[Congressional Record Volume 143, Number 156 (Saturday, November 8, 1997)]
[Senate]
[Pages S12144-S12179]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 NORTHERN IRELAND/BORDER COUNTIES FREE TRADE, DEVELOPMENT AND SECURITY 
                                  ACT

  Mr. D'AMATO. Mr. President, today I introduce the Northern Ireland/
Border Counties Free Trade, Development and Security Act. This 
legislation is a carbon copy of S. 1976, legislation that I introduced 
in the 104th Congress. Joining me as original cosponsors are my friends 
and colleagues, the senior Senator from Illinois, Senator Moseley-Braun 
and the Senator from Mississippi, Mr. Cochran.
  The Northern Ireland Free Trade, Development and Security Act 
reintroduced today will--by University of Ulster estimates, create 
12,000 jobs within the twelve counties of Northern Ireland and the 
Border Counties. It will produce an additional $1.5 billion into that 
economy annually. The new jobs it will create will be targeted to those 
areas that need the most, areas where the current unemployment rate 
ranges between 30 percent and 50 percent, areas that have never felt 
the effects of real economic expansion or growth. Further, this 
legislation will provide those jobs and hope without any discernable 
impact upon our nations trade or budget deficit, as was the case with 
Gaza/West Bank legislation. This bill will operate in harmony with 
stated goals of the European Union, United Kingdom and the Irish 
Republic. It will additionally comport with the requirements of the 
World Trade Organization.
  Mr. President, the paradox of Northern Ireland is that she has given 
so much to other cultures and lands but has been incapable of fully 
reaping the rewards of her own peoples skills and strengths at home. 
The unfortunate reality is that as in the Republic of Ireland, a large 
majority of the North's highly educated and skilled younger generation 
has been forced to emigrate due to high unemployment levels which are 
as high as 70 percent in some areas. These disadvantaged areas are the 
ones which this legislation has been especially designed to target. 
Joint cooperation and joint economic development between the United 
States, Northern Ireland and the European Union will integrate the most 
distressed parts of Northern Ireland and the Border Counties into a 
dynamic economy that--while firmly rooted in the European Union--
continues to expand and cement new trading relationships beneficial to 
all trading partners.
  Northern Ireland's peace process must move forward and the 
aspirations and goodwill of the vast majority of its citizens must be 
accompanied by hard work and endeavor. A more prosperous economy with 
more evenly spread and meaningful job opportunities can only serve to 
bridge the social and economic disparities that exist in this region. 
In conclusion this opportunity cannot be overlooked, after 25 years 
since the outbreak of the ``troubles,'' the people of Northern Ireland 
have suffered enough violence and depravity. Now it is time to embark 
on a rebuilding process that will give no chance to the terrorist but 
every chance to peace and reconciliation.
  Mr. President, it is time to roll up our sleeves and do something 
real and substantive for all the people of Northern Ireland. This 
legislation goes far beyond symbolic gestures and grand statements of 
concern. It will provide a real and solid foundation that the people of 
Northern Ireland can use to build that new and brighter future. This 
legislation represents the Senate's down payment on that future.
  Mr. President, I ask unanimous consent that a public statement of 
support from Minister James McDaid, the Minister of Tourism and Trade 
for the Republic of Ireland, found in today's Irish News--be printed in 
the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                         [From the Irish News]

        Minister Gives Backing to U.S. Free Trade Bill for North

                          (By Jim Fitzpatrick)

       The Republic's tourism minister Dr. Jim McDaid has given 
     his backing to the American free trade bill for Northern 
     Ireland and the border counties.
       The Irish News reported last month that the proposed bill, 
     which a University of Ulster study concluded would create at 
     least 12,000 jobs, was facing opposition from officials in 
     London, Dublin and Brussels.
       But Fianna Fail minister Dr. McDaid gave his unqualified 
     backing to the proposal yesterday, saying that he felt 
     special measures were necessary to redress the economic 
     imbalance on the island.
       The bill would allow companies based in the northern twelve 
     counties of Ireland to sell products directly into the U.S. 
     without any tariffs.
       Its backers argue that it would be a massive boost for 
     foreign investment and create thousands of jobs because it 
     would allow companies free access the two largest markets in 
     the world--north America and Europe.
       But the legislation, which is in the early stages of 
     development in the U.S. Congress, has faced opposition from 
     some sections of the Irish political establishment.
       Dr. McDaid's predecessor, Fine Gael minister Enda Kenny who 
     also held responsibility for trade, said the bill would 
     require customs posts to be set up within the Republic along 
     the border of the zone.
       But Dr. McDaid rejected that suggestion: ``I don't agree 
     that this bill will mean the `re-partition of Ireland'. The 
     bill addresses an area which has already been recognized by 
     the European Union and the International Fund for Ireland as 
     needing special assistance.''
       He said there was a need for ``positive discrimination'' 
     and a radical economic plan to tackle the economic problems 
     of the northern part of Ireland so that the ``whole of the 
     island'' can share in its economic success.
       He said the bill would undoubtedly be a boost to the peace 
     process, and help redress the economic imbalance crested by 
     the years of violence in the north.
       Dr. McDaid said he felt that the free trade status would 
     probably have to be granted on a time-limited basis--perhaps 
     for 25 years or more.
       It's understood that support for the free trade bill has 
     been growing within Irish political circles, although the 
     Irish government has not taken a formal position on the 
     matter.
       A number of senators and MEPs from border counties have 
     submitted letters of support to the U.S. Congress.
       The U.S. Congressman pushing the bill wrote to the Irish 
     News recently calling on people in the region to publicly 
     support the initiative.
       Massachusetts Congressman Marty Meehan praised the Clinton 
     administration's current efforts to bring new investment to 
     the north, and called on the people of the north to work with 
     the influential American politicians who are backing the free 
     trade initiative.
       ``I encourage the people of Northern Ireland and the border 
     counties to work with me through trade associations, councils 
     and elected representatives to help pass this bill as well as 
     other related measures. Together, we can help lay the 
     groundwork for a sound economic future in Northern Ireland,'' 
     he wrote.
       Mr. Meehan stressed in his letter that, contrary to some of 
     the criticisms levelled against the bill, his legislation 
     would comply fully with European Union law.
                                 ______
                                 
      By Mr. D'AMATO:
  S. 1477. A bill to amend the Harmonized Tariff Schedule of the United 
States to provide that certain goods may be reimported into the United 
States without additional duty; to the Committee on Finance.


         U.S. CATALOGUE MERCHANTS EXPORT PROMOTION ACT OF 1997

  Mr. D'AMATO. Mr President, I rise today to introduce legislation 
necessary to correct a problem faced by an important segment of the 
American exporting community, catalogue merchants. Catalogue merchants 
are multi-billion dollar export businesses in New York State and across 
the nation. Due to an anomaly in our customs law, some products sold by 
these merchants face double duties when the goods are returned to them 
by customers abroad. The bill I am introducing today seeks to correct 
this problem by making sure that duties are only assessed once--as the 
law intended--the first time a product comes into this country from 
abroad.
  If I may Mr. President, let me explain the problem by first telling 
you how the system is supposed to work. When a catalogue merchant 
imports a product directly from abroad, as the

[[Page S12145]]

importer of record, he pays a duty on the product. Let's say the 
product is a pair of trousers from Taiwan. A merchant in the United 
States takes direct delivery of a pair of pants from a company in 
Taipei, and pays duties to the U.S. Treasury on the trousers when they 
enter the United States. The merchant then sells the pants to a 
customer in Montreal, Canada. But, the pants are the wrong size, and 
the customer returns the same pair of trousers directly to the 
catalogue merchant in the U.S. In that case, properly, is no duty paid 
on the returned trousers. After all, a duty was properly paid on the 
trousers when they were first imported into the U.S. That is how the 
law works when the catalogue merchant is also the official importer of 
record.
  Now, take the same situation, but add a broker here in the United 
States, (the way most catalogue merchants import merchandise into the 
United States) who is officially the importer of record. The trousers 
come into the United States from Taipei, but this time, instead of 
going directly to the merchant, they are imported by a U.S. 
distributer. The distributer, who is the importer of record, properly 
pays the duty on the pants, and then transfers the trousers to the 
catalogue merchant in the U.S. The catalogue merchant then sells the 
trousers to the customer in Montreal, who subsequently returns the 
trousers to the U.S. merchant (via a return clearinghouse in Canada, 
that is set up to ship returned products back to the U.S. in bulk). 
That is where the problem comes in. When the trousers come back to the 
United States (as part of a bulk shipment), duty has to be paid on the 
trousers a second time. Officially, that is because the catalogue 
merchant is not the original importer of record, and thus a second duty 
is assessed on the trousers.
  Clearly, this makes no sense. A second duty should not have to be 
paid on the same pair of trousers, just because the U.S. catalogue 
seller is not the original U.S. importer of record. What this amendment 
says, essentially, is that it doesn't matter who the original importer 
of record is; as long as the proper duty is paid when an article first 
enters the U.S., a duty is not assessed the second time the article 
enters the U.S., when it re-enters the U.S. as a sales return.
  The President may know that I have sought this change in law for more 
than a year, and it is my hope that when the Senate next turns to 
miscellaneous trade matters, this very minor provision can be included. 
The U.S. Customs Service has told importers that legislation is the 
only remedy to correct this anomaly. Furthermore, the measure should be 
deemed ``revenue neutral'' because importers can already avoid the 
double duty by simply shipping the returns back by (inefficiently) 
shipping the returns back to the U.S. individually rather than 
(efficiently) consolidating the shipments.
  This measure is a common-sense, good government measure which 
promotes U.S. exports, and correspondingly keeps companies from moving 
good jobs in distribution and logistics offshore.
                                 ______
                                 
      By Ms. SNOWE (for herself and Mr. Breaux):
  S. 1480. A bill to authorize appropriations for the National Oceanic 
and Atmospheric Administration to conduct research, monitoring, 
education and management activities for the eradication and control of 
harmful algal blooms, including blooms of Pfiesteria piscicida and 
other aquatic toxins; to the Committee on Commerce, Science, and 
Transportation.


        the harmful algal bloom research and control act of 1997

  Ms. SNOWE. Mr. President, today I am introducing legislation designed 
to address a serious national problem affecting our coasts.
  The recent outbreak of Pfiesteria in the Chesapeake Bay has garnered 
a lot of media attention, and deservedly so. But Pfiesteria is actually 
just one example of a larger phenomenon--Harmful algal blooms.
  These damaging outbreaks of often toxic algae affect every U.S. 
coastal State and territory. In my State of Maine, we have outbreaks of 
paralytic shellfish poisoning every year which require the closure of 
clam flats along the coast, and the loss of millions of dollars in 
potential income.
  On Georges Bank off the New England coast, harmful algal blooms cause 
$3 million to $5 million worth of damage every year. In Washington in 
1991, an outbreak resulted in losses of razor clams exceeding $15 
million. And off Alaska, which has our Nation's most pristine 
coastline, an estimated $50 million worth of shellfish remain 
unexploited each year due to these outbreaks.
  What is frightening is that these blooms have been increasing over 
the last 30 years with no sign of abatement--and science cannot explain 
why. Nor do we have any other way of addressing the problem besides 
closing areas to swimming and fishing.
  My bill is designed to address this problem with focused and 
appropriate Federal action. NOAA, the lead Federal agency on harmful 
algal blooms, currently has the major Federal research program to 
address the problem--the Ecology and Oceanography of Harmful Algal 
Blooms project, or ECO-HAB. It is part of NOAA's Coastal Ocean Program, 
but it does not have a specific authorization. My bill would give this 
program a specific authorization for $10.5 million annually during 
fiscal years 1998, 1999, and 2000, providing it with a more certain 
future as the next century approaches.
  The bill would also authorize the following activities for the next 3 
years--$5 million per year for NOAA to upgrade its research lab 
capabilities to more effectively study the problem; $3 million annually 
for education and extension services through the Sea Grant colleges; 
$5.5 million annually to augment Federal and State monitoring programs 
to help detect harmful algal blooms early; and $8 million annually in 
grants to the States through the Coastal Zone Management Act [CZMA] 
programs to help States control blooms in their area.
  My bill represents a coordinated strategy for attacking this serious 
problem. I hope all of my colleagues will join me in supporting this 
legislation. I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed, in the 
Record, as follows:

                                S. 1480

       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 ``Harmful Algal Bloom Research 
     and Control Act of 1997''.

     SEC. 2. FINDINGS.

       The Congress finds that--
       (1) the recent outbreak of the harmful microbe Pfiesteria 
     piscicida in the coastal waters of the United States is one 
     of the larger set of potentially harmful algal blooms that 
     appear to be increasing in abundance and intensity in the 
     Nation's coastal waters;
       (2) in recent years, harmful algal blooms have resulted in 
     massive fish kills, the deaths of numerous endangered West 
     Indian manatees, beach closures, and threats to public health 
     and safety;
       (3) other recent occurrences of harmful algal blooms 
     include red tides in the Gulf of Mexico and the southeast, 
     brown tides in New York and Texas, and shellfish poisonings 
     in the Gulf of Maine, the Pacific northwest and the Gulf of 
     Alaska;
       (4) harmful algal blooms have been responsible for an 
     estimated $1,000,000,000 in economic losses during the past 
     decade;
       (5) harmful algal blooms are composed of naturally 
     occurring species that reproduce explosively when the natural 
     system is out of balance;
       (6) under certain circumstances, harmful algal blooms can 
     lead directly to other damaging marine conditions such as 
     hypoxia, as has been found in the Gulf of Mexico;
       (7) factors thought to cause or contribute to harmful algal 
     blooms include excessive nutrients and toxins from polluted 
     runoff;
       (8) there is a strong need for a national strategy to 
     identify better means of controlling polluted runoff;
       (9) the National Oceanic and Atmospheric Administration 
     (NOAA) in the Department of Commerce, through its ongoing 
     research, grant, and coastal resource management programs, 
     possesses a full range of capabilities necessary to support a 
     near and long-term comprehensive effort to control and 
     eradicate harmful algal blooms; and
       (10) funding for NOAA's research and related programs will 
     aid in improving the Nation's understanding and capabilities 
     for addressing the human and environmental costs associated 
     with harmful algal blooms.

     SEC. 3. AUTHORIZATION OF APPROPRIATIONS FOR ALGAL BLOOM 
                   ERADICATION AND CONTROL.

       There are authorized to be appropriated to the Secretary of 
     Commerce for activities related to the research, eradication, 
     and control of harmful algal blooms $32,000,000 in

[[Page S12146]]

     each of fiscal years 1998, 1999, and 2000, to remain 
     available until expended. Of such amounts for each fiscal 
     year--
       (1) $5,000,000 may be used to enable the National Oceanic 
     and Atmospheric Administration to carry out research 
     activities, including procurement and maintenance of research 
     facilities, of the Office of Oceanic and Atmospheric 
     Research, National Marine Fisheries Service, and the National 
     Ocean Service;
       (2) $10,500,000 may be used to carry out the Ecology and 
     Oceanography of Harmful Algal Blooms (ECO-HAB) project and 
     related research under the Coastal Ocean Program established 
     under section 201(c) of Public Law 102-567.
       (3) $3,000,000 may be used for outreach, education and 
     advisory services administrated by the National Sea Grant 
     Office established under subsection 204(a) of the National 
     Sea Grant College Program Act (33 U.S.C. 1123(a));
       (4) $5,500,000 may be used to carry out federal and state 
     annual monitoring and analysis activities administered by the 
     Office of Resource Conservation and Assessment of the 
     National Oceanic and Atmospheric Administration; and
       (5) $8,000,000 may be used for grants under sections 306, 
     306A and 310 of the Coastal Zone Management Act of 1972 (16 
     U.S.C. 1455, 1455a and 1456c).
                                 ______
                                 
      By Mr. DeWINE:
  S. 1481. A bill to amend the Social Security Act to eliminate the 
time limitation on benefits for immunosuppressive drugs under the 
Medicare Program, to provide for continued entitlement for such drugs 
for certain individuals after Medicare benefits end, and to extend 
certain Medicare secondary payer requirements; to the Committee on 
Finance.


            the immunosuppressive drugs coverage act of 1997

  Mr. DeWINE. Mr. President, I rise today to introduce a bill that will 
help organ transplant recipients maintain access to drugs that they 
need to prevent their immune systems from rejecting transplanted 
organs. This bill is the product of many conversations I have had with 
folks in the organ and tissue transplant community, including many 
people from Ohio.
  I have worked with people interested in organ and tissue donation for 
quite some time to increase awareness and education about transplant 
issues. Organs are very scarce, and we work hard to raise awareness so 
we can increase donation. Despite our efforts, more than 55,000 
Americans are on the organ transplant waiting list--where they wait, 
and wait, and some of them die.
  Others are lucky--they get one of the precious organs, allowing them 
to live a healthier, longer life. Because of the wonderful gift these 
lucky few have been given, it is particularly tragic that some can't 
afford the drugs--called immunosuppressive drugs--that help ensure that 
their immune systems won't reject their new organs.
  That is why I am introducing the ``Immunosuppressive Drugs Coverage 
Act of 1997.'' This bill makes sure that the 75,000 people that have 
received an organ transplant covered by Medicare always have access to 
immunosuppressive drugs. Medicare currently limits coverage for 
immunosuppressive drugs to 30 months after a transplant. In 1998, the 
limit will rise to 36 months under current law.
  But then what? After Medicare coverage ends, the transplant recipient 
must find some other way to pay for these essential drugs. Many 
transplant recipients may not be able to get other insurance coverage 
or be able to afford to pay out-of-pocket for the drugs, which average 
around $5,000 annually and can cost in excess of $10,000. Without a way 
to pay for them, these patients may be forced to stop taking the 
immunosuppressive drugs. Others will ration use of the drugs and take 
them irregularly. In either case, the risk of rejection for the 
transplant organ is much greater.
  If a transplanted organ is rejected, the recipient may die or may 
need intensive, life-sustaining medical care, which Medicare often does 
pay for. And yet, it won't pay for the drugs to prevent these life-
threatening episodes.
  For kidney recipients, who make up the vast majority of Medicare 
transplant recipients, immune rejection means an immediate return to 
renal dialysis at a cost to Medicare of around $30,000 a year. For some 
kidney patients and all other Medicare transplant recipients, rejection 
means a return to the transplant waiting list, and a need for expensive 
life-sustaining care. If they are lucky, they will get a second 
transplant, which can cost hundreds of thousands of dollars.
  My bill simply makes sure that everyone who receives an organ 
transplant through Medicare will have continued access to 
immunosuppressive drugs. This bill will help people who cannot pay for 
life-preserving immunosuppressive drugs and, at the same time, will 
help Medicare avoid the huge additional costs currently incurred when 
organs are rejected.
  When working with people to write this bill, I wanted to make sure 
the cost was as low as possible, while still getting the job done. That 
is why my bill contains safeguards that say that if any patient has 
private insurance coverage, it is the private insurance plan--and not 
Medicare--that pays for the immunosuppressive drugs.
  Someday, immunosuppressive drugs may not be necessary. We are 
beginning to see some promising research in this area. But today's 
transplant recipients need help now. They need this bill.
  The miracle of transplantation gives people the ``Gift of Life.'' It 
does not make sense to put this gift at risk because the recipient is 
unable to pay for immunosuppressive drugs. I urge every Senator to 
consider cosponsoring and supporting this bill.
                                 ______
                                 
      By Mr. COATS:
  S. 1482. A bill to amend section 223 of the Communications Act of 
1934 to establish a prohibition on commercial distribution on the World 
Wide Web of material that is harmful to minors, and for other purposes; 
to the Committee on Commerce, Science, and Transportation.


                            PORN LEGISLATION

  Mr. COATS. Mr. President, during Senate consideration of the 
Telecommunications Act of 1996 I, along with Senator James Exon, 
introduced an amendment to the Act which came to be known as the 
Communications Decency Act or CDA. This amendment held forth a basic 
principle, that children should be sheltered from obscene and indecent 
pornography. There was spirited debate on the amendment. However, 
ultimately the Senate adopted the CDA by an overwhelming margin of 84 
to 16.
  On the very day that the President signed the Telecommunications Act 
into law, the American Civil Liberties Union and the American Library 
Association, along with America On-Line and other representatives of 
the computer industry, filed a law suit against the CDA in District 
Court. In short, the case ultimately came before the Supreme Court, 
where it was struck down.
  Mr. President, however much I disagree with the ruling of the Supreme 
Court, it is reality and as such, I have studied the opinion of the 
Court and come before my colleagues today to introduce legislation that 
reflects the parameters laid out by the Court's opinion.
  Mr. President, during Congressional consideration of the CDA, 
opponents of the measure took what I like to call an ostrich approach. 
They stuck their head in the sand and their rear end in the air.
  With companies like America on Line and Microsoft in the forefront, 
there came an indignant claim from the computer industry that there was 
no problem with pornography on the Internet. They claimed that there 
was very little pornography, and that what exists is difficult to find. 
However incredulous, this is what they claimed.
  Well, Mr. President, this ostrich appears to have extricated its head 
from the sand. For after the Supreme Court's ruling, the computer 
industry, along with so-called civil liberties groups, gathered for a 
White House summit to address the issue of pornography on the net, and 
what could be done about it. There are now panels and working groups, 
media discussions and industry alternatives all designed to address 
this problem of the proliferation of pornography on the Internet and 
the threat it poses to our children.
  Mr. President, let me congratulate the computer industry, and welcome 
them to the real world.
  And what is this real world? Mr. President, I turn now to the 
February 10 edition of U.S. News and World Report. The cover story is 
entitled, ``The Business of Porn.'' The article outlines in rather 
disturbing clarity the issue of pornography in America. ``Last year''

[[Page S12147]]

it states, ``America spent more than $8 billion on hard-core videos, 
peep shows, live sex acts, adult cable programming, sexual devices, 
computer porn, and sex magazines--an amount much larger than 
Hollywood's domestic box office receipts and larger than all the 
revenues generated by rock and country music recordings. Americans now 
spend more money at strip clubs than at Broadway, off-broadway, 
regional, and nonprofit theaters; at the opera, the ballet, and jazz 
and classical music performances combined.''
  This is truly alarming, and reflects poorly on the moral direction of 
the country. And, Mr. President, as the Internet continues to grow as a 
medium of communication and commerce in our society, its role in 
expanding the commerce of pornography increases exponentially.
  The Article goes on to say that: ``In much the same way that hard-
core films on videocassette were largely responsible for the rapid 
introduction of the VCR, porn on and CD-ROM and on the Internet has 
hastened acceptance of these new technologies. Interactive adult CD-
ROMS, such as Virtual Valarie and the Penthouse Photo Shoot, create 
interest in multimedia equipment among male computer buyers.'' It goes 
on: ``Porn companies have established elaborate Web sites to lure 
customers . . . Playboy's web site, which offers free glimpses of its 
Playmates, now averages about 5 million hits a day.''
  The Article quotes Larry Flint, who says he ``imagines a future in 
which the TV and the personal computer have merged. Americans will lie 
in bed, cruising the Internet with their remote controls and ordering 
hard-core films at the punch of a button. The Internet promises to 
combine the video store's diversity of choices with the secrecy of 
purchases through the mail.''
  Mr. President, there has been a virtual explosion of commerce in 
pornography on the Internet. Adult book stores, live peep shows, adult 
movies, you name it and it is there. It is available, Mr. President, 
not just to adults, but to children.
  And what does the computer industry, the ACLU, and the American 
Library Association tout as a solution to this problem? They tout self-
ratings systems and blocking software. Opponents of the CDA, companies 
like America On-Line, the ACLU, the American Library Association, Larry 
Flint, have argued that there is no role for government in protecting 
children, that the Internet can regulate itself. The primary solution 
these people promote is system called PICs (Platform for Internet 
Content Selection), a type of self-ratings system. This would allow the 
pornographer to rate his own page, and browsers, the tool used to 
search the Internet, would then respond to these ratings. Aside from 
the ludicrous proposition of allowing the pornographer to self-rate, 
Mr. President, there is no incentive for compliance.
  I now turn to an editorial by writers in PC Week Magazine, a very 
prominent voice in the computer industry. The editorial is titled: 
``Web Site Ratings--Shame on Most of Us.'' The column discusses the 
lack of voluntary compliance by content providers with the PICs system: 
``We and many others in the computer industry and press have decried 
the Communications Decency Act and other government attempts to 
regulate the content of the Web. Instead, we've all argued, the 
government should let the Web rate and regulate its own content. Page 
ratings and browsers that respond to those ratings, not legislation, 
are the answers we've offered.''
  The article goes on, ``Too bad we left the field before the game was 
over.'' the article says, ``We who work around the Web have done little 
to rate our content.'' it states that, in a search of the Web, they 
found ``few rated sites.'' And that rated sites were the ``exception to 
the rule'' In other words, PICs does not work. It does not work, 
because there is no incentive for pornographers to comply.
  And what about blocking software? Mr. President, let me begin by 
pointing out the amazing level of deceit that proponents of this 
solution are willing to go to. The American Library Association, a 
principal opponent of the CDA, lined up with plaintiffs in challenging 
the Constitutionality of the Act. It was a central argument of the 
Library Association and their cohorts, that blocking software presented 
a non-governmental solution to the problem.
  However, Mr. President, if one logs onto the American Library 
Association Web site one finds quite a surprise. Contained on the site 
is a resolution, adopted by the ALA Council on July 2, 1997, that 
resolves: ``That the American Library Association affirms that the use 
of filtering software by libraries to block access . . . violates the 
Library Bill of Rights.'' Mr. President, I ask unanimous consent that 
this Resolution be inserted into the Record.
  So, here we find the true agenda of the American Library Association. 
They represent to the Court that everything is O.K., that all we need 
is blocking software. Then, they turn around and implement a policy 
that says no-way.
  And what are the implications? I quote now from a February 12, 1997 
article in the Boston Herald. ``John Hunt, a parent from Dorchester, 
said he was furious to learn his 11-year-old daughter was able to view 
pornography yesterday while working on a school essay at the BPL's 
Copley Square branch.'' The article goes on: ``She said all the boys 
were around the computer and they were laughing and called the girls 
over to look at the pictures of naked people,'' Hunt said. ``I want to 
find out from these library officials what is going on.''
  The article goes on to tell the story of another parent, Susan 
Sullivan who said she was stunned when her 10-year-old son spent the 
afternoon researching a book report on the computer in the BPL's Adams 
Street branch, but ended up looking through explicit photographs 
instead.
  Ms. Sullivan says: ``I'm very, very upset because I have no idea what 
he saw on the screen. He said he was using the Internet to do a book 
report on Indians and he was able to access dirty pictures, pictures of 
naked people.''
  When the library spokesman was asked about parent's concerns, he 
dismissed them saying, ``We do have children's librarians but we do not 
have Internet police.''
  So here is the genuine concern of the American Library Association 
for children and their genuine support for blocking software as a 
solution.
  Again, Mr. President, I ask unanimous consent that this article be 
made part of the record.
  However, Mr. President, this is a side issue. As I pointed out 
earlier, in the case of the computer industry, deceit and denial are 
tactics regularly employed by opponents of real child protections. The 
fact is, Mr. President, that the software does not work. In fact, it is 
particularly dangerous because it creates a false sense of security for 
parents, teachers, and children.
  I have here a transcript from Morning Edition on National Public 
Radio. It is from the September 12, 1997 program. The host, Brooke 
Gladstone is interviewing a 12-year-old named Jack. Ms. Gladstone asks 
Jack what he does when he bumps up against Net Nanny, a popular 
blocking software program.
  Jack replies: ``You go to hacking sites such as the Undernet, which 
is a site which you pay money to go a member{sic}. And then, after 
that, you have full access to all these hacking, cracking and phreaking 
and credit card fraud and all these other tools.''
  Ms. Gladstone then asks Jack if kids use these services.
  Jack replies: ``A lot. I mean, you have kids at school who bring in 
3.5 inch disks saying hey, buddy, come here. I'll sell you this disk 
for $10 dollars. There's all the hacking stuff you'll ever need.
  Ms. Gladstone then goes on to discuss with Jack how he made money 
down-loading pornography and selling it to his school-mates, making 
$30.
  Jack describes the various methods by which he defeats the blocking 
software his parents have installed.
  Later in the interview, Ms. Gladstone interviews Jay Friedland, 
founder of Surf Watch, another well-hyped blocking software program. 
Mr. Friedland readily concedes that his software can be broken, even 
describing the ways to hack the program.
  In describing the security his product offers parents, he says: 
``It's a little bit like suntan lotion. It allows you to stay out in 
the sun longer, but you can still get sunburnt.'' Mr. President, this 
does not sound very reassuring to me.
  I ask unanimous consent that the full text of this article be 
inserted into the Record at the appropriate place.

[[Page S12148]]

  The bottom line here is money. There are millions upon millions of 
dollars being made on the Internet in the pornography business. There 
is even more money being made marketing software to terrified parents, 
software that does not work.
  Let's look at the situation. You have the computer industry working 
to defeat laws designed to prohibit distribution of pornography to 
children. The solution that they promote is blocking software, 
manufactured by themselves. They are making tens- of-millions of 
dollars off of it. However, what we find out is that the software 
doesn't work. And all the while, you have companies like America On-
Line out there, head in the sand, telling parents, schools, Congress, 
and the American public that there isn't a problem with pornography on 
the Internet. And the Internet Access Providers are pulling in the big 
bucks, providing access to the red light district.
  ``The Erotic Allure of Home Schooling,'' that is the name of an 
article, published in the September 8 edition of Fortune Magazine. Mr. 
President, I have long been an advocate of home schooling. But, I must 
confess that its erotic allure has never been one of my motivations.
  It begins: ``Here's one of the Web's dirtiest words: Mars. Try 
searching for sites about the red planet lately, and you could land on 
a porn purveyor's on-line playground. What next?'' the article asks, 
``Smut linked to the keywords`home schooling'? Don't look now--it's 
already happened.''
  The article goes on: ``Perverse as these connections seem, they're 
right out of Economics 101, specifically the part about competition. 
Pornography sites are among the Web's few big moneymakers. There are 
thousands of them, from the R-rated to the boundlessly perverse. They 
compete furiously, and their main battleground for market share is 
search engines like Yahoo, Lycos, Excite, and Infoseek. Web surfers 
looking for porn typically tap into such search services and use 
keywords like ``sex'' and ``XXX.'' But so many on- line sex shops now 
display those words that their presence won't make a site stand out in 
a list resulting from a user's query. To get noticed, pornographers 
increasingly try to trick search engines into giving them top billing--
sometimes called `spoofing'.''
  The article points out that: ``Search engine companies like Infoseek 
constantly develop new filters to defeat spoofing. But calls still come 
in from irate mothers and grade-school teachers who click on innocent-
looking search results and find themselves on a page too exotic to 
mention.'' The article concludes: ``The Clinton Administration is 
encouraging efforts based on`voluntary restraint.' That's a lot to ask 
in the Web's open bazaar, where market share is the name of the game.''
  I ask unanimous consent that the full text of this article be 
inserted in the record at the appropriate place.
  Mr. President, it is not just a lot to ask. It is foolish and futile 
to ask. The bottom line is that, unless commercial distributors of 
pornography are met with the force of law, they will not act 
responsibly.
  I am here today to introduce legislation that will provide just such 
force of law.
  As I stated in my opening comments, the legislation I introduce today 
is designed to accommodate the concerns of the Supreme Court. This 
legislation is specifically targeted at the commercial distribution of 
materials harmful to minors on the World Wide Web.
  It states simply that ``Whoever in interstate or foreign commerce in 
or through the World Wide Web is engaged in the business of the 
commercial distribution of material that is harmful to minors shall 
restrict access to such material by persons under 17 years of age.''
  It is an affirmative defense to prosecution that the defendant 
restricted access to such material by requiring use of a verified 
credit card, debit account, adult access code, or adult personal 
identification number. The bill also calls upon the FCC to prescribe 
alternative procedures. The FCC is expressly restricted from regulation 
of the Internet, or Internet Speech.
  Further, the FCC and the Justice Department are directed to post on 
their Web sites information as is necessary to inform the public of the 
meaning of the term ``harmful to minors.''
  As I know that it will be of some concern to my colleagues that any 
legislation dealing with this topic takes into account the Supreme 
Court's ruling in the CDA, I would like to take some time now to 
examine the key precedents which the Court considered in its opinion on 
the CDA and how they relate to this bill.
  Central to the construction of this legislation is the Ginsberg case. 
This Court ruling upheld the constitutionality of a New York statute 
that prohibited the selling to minors under 17 years of age material 
that was considered obscene as to them even if not obscene as to 
adults. In Ginsberg, the Court rejected the defendant's argument that 
``the scope of the constitutional freedom of expression secured to a 
citizen to read or see material concerned with sex cannot be made to 
depend on whether the citizen is an adult or a minor.''
  In Ginsberg, the Court relied on both the state's interest in 
protecting the well-being of children, but also on the principle that 
``the parent's claim to authority in their own household to direct the 
rearing of their own children is basic in the structure of our 
society.''
  In the Court's opinion on the CDA, they laid out four differences 
between the CDA and the question contained in the Ginsberg case. As you 
will see, the legislation I introduce today carefully addresses each of 
these concerns.
  First, the Court points out that in the New York statute examined in 
Ginsberg, ``the prohibition against sales to minors does not bar 
parents who so desire from purchasing the magazines for their 
children.'' The Court interpreted the CDA to prohibit such activity. 
Though I must confess to my colleagues that I find it a disturbing 
proposition that a parent should so desire to purchase pornographic 
material for their children's consumption, it seems that this is a 
right that this Court feels compelled to protect.
  The legislation I introduce today places no restriction on a parent's 
right to purchase such material, and to provide it to their children, 
or anyone else. In fact, it places no restriction on any potential 
consumer of pornography. Rather, it simply requires the commercial 
purveyor of pornography to cast their message in such a way as not to 
be readily available to children.
  The Court's second issue relating to the Ginsberg case is that the 
New York statute applied only to commercial transactions. As I have 
previously stated, my legislation deals only with commercial 
transactions.
  Third, the Court points out that in Ginsberg, the New York statute 
combined its definition of harmful to minors with the requirement that 
it be ``utterly without redeeming social importance for minors.'' The 
Court goes on to express that the CDA omits any requirement that the 
material covered in the statute lack serious literary, artistic, 
political, or scientific value.
  This concern is addressed directly in my legislation, with a specific 
plank of the definition of harmful to minors requiring that the 
material in question ``lacks serious literary, artistic, political, or 
scientific value.'' Mr. President, I do not believe that it is possible 
to address a concern more directly.
  Finally, the Court states that the New York statute considered in 
Ginsberg defined a minor as a person under the age of 17, whereas the 
CDA applied to children under the age of 18, citing concern that by 
extending protection to those under 18, the CDA reached ``those nearest 
the majority.''
  Mr. President, here again I am confused my the rationale of the 
Court. For it is common practice in federal statute to recognize minors 
as those under the age of 18 years. However, the legislation I 
introduce today contains the same under 17 requirement established 
under Ginsberg.
  The second case of importance as relates to the Supreme Court ruling 
on the CDA is the Pacifica case. Though the specifics of this case are 
well- known to most by now, a summary might be helpful. In the Pacifica 
case, the Supreme Court upheld a declaratory order of the FCC relating 
to the broadcast of a recording of a monologue entitled ``Filthy 
Words.''
  The Commission found that the use of certain words referring to 
excretory or sexual activities or organs ``in an afternoon broadcast 
when children are in the audience was patently offensive'' and thus 
inappropriate for broadcast.

[[Page S12149]]

  In considering the precedent established in Pacifica, and their 
relationship to the CDA, the Court outlined 3 concerns.
  First, the Court stated that, unlike in Pacifica where the content in 
question was regulated as to the time it was broadcast, the CDA made no 
such distinction. Further, the Court makes a rather curious distinction 
in stating that the regulation in question in the Pacifica case had 
been promulgated by an agency with ``decades'' of experience in 
regulating the medium.
  On the first point, the regulation of Internet content in the context 
of time is irrelevant, as a child may access or be inadvertently 
exposed to pornography any time he or she logs onto the Internet. That 
could be in the evening, when doing a research paper, or during class--
working on an assignment, or at the public library. The simple fact 
that a child runs the risk of exposure any time presents a more 
substantial potential for harm than the time regulation approach 
approved in Pacifica, and calls for a higher level of control, not 
lower as the Court concluded.
  On the question of regulation by an agency with decades of 
experience, given the fact that the Internet is a very new medium of 
communication, it is a rather ludicrous distinction to make. No agency, 
short of the Defense Department, could demonstrate the historical 
relationship to the Internet that the FCC can with broadcast radio. 
Surely the Supreme Court would not advocate Defense Department 
regulation of the Internet.
  Further, given the concern among supporters of the Internet regarding 
government regulation of the medium, it would seem preferable to have a 
clearly defined statute, enforced by the Justice Department, as opposed 
to a regulatory regime, which would be enforced by an unaccountable 
federal agency and subject to bureaucratic creep. During debate and 
negotiations on passage of the CDA, opponents raised strong concerns 
that the FCC not be given any regulatory authority over the Internet. 
It was this opposition to a regulatory solution that resulted in a very 
restricted agency roll.
  Though the FCC is expressly prohibited from regulating content under 
the legislation I introduce today, a specific provision is made for the 
FCC to prescribe a method of restricting access that would function as 
an affirmative defense to prosecution.
  As such, this legislation provides the benefit and flexibility of an 
evolving agency regulation, whereby as technology evolved and new and 
more effective means of access restriction emerge, the Commission could 
modify the regulation, without the creation of a regulatory regime with 
expansive FCC authority over the Internet and speech.
  The Court goes on to point out that in Pacifica, the Commission's 
declaratory order was not punitive, whereas there were penalties under 
the CDA. Here, it is important to distinguish the difference in scope 
between this legislation and the CDA.
  A principal concern of the Court with the CDA, was that the CDA dealt 
with both commercial and non-commercial communications. As such, the 
cost and technology burdens necessary to restrict access that would be 
imposed by the CDA on non-commercial speakers, according to the opinion 
of the Court, would be prohibitive. The result would be, in the Opinion 
of the Court, that speech would be chilled.
  The legislation I introduce today is strictly limited to the 
commercial distribution of pornography on the World Wide Web. The 
commercial distributors of pornography on the Web already use the very 
mechanisms (credit cards and PIN numbers) that are required under this 
bill. The difference between the status quo and this bill is that 
pornography distributors would be required to cease to give away the 
freebies that any child with a mouse could gain access to.
  As such, Court concerns regarding the potential chilling effect to 
non-commercial speech that they perceived under the CDA is moot. The 
scope of this legislation does not extend to the non-commercial 
speaker. Secondly, this legislation imposes no new technological or 
economic burden on the commercial operator. It simply imposes a control 
on the manner of distribution and provides penalties for violations. 
Mr. President, there is a long tradition of fines and penalties for 
violations of laws governing the commercial distribution of 
pornography. This legislation is simply a continuation of these 
principles. In fact, the very treatment of fines in penalties under 
this legislation, mirrors those under dial-a-porn, which have been 
upheld by the Supreme Court.
  Finally, under an examination of Pacifica, the Court points out the 
differences between the level of First Amendment protection extended to 
broadcast and the Internet. Mr. President, I must say that however much 
I differ with the opinion of the Court on this question in general, I 
would simply point out that the harmful to minors standard has 
traditionally been used, and has been constitutionally upheld, as a 
standard for regulating print media. Print media is extended the 
highest level of First Amendment protection. As such, this legislation 
clearly accounts for the Supreme Court's concerns in this area.
  The Court also examines the precedents established under Renton. The 
Renton case dealt with a zoning ordinance that kept adult movie 
theaters out of residential neighborhoods. It did so based on the 
``secondary effects'' of the theaters--such as crime and deteriorating 
property values. It was the Court's opinion that the CDA treated the 
entire universe of cyberspace rather than specific areas or zones. 
Further, the Court seemed preoccupied that the CDA dealt with the 
primary, not the secondary effects of pornography.
  The legislation I introduce today deals with a narrow zone of the 
Internet, commercial activity on the World Wide Web. Though there is 
tremendous economic activity in pornography on the Web. The cyber-
geography of this bill is very limited.
  Mr. President, on this question of primary and secondary effects, I 
must differ with the Court and would like to go into this question in 
some detail.
  The underlying principle which the Senate supported by a vote of 84 
to 16 in adopting the CDA, and which is embodied in the legislation I 
introduce today is articulated in New York versus. Ferber: ``It is 
evident beyond the need for elaboration that the State's interest in 
`safeguarding the physical and psychological well-being of a minor' is 
compelling.''
  There is no question that exposure to pornography harms children. A 
child's sexual development occurs gradually through childhood. Exposure 
to pornography, particularly the type of hard-core pornography 
available on the Internet, distorts the natural sexual development of 
children.
  Essentially, pornography shapes children's sexual perspective by 
providing them information on sexual activity. However, the type of 
information provided by pornography does not provide children with a 
normal sexual perspective. As pointed out in Enough is Enough's brief 
to Court on the CDA, pornography portrays unhealthy or antisocial kinds 
of sexual activity, such as sadomasochism, abuse, and humiliation of 
females, involvement of children, incest, group sex, voyeurism, sexual 
degradation, bestiality, torture, objectification, that serve to teach 
children the rudiments of sex without adult supervision and moral 
guidance.
  Ann Burgess, Professor of Nursing at the University of Pennsylvania, 
states that children generally do not have a natural sexual capacity 
until between 10 and 12 years old. Pornography unnaturally accelerates 
that development. By short-circuiting the normal development process 
and supplying misinformation about their own sexuality, pornography 
leaves children confused, changed and damaged.
  As if the psychological threat of pornography does not present a 
sufficient compelling interest, there is a significant physical threat. 
As I have stated, pornography develops in children a distorted sexual 
perspective. It encourages irresponsible, dehumanized sexual behavior, 
conduct that presents a genuine physical threat to children. In the 
United States, about one in four sexually active teenagers acquire a 
sexually transmitted disease (STD) every year, resulting in 3 million 
STD cases. Infectious syphilis rates have more than doubled among 
teenagers since the mid-1980's. One million American teenage girls 
become pregnant each year. A report entitled ``Exposure to Pornography, 
Character and Sexual

[[Page S12150]]

Deviance'' concluded that as more and more children become exposed not 
only to soft-core pornography, but also to explicit deviant sexual 
material, society's youth will learn an extremely dangerous message: 
sex without responsibility is acceptable.
  However, there is a darker and more ominous threat. For research has 
established a direct link between exposure and consumption of 
pornography and sexual assault, rape and molesting of children. As 
stated in Aggressive Erotica and Violence Against Women, ``Virtually 
all lab studies established a causal link between violent pornography 
and the commission of violence. This relationship is not seriously 
debated in the research community.'' What is more, pedophiles will 
often use pornographic material to desensitize children to sexual 
activity, effectively breaking down their resistance in order to 
sexually exploit them.
  A study by Victor Cline found that child molesters often use 
pornography to seduce their prey, to lower the inhibitions of the 
victim, and as an instruction manual. Further, a W.L. Marshal study 
found that: ``87 percent of female child molesters and 77 percent of 
male child molesters studied admitted to regular use of hard-core 
pornography.''
  Given these facts, Mr. President, any distinction the Court makes 
regarding the effects of pornography on children seems to miss the very 
point of the state's compelling interest. For the sanctity and security 
of childhood is what these efforts are all about.
  As I have stated before in addressing this subject, childhood must be 
defended by parents and society as a safe harbor of innocence. It is a 
privileged time to develop values in an environment that is not hostile 
to them. But this foul material on the Internet invades that place and 
destroys that innocence. It takes the worst excesses of the red-light 
district and places it directly into a child's bedroom, on the computer 
their parents bought them to help them with their homework.
  I urge my colleagues to support this legislation, and yield the 
floor.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

             [From U.S. News & World Report, Feb. 10, 1997]

                      The Business of Pornography

                          (By Eric Schlosser)


 Most of the outsize profits being generated by pornography today are 
 being earned by businesses not traditionally associated with the sex 
                                industry

       John Stagliano is a wealthy entrepreneur, a self-made man 
     whose rise to the top could happen only in America. Raised in 
     a conservative, Midwestern household, Stagliano read the 
     books of Ayn Rand and was greatly influenced by their heroes, 
     rugged individualists willing to defy conventional opinion. 
     He attended the University of California--Los Angeles hoping 
     to become a professor of economics. Instead, he studied 
     modern dance, struggled to find work as an actor, became one 
     of the original Chippendale dancers, performed occasionally 
     in hard-core films, and used the prize money won during a 
     cable television strip contest to finance and direct a porn 
     film of his own.
       Today, Stagliano is the nation's leading director of hard-
     core videos, a porn auteur whose distinctive cinema verite 
     style of filmmaking has been widely imitated. His videos cost 
     about $8,000 to produce--and often earn him 30 times that 
     amount. Stagliano shoots without a crew, edits the films 
     himself, and performs in them. He also is a major contributor 
     to the Cato Institute, a well-known think tank in Washington, 
     D.C., where he regularly discusses policy issues with its 
     economists.
       Stagliano's company, Evil Angel Video, has become a 
     veritable United Artists of porn, distributing the work of 
     other top directors. Evil Angel sold about half a million 
     videos last year. At its modern Southern California 
     warehouse, hundreds of VCRs, stacked floor to ceiling, run 24 
     hours a day, five days a week, churning out copies of hard-
     core films.
       A great deal has been written about pornography, both pro 
     and con. A new movie about the life of Larry Flynt, the 
     publisher of Hustler magazine, has once again raised the 
     issue of pornography and the First Amendment. But much less 
     attention has been given to the underlying economics of porn, 
     to porn as a commodity, the end product of a modern industry 
     that arose in this country after the Second World War and has 
     grown enormously ever since.
       Critics of the sex industry have long attacked it for being 
     ``un-American''--and yet there is something quintessentially 
     American about it: the heady mix of sex and money, the 
     fortunes quickly made and lost, the new identities assumed 
     and then discarded, the public condemnations of a private 
     obsession. Largely fueled by loneliness and frustration, 
     the sex industry has been transformed from a minor 
     subculture on the fringes of society into a major 
     component of American popular culture.
       Meese formation. More than a decade ago, Attorney General 
     Edwin Meese III's Commission on Pornography issued its 
     controversial report, asserting that sexually explicit 
     materials were harmful and calling for strict enforcement of 
     the federal obscenity laws. The report prompted President 
     Ronald Reagan to launch one of the most far-reaching assaults 
     on porn in the nation's history, a campaign that continued 
     under President George Bush. Hundreds of producers, 
     distributors, and retailers in the sex industry were indicted 
     and convicted. Many were driven from the business and 
     imprisoned.
       The Reagan-Bush war on pornography coincided, however, with 
     a dramatic increase in America's consumption of sexually 
     explicit materials. According to Adult Video News, an 
     industry trade publication, the number of hard-core-video 
     rentals rose from 75 million in 1985 to 490 million in 1992. 
     The total climbed to 665 million, an all-time high, in 1996. 
     Last year Americans spent more than $8 billion on hard-core 
     videos, peep shows, live sex acts, adult cable programming, 
     sexual vices, computer porn, and sex magazines--an amount 
     much larger than Hollywood's domestic box office receipts and 
     larger than all the revenues generated by rock and country 
     music recordings. Americans now spend more money at strip 
     clubs than at Broadway, off-Broadway, regional, and nonprofit 
     theaters; at the opera, the ballet, and jazz and classical 
     music performances--combined.
       Porn has become so commonplace in recent years that one can 
     easily forget how strictly it was prohibited not long ago. 
     The sociologist Charles Winick has noted that the sexual 
     content of American culture changed more in two decades than 
     it had in the previous two centuries. Twenty-five years ago, 
     a federal study of pornography estimated that the total 
     retail value of all the hard-core porn in the United States 
     was no more than $10 million, and perhaps less than $5 
     million.
       Durng the 1980s, the advent of adult movies on 
     videocassette and on cable television, as well as the huge 
     growth in telephone sex services, shifted the consumption of 
     porn from seedy movie theaters and bookstores into the home. 
     As a result, most of the profits being generated by porn 
     today are being earned by businesses not traditionally 
     associated with the sex industry--by mom and pop video 
     stores; by long-distance carriers like AT&T by cable 
     companies like Time Warner and Tele-Communications Inc.; and 
     by hotel chains like Marriott, Hyatt, and Holiday Inn that 
     now reportedly earn million of dollars each year supplying 
     adult films to their guests. America's porn has become one 
     more of its cultural exports, dominating overseas markets. 
     Despite having some of the toughest restrictions on sexually 
     explicit materials of any Western industrialized nation, the 
     United States is now by far the world's leading producer of 
     porn, churning out hard-core videos at the astonishing rate 
     of about 150 new titles a week.
       Parallel universe. In the San Fernando Valley of Southern 
     California, near Universal City and the Warner Bros. back 
     lot, an X-rated-movie industry has emerged, an adult dream 
     factory, with its own studios, talent agencies, and stars, 
     its own fan clubs and film critics. Perhaps three quarters 
     of the hard-core films made in the United States today 
     come from Los Angeles County. Sound stages, editing 
     facilities, and printing plants are tucked away in middle- 
     and working-class neighborhoods, amid a typical Southern 
     California landscape of palm trees, shopping malls, car 
     washes, and fast-food joints. You could hardly choose a 
     more unexceptional spot for the world capital of porn.
       Nevertheless, strange things are happening in the valley, 
     behind closed doors. Every few weeks, in the upscale suburb 
     of Sherman Oaks, there's an open casting call at the 
     industry's top talent agency. Scores of young men and women 
     crowd its small offices, undressing for producers and 
     directors who audition promising newcomers and inspect them 
     for tattoos. At the sleek headquarters of an adult-film 
     company in Chatsworth, the hallways are lined with 
     autographed basketball and hockey jerseys, expensively 
     framed. There is not an obscene image in sight. It could be 
     the headquarters of ESPN. In addition to hard-core videos, 
     the company's start-of-the-art, $30 million duplicating 
     equipment also copies videos for government agencies and 
     local church groups. At a factory in Panorama City, near the 
     foothills of the San Gabriel Mountains, shelves are lined 
     with plaster casts of the buttocks and genitalia of famous 
     porn stars. The casts are used to make sexual devices, 
     lifelike reproductions packaged with celebrity endorsements. 
     A rival L.A. company sells a plastic, inflatable woman that 
     speaks with an English accent. The factory calls to mind the 
     set of a science fiction movie: Wires peek from battery-
     powered devices; metal cages on the floor are filled with 
     rubber body parts.
       The distribution of sexually explicit material has become 
     intensely competitive. Hundreds of companies now produce and 
     distribute hard-core films, selling them to wholesalers and 
     retailers and directly to consumers. Videotape has lowered 
     production costs so much, according to one industry 
     executive, that the only barriers to entry today are ``a 
     sense of embarrassment and the lack of a good lawyer.'' The 
     availability of hard-

[[Page S12151]]

     core films on home video has forced adult theaters out of 
     business in cities nationwide. Los Angeles once had more than 
     30 adult theaters; today it has perhaps six. The number of 
     adult bookstores has also declined, though not so 
     precipitously. The bookstores are supported mainly by their 
     peep booths, which at some locations now allow a customer to 
     watch five hard-core videos simultaneously on dual TV 
     screens, demanding a new quarter every 20 seconds.
       Although the sex industry in Southern California is 
     booming, most of the revenues generated by hard-core videos 
     are going to mainstream video stores. The consolidation of 
     the retail video business, marked by the growth of national 
     chains like Blockbuster, has put enormous pressure on mom and 
     pop video stores. Faced with competition from superstores, 
     independent retailers have turned to renting and selling 
     hard-core porn as a means of attracting customers. This 
     marketing strategy has been made possible by Blockbuster's 
     refusal to carry X-rated material and by the higher profit 
     margins of hard-core videos. A popular Hollywood movie on 
     videotape, such as Pulp Fiction, may cost the retailer $60 or 
     more per tape and rent for $3 a night. A new hard-core 
     release, by comparison, may cost $20 per tape and rent for $4 
     a night. Some mom and pop video stores now derive a third of 
     their income from porn. According to Paul Fishbein, editor of 
     Adult Video News, there are approximately 25,000 video stores 
     that rent and sell hard-core films--almost 20 times the 
     number of adult bookstores.
       Economies of scale. The spread of hard-core videos into 
     mainstream channels of distribution has fueled a tremendous 
     rise in the production of porn. Since 1991, the number of new 
     hard-core titles released each year has increased by 500 
     percent. The falling cost of video equipment has attracted 
     more and more filmmakers to the business. In 1978, perhaps 
     100 hard-core feature films were produced, at a typical cost 
     in today's dollars of about $350,000. Last year, nearly 8,000 
     new hard-core videos were released, some costing just a few 
     thousand dollars to produce. Wholesale prices have been 
     driven down by this flood of product. A market once 
     characterized by a relatively undifferentiated product has 
     segmented into various niches, with material often aimed at 
     narrowly defined audiences.
       Hard-core videos now cater to almost every conceivable 
     predilection--and to some that are difficult to imagine. 
     There are gay videos and straight videos; bondage videos and 
     spanking videos; tickling videos, interracial videos, and 
     videos like Count Footula for people whose fetish is feet. 
     There are ``she-male'' videos featuring transsexuals and 
     ``cat fighting'' videos in which naked women wrestle one 
     another or join forces to beat up naked men. There are hard-
     core videos for senior citizens, for sadomasochists, for 
     people fond of verbal abuse. The sexual fantasies being sold 
     in this country are far too numerous to list. America's sex 
     industry today offers a textbook example of how a free market 
     can efficiently gear production to meet consumer demand.
       Men are by far the largest consumers of porn. Most of the 
     hard-core material being sold depicts sexuality from a 
     traditional male perspective, with women's bodies as the 
     central focus, little subtlety, and an emphasis on the 
     mechanics of sex. Some American women, however, are consuming 
     a good deal of hard-core material. During the late 1980s, a 
     survey by Redbook magazine, famous for its recipes and 
     household tips, found that almost half of its readers 
     regularly watched pornographic movies in the privacy of their 
     homes. And a recent survey by the Advocate, a leading gay 
     magazine, found that 54 percent of its lesbian readers had 
     watched an X-rated video in the previous 12 months.
       Valley girls. The office of Vivid Video are in Van Nuys, 
     Calif., the epicenter of the sex industry. Located in the 
     middle of the San Fernando Valley and founded with the slogan 
     ``The Town That Started Right,'' Van Nuys has long been known 
     as a solid middle-class community, home to the ``Valley 
     girls'' whose distinctive idiom is often parodied. Great 
     Western Litho, which prints the box covers for hard-core 
     videos, is now one of the town's largest employers, along 
     with Hewlett-Packard and Anheuser-Busch. The Mid-Valley 
     Chamber of Commerce never mentions in its community guide 
     that hard-core videos are one of the area's major exports. 
     And yet from an inconspicuous set of buildings, across the 
     street from a quiet residential block, Vivid Video has become 
     one of the two or three leading adult-film companies in the 
     world by adapting the old Hollywood studio system to the mass 
     production of porn.
       Steven Hirsch, the founder and president of Vivid, has long 
     hair, a good tan, a firm handshake, a brand-new black Ferrari 
     parked outside his office. As he talks about pay-per-view buy 
     rates, brand recognition, and foreign licensing rights, he 
     seems no different from the aggressive young Hollywood 
     executives a few miles to the south. He started his company 
     in 1984, at the age of 23. He thought that all porn films 
     looked alike--and that he could make better ones. He signed 
     actresses to exclusive contracts, heavily promoted his stars 
     as the ``Vivid Girls,'' and put them in films aimed at 
     couples, with dialogue and a plot. His formula soon proved a 
     success.
       In addition to creating a sex-star system, Hirsch has made 
     Vivid one of the top hard-core film companies--along with VCA 
     Pictures, Leisure Time, and Metro--by exploiting new avenues 
     of distribution. Vivid's films appear on Playboy's cable 
     channel, and in partnership with Playboy, Vivid has launched 
     a new pay-per-view cable service called AdultVision. It 
     offers porn films 24 hours a day, seven days a week. Adult 
     movies on pay-per-view have become a large source of profits 
     for cable companies; a ``cash cow,'' one executive told 
     Variety. When an adult film is sold on pay-per-view, the 
     cable operator typically gets to keep 70 percent of the 
     revenue.
       Last year, Americans spent more than $150 million ordering 
     adult movies on pay-per-view. Most of that money was earned 
     by the nation's major cable companies: Time Warner, 
     Continental Cablevision, Cablevision Systems Corp., and 
     TeleCommunications Inc. The porn services like AdultVision 
     and its main competitor, the Spice Channel, often attract 
     more viewers than channels offering Hollywood movies. Some of 
     the adult services give cable operators 5 percent of the 
     revenues gained by selling various products that are 
     advertised between porn films. There are cable companies that 
     rank in the Fortune 500 that now earn money through the sale 
     of love oils and lingerie.
       Even larger revenues are being earned by companies that 
     offer adult films in hotels. Last year guests spent about 
     $175 million to view porn in their rooms at major hotel 
     chains such as Sheraton, Hilton, Hyatt, and Holiday Inn. Few 
     hotels have refused to carry adult material on their pay-per-
     view systems. Whenever a guest orders an adult movie through 
     pay-per-view, the hotel gets a cut of up to 20 percent.
       Hirsch also sells the foreign distribution rights to 
     Vivid's films, sometimes covering the entire cost of a 
     production through an overseas sale. Canal Plus, one of 
     France's biggest cable companies, broadcasts two hard-core 
     Vivid movies every month, which earn some of the channel's 
     highest ratings. European countries tend to have much looser 
     standards about nudity on television and much tougher 
     restrictions on violence. In Germany, films like Rambo and 
     RoboCop cannot be broadcast on television or rented in video 
     stores by anyone under the age of 18--and yet German pay 
     cable service offers extremely hard-core films. Although the 
     French sex industry is growing, American porn dominates 
     overseas markets.
       In order to meet domestic and overseas commitments, Vivid 
     shoots eight new hard-core movies a month, half on video, 
     half on 16-mm film, with an average budget of $80,000. 
     ``We're like a big machine,'' Hirsch says. Logistical 
     nightmares are common: Screenplays fail to arrive on time; 
     performers don't show up on the set.
       Hirsch says his job is not as exciting as some people 
     think: ``You spend half your day on the phone selling the 
     product and the other half of the day collecting for it.'' He 
     also believes there's nothing wrong with being in the porn 
     business; indeed, he grew up in it. Hirsch's father is a 
     former stockholder who started his own adult-film company and 
     put his teenage kids to work in the warehouse during summer 
     vacations. Hirsch's sister is now the head of production at 
     Vivid.
       Nina Hartley is the stage name of a well-known porn star 
     whose career in the sex industry has lasted more than a 
     decade. Hartley grew up in Berkeley, considers herself a 
     radical feminist, and comes from a long line of American 
     rebels. She says that her grandfather (a physics 
     professor) and her father (a radio announcer) were members 
     of the Communist Party. Raised as a feminist to distrust 
     the male gaze, Hartley secretly fantasized about dancing 
     naked. After graduating magna cum laude with a nursing 
     degree from San Francisco State, she decided to become a 
     porn star. Since the early 1980s, she has appeared in more 
     than 300 hard-core films. She is a proud exhibitionist. 
     For the past 14 years, she has lived in a stable, 
     triangular relationship with her husband--a former member 
     of the campus radical group Students for a Democratic 
     Society--and another woman. ``Nina Hartley'' is a 
     deliberate creation of theirs, a larger-than-life persona 
     designed to show that a woman can be strong and sexually 
     autonomous.
       Fear of sex? ``For all the lip service we give to sex being 
     holy and wonderful and spiritual,'' Hartley says, ``we let 
     Madison Avenue use it to sell spark plugs and dishwashing 
     detergent--to sell anything but sex.'' She thinks a great 
     deal of today's porn is not only misogynous but misanthropic, 
     treating men with disrespect. It is a disposable commodity, 
     reflecting the culture's deep fear of sex. ``The people who 
     run the porn business are not sex radicals,'' she notes, with 
     regret; their sex lives at home tend to be extremely 
     conventional. ``You'd be surprised how many of the producers 
     and manufacturers are Republicans.''
       Some women are drawn to the sex industry because they're 
     exhibitionists who love the sex and the stardom. Most are 
     attracted by the money. One well-known porn star put herself 
     through law school by acting in hard-core films; others have 
     saved their earnings, invested well, and then quit. But many 
     are drawn to the industry by drug habits and self-loathing. 
     For these women, hard-core videos become a permanent record 
     of the most degrading moments of their life.
       There is a constant demand for new talent, and few 
     actresses last more than a year or two. Hartley warns new 
     performers to avoid overexposure. A woman's pay is largely 
     based on her novelty. Hundreds of women are constantly 
     entering and exiting the industry. As in Hollywood, the 
     demand is greatest for actresses in their late teens and 
     early 20s.

[[Page S12152]]

       Sexually transmitted diseases are one of the industry's 
     occupational hazards. Performers are now required to undergo 
     monthly HIV testing, and their test results serve as a 
     passport for work. A number of producers insist upon the use 
     of condoms during especially high-risk activity; the majority 
     of producers don't. A leading actor with AIDS could in a 
     matter of days spread the virus to many other performers. 
     Because such an epidemic has not yet struck the porn 
     community, many performers question the prevailing wisdom 
     about AIDS and how it is spread. Behind these doubts lies a 
     great deal of fear, denial, and wishful thinking. Drawing 
     upon her experience as a registered nurse, Hartley has 
     published a set of ``Health and Hygiene Tips for Adult 
     Performers.''
       Attempts to form a union for sex workers have met with 
     little success. Most of the performers, according to Hartley, 
     are ``eighties kids'' who want to be rich and pay fewer 
     taxes: ``Solidarity? Brotherhood? Sisterhood? Ha!'' Verbal 
     contracts are routinely made and broken, by producers and 
     performers. Checks sometimes bounce. The borderline legal 
     status of the industry makes performers reluctant to seek 
     redress in court.
       The highest-paid performers, the actresses with exclusive 
     contracts, earn between $80,000 and $100,000 a year for doing 
     about 20 sex scenes and making a dozen or so personal 
     appearances. Only a handful of actresses--perhaps 10 to 15--
     are signed to such contracts. Other leading stars are paid 
     roughly $1,000 per scene. The vast majority of porn actresses 
     are ``B girls,'' who earn about $300 a scene. They typically 
     try to do two scenes a day, four or five times a week. At the 
     moment, there is an oversupply of women in Southern 
     California hoping to enter the porn industry. Overtime is a 
     thing of the past, and some newcomers will work for $150 a 
     scene.
       The dirty dozen. The actors in hard-core films serve mainly 
     as props for the female performers. Leading actors earn less 
     money than the top actresses but enjoy much longer careers. 
     Most enter the business in order to have sex with a large 
     variety of women. The men are valued primarily for their 
     ability to perform on cue. Perhaps a dozen men consistently 
     display that skill; some have now appeared in more than 1,000 
     hard-core films.
       Hartley spends about half of her year on the road, dancing 
     in strip clubs four to six nights a week. Like many porn 
     actresses, that is how she earns the bulk of her income. The 
     huge growth in the hard-core-video business during the 1980s 
     coincided with the opening of large strip clubs all over the 
     country. Hard-core videos now serve as a promotion for live 
     performances. According to Rob Abner, a former analyst at 
     E.F. Hutton who now publishes Stripper magazine, a trade 
     journal, the number of major strip clubs in the United States 
     roughly doubled between 1987 and 1992. Today there are about 
     2,500 of these clubs nationwide, with annual revenues ranging 
     from $500,000 to more than $5 million at a well-run 
     ``gentlemen's club.'' The salaries of featured dancers have 
     risen astronomically. The nation's top five or six porn 
     actresses earn $15,000 to $20,000 a week to dance at strip 
     clubs, doing four 20-minute shows each night. Another five or 
     six porn actresses earn between $8,000 and $15,000 a week. 
     Featured dancers are now paid, for the most part, according 
     to the ``credits'' they have accumulated--their appearances 
     in hard-core films, on video-box covers, in men's-magazine 
     photo spreads. In the hierarchy of sex workers, strippers 
     always used to look down at porn stars, viewing their work 
     with distaste. Now strippers from all over the United States 
     are flocking to Southern California and competing for roles 
     in hard-core films.
       The uncontrolled, and perhaps uncontrollable, nature of 
     today's sex industry is best illustrated by the thriving 
     trade in home-made hard-core videos. During the 1980s the 
     camcorders advertised as a means of recording weddings, 
     graduations, and a child's first steps were soon used to 
     record sex. People began making and exchanging tapes of 
     themselves in bed. An underground market arose for these 
     crude but authentic sex tapes, and companies began to 
     distribute them. Today anywhere from one fifth to one third 
     of the hard-core videos being sold in the United States are 
     classified as ``amateur,'' featuring to some degree the work 
     of nonprofessionals. Most of the companies that distribute 
     amateur porn are located in Southern California. But there 
     are hard-core amateur-video companies distributing tapes from 
     Vandalia, Ohio, and Wentzville, Mo.; from Wichita, Kan., and 
     Ronkonkoma, N.Y.; from Woodridge, Ill., and Chattanooga, 
     Tenn. Americans who like to be watched and Americans who like 
     to watch are now linked in a commerce worth hundreds of 
     millions of dollars.
       The oldest, and one of the largest, amateur porn companies 
     is based in San Diego, not far from the Salk Institute. 
     Homegrown Video offers more than 500 different tapes of 
     ordinary people having sex. The company's current owner, 
     Tim Lake, is 31 years old and could easily pass for a 
     drummer in a Seattle rock band. Lake and his wife, Alyssa, 
     sift through the new tapes that arrive at their office 
     each week from around the world. The people who appear in 
     these videos are of every race, size, and shape. Their 
     bodies are different from those seen in typical hard-core 
     films, in which the performers often look like parodies of 
     the reigning masculine and feminine ideals. People who 
     send tapes to Homegrown hope to break into the porn 
     business, or earn a little extra money, or show off. The 
     company pays them $20 for every minute of video it uses; 
     about half the tapes that Homegrown receives are 
     eventually released in some form. In a sense, the company 
     serves as a clearinghouse for the democracy of porn, 
     supplying hard-core videos by the people, for the people.
       Lake, whose real name is Farrell Timlake, was raised in 
     Fairfield County, Conn. He attended prep schools in New 
     Canaan and Kent, studied literature at the University of 
     Washington, became a performance artist, met his wife at a 
     rock club, and followed the Grateful Dead with her for years. 
     The two have been together for more than a decade and have a 
     young daughter. Lake was a porn star in Los Angeles before 
     buying Homegrown, as was his wife. Lake's brother, who 
     attended Exeter and Stanford, is now Homegrown's head of 
     sales and has performed in its films.
       In much the same way that hard-core films on videocassette 
     were largely responsible for the rapid introduction of the 
     VCR, porn on CD-ROM and on the Internet has hastened 
     acceptance of these new technologies. Interactive adult CD-
     ROMs, such as Virtual Valerie and The Penthouse Photo Shoot, 
     created interest in multimedia equipment among male computer 
     buyers. The availability of sexually explicit material 
     through computer bulletin board systems has drawn many users 
     to the Internet. Porn companies have established elaborate 
     Web sites to lure customers. But these new technologies have 
     not yet become a major source of income for the sex industry. 
     Most of the adult-film producers in Southern California--like 
     their Hollywood counterparts--have been disappointed with 
     their multimedia sales. Despite the vast quantities of porn 
     available on the Internet, the revenues being generated are 
     minuscule compared with the video trade. Nevertheless, 
     distributing porn via the Net may yield large profits one 
     day. Playboy's Web site, which offers free glimpses of its 
     Playmates, now averages about 5 million hits a day.
       Larry Flynt imagines a future in which the TV and the 
     personal computer have merged. Americans will lie in bed, 
     cruising the Internet with their remote controls--and 
     ordering hard-core films at the punch of a button. The 
     Internet promises to combine the video store's diversity of 
     choices with the secrecy of purchases through the mail. The 
     best example of how such ``non-face-to-face transactions'' 
     will take place can be found in any recent issue of Hustler. 
     Most of the ads, which cost $15,000 a page, are selling 
     telephone sex.
       Tough call. Telephone sex--considered simply one more form 
     of ``audiotext'' by executives in the trade--became a huge 
     business in the 1980s despite government efforts at 
     regulation. Every night, between the peak hours of 9 p.m. and 
     1 a.m., perhaps a quarter of a million Americans pick up the 
     phone and dial a number for commercial phone sex. The average 
     call lasts six to eight minutes, and the charges range from 
     89 cents to $4 a minute. According to the owner of one of 
     America's largest ``audiotext providers,'' three quarters of 
     the callers are lonely hearts seeking conversation with a 
     woman. The sexual content of the call is often of 
     secondary importance. Some calls reach a recorded message, 
     but most are answered by ``actresses''--bank tellers, 
     accountants, secretaries, and housewives earning a little 
     extra money at the end of the day. The ease, anonymity, 
     and interactive quality of phone sex explain its 
     commercial success and its relevance to the future of the 
     Internet. Last year Americans spent between $750 million 
     and $1 billion on telephone sex.
       AT&T is one of the biggest carriers of phone sex. In 1991, 
     the FCC restricted the type of adult calls that could be made 
     to numbers with a 900 prefix, banning ``obscene 
     communications for commercial purposes.'' But no such 
     restrictions apply to overseas calls, which can easily be 
     made from most telephones. Audiotext providers now make 
     financial arrangements with foreign phone companies and route 
     their phone-sex calls to ``actresses'' in the Dominican 
     Republic, Aruba, the Marianas, Guyana, and Russia. Half of 
     every dollar spent on one of these international sex calls 
     goes to the domestic phone company; the foreign telephone 
     company gets the other half, splitting its take with the 
     phone-sex provider. Some phone-sex providers have started 
     their own long-distance phone companies in order to cut the 
     U.S. carrier out of the deal. The use of overseas calls for 
     phone sex has been a boon to some foreign telephone 
     companies. This new routing system helps explain why the 
     annual volume of long-distance calls to the small African 
     nation of Sao Tome recently increased from 40,000 minutes to 
     13 million minutes.
       Online sex. The nation's obscenity laws and the 
     Communications Decency Act are the greatest impediments to 
     Flynt's brave new world of porn. Even he is shocked by some 
     of the material he has obtained through the Internet. ``Some 
     of the stuff othere,'' he says, ``I mean, I wouldn't even 
     publish it.'' He supports the V-chip, which will soon give 
     parents the ability to prevent their children from watching 
     violent TV programming. And he thinks children should be 
     strictly denied access to sexually explicit material. But 
     Flynt believes that adults can safely read any book or see 
     any movie without risk of being corrupted and that the 
     obscenity laws are an insult to the intelligence of the 
     American people.
       Flynt has slowly, almost imperceptibly, made the sexual 
     content of Hustler more explicit over the past few years. Its 
     photo spreads are now right on the border between soft core 
     and hard core. Readers have noticed the change and have sent 
     letters asking if

[[Page S12153]]

     what they see is real. Flynt may soon cross the line and make 
     Hustler hard core. His attorneys are not pleased with the 
     idea. But Flynt is beginning to think about his legacy. The 
     Supreme Court's 1988 decision in Larry Flynt v. Jerry Falwell 
     extended constitutional protection to political satire. The 
     infidel who once cursed the Supreme Court now seems almost 
     old-fashioned in his yearning to set another legal precedent. 
     ``I have all the money I need now,'' Flynt says, ``and I'm 
     not really motivated by it anymore. The most important 
     contribution I could make would be an end to the obscenity 
     laws.''
       Flynt predicts that if the obscenity laws are rescinded, 
     the amount of hard-core material sold in the United States 
     will skyrocket--but not for long. Once the taboo is lifted, 
     once porn loses the aura of a forbidden vice, people will 
     lose interest in it. Within a decade of overturning the 
     obscenity laws, he claims, the size of the American sex 
     industry would decline to a fraction of what it is today.
       Bruce A. Taylor is president and chief counsel of the 
     National Law Center for Children and Families, one of the 
     leading supporters of the Communications Decency Act and 
     of its provision banning information on abortion from the 
     Internet. Taylor thinks that Flynt's prediction is absurd, 
     that eliminating the nation's obscenity laws would be an 
     unmitigated disaster. Taylor opposes hard-core porn 
     because, he says, it degrades women, promotes rape, and 
     thrives on prostitution--hiring people to have sex. He 
     thinks most soft-core porn should be outlawed as well. 
     Taylor warns Americans not to be fooled by Flynt: ``Of 
     course people in the business want to see it legalized!''
       But Flynt's theory--that legalizing porn will eventually 
     reduce the demand--may not be as outlandish as it seems. That 
     is exactly what happened in Denmark a generation ago. In 
     1969, Denmark became the first nation in the world to rescind 
     its obscenity laws, an act taken after much deliberation and 
     study. According to Vagn Greve, director of the Institute of 
     Criminology and Criminal Law at the University of Copenhagen, 
     when the Danish obscenity law was overturned, there was a 
     steep rise in the consumption of porn, followed by a long, 
     steady decline. ``Ever since then,'' he says, ``the market 
     for pornography has been shrinking.'' Porn sales remain high 
     in Copenhagen mainly because of purchases by foreigners. 
     Greve's colleague at the institute, the late Berl Kutchinsky, 
     studied the effects of legalized pornography in Denmark for 
     more than 25 years. In a survey of Copenhagen residents a few 
     years after the ``porno wave'' had peaked, Kutchinsky found 
     that most Danes regarded porn as being ``uninteresting'' and 
     ``repulsive.'' Less than a quarter of the population said 
     they liked watching hard-core films. Subsequent research 
     confirmed these findings. ``The most common immediate 
     reaction to a one-hour pornography stimulation,'' Kutchinsky 
     concluded, ``was boredom.''
                                  ____


                      [From PC Week, Feb. 3, 1997]

                 Web Site Ratings--Shame on Most of Us

       We and many others in the computer industry and press have 
     decried the Communications Decency Act and other government 
     attempts to regulate the content of the Web. Instead, we've 
     all argued, the government should let the Web rate and 
     regulate its own content. Page ratings and browsers that 
     respond to those ratings, not legislation, are the answers 
     we've offered.
       The argument has been effective. With the CDA still wrapped 
     up in the courts, the general feeling seems to be that we, 
     the good guys, carried the day on this one.
       Too bad we left the field before the game was over. We who 
     work around the Web have done little to rate our content. We 
     stumbled upon this situation while testing the latest release 
     of Ziff-Davis' BrowserComp browser compatibility test 
     (available at www.zdbop.com). We were checking a few random 
     sites to verify that they contained ratings. They did not.
       After visiting a broader set of sites, we were shocked by 
     how little use of ratings we found. You can see for yourself 
     by cranking up Internet Explorer 3.0. Follow the menu path 
     View/Options/Security, and you'll see the Content adviser 
     section. Enable ratings and start checking pages. We think 
     your search will produce the same results as ours: few rated 
     sites. A few notable exceptions, such as Playboy and 
     Microsoft, had rated their pages, but they were more the 
     exception than the rule.
       They don't rate.
       Shame on the sites, including some of Ziff-Davis' own, that 
     lack ratings. No excuses really justify this lack of support. 
     Rating pages certainly isn't particularly hard. Pretty much 
     everyone agrees that the way to put a rating in a page is to 
     use the HTML PICS (Platform for Internet Content Selection) 
     tags. These tags let you specify for each of a set of rating 
     areas, such as language or violence, a level, or ratings, 
     that applies to that page. (For more information, visit 
     www.w3.org/pub/WWW/PICS.)
       Exactly which rating types a site should use is less 
     settled, but the RSACi system from the Recreational Software 
     Advisory Council (www.rsac.org) seems to be the front-runner 
     and is the one IE supports. Some might argue that their sites 
     contain no objectionable content and thus don't need ratings. 
     That argument doesn't wash, however, because to be safe those 
     wishing to limit access to potentially unsuitable pages will 
     choose the option of having the browser block unrated pages. 
     For even the best-behaved pages to be available to such 
     folks, it needs a rating.
       A bigger excuse may be the current paucity of browser 
     support for ratings. Netscape's Navigator 3.0 does not 
     include RSACi support. (Such support is coming in a future 
     release from Netscap, but it's sad that this leader in the 
     Web community was not a leader in ratings support.)
       If you are as outraged as we are by the lack of page 
     ratings, do something about it. Stop by the PICS and RSACi 
     pages. Try our experiment. Complain to sites that are not 
     rated. Complain if your browser does not support ratings.
       Raise a ruckus! If we don't rate ourselves and solve the 
     unsuitable content problem on our own, then we will have no 
     right to complain when Big Brother attempts to do it for us.
                                  ____


                [From the Boston Herald, Feb. 12, 1997]

Kids Cruise On-line Porn in Library; Students' `Right' Backed as Angry 
                            Parents Lash Out

                         (By Maggie Mulvihill)

       Boston parents who thought their kids were busy studying at 
     the public library have been shocked to find out they were 
     pulling up X-rated pictures on the Internet instead.
       While city officials are demanding action, a library 
     spokesman said officials can't censor the computer screens 
     because ``First Amendment rights do cover kids.''
       John Hunt, a parent from Dorchester, said he was furious to 
     learn his 11-year-old daughter was able to view pornography 
     yesterday while working on a school essay at the BPL's Copley 
     Square branch.
       ``She said all the boys were around the computer and they 
     were laughing and called the girls over to look at pictures 
     of naked people,'' Hunt said. ``I want to find out from these 
     library officials what is going on.''
       Parent Susan Sullivan said she was stunned when her 10-
     year-old son spent an afternoon researching a book report on 
     the computer in the BPL's Adams Street branch, but ended up 
     looking through explicit photographs instead.
       ``I'm very, very upset because I have no idea what he saw 
     on the screen,'' she said. ``He said he was using the 
     Internet to do a book report on Indians and he was able to 
     access dirty pictures, pictures of naked people.''
       However, library spokesman Arthur Dunphy said, ``We do have 
     children's librarians but we don't have Internet police.''
       The lack of controls on library computers used by city 
     schoolchildren has police investigating and city councilors 
     demanding action at a meeting today.
       ``I'm a believer in early learning, but not this kind of 
     early learning,'' said City Councilor Peggy Davis-Mullen.
       Sgt. Tom Flanagan of Area C-11 in Dorchester said his 
     station has received a number of complaints from parents over 
     the past week, prompting police to ask local library staff to 
     keep a closer eye on kids.
       ``As far as what these kids are actually getting into, I'm 
     not really sure,'' Flanagan said. ``But we'd like the 
     libraries to be a little more watchful of the kids on the 
     computers, to be a little more aware of what the kids are 
     looking at and monitoring it, especially when the children 
     today are so quick with computers.''
       Councilor Maureen Feeney of Dorchester said, ``A library is 
     supposed to be a safe haven for our children.''
       Feeney's City Council office has been flooded with calls 
     from angry parents.
       The councilor filed an order with the council's Committee 
     on City and Neighborhood Services, which will be heard today, 
     to determine ways to regulate children's Internet access at 
     local libraries.
       ``My daughter is a fourth-grader and she uses that library 
     so I am especially concerned,'' Feeney said.
       ``We encourage children to use computers but I don't want 
     any of our kids to be exposed to that kind of stuff,'' she 
     said.
       Davis-Mullen said she is concerned her second-grade twins 
     will be able to view pornography at local libraries and is 
     calling on officials to keep a closer eye on children using 
     computers.
       ``These computers are supposed to be tools to enable our 
     children to learn, not look at pornography,'' she said.
       Feeney called the constitutional rights argument 
     ``lunacy.''
       However, Dunphy said a federal court decision last year 
     banned the government from forcing libraries to censor 
     materials on the Internet for children because it violated 
     their First Amendment rights.
       The opinion, handed down by the U.S. District Court in 
     Philadelphia, enjoined the government from enforcing portions 
     of the federal Communications Decency Act, because it would 
     unconstitutionally censor materials on the Internet, Dunphy 
     said.
       The increasing amount of sexual content on the Internet and 
     World Wide Web had become a major issue nationally.
       Internet access providers have offered control commands 
     which give parents the option of restricting their children 
     from using unsupervised chat lines or other areas where X-
     rated photos or conversation are available.
                                  ____


        Resolution on the Use of Filtering Software in Libraries

       Whereas, On June 26, 1997, the United States Supreme Court 
     issued a sweeping re-

[[Page S12154]]

     affirmation of core First Amendment principles and held that 
     communications over the Internet deserve the highest level of 
     Constitutional protection; and
       Whereas, The Court's most fundamental holding is that 
     communications on the Internet deserve the same level of 
     Constitutional protection as books, magazines, newspapers, 
     and speakers on a street corner soapbox. The Court found that 
     the Internet ``constitutes a vast platform from which to 
     address and hear from a world-wide audience of millions of 
     readers, viewers, researchers, and buyers,'' and that ``any 
     person with a phone line can become a town crier with a voice 
     that resonates farther than it could from any soapbox''; and
       Whereas, For libraries, the most critical holding of the 
     Supreme Court is that libraries that make content available 
     on the Internet can continue to do so with the same 
     Constitutional protections that apply to the books on 
     libraries' shelves; and
       Whereas, The Court's conclusion that ``the vast democratic 
     fora of the Internet'' merit full constitutional protection 
     will also serve to protect libraries that provide their 
     patrons with access to the Internet; and
       Whereas, The Court recognized the importance of enabling 
     individuals to receive speech from the entire world and to 
     speak to the entire world. Libraries provide those 
     opportunities to many who would not otherwise have them; and
       Whereas, The Supreme Court's decision will protect that 
     access; and
       Whereas, The use in libraries of software filters which 
     block Constitutionally protected speech is inconsistent with 
     the United Stats Constitution and federal law and may lead to 
     legal exposure for the library and its governing authorities; 
     now, therefore, be it
       Resolved, That the American Library Association affirms 
     that the use of filtering software by libraries to block 
     access to constitutionally protected speech violates the 
     Library Bill of Rights.
       Adopted by the ALA Council, July 2, 1997.
                                  ____


                     [From Fortune, Sept. 8, 1997]

          The Erotic Allure of Home Schooling; Web Porn Sites

                         (By Edward W. Desmond)

       Pssst. Here's one of the Web's dirty words: Mars. Try 
     searching for sites about the red planet lately, and you 
     could land in a porn purveyor's online playground. What next? 
     Smut linked to the keywords ``home schooling''? Don't look 
     now--it's already happened.
       Perverse as these connections seem, they're right out of 
     Economics 101, specifically the part about competition. 
     Pornography sites are among the Web's few big moneymakers. 
     There are thousands of them, from the R-rated to the 
     boundlessly perverse. They compete furiously, and their main 
     battleground for market share is search engines like Yahoo, 
     Lycos, Excite, and Infoseek. Web surfers looking for porn 
     typically tap into such search services and use keywords like 
     ``sex'' and ``XXX.'' But so many online sex shops now display 
     those words that their presence won't make a site stand out 
     in a list resulting from a user's query. To get noticed, 
     pornographers increasingly try to trick search engines into 
     giving them top billing--sometimes called ``spoofing.''
       For a while, spoofing seldom went beyond simple tactics 
     such as stuffing home pages with lines like 
     ``SEXSEXSEXSEXSEX.'' If a search-engine user types ``sex,'' 
     the program looks for sites in its index of millions of pages 
     with the most occurrences of the words. Winners come up first 
     in the search results.
       Once that trick became old hat, porn sellers got bolder. 
     Some bought ads on the search engines--one of the more 
     startling ads run recently by Yahoo and Excite reads: ``Which 
     site ALSO offers live sorority-slut sex shows, for FREE? 
     Fastporn.'' Others took spoofing to new depths. Infoseek 
     staffers recently deleted porn pages from the index that were 
     labeled with words like Tyson, Mars, and home schooling--
     apparently the sites' sponsors hope to snag unwitting 
     surfers.
       Search-engine companies like Infoseek constantly develop 
     new filters to defeat spoofing. But calls still come in from 
     irate mothers and grade-school teachers who click on 
     innocent-looking search results and find themselves on a page 
     too toxic to mention. All this, of course, has direct bearing 
     on the powwows in Washington about making the Web safe for 
     kids. The Clinton Administration is encouraging efforts based 
     on ``voluntary restraint.'' That's a lot to ask in the Web's 
     open bazaar, where market share is the name of the game, not 
     social responsibility.
                                 ______
                                 
      By Mr. MURKOWSKI:
  S. 1483. A bill to amend the Internal Revenue Code of 1986 to provide 
for the treatment of tax-exempt bond financing of certain electrical 
output facilities; to the Committee on Finance.


              tax-exempt output facility bonds legislation

  Mr. MURKOWSKI. Mr. President, today we are on the verge of a 
revolution in the transmission and distribution of electricity that is 
fast bringing about competition and deregulation at both the wholesale 
and retail level.
  Nowhere has the competitive model advanced further than in 
California, where full deregulation will become a reality at the 
beginning of 1998. As many as 13 States representing one-third of 
Americans have moved to competition in the electricity industry.
  Today, I am introducing legislation that I believe will enhance all 
States' ability to facilitate competition. This legislation arises from 
the Energy Committee's intensive review of the electric power industry 
and from the Joint Tax Committee's report that I requested.
  Over the past two Congresses, the Committee has held 14 hearings and 
workshops on competitive change in the electric power industry, 
receiving testimony from more than 130 witnesses. One of the workshops 
specifically focused on how public power utilities will participate in 
the competitive marketplace. At these and in other forums, concerns 
have been expressed by representatives of public power about the 
potential jeopardy to their tax-exempt bonds if they participate in 
State competitive programs, or if they transmit power pursuant to FERC 
order No. 888, or pursuant to a Federal Power Act section 211 
transmission order.
  The Joint Tax Committee report, titled Federal Income Tax Issues 
Arising in Connection with Proposal to Restructure the Electric Power 
Industry, concluded that current tax laws effectively preclude public 
power utilities from participating in State open access restructuring 
plans without jeopardizing the tax-exempt status of their bonds. Under 
the tax law, if the private use and interest restriction is violated, 
the utility's bonds become retroactively taxable.
  These concerns have been echoed by the FERC. For example, in 
FERC Order No. 888, the Commission stated that reciprocal transmission 
service by a municipal utility will not be required if providing such 
service would jeopardize the tax-exempt status of the municipal 
utility. A similar concern exists if FERC issues a transmission order 
under section 211 of the Federal Power Act.

  Mr. President, if consumers and businesses are to maximize the full 
benefits of open competition in this industry it will be necessary for 
all electricity providers to interconnect their facilities into the 
entire electric grid. Unfortunately, this system efficiency is 
significantly impaired because of current tax law rules that 
effectively preclude public power entities--entities that financed 
their facilities with tax-exempt bonds--from participating in State 
open access restructuring plans and Federal transmission programs, 
without jeopardizing the exempt status of their bonds.
  No one wants to see bonds issued to finance public power become 
retroactively taxable because a municipality chooses to participate in 
a State open access plan. That would cause havoc in the financial 
markets and could undermine the financial stability of many 
municipalities. At the same time, public power should not obtain a 
competitive advantage in the open marketplace based on the Federal 
subsidy that flows from the ability to issue tax-exempt debt. Clearly 
we must provide for the transition to allow public providers to enter 
the private competitive marketplace without severe economic dislocation 
for municipalities and consumers.
  Top remedy this dilemma, I am today introducing legislation that will 
allow municipal utilities to interconnect and compete in the open 
marketplace without the draconian retroactive impacts currently 
required by the Tax Code. My bill is modeled after legislation that 
passed Congress last year which addressed electricity and gas 
generation and distribution by local furnishers.
  My bill removes the current law impediments to public power's 
capacity to participate in open access plans if such entities are 
willing to forego future use of federal subsidized tax-exempt 
financing. If public power entities make this election, and choose to 
compete on a level playing field with other power suppliers, tax-
exemption of the interest on their outstanding debt will be unaffected. 
They will be allowed an extended period during which outstanding bonds 
subject to the private use restrictions may be retired instead of 
retroactive taxation, which is the situation under existing law. The 
relief provided by my bill applies equally to outstanding bonds for 
electric generation, transmission, and distribution facilities.

[[Page S12155]]

  Mr. President, without this legislation, public power will face an 
untenable choice: either stay out of the competitive marketplace or 
face the threat of retroactive taxability of their bonds. With this 
legislation, public power will be able to transition into the 
competitive marketplace.
  Let me provide a few examples of real-world choices that public power 
faces today. According to the Joint Tax Committee report, the mere act 
of transferring public power transmission lines to a privately operated 
independent service operator [ISO] could cause the public power 
entity's tax exempt bonds to be retroactively taxable. Similarly, a 
transfer of transmission lines to a State operated ISO could, in many 
instances, trigger similar retroactive loss of tax-exemption depending 
on the amount or value of the power that is transmitted along those 
lines to private users.
  Moreover, participation in a state open access plan could, de facto, 
force public power entities to take defensive actions to maintain their 
competitive position which could inevitably lead to retroactive 
taxation of their bonds. Such actions would include offering a 
discounted rate to selective customers or selling excess capacity to a 
brokers for resale under long-term contract at fixed rates or 
discounted rates.

  I have also heard from the California Governor and members of the 
California Legislature about many of these problems and the need for 
legislation to address them. I stand ready to work with them and 
representatives from other States to solve this problem as part of the 
legislation I introduced today.
  Mr. President, my bill allows public power to participate in the new 
competitive world and provides a safe harbor within which they can 
transition from tax-exempt financing to the level playing field of the 
competitive marketplace. In addition, the legislation recognizes that 
there are some transactions that public power entities engage in that 
should not jeopardize the tax-exempt status of their bonds under 
current law and seeks to protect those transactions by codifying the 
rules governing them. This list may need to be expanded and I look 
forward to the input of the affected utilities in this regard.
  In general, the exceptions contained in this bill closely parallel 
the policies enunciated in the legislative history of the amendments 
made in the 1986 Tax Reform Act. For example, the sale of electricity 
by one public power entity to another public power entity for resale by 
the second public power entity would be exempt so long as the second 
public power entity is not participating in a State open access plan. 
In addition, a public power entity would be allowed to enter into 
pooling and swap arrangements with other utilities if the public power 
entity is not a net seller of output, determined on an annual basis. 
Finally, the bill contains a de minimis exception for sales of excess 
output by a facility when such sales do not exceed $1 million.
  Mr. President, this legislation attempts to balance many competing 
interests. This will be a difficult transition and this legislation 
does not address all the difficult problems to be faced. This is why I 
emphasize today that this is a starting point for discussion over the 
months ahead. This will be a difficult transition and this legislation 
does not address all the difficult problems to be faced. This is why I 
emphasize today that this is a starting point for discussion over the 
months ahead. I look forward to receiving comments from all interested 
parties and will encourage Finance Committee Chairman Roth to hold 
hearings on this bill early next year.
  I am open to making revisions to this bill consistent with a public 
policy that emphasizes a level playing field and a soft transition to 
competition for our important public utilities. I look forward 
especially to working with the Chairman of the Senate Finance 
Committee, Senator Roth, who has been a leader in addressing tax issues 
relating to competition in this industry.
  I ask unanimous consent that the text of this bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1483

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

     SECTION 1. TREATMENT OF TAX-EXEMPT BOND FINANCING OF CERTAIN 
                   ELECTRICAL OUTPUT FACILITIES.

       (a) Certain Transactions Treated as Sales to General Public 
     for Purposes of Private Business Tests.--Paragraph (8) of 
     section 141(b) of the Internal Revenue Code of 1986 (defining 
     nonqualified amount) is amended to read as follows:
       ``(8) Nonqualified amount.--For purposes of this 
     subsection--
       ``(A) In general.--The term `nonqualified amount' means, 
     with respect to an issue, the lesser of--
       ``(i) the proceeds of such issue which are to be used for 
     any private business use, or
       ``(ii) the proceeds of such issue with respect to which 
     there are payments (or property or borrowed money) described 
     in paragraph (2).
       ``(B) Use pursuant to certain transactions not taken into 
     account.--There shall not be taken into account in 
     determining a nonqualified amount with respect to an issue 5 
     percent or more of the proceeds of which are to be used with 
     respect to any output facility furnishing electric energy any 
     of the following transactions:
       ``(i) The sale of output by such facility to another State 
     or local government output facility for resale by such other 
     facility if such other facility is not participating in an 
     open access plan (as defined in subsection (f)(3)) and the 
     output is to be used for government use.
       ``(ii) Participation by such facility in an output exchange 
     agreement with other output facilities if--

       ``(I) such facility is not a net seller of output under 
     such agreement determined on not more than an annual basis,
       ``(II) such agreement does not involve output-type 
     contracts, and
       ``(III) the purpose of the agreement is to enable the 
     facilities to satisfy differing peak load demands or to 
     accommodate temporary outages.

       ``(iii) The sale of excess output by such facility pursuant 
     to a single agreement of not more than 30 days duration, 
     other than through an output contract with specific 
     purchasers.
       ``(iv) The sale of excess output by such facility not to 
     exceed $1,000,000.''.
       (b) Election To Terminate Tax-Exempt Bond Financing by 
     Certain Electrical Output Facilities.--Section 141 of the 
     Internal Revenue Code of 1986 (relating to private activity 
     bond; qualified bond) is amended by adding at the end the 
     following:
       ``(f) Election To Terminate Tax-Exempt Bond Financing by 
     Certain Electrical Output Facilities.--
       ``(1) In general.--In the case of an output facility for 
     the furnishing of electric energy financed with bonds which 
     would cease to be tax-exempt as the result of the 
     participation by such facility in an open access plan, such 
     bonds shall not cease to be tax-exempt bonds if the person 
     engaged in such furnishing by such facility makes an election 
     described in paragraph (2). Such election shall be 
     irrevocable and binding on any successor in interest to such 
     person.
       ``(2) Election.--An election is described in this paragraph 
     if it is an election made in such manner as the Secretary 
     prescribes, and such person agrees that--
       ``(A) such election is made with respect to all output 
     facilities for the furnishing of electric energy by such 
     person,
       ``(B) no bond exempt from tax under section 103 may be 
     issued on or after the date of the participation by such 
     facilities in an open access plan with respect to all such 
     facilities of such person, and
       ``(C) such outstanding bonds used to finance such 
     facilities for such person are redeemed not later than 6 
     months after--
       ``(i) in the case of bonds issued before December 1, 1997, 
     the later of--

       ``(I) the earliest date on which such bonds may be 
     redeemed, or
       ``(II) the date of the election, and

       ``(ii) in the case of bonds issued after November 30, 1997, 
     and before the date of the participation by such facility in 
     an open access plan, the earlier of--

       ``(I) the earliest date on which such bonds may be 
     redeemed, or
       ``(II) the date which is 10 years after the date of the 
     enactment of this subsection.

       ``(3) Open access plan.--For purposes of this subsection, 
     the term `open access plan' means--
       ``(A) a plan by a State to allow more than 1 electric 
     energy provider to offer such energy in a State authorized 
     competitive market, or
       ``(B) a plan established or approved by an order issued by 
     the Federal Energy Regulatory Commission which requires or 
     allows transmission of electric energy on behalf of another 
     person.
       ``(4) Related persons.--For purposes of this subsection, 
     the term `person' includes a group of related persons (within 
     the meaning of section 144(a)(3)) which includes such 
     person.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to sales of output after November 8, 1997.
                                 ______
                                 
      By Mr. BINGAMAN:
  S. 1484. A bill to increase the number of qualified teachers; to the 
Committee on Labor and Human Resources.


           the quality teacher in every classroom act of 1997

  Mr. BINGAMAN. Mr. Presdient, I rise today to introduce the Quality 
Teacher

[[Page S12156]]

in Every Classroom Act, a bill to ensure quality and accountability in 
Federal efforts to improve public school teaching.
  Let me begin by stating that I am a strong supporter of the hard-
working teachers in American classrooms. Coming from a family of 
teachers, I know first-hand how challenging the work is. Having visited 
schools throughout my home State of New Mexico, I know how dedicated 
and professional the vast majority of our teachers are. And any time 
you talk to students, the conversation always comes back to teachers.
  However, it's also pretty clear that we are not doing anyone--neither 
teachers nor students--a great service by putting so many under-
qualified teachers in American classrooms, and providing so little 
support to teachers and the institutions that prepare and support them.
  Too often, our teachers lack enough background in their subjects, our 
colleges of education are not rigorous enough, our state licensing 
standards are too low, and local districts have too few high-quality 
candidates to choose from.
  Improving teaching quality won't solve all of our educational 
problems, but it is at the heart of what goes on in individual 
classrooms around the nation. And as shown on the following charts, the 
state and national statistics are alarming. None of us is doing as much 
as is needed to improve teaching quality:
  As this first chart shows, most States have a long way to go in 
promoting teaching quality. In the 1997 Education Week national report 
card called ``Quality Counts,'' none of the States received an ``A'', 
and most received ``C's.''
  Like many other States, New Mexico received a ``C-minus'' for 
teaching quality in this report because--while the State does require 
national certification for all its schools of education: Only 52 
percent of NM high school teachers have degrees in their subject areas; 
the State does not require that teachers have a degree in liberal arts 
(math, science, history, etc.); and fewer than three-fourths of NM 
teachers who participated in professional development received some 
form of support to do so.
  As a Nation, we are unfortunately actually doing worse over all as 
the 1990's have progressed. The just-released 1997 Goals report showed 
that the percentage of high school teachers with a degree in their 
subject area actually declined over all from 66 percent in 1990 to 63 
percent in 1994. For New Mexico, the percentage has remained near the 
bottom, at 52 percent.
  For New Mexico students, that means that it's about a 50-50 chance 
whether their teachers have a strong background in the area they are 
teaching.
  And the situation is particularly bleak in the key areas of math and 
science, where we need to be at our best.
  This second chart shows the latest data showing that nearly one in 
three high school math teachers lacks a math degree. In New Mexico, the 
percentage was 36 percent, and in other states over half the math 
teachers lack even a minor in math.
  This next charts shows a similar story in the area of high school 
science. Nearly one in four high school science teachers lacks a 
science degree. In most states, over 20 percent of the high school 
science teachers lack that background. It's worth noting that in this 
area New Mexico fares better than most States, at only 19 percent.
  More than 50,000 people are teaching America's children without the 
minimal training required to meet professional standards. In schools 
with the highest minority enrollments, minority students have less than 
a 50% chance of sitting in the class of a math or science teacher with 
a degree in that field.
  From talking to teachers, however, I know that it's they more than 
anyone else who want our public schools to be improved so that children 
to learn as much as they can. And that's important, because improving 
and maintaining the quality of America's teaching force is on the mind 
of every policy maker today. Clearly, all our efforts at raising 
curriculum and testing standards for children will be severely diluted 
without the powerful presence of a competent instructor in each 
classroom.
  More than anything else, the public is demanding properly prepared 
teachers. A properly prepared teacher in every classroom is a 
reasonable demand. And the federal government, which has for too long 
talked about improving teaching without doing anything about it, needs 
to become a leader in this area. That's what this legislation is all 
about.
  Now I want to be the first to acknowledge that I am not the only one 
interested in this issue. Senators Kennedy, Reed, Frist, and others 
have already introduced teacher training legislation, much of it based 
on the 1996 findings of the National Commission on Teaching and 
Learning. And I know that the Chairman of the Labor Committee is 
extremely interested in this issue. I look forward to working with all 
of them as the reauthorization of the Higher Education Act continues.
  However, this legislation, called the Quality Teacher in Every 
Classroom Act, is distinctive in several regards. Most importantly, 
this is the only Senate proposal that provides a thorough formula for 
reform in teacher training. The legislation addresses the problem 
comprehensively, and leverages as much improvement as possible given 
the limited Federal investment in education.
  Let me take a moment to describe its main features, which are 
outlined on the chart summarizing the bill.
  First, the Act would take the simple step of making sure that parents 
have available to them important information about the basic 
qualifications and academic background of their children's teachers.
  Teachers are professionals just like the family doctor or the local 
lawyer, and so their backgrounds should be just as available as if 
their diplomas were framed on the wall. I believe that the availability 
of this information will engage and empower parents in advocating for 
improved schools.
  Second, the Act calls on states to reduce the percentage of teachers 
who are uncertified or lack a sufficient academic background. States 
must make zero tolerance for poorly prepared teachers their number one 
priority.
  This bill gives them five years to reduce substantially the number of 
unlicensed teachers as well as those who are teaching outside of their 
area of expertise. It also requires them to accept any teacher from 
another area who has national certification as a master teacher as 
fully qualified to teach in that state.
  Next, the Act calls on colleges of education to make substantial 
changes in the preparation that they provide teaching candidates, 
including graduating more students who will pass state teacher 
licensing exams and requiring a rigorous liberal arts major in an 
academic subject area, which is not uniformly required.
  In addition, the Act will address the lack of high-quality teachers 
and teaching candidates in our most poverty-stricken schools by 
providing financial incentives for highly qualified teaching 
candidates. For each year they taught in high-need areas, new teachers 
would have their school loans forgiven. And experienced teachers who 
pursue advanced work such as national certification or Advanced 
Placement training would also qualify for loan forgiveness.
  This incentive should bring new energy and talent to poor 
communities, inspiring students and instilling parents with renewed 
confidence in their children's schools.
  Finally, the bill would help improve the recruitment and support 
provided for new teachers by creating a competitive grant program to 
fund partnerships among colleges of education, school districts, and 
schools.
  Each member of the partnership including a school district, a school 
that includes at least 30% children who meet criteria for poverty, and 
a university or college that offers teacher preparation. Special 
priority would be given to applications that used or created laboratory 
or ``teaching'' schools with their partner districts, where teaching 
candidates learn hands-on.

  In conclusion, I would like to say that I am excited to introduce a 
bill that brings together so many of the legislative agendas I have 
been promoting for many years: rigorous standards, constructive support 
for those who are

[[Page S12157]]

failing to meet those standards, and a comprehensive approach to 
solving central problems of American public life.
  I ask unanimous consent that a copy of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1484

       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 ``Quality Teacher in Every 
     Classroom Act''.

     SEC. 2. STATEMENT OF POLICY; FINDINGS.

       (a) Statement of Policy.--The Congress declares it to be 
     the policy of the United States that each student shall have 
     a competent and qualified teacher.
       (b) Findings.--Congress makes the following findings:
       (1) The number of elementary and secondary school students 
     is expected to increase each successive year between 1997 and 
     2006, at which time total enrollment will reach 54,600,000.
       (2) As the number of students increases, the need for 
     qualified teachers will increase. Increases in enrollment and 
     teacher retirements together will create demand for 2,000,000 
     new teachers by the year 2006.
       (3) The lack of qualified teachers to meet this demand is a 
     significant barrier to students receiving an appropriate 
     education.
       (4) The National Commission on Teaching and America's 
     Future has found that one-quarter of the Nation's classroom 
     teachers are not fully qualified to teach in their subject 
     areas. Unless corrective action is taken at the local, State, 
     and Federal levels, the additional demand for teachers is 
     likely to result in a further decline in teacher quality.
       (5) 1997 is the time to redouble efforts to ensure that 
     teachers are properly prepared and qualified, and receive the 
     ongoing support and professional development teachers need to 
     be effective educators.
                        TITLE I--PARENTAL RIGHTS

     SEC. 101. PARENTAL RIGHT TO KNOW.

       Part E of title XIV of the Elementary and Secondary 
     Education Act of 1965 (20 U.S.C. 8891 et seq.) is amended by 
     adding at the end the following:

     ``SEC. 14515. TEACHER QUALIFICATIONS.

       ``Any public elementary school or secondary school that 
     receives funds under this Act shall provide to the parents of 
     each student enrolled in the school information regarding--
       ``(1) the qualifications of each of the student's teachers, 
     both generally and with respect to the content area or areas 
     in which the teacher provides instruction; and
       ``(2) the minimum qualifications required by the State for 
     teacher certification or licensure.''.
                      TITLE II--QUALIFIED TEACHERS

     SEC. 201. ENSURING A QUALIFIED TEACHER IN EVERY CLASSROOM.

       Part E of title XIV of the Elementary and Secondary 
     Education Act of 1965 (20 U.S.C. 8891 et seq.) (as amended by 
     section 101) is further amended by adding at the end the 
     following:

     ``SEC. 14516. 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 section and ends 5 years after such date, 
     and subject to paragraphs (2) and (3), each teacher in a 
     public elementary school 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);
       ``(4) the State provides incentives for teachers to pursue 
     and achieve advanced teaching and subject area content 
     standards;
       ``(5) the State has in place an effective mechanism to 
     remove incompetent or unqualified teachers;
       ``(6) the State aggressively helps schools, particularly 
     schools in high need areas, recruit and retain qualified 
     teachers;
       ``(7) during the period described in paragraph (1), 
     elementary school and secondary school teachers who do not 
     meet the requirements of paragraph (1), shall not be 
     disproportionately employed in high poverty elementary 
     schools or secondary schools; and
       ``(8) any teacher who meets the standards set by the 
     National Board for Professional Teaching Standards is 
     considered fully qualified to teach in any school district or 
     community in the State.''.
      TITLE III--FEDERAL FUNDS USED IN THE PREPARATION OF TEACHERS

     SEC. 301. MINIMUM TEACHER TRAINING STANDARDS.

       Title V of the Higher Education Act of 1965 (20 U.S.C. 1101 
     et seq.) is amended by inserting after section 500 of such 
     Act (20 U.S.C. 1101) the following:

     ``SEC. 500A. MINIMUM TEACHER TRAINING STANDARDS.

       ``(a) General Requirement.--Any institution of higher 
     education that receives, directly or indirectly, any funds 
     appropriated pursuant to this Act or pursuant to any other 
     Federal law for the purpose of preparing or training teachers 
     shall--
       ``(1)(A) meet nationally recognized professional standards 
     for accreditation; or
       ``(B) demonstrate to the Secretary that at least 90 percent 
     of the graduates of such institution who enter the field of 
     teaching take, and pass on their first attempt, the State 
     teacher certification or licensure examination for new 
     teachers that is in place on the day of enactment of the 
     Quality Teacher in Every Classroom Act; and
       ``(2) ensure that the graduates hold a liberal arts degree 
     (consisting of a minimum of 18 credits in a social science, 
     arts, humanities, science, or mathematics major) in addition 
     to professional education courses leading to State teacher 
     certification or licensure.
       ``(b) Authority of Secretary To Waive.--The Secretary may 
     issue a one-time waiver, for a duration of not more than 5 
     years, in any case in which an institution of higher 
     education can demonstrate a bona fide commitment to, and 
     demonstrate measurable progress toward, meeting the 
     requirements of subsection (a).''.
  TITLE IV--INCENTIVES FOR INCREASING THE SUPPLY OF QUALIFIED TEACHERS

     SEC. 401. LOAN FORGIVENESS.

       (a) Guaranteed Loans.--Section 437 of the Higher Education 
     Act of 1965 (20 U.S.C. 1087) is amended--
       (1) in the section heading, by striking the period at the 
     end and inserting a semicolon and ``LOAN FORGIVENESS FOR 
     TEACHING.'';
       (2) by amending the heading for subsection (c) to read as 
     follows: ``Discharge Related to School Closure or False 
     Certification.--''; and
       (3) by adding at the end thereof the following new 
     subsection:
       ``(e) Cancellation of Loans for Teaching.--
       ``(1) In general.--The Secretary shall discharge the 
     liability of a borrower of a loan made under section 428, 
     428H, or 428C (to the extent that a loan made under section 
     428C repays a loan made under section 428 or 428H) on or 
     after the date of enactment of the Quality Teacher in Every 
     Classroom Act, to students who have not previously borrowed 
     under any of such sections, by repaying the amount owed on 
     the loan, to the extent specified in paragraph (3), for 
     service described in paragraph (2) as a full time teacher 
     who--
       ``(A) has demonstrated, in accordance with State teacher 
     certification or licensure law, the subject matter knowledge, 
     teaching knowledge, and teaching skill necessary to teach 
     effectively in the content area or areas for which the 
     borrower provides instruction;
       ``(B) has a liberal arts major (in the subject in which the 
     teacher teaches if the teacher teaches in a secondary school) 
     consisting of a minimum of 18 credits in a social science, 
     arts, humanities, science, or mathematics major;
       ``(C)(i) graduated in the top 25 percent of the teachers 
     class in college (as determined by the teacher's grade point 
     average in college); or
       ``(ii) scored in the top 20 percent of students taking a 
     Graduate Record Examination (GRE) or a State teacher 
     certification or licensure examination; and
       ``(D) graduated from an institution of higher education 
     that meets the requirements of section 500A.
       ``(2) Qualifying service.--
       ``(A) In general.--A loan shall be discharged under 
     paragraph (1) for service by the borrower as a full-time 
     teacher for 1 or more academic years in a public elementary 
     or secondary school--
       ``(i)(I) in the school district of a local educational 
     agency that is eligible in that academic year for assistance 
     under title I of the Elementary and Secondary Education Act 
     of 1965 (20 U.S.C. 6301 et seq.); and
       ``(II) that, for that academic year, has been determined by 
     the Secretary to be a school in which the enrollment of 
     children counted under section 1124(c) of that Act (20 U.S.C. 
     6333(c)) exceeds 30 percent of the total enrollment of that 
     school; or
       ``(ii) in an academic subject matter area in which the 
     State or local educational agency determines to the 
     satisfaction of the Secretary that there is a shortage of 
     qualified teachers.
       ``(B) Accelerated discharge.--A loan shall be discharged 
     under paragraph (1) at the rate provided in paragraph (3)(B) 
     for service described in clause (i) or (ii) of subparagraph 
     (A) by the borrower as a full-time teacher for 1 or more 
     academic years if such borrower--
       ``(i) has engaged in such service for each of the 5 
     preceding academic years; and
       ``(ii) has pursued and achieved advanced teaching 
     credentials, such as certification by

[[Page S12158]]

     the National Board for Professional Teaching Standards, 
     Advanced Placement Institutes training, or a graduate degree 
     in a related field.
       ``(3) Percentage of cancellation.--
       ``(A) In general.--Loans shall be discharged under 
     paragraph (1) for service described in paragraph (2)(A) at 
     the rate of--
       ``(i) 20 percent for the first or second complete academic 
     year of such service, which amount for each year shall not 
     exceed $6,000;
       ``(ii) 25 percent for the third complete year of such 
     service, which amount shall not exceed $7,500; and
       ``(iii) 35 percent for the fourth complete year of such 
     service, which amount shall not exceed $10,500;

     except that the total amount for all such academic years 
     shall not exceed $30,000.
       ``(B) Accelerated discharge.--Loans shall be discharged 
     under paragraph (1) for service described in paragraph (2)(B) 
     at the rate of 50 percent for each complete academic year of 
     such service, except that the total amount discharged shall 
     not exceed $5,000 for any borrower.
       ``(C) Treatment of Interest.--If a portion of a loan is 
     discharged under subparagraph (A) or (B) for any year, the 
     entire amount of interest on that loan that accrues for that 
     year shall also be discharged by the Secretary.
       ``(D) Refunding prohibited.--Nothing in this section shall 
     be construed to authorize refunding of any repayment of a 
     loan.
       ``(4) Treatment of canceled amounts.--The amount of a loan, 
     and interest on a loan, that is canceled under this 
     subsection shall not be considered income for purposes of the 
     Internal Revenue Code of 1986.
       ``(5) Prevention of double benefits.--No borrower may, for 
     the same volunteer service, receive a benefit under both this 
     subsection and subtitle D of title I of the National and 
     Community Service Act of 1990 (42 U.S.C. 12601 et seq.).
       ``(6) Lender reimbursement.--The Secretary shall specify in 
     regulations the manner in which lenders shall be reimbursed 
     for loans made under this part, or portions thereof, that are 
     discharged under this subsection.
       ``(7) List of schools.--
       ``(A) Publication.--The Secretary shall publish annually a 
     list of the schools for which the Secretary makes a 
     determination under paragraph (2)(A)(i)(II).
       ``(B) Special rule.--If the list of schools described in 
     subparagraph (A) is not available before May 1 of any year, 
     the Secretary may use the list for the year preceding the 
     year for which the determination is made to make such service 
     determination.
       ``(8) Continuing eligibility.--Any teacher who performs 
     service in a school which--
       ``(A) meets the requirements of paragraph (2)(A) in any 
     year during such service; and
       ``(B) in a subsequent year fails to meet the requirements 
     of such paragraph,

     may continue to teach in such school and shall be eligible 
     for loan cancellation pursuant to paragraph (1) with respect 
     to such subsequent years.''.
       (b) Direct Loans.--Part D of title IV of the Higher 
     Education Act of 1965 (20 U.S.C. 1087h et seq.) is amended by 
     adding at the end the following:

     ``SEC. 459. CANCELLATION OF LOANS FOR CERTAIN PUBLIC SERVICE.

       ``(a) Cancellation of Percentage of Debt Based on Years of 
     Qualifying Service.--
       ``(1) In general.--The percent specified in paragraph (3) 
     of the total amount of any loan made under this part after 
     the date of enactment of the Quality Teacher in Every 
     Classroom Act, to students who have not previously borrowed 
     under this part, shall be canceled for each complete year of 
     service after such date by the borrower under circumstances 
     described in paragraph (2) for service as a full time teacher 
     who has demonstrated, in accordance with State teacher 
     certification or licensure law, the subject matter knowledge, 
     teaching knowledge, and teaching skill necessary to teach 
     effectively in the content area or areas for which the 
     borrower provides instruction.
       ``(2) Qualifying service.--
       ``(A) In general.--A loan shall be discharged under 
     paragraph (1) for service by the borrower as a full-time 
     teacher for 1 or more academic years in a public elementary 
     or secondary school--
       ``(i)(I) in the school district of a local educational 
     agency that is eligible in that academic year for assistance 
     under title I of the Elementary and Secondary Education Act 
     of 1965 (20 U.S.C. 6301 et seq.); and
       ``(II) that, for that academic year, has been determined by 
     the Secretary to be a school in which the enrollment of 
     children counted under section 1124(c) of that Act (20 U.S.C. 
     6333(c)) exceeds 30 percent of the total enrollment of that 
     school; or
       ``(ii) in an academic subject matter area in which the 
     State or local educational agency determines to the 
     satisfaction of the Secretary that there is a shortage of 
     qualified teachers.
       ``(B) Accelerated discharge.--A loan shall be discharged 
     under paragraph (1) at the rate provided in paragraph (3)(B) 
     for service described in clause (i) or (ii) of subparagraph 
     (A) by the borrower as a full-time teacher for 1 or more 
     academic years if such borrower--
       ``(i) has engaged in such service for each of the 5 
     preceding academic years; and
       ``(ii) has pursued and achieved advanced teaching 
     credentials.
       ``(3) Percentage of cancellation.--
       ``(A) In general.--Loans shall be discharged under 
     paragraph (1) for service described in paragraph (2)(A) at 
     the rate of--
       ``(i) 20 percent for the first or second complete academic 
     year of such service, which amount for each year shall not 
     exceed $6,000;
       ``(ii) 25 percent for the third complete year of such 
     service, which amount shall not exceed $7,500; and
       ``(iii) 35 percent for the fourth complete year of such 
     service, which amount shall not exceed $10,500;

     except that the total amount for all such academic years 
     shall not exceed $30,000.
       ``(B) Accelerated discharge.--Loans shall be discharged 
     under paragraph (1) for service described in paragraph (2)(B) 
     at the rate of 50 percent for each complete academic year of 
     such service, except that the total amount discharged shall 
     not exceed $5,000 for any borrower.
       ``(C) Treatment of interest.--If a portion of a loan is 
     discharged under subparagraph (A) or (B) for any year, the 
     entire amount of interest on that loan that accrues for that 
     year shall also be discharged by the Secretary.
       ``(D) Refunding prohibited.--Nothing in this section shall 
     be construed to authorize refunding of any repayment of a 
     loan.
       ``(4) Definition.--For the purpose of this section, the 
     term `year' where applied to service as a teacher means an 
     academic year as defined by the Secretary.
       ``(5) Treatment of canceled amounts.--The amount of a loan, 
     and interest on a loan, which is canceled under this section 
     shall not be considered income for purposes of the Internal 
     Revenue Code of 1986.
       ``(6) Prevention of double benefits.--No borrower may, for 
     the same volunteer service, receive a benefit under both this 
     section and subtitle D of title I of the National and 
     Community Service Act of 1990 (42 U.S.C. 12601 et seq.).
       ``(b)  Special Rules.--
       ``(1) List.--
       ``(A) Publication.--The Secretary shall publish annually a 
     list of the schools for which the Secretary makes a 
     determination under paragraph (2)(A)(i)(II).
       ``(B) Special rule.--If the list of schools described in 
     subparagraph (A) is not available before May 1 of any year, 
     the Secretary may use the list for the year preceding the 
     year for which the determination is made to make such service 
     determination.
       ``(2) Continuing eligibility.--Any teacher who performs 
     service in a school which--
       ``(A) meets the requirements of subsection (a)(2)(A) in any 
     year during such service; and
       ``(B) in a subsequent year fails to meet the requirements 
     of such subsection,

     may continue to teach in such school and shall be eligible 
     for loan cancellation pursuant to subsection (a)(1) with 
     respect to such subsequent years.''.
           TITLE V--BEGINNING TEACHER RECRUITMENT AND SUPPORT

     SEC. 501. PROGRAM ESTABLISHED.

       Title V of the Higher Education Act of 1965 (20 U.S.C. 1101 
     et seq.) is amended by adding at the end the following:

          ``PART G--BEGINNING TEACHER RECRUITMENT AND SUPPORT

     ``SEC. 599A. DEFINITIONS.

       ``In this part:
       ``(1) Participant.--The term `participant' means an 
     individual who receives assistance under this part.
       ``(2) Partnership.--The term `partnership' means a 
     partnership consisting of--
       ``(A) a local educational agency, a subunit of such agency, 
     or a consortium of such agencies; and
       ``(B) 1 or more nonprofit organizations, including 
     institutions of higher education--
       ``(i) each of which have a demonstrated record of success 
     in teacher preparation and staff development;
       ``(ii) that have expertise and a demonstrated record of 
     success, either collectively or individually, in providing 
     teachers with the subject matter knowledge, teaching 
     knowledge, and teaching skills necessary for the 
     organizations to teach effectively in each and every content 
     area in which the organizations plan to prepare teachers to 
     provide instruction under a grant made under this part; and
       ``(iii) that include at least 1 teacher preparation 
     institution, or school or department of education within an 
     institution of higher education that meets the requirements 
     of section 500A (as added by section 301 of the Quality 
     Teacher in Every Classroom Act) and is not subject to a 
     waiver under section 500A(b).
       ``(3) Eligible school.--The term `eligible school' means a 
     public elementary school or secondary school--
       ``(A)(i) served by a local educational agency that is 
     eligible for assistance under title I of the Elementary and 
     Secondary Education Act of 1965 (20 U.S.C. 6301 et seq.); and
       ``(ii) that has been determined by the Secretary to be a 
     school in which the enrollment of children counted under 
     section 1124(c) of that Act (20 U.S.C. 6333(c)) exceeds 30 
     percent of the total enrollment of the school; or
       ``(B) that the State educational agency or local 
     educational agency determines, to the satisfaction of the 
     Secretary, has a shortage of qualified teachers.

[[Page S12159]]

     ``SEC. 599B. PROGRAM AUTHORIZED.

       ``(a) Grants by the Secretary.--The Secretary shall use 
     funds made available pursuant to this part to award grants, 
     on a competitive basis, to partnerships for the purpose of 
     recruiting, training, and supporting qualified entry-level 
     elementary school or secondary school teachers to teach in 
     eligible schools.
       ``(b) Duration.--Grants shall be awarded for a period of 3 
     years, of which not more than 1 year may be used for planning 
     and preparation.

     ``SEC. 599C. USES OF FUNDS.

       ``(a) Partnerships.--Each partnership receiving a grant 
     under this part shall use the grant funds to--
       ``(1) recruit and screen individuals for assistance under 
     this part;
       ``(2) establish and conduct intensive summer preplacement 
     professional development seminars for participants;
       ``(3) establish and conduct ongoing and intensive 
     professional development and support programs for 
     participants during the participants' first 3 years of 
     teaching service, that incorporate--
       ``(A) State curriculum standards for kindergarten through 
     12th grade students;
       ``(B) national professional standards for the teaching of 
     specific subjects; and
       ``(C) the use of educational technology to improve 
     learning, especially the use of computers and computer 
     networks; and
       ``(4) annually evaluate the performance of participants to 
     determine whether the participants meet standards for 
     continued participation in the activities assisted under this 
     part.
       ``(b) Criteria.--
       ``(1) In general.--The partnership shall select a 
     participant according to criteria designed to--
       ``(A) attract highly qualified individuals to teaching, 
     including individuals with post-college employment experience 
     who plan to enter teaching from another occupational field; 
     and
       ``(B) meet the needs of eligible schools in addressing 
     shortages of qualified teachers in specific academic subject 
     areas.
       ``(2) Specific criteria.--Such criteria shall include that 
     each participant has demonstrated the ability to attain the 
     subject matter knowledge, teaching knowledge, and teaching 
     skills necessary to teach effectively in the content area or 
     areas in which the participant will provide instruction.
       ``(3) Special consideration.--Each partnership shall make a 
     particular effort to recruit for participation in activities 
     assisted under this part individuals who are members of 
     populations that are underrepresented in the teaching 
     profession, especially in the curricular areas in which such 
     individuals are preparing to teach.
       ``(4) Minimum number of teachers per school.--The 
     partnership shall ensure that the number of beginning 
     participant teachers is equal to not less than 3 percent of 
     the faculty of the eligible schools to which the participant 
     teachers are assigned, except that in no circumstance shall 
     fewer than 2 beginning participant teachers be assigned to 
     each eligible school.

     ``SEC. 599D. PARTNERSHIP APPLICATION.

       ``(a) In General.--In order to receive funds under this 
     part, a partnership shall submit an application to the 
     Secretary at such time, in such manner, and containing such 
     information as the Secretary may reasonably require. Each 
     application shall--
       ``(1) describe how the partnership shall select individuals 
     to receive assistance under this part;
       ``(2) describe how recruitment will meet the needs of 
     eligible schools, especially with regard to the particular 
     academic subject areas in which there is a shortage of 
     qualified teachers;
       ``(3) describe how the partnership will advance the subject 
     matter knowledge, teaching knowledge, and teaching skill of 
     all participants in ongoing professional development and 
     support activities;
       ``(4) describe how school faculty will be involved in the 
     planning and execution of ongoing professional development 
     and support activities, including paired mentorships between 
     participants and experienced classroom teachers;
       ``(5) provide assurances that--
       ``(A) participants are paid at rates comparable to other 
     entry-level teachers in the school district where the 
     participants are assigned to teach; and
       ``(B) master teachers are provided with stipends for their 
     mentoring services;
       ``(6) describe how the partnership will monitor, and report 
     not less than annually regarding, the progress of 
     participants, including--
       ``(A) the retention rate for participant teachers in 
     comparison with other teachers in the same schools in which 
     participant teachers teach; and
       ``(B) the academic achievement of students served by 
     participant teachers, in comparison to those students taught 
     by other entry-level teachers;
       ``(7) describe direct and indirect contributions to the 
     overall cost of the program by the State and local 
     educational agency, and the extent to which the partnership 
     activities will be integrated with other professional 
     development and educational reform efforts (including 
     federally funded efforts such as the programs under titles I 
     and II of the Elementary and Secondary Education Act of 1965 
     (20 U.S.C. 6301 et seq., 6601 et seq.)); and
       ``(8) contain an assurance that the chief State school 
     officer or the officer's designee has reviewed and approved 
     the application.
       ``(b) Special Rule.--The Secretary shall give special 
     consideration to funding applications for assistance under 
     this part to partnerships that include teacher preparation 
     institutions described in section 599A(a)(2)(B)(iii) that--
       ``(1) support or have plans to support professional 
     development schools or laboratory schools; and
       ``(2) are not subject to a waiver under section 500A(b).
       ``(c) Development and Submission.--The members of the 
     partnership shall jointly develop and submit the application 
     for assistance under this part.
                      TITLE VI--GENERAL PROVISIONS

     SEC. 601. GENERAL PROVISION REGARDING NONRECIPIENT NONPUBLIC 
                   SCHOOLS.

       Nothing in this Act or any amendment made by this Act shall 
     be construed to permit, allow, encourage, or authorize any 
     Federal control over any aspect of any private or religious 
     school that does not receive Federal funds or does not 
     participate in Federal programs or services under the 
     Elementary and Secondary Education Act of 1965 (20 U.S.C. 
     6301 et seq.).

     SEC. 602. APPLICABILITY TO HOME SCHOOLS.

       Nothing in this Act or any amendment made by this Act shall 
     be construed to affect home schools.
                                 ______
                                 
      By Mr. WARNER (for himself and Mr. Stevens):
  S. 1486. A bill to authorize acquisition of certain real property for 
the Library of Congress, and for other purposes; to the Committee on 
Rules and Administration.


          real property acquisition authorization legislation

  Mr. WARNER. Mr. President, in my capacity as chairman of the Rules 
Committee, I rise to introduce legislation that will authorize the 
acquisition of property for use by the Library of Congress. This 
legislation will allow the Library of Congress to take advantage of a 
unique opportunity to advance the preservation of the Library's motion 
pictures, recorded sound, television and radio collections, a unique 
record of American life and history in the 20th century.
  The Library of Congress is clearly facing a crisis in fulfilling its 
statutory--and I underline, Mr. President, ``statutory''--obligations 
to preserve, maintain and make available these national collections. 
The Library must vacate its Suitland, MD, storage location by next May 
1998. Facilities in Ohio at Wright Patterson Air Force Base are beyond 
cost-effective repair. This has created an urgent need to find a new 
facility.
  The former Richmond Federal Reserve facility in Culpepper, VA, is 
currently available for purchase on the open market and it already has 
many of the attributes, that is, the physical attributes, the 
construction and the like, needed to consolidate the Library's 
collection in a single, efficient facility for conservation, storage 
and access. That facility in Culpepper, VA, is reasonably accessible 
from the Nation's Capital for scholars and others to work on this 
material.
  The staff of the Rules Committee has reviewed an extensive financial 
analysis the Library provided us, showing alternative arrangements and 
sites for creating an audiovisual and digital master conservation 
center. The analysis concluded that Culpepper, VA, by allowing 
consolidation of various storage and Library sites into a single 
facility, is the most cost-effective option that they have found to 
date. We can increase the cost-effectiveness of this proposal for the 
taxpayer even further by taking advantage now of a generous offer by a 
nationally known foundation to provide up to a $10 million donation for 
the purchase and initial modifications of the Culpepper property.
  However, it appears the gift will only be available if Congress 
passes legislation as incorporated in this bill and in this session to 
authorize acceptance of the building by the Architect of the Capitol.
  I stress, Mr. President, that this $10 million gift to the American 
taxpayers for preservation of this very important collection--and I 
participated somewhat in the discussion of this with the chairman of 
the board of the foundation together with the Librarian of Congress. We 
have reason to believe that if we do not act in this session, this gift 
might not be available at the time the Congress resumes its work next 
year. Congress clearly has responsibility to enable the Library to 
fulfill its statutory mandates to preserve

[[Page S12160]]

these collections, and these urgent storage and access needs must be 
addressed both from an oversight and an appropriations viewpoint. We 
now have an opportunity to meet these needs in a cost-effective manner, 
which takes advantage of a significant private donation.
  In my view, moving forward with the Culpepper option at this time is 
in the best interests of the Library and the American taxpayers. 
Therefore, I hope all Members will support this legislation promptly, 
that it can be cleared on the hotline here within the next 24 hours, 
and that this body, the Senate, will act. I have reason to believe, 
having had consultations with my colleagues in the House with 
comparable responsibility as the Rules Committee, that the House will 
quickly accept this bill.
  Mr. President, I yield the floor.
                                 ______
                                 
      By Mr. MURKOWSKI (for himself and Mr. Stevens):
  S. 1488. A bill to ratify an agreement between the Aleut Corp. and 
the United States of America to exchange land rights received under the 
Alaska Native Claims Settlement Act for certain land interests on Adak 
Island, and for other purposes; to the Committee on Energy and Natural 
Resources.


       the adak island naval base reuse facilitation act of 1997

  Mr. MURKOWSKI. Mr. President, I rise today to introduce legislation 
which will facilitate and promote the successful commercial reuse of 
the Naval Air Facility being closed on Adak Island, AK. This 
legislation will ratify an agreement between the Aleut Corp. in Alaska, 
the Department of the Interior, and the Department of the Navy.
  While not yet complete, the Aleut Corp. has been working together 
with the Department of the Interior and the Department of the Navy on 
the agreement that would be ratified by this legislation. I know from 
my Aleutian constituents that a good number of issues have been 
resolved through extracted negotiations, but that important issues 
remain on the table. it is my hope that the remaining issues can be 
resolved through mutual agreement prior to hearings on this bill early 
next year. In the meantime, it is imperative that the Navy make the 
facilities at Adak available for interim reuse, as has been done with 
transfers at other closed facilities.
  For many decades the Navy has been an important and steadfast 
constituent in Alaska's Aleutian Chain. Their presence was first 
established during World War II with the selection and development of 
the island because of its combination of ability to support a major 
airfield and its natural and protected deep water port. The Navy's 
presence there contributed greatly to the defense of our Pacific coast 
during World War II and throughout the cold war. Through the Navy's 
presence, Adak became the largest development in the Aleutians as well 
as Alaska's sixth largest community.
  The facility was selected for closure during the last base closure 
round, and while the importance of using the island for defense 
purposes has diminished, it has not lost any of its unique geographic 
advantages. Adak is a natural stepping stone to Asia and is at the 
crossroads of air and sea trade between North America, Europe, and 
Asia. The Aleutian Islands, although stark and desolate to some, are 
the ancestral home to the shareholders of the Aleut Corp. This 
legislation will allow Adak's natural constituents, the Aleut people, 
to reinhabit the island and to make use of its modern developments.
  These very same features that made Adak strategically important to 
the Navy for defense purposes make the island strategically important 
for commercial purposes. Adak Island is at the middle of the great 
expanse of the Aleutian Islands, and is among the island chain's 
southernmost islands, near to the great circle route shipping lanes. 
With the ability to use Adak commercially, the Aleut Corp. aims to make 
the island an important intercontinental location with enterprise 
enough to provide year round jobs for the Aleut people. These goals are 
consistent with the promises and the Alaska Native Claims Settlement 
Act, the legislation that created the corporation.
  The legislation supports the broader interests of the country as 
well. In addition to the Navy, Adak has housed the Department of the 
Interior's Aleutian Islands subunit of the Alaska Maritime National 
Wildlife Refuge. This legislation promotes the Department of the 
Interior's interests in managing and protecting the refuge by the 
exchange of base lands for certain property interests the Aleut Corp. 
holds throughout the rest of the Aleutian Islands refuge. In addition 
to the Department of the Interior, the Department of Defense is 
promoting this exchange as the most effective way to meet this 
country's objectives of conversion of closed defense facilities into 
successful commercial reuse.
  Many potential concurrent reuse possibilities of the Adak lands are 
being explored. These include but are certainly not limited to an air 
and sea transhipment, refueling and reprovisions facility, a new 
ecotourism cruise ship destination, a law enforcement or Job Corps 
training facility or a somewhat less glamorous but nonetheless needed 
correctional facility. All these are possibilities available through 
enactment of this legislation.
  Mr. President, it is my intention to hold a hearing on this 
legislation at the earliest opportunity when Congress returns next 
year. I suggest to all the parties to this agreement that I will be 
keeping a close eye on progress toward expedient closure on the final 
issues. If progress is not made, or if negotiated commitments are not 
honored, I am prepared to modify this legislation and direct an 
appropriate structure for this land exchange.
                                 ______
                                 
      By Mr. CRAIG (for himself and Mr. Wyden):
  S. 1489. A bill to provide the public with access to outfitted 
activities on Federal land, and for other purposes; to the Committee on 
Energy and Natural Resources.


                    the outfitter policy act of 1997

  Mr. CRAIG. Mr. President, I am pleased to introduce today the 
Outfitter Policy Act of 1997.
  This legislation puts into law many of the management practices by 
which Federal land management agencies have successfully managed the 
outfitter and guide industry on national forests, national parks and 
other Federal lands over many decades.
  The bill recognizes that many Americans need and seek the skills and 
experience of commercial outfitters and guides in order to enjoy a safe 
and pleasant journey through wild lands and over the rivers and lakes 
that are the spectacular destinations for many visitors to our Federal 
lands.
  My bill assures the public continued opportunities for reasonable and 
safe access to these special areas. It assures high standards will be 
met for the health and welfare of visitors who chose outfitted services 
and quality professional services will be avaiable for their 
recreational and educational experiences on federal land.
  This legislation is called for because the management of outfitted 
and guided services by this administration has created problems that 
threaten to destabilize some of these typically small, independent 
outfitter and guide businesses. In addressing these problems, this 
legislation relies heavily on practices that have historically worked 
well for outfitters, visitors, and other user groups, as well as for 
Federal land managers in the field. When the bill is enacted, it will 
assure that these past fine levels of service are continued and 
enhanced.
  When I introduced similar legislation, S. 2194, at the conclusion of 
the 104th Congress, I did do so for the purpose of creating discussion 
concerning outfitter and guide operations within the context of the 
broader issue of concessioner reform that this Congress has been 
addressing for two decades.
  In the year that has followed, the Senate Committee on Energy and 
Natural Resources has held one oversight hearing on concessions 
operations, but has not yet addressed the issue of concessions that 
specifically offer outfitting and guiding services. S. 2194 provided 
the intended opportunity for discussion, however. It has allowed for 
the examination of the historical practices that have offered 
consistent, reliable outfitter services to the public. This earlier 
version of the bill also facilitated a discussion of the need for 
consistency between Federal agencies in the management of outfitted 
services and allowed the opportunity to examine policies that have 
provided high

[[Page S12161]]

quality recreation services, protection of natural resources, a fair 
return to the government, and reasonable economic stability that the 
public expects. The legislation I am now introducing is a result of 
those discussions.
  I look forward to a hearing on this legislation and to moving with 
its enactment in the coming session of the 105th Congress.
                                 ______
                                 
      By Mr. JEFFORDS.
  S. 1490. A bill to improve the quality of child care provided through 
Federal facilities and programs, and for other purposes; to the 
Committee on Governmental Affairs.


              quality child care for federal employees act

  Mr. JEFFORDS. Mr. President, I rise today to introduce the Quality 
Child Care for Federal Employees Act. This bill was drafted with an eye 
toward several serious incidents which occurred earlier this year in 
federal child care facilities. At that time, it came to my attention 
that child care centers located in Federal facilities are not subject 
to even the most minimal health and safety standards.
  As you know, Federal property is exempt from State and local laws, 
regulations, and oversight. What this means for child care centers on 
that property is that State and local health and safety standards do 
not and cannot apply. This might not be a problem if federally owned or 
leased child care centers met enforceable health and safety standards. 
I think most parents who place their children in Federal child care 
would assume that this would be the case. However, I think Federal 
employees will find it very surprising to learn, as I did, that, at 
many centers, no such health and safety standards apply.
  I find this very troubling, and I think we sell our Federal employees 
a bill of goods when federally-owned leased child care cannot guarantee 
that their children are in safe facilities. The Federal Government 
should set the example when it comes to providing safe child care. It 
should not be turn an apathetic shoulder from meeting such standards 
simply because State and local regulations do not apply to them.
  In 1987, Congress passed the Trible Amendment which permitted 
executive, legislative, and judicial branch agencies to utilize a 
portion of federally-owned or leased space for the provision of child 
care services for Federal employees. The General Services 
Administration [GSA] was given the authority to provide guidance, 
assistance, and oversight to Federal agencies for the development of 
children centers. In the decade since the Trible Amendment was passed, 
hundreds of Federal facilities throughout the Nation have established 
onsite child care centers which are a tremendous help to our employees.
  The General Services Administration has done an excellent job of 
helping agencies develop child care centers and have adopted strong 
standards for those centers located in GSA leased or owned space. 
However, there are over 100 child care centers located in Federal 
facilities that are not subject to the GSA standards or any other laws, 
rules, or regulations to ensure that the facilities are safe places for 
our children. Most parents, placing their children in a Federal child 
care center, assume that some standards are in place--assume that the 
centers must minimally meet State and local child care licensing rules 
and regulations. They assume that the centers are subject to 
independent oversight and monitoring to continually ensure the safety 
of the premises.

  Yet, that is not the case. In a case where a Federal employee had 
strong reason to suspect the sexual abuse of her child by an employee 
of a child care center located in a Federal facility, local child 
protective services and law enforcement personnel were denied access to 
the premises and were prohibited from investigating the incident. 
Another employee's child was repeatedly injured because the child care 
providers under contract with a Federal agency to provide onsite child 
care services failed to ensure that age-appropriate health and safety 
measures were taken--current law says they were not required to do so, 
even after the problems were identified and injuries had occurred.
  As Congress and the administration turn their spotlight on our 
Nation's child care system, we must first get our own house in order. 
We must safeguard and protect the children receiving services in child 
care centers housed in Federal facilities. Our employees should not be 
denied some assurance that the centers in which they place their 
children are accountable for meeting basic health and safety standards.
  The Quality Child Care for Federal Employees Act will require all 
child care services located in Federal facilities to meet, at the very 
least, the same level of health and safety standards required of other 
child care centers in the same geographical area. That sounds like 
common sense, but as we all know too well, common sense is not always 
reflected in the law. This bill will make that clear.
  Further, this legislation demands that Federal child care centers 
begin working to meet these standards now. Not next year, not in 2 
years, but now. Under this bill, after 6 months we will look at the 
Federal child care centers again, and if a center is not meeting 
minimal State and local health and safety regulations at that time, 
that child care facility will be closed until it does. I can think of 
no stronger incentive to get centers to comply.
  Now, just as there have often been difficulties with Federal 
facilities ignoring State and local standards simply because of a 
division of power between the Federal and State governments, so, too, 
do divisions in the Federal Government--what we call the separation of 
powers--help create chaos in enforcement at the Federal level. Who has 
oversight of the facilities in the Federal Government, and who is 
responsible for monitoring and enforcement?
  Mr. President, this legislation respects the separation of powers 
within the Federal Government, but it also makes it very clear where 
the oversight and responsibility for meeting health and safety 
standards lies. For the most part, centers located in agencies within 
the executive branch--within, for example, the Department of Veterans' 
Affairs--will retain responsibility for monitoring and ensuring 
compliance. For centers within the jurisdiction of the legislative 
branch, including the Library of Congress, this responsibility will lie 
with the Architect of the Capitol or his designee. In the judicial 
branch, monitoring and compliance will fall under the jurisdiction of 
the Director of the Administrative Office of the U.S. Courts. The GSA 
will continue to monitor centers it owns and leases in the judicial and 
executive branches. The costs of this monitoring are already included 
in this year's appropriations bills and will not add to the deficit.
  It should also be made clear that State and local standards should be 
a floor for basic health and safety, and not a ceiling. The role of the 
Federal Government--and, I like to think, of the U.S. Congress in 
particular--is to constantly strive to do better and to lead by 
example. Federal facilities should always try to meet the highest 
possible standards. In fact, the GSA has required national accredition 
in GSA-owned and leased facilities, and has stated that its centers are 
either in compliance or are strenuously working to get there. This is 
the kind of tough standard we should strive for in all of our Federal 
child care facilities.
  Federal child care should mean something more than simply location on 
a Federal facility. The Federal Government has an obligation to provide 
safe care for its employees, and it has a responsibility for making 
sure that those standards are monitored and enforced. Some Federal 
employees receive this guarantee. Many do not. We can do better.
  I urge swift passage of this legislation, and thank my colleagues for 
their attention to this matter.
  Mr. President, I ask unanimous consent that the text of my 
legislation appear in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1490

       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 ``Quality Child Care for 
     Federal Employees Act''.

     SEC. 2. DEFINITIONS.

       In this Act:

[[Page S12162]]

       (1) Accredited child care center.--The term ``accredited 
     child care center'' means--
       (A) a center that is accredited, by a child care 
     credentialing or accreditation entity recognized by a State, 
     to provide child care to children in the State (except 
     children who a tribal organization elects to serve through a 
     center described in subparagraph (B));
       (B) a center that is accredited, by a child care 
     credentialing or accreditation entity recognized by a tribal 
     organization, to provide child care for children served by 
     the tribal organization;
       (C) a center that is used as a Head Start center under the 
     Head Start Act (42 U.S.C. 9831 et seq.) and is in compliance 
     with any applicable performance standards established by 
     regulation under such Act for Head Start programs; or
       (D) a military child development center (as defined in 
     section 1798(1) of title 10, United States Code).
       (2) Child care credentialing or accreditation entity.--The 
     term ``child care credentialing or accreditation entity'' 
     means a nonprofit private organization or public agency 
     that--
       (A) is recognized by a State agency or tribal organization; 
     and
       (B) accredits a center or credentials an individual to 
     provide child care on the basis of--
       (i) an accreditation or credentialing instrument based on 
     peer-validated research;
       (ii) compliance with applicable State and local licensing 
     requirements, or standards described in section 
     658E(c)(2)(E)(ii) of the Child Care and Development Block 
     Grant Act (42 U.S.C. 9858c(c)(2)(E)(ii)), as appropriate, for 
     the center or individual;
       (iii) outside monitoring of the center or individual; and
       (iv) criteria that provide assurances of--

       (I) compliance with age-appropriate health and safety 
     standards at the center or by the individual;
       (II) use of age-appropriate developmental and educational 
     activities, as an integral part of the child care program 
     carried out at the center or by the individual; and
       (III) use of ongoing staff development or training 
     activities for the staff of the center or the individual, 
     including related skills-based testing.

       (3) Credentialed child care professional.--The term 
     ``credentialed child care professional'' means--
       (A) an individual who is credentialed, by a child care 
     credentialing or accreditation entity recognized by a State, 
     to provide child care to children in the State (except 
     children who a tribal organization elects to serve through an 
     individual described in subparagraph (B)); or
       (B) an individual who is credentialed, by a child care 
     credentialing or accreditation entity recognized by a tribal 
     organization, to provide child care for children served by 
     the tribal organization.
       (4) State.--The term ``State'' has the meaning given the 
     term in section 658P of the Child Care and Development Block 
     Grant Act (42 U.S.C. 9858n).

     SEC. 3. PROVIDING QUALITY CHILD CARE IN FEDERAL FACILITIES.

       (a) Definition.--In this section:
       (1) Administrator.--The term ``Administrator'' means the 
     Administrator of General Services.
       (2) Entity sponsoring a child care center.--The term 
     ``entity sponsoring a child care center'' means a Federal 
     agency that operates, or an entity that enters into a 
     contract or licensing agreement with a Federal agency to 
     operate, a child care center.
       (3) Executive agency.--The term ``Executive agency'' has 
     the meaning given the term in section 105 of title 5, United 
     States Code, except that the term--
       (A) does not include the Department of Defense; and
       (B) includes the General Services Administration, with 
     respect to the administration of a facility described in 
     paragraph (4)(B).
       (4) Executive facility.--The term ``executive facility''--
       (A) means a facility that is owned or leased by an 
     Executive agency; and
       (B) includes a facility that is owned or leased by the 
     General Services Administration on behalf of a judicial 
     office.
       (5) Federal agency.--The term ``Federal agency'' means an 
     Executive agency, a judicial office, or a legislative office.
       (6) Judicial facility.--The term ``judicial facility'' 
     means a facility that is owned or leased by a judicial office 
     (other than a facility that is also a facility described in 
     paragraph (4)(B)).
       (7) Judicial office.--The term ``judicial office'' means an 
     entity of the judicial branch of the Federal Government.
       (8) Legislative facility.--The term ``legislative 
     facility'' means a facility that is owned or leased by a 
     legislative office.
       (9) Legislative office.--The term ``legislative office'' 
     means an entity of the legislative branch of the Federal 
     Government.
       (b) Executive Branch Standards and Compliance.--
       (1) State and local licensing requirements.--
       (A) In general.--Any entity sponsoring a child care center 
     in an executive facility shall--
       (i) obtain the appropriate State and local licenses for the 
     center; and
       (ii) in a location where the State or locality does not 
     license executive facilities, comply with the appropriate 
     State and local licensing requirements related to the 
     provision of child care.
       (B) Compliance.--Not later than 6 months after the date of 
     enactment of this Act--
       (i) the entity shall comply, or make substantial progress 
     (as determined by the Administrator) toward complying, with 
     subparagraph (A); and
       (ii) any contract or licensing agreement used by an 
     Executive agency for the operation of such a child care 
     center shall include a condition that the child care be 
     provided by an entity that complies with the appropriate 
     State and local licensing requirements related to the 
     provision of child care.
       (2) Health, safety, and facility standards.--The 
     Administrator shall by regulation establish standards 
     relating to health, safety, facilities, facility design, and 
     other aspects of child care that the Administrator determines 
     to be appropriate for child care centers in executive 
     facilities, and require child care centers, and entities 
     sponsoring child care centers, in executive facilities to 
     comply with the standards.
       (3) Accreditation standards.--
       (A) In general.--The Administrator shall issue regulations 
     requiring, to the maximum extent possible, any entity 
     sponsoring an eligible child care center (as defined by the 
     Administrator) in an executive facility to comply with child 
     care center accreditation standards issued by a nationally 
     recognized accreditation organization approved by the 
     Administrator.
       (B) Compliance.--The regulations shall require that, not 
     later than 5 years after the date of enactment of this Act--
       (i) the entity shall comply, or make substantial progress 
     (as determined by the Administrator) toward complying, with 
     the standards; and
       (ii) any contract or licensing agreement used by an 
     Executive agency for the operation of such a child care 
     center shall include a condition that the child care be 
     provided by an entity that complies with the standards.
       (C) Contents.--The standards shall base accreditation on--
       (i) an accreditation instrument described in section 
     2(2)(B);
       (ii) outside monitoring described in section 2(2)(B), by--

       (I) the Administrator; or
       (II) a child care credentialing or accreditation entity, or 
     other entity, with which the Administrator enters into a 
     contract to provide such monitoring; and

       (iii) the criteria described in section 2(2)(B).
       (4) Evaluation and compliance.--
       (A) In general.--The Administrator shall evaluate the 
     compliance, with the requirements of paragraph (1) and the 
     regulations issued pursuant to paragraphs (2) and (3), of 
     child care centers, and entities sponsoring child care 
     centers, in executive facilities. The Administrator may 
     conduct the evaluation of such a child care center or entity 
     directly, or through an agreement with another Federal agency 
     or private entity, other than the Federal agency for which 
     the child care center is providing services. If the 
     Administrator determines, on the basis of such an evaluation, 
     that the child care center or entity is not in compliance 
     with the requirements, the Administrator shall notify the 
     Executive agency.
       (B) Effect of noncompliance.--On receipt of the 
     notification of noncompliance issued by the Administrator, 
     the head of the Executive agency shall--
       (i) if the entity operating the child care center is the 
     agency--

       (I) within 2 business days after the date of receipt of the 
     notification correct any deficiencies that are determined by 
     the Administrator to be life threatening or to present a risk 
     of serious bodily harm;
       (II) develop and provide to the Administrator a plan to 
     correct any other deficiencies in the operation of the center 
     and bring the center and entity into compliance with the 
     requirements not later than 4 months after the date of 
     receipt of the notification;
       (III) provide the parents of the children receiving child 
     care services at the center with a notification detailing the 
     deficiencies described in subclauses (I) and (II) and actions 
     that will be taken to correct the deficiencies;
       (IV) bring the center and entity into compliance with the 
     requirements and certify to the Administrator that the center 
     and entity are in compliance, based on an on-site evaluation 
     of the center conducted by an independent entity with 
     expertise in child care health and safety; and
       (V) in the event that deficiencies determined by the 
     Administrator to be life threatening or to present a risk of 
     serious bodily harm cannot be corrected within 2 business 
     days after the date of receipt of the notification, close the 
     center until such deficiencies are corrected and notify the 
     Administrator of such closure; and

       (ii) if the entity operating the child care center is a 
     contractor or licensee of the Executive agency--

       (I) require the contractor or licensee within 2 business 
     days after the date of receipt of the notification, to 
     correct any deficiencies that are determined by the 
     Administrator to be life threatening or to present a risk of 
     serious bodily harm:
       (II) require the contractor or licensee to develop and 
     provide to the head of the agency a plan to correct any other 
     deficiencies in the operation of the center and bring the 
     center and entity into compliance with the

[[Page S12163]]

     requirements not later than 4 months after the date of 
     receipt of the notification;
       (III) require the contractor or licensee to provide the 
     parents of the children receiving child care services at the 
     center with a notification detailing the deficiencies 
     described in subclauses (I) and (II) and actions that will be 
     taken to correct the deficiencies;
       (IV) require the contractor or licensee to bring the center 
     and entity into compliance with the requirements and certify 
     to the head of the agency that the center and entity are in 
     compliance, based on an on-site evaluation of the center 
     conducted by an independent entity with expertise in child 
     care health and safety; and
       (V) in the event that deficiencies determined by the 
     Administrator to be life threatening or to present a risk of 
     serious bodily harm cannot be corrected within 2 business 
     days after the date of receipt of the notification, close the 
     center until such deficiencies are corrected and notify the 
     Administrator of such closure, which closure shall be grounds 
     for the immediate termination or suspension of the contract 
     or license of the contractor or licensee.

       (C) Cost reimbursement.--The Executive agency shall 
     reimburse the Administrator for the costs of carrying out 
     subparagraph (A) for child care centers located in an 
     executive facility other than an executive facility of the 
     General Services Administration. If an entity is sponsoring a 
     child care center for 2 or more Executive agencies, the 
     Administrator shall allocate the costs of providing such 
     reimbursement with respect to the entity among the agencies 
     in a fair and equitable manner, based on the extent to which 
     each agency is eligible to place children in the center.
       (c) Legislative Branch Standards and Compliance.--
       (1) State and local licensing requirements, health, safety, 
     and facility standards, and accreditation standards.--The 
     Architect of the Capitol shall issue regulations, approved by 
     the Senate Committee on Rules and Administration and the 
     House Oversight Committee, for child care centers, and 
     entities sponsoring child care centers, in legislative 
     facilities, which shall be no less stringent in content and 
     effect than the requirements of subsection (b)(1) and the 
     regulations issued by the Administrator under paragraphs (2) 
     and (3) of subsection (b), except to the extent that the 
     Architect, with the consent and approval of the Senate 
     Committee on Rules and Administration and the House Oversight 
     Committee, may determine, for good cause shown and stated 
     together with the regulations, that a modification of such 
     regulations would be more effective for the implementation of 
     the requirements and standards described in paragraphs (1), 
     (2), and (3) of subsection (b) for child care centers, and 
     entities sponsoring child care centers, in legislative 
     facilities.
       (2) Evaluation and compliance.--
       (A) Architect of the capitol.--The Architect of the Capitol 
     shall have the same authorities and duties with respect to 
     the evaluation of, compliance of, and cost reimbursement for 
     child care centers, and entities sponsoring child care 
     centers, in legislative facilities as the Administrator has 
     under subsection (b)(4) with respect to the evaluation of, 
     compliance of, and cost reimbursement for such centers and 
     entities sponsoring such centers, in executive facilities.
       (B) Head of a legislative office.--The head of a 
     legislative office shall have the same authorities and duties 
     with respect to the compliance of and cost reimbursement for 
     child care centers, and entities sponsoring child care 
     centers, in legislative facilities as the head of an 
     Executive agency has under subsection (b)(4) with respect to 
     the compliance of and cost reimbursement for such centers and 
     entities sponsoring such centers, in executive facilities.
       (d) Judicial Branch Standards and Compliance.--
       (1) State and local licensing requirements health, safety, 
     and facility standards, and accreditation standards.--The 
     Director of the Administrative Office of the United States 
     Courts shall issue regulations for child care centers, and 
     entities sponsoring child care centers, in judicial 
     facilities, which shall be no less stringent in content and 
     effect than the requirements of subsection (b)(1) and the 
     regulations issued by the Administrator under paragraphs (2) 
     and (3) of subsection (b), except to the extent that the 
     Director may determine, for good cause shown and stated 
     together with the regulations, that a modification of such 
     regulations would be more effective for the implementation of 
     the requirements and standards described in paragraphs (1), 
     (2), and (3) of subsection (b) for child care centers, and 
     entities sponsoring child care centers, in judicial 
     facilities.
       (2) Evaluation and compliance.--
       (A) Director of the administrative office of the united 
     states courts.--The Director of the Administrative Office of 
     the United States Courts shall have the same authorities and 
     duties with respect to the evaluation of, compliance of, and 
     cost reimbursement for child care centers, and entities 
     sponsoring child care centers, in judicial facilities as the 
     Administrator has under subsection (b)(4) with respect to the 
     evaluation of, compliance of, and cost reimbursement for such 
     centers and entities sponsoring such centers, in executive 
     facilities.
       (B) Head of a judicial office.--The head of a judicial 
     office shall have the same authorities and duties with 
     respect to the compliance of and cost reimbursement for child 
     care centers, and entities sponsoring child care centers, in 
     judicial facilities as the head of an Executive agency has 
     under subsection (b)(4) with respect to the compliance of and 
     cost reimbursement for such centers and entities sponsoring 
     such centers, in executive facilities.
       (e) Application.--Notwithstanding any other provision of 
     this section, if 8 or more child care centers are sponsored 
     in facilities owned or leased by an Executive agency, the 
     Administrator shall delegate to the head of the agency the 
     evaluation and compliance responsibilities assigned to the 
     Administrator under subsection (b)(4)(A).
       (f) Technical Assistance, Studies, and Reviews.--The 
     Administrator may provide technical assistance, and conduct 
     and provide the results of studies and reviews, for Executive 
     agencies, and entities sponsoring child care centers in 
     executive facilities, on a reimbursable basis, in order to 
     assist the entities in complying with this section. The 
     Architect of the Capitol and the Director of the 
     Administrative Office of the United States Courts may provide 
     technical assistance, and conduct and provide the results of 
     studies and reviews, or request that the Administrator 
     provide technical assistance, and conduct and provide the 
     results of studies and reviews, for legislative offices and 
     judicial offices, respectively, and entities operating child 
     care centers in legislative facilities and judicial 
     facilities, respectively, on a reimbursable basis, in order 
     to assist the entities in complying with this section.
       (g) Council.--The Administrator shall establish an 
     interagency council, comprised of all Executive agencies 
     described in subsection (e), a representative of the Office 
     of Architect of the Capitol, and a representative of the 
     Administrative Office of the United States Courts, to 
     facilitate cooperation and sharing of best practices, and to 
     develop and coordinate policy, regarding the provision of 
     child care in the Federal Government.
       (h) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $900,000 for 
     fiscal year 1998 and such sums as may be necessary for each 
     subsequent fiscal year.
                                 ______
                                 
      By Mr. KENNEDY (for himself, Mr. Lautenberg, Mr. Durbin, Mr. 
        Reed, and Mr. Kerry):
  S. 1492. A bill to amend the Public Health Act and the Federal Food, 
Drug and Cosmetic Act to prevent the use of tobacco products by minors, 
to reduce the level of tobacco addiction, to compensate Federal and 
State Governments for a portion of the health costs of tobacco-related 
illnesses, to enhance the national investment in biomedical and basic 
scientific research, and to expand programs to address the needs of 
children, and for other purposes; to the Committee on Labor and Human 
Resources.


                 the healthy and smokefree children act

  Mr. KENNEDY. Mr. President, today, I am joining Senators Lautenberg, 
Durbin, Reed, and Kerry to introduce the Healthy and Smokefree Children 
Act, which is a comprehensive tobacco control initiative. Congress has 
an historic opportunity in the next session to protect current and 
future generations from nicotine addiction and early death caused by 
tobacco.
  We know the enormous adverse health consequences of youth smoking. 
Each day, three thousand children begin smoking. A thousand of them 
will die prematurely from tobacco-induced illnesses. Ninety percent of 
current adult smokers began to smoke before they reached the age of 18.
  Our primary goal is to reduce youth smoking and help children. Our 
legislation will raise the price of cigarettes by $1.50 a pack over 
three years. A substantial portion of the revenues raised by the 
increase will be used to fund major new initiatives in biomedical 
research, child health, and child development.
  The legislation will affirm the authority of the Food and Drug 
Administration to regulate tobacco products. It also provides for 
strongly worded warning labels on packs of cigarettes, for a large-
scale anti-tobacco advertising campaign, new restrictions on youth 
access to tobacco products, new protections against secondhand smoke, 
and transitional assistance to farmers.
  Public health experts tell us that the most effective way to reduce 
youth smoking is by a significant increase in the price of cigarettes. 
Teenagers have less money to spend on tobacco products than adults, and 
those who are not yet addicted will be less likely to spend their 
dollars on smoking. In fact, price increases are three times more 
likely to deter youth from smoking than adults.
  The 65 cent increase in the Attorneys' General settlement is not 
enough to do the job. If the national goal is to dramatically reduce 
teenage smoking,

[[Page S12164]]

a price increase of at least $1.50 a pack will be needed. Even with a 
price increase of that magnitude, cigarettes in America will still cost 
less than the current price in many European countries.
  It would be irresponsible to wait another decade while we test the 
impact of lesser measures on youth smoking. Too many children are 
becoming addicted to tobacco each day. The most effective way to reduce 
youth smoking is a substantial price increase, and we should do it now.
  The $1.50 increase will enable us to provide approximately $20 
billion per year to be divided equally between medical research and 
child development investments. Under our proposal, half of these 
additional funds will be used for an unprecedented expansion of 
biomedial research to solve the scientific mysteries of the most severe 
diseases and medical conditions. We stand on the threshold of 
extraordinary medical breakthroughts against cancer, heart disease, 
Alzheimer's Disease, AIDS, diabetes, mental illness, and many other 
conditions. The benefits of greater research will save millions of 
lives and improve the quality of life for countless more.
  The other half of the new funds will be directed to child health and 
child development. The brain research conducted in recent years has 
demonstrated the critical importance of the first three years of life 
to a child's learning potential. Additional resources will enable us to 
build on that foundation of knowledge, and implement it in ways that 
will enrich the lives of the next generation of children. By expanding 
Head Start to reach the large number of eligible pre-school children 
who are not now being served, and by improving the quality and 
availability of child care for working families, we can give far more 
children a better foundation on which to build their lives.
  In addition, under our proposal, the key public health provisions in 
the Attorneys General agreement will be implemented, and smokers 
seeking to stop will be able to obtain help in overcoming their 
addiction. States will receive compensation from the tobacco industry 
for their Medicaid costs attributable to smoking, and will not have to 
reimburse the federal government for the federal share of the Medicaid 
costs recovered. These funds will be available to the states to address 
the unmet needs of children.
  A strong FDA with broad authority to regulate tobacco is also 
essential. Our legislation affirms FDA's finding that nicotine is an 
addictive drug and that cigarettes are a drug delivery device. The 
scope of regulation will include manufacturing, marketing, advertising, 
and distributing tobacco products. The FDA will be freed from the 
numerous procedural roadblocks which the tobacco industry has placed in 
its path.
  This legislation will substantially reduce smoking in America, 
enhance medical research, and help millions of children reach their 
full potential. Congress has a unique opportunity. We own it to 
America's children and America's future to act now.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1492

       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 
     and Smoke Free Children 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 and purposes.

   TITLE I--AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT RELATING TO 
                                TOBACCO

Sec. 101. Public health and education programs.

   ``TITLE XXVIII--PUBLIC HEALTH AND EDUCATION PROGRAMS AND TOBACCO 
                                CONTROL

``Sec. 2801. Definitions.

           ``Subtitle A--Public Health and Education Programs

``Sec. 2811. Payments to States.
``Sec. 2812. Public health programs.
``Sec. 2813. Biomedical research and child development investments.
``Sec. 2814. Tobacco victims compensation fund.
``Sec. 2815. Tobacco community transition assistance.

               ``Subtitle B--National Health Initiatives

        ``Part 1--National Basic and Child Development Research

``Sec. 2821. National Biomedical, Basic and Child Development Research 
              Board.
``Sec. 2822. Grants for biomedical and basic research.
``Sec. 2823. Investments in healthy child development and research -
              projects and training.

                    ``Part 2--Public Health Programs

``Sec. 2825. Research, counter-advertising, and CDC programs.
``Sec. 2826. National tobacco usage reduction and education block grant 
              program.

            ``Subtitle C--Reduction in Underage Tobacco Use

``Sec. 2831. Purpose.
``Sec. 2832. Child tobacco use surveys.
``Sec. 2833. Reduction in underage tobacco product usage.
``Sec. 2834. Noncompliance.
``Sec. 2835. Use of amounts.
``Sec. 2836. Miscellaneous provisions.

                 ``Subtitle D--Miscellaneous Provisions

``Sec. 2841. Whistleblower protections.
``Sec. 2842. National Tobacco Document Depository.
``Sec. 2843. Tobacco Oversight and Compliance Board.
``Sec. 2844. Preservation of State and local authority.
``Sec. 2845. Regulations.

            TITLE II--FDA JURISDICTION OVER TOBACCO PRODUCTS

   Subtitle A--Amendments to the Federal Food, Drug and Cosmetic Act

Sec. 201. Reference.
Sec. 202. Statement of general authority.
Sec. 203. Treatment of tobacco products as drugs and devices.
Sec. 204. General health and safety regulation of tobacco products.

                     ``CHAPTER IX--TOBACCO PRODUCTS

``Sec. 901. Definitions.
``Sec. 902. Purpose.
``Sec. 903. Promulgation of regulations.
``Sec. 904. Minimum requirements.
``Sec. 905. Scientific Advisory Committee.
``Sec. 906. Requirements relating to nicotine and other constituents.
``Sec. 907. Reduced risk products.
``Sec. 908. Good manufacturing practice standards.
``Sec. 909. Disclosure and reporting of nontobacco ingredients and 
              constituents.
``Sec. 910. Tobacco product warnings, labeling and packaging.
``Sec. 911. Statement of intended use.
``Sec. 912. Miscellaneous provisions.

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

Sec. 301. Standards to reduce involuntary exposure to tobacco smoke.

             TITLE IV--TOBACCO MARKET TRANSITION ASSISTANCE

Sec. 401. Definitions.

  Subtitle A--Tobacco Quota Buyout Contracts and Producer Transition 
                                Payments

Sec. 411. Quota owner buyout contracts.
Sec. 412. Producer transition payments for quota tobacco.
Sec. 413. Producer transition payments for non-quota tobacco.
Sec. 414. Elements of contracts.

                Subtitle B--No Net Cost Tobacco Program

Sec. 421. Budget deficit assessment.

         Subtitle C--Tobacco Community Empowerment Block Grants

Sec. 431. Tobacco community empowerment block grants.

                   TITLE V--MISCELLANEOUS PROVISIONS

Sec. 501. Sense of the senate.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--Congress makes the following findings:
       (1) Tobacco products are the foremost preventable health 
     problem facing America today. More than 400,000 individuals 
     die each year as a result of tobacco induced illnesses and 
     conditions.
       (2) Nicotine that is contained in tobacco products is 
     extremely addictive.
       (3) The tobacco industry has historically targeted tobacco 
     product marketing and promotional efforts towards minors in 
     order to entrap them into a lifetime of smoking.
       (4) Over 90 percent of individuals who smoke began smoking 
     regularly while they were still minors.
       (5) Approximately 3000 minors begin smoking each day. 1000 
     of these minors will die prematurely from a tobacco induced 
     illness or medical condition.
       (6) Tobacco induced illnesses and medical conditions 
     resulting from tobacco use cost the United States over 
     $100,000,000,000 each year.
       (7) Each year the Federal Government incurs costs in excess 
     of $20,000,000,000 for the medical treatment of individuals 
     suffering from tobacco induced illnesses and conditions.
       (b) Purposes.--It is the purpose of this Act to--
       (1) substantially reduce youth smoking;
       (2) assist individuals who are currently addicted to 
     tobacco products in overcoming that addiction;
       (3) educate the public concerning the health dangers 
     inherent in the use of tobacco products;

[[Page S12165]]

       (4) fund medical research; and
       (5) provide for the healthy development of young children 
     and to enhance their learning capacity and improve the 
     quality of their care.
   TITLE I--AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT RELATING TO 
                                TOBACCO

     SEC. 101. PUBLIC HEALTH AND EDUCATION PROGRAMS.

       The Public Health Service Act (42 U.S.C. 201 et seq.) is 
     amended by adding at the end thereof the following new title:
   ``TITLE XXVIII--PUBLIC HEALTH AND EDUCATION PROGRAMS AND TOBACCO 
                                CONTROL

     ``SEC. 2801. DEFINITIONS.

       ``In this title:
       ``(1) Brand.--The term `brand' means a variety of a tobacco 
     product distinguished by the tobacco used, tar content, 
     nicotine content, flavoring used, size, filtration, or 
     packaging.
       ``(2) Cigar.--The term `cigar' means any roll of tobacco 
     wrapped in leaf tobacco or in any substance containing 
     tobacco (other than any roll of tobacco which is a cigarette 
     or cigarillo within the meaning of paragraph (3) or (4)).
       ``(3) Cigarette.--The term `cigarette' means any product 
     which contains nicotine, is intended to be burned under 
     ordinary conditions of use, and consists of--
       ``(A) any roll of tobacco wrapped in paper or in any 
     substance not containing tobacco; and
       ``(B) any roll of tobacco wrapped in any substance 
     containing tobacco which, because of its appearance, the type 
     of tobacco used in the filler, or its packaging and labeling, 
     is likely to be offered to, or purchased by, consumers as a 
     cigarette described in subparagraph (A).
       ``(4) Cigarillos.--The term `cigarillos' means any roll of 
     tobacco wrapped in leaf tobacco or any substance containing 
     tobacco (other than any roll of tobacco which is a cigarette 
     within the meaning of paragraph (3)) and as to which 1,000 
     units weigh not more than 3 pounds.
       ``(5) Cigarette tobacco.--The term `cigarette tobacco' 
     means any product that consists of loose tobacco that 
     contains or delivers nicotine and is intended for use by 
     persons in a cigarette. Unless otherwise stated, the 
     requirements of this title pertaining to cigarettes shall 
     also apply to cigarette tobacco.
       ``(6) Commerce.--The term `commerce' means--
       ``(A) commerce between any State, the District of Columbia, 
     the Commonwealth of Puerto Rico, Guam, the Virgin Islands, 
     American Samoa, the Northern Mariana Islands or any territory 
     or possession of the United States;
       ``(B) commerce between points in any State, the District of 
     Columbia, the Commonwealth of Puerto Rico, Guam, the Virgin 
     Islands, American Samoa, the Northern Mariana Islands or any 
     territory or possession of the United States; or
       ``(C) commerce wholly within the District of Columbia, 
     Guam, the Virgin Islands, American Samoa, the Northern 
     Mariana Islands, or any territory or possession of the United 
     States.
       ``(7) Commissioner.--The term `Commissioner' means the 
     Commissioner of Food and Drugs.
       ``(8) Distributor.--The term `distributor' means any person 
     who furthers the distribution of tobacco products, whether 
     domestic or imported, at any point from the original place of 
     manufacture to the person who sells or distributes the 
     product to individuals for personal consumption. Such term 
     shall not include common carriers.
       ``(9) Little cigar.--The term `little cigar' means any roll 
     of tobacco wrapped in leaf tobacco or any substance 
     containing tobacco (other than any roll of tobacco which is a 
     cigarette within the meaning of subsection (1)) and as to 
     which 1,000 units weigh not more than 3 pounds.
       ``(10) Manufacturer.--The term `manufacturer' means any 
     person, including any repacker or relabeler, who 
     manufactures, fabricates, assembles, processes, or labels a 
     finished tobacco product.
       ``(11) Nicotine.--The term `nicotine' means the chemical 
     substance named 3-(1-Methyl-2-pyrrolidinyl)pyridine or 
     C10H14N2, including any salt 
     or complex of nicotine.
       ``(12) Package.--The term `package' means a pack, box, 
     carton, or container of any kind in which tobacco products 
     are offered for sale, sold, or otherwise distributed to 
     consumers.
       ``(13) Person.--The term `person' means an individual, 
     partnership, corporation, or any other business or legal 
     entity.
       ``(14) Pipe tobacco.--The term `pipe tobacco' means any 
     loose tobacco that, because of its appearance, type, 
     packaging, or labeling, is likely to be offered to, or 
     purchased by, consumers as a tobacco product to be smoked in 
     a pipe.
       ``(15) Point of sale.--The term `point of sale' means any 
     location at which an individual can purchase or otherwise 
     obtain tobacco products for personal consumption.
       ``(16) Retailer.--The term `retailer' means any person who 
     sells tobacco products to individuals for personal 
     consumption, or who operates a facility where vending 
     machines or self-service displays are permitted under this 
     title.
       ``(17) Roll-your-own tobacco.--The term `roll-your-own 
     tobacco'' has the meaning given such term by section 5702(p) 
     of the Internal Revenue Code of 1986.
       ``(18) 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 title.
       ``(19) Secretary.--The term `Secretary' means the Secretary 
     of Health and Human Services.
       ``(20) Smokeless tobacco.--The term `smokeless tobacco' 
     means any product that consists of cut, ground, powdered, or 
     leaf tobacco that contains nicotine and that is intended to 
     be placed in the oral or nasal cavity.
       ``(21) 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.
       ``(22) Tobacco.--The term `tobacco' means tobacco in its 
     unmanufactured form.
       ``(22) Tobacco product.--The term `tobacco product' means 
     cigarettes, cigarillos, cigarette tobacco, little cigars, 
     pipe tobacco, and smokeless tobacco, and roll-your-own 
     tobacco.
           ``Subtitle A--Public Health and Education Programs

     ``SEC. 2811. PAYMENTS TO STATES.

       ``(a) Funds.--
       ``(1) In general.--Subject to subsection (d), there are 
     hereby made available to carry out this section for each 
     fiscal year an amount equal to the amount necessary to 
     reimburse States as provided for in subsection (b).
       ``(2) Fiscal year limitation.--Amounts made available for a 
     fiscal year under paragraph (1) shall be equal to--
       ``(A) 43 percent of the net increase in revenues received 
     in the Treasury for such fiscal year attributable to any 
     amendments made to chapter 52 of the Internal Revenue Code of 
     1986 in the fiscal year in which this title is enacted, as 
     estimated by the Secretary; less
       ``(B) amounts made available for such fiscal year under 
     sections 2812 and 2814.
       ``(b) Reimbursement.--
       ``(1) In general.--The Secretary shall use amounts made 
     available under subsection (a) in each fiscal year to provide 
     funds to each State to reimburse such State for amounts 
     expended by the State for the treatment of individuals with 
     tobacco-related illnesses or conditions, and to permit States 
     to utilize the Federal share of such expended amounts to 
     provide services for children.
       ``(2) Amount.--The amount for which a State is eligible for 
     under paragraph (1) shall be based on the ratio of the 
     expenditures of the State under title XIX of the Social 
     Security Act (42 U.S.C. 1396 et seq.) for fiscal year 1996 to 
     the expenditures by all States under such title for such 
     fiscal year.
       ``(3) Adjustment.--With respect to a fiscal year in which 
     the amount determined under subsection (a)(1) exceeds the 
     limitation under subsection (a)(2), the Secretary shall make 
     pro rata reductions in the amounts provided to States under 
     this subsection.
       ``(c) Use of Funds.--
       ``(1) Determination.--With respect to each State, the 
     Secretary shall determine the proportion of the reimbursement 
     under subsection (b) for each fiscal year that is equal to 
     the amount that has been paid to the State as the Federal 
     medical assistance percentage (as defined in section 1905(b)) 
     of the Social Security Act (42 U.S.C. 1396d(b)) expenditures 
     by the State for the preceding fiscal year.
       ``(2) Required use.--With respect to the amount determined 
     under paragraph (1) for a State for a fiscal year, the 
     Secretary shall not treat such amount as an overpayment under 
     any joint Federal-State health program if the State certifies 
     to the Secretary that such amount will be used by the State 
     to serve the needs of children in the State under 1 or more 
     of the following programs:
       ``(A) An Even Start program under section of the Head Start 
     Act (42 U.S.C. 9801 et seq.).
       ``(B) The Head Start program under the Head Start Act (42 
     U.S.C. 9801 et seq.).
       ``(C) A child care program under the Child Care and 
     Development Block Grant Act of 1990 (42 U.S.C. 658A et seq.).
       ``(D) The Individuals with Disabilities Education Act.
       ``(E) The child care food program and start-up and 
     expansion funds for school break programs and summer food 
     programs under section 17 of the National School Lunch Act 
     (42 U.S.C. 1766).
       ``(F) The special supplemental food program under section 
     17 of the Child Nutrition Act of 1966 (42 U.S.C. 1786).
       ``(G) The Maternal and Child Health Services Block Grant 
     program under title V of the Social Security Act (42 U.S.C. 
     701 et seq.).
       ``(H) The State Children's Health Insurance Program of the 
     State under title XXI of the Social Security Act (42 U.S.C. 
     1397aa et seq.).
       ``(I) The family preservation and support services program 
     under section 430B of the Social Security Act.
       ``(J) State initiated programs that are designed to serve 
     the health and developmental needs of children and are 
     approved by the Secretary.

[[Page S12166]]

       ``(3) Coordination.--A State may use not to exceed 20 
     percent of the amount determined under paragraph (1) for the 
     State for a fiscal year to--
       ``(A) improve linkages and coordination among programs 
     serving children and families, including the provision of 
     funds to outpost outreach workers into Federally funded early 
     childhood programs to ensure effective enrollment in child 
     health initiatives referred to in paragraph (2)(H);
       ``(B) fund local collaboratives which shall be required to 
     use such funds on needs assessments, planning, and 
     investments to maximize efforts to improve child development; 
     and
       ``(C) fund innovative demonstrations that address the 
     outstanding needs of children and families as assessed by 
     State and local entities.
       ``(4) State plan.--To be eligible to receive funds under 
     this subsection a State shall prepare and submit to the 
     Secretary a State plan, at such time, in such manner, and 
     containing such information as the Secretary may require, 
     including a description of the manner in which the State will 
     use amounts provided under this subsection. Such plan shall 
     demonstrate, based on standards established by the Secretary, 
     that the State will comply with paragraph (6).
       ``(5) Application of requirements.--The requirements of the 
     respective provisions of law described in paragraph (2) shall 
     apply to any funds made available under this subsection 
     through State programs under any such provision of law to the 
     same extent that such requirements would otherwise apply to 
     such programs under such provisions of law.
       ``(6) Supplement not supplant.--Amounts provided to a State 
     under this subsection 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 paragraph (2) shall not be 
     reduced solely as a result of the availability of funds under 
     this section.
       ``(7) Overpayments.--Any amount of the reimbursement of a 
     State under paragraph (1) to which paragraph (2) applies that 
     is not used in accordance with this subsection shall be 
     treated by the Secretary as an overpayment under section 1903 
     of the Social Security Act (42 U.S.C. 1396b). Any such 
     overpayments may be allotted among other States under this 
     subsection in proportion to the amount that the State 
     originally received under this section.

     ``SEC. 2812. PUBLIC HEALTH PROGRAMS.

       ``(a) Funding.--There are hereby made available to carry 
     out this section--
       ``(1) for fiscal year 1998, $2,100,000,000;
       ``(2) for fiscal year 1999, $2,175,000,000 increased by an 
     amount equal to the increase in the Consumer Price Index for 
     the previous fiscal year for all urban consumers (all items; 
     U.S. city average);
       ``(3) for fiscal year 2000, $2,200,000,000 increased by an 
     amount equal to the increase in the Consumer Price Index for 
     the 2 previous fiscal years for all urban consumers (all 
     items; U.S. city average);
       ``(4) for fiscal year 2001, $2,325,000,000 increased by an 
     amount equal to the increase in the Consumer Price Index for 
     the 3 previous fiscal years for all urban consumers (all 
     items; U.S. city average); and
       ``(5) for fiscal year 2002 and subsequent fiscal years, the 
     amount made available for fiscal year 2001 increased by an 
     amount equal to the increase in the Consumer Price Index for 
     the period encompassing the fiscal years from 1998 to the 
     fiscal year prior to the fiscal year involved for all urban 
     consumers (all items; U.S. city average).
       ``(b) Use of Funds.--Amounts made available for a fiscal 
     year under subsection (a) shall be distributed in the 
     following manner:
       ``(1) Use reduction and addiction prevention research.--
       ``(A) In general.--The amount described in subparagraph (B) 
     shall be used by Secretary to carry out Federal tobacco use 
     reduction and addiction prevention research under section 
     2825(a).
       ``(B) Amount.--The amount described in this subparagraph 
     is--
       ``(i) for fiscal year 1998, $100,000,000; and
       ``(ii) for fiscal year 1999 and each subsequent fiscal 
     year, the amount described in clause (i), increased for each 
     such fiscal year by an amount equal to the increase in the 
     Consumer Price Index for the period encompassing the fiscal 
     years from 1998 to the fiscal year prior to the fiscal year 
     involved for all urban consumers (all items; U.S. city 
     average).
       ``(2) Counter-advertising.--
       ``(A) In general.--The amount described in subparagraph (B) 
     shall be used by Secretary to carry out the Federal tobacco 
     product counter-advertising campaign under section 2825(b).
       ``(B) Amount.--The amount described in this subparagraph 
     is--
       ``(i) for fiscal year 1998, $500,000,000; and
       ``(ii) for fiscal year 1999 and each subsequent fiscal 
     year, the amount described in clause (i), increased for each 
     such fiscal year by an amount equal to the increase in the 
     Consumer Price Index for the period encompassing the fiscal 
     years from 1998 to the fiscal year prior to the fiscal year 
     involved for all urban consumers (all items; U.S. city 
     average).
       ``(3) Centers for disease control and prevention 
     programs.--
       ``(A) In general.--The amount described in subparagraph (B) 
     shall be used by Secretary, acting through the Centers for 
     Disease Control and Prevention, to carry programs to 
     discourage the initiation of tobacco use, reduce the 
     incidence of tobacco use among current users, and for other 
     activities designed to reduce the risk of dependence and 
     injury from tobacco products under section 2825(c).
       ``(B) Amount.--The amount described in this subparagraph 
     is--
       ``(i) for fiscal year 1998, $60,000,000;
       ``(ii) for each of the fiscal years 1998 and 2000, 
     $60,000,000, increased for each such fiscal year by an amount 
     equal to the increase in the Consumer Price Index for the 
     period encompassing the fiscal years from 1998 to the fiscal 
     year prior to the fiscal year involved for all urban 
     consumers (all items; U.S. city average);
       ``(iii) for fiscal year 2001, $100,000,000, increased for 
     such fiscal year by an amount equal to the increase in the 
     Consumer Price Index for fiscal years 1998 through 2000 for 
     all urban consumers (all items; U.S. city average); and
       ``(iv) for fiscal year 2002 and subsequent fiscal years, 
     the amount described in clause (iii), increased for each such 
     fiscal year by an amount equal to the increase in the 
     Consumer Price Index for the period encompassing the fiscal 
     years from 1998 to the fiscal year prior to the fiscal year 
     involved for all urban consumers (all items; U.S. city 
     average).
       ``(4) Food and drug administration.--
       ``(A) In general.--The amount described in subparagraph (B) 
     shall be used by Secretary to assist in defraying the costs 
     associated with the activities of the Food and Drug 
     Administration relating to tobacco.
       ``(B) Amount.--The amount described in this subparagraph 
     is--
       ``(i) for fiscal year 1998, $300,000,000; and
       ``(ii) for fiscal year 1999 and each subsequent fiscal 
     year, the amount described in clause (i), increased for each 
     such fiscal year by an amount equal to the increase in the 
     Consumer Price Index for the period encompassing the fiscal 
     years from 1998 to the fiscal year prior to the fiscal year 
     involved for all urban consumers (all items; U.S. city 
     average).
       ``(5) State block grants.--
       ``(A) In general.--The amount described in subparagraph (B) 
     shall be used by Secretary to make block grants to States 
     under the National Tobacco Usage Reduction and Education 
     Block Grant Program under section 2826.
       ``(B) Amount.--The amount described in this subparagraph 
     is--
       ``(i) for fiscal year 1998, $1,144,000,000;
       ``(ii) for fiscal year 1999, $1,215,000,000, increased for 
     such fiscal year by an amount equal to the increase in the 
     Consumer Price Index for the previous fiscal year for all 
     urban consumers (all items; U.S. city average);
       ``(iii) for fiscal year 2000, $1,240,000,000, increased for 
     such fiscal year by an amount equal to the increase in the 
     Consumer Price Index for fiscal years 1998 through 2000 for 
     all urban consumers (all items; U.S. city average);
       ``(iv) for fiscal year 2001, $1,325,000,000, increased for 
     such fiscal year by an amount equal to the increase in the 
     Consumer Price Index for fiscal years 1998 through 2000 for 
     all urban consumers (all items; U.S. city average);
       ``(v) for each of the fiscal years 2002 through 2008, 
     $1,825,000,000, increased for each such fiscal year by an 
     amount equal to the increase in the Consumer Price Index for 
     the period encompassing the fiscal years from 1998 to the 
     fiscal year prior to the fiscal year involved for all urban 
     consumers (all items; U.S. city average); and
       ``(v) for fiscal year 2009 and subsequent fiscal years, 
     $1,750,000,000, increased for each such fiscal year by an 
     amount equal to the increase in the Consumer Price Index for 
     fiscal years 1998 through the fiscal year previous to the 
     fiscal year for which the determination is being made for all 
     urban consumers (all items; U.S. city average).

     ``SEC. 2813. BIOMEDICAL RESEARCH AND CHILD DEVELOPMENT 
                   INVESTMENTS.

       ``(a) Funding.--There are hereby made available to carry 
     out this section for each fiscal year an amount equal to 57 
     percent of the net increase in revenues received in the 
     Treasury for such fiscal year attributable to any amendments 
     made to chapter 52 of the Internal Revenue Code of 1986 in 
     the fiscal year in which this title is enacted, as estimated 
     by the Secretary.
       ``(b) Use of Funds.--Amounts made available for a fiscal 
     year under subsection (a) shall be used to carry out national 
     biomedical and basic scientific research activities and child 
     development and research activities under part 1 of subtitle 
     C.

     ``SEC. 2814. TOBACCO VICTIMS COMPENSATION FUND.

       ``(a) Funding.--There are hereby made available to carry 
     out this section for each fiscal year an amount equal to 14.2 
     percent of the net increase in revenues received in the 
     Treasury for such fiscal year attributable to any amendments 
     made to chapter 52 of the Internal Revenue Code of 1986 in 
     the fiscal year in which this title is enacted, as estimated 
     by the Secretary.
       ``(b) Use of Funds.--Amounts made available for a fiscal 
     year under subsection (a) shall be used to provide assistance 
     and compensation to individuals suffering from tobacco-
     related illnesses and conditions, under a plan to be 
     developed by the Secretary, not later than 1 year after the 
     date of enactment of this Act, and submitted to Congress for 
     approval.

[[Page S12167]]

     ``SEC. 2815. TOBACCO COMMUNITY TRANSITION ASSISTANCE.

       ``(a) Funding.--There are hereby made available to carry 
     out this section--
       ``(1) for buyouts of quotas under section 411--
       ``(A) $3,100,000,000 for each of the fiscal years 1998 and 
     1999; and
       ``(B) $3,000,000,000 for fiscal 2000; and
       ``(2) for block grants under section 431--
       ``(A) $500,000,000 for each of the fiscal years 1998 and 
     1999;
       ``(B) $800,000,000 for each of the fiscal years 2000 
     through 2002; and
       ``(C) $400,000,000 for fiscal year 2003.
       ``(b) Use of Funds.--Amounts made available for a fiscal 
     year under subsection (a) shall remain available until 
     expended (except that with respect to amounts under 
     subsection (a)(1), such amounts shall only be available until 
     September 30, 2001) and shall be used to provide tobacco 
     transition assistance under title IV of the Healthy and Smoke 
     Free Children Act.
               ``Subtitle B--National Health Initiatives

        ``PART 1--NATIONAL BASIC AND CHILD DEVELOPMENT RESEARCH

     ``SEC. 2821. NATIONAL BIOMEDICAL, BASIC AND CHILD DEVELOPMENT 
                   RESEARCH BOARD.

       ``(a) Establishment.--There is established a Federal board 
     to be known as the `National Biomedical and Basic Scientific 
     Research Board' (referred to in this subpart as the `Board').
       ``(b) Membership.--
       ``(1) Composition.--The board shall be composed of--
       ``(A) 9 voting members to be appointed by the President 
     from among individuals with expertise in biomedical research, 
     basic research, child development, and medicine; and
       ``(B) 3 ex officio (nonvoting) members of which--
       ``(i) 1 shall be the Secretary;
       ``(ii) 1 shall be the Secretary of Education; and
       ``(iii) 1 shall be the Assistant to the President for 
     Science and Technology.
       ``(2) Terms.--A member of the Board under paragraph (1)(A) 
     shall be appointed for a term of 6 years, except that of the 
     members first appointed--
       ``(A) 3 members shall be appointed for terms of 6 years;
       ``(B) 3 members shall be appointed for terms of 4 years; 
     and
       ``(C) 3 members shall be appointed for terms of 2 years.
       ``(3) Vacancies.--
       ``(A) In general.--A vacancy on the Board shall be filled 
     in the same manner in which the original appointment was made 
     and shall be subject to any conditions which applied with 
     respect to the original appointment.
       ``(B) Filling unexpired term.--An individual appointed to 
     fill a vacancy on the Board shall be appointed for the 
     unexpired term of the member replaced.
       ``(C) Expiration of terms.--The term of any member of the 
     Board shall not expire before the date on which the member's 
     successor takes office.
       ``(c) Chairperson.--The President shall designate a member 
     of the Board appointed under subsection (b)(1)(A) as the 
     Chairperson of the Board.
       ``(d) Meetings and Quorum.--
       ``(1) In general.--The Commission shall meet at the call of 
     the Chairperson.
       ``(2) Initial meeting.--Not later than 30 days after the 
     date on which all members of the Board have been appointed, 
     the Board shall hold its first meeting.
       ``(3) Quorum.--A majority of the members of the Board 
     appointed under subsection (b)(1)(A) shall constitute a 
     quorum, but a lesser number of members may hold hearings.
       ``(e) Personnel Matters.--
       ``(1) Compensation.--Each member of the Board who is not an 
     officer or employee of the Federal Government shall be 
     compensated at a rate equal to the daily equivalent of the 
     annual rate of basic pay prescribed for level IV of the 
     Executive Schedule under section 5315 of title 5, United 
     States Code, for each day (including travel time) during 
     which such member is engaged in the performance of the duties 
     of the Board. All members of the Board who are officers or 
     employees of the United States shall serve without 
     compensation in addition to that received for their services 
     as officers or employees of the United States.
       ``(2) Travel expenses.--The members of the Board shall be 
     allowed travel expenses, including per diem in lieu of 
     subsistence, at rates authorized for employees of agencies 
     under subchapter I of chapter 57 of title 5, United States 
     Code, while away from their homes or regular places of 
     business in the performance of services for the Board.
       ``(3) Staff.--
       ``(A) In general.--The Chairperson of the Board may, 
     without regard to the civil service laws and regulations, 
     appoint and terminate an executive director and such other 
     additional personnel as may be necessary to enable the Board 
     to perform its duties. The employment of an executive 
     director shall be subject to confirmation by the Board.
       ``(B) Compensation.--The Chairperson of the Board may fix 
     the compensation of the executive director and other 
     personnel without regard to the provisions of chapter 51 and 
     subchapter III of chapter 53 of title 5, United States Code, 
     relating to classification of positions and General Schedule 
     pay rates, except that the rate of pay for the executive 
     director and other personnel may not exceed the rate payable 
     for level V of the Executive Schedule under section 5316 of 
     such title.
       ``(4) Detail of government employees.--Any Federal 
     Government employee may be detailed to the Board without 
     reimbursement, and such detail shall be without interruption 
     or loss of civil service status or privilege.
       ``(5) Procurement of temporary and intermittent services.--
     The Chairperson of the Board may procure temporary and 
     intermittent services under section 3109(b) of title 5, 
     United States Code, at rates for individuals which do not 
     exceed the daily equivalent of the annual rate of basic pay 
     prescribed for level V of the Executive Schedule under 
     section 5316 of such title.
       ``(f) Powers.--The Board shall award grants to, and enter 
     into contracts with eligible entities under section 2822 for 
     the expansion of basic and biomedical research and to provide 
     graduate training with respect to such research.
       ``(g) Delegation.--The Board may delegate all or a portion 
     of grant making authority under subsection (f) to the 
     Secretary, the Secretary of Education, the Director of the 
     National Science Foundation, or the head of any other Federal 
     agency determined appropriate by the Board.
       ``(h) Availability of Funds.--
       ``(1) In general.--With respect to a fiscal year, no funds 
     shall be made available under this part for such fiscal year 
     until the Secretary certifies that the amounts appropriated 
     for each of the entities or activities described in 
     subparagraphs (A) and (B) of section 2822(a)(1) or 
     subparagraphs (A), (B) and (F) of section 2823(a)(1) for such 
     fiscal year has increased as compared to the amounts 
     appropriated for the previous fiscal year--
       ``(A) by not less than the percentage increase in the 
     consumer price index, as determined by the Secretary of 
     Labor; or
       ``(B) by an amount equal to the percentage increase in the 
     level of overall discretionary spending for such fiscal year 
     as compared to the previous fiscal year;

     whichever is greater.
       ``(2) Application to child development activities.--With 
     respect to a fiscal year, no funds shall be made available 
     under this part for such fiscal year until the Secretary 
     certifies that the amounts appropriated for each of the 
     entities or activities described in section 2823(a)(1)(F) for 
     such fiscal has increased as compared to the amounts 
     appropriated for the previous fiscal year--
       ``(A) by not less than the percentage increase in the 
     consumer price index, as determined by the Secretary of 
     Labor; or
       ``(B) by an amount equal to the percentage increase in the 
     level of overall discretionary spending for such fiscal year 
     as compared to the previous fiscal year;

     whichever is less.
       ``(3) Supplement not supplant.--Funds made available for 
     use under this part shall be used to supplement and not 
     supplant other funds appropriated to the entities described 
     in section 2822(a) and 2823(a). Amounts appropriated to such 
     entities under other provisions of law shall not be reduced 
     solely as a result of the availability of funds under this 
     section.

     ``SEC. 2822. GRANTS FOR BIOMEDICAL AND BASIC RESEARCH.

       ``(a) Eligible Entities.--To be eligible to receive a grant 
     or contract under section 2821(f) an entity shall be--
       ``(1) the National Institutes of Health (including a 
     subdivision or grantee of such Institutes);
       ``(2) the National Science Foundation (including a 
     subdivision or grantee of such Foundation);
       ``(3) nationally recognized research hospitals;
       ``(4) universities with recognized programs of basic and 
     biomedical research;
       ``(5) research institutes with expertise in the conduct of 
     basic or biomedical research;
       ``(6) cancer research centers that meet the standards of 
     section 414; and
       ``(7) entities conducting quality basic or biomedical 
     research as determined by the Board.
       ``(b) Graduate Training.--Support may be provided under 
     section 2821(f) for graduate training, including the 
     following:
       ``(1) Grants for portable fellowships as defined for 
     purposes of the National Science Foundation Act of 1950 (42 
     U.S.C. 1861 et seq.).
       ``(2) Grants to support an additional year of portable 
     fellowship training to enhance the teaching capabilities of 
     fellows seeking careers in academic teaching settings.
       ``(3) Programs of student loan forgiveness for students in 
     the sciences and biomedical sciences who pursue careers as 
     teachers of science or biomedical science or researchers in 
     such fields in nonprofit institutions. Loans may be forgiven 
     under this paragraph at the rate of--
       ``(A) 15 percent per year for the first and second fiscal 
     years after the date of enactment of this title;
       ``(B) 20 percent per year for the third and fourth fiscal 
     years after the date of enactment of this title; and
       ``(C) 30 percent per year for the fifth fiscal year after 
     the date of enactment of this title.
       ``(4) Programs of postdoctoral fellowships for individuals 
     qualifying for such fellowships under the authority of the 
     National Science Foundation of National Institutes of Health.

[[Page S12168]]

       ``(5) Programs of grants to universities and other research 
     facilities to assist in the equipping of laboratories for new 
     researchers of exceptional promise during the first 5 years 
     of post-doctoral research.
       ``(6) Such other programs of grants and contracts as the 
     Board determines will contribute to increasing the supply of 
     high quality scientific and biomedical researchers.
       ``(c) Funding.--The Board shall use 50 percent of the 
     amount made available for a fiscal year under section 2813 to 
     carry out this subpart in such fiscal year.

     ``SEC. 2823. INVESTMENTS IN HEALTHY CHILD DEVELOPMENT AND 
                   RESEARCH -PROJECTS AND TRAINING.

       ``(a) Children's Research, Training and Demonstration 
     Projects.--
       ``(1) In general.--The Secretary shall use not to exceed 10 
     percent of the funds allocated for use under this section to 
     award grants of contracts for the conduct and support of 
     research, training and demonstration projects relating to 
     child health and development.
       ``(2) Entities eligible for research projects.--To be 
     eligible to receive a grant or contract under paragraph (1) 
     for the conduct or support of research an entity shall be--
       ``(A) the National Institutes of Health (including a 
     subdivision or grantee of such Institutes);
       ``(B) the National Science Foundation (including a 
     subdivision or grantee of the Foundation);
       ``(C) a nationally recognized research hospital;
       ``(D) a university with a recognized program of research or 
     training on children's development and health and childhood 
     disabilities; and
       ``(E) entities conducting child development research and 
     training; and
       ``(F) a public or private nonprofit organization, agency, 
     or partnership with the capacity to implement research 
     findings on brain development in the early years of life and 
     for the support of continual physical, intellectual, and 
     social development of young children, including infants and 
     toddlers with disabilities.
       ``(3) Training projects.--Support may be provided under 
     subparagraphs (D), (E) and (F) of paragraph (1) for training, 
     including programs to support undergraduate and graduate 
     training programs to expand the early childhood development 
     workforce by recruiting; training students for careers in 
     early childhood development and care, which may include 
     grants to institutions, scholarships, and programs of loan 
     work forgiveness; and preservice and inservice training 
     programs to enhance the quality of the existing child care 
     workforce.
       ``(4) Demonstration projects.--Support may be provided 
     under subparagraphs (D), (E) and (F) of paragraph (1) for 
     demonstration projects including public-private partnerships 
     for paid leave to enable mothers with infants to choose to 
     stay at home.
       ``(5) Evaluations.--Each project under this subsection 
     shall include an evaluation component to assess the 
     effectiveness of the project in achieving its goals.
       ``(b) Child Development Projects.--
       ``(1) In general.--The Secretary shall use not less than 90 
     percent of the funds allocated for use under this section as 
     follows:
       ``(A) Investments for early childhood development.--60 
     percent of such funds will be used for investments in early 
     childhood development as follows:
       ``(i) 10 percent to expand the Early Head Start program 
     under section 645A of the Head Start Act (42 U.S.C. 9841).
       ``(ii) 20 percent to the Child Care and Development Block 
     Grant Act of 1990 (42 U.S.C. 658A et seq.) to provide 
     certificates and grants to increase the availability and 
     affordability of quality child care for children of working 
     families from birth through school age, including children 
     with disabilities.
       ``(iii) 25 percent to expand the Head Start program under 
     the Head Start Act (42 U.S.C. 9801) to increase enrollment 
     and responsiveness of such program.
       ``(iv) 5 percent to early childhood development programs 
     under part C and section 619 of the Individuals with 
     Disabilities Education Act.

     Not less than 30 percent of amounts made available under 
     clause (ii) shall be set-aside for innovative programs for 
     babies and toddlers, including the development of family 
     child care networks, start-up for infant care programs, the 
     training of providers, or the provision of parent education 
     and support.
       ``(B) Improvement of the quality of child care.--20 percent 
     to establish a health and safety fund through the Child Care 
     and Development Block Grant Act of 1990 (42 U.S.C. 658A et 
     seq.), 50 percent of which shall be used to provide 
     incentives to reward States that improve the quality of child 
     care programs in the State by adopting the essential 
     components of the child care program of the armed services or 
     the essential components of other proven child care models. 
     Such components include the provision of training linked to 
     increased wages, improved standards and enforcement, lower 
     child to staff ratios, higher rates for accredited programs, 
     and consumer education including resources referral services.
       ``(C) Programs to promote healthy behavior.--20 percent to 
     the Child Care and Development Block Grant Act of 1990 (42 
     U.S.C. 658A et seq.) to expand the availability and 
     affordability of quality before- and after-school care, and 
     summer and weekend activities for school age (through 15 
     years of age) children, including children with disabilities, 
     to promote good health and academic achievement and to help 
     in avoiding high risk behaviors. Eligible entities for grants 
     under this clause shall include elementary and secondary 
     schools, community-based organizations, child care centers, 
     family child care homes, youth centers, or partnerships and 
     should be targeted to communities with high rates of poverty 
     or at-risk children.
       ``(c) Supplement not Supplant.--Amounts provided 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.
       ``(d) Funding.--The Board shall use 50 percent of the 
     amount made available for a fiscal year under section 2813 to 
     carry out this subpart in such fiscal year.

                    ``PART 2--PUBLIC HEALTH PROGRAMS

     ``SEC. 2825. RESEARCH, COUNTER-ADVERTISING, AND CDC PROGRAMS.

       ``(a) Reduction and Addiction Prevention Research.--The 
     Secretary shall provide for the conduct of research 
     concerning the development of methods, drugs, and devices to 
     discourage individuals from using tobacco products and to 
     assist individuals who use such products in quitting such 
     use.
       ``(b) Counter-advertising.--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.
       ``(c) Centers for Disease Control and Prevention 
     Programs.--The Secretary, acting through the Centers for 
     Disease Control and Prevention, shall carry programs to 
     discourage the initiation of tobacco use, reduce the 
     incidence of tobacco use among current users, and for other 
     activities designed to reduce the risk of dependence and 
     injury from tobacco products.
       ``(d) Funding.--
       ``(1) Research.--The Secretary shall use amounts available 
     under section 2812(b)(1) to carry out subsection (a).
       ``(2) Counter-advertising.--The Secretary shall use amounts 
     available under section 2812(b)(2) to carry out subsection 
     (b).
       ``(3) CDC programs.--The Secretary shall use amounts 
     available under section 2812(b)(3) to carry out subsection 
     (c).

     ``SEC. 2826. NATIONAL TOBACCO USAGE REDUCTION AND EDUCATION 
                   BLOCK GRANT PROGRAM.

       ``(a) Block Grants.--The Secretary shall award block grants 
     to States to enable such States to carry out activities for 
     the purpose of planning, carrying out, and evaluating tobacco 
     use reduction and education activities described in 
     subsection (c).
       ``(b) Application.--
       ``(1) In general.--A State that desires to receive a grant 
     under subsection (a) shall prepare and submit to the 
     Secretary an application, at such time, in such manner, and 
     accompanied by such information as the Secretary may require.
       ``(2) Contents.--An application submitted under paragraph 
     (1) shall--
       ``(A) describe the activities that will be carried out 
     using assistance under this section; and
       ``(B) provide such assurances as the Secretary determines 
     to be necessary to carry out this section.
       ``(c) Use of Funds.--A State shall use amounts received 
     under this section to carry out the following activities:
       ``(1) Tobacco use cessation.--
       ``(A) In general.--Activities to assist individuals in 
     quitting the use of cigarettes or other tobacco products.
       ``(B) Model state program.--The Secretary shall establish a 
     model smoking cessation program that may be used by States in 
     the design of State-based smoking cessation programs. Such 
     model program shall provide for the provision of grants and 
     other assistance by such States to eligible entities and 
     individuals in the State for the establishment or 
     administration of tobacco product use cessation programs that 
     are approved in accordance with subparagraph (D).
       ``(C) Use of assistance.--Under a State smoking cessation 
     program under this paragraph an entity that receives 
     assistance shall use such amounts to establish or administer 
     tobacco product use cessation programs that are approved in 
     accordance with subparagraph (D).
       ``(D) Approval of cessation program or devices.--Using the 
     best available scientific information, the Secretary shall 
     promulgate regulations to provide for the approval of tobacco 
     product use cessation programs and devices. Such regulations 
     shall be designed to ensure that tobacco product users, if 
     requested, are provided with reasonable access to safe and 
     effective cessation programs and devices. Such regulations 
     shall ensure that such individuals have access to a broad 
     range of cessation options that are tailored to the needs of 
     the individual tobacco user.
       ``(2) Tobacco usage reduction and education program.--
     Activities--
       ``(A) 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

[[Page S12169]]

     individuals who are under 18 years of age and to encourage 
     those who use such products to quit;
       ``(B) to carry out informational campaigns that are 
     designed to discourage and de-glamorize the use of tobacco 
     products;
       ``(C) for tobacco use reduction in elementary and secondary 
     schools; or
       ``(D) for community-based tobacco control efforts that are 
     designed to encourage community involvement in reducing 
     tobacco product use.
       ``(3) Event transitional sponsorship program.--
       ``(A) In general.--Activities for the transitional 
     sponsorship of certain activities, including grants to--
       ``(i)(I) pay the costs associated with the transitional 
     sponsorship of an event or activity;
       ``(II) provide for the transitional sponsorship of an 
     individual or team;
       ``(III) pay the required entry fees associated with the 
     participation of an individual or team in an event or 
     activity;
       ``(IV) 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 
     subparagraph (C)(iii); or
       ``(IV) for any other purposes determined appropriate by the 
     State; and
       ``(ii) promote images or activities to discourage 
     individuals from using tobacco products or encourage 
     individuals who use such products to quit.
       ``(B) Eligibility.--A State program funded under this 
     paragraph shall ensure that to be eligible to receive 
     assistance under this paragraph an entity or individual shall 
     prepare and submit to the State an application at such time, 
     in such manner, and containing such information as the State 
     may require, including--
       ``(i) a description of the event, activity, team, or entry 
     for which the grant is to be provided;
       ``(ii) 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
       ``(iii) 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 clause 
     (ii).
       ``(C) Permissible sponsorship activities.--Events, 
     activities, teams, or entries for which a grant may be 
     provided under this paragraph include--
       ``(i) an athletic, musical, artistic, 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 title;
       ``(ii) 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 title, in an athletic 
     event or activity; and
       ``(iii) 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 title, for 
     participation of the individual in an athletic, musical, 
     artistic, or other social or cultural event.
       ``(d) Allocation of Funds.--A State shall ensure that 
     amounts received under a block grant under subsection (a) are 
     used to carry out each of the activities described in 
     subsection (c).
       ``(e) Funding.--The Secretary shall use amounts available 
     under section 2812(b)(4) to carry out this section.
            ``Subtitle C--Reduction in Underage Tobacco Use

     ``SEC. 2831. PURPOSE.

       ``It is the purpose of this subtitle to encourage the 
     achievement of reductions in the number 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. 2832. 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) Exclusion of Certain Ages.--The Secretary may 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.--The baseline level of the child 
     tobacco product use of a manufacturer (referred to in this 
     subtitle as the `baseline level') is the number of children 
     determined to have used the tobacco products of such 
     manufacturer in the first annual performance survey for 1998.
       ``(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) Definition.--As used in this subtitle, the term 
     `tobacco product' means cigarettes, smokeless tobacco 
     products, and roll-you-own tobacco products.

     ``SEC. 2833. REDUCTION IN UNDERAGE TOBACCO PRODUCT USAGE.

       ``(a) Standards for Existing Manufacturers.--Each 
     manufacturer which manufactured a tobacco product on or 
     before the date of the enactment of this title 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 fourth 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;
       ``(2) the fifth annual performance survey is equal to or 
     less than--
       ``(A) 50 percent of the manufacturer's baseline level; or
       ``(B) the de minimis level;

     whichever is greater;
       ``(3) the sixth 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 seventh annual performance survey is equal to or 
     less than--
       ``(A) 35 percent of the manufacturer's baseline level; or
       ``(B) the de minimis level;

     whichever is greater;
       ``(5) the eighth annual performance survey is equal to or 
     less than--
       ``(A) 30 percent of the manufacturer's baseline level; or
       ``(B) the de minimis level;

     whichever is greater;
       ``(6) the ninth annual performance survey is equal to or 
     less than--
       ``(A) 25 percent of the manufacturer's baseline level; or
       ``(B) the de minimis level;

     whichever is greater; and
       ``(7) the 10th annual performance survey and each annual 
     performance survey conducted thereafter is equal to or less 
     than--
       ``(A) 20 percent of the manufacturer's baseline level; or
       ``(B) the de minimis level;

     whichever is greater.
       ``(b) 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 title 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. 2834. NONCOMPLIANCE.

       ``(a) Violation of Standard.--If, with respect to a year, a 
     manufacturer of a tobacco product fails to comply with the 
     required reduction under section 2833(a), the manufacturer 
     shall pay to the Secretary a noncompliance fee for each unit 
     of tobacco products manufactured by the manufacturer which is 
     distributed for consumer use in the year following the year 
     in which the noncompliance occurs, in the amount specified in 
     subsection (b).
       ``(b) Noncompliance Fee Per Unit.--
       ``(1) In general.--With respect to a year, a manufacturer 
     of a tobacco product shall be required to pay a noncompliance 
     fee for each unit of tobacco products manufactured by the 
     manufacturer if the noncompliance factor of the manufacturer 
     (as determined under paragraph (3)) for the year is greater 
     than zero.
       ``(2) Amount of fee.--The amount of the noncompliance fee 
     that is required to be paid by a manufacturer under this 
     section for each unit of tobacco products manufactured by the 
     manufacturer for the year involved shall be equal to--
       ``(A) 2 cents multiplied by so much of the noncompliance 
     factor as does not exceed 5;
       ``(B) 3 cents multiplied by so much of the noncompliance 
     factor as exceeds 5 but does not exceed 10;
       ``(C) 4 cents multiplied by so much of the noncompliance 
     factor as exceeds 10 but does not exceed 15;
       ``(D) 5 cents multiplied by so much of the noncompliance 
     factor as exceeds 15 but does not exceed 20; and
       ``(E) 6 cents multiplied by so much of the noncompliance 
     factor as exceeds 20 but does not exceed 25.
       ``(3) Noncompliance factor.--The noncompliance factor of a 
     manufacturer shall be equal to 100 multiplied by the 
     noncompliance percentage of the manufacturer (as determined 
     under paragraph (4)).
       ``(4) Noncompliance percentage.--The noncompliance 
     percentage (if any) of a manufacturer shall be equal to 1 
     less the ratio of--
       ``(A) the actual reduction that is achieved by the 
     manufacturer in the number of children who use the 
     manufacturer's tobacco products in the year involved; and
       ``(B) the reduction required under section 2833(a) in the 
     number of children who use the manufacturer's tobacco 
     products for the year.

[[Page S12170]]

       ``(c) Noncompliance Fees For Consecutive Violations.--If a 
     manufacturer of a tobacco product fails to comply with the 
     required reduction under section 2833(a) in 2 or more 
     consecutive years, the noncompliance fee that is required to 
     be paid by the manufacturer under this section for each unit 
     of tobacco products manufactured by such manufacturer 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 
     the number of consecutive years in which the manufacturer has 
     failed to comply with such required reductions.
       ``(d) Prohibition on Single-Pack Sales in Cases of Repeated 
     Noncompliance.--Not later than 1 year after the date of 
     enactment of this title, 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 
     2833(a). Such regulations shall require that, if a 
     manufacturer fails to comply with such reductions in 3 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).
       ``(e) Required Generic Packaging in Severe Cases of 
     Repeated Noncompliance.--Not later than 1 year after the date 
     of enactment of this title, 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 2833(a). 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 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.
       ``(f) Payment.--The noncompliance fee 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.

     ``SEC. 2835. USE OF AMOUNTS.

       ``Of the amounts received under section 2834--
       ``(1) 37.5 percent of such amounts shall be made available 
     to the National Biomedical and Basic Scientific Research 
     Board for research, training and demonstration project grants 
     under section 2822;
       ``(2) 37.5 percent of such amounts shall be made available 
     to the Secretary for healthy child development grants under 
     section 2823; and
       ``(3) 25 percent of such amounts shall be made available to 
     the Secretary for reduction and addiction prevention research 
     grants and for grants under the national tobacco usage 
     reduction and education program under part 2 of subtitle C.

     ``SEC. 2836. MISCELLANEOUS PROVISIONS.

       ``(a) Judicial Review.--A manufacturer of tobacco products 
     may seek judicial review of any action under this subtitle 
     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.
       ``(b) Pass-through.--Nothing in this subtitle shall be 
     construed as prohibiting a manufacturer from passing the 
     costs of the amount of any noncompliance fee assessed under 
     this subtitle on to consumers of tobacco products as a 
     further economic deterrent to the use of such products.
       ``(c) 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 noncompliance 
     fees to be applied under this section.
       ``(d) Child.--As used in this subtitle, the term `child' 
     means, except as provide in section 2832(b), an individual 
     who is under the age of 18.
                 ``Subtitle D--Miscellaneous Provisions

     ``SEC. 2841. 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, or 
     any State or local regulatory or enforcement authority, 
     information relating to a substantial violation of law 
     related to this title or a State or local law enacted to 
     further the purposes of this title.
       ``(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.

     ``SEC. 2842. NATIONAL TOBACCO DOCUMENT DEPOSITORY.

       ``(a) Purpose.--It is the purpose of this section to 
     provide for the disclosure of previously nonpublic or 
     confidential documents by manufacturers of tobacco products, 
     including the results of internal health research, and to 
     provide for a procedure to settle claims of attorney-client 
     privilege, work product, or trade secrets with respect to 
     such documents.
       ``(b) Establishment.--
       ``(1) In general.--The Secretary shall provide for the 
     establishment, either within the Department of Health and 
     Human Services or through a private nonprofit entity, of a 
     National Tobacco Document Depository (in this section 
     referred to as the `Depository'). Such Depository shall be 
     located in the Washington, D.C. area and be open to the 
     public.
       ``(2) Documents.--Manufacturers of tobacco products, acting 
     in conjunction with the Tobacco Institute and the Council for 
     Tobacco Research, U.S.A., shall, not later than 30 days after 
     the date of enactment of this title, provide documents to the 
     Depository in accordance with this section.
       ``(3) Funding.--The entities described in paragraph (2) 
     shall bear the sole responsibility for funding the 
     Depository.
       ``(c) Use of Depository.--The Depository shall be 
     maintained in a manner that permits the Depository to be used 
     as a resource for litigants, public health groups, and any 
     other individuals who have an interest in the corporate 
     records and research of the manufacturers concerning smoking 
     and health, addiction or nicotine dependency, safer or less 
     hazardous cigarettes, and underage tobacco use and marketing.
       ``(d) Contents.--The Depository shall include (and 
     manufacturers and the Tobacco Institute and the Council for 
     Tobacco Research, U.S.A. shall provide)--
       ``(1) within 90 days of the date of the establishment of 
     the Depository, all documents provided by such entities to 
     plaintiffs in--
       ``(A) civil or criminal actions brought by State attorneys 
     general (including all documents selected by plaintiffs from 
     the Guilford Repository of the United Kingdom);
       ``(B) Philip Morris Companies Inc.'s defamation action 
     against Capital Cities/American Broadcasting Company News;
       ``(C) the Federal Trade Commission's investigation 
     concerning Joe Camel and underage marketing;
       (D) Haines v. Liggett Group, Inc. (814 F. Supp. 414 
     (D.N.J., Jan. 26, 1993)) and Cippollone v. Liggett Group, 
     Inc. (822 F. 2d 335, 56 USLW 2028, 7 Fed. R. Serv. 3d 1438 
     (3rd Cir. (N.J.), Jun. 8, 1987)); and
       (E) Estate of Burl Butler v. Philip Morris, Inc. (case No. 
     94-4-53);
       ``(2) within 90 days after the date of the establishment of 
     the Depository, any exiting documents discussing or referring 
     to health research, addiction or dependency, safer or less 
     hazardous cigarettes, studies of the smoking habits of 
     minors, and the relationship between advertising or promotion 
     and youth smoking, that the entities described in subsection 
     (b) have not completed producing as required in the actions 
     described in paragraph (1);
       ``(3) within 30 days of the date of the establishment of 
     the Depository, all documents relating to indices (as defined 
     by the court in State of Minnesota and Blue Cross and Blue 
     Shield of Minnesota v. Philip Morris, Inc., et al) of 
     documents relating to smoking and health, including all 
     indices identified by the manufacturers in the the State of 
     Texas v. American Tobacco Company, et al.;
       ``(4) upon the settlement of any action referred to in this 
     subsection, and after a good-faith, de novo, document-by-
     document review of all documents previously withheld from 
     production in any actions on the grounds of attorney-client 
     privilege, all documents determined to be outside of the 
     scope of the privilege;
       ``(5) all existing or future documents relating to original 
     laboratory research concerning the health or safety of 
     tobacco products, including all laboratory research results 
     relating to methods used to make tobacco products less 
     hazardous to consumers;
       ``(6) a comprehensive new attorney-client privilege log of 
     all documents, itemized in sufficient detail so as to enable 
     any interested individual to determine whether the

[[Page S12171]]

     individual will challenge the claim of privilege, that the 
     entities described in subsection (b) (based on the de novo 
     review of such documents by such entities) claim are 
     protected from disclosure under the attorney-client 
     privilege;
       ``(7) all existing or future documents relating to studies 
     of the smoking habits of minors or documents referring to any 
     relationship between advertising and promotion and underage 
     smoking; and
       ``(8) all other documents determined appropriate under 
     regulations promulgated by the Secretary.
       ``(e) Dispute Resolution Panel.--
       ``(1) Establishment.--The Judicial Conference of the United 
     States shall establish a Tobacco Documents Dispute Resolution 
     Panel, to be composed of 3 Federal judges to be appointed by 
     the Conference, to resolve all disputes involving claims of 
     attorney-client, work product, or trade secrets privilege 
     with respect to documents required to be deposited into the 
     Depository under subsection (d) that may be brought by 
     Federal, State, or local governmental officials or the public 
     or asserted in any action by a manufacturer.
       ``(2) Basis for determinations.--The determinations of the 
     Panel established under paragraph (1) shall be based on--
       ``(A) the American Bar Association/American Law Institute 
     Model Rules or the principals of Federal law with respect to 
     attorney-client or work product privilege; and
       ``(B) the Uniform Trade Secrets Act with respect to trade 
     secrecy.
       ``(3) Decision.--Any decision of the Panel established 
     under paragraph (1) shall be final and binding upon all 
     Federal and State courts.
       ``(4) Assessing of fees.--As part of a determination under 
     this subsection, the Panel established under paragraph (1) 
     shall determined whether a claimant of the privilege acted in 
     good faith and had a factual and legal basis for asserting 
     the claim. If the Panel determines that the claimant did not 
     act in good faith, the Panel may assess costs against the 
     claimant, including a reasonable attorneys' fee, and may 
     apply such other sanctions as the Panel determines 
     appropriate.
       ``(5) Accelerated review.--The Panel established under 
     paragraph (1) shall establish procedures for the accelerated 
     review of challenges to a claim of privilege. Such procedures 
     shall include assurances that an individual filing a 
     challenge to such a claim need not make a prima facie showing 
     of any kind as a prerequisite to an in camera review of the 
     documents at issue.
       ``(6) Special masters.--The Panel established under 
     paragraph (1) may appoint Special Masters in accordance with 
     Rule 53 of the Federal Rules of Civil Procedure. The cost 
     relating to any Special Master shall be assessed to the 
     manufacturers as part of a fee process to be established 
     under regulations promulgated by the Secretary.
       ``(f) Other Provisions.--
       ``(1) No waiver of privilege.--Compliance with this section 
     by the entities described in subsection (b) shall not be 
     deemed to be a waiver on behalf of such entities of any 
     applicable privilege or protection.
       ``(2) Avoidance of destruction.--In establishing the 
     Depository, procedures shall be implemented to protect 
     against the destruction of documents.
       ``(3) Deemed produced.--Any documents contained in the 
     Depository shall be deemed to have been produced for purposes 
     of any tobacco-related litigation in the United States.
       ``(g) Documents.--For purposes of this section, the term 
     `documents' shall include any paper documents that may be 
     printed using data that is contained in computer files.
       ``(h) 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 actions 
     involving tobacco products, or the right of access to such 
     documents under any other provision of law.

     ``SEC. 2843. TOBACCO OVERSIGHT AND COMPLIANCE BOARD.

       ``(a) Establishment.--
       ``(1) In general.--There is established an independent 
     board to be known as the Tobacco Oversight and Compliance 
     Board (referred to in this section as the `Board').
       ``(2) Membership.--The Board shall consist of 5 members 
     with expertise relating to tobacco and public health. The 
     members, including the chairperson, shall be appointed by the 
     Secretary. The initial members of the Board shall be 
     appointed by the Secretary within 30 days of the date of the 
     enactment of this title. A member of the Board may be removed 
     by the Secretary only for neglect of duty or malfeasance in 
     office.
       ``(3) Terms.--The term of office of a member of the Board 
     shall be 6 years, except that the members first appointed 
     shall have terms of 2, 3, 4, and 5 years, respectively, as 
     determined by the Secretary.
       ``(b) General Duty.--The Board shall oversee and monitor 
     the operations of the tobacco industry to determine whether 
     tobacco product manufacturers are in compliance with this 
     Act.
       ``(c) Disclosure of Tobacco Industry Documents.--
       ``(1) Submission by manufacturers.--Not later than 3 months 
     after the date of the enactment of this title, and as 
     otherwise required by the Board, each tobacco manufacturer 
     shall submit to the Board a copy of all documents in the 
     manufacturer's possession--
       ``(A) relating to--
       ``(i) any health effects, including addiction, caused by 
     the use of tobacco products;
       ``(ii) the manipulation or control of nicotine in tobacco 
     products; or
       ``(iii) the sale or marketing of tobacco products to 
     children; or
       ``(B) produced, or ordered to be produced, by the tobacco 
     manufacturer in the case entitled State of Minnesota v. 
     Philip Morris, Inc., Civ. Action No. C1-94-8565 (Ramsey 
     County, Minn.) including attorney-client and other documents 
     produced or ordered to be produced for in camera inspection.
       ``(2) Disclosure by the board.--Not later than 6 months 
     after the date of the enactment of this title, and otherwise 
     as required by the Board, the Board shall, subject to 
     paragraph (3), make available to the public the documents 
     submitted under paragraph (1).
       ``(3) Protection of trade secrets.--The Board, members of 
     the Board, and staff of the Board shall not disclose 
     information that is entitled to protection as a trade secret 
     unless the Board determines that disclosure of such 
     information is necessary to protect the public health. This 
     paragraph shall not be construed to prevent the disclosure of 
     relevant information to other Federal agencies or to 
     committees of the Congress.
       ``(d) Investigation and Annual Reports.--The Board shall 
     investigate all matters relating to the tobacco industry and 
     public health and report annually on the results of the 
     investigation to Congress. Each annual report to Congress 
     shall, at a minimum, disclose--
       ``(1) whether tobacco manufacturers are in compliance with 
     the provisions of this Act;
       ``(2) any efforts by tobacco manufacturers to conceal 
     research relating to the adverse health effects or addiction 
     caused by the use of tobacco products;
       ``(3) any efforts by tobacco manufacturers to mislead the 
     public or any Federal, State, or local elected body, agency, 
     or court about the adverse health effects or addiction caused 
     by the use of tobacco products;
       ``(4) any efforts by tobacco manufacturers to sell or 
     market tobacco products to children; and
       ``(5) any efforts by tobacco manufacturers to circumvent, 
     repeal, modify, impede the implementation of, or prevent the 
     adoption of any Federal, State, or local law or regulation 
     intended to reduce the adverse health effects or addiction 
     caused by the use of tobacco products.
       ``(e) Authority.--The Board, any member of the Board, or 
     staff designated by the Board may hold hearings, administer 
     oaths, issue subpoena, 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.
       ``(f) Enforcement.--Notwithstanding any other provision of 
     law, tobacco manufacturers shall provide any testimony, 
     deposition, documents, or other information, answer any 
     interrogatories, and allow any entry or inspection required 
     pursuant to this section, except to the extent that a 
     constitutional privilege protects the tobacco manufacturer 
     from complying with such requirement.
       ``(g) Administration.--
       ``(1) Staff.--The Chairperson of the Board shall exercise 
     the executive and administrative functions of the Board and 
     shall have the authority to hire such staff as may be 
     necessary for the operation of the Board.
       ``(2) Salaries.--The members of the Board shall receive 
     such salary and benefits as the Secretary deems necessary, 
     except that the salary of the Chairperson shall not be less 
     than that provided for under level III of the Executive 
     Schedule in section 5314 of title 5, United States Code.

     ``SEC. 2844. PRESERVATION OF STATE AND LOCAL AUTHORITY.

       ``Except as otherwise provided for in this title or the 
     Healthy and Smoke Free Children Act (or an amendment made by 
     such Act), nothing in this title or such Act shall be 
     construed as prohibiting a State from imposing requirements, 
     prohibitions, penalties or other measures to further the 
     purposes of this title or Act that are in addition to the 
     requirements, prohibitions, or penalties required under this 
     title or Act. To the extent not inconsistent with the 
     purposes of this title or Act, State and local governments 
     may impose additional tobacco product control measures to 
     further restrict or limit the use of such products by minors.

     ``SEC. 2845. REGULATIONS.

       ``The Secretary may promulgate regulations to enforce the 
     provisions of this title, or to modify, alter, or expand the 
     requirements and protections provided for in this title if 
     the Secretary determines that such modifications, 
     alternations, or expansion is necessary.''.
            TITLE II--FDA JURISDICTION OVER TOBACCO PRODUCTS
   Subtitle A--Amendments to the Federal Food, Drug and Cosmetic Act

     SEC. 201. REFERENCE.

       Whenever in this subtitle an amendment or repeal is 
     expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of the Federal 
     Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.).

     SEC. 202. STATEMENT OF GENERAL AUTHORITY.

       The Secretary of Health and Human Services, acting through 
     the Food and Drug Administration, shall have the authority 
     under

[[Page S12172]]

     the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321 et 
     seq.) (above and beyond the existing authority of the 
     Secretary to regulate tobacco products as of the date of 
     enactment of this Act) to regulate the manufacture, labeling, 
     sale, distribution, and advertising of tobacco products.

     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 ``(including 
     nicotine in tobacco products); and (D)''.
       (2) Devices.--Section 201(h) (21 U.S.C. 321(h)) is 
     amended--
       (A) in paragraph (3), by inserting before the comma the 
     following: ``(including tobacco products containing 
     nicotine); and
       (B) by adding at the end the following: ``For purposes of 
     this Act a tobacco product shall be classified as a class II 
     device.''.
       (3) Other definitions.--Section 201 (21 U.S.C. 321) is 
     amended by adding at the end thereof the following new 
     paragraphs:
       ``(ii)(1) The term `tobacco product' means cigarettes, 
     cigarillos, cigarette tobacco, little cigars, pipe tobacco, 
     and smokeless tobacco, and roll-your-own tobacco.
       ``(2) The term `cigarette' means any product which contains 
     nicotine, is intended to be burned under ordinary conditions 
     of use, and consists of--
       ``(A) any roll of tobacco wrapped in paper or in any 
     substance not containing tobacco; and
       ``(B) any roll of tobacco wrapped in any substance 
     containing tobacco which, because of its appearance, the type 
     of tobacco used in the filler, or its packaging and labeling, 
     is likely to be offered to, or purchased by, consumers as a 
     cigarette described in subparagraph (A).
       ``(3) The term `cigarette tobacco' means any product that 
     consists of loose tobacco that contains or delivers nicotine 
     and is intended for use by persons in a cigarette. Unless 
     otherwise stated, the requirements of this title pertaining 
     to cigarettes shall also apply to cigarette tobacco.
       ``(4) The term `smokeless tobacco' means any product that 
     consists of cut, ground, powdered, or leaf tobacco that 
     contains nicotine and that is intended to be placed in the 
     oral or nasal cavity.
       ``(5) The term `roll-your-own tobacco' has the meaning 
     given such term by section 5702(p) of the Internal Revenue 
     Code of 1986.
       ``(6) The term `little cigars' 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 this Act) an as to which 1,000 units weigh not 
     more than 3 pounds.
       ``(7) 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)).
       ``(8) 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.
       ``(9) 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.
       ``(10) The term `nicotine' means the chemical substance 
     named 3-(1-Methyl-2-pyrrolidinyl)pyridine or 
     C10H14N2, including any salt 
     or complex of nicotine.''.
       ``(11) The term `tobacco additive' means any substance the 
     intended use of which results or may reasonably be expected 
     to result, directly or indirectly, in the substance becoming 
     a component of, or otherwise affecting the characteristics 
     of, any tobacco product, including any substance that may 
     have been removed from the tobacco product and then readded 
     in the substance's original or modified form.
       ``(12) The term `tar' means mainstream total articulate 
     matter minus nicotine and water.''.
       (b) Misbranding.--Section 502(q) (21 U.S.C. 352(q)) is 
     amended--
       (1) by striking ``or (2)'' and inserting ``(2)''; and
       (2) by inserting before the period the following: ``or (3) 
     in the case of a tobacco product, it is sold, distributed, 
     advertised, labeled, or used in violation of this Act or the 
     regulations prescribed under this Act.''.
       (c) Regulatory Authority.--Section 503(g)(1) (21 U.S.C. 
     353(g)(1)) is amended by inserting ``(including any tobacco 
     product)'' after ``products'' the first place such term 
     appears.
       (d) Class II Devices.--Section 513(a)(1)(B) (21 U.S.C. 
     360c(a)(1)(B)) is amended--
       (1) by striking ``A device'' and inserting ``(i) A 
     device''; and
       (2) by adding at the end the following: ``Tobacco products 
     shall be categorized as Class II devices.
       ``(ii) The sale of tobacco products to adults that comply 
     with Performance Standards established for these products 
     pursuant to section 514, title XXVIII of the Public Health 
     Service Act, and this Act, and any regulations prescribed 
     under this Act, shall not be prohibited by the Secretary, 
     notwithstanding sections 502(j), 516, and 518.''.
       (e) Performance Standards.--Section 514(a) (21 U.S.C. 
     360d(a)) is amended--
       (1) in paragraph (2), by striking ``device--'' and 
     inserting ``non-tobacco product device--'';
       (2) by redesignating paragraphs (3) and (4) as paragraphs 
     (4) and (5), respectively; and
       (3) by adding at the end the following:
       ``(3)(A) A performance standard established under this 
     section for a tobacco product device--
       ``(i) shall include provisions to reduce the overall health 
     risks to the public, including the reduction in risk to 
     consumers thereof and the reduction in harm which will result 
     from those who continue to use the product, but less often 
     and from those who stop or do not start using the product, 
     taking into account all factors that the Secretary determines 
     to be relevant;
       ``(ii) shall, where necessary to provide a reduction in the 
     overall health risks to the public, include--
       ``(I) provisions regarding the construction, components, 
     constituents, ingredients, and properties of the tobacco 
     product device, including the reduction or elimination of 
     nicotine and the other components, ingredients, and 
     constituents of the tobacco product and its components, based 
     upon the best available technology;
       ``(II) provisions for the testing of the tobacco product 
     device (on a sample basis or, if necessary, on an individual 
     basis) or, if it determined that no other more practicable 
     means are available to the Secretary to assure the conformity 
     of the tobacco product device to the standard, provision for 
     the testing (on a sample basis or, if necessary, on an 
     individual basis) by the Secretary or by another person at 
     the direction of the Secretary;
       ``(III) provisions for the measurement of the performance 
     characteristics of the tobacco product device;
       ``(IV) provisions requiring that the results of each or of 
     certain of the tests of the tobacco product device required 
     to be made under subclause (II) show that the tobacco product 
     device is in conformity with the portions of the standard for 
     which the test or tests were required; and
       ``(V) a provision that the sale, advertising, and 
     distribution of the tobacco product device be restricted but 
     only to the extent the sale, advertising, and distribution of 
     a tobacco product device may be restricted under this Act or 
     title XXVIII of the Public Health Service Act; and
       ``(iii) shall, where appropriate, require the use and 
     prescribe the form and content of labeling for use of the 
     tobacco product device.
       ``(B) The Secretary shall provide for the periodic 
     evaluation of a performance standard established under this 
     paragraph to determine if such standards should be changed to 
     reflect new medical, scientific, or other technological data.
       ``(C) In carrying out this paragraph, the Secretary shall, 
     to the maximum extent practicable--
       ``(i) use personnel, facilities, and other technical 
     support available in other Federal agencies;
       ``(ii) consult with the Scientific Advisory Committee 
     established under section 905 and other Federal agencies 
     concerned with standard-setting and other nationally or 
     internationally recognized standard-setting entities; and
       ``(iii) invite appropriate participation, through joint or 
     other conferences, workshops, or other means, by informed 
     persons representative of scientific, professional, industry, 
     or consumer organizations who in the judgment of the 
     Secretary can make a significant contribution.''.
       (f) Restricted Devices.--Section 520(e) (21 U.S.C. 360j(e)) 
     is amended by adding at the end the following:
       ``(3) A tobacco product is a restricted device.''.
       (g) Regulations.--Section 701(a) (21 U.S.C. 371(a)) is 
     amended by inserting before the period the following: ``, 
     including the authority to regulate the manufacture, sale, 
     distribution, advertising and marketing of tobacco 
     products''.

     SEC. 204. GENERAL HEALTH AND SAFETY REGULATION OF TOBACCO 
                   PRODUCTS.

       The Act (21 U.S.C. 301 et seq.) is amended--
       (1) by redesignating chapter IX as chapter X;
       (2) by redesignating sections 901, 902, 903, 904, and 905 
     as sections 1001, 1002, 1003, 1004, and 1005, respectively; 
     and
       (3) by adding after chapter VIII the following new chapter:

                     ``CHAPTER IX--TOBACCO PRODUCTS

     ``SEC. 901. DEFINITIONS.

       ``For purposes of this chapter and in addition to the 
     definitions contained in section 201, the definitions under 
     section 2801 of the Public Health Service Act shall apply.

     ``SEC. 902. PURPOSE.

       ``It is the purpose of this chapter to impose a regulatory 
     scheme applicable to the development and manufacturing of 
     tobacco products. Such scheme shall include--
       ``(1) with respect to ingredients contained in such 
     products--
       ``(A) the immediate and annual reporting, in accordance 
     with section 909(a), of all ingredients contained in such 
     products;
       ``(B) the performance, in accordance with section 909(b), 
     of safety assessments with respect to ingredients contained 
     in such products; and
       ``(C) the approval, in accordance with section 909(b), of 
     ingredients contained in such products; and
       ``(2) the imposition of standards to reduce the level of 
     certain constituents contained in such products, including 
     nicotine.

[[Page S12173]]

     ``SEC. 903. PROMULGATION OF REGULATIONS.

       ``The Commissioner shall promulgate regulations governing 
     the misbranding, adulteration, and dispensing of tobacco 
     products that are consistent with this chapter and with the 
     manner in which other products that are ingested into the 
     body are regulated under this Act. Such regulations shall be 
     promulgated not later than 12 months after the date of 
     enactment of this chapter.

     ``SEC. 904. MINIMUM REQUIREMENTS.

       ``(a) Misbranding.--The regulations promulgated under 
     section 903 shall at a minimum require that a tobacco product 
     be deemed to be misbranded if the labeling of the package of 
     such product is not in compliance with the provisions of this 
     chapter, of other applicable provisions of this Act, or of 
     section 910 (as applicable to the type of product involved) 
     of the Public Health Service Act.
       ``(b) Adulteration.--The regulations promulgated under 
     section 903 shall at a minimum require that a tobacco product 
     be deemed to be adulterated if the Commissioner determines 
     that any tobacco additive in such product, regardless of the 
     amount of such tobacco additive, either by itself or in 
     conjunction with any other tobacco additive or ingredient is 
     harmful under the intended conditions of use when used in a 
     specified amount.

     ``SEC. 905. SCIENTIFIC ADVISORY COMMITTEE.

       ``(a) Establishment.--Not later than 1 year after the date 
     of enactment of this chapter, the Secretary shall establish 
     an advisory committee, to be known as the `Scientific 
     Advisory Committee', to assist the Secretary in establishing, 
     amending, or revoking a performance standard under section 
     512(a)(3).
       ``(b) Membership.--The Secretary shall appoint as members 
     of the Scientific Advisory Committee any individuals with 
     expertise in the medical, scientific, or other technological 
     data involving the manufacture and use of tobacco products, 
     and of appropriately diversified professional backgrounds. 
     The Secretary may not appoint to the Committee any individual 
     who is in the regular full-time employ of the Federal 
     Government. The Secretary shall designate 1 of the members of 
     each advisory committee to serve as chairperson of the 
     Committee.
       ``(c) Compensation and Expenses.--
       ``(1) Compensation.--Members of the Scientific Advisory 
     Committee who are not officers or employees of the United 
     States, while attending conferences or meetings of the 
     Committee or otherwise serving at the request of the 
     Secretary, shall be entitled to receive compensation at rates 
     to be fixed by the Secretary, which rates may not exceed the 
     daily equivalent of the rate of pay for level 4 of the Senior 
     Executive Schedule under section 5382 of title 5, United 
     States Code, for each day (including traveltime) they are so 
     engaged.
       ``(2) Expenses.--While conducting the business of the 
     Scientific Advisory Committee away from their homes or 
     regular places of business, each member may be allowed travel 
     expenses, including per diem in lieu of subsistence, as 
     authorized by section 5703 of title 5 of the United States 
     Code for persons in the Government service employed 
     intermittently.
       ``(d) Duties.--The Scientific Advisory Committee shall--
       ``(1) assist the Secretary in establishing, amending, or 
     revoking performance standards under section 514(a)(3);
       ``(2) examine and determine the effects of the alteration 
     of the nicotine yield levels in tobacco products;
       ``(3) examine and determine whether there is a threshold 
     level below which nicotine yields do not produce dependence 
     on the tobacco product involved, and, if so, determine what 
     that level is; and
       ``(4) review other safety, dependence or health issues 
     relating to tobacco products as determined appropriate by the 
     Secretary.

     ``SEC. 906. REQUIREMENTS RELATING TO NICOTINE AND OTHER 
                   CONSTITUENTS.

       ``(a) General Rule.--The Secretary may adopt a performance 
     standard under section 514(a)(3) that requires the 
     modification of a tobacco product in a manner that involves--
       ``(1) the reduction or elimination of nicotine yields of 
     the product; or
       ``(2) the reduction or elimination of other constituents or 
     harmful components of the product.
       ``(b) Tobacco Constituents.--The Secretary shall promulgate 
     regulations for the testing, reporting and disclosure of 
     tobacco smoke constituents that the Secretary determines the 
     public should be informed of to protect public health, 
     including tar, nicotine, and carbon monoxide. Such 
     regulations may require label and advertising disclosures 
     relating to tar and nicotine.
       ``(c) Limitation on Tar.--Not later than 3 years after the 
     date of enactment of this chapter, the Secretary shall 
     promulgate regulations that limit the amount of tar in a 
     cigarette to no more than 12 milligrams. Nothing in the 
     preceding sentence shall be construed as limiting the 
     authority of the Secretary to promulgate regulations further 
     limiting the amount of tar that may be contained in a 
     cigarette.

     ``SEC. 907. REDUCED RISK PRODUCTS.

       ``(a) Misbranding.--Except as provided in subsection (b), 
     the regulations promulgated in accordance with section 904(a) 
     shall require that a tobacco product be deemed to be 
     misbranded if the labeling of the package of the product, or 
     the claims of the manufacturer in connection with the 
     product, can reasonably be interpreted by an objective 
     consumer as stating or implying that the product presents a 
     reduced health risk as compared to other similar products.
       ``(b) Exception.--
       ``(1) In general.--Subsection (a) shall not apply to the 
     labeling of a tobacco product, or the claims of the 
     manufacturer in connection with the product, if--
       ``(A) the manufacturer, based on the best available 
     scientific evidence, demonstrates to the Commissioner that 
     the product significantly reduces the risk to the health of 
     the user as compared to other similar tobacco products; and
       ``(B) the Commissioner approves the specific claim that 
     will be made a part of the labeling of the product, or the 
     specific claims of the manufacturer in connection with the 
     product.
       ``(2) Reduction in harm.--The Commissioner shall promulgate 
     regulations to permit the inclusion of scientifically-based 
     specific health claims on the labeling of a tobacco product 
     package, or the making of such claims by the manufacturer in 
     connection with the product, where the Commissioner 
     determines that the inclusion or making of such claims would 
     reduce harm to the public and otherwise promote public 
     health.
       ``(c) Development of Reduced Risk Product Technology.--
       ``(1) Notification of commissioner.--The manufacturer of a 
     tobacco product shall provide written notice to the 
     Commissioner upon the development or acquisition by the 
     manufacturer of any technology that would reduce the risk of 
     such products to the health of the user.
       ``(2) Confidentiality.--The Commissioner shall promulgate 
     regulations to provide a manufacturer with appropriate 
     confidentiality protections with respect to technology that 
     is the subject of a notification under paragraph (1) that 
     contains evidence that the technology involved is in the 
     early developmental stages.
       ``(3) Licensing.--
       ``(A) In general.--With respect to any technology developed 
     or acquired under paragraph (1), the manufacturer shall--
       ``(i) use such technology in the manufacture of its tobacco 
     products; or
       ``(ii) permit the use of such technology (for a reasonable 
     fee) by other manufacturers of tobacco products to which this 
     chapter applies.
       ``(B) Fees.--The Commissioner shall promulgate regulations 
     to provide for the payment of a commercially reasonable fee 
     by each manufacturer that uses the technology described under 
     subparagraph (A) to the manufacturer that submits the notice 
     under paragraph (1) for such technology. Such regulations 
     shall contain procedures for the resolution of fee disputes 
     between manufacturers under this subparagraph.
       ``(d) Requirement of Manufacture and Marketing.--
       ``(1) Purpose.--It is the purpose of this subsection to 
     provide for a mechanism to ensure that tobacco products that 
     are designed to be less hazardous to the health of users are 
     developed, tested, and made available to consumers.
       ``(2) Determination.--Upon a determination by the 
     Commissioner that the manufacture of a tobacco product that 
     is less hazardous to the health of users is technologically 
     feasible, the Commissioner may, in accordance with this 
     subsection, require that certain manufacturers of such 
     products manufacture and market such less hazardous products.
       ``(3) Manufacturer.--
       ``(A) Requirement.--Except as provided in subparagraph (B), 
     the requirement under paragraph (2) shall apply to any 
     manufacturer that provides a notification to the Commissioner 
     under subsection (c)(1) concerning the technology that is the 
     subject of the determination of the Commissioner.
       ``(B) Exception.--The requirement under subparagraph (A) 
     shall not apply to a manufacturer if--
       ``(i) the manufacturer elects not to manufacture such 
     products and provides notice to the Commissioner of such 
     election; and
       ``(ii) the manufacturer agrees to provide the technology 
     involved, for a commercially reasonable fee, to other 
     manufacturers that enter into agreements to use such 
     technology to manufacture and market tobacco products that 
     are less hazardous to the health of users.

     ``SEC. 908. GOOD MANUFACTURING PRACTICE STANDARDS.

       ``(a) Authority.--
       ``(1) In general.--The Secretary may, in accordance with 
     paragraph (2), prescribe regulations requiring that the 
     methods used in, and the facilities and controls used for, 
     the manufacture, pre-production design validation (including 
     a process to assess the performance of a tobacco product), 
     packing, and storage of a tobacco product conform to current 
     good manufacturing practice, as prescribed in such 
     regulations, to ensure that such products will be in 
     compliance with this chapter.
       ``(2) Requirements prior to regulations.--Prior to the 
     Secretary promulgating any regulation under paragraph (1) the 
     Secretary shall--
       ``(A) afford the Scientific Advisory Committee established 
     under section 905 an opportunity (with a reasonable time 
     period) to submit recommendations with respect to the 
     regulations proposed to be promulgated; and
       ``(B) afford an opportunity for an oral hearing.

[[Page S12174]]

       ``(b) Minimum Requirements.--The regulations promulgated 
     under subsection (a) shall at a minimum require--
       ``(1) the implementation of a quality control system by the 
     manufacturer of a tobacco product;
       ``(2) a process for the inspection, in accordance with this 
     Act, of tobacco product material prior to the packaging of 
     such product;
       ``(3) procedures for the proper handling and storage of the 
     packaged tobacco product;
       ``(4) after consultation with the Administrator of the 
     Environmental Protection Agency, the development and 
     adherence to applicable tolerances with respect to pesticide 
     chemical residues in or on commodities used by the 
     manufacturer in the manufacture of the finished tobacco 
     product;
       ``(5) the inspection of facilities by officials of the Food 
     and Drug Administration as otherwise provided for in this 
     Act; and
       ``(6) record keeping and the reporting of certain 
     information.
       ``(c) Petitions for Exemptions and Variances.--
       ``(1) In general.--Any person subject to any requirement 
     prescribed by regulations under subsection (a) may petition 
     the Secretary for an exemption or variance from such 
     requirement. Such a petition shall be submitted to the 
     Secretary in such form and manner as the Secretary shall 
     prescribe and shall--
       ``(A) in the case of a petition for an exemption from a 
     requirement, set forth the basis for the petitioner's 
     determination that compliance with the requirement is not 
     required to ensure that the device is in compliance with this 
     chapter;
       ``(B) in the case of a petition for a variance from a 
     requirement, set forth the methods proposed to be used in, 
     and the facilities and controls proposed to be used for, the 
     manufacture, packing, and storage of the product in lieu of 
     the methods, facilities, and controls prescribed by the 
     requirement; and
       ``(C) contain such other information as the Secretary shall 
     prescribe.
       ``(2) Scientific advisory committee.--The Secretary may 
     refer to the Scientific Advisory Committee established under 
     section 905 any petition submitted under paragraph (1). The 
     Scientific Advisory Committee shall report its 
     recommendations to the Secretary with respect to a petition 
     referred to it within 60 days of the date of the petition's 
     referral. Within 60 days after--
       ``(A) the date the petition was submitted to the Secretary 
     under paragraph (1); or
       ``(B) if the petition was referred to the Scientific 
     Advisory Committee, the expiration of the 60-day period 
     beginning on the date the petition was referred to such 
     Committee;

     whichever occurs later, the Secretary shall by order either 
     deny the petition or approve it.
       ``(3) Approval of petition.--
       ``(A) In general.--The Secretary may approve--
       ``(i) a petition for an exemption for a tobacco product 
     from a requirement if the Secretary determines that 
     compliance with such requirement is not required to assure 
     that the product will comply with this chapter; and
       ``(ii) a petition for a variance for a tobacco product from 
     a requirement if the Secretary determines that the methods to 
     be used in, and the facilities and controls to be used for, 
     the manufacture, packing, and storage of the product in lieu 
     of the methods, controls, and facilities prescribed by the 
     requirement are sufficient to ensure that the product will 
     comply with this chapter.
       ``(B) Conditions.--An order of the Secretary approving a 
     petition for a variance shall prescribe such conditions 
     respecting the methods used in, and the facilities and 
     controls used for, the manufacture, packing, and storage of 
     the tobacco product to be granted the variance under the 
     petition as may be necessary to ensure that the product will 
     comply with this chapter.
       ``(4) Informal hearing.--After the issuance of an order 
     under paragraph (2) respecting a petition, the petitioner 
     shall have an opportunity for an informal hearing on such 
     order.
       ``(d) Agricultural Producers.--The Secretary may not 
     promulgate any regulation under this section that has the 
     effect of placing regulatory burdens on tobacco producers (as 
     such term is used for purposes of the Agricultural Adjustment 
     Act of 1938 (7 U.S.C. 1281 et seq.) and the Agricultural Act 
     of 1949 (7 U.S.C. 1441 et seq.)) in excess of the regulatory 
     burdens generally placed on other agricultural commodity 
     producers.

     ``SEC. 909. DISCLOSURE AND REPORTING OF 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 chapter, and 
     annually thereafter, each manufacturer of a tobacco product 
     shall submit to the Secretary an ingredient list for all 
     brands of tobacco products that contains the information 
     described in paragraph (2).
       ``(2) Requirements.--The list described in paragraph (1) 
     shall, with respect to each brand of tobacco product of a 
     manufacturer, include
       ``(A) a list of all ingredients, constituents, substances, 
     and compounds that are added to the tobacco (and the paper or 
     filter of the product if applicable) in the manufacture of 
     the tobacco product, for each brand of tobacco product so 
     manufactured;
       ``(B) a description of the quantity of the ingredients, 
     constituents, substances, and compounds that are listed under 
     subparagraph (A) with respect to each brand of tobacco 
     product;
       ``(C) a description of the nicotine content of the product, 
     measured in milligrams of nicotine;
       ``(D) with respect to cigarettes a description of--
       ``(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 nicotine delivery level under average smoking 
     conditions reported in milligrams of nicotine per cigarette;
       ``(E) with respect to smokeless tobacco products a 
     description of--
       ``(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.
       ``(b) Safety Assessments.--
       ``(1) Application to new ingredients.--
       ``(A) In general.--Not later than 1 year after the date of 
     enactment of this chapter, 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 of such a safety assessment.
       ``(B) 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 of tobacco product involved prior 
     to the date of enactment of this chapter.
       ``(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 approved 
     through the safety assessment process within the 5-year 
     period beginning on the date of enactment of this chapter. 
     The Secretary shall develop a procedure that staggers the 
     percentage of such ingredients, constituents, substances, or 
     compounds for which safety assessments must be submitted for 
     approval by manufacturers in each year.
       ``(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) result in a finding that there is a reasonable 
     certainty in the minds of competent scientists that the 
     ingredient, constituents, substance, or compound is not 
     harmful in the quantities used under the intended conditions 
     of use.
       ``(c) Prohibition.--
       ``(1) Regulations.--Not later than 12 months after the date 
     of enactment of this chapter, 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;
       ``(B) if the Secretary disapproves of the safety of the 
     ingredient, constituent, substance, or compound that was the 
     subject of the assessment under paragraph (2); or
       ``(C) if such ingredient, constituent, substance, or 
     compound is a new ingredient that has not been approved for 
     use by the Secretary.
       ``(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 approval. 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) Disclosure of Ingredients to the Public.--
       ``(1) Initial disclosure.--The regulations promulgated in 
     accordance with section 904(a) shall, at a minimum, require 
     that a tobacco product be deemed to be misbranded if the 
     labeling of the package of such product

[[Page S12175]]

     does not disclose all ingredients, constituents, substances, 
     or compounds contained in the product in accordance with 
     regulations promulgated by the Secretary.
       ``(2) Disclosure of percentage of domestic and foreign 
     tobacco.--The regulations referred to in paragraph (1) shall, 
     at a minimum, require that a tobacco product be deemed to be 
     misbranded if the labeling of the package of such product 
     does not 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.
       ``(e) Confidentiality.--
       ``(1) Petition by manufacturer.--Upon the submission of a 
     list under subsection (a), a manufacturer may petition the 
     Secretary to exempt certain ingredients, constituents, 
     substances, or compounds on such list from public disclosure 
     under subsection (e) on the basis that such information 
     should be considered confidential as a trade secret. Such 
     petition may be accompanied by such data as the manufacturer 
     elects to submit.
       ``(2) Determination.--Not later than 60 days after 
     receiving a petition under paragraph (1), the Secretary, in 
     consultation with the Attorney General, shall make a 
     determination with respect to whether the information 
     described in the petition should be exempt from disclosure 
     under paragraph (1) as a trade secret. The Secretary shall 
     provide the manufacturer involved with notice of such 
     determination. but the decision of the Secretary shall be 
     final.
       ``(3) Procedures for confidential information.--The 
     Secretary shall develop procedures to maintain the 
     confidentiality of information that is treated as a trade 
     secret under a determination under paragraph (2). Such 
     procedures shall include--
       ``(A) a requirement that such information be maintained in 
     a secure facility; and
       ``(B) a requirement that only the Secretary, or the 
     authorized agents of the Secretary, will have access to the 
     information and shall be instructed to maintain the 
     confidentiality of such information.
       ``(4) Health disclosure.--Notwithstanding a determination 
     under paragraph (2), the Secretary may require that any 
     ingredient, constituents, substance, or compound contained in 
     a tobacco product that is determined to be exempt from 
     disclosure as a trade secret be disclosed if the Secretary 
     determines that such ingredient, constituents, substance, or 
     compound is not safe as provided for in subsection (d).
       ``(5) Other disclosure.--Any information that the Secretary 
     determines is not subject to disclosure to the public under 
     this subsection, shall be exempt from disclosure pursuant to 
     subsection (a) of section 552 of title 5, United States Code, 
     by reason of subsection (b)(4) of such section, and shall be 
     considered confidential and shall not be disclosed, except 
     that such information may be disclosed to other officers or 
     employees as provided for in paragraph (3)(B) or when 
     relevant in any proceeding under this Act.

     ``SEC. 910. 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 
     within the United States 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 or importer of cigarettes to advertise or cause 
     to be advertised within the United States any cigarette 
     unless the advertising bears, in accordance with the 
     requirements of this 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.
       ``(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 panel of the cigarette package (or 
     carton) and occupy not less than 25 percent of such front 
     panel.
       ``(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.--The provisions of subparagraph (A) shall 
     not apply 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 occupy not less than 
     20 percent of the area of the advertisement involved.
       ``(B) Type and color.--
       ``(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.

     The Secretary may revise the required type sizes as the 
     Secretary determines appropriate within the 20 percent 
     requirement.
       ``(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.
       ``(4) Rotation of label statements.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the label statements specified in subparagraphs (A) and (B) 
     of paragraph (1) shall be rotated by each manufacturer or 
     importer of cigarettes quarterly in alternating sequence on 
     packages of each brand of cigarettes manufactured by the 
     manufacturer or importer and in the advertisements for each 
     such brand of cigarettes in accordance with a plan submitted 
     by the manufacturer or importer and approved by the 
     Secretary. The Secretary shall approve a plan submitted by a 
     manufacturer or importer of cigarettes which will provide the 
     rotation required by this paragraph and which assures that 
     all of the labels required by subparagraphs (A) and (B) will 
     be displayed by the manufacturer or importer at the same 
     time.
       ``(B) Application of other rotation requirements.--
       ``(i) In general.--A manufacturer or importer of cigarettes 
     may apply to the Secretary to have the label rotation 
     described in clause (iii) apply with respect to a brand style 
     of cigarettes manufactured or imported by such manufacturer 
     or importer if--

       ``(I) the number of cigarettes of such brand style sold in 
     the fiscal year of the manufacturer or importer preceding the 
     submission of the application is less than \1/4\ of 1 percent 
     of all the cigarettes sold in the United States in such year; 
     and
       ``(II) more than \1/2\ of the cigarettes manufactured or 
     imported by such manufacturer or importer for sale in the 
     United States are packaged into brand styles which meet the 
     requirements of subclause (I).

     If an application is approved by the Secretary, the label 
     rotation described in clause (iii) shall apply with respect 
     to the applicant during the 1-year period beginning on the 
     date of the application approval.
       ``(ii) Plan.--An applicant under clause (i) shall include 
     in its application a plan under which the label statements 
     specified in subparagraph (A) of paragraph (1) will be 
     rotated by the applicant manufacturer or importer in 
     accordance with the label rotation described in clause (iii).
       ``(iii) Other rotation requirements.--Under the label 
     rotation which the manufacturer or importer with an approved 
     application may put into effect, each of the labels specified 
     in subparagraph (A) of paragraph (1) shall appear on the 
     packages of each brand style of cigarettes with respect to 
     which the application was approved an equal number of times 
     within the 12-month period beginning on the date of the 
     approval by the Secretary of the application.
       ``(5) Application of requirement.--Paragraph (1) does not 
     apply to a distributor, a retailer of cigarettes who does not 
     manufacture, package, or import cigarettes for sale or 
     distribution within the United States.
       ``(6) Television and radio advertising.--It shall be 
     unlawful to advertise cigarettes and little cigars on any 
     medium of electronic

[[Page S12176]]

     communications subject to the jurisdiction of the Federal 
     Communications Commission.
       ``(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 
     within the United States 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 or importer of smokeless tobacco products to 
     advertise or cause to be advertised within the United States 
     any smokeless tobacco product unless the advertising bears, 
     in accordance with the requirements of this 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.
       ``(2) Requirements for labeling.--
       ``(A) Location.--Each label statement required by 
     subparagraph (A) of paragraph (1) shall be located on the 
     principal display panel of the product and occupy not less 
     than 25 percent of such panel.
       ``(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.
       ``(3) Advertising and rotation.--The provisions of 
     paragraph (3) and (4)(A) 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.
       ``(4) Application of requirement.--Paragraph (1) does not 
     apply to a distributor or a retailer of smokeless tobacco 
     products who does not manufacture, package, or import such 
     products for sale or distribution within the United States.
       ``(5) Television and radio advertising.--It shall be 
     unlawful to advertise smokeless tobacco on any medium of 
     electronic communications subject to the jurisdiction of the 
     Federal Communications Commission.
       ``(c) Enforcement.--Not later than 180 days after the date 
     of the enactment of this title, the Secretary shall 
     promulgate such regulations as may be necessary to enforce 
     subsections (a) and (b).
       ``(d) Injunctions.--The several district courts of the 
     United States are vested with jurisdiction, for cause shown, 
     to prevent and restrain violations of this section upon the 
     application of the Secretary in the case of a violation of 
     subsection (a) or (b).
       ``(e) Construction.--
       ``(1) In general.--Noting in this section shall be 
     construed to limit the ability of the Secretary the change 
     the text or layout of any of the warning statements, or any 
     of the labeling provisions, under subsections (a) and (b), if 
     determined necessary by the Secretary.
       ``(2) Unfair acts.--Nothing in this section (other than the 
     requirements of subsections (a) and (b)) shall be construed 
     to limit or restrict the authority of the Secretary with 
     respect to unfair or deceptive acts or practices in the 
     advertising of cigarettes or smokeless tobacco products.
       ``(f) Limited Preemption.--
       ``(1) State and local action.--
       ``(A) Limitation.--No warning label with respect to 
     cigarettes or smokeless tobacco products, other than the 
     warning labels required by subsections (a) and (b), shall be 
     required by any State or local statute or regulation to be 
     included on any package or in any advertisement of cigarettes 
     or a smokeless tobacco product.
       ``(B) Rule of construction.--Nothing in this section shall 
     be construed as prohibiting a State or political subdivision 
     of a State from enacting statutes or regulations concerning 
     cigarettes or smokeless tobacco products so long as such 
     statutes or regulations do not conflict with the labeling and 
     advertising requirements of this section or require 
     additional statements on cigarette or smokeless tobacco 
     packages.
       ``(2) Effect on liability law.--Except as otherwise 
     provided in this section, nothing in this section shall 
     relieve any person from liability at common law or under 
     State statutory law to any other person.
       ``(g) Reports.--.Not later than 1 year after the date of 
     enactment of this chapter, and biennially thereafter, the 
     Secretary shall prepare and submit to Congress a report 
     containing--
       ``(1) a description of the effects of health education 
     efforts on the use of cigarettes and smokeless tobacco 
     products;
       ``(2) a description of the use by the public of cigarettes 
     and smokeless tobacco products;
       ``(3) an evaluation of the health effects of cigarettes and 
     smokeless tobacco products and the identification of areas 
     appropriate for further research; and
       ``(4) such recommendations for legislation and 
     administrative action as the Secretary considers appropriate.
       ``(h) Exports.--Packages of cigarettes or smokeless tobacco 
     products manufactured, imported, or packaged--
       ``(1) for export from the United States; or
       ``(2) for delivery to a vessel or aircraft, as supplies, 
     for consumption beyond the jurisdiction of the internal 
     revenue laws of the United States;

     shall be exempt from the requirements of this chapter, but 
     such exemptions shall not apply to cigarettes or smokeless 
     tobacco products manufactured, imported, or packaged for sale 
     or distribution to members or units of the Armed Forces of 
     the United States located outside of the United States.
       ``(i) Application.--The Secretary shall exercise the 
     authority provided for in this section notwithstanding the 
     provisions of the Federal Cigarette Labeling and Advertising 
     Act (15 U.S.C. 1331 et seq.) and the Comprehensive Smokeless 
     Tobacco Health Education Act of 1986 (15 U.S.C. 4401 et 
     seq.).

     ``SEC. 911. STATEMENT OF INTENDED USE.

       ``(a) Requirement.--Each manufacturer, distributor, and 
     retailer advertising or causing to be advertised, 
     disseminating or causing to be disseminated, advertising 
     concerning cigarettes, cigarette tobacco, or smokeless 
     tobacco products otherwise permitted under this chapter shall 
     include, as provided in section 502, the established name of 
     the product and a statement of the intended use of the 
     product as provided for in subsection (b).
       ``(b) Use Statements.--
       ``(1) Cigarettes.--A statement of intended use for 
     cigarettes or cigarette tobacco is as follows (whichever is 
     appropriate):

     ``Cigarettes--A Nicotine-Delivery Device for Persons 18 or 
     Older.

     ``Cigarette Tobacco--A Nicotine-Delivery Device for Persons 
     18 or Older.
       ``(2) Smokeless tobacco.--A statement of intended use for a 
     smokeless tobacco product is as follows (whichever is 
     appropriate):

     ``Loose Leaf Chewing Tobacco--A Nicotine-Delivery Device for 
     Persons 18 or Older.

     ``Plug Chewing Tobacco--A Nicotine-Delivery Device for 
     Persons 18 or Older.

     ``Twist Chewing Tobacco--A Nicotine-Delivery Device for 
     Persons 18 or Older.

     ``Moist Snuff--A Nicotine-Delivery Device for Persons 18 or 
     Older.

     ``Dry Snuff--A Nicotine-Delivery Device for Persons 18 or 
     Older.
       ``(c) Type and Location.--The Secretary shall promulgate 
     regulations with respect to the type, color, size, and 
     placement of statements required under this section on labels 
     and in advertisements.

     ``SEC. 912. MISCELLANEOUS PROVISIONS.

       ``(a) Preservation of State and Local Authority.--Except as 
     otherwise provided for in this chapter, nothing in this 
     chapter shall be construed as prohibiting a State from 
     imposing requirements, prohibitions, penalties or other 
     measures to further the purposes of this chapter that are in 
     addition to the requirements, prohibitions, or penalties 
     required under this chapter. To the extent not inconsistent 
     with the purposes of this chapter, State and local 
     governments may impose additional tobacco product control 
     measures to further restrict or limit the use of such 
     products by minors.
       ``(b) Regulations.--The Secretary may promulgate 
     regulations to enforce the provisions of this chapter, or to 
     modify, alter, or expand the requirements and protections 
     provided for in this chapter if the Secretary determines that 
     such modifications, alternations, or expansion is 
     necessary.''.
  TITLE III--STANDARDS TO REDUCE INVOLUNTARY EXPOSURE TO TOBACCO SMOKE

     SEC. 301. 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 
     building 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. Such 
     term shall not include any building or portion thereof 
     regularly used for residential purposes.
       ``(B) Exclusions.--The term `public facility' does not 
     include a portion of a building which is used as a bar, 
     tobacco merchant, a hotel guest room that is designated as a 
     smoking room, or prison.
       ``(2) Responsible entity.--The term `responsible entity' 
     means, with respect to any public facility, the owner of such 
     facility except that, in the case of any such facility or

[[Page S12177]]

     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 from 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; 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 that 
     ensure that air from the area is directly exhausted to the 
     outside and does not recirculate or drift to other areas 
     within the public facility;
       ``(B) the area is maintained at negative pressure, as 
     compared to adjoined nonsmoking areas, as determined under 
     regulations promulgated by the Secretary of Labor; and
       ``(C) nonsmoking individuals do not have to enter the area 
     for any purpose while smoking is occurring in such area.

     Cleaning and maintenance work shall be conducted in such area 
     only while no smoking is occurring in the area.
       ``(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 
     adopt and implement at such facility a smoke-free environment 
     policy that--

       ``(I) prohibits the smoking of cigarettes, cigars, and 
     pipes, and any other combustion of tobacco within the 
     facility and on facility property;
       ``(II) 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 or Labor.

       ``(B) Public transportation.--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 adopt and implement on 
     such conveyances a smoke-free environment policy that--
       ``(i) 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.
       ``(c) Enforcement.--To be eligible to receive funds under 
     title XXVIII of the Public Health Service Act, a State shall 
     have in effect laws or procedures to provide for the 
     enforcement of this section within the State. Such laws or 
     procedures shall permit aggrieved individuals to enforce this 
     section through administrative or judicial means.
       ``(d) Preemption.--Nothing in this section shall preempt or 
     otherwise affect any other 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.--The Secretary of Labor is authorized to 
     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 IV--TOBACCO MARKET TRANSITION ASSISTANCE

     SEC. 401. DEFINITIONS.

       In this title:
       (1) Buyout payment.--The term ``buyout payment'' means a 
     payment made under section 411, 412, or 413.
       (2) Contract.--The term ``contract'' means a contract 
     entered into under section 411, 412, or 413.
       (3) Lease.--The term ``lease'' means a rental of quota on 
     either a cash rent or crop share basis.
       (4) Marketing year.--The term ``marketing year'' means--
       (A) in the case of Flue-cured tobacco, the period beginning 
     July 1 and ending the following June 30; and
       (B) in the case of each other kind of tobacco, the period 
     beginning October 1 and ending the following September 30.
       (5) Quota owner.--The term ``quota owner'' means a person 
     that, at the time of entering into a contract, owns quota 
     provided by the Secretary.
       (6) Producer of quota.--The term ``producer of quota'' 
     means a person that during at least 3 of the 1993 through 
     1997 crops of tobacco (as determined by the Secretary) that 
     were subject to quota--
       (A) leased quota;
       (B) shared in the risk of producing a crop of tobacco; and
       (C) marketed the tobacco subject to quota.
       (7) Producer of non-tobacco quota.--The term ``producer of 
     non-tobacco quota'' means a person that during at least 1 of 
     the crop years 1995 through 1997 grew and marketed tobacco 
     not subject to quota.
       (8) Quota.--The term ``quota'' means basic marketing quota 
     for tobacco determined by the Secretary under the 
     Agricultural Adjustment Act of 1938 (7 U.S.C. 1281 et seq.).
       (9) Quota holder.--The term ``quota holder'' means a 
     producer that owns a farm for which a tobacco farm marketing 
     quota or farm acreage allotment was established under the 
     Agricultural Adjustment Act of 1938 (7 U.S.C. 1281 et seq.) 
     for any of the 1994, 1995, or 1996 crop years.
       (10) Quota lessee.--The term ``quota lessee'' means--
       (A) a producer that owns a farm that produced tobacco 
     pursuant to a lease and transfer to that farm of all or part 
     of a tobacco farm marketing quota or farm acreage allotment 
     established under the Agricultural Adjustment Act of 1938 (7 
     U.S.C. 1281 et seq.) for any of the 1994, 1995, or 1996 crop 
     years; or
       (B) a producer that rented land from a farm operator to 
     produce tobacco under a tobacco farm marketing quota or farm 
     acreage allotment established under the Agricultural 
     Adjustment Act of 1938 (7 U.S.C. 1281 et seq.) for any of the 
     1994, 1995, or 1996 crop years.
       (11) Quota tenant.--The term ``quota tenant'' means a 
     producer that--
       (A) is the principal producer, as determined by the 
     Secretary, of tobacco on a farm where tobacco is produced 
     pursuant to a tobacco farm marketing quota or farm acreage 
     allotment established under the Agricultural Adjustment Act 
     of 1938 (7 U.S.C. 1281 et seq.) for any of the 1994, 1995, or 
     1996 crop years; and
       (B) is not a quota holder or quota lessee.
       (12) Secretary.--In subtitles A and C, the term 
     ``Secretary'' means the Secretary of Agriculture.
       (13) State.--The term ``State'' means each of the several 
     States of the United States, the District of Columbia, the 
     Commonwealth of Puerto Rico, and any other territory or 
     possession of the United States.
       (14) Tobacco.--The term ``tobacco'' means any kind of 
     tobacco produced and marketed in the United States.
       (15) Tobacco-growing state.--The term ``tobacco-growing 
     State'' means Georgia, Kentucky, North Carolina, South 
     Carolina, Tennessee, or Virginia.
       (16) Transition payment.--The term ``transition payment'' 
     means a payment made to a producer under section 411, 412, or 
     413.
       (17) United states.--The term ``United States'', when used 
     in a geographical sense, means all of the States.
  Subtitle A--Tobacco Quota Buyout Contracts and Producer Transition 
                                Payments

     SEC. 411. QUOTA OWNER BUYOUT CONTRACTS.

       (a) Offer.--The Secretary shall offer to enter into a quota 
     buyout contract with the quota owner on each farm to which a 
     quota was assigned in 1997.
       (b) Terms.--
       (1) Relinquishment of quota.--Under the terms of the 
     contract, the owner shall agree, in exchange for a buyout 
     payment, to permanently relinquish the quota.
       (2) Eligibility for tobacco program benefits.--Neither the 
     farm, in its current or future ownership configuration, nor 
     the contracting owner shall be eligible for any tobacco 
     program benefits under the Agricultural Adjustment Act of 
     1938 (7 U.S.C. 1281 et seq.), or the Agricultural Act of 1949 
     (7 U.S.C. 1421 et. seq.).
       (c) Payment Calculation.--The total amount of the buyout 
     payment made to a quota owner shall be determined by 
     multiplying--
       (1) $4; by
       (2) the average quantity of basic quota assigned to the 
     farm during the period 1995 through 1997.

     SEC. 412. PRODUCER TRANSITION PAYMENTS FOR QUOTA TOBACCO.

       (a) Offer.--The Secretary shall offer to producers of quota 
     tobacco that do not own the quota, but were quota lessees or 
     quota tenants in 1997, producer transition payment contracts.
       (b) Terms.--Under the terms of the transition contract, the 
     producer shall agree, in exchange for a payment, to 
     permanently refrain from growing tobacco for which a quota 
     program is in effect.

[[Page S12178]]

       (c) Payment Calculation.--The total amount of the 
     transition payment made to a producer shall be determined by 
     multiplying--
       (1) $4; by
       (2) the average quantity of quota tobacco leased or rented 
     from quota owners during the period 1995 through 1997.

     SEC. 413. PRODUCER TRANSITION PAYMENTS FOR NON-QUOTA TOBACCO.

       (a) Offer.--The Secretary shall offer to producers of 
     nonquota tobacco a producer nonquota transition payment 
     contract.
       (b) Terms.--Under the terms of the transition payment, the 
     producer shall agree, in exchange for a payment, to 
     permanently refrain from growing tobacco for which a quota 
     program is in effect.
       (c) Payment Calculation.--The total amount of the 
     transition payment made to a producer shall be determined by 
     multiplying--
       (1) $4; by
       (2) the average annual quantity of nonquota tobacco 
     marketed during the period 1995 through 1997.

     SEC. 414. ELEMENTS OF CONTRACTS.

       (a) Commencement.--To the maximum extent practicable, the 
     Secretary shall commence entering into contracts under this 
     subtitle not later than 90 days after the date of enactment 
     of this Act.
       (b) Deadline.--The Secretary may not enter into a contract 
     under this subtitle after the date that is 3 years after the 
     date of enactment of this Act.
       (c) Beginning Date.--A contract under this subtitle shall 
     take effect and become binding beginning in the tobacco 
     marketing year following the year in which the contract is 
     entered into.
       (d) Time for Payment.--A contract payment shall be made not 
     later than the date that is the beginning of the marketing 
     year in which the contract becomes binding, or at any later 
     time selected by the quota owner or producer.
       (e) Prohibition of Double Payments.--In no case shall a 
     contract holder receive overlapping payments as a quota owner 
     and as a producer on the same tobacco.
                Subtitle B--No Net Cost Tobacco Program

     SEC. 421. BUDGET DEFICIT ASSESSMENT.

       Section 106(g)(1) of the Agricultural Act of 1949 (7 U.S.C. 
     1445(g)(1)) is amended--
       (1) by striking ``only for each of the 1994 through 1998 
     crops'' and inserting ``for the 1998 and each subsequent 
     crop''; and
       (2) by striking ``equal to--'' and all that follows and 
     inserting ``equal to 1 or more amounts determined by the 
     Secretary that are sufficient to cover the costs of the 
     administration of the tobacco quota and price support 
     programs administered by the Secretary.''.
         Subtitle C--Tobacco Community Empowerment Block Grants

     SEC. 431. TOBACCO COMMUNITY EMPOWERMENT BLOCK GRANTS.

       (a) Authority.--The Secretary shall make grants to tobacco 
     States in accordance with this section to enable the States 
     to--
       (1) empower active tobacco producers and tobacco product 
     manufacturing workers by providing economic alternatives to 
     tobacco; and
       (2) carry out non-tobacco economic development initiatives 
     in tobacco communities.
       (b) Application.--To be eligible to receive payments under 
     this section, a tobacco 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--
       (1) a description of the activities that the State will 
     carry out using amounts received under the grant;
       (2) a designation of an appropriate State agency to 
     administer amounts received under the grant; and
       (3) a description of the steps to be taken to ensure that 
     the funds are distributed in accordance with subsection (e).
       (c) Amount of Grant.--
       (1) In general.--From the amounts available to carry out 
     this section for a fiscal year, the Secretary shall allot to 
     each tobacco State an amount that bears the same ratio to the 
     amounts available as the total income of the State derived 
     from the production of tobacco and the manufacture of tobacco 
     products during the 1994 through 1996 marketing years (as 
     determined under paragraph (2)) bears to the total income of 
     all tobacco States derived from the production of tobacco and 
     the manufacturing of tobacco products during the 1994 through 
     1996 marketing years.
       (2) Tobacco income.--For the 1994 through 1996 marketing 
     years, the Secretary shall determine the amount of income 
     derived from the production of tobacco and the manufacture of 
     tobacco products in each tobacco State and in all tobacco 
     States.
       (d) Payments.--
       (1) In general.--A tobacco State that has an application 
     approved by the Secretary under subsection (b) shall be 
     entitled to a payment under this section in an amount that is 
     equal to its allotment under subsection (c).
       (2) Form of payments.--The Secretary may make payments 
     under this section to a tobacco State in installments, and in 
     advance or by way of reimbursement, with necessary 
     adjustments on account of overpayments or underpayments, as 
     the Secretary may determine.
       (3) Reallotments.--Any portion of the allotment of a 
     tobacco State under subsection (c) that the Secretary 
     determines will not be used to carry out this section in 
     accordance with an approved State application required under 
     subsection (b), shall be reallotted by the Secretary to other 
     tobacco States in proportion to the original allotments to 
     the other States.
       (e) Use and Distribution of Funds.--
       (1) In general.--Amounts received by a tobacco State under 
     this section shall be used to carry out economic development 
     activities, including--
       (A) rural business enterprise activities described in 
     subsections (c) and (e) of section 310B of the Consolidated 
     Farm and Rural Development Act (7 U.S.C. 1932);
       (B) down payment loan assistance programs that are similar 
     to the program described in section 310E of the Consolidated 
     Farm and Rural Development Act (7 U.S.C. 1935);
       (C) activities designed to help create productive farm or 
     off-farm employment in rural areas to provide a more viable 
     economic base and enhance opportunities for improved incomes, 
     living standards, and contributions by rural individuals to 
     the economic and social development of tobacco communities;
       (D) activities that expand existing infrastructure, 
     facilities, and services to capitalize on opportunities to 
     diversify economies in tobacco communities and that support 
     the development of new industries or commercial ventures;
       (E) activities by agricultural organizations that provide 
     assistance directly to active tobacco producers to assist in 
     developing other agricultural activities that supplement 
     tobacco-producing activities;
       (F) initiatives designed to create or expand locally owned 
     value-added processing and marketing operations in tobacco 
     communities;
       (G) technical assistance activities by persons to support 
     farmer-owned enterprises, or agriculture-based rural 
     development enterprises, of the type described in section 252 
     or 253 of the Trade Act of 1974 (19 U.S.C. 2342, 2343); and
       (H) investments in community colleges and trade schools to 
     provide skills training to active tobacco producers and 
     tobacco product manufacturing workers and ensure that the 
     off-farm sector remains vital and robust.
       (2) Tobacco counties.--Assistance may be provided by a 
     tobacco State under this section only to assist a county in 
     the State that has been determined by the Secretary to have 
     in excess of $100,000 in income derived from the production 
     of tobacco and the manufacture of tobacco products during 1 
     or more of the 1994 through 1996 marketing years.
       (3) Distribution.--
       (A) Economic development activities.--Not less than 20 
     percent of the amounts received by a tobacco State under this 
     section shall be used to carry out--
       (i) economic development activities described in 
     subparagraph (E) or (F) of paragraph (1); or
       (ii) agriculture-based rural development activities 
     described in paragraph (1)(G).
       (B) Technical assistance activities.--Not less than 4 
     percent of the amounts received by a tobacco State under this 
     section shall be used to carry out technical assistance 
     activities described in paragraph (1)(G).
       (C) Tobacco counties.--To be eligible to receive payments 
     under this section, a tobacco State shall demonstrate to the 
     Secretary that funding will be provided, during the 1999 
     through 2004 fiscal years, for activities in each county in 
     the State that has been determined under paragraph (2) to 
     have in excess of $100,000 in income derived from the 
     production of tobacco and the manufacture of tobacco 
     products, in amounts that are at least equal to the product 
     obtained by multiplying--
       (i) the ratio that the tobacco production and tobacco 
     product manufacturing income in the county determined under 
     paragraph (2) bears to the total tobacco production and 
     tobacco product manufacturing income for the State determined 
     under subsection (c); by
       (ii) 50 percent of the total amounts received by the State 
     under this section during the 1999 through 2004 fiscal years.
                   TITLE V--MISCELLANEOUS PROVISIONS

     SEC. 501. SENSE OF THE SENATE.

       It is the sense of the Senate that, in order to provide 
     funds to carry out this Act, Congress should enact an 
     increase in the excise taxes on tobacco products of 
     approximately $1.50 per pack of cigarettes (and corresponding 
     increases on taxes on other tobacco products) over a 3-year 
     period, that increases in such tax in future years should be 
     indexed to inflation, and that the payment of such tax should 
     not be considered to be an ordinary and necessary expense in 
     carrying on a trade or business and should not be deductible.

  Mr. LAUTENBERG. Mr. President, today I am joining Senators Kennedy 
and Durbin in introducing the Healthy and Smoke-free Children Act of 
1997. Likewise, Senators Kennedy and Durbin are cosponsoring 
legislation I introduced last week, the Public Health and Education 
Resource Act, S. 1343, or PHAER. As we join forces behind comprehensive 
tobacco legislation to reduce smoking, especially among our young 
people, and to enhance the public health, we urge Senators of both

[[Page S12179]]

parties to unify behind our approach. It is a simple and 
straightforward but effective model for drastically reducing the 
400,000 preventable deaths each year in our country caused by a deadly 
addiction to nicotine.
  Mr. President, it's time for Congress to act. We have the legislative 
packages to get started. The message we are sending out today is clear: 
the goal of comprehensive tobacco legislation is to prevent kids from 
becoming hooked on tobacco--not to get the tobacco companies off the 
hook.
  Our legislation would raise the price of cigarettes by $1.50 per pack 
in order to reduce teen smoking and fund critical public health 
programs. It explicitly prohibits the industry from deducting the cost 
of increased excise taxes from its corporate tax payments. With the 
proceeds of the tax, states will receive back funds for public health 
and children's programs, including health, education, and smoking 
cessation programs aimed at both children, teenagers, and adults. 
Further, our bill will fund a significant increase in medical research. 
To increase industry incentives to reduce teen smoking, the legislation 
we are introducing today will impose penalties on companies which fail 
to meet teen smoking reduction targets. Finally, recognizing the 
potential dislocation to tobacco farmers that could flow from a 
reduction in national smoking rates, our bill provides transitional 
assistance to farmers and displaced tobacco workers.
  Mr. President, of critical importance, our legislation affirms the 
authority of the Food and Drug Administration to regulate tobacco as a 
drug and drug delivery device. It gives FDA explicit authority over the 
advertising, marketing and sale of cigarettes. It also calls for larger 
and more explicit warning labels on cigarettes and ingredient 
disclosure, drawing on legislation I introduced earlier this year, and 
permits states to enact more restrictions on tobacco. It also 
incorporates the essence of the Smokefree Environment Act which I also 
introduced earlier this year, to protect non-smokers from secondhand 
smoke.
  The President has called for comprehensive tobacco legislation that 
gives the Food and Drug Administration authority to regulate nicotine. 
He has also called for a $1.50 increase in the price of cigarettes to 
deter teen smoking and help pay for a variety of public health 
programs. Our legislation accomplishes that.
  Mr. President, the tobacco industry has been trying to convince the 
Congress and the public that the only way to accomplish the President's 
goals is through its proposed settlement with the state Attorneys 
General. We know that this is not the case. Our legislation offers a 
more efficient and effective way of serving the public health. The 
Congress can move ahead without permission from the tobacco industry 
and we should do just that.
  Mr. President, our proposals embody the goals outlined by the 
President and embraced by the public health community. In fact, a broad 
range of groups supported the introduction of S. 1343, the PHAER Act, 
when I introduced it. These groups include Action on Smoking and 
Health, the American Academy of Pediatrics, the American Cancer 
Society, the American College of Physicians, the American College of 
Preventive Medicine, the American Heart Association, the American Lung 
Association, the American Medical Association, the American Society of 
Clinical Oncology, Campaign for Tobacco Free Kids, the National 
Association of Counties, the National Association of County and City 
Health Officials, and Partnership for Prevention and Physicians for 
Social Responsibility.
  Mr. President, these bills eliminate the tobacco industry as the 
middleman in achieving public health goals. We have laid out an 
ambitious, but achievable, program for reducing smoking and death and 
illness. Congressional action on comprehensive tobacco legislation 
should live up to the standards we have established.
  Beyond taking strong, preventive steps to reduce smoking 
domestically, we should also pursue legislation affecting our tobacco 
companies' commercial activities overseas. If we don't, in the next few 
decades we will experience a worldwide health epidemic attributable to 
tobacco. Earlier this year, I introduced S. 1060, the Worldwide Tobacco 
Disclosure Act, to require warning labels on exported packages of 
cigarettes and to codify current trade policies that prevent government 
agencies from promoting tobacco sales overseas and from weakening 
public health measures undertaken by foreign governments.
  I urge my colleagues on both sides of the aisle to join us on the 
public health side of this fight by endorsing our comprehensive tobacco 
legislation.
  Mr. DURBIN. Mr. President, I am pleased to join Senators Kennedy and 
Lautenberg in proposing sweeping new legislation that fills in many of 
the specifics relating to children and the public health that must be 
included in any future legislation related to the proposed tobacco 
settlement.
  The tobacco companies have made billions of dollars addicting and 
exploiting our children. Now, they seek to protect themselves from 
existing and potential lawsuits. This legislation brings us back to the 
fundamental issues that must stay at the top of the public health 
agenda. Reducing the devastation and disease caused by tobacco should 
be our number one goal, not an afterthought.
  This legislation is our effort to start filling in the blanks on any 
tobacco measure. It's time to stop speculating and start laying down 
markers we feel must be part of any comprehensive agreement.
  Under this legislation, the tobacco tax would be raised $1.50 per 
pack of cigarettes. This kind of increase is a proven deterrent to 
underage smoking.
  Of the additional revenues that would be raised beyond what was 
proposed by the state attorneys general, one-half would be used to fund 
medical research into illnesses such as cancer, heart disease and 
diabetes. The other half of the additional revenues would fund an 
expansion of the Head Start program, child care grants, and other child 
and family initiatives.
  The legislation seeks to ensure a significant decline in underage 
smoking by establishing tough performance smoking reduction targets. 
The reduction targets--modeled on legislation I introduced earlier this 
year--set a goal of a 40 percent reduction in youth tobacco use in four 
years, 60 percent in 6 years, and 80 percent in 10 years. If the goal 
is not met, penalties of up to $1 a pack will be imposed on the sale of 
tobacco products manufactured by a company whose products are consumed 
by underage users, with steeper penalties for repeated failure to meet 
youth tobacco targets.
  In addition, we are offering some new incentives for the tobacco 
companies to meet the targets. If a company fails to comply for three 
or more consecutive years, the company will be required to stop selling 
cigarettes in single packs--the size kids buy--and start selling them 
only in cartons, whose price might cause kids to reconsider their 
desire to buy cigarettes. If this step was not sufficient to bring a 
company into compliance, another year violating the performance 
standard would trigger a requirement that the product be sold using 
generic packaging, without catchy logos.
  As far as kids are concerned, it's time for the tobacco companies to 
put their profits on the line. Under our legislation, every new child 
who picks up a cigarette or pockets a can of spit tobacco will become 
an economic loss to a tobacco company. We must hold each company 
individually responsible for its sales to minors.
  In addition to setting performance standards, the legislation 
provides for a national tobacco use reduction program which includes 
smoking cessation programs, media-based advertising about the dangers 
of tobacco use and aggressive public education.
  The bill also compensates states for Medicaid expenditures resulting 
from tobacco-related illnesses; affirms the authority of the Food and 
Drug Administration [FDA] to regulate tobacco as a drug and delivery 
device; mandates strong warning labels and ingredient disclosures; 
reduces exposure to secondhand smoke; prohibits tobacco companies from 
deducting any settlement liabilities as a business expense; and 
provides assistance for tobacco farmers.
  I commend this legislation to my colleagues and urge them to support 
it.

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