Congressional Record, Volume 143 Issue 156 (Saturday, November 8, 1997)

[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.

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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.
``(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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