[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 1238 Introduced in Senate (IS)]







105th CONGRESS
  1st Session
                                S. 1238

  To amend section 1926 of the Public Health Service Act to encourage 
States to strengthen their efforts to prevent the sale and distribution 
 of tobacco products to individuals under the age of 18 and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 30, 1997

Mr. Smith of Oregon introduced the following bill; which was read twice 
       and referred to the Committee on Labor and Human Resources

_______________________________________________________________________

                                 A BILL


 
  To amend section 1926 of the Public Health Service Act to encourage 
States to strengthen their efforts to prevent the sale and distribution 
 of tobacco products to individuals under the age of 18 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.

    This Act may be cited as the ``Tobacco Use by Minors Deterrence Act 
of 1997''.

SEC. 2. AMENDMENT TO SECTION 1926 OF THE PUBLIC HEALTH SERVICE ACT.

    Section 1926 of the Public Health Service Act (42 U.S.C. 300x-26) 
is amended to read as follows:

``SEC. 1926. STATE LAWS REGARDING SALE OF TOBACCO PRODUCTS TO 
              INDIVIDUALS UNDER THE AGE OF 18.

    ``(a) Model Law.--
            ``(1) In general.--Subject to paragraph (2), for fiscal 
        year 1998 and each subsequent fiscal year, the Secretary shall 
        reduce, as provided in subsection (d), the amount of any grant 
        under section 1921 that does not have in effect a law with the 
        following provisions:

`SECTION 1. DISTRIBUTION TO MINORS.

    `(a) In General.--No person shall distribute a tobacco product to 
an individual under 18 years of age. A person who violates this 
subsection is liable for--
            `(1) a civil money penalty of $25 for the first violation 
        of this subsection;
            `(2) a civil money penalty of $50 for a second violation of 
        this subsection; and
            `(3) a civil money penalty of $150 for a third and 
        subsequent violation of this subsection.
    `(b) Employers.--The employer of an employee who has violated 
subsection (a) more than once while in the employ of the employer is 
liable for a civil money penalty of $150 for each violation by such 
employee. An employer who pays a civil money penalty under this 
subsection shall not, for purposes of section 10, be considered as 
having violated this Act.
    `(b) Defenses.--It shall be a defense to a charge brought under 
subsection (a) that--
            `(1) the defendant--
                    `(A) relied upon proof of age that appeared on its 
                face to be valid, or
                    `(B) had complied with the requirements of section 
                7, or
            `(2) the individual to whom the tobacco product was 
        distributed was at the time of the distribution employed in 
        violation of section 8(b).
    ``(c) Enforcement.--A person who violates subsection (a) shall not 
be liable for a civil money penalty unless the individual who received 
the tobacco product is proceeded against under section 2(a), except 
that such a person shall be liable for such penalty if such individual 
was not proceeded against because such individual was testing 
compliance with this Act under section 8(b).

`SEC. 2. PURCHASE, RECEIPT, OR POSSESSION BY MINORS PROHIBITED.

    `(a) In General.--An individual under 18 years of age shall not 
purchase or attempt to purchase, receive or attempt to receive, possess 
or attempt to possess, smoke or attempt to smoke, or otherwise use or 
consume or attempt to use or consume a tobacco product in a public 
place. An individual who violates this subsection is liable for a civil 
money penalty of not less than $25 and not more than $150 for each 
violation and shall be subject to suspension of the individual's 
authorization to operate a motor vehicle. Upon the second or subsequent 
violation of this subsection, the authorization of such individual to 
operate a motor vehicle shall be suspended for a period of not less 
than 30 days and such individual shall be required to perform community 
service.
    `(b) Notice.--A law enforcement agency, upon determining that an 
individual under 18 years of age allegedly purchased, received, 
possessed, smoked, or otherwise used or attempted to purchase, receive, 
possess, smoke, or otherwise use, a tobacco product in violation of 
subsection (a) shall notify the individual's parent or parents, 
custodian, or guardian as to the nature of the violation if the name 
and address of a parent, guardian, or custodian is reasonably 
ascertainable by the law enforcement agency. The notice required by 
this subsection shall be made not later than 48 hours after the 
individual who allegedly violated subsection (a) is cited by such 
agency for the violation. The notice may be made by any means 
reasonably calculated to give prompt actual notice, including notice in 
person, by telephone, or by first-class mail.
    `(c) Employment.--Subsection (a) does not prohibit an individual 
under the age of 18 from possessing a tobacco product during regular 
working hours and in the course of such individual's employment if the 
tobacco product is not possessed for such individual's consumption.

`SEC. 3. SIGNAGE.

    `It shall be unlawful for any person who sells tobacco products 
over-the-counter to fail to post conspicuously a sign communicating 
that--
            `(1) the sale of tobacco products to individuals under the 
        age of 18 is prohibited by law,
            `(2) the purchase of tobacco products by individuals under 
        the age of 18 is prohibited by law, and
            `(3) proof of age may be demanded.
A person who fails to post a sign in violation of this section is 
liable for a civil money penalty of $150 for each violation.

`SEC. 4. SAMPLING.

    `It shall be unlawful for any person to distribute tobacco product 
samples in any face-to-face transaction without first procuring, from 
any prospective purchaser or recipient who appears to be under the age 
of 18, proof of age establishing that such prospective purchaser or 
recipient is 18 years of age or older. A person who violates this 
section is liable for a civil money penalty of $150 for each violation. 
This section does not apply to distributions of tobacco products in an 
area or establishment that individuals under the age of 18 are not 
permitted to enter.

`SEC. 5. OUT-OF-PACKAGE DISTRIBUTION.

    `It shall be unlawful for any person to distribute cigarettes or 
smokeless tobacco products other than in an unopened package 
originating with the manufacturer that bears the health warning 
required by Federal law. A person who distributes a cigarette or 
smokeless tobacco product in violation of this section is liable for a 
civil money penalty of $150 for each violation.

`SEC. 6. DISPLAYS.

    `(a) General Rule.--It shall be unlawful for any person who sells 
tobacco products to maintain packages of such products in any display 
or storage configuration which affords customers direct access to such 
packages.
    `(b) Penalty.--Any person who violates subsection (a) is liable for 
a civil money penalty of $150 for each violation.

`SEC. 7. NOTIFICATION OF EMPLOYEES.

    `(a) Notice to Employees.--Within 180 days of the effective date of 
this Act, every person engaged in the business of distributing tobacco 
products at retail shall implement a program to notify each employee 
employed by that person who distributes tobacco products that this 
Act--
            `(1) prohibits the distribution of tobacco products to any 
        individual under 18 years of age and the purchase, receipt, 
        possession, smoking, or other use or consumption of tobacco 
        products by any individual under 18 years of age,
            `(2) prohibits out-of-package distribution of cigarettes 
        and smokeless tobacco products, and
            `(3) permits a defense to a charge of distribution of a 
        tobacco product to an individual under 18 years of age based on 
        evidence that the defendant relied upon proof of age that 
        appeared on its face to be valid.
Any employer failing to provide the required notice to any employee 
shall be liable for a civil money penalty of $150 for each violation.
    `(b) Statement.--It shall be a defense to a charge that an employer 
violated subsection (a) of this section that the employee acknowledged 
receipt, either in writing or by electronic means, of a statement in 
substantially the following form:
        ``I understand that State law prohibits the distribution of 
        tobacco products to individuals under 18 years of age and out-
        of-package distribution of cigarettes and smokeless tobacco 
        products and permits a defense based on evidence that a 
        prospective purchaser's proof of age was reasonably relied upon 
        and appeared on its face to be valid. I understand that if I 
        sell, give, or voluntarily provide tobacco products to an 
        individual under the age of 18, I may be found responsible for 
        a civil money penalty of $150 for each violation. I promise to 
        comply with this law.''
    `(c) Vicarious Liability.--If an employer is charged with a 
violation of subsection (a) and the employer uses as a defense to such 
charge the defense provided by subsection (b), the employer shall be 
deemed to be liable for such violation if such employer pays the 
penalty imposed on the employee involved in such violation or in any 
way reimburses the employee for such penalty.

`SEC. 8. RANDOM UNANNOUNCED INSPECTIONS; REPORTING; AND COMPLIANCE.

    `(a) Enforcement and Inspection.--The State Police of a State, or 
such local law enforcement authority duly designated by the State 
Police, shall enforce this Act in a manner that can reasonably be 
expected to reduce the extent to which tobacco products are distributed 
to individuals under 18 years of age and shall conduct random, 
unannounced inspections in accordance with the procedures set forth in 
this Act and in regulations issued under section 1926 of the Public 
Health Service Act (42 U.S.C. 300x-26) to ensure compliance with this 
Act.
    `(b) Use of Individuals Under 18.--The State may engage an 
individual under 18 years of age to test compliance with this Act, 
except that such an individual may be used to test compliance with this 
Act only if the testing is conducted under the following conditions:
            `(1) Prior to use of any individual under the age of 18 
        years in a random, unannounced inspection, written consent 
        shall be obtained from such individual's parents or legal 
        guardian.
            `(2) An individual under 18 years of age shall act solely 
        under the supervision and direction of the State during a 
        random, unannounced inspection.
            `(3) An individual under 18 years of age used in random, 
        unannounced inspections shall not be used in any such 
        inspection at a store in which such individual is a regular 
        customer.
            `(4) If an individual under 18 years of age participating 
        in random, unannounced inspections is questioned about such 
        individual's age, such person shall state such individual's 
        actual age and shall present a true and correct proof of age if 
        requested at any time during the inspection to present it.
    `(c) Penalty.--Any person who uses any person under 18 years of 
age, other than as permitted by subsection (b), to test compliance with 
this Act, is liable for a civil money penalty of $150 for each 
violation.
    `(d) Use of Penalty Money and Fees.--Civil money penalties 
collected for violations of this Act and fees collected under section 9 
may only be used to defray the costs of administration and enforcement 
of this Act.

`SEC. 9. LICENSURE.

    `(a) In General.--The State shall require that each person engaged 
in the distribution of tobacco products hold a license issued under 
this section. A separate license shall be required for each place of 
business where tobacco products are distributed at retail. A license 
issued under this section is not assignable and is valid only for the 
person in whose name it is issued and for the place of business 
designated in the license.
    `(b) Fee.--The annual license fee is $50 for each place of business 
where tobacco products are distributed at retail.
    `(c) Application.--Every application for a license, including 
renewal of a license, under this section shall be made upon a form 
provided by the State and 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.
    `(d) Action on License.--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 license 
fee. The State shall provide notice to an applicant of action on an 
application denying the issuance of a license or refusing to renew a 
license.
    `(e) Scope and Renewal.--Every license issued by the State shall be 
valid for 1 year from the date of issuance and shall be renewed upon 
application except as otherwise provided in this Act.
    `(f) Change of Address.--Upon notification of a change of address 
for a place of business for which a license has been issued, a license 
shall be reissued for the new address without the filing of a new 
application.
    `(g) 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 should have obtained a license.
    `(h) Penalty.--
            `(1) In general.--Any person who engages in the 
        distribution at retail of tobacco products without a license 
        required by this section is liable for a civil money penalty in 
        an amount equal to two times the applicable license fee and $50 
        for each day on which such distribution continues without a 
        license.
            `(2) Suspension or revocation.--Any person who engages in 
        the distribution at retail of tobacco products after a license 
        issued under this section has been suspended or revoked is 
        liable for a civil money penalty of $100 per day for each day 
        on which such distribution continues after the date such person 
        received notice of such suspension or revocation.
    `(i) Term.--The term of a license shall be 1 year.
    `(j) Effective Date.--No person shall engage in the distribution at 
retail of tobacco products on or after 180 days after the date of 
enactment of this Act unless the person is authorized to do so by a 
license issued pursuant to this section or is an employee or agent of a 
person who has been issued such a license.

`SEC. 10. SUSPENSION, REVOCATION, DENIAL, AND NONRENEWAL OF LICENSES.

    `(a) Notice.--Upon a finding that a licensee has been determined by 
a court of competent jurisdiction to have violated this Act during the 
license term, the State shall notify the licensee in writing, served 
personally or by registered mail at the notice address, that any 
subsequent violation of this Act at the same place of business may 
result in an administrative action to suspend the license for a period 
determined by the State.
    `(b) Suspension.--Upon finding that a further violation by the 
licensee has occurred involving the same place of business for which 
the license was issued and the licensee has been provided notice under 
subsection (a), the State may initiate an administrative action to 
suspend the license for a period to be determined by the State. If an 
administrative action to suspend a license is initiated, the State 
shall immediately notify the licensee in writing at the notice address 
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.
    `(c) Revocation.--The State may initiate an administrative action 
to revoke a license that previously has been suspended under subsection 
(b) if, during the one year period in which the license was issued, a 
further violation of this Act 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 
notice address 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.
    `(d) Other Violations.--No action with respect to any license at a 
place of business may be taken based on a violation that occurred 
subsequent to the occurrence of another violation unless such other 
violation is fully adjudicated at the time the subsequent violation 
occurred.
    `(e) Fee.--A person whose license has been suspended or revoked 
with respect to a place of business pursuant to this section shall pay 
the State a fee of $50 for the renewal or reissuance of the license at 
that same place of business.
    `(f) Effect on Application for New License.--Revocation of a 
license under subsection (c) with respect to a place of business shall 
not be grounds to deny an application by that person for a new license 
with respect to that place of business for more than 12 months 
subsequent to the date of such revocation. Revocation or suspension of 
a license with respect to a particular place of business shall not be 
the grounds to deny an application for a new license, to refuse to 
renew a license, or to revoke or suspend an existing license at another 
place of business.
    `(g) Judicial Review.--A 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 is received by the licensee. The 
court shall review the evidence de novo.
    `(h) Report.--The State shall not report any action suspending, 
revoking, denying, or refusing to renew a license under this section to 
the Secretary of Health and Human Services, unless judicial review, if 
any, of the action has been completed.

`SEC. 11. PREEMPTION.

    `(a) In General.--The provisions of this Act shall not preempt any 
provisions of State or local law that provide greater restrictions than 
those required in this Act.
    `(b) Food and Drug Administration.--Nothing in this Act shall be 
construed to prohibit the Food and Drug Administration from regulating 
tobacco as a drug.

`SEC. 12. SEVERABILITY.

    `If any provision of this Act or its application to any person or 
circumstance is held invalid, such holding shall not affect other 
provisions or applications of this Act that can be given effect without 
the invalid application.

`SEC. 13. NO PRIVATE RIGHT OF ACTION.

    `Nothing in this Act shall be construed to create a right of action 
by any private person for any violation of any provision of this Act.

`SEC. 14. JURISDICTION AND VENUE.

    `Any action alleging a violation of this Act may only be brought in 
a court of general jurisdiction in the city or county where the 
violation is alleged to have occurred.

`SEC. 15. REPORT.

    `The State shall prepare for submission annually to the Secretary 
of Health and Human Services the report required by section 1926 of the 
Public Health Service Act (42 U.S.C. 300x-26) and otherwise shall be 
responsible for the State's reporting of compliance with that section 
and any implementing regulations promulgated by the Secretary.

`SEC. 16. DEFINITIONS.

    `For purposes of this Act:
            `(1) Direct access.--The term ``direct access'' means the 
        ability of a customer to obtain physically a package of tobacco 
        products without the intervention of an employee of the 
        establishment.
            `(2) Package.--The term ``package'' means a pack, box, 
        carton, pouch, or container of any kind in which cigarettes or 
        smokeless tobacco products are offered for sale, sold, or 
        otherwise distributed to consumers.
            `(3) Proof of age.--The term ``proof of age'' means a 
        driver's license or other form of identification issued by a 
        governmental authority or other identification that includes a 
        photograph and the date of birth of the individual.
            `(4) Sample.--The term ``sample'' means a tobacco product 
        distributed to members of the public at no cost for the purpose 
        of promoting the product, but excludes tobacco products 
        distributed--
                    `(A) in conjunction with the sale of other tobacco 
                products,
                    `(B) to consumer or market research panels,
                    `(C) to persons employed in the trade, or
                    `(D) to customers or consumers in response to 
                customer or consumer complaints.
            `(5) Tobacco product.--The term ``tobacco product'' means--
                    `(A) ``tobacco products'' as defined in section 
                5702 of the Internal Revenue Code of 1986, or
                    `(B) any other product containing tobacco as a 
                principal ingredient which, because of its appearance, 
                type, or tobacco used in the product, or its packaging 
                and labeling, is likely to be offered to, or purchased 
                by, consumers as a tobacco product as described in 
                subparagraph (A).'.
            ``(2) Delayed applicability for certain states.--In the 
        case of a State whose legislature does not convene a regular 
        session in fiscal year 1998, the requirement described in 
        paragraph (1) as a condition of avoiding a reduction in a grant 
        under section 1921 shall apply only for fiscal year 1999 and 
        subsequent fiscal years.
    ``(b) Enforcement.--
            ``(1) In general.--For the first applicable fiscal year and 
        for each subsequent fiscal year, a funding agreement for a 
        grant under section 1921 of the Public Health Service Act is a 
        funding agreement under which the State involved will--
                    ``(A) enforce the law described in subsection 
                (a)(1) systematically and conscientiously and in a 
                manner that can reasonably be expected to reduce the 
                extent to which tobacco products are available to 
                individuals under the age of 18; and
                    ``(B) certify that it requires such enforcement of 
                such law to be treated as a priority by State and local 
                law enforcement authorities.
            ``(2) Activities and reports regarding enforcement.--For 
        the first applicable fiscal year and for each subsequent fiscal 
        year, a funding agreement for a grant under section 1921 is a 
        funding agreement under which the State involved will--
                    ``(A) conduct random, unannounced inspections to 
                ensure compliance with the law described in subsection 
                (a)(1); and
                    ``(B) annually submit to the Secretary a report 
                describing--
                            ``(i) the activities carried out by the 
                        State to enforce such law during the fiscal 
                        year preceding the fiscal year for which the 
                        State is seeking the grant;
                            ``(ii) the steps taken by the State to 
                        ensure that enforcement of such law was treated 
                        as a priority by State and local law 
                        enforcement authorities;
                            ``(iii) the extent of success the State has 
                        achieved in reducing the availability of 
                        tobacco products to individuals under the age 
                        of 18, including the results of the inspections 
                        conducted under subparagraph (A); and
                            ``(iv) the strategies to be utilized by the 
                        State for enforcing such law during the fiscal 
                        year for which the grant is sought.
    ``(c) Funding.--The law specified in subsection (a)(1) may be 
administered and enforced by a State using--
            ``(1) any amounts made available to the State through a 
        grant under section 1921;
            ``(2) any amounts made available to the State under section 
        1901 (42 U.S.C. 300w);
            ``(3) any fees collected for licenses issued pursuant to 
        the law described in subsection (a)(1);
            ``(4) any fines or penalties assessed for violations of the 
        law specified in subsection (a)(1); or
            ``(5) any other funding source that the legislature of the 
        State may prescribe by statute.
    ``(d) Noncompliance of State.--Before making a grant under section 
1921 to a State for the first applicable fiscal year or any subsequent 
fiscal year, the Secretary shall make a determination whether the State 
has maintained compliance with subsections (a) and (b). If, after 
notice to the State and an opportunity for a hearing, the Secretary 
determines that the State is not in compliance with such subsections, 
the Secretary shall reduce the amount of the allotment under such 
section for the State for the fiscal year involved by an amount equal 
to--
            ``(1) in the case of the first applicable fiscal year, 10 
        percent of the amount determined under section 1933 for the 
        State for the fiscal year;
            ``(2) in the case of the first fiscal year following such 
        applicable fiscal year, 20 percent of the amount determined 
        under section 1933 for the State for the fiscal year;
            ``(3) in the case of the second such fiscal year, 30 
        percent of the amount determined under section 1933 for the 
        State for the fiscal year; and
            ``(4) in the case of the third such fiscal year or any 
        subsequent fiscal year, 40 percent of the amount determined 
        under section 1933 for the State for the fiscal year.
    ``(e) Definition.--For purposes of this section, the term `first 
applicable fiscal year' means--
            ``(1) fiscal year 1999, in the case of any State described 
        in subsection (a)(2); and
            ``(2) fiscal year 1998, in the case of any other State.
    ``(f) Application.--For purposes of this section, references to 
section 1921 shall include any successor grant programs.''.

SEC. 3. EFFECTIVE DATE.

    This Act and the amendments made by this Act shall take effect on 
January 1, 1999.
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