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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's brand or brands as their usual
brand in
accordance with the required percentage reductions described under
subsections (b) (with respect
to cigarettes) and (c ) (with respect to smokeless tobacco).
(2) Application to less popular brands._ Each manufacturer which manufactured
a brand or
brands of tobacco product on or before the date of the enactment of this Act for
which the base
incidence percentage is equal to or less than the de minimis level shall ensure
that the percent
prevalence of young individuals who use the manufacturer's tobacco products
as their usual
brand remains equal to or less than the de minimis level described in paragraph
(4).
(3) New entrants._ Each manufacturer of a tobacco product which begins to
manufacture a
tobacco product after the date of the enactment of this Act shall ensure that the
percent
prevalence of young individuals who use the manufacturer's tobacco products
as their usual
brand is equal to or less than the de minimis level.
(4) De minimis level defined._ The de minimis level is equal to 1 percent
prevalence of the
use of each manufacturer's brands of tobacco product by young individuals (as
determined on the
basis of the annual performance survey conducted by the Secretary) for a year.
(5) Target reduction levels._
(A) Existing manufacturers._ For purposes of this section, the target reduction
level for each
type of tobacco product for a year for a manufacturer is the product of the
required percentage
reduction for a type of tobacco product for a year and the manufacturers base
incidence
percentage for such tobacco product.
(B) New manufacturers; manufacturers with low base incidence percentages._
With respect to a
manufacturer which begins to manufacture a tobacco product after the date of
the enactment of
this Act or a manufacturer for which the baseline level as measured by the
annual performance
survey is equal to or less than the de minimis level described in paragraph (4),
the base
incidence percentage is the de minimis level, and the required percentage
reduction in underage
use for a type of tobacco product with respect to a manufacturer for a year shall
be deemed to be
the number of percentage points necessary to reduce the actual percent
prevalence of young
individuals identifying a brand of such tobacco product of such manufacturer as
the usual brand
smoked or used for such year to the de minimis level.
(6) Surcharge amount._
(A) In general._ If the Secretary determines that the required percentage
reduction in use of a
type of tobacco product has not been achieved by such manufacturer for a year,
the Secretary
shall impose a surcharge on such manufacturer under this paragraph.
(B) Amount._ The amount of the manufacturer-specific surcharge for a type of
tobacco product
for a year under this paragraph is $1,000, multiplied by the number of young
individuals for
which such firm is in noncompliance with respect to its target reduction level.
(C) Determination of number of young individuals._ For purposes of
subparagraph (B) the
number of young individuals for which a manufacturer is in noncompliance for
a year shall be
determined by the Secretary from the annual performance survey and shall be
calculated based
on the estimated total number of young individuals in such year and the actual
percentage
prevalence of young individuals identifying a brand of such tobacco product of
such
manufacturer as the usual brand smoked or used in such year as compared to
such manufacturer's
target reduction level for the year.
(7) De minimis rule._ The Secretary may not impose a surcharge on a
manufacturer for a type
of tobacco product for a year if the Secretary determines that actual percent
prevalence of young
individuals identifying that manufacturer's brands of such tobacco product as the
usual products
smoked or used for such year is less than 1 percent.
(g) Surcharges To Be Adjusted for Inflation._
(1) In general._ Beginning with the fourth calendar year after the date of
enactment of this Act,
each dollar amount in the tables in subsections (e)(2), (e)(3), and (f)(6)(B) shall
be increased by
the inflation adjustment.
(2) Inflation adjustment._ For purposes of paragraph (1), the inflation adjustment
for any
calendar year is the percentage (if any) by which_
(A) the CPI for the preceding calendar year, exceeds
(B) the CPI for the calendar year 1998.
(3) CPI._ For purposes of paragraph (2), the CPI for any calendar year is the
average of the
Consumer Price Index for all-urban consumers published by the Department of
Labor.
(4) Rounding._ If any increase determined under paragraph (1) is not a multiple
of $1,000, the
increase shall be rounded to the nearest multiple of $1,000.
(h) Method of Surcharge Assessment._ The Secretary shall assess a surcharge
for a specific
calendar year on or before May 1 of the subsequent calendar year. Surcharge
payments shall be
paid on or before July 1 of the year in which they are assessed. The Secretary
may establish, by
regulation, interest at a rate up to 3 times the prevailing prime rate at the time the
surcharge is
assessed, and additional charges in an amount up to 3 times the surcharge, for
late payment of
the surcharge.
(i) Business Expense Deduction._ Any surcharge paid by a tobacco product
manufacturer under
this section shall not be deductible as an ordinary and necessary business
expense or otherwise
under the Internal Revenue Code of 1986.
(j) Appeal Rights._ The amount of any surcharge is committed to the sound
discretion of the
Secretary and shall be subject to judicial review by the United States Court of
Appeals for the
District of Columbia Circuit, based on the arbitrary and capricious standard of
section 706(2)(A)
of title 5, United States Code. Notwithstanding any other provisions of law, no
court shall have
authority to stay any surcharge payments due the Secretary under this Act
pending judicial
review.
(k) Responsibility for Agents._ In any action brought under this subsection, a
tobacco product
manufacturer shall be held responsible for any act or omission of its attorneys,
advertising
agencies, or other agents that contributed to that manufacturer's responsibility
for the surcharge
assessed under this section.
SEC. 205. DEFINITIONS.
In this subtitle:
(1) Base incidence percentage._ The term ``base incidence percentage'' means,
with respect to
each type of tobacco product, the percentage of young individuals determined
to have used such
tobacco product in the first annual performance survey for 1999.
(2) Manufacturers base incidence percentage._ The term ``manufacturers base
incidence
percentage'' is, with respect to each type of tobacco product, the percentage of
young individuals
determined to have identified a brand of such tobacco product of such
manufacturer as the usual
brand smoked or used in the first annual performance survey for 1999.
(3) Young individuals._ The term ``young individuals'' means individuals who
are over 11
years of age and under 18 years of age.
(4) Cigarette manufacturers._ The term ``cigarette manufacturers'' means
manufacturers of
cigarettes sold in the United States.
(5) Non-attainment percentage for cigarettes._ The term ``non-attainment
percentage for
cigarettes'' means the number of percentage points yielded_
(A) for a calendar year in which the percent incidence of underage use of
cigarettes is less than
the base incidence percentage, by subtracting_
(i) the percentage by which the percent incidence of underage use of cigarettes
in that year is
less than the base incidence percentage, from
(ii) the required percentage reduction applicable in that year; and
(B) for a calendar year in which the percent incidence of underage use of
cigarettes is greater
than the base incidence percentage, adding_
(i) the percentage by which the percent incidence of underage use of cigarettes
in that year is
greater than the base incidence percentage; and
(ii) the required percentage reduction applicable in that year.
(6) Non-attainment percentage for smokeless tobacco products._ The term
``non-attainment
percentage for smokeless tobacco products'' means the number of percentage
points yielded_
(A) for a calendar year in which the percent incidence of underage use of
smokeless tobacco
products is less than the base incidence percentage, by subtracting_
(i) the percentage by which the percent incidence of underage use of smokeless
tobacco
products in that year is less than the base incidence percentage, from
(ii) the required percentage reduction applicable in that year; and
(B) for a calendar year in which the percent incidence of underage use of
smokeless tobacco
products is greater than the base incidence percentage, by adding_
(i) the percentage by which the percent incidence of underage use of smokeless
tobacco
products in that year is greater than the base incidence percentage; and
(ii) the required percentage reduction applicable in that year.
(7) Smokeless tobacco product manufacturers._ The term ``smokeless tobacco
product
manufacturers'' means manufacturers of smokeless tobacco products sold in the
United States.
Subtitle B_State Retail Licensing and Enforcement Incentives
SEC. 231. STATE RETAIL LICENSING AND ENFORCEMENT BLOCK GRANTS.
(a) In General._ The Secretary shall make State retail licensing and enforcement
block grants in
accordance with the provisions of this section. There are authorized to be
appropriated to the
Secretary from the National Tobacco Trust Fund $200,000,000 for each fiscal year
to carry out
the provisions of this section.
(b) Requirements._
(1) Establishment._ The Secretary shall provide a block grant, based on
population, under this
subtitle to each State that has in effect a law that_
(A) provides for the licensing of entities engaged in the sale or distribution of
tobacco products
directly to consumers;
(B) makes it illegal to sell or distribute tobacco products to individuals under 18
years of age;
and
(C) meets the standards described in this section.
(2) State agreement required._ In order to receive a block grant under this
section, a State_
(A) shall enter into an agreement with the Secretary to assume responsibilities
for the
implementation and enforcement of a tobacco retailer licensing program;
(B) shall prohibit retailers from selling or otherwise distributing tobacco
products to individuals
under 18 years of age in accordance with the Youth Access Restrictions
regulations promulgated
by the Secretary (21 C.F.R. 897.14(a) and (b));
(C) shall make available to appropriate Federal agencies designated by the
Secretary requested
information concerning retail establishments involved in the sale or distribution
of tobacco
products to consumers; and
(D) shall establish to the satisfaction of the Secretary that it has a law or
regulation that includes
the following:
(i) Licensure; sources; and notice._ A requirement for a State license for each
retail
establishment involved in the sale or distribution of tobacco products to
consumers. A
requirement that a retail establishment may purchase tobacco products only from
Federally-licensed manufacturers, importers, or wholesalers. A program under
which notice is provided to
such establishments and their employees of all licensing requirements and
responsibilities under
State and Federal law relating to the retail distribution of tobacco products.
(ii) Penalties._
(I) Criminal._ Criminal penalties for the sale or distribution of tobacco products
to a consumer
without a license.
(II) Civil._ Civil penalties for the sale or distribution of tobacco products in
violation of State
law, including graduated fines and suspension or revocation of licenses for
repeated violations.
(III) Other._ Other programs, including such measures as fines, suspension of
driver's license
privileges, or community service requirements, for underage youths who
possess, purchase, or
attempt to purchase tobacco products.
(iii) Judicial review._ Judicial review procedures for an action of the State
suspending,
revoking, denying, or refusing to renew any license under its program.
(c) Enforcement._
(1) Undertaking._ Each State that receives a grant under this subtitle shall
undertake to enforce
compliance with its tobacco retailing licensing program in a manner that can
reasonably be
expected to reduce the sale and distribution of tobacco products to individuals
under 18 years of
age. If the Secretary determines that a State is not enforcing the law in
accordance with such an
undertaking, the Secretary may withhold a portion of any unobligated funds
under this section
otherwise payable to that State.
(2) Activities and reports regarding enforcement._ A State that receives a grant
under this
subtitle shall_
(A) conduct monthly random, unannounced inspections of sales or distribution
outlets in the
State to ensure compliance with a law prohibiting sales of tobacco products to
individuals under
18 years of age;
(B) annually submit to the Secretary a report describing in detail_
(i) the activities carried out by the State to enforce underage access laws during
the fiscal year;
(ii) the extent of success the State has achieved in reducing the availability of
tobacco products
to individuals under the age of 18 years;
(iii) how the inspections described in subparagraph (A) were conducted and the
methods used to
identify outlets, with appropriate protection for the confidentiality of information
regarding the
timing of inspections and other investigative techniques whose effectiveness
depends on
continued confidentiality; and
(iv) the identity of the single State agency designated by the Governor of the
State to be
responsible for the implementation of the requirements of this section.
(3) Minimum inspection standards._ Inspections conducted by the State shall
be conducted by
the State in such a way as to ensure a scientifically sound estimate (with a 95
percent confidence
interval that such estimates are accurate to within plus or minus 3 percentage
points), using an
accurate list of retail establishments throughout the State. Such inspections shall
cover a range of
outlets (not preselected on the basis of prior violations) to measure overall levels
of compliance
as well as to identify violations. The sample must reflect the distribution of the
population under
the age of 18 years throughout the State and the distribution of the outlets
throughout the State
accessible to youth. Except as provided in this paragraph, any reports required
by this paragraph
shall be made public. As used in this paragraph, the term ``outlet'' refers to any
location that sells
at retail or otherwise distributes tobacco products to consumers, including to
locations that sell
such products over-the-counter.
(d) Noncompliance._
(1) Inspections._ The Secretary shall withhold from any State that fails to meet
the
requirements of subsection (b) in any calendar year an amount equal to 5 percent
of the amount
otherwise payable under this subtitle to that State for the next fiscal year.
(2) Compliance rate._ The Secretary shall withhold from any State that fails to
demonstrate a
compliance rate of_
(A) at least the annual compliance targets that were negotiated with the
Secretary under section
1926 of the Public Health Service Act (42 U.S.C. 300x_26) as such section was in
effect before
its repeal by this Act through the third fiscal year after the date of enactment of
this Act;
(B) at least 80 percent in the fourth fiscal year after such date;
(C) at least 85 percent in the fifth and sixth fiscal years after such date; and
(D) at least 90 percent in every fiscal year beginning with the seventh fiscal year
after such date,
an amount equal to one percentage point for each percentage point by which the
State failed to
meet the percentage set forth in this subsection for that year from the amount
otherwise payable
under this subtitle for that fiscal year.
(e) Release and Disbursement._
(1) Upon notice from the Secretary that an amount payable under this section
has been ordered
withheld under subsection (d), a State may petition the Secretary for a release
and disbursement
of up to 75 percent of the amount withheld, and shall give timely written notice
of such petition
to the attorney general of that State and to all tobacco product manufacturers.
(2) The agency shall conduct a hearing on such a petition, in which the attorney
general of the
State may participate and be heard.
(3) The burden shall be on the State to prove, by a preponderance of the
evidence, that the
release and disbursement should be made. The Secretary's decision on whether
to grant such a
release, and the amount of any such disbursement, shall be based on whether_
(A) the State presents scientifically sound survey data showing that the State is
making
significant progress toward reducing the use of tobacco products by individuals
who have not
attained the age of 18 years;
(B) the State presents scientifically-based data showing that it has progressively
decreased the
availability of tobacco products to such individuals;
(C) the State has acted in good faith and in full compliance with this Act, and
any rules or
regulations promulgated under this Act;
(D) the State provides evidence that it plans to improve enforcement of these
laws in the next
fiscal year; and
(E) any other relevant evidence.
(4) A State is entitled to interest on any withheld amount released at the average
United States
52-Week Treasury Bill rate for the period between the withholding of the amount
and its release.
(5) Any State attorney general or tobacco product manufacturer aggrieved by a
final decision on
a petition filed under this subsection may seek judicial review of such decision
within 30 days in
the United States Court of Appeals for the District of Columbia Circuit. Unless
otherwise
specified in this Act, judicial review under this section shall be governed by
sections 701
through 706 of title 5, United States Code.
(6) No stay or other injunctive relief enjoining a reduction in a State's allotment
pending appeal
or otherwise may be granted by the Secretary or any court.
(f) Non-participating States Licensing Requirements._ For retailers in States
which have not
established a licensing program under subsection (a), the Secretary shall
promulgate regulations
establishing Federal retail licensing for retailers engaged in tobacco sales to
consumers in those
States. The Secretary may enter into agreements with States for the enforcement
of those
regulations. A State that enters into such an agreement shall receive a grant
under this section to
reimburse it for costs incurred in carrying out that agreement.
(g) Definition._ For the purposes of this section, the term ``first applicable fiscal
year'' means
the first fiscal year beginning after the fiscal year in which funding is made
available to the
States under this section.
SEC. 232. BLOCK GRANTS FOR COMPLIANCE BONUSES.
(a) In General._ The Secretary shall make block grants to States determined to
be eligible under
subsection (b) in accordance with the provisions of this section. There are
authorized to be
appropriated to the Secretary from the National Tobacco Trust Fund $100,000,000
for each fiscal
year to carry out the provisions of this section.
(b) Eligible States._ To be eligible to receive a grant under subsection (a), a
State shall_
(1) prepare and submit to the Secretary an application, at such time, in such
manner, and
containing such information as the Secretary may require; and
(2) with respect to the year involved, demonstrate to the satisfaction of the
Secretary that fewer
than 5 percent of all individuals under 18 years of age who attempt to purchase
tobacco products
in the State in such year are successful in such purchase.
(c) Payout._
(1) Payment to State._ If one or more States are eligible to receive a grant under
this section for
any fiscal year, the amount payable for that fiscal year shall be apportioned
among such eligible
States on the basis of population.
(2) Year in which no State receives grant._ If in any fiscal year no State is
eligible to receive a
grant under this section, then the Secretary may use not more than 25 percent
of the amount
appropriated to carry out this section for that fiscal year to support efforts to
improve State and
local enforcement of laws regulating the use, sale, and distribution of tobacco
products to
individuals under the age of 18 years.
(3) Amounts available without fiscal year limitation._ Any amount appropriated
under this
section remaining unexpended and unobligated at the end of a fiscal year shall
remain available
for obligation and expenditure in the following fiscal year.
SEC. 233. CONFORMING CHANGE.
Section 1926 of the Public Health Service Act (42 U.S.C. 300x_26) is hereby
repealed.
Subtitle C_Tobacco Use Prevention and Cessation Initiatives
SEC. 221. TOBACCO USE PREVENTION AND CESSATION INITIATIVES.
Title XIX of the Public Health Service Act (42 U.S.C. 300w et seq.) is amended by
adding at the
end the following:
``Part D_Tobacco Use Prevention and Cessation Initiatives
``Subpart I_Cessation and Community-Based Prevention Block Grants
``SEC. 1981. FUNDING FROM TOBACCO SETTLEMENT TRUST FUND.
``(a) In General ._From amounts contained in the Public Health Allocation
Account under
section 451(b)(2)(A) and (C) of the National Tobacco Policy and Youth Smoking
Reduction Act
for a fiscal year, there are authorized to be appropriated (under subsection (d) of
such section) to
carry out this subpart_
(1) for cessation activities, the amounts appropriated under section 451 (b)(2)(A);
and
(2) for prevention and education activities, the amounts appropriated under
section 451
(b)(2)(C).
``(b) National Activities ._
``(1)Not more than 10 percent of the amount made available for any fiscal year
under subsection
(a) shall be made available to the Secretary to carry out activities under section
1981B and
1981D(d).
``(2) Not more than 10 percent of the amount available for any fiscal year under
subsection
(a)(1) shall be available to the Secretary to carry out activities under section
1981D(d).
``SEC. 1981A. ALLOTMENTS.
``(a) Amount ._
``(1) In general ._From the amount made available under section 1981 for any
fiscal year the
Secretary, acting through the Director of the Centers for Disease Control and
Prevention
(referred to in this subpart as the `Director'), shall allot to each State an amount
based on a
formula to be developed by the Secretary that is based on the tobacco
prevention and cessation
needs of each State including the needs of the State's minority populations.
``(2) Minimum amount ._In determining the amount of allotments under
paragraph (1), the
Secretary shall ensure that no State receives less than \1/2\ of 1 percent of the
amount available
under section 1981(a) for the fiscal year involved.
``(b) Reallotment ._To the extent that amounts made available under section
1981 for a fiscal
year are not otherwise allotted to States because_
``(1) 1 or more States have not submitted an application or description of
activities in
accordance with section 1981D for the fiscal year;
``(2) 1 or more States have notified the Secretary that they do not intend to use
the full amount
of their allotment; or
``(3) the Secretary has determined that the State is not in compliance with this
subpart, and
therefore is subject to penalties under section 1981D(g);
such excess amount shall be reallotted among each of the remaining States in
proportion to the
amount otherwise allotted to such States for the fiscal year involved without
regard to this
subsection.
``(c) Payments ._
``(1) In general ._The Secretary, acting through the Director of the Centers for
Disease Control
and Prevention, shall utilize the funds made available under this section to make
payments to
States under allotments under this subpart as provided for under section 203 of
the
Intergovernmental Cooperation Act of 1968.
``(2) Federal grantees ._From amounts available under section 1981(b)(2), the
Secretary may
make grants, or supplement existing grants, to entities eligible for funds under
the programs
described in section 1981C(d)(1) and (10) to enable such entities to carry out
smoking cessation
activities under this subpart, except not less than 25 percent of this amount shall
be used for the
program described in 1981C(d)(6).
``(3) Availability of funds ._Any amount paid to a State for a fiscal year under
this subpart and
remaining unobligated at the end of such year shall remain available to such
State for the next
fiscal year for the purposes for which such payment was made.
``(d) Regulations ._Not later than 9 months after the date of enactment of this
part, the
Secretary shall promulgate regulations to implement this subpart. This subpart
shall take effect
regardless of the date on which such regulations are promulgated.
``SEC. 1981B. TECHNICAL ASSISTANCE AND PROVISION OF SUPPLIES AND
SERVICES IN LIEU OF FUNDS.
``(a) Technical Assistance ._The Secretary, acting through the Director of the
Centers for
Disease Control and Prevention, shall, without charge to a State receiving an
allotment under
section 1981A, provide to such State (or to any public or nonprofit private entity
within the
State) technical assistance and training with respect to the planning,
development, operation, and
evaluation of any program or service carried out pursuant to the program
involved. The
Secretary may provide such technical assistance or training directly, through
contract, or through
grants.
``(b) Provision of Supplies and Service in Lieu of Grant Funds ._The Secretary,
at the request
of a State, may reduce the amount of payments to the State under section
1981A(c) by_
``(1) the fair market value of any supplies or equipment furnished by the
Secretary to the State;
and
``(2) the amount of the pay, allowances, and travel expenses of any officer or
employee of the
Federal Government when detailed to the State and the amount of any other
costs incurred in
connection with the detail of such officer or employee;
when the furnishing of such supplies or equipment or the detail of such an
officer or employee is
for the convenience of and at the request of the State and for the purpose of
conducting activities
described in section 1981C. The amount by which any payment is so reduced
shall be available
for payment by the Secretary of the costs incurred in furnishing the supplies or
equipment or in
detailing the personnel, on which reduction of the payment is based, and the
amount shall be
deemed to be part of the payment and shall be deemed to have been paid to the
State.
``SEC. 1981C. PERMITTED USERS OF CESSATION BLOCK GRANTS AND OF
COMMUNITY-BASED PREVENTION BLOCK GRANTS.
``(a) Tobacco Use Cessation Activities ._Except as provided in subsections (d)
and (e),
amounts described in subsection (a)(1) may be used for the following:
``(1) Evidence-based cessation activities described in the plan of the State,
submitted in
accordance with section 1981D, including_
``(A) evidence-based programs designed to assist individuals, especially young
people and
minorities who have been targeted by tobacco product manufacturers, to quit
their use of tobacco
products;
``(B) training in cessation intervention methods for health plans and health
professionals,
including physicians, nurses, dentists, health educators, public health
professionals, and other
health care providers;
``(C) programs to encourage health insurers and health plans to provide
coverage for evidence-based tobacco use cessation interventions and therapies,
except that the use of any funds under
this clause to offset the cost of providing a smoking cessation benefit shall be
on a temporary
demonstration basis only;
``(D) culturally and linguistically appropriate programs targeted toward minority
and low-income individuals, individuals residing in medically underserved areas,
uninsured individuals,
and pregnant women;
``(E) programs to encourage employer-based wellness programs to provide
evidence-based
tobacco use cessation intervention and therapies; and
``(F) programs that target populations whose smoking rate is disproportionately
high in
comparison to the smoking rate population-wide in the State.
``(2) Planning, administration, and educational activities related to the activities
described in
paragraph (1).
``(3) The monitoring and evaluation of activities carried out under paragraphs (1)
and (2), and
reporting and disseminating resulting information to health professionals and the
public.
``(4) Targeted pilot programs with evaluation components to encourage
innovation and
experimentation with new methodologies.
``(b) State and Community Action Activities ._Except as provided in subsections
(d) and (e),
amounts described in subsection (a)(2) may be used for the following:
``(1) Evidence-based activities for tobacco use prevention and control described
in the plan of
the State, submitted in accordance with section 1981D, including_
``(A) State and community initiatives;
``(B) community-based prevention programs, similar to programs currently
funded by NIH;
``(C) programs focused on those populations within the community that are most
at risk to use
tobacco products or that have been targeted by tobacco advertising or
marketing;
``(D) school programs to prevent and reduce tobacco use and addiction,
including school
programs focused in those regions of the State with high smoking rates and
targeted at
populations most at risk to start smoking;
``(E) culturally and linguistically appropriate initiatives targeted towards minority
and low-income individuals, individuals residing in medically underserved areas,
and women of child-bearing age;
``(F) the development and implementation of tobacco-related public health and
health
promotion campaigns and public policy initiatives;
``(G) assistance to local governmental entities within the State to conduct
appropriate anti-tobacco activities.
``(H) strategies to ensure that the State's smoking prevention activities include
minority, low-income, and other undeserved populations; and
``(I) programs that target populations whose smoking rate is disproportionately
high in
comparison to the smoking rate population-wide in the State.
``(2) Planning, administration, and educational activities related to the activities
described in
paragraph (1).
``(3) The monitoring and evaluation of activities carried out under paragraphs (1)
and (2), and
reporting and disseminating resulting information to health professionals and the
public.
``(4) Targeted pilot programs with evaluation components to encourage
innovation and
experimentation with new methodologies.
``(c) Coordination ._Tobacco use cessation and community-based prevention
activities
permitted under subsections (b) and (c) may be conducted in conjunction with
recipients of other
Federally_funded programs within the State, including_
``(1) the special supplemental food program under section 17 of the Child
Nutrition Act of 1966
(42 U.S.C. 1786);
``(2) the Maternal and Child Health Services Block Grant program under title V
of the Social
Security Act (42 U.S.C. 701 et seq.);
``(3) the State Children's Health Insurance Program of the State under title XXI
of the Social
Security Act (42 U.S.C. 13397aa et seq.);
``(4) the school lunch program under the National School Lunch Act (42 U.S.C.
1751 et seq.);
``(5) an Indian Health Service Program;
``(6) the community, migrant, and homeless health centers program under
section 330 of the
Public Health Service Act (42 U.S.C. 254b);
``(7) state-initiated smoking cessation programs that include provisions for
reimbursing
individuals for medications or therapeutic techniques;
``(8) the substance abuse and mental health services block grant program, and
the preventive
health services block grant program, under title XIX of the Public Health Service
Act (42 U.S.C.
300w et seq.);
``(9) the Medicaid program under title XIX of the Social Security Act (42 U.S.C.
1396 et seq.);
and
``(10) programs administered by the Department of Defense and the Department
of Veterans
Affairs.
``(d) Limitation ._A State may not use amounts paid to the State under section
1981A(c) to_
``(1) make cash payments except with appropriate documentation to intended
recipients of
tobacco use cessation services;
``(2) fund educational, recreational, or health activities not based on scientific
evidence that the
activity will prevent smoking or lead to success of cessation efforts
``(3) purchase or improve land, purchase, construct, or permanently improve
(other than minor
remodeling) any building or other facility, or purchase major medical equipment;
``(4) satisfy any requirement for the expenditure of non-Federal funds as a
condition of the
receipt of Federal funds; or
``(5) provide financial assistance to any entity other than a public or nonprofit
private entity or a
private entity consistent with subsection (b)(1)(C).
This subsection shall not apply to the support of targeted pilot programs that use
innovative and
experimental new methodologies and include an evaluation component.
``(e) Administration ._Not more than 5 percent of the allotment of a State for a
fiscal year under
this subpart may be used by the State to administer the funds paid to the State
under section
1981A(c). The State shall pay from non-Federal sources the remaining costs of
administering
such funds.
``SEC. 1981D. ADMINISTRATIVE PROVISIONS.
``(a) Application ._The Secretary may make payments under section 1981A(c)
to a State for a
fiscal year only if_
``(1) the State submits to the Secretary an application, in such form and by such
date as the
Secretary may require, for such payments;
``(2) the application contains a State plan prepared in a manner consistent with
section 1905(b)
and in accordance with tobacco-related guidelines promulgated by the Secretary;
``(3) the application contains a certification that is consistent with the
certification required
under section 1905(c); and
``(4) the application contains such assurances as the Secretary may require
regarding the
compliance of the State with the requirements of this subpart (including
assurances regarding
compliance with the agreements described in subsection (c)).
``(b) State Plan ._A State plan under subsection (a)(2) shall be developed in a
manner
consistent with the plan developed under section 1905(b) except that such plan_
``(1) with respect to activities described in section 1981C(b)_
``(A) shall provide for tobacco use cessation intervention and treatment
consistent with the
tobacco use cessation guidelines issued by the Agency for Health Care Policy
and Research, or
another evidence-based guideline approved by the Secretary, or treatments using
drugs, human
biological products, or medical devices approved by the Food and Drug
Administration, or
otherwise legally marketed under the Federal Food, Drug and Cosmetic Act for
use as tobacco
use cessation therapies or aids;
``(B) may, to encourage innovation and experimentation with new methodologies,
provide for or
may include a targeted pilot program with an evaluation component;
``(C) shall provide for training in tobacco use cessation intervention methods for
health plans
and health professionals, including physicians, nurses, dentists, health
educators, public health
professionals, and other health care providers;
``(D) shall ensure access to tobacco use cessation programs for rural and
underserved
populations;
``(E) shall recognize that some individuals may require more than one attempt
for successful
cessation; and
``(F) shall be tailored to the needs of specific populations, including minority
populations; and
``(2) with respect to State and community-based prevention activities described
in section
1981C(c), shall specify the activities authorized under such section that the State
intends to carry
out.
``(c) Certification ._The certification referred to in subsection (a)(3) shall be
consistent with the
certification required under section 1905(c), except that
``(1) the State shall agree to expend payments under section 1981A(c) only for
the activities
authorized in section 1981C;
``(2) paragraphs (9) and (10) of such section shall not apply; and
``(3) the State is encouraged to establish an advisory committee in accordance
with section
1981E.
``(d) Reports, Data, and Audits ._The provisions of section 1906 shall apply with
respect to a
State that receives payments under section 1981A(c) and be applied in a manner
consistent with
the manner in which such provisions are applied to a State under part, except
that the data sets
referred to in section 1905(a)(2) shall be developed for uniformly defining levels
of youth and
adult use of tobacco products, including uniform data for racial and ethnic
groups, for use in the
reports required under this subpart.
``(e) Withholding ._The provisions of 1907 shall apply with respect to a State
that receives
payments under section 1981A(c) and be applied in a manner consistent with the
manner in
which such provisions are applied to a State under part A.
``(f) Nondiscrimination ._The provisions of 1908 shall apply with respect to a
State that
receives payments under section 1981A(c) and be applied in a manner consistent
with the
manner in which such provisions are applied to a State under part A.
``(g) Criminal Penalties ._The provisions of 1909 shall apply with respect to a
State that
receives payments under section 1981A(c) and be applied in a manner consistent
with the
manner in which such provisions are applied to a State under part A.
``SEC. 1981E. STATE ADVISORY COMMITTEE.
``(a) In General ._For purposes of sections 1981D(c)(3), an advisory committee
is in
accordance with this section if such committee meets the conditions described
in this subsection.
``(b) Duties ._The recommended duties of the committee are_
``(1) to hold public hearings on the State plans required under sections 1981D;
and
``(2) to make recommendations under this subpart regarding the development
and
implementation of such plans, including recommendations on_
``(A) the conduct of assessments under the plans;
``(B) which of the activities authorized in section 1981C should be carried out in
the State;
``(C) the allocation of payments made to the State under section 1981A(c);
``(D) the coordination of activities carried out under such plans with relevant
programs of other
entities; and
``(E) the collection and reporting of data in accordance with section 1981D.
``(c) Composition ._
``(1) In general ._The recommended composition of the advisory committee is
members of the
general public, such officials of the health departments of political subdivisions
of the State,
public health professionals, teenagers, minorities, and such experts in tobacco
product research
as may be necessary to provide adequate representation of the general public
and of such health
departments, and that members of the committee shall be subject to the
provisions of sections
201, 202, and 203 of title 18, United States Code.
``(2) Representatives ._With respect to compliance with paragraph (1), the
membership of the
advisory committee may include representatives of community-based
organizations (including
minority community-based organizations), schools of public health, and entities
to which the
State involved awards grants or contracts to carry out activities authorized under
section 1981C.
``Subpart II_Tobacco-Free Counter-Advertising Programs
``SEC. 1982. FEDERAL-STATE COUNTER-ADVERTISING PROGRAMS.
``(a) National Campaign ._
``(1) In general ._The Secretary shall conduct a national campaign to reduce
tobacco usage
through media-based (such as counter-advertising campaigns) and
nonmedia-based education,
prevention and cessation campaigns designed to discourage the use of tobacco
products by
individuals, to encourage those who use such products to quit, and to educate
the public about
the hazards of exposure to environmental tobacco smoke.
``(2) Requirements ._The national campaign under paragraph (1) shall_
``(A) target those populations that have been targeted by tobacco industry
advertising using
culturally and linguistically appropriate means;
``(B) include a research and evaluation component; and
``(C) be designed in a manner that permits the campaign to be modified for use
at the State or
local level.
``(b) Establishment of an Advisory Board ._
``(1) In general ._The Secretary shall establish a board to be known as the
`National Tobacco
Free Education Advisory Board' (referred to in this section as the `Board') to
evaluate and
provide long range planning for the development and effective dissemination of
public
informational and educational campaigns and other activities that are part of the
campaign under
subsection (a).
``(2) Composition ._The Board shall be composed of_
``(A) 9 non-Federal members to be appointed by the President, after consultation
and agreement
with the Majority and Minority Leaders of the Senate and the Speaker and
Minority Leader of
the Health or Representatives, of which_
``(i) at least 3 such members shall be individuals who are widely recognized by
the general
public for cultural, educational, behavioral science or medical achievement;
``(ii) at least 3 of whom shall be individuals who hold positions of leadership in
major public
health organizations, including minority public health organizations; and
``(iii) at least 3 of whom shall be individuals recognized as experts in the field of
advertising
and marketing, of which_
``(I) 1 member shall have specific expertise in advertising and marketing to
children and teens;
and
``(II) 1 member shall have expertise in marketing research and evaluation; and
``(B) the Surgeon General, the Director of the Centers for Disease Control and
Prevention, or
their designees, shall serve as an ex officio members of the Board.
``(3) Terms and vacancies ._The members of the Board shall serve for a term of
3 years. Such
terms shall be staggered as determined appropriate at the time of appointment
by the Secretary.
Any vacancy in the Board shall not affect its powers, but shall be filled in the
same manner as
the original appointment.
``(4) Travel expenses ._The members of the Board shall be allowed travel
expenses, including
per diem in lieu of subsistence, at rates authorized for employees of agencies
under subchapter I
of chapter 57 of title 5, United States Code, while away from their homes or
regular places of
business in the performance of services for the Board.
``(5) Awards._ In carrying out subsection (a), the Secretary may_
``(A) enter into contracts with or award grants to eligible entities to develop
messages and
campaigns designed to prevent and reduce the use of tobacco products that are
based on effective
strategies to affect behavioral changes in children and other targeted
populations, including
minority populations;
``(B) enter into contracts with or award grants to eligible entities to carry out
public
informational and educational activities designed to reduce the use of tobacco
products;
``(6) Powers and duties._ The Board may_
``(A) hold such hearings, sit and act at such times and places, take such
testimony, and receive
such evidence as the Board considers advisable to carry out the purposes of this
section; and
``(B) secure directly from any Federal department or agency such information as
the Board
considers necessary to carry out the provisions of this section.
``(c) Eligibility ._To be eligible to receive funding under this section an entity
shall_
``(1) be a_
``(A) public entity or a State health department; or
``(B) private or nonprofit private entity that_
``(i)(I) is not affiliated with a tobacco product manufacturer or importer;
``(II) has a demonstrated record of working effectively to reduce tobacco product
use; or
``(III) has expertise in conducting a multi-media communications campaign; and
``(ii) has expertise in developing strategies that affect behavioral changes in
children and other
targeted populations, including minority populations;
``(2) prepare and submit to the Secretary an application at such time, in such
manner, and
containing such information as the Secretary may require, including a description
of the
activities to be conducted using amounts received under the grant or contract;
``(3) provide assurances that amounts received under this section will be used
in accordance
with subsection (c); and
``(4) meet any other requirements determined appropriate by the Secretary.
``(d) Use of Funds ._An entity that receives funds under this section shall use
amounts provided
under the grant or contract to conduct multi-media and non-media public
educational,
informational, marketing and promotional campaigns that are designed to
discourage and de-glamorize the use of tobacco products, encourage those
using such products to quit, and educate
the public about the hazards of exposure to environmental tobacco smoke. Such
amounts may be
used to design and implement such activities and shall be used to conduct
research concerning
the effectiveness of such programs.
``(e) Needs of Certain Populations ._In awarding grants and contracts under this
section, the
Secretary shall take into consideration the needs of particular populations,
including minority
populations, and use methods that are culturally and linguistically appropriate.
``(f) Coordination ._The Secretary shall ensure that programs and activities
under this section
are coordinated with programs and activities carried out under this title.
``(g) Allocation of Funds ._Not to exceed_
``(1) 25 percent of the amount made available under subsection (h) for each
fiscal year shall be
provided to States for State and local media-based and nonmedia-based
education, prevention
and cessation campaigns;
``(2) no more than 20 percent of the amount made available under subsection (h)
for each fiscal
year shall be used specifically for the development of new messages and
campaigns;
``(3) the remainder shall be used specifically to place media messages and carry
out other
dissemination activities described in subsection (d); and
``(4) half of 1 percent for administrative costs and expenses.
``(h) Trigger ._No expenditures shall be made under this section during any
fiscal year in which
the annual amount appropriated for the Centers for Disease Control and
Prevention is less than
the amount so appropriated for the prior fiscal year.''.
``Part E_Reducing Youth Smoking and Tobacco-Related Diseases Through
Research
``SEC. 1991. FUNDING FROM TOBACCO SETTLEMENT TRUST FUND.
No expenditures shall be made under sections 451(b) or (c)_
``(1) for the National Institutes of Health during any fiscal year in which the
annual amount
appropriated for such Institutes is less than the amount so appropriated for the
prior fiscal year;
``(2) for the Centers for Disease Control and Prevention during any fiscal year
in which the
annual amount appropriated for such Centers is less than the amount so
appropriated for the prior
fiscal year; or
``(3) for the Agency for Health Care Policy and Research during any fiscal year
in which the
annual amount appropriated for such Agency is less than the amount so
appropriated for the
prior fiscal year.
``SEC. 1991A. STUDY BY THE INSTITUTE OF MEDICINE.
``(a) Contract ._Not later than 60 days after the date of enactment of this title,
the Secretary
shall enter into a contract with the Institute of Medicine for the conduct of a
study on the
framework for a research agenda and research priorities to be used under this
part.
``(b) Considerations ._
``(1) In general ._In developing the framework for the research agenda and
research priorities
under subsection (a) the Institute of Medicine shall focus on increasing
knowledge concerning
the biological, social, behavioral, public health, and community factors involved
in the
prevention of tobacco use, reduction of tobacco use, and health consequences
of tobacco use.
``(2) Specific considerations ._In the study conducted under subsection (a), the
Institute of
Medicine shall specifically include research on_
``(A) public health and community research relating to tobacco use prevention
methods,
including public education, media, community strategies;
``(B) behavioral research relating to addiction, tobacco use, and patterns of
smoking, including
risk factors for tobacco use by children, women, and racial and ethnic minorities;
``(C) health services research relating to tobacco product prevention and
cessation treatment
methodologies;
``(D) surveillance and epidemiology research relating to tobacco;
``(E) biomedical, including clinical, research relating to prevention and treatment
of tobacco-related diseases, including a focus on minorities, including racial and
ethnic minorities;
``(F) the effects of tobacco products, ingredients of tobacco products, and
tobacco smoke on the
human body and methods of reducing any negative effects, including the
development of non-addictive, reduced risk tobacco products;
``(G) differentials between brands of tobacco products with respect to health
effects or
addiction;
``(H) risks associated with environmental exposure to tobacco smoke, including
a focus on
children and infants;
``(I) effects of tobacco use by pregnant women; and
``(J) other matters determined appropriate by the Institute.
``(c) Report ._Not later than 10 months after the date on which the Secretary
enters into the
contract under subsection (a), the Institute of Medicine shall prepare and submit
to the Secretary,
the Committee on Labor and Human Resources, and the Committee on
Appropriations of the
Senate, and the Committee on Commerce of the House of Representatives, a
report that shall
contain the findings and recommendations of the Institute for the purposes
described in
subsection (b).
``SEC. 1991B. RESEARCH COORDINATION.
``(a) In General ._The Secretary shall foster coordination among Federal
research agencies,
public health agencies, academic bodies, and community groups that conduct
or support tobacco-related biomedical, clinical, behavioral, health services, public
health and community, and
surveillance and epidemiology research activities.
``(b) Report ._The Secretary shall prepare and submit a report on a biennial
basis to the
Committee on Labor and Human Resources, and the Committee on
Appropriations of the Senate,
and the Committee on Commerce of the House of Representatives on the current
and planned
tobacco-related research activities of participating Federal agencies.
``SEC. 1991C. RESEARCH ACTIVITIES OF THE CENTERS FOR DISEASE
CONTROL
AND PREVENTION.
``(a) Duties ._The Director of the Centers for Disease Control and Prevention
shall, from
amounts provided under section 451(c), and after review of the study of the
Institute of
Medicine, carry out tobacco-related surveillance and epidemiologic studies and
develop tobacco
control and prevention strategies; and
``(b) Youth Surveillance Systems._ From amounts provided under section
451(b), the Director
of the Centers for Disease Control and Prevention shall provide for the use of
youth surveillance
systems to monitor the use of all tobacco products by individuals under the age
of 18, including
brands-used to enable determinations to be made of company-specific youth
market share.
``SEC. 1991D. RESEARCH ACTIVITIES OF THE NATIONAL INSTITUTES OF
HEALTH.
``(a) Funding ._There are authorized to be appropriated, from amounts in the
National Tobacco
Settlement Trust Fund established by section 401 of the National Tobacco Policy
and Youth
Smoking Reduction Act, other than from amounts in the State Litigation
Settlement Account, to
carry out this section $2,500,000,000 for each of the fiscal years 1999 through
2008.
``(b) Expenditure of Funds ._The Director of the National Institutes of Health
shall provide
funds to conduct or support epidemiological, behavioral, biomedical, and social
science research,
including research related to the prevention and treatment of tobacco addiction,
and the
prevention and treatment of diseases associated with tobacco use.
``(c) Guaranteed Minimum._ Of the funds made available to the National
Institutes of Health
under this section, such sums as may be necessary, may be used to support
epidemiological,
behavioral, and social science research related to the prevention and treatment
of tobacco
addiction.
``(d) Nature of Research ._Funds made available under subsection (d) may be
used to conduct
or support research with respect to one or more of the following_
``(1) the epidemiology of tobacco use;
``(2) the etiology of tobacco use;
``(3) risk factors for tobacco use by children;
``(4) prevention of tobacco use by children, including school and
community-based programs,
and alternative activities;
``(5) the relationship between tobacco use, alcohol abuse and illicit drug abuse;
``(6) behavioral and pharmacological smoking cessation methods and
technologies, including
relapse prevention;
``(7) the toxicity of tobacco products and their ingredients;
``(8) the relative harmfulness of different tobacco products;
``(9) environmental exposure to tobacco smoke;
``(10) the impact of tobacco use by pregnant women on their fetuses;
``(11) the redesign of tobacco products to reduce risks to public health and
safety; and
``(12) other appropriate epidemiological, behavioral, and social science
research.
``(e) Coordination ._In carrying out tobacco-related research under this section,
the Director of
the National Institutes of Health shall ensure appropriate coordination with the
research of other
agencies, and shall avoid duplicative efforts through all appropriate means.
``(h) Administration._ The director of the NIH Office of Behavioral and Social
Sciences
Research may_
``(1) identify tobacco-related research initiatives that should be conducted or
supported by the
research institutes, and develop such projects in cooperation with such
institutes;
``(2) coordinate tobacco-related research that is conducted or supported by the
National
Institutes of Health;
``(3) annually recommend to Congress the allocation of anti-tobacco research
funds among the
national research institutes; and
``(4) establish a clearinghouse for information about tobacco-related research
conducted by
governmental and non-governmental bodies.
``(f) Trigger ._No expenditure shall be made under subsection (a) during any
fiscal year in
which the annual amount appropriated for the National Institutes of Health is less
than the
amount so appropriated for the prior fiscal year.
``(g) Report._ The Director of the NIH shall every 2 years prepare and submit
to the Congress
a report ____ research activities, including funding levels, for research made
available under
subsection (c).
(b) Medicaid Coverage of Outpatient Smoking Cessation Agents._ Paragraph
(2) of section
1927(d) of the Public Health Service Act (42 U.S.C. 1396r-8(d)) is amended_
(1) by striking subparagraph (E) and redesignating subparagraphs (F) through
(J) as
subparagraphs (E) through (I); and
(2) by striking ``drugs.'' in subparagraph (F), as redesignated, and inserting
``drugs, except
agents, approved by the Food and Drug Administration, when used to promote
smoking
cessation.''.
``SEC. 1991E. RESEARCH ACTIVITIES OF THE AGENCY FOR HEALTH CARE
POLICY
AND RESEARCH.
``(a) In General ._The Administrator of the Agency for Health Care Policy and
Research shall
carry out outcomes, effectiveness, cost-effectiveness, and other health services
research related
to effective interventions for the prevention and cessation of tobacco use and
appropriate
strategies for implementing those services, the outcomes and delivery of care for
diseases related
to tobacco use, and the development of quality measures for evaluating the
provision of those
services.
``(b) Analyses and Special Programs ._The Secretary, acting through the
Administrator of the
Agency for Health Care Policy and Research, shall support_
``(1) and conduct periodic analyses and evaluations of the best scientific
information in the area
of smoking and other tobacco product use cessation; and
``(2) the development and dissemination of special programs in cessation
intervention for
health plans and national health professional societies.''.
TITLE III_TOBACCO PRODUCT WARNINGS AND SMOKE CONSTITUENT
DISCLOSURE
Subtitle A_Product Warnings, Labeling and Packaging
SEC. 301. CIGARETTE LABEL AND ADVERTISING WARNINGS.
(a) In General._ Section 4 of the Federal Cigarette Labeling and Advertising Act
(15 U.S.C.
1333) is amended to read as follows:
``SEC. 4. LABELING.
``(a) Label Requirements._
``(1) In general._ It shall be unlawful for any person to manufacture, package,
or import for
sale or distribution within the United States any cigarettes the package of which
fails to bear, in
accordance with the requirements of this section, one of the following labels:
``WARNING: Cigarettes are addictive''
``WARNING: Tobacco smoke can harm your children''
``WARNING: Cigarettes cause fatal lung disease''
``WARNING: Cigarettes cause cancer''
``WARNING: Cigarettes cause strokes and heart disease''
``WARNING: Smoking during pregnancy can harm your baby''
``WARNING: Smoking can kill you''
``WARNING: Tobacco smoke causes fatal lung disease in non-smokers''
``WARNING: Quitting smoking now greatly reduces serious risks to your health''
``(2) Placement; typography; etc.._
``(A) In general._ Each label statement required by paragraph (1) shall be
located in the upper
portion of the front and rear panels of the package, directly on the package
underneath the
cellophane or other clear wrapping. Except as provided in subparagraph (B),
each label
statement shall comprise at least the top 25 percent of the front and rear panels
of the package.
The word ``WARNING'' shall appear in capital letters and all text shall be in
conspicuous and
legible 17-point type, unless the text of the label statement would occupy more
than 70 percent
of such area, in which case the text may be in a smaller conspicuous and legible
type size,
provided that at least 60 percent of such area is occupied by required text. The
text shall be black
on a white background, or white on a black background, in a manner that
contrasts, by
typography, layout, or color, with all other printed material on the package, in an
alternating
fashion under the plan submitted under subsection (b)(4).
``(B) Flip-top boxes._ For any cigarette brand package manufactured or
distributed before
January 1, 2000, which employs a flip-top style (if such packaging was used for
that brand in
commerce prior to June 21, 1997), the label statement required by paragraph (1)
shall be located
on the flip-top area of the package, even if such area is less than 25 percent of
the area of the
front panel. Except as provided in this paragraph, the provisions of this
subsection shall apply to
such packages.
``(3) Does not apply to foreign distribution._ The provisions of this subsection
do not apply to
a tobacco product manufacturer or distributor of cigarettes which does not
manufacture, package,
or import cigarettes for sale or distribution within the United States.
``(b) Advertising Requirements._
``(1) In general._ It shall be unlawful for any tobacco product manufacturer,
importer,
distributor, or retailer of cigarettes to advertise or cause to be advertised within
the United States
any cigarette unless its advertising bears, in accordance with the requirements
of this section,
one of the labels specified in subsection (a) of this section.
``(2) Typography, etc.._ Each label statement required by subsection (a) of this
section in
cigarette advertising shall comply with the standards set forth in this paragraph.
For press and
poster advertisements, each such statement and (where applicable) any required
statement
relating to tar, nicotine, or other constituent yield shall comprise at least 20
percent of the area of
the advertisement and shall appear in a conspicuous and prominent format and
location at the top
of each advertisement within the trim area. The Secretary may revise the required
type sizes in
such area in such manner as the Secretary determines appropriate. The word
``WARNING'' shall
appear in capital letters, and each label statement shall appear in conspicuous
and legible type.
The text of the label statement shall be black if the background is white and
white if the
background is black, under the plan submitted under paragraph (4) of this
subsection. The label
statements shall be enclosed by a rectangular border that is the same color as
the letters of the
statements and that is the width of the first downstroke of the capital ``W'' of the
word
``WARNING'' in the label statements. The text of such label statements shall be
in a typeface pro
rata to the following requirements: 45-point type for a whole-page broadsheet
newspaper
advertisement; 39-point type for a half-page broadsheet newspaper
advertisement; 39-point type
for a whole-page tabloid newspaper advertisement; 27-point type for a half-page
tabloid
newspaper advertisement; 31.5-point type for a double page spread magazine or
whole-pagemagazine advertisement; 22.5-point type for a 28 centimeter by 3
columnadvertisement; and
15-point type for a 20 centimeter by 2 column advertisement. The label
statements shall be in
English, except that in the case of_
``(A) an advertisement that appears in a newspaper, magazine, periodical, or
other publication
that is not in English, the statements shall appear in the predominant language
of the publication;
and
``(B) in the case of any other advertisement that is not in English, the
statements shall appear in
the same language as that principally used in the advertisement.
``(3) Adjustment by secretary._ The Secretary may, through a rulemaking under
section 553 of
title 5, United States Code, adjust the format and type sizes for the label
statements required by
this section or the text, format, and type sizes of any required tar, nicotine yield,
or other
constituent disclosures, or to establish the text, format, and type sizes for any
other disclosures
required under the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et. seq.).
The text of
any such label statements or disclosures shall be required to appear only within
the 20 percent
area of cigarette advertisements provided by paragraph (2) of this subsection.
The Secretary shall
promulgate regulations which provide for adjustments in the format and type
sizes of any text
required to appear in such area to ensure that the total text required to appear
by law will fit
within such area.
``(4) Marketing requirements._
``(A) The label statements specified in subsection (a)(1) shall be randomly
displayed in each
12-month period, in as equal a number of times as is possible on each brand of
the product and
be randomly distributed in all areas of the United States in which the product is
marketed in
accordance with a plan submitted by the tobacco product manufacturer,
importer, distributor, or
retailer and approved by the Secretary.
``(B) The label statements specified in subsection (a)(1) shall be rotated
quarterly in alternating
sequence in advertisements for each brand of cigarettes in accordance with a
plan submitted by
the tobacco product manufacturer, importer, distributor, or retailer to, and
approved by, the
Secretary.
``(C) The Secretary shall review each plan submitted under subparagraph (B)
and approve it if
the plan_
``(i) will provide for the equal distribution and display on packaging and the
rotation required
in advertising under this subsection; and
``(ii) assures that all of the labels required under this section will be displayed
by the tobacco
product manufacturer, importer, distributor, or retailer at the same time.''.
(b) Repeal of Prohibition on State Restriction._ Section 5 of the Federal
Cigarette Labeling and
Advertising Act (15 U.S.C. 1334) is amended_
(1) by striking ``(a) Additional statements._'' in subsection (a); and
(2) by striking subsection (b).
SEC. 302. AUTHORITY TO REVISE CIGARETTE WARNING LABEL STATEMENTS.
Section 4 of the Federal Cigarette Labeling and Advertising Act ( 15 U.S.C.
1333), as amended
by section 301 of this title, is further amended by adding at the end the following:
``(c) Change in Required Statements._ The Secretary may, by a rulemaking
conducted under
section 553 of title 5, United States Code, adjust the format, type size, and text
of any of the
warning label statements required by subsection (a) of this section, or establish
the format, type
size, and text of any other disclosures required under the Federal Food, Drug,
and Cosmetic Act
(21 U.S.C. 301 et seq.), if the Secretary finds that such a change would promote
greater public
understanding of the risks associated with the use of smokeless tobacco
products.''.
SEC. 303. SMOKELESS TOBACCO LABELS AND ADVERTISING WARNINGS.
Section 3 of the Comprehensive Smokeless Tobacco Health Education Act of
1986 (15 U.S.C.
4402) is amended to read as follows:
``SEC. 3. SMOKELESS TOBACCO WARNING.
``(a) General Rule._
``(1) It shall be unlawful for any person to manufacture, package, or import for
sale or
distribution within the United States any smokeless tobacco product unless the
product package
bears, in accordance with the requirements of this Act, one of the following
labels:
``WARNING: This product can cause mouth cancer''
``WARNING: This product can cause gum disease and tooth loss''
``WARNING: This product is not a safe alternative to cigarettes''
``WARNING: Smokeless tobacco is addictive''
``(2) Each label statement required by paragraph (1) shall be_
``(A) located on the 2 principal display panels of the package, and each label
statement shall
comprise at least 25 percent of each such display panel; and
``(B) in 17-point conspicuous and legible type and in black text on a white
background, or
white text on a black background, in a manner that contrasts by typography,
layout, or color,
with all other printed material on the package, in an alternating fashion under the
plan submitted
under subsection (b)(3), except that if the text of a label statement would occupy
more than 70
percent of the area specified by subparagraph (A), such text may appear in a
smaller type size, so
long as at least 60 percent of such warning area is occupied by the label
statement.
``(3) The label statements required by paragraph (1) shall be introduced by each
tobacco
product manufacturer, packager, importer, distributor, or retailer of smokeless
tobacco products
concurrently into the distribution chain of such products.
``(4) The provisions of this subsection do not apply to a tobacco product
manufacturer or
distributor of any smokeless tobacco product that does not manufacture,
package, or import
smokeless tobacco products for sale or distribution within the United States.
``(b) Required Labels._
``(1) It shall be unlawful for any tobacco product manufacturer, packager,
importer, distributor,
or retailer of smokeless tobacco products to advertise or cause to be advertised
within the United
States any smokeless tobacco product unless its advertising bears, in
accordance with the
requirements of this section, one of the labels specified in subsection (a).
``(2) Each label statement required by subsection (a) in smokeless tobacco
advertising shall
comply with the standards set forth in this paragraph. For press and poster
advertisements, each
such statement and (where applicable) any required statement relating to tar,
nicotine, or other
constituent yield shall_
``(A) comprise at least 20 percent of the area of the advertisement, and the
warning area shall
be delineated by a dividing line of contrasting color from the advertisement; and
``(B) the word ``WARNING'' shall appear in capital letters and each label
statement shall
appear in conspicuous and legible type. The text of the label statement shall be
black on a white
background, or white on a black background, in an alternating fashion under the
plan submitted
under paragraph (3).
``(3)(A) The label statements specified in subsection (a)(1) shall be randomly
displayed in each
12-month period, in as equal a number of times as is possible on each brand of
the product and
be randomly distributed in all areas of the United States in which the product is
marketed in
accordance with a plan submitted by the tobacco product manufacturer,
importer, distributor, or
retailer and approved by the Secretary.
``(B) The label statements specified in subsection (a)(1) shall be rotated
quarterly in alternating
sequence in advertisements for each brand of smokeless tobacco product in
accordance with a
plan submitted by the tobacco product manufacturer, importer, distributor, or
retailer to, and
approved by, the Secretary.
``(C) The Secretary shall review each plan submitted under subparagraph (B)
and approve it if
the plan_
``(i) will provide for the equal distribution and display on packaging and the
rotation required
in advertising under this subsection; and
``(ii) assures that all of the labels required under this section will be displayed
by the tobacco
product manufacturer, importer, distributor, or retailer at the same time.
``(c) Television and radio advertising._ It is unlawful to advertise smokeless
tobacco on any
medium of electronic communications subject to the jurisdiction of the Federal
Communications
Commission.''.
SEC. 304. AUTHORITY TO REVISE SMOKELESS TOBACCO PRODUCT WARNING
LABELSTATEMENTS.
Section 3 of the Comprehensive Smokeless Tobacco Health Education Act of
1986 (15 U.S.C.
4402), as amended by section 303 of this title, is further amended by adding at
the end the
following:
``(d) Authority to Revise Warning Label Statements._ The Secretary may, by a
rulemaking
conducted under section 553 of title 5, United States Code, adjust the format,
type size, and text
of any of the warning label statements required by subsection (a) of this section,
or establish the
format, type size, and text of any other disclosures required under the Federal
Food, Drug, and
Cosmetic Act (21 U.S.C. 301 et seq.), if the Secretary finds that such a change
would promote
greater public understanding of the risks associated with the use of smokeless
tobacco products.''.
SEC. 305. TAR, NICOTINE, AND OTHER SMOKE CONSTITUENT DISCLOSURE TO
THEPUBLIC.
Section 4(a) of the Federal Cigarette Labeling and Advertising Act (15 U.S.C.
1333 (a)), as
amended by section 301 of this title, is further amended by adding at the end the
following:
``(4)(A) The Secretary shall, by a rulemaking conducted under section 553 of
title 5, United
States Code, determine (in the Secretary's sole discretion) whether cigarette and
other tobacco
product manufacturers shall be required to include in the area of each cigarette
advertisement
specified by subsection (b) of this section, or on the package label, or both, the
tar and nicotine
yields of the advertised or packaged brand. Any such disclosure shall be in
accordance with the
methodology established under such regulations, shall conform to the type size
requirements of
subsection (b) of this section, and shall appear within the area specified in
subsection (b) of this
section.
``(B) Any differences between the requirements established by the Secretary
under
subparagraph (A) and tar and nicotine yield reporting requirements established
by the Federal
Trade Commission shall be resolved by a memorandum of understanding
between the Secretary
and the Federal Trade Commission.
``(C) In addition to the disclosures required by subparagraph (A) of this
paragraph, the
Secretary may, under a rulemaking conducted under section 553 of title 5, United
States Code,
prescribe disclosure requirements regarding the level of any cigarette or other
tobacco product
smoke constituent. Any such disclosure may be required if the Secretary
determines that
disclosure would be of benefit to the public health, or otherwise would increase
consumer
awareness of the health consequences of the use of tobacco products, except
that no such
prescribed disclosure shall be required on the face of any cigarette package or
advertisement.
Nothing in this section shall prohibit the Secretary from requiring such
prescribed disclosure
through a cigarette or other tobacco product package or advertisement insert,
or by any other
means under the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.).''.
Subtitle B_Testing and Reporting of Tobacco Product Smoke Constituents
SEC. 311. REGULATION REQUIREMENT.
(a) Testing, Reporting, and Disclosure._ Not later than 24 months after the date
of enactment
of this Act, the Secretary, through the Commissioner of the Food and Drug
Administration, shall
promulgate regulations under the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 301 et seq.)
that meet the requirements of subsection (b) of this section.
(b) Contents of Rules._ The rules promulgated under subsection (a) of this
section shall require
the testing, reporting, and disclosure of tobacco product smoke constituents and
ingredients that
the Secretary determines should be disclosed to the public in order to protect the
public health.
Such constituents shall include tar, nicotine, carbon monoxide, and such other
smoke
constituents or ingredients as the Secretary may determine to be appropriate.
The rule may
require that tobacco product manufacturers, packagers, or importers make such
disclosures
relating to tar and nicotine through labels or advertising, and make such
disclosures regarding
other smoke constituents or ingredients as the Secretary determines are
necessary to protect the
public health.
(c) Authority._ The Food and Drug Administration shall have authority to
conduct or to require
the testing, reporting, or disclosure of tobacco product smoke constituents.
TITLE IV_NATIONAL TOBACCO TRUST FUND
SEC. 401. ESTABLISHMENT OF TRUST FUND.
(a) Creation ._There is established in the Treasury of the United States a trust
fund to be
known as the ``National Tobacco Trust Fund'', consisting of such amounts as
may be
appropriated or credited to the trust fund.
(b) Transfers to National Tobacco Trust Fund._ There shall be credited to the
trust fund the net
revenues resulting from the following amounts:
(1) Amounts paid under section 402.
(2) Amounts equal to the fines or penalties paid under section 402, 403, or 405,
including
interest thereon.
(3) Amounts equal to penalties paid under section 202, including interest
thereon.
(c) Net Revenues._ For purposes of subsection (b), the term ``net revenues''
means the amount
estimated by the Secretary of the Treasury based on the excess of_
(1) the amounts received in the Treasury under subsection (b), over
(2) the decrease in the taxes imposed by chapter 1 and chapter 52 of the
Internal Revenue Code
of 1986, and other offsets, resulting from the amounts received under subsection
(b).
(d) Expenditures from the Trust Fund._ Amounts in the Trust Fund shall be
available in each
fiscal year, as provided in appropriation Acts. The authority to allocate net
revenues as provided
in this title and to obligate any amounts so allocated is contingent upon actual
receipt of net
revenues.
(e) Budgetary Treatment._ The amount of net receipts in excess of that amount
which is
required to offset the direct spending in this Act under section 252 of the
Balanced Budget and
Emergency Deficit Control Act of 1985 (2 U.S.C. 902) shall be available
exclusively to offset
the appropriations required to fund the authorizations of appropriations in this
Act (including the
amendments made by this Act), and the amount of such appropriations shall not
be included in
the estimates required under section 251 of that Act (2 U.S.C. 901).
(f) Administrative Provisions._ Section 9602 of the Internal Revenue Code of
1986 shall apply
to the trust fund to the same extent as if it were established by subchapter A of
chapter 98 of
such Code, except that, for purposes of section 9602(b)(3), any interest or
proceeds shall be
covered into the Treasury as miscellaneous receipts.
SEC. 402. PAYMENTS BY INDUSTRY.
(a) Initial Payment._
(1) Certain tobacco product manufacturers._ The following participating
tobacco product
manufacturers, subject to the provisions of title XIV, shall deposit into the
National Tobacco
Trust Fund an aggregate payment of $10,000,000,000, apportioned as follows:
(A) Phillip Morris Incorporated_65.8 percent.
(B) Brown and Williamson Tobacco Corporation_17.3 percent.
(C) Lorillard Tobacco Company_7.1 percent.
(D) R.J. Reynolds Tobacco Company_6.6 percent.
(E) United States Tobacco Company_3.2 percent.
(2) No contribution from other tobacco product manufacturers._ No other
tobacco product
manufacturer shall be required to contribute to the payment required by this
subsection.
(3) Payment date; interest._ Each tobacco product manufacturer required to
make a payment
under paragraph (1) of this subsection shall make such payment within 30 days
after the date of
compliance with this Act and shall owe interest on such payment at the prime
rate plus 10
percent per annum, as published in the Wall Street Journal on the latest
publication date on or
before the date of enactment of this Act, for payments made after the required
payment date.
(b) Annual Payments._ Each calendar year beginning after the required payment
date under
subsection (a)(3) the tobacco product manufacturers shall make total payments
into the Fund for
each calendar year in the following applicable base amounts, subject to
adjustment as provided
in section 403:
(1) year 1_$14,400,000,000.
(2) year 2_$15,400,000,000.
(3) year 3_$17,700,000,000.
(4) year 4_$21,400,000,000.
(5) year 5_$23,600,000,000.
(6) year 6 and thereafter_the adjusted applicable base amount under section 403.
(c) Payment Schedule; Reconciliation._
(1) Estimated payments._ Deposits toward the annual payment liability for each
calendar year
under subsection (d)(2) shall be made in 3 equal installments due on March 1st,
on June 1st, and
on August 1st of each year. Each installment shall be equal to one-third of the
estimated annual
payment liability for that calendar year. Deposits of installments paid after the
due date shall
accrue interest at the prime rate plus 10 percent per annum, as published in the
Wall Street
Journal on the latest publication date on or before the payment date.
(2) Reconciliation._ If the liability for a calendar year under subsection (d)(2)
exceeds the
deposits made during that calendar year, the manufacturer shall pay the unpaid
liability on
March 1st of the succeeding calendar year, along with the first deposit for that
succeeding year.
If the deposits during a calendar year exceed the liability for the calendar year
under subsection
(d)(2), the manufacturer shall subtract the amount of the excess deposits from
its deposit on
March 1st of the succeeding calendar year.
(d) Apportionment of Annual Payment._
(1) In general._ Each tobacco product manufacturer is liable for its share of the
applicable base
amount payment due each year under subsection (b). The annual payment is the
obligation and
responsibility of only those tobacco product manufacturers and their affiliates
that directly sell
tobacco products in the domestic market to wholesalers, retailers, or consumers,
their successors
and assigns, and any subsequent fraudulent transferee (but only to the extent of
the interest or
obligation fraudulently transferred).
(2) Determination of amount of payment due._ Each tobacco product
manufacturer is liable for
its share of each installment in proportion to its share of tobacco products sold
in the domestic
market for the calendar year. One month after the end of the calendar year, the
Secretary shall
make a final determination of each tobacco product manufacturer's applicable
base amount
payment obligation.
(3) Calculation of tobacco product manufacturer's share of annual payment._
The share of the
annual payment apportioned to a tobacco product manufacturer shall be equal
to that
manufacturer's share of adjusted units, taking into account the manufacturer's
total production of
such units sold in the domestic market. A tobacco product manufacturer's share
of adjusted units
shall be determined as follows:
(A) Units._ A tobacco product manufacturer's number of units shall be
determined by counting
each_
(i) pack of 20 cigarettes as 1 adjusted unit;
(ii) 1.2 ounces of moist snuff as 0.75 adjusted unit; and
(iii) 3 ounces of other smokeless tobacco product as 0.35 adjusted units.
(B) Determination of adjusted units._ Except as provided in subparagraph (C),
a smokeless
tobacco product manufacturer's number of adjusted units shall be determined
under the following
table:
I95
For units: Each unit shall be treated as:
Not exceeding 150 million 70% of a unit
Exceeding 150 million 100% of a unit
(C) Adjusted units determined on total domestic production._ For purposes of
determining a
manufacturer's number of adjusted units under subparagraph (B), a
manufacturer's total
production of units, whether intended for domestic consumption or export, shall
be taken into
account.
(D) Special rule for large manufacturers._ If a tobacco product manufacturer has
more than 200
million units under subparagraph (A), then that manufacturer's number of
adjusted units shall be
equal to the total number of units, and not determined under subparagraph (B).
(E) Smokeless equivalency study._ Not later than January 1, 2003, the Secretary
shall submit to
the Congress a report detailing the extent to which youths are substituting
smokeless tobacco
products for cigarettes. If the Secretary determines that significant substitution
is occurring, the
Secretary shall include in the report recommendations to address substitution,
including
consideration of modification of the provisions of subparagraph (A).
(e) Computations._ The determinations required by subsection (d) shall be
made and certified
by the Secretary of Treasury. The parties shall promptly provide the Treasury
Department with
information sufficient for it to make such determinations.
(f) Nonapplication to Certain Manufacturers._
(1) Exemption ._ A manufacturer described in paragraph (3) is exempt from the
payments
required by subsection (b).
(2) Limitation._ Paragraph (1) applies only to assessments on cigarettes to the
extent that those
cigarettes constitute less than 3 percent of all cigarettes manufactured and
distributed to
consumers in any calendar year.
(3) Tobacco product manufacturers to which subsection applies._ A tobacco
product
manufacturer is described in this paragraph if it_
(A) resolved tobacco-related civil actions with more than 25 States before
January 1, 1998,
through written settlement agreements signed by the attorneys general (or the
equivalent chief
legal officer if there is no office of attorney general) of those States; and
(B) provides to all other States, not later than December 31, 1998, the
opportunity to enter into
written settlement agreements that_
(i) are substantially similar to the agreements entered into with those 25 States;
and
(ii) provide the other States with annual payment terms that are equivalent to the
most favorable
annual payment terms of its written settlement agreements with those 25 States.
SEC. 403. ADJUSTMENTS.
The applicable base amount under section 402(b) for a given calendar year shall
be adjusted as
follows in determining the annual payment for that year:
(1) Inflation adjustment._
(A) In general._ Beginning with the sixth calendar year after the date of
enactment of this Act,
the adjusted applicable base amount under section 402(b)(6) is the amount of the
annual payment
made for the preceding year increased by the greater of 3 percent or the annual
increase in the
CPI, adjusted (for calendar year 2002 and later years) by the volume adjustment
under
paragraph (2).
(B) CPI._ For purposes of subparagraph (A), the CPI for any calendar year is the
average of the
Consumer Price Index for all-urban consumers published by the Department of
Labor.
(C) Rounding._ If any increase determined under subparagraph (A) is not a
multiple of $1,000,
the increase shall be rounded to the nearest multiple of $1,000.
(2) Volume adjustment._ Beginning with calendar year 2002, the applicable base
amount (as
adjusted for inflation under paragraph (1)) shall be adjusted for changes in
volume of domestic
sales by multiplying the applicable base amount by the ratio of the actual volume
for the
calendar year to the base volume. For purposes of this paragraph, the term
``base volume'' means
80 percent of the number of units of taxable domestic removals and taxed
imports of cigarettes in
calendar year 1997, as reported to the Secretary of the Treasury. For purposes
of this subsection,
the term ``actual volume'' means the number of adjusted unites as defined in
section
402(d)(3)(A).
SEC. 404. PAYMENTS TO BE PASSED THROUGH TO CONSUMERS.
Each tobacco product manufacturer shall use its best efforts to adjust the price
at which it sells
each unit of tobacco products in the domestic market or to an importer for resale
in the domestic
market by an amount sufficient to pass through to each purchaser on a per-unit
basis an equal
share of the annual payments to be made by such tobacco product manufacturer
under this Act
for the year in which the sale occurs.
SEC. 405. TAX TREATMENT OF PAYMENTS.
All payments made under section 402 are ordinary and necessary business
expenses for
purposes of chapter 1 of the Internal Revenue Code of 1986 for the year in which
such payments
are made, and no part thereof is either in settlement of an actual or potential
liability for a fine or
penalty (civil or criminal) or the cost of a tangible or intangible asset or other
future benefit.
SEC. 406. ENFORCEMENT FOR NONPAYMENT.
(a) Penalty ._Any tobacco product manufacturer that fails to make any payment
required under
section 402 or 404 within 60 days after the date on which such fee is due is liable
for a civil
penalty computed on the unpaid balance at a rate of prime plus 10 percent per
annum, as
published in the Wall Street Journal on the latest publication date on or before
the payment date,
during the period the payment remains unmade.
(b) Noncompliance Period ._For purposes of this section, the term
``noncompliance period''
means, with respect to any failure to make a payment required under section 402
or 404, the
period_
(1) beginning on the due date for such payment; and
(2) ending on the date on which such payment is paid in full.
(c) Limitations ._
(1) In general ._No penalty shall be imposed by subsection (a) on any failure to
make a
payment under section 402 during any period for which it is established to the
satisfaction of the
Secretary of the Treasury that none of the persons responsible for such failure
knew or,
exercising reasonable diligence, should have known, that such failure existed.
(2) Corrections ._No penalty shall be imposed under subsection (a) on any
failure to make a
payment under section 402 if_
(A) such failure was due to reasonable cause and not to willful neglect; and
(B) such failure is corrected during the 30-day period beginning on the 1st date
that any of the
persons responsible for such failure knew or, exercising reasonable diligence,
should have
known, that such failure existed.
(3) Waiver ._In the case of any failure to make a payment under section 402 that
is due to
reasonable cause and not to willful neglect, the Secretary of the Treasury may
waive all or part
of the penalty imposed under subsection (a) to the extent that the Secretary
determines that the
payment of such penalty would be excessive relative to the failure involved.
Subtitle B_General Spending Provisions
SEC. 451. ALLOCATION ACCOUNTS.
(a) State Litigation Settlement Account._
(1) In general._ There is established within the Trust Fund a separate account,
to be known as
the State Litigation Settlement Account. Of the net revenues credited to the Trust
Fund under
section 401(b)(1) for each fiscal year, 40 percent of the amounts designated for
allocation under
the settlement payments shall be allocated to this account. Such amounts shall
be reduced by the
additional estimated Federal expenditures that will be incurred as a result of
State expenditures
under section 452, which amounts shall be transferred to the miscellaneous
receipts of the
Treasury. If, after 10 years, the estimated 25-year total amount projected to
received in this
account will be different than amount than $196,500,000,000, then beginning with
the eleventh
year the 40 percent share will be adjusted as necessary, to a percentage not in
excees of 50
percent and not less than 30 percent, to achieve that 25-year total amount.
(2) Appropriation._ Amounts so calculated are hereby appropriated and
available until
expended and shall be available to States for grants authorized under this Act.
(3) Distribution formula._ The Secretary of the Treasury shall consult with the
National
Governors Association, the National Association of Attorneys General, and the
National
Conference of State Legislators on a formula for the distribution of amounts in
the State
Litigation Settlement Account and report to the Congress within 90 days after the
date of
enactment of this Act with recommendations for implementing a distribution
formula.
(4) Use of funds ._A State may use amounts received under this subsection as
the State
determines appropriate, consistent with the other provisions of this Act.
(5) Funds not available as Medicaid reimbursement._ Funds in the account shall
not be
available to the Secretary as reimbursement of Medicaid expenditures or
considered as Medicaid
overpayments for purposes of recoupment.
(b) Public Health Allocation Account._
(1) In general._ There is established within the trust fund a separate account,
to be known as
the Public Health Account. Twenty-two percent of the net revenues credited to
the trust fund
under section 401(b)(1) and all the net revenues credited to the trust fund under
section 401(b)(3)
shall be allocated to this account.
(2) Authorization of appropriations._ Amounts in the Public Health Account
shall be available
to the extent and only in the amounts provided in advance in appropriations
Acts, to remain
available until expended, only for the purposes of:
(A) Cessation and other treatments._ Of the total amounts allocated to this
account, not less
than 25 percent, but not more than 35 percent are to be used to carry out
smoking cessation
activities under part D of title XIX of the Public Health Service Act, as added by
title II of this
Act.
(B) Indian health service._ Of the total amounts allocated to this account, not
less than 3
percent, but not more than 7 percent are to be used to carry out activities under
section 453.
(C) Education and prevention._ Of the total amounts allocated to this account,
not less than 50
percent, but not more than 65 percent are to be used to carry out_
(i) counter-advertising activities under section 1982 of the Public Health Service
Act as
amended by this Act;
(ii) smoking prevention activities under section 223;
(iii) surveys under section 1991C of the Public Health Service Act, as added by
this Act (but, in
no fiscal year may the amounts used to carry out such surveys be less than 10
percent of the
amounts available under this subsection); and
(iv) international activities under section 1132.
(D) Enforcement._ Of the total amounts allocated to this account, not less than
17.5 percent nor
more than 22.5 percent are to be used to carry out thefollowing:
(i) Food and Drug Administration activities.
(I) The Food and Drug Administration shall receive not less than 15 percent of
the funds
provided in subparagraph (D) in the first fiscal year beginning after the date of
enactment of this
Act, 35 percent of such funds in the second year beginning after the date of
enactment, and 50
percent of such funds for each fiscal year beginning after the date of enactment,
as
reimbursements for the costs incurred by the Food and Drug Administration in
implementing and
enforcing requirements relating to tobacco products.
(II) No expenditures shall be made under subparagraph (D) during any fiscal year
in which the
annual amount appropriated for the Food and Drug Administration is less than
the amount so
appropriated for the prior fiscal year.
(ii) State retail licensing activities under section 251.
(iii) Anti-Smuggling activities under section 1141.
(c) Health and Health-related Research Allocation Account._
(1) In general._ There is established within the trust fund a separate account,
to be known as
the Health and Health-Related Research Account. Of the net revenues credited
to the trust fund
under section 401(b)(1), 22 percent shall be allocated to this account.
(2) Authorization of appropriations._ Amounts in the Health and Health-Related
Research
Account shall be available to the extent and in the amounts provided in advance
in
appropriations acts, to remain available until expended, only for the following
purposes:
(A) $750,000 shall be made vailable in fiscal year 1999 for the study to be
conducted under
section 1991 of the Public Health Service Act.
(B) National Institutes of Health Research under section 1991D of the Public
Health Service
Act, as added by this Act. Of the total amounts allocated to this account, not less
than 75 percent,
but not more than 80 percent shall be used for this purpose.
(C) Centers for Disease Control under section 1991C of the Public Health Service
Act, as added
by this Act, and Agency for Health Care Policy and Research under section
1991E of the Public
Health Service Act, as added by this Act. authorized under sections 2803 of that
Act, as so
added. Of the total amounts allocated to this account, not less than 12 percent,
but not more than
18 percent shall be used for this purpose.
(D) National Science Foundation Research under section 454. Of the
totalamounts allocated to
this account, not less than 1 percent, but not more than 1 percent shall be used
for this purpose.
(E) Cancer Clinical Trials under section 455. Of the total amountsallocated to this
account,
$750,000,000 shall be used for the first 3 fiscal years for this purpose.
(d) Farmers Assistance Allocation Account._
(1) In general._ There is established within the trust fund a separate account,
to be known as
the Farmers Assistance Account. Of the net revenues credited to the trust fund
under section
401(b)(1) in each fiscal year_
(A) 16 percent shall be allocated to this account for the first 10 years after the
date of enactment
of this Act; and
(B) 4 percent shall be allocated to this account for each subsequent year until
the account has
received a total of $28,500,000,000.
(2) Appropriation._ Amounts allocated to this account are hereby appropriated
and shall be
available until expended for the purposes of section 1012.
(e) Medicare Preservation Account._ There is established within the trust fund
a separate
account, to be known as the Medicare Preservation Account. If, in any year, the
net amounts
credited to the trust fund for payments under section 402(b) are greater than the
net revenues
originally estimated under section 401(b), the amount of any such excess shall
be credited to the
Medicare Preservation Account. Beginning in the eleventh year beginning after
the date of
enactment of this Act, 12 percent of the net revenues credited to the trust fund
under seciton
401(b)(1) shall be allocated to this account. Funds credited to this account shall
be transferred to
the Medicare Hospital Insurance Trust Fund.
SEC. 452. GRANTS TO STATES.
(a) Amounts._ From the amount made available under section 402(a) for each
fiscal year, each
State shall receive a grant on a quarterly basis according to a formula.
(b) Use of Funds._
(1) Unrestricted funds._ A State may use funds, not to exceed 50 percent of the
amount
received under this section in a fiscal year, for any activities determined
appropriate by the State.
(2) Restricted funds._ A State shall use not less than 50 percent of the amount
received under
this section in a fiscal year to carry out additional activities or provide additional
services under_
(A) the State program under the maternal and child health services block grant
under title V of
the Social Security Act (42 U.S.C. 701 et seq.);
(B) funding for child care under section 418 of the Social Security Act,
notwithstanding
subsection (b)(2) of that section;
(C) federally funded child welfare and abuse programs under title IV-B of the
Social Security
Act;
(D) programs administered within the State under the authority of the Substance
Abuse and
Mental Health Services Administration under title XIX, part B of the Public Health
Service Act;
(E) Safe and Drug-Free Schools Program under title IV, part A, of the Elementary
and
Secondary Education Act of 1965 (20 U.S.C. 7111 et seq.);
(F) the Department of Education's Dwight D. Eisenhower Professional
Development program
under title II of the Elementary and Secondary Education Act of 1965 (20 U.S.C.
6601 et seq.);
and
(G) The State Children's Health Insurance Program authorized under title XXI of
the Social
Security Act (42 U.S.C. 1397aa et seq.), provided that the amount expended on
this program
does not exceed 6 percent of the total amount of restricted funds available to the
State each fiscal
year.
(c) No Substitution of Spending._ Amounts referred to in subsection (b)(2) shall
be used to
supplement and not supplant other Federal, State, or local funds provided for any
of the
programs described in subparagraphs (A) through (G) of subsection (b)(2).
Restricted funds,
except as provided for in subsection (b)(2)(G), shall not be used as State
matching funds.
Amounts provided to the State under any of the provisions of law referred to in
such
subparagraph shall not be reduced solely as a result of the availability of funds
under this
section.
(d) Federal-State Match Rates._ Current (1998) matching requirements apply to
each program
listed under subsection (b)(2), except for the program described under
subsection (b)(2)(B). For
the program described under subsection (b)(2)(B), after an individual State has
expended
resources sufficient to receive its full Federal amount under section 418(a)(2)(B)
of the Social
Security Act (subject to the matching requirements in section 418(a)(2)(C) of such
Act), the
Federal share of expenditures shall be 80 percent.
(e) Maintenance of Effort._ To receive funds under this subsection, States must
demonstrate a
maintenance of effort. This maintenance of effort is defined as the sum of_
(1) an amount equal to 95 percent of Federal fiscal year 1997 State spending on
the programs
under subsections (b)(2)(B), (c), and (d); and
(2) an amount equal to the product of the amount described in paragraph (1)
and_
(A) for fiscal year 1999, the lower of_
(i) general inflation as measured by the consumer price index for the previous
year; or
(ii) the annual growth in the Federal appropriation for the program in the
previous fiscal year;
and
(B) for subsequent fiscal years, the lower of_
(i) the cumulative general inflation as measured by the consumer price index for
the period
between 1997 and the previous year; or
(ii) the cumulative growth in the Federal appropriation for the program for the
period between
fiscal year 1997 and the previous fiscal year.
The 95-percent maintenance-of-effort requirement in paragraph (1), and the
adjustments in
paragraph (2), apply to each program identified in paragraph (1) on an individual
basis.
(f) Options for Children's Health Outreach._ In addition to the options for the
use of grants
described in this section, the following are new options to be added to States'
choices for
conducting children's health outreach:
(1) Expansion of presumptive eligibility option for children._
(A) In general._ Section 1920A(b)(3)(A)(I) of the Social Security Act (42 U.S.C.
1396r-1a(b)(3)(A)(I)) is amended_
(i) by striking ``described in subsection (a) or (II) is authorized'' and inserting
``described in
subsection (a), (II) is authorized''; and
(ii) by inserting before the semicolon ``, eligibility for benefits under part A of
title IV,
eligibility of a child to receive benefits under the State plan under this title or title
XXI, (III) is a
staff member of a public school, child care resource and referral center, or
agency administering
a plan under part D of title IV, or (IV) is so designated by the State''.
(B) Technical amendments._ Section 1920A of that Act (42 U.S.C. 1396r-1a) is
amended_
(i) in subsection (b)(3)(A)(ii), by striking ``paragraph (1)(A)'' and inserting
``paragraph (2)(A)'';
and
(ii) in subsection (c)(2), in the matter preceding subparagraph (A), by striking
``subsection
(b)(1)(A)'' and inserting ``subsection (b)(2)(A)''.
(2) Removal of requirement that children's health insurance program allotments
be reduced by
costs related to presumptive eligibility determinations._
(A) In general._ Section 2104(d) of the Social Security Act (42 U.S.C. 1397dd(d))
is amended
by striking ``the sum of_'' and all that follows through the paragraph designation
``(2)'' and
merging all that remains of subsection (d) into a single sentence.
(B) Effective date._ The amendment made by subsection (a) shall be deemed to
have taken
effect on August 5, 1997.
(3) Increased funding for administrative costs related to outreach and eligibility
determinations
for children._ Section 1931(h) of the Social Security Act (42 U.S.C. 1396u-1(h)) is
amended_
(A) by striking the subsection caption and inserting ``(h) Increased federal
matching rate for
administrative costs related to outreach and eligibility determinations for
children._'';
(B) in paragraph (2), by striking ``eligibility determinations'' and all that follows
and inserting
``determinations of the eligibility of children for benefits under the State plan
under this title or
title XXI, outreach to children likely to be eligible for such benefits, and such
other outreach-
and eligibility-related activities as the Secretary may approve.'';
(C) in paragraph (3), by striking ``and ending with fiscal year 2000 shall not
exceed
$500,000,000'' and inserting ``shall not exceed $525,000,000''; and
(D) by striking paragraph (4).
(g) Periodic reassessment of spending options._ Spending options under
subsection (b)(2) will
be reassessed jointly by the States and Federal government every 5 years and
be reported to the
Secretary.
SEC. 453. INDIAN HEALTH SERVICE.
Amounts available under section 451(b)(2)(B) shall be provided to the Indian
Health Service to
be used for anti-tobacco-related consumption and cessation activities including_
(1) clinic and facility design, construction, repair, renovation, maintenance and
improvement;
(2) provider services and equipment;
(3) domestic and community sanitation associated with clinic and facility
construction and
improvement; and
(4) other programs and service provided through the Indian Health Service or
through tribal
contracts, compacts, grants, or cooperative agreements with the Indian Health
Service and which
are deemed appropriate to raising the health status of Indians.
SEC. 454. RESEARCH AT THE NATIONAL SCIENCE FOUNDATION.
Amounts available under section 451(c)(2)(C) shall be made available for
necessary expenses in
carry out the National Science Foundation Act of 1950 (U.S.C. 1861-1875), and the
Act to
establish a National Medal of Science (42 U.S.C. 1880-1881).
SEC. 455. MEDICARE CANCER PATIENT DEMONSTRATION PROJECT;
EVALUATION
ANDREPORT TO CONGRESS.
(a) Establishment._ The Secretary shall establish a 3-year demonstration project
which provides
for payment under the Medicare program under title XVIII of the Social Security
Act (42 U.S.C.
1395 et seq.) of routine patient care costs_
(1) which are provided to an individual diagnosed with cancer and enrolled in
the Medicare
program under such title as part of the individual's participation in an approved
clinical trial
program; and
(2) which are not otherwise eligible for payment under such title for individuals
who are entitled
to benefits under such title.
(b) Application._ The beneficiary cost sharing provisions under the Medicare
program, such as
deductibles, coinsurance, and copayment amounts, shall apply to any individual
in a
demonstration project conducted under this section.
(c) Approved Clinical Trial Program._
(1) In general._ For purposes of this section, the term ``approved clinical trial
program'' means
a clinical trial program which is approved by_
(A) the National Institutes of Health;
(B) a National Institutes of Health cooperative group or a National Institutes of
Health center;
and
(C) the National Cancer Institute,
with respect to programs that oversee and coordinate extramural clinical cancer
research, trials
sponsored by such Institute and conducted at designated cancer centers, clinical
trials, and
Institute grants that support clinical investigators.
(2) Modifications in approved trials._ Beginning 1 year after the date of
enactment of this Act,
the Secretary, in consultation with the Cancer Policy Board of the Institute of
Medicine, may
modify or add to the requirements of paragraph (1) with respect to an approved
clinical trial
program.
(d) Routine Patient Care Costs._
(1) In general._ For purposes of this section, the term ``routine patient care
costs'' include the
costs associated with the provision of items and services that_
(A) would otherwise be covered under the Medicare program if such items and
services were
not provided in connection with an approved clinical trial program; and
(B) are furnished according to the design of an approved clinical trial program.
(2) Exclusion._ For purposes of this section, the term ``routine patient care
costs'' does not
include the costs associated with the provision of_
(A) an investigational drug or device, unless the Secretary has authorized the
manufacturer of
such drug or device to charge for such drug or device; or
(B) any item or service supplied without charge by the sponsor of the approved
clinical trial
program.
(e) Study._ The Secretary shall study the impact on the Medicare program under
title XVIII of
the Social Security Act of covering routine patient care costs for individuals with
a diagnosis of
cancer and other diagnoses, who are entitled to benefits under such title and
who are enrolled in
an approved clinical trial program.
(f) Report to congress._ Not later than 30 months after the date of enactment
of this Act, the
Secretary shall submit a report to Congress that contains a detailed description
of the results of
the study conducted under subsection (e) including recommendations regarding
the extension
and expansion of the demonstration project conducted under this section.
TITLE V_STANDARDS TO REDUCE INVOLUNTARY EXPOSURE TO TOBACCO
SMOKE
SEC. 501. DEFINITIONS.
In this title:
(1) Assistant secretary ._The term ``Assistant Secretary'' means the Assistant
Secretary of the
Occupational Safety and Health Administration of the Department of Labor.
(2) Public facility ._
(A) In general ._The term ``public facility'' means any building used for purposes
that affect
interstate or foreign commerce that is regularly entered by 10 or more individuals
at least 1 day
per week including any building owned by or leased to an agency, independent
establishment,
department, or the executive, legislative, or judicial branch of the United States
Government.
(B) Exclusions ._The term ``public facility'' does not include a building or
portion thereof
which is used for residential purposes or as a restaurant (other than a fast food
restaurant), bar,
private club, hotel guest room or common area, casino, bingo parlor,
tobacconist's shop, or
prison.
(C) Fast food restaurant defined ._The term ``fast food restaurant'' means any
restaurant or
chain of restaurants that primarily distributes food through a customer pick-up
(either at a
counter or drive-through window). The Assistant Secretary may promulgate
regulations to
clarify this subparagraph to ensure that the intended inclusion of establishments
catering to
individuals under 18 years of age is achieved.
(3) Responsible entity ._The term ``responsible entity'' means, with respect to
any public
facility, the owner of such facility except that, in the case of any such facility or
portion thereof
which is leased, such term means the lessee if the lessee is actively engaged in
supervising day-to-day activity in the leased space.
SEC. 502. SMOKE-FREE ENVIRONMENT POLICY.
(a) Policy Required ._In order to protect children and adults from cancer,
respiratory disease,
heart disease, and other adverse health effects from breathing environmental
tobacco smoke, the
responsible entity for each public facility shall adopt and implement at such
facility a smoke-free
environment policy which meets the requirements of subsection (b).
(b) Elements of Policy ._
(1) In general ._The responsible entity for a public facility shall_
(A) prohibit the smoking of cigarettes, cigars, and pipes, and any other
combustion of tobacco
within the facility and on facility property within the immediate vicinity of the
entrance to the
facility; and
(B) post a clear and prominent notice of the smoking prohibition in appropriate
and visible
locations at the public facility.
(2) Exception ._The responsible entity for a public facility may provide an
exception to the
prohibition specified in paragraph (1) for 1 or more specially designated smoking
areas within a
public facility if such area or areas meet the requirements of subsection (c).
(c) Specially Designated Smoking Areas ._A specially designated smoking area
meets the
requirements of this subsection if_
(1) the area is ventilated in accordance with specifications promulgated by the
Assistant
Secretary that ensure that air from the area is directly exhausted to the outside
and does not
recirculate or drift to other areas within the public facility;
(2) the area is maintained at negative pressure, as compared to adjoining
nonsmoking areas, as
determined under regulations promulgated by the Assistant Secretary;
(3) nonsmoking individuals do not have to enter the area for any purpose while
smoking is
occurring in such area; and
(4) cleaning and maintenance work are conducted in such area only when no
smoking is
occurring in the area.
SEC. 503. CITIZEN ACTIONS.
(a) In General ._An action may be brought to enforce the requirements of this
title by any
aggrieved person, any State or local government agency, or the Assistant
Secretary.
(b) Venue ._Any action to enforce this title may be brought in any United States
district court
for the district in which the defendant resides or is doing business to enjoin any
violation of this
title or to impose a civil penalty for any such violation in the amount of not more
than $5,000 per
day of violation. The district courts shall have jurisdiction, without regard to the
amount in
controversy or the citizenship of the parties, to enforce this title and to impose
civil penalties
under this title.
(c) Notice ._An aggrieved person shall give any alleged violator notice at least
60 days prior to
commencing an action under this section. No action may be commenced by an
aggrieved person
under this section if such alleged violator complies with the requirements of this
title within such
60-day period and thereafter.
(d) Costs ._The court, in issuing any final order in any action brought under this
section, may
award costs of litigation (including reasonable attorney and expert witness fees)
to any
prevailing plaintiff, whenever the court determines such award is appropriate.
(e) Penalties ._The court, in any action under this section to apply civil
penalties, shall have
discretion to order that such civil penalties be used for projects which further the
policies of this
title. The court shall obtain the view of the Assistant Secretary in exercising such
discretion and
selecting any such projects.
(f) Application with OSHA._ Nothing in this section affects enforcement of the
Occupational
Safety and Health Act of 1970.
SEC. 504. PREEMPTION.
Nothing in this title shall preempt or otherwise affect any other Federal, State,
or local law
which provides greater protection from health hazards from environmental
tobacco smoke.
SEC. 505. REGULATIONS.
The Assistant Secretary is authorized to promulgate such regulations, after
consulting with the
Administrator of the Environmental Protection Agency, as the Assistant Secretary
deems
necessary to carry out this title.
SEC. 506. EFFECTIVE DATE.
Except as provided in section 507, the provisions of this title shall take effect on
the first day of
January next following the next regularly scheduled meeting of the State
legislature occurring
after the date of enactment of this Act at which, under the procedural rules of
that legislature, a
measure under section 507 may be considered.
SEC. 507. STATE CHOICE.
Any State or local government may opt out of this title by promulgating a State
or local law,
subject to certification by the Assistant Secretary that the law is as or more
protective of the
public's health as this title, based on the best available science. Any State or
local government
may opt to enforce this title itself, subject to certification by the Assistant
Secretary that the
enforcement mechanism will effectively protect the public health.
TITLE VI_APPLICATION TO INDIAN TRIBES
SEC. 601. SHORT TITLE.
This title may be cited as the ``Reduction in Tobacco Use and Regulation of
Tobacco Products
in Indian Country Act of 1998''.
SEC. 602. FINDINGS AND PURPOSES.
(a) Findings._ Congress finds that Native Americans have used tobacco
products for
recreational, ceremonial, and traditional purposes for centuries.
(b) Purpose._ It is the purpose of this title to_
(1) provide for the implementation of this Act with respect to the regulation of
tobacco products,
and other tobacco-related activities on Indian lands;
(2) recognize the historic Native American traditional and ceremonial use of
tobacco products,
and to preserve and protect the cultural, religious, and ceremonial uses of
tobacco by members of
Indian tribes;
(3) recognize and respect Indian tribal sovereignty and tribal authority to make
and enforce laws
regarding the regulation of tobacco distributors and tobacco products on Indian
lands; and
(4) ensure that the necessary funding is made available to tribal governments
for licensing and
enforcement of tobacco distributors and tobacco products on Indian lands.
SEC. 603. APPLICATION OF TITLE TO INDIAN LANDS AND TO NATIVE
AMERICANS.
(a) In general._ The provisions of this Act shall apply to the manufacture,
distribution, and sale
of tobacco or tobacco products on Indian lands, including such activities of an
Indian tribe or
member of such tribe.
(b) Traditional Use Exception._
(1) In general._ In recognition of the religious, ceremonial, and traditional uses
of tobacco and
tobacco products by Indian tribes and the members of such tribes, nothing in
this Act shall be
construed to permit an infringement upon upon the right of such tribes or
members of such tribes
to acquire, possess, use, or transfer any tobacco or tobacco product for such
purposes, or to
infringe upon the ability of minors to participate and use tobacco products for
such religious,
ceremonial, or traditional purposes.
(2) Application of provisions._ Paragraph (1) shall apply only to those quantities
of tobacco or
tobacco products necessary to fulfill the religious, ceremonial, or traditional
purposes of an
Indian tribe or the members of such tribe, and shall not be construed to permit
the general
manufacture, distribution, sale or use of tobacco or tobacco products in a
manner that is not in
compliance with this Act or the Federal Food, Drug, and Cosmetic Act (21 U.S.C.
301 et seq.)
(c) Limitation._ Nothing in this Act shall be construed to permit an Indian tribe
or member of
such a tribe to acquire, possess, use, or transfer any tobacco or tobacco product
in violation of
section 2341 of title 18, United States Code, with respect to the transportation of
contraband
cigarettes.
(d) Application on Indian Lands._
(1) In general._ The Secretary, in consultation with the Secretary of Interior,
shall promulgate
regulations to implement this section as necessary to apply this Act and the
Food, Drug, and
Cosmetic Act (21 U.S.C. 301 et seq.) with respect to tobacco products
manufactured, distributed,
or sold on Indian lands.
(2) Scope._ This Act and the Federal Food, Drug, and Cosmetic Act (21 U.S.C.
301 et seq.)
shall apply to the manufacture, distribution and sale of tobacco products on
Indian lands,
including such activities by Indian tribes and members of such tribes.
(3) Tribal Tobacco Retailer Licensing Program._
(A) In general._ The requirements of this Act with respect to the licensing of
tobacco retailers
shall apply to all retailers that sell tobacco or tobacco products on Indian lands,
including Indian
tribes, and members thereof.
(B) Implementation._
(i) In general._ An Indian tribe may implement and enforce a tobacco retailer
licensing and
enforcement program on its Indian lands consistent with the provisions of
section 231 if the tribe
is eligible under subparagraph (D). For purposes of this clause, section 231 shall
be applied to an
Indian tribe by substituting ``Indian tribe'' for ``State'' each place it appears, and
an Indian tribe
shall not be ineligible for grants under that section if the Secretary applies that
section to the
tribe by modifying it to address tribal population, land base, and jurisdictional
factors.
(ii) Cooperation._ An Indian tribe and State with tobacco retailer licensing
programs within
adjacent jurisdictions should consult and confer to ensure effective
implementation of their
respective programs.
(C) Enforcement._ The Secretary may vest the responsibility for implementation
and
enforcement of a tobacco retailer licensing program in_
(i) the Indian tribe involved;
(ii) the State within which the lands of the Indian tribe are located pursuant to
a voluntary
cooperative agreement entered into by the State and the Indian tribe; or
(iii) the Secretary pursuant to subparagraph (F).
(D) Eligibility._ To be eligible to implement and enforce a tobacco retailer
licensing program
under section 231, the Secretary, in consultation with the Secretary of Interior,
must find that_
(i) the Indian tribe has a governing body that has powers and carries out duties
that are similar to
the powers and duties of State or local governments;
(ii) the functions to be exercised relate to activities conducted on its Indian
lands; and
(iii) the Indian tribe is reasonably expected to be capable of carrying out the
functions required
by the Secretary.
(E) Determinations._ Not later than 90 days after the date on which an Indian
tribe submits an
application for authority under subparagraph (D), the Secretary shall make a
determination
concerning the eligibility of such tribe for such authority. Each tribe found
eligible under
subparagraph (D) shall be eligible to enter into agreements for block grants
under section 231, to
conduct a licensing and enforcement program pursuant to section 231, and for
bonuses under
section 232.
(F) Implementation by the secretary._ If the Secretary determines that the Indian
tribe is not
willing or not qualified to administer a retail licensing and enforcement program,
the Secretary,
in consultation with the Secretary of Interior, shall promulgate regulations for a
program for such
tribes in the same manner as for States which have not established a tobacco
retailer licensing
program under section 231(f).
(G) Deficient applications; opportunity to cure._
(i) If the Secretary determines under subparagraph (F) that a Indian tribe is not
eligible to
establish a tobacco retailer licensing program, the Secretary shall_
(I) submit to such tribe, in writing, a statement of the reasons for such
determination of
ineligibility; and
(II) shall assist such tribe in overcoming any deficiencies that resulted in the
determination of
ineligibility.
(ii) After an opportunity to review and cure such deficiencies, the tribe may
re-apply to the
Secretary for assistance under this subsection.
(H) Secretarial review._ The Secretary may periodically review the tribal tobacco
retailer
licensing program of a tribe approved pursuant to subparagraph (E), including
the effectiveness
of the program, the tribe's enforcement thereof, and the compatibility of the
tribe's program with
the program of the State in which the tribe is located. The program shall be
subject to all
applicable requirements of section 231.
(e) Eligibility for Public Heath Funds._
(1) Eligibility for grants._
(A) For each fiscal year the Secretary may award grants to Indian tribes from the
federal
Account or other federal funds, except a tribe that is not a participating tobacco
product
manufacturer (as defined in section 1402(a), for the same purposes as States and
local
governments are eligible to receive grants from the Federal Account as provided
for in this Act.
Indian tribes shall have the flexibility to utilize such grants to meet the unique
health care needs
of their service populations consistent with the goals and purposes of Federal
Indian health care
law and policy.
(B) In promulgating regulations for the approval and funding of smoking
cessation programs
under section 221 the Secretary shall ensure that adequate funding is available
to address the
high rate of smoking among Native Americans.
(2) Health care funding._
(A) Indian health service._ Each fiscal year the Secretary shall disburse to the
Indian Health
Service from the National Tobacco Settlement Trust Fund an amount determined
by the
Secretary in consultation with the Secretary of the Interior equal to the product
of_
(i) the ratio of the total Indian health care service population relative to the total
population of
the United States; and
(ii) the amount allocated to the States each year from the State Litigation Trust
Account.
(B) Funding._ The trustees of the Trust Fund shall for each fiscal year transfer
to the Secretary
from the State Litigation Trust Account the amount determined pursuant to
paragraph (A).
(C) Use of health care trust funds._ Amounts made available to the Indian
Health Service under
this paragraph shall be made available to Indian tribes pursuant to the provisions
of the Indian
Self Determination and Education Assistance Act (25 U.S.C. 450b et seq.), shall
be used to
reduce tobacco consumption, promote smoking cessation, and shall be used to
fund health care
activities including_
(i) clinic and facility design, construction, repair, renovation, maintenance, and
improvement;
(ii) health care provider services and equipment;
(iii) domestic and community sanitation associated with clinic and facility
construction and
improvement;
(iv) inpatient and outpatient services; and
(v) other programs and services which have as their goal raising the health
status of Indians.
(f) Preemption._
(1) In general._ Except as otherwise provided in this section, nothing in this Act
shall be
construed to prohibit an Indian tribe from imposing requirements, prohibitions,
penalties, or
other measures to further the purposes of this Act that are in addition to the
requirements,
prohibitions, or penalties required by this Act.
(2) Public exposure to smoke._ Nothing in this title shall be construed to
preempt or otherwise
affect any Indian tribe rule or practice that provides greater protections from the
health hazard of
environmental tobacco smoke.
(g) Disclaimer._ Nothing in this Act shall be construed to increase or diminish
tribal or State
jurisdiction on Indian lands with respect to tobacco-related activities.
TITLE VII_TOBACCO CLAIMS
SEC. 701. DEFINITIONS.
In this title:
(1) Affiliate._ The term ``affiliate'' means a person who directly or indirectly
owns or controls,
is owned or controlled by, or is under common ownership or control with,
another person. For
purposes of this definition, ownership means ownership of an equity interest, or
the equivalent
thereof, of ten percent or more, and person means an individual, partnership,
committee,
association, corporation, or any other organization or group of persons.
(2) Civil action._ The term ``civil action'' means any action, lawsuit, or
proceeding that is not a
criminal action.
(3) Court._ The term ``court'' means any judicial or agency court, forum, or
tribunal within the
United States, including without limitation any Federal, State, or tribal court.
(4) Final judgment._ The term ``final judgment'' means a judgment on which all
rights of appeal
or discretionary review have been exhausted or waived or for which the time to
appeal or seek
such discretionary review has expired.
(5) Final settlement._ The term ``final settlement'' means a settlement agreement
that is
executed and approved as necessary to be fully binding on all relevant parties.
(6) Individual._ The term ``individual'' means a human being and does not
include a
corporation, partnership, unincorporated association, trust, estate, or any other
public or private
entity, State or local government, or Indian tribe.
(7) Tobacco claim._ The term ``tobacco claim'' means a claim directly or
indirectly arising out
of, based on, or related to the health-related effects of tobacco products,
including without
limitation a claim arising out of, based on or related to allegations regarding any
conduct,
statement, or omission respecting the health-related effects of such products.
(8) Tobacco product manufacturer._ The term ``tobacco product manufacturer''
means a person
who_
(A) manufactures tobacco products for sale in the United States after the date
of enactment of
this Act, including tobacco products for sale in the United States through an
importer;
(B) is, after the date of enactment of this Act, the first purchaser for resale in the
United States
of tobacco products manufactured for sale outside of the United States;
(C) engaged in activities described in subparagraph (A) or (B) prior to the date
of enactment of
this Act, has not engaged in such activities after the date of enactment of this
Act, and was not as
of June 20, 1997, an affiliate of a tobacco product manufacturer in which the
tobacco product
manufacturer or its other affiliates owned a 50 percent or greater interest;
(D) is a successor or assign of any of the foregoing;
(E) is an entity to which any of the foregoing directly or indirectly makes, after
the date of
enactment of this Act, a fraudulent conveyance or a transfer that would otherwise
be voidable
under part 5 of title 11 of the United States Code, but only to the extent of the
interest or
obligation transferred; or
(F) is an affiliate of a tobacco product manufacturer.
(9) Castano civil actions._ The term ``Castano Civil Actions'' means the
following civil actions:
Gloria Wilkinson Lyons et al. v. American Tobacco Co., et al. (USDC Alabama
96-0881-BH;
Agnes McGinty, et al. v. American Tobacco Co., et al. (USDC Arkansas
LR-C-96-881); Willard
R. Brown, et al. v. R.J. Reynolds Co., et al. (San Diego, California-00711400); Gray
Davis &
James Ellis, et al. R.J. Reynolds Tobacco Co., et al. (San Diego,
California-00706458); Chester
Lyons, et al. v. Brown & Williamson Tobacco Corp., et al. (Fulton County,
Georgia-E-59346);
Rosalyn Peterson, et al. v. American Tobacco Co., et al. (USDC
Hawaii-97-00233-HG); Jean
Clay , et al. v. American Tobacco Co., et al. (USDC Illinois Benton
Division-97-4167-JPG);
William J. Norton, et al. v. RJR Nabisco Holdings Corp., et al. (Madison County,
Indiana
48D01-9605-CP-0271); Alga Emig, et al. v. American Tobacco Co., et al. (USDC
Kansas-97-1121-MLB); Gloria Scott, et al. v. American Tobacco Co., et al.
(Orleans Parish, Louisiana-97-1178); Vern Masepohl, et al. v. American Tobacco
Co., et al. (USDC Minnesota-3-96-CV-888);
Matthew Tepper, et al. v. Philip Morris Incorporated, et al (Bergen County, New
Jersey-BER-L-4983-97-E); Carol A. Connor, et al. v. American Tobacco Co., et al.
(Bernalillo County, New
Mexico-CV96-8464); Edwin Paul Hoskins, et al. v. R.J. Reynolds Tobacco Co., et
al.; Josephine
Stewart-Lomantz v. Brown & Williamson Tobacco, et al.; Rose Frosina, et al. v.
Philip Morris
Incorporated, et al.; Catherine Zito, et al. v. American Tobacco Co., et al.; Kevin
Mroczkowski,
et al. v. Lorillard Tobacco Company, et al. (Supreme Court, New York County,
New York-110949 thru 110953); Judith E. Chamberlain, et al. v. American Tobacco
Co., et al. (USDC
Ohio-1:96CV2005); Brian walls, et al. v. American Tobacco Co., et al. (USDC
Oklahoma-97-CV-218-H); Steven R. Arch, et al. v. American Tobacco Co., et al.
(USDC Pennsylvania-96-5903-CN); Barreras-Ruiz, et al. v. American Tobacco Co.,
et al. (USDC Puerto Rico-96-2300-JAF); Joanne Anderson, et al. v. American
Tobacco Co., et al. (Know County, Tennessee);
Carlis Cole, et al. v. The Tobacco institute, Inc., et al. (USDC Beaumont Texas
Division-1:97CV0256); Carrol Jackson, et al. v. Philip Morris Incorporated, et al.
(Salt Lake County,
Utah-CV No. 98-0901634PI).
SEC. 702. APPLICATION; PREEMPTION.
(a) Application._ The provisions of this title govern any tobacco claim in any
civil action
brought in an State, Tribal, or Federal court, including any such claim that has
not reached final
judgment or final settlement as of the date of enactment of this Act.
(b) Preemption._ This title supersedes State law only to the extent that State law
applies to a
matter covered by this title. Any matter that is not governed by this title,
including any standard
of liability applicable to a manufacturer, shall be governed by any applicable
State, Tribal, or
Federal law.
(c) Criminal Liability Untouched._ Nothing in this title shall be construed to limit
the criminal
liability of tobacco product manufacturers, retailers, or distributors, or their
officers, directors,
employees, successors, or assigns.
SEC. 703. RULES GOVERNING TOBACCO CLAIMS.
(a) General Causation Presumption._ In any civil action to which this title
applies brought
involving a tobacco claim, there shall be an evidentiary presumption that nicotine
is addictive
and that the diseases identified as being caused by use of tobacco products in
the Center for
Disease Control and Prevention Reducing the Health Consequences of Smoking:
25 Years of
Progress: A Report of the Surgeon General (United States Public Health Service
1989), The
Health Consequences of Smoking: Involuntary Smoking, (USPHS 1986); and The
Health
Consequences of Using Smokeless Tobacco, (USPHS 1986), are caused in whole
or in part by
the use of tobacco products, (hereinafter referred to as the ``general causation
presumption''), and
a jury empaneled to hear a tobacco claim shall be so instructed. In all other
respects, the burden
of proof as to the issue of whether a plaintiff's specific disease or injury was
caused by smoking
shall be governed by the law of the State or Tribe in which the tobacco claim was
brought. This
general causation presumption shall in no way affect the ability of the defendant
to introduce
evidence or argument which the defendant would otherwise be entitled to present
under the law
of the State or Tribe in which the tobacco claim was brought to rebut the general
causation
presumption, or with respect to general causation, specific causation, or
alternative causation, or
to introduce any other evidence or argument which the defendant would
otherwise be entitled to
make.
(b) Actions Against Participating Tobacco Product Manufacturers._ In any civil
action brought
involving a tobacco claim against participating tobacco product manufacturers,
as that term is
defined in title XIV, the provisions of title XIV apply in conjunction with the
provisions of this
title.
TITLE VIII_TOBACCO INDUSTRY ACCOUNTABILITY REQUIREMENTS AND
EMPLOYEE PROTECTION FROM REPRISALS
SEC. 801. ACCOUNTABILITY REQUIREMENTS AND OVERSIGHT OF THE
TOBACCO
INDUSTRY.
(a) Accountability._ The Secretary, following regular consultation with the
Commissioner of
Food and Drugs, the Surgeon General, the Director of the Center for Disease
Control or the
Director's delegate, and the Director of the Health and Human Services Office of
Minority
Health shall annually issue a report as provided for in subsection (c).
(b) Tobacco Company Plan._ Within a year after the date of enactment of this
Act, each
participating tobacco product manufacturer shall adopt and submit to the
Secretary a plan to
achieve the required percentage reductions in underage use of tobacco products
set forth in
section 201, and thereafter shall update its plan no less frequently than annually.
The annual
report of the Secretary may recommend amendment of any plan to incorporate
additional
measures to reduce underage tobacco use that are consistent with the
provisions of this Act.
(c) Annual Report._ The Secretary shall submit a report to the Congress by
January 31 of each
year, which shall be published in the Federal Register. The report shall_
(1) describe in detail each tobacco product manufacturer's compliance with the
provisions of this
Act and its plan submitted under subsection (b);
(2) report on whether each tobacco product manufacturer's efforts to reduce
underage smoking
are likely to result in attainment of smoking reduction targets under section 201;
(3) recommend, where necessary, additional measures individual tobacco
companies should
undertake to meet those targets; and
(4) include, where applicable, the extent to which prior panel recommendations
have been
adopted by each tobacco product manufacturer.
SEC. 802. TOBACCO PRODUCT MANUFACTURER EMPLOYEE PROTECTION.
(a) Prohibited Acts._ No tobacco product manufacturer may discharge, demote,
or otherwise
discriminate against any employee with respect to compensation, terms,
conditions, benefits, or
privileges of employment because the employee (or any person acting under a
request of the
employee)_
(1) notified the manufacturer, the Commissioner of Food and Drugs, the Attorney
General, or
any Federal, State, or local public health or law enforcement authority of an
alleged violation of
this or any other Act;
(2) refused to engage in any practice made unlawful by such Acts, if the
employee has identified
the alleged illegality to the manufacturer;
(3) testified before Congress or at any Federal or State proceeding regarding any
provision (or
proposed provision) of such Acts;
(4) commenced, caused to be commenced, or is about to commence or cause
to be commenced a
proceeding under such Acts, or a proceeding for the administration or
enforcement of any
requirement imposed under such Acts;
(5) testified or is about to testify in any such proceeding; or
(6) assisted or participated, or is about to assist or participate, in any manner
in such a
proceeding or in any other manner in such a proceeding or in any other action
to carry out the
purposes of such Acts.
(b) Employee Complaint._
(1) Any employee of a tobacco product manufacturer who believes that he or
she has been
discharged, demoted, or otherwise discriminated against by any person in
violation of subsection
(a) of this section may, within 180 days after such violation occurs, file (or have
any person file
on his or her behalf) a complaint with the Secretary alleging such discharge,
demotion, or
discrimination. Upon receipt of such a complaint, the Secretary shall notify the
person named in
the complaint of its filing.
(2)(A) Upon receipt of a complaint under paragraph (1) of this subsection, the
Secretary shall
conduct an investigation of the violation alleged in the complaint. Within 30 days
after the
receipt of such complaint, the Secretary shall complete such investigation and
shall notify in
writing the complainant (and any such person acting in his or her behalf) and the
person alleged
to have committed such violation of the results of the investigation conducted
under this
paragraph. Within 90 days after the receipt of such complaint, the Secretary shall
(unless the
proceeding on the complaint is terminated by the Secretary on the basis of a
settlement entered
into by the Secretary and the person alleged to have committed such violation)
issue an order
either providing the relief prescribed in subparagraph (B) of this paragraph or
denying the
complaint. An order of the Secretary shall be made on the record after notice and
the opportunity
for a hearing in accordance with sections 554 and 556 of title 5, United States
Code. Upon the
conclusion of such a hearing and the issuance of a recommended decision that
the complaint has
merit, the Secretary shall issue a preliminary order providing the relief prescribed
in
subparagraph (B) of this paragraph, but may not order compensatory damages
pending a final
order. The Secretary may not enter into a settlement terminating a proceeding on
a complaint
without the participation and consent of the complainant.
(B) If, in response to a complaint under paragraph (1) of this subsection, the
Secretary
determines that a violation of this paragraph has occurred, the Secretary shall
order the person
who committed such violation to (i) take affirmative action to abate the violation,
and (ii)
reinstate the complainant to his or her former position together with
compensation (including
back pay), terms, conditions, and privileges of his or her employment. The
Secretary may order
such person to provide compensatory damages to the complainant. If an order
is issued under
this subparagraph, the Secretary, at the request of the complainant, shall assess
the person
against whom the order is issued a sum equal to the aggregate amount of all
costs and expenses
(including attorneys' and expert witness fees) reasonably incurred (as determined
by the
Secretary), by the complainant for, or in connection with, the bringing of the
complaint upon
which the order is issued.
(3)(A) The Secretary shall dismiss a complaint filed under paragraph (1) of this
subsection, and
shall not conduct the investigation required under paragraph (2) of this
subsection, unless the
complainant has made a prima facie showing that any behavior described in
subsection (a) of
this section was a contributing factor in the unfavorable personnel action alleged
in the
complaint.
(B) Notwithstanding a finding by the Secretary that the complainant has made
the showing
required by subparagraph (A) of this paragraph, no investigation required under
paragraph (2) of
this subsection shall be conducted if the manufacturer demonstrates by clear
and convincing
evidence that it would have taken the same unfavorable personnel action in the
absence of such
behavior. Relief may not be ordered under paragraph (1) of this subsection if the
manufacturer
demonstrates by clear and convincing evidence that it would have taken the
same unfavorable
personnel action in the absence of such behavior.
(C) The Secretary may determine that a violation of subsection (a) of this section
has occurred
only if the complainant has demonstrated that any behavior described in
subsection (a) of this
section was a contributing factor in unfavorable personnel action alleged in the
complaint.
(c) Judicial Review._
(1) Any person adversely affected or aggrieved by an order issued under
subsection (a) of this
section may obtain review of the order in the United States court of appeals for
the circuit in
which the violation, with respect to which the order was issued, allegedly
occurred. The petition
for review must be filed within 60 days after the issuance of the Secretary's
order. Judicial
review shall be available as provided in chapter 7 of title 5, United States Code.
The
commencement of proceedings under this subsection shall not, unless ordered
by the court,
operate as a stay of the Secretary's order.
(2) An order of the Secretary with respect to which review could have been
obtained under
paragraph (1) of this subsection shall not be subject to judicial review in any
criminal or civil
proceeding.
(d) Noncompliance._ Whenever a person has failed to comply with an order
issued under
subsection (b)(2) of this section, the Secretary may file a civil action in the United
States district
court for the district in which the violation occurred to enforce such order. In
actions brought
under this subsection, the district courts shall have jurisdiction to grant all
appropriate relief,
including injunctive relief and compensatory and exemplary damages.
(e) Action to Ensure Compliance._
(1) Any person on whose behalf an order was issued under subsection (b)(2) of
this section may
commence a civil action to require compliance with such order against the
person to whom such
order was issued. The appropriate United States district court shall have
jurisdiction to enforce
such order, without regard to the amount in controversy or the citizenship of the
parties.
(2) The court, in issuing any final order under this subsection, may award costs
of litigation
(including reasonable attorneys' and expert witness fees) to any party whenever
the court
determines such award is appropriate.
(f) Enforcement._ Any non-discretionary duty imposed by this section shall be
enforceable in a
mandamus proceeding brought under section 1361 of title 28, United States
Code.
(g) Applicability to Certain Employees._ Subsection (a) of this section shall not
apply with
respect to any employee who, acting without direction from the manufacturer (or
the agent of the
manufacturer) deliberately causes a violation of any requirement of this Act, the
Federal Food,
Drug, and Cosmetic Act (21 U.S.C. 301 et seq), or any other law or regulation
relating to
tobacco products.
(h) Effect on Other Laws._ This section shall not be construed to expand,
diminish, or
otherwise affect any right otherwise available to an employee under Federal or
State law to
redress the employee's discharge or other discriminatory action taken by a
tobacco product
manufacturer against the employee.
(i) Posting._ The provisions of this section shall be prominently posted in any
place of
employment to which this section applies.
TITLE IX_PUBLIC DISCLOSURE OF TOBACCO INDUSTRY DOCUMENTS
SEC. 901. FINDINGS.
The Congress finds that_
(1) the American tobacco industry has made claims of attorney-client privilege,
attorney work
product, and trade secrets to protect from public disclosure thousands of
internal documents
sought by civil litigants;
(2) a number of courts have found that these claims of privilege were not made
in good faith;
and
(3) a prompt and full exposition of tobacco documents will_
(A) promote understanding by the public of the tobacco industry's research and
practices; and
(B) further the purposes of this Act.
SEC. 902. APPLICABILITY.
This title applies to all tobacco product manufacturers.
SEC. 903. DOCUMENT DISCLOSURE.
(a) Disclosure to the Food and Drug Administration._
(1) Within 60 days after the date of enactment of this Act, each tobacco product
manufacturer
shall submit to the Food and Drug Administration the documents identified in
subsection (c),
including documents for which trade secret protection is claimed, with the
exception of any
document for which privilege is claimed, and identified in accordance with
subsection (b). Each
such manufacturer shall provide the Administration with the privilege and trade
secret logs
identified under subsection (b).
(2) With respect to documents that are claimed to contain trade secret material,
unless and until
it is finally determined under this title, either through judicial review or because
time for judicial
review has expired, that such a document does not constitute or contain trade
secret material, the
Administration shall treat the document as a trade secret in accordance with
section 708 of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 379) and the regulations
promulgated
thereunder. Nothing herein shall limit the authority of the Administration to
obtain and use, in
accordance with any provision of the Federal Food, Drug, and Cosmetic Act and
the regulations
promulgated thereunder, any document constituting or containing trade secret
material.
Documents and materials received by the Administration under this provision
shall not be
obtainable by or releasable to the public through section 552 of title 5, United
States Code, or
any other provision of law, and the only recourse to obtain these documents
shall be through the
process established by section 905.
(3) If a document depository is not established under title XIV, the Secretary
shall establish by
regulation a procedure for making public all documents submitted under
paragraph (1) except
documents for which trade secret protection has been claimed and for which
there has not been a
final judicial determination that the document does not contain a trade secret.
(b) Separate Submission of Documents._
(1) (1) Privileged Trade Secret Documents._ Any document required to be
submitted under
subsection (c) or (d) that is subject to a claim by a tobacco product manufacturer
of attorney-client privilege, attorney work product, or trade secret protection shall
be so marked and shall be
submitted to the panel under section 904 within 30 days after its appointment.
Compliance with
this subsection shall not be deemed to be a waiver of any applicable claim of
privilege or trade
secret protection.
(2) Privilege and trade secret logs._
(A) In general._ Within 15 days after submitting documents under paragraph
(1), each tobacco
product manufacturer shall submit a comprehensive log which identifies on a
document-by-document basis all documents produced for which the
manufacturer asserts attorney-client
privilege, attorney work-product, or trade secrecy. With respect to documents for
which the
manufacturer previously has asserted one or more of the aforementioned
privileges or trade
secret protection, the manufacturer shall conduct a good faith de novo review
of such
documents to determine whether such privilege or trade secret protection is
appropriate.
(B) Organization of log._ The log shall be organized in numerical order based
upon the
document identifier assigned to each document. For each document, the log
shall contain_
(i) a description of the document, including type of document, title of document,
name and
position or title of each author, addressee, and other recipient who was intended
to receive a
copy, document date, document purpose, and general subject matter;
(ii) an explanation why the document or a portion of the document is privileged
or subject to
trade secret protection; and
(iii) a statement whether any previous claim of privilege or trade secret was
denied and, if so, in
what proceeding.
(C) Public inspection._ Within 5 days of receipt of such a log, the Depository
shall make it
available for public inspection and review.
(3) Declaration of compliance._ Each tobacco product manufacturer shall
submit to the
Depository a declaration, in accordance with the requirements of section 1746 of
title 28, United
States Code, by an individual with responsibility for the de novo review of
documents,
preparation of the privilege log, and knowledge of its contents. The declarant
shall attest to the
manufacturer's compliance with the requirements of this subsection pertaining
to the review of
documents and preparation of a privilege log.
(c) Document Categories._ Each tobacco product manufacturer shall submit_
(1) every existing document (including any document subject to a claim of
attorney-client
privilege, attorney work product, or trade secret protection) in the manufacturer's
possession,
custody, or control relating, referring, or pertaining to_
(A) any studies, research, or analysis of any possible health or pharmacological
effects in
humans or animals, including addiction, associated with the use of tobacco
products or
components of tobacco products;
(B) the engineering, manipulation, or control of nicotine in tobacco products;
(C) the sale or marketing of tobacco products;
(D) any research involving safer or less hazardous tobacco products;
(E) tobacco use by minors; or
(F) the relationship between advertising or promotion and the use of tobacco
products;
(2) all documents produced by any tobacco product manufacturer, the Center
of Tobacco
Research or Tobacco Institute to the Attorney General of any State during
discovery in any
action brought on behalf of any State and commenced after January 1, 1994;
(3) all documents produced by any tobacco product manufacturer, Center for
Tobacco Research
or Tobacco Institute to the Federal Trade Commission in connection with its
investigation into
the ``Joe Camel'' advertising campaign and any underage marketing of tobacco
products to
minors;
(4) all documents produced by any tobacco product manufacturers, the Center
for Tobacco
Research or the Tobacco Institute to litigation adversaries during discovery in
any private
litigation matters;
(5) all documents produced by any tobacco product manufacturer, the Center
for Tobacco
Research, or the Tobacco Institute in any of the following private litigation
matters:
(A) Philip Morris v. American Broadcasting Co., Law No. 7609CL94x00181-00
(Cir. Ct. Va.
filed Mar. 26, 1994);
(B) Estate of Butler v. R.J. Reynolds Tobacco Co., Civ. A. No. 94-5-53 (Cir. Ct.
Miss., filed
May 12, 1994);
(C) Haines v. Liggett Group, No. 84-CV-678 (D.N.J., filed Feb. 22, 1984); and
(D) Cipollone v. Liggett Group, No. 83-CV-284 (D.N.J., filed Aug. 1, 1983);
(6) any document produced as evidence or potential evidence or submitted to
the Depository by
tobacco product manufacturers in any of the actions described in paragraph (5),
including briefs
and other pleadings, memoranda, interrogatories, transcripts of depositions, and
expert witnesses
and consultants materials, including correspondence, reports, and testimony;
(7) any additional documents that any tobacco product manufacturer, the Center
for Tobacco
Research, or the Tobacco Institute have agreed or been required by any court to
produce to
litigation adversaries as part of discovery in any action listed in paragraph (2),
(3), (4), or (5) but
have not yet completed producing as of the date of enactment of this Act;
(8) all indices of documents relating to tobacco products and health, with any
such indices that
are maintained in computerized form placed into the depository in both a
computerized and hard-copy form;
(9) a privilege log describing each document or portion of a document otherwise
subject to
production in the actions enumerated in this subsection that any tobacco
product manufacturer,
the Center for Tobacco Research, or the Tobacco Institute maintains, based upon
a good faith de
novo re-review conducted after the date of enactment of this Act is exempt from
public
disclosure under this title; and
(10) a trade secrecy log describing each document or portion of a document that
any tobacco
product manufacturer, the Center for Tobacco Research, or the Tobacco Institute
maintains is
exempt from public disclosure under this title.
(d) Future Documents ._With respect to documents created after the date of
enactment of this
Act, the tobacco product manufacturers and their trade associations shall_
(1) place the documents in the depository; and
(2) provide a copy of the documents to the Food and Drug Administration (with
the exception of
documents subject to a claim of attorney-client privilege or attorney work
product).
(1) Every existing document (including any document subject to a claim of
attorney-client
privilege, attorney work product, or trade secret protection) in the manufacturer's
possession,
custody, or control relating, referring, or pertaining to_
(A) any studies, research, or analysis of any possible health or pharmacological
effects in
humans or animals, including addiction, associated with the use of tobacco
products or
components of tobacco products;
(B) the engineering, manipulation, or control of nicotine in tobacco products;
(C) the sale or marketing of tobacco products;
(D) any research involving safer or less hazardous tobacco products;
(E) tobacco use by minors; or
(F) the relationship between advertising or promotion and the use of tobacco
products;
(2) Every existing document (including any document subject to a claim of
attorney-client
privilege, attorney work product, or trade secret protection) in the manufacturer's
possession,
custody, or control_
(A) produced, or ordered to be produced, by the tobacco product manufacturer
in any health-related civil or criminal proceeding, judicial or administrative; and
(B) that the panel established under section 906 determines is appropriate for
submission.
(3) All studies conducted or funded, directly or indirectly, by any tobacco
product manufacturer,
relating to tobacco product use by minors.
(4) All documents discussing or referring to the relationship, if any, between
advertising and
promotion and the use of tobacco products by minors.
(5) A privilege log describing each document or each portion of a document
otherwise subject to
public disclosure under this subsection that any tobacco product manufacturer
maintains is
exempt from public disclosure under this title.
(6) A trade secrecy log describing each document or each portion of a document
otherwise
subject to public disclosure under this subsection that any tobacco product
manufacturer, the
Center for Tobacco Research, or the Tobacco Institute maintains is exempt from
public
disclosure under this Act.
(e) Document Identification and Index._ Documents submitted under this
section shall be
sequentially numbered and marked to identify the tobacco product manufacturer.
Within 15 days
after submission of documents, each tobacco product manufacturer shall supply
the panel with a
comprehensive document index which references the applicable document
categories contained
in subsection (b).
SEC. 904. DOCUMENT REVIEW.
(a) Ajudication of Privilege Claims._ An claim of attorney-client privilege, trade
secret
protection, or other claim of privilege with respect to a document required to be
submitted by
this title shall be heard by a 3-judge panel of the United States District Court for
the District of
Columbia under section 2284 of title 28, United States Code. The panel may
appoint special
masters, employ such personnel, and establish such procedures as it deems
necessary to carry out
its functions under this title.
(b) Privilege._ The panel shall apply the attorney-client privilege, the attorney
work-product
doctrine, and the trade secret doctrine in a manner consistent with Federal law.
SEC. 905. RESOLUTION OF DISPUTED PRIVILEGE AND TRADE SECRET CLAIMS.
(a) In General._ The panel shall determine whether to uphold or reject disputed
claims of
attorney client privilege, attorney work product, or trade secret protection with
respect to
documents submitted. Any person may petition the panel to resolve a claim that
a document
submitted may not be disclosed to the public. Such a determination shall be
made by a majority
of the panel, in writing, and shall be subject to judicial review as specified in this
title. All such
determinations shall be made solely on consideration of the subject document
and written
submissions from the person claiming that the document is privileged or
protected by trade
secrecy and from any person seeking disclosure of the document. The panel
shall cause notice of
the petition and the panel's decision to be published in the Federal Register.
(b) Final Decision._ The panel may uphold a claim of privilege or protection in
its entirety or,
in its sole discretion, it may redact that portion of a document that it determines
is protected from
public disclosure under subsection (a). Any decision of the panel shall be final
unless judicial
review is sought under section 906. In the event that judicial review is sosought,
the panel's
decision shall be stayed pending a final judicial decision.
SEC. 906. APPEAL OF PANEL DECISION.
(a) Petition; Right of Appeal._ Any person may obtain judicial review of a final
decision of the
panel by filing a petition for review with the United States Court of Appeals for
the Federal
Circuit within 60 days after the publication of such decision in the Federal
Register. A copy of
the petition shall be transmitted by the Clerk of the Court to the panel. The panel
shall file in the
court the record of the proceedings on which the panel based its decision
(including any
documents reviewed by the panel in camera ) as provided in section 2112 of title
28, United
States Code. Upon the filing of such petition, the court shall have exclusive
jurisdiction to affirm
or set aside the panel's decision, except that until the filing of the record the
panel may modify or
set aside its decision.
(b) Additional Evidence and Arguments._ If the any party applies to the court
for leave to
adduce additional evidence respecting the decision being reviewed and shows
to the satisfaction
of the court that such additional evidence or arguments are material and that
there were
reasonable grounds for the failure to adduce such evidence or arguments in the
proceedings
before the panel, the court may order the panel to provide additional opportunity
for the
presentation of evidence or arguments in such manner and upon such terms as
the court deems
proper. The panel may modify its findings or make new findings by reason of the
additional
evidence or arguments and shall file with the court such modified or new
findings, and its
recommendation, if any, for the modification or setting aside of the decision
being reviewed.
(c) Standard of Review; Finality of Judgments._ The panel's findings of fact, if
supported by
substantial evidence on the record taken as a whole, shall be conclusive. The
court shall review
the panel's legal conclusions de novo. The judgment of the court affirming or
setting aside the
panel's decision 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.
(d) Public Disclosure After Final Decision._ Within 30 days after a final decision
that a
document, as redacted by the panel or in its entirety, is not protected from
disclosure by a claim
of attorney-client privilege, attorney work product, or trade secret protection, the
panel shall
direct that the document be made available to the Commissioner of Food and
Drugs under
section 903(a). No Federal, Tribal, or State court shall have jurisdiction to review
a claim of
attorney-client privilege, attorney work product, or trade secret protection for a
document that
has lawfully been made available to the public under this subsection.
(e) Effect of Non-disclosure Decision on Judicial Proceedings._ The panel's
decision that a
document is protected by attorney-client privilege, attorney work product, or
trade secret
protection is binding only for the purpose of protecting the document from
disclosure by the
Depository. The decision by the panel shall not be construed to prevent a
document from being
disclosed in a judicial proceeding or interfere with the authority of a court to
determine whether
a document is admissible or whether its production may be compelled.
SEC. 907. MISCELLANEOUS.
The disclosure process in this title is not intended to affect the Federal Rules of
Civil or
Criminal Procedure or any Federal law which requires the disclosure of
documents or which
deals with attorney-client privilege, attorney work product, or trade secret
protection.
SEC. 908. PENALTIES.
(a) Good Faith Requirement._ Each tobacco product manufacturer shall act in
good faith in
asserting claims of privilege or trade secret protection based on fact and law. If
the panel
determines that a tobacco product manufacturer has not acted in good faith with
full knowledge
of the truth of the facts asserted and with a reasonable basis under existing law,
the manufacturer
shall be assessed costs, which shall include the full administrative costs of
handling the claim of
privilege, and all attorneys' fees incurred by the panel and any party contesting
the privilege. The
panel may also impose civil penalties of up to $50,000 per violation if it
determines that the
manufacturer acted in bad faith in asserting a privilege, or knowingly acted with
the intent to
delay, frustrate, defraud, or obstruct the panel's determination of privilege,
attorney work
product, or trade secret protection claims.
(b) Failure to Produce Document._ A failure by a tobacco product manufacturer
to produce
indexes and documents in compliance with the schedule set forth in this title, or
with such
extension as may be granted by the panel, shall be punished by a civil penalty
of up to $50,000
per violation. A separate violation occurs for each document the manufacturer
has failed to
produce in a timely manner. The maximum penalty under this subsection for a
related series of
violations is $5,000,000. In determining the amount of anycivil penalty, the panel
shall consider
the number of documents, length of delay, any history of prior violations, the
ability to pay, and
such other matters as justice requires. Nothing in this title shall replace or
supersede any criminal
sanction under title 18, United States Code, or any other provision of law.
SEC. 909. DEFINITIONS.
For the purposes of this title_
(1) Document._ The term ``document'' includes originals and drafts of any kind
of written or
graphic matter, regardless of the manner of production or reproduction, of any
kind or
description, whether sent or received or neither, and all copies thereof that are
different in any
way from the original (whether by interlineation, receipt stamp, notation,
indication of copies
sent or received or otherwise) regardless of whether confidential, privileged, or
otherwise,
including any paper, book, account, photograph, blueprint, drawing, agreement,
contract,
memorandum, advertising material, letter, telegram, object, report, record,
transcript, study, note,
notation, working paper, intra-office communication, intra-department
communication, chart,
minute, index sheet, routing sheet, computer software, computer data, delivery
ticket, flow sheet,
price list, quotation, bulletin, circular, manual, summary, recording of telephone
or other
conversation or of interviews, or of conferences, or any other written, recorded,
transcribed,
punched, taped, filmed, or graphic matter, regardless of the manner produced or
reproduced.
Such term also includes any tape, recording, videotape, computerization, or other
electronic
recording, whether digital or analog or a combination thereof.
(2) Trade secret._ The term ``trade secret'' means any commercially valuable
plan, formula,
process, or device that is used for making, compounding, processing, or
preparing trade
commodities and that can be said to be the end-product of either innovation or
substantial effort,
for which there is a direct relationship between the plan, formula, process, or
device and the
productive process.
(3) Certain actions deemed to be proceedings._ Any action undertaken under
this title,
including the search, indexing, and production of documents, is deemed to be
a ``proceeding''
before the executive branch of the United States.
(4) Other terms._ Any term used in this title that is defined in section 701 has
the meaning
given to it by that section.
TITLE X_LONG-TERM ECONOMIC ASSISTANCE FOR FARMERS
SEC. 1001. SHORT TITLE.
This title may be cited as the ``Long-Term Economic Assistance for Farmers
Act'' or the
``LEAF Act''.
SEC. 1002. DEFINITIONS.
In this title:
(1) Participating tobacco producer ._The term ``participating tobacco
producer'' means a quota
holder, quota lessee, or quota tenant.
(2) Quota holder ._The term ``quota holder'' means an owner of a farm on
January 1, 1998, for
which a tobacco farm marketing quota or farm acreage allotment was established
under the
Agricultural Adjustment Act of 1938 (7 U.S.C. 1281 et seq.).
(3) Quota lessee ._The term ``quota lessee'' means_
(A) a producer that owns a farm that produced tobacco pursuant to a lease and
transfer to that
farm of all or part of a tobacco farm marketing quota or farm acreage allotment
established under
the Agricultural Adjustment Act of 1938 (7 U.S.C. 1281 et seq.) for any of the
1995, 1996, or
1997 crop years; or
(B) a producer that rented land from a farm operator to produce tobacco under
a tobacco farm
marketing quota or farm acreage allotment established under the Agricultural
Adjustment Act of
1938 (7 U.S.C. 1281 et seq.) for any of the 1995, 1996, or 1997 crop years.
(4) Quota tenant ._The term ``quota tenant'' means a producer that_
(A) is the principal producer, as determined by the Secretary, of tobacco on a
farm where
tobacco is produced pursuant to a tobacco farm marketing quota or farm acreage
allotment
established under the Agricultural Adjustment Act of 1938 (7 U.S.C. 1281 et seq.)
for any of the
1995, 1996, or 1997 crop years; and
(B) is not a quota holder or quota lessee.
(5) Secretary ._The term ``Secretary'' means_
(A) in subtitles A and B, the Secretary of Agriculture; and
(B) in section 1031, the Secretary of Labor.
(6) Tobacco product importer ._The term ``tobacco product importer'' has the
meaning given
the term ``importer'' in section 5702 of the Internal Revenue Code of 1986.
(7) Tobacco product manufacturer ._
(A) In general ._The term ``tobacco product manufacturer'' has the meaning
given the term
``manufacturer of tobacco products'' in section 5702 of the Internal Revenue
Code of 1986.
(B) Exclusion ._The term ``tobacco product manufacturer'' does not include a
person that
manufactures cigars or pipe tobacco.
(8) Tobacco warehouse owner ._The term ``tobacco warehouse owner'' means
a
warehouseman that participated in an auction market (as defined in the first
section of the
Tobacco Inspection Act (7 U.S.C. 511)) during the 1998 marketing year.
(9) Flue-cured tobacco._ The term ``flue-cured tobacco'' includes type 21 and
type 37 tobacco.
Subtitle A_Tobacco Community Revitalization
SEC. 1011. AUTHORIZATION OF APPROPRIATIONS.
There are appropriated and transferred to the Secretary for each fiscal year such
amounts from
the National Tobacco Trust Fund established by section 401, other than from
amounts in the
State Litigation Settlement Account, as may be necessary to carry out the
provisions of this title.
SEC. 1012. EXPENDITURES.
The Secretary is authorized, subject to appropriations, to make payments under_
(1) section 1021 for payments for lost tobacco quota for each of fiscal years
1999 through 2023,
but not to exceed $1,650,000,000 for any fiscal year except to the extent the
payments are made
in accordance with subsection (d)(12) or (e)(9) of section 1021;
(2) section 1022 for industry payments for all costs of the Department of
Agriculture
associated with the production of tobacco;
(3) section 1023 for tobacco community economic development grants, but not
to exceed_
(A) $375,000,000 for each of fiscal years 1999 through 2008, less any amount
required to be
paid under section 1022 for the fiscal year; and
(B) $450,000,000 for each of fiscal year 2009 through 2023, less any amount
required to be
paid under section 1022 during the fiscal year;
(4) section 1031 for assistance provided under the tobacco worker transition
program, but not
to exceed $25,000,000 for any fiscal year; and
(5) subpart 9 of part A of title IV of the Higher Education Act of 1965 for farmer
opportunity
grants, but not to exceed_
(A) $42,500,000 for each of the academic years 19992000 through
2003 2004;
(B) $50,000,000 for each of the academic years 20042005 through
2008 2009;
(C) $57,500,000 for each of the academic years 20092010 through
2013 2014;
(D) $65,000,000 for each of the academic years 20142015 through
2018 2019; and
(E) $72,500,000 for each of the academic years 20192020 through 2023
2024.
SEC. 1013. BUDGETARY TREATMENT.
This subtitle constitutes budget authority in advance of appropriations Acts and
represents the
obligation of the Federal Government to provide payments to States and eligible
persons in
accordance with this title.
Subtitle B_Tobacco Market Transition Assistance
SEC. 1021. PAYMENTS FOR LOST TOBACCO QUOTA.
(a) In General ._Beginning with the 1999 marketing year, the Secretary shall
make payments
for lost tobacco quota to eligible quota holders, quota lessees, and quota tenants
as
reimbursement for lost tobacco quota.
(b) Eligibility ._To be eligible to receive payments under this section, a quota
holder, quota
lessee, or quota tenant shall_
(1) prepare and submit to the Secretary an application at such time, in such
manner, and
containing such information as the Secretary may require, including information
sufficient to
make the demonstration required under paragraph (2); and
(2) demonstrate to the satisfaction of the Secretary that, with respect to the
1997 marketing
year_
(A) the producer was a quota holder and realized income (or would have
realized income, as
determined by the Secretary, but for a medical hardship or crop disaster during
the 1997
marketing year) from the production of tobacco through_
(i) the active production of tobacco;
(ii) the lease and transfer of tobacco quota to another farm;
(iii) the rental of all or part of the farm of the quota holder, including the right
to produce
tobacco, to another tobacco producer; or
(iv) the hiring of a quota tenant to produce tobacco;
(B) the producer was a quota lessee; or
(C) the producer was a quota tenant.
(c) Base Quota Level ._
(1) In general ._The Secretary shall determine, for each quota holder, quota
lessee, and quota
tenant, the base quota level for the 1995 through 1997 marketing years.
(2) Quota holders ._The base quota level for a quota holder shall be equal to
the average
tobacco farm marketing quota established for the farm owned by the quota
holder for the 1995
through 1997 marketing years.
(3) Quota lessees ._The base quota level for a quota lessee shall be equal to_
(A) 50 percent of the average number of pounds of tobacco quota established
for the farm for
the 1995 through 1997 marketing years_
(i) that was leased and transferred to a farm owned by the quota lessee; or
(ii) that was rented to the quota lessee for the right to produce the tobacco;
less
(B) 25 percent of the average number of pounds of tobacco quota described
in subparagraph
(A) for which a quota tenant was the principal producer of the tobacco quota.
(4) Quota tenants ._The base quota level for a quota tenant shall be equal to
the sum of_
(A) 50 percent of the average number of pounds of tobacco quota established
for a farm for the
1995 through 1997 marketing years_
(i) that was owned by a quota holder; and
(ii) for which the quota tenant was the principal producer of the tobacco on the
farm; and
(B) 25 percent of the average number of pounds of tobacco quota for the 1995
through 1997
marketing years_
(i)(I) that was leased and transferred to a farm owned by the quota lessee; or
(II) for which the rights to produce the tobacco were rented to the quota lessee;
and
(ii) for which the quota tenant was the principal producer of the tobacco on the
farm.
(5) Marketing quotas other than poundage quotas ._
(A) In general ._For each type of tobacco for which there is a marketing quota
or allotment
(on an acreage basis), the base quota level for each quota holder, quota lessee,
or quota tenant
shall be determined in accordance with this subsection (based on a poundage
conversion) by
multiplying_
(i) the average tobacco farm marketing quota or allotment for the 1995 through
1997 marketing
years; and
(ii) the average yield per acre for the farm for the type of tobacco for the
marketing years.
(B) Yields not available ._If the average yield per acre is not available for a
farm, the
Secretary shall calculate the base quota for the quota holder, quota lessee, or
quota tenant (based
on a poundage conversion) by determining the amount equal to the product
obtained by
multiplying_
(i) the average tobacco farm marketing quota or allotment for the 1995 through
1997 marketing
years; and
(ii) the average county yield per acre for the county in which the farm is located
for the type of
tobacco for the marketing years.
(d) Payments for Lost Tobacco Quota for Types of Tobacco Other Than
Flue-Cured Tobacco
._
(1) Allocation of funds ._Of the amounts made available under section
1011(d)(1) for
payments for lost tobacco quota, the Secretary shall make available for payments
under this
subsection an amount that bears the same ratio to the amounts made available
as_
(A) the sum of all national marketing quotas for all types of tobacco other than
flue-cured
tobacco during the 1995 through 1997 marketing years; bears to
(B) the sum of all national marketing quotas for all types of tobacco during the
1995 through
1997 marketing years.
(2) Option to relinquish quota ._
(A) In general ._Each quota holder, for types of tobacco other than flue-cured
tobacco,
shall be given the option to relinquish the farm marketing quota or farm acreage
allotment of the
quota holder in exchange for a payment made under paragraph (3).
(B) Notification ._A quota holder shall give notification of the intention of the
quota holder to
exercise the option at such time and in such manner as the Secretary may
require, but not later
than January 15, 1999.
(3) Payments for lost tobacco quota to quota holders exercising options to
relinquish quota ._
(A) In general ._Subject to subparagraph (E), for each of fiscal years 1999
through 2008, the
Secretary shall make annual payments for lost tobacco quota to each quota
holder that has
relinquished the farm marketing quota or farm acreage allotment of the quota
holder under
paragraph (2).
(B) Amount ._The amount of a payment made to a quota holder described in
subparagraph (A)
for a marketing year shall equal \1/10\ of the lifetime limitation established under
subparagraph
(E).
(C) Timing ._The Secretary shall begin making annual payments under this
paragraph for the
marketing year in which the farm marketing quota or farm acreage allotment is
relinquished.
(D) Additional payments ._The Secretary may increase annual payments under
this paragraph
in accordance with paragraph (7)(E) to the extent that funding is available.
(E) Lifetime limitation on payments ._The total amount of payments made
under this
paragraph to a quota holder shall not exceed the product obtained by multiplying
the base quota
level for the quota holder by $8 per pound.
(4) Reissuance of quota ._
(A) Reallocation to lessee or tenant ._If a quota holder exercises an option to
relinquish a
tobacco farm marketing quota or farm acreage allotment under paragraph (2), a
quota lessee or
quota tenant that was the primary producer during the 1997 marketing year of
tobacco pursuant
to the farm marketing quota or farm acreage allotment, as determined by the
Secretary, shall be
given the option of having an allotment of the farm marketing quota or farm
acreage allotment
reallocated to a farm owned by the quota lessee or quota tenant.
(B) Conditions for reallocation ._
(i) Timing ._A quota lessee or quota tenant that is given the option of having
an allotment of a
farm marketing quota or farm acreage allotment reallocated to a farm owned by
the quota lessee
or quota tenant under subparagraph (A) shall have 1 year from the date on which
a farm
marketing quota or farm acreage allotment is relinquished under paragraph (2)
to exercise the
option.
(ii) Limitation on acreage allotment ._In the case of a farm acreage allotment,
the acreage
allotment determined for any farm subsequent to any reallocation under
subparagraph (A) shall
not exceed 50 percent of the acreage of cropland of the farm owned by the quota
lessee or quota
tenant.
(iii) Limitation on marketing quota ._In the case of a farm marketing quota, the
marketing
quota determined for any farm subsequent to any reallocation under
subparagraph (A) shall not
exceed an amount determined by multiplying_
(I) the average county farm yield, as determined by the Secretary; and
(II) 50 percent of the acreage of cropland of the farm owned by the quota
lessee or quota
tenant.
(C) Eligibility of lessee or tenant for payments ._If a farm marketing quota or
farm acreage
allotment is reallocated to a quota lessee or quota tenant under subparagraph
(A)_
(i) the quota lessee or quota tenant shall not be eligible for any additional
payments under
paragraph (5) or (6) as a result of the reallocation; and
(ii) the base quota level for the quota lessee or quota tenant shall not be
increased as a result of
the reallocation.
(D) Reallocation to quota holders within same county or state ._
(i) In general ._Except as provided in clause (ii), if there was no quota lessee
or quota tenant
for the farm marketing quota or farm acreage allotment for a type of tobacco, or
if no quota
lessee or quota tenant exercises an option of having an allotment of the farm
marketing quota or
farm acreage allotment for a type of tobacco reallocated, the Secretary shall
reapportion the farm
marketing quota or farm acreage allotment among the remaining quota holders
for the type of
tobacco within the same county.
(ii) Cross-county leasing ._In a State in which cross-county leasing is
authorized pursuant to
section 319(l) of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1314e( l )), the
Secretary
shall reapportion the farm marketing quota among the remaining quota holders
for the type of
tobacco within the same State.
(iii) Eligibility of quota holder for payments ._If a farm marketing quota is
reapportioned to a
quota holder under this subparagraph_
(I) the quota holder shall not be eligible for any additional payments under
paragraph (5) or (6)
as a result of the reapportionment; and
(II) the base quota level for the quota holder shall not be increased as a result
of the
reapportionment.
(E) Special rule for tenant of leased tobacco ._If a quota holder exercises an
option to
relinquish a tobacco farm marketing quota or farm acreage allotment under
paragraph (2), the
farm marketing quota or farm acreage allotment shall be divided evenly between,
and the option
of reallocating the farm marketing quota or farm acreage allotment shall be
offered in equal
portions to, the quota lessee and to the quota tenant, if_
(i) during the 1997 marketing year, the farm marketing quota or farm acreage
allotment was
leased and transferred to a farm owned by the quota lessee; and
(ii) the quota tenant was the primary producer, as determined by the Secretary,
of tobacco
pursuant to the farm marketing quota or farm acreage allotment.
(5) Payments for lost tobacco quota to quota holders ._
(A) In general ._Except as otherwise provided in this subsection, during any
marketing year in
which the national marketing quota for a type of tobacco is less than the average
national
marketing quota for the 1995 through 1997 marketing years, the Secretary shall
make payments
for lost tobacco quota to each quota holder, for types of tobacco other than
flue-cured tobacco,
that is eligible under subsection (b), and has not exercised an option to
relinquish a tobacco farm
marketing quota or farm acreage allotment under paragraph (2), in an amount
that is equal to the
product obtained by multiplying_
(i) the number of pounds by which the basic farm marketing quota (or
poundage conversion) is
less than the base quota level for the quota holder; and
(ii) $4 per pound.
(B) Poundage conversion for marketing quotas other than poundage quotas
._
(i) In general ._For each type of tobacco for which there is a marketing quota
or allotment (on
an acreage basis), the poundage conversion for each quota holder during a
marketing year shall
be determined by multiplying_
(I) the basic farm acreage allotment for the farm for the marketing year; and
(II) the average yield per acre for the farm for the type of tobacco.
(ii) Yield not available ._If the average yield per acre is not available for a farm,
the Secretary
shall calculate the poundage conversion for each quota holder during a
marketing year by
multiplying_
(I) the basic farm acreage allotment for the farm for the marketing year; and
(II) the average county yield per acre for the county in which the farm is located
for the type of
tobacco.
(6) Payments for lost tobacco quota to quota lessees and quota tenants
._Except as otherwise
provided in this subsection, during any marketing year in which the national
marketing quota for
a type of tobacco is less than the average national marketing quota for the type
of tobacco for the
1995 through 1997 marketing years, the Secretary shall make payments for lost
tobacco quota to
each quota lessee and quota tenant, for types of tobacco other than flue-cured
tobacco, that is
eligible under subsection (b) in an amount that is equal to the product obtained
by multiplying_
(A) the percentage by which the national marketing quota for the type of
tobacco is less than
the average national marketing quota for the type of tobacco for the 1995 through
1997
marketing years;
(B) the base quota level for the quota lessee or quota tenant; and
(C) $4 per pound.
(7) Lifetime limitation on payments ._Except as otherwise provided in this
subsection, the
total amount of payments made under this subsection to a quota holder, quota
lessee, or quota
tenant during the lifetime of the quota holder, quota lessee, or quota tenant shall
not exceed the
product obtained by multiplying_
(A) the base quota level for the quota holder, quota lessee, or quota tenant;
and
(B) $8 per pound.
(8) Limitations on aggregate annual payments ._
(A) In general ._Except as otherwise provided in this paragraph, the total
amount payable
under this subsection for any marketing year shall not exceed the amount made
available under
paragraph (1).
(B) Accelerated payments ._Paragraph (1) shall not apply if accelerated
payments for lost
tobacco quota are made in accordance with paragraph (12).
(C) Reductions ._If the sum of the amounts determined under paragraphs (3),
(5), and (6) for a
marketing year exceeds the amount made available under paragraph (1), the
Secretary shall make
a pro rata reduction in the amounts payable under paragraphs (5) and (6) to
quota holders, quota
lessees, and quota tenants under this subsection to ensure that the total amount
of payments for
lost tobacco quota does not exceed the amount made available under paragraph
(1).
(D) Rollover of payments for lost tobacco quota ._Subject to subparagraph (A),
if the
Secretary makes a reduction in accordance with subparagraph (C), the amount
of the reduction
shall be applied to the next marketing year and added to the payments for lost
tobacco quota for
the marketing year.
(E) Additional payments to quota holders exercising option to relinquish quota
._If the amount
made available under paragraph (1) exceeds the sum of the amounts determined
under
paragraphs (3), (5), and (6) for a marketing year, the Secretary shall distribute the
amount of the
excess pro rata to quota holders that have exercised an option to relinquish a
tobacco farm
marketing quota or farm acreage allotment under paragraph (2) by increasing the
amount payable
to each such holder under paragraph (3).
(9) Subsequent sale and transfer of quota ._Effective beginning with the 1999
marketing year,
on the sale and transfer of a farm marketing quota or farm acreage allotment
under section
316(g) or 319(g) of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1314b(g),
1314e(g))_
(A) the person that sold and transferred the quota or allotment shall have_
(i) the base quota level attributable to the person reduced by the base quota
level attributable to
the quota that is sold and transferred; and
(ii) the lifetime limitation on payments established under paragraph (7)
attributable to the
person reduced by the product obtained by multiplying_
(I) the base quota level attributable to the quota; and
(II) $8 per pound; and
(B) if the quota or allotment has never been relinquished by a previous quota
holder under
paragraph (2), the person that acquired the quota shall have_
(i) the base quota level attributable to the person increased by the base quota
level attributable
to the quota that is sold and transferred; and
(ii) the lifetime limitation on payments established under paragraph (7)
attributable to the
person_
(I) increased by the product obtained by multiplying_
(aa) the base quota level attributable to the quota; and
(bb) $8 per pound; but
(II) decreased by any payments under paragraph (5) for lost tobacco quota
previously made
that are attributable to the quota that is sold and transferred.
(10) Sale or transfer of farm ._On the sale or transfer of ownership of a farm
that is owned by
a quota holder, the base quota level established under subsection (c), the right
to payments under
paragraph (5), and the lifetime limitation on payments established under
paragraph (7) shall
transfer to the new owner of the farm to the same extent and in the same manner
as those
provisions applied to the previous quota holder.
(11) Death of quota lessee or quota tenant ._If a quota lessee or quota tenant
that is entitled to
payments under this subsection dies and is survived by a spouse or 1 or more
dependents, the
right to receive the payments shall transfer to the surviving spouse or, if there
is no surviving
spouse, to the surviving dependents in equal shares.
(12) Acceleration of payments ._
(A) In general ._On the occurrence of any of the events described in
subparagraph (B), the
Secretary shall make an accelerated lump sum payment for lost tobacco quota
as established
under paragraphs (5) and (6) to each quota holder, quota lessee, and quota
tenant for any affected
type of tobacco in accordance with subparagraph (C).
(B) Triggering events ._The Secretary shall make accelerated payments under
subparagraph
(A) if after the date of enactment of this Act_
(i) subject to subparagraph (D), for 3 consecutive marketing years, the national
marketing
quota or national acreage allotment for a type of tobacco is less than 50 percent
of the national
marketing quota or national acreage allotment for the type of tobacco for the
1998 marketing
year; or
(ii) Congress repeals or makes ineffective, directly or indirectly, any provision
of_
(I) section 316 of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1314b);
(II) section 319 of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1314e);
(III) section 106 of the Agricultural Act of 1949 (7 U.S.C. 1445);
(IV) section 106A of the Agricultural Act of 1949 (7 U.S.C. 14451); or
(V) section 106B of the Agricultural Act of 1949 (7 U.S.C. 14452).
(C) Amount ._The amount of the accelerated payments made to each quota
holder, quota
lessee, and quota tenant under this subsection shall be equal to_
(i) the amount of the lifetime limitation established for the quota holder, quota
lessee, or quota
tenant under paragraph (7); less
(ii) any payments for lost tobacco quota received by the quota holder, quota
lessee, or quota
tenant before the occurrence of any of the events described in subparagraph (B).
(D) Referendum vote not a triggering event ._A referendum vote of producers
for any type of
tobacco that results in the national marketing quota or national acreage allotment
not being in
effect for the type of tobacco shall not be considered a triggering event under
this paragraph.
(13) Ban on subsequent sale or leasing of farm marketing quota or farm
acreage allotment to
quota holders exercising option to relinquish quota ._No quota holder that
exercises the option to
relinquish a farm marketing quota or farm acreage allotment for any type of
tobacco under
paragraph (2) shall be eligible to acquire a farm marketing quota or farm acreage
allotment for
the type of tobacco, or to obtain the lease or transfer of a farm marketing quota
or farm acreage
allotment for the type of tobacco, for a period of 25 crop years after the date on
which the quota
or allotment was relinquished.
(e) Payments for Lost Tobacco Quota for Flue-Cured Tobacco ._
(1) Allocation of funds ._Of the amounts made available under section
1011(d)(1) for
payments for lost tobacco quota, the Secretary shall make available for payments
under this
subsection an amount that bears the same ratio to the amounts made available
as_
(A) the sum of all national marketing quotas for flue-cured tobacco during the
1995 through
1997 marketing years; bears to
(B) the sum of all national marketing quotas for all types of tobacco during the
1995 through
1997 marketing years.
(2) Relinquishment of quota ._
(A) In general ._Each quota holder of flue-cured tobacco shall relinquish the
farm marketing
quota or farm acreage allotment in exchange for a payment made under
paragraph (3) due to the
transition from farm marketing quotas as provided under section 317 of the
Agricultural
Adjustment Act of 1938 for flue-cured tobacco to individual tobacco production
permits as
provided under section 317A of the Agricultural Adjustment Act of 1938 for
flue-cured tobacco.
(B) Notification ._The Secretary shall notify the quota holders of the
relinquishment of their
quota or allotment at such time and in such manner as the Secretary may
require, but not later
than November 15, 1998.
(3) Payments for lost flue-cured tobacco quota to quota holders that relinquish
quota ._
(A) In general ._For each of fiscal years 1999 through 2008, the Secretary shall
make annual
payments for lost flue-cured tobacco to each quota holder that has relinquished
the farm
marketing quota or farm acreage allotment of the quota holder under paragraph
(2).
(B) Amount ._The amount of a payment made to a quota holder described in
subparagraph (A)
for a marketing year shall equal \1/10\ of the lifetime limitation established under
paragraph (6).
(C) Timing ._The Secretary shall begin making annual payments under this
paragraph for the
marketing year in which the farm marketing quota or farm acreage allotment is
relinquished.
(D) Additional payments ._The Secretary may increase annual payments under
this paragraph
in accordance with paragraph (7)(E) to the extent that funding is available.
(4) Payments for lost flue-cured tobacco quota to quota lessees and quota
tenants that have not
relinquished permits ._
(A) In general ._Except as otherwise provided in this subsection, during any
marketing year in
which the national marketing quota for flue-cured tobacco is less than the
average national
marketing quota for the 1995 through 1997 marketing years, the Secretary shall
make payments
for lost tobacco quota to each quota lessee or quota tenant that_
(i) is eligible under subsection (b);
(ii) has been issued an individual tobacco production permit under section
317A(b) of the
Agricultural Adjustment Act of 1938; and
(iii) has not exercised an option to relinquish the permit.
(B) Amount ._The amount of a payment made to a quota lessee or quota
tenant described in
subparagraph (A) for a marketing year shall be equal to the product obtained by
multiplying_
(i) the number of pounds by which the individual marketing limitation
established for the
permit is less than twice the base quota level for the quota lessee or quota
tenant; and
(ii) $2 per pound.
(5) Payments for lost flue-cured tobacco quota to quota lessees and quota
tenants that have
relinquished permits ._
(A) In general ._For each of fiscal years 1999 through 2008, the Secretary shall
make annual
payments for lost flue-cured tobacco quota to each quota lessee and quota
tenant that has
relinquished an individual tobacco production permit under section 317A(b)(5)
of the
Agricultural Adjustment Act of 1938.
(B) Amount ._The amount of a payment made to a quota lessee or quota
tenant described in
subparagraph (A) for a marketing year shall be equal to \1/10\ of the lifetime
limitation
established under paragraph (6).
(C) Timing ._The Secretary shall begin making annual payments under this
paragraph for the
marketing year in which the individual tobacco production permit is relinquished.
(D) Additional payments ._The Secretary may increase annual payments under
this paragraph
in accordance with paragraph (7)(E) to the extent that funding is available.
(E) Prohibition against permit expansion ._A quota lessee or quota tenant that
receives a
payment under this paragraph shall be ineligible to receive any new or increased
tobacco
production permit from the county production pool established under section
317A(b)(8) of the
Agricultural Adjustment Act of 1938.
(6) Lifetime limitation on payments ._Except as otherwise provided in this
subsection, the
total amount of payments made under this subsection to a quota holder, quota
lessee, or quota
tenant during the lifetime of the quota holder, quota lessee, or quota tenant shall
not exceed the
product obtained by multiplying_
(A) the base quota level for the quota holder, quota lessee, or quota tenant;
and
(B) $8 per pound.
(7) Limitations on aggregate annual payments ._
(A) In general ._Except as otherwise provided in this paragraph, the total
amount payable
under this subsection for any marketing year shall not exceed the amount made
available under
paragraph (1).
(B) Accelerated payments ._Paragraph (1) shall not apply if accelerated
payments for lost
flue-cured tobacco quota are made in accordance with paragraph (9).
(C) Reductions ._If the sum of the amounts determined under paragraphs (3),
(4), and (5) for a
marketing year exceeds the amount made available under paragraph (1), the
Secretary shall make
a pro rata reduction in the amounts payable under paragraph (4) to quota lessees
and quota
tenants under this subsection to ensure that the total amount of payments for
lost flue-cured
tobacco quota does not exceed the amount made available under paragraph (1).
(D) Rollover of payments for lost flue-cured tobacco quota ._Subject to
subparagraph (A), if
the Secretary makes a reduction in accordance with subparagraph (C), the
amount of the
reduction shall be applied to the next marketing year and added to the payments
for lost flue-cured tobacco quota for the marketing year.
(E) Additional payments to quota holders exercising option to relinquish
quotas or permits, or
to quota lessees or quota tenants relinquishing permits ._If the amount made
available under
paragraph (1) exceeds the sum of the amounts determined under paragraphs (3),
(4), and (5) for a
marketing year, the Secretary shall distribute the amount of the excess pro rata
to quota holders
by increasing the amount payable to each such holder under paragraphs (3) and
(5).
(8) Death of quota holder, quota lessee, or quota tenant ._If a quota holder,
quota lessee or
quota tenant that is entitled to payments under paragraph (4) or (5) dies and is
survived by a
spouse or 1 or more descendants, the right to receive the payments shall
transfer to the surviving
spouse or, if there is no surviving spouse, to the surviving descendants in equal
shares.
(9) Acceleration of payments ._
(A) In general ._On the occurrence of any of the events described in
subparagraph (B), the
Secretary shall make an accelerated lump sum payment for lost flue-cured
tobacco quota as
established under paragraphs (3), (4), and (5) to each quota holder, quota lessee,
and quota tenant
for flue-cured tobacco in accordance with subparagraph (C).
(B) Triggering events ._The Secretary shall make accelerated payments under
subparagraph
(A) if after the date of enactment of this Act_
(i) subject to subparagraph (D), for 3 consecutive marketing years, the national
marketing
quota or national acreage allotment for flue-cured tobacco is less than 50 percent
of the national
marketing quota or national acreage allotment for flue-cured tobacco for the 1998
marketing
year; or
(ii) Congress repeals or makes ineffective, directly or indirectly, any provision
of_
(I) section 316 of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1314b);
(II) section 319 of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1314e);
(III) section 106 of the Agricultural Act of 1949 (7 U.S.C. 1445);
(IV) section 106A of the Agricultural Act of 1949 (7 U.S.C. 14451);
(V) section 106B of the Agricultural Act of 1949 (7 U.S.C. 14452); or
(VI) section 317A of the Agricultural Adjustment Act of 1938.
(C) Amount ._The amount of the accelerated payments made to each quota
holder, quota
lessee, and quota tenant under this subsection shall be equal to_
(i) the amount of the lifetime limitation established for the quota holder, quota
lessee, or quota
tenant under paragraph (6); less
(ii) any payments for lost flue-cured tobacco quota received by the quota
holder, quota lessee,
or quota tenant before the occurrence of any of the events described in
subparagraph (B).
(D) Referendum vote not a triggering event ._A referendum vote of producers
for flue-cured
tobacco that results in the national marketing quota or national acreage allotment
not being in
effect for flue-cured tobacco shall not be considered a triggering event under this
paragraph.
SEC. 1022. INDUSTRY PAYMENTS FOR ALL DEPARTMENT COSTS
ASSOCIATEDWITH TOBACCO PRODUCTION.
(a) In General ._The Secretary shall use such amounts remaining unspent and
obligated at the
end of each fiscal year to reimburse the Secretary for_
(1) costs associated with the administration of programs established under this
title and
amendments made by this title;
(2) costs associated with the administration of the tobacco quota and price
support programs
administered by the Secretary;
(3) costs to the Federal Government of carrying out crop insurance programs
for tobacco;
(4) costs associated with all agricultural research, extension, or education
activities associated
with tobacco;
(5) costs associated with the administration of loan association and
cooperative programs for
tobacco producers, as approved by the Secretary; and
(6) any other costs incurred by the Department of Agriculture associated with
the production of
tobacco.
(b) Limitations ._Amounts made available under subsection (a) may not be
used_
(1) to provide direct benefits to quota holders, quota lessees, or quota tenants;
or
(2) in a manner that results in a decrease, or an increase relative to other
crops, in the amount
of the crop insurance premiums assessed to participating tobacco producers
under the Federal
Crop Insurance Act (7 U.S.C. 1501 et seq.).
(c) Determinations ._Not later than September 30, 1998, and each fiscal year
thereafter, the
Secretary shall determine_
(1) the amount of costs described in subsection (a); and
(2) the amount that will be provided under this section as reimbursement for
the costs.
SEC. 1023. TOBACCO COMMUNITY ECONOMIC DEVELOPMENT GRANTS.
(a) Authority ._The Secretary shall make grants to tobacco-growing States in
accordance with
this section to enable the States to carry out economic development initiatives
in tobacco-growing communities.
(b) Application ._To be eligible to receive payments under this section, a State
shall prepare
and submit to the Secretary an application at such time, in such manner, and
containing such
information as the Secretary may require, including_
(1) a description of the activities that the State will carry out using amounts
received under the
grant;
(2) a designation of an appropriate State agency to administer amounts
received under the
grant; and
(3) a description of the steps to be taken to ensure that the funds are
distributed in accordance
with subsection (e).
(c) Amount of Grant ._
(1) In general ._From the amounts available to carry out this section for a
fiscal year, the
Secretary shall allot to each State an amount that bears the same ratio to the
amounts available as
the total farm income of the State derived from the production of tobacco during
the 1995
through 1997 marketing years (as determined under paragraph (2)) bears to the
total farm income
of all States derived from the production of tobacco during the 1995 through
1997 marketing
years.
(2) Tobacco income ._For the 1995 through 1997 marketing years, the
Secretary shall
determine the amount of farm income derived from the production of tobacco in
each State and
in all States.
(d) Payments ._
(1) In general ._A State that has an application approved by the Secretary
under subsection (b)
shall be entitled to a payment under this section in an amount that is equal to its
allotment under
subsection (c).
(2) Form of payments ._The Secretary may make payments under this section
to a State in
installments, and in advance or by way of reimbursement, with necessary
adjustments on account
of overpayments or underpayments, as the Secretary may determine.
(3) Reallotments ._Any portion of the allotment of a State under subsection (c)
that the
Secretary determines will not be used to carry out this section in accordance
with an approved
State application required under subsection (b), shall be reallotted by the
Secretary to other
States in proportion to the original allotments to the other States.
(e) Use and Distribution of Funds ._
(1) In general ._Amounts received by a State under this section shall be used
to carry out
economic development activities, including_
(A) rural business enterprise activities described in subsections (c) and (e) of
section 310B of
the Consolidated Farm and Rural Development Act (7 U.S.C. 1932);
(B) down payment loan assistance programs that are similar to the program
described in
section 310E of the Consolidated Farm and Rural Development Act (7 U.S.C.
1935);
(C) activities designed to help create productive farm or off-farm employment
in rural areas to
provide a more viable economic base and enhance opportunities for improved
incomes, living
standards, and contributions by rural individuals to the economic and social
development of
tobacco communities;
(D) activities that expand existing infrastructure, facilities, and services to
capitalize on
opportunities to diversify economies in tobacco communities and that support
the development
of new industries or commercial ventures;
(E) activities by agricultural organizations that provide assistance directly to
participating
tobacco producers to assist in developing other agricultural activities that
supplement tobacco-producing activities;
(F) initiatives designed to create or expand locally owned value-added
processing and
marketing operations in tobacco communities;
(G) technical assistance activities by persons to support farmer-owned
enterprises, or
agriculture-based rural development enterprises, of the type described in section
252 or 253 of
the Trade Act of 1974 (19 U.S.C. 2342, 2343); and
(H) initiatives designed to partially compensate tobacco warehouse owners for
lost revenues
and assist the tobacco warehouse owners in establishing successful business
enterprises.
(2) Tobacco-growing counties ._Assistance may be provided by a State under
this section only
to assist a county in the State that has been determined by the Secretary to have
in excess of
$100,000 in income derived from the production of tobacco during 1 or more of
the 1995
through 1997 marketing years. For purposes of this section, the term
``tobacco-growing county''
includes a political subdivision surrounded within a State by a county that has
been determined
by the Secretary to have in excess of $100,000 in income derived from the
production of tobacco
during 1 or more of the 1995 through 1997 marketing years.
(3) Distribution ._
(A) Economic development activities ._Not less than 20 percent of the
amounts received by a
State under this section shall be used to carry out_
(i) economic development activities described in subparagraph (E) or (F) of
paragraph (1); or
(ii) agriculture-based rural development activities described in paragraph (1)(G).
(B) Technical assistance activities ._Not less than 4 percent of the amounts
received by a State
under this section shall be used to carry out technical assistance activities
described in paragraph
(1)(G).
(C) Tobacco warehouse owner initiatives ._Not less than 6 percent of the
amounts received by
a State under this section during each of fiscal years 1999 through 2008 shall be
used to carry out
initiatives described in paragraph (1)(H).
(D) Tobacco-growing counties ._To be eligible to receive payments under this
section, a State
shall demonstrate to the Secretary that funding will be provided, during each
5-year period for
which funding is provided under this section, for activities in each county in the
State that has
been determined under paragraph (2) to have in excess of $100,000 in income
derived from the
production of tobacco, in amounts that are at least equal to the product obtained
by multiplying_
(i) the ratio that the tobacco production income in the county determined under
paragraph (2)
bears to the total tobacco production income for the State determined under
subsection (c); and
(ii) 50 percent of the total amounts received by a State under this section
during the 5-year
period.
(f) Preferences in Hiring ._A State may require recipients of funds under this
section to
provide a preference in employment to_
(1) an individual who_
(A) during the 1998 calendar year, was employed in the manufacture,
processing, or
warehousing of tobacco or tobacco products, or resided, in a county described
in subsection
(e)(2); and
(B) is eligible for assistance under the tobacco worker transition program
established under
section 1031; or
(2) an individual who_
(A) during the 1998 marketing year, carried out tobacco quota or relevant
tobacco production
activities in a county described in subsection (e)(2);
(B) is eligible for a farmer opportunity grant under subpart 9 of part A of title
IV of the Higher
Education Act of 1965; and
(C) has successfully completed a course of study at an institution of higher
education.
(g) Maintenance of Effort ._
(1) In general ._Subject to paragraph (2), a State shall provide an assurance
to the Secretary
that the amount of funds expended by the State and all counties in the State
described in
subsection (e)(2) for any activities funded under this section for a fiscal year is
not less than 90
percent of the amount of funds expended by the State and counties for the
activities for the
preceding fiscal year.
(2) Reduction of grant amount ._If a State does not provide an assurance
described in
paragraph (1), the Secretary shall reduce the amount of the grant determined
under subsection (c)
by an amount equal to the amount by which the amount of funds expended by
the State and
counties for the activities is less than 90 percent of the amount of funds
expended by the State
and counties for the activities for the preceding fiscal year, as determined by the
Secretary.
(3) Federal funds ._For purposes of this subsection, the amount of funds
expended by a State
or county shall not include any amounts made available by the Federal
Government.
SEC. 1024. FLUE-CURED TOBACCO PRODUCTION PERMITS.
The Agricultural Adjustment Act of 1938 is amended by inserting after section
317 (7 U.S.C.
1314c) the following:
``SEC. 317A. FLUE-CURED TOBACCO PRODUCTION PERMITS.
``(a) Definitions ._In this section:
``(1) Individual acreage limitation ._The term `individual acreage limitation'
means the
number of acres of flue-cured tobacco that may be planted by the holder of a
permit during a
marketing year, calculated_
``(A) prior to_
``(i) any increase or decrease in the number due to undermarketings or
overmarketings; and
``(ii) any reduction under subsection (i); and
``(B) in a manner that ensures that_
``(i) the total of all individual acreage limitations is equal to the national acreage
allotment,
less the reserve provided under subsection (h); and
``(ii) the individual acreage limitation for a marketing year bears the same ratio
to the
individual acreage limitation for the previous marketing year as the ratio that the
national
acreage allotment for the marketing year bears to the national acreage allotment
for the previous
marketing year, subject to adjustments by the Secretary to account for any
reserve provided
under subsection (h).
``(2) Individual marketing limitation ._The term `individual marketing limitation'
means the
number of pounds of flue-cured tobacco that may be marketed by the holder of
a permit during a
marketing year, calculated_
``(A) prior to_
``(i) any increase or decrease in the number due to undermarketings or
overmarketings; and
``(ii) any reduction under subsection (i); and
``(B) in a manner that ensures that_
``(i) the total of all individual marketing limitations is equal to the national
marketing quota,
less the reserve provided under subsection (h); and
``(ii) the individual marketing limitation for a marketing year is obtained by
multiplying the
individual acreage limitation by the permit yield, prior to any adjustment for
undermarketings or
overmarketings.
``(3) Individual tobacco production permit ._The term `individual tobacco
production permit'
means a permit issued by the Secretary to a person authorizing the production
of flue-cured
tobacco for any marketing year during which this section is effective.
``(4) National acreage allotment ._The term `national acreage allotment' means
the quantity
determined by dividing_
``(A) the national marketing quota; by
``(B) the national average yield goal.
``(5) National average yield goal ._The term `national average yield goal' means
the national
average yield for flue-cured tobacco during the 5 marketing years immediately
preceding the
marketing year for which the determination is being made.
``(6) National marketing quota ._For the 1999 and each subsequent crop of
flue-cured
tobacco, the term `national marketing quota' for a marketing year means the
quantity of flue-cured tobacco, as determined by the Secretary, that is not more
than 103 percent nor less than 97
percent of the total of_
``(A) the aggregate of the quantities of flue-cured tobacco that domestic
manufacturers of
cigarettes estimate that the manufacturers intend to purchase on the United
States auction
markets or from producers during the marketing year, as compiled and
determined under section
320A;
``(B) the average annual quantity of flue-cured tobacco exported from the
United States during
the 3 marketing years immediately preceding the marketing year for which the
determination is
being made; and
``(C) the quantity, if any, of flue-cured tobacco that the Secretary, in the
discretion of the
Secretary, determines is necessary to increase or decrease the inventory of the
producer-owned
cooperative marketing association that has entered into a loan agreement with
the Commodity
Credit Corporation to make price support available to producers of flue-cured
tobacco to
establish or maintain the inventory at the reserve stock level for flue-cured
tobacco.
``(7) Permit yield ._The term `permit yield' means the yield of tobacco per acre
for an
individual tobacco production permit holder that is_
``(A) based on a preliminary permit yield that is equal to the average yield
during the 5
marketing years immediately preceding the marketing year for which the
determination is made
in the county where the holder of the permit is authorized to plant flue-cured
tobacco, as
determined by the Secretary, on the basis of actual yields of farms in the county;
and
``(B) adjusted by a weighted national yield factor calculated by_
``(i) multiplying each preliminary permit yield by the individual acreage
limitation, prior to
adjustments for overmarketings, undermarketings, or reductions required under
subsection (i);
and
``(ii) dividing the sum of the products under clause (i) for all flue-cured
individual tobacco
production permit holders by the national acreage allotment.
``(b) Initial Issuance of Permits ._
``(1) Termination of flue-cured marketing quotas ._On the date of enactment
of the National
Tobacco Policy and Youth Smoking Reduction Act, farm marketing quotas as
provided under
section 317 shall no longer be in effect for flue-cured tobacco.
``(2) Issuance of permits to quota holders that were principal producers ._
``(A) In general ._By January 15, 1999, each individual quota holder under
section 317 that
was a principal producer of flue-cured tobacco during the 1998 marketing year,
as determined by
the Secretary, shall be issued an individual tobacco production permit under this
section.
``(B) Notification ._The Secretary shall notify the holder of each permit of the
individual
acreage limitation and the individual marketing limitation applicable to the holder
for each
marketing year.
``(C) Individual acreage limitation for 1999 marketing year ._In establishing the
individual
acreage limitation for the 1999 marketing year under this section, the farm
acreage allotment that
was allotted to a farm owned by the quota holder for the 1997 marketing year
shall be considered
the individual acreage limitation for the previous marketing year.
``(D) Individual marketing limitation for 1999 marketing year ._In establishing
the individual
marketing limitation for the 1999 marketing year under this section, the farm
marketing quota
that was allotted to a farm owned by the quota holder for the 1997 marketing year
shall be
considered the individual marketing limitation for the previous marketing year.
``(3) Quota holders that were not principal producers ._
``(A) In general ._Except as provided in subparagraph (B), on approval through
a referendum
under subsection (c)_
``(i) each person that was a quota holder under section 317 but that was not a
principal
producer of flue-cured tobacco during the 1997 marketing year, as determined
by the Secretary,
shall not be eligible to own a permit; and
``(ii) the Secretary shall not issue any permit during the 25-year period
beginning on the date
of enactment of this Act to any person that was a quota holder and was not the
principal producer
of flue-cured tobacco during the 1997 marketing year.
``(B) Medical hardships and crop disasters ._Subparagraph (A) shall not apply
to a person that
would have been the principal producer of flue-cured tobacco during the 1997
marketing year
but for a medical hardship or crop disaster that occurred during the 1997
marketing year.
``(C) Administration ._The Secretary shall issue regulations_
``(i) defining the term `person' for the purpose of this paragraph; and
``(ii) prescribing such rules as the Secretary determines are necessary to
ensure a fair and
reasonable application of the prohibition established under this paragraph.
``(4) Issuance of permits to principal producers of flue-cured tobacco ._
``(A) In general ._By January 15, 1999, each individual quota lessee or quota
tenant (as
defined in section 1002 of the LEAF Act) that was the principal producer of
flue-cured tobacco
during the 1997 marketing year, as determined by the Secretary, shall be issued
an individual
tobacco production permit under this section.
``(B) Individual acreage limitations ._In establishing the individual acreage
limitation for the
1999 marketing year under this section, the farm acreage allotment that was
allotted to a farm
owned by a quota holder for whom the quota lessee or quota tenant was the
principal producer of
flue-cured tobacco during the 1997 marketing year shall be considered the
individual acreage
limitation for the previous marketing year.
``(C) Individual marketing limitations ._In establishing the individual marketing
limitation for
the 1999 marketing year under this section, the individual marketing limitation for
the previous
year for an individual described in this paragraph shall be calculated by
multiplying_
``(i) the farm marketing quota that was allotted to a farm owned by a quota
holder for whom
the quota lessee or quota holder was the principal producer of flue-cured
tobacco during the
1997 marketing year, by
``(ii) the ratio that_
``(I) the sum of all flue-cured tobacco farm marketing quotas for the 1997
marketing year prior
to adjusting for undermarketing and overmarketing; bears to
``(II) the sum of all flue-cured tobacco farm marketing quotas for the 1998
marketing year,
after adjusting for undermarketing and overmarketing.
``(D) Special rule for tenant of leased flue-cured tobacco ._If the farm
marketing quota or
farm acreage allotment of a quota holder was produced pursuant to an
agreement under which a
quota lessee rented land from a quota holder and a quota tenant was the primary
producer, as
determined by the Secretary, of flue-cured tobacco pursuant to the farm
marketing quota or farm
acreage allotment, the farm marketing quota or farm acreage allotment shall be
divided
proportionately between the quota lessee and quota tenant for purposes of
issuing individual
tobacco production permits under this paragraph.
``(5) Option of quota lessee or quota tenant to relinquish permit ._
``(A) In general ._Each quota lessee or quota tenant that is issued an individual
tobacco
production permit under paragraph (4) shall be given the option of relinquishing
the permit in
exchange for payments made under section 1021(e)(5) of the LEAF Act.
``(B) Notification ._A quota lessee or quota tenant that is issued an individual
tobacco
production permit shall give notification of the intention to exercise the option
at such time and
in such manner as the Secretary may require, but not later than 45 days after the
permit is issued.
``(C) Reallocation of permit ._The Secretary shall add the authority to produce
flue-cured
tobacco under the individual tobacco production permit relinquished under this
paragraph to the
county production pool established under paragraph (8) for reallocation by the
appropriate
county committee.
``(6) Active producer requirement ._
``(A) Requirement for sharing risk ._No individual tobacco production permit
shall be issued
to, or maintained by, a person that does not fully share in the risk of producing
a crop of flue-cured tobacco.
``(B) Criteria for sharing risk ._For purposes of this paragraph, a person shall
be considered to
have fully shared in the risk of production of a crop if_
``(i) the investment of the person in the production of the crop is not less than
100 percent of
the costs of production associated with the crop;
``(ii) the amount of the person's return on the investment is dependent solely
on the sale price
of the crop; and
``(iii) the person may not receive any of the return before the sale of the crop.
``(C) Persons not sharing risk ._
``(i) Forfeiture ._Any person that fails to fully share in the risks of production
under this
paragraph shall forfeit an individual tobacco production permit if, after notice and
opportunity
for a hearing, the appropriate county committee determines that the conditions
for forfeiture
exist.
``(ii) Reallocation ._The Secretary shall add the authority to produce flue-cured
tobacco under
the individual tobacco production permit forfeited under this subparagraph to the
county
production pool established under paragraph (8) for reallocation by the
appropriate county
committee.
``(D) Notice ._Notice of any determination made by a county committee under
subparagraph
(C) shall be mailed, as soon as practicable, to the person involved.
``(E) Review ._If the person is dissatisfied with the determination, the person
may request, not
later than 15 days after notice of the determination is received, a review of the
determination by
a local review committee under the procedures established under section 363 for
farm marketing
quotas.
``(7) County of origin requirement ._For the 1999 and each subsequent crop
of flue-cured
tobacco, all tobacco produced pursuant to an individual tobacco production
permit shall be
produced in the same county in which was produced the tobacco produced
during the 1997
marketing year pursuant to the farm marketing quota or farm acreage allotment
on which the
individual tobacco production permit is based.
``(8) County production pool ._
``(A) In general ._The authority to produce flue-cured tobacco under an
individual tobacco
production permit that is forfeited, relinquished, or surrendered within a county
may be
reallocated by the appropriate county committee to tobacco producers located
in the same county
that apply to the committee to produce flue-cured tobacco under the authority.
``(B) Priority ._In reallocating individual tobacco production permits under this
paragraph, a
county committee shall provide a priority to_
``(i) an active tobacco producer that controls the authority to produce a
quantity of flue-cured
tobacco under an individual tobacco production permit that is equal to or less
than the average
number of pounds of flue-cured tobacco that was produced by the producer
during each of the
1995 through 1997 marketing years, as determined by the Secretary; and
``(ii) a new tobacco producer.
``(C) Criteria ._Individual tobacco production permits shall be reallocated by
the appropriate
county committee under this paragraph in a fair and equitable manner after
taking into
consideration_
``(i) the experience of the producer;
``(ii) the availability of land, labor, and equipment for the production of tobacco;
``(iii) crop rotation practices; and
``(iv) the soil and other physical factors affecting the production of tobacco.
``(D) Medical hardships and crop disasters ._Notwithstanding any other
provision of this Act,
the Secretary may issue an individual tobacco production permit under this
paragraph to a
producer that is otherwise ineligible for the permit due to a medical hardship or
crop disaster that
occurred during the 1997 marketing year.
``(c) Referendum ._
``(1) Announcement of quota and allotment ._Not later than December 15, 1998,
the Secretary
pursuant to subsection (b) shall determine and announce_
``(A) the quantity of the national marketing quota for flue-cured tobacco for the
1999
marketing year; and
``(B) the national acreage allotment and national average yield goal for the 1999
crop of flue-cured tobacco.
``(2) Special referendum ._Not later than 30 days after the announcement of the
quantity of
the national marketing quota in 2001, the Secretary shall conduct a special
referendum of the
tobacco production permit holders that were the principal producers of
flue-cured tobacco of the
1997 crop to determine whether the producers approve or oppose the
continuation of individual
tobacco production permits on an acreage-poundage basis as provided in this
section for the
2002 through 2004 marketing years.
``(3) Approval of permits ._If the Secretary determines that more than 66\2/3\
percent of the
producers voting in the special referendum approve the establishment of
individual tobacco
production permits on an acreage-poundage basis_
``(A) individual tobacco production permits on an acreage-poundage basis as
provided in this
section shall be in effect for the 2002 through 2004 marketing years; and
``(B) marketing quotas on an acreage-poundage basis shall cease to be in
effect for the 2002
through 2004 marketing years.
``(4) Disapproval of permits ._If individual tobacco production permits on an
acreage-poundage basis are not approved by more than 66\2/3\ percent of the
producers voting in the
referendum, no marketing quotas on an acreage-poundage basis shall continue
in effect that were
proclaimed under section 317 prior to the referendum.
``(5) Applicable marketing years ._If individual tobacco production permits
have been made
effective for flue-cured tobacco on an acreage-poundage basis pursuant to this
subsection, the
Secretary shall, not later than December 15 of any future marketing year,
announce a national
marketing quota for that type of tobacco for the next 3 succeeding marketing
years if the
marketing year is the last year of 3 consecutive years for which individual
tobacco production
permits previously proclaimed will be in effect.
``(d) Annual Announcement of National Marketing Quota ._The Secretary shall
determine and
announce the national marketing quota, national acreage allotment, and national
average yield
goal for the second and third marketing years of any 3-year period for which
individual tobacco
production permits are in effect on or before the December 15 immediately
preceding the
beginning of the marketing year to which the quota, allotment, and goal apply.
``(e) Annual Announcement of Individual Tobacco Production Permits ._If a
national
marketing quota, national acreage allotment, and national average yield goal are
determined and
announced, the Secretary shall provide for the determination of individual
tobacco production
permits, individual acreage limitations, and individual marketing limitations under
this section
for the crop and marketing year covered by the determinations.
``(f) Assignment of Tobacco Production Permits ._
``(1) Limitation to same county ._Each individual tobacco production permit
holder shall
assign the individual acreage limitation and individual marketing limitation to 1
or more farms
located within the county of origin of the individual tobacco production permit.
``(2) Filing with county committee ._The assignment of an individual acreage
limitation and
individual marketing limitation shall not be effective until evidence of the
assignment, in such
form as required by the Secretary, is filed with and determined by the county
committee for the
county in which the farm involved is located.
``(3) Limitation on tillable cropland ._The total acreage assigned to any farm
under this
subsection shall not exceed the acreage of cropland on the farm.
``(g) Prohibition on Sale or Leasing of Individual Tobacco Production Permits
._
``(1) In general ._Except as provided in paragraphs (2) and (3), the Secretary
shall not permit
the sale and transfer, or lease and transfer, of an individual tobacco production
permit issued
under this section.
``(2) Transfer to descendants ._
``(A) Death ._In the case of the death of a person to whom an individual
tobacco production
permit has been issued under this section, the permit shall transfer to the
surviving spouse of the
person or, if there is no surviving spouse, to surviving direct descendants of the
person.
``(B) Temporary inability to farm ._In the case of the death of a person to
whom an individual
tobacco production permit has been issued under this section and whose
descendants are
temporarily unable to produce a crop of tobacco, the Secretary may hold the
license in the name
of the descendants for a period of not more than 18 months.
``(3) Voluntary transfers ._A person that is eligible to obtain an individual
tobacco production
permit under this section may at any time transfer all or part of the permit to the
person's spouse
or direct descendants that are actively engaged in the production of tobacco.
``(h) Reserve ._
``(1) In general ._For each marketing year for which individual tobacco
production permits are
in effect under this section, the Secretary may establish a reserve from the
national marketing
quota in a quantity equal to not more than 1 percent of the national marketing
quota to be
available for_
``(A) making corrections of errors in individual acreage limitations and
individual marketing
limitations;
``(B) adjusting inequities; and
``(C) establishing individual tobacco production permits for new tobacco
producers (except
that not less than two-thirds of the reserve shall be for establishing such permits
for new tobacco
producers).
``(2) Eligible persons ._To be eligible for a new individual tobacco production
permit, a
producer must not have been the principal producer of tobacco during the
immediately preceding
5 years.
``(3) Apportionment for new producers ._The part of the reserve held for
apportionment to
new individual tobacco producers shall be allotted on the basis of_
``(A) land, labor, and equipment available for the production of tobacco;
``(B) crop rotation practices;
``(C) soil and other physical factors affecting the production of tobacco; and
``(D) the past tobacco-producing experience of the producer.
``(4) Permit yield ._The permit yield for any producer for which a new individual
tobacco
production permit is established shall be determined on the basis of available
productivity data
for the land involved and yields for similar farms in the same county.
``(i) Penalties ._
``(1) Production on other farms ._If any quantity of tobacco is marketed as
having been
produced under an individual acreage limitation or individual marketing limitation
assigned to a
farm but was produced on a different farm, the individual acreage limitation or
individual
marketing limitation for the following marketing year shall be forfeited.
``(2) False report ._If a person to which an individual tobacco production
permit is issued
files, or aids or acquiesces in the filing of, a false report with respect to the
assignment of an
individual acreage limitation or individual marketing limitation for a quantity of
tobacco, the
individual acreage limitation or individual marketing limitation for the following
marketing year
shall be forfeited.
``(j) Marketing Penalties ._
``(1) In general ._When individual tobacco production permits under this
section are in effect,
provisions with respect to penalties for the marketing of excess tobacco and the
other provisions
contained in section 314 shall apply in the same manner and to the same extent
as they would
apply under section 317(g) if farm marketing quotas were in effect.
``(2) Production on other farms ._If a producer falsely identifies tobacco as
having been
produced on or marketed from a farm to which an individual acreage limitation
or individual
marketing limitation has been assigned, future individual acreage limitations and
individual
marketing limitations shall be forfeited.''.
SEC. 1025. MODIFICATIONS IN FEDERAL TOBACCO PROGRAMS.
(a) Program Referenda ._Section 312(c) of the Agricultural Adjustment Act of
1938 (7 U.S.C.
1312(c)) is amended_
(1) by striking ``(c) Within thirty'' and inserting the following:
``(c) Referenda on Quotas ._
``(1) In general ._Not later than 30''; and
(2) by adding at the end the following:
``(2) Referenda on program changes ._
``(A) In general ._In the case of any type of tobacco for which marketing
quotas are in effect,
on the receipt of a petition from more than 5 percent of the producers of that
type of tobacco in a
State, the Secretary shall conduct a statewide referendum on any proposal
related to the lease and
transfer of tobacco quota within a State requested by the petition that is
authorized under this
part.
``(B) Approval of proposals ._If a majority of producers of the type of tobacco
in the State
approve a proposal in a referendum conducted under subparagraph (A), the
Secretary shall
implement the proposal in a manner that applies to all producers and quota
holders of that type
of tobacco in the State.''.
(b) Purchase Requirements ._Section 320B of the Agricultural Adjustment Act
of 1938 (7
U.S.C. 1314h) is amended_
(1) in subsection (c)_
(A) by striking ``(c) The amount'' and inserting ``(c) Amount of Penalty ._For
the 1998 and
subsequent marketing years, the amount''; and
(B) by striking paragraph (1) and inserting the following:
``(1) 105 percent of the average market price for the type of tobacco involved
during the
preceding marketing year; and''.
(c) Elimination of Tobacco Marketing Assessment ._
(1) In general ._Section 106 of the Agricultural Act of 1949 (7 U.S.C. 1445) is
amended by
striking subsection (g).
(2) Conforming amendment ._Section 422(c) of the Uruguay Round
Agreements Act (Public
Law 103 465; 7 U.S.C. 1445 note) is amended by striking ``section 106(g),
106A, or 106B of
the Agricultural Act of 1949 (7 U.S.C. 1445(g), 14451, or 14452)'' and
inserting ``section
106A or 106B of the Agricultural Act of 1949 (7 U.S.C. 14451, 14452)''.
(d) Adjustment for Land Rental Costs ._Section 106 of the Agricultural Act of
1949 (7 U.S.C.
1445) is amended by adding at the end the following:
``(h) Adjustment for Land Rental Costs ._For each of the 1999 and 2000
marketing years for
flue-cured tobacco, after consultation with producers, State farm organizations
and cooperative
associations, the Secretary shall make an adjustment in the price support level
for flue-cured
tobacco equal to the annual change in the average cost per pound to flue-cured
producers, as
determined by the Secretary, under agreements through which producers rent
land to produce
flue-cured tobacco.''.
(e) Fire-Cured and D~ark Air-Cured Tobacco Prog~rams ._
(1) Limitation on transfers ._Section 318(g) of the Agricultural Adjustment Act
of 1938 (7
U.S.C. 13l4d(g)) is amended_
(A) by striking ``ten'' and inserting ``30''; and
(B) by inserting ``during any crop year'' after ``transferred to any farm''.
(2) Loss of allotment or quota through underplanting ._Section 318 of the
Agricultural
Adjustment Act of 1938 (7 U.S.C. 1314d) is amended by adding at the end the
following:
``(k) Loss of Allotment or Quota Through Underplanting ._Effective for the 1999
and
subsequent marketing years, no acreage allotment or ac~reage-poundage quota,
other than a new
marketing quota, shall be established for a farm on which no fire-cured or dark
air-cured tobacco
was planted or considered planted during at least 2 of the 3 crop years
immediately preceding the
crop year for which the acreage allotment or acreage-poundage quota would
otherwise be
established.''.
(f) E~xpansion of Types of Tobacco Subject to No Net Cost Assessment ._
(1) No net cost tobacco fund ._Section 106A(d)(1)(A) of the Agricultural Act of
1949 (7
U.S.C. 14451(d)(1)(A)) is amended_
(A) in clause (ii), by inserting after ``Burley quota tobacco'' the following: ``and
fire-cured and
dark air-cured quota tobacco''; and
(B) in clause (iii)_
(i) in the matter preceding subclause (I), by striking ``Flue-cured or Burley
tobacco'' and
inserting ``each kind of tobacco for which price support is made available under
this Act, and
each kind of like tobacco,''; and
(ii) by striking subclause (II) and inserting the following:
``(II) the sum of the amount of the per pound producer contribution and
purchaser assessment
(if any) for the kind of tobacco payable under clauses (i) and (ii); and''.
(2) No net cost tobacco account ._Section 106B(d)(1) of the Agricultural Act
of 1949 (7
U.S.C. 14452(d)(1)) is amended_
(A) in subparagraph (B), by inserting after ``Burley quota tobacco'' the
following: ``and fire-cured and dark air-cured tobacco''; and
(B) in subparagraph (C), by striking ``Flue-cured and Burley tobacco'' and
inserting ``each
kind of tobacco for which price support is made available under this Act, and
each kind of like
tobacco,''.
Subtitle C_Farmer and Worker Transition Assistance
SEC. 1031. TOBACCO WORKER TRANSITION PROGRAM.
(a) Group Eligibility Requirements ._
(1) Criteria ._A group of workers (including workers in any firm or subdivision
of a firm
involved in the manufacture, processing, or warehousing of tobacco or tobacco
products) shall
be certified as eligible to apply for adjustment assistance under this section
pursuant to a petition
filed under subsection (b) if the Secretary of Labor determines that a significant
number or
proportion of the workers in the workers' firm or an appropriate subdivision of
the firm have
become totally or partially separated, or are threatened to become totally or
partially separated,
and_
(A) the sales or production, or both, of the firm or subdivision have decreased
absolutely; and
(B) the implementation of the national tobacco settlement contributed
importantly to the
workers' separation or threat of separation and to the decline in the sales or
production of the
firm or subdivision.
(2) Definition of contributed importantly ._In paragraph (1)(B), the term
``contributed
importantly'' means a cause that is important but not necessarily more important
than any other
cause.
(3) Regulations ._The Secretary shall issue regulations relating to the
application of the
criteria described in paragraph (1) in making preliminary findings under
subsection (b) and
determinations under subsection (c).
(b) Preliminary Findings and Basic Assistance ._
(1) Filing of petitions ._A petition for certification of eligibility to apply for
adjustment
assistance under this section may be filed by a group of workers (including
workers in any firm
or subdivision of a firm involved in the manufacture, processing, or warehousing
of tobacco or
tobacco products) or by their certified or recognized union or other duly
authorized
representative with the Governor of the State in which the workers' firm or
subdivision thereof is
located.
(2) Findings and assistance ._On receipt of a petition under paragraph (1), the
Governor shall_
(A) notify the Secretary that the Governor has received the petition;
(B) within 10 days after receiving the petition_
(i) make a preliminary finding as to whether the petition meets the criteria
described in
subsection (a)(1); and
(ii) transmit the petition, together with a statement of the finding under clause
(i) and reasons
for the finding, to the Secretary for action under subsection (c); and
(C) if the preliminary finding under subparagraph (B)(i) is affirmative, ensure
that rapid
response and basic readjustment services authorized under other Federal laws
are made available
to the workers.
(c) Review of Petitions by Secretary; Certifications ._
(1) In general ._The Secretary, within 30 days after receiving a petition under
subsection
(b)(2)(B)(ii), shall determine whether the petition meets the criteria described in
subsection
(a)(1). On a determination that the petition meets the criteria, the Secretary shall
issue to workers
covered by the petition a certification of eligibility to apply for the assistance
described in
subsection (d).
(2) Denial of certification ._On the denial of a certification with respect to a
petition under
paragraph (1), the Secretary shall review the petition in accordance with the
requirements of
other applicable assistance programs to determine if the workers may be
certified under the other
programs.
(d) Comprehensive Assistance ._
(1) In general ._Workers covered by a certification issued by the Secretary
under subsection
(c)(1) shall be provided with benefits and services described in paragraph (2) in
the same manner
and to the same extent as workers covered under a certification under
subchapter A of title II of
the Trade Act of 1974 (19 U.S.C. 2271 et seq.), except that the total amount of
payments under
this section for any fiscal year shall not exceed $25,000,000.
(2) Benefits and services ._The benefits and services described in this
paragraph are the
following:
(A) Employment services of the type described in section 235 of the Trade Act
of 1974 (19
U.S.C. 2295).
(B) Training described in section 236 of the Trade Act of 1974 (19 U.S.C. 2296),
except that
notwithstanding the provisions of section 236(a)(2)(A) of that Act, the total
amount of payments
for training under this section for any fiscal year shall not exceed $12,500,000.
(C) Tobacco worker readjustment allowances, which shall be provided in the
same manner as
trade readjustment allowances are provided under part I of subchapter B of
chapter 2 of title II of
the Trade Act of 1974 (19 U.S.C. 2291 et seq.), except that_
(i) the provisions of sections 231(a)(5)(C) and 231(c) of that Act (19 U.S.C.
2291(a)(5)(C),
2291(c)), authorizing the payment of trade readjustment allowances on a finding
that it is not
feasible or appropriate to approve a training program for a worker, shall not be
applicable to
payment of allowances under this section; and
(ii) notwithstanding the provisions of section 233(b) of that Act (19 U.S.C.
2293(b)), in order
for a worker to qualify for tobacco readjustment allowances under this section,
the worker shall
be enrolled in a training program approved by the Secretary of the type
described in section
236(a) of that Act (19 U.S.C. 2296(a)) by the later of_
(I) the last day of the 16th week of the worker's initial unemployment
compensation benefit
period; or
(II) the last day of the 6th week after the week in which the Secretary issues a
certification
covering the worker.
In cases of extenuating circumstances relating to enrollment of a worker in a
training program
under this section, the Secretary may extend the time for enrollment for a period
of not to exceed
30 days.
(D) Job search allowances of the type described in section 237 of the Trade Act
of 1974 (19
U.S.C. 2297).
(E) Relocation allowances of the type described in section 238 of the Trade Act
of 1974 (19
U.S.C. 2298).
(e) Ineligibility of Individuals Receiving Payments for Lost Tobacco Quota ._No
benefits or
services may be provided under this section to any individual who has received
payments for lost
tobacco quota under section 1021.
(f) Funding ._Of the amounts appropriated to carry out this title, the Secretary
may use not to
exceed $25,000,000 for each of fiscal years 1999 through 2008 to provide
assistance under this
section.
(g) Effective Date ._This section shall take effect on the date that is the later
of_
(1) October l, 1998; or
(2) the date of enactment of this Act.
(h) Termination Date ._No assistance, vouchers, allowances, or other
payments may be
provided under this section after the date that is the earlier of_
(1) the date that is 10 years after the effective date of this section under
subsection (g); or
(2) the date on which legislation establishing a program providing dislocated
workers with
comprehensive assistance substantially similar to the assistance provided by
this section
becomes effective.
SEC. 1032. FARMER OPPORTUNITY GRANTS.
Part A of title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.) is
amended by
adding at the end the following:
``Subpart 9_Farmer Opportunity Grants
``SEC. 420D. STATEMENT OF PURPOSE.
``It is the purpose of this subpart to assist in making available the benefits of
postsecondary
education to eligible students (determined in accordance with section 420F) in
institutions of
higher education by providing farmer opportunity grants to all eligible students.
``SEC. 420E. PROGRAM AUTHORITY; AMOUNT AND DETERMINATIONS;
APPLICATIONS.
``(a) Program Authority and Method of Distribution ._
``(1) Program authority ._From amounts made available under section
1011(d)(5) of the LEAF
Act, the Secretary, during the period beginning July 1, 1999, and ending
September 30, 2024,
shall pay to each eligible institution such sums as may be necessary to pay to
each eligible
student (determined in accordance with section 420F) for each academic year
during which that
student is in attendance at an institution of higher education, as an
undergraduate, a farmer
opportunity grant in the amount for which that student is eligible, as determined
pursuant to
subsection (b). Not less than 85 percent of the sums shall be advanced to eligible
institutions
prior to the start of each payment period and shall be based on an amount
requested by the
institution as needed to pay eligible students, except that this sentence shall not
be construed to
limit the authority of the Secretary to place an institution on a reimbursement
system of payment.
``(2) Construction ._Nothing in this section shall be construed to prohibit the
Secretary from
paying directly to students, in advance of the beginning of the academic term,
an amount for
which the students are eligible, in cases where the eligible institution elects not
to participate in
the disbursement system required by paragraph (1).
``(3) Designation ._Grants made under this subpart shall be known as `farmer
opportunity
grants'.
``(b) Amount of Grants ._
``(1) Amounts ._
``(A) In general ._The amount of the grant for a student eligible under this
subpart shall be_
``(i) $1,700 for each of the academic years 19992000 through 2003
2004;
``(ii) $2,000 for each of the academic years 20042005 through 2008
2009;
``(iii) $2,300 for each of the academic years 20092010 through 2013
2014;
``(iv) $2,600 for each of the academic years 20142015 through 2018
2019; and
``(v) $2,900 for each of the academic years 20192020 through 2023
2024.
``(B) Part-time rule ._In any case where a student attends an institution of
higher education on
less than a full-time basis (including a student who attends an institution of
higher education on
less than a half-time basis) during any academic year, the amount of the grant
for which that
student is eligible shall be reduced in proportion to the degree to which that
student is not so
attending on a full-time basis, in accordance with a schedule of reductions
established by the
Secretary for the purposes of this subparagraph, computed in accordance with
this subpart. The
schedule of reductions shall be established by regulation and published in the
Federal Register.
``(2) Maximum ._No grant under this subpart shall exceed the cost of
attendance (as described
in section 472) at the institution at which that student is in attendance. If, with
respect to any
student, it is determined that the amount of a grant exceeds the cost of
attendance for that year,
the amount of the grant shall be reduced to an amount equal to the cost of
attendance at the
institution.
``(3) Prohibition ._No grant shall be awarded under this subpart to any
individual who is
incarcerated in any Federal, State, or local penal institution.
``(c) Period of Eligibility for Grants ._
``(1) In general ._The period during which a student may receive grants shall
be the period
required for the completion of the first undergraduate baccalaureate course of
study being
pursued by that student at the institution at which the student is in attendance,
except that any
period during which the student is enrolled in a noncredit or remedial course of
study as
described in paragraph (2) shall not be counted for the purpose of this
paragraph.
``(2) Construction ._Nothing in this section shall be construed to_
``(A) exclude from eligibility courses of study that are noncredit or remedial in
nature and that
are determined by the institution to be necessary to help the student be prepared
for the pursuit of
a first undergraduate baccalaureate degree or certificate or, in the case of
courses in English
language instruction, to be necessary to enable the student to utilize already
existing knowledge,
training, or skills; and
``(B) exclude from eligibility programs of study abroad that are approved for
credit by the
home institution at which the student is enrolled.
``(3) Prohibition ._No student is entitled to receive farmer opportunity grant
payments
concurrently from more than 1 institution or from the Secretary and an
institution.
``(d) Applications for Grants ._
``(1) In general ._The Secretary shall from time to time set dates by which
students shall file
applications for grants under this subpart. The filing of applications under this
subpart shall be
coordinated with the filing of applications under section 401(c).
``(2) Information and assurances ._Each student desiring a grant for any year
shall file with
the Secretary an application for the grant containing such information and
assurances as the
Secretary may deem necessary to enable the Secretary to carry out the
Secretary's functions and
responsibilities under this subpart.
``(e) Distribution of Grants to Students ._Payments under this section shall be
made in
accordance with regulations promulgated by the Secretary for such purpose, in
such manner as
will best accomplish the purpose of this section. Any disbursement allowed to
be made by
crediting the student's account shall be limited to tuition and fees and, in the
case of
institutionally owned housing, room and board. The student may elect to have
the institution
provide other such goods and services by crediting the student's account.
``(f) Insufficient Funding ._If, for any fiscal year, the funds made available to
carry out this
subpart are insufficient to satisfy fully all grants for students determined to be
eligible under
section 420F, the amount of the grant provided under subsection (b) shall be
reduced on a pro
rata basis among all eligible students.
``(g) Treatment of Institutions and Students Under Other Laws ._Any institution
of higher
education that enters into an agreement with the Secretary to disburse to
students attending that
institution the amounts those students are eligible to receive under this subpart
shall not be
deemed, by virtue of the agreement, to be a contractor maintaining a system of
records to
accomplish a function of the Secretary. Recipients of farmer opportunity grants
shall not be
considered to be individual grantees for purposes of the Drug-Free Workplace
Act of 1988 (41
U.S.C. 701 et seq.).
``SEC. 420F. STUDENT ELIGIBILITY.
``(a) In General ._In order to receive any grant under this subpart, a student
shall_
``(1) be a member of a tobacco farm family in accordance with subsection (b);
``(2) be enrolled or accepted for enrollment in a degree, certificate, or other
program (including
a program of study abroad approved for credit by the eligible institution at which
the student is
enrolled) leading to a recognized educational credential at an institution of higher
education that
is an eligible institution in accordance with section 487, and not be enrolled in
an elementary or
secondary school;
``(3) if the student is presently enrolled at an institution of higher education, be
maintaining
satisfactory progress in the course of study the student is pursuing in
accordance with subsection
(c);
``(4) not owe a refund on grants previously received at any institution of higher
education
under this title, or be in default on any loan from a student loan fund at any
institution provided
for in part D, or a loan made, insured, or guaranteed by the Secretary under this
title for
attendance at any institution;
``(5) file with the institution of higher education that the student intends to
attend, or is
attending, a document, that need not be notarized, but that shall include_
``(A) a statement of educational purpose stating that the money attributable to
the grant will be
used solely for expenses related to attendance or continued attendance at the
institution; and
``(B) the student's social security number; and
``(6) be a citizen of the United States.
``(b) Tobacco Farm Families ._
``(1) In general ._For the purpose of subsection (a)(1), a student is a member
of a tobacco farm
family if during calendar year 1998 the student was_
``(A) an individual who_
``(i) is a participating tobacco producer (as defined in section 1002 of the LEAF
Act); or
``(ii) is otherwise actively engaged in the production of tobacco;
``(B) a spouse, son, daughter, stepson, or stepdaughter of an individual
described in
subparagraph (A);
``(C) an individual_
``(i) who was a brother, sister, stepbrother, stepsister, son-in-law, or
daughter-in-law of an
individual described in subparagraph (A); and
``(ii) whose principal place of residence was the home of the individual
described in
subparagraph (A); or
``(D) an individual who was a dependent (within the meaning of section 152 of
the Internal
Revenue Code of 1986) of an individual described in subparagraph (A).
``(2) Administration ._On request, the Secretary of Agriculture shall provide to
the Secretary
such information as is necessary to carry out this subsection.
``(c) Satisfactory Progress ._
``(1) In general ._For the purpose of subsection (a)(3), a student is maintaining
satisfactory
progress if_
``(A) the institution at which the student is in attendance reviews the progress
of the student at
the end of each academic year, or its equivalent, as determined by the institution;
and
``(B) the student has at least a cumulative C average or its equivalent, or
academic standing
consistent with the requirements for graduation, as determined by the institution,
at the end of
the second such academic year.
``(2) Special rule ._Whenever a student fails to meet the eligibility requirements
of subsection
(a)(3) as a result of the application of this subsection and subsequent to that
failure the student
has academic standing consistent with the requirements for graduation, as
determined by the
institution, for any grading period, the student may, subject to this subsection,
again be eligible
under subsection (a)(3) for a grant under this subpart.
``(3) Waiver ._Any institution of higher education at which the student is in
attendance may
waive paragraph (1) or (2) for undue hardship based on_
``(A) the death of a relative of the student;
``(B) the personal injury or illness of the student; or
``(C) special circumstances as determined by the institution.
``(d) Students Who Are Not Secondary School Graduates ._In order for a
student who does
not have a certificate of graduation from a school providing secondary education,
or the
recognized equivalent of the certificate, to be eligible for any assistance under
this subpart, the
student shall meet either 1 of the following standards:
``(1) Examination ._The student shall take an independently administered
examination and
shall achieve a score, specified by the Secretary, demonstrating that the student
can benefit from
the education or training being offered. The examination shall be approved by the
Secretary on
the basis of compliance with such standards for development, administration,
and scoring as the
Secretary may prescribe in regulations.
``(2) Determination ._The student shall be determined as having the ability to
benefit from the
education or training in accordance with such process as the State shall
prescribe. Any such
process described or approved by a State for the purposes of this section shall
be effective 6
months after the date of submission to the Secretary unless the Secretary
disapproves the
process. In determining whether to approve or disapprove the process, the
Secretary shall take
into account the effectiveness of the process in enabling students without
secondary school
diplomas or the recognized equivalent to benefit from the instruction offered by
institutions
utilizing the process, and shall also take into account the cultural diversity,
economic
circumstances, and educational preparation of the populations served by the
institutions.
``(e) Special Rule for Correspondence Courses ._A student shall not be eligible
to receive a
grant under this subpart for a correspondence course unless the course is part
of a program
leading to an associate, bachelor, or graduate degree.
``(f) Courses Offered Through Telecommunications ._
``(1) Relation to correspondence courses ._A student enrolled in a course of
instruction at an
eligible institution of higher education (other than an institute or school that
meets the definition
in section 521(4)(C) of the Carl D. Perkins Vocational and Applied Technology
Education Act
(20 U.S.C. 2471(4)(C))) that is offered in whole or in part through
telecommunications and leads
to a recognized associate, bachelor, or graduate degree conferred by the
institution shall not be
considered to be enrolled in correspondence courses unless the total amount of
telecommunications and correspondence courses at the institution equals or
exceeds 50 percent
of the courses.
``(2) Restriction or reductions of financial aid ._A student's eligibility to receive
a grant under
this subpart may be reduced if a financial aid officer determines under the
discretionary authority
provided in section 479A that telecommunications instruction results in a
substantially reduced
cost of attendance to the student.
``(3) Definition ._For the purposes of this subsection, the term
`telecommunications' means
the use of television, audio, or computer transmission, including open broadcast,
closed circuit,
cable, microwave, or satellite, audio conferencing, computer conferencing, or
video cassettes or
discs, except that the term does not include a course that is delivered using
video cassette or disc
recordings at the institution and that is not delivered in person to other students
of that
institution.
``(g) Study Abroad ._Nothing in this subpart shall be construed to limit or
otherwise prohibit
access to study abroad programs approved by the home institution at which a
student is enrolled.
An otherwise eligible student who is engaged in a program of study abroad
approved for
academic credit by the home institution at which the student is enrolled shall be
eligible to
receive a grant under this subpart, without regard to whether the study abroad
program is
required as part of the student's degree program.
``(h) Verification of Social Security Number ._The Secretary, in cooperation
with the
Commissioner of Social Security, shall verify any social security number
provided by a student
to an eligible institution under subsection (a)(5)(B) and shall enforce the
following conditions:
``(1) Pending verification ._Except as provided in paragraphs (2) and (3), an
institution shall
not deny, reduce, delay, or terminate a student's eligibility for assistance under
this subpart
because social security number verification is pending.
``(2) Denial or termination ._If there is a determination by the Secretary that the
social
security number provided to an eligible institution by a student is incorrect, the
institution shall
deny or terminate the student's eligibility for any grant under this subpart until
such time as the
student provides documented evidence of a social security number that is
determined by the
institution to be correct.
``(3) Construction ._Nothing in this subsection shall be construed to permit the
Secretary to
take any compliance, disallowance, penalty, or other regulatory action against_
``(A) any institution of higher education with respect to any error in a social
security number,
unless the error was a result of fraud on the part of the institution; or
``(B) any student with respect to any error in a social security number, unless
the error was a
result of fraud on the part of the student.''.
Subtitle D_Immunity
SEC. 1041. GENERAL IMMUNITY FOR TOBACCO PRODUCERS AND
TOBACCOWAREHOUSE OWNERS.
Notwithstanding any other provision of this title, a participating tobacco
producer, tobacco-related growers association, or tobacco warehouse owner or
employee may not be subject to
liability in any Federal or State court for any cause of action resulting from the
failure of any
tobacco product manufacturer, distributor, or retailer to comply with the National
Tobacco
Policy and Youth Smoking Reduction Act.
TITLE XI_MISCELLANEOUS PROVISIONS
Subtitle A_International Provisions
SEC. 1101. POLICY.
It shall be the policy of the United States government to pursue bilateral and
multilateral
agreements that include measures designed to_
(1) restrict or eliminate tobacco advertising and promotion aimed at children;
(2) require effective warning labels on packages and advertisements of tobacco
products;
(3) require disclosure of tobacco ingredient information to the public;
(4) limit access to tobacco products by young people;
(5) reduce smuggling of tobacco and tobacco products;
(6) ensure public protection from environmental tobacco smoke; and
(7) promote tobacco product policy and program information sharing between
or among the
parties to those agreements.
SEC. 1102. TOBACCO CONTROL NEGOTIATIONS.
The President, in consultation with the Secretary of State, the Secretary of
Health and Human
Services, and the United States Trade Representative, shall_
(1) act as the lead negotiator for the United States in the area of international
tobacco control;
(2) coordinate among U.S. foreign policy and trade negotiators in the area of
effective
international tobacco control policy;
(3) work closely with non-governmental groups, including public health groups;
and
(4) report annually to the Congress on the progress of negotiations to achieve
effective
international tobacco control policy.
SEC. 1103. REPORT TO CONGRESS.
Not later than 150 days after the enactment of this Act and annually thereafter,
the Secretary of
Health and Human Services shall transmit to the Congress a report identifying
the international
fora wherein international tobacco control efforts may be negotiated.
SEC. 1104. FUNDING.
There are authorized such sums as are necessary to carry out the provisions of
this subtitle.
SEC. 1105. PROHIBITION OF FUNDS TO FACILITATE THE EXPORTATION OR
PROMOTION OFTOBACCO.
(a) In General._ No officer, employee, department, or agency of the United
States may promote
the sale or export of tobacco or tobacco products, or seek the reduction or
removal by any
foreign country of restrictions on the marketing of tobacco or tobacco products,
unless such
restrictions are not applied equally to all tobacco and tobacco products. The
United States Trade
Representative shall consult with the Secretary regarding inquiries, negotiations,
and
representations with respect to tobacco and tobacco products, including whether
proposed
restrictions are reasonable protections of public health.
(b) Notification._ Whenever such inquiries, negotiations, or representations are
made, the
United States Trade Representative shall notify the Congress within 10 days
afterwards
regarding the nature of the inquiry, negotiation, or representation.
SEC. 1106. HEALTH LABELING OF TOBACCO PRODUCTS FOR EXPORT.
(a) In General._
(1) Exports must be labeled._ It shall be unlawful for any United States person,
directly or
through approval or facilitation of a transaction by a foreign person, to make use
of the United
States mail or of any instrument of interstate commerce to authorize or
contribute to the export
from the United States any tobacco product unless the tobacco product
packaging contains a
warning label that_
(A) complies with Federal requirements for labeling of similar tobacco products
manufactured,
imported, or packaged for sale or distribution in the United States; or
(B) complies with the specific health hazard warning labeling requirements of
the foreign
country to which the product is exported.
(2) U.S. requirements apply if the destination country does not require specific
health hazard
warning labels._ Subparagraph (B) of paragraph (1) does not apply to exports to
a foreign
country that does not have any specific health hazard warning label requirements
for the tobacco
product being exported.
(b) United States Person Defined._ For purposes of this section, the term
``United States
person'' means_
(1) an individual who is a citizen, national, or resident of the United States; and
(2) a corporation, partnership, association, joint-stock company, business trust,
unincorporated
organization, or sole proprietorship which has its principal place of business in
the United States.
(c) Report to Congress on Enforcement; Feasibility Regulations._
(1) The president._ The President shall_
(A) report to the Congress within 90 days after the date of enactment of this
Act_
(i) regarding methods to ensure compliance with subsection (a); and
(ii) listing countries whose health warnings related to tobacco products are
substantially similar
to those in the United States; and
(B) promulgate regulations within 1 year after the date of enactment of this Act
that will ensure
compliance with subsection (a).
(2) The secretary._ The Secretary shall determine through regulation the
feasibility and
practicability of requiring health warning labeling in the language of the country
of destination
weighing the health and other benefits and economic and other costs. To the
greatest extent
practicable, the Secretary should design a system that requires the language of
the country of
destination while minimizing the dislocative effects of such a system.
SEC. 1107. INTERNATIONAL TOBACCO CONTROL AWARENESS.
(a) Establishment of International Tobacco Control Awareness._ The Secretary
is authorized to
establish an international tobacco control awareness effort. The Secretary shall_
(1) promote efforts to share information and provide education internationally
about the health,
economic, social, and other costs of tobacco use, including scientific and
epidemiological data
related to tobacco and tobacco use and enhancing countries' capacity to collect,
analyze, and
disseminating such data;
(2) promote policies and support and coordinate international efforts, including
international
agreements or arrangements, that seek to enhance the awareness and
understanding of the costs
associated with tobacco use;
(3) support the development of appropriate governmental control activities in
foreign countries,
such as assisting countries to design, implement, and evaluate programs and
policies used in the
United States or other countries; including the training of United States
diplomatic and
commercial representatives outside the United States;
(4) undertake other activities as appropriate in foreign countries that help
achieve a reduction of
tobacco use;
(5) permit United States participation in annual meetings of government and
non-government
representatives concerning international tobacco use and efforts to reduce
tobacco use;
(6) promote mass media campaigns, including paid counter-tobacco
advertisements to reverse
the image appeal of pro-tobacco messages, especially those that glamorize and
``Westernize''
tobacco use to young people; and
(7) create capacity and global commitment to reduce international tobacco use
and prevent
youth smoking, including the use of models of previous public health efforts to
address global
health problems.
(b) Activities._
(1) In general._ The activities under subsection (a) shall include_
(A) public health and education programs;
(B) technical assistance;
(C) cooperative efforts and support for related activities of multilateral
organization and
international organizations;
(D) training; and
(E) such other activities that support the objectives of this section as may be
appropriate.
(2) Grants and contracts._ In carrying out this section, the Secretary shall make
grants to, enter
into and carry out agreements with, and enter into other transactions with any
individual,
corporation, or other entity, whether within or outside the United States,
including governmental
and nongovernmental organizations, international organizations, and multilateral
organizations.
(3) Transfer of funds to agencies._ The Secretary may transfer to any agency
of the United
States any part of any funds appropriated for the purpose of carrying out this
section. Funds
authorized to be appropriated by this section shall be available for obligation and
expenditure in
accordance with the provisions of this section or in accordance with the
authority governing the
activities of the agency to which such funds are transferred.
(c) Authorization of Appropriations._ There are authorized to be appropriated,
from the
National Tobacco Trust Fund, to carry out the provisions of this section,
including the
administrative costs incurred by any agency of the United States in carrying out
this section,
$350,000,000 for each of the fiscal years 1999 through 2004, and such sums as
may be necessary
for each fiscal year thereafter. A substantial amount of such funds shall be
granted to non-governmental organizations. Any amount appropriated pursuant
to this authorization shall
remain available without fiscal year limitation until expended.
Subtitle B_Anti-smuggling Provisions
SEC. 1131. DEFINITIONS.
(a) Incorporation of Certain Definitions._ In this subtitle, the terms ``cigar'',
``cigarette'',
``person'', ``pipe tobacco'', ``roll-your-own tobacco'', ``smokeless tobacco'',
``State'', ``tobacco
product'', and ``United States ``, shall have the meanings given such terms in
sections 5702(a),
5702(b), 7701(a)(1), 5702(o), 5702(n)(1), 5702(p), 3306(j)(1), 5702(c), and 3306(j)(2)
respectively of the Internal Revenue Code of 1986.
(b) Other Definitions._ In this subtitle:
(1) Affiliate._ The term ``affiliate'' means any one of 2 or more persons if 1 of
such persons has
actual or legal control, directly or indirectly, whether by stock ownership or
otherwise, of other
or others of such persons, and any 2 or more of such persons subject to
common control, actual
or legal, directly or indirectly, whether by stock ownership or otherwise.
(2) Interstate or Foreign Commerce._ The term ``interstate or foreign commerce''
means any
commerce between any State and any place outside thereof, or commerce within
any Territory or
the District of Columbia, or between points within the same State but through
any place outside
thereof.
(3) Secretary._ The term ``Secretary'' means the Secretary of the Treasury.
(4) Package._ The term ``package'' means the innermost sealed container
irrespective of the
material from which such container is made, in which a tobacco product is
placed by the
manufacturer and in which such tobacco product is offered for sale to a member
of the general
public.
(5) Retailer._ The term ``retailer'' means any dealer who sells, or offers for sale,
any tobacco
product at retail. The term ``retailer'' includes any duty free store that sells, offers
for sale, or
otherwise distributes at retail in any single transaction 30 or less packages, or
it equivalent for
other tobacco products.
(6) Exporter._ The term ``exporter'' means any person engaged in the business
of exporting
tobacco products from the United States for purposes of sale or distribution; and
the term
``licensed exporter'' means any such person licensed under the provisions of this
subtitle. Any
duty-free store that sells, offers for sale, or otherwise distributes to any person
in any single
transaction more than 30 packages of cigarettes, or its equivalent for other
tobacco products as
the Secretary shall by regulation prescribe, shall be deemed an ``exporter'' under
this subtitle.
(7) Importer._ The term ``importer'' means any person engaged in the business
of importing
tobacco products into the United States for purposes of sale or distribution; and
the term
``licensed importer'' means any such person licensed under the provisions of this
subtitle.
(8) Intentionally._ The term ``intentionally'' means doing an act, or omitting to
do an act,
deliberately, and not due to accident, inadvertence, or mistake. An intentional act
does not
require that a person knew that his act constituted an offense.
(9) Manufacturer._ The term ``manufacturer'' means any person engaged in the
business of
manufacturing a tobacco product for purposes of sale or distribution, except that
such term shall
not include a person who manufactures less than 30,000 cigarettes, or its
equivalent as
determined by regulations, in any twelve month period;; and the term ``licensed
manufacturer''
means any such person licensed under the provisions of this subtitle, except that
such term shall
not include a person who produces cigars, cigarettes, smokeless tobacco, or
pipe tobacco solely
for his own personal consumption or use.
(10) Wholesaler._ The term ``wholesaler'' means any person engaged in the
business of
purchasing tobacco products for resale at wholesale, or any person acting as an
agent or broker
for any person engaged in the business of purchasing tobacco products for
resale at wholesale,
and the term ``licensed wholesaler'' means any such person licensed under the
provisions of this
subtitle.
SEC. 1132. TOBACCO PRODUCT LABELING REQUIREMENTS.
(a) In General._ It is unlawful for any person to sell, or ship or deliver for sale
or shipment, or
otherwise introduce in interstate or foreign commerce, or to receive therein, or
to remove from
Customs custody for use, any tobacco product unless such product is packaged
and labeled in
conformity with this section.
(b) Labeling._
(1) Identification._ Not later than 1 year after the date of enactment of this Act,
the Secretary
shall promulgate regulations that require each manufacturer or importer of
tobacco products to
legibly print a unique serial number on all packages of tobacco products
manufactured or
imported for sale or distribution. The serial number shall be designed to enable
the Secretary to
identify the manufacturer or importer of the product, and the location and date
of manufacture or
importation. The Secretary shall determine the size and location of the serial
number.
(2) Marking requirements for exports._ Each package of a tobacco product that
is exported
shall be marked for export from the United States. The Secretary shall
promulgate regulations to
determine the size and location of the mark and under what circumstances a
waiver of this
paragraph shall be granted.
(c) Prohibition on Alteration._ It is unlawful for any person to alter, mutilate,
destroy,
obliterate, or remove any mark or label required under this subtitle upon a
tobacco product in or
affecting commerce, except pursuant to regulations of the Secretary authorizing
relabeling for
purposes of compliance with the requirements of this section or of State law.
SEC. 1133. TOBACCO PRODUCT LICENSES.
(a) In General._ Not later than 1 year after the date of enactment of this Act, the
Secretary shall
establish a program under which tobacco product licenses are issued to
manufacturers, importers,
exporters, and wholesalers of tobacco products.
(b)(1) Eligibility._ A person is entitled to a license unless the Secretary finds_
(A) that such person has been previously convicted of a Federal crime relating
to tobacco,
including the taxation thereof;
(B) that such person has, within 5 years prior to the date of application, been
previously
convicted of any felony under Federal or State law; or
(C) that such person is, by virtue of his business experience, financial standing,
or trade
connections, not likely to maintain such operations in conformity with Federal
law.
(2) Conditions._ The issuance of a license under this section shall be
conditioned upon the
compliance with the requirements of this subtitle, all Federal laws relating to the
taxation of
tobacco products, chapter 114 of title 18, United States Code, and any
regulations issued
pursuant to such statutes.
(c) Revocation, Suspension, and Annulment._ The program established under
subsection (a)
shall permit the Secretary to revoke, suspend, or annul a license issued under
this section if the
Secretary determines that the terms or conditions of the license have not been
complied with.
Prior to any action under this subsection, the Secretary shall provide the licensee
with due notice
and the opportunity for a hearing.
(d) Records and Audits._ The Secretary shall, under the program established
under subsection
(a), require all license holders to keep records concerning the chain of custody
of the tobacco
products that are the subject of the license and make such records available to
the Secretary for
inspection and audit.
(e) Retailers._ This section does not apply to retailers of tobacco products,
except that retailers
shall maintain records of receipt, and such records shall be available to the
Secretary for
inspection and audit. An ordinary commercial record or invoice will satisfy this
requirement
provided such record shows the date of receipt, from whom such products were
received and the
quantity of tobacco products received.
SEC. 1134. PROHIBITIONS.
(a) Importation and Sale._ It is unlawful, except pursuant to a license issued by
the Secretary
under this subtitle_
(1) to engage in the business of importing tobacco products into the United
States; or
(2) for any person so engaged to sell, offer, or deliver for sale, contract to sell,
or ship, in or
affecting commerce, directly or indirectly or through an affiliate, tobacco
products so imported.
(b) Manufacture and sale._ It is unlawful, except pursuant to a license issued
by the Secretary
under this subtitle_
(1) to engage in the business of manufacturing, packaging or warehousing
tobacco products; or
(2) for any person so engaged to sell, offer, or deliver for sale, contract to sell,
or ship, in or
affecting commerce, directly or indirectly or through an affiliate, tobacco
products so
manufactured, packaged, or warehoused.
(c) Wholesale._ It is unlawful, except pursuant to a license issued by the
Secretary under this
subtitle_
(1) to engage in the business of purchasing for resale at wholesale tobacco
products, or, as a
principal or agent, to sell, offer for sale, negotiate for, or hold out by solicitation,
advertisement,
or otherwise as selling, providing, or arranging for, the purchase for resale at
wholesale of
tobacco products; or
(2) for any person so engaged to receive or sell, offer or deliver for sale, contract
to sell, or ship,
in or affecting commerce, directly or indirectly or through an affiliate, tobacco
products so
purchased.
(d) Exportation._
(1) In general._ It is unlawful, except pursuant to a license issued by the
Secretary under this
subtitle_
(A) to engage in the business of exporting tobacco products from the United
States; or
(B) for any person so engaged to sell, offer, or deliver for sale, contract to sell,
or ship, in or
affecting commerce, directly or indirectly or through an affiliate, tobacco
products received for
export.
(2) Report._ Prior to exportation of tobacco products from the United States, the
exporter shall
submit a report in such manner and form as the Secretary may by regulation
prescribe to enable
the Secretary to identify the shipment and assure that it reaches its intended
destination.
(3) Agreements with foreign governments._ The Secretary is authorized to enter
into
agreements with foreign governments to exchange or share information
contained in reports
received from exporters of tobacco products if the Secretary believes that such
an agreement will
assist in_
(A) insuring compliance with any law or regulation enforced or administered by
an agency of
the United States; or
(B) preventing or detecting violation of the laws or regulations of a foreign
government with
which the Secretary has entered into an agreement.
Such information may be exchanged or shared with a foreign government only
if the Secretary
obtains assurances from such government that the information will be held in
confidence and
used only for the purpose of preventing or detecting violations of the laws or
regulations of such
government or the United States and, provided further that no information may
be exchanged or
shared with any government that has violated such assurances.
(e) Unlawful Acts._
(1) Unlicensed receipt or delivery._ It is unlawful for any licensed importer,
licensed
manufacturer, or licensed wholesaler intentionally to ship, transport, deliver or
receive any
tobacco products from or to any person other than a person licensed under this
chapter or a
retailer licensed under the provisions of this Act, except a licensed importer may
receive foreign
tobacco products from a foreign manufacturer or a foreign distributor that have
not previously
entered the United States.
(2) Receipt of re-imported goods._ It is unlawful for any person, except a
licensed manufacturer
or a licensed exporter to receive any tobacco products that have previously been
exported and
returned to the United States.
(3) Delivery by exporter._ It is unlawful for any licensed exporter intentionally
to ship,
transport, sell or deliver for sale any tobacco products to any person other than
a licensed
manufacturer or foreign purchaser.
(4) Shipment of export-only goods._ It is unlawful for any person other than a
licensed exporter
intentionally to ship, transport, receive or possess, for purposes of resale, any
tobacco product in
packages marked ``FOR EXPORT FROM THE UNITED STATES,'' other than for
direct return
to the manufacturer or exporter for re-packing or for re-exportation.
(5) False statements._ It is unlawful for any licensed manufacturer, licensed
exporter, licensed
importer, or licensed wholesaler to make intentionally any false entry in, to fail
willfully to make
appropriate entry in, or to fail willfully to maintain properly any record or report
that he is
required to keep as required by this chapter or the regulations promulgated
thereunder.
(h) Effective date._ The provisions of this section shall become effective on the
date that is 365
days after the date of enactment of this Act.
SEC. 1135. LABELING OF PRODUCTS SOLD BY NATIVE AMERICANS.
The Secretary, in consultation with the Secretary of the Interior, shall promulgate
regulations
that require that each package of a tobacco product that is sold on an Indian
reservation (as
defined in section 403(9) of the Indian Child Protection and Family Violence
Prevention Act (25
U.S.C. 3202(9)) be labeled as such. Such regulations shall include requirements
for the size and
location of the label.
SEC. 1136. LIMITATION ON ACTIVITIES INVOLVING TOBACCO PRODUCTS IN
FOREIGNTRADE ZONES.
(a) Manufacture of tobacco products in Foreign Trade Zones._ No person shall
manufacture a
tobacco product in any foreign trade zone, as defined for purposes of the Act of
June 18, 1934
(19 U.S.C. 81a et seq.).
(b) Exporting or importing from or into a Foreign Trade Zone._ Any person
exporting or
importing tobacco products from or into a foreign trade zone, as defined for
purposes of the Act
of June 18, 1934 (19 U.S.C. 81a et seq.), shall comply with the requirements
provided in this
subtitle. In any case where the person operating in a foreign trade zone is acting
on behalf of a
person licensed under this subtitle, qualification as an importer or exporter will
not be required,
if such person complies with the requirements set forth in section 1134(d)(2) and
(3) of this
subtitle.
SEC. 1137. JURISDICTION; PENALTIES; COMPROMISE OF LIABILITY.
(a) Jurisdiction._ The District Courts of the United States, and the United States
Court for any
Territory, of the District where the offense is committed or of which the offender
is an inhabitant
or has its principal place of business, are vested with jurisdiction of any suit
brought by the
Attorney General in the name of the United States, to prevent and restrain
violations of any of
the provisions of this subtitle.
(b) Penalties._ Any person violating any of the provisions of this subtitle shall,
upon
conviction, be fined as provided in section 3571 of title 18, United States Code,
imprisoned for
not more than 5 years, or both.
(c) Civil Penalties._ The Secretary may, in lieu of referring violations of this
subtitle for
criminal prosecution, impose a civil penalty of not more than $10,000 for each
offense.
(d) Compromise of Liability._ The Secretary is authorized, with respect to any
violation of this
subtitle, to compromise the liability arising with respect to a violation of this
subtitle_
(1) upon payment of a sum not in excess of $10,000 for each offense, to be
collected by the
Secretary and to be paid into the Treasury as miscellaneous receipts; and
(2) in the case of repetitious violations and in order to avoid multiplicity of
criminal
proceedings, upon agreement to a stipulation, that the United States may, on its
own motion
upon 5 days notice to the violator, cause a consent decree to be entered by any
court of
competent jurisdiction enjoining the repetition of such violation.
(e) Forfeiture._
(1) The Secretary may seize and forfeit any conveyance, tobacco products, or
monetary
instrument (as defined in section 5312 of title 31, United States Code) involved
in a violation of
this subtitle, or any property, real or personal, which constitutes or is derived
from proceeds
traceable to a violation of this chapter. For purposes of this paragraph, the
provisions of
subsections (a)(2), (b)(2), and (c) through (j) of section 981 of title 18, United
States Code, apply
to seizures and forfeitures under this paragraph insofar as they are applicable
and not
inconsistent with the provisions of this subtitle.
(2) The court, in imposing sentence upon a person convicted of an offense
under this subtitle,
shall order that the person forfeit to the United States any property described in
paragraph (1).
The seizure and forfeiture of such property shall be governed by subsections (b),
(c), and (e)
through (p) of section 853 of title 21, United States Code, insofar as they are
applicable and not
inconsistent with the provisions of this subtitle.
SEC. 1138. AMENDMENTS TO THE CONTRABAND CIGARETTE TRAFFICKING
ACT.
(a) Definitions._ Section 2341 of title 18, United States Code, is amended_
(1) by striking ``60,000'' and inserting ``30,000'' in paragraph (2); (2) by
inserting after
``payment of cigarette taxes,'' in paragraph (2) the following: ``or in the case of
a State that does
not require any such indication of tax payment, if the person in possession of the
cigarettes is
unable to provide any evidence that the cigarettes are moving legally in interstate
commerce,'';
(3) by striking ``and'' at the end of paragraph (4);
(4) by striking ``Treasury.'' in paragraph (5) and inserting ``Treasury;''; and
(5) by adding at the end thereof the following:
``(6) the term `tobacco product' means cigars, cigarettes, smokeless tobacco, roll
your own and
pipe tobacco (as such terms are defined in section 5701 of the Internal Revenue
Code of 1986);
and
``(7) the term `contraband tobacco product' means_
``(A) a quantity in excess of 30,000 of any tobacco product that is manufactured,
sold, shipped,
delivered, transferred, or possessed in violation of Federal laws relating to the
distribution of
tobacco products; and
``(B) a quantity of tobacco product that is equivalent to an excess of 30,000
cigarettes, as
determined by regulation, which bears no evidence of the payment of applicable
State tobacco
taxes in the State where such tobacco products are found, if such State requires
a stamp,
impression, or other indication to be placed on packages or other containers of
product to
evidence payment of tobacco taxes, or in the case of a State that does not
require any such
indication of tax payment, if the person in possession of the tobacco product is
unable to provide
any evidence that the tobacco products are moving legally in interstate
commerce and which are
in the possession of any person other than a person defined in paragraph (2) of
this section.''.
(b) Unlawful Acts._ Section 2342 of title 18, United States Code, is amended_
(1) by inserting ``or contraband tobacco products'' before the period in
subsection (a); and
(2) by adding at the end thereof the following:
``(c) It is unlawful for any person_
``(1) knowingly to make any false statement or representation with respect to the
information
required by this chapter to be kept in the records or reports of any person who
ships, sells, or
distributes any quantity of cigarettes in excess of 30,000 in a single transaction,
or tobacco
products in such equivalent quantities as shall be determined by regulation; or
``(2) knowingly to fail or knowingly to fail to maintain distribution records or
reports, alter or
obliterate required markings, or interfere with any inspection as required with
respect to such
quantity of cigarettes or other tobacco products.
``(d) It shall be unlawful for any person knowingly to transport cigarettes or other
tobacco
products under a false bill of lading or without any bill of lading.''.
(d) Recordkeeping._ Section 2343 of title 18, United States Code, is amended_
(1) by striking ``60,000'' in subsection (a) and inserting ``30,000'';
(2) by inserting after ``transaction'' in subsection (a) the following: ``or, in the
case of other
tobacco products an equivalent quantity as determined by regulation,'' ;
(3) by striking the last sentence of subsection (a) and inserting the following:
``Except as provided in subsection (c) of this section, nothing contained herein
shall authorize
the Secretary to require reporting under this section.'';
(4) by striking ``60,000'' in subsection (b) and inserting ``30,000'';
(5) by inserting after ``transaction'' in subsection (b) the following: ``or, in the
case of other
tobacco products an equivalent quantity as determined by regulation,''; and
(6) by adding at the end thereof the following:
``(c)(1) Any person who ships, sells, or distributes for resale tobacco products
in interstate
commerce, whereby such tobacco products are shipped into a State taxing the
sale or use of such
tobacco products or who advertises or offers tobacco products for such sale or
transfer and
shipment shall_
``(A) first file with the tobacco tax administrator of the State into which such
shipment is made
or in which such advertisement or offer is disseminated, a statement setting for
the persons name,
and trade name (if any), and the address of the persons principal place of
business and of any
other place of business; and
``(B) not later than the 10th day of each month, file with the tobacco tax
administrator of the
State into which such shipment is made a memorandum or a copy of the invoice
covering each
and every shipment of tobacco products made during the previous month into
such State; the
memorandum or invoice in each case to include the name and address of the
person to whom the
shipment was made, the brand, and the quantity thereof.
``(2) The fact that any person ships or delivers for shipment any tobacco
products shall, if such
shipment is into a State in which such person has filed a statement with the
tobacco tax
administrator under paragraph (1)(A) of this subsection, be presumptive evidence
that such
tobacco products were sold, shipped, or distributed for resale by such person.
``(3) For purposes of this subsection_
``(A) the term `use' includes consumption, storage, handling, or disposal of
tobacco products;
and
``(B) the term `tobacco tax administrator' means the State official authorized to
administer
tobacco tax laws of the State.''.
(e) Penalties._ Section 2344 of title 18, United States Code, is amended_
(1) by inserting ``or (c)'' in subsection (b) after ``section 2344(b)'';
(2) by inserting ``or contraband tobacco products'' after ``cigarettes'' in
subsection (c); and
(3) by adding at the end thereof the following:
``(d) Any proceeds from the unlawful distribution of tobacco shall be subject to
seizure and
forfeiture under section 981(a)(1)(C).''.
(f) Repeal of Federal Law Relating to Collection of State Cigarette Taxes._ The
Act of October
19, 1949, (63 Stat. 884; 15 U.S.C. 375-378) is hereby repealed.
SEC. 1139. FUNDING.
(a) License Fees._ The Secretary may, in the Secretary's sole discretion, set the
fees for licenses
required by this chapter, in such amounts as are necessary to recover the costs
of administering
the provisions of this chapter, including preventing trafficking in contraband
tobacco products.
(b) Disposition of Fees._ Fees collected by the Secretary under this chapter
shall be deposited
in an account with the Treasury of the United States that is specially designated
for paying the
costs associated with the administration or enforcement of this chapter or any
other Federal law
relating to the unlawful trafficking of tobacco products. The Secretary is
authorized and directed
to pay out of any funds available in such account any expenses incurred by the
Federal
Government in administering and enforcing this chapter or any other Federal law
relating to the
unlawful trafficking in tobacco products (including expenses incurred for the
salaries and
expenses of individuals employed to provide such services). None of the funds
deposited into
such account shall be available for any purpose other than making payments
authorized under
the preceding sentence.
SEC. 1140. RULES AND REGULATIONS.
The Secretary shall prescribe all needful rules and regulations for the
enforcement of this
chapter, including all rules and regulations that are necessary to ensure the
lawful distribution of
tobacco products in interstate or foreign commerce.
Subtitle C_Other Provisions
SEC. 1161. IMPROVING CHILD CARE AND EARLY CHILDHOOD DEVELOPMENT.
(a) In General._ There are authorized to be appropriated to the Secretary from
the National
Tobacco Trust Fund such sums as may be necessary for each fiscal year to be
used by the
Secretary for the following purposes:
(1) Improving the affordability of child care through increased appropriations for
child care
under the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9859
et seq.).
(2) Enhancing the quality of child care and early childhood development through
the provision
of grants to States under the Child Care and Development Block Grant Act of
1990 (42 U.S.C.
9859 et seq.).
(3) Expanding the availability and quality of school-age care through the
provision of grants to
States under the Child Care and Development Block Grant Act of 1990 (42 U.S.C.
9859 et seq.).
(4) Assisting young children by providing grants to local collaboratives under
the Child Care
and Development Block Grant Act of 1990 (42 U.S.C. 9859 et seq.) for the
purpose of improving
parent education and supportive services, strengthening the quality of child care,
improving
health services, and improving services for children with disabilities.
(b) Supplement not Supplant._ Amounts made available to a State under this
section shall be
used to supplement and not supplant other Federal, State, and local funds
provided for programs
that serve the health and developmental needs of children. Amounts provided to
the State under
any of the provisions of law referred to in this section shall not be reduced solely
as a result of
the availability of funds under this section.
SEC. 1162. BAN OF SALE OF TOBACCO PRODUCTS THROUGH THE USE OF
VENDINGMACHINES.
(a) Ban of Sale of Tobacco Products Through the Use of Vending Machines
._Effective 12
months after the date of enactment of this Act, it shall be unlawful to sell tobacco
products
through the use of a vending machine.
(b) Compensation for Banned Vending Machines ._
(1) In general ._The owners and operators of tobacco vending machines shall
be reimbursed,
subject to the availability of appropriations under subsection (d), for the fair
market value of
their tobacco vending machines.
(2) Tobacco vending reimburment corporation ._
(A) Corporation ._Reimbursment shall be directed through a private, nonprofit
corporation
established in the District of Columbia, known as the Tobacco Vending
Reimburment
Corporation (in this section referred to as the ``Corporation''). Except as
otherwise provided in
this section, the Corporation is subject to, and has all the powers conferred upon
a nonprofit
corporation by the District of Columbia Nonprofit Corporation Act (D.C. Code
section 29-501 et
seq.).
(B) Duties ._The Corporation shall_
(i) disburse compensation funds to vending companies under this section;
(ii) verify operational machines; and
(iii) maintain complete records of machine verification and accountings of
disbursements and
administration of the compensation fund established under paragraph (4).
(3) Management of corporation ._
(A) Board of directors ._The Corporation shall be managed by a Board of
Directors that_
(i) consists of distinguished Americans with experience in finance, public policy,
or fund
management;
(ii) includes at least 1 member of the United States tobacco vending machine
industry;
(iii) shall be paid an annual salary in an amount determined by the President of
the Corporation
not to exceed $40,000 individually, out of amounts transferred to the Corporation
under
paragraph (4)(A);
(iv) shall appoint a President to manage the day-to-day activities of the
Corporation;
(v) shall develop guidelines by which the President shall direct the Corporation;
(vi) shall retain a national accounting firm to verify the distribution of funds and
audit the
compensation fund established under paragraph (4);
(vii) shall retain such legal, management, or consulting assistance as is
necessary and
reasonable; and
(viii) shall periodically report to Congress regarding the activities of the
Corporation.
(B) Duties of the president of the corporation ._The President of the Corporation
shall_
(i) hire appropriate staff;
(ii) prepare the report of the Board of Directors of the Corporation required
under subparagraph
(A)(viii); and
(iii) oversee Corporation functions, including verification of machines,
administration and
disbursement of funds, maintenance of complete records, operation of appeals
procedures, and
other directed functions.
(4) Compensation Fund ._
(A) Rules for disbursement of funds ._
(i) Payments to owners and operators ._The Corporation shall disburse funds
to compensate the
owners and operators of tobacco vending machines in accordance with the
following:
(I) The fair market value of each tobacco vending machine verified by the
Corporation President
in accordance with subparagraph (C), and proven to have been in operation
before August 10,
1995, shall be disbursed to the owner of the machine seeking compensation.
(II) No compensation shall be made for a spiral glass front vending machine.
(ii) Other payments ._Funds appropriated to the Corporation under subsection
(d) may be used
to pay the administrative costs of the Corporation that are necessary and proper
or required by
law. The total amount paid by the Corporation for administrative and overhead
costs, including
accounting fees, legal fees, consultant fees, and associated administrative costs
shall not exceed
1 percent of the total amount appropriated to the Corporation under subsection
(d).
(B) Verification of vending machines ._Verification of vending machines shall
be based on
copies of official State vending licenses, company computerized or handwritten
sales records, or
physical inspection by the Corporation President or by an inspection agent
designated by the
President. The Corporation President and the Board of Directors of the
Corporation shall work
vigorously to prevent and prosecute any fraudulent claims submitted for
compensation.
(C) Return of account funds not distributed to vendors ._The Corporation shall
be dissolved on
the date that is 4 years after the date of enactment of this Act. Any funds not
dispersed or
allocated to claims pending as of that date shall be transferred to a public
anti-smoking trust, or
used for such other purposes as Congress may designate.
(c) Settlement of Legal Claims Pending Against the United States ._Acceptance
of a
compensation payment from the Corporation by a vending machine owner or
operator shall settle
all pending and future claims of the owner or operator against the United States
that are based
on, or related to, the ban of the use of tobacco vending machines imposed under
this section and
any other laws or regulations that limit the use of tobacco vending machines.
(d) Authorization of Appropriations._ There are authorized to be appropriated
to the
Corporation from funds not otherwise obligated in the Treasury or out of the
National Tobacco
Trust Fund, such sums as may be necessary to carry out this section.
SEC. 1163. AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974.
(a) In General ._Subpart B of part 7 of subtitle B of title I of the Employee
Retirement Income
Security Act of 1974 (29 U.S.C. 1185 et seq.) is amended by adding at the end the
following new
section:
``SEC. 713. REQUIRED COVERAGE FOR MINIMUM HOSPITAL STAY FOR
MASTECTOMIES ANDLYMPH NODE DISSECTIONS FOR THE TREATMENT OF
BREAST CANCER AND COVERAGE FOR RECONSTRUCTIVE SURGERY
FOLLOWING
MASTECTOMIES.
``(a) Inpatient Care ._
``(1) In general ._A group health plan, and a health insurance issuer providing
health insurance
coverage in connection with a group health plan, that provides medical and
surgical benefits
shall ensure that inpatient coverage with respect to the surgical treatment of
breast cancer
(including a mastectomy, lumpectomy, or lymph node dissection for the
treatment of breast
cancer) is provided for a period of time as is determined by the attending
physician, in his or her
professional judgment consistent with scientific evidence-based practice, in
consultation with the
patient, and subject to subsection (d), to be medically appropriate.
``(2) Exception ._Nothing in this section shall be construed as requiring the
provision of
inpatient coverage if the attending physician in consultation with the patient
determine that a
shorter period of hospital stay is medically appropriate.
``(b) Reconstructive Surgery._ A group health plan, and a health insurance
issuer providing
health insurance coverage in connection with a group health plan, that provides
medical and
surgical benefits with respect to a mastectomy shall ensure that, in a case in
which a mastectomy
patient elects breast reconstruction, coverage is provided for_
``(1) all stages of reconstruction of the breast on which the mastectomy has
been performed;
``(2) surgery and reconstruction of the other breast to produce a symmetrical
appearance; and
``(3) the costs of prostheses and complications of mastectomy including
lymphedemas;
in the manner determined by the attending physician and the patient to be
appropriate. Such
coverage may be subject to annual deductibles and coinsurance provisions as
may be deemed
appropriate and as are consistent with those established for other benefits under
the plan or
coverage. Written notice of the availability of such coverage shall be delivered
to the participant
upon enrollment and annually thereafter.
``(c) Notice ._A group health plan, and a health insurance issuer providing
health insurance
coverage in connection with a group health plan shall provide notice to each
participant and
beneficiary under such plan regarding the coverage required by this section in
accordance with
regulations promulgated by the Secretary. Such notice shall be in writing and
prominently
positioned in any literature or correspondence made available or distributed by
the plan or issuer
and shall be transmitted_
``(1) in the next mailing made by the plan or issuer to the participant or
beneficiary;
``(2) as part of any yearly informational packet sent to the participant or
beneficiary; or
``(3) not later than January 1, 1998;
whichever is earlier.
``(d) No Authorization Required ._
``(1) In general ._An attending physician shall not be required to obtain
authorization from the
plan or issuer for prescribing any length of stay in connection with a
mastectomy, a lumpectomy,
or a lymph node dissection for the treatment of breast cancer.
``(2) Prenotification ._Nothing in this section shall be construed as preventing
a group health
plan from requiring prenotification of an inpatient stay referred to in this section
if such
requirement is consistent with terms and conditions applicable to other inpatient
benefits under
the plan, except that the provision of such inpatient stay benefits shall not be
contingent upon
such notification.
``(e) Prohibitions ._A group health plan, and a health insurance issuer offering
group health
insurance coverage in connection with a group health plan, may not_
``(1) deny to a patient eligibility, or continued eligibility, to enroll or to renew
coverage under
the terms of the plan, solely for the purpose of avoiding the requirements of this
section;
``(2) provide monetary payments or rebates to individuals to encourage such
individuals to
accept less than the minimum protections available under this section;
``(3) penalize or otherwise reduce or limit the reimbursement of an attending
provider because
such provider provided care to an individual participant or beneficiary in
accordance with this
section;
``(4) provide incentives (monetary or otherwise) to an attending provider to
induce such
provider to provide care to an individual participant or beneficiary in a manner
inconsistent with
this section; and
``(5) subject to subsection (f)(3), restrict benefits for any portion of a period
within a hospital
length of stay required under subsection (a) in a manner which is less favorable
than the benefits
provided for any preceding portion of such stay.
``(f) Rules of Construction ._
``(1) In general ._Nothing in this section shall be construed to require a patient
who is a
participant or beneficiary_
``(A) to undergo a mastectomy or lymph node dissection in a hospital; or
``(B) to stay in the hospital for a fixed period of time following a mastectomy or
lymph node
dissection.
``(2) Limitation ._This section shall not apply with respect to any group health
plan, or any
group health insurance coverage offered by a health insurance issuer, which
does not provide
benefits for hospital lengths of stay in connection with a mastectomy or lymph
node dissection
for the treatment of breast cancer.
``(3) Cost sharing ._Nothing in this section shall be construed as preventing a
group health plan
or issuer from imposing deductibles, coinsurance, or other cost-sharing in
relation to benefits for
hospital lengths of stay in connection with a mastectomy or lymph node
dissection for the
treatment of breast cancer under the plan (or under health insurance coverage
offered in
connection with a group health plan), except that such coinsurance or other
cost-sharing for any
portion of a period within a hospital length of stay required under subsection (a)
may not be
greater than such coinsurance or cost-sharing for any preceding portion of such
stay.
``(4) Level and type of reimbursements ._Nothing in this section shall be
construed to prevent a
group health plan or a health insurance issuer offering group health insurance
coverage from
negotiating the level and type of reimbursement with a provider for care provided
in accordance
with this section.
``(g) Preemption, Relation to State Laws ._
``(1) In general ._Nothing in this section shall be construed to preempt any State
law in effect
on the date of enactment of this section with respect to health insurance
coverage that_
``(A) requires coverage for a minimum hospital length of stay following a
surgical treatment for
breast cancer;
``(B) requires coverage of at least the coverage of reconstructive breast surgery
otherwise
required under this section; or
``(C) requires coverage for breast cancer treatments (including breast
reconstruction) in
accordance with scientific evidence-based practices or guidelines recommended
by established
medical associations.
``(2) Application of section ._With respect to a State law_
``(A) described in paragraph (1)(A), the provisions of this section relating to
breast
reconstruction shall apply in such State; and
``(B) described in paragraph (1)(B), the provisions of this section relating to
length of stays for
surgical breast treatment shall apply in such State.
``(3) Erisa ._Nothing in this section shall be construed to affect or modify the
provisions of
section 514 with respect to group health plans.''.
(b) Clerical Amendment ._The table of contents in section 1 of the Employee
Retirement
Income Security Act of 1974 (29 U.S.C. 1001 note) is amended by inserting after
the item
relating to section 712 the following new item:
``Sec. 713. Required coverage for minimum hospital stay for mastectomies
andlymph node
dissections for the treatment of breast cancer and coverage for reconstructive
surgery following
mastectomies.''.
(c) Effective Dates ._
(1) In general ._The amendments made by this section shall apply with respect
to plan years
beginning on or after the date of enactment of this Act.
(2) Special rule for collective bargaining agreements ._In the case of a group
health plan
maintained pursuant to 1 or more collective bargaining agreements between
employee
representatives and 1 or more employers, any plan amendment made pursuant
to a collective
bargaining agreement relating to the plan which amends the plan solely to
conform to any
requirement added by this section shall not be treated as a termination of such
collective
bargaining agreement.
TITLE XII_ASBESTOS-RELATED TOBACCO CLAIMS
SEC. 1201. NATIONAL TOBACCO TRUST FUNDS AVAILABLE UNDER FUTURE
LEGISLATION.
If the Congress enacts qualifying legislation after the date of enactment of this
Act to provide
for the payment of asbestos claims, then amounts in the National Tobacco Trust
Fund established
by title IV of this Act set aside for public health expenditures shall be available,
as provided by
appropriation Acts, to make those payments. For purposes of this section, the
term ``qualifying
legislation'' means a public law that amends this Act and changes the
suballocations of funds set
aside for public health expenditures under title IV of this Act to provide for the
payment of those
claims.
TITLE XIII_VETERANS' BENEFITS
SEC. 1301. RECOVERY BY SECRETARY OF VETERANS AFFAIRS.
Title 38, United States Code, is amended by adding after part VI the following:
``PART VII_RECOVERY OF COSTS FOR TOBACCO-RELATED DISABILITY OR
DEATH
``Chapter 91_Tort liability for disability, injury, disease, or death due to tobacco
use
``Sec.
``9101. Recovery by Secretary of Veterans Affairs
``9102. Regulations
``9103. Limitation or repeal of other provisions for recovery of compensation
``9104. Exemption from annual limitation on damages
`` 9101. Recovery by Secretary of Veterans Affairs
``(a) Conditions; exceptions; persons liable; amount of recovery; subrogation._
In any case in
which the Secretary is authorized or required by law to provide compensation
and medical care
services under this title for disability or death from injury or disease attributable
in whole or in
part to the use of tobacco products by a veteran during the veterans active
military, naval, or air
service under circumstances creating a tort liability upon a tobacco product
manufacturer (other
than or in addition to the United States) to pay damages therefor, the Secretary
shall have a right
to recover (independent of the rights of the injured or diseased veteran) from
said tobacco
product manufacturer the cost of the compensation paid or to be paid and the
costs of medical
care services provided, and shall, as to this right, be subrogated to any right or
claim that the
injured or diseased veteran, his or her guardian, personal representative, estate,
dependents, or
survivors has against such third person to the extent of the cost of the
compensation paid or to be
paid and the costs of medical services provided.
``(b) Enforcement procedure; intervention; joinder of parties; State or Federal
court
proceedings._ The Secretary may, to enforce such right under subsection (a) of
this section_
``(1) intervene or join in any action or proceeding brought by the injured or
diseased veteran, his
or her guardian, personal representative, estate, dependents, or survivors,
against the tobacco
product manufacturer who is liable for the injury or disease; or
``(2) if such action or proceeding is not commenced within 6 months after the
first day on which
compensation is paid, or the medical care services are provided, by the Secretary
in connection
with the injury or disease involved, institute and prosecute legal proceedings
against the tobacco
product manufacturer who is liable for the injury or disease, in a State or Federal
court, either
alone (in its own name or in the name of the injured veteran, his or her guardian,
personal
representative, estate, dependents, or survivors) or in conjunction with the
injured or diseased
veteran, his or her guardian, personal representative, estate, dependents, or
survivors.
``(c) Credits to appropriations._ Any amount recovered or collected under this
section for
compensation paid, and medical care services provided, by the Secretary shall
be credited to a
revolving fund established in the Treasury of the United States known as the
Department of
Veterans Affairs Tobacco Recovery Fund (hereafter called the Fund). The Fund
shall be
available to the Secretary without fiscal year limitation for purposes of veterans
programs,
including administrative costs. The Secretary may transfer such funds as deemed
necessary to
the various Department of Veterans Affairs appropriations, which shall remain
available until
expended.
`` 9102. Regulations
``(a) Determination and establishment of present value of compensation and
medical care
services to be paid._ The Secretary may prescribe regulations to carry out this
chapter, including
regulations with respect to the determination and establishment of the present
value of
compensation to be paid to an injured or diseased veteran or his or her surviving
spouse, child, or
parent, and medical care services provided to a veteran.
``(b) Settlement, release and waiver of claims._ To the extent prescribed by
regulations under
subsection (a) of this section, the Secretary may_
``(1) compromise, or settle and execute a release of, any claim which the
Secretary has by virtue
of the right established by section 9101 of this title; or
``(2) waive any such claim, in whole or in part, for the convenience of the
Government, or if he
or she determines that collection would result in undue hardship upon the
veteran who suffered
the injury or disease or his or her surviving spouse, child or parent resulting in
payment of
compensation, or receipt of medical care services.
``(c) Damages recoverable for personal injury unaffected._ No action taken by
the Secretary in
connection with the rights afforded under this chapter shall operate to deny to
the injured veteran
or his or her surviving spouse, child or parent the recovery for that portion of his
or her damage
not covered hereunder.
`` 9103. Limitation or repeal of other provisions for recovery ofcompensation
and medical care
services
``This chapter does not limit or repeal any other provision of law providing for
recovery by the
Secretary of the cost of compensation and medical care services described in
section 9101 of this
title.
`` 9104. Exemption from annual limitation on damages
``Any amount recovered under section 9101 of this title for compensation paid
or to be paid, and
the cost of medical care services provided, by the Secretary for disability or
death from injury or
disease attributable in whole or in part to the use of tobacco products by a
veteran during the
veterans active military, naval, or air service shall not be subject to the limitation
on the annual
amount of damages for which the tobacco product manufacturers may be found
liable as
provided in the National Tobacco Policy and Youth Smoking Reduction Act and
shall not be
counted in computing the annual amount of damages for purposes of that
section.''.
TITLE XIV_EXCHANGE OF BENEFITS FOR AGREEMENT
TO TAKE ADDITIONAL MEASURES TO REDUCE YOUTH SMOKING
SEC. 1401. CONFERRAL OF BENEFITS ON PARTICIPATING TOBACCO
PRODUCTMANUFACTURERS IN RETURN FOR THEIR ASSUMPTION OF SPECIFIC
OBLIGATIONS.
Participating tobacco product manufacturers shall receive the benefits, and
assume the
obligations, set forth in this title.
SEC. 1402. PARTICIPATING TOBACCO PRODUCT MANUFACTURER.
(a) In General._ Except as provided in subsection (b), a tobacco product
manufacturer that_
(1) executes a protocol with the Secretary of Health and Human Services that
meets the
requirements of sections 1403, 1404, and 1405; and
(2) makes the payment required under section 402(a)(1),
is, for purposes of this title, a participating tobacco products manufacturer.
(b) Disqualification._
(1) Ineligibility._ Notwithstanding subsection (a), a tobacco product
manufacturer may not
become a participating tobacco products manufacturer if_
(A) the tobacco product manufacturer or any of its principal officers (acting in
that official's
corporate capacity), is convicted of_
(i) manufacturing or distributing misbranded tobacco products in violation of the
criminal
prohibitions on such misbranding established under section 301 or 303 of the
Federal Food,
Drug, and Cosmetic Act (21 U.S.C. 331 or 333);
(ii) violating reporting requirements established under section 5762(a)(4) of the
Internal
Revenue Code of 1986 (26 U.S.C. 5762(a)(4));
(iii) violating, or aiding and abetting the violation of chapter 114 of title 18,
United States Code;
or
(iv) violating Federal prohibitions on mail fraud, wire fraud, or the making of
false statements to
Federal officials in the course of making reports or disclosures required by this
Act; or
(B) the tobacco product manufacturer, at the end of the 1-year period beginning
on the date on
which such manufacturer fails to make a required assessment payment under
title IV of this Act,
has not fully made such payment.
(2) Disqualification._ A tobacco product manufacturer that has become a
participating tobacco
product manufacturer shall cease to be treated as a participating tobacco
product manufacturer
if_
(A) it, or any of its principal officers (acting in that official's corporate capacity)
is convicted of
an offense described in paragraph (1)(A); or
(B) it fails to make such a payment within the time period described in
paragraph (1)(B).
(c) Non-participating Tobacco Manufacturers._ Any tobacco product
manufacturer that_
(1) does not execute a protocol in accordance with subsection (a);
(2) fails to make the payment required by section 402(a)(1) (if applicable to that
manufacturer);
(3) is not eligible, under subsection (b)(1), to become a participating tobacco
product
manufacturer; or
(4) ceases to be treated as a participating tobacco product manufacturer under
subsection (b)(2),
is, for purposes of this title, a non-participating tobacco product manufacturer.
SEC. 1403. GENERAL PROVISIONS OF PROTOCOL.
(a) In General._ For purposes of section 1402, a protocol meets the
requirements of this section
if it_
(1) contains the provisions described in subsection (b); and
(2) is enforceable at law.
(b) Required Provisions._ The protocol shall include the following provisions:
(1) The tobacco product manufacturer executing the protocol will not engage in
any conduct
that was, either on the date of enactment of this Act, or at any time after the date
of enactment of
this Act_
(A) prohibited by this Act;
(B) prohibited by any regulation promulgated by the Food and Drug
Administration that applies
to tobacco products; or
(C) prohibited by any other statute.
(2) The tobacco product manufacturer executing the protocol will contract with
only such
distributors and retailers who have operated in compliance with the applicable
provisions of
Federal, State, or local law regarding the marketing and sale of tobacco products
and who agree
to comply with advertising and marketing provisions in paragraph (3).
(3) The tobacco product manufacturer executing the protocol will be bound in
marketing
tobacco products by the following provisions, whether or not these provisions
have legal force
and effect against manufacturers who are not signatories to the protocol_
(A) the advertising and marketing provisions of part 897 of title 21, Code of
Federal
Regulations, that were published in the Federal Register on August 28, 1996, and
which shall be
adopted and incorporated as independent terms of the protocol;
(B) the requirements of section 1404; and
(C) the requirements of section 1405.
(4) The tobacco product manufacturer executing the protocol will make any
payments to the
National Tobacco Trust Fund in title IV that are required to be made under that
title or in any
other title of this Act.
(5) The tobacco product manufacturer executing the protocol will be bound by
the provisions of
title IV, and any other title of this Act with respect to payments required under
title IV, without
regard to whether those provisions have legal force and effect against
manufacturers who have
not become signatories.
(6) The tobacco product manufacturer executing the protocol will make the
industry-wide and
manufacturer-specific look-back assessment payments that may be required
under title II.
(7) The tobacco product manufacturer executing the protocol will be bound by
the provisions of
title II that require a manufacturer to make look-back assessments, and any other
title of this Act
with respect to such assessments, without regard to whether such terms have
legal force and
effect against manufacturers who have not become signatories.
(8) The tobacco product manufacturer executing the protocol will, within 180
days after the date
of enactment of this Act and in conjunction with other participating tobacco
product
manufacturers, establish a National Tobacco Document Depository in the
Washington, D.C.
area_
(A) that is not affiliated with, or controlled by, any tobacco product
manufacturer;
(B) the establishment and operational costs of which are allocated among
participating tobacco
product manufacturers; and
(C) that will make any document submitted to it under title IX of this Act and
finally determined
not to be subject to attorney-client privilege, attorney work product, or trade
secret exclusions,
available to the public using the Internet or other means within 30 days after
receiving the
document.
(c) Provisions Applicable to Documents._ The provisions of section 2116(a) and
(b) of title 44,
United States Code, apply to records and documents submitted to the Depository
(or, to the
alternative depository, if any, established by the Secretary by regulation under
title IX of this
Act) in the same manner and to the same extent as if they were records
submitted to the National
Archives of the United States required by statute to be retained indefinitely.
SEC. 1404. TOBACCO PRODUCT LABELING AND ADVERTISING REQUIREMENTS
OF
PROTOCOL.
(a) In General._ For purposes of section 1402, a protocol meets the
requirements of this section
if it requires that_
(1) no tobacco product will be sold or distributed in the United States unless its
advertising and
labeling (including the package)_
(A) contain no human image, animal image, or cartoon character;
(B) are not outdoor advertising, including advertising in enclosed stadia and on
mass transit
vehicles, and advertising from within a retail establishment that is directed
toward or visible
from the outside of the establishment;
(C) at the time the advertising or labeling is first used are submitted to the
Secretary so that the
Secretary may conduct regular review of the advertising and labeling;
(D) comply with any applicable requirement of the Federal Food, Drug, and
Cosmetic Act, the
Federal Cigarette Labeling and Advertising Act, and any regulation promulgated
under either of
those Acts;
(E) do not appear on the international computer network of both Federal and
non-Federal
interoperable packet switches data networks (the ``Internet''), unless such
advertising is designed
to be inaccessible in or from the United States to all individuals under the age
of 18 years;
(F) use only black text on white background, other than_
(i) those locations other than retail stores where no person under the age of 18
is permitted or
present at any time, if the advertising is not visible from outside the
establishment and is affixed
to a wall or fixture in the establishment; and
(ii) advertisements appearing in any publication which the tobacco product
manufacturer,
distributor, or retailer demonstrates to the Secretary is a newspaper, magazine,
periodical, or
other publication whose readers under the age of 18 years constitute 15 percent
or less of the
total readership as measured by competent and reliable survey evidence, and
that is read by less
than 2 million persons under the age of 18 years as measured by competent and
reliable survey
evidence;
(G) for video formats, use only static black text on a white background, and any
accompanying
audio uses only words without music or sound effects;
(8) for audio formats, use only words without music or sound effects;
(2) if a logo, symbol, motto, selling message, recognizable color or pattern of
colors, or any
other indicia of brand-name product identification of the tobacco product is
contained in a
movie, program, or video game for which a direct or indirect payment has been
made to ensure
its placement;
(3) if a direct or indirect payment has been made by any tobacco product
manufacturer,
distributor, or retailer to any entity for the purpose of promoting use of the
tobacco product
through print or film media that appeals to individuals under the age of 18 years
or through a live
performance by an entertainment artist that appeals to such individuals;
(4) if a logo, symbol, motto, selling message, recognizable color or pattern of
colors, or any
other indicia or product identification identical to, similar to, or identifiable with
the tobacco
product is used for any item (other than a tobacco product) or service marketed,
licensed,
distributed or sold or caused to be marketed, licensed, distributed, or sold by the
tobacco product
manufacturer or distributor of the tobacco product; and
(5)(A) except as provided in subparagraph (B), if advertising or labeling for such
product that is
otherwise in accordance with the requirements of this section bears a tobacco
product brand
name (alone or in conjunction with any other word) or any other indicia of
tobacco product
identification and is disseminated in a medium other than newspapers,
magazines, periodicals or
other publications (whether periodic or limited distribution), nonpoint-of-sale
promotional
material (including direct mail), point-of-sale promotional material, or audio or
video formats
delivered at a point-of-sale; but
(B) notwithstanding subparagraph (A), advertising or labeling for cigarettes or
smokeless
tobacco may be disseminated in a medium that is not specified in paragraph (1)
if the tobacco
product manufacturer, distributor, or retailer notifies the Secretary not later than
30 days prior to
the use of such medium, and the notice describes the medium and the extent to
which the
advertising or labeling may be seen by persons under the age of 18 years.
(b) Color Print Ads on Magazines._ The protocol shall also provide that no
tobacco product
may be sold or distributed in the United States if any advertising for that product
on the outside
back cover of a magazine appears in any color or combination of colors.
SEC. 1405. POINT-OF-SALE REQUIREMENTS.
(a) In General._ For purposes of section 1402, a protocol meets the
requirements of this section
if it provides that, except as provided in subsection (b), point-of-sale advertising
of any tobacco
product in any retail establishment is prohibited.
(b) Permitted POS Locations._
(1) Placement._ One point-of-sale advertisement may be placed in or at each
retail
establishment for its brand or the contracted house retailer or private label brand
of its
wholesaler.
(2) Size._ The display area of any such point-of-sale advertisement (either
individually or in the
aggregate) shall not be larger than 576 square inches and shall consist of black
letters on white
background or another recognized typography.
(3) Proximity to candy._ Any such point-of-sale advertisement shall not be
attached to or
located within 2 feet of any display fixture on which candy is displayed for sale.
(c) Audio or Video._ Any audio or video format permitted under regulations
promulgated by
the Secretary may be played or shown in, but not distributed, at any location
where tobacco
products are offered for sale.
(d) No Restrictive Covenants._ No tobacco product manufacturer or distributor
of tobacco
products may enter into any arrangement with a retailer that limits the retailer's
ability to display
any form of advertising or promotional material originating with another supplier
and permitted
by law to be displayed in a retail establishment.
(e) Definitions._ As used in this section, the terms ``point-of-sale advertisement''
and ``point-of-sale advertising'' mean all printed or graphical materials (other than
a pack, box, carton, or
container of any kind in which cigarettes or smokeless tobacco is offered for
sale, sold, or
otherwise distributed to consumers) bearing the brand name (alone or in
conjunction with any
other word), logo, symbol, motto, selling message, or any other indicia of
product identification
identical or similar to, or identifiable with, those used for any brand of cigarettes
or smokeless
tobacco, which, when used for its intended purpose, can reasonably be
anticipated to be seen by
customers at a location where tobacco products are offered for sale.
SEC. 1406. APPLICATION OF TITLE.
(a) In General._ The provisions of this title apply to any civil action involving a
tobacco claim
brought pursuant to title VII of this Act, including any such claim that has not
reached final
judgment or final settlement as of the date of enactment of this Act, only if such
claim is brought
or maintained against_
(1) a participating tobacco product manufacturer or its predecessors;
(2) an importer, distributor, wholesaler, or retailer of tobacco products_
(A) that, after the date of enactment of this Act, does not import, distribute, or
sell tobacco
products made or sold by a non-participating tobacco manufacturer;
(B) whose business practices with respect to sales or operations occurring
within the United
States, conform to the applicable requirements of the protocol; and
(C) that is not itself a non-participating tobacco product manufacturer;
(3) a supplier of component or constituent parts of tobacco products_
(A) whose business practices with respect to sales or operations occurring
within the United
States, conform to the applicable requirements of the protocol; and
(B) that is not itself a non-participating tobacco product manufacturer;
(4) a grower of tobacco products, unless such person is itself a
non-participating tobacco
product manufacturer; or
(5) an insurer of any person described in paragraph (1), (2), (3), or (4) based on,
arising out of,
or related to tobacco products manufactured, imported, distributed, or sold (or
tobacco grown) by
such person (other than an action brought by the insured person), unless such
insurer is itself a
non-participating tobacco product manufacturer.
(b) Exceptions._ The provisions of this title shall not apply to any tobacco
claim_
(1) brought against any person other than those described in subsection (a) or
to any tobacco
claim that reached final judgment or final settlement prior to the date of
enactment of this Act;
(2) against an employer under valid workers' compensation laws;
(3) arising under the securities laws of a State or the United State;
(4) brought by the United States;
(5) brought under this title by a State or a participating tobacco product
manufacturer to enforce
this Act;
(6) asserting damage to the environment from exposures other than
environmental smoke or
second-hand smoke; or
(7) brought against a supplier of a component or constituent part of a tobacco
product, if the
component or constituent part was sold after the date of enactment of this Act,
and the supplier
knew that the tobacco product giving rise to the claim would be manufactured
in the United
States by a nonparticipating tobacco product manufacturer.
SEC. 1407. GOVERNMENTAL CLAIMS.
(a) In General._ Except as provided in subsection (b) and (c), no State, political
subdivision of a
State, municipal corporation, governmental entity or corporation, Indian tribe, or
agency or
subdivision thereof, or other entity acting in parens patriae, may file or maintain
any civil
action involving a tobacco claim against a participating tobacco product
manufacturer.
(b) Effect on Existing State Suits of Settlement Agreement or Consent Decree._
Within 30 days
after the date of enactment of this Act, any State that has filed a civil action
involving a tobacco
claim against a participating tobacco product manufacturer may elect to settle
such action against
said tobacco product manufacturer. If a State makes such an election to enter
into a settlement or
a consent decree, it may maintain a civil action involving a tobacco claim only
to the extent
necessary to permit continuing court jurisdiction over the settlement or consent
decree. Nothing
herein shall preclude any State from bringing suit or seeking a court order to
enforce the terms of
such settlement or decree.
(c) State Option for One-Time Opt Out._ Any State that does not make the
election described in
subsection (b) may continue its lawsuit, notwithstanding subsection (a) of this
section. A State
that does not make such an election shall not be eligible to receive payments
from the trust fund
in title IV.
(d) 30-day Delay._ No settlement or consent decree entered into under
subsection (b) may take
effect until 30 days after the date of enactment of this Act.
(f) Preservation of Insurance Claims._
(1) In general._ If all participating tobacco product manufacturers fail to make
the payments
required by title IV for any calendar year, then_
(A) beginning on the first day of the next calendar year, subsection (a) does not
apply to any
insurance claim (including a direct action claim) that is a tobacco claim,
regardless of when that
claim arose;
(B) any statute of limitations or doctrine of laches under applicable law shall be
tolled for the
period_
(i) beginning on the date of enactment of this Act; and
(ii) ending on the last day of that calendar year; and
(C) an insurance claim (including a direct action claim) that is a tobacco claim
and that is
pending on the date of enactment of this Act shall be preserved.
(2) Application of title 11, United States Code._ For purposes of this subsection,
nothing in this
Act shall be construed to modify, suspend, or otherwise affect the application of
title 11, United
States Code, to participating tobacco manufacturers that fail to make such
payments.
(3) State law not affected._ Nothing in this subsection shall be construed to
expand or abridge
State law.
SEC. 1408. ADDICTION AND DEPENDENCY CLAIMS; CASTANO CIVIL ACTIONS.
(a) Addiction and Dependence Claims Barred._ In any civil action to which this
title applies, no
addiction claim or dependence claim may be filed or maintained against a
participating tobacco
product manufacturer.
(b) Castano Civil Actions._
(1) The rights and benefits afforded in this Act, and the various research
activities envisioned by
this Act, are provided in settlement of, and shall constitute the exclusive remedy
for the purpose
of determining civil liability as to those claims asserted in the Castano Civil
Actions, and all
bases for any such claim under the laws of any State are preempted (including
State substantive,
procedural, remedial, and evidentiary provisions) and settled. The Castano Civil
Actions shall be
dismissed with full reservation of the rights of individual class members to
pursue claims not
based on addiction or dependency in civil actions, as defined in section 1417(2),
in accordance
with this Act. For purposes of determining application of statutes of limitation or
repose,
individual actions filed within one year after the effective date of this Act by
those who were
included within a Castano Civil Action shall be considered to have been filed as
of the date of
the Castano Civil Action applicable to said individual.
(2) For purposes of awarding attorneys fees and expenses for those actions
subject to this
subsection, the matter at issue shall be submitted to arbitration before one panel
of arbitrators. In
any such arbitration, the arbitration panel shall consist of 3 persons, one of
whom shall be chosen
by the attorneys of the Castano Plaintiffs' Litigation Committee who were
signatories to the
Memorandum of Understanding dated June 20, 1997, by and between tobacco
product
manufacturers, the Attorneys General, and private attorneys, one of whom shall
be chosen by the
participating tobacco product manufacturers, and one of whom shall be chosen
jointly by those 2
arbitrators.
(3) The participating tobacco product manufacturers shall pay the arbitration
award.
SEC. 1409. SUBSTANTIAL NON-ATTAINMENT OF REQUIRED REDUCTIONS.
(a) Action by Secretary._ If the Secretary determines under title II that the
non-attainment
percentage for any year is greater than 20 percentage points for cigarettes or
smokeless tobacco,
then the Secretary shall determine, on a brand-by-brand basis, using data that
reflects a 1999
baseline, which tobacco product manufacturers are responsible within the 2
categories of tobacco
products for the excess. The Secretary may commence an action under this
section against the
tobacco product manufacturer or manufacturers of the brand or brands of
cigarettes or smokeless
tobacco products for which the non-attainment percentage exceeded 20
percentage points.
(b) Procedures._ Any action under this section shall be commenced by the
Secretary in the
United States District Court for the District of Columbia within 90 days after
publication in the
Federal Register of the determination that the non-attainment percentage for the
tobacco product
in question is greater than 20 percentage points. Any such action shall be heard
and determined
by a 3-judge court under section 2284 of title 28, United States Code.
(c) Determination by Court._ In any action under this section, the court shall
determine whether
a tobacco product manufacturer has shown, by a preponderance of the evidence
that it_
(1) has complied substantially with the provisions of this Act regarding underage
tobacco use, of
any rules or regulations promulgated thereunder, or of any Federal or State laws
regarding
underage tobacco use;
(2) has not taken any material action to undermine the achievement of the
required percentage
reduction for the tobacco product in question; and
(3) has used its best efforts to reduce underage tobacco use to a degree at least
equal to the
required percentage reductions.
(d) Removal of Annual Aggregate Payment Limitation._ Except as provided in
subsections (e)
and (g), if the court determines that a tobacco product manufacturer has failed
to make the
showing described in subsection (c) then sections 1411 and 1412 of this Act do
not apply to the
enforcement against, or the payment by, such tobacco product manufacturer of
any judgment or
settlement that becomes final after that determination is made.
(e) Defense._ An action under this section shall be dismissed, and subsection
(d) shall not
apply, if the court finds that the Secretary's determination under subsection (a)
was unlawful
under subparagraph (A), (B), (C), or (D) of section 706(2) of title 5, United States
Code. Any
judgments paid under section 1412 of this Act prior to a final judgment
determining that the
Secretary's determination was erroneous shall be fully credited, with interest,
under section 1412
of this Act.
(f) Review._ Decisions of the court under this section are reviewable only by the
Supreme
Court by writ of certiorari granted upon the petition of any party. The applicability
of subsection
(d) shall be stayed during the pendency of any such petition or review.
(g) Continuing Effect._ Subsection (d) shall cease to apply to a tobacco product
manufacturer
found to have engaged in conduct described in subsection (c) upon the later of_
(1) a determination by the Secretary under section 201 after the commencement
of action under
subsection (a) that the non-attainment percentage for the tobacco product in
question is 20 or
fewer percentage points; or
(2) a finding by the court in an action filed against the Secretary by the
manufacturer, not earlier
than 2 years after the determination described in subsection (c) becomes final,
that the
manufacturer has shown by a preponderance of the evidence that, in the period
since that
determination, the manufacturer_
(A) has complied with the provisions of this Act regarding underage tobacco
use, of any rules or
regulations promulgated thereunder, and of any other applicable Federal, State,
or local laws,
rules, or regulations;
(B) has not taken any action to undermine the achievement of the required
percentage reduction
for the tobacco product in question; and
(C) has used its best efforts to attain the required percentage reduction for the
tobacco product in
question.
A judgment or settlement against the tobacco product manufacturer that
becomes final after a
determination or finding described in paragraph (1) or (2) of this subsection is
not subject to
subsection (d). An action under paragraph (2) of this subsection shall be
commenced in the
United States District Court for the District of Columbia, and shall be heard and
determined by a
3-judge court under section 2284 of title 28, United States Code. A decision by
the court under
paragraph (2) of this subsection is reviewable only by the Supreme Court by writ
of certiorari
granted upon the petition of any party, and the decision shall be stayed during
the pendency of
the petition or review. A determination or finding described in paragraph (1) or
(2) of this
subsection does not limit the Secretary's authority to bring a subsequent action
under this section
against any tobacco product manufacturer or the applicability of subsection (d)
with respect to
any such subsequent action.
SEC. 1410. PUBLIC HEALTH EMERGENCY.
If the Secretary, in consultation with the Commissioner of Food and Drugs, the
Surgeon
General, the Director of the Center for Disease Control or the Director's delegate,
and the
Director of the Health and Human Services Office of Minority Health determines
at any time
that a tobacco product manufacturer's actions or inactions with respect to its
compliance with the
Act are of such a nature as to create a clear and present danger that the
manufacturer will not
attain the targets for underage smoking reduction, the Secretary may bring an
action under
section 1409 seeking the immediate suspension of the tobacco product
manufacturer's annual
limitation cap on civil judgments. If the court determines that the Secretary has
proved by clear
and convincing evidence that the subject manufacturer's actions or inactions are
of such a nature
that they present a clear and present danger that the manufacturer will not attain
the targets for
underage smoking reduction, the court may suspend the subject manufacturer's
annual limitation
cap on civil judgments.
SEC. 1411. TOBACCO CLAIMS BROUGHT AGAINST PARTICIPATING TOBACCO
PRODUCTMANUFACTURERS.
(a) Permissible Defendants._ In any civil action to which this title applies,
tobacco claims may
be filed or maintained only against_
(1) a participating tobacco product manufacturer; or
(2) a surviving entity established by a participating tobacco product
manufacturer.
(b) Actions involving participating and non-participating manufacturers._ In any
civil action
involving both a tobacco claim against a participating tobacco product
manufacturer based in
whole or in part upon conduct occurring prior to the date of enactment of this
Act and a claim
against 1 or more non-participating tobacco product manufacturers, the court,
upon application
of a participating tobacco product manufacturer, shall require the jury to or shall
itself apportion
liability as between the participating tobacco product manufacturer and
non-participating
tobacco product manufacturers.
SEC. 1412. PAYMENT OF TOBACCO CLAIM SETTLEMENTS AND JUDGMENTS.
(a) In General._ Except as provided in this section, any judgment or settlement
in any civil
action to which this subtitle applies shall be subject to the process for payment
of judgments and
settlements set forth in this section. No participating tobacco product
manufacturer shall be
obligated to pay a judgment or settlement on a tobacco claim in any civil action
to which this
title applies except in accordance with this section. This section shall not apply
to the portion, if
any, of a judgment that imposes punitive damages based on any conduct that_
(1) occurs after the date of enactment of this Act; and
(2) is other than the manufacture, development, advertising, marketing, or sale
of tobacco
products in compliance with this Act and any agreement incident thereto.
(b) Registration with the Secretary of the Treasury._
(1) The Secretary shall maintain a record of settlements, judgments, and
payments in civil
actions to which this title applies.
(2) Any party claiming entitlement to a monetary payment under a final judgment
or final
settlement on a tobacco claim shall register such claim with the Secretary by
filing a true and
correct copy of the final judgment or final settlement agreement with the
Secretary and providing
a copy of such filing to all other parties to the judgment or settlement.
(3) Any participating tobacco product manufacturer making a payment on any
final judgment or
final settlement to which this section applies shall certify such payment to the
Secretary by filing
a true and correct copy of the proof of payment and a statement of the remaining
unpaid portion,
if any, of such final judgment or final settlement with the Secretary and shall
provide a copy of
such filing to all other parties to the judgment or settlement.
(c) Liability Cap._
(1) In general._ The aggregate payments made by all participating tobacco
product
manufacturers in any calendar year may not exceed $8,000,000,000.
(2) Implementation._ The Secretary shall initiate a rulemaking within 30 days
after the date of
enactment of this Act to establish a mechanism for implementing this subsection
in such a way
to ensure the fair and equitable payment of final judgments or final settlements
on tobacco
claims under this title. Amounts not payable because of the application of this
subsection, shall
be carried forward and paid in the next year, subject to the provisions of this
subsection.
(3) Inflation adjustment._
(A) In general._ The amount in paragraph (1) shall be increased annually,
beginning with the
second calendar year beginning after the date of enactment of this Act, by the
greater of 3
percent or the annual increase in the CPI.
(B) CPI._ For purposes of subparagraph (A), the CPI for any calendar year is the
average of the
Consumer Price Index for all-urban consumers published by the Department of
Labor.
(C) Rounding._ If any increase determined under subparagraph (A) is not a
multiple of $1,000,
the increase shall be rounded to the nearest multiple of $1,000.
(d) Injunctive Relief._ A participating tobacco product manufacturer may
commence an action
to enjoin any State court proceeding to enforce or execute any judgment or
settlement where
payment has not been authorized under this section. Such an action shall arise
under the laws of
the United States and may be commenced in the district court of the United
States for the district
in which the State court proceeding is pending.
(e) Joint and Several Liability._ All participating tobacco product manufacturers
shall be jointly
and severally liable for, and shall enter into an agreement to apportion among
them, any amounts
payable under judgments and settlements governed by this section arising in
whole or in part
from conduct occurring prior to the date of enactment of this Act.
(f) Bankruptcy of Participating Manufacturer._ No participating tobacco product
manufacturer
shall cease operations without establishing a surviving entity against which a
tobacco claim may
be brought. Any obligation , interest, or debt of a participating, tobacco product
manufacturer
arising under such liability apportionment agreement shall be given priority and
shall not be
rejected, avoided, discharged, or otherwise modified or diminished in a
proceeding, under title
11, United States Code, or in any liquidation, reorganization, receivership, or
other insolvency
proceeding under State law. A trustee or receiver in any proceeding under title
11, United States
Code, or in liquidation, reorganization, receivership, or other insolvency
proceeding under State
law, may avoid any transfer of an interest of the participating tobacco product
manufacturer, or
any obligation incurred by such manufacturer, that was made or incurred on or
within 2 years
before the date of the filing of a bankruptcy petition, if such manufacturer made
such transfer or
incurred such obligation to hinder or defeat in any fashion the payment of any
obligation,
interest, or debt of the manufacturer arising under the liability apportionment
agreement. Any
property vesting in the participating tobacco product manufacturer following
such a proceeding
shall be subject to all claims and interest of creditors arising under the liability
apportionment
agreement.
(f) Limitation on State Courts._ No court of any State, Tribe, or political
subdivision of a State
may take any action to inhibit the effective operation of subsection (c).
SEC. 1413. ATTORNEYS' FEES AND EXPENSES.
(a) Arbitration Panel._
(1) Right to Establish ._ For the purpose of awarding of attorneys' fees and
expenses relating to
litigation affected by, or legal services that, in whole or in part, resulted in or
created a model for
programs in, this Act, and with respect to which litigation or services the
attorney involved is
unable to agree with the plaintiff who employed that attorney with respect to any
dispute that
may arise between them regarding the fee agreement, the matter at issue shall
be submitted to
arbitration. In any such arbitration, the arbitration panel shall consist of 3
persons, one of whom
shall be chosen by the plaintiff, one of whom shall be chosen by the attorney,
and one of whom
shall be chosen jointly by those 2 arbitrators.
(2) Operation._ Not later than 30 days after the date on which all members of an
arbitration
panel are appointed under paragraph (1), the panel shall establish the procedures
under which the
panel will operate which shall include_
(A) a requirement that any finding by the arbitration panel must be in writing and
supported by
written reasons;
(B) procedures for the exchanging of exhibits and witness lists by the various
claimants for
awards;
(C) to the maximum extent practicable, requirements that proceedings before the
panel be based
on affidavits rather than live testimony; and
(D) a requirement that all claims be submitted to an arbitration panel not later
than 3 months
after the date of this Act and a determination made by the panel with respect to
such claims not
later than 7 months after such date of enactment.
(3) Right to petition._ Any individual attorney or group of attorneys involved in
litigation
affected by this Act shall have the right to petition an arbitration panel for
attorneys' fees and
expenses.
(4) Criteria._ In making any award under this section, an arbitration panel shall
consider the
following criteria:
(A) The time and labor required by the claimant.
(B) The novelty and difficulty of the questions involved in the action for which
the claimant is
making a claim.
(C) The skill requisite to perform the legal service involved properly.
(D) The preclusion of other employment by the attorney due to acceptance of the
action
involved.
(E) Whether the fee is fixed or a percentage.
(F) Time limitations imposed by the client or the circumstances.
(G) The amount involved and the results obtained.
(H) The experience, reputation, and ability of the attorneys involved.
(I) The undesirability of the action.
(J) Such other factors as justice may require.
(5) Appeal and enforcement._ The findings of an arbitration panel shall be final,
binding,
nonappealable, and payable within 30 days after the date on which the finding is
made public,
except that if an award is to be paid in installments, the first installment shall be
payable within
such 30 day period and succeeding installments shall be paid annually thereafter.
(b) Validity and Enforceability of Private Agreements._ Notwithstanding any
other provision of
this Act, nothing in this section shall be construed to abrogate or restrict in any
way the rights of
any parties to mediate, negotiate, or settle any fee or expense disputes or issues
to which this
section applies, or to enter into private agreements with respect to the allocation
or division of
fees among the attorneys party to any such agreement.
(c) Offset for Amounts Already Paid._ In making a determination under this
section with regard
to a dispute between a State that pursued independent civil action against
tobacco product
manufacturers and its attorney, the arbitration panel shall take into account any
amounts already
paid by the State under the agreement in dispute.
SEC. 1414. EFFECT OF COURT DECISIONS.
(a) Severability._ If any provision of titles I through XIII, or the application
thereof to any
person, manufacturer or circumstance, is held invalid, the remainder of the
provisions of those
titles, and the application of such provision to other persons or circumstances,
shall not be
affected thereby.
(b) Nonseverability._ If a court of competent jurisdiction enters a final decision
substantially
limiting or impairing the essential elements of title XIV, specifically the
requirements of sections
1404 and 1405, then the provisions of section 1412 are null and void and of no
effect.
SEC. 1415. CRIMINAL LAWS NOT AFFECTED.
Nothing in this title shall be construed to limit the criminal liability of tobacco
product
manufacturers, retailers, or distributors or their directors, officers, employees,
successors, or
assigns.
SEC. 1416. CONGRESS RESERVES THE RIGHT TO ENACT LAWS IN THE
FUTURE.
The right to alter, amend, or repeal any provision of this Act is hereby reserved
to the Congress
in accordance with the provisions of Article I of the Constitution of the United
States and more
than 200 years of history.
SEC. 1417. DEFINITIONS.
In this title:
(1) Terms defined in title VII._ Any term used in this title that is defined in title
VII has the
meaning given to it in title VII.
(2) Additional definitions._
(A) Addiction claim; dependence claim._ The term ``addiction claim'' or
``dependence claim''
refers only to any cause of action to the extent that the prayer for relief seeks a
cessation
program, or other public health program that is to be available to members of the
general public
and is designed to reduce or eliminate the users' addiction to, or dependence on,
tobacco
products, and as used herein is brought by those who claim the need for nicotine
reduction
assistance. Neither addiction or dependence claims include claims related to or
involving
manifestation of illness or tobacco-related diseases.
(B) Compensatory damages._ The term ``compensatory damages'' refers to
those damages
necessary to reimburse an injured party, and includes actual, general, and
special damages.
(C) Protocol._ The term ``protocol'' means the agreement to be entered into by
the Secretary of
Health and Human Services with a participating tobacco product manufacturers
under this title.
(D) Punitive damages._ The term ``punitive damages'' means damages in
addition to
compensatory damages having the character of punishment or penalty.
(E) Secretary._ The term ``Secretary'' means the Secretary of the Treasury,
except where the
context otherwise requires.
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