Everything For Everybody Concerned About Smoking
and Protecting the Rights of Nonsmokers
The McCain Comprehensive Tobacco Bill, S. 1414 [long download]
Calendar No. 286
105th CONGRESS
1st Session
S. 1414
_______________________________________________________________________
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.
_______________________________________________________________________
November 8, 1997
Read the second time and placed on the calendar
Calendar No. 286
105th CONGRESS
1st Session
S. 1414
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 the first time
November 8, 1997
Read the second time and placed on the calendar
_______________________________________________________________________
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.
Sec. 2. Findings.
Sec. 3. Purposes.
TITLE I--REGULATION OF THE TOBACCO INDUSTRY
Sec. 100. Definitions.
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. 113. Ingredients.
Sec. 114. Enforcement, regulations, and construction.
Sec. 115. Preemption.
Sec. 116. Reports.
Sec. 117. Exports.
Sec. 118. Repeals.
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. 132. Requirements.
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. 141. Reference.
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.
Sec. 156. Enforcement.
TITLE II--REDUCTION IN UNDERAGE TOBACCO USE
Sec. 201. Purpose.
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. 301. Definitions.
Sec. 302. Smoke-free environment policy.
Sec. 303. Citizen actions.
Sec. 304. Preemption.
Sec. 305. Regulations.
Sec. 306. Effective date.
TITLE IV--NATIONAL TOBACCO SETTLEMENT TRUST FUND
Sec. 401. Establishment of Trust Fund.
Sec. 402. Liability of industry sources.
Sec. 403. Enforcement.
TITLE V--PUBLIC HEALTH AND OTHER PROGRAMS
Subtitle A--Public Health Block Grant Program
Sec. 501. Public Health Trust Fund.
Sec. 502. Block grants to States.
Sec. 503. Allotments.
Sec. 504. Use of funds.
Sec. 505. Withholding of funds.
Subtitle B--Other Programs
Sec. 511. National Smoking Cessation Program.
Sec. 512. National Reduction in Tobacco Usage Program.
Sec. 513. National Tobacco-Free Public Education Program.
Sec. 514. National Event Sponsorship Program.
Sec. 515. National Community Action Program.
Sec. 516. National Cessation Research Program.
Sec. 517. Use of surcharge payments.
TITLE VI--CONSENT DECREES, NON-PARTICIPATING MANUFACTURERS, AND STATE
ENFORCEMENT
Sec. 601. Purposes.
Subtitle A--Consent Decrees and Non-Participating Manufacturers
Sec. 611. Consent decrees.
Sec. 612. National tobacco control protocol.
Sec. 613. Non-participating manufacturers.
Subtitle B--State Enforcement
Sec. 621. Requirement of no sale to minors law.
Sec. 622. State reporting.
Sec. 623. Reduction in State payments.
TITLE VII--PROVISIONS RELATING TO TOBACCO-RELATED CIVIL ACTIONS
Sec. 701. General immunity.
Sec. 702. Civil liability for past conduct.
Sec. 703. Civil liability for future conduct.
Sec. 704. Non-participating manufacturers.
TITLE VIII--PUBLIC DISCLOSURE OF HEALTH RESEARCH
Sec. 801. Purpose.
Sec. 802. National Tobacco Document Depository.
TITLE IX--ASSISTANCE TO TOBACCO GROWERS AND COMMUNITIES
Sec. 901. Short title.
Sec. 902. Definitions.
Subtitle A--Tobacco Community Revitalization Trust Fund
Sec. 911. Establishment of Trust Fund.
Sec. 912. Contributions by tobacco product manufacturers and importers.
Subtitle B--Agricultural Market Transition Assistance
Sec. 921. Payments for lost tobacco quota.
Sec. 922. Industry payments for all Department costs associated with
tobacco production.
Sec. 923. Tobacco community economic development grants.
Sec. 924. Modifications in Federal tobacco programs.
Subtitle C--Farmer and Worker Transition Assistance
Sec. 931. Tobacco worker transition program.
Sec. 932. Farmer opportunity grants.
Subtitle D--Immunity
Sec. 941. General immunity for tobacco producers and warehousers.
TITLE X--EFFECTIVE DATES AND OTHER PROVISIONS
Sec. 1001. Effective dates.
Sec. 1002. Native Americans.
Sec. 1003. Preemption.
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.
In this Act:
(1) Brand.--The term ``brand'' means a variety of a tobacco
product distinguished by the tobacco used, tar content,
nicotine content, flavoring used, size, filtration, or
packaging.
(2) Cigar.--The term ``cigar'' means any roll of tobacco
wrapped in leaf tobacco or in any substance containing tobacco
(other than any roll of tobacco which is a cigarette or
cigarillo within the meaning of paragraph (3) or (4)).
(3) Cigarette.--The term ``cigarette'' means 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
C<INF>10</INF>H<INF>14</INF>N<INF>2</INF>, 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 arragenment 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.
(4) Limitations.--
(A) In general.--A point of sale advertisement
permitted under this subsection shall be comprised of a
display area than 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).
(b) Use Statements.--
(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.
(c) Sponsorship.--
(1) In general.--No manufacturer, distributor, or retailer
shall sponsor or cause to be sponsored any athletic, musical,
artistic, or other social or cultural event, or any entry or
team in any event, in which the brand name (alone or in
conjunction with any other word), logo, motto, selling message,
recognizable color or pattern of colors, or any other indicia
of product identification similar or identical to those used
for tobacco products is used.
(2) Use of corporate name.--A manufacturer, distributor, or
retailer may sponsor or cause to be sponsored any athletic,
musical, artistic, or other social or cultural event in the
name of the corporation which manufactures the tobacco product
if--
(A) both the corporate name and the corporation
were registered and in use in the United States prior
to January 1, 1995; and
(B) the corporate name does not include any brand
name (alone or in conjunction with any other word),
logo, symbol, motto, selling message, recognizable
color or pattern of colors, or any other indicia or
product identification identical or similar to, or
identifiable with, those used for any brand of tobacco
products.
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.
(a) In General.--
(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.
(2) Type and color.--
(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.
(a) In General.--
(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.
(a) Enforcement.--
(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.
(2) Mail-order sales.--
(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.
(c) Application.--
(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.
(2) Action by state.--
(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.
(a) Penalties.--
(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) Definitions.--
(1) Drug.--
(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.
``(e) Procedures.--
``(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 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.
``(b) Required Finding.--
``(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 in
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.
``(b) Exception.--
``(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.
``(3) Licensing.--
``(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.
``(3) Manufacturer.--
``(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.
``(a) Authority.--
``(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.
``(a) Annual Submission.--
``(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.
``(b) Safety Assessments.--
``(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.
``(c) Prohibition.--
``(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.
(a) Assessment.--
(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.
(b) Procedure.--
(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.
(d) Judicial Review.--
(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.
(e) Failure To Pay.--
(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