Everything For Everybody Concerned About Smoking
and Protecting the Rights of Nonsmokers
The Conrad Bill (S. 1638) - Read The Text [02/25-4]
The bill recently introducted by Senator Conrad is the latest conprehensive tobacco bill to be introduced into the Senate.
This bill is especially important because it appears to have the support of the administration.
To quickly locate particular parts of the bill, use the "find" or equivalent command on your web browser to search for a particular word or a section number of the bill.
For example, typing either the word "restaurant" or the section number "501" into the find command would locate the section of the bill dealing with smoking in restaurants.
105th CONGRESS
2d Session
S. 1638
To help parents keep their children from starting to use tobacco
products, to expose the tobacco industry's past misconduct and to stop
the tobacco industry from targeting children, to eliminate or greatly
reduce the illegal use of tobacco products by children, to improve the
public health by reducing the overall use of tobacco products, and for
other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
February 12, 1998
Mr. Conrad (for himself, Mr. Daschle, Mr. Kennedy, Mr. Lautenberg, Mr.
Reed, Mr. Leahy, Mr. Dodd, Mr. Bingaman, Mr. Durbin, Mr. Baucus, Mr.
Dorgan, Mr. Rockefeller, Mr. Kerrey, Mr. Wyden, Mr. Wellstone, Mr.
Torricelli, Mrs. Boxer, Mr. Kerry, Mr. Bumpers, Mr. Moynihan, Mr.
Johnson, Mr. Breaux, Mr. Kohl, Ms. Landrieu, Ms. Moseley-Braun, Mr.
Bryan, Mr. Akaka, and Mr. Lieberman) introduced the following bill;
which was read twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To help parents keep their children from starting to use tobacco
products, to expose the tobacco industry's past misconduct and to stop
the tobacco industry from targeting children, to eliminate or greatly
reduce the illegal use of tobacco products by children, to improve the
public health by reducing the overall use of tobacco products, and for
other purposes.
Be it enacted by the Senate and House of Representatives 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 ``Healthy Kids
Act''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Purposes.
Sec. 4. Definitions.
TITLE I--HEALTHY KIDS TRUST FUND
Subtitle A--General Provisions
Sec. 101. Establishment of Trust Fund.
Sec. 102. Liability of tobacco product manufacturers.
Sec. 103. Licensing of manufacturers.
Sec. 104. Enforcement.
Subtitle B--Payments
Chapter 1--To States
Sec. 111. Payments to States.
Chapter 2--Federal Health Programs
Sec. 121. National Institutes of Health Trust Fund for Health Research.
Chapter 3--Investments For Children
Sec. 131. Improving child care and early childhood development.
Sec. 132. Improving elementary education.
Sec. 133. Increased enrollment of children with the medicaid and State
children's health insurance programs.
Sec. 134. Medicare cancer patient demonstration project; evaluation and
report to Congress.
TITLE II--FDA JURISDICTION OVER TOBACCO PRODUCTS
Sec. 201. Reference.
Sec. 202. Statement of general authority.
Sec. 203. Treatment of tobacco products as drugs and devices.
Sec. 204. Safety and efficacy standard and recall authority.
Sec. 205. General health and safety regulation of tobacco products.
``Subchapter F--Tobacco Products
``Sec. 571. Promulgation of regulations.
``Sec. 572. Scientific Advisory Committee.
``Sec. 573. Performance standards.
``Sec. 574. Disclosure and reporting of tobacco and nontobacco
ingredients and constituents.
``Sec. 575. Tobacco product warnings, labeling and packaging.
``Sec. 576. Preservation of State and local authority.
``Sec. 577. Restrictions on youth access to tobacco products.
``Sec. 578. Public disclosure of health research.
``Sec. 579. Citizen suits.
``Sec. 580. Agricultural producers.
``Sec. 581. Authority of Secretary.
Sec. 206. Repeals.
Sec. 207. Authority of Federal Trade Commission.
TITLE III--YOUTH SMOKING REDUCTION TARGETS AND INCENTIVES TO
REDUCE
YOUTH SMOKING RATES
Sec. 301. Purpose.
Sec. 302. Child tobacco use surveys.
Sec. 303. Reduction in underage tobacco product usage.
Sec. 304. Noncompliance.
Sec. 305. Rulemaking procedures.
Sec. 306. Miscellaneous provisions.
TITLE IV--TOBACCO TRANSITION ASSISTANCE FUND
Sec. 401. Tobacco transition assistance fund.
TITLE V--STANDARDS TO REDUCE INVOLUNTARY EXPOSURE TO TOBACCO
SMOKE
Sec. 501. Standards to reduce involuntary exposure to tobacco smoke.
TITLE VI--PUBLIC HEALTH AND OTHER PROGRAMS
Subtitle A--Research Programs
Sec. 601. Tobacco-related research.
Sec. 602. Research relating to patterns of smoking.
Sec. 603. Surveillance and evaluation.
Subtitle B--Education and Prevention Programs
Sec. 611. Grants for school- and community-based tobacco danger
education programs.
Subtitle C--Miscellaneous Programs
Sec. 621. Counter-advertising programs.
Sec. 622. National Tobacco Cessation Program.
Sec. 623. Assistance for those suffering from tobacco-related
illnesses.
Sec. 624. International tobacco control.
Sec. 625. National Event Sponsorship Program.
Sec. 626. Programs to reduce alcohol and illicit drug use by minors.
TITLE VII--LIABILITY PROTECTION; CONSENT DECREES; NATIONAL
PROTOCOL
Subtitle A--Liability Protection and Attorney Fees
Sec. 701. Dismissal of and limitations on civil actions.
Sec. 702. Attorney's fees and expenses.
Subtitle B--Consent Decrees
Sec. 711. Consent decrees.
Sec. 712. Non-participating manufacturers.
Subtitle C--National Tobacco Control Protocol
Chapter 1--Establishment
Sec. 721. National Tobacco Control Protocol.
Chapter 2--Terms And Conditions
Sec. 725. Application of chapter.
Sec. 726. Agreement to prohibit certain advertising.
Sec. 727. Consensual restrictions.
Sec. 728. Agreement on format and content requirements for labeling and
advertising.
Sec. 729. Agreement to ban on nontobacco items and services, contests
and games of chance, and sponsorship of
events.
Chapter 3--Enforcement
Sec. 731. Federal enforcement of the protocol.
Sec. 732. State enforcement of the protocol.
Sec. 733. Private enforcement of protocol.
TITLE VIII--MISCELLANEOUS PROVISIONS
Sec. 801. Prohibition on use of funds to facilitate the exportation or
promotion of tobacco.
Sec. 802. Whistleblower protections.
Sec. 803. Prohibitions relating to tobacco products and children.
Sec. 804. Preservation of State and local authority.
Sec. 805. Severability.
TITLE IX--PROVISIONS RELATING TO NATIVE AMERICANS
Sec. 901. Provisions relating to Native Americans.
SEC. 2. FINDINGS.
Congress makes the following findings:
(1) Approximately 3,000 children begin smoking each day.
1,000 of these children will die prematurely from a tobacco-
related illness or condition.
(2) The tobacco industry has targeted tobacco product
marketing and promotional efforts toward children as a source
of replacement smokers. The industry has also targeted minorities.
(3) Approximately 90 percent of smokers start by the time
they are 18 years old. Half of all smokers start by age 14.
(4) Although most children plan to quit smoking after
experimenting, the vast majority find that they have become
addicted and cannot quit.
(5) Seventy percent of adult smokers would like to quit
smoking, but the tobacco industry has manipulated the level of
nicotine in tobacco products and added ingredients to enhance
the addictive effects of nicotine to ensure that users of these
products remain addicted.
(6) Tobacco products cause cancer, heart disease, lung
disease, and other fatal illnesses. More than 400,000 Americans
die each year of these tobacco-related illnesses and
conditions.
(7) Tobacco-related illnesses, medical conditions resulting
from tobacco use, and lost wages and productivity cost the
United States in excess of $100,000,000,000 annually.
(8) Federal and State taxpayers spend tens of billions of
dollars annually paying for the medicare, medicaid, and other
Federal and State health program costs arising from tobacco-
related illnesses and conditions.
(9) The tobacco industry has systematically invoked and
abused the attorney-client privilege to hide its attempts to
mislead the American public about the health risks associated
with tobacco use, its manipulation of nicotine levels, and its
efforts to lure underage users and minorities to its products.
(10) Nicotine is an addictive drug. The marketplace for
tobacco products is largely based on addiction.
(11) Worldwide, smoking kills 3,000,000 people each year.
If current smoking patterns continue, tobacco use will kill
10,000,000 people a year by 2025.
(12) Environmental tobacco smoke is responsible for 3,000
lung cancer deaths annually in American nonsmokers.
Environmental tobacco smoke also harms children's health.
(13) In 1995, the tobacco industry spent close to
$4,900,000,000 to attract new users, retain current users,
increase current consumption, and generate favorable long-term
attitudes toward smoking and tobacco use.
(14) Tobacco product advertising misleadingly portrays the
use of tobacco as socially acceptable and healthful.
(15) Tobacco product advertising is regularly seen by
persons under the age of 18, and persons under the age of 18
are regularly exposed to tobacco product promotional efforts.
(16) Through advertisements during and sponsorship of
sporting events, tobacco has become strongly associated with
sports and has become portrayed as an integral part of sports
and the healthy lifestyle associated with rigorous sporting
activity.
(17) Children are exposed to substantial and unavoidable
tobacco advertising, that leads to favorable beliefs about
tobacco use, plays a role in leading young people to
overestimate the prevalence of tobacco use, and increases the
number of young people who begin to use tobacco.
(18) Tobacco advertising increases the size of the tobacco
market by increasing consumption of tobacco products including
increasing tobacco sales to young people.
(19) Children are more influenced by tobacco advertising
than adults, they smoke the most advertised brands, and
children as young as 3 to 6 can recognize a character
associated with smoking at the same rate that they recognize
cartoons and fast food characters.
(20) Tobacco company documents indicate that young people
are an important and often crucial segment of the tobacco
market.
(21) Comprehensive advertising restrictions will have a
positive effect on the smoking rates of young people, as
evidenced by the experience in Norway, Finland, and other
countries.
(22) Restrictions on advertising are necessary to prevent
unrestricted tobacco advertising from undermining legislation
prohibiting access to young people and providing for education
about tobacco use.
(23) International experience shows that advertising
regulations that are stringent and comprehensive have a greater
impact on overall tobacco use and young people's use than
weaker or less comprehensive ones. Text only requirements,
while not as stringent as a ban, will accomplish this purpose
while preserving the informational function of advertising.
SEC. 3. PURPOSES.
The purposes of this Act are--
(1) to help American families dramatically reduce the
number of children illegally using tobacco products by--
(A) increasing the price of cigarettes by at least
$1.50 per pack in order to discourage youth purchases;
(B) implementing prevention, education, cessation,
and counter-advertising programs;
(C) restricting advertisements designed to
encourage kids to use tobacco products;
(D) imposing penalties on manufacturers for failing
to reach youth smoking rate reduction targets;
(E) requiring retailers to comply with laws
forbidding sales to minors; and
(F) giving the Food and Drug Administration and
State and local governments the authority and resources
to keep tobacco products out of the hands of minors;
(2) to compensate taxpayers for their costs attributable to
tobacco-related illnesses by reimbursing the medicaid and
medicare programs and resolving the legal claims of Federal,
State and local governments for those costs that resulted from
past misconduct by the tobacco industry;
(3) to improve the public health by reducing the number of
adult users of tobacco products through approved cessation
programs and limiting public exposure to environmental tobacco
smoke;
(4) to provide assistance to tobacco farmers, tobacco
factory workers, and rural communities;
(5) to affirm the full authority of the Food and Drug
Administration to regulate the manufacture, labeling, sale,
distribution, and advertising of tobacco products to the
fullest extent authorized by the commerce clause of the United
States Constitution;
(6) to make available to the public tobacco industry
documents regarding the health effects of tobacco products,
addiction, the agricultural production of tobacco, the
manufacture of tobacco products, the distribution of tobacco
products, and the marketing of tobacco products to youths; and
(7) to enhance global anti-tobacco efforts to minimize the
adverse health effects of tobacco products.
SEC. 4. DEFINITIONS.
In this Act:
(1) Brand.--The term ``brand'' means a variety of a tobacco
product distinguished by the tobacco used, tar content,
nicotine content, flavoring used, size, filtration, or
packaging.
(2) Cigar.--The term ``cigar'' means any roll of tobacco
wrapped in leaf tobacco or in any substance containing tobacco
(other than any roll of tobacco which is a cigarette or
cigarillo within the meaning of paragraph (3) or (4)).
(3) Cigarette.--The term ``cigarette'' means--
(A) any roll of tobacco wrapped in paper or in any
substance not containing tobacco; and
(B) any roll of tobacco wrapped in any substance
containing tobacco which, because of its appearance,
the type of tobacco used in the filler, or its
packaging and labeling, is likely to be offered to, or
purchased by, consumers as a cigarette described in
subparagraph (A).
(4) Cigarillos.--The term ``cigarillos'' means any roll of
tobacco wrapped in leaf tobacco or any substance containing
tobacco (other than any roll of tobacco which is a cigarette
within the meaning of paragraph (3)) and as to which 1,000
units weigh not more than 3 pounds.
(5) Cigarette tobacco.--The term ``cigarette tobacco''
means any product that consists of loose tobacco and is
intended for use by persons in a cigarette. Unless otherwise
stated, the requirements of this Act pertaining to cigarettes
shall also apply to cigarette tobacco.
(6) Distributor.--The term ``distributor'' means any person
who furthers the distribution of tobacco products, whether
domestic or imported, at any point from the original place of
manufacture to the person who sells or distributes the product
to individuals for personal consumption. Such term shall not
include common carriers.
(7) Little cigar.--The term ``little cigar'' means any roll
of tobacco wrapped in leaf tobacco or any substance containing
tobacco (other than any roll of tobacco which is a cigarette
within the meaning of subsection (1)) and as to which 1,000
units weigh not more than 3 pounds.
(8) Manufacturer.--The term ``manufacturer'' means any
person, including any repacker or relabeler, who manufactures,
fabricates, assembles, processes, or labels a tobacco product.
(9) Package.--The term ``package'' means a pack, box,
carton, or container of any kind in which tobacco products are
offered for sale, sold, or otherwise distributed to consumers.
(10) Person.--The term ``person'' means an individual,
partnership, corporation, parent corporation, or any other
business or legal entity or successor in interest of any such
person.
(11) Pipe tobacco.--The term ``pipe tobacco'' means any
loose tobacco that, because of its appearance, type, packaging,
or labeling, is likely to be offered to, or purchased by,
consumers as a tobacco product to be smoked in a pipe.
(12) Point of sale.--The term ``point of sale'' means any
location at which an individual can purchase or otherwise
obtain tobacco products for personal consumption.
(13) Retailer.--The term ``retailer'' means any person who
sells tobacco products to individuals for personal consumption,
or who operates a facility where vending machines or self-
service displays are permitted under this Act.
(14) 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.
(15) Sale.--The term ``sale'' includes the selling,
providing samples of, or otherwise making tobacco products
available for personal consumption in any place within the
scope of this Act.
(16) Secretary.--Except as provided in title IV, the term
``Secretary'' means the Secretary of Health and Human Services.
(17) Smokeless tobacco.--The term ``smokeless tobacco''
means any product that consists of cut, ground, powdered, or
leaf tobacco that is intended to be placed in the oral or nasal
cavity.
(18) State.--The term ``State'' includes the several
States, the District of Columbia, the Commonwealth of Puerto
Rico, Guam, the Virgin Islands, American Samoa, the Northern
Mariana Islands, and any other territory or possession of the
United States. Such term includes any political division of any
State.
(19) Tobacco.--The term ``tobacco'' means tobacco in its
unmanufactured form.
(20) Tobacco product.--The term ``tobacco product'' means
any product made of or derived from tobacco leaf for human
consumption, including, but not limited to, cigarettes,
cigarillos, cigarette tobacco, cigars, little cigars, pipe
tobacco, and smokeless tobacco, and roll-your-own tobacco.
(21) Trust fund.--Except as provided in section 121 and
title IV, the term ``Trust Fund'' means the Health Enhancement
and Lowered Tobacco Hazards for Young Kids Trust Fund
established under section 101.
TITLE I--HEALTHY KIDS TRUST FUND
Subtitle A--General Provisions
SEC. 101. ESTABLISHMENT OF TRUST FUND.
(a) Creation.--
(1) In general.--There is established in the Treasury of
the United States a trust fund to be known as the ``Health
Enhancement and Lowered Tobacco Hazards for Young Kids Trust
Fund'' (referred to as the ``HEALTHY Kids Trust Fund''),
consisting of such amounts as may be appropriated or credited
to the Trust Fund.
(2) Trustees.--The trustees of the Trust Fund shall be the
Secretary of the Treasury and the Secretary of Health and Human
Services.
(b) Transfers.--There are hereby appropriated and transferred to
the Trust Fund an amount equal to the initial payment under section 102
and 75 percent of the--
(1) amounts received under the annual assessments made
under section 102;
(2) amounts paid as fines or penalties, including interest
thereon, under section 103; and
(3) amounts repaid or recovered under title III, including
interest thereon.
(c) Repayable Advances.--
(1) Authorization.--There are authorized to be appropriated
to the Trust Fund, as repayable advances, such sums as may from
time to time be necessary to make the expenditures described in
subsection (d).
(2) Repayment with interest.--Repayable advances made to
the Trust Fund shall be repaid, and interest on such 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 for such purposes.
(3) Rate of interest.--Interest on advances made pursuant
to this subsection shall be at a rate determined by the
Secretary of the Treasury (as of the close of the calendar
month preceding the month in which the advance is made) to be
equal to the current average market yield on outstanding
marketable obligations of the United States with remaining
period to maturity comparable to the anticipated period during
which the advance will be outstanding.
(d) Expenditures From Trust Fund.--Amounts in the Trust Fund shall
be made available in each fiscal year, without further appropriation as
follows:
(1) 14.5 percent of such amounts shall be made available
for payments to States as provided for under section 111.
(2) 17 percent of such amounts shall be made available for
grants to the States for child care and early childhood
development as provided for in section 131.
(3) 6 percent of such amounts shall be made available for
grants to States for education as provided for in section 132.
(4) 4 percent of such amounts shall be made available to
carry out the outreach and increased enrollment provisions
under the amendments made by section 133 to the medicaid
program under title XIX of the Social Security Act (42 U.S.C.
1396 et seq.) and the children's health insurance program under
title XXI of such Act (42 U.S.C. 1397aa et seq.).
(5) 15.5 percent of such amounts shall be made available
for public health programs, of which--
(A) $300,000,000 shall be made available to the
Secretary to carry out chapter IX of the Food Drug and
Cosmetic Act (as added by section 204);
(B) $200,000,000 shall be made available to the
Indian Health Service to be used as provided for in
title IX; and
(C) the remainder shall be made available for
public health programs as provided for in title VI.
(6) 21 percent of such amounts shall be made available to
the National Institutes of Health Trust Fund for Health
Research for the conduct of health research as provided for in
section 121.
(7) For agricultural programs as provided for in title IV--
(A) 12 percent of such amounts shall be made
available to the Tobacco Community Revitalization Trust
Fund for each of the first 10 fiscal years after the
date of enactment of this Act;
(B) 4 percent of such amounts shall be made
available to the Tobacco Community Revitalization Trust
Fund for each of the 11th through 15th fiscal years
after the date of enactment of this Act; and
(C) 2 percent of such amounts shall be made
available to the Tobacco Community Revitalization Trust
Fund for each of the 16th through 25th fiscal years
after the date of enactment of this Act.
(8) For the Hospital Insurance Trust Fund--
(A) 4 percent of such amounts shall be made
available to such Trust Fund for each of the first 10
fiscal years after the date of enactment of this Act
(less amounts made available under paragraph (9) for
the first 3 such fiscal years);
(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 first 10
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 subsequent 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 Budget and Emergency Deficit
Control Act of 1985; and
(B) by the Committee on the Budget of the House of
Representatives and the Committee 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)(109), the term ``debt''
means any obligation of the Federal Government included in the
debt subject to limit.
SEC. 102. LIABILITY OF TOBACCO PRODUCT MANUFACTURERS.
(a) Payments.--
(1) Initial payment.--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
$15,000,000,000 as the average stock market capitalization of
the tobacco manufacturer (as defined in paragraph (3)) bears to
the average stock market capitalization of all tobacco
manufacturers for 1996.
(2) Annual assessments and collection.--For each calendar
year beginning with the first full calendar year following the
year in which this Act is enacted, the Secretary shall assess
each manufacturer an amount determined under subsection (b).
Such assessments shall be collected in a manner similar to the
manner in which excise taxes are collected under chapter 52 of
the Internal Revenue Code of 1986.
(3) Average stock market capitalization.--For purposes of
this subsection, the average stock market capitalization of a
manufacturer for a year shall be determined by the Secretary 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.
(b) Annual Assessments.--The Secretary shall assess each
manufacturer (in accordance with regulations, relating to the timing
and method of payment of assessments, to be promulgated by the
Secretary of the Treasury) an amount in accordance with the following:
(1) Small cigarettes.--With respect to a manufacturer of
cigarettes weighing not more than 3 pounds per thousand, the
assessment shall equal--
(A) for cigarettes removed during calendar year
1999, $25 per thousand;
(B) for cigarettes removed during calendar year
2000, $50 per thousand; and
(C) for cigarettes removed during calendar year
2001, $75 per thousand.
(2) Large cigarettes.--
(A) In general.--With respect to a manufacturer of
cigarettes weighing more than 3 pounds per thousand,
the assessment shall equal--
(i) for cigarettes removed during calendar
year 1999, $52.50 per thousand;
(ii) for cigarettes removed during calendar
year 2000, $105 per thousand; and
(iii) for cigarettes removed during
calendar year 2001, $157.50 per thousand.
(B) Exception.--On cigarettes more than 6\1/2\
inches in length, at the rate prescribed for cigarettes
weighing not more than 3 pounds per thousand, counting
each 2\3/4\ inches, or fraction thereof, of the length
of each as one cigarette.
(3) Small cigars.--With respect to a manufacturer of cigars
weighing not more than 3 pounds per thousand, the assessment
shall equal--
(A) for cigars removed during calendar year 1999,
$25 per thousand;
(B) for cigars removed during calendar year 2000,
$50 per thousand; and
(C) for cigars removed during calendar year 2001,
$75 per thousand.
(4) Large cigars.--With respect to a manufacturer of cigars
weighing more than 3 pounds per thousand, the assessment shall
equal--
(A) for cigars removed during calendar year 1999,
25 percent of the price for which such cigars are sold
but not more than $500 per thousand;
(B) for cigars removed during calendar year 2000,
50 percent of the price for which such cigars are sold
but not more than $1,000 per thousand; and
(C) for cigars removed during calendar year 2001,
75 percent of the price for which such cigars are sold
but not more than $1,500 per thousand.
(5) Snuff.--With respect to a manufacturer of snuff (as
such term is defined for purposes of chapter 52 of the Internal
Revenue Code of 1986) the assessment shall equal--
(A) for snuff removed during calendar year 1999,
$6.67 per pound (and a proportionate assessment at the
like rate on all fractional parts of a pound);
(B) for snuff removed during calendar year 2000,
$13.33 per pound (and a proportionate assessment at the
like rate on all fractional parts of a pound); and
(C) for snuff removed during calendar year 2001,
$20 per pound (and a proportionate assessment at the
like rate on all fractional parts of a pound).
(6) Chewing tobacco.--With respect to a manufacturer of
chewing tobacco (as such term is defined for purposes of
chapter 52 of the Internal Revenue Code of 1986) the assessment
shall equal--
(A) for chewing tobacco removed during calendar
year 1999, $2.67 per pound (and a proportionate
assessment at the like rate on all fractional parts of
a pound);
(B) for chewing tobacco removed during calendar
year 2000, $5.33 per pound (and a proportionate
assessment at the like rate on all fractional parts of
a pound); and
(C) for chewing tobacco removed during calendar
year 2001, $8 per pound (and a proportionate assessment
at the like rate on all fractional parts of a pound).
(7) Pipe tobacco.--With respect to a manufacturer of pipe
tobacco (as such term is defined for purposes of chapter 52 of
the Internal Revenue Code of 1986) the assessment shall equal--
(A) for pipe tobacco removed during calendar year
1999, $5.33 per pound (and a proportionate assessment
at the like rate on all fractional parts of a pound);
(B) for pipe tobacco removed during calendar year
2000, $10.67 per pound (and a proportionate assessment
at the like rate on all fractional parts of a pound);
and
(C) for pipe tobacco removed during calendar year
2001, $16.00 per pound (and a proportionate assessment
at the like rate on all fractional parts of a pound).
(8) Roll-your-own tobacco.--With respect to a manufacturer
of roll-your-own tobacco the assessment shall equal--
(A) for roll-your-own tobacco removed during
calendar year 1999, $5.71 per pound (and a
proportionate assessment at the like rate on all
fractional parts of a pound);
(B) for roll-your-own tobacco removed during
calendar year 2000, $11.43 per pound (and a
proportionate assessment at the like rate on all
fractional parts of a pound); and
(C) for roll-your-own tobacco removed during
calendar year 2001, $17.14 per pound (and a
proportionate assessment at the like rate on all
fractional parts of a pound).
(c) Inflation Adjustment.--In the case of a calendar year after
2001, the dollar amount described in subparagraph (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), multiplied 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 determined 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 subparagraph (B)
thereof; or
(B) 3 percent.
(d) Assessments Applicable to Floor Stocks.--
(1) In general.--Tobacco products manufactured 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 imposed 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 person 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 assessment 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 assessment imposed by paragraph (1) if--
(A) internal revenue taxes have been determined, or
customs duties liquidated, with respect 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 ``assessment date'' means
January 1.
(e) No Tax Benefit.--
(1) In general.--The initial payment described 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 deductible.
(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 Revenue Code of 1986 and shall not be
deductible.
(f) 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 penalty 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.''.
(g) Limitation.--A manufacturer may not utilize any proceeds from
liability insurance coverage to make payments or pay assessments under
this section.
(h) 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.
(i) Nonapplication to Certain Manufacturers.--
(1) Exemption.--
(A) In general.--A manufacturer described in
paragraph (2) shall be exempt from the requirements of
this section relating to--
(i) the payment of an initial payment under
subsection (a)(1); and
(ii) the payment of that portion of the
annual assessments under this section that will
be provided under paragraphs (1) through (4) of
section 101(d) to States with which such
manufacturer has settled tobacco-related civil
actions as of the date of enactment of this Act
as determined by the Secretary under
subparagraph (B).
(B) Determination.--For purposes of subparagraph
(A)(ii), the Secretary shall determine the amount of
the assessments involved that will be provided under
paragraphs (1) through (4) of section 101(d) to States
described in such subparagraph based on the ratio
described in section 111(b)(2)(A) with respect to such
States. Such amount shall be deducted from the
aggregate assessment due from the manufacturer
involved.
(2) Manufacturer.--A manufacturer described in this section
is a manufacturer that has resolved tobacco-related civil
actions with more than 25 States prior to January 1, 1998
through judicial consent decrees.
(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 distributed 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 provided
under subtitle A of title VII.
(c) Nonpayment of Assessments.--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 payment of assessment
required under section 102.
(d) Revocation and Suspension.--The Secretary shall promulgate
regulations to provide for the enforcement 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 penalty 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 respect to any failure to pay an
assessment under section 102, the period--
(1) beginning on the due date for such payment; 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 payments 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 payments to
all States under such title for such fiscal year.
(B) Special payment rule.--In the case of a State
that, as of the date of the enactment of this Act, has
resolved tobacco-related civil actions through judicial
consent decrees with a manufacturer described in
section 102(i), the amount determined under
subparagraph (A) shall be reduced by an amount equal to
the amount by which such manufacturer's payment under
section 102(a)(2) is reduced under section 102(i) as a
result of such settlement.
(3) Adjustment.--With respect to a fiscal year in which the
amount determined under paragraphs (1) and (2) of subsection
(a) exceeds the limitation 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 incurred 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 expenses
incurred by the State in providing directly, 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 expenditures attributable to the
treatment of tobacco induced illnesses and conditions or other
damages;
(2) prepare and submit to the Secretary for approval a plan
describing the manner in which the State will comply with the
requirements of subsection (d) and a certification that all
actions described 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 Entities.--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 entities within the State that can demonstrate that such
entities 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 governmental
employees; or
(4) the implementation of tobacco product enforcement or
tobacco product regulatory requirements in accordance with this
Act.
CHAPTER 2--FEDERAL HEALTH PROGRAMS
SEC. 121. NATIONAL INSTITUTES OF HEALTH TRUST FUND FOR HEALTH
RESEARCH.
(a) Creation of Trust Fund.--There is established 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 available 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 Secretary shall distribute during
any fiscal year--
(A) 2 percent of such amounts to the Office of the
Director of the National Institutes of Health to be
allocated at the Director's discretion--
(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 Office 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 Institutes of Health
Revitalization Act of 1993 concerning 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; and
(G) the remainder of such amounts to member
institutes and centers, including the Office of AIDS
Research, of the National Institutes of Health in the
same proportion to such remainder, as the amount of
annual appropriations under appropriations Acts for
each member institute and center for the fiscal year
bears to the total amount of appropriations under
appropriations 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 allocated 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 contract funded by amounts distributed
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
expended.
(4) Trigger and release of monies and phase-in.--
(A) Trigger and release.--No expenditure shall be
made under paragraph (1) during any fiscal year in
which the annual amount appropriated for the National
Institutes of Health is less than the amount so
appropriated for fiscal year 1999.
(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 fiscal 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 Development 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,
strengthening 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.
SEC. 132. IMPROVING ELEMENTARY EDUCATION.
(a) Grants Authorized.--The Secretary of Education 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 elementary 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 achievement.
(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 manner, and accompanied by such
information as the Secretary may require.
(2) Contents.--Each State plan shall demonstrate to the
satisfaction of the Secretary of Education 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 elementary schools throughout the
State, focusing on using the funds to train, recruit,
and hire teachers for elementary schools serving
communities 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
educational agency as compared to other local
educational agencies in the State under part A of title
I of the Elementary and Secondary Education 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 subsection.
(d) 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 provided
to the State under this section shall not be reduced solely as a result
of the availability of funds under this section.
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
determinations 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 inserting the
following:
``(3) Limitation.--
``(A) In general.--Beginning with fiscal year 1998,
the total amount of additional Federal 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 expended.
``(C) Equitable distribution of funds.--In applying
this paragraph, the Secretary 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
elementary 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, or is authorized to determine the
eligibility of a child for obtaining child
health assistance 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 ``limiting the
classes of'' and inserting ``imposing limitations on''.
(2) Retroactivity.--The amendments made by paragraph (1)
take effect as if included in the enactment 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 Social 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 subsection (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 during 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 enactment of section 4901 of
the Balanced Budget Act of 1997 (Public Law 105-33; 111 Stat.
552).
(d) Medicaid and State Children's Health Insurance Program
Eligibility for Legal Immigrant Children Who Entered the United States
After August 1996.--
(1) Exemption from 5-year ban.--Section 403 of the Personal
Responsibility and Work Opportunity Reconciliation Act of 1996
(8 U.S.C. 1613), as amended by sections 5302(c)(1)(B) and
5303(c) of the Balanced Budget Act of 1997 (Public Law 105-33;
111 Stat. 599, 600), is amended by adding at the end the
following:
``(e) Medicaid and SCHIP Benefits for Certain Children.--
Notwithstanding any other provision of law, the limitations under
section 401(a) and subsection (a) shall not apply to an individual who
is under 19 years of age and who lawfully entered the United States
after August 22, 1996, but only with respect to the eligibility of that
individual for--
``(1) child health assistance under title XXI of the Social
Security Act (42 U.S.C. 1397aa et seq.); and
``(2) medical assistance under title XIX of such Act (42
U.S.C. 1396 et seq.), if the individual is an optional targeted
low-income child described in section 1905(u)(2)(B) of such Act
(42 U.S.C. 1396d(u)(2)(B)).''.
(2) Nonapplication of state authority to determine
eligibility for medicaid.--Section 402(b)(2) of the Personal
Responsibility and Work Opportunity Reconciliation Act of 1996
(8 U.S.C. 1612(b)(2)), as amended by sections 5303(b) and
5305(b) of the Balanced Budget Act of 1997 (Public Law 105-33;
111 Stat. 600, 601), is amended--
(A) in the matter preceding subparagraph (A), by
striking ``Qualified'' and inserting ``Except as
provided in subparagraphs (A), (E), (F), and (G),
qualified''; and
(B) by adding at the end the following:
``(G) Medicaid exception for certain children.--
With respect to eligibility for benefits for the
program described in section 403(e)(2), paragraph (1)
shall not apply to any individual described in that
section.''.
(3) Retroactivity.--The amendments made by paragraphs (1)
and (2) take effect as if included in the enactment of the
Balanced Budget Act of 1997 (Public Law 105-33; 111 Stat. 251).
(e) Annual Performance Bonus for Reduction in Medicaid Eligible but
Unenrolled Children.--Section 1903 of the Social Security Act (42
U.S.C. 1396b) is amended by adding at the end the following:
``(x) Performance Bonus for Reduction in Eligible But Unenrolled
Children.--
``(1) Performance bonus.--Beginning with fiscal year 1999,
in addition to the amounts paid to a State under subsection
(a), the Secretary shall pay to each State that has an approved
plan under this title an amount equal to the performance bonus
determined under paragraph (2).
``(2) Performance bonus.--
``(A) Formula.--The performance bonus for a State
for a fiscal year is equal to the product of--
``(i) the excess baseline enrollment for
the State for the fiscal year;
``(ii) the average per child expenditures
by the State under this title for the fiscal
year; and
``(iii) the difference between the enhanced
FMAP and the Federal medical assistance
percentage (as defined in the first sentence of
section 1905(b)) of the State for the fiscal
year described in section 2105(b).
``(B) Determination of the excess baseline
enrollment.--
``(i) In general.--For purposes of
subparagraph (A)(i), the excess baseline
enrollment for a State for a fiscal year is the
difference between (I) the actual number of
full year equivalent children enrolled under
the State plan and (II) the baseline number of
full year equivalent children that would be
enrolled under the State plan in the absence of
the performance bonus outreach efforts of the
State.
``(ii) Determination of the baseline number
of full year equivalent children.--For purposes
of clause (i)(II), the baseline number of full
year equivalent children that would be enrolled
under the State plan in the absence of the
performance bonus outreach efforts of the State
is--
``(I) in the case of fiscal year
1999, the actual number of full year
equivalent children enrolled under the
State plan in fiscal year 1998,
increased by the national percentage
increase for fiscal year 1999 in the
number of full year equivalent children
enrolled in all State plans under this
title, as projected by the
Congressional Budget Office in January
1998; and
``(II) in the case of any
succeeding fiscal year, the baseline
number of full year equivalent children
that would be enrolled under the State
plan in the absence of the performance
bonus outreach efforts of the State
determined for the preceding fiscal
year, increased by the national
percentage increase for that succeeding
fiscal year in the number of full year
equivalent children enrolled in all
State plans under this title, as
projected by the Congressional Budget
Office in January 1998.
``(C) Determination of average per child
expenditures.--For purposes of subparagraph (A)(ii),
the average per child expenditures by a State under
this title for a fiscal year is--
``(i) the total amount paid to the State
under subsection (a)(1) that is attributable to
medical assistance provided to children under
the State plan; divided by
``(ii) the actual number of full year
equivalent children enrolled under the State
plan in that fiscal year.
``(3) Data requirements.--Each State shall submit to the
Secretary such data, at such time and in such manner, as the
Secretary determines is necessary to make the payments required
under this subsection. The Secretary shall ensure that data is
provided under this subsection in a manner that is consistent
with other data reporting requirements for information required
to be submitted by a State under this title and title XXI, and
that avoids duplication of reporting requirements.
``(4) States with significantly higher increased actual
enrollment than the expected national increase.--For any fiscal
year, if a State's actual full year equivalent children
enrollment percentage increase over the preceding fiscal year
is at least twice the estimated national percentage increase in
such enrollment for that fiscal year, as projected by the
Congressional Budget Office in January 1998, the State shall
submit such additional information as the Secretary determines
is necessary to verify that the increase is the result of the
State reducing the number of unenrolled children who are
eligible for medical assistance under this title in the State.
``(5) Timing of performance bonus payments;
reconciliation.--The Secretary shall pay the performance
bonuses required under this subsection for a fiscal year not
later than September 30 of the succeeding fiscal year based on
reporting data that reflects each State's actual number of full
year equivalent children enrolled under the State plan and
average per child expenditures. A State shall provide the
Secretary with access to any records or information relevant to
the payment of a performance bonus under this subsection for
the purposes of review or audit.
``(6) Waivers.--The provisions of this subsection apply to
a State providing medical assistance under this title under
waiver authority in the same manner as they apply to a State
with an approved plan under this title.
``(7) Limitation.--Amounts paid to States for a fiscal year
under this subsection shall not exceed the amount made
available under section 101(d)(4) of the Healthy Kids Act for
such fiscal year (less amounts paid to States under the
amendments made by subsections (a) through (d) of section 133
of such Act).''.
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 payment 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 diagnosed with
cancer and enrolled in the medicare program under such title as
part of the individual's participation 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 provisions under the
medicare program, such as deductibles, coinsurance, and copayment
amounts, shall apply to any individual participating in a demonstration
project conducted 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 cooperative
group or a National Institutes of Health center; and
(C) the National Cancer Institute, with respect to
programs that oversee and coordinate extramural
clinical cancer research, trials sponsored by such
Institute and conducted at designated cancer centers,
clinical trials, and Institute 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 modify 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 approved 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, unless the
Secretary has authorized the manufacturer 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 Security Act of covering
routine patient care costs for individuals 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 Secretary 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 expressed in terms
of an amendment to, or repeal of, a section 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 consumption including, but not limited
to, cigarettes, cigarillos, cigarette tobacco, cigars, little cigars,
pipe tobacco, 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 following:
``(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 regulating such products.''.
(c) Devices.--Section 520(e)(1) (21 U.S.C. 360j(e)(1)) is amended
by striking ``or use--'' and inserting ``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, distributed,
advertised, or labeled in violation of this Act or the regulations
promulgated under this Act.
``(v) The regulations promulgated in accordance with subchapter E
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 determined by the Secretary) that the product presents a reduced
health risk unless it is demonstrated to the satisfaction of the
Secretary that the product will achieve the best public health result,
taking into account all relevant factors 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 sentence need not be
found if the Secretary finds that special controls achieve the
best public health result.''; and
(2) in paragraph (2)--
(A) by redesignating subparagraphs (A), (B) and (C)
as clauses (i), (ii) and (iii), respectively;
(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 tobacco 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 subchapter 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 Secretary.
``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, scientific, or other technological
data involving the manufacture and use of tobacco products, and
of appropriately 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 manufacturer,
distributor, or retailer of a tobacco product, or
organization substantially funded by manufacturers,
distributors, or retailers of tobacco products;
``(C) is, or is in the employ of, an attorney
representing an entity described in subparagraph (B);
or
``(D) is, or is in the employ of, a consultant
employed by or under retainer to an entity described in
subparagraph (B).
``(3) Chairperson.--The Secretary shall designate 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 dependence 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 appropriate by the
Secretary.
``SEC. 573. PERFORMANCE STANDARDS.
``(a) General Rule.--The Secretary may adopt a performance standard
under section 514(a)(2) for a tobacco product regardless of whether the
product has been classified under section 513. Such standards may
include--
``(1) the reduction or elimination of nicotine yields of
the product;
``(2) the reduction or elimination of other constituents or
harmful components of the product; or
``(3) standards relating to any other requirement pursuant
to section 512(a)(2).
``(b) Tobacco Constituents.--The Secretary may require that a
manufacturer test, report and disclose tobacco 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 CONSTITUENTS.
``(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 tobacco product it manufactures that contains the
information 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, include--
``(A) a list of all ingredients, constituents,
substances, and compounds that are found in or added to
the tobacco or tobacco product (including the paper,
filter, or packaging of the product if applicable) in
the manufacture of the tobacco product, for each brand
or variety of tobacco product so manufactured,
including, if determined necessary by the Secretary,
any material added to the tobacco used in the product
prior to harvesting;
``(B) the quantity of the ingredients,
constituents, 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 cigarettes--
``(i) the filter ventilation percentage
(the level of air dilution in the cigarette as
provided by the ventilation holes in the
filter, 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 cigarette;
``(E) for each brand or variety of smokeless
tobacco products--
``(i) the pH level of the tobacco;
``(ii) the moisture content of the tobacco
expressed as a percentage of the weight of the
tobacco; and
``(iii) the nicotine content--
``(I) for each gram of the product,
measured in milligrams of nicotine;
``(II) expressed as a percentage of
the dry weight of the tobacco; and
``(III) with respect to unionized
(free) nicotine, expressed as a
percentage per gram of the tobacco and
expressed in milligrams per gram of the
tobacco; and
``(F) any other information determined appropriate
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 assessment for each new ingredient,
constituent, substance, 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 assessment
submitted under subparagraph (A) shall be signed by an
officer of the manufacturer who is acting on behalf of
the manufacturer and who has the authority to bind the
manufacturer, and contain a statement that ensures that
the information contained in the assessment is true,
complete and accurate.
``(C) Definition of new ingredient.--For purposes
of subparagraph (A), the term `new ingredient,
constituent, substance, or compound' means an
ingredient, constituent substance, 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 ingredients, 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 period
beginning on the date of enactment of this subchapter. The
Secretary shall develop a procedure for the submission of
safety assessments of such ingredients, constituents,
substances, or compounds that staggers such safety assessments
within the 5-year period.
``(3) Basis of assessment.--The safety assessment of an
ingredient, constituents, substance, or compound described in
paragraphs (1) and (2) shall--
``(A) be based on the best scientific evidence
available at the time of the submission of the
assessment; and
``(B) demonstrate that there is a reasonable
certainty among experts qualified by scientific
training and experience who are consulted, that the
ingredient, constituents, substance, 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
manufacturer--
``(A) if no safety assessment has been submitted by
the manufacturer for the ingredient, constituent,
substance, or compound as otherwise required under this
section; or
``(B) if the Secretary finds that the manufacturer
has failed to demonstrate the safety of the ingredient,
constituent, substance, or compound 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 assessment under
subsection (b), the Secretary shall review the findings
contained in such assessment and approve or disapprove
of the safety of the ingredient, constituents,
substance, or compound that was the subject of the
assessment. The Secretary may, for good cause, extend
the period for such review. The Secretary shall provide
notice to the manufacturer of an action under this
subparagraph.
``(B) Inaction by secretary.--If the Secretary
fails to act with respect to an assessment of an
existing ingredient, constituent, substance, 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 compound involved until such time as the
Secretary makes a determination with respect to the
assessment.
``(d) Right to Know; Full Disclosure of Ingredients to the
Public.--
``(1) In general.--Except as provided in paragraph (3), a
package of a tobacco product shall disclose 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 domestic and foreign
tobacco.--The regulations referred 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 tobacco; and
``(B) the percentage that is foreign tobacco.
``(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 relates 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 promote 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 package 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 addition to, those otherwise
required under subparagraphs (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 required 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
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. All the letters in the label 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.
``(C) Exception.--With respect to cigarettes
manufactured and distributed prior to January 1, 2000,
the provisions of subparagraph (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 statement required by
subparagraph (A) of paragraph (1) shall occupy the
entire front portion of the flip-top.
``(3) Requirements for advertising.--
``(A) Location.--Each label statement required by
subparagraph (B) of paragraph (1) shall appear in a
conspicuous and prominent format and location at the
top of each advertisement within the trim area and
shall occupy not less than 20 percent of the area of
the advertisement involved.
``(B) Type, color and format.--
``(i) Type.--With respect to each label
statement required by subparagraph (B) of
paragraph (1), the phrase `WARNING' shall
appear in capital letters and the label
statement shall be printed in the following
types:
``(I) With respect to whole page
advertisements on broadsheet
newspaper--45 point type.
``(II) With respect to half page
advertisements on broadsheet
newspaper--39 point type.
``(III) With respect to whole page
advertisements on tabloid newspaper--39
point type.
``(IV) With respect to half page
advertisements on tabloid newspaper--27
point type.
``(V) With respect to DPS magazine
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 described 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 required under this
subparagraph. The label statements shall be
enclosed by a rectangular border that is the
same color as the letters of the statements and
that is the width of the first down stroke of
the capital `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, periodical or
other publication that is not in English, such
statements shall appear in the predominant
language of the publication; or
``(ii) in the case of any other
advertisement that is not in English, such
statements shall appear in the same language as
that principally used in the advertisement.
``(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 possible on each brand of the product
and be randomly distributed in all areas of the United
States in which such product is marketed in accordance
with a plan submitted by the manufacturer, 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 sequence in advertisements for
each such brand of cigarettes in accordance with a plan
submitted by the manufacturer, importer, distributor or
retailer and approved by the Secretary.
``(C) Approval of plans.--The Secretary 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 paragraph and if such plan assures that all
of the labels required under subparagraphs (A) and (B)
will be displayed by the manufacturer, importer,
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 subsection, 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 Cancer-Causing
Chemicals.
``WARNING: Smokeless Tobacco Is Addictive.
``(B) Advertising.--It shall be unlawful for any
manufacturer, importer, distributor or retailer of
smokeless tobacco products to advertise or cause to be
advertised any smokeless tobacco product unless the
advertising bears, in accordance with the requirements
of this subsection, 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 Cancer-Causing
Chemicals.
``WARNING: Smokeless Tobacco Is Addictive.
``(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 addition to, those otherwise
required under subparagraphs (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 required by
subparagraph (A) of paragraph (1) shall be located on
the 2 most prominent display 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, 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.
``(3) Advertising and rotation.--The provisions of
paragraph (3) and (4) of subsection (a) shall apply to
advertisements for smokeless tobacco products and the rotation
of the label statements required under paragraph (1)(A) on such
products.
``(c) Other Tobacco Products.--The Secretary may prescribe such
regulations as may be necessary to establish warning labels for other
tobacco product packaging, labeling and advertising.
``(d) Construction.--
``(1) In general.--Noting in this section shall be
construed to limit the ability of the Secretary to change the
text or layout of any of the warning statements, or any of the
labeling provisions, under subsections (a) and (b) and other
provisions of this Act, if determined necessary by the
Secretary 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 respect to unfair or deceptive acts or
practices in the advertising of cigarettes or smokeless tobacco
products.
``(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
cigarettes 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 AUTHORITY.
``Except as otherwise provided for in section 575(e), nothing in
this subchapter shall be construed as prohibiting a State or locality
from imposing requirements, prohibitions, penalties or other measures
to further the purposes of this subchapter that are in addition to the
requirements, prohibitions, or penalties required under this
subchapter. State and local governments may impose additional 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 paragraph (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 necessary, after promulgation
of the model program 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 Secretary in writing that
the State intends to implement a program that meets the
requirements of this section at the earliest possible
opportunity. 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 subchapter, 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 otherwise
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 distribution at
retail of tobacco products of the license 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 distribution of tobacco
products without a license and for appropriate
penalties for other violations of laws relating to
youth access to tobacco products;
``(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 revocation 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 tobacco 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 violations.
``(2) Minors.--In the case of a minor who purchases or
attempts to purchase a tobacco product in violation of
subsection (a) (other than a minor engaged 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 enforce 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 purchasing tobacco
products less than 5 percent of the time.
``(2) Requirements.--The Secretary may by regulation
implement such requirements as the Secretary determines
necessary to ensure that any compliance checks performed by the
State under paragraph (1) are accurate.
``(3) Violations.--If the Secretary determines that the
provisions of subsection (a) are being violated within a State,
the Secretary shall have the authority 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 determines 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 compliance 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 consultation 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 distribute tobacco products--
``(A) on any military installation (as defined 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 established under
paragraph (1) shall apply requirements (including those for
penalties, suspensions, and revocations) similar to those
required to be implemented 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 distribute tobacco products on
Indian reservations (as defined in section 403(9) of the Indian
Child Protection 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 subchapter and thereafter as required
by the Secretary, each manufacturer of a tobacco product shall submit
to the Secretary a copy of each document in the manufacturer's
possession--
``(1) relating, referring, or pertaining to--
``(A) any health effects in humans or animals,
including addiction, caused by the use of tobacco
products or components of tobacco products;
``(B) the engineering, manipulation or control 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-related civil or criminal
proceeding, judicial or administrative, 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 behalf 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 available 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 unless 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 inspection required pursuant to this section.
``(f) Rule of Construction.--Nothing in this section 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' includes originals
and drafts of any kind of written or graphic matter, regardless
of the manner of production 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 original
(whether by interlineation, receipt stamp, notation, indication of
copies sent or received or otherwise) regardless of whether
`confidential', `privileged', or otherwise, including any paper, book,
account, photograph, blueprint, drawing, agreement, contract,
memorandum, advertising material, letter, telegram, object, report,
record, transcript, study, note, notation, working paper, intra-office
communication, intra-department communication, interdepartment
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, transcribed, 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 recording, whether digital or analog or a combination
of the two.
``(2) Manufacturer of a tobacco product.--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 district 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 subsection (b) may award
costs of litigation, including reasonable attorney's fees, to any party
where the court determines 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 subsection (a)(2). Any
damages awarded to the Federal Government 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 regulatory 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 burdens
generally placed on other agricultural commodity producers. This
section shall not be construed to limit the regulatory requirements
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 inspect facilities. In the case of a refusal of a person to obey a
subpoena, any district court of the United States for the district in
which such person is found, resides or conducts 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 contempt 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 Advertising 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 jurisdiction of the Federal Trade
Commission over the advertising of tobacco products.
TITLE III--YOUTH SMOKING REDUCTION TARGETS AND INCENTIVES TO
REDUCE
YOUTH SMOKING RATES
SEC. 301. PURPOSE.
It is the purpose of this title to encourage the achievement of
reductions in the proportion of underage consumers of tobacco products
through the imposition of additional 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 survey to determine, in accordance with subsection
(b)--
(1) the percentage of all individuals under 18 years of age
who used a tobacco product within the past 30 days; and
(2) the percentage of all individuals under 18 years of age
who identify each brand of tobacco product as the usual brand
smoked or used within the past 30 days.
(b) Exclusion of Certain Ages.--The Secretary shall exclude from
the survey conducted under subsection (a), children under the age of 12
years (or such other lesser age as the Secretary may establish to
strengthen the validity of the survey).
(c) Baseline Level.--
(1) In general.--The baseline level of the child tobacco
product use (referred to in this title as the ``baseline
level'') is the percentage of individuals under 18 years of age
determined to have used the tobacco product in the first annual
performance survey for 1999.
(2) Manufacturers.--The baseline level of tobacco product
use with respect to a manufacturer is the percentage 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 Secretary may, for informational
purposes only, add additional measures to the survey under subsection
(a), conduct 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 conducted 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 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.--Notwithstanding 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 surveys 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 average annual
percentage prevalence of the use of tobacco products by
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 cigarette products (as determined under
section 302(c)); and
(2) with respect to smokeless tobacco products, the average
annual percentage prevalence of the use of smokeless tobacco
products by 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 smokeless tobacco products
(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
respect to each tobacco product shall be as follows:
(1) Cigarettes.--With respect to cigarettes--
(A) the percentage reduction in the percentage use
of cigarettes shall be at least 20 percent for each of
the calendar years 2001 and 2002;
(B) the percentage reduction in the percentage use
of cigarettes shall be at least 40 percent for each of
the calendar years 2003 and 2004;
(C) the percentage reduction in the percentage use
of cigarettes shall be at least 55 percent for each of
the calendar years 2005 through 2007; and
(D) the percentage reduction in the percentage use
of cigarettes shall be at least 67 percent for calendar
year 2008 and each subsequent calendar year.
(2) Smokeless tobacco products.--With respect to smokeless
tobacco products--
(A) the percentage reduction in the percentage use
of smokeless tobacco products shall be at least 15
percent for each of the calendar years 2001 and 2002;
(B) the percentage reduction in the percentage use
of smokeless tobacco products shall be at least 25
percent for each of the calendar years 2003 and 2004;
(C) the percentage reduction in the percentage use
of smokeless tobacco products shall be at least 35
percent for each of the calendar years 2005 and 2007;
and
(D) the percentage reduction in the percentage use
of smokeless tobacco products shall be at least 45
percent for calendar year 2008 and each subsequent
calendar year.
(c) Application to Manufacturer.--With respect to the average
annual percentage prevalence of the use of each manufacturer's brands
of tobacco product by individuals who are under 18 years of age, as
determined on the basis of the annual performance survey conducted
under section 302(a), each manufacturer which manufactured a brand or
brands of tobacco product on or before the date of the enactment of
this Act shall reduce the percentage of children who use such
manufacturer's brand or brands in accordance with the percentage
reductions required under subsection (b).
(d) Report.--Not later than December 31, 2005, the Secretary shall
prepare and submit to the appropriate committees of Congress a report
concerning the progress made in achieving percentage reductions in the
use of tobacco products together with the recommendations, if any, of
the Secretary for stronger reductions in calendar years after 2008.
SEC. 304. NONCOMPLIANCE.
(a) Industry-Wide Penalty.--If, with respect to a year, the
Secretary determines under section 303(a) that the required percentage
reduction for either cigarettes or smokeless tobacco products has not
been achieved as required under section 303(b), the Secretary shall
impose an industry-wide penalty on the manufacturers of such product in
an amount that is equal to $.10 cents for each unit of the tobacco
product involved that is manufactured and distributed for consumer use
in the year following the year in which the noncompliance occurs.
(b) Manufacturer-Specific Penalty.--
(1) In general.--With respect to each manufacturer for a
year, if the Secretary determines under section 303(a) that the
required percentage reduction for either cigarettes or
smokeless tobacco products have not been achieved by such
manufacturer as required under section 303(b), the Secretary
shall impose a penalty on such manufacturer in an amount equal
to
(A) $.10 cents if the noncompliance factor exceeds
0 but does not exceed 10;
(B) $.20 cents if the noncompliance factor exceeds
10 but does not exceed 15;
(C) $.30 cents if the noncompliance factor exceeds
15 but does not exceed 20; and
(D) $.40 cents if the noncompliance factor exceeds
20;
for each unit of a tobacco product that is manufactured and
distributed for consumer use by such manufacturer in the year
following the year for which the determination is made.
(2) Noncompliance factor.--The noncompliance factor of a
manufacturer for a year shall be equal to the percentage
reduction required under section 303(b) for the year less the
actual percentage reduction for the year (as determined under
paragraph (3)).
(3) Actual percentage reduction.--The actual percentage
reduction of a manufacturer shall be equal to 1 less the ratio
of--
(A) the percentage of individuals under 18 years of
age who have been determined to use the manufacturer's
products (as determined under section 302(a)) for the
year involved; and
(B) the baseline level for the manufacturer (as
determined under section 302(c));
multiplied by 100.
(c) De Minimis Rules.--
(1) Exemption.--The Secretary shall not impose 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 the total number of children
determined to have used such tobacco products for the year involved.
(2) Penalty.--If the Secretary determines that--
(A) either--
(i) the tobacco products manufactured by a
manufacturer under the baseline survey
conducted under section 302(c), are used by
less than 0.5 percent of the total number of
children determined to have used such tobacco
products for the year involved; or
(ii) the manufacturer was not manufacturing
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 manufacturer are used by more than
0.5 percent of the total number of children determined
to have used such tobacco products for the year
involved;
the Secretary shall impose a penalty on such manufacturer in an
amount equal to $.40 cents for each unit of the tobacco product
involved that is manufactured and distributed for consumer use
in the year following the year for which the determination is
made.
(d) Noncompliance Fees for Consecutive Violations.--
(1) In general.--If a manufacturer of a tobacco product,
the cigarette industry, or the smokeless tobacco industry fails
to comply with the reductions required under this title in 3 or
4 consecutive years, the noncompliance fee that is required to
be paid by the manufacturer, cigarette industry, or smokeless
tobacco industry, whichever is applicable, under this section
for each unit of tobacco products manufactured by such
manufacturer or industry which is distributed for consumer use
in the year following the year in which the noncompliance
occurs, shall be the amount determined under subsection (b) for
the year multiplied by 2.
(2) Additional noncompliance.--If a manufacturer or
industry described in paragraph (1) fails to comply with the
reductions required under this title--
(A) in 5 or 6 consecutive years, the noncompliance
fee described in such paragraph shall be the amount
determined under subsection (b) for the year multiplied
by 3; and
(B) in 7 or more consecutive years, the
noncompliance fee described in such paragraph shall be
the amount determined under subsection (b) for the year
multiplied by 4.
(e) 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 manufacturer 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 containing not less than 10 units of the product per
package (200 cigarettes per package in the case of cigarettes, and a
corresponding package size for other tobacco products).
(f) Required Generic Packaging in Severe Cases of Repeated
Noncompliance.--Not later than 2 years after the date of enactment of
this Act, the Secretary shall establish regulations to require units
and packages of a manufacturer's tobacco products to have generic
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 packaging in block lettering in black type on a white background.
(g) Payment.--The penalty to be paid by a manufacturer 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.
(h) 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.
(i) Other Products.--The Secretary may promulgate regulations
requiring reductions in the use of other tobacco products by
individuals under 18 years of age. Such regulations shall contain
provisions for the application 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 establish 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 office 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 accompanied by a statement of its basis and
purpose and shall specify the period available for public comment
(hereinafter referred to as the ``comment period''). The notice of
proposed rulemaking shall also state the docket number, 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--
(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 specified in the notice of proposed
rulemaking. Any person 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 requires. 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 documentary
information on the proposed rule received from any
person for inclusion in the 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 docket.--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
comments thereon by other agencies and all written
responses to such written comments by the Secretary
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 review process prior to promulgation
and all such written comments thereon, all documents
accompanying such drafts, and written responses thereto
shall be placed in the docket no later than the date of
promulgation.
(d) Opportunity for Oral Presentation.--In promulgating a rule to
which this section applies--
(1) the Secretary shall allow any person to submit written
comments, data, or documentary information;
(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 presentation;
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--
(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 submitted 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 review 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 specificity during the period
for public comment (including any public hearing) may be raised
during judicial review. If the person raising an objection can
demonstrate to the Secretary that it was impracticable 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 judicial review) and if such objection
is of central relevance 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 effectiveness 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 exceed 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 permitted with respect to such procedural determinations. In
reviewing alleged procedural errors, the court may invalidate 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 promulgation of rules
to which this section applies which requires promulgation less than 6
months after date of proposal 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 purposes of this section.
(j) Effective Date.--The requirements of this section 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 regulations or orders of the Secretary
under this Act, except as otherwise provided for in this title.
(l) No Stay.--In any action respecting the promulgation 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 Administrative 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 expressly
provided for.
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 judicial review of
an annual performance survey, the manufacturer may prevail--
(1) only if the manufacturer shows that the results 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 substantially lesser penalty
if the results of the performance 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 penalties 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.
(2) Manufacturer.--The term ``manufacturer'' includes any
person who imports a finished tobacco product.
TITLE IV--TOBACCO TRANSITION ASSISTANCE TRUST FUND
SEC. 401. TOBACCO TRANSITION ASSISTANCE 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'', consisting of such amounts as may be appropriated or
credited to the Trust Fund.
(b) Transfers to Trust Fund.--There are appropriated and
transferred to the Trust Fund for each fiscal year amounts made
available to the Trust Fund as provided for in section 101(d)(7).
(c) Repayable Advances.--
(1) Authorization.--There are authorized to be appropriated
to the Trust Fund, as repayable advances, such sums as may from
time to time be necessary 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.
(3) Rate of interest.--Interest on an advance 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
current average market yield on outstanding marketable
obligations of the United States with remaining period to
maturity comparable to the anticipated period 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 making expenditures to
provide transition assistance to tobacco producers and tobacco-
growing communities to adjust to reduced demand for tobacco,
including economic development assistance, assistance through
retraining of tobacco producers and tobacco factory workers, or
scholarships for tobacco producers.
(2) Implementation.--Amounts in the Trust Fund shall be
available for making expenditures described in paragraph (1)
only if a law is enacted not later than January 1, 2000, that
specifically prescribes authorized uses of the Trust Fund.
(e) Budgetary Treatment.--This section constitutes budget authority
in advance of appropriations Acts.
(f) Termination of Effectiveness.--The authority provided by this
section terminates effective January 1, 2000, unless a law is enacted
not later than January 1, 2000, that specifically prescribes authorized
uses of the Trust Fund.
TITLE V--STANDARDS TO REDUCE INVOLUNTARY EXPOSURE TO TOBACCO
SMOKE
SEC. 501. STANDARDS TO REDUCE INVOLUNTARY EXPOSURE 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 EXPOSURE TO TOBACCO
SMOKE.
``(a) Definitions.--In this section--
``(1) Public facility.--
``(A) In general.--The term `public facility' 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 include any building or portion thereof while used
as a private residence.
``(B) Exclusions.--The term `public facility' does
not include a portion of a building which is used as a
bar, a facility in which a retailer engages primarily
in the business of selling 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, a restaurant with an indoor seating
capacity of fewer than 50 individuals that is not a
fast food restaurant, or a prison.
``(C) Bar.--The term ``bar'' means any indoor area
that is open to the general public and that is devoted
to the sale and service of alcoholic 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.
``(D) Fast food restaurant.--As used in
subparagraph (B), the term `fast food restaurant' means
any restaurant or chain of restaurants in which
employees primarily distribute food through a customer
pick-up (either at a counter or drive-through window).
The Administrator of the Occupational Safety and Health
Administration may promulgate regulations to clarify
this subparagraph to ensure that the intended inclusion
of workers in establishments catering largely to
individuals under 18 years of age is achieved.
``(2) Responsible entity.--The term `responsible entity'
means, with respect to any public facility, 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 associated with breathing
environmental tobacco smoke, 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 environment
policy for a public facility shall--
``(i) prohibit the smoking of cigarettes,
cigars, and pipes, and any other combustion of
tobacco within the facility and on facility
property within the immediate vicinity of the
entrance to the facility or any air intake vent
(including open windows and doors); and
``(ii) post a clear and prominent notice of
the smoking prohibition in appropriate and
visible locations at the public facility.
``(B) Exception.--The smoke-free environment policy
for a public facility may provide an exception to the
prohibition specified in subparagraph (A) for 1 or more
specially designated smoking areas within a public
facility if such area or areas meet the requirements of
paragraph (3).
``(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 Secretary of Labor,
in consultation with the Administrator 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 promulgated by the Secretary of
Labor, in consultation with the Administrator of the
Environmental Protection Agency; and
``(C) nonsmoking individuals are fully advised 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.
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
responsible 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
smokeless tobacco products within the
facility 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.
``(ii) Facility.--A facility described in
this clause is--
``(I) an elementary or secondary
school (as such term is defined in
section 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
licensed or certified child care
provider provides child care services;
and
``(IV) any recreation or other
facility 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 conveyances
of public transportation (including bus, rail,
aircraft, boat, or any other conveyance
determined appropriate by the Secretary of
Labor), the responsible entity shall--
``(I) adopt and implement on such
conveyances a smoke-free environment
policy that prohibits the smoking of
cigarettes, cigars, and pipes, and any
other combustion of tobacco within the
conveyance and on property affiliated
with the conveyance; 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 responsible entity
that operates a rail carrier providing rail
commuter service may provide an exception to
the prohibition specified in clause (i) with
respect to such service for 1 or more specially
designated smoking cars if such cars meet the
requirements of paragraph (3).
``(c) Enforcement.--To be eligible to receive funds under the
Healthy Kids Act, a State shall make a demonstration 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 environmental 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 section 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, contracts, or otherwise)
expanded research, investigations, experiments and studies,
concerning--
(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 individuals;
(4) the prevention and cure of diseases and illnesses most
associated with the use of tobacco products;
(5) differentials between brands of tobacco products with
respect to health effects or addiction;
(6) the effectiveness of drugs and devices in assisting
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 an application at such time, in
such manner, and containing such information as the Secretary may
require.
(c) Use of Funds.--Amounts received by an individual or entity
under this section shall be used to carry out activities under the
program established under subsection (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 respect 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 program established under
subsection (a) shall be conducted in a manner that ensures that
research will be conducted to investigate the different effects of
tobacco use on minorities and women.
(f) Dissemination of Results.--The Secretary shall establish
procedures for the dissemination of the results 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 SMOKING.
(a) In General.--The Secretary shall establish a program to provide
for the conduct of research (through the provision of grants,
contracts, or otherwise) concerning the cultural, social, behavioral,
neurological and psychological reasons that individuals refrain from
using tobacco 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 containing such information as the Secretary may
require.
(c) Use of Funds.--Amounts received by an individual or entity
under this section shall be used to carry out activities under the
program established under subsection (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 respect 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 program established under
subsection (a) shall be conducted in a manner that ensures that
research will be conducted 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 results of the research
conducted under this section.
(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 Prevention, 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--
(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 in predominantly minority communities, using methods
that are proven and effective.
(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 require, 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 populations who are most at risk
to start smoking;
(2) carry out State-wide college- and university-based
education programs to discourage individuals 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 programs that are
focused on those populations within the community 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 appropriate 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 Secretary on the
effectiveness of the educational approaches implemented by the
State;
(2) adequate records will be maintained with respect to
such assistance;
(3) amounts provided to individuals or entities will be
subject to independent audit; and
(4) the State will involve local public health officials 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 programs 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, adults,
children, women and minorities who have been targeted by tobacco
industry advertising.
(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 Secretary may require.
(c) Use of Funds.--Amounts received by an individual or entity
under this section shall be used to carry out activities under the
programs established under subsection (a). Such amounts may be used to
design and implement 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 program 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
availability and utilization of tobacco use cessation services.
(b) Use of Funds.--Amounts made available under a grant, contract
or cooperative agreement under subsection (a) shall be used for the
planning, establishment, or administration of tobacco use cessation
programs approved in accordance with subsection (c).
(c) Cessation Programs.--Programs receiving assistance under this
section shall provide a range and quality 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
information, the Secretary shall promulgate such additional guidelines
as are necessary to assure the quality, accessibility and cost
effectiveness of services receiving funds under this section.
(d) 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 TOBACCO-RELATED
ILLNESSES.
(a) In General.--The Secretary shall establish a program to provide
assistance and compensation to individuals (and entities providing
services to such individuals) suffering from tobacco-related illnesses
and conditions. Under such program assistance shall be targeted at
individuals who are determined to be uninsured or underinsured 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 assistance
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 Secretary may
require;
(C) provide assurances that amounts received under
the grant will be used in accordance with subsection
(d)(1); and
(D) meet any other requirements determined
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 Secretary may
require;
(B) provide assurances that amounts received under
the grant will be used only in accordance with
subsection (d)(2); and
(C) meet any other requirements determined
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 subsection
(c)(1), to provide treatment for tobacco-related illnesses; or
(2) in the case of an individual eligible under subsection
(c)(2), to pay for the receipt of treatments for tobacco-
related illnesses.
(e) Additional Requirements.--In providing assistance 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 consultation with the
Secretary of State) may provide bilateral assistance, including
technical assistance through the Centers for Disease Control
and Prevention, to foreign countries and multilateral
assistance to assist such countries and Organization in
reducing and preventing the use of tobacco in foreign
countries. Such assistance shall be focused on preventing 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 split equally between bilateral and
multilateral assistance.
(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, especially those that glamorize
and ``Westernize'' tobacco use to young people; and
(C) education about the economic and societal 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 established in the
District of Columbia a private, nonprofit corporation
to be known as the American 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 corporation 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 organizations.--ACT
shall have a limited staff, and, to the maximum extent
practicable, utilize the available experience and
talents of nongovernmental organizations with
specialized experience in health, education, media, and
tobacco.
(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 Representatives;
(ii) the heads of American public health
organizations;
(iii) the heads of American media,
marketing, and other nongovernment institutions
and corporations; and
(iv) individuals active in education,
public health, and other relevant activities.
(E) International advisory council.--An
International Advisory Council consisting of
representatives from key global, regional, 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 available under section 101(d)(5)(C) for the
fiscal year to ACT to carry out this subsection.
(4) Requirements for eligibility for annual 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 compliance.--
Annual payments from the Trust Fund may be made
to ACT under this subsection only if ACT
complies with the requirements specified in
this subsection.
(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 programs which are consistent
with the purposes of this subsection.
(C) Salaries and compensation.--
(i) No other source of compensation.--
Officers and employees of ACT may not receive
any salary or other compensation from any
source other than ACT for services performed
for ACT.
(ii) United states officers and
employees.--An individual who is an officer or
employee of the United States who also serves
on the Board of Directors or as an officer or
employee of ACT, may not receive any
compensation or travel expenses in connection
with services performed for ACT.
(D) Stocks and dividends.--ACT shall not issue any
shares of stock or declare or pay any dividends.
(E) Audits.--
(i) Public accounts.--The accounts of ACT
shall be audited annually in accordance with
generally accepted auditing standards.
(ii) Comptroller general.--The financial
transactions of ACT for each fiscal year may be
audited by the Comptroller General. A report of
each audit shall be made by the Comptroller
General to Congress. A copy of each report
shall be furnished to the President and to ACT
at the time the report is submitted to
Congress.
(F) Recordkeeping.--ACT shall ensure that each
recipient of assistance from ACT under this subsection
keeps such records as may be reasonably necessary to
fully disclose the amount and the disposition by such
recipient of the proceeds of such assistance, the total
cost of the project or undertaking in connection with
which such assistance is given or used, and the amount and nature of
that portion of the cost of the project or undertaking supplied by
other sources, and such other records as will facilitate an effective
audit. ACT shall ensure that it, or any of its duly authorized
representatives, shall have access for the purpose of audit and
examination to any books, documents, papers, and records of each
recipient of assistance from ACT that are pertinent to assistance
provided through ACT under this subsection.
SEC. 625. NATIONAL EVENT SPONSORSHIP PROGRAM.
(a) Establishment.--The Secretary shall establish a program to be
known as the ``National Event Sponsorship Program'' under which the
Secretary may award grants to eligible entities or individuals for the
sponsorship of activities described in subsection (c).
(b) Eligibility.--To be eligible to receive a grant under this
section an entity or individual shall--
(1) prepare and submit to the Secretary an application at
such time, in such manner, and containing such information as
the Secretary may require, including--
(A) a description of the event, activity, team, or
entry for which the grant is to be provided;
(B) documentation that the event, activity, team,
or entry involved was sponsored or otherwise funded by
a tobacco manufacturer or distributor prior to the date
of the application; and
(C) a certification that the applicant is unable to
secure funding for the event, activity, team, or entry
involved from sources other than those described in
paragraph (2);
(2) provide assurances that amounts received under the
grant will be used in accordance with subsection (d); and
(3) meet any other requirements determined appropriate by
the Secretary.
(c) Permissible Sponsorship Activities.--Events, activities, teams,
or entries for which a grant may be provided under this section
include--
(1) an athletic, musical, artistic, or other social or
cultural event or activity that was sponsored in whole or in
part by a tobacco manufacturer or distributor prior to the date
of enactment of this Act;
(2) the participation of a team that was sponsored in whole
or in part by a tobacco manufacturer or distributor prior to
the date of enactment of this Act, in an athletic event or
activity; and
(3) the payment of a portion or all of the entry fees of,
or other financial or technical support provided to, an
individual or team by a tobacco manufacturer or distributor
prior to the date of enactment of this Act, for participation
of the individual in an athletic, musical, artistic, or other
social or cultural event.
(d) Use of Funds.--Amounts received under a grant under this
section shall be used to--
(1)(A) pay the costs associated with the sponsorship of an
event or activity described in subsection (c)(1);
(B) provide for the sponsorship of an individual or team;
(C) pay the required entry fees associated with the
participation of an individual or team in an event or activity
described in subsection (c)(3);
(D) provide financial or technical support to an individual
or team in connection with the participation of that individual
or team in an activity described in subsection (c)(3); or
(E) for any other purposes determined appropriate by the
Secretary; and
(2) promote images or activities to discourage individuals
from using tobacco products or encourage individuals who use
such products to quit.
(e) Allocation of Unexpended Funds.--Amounts available for purposes
of carrying out this section and remaining available at the end of the
10-year period following the date of the establishment of the program
under this section, shall be used as follows:
(1) 50 percent of such amounts shall be used to supplement
amounts available for multi-media campaigns under section 621;
(2) 25 percent of such amounts shall be used to supplement
amounts available for Federal or State tobacco product
enforcement purposes; and
(3) 25 percent of such amounts shall be used to supplement
amounts available for community-based programs under this
subtitle or subtitle B.
(f) Funding.--There shall be made available to carry out this
section an amount equal to 1 percent of the amounts made available
under section 101(d)(5)(C) for a fiscal year.
(g) Sunset.--The program established under this section shall
terminate on the date that is 10-years after the date of enactment of
this Act.
SEC. 626. PROGRAMS TO REDUCE ALCOHOL AND ILLICIT DRUG USE BY
MINORS.
(a) In General.--The Secretary shall establish a program under
which grants are awarded to States to augment funding for existing
programs that are designed to reduce alcohol and illicit drug use by
individuals under 18 years of age and that have been proven effective.
(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 require, 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;
(3) the manner in which the State will monitor the
effectiveness of such programs; and
(4) the manner in which the State program will be targeted
at populations that are most at risk to use alcohol or illicit
drugs.
(c) Use of Funds.--Amounts received by a State under this section
shall be used to expand and enhance existing programs to discourage the
use of alcohol and illicit drugs and to encourage those who use such
products to quit such use.
(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 Secretary on the
effectiveness of the programs implemented by the State;
(2) adequate records will be maintained with respect to
such assistance; and
(3) amounts provided to the individual or entity will be
subject to independent audit.
(e) 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.
TITLE VII--LIABILITY PROTECTION; CONSENT DECREES; NATIONAL
PROTOCOL
Subtitle A--Liability Protection and Attorney Fees
SEC. 701. DISMISSAL OF AND LIMITATIONS ON CIVIL ACTIONS.
(a) State Attorney General Actions.--
(1) Pending actions.--With respect to a State, to be
eligible to receive funds under section 111, the attorney
general for such State shall resolve any civil action seeking
recovery for expenditures attributable to the treatment of
tobacco-related illnesses and conditions that has been
commenced by the State against a manufacturer, distributor, or
retailer of a tobacco product and is pending on the date of
enactment of this Act.
(2) Future actions based on prior conduct.--With respect to
a State, to be eligible to receive funds under section 111, the
attorney general for such State shall agree that the State will
not commence a civil action after the date of enactment of this
Act that is based on the conduct of a participating
manufacturer, distributor or retailer of a tobacco product that
occurred prior to the date of enactment of this Act seeking
recovery for expenditures attributable to the treatment of
tobacco induced illnesses and conditions against such a
manufacturer, distributor or retailer.
(3) Application to local governmental entities.--The
requirements described in paragraphs (1) and (2) shall apply to
civil actions commenced by or on behalf of local governmental
entities for the recovery of costs attributable to tobacco-
related illnesses if such localities are within a State whose
attorney general has elected to resolve actions under paragraph
(1) and enter into the agreement described in paragraph (2).
Such provisions shall not apply to those local governmental
entities that are within a State whose attorney general has not
resolved such actions or entered into such agreements.
(b) State Option for One-Time Opt Out.--
(1) In general.--The Secretary shall establish procedures
under which the attorney general of a State may, not later than
1 year after the date of enactment of this Act, elect not to
resolve an action described in subsection (a)(1) or not enter
into an agreement under subsection (a)(2). A State whose
attorney general that makes such an election shall not be
eligible to receive payments from the Trust Fund under section
111. Procedures under this paragraph shall permit such a State
to make such an election on a one-time basis.
(2) Extension.--In the case of a State that has secured a
judgment against a manufacturer, distributor or retailer of a
tobacco product in an action described in subsection (a)(1)
prior to or during the period described in paragraph (1), and
such judgment has been appealed by such manufacturer,
distributor, or retailer, such period shall be extended during
the pendency of the appeal and for an additional period as
determined appropriate by the Secretary.
(3) Application to certain states.--A State that has
resolved an action described in subsection (a)(1) with a
manufacturer, distributor or retailer of a tobacco product
prior to the date of enactment of this Act may not make an
election described in paragraph (1) if, as part of the
resolution of such action, the State agreed that the enactment
of any national tobacco settlement legislation would supersede
the provisions of the resolution.
(c) Federal Actions.--The Federal Government is barred from
commencing a civil action against a participating manufacturer,
distributor, or retailer of a tobacco product seeking recovery for
expenditures attributable to the treatment of tobacco-related illnesses
associated with the conduct of a manufacturer that occurred prior to
the date of enactment of this Act.
(d) Rules of Construction.--
(1) Post enactment claims.--Nothing in this title shall be
construed to limit the ability of a government, entity, or
individual to commence an action against a participating
manufacturer, distributor or retailer of a tobacco product with
respect to a claim that is based on the conduct of such
manufacturer, distributor or retailer that occurred after the
date of enactment of this Act.
(2) No limitation on individuals.--Nothing in this section
shall be construed to limit the right of an individual to
commence a civil action for past, present, or future conduct by
manufacturers, distributors or retailers of tobacco products.
(e) Definition.--As used in this section, the term ``participating
manufacturer'' means a manufacturer of tobacco products that has
entered into a consent decree under section 711 and that is a signatory
to the Protocol under section 721.
SEC. 702. ATTORNEY'S FEES AND EXPENSES.
(a) Source and Payment of Awards.--In no event shall any award of
the Arbitration Panel established under subsection (b) be paid from,
credited against, or otherwise affect in any way any fee payments that
are required to be made by any participating manufacturer under to
section 102 or under any other provision of this Act. Any such award
shall be paid by participating manufacturers pursuant to an allocation
agreement among such manufacturers.
(b) Arbitration Panel.--
(1) Establishment.--For the purpose of awarding of
attorneys' fees and expenses relating to litigation affected
by, or legal services that resulted in whole or in part in,
this Act, there is established an Arbitration Panel which shall
consist of--
(A) 4 members to be appointed by the Attorney
General in consultation with the Trustees;
(B) 1 member to be appointed by the manufacturers;
(C) 1 member to be appointed by the Attorneys
General of the States; and
(D) 1 member to be appointed by the private
attorneys.
(2) Operation.--
(A) Establishment.--The members of the Arbitration
Panel shall be appointed not later than 30 days after
the effective date of this Act.
(B) Procedures.--Not later than 30 days after the
date on which all members of the Arbitration Panel are
appointed under paragraph (1), the Panel shall
establish the procedures under which the Panel will
operate which shall include--
(i) a requirement that any finding by the
Arbitration Panel must be in writing and
supported by written reasons;
(ii) procedures for the exchanging of
exhibits and witness lists by the various
claimants for awards;
(iii) to the maximum extent practicable,
requirements that proceedings before the Panel
be based on affidavits rather than live
testimony; and
(iv) a requirement that all claims be
submitted to the Arbitration Panel not later
than 3 months after the effective date of this
Act and a determination made by the Panel with
respect to such claims not later than 7 months
after such date of enactment.
(3) Right to petition.--Any individual attorney or group of
attorneys involved in litigation affected by this Act shall
have the right to petition the Arbitration Panel for attorneys'
fees and expenses.
(4) Criteria.--In making any award pursuant to this
section, the Arbitration Panel shall consider the following
criteria:
(A) The time and labor required by the claimant.
(B) The novelty and difficulty of the questions
involved in the action for which the claimant is making
a claim.
(C) The skill requisite to perform the legal
service involved properly.
(D) The preclusion of other employment by the
attorney due to acceptance of the action involved.
(E) Whether the fee is fixed or a percentage.
(F) Time limitations imposed by the client or the
circumstances.
(G) The amount involved and the results obtained.
(H) The experience, reputation, and ability of the
attorneys involved.
(I) The undesirability of the action.
(J) Such other factors as justice may require.
(5) Appeal and enforcement.--The findings of the
Arbitration Panel shall be final, binding, nonappealable, and
payable within 30 days after the date on which the finding is
made public, except that if an award is to be paid in
installments, the first installment shall be payable within
such 30 day period and succeeding installments shall be paid
annually thereafter.
(c) Validity and Enforceability of Private Agreements.--
Notwithstanding any other provision of this Act, nothing in this
section shall be construed to abrogate or restrict in any way the
rights of any parties to mediate, negotiate, or settle any fee or
expense disputes or issues to which this section applies, or to enter
into private agreements with respect to the allocation or division of
fees among the attorneys party to any such agreement.
Subtitle B--Consent Decrees
SEC. 711. CONSENT DECREES.
(a) Requirement.--
(1) In general.--Except as provided in paragraph (2), to be
eligible to receive payments under section 111, a State, and to
be eligible to receive liability protections under subtitle A,
a tobacco manufacturer, shall enter into consent decrees under
this section to be effective on the date of enactment of this
Act.
(2) Good faith efforts.--The limitation described in
paragraph (1) with respect to payments under section 111 shall
not apply to a State if the attorney general of the State
certifies to the Secretary that--
(A) the State has made good faith efforts to enter
into a consent decree in accordance with this subtitle;
and
(B) such State is willing to be bound by such
decree but such decree does not exist because--
(i) of the refusal on the part of a tobacco
manufacturer to enter into such decree; or
(ii) the appropriate court has not entered
the decree even though the parties have lodged
such a decree with the court.
(b) Terms and Conditions.--
(1) In general.--The consent decrees described in
subsection (a) shall resolve the State action (or potential
action in the case of a manufacturer that was not a defendant
in a State action but that desires to become a participating
manufacturer or in the case of a State that does not have a
suit pending against a manufacturer) for claims associated with
the conduct of the manufacturer that occurred prior to the date
of enactment of this Act.
(2) General terms and conditions.--The terms and conditions
contained in the consent decrees described in subsection (a)
shall contain the following provisions relating to--
(A) restrictions on tobacco product advertising and
marketing and youth access to such products;
(B) the termination, establishment, and operation
of trade associations;
(C) the disclosure of tobacco smoke constituents;
(D) the disclosure of nontobacco constituents and
ingredients found in tobacco products;
(E) the disclosure of existing and future documents
relating to health, toxicity, and addiction related to
tobacco product usage;
(F) the obligation of manufacturers to make
payments for the benefit of States, private litigants
and the general public;
(G) the obligation of manufacturers to enter into
the Protocol under subtitle C;
(I) the obligation of manufacturers to interact
only with distributors and retailers that operate in
compliance with the applicable provisions of Federal,
State, or local law regarding the marketing and sale of
tobacco products;
(J) requirements for warnings, labeling, and
packaging of tobacco products;
(K) the resolution of pending litigation (or
potential future litigation for misconduct that
occurred prior to the date of enactment of this Act) as
required under subtitle A and as agreed to by the
parties to the decree; and
(L) any other matter determined appropriate by the
Secretary or the parties involved.
(3) Limitations.--The terms and conditions contained in the
consent decrees described in subsection (a) shall not contain
provisions relating to--
(A) tobacco product design, performance, or
modification;
(B) manufacturing standards and good manufacturing
practices;
(C) testing and regulation with respect to toxicity
and ingredients approval; and
(D) the tobacco usage reduction requirement
described in section 303.
(4) Enforceability.--The terms and conditions contained in
the consent decrees described in subsection (a) shall be
enforceable by the signatories, as well as the Attorney
General, and shall include a provision that prohibits
signatories from challenging the enforceability of the consent
decrees.
(5) Construction.--The terms and conditions contained in
the consent decrees described in subsection (a) shall provide
that the terms of the decree will be construed in a manner that
is consistent with the provision of this Act.
(c) Approval.--
(1) In general.--Prior to the entry of a consent decree by
a court under this section the court must find that the
provisions of the consent decree--
(A) have been approved by the Secretary and the
Attorney General;
(B) are fair and reasonable; and
(C) are in the public interest.
(2) Determination by secretary.--To approve a consent
decree under paragraph (1)(A), the Secretary and the Attorney
General shall have determined whether the provisions of the
decree are consistent with this Act and the Food, Drug and
Cosmetic Act or the rules and regulations promulgated under
such Acts.
(3) Notice to public.--With respect to the approval of a
consent decree under this section, the court shall ensure that
the public has been given not less than 60 days notice of the
filing of the decree by the parties and any objections thereto
must be addressed to the satisfaction of the court.
(d) Enforcement.--The provisions of a consent decree entered under
this section shall remain in effect and enforceable in the court in
which the decree is entered, even if the underlying action is
dismissed.
SEC. 712. NON-PARTICIPATING MANUFACTURERS.
With respect to a manufacturer that elects not to enter into a
consent decree under section 711, such manufacturer shall not be
eligible to receive the liability protections under section 701.
Subtitle C--National Tobacco Control Protocol
CHAPTER 1--ESTABLISHMENT
SEC. 721. NATIONAL TOBACCO CONTROL PROTOCOL.
(a) Requirement.--To be eligible to receive the liability
protections provided for in subtitle A, each tobacco manufacturer to
which this Act applies shall, not later than 90 days after the date of
enactment of this Act, enter into a National Tobacco Control Protocol
with the Attorney General of the United States and the attorney general
of each State that does not elect to opt out under section 701(b)(1).
(b) Terms and Conditions.--The Protocol referred to in subsection
(a) shall be--
(1) developed by the Attorney General, in consultation with
the Secretary, the State attorneys' general, the Federal Trade
Commission and other individuals determined appropriate by the
Attorney General, as a binding and enforceable contract that
embodies the terms of this subtitle; and
(2) designed to be enforceable in Federal or State courts
as provided for in this subtitle.
(c) Contracts.--As part of the Protocol under this section, a
manufacturer shall agree, with respect to any contract entered into by
the manufacturer with an entity that is a distributor or retailer of
tobacco products, to include in such contract as a term and condition a
requirement that such distributor or retailer comply with the
provisions of the Protocol.
CHAPTER 2--TERMS AND CONDITIONS
SEC. 725. APPLICATION OF CHAPTER.
The provisions of this chapter shall be considered as part of the
Protocol.
SEC. 726. AGREEMENT TO PROHIBIT CERTAIN ADVERTISING.
(a) Prohibition on Outdoor Advertising.--
(1) In general.--No manufacturer, distributor, or retailer
may use any form of outdoor tobacco product advertising,
including billboards, posters, or placards.
(2) Stadia and arenas.--Except as otherwise provided in
this Act, a manufacturer, distributor, or retailer shall not
advertise tobacco products in any arena or stadium where
athletic, musical, artistic or other social or cultural events
or activities occur.
(b) Prohibition on Use of Human Images and Cartoons.--No
manufacturer, distributor, or retailer may use a human image or a
cartoon character or cartoon-type character in its advertising,
labeling or promotional material with respect to a tobacco product.
(c) Prohibition on Advertising on the Internet.--No manufacturer,
distributor, or retailer may use the Internet to advertise tobacco
products unless such an advertisement is inaccessible in or from the
United States.
(d) Prohibition on Point of Sale Advertising.--
(1) In general.--Except as otherwise provided in this
subsection, no manufacturer, distributor, or retailer may use
point of sale advertising of tobacco products.
(2) Adult only stores and tobacco outlets.--Paragraph (1)
shall not apply to point of sale advertising at adult only
stores and tobacco outlets.
(3) Permissible advertising.--
(A) In general.--Each manufacturer of tobacco
products may display not more than 2 separate point of
sale advertisements in or at each location at which
tobacco products are offered for sale.
(B) Retailers.--No manufacturer, distributor, or
retailer may enter into any arrangement with a retailer
to limit the ability of the retailer to display any
form of permissible point of sale advertisement or
promotional material originating with another
manufacturer, distributor, or retailer.
(4) Limitations.--
(A) In general.--A point of sale advertisement
permitted under this subsection shall be comprised of a
display area that is not larger than 576 square inches
(either individually or in the aggregate) and shall
consist only of black letters on a white background or
other recognized typographical marks. Such
advertisement shall not be attached to nor located
within 2 feet of any fixture on which candy is
displayed for sale.
(B) Audio and video formats.--Audio and video
advertisements otherwise permitted under this Act may
be distributed to individuals who are 18 years of age
or older at point of sale but may not be played or
viewed at such point of sale.
(C) Display fixtures.--Display fixtures in the form
of signs consisting of brand name and price and not
larger than 2 inches in height are permitted.
(5) Definition.--For purposes of this subsection, the term
``point of sale advertising'' means all printed or graphical
materials bearing the brand name (alone or in conjunction with
any other word), logo, motto, selling message, recognizable
color or pattern of colors, or any other indicia of product
identification similar or identical to those used for tobacco
products, which, when used for its intended purpose, can
reasonably be anticipated to be seen by customers at a location
at which tobacco products are offered for sale.
SEC. 727. CONSENSUAL RESTRICTIONS.
(a) Restriction on Product Names.--A manufacturer shall not use a
trade or brand name of a nontobacco product as the trade or brand name
for a cigarette or smokeless tobacco product, except for a tobacco
product whose trade or brand name was on both a tobacco product and a
nontobacco product that were sold in the United States on January 1,
1998.
(b) Advertising Limit Actions.--
(1) In general.--A manufacturer, distributor, or retailer
may in accordance with this Act, disseminate or cause to be
disseminated advertising or labeling which bears a tobacco
product brand name (alone or on conjunction with any other
word) or any other indicia of tobacco product identification
only in newspapers, in magazines, in periodicals or other
publications (whether periodic or limited distribution), on
billboards, posters and placards in accordance with section
726(a), in nonpoint of sale promotional material (including
direct mail), in point-of-sale promotional material, and in
audio or video formats delivered at a point-of-sale.
(2) Limitation.--A manufacturer, distributor, or retailer
that intends to disseminate, or to cause to be disseminated,
advertising or labeling for a tobacco product in a medium that
is not described in paragraph (1) shall notify the Secretary
not less than 30 days prior to the date on which such medium is
to be used. Such notice shall describe the medium and discuss
the extent to which the advertising or labeling may be seen by
individuals who are under 18 years of age.
(3) Action by secretary.--Not later than 30 days after the
date on which the Secretary receives a notice under paragraph
(2), the Secretary shall make a determination with respect to
the action to be taken concerning such notice.
(c) Restriction on Placement in Entertainment Media.--
(1) In general.--No payment shall be made by any
manufacturer, distributor, or retailer for the placement of any
tobacco product or tobacco product package or advertisement--
(A) as a prop in any television program or motion
picture produced for viewing by the general public; or
(B) in a video or on a video game machine.
(2) Video game.--The term ``video game'' means any
electronic amusement device that utilizes a computer,
microprocessor, or similar electronic circuitry and its own
cathode ray tube, or is designed to be used with a television
set or a monitor, that interacts with the user of the device.
(3) Video.--The term ``video'' means an audiovisual work
produced for viewing by the general public, such as a
television program, a motion picture, a music video, and the
audiovisual display of a video game.
(d) Restrictions on Glamorization of Tobacco Products.--No direct
or indirect payment shall be made, or consideration given, by any
manufacturer, distributor, or retailer to any entity for the purpose of
promoting the image or use of a tobacco product through print, film or
broadcast media that appeals to individuals under 18 years of age or
through a live performance by an entertainment artist that appeals to
such individuals.
SEC. 728. AGREEMENT ON FORMAT AND CONTENT REQUIREMENTS FOR
LABELING AND
ADVERTISING.
(a) In General.--Except as provided in subsections (b) and (c),
each manufacturer, distributor, or retailer advertising or causing to
be advertised, disseminating or causing to be disseminated, any
labeling or advertising for a tobacco product shall use only black text
on a white background.
(b) Certain Advertising Excepted.--
(1) In general.--Subsection (a) shall not apply to
advertising--
(A) in any facility where vending machines and
self-service displays are permitted under this title if
the advertising involved--
(i) is not visible from outside of the
facility; and
(ii) is affixed to a wall or fixture in the
facility;
(B) that appears in any publication (whether
periodic or limited distribution) that is an adult
publication.
(2) Adult publication.--For purposes of paragraph (1)(B),
the term ``adult publication'' means a newspaper, magazine,
periodical, or other publication--
(A) whose readers under 18 years of age constitute
15 percent or less of the total readership as measured
by competent and reliable survey evidence; and
(B) that is read by fewer than 2,000,000
individuals who are under 18 years of age as measured
by competent and reliable survey evidence.
(c) Audio or Video Formats.--Each manufacturer, distributor or
retailer advertising or causing to be advertised any advertising for a
tobacco product in an audio or video format shall comply with the
following:
(1) With respect to an audio format, the advertising shall
be limited to words only with no music or sound effects.
(2) With respect to a video format, the advertising shall
be limited to static black text only on a white background. Any
audio with the video advertising shall be limited to words only
with no music or sound effects.
SEC. 729. AGREEMENT TO BAN ON NONTOBACCO ITEMS AND SERVICES,
CONTESTS
AND GAMES OF CHANCE, AND SPONSORSHIP OF EVENTS.
(a) Ban on All Non-Tobacco Merchandise.--No manufacturer, importer,
distributor, or retailer shall market, license, distribute, sell or
cause to be marketed, licensed, distributed or sold any item (other
than tobacco products) or service, which bears the brand name (alone or
in conjunction with any other word), logo, symbol, motto, selling
message, recognizable color or pattern of colors, or any other indicia
of product identification similar or identifiable to those used for any
brand of tobacco products.
(b) Gifts, Contests, and Lotteries.--No manufacturer, distributor,
or retailer shall offer or cause to be offered to any person purchasing
tobacco products any gift or item (other than a tobacco product) in
consideration of the purchase of such products, or to any person in
consideration of furnishing evidence, such as credits, proofs-of-
purchase, or coupons, of such a purchase.
(c) Sponsorship.--
(1) In general.--No manufacturer, distributor, or retailer
shall sponsor or cause to be sponsored any athletic, musical,
artistic or other social or cultural event, or any entry or
team in any event, in which the brand name (alone or in
conjunction with any other word), logo, motto, selling message,
recognizable color or pattern of colors, or any other indicia
of product identification similar or identical to those used
for tobacco products is used.
(2) Use of corporate name.--A manufacturer, distributor, or
retailer may sponsor or cause to be sponsored any athletic,
musical, artistic or other social or cultural event in the name
of the corporation which manufactures the tobacco product if--
(A) both the corporate name and the corporation
were registered and in use in the United States prior
to January 1, 1995; and
(B) the corporate name does not include any brand
name (alone or in conjunction with any other word),
logo, symbol, motto, selling message, recognizable
color or pattern of colors, or any other indicia or
product identification identical or similar to, or
identifiable with, those used for any brand of tobacco
products.
CHAPTER 3--ENFORCEMENT
SEC. 731. FEDERAL ENFORCEMENT OF THE PROTOCOL.
(a) Actions.--The Attorney General may bring an action for the
enforcement, or to restrain any breach, of the Protocol in the United
States District Court for the District of Columbia or in the district
court of the United States for the district in which the breach
occurred.
(b) Remedy.--In any action under subsection (a), the district court
involved--
(1) shall restrain the conduct that is the subject of the
breach of the Protocol;
(2) shall order specific performance of the obligations set
forth in the Protocol;
(3) may order civil penalties against any manufacturer who
violates a requirement of the Protocol in an amount not more
than $250,000 per violation per day; and
(4) with respect to officers of manufacturers who knowingly
violate the protocol, may impose appropriate criminal
penalties, including incarceration.
(c) Contracts With State Agencies.--The Secretary may award grants
to or enter into contracts with an agency of any State to assist in the
enforcement of the provisions of the Protocol.
(d) Action by Attorney General.--With respect to the funding of any
activities under subsection (a), the Attorney General shall use amounts
available in the Trust Fund under section 102. If the Attorney General
determines that amounts available in the Trust Fund are insufficient,
the Attorney General may use amounts available for the activities of
the Department of Justice.
SEC. 732. STATE ENFORCEMENT OF THE PROTOCOL.
(a) Civil Action.--The attorney general of a State may bring an
action for the enforcement, or to restrain a breach, of the Protocol if
the alleged violation that is the subject of the proceedings occurred
in that State.
(b) Concurrent Jurisdiction.--Both Federal and State courts shall
have jurisdiction over a proceeding described in subsection (a). If
such a proceeding is commenced in a district court of the United
States, the court shall take into consideration the size and scope of
any State penalties that have been applied for the identical
violations.
(c) Remedies.--In any proceeding described in subsection (b) the
remedies available shall be those described in section 731(b).
SEC. 733. PRIVATE ENFORCEMENT OF PROTOCOL.
(a) In General.--A manufacturer may seek a declaration of the
rights and obligations of the manufacturer under the Protocol by filing
an action pursuant to section 2201 of title 28, United States Code.
(b) Civil Action.--Any person may bring a civil action against a
manufacturer to enforce, or restrain breaches of, the Protocol by such
manufacturer, except that--
(1) no such action may be commenced or maintained if the
Secretary has settled a proceeding pertaining to such alleged
breach; and
(2) the court, in any such action, shall restrain conduct
in breach of the Protocol and order specific performance of the
obligations set forth in the Protocol, and may award damages
which at a minimum will recover any economic benefit derived as
a result of the noncompliance involved together with an amount
awarded as a suitable penalty associated with such breach.
Any damages awarded under this subsection shall be remitted to the
Treasury.
(c) Right of Intervention.--In any proceeding described in section
731(a) or 732(a), any manufacturer may intervene as a matter of right.
TITLE VIII--MISCELLANEOUS PROVISIONS
SEC. 801. PROHIBITION ON USE OF FUNDS TO FACILITATE THE EXPORTATION
OR
PROMOTION OF TOBACCO.
(a) In General.--Notwithstanding any other provision of law, no
funds made available by appropriations or otherwise made available may
be used by any officer, employee, department, or agency of the United
States--
(1) to promote or encourage the export, reexport, sale,
manufacture, advertising, promotion, distribution, or use of
tobacco or tobacco products to or in a foreign country; or
(2) to seek, through negotiation or otherwise, the removal
or reduction by any foreign country of any restriction or
proposed restriction in that country on the importation,
export, reexport, sale, manufacture, advertising, promotion,
distribution, packaging, labeling, use, content, imposition of
tariffs, or taxation, of tobacco or tobacco products.
(b) Exception.--Subsection (a)(2) shall not apply to any
restriction or proposed restriction by a foreign country if--
(1) the restriction is applied in a manner which
constitutes a means of arbitrary or unjustifiable
discrimination between countries;
(2) the Secretary of Commerce certifies in writing to
Congress that the restriction is being applied in a manner that
constitutes a means of arbitrary or unjustifiable
discrimination between countries; and
(3) the Secretary of Health and Human Services certifies to
Congress in writing that the restriction is not a reasonable
means of protecting the public health.
(c) Definition.--In this section, the term ``arbitrary or
unjustifiable discrimination'' means a restriction or proposed
restriction by a foreign country that--
(1) is arbitrary or unjustifiable; and
(2) does not adhere to the principle of national treatment
and applies less favorable treatment to goods that are imported
into that country than the country applies to like goods that
are the product, growth, or manufacture of that country.
SEC. 802. WHISTLEBLOWER PROTECTIONS.
(a) Prohibition of Reprisals.--An employee of any manufacturer,
distributor, or retailer of a tobacco product may not be discharged,
demoted, or otherwise discriminated against (with respect to
compensation, terms, conditions, or privileges of employment) as a
reprisal for disclosing to an employee of the Food and Drug
Administration, the Department of Health and Human Services, the
Department of Justice, or any State or local regulatory or enforcement
authority, information relating to a violation of law related to this
Act or a State or local law that furthers the purposes of this Act.
(b) Enforcement.--Any employee or former employee who believes that
such employee has been discharged, demoted, or otherwise discriminated
against in violation of subsection (a) may file a civil action in the
appropriate United States district court before the end of the 2-year
period beginning on the date of such discharge, demotion, or
discrimination.
(c) Remedies.--If the district court determines that a violation
has occurred, the court may order the manufacturer, distributor, or
retailer involved to--
(1) reinstate the employee to the employee's former
position;
(2) pay compensatory damages; or
(3) take other appropriate actions to remedy any past
discrimination.
(d) Limitation.--The protections of this section shall not apply to
any employee who--
(1) deliberately causes or participates in the alleged
violation of law or regulation; or
(2) knowingly or recklessly provides substantially false
information to the Food and Drug Administration, the Department
of Health and Human Services, the Department of Justice, or any
State or local regulatory or enforcement authority.
(e) Application of False Claims Act.--Section 3730(d) of title 31,
United States Code, shall apply with respect to any employee to which
this section applies if the disclosure of such employee results in a
payment of any fee or fine to the Federal Government by the
manufacturer, distributor or retailer involved, regardless of whether
such employee ever commenced an action concerning the disclosure.
SEC. 803. PROHIBITIONS RELATING TO TOBACCO PRODUCTS AND CHILDREN.
(a) In General.--Chapter VIII of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 381 et seq.) is amended by adding at the end
the following:
``SEC. 804. PROHIBITION ON SALE OR DISTRIBUTION OF TOBACCO PRODUCTS
TO
CHILDREN.
``(a) General Rule.--It shall be unlawful for any domestic concern
or any officer, director, employee, or agent of such concern to make
use of the mails or any means or instrumentality of interstate commerce
to cause or contribute, either directly or through a foreign
subsidiary, joint venture, affiliate, or licensee, to--
``(1) the sale or distribution of tobacco products in a
foreign country to children; or
``(2) the advertising or promotion of tobacco products in a
foreign country in a manner that appeals to children.
``(b) Interpretation.--For purposes of subsection (a), the
advertising or promotion of tobacco products shall be considered to be
in a manner that appeals to children if the advertising or promotion is
carried out in a manner that would not be permissible under the
regulations referred to in section 202 of the Healthy Kids Act if it
occurred in the United States.
``SEC. 805. LABELING.
``It shall be unlawful for any domestic concern or any officer,
director, employee, or agent of such concern, either directly or
through a foreign subsidiary, joint venture, affiliate, or licensee, to
make use of the mails or any means or instrumentality of interstate
commerce to cause or contribute to the export from the United States or
the sale or distribution in, or export from, any other country any
tobacco product the package of which does not contain a warning label
that--
``(1) is in the primary language or languages of the
country in which the tobacco product is sold or distributed to
consumers; and
``(2) except for the requirement of paragraph (1)--
``(A) complies with Federal requirements for
labeling of similar tobacco products manufactured,
imported, or packaged for sale or distribution in the
United States; or
``(B) complies with the labeling requirements of
the foreign country in which the product is sold or
distributed to consumers and which labeling
requirements the Secretary determines are substantially
similar to Federal requirements and are adequately
enforced by such country.''.
(b) Enforcement.--Section 301 of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 331) as amended by section 203(e), is further
amended by adding at the end the following:
``(cc) To carry out an act made unlawful by section 804 or 805.
(c) Reward.--Section 303(b)(5) of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 333)(b)(5)) is amended by adding at the end the
following: ``If a person provides information leading to the
institution of a criminal proceeding against, and conviction of, a
person for a violation of section 301(cc), such person shall be
entitled to one-half of the criminal fine imposed and collected for
such violation but not more than $125,000.''.
(d) Definitions.--Section 201 of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 321) as amended by section 203(a)(3), is
further amended by adding at the end the following:
``(ll) The term `domestic concern' means--
``(1) any individual who is a citizen, national, or
resident of the United States; and
``(2) any corporation, partnership, association, joint-
stock company, business trust, unincorporated organization, or
sole proprietorship which has its principal place of business
in the United States or which is organized under the laws of a
State of the United States or a territory, possession, or
commonwealth of the United States.
``(mm) The term `children' means an individual under the age of
18.''.
SEC. 804. PRESERVATION OF STATE AND LOCAL AUTHORITY.
Except as otherwise provided for in this Act (or an amendment made
by this Act), nothing in this Act shall be construed as prohibiting a
State or political subdivision of a State from imposing requirements,
prohibitions, penalties or other measures, whether by statute, rule,
regulation, ordinance, judicial decree, consent decree, or settlement
agreement, to further the purposes of this Act that are in addition to
the requirements, prohibitions, or penalties required under this Act.
Nothing in this Act (or an amendment made by this Act) shall preclude
or deny the right of any State or political subdivision of a State to
adopt or enforce any requirements, prohibitions, or penalties relating
to tobacco products to the extent that such requirements, prohibitions
or penalties are not less stringent than those required under this Act
(or amendments).
SEC. 806. SEVERABILITY.
If any provision of this Act, an amendment made by this Act, or the
application of such provision or amendment to any person or
circumstance is held to be unconstitutional, the remainder of this Act,
the amendments made by this Act, and the application of the provisions
of such to any person or circumstance shall not be affected thereby.
TITLE IX--PROVISIONS RELATING TO NATIVE AMERICANS
SEC. 901. PROVISIONS RELATING TO NATIVE AMERICANS.
(a) In General.--The provisions of this Act (or an amendment made
by this Act) shall apply to the manufacture, distribution, and sale of
tobacco products in any area within the jurisdiction of an Indian tribe
or tribal organization.
(b) Religious Practice Exception.--In recognition of the religious,
traditional and ceremonial uses of tobacco and tobacco products by many
Indian tribes and the members of such tribes, nothing in this Act (or
an amendment made by this Act) shall be construed to infringe upon the
rights of such tribes or members to transfer, acquire, possess, or use
any tobacco or tobacco products for such purposes. The preceding
sentence shall only be construed to apply to those quantities of
tobacco products necessary to fulfill recognized religious, traditional
or ceremonial purposes and not to permit the general marketing of
tobacco products not in compliance with chapter IX of the Federal Food,
Drug and Cosmetic Act.
(c) Payments to Trust Fund.--Any Indian tribe or tribal
organization that engages in the manufacturer of tobacco products shall
be subject to liability for an assessment under section 102.
(d) Application of Federal Food, Drug and Cosmetic Act
Requirements.--
(1) In general.--The Secretary, in consultation with the
Secretary of the Interior, shall promulgate regulations to
provide for the application of any requirements of the Food,
Drug and Cosmetic Act with respect to tobacco products
manufactured, distributed, or sold in any area within the
jurisdiction of an Indian tribe or tribal organization as
appropriate to comply with subsections (a) and (b).
(2) Eligibility for assistance.--Under the regulations
promulgated under paragraph (1), the Secretary, after
consultation with the Secretary of the Interior, may provide
assistance to an Indian tribe or tribal organization in meeting
and enforcing the requirements under such regulations if--
(A) the tribe or organization has a governing body
that has powers and carries out duties that are similar
to the powers and duties of State or local governments
and requests such assistance by application to the
Secretary;
(B) the functions to be exercised through the use
of such assistance relate to activities within the
exterior boundaries of the reservation or other areas
within the jurisdiction of the tribe involved; and
(C) the tribe or organization is reasonably
expected to be capable of carrying out the functions
required by the Secretary.
(3) Determinations.--The Secretary, in consultation with
the Secretary of the Interior, shall make determinations
concerning the eligibility of an Indian tribe or tribal
organization for assistance under regulations under paragraph
(1) not later than 90 days after the date on which such tribe
or organization submits an application for such assistance.
(4) Implementation by secretary.--If the Secretary
determines that the Indian tribe or tribal organization is not
willing or qualified to administer the requirements of the
regulations promulgated under this subsection, the Secretary,
in consultation with the Secretary of the Interior, shall
implement and enforce such regulations on behalf of the tribe
or organization.
(e) Retail Licensing Requirements.--
(1) In general.--The requirements of section 577 of the
Federal Food, Drug and Cosmetic Act (as added by section 204 of
this Act) shall apply to retailers that sell tobacco products
in any area within the jurisdiction of an Indian tribe or
tribal organization.
(2) Self-regulation.--In order to be eligible for funds
under subsection (f), an Indian tribe or tribal organization
shall implement a tribal licensing program within the exterior
boundaries of the reservation and other areas within the
jurisdiction of the tribe consistent with the regulations
promulgated under section 577 of the Federal Food, Drug and
Cosmetic Act.
(3) Implementation by secretary.--If the Secretary, in
consultation with the Secretary of the Interior, determines
that the Indian tribe or tribal organization is not qualified
to administer the requirements of section 577 of the Federal
Food, Drug and Cosmetic Act, the Secretary, in consultation
with the Secretary of the Interior, shall implement such
requirements on behalf of the tribe or organization.
(f) Eligibility for Public Health Payments.--
(1) In general.--For each fiscal year the Secretary shall
pay to each Indian tribe that has an approved tribal anti-
smoking plan a tribal grant for the fiscal year in an amount
equal to the amount determined under paragraph (3), and shall
reduce the amounts payable under section 111 to any State in
which the service area or areas of the Indian tribe are located
by the amount so determined.
(2) Plan.--To be eligible to receive a payment under
paragraph (1), an Indian tribe shall prepare and submit to the
Secretary for approval an anti-smoking plan and shall otherwise
meet the requirements of subsection (e).
(3) Amount determined.--The amount of any funds for which
an Indian tribe is eligible under paragraph (1) shall be
determined by the Secretary based on the ratio of the total
number of Indians residing on such tribe's reservation or in
areas within the jurisdiction of the tribe in the State to the
total population of the State multiplied by the amount
allocated to State under section 111.
(4) Use.--Amounts provided to a tribe or organization under
this paragraph shall be used to reimburse the tribe for
smoking-related health expenditures, to further the purposes of
this Act, and in accordance with a plan submitted by the tribe
or organization and approved by the Secretary as being in
compliance with this Act. Tribes and tribal organizations shall
have the flexibility to utilize such amounts to meet the unique
health needs of such tribes within the context of tribal health
programs if such programs meet the fundamental Federal requirements
under this Act as determined by the Secretary.
(5) Reallotment.--Any amounts set-aside and not expended
under this paragraph shall be reallotted among other eligible
tribes and organizations.
(g) Obligation of Manufacturers.--A participating manufacturer
shall not engage in any activity in an area within the jurisdiction of
an Indian tribe or tribal organization that is prohibited under the
Protocol.
(h) Indian Health Service.--Amounts made available under section
101(d)(5)(B) shall be provided to the Indian Health Service to be used
for anti-tobacco-related consumption and cessation activities
including--
(1) clinic and facility design, construction, repair,
renovation, maintenance and improvement;
(2) provider services and equipment;
(3) domestic and community sanitation associated with
clinic and facility construction and improvement;
(4) inpatient and outpatient services; and
(5) other programs and services provided through the Indian
Health Service or through tribal contracts, compacts, grants or
cooperative agreements with the Indian Health Service and which
are deemed appropriate to raising the health status of Indians.
(i) Preemption.--
(1) General preemption.--Except as otherwise provided for
in this section, nothing in this Act shall be construed as
prohibiting an Indian tribe or tribal organization from
imposing requirements, prohibitions, penalties or other
measures to further the purposes of this Act that are in
addition to the requirements, prohibitions, or penalties
required under this Act.
(2) Public exposure to smoke.--Nothing in the amendment
made by title V shall be construed to preempt or otherwise
affect any Indian tribe or tribal organization rule or practice
that provides greater protection from the health hazards of
environmental tobacco smoke.
(3) Native americans.--A State may not impose obligations
or requirements relating to the application of this Act to
Indian tribes and tribal organizations.
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