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S. 1415 Amdt.  

AMENDMENT NO.   

CAL. NO.     

Purpose: Further modification of the Commerce Committee amendment.

IN THE SENATE OF THE UNITED STATES_ 105 th  Cong., 2 d  Sess.

S. 1415,  105 th  Congress, 2 d  Session

May  __, 1998

(  ) Referred to the Committee on ______ and ordered to be printed

(  ) Ordered to lie on the table and to be printed

Intended  to be proposed by Mr.  McCain  (for himself and Mr.  Hollings)

Viz:  Strike out all after the enacting clause and insert the following:



SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

 (a)  Short Title._ This Act may be cited as the ``National Tobacco Policy and
Youth Smoking
Reduction Act''.

 (b)  Table of Contents._ The table of contents for this Act is as follows:

[The following table of contents is not accurate.  A revised version will be
provided]





Sec. 1. Short title; table of contents.

Sec. 2. Findings.

Sec. 3. Purpose. 

Sec. 4. Scope and effect.

Sec. 5. Non-preemption of more restrictive laws.

Sec. 6. Definitions.

Sec. 7. Notification if youthful cigarette smoking restrictions increase youthful
pipe and cigar
smoking.

Sec. 8. Liability limitations disappear if manufacturers challenge advertising
limits.

Sec. 9. FTC jurisdiction not affected.

Sec. 10. Congressional review provisions.
Title I_Regulation of the Tobacco Industry

Subtitle A_Jurisdiction, Etc., of Food and Drug Administration

Sec. 101. Amendment of Federal Food, Drug, and Cosmetic Act of 1938. 
``Chapter IX_Tobacco Products

``Sec. 901. FDA authority over tobacco products
``Sec. 902. Adulterated tobacco products.
``Sec. 903. Misbranded tobacco products.
``Sec. 904. Submission of health information to the Secretary.
``Sec. 905. Registration. 
``Sec. 906. General provisions respecting control of tobacco products. 
``Sec. 907. Performance standards. 
``Sec. 908. Notification and other remedies 
``Sec. 909. Records and reports on tobacco products. 
``Sec. 910. Premarket review of certain tobacco products.
``Sec. 911. Judicial review.
``Sec. 912. Postmarket surveillance 
``Sec. 913. Reduced risk tobacco products.
``Sec. 914. Preservation of State and local authority.
``Sec. 915. Tobacco Products Scientific Advisory Committee.
``Sec. 916. Equal treatment of retail outlets.
Sec. 102. Conforming and other amendments to general provisions.
Subtitle B_Advertising

Sec. 121. Advertising provisions in protocol.
Sec. 122. Tobacco product labeling and advertising .
Sec. 123. Point-of-sale restrictions.
Title II_Reductions in Underage Tobacco Use

Subtitle A_Underage Use 

Sec. 201. Goals for reducing underage tobacco use.
Sec. 202. Look-back assessment.
Sec. 203. Substantial non-attainment of required reductions.
Sec. 204. Definitions.
Subtitle B_State Enforcement Incentives

Sec. 211. Compliance bonus fund.
Sec. 212. Block grants.
Sec. 213. State enforcement incentives.
Sec. 214. Conforming change.
Subtitle C_Other Programs

Sec. 221. National smoking cessation program.
Sec. 222. National tobacco-free public education program.
Sec. 223. National community action program.
Sec. 224. State retail licensing program.
Title III_Tobacco Product Warnings and Smoke Constituent Disclosure

Subtitle A_Product Warnings, Labeling and Packaging

Sec. 301. Cigarette label and advertising warnings. 
``Sec. 4. Labeling.

Sec. 302. Authority to revise cigarette warning label statements.
Sec. 303. Smokeless tobacco labels and advertising warnings.
``Sec. 3. Smokeless tobacco warning.

Sec. 304. Authority to revise smokeless tobacco product warning
labelstatements.

Sec. 305. Tar, nicotine, and other smoke constituent disclosure to thepublic.

Subtitle B_Testing and Reporting of Tobacco Product Smoke Constituents

Sec. 311. Regulation requirement.
Title IV_National Tobacco Settlement Trust Fund

Subtitle A_General Payment Provisions

Sec. 401. Establishment of trust fund. 
Sec. 402. State litigation settlement account.
Sec. 403. Payments by industry
Sec. 404. Adjustments.
Sec. 405. Tax treatment of payments.
Sec. 406. Enforcement for nonpayment.
Sec. 407. Administrative provisions.
Subtitle B_General Spending Provisions

Sec. 411. Implementing and enforcement funds.
Sec. 412. Improving child care and early childhood development.
Title V_Standards to Reduce Involuntary Exposure to Tobacco Smoke

Sec. 501. Definitions.
Sec. 502. Smoke-free environment policy.
Sec. 503. Citizen actions.
Sec. 504. Preemption.
Sec. 505. Regulations.
Sec. 506. Effective date.
Sec. 507. State choice.
Title VI_Application to Indian Tribes.

Sec. 601. Short title.
Sec. 602. Findings and purposes.
Sec. 603. Application of tobacco-related provisions to native Americans.
Sec. 604. State tobacco excise tax compliance.
Title VII_Civil Liability of Manufacturers of Tobacco Products

Sec. 701. Definitions
Sec. 702. Application.
Sec. 703. Preemption and relationship to other law.
Sec. 704. Governmental claims and Castano civil actions.
Sec. 705. Concurrent jurisdiction; Federal cause of action; actions;
damages;liability.

Sec. 706. Payment of tobacco claim settlements and judgments.
Sec. 707. Attorney's fees and expenses.
Sec. 708. Non-participating manufacturers.
Sec. 709. Conforming amendments.
Title VIII_Tobacco Industry Compliance and Employee Protection from Reprisals

Sec. 801. Tobacco industry compliance accountability requirements.
Sec. 802. Tobacco product manufacturer employee protection.
Title IX_Public Disclosure of Tobacco Industry Documents

Sec. 901. Findings.
Sec. 902. Applicability.
Sec. 903. National Tobacco Document Depository.
Sec. 904. Privilege and trade secret claims.
Sec. 905. Disclosure by the depository.
Sec. 906. National Tobacco Documents Review Board.
Sec. 907. Resolution of disputed privilege and trade secret claims.
Sec. 908. Appeal of board decision.
Sec. 909. Miscellaneous.
Sec. 910. Penalties.
Sec. 911. Definitions.
Title X_Long-Term Economic Assistance for Farmers

Sec. 1001. Short title.
Sec. 1002. Definitions.
Subtitle A_Tobacco Community Revitalization Trust Fund

Sec. 1011. Establishment of trust fund.
Sec. 1012. Contributions by tobacco product manufacturers and importers.
Subtitle B_Tobacco Market Transition Assistance

Sec. 1021. Payments for lost tobacco quota.
Sec. 1022. Industry payments for all department costs associated with
tobaccoproduction.

Sec. 1023. Tobacco community economic development grants.
Sec. 1024. Flue-cured tobacco production permits.
``Sec. 317a. Flue-cured tobacco production permits.

Sec. 1025. Modifications in federal tobacco programs.
Subtitle C_Farmer and Worker Transition Assistance

Sec. 1031. Tobacco worker transition program.
Sec. 1032. Farmer opportunity grants.
``Subpart 9_Farmer Opportunity Grants

``Sec. 420d. Statement of purpose.

``Sec. 420e. Program authority; amount and determinations; applications.

``Sec. 420f. Student eligibility.

Subtitle D_Immunity

Sec. 1041. General immunity for tobacco producers and tobacco
warehouseowners.

Title XI_Miscellaneous

Subtitle A_Prohibitions Relating to Tobacco Products and Children

Sec. 1101. Short title.
Sec. 1102. Prohibitions relating to tobacco products and children.
``Sec. 804. Prohibition on sale or distribution of tobacco products tochildren.

``Sec. 805. Labeling.
Sec. 1103. Enforcement.
Sec. 1104. Reward.
Sec. 1105. Definitions.
Sec. 1106. Amendments to Public Health Service Act.
``Title XXVIII_National Efforts to Reduce Youth Smoking

``Subtitle E_Reducing Youth Smoking and Tobacco-Related Diseases Through
Research 

``Sec. 2801. Study by the Institute of Medicine. 
``Sec. 2802. National tobacco task force. 
``Sec. 2803. Research activities of the Centers for Disease Control andPrevention.


``Sec. 2804. Research activities of the National Institutes of Health. 
Sec. 1107. Ban on distribution of tobacco products produced by child labor.
Subtitle B_Federal Licensing of Tobacco Product Distribution 

Sec. 1121. Licensing of Tobacco Product Distribution.
Subtitle C_International Provisions

Sec. 1131. International tobacco control trust fund.
Sec. 1132. American center on global health and tobacco.
Sec. 1133. Prohibition on use of funds to facilitate the exportation orpromotion
of tobacco.

Sec. 1134. Harmonization with United States international commitments
andobligations.

Subtitle D_Prevention of Tobacco Smuggling

Sec. 1141. Definitions.
Sec. 1142. Tobacco product labeling requirements.
Sec. 1143. Requirements for the tracking of tobacco products.
Sec. 1144. Tobacco product permits.
Sec. 1145. Prohibitions.
Sec. 1146. Pricing and labeling of products sold on military installations orby
native Americans.

Sec. 1147. Prohibition against sale of tobacco products in or to duty-freeshops
or forwarding
through or manufacture in trade zones.

Sec. 1148. Jurisdiction; penalties; compromise of liability.
Sec. 1149. Amendments to the Contraband Cigarette Trafficking Act.
Sec. 1150. Authorization of appropriations.
Subtitle E_Antitrust Exemption

Sec. 1161. Limited Antitrust Exemption.
Subtitle F_Special Provisions Concerning Programs for Women, Minorities, and
Others

Sec. 1171. Research related to patterns of smoking by women and minorities.
Sec. 1172. Counter-advertising programs.
Sec. 1173. Prevention activities of community and migrant health centers.
Subtitle G_Sense of the Senate

Sec. 1181. Sense of the Senate.
Subtitle H_Ban On Sale Of Tobacco Products Through The Use Of Vending
Machines 

Sec. 1191. Ban of sale of tobacco products through the use of vendingmachines.

Title XII_Tobacco Asbestos Trust Fund

Sec. 1201. Definitions.
Sec. 1202. Tobacco Asbestos Trust Fund.
Sec. 1203. Payments from fund I.
Sec. 1204. Payments from fund II.
Sec. 1205. Transfers from National Tobacco Settlement Trust Fund.
Sec. 1206. Rules for claims against asbestos trusts, asbestos defendants,
andtobacco companies.

Title XIII_Veterans' Benefits 

Sec. 1301. Recovery by secretary of veterans affairs.
``Part VII_Recovery of Compensation Costs for Tobacco-Related Disability or
Death

``Chapter 91_Tort Liability for Disability or Death Due to Tobacco Use

``   9101. Recovery by Secretary of Veterans Affairs
``   9102. Regulations
``   9103. Limitation or repeal of other provisions for recovery ofcompensation

``   9104. Exemption from annual limitation on damages


SEC. 2. FINDINGS.

 The Congress finds the following:

 (1) The use of tobacco products by the Nation's children is a pediatric disease
of epic and
worsening proportions that results in new generations of tobacco-dependent
children and adults.

 (2) A consensus exists within the scientific and medical communities that
tobacco products are
inherently dangerous and cause cancer, heart disease, and other serious adverse
health effects.

 (3) Nicotine is an addictive drug.

 (4) Virtually all new users of tobacco products are under the minimum legal age
to purchase
such products.

 (5) Tobacco advertising and marketing contribute significantly to the use of
nicotine-containing
tobacco products by adolescents.

 (6) Because past efforts to restrict advertising and marketing of tobacco
products have failed
adequately to curb tobacco use by adolescents, comprehensive restrictions on
the sale,
promotion, and distribution of such products are needed.

 (7) Federal and State governments have lacked the legal and regulatory authority
and resources
they need to address comprehensively the public health and societal problems
caused by the use
of tobacco products.

 (8) Federal and State public health officials, the public health community, and
the public at large
recognize that the tobacco industry should be subject to ongoing oversight.

 (9) Under Article I, Section 8 of the Constitution, the Congress is vested with the
responsibility
for regulating interstate commerce and commerce with Indian tribes.

 (10) The sale, distribution, marketing, advertising, and use of tobacco products
are activities in
and substantially affecting interstate commerce because they are sold, marketed,
advertised, and
distributed in interstate commerce on a nationwide basis, and have a substantial
effect on the
Nation's economy.

 (11) The sale, distribution, marketing, advertising, and use of such products
substantially affect
interstate commerce through the health care and other costs attributable to the
use of tobacco
products.

 (12) The citizens of the several States are exposed to, and adversely affected by,
environmental
smoke in public buildings and other facilities which imposes a burden on
interstate commerce.

 (13) Civil actions against tobacco product manufacturers and others are pending
in Federal and
State courts arising from the use, marketing, and sale of tobacco products.
Among these actions
are cases brought by the attorneys general of more than 40 States, certain cities
and counties, and
the Commonwealth of Puerto Rico, and other parties, including Indian tribes, and
class actions
brought by private claimants (such as in the Castano Civil Actions), seeking to
recover monies
expended to treat tobacco-related diseases and for the protection of minors and
consumers, as
well as penalties and other relief for violations of antitrust, health, consumer
protection, and
other laws.

 (14) Civil actions have been filed throughout the United States against tobacco
product
manufacturers and their distributors, trade associations, law firms, and
consultants on behalf of
individuals or classes of individuals claiming to be dependent upon and injured
by tobacco
products.

 (15) These civil actions are complex, time-consuming, expensive, and
burdensome for both the
litigants and Federal and State courts. To date, these civil actions have not
resulted in sufficient
redress for smokers or non-governmental third-party payers. To the extent that
governmental
entities have been or may in the future be compensated for tobacco-related
claims they have
brought, it is not now possible to identify what portions of such past or future
recoveries can be
attributed to their various antitrust, health, consumer protection, or other causes
of action.

 (16) It is in the public interest for Congress to adopt comprehensive public
health legislation
because of tobacco's unique position in the Nation's history and economy; the
need to prevent the
sale, distribution, marketing and advertising of tobacco products to persons
under the minimum
legal age to purchase such products; and the need to educate the public,
especially young people,
regarding the health effects of using tobacco products.

 (17) The public interest requires a timely, fair, equitable, and consistent result
that will serve the
public interest by (A) providing that a portion of the costs of treatment for
diseases and adverse
health effects associated with the use of tobacco products is borne by the
manufacturers of these
products, and (B) restricting throughout the Nation the sale, distribution,
marketing, and
advertising of tobacco products only to persons of legal age to purchase such
products.

 (18) Public health authorities estimate that the benefits to the Nation of enacting
Federal
legislation to accomplish these goals would be significant in human and
economic terms.

 (19) Reducing the use of tobacco by minors by 50 percent would prevent well
over 60,000 early
deaths each year and save up to $43 billion each year in reduced medical costs,
improved
productivity, and the avoidance of premature deaths.

 (20) Advertising, marketing, and promotion of tobacco products have been
especially directed
to attract young persons to use tobacco products and these efforts have resulted
in increased use
of such products by youth. Past efforts to oversee these activities have not been
successful in
adequately preventing such increased use.

 (21) 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.

 (22) Tobacco product advertising often misleadingly portrays the use of tobacco
as socially
acceptable and healthful to minors.

 (23) 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.

 (24) 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.

 (25) 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.

 (26) Tobacco advertising increases the size of the tobacco market by increasing
consumption of
tobacco products including increasing tobacco use by young people.

 (27) Children are more influenced by tobacco advertising than adults, they
smoke the most
advertised brands, and children as young as 3 to 6 years old can recognize a
character associated
with smoking at the same rate as they recognize cartoons and fast food
characters.

 (28) Tobacco company documents indicate that young people are an important
and often crucial
segment of the tobacco market.

 (29) Comprehensive advertising restrictions will have a positive effect on the
smoking rates of
young people.

 (30) 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.

 (31) 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 help
reduce underage use of tobacco products while preserving the informational
function of
advertising.

 (32) It is in the public interest for Congress to adopt legislation to address the
public health
crisis created by actions of the tobacco industry. 

 (33) If, as a direct or indirect result of this Act, the consumption of tobacco
products in the
United States is reduced significantly, then tobacco farmers, their families, and
their
communities may suffer economic hardship and displacement, notwithstanding
their lack of
involvement in the manufacturing and marketing of tobacco products.

 (34) The use of tobacco products in motion pictures and other mass media
glamorizes its use for
young people and encourages them to use tobacco products.

SEC. 3. PURPOSE. 

 The purposes of this Act are_ 

 (1) to clarify the authority of the Food and Drug Administration to regulate
tobacco products
under the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.), by
recognizing it as the
primary Federal regulatory authority with respect to the manufacture, marketing,
and distribution
of tobacco products;

 (2) to require the tobacco industry to fund both Federal and State oversight of
the tobacco
industry from on-going payments by tobacco product manufacturers; 

 (3) to require tobacco product manufacturers to provide ongoing funding to be
used for an
aggressive Federal, State, and local enforcement program and for a nationwide
licensing system
to prevent minors from obtaining tobacco products and to prevent the unlawful
distribution of
tobacco products, while expressly permitting the States to adopt additional
measures that further
restrict or eliminate the products' use;

 (4) to ensure that the Food and Drug Administration and the States may
continue to address
issues of particular concern to public health officials, especially the use of
tobacco by young
people and dependence on tobacco;

 (5) to impose financial surcharges on tobacco product manufacturers if tobacco
use by young
people does not substantially decline;

 (6) to authorize appropriate agencies of the Federal government to set national
standards
controlling the manufacture of tobacco products and the identity, public
disclosure, and amount
of ingredients used in such products;

 (7) to provide new and flexible enforcement authority to ensure that the tobacco
industry makes
efforts to develop and introduce less harmful tobacco products;

 (8) to confirm the Food and Drug Administration's authority to regulate the
levels of tar,
nicotine, and other harmful components of tobacco products;

 (9) in order to ensure that adults are better informed, to require tobacco product
manufacturers
to disclose research which has not previously been made available, as well as
research generated
in the future, relating to the health and dependency effects or safety of tobacco
products;

 (10) to impose on tobacco product manufacturers the obligation to provide
funding for a variety
of public health initiatives;

 (11) to establish a minimum Federal standard for stringent restrictions on
smoking in public
places, while also to permit State, Tribal, and local governments to enact
additional and more
stringent standards or elect not to be covered by the Federal standard if that
State's standard is as
protective, or more protective, of the public health;

 (12) to authorize and fund from payments by tobacco product manufacturers a
continuing
national counter-advertising and tobacco control campaign which seeks to
educate consumers
and discourage children and adolescents from beginning to use tobacco
products, and which
encourages current users of tobacco products to discontinue using such
products;

 (13) to establish a mechanism to compensate the States in settlement of their
various claims
against tobacco product manufacturers;

 (14) to authorize and to fund from payments by tobacco product manufacturers
a nationwide
program of smoking cessation administered through State and Tribal
governments and the
private sector;

 (15) to establish and fund from payments by tobacco product manufacturers a
National Tobacco
Fund;

 (16) to affirm the rights of individuals to access to the courts, to civil trial by
jury, and to
damages to compensate them for harm caused by tobacco products;

 (17) to continue to permit the sale of tobacco products to adults in conjunction
with measures to
ensure that they are not sold or accessible to underage purchasers; 

 (18) to impose appropriate regulatory controls on the tobacco industry; and

 (19) to protect tobacco farmers and their communities from the economic impact
of this Act by
providing full funding for and the continuation of the Federal tobacco program
and by providing
funds for farmers and communities to develop new opportunities in
tobacco-dependent
communities.

SEC. 4. SCOPE AND EFFECT.

 (a)  Intended Effect._ This Act is not intended to_

 (1) establish a precedent with regard to any other industry, situation,
circumstance, or legal
action; or

 (2) except as provided in this Act, affect any action pending in State, Tribal, or
Federal court, or
any agreement, consent decree, or contract of any kind.

 (b)  Taxation._ Notwithstanding any other provision of law, this Act and the
amendments made
by this Act shall not affect any authority of the Secretary of the Treasury
(including any
authority assigned to the Bureau of Alcohol, Tobacco and Firearms) or of State
or local
governments with regard to taxation for tobacco or tobacco products.

 (c)  Agricultural Activities._ The provisions of this Act which authorize the
Secretary to take
certain actions with regard to tobacco and tobacco products shall not be
construed to affect any
authority of the Secretary of Agriculture under existing law regarding the
growing, cultivation,
or curing of raw tobacco.

SEC. 5. RELATIONSHIP TO OTHER, RELATED FEDERAL, STATE, LOCAL, AND
TRIBAL  LAWS.

 (a)  Age Restrictions._ Nothing in this Act or the Federal Food, Drug, and
Cosmetic Act (21
U.S.C. 301 et seq.), as amended by this Act, shall prevent a Federal agency
(including the Armed
Forces), a State or its political subdivisions, or the government of an Indian tribe
from adopting
and enforcing additional measures that further restrict or prohibit tobacco
product sale to, use by,
and accessibility to persons under the legal age of purchase established by such
agency, State,
subdivision, or government of an Indian tribe.

 (b)  Additional Measures._ Except as otherwise expressly provided in this Act,
nothing in this
Act, the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.), or rules
promulgated
under such Acts, shall limit the authority of a Federal agency (including the
Armed Forces), a
State or its political subdivisions, or the government of an Indian tribe to enact,
adopt,
promulgate, and enforce any law, rule, regulation, or other measure with respect
to tobacco
products, including laws, rules, regulations, or other measures relating to or
prohibiting the sale,
distribution, possession, exposure to, or use of tobacco products by persons of
any age that are in
addition to the provisions of this Act and the amendments made by this Act. No
provision of this
Act or amendment made by this Act shall limit or otherwise affect any State,
Tribal, or local
taxation of tobacco products. 

 (c)  No Less Stringent._ Nothing in this Act or the amendments made by this Act
is intended to
supersede any State, local, or Tribal law that is not less stringent than this Act,
or other Acts as
amended by this Act.

 (d)  State Law Not Affected._ Except as otherwise expressly provided in this Act,
nothing in
this Act, the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.), or
rules promulgated
under such Acts, shall supersede the authority of the States, pursuant to State
law, to expend
funds provided by this Act.

SEC. 6. DEFINITIONS.

 In this Act:

 (1)  Brand._ The term ``brand'' means a variety of tobacco product distinguished
by the tobacco
used, tar content, nicotine content, flavoring used, size, filtration, or packaging,
logo, registered
trademark or brand name, identifiable pattern of colors, or any combination of
such attributes.

 (2)  Cigarette._ The term ``cigarette'' has the meaning given that term by section
3(1) of the
Federal Cigarette Labeling and Advertising Act (15 U.S.C. 1332(1)), but also
includes tobacco,
in any form, that is functional in the product, 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 or as roll-your-own tobacco.

 (3)  Cigarette tobacco._ The term ``cigarette tobacco'' means any product that
consists of loose
tobacco that is intended for use by consumers in a cigarette. Unless otherwise
stated, the
requirements for cigarettes shall also apply to cigarette tobacco.

 (4)  Commerce._ The term ``commerce'' has the meaning given that term by
section 3(2) of the
Federal Cigarette Labeling and Advertising Act (15 U.S.C. 1332(2)).

 (5)  Distributor._ The term ``distributor'' as regards a tobacco product means any
person who
furthers the distribution of cigarette or smokeless tobacco, 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. Common carriers are not considered
distributors for
purposes of this Act.

 (6)  Indian country; Indian lands._ The terms ``Indian country'' and ``Indian
lands'' have the
meaning given the term ``Indian country'' by section 1151 of title 18, United
States Code, and
includes lands owned by an Indian tribe or a member thereof over which the
United States
exercises jurisdiction on behalf of the tribe or tribal member. 

 (7)  Indian tribe._ The term ``Indian tribe'' has the meaning given such term in
section 4(e) of
the Indian Self Determination and Education Assistance Act (25 U.S.C. 450b(e)).

 (8)  Little cigar._ The term ``little cigar'' has the meaning given that term by
section 3(7) of the
Federal Cigarette Labeling and Advertising Act (15 U.S.C. 1332(7)).

 (9)  Nicotine._ The term ``nicotine'' means the chemical substance named
3-(1-Methyl-2-pyrrolidinyl) pyridine or C[10]H[14]N[2], including any salt or
complex of nicotine.

 (10)  Package._ The term ``package'' means a pack, box, carton, or container of
any kind or, if
no other container, any wrapping (including cellophane), in which cigarettes or
smokeless
tobacco are offered for sale, sold, or otherwise distributed to consumers.

 (11)  Point-of-sale._ The term ``point-of-sale'' means any location at which a
consumer can
purchase or otherwise obtain cigarettes or smokeless tobacco for personal
consumption.

 (12)  Retailer._ The term ``retailer'' means any person who sells cigarettes or
smokeless tobacco
to individuals for personal consumption, or who operates a facility where
self-service displays of
tobacco products are permitted.

 (13)  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.

 (14)  Secretary._ Except in title VII and where the context otherwise requires, the
term
``Secretary'' means the Secretary of Health and Human Services.

 (15)  Smokeless tobacco._ The term ``smokeless tobacco'' means any product
that consists of
cut, ground, powdered, or leaf tobacco and that is intended to be placed in the
oral or nasal
cavity.

 (16)  State._ The term ``State'' means any State of the United States and, for
purposes of this
Act, includes the District of Columbia, the Commonwealth of Puerto Rico, Guam,
the Virgin
Islands, American Samoa, Wake Island, Midway Islands, Kingman Reef, Johnston
Atoll, the
Northern Mariana Islands, and any other trust territory or possession of the
United States.

 (17)  Tobacco product._ The term ``tobacco product'' means cigarettes, cigarette
tobacco,
smokeless tobacco, little cigars, roll-your-own tobacco, and fine cut products.

 (18)  Tobacco product manufacturer._ Except in titles VII, X, and XIV, the term
``tobacco
product manufacturer'' means any person, including any repacker or relabeler,
who_

 (A) manufactures, fabricates, assembles, processes, or labels a finished
cigarette or smokeless
tobacco product; or 

 (B) imports a finished cigarette or smokeless tobacco product for sale or
distribution in the
United States.

 (19)  United States._ The term ``United States'' means the 50 States of the United
States of
America and the District of Columbia, the Commonwealth of Puerto Rico, Guam,
the Virgin
Islands, American Samoa, Wake Island, Midway Islands, Kingman Reef, Johnston
Atoll, the
Northern Mariana Islands, and any other trust territory or possession of the
United States.

SEC. 7. NOTIFICATION IF YOUTHFUL CIGARETTE SMOKING RESTRICTIONS
INCREASE YOUTHFUL PIPE AND CIGAR SMOKING.

 The Secretary shall notify the Congress if the Secretary determines that
underage use of pipe
tobacco and cigars is increasing. 



SEC. 8. FTC JURISDICTION NOT AFFECTED.

 (a)  In General._ Except where expressly provided in this Act, nothing in this Act
shall be
construed as limiting or diminishing the authority of the Federal Trade
Commission to enforce
the laws under its jurisdiction with respect to the advertising, sale, or distribution
of tobacco
products.

 (b)  Enforcement by FTC._ Any advertising that violates this Act or part 897 of
title 21, Code of
Federal Regulations, is an unfair or deceptive act or practice under section 5(a)
of the Federal
Trade Commission Act (15 U.S.C. 45(a)) and shall be considered a violation of a
rule
promulgated under section 18 of that Act (15 U.S.C. 57a).

SEC. 9. CONGRESSIONAL REVIEW PROVISIONS.

 In accordance with section 801 of title 5, United States Code, the Congress shall
review, and
may disapprove, any rule under this Act that is subject to section 801. This
section does not
apply to the rule set forth in part 897 oftitle 21, Code of Federal Regulations.



TITLE I_REGULATION OF THE TOBACCO INDUSTRY

SEC. 101. AMENDMENT OF FEDERAL FOOD, DRUG, AND COSMETIC ACT OF
1938. 
 (a)  Definition of Tobacco Products._ Section 201 of the Federal Food, Drug, and
Cosmetic Act
(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 that is
intended for human consumption, including any component, part, or accessory
of a tobacco
product (except for raw materials other than tobacco used in manufacturing a
component, part, or
accessory of a tobacco product).''.

 (b)  FDA Authority over Tobacco Products._ The Federal Food, Drug, and
Cosmetic Act (21
U.S.C. 301 et seq.) is amended_

 (1) by redesignating chapter IX as chapter X;

 (2) by redesignating sections 901 through 907 as sections 1001 through 1007;
and

 (3) by inserting after section 803 the following:

``CHAPTER IX_TOBACCO PRODUCTS

``SEC. 901. FDA AUTHORITY OVER TOBACCO PRODUCTS
  ``(a)  In General._ Tobacco products shall be regulated by the Secretary under
this chapter and
shall not be subject to the provisions of chapter V, unless_

 ``(1) such products are intended for use in the diagnosis, cure, mitigation,
treatment, or
prevention of disease (within the meaning of section 201(g)(1)(B) or section
201(h)(2)); or

 ``(2) a health claim is made for such products under section 201(g)(1)(C) or
201(h)(3).

 ``(b)  Applicability._ This chapter shall apply to all tobacco products subject to
the provisions of
part 897 of title 21, Code of Federal Regulations, and to any other tobacco
products that the
Secretary by regulation deems to be subject to this chapter.

 ``(c)  Scope._ 

 ``(1) Nothing in this chapter, any policy issued or regulation promulgated
thereunder, or the
National Tobacco Policy and Youth Smoking Reduction Act, shall be construed
to affect the
Secretary's authority over, or the regulation of, products under this Act that are
not tobacco
products under chapter V  of the Federal Food, Drug and Cosmetic Act or any
other chapter of
that Act. 

 ``(2) The provisions of this chapter shall not apply to tobacco leaf that is not in
the possession of
the manufacturer, or to the producers of tobacco leaf, including tobacco growers,
tobacco
warehouses, and tobacco grower cooperatives, nor shall any employee of the
Food and Drug
Administration have any authority whatsoever to enter onto a farm owned by a
producer of
tobacco leaf without the written consent of such producer. Notwithstanding any
other provision
of this subparagraph, if a producer of tobacco leaf is also a tobacco product
manufacturer or
controlled by a tobacco product manufacturer, the producer shall be subject to
this chapter in the
producer's capacity as a manufacturer. Nothing in this chapter shall be
construed to grant the
Secretary authority to promulgate regulations on any matter that involves the
production of
tobacco leaf or a producer thereof, other than activities by a manufacturer
affecting production. 
For purposes of the preceding sentence, the term `controlled by' means a
member of the same
controlled group of corporations as that term is used in section 52(a) of the
Internal Revenue
Code of 1986, or under common control within the meaning of the regulations
promulgated
under section 52(b) of such Code.

``SEC. 902. ADULTERATED TOBACCO PRODUCTS.
 ``A tobacco product shall be deemed to be adulterated if_

 ``(1) it consists in whole or in part of any filthy, putrid, or decomposed
substance, or is
otherwise contaminated by any poisonous or deleterious substance that may
render the product
injurious to health;

 ``(2) it has been prepared, packed, or held under insanitary conditions whereby
it may have been
contaminated with filth, or whereby it may have been rendered injurious to
health; 

 ``(3) its container is composed, in whole or in part, of any poisonous or
deleterious substance
which may render the contents injurious to health;

 ``(4) it is, or purports to be or is represented as, a tobacco product which is
subject to a
performance standard established under section 907 unless such tobacco
product is in all respects
in conformity with such standard;

 ``(5) it is required by section 910(a) to have premarket approval, is not exempt
under section
906(f), and does not have an approved application in effect;

 ``(6) the methods used in, or the facilities or controls used for, its manufacture,
packing or
storage are not in conformity with applicable requirements under section
906(e)(1) or an
applicable condition prescribed by an order under section 906(e)(2); or

 ``(7) it is a tobacco product for which an exemption has been granted under
section 906(f) for
investigational use and the person who was granted such exemption or any
investigator who uses
such tobacco product under such exemption fails to comply with a requirement
prescribed by or
under such section.

``SEC. 903. MISBRANDED TOBACCO PRODUCTS.
 ``(a)  In General._ A tobacco product shall be deemed to be misbranded_

 ``(1) if its labeling is false or misleading in any particular;

 ``(2) if in package form unless it bears a label containing_

 ``(A) the name and place of business of the tobacco product manufacturer,
packer, or
distributor; and 

 ``(B) an accurate statement of the quantity of the contents in terms of weight,
measure, or
numerical count, 

except that under subparagraph (B) of this paragraph reasonable variations shall
be permitted,
and exemptions as to small packages shall be established, by regulations
prescribed by the
Secretary;

 ``(3) if any word, statement, or other information required by or under authority
of this chapter
to appear on the label or labeling is not prominently placed thereon with such
conspicuousness
(as compared with other words, statements or designs in the labeling) and in
such terms as to
render it likely to be read and understood by the ordinary individual under
customary conditions
of purchase and use; 

 ``(4) if it has an established name, unless its label bears, to the exclusion of any
other
nonproprietary name, its established name prominently printed in type as
required by the
Secretary by regulation;

 ``(5) if the Secretary has issued regulations requiring that its labeling bear
adequate directions
for use, or adequate warnings against use by children, that are necessary for the
protection of
users unless its labeling conforms in all respects to such regulations;

 ``(6) if it was manufactured, prepared, propagated, compounded, or processed
in any State in an
establishment not duly registered under section 905(b), if it was not included in
a list required by
section 905(i), if a notice or other information respecting it was not provided as
required by such
section or section 905(j), or if it does not bear such symbols from the uniform
system for
identification of tobacco products prescribed under section 905(e) as the
Secretary by regulation
requires;

 ``(7) if, in the case of any tobacco product distributed or offered for sale in any
State_

 ``(A) its advertising is false or misleading in any particular; or 

 ``(B) it is sold, distributed, or used in violation of regulations prescribed under
section 906(d);

 ``(8) unless, in the case of any tobacco product distributed or offered for sale in
any State, the
manufacturer, packer, or distributor thereof includes in all advertisements and
other descriptive
printed matter issued or caused to be issued by the manufacturer, packer, or
distributor with
respect to that tobacco product_

 ``(A) a true statement of the tobacco product's established name as defined in
paragraph (4) of
this subsection, printed prominently; and 

 ``(B) a brief statement of_

 ``(i) the uses of the tobacco product and relevant warnings, precautions, side
effects, and
contraindications; and 

 ``(ii) in the case of specific tobacco products made subject to a finding by the
Secretary after
notice and opportunity for comment that such action is necessary to protect the
public health, a
full description of the components of such tobacco product or the formula
showing quantitatively
each ingredient of such tobacco product to the extent required in regulations
which shall be
issued by the Secretary after an opportunity for a hearing; 

 ``(9) if it is a tobacco product subject to a performance standard established
under section 907,
unless it bears such labeling as may be prescribed in such performance
standard; or

 ``(10) if there was a failure or refusal_

 ``(A) to comply with any requirement prescribed under section 904 or 908;

 ``(B) to furnish any material or information required by or under section 909; or

 ``(C) to comply with a requirement under section 912.
 ``(b)  Prior Approval of Statements on Label._ The Secretary may, by regulation,
require prior
approval of statements made on the label of a tobacco product. No regulation
issued under this
subsection may require prior approval by the Secretary of the content of any
advertisement and
no advertisement of a tobacco product, published after the date of enactment of
the National
Tobacco Policy and Youth Smoking Reduction Act shall, with respect to the
matters specified in
this section or covered by regulations issued hereunder, be subject to the
provisions of sections
12 through 15 of the Federal Trade Commission Act (15 U.S.C. 52 through 55).
This subsection
does not apply to any printed matter which the Secretary determines to be
labeling as defined in
section 201(m).

``SEC. 904. SUBMISSION OF HEALTH INFORMATION TO THE SECRETARY.
 ``(a)  Requirement ._Not later than 6 months after the date of enactment of the
National
Tobacco Policy and Youth Smoking Reduction Act, each tobacco product
manufacturer or
importer of tobacco products, or agents thereof, shall submit to the Secretary the
following
information:

 ``(1) A listing of all tobacco ingredients, substances and compounds that are, on
such date,
added by the manufacturer to the tobacco, paper, filter, or other component of
each tobacco
product by brand and by quantity in each brand and subbrand.

 ``(2) A description of the content, delivery, and form of nicotine in each tobacco
product
measured in milligrams of nicotine.

 ``(3) All documents (including underlying scientific information) relating to
research activities,
and research findings, conducted, supported, or possessed by the manufacturer
(or agents
thereof) on the health, behavioral, or physiologic effects of tobacco products,
their constituents,
ingredients, and components, and tobacco additives, described in paragraph (1).

 ``(4) All documents (including underlying scientific information) relating to
research activities,
and research findings, conducted, supported, or possessed by the manufacturer
(or agents
thereof) that relate to the issue of whether a reduction in risk to health from
tobacco products can
occur upon the employment of technology available or known to the
manufacturer.

 ``(5) All documents (including underlying scientific information) relating to
marketing research
involving the use of tobacco products.

An importer of a tobacco product not manufactured in the United States shall
supply the
information required of a tobacco product manufacturer under this subsection.

 ``(b)  Annual Submission ._A tobacco product manufacturer or importer that is
required to
submit information under subsection (a) shall update such information on an
annual basis under
a schedule determined by the Secretary.

 ``(c)  Time for Submission ._

 ``(1)  New products ._At least 90 days prior to the delivery for introduction into
interstate
commerce of a tobacco product not on the market on the date of enactment of
this chapter, the
manufacturer of such product shall provide the information required under
subsection (a) and
such product shall be subject to the annual submission under subsection (b).

 ``(2)  Modification of existing products ._If at any time a tobacco product
manufacturer adds to
its tobacco products a new tobacco additive, increases or decreases the quantity
of an existing
tobacco additive or the nicotine content, delivery, or form, or eliminates a
tobacco additive from
any tobacco product, the manufacturer shall within 60 days of such action so
advise the
Secretary in writing and reference such modification in submissions made under
subsection (b).

``SEC. 905. ANNUAL REGISTRATION. 
 ``(a)  Definitions._ As used in this section_

 ``(1) the term `manufacture, preparation, compounding, or processing' shall
include repackaging
or otherwise changing the container, wrapper, or labeling of any tobacco product
package in
furtherance of the distribution of the tobacco product from the original place of
manufacture to
the person who makes final delivery or sale to the ultimate consumer or user;
and

 ``(2) the term `name' shall include in the case of a partnership the name of each
partner and, in
the case of a corporation, the name of each corporate officer and director, and
the State of
incorporation.

 ``(b)  Registration by Owners and Operators._ On or before December 31 of each
year every
person who owns or operates any establishment in any State engaged in the
manufacture,
preparation, compounding, or processing of a tobacco product or tobacco
products shall register
with the Secretary the name, places of business, and all such establishments of
that person.

 ``(c)  Registration of New Owners and Operators._ Every person upon first
engaging in the
manufacture, preparation, compounding, or processing of a tobacco product or
tobacco products
in any establishment owned or operated in any State by that person shall
immediately register
with the Secretary that person's name, place of business, and such
establishment.

 ``(d)  Registration of Added Establishments._ Every person required to register
under subsection
(b) or (c) shall immediately register with the Secretary any additional
establishment which that
person owns or operates in any State and in which that person begins the
manufacture,
preparation, compounding, or processing of a tobacco product or tobacco
products.

 ``(e)  Uniform Product Identification System._ The Secretary may by regulation
prescribe a
uniform system for the identification of tobacco products and may require that
persons who are
required to list such tobacco products under subsection (i) of this section shall
list such tobacco
products in accordance with such system.

 ``(f)  Public Access to Registration Information._ The Secretary shall make
available for
inspection, to any person so requesting, any registration filed under this section.

 ``(g)  Biennial Inspection of Registered Establishments._ Every establishment in
any State
registered with the Secretary under this section shall be subject to inspection
under section 704,
and every such establishment engaged in the manufacture, compounding, or
processing of a
tobacco product or tobacco products shall be so inspected by one or more
officers or employees
duly designated by the Secretary at least once in the 2-year period beginning
with the date of
registration of such establishment under this section and at least once in every
successive 2-year
period thereafter.

 ``(h)  Foreign Establishments May Register._ Any establishment within any
foreign country
engaged in the manufacture, preparation, compounding, or processing of a
tobacco product or
tobacco products, may register under this section under regulations promulgated
by the
Secretary. Such regulations shall require such establishment to provide the
information required
by subsection (i) of this section and shall include provisions for registration of
any such
establishment upon condition that adequate and effective means are available,
by arrangement
with the government of such foreign country or otherwise, to enable the
Secretary to determine
from time to time whether tobacco products manufactured, prepared,
compounded, or processed
in such establishment, if imported or offered for import into the United States,
shall be refused
admission on any of the grounds set forth in section 801(a).

 ``(i)  Registration Information._

 ``(1)  Product list._ Every person who registers with the Secretary under
subsection (b), (c), or
(d) of this section shall, at the time of registration under any such subsection, file
with the
Secretary a list of all tobacco products which are being manufactured, prepared,
compounded, or
processed by that person for commercial distribution and which has not been
included in any list
of tobacco products filed by that person with the Secretary under this paragraph
or paragraph (2)
before such time of registration. Such list shall be prepared in such form and
manner as the
Secretary may prescribe and shall be accompanied by_

 ``(A) in the case of a tobacco product contained in the applicable list with
respect to which a
performance standard has been established under section 907 or which is
subject to section 910,
a reference to the authority for the marketing of such tobacco product and a
copy of all labeling
for such tobacco product;

 ``(B) in the case of any other tobacco product contained in an applicable list, a
copy of all
consumer information and other labeling for such tobacco product, a
representative sampling of
advertisements for such tobacco product, and, upon request made by the
Secretary for good
cause, a copy of all advertisements for a particular tobacco product; and

 ``(C) if the registrant filing a list has determined that a tobacco product
contained in such list is
not subject to a performance standard established under section 907, a brief
statement of the
basis upon which the registrant made such determination if the Secretary
requests such a
statement with respect to that particular tobacco product.

 ``(2)  Biannual Report of Any Change in Product List._ Each person who
registers with the
Secretary under this section shall report to the Secretary once during the month
of June of each
year and once during the month of December of each year the following:

 ``(A) A list of each tobacco product introduced by the registrant for commercial
distribution
which has not been included in any list previously filed by that person with the
Secretary under
this subparagraph or paragraph (1) of this subsection. A list under this
subparagraph shall list a
tobacco product by its established name and shall be accompanied by the other
information
required by paragraph (1).

 ``(B) If since the date the registrant last made a report under this paragraph that
person has
discontinued the manufacture, preparation, compounding, or processing for
commercial
distribution of a tobacco product included in a list filed under subparagraph (A)
or paragraph (1),
notice of such discontinuance, the date of such discontinuance, and the identity
of its established
name.

 ``(C) If since the date the registrant reported under subparagraph (B) a notice of
discontinuance
that person has resumed the manufacture, preparation, compounding, or
processing for
commercial distribution of the tobacco product with respect to which such notice
of
discontinuance was reported, notice of such resumption, the date of such
resumption, the identity
of such tobacco product by established name, and other information required by
paragraph (1),
unless the registrant has previously reported such resumption to the Secretary
under this
subparagraph.

 ``(D) Any material change in any information previously submitted under this
paragraph or
paragraph (1).

 ``(j)  Report Preceding Introduction of Certain Substantially-equivalent Products
into Interstate
Commerce._

 ``(1)  In general._ Each person who is required to register under this section and
who proposes
to begin the introduction or delivery for introduction into interstate commerce for
commercial
distribution of a tobacco product intended for human use that was not
commercially marketed
(other than for test marketing) in the United States as of August 11, 1995, as
defined by the
Secretary by regulation shall, at least 90 days before making such introduction
or delivery, report
to the Secretary (in such form and manner as the Secretary shall by regulation
prescribe)_

 ``(A) the basis for such person's determination that the tobacco product is
substantially
equivalent, within the meaning of section 910, to a tobacco product commercially
marketed
(other than for test marketing) in the United States as of August 11, 1995, that is
in compliance
with the requirements of this Act; and

 ``(B) action taken by such person to comply with the requirements under section
907 that are
applicable to the tobacco product.

 ``(2)  Application to certain post-August  11 th products._ A report under this
subsection for a
tobacco product that was first introduced or delivered for introduction into
interstate commerce
for commercial distribution in the United States after August 11, 1995, and before
the date of
enactment of the National Tobacco Policy and Youth Smoking Reduction Act
shall be submitted
to the Secretary within 6 months after the date of enactment of that Act.

``SEC. 906. GENERAL PROVISIONS RESPECTING CONTROL OF TOBACCO
PRODUCTS. 
 ``(a)  In General._ Any requirement established by or under section 902, 903, 905,
or 909
applicable to a tobacco product shall apply to such tobacco product until the
applicability of the
requirement to the tobacco product has been changed by action taken under
section 907, section
910, or subsection (d) of this section, and any requirement established by or
under section 902,
903, 905, or 909 which is inconsistent with a requirement imposed on such
tobacco product
under section 907, section 910, or subsection (d) of this section shall not apply
to such tobacco
product.

 ``(b)  Information on Public Access and Comment._ Each notice of proposed
rulemaking under
section 907, 908, 909, or 910, or under this section, any other notice which is
published in the
Federal Register with respect to any other action taken under any such section
and which states
the reasons for such action, and each publication of findings required to be
made in connection
with rulemaking under any such section shall set forth_

 ``(1) the manner in which interested persons may examine data and other
information on which
the notice or findings is based; and

 ``(2) the period within which interested persons may present their comments on
the notice or
findings (including the need therefor) orally or in writing, which period shall be
at least 60 days
but may not exceed 90 days unless the time is extended by the Secretary by a
notice published in
the Federal Register stating good cause therefor.

 ``(c)  Limited Confidentiality of Information._ Any information reported to or
otherwise
obtained by the Secretary or the Secretary's representative under section 904,
907, 908, 909, or
910 or 704, or under subsection (e) or (f) of this section, which is exempt from
disclosure under
subsection (a) of section 552 of title 5, United States Code, by reason of
subsection (b)(4) of that
section shall be considered confidential and shall not be disclosed, except that
the information
may be disclosed to other officers or employees concerned with carrying out this
chapter, or
when relevant in any proceeding under this chapter.

 ``(d)  Restrictions._

 ``(1) The Secretary may by regulation require that a tobacco product be
restricted to sale,
distribution, or use upon such conditions, including restrictions on the access
to, and the
advertising and promotion of, the tobacco product, as the Secretary may
prescribe in such
regulation if, because of its potentiality for harmful effect or the collateral
measures necessary to
its use, the Secretary determines that such regulation would be appropriate for
the protection of
the public health. The finding as to whether such regulation would be appropriate
for the
protection of the public health 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_

 ``(A) the increased or decreased likelihood that existing users of tobacco
products will stop
using such products; and 

 ``(B) the increased or decreased likelihood that those who do not use tobacco
products will start
using such products.

No such condition may require that the sale or distribution of a tobacco product
be limited to the
written or oral authorization of a practitioner licensed by law to prescribe medical
products.

 ``(2) The label of a tobacco product shall bear such appropriate statements of
the restrictions
required by a regulation under subsection (a) as the Secretary may in such
regulation prescribe.

 ``(3) No restriction under paragraph (1) may prohibit the sale of any tobacco
product in face-to
face transactions by a specific category of retail outlets.

 ``(e)  Good Manufacturing Practice Requirements._

 ``(1)  Methods, facilities, and controls to conform._

 ``(A) The Secretary may, in accordance with subparagraph (B), prescribe
regulations requiring
that the methods used in, and the facilities and controls used for, the
manufacture, pre-production
design validation (including a process to assess the performance of a tobacco
product), packing
and storage of a tobacco product, conform to current good manufacturing
practice, as prescribed
in such regulations, to assure that the public health is protected and that the
tobacco product is in
compliance with this chapter.

 ``(B) The Secretary shall_

 ``(i) before promulgating any regulation under subparagraph (A), afford an
advisory committee
an opportunity to submit recommendations with respect to the regulation
proposed to be
promulgated; 

 ``(ii) before promulgating any regulation under subparagraph (A), afford
opportunity for an oral
hearing;

 ``(iii) provide the advisory committee a reasonable time to make its
recommendation with
respect to proposed regulations under subparagraph (A); and

 ``(iv) in establishing the effective date of a regulation promulgated under this
subsection, take
into account the differences in the manner in which the different types of tobacco
products have
historically been produced, the financial resources of the different tobacco
product
manufacturers, and the state of their existing manufacturing facilities; and shall
provide for a
reasonable period of time for such manufacturers to conform to good
manufacturing practices.

 ``(2)  Exemptions; variances._

 ``(A) Any person subject to any requirement prescribed under paragraph (1) may
petition the
Secretary for a permanent or temporary exemption or variance from such
requirement. Such a
petition shall be submitted to the Secretary in such form and manner as the
Secretary shall
prescribe and shall_

 ``(i) in the case of a petition for an exemption from a requirement, set forth the
basis for the
petitioner's determination that compliance with the requirement is not required
to assure that the
tobacco product will be in compliance with this chapter;

 ``(ii) in the case of a petition for a variance from a requirement, set forth the
methods proposed
to be used in, and the facilities and controls proposed to be used for, the
manufacture, packing,
and storage of the tobacco product in lieu of the methods, facilities, and controls
prescribed by
the requirement; and

 ``(iii) contain such other information as the Secretary shall prescribe.

 ``(B) The Secretary may refer to an advisory committee any petition submitted
under
subparagraph (A). The advisory committee shall report its recommendations to
the Secretary
with respect to a petition referred to it within 60 days after the date of the
petition's referral.
Within 60 days after_

 ``(i) the date the petition was submitted to the Secretary under subparagraph (A);
or

 ``(ii) the day after the petition was referred to an advisory committee, 

whichever occurs later, the Secretary shall by order either deny the petition or
approve it.

 ``(C) The Secretary may approve_

 ``(i) a petition for an exemption for a tobacco product from a requirement if the
Secretary
determines that compliance with such requirement is not required to assure that
the tobacco
product will be in compliance with this chapter; and

 ``(ii) a petition for a variance for a tobacco product from a requirement if the
Secretary
determines that the methods to be used in, and the facilities and controls to be
used for, the
manufacture, packing, and storage of the tobacco product in lieu of the methods,
controls, and
facilities prescribed by the requirement are sufficient to assure that the tobacco
product will be in
compliance with this chapter.

 ``(D) An order of the Secretary approving a petition for a variance shall prescribe
such
conditions respecting the methods used in, and the facilities and controls used
for, the
manufacture, packing, and storage of the tobacco product to be granted the
variance under the
petition as may be necessary to assure that the tobacco product will be in
compliance with this
chapter.

 ``(E) After the issuance of an order under subparagraph (B) respecting a petition,
the petitioner
shall have an opportunity for an informal hearing on such order.

 ``(3) Compliance with requirements under this subsection shall not be required
before the period
ending 3 years after the date of enactment of the National Tobacco Policy and
Youth Smoking
Reduction Act.

 ``(f)  Exemption for Investigational Use._ The Secretary may exempt tobacco
products intended
for investigational use from this chapter under such conditions as the Secretary
may prescribe by
regulation .

 ``(g)  Research and Development._ The Secretary may enter into contracts for
research, testing,
and demonstrations respecting tobacco products and may obtain tobacco
products for research,
testing, and demonstration purposes without regard to section 3324(a) and (b)
of title 31, United
States Code, and section 5 of title 41, United States Code.

``SEC. 907. PERFORMANCE STANDARDS. 
 ``(a)  In General._

 ``(1)  Finding required._ The Secretary may adopt performance standards for a
tobacco product
if the Secretary finds that a performance standard is appropriate for the
protection of the public
health. This finding 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_

 ``(A) the increased or decreased likelihood that existing users of tobacco
products will stop
using such products; and 

 ``(B) the increased or decreased likelihood that those who do not use tobacco
products will start
using such products. 

 ``(2)  Content of performance standards._ A performance standard established
under this section
for a tobacco product_

 ``(A) shall include provisions to provide performance that is appropriate for the
protection of the
public health, including provisions, where appropriate_ 

 ``(i) for the reduction or elimination of nicotine yields of the product; 

 ``(ii) for the reduction or elimination of other constituents or harmful components
of the
product; or 

 ``(iii) relating to any other requirement under (B);

 ``(B) shall, where necessary to be appropriate for the protection of the public
health, include_

 ``(i) provisions respecting the construction, components, ingredients, and
properties of the
tobacco product;

 ``(ii) provisions for the testing (on a sample basis or, if necessary, on an
individual basis) of the
tobacco product; 

 ``(iii) provisions for the measurement of the performance characteristics of the
tobacco product;

 ``(iv) provisions requiring that the results of each or of certain of the tests of the
tobacco product
required to be made under clause (ii) show that the tobacco product is in
conformity with the
portions of the standard for which the test or tests were required; and

 ``(v) a provision requiring that the sale and distribution of the tobacco product
be restricted but
only to the extent that the sale and distribution of a tobacco product may be
restricted under a
regulation under section 906(d); and

 ``(C) shall, where appropriate, require the use and prescribe the form and
content of labeling for
the proper use of the tobacco product.

 ``(3)  Periodic re-evaluation of performance standards._ The Secretary shall
provide for periodic
evaluation of performance standards established under this section to determine
whether such
standards should be changed to reflect new medical, scientific, or other
technological data. The
Secretary may provide for testing under paragraph (2) by any person.

 ``(4)  Involvement of other agencies; informed persons._ In carrying out duties
under this
section, the Secretary shall, to the maximum extent practicable_

 ``(A) use personnel, facilities, and other technical support available in other
Federal agencies;

 ``(B) consult with other Federal agencies concerned with standard-setting and
other nationally
or internationally recognized standard-setting entities; and

 ``(C) invite appropriate participation, through joint or other conferences,
workshops, or other
means, by informed persons representative of scientific, professional, industry,
or consumer
organizations who in the Secretary's judgment can make a significant
contribution.

 ``(b)  Establishment of Standards._

 ``(1)  Notice._

 (A) The Secretary shall publish in the Federal Register a notice of proposed
rulemaking for the
establishment, amendment, or revocation of any performance standard for a
tobacco product.

 ``(B) A notice of proposed rulemaking for the establishment or amendment of a
performance
standard for a tobacco product shall_

 ``(i) set forth a finding with supporting justification that the performance
standard is appropriate
for the protection of the public health;

 ``(ii) set forth proposed findings with respect to the risk of illness or injury that
the performance
standard is intended to reduce or eliminate; and

 ``(iii) invite interested persons to submit an existing performance standard for
the tobacco
product, including a draft or proposed performance standard, for consideration
by the Secretary.

 ``(C) A notice of proposed rulemaking for the revocation of a performance
standard shall set
forth a finding with supporting justification that the performance standard is no
longer necessary
to be appropriate for the protection of the public health.

 ``(D) The Secretary shall consider all information submitted in connection with
a proposed
standard, including information concerning the countervailing effects of the
performance
standard on the health of adolescent tobacco users, adult tobacco users, or
non-tobacco users,
such as the creation of a significant demand for contraband or other tobacco
products that do not
meet the requirements of this chapter and the significance of such demand, and
shall issue the
standard if the Secretary determines that the standard would be appropriate for
the protection of
the public health.

 ``(E) The Secretary shall provide for a comment period of not less than 60 days.

 ``(2)  Promulgation._

 ``(A) After the expiration of the period for comment on a notice of proposed
rulemaking
published under paragraph (1) respecting a performance standard and after
consideration of such
comments and any report from an advisory committee, the Secretary shall_

 ``(i) promulgate a regulation establishing a performance standard and publish
in the Federal
Register findings on the matters referred to in paragraph (1); or 

 ``(ii) publish a notice terminating the proceeding for the development of the
standard together
with the reasons for such termination.

 ``(B) A regulation establishing a performance standard shall set forth the date
or dates upon
which the standard shall take effect, but no such regulation may take effect
before one year after
the date of its publication unless the Secretary determines that an earlier
effective date is
necessary for the protection of the public health. Such date or dates shall be
established so as to
minimize, consistent with the public health, economic loss to, and disruption or
dislocation of,
domestic and international trade.

 ``(3)  Special rule for standard banning class of product or eliminating nicotine
content._
Because of the importance of a decision of the Secretary to issue a regulation
establishing a
performance standard_

 ``(A) eliminating all cigarettes, all smokeless tobacco products, or any similar
class of tobacco
products, or

 ``(B) requiring the reduction of nicotine yields of a tobacco product to zero,

it is appropriate for the Congress to have the opportunity to review such a
decision. Therefore,
any such standard may not take effect before a date that is 2 years after the
President notifies the
Congress that a final regulation imposing the restriction has been issued. 

 ``(4)  Amendment; revocation._

 ``(A) The Secretary, upon the Secretary's own initiative or upon petition of an
interested person
may by a regulation, promulgated in accordance with the requirements of
paragraphs (1) and
(2)(B) of this subsection, amend or revoke a performance standard.

 ``(B) The Secretary may declare a proposed amendment of a performance
standard to be
effective on and after its publication in the Federal Register and until the effective
date of any
final action taken on such amendment if the Secretary determines that making
it so effective is in
the public interest.

 ``(5)  Reference to Advisory Committee._ The Secretary_

 ``(A) may, on the Secretary's own initiative, refer a proposed regulation for the
establishment,
amendment, or revocation of a performance standard; or

 ``(B) shall, upon the request of an interested person which demonstrates good
cause for referral
and which is made before the expiration of the period for submission of
comments on such
proposed regulation,

refer such proposed regulation to an advisory committee, for a report and
recommendation with
respect to any matter involved in the proposed regulation which requires the
exercise of
scientific judgment. If a proposed regulation is referred under this subparagraph
to the advisory
committee, the Secretary shall provide the advisory committee with the data and
information on
which such proposed regulation is based. The advisory committee shall, within
60 days after the
referral of a proposed regulation and after independent study of the data and
information
furnished to it by the Secretary and other data and information before it, submit
to the Secretary
a report and recommendation respecting such regulation, together with all
underlying data and
information and a statement of the reason or basis for the recommendation. A
copy of such
report and recommendation shall be made public by the Secretary.

``SEC. 908. NOTIFICATION AND OTHER REMEDIES 
 ``(a)  Notification._ If the Secretary determines that_

 ``(1) a tobacco product which is introduced or delivered for introduction into
interstate
commerce for commercial distribution presents an unreasonable risk of
substantial harm to the
public health; and

 ``(2) notification under this subsection is necessary to eliminate the
unreasonable risk of such
harm and no more practicable means is available under the provisions of this
chapter (other than
this section) to eliminate such risk, 

the Secretary may issue such order as may be necessary to assure that adequate
notification is
provided in an appropriate form, by the persons and means best suited under the
circumstances
involved, to all persons who should properly receive such notification in order
to eliminate such
risk. The Secretary may order notification by any appropriate means, including
public service
announcements. Before issuing an order under this subsection, the Secretary
shall consult with
the persons who are to give notice under the order. 

 ``(b)  No Exemption from Other Liability._ Compliance with an order issued under
this section
shall not relieve any person from liability under Federal or State law. In awarding
damages for
economic loss in an action brought for the enforcement of any such liability, the
value to the
plaintiff in such action of any remedy provided under such order shall be taken
into account.

 ``(c)  Recall Authority._ 

 ``(1)  In general._ If the Secretary finds that there is a reasonable probability that
a tobacco
product contains a manufacturing or other defect not ordinarily contained in
tobacco products on
the market that would cause serious, adverse health consequences or death, the
Secretary shall
issue an order requiring the appropriate person (including the manufacturers,
importers,
distributors, or retailers of the tobacco product) to immediately cease distribution
of such
tobacco product. The order shall provide the person subject to the order with an
opportunity for
an informal hearing, to be held not later than 10 days after the date of the
issuance of the order,
on the actions required by the order and on whether the order should be
amended to require a
recall of such tobacco product. If, after providing an opportunity for such a
hearing, the
Secretary determines that inadequate grounds exist to support the actions
required by the order,
the Secretary shall vacate the order.

 ``(2)  Amendment of order to require recall._

 ``(A) If, after providing an opportunity for an informal hearing under paragraph
(1), the
Secretary determines that the order should be amended to include a recall of the
tobacco product
with respect to which the order was issued, the Secretary shall, except as
provided in
subparagraph (B), amend the order to require a recall. The Secretary shall specify
a timetable in
which the tobacco product recall will occur and shall require periodic reports to
the Secretary
describing the progress of the recall.

 ``(B) An amended order under subparagraph (A)_

 ``(i) shall not include recall of a tobacco product from individuals; and

 ``(ii) shall provide for notice to persons subject to the risks associated with the
use of such
tobacco product.

In providing the notice required by clause (ii), the Secretary may use the
assistance of retailers
and other persons who distributed such tobacco product. If a significant number
of such persons
cannot be identified, the Secretary shall notify such persons under section
705(b).

 ``(3)  Remedy not exclusive._ The remedy provided by this subsection shall be
in addition to
remedies provided by subsection (a) of this section.

``SEC. 909. RECORDS AND REPORTS ON TOBACCO PRODUCTS. 
 ``(a)  In General._ Every person who is a tobacco product manufacturer or
importer of a tobacco
product shall establish and maintain such records, make such reports, and
provide such
information, as the Secretary may by regulation reasonably require to assure that
such tobacco
product is not adulterated or misbranded and to otherwise protect public health.
Regulations
prescribed under the preceding sentence_

 ``(1) may require a tobacco product manufacturer or importer to report to the
Secretary
whenever the manufacturer or importer receives or otherwise becomes aware of
information that
reasonably suggests that one of its marketed tobacco products may have caused
or contributed to
a serious unexpected adverse experience associated with the use of the product
or any significant
increase in the frequency of a serious, expected adverse product experience;

 ``(2) shall require reporting of other significant adverse tobacco product
experiences as
determined by the Secretary to be necessary to be reported;

 ``(3) shall not impose requirements unduly burdensome to a tobacco product
manufacturer or
importer, taking into account the cost of complying with such requirements and
the need for the
protection of the public health and the implementation of this chapter;

 ``(4) when prescribing the procedure for making requests for reports or
information, shall
require that each request made under such regulations for submission of a
report or information
to the Secretary state the reason or purpose for such request and identify to the
fullest extent
practicable such report or information;

 ``(5) when requiring submission of a report or information to the Secretary, shall
state the
reason or purpose for the submission of such report or information and identify
to the fullest
extent practicable such report or information; and

 ``(6) may not require that the identity of any patient or user be disclosed in
records, reports, or
information required under this subsection unless required for the medical
welfare of an
individual, to determine risks to public health of a tobacco product, or to verify
a record, report,
or information submitted under this chapter.

In prescribing regulations under this subsection, the Secretary shall have due
regard for the
professional ethics of the medical profession and the interests of patients. The
prohibitions of
paragraph (6) of this subsection continue to apply to records, reports, and
information
concerning any individual who has been a patient, irrespective of whether or
when he ceases to
be a patient.

 ``(b)  Reports of Removals and Corrections._ 

 (1) Except as provided in paragraph (3), the Secretary shall by regulation require
a tobacco
product manufacturer or importer of a tobacco product to report promptly to the
Secretary any
corrective action taken or removal from the market of a tobacco product
undertaken by such
manufacturer or importer if the removal or correction was undertaken_

 ``(A) to reduce a risk to health posed by the tobacco product; or

 ``(B) to remedy a violation of this chapter caused by the tobacco product which
may present a
risk to health.

A tobacco product manufacturer or importer of a tobacco product who
undertakes a corrective
action or removal from the market of a tobacco product which is not required to
be reported
under this subsection shall keep a record of such correction or removal.

 ``(2) No report of the corrective action or removal of a tobacco product may be
required under
paragraph (1) if a report of the corrective action or removal is required and has
been submitted
under subsection (a) of this section.

``SEC. 910. PREMARKET REVIEW OF CERTAIN TOBACCO PRODUCTS.
 ``(a)  In General._

 ``(1)  Premarket approval required._

 ``(A)  New products._ Approval under this section of an application for premarket
approval for
any tobacco product that is not commercially marketed (other than for test
marketing) in the
United States as of August 11, 1995, is required unless the manufacturer has
submitted a report
under section 905(j), and the Secretary has issued an order that the tobacco
product is
substantially equivalent to a tobacco product commercially marketed (other than
for test
marketing) in the United States as of August 11, 1995, that is in compliance with
the
requirements of this Act. 

 ``(B)  Products introduced between August  11, 1995,  and enactment of this
chapter._
Subparagraph (A) does not apply to a tobacco product that_

 ``(i) was first introduced or delivered for introduction into interstate commerce
for commerce
for commercial distribution in the United States after August 11, 1995, and before
the date of
enactment of the National Tobacco Policy and Youth Smoking Reduction Act;
and

 ``(ii) for which a report was submitted under section 905(j) within 6 months after
such date,

until the Secretary issues an order that the tobacco product is substantially
equivalent for
purposes of this section or requires premarket approval.

 ``(2)  Substantially equivalent defined._

 ``(A) For purposes of this section and section 905(j), the term `substantially
equivalent' or
`substantial equivalence' mean, with respect to the tobacco product being
compared to the
predicate tobacco product, that the Secretary by order has found that the
tobacco product_

 ``(i) has the same characteristics as the predicate tobacco product; or

 ``(ii) has different characteristics and the information submitted contains
information, including
clinical data if deemed necessary by the Secretary, that demonstrates that it is
not appropriate to
regulate the product under this section because the product does not raise
different questions of
public health. 

 ``(B) For purposes of subparagraph (A), the term `characteristics' means the
materials,
ingredients, design, composition, heating source, or other features of a tobacco
product.

 ``(C) A tobacco product may not be found to be substantially equivalent to a
predicate tobacco
product that has been removed from the market at the initiative of the Secretary
or that has been
determined by a judicial order to be misbranded or adulterated.

 ``(3)  Health Information._

 ``(A) As part of a submission under section 905(j) respecting a tobacco product,
the person
required to file a premarket notification under such section shall provide an
adequate summary
of any health information related to the tobacco product or state that such
information will be
made available upon request by any person.

 ``(B) Any summary under subparagraph (A) respecting a tobacco product shall
contain detailed
information regarding data concerning adverse health effects and shall be made
available to the
public by the Secretary within 30 days of the issuance of a determination that
such tobacco
product is substantially equivalent to another tobacco product.

 ``(b)  Application._

 ``(1)  Contents._ An application for premarket approval shall contain_

 ``(A) full reports of all information, published or known to or which should
reasonably be
known to the applicant, concerning investigations which have been made to
show the health
risks of such tobacco product and whether such tobacco product presents less
risk than other
tobacco products;

 ``(B) a full statement of the components, ingredients, and properties, and of the
principle or
principles of operation, of such tobacco product;

 ``(C) a full description of the methods used in, and the facilities and controls
used for, the
manufacture, processing, and, when relevant, packing and installation of, such
tobacco product;

 ``(D) an identifying reference to any performance standard under section 907
which would be
applicable to any aspect of such tobacco product, and either adequate
information to show that
such aspect of such tobacco product fully meets such performance standard or
adequate
information to justify any deviation from such standard;

 ``(E) such samples of such tobacco product and of components thereof as the
Secretary may
reasonably require;

 ``(F) specimens of the labeling proposed to be used for such tobacco product;
and

 ``(G) such other information relevant to the subject matter of the application as
the Secretary
may require.

 ``(2)  Reference to Advisory Committee._ Upon receipt of an application meeting
the
requirements set forth in paragraph (1), the Secretary_

 ``(A) may, on the Secretary's own initiative; or 

 ``(B) shall, upon the request of an applicant, 

refer such application to an advisory committee and for submission (within such
period as the
Secretary may establish) of a report and recommendation respecting approval
of the application,
together with all underlying data and the reasons or basis for the
recommendation.

 ``(c)  Action on Application._

 ``(1)  Deadline._

 ``(A) As promptly as possible, but in no event later than 180 days after the
receipt of an
application under subsection (b) of this section, the Secretary, after considering
the report and
recommendation submitted under paragraph (2) of such subsection, shall_

 ``(i) issue an order approving the application if the Secretary finds that none of
the grounds for
denying approval specified in paragraph (2) of this subsection applies; or

 ``(ii) deny approval of the application if the Secretary finds (and sets forth the
basis for such
finding as part of or accompanying such denial) that one or more grounds for
denial specified in
paragraph (2) of this subsection apply.

 ``(B) An order approving an application for a tobacco product may require as a
condition to
such approval that the sale and distribution of the tobacco product be restricted
but only to the
extent that the sale and distribution of a tobacco product may be restricted under
a regulation
under section 906(d).

 ``(2)  Denial of approval._ The Secretary shall deny approval of an application for
a tobacco
product if, upon the basis of the information submitted to the Secretary as part
of the application
and any other information before the Secretary with respect to such tobacco
product, the
Secretary finds that_

 ``(A) there is a lack of a showing that permitting such tobacco product to be
marketed would be
appropriate for the protection of the public health; 

 ``(B) the methods used in, or the facilities or controls used for, the manufacture,
processing, or
packing of such tobacco product do not conform to the requirements of section
906(e);

 ``(C) based on a fair evaluation of all material facts, the proposed labeling is
false or misleading
in any particular; or

 ``(D) such tobacco product is not shown to conform in all respects to a
performance standard in
effect under section 907, compliance with which is a condition to approval of the
application,
and there is a lack of adequate information to justify the deviation from such
standard.

 ``(3)  Denial Information._ Any denial of an application shall, insofar as the
Secretary
determines to be practicable, be accompanied by a statement informing the
applicant of the
measures required to place such application in approvable form (which measures
may include
further research by the applicant in accordance with one or more protocols
prescribed by the
Secretary).

 ``(4)  Basis for finding._ For purposes of this section, the finding as to whether
approval of a
tobacco product is appropriate for the protection of the public health 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_

 ``(A) the increased or decreased likelihood that existing users of tobacco
products will stop
using such products; and 

 ``(B) the increased or decreased likelihood that those who do not use tobacco
products will start
using such products.

 ``(5)  Basis for action._

 ``(A) For purposes of paragraph (2)(A), whether permitting a tobacco product to
be marketed
would be appropriate for the protection of the public health shall, when
appropriate, be
determined on the basis of well-controlled investigations, which may include one
or more
clinical investigations by experts qualified by training and experience to evaluate
the tobacco
product.

 ``(B) If the Secretary determines that there exists valid scientific evidence (other
than evidence
derived from investigations described in subparagraph (A)) which is sufficient to
evaluate the
tobacco product the Secretary may authorize that the determination for purposes
of paragraph
(2)(A) be made on the basis of such evidence.

 ``(d)  Withdrawal and Temporary Suspension._

 ``(1)  In general._ The Secretary shall, upon obtaining, where appropriate, advice
on scientific
matters from an advisory committee, and after due notice and opportunity for
informal hearing to
the holder of an approved application for a tobacco product, issue an order
withdrawing approval
of the application if the Secretary finds_

 ``(A) that the continued marketing of such tobacco product no longer is
appropriate for the
protection of the public health;

 ``(B) that the application contained or was accompanied by an untrue statement
of a material
fact;

 ``(C) that the applicant_

 ``(i) has failed to establish a system for maintaining records, or has repeatedly
or deliberately
failed to maintain records or to make reports, required by an applicable
regulation under section
909; 

 ``(ii) has refused to permit access to, or copying or verification of, such records
as required by
section 704; or 

 ``(iii) has not complied with the requirements of section 905;

 ``(D) on the basis of new information before the Secretary with respect to such
tobacco product,
evaluated together with the evidence before the Secretary when the application
was approved,
that the methods used in, or the facilities and controls used for, the manufacture,
processing,
packing, or installation of such tobacco product do not conform with the
requirements of section
906(e) and were not brought into conformity with such requirements within a
reasonable time
after receipt of written notice from the Secretary of nonconformity;

 ``(E) on the basis of new information before the Secretary, evaluated together
with the evidence
before the Secretary when the application was approved, that the labeling of
such tobacco
product, based on a fair evaluation of all material facts, is false or misleading in
any particular
and was not corrected within a reasonable time after receipt of written notice
from the Secretary
of such fact; or

 ``(F) on the basis of new information before the Secretary, evaluated together
with the evidence
before the Secretary when the application was approved, that such tobacco
product is not shown
to conform in all respects to a performance standard which is in effect under
section 907,
compliance with which was a condition to approval of the application, and that
there is a lack of
adequate information to justify the deviation from such standard.

 ``(2)  Appeal._ The holder of an application subject to an order issued under
paragraph (1)
withdrawing approval of the application may, by petition filed on or before the
thirtieth day after
the date upon which he receives notice of such withdrawal, obtain review thereof
in accordance
with subsection (e) of this section.

 ``(3)  Temporary suspension._ If, after providing an opportunity for an informal
hearing, the
Secretary determines there is reasonable probability that the continuation of
distribution of a
tobacco product under an approved application would cause serious, adverse
health
consequences or death, that is greater than ordinarily caused by tobacco
products on the market,
the Secretary shall by order temporarily suspend the approval of the application
approved under
this section. If the Secretary issues such an order, the Secretary shall proceed
expeditiously
under paragraph (1) to withdraw such application.

 ``(e)  Service of Order._ An order issued by the Secretary under this section shall
be served_ 

 ``(1) in person by any officer or employee of the department designated by the
Secretary; or 

 ``(2) by mailing the order by registered mail or certified mail addressed to the
applicant at the
applicant's last known address in the records of the Secretary.

``SEC. 911. JUDICIAL REVIEW.
 ``(a)  In General._ Not later than 30 days after_

 ``(1) the promulgation of a regulation under section 907 establishing, amending,
or revoking a
performance standard for a tobacco product; or 

 ``(2) a denial of an application for approval under section 910(c),

any person adversely affected by such regulation or order may file a petition with
the United
States Court of Appeals for the District of Columbia or for the circuit wherein
such person
resides or has his principal place of business for judicial review of such
regulation or order. A
copy of the petition shall be transmitted by the clerk of the court to the Secretary
or other officer
designated by the Secretary for that purpose. The Secretary shall file in the court
the record of
the proceedings on which the Secretary based the Secretary's regulation or order
and each record
or order shall contain a statement of the reasons for its issuance and the basis,
on the record, for
its issuance. For purposes of this section, the term `record' means all notices
and other matter
published in the Federal Register with respect to the regulation or order
reviewed, all
information submitted to the Secretary with respect to such regulation or order,
proceedings of
any panel or advisory committee with respect to such regulation or order, any
hearing held with
respect to such regulation or order, and any other information identified by the
Secretary, in the
administrative proceeding held with respect to such regulation or order, as being
relevant to such
regulation or order.

 ``(b)  Court May Order Secretary to Make Additional Findings._ If the petitioner
applies to the
court for leave to adduce additional data, views, or arguments respecting the
regulation or order
being reviewed and shows to the satisfaction of the court that such additional
data, views, or
arguments are material and that there were reasonable grounds for the
petitioner's failure to
adduce such data, views, or arguments in the proceedings before the Secretary,
the court may
order the Secretary to provide additional opportunity for the oral presentation of
data, views, or
arguments and for written submissions. The Secretary may modify the
Secretary's findings, or
make new findings by reason of the additional data, views, or arguments so
taken and shall file
with the court such modified or new findings, and the Secretary's
recommendation, if any, for the
modification or setting aside of the regulation or order being reviewed, with the
return of such
additional data, views, or arguments.

 ``(c)  Standard of Review._ Upon the filing of the petition under subsection (a)
of this section
for judicial review of a regulation or order, the court shall have jurisdiction to
review the
regulation or order in accordance with chapter 7 of title 5, United States Code,
and to grant
appropriate relief, including interim relief, as provided in such chapter. A
regulation or order
described in paragraph (1) or (2) of subsection (a) of this section shall not be
affirmed if it is
found to be unsupported by substantial evidence on the record taken as a whole.

 ``(d)  Finality of Judgment._ The judgment of the court affirming or setting aside,
in whole or in
part, any regulation or order shall be final, subject to review by the Supreme
Court of the United
States upon certiorari or certification, as provided in section 1254 of title 28,
United States Code.

 ``(e)  Other Remedies._ The remedies provided for in this section shall be in
addition to and not
in lieu of any other remedies provided by law.

 ``(f)  Regulations and Orders Must Recite Basis in Record._ To facilitate judicial
review under
this section or under any other provision of law of a regulation or order issued
under section 906,
907, 908, 909, 910, or 914, each such regulation or order shall contain a statement
of the reasons
for its issuance and the basis, in the record of the proceedings held in
connection with its
issuance, for its issuance.

``SEC. 912. POSTMARKET SURVEILLANCE 
 ``(a)  Discretionary Surveillance._ The Secretary may require a tobacco product
manufacturer to
conduct postmarket surveillance for a tobacco product of the manufacturer if the
Secretary
determines that postmarket surveillance of the tobacco product is necessary to
protect the public
health or is necessary to provide information regarding the health risks and other
safety issues
involving the tobacco product.

 ``(b)  Surveillance Approval._ Each tobacco product manufacturer required to
conduct a
surveillance of a tobacco product under subsection (a) of this section shall,
within 30 days after
receiving notice that the manufacturer is required to conduct such surveillance,
submit, for the
approval of the Secretary, a protocol for the required surveillance. The Secretary,
within 60 days
of the receipt of such protocol, shall determine if the principal investigator
proposed to be used
in the surveillance has sufficient qualifications and experience to conduct such
surveillance and
if such protocol will result in collection of useful data or other information
necessary to protect
the public health. The Secretary may not approve such a protocol until it has
been reviewed by
an appropriately qualified scientific and technical review committee established
by the Secretary.

``SEC. 913. REDUCED RISK TOBACCO PRODUCTS.
 ``(a)  Requirements ._

 ``(1)  In general ._For purposes of this section, the term `reduced risk tobacco
product' means a
tobacco product designated by the Secretary under paragraph (2).

 ``(2)  Designation ._

 ``(A)  In general._ A product may be designated by the Secretary as a reduced
risk tobacco
product if the Secretary finds that the product will significantly reduce harm to
individuals
caused by a tobacco product and is otherwise appropriate to protect public
health, based on an
application submitted by the manufacturer of the product (or other responsible
person) that_

 ``(i) demonstrates through testing on animals and short-term human testing that
use of such
product results in ingestion or inhalation of a substantially lower yield of toxic
substances than
use of conventional tobacco products in the same category as the proposed
reduced risk product;
and

 ``(ii) if required by the Secretary, includes studies of the long-term health effects
of the product.

If such studies are required, the manufacturer may consult with the Secretary
regarding protocols
for conducting the studies.

 ``(B)  Basis for finding._ In making the finding under subparagraph (A), the
Secretary shall take
into account_

 ``(i) the risks and benefits to the population as a whole, including both users of
tobacco products
and non-users of tobacco products;

 ``(ii) the increased or decreased likelihood that existing users of tobacco
products will stop
using such products including reduced risk tobacco products;

 ``(iii) the increased or decreased likelihood that those who do not use tobacco
products will start
to use such products, including reduced risk tobacco products; and

 ``(iv) the risks and benefits to consumers from the use of a reduced risk tobacco
product as
compared to the use of products approved under chapter V to reduce exposure
to tobacco.

 ``(3)  Marketing requirements ._A tobacco product may be marketed and labeled
as a reduced
risk tobacco product if it_

 ``(A) has been designated as a reduced risk tobacco product by the Secretary
under paragraph
(2);

 ``(B) bears a label prescribed by the Secretary concerning the product's
contribution to reducing
harm to health; and

 ``(C) complies with requirements prescribed by the Secretary relating to
marketing and
advertising of the product, and other provisions of this chapter as prescribed by
the Secretary.

 ``(b)  Revocation of Designation ._At any time after the date on which a tobacco
product is
designated as a reduced risk tobacco product under this section the Secretary
may, after
providing an opportunity for an informal hearing, revoke such designation if the
Secretary
determines, based on information not available at the time of the designation,
that_

 ``(1) the finding made under subsection (a)(2) is no longer valid; or

 ``(2) the product is being marketed in violation of subsection (a)(3).



 ``(c)  Limitation ._A tobacco product that is designated as a reduced risk tobacco
product that is
in compliance with subsection (a) shall not be regulated as a drug or device.

 ``(d)  Development of reduced risk tobacco product Technology ._A tobacco
product
manufacturer shall provide written notice to the Secretary upon the development
or acquisition
by the manufacturer of any technology that would reduce the risk of a tobacco
product to the
health of the user for which the manufacturer is not seeking designation as a
`reduced risk
tobacco product' under subsection (a).

``SEC. 914. PRESERVATION OF STATE AND LOCAL AUTHORITY.
 ``(a)  Additional Requirements ._

 ``(1)  In general ._Except as provided in paragraph (2), nothing in this Act shall
be construed as
prohibiting a State or political subdivision thereof from adopting or enforcing a
requirement
applicable to a tobacco product that is in addition to, or more stringent than,
requirements
established under this chapter.

 ``(2)  Preemption of certain state and local requirements ._

 ``(A) Except as provided in subparagraph (B), no State or political subdivision
of a State may
establish or continue in effect with respect to a tobacco product any requirement
which is
different from, or in addition to, any requirement applicable under the provisions
of this chapter
relating to performance standards, premarket approval, adulteration,
misbranding, registration,
reporting, good manufacturing standards, or reduced risk products.

 ``(B) Subparagraph (A) does not apply to requirements relating to the sale, use,
or distribution
of a tobacco product including requirements related to the access to, and the
advertising and
promotion of, a tobacco product.

 ``(b)  Rule of Construction Regarding Product Liability ._No provision of this
chapter relating
to a tobacco product shall be construed to modify or otherwise affect any action
or the liability of
any person under the product liability law of any State.

 ``(c)  Waivers ._Upon the application of a State or political subdivision thereof,
the Secretary
may, by regulation promulgated after notice and an opportunity for an oral
hearing, exempt from
subsection (a), under such conditions as may be prescribed in such regulation,
a requirement of
such State or political subdivision applicable to a tobacco product if_

 ``(1) the requirement is more stringent than a requirement applicable under the
provisions
described in subsection (a)(3) which would be applicable to the tobacco product
if an exemption
were not in effect under this subsection; or

 ``(2) the requirement_

 ``(A) is required by compelling local conditions; and

 ``(B) compliance with the requirement would not cause the tobacco product to
be in violation of
any applicable requirement of this chapter.

``SEC. 915. EQUAL TREATMENT OF RETAIL OUTLETS.
  ``The Secretary shall issue regulations to require that retail establishments for
which the
predominant business is the sale of tobacco products comply with any
advertising restrictions
applicable to retail establishments accessible to individuals under the age of
18.''.
SEC. 102. CONFORMING AND OTHER AMENDMENTS TO GENERAL
PROVISIONS.
 (a)  Amendment of Federal Food, Drug, and Cosmetic Act._ Except as otherwise
expressly
provided, whenever in this section an amendment is expressed in terms of an
amendment to, or
repeal of, a section or other provision, the reference is to a section or other
provision of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.).

 (b)  Section  301._ Section 301 (21 U.S.C. 331) is amended_
 (1) by inserting ``tobacco product,'' in subsection (a) after ``device,'';

 (2) by inserting ``tobacco product,'' in subsection (b) after ``device,'';

 (3) by inserting ``tobacco product,'' in subsection (c) after ``device,'';

 (4) by striking ``515(f), or 519'' in subsection (e) and inserting ``515(f), 519, or
909'';

 (5) by inserting ``tobacco product,'' in subsection (g) after ``device,'';

 (6) by inserting ``tobacco product,'' in subsection (h) after ``device,'';

 (7) by striking ``708, or 721'' in subsection (j) and inserting ``708, 721, 904, 905,
906, 907, 908,
or 909'';

 (8) by inserting ``tobacco product,'' in subsection (k) after ``device,'';

 (9) by striking subsection (p) and inserting the following:

 ``(p) The failure to register in accordance with section 510 or 905, the failure to
provide any
information required by section 510(j), 510(k), 905(i), or 905(j), or the failure to
provide a notice
required by section 510(j)(2) or 905(J)(2).'';

 (10) by striking subsection (q)(1) and inserting the following:

 ``(q)(1) The failure or refusal_

 ``(A) to comply with any requirement prescribed under section 518, 520(g), 906(f),
or 908;

 ``(B) to furnish any notification or other material or information required by or
under section
519, 520(g), 904, 906(f), or 909; or

 ``(C) to comply with a requirement under section 522 or 912.'';
 (11) by striking ``device,'' in subsection (q)(2) and inserting ``device or tobacco
product,'';

 (12) by inserting ``or tobacco product'' in subsection (r) after ``device'' each time
that it appears;
and

 (13) by adding at the end thereof the following:

 ``(aa) The sale of tobacco products in violation of a no-tobacco-sale order issued
under section
303(f).''.

 (c) Section 303._ Section 303(f) (21 U.S.C. 333(f)) is amended_
 (1) by amending the caption to read as follows:

 ``(f)  Civil Penalties; No-tobacco-sale Orders._'';

 (2) by inserting ``or tobacco products'' after ``devices'' in paragraph (1)(A);

 (3) by redesignating paragraphs (3), (4), and (5) as paragraphs (4), (5), and (6),
and inserting
after paragraph (2) the following:

 ``(3) If the Secretary finds that a person has committed repeated violations of
restrictions
promulgated under section 906(d) at a particular retail outlet then the Secretary
may impose a
no-tobacco-sale order on that person prohibiting the sale of tobacco products
in that outlet.  A
no-tobacco-sale order may be imposed with a civil penalty under paragraph (1).'';

 (4) by striking ``assessed'' the first time it appears in subparagraph (A) of
paragraph (4), as
redesignated, and inserting ``assessed, or a no-tobacco-sale order may be
imposed,'';

 (5) by striking ``penalty'' in such subparagraph and inserting ``penalty, or upon
whom a no-tobacco-order is to be imposed,'';

 (6) by inserting after ``penalty,'' in subparagraph (B) of paragraph (4), as
redesignated, the
following:  ``or the period to be covered by a no-tobacco-sale order,'';

 (7) by adding at the end of such subparagraph the following:  ``A
no-tobacco-sale order
permanently prohibiting an individual retail outlet from selling tobacco products
shall include
provisions that allow the outlet, after a specified period of time, to request that
the Secretary
compromise, modify, or terminate the order.'';

 (8) by adding at the end of paragraph (4), as redesignated, the following:

 ``(D) The Secretary may compromise, modify, or terminate, with or without
conditions, any no-tobacco-sale order.'';

 (9) by striking ``(3)(A)'' in paragraph (5), as resdesignated, and inserting ``(4)(A)'';

 (10) by inserting ``or the imposition of a no-tobacco-sale order'' after ``penalty''
the first 2 places
it appears in such paragraph;

 (11) by striking ``issued.'' in such paragraph and inserting ``issued, or on which
the no-tobacco-sale order was imposed, as the case may be.''; and

 (12) by striking ``paragraph (4)'' each place it appears in paragraph (6), as
redesignated, and
inserting ``paragraph (5)''.

 (d)  Section  304._ Section 304 (21 U.S.C. 334) is amended_
 (1) by striking ``and'' before ``(D)'' in subsection (a)(2);

 (2) by striking ``device.'' in subsection (a)(2) and inserting a comma and ``(E) Any
adulterated
or misbranded tobacco product.'';

 (3) by inserting ``tobacco product,'' in subsection (d)(1) after ``device,'';

 (4) by inserting ``or tobacco product'' in subsection (g)(1) after ``device'' each
place it appears;
and

 (5) by inserting ``or tobacco product'' in subsection (g)(2)(A) after ``device'' each
place it
appears.

 (e)  Section  702._ Section 702(a) (21 U.S.C. 372(a)) is amended_
 (1) by inserting ``(1)'' after ``(a)''; and

 (2) by adding at the end thereof the following:

 ``(2) For a tobacco product, to the extent feasible, the Secretary shall contract
with the States in
accordance with paragraph (1) to carry out inspections of retailers in connection
with the
enforcement of this Act.''.

 (f)  Section  703._ Section 703 (21 U.S.C. 373) is amended_
 (1) by inserting ``tobacco product,'' after ``device,'' each place it appears; and 

 (2) by inserting ``tobacco products,'' after ``devices,'' each place it appears.

 (g)  Section  704._ Section 704 (21 U.S.C. 374) is amended_
 (1) by inserting ``tobacco products,'' in subsection (a)(1)(A) after ``devices,'' each
place it
appears;

 (2) by inserting ``or tobacco products'' in subsection (a)(1)(B) after ``restricted
devices'' each
place it appears; and

 (3) by inserting ``tobacco product,'' in subsection (b) after ``device,''.

 (h)  Section  705._ Section 705(b) (21 U.S.C. 375(b)) is amended byinserting
``tobacco
products,'' after ``devices,''.

 (i)  Section  709._ Section 709 (21 U.S. C. 379) is amended by inserting``or
tobacco product''
after ``device''.

 (j)  Section  801._ Section 801 (21 U.S.C. 381) is amended_
 (1) by inserting ``tobacco products,'' after ``devices,'' in subsection (a) the first
time it appears;

 (2) by inserting ``or subsection (j) of section 905'' in subsection (a) after ``section
510''; and

 (3) by striking ``drugs or devices'' each time it appears in subsection (a) and
inserting ``drugs,
devices, or tobacco products'';

 (4) by inserting ``tobacco product,'' in subsection (e)(1) after ``device,'';

 (2) by redesignating paragraph (4) of subsection (e) as paragraph (5) and
inserting after
paragraph (3), the following:

 ``(4) Paragraph (1) does not apply to any tobacco product_

 ``(A) which does not comply with an applicable requirement of section 907 or
910; or

 ``(B) which under section 906(f) is exempt from either such section.

This paragraph does not apply if the Secretary has determined that the
exportation of the tobacco
product is not contrary to the public health and safety and has the approval of
the country to
which it is intended for export or the tobacco product is eligible for export under
section 802.''.
 (k)  Section  802._ Section 802 (21 U.S.C. 382) is amended_
 (1) by striking ``device_'' in subsection (a) and inserting ``device or tobacco
product_'';

 (2) by striking ``and'' after the semicolon in subsection (a)(1)(C);

 (3) by striking subparagraph (C) of subsection (a)(2) and all that follows in that
subsection and
inserting the following:

 ``(C) is a banned device under section 516; or

 ``(3) which, in the case of a tobacco product_ 

 ``(A) does not comply with an applicable requirement of section 907 or 910; or

 ``(B) under section 906(f) is exempt from either such section,

is adulterated, misbranded, and in violation of such sections or Act unless the
export of the drug,
device, or tobacco product is, except as provided in subsection (f), authorized
under subsection
(b), (c), (d), or (e) of this section or section 801(e)(2) or 801(e)(4). If a drug, device,
or tobacco
product described in paragraph (1), (2), or (3) may be exported under subsection
(b) and if an
application for such drug or device under section 505, 515, or 910 of this Act or
section 351 of
the Public Health Service Act (42 U.S.C. 262) was disapproved, the Secretary
shall notify the
appropriate public health official of the country to which such drug, device, or
tobacco product
will be exported of such disapproval.'';

 (4) by inserting ``or tobacco product'' in subsection (b)(1)(A) after ``device'' each
time it
appears;

 (5) by inserting ``or tobacco product'' in subsection (c) after ``device'' and
inserting ``or section
906(f)'' after ``520(g).'';

 (6) by inserting ``or tobacco product'' in subsection (f) after ``device'' each time
it appears; and

 (7) by inserting ``or tobacco product'' in subsection (g) after ``device'' each time
it appears.

 (l)  Section  1003._ Section 1003(d)(2)(C) (as redesignated by section101(a)) is
amended_

 (1) by striking ``and'' after ``cosmetics,''; and 

 (2) inserting a comma and ``and tobacco products'' after ``devices''.

 (m)  Effective Date for no-tobacco-sale order amendments._ The amendments
made by
subsection (c), other than the amendment made by paragraph (2) thereof, shall
take effect only
upon the promulgation of final regulations by the Secretary_

 (1) defining the term ``repeated violation'', as used in section 303(f) of the
Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 333(f)) as amended by subsection (c), by identifying
the number of
violations of particular requirements over a specified period of time that
constitute a repeated
violation;

 (2) providing for notice to the retailer of each violation at a particular retail
outlet;

 (3) providing that a person may not be charged with repeated violations at a
particular retail
outlet unless the Secretary has provided notice of previous violations at that
outlet;

 (4) establishing a period of time during which, if there are no violations by a
particular retail
outlet, that outlet will not considered to have been the site of repeated violations
when the next
violation occurs; and

 (5) providing that good faith reliance on false identification does not constitute
a violation of
any minimum age requirement for the sale of tobacco products.

SEC. 103.  CONSTRUCTION OF CURRENT REGULATIONS.
 (a)  In General._ The final regulations promulgated by the Secretary in the
August 28, 1996,
issue of the Federal Register (62 Red. Reg. 44615-44618) and codified at part 897
of title 21,
Code of Federal Regulations, are hereby deemed to be lawful and to have been
lawfully
promulgated by the Secretary under chapter IX and section 701 of the Federal
Food, Drug, and
Cosmetic Act, as amended by this Act, and not under chapter V of the Federal
Food, Drug, and
Cosmetic Act.  The provisions of part 897 that are not in effect on the date of
enactment of this
Act shall take effect as in such part  or upon such later date as determined by
the Secretary by
order.  The Secretary shall amend the designation of authority in such
regulations in accordance
with this subsection.

 (b)  Limitation on Advisory Opinions._ As of the date of enactment of this Act,
the following
documents issued by the Food and Drug Administration shall not constitute
advisory opinions
under section 10.85(d)(1) of title 21, Codeof Federal Regulations, except as they
apply to
tobacco products, and shall not be cited by the Secretary or the Food and Drug
Administration as
binding precedent.

 (1) The preamble to the proposed rule in the document entitled ``Regulations
Restricting the
Sale and Distribution of Cigarettes and Smokeless Tobacco Products to Protect
Children and
Adolescents'' (60 Fed. Reg. 41314-41372 (August 11, 1995)).

 (2) The document entitled ``Nicotine in Cigarettes and Smokeless Tobacco
Products is a Drug
and These Products Are Nicotine Delivery Devices Under the Federal Food, Drug,
and Cosmetic
Act;; (60 Fed. Reg. 41453-41787 (August 11, 1995)).

 (3) The preamble to the final rule in the document entitled ``Regulations
Restricting the Sale
and Distribution of Cigarettes and Smokeless Tobacco to Protect Children and
Adolescents'' (61
Fed. Reg. 44396-44615 (August 28, 1996)).

 (4) The document entitled ``Nicotine in Cigarettes and Smokeless Tobacco is a
Drug and These
Products are Nicotine Delivery Devices Under the Federal Food, Drug, and
Cosmetic Act;
Jurisdictional Determination;; (61 Fed. Reg. 44619-45318 (August 28, 1996)).



TITLE II_REDUCTIONS IN UNDERAGE TOBACCO USE

Subtitle A_Underage Use 

SEC. 201.  FINDINGS.
 The Congress finds the following:

 (1) Reductions in the underage use of tobacco products are critically important
to the public
health.  

 (2) Achieving this critical public health goal can be substantially furthered by
increasing the
price of tobacco products to discourage underage use if reduction targets are
not achieved and by
creating financial incentives for manufacturers to discourage youth from using
their tobacco
products. 

 (3) When reduction targets in underage use are not achieved on an
industry-wide basis, the price
increases that will result from an industry-wide assessment will provide an
additional deterrence
to youth tobacco use.  

 (4) Manufacturer-specific incentives that will be imposed if reduction targets are
not met by a
manufacturer provide a strong incentive for each manufacturer to make all efforts
to discourage
youth use of its brands and ensure the effectiveness of the industry-wide
assessments.

SEC. 202. PURPOSE.
 This title is intended to ensure that, in the event that other measures contained
in this Act prove
to be inadequate to produce substantial reductions in tobacco use by minors,
tobacco companies
will pay additional assessments.  These additional assessments are designed to
lower youth
tobacco consumption in a variety of ways: by triggering further increases in the
price of tobacco
products, by encouraging tobacco companies to work to meet statutory targets
for reductions in
youth tobacco consumption, and providing support for further reduction efforts.

SEC. 203.  GOALS FOR REDUCING UNDERAGE TOBACCO USE.
 (a)  Goals._ As part of a comprehensive national tobacco control policy, the
Secretary, working
in cooperation with State, Tribal, and local governments and the private sector,
shall take all
actions under this Act necessary to ensure that the required percentage
reductions in underage
use of tobacco products set forth in this title are achieved.

 (b)  Required Reductions for Cigarettes._ With respect to cigarettes, the required
percentage
reduction in underage use, as set forth in section 204, means_

I95  

 Calendar Year After Date of Enactment Required Percentage Reduction as a
Percentage of Base
Incidence Percentage in Underage Cigarette Use 

Years 3 and 4 15 percent

Years 5 and 6 30 percent

Years 7, 8, and 9  50 percent

Year 10 and thereafter 60 percent



 (c)  Required Reductions for Smokeless Tobacco._ With respect to smokeless
tobacco products,
the required percentage reduction in underage use, as set forth in section 204,
means_

I95  

 Calendar Year After Date of Enactment Required Percentage Reduction as a
Percentage of Base
Incidence Percentage in Underage Smokeless Tobacco Use 

Years 3 and 4 12.5 percent
Years 5 and 6 25 percent

Years 7, 8, and 9  35 percent

Year 10 and thereafter 45 percent





SEC. 204. LOOK-BACK ASSESSMENT.
 (a)  Annual Performance Survey._ Beginning no later than 1999 and annually
thereafter the
Secretary shall conduct a survey, in accordance with the methodology in
subsection (d)(1), to
determine_

 (1) the  percentage of all young individuals who used a type of tobacco product
within the past
30 days; and

 (2) the percentage of young individuals who identify each brand of each type of
tobacco product
as the usual brand of that type smoked or used within the past 30 days.

 (b)  Annual Determination._ The Secretary shall make an annual determination,
based on the
annual performance survey conducted under subsection (a), of whether the
required percentage
reductions in underage use of tobacco products for a year have been achieved
for the year
involved.  The determination shall be based on the annual percent prevalence of
the use of
tobacco products, for the industry as a whole and of particular manufacturers,
by young
individuals (as determined by the surveys conducted by the Secretary) for the
year involved as
compared to the base incidence percentages.

 (c)  Confidentiality of Data._ The Secretary may conduct a survey relating to
tobacco use
involving minors.  If the information collected in the course of conducting the
annual
performance survey results in the individual supplying the information or
described in it to be
identifiable, the information may not be used for any purpose other than the
purpose for which it
was supplied unless that individual (or that individual's guardian) consents to its
use for such
other purpose.  The information may not be published or released in any other
form if the
individual supplying the information or described in it is identifiable unless that
individual (or
that individual's guardian) consents to its publication or release in other form.

 (d)  Methodolgy._

 (1)  In general._ The survey required by subsection (a) shall_

 (A) be based on a nationally representative sample of young individuals;

 (B) be a household-based, in person survey (which may include
computer-assisted technology);

 (C) measure use of each type of tobacco product within the past 30 days;

 (D) identify the usual brand of each type of tobacco product used within the past
30 days; and

 (E) permit the calculation of the actual percentage reductions in underage use
of a type of
tobacco product (or, in the case of the manufacturer-specific surcharge, the use
of a type of
tobacco product of a manufacturer) based on the point estimates of the
percentage of young
individuals reporting use of a type of tobacco product (or, in the case of the
manufacturer-specific surcharge, the use of a type of tobacco product of a
manufacturer) from the annual
performance survey.

 (2)  Criteria for deeming point estimates correct._ Point estimates under
paragraph (1)(E) are
deemed conclusively to be correct and accurate for calculating actual percentage
reductions in
underage use of a type of tobacco product (or, in the case of the
manufacturer-specific surcharge,
the use of a type of tobacco product of a particular manufacturer) for the
purpose of measuring
compliance with percent reduction targets and calculating surcharges provided
that the precision
of estimates (based on sampling error) of the percentage of young individuals
reporting use of a
type of tobacco product (or, in the case of the manufacturer-specific surcharge,
the use of a type
of tobacco product of a manufacturer) is such that the 95-percent confidence
interval around
such point estimates is no more than plus or minus 1 percent. 

 (3)  Survey deemed correct, proper, and accurate._ A survey using the
methodology required by
this subsection is deemed conclusively to be proper, correct, and accurate for
purposes of this
Act.

 (4)  Secretary may adopt different methodology._ The Secretary by notice and
comment
rulemaking may adopt a survey methodology that is different than the
methodology described in
paragraph (1) if the different methodology is at least as statistically precise as
that methodology.

 (e)  Industry-wide Non-attainment Surcharges._ 

 (1)  Secretary to determine industry-wide non-attainment percentage._ The
Secretary shall
determine the industry-wide non-attainment percentage for cigarettes and for
smokeless tobacco
for each calendar year.

 (2)  Non-attainment surcharge for cigarettes._ For each calendar year in which
the percentage
reduction in underage use required by section 203b) is not attained, the
Secretary shall assess a
surcharge on cigarette manufacturers as follows:I95  

 If the non-attainment percentage is: The surcharge is: 

Not more than 5 percent $80,000,000 multiplied by the non-attainment percentage

More than 5% but not more than 10% $400,000,000, plus $160,000,000 multiplied
by the non-attainment percentage in excess of 5% but not in excess of 10%

More than 10%  $1,200,000,000, plus $240,000,000 multiplied by the
non-attainment percentage
in excess of 10% 

More than 21.6% $4,000,000,000


 (3)  Non-attainment surcharge for smokeless tobacco._ For each year in which
the percentage
reduction in underage use required by section 203c) is not attained, the Secretary
shall assess a
surcharge on smokeless tobacco product manufacturers as follows:

I95  

 If the non-attainment percentage is: The surcharge is: 

Not more than 5 percent $8,000,000 multiplied by the non-attainment percentage

More than 5% but not more than 10% $40,000,000, plus $16,000,000 multiplied by
the non-attainment percentage in excess of 5% but not in excess of 10%

More than 10%  $120,000,000, plus $24,000,000 multiplied by the non-attainment
percentage in
excess of 10% 

More than 21.6% $400,000,000


 (4)  Strict liability; joint and several liability._ Liability for any surcharge imposed
under
subsection (e) shall be_

 (A) strict liability; and

 (B) joint and several liability_

 (i) among all cigarette manufacturers for surcharges imposed under subsection
(e)(2); and

 (ii) among all smokeless tobacco manufacturers for surcharges imposed under
subsection (e)(3).

 (5)  Surcharge liability among manufacturers._ A tobacco product manufacturer
shall be liable
under this subsection to one or more other manufacturers if the plaintiff tobacco
product
manufacturer establishes by a preponderance of the evidence that the defendant
tobacco product
manufacturer, through its acts or omissions, was responsible for a
disproportionate share of the
non-attainment surcharge as compared to the responsibility of the plaintiff
manufacturer.

 (6)  Exemptions for small manufacturers._ 

 (A)  Allocation by market share._ The Secretary shall make such allocations
according to each
manufacturer's share of the domestic cigarette or domestic smokeless tobacco
market, as
appropriate, in the year for which the surcharge is being assessed, based on
actual Federal excise
tax payments.

 (B)  Exemption._ In any year in which a surcharge is being assessed, the
Secretary shall exempt
from payment any tobacco product manufacturer with less than 1 percent of the
domestic market
share for a specific category of tobacco product unless the Secretary finds that
the manufacturer's
products are used by underage individuals at a rate equal to or greater than the
manufacturer's
total market share for the type of tobacco product.  

 (f)  Manufacturer-specific Surcharges._

 (1)  Required percentage reductions._ 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 young individuals who use such manufacturer'