[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 1638 Introduced in Senate (IS)]







105th CONGRESS
  2d Session
                                S. 1638

   To help parents keep their children from starting to use tobacco 
products, to expose the tobacco industry's past misconduct and to stop 
 the tobacco industry from targeting children, to eliminate or greatly 
reduce the illegal use of tobacco products by children, to improve the 
public health by reducing the overall use of tobacco products, and for 
                            other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           February 12, 1998

Mr. Conrad (for himself, Mr. Daschle, Mr. Kennedy, Mr. Lautenberg, Mr. 
 Reed, Mr. Leahy, Mr. Dodd, Mr. Bingaman, Mr. Durbin, Mr. Baucus, Mr. 
  Dorgan, Mr. Rockefeller, Mr. Kerrey, Mr. Wyden, Mr. Wellstone, Mr. 
   Torricelli, Mrs. Boxer, Mr. Kerry, Mr. Bumpers, Mr. Moynihan, Mr. 
  Johnson, Mr. Breaux, Mr. Kohl, Ms. Landrieu, Ms. Moseley-Braun, Mr. 
  Bryan, Mr. Akaka, and Mr. Lieberman) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
   To help parents keep their children from starting to use tobacco 
products, to expose the tobacco industry's past misconduct and to stop 
 the tobacco industry from targeting children, to eliminate or greatly 
reduce the illegal use of tobacco products by children, to improve the 
public health by reducing the overall use of tobacco products, 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 ``Healthy Kids 
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.
Sec. 4. Definitions.
                    TITLE I--HEALTHY KIDS TRUST FUND

                     Subtitle A--General Provisions

Sec. 101. Establishment of Trust Fund.
Sec. 102. Liability of tobacco product manufacturers.
Sec. 103. Licensing of manufacturers.
Sec. 104. Enforcement.
                          Subtitle B--Payments

                          Chapter 1--To States

Sec. 111. Payments to States.
                   Chapter 2--Federal Health Programs

Sec. 121. National Institutes of Health Trust Fund for Health Research.
                  Chapter 3--Investments For Children

Sec. 131. Improving child care and early childhood development.
Sec. 132. Improving elementary education.
Sec. 133. Increased enrollment of children with the medicaid and State 
                            children's health insurance programs.
Sec. 134. Medicare cancer patient demonstration project; evaluation and 
                            report to Congress.
            TITLE II--FDA JURISDICTION OVER TOBACCO PRODUCTS

Sec. 201. Reference.
Sec. 202. Statement of general authority.
Sec. 203. Treatment of tobacco products as drugs and devices.
Sec. 204. Safety and efficacy standard and recall authority.
Sec. 205. General health and safety regulation of tobacco products.
                    ``Subchapter F--Tobacco Products

        ``Sec. 571. Promulgation of regulations.
        ``Sec. 572. Scientific Advisory Committee.
        ``Sec. 573. Performance standards.
        ``Sec. 574. Disclosure and reporting of tobacco and nontobacco 
                            ingredients and constituents.
        ``Sec. 575. Tobacco product warnings, labeling and packaging.
        ``Sec. 576. Preservation of State and local authority.
        ``Sec. 577. Restrictions on youth access to tobacco products.
        ``Sec. 578. Public disclosure of health research.
        ``Sec. 579. Citizen suits.
        ``Sec. 580. Agricultural producers.
        ``Sec. 581. Authority of Secretary.
Sec. 206. Repeals.
Sec. 207. Authority of Federal Trade Commission.
  TITLE III--YOUTH SMOKING REDUCTION TARGETS AND INCENTIVES TO REDUCE 
                          YOUTH SMOKING RATES

Sec. 301. Purpose.
Sec. 302. Child tobacco use surveys.
Sec. 303. Reduction in underage tobacco product usage.
Sec. 304. Noncompliance.
Sec. 305. Rulemaking procedures.
Sec. 306. Miscellaneous provisions.
              TITLE IV--TOBACCO TRANSITION ASSISTANCE FUND

Sec. 401. Tobacco transition assistance fund.
   TITLE V--STANDARDS TO REDUCE INVOLUNTARY EXPOSURE TO TOBACCO SMOKE

Sec. 501. Standards to reduce involuntary exposure to tobacco smoke.
               TITLE VI--PUBLIC HEALTH AND OTHER PROGRAMS

                     Subtitle A--Research Programs

Sec. 601. Tobacco-related research.
Sec. 602. Research relating to patterns of smoking.
Sec. 603. Surveillance and evaluation.
             Subtitle B--Education and Prevention Programs

Sec. 611. Grants for school- and community-based tobacco danger 
                            education programs.
                   Subtitle C--Miscellaneous Programs

Sec. 621. Counter-advertising programs.
Sec. 622. National Tobacco Cessation Program.
Sec. 623. Assistance for those suffering from tobacco-related 
                            illnesses.
Sec. 624. International tobacco control.
Sec. 625. National Event Sponsorship Program.
Sec. 626. Programs to reduce alcohol and illicit drug use by minors.
  TITLE VII--LIABILITY PROTECTION; CONSENT DECREES; NATIONAL PROTOCOL

           Subtitle A--Liability Protection and Attorney Fees

Sec. 701. Dismissal of and limitations on civil actions.
Sec. 702. Attorney's fees and expenses.
                      Subtitle B--Consent Decrees

Sec. 711. Consent decrees.
Sec. 712. Non-participating manufacturers.
             Subtitle C--National Tobacco Control Protocol

                        Chapter 1--Establishment

Sec. 721. National Tobacco Control Protocol.
                    Chapter 2--Terms And Conditions

Sec. 725. Application of chapter.
Sec. 726. Agreement to prohibit certain advertising.
Sec. 727. Consensual restrictions.
Sec. 728. Agreement on format and content requirements for labeling and 
                            advertising.
Sec. 729. Agreement to ban on nontobacco items and services, contests 
                            and games of chance, and sponsorship of 
                            events.
                         Chapter 3--Enforcement

Sec. 731. Federal enforcement of the protocol.
Sec. 732. State enforcement of the protocol.
Sec. 733. Private enforcement of protocol.
                  TITLE VIII--MISCELLANEOUS PROVISIONS

Sec. 801. Prohibition on use of funds to facilitate the exportation or 
                            promotion of tobacco.
Sec. 802. Whistleblower protections.
Sec. 803. Prohibitions relating to tobacco products and children.
Sec. 804. Preservation of State and local authority.
Sec. 805. Severability.
           TITLE IX--PROVISIONS RELATING TO NATIVE AMERICANS

Sec. 901. Provisions relating to Native Americans.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) Approximately 3,000 children begin smoking each day. 
        1,000 of these children will die prematurely from a tobacco-
        related illness or condition.
            (2) The tobacco industry has targeted tobacco product 
        marketing and promotional efforts toward children as a source 
of replacement smokers. The industry has also targeted minorities.
            (3) Approximately 90 percent of smokers start by the time 
        they are 18 years old. Half of all smokers start by age 14.
            (4) Although most children plan to quit smoking after 
        experimenting, the vast majority find that they have become 
        addicted and cannot quit.
            (5) Seventy percent of adult smokers would like to quit 
        smoking, but the tobacco industry has manipulated the level of 
        nicotine in tobacco products and added ingredients to enhance 
        the addictive effects of nicotine to ensure that users of these 
        products remain addicted.
            (6) Tobacco products cause cancer, heart disease, lung 
        disease, and other fatal illnesses. More than 400,000 Americans 
        die each year of these tobacco-related illnesses and 
        conditions.
            (7) Tobacco-related illnesses, medical conditions resulting 
        from tobacco use, and lost wages and productivity cost the 
        United States in excess of $100,000,000,000 annually.
            (8) Federal and State taxpayers have spent and will 
        continue to spend tens of billions of dollars annually paying 
        for the medicare, medicaid, and other Federal and State health 
        program costs arising from tobacco-related illnesses and 
        conditions.
            (9) The tobacco industry has systematically invoked and 
        abused the attorney-client privilege to hide its attempts to 
        mislead the American public about the health risks associated 
        with tobacco use, its manipulation of nicotine levels, and its 
        efforts to lure underage users and minorities to its products.
            (10) Nicotine is an addictive drug. The marketplace for 
        tobacco products is largely based on addiction.
            (11) Worldwide, smoking kills 3,000,000 people each year. 
        If current smoking patterns continue, tobacco use will kill 
        10,000,000 people a year by 2025.
            (12) Environmental tobacco smoke is responsible for 3,000 
        lung cancer deaths annually in American nonsmokers. 
        Environmental tobacco smoke also harms children's health.
            (13) In 1995, the tobacco industry spent close to 
        $4,900,000,000 to attract new users, retain current users, 
        increase current consumption, and generate favorable long-term 
        attitudes toward smoking and tobacco use.
            (14) Tobacco product advertising misleadingly portrays the 
        use of tobacco as socially acceptable and healthful.
            (15) Tobacco product advertising is regularly seen by 
        persons under the age of 18, and persons under the age of 18 
        are regularly exposed to tobacco product promotional efforts.
            (16) Through advertisements during and sponsorship of 
        sporting events, tobacco has become strongly associated with 
        sports and has become portrayed as an integral part of sports 
        and the healthy lifestyle associated with rigorous sporting 
        activity.
            (17) Children are exposed to substantial and unavoidable 
        tobacco advertising, that leads to favorable beliefs about 
        tobacco use, plays a role in leading young people to 
        overestimate the prevalence of tobacco use, and increases the 
        number of young people who begin to use tobacco.
            (18) Tobacco advertising increases the size of the tobacco 
        market by increasing consumption of tobacco products including 
        increasing tobacco sales to young people.
            (19) Children are more influenced by tobacco advertising 
        than adults. They smoke the most advertised brands, and 
        children as young as 3 to 6 can recognize a character 
        associated with smoking at the same rate that they recognize 
        cartoons and fast food characters.
            (20) Tobacco company documents indicate that young people 
        are an important and often crucial segment of the tobacco 
        market.
            (21) Comprehensive advertising restrictions will have a 
        positive effect on the smoking rates of young people, as 
        evidenced by the experience in Norway, Finland, and other 
        countries.
            (22) Restrictions on advertising are necessary to prevent 
        unrestricted tobacco advertising from undermining the ability 
        of the Congress and the States to prohibit access to young 
        people and to provide for education about tobacco use.
            (23) International experience shows that advertising 
        regulations that are stringent and comprehensive have a greater 
        impact on overall tobacco use and young people's use than 
        weaker or less comprehensive ones. Text only requirements, 
        while not as stringent as a ban, will accomplish this purpose 
        while preserving the informational function of advertising.

SEC. 3. PURPOSES.

    The purposes of this Act are--
            (1) to help American families dramatically reduce the 
        number of children illegally using tobacco products by--
                    (A) increasing the price of cigarettes by at least 
                $1.50 per pack in order to discourage youth purchases;
                    (B) implementing prevention, education, cessation, 
                and counter-advertising programs;
                    (C) restricting advertisements designed to 
                encourage kids to use tobacco products;
                    (D) imposing penalties on manufacturers for failing 
                to reach youth smoking rate reduction targets;
                    (E) requiring retailers to comply with laws 
                forbidding sales to minors; and
                    (F) giving the Food and Drug Administration and 
                State and local governments the authority and resources 
                to keep tobacco products out of the hands of minors;
            (2) to compensate taxpayers for their costs attributable to 
        tobacco-related illnesses by reimbursing the medicaid and 
        medicare programs and resolving the legal claims of Federal, 
        State and local governments for those costs that resulted from 
        past misconduct by the tobacco industry;
            (3) to improve the public health by reducing the number of 
        adult users of tobacco products through approved cessation 
        programs and limiting public exposure to environmental tobacco 
        smoke;
            (4) to provide assistance to tobacco farmers, tobacco 
        factory workers, and rural communities;
            (5) to affirm the full authority of the Food and Drug 
        Administration to regulate the manufacture, labeling, sale, 
        distribution, and advertising of tobacco products to the 
        fullest extent authorized by the commerce clause of the United 
        States Constitution;
            (6) to make available to the public tobacco industry 
        documents regarding the health effects of tobacco products, 
        addiction, the agricultural production of tobacco, the 
        manufacture of tobacco products, the distribution of tobacco 
        products, and the marketing of tobacco products to youths; and
            (7) to enhance global anti-tobacco efforts to minimize the 
        adverse health effects of tobacco products.

SEC. 4. 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--
                    (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 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) 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.
            (7) 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.
            (8) Manufacturer.--The term ``manufacturer'' means any 
        person, including any repacker or relabeler, who manufactures, 
        fabricates, assembles, processes, or labels a tobacco product.
            (9) 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.
            (10) Person.--The term ``person'' means an individual, 
        partnership, corporation, parent corporation, or any other 
        business or legal entity or successor in interest of any such 
        person.
            (11) 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.
            (12) 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.
            (13) 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 Act.
            (14) Roll-your-own tobacco.--The term ``roll-your-own 
        tobacco'' means any tobacco which, because of its appearance, 
        type, packaging, or labeling, is suitable for use and likely to 
        be offered to, or purchased by, consumers as tobacco for making 
        cigarettes.
            (15) 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.
            (16) Secretary.--Except as provided in title IV, the term 
        ``Secretary'' means the Secretary of Health and Human Services.
            (17) Smokeless tobacco.--The term ``smokeless tobacco'' 
        means any product that consists of cut, ground, powdered, or 
        leaf tobacco that is intended to be placed in the oral or nasal 
        cavity.
            (18) 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.
            (19) Tobacco.--The term ``tobacco'' means tobacco in its 
        unmanufactured form.
            (20) Tobacco product.--The term ``tobacco product'' means 
        any product made of or derived from tobacco leaf for human 
        consumption, including, but not limited to, cigarettes, 
        cigarillos, cigarette tobacco, cigars, little cigars, pipe 
        tobacco, and smokeless tobacco, and roll-your-own tobacco.
            (21) Trust fund.--Except as provided in section 121 and 
        title IV, the term ``Trust Fund'' means the Health Enhancement 
        and Lowered Tobacco Hazards for Young Kids Trust Fund 
        established under section 101.

                    TITLE I--HEALTHY KIDS TRUST FUND

                     Subtitle A--General Provisions

SEC. 101. ESTABLISHMENT OF TRUST FUND.

    (a) Creation.--
            (1) In general.--There is established in the Treasury of 
        the United States a trust fund to be known as the ``Health 
        Enhancement and Lowered Tobacco Hazards for Young Kids Trust 
        Fund'' (referred to as the ``HEALTHY Kids Trust Fund''), 
        consisting of such amounts as may be appropriated or credited 
        to the Trust Fund.
            (2) Trustees.--The trustees of the Trust Fund shall be the 
        Secretary of the Treasury and the Secretary of Health and Human 
        Services.
    (b) Transfers.--There are hereby appropriated and transferred to 
the Trust Fund an amount equal to the initial payment under section 102 
and 75 percent of the--
            (1) amounts received under the annual assessments made 
        under section 102;
            (2) amounts paid as fines or penalties, including interest 
        thereon, under section 103; and
            (3) amounts repaid or recovered under title III, including 
        interest thereon.
    (c) Repayable Advances.--
            (1) Authorization.--There are authorized to be appropriated 
        to the Trust Fund, as repayable advances, such sums as may from 
        time to time be necessary to make the expenditures described in 
        subsection (d).
            (2) Repayment with interest.--Repayable advances made to 
        the Trust Fund shall be repaid, and interest on such advances 
        shall be paid, to the general fund of the Treasury when the 
        Secretary of the Treasury determines that moneys are available 
        in the Trust Fund for such purposes.
            (3) Rate of interest.--Interest on advances made pursuant 
        to this subsection shall be at a rate determined by the 
        Secretary of the Treasury (as of the close of the calendar 
        month preceding the month in which the advance is made) to be 
        equal to the current average market yield on outstanding 
        marketable obligations of the United States with remaining 
        period to maturity comparable to the anticipated period during 
        which the advance will be outstanding.
    (d) Expenditures From Trust Fund.--Amounts in the Trust Fund shall 
be made available in each fiscal year, without further appropriation as 
follows:
            (1) 14.5 percent of such amounts shall be made available 
        for payments to States as provided for under section 111.
            (2) 17 percent of such amounts shall be made available for 
        grants to the States for child care and early childhood 
        development as provided for in section 131.
            (3) 6 percent of such amounts shall be made available for 
        grants to States for education as provided for in section 132.
            (4) 4 percent of such amounts shall be made available to 
        carry out the outreach and increased enrollment provisions 
        under the amendments made by section 133 to the medicaid 
        program under title XIX of the Social Security Act (42 U.S.C. 
        1396 et seq.) and the children's health insurance program under 
        title XXI of such Act (42 U.S.C. 1397aa et seq.).
            (5) 15.5 percent of such amounts shall be made available 
        for public health programs, of which--
                    (A) $300,000,000 shall be made available to the 
                Secretary to carry out subchapter F of chapter V of the 
                Food Drug and Cosmetic Act (as added by section 204);
                    (B) $200,000,000 shall be made available to the 
                Indian Health Service to be used as provided for in 
                title IX; and
                    (C) the remainder shall be made available for 
                public health programs as provided for in title VI.
            (6) 21 percent of such amounts shall be made available to 
        the National Institutes of Health Trust Fund for Health 
        Research for the conduct of health research as provided for in 
        section 121.
            (7) For agricultural programs as provided for in title IV--
                    (A) 12 percent of such amounts shall be made 
                available to the Tobacco Community Revitalization Trust 
                Fund for each of the first 10 fiscal years after the 
                date of enactment of this Act;
                    (B) 4 percent of such amounts shall be made 
                available to the Tobacco Community Revitalization Trust 
                Fund for each of the 11th through 15th fiscal years 
                after the date of enactment of this Act; and
                    (C) 2 percent of such amounts shall be made 
                available to the Tobacco Community Revitalization Trust 
                Fund for each of the 16th through 25th fiscal years 
                after the date of enactment of this Act.
            (8) For the Hospital Insurance Trust Fund--
                    (A) 4 percent of such amounts shall be made 
                available to such Trust Fund for each of the first 10 
                fiscal years after the date of enactment of this Act 
                (less amounts made available under paragraph (9) for 
                the first 3 such fiscal years);
                    (B) 8 percent of such amounts shall be made 
                available to such Trust Fund for each of the 11th 
                through 15th fiscal years after the date of enactment 
                of this Act;
                    (C) 9 percent of such amounts shall be made 
                available to such Trust Fund for each of the 16th 
                through 25th fiscal years after the date of enactment 
                of this Act; and
                    (D) 10 percent of such amounts shall be made 
                available to such Trust Fund for each subsequent fiscal 
                year.
            (9) For carrying out section 134, $250,000,000 shall be 
        made available in each of the 3 fiscal years described in such 
        section;
            (10) For reducing the debt--
                    (A) 6 percent of such amounts shall be made 
                available for such reduction in each of the first 10 
                fiscal years after the date of enactment of this Act;
                    (B) 10 percent of such amounts shall be made 
                available for such reduction in each of the 11th 
                through 15th fiscal years after the date of enactment 
                of this Act;
                    (C) 11 percent of such amounts shall be made 
                available for such reduction in each of the 16th 
                through 25th fiscal years after the date of enactment 
                of this Act; and
                    (D) 12 percent of such amounts shall be made 
                available for such reduction in each subsequent fiscal 
                year.
    (e) Budgetary Treatment and Definition.--
            (1) Treatment.--Amounts made available under paragraphs (8) 
        and (10) of subsection (d) shall not be included--
                    (A) by the Office of Management and Budget in the 
                estimates and reports required by sections 252(b) and 
                254 of the Balanced Budget and Emergency Deficit 
                Control Act of 1985; and
                    (B) by the Committee on the Budget of the House of 
                Representatives and the Committee on the Budget of the 
                Senate for purposes of congressional enforcement under 
                section 302(f) and 311(2)(B) of the Congressional 
                Budget Act of 1974 and section 202 of House Concurrent 
                Resolution 67 (104th Congress).
            (2) Definition.--In subsection (d)(109), the term ``debt'' 
        means any obligation of the Federal Government included in the 
        debt subject to limit.

SEC. 102. LIABILITY OF TOBACCO PRODUCT MANUFACTURERS.

    (a) Payments.--
            (1) Initial payment.--Not later than 90 days after the date 
        of enactment of this Act, each manufacturer shall pay to the 
        Trust Fund an amount that bears the same ratio to 
        $15,000,000,000 as the average stock market capitalization of 
        the tobacco manufacturer (as defined in paragraph (3)) bears to 
        the average stock market capitalization of all tobacco 
        manufacturers for 1996.
            (2) Annual assessments and collection.--For each calendar 
        year beginning with the first full calendar year following the 
        year in which this Act is enacted, the Secretary shall assess 
        each manufacturer an amount determined under subsection (b). 
        Such assessments shall be collected in a manner similar to the 
        manner in which excise taxes are collected under chapter 52 of 
        the Internal Revenue Code of 1986.
            (3) Average stock market capitalization.--For purposes of 
        this subsection, the average stock market capitalization of a 
        manufacturer for a year shall be determined by the Secretary of 
        the Treasury based on data submitted by manufacturers and other 
        appropriate data. Such determinations shall be made regardless 
        of whether the manufacturer issues stock.
    (b) Annual Assessments.--The Secretary shall assess each 
manufacturer (in accordance with regulations, relating to the timing 
and method of payment of assessments, to be promulgated by the 
Secretary of the Treasury) an amount in accordance with the following:
            (1) Small cigarettes.--With respect to a manufacturer of 
        cigarettes weighing not more than 3 pounds per thousand, the 
        assessment shall equal--
                    (A) for cigarettes removed during calendar year 
                1999, $25 per thousand;
                    (B) for cigarettes removed during calendar year 
                2000, $50 per thousand; and
                    (C) for cigarettes removed during calendar year 
                2001, $75 per thousand.
            (2) Large cigarettes.--
                    (A) In general.--With respect to a manufacturer of 
                cigarettes weighing more than 3 pounds per thousand, 
                the assessment shall equal--
                            (i) for cigarettes removed during calendar 
                        year 1999, $52.50 per thousand;
                            (ii) for cigarettes removed during calendar 
                        year 2000, $105 per thousand; and
                            (iii) for cigarettes removed during 
                        calendar year 2001, $157.50 per thousand.
                    (B) Exception.--On cigarettes more than 6\1/2\ 
                inches in length, at the rate prescribed for cigarettes 
                weighing not more than 3 pounds per thousand, counting 
                each 2\3/4\ inches, or fraction thereof, of the length 
                of each as one cigarette.
            (3) Small cigars.--With respect to a manufacturer of cigars 
        weighing not more than 3 pounds per thousand, the assessment 
        shall equal--
                    (A) for cigars removed during calendar year 1999, 
                $25 per thousand;
                    (B) for cigars removed during calendar year 2000, 
                $50 per thousand; and
                    (C) for cigars removed during calendar year 2001, 
                $75 per thousand.
            (4) Large cigars.--With respect to a manufacturer of cigars 
        weighing more than 3 pounds per thousand, the assessment shall 
        equal--
                    (A) for cigars removed during calendar year 1999, 
                25 percent of the price for which such cigars are sold 
                but not more than $500 per thousand;
                    (B) for cigars removed during calendar year 2000, 
                50 percent of the price for which such cigars are sold 
                but not more than $1,000 per thousand; and
                    (C) for cigars removed during calendar year 2001, 
                75 percent of the price for which such cigars are sold 
                but not more than $1,500 per thousand.
            (5) Snuff.--With respect to a manufacturer of snuff (as 
        such term is defined for purposes of chapter 52 of the Internal 
        Revenue Code of 1986) the assessment shall equal--
                    (A) for snuff removed during calendar year 1999, 
                $6.67 per pound (and a proportionate assessment at the 
                like rate on all fractional parts of a pound);
                    (B) for snuff removed during calendar year 2000, 
                $13.33 per pound (and a proportionate assessment at the 
                like rate on all fractional parts of a pound); and
                    (C) for snuff removed during calendar year 2001, 
                $20 per pound (and a proportionate assessment at the 
                like rate on all fractional parts of a pound).
            (6) Chewing tobacco.--With respect to a manufacturer of 
        chewing tobacco (as such term is defined for purposes of 
        chapter 52 of the Internal Revenue Code of 1986) the assessment 
        shall equal--
                    (A) for chewing tobacco removed during calendar 
                year 1999, $2.67 per pound (and a proportionate 
                assessment at the like rate on all fractional parts of 
                a pound);
                    (B) for chewing tobacco removed during calendar 
                year 2000, $5.33 per pound (and a proportionate 
                assessment at the like rate on all fractional parts of 
                a pound); and
                    (C) for chewing tobacco removed during calendar 
                year 2001, $8 per pound (and a proportionate assessment 
                at the like rate on all fractional parts of a pound).
            (7) Pipe tobacco.--With respect to a manufacturer of pipe 
        tobacco (as such term is defined for purposes of chapter 52 of 
        the Internal Revenue Code of 1986) the assessment shall equal--
                    (A) for pipe tobacco removed during calendar year 
                1999, $5.33 per pound (and a proportionate assessment 
                at the like rate on all fractional parts of a pound);
                    (B) for pipe tobacco removed during calendar year 
                2000, $10.67 per pound (and a proportionate assessment 
                at the like rate on all fractional parts of a pound); 
                and
                    (C) for pipe tobacco removed during calendar year 
                2001, $16.00 per pound (and a proportionate assessment 
                at the like rate on all fractional parts of a pound).
            (8) Roll-your-own tobacco.--With respect to a manufacturer 
        of roll-your-own tobacco the assessment shall equal--
                    (A) for roll-your-own tobacco removed during 
                calendar year 1999, $5.71 per pound (and a 
                proportionate assessment at the like rate on all 
                fractional parts of a pound);
                    (B) for roll-your-own tobacco removed during 
                calendar year 2000, $11.43 per pound (and a 
                proportionate assessment at the like rate on all 
                fractional parts of a pound); and
                    (C) for roll-your-own tobacco removed during 
                calendar year 2001, $17.14 per pound (and a 
                proportionate assessment at the like rate on all 
                fractional parts of a pound).
    (c) Inflation Adjustment.--In the case of a calendar year after 
2001, the dollar amount described in subparagraph (C) of paragraphs 
(1), (2), (3), (4), (5), (6), (7), and (8), and the percentage in 
subparagraph (C) of paragraph (4), applicable to the preceding calendar 
year shall be increased by an amount equal to--
            (1) such dollar amount (or percentage), multiplied by
            (2) the greater of--
                    (A) the medical consumer price percentage increase 
                for such calendar year as determined in the same manner 
                as the adjustment is determined under section 1(f)(3) 
                of the Internal Revenue Code of 1986 for such calendar 
                year by substituting ``the second preceding calendar 
                year'' for ``calendar year 1992'' in subparagraph (B) 
                thereof; or
                    (B) 3 percent.
    (d) Assessments Applicable to Floor Stocks.--
            (1) In general.--Tobacco products manufactured in or 
        imported into the United States which are removed before any 
        assessment date, and held on such date for sale by any person, 
        shall be subject to an assessment in an amount equal to the 
        excess of--
                    (A) the assessment which would be imposed under 
                subsection (b) on the product if the product had been 
                removed on such date, over
                    (B) the prior assessment (if any) imposed under 
                such subsection on such product.
            (2) Liability for assessment and method of payment.--
                    (A) Liability for assessment.--A person holding 
                tobacco products on any assessment date, to which any 
                assessment imposed under paragraph (1) applies shall be 
                liable for such assessment.
                    (B) Method of payment.--The assessment imposed 
                under paragraph (1) shall be paid in such manner as the 
                Secretary of the Treasury shall prescribe by 
                regulations.
                    (C) Time for payment.--The assessment imposed under 
                paragraph (1) shall be paid on or before April 1 
                following any assessment date.
            (3) Articles in foreign trade zones.--Notwithstanding the 
        Act of June 18, 1934 (48 Stat. 998, 19 U.S.C. 81a) and any 
        other provision of law, any product which is located in a 
        foreign trade zone on any assessment date, shall be subject to 
        the assessment imposed by paragraph (1) if--
                    (A) internal revenue taxes have been determined, or 
                customs duties liquidated, with respect to such product 
                before such date; or
                    (B) such article is held on such date under the 
                supervision of a customs officer.
            (4) Assessment date.--The term ``assessment date'' means 
        January 1.
    (e) No Tax Benefit.--
            (1) In general.--The initial payment described in 
        subsection (a)(1) shall not be considered to be an ordinary and 
        necessary expense in carrying on a trade or business for 
        purposes of the Internal Revenue Code of 1986 and shall not be 
        tax deductible.
            (2) Look-back penalties.--The payment of penalties under 
        title III shall not be considered to be an ordinary and 
        necessary expense in carrying on a trade or business for 
        purposes of the Internal Revenue Code of 1986 and shall not be 
        deductible.
    (f) Effect of Bankruptcy.--Section 507(a)(8) of title 11, United 
States Code, is amended--
            (1) in subparagraph (F)(iii), by striking ``or'' at the 
        end;
            (2) in subparagraph (G), by striking the period and 
        inserting ``; or''; and
            (3) by adding at the end the following:
                    ``(H) a payment, an assessment, or a penalty to be 
                paid into the Health Enhancement and Lowered Tobacco 
                Hazards for Young Kids Trust Fund under section 102 (or 
                any other section) of the Healthy Kids Act.''.
    (g) Limitation.--A manufacturer may not utilize any proceeds from 
liability insurance coverage to make payments or pay assessments under 
this section.
    (h) Healthy Kids Stamp.--The Secretary shall promulgate regulations 
to provide that a Healthy Kids Stamp be affixed to each package of a 
tobacco product for which an assessment has been paid under this 
section.
    (i) Nonapplication to Certain Manufacturers.--
            (1) Exemption.--A manufacturer described in paragraph (2) 
        shall be exempt from the requirements of this section relating 
        to--
                            (A) the payment of an initial payment under 
                        subsection (a)(1); and
                            (B) the payment of that portion of the 
                        annual assessments under this section that will 
                        be provided under paragraphs (1) through (4) of 
                        section 101(d) to States.
            (2) Manufacturer.--A manufacturer described in this section 
        is a manufacturer that has resolved tobacco-related civil 
        actions with more than 25 States (in this paragraph referred to 
        as ``settling States'') prior to January 1, 1998 through 
        written settlement agreements signed by the attorneys general 
        of such States, so long as such manufacturer provides to all 
        other States by not later than December 31, 1998, the 
        opportunity to enter into written settlement agreements that 
        are substantially similar to the agreements that such 
        manufacturer has entered into with the settling States and that 
        provide such other States with the most favorable annual 
        payment terms of its written settlement offers to such other 
        States.
            (3) Limitation.--The provisions of paragraph (1) shall 
        apply only to assessments on cigarettes to the extent that such 
        cigarettes constitute less than 3 percent of all cigarettes 
        manufactured and distributed for consumer use in any year.

SEC. 103. LICENSING OF MANUFACTURERS.

    (a) In General.--The Secretary, acting through the Food and Drug 
Administration, shall establish a tobacco manufacturer licensing 
program.
    (b) Requirement.--A manufacturer or importer shall have in effect a 
license issued under the program under subsection (a) in order--
            (1) to be eligible to manufacture and distribute tobacco 
        products in the United States, or, in the case of an importer, 
        to be eligible to import tobacco products; and
            (2) to be eligible to receive the protections provided 
        under subtitle A of title VII.
    (c) Eligibility.--A manufacturer or importer shall not be eligible 
to receive a license under this section if such manufacturer or 
importer has failed to pay the payment of assessment required under 
section 102 or fails to comply with such other requirements as the 
Secretary may prescribe in futherance of the purposes of this Act.
    (d) Revocation and Suspension.--The Secretary shall promulgate 
regulations to provide for the enforcement of the program established 
under section (a). Such regulations shall provide for the revocation or 
suspension of a license for nonpayment of required assessments.

SEC. 104. ENFORCEMENT.

    (a) In General.--The Secretary of the Treasury, in consultation 
with the Secretary of Health and Human Services, shall enforce the 
provisions of section 102 with respect to any manufacturer that fails 
to pay any amount assessed under section 102.
    (b) Amount of Penalty.--The amount of the penalty imposed by 
subsection (a) on any failure with respect to a manufacturer shall be 
established by the Secretary of the Treasury for each day during the 
noncompliance period, except that no such penalty shall be less than 
$25,000 plus interest.
    (c) Noncompliance Period.--For purposes of this section, the term 
``noncompliance period'' means, with respect to any failure to pay an 
assessment under section 102, the period--
            (1) beginning on the due date for such payment; and
            (2) ending on the date on which such payment is paid in 
        full.

                          Subtitle B--Payments

                          CHAPTER 1--TO STATES

SEC. 111. PAYMENTS TO STATES.

    (a) Availability of Funds.--
            (1) In general.--The amounts made available for a fiscal 
        year under section 101(d)(1) shall be made available to carry 
        out subsections (b) and (d).
            (2) No overpayment.--With respect to the amount provided to 
        a State under paragraph (1) for a fiscal year, the Secretary 
        shall not treat such amount as an overpayment under any joint 
        Federal-State health program.
            (3) Fiscal year limitation.--Amounts made available for a 
        fiscal year under subsection (b) shall not exceed the amount 
        available for such fiscal year under section 101(d)(1).
    (b) Reimbursement.--
            (1) In general.--The Secretary shall use amounts made 
        available under subsection (a)(1) in each fiscal year to 
provide funds to each State that is eligible under subsection (c) to 
reimburse such State for amounts expended by the State under the State 
program under title XIX of the Social Security Act (42 U.S.C. 1396 et 
seq.) or any other State health program for the treatment of 
individuals with tobacco-related illnesses or conditions.
            (2) Amount.--The amount for which a State is eligible under 
        paragraph (1) shall be based on the ratio of the total Federal 
        payments to the State under title XIX of the Social Security 
        Act (42 U.S.C. 1396 et seq.) for the fiscal year involved to 
        the total Federal payments to all States under such title for 
        such fiscal year.
            (3) Adjustment.--With respect to a fiscal year in which the 
        amount determined under paragraphs (1) and (2) of subsection 
        (a) exceeds the limitation under subsection (a)(3), the 
        Secretary shall make pro rata reductions in the amounts 
        provided to States under this subsection.
            (4) Reallotment.--The amount for which a State is eligible 
        under this subsection that is not made available to the State 
        as a result of the failure of the State to meet the 
        requirements of subsection (c) shall be made available to other 
        States on a pro rata basis.
            (5) Use of funds.--Amounts provided to a State under this 
        subsection shall be used--
                    (A) to reimburse the State for expenses incurred by 
                the State under the State program under title XIX of 
                the Social Security Act (42 U.S.C. 1396 et seq.) 
                relating to the treatment of tobacco-related illnesses 
                or conditions;
                    (B) to reimburse the State for other expenses 
                incurred by the State in providing directly, or 
                reimbursing others for the provision of, treatment for 
                tobacco-related illnesses or conditions; and
                    (C) to provide funds to local governmental entities 
                as provided for in subsection (d).
    (c) Eligibility.--To be eligible to receive funds under this 
section a State shall--
            (1) agree to resolve in accordance with section 701 any 
        civil action that has been commenced by the State against a 
        tobacco manufacturer, distributor, or retailer of a tobacco 
        product seeking recovery for expenditures attributable to the 
        treatment of tobacco induced illnesses and conditions or other 
        damages;
            (2) prepare and submit to the Secretary for approval a plan 
        describing the manner in which the State will comply with the 
        requirements of subsection (d) and a certification that all 
        actions described in paragraph (1) have been resolved; and
            (3) comply with the provisions of subsection (d) with 
        respect to State and local governments.
    (d) Funds for Local Governmental Entities.--To be eligible to 
receive funds under subsection (b), a State shall have adopted 
procedures to provide an equitable portion of such funds to local 
governmental entities within the State that can demonstrate that such 
entities incurred tobacco-related health costs through--
            (1) contributions to the program under title XIX of the 
        Social Security Act (42 U.S.C. 1396 et seq.);
            (2) the provision of indigent care;
            (3) the provision of health care coverage to governmental 
        employees; or
            (4) the implementation of tobacco product enforcement or 
        tobacco product regulatory requirements in accordance with this 
        Act.

                   CHAPTER 2--FEDERAL HEALTH PROGRAMS

SEC. 121. NATIONAL INSTITUTES OF HEALTH TRUST FUND FOR HEALTH RESEARCH.

    (a) Creation of Trust Fund.--There is established in the Treasury 
of the United States a trust fund to be known as the ``National 
Institutes of Health Trust Fund for Health Research'' (hereafter 
referred to in this section as the ``Trust Fund''), consisting of such 
amounts as may be appropriated or transferred to the Trust Fund as 
provided in this section.
    (b) Funding.--There shall be transferred to the Trust Fund an 
amount equal to the amount made available for a fiscal year under 
section 101(d)(6) to carry out this section in such fiscal year.
    (c) Obligations From Trust Fund.--
            (1) In general.--Subject to the provisions of paragraph 
        (4), with respect to the amounts made available in the Trust 
        Fund in a fiscal year, the Secretary shall distribute during 
        any fiscal year--
                    (A) 2 percent of such amounts to the Office of the 
                Director of the National Institutes of Health to be 
                allocated at the Director's discretion--
                            (i) for carrying out the responsibilities 
                        of the Office of the Director, including the 
                        Office of Research on Women's Health and the 
                        Office of Research on Minority Health, the 
                        Office of Alternative Medicine, the Office of 
                        Rare Disease Research, the Office of Behavioral 
                        and Social Sciences Research (for use for 
                        efforts to reduce tobacco use), the Office of 
                        Dietary Supplements, and the Office for Disease 
                        Prevention; and
                            (ii) for construction and acquisition of 
                        equipment for or facilities of or used by the 
                        National Institutes of Health;
                    (B) 2 percent of such amounts for transfer to the 
                National Center for Research Resources to carry out 
                section 1502 of the National Institutes of Health 
                Revitalization Act of 1993 concerning Biomedical and 
                Behavioral Research Facilities;
                    (C) 7.5 percent of such amounts to be used for 
                research into the prevention and cure of cancer;
                    (D) 7.5 percent of such amounts to be used as 
                provided for in section 601;
                    (E) 1 percent of such amounts to be used for 
                prevention research programs at the Centers for Disease 
                Control and Prevention;
                    (F) 1 percent of such amounts to be used for 
                quality and health outcomes research at the Agency for 
                Health Care Policy and Research; and
                    (G) the remainder of such amounts to member 
                institutes and centers, including the Office of AIDS 
                Research, of the National Institutes of Health in the 
                same proportion to such remainder, as the amount of 
                annual appropriations under appropriations Acts for 
                each member institute and center for the fiscal year 
                bears to the total amount of appropriations under 
                appropriations Acts for all member institutes and 
                centers of the National Institutes of Health for the 
                fiscal year.
            (2) Plans of allocation.--The amounts transferred under 
        paragraph (1)(G) shall be allocated by the Director of the 
        National Institutes of Health or the various directors of the 
        institutes and centers, as the case may be, pursuant to 
        allocation plans developed by the various advisory councils to 
        such directors, after consultation with such directors.
            (3) Grants and contracts fully funded in first year.--With 
        respect to any grant or contract funded by amounts distributed 
        under paragraph (1), the full amount of the total obligation of 
        such grant or contract shall be funded in the first year of 
        such grant or contract, and shall remain available until 
        expended.
            (4) Trigger and release of monies and phase-in.--
                    (A) Trigger and release.--No expenditure shall be 
                made under paragraph (1) during any fiscal year in 
                which the annual amount appropriated for the National 
                Institutes of Health under 1 or more appropriations 
                Acts (not including amounts provided for purposes of 
                this section) is less than the amount so appropriated 
                for the fiscal year.
                    (B) Phase-in.--The Secretary shall phase in the 
                distributions required under paragraph (1) so that--
                            (i) 25 percent of the amount in the Trust 
                        Fund is distributed in the first fiscal year 
                        for which funds are available;
                            (ii) 50 percent of the amount in the Trust 
                        Fund is distributed in the second fiscal year 
                        for which funds are available;
                            (iii) 75 percent of the amount in the Trust 
                        Fund is distributed in the third fiscal year 
                        for which funds are available; and
                            (iv) 100 percent of the amount in the Trust 
                        Fund is distributed in the fourth and each 
                        succeeding fiscal year for which funds are 
                        available.

                  CHAPTER 3--INVESTMENTS FOR CHILDREN

SEC. 131. IMPROVING CHILD CARE AND EARLY CHILDHOOD DEVELOPMENT.

    (a) In General.--The Secretary shall use amounts made available 
under section 101(d)(2) for a fiscal year for the following purposes:
            (1) Improving the affordability of child care through 
        increased appropriations for child care under the Child Care 
and Development Block Grant Act of 1990 (42 U.S.C. 9858 et seq.).
            (2) Enhancing the quality of child care and early childhood 
        development through the provision of grants to States under the 
        Child Care and Development Block Grant Act of 1990 (42 U.S.C. 
        9858 et seq.).
            (3) Expanding the availability and quality of school-age 
        care through the provision of grants to States under the Child 
        Care and Development Block Grant Act of 1990 (42 U.S.C. 9858 et 
        seq.).
            (4) Assisting young children by providing grants to local 
        collaboratives under the Child Care and Development Block Grant 
        Act of 1990 (42 U.S.C. 9858 et seq.) for the purpose of 
        improving parent education and supportive services, 
        strengthening the quality of child care, improving health 
        services, and improving services for children with 
        disabilities.
    (b) Supplement not Supplant.--Amounts made available to a State 
under this section shall be used to supplement and not supplant other 
Federal, State and local funds provided for programs that serve the 
health and developmental needs of children. Amounts provided to the 
State under any of the provisions of law referred to in this section 
shall not be reduced solely as a result of the availability of funds 
under this section.
    (c) Authority of Secretary.--In providing funds to States under 
this section, the Secretary may consider the amount of funds allocated 
to States under section 111. The Secretary may allocate funds under 
this section based on the relative need for funds in the various States 
and the strength of the State plans or applications for such funds.

SEC. 132. IMPROVING ELEMENTARY EDUCATION.

    (a) Grants Authorized.--The Secretary of Education shall use 
amounts made available under section 101(d)(3) for a fiscal year to 
award grants to States and local educational agencies to train, recruit 
and hire elementary school teachers for the purpose of reducing the 
average class size for students in grades 1 through 3 to not more than 
18 students per teacher.
    (b) Regulations Required.--The Secretary of Education, not later 
than March 1, 1999, shall promulgate regulations as the Secretary 
determines necessary to assist States and school districts in providing 
smaller class sizes with qualified teachers in early grades. Such 
regulations may include provisions relating to--
            (1) the use of funds by the State, including the awarding 
        of grants to local educational agencies;
            (2) teacher preparation and certification; and
            (3) accountability for improved student achievement.
    (c) Ensuring a Qualified Teacher in Every Classroom.--To be 
eligible to receive funds under this Act, each State shall ensure 
that--
            (1) not later than the period that begins on the date of 
        enactment of this Act and ends 5 years after such date, and 
        subject to paragraphs (2) and (3), each teacher in a public 
        elementary or secondary school in the State has demonstrated 
        the subject matter knowledge, teaching knowledge, and teaching 
        skill necessary to teach effectively in the content area or 
        areas in which the teacher provides instruction;
            (2) each teacher in the State for whom the demonstration 
        described in paragraph (1) has been waived temporarily by State 
        or local education agencies to respond to emergency teacher 
        shortages or other circumstances shall, not later than 3 years 
        after such waiver, demonstrate the subject matter knowledge, 
        teaching knowledge, and teaching skill necessary to teach 
        effectively in the content area or areas in which the teacher 
        provides instruction;
            (3) no student will be taught for more than 1 year by an 
        elementary school teacher, or for more than 2 consecutive years 
        in the same subject by a secondary school teacher, who has not 
        made the demonstration described in paragraph (1); and
            (4) during the period described in paragraph (1), 
        elementary school and secondary school teachers who do not meet 
        the requirements of paragraph (1), are not disproportionately 
        employed in high poverty elementary schools or secondary 
        schools.
    (d) State Plan.--
            (1) In general.--Each State desiring a grant under this 
        section shall submit to the Secretary of Education a State plan 
        at such time, in such manner, and accompanied by such 
        information as the Secretary may require.
            (2) Contents.--Each State plan shall demonstrate to the 
        satisfaction of the Secretary of Education that--
                    (A) the activities assisted by the State with funds 
                made available under this section will be conducted in 
                compliance with any regulations promulgated under 
                subsection (a);
                    (B) the State will use the funds made available 
                under this section to reduce class size for students in 
                grades 1 through 3 in elementary schools throughout the 
                State, focusing on using the funds to train, recruit, 
                and hire teachers for elementary schools serving 
                communities with the least available resources for such 
                activities and the largest class sizes in those grades; 
                and
                    (C) of the funds that are made available to the 
                State under this section, the State will make available 
                to each local educational agency that serves children 
                in grades 1 through 3 and in which at least 30 percent 
                of the children are from families below the Federal 
                poverty level, at least as great a percentage of such 
                funds as the percentage of funds provided to that local 
                educational agency as compared to other local 
                educational agencies in the State under part A of title 
                I of the Elementary and Secondary Education Act of 
                1965.
            (3) Approval.--The Secretary shall approve a State plan 
        submitted under paragraph (1) if the State plan meets the 
        requirements of this subsection.
    (e) Supplement not Supplant.--Amounts made available to a State 
under this section shall be used to supplement and not supplant other 
Federal, State and local funds provided for programs that improve 
elementary education as provided for in this section. Amounts provided 
to the State under this section shall not be reduced solely as a result 
of the availability of funds under this section.
    (f) Authority of Secretary.--In providing funds to States under 
this section, the Secretary may consider the amount of funds allocated 
to States under section 111. The Secretary may allocate funds under 
this section based on the relative need for funds in the various States 
and the strength of the State plans.

SEC. 133. INCREASED ENROLLMENT OF CHILDREN WITH THE MEDICAID AND STATE 
              CHILDREN'S HEALTH INSURANCE PROGRAMS.

    (a) Transitional Increased Federal Matching Rate for Increased 
Medicaid Administrative Costs.--Section 1931(h) of the Social Security 
Act (42 U.S.C. 1396u-1(h)) is amended--
            (1) in paragraph (2), by striking ``attributable to'' and 
        all that follows and inserting ``attributable to--
                    ``(A) administrative costs of eligibility 
                determinations that (but for the enactment of this 
                section) would not be incurred; and
                    ``(B) outreach activities to enroll uninsured 
                children in a State plan approved under this title or 
                title XXI.''; and
            (2) by striking paragraphs (3) and (4) and inserting the 
        following:
            ``(3) Limitation.--
                    ``(A) In general.--Beginning with fiscal year 1998, 
                the total amount of additional Federal funds that are 
                expended as a result of the application of this 
                subsection shall not exceed $525,000,000.
                    ``(B) Availability of appropriation.--Any amount 
                appropriated in accordance with this paragraph shall 
                remain available until expended.
                    ``(C) Equitable distribution of funds.--In applying 
                this paragraph, the Secretary shall ensure the 
                equitable distribution of additional funds among the 
                States.''.
    (b) Medicaid Presumptive Eligibility for Low-Income Children.--
            (1) In general.--Section 1920A(b)(3) of the Social Security 
        Act (42 U.S.C. 1396r-1a(b)(3)) is amended--
                    (A) in subparagraph (A)(i))--
                            (i) by striking ``or (II)'' and inserting 
                        ``, (II)''; and
                            (ii) by inserting ``, or (III) is an 
                        elementary school or secondary school, as such 
                        terms are defined in section 14101 of the 
                        Elementary and Secondary Education Act of 1965 
                        (20 U.S.C. 8801), is a child care resource and 
                        referral agency, a child support enforcement 
                        agency, or is authorized to determine the 
                        eligibility of a child for obtaining child 
                        health assistance under title XXI that is in 
                        the form of coverage that meets the 
                        requirements of section 2103'' before the 
                        semicolon; and
                    (B) in subparagraph (C), by striking ``limiting the 
                classes of'' and inserting ``imposing limitations on''.
            (2) Retroactivity.--The amendments made by paragraph (1) 
        take effect as if included in the enactment of section 4912 of 
        the Balanced Budget Act of 1997 (Public Law 105-33; 111 Stat. 
        571).
    (c) Medicaid Expenditures Counted Against State Allotments Under 
Title XXI.--
            (1) In general.--Section 2104(d) of the Social Security Act 
        (42 U.S.C. 1397dd(d)) is amended to read as follows:
    ``(d) Certain Medicaid Expenditures Counted Against Individual 
State Allotments.--The amount of the allotment otherwise provided to a 
State under subsection (b) or (c) for a fiscal year shall be reduced by 
the amount (if any) of the payments made to that State under section 
1903(a) for expenditures claimed by the State during such fiscal year 
that is attributable to the provision of medical assistance to a child 
for which payment is made under section 1903(a)(1) on the basis of an 
enhanced FMAP under the fourth sentence of section 1905(b).''.
            (2) Retroactivity.--The amendment made by paragraph (1) 
        takes effect as if included in the enactment of section 4901 of 
        the Balanced Budget Act of 1997 (Public Law 105-33; 111 Stat. 
        552).
    (d) Medicaid and State Children's Health Insurance Program 
Eligibility for Legal Immigrant Children Who Entered the United States 
After August 1996.--
            (1) Exemption from 5-year ban.--Section 403 of the Personal 
        Responsibility and Work Opportunity Reconciliation Act of 1996 
        (8 U.S.C. 1613), as amended by sections 5302(c)(1)(B) and 
        5303(c) of the Balanced Budget Act of 1997 (Public Law 105-33; 
        111 Stat. 599, 600), is amended by adding at the end the 
        following:
    ``(e) Medicaid and SCHIP Benefits for Certain Children.--
Notwithstanding any other provision of law, the limitations under 
section 401(a) and subsection (a) shall not apply to an individual who 
is under 19 years of age and who lawfully entered the United States 
after August 22, 1996, but only with respect to the eligibility of that 
individual for--
            ``(1) child health assistance under title XXI of the Social 
        Security Act (42 U.S.C. 1397aa et seq.); and
            ``(2) medical assistance under title XIX of such Act (42 
        U.S.C. 1396 et seq.), if the individual is an optional targeted 
        low-income child described in section 1905(u)(2)(B) of such Act 
        (42 U.S.C. 1396d(u)(2)(B)).''.
            (2) Nonapplication of state authority to determine 
        eligibility for medicaid.--Section 402(b)(2) of the Personal 
        Responsibility and Work Opportunity Reconciliation Act of 1996 
        (8 U.S.C. 1612(b)(2)), as amended by sections 5303(b) and 
        5305(b) of the Balanced Budget Act of 1997 (Public Law 105-33; 
        111 Stat. 600, 601), is amended--
                    (A) in the matter preceding subparagraph (A), by 
                striking ``Qualified'' and inserting ``Except as 
                provided in subparagraphs (A), (E), (F), and (G), 
                qualified''; and
                    (B) by adding at the end the following:
                    ``(G) Medicaid exception for certain children.--
                With respect to eligibility for benefits for the 
                program described in section 403(e)(2), paragraph (1) 
                shall not apply to any individual described in that 
                section.''.
            (3) Retroactivity.--The amendments made by paragraphs (1) 
        and (2) take effect as if included in the enactment of the 
        Balanced Budget Act of 1997 (Public Law 105-33; 111 Stat. 251).
    (e) Annual Performance Bonus for Reduction in Medicaid Eligible but 
Unenrolled Children.--Section 1903 of the Social Security Act (42 
U.S.C. 1396b) is amended by adding at the end the following:
    ``(x) Performance Bonus for Reduction in Eligible But Unenrolled 
Children.--
            ``(1) Performance bonus.--Beginning with fiscal year 1999, 
        in addition to the amounts paid to a State under subsection 
        (a), the Secretary shall pay to each State that has an approved 
        plan under this title an amount equal to the performance bonus 
        determined under paragraph (2).
            ``(2) Performance bonus.--
                    ``(A) Formula.--The performance bonus for a State 
                for a fiscal year is equal to the product of--
                            ``(i) the excess baseline enrollment for 
                        the State for the fiscal year;
                            ``(ii) the average per child expenditures 
                        by the State under this title for the fiscal 
                        year; and
                            ``(iii) the difference between the enhanced 
                        FMAP and the Federal medical assistance 
                        percentage (as defined in the first sentence of 
                        section 1905(b)) of the State for the fiscal 
                        year described in section 2105(b).
                    ``(B) Determination of the excess baseline 
                enrollment.--
                            ``(i) In general.--For purposes of 
                        subparagraph (A)(i), the excess baseline 
                        enrollment for a State for a fiscal year is the 
                        difference between (I) the actual number of 
                        full year equivalent children enrolled under 
                        the State plan and (II) the baseline number of 
                        full year equivalent children that would be 
                        enrolled under the State plan in the absence of 
                        the performance bonus outreach efforts of the 
                        State.
                            ``(ii) Determination of the baseline number 
                        of full year equivalent children.--For purposes 
                        of clause (i)(II), the baseline number of full 
                        year equivalent children that would be enrolled 
                        under the State plan in the absence of the 
                        performance bonus outreach efforts of the State 
                        is--
                                    ``(I) in the case of fiscal year 
                                1999, the actual number of full year 
                                equivalent children enrolled under the 
                                State plan in fiscal year 1998, 
                                increased by the national percentage 
                                increase for fiscal year 1999 in the 
                                number of full year equivalent children 
                                enrolled in all State plans under this 
                                title, as projected by the 
                                Congressional Budget Office in January 
                                1998; and
                                    ``(II) in the case of any 
                                succeeding fiscal year, the baseline 
                                number of full year equivalent children 
                                that would be enrolled under the State 
                                plan in the absence of the performance 
                                bonus outreach efforts of the State 
                                determined for the preceding fiscal 
                                year, increased by the national 
                                percentage increase for that succeeding 
                                fiscal year in the number of full year 
                                equivalent children enrolled in all 
                                State plans under this title, as 
                                projected by the Congressional Budget 
                                Office in January 1998.
                    ``(C) Determination of average per child 
                expenditures.--For purposes of subparagraph (A)(ii), 
                the average per child expenditures by a State under 
                this title for a fiscal year is--
                            ``(i) the total amount paid to the State 
                        under subsection (a)(1) that is attributable to 
                        medical assistance provided to children under 
                        the State plan; divided by
                            ``(ii) the actual number of full year 
                        equivalent children enrolled under the State 
                        plan in that fiscal year.
            ``(3) Data requirements.--Each State shall submit to the 
        Secretary such data, at such time and in such manner, as the 
        Secretary determines is necessary to make the payments required 
        under this subsection. The Secretary shall ensure that data is 
        provided under this subsection in a manner that is consistent 
        with other data reporting requirements for information required 
        to be submitted by a State under this title and title XXI, and 
        that avoids duplication of reporting requirements.
            ``(4) States with significantly higher increased actual 
        enrollment than the expected national increase.--For any fiscal 
        year, if a State's actual full year equivalent children 
        enrollment percentage increase over the preceding fiscal year 
        is at least twice the estimated national percentage increase in 
        such enrollment for that fiscal year, as projected by the 
        Congressional Budget Office in January 1998, the State shall 
        submit such additional information as the Secretary determines 
        is necessary to verify that the increase is the result of the 
        State reducing the number of unenrolled children who are 
        eligible for medical assistance under this title in the State.
            ``(5) Timing of performance bonus payments; 
        reconciliation.--The Secretary shall pay the performance 
        bonuses required under this subsection for a fiscal year not 
        later than September 30 of the succeeding fiscal year based on 
        reporting data that reflects each State's actual number of full 
        year equivalent children enrolled under the State plan and 
        average per child expenditures. A State shall provide the 
        Secretary with access to any records or information relevant to 
        the payment of a performance bonus under this subsection for 
        the purposes of review or audit.
            ``(6) Waivers.--The provisions of this subsection apply to 
        a State providing medical assistance under this title under 
        waiver authority in the same manner as they apply to a State 
        with an approved plan under this title.
            ``(7) Limitation.--Amounts paid to States for a fiscal year 
        under this subsection shall not exceed the amount made 
        available under section 101(d)(4) of the Healthy Kids Act for 
        such fiscal year (less amounts paid to States under the 
        amendments made by subsections (a) through (d) of section 133 
of such Act).''.

SEC. 134. MEDICARE CANCER PATIENT DEMONSTRATION PROJECT; EVALUATION AND 
              REPORT TO CONGRESS.

    (a) Establishment.--The Secretary shall establish a 3-year 
demonstration project which provides for payment under the medicare 
program under title XVIII of the Social Security Act (42 U.S.C. 1395 et 
seq.) of routine patient care costs--
            (1) which are provided to an individual diagnosed with 
        cancer and enrolled in the medicare program under such title as 
        part of the individual's participation in an approved clinical 
        trial program; and
            (2) which are not otherwise eligible for payment under such 
        title for individuals who are entitled to benefits under such 
        title.
    (b) Application.--The beneficiary cost sharing provisions under the 
medicare program, such as deductibles, coinsurance, and copayment 
amounts, shall apply to any individual participating in a demonstration 
project conducted under this section.
    (c) Approved Clinical Trial Program.--
            (1) In general.--For purposes of this section, the term 
        ``approved clinical trial program'' means a clinical trial 
        program which is approved by--
                    (A) the National Institutes of Health;
                    (B) a National Institutes of Health cooperative 
                group or a National Institutes of Health center; and
                    (C) the National Cancer Institute, with respect to 
                programs that oversee and coordinate extramural 
                clinical cancer research, trials sponsored by such 
                Institute and conducted at designated cancer centers, 
                clinical trials, and Institute grants that support 
                clinical investigators.
            (2) Modifications in approved trails.--Beginning 1 year 
        after the date of enactment of this Act, the Secretary, in 
        consultation with the Cancer Policy Board of the Institute of 
        Medicine, may modify or add to the requirements of paragraph 
        (1) with respect to an approved clinical trial program.
    (d) Routine Patient Care Costs.--
            (1) In general.--For purposes of this section, ``routine 
        patient care costs'' shall include the costs associated with 
        the provision of items and services that--
                    (A) would otherwise be covered under the medicare 
                program if such items and services were not provided in 
                connection with an approved clinical trial program; and
                    (B) are furnished according to the design of an 
                approved clinical trial program.
            (2) Exclusion.--For purposes of this section, ``routine 
        patient care costs'' shall not include the costs associated 
        with the provision of--
                    (A) an investigational drug or device, unless the 
                Secretary has authorized the manufacturer of such drug 
                or device to charge for such drug or device; or
                    (B) any item or service supplied without charge by 
                the sponsor of the approved clinical trial program.
    (e) Study.--The Secretary shall study the impact on the medicare 
program under title XVIII of the Social Security Act of covering 
routine patient care costs for individuals with a diagnosis of cancer 
and other diagnoses, who are entitled to benefits under such title and 
who are enrolled in an approved clinical trial program.
    (f) Report to Congress.--Not later than 30 months after the date of 
enactment of this Act, the Secretary shall submit a report to Congress 
that contains a detailed description of the results of the study 
conducted under subsection (e) including recommendations regarding the 
extension and expansion of the demonstration project conducted under 
this section.
    (g) Funding.--The Secretary shall use amounts made available under 
section 101(d)(9)(A) for a fiscal year to carry out this section.

            TITLE II--FDA JURISDICTION OVER TOBACCO PRODUCTS

SEC. 201. REFERENCE.

    Whenever in this title 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. 202. STATEMENT OF GENERAL AUTHORITY.

    The regulations promulgated by the Secretary in the rule dated 
August 28, 1996 (Vol. 61, No. 168 C.F.R.), adding part 897 to title 21, 
Code of Federal Regulations, shall be deemed to have been promulgated 
under the Food, Drug and Cosmetic Act as amended by this title.

SEC. 203. TREATMENT OF TOBACCO PRODUCTS AS DRUGS AND DEVICES.

    (a) Definitions.--
            (1) Drug.--Section 201(g)(1) (21 U.S.C. 321(g)(1)) is 
        amended by striking ``; and (D)'' and inserting ``; (D) 
        nicotine in tobacco products; and (E)''.
            (2) Devices.--Section 201(h) (21 U.S.C. 321(h)) is 
        amended--
                    (A) in paragraph (2), by striking ``or'' at the 
                end;
                    (B) in paragraph (3), by striking ``and'' at the 
                end and inserting ``or''; and
                    (C) by inserting after paragraph (3), the 
                following:
            ``(4) a delivery component of a tobacco product; and''.
            (3) Other definitions.--Section 201 (21 U.S.C. 321) is 
        amended by adding at the end the following:
    ``(kk) The term `tobacco product' means any product made or derived 
from tobacco leaf made for human consumption including, but not limited 
to, cigarettes, cigarillos, cigarette tobacco, cigars, little cigars, 
pipe tobacco, and smokeless tobacco, and roll-your-own tobacco.''.
    (b) Regulatory Authority.--Section 503(g) (21 U.S.C. 353(g)) is 
amended by adding at the end the following:
    ``(5) The Secretary may regulate any tobacco product as a drug, 
device, or both, and may designate the office of the Administration 
that shall be responsible for regulating such products.''.
    (c) Devices.--Section 520(e)(1) (21 U.S.C. 360j(e)(1)) is amended 
by striking ``or use--'' and inserting ``or use, including restrictions 
on the access to, and the advertising and promotion of, tobacco 
products--''.
    (d) Misbranding.--Section 502 (21 U.S.C. 360) is amended by adding 
at the end the following:
    ``(u) In the case of a tobacco product, it is sold, distributed, 
advertised, or labeled in violation of this Act or the regulations 
promulgated under this Act.
    ``(v) The regulations promulgated in accordance with subchapter E 
shall, at a minimum, require that a tobacco product be deemed to be 
misbranded if the labeling of the package of the product, or any claim 
of the manufacturer in connection with the product, states or implies 
(as determined by the Secretary) that the product presents a reduced 
health risk unless it is demonstrated to the satisfaction of the 
Secretary that the product will achieve the best public health result, 
taking into account all relevant factors including, but not limited to, 
the probability of the increased number of new users of tobacco 
products and the reduced probability that existing users of tobacco 
products will quit.''.
    (e) Enforcement.--Section 301 (42 U.S.C. 331) is amended by adding 
at the end the following:
    ``(aa) The failure to comply with the requirements of section 581.
    ``(bb) The failure or refusal to comply with any of the 
requirements of subsections (a), (b) or (e) of section 578.''.
    (f) State and Local Requirements.--Section 521 (21 U.S.C. 360k) is 
amended--
            (1) in subsection (a), by striking ``subsection (b)'' and 
        inserting ``subsections (b) and (c)''; and
            (2) by adding at the end the following:
    ``(c) This section shall not apply to devices that are tobacco 
products.''.

SEC. 204. SAFETY AND EFFICACY STANDARD AND RECALL AUTHORITY.

    (a) Safety and Efficacy Standard.--Section 513(a) (21 U.S.C. 
360c(a)) is amended--
            (1) in paragraph (1)(B), by inserting after the first 
        sentence the following: ``For a device which is a tobacco 
        product, the assurance in the previous sentence need not be 
        found if the Secretary finds that special controls achieve the 
        best public health result.''; and
            (2) in paragraph (2)--
                    (A) by redesignating subparagraphs (A), (B) and (C) 
                as clauses (i), (ii) and (iii), respectively;
                    (B) by striking ``(2) For'' and inserting ``(2)(A) 
                For''; and
                    (C) by adding at the end the following:
    ``(B) For purposes of paragraph (1)(B), subsections (c)(2)(C), 
(d)(2)(B), (e)(2)(A), (f)(3)(B)(i), and (f)(3)(C)(i), and sections 514, 
519(a), 520(e), and 520(f), the safety and effectiveness of a device 
that is a tobacco product need not be found if the Secretary finds that 
the action to be taken under any such provision would achieve the best 
public health result. The finding as to whether the best public health 
result has been achieved shall be determined with respect to the risks 
and benefits to the population as a whole, including users and non-
users of the tobacco product, and taking into account--
            ``(i) the increased or decreased likelihood that existing 
        consumers of tobacco products will stop using such products; 
        and
            ``(ii) the increased or decreased likelihood that those who 
        do not use tobacco products will start using such products.''.
    (b) Recall Authority.--Section 518(e)(1) (21 U.S.C. 360h(e)(1)) is 
amended by inserting after ``adverse health consequences or death,'' 
the following: ``and for tobacco products that the best public health 
result would be achieved,''.

SEC. 205. GENERAL HEALTH AND SAFETY REGULATION OF TOBACCO PRODUCTS.

    Chapter V (21 U.S.C. 351 et seq.) is amended by adding at the end 
the following:

                    ``Subchapter F--Tobacco Products

``SEC. 571. PROMULGATION OF REGULATIONS.

    ``Any regulations necessary to implement this subchapter shall be 
promulgated not later than 12 months after the date of enactment of 
this subchapter using notice and comment rulemaking (in accordance with 
chapter 5 of title 5, United States Code). Such regulations may be 
revised thereafter as determined necessary by the Secretary.

``SEC. 572. SCIENTIFIC ADVISORY COMMITTEE.

    ``(a) Establishment.--Not later than 1 year after the date of 
enactment of this subchapter, the Secretary shall establish an advisory 
committee, to be known as the `Scientific Advisory Committee', to 
assist the Secretary.
    ``(b) Membership.--
            ``(1) In general.--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.
            ``(2) Limitations.--Notwithstanding section 5(b) of the 
        Federal Advisory Committee Act (5 U.S.C. App. 3), the Secretary 
        may not appoint to the Committee any individual who--
                    ``(A) is in the regular full-time employ of the 
                Federal Government;
                    ``(B) is, or is in the employ of, a manufacturer, 
                distributor, or retailer of a tobacco product, or 
                organization substantially funded by manufacturers, 
                distributors, or retailers of tobacco products;
                    ``(C) is, or is in the employ of, an attorney 
                representing an entity described in subparagraph (B); 
                or
                    ``(D) is, or is in the employ of, a consultant 
                employed by or under retainer to an entity described in 
                subparagraph (B).
            ``(3) Chairperson.--The Secretary shall designate 1 of the 
        members of the advisory committee to serve as chairperson of 
        the Committee.
    ``(c) Compensation and Expenses.--Members of the Scientific 
Advisory Committee shall be entitled to the same compensation and 
expenses as the compensation and expenses provided to members of the 
advisory committees established under section 514(b)(5)(B).
    ``(d) Duties.--The Scientific Advisory Committee shall--
            ``(1) provide assistance to the Secretary;
            ``(2) examine the effects of the alteration of the nicotine 
        yield levels in tobacco products;
            ``(3) examine whether there is a threshold level below 
        which nicotine yields do not produce dependence on the tobacco 
        product involved, and, if so, what that level is; and
            ``(4) review other safety, dependence or health issues 
        relating to tobacco products as determined appropriate by the 
        Secretary.

``SEC. 573. PERFORMANCE STANDARDS.

    ``(a) General Rule.--The Secretary may adopt a performance standard 
under section 514(a)(2) for a tobacco product regardless of whether the 
product has been classified under section 513. Such standards may 
include--
            ``(1) the reduction or elimination of nicotine yields of 
        the product;
            ``(2) the reduction or elimination of other constituents or 
        harmful components of the product; or
            ``(3) standards relating to any other requirement pursuant 
        to section 512(a)(2).
    ``(b) Tobacco Constituents.--The Secretary may require that a 
manufacturer test, report and disclose tobacco and tobacco smoke 
constituents, including labeling and advertising disclosures relating 
to such constituents, including, but not limited to, tar and nicotine.

``SEC. 574. DISCLOSURE AND REPORTING OF TOBACCO AND NONTOBACCO 
              INGREDIENTS AND CONSTITUENTS.

    ``(a) Disclosure of All Ingredients.--
            ``(1) Immediate and annual disclosure.--Not later than 30 
        days after the date of enactment of this subchapter, and 
        annually thereafter, each manufacturer of a tobacco product 
        shall submit to the Secretary an ingredient list for each brand 
        of tobacco product it manufactures that contains the 
        information described in paragraph (2).
            ``(2) Requirements.--The list described in paragraph (1) 
        shall, with respect to each brand or variety of tobacco product 
        of a manufacturer, include--
                    ``(A) a list of all ingredients, constituents, 
                substances, and compounds that are found in or added to 
                the tobacco or tobacco product (including the paper, 
                filter, or packaging of the product if applicable) in 
                the manufacture of the tobacco product, for each brand 
                or variety of tobacco product so manufactured, 
                including, if determined necessary by the Secretary, 
                any material added to the tobacco used in the product 
                prior to harvesting;
                    ``(B) the quantity of the ingredients, 
                constituents, substances, and compounds that are listed 
                under subparagraph (A) in each brand or variety of 
                tobacco product;
                    ``(C) the nicotine content of the product, measured 
                in milligrams of nicotine;
                    ``(D) for each brand or variety of cigarettes--
                            ``(i) the filter ventilation percentage 
                        (the level of air dilution in the cigarette as 
                        provided by the ventilation holes in the 
                        filter, described as a percentage);
                            ``(ii) the pH level of the smoke of the 
                        cigarette; and
                            ``(iii) the tar, nicotine, and carbon 
                        monoxide delivery level under Federal Trade 
                        Commission parameters and any other smoking 
                        conditions established by the Secretary, 
                        reported in milligrams of tar, nicotine, and 
                        carbon monoxide per cigarette;
                    ``(E) for each brand or variety of smokeless 
                tobacco products--
                            ``(i) the pH level of the tobacco;
                            ``(ii) the moisture content of the tobacco 
                        expressed as a percentage of the weight of the 
                        tobacco; and
                            ``(iii) the nicotine content--
                                    ``(I) for each gram of the product, 
                                measured in milligrams of nicotine;
                                    ``(II) expressed as a percentage of 
                                the dry weight of the tobacco; and
                                    ``(III) with respect to unionized 
                                (free) nicotine, expressed as a 
                                percentage per gram of the tobacco and 
                                expressed in milligrams per gram of the 
                                tobacco; and
                    ``(F) any other information determined appropriate 
                by the Secretary.
            ``(3) Methods.--The Secretary shall have the authority to 
        promulgate regulations to establish the methods to be used by 
        manufacturers in making the determinations required under 
        paragraph (2).
    ``(b) Safety Assessments.--
            ``(1) Application to new ingredients.--
                    ``(A) In general.--Not later than 1 year after the 
                date of enactment of this subchapter, and annually 
                thereafter, each manufacturer shall submit to the 
                Secretary a safety assessment for each new ingredient, 
                constituent, substance, or compound that such 
                manufacturer desires to make a part of a tobacco 
                product. Such new ingredient, constituent, substance, 
                or compound shall not be included in a tobacco product 
                prior to approval by the Secretary of such a safety 
                assessment.
                    ``(B) Method of filing.--A safety assessment 
                submitted under subparagraph (A) shall be signed by an 
                officer of the manufacturer who is acting on behalf of 
                the manufacturer and who has the authority to bind the 
                manufacturer, and contain a statement that ensures that 
                the information contained in the assessment is true, 
                complete and accurate.
                    ``(C) Definition of new ingredient.--For purposes 
                of subparagraph (A), the term `new ingredient, 
                constituent, substance, or compound' means an 
                ingredient, constituent substance, or compound listed 
                under subsection (a)(1) that was not used in the brand 
                or variety of tobacco product involved prior to January 
                1, 1998.
            ``(2) Application to other ingredients.--With respect to 
        the application of this section to ingredients, constituents 
        substances, or compounds listed under subsection (a) to which 
        paragraph (1) does not apply, all such ingredients, 
        constituents, substances, or compounds shall be reviewed 
        through the safety assessment process within the 5-year period 
        beginning on the date of enactment of this subchapter. The 
        Secretary shall develop a procedure for the submission of 
        safety assessments of such ingredients, constituents, 
        substances, or compounds that staggers such safety assessments 
        within the 5-year period.
            ``(3) Basis of assessment.--The safety assessment of an 
        ingredient, constituents, substance, or compound described in 
        paragraphs (1) and (2) shall--
                    ``(A) be based on the best scientific evidence 
                available at the time of the submission of the 
                assessment; and
                    ``(B) demonstrate that there is a reasonable 
                certainty among experts qualified by scientific 
                training and experience who are consulted, that the 
                ingredient, constituents, substance, or compound will 
                not present any risk to consumers or the public 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 this subchapter, the Secretary shall promulgate 
        regulations to prohibit the use of any ingredient, constituent, 
        substance, or compound in the tobacco product of a 
        manufacturer--
                    ``(A) if no safety assessment has been submitted by 
                the manufacturer for the ingredient, constituent, 
                substance, or compound as otherwise required under this 
                section; or
                    ``(B) if the Secretary finds that the manufacturer 
                has failed to demonstrate the safety of the ingredient, 
                constituent, substance, or compound that was the 
                subject of the assessment under paragraph (2).
            ``(2) Review of assessments.--
                    ``(A) General review.--Not later than 180 days 
                after the receipt of a safety assessment under 
                subsection (b), the Secretary shall review the findings 
                contained in such assessment and approve or disapprove 
                of the safety of the ingredient, constituents, 
                substance, or compound that was the subject of the 
                assessment. The Secretary may, for good cause, extend 
                the period for such review. The Secretary shall provide 
                notice to the manufacturer of an action under this 
                subparagraph.
                    ``(B) Inaction by secretary.--If the Secretary 
                fails to act with respect to an assessment of an 
                existing ingredient, constituent, substance, or 
                additive during the period referred to in subparagraph 
                (A), the manufacturer of the tobacco product involved 
                may continue to use the ingredient, constituents, 
                substance, or compound involved until such time as the 
                Secretary makes a determination with respect to the 
                assessment.
    ``(d) Right to Know; Full Disclosure of Ingredients to the 
Public.--
            ``(1) In general.--Except as provided in paragraph (3), a 
        package of a tobacco product shall disclose all ingredients, 
        constituents, substances, or compounds contained in the product 
        in accordance with regulations promulgated under section 701(a) 
        by the Secretary.
            ``(2) Disclosure of percentage of domestic and foreign 
        tobacco.--The regulations referred to in paragraph (1) shall 
        require that the package of a tobacco product disclose, with 
        respect to the tobacco contained in the product--
                    ``(A) the percentage that is domestic tobacco; and
                    ``(B) the percentage that is foreign tobacco.
            ``(3) Health disclosure.--Notwithstanding section 301(j), 
        the Secretary may require the public disclosure of any 
        ingredient, constituent, substance, or compound contained in a 
        tobacco product that relates to a trade secret or other matter 
        referred to in section 1905 of title 18, United States Code, if 
        the Secretary determines that such disclosure will promote the 
        public health.

``SEC. 575. TOBACCO PRODUCT WARNINGS, LABELING AND PACKAGING.

    ``(a) Cigarette Warnings.--
            ``(1) In general.--
                    ``(A) Packaging.--It shall be unlawful for any 
                person to manufacture, package, or import for sale or 
                distribution any cigarettes the package of which fails 
                to bear, in accordance with the requirements of this 
                subsection, 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) Advertising.--It shall be unlawful for any 
                manufacturer, importer, distributor or retailer of 
                cigarettes to advertise or cause to be advertised any 
cigarette unless the advertising bears, in accordance with the 
requirements of this subsection, 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.
                    ``(C) Additional warnings.--Beginning on the date 
                that is 18 months after the date of enactment of this 
                subchapter, the Secretary may substitute for, or 
                require warnings in addition to, those otherwise 
                required under subparagraphs (A) and (B) if the 
                Secretary determines that such warnings would be more 
                effective in deterring the use of cigarettes.
            ``(2) Requirements for labeling.--
                    ``(A) Location.--Each label statement required by 
                subparagraph (A) of paragraph (1) shall be located on 
                the upper portion of the front and rear panels of the 
                cigarette package (or carton) directly on the package 
                underneath the cellophane or other clear wrapping and 
                occupy not less than 25 percent of such panels.
                    ``(B) Type and color.--With respect to each label 
                statement required by subparagraph (A) of paragraph 
                (1), 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 Secretary 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 Secretary.
                    ``(C) Exception.--With respect to cigarettes 
                manufactured and distributed prior to January 1, 2000, 
                the provisions of subparagraph (A) shall not apply with 
                respect to the front panel in the case of a flip-top 
                cigarette package (offered for sale on June 1, 1997) 
                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 
                subparagraph (A) of paragraph (1) shall occupy the 
                entire front portion of the flip-top.
            ``(3) Requirements for advertising.--
                    ``(A) Location.--Each label statement required by 
                subparagraph (B) of paragraph (1) shall appear in a 
                conspicuous and prominent format and location at the 
                top of each advertisement within the trim area and 
                shall occupy not less than 20 percent of the area of 
                the advertisement involved.
                    ``(B) Type, color and format.--
                            ``(i) Type.--With respect to each label 
                        statement required by subparagraph (B) of 
                        paragraph (1), 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.
                        Within the 20 percent requirement described in 
                        subparagraph (A), the Secretary may revise the 
                        required type sizes if the Secretary determines 
                        that such revisions will enhance public health 
                        protections.
                            ``(ii) Color.--All the letters in the label 
                        under this subparagraph 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 
                        Secretary.
                            ``(iii) Format.--The label statements under 
                        subparagraph (B) of paragraph (1) shall be 
                        black when the background is white and white 
                        when the background is black, and shall be in 
                        the point size required under this 
                        subparagraph. The label statements shall be 
                        enclosed by a rectangular border that is the 
                        same color as the letters of the statements and 
                        that is the width of the first down stroke of 
                        the capital `W' of the word `WARNING' in the 
                        label statements.
                    ``(C) Language requirement.--The label statements 
                required under paragraph (1)(B) shall be in English, 
                except that--
                            ``(i) in the case of an advertisement that 
                        appears in a newspaper, magazine, periodical or 
                        other publication that is not in English, such 
                        statements shall appear in the predominant 
                        language of the publication; or
                            ``(ii) in the case of any other 
                        advertisement that is not in English, such 
                        statements shall appear in the same language as 
                        that principally used in the advertisement.
            ``(4) Rotation of label statements.--
                    ``(A) Labeling.--The label statements specified in 
                subparagraph (A) of paragraph (1) shall be randomly 
                displayed in each 12 month period, in as equal a number 
                of times as is possible on each brand of the product 
                and be randomly distributed in all areas of the United 
                States in which such product is marketed in accordance 
                with a plan submitted by the manufacturer, importer, 
                distributor or retailer and approved by the Secretary.
                    ``(B) Advertising.--The label statements specified 
                in subparagraph (B) of paragraph (1) shall be rotated 
                quarterly in alternating sequence in advertisements for 
                each such brand of cigarettes in accordance with a plan 
                submitted by the manufacturer, importer, distributor or 
                retailer and approved by the Secretary.
                    ``(C) Approval of plans.--The Secretary shall 
                review each plan submitted by a manufacturer, importer, 
                distributor or retailer of cigarettes under this 
                paragraph and approve such plan if the plan will 
                provide for the equal distribution and display on 
                packaging and the rotation required in advertising 
                under this paragraph and if such plan assures that all 
                of the labels required under subparagraphs (A) and (B) 
                will be displayed by the manufacturer, importer, 
                distributor or retailer at the same time.
    ``(b) Smokeless Tobacco Products.--
            ``(1) In general.--
                    ``(A) Packaging.--It shall be unlawful for any 
                person to manufacture, package, or import for sale or 
                distribution any smokeless tobacco product the package 
                of which fails to bear, in accordance with the 
                requirements of this subsection, one of the following 
                labels:
                        ``WARNING: This Product Can Cause Mouth Cancer.
                        ``WARNING: This Product Can Kill You.
                        ``WARNING: This Product Can Cause Gum Disease 
                        And Tooth Loss.
                        ``WARNING: This Product Is Not A Safe 
                        Alternative To Cigarettes.
                        ``WARNING: This Product Contains Cancer-Causing 
                        Chemicals.
                        ``WARNING: Smokeless Tobacco Is Addictive.
                    ``(B) Advertising.--It shall be unlawful for any 
                manufacturer, importer, distributor or retailer of 
                smokeless tobacco products to advertise or cause to be 
                advertised any smokeless tobacco product unless the 
                advertising bears, in accordance with the requirements 
                of this subsection, one of the following labels:
                        ``WARNING: This Product Can Cause Mouth Cancer.
                        ``WARNING: This Product Can Kill You.
                        ``WARNING: This Product Can Cause Gum Disease 
                        And Tooth Loss.
                        ``WARNING: This Product Is Not A Safe 
                        Alternative To Cigarettes.
                        ``WARNING: This Product Contains Cancer-Causing 
                        Chemicals.
                        ``WARNING: Smokeless Tobacco Is Addictive.
                    ``(C) Additional warnings.--Beginning on the date 
                that is 18 months after the date of enactment of this 
                subchapter, the Secretary may substitute for, or 
                require warnings in addition to, those otherwise 
                required under subparagraphs (A) and (B) if the 
                Secretary determines that such warnings would be more 
                effective in deterring the use of smokeless tobacco 
                products.
            ``(2) Requirements for labeling.--
                    ``(A) Location.--Each label statement required by 
                subparagraph (A) of paragraph (1) shall be located on 
                the 2 most prominent display panels of the product and 
                occupy not less than 25 percent of such panels.
                    ``(B) Type and color.--With respect to each label 
                statement required by subparagraph (A) of paragraph 
                (1), 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 Secretary to reflect the length of the required 
                statement and the size of the package. 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 
                Secretary.
            ``(3) Advertising and rotation.--The provisions of 
        paragraph (3) and (4) of subsection (a) shall apply to 
        advertisements for smokeless tobacco products and the rotation 
        of the label statements required under paragraph (1)(A) on such 
        products.
    ``(c) Other Tobacco Products.--The Secretary may prescribe such 
regulations as may be necessary to establish warning labels for other 
tobacco product packaging, labeling and advertising.
    ``(d) Construction.--
            ``(1) In general.--Nothing in this section shall be 
        construed to limit the ability of the Secretary to change the 
        text or layout of any of the warning statements, or any of the 
        labeling provisions, under subsections (a) and (b) and other 
        provisions of this Act, if determined necessary by the 
        Secretary in order to make such statements or labels larger, 
        more prominent, more conspicuous, or more effective.
            ``(2) Unfair acts.--Nothing in this section (other than the 
        requirements of subsections (a), (b) and (c)) shall be 
        construed to limit or restrict 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.
    ``(e) Limited Preemption.--
            ``(1) State and local action.--No warning label with 
        respect to cigarettes or smokeless tobacco products, or any 
        other tobacco product for which warning labels have been 
        required under this section, other than the warning labels 
        required under this Act, shall be required by any State or 
        local statute or regulation to be included on any package of 
        cigarettes or a smokeless tobacco product.
            ``(2) Effect on liability law.--Nothing in this section 
        shall relieve any person from liability at common law or under 
        State statutory law to any other person.
    ``(f) Electronic Medium Advertising.--It shall be unlawful to 
advertise tobacco products on any medium of electronic communications 
subject to the jurisdiction of the Federal Communications Commission.

``SEC. 576. PRESERVATION OF STATE AND LOCAL AUTHORITY.

    ``Except as otherwise provided for in section 575(e), nothing in 
this subchapter shall be construed as prohibiting a State or locality 
from imposing requirements, prohibitions, penalties or other measures 
to further the purposes of this subchapter that are in addition to the 
requirements, prohibitions, or penalties required under this 
subchapter. State and local governments may impose additional tobacco 
product control measures to further restrict or limit the use of such 
products.

``SEC. 577. RESTRICTIONS ON YOUTH ACCESS TO TOBACCO PRODUCTS.

    ``(a) In General.--The Secretary shall restrict the access of 
minors to tobacco products.
    ``(b) State Licensing.--
            ``(1) In general.--Except as provided in paragraph (2), in 
        order to receive any amounts under section 111 of the Healthy 
        Kids Act, a State shall have in place a program that meets or 
        exceeds (as determined by the Secretary) the requirements of 
        the model State program described in paragraph (3) under which 
        a retailer would be required to obtain a State or local license 
        to sell or otherwise distribute tobacco products directly to 
        consumers in such State.
            ``(2) Start-up period.--
                    ``(A) In general.--The Secretary may waive the 
                requirement of paragraph (1) for such time as the 
                Secretary determines is necessary, after promulgation 
                of the model program described in paragraph (3), to 
                permit the legislature of a State to meet and enact 
                laws to comply with paragraph (1) and to permit the 
                State to implement the program described in paragraph 
                (1).
                    ``(B) Eligibility.--To be eligible for a waiver 
                under subparagraph (A), the Governor of the State 
                involved shall certify to the Secretary in writing that 
                the State intends to implement a program that meets the 
                requirements of this section at the earliest possible 
                opportunity. If, subsequent to such notification, the 
                Secretary determines that the State has failed to 
                implement such a program, the Secretary may recover any 
                funds distributed to the State under section 111 of the 
                Healthy Kids Act.
            ``(3) Model program.--Not later than 12 months after the 
        date of enactment of this subchapter, the Secretary shall 
        promulgate a model State program. Such model State program 
        shall at a minimum--
                    ``(A) provide for the collection of licensing fees 
                by the State or locality to defray the costs of 
                administering the program;
                    ``(B) prohibit retailers from selling or otherwise 
                distributing tobacco products directly to consumers in 
                a State unless such retailers have in effect tobacco 
                licenses issued or renewed in accordance with State or 
                local laws;
                    ``(C) provide for the notification of every person 
                in the State who is engaged in the distribution at 
                retail of tobacco products of the license requirement 
                and of the date by which such person shall have 
                obtained a license in order to continue to distribute 
                such products;
                    ``(D) prohibit licensed retailers from selling or 
                otherwise distributing tobacco products to minors;
                    ``(E) provide for penalties of up to $50,000 for 
                each violation of the requirements under such program 
                relating to the sale or distribution of tobacco 
                products without a license and for appropriate 
                penalties for other violations of laws relating to 
                youth access to tobacco products;
                    ``(F) require retailers to comply with the 
                applicable requirements of this section and any 
                regulations relating to this section; and
                    ``(G) provide for the suspension or revocation of a 
                license in the case of a retailer that repeatedly sells 
                or distributes tobacco products to individuals in 
                violation of subsection (a) or State or local law.
    ``(c) Penalties.--The Secretary shall promulgate regulations 
providing for the application of penalties for the sale or distribution 
of tobacco products to minors in violation of the requirements of 
subsection (a) that are consistent with the following:
            ``(1) Employees of retailers.--In the case of an employee 
        of a retailer who distributes a tobacco product to a minor in 
        violation of subsection (a), the regulations shall provide for 
        the application of a civil money penalty of--
                    ``(A) $25 for the 1st violation;
                    ``(B) $50 for the 2nd violation; and
                    ``(C) $150 for the 3rd and subsequent violations.
            ``(2) Minors.--In the case of a minor who purchases or 
        attempts to purchase a tobacco product in violation of 
        subsection (a) (other than a minor engaged in an authorized 
        sting or a law enforcement operation), the regulations may 
        provide for civil money penalties, loss of driving privileges, 
        or other penalties.
            ``(3) Retailers.--In the case of a retailer who distributes 
        a tobacco product to a minor in violation of subsection (a), 
        the regulations shall provide for the application of a civil 
        money penalty of at least--
                    ``(A) $250 for the 1st violation;
                    ``(B) $500 for the 2nd violation;
                    ``(C) $1,500 for the 3rd violation;
                    ``(D) $5,000 for the 4th violation; and
                    ``(E) $10,000 for the 5th and subsequent 
                violations.
    ``(d) Enforcement.--
            ``(1) In general.--The Secretary may enter into agreements 
        with, and provide grants to, States to enforce this section. 
        Any State that elects to enforce the provisions of this section 
        within the State shall conduct sting operations and other 
        compliance checks and enforce State laws under this section 
        through the use of penalties described in subsection (c) so as 
        to ensure that minors are successful in purchasing tobacco 
        products less than 5 percent of the time.
            ``(2) Requirements.--The Secretary may by regulation 
        implement such requirements as the Secretary determines 
        necessary to ensure that any compliance checks performed by the 
        State under paragraph (1) are accurate.
            ``(3) Violations.--If the Secretary determines that the 
        provisions of subsection (a) are being or have been violated 
        within a State, the Secretary shall have the authority to 
        enforce such provisions in the State.
    ``(e) State Compliance.--Beginning with the 3rd full calendar year 
following the date of enactment of this subchapter, if, with respect to 
a State, the Secretary determines that minors are successful in 
purchasing tobacco products more than 5 percent of the time, the 
Secretary shall notify the State and reduce payments to the State under 
section 111 of the Healthy Kids Act by 1 percent for each percentage 
point by which the State is not in compliance with this subsection.
    ``(f) Preemption.--The provisions of this section shall not preempt 
any provision of State or local law that provides greater restrictions 
than those required in this section.
    ``(g) Federal Licensing of Entities.--
            ``(1) In general.--The Secretary, 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--
                    ``(A) on any military installation (as defined in 
                section 2801(c)(2) of title X, United States Code);
                    ``(B) in any United States embassy;
                    ``(C) in any facility owned and operated by the 
                Federal Government either in the United States or in a 
                foreign country;
                    ``(D) in any duty-free shop located within the 
                United States; or
                    ``(E) through any other Federal entity or on any 
                other Federal property as determined appropriate by the 
                Secretary.
            ``(2) Requirements.--The program established under 
        paragraph (1) shall apply requirements (including those for 
        penalties, suspensions, and revocations) similar to those 
        required to be implemented by States under this section.
            ``(3) Indian tribes and tribal lands.--For purposes of 
        applying and enforcing the provisions of this section 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.

``SEC. 578. PUBLIC DISCLOSURE OF HEALTH RESEARCH.

    ``(a) Submission by Manufacturers.--Not later than 3 months after 
the date of the enactment of this subchapter and thereafter as required 
by the Secretary, each manufacturer of a tobacco product shall submit 
to the Secretary a copy of each document in the manufacturer's 
possession or control, directly or indirectly--
            ``(1) relating, referring, or pertaining to--
                    ``(A) any health effects in humans or animals, 
                including addiction, caused by the use of tobacco 
                products or components of tobacco products;
                    ``(B) the engineering, manipulation or control of 
                nicotine in tobacco products;
                    ``(C) the sale or marketing of tobacco products;
                    ``(D) any research involving safer tobacco 
                products; or
                    ``(E) such other matters as the Secretary may 
                prescribe; or
            ``(2) produced, or ordered to be produced, by the tobacco 
        product manufacturer in any health-related civil or criminal 
        proceeding, judicial or administrative, that has been commenced 
        by the United States, an agency of the United States, a State 
        or local governmental entity, or any person, or on behalf of 
        such an entity or person, including attorney-client and other 
        documents produced or ordered to be produced for in camera 
        inspection.
    ``(b) Additional Information.--For the purpose of obtaining 
additional information relating to the matters in subsection (a), the 
Secretary may hold hearings, require testimony, the deposition of 
witnesses, the answering of interrogatories, or enter into and inspect 
facilities.
    ``(c) Disclosure by the Secretary.--Starting not later than 6 
months after the date of the enactment of this subchapter, the 
Secretary shall begin to make available to the public, using the 
Internet and other means, the documents submitted under subsection (a).
    ``(d) Protection of Certain Information.--The Secretary shall not 
disclose information obtained under this section if such information is 
entitled to protection as a trade secret or under the attorney-client 
privilege unless the Secretary determines that the disclosure of such 
information is necessary to promote the public health.
    ``(e) Enforcement.--Notwithstanding any other provision of law, 
manufacturers of tobacco products shall provide any deposition, 
documents, or other information, answer any interrogatories, and allow 
any entry or inspection required pursuant to this section.
    ``(f) Rule of Construction.--Nothing in this section shall be 
construed to interfere in any way with the discovery rights of courts 
or parties in civil or criminal proceedings, administrative or 
judicial, involving tobacco products, or the right of access to such 
documents under any other provision of law.
    ``(g) Definition.--In this section:
            ``(1) Documents.--The term `documents' includes originals 
        and drafts of any kind of written or graphic matter, regardless 
        of the manner of production or reproduction, of any kind of 
        description, whether sent or received or neither, and all 
        copies thereof that are different in any way from the original 
(whether by interlineation, receipt stamp, notation, indication of 
copies sent or received or otherwise) regardless of whether 
`confidential', `privileged', or otherwise, including any paper, book, 
account, photograph, blueprint, drawing, agreement, contract, 
memorandum, advertising material, letter, telegram, object, report, 
record, transcript, study, note, notation, working paper, intra-office 
communication, intra-department communication, interdepartment 
communication, chart, minute, index sheet, routing sheet, computer 
software, computer data, delivery ticket, flow sheet, price list, 
quotation, bulletin, circular, manual, summary, recording of telephone 
or other conversation or of interviews, or of conferences, or any other 
written, recorded, transcribed, punched, taped, filmed, or graphic 
matter, regardless of the manner produced or reproduced. Such term 
shall also include any tape, recording, videotape, computerization, or 
other electronic recording, whether digital or analog or a combination 
of the two.
            ``(2) Manufacturer of a tobacco product.--The term 
        `manufacturer of a tobacco product' also includes the Tobacco 
        Institute, the Council for Tobacco Research, the Smokeless 
        Tobacco Council, the Center for Indoor Air Research, or any 
        other trade association or entity that is primarily funded by 
        persons who manufacture a tobacco product.

``SEC. 579. CITIZEN SUITS.

    ``(a) Authority.--Any individual on his or her own behalf may 
commence a civil action--
            ``(1) against any person who is alleged to be in violation 
        of this subchapter, in the district court for the district in 
        which the alleged violation occurred or in which the defendant 
        resides or is found; or
            ``(2) against the Secretary or the Commissioner where there 
        is alleged a failure of the Secretary or Commissioner to 
        perform any act or duty required under this subchapter, in a 
        district court for the district in which an alleged failure to 
        perform occurred or in the district court of the District of 
        Columbia.
    ``(b) Jurisdiction.--The district courts of the United States shall 
have jurisdiction, without regard to the amount in controversy or the 
citizenship of the parties, to enforce the provisions of this 
subchapter, or to order the Secretary to perform such act or duty, as 
the case may be, and to apply any appropriate civil penalties. The 
district courts of the United States shall have jurisdiction to compel 
action by an agency where such action is found to be unreasonably 
delayed, except that such an action may not be maintained unless the 
plaintiff has provided the Secretary with a notice of the intent of the 
plaintiff to file such action at least 90 days prior to the filing of 
such action.
    ``(c) Costs and Damages.--A court under subsection (b) may award 
costs of litigation, including reasonable attorney's fees, to any party 
where the court determines that such an award is appropriate. No 
damages of any kind, whether compensatory or punitive, may be awarded 
to the individual in actions described in subsection (a)(2). Any 
damages awarded to the Federal Government shall be paid to the 
Treasury.

``SEC. 580. AGRICULTURAL PRODUCERS.

    ``The Secretary may not promulgate any regulation under this 
subchapter 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. This 
section shall not be construed to limit the regulatory requirements 
that may be imposed on producers who are also manufacturers under this 
Act.

``SEC. 581. AUTHORITY OF SECRETARY.

    ``To carry out this subchapter, the Secretary may hold hearings, 
administer oaths, issue subpoenas, require the testimony or deposition 
of witnesses, the production of documents, or the answering of 
interrogatories, or, upon presentation of the proper credentials, enter 
and inspect facilities. In the case of a refusal of a person to obey a 
subpoena, any district court of the United States for the district in 
which such person is found, resides or conducts business, upon 
application by the Commissioner, shall have jurisdiction to issue an 
order requiring such person to appear and give testimony or to appear 
and produce evidence or both. The failure to obey such an order of the 
court may be punished by the court as contempt thereof, and by 
penalties of up to $25,000 per day.''.

SEC. 206. REPEALS.

    The following provisions of law shall be 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.).

SEC. 207. AUTHORITY OF FEDERAL TRADE COMMISSION.

    Nothing in this title, or an amendment made by this title, shall be 
construed to in any way reduce the jurisdiction of the Federal Trade 
Commission over the advertising of tobacco products.

  TITLE III--YOUTH SMOKING REDUCTION TARGETS AND INCENTIVES TO REDUCE 
                          YOUTH SMOKING RATES

SEC. 301. PURPOSE.

    It is the purpose of this title to encourage the achievement of 
reductions in the proportion of underage consumers of tobacco products 
through the imposition of additional financial deterrents relating to 
tobacco products if certain underage tobacco-use reduction targets are 
not met.

SEC. 302. CHILD TOBACCO USE SURVEYS.

    (a) Annual Performance Survey.--Not later than 1 year after the 
date of the enactment of this Act and annually thereafter the Secretary 
shall conduct a survey to determine, in accordance with subsection 
(b)--
            (1) the percentage of all individuals under 18 years of age 
        who used a tobacco product within the past 30 days; and
            (2) the percentage of all individuals under 18 years of age 
        who identify each brand of tobacco product as the usual brand 
        smoked or used within the past 30 days.
    (b) Exclusion of Certain Ages.--The Secretary shall exclude from 
the survey conducted under subsection (a), children under the age of 12 
years (or such other lesser age as the Secretary may establish to 
strengthen the validity of the survey).
    (c) Baseline Level.--
            (1) In general.--The baseline level of the child tobacco 
        product use (referred to in this title as the ``baseline 
        level'') is the percentage of individuals under 18 years of age 
        determined to have used the tobacco product in the first annual 
        performance survey for 1999.
            (2) Manufacturers.--The baseline level of tobacco product 
        use with respect to a manufacturer is the percentage of 
        individuals under 18 years of age determined to have used any 
        tobacco product of such manufacturer in the first annual 
        performance survey for 1999.
    (d) Additional Measures.--In order to increase the understanding of 
youth tobacco product use, the Secretary may, for informational 
purposes only, add additional measures to the survey under subsection 
(a), conduct periodic or occasional surveys at other times, and conduct 
surveys of other populations such as young adults. The results of such 
surveys shall be made available to manufacturers and the public to 
assist in efforts to reduce youth tobacco use.
    (e) Administration.--
            (1) Results.--The Secretary shall establish a scientific 
        advisory board to ensure that surveys conducted under this 
        section produce results that are reasonably precise and valid.
            (2) Technical adjustments.--The Secretary may make 
        technical changes in the manner in which the surveys are 
        conducted so long as adjustments are made to ensure that the 
        results of the surveys are comparable from year to year.
            (3) Participation in survey.--Notwithstanding any other 
        provision of law, the Secretary may conduct a survey involving 
        minors if the results of such survey with respect to such 
        minors are kept confidential and not disclosed.

SEC. 303. REDUCTION IN UNDERAGE TOBACCO PRODUCT USAGE.

    (a) Annual Determination.--The Secretary shall annually determine, 
based on the annual performance surveys under section 302, whether the 
required percentage reduction (as described in subsection (b)) in the 
underage use of tobacco products for a year has been achieved for the 
year involved. Such determination shall be based on--
            (1) with respect to cigarette products, the average annual 
        percentage prevalence of the use of tobacco products by 
        individuals who are under 18 years of age (as determined under 
        section 302(a)) for the year involved as compared to the 
        baseline level for cigarette products (as determined under 
        section 302(c)); and
            (2) with respect to smokeless tobacco products, the average 
        annual percentage prevalence of the use of smokeless tobacco 
        products by individuals who are under 18 years of age (as 
        determined under section 302(a)) for the year involved as 
        compared to the baseline level for smokeless tobacco products 
        (as determined under section 302(c)).
    (b) Percentage Reduction in Underage Use of Tobacco Products.--For 
purposes of this section, the required percentage reduction from the 
baseline level in the percentage underage use of tobacco products with 
respect to each tobacco product shall be as follows:
            (1) Cigarettes.--With respect to cigarettes--
                    (A) the percentage reduction in the percentage use 
                of cigarettes shall be at least 20 percent for each of 
                the calendar years 2001 and 2002;
                    (B) the percentage reduction in the percentage use 
                of cigarettes shall be at least 40 percent for each of 
the calendar years 2003 and 2004;
                    (C) the percentage reduction in the percentage use 
                of cigarettes shall be at least 55 percent for each of 
                the calendar years 2005 through 2007; and
                    (D) the percentage reduction in the percentage use 
                of cigarettes shall be at least 67 percent for calendar 
                year 2008 and each subsequent calendar year.
            (2) Smokeless tobacco products.--With respect to smokeless 
        tobacco products--
                    (A) the percentage reduction in the percentage use 
                of smokeless tobacco products shall be at least 15 
                percent for each of the calendar years 2001 and 2002;
                    (B) the percentage reduction in the percentage use 
                of smokeless tobacco products shall be at least 25 
                percent for each of the calendar years 2003 and 2004;
                    (C) the percentage reduction in the percentage use 
                of smokeless tobacco products shall be at least 35 
                percent for each of the calendar years 2005 and 2007; 
                and
                    (D) the percentage reduction in the percentage use 
                of smokeless tobacco products shall be at least 45 
                percent for calendar year 2008 and each subsequent 
                calendar year.
    (c) Application to Manufacturer.--With respect to the average 
annual percentage prevalence of the use of each manufacturer's brands 
of tobacco product by individuals who are under 18 years of age, as 
determined on the basis of the annual performance survey conducted 
under section 302(a), each manufacturer which manufactured a brand or 
brands of tobacco product on or before the date of the enactment of 
this Act shall reduce the percentage of children who use such 
manufacturer's brand or brands in accordance with the percentage 
reductions required under subsection (b).
    (d) Report.--Not later than December 31, 2005, the Secretary shall 
prepare and submit to the appropriate committees of Congress a report 
concerning the progress made in achieving percentage reductions in the 
use of tobacco products together with the recommendations, if any, of 
the Secretary for stronger reductions in calendar years after 2008.

SEC. 304. NONCOMPLIANCE.

    (a) Industry-Wide Penalty.--If, with respect to a year, the 
Secretary determines under section 303(a) that the required percentage 
reduction for either cigarettes or smokeless tobacco products has not 
been achieved as required under section 303(b), the Secretary shall 
impose an industry-wide penalty on the manufacturers of such product in 
an amount that is equal to $.10 cents for each unit of the tobacco 
product involved that is manufactured and distributed for consumer use 
in the year following the year in which the noncompliance occurs.
    (b) Manufacturer-Specific Penalty.--
            (1) In general.--With respect to each manufacturer for a 
        year, if the Secretary determines under section 303(a) that the 
        required percentage reduction for either cigarettes or 
        smokeless tobacco products have not been achieved by such 
        manufacturer as required under section 303(b), the Secretary 
        shall impose a penalty on such manufacturer in an amount equal 
        to
                    (A) $.10 cents if the noncompliance factor exceeds 
                0 but does not exceed 10;
                    (B) $.20 cents if the noncompliance factor exceeds 
                10 but does not exceed 15;
                    (C) $.30 cents if the noncompliance factor exceeds 
                15 but does not exceed 20; and
                    (D) $.40 cents if the noncompliance factor exceeds 
                20;
        for each unit of a tobacco product that is manufactured and 
        distributed for consumer use by such manufacturer in the year 
        following the year for which the determination is made.
            (2) Noncompliance factor.--The noncompliance factor of a 
        manufacturer for a year shall be equal to the percentage 
        reduction required under section 303(b) for the year less the 
        actual percentage reduction for the year (as determined under 
        paragraph (3)).
            (3) Actual percentage reduction.--The actual percentage 
        reduction of a manufacturer shall be equal to 1 less the ratio 
        of--
                    (A) the percentage of individuals under 18 years of 
                age who have been determined to use the manufacturer's 
                products (as determined under section 302(a)) for the 
                year involved; and
                    (B) the baseline level for the manufacturer (as 
                determined under section 302(c));
        multiplied by 100.
    (c) De Minimis Rules.--
            (1) Exemption.--The Secretary shall not impose a penalty on 
        a manufacturer under subsection (b) if the Secretary determines 
        that the tobacco products manufactured by such manufacturer 
are used by less than 0.5 percent of the total number of children 
determined to have used such tobacco products for the year involved.
            (2) Penalty.--If the Secretary determines that--
                    (A) either--
                            (i) the tobacco products manufactured by a 
                        manufacturer under the baseline survey 
                        conducted under section 302(c), are used by 
                        less than 0.5 percent of the total number of 
                        children determined to have used such tobacco 
                        products for the year involved; or
                            (ii) the manufacturer was not manufacturing 
                        tobacco products in the year the baseline 
                        survey was conducted; and
                    (B) under an annual survey conducted under section 
                302(a) for the year involved, the tobacco products 
                manufactured by such manufacturer are used by more than 
                0.5 percent of the total number of children determined 
                to have used such tobacco products for the year 
                involved;
        the Secretary shall impose a penalty on such manufacturer in an 
        amount equal to $.40 cents for each unit of the tobacco product 
        involved that is manufactured and distributed for consumer use 
        in the year following the year for which the determination is 
        made.
    (d) Noncompliance Fees for Consecutive Violations.--
            (1) In general.--If a manufacturer of a tobacco product, 
        the cigarette industry, or the smokeless tobacco industry fails 
        to comply with the reductions required under this title in 3 or 
        4 consecutive years, the noncompliance fee that is required to 
        be paid by the manufacturer, cigarette industry, or smokeless 
        tobacco industry, whichever is applicable, under this section 
        for each unit of tobacco products manufactured by such 
        manufacturer or industry which is distributed for consumer use 
        in the year following the year in which the noncompliance 
        occurs, shall be the amount determined under subsection (b) for 
        the year multiplied by 2.
            (2) Additional noncompliance.--If a manufacturer or 
        industry described in paragraph (1) fails to comply with the 
        reductions required under this title--
                    (A) in 5 or 6 consecutive years, the noncompliance 
                fee described in such paragraph shall be the amount 
                determined under subsection (b) for the year multiplied 
                by 3; and
                    (B) in 7 or more consecutive years, the 
                noncompliance fee described in such paragraph shall be 
                the amount determined under subsection (b) for the year 
                multiplied by 4.
    (e) Prohibition on Single-Pack Sales in Cases of Repeated 
Noncompliance.--Not later than 2 years after the date of enactment of 
this Act, the Secretary shall establish regulations to prohibit the 
sale of single packs of a manufacturer's tobacco products in cases of 
repeated noncompliance with the reductions required under section 
303(b). Such regulations shall require that, if a manufacturer fails to 
comply with such reductions in 4 or more consecutive years, the 
manufacturer's tobacco products may be sold in the following year only 
in packages containing not less than 10 units of the product per 
package (200 cigarettes per package in the case of cigarettes, and a 
corresponding package size for other tobacco products).
    (f) Required Generic Packaging in Severe Cases of Repeated 
Noncompliance.--Not later than 2 years after the date of enactment of 
this Act, the Secretary shall establish regulations to require units 
and packages of a manufacturer's tobacco products to have generic 
packaging in severe cases of repeated noncompliance with the reductions 
required under section 303(b). Such regulations shall require that, if 
a manufacturer fails to comply with such reductions in 6 or more 
consecutive years, the manufacturer's tobacco products may be sold in 
the following year only in units and packages whose packaging contains 
no external images, logos, or text (other than any required labels), 
except that the brand name and the identifier `tobacco' may appear on 
the packaging in block lettering in black type on a white background.
    (g) Payment.--The penalty to be paid by a manufacturer under this 
section shall be paid on a quarterly basis, with payments due not later 
than 30 days after the end of each calendar quarter.
    (h) Procedures.--In assessing penalties under this section, the 
Secretary shall have in place procedures to take into account the 
effect that the margin of error of the annual survey may have on the 
amounts of penalties assessed to manufacturers.
    (i) Other Products.--The Secretary may promulgate regulations 
requiring reductions in the use of other tobacco products by 
individuals under 18 years of age. Such regulations shall contain 
provisions for the application of monetary penalties for the failure of 
manufacturers to achieve such reductions.

SEC. 305. RULEMAKING PROCEDURES.

    (a) Docket.--Not later than the date of the proposal of any 
regulation under this title, the Secretary shall establish a rulemaking 
docket for action on such regulation (referred to in this section as a 
``rule''). Whenever a rule applies only within a particular State, a 
second (identical) docket shall be established in the appropriate 
regional office of the Department of Health and Human Services.
    (b) Publication.--In the case of any rule to which this section 
applies, notice of proposed rulemaking shall be published in the 
Federal Register, as provided under section 553(b) of title 5, United 
States Code, shall be accompanied by a statement of its basis and 
purpose and shall specify the period available for public comment 
(hereinafter referred to as the ``comment period''). The notice of 
proposed rulemaking shall also state the docket number, the location or 
locations of the docket, and the times it will be open to public 
inspection. The statement of basis and purpose shall include a summary 
of--
            (1) the factual data on which the proposed rule is based;
            (2) the methodology used in obtaining the data and in 
        analyzing the data; and
            (3) the major legal interpretations and policy 
        considerations underlying the proposed rule.
    (c) Public Comment.--
            (1) Public inspection.--The rulemaking docket required 
        under subsection (a) shall be open for inspection by the public 
        at reasonable times specified in the notice of proposed 
        rulemaking. Any person may copy documents contained in the 
        docket. The Secretary shall provide copying facilities which 
        may be used at the expense of the person seeking copies, but 
        the Secretary may waive or reduce such expenses in such 
        instances as the public interest requires. Any person may 
        request copies by mail if the person pays the expenses, 
        including personnel costs to do the copying.
            (2) Comments and other material in docket.--
                    (A) Comments.--Promptly upon receipt by the 
                Secretary, all written comments and documentary 
                information on the proposed rule received from any 
                person for inclusion in the docket during the comment 
                period shall be placed in the docket. The transcript of 
                public hearings, if any, on the proposed rule shall 
                also be included in the docket promptly upon receipt 
                from the person who transcribed such hearings. All 
                documents which become available after the proposed 
                rule has been published and which the Secretary 
                determines are of central relevance to the rulemaking 
                shall be placed in the docket as soon as possible after 
                their availability.
                    (B) Requirement to place in docket.--The drafts of 
                proposed rules submitted by the Secretary to the Office 
                of Management and Budget for any interagency review 
                process prior to the proposal of any such rule, all 
                documents accompanying such drafts, and all written 
                comments thereon by other agencies and all written 
                responses to such written comments by the Secretary 
                shall be placed in the docket no later than the date of 
                proposal of the rule. The drafts of the final rule 
                submitted for such review process prior to promulgation 
                and all such written comments thereon, all documents 
                accompanying such drafts, and written responses thereto 
                shall be placed in the docket no later than the date of 
                promulgation.
    (3) Limitation.--No objection may be submitted with respect to a 
rule under this section on a date that is more than 90 days after the 
date on which the rule is published under subsection (b).
    (d) Opportunity for Oral Presentation.--In promulgating a rule to 
which this section applies--
            (1) the Secretary shall allow any person to submit written 
        comments, data, or documentary information;
            (2) the Secretary shall give interested persons an 
        opportunity for the oral presentation of data, views, or 
        arguments, in addition to an opportunity to make written 
        submissions;
            (3) a transcript shall be kept of any oral presentation; 
        and
            (4) the Secretary shall keep the record of such proceeding 
        open for 30 days after completion of the proceeding to provide 
        an opportunity for submission of rebuttal and supplementary 
        information.
    (e) Material to Accompany Rule.--
            (1) In general.--The promulgated rule shall be accompanied 
        by--
                    (A) a statement of basis and purpose like that 
                referred to in subsection (b) with respect to a 
                proposed rule; and
                    (B) an explanation of the reasons for any major 
                changes in the promulgated rule from the proposed rule.
            (2) Responses.--The promulgated rule shall also be 
        accompanied by a response to each of the significant comments, 
        criticisms, and new data submitted in written or oral 
        presentations during the comment period.
            (3) Limitation.--The promulgated rule may not be based (in 
        part or whole) on any information or data which has not been 
        placed in the docket as of the date of such promulgation.
    (f) Judicial Review.--
            (1) In general.--The record for judicial review shall 
        consist exclusively of the material referred to in subsection 
        (b), subparagraph (A) of subsection (c)(2), and paragraphs (1) 
        and (2) of subsection (e).
            (2) Limitations.--Only an objection to a rule or procedure 
        which was raised with reasonable specificity during the period 
        for public comment (including any public hearing) may be raised 
        during judicial review. If the person raising an objection can 
        demonstrate to the Secretary that it was impracticable to raise 
        such objection within such time or if the grounds for such 
        objection arose after the period for public comment (but within 
        the time specified for judicial review) and if such objection 
        is of central relevance to the outcome of the rule, the 
        Secretary shall convene a proceeding for reconsideration of the 
        rule and provide the same procedural rights as would have been 
        afforded had the information been available at the time the 
        rule was proposed. If the Secretary refuses to convene such a 
        proceeding, such person may seek review of such refusal in the 
        United States court of appeals for the appropriate circuit. 
        Such reconsideration shall not postpone the effectiveness of 
        the rule. The effectiveness of the rule may be stayed during 
        such reconsideration, however, by the Secretary or the court 
        for a period not to exceed 3 months.
    (g) Jurisdiction.--The sole forum for challenging procedural 
determinations made by the Secretary under this section shall be in the 
United States court of appeals for the appropriate circuit at the time 
of the substantive review of the rule. No interlocutory appeals shall 
be permitted with respect to such procedural determinations. In 
reviewing alleged procedural errors, the court may invalidate the rule 
only if the errors were so serious and related to matters of such 
central relevance to the rule that there is a substantial likelihood 
that the rule would have been significantly changed if such errors had 
not been made.
    (h) Reversal of Secretary's Action.--In the case of review of any 
action of the Secretary to which this section applies, the court may 
reverse any such action found to be--
            (1) arbitrary, capricious, an abuse of discretion, or 
        otherwise not in accordance with law;
            (2) contrary to constitutional right, power, privilege, or 
        immunity;
            (3) in excess of statutory jurisdiction, authority, or 
        limitations, or short of statutory right; or
            (4) without observance of procedure required by law, if--
                    (A) such failure to observe such procedure is 
                arbitrary or capricious;
                    (B) the requirement of subsection (f)(2) has been 
                met; and
                    (C) the condition of the last sentence of 
                subsection (g) is met.
    (i) Deadlines.--Each statutory deadline for promulgation of rules 
to which this section applies which requires promulgation less than 6 
months after date of proposal may be extended to not more than 6 months 
after date of proposal by the Secretary upon a determination that such 
extension is necessary to afford the public, and the agency, adequate 
opportunity to carry out the purposes of this section.
    (j) Effective Date.--The requirements of this section shall take 
effect with respect to any rule the proposal of which occurs after 90 
days after the date of enactment of this Act.
    (k) Rule of Construction.--Nothing in this Act shall be construed 
to authorize judicial review of regulations or orders of the Secretary 
under this Act, except as otherwise provided for in this title.
    (l) No Stay.--In any action respecting the promulgation of 
regulations under this title or the administration or enforcement of 
this title no court shall grant any stay, injunctive, or similar relief 
before final judgment by such court in such action.
    (m) Public Participation.--It is the intent of Congress that, 
consistent with the policy of the Administrative Procedures Act, the 
Secretary in promulgating any regulation under this title, including a 
regulation subject to a deadline, shall ensure a reasonable period for 
public participation of at least 30 days, except as otherwise expressly 
provided for.

SEC. 306. MISCELLANEOUS PROVISIONS.

    (a) Judicial Review.--A manufacturer of tobacco products may seek 
judicial review of any action under this title only after a penalty has 
been assessed and paid by the manufacturer to the Department of the 
Treasury and only in the United States District Court for the District 
of Columbia. In an action by a manufacturer seeking judicial review of 
an annual performance survey, the manufacturer may prevail--
            (1) only if the manufacturer shows that the results of the 
        performance survey were arbitrary and capricious; and
            (2) only to the extent that the manufacturer shows that it 
        would have been required to pay a substantially lesser penalty 
        if the results of the performance survey were not arbitrary and 
        capricious.
    (b) Prohibition.--No stay or other injunctive relief may be granted 
by the Secretary or any court that has the effect of enjoining the 
imposition and collection of penalties to be applied under this 
section.
    (c) Definitions.--As used in this title:
            (1) Child.--The term ``child'' means, except as provided in 
        section 302(b), an individual who is under the age of 18.
            (2) Manufacturer.--The term ``manufacturer'' includes any 
        person who imports a finished tobacco product.

           TITLE IV--TOBACCO TRANSITION ASSISTANCE TRUST FUND

SEC. 401. TOBACCO TRANSITION ASSISTANCE TRUST FUND.

    (a) Establishment.--There is established in the Treasury of the 
United States a trust fund to be known as the ``Tobacco Transition 
Trust Fund'', consisting of such amounts as may be appropriated or 
credited to the Trust Fund.
    (b) Transfers to Trust Fund.--There are appropriated and 
transferred to the Trust Fund for each fiscal year amounts made 
available to the Trust Fund as provided for in section 101(d)(7).
    (c) Repayable Advances.--
            (1) Authorization.--There are authorized to be appropriated 
        to the Trust Fund, as repayable advances, such sums as may from 
        time to time be necessary to make expenditures under subsection 
        (d).
            (2) Repayment with interest.--Repayable advances made to 
        the Trust Fund shall be repaid, and interest on the advances 
        shall be paid, to the general fund of the Treasury when the 
        Secretary of the Treasury determines that moneys are available 
        in the Trust Fund to make the payments.
            (3) Rate of interest.--Interest on an advance made under 
        this subsection shall be at a rate determined by the Secretary 
        of Treasury (as of the close of the calendar month preceding 
        the month in which the advance is made) that is equal to the 
        current average market yield on outstanding marketable 
        obligations of the United States with remaining period to 
        maturity comparable to the anticipated period during which the 
        advance will be outstanding.
    (d) Expenditures From Trust Fund.--
            (1) In general.--Subject to paragraph (2), amounts in the 
        Trust Fund shall be available for making expenditures to 
        provide transition assistance to tobacco producers and tobacco-
        growing communities to adjust to reduced demand for tobacco, 
        including economic development assistance, assistance through 
        retraining of tobacco producers and tobacco factory workers, or 
        scholarships for tobacco producers.
            (2) Implementation.--Amounts in the Trust Fund shall be 
        available for making expenditures described in paragraph (1) 
        only if a law is enacted not later than January 1, 2000, that 
        specifically prescribes authorized uses of the Trust Fund.
    (e) Budgetary Treatment.--This section constitutes budget authority 
in advance of appropriations Acts.
    (f) Termination of Effectiveness.--The authority provided by this 
section terminates effective January 1, 2000, unless a law is enacted 
not later than January 1, 2000, that specifically prescribes authorized 
uses of the Trust Fund.

   TITLE V--STANDARDS TO REDUCE INVOLUNTARY EXPOSURE TO TOBACCO SMOKE

SEC. 501. STANDARDS TO REDUCE INVOLUNTARY EXPOSURE TO TOBACCO SMOKE.

    The Occupational Safety and Health Act of 1970 (29 U.S.C. 651 et 
seq.) is amended by adding at the end the following:

``SEC. 35. STANDARDS TO REDUCE INVOLUNTARY EXPOSURE TO TOBACCO SMOKE.

    ``(a) Definitions.--In this section--
            ``(1) Public facility.--
                    ``(A) In general.--The term `public facility' means 
                any workplace covered by this Act and any enclosed 
                structure regularly entered by 10 or more individuals 
                at least 1 day per week, including any such building 
                owned by or leased to a Federal, State, or local 
                government entity (including Congress). Such term shall 
                not include any building or portion thereof while used 
                as a private residence.
                    ``(B) Exclusions.--The term `public facility' does 
                not include a portion of a building which is used as a 
                bar, a facility in which a retailer engages primarily 
                in the business of selling tobacco products, a hotel 
                guest room that is designated as a smoking room, a 
                private club while in use for social or fraternal 
                activities that are not open to the public, a casino, a 
                bingo parlor, a restaurant with an indoor seating 
                capacity of fewer than 50 individuals that is not a 
                fast food restaurant, or a prison.
                    ``(C) Bar.--The term ``bar'' means any indoor area 
                that is open to the general public and that is devoted 
                to the sale and service of alcoholic beverages for on-
                premises consumption where the service of food is only 
                incidental to the consumption of such beverages. 
                Service of food shall be considered incidental if the 
                food service generates less than 50 percent of the 
                total annual gross food and liquor sales of the 
                establishment.
                    ``(D) Fast food restaurant.--As used in 
                subparagraph (B), the term `fast food restaurant' means 
                any restaurant or chain of restaurants in which 
                employees primarily distribute food through a customer 
                pick-up (either at a counter or drive-through window). 
                The Administrator of the Occupational Safety and Health 
                Administration may promulgate regulations to clarify 
                this subparagraph to ensure that the intended inclusion 
                of workers in establishments catering largely to 
                individuals under 18 years of age is achieved.
            ``(2) Responsible entity.--The term `responsible entity' 
        means, with respect to any public facility, the owner or 
        operator of such facility except that, in the case of any such 
        facility or portion thereof which is leased, such term means 
        the lessee.
    ``(b) Smoke-Free Environment Policy.--
            ``(1) Policy required.--In order to protect children and 
        adults from cancer, respiratory disease, heart disease, and 
        other adverse health effects associated with breathing 
        environmental tobacco smoke, the responsible entity for each 
        public facility shall adopt and implement at such facility a 
        smoke-free environment policy which meets the requirements of 
        paragraph (2) or (4).
            ``(2) Elements of policy.--
                    ``(A) In general.--Each smoke-free environment 
                policy for a public facility shall--
                            ``(i) prohibit the smoking of cigarettes, 
                        cigars, and pipes, and any other combustion of 
                        tobacco within the facility and on facility 
                        property within the immediate vicinity of the 
                        entrance to the facility or any air intake vent 
                        (including open windows and doors); and
                            ``(ii) post a clear and prominent notice of 
                        the smoking prohibition in appropriate and 
                        visible locations at the public facility.
                    ``(B) Exception.--The smoke-free environment policy 
                for a public facility may provide an exception to the 
                prohibition specified in subparagraph (A) for 1 or more 
                specially designated smoking areas within a public 
                facility if such area or areas meet the requirements of 
                paragraph (3).
            ``(3) Specially designated smoking areas.--A specially 
        designated smoking area meets the requirements of this 
        subsection if--
                    ``(A) the area is ventilated in accordance with 
                specifications promulgated by the Secretary of Labor, 
                in consultation with the Administrator of the 
                Environmental Protection Agency, that ensure that air 
                from the area is directly exhausted to the outside of 
                the building and does not recirculate or drift to other 
                areas within the public facility;
                    ``(B) the area is maintained at negative pressure, 
                as compared to adjacent nonsmoking areas, as determined 
                under regulations promulgated by the Secretary of 
                Labor, in consultation with the Administrator of the 
                Environmental Protection Agency; and
                    ``(C) nonsmoking individuals are fully advised that 
                the area is a smoking area and such individuals do not 
                have to enter the area for any purpose while smoking is 
                occurring in such area, and for an additional period 
                that allows for at least 3 air exchanges to occur in 
                the room.
        Cleaning and maintenance work shall be conducted in such area 
        only while no smoking is occurring in the area, following an 
        additional period that allows for at least 3 air exchanges to 
        occur in the room.
            ``(4) Special rules.--
                    ``(A) Schools and other facilities serving 
                children.--
                            ``(i) In general.--With respect to a 
                        facility described in clause (ii), the 
                        responsible entity for the facility shall--
                                    ``(I) adopt and implement at such 
                                facility a smoke-free environment 
                                policy that prohibits the smoking of 
                                cigarettes, cigars, and pipes, and any 
                                other combustion of tobacco within the 
                                facility and on facility property;
                                    ``(II) adopt and implement at such 
                                facility a smoke-free environment 
                                policy that prohibits the use of 
                                smokeless tobacco products within the 
                                facility and on facility property; and
                                    ``(III) post a clear and prominent 
                                notice of the smoking and smokeless 
                                tobacco prohibition in appropriate and 
                                visible locations at the public 
                                facility.
                            ``(ii) Facility.--A facility described in 
                        this clause is--
                                    ``(I) an elementary or secondary 
                                school (as such term is defined in 
                                section 14101 of the Elementary and 
                                Secondary Education Act of 1965 (20 
                                U.S.C. 8801);
                                    ``(II) any facility at which a Head 
                                Start program or project is being 
                                carried out under the Head Start Act 
                                (42 U.S.C. 9831 et seq.);
                                    ``(III) any facility at which a 
                                licensed or certified child care 
                                provider provides child care services; 
                                and
                                    ``(IV) any recreation or other 
                                facility maintained primarily to 
                                provide services to children as 
                                determined by the Secretary of Labor.
                    ``(B) Public transportation.--
                            ``(i) In general.--With respect to any 
                        responsible entity which operates conveyances 
                        of public transportation (including bus, rail, 
                        aircraft, boat, or any other conveyance 
                        determined appropriate by the Secretary of 
                        Labor), the responsible entity shall--
                                    ``(I) adopt and implement on such 
                                conveyances a smoke-free environment 
                                policy that prohibits the smoking of 
                                cigarettes, cigars, and pipes, and any 
                                other combustion of tobacco within the 
                                conveyance and on property affiliated 
                                with the conveyance; and
                                    ``(II) post a clear and prominent 
                                notice of the smoking prohibition in 
                                appropriate and visible locations on 
                                the conveyance.
                            ``(ii) Rail transportation.--The smoke-free 
                        environment policy for a responsible entity 
                        that operates a rail carrier providing rail 
                        commuter service may provide an exception to 
                        the prohibition specified in clause (i) with 
                        respect to such service for 1 or more specially 
                        designated smoking cars if such cars meet the 
                        requirements of paragraph (3).
    ``(c) Enforcement.--To be eligible to receive funds under the 
Healthy Kids Act, a State shall make a demonstration to the Secretary 
that the State is enforcing this section within the State. Such laws or 
procedures shall permit aggrieved individuals to enforce this section 
through administrative and judicial means.
    ``(d) Preemption.--Notwithstanding section 18, nothing in this 
section shall preempt or otherwise affect any other existing or future 
Federal, State or local law which provides protection from health 
hazards from environmental tobacco smoke that are as least as stringent 
as those provided for in this section.
    ``(e) Regulations.--Not later than 12 months after the date of 
enactment of this section, the Secretary of Labor shall promulgate such 
regulations as the Secretary deems necessary to carry out this section.
    ``(f) Effective Date.--The provisions of this section shall take 
effect on the date that is 1 year after the date of enactment of this 
section.''.

               TITLE VI--PUBLIC HEALTH AND OTHER PROGRAMS

                     Subtitle A--Research Programs

SEC. 601. TOBACCO-RELATED RESEARCH.

    (a) In General.--The Secretary shall establish a program to 
encourage and promote (through grants, contracts, or otherwise) 
expanded research, investigations, experiments and studies, 
concerning--
            (1) the relationship between the use of tobacco products 
        and cancer, cardiovascular diseases, lung diseases and other 
        diseases;
            (2) the effects of tobacco products, ingredients of tobacco 
        products, and tobacco smoke on the human body and methods of 
        reducing any negative effects, including the development of 
        non-addictive, reduced risk tobacco products;
            (3) the addictive effects of nicotine and how such effects 
        differ with respect to different individuals;
            (4) the prevention and cure of diseases and illnesses most 
        associated with the use of tobacco products;
            (5) differentials between brands of tobacco products with 
        respect to health effects or addiction;
            (6) the effectiveness of drugs and devices in assisting 
        individuals to stop using tobacco products; and
            (7) the relationship between the use of tobacco products 
        and cancer, particularly among minorities.
    (b) Eligibility.--To be eligible to receive a grant, contract, or 
other assistance under this section an entity or individual shall 
prepare and submit to the Secretary an application at such time, in 
such manner, and containing such information as the Secretary may 
require.
    (c) Use of Funds.--Amounts received by an individual or entity 
under this section shall be used to carry out activities under the 
program established under subsection (a).
    (d) Additional Requirements.--To be eligible to receive a grant, 
contract, or other assistance under this section an entity or 
individual shall provide assurances to the Secretary that--
            (1) any research to be conducted under the grant or 
        contract will be generally consistent with the requirements 
        applicable to research conducted under the authority of the 
        National Institutes of Health;
            (2) adequate records will be maintained with respect to 
        such assistance; and
            (3) amounts provided to the individual or entity will be 
        subject to independent audit.
    (e) Effect on Minorities and Women.--The program established under 
subsection (a) shall be conducted in a manner that ensures that 
research will be conducted to investigate the different effects of 
tobacco use on minorities and women in proportion to their prevalence 
in the smoking population.
    (f) Dissemination of Results.--The Secretary shall establish 
procedures for the dissemination of the results of the research 
conducted under this section.
    (g) Funding.--There shall be made available to carry out this 
section an amount equal to the amount made available under section 
121(c)(1)(D) for a fiscal year.

SEC. 602. RESEARCH RELATING TO PATTERNS OF SMOKING.

    (a) In General.--The Secretary shall establish a program to provide 
for the conduct of research (through the provision of grants, 
contracts, or otherwise) concerning the cultural, social, behavioral, 
neurological and psychological reasons that individuals refrain from 
using tobacco products, begin to use tobacco products, continue using 
tobacco products, or quit using tobacco products.
    (b) Eligibility.--To be eligible to receive a grant, contract, or 
other assistance under this section an entity or individual shall 
prepare and submit to the Secretary an application at such time, in 
such manner, and containing such information as the Secretary may 
require.
    (c) Use of Funds.--Amounts received by an individual or entity 
under this section shall be used to carry out activities under the 
program established under subsection (a).
    (d) Additional Requirements.--To be eligible to receive a grant, 
contract, or other assistance under this section an entity or 
individual shall provide assurances to the Secretary that--
            (1) any research to be conducted under the grant or 
        contract will be generally consistent with the requirements 
        applicable to research conducted under the authority of the 
        National Institutes of Health;
            (2) adequate records will be maintained with respect to 
        such assistance; and
            (3) amounts provided to the individual or entity will be 
        subject to independent audit.
    (e) Effect on Minorities and Women.--The program established under 
subsection (a) shall be conducted by minority institutions or minority 
researchers where possible and in a manner that ensures that research 
will be conducted to investigate the different factors affecting 
tobacco use among minorities and women in proportion to their 
prevalence in the smoking population.
    (f) Dissemination of Results.--The Secretary shall establish 
procedures for the dissemination of the results of the research 
conducted under this section.
    (g) Funding.--There shall be made available to carry out this 
section an amount equal to 10 percent of the amounts made available 
under section 101(d)(5)(C) for a fiscal year.

SEC. 603. SURVEILLANCE AND EVALUATION.

    (a) In General.--The Secretary, acting through the Director of the 
Centers for Disease Control and Prevention, shall conduct surveillance 
and evaluation activities, including the surveys authorized under title 
III, to monitor patterns of tobacco use and determine the effectiveness 
of various anti-tobacco programs funded under this Act. Such activities 
shall include studies of the responsiveness of smokers and potential 
smokers, particularly youth smokers, to price increases and non-price 
incentives.
    (b) Funding.--There shall be made available to carry out this 
section an amount equal to 5 percent of the amounts made available 
under section 101(d)(5)(C) for a fiscal year.

             Subtitle B--Education and Prevention Programs

SEC. 611. GRANTS FOR SCHOOL- AND COMMUNITY-BASED TOBACCO DANGER 
              EDUCATION PROGRAMS.

    (a) In General.--The Secretary shall establish a program to award 
grants to States to enable such States to assist schools, colleges, 
universities, communities, or community organizations--
            (1) to carry out school-based and college- or university-
        based education programs concerning the dangers of using 
        tobacco products using methods that are proven and effective; 
        and
            (2) to carry out community-based prevention programs, 
        including in predominantly minority communities, using methods 
        that are proven and effective.
    (b) Eligibility.--To be eligible to receive a grant under this 
section a State shall prepare and submit to the Secretary an 
application at such time, in such manner, and containing such 
information as the Secretary may require, including a State plan (that 
is subject to approval by the Secretary) that describes--
            (1) the types of programs that the State will fund under 
        the grant;
            (2) the manner in which the State will ensure that the 
        programs will be age-appropriate, culturally appropriate, and 
        linguistically appropriate for the target population; and
            (3) the manner in which the State will monitor the 
        effectiveness of such programs.
    (c) Use of Funds.--Amounts received by a State under this section 
shall be used to--
            (1) carry out State-wide school-based education programs 
        that are focused on those regions of the State with high 
        smoking rates and targeted at populations who are most at risk 
        to start smoking;
            (2) carry out State-wide college- and university-based 
        education programs to discourage individuals between the ages 
        of 18 and 24 from beginning to use tobacco products, such 
        programs to be focused on colleges or universities with high 
        smoking rates;
            (3) carry out community-based prevention programs that are 
        focused on those populations, including predominantly minority 
        communities, within the community that are most at-risk to use 
        tobacco products or that have been targeted by tobacco 
        advertising or marketing;
            (4) develop curriculums for such programs;
            (5) acquire materials for such programs;
            (6) expand the IMPACT or ASSIST program; and
            (7) carry out other activities determined appropriate by 
        the Secretary.
    (d) Additional Requirements.--To be eligible to receive a grant 
under this section a State shall provide assurances to the Secretary 
that--
            (1) the State will annually report to the Secretary on the 
        effectiveness of the educational approaches implemented by the 
        State;
            (2) adequate records will be maintained with respect to 
        such assistance;
            (3) amounts provided to individuals or entities will be 
        subject to independent audit; and
            (4) the State will involve local public health officials in 
        the planning and implementation of the program.
    (e) Funding.--There shall be made available to carry out this 
section an amount equal to 15 percent of the amounts made available 
under section 101(d)(5)(C) for a fiscal year.

                   Subtitle C--Miscellaneous Programs

SEC. 621. COUNTER-ADVERTISING PROGRAMS.

    (a) In General.--The Secretary shall carry out programs to reduce 
tobacco usage through media-based (such as counter-advertising 
campaigns) and nonmedia-based education, prevention and cessation 
campaigns designed to discourage the use of tobacco products by 
individuals and to encourage those who use such products to quit. Such 
programs shall include national and local campaigns and shall target, 
in a culturally and linguistically appropriate manner and utilizing 
appropriate media outlets (including newspapers and other media owned 
by or targeted to minorities), adults, children, women and minorities 
who have been targeted by tobacco industry advertising.
    (b) Eligibility.--To be eligible to receive assistance under this 
section an entity or individual shall prepare and submit to the 
Secretary an application at such time, in such manner, and containing 
such information as the Secretary may require.
    (c) Use of Funds.--Amounts received by an individual or entity 
under this section shall be used to carry out activities under the 
programs established under subsection (a). Such amounts may be used to 
design and implement such activities and to conduct research concerning 
the effectiveness of such programs.
    (d) Funding.--There shall be made available to carry out this 
section an amount equal to 25 percent of the amounts made available 
under section 101(d)(5)(C) for a fiscal year.

SEC. 622. NATIONAL TOBACCO CESSATION PROGRAM.

    (a) Establishment.--There is established a program to be known as 
the ``National Tobacco Cessation Program''. The Secretary may award 
grants to, and enter into contracts and cooperative agreements with, 
public and private entities for the purpose of expanding the 
availability and utilization of tobacco use cessation services. The 
program established under this section shall ensure that cessation 
programs will be conducted in a manner that targets minorities and 
woman in proportion to their prevalence in the smoking population.
    (b) Use of Funds.--Amounts made available under a grant, contract 
or cooperative agreement under subsection (a) shall be used for the 
planning, establishment, or administration of tobacco use cessation 
programs approved in accordance with subsection (c).
    (c) Cessation Programs.--Programs receiving assistance under this 
section shall provide a range and quality of services consistent with 
the most recent cessation service guidelines issued by the Agency for 
Health Care Policy and Research. Using the best available scientific 
information, the Secretary shall promulgate such additional guidelines 
as are necessary to assure the quality, accessibility and cost 
effectiveness of services receiving funds under this section.
    (d) Funding.--There shall be made available to carry out this 
section an amount equal to 33 percent of the amounts made available 
under section 101(d)(5)(C) for a fiscal year.

SEC. 623. ASSISTANCE FOR THOSE SUFFERING FROM TOBACCO-RELATED 
              ILLNESSES.

    (a) In General.--The Secretary shall establish a program to provide 
assistance and compensation to individuals (and entities providing 
services to such individuals) suffering from tobacco-related illnesses 
and conditions. Under such program assistance shall be targeted at 
individuals who are determined to be uninsured or underinsured and who 
can demonstrate financial hardship.
    (b) Development of Plan.--The Secretary shall carry out the program 
established under subsection (a) under a plan to be developed by the 
Secretary, not later than 1 year after the date of enactment of this 
Act.
    (c) Eligibility.--
            (1) Of entities.--To be eligible to receive assistance 
        under this section an entity shall--
                    (A) be a public or nonprofit private entity;
                    (B) prepare and submit to the Secretary an 
                application at such time, in such manner, and 
                containing such information as the Secretary may 
                require;
                    (C) provide assurances that amounts received under 
                the grant will be used in accordance with subsection 
                (d)(1); and
                    (D) meet any other requirements determined 
                appropriate by the Secretary.
            (2) Of individuals.--To be eligible to receive assistance 
        under this section an individual shall--
                    (A) prepare and submit to the Secretary an 
                application at such time, in such manner, and 
                containing such information as the Secretary may 
                require;
                    (B) provide assurances that amounts received under 
                the grant will be used only in accordance with 
                subsection (d)(2); and
                    (C) meet any other requirements determined 
                appropriate by the Secretary.
    (d) Use of Funds.--Assistance provided under this section shall be 
used--
            (1) in the case of an entity eligible under subsection 
        (c)(1), to provide treatment for tobacco-related illnesses; or
            (2) in the case of an individual eligible under subsection 
        (c)(2), to pay for the receipt of treatments for tobacco-
        related illnesses.
    (e) Additional Requirements.--In providing assistance under this 
section, the Secretary shall ensure that such assistance is not used to 
duplicate any payments made under any health insurance plans but rather 
to cover uncompensated care provided to individuals with tobacco-
related illnesses.
    (f) Funding.--There shall be made available to carry out this 
section an amount equal to 3 percent of the amounts made available 
under section 101(d)(5)(C) for a fiscal year.

SEC. 624. INTERNATIONAL TOBACCO CONTROL.

    (a) Governmental Activities.--
            (1) In general.--The Secretary (in consultation with the 
        Secretary of State) may provide bilateral assistance, including 
        technical assistance through the Centers for Disease Control 
        and Prevention, to foreign countries and multilateral 
        assistance to reduce and prevent the use of tobacco in foreign 
        countries. Such assistance shall be focused on preventing the 
        use of tobacco products by minors.
            (2) Funding.--There shall be made available to carry out 
        this subsection an amount equal to 2 percent of the amounts 
        made available under section 101(d)(5)(C) for a fiscal year. 
        Such amount shall be split equally between bilateral and 
        multilateral assistance.
    (b) Nongovernmental Activities.--
            (1) Purpose.--The purpose of this subsection is to 
        establish the American Center on Global Health and Tobacco 
        (referred to in this subsection as ``ACT''). ACT shall assist 
        organizations in other countries to reduce and prevent the use 
        of tobacco. Activities ACT supports shall include--
                    (A) public education programs that inform the 
                public about the hazards of tobacco use and of 
                environmental tobacco smoke;
                    (B) mass media campaigns, including paid counter-
                tobacco advertisements, to reverse the image appeal of 
                pro-tobacco messages, especially those that glamorize 
                and ``Westernize'' tobacco use to young people; and
                    (C) education about the economic and societal costs 
                of tobacco use, and effective tobacco use prevention 
                and cessation strategies that are appropriate for the 
                country involved.
            (2) Establishment.--
                    (A) In general.--There is hereby established in the 
                District of Columbia a private, nonprofit corporation 
                to be known as the American Center on Global Health and 
                Tobacco. ACT shall--
                            (i) not be an agency or establishment of 
                        the United States; and
                            (ii) except as otherwise provided in this 
                        section, be subject to, and have all the powers 
conferred upon a nonprofit corporation by the District of Columbia 
Nonprofit Corporation Act (D.C. Code section 29-501 et seq.).
                    (B) Relation to united states.--Nothing in this 
                subsection shall be construed as making ACT an agency 
                or establishment of the United States, or as making the 
                members of the Board of ACT, or its employees, officers 
                or employees of the United States.
                    (C) Relation to nongovernmental organizations.--ACT 
                shall have a limited staff, and, to the maximum extent 
                practicable, utilize the available experience and 
                talents of nongovernmental organizations with 
                specialized experience in health, education, media, and 
                tobacco.
                    (D) Governing board.--The Secretary shall appoint a 
                governing board of up to 25 members including--
                            (i) on a bipartisan basis, Members of the 
                        Senate and of the House of Representatives;
                            (ii) the heads of United States public 
                        health organizations;
                            (iii) the heads of United States media, 
                        marketing, and other nongovernment institutions 
                        and corporations; and
                            (iv) individuals active in education, 
                        public health, and other relevant activities.
                    (E) International advisory council.--An 
                International Advisory Council consisting of 
                representatives from key global, regional, and national 
                public health organizations, and leading individual 
                educators and health professionals shall provide 
                advisory assistance to ACT.
            (3) Funding.--The Secretary of the Treasury shall on 
        October 1 of each fiscal year beginning after the date of 
        enactment of this Act, transfer an amount equal to 1 percent of 
        the amounts made available under section 101(d)(5)(C) for the 
        fiscal year to ACT to carry out this subsection.
            (4) Requirements for eligibility for annual transfers from 
        the trust fund.--
                    (A) Oversight.--ACT and its grantees shall be 
                subject to the oversight and supervision of Congress.
                    (B) Compliance.--
                            (i) Funding contingent on compliance.--
                        Annual payments from the Trust Fund may be made 
                        to ACT under this subsection only if ACT 
                        complies with the requirements specified in 
                        this subsection.
                            (ii) Use of funds.--ACT may only fund 
                        programs for private sector groups, and may not 
                        carry out programs directly. ACT may provide 
                        funding only for programs which are consistent 
                        with the purposes of this subsection.
                    (C) Salaries and compensation.--
                            (i) No other source of compensation.--
                        Officers and employees of ACT may not receive 
                        any salary or other compensation from any 
                        source other than ACT for services performed 
                        for ACT.
                            (ii) United states officers and 
                        employees.--An individual who is an officer or 
                        employee of the United States who also serves 
                        on the Board of Directors or as an officer or 
                        employee of ACT, may not receive any 
                        compensation or travel expenses in connection 
                        with services performed for ACT.
                    (D) Stocks and dividends.--ACT shall not issue any 
                shares of stock or declare or pay any dividends.
                    (E) Audits.--
                            (i) Public accounts.--The accounts of ACT 
                        shall be audited annually in accordance with 
                        generally accepted auditing standards.
                            (ii) Comptroller general.--The financial 
                        transactions of ACT for each fiscal year may be 
                        audited by the Comptroller General. A report of 
                        each audit shall be made by the Comptroller 
                        General to Congress. A copy of each report 
                        shall be furnished to the President and to ACT 
                        at the time the report is submitted to 
                        Congress.
                    (F) Recordkeeping.--ACT shall ensure that each 
                recipient of assistance from ACT under this subsection 
                keeps such records as may be reasonably necessary to 
                fully disclose the amount and the disposition by such 
                recipient of the proceeds of such assistance, the total 
                cost of the project or undertaking in connection with 
which such assistance is given or used, and the amount and nature of 
that portion of the cost of the project or undertaking supplied by 
other sources, and such other records as will facilitate an effective 
audit. ACT shall ensure that it, or any of its duly authorized 
representatives, shall have access for the purpose of audit and 
examination to any books, documents, papers, and records of each 
recipient of assistance from ACT that are pertinent to assistance 
provided through ACT under this subsection.

SEC. 625. NATIONAL EVENT SPONSORSHIP PROGRAM.

    (a) Establishment.--The Secretary shall establish a program to be 
known as the ``National Event Sponsorship Program'' under which the 
Secretary may award grants to eligible entities or individuals for the 
sponsorship of activities described in subsection (c).
    (b) Eligibility.--To be eligible to receive a grant under this 
section an entity or individual shall--
            (1) prepare and submit to the Secretary an application at 
        such time, in such manner, and containing such information as 
        the Secretary may require, including--
                    (A) a description of the event, activity, team, or 
                entry for which the grant is to be provided;
                    (B) documentation that the event, activity, team, 
                or entry involved was sponsored or otherwise funded by 
                a tobacco manufacturer or distributor prior to the date 
                of the application; and
                    (C) a certification that the applicant is unable to 
                secure funding for the event, activity, team, or entry 
                involved from sources other than those described in 
                paragraph (2);
            (2) provide assurances that amounts received under the 
        grant will be used in accordance with subsection (d); and
            (3) meet any other requirements determined appropriate by 
        the Secretary.
    (c) Permissible Sponsorship Activities.--Events, activities, teams, 
or entries for which a grant may be provided under this section 
include--
            (1) an athletic, musical, artistic, educational, or other 
        social or cultural event or activity that was sponsored in 
        whole or in part by a tobacco manufacturer or distributor prior 
        to the date of enactment of this Act with particular emphasis 
        on smaller community-based events and activities;
            (2) the participation of a team that was sponsored in whole 
        or in part by a tobacco manufacturer or distributor prior to 
        the date of enactment of this Act, in an athletic event or 
        activity; and
            (3) the payment of a portion or all of the entry fees of, 
        or other financial or technical support provided to, an 
        individual or team by a tobacco manufacturer or distributor 
        prior to the date of enactment of this Act, for participation 
        of the individual in an athletic, musical, artistic, or other 
        social or cultural event.
    (d) Use of Funds.--Amounts received under a grant under this 
section shall be used to--
            (1)(A) pay the costs associated with the sponsorship of an 
        event or activity described in subsection (c)(1);
            (B) provide for the sponsorship of an individual or team;
            (C) pay the required entry fees associated with the 
        participation of an individual or team in an event or activity 
        described in subsection (c)(3);
            (D) provide financial or technical support to an individual 
        or team in connection with the participation of that individual 
        or team in an activity described in subsection (c)(3); or
            (E) for any other purposes determined appropriate by the 
        Secretary; and
            (2) promote images or activities to discourage individuals 
        from using tobacco products or encourage individuals who use 
        such products to quit.
    (e) Allocation of Unexpended Funds.--Amounts available for purposes 
of carrying out this section and remaining available at the end of the 
10-year period following the date of the establishment of the program 
under this section, shall be used as follows:
            (1) 50 percent of such amounts shall be used to supplement 
        amounts available for multi-media campaigns under section 621;
            (2) 25 percent of such amounts shall be used to supplement 
        amounts available for Federal or State tobacco product 
        enforcement purposes; and
            (3) 25 percent of such amounts shall be used to supplement 
        amounts available for community-based programs under this 
        subtitle or subtitle B.
    (f) Funding.--There shall be made available to carry out this 
section an amount equal to 1 percent of the amounts made available 
under section 101(d)(5)(C) for a fiscal year.
    (g) Sunset.--The program established under this section shall 
terminate on the date that is 10-years after the date of enactment of 
this Act.

SEC. 626. PROGRAMS TO REDUCE ALCOHOL AND ILLICIT DRUG USE BY MINORS.

    (a) In General.--The Secretary shall establish a program under 
which grants are awarded to States to augment funding for existing 
programs that are designed to reduce alcohol and illicit drug use by 
individuals under 18 years of age and that have been proven effective.
    (b) Eligibility.--To be eligible to receive a grant under this 
section a State shall prepare and submit to the Secretary an 
application at such time, in such manner, and containing such 
information as the Secretary may require, including a State plan (that 
is subject to approval by the Secretary) that describes--
            (1) the types of programs that the State will fund under 
        the grant;
            (2) the manner in which the State will ensure that the 
        programs will be age-appropriate;
            (3) the manner in which the State will monitor the 
        effectiveness of such programs; and
            (4) the manner in which the State program will be targeted 
        at populations that are most at risk to use alcohol or illicit 
        drugs.
    (c) Use of Funds.--Amounts received by a State under this section 
shall be used to expand and enhance existing programs to discourage the 
use of alcohol and illicit drugs and to encourage those who use such 
products to quit such use.
    (d) Additional Requirements.--To be eligible to receive a grant 
under this section a State shall provide assurances to the Secretary 
that--
            (1) the State will annually report to the Secretary on the 
        effectiveness of the programs implemented by the State;
            (2) adequate records will be maintained with respect to 
        such assistance; and
            (3) amounts provided to the individual or entity will be 
        subject to independent audit.
    (e) Funding.--There shall be made available to carry out this 
section an amount equal to 5 percent of the amounts made available 
under section 101(d)(5)(C) for a fiscal year.

  TITLE VII--LIABILITY PROTECTION; CONSENT DECREES; NATIONAL PROTOCOL

           Subtitle A--Liability Protection and Attorney Fees

SEC. 701. RESOLUTION OF AND LIMITATIONS ON CIVIL ACTIONS.

    (a) State Attorney General Actions.--
            (1) Pending claims.--With respect to a State, to be 
        eligible to receive funds under section 111 section 131 or 
        section 132, the attorney general for such State shall resolve 
        any civil action seeking recovery for expenditures attributable 
        to the treatment of tobacco-related illnesses and conditions 
        that has been commenced by the State against a manufacturer, 
        distributor, or retailer of a tobacco product and is pending on 
        the date of enactment of this Act.
            (2) Future actions based on prior conduct.--With respect to 
        a State, to be eligible to receive funds under section 111, 
        section 131 or section 132, the attorney general for such State 
        shall agree that the State will not commence any new civil 
        action after the date of enactment of this Act (other than to 
        enforce the terms of a previous judgment) that is based on the 
        conduct of a participating manufacturer, distributor or 
        retailer of a tobacco product that occurred prior to the date 
        of enactment of this Act seeking recovery for expenditures 
        attributable to the treatment of tobacco induced illnesses and 
        conditions against such a manufacturer, distributor or 
        retailer.
            (3) Application to local governmental entities.--The 
        requirements described in paragraphs (1) and (2) shall apply to 
        civil actions commenced by or on behalf of local governmental 
        entities for the recovery of costs attributable to tobacco-
        related illnesses if such localities are within a State whose 
        attorney general has elected to resolve claims under paragraph 
        (1) and enter into the agreement described in paragraph (2). 
        Such provisions shall not apply to those local governmental 
        entities that are within a State whose attorney general has not 
        resolved such claims or entered into such agreements.
    (b) State and local Option for One-Time Opt Out.--
            (1) In general.--The Secretary shall establish procedures 
        under which the attorney general of a State may, not later than 
        1 year after the date of enactment of this Act, elect not to 
        resolve an action described in subsection (a)(1) or not enter 
        into an agreement under subsection (a)(2). A State whose 
        attorney general makes such an election shall not be eligible 
        to receive payments from the Trust Fund under section 111 
        section 131 or section 132. Procedures under this paragraph 
        shall permit such a State to make such an election on a one-
        time basis.
            (2) Extension.--In the case of a State that has secured a 
        judgment against a manufacturer, distributor or retailer of a 
        tobacco product in an action described in subsection (a)(1) 
        prior to or during the period described in paragraph (1), and 
        such judgment has been appealed by such manufacturer, 
        distributor, or retailer, such period shall be extended during 
        the pendency of the appeal and for an additional period as 
        determined appropriate by the Secretary.
            (3) Application to certain states.--A State that has 
        resolved a claim described in subsection (a)(1) with a 
        manufacturer, distributor or retailer of a tobacco product 
        prior to the date of enactment of this Act may not make an 
        election described in paragraph (1) if, as part of the 
        resolution of such claim, the State agreed that the enactment 
        of any national tobacco settlement legislation would supersede 
        the provisions of the resolution.
            (4) Local governmental entity option for one-time opt 
        out.--
                    (A) In general.--The Secretary shall establish 
                procedures under which the attorney for a local 
                governmental entity which commenced a civil action 
                prior to June 20, 1997, against a manufacturer, 
                distributor, or retailer of a tobacco product seeking 
                recovery for expenditures attributable to the treatment 
                of tobacco related illnesses and conditions, not later 
                than 1 year after the date of enactment of this Act, 
                may elect not to resolve any action described in 
                subsection (a)(3). A local governmental entity whose 
                attorney makes such an election shall not be eligible 
                to receive payments from the Trust Fund under section 
                111. Procedures under this paragraph shall permit such 
                a local governmental entity to make such an election on 
                a one-time basis.
                    (B) Extension.--In the case of a local governmental 
                entity that has secured a judgment against a 
                manufacturer, distributor, or retailer of a tobacco 
                product in a claim described in subsection (a)(3) prior 
                to or during the period described in subparagraph (A), 
                and such judgment has been appealed by such 
                manufacturer, distributor, or retailer, such period 
                shall be extended during the pendency of the appeal and 
                for an additional period as determined appropriate by 
                the Secretary.
                    (C) Application to certain local governmental 
                entities.--A local governmental entity that has 
                resolved a claim described in subsection (a)(3) with a 
                manufacturer, distributor, or retailer of a tobacco 
                product prior to the date of enactment of this Act may 
                not make an election described in subparagraph (A) if, 
                as part of the resolution of such claim, the local 
                governmental entity agreed that the enactment of any 
                national tobacco settlement legislation would supersede 
                the provisions of the resolution.
    (c) Federal Claims.--The Federal Government is barred from 
commencing a civil action against a participating manufacturer, 
distributor, or retailer of a tobacco product seeking recovery for 
expenditures attributable to the treatment of tobacco-related illnesses 
associated with the conduct of a manufacturer that occurred prior to 
the date of enactment of this Act.
    (d) Rules of Construction.--
            (1) Post enactment claims.--Nothing in this title shall be 
        construed to limit the ability of a government, entity, or 
        person to commence an action against a participating 
        manufacturer, distributor or retailer of a tobacco product with 
        respect to a claim that is based on the conduct of such 
        manufacturer, distributor or retailer that occurred after the 
        date of enactment of this Act.
            (2) No limitation on persons.--Nothing in this title shall 
        be construed to limit the right of a person (other than a 
        State, Federal or local government as provided in subsections 
        (a)-(c)) to commence any civil claim for past, present, or 
        future conduct by manufacturers, distributors or retailers of 
        tobacco products.
            (3) Criminal liability.--Nothing in this title shall be 
        construed to limit the criminal liability of a tobacco 
        manufacturer, retailer, or distributor or its officers, 
        directors, employees, successors, or assigns.
    (e) Definition.--As used in this section, the term ``participating 
manufacturer'' means a manufacturer of tobacco products that has 
entered into a consent decree under section 711 and that is a signatory 
to the Protocol under section 721.

SEC. 702. ATTORNEY'S FEES AND EXPENSES.

    (a) Source and Payment of Awards.--In no event shall any award of 
the Arbitration Panel established under subsection (b) be paid from, 
credited against, or otherwise affect in any way any fee payments that 
are required to be made by any participating manufacturer under section 
102 or under any other provision of this Act. Any such award shall be 
paid by those participating manufacturers that are signators to the 
June 20, 1997, proposed resolution with certain State attorneys general 
pursuant to an allocation agreement among such manufacturers.
    (b) Arbitration Panel.--
            (1) Establishment.--For the purpose of awarding of 
        attorneys' fees and expenses relating to litigation affected 
        by, or legal services that, in whole or in part, resulted in or 
        created a model for programs in, this Act, and where attorneys 
        involved are unable to agree with the plaintiffs who hired them 
        with respect to any dispute that may arise between them 
        regarding their fee agreement, then the matter at issue shall 
        be submitted to arbitration. In any such arbitration, the 
        arbitration panel shall consist of 3 persons, one of whom shall 
        be chosen by the plaintiffs, one of whom shall be chosen by the 
        plaintiffs' attorneys, and one of whom shall be chosen jointly 
        by the first 2 arbitrators chosen as specified herein.
            (2) Operation.--Not later than 30 days after the date on 
        which all members of an Arbitration Panel are appointed under 
        paragraph (1), the Panel shall establish the procedures under 
        which the Panel will operate which shall include--
                    (A) A requirement that any finding by the 
                Arbitration Panel must be in writing and supported by 
                written reasons;
                    (B) procedures for the exchanging of exhibits and 
                witness lists by the various claimants for awards;
                    (C) to the maximum extent practicable, requirements 
                that proceedings before the Panel be based on 
                affidavits rather than live testimony; and
                    (D) a requirement that all claims be submitted to 
                an Arbitration Panel not later than 3 months after the 
                effective date of this Act and a determination made by 
                the Panel with respect to such claims not later than 7 
                months after such date of enactment.
            (3) Right to petition.--Any individual attorney or group of 
        attorneys involved in litigation affected by this Act shall 
        have the right to petition an Arbitration Panel for attorneys' 
        fees and expenses.
            (4) Criteria.--In making any award pursuant to this 
        section, an Arbitration Panel shall consider the following 
        criteria:
                    (A) The time and labor required by the claimant.
                    (B) The novelty and difficulty of the questions 
                involved in the action for which the claimant is making 
                a claim.
                    (C) The skill requisite to perform the legal 
                service involved properly.
                    (D) The preclusion of other employment by the 
                attorney due to acceptance of the action involved.
                    (E) Whether the fee is fixed or a percentage.
                    (F) Time limitations imposed by the client or the 
                circumstances.
                    (G) The amount involved and the results obtained.
                    (H) The experience, reputation, and ability of the 
                attorneys involved.
                    (I) The undesirability of the action.
                    (J) Such other factors as justice may require.
            (5) Appeal and enforcement.--The findings of an Arbitration 
        Panel shall be final, binding, nonappealable, and payable 
        within 30 days after the date on which the finding is made 
        public, except that if an award is to be paid in installments, 
        the first installment shall be payable within such 30 day 
        period and succeeding installments shall be paid annually 
        thereafter.
            (6) Sense of the senate.--It is the sense of the Senate 
        that the legal services rendered by attorneys in the various 
        class actions filed by the Castano Plaintiffs Legal Committee 
        against certain tobacco manufacturers provided public benefits, 
        including many of the specific public health programs in the 
        proposed resolution dated June 20, 1997, upon which programs in 
        Title VI of this Act are in part modeled. It is further the 
        sense of the Senate that such programs do not constitute an 
        exclusive remedy for claims based on addiction to or dependence 
        on tobacco products, that such programs do not operate to 
        preclude or otherwise limit any litigation premised or 
        otherwise depending on addiction to or dependence on tobacco 
        products, and that the preceding sentence does not in any way 
        affect the interpretation of section 701(d) of this Act.
    (c) Validity and Enforceability of Private Agreements.--
Notwithstanding any other provision of this Act, nothing in this 
section shall be construed to abrogate or restrict in any way the 
rights of any parties to mediate, negotiate, or settle any fee or 
expense disputes or issues to which this section applies, or to enter 
into private agreements with respect to the allocation or division of 
fees among the attorneys party to any such agreement.

                      Subtitle B--Consent Decrees

SEC. 711. CONSENT DECREES.

    (a) Requirement.--
            (1) In general.--Except as provided in paragraph (2), to be 
        eligible to receive payments under section 111 section 131 or 
        section 132, a State, and to be eligible to receive liability 
        protections under subtitle A, a tobacco manufacturer, shall 
        enter into consent decrees under this section to be effective 
        on the date of enactment of this Act.
            (2) Good faith efforts.--The limitation described in 
        paragraph (1) with respect to payments under section 111, 
        section 131 or section 132 shall not apply to a State if the 
        attorney general of the State certifies to the Secretary that--
                    (A) the State has made good faith efforts to enter 
                into a consent decree in accordance with this subtitle; 
                and
                    (B) such State is willing to be bound by such 
                decree but such decree does not exist because--
                            (i) of the refusal on the part of a tobacco 
                        manufacturer to enter into such decree; or
                            (ii) the appropriate court has not entered 
                        the decree even though the parties have lodged 
                        such a decree with the court.
    (b) Terms and Conditions.--
            (1) In general.--The consent decrees described in 
        subsection (a) shall resolve the State action (or potential 
        action in the case of a manufacturer that was not a defendant 
        in a State action but that desires to become a participating 
        manufacturer or in the case of a State that does not have a 
        suit pending against a manufacturer) for claims associated with 
        the conduct of the manufacturer that occurred prior to the date 
        of enactment of this Act.
            (2) General terms and conditions.--The terms and conditions 
        contained in the consent decrees described in subsection (a) 
        shall contain the following provisions relating to--
                    (A) restrictions on tobacco product advertising and 
                marketing and youth access to such products;
                    (B) the termination, establishment, and operation 
                of trade associations;
                    (C) the disclosure of tobacco smoke constituents;
                    (D) the disclosure of nontobacco constituents and 
                ingredients found in tobacco products;
                    (E) the disclosure of existing and future documents 
                relating to health, toxicity, and addiction related to 
                tobacco product usage;
                    (F) the obligation of manufacturers to make 
                payments for the benefit of States, private litigants 
                and the general public;
                    (G) the obligation of manufacturers to enter into 
                the Protocol under subtitle C;
                    (I) the obligation of manufacturers to interact 
                only with distributors and retailers that operate in 
                compliance with the applicable provisions of Federal, 
                State, or local law regarding the marketing and sale of 
                tobacco products;
                    (J) requirements for warnings, labeling, and 
                packaging of tobacco products;
                    (K) the resolution of pending litigation (or 
                potential future litigation for misconduct that 
                occurred prior to the date of enactment of this Act) as 
                required under subtitle A and as agreed to by the 
                parties to the decree; and
                    (L) any other matter determined appropriate by the 
                Secretary or the parties involved.
            (3) Limitations.--The terms and conditions contained in the 
        consent decrees described in subsection (a) shall not contain 
        provisions relating to--
                    (A) tobacco product design, performance, or 
                modification;
                    (B) manufacturing standards and good manufacturing 
                practices;
                    (C) testing and regulation with respect to toxicity 
                and ingredients approval; and
                    (D) the tobacco usage reduction requirement 
                described in section 303.
            (4) Enforceability.--The terms and conditions contained in 
        the consent decrees described in subsection (a) shall be 
        enforceable by the signatories, as well as the Attorney 
        General, and shall include a provision that prohibits 
        signatories from challenging the enforceability of the consent 
        decrees.
            (5) Construction.--The terms and conditions contained in 
        the consent decrees described in subsection (a) shall provide 
        that the terms of the decree will be construed in a manner that 
        is consistent with the provision of this Act.
    (c) Approval.--
            (1) In general.--Prior to the entry of a consent decree by 
        a court under this section the court must find that the 
        provisions of the consent decree--
                    (A) have been approved by the Secretary and the 
                Attorney General;
                    (B) are fair and reasonable; and
                    (C) are in the public interest.
            (2) Determination by secretary.--To approve a consent 
        decree under paragraph (1)(A), the Secretary and the Attorney 
        General shall have determined whether the provisions of the 
        decree are consistent with this Act and the Food, Drug and 
        Cosmetic Act or the rules and regulations promulgated under 
        such Acts.
            (3) Notice to public.--With respect to the approval of a 
        consent decree under this section, the court shall ensure that 
        the public has been given not less than 60 days notice of the 
        filing of the decree by the parties and any objections thereto 
        must be addressed to the satisfaction of the court.
    (d) Enforcement.--The provisions of a consent decree entered under 
this section shall remain in effect and enforceable in the court in 
which the decree is entered, even if the underlying action is 
dismissed.

SEC. 712. NON-PARTICIPATING MANUFACTURERS.

    With respect to a manufacturer that elects not to enter into a 
consent decree under section 711, such manufacturer shall not be 
eligible to receive the liability protections under section 701.

             Subtitle C--National Tobacco Control Protocol

                        CHAPTER 1--ESTABLISHMENT

SEC. 721. NATIONAL TOBACCO CONTROL PROTOCOL.

    (a) Requirement.--To be eligible to receive the liability 
protections provided for in subtitle A, each tobacco manufacturer to 
which this Act applies shall, not later than 90 days after the date of 
enactment of this Act, enter into a National Tobacco Control Protocol 
with the Attorney General of the United States and the attorney general 
of each State that does not elect to opt out under section 701(b)(1).
    (b) Terms and Conditions.--The Protocol referred to in subsection 
(a) shall be--
            (1) developed by the Attorney General, in consultation with 
        the Secretary, the State attorneys' general, the Federal Trade 
        Commission and other individuals determined appropriate by the 
        Attorney General, as a binding and enforceable contract that 
        embodies the terms of this subtitle; and
            (2) designed to be enforceable in Federal or State courts 
        as provided for in this subtitle.
    (c) Contracts.--As part of the Protocol under this section, a 
manufacturer shall agree, with respect to any contract entered into by 
the manufacturer with an entity that is a distributor or retailer of 
tobacco products, to include in such contract as a term and condition a 
requirement that such distributor or retailer comply with the 
provisions of the Protocol.

                    CHAPTER 2--TERMS AND CONDITIONS

SEC. 725. APPLICATION OF CHAPTER.

    The provisions of this chapter shall be considered as part of the 
Protocol.

SEC. 726. AGREEMENT TO PROHIBIT CERTAIN 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 Act, 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) Retailers.--No manufacturer, distributor, or 
                retailer may enter into any arrangement with a retailer 
                to limit the ability of the retailer to display any 
                form of permissible point of sale advertisement or 
                promotional material originating with another 
                manufacturer, distributor, or retailer.
            (4) Limitations.--
                    (A) In general.--A point of sale advertisement 
                permitted under this subsection shall be comprised of a 
                display area that is not larger than 576 square inches 
                (either individually or in the aggregate) and shall 
                consist only of black letters on a white background or 
                other recognized typographical marks. Such 
                advertisement shall not be attached to nor located 
                within 2 feet of any fixture on which candy is 
                displayed for sale.
                    (B) Audio and video formats.--Audio and video 
                advertisements otherwise permitted under this Act 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. 727. CONSENSUAL 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 January 1, 
1998.
    (b) Advertising Limit Actions.--
            (1) In general.--A manufacturer, distributor, or retailer 
        may in accordance with this Act, disseminate or cause to be 
        disseminated advertising or labeling which bears a tobacco 
        product brand name (alone or on 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 
        726(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 Secretary 
        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 secretary.--Not later than 30 days after the 
        date on which the Secretary receives a notice under paragraph 
        (2), the Secretary shall make a determination with respect to 
        the action to be taken concerning such notice.
    (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.
            (3) Video.--The term ``video'' means an audiovisual work 
        produced for viewing by the general public, such as a 
        television program, a motion picture, a music video, and the 
        audiovisual display of a video game.
    (d) Restrictions on Glamorization of Tobacco Products.--No direct 
or indirect payment shall be made, or consideration given, by any 
manufacturer, distributor, or retailer to any entity for the purpose of 
promoting the image or use of a tobacco product through print, film or 
broadcast 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. 728. AGREEMENT ON FORMAT AND CONTENT REQUIREMENTS FOR LABELING AND 
              ADVERTISING.

    (a) In General.--Except as provided in subsections (b) and (c), 
each manufacturer, distributor, or 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 or limited distribution) that 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 or 
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. 729. AGREEMENT TO BAN ON NONTOBACCO ITEMS AND SERVICES, CONTESTS 
              AND GAMES OF CHANCE, AND SPONSORSHIP OF EVENTS.

    (a) Ban on All Non-Tobacco 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.

                         CHAPTER 3--ENFORCEMENT

SEC. 731. FEDERAL ENFORCEMENT OF THE PROTOCOL.

    (a) Actions.--The Attorney General may bring an action for the 
enforcement, or to restrain any breach, of the Protocol in the United 
States District Court for the District of Columbia or in the district 
court of the United States for the district in which the breach 
occurred.
    (b) Remedy.--In any action under subsection (a), the district court 
involved--
            (1) shall restrain the conduct that is the subject of the 
        breach of the Protocol;
            (2) shall order specific performance of the obligations set 
        forth in the Protocol;
            (3) may order civil penalties against any manufacturer who 
        violates a requirement of the Protocol in an amount not more 
        than $250,000 per violation per day; and
            (4) with respect to officers of manufacturers who knowingly 
        violate the protocol, may impose appropriate criminal 
        penalties, including incarceration.
    (c) Contracts With State Agencies.--The Secretary may award grants 
to or enter into contracts with an agency of any State to assist in the 
enforcement of the provisions of the Protocol.
    (d) Action by Attorney General.--With respect to the funding of any 
activities under subsection (a), the Attorney General shall use amounts 
available in the Trust Fund under section 102. If the Attorney General 
determines that amounts available in the Trust Fund are insufficient, 
the Attorney General may use amounts available for the activities of 
the Department of Justice.

SEC. 732. STATE ENFORCEMENT OF THE PROTOCOL.

    (a) Civil Action.--The attorney general of a State may bring an 
action for the enforcement, or to restrain a breach, of the Protocol if 
the alleged violation that is the subject of the proceedings occurred 
in that State.
    (b) Concurrent Jurisdiction.--Both Federal and State courts shall 
have jurisdiction over a proceeding described in subsection (a). If 
such a proceeding is commenced in a district court of the United 
States, the court shall take into consideration the size and scope of 
any State penalties that have been applied for the identical 
violations.
    (c) Remedies.--In any proceeding described in subsection (b) the 
remedies available shall be those described in section 731(b).

SEC. 733. PRIVATE ENFORCEMENT OF PROTOCOL.

    (a) In General.--A manufacturer may seek a declaration of the 
rights and obligations of the manufacturer under the Protocol by filing 
an action pursuant to section 2201 of title 28, United States Code.
    (b) Civil Action.--Any person may bring a civil action against a 
manufacturer to enforce, or restrain breaches of, the Protocol by such 
manufacturer, except that--
            (1) no such action may be commenced or maintained if the 
        Secretary has settled a proceeding pertaining to such alleged 
        breach; and
            (2) the court, in any such action, shall restrain conduct 
        in breach of the Protocol and order specific performance of the 
        obligations set forth in the Protocol, and may award damages 
        which at a minimum will recover any economic benefit derived as 
        a result of the noncompliance involved together with an amount 
        awarded as a suitable penalty associated with such breach.
Any damages awarded under this subsection shall be remitted to the 
Treasury.
    (c) Right of Intervention.--In any proceeding described in section 
731(a) or 732(a), any manufacturer may intervene as a matter of right.

                  TITLE VIII--MISCELLANEOUS PROVISIONS

SEC. 801. PROHIBITION ON USE OF FUNDS TO FACILITATE THE EXPORTATION OR 
              PROMOTION OF TOBACCO.

    (a) In General.--Notwithstanding any other provision of law, no 
funds made available by appropriations or otherwise made available may 
be used by any officer, employee, department, or agency of the United 
States--
            (1) to promote or encourage the export, reexport, sale, 
        manufacture, advertising, promotion, distribution, or use of 
        tobacco or tobacco products to or in a foreign country; or
            (2) to seek, through negotiation or otherwise, the removal 
        or reduction by any foreign country of any restriction or 
        proposed restriction in that country on the importation, 
        export, reexport, sale, manufacture, advertising, promotion, 
        distribution, packaging, labeling, use, content, imposition of 
        tariffs, or taxation, of tobacco or tobacco products.
    (b) Exception.--Subsection (a)(2) shall not apply to any 
restriction or proposed restriction by a foreign country if--
            (1) the restriction is applied in a manner which 
        constitutes a means of arbitrary or unjustifiable 
        discrimination between countries;
            (2) the Secretary of Commerce certifies in writing to 
        Congress that the restriction is being applied in a manner that 
        constitutes a means of arbitrary or unjustifiable 
        discrimination between countries; and
            (3) the Secretary of Health and Human Services certifies to 
        Congress in writing that the restriction is not a reasonable 
        means of protecting the public health.
    (c) Definition.--In this section, the term ``arbitrary or 
unjustifiable discrimination'' means a restriction or proposed 
restriction by a foreign country that--
            (1) is arbitrary or unjustifiable; and
            (2) does not adhere to the principle of national treatment 
        and applies less favorable treatment to goods that are imported 
        into that country than the country applies to like goods that 
        are the product, growth, or manufacture of that country.

SEC. 802. 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 Health and Human Services, the 
Department of Justice, the Congress, or any State or local regulatory 
or enforcement authority, information relating to a violation of law 
related to this Act or a State or local law that furthers 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 Health and Human Services, the Department of Justice, or any 
        State or local regulatory or enforcement authority.
    (e) Application of False Claims Act.--Section 3730(d) of title 31, 
United States Code, shall apply with respect to any employee to which 
this section applies if the disclosure of such employee results in a 
payment of any fee or fine to the Federal Government by the 
manufacturer, distributor or retailer involved, regardless of whether 
such employee ever commenced an action concerning the disclosure.

SEC. 803. PROHIBITIONS RELATING TO TOBACCO PRODUCTS AND CHILDREN.

    (a) In General.--Chapter VIII of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 381 et seq.) is amended by adding at the end 
the following:

``SEC. 804. PROHIBITION ON SALE OR DISTRIBUTION OF TOBACCO PRODUCTS TO 
              CHILDREN.

    ``(a) General Rule.--It shall be unlawful for any domestic concern 
or any officer, director, employee, or agent of such concern to make 
use of the mails or any means or instrumentality of interstate commerce 
to cause or contribute, either directly or through a foreign 
subsidiary, joint venture, affiliate, or licensee, to--
            ``(1) the sale or distribution of tobacco products in a 
        foreign country to children; or
            ``(2) the advertising or promotion of tobacco products in a 
        foreign country in a manner that appeals to children.
    ``(b) Interpretation.--For purposes of subsection (a), the 
advertising or promotion of tobacco products shall be considered to be 
in a manner that appeals to children if the advertising or promotion is 
carried out in a manner that would not be permissible under the 
regulations referred to in section 202 of the Healthy Kids Act if it 
occurred in the United States.

``SEC. 805. LABELING.

    ``It shall be unlawful for any domestic concern or any officer, 
director, employee, or agent of such concern, either directly or 
through a foreign subsidiary, joint venture, affiliate, or licensee, to 
make use of the mails or any means or instrumentality of interstate 
commerce to cause or contribute to the export from the United States or 
the sale or distribution in, or export from, any other country any 
tobacco product the package of which does not contain a warning label 
that--
            ``(1) is in the primary language or languages of the 
        country in which the tobacco product is sold or distributed to 
        consumers; and
            ``(2) except for the requirement of paragraph (1)--
                    ``(A) complies with Federal requirements for 
                labeling of similar tobacco products manufactured, 
                imported, or packaged for sale or distribution in the 
                United States; or
                    ``(B) complies with the labeling requirements of 
                the foreign country in which the product is sold or 
                distributed to consumers and which labeling 
                requirements the Secretary determines are substantially 
                similar to Federal requirements and are adequately 
                enforced by such country.''.
    (b) Enforcement.--Section 301 of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 331) as amended by section 203(e), is further 
amended by adding at the end the following:
    ``(cc) To carry out an act made unlawful by section 804 or 805.
    (c) Reward.--Section 303(b)(5) of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 333)(b)(5)) is amended by adding at the end the 
following: ``If a person provides information leading to the 
institution of a criminal proceeding against, and conviction of, a 
person for a violation of section 301(cc), such person shall be 
entitled to one-half of the criminal fine imposed and collected for 
such violation but not more than $125,000.''.
    (d) Definitions.--Section 201 of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 321) as amended by section 203(a)(3), is 
further amended by adding at the end the following:
    ``(ll) The term `domestic concern' means--
            ``(1) any individual who is a citizen, national, or 
        resident of the United States; and
            ``(2) any corporation, partnership, association, joint-
        stock company, business trust, unincorporated organization, or 
        sole proprietorship which has its principal place of business 
        in the United States or which is organized under the laws of a 
        State of the United States or a territory, possession, or 
        commonwealth of the United States.
    ``(mm) The term `children' means an individual under the age of 
18.''.

SEC. 804. PRESERVATION OF STATE AND LOCAL AUTHORITY.

    Except as otherwise provided for in this Act (or an amendment made 
by this Act), nothing in this Act shall be construed as prohibiting a 
State or political subdivision of a State from imposing requirements, 
prohibitions, penalties or other measures, whether by statute, rule, 
regulation, ordinance, judicial decree, consent decree, or settlement 
agreement, to further the purposes of this Act that are in addition to 
the requirements, prohibitions, or penalties required under this Act. 
Nothing in this Act (or an amendment made by this Act) shall preclude 
or deny the right of any State or political subdivision of a State to 
adopt or enforce any requirements, prohibitions, or penalties relating 
to tobacco products to the extent that such requirements, prohibitions 
or penalties are not less stringent than those required under this Act 
(or amendments).

SEC. 805. SEVERABILITY.

    If any provision of this Act, an amendment made by this Act, or the 
application of such provision or amendment to any person or 
circumstance is held to be unconstitutional, the remainder of this Act, 
the amendments made by this Act, and the application of the provisions 
of such to any person or circumstance shall not be affected thereby.

           TITLE IX--PROVISIONS RELATING TO NATIVE AMERICANS

SEC. 901. PROVISIONS RELATING TO NATIVE AMERICANS.

    (a) In General.--The provisions of this Act (or an amendment made 
by this Act) shall apply to the manufacture, distribution, and sale of 
tobacco products in any area within the jurisdiction of an Indian tribe 
or tribal organization.
    (b) Religious Practice Exception.--In recognition of the religious, 
traditional and ceremonial uses of tobacco and tobacco products by many 
Indian tribes and the members of such tribes, nothing in this Act (or 
an amendment made by this Act) shall be construed to infringe upon the 
rights of such tribes or members to transfer, acquire, possess, or use 
any tobacco or tobacco products for such purposes. The preceding 
sentence shall only be construed to apply to those quantities of 
tobacco products necessary to fulfill recognized religious, traditional 
or ceremonial purposes and not to permit the general marketing of 
tobacco products not in compliance with subchapter F of chapter V of 
the Federal Food, Drug and Cosmetic Act.
    (c) Payments to Trust Fund.--Any Indian tribe or tribal 
organization that engages in the manufacturer of tobacco products shall 
be subject to liability for an assessment under section 102.
    (d) Application of Federal Food, Drug and Cosmetic Act 
Requirements.--
            (1) In general.--The Secretary, in consultation with the 
        Secretary of the Interior, shall promulgate regulations to 
        provide for the application of any requirements of the Food, 
        Drug and Cosmetic Act with respect to tobacco products 
        manufactured, distributed, or sold in any area within the 
        jurisdiction of an Indian tribe or tribal organization as 
        appropriate to comply with subsections (a) and (b).
            (2) Eligibility for assistance.--Under the regulations 
        promulgated under paragraph (1), the Secretary, after 
        consultation with the Secretary of the Interior, may provide 
        assistance to an Indian tribe or tribal organization in meeting 
        and enforcing the requirements under such regulations if--
                    (A) the tribe or organization has a governing body 
                that has powers and carries out duties that are similar 
                to the powers and duties of State or local governments 
                and requests such assistance by application to the 
                Secretary;
                    (B) the functions to be exercised through the use 
                of such assistance relate to activities within the 
                exterior boundaries of the reservation or other areas 
                within the jurisdiction of the tribe involved; and
                    (C) the tribe or organization is reasonably 
                expected to be capable of carrying out the functions 
                required by the Secretary.
            (3) Determinations.--The Secretary, in consultation with 
        the Secretary of the Interior, shall make determinations 
        concerning the eligibility of an Indian tribe or tribal 
        organization for assistance under regulations under paragraph 
        (1) not later than 90 days after the date on which such tribe 
        or organization submits an application for such assistance.
            (4) Implementation by secretary.--If the Secretary 
        determines that the Indian tribe or tribal organization is not 
        willing or qualified to administer the requirements of the 
        regulations promulgated under this subsection, the Secretary, 
        in consultation with the Secretary of the Interior, shall 
        implement and enforce such regulations on behalf of the tribe 
        or organization.
    (e) Retail Licensing Requirements.--
            (1) In general.--The requirements of section 577 of the 
        Federal Food, Drug and Cosmetic Act (as added by section 204 of 
        this Act) shall apply to retailers that sell tobacco products 
        in any area within the jurisdiction of an Indian tribe or 
        tribal organization.
            (2) Self-regulation.--In order to be eligible for funds 
        under subsection (f), an Indian tribe or tribal organization 
        shall implement a tribal licensing program within the exterior 
        boundaries of the reservation and other areas within the 
        jurisdiction of the tribe consistent with the regulations 
        promulgated under section 577 of the Federal Food, Drug and 
        Cosmetic Act.
            (3) Implementation by secretary.--If the Secretary, in 
        consultation with the Secretary of the Interior, determines 
        that the Indian tribe or tribal organization is not qualified 
        to administer the requirements of section 577 of the Federal 
        Food, Drug and Cosmetic Act, the Secretary, in consultation 
        with the Secretary of the Interior, shall implement such 
        requirements on behalf of the tribe or organization.
    (f) Eligibility for Public Health Payments.--
            (1) In general.--For each fiscal year the Secretary shall 
        pay to each Indian tribe that has an approved tribal anti-
        smoking plan a tribal grant for the fiscal year in an amount 
        equal to the amount determined under paragraph (3), and shall 
        reduce the amounts payable under section 111 to any State in 
        which the service area or areas of the Indian tribe are located 
        by the amount so determined.
            (2) Plan.--To be eligible to receive a payment under 
        paragraph (1), an Indian tribe shall prepare and submit to the 
        Secretary for approval an anti-smoking plan and shall otherwise 
        meet the requirements of subsection (e).
            (3) Amount determined.--The amount of any funds for which 
        an Indian tribe is eligible under paragraph (1) shall be 
        determined by the Secretary based on the ratio of the total 
        number of Indians residing on such tribe's reservation or in 
        areas within the jurisdiction of the tribe in the State to the 
        total population of the State multiplied by the amount 
        allocated to State under section 111.
            (4) Use.--Amounts provided to a tribe or organization under 
        this paragraph shall be used to reimburse the tribe for 
        smoking-related health expenditures, to further the purposes of 
        this Act, and in accordance with a plan submitted by the tribe 
        or organization and approved by the Secretary as being in 
        compliance with this Act. Tribes and tribal organizations shall 
        have the flexibility to utilize such amounts to meet the unique 
health needs of such tribes within the context of tribal health 
programs if such programs meet the fundamental Federal requirements 
under this Act as determined by the Secretary.
            (5) Reallotment.--Any amounts set-aside and not expended 
        under this paragraph shall be reallotted among other eligible 
        tribes and organizations.
    (g) Obligation of Manufacturers.--A participating manufacturer 
shall not engage in any activity in an area within the jurisdiction of 
an Indian tribe or tribal organization that is prohibited under the 
Protocol.
    (h) Indian Health Service.--Amounts made available under section 
101(d)(5)(B) shall be provided to the Indian Health Service to be used 
for anti-tobacco-related consumption and cessation activities 
including--
            (1) clinic and facility design, construction, repair, 
        renovation, maintenance and improvement;
            (2) provider services and equipment;
            (3) domestic and community sanitation associated with 
        clinic and facility construction and improvement;
            (4) inpatient and outpatient services; and
            (5) other programs and services provided through the Indian 
        Health Service or through tribal contracts, compacts, grants or 
        cooperative agreements with the Indian Health Service and which 
        are deemed appropriate to raising the health status of Indians.
    (i) Preemption.--
            (1) General preemption.--Except as otherwise provided for 
        in this section, nothing in this Act shall be construed as 
        prohibiting an Indian tribe or tribal organization from 
        imposing requirements, prohibitions, penalties or other 
        measures to further the purposes of this Act that are in 
        addition to the requirements, prohibitions, or penalties 
        required under this Act.
            (2) Public exposure to smoke.--Nothing in the amendment 
        made by title V shall be construed to preempt or otherwise 
        affect any Indian tribe or tribal organization rule or practice 
        that provides greater protection from the health hazards of 
        environmental tobacco smoke.
            (3) Native americans.--A State may not impose obligations 
        or requirements relating to the application of this Act to 
        Indian tribes and tribal organizations.
                                 <all>