[Congressional Record Volume 150, Number 98 (Thursday, July 15, 2004)]
[Senate]
[Pages S8243-S8267]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           TEXT OF AMENDMENTS

  SA 3562. Mr. McCONNELL (for Mr. Grassley (for himself and Mr. 
Baucus)) proposed an amendment to the bill H.R. 4520, to amend the 
Internal

[[Page S8244]]

Revenue Code of 1986 to remove impediments in such Code and make our 
manufacturing, service, and high-technology businesses and workers more 
competitive and productive both at home and abroad; as follows:

       (a) Short Ttile.--This Act may be cited as the ``Jumpstart 
     Our Business Strength (JOBS) Act''.

  The text of Amendment S.A. 3562 was printed in the Congressional 
Record on May 18, 2004, as the text of S. 1637 which was passed by the 
Senate on May 11, 2004.
                                 ______
                                 
  SA 3563. Mr. DeWINE (for himself, Mr. Kennedy, Mr. McConnell, Mr. 
Hollings, Ms. Collins, Mrs. Murray, Mr. Durbin, Mrs. Feinstein, Mr. 
Graham of Florida, Mr. Jeffords, Mr. Reed, Mr. Lautenberg, and Mr. 
Schumer) proposed an amendment to amendment SA 3562 proposed by Mr. 
McConnell (for Mr. Grassley (for himself and Mr. Baucus)) to the bill 
H.R. 4520, to amend the Internal Revenue Code of 1986 to remove 
impediments in such Code and make our manufacturing, service, and high-
technology businesses and workers more competitive and productive both 
at home and abroad; as follows:

       At the appropriate place, insert the following:

                TITLE __--PROVISIONS RELATING TO TOBACCO

       Subtitle A--Family Smoking Prevention and Tobacco Control

     SEC. __01. SHORT TITLE.

       This subtitle may be cited as the ``Family Smoking 
     Prevention and Tobacco Control Act''.

     SEC. __02. FINDINGS.

       The Congress finds the following:
       (1) The use of tobacco products by the Nation's children is 
     a pediatric disease of considerable proportions that results 
     in new generations of tobacco-dependent children and adults.
       (2) A consensus exists within the scientific and medical 
     communities that tobacco products are inherently dangerous 
     and cause cancer, heart disease, and other serious adverse 
     health effects.
       (3) Nicotine is an addictive drug.
       (4) Virtually all new users of tobacco products are under 
     the minimum legal age to purchase such products.
       (5) Tobacco advertising and marketing contribute 
     significantly to the use of nicotine-containing tobacco 
     products by adolescents.
       (6) Because past efforts to restrict advertising and 
     marketing of tobacco products have failed adequately to curb 
     tobacco use by adolescents, comprehensive restrictions on the 
     sale, promotion, and distribution of such products are 
     needed.
       (7) Federal and State governments have lacked the legal and 
     regulatory authority and resources they need to address 
     comprehensively the public health and societal problems 
     caused by the use of tobacco products.
       (8) Federal and State public health officials, the public 
     health community, and the public at large recognize that the 
     tobacco industry should be subject to ongoing oversight.
       (9) Under article I, section 8 of the Constitution, the 
     Congress is vested with the responsibility for regulating 
     interstate commerce and commerce with Indian tribes.
       (10) The sale, distribution, marketing, advertising, and 
     use of tobacco products are activities in and substantially 
     affecting interstate commerce because they are sold, 
     marketed, advertised, and distributed in interstate commerce 
     on a nationwide basis, and have a substantial effect on the 
     Nation's economy.
       (11) The sale, distribution, marketing, advertising, and 
     use of such products substantially affect interstate commerce 
     through the health care and other costs attributable to the 
     use of tobacco products.
       (12) It is in the public interest for Congress to enact 
     legislation that provides the Food and Drug Administration 
     with the authority to regulate tobacco products and the 
     advertising and promotion of such products. The benefits to 
     the American people from enacting such legislation would be 
     significant in human and economic terms.
       (13) Tobacco use is the foremost preventable cause of 
     premature death in America. It causes over 400,000 deaths in 
     the United States each year and approximately 8,600,000 
     Americans have chronic illnesses related to smoking.
       (14) Reducing the use of tobacco by minors by 50 percent 
     would prevent well over 6,500,000 of today's children from 
     becoming regular, daily smokers, saving over 2,000,000 of 
     them from premature death due to tobacco induced disease. 
     Such a reduction in youth smoking would also result in 
     approximately $75,000,000,000 in savings attributable to 
     reduced health care costs.
       (15) Advertising, marketing, and promotion of tobacco 
     products have been especially directed to attract young 
     persons to use tobacco products and these efforts have 
     resulted in increased use of such products by youth. Past 
     efforts to oversee these activities have not been successful 
     in adequately preventing such increased use.
       (16) In 2001, the tobacco industry spent more than 
     $11,000,000,000 to attract new users, retain current users, 
     increase current consumption, and generate favorable long-
     term attitudes toward smoking and tobacco use.
       (17) Tobacco product advertising often misleadingly 
     portrays the use of tobacco as socially acceptable and 
     healthful to minors.
       (18) Tobacco product advertising is regularly seen by 
     persons under the age of 18, and persons under the age of 18 
     are regularly exposed to tobacco product promotional efforts.
       (19) Through advertisements during and sponsorship of 
     sporting events, tobacco has become strongly associated with 
     sports and has become portrayed as an integral part of sports 
     and the healthy lifestyle associated with rigorous sporting 
     activity.
       (20) Children are exposed to substantial and unavoidable 
     tobacco advertising that leads to favorable beliefs about 
     tobacco use, plays a role in leading young people to 
     overestimate the prevalence of tobacco use, and increases the 
     number of young people who begin to use tobacco.
       (21) The use of tobacco products in motion pictures and 
     other mass media glamorizes its use for young people and 
     encourages them to use tobacco products.
       (22) Tobacco advertising expands the size of the tobacco 
     market by increasing consumption of tobacco products 
     including tobacco use by young people.
       (23) Children are more influenced by tobacco advertising 
     than adults, they smoke the most advertised brands.
       (24) Tobacco company documents indicate that young people 
     are an important and often crucial segment of the tobacco 
     market. Children, who tend to be more price-sensitive than 
     adults, are influenced by advertising and promotion practices 
     that result in drastically reduced cigarette prices.
       (25) Comprehensive advertising restrictions will have a 
     positive effect on the smoking rates of young people.
       (26) Restrictions on advertising are necessary to prevent 
     unrestricted tobacco advertising from undermining legislation 
     prohibiting access to young people and providing for 
     education about tobacco use.
       (27) International experience shows that advertising 
     regulations that are stringent and comprehensive have a 
     greater impact on overall tobacco use and young people's use 
     than weaker or less comprehensive ones.
       (28) Text only requirements, although not as stringent as a 
     ban, will help reduce underage use of tobacco products while 
     preserving the informational function of advertising.
       (29) It is in the public interest for Congress to adopt 
     legislation to address the public health crisis created by 
     actions of the tobacco industry.
       (30) The final regulations promulgated by the Secretary of 
     Health and Human Services in the August 28, 1996, issue of 
     the Federal Register (61 Fed. Reg. 44615-44618) for inclusion 
     as part 897 of title 21, Code of Federal Regulations, are 
     consistent with the First Amendment to the United States 
     Constitution and with the standards set forth in the 
     amendments made by this subtitle for the regulation of 
     tobacco products by the Food and Drug Administration and the 
     restriction on the sale and distribution, including access to 
     and the advertising and promotion of, tobacco products 
     contained in such regulations are substantially related to 
     accomplishing the public health goals of this subtitle.
       (31) The regulations described in paragraph (30) will 
     directly and materially advance the Federal Government's 
     substantial interest in reducing the number of children and 
     adolescents who use cigarettes and smokeless tobacco and in 
     preventing the life-threatening health consequences 
     associated with tobacco use. An overwhelming majority of 
     Americans who use tobacco products begin using such products 
     while they are minors and become addicted to the nicotine in 
     those products before reaching the age of 18. Tobacco 
     advertising and promotion plays a crucial role in the 
     decision of these minors to begin using tobacco products. 
     Less restrictive and less comprehensive approaches have not 
     and will not be effective in reducing the problems addressed 
     by such regulations. The reasonable restrictions on the 
     advertising and promotion of tobacco products contained in 
     such regulations will lead to a significant decrease in the 
     number of minors using and becoming addicted to those 
     products.
       (32) The regulations described in paragraph (30) impose no 
     more extensive restrictions on communication by tobacco 
     manufacturers and sellers than are necessary to reduce the 
     number of children and adolescents who use cigarettes and 
     smokeless tobacco and to prevent the life-threatening health 
     consequences associated with tobacco use. Such regulations 
     are narrowly tailored to restrict those advertising and 
     promotional practices which are most likely to be seen or 
     heard by youth and most likely to entice them into tobacco 
     use, while affording tobacco manufacturers and sellers ample 
     opportunity to convey information about their products to 
     adult consumers.
       (33) Tobacco dependence is a chronic disease, one that 
     typically requires repeated interventions to achieve long-
     term or permanent abstinence.
       (34) Because the only known safe alternative to smoking is 
     cessation, interventions should target all smokers to help 
     them quit completely.
       (35) Tobacco products have been used to facilitate and 
     finance criminal activities both

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     domestically and internationally. Illicit trade of tobacco 
     products has been linked to organized crime and terrorist 
     groups.
       (36) It is essential that the Food and Drug Administration 
     review products sold or distributed for use to reduce risks 
     or exposures associated with tobacco products and that it be 
     empowered to review any advertising and labeling for such 
     products. It is also essential that manufacturers, prior to 
     marketing such products, be required to demonstrate that such 
     products will meet a series of rigorous criteria, and will 
     benefit the health of the population as a whole, taking into 
     account both users of tobacco products and persons who do not 
     currently use tobacco products.
       (37) Unless tobacco products that purport to reduce the 
     risks to the public of tobacco use actually reduce such 
     risks, those products can cause substantial harm to the 
     public health to the extent that the individuals, who would 
     otherwise not consume tobacco products or would consume such 
     products less, use tobacco products purporting to reduce 
     risk. Those who use products sold or distributed as modified 
     risk products that do not in fact reduce risk, rather than 
     quitting or reducing their use of tobacco products, have a 
     substantially increased likelihood of suffering disability 
     and premature death. The costs to society of the widespread 
     use of products sold or distributed as modified risk products 
     that do not in fact reduce risk or that increase risk include 
     thousands of unnecessary deaths and injuries and huge costs 
     to our health care system.
       (38) As the National Cancer Institute has found, many 
     smokers mistakenly believe that ``low tar'' and ``light'' 
     cigarettes cause fewer health problems than other cigarettes. 
     As the National Cancer Institute has also found, mistaken 
     beliefs about the health consequences of smoking ``low tar'' 
     and ``light'' cigarettes can reduce the motivation to quit 
     smoking entirely and thereby lead to disease and death.
       (39) Recent studies have demonstrated that there has been 
     no reduction in risk on a population-wide basis from ``low 
     tar'' and ``light'' cigarettes and such products may actually 
     increase the risk of tobacco use.
       (40) The dangers of products sold or distributed as 
     modified risk tobacco products that do not in fact reduce 
     risk are so high that there is a compelling governmental 
     interest in insuring that statements about modified risk 
     tobacco products are complete, accurate, and relate to the 
     overall disease risk of the product.
       (41) As the Federal Trade Commission has found, consumers 
     have misinterpreted advertisements in which one product is 
     claimed to be less harmful than a comparable product, even in 
     the presence of disclosures and advisories intended to 
     provide clarification.
       (42) Permitting manufacturers to make unsubstantiated 
     statements concerning modified risk tobacco products, whether 
     express or implied, even if accompanied by disclaimers would 
     be detrimental to the public health.
       (43) The only way to effectively protect the public health 
     from the dangers of unsubstantiated modified risk tobacco 
     products is to empower the Food and Drug Administration to 
     require that products that tobacco manufacturers sold or 
     distributed for risk reduction be approved in advance of 
     marketing, and to require that the evidence relied on to 
     support approval of these products is rigorous.

     SEC. __03. PURPOSE.

       The purposes of this subtitle are--
       (1) to provide authority to the Food and Drug 
     Administration to regulate tobacco products under the Federal 
     Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.), by 
     recognizing it as the primary Federal regulatory authority 
     with respect to the manufacture, marketing, and distribution 
     of tobacco products;
       (2) to ensure that the Food and Drug Administration has the 
     authority to address issues of particular concern to public 
     health officials, especially the use of tobacco by young 
     people and dependence on tobacco;
       (3) to authorize the Food and Drug Administration to set 
     national standards controlling the manufacture of tobacco 
     products and the identity, public disclosure, and amount of 
     ingredients used in such products;
       (4) to provide new and flexible enforcement authority to 
     ensure that there is effective oversight of the tobacco 
     industry's efforts to develop, introduce, and promote less 
     harmful tobacco products;
       (5) to vest the Food and Drug Administration with the 
     authority to regulate the levels of tar, nicotine, and other 
     harmful components of tobacco products;
       (6) in order to ensure that consumers are better informed, 
     to require tobacco product manufacturers to disclose research 
     which has not previously been made available, as well as 
     research generated in the future, relating to the health and 
     dependency effects or safety of tobacco products;
       (7) to continue to permit the sale of tobacco products to 
     adults in conjunction with measures to ensure that they are 
     not sold or accessible to underage purchasers;
       (8) to impose appropriate regulatory controls on the 
     tobacco industry;
       (9) to promote cessation to reduce disease risk and the 
     social costs associated with tobacco related diseases; and
       (10) to strengthen legislation against illicit trade in 
     tobacco products.

     SEC. __04. SCOPE AND EFFECT.

       (a) Intended Effect.--Nothing in this subtitle (or an 
     amendment made by this subtitle) shall be construed to--
       (1) establish a precedent with regard to any other 
     industry, situation, circumstance, or legal action; or
       (2) affect any action pending in Federal, State, or Tribal 
     court, or any agreement, consent decree, or contract of any 
     kind.
       (b) Agricultural Activities.--The provisions of this 
     subtitle (or an amendment made by this subtitle) which 
     authorize the Secretary to take certain actions with regard 
     to tobacco and tobacco products shall not be construed to 
     affect any authority of the Secretary of Agriculture under 
     existing law regarding the growing, cultivation, or curing of 
     raw tobacco.

     SEC. __05. SEVERABILITY.

       If any provision of this subtitle, the amendments made by 
     this subtitle, or the application of any provision of this 
     subtitle to any person or circumstance is held to be invalid, 
     the remainder of this subtitle, the amendments made by this 
     subtitle, and the application of the provisions of this 
     subtitle to any other person or circumstance shall not be 
     affected and shall continue to be enforced to the fullest 
     extent possible.

         CHAPTER 1--AUTHORITY OF THE FOOD AND DRUG ADMINISTRATION

     SEC. __11. AMENDMENT OF FEDERAL FOOD, DRUG, AND COSMETIC ACT.

       (a) Definition of Tobacco Products.--Section 201 of the 
     Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321) is 
     amended by adding at the end the following:
       ``(nn)(1) The term `tobacco product' means any product made 
     or derived from tobacco that is intended for human 
     consumption, including any component, part, or accessory of a 
     tobacco product (except for raw materials other than tobacco 
     used in manufacturing a component, part, or accessory of a 
     tobacco product).
       ``(2) The term `tobacco product' does not mean--
       ``(A) a product in the form of conventional food (including 
     water and chewing gum), a product represented for use as or 
     for use in a conventional food, or a product that is intended 
     for ingestion in capsule, tablet, softgel, or liquid form; or
       ``(B) an article that is approved or is regulated as a drug 
     by the Food and Drug Administration.
       ``(3) The products described in paragraph (2)(A) shall be 
     subject to chapter IV or chapter V of this Act and the 
     articles described in paragraph (2)(B) shall be subject to 
     chapter V of this Act.
       ``(4) A tobacco product may not be marketed in combination 
     with any other article or product regulated under this Act 
     (including a drug, biologic, food, cosmetics, medical device, 
     or a dietary supplement).''.
       (b) FDA Authority Over Tobacco Products.--The Federal Food, 
     Drug, and Cosmetic Act (21 U.S.C. 301 et seq.) is amended--
       (1) by redesignating chapter IX as chapter X;
       (2) by redesignating sections 901 through 907 as sections 
     1001 through 1007; and
       (3) by inserting after section 803 the following:

                     ``CHAPTER IX--TOBACCO PRODUCTS

     ``SEC. 900. DEFINITIONS.

       ``In this chapter:
       ``(1) Additive.--The term `additive' means any substance 
     the intended use of which results or may reasonably be 
     expected to result, directly or indirectly, in its becoming a 
     component or otherwise affecting the characteristic of any 
     tobacco product (including any substances intended for use as 
     a flavoring, coloring or in producing, manufacturing, 
     packing, processing, preparing, treating, packaging, 
     transporting, or holding), except that such term does not 
     include tobacco or a pesticide chemical residue in or on raw 
     tobacco or a pesticide chemical.
       ``(2) Brand.--The term `brand' means a variety of tobacco 
     product distinguished by the tobacco used, tar content, 
     nicotine content, flavoring used, size, filtration, or 
     packaging, logo, registered trademark or brand name, 
     identifiable pattern of colors, or any combination of such 
     attributes.
       ``(3) Cigarette.--The term `cigarette' has the meaning 
     given that term by section 3(1) of the Federal Cigarette 
     Labeling and Advertising Act (15 U.S.C. 1332(1)), but also 
     includes tobacco, in any form, that is functional in the 
     product, 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 or as roll-your-own tobacco.
       ``(4) Cigarette tobacco.--The term `cigarette tobacco' 
     means any product that consists of loose tobacco that is 
     intended for use by consumers in a cigarette. Unless 
     otherwise stated, the requirements for cigarettes shall also 
     apply to cigarette tobacco.
       ``(5) Commerce.--The term `commerce' has the meaning given 
     that term by section 3(2) of the Federal Cigarette Labeling 
     and Advertising Act (15 U.S.C. 1332(2)).
       ``(6) Counterfeit tobacco product.--The term `counterfeit 
     tobacco product' means a tobacco product (or the container or 
     labeling of such a product) that, without authorization, 
     bears the trademark, trade name, or other identifying mark, 
     imprint or device, or any likeness thereof, of a tobacco 
     product listed in a registration under section 905(i)(1).
       ``(7) Distributor.--The term `distributor' as regards a 
     tobacco product means any person who furthers the 
     distribution of a tobacco product, whether domestic or 
     imported, at any point from the original place

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     of manufacture to the person who sells or distributes the 
     product to individuals for personal consumption. Common 
     carriers are not considered distributors for purposes of this 
     chapter.
       ``(8) Illicit trade.--The term `illicit trade' means any 
     practice or conduct prohibited by law which relates to 
     production, shipment, receipt, possession, distribution, 
     sale, or purchase of tobacco products including any practice 
     or conduct intended to facilitate such activity.
       ``(9) Indian tribe.--The term `Indian tribe' has the 
     meaning given such term in section 4(e) of the Indian Self 
     Determination and Education Assistance Act (25 U.S.C. 
     450b(e)).
       ``(10) Little cigar.--The term `little cigar' has the 
     meaning given that term by section 3(7) of the Federal 
     Cigarette Labeling and Advertising Act (15 U.S.C. 1332(7)).
       ``(11) Nicotine.--The term `nicotine' means the chemical 
     substance named 3-(1-Methyl-2-pyrrolidinyl) pyridine or 
     C[10]H[14]N[2], including any salt or complex of nicotine.
       ``(12) Package.--The term `package' means a pack, box, 
     carton, or container of any kind or, if no other container, 
     any wrapping (including cellophane), in which a tobacco 
     product is offered for sale, sold, or otherwise distributed 
     to consumers.
       ``(13) Retailer.--The term `retailer' means any person who 
     sells tobacco products to individuals for personal 
     consumption, or who operates a facility where self-service 
     displays of tobacco products are permitted.
       ``(14) Roll-your-own tobacco.--The term `roll-your-own 
     tobacco' means any tobacco which, because of its appearance, 
     type, packaging, or labeling, is suitable for use and likely 
     to be offered to, or purchased by, consumers as tobacco for 
     making cigarettes.
       ``(15) Smoke constituent.--The term `smoke constituent' 
     means any chemical or chemical compound in mainstream or 
     sidestream tobacco smoke that either transfers from any 
     component of the cigarette to the smoke or that is formed by 
     the combustion or heating of tobacco, additives, or other 
     component of the tobacco product.
       ``(16) Smokeless tobacco.--The term `smokeless tobacco' 
     means any tobacco product that consists of cut, ground, 
     powdered, or leaf tobacco and that is intended to be placed 
     in the oral or nasal cavity.
       ``(17) State.--The term `State' means any State of the 
     United States and, for purposes of this chapter, includes the 
     District of Columbia, the Commonwealth of Puerto Rico, Guam, 
     the Virgin Islands, American Samoa, Wake Island, Midway 
     Islands, Kingman Reef, Johnston Atoll, the Northern Mariana 
     Islands, and any other trust territory or possession of the 
     United States.
       ``(18) Tobacco product manufacturer.--Term `tobacco product 
     manufacturer' means any person, including any repacker or 
     relabeler, who--
       ``(A) manufactures, fabricates, assembles, processes, or 
     labels a tobacco product; or
       ``(B) imports a finished cigarette or smokeless tobacco 
     product for sale or distribution in the United States.
       ``(19) United states.--The term `United States' means the 
     50 States of the United States of America and the District of 
     Columbia, the Commonwealth of Puerto Rico, Guam, the Virgin 
     Islands, American Samoa, Wake Island, Midway Islands, Kingman 
     Reef, Johnston Atoll, the Northern Mariana Islands, and any 
     other trust territory or possession of the United States.

     ``SEC. 901. FDA AUTHORITY OVER TOBACCO PRODUCTS.

        ``(a) In General.--Tobacco products shall be regulated by 
     the Secretary under this chapter and shall not be subject to 
     the provisions of chapter V, unless--
       ``(1) such products are intended for use in the diagnosis, 
     cure, mitigation, treatment, or prevention of disease (within 
     the meaning of section 201(g)(1)(B) or section 201(h)(2)); or
       ``(2) a claim is made for such products under section 
     201(g)(1)(C) or 201(h)(3);
     other than modified risk tobacco products approved in 
     accordance with section 911.
       ``(b) Applicability.--This chapter shall apply to all 
     tobacco products subject to the regulations referred to in 
     section __12 of the Family Smoking Prevention and Tobacco 
     Control Act, and to any other tobacco products that the 
     Secretary by regulation deems to be subject to this 
     chapter.
       ``(c) Scope.--
       ``(1) In general.--Nothing in this chapter, or any policy 
     issued or regulation promulgated thereunder, or the Family 
     Smoking Prevention and Tobacco Control Act, shall be 
     construed to affect the Secretary's authority over, or the 
     regulation of, products under this Act that are not tobacco 
     products under chapter V or any other chapter.
       ``(2) Limitation of authority.--
       ``(A) In general.--The provisions of this chapter shall not 
     apply to tobacco leaf that is not in the possession of a 
     manufacturer of tobacco products, or to the producers of 
     tobacco leaf, including tobacco growers, tobacco warehouses, 
     and tobacco grower cooperatives, nor shall any employee of 
     the Food and Drug Administration have any authority to enter 
     onto a farm owned by a producer of tobacco leaf without the 
     written consent of such producer.
       ``(B) Exception.--Notwithstanding any other provision of 
     this subparagraph, if a producer of tobacco leaf is also a 
     tobacco product manufacturer or controlled by a tobacco 
     product manufacturer, the producer shall be subject to this 
     chapter in the producer's capacity as a manufacturer.
       ``(C) Rule of construction.--Nothing in this chapter shall 
     be construed to grant the Secretary authority to promulgate 
     regulations on any matter that involves the production of 
     tobacco leaf or a producer thereof, other than activities by 
     a manufacturer affecting production.

     ``SEC. 902. ADULTERATED TOBACCO PRODUCTS.

       ``A tobacco product shall be deemed to be adulterated if--
       ``(1) it consists in whole or in part of any filthy, 
     putrid, or decomposed substance, or is otherwise contaminated 
     by any added poisonous or added deleterious substance that 
     may render the product injurious to health;
       ``(2) it has been prepared, packed, or held under 
     insanitary conditions whereby it may have been contaminated 
     with filth, or whereby it may have been rendered injurious to 
     health;
       ``(3) its package is composed, in whole or in part, of any 
     poisonous or deleterious substance which may render the 
     contents injurious to health;
       ``(4) it is, or purports to be or is represented as, a 
     tobacco product which is subject to a tobacco product 
     standard established under section 907 unless such tobacco 
     product is in all respects in conformity with such standard;
       ``(5)(A) it is required by section 910(a) to have premarket 
     approval and does not have an approved application in effect;
       ``(B) it is in violation of the order approving such an 
     application; or
       ``(6) the methods used in, or the facilities or controls 
     used for, its manufacture, packing or storage are not in 
     conformity with applicable requirements under section 
     906(e)(1) or an applicable condition prescribed by an order 
     under section 906(e)(2); or
       ``(7) it is in violation of section 911.

     ``SEC. 903. MISBRANDED TOBACCO PRODUCTS.

       ``(a) In General.--A tobacco product shall be deemed to be 
     misbranded--
       ``(1) if its labeling is false or misleading in any 
     particular;
       ``(2) if in package form unless it bears a label 
     containing--
       ``(A) the name and place of business of the tobacco product 
     manufacturer, packer, or distributor;
       ``(B) an accurate statement of the quantity of the contents 
     in terms of weight, measure, or numerical count;
       ``(C) an accurate statement of the percentage of the 
     tobacco used in the product that is domestically grown 
     tobacco and the percentage that is foreign grown tobacco; and
       ``(D) the statement required under section 921(a),

     except that under subparagraph (B) reasonable variations 
     shall be permitted, and exemptions as to small packages shall 
     be established, by regulations prescribed by the Secretary;
       ``(3) if any word, statement, or other information required 
     by or under authority of this chapter to appear on the label 
     or labeling is not prominently placed thereon with such 
     conspicuousness (as compared with other words, statements or 
     designs in the labeling) and in such terms as to render it 
     likely to be read and understood by the ordinary individual 
     under customary conditions of purchase and use;
       ``(4) if it has an established name, unless its label 
     bears, to the exclusion of any other nonproprietary name, its 
     established name prominently printed in type as required by 
     the Secretary by regulation;
       ``(5) if the Secretary has issued regulations requiring 
     that its labeling bear adequate directions for use, or 
     adequate warnings against use by children, that are necessary 
     for the protection of users unless its labeling conforms in 
     all respects to such regulations;
       ``(6) if it was manufactured, prepared, propagated, 
     compounded, or processed in any State in an establishment not 
     duly registered under section 905(b), 905(c), 905(d), or 
     905(h), if it was not included in a list required by section 
     905(i), if a notice or other information respecting it was 
     not provided as required by such section or section 905(j), 
     or if it does not bear such symbols from the uniform system 
     for identification of tobacco products prescribed under 
     section 905(e) as the Secretary by regulation requires;
       ``(7) if, in the case of any tobacco product distributed or 
     offered for sale in any State--
       ``(A) its advertising is false or misleading in any 
     particular; or
       ``(B) it is sold or distributed in violation of regulations 
     prescribed under section 906(d);
       ``(8) unless, in the case of any tobacco product 
     distributed or offered for sale in any State, the 
     manufacturer, packer, or distributor thereof includes in all 
     advertisements and other descriptive printed matter issued or 
     caused to be issued by the manufacturer, packer, or 
     distributor with respect to that tobacco product--
       ``(A) a true statement of the tobacco product's established 
     name as described in paragraph (4), printed prominently; and
       ``(B) a brief statement of--
       ``(i) the uses of the tobacco product and relevant 
     warnings, precautions, side effects, and contraindications; 
     and
       ``(ii) in the case of specific tobacco products made 
     subject to a finding by the Secretary after notice and 
     opportunity for comment that such action is appropriate to 
     protect the public health, a full description of the 
     components of such tobacco product or the formula showing 
     quantitatively each ingredient of such tobacco product to the 
     extent required in regulations which shall be issued by the 
     Secretary after an opportunity for a hearing;
       ``(9) if it is a tobacco product subject to a tobacco 
     product standard established under

[[Page S8247]]

     section 907, unless it bears such labeling as may be 
     prescribed in such tobacco product standard; or
       ``(10) if there was a failure or refusal--
       ``(A) to comply with any requirement prescribed under 
     section 904 or 908; or
       ``(B) to furnish any material or information required under 
     section 909.
       ``(b) Prior Approval of Label Statements.--The Secretary 
     may, by regulation, require prior approval of statements made 
     on the label of a tobacco product. No regulation issued under 
     this subsection may require prior approval by the Secretary 
     of the content of any advertisement, except for modified risk 
     tobacco products as provided in section 911. No advertisement 
     of a tobacco product published after the date of enactment of 
     the Family Smoking Prevention and Tobacco Control Act shall, 
     with respect to the language of label statements as 
     prescribed under section 4 of the Cigarette Labeling and 
     Advertising Act and section 3 of the Comprehensive Smokeless 
     Tobacco Health Education Act of 1986 or the regulations 
     issued under such sections, be subject to the provisions of 
     sections 12 through 15 of the Federal Trade Commission Act 
     (15 U.S.C. 52 through 55).

     ``SEC. 904. SUBMISSION OF HEALTH INFORMATION TO THE 
                   SECRETARY.

       ``(a) Requirement.--Not later than 6 months after the date 
     of enactment of the Family Smoking Prevention and Tobacco 
     Control Act, each tobacco product manufacturer or importer, 
     or agents thereof, shall submit to the Secretary the 
     following information:
       ``(1) A listing of all ingredients, including tobacco, 
     substances, compounds, and additives that are, as of such 
     date, added by the manufacturer to the tobacco, paper, 
     filter, or other part of each tobacco product by brand and by 
     quantity in each brand and subbrand.
       ``(2) A description of the content, delivery, and form of 
     nicotine in each tobacco product measured in milligrams of 
     nicotine in accordance with regulations promulgated by the 
     Secretary in accordance with section 4(a)(4) of the Federal 
     Cigarette Labeling and Advertising Act.
       ``(3) A listing of all constituents, including smoke 
     constituents as applicable, identified by the Secretary as 
     harmful or potentially harmful to health in each tobacco 
     product, and as applicable in the smoke of each tobacco 
     product, by brand and by quantity in each brand and subbrand. 
     Effective beginning 2 years after the date of enactment of 
     this chapter, the manufacturer, importer, or agent shall 
     comply with regulations promulgated under section 915 in 
     reporting information under this paragraph, where applicable.
       ``(4) All documents developed after the date of enactment 
     of the Family Smoking Prevention and Tobacco Control Act that 
     relate to health, toxicological, behavioral, or physiologic 
     effects of current or future tobacco products, their 
     constituents (including smoke constituents), ingredients, 
     components, and additives.
       ``(b) Data Submission.--At the request of the Secretary, 
     each tobacco product manufacturer or importer of tobacco 
     products, or agents thereof, shall submit the following:
       ``(1) Any or all documents (including underlying scientific 
     information) relating to research activities, and research 
     findings, conducted, supported, or possessed by the 
     manufacturer (or agents thereof) on the health, 
     toxicological, behavioral, or physiologic effects of tobacco 
     products and their constituents (including smoke 
     constituents), ingredients, components, and additives.
       ``(2) Any or all documents (including underlying scientific 
     information) relating to research activities, and research 
     findings, conducted, supported, or possessed by the 
     manufacturer (or agents thereof) that relate to the issue of 
     whether a reduction in risk to health from tobacco products 
     can occur upon the employment of technology available or 
     known to the manufacturer.
       ``(3) Any or all documents (including underlying scientific 
     or financial information) relating to marketing research 
     involving the use of tobacco products or marketing practices 
     and the effectiveness of such practices used by tobacco 
     manufacturers and distributors.

     An importer of a tobacco product not manufactured in the 
     United States shall supply the information required of a 
     tobacco product manufacturer under this subsection.
       ``(c) Time for Submission.--
       ``(1) In general.--At least 90 days prior to the delivery 
     for introduction into interstate commerce of a tobacco 
     product not on the market on the date of enactment of the 
     Family Smoking Prevention and Tobacco Control Act, the 
     manufacturer of such product shall provide the information 
     required under subsection (a).
       ``(2) Disclosure of additive.--If at any time a tobacco 
     product manufacturer adds to its tobacco products a new 
     tobacco additive or increases the quantity of an existing 
     tobacco additive, the manufacturer shall, except as provided 
     in paragraph (3), at least 90 days prior to such action so 
     advise the Secretary in writing.
       ``(3) Disclosure of other actions.--If at any time a 
     tobacco product manufacturer eliminates or decreases an 
     existing additive, or adds or increases an additive that has 
     by regulation been designated by the Secretary as an additive 
     that is not a human or animal carcinogen, or otherwise 
     harmful to health under intended conditions of use, the 
     manufacturer shall within 60 days of such action so advise 
     the Secretary in writing.
       ``(d) Data List.--
       ``(1) In general.--Not later than 3 years after the date of 
     enactment of the Family Smoking Prevention and Tobacco 
     Control Act, and annually thereafter, the Secretary shall 
     publish in a format that is understandable and not misleading 
     to a lay person, and place on public display (in a manner 
     determined by the Secretary) the list established under 
     subsection (e).
       ``(2) Consumer research.--The Secretary shall conduct 
     periodic consumer research to ensure that the list published 
     under paragraph (1) is not misleading to lay persons. Not 
     later than 5 years after the date of enactment of the Family 
     Smoking Prevention and Tobacco Control Act, the Secretary 
     shall submit to the appropriate committees of Congress a 
     report on the results of such research, together with 
     recommendations on whether such publication should be 
     continued or modified.
       ``(e) Data Collection.--Not later than 12 months after the 
     date of enactment of the Family Smoking Prevention and 
     Tobacco Control Act, the Secretary shall establish a list of 
     harmful and potentially harmful constituents, including smoke 
     constituents, to health in each tobacco product by brand and 
     by quantity in each brand and subbrand. The Secretary shall 
     publish a public notice requesting the submission by 
     interested persons of scientific and other information 
     concerning the harmful and potentially harmful constituents 
     in tobacco products and tobacco smoke.

     ``SEC. 905. ANNUAL REGISTRATION.

       ``(a) Definitions.--In this section:
       ``(1) Manufacture, preparation, compounding, or 
     processing.--The term `manufacture, preparation, compounding, 
     or processing' shall include repackaging or otherwise 
     changing the container, wrapper, or labeling of any tobacco 
     product package in furtherance of the distribution of the 
     tobacco product from the original place of manufacture to the 
     person who makes final delivery or sale to the ultimate 
     consumer or user.
       ``(2) Name.--The term `name' shall include in the case of a 
     partnership the name of each partner and, in the case of a 
     corporation, the name of each corporate officer and director, 
     and the State of incorporation.
       ``(b) Registration by Owners and Operators.--On or before 
     December 31 of each year every person who owns or operates 
     any establishment in any State engaged in the manufacture, 
     preparation, compounding, or processing of a tobacco product 
     or tobacco products shall register with the Secretary the 
     name, places of business, and all such establishments of that 
     person.
       ``(c) Registration of New Owners and Operators.--Every 
     person upon first engaging in the manufacture, preparation, 
     compounding, or processing of a tobacco product or tobacco 
     products in any establishment owned or operated in any State 
     by that person shall immediately register with the Secretary 
     that person's name, place of business, and such 
     establishment.
       ``(d) Registration of Added Establishments.--Every person 
     required to register under subsection (b) or (c) shall 
     immediately register with the Secretary any additional 
     establishment which that person owns or operates in any State 
     and in which that person begins the manufacture, preparation, 
     compounding, or processing of a tobacco product or tobacco 
     products.
       ``(e) Uniform Product Identification System.--The Secretary 
     may by regulation prescribe a uniform system for the 
     identification of tobacco products and may require that 
     persons who are required to list such tobacco products under 
     subsection (i) shall list such tobacco products in accordance 
     with such system.
       ``(f) Public Access to Registration Information.--The 
     Secretary shall make available for inspection, to any person 
     so requesting, any registration filed under this section.
       ``(g) Biennial Inspection of Registered Establishments.--
     Every establishment in any State registered with the 
     Secretary under this section shall be subject to inspection 
     under section 704, and every such establishment engaged in 
     the manufacture, compounding, or processing of a tobacco 
     product or tobacco products shall be so inspected by 1 or 
     more officers or employees duly designated by the Secretary 
     at least once in the 2-year period beginning with the date of 
     registration of such establishment under this section and at 
     least once in every successive 2-year period thereafter.
       ``(h) Foreign Establishments Shall Register.--Any 
     establishment within any foreign country engaged in the 
     manufacture, preparation, compounding, or processing of a 
     tobacco product or tobacco products, shall register under 
     this section under regulations promulgated by the Secretary. 
     Such regulations shall require such establishment to provide 
     the information required by subsection (i) of this section 
     and shall include provisions for registration of any such 
     establishment upon condition that adequate and effective 
     means are available, by arrangement with the government of 
     such foreign country or otherwise, to enable the Secretary to 
     determine from time to time whether tobacco products 
     manufactured, prepared, compounded, or processed in such 
     establishment, if imported or offered for import into the 
     United States, shall be refused admission on any of the 
     grounds set forth in section 801(a).
       ``(i) Registration Information.--
       ``(1) Product list.--Every person who registers with the 
     Secretary under subsection

[[Page S8248]]

     (b), (c), (d), or (h) shall, at the time of registration 
     under any such subsection, file with the Secretary a list of 
     all tobacco products which are being manufactured, prepared, 
     compounded, or processed by that person for commercial 
     distribution and which has not been included in any list of 
     tobacco products filed by that person with the Secretary 
     under this paragraph or paragraph (2) before such time of 
     registration. Such list shall be prepared in such form and 
     manner as the Secretary may prescribe and shall be 
     accompanied by--
       ``(A) in the case of a tobacco product contained in the 
     applicable list with respect to which a tobacco product 
     standard has been established under section 907 or which is 
     subject to section 910, a reference to the authority for the 
     marketing of such tobacco product and a copy of all labeling 
     for such tobacco product;
       ``(B) in the case of any other tobacco product contained in 
     an applicable list, a copy of all consumer information and 
     other labeling for such tobacco product, a representative 
     sampling of advertisements for such tobacco product, and, 
     upon request made by the Secretary for good cause, a copy 
     of all advertisements for a particular tobacco product; 
     and
       ``(C) if the registrant filing a list has determined that a 
     tobacco product contained in such list is not subject to a 
     tobacco product standard established under section 907, a 
     brief statement of the basis upon which the registrant made 
     such determination if the Secretary requests such a statement 
     with respect to that particular tobacco product.
       ``(2) Biannual report of any change in product list.--Each 
     person who registers with the Secretary under this section 
     shall report to the Secretary once during the month of June 
     of each year and once during the month of December of each 
     year the following:
       ``(A) A list of each tobacco product introduced by the 
     registrant for commercial distribution which has not been 
     included in any list previously filed by that person with the 
     Secretary under this subparagraph or paragraph (1). A list 
     under this subparagraph shall list a tobacco product by its 
     established name and shall be accompanied by the other 
     information required by paragraph (1).
       ``(B) If since the date the registrant last made a report 
     under this paragraph that person has discontinued the 
     manufacture, preparation, compounding, or processing for 
     commercial distribution of a tobacco product included in a 
     list filed under subparagraph (A) or paragraph (1), notice of 
     such discontinuance, the date of such discontinuance, and the 
     identity of its established name.
       ``(C) If since the date the registrant reported under 
     subparagraph (B) a notice of discontinuance that person has 
     resumed the manufacture, preparation, compounding, or 
     processing for commercial distribution of the tobacco product 
     with respect to which such notice of discontinuance was 
     reported, notice of such resumption, the date of such 
     resumption, the identity of such tobacco product by 
     established name, and other information required by paragraph 
     (1), unless the registrant has previously reported such 
     resumption to the Secretary under this subparagraph.
       ``(D) Any material change in any information previously 
     submitted under this paragraph or paragraph (1).
       ``(j) Report Preceding Introduction of Certain 
     Substantially-Equivalent Products Into Interstate Commerce.--
       ``(1) In general.--Each person who is required to register 
     under this section and who proposes to begin the introduction 
     or delivery for introduction into interstate commerce for 
     commercial distribution of a tobacco product intended for 
     human use that was not commercially marketed (other than for 
     test marketing) in the United States as of June 1, 2003, 
     shall, at least 90 days prior to making such introduction or 
     delivery, report to the Secretary (in such form and manner as 
     the Secretary shall prescribe)--
       ``(A) the basis for such person's determination that the 
     tobacco product is substantially equivalent, within the 
     meaning of section 910, to a tobacco product commercially 
     marketed (other than for test marketing) in the United States 
     as of June 1, 2003, that is in compliance with the 
     requirements of this Act; and
       ``(B) action taken by such person to comply with the 
     requirements under section 907 that are applicable to the 
     tobacco product.
       ``(2) Application to certain post june 1, 2003 products.--A 
     report under this subsection for a tobacco product that was 
     first introduced or delivered for introduction into 
     interstate commerce for commercial distribution in the United 
     States after June 1, 2003, and prior to the date that is 15 
     months after the date of enactment of the Family Smoking 
     Prevention and Tobacco Control Act shall be submitted to the 
     Secretary not later than 15 months after such date of 
     enactment.
       ``(3) Exemptions.--
       ``(A) In general.--The Secretary may by regulation, exempt 
     from the requirements of this subsection tobacco products 
     that are modified by adding or deleting a tobacco additive, 
     or increasing or decreasing the quantity of an existing 
     tobacco additive, if the Secretary determines that--
       ``(i) such modification would be a minor modification of a 
     tobacco product authorized for sale under this Act;
       ``(ii) a report under this subsection is not necessary to 
     ensure that permitting the tobacco product to be marketed 
     would be appropriate for protection of the public health; and
       ``(iii) an exemption is otherwise appropriate.
       ``(B) Regulations.--Not later than 9 months after the date 
     of enactment of the Family Smoking Prevention and Tobacco 
     Control Act, the Secretary shall issue regulations to 
     implement this paragraph.

     ``SEC. 906. GENERAL PROVISIONS RESPECTING CONTROL OF TOBACCO 
                   PRODUCTS.

       ``(a) In General.--Any requirement established by or under 
     section 902, 903, 905, or 909 applicable to a tobacco product 
     shall apply to such tobacco product until the applicability 
     of the requirement to the tobacco product has been changed by 
     action taken under section 907, section 910, section 911, or 
     subsection (d) of this section, and any requirement 
     established by or under section 902, 903, 905, or 909 which 
     is inconsistent with a requirement imposed on such tobacco 
     product under section 907, section 910, section 911, or 
     subsection (d) of this section shall not apply to such 
     tobacco product.
       ``(b) Information on Public Access and Comment.--Each 
     notice of proposed rulemaking under section 907, 908, 909, 
     910, or 911 or under this section, any other notice which is 
     published in the Federal Register with respect to any other 
     action taken under any such section and which states the 
     reasons for such action, and each publication of findings 
     required to be made in connection with rulemaking under any 
     such section shall set forth--
       ``(1) the manner in which interested persons may examine 
     data and other information on which the notice or findings is 
     based; and
       ``(2) the period within which interested persons may 
     present their comments on the notice or findings (including 
     the need therefore) orally or in writing, which period shall 
     be at least 60 days but may not exceed 90 days unless the 
     time is extended by the Secretary by a notice published in 
     the Federal Register stating good cause therefore.
       ``(c) Limited Confidentiality of Information.--Any 
     information reported to or otherwise obtained by the 
     Secretary or the Secretary's representative under section 
     903, 904, 907, 908, 909, 910, 911, or 704, or under 
     subsection (e) or (f) of this section, which is exempt from 
     disclosure under subsection (a) of section 552 of title 5, 
     United States Code, by reason of subsection (b)(4) of that 
     section shall be considered confidential and shall not be 
     disclosed, except that the information may be disclosed to 
     other officers or employees concerned with carrying out this 
     chapter, or when relevant in any proceeding under this 
     chapter.
       ``(d) Restrictions.--
       ``(1) In general.--The Secretary may by regulation require 
     restrictions on the sale and distribution of a tobacco 
     product, including restrictions on the access to, and the 
     advertising and promotion of, the tobacco product, if the 
     Secretary determines that such regulation would be 
     appropriate for the protection of the public health. The 
     Secretary may by regulation impose restrictions on the 
     advertising and promotion of a tobacco product consistent 
     with and to full extent permitted by the first amendment to 
     the Constitution. The finding as to whether such regulation 
     would be appropriate for the protection of the public health 
     shall be determined with respect to the risks and benefits to 
     the population as a whole, including users and non-users of 
     the tobacco product, and taking into account--
       ``(A) the increased or decreased likelihood that existing 
     users of tobacco products will stop using such products; and
       ``(B) the increased or decreased likelihood that those who 
     do not use tobacco products will start using such products.

     No such regulation may require that the sale or distribution 
     of a tobacco product be limited to the written or oral 
     authorization of a practitioner licensed by law to prescribe 
     medical products.
       ``(2) Label statements.--The label of a tobacco product 
     shall bear such appropriate statements of the restrictions 
     required by a regulation under subsection (a) as the 
     Secretary may in such regulation prescribe.
       ``(3) Limitations.--
       ``(A) In general.--No restrictions under paragraph (1) 
     may--
       ``(i) prohibit the sale of any tobacco product in face-to-
     face transactions by a specific category of retail outlets; 
     or
       ``(ii) establish a minimum age of sale of tobacco products 
     to any person older than 18 years of age.
       ``(B) Matchbooks.--For purposes of any regulations issued 
     by the Secretary, matchbooks of conventional size containing 
     not more than 20 paper matches, and which are customarily 
     given away for free with the purchase of tobacco products 
     shall be considered as adult written publications which shall 
     be permitted to contain advertising. Notwithstanding the 
     preceding sentence, if the Secretary finds that such 
     treatment of matchbooks is not appropriate for the protection 
     of the public health, the Secretary may determine by 
     regulation that matchbooks shall not be considered adult 
     written publications.
       ``(e) Good Manufacturing Practice Requirements.--
       ``(1) Methods, facilities, and controls to conform.--
       ``(A) In general.--The Secretary may, in accordance with 
     subparagraph (B), prescribe regulations (which may differ 
     based on the type of tobacco product involved) requiring that 
     the methods used in, and the facilities

[[Page S8249]]

     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 assure that the public health is 
     protected and that the tobacco product is in compliance with 
     this chapter. Good manufacturing practices may include the 
     testing of raw tobacco for pesticide chemical residues 
     regardless of whether a tolerance for such chemical residues 
     has been established.
       ``(B) Requirements.--The Secretary shall--
       ``(i) before promulgating any regulation under subparagraph 
     (A), afford the Tobacco Products Scientific Advisory 
     Committee an opportunity to submit recommendations with 
     respect to the regulation proposed to be promulgated;
       ``(ii) before promulgating any regulation under 
     subparagraph (A), afford opportunity for an oral hearing;
       ``(iii) provide the advisory committee a reasonable time to 
     make its recommendation with respect to proposed regulations 
     under subparagraph (A); and
       ``(iv) in establishing the effective date of a regulation 
     promulgated under this subsection, take into account the 
     differences in the manner in which the different types of 
     tobacco products have historically been produced, the 
     financial resources of the different tobacco product 
     manufacturers, and the state of their existing manufacturing 
     facilities, and shall provide for a reasonable period of time 
     for such manufacturers to conform to good manufacturing 
     practices.
       ``(2) Exemptions; variances.--
       ``(A) Petition.--Any person subject to any requirement 
     prescribed under paragraph (1) may petition the Secretary for 
     a permanent or temporary 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--
       ``(i) 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 assure that the tobacco product will be in 
     compliance with this chapter;
       ``(ii) 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 tobacco product in 
     lieu of the methods, facilities, and controls prescribed by 
     the requirement; and
       ``(iii) contain such other information as the Secretary 
     shall prescribe.
       ``(B) Referral to the tobacco products scientific advisory 
     committee.--The Secretary may refer to the Tobacco Products 
     Scientific Advisory Committee any petition submitted under 
     subparagraph (A). The Tobacco Products Scientific Advisory 
     Committee shall report its recommendations to the Secretary 
     with respect to a petition referred to it within 60 days 
     after the date of the petition's referral. Within 60 days 
     after--
       ``(i) the date the petition was submitted to the Secretary 
     under subparagraph (A); or
       ``(ii) the day after the petition was referred to the 
     Tobacco Products Scientific Advisory Committee,

     whichever occurs later, the Secretary shall by order either 
     deny the petition or approve it.
       ``(C) Approval.--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 tobacco product will be in compliance 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 tobacco product 
     in lieu of the methods, controls, and facilities prescribed 
     by the requirement are sufficient to assure that the tobacco 
     product will be in compliance with this chapter.
       ``(D) 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 assure that the tobacco 
     product will be in compliance with this chapter.
       ``(E) Hearing.--After the issuance of an order under 
     subparagraph (B) respecting a petition, the petitioner shall 
     have an opportunity for an informal hearing on such order.
       ``(3) Compliance.--Compliance with requirements under this 
     subsection shall not be required before the period ending 3 
     years after the date of enactment of the Family Smoking 
     Prevention and Tobacco Control Act.
       ``(f) Research and Development.--The Secretary may enter 
     into contracts for research, testing, and demonstrations 
     respecting tobacco products and may obtain tobacco products 
     for research, testing, and demonstration purposes without 
     regard to section 3324(a) and (b) of title 31, United States 
     Code, and section 5 of title 41, United States Code.

     ``SEC. 907. TOBACCO PRODUCT STANDARDS.

       ``(a) In General.--
       ``(1) Special rule for cigarettes.--A cigarette or any of 
     its component parts (including the tobacco, filter, or paper) 
     shall not contain, as a constituent (including a smoke 
     constituent) or additive, an artificial or natural flavor 
     (other than tobacco or menthol) or an herb or spice, 
     including strawberry, grape, orange, clove, cinnamon, 
     pineapple, vanilla, coconut, licorice, cocoa, chocolate, 
     cherry, or coffee, that is a characterizing flavor of the 
     tobacco product or tobacco smoke. Nothing in this 
     subparagraph shall be construed to limit the Secretary's 
     authority to take action under this section or other sections 
     of this Act applicable to menthol or any artificial or 
     natural flavor, herb, or spice not specified in this 
     paragraph.
       ``(2) Revision of tobacco product standards.--The Secretary 
     may revise the tobacco product standards in paragraph (1) in 
     accordance with subsection (b).
       ``(3) Tobacco product standards.--The Secretary may adopt 
     tobacco product standards in addition to those in paragraph 
     (1) if the Secretary finds that a tobacco product standard is 
     appropriate for the protection of the public health. This 
     finding shall be determined with respect to the risks and 
     benefits to the population as a whole, including users and 
     non-users of the tobacco product, and taking into account--
       ``(A) the increased or decreased likelihood that existing 
     users of tobacco products will stop using such products; and
       ``(B) the increased or decreased likelihood that those who 
     do not use tobacco products will start using such products.
       ``(4) Content of tobacco product standards.--A tobacco 
     product standard established under this section for a tobacco 
     product--
       ``(A) shall include provisions that are appropriate for the 
     protection of the public health, including provisions, where 
     appropriate--
       ``(i) for the reduction of nicotine yields of the product;
       ``(ii) for the reduction or elimination of other 
     constituents, including smoke constituents, or harmful 
     components of the product; or
       ``(iii) relating to any other requirement under (B);
       ``(B) shall, where appropriate for the protection of the 
     public health, include--
       ``(i) provisions respecting the construction, components, 
     ingredients, additives, constituents, including smoke 
     constituents, and properties of the tobacco product;
       ``(ii) provisions for the testing (on a sample basis or, if 
     necessary, on an individual basis) of the tobacco product;
       ``(iii) provisions for the measurement of the tobacco 
     product characteristics of the tobacco product;
       ``(iv) provisions requiring that the results of each or of 
     certain of the tests of the tobacco product required to be 
     made under clause (ii) show that the tobacco product is in 
     conformity with the portions of the standard for which the 
     test or tests were required; and
       ``(v) a provision requiring that the sale and distribution 
     of the tobacco product be restricted but only to the extent 
     that the sale and distribution of a tobacco product may be 
     restricted under a regulation under section 906(d); and
       ``(C) shall, where appropriate, require the use and 
     prescribe the form and content of labeling for the proper use 
     of the tobacco product.
       ``(5) Periodic re-evaluation of tobacco product 
     standards.--The Secretary shall provide for periodic 
     evaluation of tobacco product standards established under 
     this section to determine whether such standards should be 
     changed to reflect new medical, scientific, or other 
     technological data. The Secretary may provide for testing 
     under paragraph (4)(B) by any person.
       ``(6) Involvement of other agencies; informed persons.--In 
     carrying out duties under this section, the Secretary shall 
     endeavor to--
       ``(A) use personnel, facilities, and other technical 
     support available in other Federal agencies;
       ``(B) consult with other Federal agencies concerned with 
     standard-setting and other nationally or internationally 
     recognized standard-setting entities; and
       ``(C) invite appropriate participation, through joint or 
     other conferences, workshops, or other means, by informed 
     persons representative of scientific, professional, industry, 
     agricultural, or consumer organizations who in the 
     Secretary's judgment can make a significant contribution.
       ``(b) Establishment of Standards.--
       ``(1) Notice.--
       ``(A) In general.--The Secretary shall publish in the 
     Federal Register a notice of proposed rulemaking for the 
     establishment, amendment, or revocation of any tobacco 
     product standard.
       ``(B) Requirements of notice.--A notice of proposed 
     rulemaking for the establishment or amendment of a tobacco 
     product standard for a tobacco product shall--
       ``(i) set forth a finding with supporting justification 
     that the tobacco product standard is appropriate for the 
     protection of the public health;
       ``(ii) set forth proposed findings with respect to the risk 
     of illness or injury that the tobacco product standard is 
     intended to reduce or eliminate; and
       ``(iii) invite interested persons to submit an existing 
     tobacco product standard for the tobacco product, including a 
     draft or proposed tobacco product standard, for consideration 
     by the Secretary.

[[Page S8250]]

       ``(C) Standard.--Upon a determination by the Secretary that 
     an additive, constituent (including smoke constituent), or 
     other component of the product that is the subject of the 
     proposed tobacco product standard is harmful, it shall be the 
     burden of any party challenging the proposed standard to 
     prove that the proposed standard will not reduce or eliminate 
     the risk of illness or injury.
       ``(D) Finding.--A notice of proposed rulemaking for the 
     revocation of a tobacco product standard shall set forth a 
     finding with supporting justification that the tobacco 
     product standard is no longer appropriate for the protection 
     of the public health.
       ``(E) Consideration by secretary.--The Secretary shall 
     consider all information submitted in connection with a 
     proposed standard, including information concerning the 
     countervailing effects of the tobacco product standard on the 
     health of adolescent tobacco users, adult tobacco users, or 
     non-tobacco users, such as the creation of a significant 
     demand for contraband or other tobacco products that do not 
     meet the requirements of this chapter and the significance of 
     such demand, and shall issue the standard if the Secretary 
     determines that the standard would be appropriate for the 
     protection of the public health.
       ``(F) Comment.--The Secretary shall provide for a comment 
     period of not less than 60 days.
       ``(2) Promulgation.--
       ``(A) In general.--After the expiration of the period for 
     comment on a notice of proposed rulemaking published under 
     paragraph (1) respecting a tobacco product standard and after 
     consideration of such comments and any report from the 
     Tobacco Products Scientific Advisory Committee, the Secretary 
     shall--
       ``(i) promulgate a regulation establishing a tobacco 
     product standard and publish in the Federal Register findings 
     on the matters referred to in paragraph (1); or
       ``(ii) publish a notice terminating the proceeding for the 
     development of the standard together with the reasons for 
     such termination.
       ``(B) Effective date.--A regulation establishing a tobacco 
     product standard shall set forth the date or dates upon which 
     the standard shall take effect, but no such regulation may 
     take effect before 1 year after the date of its publication 
     unless the Secretary determines that an earlier effective 
     date is necessary for the protection of the public health. 
     Such date or dates shall be established so as to minimize, 
     consistent with the public health, economic loss to, and 
     disruption or dislocation of, domestic and international 
     trade.
       ``(3) Power reserved to congress.--Because of the 
     importance of a decision of the Secretary to issue a 
     regulation establishing a tobacco product standard--
       ``(A) banning all cigarettes, all smokeless tobacco 
     products, all little cigars, all cigars other than little 
     cigars, all pipe tobacco, or all roll your own tobacco 
     products; or
       ``(B) requiring the reduction of nicotine yields of a 
     tobacco product to zero,
     Congress expressly reserves to itself such power.
       ``(4) Amendment; revocation.--
       ``(A) Authority.--The Secretary, upon the Secretary's own 
     initiative or upon petition of an interested person may by a 
     regulation, promulgated in accordance with the requirements 
     of paragraphs (1) and (2)(B), amend or revoke a tobacco 
     product standard.
       ``(B) Effective date.--The Secretary may declare a proposed 
     amendment of a tobacco product standard to be effective on 
     and after its publication in the Federal Register and until 
     the effective date of any final action taken on such 
     amendment if the Secretary determines that making it so 
     effective is in the public interest.
       ``(5) Reference to advisory committee.--The Secretary may--
       ``(A) on the Secretary's own initiative, refer a proposed 
     regulation for the establishment, amendment, or revocation of 
     a tobacco product standard; or
       ``(B) upon the request of an interested person which 
     demonstrates good cause for referral and which is made before 
     the expiration of the period for submission of comments on 
     such proposed regulation,

     refer such proposed regulation to the Tobacco Products 
     Scientific Advisory Committee, for a report and 
     recommendation with respect to any matter involved in the 
     proposed regulation which requires the exercise of scientific 
     judgment. If a proposed regulation is referred under this 
     paragraph to the Tobacco Products Scientific Advisory 
     Committee, the Secretary shall provide the advisory committee 
     with the data and information on which such proposed 
     regulation is based. The Tobacco Products Scientific Advisory 
     Committee shall, within 60 days after the referral of a 
     proposed regulation and after independent study of the data 
     and information furnished to it by the Secretary and other 
     data and information before it, submit to the Secretary a 
     report and recommendation respecting such regulation, 
     together with all underlying data and information and a 
     statement of the reason or basis for the recommendation. A 
     copy of such report and recommendation shall be made public 
     by the Secretary.

     ``SEC. 908. NOTIFICATION AND OTHER REMEDIES.

       ``(a) Notification.--If the Secretary determines that--
       ``(1) a tobacco product which is introduced or delivered 
     for introduction into interstate commerce for commercial 
     distribution presents an unreasonable risk of substantial 
     harm to the public health; and
       ``(2) notification under this subsection is necessary to 
     eliminate the unreasonable risk of such harm and no more 
     practicable means is available under the provisions of this 
     chapter (other than this section) to eliminate such risk,

     the Secretary may issue such order as may be necessary to 
     assure that adequate notification is provided in an 
     appropriate form, by the persons and means best suited under 
     the circumstances involved, to all persons who should 
     properly receive such notification in order to eliminate such 
     risk. The Secretary may order notification by any appropriate 
     means, including public service announcements. Before issuing 
     an order under this subsection, the Secretary shall consult 
     with the persons who are to give notice under the order.
       ``(b) No Exemption From Other Liability.--Compliance with 
     an order issued under this section shall not relieve any 
     person from liability under Federal or State law. In awarding 
     damages for economic loss in an action brought for the 
     enforcement of any such liability, the value to the plaintiff 
     in such action of any remedy provided under such order shall 
     be taken into account.
       ``(c) Recall Authority.--
       ``(1) In general.--If the Secretary finds that there is a 
     reasonable probability that a tobacco product contains a 
     manufacturing or other defect not ordinarily contained in 
     tobacco products on the market that would cause serious, 
     adverse health consequences or death, the Secretary shall 
     issue an order requiring the appropriate person (including 
     the manufacturers, importers, distributors, or retailers of 
     the tobacco product) to immediately cease distribution of 
     such tobacco product. The order shall provide the person 
     subject to the order with an opportunity for an informal 
     hearing, to be held not later than 10 days after the date of 
     the issuance of the order, on the actions required by the 
     order and on whether the order should be amended to require a 
     recall of such tobacco product. If, after providing an 
     opportunity for such a hearing, the Secretary determines that 
     inadequate grounds exist to support the actions required by 
     the order, the Secretary shall vacate the order.
       ``(2) Amendment of order to require recall.--
       ``(A) In general.--If, after providing an opportunity for 
     an informal hearing under paragraph (1), the Secretary 
     determines that the order should be amended to include a 
     recall of the tobacco product with respect to which the order 
     was issued, the Secretary shall, except as provided in 
     subparagraph (B), amend the order to require a recall. The 
     Secretary shall specify a timetable in which the tobacco 
     product recall will occur and shall require periodic reports 
     to the Secretary describing the progress of the recall.
       ``(B) Notice.--An amended order under subparagraph (A)--
       ``(i) shall not include recall of a tobacco product from 
     individuals; and
       ``(ii) shall provide for notice to persons subject to the 
     risks associated with the use of such tobacco product.

     In providing the notice required by clause (ii), the 
     Secretary may use the assistance of retailers and other 
     persons who distributed such tobacco product. If a 
     significant number of such persons cannot be identified, the 
     Secretary shall notify such persons under section 705(b).
       ``(3) Remedy not exclusive.--The remedy provided by this 
     subsection shall be in addition to remedies provided by 
     subsection (a) of this section.

     ``SEC. 909. RECORDS AND REPORTS ON TOBACCO PRODUCTS.

       ``(a) In General.--Every person who is a tobacco product 
     manufacturer or importer of a tobacco product shall establish 
     and maintain such records, make such reports, and provide 
     such information, as the Secretary may by regulation 
     reasonably require to assure that such tobacco product is not 
     adulterated or misbranded and to otherwise protect public 
     health. Regulations prescribed under the preceding sentence--
       ``(1) may require a tobacco product manufacturer or 
     importer to report to the Secretary whenever the manufacturer 
     or importer receives or otherwise becomes aware of 
     information that reasonably suggests that one of its marketed 
     tobacco products may have caused or contributed to a serious 
     unexpected adverse experience associated with the use of the 
     product or any significant increase in the frequency of a 
     serious, expected adverse product experience;
       ``(2) shall require reporting of other significant adverse 
     tobacco product experiences as determined by the Secretary to 
     be necessary to be reported;
       ``(3) shall not impose requirements unduly burdensome to a 
     tobacco product manufacturer or importer, taking into account 
     the cost of complying with such requirements and the need for 
     the protection of the public health and the implementation 
     of this chapter;
       ``(4) when prescribing the procedure for making requests 
     for reports or information, shall require that each request 
     made under such regulations for submission of a report or 
     information to the Secretary state the reason or purpose for 
     such request and identify to the fullest extent practicable 
     such report or information;
       ``(5) when requiring submission of a report or information 
     to the Secretary, shall state the reason or purpose for the 
     submission of

[[Page S8251]]

     such report or information and identify to the fullest extent 
     practicable such report or information; and
       ``(6) may not require that the identity of any patient or 
     user be disclosed in records, reports, or information 
     required under this subsection unless required for the 
     medical welfare of an individual, to determine risks to 
     public health of a tobacco product, or to verify a record, 
     report, or information submitted under this chapter.

     In prescribing regulations under this subsection, the 
     Secretary shall have due regard for the professional ethics 
     of the medical profession and the interests of patients. The 
     prohibitions of paragraph (6) continue to apply to records, 
     reports, and information concerning any individual who has 
     been a patient, irrespective of whether or when he ceases to 
     be a patient.
       ``(b) Reports of Removals and Corrections.--
       ``(1) In general.--Except as provided in paragraph (2), the 
     Secretary shall by regulation require a tobacco product 
     manufacturer or importer of a tobacco product to report 
     promptly to the Secretary any corrective action taken or 
     removal from the market of a tobacco product undertaken by 
     such manufacturer or importer if the removal or correction 
     was undertaken--
       ``(A) to reduce a risk to health posed by the tobacco 
     product; or
       ``(B) to remedy a violation of this chapter caused by the 
     tobacco product which may present a risk to health.

     A tobacco product manufacturer or importer of a tobacco 
     product who undertakes a corrective action or removal from 
     the market of a tobacco product which is not required to be 
     reported under this subsection shall keep a record of such 
     correction or removal.
       ``(2) Exception.--No report of the corrective action or 
     removal of a tobacco product may be required under paragraph 
     (1) if a report of the corrective action or removal is 
     required and has been submitted under subsection (a).

     ``SEC. 910. APPLICATION FOR REVIEW OF CERTAIN TOBACCO 
                   PRODUCTS.

       ``(a) In General.--
       ``(1) New tobacco product defined.--For purposes of this 
     section the term `new tobacco product' means--
       ``(A) any tobacco product (including those products in test 
     markets) that was not commercially marketed in the United 
     States as of June 1, 2003; or
       ``(B) any modification (including a change in design, any 
     component, any part, or any constituent, including a smoke 
     constituent, or in the content, delivery or form of nicotine, 
     or any other additive or ingredient) of a tobacco product 
     where the modified product was commercially marketed in the 
     United States after June 1, 2003.
       ``(2) Premarket approval required.--
       ``(A) New products.--Approval under this section of an 
     application for premarket approval for any new tobacco 
     product is required unless--
       ``(i) the manufacturer has submitted a report under section 
     905(j); and
       ``(ii) the Secretary has issued an order that the tobacco 
     product--

       ``(I) is substantially equivalent to a tobacco product 
     commercially marketed (other than for test marketing) in the 
     United States as of June 1, 2003; and
       ``(II)(aa) is in compliance with the requirements of this 
     Act; or
       ``(bb) is exempt from the requirements of section 905(j) 
     pursuant to a regulation issued under section 905(j)(3).

       ``(B) Application to certain post june 1, 2003 products.--
     Subparagraph (A) shall not apply to a tobacco product--
       ``(i) that was first introduced or delivered for 
     introduction into interstate commerce for commercial 
     distribution in the United States after June 1, 2003, and 
     prior to the date that is 15 months after the date of 
     enactment of the Family Smoking Prevention and Tobacco 
     Control Act; and
       ``(ii) for which a report was submitted under section 
     905(j) within such 15-month period, until the Secretary 
     issues an order that the tobacco product is not substantially 
     equivalent.
       ``(3) Substantially equivalent defined.--
       ``(A) In general.--In this section and section 905(j), the 
     terms `substantially equivalent' or `substantial equivalence' 
     mean, with respect to the tobacco product being compared to 
     the predicate tobacco product, that the Secretary by order 
     has found that the tobacco product--
       ``(i) has the same characteristics as the predicate tobacco 
     product; or
       ``(ii) has different characteristics and the information 
     submitted contains information, including clinical data if 
     deemed necessary by the Secretary, that demonstrates that it 
     is not appropriate to regulate the product under this section 
     because the product does not raise different questions of 
     public health.
       ``(B) Characteristics.--In subparagraph (A), the term 
     `characteristics' means the materials, ingredients, design, 
     composition, heating source, or other features of a tobacco 
     product.
       ``(C) Limitation.--A tobacco product may not be found to be 
     substantially equivalent to a predicate tobacco product that 
     has been removed from the market at the initiative of the 
     Secretary or that has been determined by a judicial order to 
     be misbranded or adulterated.
       ``(4) Health information.--
       ``(A) Summary.--As part of a submission under section 
     905(j) respecting a tobacco product, the person required to 
     file a premarket notification under such section shall 
     provide an adequate summary of any health information related 
     to the tobacco product or state that such information will be 
     made available upon request by any person.
       ``(B) Required information.--Any summary under subparagraph 
     (A) respecting a tobacco product shall contain detailed 
     information regarding data concerning adverse health effects 
     and shall be made available to the public by the Secretary 
     within 30 days of the issuance of a determination that 
     such tobacco product is substantially equivalent to 
     another tobacco product.
       ``(b) Application.--
       ``(1) Contents.--An application for premarket approval 
     shall contain--
       ``(A) full reports of all information, published or known 
     to, or which should reasonably be known to, the applicant, 
     concerning investigations which have been made to show the 
     health risks of such tobacco product and whether such tobacco 
     product presents less risk than other tobacco products;
       ``(B) a full statement of the components, ingredients, 
     additives, and properties, and of the principle or principles 
     of operation, of such tobacco product;
       ``(C) a full description of the methods used in, and the 
     facilities and controls used for, the manufacture, 
     processing, and, when relevant, packing and installation of, 
     such tobacco product;
       ``(D) an identifying reference to any tobacco product 
     standard under section 907 which would be applicable to any 
     aspect of such tobacco product, and either adequate 
     information to show that such aspect of such tobacco product 
     fully meets such tobacco product standard or adequate 
     information to justify any deviation from such standard;
       ``(E) such samples of such tobacco product and of 
     components thereof as the Secretary may reasonably require;
       ``(F) specimens of the labeling proposed to be used for 
     such tobacco product; and
       ``(G) such other information relevant to the subject matter 
     of the application as the Secretary may require.
       ``(2) Reference to tobacco products scientific advisory 
     committee.--Upon receipt of an application meeting the 
     requirements set forth in paragraph (1), the Secretary--
       ``(A) may, on the Secretary's own initiative; or
       ``(B) may, upon the request of an applicant,

     refer such application to the Tobacco Products Scientific 
     Advisory Committee for reference and for submission (within 
     such period as the Secretary may establish) of a report and 
     recommendation respecting approval of the application, 
     together with all underlying data and the reasons or basis 
     for the recommendation.
       ``(c) Action on Application.--
       ``(1) Deadline.--
       ``(A) In general.--As promptly as possible, but in no event 
     later than 180 days after the receipt of an application under 
     subsection (b), the Secretary, after considering the report 
     and recommendation submitted under paragraph (2) of such 
     subsection, shall--
       ``(i) issue an order approving the application if the 
     Secretary finds that none of the grounds for denying approval 
     specified in paragraph (2) of this subsection applies; or
       ``(ii) deny approval of the application if the Secretary 
     finds (and sets forth the basis for such finding as part of 
     or accompanying such denial) that 1 or more grounds for 
     denial specified in paragraph (2) of this subsection apply.
       ``(B) Restrictions on sale and distribution.--An order 
     approving an application for a tobacco product may require as 
     a condition to such approval that the sale and distribution 
     of the tobacco product be restricted but only to the extent 
     that the sale and distribution of a tobacco product may be 
     restricted under a regulation under section 906(d).
       ``(2) Denial of approval.--The Secretary shall deny 
     approval of an application for a tobacco product if, upon the 
     basis of the information submitted to the Secretary as part 
     of the application and any other information before the 
     Secretary with respect to such tobacco product, the Secretary 
     finds that--
       ``(A) there is a lack of a showing that permitting such 
     tobacco product to be marketed would be appropriate for the 
     protection of the public health;
       ``(B) the methods used in, or the facilities or controls 
     used for, the manufacture, processing, or packing of such 
     tobacco product do not conform to the requirements of section 
     906(e);
       ``(C) based on a fair evaluation of all material facts, the 
     proposed labeling is false or misleading in any particular; 
     or
       ``(D) such tobacco product is not shown to conform in all 
     respects to a tobacco product standard in effect under 
     section 907, compliance with which is a condition to approval 
     of the application, and there is a lack of adequate 
     information to justify the deviation from such standard.
       ``(3) Denial information.--Any denial of an application 
     shall, insofar as the Secretary determines to be practicable, 
     be accompanied by a statement informing the applicant of the 
     measures required to place such application in approvable 
     form (which measures may include further research by the 
     applicant in accordance with 1 or more protocols prescribed 
     by the Secretary).
       ``(4) Basis for finding.--For purposes of this section, the 
     finding as to whether approval of a tobacco product is 
     appropriate for

[[Page S8252]]

     the protection of the public health shall be determined with 
     respect to the risks and benefits to the population as a 
     whole, including users and nonusers of the tobacco product, 
     and taking into account--
       ``(A) the increased or decreased likelihood that existing 
     users of tobacco products will stop using such products; and
       ``(B) the increased or decreased likelihood that those who 
     do not use tobacco products will start using such products.
       ``(5) Basis for action.--
       ``(A) Investigations.--For purposes of paragraph (2)(A), 
     whether permitting a tobacco product to be marketed would be 
     appropriate for the protection of the public health shall, 
     when appropriate, be determined on the basis of well-
     controlled investigations, which may include 1 or more 
     clinical investigations by experts qualified by training and 
     experience to evaluate the tobacco product.
       ``(B) Other evidence.--If the Secretary determines that 
     there exists valid scientific evidence (other than evidence 
     derived from investigations described in subparagraph (A)) 
     which is sufficient to evaluate the tobacco product the 
     Secretary may authorize that the determination for purposes 
     of paragraph (2)(A) be made on the basis of such evidence.
       ``(d) Withdrawal and Temporary Suspension.--
       ``(1) In general.--The Secretary shall, upon obtaining, 
     where appropriate, advice on scientific matters from an 
     advisory committee, and after due notice and opportunity for 
     informal hearing to the holder of an approved application for 
     a tobacco product, issue an order withdrawing approval of the 
     application if the Secretary finds--
       ``(A) that the continued marketing of such tobacco product 
     no longer is appropriate for the protection of the public 
     health;
       ``(B) that the application contained or was accompanied by 
     an untrue statement of a material fact;
       ``(C) that the applicant--
       ``(i) has failed to establish a system for maintaining 
     records, or has repeatedly or deliberately failed to maintain 
     records or to make reports, required by an applicable 
     regulation under section 909;
       ``(ii) has refused to permit access to, or copying or 
     verification of, such records as required by section 704; or
       ``(iii) has not complied with the requirements of section 
     905;
       ``(D) on the basis of new information before the Secretary 
     with respect to such tobacco product, evaluated together with 
     the evidence before the Secretary when the application was 
     approved, that the methods used in, or the facilities and 
     controls used for, the manufacture, processing, packing, or 
     installation of such tobacco product do not conform with the 
     requirements of section 906(e) and were not brought into 
     conformity with such requirements within a reasonable time 
     after receipt of written notice from the Secretary of 
     nonconformity;
       ``(E) on the basis of new information before the Secretary, 
     evaluated together with the evidence before the Secretary 
     when the application was approved, that the labeling of such 
     tobacco product, based on a fair evaluation of all material 
     facts, is false or misleading in any particular and was not 
     corrected within a reasonable time after receipt of written 
     notice from the Secretary of such fact; or
       ``(F) on the basis of new information before the Secretary, 
     evaluated together with the evidence before the Secretary 
     when the application was approved, that such tobacco product 
     is not shown to conform in all respects to a tobacco product 
     standard which is in effect under section 907, compliance 
     with which was a condition to approval of the application, 
     and that there is a lack of adequate information to justify 
     the deviation from such standard.
       ``(2) Appeal.--The holder of an application subject to an 
     order issued under paragraph (1) withdrawing approval of the 
     application may, by petition filed on or before the 30th day 
     after the date upon which such holder receives notice of such 
     withdrawal, obtain review thereof in accordance with 
     subsection (e).
       ``(3) Temporary suspension.--If, after providing an 
     opportunity for an informal hearing, the Secretary determines 
     there is reasonable probability that the continuation of 
     distribution of a tobacco product under an approved 
     application would cause serious, adverse health consequences 
     or death, that is greater than ordinarily caused by tobacco 
     products on the market, the Secretary shall by order 
     temporarily suspend the approval of the application approved 
     under this section. If the Secretary issues such an order, 
     the Secretary shall proceed expeditiously under paragraph (1) 
     to withdraw such application.
       ``(e) Service of Order.--An order issued by the Secretary 
     under this section shall be served--
       ``(1) in person by any officer or employee of the 
     department designated by the Secretary; or
       ``(2) by mailing the order by registered mail or certified 
     mail addressed to the applicant at the applicant's last known 
     address in the records of the Secretary.
       ``(f) Records.--
       ``(1) Additional information.--In the case of any tobacco 
     product for which an approval of an application filed under 
     subsection (b) is in effect, the applicant shall establish 
     and maintain such records, and make such reports to the 
     Secretary, as the Secretary may by regulation, or by order 
     with respect to such application, prescribe on the basis of a 
     finding that such records and reports are necessary in order 
     to enable the Secretary to determine, or facilitate a 
     determination of, whether there is or may be grounds for 
     withdrawing or temporarily suspending such approval.
       ``(2) Access to records.--Each person required under this 
     section to maintain records, and each person in charge or 
     custody thereof, shall, upon request of an officer or 
     employee designated by the Secretary, permit such officer or 
     employee at all reasonable times to have access to and copy 
     and verify such records.
       ``(g) Investigational Tobacco Product Exemption for 
     Investigational Use.--The Secretary may exempt tobacco 
     products intended for investigational use from the provisions 
     of this chapter under such conditions as the Secretary may by 
     regulation prescribe.

     ``SEC. 911. MODIFIED RISK TOBACCO PRODUCTS.

       ``(a) In General.--No person may introduce or deliver for 
     introduction into interstate commerce any modified risk 
     tobacco product unless approval of an application filed 
     pursuant to subsection (d) is effective with respect to such 
     product.
       ``(b) Definitions.--In this section:
       ``(1) Modified risk tobacco product.--The term `modified 
     risk tobacco product' means any tobacco product that is sold 
     or distributed for use to reduce harm or the risk of tobacco-
     related disease associated with commercially marketed tobacco 
     products.
       ``(2) Sold or distributed.--
       ``(A) In general.--With respect to a tobacco product, the 
     term `sold or distributed for use to reduce harm or the risk 
     of tobacco-related disease associated with commercially 
     marketed tobacco products' means a tobacco product--
       ``(A) the label, labeling, or advertising of which 
     represents explicitly or implicitly that--

       ``(I) the tobacco product presents a lower risk of tobacco-
     related disease or is less harmful than one or more other 
     commercially marketed tobacco products;
       ``(II) the tobacco product or its smoke contains a reduced 
     level of a substance or presents a reduced exposure to a 
     substance; or
       ``(III) the tobacco product or its smoke does not contain 
     or is free of a substance;

       ``(ii) the label, labeling, or advertising of which uses 
     the descriptors `light', `mild', or `low' or similar 
     descriptors; or
       ``(iii) the tobacco product manufacturer of which has taken 
     any action directed to consumers through the media or 
     otherwise, other than by means of the tobacco product's 
     label, labeling or advertising, after the date of enactment 
     of the Family Smoking Prevention and Tobacco Control Act, 
     respecting the product that would be reasonably expected to 
     result in consumers believing that the tobacco product or its 
     smoke may present a lower risk of disease or is less harmful 
     than one or more commercially marketed tobacco products, or 
     presents a reduced exposure to, or does not contain or is 
     free of, a substance or substances.
       ``(B) Limitation.--No tobacco product shall be considered 
     to be `sold or distributed for use to reduce harm or the risk 
     of tobacco-related disease associated with commercially 
     marketed tobacco products', except as described in 
     subparagraph (A).
       ``(c) Tobacco Dependence Products.--A product that is 
     intended to be used for the treatment of tobacco dependence, 
     including smoking cessation, is not a modified risk tobacco 
     product under this section and is subject to the requirements 
     of chapter V.
       ``(d) Filing.--Any person may file with the Secretary an 
     application for a modified risk tobacco product. Such 
     application shall include--
       ``(1) a description of the proposed product and any 
     proposed advertising and labeling;
       ``(2) the conditions for using the product;
       ``(3) the formulation of the product;
       ``(4) sample product labels and labeling;
       ``(5) all documents (including underlying scientific 
     information) relating to research findings conducted, 
     supported, or possessed by the tobacco product manufacturer 
     relating to the effect of the product on tobacco related 
     diseases and health-related conditions, including information 
     both favorable and unfavorable to the ability of the product 
     to reduce risk or exposure and relating to human health;
       ``(6) data and information on how consumers actually use 
     the tobacco product; and
       ``(7) such other information as the Secretary may require.
       ``(e) Public Availability.--The Secretary shall make the 
     application described in subsection (d) publicly available 
     (except matters in the application which are trade secrets or 
     otherwise confidential, commercial information) and shall 
     request comments by interested persons on the information 
     contained in the application and on the label, labeling, and 
     advertising accompanying such application.
       ``(f) Advisory Committee.--
       ``(1) In general.--The Secretary shall refer to an advisory 
     committee any application submitted under this subsection.
       ``(2) Recommendations.--Not later than 60 days after the 
     date an application is referred to an advisory committee 
     under paragraph (1), the advisory committee shall report its 
     recommendations on the application to the Secretary.
       ``(g) Approval.--
       ``(1) Modified risk products.--Except as provided in 
     paragraph (2), the Secretary

[[Page S8253]]

     shall approve an application for a modified risk tobacco 
     product filed under this section only if the Secretary 
     determines that the applicant has demonstrated that such 
     product, as it is actually used by consumers, will--
       ``(A) significantly reduce harm and the risk of tobacco-
     related disease to individual tobacco users; and
       ``(B) benefit the health of the population as a whole 
     taking into account both users of tobacco products and 
     persons who do not currently use tobacco products.
       ``(2) Special rule for certain products.--
       ``(A) In general.--The Secretary may approve an application 
     for a tobacco product that has not been approved as a 
     modified risk tobacco product pursuant to paragraph (1) if 
     the Secretary makes the findings required under this 
     paragraph and determines that the applicant has demonstrated 
     that--
       ``(i) the approval of the application would be appropriate 
     to promote the public health;
       ``(ii) any aspect of the label, labeling, and advertising 
     for such product that would cause the tobacco product to be a 
     modified risk tobacco product under subsection (b)(2) is 
     limited to an explicit or implicit representation that such 
     tobacco product or its smoke contains or is free of a 
     substance or contains a reduced level of a substance, or 
     presents a reduced exposure to a substance in tobacco smoke.
       ``(iii) scientific evidence is not available and, using the 
     best available scientific methods, cannot be made available 
     without conducting long-term epidemiological studies for an 
     application to meet the standards set forth in paragraph (1); 
     and
       ``(iv) the scientific evidence that is available without 
     conducting long-term epidemiological studies demonstrates 
     that a measurable and substantial reduction in morbidity or 
     mortality among individual tobacco users is anticipated in 
     subsequent studies.
       ``(B) Additional findings required.--In order to approve an 
     application under subparagraph (A) the Secretary must also 
     find that the applicant has demonstrated that--
       ``(i) the magnitude of the overall reductions in exposure 
     to the substance or substances which are the subject of the 
     application is substantial, such substance or substances are 
     harmful, and the product as actually used exposes consumers 
     to the specified reduced level of the substance or 
     substances;
       ``(ii) the product as actually used by consumers will not 
     expose them to higher levels of other harmful substances 
     compared to the similar types of tobacco products then on the 
     market unless such increases are minimal and the anticipated 
     overall impact of use of the product remains a substantial 
     and measurable reduction in overall morbidity and mortality 
     among individual tobacco users;
       ``(iii) testing of actual consumer perception shows that, 
     as the applicant proposes to label and market the product, 
     consumers will not be misled into believing that the 
     product--

       ``(I) is or has been demonstrated to be less harmful; or
       ``(II) presents or has been demonstrated to present less of 
     a risk of disease than 1 or more other commercially marketed 
     tobacco products; and

       ``(iv) approval of the application is expected to benefit 
     the health of the population as a whole taking into account 
     both users of tobacco products and persons who do not 
     currently use tobacco products.
       ``(C) Conditions of approval.--
       ``(i) In general.--Applications approved under this 
     paragraph shall be limited to a term of not more than 5 
     years, but may be renewed upon a finding by the Secretary 
     that the requirements of this paragraph continue to be 
     satisfied based on the filing of a new application.
       ``(ii) Agreements by applicant.--Applications approved 
     under this paragraph shall be conditioned on the applicant's 
     agreement to conduct post-market surveillance and studies and 
     to submit to the Secretary the results of such surveillance 
     and studies to determine the impact of the application 
     approval on consumer perception, behavior, and health and to 
     enable the Secretary to review the accuracy of the 
     determinations upon which the approval was based in 
     accordance with a protocol approved by the Secretary.
       ``(iii) Annual submission.--The results of such post-market 
     surveillance and studies described in clause (ii) shall be 
     submitted annually.
       ``(3) Basis.--The determinations under paragraphs (1) and 
     (2) shall be based on--
       ``(A) the scientific evidence submitted by the applicant; 
     and
       ``(B) scientific evidence and other information that is 
     available to the Secretary.
       ``(4) Benefit to health of individuals and of population as 
     a whole.--In making the determinations under paragraphs (1) 
     and (2), the Secretary shall take into account--
       ``(A) the relative health risks to individuals of the 
     tobacco product that is the subject of the application;
       ``(B) the increased or decreased likelihood that existing 
     users of tobacco products who would otherwise stop using such 
     products will switch to the tobacco product that is the 
     subject of the application;
       ``(C) the increased or decreased likelihood that persons 
     who do not use tobacco products will start using the tobacco 
     product that is the subject of the application;
       ``(D) the risks and benefits to persons from the use of the 
     tobacco product that is the subject of the application as 
     compared to the use of products for smoking cessation 
     approved under chapter V to treat nicotine dependence; and
       ``(E) comments, data, and information submitted by 
     interested persons.
       ``(h) Additional Conditions for Approval.--
       ``(1) Modified risk products.--The Secretary shall require 
     for the approval of an application under this section that 
     any advertising or labeling concerning modified risk products 
     enable the public to comprehend the information concerning 
     modified risk and to understand the relative significance of 
     such information in the context of total health and in 
     relation to all of the diseases and health-related conditions 
     associated with the use of tobacco products.
       ``(2) Comparative claims.--
       ``(A) In general.--The Secretary may require for the 
     approval of an application under this subsection that a claim 
     comparing a tobacco product to 1 or more other commercially 
     marketed tobacco products shall compare the tobacco product 
     to a commercially marketed tobacco product that is 
     representative of that type of tobacco product on the market 
     (for example the average value of the top 3 brands of an 
     established regular tobacco product).
       ``(B) Quantitative comparisons.--The Secretary may also 
     require, for purposes of subparagraph (A), that the percent 
     (or fraction) of change and identity of the reference tobacco 
     product and a quantitative comparison of the amount of the 
     substance claimed to be reduced shall be stated in immediate 
     proximity to the most prominent claim.
       ``(3) Label disclosure.--
       ``(A) In general.--The Secretary may require the disclosure 
     on the label of other substances in the tobacco product, or 
     substances that may be produced by the consumption of that 
     tobacco product, that may affect a disease or health-related 
     condition or may increase the risk of other diseases or 
     health-related conditions associated with the use of tobacco 
     products.
       ``(B) Conditions of use.--If the conditions of use of the 
     tobacco product may affect the risk of the product to human 
     health, the Secretary may require the labeling of conditions 
     of use.
       ``(4) Time.--The Secretary shall limit an approval under 
     subsection (g)(1) for a specified period of time.
       ``(5) Advertising.--The Secretary may require that an 
     applicant, whose application has been approved under this 
     subsection, comply with requirements relating to advertising 
     and promotion of the tobacco product.
       ``(i) Postmarket Surveillance and Studies.--
       ``(1) In general.--The Secretary shall require that an 
     applicant under subsection (g)(1) conduct post market 
     surveillance and studies for a tobacco product for which an 
     application has been approved to determine the impact of the 
     application approval on consumer perception, behavior, and 
     health, to enable the Secretary to review the accuracy of the 
     determinations upon which the approval was based, and to 
     provide information that the Secretary determines is 
     otherwise necessary regarding the use or health risks 
     involving the tobacco product. The results of post-market 
     surveillance and studies shall be submitted to the 
     Secretary on an annual basis.
       ``(2) Surveillance protocol.--Each applicant required to 
     conduct a surveillance of a tobacco product under paragraph 
     (1) shall, within 30 days after receiving notice that the 
     applicant is required to conduct such surveillance, submit, 
     for the approval of the Secretary, a protocol for the 
     required surveillance. The Secretary, within 60 days of the 
     receipt of such protocol, shall determine if the principal 
     investigator proposed to be used in the surveillance has 
     sufficient qualifications and experience to conduct such 
     surveillance and if such protocol will result in collection 
     of the data or other information designated by the Secretary 
     as necessary to protect the public health.
       ``(j) Withdrawal of Approval.--The Secretary, after an 
     opportunity for an informal hearing, shall withdraw the 
     approval of an application under this section if the 
     Secretary determines that--
       ``(1) the applicant, based on new information, can no 
     longer make the demonstrations required under subsection (g), 
     or the Secretary can no longer make the determinations 
     required under subsection (g);
       ``(2) the application failed to include material 
     information or included any untrue statement of material 
     fact;
       ``(3) any explicit or implicit representation that the 
     product reduces risk or exposure is no longer valid, 
     including if--
       ``(A) a tobacco product standard is established pursuant to 
     section 907;
       ``(B) an action is taken that affects the risks presented 
     by other commercially marketed tobacco products that were 
     compared to the product that is the subject of the 
     application; or
       ``(C) any postmarket surveillance or studies reveal that 
     the approval of the application is no longer consistent with 
     the protection of the public health;
       ``(4) the applicant failed to conduct or submit the 
     postmarket surveillance and studies required under subsection 
     (g)(2)(C)(ii) or (i); or
       ``(5) the applicant failed to meet a condition imposed 
     under subsection (h).
       ``(k) Chapter IV or V.--A product approved in accordance 
     with this section shall not be subject to chapter IV or V.

[[Page S8254]]

       ``(l) Implementing Regulations or Guidance.--
       ``(1) Scientific evidence.--Not later than 2 years after 
     the date of enactment of the Family Smoking Prevention and 
     Tobacco Control Act, the Secretary shall issue regulations or 
     guidance (or any combination thereof) on the scientific 
     evidence required for assessment and ongoing review of 
     modified risk tobacco products. Such regulations or guidance 
     shall--
       ``(A) establish minimum standards for scientific studies 
     needed prior to approval to show that a substantial reduction 
     in morbidity or mortality among individual tobacco users is 
     likely;
       ``(B) include validated biomarkers, intermediate clinical 
     endpoints, and other feasible outcome measures, as 
     appropriate;
       ``(C) establish minimum standards for post market studies, 
     that shall include regular and long-term assessments of 
     health outcomes and mortality, intermediate clinical 
     endpoints, consumer perception of harm reduction, and the 
     impact on quitting behavior and new use of tobacco products, 
     as appropriate;
       ``(D) establish minimum standards for required postmarket 
     surveillance, including ongoing assessments of consumer 
     perception; and
       ``(E) require that data from the required studies and 
     surveillance be made available to the Secretary prior to the 
     decision on renewal of a modified risk tobacco product.
       ``(2) Consultation.--The regulations or guidance issued 
     under paragraph (1) shall be developed in consultation with 
     the Institute of Medicine, and with the input of other 
     appropriate scientific and medical experts, on the design and 
     conduct of such studies and surveillance.
       ``(3) Revision.--The regulations or guidance under 
     paragraph (1) shall be revised on a regular basis as new 
     scientific information becomes available.
       ``(4) New tobacco products.--Not later than 2 years after 
     the date of enactment of the Family Smoking Prevention and 
     Tobacco Control Act, the Secretary shall issue a regulation 
     or guidance that permits the filing of a single application 
     for any tobacco product that is a new tobacco product under 
     section 910 and for which the applicant seeks approval as a 
     modified risk tobacco product under this section.
       ``(m) Distributors.--No distributor may take any action, 
     after the date of enactment of the Family Smoking Prevention 
     and Tobacco Control Act, with respect to a tobacco product 
     that would reasonably be expected to result in consumers 
     believing that the tobacco product or its smoke may present a 
     lower risk of disease or is less harmful than one or more 
     commercially marketed tobacco products, or presents a reduced 
     exposure to, or does not contain or is free of, a substance 
     or substances.

     ``SEC. 912. JUDICIAL REVIEW.

       ``(a) Right To Review.--
       ``(1) In general.--Not later than 30 days after--
       ``(A) the promulgation of a regulation under section 907 
     establishing, amending, or revoking a tobacco product 
     standard; or
       ``(B) a denial of an application for approval under section 
     910(c),

     any person adversely affected by such regulation or denial 
     may file a petition for judicial review of such regulation or 
     denial with the United States Court of Appeals for the 
     District of Columbia or for the circuit in which such person 
     resides or has their principal place of business.
       ``(2) Requirements.--
       ``(A) Copy of petition.--A copy of the petition filed under 
     paragraph (1) shall be transmitted by the clerk of the court 
     involved to the Secretary.
       ``(B) Record of proceedings.--On receipt of a petition 
     under subparagraph (A), the Secretary shall file in the court 
     in which such petition was filed--
       ``(i) the record of the proceedings on which the regulation 
     or order was based; and
       ``(ii) a statement of the reasons for the issuance of such 
     a regulation or order.
       ``(C) Definition of record.--In this section, the term 
     `record' means--
       ``(i) all notices and other matter published in the Federal 
     Register with respect to the regulation or order reviewed;
       ``(ii) all information submitted to the Secretary with 
     respect to such regulation or order;
       ``(iii) proceedings of any panel or advisory committee with 
     respect to such regulation or order;
       ``(iv) any hearing held with respect to such regulation or 
     order; and
       ``(v) any other information identified by the Secretary, in 
     the administrative proceeding held with respect to such 
     regulation or order, as being relevant to such regulation or 
     order.
       ``(b) Standard of Review.--Upon the filing of the petition 
     under subsection (a) for judicial review of a regulation or 
     order, the court shall have jurisdiction to review the 
     regulation or order in accordance with chapter 7 of title 5, 
     United States Code, and to grant appropriate relief, 
     including interim relief, as provided for in such chapter. A 
     regulation or denial described in subsection (a) shall be 
     reviewed in accordance with section 706(2)(A) of title 5, 
     United States Code.
       ``(c) Finality of Judgment.--The judgment of the court 
     affirming or setting aside, in whole or in part, any 
     regulation or order shall be final, subject to review by the 
     Supreme Court of the United States upon certiorari or 
     certification, as provided in section 1254 of title 28, 
     United States Code.
       ``(d) Other Remedies.--The remedies provided for in this 
     section shall be in addition to, and not in lieu of, any 
     other remedies provided by law.
       ``(e) Regulations and Orders Must Recite Basis in Record.--
     To facilitate judicial review, a regulation or order issued 
     under section 906, 907, 908, 909, 910, or 916 shall contain a 
     statement of the reasons for the issuance of such regulation 
     or order in the record of the proceedings held in connection 
     with its issuance.

     ``SEC. 913. EQUAL TREATMENT OF RETAIL OUTLETS.

       ``The Secretary shall issue regulations to require that 
     retail establishments for which the predominant business is 
     the sale of tobacco products comply with any advertising 
     restrictions applicable to retail establishments accessible 
     to individuals under the age of 18.

     ``SEC. 914. JURISDICTION OF AND COORDINATION WITH THE FEDERAL 
                   TRADE COMMISSION.

       ``(a) Jurisdiction.--
       ``(1) In general.--Except where expressly provided in this 
     chapter, nothing in this chapter shall be construed as 
     limiting or diminishing the authority of the Federal Trade 
     Commission to enforce the laws under its jurisdiction with 
     respect to the advertising, sale, or distribution of tobacco 
     products.
       ``(2) Enforcement.--Any advertising that violates this 
     chapter or a provision of the regulations referred to in 
     section __12 of the Family Smoking Prevention and Tobacco 
     Control Act, is an unfair or deceptive act or practice under 
     section 5(a) of the Federal Trade Commission Act (15 U.S.C. 
     45(a)) and shall be considered a violation of a rule 
     promulgated under section 18 of that Act (15 U.S.C. 57a).
       ``(b) Coordination.--With respect to the requirements of 
     section 4 of the Federal Cigarette Labeling and Advertising 
     Act (15 U.S.C. 1333) and section 3 of the Comprehensive 
     Smokeless Tobacco Health Education Act of 1986 (15 U.S.C. 
     4402)--
       ``(1) the Chairman of the Federal Trade Commission shall 
     coordinate with the Secretary concerning the enforcement of 
     such Act as such enforcement relates to unfair or deceptive 
     acts or practices in the advertising of cigarettes or 
     smokeless tobacco; and
       ``(2) the Secretary shall consult with the Chairman of such 
     Commission in revising the label statements and requirements 
     under such sections.

     ``SEC. 915. CONGRESSIONAL REVIEW PROVISIONS.

       ``In accordance with section 801 of title 5, United States 
     Code, Congress shall review, and may disapprove, any rule 
     under this chapter that is subject to section 801. This 
     section and section 801 do not apply to the regulations 
     referred to in section __12 of the Family Smoking Prevention 
     and Tobacco Control Act.

     ``SEC. 916. REGULATION REQUIREMENT.

       ``(a) Testing, Reporting, and Disclosure.--Not later than 
     24 months after the date of enactment of the Family Smoking 
     Prevention and Tobacco Control Act, the Secretary, acting 
     through the Commissioner of the Food and Drug Administration, 
     shall promulgate regulations under this Act that meet the 
     requirements of subsection (b).
       ``(b) Contents of Rules.--The regulations promulgated under 
     subsection (a) shall require testing and reporting of tobacco 
     product constituents, ingredients, and additives, including 
     smoke constituents, by brand and sub-brand that the Secretary 
     determines should be tested to protect the public health. The 
     regulations may require that tobacco product manufacturers, 
     packagers, or importers make disclosures relating to the 
     results of the testing of tar and nicotine through labels or 
     advertising or other appropriate means, and make disclosures 
     regarding the results of the testing of other constituents, 
     including smoke constituents, ingredients, or additives, that 
     the Secretary determines should be disclosed to the public to 
     protect the public health and will not mislead consumers 
     about the risk of tobacco related disease.
       ``(c) Authority.--The Food and Drug Administration shall 
     have the authority under this chapter to conduct or to 
     require the testing, reporting, or disclosure of tobacco 
     product constituents, including smoke constituents.

     ``SEC. 917. PRESERVATION OF STATE AND LOCAL AUTHORITY.

       ``(a) In General.--
       ``(1) Preservation.--Nothing in this chapter, or rules 
     promulgated under this chapter, shall be construed to limit 
     the authority of a Federal agency (including the Armed 
     Forces), a State or political subdivision of a State, or the 
     government of an Indian tribe to enact, adopt, promulgate, 
     and enforce any law, rule, regulation, or other measure with 
     respect to tobacco products that is in addition to, or more 
     stringent than, requirements established under this chapter, 
     including a law, rule, regulation, or other measure relating 
     to or prohibiting the sale, distribution, possession, 
     exposure to, access to, advertising and promotion of, or use 
     of tobacco products by individuals of any age, information 
     reporting to the State, or measures relating to fire safety 
     standards for tobacco products. No provision of this chapter 
     shall limit or otherwise affect any State, Tribal, or 
     local taxation of tobacco products.
       ``(2) Preemption of certain state and local requirements.--
       ``(A) In general.--Except as provided in paragraph (1) and 
     subparagraph (B), no State

[[Page S8255]]

     or political subdivision of a State may establish or continue 
     in effect with respect to a tobacco product any requirement 
     which is different from, or in addition to, any requirement 
     under the provisions of this chapter relating to tobacco 
     product standards, premarket approval, adulteration, 
     misbranding, labeling, registration, good manufacturing 
     standards, or reduced risk products.
       ``(B) Exception.--Subparagraph (A) does not apply to 
     requirements relating to the sale, distribution, possession, 
     information reporting to the State, exposure to, access to, 
     the advertising and promotion of, or use of, tobacco products 
     by individuals of any age, or relating to fire safety 
     standards for tobacco products. Information disclosed to a 
     State under subparagraph (A) that is exempt from disclosure 
     under section 554(b)(4) of title 5, United States Code, shall 
     be treated as trade secret and confidential information by 
     the State.
       ``(b) Rule of Construction Regarding Product Liability.--No 
     provision of this chapter relating to a tobacco product shall 
     be construed to modify or otherwise affect any action or the 
     liability of any person under the product liability law of 
     any State.

     ``SEC. 918. TOBACCO PRODUCTS SCIENTIFIC ADVISORY COMMITTEE.

       ``(a) Establishment.--Not later than 1 year after the date 
     of enactment of the Family Smoking Prevention and Tobacco 
     Control Act, the Secretary shall establish a 11-member 
     advisory committee, to be known as the `Tobacco Products 
     Scientific Advisory Committee'.
       ``(b) Membership.--
       ``(1) In general.--
       ``(A) Members.--The Secretary shall appoint as members of 
     the Tobacco Products Scientific Advisory Committee 
     individuals who are technically qualified by training and 
     experience in the medicine, medical ethics, science, or 
     technology involving the manufacture, evaluation, or use of 
     tobacco products, who are of appropriately diversified 
     professional backgrounds. The committee shall be composed 
     of--
       ``(i) 7 individuals who are physicians, dentists, 
     scientists, or health care professionals practicing in the 
     area of oncology, pulmonology, cardiology, toxicology, 
     pharmacology, addiction, or any other relevant specialty;
       ``(ii) 1 individual who is an officer or employee of a 
     State or local government or of the Federal Government;
       ``(iii) 1 individual as a representative of the general 
     public;
       ``(iv) 1 individual as a representative of the interests in 
     the tobacco manufacturing industry; and
       ``(v) 1 individual as a representative of the interests of 
     the tobacco growers.
       ``(B) Nonvoting members.--The members of the committee 
     appointed under clauses (iv) and (v) of subparagraph (A) 
     shall serve as consultants to those described in clauses (i) 
     through (iii) of subparagraph (A) and shall be nonvoting 
     representatives.
       ``(2) Limitation.--The Secretary may not appoint to the 
     Advisory Committee any individual who is in the regular full-
     time employ of the Food and Drug Administration or any agency 
     responsible for the enforcement of this Act. The Secretary 
     may appoint Federal officials as ex officio members.
       ``(3) Chairperson.--The Secretary shall designate 1 of the 
     members of the Advisory Committee to serve as chairperson.
       ``(c) Duties.--The Tobacco Products Scientific Advisory 
     Committee shall provide advice, information, and 
     recommendations to the Secretary--
       ``(1) as provided in this chapter;
       ``(2) on the effects of the alteration of the nicotine 
     yields from tobacco products;
       ``(3) on whether there is a threshold level below which 
     nicotine yields do not produce dependence on the tobacco 
     product involved; and
       ``(4) on its review of other safety, dependence, or health 
     issues relating to tobacco products as requested by the 
     Secretary.
       ``(d) Compensation; Support; FACA.--
       ``(1) Compensation and travel.--Members of the Advisory 
     Committee who are not officers or employees of the United 
     States, while attending conferences or meetings of the 
     committee or otherwise engaged in its business, shall be 
     entitled to receive compensation at rates to be fixed by the 
     Secretary, which may not exceed the daily equivalent of the 
     rate in effect for level 4 of the Senior Executive Schedule 
     under section 5382 of title 5, United States Code, for each 
     day (including travel time) they are so engaged; and while so 
     serving 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, United States Code, for persons in the Government 
     service employed intermittently.
       ``(2) Administrative support.--The Secretary shall furnish 
     the Advisory Committee clerical and other assistance.
       ``(3) Nonapplication of faca.--Section 14 of the Federal 
     Advisory Committee Act (5 U.S.C. App.) does not apply to the 
     Advisory Committee.
       ``(e) Proceedings of Advisory Panels and Committees.--The 
     Advisory Committee shall make and maintain a transcript of 
     any proceeding of the panel or committee. Each such panel and 
     committee shall delete from any transcript made under this 
     subsection information which is exempt from disclosure under 
     section 552(b) of title 5, United States Code.

     ``SEC. 919. DRUG PRODUCTS USED TO TREAT TOBACCO DEPENDENCE.

       The Secretary shall consider--
       ``(1) at the request of the applicant, designating nicotine 
     replacement products as fast track research and approval 
     products within the meaning of section 506;
       ``(2) direct the Commissioner to consider approving the 
     extended use of nicotine replacement products (such as 
     nicotine patches, nicotine gum, and nicotine lozenges) for 
     the treatment of tobacco dependence;
       ``(3) review and consider the evidence for additional 
     indications for nicotine replacement products, such as for 
     craving relief or relapse prevention; and
       ``(4) consider--
       ``(A) relieving companies of premarket burdens under 
     section 505 if the requirement is redundant considering other 
     nicotine replacement therapies already on the market; and
       ``(B) time and extent applications for nicotine replacement 
     therapies that have been approved by a regulatory body in a 
     foreign country and have marketing experience in such 
     country.

     ``SEC. 920. USER FEE.

       ``(a) Establishment of Quarterly User Fee.--The Secretary 
     shall assess a quarterly user fee with respect to every 
     quarter of each fiscal year commencing fiscal year 2004, 
     calculated in accordance with this section, upon each 
     manufacturer and importer of tobacco products subject to this 
     chapter.
       ``(b) Funding of FDA Regulation of Tobacco Products.--The 
     Secretary shall make user fees collected pursuant to this 
     section available to pay, in each fiscal year, for the costs 
     of the activities of the Food and Drug Administration related 
     to the regulation of tobacco products under this chapter.
       ``(c) Assessment of User Fee.--
       ``(1) Amount of assessment.--Except as provided in 
     paragraph (4), the total user fees assessed each year 
     pursuant to this section shall be sufficient, and shall not 
     exceed what is necessary, to pay for the costs of the 
     activities described in subsection (b) for each fiscal year.
       ``(2) Allocation of assessment by class of tobacco 
     products.--
       ``(A) In general.--Subject to paragraph (3), the total user 
     fees assessed each fiscal year with respect to each class of 
     importers and manufacturers shall be equal to an amount that 
     is the applicable percentage of the total costs of activities 
     of the Food and Drug Administration described in subsection 
     (b).
       ``(B) Applicable percentage.--For purposes of subparagraph 
     (A) the applicable percentage for a fiscal year shall be the 
     following:
       ``(i) 92.07 percent shall be assessed on manufacturers and 
     importers of cigarettes;
       ``(ii) 0.05 percent shall be assessed on manufacturers and 
     importers of little cigars;
       ``(iii) 7.15 percent shall be assessed on manufacturers and 
     importers of cigars other than little cigars;
       ``(iv) 0.43 percent shall be assessed on manufacturers and 
     importers of snuff;
       ``(v) 0.10 percent shall be assessed on manufacturers and 
     importers of chewing tobacco;
       ``(vi) 0.06 percent shall be assessed on manufacturers and 
     importers of pipe tobacco; and
       ``(vii) 0.14 percent shall be assessed on manufacturers and 
     importers of roll-your-own tobacco.
       ``(3) Distribution of fee shares of manufacturers and 
     importers exempt from user fee.--Where a class of tobacco 
     products is not subject to a user fee under this section, the 
     portion of the user fee assigned to such class under 
     subsection (d)(2) shall be allocated by the Secretary on a 
     pro rata basis among the classes of tobacco products that are 
     subject to a user fee under this section. Such pro rata 
     allocation for each class of tobacco products that are 
     subject to a user fee under this section shall be the 
     quotient of--
       ``(A) the sum of the percentages assigned to all classes of 
     tobacco products subject to this section; divided by
       ``(B) the percentage assigned to such class under paragraph 
     (2).
       ``(4) Annual limit on assessment.--The total assessment 
     under this section--
       ``(A) for fiscal year 2004 shall be $85,000,000;
       ``(B) for fiscal year 2005 shall be $175,000,000;
       ``(C) for fiscal year 2006 shall be $300,000,000; and
       ``(D) for each subsequent fiscal year, shall not exceed the 
     limit on the assessment imposed during the previous fiscal 
     year, as adjusted by the Secretary (after notice, published 
     in the Federal Register) to reflect the greater of--
       ``(i) the total percentage change that occurred in the 
     Consumer Price Index for all urban consumers (all items; 
     United States city average) for the 12-month period ending on 
     June 30 of the preceding fiscal year for which fees are being 
     established; or
       ``(ii) the total percentage change for the previous fiscal 
     year in basic pay under the General Schedule in accordance 
     with section 5332 of title 5, United States Code, as adjusted 
     by any locality-based comparability payment pursuant to 
     section 5304 of such title for Federal employees stationed in 
     the District of Columbia.
       ``(5) Timing of user fee assessment.--The Secretary shall 
     notify each manufacturer and importer of tobacco products 
     subject to this section of the amount of the quarterly 
     assessment imposed on such manufacturer or importer under 
     subsection (f) during each quarter of each fiscal year. Such 
     notifications shall occur not earlier than 3 months prior to 
     the end of the quarter for which such

[[Page S8256]]

     assessment is made, and payments of all assessments shall be 
     made not later than 60 days after each such notification.
       ``(d) Determination of User Fee by Company Market Share.--
       ``(1) In general.--The user fee to be paid by each 
     manufacturer or importer of a given class of tobacco products 
     shall be determined in each quarter by multiplying--
       ``(A) such manufacturer's or importer's market share of 
     such class of tobacco products; by
       ``(B) the portion of the user fee amount for the current 
     quarter to be assessed on manufacturers and importers of such 
     class of tobacco products as determined under subsection (e).
       ``(2) No fee in excess of market share.--No manufacturer or 
     importer of tobacco products shall be required to pay a user 
     fee in excess of the market share of such manufacturer or 
     importer.
       ``(e) Determination of Volume of Domestic Sales.--
       ``(1) In general.--The calculation of gross domestic volume 
     of a class of tobacco product by a manufacturer or importer, 
     and by all manufacturers and importers as a group, shall be 
     made by the Secretary using information provided by 
     manufacturers and importers pursuant to subsection (f), as 
     well as any other relevant information provided to or 
     obtained by the Secretary.
       ``(2) Measurement.--For purposes of the calculations under 
     this subsection and the information provided under subsection 
     (f) by the Secretary, gross domestic volume shall be measured 
     by--
       ``(A) in the case of cigarettes, the number of cigarettes 
     sold;
       ``(B) in the case of little cigars, the number of little 
     cigars sold;
       ``(C) in the case of large cigars, the number of cigars 
     weighing more than 3 pounds per thousand sold; and
       ``(D) in the case of other classes of tobacco products, in 
     terms of number of pounds, or fraction thereof, of these 
     products sold.
       ``(f) Measurement of Gross Domestic Volume.--
       ``(1) In general.--Each manufacturer and importer of 
     tobacco products shall submit to the Secretary a certified 
     copy of each of the returns or forms described by this 
     paragraph that are required to be filed with a Government 
     agency on the same date that those returns or forms are 
     filed, or required to be filed, with such agency. The returns 
     and forms described by this paragraph are those returns and 
     forms related to the release of tobacco products into 
     domestic commerce, as defined by section 5702(k) of the 
     Internal Revenue Code of 1986, and the repayment of the taxes 
     imposed under chapter 52 of such Code (ATF Form 500.24 and 
     United States Customs Form 7501 under currently applicable 
     regulations).
       ``(2) Penalties.--Any person that knowingly fails to 
     provide information required under this subsection or that 
     provides false information under this subsection shall be 
     subject to the penalties described in section 1003 of title 
     18, United States Code. In addition, such person may be 
     subject to a civil penalty in an amount not to exceed 2 
     percent of the value of the kind of tobacco products 
     manufactured or imported by such person during the applicable 
     quarter, as determined by the Secretary.
       ``(h) Effective Date.--The user fees prescribed by this 
     section shall be assessed in fiscal year 2004, based on 
     domestic sales of tobacco products during fiscal year 2003 
     and shall be assessed in each fiscal year thereafter.''.

     SEC. __12. INTERIM FINAL RULE.

       (a) Cigarettes and Smokeless Tobacco.--
       (1) In general.--Not later than 30 days after the date of 
     enactment of this Act, the Secretary of Health and Human 
     Services shall publish in the Federal Register an interim 
     final rule regarding cigarettes and smokeless tobacco, which 
     is hereby deemed to be in compliance with the Administrative 
     Procedures Act and other applicable law.
       (2) Contents of rule.--Except as provided in this 
     subsection, the interim final rule published under paragraph 
     (1), shall be identical in its provisions to part 897 of the 
     regulations promulgated by the Secretary of Health and Human 
     Services in the August 28, 1996, issue of the Federal 
     Register (61 Fed. Reg., 44615-44618). Such rule shall--
       (A) provide for the designation of jurisdictional authority 
     that is in accordance with this subsection;
       (B) strike Subpart C--Labeling and section 897.32(c); and
       (C) become effective not later than 1 year after the date 
     of enactment of this Act.
       (3) Amendments to rule.--Prior to making amendments to the 
     rule published under paragraph (1), the Secretary shall 
     promulgate a proposed rule in accordance with the 
     Administrative Procedures Act.
       (4) Rule of construction.--Except as provided in paragraph 
     (3), nothing in this section shall be construed to limit the 
     authority of the Secretary to amend, in accordance with the 
     Administrative Procedures Act, the regulation promulgated 
     pursuant to this section.
       (b) Limitation on Advisory Opinions.--As of the date of 
     enactment of this Act, the following documents issued by the 
     Food and Drug Administration shall not constitute advisory 
     opinions under section 10.85(d)(1) of title 21, Code of 
     Federal Regulations, except as they apply to tobacco 
     products, and shall not be cited by the Secretary of Health 
     and Human Services or the Food and Drug Administration as 
     binding precedent:
       (1) The preamble to the proposed rule in the document 
     entitled ``Regulations Restricting the Sale and Distribution 
     of Cigarettes and Smokeless Tobacco Products to Protect 
     Children and Adolescents'' (60 Fed. Reg. 41314-41372 (August 
     11, 1995)).
       (2) The document entitled ``Nicotine in Cigarettes and 
     Smokeless Tobacco Products is a Drug and These Products Are 
     Nicotine Delivery Devices Under the Federal Food, Drug, and 
     Cosmetic Act'' (60 Fed. Reg. 41453-41787 (August 11, 1995)).
       (3) The preamble to the final rule in the document entitled 
     ``Regulations Restricting the Sale and Distribution of 
     Cigarettes and Smokeless Tobacco to Protect Children and 
     Adolescents'' (61 Fed. Reg. 44396-44615 (August 28, 1996)).
       (4) The document entitled ``Nicotine in Cigarettes and 
     Smokeless Tobacco is a Drug and These Products are Nicotine 
     Delivery Devices Under the Federal Food, Drug, and Cosmetic 
     Act; Jurisdictional Determination'' (61 Fed. Reg. 44619-45318 
     (August 28, 1996)).

     SEC. __13. CONFORMING AND OTHER AMENDMENTS TO GENERAL 
                   PROVISIONS.

       (a) Amendment of Federal Food, Drug, and Cosmetic Act.--
     Except as otherwise expressly provided, whenever in this 
     section an amendment is expressed in terms of an amendment 
     to, or repeal of, a section or other provision, the reference 
     is to a section or other provision of the Federal Food, Drug, 
     and Cosmetic Act (21 U.S.C. 301 et seq.).
       (b) Section 301.--Section 301 (21 U.S.C. 331) is amended--
       (1) in subsection (a), by inserting ``tobacco product,'' 
     after ``device,'';
       (2) in subsection (b), by inserting ``tobacco product,'' 
     after ``device,'';
       (3) in subsection (c), by inserting ``tobacco product,'' 
     after ``device,'';
       (4) in subsection (e), by striking ``515(f), or 519'' and 
     inserting ``515(f), 519, or 909'';
       (5) in subsection (g), by inserting ``tobacco product,'' 
     after ``device,'';
       (6) in subsection (h), by inserting ``tobacco product,'' 
     after ``device,'';
       (7) in subsection (j), by striking ``708, or 721'' and 
     inserting ``708, 721, 904, 905, 906, 907, 908, 909, or 
     section 921(b)'';
       (8) in subsection (k), by inserting ``tobacco product,'' 
     after ``device,'';
       (9) by striking subsection (p) and inserting the following:
       ``(p) The failure to register in accordance with section 
     510 or 905, the failure to provide any information required 
     by section 510(j), 510(k), 905(i), or 905(j), or the failure 
     to provide a notice required by section 510(j)(2) or 
     905(i)(2).'';
       (10) by striking subsection (q)(1) and inserting the 
     following:
       ``(q)(1) The failure or refusal--
       ``(A) to comply with any requirement prescribed under 
     section 518, 520(g), 903(b)(8), or 908, or condition 
     prescribed under section 903(b)(6)(B)(ii)(II);
       ``(B) to furnish any notification or other material or 
     information required by or under section 519, 520(g), 904, 
     909, or section 921; or
       ``(C) to comply with a requirement under section 522 or 
     913.'';
       (11) in subsection (q)(2), by striking ``device,'' and 
     inserting ``device or tobacco product,'';
       (12) in subsection (r), by inserting ``or tobacco product'' 
     after ``device'' each time that it appears; and
       (13) by adding at the end the following:
       ``(aa) The sale of tobacco products in violation of a no-
     tobacco-sale order issued under section 303(f).
       ``(bb) The introduction or delivery for introduction into 
     interstate commerce of a tobacco product in violation of 
     section 911.
       ``(cc)(1) Forging, counterfeiting, simulating, or falsely 
     representing, or without proper authority using any mark, 
     stamp (including tax stamp), tag, label, or other 
     identification device upon any tobacco product or container 
     or labeling thereof so as to render such tobacco product a 
     counterfeit tobacco product.
       ``(2) Making, selling, disposing of, or keeping in 
     possession, control, or custody, or concealing any punch, 
     die, plate, stone, or other item that is designed to print, 
     imprint, or reproduce the trademark, trade name, or other 
     identifying mark, imprint, or device of another or any 
     likeness of any of the foregoing upon any tobacco product or 
     container or labeling thereof so as to render such tobacco 
     product a counterfeit tobacco product.
       ``(3) The doing of any act that causes a tobacco product to 
     be a counterfeit tobacco product, or the sale or dispensing, 
     or the holding for sale or dispensing, of a counterfeit 
     tobacco product.
       ``(dd) The charitable distribution of tobacco products.
       ``(ee) The failure of a manufacturer or distributor to 
     notify the Attorney General of their knowledge of tobacco 
     products used in illicit trade.''.
       (c) Section 303.--Section 303 (21 U.S.C. 333(f)) is amended 
     in subsection (f)--
       (1) by striking the subsection heading and inserting the 
     following:
       ``(f) Civil Penalties; No-Tobacco-Sale Orders.--'';
       (2) in paragraph (1)(A), by inserting ``or tobacco 
     products'' after ``devices'';
       (3) by redesignating paragraphs (3), (4), and (5) as 
     paragraphs (4), (5), and (6), and inserting after paragraph 
     (2) the following:
       ``(3) If the Secretary finds that a person has committed 
     repeated violations of restrictions promulgated under section 
     906(d) at a particular retail outlet then the Secretary

[[Page S8257]]

     may impose a no-tobacco-sale order on that person prohibiting 
     the sale of tobacco products in that outlet. A no-tobacco-
     sale order may be imposed with a civil penalty under 
     paragraph (1).'';
       (4) in paragraph (4) as so redesignated--
       (A) in subparagraph (A)--
       (i) by striking ``assessed'' the first time it appears and 
     inserting ``assessed, or a no-tobacco-sale order may be 
     imposed,''; and
       (ii) by striking ``penalty'' and inserting ``penalty, or 
     upon whom a no-tobacco-order is to be imposed,'';
       (B) in subparagraph (B)--
       (i) by inserting after ``penalty,'' the following: ``or the 
     period to be covered by a no-tobacco-sale order,''; and
       (ii) by adding at the end the following: ``A no-tobacco-
     sale order permanently prohibiting an individual retail 
     outlet from selling tobacco products shall include provisions 
     that allow the outlet, after a specified period of time, to 
     request that the Secretary compromise, modify, or terminate 
     the order.''; and
       (C) by adding at the end, the following:
       ``(D) The Secretary may compromise, modify, or terminate, 
     with or without conditions, any no-tobacco-sale order.'';
       (5) in paragraph (5) as so redesignated--
       (A) by striking ``(3)(A)'' as redesignated, and inserting 
     ``(4)(A)'';
       (B) by inserting ``or the imposition of a no-tobacco-sale 
     order'' after ``penalty'' the first 2 places it appears; and
       (C) by striking ``issued.'' and inserting ``issued, or on 
     which the no-tobacco-sale order was imposed, as the case may 
     be.''; and
       (6) in paragraph (6), as so redesignated, by striking 
     ``paragraph (4)'' each place it appears and inserting 
     ``paragraph (5)''.
       (d) Section 304.--Section 304 (21 U.S.C. 334) is amended--
       (1) in subsection (a)(2)--
       (A) by striking ``and'' before ``(D)''; and
       (B) by striking ``device.'' and inserting the following: 
     ``, (E) Any adulterated or misbranded tobacco product.'';
       (2) in subsection (d)(1), by inserting ``tobacco product,'' 
     after ``device,'';
       (3) in subsection (g)(1), by inserting ``or tobacco 
     product'' after ``device'' each place it appears; and
       (4) in subsection (g)(2)(A), by inserting ``or tobacco 
     product'' after ``device'' each place it appears.
       (e) Section 702.--Section 702(a) (21 U.S.C. 372(a)) is 
     amended--
       (1) by inserting ``(1)'' after ``(a)''; and
       (2) by adding at the end thereof the following:
       ``(2) For a tobacco product, to the extent feasible, the 
     Secretary shall contract with the States in accordance with 
     paragraph (1) to carry out inspections of retailers in 
     connection with the enforcement of this Act.''.
       (f) Section 703.--Section 703 (21 U.S.C. 373) is amended--
       (1) by inserting ``tobacco product,'' after ``device,'' 
     each place it appears; and
       (2) by inserting ``tobacco products,'' after ``devices,'' 
     each place it appears.
       (g) Section 704.--Section 704 (21 U.S.C. 374) is amended--
       (1) in subsection (a)(1)(A), by inserting ``tobacco 
     products,'' after ``devices,'' each place it appears;
       (2) in subsection (a)(1)(B), by inserting ``or tobacco 
     product'' after ``restricted devices'' each place it appears; 
     and
       (3) in subsection (b), by inserting ``tobacco product,'' 
     after ``device,''.
       (h) Section 705.--Section 705(b) (21 U.S.C. 375(b)) is 
     amended by inserting ``tobacco products,'' after 
     ``devices,''.
       (i) Section 709.--Section 709 (21 U.S.C. 379) is amended by 
     inserting ``or tobacco product'' after ``device''.
       (j) Section 801.--Section 801 (21 U.S.C. 381) is amended--
       (1) in subsection (a)--
       (A) by inserting ``tobacco products,'' after ``devices,'' 
     the first time it appears;
       (B) by inserting ``or section 905(j)'' after ``section 
     510''; and
       (C) by striking ``drugs or devices'' each time it appears 
     and inserting ``drugs, devices, or tobacco products'';
       (2) in subsection (e)(1), by inserting ``tobacco product,'' 
     after ``device,''; and
       (3) by adding at the end the following:
       ``(p)(1) Not later than 2 years after the date of enactment 
     of the Family Smoking Prevention and Tobacco Control Act, and 
     annually thereafter, the Secretary shall submit to the 
     Committee on Health, Education, Labor, and Pensions of the 
     Senate and the Committee on Energy and Commerce of the House 
     of Representatives, a report regarding--
       ``(A) the nature, extent, and destination of United States 
     tobacco product exports that do not conform to tobacco 
     product standards established pursuant to this Act;
       ``(B) the public health implications of such exports, 
     including any evidence of a negative public health impact; 
     and
       ``(C) recommendations or assessments of policy alternatives 
     available to Congress and the Executive Branch to reduce any 
     negative public health impact caused by such exports.
       ``(2) The Secretary is authorized to establish appropriate 
     information disclosure requirements to carry out this 
     subsection.''.
       (k) Section 1003.--Section 1003(d)(2)(C) (as redesignated 
     by section 101(a)) is amended--
       (1) by striking ``and'' after ``cosmetics,''; and
       (2) inserting a comma and ``and tobacco products'' after 
     ``devices''.
       (l) Effective Date for No-Tobacco-Sale Order Amendments.--
     The amendments made by subsection (c), other than the 
     amendment made by paragraph (2) of such subsection, shall 
     take effect upon the issuance of guidance by the Secretary of 
     Health and Human Services--
       (1) defining the term ``repeated violation'', as used in 
     section 303(f) of the Federal Food, Drug, and Cosmetic Act 
     (21 U.S.C. 333(f)) as amended by subsection (c), by 
     identifying the number of violations of particular 
     requirements over a specified period of time at a particular 
     retail outlet that constitute a repeated violation;
       (2) providing for timely and effective notice to the 
     retailer of each alleged violation at a particular retail 
     outlet and an expedited procedure for the administrative 
     appeal of an alleged violation;
       (3) providing that a person may not be charged with a 
     violation at a particular retail outlet unless the Secretary 
     has provided notice to the retailer of all previous 
     violations at that outlet;
       (4) establishing a period of time during which, if there 
     are no violations by a particular retail outlet, that outlet 
     will not be considered to have been the site of repeated 
     violations when the next violation occurs; and
       (5) providing that good faith reliance on the presentation 
     of a false government issued photographic identification that 
     contains the bearer's date of birth does not constitute a 
     violation of any minimum age requirement for the sale of 
     tobacco products if the retailer has taken effective steps to 
     prevent such violations, including--
       (A) adopting and enforcing a written policy against sales 
     to minors;
       (B) informing its employees of all applicable laws;
       (C) establishing disciplinary sanctions for employee 
     noncompliance; and
       (D) requiring its employees to verify age by way of 
     photographic identification or electronic scanning device.

CHAPTER 2--TOBACCO PRODUCT WARNINGS; CONSTITUENT AND SMOKE CONSTITUENT 
                               DISCLOSURE

     SEC. __21. CIGARETTE LABEL AND ADVERTISING WARNINGS.

       Section 4 of the Federal Cigarette Labeling and Advertising 
     Act (15 U.S.C. 1333) is amended to read as follows:

     ``SEC. 4. LABELING.

       ``(a) Label Requirements.--
       ``(1) In general.--It shall be unlawful for any person to 
     manufacture, package, sell, offer to sell, distribute, 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 section, 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 non-
     smokers'.
     `WARNING: Quitting smoking now greatly reduces serious risks 
     to your health'.
       ``(2) Placement; typography; etc.--
       ``(A) In general.--Each label statement required by 
     paragraph (1) shall be located in the upper portion of the 
     front and rear panels of the package, directly on the package 
     underneath the cellophane or other clear wrapping. Except as 
     provided in subparagraph (B), each label statement shall 
     comprise at least the top 30 percent of the front and rear 
     panels of the package. The word `WARNING' shall appear in 
     capital letters and all text shall be in conspicuous and 
     legible 17-point type, unless the text of the label statement 
     would occupy more than 70 percent of such area, in which case 
     the text may be in a smaller conspicuous and legible type 
     size, provided that at least 60 percent of such area is 
     occupied by required text. The text shall be black on a white 
     background, or white on a black background, in a manner that 
     contrasts, by typography, layout, or color, with all other 
     printed material on the package, in an alternating fashion 
     under the plan submitted under subsection (b)(4).
       ``(B) Flip-top boxes.--For any cigarette brand package 
     manufactured or distributed before January 1, 2000, which 
     employs a flip-top style (if such packaging was used for that 
     brand in commerce prior to June 21, 1997), the label 
     statement required by paragraph (1) shall be located on the 
     flip-top area of the package, even if such area is less than 
     25 percent of the area of the front panel. Except as provided 
     in this paragraph, the provisions of this subsection shall 
     apply to such packages.
       ``(3) Does not apply to foreign distribution.--The 
     provisions of this subsection do not apply to a tobacco 
     product manufacturer or distributor of cigarettes which does 
     not manufacture, package, or import cigarettes for sale or 
     distribution within the United States.
       ``(4) Applicability to retailers.--A retailer of cigarettes 
     shall not be in violation of this subsection for packaging 
     that is supplied to the retailer by a tobacco product 
     manufacturer, importer, or distributor and is not altered by 
     the retailer in a way that is material to the requirements of 
     this subsection except that this paragraph shall not relieve 
     a retailer of liability if the retailer

[[Page S8258]]

     sells or distributes tobacco products that are not labeled in 
     accordance with this subsection.
       ``(b) Advertising Requirements.--
       ``(1) In general.--It shall be unlawful for any tobacco 
     product manufacturer, importer, distributor, or retailer of 
     cigarettes to advertise or cause to be advertised within the 
     United States any cigarette unless its advertising bears, in 
     accordance with the requirements of this section, one of the 
     labels specified in subsection (a) of this section.
       ``(2) Typography, etc.--Each label statement required by 
     subsection (a) of this section in cigarette advertising shall 
     comply with the standards set forth in this paragraph. For 
     press and poster advertisements, each such statement and 
     (where applicable) any required statement relating to tar, 
     nicotine, or other constituent (including a smoke 
     constituent) yield shall comprise at least 20 percent of the 
     area of the advertisement and shall appear in a conspicuous 
     and prominent format and location at the top of each 
     advertisement within the trim area. The Secretary may revise 
     the required type sizes in such area in such manner as the 
     Secretary determines appropriate. The word `WARNING' shall 
     appear in capital letters, and each label statement shall 
     appear in conspicuous and legible type. The text of the label 
     statement shall be black if the background is white and white 
     if the background is black, under the plan submitted under 
     paragraph (4) of this subsection. The label statements shall 
     be enclosed by a rectangular border that is the same color as 
     the letters of the statements and that is the width of the 
     first downstroke of the capital `W' of the word `WARNING' in 
     the label statements. The text of such label statements shall 
     be in a typeface pro rata to the following requirements: 45-
     point type for a whole-page broadsheet newspaper 
     advertisement; 39-point type for a half-page broadsheet 
     newspaper advertisement; 39-point type for a whole-page 
     tabloid newspaper advertisement; 27-point type for a half-
     page tabloid newspaper advertisement; 31.5-point type for a 
     double page spread magazine or whole-page magazine 
     advertisement; 22.5-point type for a 28 centimeter by 3 
     column advertisement; and 15-point type for a 20 centimeter 
     by 2 column advertisement. The label statements shall be in 
     English, except that in the case of--
       ``(A) an advertisement that appears in a newspaper, 
     magazine, periodical, or other publication that is not in 
     English, the statements shall appear in the predominant 
     language of the publication; and
       ``(B) in the case of any other advertisement that is not in 
     English, the statements shall appear in the same language as 
     that principally used in the advertisement.
       ``(3) Matchbooks.--Notwithstanding paragraph (2), for 
     matchbooks (defined as containing not more than 20 matches) 
     customarily given away with the purchase of tobacco products, 
     each label statement required by subsection (a) may be 
     printed on the inside cover of the matchbook.
       ``(4) Adjustment by secretary.--The Secretary may, through 
     a rulemaking under section 553 of title 5, United States 
     Code, adjust the format and type sizes for the label 
     statements required by this section or the text, format, and 
     type sizes of any required tar, nicotine yield, or other 
     constituent (including smoke constituent) disclosures, or to 
     establish the text, format, and type sizes for any other 
     disclosures required under the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 301 et. seq.). The text of any such 
     label statements or disclosures shall be required to appear 
     only within the 20 percent area of cigarette advertisements 
     provided by paragraph (2) of this subsection. The Secretary 
     shall promulgate regulations which provide for adjustments in 
     the format and type sizes of any text required to appear in 
     such area to ensure that the total text required to appear by 
     law will fit within such area.
       ``(5) Marketing requirements.--
       ``(A) The label statements specified in subsection (a)(1) 
     shall be randomly displayed in each 12-month period, in as 
     equal a number of times as is possible on each brand of the 
     product and be randomly distributed in all areas of the 
     United States in which the product is marketed in accordance 
     with a plan submitted by the tobacco product manufacturer, 
     importer, distributor, or retailer and approved by the 
     Secretary.
       ``(B) The label statements specified in subsection (a)(1) 
     shall be rotated quarterly in alternating sequence in 
     advertisements for each brand of cigarettes in accordance 
     with a plan submitted by the tobacco product 
     manufacturer, importer, distributor, or retailer to, and 
     approved by, the Secretary.
       ``(C) The Secretary shall review each plan submitted under 
     subparagraph (B) and approve it if the plan--
       ``(i) will provide for the equal distribution and display 
     on packaging and the rotation required in advertising under 
     this subsection; and
       ``(ii) assures that all of the labels required under this 
     section will be displayed by the tobacco product 
     manufacturer, importer, distributor, or retailer at the same 
     time.
       ``(6) Applicability to retailers.--This subsection applies 
     to a retailer only if that retailer is responsible for or 
     directs the label statements required under this section 
     except that this paragraph shall not relieve a retailer of 
     liability if the retailer displays, in a location open to the 
     public, an advertisement that is not labeled in accordance 
     with the requirements of this subsection.''.

     SEC. __22. AUTHORITY TO REVISE CIGARETTE WARNING LABEL 
                   STATEMENTS.

       Section 4 of the Federal Cigarette Labeling and Advertising 
     Act (15 U.S.C. 1333), as amended by section __21, is further 
     amended by adding at the end the following:
       ``(c) Change in Required Statements.--The Secretary may, by 
     a rulemaking conducted under section 553 of title 5, United 
     States Code, adjust the format, type size, and text of any of 
     the label requirements, require color graphics to accompany 
     the text, increase the required label area from 30 percent up 
     to 50 percent of the front and rear panels of the package, or 
     establish the format, type size, and text of any other 
     disclosures required under the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 301 et seq.), if the Secretary finds 
     that such a change would promote greater public understanding 
     of the risks associated with the use of tobacco products.''.

     SEC. __23. STATE REGULATION OF CIGARETTE ADVERTISING AND 
                   PROMOTION.

       Section 5 of the Federal Cigarette Labeling and Advertising 
     Act (15 U.S.C. 1334) is amended by adding at the end the 
     following:
       ``(c) Exception.--Notwithstanding subsection (b), a State 
     or locality may enact statutes and promulgate regulations, 
     based on smoking and health, that take effect after the 
     effective date of the Family Smoking Prevention and Tobacco 
     Control Act, imposing specific bans or restrictions on the 
     time, place, and manner, but not content, of the advertising 
     or promotion of any cigarettes.''.

     SEC. __24. SMOKELESS TOBACCO LABELS AND ADVERTISING WARNINGS.

       Section 3 of the Comprehensive Smokeless Tobacco Health 
     Education Act of 1986 (15 U.S.C. 4402) is amended to read as 
     follows:

     ``SEC. 3. SMOKELESS TOBACCO WARNING.

       ``(a) General Rule.--
       ``(1) It shall be unlawful for any person to manufacture, 
     package, sell, offer to sell, distribute, or import for sale 
     or distribution within the United States any smokeless 
     tobacco product unless the product package bears, in 
     accordance with the requirements of this Act, one of the 
     following labels:

     `WARNING: This product can cause mouth cancer'.
     `WARNING: This product can cause gum disease and tooth loss'.
     `WARNING: This product is not a safe alternative to 
     cigarettes'.
     `WARNING: Smokeless tobacco is addictive'.
       ``(2) Each label statement required by paragraph (1) shall 
     be--
       ``(A) located on the 2 principal display panels of the 
     package, and each label statement shall comprise at least 30 
     percent of each such display panel; and
       ``(B) in 17-point conspicuous and legible type and in black 
     text on a white background, or white text on a black 
     background, in a manner that contrasts by typography, layout, 
     or color, with all other printed material on the package, in 
     an alternating fashion under the plan submitted under 
     subsection (b)(3), except that if the text of a label 
     statement would occupy more than 70 percent of the area 
     specified by subparagraph (A), such text may appear in a 
     smaller type size, so long as at least 60 percent of such 
     warning area is occupied by the label statement.
       ``(3) The label statements required by paragraph (1) shall 
     be introduced by each tobacco product manufacturer, packager, 
     importer, distributor, or retailer of smokeless tobacco 
     products concurrently into the distribution chain of such 
     products.
       ``(4) The provisions of this subsection do not apply to a 
     tobacco product manufacturer or distributor of any smokeless 
     tobacco product that does not manufacture, package, or import 
     smokeless tobacco products for sale or distribution within 
     the United States.
       ``(5) A retailer of smokeless tobacco products shall not be 
     in violation of this subsection for packaging that is 
     supplied to the retailer by a tobacco products manufacturer, 
     importer, or distributor and that is not altered by the 
     retailer unless the retailer offers for sale, sells, or 
     distributes a smokeless tobacco product that is not labeled 
     in accordance with this subsection.
       ``(b) Required Labels.--
       ``(1) It shall be unlawful for any tobacco product 
     manufacturer, packager, importer, distributor, or retailer of 
     smokeless tobacco products to advertise or cause to be 
     advertised within the United States any smokeless tobacco 
     product unless its advertising bears, in accordance with the 
     requirements of this section, one of the labels specified in 
     subsection (a).
       ``(2) Each label statement required by subsection (a) in 
     smokeless tobacco advertising shall comply with the standards 
     set forth in this paragraph. For press and poster 
     advertisements, each such statement and (where applicable) 
     any required statement relating to tar, nicotine, or other 
     constituent yield shall--
       ``(A) comprise at least 20 percent of the area of the 
     advertisement, and the warning area shall be delineated by a 
     dividing line of contrasting color from the advertisement; 
     and
       ``(B) the word `WARNING' shall appear in capital letters 
     and each label statement shall appear in conspicuous and 
     legible type. The text of the label statement shall be black 
     on a white background, or white on a black background, in an 
     alternating fashion under the plan submitted under paragraph 
     (3).
       ``(3)(A) The label statements specified in subsection 
     (a)(1) shall be randomly displayed

[[Page S8259]]

     in each 12-month period, in as equal a number of times as is 
     possible on each brand of the product and be randomly 
     distributed in all areas of the United States in which the 
     product is marketed in accordance with a plan submitted by 
     the tobacco product manufacturer, importer, distributor, or 
     retailer and approved by the Secretary.
       ``(B) The label statements specified in subsection (a)(1) 
     shall be rotated quarterly in alternating sequence in 
     advertisements for each brand of smokeless tobacco product in 
     accordance with a plan submitted by the tobacco product 
     manufacturer, importer, distributor, or retailer to, and 
     approved by, the Secretary.
       ``(C) The Secretary shall review each plan submitted under 
     subparagraph (B) and approve it if the plan--
       ``(i) will provide for the equal distribution and display 
     on packaging and the rotation required in advertising under 
     this subsection; and
       ``(ii) assures that all of the labels required under this 
     section will be displayed by the tobacco product 
     manufacturer, importer, distributor, or retailer at the same 
     time.
       ``(D) This paragraph applies to a retailer only if that 
     retailer is responsible for or directs the label statements 
     under this section, unless the retailer displays in a 
     location open to the public, an advertisement that is not 
     labeled in accordance with the requirements of this 
     subsection.
       ``(c) Television and Radio Advertising.--It is unlawful to 
     advertise smokeless tobacco on any medium of electronic 
     communications subject to the jurisdiction of the Federal 
     Communications Commission.''.

     SEC. __25. AUTHORITY TO REVISE SMOKELESS TOBACCO PRODUCT 
                   WARNING LABEL STATEMENTS.

       Section 3 of the Comprehensive Smokeless Tobacco Health 
     Education Act of 1986 (15 U.S.C. 4402), as amended by section 
     __23, is further amended by adding at the end the following:
       ``(d) Authority To Revise Warning Label Statements.--The 
     Secretary may, by a rulemaking conducted under section 553 of 
     title 5, United States Code, adjust the format, type size, 
     and text of any of the label requirements, require color 
     graphics to accompany the text, increase the required label 
     area from 30 percent up to 50 percent of the front and rear 
     panels of the package, or establish the format, type size, 
     and text of any other disclosures required under the Federal 
     Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.), if the 
     Secretary finds that such a change would promote greater 
     public understanding of the risks associated with the use of 
     smokeless tobacco products.''.

     SEC. __26. TAR, NICOTINE, AND OTHER SMOKE CONSTITUENT 
                   DISCLOSURE TO THE PUBLIC.

       Section 4(a) of the Federal Cigarette Labeling and 
     Advertising Act (15 U.S.C. 1333 (a)), as amended by section 
     __21, is further amended by adding at the end the following:
       ``(4)(A) The Secretary shall, by a rulemaking conducted 
     under section 553 of title 5, United States Code, determine 
     (in the Secretary's sole discretion) whether cigarette and 
     other tobacco product manufacturers shall be required to 
     include in the area of each cigarette advertisement specified 
     by subsection (b) of this section, or on the package label, 
     or both, the tar and nicotine yields of the advertised or 
     packaged brand. Any such disclosure shall be in accordance 
     with the methodology established under such regulations, 
     shall conform to the type size requirements of subsection (b) 
     of this section, and shall appear within the area specified 
     in subsection (b) of this section.
       ``(B) Any differences between the requirements established 
     by the Secretary under subparagraph (A) and tar and nicotine 
     yield reporting requirements established by the Federal Trade 
     Commission shall be resolved by a memorandum of understanding 
     between the Secretary and the Federal Trade Commission.
       ``(C) In addition to the disclosures required by 
     subparagraph (A) of this paragraph, the Secretary may, under 
     a rulemaking conducted under section 553 of title 5, United 
     States Code, prescribe disclosure requirements regarding the 
     level of any cigarette or other tobacco product constituent 
     including any smoke constituent. Any such disclosure may be 
     required if the Secretary determines that disclosure would be 
     of benefit to the public health, or otherwise would increase 
     consumer awareness of the health consequences of the use of 
     tobacco products, except that no such prescribed disclosure 
     shall be required on the face of any cigarette package or 
     advertisement. Nothing in this section shall prohibit the 
     Secretary from requiring such prescribed disclosure through a 
     cigarette or other tobacco product package or advertisement 
     insert, or by any other means under the Federal Food, Drug, 
     and Cosmetic Act (21 U.S.C. 301 et seq.).
       ``(D) This paragraph applies to a retailer only if that 
     retailer is responsible for or directs the label statements 
     required under this section, except that this paragraph shall 
     not relieve a retailer of liability if the retailer sells or 
     distributes tobacco products that are not labeled in 
     accordance with the requirements of this subsection.''.

       CHAPTER 3--PREVENTION OF ILLICIT TRADE IN TOBACCO PRODUCTS

     SEC. __31. LABELING, RECORDKEEPING, RECORDS INSPECTION.

       Chapter IX of the Federal Food, Drug, and Cosmetic Act, as 
     added by section __11, is further amended by adding at the 
     end the following:

     ``SEC. 921. LABELING, RECORDKEEPING, RECORDS INSPECTION.

       ``(a) Origin Labeling.--The label, packaging, and shipping 
     containers of tobacco products for introduction or delivery 
     for introduction into interstate commerce shall bear the 
     statement `sale only allowed in the United States.'
       ``(b) Regulations Concerning Recordkeeping for Tracking and 
     Tracing.--
       ``(1) In general.--Not later than 9 months after the date 
     of enactment of the Family Smoking Prevention and Tobacco 
     Control Act, the Secretary shall promulgate regulations 
     regarding the establishment and maintenance of records by any 
     person who manufactures, processes, transports, distributes, 
     receives, packages, holds, exports, or imports tobacco 
     products.
       ``(2) Inspection.--In promulgating the regulations 
     described in paragraph (1), the Secretary shall consider 
     which records are needed for inspection to monitor the 
     movement of tobacco products from the point of manufacture 
     through distribution to retail outlets to assist in 
     investigating potential illicit trade, smuggling or 
     counterfeiting of tobacco products.
       ``(3) Codes.--The Secretary may require codes on the labels 
     of tobacco products or other designs or devices for the 
     purpose of tracking or tracing the tobacco product through 
     the distribution system.
       ``(4) Size of business.--The Secretary shall take into 
     account the size of a business in promulgating regulations 
     under this section.
       ``(5) Recordkeeping by retailers.--The Secretary shall not 
     require any retailer to maintain records relating to 
     individual purchasers of tobacco products for personal 
     consumption.
       ``(c) Records Inspection.--If the Secretary has a 
     reasonable belief that a tobacco product is part of an 
     illicit trade or smuggling or is a counterfeit product, each 
     person who manufactures, processes, transports, distributes, 
     receives, holds, packages, exports, or imports tobacco 
     products shall, at the request of an officer or employee duly 
     designated by the Secretary, permit such officer or employee, 
     at reasonable times and within reasonable limits and in a 
     reasonable manner, upon the presentation of appropriate 
     credentials and a written notice to such person, to have 
     access to and copy all records (including financial records) 
     relating to such article that are needed to assist the 
     Secretary in investigating potential illicit trade, smuggling 
     or counterfeiting of tobacco products.
       ``(d) Knowledge of Illegal Transaction.--If the 
     manufacturer or distributor of a tobacco product has 
     knowledge which reasonably supports the conclusion that a 
     tobacco product manufactured or distributed by such 
     manufacturer or distributor that has left the control of such 
     person may be or has been--
       ``(A) imported, exported, distributed or offered for sale 
     in interstate commerce by a person without paying duties or 
     taxes required by law; or
       ``(B) imported, exported, distributed or diverted for 
     possible illicit marketing,

     the manufacturer or distributor shall promptly notify the 
     Attorney General of such knowledge.
       ``(2) Knowledge defined.--For purposes of this subsection, 
     the term `knowledge' as applied to a manufacturer or 
     distributor means--
       ``(A) the actual knowledge that the manufacturer or 
     distributor had; or
       ``(B) the knowledge which a reasonable person would have 
     had under like circumstances or which would have been 
     obtained upon the exercise of due care.

     SEC. __32. STUDY AND REPORT.

       (a) Study.--The Comptroller General of the United States 
     shall conduct a study of cross-border trade in tobacco 
     products to--
       (1) collect data on cross-border trade in tobacco products, 
     including illicit trade and trade of counterfeit tobacco 
     products and make recommendations on the monitoring of such 
     trade;
       (2) collect data on cross-border advertising (any 
     advertising intended to be broadcast, transmitted, or 
     distributed from the United States to another country) of 
     tobacco products and make recommendations on how to prevent 
     or eliminate, and what technologies could help facilitate the 
     elimination of, cross-border advertising.
       (b) Report.--Not later than 18 months after the date of 
     enactment of this Act, the Comptroller General of the United 
     States shall submit to the Committee on Health, Education, 
     Labor, and Pensions of the Senate and the Committee on Energy 
     and Commerce of the House of Representatives a report on the 
     study described in subsection (a).

                 Subtitle B--Tobacco Market Transition

     SEC. __40. SHORT TITLE OF SUBTITLE.

       This subtitle may be cited as the ``Tobacco Market 
     Transition Act of 2004''.

           CHAPTER 1--TERMINATION OF CURRENT TOBACCO PROGRAMS

     SEC. __41. TERMINATION OF TOBACCO PRODUCTION ADJUSTMENT 
                   PROGRAMS.

       (a) Tobacco Statistics.--The Act of January 14, 1929 (45 
     Stat. 1079; 7 U.S.C. 501 et seq.) is repealed.
       (b) Tobacco Standards.--The Tobacco Inspection Act (7 
     U.S.C. 511 et seq.) is repealed.
       (c) Tobacco Inspections.--Section 213 of the Tobacco 
     Adjustment Act of 1983 (7 U.S.C. 511r) is repealed.
       (d) Tobacco Control.--The Act of April 25, 1936 (commonly 
     known as the Tobacco Control Act; 7 U.S.C. 515 et seq.), is 
     repealed.

[[Page S8260]]

       (e) Commodity Handling Orders.--Section 8c(2)(A) of the 
     Agricultural Adjustment Act (7 U.S.C. 608c(2)(A)), reenacted 
     with amendments by the Agricultural Marketing Agreement Act 
     of 1937, is amended by striking ``tobacco,''.
       (f) Processing Tax.--Section 9(b) of the Agricultural 
     Adjustment Act (7 U.S.C. 609(b)), reenacted with amendments 
     by the Agricultural Marketing Agreement Act of 1937, is 
     amended--
       (1) in paragraph (2), by striking ``tobacco,''; and
       (2) in paragraph (6)B)(i), by striking ``, or, in the case 
     of tobacco, is less than the fair exchange value by not more 
     than 10 per centum,''.
       (g) Burley Tobacco Import Review.--Section 3 of Public Law 
     98-59 (7 U.S.C. 625) is repealed.
       (h) Declaration of Policy.--Section 2 of the Agricultural 
     Adjustment Act of 1938 (7 U.S.C. 1282) is amended by striking 
     ``tobacco,''.
       (i) Definitions.--Section 301(b) of the Agricultural 
     Adjustment Act of 1938 (7 U.S.C. 1301(b)) is amended--
       (1) in paragraph (3)--
       (A) by striking subparagraph (C); and
       (B) by redesignating subparagraph (D) as subparagraph (C);
       (2) in paragraph (6)(A), by striking ``tobacco,'';
       (3) in paragraph (10)--
       (A) by striking subparagraph (B); and
       (B) by redesignating subparagraph (C) as subparagraph (B);
       (4) in paragraph (11)(B), by striking ``and tobacco'';
       (5) in paragraph (12), by striking ``tobacco,'';
       (6) in paragraph (14)--
       (A) in subparagraph (A), by striking ``(A)''; and
       (B) by striking subparagraphs (B), (C), and (D);
       (7) by striking paragraph (15);
       (8) in paragraph (16)--
       (A) by striking subparagraph (B); and
       (B) by redesignating subparagraph (C) as subparagraph (B);
       (9) by striking paragraph (17); and
       (10) by redesignating paragraph (16) as paragraph (15).
       (j) Parity Payments.--Section 303 of the Agricultural 
     Adjustment Act of 1938 (7 U.S.C. 1303) is amended in the 
     first sentence by striking ``rice, or tobacco,'' and 
     inserting ``or rice,''.
       (k) Marketing Quotas.--Part I of subtitle B of title III of 
     the Agricultural Adjustment Act of 1938 (7 U.S.C. 1311 et 
     seq.) is repealed.
       (l) Administrative Provisions.--Section 361 of the 
     Agricultural Adjustment Act of 1938 (7 U.S.C. 1361) is 
     amended by striking ``tobacco,''.
       (m) Adjustment of Quotas.--Section 371 of the Agricultural 
     Adjustment Act of 1938 (7 U.S.C. 1371) is amended--
       (1) in the first sentence of subsection (a), by striking 
     ``rice, or tobacco'' and inserting ``or rice''; and
       (2) in the first sentence of subsection (b), by striking 
     ``rice, or tobacco'' and inserting ``or rice''.
       (n) Reports and Records.--Section 373 of the Agricultural 
     Adjustment Act of 1938 (7 U.S.C. 1373) is amended--
       (1) by striking ``rice, or tobacco'' each place it appears 
     in subsections (a) and (b) and inserting ``or rice''; and
       (2) in subsection (a)--
       (A) in the first sentence, by striking ``all persons 
     engaged in the business of redrying, prizing, or stemming 
     tobacco for producers,''; and
       (B) in the last sentence, by striking ``$500;'' and all 
     that follows through the period at the end of the sentence 
     and inserting ``$500.''.
       (o) Regulations.--Section 375 of the Agricultural 
     Adjustment Act of 1938 (7 U.S.C. 1375) is amended--
       (1) in subsection (a), by striking ``peanuts, or tobacco'' 
     and inserting ``or peanuts''; and
       (2) by striking subsection (c).
       (p) Eminent Domain.--Section 378 of the Agricultural 
     Adjustment Act of 1938 (7 U.S.C. 1378) is amended--
       (1) in the first sentence of subsection (c), by striking 
     ``cotton, and tobacco'' and inserting ``and cotton''; and
       (2) by striking subsections (d), (e), and (f).
       (q) Burley Tobacco Farm Reconstitution.--Section 379 of the 
     Agricultural Adjustment Act of 1938 (7 U.S.C. 1379) is 
     amended--
       (1) in subsection (a)--
       (A) by striking ``(a)''; and
       (B) in paragraph (6), by striking ``, but this clause (6) 
     shall not be applicable in the case of burley tobacco''; and
       (2) by striking subsections (b) and (c).
       (r) Acreage-Poundage Quotas.--Section 4 of the Act of April 
     16, 1955 (Public Law 89-12; 7 U.S.C. 1314c note), is 
     repealed.
       (s) Burley Tobacco Acreage Allotments.--The Act of July 12, 
     1952 (7 U.S.C. 1315), is repealed.
       (t) Transfer of Allotments.--Section 703 of the Food and 
     Agriculture Act of 1965 (7 U.S.C. 1316) is repealed.
       (u) Advance Recourse Loans.--Section 13(a)(2)(B) of the 
     Food Security Improvements Act of 1986 (7 U.S.C. 1433c-
     1(a)(2)(B)) is amended by striking ``tobacco and''.
       (v) Tobacco Field Measurement.--Section 1112 of the Omnibus 
     Budget Reconciliation Act of 1987 (Public Law 100-203) is 
     amended by striking subsection (c).

     SEC. __42. TERMINATION OF TOBACCO PRICE SUPPORT PROGRAM.

       (a) Parity Price Support.--Section 101 of the Agricultural 
     Act of 1949 (7 U.S.C. 1441) is amended--
       (1) in the first sentence of subsection (a), by striking 
     ``tobacco (except as otherwise provided herein), corn,'' and 
     inserting ``corn'';
       (2) by striking subsections (c), (g), (h), and (i);
       (3) in subsection (d)(3)--
       (A) by striking ``, except tobacco,''; and
       (B) by striking ``and no price support shall be made 
     available for any crop of tobacco for which marketing quotas 
     have been disapproved by producers;''; and
       (4) by redesignating subsections (d) and (e) as subsections 
     (c) and (d), respectively.
       (b) Termination of Tobacco Price Support and No Net Cost 
     Provisions.--Sections 106, 106A, and 106B of the Agricultural 
     Act of 1949 (7 U.S.C. 1445, 1445-1, 1445-2) are repealed.
       (c) Definition of Basic Agricultural Commodity.--Section 
     408(c) of the Agricultural Act of 1949 (7 U.S.C. 1428(c)) is 
     amended by striking ``tobacco,''.
       (d) Review of Burley Tobacco Imports.--Section 3 of Public 
     Law 98-59 (7 U.S.C. 625) is repealed.
       (e) Powers of Commodity Credit Corporation.--Section 5 of 
     the Commodity Credit Corporation Charter Act (15 U.S.C. 714c) 
     is amended by inserting ``(other than tobacco)'' after 
     ``agricultural commodities'' each place it appears.

     SEC. __43. LIABILITY.

       This title and the amendments made by this title shall not 
     affect the liability of any person under any provision of law 
     with respect to any crop of tobacco planted before the 
     effective date prescribed in section __62.

                     CHAPTER 2--TOBACCO ASSISTANCE

     SEC. __51. TOBACCO ASSISTANCE.

       Title III of the Agricultural Adjustment Act of 1938 is 
     amended by inserting after subtitle D (7 U.S.C. 1379a et 
     seq.) the following:

                    ``Subtitle E--Tobacco Assistance

     ``SEC. 380A. DEFINITIONS.

       ``In this subtitle:
       ``(1) Active producer of tobacco.--The term `active 
     producer of tobacco' means a person that--
       ``(A) is actively engaged in the production of tobacco 
     marketed or considered planted; and
       ``(B) shares in the risk of producing the tobacco.
       ``(2) Applicable fiscal year.--The term `applicable fiscal 
     year' means each of fiscal years 2004 through 2013.
       ``(3) Base period.--The term `base period' means the 1-year 
     period ending the June 30 preceding each applicable fiscal 
     year.
       ``(4) Considered planted.--The term `considered planted' 
     means tobacco planted but failed to be produced as a result 
     of a natural disaster, as determined by the Secretary.
       ``(5) Department.--The term `Department' means the 
     Department of Agriculture.
       ``(6) Eligible state.--The term `eligible State' means--
       ``(A) in the case of section 380O, each of the States of 
     Maryland, Pennsylvania, South Carolina, and North Carolina; 
     and
       ``(B) in the case of section 380Q, each of the States of 
     Alabama, Arkansas, Florida, Georgia, Indiana, Kansas, 
     Kentucky, Minnesota, Missouri, North Carolina, Ohio, 
     Oklahoma, South Carolina, Tennessee, Virginia, West Virginia, 
     and Wisconsin.
       ``(7) Impacted community.--The term `impacted community' 
     means a community in an eligible State that is adversely 
     affected by a reduction in gross receipts from the sale of 
     tobacco.
       ``(8) Market share.--The term `market share' means the 
     share of each manufacturer or importer of a class of tobacco 
     product (expressed as a decimal to the fourth place) of the 
     total volume of domestic sales of the class of tobacco 
     product during the base period for the applicable fiscal year 
     for an assessment under section 380T.
       ``(9) Production board.--The term `Production Board' means 
     a Production Board established for a kind of tobacco under 
     section 380H.
       ``(10) Quota tobacco.--The term `quota tobacco' means a 
     kind of tobacco that is subject to a farm marketing quota or 
     farm acreage allotment for the 2002 tobacco marketing years 
     under a marketing quota or allotment program established 
     under part I of subtitle B (as in effect before the effective 
     date of this subtitle).
       ``(11) Tobacco.--The term `tobacco' means each of the 
     following kinds of tobacco:
       ``(A) Flue-cured tobacco, comprising types 11, 12, 13, and 
     14.
       ``(B) Fire-cured tobacco, comprising types 22 and 23.
       ``(C) Dark air-cured tobacco, comprising types 35 and 36.
       ``(D) Virginia sun-cured tobacco, comprising type 37.
       ``(E) Virginia fire-cured tobacco, comprising type 21.
       ``(F) Burley tobacco, comprising type 31.
       ``(G) Cigar-filler and cigar-binder tobacco, comprising 
     types 42, 43, 44, 53, 54, and 55.
       ``(12) Tobacco quality board.--The term `Tobacco Quality 
     Board' means the Tobacco Quality Board established under 
     section 380G.
       ``(13) Tobacco quota holder.--The term `tobacco quota 
     holder' means a person that is considered an tobacco quota 
     holder under section 380B(b).
       ``(14) Tobacco trust fund.--The term `Tobacco Trust Fund' 
     means the Tobacco Trust Fund established under section 380S.
       ``(15) Traditional producer of tobacco.--The term 
     `traditional producer of tobacco'

[[Page S8261]]

     means a person that, for at least 1 of the 2000, 2001, or 
     2002 tobacco marketing years--
       ``(A) was actively engaged in the production of tobacco 
     marketed, or considered planted, under a marketing quota 
     established under part I of subtitle B (as in effect before 
     the effective date of this subtitle); and
       ``(B) shared in the risk of producing the tobacco.
       ``(16) Traditional tobacco county.--
       ``(A) In general.--The term `traditional tobacco county' 
     means a county in the United States that had 1 or more farms 
     operated by traditional producers of tobacco under a 
     marketing quota for at least 1 of the marketing years 
     described in paragraph (15).
       ``(B) Inclusion.--For the purpose of determining the crop 
     acreage base of an active producer of tobacco for a kind of 
     tobacco produced in the State of Georgia under section 
     380I(c)(3), the term `traditional tobacco county' includes a 
     county that is contiguous to a county described in 
     subparagraph (A).

    ``CHAPTER 1--PAYMENTS TO TOBACCO QUOTA HOLDERS AND TRADITIONAL 
                               PRODUCERS

     ``SEC. 380B. TRANSITION PAYMENTS TO TOBACCO QUOTA HOLDERS.

       ``(a) In General.--The Secretary shall make transition 
     payments to each tobacco quota holder.
       ``(b) Tobacco Quota Holder.--
       ``(1) In general.--Except as otherwise provided in this 
     subsection, the Secretary shall consider a person to be a 
     tobacco quota holder under this section if the person held, 
     as of July 1, 2002, a basic quota or farm acreage allotment 
     (as applicable) for quota tobacco established for the 2002 
     tobacco marketing year under a marketing quota program 
     established under part I of subtitle B (as in effect before 
     the effective date of this subtitle).
       ``(2) Effect of purchase contract.--If there was an 
     agreement for the purchase of all or part of a farm described 
     in paragraph (1) as of July 1, 2002, and the parties to the 
     sale are unable to agree to the disposition of eligibility 
     for payments under this section, the Secretary, taking into 
     account any transfer of quota that has been agreed to, shall 
     provide for the equitable division of the payments among the 
     parties by adjusting the determination of who is the tobacco 
     quota holder with respect to particular pounds of the quota.
       ``(3) Effect of agreement for permanent quota transfer.--If 
     the Secretary determines that there was in existence, as of 
     July 1, 2002, an agreement for the permanent transfer of 
     quota, but that the transfer was not completed by that date, 
     the Secretary shall consider the tobacco quota holder to be 
     the party to the agreement that, as of that date, was the 
     owner of the farm to which the quota was to be transferred.
       ``(4) Protected bases.--A person that owns a farm with a 
     tobacco poundage quota that is protected under a conservation 
     reserve program contract entered into under section 1231 of 
     the Food Security Act of 1985 (16 U.S.C. 3831) shall be 
     considered to be a tobacco quota holder with respect to the 
     protected poundage.
       ``(5) Quantity of quota held.--
       ``(A) In general.--A person shall be considered a tobacco 
     quota holder for purposes of this section only with respect 
     to that quantity of quota that qualifies the person as a 
     tobacco quota holder.
       ``(B) Included quota.--The determination of the tobacco 
     poundage amount for which the person qualifies shall--
       ``(i) be based on the quantity of quota held by person on 
     January 1, 2004;
       ``(ii) subject to clause (iii), not be greater than the 
     quantity of quota held by the person for the 2002 crop; and
       ``(iii) take into account--

       ``(I) sales of quota that occurred during the period 
     beginning July 1, 2002, and ending December 31, 2004; and
       ``(II) any transfers of quota that took place after July 1, 
     2002.

       ``(c) Application.--
       ``(1) In general.--To be eligible to receive a payment 
     under this section, a person shall submit to the Secretary an 
     application containing such information as the Secretary may 
     require to demonstrate to the satisfaction of the Secretary 
     that the person is a tobacco quota holder.
       ``(2) Administration.--The application shall be submitted 
     within such time, in such form, and in such manner as the 
     Secretary may require.
       ``(d) Base Quota Level.--
       ``(1) In general.--The Secretary shall establish a base 
     quota level applicable to each tobacco quota holder, as 
     determined under this subsection.
       ``(2) Level.--The base quota level for each tobacco quota 
     holder shall be equal to the quantity of quota that qualifies 
     a person as the tobacco quota holder under subsection (b)(5).
       ``(e) Payment.--The Secretary shall make payments to each 
     tobacco quota holder under subsection (b) in an amount 
     obtained by multiplying--
       ``(1) 80 cents per pound for each of fiscal years 2004 
     through 2013; by
       ``(2) the base quota level established for the quota holder 
     under subsection (d).
       ``(f) Time for Payment.--Subject to section 380D(c), the 
     payments to tobacco quota holders required under this section 
     shall be made by, to the maximum extent practicable, the date 
     that is 180 days after the date of enactment of this subtitle 
     and each November 1 thereafter.

     ``SEC. 380C. DIRECT PAYMENTS TO TRADITIONAL PRODUCERS OF 
                   TOBACCO.

       ``(a) In General.--The Secretary shall make direct payments 
     under this section to traditional producers of tobacco.
       ``(b) Eligibility.--
       ``(1) In general.--To be eligible to receive a payment 
     under this section, a person shall submit to the Secretary an 
     application containing such information as the Secretary may 
     require to demonstrate to the satisfaction of the Secretary 
     that the person is a traditional producer of tobacco.
       ``(2) Administration.--The application shall be submitted 
     within such time, in such form, and in such manner as the 
     Secretary may require.
       ``(c) Base Quota Level.--
       ``(1) In general.--The Secretary shall establish a base 
     quota level applicable to each traditional producer of 
     tobacco, as determined under this subsection.
       ``(2) Flue-cured and burley tobacco.--In the case of Flue-
     cured tobacco (types 11, 12, 13, and 14) and Burley tobacco 
     (type 31), the base quota level for each tobacco quota holder 
     shall be equal to the effective tobacco marketing quota 
     (irrespective of disaster lease and transfers) under part I 
     of subtitle B (as in effect before the effective date of this 
     subtitle) for the 2002 marketing year for quota tobacco 
     produced on the farm.
       ``(3) Other kinds of tobacco.--In the case of each kind of 
     tobacco other than Flue-cured tobacco (types 11, 12, 13, and 
     14) and Burley tobacco (type 31), for the purpose of 
     calculating a payment to a traditional producer of tobacco, 
     the base quota level for the traditional producer of tobacco 
     shall be the quantity obtained by multiplying--
       ``(A) the basic tobacco farm acreage allotment for the 2002 
     marketing year established by the Secretary for quota tobacco 
     produced on the farm; by
       ``(B) the actual yield of the crop of quota tobacco 
     produced on the farm.
       ``(d) Payment.--
       ``(1) In general.--Subject to paragraph (2), the Secretary 
     shall make payments to each traditional producer of tobacco, 
     as determined under subsection (b), in an amount obtained by 
     multiplying--
       ``(A) 40 cents per pound for each of fiscal years 2004 
     through 2013; by
       ``(B) the base quota level established for the traditional 
     producer of tobacco under subsection (c).
       ``(2) Payment rate.--The rate for payments to a traditional 
     producer of quota tobacco under paragraph (1)(A) shall be 
     equal to--
       ``(A) in the case of a person that produced quota tobacco 
     marketed, or considered planted, under a marketing quota for 
     all 3 of the 2000, 2001, and 2002 tobacco marketing years, 
     the rate prescribed under paragraph (1)(A) for the applicable 
     fiscal year;
       ``(B) in the case of a person that produced quota tobacco 
     marketed, or considered planted, under a marketing quota for 
     not more than 2 of the 2000, 2001, and 2002 tobacco marketing 
     years, \2/3\ of the rate prescribed under paragraph (1)(A) 
     for the applicable fiscal year; and
       ``(C) in the case of a person that produced quota tobacco 
     marketed, or considered planted, under a marketing quota for 
     not more than 1 of the 2000, 2001, and 2002 tobacco marketing 
     years, \1/3\ of the rate prescribed under paragraph (1)(A) 
     for the applicable fiscal year.
       ``(e) Time for Payment.--Subject to section 380D(c), the 
     payments to traditional producers of tobacco required under 
     this section shall be made by, to the maximum extent 
     practicable, the date that is 180 days after the date of 
     enactment of this subtitle and each November 1 thereafter.

     ``SEC. 380D. ADMINISTRATION.

       ``(a) Resolution of Disputes.--
       ``(1) In general.--Any dispute regarding the eligibility of 
     a person to receive a payment under this subtitle, or the 
     amount of the payment, may be appealed to the county 
     committee established under section 8 of the Soil 
     Conservation and Domestic Allotment Act (16 U.S.C. 590h) for 
     the county or other area in which the farming operation of 
     the person is located.
       ``(2) National appeals division.--Any adverse determination 
     of a county committee under subsection (a) may be appealed to 
     the National Appeals Division established under subtitle H of 
     the Department of Agriculture Reorganization Act of 1994 (7 
     U.S.C. 6991 et seq.).
       ``(b) Use of Qualified Financial Institutions.--The 
     Secretary may use qualified financial institutions to manage 
     assets, make payments, and otherwise carry out this subtitle.
       ``(c) Advanced Payments.--
       ``(1) In general.--The Secretary shall permit a tobacco 
     quota holder and a traditional producer of tobacco to elect 
     to receive advanced payments for 2 or more fiscal years under 
     this chapter by selecting 1 of 4 advance payment options 
     established by the Secretary, including a lump sum payment 
     option.
       ``(2) Risk.--A tobacco quota holder or traditional producer 
     of tobacco that elects to receive accelerated payments shall 
     bear the expense of the discount in value for acceleration of 
     the payments.
       ``(3) Qualified financial institutions.--
       ``(A) In general.--The Secretary shall provide advanced 
     payments under this subsection through 1 or more qualified 
     financial institutions designated by the Secretary.
       ``(B) Administration.--In providing advanced payments under 
     this subsection, a

[[Page S8262]]

     qualified financial institution shall (in accordance with 
     guidance issued by the Secretary)--
       ``(i) offer the advanced payments regardless of the 
     location or size of the payments;
       ``(ii) apply updated discount rates that vary only by 
     payment term; and
       ``(iii) distribute the advanced payments in accordance with 
     the option elected by the tobacco quota holder or traditional 
     producer of tobacco.
       ``(4) County offices.--A county office of the Department 
     may receive applications and other documentation necessary to 
     receive advanced payments under this subsection, on behalf of 
     the Secretary and qualified financial institutions.
       ``(d) Treatment of Payments.--Payments received by a 
     tobacco quota holder or traditional producer of tobacco under 
     this chapter shall be considered received not earlier than 
     the date the tobacco quota holder or traditional producer of 
     tobacco first receives the payments.

               ``CHAPTER 2--TOBACCO QUALITY AND QUANTITY

     ``SEC. 380G. TOBACCO QUALITY BOARD.

       ``(a) In General.--The Secretary shall establish a 
     permanent advisory board within the Department, to be known 
     as the `Tobacco Quality Board'.
       ``(b) Membership.--
       ``(1) In general.--The Tobacco Quality Board shall consist 
     of 13 members, of which--
       ``(A) 5 members shall be appointed by the Secretary from 
     nominations submitted by representatives of tobacco producers 
     in the United States, including at least--
       ``(i) 1 representative of Flue-cured tobacco producers;
       ``(ii) 1 representative of Burley tobacco producers; and
       ``(iii) 1 representative of dark fire-cured tobacco 
     producers;
       ``(B) 5 members shall be appointed by the Secretary from 
     nominations submitted by representatives of tobacco product 
     manufacturers in the United States, including at least--
       ``(i) 1 representative of smokeless tobacco product 
     manufacturers; and
       ``(ii) 1 representative of export dealers of tobacco; and
       ``(C) 3 at-large members shall be appointed by the 
     Secretary, including at least 1 officer or employee of the 
     Department.
       ``(2) Chairperson.--The Secretary shall appoint the 
     chairperson of the Tobacco Quality Board, with a different 
     member serving as chairperson of the Tobacco Quality Board 
     each term.
       ``(3) Terms.--Each member of the Tobacco Quality Board 
     shall serve for 2-year terms, except that the terms of the 
     members first appointed to the Tobacco Quality Board shall be 
     staggered so as to establish a rotating membership of the 
     Tobacco Quality Board, as determined by the Secretary.
       ``(c) Duties.--The Tobacco Quality Board shall--
       ``(1) determine and describe the physical characteristics 
     of tobacco produced in the United States and unmanufactured 
     tobacco imported into the United States;
       ``(2) assemble and evaluate, in a systematic manner, 
     concerns and problems with the quality of tobacco produced in 
     the United States, expressed by domestic and foreign buyers 
     and manufacturers of tobacco products;
       ``(3) review data collected by Federal agencies on the 
     physical and chemical integrity of tobacco produced in the 
     United States and unmanufactured tobacco imported into the 
     United States, to ensure that tobacco being used in 
     domestically-manufactured tobacco products is of the highest 
     quality and is free from prohibited physical and chemical 
     agents;
       ``(4) investigate and communicate to the Secretary--
       ``(A) conditions with respect to the production of tobacco 
     that discourage improvements in the quality of tobacco 
     produced in the United States; and
       ``(B) recommendations for regulatory changes that would 
     address tobacco quality issues;
       ``(5) conduct oversight regarding tobacco marketing issues 
     (such as opening sales dates and marketing regulations) 
     applicable to auction markets;
       ``(6) provide assistance to Federal agencies on actions 
     taken by the Federal agencies that affect the quality or 
     quantity of tobacco produced in the United States;
       ``(7) not later than a date determined by the Secretary, 
     make recommendations to the Secretary, and the applicable 
     Production Board established for the kind of tobacco, on the 
     range of base years for the maximum crop acreage base under 
     section 380I(c)(3)(B), and for the maximum crop poundage base 
     under section 380I(d)(3)(B), for each crop of each kind of 
     tobacco, except that the range of base years shall be the 
     crop years for the 1998 through 2002 crops unless otherwise 
     determined by the Tobacco Quality Board; and
       ``(8) carry out such other related activities as are 
     assigned to the Tobacco Quality Board by the Secretary.
       ``(d) Administration.--The Secretary shall provide the 
     Tobacco Quality Board with (as determined by the Secretary)--
       ``(1) a staff that is--
       ``(A) experienced in the sampling and analysis of 
     unmanufactured tobacco; and
       ``(B) capable of collecting data and monitoring tobacco 
     production information; and
       ``(2) other resources and information necessary for the 
     Tobacco Quality Board to perform the duties of the Tobacco 
     Quality Board under this subtitle, including--
       ``(A) information concerning acreage devoted to the 
     production of each kind of tobacco; and
       ``(B) international information from the Foreign 
     Agricultural Service.
       ``(e) Applicability of Federal Advisory Committee Act.--The 
     Federal Advisory Committee Act (5 U.S.C. App.) shall not 
     apply to the Tobacco Quality Board.

     ``SEC. 380H. PRODUCTION BOARDS.

       ``(a) In General.--The Secretary shall establish a 
     permanent advisory board for each kind of tobacco, to be 
     known as a `Production Board'.
       ``(b) Membership.--
       ``(1) In general.--Subject to paragraph (2), a Production 
     Board for a kind of tobacco shall consist of--
       ``(A) not more than 10 members appointed by the Secretary 
     from nominations submitted by representatives of producers of 
     that kind of tobacco in the United States; and
       ``(B) 1 officer or employee of the Department appointed by 
     the Secretary.
       ``(2) Allocation of membership.--In appointing members to a 
     Production Board established for a kind of tobacco, the 
     number of members appointed by the Secretary to represent 
     each State shall, to the maximum extent practicable, bear the 
     same ratio to the total number of members of the Production 
     Board as--
       ``(A) the total volume of domestic sales of the kind of 
     tobacco produced in the State during the most recent period 
     for which data is available; bears to
       ``(B) the total volume of domestic sales of the kind of 
     tobacco produced in all States during the most recent period 
     for which data is available.
       ``(3) Chairperson.--The Secretary shall appoint the 
     chairperson of a Production Board, with a different member 
     serving as chairperson of the Production Board each term.
       ``(4) Terms.--Each member of a Production Board shall serve 
     for 2-year terms, except that the terms of the members first 
     appointed to the Production Board shall be staggered so as to 
     establish a rotating membership of the Production Board, as 
     determined by the Secretary.
       ``(c) Duties.--A Production Board established for a kind of 
     tobacco shall--
       ``(1) not later than a date determined by the Secretary, 
     make recommendations to the Secretary on the base year, 
     within the range of base years recommended by the Tobacco 
     Quality Board under section 380G(c)(7), for the maximum crop 
     acreage base under section 380I(c)(3)(B) for each crop of 
     each kind of tobacco; and
       ``(2) carry out such other related activities as are 
     assigned to the Production Board by the Secretary.
       ``(d) Administration.--The Secretary shall provide each 
     Production Board established for a kind of tobacco with (as 
     determined by the Secretary)--
       ``(1) a staff that is knowledgeable about production and 
     marketing of that kind of tobacco; and
       ``(2) other resources and information necessary for the 
     Production Board to perform the duties of the Production 
     Board under this subtitle, including information concerning 
     acreage devoted to the production of each kind of tobacco.
       ``(e) Applicability of Federal Advisory Committee Act.--The 
     Federal Advisory Committee Act (5 U.S.C. App.) shall not 
     apply to a Production Board.

     ``SEC. 380I. TOBACCO PRODUCTION LIMITATION PROGRAMS.

       ``(a) Definitions.--In this section:
       ``(1) Crop acreage base.--The term `crop acreage base' 
     means the crop acreage base for a kind of tobacco for a crop 
     for an active producer of tobacco, as determined by the 
     Secretary.
       ``(2) Crop poundage base.--The term `crop poundage base' 
     means the crop poundage base for a kind of tobacco for a crop 
     for an active producer of tobacco, as determined by the 
     Secretary.
       ``(3) Permitted acreage.--The term `permitted acreage' 
     means the number of acres that may be devoted to the 
     production of a kind of tobacco by an active producer of 
     tobacco, consistent with the annual acreage limitation 
     program, as determined by the Secretary.
       ``(4) Permitted poundage.--The term `permitted poundage' 
     means the number of pounds of a kind of tobacco for a crop 
     may be produced by an active tobacco producer, consistent 
     with the annual poundage limitation program, as determined by 
     the Secretary.
       ``(b) Establishment.--
       ``(1) In general.--The Secretary shall establish for each 
     crop of each kind of tobacco--
       ``(A) an acreage limitation program in accordance with 
     subsection (c); or
       ``(B) a poundage limitation in accordance with subsection 
     (d).
       ``(2) Consultation.--The Secretary shall carry out the 
     acreage limitation program and the poundage limitation 
     program for a kind of tobacco in consultation with the 
     Tobacco Advisory Board and the applicable Production Board 
     established for that kind of tobacco.
       ``(3) Supply.--In carrying out an acreage limitation 
     program or a poundage limitation program for a crop of a kind 
     of tobacco, the Secretary shall determine whether the total 
     supply of that kind of tobacco, in the absence of the 
     respective production limitation

[[Page S8263]]

     program, will be excessive, taking into account the need for 
     an adequate carryover to maintain reasonable and stable 
     supplies and prices.
       ``(4) Announcement.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the Secretary shall announce an acreage limitation program or 
     poundage limitation program for each kind of tobacco not 
     later than December 15 of the calendar year preceding the 
     year in which the crop is harvested.
       ``(B) Special rule for 2004 crop.--In the case of the 2004 
     crop for a kind of tobacco, the Secretary shall announce an 
     acreage limitation program or poundage limitation for each 
     kind of tobacco as soon as practicable after the date of the 
     enactment of the Tobacco Market Transition Act of 2004.
       ``(c) Acreage Limitation Program.--
       ``(1) In general.--Under an acreage limitation program for 
     a crop of a kind of tobacco announced under subsection (b), 
     the limitation shall be achieved by applying a uniform 
     percentage reduction to the crop acreage base for the kind of 
     tobacco for the crop for active producers of that kind of 
     tobacco in each traditional tobacco county, as determined by 
     the Secretary.
       ``(2) Crop acreage bases.--
       ``(A) In general.--The crop acreage base for an active 
     producer of tobacco for a crop of each kind of tobacco shall 
     equal the number of acres that is equal to--
       ``(i) in the case of the 2004 crop year, the average of the 
     acreage planted and considered planted by the active producer 
     of tobacco to the kind of tobacco for harvest in a 
     traditional tobacco county in each of the 5 crop years 
     preceding the crop year, as determined and adjusted by the 
     Secretary (in consultation with the Tobacco Quality Board and 
     the applicable Production Board); and
       ``(ii) in the case of each subsequent crop year, the number 
     of acres planted and considered planted by the active 
     producer of tobacco to the kind of tobacco for harvest in a 
     traditional tobacco county in the preceding crop year, as 
     determined and adjusted by the Secretary (in consultation 
     with the Tobacco Quality Board and the applicable Production 
     Board).
       ``(B) Maximum crop acreage bases.--
       ``(i) In general.--The total quantity of acreage devoted to 
     a kind of tobacco by active producers of tobacco during a 
     crop year shall not exceed the total quantity of acreage 
     devoted to the kind of tobacco by active producers during a 
     crop year determined by the Secretary.
       ``(ii) Adjustment.--If the active producers of a kind of 
     tobacco demonstrate to the Secretary that the application of 
     clause (i) to a crop of a kind of tobacco will result in 
     unbalanced supply and demand conditions, the Secretary may 
     adjust the total quantity of acreage that may be devoted to 
     the kind of tobacco by active producers during the crop year.
       ``(C) Sale, lease, or transfer of crop acreage bases.--An 
     active producer of tobacco shall not sell, lease, or transfer 
     to another person a crop acreage base established for the 
     active producer of tobacco under this paragraph.
       ``(D) Reallocation of unused crop acreage bases.--
       ``(i) County pool.--If an active producer of tobacco with a 
     crop acreage base for a kind of tobacco elects not to use all 
     or part of the crop acreage base to continue to produce that 
     kind of tobacco, the unused crop acreage base shall be placed 
     in a pool established for the traditional tobacco county for 
     reallocation by the Secretary to other producers of that kind 
     of tobacco in the traditional tobacco county that request the 
     crop acreage base.
       ``(ii) State pool.--If any crop acreage base for a kind of 
     tobacco remains after the crop acreage base is made available 
     to producers of that kind of tobacco in the traditional 
     tobacco county in a State, the unused crop acreage base shall 
     be placed in a pool established for the State for 
     reallocation by the Secretary to other producers of that kind 
     of tobacco in a traditional tobacco county.
       ``(iii) New producers.--In reallocating unused crop acreage 
     bases for a kind of tobacco in a traditional tobacco county 
     made available under each of clauses (i) and (ii), the 
     Secretary shall make available to any new producers of that 
     kind of tobacco in the traditional tobacco county up to 10 
     percent of the crop acreage bases available for reallocation 
     for the kind of tobacco in the traditional tobacco county.
       ``(d) Poundage Limitation Program.--
       ``(1) In general.--Under a poundage limitation program for 
     a crop of a kind of tobacco, the Secretary shall achieve the 
     limitation by applying a uniform percentage adjustment to the 
     crop poundage base of an active producer of tobacco for the 
     kind of tobacco in each traditional tobacco county, as 
     determined by the Secretary.
       ``(2) Determination of crop poundage bases.--
       ``(A) 2004 crop year.--The crop poundage base for an active 
     tobacco producer for the 2004 crop of a kind of tobacco shall 
     equal the average of the number of pounds of that kind of 
     tobacco harvested by the active tobacco producer in a 
     traditional tobacco county and marketed in each of the 5 crop 
     years preceding the crop year, as determined by the 
     Secretary.
       ``(B) Subsequent crop years.--In the case of the 2005 and 
     subsequent crops of each kind of tobacco, the crop poundage 
     base for an active tobacco producer of a kind of tobacco 
     shall equal the number of pounds of that kind of tobacco 
     harvested by the active tobacco producer in a traditional 
     tobacco county and marketed in the preceding crop year, as 
     determined and adjusted by the Secretary.
       ``(3) Maximum crop poundage bases.--
       ``(A) In general.--The total number of pounds devoted to a 
     kind of tobacco by active tobacco producers during a crop 
     year shall not exceed the total number of pounds devoted to 
     the kind of tobacco by active tobacco producers during a crop 
     year determined by the Secretary.
       ``(B) Adjustment.--If the active tobacco producers of a 
     kind of tobacco demonstrate to the Secretary that the 
     application of paragraph (1) to a crop of a kind of tobacco 
     will result in unbalanced supply and demand conditions, the 
     Secretary may adjust the total number of pounds that may be 
     devoted to the kind of tobacco by active tobacco producers 
     during the crop year.
       ``(4) Sale, lease, or transfer of crop poundage bases.--
       ``(A) Prohibition.--An active producer of tobacco shall not 
     directly or indirectly sell, lease, or transfer to another 
     person or other legal entity a crop poundage base established 
     for an active tobacco producer under this subsection.
       ``(B) Exception.--If the crop poundage base of an active 
     producer of tobacco for a type of tobacco covers tobacco that 
     was produced by the producer in more than 1 traditional 
     tobacco county, the producer may elect to consolidate the 
     base in a single traditional tobacco county in which the 
     producer bore or shared in the risk of producing a crop of 
     that kind of tobacco for the 2002 crop year.
       ``(5) Reallocation of unused crop poundage bases.--
       ``(A) County pool.--If an active producer of tobacco with a 
     crop poundage base for a kind of tobacco elects not to use 
     all or part of the crop poundage base, the unused crop 
     poundage base shall be placed in a pool established for the 
     traditional tobacco county where the unused crop poundage 
     base was originally located for reallocation by the Secretary 
     to other active producers of tobacco of that kind of tobacco 
     in the traditional tobacco county, in a manner determined by 
     the Secretary.
       ``(B) State pool.--If any crop poundage base for a kind of 
     tobacco remains after the crop poundage base is made 
     available to producers of that kind of tobacco in the 
     traditional tobacco county in a State under subparagraph (A), 
     the unused crop poundage base shall be placed in a pool 
     established for the State for reallocation by the Secretary 
     to other producers of that kind of tobacco in traditional 
     tobacco counties, in a manner determined by the Secretary.
       ``(C) Traditional growing area pool.--If any crop poundage 
     base for a kind of tobacco remains after the crop poundage 
     base is made available to producers of that kind of tobacco 
     under subparagraphs (A) and (B), the unused crop poundage 
     base shall be placed in a pool established for reallocation 
     by the Secretary to other producers of that kind of tobacco 
     in a traditional tobacco county for that kind of tobacco.
       ``(D) New producers.--In reallocating unused crop poundage 
     bases for a kind of tobacco in a traditional tobacco county 
     made available under any of subparagraphs (A) through (C), 
     the Secretary shall make available to any new producers of 
     that kind of tobacco in the traditional tobacco county up to 
     10 percent of the crop poundage bases available for 
     reallocation for the kind of tobacco in the traditional 
     tobacco county.
       ``(e) Compliance.--
       ``(1) Loans, purchases, or payments.--An active producer of 
     tobacco that knowingly produces a kind of tobacco in excess 
     of the permitted acreage or permitted poundage, as 
     applicable, for the kind of tobacco, or violates any lease or 
     transfer requirements of this section, shall be ineligible 
     for any loans, purchases, or payments for that crop of the 
     kind of tobacco.
       ``(2) No carryover.--An active producer of tobacco may not 
     carry over permitted poundage or permitted acreage, as 
     applicable, for a crop of a kind of tobacco, that is not 
     produced by the producer, for production in a subsequent crop 
     year.
       ``(3) Penalties.--
       ``(A) Criminal penalty.--An active producer of tobacco that 
     violates paragraph (1) shall be fined not more than $100,000 
     or imprisoned not more than 2 years, or both.
       ``(B) Civil penalty.--An active producer of tobacco that 
     violates paragraph (2) shall be subject to a civil penalty in 
     an amount not to exceed 2 percent of the value of the kind of 
     tobacco produced by the producer during the applicable crop 
     year, as determined by the Secretary.
       ``(C) Additional penalties.--A civil penalty under 
     subparagraph (B) for a violation shall be in addition to any 
     criminal penalty under subparagraph (A) for the violation.
       ``(D) Jurisdiction to prevent and restrain violations.--A 
     United States district court shall have jurisdiction to 
     prevent and restrain an active producer of tobacco from 
     producing a kind of tobacco in excess of the permitted 
     acreage for the kind of tobacco.
       ``(4) Compliance with conservation and agricultural 
     requirements.--As a condition of the establishment of a crop 
     acreage base or crop poundage base, as applicable, for active 
     producers of tobacco for a crop of a kind of tobacco, the 
     active producers of tobacco shall agree, during the crop year 
     for which the crop acreage base or crop poundage base is 
     established--

[[Page S8264]]

       ``(A) to comply with applicable conservation requirements 
     under subtitle B of title XII of the Food Security Act of 
     1985 (16 U.S.C. 3811 et seq.);
       ``(B) to comply with applicable wetland protection 
     requirements under subtitle C of title XII of the Act (16 
     U.S.C. 3821 et seq.);
       ``(C) to use the land of the active producer of tobacco, in 
     a quantity equal to the crop acreage base for an agricultural 
     or conserving use, and not for a nonagricultural commercial 
     or industrial use, as determined by the Secretary; and
       ``(D) to effectively control noxious weeds and otherwise 
     maintain the land in accordance with sound agricultural 
     practices, as determined by the Secretary, if the 
     agricultural or conserving use involves the noncultivation of 
     any portion of the land referred to in subparagraph (C).

       ``CHAPTER 3--TOBACCO COMMUNITY ECONOMIC DEVELOPMENT GRANTS

     ``SEC. 380O. TOBACCO COMMUNITY ECONOMIC DEVELOPMENT GRANTS.

       ``(a) In General.--The Secretary shall make grants to 
     eligible States in accordance with this section to pay the 
     cost of carrying out economic development initiatives in 
     impacted communities.
       ``(b) Application.--To be eligible to receive payments 
     under this section, an eligible 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 eligible 
     State will carry out using amounts received under the grant; 
     and
       ``(2) a description of the State department of agriculture 
     that will administer amounts received under the grant.
       ``(c) Amount of Grant.--From the amounts available to carry 
     out this section, the Secretary shall allot--
       ``(1) $20,000,000 to the State of Maryland;
       ``(2) $14,000,000 to the State of Pennsylvania; and
       ``(3) $50,000,000 to the State of South Carolina; and
       ``(4) 50,000,000 to the State of North Carolina.
       ``(d) Payments.--An eligible State that has an application 
     approved by the Secretary under subsection (b) shall be 
     entitled to a payment under this section, in 5 equal 
     installments, in an amount that is equal to its allotment 
     under subsection (c).
       ``(e) Use of Funds.--Amounts received by an eligible State 
     under this section shall be used to carry out economic 
     development activities in impacted communities of the 
     eligible State, as determined by the eligible State.
       ``(f) Termination Date.--The authority provided by this 
     section terminates on September 30, 2008.

          ``CHAPTER 4--COMPETITIVE GRANTS FOR TOBACCO RESEARCH

     ``SEC. 380Q. COMPETITIVE GRANTS FOR TOBACCO RESEARCH.

       ``(a) In General.--Notwithstanding any other provision of 
     law, the Secretary shall make competitive grants under 
     section 406 of the Agricultural Research, Extension, and 
     Education Reform Act of 1998 (7 U.S.C. 7626) to colleges and 
     universities located in eligible States to conduct research--
       ``(1) to assist tobacco producers to diversify crops or 
     implement other means to reduce or eliminate the reliance of 
     the producers on the production of tobacco or to promote 
     alternative uses of tobacco or enhance the quality of tobacco 
     produced in the United States; and
       ``(2) to foster and facilitate development, evaluation, and 
     implementation of economically viable new agricultural 
     technologies and enterprises for rural communities.
       ``(b) Grant Distribution.--In making grants under this 
     section, the Secretary shall provide for an equitable 
     distribution of the grants based on the volume of each kind 
     of tobacco that is produced in each eligible State, as 
     determined by the Secretary
       ``(c) Termination Date.--The authority provided by this 
     section terminates on September 30, 2008.

                          ``CHAPTER 5--FUNDING

     ``SEC. 380S. TOBACCO TRUST FUND.

       ``(a) Establishment.--There is established in the Commodity 
     Credit Corporation a revolving trust fund to be used in 
     carrying out this subtitle (referred to in this section as 
     the `Fund'), consisting of--
       ``(1) such amounts as are deposited in the Fund under 
     subsection (b);
       ``(2) such amounts as are necessary from the Commodity 
     Credit Corporation; and
       ``(3) any interest earned on investment of amounts in the 
     Fund under subsection (d).
       ``(b) Deposits.--Revenues from assessments collected under 
     section 380T shall be deposited in the Fund.
       ``(c) Expenditures.--
       ``(1) In general.--Subject to paragraphs (2) and (3) and 
     notwithstanding any other provision of law, in addition to 
     any other funds that may be available, the Secretary may use 
     from the Fund such amounts as the Secretary determines are 
     necessary--
       ``(A) to make payments to tobacco quota holders and 
     traditional producers under chapter 1;
       ``(B) to pay necessary expenses of the Tobacco Quality 
     Board and Production Boards and to carry out the acreage 
     limitation program under chapter 2;
       ``(C) to make tobacco community economic development grants 
     under chapter 3, in an amount equal to $16,800,000 for each 
     of fiscal years 2004 through 2008;
       ``(D) to make competitive grants for tobacco research under 
     chapter 4, in an amount equal to $12,000,000 for each of 
     fiscal years 2004 through 2008;
       ``(E) to make grants to each association that has entered 
     into a loan agreement with the Commodity Credit Corporation 
     under section 106A or 106B of the Agricultural Act of 1949 (7 
     U.S.C. 1445-1, 1445-2) (as in effect before the effective 
     date of this subtitle) to assist the association to 
     transition to alternative methods of marketing tobacco in 
     accordance with a plan approved by the Secretary, with the 
     grants allocated on the basis of the proportion of tobacco 
     marketed by each association, in an amount not to exceed 
     $1,000,000 for each association for each kind of tobacco for 
     each of fiscal years 2004 through 2008;
       ``(F) to make payments to appropriate tobacco warehouse 
     associations, as determined by the Secretary, in an amount 
     not to exceed $500,000 for each of fiscal years 2004 through 
     2008;
       ``(G) to pay administrative costs incurred by the Secretary 
     in carrying out this subtitle; and
       ``(H) to reimburse the Commodity Credit Corporation for 
     costs incurred by the Commodity Credit Corporation under 
     paragraph (2).
       ``(2) Expenditures by commodity credit corporation.--
       ``(A) In general.--Subject to subparagraph (B) and 
     notwithstanding any other provision of law, the Secretary 
     shall use funds of the Commodity Credit Corporation to make 
     payments under paragraph (1).
       ``(B) Reimbursement to commodity credit corporation.--Not 
     later than January 1, 2013, the Commodity Credit Corporation 
     shall be reimbursed in full, with interest, for all funds of 
     the Commodity Credit Corporation expended under subparagraph 
     (A).
       ``(3) Administrative expenses.--
       ``(A) In general.--An amount not to exceed $20,000,000 for 
     each fiscal year of the amounts in the Fund shall be 
     available to pay the administrative expenses necessary to 
     carry out this subtitle.
       ``(B) Termination date.--The authority provided by this 
     paragraph terminates on September 30, 2013.
       ``(d) Investment of Amounts.--
       ``(1) In general.--The Commodity Credit Corporation shall 
     invest such portion of the Fund as is not, in the judgment of 
     the Commodity Credit Corporation, required to meet current 
     withdrawals.
       ``(2) Interest-bearing obligations.--Investments may be 
     made only in interest-bearing obligations of the United 
     States.
       ``(3) Acquisition of obligations.--For the purpose of 
     investments under paragraph (1), obligations may be 
     acquired--
       ``(A) on original issue at the issue price; or
       ``(B) by purchase of outstanding obligations at the market 
     price.
       ``(4) Sale of obligations.--Any obligation acquired by the 
     Fund may be sold by the Commodity Credit Corporation at the 
     market price.
       ``(5) Credits to fund.--The interest on, and the proceeds 
     from the sale or redemption of, any obligations held in the 
     Fund shall be credited to and form a part of the Fund.
       ``(e) Administration.--In administering the Fund, the 
     Secretary shall make payments, reimburse agencies of the 
     Department, and accept deposits without regard to limitations 
     on total amounts of allotments and fund transfers under 
     section 11 of the Commodity Credit Corporation Charter Act 
     (15 U.S.C. 714i).

     ``SEC. 380T. ASSESSMENTS.

       ``(a) Definition of Gross Domestic Volume.--In this 
     section, the term `gross domestic volume' means the volume of 
     tobacco products--
       ``(1) removed (as defined by section 5702 of the Internal 
     Revenue Code of 1986); and
       ``(2) not exempt from tax under chapter 52 of the Internal 
     Revenue Code of 1986 at the time of their removal under that 
     chapter or the Harmonized Tariff Schedule of the United 
     States (19 U.S.C. 1202).
       ``(b) Assessments.--The Secretary, acting through the 
     Commodity Credit Corporation, shall impose quarterly 
     assessments, calculated in accordance with this section, on 
     each tobacco product manufacturer and tobacco product 
     importer that sells tobacco products in domestic commerce in 
     the United States.
       ``(c) Tobacco Trust Fund.--Assessments collected under this 
     section shall be deposited in the Tobacco Trust Fund.
       ``(d) Assessment for Each Class of Tobacco Product.--
       ``(1) Allocation by class of tobacco products.--The 
     percentage of the total amount to be assessed against, and 
     paid by, the manufacturers and importers of each class of 
     tobacco product in each applicable fiscal year shall be--
       ``(A) for cigarette manufacturers and importers, 99.409 
     percent;
       ``(B) for snuff manufacturers and importers, 0.428 percent;
       ``(C) for chewing tobacco manufacturers and importers, 
     0.098 percent;
       ``(D) for pipe tobacco manufacturers and importers, 0.021 
     percent; and
       ``(E) for roll-your-own tobacco manufacturers and 
     importers, 0.044 percent.
       ``(2) Adjustment.--The Secretary shall adjust the 
     percentage of the total amount to be assessed against, as 
     determined under paragraph (1), and paid by, the 
     manufacturers

[[Page S8265]]

     and importers of each class of tobacco product in each 
     applicable fiscal year by multiplying the percentage of the 
     total amount to be assessed, as determined under paragraph 
     (1), by a fraction--
       ``(A) the numerator of which is the total volume of 
     domestic sales of that class of tobacco product during the 
     preceding applicable fiscal year; and
       ``(B) the denominator of which is the total volume of 
     domestic sales of that class of tobacco product during fiscal 
     year 2003.
       ``(3) Total assessment.--
       ``(A) In general.--The total amount to be assessed against 
     all manufacturers and importers of all classes of tobacco 
     product in each applicable fiscal year shall be equal to the 
     amount required to carry out this subtitle during the 
     applicable fiscal year, as determined by the Secretary.
       ``(B) Additional amount.--
       ``(i) In general.--If the amount to be assessed after the 
     application of paragraphs (1) and (2) is insufficient to 
     carry out this subtitle during the applicable fiscal year, 
     the Secretary may assess such additional amount as the 
     Secretary determines to be necessary to carry out this 
     subtitle during the applicable fiscal year.
       ``(ii) Allocation.--The additional amount shall be 
     allocated to the manufacturers and importers of each class of 
     tobacco product in the same manner and based on the same 
     percentages applied in determining the total amount to be 
     assessed under paragraph (1), as adjusted under paragraph (2) 
     during the applicable fiscal year.
       ``(4) Notification of assessments.--
       ``(A) In general.--The Secretary shall notify all 
     manufacturers and importers of tobacco products of the amount 
     of the assessment for each quarterly payment period.
       ``(B) Contents.--The notice for a quarterly payment period 
     shall describe gross domestic sales and market shares for the 
     quarterly payment period and conform with the requirements of 
     subsection (i).
       ``(5) Timing of assessment payments.--
       ``(A) In general.--Assessments shall be collected at the 
     end of each calendar year quarter.
       ``(B) Base period quarter.--The assessment for a calendar 
     year quarter shall correspond to the base period quarter that 
     ended at the end of the preceding calendar year quarter.
       ``(C) Amounts.--Subject to subparagraph (D), beginning with 
     the calendar quarter ending on December 31 of each applicable 
     fiscal year, the payments over 4 calendar quarters shall be 
     sufficient to cover--
       ``(i) the payments required under chapter 1 on November 1 
     of that same applicable fiscal year; and
       ``(ii) other expenditures from the Tobacco Trust Fund 
     required under section 380S during the base quarter periods 
     corresponding to those 4 calendar quarters.
       ``(D) Special rule.--In the case of payments required under 
     chapter 1 that are due on September 30, 2004, the assessments 
     shall be paid on that same date and correspond to the first 
     base period of 6 months.
       ``(e) Allocation of Assessment Within Each Class of Tobacco 
     Product.--
       ``(1) In general.--The assessment for each class of tobacco 
     product shall be allocated on a pro rata basis among 
     manufacturers and importers based on each manufacturer's or 
     importer's share of gross domestic volume.
       ``(2) Limitation.--No manufacturer or importer shall be 
     required to pay an assessment that is based on a share that 
     is in excess of the manufacturer's or importer's share of 
     domestic volume.
       ``(f) Allocation of Total Assessments by Market Share.--The 
     amount of the assessment for each class of tobacco product to 
     be paid by each manufacturer or importer of the class of 
     tobacco product under subsection (b) shall be determined for 
     each quarterly payment period by multiplying--
       ``(1) the market share of the manufacturer or importer, as 
     calculated with respect to that payment period, of the class 
     of tobacco product; by
       ``(2) the total amount of the assessment for that quarterly 
     payment period under subsection (d), for the class of tobacco 
     product.
       ``(g) Determination of Volume of Domestic Sales.--
       ``(1) In general.--The calculation of the volume of 
     domestic sales of a class of tobacco product by a 
     manufacturer or importer, and by all manufacturers and 
     importers as a group, shall be made by the Secretary based on 
     information provided by the manufacturers and importers 
     pursuant to subsection (h), as well as any other relevant 
     information provided to or obtained by the Secretary.
       ``(2) Gross domestic volume.--The volume of domestic sales 
     shall be calculated based on gross domestic volume.
       ``(3) Measurement.--For purposes of the calculations under 
     this subsection and the certifications under subsection (h) 
     by the Secretary, the volumes of domestic sales shall be 
     measured by--
       ``(A) in the case of cigarettes, the numbers of cigarettes; 
     and
       ``(B) in the case of other classes of tobacco products, in 
     terms of number of pounds, or fraction thereof, of those 
     products.
       ``(h) Measurement of Volume of Domestic Sales.--
       ``(1) In general.--Each manufacturer and importer of 
     tobacco products shall submit to the Secretary a certified 
     copy of each of the returns or forms described by paragraph 
     (2) that are required to be filed with a Federal Government 
     agency on the same date that those returns or forms are 
     filed, or required to be filed, with the agency.
       ``(2) Returns and forms.--The returns and forms described 
     by this paragraph are those returns and forms that relate 
     to--
       ``(A) the removal of tobacco products into domestic 
     commerce (as defined by section 5702 of the Internal Revenue 
     Code of 1986); and
       ``(B) the payment of the taxes imposed under charter 52 of 
     the Internal Revenue Code of 1986, including AFT Form 5000.24 
     and United States Customs Form 7501 under currently 
     applicable regulations.
       ``(3) Penalties.--
       ``(A) In general.--Any person that knowingly fails to 
     provide information required under this subsection or that 
     provides false information under this subsection shall be 
     subject to the penalties described in section 1003 of title 
     18, United States Code.
       ``(B) Additional civil penalty.--In addition, the Secretary 
     may assess against the person a civil penalty in an amount 
     not to exceed 2 percent of the value of the kind of tobacco 
     products manufactured or imported by the person during the 
     applicable fiscal year, as determined by the Secretary.
       ``(i) Assessment Notification; Content.--
       ``(1) In general.--The Secretary shall provide each 
     manufacturer or importer subject to an assessment under 
     subsection (b) with written notice setting forth the amount 
     to be assessed against the manufacturer or importer for the 
     applicable quarterly period.
       ``(2) Deadline.--The notice for a quarterly period shall be 
     provided not later than 30 days before the date payment is 
     due under subsection (d)(5).
       ``(3) Contents.--The notice shall include the following 
     information with respect to the quarterly period used by the 
     Secretary in calculating the amount:
       ``(A) The total combined assessment for all manufacturers 
     and importers of tobacco products.
       ``(B) The total assessment with respect to the class of 
     tobacco products manufactured or imported by the manufacturer 
     or importer.
       ``(C) Any adjustments to the percentage allocations among 
     the classes of tobacco products made pursuant to subsection 
     (d)(2).
       ``(D) The volume of gross sales of the applicable class of 
     tobacco product treated as made by the manufacturer or 
     importer for purposes of calculating the manufacturer's or 
     importer's market share under subsection (f).
       ``(E) The total volume of gross sales of the applicable 
     class of tobacco product that the Secretary treated as made 
     by all manufacturers and importers for purposes of 
     calculating the manufacturer's or importer's market share 
     under subsection (f).
       ``(F) The manufacturer's or importer's market share of the 
     applicable class of tobacco product as determined by the 
     Secretary under subsection (f).
       ``(G) The market share, as determined by the Secretary 
     under subsection (f), of each other manufacturer and 
     importer, for each applicable class of tobacco product.
       ``(j) Challenge to Assessment.--
       ``(1) Appeal to secretary.--A manufacturer or importer 
     subject to this section may contest an assessment imposed on 
     the person under this section by notifying the Secretary not 
     later than 10 business days after receiving the assessment 
     notification required by subsection (i).
       ``(2) Escrow.--The manufacturer and importer may place into 
     escrow, in accordance with rules promulgated by the 
     Secretary, only the portion of the assessment being 
     challenged in good faith pending final determination of the 
     assessment under this subsection.
       ``(3) Information.--The Secretary shall by regulation 
     establish a procedure under which a person contesting an 
     assessment under this subsection may present information to 
     the Secretary to demonstrate that the assessment is 
     incorrect, including information to demonstrate the 
     following:
       ``(A) The total combined assessment imposed by the 
     Secretary on all manufacturers and importers is excessive.
       ``(B) The Secretary's allocation of the total assessment 
     among the classes of tobacco products is incorrect.
       ``(C) The total volume of gross domestic sales of all 
     manufacturers and importers of the relevant class of tobacco 
     product calculated by the Secretary under subsection (f) is 
     incorrect.
       ``(D) The level of gross domestic sales attributed to the 
     person by the Secretary for purposes of calculating the 
     person's market share under subsection (f) exceeds the 
     person's actual domestic sales of that class of tobacco 
     product.
       ``(E) The amount of the assessment attributed to the person 
     by the Secretary exceeds the person's pro rata share based on 
     the person's share of gross domestic sales.
       ``(4) Challenge.--
       ``(A) In general.--In challenging an assessment under this 
     subsection, the manufacturer or importer may use any 
     information that is available, including third party data on 
     industry or individual company sales volumes.
       ``(B) Incorrect determination.--The information may 
     constitute evidence sufficient to establish that the 
     Secretary's initial determination was incorrect, in which 
     event the assessment shall be revised so that the 
     manufacturer or importer is required only to pay the amount 
     correctly determined.

[[Page S8266]]

       ``(5) Time for review.--Not later than 30 days after 
     receiving notice from a manufacturer or importer under 
     paragraph (2), the Secretary shall--
       ``(A) decide whether the information provided to the 
     Secretary pursuant to that paragraph, and any other 
     information that the Secretary determines, is appropriate is 
     sufficient to establish that the original assessment was 
     incorrect; and
       ``(B) make any revisions necessary to ensure that each 
     manufacturer and importer pays only its correct pro rata 
     share of total gross domestic volume from all sources.
       ``(6) Immediate payment of undisputed amounts.--The 
     regulations promulgated by the Secretary under paragraph (2) 
     shall provide for the immediate payment by a manufacturer or 
     importer challenging an assessment of that portion of the 
     assessment that is not in dispute.
       ``(7) Judicial review.--
       ``(A) In general.--Any manufacturer or importer aggrieved 
     by a determination of the Secretary with respect to the 
     amount of any assessment may seek review of the determination 
     in the United States District Court for the District of 
     Columbia or for the district in which the manufacturer or 
     importer resides or has its principal place of business at 
     any time following exhaustion of the administrative remedies 
     under this subsection.
       ``(B) Time limits.--Administrative remedies shall be deemed 
     exhausted if no decision by the Secretary is made within the 
     time limits established under paragraph (5).
       ``(C) Excessive assessments.--The court shall restrain 
     collection of the excessive portion of any assessment or 
     order a refund of excessive assessments already paid, along 
     with interest calculated at the rate prescribed in section 
     3717 of title 31, United States Code, if it finds that the 
     Secretary's determination is not supported by a preponderance 
     of the information available to the Secretary.
       ``(8) Regulations.--Not later than 180 days after the date 
     of enactment of this subtitle, the Secretary shall promulgate 
     regulations to implement this subsection (in accordance with 
     section 301 of the Tobacco Market Transition Act of 2004).
       ``(k) Use of Qualified Financial Institutions.--The 
     Secretary may use qualified financial institutions to manage 
     assets, make payments, and otherwise carry out this subtitle.
       ``(l) Termination Date.--The authority provided by this 
     section terminates on September 30, 2013.

     ``SEC. 380U. COMMODITY CREDIT CORPORATION.

       The Secretary shall use the funds, facilities, and 
     authorities of the Commodity Credit Corporation to carry out 
     this subtitle, to remain available until expended.

     ``SEC. 380V. TRANSITION PROVISIONS.

       ``(a) Tobacco Stocks.--
       ``(1) In general.--To provide for the orderly disposition 
     of quota tobacco held by an association that has entered into 
     a loan agreement with the Commodity Credit Corporation under 
     section 106A or 106B of the Agricultural Act of 1949 (7 
     U.S.C. 1445-1, 1445-2) (referred to in this section as an 
     `association'), loan pool stocks for each kind of tobacco 
     held by the association shall be disposed of in accordance 
     with this subsection.
       ``(2) Associations.--For each kind of tobacco held by an 
     association, the proportion of loan pool stocks for each kind 
     of tobacco held by the association that shall be transferred 
     to the association shall be equal to--
       ``(A) the amount of funds held by the association in the No 
     Net Cost Tobacco Fund and the No Net Cost Tobacco Account 
     established under sections 106A and 106B of the Agricultural 
     Act of 1949 (7 U.S.C. 1445-1, 1445-2), respectively, for the 
     kind of tobacco; divided by
       ``(B) the average list price per pound for the kind of 
     tobacco, as determined by the Secretary.
       ``(3) Commodity credit corporation.--Any loan pool stocks 
     of a kind of tobacco of an association that are not disposed 
     of in accordance with paragraph (2) shall be--
       ``(A) transferred by the association to the Commodity 
     Credit Corporation; and
       ``(B) disposed of in a manner determined by the Secretary.
       ``(b) No Net Cost Funds.--
       ``(1) In general.--Any funds in the No Net Cost Tobacco 
     Fund or the No Net Cost Tobacco Account of an association 
     established under sections 106A and 106B of the Agricultural 
     Act of 1949 (7 U.S.C. 1445-1, 1445-2), respectively, that 
     remain after the application of subsection (a) and sections 
     106A and 106B of the Agricultural Act of 1949 (7 U.S.C. 1445, 
     1445-1) (as in effect before the effective date of this 
     subtitle) shall be transferred to the association for 
     distribution to traditional producers of tobacco in 
     accordance with a plan approved by the Secretary.
       ``(2) Associations with no loan pool stocks.--In the case 
     of an association that does not hold any loan pool stocks 
     that are covered by subsection (a)(2), any funds in the No 
     Net Cost Tobacco Fund or the No Net Cost Tobacco Account of 
     the association established under sections 106A and 106B of 
     the Agricultural Act of 1949 (7 U.S.C. 1445-1, 1445-2), 
     respectively, shall be transferred to the association for 
     distribution to traditional producers of tobacco in 
     accordance with a plan approved by the Secretary.
       ``(c) Reimbursement to Commodity Credit Corporation.--There 
     shall be transferred from the Tobacco Trust Fund to each No 
     Net Cost Tobacco Fund or the No Net Cost Tobacco Account of 
     an association established under sections 106A and 106B of 
     the Agricultural Act of 1949 (7 U.S.C. 1445-1, 1445-2), 
     respectively, such amounts as the Secretary determines will 
     be adequate to reimburse the Commodity Credit Corporation for 
     any net losses that the Corporation may sustain under its 
     loan agreements with the association.''.

     SEC. __52. TOBACCO INSURANCE RESEARCH AND DEVELOPMENT.

       (a) In General.--Section 522(b)(1) of the Federal Crop 
     Insurance Act (7 U.S.C. 1522(b)(1)) is amended--
       (1) by redesignating subparagraphs (A) and (B) as clauses 
     (i) and (ii), respectively, and indenting appropriately;
       (2) by striking ``The Corporation'' and inserting the 
     following--
       ``(A) In general.--The''; and
       (3) by adding at the end the following:
       ``(B) Tobacco research and development.--Subject to the 
     availability of funds under subsection (e)(5), the 
     Corporation shall provide a payment to reimburse an applicant 
     for research and development costs directly related to a 
     policy that is--
       ``(i) submitted to the Board and approved by the Board 
     under section 508(h) for reinsurance;
       ``(ii) if applicable, offered for sale to producers; and
       ``(iii) addresses risk in the production of tobacco.''.
       (b) Assessments.--Section 522(e) of the Federal Crop 
     Insurance Act (7 U.S.C. 1522(e)) is amended by adding at the 
     end the following:
       ``(5) Tobacco assessment.--
       ``(A) In general.--Effective for each marketing year for a 
     kind of tobacco for which a commodity-specific plan of 
     insurance is offered under this Act, subject to subparagraphs 
     (B) through (D), each producer and purchaser of that kind of 
     tobacco shall remit to the Insurance Fund established under 
     section 516(c) a nonrefundable marketing assessment in an 
     amount determined by the Secretary pursuant to subparagraphs 
     (B) and (C).
       ``(B) Total amount.--The total amount of producer and 
     purchaser assessments for a kind of tobacco collected under 
     this paragraph shall be equal to the amount that is necessary 
     to carry out subsection (b)(1)(B).
       ``(C) Administration.--Producer and purchaser assessments 
     for a kind of tobacco under this paragraph--
       ``(ii) shall be determined in such a manner that producers 
     and purchasers share equally, to the maximum extent 
     practicable, in paying assessments required under this 
     paragraph; and
       ``(ii) shall not exceed 5 cents per pound.
       ``(D) Termination.--Effective beginning with the 2010 crop 
     of each kind of tobacco, the Secretary may terminate the 
     collection of assessments for that kind of tobacco if the 
     Secretary determines that further research and development 
     under subsection (b)(1)(B) would not be productive.''.
       (c) Insurance Fund.--Section 516(c)(1) of the Federal Crop 
     Insurance Act (7 U.S.C. 1516(c)(1)) is amended by inserting 
     ``assessments for tobacco research made available under 
     section 522(e)(5),'' after ``under subsection (a)(2),''.

     SEC. __53. CONFORMING AMENDMENTS.

       Section 320B(c)(1) of the Agricultural Adjustment Act of 
     1938 (7 U.S.C. 1314h(c)(1)) is amended--
       (1) by inserting ``(A)'' after ``(1)'';
       (2) by striking ``by'' at the end and inserting ``or''; and
       (3) by adding at the end the following:
       ``(B) in the case of the 2003 marketing year, the price 
     support rate for the kind of tobacco involved in effect under 
     section 106 of the Agricultural Act of 1949 (7 U.S.C. 1445) 
     at the time of the violation; by''.

                       CHAPTER 3--IMPLEMENTATION

     SEC. __61. REGULATIONS.

       (a) In General.--The Secretary of Agriculture may 
     promulgate such regulations as are necessary to implement 
     this subtitle and the amendments made by this subtitle.
       (b) Procedure.--The promulgation of the regulations and 
     administration of this subtitle and the amendments made by 
     this subtitle shall be made without regard to--
       (1) the notice and comment provisions of section 553 of 
     title 5, United States Code;
       (2) the Statement of Policy of the Secretary of Agriculture 
     effective July 24, 1971 (36 Fed. Reg. 13804), relating to 
     notices of proposed rulemaking and public participation in 
     rulemaking; and
       (3) chapter 35 of title 44, United States Code (commonly 
     known as the ``Paperwork Reduction Act'').
       (c) Congressional Review of Agency Rulemaking.--In carrying 
     out this section, the Secretary shall use the authority 
     provided under section 808 of title 5, United States Code.

     SEC. __62. EFFECTIVE DATE.

       This subtitle and the amendments made by this subtitle 
     shall apply to the 2004 and subsequent crops of each kind of 
     tobacco.
                                 ______
                                 
  SA 3564. Mr. ROBERTS (for himself and Mr. Rockefeller) submitted an 
amendment intended to be proposed by him to the bill S. 2386, to 
authorize appropriations for fiscal year 2005 for intelligence and 
intelligence-related activities of the United States Government, the 
Intelligence Community Management Account, and the Central Intelligence 
Agency Retirement and

[[Page S8267]]

Disability System, and for other purposes; which was ordered to lie on 
the table; as follows:

       On page 9, line 16, add at the end the following: ``Such 
     funds shall remain available until September 30, 2005.''.
       On page 19, strike lines 7 through 15 and insert the 
     following:
       ``(1) In general.--The Director may establish and 
     administer a nonofficial cover employee retirement system for 
     designated employees (and the spouse, former spouses, and 
     survivors of such designated employees). A des-
       On page 21, strike line 18 and all that follows through 
     page 22, line 1, and insert the following:
       ``(iii) in the case of a designated employee who 
     participated in an employee investment retirement system 
     established under paragraph (1) and is converted to coverage 
     under subchapter III of chapter 84 of title 5, United States 
     Code, the Director may transmit any or all amounts of that 
     designated employee in that employee investment retirement 
     system (or similar
       On page 22, strike line 24 and all that follows through 
     page 23, line 5, and insert the following:
       ``(1) In general.--The Director may establish and 
     administer a nonofficial cover employee health insurance 
     program for designated employees (and the family of such 
     designated employees). A designated employee
       On page 25, strike lines 6 through 12 and insert the 
     following:
       ``(1) In general.--The Director may establish and 
     administer a nonofficial cover employee life insurance 
     program for designated employees (and the family of such 
     designated employees). A designated employee may not
       On page 27, line 8, strike ``(B)(iii)'' and insert 
     ``(B)(iv)''.

                          ____________________