To eliminate the Federal quota and price support programs for tobacco, to compensate quota holders and active producers for the loss of tobacco quota asset value, to establish a permanent advisory board to determine and describe the physical characteristics of United States farm-produced tobacco and unmanufactured imported tobacco, and for other purposes.

January 7, 2003

Mr. MCINTYRE (for himself, Mr. BOYD, and Mr. TOM DAVIS of Virginia) introduced the following bill; which was referred to the Committee on Agriculture, and in addition to the Committee on Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

To eliminate the Federal quota and price support programs for tobacco, to compensate quota holders and active producers for the loss of tobacco quota asset value, to establish a permanent advisory board to determine and describe the physical characteristics of United States farm-produced tobacco and unmanufactured imported tobacco, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) SHORT TITLE- This Act may be cited as the `Tobacco Livelihood and Economic Assistance for our Farmers Act'.

(b) TABLE OF CONTENTS- The table of contents for this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Severability.

TITLE I--TERMINATION OF CURRENT TOBACCO PROGRAMS

Sec. 101. Termination of marketing quota programs and repeal of related provisions.

Sec. 102. Termination of tobacco price support loan and no net cost provisions and repeal of related provisions.

Sec. 103. Geographical restrictions on expansion of tobacco production.

Sec. 104. Continued availability of Federal crop insurance.

TITLE II--PAYMENTS TO TOBACCO QUOTA HOLDERS AND PRODUCERS

Sec. 201. Definitions.

Sec. 202. Payments to tobacco quota holders.

Sec. 203. Transition payments for active producers of quota tobacco.

TITLE III--TOBACCO QUALITY BOARD

Sec. 301. Establishment of Board.

Sec. 302. Membership.

Sec. 303. Duties.

Sec. 304. Administrative provisions.

TITLE IV--TOBACCO PRODUCT MANUFACTURER AND IMPORTER USER FEES

Sec. 401. User fee.

Sec. 402. Allocation of user fees.

TITLE V--FDA REGULATION OF TOBACCO PRODUCTS

Sec. 501. Findings.

Sec. 502. Definitions.

Sec. 503. Amendment of Federal Food, Drug, and Cosmetic Act.

Sec. 504. Regulatory record.

Sec. 505. Conforming and other amendments to general provisions.

Sec. 506. Cigarette label and advertising warnings.

Sec. 507. Authority to revise cigarette warning label statements.

Sec. 508. Smokeless tobacco labels and advertising warnings.

Sec. 509. Authority to revise smokeless tobacco product warning label statements.

Sec. 510. Tar, nicotine, and other smoke constituent disclosure to the public.

Sec. 511. Regulation requirement.

Sec. 512. FTC jurisdiction not affected.

SEC. 2. SEVERABILITY.

If any provision of this Act, or an amendment made by this Act, or the application of such provision to any person or circumstance, is held to be invalid, the remainder of this Act, or an amendment made by this Act, or the application of such provision to other persons or circumstances, shall not be affected.

TITLE I--TERMINATION OF CURRENT TOBACCO PROGRAMS

SEC. 101. TERMINATION OF MARKETING QUOTA PROGRAMS AND REPEAL OF RELATED PROVISIONS.

(a) TOBACCO CONTROL ACT- The Act of April 25, 1936 (commonly known as the Tobacco Control Act; 7 U.S.C. 515-515k), is repealed.

(b) COMMODITY HANDLING ORDERS- Section 8c(2) of the Agricultural Adjustment Act (7 U.S.C. 608c(2)), reenacted with amendments by the Agricultural Marketing Agreement Act of 1937, is amended by striking `tobacco,'.

(c) PROCESSING TAX- Section 9(b) of the Agricultural Adjustment Act (7 U.S.C. 609(b)), reenacted with amendments by the Agricultural Marketing Agreement Act of 1937, is amended--

(1) in paragraph (2), by striking `tobacco,'

(2) in paragraph (6)(B)(i), by striking `, or, in the case of tobacco, is less than the fair exchange value by not more than 10 per centum,'.

(d) BURLEY TOBACCO IMPORT REVIEW- Section 3 of Public Law 98-59 (7 U.S.C. 625) is repealed.

(e) DECLARATION OF POLICY- Section 2 of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1282) is amended by striking `tobacco,'.

(f) DEFINITIONS- Section 301(b) of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1301(b)) is amended--

(1) in paragraph (3)--

(A) by striking subparagraph (C); and

(B) by redesignating subparagraph (D) as subparagraph (C);

(2) in paragraph (6)(A), by striking `tobacco,';

(3) in paragraph (7), by striking the following:

`Tobacco (flue-cured), July 1-June 30;

Tobacco (other than flue-cured), October 1-September 30;'

(4) in paragraph (10)--

(A) by striking subparagraph (B); and

(B) by redesignating subparagraph (C) as subparagraph (B);

(5) in paragraph (11)(B), by striking `and tobacco';

(6) in paragraph (12), by striking `tobacco,';

(7) in paragraph (14)--

(A) by striking `(A)' in subparagraph (A); and

(B) by striking subparagraphs (B), (C), and (D);

(8) by striking paragraph (15);

(9) in paragraph (16)--

(A) by striking subparagraph (B); and

(B) by redesignating subparagraph (C) as subparagraph (B);

(10) by striking paragraph (17); and

(11) by redesignating paragraph (16) as paragraph (15).

(g) PARITY PAYMENTS- Section 303 of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1303) is amended in the first sentence by striking `rice, or tobacco' and inserting `or rice'.

(h) MARKETING QUOTAS- Part I of subtitle B of title III of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1311 et seq.) is repealed.

(i) ADMINISTRATIVE PROVISIONS- Section 361 of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1361) is amended by striking `tobacco,'.

(j) ADJUSTMENT OF QUOTAS- Section 371 of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1371) is amended--

(1) in the first sentence of subsection (a) by striking `, rice, or tobacco' and inserting `or rice'; and

(2) in the first sentence of subsection (b), by striking `, rice, or tobacco' and inserting `or rice'.

(k) REPORTS AND RECORDS- Section 373 of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1373) is amended--

(1) in subsection (a)--

(A) by striking the first sentence and inserting the following new sentence: `This subsection shall apply to warehousemen, processors, and common carriers of corn, wheat, cotton, or rice, all ginners of cotton, and all persons engaged in the business of purchasing corn, wheat, cotton, or rice from producers.'; and

(B) in the last sentence by striking `$500' and all that follows through the period at the end of the sentence and inserting `$500.'.

(2) in subsection (b), by striking `rice, or tobacco' and inserting `or rice'.

(l) REGULATIONS- Section 375(a) of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1375(a)) is amended by striking `peanuts, or tobacco' and inserting `or peanuts'.

(m) EMINENT DOMAIN- Section 378 of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1378) is amended--

(1) in the first sentence of subsection (c) by striking `and tobacco'; and

(2) by striking subsection (f).

(n) BURLEY TOBACCO FARM RECONSTITUTION- Section 379 of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1379) is amended--

(1) in subsection (a)--

(A) by striking `(a)'; and

(B) in paragraph (6) by striking `, but this clause (6) shall not be applicable in the case of burley tobacco'; and

(2) by striking subsections (b) and (c).

(o) ACREAGE-POUNDAGE QUOTAS- Section 4 of the Act of April 16, 1955 (Public Law 89-12; 7 U.S.C. 1314c note), is repealed.

(p) BURLEY TOBACCO ACREAGE ALLOTMENTS- The Act of July 12, 1952 (7 U.S.C. 1315), is repealed.

(q) TRANSFER OF ALLOTMENTS- Section 703 of the Food and Agriculture Act of 1965 (7 U.S.C. 1316) is repealed.

(r) ADVANCE RECOURSE LOANS- Section 13(a)(2)(B) of the Food Security Improvements Act of 1986 (7 U.S.C. 1433c-1(a)(2)(B)) is amended by striking `tobacco and'.

(s) TOBACCO FIELD MEASUREMENT- Section 1112 of the Omnibus Budget Reconciliation Act of 1987 (Public Law 100-203) is amended by striking subsection (c).

(t) LIABILITY- The amendments made by this section shall not affect the liability of any person under any provision of law in effect before the amendments take effect as provided under subsection (u).

(u) APPLICATION OF AMENDMENTS- The amendments made by this section shall apply with respect to the 2004 and subsequent tobacco crops.

SEC. 102. TERMINATION OF TOBACCO PRICE SUPPORT LOAN AND NO NET COST PROVISIONS AND REPEAL OF RELATED PROVISIONS.

(a) PARITY PRICE SUPPORT- Section 101 of the Agricultural Act of 1949 (7 U.S.C. 1441) is amended--

(1) in the first sentence of subsection (a), by striking `tobacco (except as otherwise provided herein), corn,' and inserting `corn';

(2) by striking subsection (c);

(3) in subsection (d)(3)--

(A) by striking `, except tobacco,'; and

(B) by striking `and no price support shall be made available for any crop of tobacco for which marketing quotas have been disapproved by producers;'; and

(4) by redesignating subsections (d) and (e) as subsections (c) and (d), respectively.

(b) TERMINATION OF TOBACCO PRICE SUPPORT AND NO NET COST PROVISIONS- Sections 106, 106A, and 106B of the Agricultural Act of 1949 (7 U.S.C. 1445, 1445-1, 1445-2) are repealed.

(c) DEFINITION OF BASIC AGRICULTURAL COMMODITY- Section 408(c) of the Agricultural Act of 1949 (7 U.S.C. 1428(c)) is amended by striking `tobacco,'.

(d) REVIEW OF BURLEY TOBACCO IMPORTS- Section 3 of Public Law 98-59 (7 U.S.C. 625) is repealed.

(e) POWERS OF COMMODITY CREDIT CORPORATION- Section 5 of the Commodity Credit Corporation Charter Act (15 U.S.C. 714c) is amended by inserting `(other than tobacco)' after `agricultural commodities' each place it appears.

(f) TRANSITION PROVISIONS-

(1) PRICE SUPPORT LOAN OBLIGATIONS- The amendments made by this section shall not affect any person's obligations that arise under or with respect to the price support loan program or loans issued through such program under any provision of law in effect before the amendments take effect as provided under subsection (g).

(2) TOBACCO STOCKS AND LOANS- The Secretary of Agriculture shall issue regulations that require--

(A) the orderly disposition of quota tobacco held by any producer-owned cooperative marketing association that has entered into a loan agreement with the Commodity Credit Corporation to make price support available to producers of quota tobacco;

(B) the repayment of all tobacco price support loans or surrender of collateral by such associations not later than one year after this section becomes effective.

(3) SPECIAL RULES FOR TERMINATION OF NO NET COST FUNDS AND ACCOUNTS- Notwithstanding any other provision of law, upon the repeal by subsection (b) of the authorities in section 106A and 106B of the Agricultural Act of 1949 for the establishment of tobacco no net cost funds and accounts, respectively--

(A) any obligation of a tobacco producer, purchaser, or importer to make payments into any such fund or account also shall terminate; and

(B) any monies in any such fund or account shall be disposed of in the manner prescribed by the Secretary of Agriculture, except that--

(i) to the extent needed, such monies shall be applied or used for the purposes therefor prescribed by such sections; and

(ii) if any monies remain, the Secretary shall transfer such monies to the Secretary of Health and Human Services for use in accordance with section 402.

(g) APPLICATION OF AMENDMENTS- This section and the amendments made by this section shall apply with respect to the 2004 and subsequent tobacco crops.

SEC. 103. GEOGRAPHICAL RESTRICTIONS ON EXPANSION OF TOBACCO PRODUCTION.

(a) PURPOSE- The purpose of this section is to provide an orderly economic transition away from the marketing of tobacco based on quotas and price support while also addressing the economic dislocation, and the resulting impact on interstate commerce, that the termination of the current tobacco program might cause in certain communities.

(b) PENALTY APPLICABLE TO TOBACCO GROWN IN NONQUOTA COUNTIES AND STATES- The marketing of tobacco in the 2004 or subsequent marketing years, of a kind of tobacco that was subject to a marketing quota in the 2003 marketing year, shall be subject to a penalty equal to 100 percent of the total amount received on the marketing of the tobacco unless the tobacco was grown in any county in which such kind of tobacco was grown pursuant to a marketing quota in the 2003 marketing year.

(c) DEFINITIONS- In this section:

(1) The term `marketing year' means July 1 to June 30 for flue-cured tobacco and October 1 to September 30 for all other kinds of tobacco.

(2) The term `marketing quota in the 2003 marketing year' means a quota established for that year pursuant to part I of subtitle B of title III of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1311 et seq.) and related provisions, as in effect for that marketing year.

SEC. 104. CONTINUED AVAILABILITY OF FEDERAL CROP INSURANCE.

Nothing in this title shall be construed to affect the eligibility of tobacco producers to obtain crop insurance for their crops pursuant to the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.) under the terms of such Act.

TITLE II--PAYMENTS TO TOBACCO QUOTA HOLDERS AND PRODUCERS

SEC. 201. DEFINITIONS.

In this title:

(1) The term `active producer of quota tobacco' means a person that was the actual producer, as determined by the Secretary, of tobacco marketed under a marketing quota for the 2001 tobacco marketing year.

(2) The term `quota tobacco' means a kind of tobacco that is subject to farm marketing quotas or farm acreage allotments for the 1999, 2000, 2001, and 2002 tobacco marketing years under a marketing quota or allotment program established under part I of subtitle B of title III of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1281 et seq.).

(3) The term `Secretary' means the Secretary of Agriculture.

(4) The term `tobacco quota holder' means an owner of a farm on January 1, 2002, for which a tobacco farm marketing quota or farm acreage allotment for quota tobacco was established with respect to the 2002 tobacco marketing year under a marketing quota program established under part I of subtitle B of title III of the Agricultural Adjustment Act of 1938.

SEC. 202. PAYMENTS TO TOBACCO QUOTA HOLDERS.

(a) PAYMENT REQUIRED- The Secretary shall make payments to each eligible tobacco quota holder for the termination of tobacco marketing quotas and related price support under title I, which shall constitute full and fair compensation for any losses relating to such termination.

(b) ELIGIBILITY- To be eligible to receive a payment under this section, a person shall submit to the Secretary an application containing such information as the Secretary may require to demonstrate to the satisfaction of the Secretary that the person satisfies the definition of tobacco quota holder. The application shall be submitted within such time, in such form, and in such manner as the Secretary may require.

(c) BASE QUOTA LEVEL-

(1) IN GENERAL- The Secretary shall establish a base quota level applicable to each eligible tobacco quota holder, as determined under subsection (b).

(2) POUNDAGE QUOTAS- For each kind of tobacco for which the marketing quota is expressed in pounds, the base quota level for each tobacco quota holder shall be equal to the basic tobacco marketing quota under the Agriculture Adjustment Act of 1938 for the 1998 marketing year for quota tobacco on the farm owned by the tobacco quota holder.

(3) MARKETING QUOTAS OTHER THAN POUNDAGE QUOTAS- For each kind of tobacco for which there is marketing quota or allotment on an acreage basis, the base quota level for each tobacco quota holder shall be the amount equal to the product obtained by multiplying--

(A) the basic tobacco farm marketing quota or allotment for the 1998 marketing year established by the Secretary for quota tobacco on the farm owned by the tobacco quota holder; by

(B) the average county production yield per acre for the county in which the farm is located for the kind of tobacco for the 1998 marketing year.

(d) PAYMENT- The Secretary shall make payments to each eligible tobacco quota holder, as determined under subsection (b), in a total amount equal to the product obtained by multiplying--

(1) $8 per pound; by

(2) the base quota level established for the quota holder under subsection (c).

(e) TIME FOR PAYMENT- The payments to eligible tobacco quota holders required under this section shall be made in five equal installments during fiscal years 2004, 2005, 2006, 2007, and 2008.

(f) RESOLUTION OF DISPUTES- Any dispute regarding the eligibility of a person to receive a payment under this section, or the amount of the payment, shall be resolved by the county committee established under section 8 of the Soil Conservation and Domestic Allotment Act (16 U.S.C. 590h) for the county or other area in which the farm owned by the person is located.

(g) COMMODITY CREDIT CORPORATION- The Secretary shall use the funds, facilities and authorities of the Commodity Credit Corporation to carry out this section.

SEC. 203. TRANSITION PAYMENTS FOR ACTIVE PRODUCERS OF QUOTA TOBACCO.

(a) TRANSITION PAYMENTS REQUIRED- The Secretary shall make transition payments under this section to eligible active producers of quota tobacco.

(b) ELIGIBILITY- To be eligible to receive a transition payment under this section, a person shall submit to the Secretary an application containing such information as the Secretary may require to demonstrate to the satisfaction of the Secretary that the person satisfies the definition of active producer of quota tobacco. The application shall be submitted within such time, in such form, and in such manner as the Secretary may require.

(c) PRODUCTION BASE- The Secretary shall establish a production base applicable to each eligible active producer of quota tobacco, as determined under subsection (b). A producer's production base shall be equal to the quantity, in pounds, of quota tobacco subject to the basic marketing quota produced and marketed by the producer under the Agriculture Adjustment Act of 1938 for the 2001 marketing year.

(d) PAYMENT- The Secretary shall make payments to each eligible active producer of quota tobacco, as determined under subsection (b), in a total amount equal to the product obtained by multiplying--

(1) $4 per pound; by

(2) the production base established for the active producer under subsection (c).

(e) TIME FOR PAYMENT- The payments to eligible active producers of quota tobacco required under this section shall be made in five equal installments during fiscal years 2004, 2005, 2006, 2007, and 2008.

(f) RESOLUTION OF DISPUTES- Any dispute regarding the eligibility of a person to receive a payment under this section, or the amount of the payment, shall be resolved by the county committee established under section 8 of the Soil Conservation and Domestic Allotment Act (16 U.S.C. 590h) for the county or other area in which the farming operation of the person is located.

(g) COMMODITY CREDIT CORPORATION- The Secretary shall use the funds, facilities and authorities of the Commodity Credit Corporation to carry out this section.

TITLE III--TOBACCO QUALITY BOARD

SEC. 301. ESTABLISHMENT OF BOARD.

The Secretary of Agriculture (in this title referred to as the `Secretary') shall establish a permanent advisory board within the Department of Agriculture to be known as the Tobacco Quality Board (in this title referred to as the `Board').

SEC. 302. MEMBERSHIP.

(a) NOMINATION AND APPOINTMENT- The Board shall consist of 11 members, of which five shall be appointed by the Secretary from nominations submitted by representatives of United States tobacco producers, five shall be appointed by the Secretary from nominations submitted by representatives of United States tobacco product manufacturers, and one shall be an officer or employee of the Department of Agriculture appointed by the Secretary (who shall serve as Chair of the Board).

(b) TERMS-

(1) CHAIR- The Chair of the Board shall serve at the pleasure of the Secretary.

(2) OTHER MEMBERS- Other members of the Board shall serve for two-year terms, except that, for the first appointments to the Board, two producer representatives and two manufacturer representatives shall have initial terms of one year.

SEC. 303. DUTIES.

The Board shall be responsible for--

(1) determining and describing the physical characteristics of United States farm-produced tobacco and unmanufactured imported tobacco;

(2) assembling and evaluating, in a systematic manner, concerns and problems with the quality of United States tobacco, expressed by domestic and

foreign buyers and manufacturers of tobacco products;

(3) reviewing data collected by Federal agencies on the physical and chemical integrity of United States produced and imported unmanufactured tobacco, to ensure that tobacco being used in domestically-manufactured tobacco products is of the highest quality and is free from prohibited physical and chemical agents;

(4) investigating and communicating to the Secretary--

(A) conditions with respect to the production of tobacco that discourage improvements in the quality of United States produced tobacco; and

(B) recommendations for regulatory changes that would address tobacco quality issues; and

(5) such other related activities assigned to it by the Secretary.

SEC. 304. ADMINISTRATIVE PROVISIONS.

(a) STAFF- The Secretary shall provide the Board with staff experienced in the sampling and analysis of unmanufactured tobacco and capable of collecting data and monitoring tobacco production information, and such other resources necessary for the Board to perform its duties under this subtitle, as determined by the Secretary.

(b) COMMODITY CREDIT CORPORATION- The Secretary shall use the funds, facilities and authorities of the Commodity Credit Corporation to carry out this title.

TITLE IV--TOBACCO PRODUCT MANUFACTURER AND IMPORTER USER FEES

SEC. 401. USER FEE.

(a) IN GENERAL- The Secretary of Health and Human Services shall assess an annual user fee, calculated in accordance with this section, upon each tobacco product manufacturer and tobacco product importer that sells tobacco products in domestic commerce in the United States. The assessments shall commence during calendar year 2004, based on domestic sales of tobacco products during fiscal year 2003.

(b) BASE AMOUNT OF USER FEE FOR EACH CLASS OF TOBACCO PRODUCT-

(1) The base amount of the user fee for cigarette manufacturers and importers shall be $2,116,252,000.

(2) The base amount of the user fee for small cigar manufacturers and importers shall be $1,051,000.

(3) The base amount of the user fee for large cigar manufacturers and importers shall be $164,274,000.

(4) The base amount of the user fee for snuff manufacturers and importers shall be $9,920,000.

(5) The base amount of the user fee for chewing tobacco manufacturers and importers shall be $2,275,000.

(6) The base amount of the user fee for pipe tobacco manufacturers and importers shall be $1,505,000.

(7) The base amount of the user fee for roll-your-own tobacco manufacturers and importers shall be $3,231,000.

(c) DETERMINATION OF ANNUAL USER FEE FOR EACH CLASS OF TOBACCO PRODUCT- The total user fee to be assessed upon, and paid by, the manufacturers and importers of each class of tobacco product in each calendar year, as allocated pursuant to subsection (d), shall be the base amount for that class of tobacco product provided in subsection (b) multiplied by a fraction--

(1) the numerator of which is the total volume of domestic sales of that class of tobacco product in the fiscal year ending on September 30 of that calendar year; and

(2) the denominator of which is the total volume of domestic sales of that class of tobacco product in fiscal year 2003.

(d) ALLOCATION OF TOTAL USER FEE AMOUNTS BY MARKET SHARE--

(1) FORMULA- The user fee for each class of tobacco product to be paid by each manufacturer or importer of that class of tobacco product under subsection (a) shall be determined in each year by multiplying--

(A) such manufacturer's or importer's market share, as calculated with respect to the current calendar year, of that class of tobacco product; by

(B) the total user fee amount for the current calendar year, as determined under subsection (c), for that class of tobacco product.

(2) MARKET SHARE DEFINED- In this subsection, the term `market share' for each manufacturer or importer of a class of tobacco product for the purpose of the assessment to be calculated in the current calendar year shall be equal to that manufacturer's or importer's respective share (expressed as a decimal to the fourth place) of the total volume of domestic sales of that class of tobacco product during the calendar year immediately preceding the year of such assessment.

(e) DETERMINATION OF VOLUME OF DOMESTIC SALES-

(1) USE OF CERTIFIED MANUFACTURER AND IMPORTER REPORTS- The calculation of the volume of domestic sales of a class of tobacco product by a manufacturer or importer, and by all manufacturers and importers as a group, shall be made by the Secretary of Health and Human Services based on certified reports submitted by such manufacturers and importers pursuant to subsection (f).

(2) MEASUREMENT METHODS- For purposes of the Secretary's calculations under this subsection and the certifications under subsection (f), the volumes of domestic sales shall be measured as follows:

(A) With respect to cigarettes, in terms of the numbers of cigarettes sold.

(B) With respect to small cigars, the number of cigars weighing not more than three pounds per thousand sold.

(C) With respect to large cigars, the number of cigars weighing more than three pounds per thousand sold.

(D) With respect to other classes of tobacco products, in terms of the number of pounds, or fraction thereof, of these tobacco products sold.

(f) CERTIFICATION OF VOLUME OF DOMESTIC SALES- Every manufacturer and importer of tobacco products shall submit each year a certified report to the Secretary of Health and Human Services setting forth for each class of tobacco products the total, for the prior year, of such manufacturer's or importer's domestic sales to wholesalers and retailers and directly to consumers. These certified reports must be submitted to the Secretary not later than March 1 of the year after the year for which the certified report is being made.

SEC. 402. ALLOCATION OF USER FEES.

(a) IN GENERAL- The user fees collected pursuant to section 401 and any funds transferred to the Secretary of Health and Human Services by the Secretary of Agriculture pursuant to section 102(f)(3)(B)(ii) shall be available, without further appropriation, in accordance with, and for the purposes described, by this section. All such funds shall remain available until expended.

(b) FUNDING FOR FDA REGULATION OF TOBACCO PRODUCTS- The Secretary of Health and Human Services shall make 15 percent of the user fee amounts collected pursuant to section 401 each year available to the Food and Drug Administration for the regulation of tobacco products under chapter IX of the Federal Food, Drug, and Cosmetic Act.

(c) FUNDING FOR OTHER TOBACCO-RELATED PROGRAMS-

(1) TITLE II EXPENDITURES- The Secretary of Health and Human Services shall use the remaining 85 percent of the user fee amounts collected each year pursuant to section 401, and any amounts transferred to the Secretary by the Secretary of Agriculture pursuant to section 102(f)(3)(B)(ii), to reimburse the Commodity Credit Corporation for the expenditures made by that agency under title II of this Act.

(2) OTHER TOBACCO-RELATED PROGRAM- If amounts remain available for any year after making the reimbursement required under paragraph (1), the Secretary of Health and Human Services shall use the remaining amounts to fund any other program that relates to tobacco products.

TITLE V--FDA REGULATION OF TOBACCO PRODUCTS

SEC. 501. FINDINGS.

The Congress finds the following:

(1) The use of tobacco products by the Nation's children is a pediatric disease of epic 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 addictive.

(4) Virtually all new users of tobacco products are under the minimum legal age to purchase such products.

(5) Tobacco advertising and marketing contribute significantly to the use of nicotine-containing tobacco products by adolescents.

(6) Because past efforts to restrict advertising and marketing of tobacco products have failed adequately to curb tobacco use by adolescents, comprehensive restrictions on the sale, promotion, and distribution of such products are needed.

(7) Federal and State governments have lacked the legal and regulatory authority and resources they need to address comprehensively the public health and societal problems caused by the use of tobacco products.

(8) Federal and State public health officials, the public health community, and the public at large recognize that the tobacco industry should be subject to ongoing oversight.

(9) Under article I, section 8 of the Constitution, the Congress is vested with the responsibility for regulating interstate commerce and commerce with Indian tribes.

(10) The sale, distribution, marketing, advertising, and use of tobacco products are activities in and substantially affecting interstate commerce because they are sold, marketed, advertised, and distributed in interstate commerce on a nationwide basis, and have a substantial effect on the Nation's economy.

(11) The sale, distribution, marketing, advertising, and use of such products substantially affect interstate commerce through the health care and other costs attributable to the use of tobacco products.

(12) It is in the public interest for Congress to adopt comprehensive public health legislation because of tobacco's unique position in the Nation's history and economy and the need to prevent the sale, distribution, marketing and advertising of tobacco products to persons under the minimum legal age to purchase such products.

(13) The public interest requires a timely, fair, equitable, and consistent result that will serve the public interest by restricting throughout the Nation the sale, distribution, marketing, and advertising of tobacco products only to persons of legal age to purchase such products.

(14) 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.

(15) 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.

(16) 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.

(17) Tobacco advertising increases the size of the tobacco market by increasing consumption of tobacco products including increasing tobacco use by young people.

(18) Children are more influenced by tobacco advertising than adults and they smoke the most advertised brands.

(19) Tobacco company documents indicate that young people are an important and often crucial segment of the tobacco market.

(20) Advertising restrictions will have a positive effect on the smoking rates of young people.

(21) Restrictions on advertising are necessary to prevent unrestricted tobacco advertising from undermining legislation prohibiting access to young people.

(22) It is in the public interest for Congress to adopt legislation to address the public health crisis created by actions of the tobacco industry.

SEC. 502. DEFINITIONS.

(a) FEDERAL CIGARETTE LABELING AND ADVERTISING ACT- Section 3(1) of the Federal Cigarette Labeling and Advertising Act is amended--

(1) in subparagraph (A) by striking `and';

(2) in subparagraph (B) by striking the period and inserting `; and'; and

(3) by inserting the following new subparagraph at the end thereof:

`(C) any tobacco product, in any form, including bidis and kreteks, if the tobacco in the product is heated or burned and is functional in the product, and the product, 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.'.

(b) THIS TITLE- In this title:

(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)).

(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) CONSTITUENT- The term `constituent' in relation to cigarettes means any element of mainstream or sidestream smoke.

(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 title.

(7) INGREDIENT- The term `ingredient' in relation to cigarettes or smokeless tobacco products means any substance, chemical, or compound (other

than tobacco, water, or reconstituted tobacco sheet made wholly from tobacco) added, or specified for addition, by the manufacturer to the tobacco, paper, or filter of a cigarette, or to the tobacco of a smokeless tobacco product, including flavorants, processing aids, casing sauces, preservatives, and combustion modifiers.

(8) MANUFACTURER- The term `manufacturer' means any person who manufactures tobacco products intended to be sold in the United States. The term `manufacturer' shall include an importer or other first purchaser for resale in the United States of tobacco products manufactured outside of the United States or tobacco products manufactured in the United States but not intended for sale in the United States.

(9) 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.

(10) 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.

(11) 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.

(12) SECRETARY- Except where the context otherwise requires, the term `Secretary' means the Secretary of Health and Human Services.

(13) SMOKELESS TOBACCO- The term `smokeless tobacco' means any product that consists of cut, ground, powdered, or leaf tobacco and that is intended to be placed in the oral or nasal cavity.

SEC. 503. AMENDMENT OF FEDERAL FOOD, DRUG, AND COSMETIC ACT.

(a) DEFINITION- Section 201 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321) is amended by adding at the end the following:

`(nn) 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).

`(ll) The definitions contained in section 502 of the Tobacco Livelihood and Economic Assistance for our Farmers Act of 2002 shall apply with respect to chapter IX.'.

(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 chapter VIII 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), unless the product is a reduced risk product pursuant to section 912.

`(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) SCOPE-

`(1) Nothing in this chapter shall be construed to affect the Secretary's authority over, or the regulation of, products under this Act that are not tobacco products under chapter V or any other chapter of this 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 deleterious substance that may render the product more 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 more injurious to health;

`(3) its container is composed, in whole or in part, of any poisonous or deleterious substance which may render the contents more 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, advertised, or promoted in violation of section 915 or 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) 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 the information required by section 916(c);

`(10) 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

`(11) if there was a failure or refusal--

`(A) to comply with any requirement prescribed under section 904 or 908; or

`(B) to furnish any material or information required by or under section 909.

`(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 this chapter 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 this chapter, 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 (or agents thereof) that relate to the issue of whether a reduction in risk to health from tobacco products can occur upon the employment of technology available or known to the manufacturer.

`(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) consistent with the provisions of section 901(c)(2), 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- 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 the date of enactment of this chapter, 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)--

`(1) 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 the date of this chapter's enactment, that is in compliance with the requirements of this Act; and

`(2) action taken by such person to comply with the requirements under section 907 that are applicable to the tobacco product.

`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 thereof) 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, 905, 907, 908, 909, 910, 912, 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 or distribution 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 the Secretary determines that such regulation would be appropriate for the prevention of, or decrease in, the use of tobacco products by children under the age at which tobacco products may be legally purchased. 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) No restriction under paragraph (1) may prohibit the sale of any tobacco product in face-to-face transactions by a specific category of retail outlets.

`(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 for an agricultural product, 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 an advisory committee an opportunity to submit recommendations with respect to the regulation proposed to be promulgated;

`(ii) before promulgating any regulation under subparagraph (A), afford opportunity for an oral hearing;

`(iii) provide the advisory committee a reasonable time to make its recommendation with respect to proposed regulations under subparagraph (A); and

`(iv) in establishing the effective date of a regulation promulgated under this subsection, take into account the differences in the manner in which the different types of tobacco products have historically been produced, the financial resources of the different tobacco product manufacturers, and the state of their existing manufacturing facilities; and shall provide for a reasonable period of time for such manufacturers to conform to good manufacturing practices.

`(2) Exemptions; variances-

`(A) 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 an advisory committee 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.

`(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 of nicotine yields of the product;

`(ii) for the reduction or elimination of other harmful 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; and

`(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

`(C) shall not render the tobacco product unacceptable for adult consumption.

`(3) PERIODIC REEVALUATION 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 an advisory committee, 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) POWER RESERVED TO CONGRESS- Because of the importance of any decision 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,

Congress expressly reserves to itself the power to make such a decision.

`(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 an advisory committee, for a report and recommendation with respect to any matter involved in the proposed regulation which requires the exercise of scientific judgment. If a proposed regulation is referred under this

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 a risk of substantial harm to the public health exceeding the risks posed by tobacco products marketed before the date of enactment of this chapter; 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.

`(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- Approval under this section of an application for premarket approval for any tobacco product, other than a reduced risk product under section 912, that is not commercially marketed (other than for test marketing) in the United States as of the date of this chapter's enactment, is required unless the manufacturer has submitted a report under section 905(j), and the Secretary has not suspended the distribution of such product under this paragraph. Within 90 days of the submission of a report under section 905(j), the Secretary may by order suspend the distribution of the tobacco product that is the subject of that report if the Secretary determines that there is a reasonable likelihood that the tobacco product is not substantially equivalent to a tobacco product commercially marketed (other than for test marketing) in the United States as of the date of this chapter's enactment, that is in compliance with the requirements of this Act. If the Secretary fails to issue an order within this 90-day period, then the tobacco product that is the subject of that report shall be deemed to be substantially equivalent to a predicate tobacco product. The issuance of an order under this paragraph shall constitute final agency action for purposes of section 702 of title 5, the United States Code; provided, that the Secretary may rescind or modify an order issued under this paragraph at any time.

`(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 could not reasonably be expected to increase the health risks to consumers compared to a conventional tobacco product that is commercially marketed in the United States and that is in compliance with the requirements of this Act.

`(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. The communication that such product is a reduced risk product may comply with requirements prescribed by the Secretary relating to such communication, and the Secretary may require prior approval of the communication, in each case in accordance with section 912.

`(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 greater 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 an advisory committee 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 pose no greater risk to the public health than currently marketed tobacco products;