[Congressional Record Volume 143, Number 74 (Tuesday, June 3, 1997)]
[Senate]
[Pages S5257-S5259]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DURBIN (for himself and Mr. Lautenberg):
  S. 828. A bill to provide for the reduction in the number of children 
who use tobacco products, and for other purposes; to the Committee on 
Commerce, Science, and Transportation.

[[Page S5258]]

                      THE NO TOBACCO FOR KIDS ACT

  Mr. DURBIN. Mr. President, for more than 5 years now, the tobacco 
companies have said repeatedly, ``We do not want to sell our products 
to kids.'' They have bought full page ads in the Washington Post, the 
New York Times, and the Wall Street Journal, saying that they adamantly 
oppose the sale of tobacco to kids.
  I don't know many kids who read the Wall Street Journal, the New York 
Times, or the Washington Post. What the tobacco companies have been 
doing is creating a sham that they are serious about reducing sales to 
kids.
  Let's take a look at the record. From 1991 to 1996, the percentage of 
children who use tobacco increased by almost 50 percent. This means 
that, at the same time the tobacco companies have been saying they are 
dedicated to reducing the illegal sales of tobacco to kids, more and 
more children have been buying the tobacco products those companies 
sell.
  That is not an accident. This multi-billion dollar industry is made 
up of tobacco companies that design their marketing and advertising to 
lure new customers into this addiction. The fact that more and more 
children are smoking is clear evidence that the tobacco companies have 
failed, once again, to tell the truth. They need these new, young 
customers to prop up their profits as older customers die or quit using 
tobacco. And they continue to do what it takes to secure a new 
generation of young people who are becoming hooked on their products.
  Today, I am introducing, along with Senator Frank Lautenberg and 
Congressman Henry Waxman, a new piece of legislation that says the only 
honest way to approach the reduction of tobacco sales to children is to 
make the tobacco companies put their profits on the line.
  The NO Tobacco For Kids Act says we will do a survey of the tobacco 
products for sale and find out how many children are using those 
products and what brands they are using. Then, each year, we will 
update that survey to see which products continue to be purchased by 
children. Those companies that continue to sell their products to 
children will face a fine of $1 a pack on all their sales if they don't 
reduce the number of children using their brands in steps to reach a 
reduction of 90 percent over the next 6 years. Since current childhood 
users will cycle out of the underage population over that time, this 
measure will give the tobacco companies a chance to show whether they 
are serious about reducing the use of tobacco products by kids.
  Unless the tobacco companies have their profits on the line, we will 
continue to get cheap talk from them about stopping sales to kids. This 
bill puts teeth into the campaign to stop selling tobacco products to 
children. It sets a very simple standard for the tobacco companies: 
stop selling cigarettes and spit tobacco to children, or pay the 
consequences.
  In the past, every child hooked on tobacco was a new profit center 
for the tobacco industry. This legislation totally reverses the 
incentives for marketing to children. When this measure becomes law, 
every new child who picks up a cigarette or pockets a can of spit 
tobacco will become an economic loss to the company whose products the 
child chooses. With that reversal, the tobacco companies will have a 
strong economic incentive to stop marketing to children.
  Mr. President, this legislation could be one the simplest yet most 
effective steps we can take to reduce teenage tobacco use. I invite my 
colleagues to cosponsor the NO Tobacco For Kids Act and help us put in 
place clear performance standards for the tobacco industry to stop 
selling their products to minors.
  I ask unanimous consent that a summary of this bill and the text of 
the bill appear in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 828

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``NO Tobacco for Kids Act''.

     SEC. 2. 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 the number 
     of children who used each manufacturer's tobacco products 
     within the past 30 days.
       (b) Baseline Level.--The baseline level of child tobacco 
     product use of a manufacturer is the number of children 
     determined to have used the tobacco products of such 
     manufacturer in the first annual performance survey.

     SEC. 3. GRADUATED PERFORMANCE STANDARDS.

       (a) Performance Standards for Existing Manufacturers.--Each 
     manufacturer which manufactured a tobacco product on or 
     before the date of the enactment of this Act shall reduce the 
     number of children who use its tobacco products so that the 
     number of children determined to have used its tobacco 
     products on the basis of--
       (1) the second annual performance survey is equal to or 
     less than--
       (A) 80 percent of the manufacturer's baseline level; or
       (B) the de minimis level;
     whichever is greater;
       (2) the third annual performance survey is equal to or less 
     than--
       (A) 60 percent of the manufacturer's baseline level; or
       (B) the de minimis level;
     whichever is greater;
       (3) the fourth annual performance survey is equal to or 
     less than--
       (A) 40 percent of the manufacturer's baseline level; or
       (B) the de minimis level;
     whichever is greater;
       (4) the fifth annual performance survey is equal to or less 
     than--
       (A) 20 percent of the manufacturer's baseline level; or
       (B) the de minimis level;
     whichever is greater; and
       (5) the sixth annual performance survey and each annual 
     performance survey conducted thereafter is equal to or less 
     than--
       (A) 10 percent of the manufacturer's baseline level; or
       (B) the de minimis level;
     whichever is greater.
       (b) Performance Standards for New Manufacturers.--Any 
     manufacturer of a tobacco product which begins to manufacture 
     a tobacco product after the date of the enactment of this Act 
     shall ensure that the number of children determined to have 
     used the manufacturer's tobacco products in each annual 
     performance survey conducted after the manufacturer begins to 
     manufacture tobacco products is equal to or less than the de 
     minimis level.
       (c) De Minimis Level.--The de minimis level shall be 0.5 
     percent of the total number of children determined to have 
     used tobacco products in the first annual performance survey.

     SEC. 4. NONCOMPLIANCE.

       (a) First Violation.--If a manufacturer of a tobacco 
     product violates a performance standard, the manufacturer 
     shall pay a noncompliance fee of $1 for each unit of its 
     tobacco product which is distributed for consumer use in the 
     year following the year in which the performance standard is 
     violated.
       (b) Fee Increase for Subsequent Violations.--If a 
     manufacturer violates the performance standards in 2 or more 
     consecutive years, the noncompliance fee for such 
     manufacturer shall be increased by $1 for each consecutive 
     violation for each unit of its tobacco product which is 
     distributed for consumer use.
       (c) Reduction in Noncompliance Fee.--If a manufacturer 
     achieves more than 90 percent of the reduction in the number 
     of children who use its tobacco products that is required 
     under the applicable performance standard, the noncompliance 
     fee required to be paid by the manufacturer shall be reduced 
     on a pro rata basis such that there shall be a noncompliance 
     fee reduction of 10 percent for each percentage point over 90 
     percent achieved by the manufacturer.
       (d) Payment.--The noncompliance fee to be paid by a 
     manufacturer shall be paid on a quarterly basis, with the 
     payments due within 30 days after the end of each calendar 
     quarter.

     SEC. 5. USE OF NONCOMPLIANCE FEE.

       (a) Funds for Enforcement and Education.--The first 
     $1,000,000,000 of noncompliance fees collected in any fiscal 
     year shall go into a Tobacco Enforcement and Education Fund 
     in the United States Treasury. Fees in such fund shall be 
     available to the Secretary, without fiscal year limitation, 
     to enforce this Act and other Federal laws relating to 
     tobacco use by children and for public education to 
     discourage children from using tobacco products.
       (b) Funds for the Treasury.--Any amount of noncompliance 
     fees collected in any fiscal year which exceeds 
     $1,000,000,000 shall be paid into the United States Treasury.

     SEC. 6. JUDICIAL REVIEW.

       A manufacturer of tobacco products may seek judicial review 
     of any action under this Act only after a noncompliance fee 
     has been assessed and paid by the manufacturer 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 lesser noncompliance fee if 
     the results of the performance survey were not arbitrary and 
     capricious.

[[Page S5259]]

     SEC. 7. ENFORCEMENT.

       Section 301 of the Federal Food, Drug, and Cosmetic Act (28 
     U.S.C. 331) is amended by adding at the end the following:
       ``(x) The failure to pay any noncompliance fee required 
     under the NO Tobacco for Kids Act.''.

     SEC. 8. PREEMPTION.

       Nothing in this Act shall preempt or otherwise affect any 
     other Federal, State, or local law or regulation which 
     reduces the use of tobacco products by children.

     SEC. 9. DEFINITIONS.

       In this Act:
       (1) Children.--The term ``children'' means individuals 
     under the age of 18.
       (2) Cigarette.--The term ``cigarette'' has the same meaning 
     given such term by section 3(1) of the Federal Cigarette 
     Labeling and Advertising Act (15 U.S.C. 1332(1)).
       (3) Cigarette tobacco.--The term ``cigarette tobacco'' 
     means any product that consists of loose tobacco that 
     contains or delivers nicotine and is intended for use by 
     consumers in a cigarette.
       (4) Manufacture.--The term ``manufacture'' means the 
     manufacturing, including repacking or relabeling, 
     fabrication, assembly, processing, labeling, or importing of 
     a tobacco product.
       (5) Manufacturer.--The term ``manufacturer'' means any 
     person who manufactures a tobacco product.
       (6) Secretary.--The term ``Secretary'' means the Secretary 
     of Health and Human Services.
       (7) Smokeless tobacco.--The term ``smokeless tobacco'' has 
     the same meaning given such term by section 9(1) of the 
     Comprehensive Smokeless Tobacco Education Act of 1986 (15 
     U.S.C. 4408(1)).
       (8) Tobacco product.--The term ``tobacco product'' means a 
     cigarette, cigarette tobacco, or smokeless tobacco.
       (9) Unit.--The term ``unit'' when used in connection with a 
     tobacco product means 20 cigarettes in the case of cigarettes 
     and the smallest amount of tobacco distributed by a 
     manufacturer for consumer use in the case of any other 
     tobacco product.
                                                                    ____


               The NO Tobacco for Kids Act (NOT for Kids)

       The NO Tobacco for Kids Act (NOT for Kids) will establish a 
     clear performance standard for the reduction of youth smoking 
     in America. For too many years, the tobacco companies have 
     claimed they oppose youth smoking and spit tobacco use while 
     continuing to hook new generations of kids on their deadly 
     products. This bill sets out a schedule to reduce actual 
     youth tobacco use and contains provisions that, for the first 
     time, will give individual tobacco companies an economic 
     incentive to stop marketing their products to children. 
     Specifically, the bill provides that:
       Within 1 year after enactment, the Secretary of HHS will 
     conduct a survey to determine the number of children who used 
     each manufacturer's tobacco products within the previous 30 
     days.
       Each manufacturer will then face penalties if it does not 
     reduce the number of children who use its tobacco products by 
     specified percentages from this baseline level over the 
     succeeding years. The performance standard for each 
     manufacturer is as follows: Year 1: no standard, baseline 
     survey is taken; year 2: 20-percent reduction from the 
     baseline; year 3: 40-percent reduction from the baseline; 
     year 4: 60-percent reduction from the baseline; year 5: 80-
     percent reduction from the baseline; year 6: 90-percent 
     reduction from the baseline; and subsequent years: 90-percent 
     reduction from the baseline.
       Manufacturers that reduce use to a de minimus level--one-
     half percent of the current number of youth smokers--will be 
     deemed in compliance.
       If a manufacturer violates the performance standard, that 
     manufacturer must pay a noncompliance fee of $1 per pack, 
     pouch, can, et cetera, on all of their tobacco sales in the 
     subsequent year--not just on sales to youth. If the 
     manufacturer violates the performance standard for 2 or more 
     consecutive years, the noncompliance fee is increased by $1 
     for each consecutive year of violation. A manufacturer who 
     comes within 10 percent of the required reduction for a 
     particular year will have its noncompliance fee reduced on a 
     pro rata basis.
       The first $1 billion of noncompliance fees collected in any 
     fiscal year will go into a fund for enforcement and public 
     education to discourage children from using tobacco products. 
     Any additional fees will go to the Treasury for deficit 
     reduction.
                                 ______