tobacco 
products; 
(3) little cigars; 
(4) cigars; 
(5) pipe tobacco; 
(6) moist snuff; 
(7) dry snuff; 
(8) chewing tobacco; 
(9) other forms of tobacco products, including 
pelletized tobacco and compressed tobacco, treated 
collectively as a single category; and 
(10) other nicotine-containing products, treated 
collectively as a single category. 
The Administrator shall not have authority or discretion 
to establish a relative-risk ranking of any category or sub-
category of tobacco products or any category or sub-
category of nicotine-containing products other than the 
ten categories specified in this subsection. 
(b) CONSIDERATIONS IN PROMULGATING REGULA-
TIONS.—In promulgating regulations under this section, 
the Administrator— 
(1) shall take into account relevant epidemio-
logic studies and other relevant competent and reli-
able scientific evidence; and 
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(2) in assessing the risks of serious or chronic 
tobacco-related diseases and adverse health condi-
tions presented by a particular category, shall con-
sider the range of tobacco products or nicotine-con-
taining products within the category, and shall give 
appropriate weight to the market shares of the re-
spective products in the category. 
(c) 
PROMULGATION
OF
RANKINGS
OF
CAT-
EGORIES.—Once the initial regulations required by sub-
section (a) are in effect, the Administrator shall promptly, 
by order, after notice and an opportunity for comment, 
promulgate to the general public rankings of the cat-
egories of tobacco products and nicotine-containing prod-
ucts in accordance with those regulations. The Adminis-
trator shall promulgate the initial rankings of those cat-
egories of tobacco products and nicotine-containing prod-
ucts to the general public not later than January 1, 2010. 
Thereafter, on an annual basis, the Administrator shall, 
by order, promulgate to the general public updated 
rankings that are (1) in accordance with those regulations, 
and (2) reflect the scientific evidence available at the time 
of promulgation. The Administrator shall open and main-
tain an ongoing public docket for receipt of data and other 
information submitted by any person with respect to such 
annual promulgation of rankings. 
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168 
TITLE V—ENFORCEMENT 
PROVISIONS 
SEC. 501. PROHIBITED ACTS. 
The following acts and the causing thereof are hereby 
prohibited— 
(1) the introduction or delivery for introduction 
into interstate commerce of any tobacco product that 
is adulterated or misbranded; 
(2) the adulteration or misbranding of any to-
bacco product in interstate commerce; 
(3) the receipt in interstate commerce of any 
tobacco product that is known to be adulterated or 
misbranded, and the delivery or proffered delivery 
thereof for pay or otherwise; 
(4) the failure to establish or maintain any 
record, or make any report or other submission, or 
to provide any notice required by or under this Act; 
or the refusal to permit access to, verification of, or 
copying of any record as required by this Act; 
(5) the refusal to permit entry or inspection as 
authorized by this Act; 
(6) the making to the Administrator of a state-
ment, report, certification or other submission re-
quired by this Act, with knowledge that such state-
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ment, report, certification, or other submission is 
false in a material aspect; 
(7) the manufacturing, shipping, receiving, stor-
ing, selling, distributing, possession, or use of any 
tobacco product with knowledge that it is an illicit 
tobacco product; 
(8) the forging, simulating without proper per-
mission, falsely representing, or without proper au-
thority using any brand name; 
(9) the using by any person to his or her own 
advantage, or revealing, other than to the Adminis-
trator or officers or employees of the Agency, or to 
the courts when relevant in any judicial proceeding 
under this Act, any information acquired under au-
thority of this Act concerning any item which as a 
trade secret is entitled to protection; except that the 
foregoing does not authorize the withholding of in-
formation from either House of Congress or from, to 
the extent of matter within its jurisdiction, any com-
mittee or subcommittee of such committee or any 
joint committee of Congress or any subcommittee of 
such joint committee; 
(10) the alteration, mutilation, destruction, ob-
literation, or removal of the whole or any part of the 
labeling of, or the doing of any other act with re-
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spect to, a tobacco product, if such act is done while 
such tobacco product is held for sale (whether or not 
the first sale) after shipment in interstate commerce, 
and results in such tobacco product being adulter-
ated or misbranded; 
(11) the importation of any tobacco product 
that is adulterated, misbranded, or otherwise not in 
compliance with this Act; and 
(12) the commission of any act prohibited by 
section 201 of this Act. 
SEC. 502. INJUNCTION PROCEEDINGS. 
(a) The district courts of the United States shall have 
jurisdiction, for cause shown, to restrain violations of this 
Act, except for violations of section 701(k). 
(b) In case of an alleged violation of an injunction 
or restraining order issued under this section, which also 
constitutes a violation of this Act, trial shall be by the 
court, or upon demand of the defendant, by a jury. 
SEC. 503. PENALTIES. 
(a) CRIMINAL PENALTIES.—Any person who willfully 
violates a provision of section 501 of this Act shall be im-
prisoned for not more than one year or fined not more 
than $25,000, or both. 
(b) CIVIL PENALTIES FOR VIOLATION OF SECTION 
803.— 
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174 
the number of libel for condemnation pro-
ceedings is limited as above provided, the pro-
ceeding pending or instituted shall, on applica-
tion of the claimant, seasonably made, be re-
moved for trial to any district agreed upon by 
stipulation between the parties, or, in case of 
failure to so stipulate within a reasonable time, 
the claimant may apply to the court of the dis-
trict in which the seizure has been made, and 
such court (after giving the United States at-
torney for such district reasonable notice and 
opportunity to be heard) shall by order, unless 
good cause to the contrary is shown, specify a 
district of reasonable proximity to the claim-
ant’s principal place of business, to which the 
case shall be removed for trial. 
(2) The following shall be liable to be proceeded 
against at any time on libel of information and con-
demned in any district court of the United States 
within the jurisdiction of which they are found— 
(A) any tobacco product that is an illicit 
tobacco product; 
(B) any container of an illicit tobacco 
product; 
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175 
(C) any equipment or thing used in mak-
ing an illicit tobacco product; and 
(D) any adulterated or misbranded tobacco 
product. 
(3)(A) Except as provided in subparagraph (B), 
no libel for condemnation may be instituted under 
paragraph (1) or (2) against any tobacco product 
which— 
(i) is misbranded under this Act be-
cause of its advertising, and 
(ii) is being held for sale to the ulti-
mate consumer in an establishment other 
than an establishment owned or operated 
by a manufacturer, packer, or distributor 
of the tobacco product. 
(B) A libel for condemnation may be insti-
tuted under paragraph (1) or (2) against a to-
bacco product described in subparagraph (A) if 
the tobacco product’s advertising which resulted 
in the tobacco product being misbranded was 
disseminated in the establishment in which the 
tobacco product is being held for sale to the ul-
timate consumer— 
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176 
(i) such advertising was disseminated 
by, or under the direction of, the owner or 
operator of such establishment, or 
(ii) all or part of the cost of such ad-
vertising was paid by such owner or oper-
ator. 
(b) PROCEDURES.—The tobacco product, equipment, 
or other thing proceeded against shall be liable to seizure 
by process pursuant to the libel, and the procedure in 
cases under this section shall conform, as nearly as may 
be, to the procedure in admiralty; except that on demand 
of either party any issue of fact joined in any such case 
shall be tried by jury. When libel for condemnation pro-
ceedings under this section, involving the same claimant 
and the same issues of adulteration or misbranding, are 
pending in two or more jurisdictions, such pending pro-
ceedings, upon application of the claimant seasonably 
made to the court of one such jurisdiction, shall be consoli-
dated for trial by order of such court, and tried in (1) 
any district selected by the claimant where one of such 
proceedings is pending; or (2) a district agreed upon by 
stipulation between the parties. If no order for consolida-
tion is so made within a reasonable time, the claimant may 
apply to the court of one such jurisdiction and such court 
(after giving the United States attorney for such district 
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reasonable notice and opportunity to be heard) shall by 
order, unless good cause to the contrary is shown, specify 
a district of reasonable proximity to the claimant’s prin-
cipal place of business, in which all such pending pro-
ceedings shall be consolidated for trial and tried. Such 
order of consolidation shall not apply so as to require the 
removal of any case the date for trial of which has been 
fixed. The court granting such order shall give prompt no-
tification thereof to the other courts having jurisdiction 
of the cases covered thereby. 
(c) SAMPLES AND ANALYSES.—The court at any time 
after seizure up to a reasonable time before trial shall by 
order allow any party to a condemnation proceeding, the 
party’s attorney or agent, to obtain a representative sam-
ple of the article seized and a true copy of the analysis, 
if any, on which the proceeding is based and the identi-
fying marks or numbers, if any, of the packages from 
which the samples analyzed were obtained. 
(d) DISPOSITION OF CONDEMNED TOBACCO PROD-
UCTS.—(1) Any tobacco product condemned under this 
section shall, after entry of the decree, be disposed of by 
destruction or sale as the court may, in accordance with 
the provisions of this section, direct; and the proceeds 
thereof, if sold, less the legal costs and charges, shall be 
paid into the Treasury of the United States; but such to-
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bacco product shall not be sold under such decree contrary 
to the provisions of this Act or the laws of the jurisdiction 
in which sold. After entry of the decree and upon the pay-
ment of the costs of such proceedings and the execution 
of a good and sufficient bond conditioned that such article 
shall not be sold or disposed of contrary to the provisions 
of this Act or the laws of any State in which sold, the 
court may by order direct that such tobacco product be 
delivered to the owner thereof to be destroyed or brought 
into compliance with the provisions of this Act, under the 
supervision of an officer or employee duly designated by 
the Administrator; and the expenses of such supervision 
shall be paid by the person obtaining release of the tobacco 
product under bond. If the tobacco product was imported 
into the United States and the person seeking its release 
establishes (A) that the adulteration, misbranding, or vio-
lation did not occur after the tobacco product was im-
ported, and (B) that the person seeking the release of the 
tobacco product had no cause for believing that it was 
adulterated, misbranded, or in violation before it was re-
leased from customs custody, the court may permit the 
tobacco product to be delivered to the owner for expor-
tation under section 709 in lieu of destruction upon a 
showing by the owner that there is a reasonable certainty 
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that the tobacco product will not be re-imported into the 
United States. 
(2) The provisions of paragraph (1) of this subsection 
shall, to the extent deemed appropriate by the court, apply 
to any equipment or other thing which is not otherwise 
within the scope of such paragraph and which is referred 
to in paragraph (2) of subsection (a). 
(3) Whenever in any proceeding under this section, 
involving paragraph (2) of subsection (a), the condemna-
tion of any equipment or thing (other than a tobacco prod-
uct) is decreed, the court shall allow the claim of any 
claimant, to the extent of such claimant’s interest, for re-
mission or mitigation of such forfeiture if such claimant 
proves to the satisfaction of the court (A) that such claim-
ant has not caused the equipment or thing to be within 
one of the categories referred to in such paragraph (2) 
and has no interest in any tobacco product referred to 
therein, (B) that such claimant has an interest in such 
equipment or other thing as owner or lienor or otherwise, 
acquired by such claimant in good faith, and (C) that such 
claimant at no time had any knowledge or reason to be-
lieve that such equipment or other thing was being or 
would be used in, or to facilitate, the violation of laws of 
the United States relating to any illicit tobacco product. 
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(e) COSTS AND FEES.—When a decree of condemna-
tion is entered against the tobacco product or other article, 
court costs and fees, and storage and other proper ex-
penses shall be awarded against the person, if any, inter-
vening as claimant of the tobacco product or other article. 
(f) REMOVAL FOR TRIAL.—In the case of removal for 
trial of any case as provided by subsection (a) or (b)— 
(1) The clerk of the court from which removal 
is made shall promptly transmit to the court in 
which the case is to be tried all records in the case 
necessary in order that such court may exercise ju-
risdiction. 
(2) The court to which such case was removed 
shall have the powers and be subject to the duties, 
for purposes of such case, which the court from 
which removal was made would have had, or to 
which such court would have been subject, if such 
case had not been removed. 
(g) ADMINISTRATIVE
DETENTION
OF
TOBACCO 
PRODUCTS.— 
(1) DETENTION AUTHORITY.— 
(A) IN GENERAL.—An officer or qualified 
employee of the Agency may order the deten-
tion, in accordance with this subsection, of any 
tobacco product that is found during an inspec-
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181 
tion, examination, or investigation under this 
Act conducted by such officer or qualified em-
ployee, if the officer or qualified employee has 
credible evidence or information indicating that 
such article presents a threat of serious adverse 
health consequences beyond those normally in-
herent in the use of tobacco products. 
(B) ADMINISTRATOR’S APPROVAL.—A to-
bacco product or component thereof may be or-
dered detained under subparagraph (A) if, but 
only if, the Administrator or an official des-
ignated by the Administrator approves the 
order. An official may not be so designated un-
less the official is an officer with supervisory re-
sponsibility for the inspection, examination, or 
investigation that led to the order. 
(2) PERIOD OF DETENTION.—A tobacco prod-
uct may be detained under paragraph (1) for a rea-
sonable period, not to exceed 20 days, unless a 
greater period, not to exceed 30 days, is necessary, 
to institute an action under subsection (a) or section 
702. 
(3) SECURITY OF DETAINED TOBACCO PROD-
UCT.—An order under paragraph (1) may require 
that the tobacco product to be detained be labeled 
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or marked as detained, and shall require that the to-
bacco product be maintained in or removed to a se-
cure facility, as appropriate. A tobacco product sub-
ject to such an order shall not be transferred by any 
person from the place at which the tobacco product 
is ordered detained, or from the place to which the 
tobacco product is so removed, as the case may be, 
until released by the Administrator or until the expi-
ration of the detention period applicable under such 
order, whichever occurs first. This subsection may 
not be construed as authorizing the delivery of the 
tobacco product pursuant to the execution of a bond 
while the tobacco product is subject to the order, 
and section 709 does not authorize the delivery of 
the tobacco product pursuant to the execution of a 
bond while the article is subject to the order. 
(4) APPEAL OF DETENTION ORDER.— 
(A) IN GENERAL.—With respect to a to-
bacco product ordered detained under para-
graph (1), any person who would be entitled to 
be a claimant of such tobacco product if the to-
bacco product were seized under subsection (a) 
may appeal the order to the Administrator. 
Within five days after such an appeal is filed, 
the Administrator, after providing opportunity 
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183 
for an informal hearing, shall confirm or termi-
nate the order involved, and such confirmation 
by the Administrator shall be considered a final 
agency action for purposes of section 702 of 
title 5, United States Code. If during such five- 
day period the Administrator fails to provide 
such an opportunity, or to confirm or terminate 
such order, the order is deemed to be termi-
nated. 
(B) EFFECT OF INSTITUTING COURT AC-
TION.—The process under subparagraph (A) 
for the appeal of an order under paragraph (1) 
terminates if the Administrator institutes an 
action under subsection (a) or section 702 re-
garding the tobacco product involved. 
SEC. 505. REPORT OF MINOR VIOLATIONS. 
Nothing in this Act shall be construed as requiring 
the Administrator to report for prosecution, or for institu-
tion of libel or injunction proceedings, minor violations of 
this Act whenever the Administrator believes that the pub-
lic interest will be adequately served by a suitable written 
notice or warning. 
SEC. 506. INSPECTION. 
(a) AUTHORITY TO INSPECT.—The Administrator 
shall have the power to inspect the premises of a tobacco 
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product manufacturer for purposes of determining compli-
ance with this Act, or the regulations promulgated under 
it. Officers of the Agency designated by the Administrator, 
upon presenting appropriate credentials and a written no-
tice to the person in charge of the premises, are authorized 
to enter, at reasonable times, without a search warrant, 
any factory, warehouse, or other establishment in which 
tobacco products are manufactured, processed, packaged, 
or held for domestic distribution. Any such inspection shall 
be conducted within reasonable limits and in a reasonable 
manner, and shall be limited to examining only those 
things, including but not limited to records, relevant to 
determining whether violations of this Act, or regulations 
under it, have occurred. No inspection authorized by this 
section shall extend to financial data, sales data other than 
shipment data, pricing data, personnel data (other than 
data as to qualifications of technical and professional per-
sonnel performing functions subject to this Act), or re-
search data. A separate notice shall be given for each such 
inspection, but a notice shall not be required for each 
entry made during the period covered by the inspection. 
Each such inspection shall be commenced and completed 
with reasonable promptness. 
(b) REPORT OF OBSERVATIONS.—Before leaving the 
premises, the officer of the Agency who has supervised or 
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