Calendar No. 353 105 th CONGRESS 2 d Session S. 1415 Report No. 105-180 To reform and restructure the processes by which tobacco products are manufactured, marketed, and distributed, to prevent the use of tobacco products by minors, to redress the adverse health effects of tobacco use, and for other purposes. ______________ IN THE SENATE OF THE UNITED STATES November 7, 1998 Mr. McCain (for himself, Mr. Hollings , Mr. Breaux, and Mr. Gorton ) introduced the following bill; which was read twice and referred to the Committee on Commerce, Science, and Transportation May 1, 1998 Reported by Mr. McCain, with an amendment in the nature of a substitute [Strike all after the enacting clause and insert the part printed in italic] _____________ A BILL To reform and restructure the processes by which tobacco products are manufactured, marketed, and distributed, to prevent the use of tobacco products by minors, to redress the adverse health effects of tobacco use, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, [Text of S. 1415, as introduced, inserted here in linetype] SECTION 1. SHORT TITLE; TABLE OF CONTENTS. (a) Short Title._ This Act may be cited as the ``National Tobacco Policy and Youth Smoking Reduction Act''. (b) Table of Contents._ The table of contents for this Act is as follows: Sec. 1. Short title; table of contents. Sec. 2. Findings. Sec. 3. Purpose. Sec. 4. Scope and effect. Sec. 5. Non-preemption of more restrictive laws. Sec. 6. Definitions. Sec. 7. Notification if youthful cigarette smoking restrictions increase youthful pipe and cigar smoking. Sec. 8. Liability limitations disappear if manufacturers challenge advertising limits. Sec. 9. FTC jurisdiction not affected. Sec. 10. Congressional review provisions. Title I_Regulation of the Tobacco Industry Subtitle A_Jurisdiction, Etc., of Food and Drug Administration Sec. 101. Amendment of Federal Food, Drug, and Cosmetic Act of 1938. ``Chapter IX_Tobacco Products ``Sec. 901. FDA authority over tobacco products ``Sec. 902. Adulterated tobacco products. ``Sec. 903. Misbranded tobacco products. ``Sec. 904. Submission of health information to the Secretary. ``Sec. 905. Registration. ``Sec. 906. General provisions respecting control of tobacco products. ``Sec. 907. Performance standards. ``Sec. 908. Notification and other remedies ``Sec. 909. Records and reports on tobacco products. ``Sec. 910. Premarket review of certain tobacco products. ``Sec. 911. Judicial review. ``Sec. 912. Postmarket surveillance ``Sec. 913. Reduced risk tobacco products. ``Sec. 914. Preservation of State and local authority. ``Sec. 915. Tobacco Products Scientific Advisory Committee. ``Sec. 916. Equal treatment of retail outlets. Sec. 102. Conforming and other amendments to general provisions. Subtitle B_Advertising Sec. 121. Advertising provisions in protocol. Sec. 122. Tobacco product labeling and advertising . Sec. 123. Point-of-sale restrictions. Title II_Reductions in Underage Tobacco Use Subtitle A_Underage Use Sec. 201. Goals for reducing underage tobacco use. Sec. 202. Look-back assessment. Sec. 203. Substantial non-attainment of required reductions. Sec. 204. Definitions. Subtitle B_State Enforcement Incentives Sec. 211. Compliance bonus fund. Sec. 212. Block grants. Sec. 213. State enforcement incentives. Sec. 214. Conforming change. Subtitle C_Other Programs Sec. 221. National smoking cessation program. Sec. 222. National tobacco-free public education program. Sec. 223. National community action program. Sec. 224. State retail licensing program. Title III_Tobacco Product Warnings and Smoke Constituent Disclosure Subtitle A_Product Warnings, Labeling and Packaging Sec. 301. Cigarette label and advertising warnings. ``Sec. 4. Labeling. Sec. 302. Authority to revise cigarette warning label statements. Sec. 303. Smokeless tobacco labels and advertising warnings. ``Sec. 3. Smokeless tobacco warning. Sec. 304. Authority to revise smokeless tobacco product warning labelstatements. Sec. 305. Tar, nicotine, and other smoke constituent disclosure to thepublic. Subtitle B_Testing and Reporting of Tobacco Product Smoke Constituents Sec. 311. Regulation requirement. Title IV_National Tobacco Settlement Trust Fund Subtitle A_General Payment Provisions Sec. 401. Establishment of trust fund. Sec. 402. State litigation settlement account. Sec. 403. Payments by industry Sec. 404. Adjustments. Sec. 405. Tax treatment of payments. Sec. 406. Enforcement for nonpayment. Sec. 407. Administrative provisions. Subtitle B_General Spending Provisions Sec. 411. Implementing and enforcement funds. Sec. 412. Improving child care and early childhood development. Title V_Standards to Reduce Involuntary Exposure to Tobacco Smoke Sec. 501. Definitions. Sec. 502. Smoke-free environment policy. Sec. 503. Citizen actions. Sec. 504. Preemption. Sec. 505. Regulations. Sec. 506. Effective date. Sec. 507. State choice. Title VI_Application to Indian Tribes. Sec. 601. Short title. Sec. 602. Findings and purposes. Sec. 603. Application of tobacco-related provisions to native Americans. Sec. 604. State tobacco excise tax compliance. Title VII_Civil Liability of Manufacturers of Tobacco Products Sec. 701. Definitions Sec. 702. Application. Sec. 703. Preemption and relationship to other law. Sec. 704. Governmental claims and Castano civil actions. Sec. 705. Concurrent jurisdiction; Federal cause of action; actions; damages;liability. Sec. 706. Payment of tobacco claim settlements and judgments. Sec. 707. Attorney's fees and expenses. Sec. 708. Non-participating manufacturers. Sec. 709. Conforming amendments. Title VIII_Tobacco Industry Compliance and Employee Protection from Reprisals Sec. 801. Tobacco industry compliance accountability requirements. Sec. 802. Tobacco product manufacturer employee protection. Title IX_Public Disclosure of Tobacco Industry Documents Sec. 901. Findings. Sec. 902. Applicability. Sec. 903. National Tobacco Document Depository. Sec. 904. Privilege and trade secret claims. Sec. 905. Disclosure by the depository. Sec. 906. National Tobacco Documents Review Board. Sec. 907. Resolution of disputed privilege and trade secret claims. Sec. 908. Appeal of board decision. Sec. 909. Miscellaneous. Sec. 910. Penalties. Sec. 911. Definitions. Title X_Long-Term Economic Assistance for Farmers Sec. 1001. Short title. Sec. 1002. Definitions. Subtitle A_Tobacco Community Revitalization Trust Fund Sec. 1011. Establishment of trust fund. Sec. 1012. Contributions by tobacco product manufacturers and importers. Subtitle B_Tobacco Market Transition Assistance Sec. 1021. Payments for lost tobacco quota. Sec. 1022. Industry payments for all department costs associated with tobaccoproduction. Sec. 1023. Tobacco community economic development grants. Sec. 1024. Flue-cured tobacco production permits. ``Sec. 317a. Flue-cured tobacco production permits. Sec. 1025. Modifications in federal tobacco programs. Subtitle C_Farmer and Worker Transition Assistance Sec. 1031. Tobacco worker transition program. Sec. 1032. Farmer opportunity grants. ``Subpart 9_Farmer Opportunity Grants ``Sec. 420d. Statement of purpose. ``Sec. 420e. Program authority; amount and determinations; applications. ``Sec. 420f. Student eligibility. Subtitle D_Immunity Sec. 1041. General immunity for tobacco producers and tobacco warehouseowners. Title XI_Miscellaneous Subtitle A_Prohibitions Relating to Tobacco Products and Children Sec. 1101. Short title. Sec. 1102. Prohibitions relating to tobacco products and children. ``Sec. 804. Prohibition on sale or distribution of tobacco products tochildren. ``Sec. 805. Labeling. Sec. 1103. Enforcement. Sec. 1104. Reward. Sec. 1105. Definitions. Sec. 1106. Amendments to Public Health Service Act. ``Title XXVIII_National Efforts to Reduce Youth Smoking ``Subtitle E_Reducing Youth Smoking and Tobacco-Related Diseases Through Research ``Sec. 2801. Study by the Institute of Medicine. ``Sec. 2802. National tobacco task force. ``Sec. 2803. Research activities of the Centers for Disease Control andPrevention. ``Sec. 2804. Research activities of the National Institutes of Health. Sec. 1107. Ban on distribution of tobacco products produced by child labor. Subtitle B_Federal Licensing of Tobacco Product Distribution Sec. 1121. Licensing of Tobacco Product Distribution. Subtitle C_International Provisions Sec. 1131. International tobacco control trust fund. Sec. 1132. American center on global health and tobacco. Sec. 1133. Prohibition on use of funds to facilitate the exportation orpromotion of tobacco. Sec. 1134. Harmonization with United States international commitments andobligations. Subtitle D_Prevention of Tobacco Smuggling Sec. 1141. Definitions. Sec. 1142. Tobacco product labeling requirements. Sec. 1143. Requirements for the tracking of tobacco products. Sec. 1144. Tobacco product permits. Sec. 1145. Prohibitions. Sec. 1146. Pricing and labeling of products sold on military installations orby native Americans. Sec. 1147. Prohibition against sale of tobacco products in or to duty-freeshops or forwarding through or manufacture in trade zones. Sec. 1148. Jurisdiction; penalties; compromise of liability. Sec. 1149. Amendments to the Contraband Cigarette Trafficking Act. Sec. 1150. Authorization of appropriations. Subtitle E_Antitrust Exemption Sec. 1161. Limited Antitrust Exemption. Subtitle F_Special Provisions Concerning Programs for Women, Minorities, and Others Sec. 1171. Research related to patterns of smoking by women and minorities. Sec. 1172. Counter-advertising programs. Sec. 1173. Prevention activities of community and migrant health centers. Subtitle G_Sense of the Senate Sec. 1181. Sense of the Senate. Subtitle H_Ban On Sale Of Tobacco Products Through The Use Of Vending Machines Sec. 1191. Ban of sale of tobacco products through the use of vendingmachines. Title XII_Tobacco Asbestos Trust Fund Sec. 1201. Definitions. Sec. 1202. Tobacco Asbestos Trust Fund. Sec. 1203. Payments from fund I. Sec. 1204. Payments from fund II. Sec. 1205. Transfers from National Tobacco Settlement Trust Fund. Sec. 1206. Rules for claims against asbestos trusts, asbestos defendants, andtobacco companies. Title XIII_Veterans' Benefits Sec. 1301. Recovery by secretary of veterans affairs. ``Part VII_Recovery of Compensation Costs for Tobacco-Related Disability or Death ``Chapter 91_Tort Liability for Disability or Death Due to Tobacco Use `` 9101. Recovery by Secretary of Veterans Affairs `` 9102. Regulations `` 9103. Limitation or repeal of other provisions for recovery ofcompensation `` 9104. Exemption from annual limitation on damages SEC. 2. FINDINGS. The Congress finds the following: (1) The use of tobacco products by the Nation's children is a pediatric disease of epic and worsening 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. Such products 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) Civil actions against tobacco product manufacturers and others are pending in Federal and State courts arising from the use, marketing, and sale of tobacco products. Among these actions are cases brought by the attorneys general of more than 40 States, certain cities and counties, and the Commonwealth of Puerto Rico, and other parties, including Indian tribes, and class actions brought by private claimants (such as in the Castano Civil Actions), seeking to recover monies expended to treat tobacco-related diseases and for the protection of minors and consumers, as well as penalties and other relief for violations of antitrust, health, consumer protection, and other laws. (13) Civil actions have been filed throughout the United States against tobacco product manufacturers and their distributors, trade associations, law firms, and consultants on behalf of individuals or classes of individuals claiming to be dependent upon and injured by tobacco products. (14) These civil actions are complex, time-consuming, expensive, and burdensome for both the litigants and Federal and State courts. To date, these civil actions have not resulted in sufficient redress for smokers or non-governmental third-party payers. To the extent that governmental entities have been or may in the future be compensated for tobacco-related claims they have brought, it is not now possible to identify what portions of such past or future recoveries can be attributed to their various antitrust, health, consumer protection, or other causes of action. (15) It is in the public interest for Congress to adopt comprehensive public health legislation because of tobacco's unique position in the Nation's history and economy; the need to prevent the sale, distribution, marketing and advertising of tobacco products to persons under the minimum legal age to purchase such products; and the need to educate the public, especially young people, regarding the health effects of using tobacco products. (16) The public interest requires a timely, fair, equitable, and consistent result that will serve the public interest by (A) providing that a portion of the costs of treatment for diseases and adverse health effects associated with the use of tobacco products is borne by the manufacturers of these products, and (B) restricting throughout the Nation the sale, distribution, marketing, and advertising of tobacco products only to persons of legal age to purchase such products. (17) Public health authorities estimate that the benefits to the Nation of enacting Federal legislation to accomplish these goals would be significant in human and economic terms. (18) Reducing the use of tobacco by minors by 50 percent would prevent well over 60,000 early deaths each year and save up to $43 billion each year in reduced medical costs, improved productivity, and the avoidance of premature deaths. (19) 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. (20) In 1995, the tobacco industry spent close to $4,900,000,000 to attract new users, retain current users, increase current consumption, and generate favorable long-term attitudes toward smoking and tobacco use. (21) Tobacco product advertising often misleadingly portrays the use of tobacco as socially acceptable and healthful to minors. (22) 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. (23) 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. (24) 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. (25) Tobacco advertising increases the size of the tobacco market by increasing consumption of tobacco products including increasing tobacco use by young people. (26) Children are more influenced by tobacco advertising than adults, they smoke the most advertised brands, and children as young as 3 to 6 years old can recognize a character associated with smoking at the same rate as they recognize cartoons and fast food characters. (27) Tobacco company documents indicate that young people are an important and often crucial segment of the tobacco market. (28) Comprehensive advertising restrictions will have a positive effect on the smoking rates of young people. (29) 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. (30) International experience shows that advertising regulations that are stringent and comprehensive have a greater impact on overall tobacco use and young people's use than weaker or less comprehensive ones. Text-only requirements, while not as stringent as a ban, will help reduce underage use of tobacco products while preserving the informational function of advertising. (31) It is in the public interest for Congress to adopt legislation to address the public health crisis created by actions of the tobacco industry. (32) If, as a direct or indirect result of this Act, the consumption of tobacco products in the United States is reduced significantly, then tobacco farmers, their families, and their communities may suffer economic hardship and displacement, notwithstanding their lack of involvement in the manufacturing and marketing of tobacco products. SEC. 3. PURPOSE. The purposes of this Act are_ (1) to confirm the authority of 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 require the tobacco industry to fund both Federal and State oversight of the tobacco industry from on-going payments by tobacco product manufacturers; (3) to require tobacco product manufacturers to provide ongoing funding to be used for an aggressive Federal, State, and local enforcement program and for a nationwide retail licensing system to prevent minors from obtaining tobacco products, while expressly permitting the States to adopt additional measures that further restrict or eliminate the products' use; (4) to ensure that the Food and Drug Administration and the States may continue to address issues of particular concern to public health officials, especially the use of tobacco by young people and dependence on tobacco; (5) to impose severe financial surcharges on tobacco product manufacturers if they do not substantially reduce tobacco use by young people during the next decade; (6) to authorize appropriate agencies of the Federal government to set national standards controlling the manufacture of tobacco products and the identity, public disclosure, and amount of ingredients used in such products; (7) to provide new and flexible enforcement authority to ensure that the tobacco industry makes efforts to develop and introduce less harmful tobacco products; (8) to confirm the Food and Drug Administration's authority to regulate the levels of tar, nicotine, and other harmful components of tobacco products; (9) in order to ensure that adults are better informed, to require tobacco product manufacturers to disclose all 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; (10) to impose on tobacco product manufacturers the obligation to provide funding for a variety of public health initiatives; (11) to establish a minimum Federal standard for stringent restrictions on smoking in public places, with funding to enforce such standard derived from payments made by tobacco product manufacturers, while also to permit State, Tribal, and local governments to enact additional and more stringent standards or elect not to be covered by the Federal standard; (12) to authorize and fund from payments by tobacco product manufacturers a continuing national counter-advertising and tobacco control campaign which seeks to educate consumers and discourage children and adolescents from beginning to use tobacco products, and which encourages current users of tobacco products to discontinue using such products; (13) to establish a mechanism to compensate the States in settlement of their various claims against tobacco product manufacturers; (14) to authorize and to fund from payments by tobacco product manufacturers a nationwide program of smoking cessation administered through State and Tribal governments and the private sector; (15) to establish and fund from payments by tobacco product manufacturers a National Tobacco Settlement Fund; (16) to affirm the rights of individuals to access to the courts, to civil trial by jury, and to damages to compensate them for harm caused by tobacco products; (17) 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; (18) to impose appropriate regulatory controls on the tobacco industry; and (19) to protect tobacco farmers and their communities from the economic impact of this Act by providing full funding for and the continuation of the Federal tobacco program and by providing funds for farmers and communities to develop new opportunities in tobacco-dependent communities. SEC. 4. SCOPE AND EFFECT. (a) Intended Effect._ This Act is not intended to_ (1) establish a precedent with regard to any other industry, situation, circumstance, or legal action; (2) express any position of the Congress with regard to the imposition of punitive damages in general or as applied to any specific industry, case, controversy, or product other than as provided in this Act; (3) provide any authority regarding the imposition of, or the appropriateness of imposing, punitive damages; or (4) except as provided in this Act, affect any action pending in State, Tribal, or Federal court, or any agreement, consent decree, or contract of any kind. (b) Taxation._ Notwithstanding any other provision of law, this Act and the amendments made by this Act shall not affect any authority of the Secretary of the Treasury (including any authority assigned to the Bureau of Alcohol, Tobacco and Firearms) or of State or local governments with regard to taxation for tobacco or tobacco products. (c) Agricultural Activities._ The provisions of this Act 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. 5. NON-PREEMPTION OF MORE RESTRICTIVE LAWS. (a) Age Restrictions._ Nothing in this Act or the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.), as amended by this Act, shall prevent a Federal agency (including the Armed Forces), a State or its political subdivisions, or the government of an Indian tribe from adopting and enforcing additional measures that further restrict or prohibit tobacco product sale to, use by, and accessibility to persons under the legal age of purchase established by such agency, State, subdivision, or government of an Indian tribe. (b) Additional Measures._ Except as otherwise expressly provided in this Act, nothing in this Act, the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.), or rules promulgated under such Acts, shall limit the authority of a Federal agency (including the Armed Forces), a State or its political subdivisions, 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, including laws, rules, regulations, or other measures relating to or prohibiting the sale, distribution, possession, exposure to, or use of tobacco products by persons of any age that are in addition to the provisions of this Act and the amendments made by this Act. No provision of this Act or amendment made by this Act shall limit or otherwise affect any State, Tribal, or local taxation of tobacco products. (c) State Law Not Affected._ Except as otherwise expressly provided in this Act, nothing in this Act, the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.), or rules promulgated under such Acts, shall supersede the authority of the States, pursuant to State law, to expend funds provided by this Act. SEC. 6. DEFINITIONS. In this Act: (1) 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. (2) 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. (3) 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. (4) 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)). (5) Consent decree._ The term ``consent decree'' means a consent decree among participating tobacco product manufacturers whose substantive terms are substantially equivalent to the form consent decree published for purposes of this paragraph in the Congressional Record. (6) Distributor._ The term ``distributor'' as regards a tobacco product means any person who furthers the distribution of cigarette or smokeless tobacco, whether domestic or imported, at any point from the original place of manufacture to the person who sells or distributes the product to individuals for personal consumption. Common carriers are not considered distributors for purposes of this Act. (7) Indian country; Indian lands._ The terms ``Indian country'' and ``Indian lands'' have the meaning given the term ``Indian country'' by section 1151 of title 18, United States Code, and includes lands under the jurisdiction of an Indian tribe or tribal organization. (8) 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)). (9) 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)). (10) Tobacco product manufacturer._ Except in titles VII and X, the term ``tobacco product manufacturer'' means any person, including any repacker or relabeler, who manufactures, fabricates, assembles, processes, or labels a finished cigarette or smokeless tobacco product. (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 cigarettes or smokeless tobacco are offered for sale, sold, or otherwise distributed to consumers. (13) Point-of-sale._ The term ``point-of-sale'' means any location at which a consumer can purchase or otherwise obtain cigarettes or smokeless tobacco for personal consumption. (14) Retailer._ The term ``retailer'' means any person who sells cigarettes or smokeless tobacco to individuals for personal consumption, or who operates a facility where self-service displays of tobacco products are permitted. (15) 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. (16) Secretary._ Except in title VII and where the context otherwise requires, the term ``Secretary'' means the Secretary of Health and Human Services. (17) Smokeless tobacco._ The term ``smokeless tobacco'' means any product that consists of cut, ground, powdered, or leaf tobacco that contains nicotine and that is intended to be placed in the oral cavity. (18) State._ The term ``State'' means any State of the United States and, for purposes of this Act, 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. (19) Tobacco product._ The term ``tobacco product'' means cigarettes, cigarette tobacco, smokeless tobacco, little cigars, roll-your-own tobacco, and fine cut products. (20) 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. (21) Master Settlement Agreement._ The term ``Master Settlement Agreement'' means the agreement either previously entered or to be entered into by the States, the participating tobacco product manufacturers, and the Trade Associations implementing the June 20, 1997, Proposed Resolution, and published in the Congressional Record for purposes of this Act. (22) Participating tobacco product manufacturer._ The term ``participating tobacco product manufacturer'' means_ (A) a tobacco product manufacturer that, within 45 days after the date of enactment of this Act (or within 45 days after the date on which such manufacturer first manufactures tobacco products for sale or distribution in the United States, if such date is after the date of enactment of this Act)_ (i) becomes a signatory to the Master Settlement Agreement; and (ii) enters into consent decrees with each State that made a request within the time period described in section 704(b); or (B) a surviving entity established by a participating tobacco product manufacturer. (23) Non-participating tobacco product manufacturer._ The term ``non-participating tobacco product manufacturer'' means a tobacco product manufacturer that is not a participating tobacco product manufacturer. (24) Protocol._ The term ``Protocol'' means the agreement to be entered into by the Secretary of Health and Human Services with the participating tobacco product manufacturers under this Act. SEC. 7. NOTIFICATION IF YOUTHFUL CIGARETTE SMOKING RESTRICTIONS INCREASE YOUTHFUL PIPE AND CIGAR SMOKING. The Secretary shall notify the Congress if the Secretary determines that a decrease in underage use of tobacco products resulting from the enactment of this Act has produced an increase in underage use of pipe tobacco and cigars. SEC. 8. LIABILITY LIMITATIONS DISAPPEAR IF TOBACCO PRODUCT MANUFACTURER CHALLENGES ADVERTISING LIMITS. If a tobacco product manufacturer, or any party acting on behalf of, in collusion with, or at the request of, a tobacco product manufacturer brings an action to have the advertising restrictions imposed on tobacco products under this Act, or the amendments made by this Act, or the application of those regulations to any person or circumstance held to be unconstitutional or otherwise invalid under the laws of the United States then the provisions of title VII relating to limitations on liability shall not apply to that manufacturer, beginning on the date on which the action is filed in a court of competent jurisdiction, and continuing until such time as the action is withdrawn or dismissed. SEC. 9. FTC JURISDICTION NOT AFFECTED. (a) In General._ Except where expressly provided in this Act, nothing in this Act 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. (b) Enforcement by FTC._ Any advertising that violates this Act, part 897 of title 21, Code of Federal Regulations, or the Protocol 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). SEC. 10. CONGRESSIONAL REVIEW PROVISIONS. In accordance with section 801 of title 5, United States Code, the Congress shall review, and may disapprove, any rule under this Act that is subject to section 801. This section does not apply to the rule set forth in part 897 oftitle 21, Code of Federal Regulations. TITLE I_REGULATION OF THE TOBACCO INDUSTRY Subtitle A_Jurisdiction, etc., of Food and Drug Administration SEC. 101. AMENDMENT OF FEDERAL FOOD, DRUG, AND COSMETIC ACT OF 1938. (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: ``(kk) 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).''. (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. 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 health claim is made for such products under section 201(g)(1)(C) or 201(h)(3). ``(b) Applicability._ This chapter shall apply to all tobacco products subject to the provisions of part 897 of title 21, Code of Federal Regulations, and to any other tobacco products that the Secretary by regulation deems to be subject to this chapter. ``(c) FDA Rule in Effect._ The provisions of part 897 of title 21, Code of Federal Regulations, shall be deemed to be lawful and to have been lawfully promulgated under the authority of this chapter. The provisions of such part that are not in effect on the date of enactment of this chapter shall take effect as in such part or upon such later date as determined by the Secretary by order. ``(d) Scope._ ``(1) Nothing in this chapter shall be construed to affect the regulation of drugs and devices under chapter V that are not tobacco products by the Secretary under the Federal Food, Drug and Cosmetic Act. ``(2) The provisions of this chapter shall not apply to tobacco leaf that is not in the possession of the manufacturer, 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 whatsoever to enter onto a farm owned by a producer of tobacco leaf without the written consent of such producer. 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. 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. For purposes of the preceding sentence, the term `controlled by' means a member of the same controlled group of corporations as that term is used in section 52(a) of the Internal Revenue Code of 1986, or under common control within the meaning of the regulations promulgated under section 52(b) of such Code. ``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 poisonous or deliterious 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 container 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 performance standard established under section 907 unless such tobacco product is in all respects in conformity with such standard; ``(5) it is required by section 910(a) to have premarket approval, is not exempt under section 906(f), and does not have an approved application in effect; ``(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 a tobacco product for which an exemption has been granted under section 906(f) for investigational use and the person who was granted such exemption or any investigator who uses such tobacco product under such exemption fails to comply with a requirement prescribed by or under such section. ``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; and ``(B) an accurate statement of the quantity of the contents in terms of weight, measure, or numerical count, except that under subparagraph (B) of this paragraph 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), 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, distributed, or used 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 defined in paragraph (4) of this subsection, 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 necessary 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 performance standard established under section 907, unless it bears such labeling as may be prescribed in such performance standard; or ``(10) if there was a failure or refusal_ ``(A) to comply with any requirement prescribed under section 904 or 908; ``(B) to furnish any material or information required by or under section 909; or ``(C) to comply with a requirement under section 912. ``(b) Prior Approval of Statements on Label._ 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 and no advertisement of a tobacco product, published after the date of enactment of the National Tobacco Policy and Youth Smoking Reduction Act shall, with respect to the matters specified in this section or covered by regulations issued hereunder, be subject to the provisions of sections 12 through 15 of the Federal Trade Commission Act (15 U.S.C. 52 through 55). This subsection does not apply to any printed matter which the Secretary determines to be labeling as defined in section 201(m). ``SEC. 904. SUBMISSION OF HEALTH INFORMATION TO THE SECRETARY. ``(a) Requirement ._Not later than 6 months after the date of enactment of the National Tobacco Policy and Youth Smoking Reduction Act, each tobacco product manufacturer or importer of tobacco products, or agents thereof, shall submit to the Secretary the following information: ``(1) A listing of all tobacco ingredients, substances and compounds that are, on such date, added by the manufacturer to the tobacco, paper, filter, or other component 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. ``(3) 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, behavioral, or physiologic effects of tobacco products, their constituents, ingredients, and components, and tobacco additives, described in paragraph (1). ``(4) All documents (including underlying scientific information) relating to research activities, and research findings, conducted, supported, or possessed by the manufacturer 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. ``(5) All documents (including underlying scientific information) relating to marketing research involving the use of tobacco products. 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. ``(b) Annual Submission ._A tobacco product manufacturer or importer that is required to submit information under subsection (a) shall update such information on an annual basis under a schedule determined by the Secretary. ``(c) Time for Submission ._ ``(1) New products ._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 this chapter, the manufacturer of such product shall provide the information required under subsection (a) and such product shall be subject to the annual submission under subsection (b). ``(2) Modification of existing products ._If at any time a tobacco product manufacturer adds to its tobacco products a new tobacco additive, increases or decreases the quantity of an existing tobacco additive or the nicotine content, delivery, or form, or eliminates a tobacco additive from any tobacco product, the manufacturer shall within 60 days of such action so advise the Secretary in writing and reference such modification in submissions made under subsection (b). ``SEC. 905. ANNUAL REGISTRATION. ``(a) Definitions._ As used in this section_ ``(1) 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; and ``(2) 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) of this section 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 one 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 May Register._ Any establishment within any foreign country engaged in the manufacture, preparation, compounding, or processing of a tobacco product or tobacco products, may 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 (b), (c), or (d) of this section 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 performance 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 performance 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) of this subsection. 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 August 11, 1995, as defined by the Secretary by regulation shall, at least 90 days before making such introduction or delivery, report to the Secretary (in such form and manner as the Secretary shall by regulation 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 August 11, 1995, 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-August 11 th 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 August 11, 1995, and before the date of enactment of the National Tobacco Policy and Youth Smoking Reduction Act shall be submitted to the Secretary within 6 months after the date of enactment of that Act. ``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, 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, 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, or 910, 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 therefor) 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 therefor. ``(c) Limited Confidentiality of Information._ Any information reported to or otherwise obtained by the Secretary or the Secretary's representative under section 904, 907, 908, 909, or 910 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) The Secretary may by regulation require that a tobacco product be restricted to sale, distribution, or use upon such conditions, including restrictions on the access to, and the advertising and promotion of, the tobacco product, as the Secretary may prescribe in such regulation if, because of its potentiality for harmful effect or the collateral measures necessary to its use, the Secretary determines that such regulation would be appropriate for the protection of the public health. 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 condition 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) 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) Because of the importance of any decision by the Secretary to restrict the sale of any class of tobacco products on the market on the date of enactment of the National Tobacco Policy and Youth Smoking Reduction Act to specified categories of retail outlets, it is appropriate for the Congress to have the opportunity to review such a decision. Therefore, any such restriction may not take effect before the date that is 2 years after the President notifies the Congress that a final regulation imposing the restriction has been issued. ``(e) Good Manufacturing Practice Requirements._ ``(1) Methods, facilities, and controls to conform._ ``(A) The Secretary may, in accordance with subparagraph (B), prescribe regulations requiring that the methods used in, and the facilities and controls used for, the manufacture, pre-production design validation (including a process to assess the performance of a tobacco product), packing and storage of a tobacco product, conform to current good manufacturing practice, as prescribed in such regulations, to assure that the public health is protected and that the tobacco product is in compliance with this chapter. ``(B) The Secretary shall_ ``(i) before promulgating any regulation under subparagraph (A), afford the Tobacco Products Scientific Advisory Committee established under section 915 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) 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) The Secretary may refer to the Tobacco Products Scientific Advisory Committee established under section 915 any petition submitted under subparagraph (A). The 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 an advisory committee, whichever occurs later, the Secretary shall by order either deny the petition or approve it. ``(C) 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) 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) 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 with requirements under this subsection shall not be required before the period ending 3 years after the date of enactment of the National Tobacco Policy and Youth Smoking Reduction Act. ``(f) Exemption for Investigational Use._ The Secretary may exempt tobacco products intended for investigational use from this chapter under such conditions as the Secretary may prescribe by regulation . ``(g) 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. PERFORMANCE STANDARDS. ``(a) In General._ ``(1) Finding required._ The Secretary may adopt performance standards for a tobacco product if the Secretary finds that a performance 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. ``(2) Content of performance standards._ A performance standard established under this section for a tobacco product_ ``(A) shall include provisions to provide performance that is appropriate for the protection of the public health, including provisions, where appropriate_ ``(i) for the reduction or elimination of nicotine yields of the product; ``(ii) for the reduction or elimination of other constituents or harmful components of the product; or ``(iii) relating to any other requirement under (B); ``(B) shall, where necessary to be appropriate for the protection of the public health, include_ ``(i) provisions respecting the construction, components, ingredients, 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 performance 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. ``(3) Periodic re-evaluation of performance standards._ The Secretary shall provide for periodic evaluation of performance 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 (2) by any person. ``(4) Involvement of other agencies; informed persons._ In carrying out duties under this section, the Secretary shall, to the maximum extent practicable_ ``(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, or consumer organizations who in the Secretary's judgment can make a significant contribution. ``(b) Establishment of Standards._ ``(1) Notice._ (A) The Secretary shall publish in the Federal Register a notice of proposed rulemaking for the establishment, amendment, or revocation of any performance standard for a tobacco product. ``(B) A notice of proposed rulemaking for the establishment or amendment of a performance standard for a tobacco product shall_ ``(i) set forth a finding with supporting justification that the performance 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 performance standard is intended to reduce or eliminate; and ``(iii) invite interested persons to submit an existing performance standard for the tobacco product, including a draft or proposed performance standard, for consideration by the Secretary. ``(C) A notice of proposed rulemaking for the revocation of a performance standard shall set forth a finding with supporting justification that the performance standard is no longer necessary to be appropriate for the protection of the public health. ``(D) The Secretary shall consider all information submitted in connection with a proposed standard, including information concerning the countervailing effects of the performance 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. ``(E) The Secretary shall provide for a comment period of not less than 60 days. ``(2) Promulgation._ ``(A) After the expiration of the period for comment on a notice of proposed rulemaking published under paragraph (1) respecting a performance standard and after consideration of such comments and any report from the Tobacco Products Scientific Advisory Committee under section 915, the Secretary shall_ ``(i) promulgate a regulation establishing a performance 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) A regulation establishing a performance standard shall set forth the date or dates upon which the standard shall take effect, but no such regulation may take effect before one 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) Special rule for standard banning class of product or eliminating nicotine content._ Because of the importance of a decision of the Secretary to issue a regulation establishing a performance standard_ ``(A) eliminating all cigarettes, all smokeless tobacco products, or any similar class of tobacco products, or ``(B) requiring the reduction of nicotine yields of a tobacco product to zero, it is appropriate for the Congress to have the opportunity to review such a decision. Therefore, any such standard may not take effect before a date that is 2 years after the President notifies the Congress that a final regulation imposing the restriction has been issued. ``(4) Amendment; revocation._ ``(A) 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) of this subsection, amend or revoke a performance standard. ``(B) The Secretary may declare a proposed amendment of a performance 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_ ``(A) may, on the Secretary's own initiative, refer a proposed regulation for the establishment, amendment, or revocation of a performance standard; or ``(B) shall, 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 established under section 915, 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 subparagraph to the advisory committee, the Secretary shall provide the advisory committee with the data and information on which such proposed regulation is based. The 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) 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) 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 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) of this subsection 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) Except as provided in paragraph (3), 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) 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) of this section. ``SEC. 910. PREMARKET REVIEW OF CERTAIN TOBACCO PRODUCTS. ``(a) In General._ ``(1) Premarket approval required._ ``(A) New products._ Approval under this section of an application for premarket approval for any tobacco product that is not commercially marketed (other than for test marketing) in the United States as of August 11, 1995, is required unless the manufacturer has submitted a report under section 905(j), and the Secretary has issued an order that the tobacco product is substantially equivalent to a tobacco product commercially marketed (other than for test marketing) in the United States as of August 11, 1995, that is in compliance with the requirements of this Act. ``(B) Products introduced between August 11, 1995, and enactment of this chapter._ Subparagraph (A) does not apply to a tobacco product that_ ``(i) was first introduced or delivered for introduction into interstate commerce for commerce for commercial distribution in the United States after August 11, 1995, and before the date of enactment of the National Tobacco Policy and Youth Smoking Reduction Act; and ``(ii) for which a report was submitted under section 905(j) within 6 months after such date, until the Secretary issues an order that the tobacco product is substantially equivalent for purposes of this section or requires premarket approval. ``(2) Substantially equivalent defined._ ``(A) For purposes of this section and section 905(j), the term `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) For purposes of subparagraph (A), the term `characteristics' means the materials, ingredients, design, composition, heating source, or other features of a tobacco product. ``(C) 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. ``(3) Health Information._ ``(A) 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) 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, 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 performance 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 performance 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 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) shall, upon the request of an applicant, refer such application to the Tobacco Products Scientific Advisory Committee established under section 915 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) As promptly as possible, but in no event later than 180 days after the receipt of an application under subsection (b) of this section, 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 one or more grounds for denial specified in paragraph (2) of this subsection apply. ``(B) 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 performance 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 one 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 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. ``(5) Basis for action._ ``(A) 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 one or more clinical investigations by experts qualified by training and experience to evaluate the tobacco product. ``(B) 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 the Tobacco Products Scientific Advisory Committee established under section 915, 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 performance 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 thirtieth day after the date upon which he receives notice of such withdrawal, obtain review thereof in accordance with subsection (e) of this section. ``(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. ``SEC. 911. JUDICIAL REVIEW. ``(a) In General._ Not later than 30 days after_ ``(1) the promulgation of a regulation under section 907 establishing, amending, or revoking a performance standard for a tobacco product; or ``(2) a denial of an application for approval under section 910(c), any person adversely affected by such regulation or order may file a petition with the United States Court of Appeals for the District of Columbia or for the circuit wherein such person resides or has his principal place of business for judicial review of such regulation or order. A copy of the petition shall be transmitted by the clerk of the court to the Secretary or other officer designated by the Secretary for that purpose. The Secretary shall file in the court the record of the proceedings on which the Secretary based the Secretary's regulation or order and each record or order shall contain a statement of the reasons for its issuance and the basis, on the record, for its issuance. For purposes of this section, the term `record' means all notices and other matter published in the Federal Register with respect to the regulation or order reviewed, all information submitted to the Secretary with respect to such regulation or order, proceedings of any panel or advisory committee with respect to such regulation or order, any hearing held with respect to such regulation or order, and 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) Court May Order Secretary to Make Additional Findings._ If the petitioner applies to the court for leave to adduce additional data, views, or arguments respecting the regulation or order being reviewed and shows to the satisfaction of the court that such additional data, views, or arguments are material and that there were reasonable grounds for the petitioner's failure to adduce such data, views, or arguments in the proceedings before the Secretary, the court may order the Secretary to provide additional opportunity for the oral presentation of data, views, or arguments and for written submissions. The Secretary may modify the Secretary's findings, or make new findings by reason of the additional data, views, or arguments so taken and shall file with the court such modified or new findings, and the Secretary's recommendation, if any, for the modification or setting aside of the regulation or order being reviewed, with the return of such additional data, views, or arguments. ``(c) Standard of Review._ Upon the filing of the petition under subsection (a) of this section 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 in such chapter. A regulation or order described in paragraph (1) or (2) of subsection (a) of this section shall not be affirmed if it is found to be unsupported by substantial evidence on the record taken as a whole. ``(d) 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. ``(e) 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. ``(f) Regulations and Orders Must Recite Basis in Record._ To facilitate judicial review under this section or under any other provision of law of a regulation or order issued under section 906, 907, 908, 909, 910, or 914, each such regulation or order shall contain a statement of the reasons for its issuance and the basis, in the record of the proceedings held in connection with its issuance, for its issuance. ``SEC. 912. POSTMARKET SURVEILLANCE ``(a) Discretionary Surveillance._ The Secretary may require a tobacco product manufacturer to conduct postmarket surveillance for a tobacco product of the manufacturer if the Secretary determines that postmarket surveillance of the tobacco product is necessary to protect the public health or is necessary to provide information regarding the health risks and other safety issues involving the tobacco product. ``(b) Surveillance Approval._ Each tobacco product manufacturer required to conduct a surveillance of a tobacco product under subsection (a) of this section shall, within 30 days after receiving notice that the manufacturer 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 useful data or other information necessary to protect the public health. The Secretary may not approve such a protocol until it has been reviewed by an appropriately qualified scientific and technical review committee established by the Secretary. ``SEC. 913. REDUCED RISK TOBACCO PRODUCTS. ``(a) Requirements ._ ``(1) In general ._For purposes of this section, the term `reduced risk tobacco product' means a tobacco product designated by the Secretary under paragraph (2). ``(2) Designation ._ ``(A) In general._ A product may be designated by the Secretary as a reduced risk tobacco product if the Secretary finds that the product will significantly reduce harm to individuals caused by a tobacco product and is otherwise appropriate to protect public health, based on an application submitted by the manufacturer of the product (or other responsible person) that_ ``(i) demonstrates through testing on animals and short-term human testing that use of such product results in ingestion or inhalation of a substantially lower yield of toxic substances than use of conventional tobacco products in the same category as the proposed reduced risk product; and ``(ii) if required by the Secretary, includes studies of the long-term health effects of the product. If such studies are required, the manufacturer may consult with the Secretary regarding protocols for conducting the studies. ``(B) Basis for finding._ In making the finding under subparagraph (A), the Secretary shall take into account_ ``(i) the risks and benefits to the population as a whole, including both users of tobacco products and non-users of tobacco products; ``(ii) the increased or decreased likelihood that existing users of tobacco products will stop using such products including reduced risk tobacco products; ``(iii) the increased or decreased likelihood that those who do not use tobacco products will start to use such products, including reduced risk tobacco products; and ``(iii) the risks and benefits to consumers from the use of a reduced risk tobacco product as compared to the use of products approved under chapter V to reduce exposure to tobacco. ``(3) Marketing requirements ._A tobacco product may be marketed and labeled as a reduced risk tobacco product if it_ ``(A) has been designated as a reduced risk tobacco product by the Secretary under paragraph (2); ``(B) bears a label prescribed by the Secretary concerning the product's contribution to reducing harm to health; and ``(C) complies with requirements prescribed by the Secretary relating to marketing and advertising of the product, and other provisions of this chapter as prescribed by the Secretary. ``(b) Revocation of Designation ._At any time after the date on which a tobacco product is designated as a reduced risk tobacco product under this section the Secretary may, after providing an opportunity for an informal hearing, revoke such designation if the Secretary determines, based on information not available at the time of the designation, that_ ``(1) the finding made under subsection (a)(2) is no longer valid; or ``(2) the product is being marketed in violation of subsection (a)(3). ``(c) Limitation ._A tobacco product that is designated as a reduced risk tobacco product that is in compliance with subsection (a) shall not be regulated as a drug or device. ``(d) Development of reduced risk tobacco product Technology ._A tobacco product manufacturer shall provide written notice to the Secretary upon the development or acquisition by the manufacturer of any technology that would reduce the risk of a tobacco product to the health of the user for which the manufacturer is not seeking designation as a `reduced risk tobacco product' under subsection (a). ``SEC. 914. PRESERVATION OF STATE AND LOCAL AUTHORITY. ``(a) Additional Requirements ._ ``(1) In general ._Except as provided in paragraph (2), nothing in this Act shall be construed as prohibiting a State or political subdivision thereof from adopting or enforcing a requirement applicable to a tobacco product that is in addition to, or more stringent than, requirements established under this chapter. ``(2) Preemption of certain state and local requirements ._ ``(A) Except as provided in subparagraph (B), no State 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 applicable under the provisions of this chapter relating to performance standards, premarket approval, adulteration, misbranding, registration, reporting, good manufacturing standards, or reduced risk products. ``(B) Subparagraph (A) does not apply to requirements relating to the sale, use, or distribution of a tobacco product including requirements related to the access to, and the advertising and promotion of, a tobacco product. ``(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. ``(c) Waivers ._Upon the application of a State or political subdivision thereof, the Secretary may, by regulation promulgated after notice and an opportunity for an oral hearing, exempt from subsection (a), under such conditions as may be prescribed in such regulation, a requirement of such State or political subdivision applicable to a tobacco product if_ ``(1) the requirement is more stringent than a requirement applicable under the provisions described in subsection (a)(3) which would be applicable to the tobacco product if an exemption were not in effect under this subsection; or ``(2) the requirement_ ``(A) is required by compelling local conditions; and ``(B) compliance with the requirement would not cause the tobacco product to be in violation of any applicable requirement of this chapter. ``SEC. 915. TOBACCO PRODUCTS SCIENTIFIC ADVISORY COMMITTEE. ``(a) Establishment ._Not later than 1 year after the date of enactment of the National Tobacco Policy and Youth Smoking Reduction Act, the Secretary shall establish a 9-member advisory committee, to be known as the `Tobacco Products Scientific Advisory Committee'. ``(b) Membership ._ ``(1) In general ._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_ ``(A) 3 individuals who are officers or employees of a State or local government, or of the Federal government; ``(B) 2 individuals as representatives of interests of the tobacco manufacturing industry; ``(C) 2 individuals as representatives of interests of physicians and other healthcare professionals; and ``(D) 2 individuals as representatives of the general public. ``(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. 916. 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. 102. 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) by inserting ``tobacco product,'' in subsection (a) after ``device,''; (2) by inserting ``tobacco product,'' in subsection (b) after ``device,''; (3) by inserting ``tobacco product,'' in subsection (c) after ``device,''; (4) by striking ``515(f), or 519'' in subsection (e) and inserting ``515(f), 519, or 909''; (5) by inserting ``tobacco product,'' in subsection (g) after ``device,''; (6) by inserting ``tobacco product,'' in subsection (h) after ``device,''; (7) by striking ``708, or 721'' in subsection (j) and inserting ``708, 721, 904, 905, 906, 907, 908, or 909''; (8) by inserting ``tobacco product,'' in subsection (k) 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(J)(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), 906(f), or 908; ``(B) to furnish any notification or other material or information required by or under section 519, 520(g), 904, 906(f), or 909; or ``(C) to comply with a requirement under section 522 or 912.''; (11) by striking ``device,'' in subsection (q)(2) and inserting ``device or tobacco product,''; and (12) by inserting ``or tobacco product'' in subsection (r) after ``device'' each time that it appears. (c) Section 303._ Section 303(f)(1)(A) (21 U.S.C. 333(f)(1)(A)) isamended by inserting ``or tobacco products'' after ``devices''. (d) Section 304._ Section 304 (21 U.S.C. 334) is amended_ (1) by striking ``and'' before ``(D)'' in subsection (a)(2); (2) by striking ``device.'' in subsection (a)(2) and inserting a comma and ``(E) Any adulterated or misbranded tobacco product.''; (3) by inserting ``tobacco product,'' in subsection (d)(1) after ``device,''; (4) by inserting ``or tobacco product'' in subsection (g)(1) after ``device'' each place it appears; and (5) by inserting ``or tobacco product'' in subsection (g)(2)(A) 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) by inserting ``tobacco products,'' in subsection (a)(1)(A) after ``devices,'' each place it appears; (2) by inserting ``or tobacco products'' in subsection (a)(1)(B) after ``restricted devices'' each place it appears; and (3) by inserting ``tobacco product,'' in subsection (b) after ``device,''. (h) Section 705._ Section 705(b) (21 U.S.C. 375(b)) is amended byinserting ``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) by inserting ``tobacco products,'' after ``devices,'' in subsection (a) the first time it appears; (2) by inserting ``or subsection (j) of section 905'' in subsection (a) after ``section 510''; and (3) by striking ``drugs or devices'' each time it appears in subsection (a) and inserting ``drugs, devices, or tobacco products''; (4) by inserting ``tobacco product,'' in subsection (e)(1) after ``device,''; (2) by redesignating paragraph (4) of subsection (e) as paragraph (5) and inserting after paragraph (3), the following: ``(4) Paragraph (1) does not apply to any tobacco product_ ``(A) which does not comply with an applicable requirement of section 907 or 910; or ``(B) which under section 906(f) is exempt from either such section. This paragraph does not apply if the Secretary has determined that the exportation of the tobacco product is not contrary to the public health and safety and has the approval of the country to which it is intended for export or the tobacco product is eligible for export under section 802.''. (k) Section 802._ Section 802 (21 U.S.C. 382) is amended_ (1) by striking ``device_'' in subsection (a) and inserting ``device or tobacco product_''; (2) by striking ``and'' after the semicolon in subsection (a)(1)(C); (3) by striking subparagraph (C) of subsection (a)(2) and all that follows in that subsection and inserting the following: ``(C) is a banned device under section 516; or ``(3) which, in the case of a tobacco product_ ``(A) does not comply with an applicable requirement of section 907 or 910; or ``(B) under section 906(f) is exempt from either such section, is adulterated, misbranded, and in violation of such sections or Act unless the export of the drug, device, or tobacco product is, except as provided in subsection (f), authorized under subsection (b), (c), (d), or (e) of this section or section 801(e)(2) or 801(e)(4). If a drug, device, or tobacco product described in paragraph (1), (2), or (3) may be exported under subsection (b) and if an application for such drug or device under section 505, 515, or 910 of this Act or section 351 of the Public Health Service Act (42 U.S.C. 262) was disapproved, the Secretary shall notify the appropriate public health official of the country to which such drug, device, or tobacco product will be exported of such disapproval.''; (4) by inserting ``or tobacco product'' in subsection (b)(1)(A) after ``device'' each time it appears; (5) by inserting ``or tobacco product'' in subsection (c) after ``device'' and inserting ``or section 906(f)'' after ``520(g).''; (6) by inserting ``or tobacco product'' in subsection (f) after ``device'' each time it appears; and (7) by inserting ``or tobacco product'' in subsection (g) after ``device'' each time it appears. (l) Section 1003._ Section 1003(d)(2)(C) (as redesignated by section101(a)) is amended_ (1) by striking ``and'' after ``cosmetics,''; and (2) inserting a comma and ``and tobacco products'' after ``devices''. Subtitle B_Advertising SEC. 121. ADVERTISING PROVISIONS IN PROTOCOL. The Protocol shall contain provisions enforceable at law under which tobacco product manufacturers commit to observe limitations on advertising that meet the requirements set forth in this subtitle. SEC. 122. TOBACCO PRODUCT LABELING AND ADVERTISING . (a) In General._ The Protocol shall require that no tobacco product will be sold or distributed in the United States_ (1) unless its advertising and labeling (including the package)_ (A) contain no human image, animal image, or cartoon character; (B) are not outdoor advertising, including advertising in enclosed stadia and advertising from within a retail establishment that is directed toward or visible from the outside of the establishment; (C) are accompanied by a disclaimer in the advertising that words such as ``light'' or ``low tar'' describing the product do not render the product less hazardous than any other tobacco product, in addition to such other requirements as the Secretary may impose; (D) at the time the advertising or labeling is first used are submitted to the Secretary so that the Secretary may conduct regular review of the advertising and labeling; (E) comply with any applicable requirement of the Federal Food, Drug, and Cosmetic Act, the Federal Cigarette Labeling and Advertising Act, and any regulation promulgated under either of those Acts; (F) do not appear on the international computer network of both Federal and non-Federal interoperable packet switches data networks (the ``Internet''), unless such advertising is designed to be inaccessible in or from the United States to all individuals under the age of 18 years; (G) use only black text on white background, other than_ (i) those locations where self-service displays are permitted under subsection 123, if the advertising is not visible from outside the establishment and is affixed to a wall or fixture in the establishment; and (ii) advertisements appearing in any publication which the tobacco product manufacturer, distributor, or retailer demonstrates to the Secretary is a newspaper, magazine, periodical, or other publication whose readers under the age of 18 years constitute 15 percent or less of the total readership as measured by competent and reliable survey evidence, and that is read by less than 2 million persons under the age of 18 years as measured by competent and reliable survey evidence; (H) for video formats, use only static black text on a white background, and any accompanying audio uses only words without music or sound effects; and (I) for audio formats, use only words without music or sound effects; (2) if a logo, symbol, motto, selling message, recognizable color or pattern of colors, or any other indicia of product identification of the tobacco product is contained in a movie, program, or video game for which a direct or indirect payment has been made to ensure its placement; (3) if a direct or indirect payment has been made by any tobacco product manufacturer, distributor, or retailer to any entity for the purpose of promoting the image or use of the tobacco product through print or film media that appeals to individuals under the age of 18 years or through a live performance by an entertainment artist that appeals to such individuals; (4) if a logo, symbol, motto, selling message, recognizable color or pattern of colors, or any other indicia or product identification identical to, similar to, or identifiable with the tobacco product is used for any item (other than a tobacco product) or service marketed, licensed, distributed or sold or caused to be marketed, licensed, distributed, or sold by the tobacco product manufacturer or distributor of the tobacco product; (5) unless its package label and advertising bear the product's established name and a statement of its intended use, as follows: (A) ``Cigarettes-A Nicotine Delivery Device''; (B) ``Cigarette Tobacco-A Nicotine Delivery Device''; or (C)`` Loose Leaf Chewing Tobacco'', ``Plug Chewing Tobacco'', ``Twist Chewing Tobacco'', ``Moist Snuff'', or ``Dry Snuff'', whichever is appropriate for the product, followed by ``-A Nicotine Delivery Device''; and (6)(A) except as provided in subparagraph (B), if advertising or labeling for such product that is otherwise in accordance with the requirements of this section bears a tobacco product brand name (alone or in conjunction with any other word) or any other indicia of tobacco product identification and is disseminated in a medium other than newspapers, magazines, periodicals or other publications (whether periodic or limited distribution), nonpoint-of-sale promotional material (including direct mail), point-of-sale promotional material, or audio or video formats delivered at a point-of-sale; but (B) notwithstanding subparagraph (A), advertising or labeling for cigarettes or smokeless tobacco may be disseminated in a medium that is not specified in paragraph (1) if the tobacco product manufacturer, distributor, or retailer notifies the Secretary not later than 30 days prior to the use of such medium, and the notice describes the medium and the extent to which the advertising or labeling may be seen by persons under the age of 18 years. (b) Color Print Ads on Magazines._ The Protocol shall also provide that no tobacco product may be sold or distributed in the United States if any advertising for that product on the outside back cover of a magazine appears in any color or combination of colors. SEC. 123. POINT-OF-SALE RESTRICTIONS. (a) In General._ Except as provided in subsection (b), the Protocol shall provide that no participating tobacco product manufacturer, distributor, or retailer shall engage in point-of-sale advertising of any tobacco product in any retail establishment (other than an establishment that sells only tobacco products) in which an individual under 18 years of age is present, or permitted to enter, at any time. (b) Permitted POS Locations._ (1) Placement._ A retailer may place 1 point-of-sale advertisement in or at each retail establishment for its brand or the contracted house retailer or private label brand of its wholesaler. (2) Size._ The display area of any such point-of-sale advertisement (either individually or in the aggregate) shall not be larger than 576 square inches and shall consist of black letters on white background or another recognized typography. (3) Proximity to candy._ Any such point-of-sale advertisement shall not be attached to or located within 2 feet of any display fixture on which candy is displayed for sale. (c) Audio or Video._ Any audio or video format permitted under regulations promulgated by the Secretary may be distributed at the time of sale of a tobacco product to individuals over the age of 18 years, but no such format may be played or shown in or at any location where tobacco products are offered for sale. (d) No Restrictive Covenants._ No participating tobacco product manufacturer or distributor of tobacco products may enter into any arrangement with a retailer that limits the retailer's ability to display any form of advertising or promotional material originating with another supplier and permitted by law to be displayed in a retail establishment. (e) Definitions._ As used in this section, the terms ``point-of-sale advertisement'' and ``point-of- sale advertising'' mean all printed or graphical materials bearing the brand name (alone or in conjunction with any other word), logo, symbol, motto, selling message, or any other indicia of product identification identical or similar to, or identifiable with, those used for any brand of cigarettes or smokeless tobacco, which, when used for its intended purpose, can reasonably be anticipated to be seen by customers at a location where tobacco products are offered for sale. TITLE II_REDUCTIONS IN UNDERAGE TOBACCO USE Subtitle A_Underage Use SEC. 201. GOALS FOR REDUCING UNDERAGE TOBACCO USE. (a) Goals._ As part of a comprehensive national tobacco control policy, the Secretary, working in cooperation with State, Tribal, and local governments and the private sector, shall take all actions under this Act necessary to ensure that the required percentage reductions in underage use of tobacco products set forth in this title are achieved. (b) Required Reductions for Cigarettes._ With respect to cigarettes, the required percentage reduction in underage use, as set forth in section 202, means_ I95 Calendar Year After Date of Enactment Required Percentage Reduction as a Percentage of Base Incidence Percentage in Underage Cigarette Use Years 3 and 4 15 percent Years 5 and 6 30 percent Years 7, 8, and 9 50 percent Year 10 and thereafter 60 percent (c) Required Reductions for Smokeless Tobacco._ With respect to smokeless tobacco products, the required percentage reduction in underage use, as set forth in section 202, means_ I95 Calendar Year After Date of Enactment Required Percentage Reduction as a Percentage of Base Incidence Percentage in Underage Smokeless Tobacco Use Years 3 and 4 12.5 percent Years 5 and 6 25 percent Years 7, 8, and 9 35 percent Year 10 and thereafter 45 percent SEC. 202. LOOK-BACK ASSESSMENT. (a) Determination of Underage Use._ Upon the conclusion of the third calendar year after the date of enactment of this Act, and annually thereafter, the Secretary shall determine the percent incidence of underage use of cigarettes and of smokeless tobacco by calculating the average, weighted by relative population of such age groups in 1995 as determined by the Bureau of the Census, of the percentages of individuals in grade 12 (ages 16 and 17), in grade 10 (ages 14 and 15), and in grade 8 (age 13) who used cigarettes or smokeless tobacco, as appropriate, on a daily basis during the preceding calendar year. The percentages used in this calculation are to be those measured by (1) the University of Michigan Survey, or (2) such comparable index using identical methodology as is chosen by the Secretary after notice and the opportunity for comment in accordance with section 553 of title 5, United States Code. If the methodology employed by the University of Michigan Survey is changed in a material manner from that employed from 1986 through 1996 (including changes in the States or regions on which the University of Michigan Survey is based), or is (in the opinion of the Secretary) no longer the best available data, the Secretary shall use the percentages measured by an index chosen by the Secretary, after notice and the opportunity for comment in accordance with section 553 of title 5, United States Code, that has a methodology identical to that employed by the University of Michigan Survey from 1986 through 1996. The Secretary shall makethe data on which the results of the University of Michigan Survey or such other comparable index are based available to the public upon request. (b) Calculation of Non-attainment Penalties._ (1) Secretary to determine non-attainment percentage._ The Secretary shall determine the non- attainment percentage for cigarettes and for smokeless tobacco for each calendar year. (2) Non-attainment penalty for cigarettes._ For each calendar year in which the percentage reduction in underage use required by section 201(b) is not attained, the Secretary shall assess a penalty on cigarette manufacturers as follows:I95 If the non-attainment percentage is: The penalty is: Not more than 5 percent $80,000,000 multiplied by the non-attainment percentage More than 5% but not more than 10% $400,000,000, plus $160,000,000 multiplied by the non- attainment percentage in excess of 5% but not in excess of 10% More than 10% but not more than 20% $1,200,000,000, plus $240,000,000 multiplied by the non-attainment percentage in excess of 10% but not in excess of 20% More than 20% $3,500,000,000 (3) Non-attainment penalty for smokeless tobacco._ For each year in which the percentage reduction in underage use required by section 201(c) is not attained, the Secretary shall assess a penalty on smokeless tobacco product manufacturers as follows: I95 If the non-attainment percentage is: The penalty is: Not more than 5 percent $8,000,000 multiplied by the non-attainment percentage More than 5% but not more than 10% $40,000,000, plus $16,000,000 multiplied by the non- attainment percentage in excess of 5% but not in excess of 10% More than 10% but not more than 20% $120,000,000, plus $24,000,000 multiplied by the non- attainment percentage in excess of 10% but not in excess of 20% More than 20% $350,000,000 (4) Penalties to be adjusted for inflation._ (A) In general._ Beginning with the fourth calendar year after the date of enactment of this Act, each dollar amount in the tables in paragraphs (2) and (3) shall be increased by the inflation adjustment. (B) Inflation adjustment._ For purposes of subparagraph (A), the inflation adjustment for any calendar year is the percentage (if any) by which_ (i) the CPI for the preceding calendar year, exceeds (ii) the CPI for the calendar year 1998. (C) CPI._ For purposes of subparagraph (B), the CPI for any calendar year is the average of the Consumer Price Index for all-urban consumers published by the Department of Labor. (D) Rounding._ If any increase determined under subparagraph (A) is not a multiple of $1,000, the increase shall be rounded to the nearest multiple of $1,000. (c) Joint, Several, and Strict Obligation for Penalties._ (1) Cigarette manufacturers._ Any penalty due and payable by cigarette manufacturers shall be the joint, several, and strict obligation of such manufacturers. (2) Smokeless tobacco._ Any penalty payable by smokeless tobacco product manufacturers shall be the joint, several, and strict obligation of such manufacturers. (d) Exemptions for Small Manufacturers._ (1) Allocation by market share._ The Secretary shall make such allocations according to each manufacturer's share of t