I
105TH CONGRESS
1ST SESSION
H. R. 2764
To amend the Internal Revenue Code of 1986 to increase the excise tax
rate on tobacco products and deposit the resulting revenues into a Public
Health and Education Resource Trust Fund, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
OCTOBER 29, 1997
Mr. HANSEN (for himself and Mr. MEEHAN) introduced the following bill;
which was referred to the Committee on Ways and Means, and in addi-
tion to the Committee on Commerce, for a period to be subsequently de-
termined by the Speaker, in each case for consideration of such provisions
as fall within the jurisdiction of the committee concerned
A BILL
To amend the Internal Revenue Code of 1986 to increase
the excise tax rate on tobacco products and deposit the
resulting revenues into a Public Health and Education
Resource Trust Fund, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Public Health and Education Resource (PHAER) Act’’.
(b) TABLE OF CONTENTS.—The table of contents of
this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I—IMPOSITION OF INCREASED TAXES ON TOBACCO
PRODUCTS
Sec. 101. Increase in excise tax rate on tobacco products in addition to such
increase contained in the Balanced Budget Act of 1997.
Sec. 102. Tax treatment for certain tobacco-related expenses.
TITLE II—PHAER TRUST FUND
Sec. 201. Public Health and Education Resource Trust Fund.
TITLE III—FEDERAL STANDARDS WITH RESPECT TO TOBACCO
PRODUCTS
Sec. 301. Federal standards with respect to tobacco products.
TITLE IV—SENSE OF THE HOUSE OF REPRESENTATIVES
Sec. 401. Sense of the House of Representatives regarding comprehensive to-
bacco legislation.
TITLE 
I—IMPOSITION 
OF 
IN-
CREASED 
TAXES 
ON 
TO-
BACCO PRODUCTS
SEC. 101. INCREASE IN EXCISE TAX RATE ON TOBACCO
PRODUCTS IN ADDITION TO SUCH INCREASE
CONTAINED IN THE BALANCED BUDGET ACT
OF 1997.
(a) CIGARETTES.—Subsection (b) of section 5701 of
the Internal Revenue Code of 1986 is amended—
(1) by striking ‘‘$12 per thousand ($10 per
thousand on cigarettes removed during 1991 or
1992);’’ in paragraph (1) and inserting ‘‘the applica-
ble rate per thousand determined in accordance with
the following table:
‘‘In the case of cigarettes removed
during:
The applicable rate is:
1998 .........................................................................................
$12.00
1999 .........................................................................................
$37.00
‘‘In the case of cigarettes removed
during:
The applicable rate is:
2000 .........................................................................................
$67.00
2001 .........................................................................................
$92.00
2002 .........................................................................................
$94.50.’’;
and
(2) by striking paragraph (2) and inserting the
following:
‘‘(2) LARGE CIGARETTES.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), on cigarettes, weighing more
than 3 pounds per thousand, the applicable rate
per thousand determined in accordance with the
following table:
‘‘In the case of cigarettes removed
during:
The applicable rate is:
1998 .........................................................................................
$25.20
1999 .........................................................................................
$77.70
2000 .........................................................................................
$140.70
2001 .........................................................................................
$193.20
2002 .........................................................................................
$198.45.
‘‘(B) EXCEPTION.—On cigarettes more
than 61⁄2 inches in length, at the rate pre-
scribed for cigarettes weighing not more than 3
pounds per thousand, counting each 23⁄4 inches,
or fraction thereof, of the length of each as one
cigarette.’’
(b) CIGARS.—Subsection (a) of section 5701 of such
Code is amended—
(1) by striking ‘‘$1.125 cents per thousand
(93.75 cents per thousand on cigars removed during
1991 or 1992),’’ in paragraph (1) and inserting ‘‘the
applicable rate per thousand determined in accord-
ance with the following table:
‘‘In the case of cigars removed dur-
ing:
The applicable
rate is:
1998 ...........................................................
$1.125 cents
1999 ...........................................................
$3.4687 cents
2000 ...........................................................
$6.2822 cents
2001 ...........................................................
$8.6264 cents
2002 ...........................................................
$8.8588 cents.’’;
and
(2) by striking paragraph (2) and inserting the
following:
‘‘(2) LARGE CIGARS.—On cigars, weighing more
than 3 pounds per thousand, the applicable percent-
age of the price for which sold but not more that the
applicable rate per thousand determined in accord-
ance with the following table:
In the case of cigars
removed during:
The applicable per-
centage is:
The applicable rate
is:
1998
12.750%
$30.00
1999
39.312%
$92.50
2000
71.189%
$167.50
2001
97.753%
$230.00
2002
100.407%
$236.25.’’
(c) CIGARETTE PAPERS.—Subsection (c) of section
5701 of such Code is amended to read as follows:
‘‘(c) CIGARETTE PAPERS.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), on each book or set of cigarette papers
containing more than 25 papers, manufactured in or
imported into the United States, there shall be im-
posed a tax of the applicable rate for each 50 papers
or fractional part thereof as determined in accord-
ance with the following table:
‘‘In the case of cigarette papers
removed during:
The applicable rate is:
1998 .........................................................................................
.75 cent
1999 .........................................................................................
2.31 cents
2000 .........................................................................................
4.18 cents
2001 .........................................................................................
5.74 cents
2002 .........................................................................................
5.91 cents.
‘‘(2) EXCEPTION.—If cigarette papers measure
more than 61⁄2 inches in length, such cigarette pa-
pers shall be taxable at the rate prescribed, counting
each 23⁄4 inches, or fraction thereof, of the length of
each as one cigarette paper.’’
(d) CIGARETTE TUBES.—Subsection (d) of section
5701 of such Code is amended to read as follows:
‘‘(d) CIGARETTE TUBES.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), on cigarette tubes, manufactured in or
imported into the United States, there shall be im-
posed a tax of the applicable rate for each 50 tubes
or fractional part thereof as determined in accord-
ance with the following table:
‘‘In the case of cigarette tubes re-
moved during:
The applicable rate is:
1998 .........................................................................................
1.50 cents
1999 .........................................................................................
4.62 cents
2000 .........................................................................................
8.39 cents
2001 .........................................................................................
11.53 cents
2002 .........................................................................................
11.82 cents.
‘‘(2) EXCEPTION.—If cigarette tubes measure
more than 61⁄2 inches in length, such cigarette tubes
shall be taxable at the rate prescribed, counting each
23⁄4 inches, or fraction thereof, of the length of each
as one cigarette tube.’’
(e) SMOKELESS TOBACCO.—Paragraphs (1) and (2)
of subsection (e) of section 5701 of such Code are is
amended to read as follows:
‘‘(1) SNUFF.—On snuff, the applicable rate per
pound determined in accordance with the following
table (and a proportionate tax at the like rate on all
fractional parts of a pound):
‘‘In the case of snuff removed dur-
ing:
The applicable rate is:
1998 .........................................................................................
36 cents
1999 .........................................................................................
$1.11
2000 .........................................................................................
$2.01
2001 .........................................................................................
$2.76
2002 ......................................................................................... $2.835 cents.
‘‘(2) CHEWING TOBACCO.—On chewing tobacco,
the applicable rate per pound determined in accord-
ance with the following table (and a proportionate
tax at the like rate on all fractional parts of a
pound):
‘‘In the case of chewing tobacco
removed during:
The applicable rate is:
1998 .........................................................................................
12 cents
1999 .........................................................................................
37 cents
2000 .........................................................................................
67 cents
2001 .........................................................................................
92 cents
2002 .........................................................................................
94.5 cents.’’
(f) PIPE TOBACCO.—Subsection (f) of section 5701
of such Code is amended to read as follows:
‘‘(f) PIPE TOBACCO.—On pipe tobacco, manufac-
tured in or imported into the United States, there shall
be imposed a tax of the applicable rate per pound deter-
mined in accordance with the following table (and a pro-
portionate tax at the like rate on all fractional parts of
a pound):
‘‘In the case of pipe tobacco re-
moved during:
The applicable
rate is:
1998 ...........................................................
67.5 cents
1999 ...........................................................
$2.0812 cents
2000 ...........................................................
$3.7705 cents
2001 ...........................................................
$5.1774 cents
2002 ...........................................................
$5.3157 cents.’’
(g) IMPOSITION OF EXCISE TAX ON MANUFACTURE
OR IMPORTATION OF ROLL-YOUR-OWN TOBACCO.—
(1) IN GENERAL.—Section 5701 of such Code
(relating to rate of tax) is amended by redesignating
subsection (g) as subsection (h) and by inserting
after subsection (f) the following new subsection:
‘‘(g) ROLL-YOUR-OWN TOBACCO.—On roll-your-own
tobacco, manufactured in or imported into the United
States, there shall be imposed a tax of the applicable rate
per pound determined in accordance with the following
table (and a proportionate tax at the like rate on all frac-
tional parts of a pound):
‘‘In the case of roll-your-own to-
bacco removed during:
The applicable
rate is:
1998 ...........................................................
67.5 cents
1999 ...........................................................
$2.0812 cents
2000 ...........................................................
$3.7705 cents
2001 ...........................................................
$5.1774 cents
2002 ...........................................................
$5.3157 cents.’’
(2) ROLL-YOUR-OWN TOBACCO.—Section 5702
of such Code (relating to definitions) is amended by
adding at the end the following new subsection:
‘‘(p) ROLL-YOUR-OWN TOBACCO.—The term ‘roll-
your-own tobacco’ means any tobacco which, because of
its appearance, type, packaging, or labeling, is suitable for
use and likely to be offered to, or purchased by, consumers
as tobacco for making cigarettes.’’
(3) TECHNICAL AMENDMENTS.—
(A) Subsection (c) of section 5702 of such
Code is amended by striking ‘‘and pipe to-
bacco’’ and inserting ‘‘pipe tobacco, and roll-
your-own tobacco’’.
(B) Subsection (d) of section 5702 of such
Code is amended—
(i) in the material preceding para-
graph (1), by striking ‘‘or pipe tobacco’’
and inserting ‘‘pipe tobacco, or roll-your-
own tobacco’’, and
(ii) by striking paragraph (1) and in-
serting the following new paragraph:
‘‘(1) a person who produces cigars, cigarettes,
smokeless tobacco, pipe tobacco, or roll-your-own to-
bacco solely for the person’s own personal consump-
tion or use, and’’.
(C) The chapter heading for chapter 52 of
such Code is amended to read as follows:
‘‘CHAPTER 52—TOBACCO PRODUCTS AND
CIGARETTE PAPERS AND TUBES’’.
(D) The table of chapters for subtitle E of
such Code is amended by striking the item re-
lating to chapter 52 and inserting the following
new item:
‘‘CHAPTER 52. Tobacco products and cigarette papers and tubes.’’
(h) INFLATION ADJUSTMENT OF RATES AND FLOOR
STOCKS TAXES.—Section 5701 of such Code, as amended
by subsection (g), is amended by redesignating subsection
(h) as subsection (j) and by inserting after subsection (g)
the following:
‘‘(h) INFLATION ADJUSTMENT.—In the case of a cal-
endar year after 2002, the dollar amount contained in the
table in each of the preceding subsections (and the per-
centage contained in the table contained in subsection
(b)(2)) applicable to the preceding calendar year (after the
application of this subsection) shall be increased by an
amount equal to—
‘‘(1) such dollar amount (or percentage), multi-
plied by
‘‘(2) the greatest of—
‘‘(A) the cost-of-living adjustment deter-
mined under section 1(f)(3) for such calendar
year by substituting ‘the second preceding cal-
endar year’ for ‘calendar year 1992’ in subpara-
graph (B) thereof,
‘‘(B) the medical consumer price index for
such calendar year determined in the same
manner as the adjustment described in sub-
paragraph (A), or
‘‘(C) 3 percent.
‘‘(j) FLOOR STOCKS TAXES.—
‘‘(1) IMPOSITION OF TAX.—On tobacco prod-
ucts and cigarette papers and tubes manufactured in
or imported into the United States which are re-
moved before any tax increase date, and held on
such date for sale by any person, there is hereby im-
posed a tax in an amount equal to the excess of—
‘‘(A) the tax which would be imposed
under any preceding subsection of this section
on the article if the article had been removed on
such date, over
‘‘(B) the prior tax (if any) imposed under
such subsection on such article.
‘‘(2) LIABILITY FOR TAX AND METHOD OF PAY-
MENT.—
‘‘(A) LIABILITY FOR TAX.—A person hold-
ing cigarettes on any tax increase date, to
which any tax imposed by paragraph (1) applies
shall be liable for such tax.
‘‘(B) METHOD OF PAYMENT.—The tax im-
posed by paragraph (1) shall be paid in such
manner as the Secretary shall prescribe by reg-
ulations.
‘‘(C) TIME FOR PAYMENT.—The tax im-
posed by paragraph (1) shall be paid on or be-
fore April 1 following any tax increase 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 article which is located in a foreign trade zone
on any tax increase date, shall be subject to the tax
imposed by paragraph (1) if—
‘‘(A) internal revenue taxes have been de-
termined, or customs duties liquidated, with re-
spect to such article before such date pursuant
to a request made under the 1st proviso of sec-
tion 3(a) of such Act, or
‘‘(B) such article is held on such date
under the supervision of a customs officer pur-
suant to the 2d proviso of such section 3(a).
‘‘(4) TAX INCREASE DATE.—The term ‘‘tax in-
crease date’’ means January 1.
‘‘(5) CONTROLLED GROUPS.—Rules similar to
the rules of section 5061(e)(3) shall apply for pur-
poses of this subsection.
‘‘(6) OTHER LAWS APPLICABLE.—All provisions
of law, including penalties, applicable with respect to
the taxes imposed by the preceding subsections of
this section shall, insofar as applicable and not in-
consistent with the provisions of this subsection,
apply to the floor stocks taxes imposed by paragraph
(1), to the same extent as if such taxes were im-
posed by such subsections. The Secretary may treat
any person who bore the ultimate burden of the tax
imposed by paragraph (1) as the person to whom a
credit or refund under such provisions may be al-
lowed or made.’’
(i) MODIFICATIONS OF CERTAIN TOBACCO TAX PRO-
VISIONS.—
(1) EXEMPTION
FOR
EXPORTED
TOBACCO
PRODUCTS AND CIGARETTE PAPERS AND TUBES TO
APPLY ONLY TO ARTICLES MARKED FOR EXPORT.—
(A) Subsection (b) of section 5704 of such
Code is amended by adding at the end the fol-
lowing new sentence: ‘‘Tobacco products and
cigarette papers and tubes may not be trans-
ferred or removed under this subsection unless
such products or papers and tubes bear such
marks, labels, or notices as the Secretary shall
by regulations prescribe.’’
(B) Section 5761 of such Code is amended
by redesignating subsections (c) and (d) as sub-
sections (d) and (e), respectively, and by insert-
ing after subsection (b) the following new sub-
section:
‘‘(c) SALE OF TOBACCO PRODUCTS AND CIGARETTE
PAPERS AND TUBES FOR EXPORT.—Except as provided
in subsections (b) and (d) of section 5704—
‘‘(1) every person who sells, relands, or receives
within the jurisdiction of the United States any to-
bacco products or cigarette papers or tubes which
have been labeled or shipped for exportation under
this chapter,
‘‘(2) every person who sells or receives such re-
landed tobacco products or cigarette papers or tubes,
and
‘‘(3) every person who aids or abets in such
selling, relanding, or receiving,
shall, in addition to the tax and any other penalty provided
in this title, be liable for a penalty equal to the greater
of $1,000 or 5 times the amount of the tax imposed by
this chapter. All tobacco products and cigarette papers
and tubes relanded within the jurisdiction of the United
States, and all vessels, vehicles, and aircraft used in such
relanding or in removing such products, papers, and tubes
from the place where relanded, shall be forfeited to the
United States.’’
(C) Subsection (a) of section 5761 of such
Code is amended by striking ‘‘subsection (b)’’
and inserting ‘‘subsection (b) or (c)’’.
(D) Subsection (d) of section 5761 of such
Code, as redesignated by subparagraph (B), is
amended by striking ‘‘The penalty imposed by
subsection (b)’’ and inserting ‘‘The penalties
imposed by subsections (b) and (c)’’.
(E)(i) Subpart F of chapter 52 of such
Code is amended by adding at the end the fol-
lowing new section:
‘‘SEC. 5754. RESTRICTION ON IMPORTATION OF PRE-
VIOUSLY EXPORTED TOBACCO PRODUCTS.
‘‘(a) IN GENERAL.—Tobacco products and cigarette
papers and tubes previously exported from the United
States may be imported or brought into the United States
only as provided in section 5704(d). For purposes of this
section, section 5704(d), section 5761, and such other pro-
visions as the Secretary may specify by regulations, ref-
erences to exportation shall be treated as including a ref-
erence to shipment to the Commonwealth of Puerto Rico.
‘‘(b) CROSS REFERENCE.—
‘‘For penalty for the sale of tobacco products and
cigarette papers and tubes in the United States
which are labeled for export, see section 5761(c).’’
(ii) The table of sections for subpart F of
chapter 52 of such Code is amended by adding
at the end the following new item:
‘‘Sec. 5754. Restriction on importation of previously exported to-
bacco products.’’
(2) IMPORTERS REQUIRED TO BE QUALIFIED.—
(A) Sections 5712, 5713(a), 5721, 5722,
5762(a)(1), and 5763 (b) and (c) of such Code
are each amended by inserting ‘‘or importer’’
after ‘‘manufacturer’’.
(B) The heading of subsection (b) of sec-
tion 5763 of such Code is amended by inserting
‘‘QUALIFIED IMPORTERS,’’ after ‘‘MANUFAC-
TURERS,’’.
(C) The heading for subchapter B of chap-
ter 52 of such Code is amended by inserting
‘‘and Importers’’ after ‘‘Manufactur-
ers’’.
(D) The item relating to subchapter B in
the table of subchapters for chapter 52 of such
Code is amended by inserting ‘‘and importers’’
after ‘‘manufacturers’’.
(3) BOOKS OF 25 OR FEWER CIGARETTE PA-
PERS SUBJECT TO TAX.—Subsection (c) of section
5701 of such Code is amended by striking ‘‘On each
book or set of cigarette papers containing more than
25 papers,’’ and inserting ‘‘On cigarette papers,’’.
(4) STORAGE
OF
TOBACCO
PRODUCTS.—Sub-
section (k) of section 5702 of such Code is amended
by inserting ‘‘under section 5704’’ after ‘‘internal
revenue bond’’.
(5) AUTHORITY TO PRESCRIBE MINIMUM MANU-
FACTURING
ACTIVITY
REQUIREMENTS.—Section
5712 of such Code is amended by striking ‘‘or’’ at
the end of paragraph (1), by redesignating para-
graph (2) as paragraph (3), and by inserting after
paragraph (1) the following new paragraph:
‘‘(2) the activity proposed to be carried out at
such premises does not meet such minimum capacity
or activity requirements as the Secretary may pre-
scribe, or’’.
(j) REPEAL OF DUPLICATIVE PROVISIONS.—Section
9302 (other than subsection (i)(2)) of the Balanced Budg-
et Act of 1997 is repealed.
(k) EFFECTIVE DATE.—The amendments and repeal
made by this section shall apply to articles removed (as
defined in section 5702(k) of the Internal Revenue Code
of 1986, as amended by this section) after December 31,
1997.
SEC. 102. TAX TREATMENT FOR CERTAIN TOBACCO-RELAT-
ED EXPENSES.
(a) IN GENERAL.—Section 275(a) of the Internal
Revenue Code of 1986 (relating to certain taxes) is
amended by inserting after paragraph (6) the following:
‘‘(7) Taxes imposed by chapter 52, but only in
an amount determined at rates in excess of the rates
of such taxes effective in 1998.’’
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to taxable years beginning after
December 31, 1998.
TITLE II—PHAER TRUST FUND
SEC. 201. PUBLIC HEALTH AND EDUCATION RESOURCE
TRUST FUND.
(a) IN GENERAL.—Subchapter A of chapter 98 of the
Internal Revenue Code of 1986 (relating to trust fund
code) is amended by adding at the end the following new
section:
‘‘SEC. 9512. PUBLIC HEALTH AND EDUCATION RESOURCE
TRUST FUND.
‘‘(a) CREATION OF TRUST FUND.—There is estab-
lished in the Treasury of the United States a trust fund
to be known as the ‘Public Health and Education Re-
source Trust Fund’ (hereafter referred to in this section
as the ‘PHAER Trust Fund’), consisting of such amounts
as may be appropriated or transferred to the Trust Fund
as provided in this section or section 9602(b).
‘‘(b) TRANSFERS TO TRUST FUND.—There is hereby
appropriated to the Trust Fund an amount equivalent to
the net increase in revenues received in the Treasury at-
tributable to the amendments made by section 2 of the
Public Health and Education Resource (PHAER) Act as
estimated by the Secretary.
‘‘(c) OBLIGATIONS FROM TRUST FUND.—
‘‘(1) STATE PROGRAMS.—
‘‘(A) IN GENERAL.—An applicable percent-
age of 75 percent of the amounts available in
the Trust Fund in a fiscal year shall be distrib-
uted by the Secretary of Health and Human
Services to each State meeting the requirements
of subparagraphs (C) and (D) to be used by
such State and by local government entities
within such State in such fiscal year and the
succeeding fiscal year in the following manner:
‘‘(i) Not less than 10 nor more than
30 percent of such amounts to State and
local school and community-based tobacco
education, prevention, and treatment pro-
grams.
‘‘(ii) Not less than 10 nor more than
30 percent of such amounts to State and
local smoking cessation programs and serv-
ices, including pharmacological therapies.
‘‘(iii) Not less than 10 nor more than
30 percent of such amounts to State and
local counter advertising programs.
‘‘(iv) Not less than 10 nor more than
25 percent of such amounts to the State
Children’s 
Health 
Insurance 
Program
under title XXI of the Social Security Act
(42 U.S.C. 1397aa et seq.) to be in addi-
tion to the amount appropriated under sec-
tion 2104 of such Act.
‘‘(v) Not less than 5 nor more than
10 percent of such amounts to—
‘‘(I) the Special Supplemental
Food Program for Women, Infants,
and Children under section 17 of the
Child Nutrition Act of 1966 (42
State
Applicable Percentage
Arizona .............................................................................
1.163883
Arkansas ...........................................................................
0.751011
California ..........................................................................
8.805641
Colorado ...........................................................................
1.054018
Connecticut .......................................................................
1.596937
Delaware ...........................................................................
0.227018
District of Columbia .........................................................
0.534487
Florida ..............................................................................
3.590667
Georgia .............................................................................
2.007112
Hawaii ..............................................................................
0.642527
Idaho ................................................................................
0.257835
Illinois ...............................................................................
4.272898
Indiana .............................................................................
1.714594
Iowa ..................................................................................
0.758686
Kansas ..............................................................................
0.762230
Kentucky ..........................................................................
1.875439
Louisiana ..........................................................................
1.916886
Maine ................................................................................
0.870740
Maryland ..........................................................................
2.051849
Massachusetts ..................................................................
3.700447
Michigan ...........................................................................
4.431824
Minnesota .........................................................................
2.474364
Mississippi ........................................................................
0.851450
Missouri ............................................................................
1.659116
Montana ...........................................................................
0.335974
Nebraska ..........................................................................
0.445356
Nevada .............................................................................
0.307294
New Hampshire ................................................................
0.552048
New Jersey .......................................................................
3.494187
New Mexico ......................................................................
0.465816
New York .........................................................................
14.529380
North Carolina .................................................................
2.097625
North Dakota ...................................................................
0.250758
Ohio ..................................................................................
4.690156
Oklahoma .........................................................................
0.841972
Oregon ..............................................................................
1.092920
Pennsylvania ....................................................................
5.233270
Rhode Island ....................................................................
0.821727
South Carolina .................................................................
0.883628
South Dakota ...................................................................
0.234849
Tennessee .........................................................................
2.479873
Texas ................................................................................
4.451382
Utah .................................................................................
0.330016
Vermont ............................................................................
0.370244
Virginia .............................................................................
1.373860
Washington ......................................................................
1.794612
West Virginia ...................................................................
1.003660
Wisconsin .........................................................................
2.098696
Wyoming ..........................................................................
0.122405
American Samoa ..............................................................
0.008681
N. Mariana Islands ..........................................................
0.001519
Guam ................................................................................
0.006506
U.S. Virgin Islands ..........................................................
0.004804
Puerto Rico ......................................................................
0.193175.
‘‘(C) STATE PLANS FOR CERTAIN ALLOCA-
TIONS.—Each State, working in collaboration
with local government entities, shall submit a
plan to the Secretary of Health and Human
Services for approval for an allocation under
the programs described in subparagraph (A),
specifying the percentage share for each pro-
gram. Each State plan shall provide for an eq-
uitable allocation of funds to local government
entities, specifically in relation to local govern-
ment tobacco-related health care needs and
anti-tobacco education, prevention, and control
activities. If a State fails to provide any compo-
nent of a State plan with respect to any pro-
gram allocation or if the Secretary of Health
and Human Services disapproves any such com-
ponent, the Secretary may make the allocation
for such program to 1 or more local government
or private entities located in such State pursu-
ant to plans submitted by such entities and ap-
proved by the Secretary.
‘‘(D) PROHIBITION OF SUPPLANTATION OF
STATE FUNDS.—Each State shall demonstrate
to the satisfaction of the Secretary of Health
and Human Services that an allocation to a
State under a program described in subpara-
graph (A) in any fiscal year shall be used to
supplement, not supplant, existing funding for
such program.
‘‘(2) FEDERAL PROGRAMS.—
‘‘(A) IN GENERAL.—Twenty-five percent of
the amounts available in the Trust Fund in a
fiscal year shall be distributed in the following
manner:
‘‘(i) 10 percent of such amounts to
the Office of the Commissioner of Food
and Drug Administration to be allocated at
the Commissioner’s discretion to conduct
tobacco control activities.
‘‘(ii) 25 percent of such amounts to
the Office of the Secretary of Agriculture
to be allocated at the Secretary’s discretion
to protect the financial well-being of to-
bacco farmers, their families, and their
communities.
‘‘(iii) 20 percent of such amounts to
be allocated at the discretion of the Sec-
retary of Health and Human Services to—
‘‘(I) the Office of the Director of
the National Institutes of Health to
be allocated at the Director’s discre-
tion to conduct disease research, and
‘‘(II) the Office of the Director of
the Centers for Disease Control and
Prevention to be allocated at the Di-
rector’s discretion to decrease smok-
ing.
‘‘(iv) 20 percent of such amounts to
the Office of the Secretary of Health and
Human Services to be allocated at the Sec-
retary’s discretion—
‘‘(I) to conduct prevention pro-
grams resulting from the study under
section 4108 of the Balanced Budget
Act of 1997, and
‘‘(II) to increase the Federal pay-
ment for the coverage of qualified
medicare beneficiaries under section
1902(a)(10)(E)(i) of the Social Secu-
rity 
Act 
(42 
U.S.C.
1396a(a)(10)(E)(i)) and specified low-
income medicare beneficiaries under
section 1902(a)(10)(E)(iii) of such
Act (42 U.S.C. 1396a(a)(10)(E)(iii)).
‘‘(v) 20 percent of such amounts to
fund a national counter advertising pro-
gram.
‘‘(vi) 2 percent of such amounts to the
Office of the Administrator of the Agency
for International Development to be allo-
cated at the Administrator’s discretion to
strengthen international efforts to control
tobacco.
‘‘(vii) 2 percent of such amounts to
the Office of the Director of the Office of
National Drug Control Policy to be allo-
cated at the Director’s discretion to con-
duct tobacco education and prevention pro-
grams.
‘‘(viii) 1 percent of such amounts to
the Office of the Secretary of Veterans Af-
fairs to be allocated at the Secretary’s dis-
cretion to conduct tobacco education, inter-
vention, and outreach programs.
‘‘(B) GRANTS
AND
CONTRACTS
FULLY
FUNDED IN FIRST YEAR.—With respect to any
grant or contract funded by amounts distrib-
uted under paragraph (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 ex-
pended.’’
(b) CONFORMING AMENDMENT.—The table of sec-
tions for such subchapter A is amended by adding at the
end the following new item:
‘‘Sec. 9512. Public Health and Education Resource Trust Fund.’’
TITLE III—FEDERAL STANDARDS
WITH RESPECT TO TOBACCO
PRODUCTS
SEC. 301. FEDERAL STANDARDS WITH RESPECT TO TO-
BACCO PRODUCTS.
(a) CIGARETTES.—Subsection (b) of section 5 of the
Federal Cigarette Labeling And Advertising Act (15
U.S.C. 1334(b)) is repealed.
(b) SMOKELESS TOBACCO.—Subsection (b) of section
7 of the Comprehensive Smokeless Tobacco Health Edu-
cation Act of 1986 (15 U.S.C. 4406(b)) is repealed.
TITLE IV—SENSE OF THE HOUSE
OF REPRESENTATIVES
SEC. 401. SENSE OF THE HOUSE OF REPRESENTATIVES RE-
GARDING COMPREHENSIVE TOBACCO LEGIS-
LATION.
It is the sense of the House of Representatives that
any final comprehensive tobacco legislation funded by the
PHAER Trust Fund under section 9512 of the Internal
Revenue Code of 1986, as added by section 201 of this
Act, must include, at the very least, the following addi-
tional elements:
(1) Stiff penalties that give the tobacco indus-
try the strongest possible incentive to stop targeting
children.
(2) Full authority for the Food and Drug Ad-
ministration to regulate tobacco like any other drug
or device with sufficient flexibility to meet changing
circumstances.
(3) Codification of the Food and Drug Adminis-
tration’s initiative to prevent teen smoking and the
imposition of stronger restrictions on youth access
and advertising consistent with the United States
Constitution.
(4) Broad disclosure of tobacco industry docu-
ments, including documents that have been hidden
under false claims of the attorney-client privilege.
(5) Efforts to ensure that the tobacco industry
stops marketing and promoting tobacco to children,
including comprehensive corporate compliance pro-
grams.
(6) Elimination of secondhand tobacco smoke in
public and private buildings in which 10 or more
people regularly enter.
(7) Disclosure of the ingredients and constitu-
ents of all tobacco products to the public and the im-
position of more prominent health warning labels on
packaging to send a strong and clear message to
children about the dangers of tobacco use.
(8) A prohibition on the use of Federal Govern-
ment resources to weaken nondiscriminatory public
health laws or promote tobacco sales abroad.
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