This page contains the full-text reproduction of S. 1415
the "Universal Tobacco Settlement Act."
[Version Info.]
S 1415 IS
105th CONGRESS
1st Session
S. 1415
To reform and restructure the processes by which tobacco products are manufactured, marketed, and distributed, to prevent the use of tobacco products by minors, to redress the adverse health effects of tobacco use, and for other purposes.
IN THE SENATE OF THE UNITED STATES
November 7, 1997
Mr. MCCAIN (for himself, Mr. HOLLINGS, Mr. BREAUX, and Mr. GORTON) introduced the following bill; which was read twice and referred to the Committee on Commerce, Science, and Transportation
A BILL
To reform and restructure the processes by which tobacco products are manufactured, marketed, and distributed, to prevent the use of tobacco products by minors, to redress the adverse health effects of tobacco use, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE- This Act may be cited as the `Universal Tobacco Settlement Act'.
(b) TABLE OF CONTENTS- The table of contents of this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I--REGULATION OF THE TOBACCO INDUSTRY
Subtitle A--Restriction on Marketing and Advertising
Sec. 101. Prohibitions on advertising.
Sec. 102. General restrictions.
Sec. 103. Format and content requirements for labeling and advertising.
Sec. 104. Statement of intended use.
Sec. 105. Ban on nontobacco items and services, contests and games of chance, and sponsorship of events.
Sec. 106. Use of product descriptors.
Subtitle B--Warnings, Labeling and Packaging
Sec. 111. Cigarette warnings.
Sec. 112. Smokeless tobacco warnings.
Sec. 114. Enforcement, regulations, and construction.
Subtitle C--Restriction on Access to Tobacco Products
Sec. 121. Requirements relating to retailers.
Sec. 122. Manufacture, sale, and distribution.
Subtitle D--Licensing of Retail Tobacco Sellers
Sec. 131. Establishment of program.
Sec. 133. Penalties, revocations and suspensions.
Sec. 134. Federal licensing of military and other entities.
Subtitle E--Regulation of Tobacco Product Development and Manufacturing
Sec. 142. Treatment of tobacco products as drugs.
Sec. 143. Health and safety regulation of tobacco products.
Subtitle F--Compliance Plans and Corporate Culture
Sec. 151. Compliance plans.
Sec. 152. Compliance programs.
Sec. 153. Whistleblower protections.
Sec. 154. Provisions relating to lobbying.
Sec. 155. Termination of certain entities.
TITLE II--REDUCTION IN UNDERAGE TOBACCO USE
Sec. 202. Determination of underage use base percentages.
Sec. 203. Annual daily incidence of underage use of tobacco products.
Sec. 204. Required reduction in underage tobacco use.
Sec. 205. Application of surcharges.
Sec. 206. Abatement procedures.
TITLE III--STANDARDS TO REDUCE INVOLUNTARY EXPOSURE TO TOBACCO SMOKE
Sec. 302. Smoke-free environment policy.
Sec. 303. Citizen actions.
Sec. 306. Effective date.
TITLE IV--PUBLIC HEALTH AND OTHER PROGRAMS
Subtitle A--Public Health Block Grant Program
Sec. 401. Public Health Trust Fund.
Sec. 402. Block grants to States.
Sec. 405. Withholding of funds.
Subtitle B--Other Programs
Sec. 411. National Smoking Cessation Program.
Sec. 412. National Reduction in Tobacco Usage Program.
Sec. 413. National Tobacco-Free Public Education Program.
Sec. 414. National Event Sponsorship Program.
Sec. 415. National Community Action Program.
Sec. 416. National Cessation Research Program.
Sec. 417. Use of surcharge payments.
TITLE V--CONSENT DECREES, NON-PARTICIPATING MANUFACTURERS, AND STATE ENFORCEMENT
Subtitle A--Consent Decrees and Non-Participating Manufacturers
Sec. 511. Consent decrees.
Sec. 512. National tobacco control protocol.
Sec. 513. Non-participating manufacturers.
Subtitle B--State Enforcement
Sec. 521. Requirement of no sale to minors law.
Sec. 522. State reporting.
Sec. 523. Reduction in State payments.
TITLE VI--PROVISIONS RELATING TO TOBACCO-RELATED CIVIL ACTIONS
Sec. 601. General immunity.
Sec. 602. Civil liability for past conduct.
Sec. 603. Civil liability for future conduct.
Sec. 604. Non-participating manufacturers.
TITLE VII--PUBLIC DISCLOSURE OF HEALTH RESEARCH
Sec. 702. National Tobacco Document Depository.
TITLE VIII--ASSISTANCE TO TOBACCO GROWERS AND COMMUNITIES
Sec. 801. Short title; table of contents.
SUBTITLE A--TOBACCO COMMUNITY REVITALIZATION TRUST FUND
Sec. 811. Establishment of Trust Fund.
Sec. 812. Contributions by tobacco product manufacturers and importers.
SUBTITLE B--AGRICULTURAL MARKET TRANSITION ASSISTANCE
Sec. 821. Payments for lost tobacco quota.
Sec. 822. Industry payments for all Department costs associated with tobacco production.
Sec. 823. Tobacco community economic development grants.
Sec. 824. Modifications in Federal tobacco programs.
SUBTITLE C--FARMER AND WORKER TRANSITION ASSISTANCE
Sec. 831. Tobacco worker transition program.
Sec. 832. Farmer opportunity grants.
SUBTITLE D--IMMUNITY
Sec. 841. General immunity for tobacco producers and warehousers.
TITLE IX--EFFECTIVE DATES AND OTHER PROVISIONS
Sec. 901. Effective dates.
Sec. 902. Native Americans.
SEC. 2. FINDINGS.
(a) GENERAL FINDINGS- Congress makes the following findings:
(1) The Food and Drug Administration and other public health authorities view the use of tobacco products by the nation's children as a `pediatric disease' of epic and worsening proportions that results in new generations of tobacco-dependent children and adults.
(2) There is a consensus within the scientific and medical communities that tobacco products are inherently dangerous and cause cancer, heart disease, and other serious adverse health effects.
(3) The Food and Drug Administration and other health authorities have concluded that virtually all new users of tobacco products are under the age of 18. Virtually all Federal, State, and local officials and entities believe that tobacco advertising and marketing contribute significantly to the use of nicotine-containing tobacco products by adolescents and as such, sweeping new restriction on the sale, promotion, and distribution of such products are needed.
(4) Federal, State, and local governments lack many of the legal means and resources needed to address the societal problems caused by the use of tobacco products.
(5) Public health authorities believe that the societal benefits of enacting tobacco settlement legislation in human and economic terms would be vast. The Food and Drug Administration found that reducing underage tobacco use 50 percent `would prevent well over 60,000 early deaths'. The Food and Drug Administration has estimated that the monetary value of the regulations promulgated as a result of this Act will be worth up to $43,000,000,000 per year in reduced medical costs, improved productivity, and the benefit of avoiding the premature death of loved ones.
(6) The unique position occupied by tobacco in the history and economy of the United States, the magnitude of the actual and potential tobacco-related litigation, the need to avoid the cost, expense, uncertainty, and inconsistency associated with such protracted litigation, the need to limit the sale, distribution, marketing, and advertising of tobacco products to persons of legal age, and the need to educate the public (especially young people) of the health effects of using tobacco products all dictate that it would be in the public interest to enact legislation to facilitate a resolution of such matters.
(b) FINDINGS RELATED TO INTERSTATE COMMERCE AND THE JUDICIAL SYSTEM- Congress makes the following findings:
(1) The sale, distribution, marketing, advertising, and use of tobacco products are activities substantially affecting interstate commerce. Such products are sold, marketed, advertised, and distributed in interstate commerce on a nationwide basis and have a substantial effect on the economy of the United States.
(2) The sale, distribution, marketing, advertising, and use of tobacco products are activities that substantially affect interstate commerce by virtue of the health care and other costs that Federal and State governmental authorities have incurred because of the usage of tobacco products.
(3) Various civil actions brought by State attorneys general, cities, counties, the Commonwealth of Puerto Rico, third-party payors, and other private classes and individuals to recover damages relating to tobacco-related diseases, conditions and products are pending throughout the United States, of these actions are slow-moving, expensive, and burdensome not only for the litigants but also for Federal and State judicial systems.
SEC. 3. PURPOSES.
It is the purpose of this Act to--
(1) reiterate and enhance the authority of the Food and Drug Administration to regulate tobacco products and provide for tobacco industry funding of the oversight activities of the Administration;
(2) ban all outdoor tobacco advertising and ban all cartoon characters and human figures used in connection with tobacco advertising;
(3) provide for the funding by the tobacco industry of an aggressive Federal enforcement program relating to tobacco advertising and distribution, including a State-administered retail licensing system to prevent minors from obtaining tobacco products;
(4) subject the tobacco industry to severe financial penalties in the event that underage tobacco usage does not decline radically over the next 10 years;
(5) provide for the establishment of national standards to control the manufacturing of tobacco products and the ingredients used in such products;
(6) provide certain regulatory powers to the Food and Drug Administration to encourage the development and marketing by the tobacco industry of `less hazardous tobacco products', including the
power to regulate the level of nicotine in such products;
(7) require the manufacturers of tobacco products to disclose all present and future non-public internal laboratory research regarding tobacco products;
(8) establish a minimum Federal standard to limit smoking in public places;
(9) provide for the establishment of a National Tobacco Settlement Trust Fund to be funded by the tobacco industry and used in accordance with this Act;
(10) provide for the establishment of a national education-oriented counter advertising and tobacco control campaign to be funded through the National Tobacco Settlement Trust Fund;
(11) provide annual payments to States to fund health benefits programs and to create a tobacco products liability judgments and settlements fund to be funded through the National Tobacco Settlement Trust Fund; and
(12) provide for the establishment of a national program of smoking cessation to be funded through the National Tobacco Settlement Trust Fund.
TITLE I--REGULATION OF THE TOBACCO INDUSTRY
SEC. 100. DEFINITIONS.
(1) BRAND- The term `brand' means a variety of a tobacco product distinguished by the tobacco used, tar content, nicotine content, flavoring used, size, filtration, or packaging.
(2) CIGAR- The term `cigar' means any roll of tobacco wrapped in leaf tobacco or in any substance containing tobacco (other than any roll of tobacco which is a cigarette or cigarillo within the meaning of paragraph (3) or (4)).
(3) CIGARETTE- The term `cigarette' means any product which contains nicotine, is intended to be burned under ordinary conditions of use, and consists of--
(A) any roll of tobacco wrapped in paper or in any substance not containing tobacco; and
(B) any roll of tobacco wrapped in any substance containing tobacco which, because of its appearance, the type of tobacco used in the filler, or its packaging and labeling, is likely to be offered to, or purchased by, consumers as a cigarette described in subparagraph (A).
(4) CIGARILLOS- The term `cigarillos' means any roll of tobacco wrapped in leaf tobacco or any substance containing tobacco (other than any roll of tobacco which is a cigarette within the meaning of paragraph (3)) and as to which 1,000 units weigh not more than 3 pounds.
(5) CIGARETTE TOBACCO- The term `cigarette tobacco' means any product that consists of loose tobacco that contains or delivers nicotine and is intended for use by persons in a cigarette. Unless otherwise stated, the requirements of this Act pertaining to cigarettes shall also apply to cigarette tobacco.
(6) COMMERCE- The term `commerce' means--
(A) commerce between any State, the District of Columbia, the Commonwealth of Puerto Rico, Guam, the Virgin Islands, American Samoa, the Northern Mariana Islands or any territory or possession of the United States;
(B) commerce between points in any State, the District of Columbia, the Commonwealth of Puerto Rico, Guam, the Virgin Islands, American Samoa, the Northern Mariana Islands or any territory or possession of the United States; or
(C) commerce wholly within the District of Columbia, Guam, the Virgin Islands, American Samoa, the Northern Mariana Islands, or any territory or possession of the United States.
(7) COMMISSIONER- The term `Commissioner' means the Commissioner of Food and Drugs.
(8) DISTRIBUTOR- The term `distributor' means any person who furthers the distribution of tobacco products, whether domestic or imported, at any point from the original place of manufacture to the person who sells or distributes the product to individuals for personal consumption. Such term shall not include common carriers.
(9) LITTLE CIGAR- The term `little cigar' means any roll of tobacco wrapped in leaf tobacco or any substance containing tobacco (other than any roll of tobacco which is a cigarette within the meaning of subsection (1)) and as to which 1,000 units weigh not more than 3 pounds.
(10) MANUFACTURER- The term `manufacturer' means any person, including any repacker or
relabeler, who manufactures, fabricates, assembles, processes, or labels a finished tobacco product.
(11) NICOTINE- The term `nicotine' means the chemical substance named 3-(1-Methyl-2-pyrrolidinyl) pyridine or C10H14N2, including any salt or complex of nicotine.
(12) PACKAGE- The term `package' means a pack, box, carton, or container of any kind in which tobacco products are offered for sale, sold, or otherwise distributed to consumers.
(13) PERSON- The term `person' means an individual, partnership, corporation, or any other business or legal entity.
(14) PIPE TOBACCO- The term `pipe tobacco' means any loose tobacco that, because of its appearance, type, packaging, or labeling, is likely to be offered to, or purchased by, consumers as a tobacco product to be smoked in a pipe.
(15) POINT OF SALE- The term `point of sale' means any location at which an individual can purchase or otherwise obtain tobacco products for personal consumption.
(16) RETAILER- The term `retailer' means any person who sells tobacco products to individuals for personal consumption, or who operates a facility where vending machines or self-service displays are permitted under this title.
(17) SALE- The term `sale' includes the selling, providing samples of, or otherwise making tobacco products available for personal consumption in any place within the scope of this Act.
(18) SECRETARY- The term `Secretary' means the Secretary of Health and Human Services.
(19) SMOKELESS TOBACCO- The term `smokeless tobacco' means any product that consists of cut, ground, powdered, or leaf tobacco that contains nicotine and that is intended to be placed in the oral or nasal cavity.
(20) STATE- The term `State' includes the several States, the District of Columbia, the Commonwealth of Puerto Rico, Guam, the Virgin Islands, American Samoa, the Northern Mariana Islands, and any other territory or possession of the United States. Such term includes any political division of any State.
(21) TOBACCO- The term `tobacco' means tobacco in its unmanufactured form.
(22) TOBACCO PRODUCT- The term `tobacco product' means cigars, cigarettes, cigarillos, cigarette tobacco, little cigars, pipe tobacco, and smokeless tobacco.
(23) TRUST FUND- The term `Trust Fund' means the National Tobacco Settlement Trust Fund established under section 401.
Subtitle A--Restriction on Marketing and Advertising
SEC. 101. PROHIBITIONS ON ADVERTISING.
(a) PROHIBITION ON OUTDOOR ADVERTISING-
(1) IN GENERAL- No manufacturer, distributor, or retailer may use any form of outdoor tobacco product advertising, including billboards, posters, or placards.
(2) STADIA AND ARENAS- Except as otherwise provided in this title, a manufacturer, distributor, or retailer shall not advertise tobacco products in any arena or stadium where athletic, musical, artistic, or other social or cultural events or activities occur.
(b) PROHIBITION ON USE OF HUMAN IMAGES AND CARTOONS- No manufacturer, distributor, or retailer may use a human image or a cartoon character or cartoon-type character in its advertising, labeling, or promotional material with respect to a tobacco product.
(c) PROHIBITION ON ADVERTISING ON THE INTERNET- No manufacturer, distributor, or retailer may use the Internet to advertise tobacco products unless such an advertisement is inaccessible in or from the United States.
(d) PROHIBITION ON POINT-OF-SALE ADVERTISING-
(1) IN GENERAL- Except as otherwise provided in this subsection, no manufacturer, distributor, or retailer may use point-of-sale advertising of tobacco products.
(2) ADULT-ONLY STORES AND TOBACCO OUTLETS- Paragraph (1) shall not apply to point of sale advertising at adult-only stores and tobacco outlets.
(3) PERMISSIBLE ADVERTISING-
(A) IN GENERAL- Each manufacturer of tobacco products may display not more than 2 separate point-of-sale advertisements in or at each location at which tobacco products are offered for sale.
(B) MARKET SHARE MANUFACTURERS- A manufacturer with at least 25 percent of the market share of the tobacco product involved may display an additional point-of-sale advertisement in or at each location at which tobacco products are offered for sale.
(C) RETAILERS- A retailer may have not more than 1 point-of-sale advertisement relating to the retailer's own or its wholesaler's contracted retailer or private label brand of tobacco product. No manufacturer or distributor may enter into any arrangement with a retailer to limit the ability of the retailer to display any form of permissible point-of-sale advertisement or promotional material originating with another manufacturer or distributor.
(A) IN GENERAL- A point of sale advertisement permitted under this subsection shall be comprised of a display area that is not larger than 576 square inches (either individually or in the aggregate) and shall consist only of black letters on a white background or other recognized typographical marks. Such advertisement shall not be attached to nor located within 2 feet of any fixture on which candy is displayed for sale.
(B) AUDIO AND VIDEO FORMATS- Audio and video advertisements permitted under section 103(c) may be distributed to individuals who are 18 years of age or older at point of sale but may not be played or viewed at such point of sale.
(C) DISPLAY FIXTURES- Display fixtures in the form of signs consisting of brand name and price and not larger than 2 inches in height are permitted.
(5) DEFINITION- For purposes of this subsection, the term `point-of-sale advertising' means all printed or graphical materials bearing the brand name (alone or in conjunction with any other word), logo, motto, selling message, recognizable color or pattern of colors, or any other indicia of product identification similar or identical to those used for tobacco products which, when used for its intended purpose, can reasonably be anticipated to be seen by customers at a location at which tobacco products are offered for sale.
SEC. 102. GENERAL RESTRICTIONS.
(a) RESTRICTION ON PRODUCT NAMES- A manufacturer shall not use a trade or brand name of a nontobacco product as the trade or brand name for a cigarette or smokeless tobacco product, except for a tobacco product whose trade or brand name was on both a tobacco product and a nontobacco product that were sold in the United States on or before January 1, 1995.
(b) ADVERTISING LIMITED TO FDA SPECIFIED MEDIA-
(1) IN GENERAL- A manufacturer, distributor, or retailer may, in accordance with this title, disseminate or cause to be disseminated advertising or labeling which bears a tobacco product brand name (alone or in conjunction with any other word) or any other indicia of tobacco product identification only in newspapers, in magazines, in periodicals or other publications (whether periodic or limited distribution), on billboards, posters and placards in accordance with section 101(a), in nonpoint-of-sale promotional material (including direct mail), in point-of-sale promotional material, and in audio or video formats delivered at a point-of-sale.
(2) LIMITATION- A manufacturer, distributor, or retailer that intends to disseminate, or to cause to be disseminated, advertising or labeling for a tobacco product in a medium that is not described in paragraph (1) shall notify the Commissioner not less than 30 days prior to the date on which such medium is to be used. Such notice shall describe the medium and discuss the extent to which the advertising or labeling may be seen by individuals who are under 18 years of age.
(3) Action by commissioner-
(c) RESTRICTION ON PLACEMENT IN ENTERTAINMENT MEDIA-
(1) IN GENERAL- No payment shall be made by any manufacturer, distributor, or retailer for the placement of any tobacco product or tobacco product package or advertisement--
(A) as a prop in any television program or motion picture produced for viewing by the general public; or
(B) in a video or on a video game machine.
(2) VIDEO GAME- The term `video game' means any electronic amusement device that utilizes a computer, microprocessor, or similar electronic circuitry and its own cathode ray tube, or is designed to be used with a television set or a monitor, that interacts with the user of the device.
(d) RESTRICTIONS ON GLAMORIZATION OF TOBACCO PRODUCTS- No direct or indirect payment shall be made by any manufacturer, distributor, or retailer to any entity for the purpose of promoting the image or use of a tobacco product through print or film media that appeals to individuals under 18 years of age or through a live performance by an entertainment artist that appeals to such individuals.
SEC. 103. FORMAT AND CONTENT REQUIREMENTS FOR LABELING AND ADVERTISING.
(a) IN GENERAL- Except as provided in subsections (b) and (c), each manufacturer, distributor, and retailer advertising or causing to be advertised, disseminating or causing to be disseminated, any labeling or advertising for a tobacco product shall use only black text on a white background.
(b) CERTAIN ADVERTISING EXCEPTED-
(1) IN GENERAL- Subsection (a) shall not apply to advertising--
(A) in any facility where vending machines and self-service displays are permitted under this title if the advertising involved--
(i) is not visible from outside of the facility; and
(ii) is affixed to a wall or fixture in the facility;
(B) that appears in any publication (whether periodic, limited, or controlled distribution) that the manufacturer, distributor, or retailer demonstrates is an adult publication.
(2) ADULT PUBLICATION- For purposes of paragraph (1)(B), the term `adult publication' means a newspaper, magazine, periodical, or other publication--
(A) whose readers under 18 years of age constitute 15 percent or less of the total readership as measured by competent and reliable survey evidence; and
(B) that is read by fewer than 2,000,000 individuals who are under 18 years of age as measured by competent and reliable survey evidence.
(c) AUDIO OR VIDEO FORMATS- Each manufacturer, distributor, and retailer advertising or causing to be advertised any advertising for a tobacco product in an audio or video format shall comply with the following:
(1) With respect to an audio format, the advertising shall be limited to words only with no music or sound effects.
(2) With respect to a video format, the advertising shall be limited to static black text only on a white background. Any audio with the video advertising shall be limited to words only with no music or sound effects.
SEC. 104. STATEMENT OF INTENDED USE.
(a) REQUIREMENT- Each manufacturer, distributor, and retailer advertising or causing to be advertised, disseminating or causing to be disseminated, advertising concerning cigarettes, cigarette tobacco, or smokeless tobacco products otherwise permitted under this title shall include, as provided in section 502 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 352), the established name of the product and a statement of the intended use of the product as provided for in subsection (b).
(1) CIGARETTES- A statement of intended use for cigarettes or cigarette tobacco is as follows (whichever is appropriate):
Cigarettes--A Nicotine-Delivery Device for Persons 18 or Older.
Cigarette Tobacco--A Nicotine-Delivery Device for Persons 18 or Older.
(2) SMOKELESS TOBACCO- A statement of intended use for a smokeless tobacco product is as follows (whichever is appropriate):
Loose Leaf Chewing Tobacco--A Nicotine-Delivery Device for Persons 18 or Older.
Plug Chewing Tobacco--A Nicotine-Delivery Device for Persons 18 or Older.
Twist Chewing Tobacco--A Nicotine-Delivery Device for Persons 18 or Older.
Moist Snuff--A Nicotine-Delivery Device for Persons 18 or Older.
Dry Snuff--A Nicotine-Delivery Device for Persons 18 or Older.
(c) TYPE AND LOCATION- Requirements with respect to type size, style, font, and location shall be determined by the Commissioner.
SEC. 105. BAN ON NONTOBACCO ITEMS AND SERVICES, CONTESTS AND GAMES OF CHANCE, AND SPONSORSHIP OF EVENTS.
(a) BAN ON ALL NONTOBACCO MERCHANDISE- No manufacturer, importer, distributor, or retailer shall market, license, distribute, sell, or cause to be marketed, licensed, distributed or sold any item (other than tobacco products) or service which bears the brand name (alone or in conjunction with any other word), logo, symbol, motto, selling message, recognizable color or pattern of colors, or any other indicia of product identification similar or identifiable to those used for any brand of tobacco products.
(b) GIFTS, CONTESTS, AND LOTTERIES- No manufacturer, distributor, or retailer shall offer or cause to be offered to any person purchasing tobacco products any gift or item (other than a tobacco product) in consideration of the purchase of such products, or to any person in consideration of furnishing evidence, such as credits, proofs-of-purchase, or coupons, of such a purchase.
(1) IN GENERAL- No manufacturer, distributor, or retailer shall sponsor or cause to be sponsored any athletic, musical, artistic, or other social or cultural event, or any entry or team in any event, in which the brand name (alone or in conjunction with any other word), logo, motto, selling message, recognizable color or pattern of colors, or any other indicia of product identification similar or identical to those used for tobacco products is used.
(2) USE OF CORPORATE NAME- A manufacturer, distributor, or retailer may sponsor or cause to be sponsored any athletic, musical, artistic, or other social or cultural event in the name of the corporation which manufactures the tobacco product if--
(A) both the corporate name and the corporation were registered and in use in the United States prior to January 1, 1995; and
(B) the corporate name does not include any brand name (alone or in conjunction with any other word), logo, symbol, motto, selling message, recognizable color or pattern of colors, or any other indicia or product identification identical or similar to, or identifiable with, those used for any brand of tobacco products.
SEC. 106. USE OF PRODUCT DESCRIPTORS.
(a) IN GENERAL- With respect to a tobacco product, the label of which bears a product description (such as `light' or `low tar'), such label shall also contain, and any advertisement concerning such product shall contain, a mandatory disclaimer, to be established by the Secretary, that states that such product has not been shown to be less hazardous than another product of that type.
(b) RULE OF CONSTRUCTION- Nothing in this section shall be construed to limit the authority of the Food and Drug Administration with respect to words used as product descriptors.
Subtitle B--Warnings, Labeling and Packaging
SEC. 111. CIGARETTE WARNINGS.
(1) PACKAGING- 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 Nonsmokers.
WARNING: Quitting Smoking Now Greatly Reduces Serious Risks To Your Health.
(2) ADVERTISING- It shall be unlawful for any manufacturer or importer of cigarettes to advertise or cause to be advertised within the United States any cigarette unless the advertising bears, 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 Nonsmokers.
WARNING: Quitting Smoking Now Greatly Reduces Serious Risks To Your Health.
(b) REQUIREMENTS FOR LABELING-
(1) LOCATION- Each label statement required by paragraph (1) of subsection (a) shall be located on the upper portion of the front panel of the cigarette package (or carton) and occupy not less than 25 percent of such front panel.
(2) TYPE AND COLOR- With respect to each label statement required by paragraph (1) of subsection (a), the phrase `WARNING' shall appear in capital letters and the label statement shall be printed in 17 point type with adjustments as determined appropriate by the Commissioner to reflect the length of the required statement. All the letters in the label shall appear in conspicuous and legible type, in contrast by typography, layout, or color with
all other printed material on the package, and be printed in an alternating black-on-white and white-on-black format as determined appropriate by the Commissioner.
(3) EXCEPTION- The provisions of paragraph (1) shall not apply in the case of a flip-top cigarette package (offered for sale on the date of enactment of this Act) where the front portion of the flip-top does not comprise at least 25 percent of the front panel. In the case of such a package, the label statement required by paragraph (1) of subsection (a) shall occupy the entire front portion of the flip top.
(c) REQUIREMENTS FOR ADVERTISING-
(1) LOCATION- Each label statement required by paragraph (2) of subsection (a) shall occupy not less than 20 percent of the area of the advertisement involved.
(A) TYPE- With respect to each label statement required by paragraph (2) of subsection (a), the phrase `WARNING' shall appear in capital letters and the label statement shall be printed in the following types:
(i) With respect to whole page advertisements on broadsheet newspaper--45 point type.
(ii) With respect to half page advertisements on broadsheet newspaper--39 point type.
(iii) With respect to whole page advertisements on tabloid newspaper--39 point type.
(iv) With respect to half page advertisements on tabloid newspaper--27 point type.
(v) With respect to DPS magazine advertisements--31.5 point type.
(vi) With respect to whole page magazine advertisements--31.5 point type.
(vii) With respect to 28cm x 3 column advertisements--22.5 point type.
(viii) With respect to 20cm x 2 column advertisements--15 point type.
The Commissioner may revise the required type sizes as the Commissioner determines appropriate within the 20 percent requirement.
(B) COLOR- All the letters in the label under this paragraph shall appear in conspicuous and legible type, in contrast by typography, layout, or color with all other printed material on the package, and be printed in an alternating black-on-white and white-on-black format as determined appropriate by the Commissioner.
(d) ROTATION OF LABEL STATEMENTS-
(1) IN GENERAL- Except as provided in paragraph (2), the label statements specified in paragraphs (1) and (2) of subsection (a) shall be rotated by each manufacturer or importer of cigarettes quarterly in alternating sequence on packages of each brand of cigarettes manufactured by the manufacturer or importer and in the advertisements for each such brand of cigarettes in accordance with a plan submitted by the manufacturer or importer and approved by the Federal Trade Commission. The Federal Trade Commission shall approve a plan submitted by a manufacturer or importer of cigarettes which will provide the rotation required by this subsection and which assures that all of the labels required by paragraphs (1) and (2) will be displayed by the manufacturer or importer at the same time.
(2) APPLICATION OF OTHER ROTATION REQUIREMENTS-
(A) IN GENERAL- A manufacturer or importer of cigarettes may apply to the Federal Trade Commission to have the label rotation described in subparagraph (C) apply with respect to a brand style of cigarettes manufactured or imported by such manufacturer or importer if--
(i) the number of cigarettes of such brand style sold in the fiscal year of the manufacturer or importer preceding the submission of the application is less than 1/4 of 1 percent of all the cigarettes sold in the United States in such year; and
(ii) more than 1/2 of the cigarettes manufactured or imported by such manufacturer or importer for sale in the United States are packaged into brand styles which meet the requirements of clause (i).
If an application is approved by the Commission, the label rotation described in subparagraph (C) shall apply with respect to the applicant during the 1-year period beginning on the date of the application approval.
(B) PLAN- An applicant under subparagraph (A) shall include in its application a plan
under which the label statements specified in paragraph (1) of subsection (a) will be rotated by the applicant manufacturer or importer in accordance with the label rotation described in subparagraph (C).
(C) OTHER ROTATION REQUIREMENTS- Under the label rotation which the manufacturer or importer with an approved application may put into effect, each of the labels specified in paragraph (1) of subsection (a) shall appear on the packages of each brand style of cigarettes with respect to which the application was approved an equal number of times within the 12-month period beginning on the date of the approval by the Commission of the application.
(e) APPLICATION OF REQUIREMENT- Subsection (a) does not apply to a distributor, a retailer of cigarettes who does not manufacture, package, or import cigarettes for sale or distribution within the United States.
(f) TELEVISION AND RADIO ADVERTISING- It shall be unlawful to advertise cigarettes and little cigars on any medium of electronic communications subject to the jurisdiction of the Federal Communications Commission.
SEC. 112. SMOKELESS TOBACCO WARNINGS.
(1) PACKAGING- It shall be unlawful for any person to manufacture, package, or import for sale or distribution within the United States any smokeless tobacco product the package of which fails to bear, in accordance with the requirements of this section, one of the following labels:
WARNING: This Product May Cause Mouth Cancer.
WARNING: This Product May Cause Gum Disease And Tooth Loss.
WARNING: This Product Is Not A Safe Alternative To Cigarettes.
WARNING: Smokeless Tobacco Is Addictive.
(2) ADVERTISING- It shall be unlawful for any manufacturer or importer of smokeless tobacco products to advertise or cause to be advertised within the United States any smokeless tobacco product unless the advertising bears, in accordance with the requirements of this section, one of the following labels:
WARNING: This Product May Cause Mouth Cancer.
WARNING: This Product May Cause Gum Disease And Tooth Loss.
WARNING: This Product Is Not A Safe Alternative To Cigarettes.
WARNING: Smokeless Tobacco Is Addictive.
(b) REQUIREMENTS FOR LABELING-
(1) LOCATION- Each label statement required by paragraph (1) of subsection (a) shall be located on the principal display panel of the product and occupy not less than 25 percent of such panel.
(2) TYPE AND COLOR- With respect to each label statement required by paragraph (1) of subsection (a), the phrase `WARNING' shall appear in capital letters and the label statement shall be printed in 17 point type with adjustments as determined appropriate by the Commissioner to reflect the length of the required statement. All the letters in the label shall appear in conspicuous and legible type in contrast by typography, layout, or color with all other printed material on the package and be printed in an alternating black on white and white on black format as determined appropriate by the Commissioner.
(c) ADVERTISING AND ROTATION- The provisions of subsections (c) and (d)(1) of section 111 shall apply to advertisements for smokeless tobacco products and the rotation of the label statements required under subsection (a)(1) on such products.
(d) APPLICATION OF REQUIREMENT- Subsection (a) does not apply to a distributor or a retailer of smokeless tobacco products who does not manufacture, package, or import such products for sale or distribution within the United States.
(e) TELEVISION AND RADIO ADVERTISING- It shall be unlawful to advertise smokeless tobacco on any medium of electronic communications subject to the jurisdiction of the Federal Communications Commission.
SEC. 113. INGREDIENTS.
Each person who manufactures, packages, or imports cigarettes or smokeless tobacco products shall annually provide the Secretary with the information required under section 910 of the Federal Food, Drug, and Cosmetic Act (as added by section 143(3) of this Act).
SEC. 114. ENFORCEMENT, REGULATIONS, AND CONSTRUCTION.
(1) IN GENERAL- A violation of section 111 or 112 or the regulations promulgated pursuant to this subtitle shall be considered a violation of section 5 of the Federal Trade Commission Act.
(2) FINES- Any person who is found to violate any provision of sections 111, 112, or 113(a) shall be guilty of a misdemeanor and shall, on conviction thereof, be subject to a fine of not more than $10,000.
(b) INJUNCTIONS- The several district courts of the United States are vested with jurisdiction, for cause shown, to prevent and restrain violations of this subtitle upon the application of the Federal Trade Commission in the case of a violation of section 111 or 112 or upon application of the Attorney General of the United States acting through the several United States attorneys in their several districts in the case of a violation of section 113.
(c) REGULATIONS- Not later than 180 days after the date of the enactment of this Act, the Federal Trade Commission shall promulgate such regulations as it may require to implement sections 111 and 112.
(d) CONSTRUCTION- Nothing in this subtitle (other than the requirements of sections 111, 112, and 113) shall be construed to limit, restrict, or expand the authority of the Federal Trade Commission with respect to unfair or deceptive acts or practices in the advertising of cigarettes or smokeless tobacco products.
SEC. 115. PREEMPTION.
(a) FEDERAL ACTION- No statement relating to the use of cigarettes or smokeless tobacco products and health, other than the statements required by sections 111 or 112, shall be required by any Federal agency to appear on any package or in any advertisement of cigarettes or a smokeless tobacco product.
(b) STATE AND LOCAL ACTION- No statement relating to the use of cigarettes or smokeless tobacco products and health, other than the statements required by sections 111 and 112, shall be required by any State or local statute or regulation to be included on any package or in any advertisement of cigarettes or a smokeless tobacco product.
(c) EFFECT ON LIABILITY LAW- Except as otherwise provided in this Act, nothing in this subtitle shall relieve any person from liability at common law or under State statutory law to any other person.
SEC. 116. REPORTS.
(a) SECRETARY'S REPORT- Not later than 6 months after the date of enactment of this Act, and biennially thereafter, the Secretary shall prepare and submit to Congress a report containing--
(1) a description of the effects of health education efforts on the use of cigarettes and smokeless tobacco products;
(2) a description of the use by the public of cigarettes and smokeless tobacco products;
(3) an evaluation of the health effects of cigarettes and smokeless tobacco products and the identification of areas appropriate for further research; and
(4) such recommendations for legislation and administrative action as the Secretary considers appropriate.
(b) FTC REPORT- Not later than 6 months after the date of enactment of this Act, and biennially thereafter, the Federal Trade Commission shall prepare and submit to Congress a report containing--
(1) a description of the current sales, advertising, and marketing practices associated with cigarettes and smokeless tobacco products; and
(2) such recommendations for legislation and administrative action as the Commission deems appropriate.
SEC. 117. EXPORTS.
Packages of cigarettes or smokeless tobacco products manufactured, imported, or packaged--
(1) for export from the United States; or
(2) for delivery to a vessel or aircraft, as supplies, for consumption beyond the jurisdiction of the internal revenue laws of the United States;
shall be exempt from the requirements of this subtitle, but such exemptions shall not apply to cigarettes or smokeless tobacco products manufactured, imported, or packaged for sale or distribution to members or units of the Armed Forces of the United States located outside of the United States.
SEC. 118. REPEALS.
The following Acts are repealed:
(1) The Federal Cigarette Labeling and Advertising Act (15 U.S.C. 1331 et seq.).
(2) The Comprehensive Smokeless Tobacco Health Education Act of 1986 (15 U.S.C. 4401 et seq.).
Subtitle C--Restriction on Access to Tobacco Products
SEC. 121. REQUIREMENTS RELATING TO RETAILERS.
(a) SALES TO MINORS PROHIBITED- No retailer may distribute a tobacco product to any individual who is under 18 years of age.
(b) PHOTO IDENTIFICATION-
(1) REQUIREMENT- Except as provided in paragraph (2), each retailer shall verify, by means of
photographic identification containing the date of birth of the bearer, that no individual purchasing a tobacco product is under 18 years of age.
(2) EXCEPTION- No verification under paragraph (1) is required for any individual who is at least 27 years of age.
(3) LOCATION OF PRODUCTS- Except as provided in section 122(d), a retailer shall ensure that all tobacco products are located in areas where customers do not have access to the products.
(c) FACE-TO-FACE TRANSACTIONS- Except as provided in section 122(c)(1), a retailer may sell tobacco products only in a direct, face-to-face exchange without the assistance of any electronic or mechanical device.
(d) OUT-OF-PACKAGE DISTRIBUTION- No retailer may break or otherwise open a tobacco product to sell or distribute to individuals portions of such product (including individual cigarettes or a number of cigarettes that is smaller than the quantity in the minimum package size, or any quantity of cigarette tobacco or smokeless tobacco that is smaller than the smallest package distributed by the retailer for individual consumer use).
(e) RETAILER COMPLIANCE WITH RESPECT TO SELF-SERVICE- Each retailer shall ensure that all tobacco-related self-service displays, advertising, labeling, and other items that are located in the establishment of the retailer and that do not comply with the requirements of this title are removed or are brought into compliance with the requirements of this title.
SEC. 122. MANUFACTURE, SALE, AND DISTRIBUTION.
(a) MINIMUM CIGARETTE PACKAGE SIZE- Except as otherwise provided in this section, no manufacturer, distributor, or retailer may sell or cause to be sold, or distribute or cause to be distributed, any cigarette package that contains fewer than 20 cigarettes.
(b) PROHIBITION ON SAMPLING- No manufacturer, distributor, or retailer may distribute or cause to be distributed any free samples of any tobacco product.
(c) PROHIBITION ON DISTRIBUTION THROUGH SELF-SERVICE MODES OF SALE-
(1) VENDING MACHINES- No manufacturer, distributor, or retailer may distribute or cause to be distributed any tobacco product through a vending machine.
(2) OTHER DISPLAYS- Except as provided in subsection (d)(1)(B), no manufacturer, distributor, or retailer may distribute or cause to be distributed any tobacco product through a self-service display.
(d) PERMITTED SELF-SERVICE MODES OF SALE-
(1) IN GENERAL- Notwithstanding this subtitle, the following methods of distributing tobacco products are permitted:
(A) Mail-order sales as provided for in paragraph (2), except that mail-order redemption of coupons and the distribution of free samples through the mail shall be prohibited.
(B) Self-service displays that are located in facilities where the retailer ensures that no individuals under 18 years of age are present or permitted to enter at any time.
(A) IN GENERAL- A manufacturer, distributor, or retailer may distribute or cause to be distributed a tobacco product through mail-order sales only if such sales are subject to a procedure for verifying that no individual purchasing such products is under 18 years of age.
(B) REVIEW BY COMMISSIONER- Not later than 2 years after the date of enactment of this Act, the Commissioner shall review the verification procedures implemented under subparagraph (A) to determine whether individuals under 18 years of age are obtaining tobacco products through the mail. If the Commissioner determines that a significant number of underage individuals are obtaining such products through the mail, the Commissioner may promulgate regulations to ban the distribution of tobacco products through the mail.
Subtitle D--Licensing of Retail Tobacco Sellers
SEC. 131. ESTABLISHMENT OF PROGRAM.
(a) IN GENERAL- The Commissioner, after consultation with the Secretary, shall establish a program under which an entity would be required to obtain a State or local license to sell or otherwise distribute tobacco products directly to consumers.
(b) PROHIBITION ON DISTRIBUTION- No entity shall sell or otherwise distribute tobacco products directly to consumers unless such entity has in effect a tobacco license issued or renewed in accordance with the laws of the State in which the products are to be sold or otherwise distributed.
(c) ELIGIBILITY OF STATE FOR PAYMENTS- To be eligible to receive a block grant under section 502, a State shall have in effect laws that meet the standards described in this subtitle that provide for the licensing of entities engaged in the sale or distribution of tobacco products
directly to consumers and shall enforce such laws in accordance with section 133.
SEC. 132. REQUIREMENTS.
(a) LICENSURE AND NOTICE-
(1) IN GENERAL- The State shall require that each person engaged in the sale or distribution of tobacco products directly to consumers obtain a license that is issued by the State. A separate license shall be required for each place of business where tobacco products are distributed or sold at retail.
(2) NOTICE- The State shall notify every person in the State who is engaged in the distribution at retail of tobacco products of the license requirement of this section and of the date by which such person shall have obtained a license in order to distribute such products.
(b) FEE- The State may assess an annual licensing fee with respect to each entity that desires to obtain a license under subsection (a). Amounts derived from such fees shall be used to offset the administrative costs incurred by the State in issuing and renewing licenses under this subtitle.
(1) IN GENERAL- An entity shall prepare and submit to the State an application for a license (including the renewal of a license) under this section, on such form as the State may require, that shall set forth the name under which the applicant transacts or intends to transact business, the location of the place of business for which the license is to be issued, the street address to which all notices relevant to the license are to be sent (in this Act referred to as `notice address'), and any other identifying information that the State may require.
(A) IN GENERAL- The State shall issue or renew a license or deny an application for a license or the renewal of a license within 30 days of receiving a properly completed application and the licensing fee. The State shall provide notice to an applicant of an action on an application denying the issuance of a license or refusing to renew a license.
(B) FINDING BY STATE- The State shall deny the issuance or renewal of a license upon an application if the State determines that the applicant has failed to comply with the requirements of this title.
(3) SCOPE AND RENEWAL- Every license issued by the State shall be valid for a period determined by the State and shall be renewed upon application except as otherwise provided in this section.
SEC. 133. PENALTIES, REVOCATIONS AND SUSPENSIONS.
(1) CRIMINAL PENALTIES APPLICABLE TO UNLICENSED SELLERS- Any individual who sells or otherwise distributes tobacco products to a consumer without a tobacco license in effect as provided for in this subtitle shall be subject, under the applicable State law, to a fine of not less than $1,000, or imprisonment of not less than 6 months, or both. With respect to any corporate employer of such an individual, the corporation shall be subject to a fine of not more than $50,000.
(2) CIVIL PENALTIES APPLICABLE TO SELLERS IN VIOLATION OF LICENSE-
(A) IN GENERAL- In addition to any criminal penalties that may be imposed under paragraph (1), a State may, in accordance with subsection (b), impose civil penalties on any entity that has sold or distributed tobacco products in the State in violation of the State tobacco licensing laws.
(B) LIMITATIONS- The civil penalties that may be imposed under subparagraph (A) shall not exceed the following:
(i) For the first offense within any 2-year period, $500, or a 3-day suspension of the tobacco license, or both.
(ii) For a second offense within any 2-year period, $1,000, or a 7-day suspension of the tobacco license, or both.
(iii) For a third offense within any 2-year period, $2,000, or a 30-day suspension of the tobacco license, or both.
(iv) For a fourth offense within any 2-year period, $5,000, or a 6-month suspension of the tobacco license, or both.
(v) For a fifth offense within any 2-year period, $10,000, or a 1-year suspension of the tobacco license, or both.
(vi) For a sixth and any subsequent offense within any 2-year period, $25,000, or a 3-year revocation of the tobacco license.
(vii) For a tenth offense within any 2-year period, the permanent revocation of the tobacco license.
(b) REVOCATION AND SUSPENSIONS-
(1) NOTICE- Upon a finding that a tobacco licensee has been determined by a court of competent jurisdiction to have violated a provision of State law under this subtitle during the license term, the State shall notify the licensee in writing, served personally or by registered mail at the principal place of business of the licensee, that any subsequent violation of such law at the same place of business may result in an administrative action to suspend the license for a period determined by the State in accordance with subsection (a)(2)(B).
(2) SUSPENSION- Upon finding that a further violation by the tobacco licensee has occurred involving the same place of business for which the license was issued and the licensee has been provided notice under paragraph (1), the State may initiate an administrative action to suspend the license for a period to be determined in accordance with subsection (a)(2)(B). If an administrative action to suspend a license is initiated, the State shall immediately notify the licensee, in writing at the principal place of business of the licensee, of the initiation of the action and the reasons therefore and permit the licensee an opportunity, at least 30 days after written notice is served personally or by registered mail upon the licensee, to show why suspension of the license would be unwarranted or unjust.
(3) REVOCATION- The State may initiate an administrative action to revoke a tobacco license that previously has been suspended under paragraph (2) if, during the 2-year period described in subsection (a)(2)(B), a further violation of this subtitle is committed after the suspension by the licensee involving the same place of business for which the license was issued. If an administrative action to revoke a license is initiated, the State shall immediately notify the licensee, in writing at the principal place of business of the licensee, of the initiation of the action and the reasons therefore and permit the licensee an opportunity, at least 30 days after written notice is served personally or by registered mail upon the licensee, to show why revocation of the license would be unwarranted or unjust.
(c) JUDICIAL REVIEW- A tobacco licensee may seek judicial review of an action of the State suspending, revoking, denying, or refusing to renew a license under this section by filing a complaint in a court of competent jurisdiction. A complaint shall be filed within 30 days after the date on which notice of the action involved is received by the licensee. The court shall review the evidence de novo.
SEC. 134. FEDERAL LICENSING OF MILITARY AND OTHER ENTITIES.
(a) IN GENERAL- The Commissioner, in consultation with the Secretary of Defense, Secretary of State, and other appropriate Federal officials, shall establish and implement a Federal tobacco licensing program to be applied to entities that sell or distribute tobacco products--
(1) on any military installation (as defined in section 2801(c)(2) of title X, United States Code);
(2) in any United States embassy;
(3) in any facility owned and operated by the Federal Government either in the United States or in a foreign country;
(4) in any duty-free shop located within the United States; or
(5) through any other Federal entity or on any other Federal property as determined appropriate by the Commissioner.
(b) REQUIREMENTS OF PROGRAM- The program established under subsection (a) shall apply requirements (including those for penalties, suspensions, and revocations) similar to those required to be implemented by States under this subtitle.
(c) INDIAN TRIBES AND TRIBAL LANDS- For purposes of applying and enforcing the provisions of this subtitle to entities that sell or otherwise distribute tobacco products on Indian reservations (as defined in section 403(9) of the Indian Child Protection and Family Violence Prevention Act (25 U.S.C. 3202(9))), an Indian tribe or tribal organization (as such terms are defined in section 4 of the Indian Self Determination and Education Assistance Act (25 U.S.C. 450b)) shall be treated as a State.
Subtitle E--Regulation of Tobacco Product Development and Manufacturing
SEC. 141. REFERENCE.
Whenever in this subtitle an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.).
SEC. 142. TREATMENT OF TOBACCO PRODUCTS AS DRUGS.
(A) IN GENERAL- Section 201(g)(1) (21 U.S.C. 321(g)(1)) is amended by inserting
before the first period `; and (E) tobacco products'.
(B) EXCEPTION- Section 201(p) of such Act is amended in paragraphs (1) and (2) by striking `(except a new animal drug' and inserting `(except a tobacco product, a new animal drug,'.
(2) DEVICES- Section 201(h) (21 U.S.C. 321(h)) is amended by adding at the end the following: `Such term includes a tobacco product which shall be classified as a class II device.'.
(3) OTHER DEFINITIONS- Section 201 (21 U.S.C. 321) is amended by adding at the end thereof the following new paragraphs:
`(ii) TOBACCO ADDITIVE- The term `tobacco additive' means any substance the intended use of which results or may reasonably be expected to result, directly or indirectly, in the substance becoming a component of, or otherwise affecting the characteristics of, any tobacco product, including any substance that may have been removed from the tobacco product and then readded in the substance's original or modified form.
`(jj) TAR- The term `tar' means mainstream total articulate matter minus nicotine and water.
`(kk) TOBACCO PRODUCT- The term `tobacco product' has the meaning given such term in section 100(22) of the Universal Tobacco Settlement Act.'.
(b) ENFORCEMENT- Section 301 (21 U.S.C. 331) is amended by adding at the end thereof the following new subsection:
`(x) The manufacture, labeling, distribution, and sale of any adulterated or misbranded tobacco product in violation of--
`(1) regulations issued pursuant to section 903;
`(2) title I of the Universal Tobacco Settlement Act.'.
(c) ADULTERATED OR MISBRANDED PROVISIONS-
(1) ADULTERATION- Section 501 (21 U.S.C. 351) is amended by adding at the end the following:
`(j) If it is a tobacco product and it does not comply with the provisions of chapter IX.'.
(2) MISBRANDING- Section 502 (21 U.S.C. 352) is amended by adding at the end the following:
`(u) If it is a tobacco product and its labeling does not comply with the provisions of chapter IX and the provisions of title I of the Universal Tobacco Settlement Act.'.
(d) CLASSIFICATION OF TOBACCO PRODUCTS- Section 512(a)(1)(B) (21 U.S.C. 360c(a)(1)(B)) is amended by adding at the end the following: `For purposes of this Act, a tobacco product shall be classified as a class II device with performance standards applicable under chapter IX.'.
SEC. 143. HEALTH AND SAFETY REGULATION OF TOBACCO PRODUCTS.
The Act (21 U.S.C. 301 et seq.) is amended--
(1) by redesignating chapter IX as chapter X;
(2) by redesignating sections 901, 902, 903, 904, and 905 as sections 1001, 1002, 1003, 1004, and 1005, respectively; and
(3) by adding after chapter VIII the following new chapter:
`CHAPTER IX--TOBACCO PRODUCTS
`SEC. 901. DEFINITIONS.
`For purposes of this chapter and in addition to the definitions contained in section 201, the definitions under section 100 of the Universal Tobacco Settlement Act shall apply.
`SEC. 902. PURPOSE.
`It is the purpose of this chapter to impose a regulatory scheme applicable to the development and manufacturing of cigarettes and smokeless tobacco products/tobacco products. Such scheme shall include the approval of the ingredients used in such products and the imposition of standards to reduce the level of certain constituents contained in such products, including nicotine.
`SEC. 903. PROMULGATION OF REGULATIONS.
`The Commissioner shall promulgate regulations governing the misbranding, adulteration, and dispensing of tobacco products that are consistent with this chapter and with the manner in which other products that are ingested into the body are regulated under this Act, except that the Commissioner may not promulgate a regulation that prohibits the sale and distribution of a tobacco product solely on the basis of the fact that tobacco causes disease. Such regulations shall be promulgated not later than 6 months after the date of enactment of the Universal Tobacco Settlement Act.
`SEC. 904. MINIMUM REQUIREMENTS.
`(a) MISBRANDING- The regulations promulgated under section 903 shall at a minimum require that a tobacco product be deemed to be misbranded if the labeling of the package of such product is not in compliance with the provisions of this chapter, of other applicable provisions of this Act, or of sections 102(a), 103, 111, 112, and 113 (as applicable to the type of product involved) of the Universal Tobacco Settlement Act.
`(b) ADULTERATION- The regulations promulgated under section 903 shall at a minimum require that a
tobacco product be deemed to be adulterated if the Commissioner determines that any tobacco additive in such product, regardless of the amount of such tobacco additive, either by itself or in conjunction with any other tobacco additive or ingredient significantly increases the risk to human health or the risk of addiction to such product.
`SEC. 905. PERFORMANCE STANDARDS FOR TOBACCO PRODUCTS.
`(a) IN GENERAL- With respect to tobacco products, the special controls required by section 513(a)(1)(B) shall include performance standards for such products as established in accordance with this section.
`(b) REQUIREMENTS- A performance standard established under this section for a tobacco product--
`(1) shall include provisions to require the modification of the product to minimize the illness or injury that may result in consumers as a result of the use of such products, including the components of such products that produce dependence among such consumers; and
`(2) include, where appropriate--
`(A) provisions with respect to the construction, components, ingredients, and properties of the tobacco product;
`(B) provisions for the testing (on a sample basis or, if necessary, on an individual basis) of the tobacco product or, if it is determined that no other more practicable means are available to the Secretary to assure the conformity of the device to the standard, provisions for the testing (on a sample basis or, if necessary, on an individual basis) by the Secretary or by another person at the direction of the Secretary;
`(C) provisions for the measurement of the performance characteristics of the tobacco product;
`(D) provisions requiring that the results of each or of certain of the tests of the device required to be made under subparagraph (B) demonstrate that the tobacco product is in conformity with the portions of the standard for which the test or tests were required; and
`(E) a provision requiring that the sale and distribution of the device be restricted but only to the extent that the sale and distribution of a device may be otherwise restricted under this Act of title I of the Universal Tobacco Settlement Act.
`(c) EVALUATION- The Secretary shall provide for the periodic evaluation of a performance standard established under this section to determine if such standards should be changed to reflect new medical, scientific, or other technological data.
`(d) PROCEDURES- In carrying out this section, the Secretary shall, to the maximum extent practicable--
`(1) use personnel, facilities, and other technical support available in other Federal agencies;
`(2) consult with the Scientific Advisory Committee established under section 906 and other Federal agencies concerned with standard-setting and other nationally or internationally recognized standard-setting entities; and
`(3) 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 judgment of the Secretary can make a significant contribution.
`(1) IN GENERAL- The Secretary shall publish in the Federal Register a notice of proposed rulemaking for the establishment, amendment, or revocation of any performance standard under this section.
`(2) NOTICE REQUIREMENTS- A notice of proposed rulemaking for the establishment or amendment of a performance standard under this section shall--
`(A) set forth a finding with supporting justification that the performance standard is appropriate under subsection (b)(1) with respect to the product; and
`(B) invite interested persons to submit an existing performance standard for the product, including a draft or proposed performance standard, for consideration by the Secretary.
`(3) COMMENT PERIOD- The Secretary shall provide for a comment period of not less than 60 days.
`(4) APPLICABILITY OF SECTION 514- The provisions of paragraphs (3) and (4) of section 514(b) shall apply to the establishment, amendment, or revocation of any performance standard under this section, except that any reference to an advisory committee shall be deemed to be a reference to the Scientific Advisory Committee established under section 906.
`(f) NICOTINE- Except as provided in section 907, a performance standard established under this section may not require the elimination of nicotine from tobacco products.
`(g) LIMITATION- The Commissioner may not establish a performance standard under this section that has the effect of prohibiting the sale and distribution, to individuals who are at least 18 years of age, of traditional tobacco products in the basic form of the particular product as described in the definition of the particular product under section 100 of the Universal Tobacco Settlement Act.
`SEC. 906. SCIENTIFIC ADVISORY COMMITTEE.
`(a) ESTABLISHMENT- Not later than 1 year after the date of enactment of the Universal Tobacco Settlement Act, the Secretary shall establish an advisory committee, to be known as the `Scientific Advisory Committee', to assist the Secretary in establishing, amending, or revoking a performance standard under section 905.
`(b) MEMBERSHIP- The Secretary shall appoint as members of the Scientific Advisory Committee any individuals with expertise in the medical, scientific, or other technological data involving the manufacture and use of tobacco products, and of appropriately diversified professional backgrounds. The Secretary may not appoint to the Committee any individual who is in the regular full-time employ of the Federal Government. The Secretary shall designate one of the members of each advisory committee to serve as chairperson of the Committee. The Committee shall include as nonvoting members a representative of consumer interests and a representative of interests of the device manufacturing industry.
`(c) COMPENSATION AND EXPENSES-
`(1) COMPENSATION- Members of the Scientific Advisory Committee who are not officers or employees of the United States, while attending conferences or meetings of the Committee or otherwise serving at the request of the Secretary, shall be entitled to receive compensation at rates to be fixed by the Secretary, which rates may not exceed the daily equivalent of the rate of pay for level 4 of the Senior Executive Schedule under section 5382 of title 5, United States Code, for each day (including traveltime) they are so engaged.
`(2) EXPENSES- While conducting the business of the Scientific Advisory Committee away from their homes or regular places of business, each member may be allowed travel expenses, including per diem in lieu of subsistence, as authorized by section 5703 of title 5 of the United States Code for persons in the Government service employed intermittently.
`(d) DUTIES- The Scientific Advisory Committee shall--
`(1) assist the Secretary in establishing, amending, or revoking performance standards under section 905;
`(2) examine and determine the effects of the alteration of the nicotine yield levels in tobacco products;
`(3) examine and determine whether there is a threshold level below which nicotine yields do not produce dependence on the tobacco product involved, and, if so, determine what that level is; and
`(4) review other safety, dependence or health issues relating to tobacco products as determined appropriate by the Secretary.
`SEC. 907. REQUIREMENTS RELATING TO NICOTINE AND OTHER CONSTITUENTS.
`(a) GENERAL RULE- Except as provided in subsection (d), the Secretary, based on a finding under subsection (b), may adopt a performance standard under section 905 that requires the modification of a tobacco product in a manner that involves--
`(1) the gradual reduction of nicotine yields of the product; or
`(2) the reduction or elimination of other constituents or harmful components of the product.
`(1) IN GENERAL- A modification described in subsection (a) shall not be adopted unless the Secretary determines that the modification--
`(A) will result in a significant reduction in the health risks associated with the use of the tobacco product involved;
`(B) is technologically feasible; and
`(C) will not result in the creation of a significant demand for contraband products or other tobacco products that do not meet the performance standard that requires the modification.
`(2) CONTRABAND PRODUCTS- For purposes of paragraph (1)(C), the Secretary, in determining whether a significant demand for contraband products will be created, shall take into account--
`(A) the estimated number of dependent tobacco product users residing in the United States on the date on which the proposed modification is being considered;
`(B) the availability to such users, or lack thereof, of alternative products; and
`(C) any other factors determined appropriate by the Secretary.
`(3) SUBSTANTIAL EVIDENCE- A determination under paragraph (2) shall be based upon substantial evidence as demonstrated through an administrative record developed through formal rulemaking procedures as required under title 5, United States Code. Any such determination, and any determination by the Secretary with respect to a petition filed for an administrative review of the modification, shall be subject to judicial review in the United States District Court for the District of Columbia.
`(c) LIMITATION- Effective on the date that is 3 years after the date of enactment of the Universal Tobacco Settlement Act, and notwithstanding any performance standard established under this chapter, no cigarette or tobacco product shall be sold or otherwise distributed in the United States that exceeds a 12 milligram tar yield, as determined using the testing methodology used by the Federal Trade Commission on such date of enactment.
`(d) 12-YEAR PROHIBITION- During the 12-year period beginning on the date of enactment of the Universal Tobacco Settlement Act, the Secretary shall not adopt any performance standard under section 905 that requires the complete elimination of nicotine yields in a tobacco product.
`(e) ACTION AFTER PROHIBITION-
`(1) IN GENERAL- After the expiration of the 12-year period referred to in subsection (d), the Secretary may establish or amend any performance standard to completely eliminate nicotine yields in a tobacco product.
`(2) DETERMINATION- Any performance standard described in paragraph (1) shall not be adopted unless the Secretary determines that the standard--
`(A) will result in a significant overall reduction in the health risks associated with the use of the tobacco product involved by consumers, including individuals who continue to use tobacco products but use such products less often and individuals who stop using such products;
`(B) is technologically feasible; and
`(C) will not result in the creation of a significant demand for contraband products or other tobacco products that do not meet the performance standard.
`(3) HEALTH BENEFITS- In making a determination with respect to health risks under paragraph (2)(A), the Secretary shall consider--
`(A) the number of dependent tobacco users residing in the United States on the date on which the proposed performance standard is being considered;
`(B) the availability and demonstrated market acceptance of alternative products;
`(C) the effectiveness of tobacco product cessation techniques and devices on the market on the date on which the proposed performance standard is being considered; and
`(D) any other factors determined appropriate by the Secretary.
`(4) PREPONDERANCE OF THE EVIDENCE- A determination under paragraph (2) with respect to the elimination of nicotine, or an action that would have an effect comparable to the elimination of nicotine, shall be based upon a preponderance of the evidence as demonstrated, upon the request of a manufacturer, through a Part 12 hearing or notice and comment rulemaking as required under title 5, United States Code. Any such determination, and any determination by the Secretary with respect to a petition filed for an administrative review of the modification, shall be subject to judicial review in the United States District Court for the District of Columbia.
`(5) PHASE-IN- A performance standard described in paragraph (1) shall be implemented during a 2-year phase-in period beginning on the date on which all administrative or judicial action provided for under this chapter with respect to the standard is completed.
`(f) TOBACCO CONSTITUENTS- The Secretary shall promulgate regulations for the testing, reporting and disclosure of tobacco smoke constituents that the Secretary determines the public should be informed of to protect public health, including tar, nicotine, and carbon monoxide. Such regulations may require label and advertising disclosures relating to tar and nicotine.
`SEC. 908. REDUCED RISK PRODUCTS.
`(a) MISBRANDING- Except as provided in subsection (b), the regulations promulgated in accordance with section 904(a) shall require that a tobacco product be deemed to be misbranded if the labeling of the package of the product, or the claims of the manufacturer in connection with the product, can reasonably be interpreted by an objective consumer as stating or implying that the
product presents a reduced health risk as compared to other similar products.
`(1) IN GENERAL- Subsection (a) shall not apply to the labeling of a tobacco product, or the claims of the manufacturer in connection with the product, if--
`(A) the manufacturer, based on scientific evidence, demonstrates to the Commissioner that the product significantly reduces the risk to the health of the user as compared to other similar tobacco products; and
`(B) the Commissioner approves the specific claim that will be made a part of the labeling of the product, or the specific claims of the manufacturer in connection with the product.
`(2) REDUCTION IN HARM- The Commissioner shall promulgate regulations to permit the inclusion of scientifically-based specific health claims on the labeling of a tobacco product package, or the making of such claims by the manufacturer in connection with the product, where the Commissioner determines that the inclusion or making of such claims would reduce harm to consumers and otherwise promote public health.
`(c) DEVELOPMENT OF REDUCED RISK PRODUCT TECHNOLOGY-
`(1) NOTIFICATION OF COMMISSIONER- The manufacturer of a tobacco product shall provide written notice to the Commissioner upon the development or acquisition by the manufacturer of any technology that would reduce the risk of such products to the health of the user.
`(2) CONFIDENTIALITY- The Commissioner shall promulgate regulations to provide a manufacturer with appropriate confidentiality protections with respect to technology that is the subject of a notification under paragraph (1) that contains evidence that the technology involved is in the early developmental stages.
`(A) IN GENERAL- With respect to any technology developed or acquired under paragraph (1), the manufacturer shall permit the use of such technology by other manufacturers of tobacco products to which this chapter applies.
`(B) FEES- The Commissioner shall promulgate regulations to provide for the payment of a commercially reasonable fee by each manufacturer that uses the technology described under subparagraph (A) to the manufacturer that submits the notice under paragraph (1) for such technology. Such regulations shall contain procedures for the resolution of fee disputes between manufacturers under this subparagraph.
`(d) REQUIREMENT OF MANUFACTURE AND MARKETING-
`(1) PURPOSE- It is the purpose of this subsection to provide for a mechanism to ensure that tobacco products that are designed to be less hazardous to the health of users are developed, tested, and made available to consumers.
`(2) DETERMINATION- Upon a determination by the Commissioner that the manufacture of a tobacco product that is less hazardous to the health of users is technologically feasible, the Commissioner may, in accordance with this subsection, require that certain manufacturers of such products manufacture and market such less hazardous products.
`(A) REQUIREMENT- Except as provided in subparagraph (B), the requirement under paragraph (2) shall apply to any manufacturer that provides a notification to the Commissioner under subsection (c)(1) concerning the technology that is the subject of the determination of the Commissioner.
`(B) EXCEPTION- The requirement under subparagraph (A) shall not apply to a manufacturer if--
`(i) the manufacturer elects not to manufacture such products and provides notice to the Commissioner of such election; and
`(ii) the manufacturer agrees to provide the technology involved, for a commercially reasonable fee, to other manufacturers that enter into agreements to use such technology to manufacture and market tobacco products that are less hazardous to the health of users.
`(4) ACTION BY PUBLIC HEALTH SERVICE- If no manufacturer elects or agrees to manufacture and market tobacco products that are less hazardous to the health of users through the use of technology available pursuant to this subsection within a reasonable period of time, as determined appropriate by the Commissioner, the Commissioner, in consultation with the Secretary and acting through the Public
Health Service, shall, either directly or through grants or contracts, provide for the manufacture and marketing of such products.
`SEC. 909. GOOD MANUFACTURING PRACTICE STANDARDS.
`(1) IN GENERAL- The Secretary may, in accordance with paragraph (2), 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 ensure that such products will be in compliance with this chapter.
`(2) REQUIREMENTS PRIOR TO REGULATIONS- Prior to the Secretary promulgating any regulation under paragraph (1) the Secretary shall--
`(A) afford the Scientific Advisory Committee established under section 906 an opportunity (with a reasonable time period) to submit recommendations with respect to the regulations proposed to be promulgated; and
`(B) afford opportunity for an oral hearing.
`(b) MINIMUM REQUIREMENTS- The regulations promulgated under subsection (a) shall at a minimum require--
`(1) the implementation of a quality control system by the manufacturer of a tobacco product;
`(2) a process for the inspection of tobacco product material prior to the packaging of such product to be determined by the Commissioner;
`(3) procedures for the proper handling and storage of the packaged tobacco product;
`(4) after consultation with the Administrator of the Environmental Protection Agency, the development and adherence to applicable tolerances with respect to pesticide chemical residues in or on commodities used by the manufacturer in the manufacture of the finished tobacco product;
`(5) the inspection of facilities by officials of the Food and Drug Administration as otherwise provided for in this Act; and
`(6) record keeping and the reporting of certain information.
`(c) PETITIONS FOR EXEMPTIONS AND VARIANCES-
`(1) IN GENERAL- Any person subject to any requirement prescribed by regulations under subsection (a) may petition the Secretary for an 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--
`(A) 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 ensure that the device is in compliance with this chapter;
`(B) 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 product in lieu of the methods, facilities, and controls prescribed by the requirement; and
`(C) contain such other information as the Secretary shall prescribe.
`(2) SCIENTIFIC ADVISORY COMMITTEE- The Secretary may refer to the Scientific Advisory Committee established under section 906 any petition submitted under paragraph (1). The Scientific Advisory Committee shall report its recommendations to the Secretary with respect to a petition referred to it within 60 days of the date of the petition's referral. Within 60 days after--
`(A) the date the petition was submitted to the Secretary under paragraph (1); or
`(B) if the petition was referred to the Scientific Advisory Committee, the expiration of the 60-day period beginning on the date the petition was referred to such Committee;
whichever occurs later, the Secretary shall by order either deny the petition or approve it.
`(3) APPROVAL OF PETITION-
`(A) IN GENERAL- 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 product will comply 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 product in lieu of the methods, controls, and facilities prescribed by the requirement are sufficient to ensure that the product will comply with this chapter.
`(B) CONDITIONS- 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 ensure that the product will comply with this chapter.
`(4) INFORMAL HEARING- After the issuance of an order under paragraph (2) respecting a petition, the petitioner shall have an opportunity for an informal hearing on such order.
`(d) AGRICULTURAL PRODUCERS- The Secretary may not promulgate any regulation under this section that has the effect of placing regulatory burdens on tobacco producers (as such term is used for purposes of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1281 et seq.) and the Agricultural Act of 1949 (7 U.S.C. 1441 et seq.)) in excess of the regulatory burdens generally placed on other agricultural commodity producers.
`SEC. 910. DISCLOSURE AND REPORTING OF NONTOBACCO INGREDIENTS.
`(1) IN GENERAL- Each manufacturer of a tobacco product shall annually provide the Secretary with--
`(A) a list of all ingredients, substances, and compounds (other than tobacco, water or reconstituted tobacco sheet made wholly from tobacco) that are added to the tobacco (and the paper or filter of the product if applicable) in the manufacture of the tobacco product, for each brand of tobacco product so manufactured; and
`(B) a description of the quantity of the ingredients, substances, and compounds that are listed under subparagraph (A) with respect to each brand of tobacco product.
`(2) GENERAL DISCLOSURE OF SAFETY- With respect to each annual submission under paragraph (1) during the 5-year period beginning on the date of enactment of the Universal Tobacco Settlement Act, the manufacturer shall, for each ingredient, substance, or compound contained on the list of the manufacturer for the year involved, disclose whether the manufacturer has determined that the ingredient, substance, or compound would be exempt from public disclosure under this section.
`(1) REQUIREMENT- Not later than 5 years after the date of enactment of the Universal Tobacco Settlement Act, and annually thereafter, each manufacturer shall submit to the Secretary a safety assessment for each ingredient, substance, or compound that is listed under subsection (a)(1)(A) with respect to each brand of tobacco product manufactured by each such manufacturer.
`(2) BASIS OF ASSESSMENT- The safety assessment of an ingredient, substance, or compound described in paragraph (1) shall--
`(A) be based on the best scientific evidence available at the time of the submission of the assessment; and
`(B) result in a finding that there is a reasonable certainty in the minds of competent scientists that the ingredient, substance, or compound is not harmful in the quantities used under the intended conditions of use.
`(1) REGULATIONS- Not later than 12 months after the date of enactment of the Universal Tobacco Settlement Act, the Secretary shall promulgate regulations to prohibit the use of any ingredient, substance, or compound in the tobacco product of a manufacturer--
`(A) if no safety assessment has been submitted by the manufacturer for the ingredient, substance, or compound; or
`(B) if the Secretary disapproves of the safety of the ingredient, substance, or compound that was the subject of the assessment under paragraph (2).
`(2) REVIEW OF ASSESSMENTS-
`(A) GENERAL REVIEW- Not later than 90 days after the receipt of a safety assessment under subsection (b), the Secretary shall review the findings contained in such assessment.
`(B) APPROVAL OR DISAPPROVAL- Not later than 90 days after the completion of a review under subparagraph (A), the Secretary shall approve or disapprove of the safety of the
ingredient, substance, or compound that was the subject of the assessment and provide notice to the manufacturer of such action.
`(C) INACTION BY SECRETARY- If the Secretary fails to act with respect to an assessment during the 90-day period referred to in subparagraph (B), the safety of the ingredient, substance, or compound involved shall be deemed to be approved.
`(d) DISCLOSURE OF INGREDIENTS TO THE PUBLIC-
`(1) INITIAL DISCLOSURE- The regulations promulgated in accordance with section 904(a) shall, at a minimum, require that, during the 5-year period beginning on the date that is 6 months after the date of enactment of the Universal Tobacco Settlement Act, a tobacco product be deemed to be misbranded if the labeling of the package of such product does not disclose the ingredients of the product in accordance with the labeling provisions applicable to food ingredients under this Act.
`(2) DISCLOSURE OF ALL INGREDIENTS- The regulations referred to in paragraph (1) shall, at a minimum, require that, subsequent to the 5-year period referred to in such paragraph, a tobacco product be deemed to be misbranded if the labeling of the package of such product does not disclose all ingredients, substances, or compounds contained in the product in accordance with the labeling provisions applicable to food ingredients under this Act.
`(3) EXCEPTION- Notwithstanding paragraph (1), the Secretary may require that any ingredient, substance, or compound contained in a tobacco product that is otherwise exempt from disclosure be disclosed if the Secretary determines that such ingredient, substance, or compound is not safe as provided for in subsection (c).
`(e) CONFIDENTIALITY- Any information reported to or otherwise obtained by the Secretary under this section, and that is not required to be disclosed to the public under subsection (d), shall be exempt from disclosure pursuant to subsection (a) of section 552 of title 5, United States Code, by reason of subsection (b)(4) of such section, shall be considered confidential and shall not be disclosed and may not be used by the Secretary as the basis for the establishment or amendment of a performance standard under section 905, except that such information may be disclosed to other officers or employees concerned with carrying out this Act or when relevant in any proceeding under this Act.
`SEC. 911. NONAPPLICATION OF CERTAIN PROVISIONS.
`Sections 502(j), 516, 518, and 520(f) shall not apply to tobacco products to which this chapter applies.'.
Subtitle F--Compliance Plans and Corporate Culture
SEC. 151. COMPLIANCE PLANS.
(a) IN GENERAL- Not later than 1 year after the date of enactment of this Act, and annually thereafter, each manufacturer of a tobacco product shall prepare and submit to the Secretary a plan to ensure that the manufacturer complies with all applicable Federal, State, and local laws with respect to the manufacture and distribution of tobacco products.
(b) REQUIREMENTS- A compliance plan submitted under subsection (a) shall--
(1) contain the assurances of the manufacturer that tobacco products will only be manufactured and distributed in accordance with this Act and the amendments made by this Act;
(2) identify methods to achieve the goals of--
(A) reducing the access of individuals under 18 years of age to tobacco products; and
(B) reducing the incidence of the underage consumption of tobacco products;
(3) provide for the implementation of internal incentives for achieving the reductions described in paragraph (2);
(4) provide for the implementation of internal incentives for the development of tobacco products with a reduced health risk;
(5) contain a description of the compliance programs implemented under section 152 and the effectiveness of such programs; and
(6) contain such other information as the Secretary may require.
SEC. 152. COMPLIANCE PROGRAMS.
(a) IN GENERAL- Not later than 1 year after the date of enactment of this Act, each manufacturer of a tobacco product shall establish and implement one or more compliance programs designed to ensure the compliance of the manufacturer with Federal, State, and local laws that limit the access of individuals under 18 years of age to tobacco products.
(b) REQUIREMENTS- A compliance program established under subsection (a) shall--
(1) implement standards and procedures to be adhered to by employees and agents that are designed to reduce the incidence of violations of the laws described in subsection (a);
(2) provide for the assignment to 1 or more specific corporate executives of the overall responsibility for ensuring that the manufacturer complies with the standards and procedures applicable under this Act;
(3) ensure that due care is taken by the corporate executives designated under paragraph (2) to avoid delegating substantial discretionary authority to individuals who the executives know (or should have known through the exercise of due diligence) have a propensity to disregard corporate policy;
(4) include procedures to inform all employees and agents of the relevant standards and procedures applicable to the manufacturer and the tobacco products manufactured under this Act, including procedures for the implementation of training programs or the dissemination of informational materials;
(5) provide for the conduct of internal audits, and the establishment of hotlines and other measures to promote compliance with the laws described in subsection (a);
(6) provide for the application of appropriate disciplinary mechanisms and measures to employees who are directly or indirectly violating the laws described in subsection (a) or otherwise not complying with this Act;
(7) include measures to respond appropriately where violations of laws described in subsection (a) are alleged to have occurred or are occurring;
(8) include the promulgation of corporate policy statements that express and explain the commitment of the manufacturer to--
(A) compliance with applicable Federal, State, and local laws;
(B) reducing the use of tobacco products by individuals who are under 18 years of age; and
(C) developing tobacco products that pose a reduced risk to the health of the user;
(9) provide for the designation of a specific corporate executive to serve as the compliance officer to promote efforts to fulfill the commitment of the manufacturer;
(10) include provisions for compiling reports on compliance with this Act and the laws described in paragraph (1) and including those reports in materials provided to stockholders; and
(11) include any other measures determined appropriate by the Secretary.
(c) REPORTING OF NONCOMPLIANCE- Under the compliance program of a manufacturer, the manufacturer's employees shall be encouraged to report to the compliance officer any known or alleged violations of this Act (or an amendment made by this Act), including violations by distributors or retailers. The compliance officer shall furnish a copy of all such reports to the Secretary for reference to the appropriate Federal or State enforcement authority.
(d) RETAIL ESTABLISHMENTS- As part of the compliance program established under this section, a manufacturer shall carry out efforts to encourage and assist (including retail compliance checks and financial incentives) retailers of the tobacco products manufactured by the manufacturer in compliance with the Federal, State, and local laws described in subsection (a).
SEC. 153. WHISTLEBLOWER PROTECTIONS.
(a) PROHIBITION OF REPRISALS- An employee of any manufacturer, distributor, or retailer of a tobacco product may not be discharged, demoted, or otherwise discriminated against (with respect to compensation, terms, conditions, or privileges of employment) as a reprisal for disclosing to an employee of the Food and Drug Administration, the Department of Justice, or any State or local regulatory or enforcement authority, information relating to a substantial violation of law related to this Act (or an amendment made by this Act) or a State or local law enacted to further the purposes of this Act.
(b) ENFORCEMENT- Any employee or former employee who believes that such employee has been discharged, demoted, or otherwise discriminated against in violation of subsection (a) may file a civil action in the appropriate United States district court before the end of the 2-year period beginning on the date of such discharge, demotion, or discrimination.
(c) REMEDIES- If the district court determines that a violation has occurred, the court may order the manufacturer, distributor, or retailer involved to--
(1) reinstate the employee to the employee's former position;
(2) pay compensatory damages; or
(3) take other appropriate actions to remedy any past discrimination.
(d) LIMITATION- The protections of this section shall not apply to any employee who--
(1) deliberately causes or participates in the alleged violation of law or regulation; or
(2) knowingly or recklessly provides substantially false information to the Food and Drug
Administration, the Department of Justice, or any State or local regulatory or enforcement authority.
SEC. 154. PROVISIONS RELATING TO LOBBYING.
(a) DEFINITIONS- For purposes of this section, the terms `lobbying activities', `lobbying firm', and `lobbyist' have the meanings given such terms by section 3 of the Lobbying Disclosure Act of 1995 (2 U.S.C. 1602).
(b) GENERAL REQUIREMENT- A manufacturer, distributor, or retailer of a tobacco product shall require that any lobbyist or lobbying firm employed or retained by the manufacturer, distributor, or retailer, or any other individual who performs lobbying activities on behalf of the manufacturer, distributor, or retailer, as part of the employment or retainer agreement refrain from supporting or opposing any Federal or State legislation, or otherwise supporting or opposing any governmental action on any matter without the express consent of the manufacturer, distributor, or retailer.
(c) ADDITIONAL AGREEMENTS- An individual shall not be employed or retained to perform lobbying activities on behalf of a manufacturer, distributor, or retailer of a tobacco product unless such individual enters into a signed agreement with the manufacturer, distributor, or retailer that acknowledges that the individual--
(1) is fully aware of, and will fully comply with, all applicable laws and regulations relating to the manufacture and distribution of tobacco products;
(2) has reviewed and will fully comply with the requirements of this Act (and the amendments made by this Act);
(3) has reviewed and will fully comply with any consent decree entered into under title VI as that decree applies to the manufacturer, distributor, or retailer involved; and
(4) has reviewed and will fully comply with the business conduct policies and other applicable policies and commitments (including those relating to the prevention of underage tobacco use) of the manufacturer, distributor, or retailer involved.
SEC. 155. TERMINATION OF CERTAIN ENTITIES.
(a) REQUIREMENT- Not later than 90 days after the date of enactment of this Act, manufacturers, distributors, or retailers of tobacco products shall provide for the termination of the activities of the Tobacco Institute and the Council for Tobacco Research, U.S.A. and the Institute and Council shall be dissolved.
(b) ESTABLISHMENT OF OTHER ENTITIES-
(1) AUTHORITY- Manufacturers, distributors, or retailers of tobacco products may form or participate in any trade organization or other industry association only in accordance with this subsection.
(2) BOARD OF DIRECTORS- A trade organization or other industry association formed or participated in under this subsection shall--
(A) shall be administered by an independent board of directors, of which--
(i) during the 10-year period beginning on the date on which the organization or association is formed or first participated in under this subsection, not less than 20 percent (at least 1 member) shall be individuals who are not current or former directors, officers, or employees of an entity terminated under subsection (a) or of the members of the association or organization; and
(ii) during the life of the association or organization, no member shall be a director of any of the members of the association or organization;
(B) be administered by officers who are appointed by the board of directors and who are not otherwise employed by any of the members of the association or organization; and
(C) be provided with legal advice by a legal adviser who is appointed by the board of directors and who is not otherwise employed by any of the members of the association or organization.
(3) BY-LAWS- A trade organization or other industry association formed or participated in under this subsection shall adopt by-laws that--
(A) prohibit meetings by members of the association or organization who are competitors in the tobacco industry except under the sponsorship of the association or organization;
(B) require that every meeting of the board of directors, or a subcommittee of the board or other general committee, proceed under and strictly adhere to an agenda that is approved by the legal counsel and circulated in advance; and
(C) require the taking of minutes that describe the substance of any meeting of the members of the association or organization and the maintenance of such minutes in the records of the association or organization for a period of 5 years following the meeting.
(c) DEPARTMENT OF JUSTICE-
(1) OVERSIGHT- The Attorney General and, as appropriate, State antitrust authorities shall exercise oversight authority over any association or organization to which subsection (b) applies.
(2) ACCESS AND INSPECTION- During the 10-year period beginning on the date on which an association or organization to which subsection (b) applies is formed, the Attorney General and, as appropriate State antitrust authorities shall, upon the provision of reasonable notice to the legal counsel of the association or organization, have access to--
(A) all books, records, meeting agenda and minutes, and other documents maintained by the association or organization; and
(B) the directors, officers, and employees of the association or organization for interview purposes.
(3) MULTI-STATE COMMITTEE- Two or more States, acting through the attorney general of each such State, may establish a multi-State oversight committee to assist the Attorney General in exercising the oversight responsibilities under this section.
(4) CONFIDENTIALITY- The Attorney General shall promulgate regulations to provide that materials provided under paragraph (2) are protected with appropriate confidentiality protections.
(d) ANTITRUST EXEMPTIONS- The provisions of the Sherman Act (15 U.S.C. 1 et seq.), the Clayton Act (29 U.S.C. 52 et seq.), and any other Federal or State antitrust laws shall not apply to an association or organization to which subsection (b) applies.
SEC. 156. ENFORCEMENT.
(1) IN GENERAL- The Secretary may assess a civil penalty against any manufacturer of a tobacco product of up to $25,000 per day of violation whenever, on the basis of any available information, the Secretary finds that such manufacturer has violated or is violating any requirement of this subtitle.
(2) LIMITATION- The authority of the Secretary under this subsection shall be limited to matters where the total penalty sought does not exceed $200,000 and the first alleged date of violation occurred not more than 12 months prior to the initiation of the administrative action, except where the Secretary and the Attorney General jointly determine that a matter involving a larger penalty amount or longer period of violation is appropriate for action.
(3) JUDICIAL REVIEW- Any determination by the Administrator and the Attorney General under paragraph (2) shall not be subject to judicial review.
(1) IN GENERAL- A civil penalty under subsection (a) shall be assessed by the Secretary by an order made after an opportunity for a hearing on the record in accordance with sections 554 and 556 of title 5 of the United States Code. The Secretary shall issue reasonable rules for discovery and other procedures for hearings under this paragraph. Before issuing such an order, the Secretary shall give written notice to the manufacturer against whom the assessment is being made of the Secretary's proposal to issue such an order and provide such manufacturer with an opportunity to request such a hearing on the order, within 30 days of the date the notice is received by such manufacturer.
(2) MODIFICATIONS- The Secretary may compromise, modify, or remit, with or without conditions, any penalty which may be imposed under this section.
(c) FIELD CITATION PROGRAM-
(1) IMPLEMENTATION- The Secretary may provide for the implementation, after consultation with the Attorney General and the States, of a field citation program through regulations establishing appropriate minor violations of this subtitle for which field citations, assessing civil penalties not to exceed $5,000 per day of violation, may be issued by officers or employees designated by the Secretary.
(2) HEARING- Any manufacturer to which a field citation is assessed may, within a reasonable time as prescribed by the Secretary through regulation, elect to pay the penalty assessment or to request a hearing on the field citation. If a request for a hearing is not made within the time specified in the regulation, the penalty assessment in the field citation shall be final. Such hearing shall not be subject to section 554 or 556 of title 5 of the United States Code, but shall provide a reasonable opportunity to be heard and to present evidence.
(3) NO DEFENSE- Payment of a civil penalty required by a field citation under this paragraph shall not be a defense to further enforcement by the United States or a State to correct a violation, or to assess the statutory maximum penalty pursuant to other authorities in the subtitle, if the violation continues.
(1) RIGHT- Any manufacturer against whom a civil penalty is assessed under subsection (c) or to which a penalty order is issued under subsection (a) may seek review of such assessment in the United States District Court for the District of Columbia or for the district in which the violation is alleged to have occurred or in which the principal place of business of the manufacturer is located, by filing in such court within 30 days following the date the penalty order becomes final under subsection paragraph (b), the assessment becomes final under subsection (c), or a final decision following a hearing under subsection (c) is rendered, and by simultaneously sending a copy of the filing by certified mail to the Secretary and the Attorney General.
(2) FILING- Within 30 days after a filing under paragraph (1), the Secretary shall file in the court involved a certified copy, or certified index, as appropriate, of the record on which the penalty order or assessment was issued.
(3) ACTION BY COURT- A court shall not set aside or remand a penalty order or assessment under this section unless there is not substantial evidence in the record, taken as a whole, to support the finding of a violation or unless the order or penalty assessment constitutes an abuse of discretion.
(4) LIMITATION- A penalty order or assessment under this section shall not be subject to review by any court except as provided in this subsection. In any such proceedings, the United States may seek to recover civil penalties ordered or assessed under this section.
(1) IN GENERAL- If any manufacturer fails to pay an assessment of a civil penalty or fails to comply with an penalty order under this section--
(A) after the order or assessment has become final; or
(B) after a court, in an action brought under subsection (d), has entered a final judgment in favor of the Secretary;
the Secretary shall request the Attorney General to bring a civil action in an appropriate district court to enforce the order or to recover the amount ordered or assessed (plus interest at rates established pursuant to section 6621(a)(2) of the Internal Revenue Code of 1986 from the date of the final order or decision or the date of the final judgment, as the case may be). In such an action, the validity, amount, and appropriateness of such order or assessment shall not be subject to review.
(2) ENFORCEMENT EXPENSES- Any manufacturer who fails to pay on a timely basis a civil penalty ordered or assessed under this section shall be required to pay, in addition to such penalty and interest, the United States enforcement expenses, including attorneys fees and costs incurred by the United States for collection proceedings and a quarterly nonpayment penalty for each quarter during which such failure to pay persists. Such nonpayment penalty shall be 10 percent of the aggregate amount of such manufacturer's outstanding penalties and nonpayment penalties accrued as of the beginning of such quarter.
(f) Scarlet Letter Advertising-
TITLE II--REDUCTION IN UNDERAGE TOBACCO USE
SEC. 201. PURPOSE.
It is the purpose of this title to encourage the achievement of dramatic and immediate reductions in the number of underage consumers of tobacco products through the imposition of substantial financial surcharges on manufacturers if certain underage tobacco-use reduction targets are not met.
SEC. 202. DETERMINATION OF UNDERAGE USE BASE PERCENTAGES.
(a) CIGARETTES- For purposes of this section, the underage use base percentage for cigarettes shall be a percentage determined by the Secretary, weighted by the relative population of the age groups involved as determined using data compiled in 1995 by the Bureau of the Census, based on--
(1) the average of the percentages of 12th graders (individuals who are 16 or 17 years of age) who used cigarette products on a daily basis for each of the calendar years 1986 through 1996;
(2) the average of the percentages of 10th graders (individuals who are 14 or 15 years of age) who used cigarette products on a daily basis for each of the calendar years 1991 through 1996; and
(3) the average of the percentages of 8th graders (individuals who are 13 years of age) who used cigarette products on a daily basis for each of the calendar years 1991 through 1996.
(b) SMOKELESS TOBACCO- For purposes of this section, the underage use base percentage for smokeless tobacco products shall be a percentage determined by the Secretary, weighted by the relative population of the age groups involved as determined using data compiled in 1995 by the Bureau of the Census, based on--
(1) the average of the percentages of 12th graders (individuals who are 16 or 17 years of age) who used smokeless tobacco products on a daily basis in 1996;
(2) the average of the percentages of 10th graders (individuals who are 14 or 15 years of age) who used smokeless tobacco products on a daily basis in 1996; and
(3) the average of the percentages of 8th graders (individuals who are 13 years of age) who used smokeless tobacco products on a daily basis in 1996.
(c) USE OF CERTAIN DATA OR METHODOLOGY- For purposes of determining the percentages under paragraphs (1) through (3) of subsections (a) and (b), the Secretary shall use the data contained in the National High School Drug Use Survey entitled Monitoring the Future by the University of Michigan or such other comparable index, as determined appropriate by the Secretary after notice and an opportunity for a hearing, that utilizes methodology identical to that used by the University of Michigan in such survey.
SEC. 203. ANNUAL DAILY INCIDENCE OF UNDERAGE USE OF TOBACCO PRODUCTS.
(a) ANNUAL DETERMINATION- Not later than the expiration of the 5-year period beginning on the date of enactment of this Act, and annually thereafter, the Secretary shall determine the average annual incidence of the daily use of tobacco products by individuals who are under 18 years of age.
(b) CIGARETTES- With respect to cigarette products, a determination under subsection (a) for a year shall be based on the percentage, as weighted by the relative population of the age groups involved as determined using data compiled in 1995 by the Bureau of the Census, of--
(1) 12th graders (individuals who are 16 or 17 years of age) who used cigarette products on a daily basis during the year involved;
(2) 10th graders (individuals who are 14 or 15 years of age) who used cigarette products on a daily basis during the year involved; and
(3) 8th graders (individuals who are 13 years of age) who used cigarette products on a daily basis during the year involved.
(c) SMOKELESS TOBACCO- With respect to smokeless tobacco products, a determination under subsection (a) for a year shall be based on the percentage, as weighted by the relative population of the age groups involved as determined using data compiled in 1995 by the Bureau of the Census, of--
(1) 12th graders (individuals who are 16 or 17 years of age) who used smokeless tobacco products on a daily basis during the year involved;
(2) 10th graders (individuals who are 14 or 15 years of age) who used smokeless tobacco products on a daily basis during the year involved; and
(3) 8th graders (individuals who are 13 years of age) who used cigarette smokeless tobacco on a daily basis during the year involved.
(d) USE OF CERTAIN DATA OR METHODOLOGY-
(1) IN GENERAL- For purposes of determining the percentages under paragraphs (1) through (3) of subsections (b) and (c), the Secretary shall use the data contained in the National High School Drug Use Survey entitled Monitoring the Future by the University of Michigan (if such survey is still being undertaken) or such other comparable index, as determined appropriate by the Secretary after notice and an opportunity for a hearing, that utilizes methodology identical to that used by the University of Michigan in such survey.
(2) ALTERATION OF METHODOLOGY- If the Secretary determines that the methodology used by the University of Michigan in the survey referred to in paragraph (1) has been altered in a material manner from the methodology used during the period from 1986 to 1996 (including by altering States or regions on which the survey is based), the Secretary, after notice and an opportunity for a hearing, shall use percentages based on an index developed by the Secretary that utilizes methodology identical to that used by the University of Michigan in such survey.
SEC. 204. REQUIRED REDUCTION IN UNDERAGE TOBACCO USE.
(a) IN GENERAL- For purposes of assessing surcharges under section 205, the Secretary shall determine whether the required percentage reduction in the underage use of tobacco products for a year (based on the tables contained in subsection (b)) has been achieved for the year involved. Such determination shall be based on--
(1) with respect to cigarette products, the average annual incidence of the daily use of tobacco products by individuals who are under 18 years of age for the year involved (as determined under section 203(b)) as compared to the underage use base percentage for cigarette products (as determined under section 202(a)); and
(2) with respect to smokeless tobacco products, the average annual incidence of the daily use of smokeless tobacco products by individuals who are
under 18 years of age for the year involved (as determined under section 203(c)) as compared to the underage use base percentage for smokeless tobacco products (as determined under section 202(b)).
(b) PERCENTAGE REDUCTION IN UNDERAGE USE OF TOBACCO PRODUCTS- For purposes of subsection (a), the required percentage reduction in the underage use of tobacco products with respect to each tobacco product shall be determined according to the following tables:
`Calender year after enactment--
The percentage decrease in the use of cigarette products--
Fifth
30
Sixth
30
Seventh
50
Eighth
50
Ninth
50
Tenth and thereafter
60.
(2) SMOKELESS TOBACCO PRODUCTS-
`Calender year after enactment--
The percentage decrease in the use of smokeless tobacco products--
Fifth
25
Sixth
25
Seventh
35
Eighth
35
Ninth
35
Tenth and thereafter
45.
SEC. 205. APPLICATION OF SURCHARGES.
(a) IN GENERAL- If the Secretary determines that the percentage reduction in the underage use of tobacco products for a year has not been achieved as required under section 204, the Secretary shall impose a surcharge on the manufacturers of the tobacco products involved.
(1) IN GENERAL- The amount of any surcharge to be imposed under this section for a calendar year shall be equal to the product of--
(B) the number of applicable surcharge percentage points as determined under subsection (c).
(2) ADJUSTMENTS- The amount applicable under paragraph (1) shall be annually adjusted by the Secretary based on--
(A) with respect to subparagraph (A) of such paragraph--
(i) the proportional percentage increase or decrease, as compared to calendar year 1995, in the population of individuals residing in the United States who are at least 13 years of age but less than 18 years of age;
(ii) the proportional percentage increase or decrease, as compared to calendar year 1996, in the average profit per unit (measured in cents and weighted by annual sales) earned by tobacco manufacturers for the tobacco product involved (as determined by the Secretary through a contract with a nationally recognized accounting firm having no connection to tobacco manufacturers); and
(B) any methodology utilized to avoid the double counting of underage individuals whose tobacco use has previously resulted in the imposition of a surcharge, limited to the extent that there were not other underage users of tobacco in such previous years for whom a surcharge was not paid because of the limitation contained in section 206.
(3) PROFIT PER UNIT- For purposes of paragraph (2)(A)(ii), the average profit per unit for calendar 1996 shall be determined using the operating profit reported by manufacturers to the Securities and Exchange Commission.
(c) DETERMINATION OF APPLICABLE SURCHARGE PERCENTAGE POINTS-
(1) IN GENERAL- Except as provided in paragraph (2), with respect to a calendar year, the applicable surcharge percentage points shall be equal to the percentage point difference between--
(A) the required percentage reduction in the underage use of the tobacco product involved for the year (based on the tables in section 204(b)); and
(B) the number of percentage points by which the average annual incidence of the daily use of the tobacco products involved by individuals who are under 18 years of age for the year (as determined under section 203) is less than the underage use base percentage for such products (as determined under section 202).
(2) ADJUSTMENT- If for any calendar year the Secretary determines that the average annual incidence of the daily use of the tobacco products involved by individuals who are under 18 years of age (as determined under section 203) is greater than the underage use base percentage for such products (as determined under section 202), the applicable surcharge percentage point shall be equal to--
(A) the percentage point amount determined under paragraph (1)(A); and
(B) the number of percentage points by which the average annual incidence of the daily use of the tobacco products involved by individuals who are under 18 years of age (as determined under section 203) is greater than the
underage use base percentage for such products (as determined under section 202).
(3) TYPE OF PRODUCT- Separate determinations shall be made under this section for cigarette products and smokeless tobacco products.
(d) LIMITATION- The total amount of surcharges imposed with respect to each type of tobacco product (cigarette products or smokeless tobacco products) under this section shall not exceed $2,000,000,000 (adjusted each year by the Secretary to account for inflation) for any calendar year.
(e) JOINT AND SEVERAL OBLIGATION- Any surcharge imposed under this section with respect to a tobacco product (cigarette products or smokeless tobacco products) shall be the joint and several obligation of all manufacturers of such product as allocated by the market share of each such manufacturer with respect to such product. The market share of each manufacturer for each such product shall be based on the actual Federal excise tax payments made by such manufacturers for each such product under the Internal Revenue Code of 1986.
(f) ASSESSMENT- Not later than May 1 of each year in which a surcharge will be imposed under this section, the Secretary shall assess to each manufacturer the amount for which such manufacturer is obligated. Not later than July 1 of any year in which a manufacturer receives an assessment under this section, the manufacturer shall pay such assessment in full or be subject to such interest on such amount as the Secretary may by regulation prescribe.
(g) USE OF AMOUNTS- Amounts received under this section shall be used as provided for in section 517.
(h) PROHIBITION- No stay or other injunctive relief may be granted by the Secretary or any court that has the effect of enjoining the imposition and collection of the surcharges to be applied under this section.
SEC. 206. ABATEMENT PROCEDURES.
(a) PETITIONS- Upon payment by a manufacturer of the amount assessed to the manufacturer under section 205(f), the manufacturer may submit a petition to the Secretary for an abatement of the assessment. A notice of such abatement petition shall be submitted to the attorney general of each State.
(b) HEARING- The Secretary shall provide for the conduct of a hearing on an abatement petition received under subsection (a) pursuant to the procedures described in sections 554, 556, and 557 of title 5, United States Code. The attorney general of any State shall be permitted to be heard at any hearing conducted under this subsection.
(c) BURDEN- The burden at any hearing under subsection (b) shall be on the manufacturer to prove, by a preponderance of the evidence, that the manufacturer should be granted the abatement.
(d) BASIS OF DECISION- Any decision regarding a petition for an abatement under this section shall be based on a determination as to whether--
(1) the manufacturer has acted in good faith and in full compliance with this Act (and any amendment made by this Act) and any regulations or State or local laws promulgated in furtherance of this Act;
(2) the manufacturer has pursued all reasonably available measures to attain the reductions;
(3) there is any evidence of any direct or indirect action by the manufacturer to undermine the achievement of the reductions required under section 204 or to undermine any other provision of this Act (or amendment); and
(4) the manufacturer has taken (or failed to take) any other action as determined appropriate by the Secretary.
(e) AMOUNT- Upon a determination granting an abatement under this section, the Secretary shall order the abatement of not to exceed 75 percent of the amount paid by the manufacturer, together with interest that may have accrued on such amount during the period between the date on which payment by the manufacturer was made and the date on which the abatement order was granted. Such interest shall be equal to that provided for the average 52-week Treasury Bill during the period involved.
(f) AGGRIEVED PARTIES- Any manufacturer or attorney general of any State that is aggrieved by an abatement that is granted under this section may seek judicial review of the abatement decision within 30 days of the date of such decision in the Court of Appeals for the District of Columbia Circuit. Review in such cases shall be subject to the procedures described in sections 701 through 706 of title 5, United States Code.
(g) PROHIBITION- A manufacturer may not file a petition under subsection (a) until such time as the manufacturer has fully paid the Secretary the amount assessed to the manufacturer under section 205(f).
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