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Tobacco – McCain Letter [Folder 1] [2]
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Tobacco – McCain Letter [Folder 1] [2]
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Records of the Domestic Policy Council (Clinton Administration)
Tom Freedman's Files
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S:\WPSHR\LEGCNSL\XYWRITE\CONSUMER\TABAC.I
181
1 on lands within the jurisdiction of an Indian tribe or tribal
2 organization.
3
(b) TRADITIONAL USE EXCEPTION.-
4
(1) IN GENERAL.-In recognition of the reli-
5
gious, ceremonial, and traditional uses of tobacco
6
and tobacco products by Indian tribes and the mem-
7
bers of such tribes, nothing in this Act shall be con-
8
strued to infringe upon the right of such tribes or
9
members of such tribes to acquire, possess, use, or
10
transfer any tobacco or tobacco products for such
Do not strike
11
purposes, or to infringe upon the ability of minors
stet
12
to participate and use tobacco products for religious,
13
ceremonial, or traditional purposes
14
(2) APPLICATION OF PROVISIONS.-Paragraph
15
(1) shall apply only to those quantities of tobacco or
16
tobacco products necessary to fulfill the religious,
17
ceremonial, or traditional purposes of an Indian
18
tribe or the members of such tribe, and shall not be
19
construed to permit the general marketing of to-
20
bacco or tobacco products in a manner that is not
21
in compliance with chapter IX of the Federal Food,
22
Drug, and Cosmetic Act.
23
(3) LIMITATION.-Nothing in this Act shall be
24
construed to permit an Indian tribe or member of
25
such a tribe to acquire, possess, use, or transfer any
S. 1415 Amdt.
March 29, 1998 (8:46 p.m.)
S:\WPSHR\LEGCNSL\XYWRITE\CONSUMER\TABAC.1
182
1
tobacco or tobacco product in violation of section
2
2341 of title 18, United States Code, with respect
3
to the transportation of contraband cigarettes.
4
(c) PAYMENTS TO TOBACCO TRUST FUND.-Any In-
or
BMM
5 dian tribe or tribal organization that engages in the manu-
6 facture of tobacco products shall be subject to liability for
7 any annual fee payments that are levied on other manufac-
8 turers for purposes of any tobacco trust fund. Any Indian
mm
9 tribe or tribal organization that does not pay such fees
10 shall be considered a nonparticipating manufacturer and
11 shall be subject to surcharges made applicable to such
12 nonparticipating manufacturers under this Act.
13
(d) APPLICATION OF FEDERAL FOOD, DRUG, AND
14 COSMETIC ACT REQUIREMENTS.-
provisions OF this Act and the
15
(1) IN GENERAL.-The Secretary, in consulta
Provisions OF
16
tion with the Secretary of Interior, shall promulgate
17
regulations to provide for the waiver of any require
18
ment of the Food, Drug, and Cosmetic Act (21
relating to the manufacture, distribution and
19.
U.S.C. 301 et seq.) with respect to tobacco products
sde OF tobacro products shall apply in Indian to defined in BUSY
20
manufactured, distributed, or sold within the exte-
and on other trust lands subject to the jurisdiction of anJudianT Tr
21
rior boundaries of Indian reser vations or on lands
To the extent that an Indian tribe engages in the manufacture,
22
within the jurisdiction of an Indian tribe as appro
distribution or sde OF tobacco products, the provisions of this Act st
23
priate to comply with this section.
apply to tosuch tribe.
24
(2) JURISDICTION.-With respect to tobacco-re-
25
lated activities that take place within the exterior
in Indian country as defined in 18 US.C.S 1151 or on trust
lands
S. 1415 Amdt.
March 29, 1998 (8:46 p.m.)
S:\WPSHR\LEGCNSL\XYWRITE\CONSUMER\TABAC.1
183
1
boundaries of Indian reservations or on lands within
2
the jurisdiction of an Indian tribe, the responsibility
3
for enforcing the regulations promulgated pursuant
4
to paragraph (1) shall be vested in-
5
(A) the Indian tribe or the tribal organiza
6
tion involved;
7
(B) the State within which the lands of the
8
Indian tribe or tribal organization are located,
9
pursuant to a voluntary cooperative agreement
10
entered into by the State and the Indian tribe
11
or tribal organization; or
12
(C) the Secretary.
13
(3) ELIGIBILITY FOR ASSISTANCE.-Under the
14
regulations promulgated under paragraph (1), the
15
Secretary, in consultation with the Secretary of the
16
Interior, shall provide assistance to an Indian tribe
17
or tribal organization in meeting and enforcing the
18
requirements under such regulations if-
including grant funds,
19
(A) the tribe or tribal organization has a
20
governing body that has powers and carrres out
21
duties that are similar to the powers and duties
22
of State or local governments;
23
(B) the functions to be exercised through
24
the use of such assistance relate to activities
25
conducted within the exterior boundaries of In
in
Ind, an country R defined io 18 VS.C.S 1151, and on
other trust bands subject to the jurisdiction OF an
S. 1415 Amdt.
March 29, 1998 (8:46 p.m.)
Indian tribe; and
S:\WPSHR\LEGCNSL\XYWRITE\CONSUMER\TABACI
184
1
dian reservations or on lands within the juris
2
diction of the tribe or tribal organization in
3
volved; and
4
(C) the tribe or tribal organization is rea-
5
sonably expected to be capable of carrying out
6
the functions required by the Secretary.
7
(4) DETERMINATIONS.-Not later than 60 days
8
after the date on which an Indian tribe or tribal OFF
9
ganization submits an application for assistance
10
under paragraph (3), the Secretary shall make a de-
11
termination concerning the eligibility of such tribe or
12
organization for such assistance.
13
(5) IMPLEMENTATION BY THE SECRETARY.-If
14
the Secretary determines that the Indian tribe or
15
tribal organization is not willing or not qualified to
16
administer the requirements of the regulations pro-
or the tribe is a nanpaticipating
17
mulgated under this subsection, the Secretary, in manufactures
18
consultation with the Secretary of the Interior, shall
19
implement and enforce such regulations on behalf of
20
the tribe or tribal organization
21
(6) DEFICIENT APPLICATIONS; OPPORTUNITY
22
TO CURE.-If the Secretary determines under para-
23
graph (4) that a tribe is not eligible for assistance
24
under this subsection, the Secretary shall-
S. 1415 Amdt.
March 29, 1998 (8:46 p.m.)
S:\WPSHR\LEGCNSL\XYWRITE\CONSUMER\TABAC.1
185
1
(A) submit to such tribe or organization,
2
in writing, a statement of the reasons for such
3
determination; and
4
(B) shall assist such tribe in overcoming
5
any deficiencies that resulted in the determina-
6
tion of ineligibility.
7
After an opportunity to review and cure such defi-
8
ciencies, the tribe or organization may re-apply to
9
the Secretary for assistance under this subsection.
10
(e) RETAIL LICENSING REQUIREMENTS.-
11
(1) IN GENERAL.-The requirements of the
12
Federal Food, Drug, and Cosmetic Act (21 U.S.C.
13
301 et seq.) and this Act with respect to the licens-
14
ing of tobacco retailers shall apply to retailers that
in Indian country as defined in
15
sell tobacco or tobacco products within the exterior
18 US.C.S 1151 or on trust bands within the junsdiction OF the India
16
boundaries of Indian reservations or on lands within
tribe.
17
the jurisdiction of an Indian tribe or tribal organiza
18
tion.
19
(2) MINIMUM FEDERAL STANDARDS.-
20
(A) IN GENERAL.-Not later than 180
21
days after the date of enactment of this Act,
22
the Secretary shall promulgate regulations to
23
authorize an Indian tribe or tribal organization
24
to implement a tribal tobacco product licensing
in Indian cantry as defined in 18 US.C. 81151, or
25
program within Indian reservations or on lands
on trust lands within the jurisdiction 3fthe Indian tribe.
S. 1415 Amdt.
March 29, 1998 (8:46 p.m.)
S:\WPSHR\LEGCNSL\XYWRITE\CONSUMER\TABAC.1
186
1
within the jurisdiction of an Indian tribe or
2
tribal organization.
3
(B) MINIMUM STANDARDS.-In order for
4
an Indian tribe or tribal organization to assume
5
responsibility for the licensing and regulation or
Indian
Family
as
defines
6
tobacco-related activities conducted within the
in 18 usc $ 1151, and on other trust lands subject to the jurisdic
7
exterior boundaries of Indian reservations or on
of
8
lands within the jurisdiction of an Indian tribe,
9
or tribal organization the Indian tribe or tribal
10
organization shall establish terms, conditions,
11
and standards similar to those described in sec-
12
tion 235 of this Act for a State licensing law.
13
(C) WAIVER.-An Indian tribe or tribal or
14
ganization shall have the same right to apply
15
for waiver and modification of the law described
16
in subparagraph (B) as a State pursuant to the
17
Act involved.
18
(3) IMPLEMENTATION BY THE SECRETARY.-If
19
the Secretary, in consultation with the Secretary of
20
the Interior, determines that the Indian tribe -or-
21
tribal organization is not qualified to administer the
22
relevant requirements of the Federal Food, Drug,
meet the minimum
23
and Cosmetic Act (21 U.S.C. 301 et seq.) or the
standards of Section 603(e)(2)(3),
24
Secretary, in consultation with the Secretary of the
S. 1415 Amdt.
March 29, 1998 (8:46 p.m.)
S:\WPSHR\LEGCNSL\XYWRITE\CONSUMER\TABAC1
187
1
Interior, shall implement. such requirements on be-
2
half of the Indian tribe or tribal organization
3
(f) ELIGIBILITY FOR PUBLIC HEALTH PAYMENTS.-
4
(1) GRANT.-
5
(A) IN GENERAL.-For each fiscal year the
6
Secretary shall award a grant to each Indian
7
tribe or tribal organization that has an ap-
8
proved anti-smoking plan for the fiscal year in-
9
volved under paragraph (2). in an amount equal
10
to the amount determined under paragraph (3) 0
11
(B) REDUCTION IN STATE AMOUNTS.
12
With respect to any State in which the service
13
area or areas of an Indian tribe or tribal orga
14
nization that receives a grant under subpara
15
graph (A) are located, the Secretary shall re-
16
duce the amount otherwise payable to such
17
State, under this Act.
18
(2) TRIBAL PLANS.-To be eligible to receive a
19
grant under paragraph (1), an Indian tribe or tribal
20
organization shall prepare and submit to the Sec-
21
retary an anti-smoking plan and shall otherwise
22
meet the requirements of subsection (e). The Sec-
23
retary shall promulgate regulations providing for the
24
form and content of anti-smoking plans to be sub-
25
mitted under this paragraph.
S. 1415 Amdt.
March 29, 1998 (8:46 p.m.)
S:\WPSHR\LEGCNSL\XYWRITE\CONSUMER\TABAC.1
188
1
(3) AMOUNT DETERMINED.-Except as pro-
2
vided in this subsection, the amount of any grant for
3
which an Indian tribe or tribal organization is eligi-
4
ble under paragraph (1) shall be determined by the
5
Secretary based on the product of-
6
(A) the ratio of the total number of indi-
7
vidual residing on or in such tribe's or tribal or-
8
ganization's reservation, jurisdictional lands, or
9
the active user population, relative to the total
10
population of the State involved; and
11
(B) the amount allocated to the State for
12
such public health purposes.
13
(4) USE.-Amounts provided to a tribe or tribal
14
organization under this subsection shall be used to
15
reimburse the tribe for smoking-related health ex-
16
penditures, to further the purposes of this title Act
17
and in accordance with a tribal anti-smoking plan
18
approved by the Secretary. Indian tribes and tribal
19
organizations shall have the flexibility to utilize such
20
amounts to meet the unique health care needs of
21
persons within their service populations within the
22
context of tribal health programs if such programs
23
meet the fundamental Federal goals and purposes of
24
Federal Indian health care law and policy.
S. 1415 Amdt.
March 29, 1998 (8:46 p.m.)
S:\WPSHR\LEGCNSL\XYWRITE\CONSUMER\TABAC1
189
1
(5) REALLOTMENT.-Amounts set aside and
2
not expended under this subsection shall be reallot-
3
ted among other eligible Indian tribes and tribal or-
4
ganizations.
5
(g) OBLIGATIONS OF MANUFACTURERS.-Manufac-
including Indian tribes, participating ID, or covered under this Act or an
6 turers participating in, or covered under this any Act shall
Act shall not engage in eny activity the jurisdieti
7 not engage in any activity on lands within the jurisdiction
of an Indian tribe that is prohibited by this Act:
8 of an Indian tribe or tribal organization that/is prohibited
9 by this title or such other Act
Indian country as det
in 18US.C.S § 1151 and on 0
10
(h) USE OF TRUST FUND PAYMENTS.-Amounts trust bndes. subject
11 made available from the tobacco trust fund pursuant to
12 any Indian health provisions of this Act shall be provided
13 to the Indian Health Service and, through the provisions
14 of the Indian Self Determination and Education Assist-
15 ance Act (25 U.S.C. 450b et seq.) to Indian tribes or tribal
16 organizations to be used to reduce tobacco consumption,
17 promote smoking cessation, and to fund related activities
18 including-
19
(1) clinic and facility design, construction, re-
20
pair, renovation, maintenance, and improvement;
21
(2) health care provider services and equipment;
22
(3) domestic and community sanitation associ-
23
ated with clinic and facility construction and im-
24
provement;
25
(4) inpatient and outpatient services; and
S. 1415 Amdt.
March 29, 1998 (8:46 p.m.)
S:\WPSHR\LEGCNSL\XYWRITEVCONSUMER\TABAC.1
190
1
(5) other programs and services which have as
2
their goal raising the health status of Indians.
3
(i) PREEMPTION.-
4
(1) IN GENERAL.-Except as otherwise pro-
5
vided in this section, nothing in this Act shall be
6
construed to prohibit an Indian tribe or tribal orga
7
nization from imposing requirements, prohibitions,
8
penalties, or other measures to further the purposes
9
of this title that are in addition to the requirements,
10
prohibitions, or penalties required by this title or
11
such other Act.
12
(2) PUBLIC EXPOSURE TO SMOKE.-Nothing in
13
this title shall be construed to preempt or otherwise
14
affect any Indian tribe OF tribal organization rule or
15
practice that provides greater protections from the
16
health hazards of environmental tobacco smoke.
17
(3) NATIVE AMERICANS.-A State may not im-
18
pose obligations or requirements relating to the ap-
19
plication of this title or any other Act enacted in
20
order to give effect to the national tobacco settle-
21
ment agreement of June 20, 1997, to Indian tribes
22
and tribal organizations.
S. 1415 Amdt.
March 29, 1998 (8:46 p.m.)
Bryan
Section 604.
geod Jonee
An Indian tribe or tribal corporation shall collect any excise or sales tax imposed by a State, agreed to
within the exterior borders of which the sale occurs, on non-members of the Indian tribe as a
consequence of the purchase of tobacco products by the non-member from the Indian tribe or
tribal corporation. The Indian tribe or tribal corporation shall remit such taxes collected to the
Treasury of the United States, which shall, in turn, remit the taxes to the State in which they were
collected.
Sustitute for
10-9
Girton
y
2
Gorton Amendment:
Add Section 604 as follows:
Sec. 604. STATE TOBACCO EXCISE TAX COMPLIANCE
#1
(a) An Indian tribe or tribal corporation shall collect and remit to a State, any tobacco
excise or sales tax imposed by the State on non-members of the Indian tribe as a consequence
of the purchase of tobacco products by the non-member from the Indian tribe or tribal
corporation.
(b) A State may bring an action in a district court of the United States to enforce the
requirements under subsection (a).
Title 7
Amendment No.
Calendar No.
Adoptd
Amendment to Committee Amendment to S. 1415
Purpose: to require that, in the event tobacco product manufacturers are unable
to make the payments required under this Act, parties may seek recovery from
available insurance coverage
In the Committee on Commerce, Science, and Transportation
Amendment to be proposed by Mr. Breaux
Add to Section 705(b):
(3) if any time the tobacco product manufacturers cannot make the payments
required under this Act, all claims against an insurer, whether by direct action or
otherwise, including past, pending and future claims, arising from, or caused by, the
use of a tobacco product shall be preserved. Nothing in this subsection, shall
expand or abridge state law.
Agreed
Voice vok
Amendment No.
Calendar No.
Amendment to Committee Amendment to S. 1415
Purpose: to require that a determination of attorneys fees by an arbitration panel
under this Act offset any potential state liability for attorneys fees
In the Committee on Commerce, Science, and Transportation
Amendment to be proposed by Mrs. Hutchison
Viz:
On page , line , insert the following:
In the case of a state that has pursued independent civil action against
tobacco manufacturers, and that may be liable for attorneys fees, the total amount
of any determination of attorneys fees to be paid by tobacco manufacturers
through arbitration by state and/or federal proceedings shall be applied as a dollar-
for-dollar offset against any potential state liability for attorneys fees.
A
O:\BAI\BAI98.834
S.L.C.
Brownbak
AMENDMENT NO.
Calendar No.
withdrawn
Purpose: To provide for certain limitations on attorneys'
will will rase
fees under any global tobacco settlement.
on flor
IN THE SENATE OF THE UNITED STATES-105th Cong., 2d Sess.
(no.)
(title)
Referred to the Committee on
and ordered to be printed
Ordered to lie on the table and to be printed
AMENDMENT intended to be proposed by Mr. BROWNBACK
Viz:
1
At the appropriate place, insert the following:
2 SEC.
. LIMITATIONS ON ATTORNEYS' FEES.
3
(a) GENERAL LIMITATION.-Notwithstanding any
4 other provision of law, a State that receives funds under
5 this Act may not pay attorneys' fees (on behalf of attor-
6 neys for the plaintiffs) in connection with an action main-
7 tained by a State against one or more tobacco companies
8 to recover tobacco-related medicaid expenditures, or for
O:\BAI\BAI98.834
S.L.C.
2
1 other causes of action involved in the settlement arrange-
2 ment, at a rate that exceeds $250 per hour.
3
(b) FEE ARRANGEMENTS.-Subsection (a) shall
4 apply to attorneys' fees provided for or in connection with
5 an action of the type described in such subsection under
6 any-
7
(1) court order;
8
(2) settlement agreement;
9
(3) contingency fee arrangement;
10
(4) arbitration procedure;
11
(5) alternative dispute resolution procedure (in-
12
cluding mediation); or
13
(6) other arrangement providing for the pay-
14
ment of attorneys' fees.
15
(c) EXPENSES.-The limitation described in sub-
16 section (a) shall not apply to any amounts provided for
17 the attorneys' reasonable and customary expenses.
18
(d) REQUIREMENTS.-No award of attorneys' fees
19 shall be made under any national tobacco settlement until
20 the attorneys involved have—
21
(1) provided to the Governor of the appropriate
22
State, a detailed time accounting with respect to the
23
work performed in relation to any legal action which
24
is the subject of the settlement or with regard to the
25
settlement itself; and
O:\BAI\BAI98.834
S.L.C.
3
1
(2) made public disclosure of the time account-
2
ing under paragraph (1) and any fee agreements en-
3
tered into, or fee arrangements made, with respect
4
to any legal action that is the subject of the settle-
5
ment.
6
(e) EFFECTIVE DATE.-The limitation on the pay-
7 ment of attorneys' fees contained in this section shall be-
8 come effective on the date of enactment of any Act provid-
9 ing for a national tobacco settlement.
S.L.C.
O:\BAI\BAI98.796
6
amedito
AMENDMENT NO.
Calendar No.
vvote
Purpose: To provide for the establishment and funding of
a National Institutes of Health Trust Fund for Health
Research.
IN THE SENATE OF THE UNITED STATES-105th Cong., 2d Sess.
S.1415
To facilitate implementation of the settlement reached be-
tween the Attorneys General of the several States and
manufacturers of tobacco products, and for other pur-
poses.
Referred to the Committee on
and ordered to be printed
Ordered to lie on the table and to be printed
AMENDMENT intended to be proposed by Mr. DORGAN
Viz:
1
Subtitle E of title XXVIII of the Public Health Serv-
2 ice Act, as added by section 1106(a), is amended by add-
3 ing at the end the following:
4 SEC. 2805. NATIONAL INSTITUTES OF HEALTH TRUST FUND
5
FOR HEALTH RESEARCH.
6
"(a) CREATION OF TRUST FUND.-There is estab-
7 lished in the Treasury of the United States a trust fund
8 to be known as the 'National Institutes of Health Trust
9 Fund for Health Research' (hereafter referred to in this
S.L.C.
O:\BAI\BAI98.796
2
1 section as the "Trust Fund'), consisting of such amounts
2 as may be appropriated or transferred to the Trust Fund
3 as provided in this section.
4
"(b) FUNDING.-There shall be transferred to the
5 Trust Fund each fiscal year an amount equal to 21 per-
6 cent of the amount paid to the Tobacco Settlement Trust
7 Fund for such year to carry out this section in such fiscal
8 year.
9
"(c) OBLIGATIONS FROM TRUST FUND.-
10
"(1) IN GENERAL.-Subject to the provisions of
11
paragraph (4), with respect to the amounts made
12
available in the Trust Fund in a fiscal year, the Sec-
13
retary shall distribute during any fiscal year-
14
"(A) 2 percent of such amounts to the Of-
15
fice of the Director of the National Institutes of
16
Health to be allocated at the Director's discre-
17
tion-
18
"(i) for carrying out the responsibil-
19
ities of the Office of the Director, including
20
the Office of Research on Women's Health
21
and the Office of Research on Minority
22
Health, the Office of Alternative Medicine,
23
the Office of Rare Disease Research, the
24
Office of Behavioral and Social Sciences
25
Research (for use for efforts to reduce to-
O:\BAI\BAI98.796
S.L.C.
3
1
bacco use), the Office of Dietary Supple-
2
ments, and the Office for Disease Preven-
3
tion; and
4
"(ii) for construction and acquisition
5
of equipment for or facilities of or used by
6
the National Institutes of Health;
7
"(B) 2 percent of such amounts for trans-
8
fer to the National Center for Research Re-
9
sources to carry out section 1502 of the Na-
10
tional Institutes of Health Revitalization Act of
11
1993 concerning Biomedical and Behavioral Re-
12
search Facilities;
13
"(C) 7.5 percent of such amounts to be
14
used for research into the prevention and cure
15
of cancer;
16
"(D) 7.5 percent of such amounts to be
17
used for research into the prevention and cure
18
of heart disease, stroke, and other cardio-
19
vascular diseases;
20
"(E) 1 percent of such amounts to be used
21
for prevention research programs at the Centers
22
for Disease Control and Prevention;
23
"(F) 1 percent of such amounts to be used
24
for quality and health outcomes research at the
O:\BAI\BAI98.796
S.L.C.
4
1
Agency for Health Care Policy and Research;
2
and
3
"(G) the remainder of such amounts to
4
member institutes and centers, including the
5
Office of AIDS Research, of the National Insti-
6
tutes of Health in the same proportion to such
7
remainder, as the amount of annual appropria-
8
tions under appropriations Acts for each mem-
9
ber institute and center for the fiscal year bears
10
to the total amount of appropriations under ap-
11
propriations Acts for all member institutes and
12
centers of the National Institutes of Health for
13
the fiscal year.
14
"(2) PLANS OF ALLOCATION.-The amounts
15
transferred under paragraph (1)(G) shall be allo-
16
cated by the Director of the National Institutes of
17
Health or the various directors of the institutes and
18
centers, as the case may be, pursuant to allocation
19
plans developed by the various advisory councils to
20
such directors, after consultation with such
21
directors.
-
22
"(3) GRANTS AND CONTRACTS FULLY FUNDED
23
IN FIRST YEAR.-With respect to any grant or con-
24
tract funded by amounts distributed under para-
25
graph (1), the full amount of the total obligation of
O:\EAI\BAI98.796
S.L.C.
5
1
such grant or contract shall be funded in the first
2
year of such grant or contract, and shall remain
3
available until expended.
4
"(4) TRIGGER AND RELEASE OF MONIES AND
5
PHASE-IN.-
6
"(A) TRIGGER AND RELEASE.-No ex-
7
penditure shall be made under paragraph (1)
8
during any fiscal year in which the annual
9
amount appropriated for the National Institutes
10
of Health is less than the amount SO appro-
11
priated for fiscal year 1999.
12
"(B) PHASE-IN.-The Secretary shall
13
phase in the distributions required under para-
14
graph (1) SO that-
15
"(i) 25 percent of the amount in the
16
Trust Fund is distributed in the first fiscal
17
year for which funds are available;
18
"(ii) 50 percent of the amount in the
19
Trust Fund is distributed in the second
20
fiscal year for which funds are available;
21
"(iii) 75 percent of the amount in the
-
22
Trust Fund is distributed in the third fis-
23
cal year for which funds are available; and
24
"(iv) 100 percent of the amount in
25
the Trust Fund is distributed in the fourth
O:\BAI\BAI98.796
S.L.C.
6
1
and each succeeding fiscal year for which
2
funds are available."
HUTCHISON AMENDMENT
Gnarestional Review - -- - In accordance with
section 801 of title 5, United States Code,
Congress shall review, and may disapprove, any rule
proposed under the Tobacco Products Cantrol Act.
AMENDMENT BY SENATOR HOLLINGS
TO STRIKE SUBTITLES A, B, AND C OF TITLE XI
Viz: Strike all on page 310, line 12, through page 342, line 20.
apealto
Ford Amendment #28: To apply existing penalties related to FDA in the event of the
unauthorized release of documents received from the Depository.
(1) On page 91, after line 19, INSERT
"(dd) The failure of any person to comply with Section 906(c)
(2) On page 44, line 4 after "section" INSERT
"or under Title IX of the Tobacco Products Control Act"
(3) On page 219, after line 9 INSERT
"(c) The using by any person to his own advantage or the disclosure of
information other than as authorized by this Act shall be a prohibited act under
21 USC Sec. 331."
Defented unce
13-4 Y
Ford Amendment #2. Purpose: to reduce annual payment amounts to those contained in Clinton
budget
On page 158, strike lines 10 through 15 and insert the following:
"(1) year 1 - $ 9,800,000,000;
(2) year 2 — $ 11,800,000,000;
(3) year 3 — $ 13,300,000,000;
(4) year 4 - $ 14,500,000,000; and
(5) year 5 and each subsequent year -
$ 16,100,000,000."
Ford Amendment #45. Purpose: To limit "real" annual payments to $506 billion over 25 years,
as the legislation has been publicly described
On page 158, strike lines 10 through 15 and insert the following:
"(1) year 1- $ 10,500,000,000;
(2) year 2- $ 12,000,000,000;
(3) year 3 - $ 14,500,000,000;
(4) year 4 - $ 18,000,000,000; and
(5) year 5 and each subsequent year -
$ 21,000,000,000."
Ford Amendment #46. Purpose: To limit "real" annual payments to $506 billion over 25 years,
as the legislation has been publicly described
On page 161, line 13, add the following new subsection:
"(h) Notwithstanding the previous provisions of this section, the total payments required
under this section during the first 25 years in which this section is in effect, prior to any
adjustments required under section 403, shall not exceed $506,000,000,000."
A MODEL FOR LEGISLATION THAT DOES Tobucco - NOT DEPEND ON INDUSTRY CONSENT
The McCain bill, which draws heavily on the bill proposed by
the state Attorneys General, was drafted with the assumption that
the tobacco companies would participate. Thus, although it has
provisions for non-participating manufacturers and imposes most of
its requirements on all manufacturers, the bill was not intended to
operate in a world without the manufacturers' consent. Given the
industry's current threat to walk away from the table, it becomes
critical to draft a bill that not only achieves the President's
five goals without the industry's consent, but also includes
provisions which would permit the companies to return to the table.
Our vision is a single piece of legislation with two parts
a tough comprehensive package that applies to all tobacco
manufacturers and a separate "deal" that further advances the
President's goals while giving the tobacco industry a significant
inducement to participate. This approaches closer to the sort of
bill that one would have drafted had there been no prospect of or
interest in industry participation at the outset. The first part
is a stand-alone piece of legislation. It could be enacted alone.
The second part is in the nature of an inducement to the industry
not to challenge the law because it offers the liability protection
that the industry wants.
As the Administration has noted, the McCain bill is in need of
substantial revision on both technical and policy grounds. In
addition, as we have noted in our chart outlining concerns with the
McCain bill, various provisions of the legislation raise
significant constitutional concerns. These constitutional concerns
may generally be satisfied through modest modifications, although
in some instances -- such as the provisions that purport to
restrict non-commercial speech -- we believe deletions are
necessary. However, the reshaping the McCain bill into the two-
part structure that we discuss here would not require enormous
modifications. It would be necessary to remove the consent-based
provisions throughout the bill and gather them (or some subset
thereof) in a separate Title that embodies the "deal." The result,
however, would be a simpler, clearer bill that deals more
effectively with both scenarios consent and no consent.
There are a number of advantages to this model:
*
It is less complicated and therefore easier to administer
than the present bill, particularly in the face of
industry opposition
*
The bulk of restrictions do not rely on cumbersome
consent mechanisms, such as consent decrees, settlement
agreements and protocols
1
*
There is no basis for an antitrust exemption in the
stand-alone portion of the bill because there will
be no "agreement" to effectuate (we continue to
believe that there should be no antitrust exemption
under any circumstances)
*
The bill can easily be modified if it becomes clear the
industry will never consent by removing the final
title and will be more effective if some, but not
all, manufacturers decide to participate
We have done a quick review of the McCain bill and identified
the changes that would need to be made to modify it as described.
Further study will be required to make sure all of the pieces fit
together.
2
THE MODIFIED MCCAIN BILL
Part One: The Industry-Wide Package Skud alone
*
Increases the price of cigarettes by $1.10 per pack over 5
years assesment Us. tax
Full FDA Authority
McCain's version or an administration substitute
Marketing Restrictions
The FDA Regulations + narrowly tailored extensions (but not
the additional restrictions barring all outdoor advertising,
advertising on the Internet, and the use of human images and
cartoons)
Expansion of smoking cessation and prevention programs and the
reduction of secondhand smoke
Protection for tobacco farmers and their communities
The LEAF bill or a substitute
Significant leek-back penalties surcharge
McCain or an administration substitute
Extensive labelling and constituent disclosure requirements
Licensing and registration provisions
McCain or an administration substitute
*
Disclosure of all non-privileged documents
50th
Part Two: The Deal Participating manufacturess
>TiHe 12
*
The Additional marketing restrictions (such as the
restrictions barring outdoor advertising, the use of human or
animal images and cartoons, etc.)
Compliance with all of the marketing restrictions contained in
the industry-wide package, which would be set forth as
independent terms of the protocol so that they would still
apply to the participating manufacturers even if they were
held invalid as to non-participants
Civil liability provisions
Some enforcement provisions that rely on withdrawal of
liability protections for egregious conduct
Attorneys fees provision (if necessary)
The Look-back provisions in the industry-wide package, which
3
Severability
would be set forth as independent terms of the protocol SO
that they would still apply to the participating manufacturers
even if they were held invalid as to non-participants
4
THE DEAL
I. Problems in the current McCain bill
The current McCain bill is confusing, in large part because it
incorporates several different consent mechanisms. The bill
contemplates the following:
1) a Protocol, apparently between tobacco companies and the
federal government;
2) multiple consent decrees, probably between individual
companies and individual states, though the bill also
suggests that the consent decrees are between companies;
3) a Master Settlement Agreement;
4) a Trust Agreement of unclear scope.
The bill does not clearly connect these consent mechanisms to each
other or to the liability provisions. Moreover, the bill
intersperses these consent mechanisms throughout the bill, making
severability difficult.
II. A Better Consent-based Bill
Some of the complexities of the McCain bill can be avoided if
one assumes a bill with two fundamental parts -- a freestanding set
of statutory provisions that contains most of the relevant
provisions that can be imposed consistent with the constitution (a
modified version of Titles I-XI of McCain) and an additional title
(Title XII) that contains all of the provisions of "the deal.
Tobacco companies that decide not to participate will simply
continue to be subject to the provisions of Titles I-XI, as will
the companies that do participate. By contrast, participating
companies will receive the benefits of Title XII, even though they
would remain subject to the restrictions set forth in Titles I-XI.
The bill would be designed to ensure that Title XII was wholly
severable from the remainder of the bill; if any aspect of Title
XII were struck down, Titles I-XI would remain in force and would
provide a coherent regulatory framework for the future (There
remain, however, substantial questions as to whether the converse
should be true and how severability should work as a general
matter.)
The bill would not use the term "non-participating
manufacturer." A non-participating manufacturer would simply
comply with Title I-XI (one could create additional incentives,
such as bonding requirements, but the greater such incentives are,
the more likely Title XII will be struck down as an
unconstitutional condition).
Title XII (the deal) would contain two principal sections: 1)
how a tobacco manufacturer qualifies for the deal (e.g., by
agreeing to advertising restrictions and look-back assessments) and
5
2) the liability limitations that a participating manufacturer
would receive in exchange. In contrast to McCain, which places the
qualifications throughout the bill in a series of enforcement
provisions, the qualifications would be in a single place. We
would propose that the qualifications should be the definition of
"participating tobacco product manufacturer." As this bill would
be designed, that term would have meaning only in Title XII.
As we have previously discussed, additional marketing
restrictions would be most likely to survive constitutional
challenge if the qualifications for being a "participating tobacco
product manufacturer" were speech-neutral. If it is necessary to
specify advertising restrictions, the preferred consent mechanism
is a Protocol between the federal government and the tobacco
industry. A Protocol signed by the Secretary of Health and Human
Services ensures that the federal government can enforce all
relevant provisions, avoids the initial judicial approval that
would be required under a consent decree approach, and does not
require the federal legislation to condition the receipt of any
state funding on their willingness to enter into settlements that
include constitutionally suspect advertising restrictions. For
these reasons, the Protocol may be the best choice.
A bill that used a Protocol would not preclude the existence
of state court consent decrees. Indeed, such a bill could require
the state suits to be settled, but it would not require any
particular terms in those settlement agreements (other than,
perhaps, payment of attorneys fees, see below).
The qualifications for becoming a participating tobacco
product manufacturer can be extensive. They should ensure that
there will be minimal litigation over the marketing restrictions
and other provisions in the law and that bad actors and those who
do not meet their youth smoking reduction targets do not get the
liability protections. Thus, we would propose that participating
manufacturers must be subject to all of the marketing restrictions
(the FDA restrictions plus narrowly tailored extensions plus
additional, broader restrictions that would raise constitutional
concerns if imposed directly).
III. Open Policy Issues
There remain a number of fundamental policy issues with
respect to this proposal, including:
A. Impact of Invalidation of Part of the Deal on Liability
Limits
There are a variety of difficult questions concerning the loss
of liability protection by bad actors, implicating both legal and
policy concerns. We have set forth some general options for
provisions that would define the circumstances under which
6
participating tobacco manufactures would lose liability protection
due to judicial invalidation of those restrictions and burdens.¹
We note at the outset that severe practical concerns arise if
the loss of liability protection is tied to the judicial
invalidation of certain burdens and restrictions. We have
previously referred to concerns similar to these as the "spigot"
problem. One key problem is figuring out when a provision has been
invalidated, given appeal rights and multiple federal jurisdictions
where different rulings might be returned. To alleviate these
concerns, we recommend that the legislation provide that all
constitutional challenges to the act be brought in a single forum -
- such as the United States District Court for the District of
Columbia with direct review (on an expedited basis) as of right
to the Supreme Court. This approach will minimize litigation delay
and avoid the problems that would result from conflicting lower
court decisions, as such conflicts would make it very difficult to
determine whether the liability protections were in force at a
given moment.
1. General Points -- A primary benefit of a
liability protection bargain is that it would weaken the
incentive for participating manufacturers to raise
constitutional objections not only to the burdens and
restrictions contained in that bargain but also to the
similar burdens and restrictions that would be contained
in the accompanying stand alone legislation. To the
extent that the burdens and restrictions on tobacco
manufacturers -- such as the conditional assessments
imposed through the lookback provisions and the
advertising restrictions currently found in the FDA
regulation -- appeared both in the bill's mandatory,
industry-wide provisions and in the bargain,
participating manufacturers might have sufficient
incentives not to challenge the direct imposition of the
burdens or restrictions that they had accepted in
exchange for liability protection. They would continue
to be subject to the similar (and perhaps even more
expansive) restrictions contained in the bargain even if
a challenge to their direct imposition succeeded.
1We do not discuss how the bill should handle the general
question of severability, i.e., which portions of the stand alone
legislation should survive invalidation of other portions of that
legislation. One option for addressing this problem would be to
rely on conventional severability language. But conventional
severability language is not well suited to defining when judicial
invalidations should result in the loss of liability protection.
This section address that problem.
7
There are two distinct sets of circumstances under
which the judicial invalidation of various burdens and
restrictions might cause participating manufacturers to
lose liability protection.
(1) Courts could invalidate some of the burdens and
restrictions that the stand-alone portion of the bill
would impose directly on all tobacco manufacturers.
These rulings would not necessarily affect the
application of these burdens and restrictions to
participating manufacturers if such burdens and
restrictions were also set forth as independent terms of
the bargain. However, there may be policy reasons for
tying the continued availability of the bargain to the
continued validity of the burdens and restrictions
contained in the stand alone portion of the legislation.
For instance, if courts struck down the direct imposition
of important restrictions on youth advertising by non-
participating manufacturers, the public health benefits
that could be obtained from a bargain that required
participating manufacturers to comply with similar, or
even more expansive, restrictions might be too small to
justify the liability protection.
(2) Courts could invalidate some or all of the
burdens and restrictions that would be included as
independent terms of the liability protection bargain
itself. Manufacturers who elected to participate
presumably would not bring a challenge to these burdens
and restrictions, but other parties might. For instance,
a non-participating manufacturer might object to the
liability protection enjoyed by its competitors; or a
distributor who wishes to advertise might challenge the
legal incentive that prompted a participating supplier to
insist that a distributor cease advertising its brands.
In sum, the bill's provisions respecting the loss of
liability protection for participating manufacturers must
account for two types of potential judicial rulings: (1)
invalidation of key elements of the statutory regime
affecting non-participating manufacturers in a manner
that could undermine the basis for the bargain and (2)
invalidation of important aspects of the government's
bargain with participating manufacturers.
If drafters of the bill determined, as a policy
matter, that the liability protection bargain will only
benefit the public if all manufacturers, whether
participating or not, remain subject to critical burdens
and restrictions, then the protocol should be structured
so that the liability protections are withdrawn upon a
holding that either some or perhaps all of the
8
advertising restrictions that have been imposed directly
are unconstitutional. There are, however, real costs to
such an approach: It would permit a third party, by
bringing a successful challenge to the direct imposition
of advertising restrictions, to nullify the conditional
portion of the legislation.
2. Options With these points in mind, we offer several
options for providing for the termination of liability
protection in response to holdings that certain of the
advertising restrictions are unconstitutional.
Option 1: Specify in the statute which
burdens and restrictions must remain in force
(a) under the bargain, and/or (b) under the
stand alone legislation in order for liability
protections to remain in place.
Pros: Clearly sets forth the
conditions for retaining liability
protection.
Cons: Requires an extremely
difficult present day judgment as to
the future conditions under which
the offer of liability protection
should be withdrawn. Also, requires
that the statute define what counts
as "invalidation" of the specified
burdens and restrictions -- e.g.,
Would a successful as applied
challenge constitute "invalidation"
of a particular provision?
Option 2: Provide for presumptive withdrawal
of liability protection if specified burdens
and restrictions are invalidated (a) as to the
bargain, and/or (b) as to the stand alone
legislation, with the proviso that the
Secretary of HHS could prevent the withdrawal
of liability protection based on a
determination that the invalidation in
question would not significantly interfere
with the attainment of the Act's purposes,
taking into account whether regulations could
be promulgated in lieu of the invalidated
restriction. The Secretary's determination
shall not be subject to judicial review.
Pros: Provides flexibility to account for
the varying significance of judicial
holdings invalidating certain provisions
9
or portions thereof.
Cons: May place enormous
political/appropriations pressure on
the Secretary. HHS understandably
has this concern. (Consideration
could be given to substituting the
President for the Secretary of HHS
in order to minimize appropriations
pressure.)
Option 3: Provide for presumptive withdrawal
of liability protection if specified burdens
and restrictions are invalidated (a) as to
participating manufacturers, and/or (b) as to
non-participating manufacturers, unless a
court determined that the invalidation would
not substantially interfere with the
attainment of the Act's purposes.
Pros: Avoids present-day judgment as
to the future conditions under which
the offer of liability protections
should be withdrawn and political
pressures presented by Option 2.
Cons: Leaves the decision largely to
the courts unless the standard is
crafted in a manner that imposes
real constraints. In addition, this
approach could raise concerns about
impermissible delegations of policy
discretion to the courts. Again,
this concern could perhaps be
accommodated through crafting of a
sufficiently specific standard.
B. Settling the State Suits
We have always been concerned about inequities in bargaining
power permitting one side or another to hold up settlement of the
state suits. If states have all of the incentives to settle (to
get federal money), then tobacco manufacturers will find some way
to get a good deal. If the reverse is true (because tobacco
companies need the settlements to become participating
manufacturers), the states may impose arduous conditions. These
concerns may be alleviated by simply providing that states that
agree not to pursue certain claims against tobacco companies may
receive federal funds and that manufacturers must simply agree to
the terms of the protocol in order to get liability protections,
without regard to whether they have settled with the states. In
other words, a tobacco company could be a signatory to the protocol
and still be subject to suit by a state that was willing to forgo
10
the federal money.
Attorneys Fees
Attorneys fees remain a thorny problem. We continue to
question whether we need to do anything. Our analysis of the state
contracts suggests that very few of the attorneys have any argument
that they recover under their contracts in the event of federal
legislation; they may have quantum meruit and other claims. It
might be easier to leave well enough alone. Indeed, settlement of
the state lawsuits, including attorneys fees, was the centerpiece
of the June 20th settlement. It becomes difficult to see where the
fees issue fits in when federal laws become central.
One option is to require payment of the attorneys fees and
participation in an arbitration process as a separate condition of
being a participating manufacturer. It would not be linked to the
settlement of the law suits and thus would not allow the tobacco
companies to hold up the states for lower attorneys fee payments.
11
mcc_sum.wpd
Page 1
McCAIN TOBACCO BILL (S) 1415) - DRAFT
MAJOR PROVISIONS1
ISSUE
COMMERCE COMMITTEE MARK
MARKETING AND
Calls for National and State protocols by which industry agrees
ADVERTISING
to no outdoor advertising; no human images or cartoon
RESTRICTIONS
characters, black and white text only advertising (except in
adult periodicals and venues); no animal figures. No color ads
on the back face of adult magazines.
Limits advertising to FDA/FTC specified media. Restricts
glamorization of tobacco.
Any advertising that violates the statute or protocol is
considered "false and misleading."
Liability limits eliminated if tobacco companies challenge or
are no longer bound by advertising restrictions.
Places size, color, number, and placement restrictions on
point-of-sale advertising and displays. Provides for no
additional point-of-sale advertising for companies with higher
market share.
Preemption of further restrictions on advertising or package
labeling requirements remains in the Federal Cigarette Labeling
and Advertising Act (CLAA).
Requires health warnings on advertisements.
WARNINGS,
Requires new, explicit warning labels in bold type. Requires
LABELING AND
alternating black on white; white on black warning labels for
PACKAGING
packages. Requires health warnings.
Allows FDA to update warnings at any time based on science.
Requirements for package warnings other than those set by
FDA are preempted by the CLAA.
YOUTH ACCESS
Federal prohibition of sales to minors under 18; requires photo
RESTRICTIONS
ID if under age 27; requires face to face transactions; bans
vending machines and self-service sales except in adult-only
facilities, permits mail-order sales subject to FDA review.
Administered by FDA.
VENDING MACHINE
Bans the sale of tobacco products through the use of vending
OWNER
machines and authorizes a system to compensate the owners of
COMPENSATION
such machines.
No funding specified.
CESSATION AND
No funding specified.
PREVENTION
Authorizes a National Community Action Program; National
Cessation Research Program; National Tobacco Free Public
Education Program; National Smoking Cessation Program;
various studies; counter-advertising and creation of Tobacco
Use and Cessation Board.
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Page 2
UNDERAGE TOBACCO
Sets reduction targets of underage use based on the number of
USE TARGETS
years after enactment of the legislation.
Cigarettes
Smokeless
3 yrs. --
15%
12.5%
5 yrs --
30%
25%
7 yrs --
50%
35%
10 yrs --
60%
45%
No targets are set for underage use of other tobacco products,
such as cigars, little cigars, roll-your-own, or pipes.
LOOK-BACK
Industry-wide penalties only (no firm-specific).
PENALTIES
Requires HHS to annually determine through surveys
(beginning in 3rd year after enactment) the underage daily use
of cigarettes and smokeless tobacco during the preceding year.
Requires Industry to pay tiered monetary penalties (non-tax
deductible) for falling short of youth reduction targets.
1-5 percentage points short: $80 million per point.
6-10 percentage points short: $160 million per point.
11 and above percentage points short: $240 million per
point.
Yearly cap of 3.5 billion with no tax deductibility of penalty
payments.
Joint, several & strict liability for penalties. Provides legal
actions for companies against another for financial liability.
If any company misses its share of target by more than 20
points, company's liability cap is waived for 2 years or until
goal is met, whichever is later, with due process.
Liability cap is waived for criminal convictions of violations
under this act.
USE OF PENALTY
Transfers 90% of penalty receipts to grants for states/local
AMOUNTS
governments to further reduce youth smoking. Secretary may
retain up to 5% of penalty receipts for administration of the
look-back assessment. The final 5% of receipts is for a
compliance bonus to reward states and retailers who prevent
youths (less than 5%) from successfully purchasing tobacco
products.
Secretary may withhold 5% of any state's grant if state fails to
enforce compliance with youth access restrictions.
mcc_sum.wpd
Page 3
STATE
Compliance goals set (see above Use of Penalty Amounts) for
ENFORCEMENT OF
state and tribal governments. Funding from settlement for
YOUTH ACCESS LAWS
enforcement efforts.
Repeals the 1992 Synar Amendment, which was an earlier
effort to set targets for the percentage of youths who
successfully purchase tobacco products. Percentage of funding
withheld for non-compliance is greater in Synar (ranging from
20- 40%, although difference in absolute dollar values are not
known). This amendment is no longer needed because these
requirements replace it.
LICENSING OF
Requires state, tribal and federal licensing program to be
RETAILERS
funded from settlement. FDA would draft model state program
in consultation with state and local officials.
FDA REGULATION OF
Recognizes FDA has broad authority over tobacco including
TOBACCO PRODUCTS
advertising, youth access, and new products.
AND NICOTINE
FDA authority over tobacco is separate chapter of FD&C Act to
assure FDA authority over tobacco will not affect FDA
authority over other regulated products.
Provides for FDA authority over youth access. FDA approval of
new products.
Any ban on nicotine, retail sales, or category of tobacco
products would require Presidential notification to Congress
and include two-year waiting period for Congress to act. If
Congress does not act ban goes into effect.
No FDA authority over farmers (e.g., would be no control over
genetic manipulation of tobacco leaf).
FDA rules must take into account the impact of actions on
demand for unregulated contraband products.
CORPORATE
Calls for national and state protocols requiring an industry plan
CULTURE AND
to comply with all new laws on the manufacture and
COMPLIANCE,
distribution of tobacco. Protects industry whistle blowers.
LOBBYISTS AND
Requires lobbyists to comply with the act and agree not to
WHISTLE BLOWERS
support or oppose any federal or state legislation without
consent of manufacturers. Disbands the Tobacco Institute and
the Council for Tobacco Research. Industry plan would include
specific assessment mechanism and enforcement standards of
industry plan to be included in the protocols.
mcc_sum.wpd
Page 4
SMOKING
Restrict smoking in public facilities to enclosed areas.
RESTRICTIONS IN
Specifies that employees may not be required to enter smoking
PUBLIC FACILITIES
areas. Exempts restaurants (other than fast food), bars, private
(ETS)
clubs, hotel guest rooms, casinos, bingo parlors, tobacco
outlets, prisons, private residences and any building with any of
the above facilities/functions in them.
Allows states to opt out.
Authorizes incentive grant program for states.
INDUSTRY PAYMENTS
Establishes National Tobacco Settlement Trust Fund.
Calls for industry to pay $10 billion up-front.
Yearly payments required of industry:
1999 -- $14.4 billion
2000 -- $15.4 billion
2001 -- $17.7 billion
2002 -- $21 billion
2003 -- $23.6 billion
Each year thereafter, $23.6 billion in real dollars (though the
bill has a misprint and says the 2004 amount is $21.0 billion.)
Payments are volume adjusted -- increased if consumption
volume increases and decreased if volume decreases from 2004
levels.
Payments are tax deductible.
Nominal Net Receipts (FY99-03) -- $71.1 billion
Implied Per-Pack Equivalents (Real 1999 $):
1999 -- 65 cents per pack
2000 -- 70 cents per pack
2001 -- 80 cents per pack
2002 -- $1 per pack
2003 -- $1.10 per pack
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Page 5
SPENDING FROM
Most spending decisions are left to the floor of the Senate.
TRUST FUND
Committee mark specifies funding for:
5-Year Funding
FDA:
$2 billion
States:
$26 billion (OMB
estimate)
Farmers:
$11 billion
International:
$1 billion
Total Spending:
$39 billion
Receipts Less Spending:
$32 billion
Although it is not clearly indicated in the bill, we understand
that McCain intended to allow manufacturers to deduct 80% of
the $6.5 annual liability cap (see liability section below) from
their annual payments. This could reduce the net receipts by an
additional $26 billion over 5 years.
The bill also authorizes funding for NIH, CDC, and AHCPR
research using language from the Conrad bill, which included
$17 billion for these activities.
FUNDING PRIORITIES
In absence of specific funding recommendations, the bill
includes a "Sense of the Senate" amendment indicating that the
funds raised by this act should be used to support the following
priorities:
1. Tobacco use prevention and cessation.
2. Tobacco related health research.
3. Assist tobacco farmers and tobacco dependent communities.
4. Reimburse public health care financing programs for
tobacco related costs, including Medicare.
5. Settle with and reimburse states for tobacco related health
care costs and damages, including Medicaid.
6. Create a Tobacco Asbestos Trust Fund.
7. Provide funding for the Federal Black Lung Program.
8. Child Care
9. Clinical Trials at NIH.
10. Veterans.
CONSENT DECREES
Manufacturers and states enter into consent decrees that include
AND NATIONAL
many of the provisions of the Act, and include a waiver of
PROTOCOL
Constitutional claims.
Within 6 months of enactment requires each manufacturer to
enter into a legally binding and enforceable contract (The
National Tobacco Control Protocol) on both the federal and
state level. Federal protocol to be executed with U.S. Attorney
General in consultation with the Secretary of HHS. State
protocol to be executed with State Attorney General in
consultation with state Governor.
mcc_sum.wpd
Page 6
NON-PARTICIPATING
Denies non-participating manufacturers liability protection and
MANUFACTURERS
imposes user fees on them equal to the annual assessment paid
by participating manufacturers. In addition, non-participating
manufacturers must make annual payments into a reserve fund
to settle liability claims; the amount is equal to 150% of the
payment it would have paid under the bill if the manufacturer
had actually been a party to the Settlement.
ATTORNEYS' FEES
All attorney's fees and costs paid by industry outside the
payments made under this act.
Three member arbitration panel in which plaintiff
representative and defendant representatives pick a third
member.
CIVIL LIABILITY
Establishes a $6.5 billion cap on annual industry payments for
RESTRICTIONS
individual liability claims against participating manufacturers.
Permits suits by private plaintiffs (incl. class actions and
third-party suits), and claims by the federal government, but
preempts suits brought by states, local governments and Indian
tribes. Permits punitive damages for past conduct (within the
cap) and punitive damages for future conduct (outside the cap).
Prohibits addiction and dependence claims.
Creates a federal cause of action with concurrent jurisdiction in
state and federal courts for tobacco-related health injuries.
Requires courts to sever trials involving participating and
non-participating manufacturers. Creates rebuttable
presumptions that: 1) nicotine is addictive; and 2) certain
specified diseases are caused by use of tobacco products.
The bill does not appear to establish a fund of money from
which judgements and settlements are paid (although this may
have been intended). Instead, the bill requires the Secretary of
the Treasury to keep a record of payments made and judgments
and settlements. By rule, the Secretary is to establish a
mechanism for ensuring that payments are made to all entitled
in the year which the award was made or in a subsequent year.
The press release accompanying the bill suggests that the
drafters of the bill intended to include the 80% payment; the
bill, as drafted, however, does not clearly establish such a fund
and makes no reference to the 20%/80% model.
mcc_sum.wpd
Page 7
INDUSTRY
Creates National Tobacco Document Depository
DOCUMENT
Expands the availability of documents in a public depository for
DISCLOSURE
use by plaintiffs in actions against the industry and provides for
efficient use of these documents. Requires manufacturers to
deposit: 1) all deposition of corporate representatives; 2)
depositions of all expert and fact witnesses; 3) answers to
interrogatories in all cases; 4) court orders on substantive
issues; 5) all documents provided in recent specified lawsuits;
6) all health research documents; 7) document indexes
maintained by the industry. Allows manufacturers to determine
and withhold documents protected by attorney-client privilege.
Requires manufacturers to deposit a detailed, itemized log of
privileged documents. Establishes a three-judge federal
arbitration panel to settle disputes over making privileged
documents public.
AGRICULTURE AND
Specifies $11 billion over 5 years and $25 billion over 25 years.
RURAL COMMUNITY
Includes the LEAF Act sponsored by Senator Ford.
ASSISTANCE
Creates Tobacco Community Revitalization Trust Fund from
payments by industry
The fund pays for lost tobacco, quota, administrative costs of
the tobacco program, to tobacco community Economic
Development Grants, Farmer Opportunity Grant Program, and
the Tobacco Worker Transition Program.
Offers farmers opportunity to stop producing tobacco by selling
their quotas.
Provides tobacco farmers with educational and economic
assistance to find another means of living.
Provides general immunity for tobacco producers and
warehouse owners.
NATIVE AMERICANS
Provides that the requirements of this Act relating to the
manufacture, distribution, and sale of tobacco products apply
on tribal lands. Considers tribes as states for the purposes of
eligibility for public health funding. Requires Indian tribes to
collect any tobacco excise or sale taxes on non-members of the
tribes. The Indian tribe shall remit such taxes to the U.S.
Treasury, which shall, in turn remit the taxes to the State in
which they were collected.
NO STATE OR LOCAL
Allows state and local governments to impose any additional
PREEMPTION
tobacco product control measures that are not inconsistent with
the provisions of this Act. However, preemption is imposed in
various sections of the Act for certain issues (e.g., packaging
and labeling; advertising restrictions; product standards).
mcc_sum.wpd
Page 8
INTERNATIONAL
Creates non-profit corporation and provides funds for
TOBACCO CONTROL
international tobacco control programs. Prohibits use of federal
funds by federal officials to promote U.S. tobacco exports or to
seek to remove nondiscriminatory restrictions on tobacco
products by foreign countries. Prohibits U.S. employees of
tobacco companies from marketing to children overseas.
Requires tobacco product exports to carry the same warning
labels required on products sold in the U.S.
ANTI-TRUST
Antitrust laws of the U.S. do not apply to the joint discussion,
EXEMPTION
consideration, review, action, agreement, or understanding by
or among any participating manufacturers, for the purposes of,
and limit to --
(1) entering into and complying with the Protocol, Trust
Agreement, or Consent Decree;
(2) refusing to deal with a distributor, retailer, or other seller of
tobacco products who distributes such products for sale to, or
offers for sale or sells such products to, underage persons, or
who otherwise fails to comply with the applicable requirements
for the Act, the Protocol, or Consent Decree; or
(3) submitting an application relating to a plan or program
submitted to the U.S. Attorney General for approval that is
designed to reduce the use of tobacco products by underage
individuals.
MANDATED PASS
Requires industry to pass through 100% of payments to
THROUGH PAYMENTS
cigarette prices and to adopt industry plan to comply with law
and protocol.
VETERANS
Includes an Amendment sponsored by Sen. Rockefeller
that authorizes the Veteran's Administration to sue
liable third parties for reimbursement of paying
monthly disability compensation for tobacco-related
diseases.
FOODWK04.238
Page 1
Administration Announced New Rules To Improve Safety of Juice. On Sunday, we leaked
the announcement of two proposed regulations by the Food and Drug Administration (FDA) to
improve the safety of fruit and vegetable juices. The first regulation would require that all fruit
and vegetable juice processors implement a Hazard Analysis and Critical Control Point
(HACCP) system which will ensure that processors take extra steps to reduce the numbers of
microorganisms that may be in their products. Retailers of packaged juice, as well as processors
who sell less than 40,000 gallons of fresh juice per year, would be exempt from this requirement.
The second proposed rule would require any packaged untreated juice to be labeled with a
warning statement advising consumers of the potential risks of juice that has not been processed
to eliminate dangerous bacteria. This requirement will apply to retail and other processors who
package untreated juice for consumption off-site --such as grocery stores that squeeze and bottle
juice for home use. But retail sellers of juice for consumption on-site --such as restaurants and
children's lemonade stands --will be exempt from this labeling requirement. Although 98
percent of juice sold in the United States is pasteurized, the FDA estimates that there are up to
48,000 juice-related illnesses per year. In 1996, one sixteen-month-old girl died, and at least 66
others were sickened in the western United States and Canada from drinking untreated Odwalla
brand apple juice. The Administration received three days of positive press on this
announcement, including coverage on ABC News, CNN, every major newspaper, and a lead
story on CBS News on Tuesday.
U.S. SENATE COMMITTEE ON
Commerce, Science, and Transportation
JOHN McCAIN, Chairman
Mclain Queshins
www.senate.gov/-commerce
Tobacco-
CC: EK
FAX
Tom
JRM
+return
TO:
Bruce Road
OFFICE:
FAX NO:
456-2878
DATE:
2/2/98
TIME: 1:23 pm
PAGE 1 OF:
11
FROM:
John Raidt
(202) 224- 1251
SUBJECT:
69294
2/4/44
112
JOHN McCAIN, ARIZONA, CHAIRMAN
Two STEVENS, ALASKA
E
5 HOLLINGS, SOUTH CAROLINA
BURNS, MONTANA
A
K INCLIYE. HAWAII
-
ADM SURTON, WASHINGTON
M
+ H. FORD. KENTURY
LOTT, MISSISSIPPI
JOHN D. ROCKEFELLER IV,
VIRGINIA
WAT MAILEY HUTCH(SON, TEXAS
JOHN F. KERRY, MASSADHUSETT
OLYMPIA 1. SNOWE, MAINE
JOHN a, BREAUX, LOUISIANA
JOHN ASHDROFT, MISSOURI
RICHARD H. BRYAN, NEVADA
United States Senate
BILL FRIST, TENNESSEE
BYRON L DORGAN, NORTH DAKOTA
SPENCER AIRAHAM, MICHKIAN
NON WYDEN, OREGON
BROWNBACK. KANGAE
COMMITTEE ON COMMERCE, SCIENCE,
JOHN RAIDY, STAFF DIRECTOR
AND TRANSPORTATION
IVAN'A. SCHLAGER, DEMOCRATIC CHIEF COUNSEL AND STAFF DIRECTOR
WASHINGTON, DC 20510-8125
February 2, 1998
The Honorable William Clinton
The White House
Washington, DC 20500
Dear Mr. President:
As you know, Congress intends to consider comprehensive
tobacco legislation during the upcoming legislative session.
The issues raised by the global tobacco settlement and
involved in the crafting of legislation to implement responsible
national tobacco policy, are extremely diverse and intensely
complex.
As I stated in my letter to you of six weeks ago, it's
imperative that Congress and the administration work together in
a cooperative and bi-partisan fashion if we are to craft a bill
that will gain public support, Congressional approval and your
signature.
In that regard, it will be particularly important for the
Administration to exercise its executive responsibilities by
providing Congress with detailed assessment of the provisions of
pending tobacco legislation, and your specific policy and
legislative. recommendations.
The Senate Commerce Committee which I chair, and which has
jurisdiction over key components of tobacco legislation, will
hold hearings on the issue early this year. To assist with these
deliberations I would like to request the administration's
answers to the attached tobacco related questions.
These are the first in a series of questions to which we
must have answers if we are to properly assess global tobacco
settlement legislation, and move forward with the most effective
and appropriate bill.
With the advice and expertise of the executive branch, we
can ensure that federal tobacco legislation is based on a firm
understanding of the facts, grounded in a solid understanding of
the true consequences of our actions, and formulated by
consensus. Most importantly, these disciplines will enhance our
ability to achieve our most important goal of dramatically
reducing youth smoking.
Thank you for your assistance in providing the Committee and
Congress with the information requested. With regards,
Sincerely,
for Chairman McCain McCa
JM/jr
QUESTIONS REGARDING GLOBAL TOBACCO SETTLEMENT LEGISLATION
THE FOLLOWING IS THE FIRST SET IN A SERIES OF QUESTIONS
PERTAINING TO S. 1415, LEGISLATION IMPLEMENTING THE GLOBAL
TOBACCO SETTLEMENT PROPOSAL AGREED TO BY THE ATTORNEYS GENERAL OF
THE VARIOUS STATES AND THE TOBACCO INDUSTRY.
QUESTIONS RELATED TO SPECIFIC LEGISLATIVE LANGUAGE SHOULD USE S.
1415 AS THE REFERENCE. ADDITIONAL QUESTIONS WILL FOLLOW.
I. BAN ON OUTDOOR ADVERTISING, INCLUDING IN STADIA AND ARENAS
The agreement (bill page 15) bans outdoor tobacco product
advertising, and tobacco advertising in stadia and arena.
1. What data does the administration have to substantiate
that a ban on outdoor advertising, including stadia and arenas
will reduce smoking and, in particular, youth smoking?
2. To what extent do you believe such restrictions be
expected to reduce smoking?
3. Does the administration support such a ban. If so,
why? If not, why not?
4. What specific changes, if any, in the legislative
language implementing the ban would the administration propose?
Please provide specifics.
II. BAN ON HUMAN FIGURES AND CARTOON FIGURES IN ADVERTISING
The agreement (bill page 15) bans the use of human figures
and cartoons in tobacco advertising.
1. What data does the administration have to substantiate
that barring the use of human figures and cartoon advertising
will reduce smoking, in particular, youth smoking?
2. To what extent do you believe such restrictions can be
counted on to reduce smoking?
3. What entity would you propose to determine what
constitutes a human image or cartoon character?
4. What penalty do you believe is appropriate and should
accrue for a violation of the prohibition on material containing
figures deemed to be human or cartoon?
5. Does the administration support this ban. If so, why?
If not why not?
6. What specific changes, if any, in the legislative
language implementing the ban would the administration propose?
Please provide specifics.
III. BAN ON INTERNET ADVERTISING
The agreement (bill page 16) bans tobacco advertising on the
internet.
1. Does the administration support such a ban? If so,
why? If not, why not?
2. How can and should a ban on internet advertising of
cigarettes be enforced?
3. What, if any, concerns does the administration have
regarding Constitutional free speech issues raised by any such
ban?
4. What specific changes, if any, in the legislative
language implementing the ban would the administration propose?
IV. BAN ON POINT-OF-SALE ADVERTISING
The agreement (bill page 16) bans point-of-sale tobacco
except for advertisements which comply with that certain
restrictions.
1. What data does the administration have to substantiate
that a ban on point-of-sale advertising would reduce smoking, in
particular, youth smoking?
2. Does the administration support such a ban? If 80,
why? If not, why not?
3. Is the exemption of point-of-sale advertisement for
adult stores and tobacco outlets appropriate?
4. Is it appropriate to grant companies with greater
cigarette market share additional point-of-sale advertising
rights? If so, why? If not, why not?
5. Does such a privilege constitute a statutorily granted
competitive advantage? Please discuss.
6. Does the administration support this grant? If so,
why? If not, why not?
7. What specific changes, if any, in the legislative
language implement the ban would the administration propose?
Please provide specifics.
V. LIMITATIONS ON POINT-OF-SALE ADVERTISING
The agreement (bill page 17) specifies the size and design
of permissible point-of-sale advertising.
1.
What data does the administration possess to suggest
that such limitations will reduce smoking, particularly among
youth?
2.
Does the administration support this provision?
If so, why? If not, why not?
3.
If so, what is the justification for statutorily
determining a particular size limitation and for the particular
size and restrictions proposed?
4. What specific changes in legislative language, if any,
does the administration propose? Please provide specifics.
VI. BAN ON ADVERTISING RESTRICTION AGREEMENTS
The agreement (bill page 17) includes a prohibition on
arrangements to limit the ability of a retailer to display
permissible point-of-sale advertisement or promotional material
originating with another manufacturer or distributor.
1. Are such agreements currently against federal or state
law? If so, is such a provision necessary?
2. Does the administration support such a provision? If
so, why? If not, why not?
3. Does the administration support the limitation. If BO,
why? If not, why not?
4.
What specific changes, if any, in the legislative
language implement the ban would the administration propose?
Please provide specifics.
VII. GLAMORIZATION OF TOBACCO
The agreement, (bill page 20) prohibits payments to
glamórize or promote the image or use of tobacco through pint,
films or live performance that appeals to individuals under 18
years of age.
1. What data does the administration possess to indicate
whether and to what extent this provision will reduce smoking,
particularly among youth?
determine 2. what activity constitutes promoting the image or use of
What entity does the administration propose will
a tobacco produce?
3.
How does the administration envision such a ban will be
enforced?
4.
Does the administration support such limitations?
5.
What specific changes, if any, in the legislative
language would the administration propose? Please provide
specifics.
VIII. RESTRICTION ON COLOR ADVERTISEMENTS
The agreement (bill page 21) prohibits the use of color
advertising except in adult publications.
1. What data does the administration have to substantiate
that a ban on color ads, except in publications with limited
youth readership, will reduce smoking, particularly youth
smoking?
2. Does the administration believe that the threshold for
the restriction of two million readers is the appropriate
threshold?
3.
How does the administration envision readership
demographics being determined?
4.
How would this restriction be enforced?
5. Does the administration support this restriction? If
so, why? If not, why not?
6. What specific changes, if any, in the legislative
language implementing the restriction does the administration
propose? Please provide specifics.
IX. GENERAL QUESTION REGARDING MARKETING/ADVERTISING BAN
1. Can the marketing and advertising restrictions
envisioned in the settlement be constitutionally imposed, with or
without the industry's consent? Please discuss.
X. WARNING LABELS
The agreement, (bill page 26- 28), authorizes a variety of
new warning labels for tobacco products.
1.
Does the administration believe that these are
appropriate warning labels?
2. Does the administration possess data suggesting that
these warning will effectively reduce smoking, particularly youth
smoking?
3.
What data suggests that the various new warnings will
be as or more effective than the current warning requirements?
4. Does the administration support the provisions
authorizing specific new labels? If SO, why? If not, why not?
5. What specific changes, if any, in the legislative
language implementing this provision would the administration
propose? Please provide specifics.
IX. WARNING LABEL SIZE AND LOCATION REQUIREMENTS
The agreement (bill page 28-29) specifies, the size,
placement and print type of the various tobacco warning labels.
1. What data does the administration have to suggest that
these specifications will reduce smoking, particularly youth
smoking?
2. Does the administration support these particular
specifications? If 50, why? If not why not?
3. Does the administration support the exception (page 29)
provided for flip-top cigarette packages? If so, why? If not,
why not?
4. What specific changes, if aby, in the legislative
language to implement these restrictions would the administration
propose? Please provide specifics.
X. SMOKELESS TOBACCO ALTERNATIVE LABELS
The agreement (bill page 34) provides for various new
warning label options for smokeless tobacco
1. What data does the administration have to suggest that
the various new warning labels will effectively reduce the use of
smokeless tobacco, particularly among youth?
2. Does the administration support the use of these
alternative labels?
3. What changes, if any, to the legislative language
implementing this provision would the administration propose?
Please provide specifics.
XI. ENFORCEMENT OF ADVERTISING, MARKETING AND LABELING
RESTRICTIONS
The agreement (bill page 36-37) provides for the enforcement
of advertising, marketing and labeling restrictions.
1. Does the administration support the enforcement
provisions regarding advertising, marketing and labeling? If SO
why? If not, why not?
2. What changes in legislative language, if any, does the
administration recommend regarding this provision? Please
provide specific language.
XII. PREEMPTION OF STATE AND LOCAL ACTION
The agreement (bill page 38) prohibits state and local
requirements related to the packaging or advertising of
cigarettes or smokeless tobacco.
1. Does the administration support such preemption? If BO,
why? If not, why not?
2. What changes in legislative language, if any, does the
administration recommend regarding this provision? Please
provide specific language.
XIII. EXEMPTION OF EXPORTS
The agreement (bill page 40) exempts exports from the
packaging, labeling and advertising requirements.
1. Does the administration support this exemption? If so,
why? If not, why not?
2. What ramifications does this provision have in the area
of foreign relations?
3. What changes in legislative language, if any, does the
administration recommend regarding this provision? Please
provide specifics.
XIV. RESTRICTION ON ACCESS TO TOBACCO PRODUCTS
The agreement (bill page 40-41), prohibits the sale of
tobacco products to individuals under 18 years of age, requires
that retailers verify the age of individuals purchasing tobacco;
and exempts individuals 27 years of age or older from the photo
identification requirement.
1. Does the administration support these provisions? If
so, why? If not, why not?
2. How does the administration envision that this
provision will be enforced and can it be enforced effectively?
3. What changes in legislative language, if any, does the
administration recommend regarding this provision? Please
provide specifics.
XV. PROHIBITION ON SALE OF LESS THAN A FULL PACK OF CIGARETTES
The agreement (bill page 41) prohibits the sale of less than
a full pack of cigarettes.
1. Does the administration support this prohibition? If
80, why? If not, why not?
2. What changes in legislative language, if any, does the
administration recommend regarding this provision? Please
provide specifics.
XVI. STATE LICENSURE TO SELL TOBACCO
The agreement, (bill page 44) requires states to license
sellers of tobacco products.
1. What data, if any, does the administration have to
indicate that licensure will effectively reduce access to tobacco
by minors?
2. What entity does the administration envision would
enforce the licensure requirement if a state should be unable or
unwilling to implement the licensure program?
3. Has the administration developed or formulated the cost
of a licensure program?
4. Does the administration support the licensure program?
If so, why? If not, why not?
5. What changes in legislative language, if any, does the
administration recommend regarding this provision? Please
provide specifics.
XVII. ANTI-TRUST EXEMPTION
The agreement, (bill page 94), provides anti-trust exemption
for the tobacco industry.
1. Does the administration support such an exemption? If
so, why? If not, why not?
2. Could such an exemption be used to set prices beyond
those necessary to deter youth smoking, but to increase profits
for the industry?
3. What changes in legislative language, if any, does the
administration recommend regarding this provision? Please
provide specifics.
XVIII. APPLICABILITY TO NEW ENTRANTS IN TOBACCO INDUSTRY
1.
Under the agreement, and the implementing legislation,
what is the assurance that new entrants into the tobacco industry
will comply with the statute and any related consent agreements
not to challenge the legality of the agreement implementation
legislation.
###
U.S. SENATE COMMITTEE ON
Commerce, Science, and Transportation
JOHN McCAIN, Chairman
bacco-
Mclain Queshins
hw
www.senate.gov/~commerce
CC: EK
FAX
Tom
JRM
trefum
TO:
Bruce Road
OFFICE:
FAX NO:
456-2878
DATE:
2/2/98
TIME: 1:23 pm
PAGE 1 OF:
11
FROM:
John Raidt
(202) 224- 1251
SUBJECT:
JOHN McCAIN, ARIZONA, CHAIRMAN
TED STEVENS, ALASKA
ERNEST 5 HOLLINGS, SOUTH
INA
JURNS, MONTANA
DANIEL K INDUYE, HAWAII
BLADE GURTON, WASHINGTON
WENNELL H. FORD. KENTUCKY
TRENTLOTT, MISSINSIPPI
p. MOCKEFELLER IV, WEST
HUTCH(5ON, TEXAS
JUMN F. KERRY, MASSADHUSETTS
ENOWE, MAINE
JOHN 2, BREAUX, LOUISIANA
JOHNLASHDROFT, MISSOURI
RICHARD H. BRYAN, NEVADA
United States Senate
BILL
TENNESSEE
BYRON L DORGAN, NORTH DAKOTA
SPEND
ABRAHAM, MICHKIAN
NON WYDEN, OREGON
BROWNBACK, KANGAS
COMMITTEE ON COMMERCE, SCIENCE,
JOHN RAIDT, STAFF DIRECTOR
AND TRANSPORTATION
IVAN'A, SCHLAGER, DEMOCRATIC CHIEF COUNSEL AND STAFF DIRECTOR
WASHINGTON, DC 20510-8125
February 2, 1998
The Honorable William Clinton
The White House
Washington, DC 20500
Dear Mr. President:
As you know, Congress intends to consider comprehensive
tobacco legislation during the upcoming legislative session.
The issues raised by the global tobacco settlement and
involved in the crafting of legislation to implement responsible
national tobacco policy, are extremely diverse and intensely
complex.
As I stated in my letter to you of six weeks ago, it's
imperative that Congress and the administration work together in
a cooperative and bi-partisan fashion if we are to craft a bill
that will gain public support, Congressional approval and your
signature.
In that regard, it will be particularly important for the
Administration to exercise its executive responsibilities by
providing Congress with detailed assessment of the provisions of
pending tobacco legislation, and your specific policy and
legislative. recommendations.
The Senate Commerce Committee which I chair, and which has
jurisdiction over key components of tobacco legislation, will
hold hearings on the issue early this year. To assist with these
deliberations I would like to request the administration's
answers to the attached tobacco related questions.
These are the first in a series of questions to which we
must have answers if we are to properly assess global tobacco
settlement legislation, and move forward with the most effective
and appropriate bill.
With the advice and expertise of the executive branch, we
can ensure that federal tobacco legislation is based on a firm
understanding of the facts, grounded in a solid understanding of
the true consequences of our actions, and formulated by
consensus. Most importantly, these disciplines will enhance our
ability to achieve our most important goal of dramatically
reducing youth smoking.
Thank you for your assistance in providing the Committee and
Congress with the information requested. With regards,
Sincerely,
John McCain McCa
JM/jr
QUESTIONS REGARDING GLOBAL TOBACCO SETTLEMENT LEGISLATION
THE FOLLOWING IS THE FIRST SET IN A SERIES OF QUESTIONS
PERTAINING TO S. 1415, LEGISLATION IMPLEMENTING THE GLOBAL
TOBACCO SETTLEMENT PROPOSAL AGREED TO BY THE ATTORNEYS GENERAL OF
THE VARIOUS STATES AND THE TOBACCO INDUSTRY.
QUESTIONS RELATED TO SPECIFIC LEGISLATIVE LANGUAGE SHOULD USE S.
1415 AS THE REFERENCE. ADDITIONAL QUESTIONS WILL FOLLOW.
I. BAN ON OUTDOOR ADVERTISING, INCLUDING IN STADIA AND ARENAS
The agreement (bill page 15) bans outdoor tobacco product
advertising, and tobacco advertising in stadia and arena.
1. What data does the administration have to substantiate
that a ban on outdoor advertising, including stadia and arenas
will reduce smoking and, in particular, youth smoking?
2. To what extent do you believe such restrictions be
expected to reduce smoking?
3. Does the administration support such a ban. If so,
why? If not, why not?
4. What specific changes, if any, in the legislative
language implementing the ban would the administration propose?
Please provide specifics.
II. BAN ON HUMAN FIGURES AND CARTOON FIGURES IN ADVERTISING
The agreement (bill page 15) bans the use of human figures
and cartoons in tobacco advertising.
1. What data does the administration have to substantiate
that barring the use of human figures and cartoon advertising
will reduce smoking, in particular, youth smoking?
2. To what extent do you believe such restrictions can be
counted on to reduce smoking?
3. What entity would you propose to determine what
constitutes a human image or cartoon character?
4. What penalty do you believe is appropriate and should
accrue for a violation of the prohibition on material containing
figures deemed to be human or cartoon?
5. Does the administration support this ban. If so, why?
If not why not?
6. What specific changes, if any, in the legislative
language implementing the ban would the administration propose?
Please provide specifics.
III. BAN ON INTERNET ADVERTISING
The agreement (bill page 16) bans tobacco advertising on the
internet.
1. Does the administration support such a ban? If so,
why? If not, why not?
2. How can and should a ban on internet advertising of
cigarettes be enforced?
3. What, if any, concerns does the administration have
regarding Constitutional free speech issues raised by any such
ban?
4. What specific changes, if any, in the legislative
language implementing the ban would the administration propose?
IV. BAN ON POINT-OF-SALE ADVERTISING
The agreement (bill page 16) bans point-of-sale tobacco
except for advertisements which comply with that certain
restrictions.
1. What data does the administration have to substantiate
that a ban on point-of-sale advertising would reduce smoking, in
particular, youth smoking?
2. Does the administration support such a ban? If BO,
why? If not, why not?
3. Is the exemption of point-of-sale advertisement for
adult stores and tobacco outlets appropriate?
4. Is it appropriate to grant companies with greater
cigarette market share additional point-of-sale advertising
rights? If so, why? If not, why not?
5. Does such a privilege constitute a statutorily granted
competitive advantage? Please discuss.
6. Does the administration support this grant? If SO,
why? If not, why not?
7. What specific changes, if any, in the legislative
language implement the ban would the administration propose?
Please provide specifics.
V. LIMITATIONS ON POINT-OF-SALE ADVERTISING
The agreement (bill page 17) specifies the size and design
of permissible point-of-sale advertising.
1.
What data does the administration possess to suggest
that such limitations will reduce smoking, particularly among
youth?
2.
Does the administration support this provision?
If so, why? If not, why not?
3.
If so, what is the justification for statutorily
determining a particular size limitation and for the particular
size and restrictions proposed?
4. What specific changes in legislative language, if any,
does the administration propose? Please provide specifics.
VI. BAN ON ADVERTISING RESTRICTION AGREEMENTS
The agreement (bill page 17) includes a prohibition on
arrangements to limit the ability of a retailer to display
permissible point-of-sale advertisement or promotional material
originating with another manufacturer or distributor.
1. Are such agreements currently against federal or state
law? If so, is such a provision necessary?
2. Does the administration support such a provision? If
so, why? If not, why not?
3. Does the administration support the limitation. If so,
why? If not, why not?
4. What specific changes, if any, in the legislative
language implement the ban would the administration propose?
Please provide specifics.
VII. GLAMORIZATION OF TOBACCO
The agreement, (bill page 20) prohibits payments to
glamorize or promote the image or use of tobacco through pint,
films or live performance that appeals to individuals under 18
years of age.
1. What data does the administration possess to indicate
whether and to what extent this provision will reduce smoking,
particularly among youth?
What entity does the administration propose will
determine 2. what activity constitutes promoting the image or use of
a tobacco produce?
3.
How does the administration envision such a ban will be
enforced?
4.
Does the administration support such limitations?
5.
What specific changes, if any, in the legislative
language would the administration propose? Please provide
specifics.
VIII. RESTRICTION ON COLOR ADVERTISEMENTS
The agreement (bill page 21) prohibits the use of color
advertising except in adult publications.
1.
What data does the administration have to substantiate
that a ban on color ads, except in publications with limited
youth readership, will reduce smoking, particularly youth
smoking?
2.
Does the administration believe that the threshold for
the restriction of two million readers is the appropriate
threshold?
3.
How does the administration envision readership
demographics being determined?
4.
How would this restriction be enforced?
5. Does the administration support this restriction? If
so, why? If not, why not?
6. What specific changes, if any, in the legislative
language implementing the restriction does the administration
propose? Please provide specifics.
IX. GENERAL QUESTION REGARDING MARKETING/ADVERTISING BAN
1.
Can the marketing and advertising restrictions
envisioned in the settlement be constitutionally imposed, with or
without the industry's consent? Please discuss.
X. WARNING LABELS
The agreement, (bill page 26- 28), authorizes a variety of
new warning labels for tobacco products.
1.
Does the administration believe that these are
appropriate warning labels?
2.
Does the administration possess data suggesting that
these warning will effectively reduce smoking, particularly youth
smoking?
3.
What data suggests that the various new warnings will
be as or more effective than the current warning requirements?
4. Does the administration support the provisions
authorizing specific new labels? If SO, why? If not, why not?
5. What specific changes, if any, in the legislative
language implementing this provision would the administration
propose? Please provide specifics.
IX. WARNING LABEL SIZE AND LOCATION REQUIREMENTS
The agreement (bill page 28-29) specifies, the size,
placement and print type of the various tobacco warning labels.
1. What data does the administration have to suggest that
these specifications will reduce smoking, particularly youth
smoking?
2. Does the administration support these particular
specifications? If so, why? If not why not?
3. Does the administration support the exception (page 29)
provided for flip-top cigarette packages? If so, why? If not,
why not?
4. What specific changes, if aby, in the legislative
language to implement these restrictions would the administration
propose? Please provide specifics.
X. SMOKELESS TOBACCO ALTERNATIVE LABELS
The agreement (bill page 34) provides for various new
warning label options for smokeless tobacco
1. What data does the administration have to suggest that
the various new warning labels will effectively reduce the use of
smokeless tobacco, particularly among youth?
2. Does the administration support the use of these
alternative labels?
3. What changes, if any, to the legislative language
implementing this provision would the administration propose?
Please provide specifics.
XI. ENFORCEMENT OF ADVERTISING, MARKETING AND LABELING
RESTRICTIONS
The agreement (bill page 36-37) provides for the enforcement
of advertising, marketing and labeling restrictions.
1.
Does the administration support the enforcement
provisions regarding advertising, marketing and labeling? If so
why? If not, why not?
2. What changes in legislative language, if any, does the
administration recommend regarding this provision? Please
provide specific language.
XII. PREEMPTION OF STATE AND LOCAL ACTION
The agreement (bill page 38) prohibits state and local
requirements related to the packaging or advertising of
cigarettes or smokeless tobacco.
1. Does the administration support such preemption? If so,
why? If not, why not?
2. What changes in legislative language, if any, does the
administration recommend regarding this provision? Please
provide specific language.
XIII. EXEMPTION OF EXPORTS
The agreement (bill page 40) exempts exports from the
packaging, labeling and advertising requirements.
1. Does the administration support this exemption? If so,
why? If not, why not?
2. What ramifications does this provision have in the area
of foreign relations?
3. What changes in legislative language, if any, does the
administration recommend regarding this provision? Please
provide specifics.
XIV. RESTRICTION ON ACCESS TO TOBACCO PRODUCTS
The agreement (bill page 40-41), prohibits the sale of
tobacco products to individuals under 18 years of age; requires
that retailers verify the age of individuals purchasing tobacco;
and exempts individuals 27 years of age or older from the photo
identification requirement.
1. Does the administration support these provisions? If
so, why? If not, why not?
2.
How does the administration envision that this
provision will be enforced and can it be enforced effectively?
3.
What changes in legislative language, if any, does the
administration recommend regarding this provision? Please
provide specifics.
XV. PROHIBITION ON SALE OF LESS THAN A FULL PACK OF CIGARETTES
The agreement (bill page 41) prohibits the sale of less than
a full pack of cigarettes.
1. Does the administration support this prohibition? If
so, why? If not, why not?
2. What changes in legislative language, if any, does the
administration recommend regarding this provision? Please
provide specifics.
XVI. STATE LICENSURE TO SELL TOBACCO
The agreement, (bill page 44) requires states to license
sellers of tobacco products.
1. What data, if any, does the administration have to
indicate that licensure will effectively reduce access to tobacco
by minors?
2. What entity does the administration envision would
enforce the licensure requirement if a state should be unable or
unwilling to implement the licensure program?
3. Has the administration developed or formulated the cost
of a licensure program?
4. Does the administration support the licensure program?
If so, why? If not, why not?
5. What changes in legislative language, if any, does the
administration recommend regarding this provision? Please
provide specifics.
XVII. ANTI-TRUST EXEMPTION
The agreement, (bill page 94), provides anti-trust exemption
for the tobacco industry.
1. Does the administration support such an exemption? If
so, why? If not, why not?
2. Could such an exemption be used to set prices beyond
those necessary to deter youth smoking, but to increase profits
for the industry?
3. What changes in legislative language, if any, does the
administration recommend regarding this provision? Please
provide specifics.
XVIII. APPLICABILITY TO NEW ENTRANTS IN TOBACCO INDUSTRY
1. Under the agreement, and the implementing legislation,
what is the assurance that new entrants into the tobacco industry
will comply with the statute and any related consent agreements
not to challenge the legality of the agreement implementation
legislation.
###
Draft Agenda for 2/5/98
I. Developments
* Conrad bill
*
Today's news/cmtee hrngs
10
* Budget (hand out)
Farmers-- USDA progress report, >vs Glickman to KY OPL
*
*
McCain letter (TF)
II. Upcoming
* VP events
& 2/20 Phoenix form
*
Radio address on Doggett
*
Other
Lisconcing Triden
Visih-
Doumnts - Monby
dayer of had's health
- Chafee / Martin
- Mutch hings
Civil linhility of 1st amendment
Koop
Compation legish
JL. P.11mmi) - -neces-by of prize
SENT BY:
1-7-98
;
14:24
;
SCI & TECH POLICY-
65542; 2/ 4
JOHN McCAIN. ARIZONA. CHAIRMAN
TED STEVENS, ALABKA
CANDUT P. HOLLINGS, CAROLINA
COMBAD DURNS. MONTANA
DANIEL X INQUYE HAWAII
SLADE GORTON. WASHINGTON
WENDELL M. FORD, KENTUCKY
TRENT LOTT, MISSISSIPPI
JOHN a ROCKMELLER N. WEST VIRGINIA
KAY SAILEY HUTCHISON, TFXAS
JOHN P. KENRY. NASSACHUSETTS
OLYMPIA J. SNOWE, MAINE
JOHN a BREAUX, LOUISIANA
JOHN ASHCROFT. MISSOURI
RICHARD N. BRYAN. NEVADA
United States Senate
Tom/JRM-
BILL FAIST. TENNESSEE
OYRON In DORGAN. NORTH DAKOTA
SPENCEN ABRAHAM MICHIGAN
RON WYDEN GRIGON
NAM BROWNBACK, RANGAS
COMMITTEE ON COMMERCE. SCIENCE,
JOHN RAIDY, are DIRECTOR
AND TRANSPORTATION
what
IVAN A. SCHLAGER, DEMOCRATIC CHICF COUNSEL AND STAFF DIRECTOR
WASHINGTON, DC 20510-6129
response?
December 15, 1997
BR
ww
The Honorable William Clinton
The White House
Washington, DC 20500
Dear Mr. President:
Shortly before adjournment of the congressional session last
November. Senator Hollings and I, among others, introduced
legislation, S. 1414 and S. 1415, which would implement the
proposed global tobacco settlement reached between the State
Attorneys General and the tobacco industry.
The legislation will serve as a vehicle for analysis, debate
and action on how to best achieve federal. tobacco policy goals.
The Senate committees which have jurisdiction over tobacco policy
issues will be holding extensive hearings on the legislation and
relevant matters in the coming session.
The Senate Committee on Commerce; Science and Transportation
has a large portion of the jurisdiction on issues touched by the
settlement. AB Chairman of the panel I intend to hold a series
of hearings in February and March on the tobacco settlement
issues within the Committee's jurisdiction, and we envision the
Administration playing a key role in those hearings.
We're confident that you will agree, consensus is critical
if we are to enact a bill that will win public support and best
serve the interests of the nation.
In order to build such consensus, and to properly develop
the best possible legislation, we believe it's essential that the
Administration be prepared to testify with detail and specificity
on the terms of the pending tobacco bill, and to make specific
proposals regarding whether and how bill language should be
modified to most appropriately and effectively achieve federal
tobacco policy goals.
I would like to ensure that the appropriate administration
representative is prepared to testify at those hearings and to
provide the Committee with the Administration's analysis,
specific policy positions and legislative proposals. We
respectfully request your assistance and leadership in ensuring
that the Administration takes what actions are necessary to fully
prepare for that effort.
SENT BY:
1- 7-98 ; 14:25 ; SCI & TECH POLICY-
65542;# 3/ 4
Thank you for your consideration and assistance. I'm
confident that, working together, Congress and the Administration
can produce a bill that will help us meet federal tobacco policy
goals--the most vital of which is to reduce, dramatically, the
number of children and youth who smoke.
John McCain Mc Can
JM/jr
SENT BY:
1-7-98 ;
14:25
;
SCI & TECH POLICY-
65542; # 4/ 4
U.S. SENATOR
ARIZONA
DEC 16AM11:10
JOHN McCAIN
www.senate.gov/-mccain
PRESS RELEASE
FOR IMMEDIATE RELEASE
CONTACT: PLA PIALORSI 202-224-2670
MONDAY, DECEMBER 15, 1997
NANCY IVES 202-224-7130
McCAIN CALLS FOR "SPECIFICS" FROM
WHITE HOUSE AT TOBACCO HEARINGS
WASHINGTON, D.C. - Senator John McCain (R-AZ), Chairman of the Committee
on Commerce, Science, and Transportation, today requested that the Administration participate
in a series of tobacco hearings to be held early next year to provide detailed analysis and
specifics of the tobacco settlement. McCain believes that the Administration's input is
critical to build congressional consensus and public support on the issue, in addition to
effectively achieving federal tobacco policy goals.
"I want to ensure that an Administration representative is prepared to testify at our
hearings, and provide the Committee with the Administration's analysis, specific policy
position and legislative proposals," McCain said in a letter to President Clinton today.
"There's little to be gained from another recitation of-the problem or reiteration of
general goals by the Administration," McCain said. "What Congress and the public need are
specific comments and recommendations on the terms of the global tobacco settlement and to
what extent they should be amended to best meet our public health objectives."
In November, Senators McCain, Ernest Hollings (D-SC), Slade Gorton (R-WA), and
John Breaux (D-LA) introduced legislation, S.1414 and S.1415, which would implement the
proposed global tobacco settlement reached between the State Attorneys General and the
tobacco industry.
"I fear the White House may simply opt to provide general observations, and evade
the tougher, specific direction we need," McCain said. "In order to gain the public support
necessary to move such sweeping legislation, the Administration's leadership and expertise is
absolutely necessary."
The Senate Committee on Commerce, Science and Transportation has a large area of
jurisdiction including marketing, advertising, labeling and liability issues. To date, the
Committee has held three hearings including the Global Settlement of Tobacco Litigation on
July 29, Tobacco Marketing and Youth on September 16, and the Public Health Benefits of a
Global Settlement of Tobacco Litigation on October 9.
(letter attached)
24) Russell Senate Office Building
Washington. D.C. 20510
Contact: Nancy Ives
202 224-2235 TDD 202 224-7132
Form
QUESTIONS REGARDING GLOBAL TOBACCO SETTLEMENT LEGISLATION
THE FOLLOWING IS THE FIRST SET IN A SERIES OF QUESTIONS
PERTAINING TO S. 1415, LEGISLATION IMPLEMENTING THE GLOBAL
TOBACCO SETTLEMENT PROPOSAL AGREED TO BY THE ATTORNEYS GENERAL OF
THE VARIOUS STATES AND THE TOBACCO INDUSTRY.
QUESTIONS RELATED TO SPECIFIC LEGISLATIVE LANGUAGE SHOULD USE S.
1415 AS THE REFERENCE. ADDITIONAL QUESTIONS WILL FOLLOW.
I. BAN ON OUTDOOR ADVERTISING, INCLUDING IN STADIA AND ARENAS
The agreement (bill page 15) bans outdoor tobacco product
advertising, and tobacco advertising in stadia and arena.
1. What data does the administration have to substantiate
HHS
that a ban on outdoor advertising, including stadia and arenas
will reduce smoking and, in particular, youth smoking?
HHS
2. To what extent do you believe such restrictions be
expected to reduce smoking?
3. Does the administration support such a ban. If so,
DOJ?
why?
If not, why not?
4. What specific changes, if any, in the legislative
Legal aspects HHS
language implementing the ban would the administration propose?
Please provide specifics.
II. BAN ON HUMAN FIGURES AND CARTOON FIGURES IN ADVERTISING
The agreement (bill page 15) bans the use of human figures
and cartoons in tobacco advertising.
1. What data does the administration have to substantiate
HHS
that barring the use of human figures and cartoon advertising
will reduce smoking, in particular, youth smoking?
2.
To what extent do you believe such restrictions can be
HHS counted on to reduce smoking?
CourtConstitutes human image or cartoon character?
entity would you propose to determine what
4. What penalty do you believe is appropriate and should
accrue for a violation of the prohibition on material containing
figures deemed to be human or cartoon?
5. Does the administration support this ban. If so, why?
If not why not?
6.
What specific changes, if any, in the legislative
language implementing the ban would the administration propose?
Please provide specifics.
pa
CONSTIT
III. BAN ON INTERNET ADVERTISING
The agreement (bill page 16) bans tobacco advertising on the
internet.
DOT
1.
Does the administration support such a ban? If so,
why? If not, why not?
2.
How can and should a ban on internet advertising of
cigarettes be enforced?
3.
What, if any, concerns does the administration have
Dat
regarding Constitutional free speech issues raised by any such
ban?
Dat
4.
What specific changes, if any, in the legislative
language implementing the ban would the administration propose?
IV. BAN ON POINT-OF-SALE ADVERTISING
The agreement (bill page 16) bans point-of-sale tobacco
except for advertisements which comply with that certain
restrictions.
1.
What data does the administration have to substantiate
that a ban on point-of-sale advertising would reduce smoking, in
HHS
particular, youth smoking?
2.
Does the administration support such a ban? If BO,
HHS
why? If not, why not?
DOJ
3.
Is the exemption of point-of-sale advertisement for
Dat
adult stores and tobacco outlets appropriate?
4.
Is it appropriate to grant companies with greater
Dat
cigarette market share additional point-of-sale advertising
rights? If so, why? If not, why not?
antrust
5.
Does such a privilege constitute a statutorily granted
DOJ
competitive advantage? Please discuss.
6. Does the administration support this grant? If so,
DOJ
why?
If not, why not?
7. What specific changes, if any, in the legislative
Daj
language implement the ban would the administration propose?
HHS
Please provide specifics.
V. LIMITATIONS ON POINT-OF-SALE ADVERTISING
The agreement (bill page 17) specifies the size and design
of permissible point-of-sale advertising.
1.
What data does the administration possess to suggest
HHS
that such limitations will reduce smoking, particularly among
youth?
2. Does the administration support this provision?
DaJ
If so, why? If not, why not?
3.
If so, what is the justification for statutorily
determining a particular size limitation and for the particular
size and restrictions proposed?
does 4. the administration propose? Please provide specifics.
What specific changes in legislative language, if any,
VI. BAN ON ADVERTISING RESTRICTION AGREEMENTS
The agreement (bill page 17) includes a prohibition on
arrangements to limit the ability of a retailer to display
permissible point-of-sale advertisement or promotional material
originating with another manufacturer or distributor.
1. Are such agreements currently against federal or state
law? If so, is such a provision necessary?
2.
Does the administration support such a provision? If
so, why? If not, why not?
3.
Does the administration support the limitation. If BO,
DOJ
why? If not, why not?
not
language 4. implement the ban would the administration propose?
What specific changes, if any, in the legislative
Please provide specifics.
VII. GLAMORIZATION OF TOBACCO
The agreement, (bill page 20) prohibits payments to
glamorize or promote the image or use of tobacco through pint,
films or live performance that appeals to individuals under 18
years of age.
1. What data does the administration possess to indicate
HHS
whether and to what extent this provision will reduce smoking,
particularly among youth?
What entity does the administration propose will
determine 2. what activity constitutes promoting the image or use of
HHS
a tobacco produce?
crurt?
DOJ, HHS 3.
How does the administration envision such a ban will be
enforced?
DOT
4.
Does the administration support such limitations?
JOA
5.
What specific changes, if any, in the legislative
language would the administration propose? Please provide
specifics.
VIII. RESTRICTION ON COLOR ADVERTISEMENTS
The agreement (bill page 21) prohibits the use of color
advertising except in adult publications.
1.
What data does the administration have to substantiate
that a ban on color ads, except in publications with limited
HHS
youth readership, will reduce smoking, particularly youth
smoking?
2.
Does the administration believe that the threshold for
HAS
the restriction of two million readers is the appropriate
threshold?
3.
How does the administration envision readership
HHS
demographics being determined?
DOJ,HHS
4.
How would this restriction be enforced?
5.
Does the administration support this restriction? If
DOJ
so, why? If not, why not?
6.
what specific changes, if any, in the legislative
DOJ
language implementing the restriction does the administration
propose?
Please provide specifics.
IX. GENERAL QUESTION REGARDING MARKETING/ADVERTISING BAN
1.
Can the marketing and advertising restrictions
pot
envisioned in the settlement be constitutionally imposed, with or
without the industry's consent? Please discuss.
X. WARNING LABELS
The agreement, (bill page 26- 28), authorizes a variety of
new warning labels for tobacco products.
DOJ, HHS appropriate warning labels?
1.
Does the administration believe that these are
2.
Does the administration possess data suggesting that
HHS these smoking? warning will effectively reduce smoking, particularly youth
What data suggests that the various new warnings will
HHS 3.
be as or more effective than the current warning requirements?
MASSDAS 4.
Does the administration support the provisions
authorizing specific new labels? If so, why? If not, why not?
5. What specific changes, if any, in the legislative
Days
language implementing this provision would the administration
MHS
propose? Please provide specifics.
IX. WARNING LABEL SIZE AND LOCATION REQUIREMENTS
The agreement (bill page 28-29) specifies, the size,
placement and print type of the various tobacco warning labels.
1. What data does the administration have to suggest that
HHS
these specifications will reduce smoking, particularly youth
smoking?
2.
Does the administration support these particular
DOJ
specifications? If so, why? If not why not?
3. Does the administration support the exception (page 29)
Dat
provided for flip-top cigarette packages? If so, why? If not,
why not?
4. What specific changes, if any, in the legislative
Dat
language to implement these restrictions would the administration
propose? Please provide specifics.
X. SMOKELESS TOBACCO ALTERNATIVE LABELS
The agreement (bill page 34) provides for various new
warning label options for smokeless tobacco
1. What data does the administration have to suggest that
HHS
the various new warning labels will effectively reduce the use of
smokeless tobacco, particularly among youth?
2.
Does the administration support the use of these
DOJ
alternative labels?
3. What changes, if any, to the legislative language
implementing this provision would the administration propose?
DOJ
Please provide specifics.
XI. ENFORCEMENT OF ADVERTISING, MARKETING AND LABELING
RESTRICTIONS
The agreement (bill page 36-37) provides for the enforcement
of advertising, marketing and labeling restrictions.
FEB.
1.
Does the administration support the enforcement
provisions regarding advertising, marketing and labeling? If SO
why? If not, why not?
2. What changes in legislative language, if any, does the
administration recommend regarding this provision? Please
provide specific language.
XII. PREEMPTION OF STATE AND LOCAL ACTION
The agreement (bill page 38) prohibits state and local
requirements related to the packaging or advertising of
cigarettes or smokeless tobacco.
1. Does the administration support such preemption? If so,
DOJ
why?
If not, why not?
2.
What changes in legislative language, if any, does the
loe
administration recommend regarding this provision? Please
provide specific language.
XIII. EXEMPTION OF EXPORTS
The agreement (bill page 40) exempts exports from the
packaging, labeling and advertising requirements.
State USDA LISTR
1.
Does the administration support this exemption? If so,
why? If not, why not?
2.
What ramifications does this provision have in the area
State
of foreign relations?
USTR
3. What changes in legislative language, if any, does the
Day
administration recommend regarding this provision? Please
provide specifics.
State
WIR
XIV. RESTRICTION ON ACCESS TO TOBACCO PRODUCTS
The agreement (bill page 40-41), prohibits the sale of
tobacco products to individuals under 18 years of age, requires
that retailers verify the age of individuals purchasing tobacco;
and exempts individuals 27 years of age or older from the photo
identification requirement.
HHS,
DOT so, why? If not, why not?
1.
Does the administration support these provisions? If
HHS,
DOTO provision will be enforced and can it be enforced effectively?
2.
HOW does the administration envision that this
3. What changes in legislative language, if any, does the
administration recommend regarding this provision? Please
Dar
provide specifics.
XV. PROHIBITION ON SALE OF LESS THAN A FULL PACK OF CIGARETTES
The agreement (bill page 41) prohibits the sale of less than
a full pack of cigarettes.
1.
Does the administration support this prohibition? If
DOJ
80, why? If not, why not?
2.
What changes in legislative language, if any, does the
DOJ
administration recommend regarding this provision? Please
provide specifics.
XVI. STATE LICENSURE TO SELL TOBACCO
The agreement, (bill page 44) requires states to license
sellers of tobacco products.
1.
What data, if any, does the administration have to
HHS
indicate that licensure will effectively reduce access to tobacco
by minors?
2.
What entity does the administration envision would
100
enforce the licensure requirement if a state should be unable or
unwilling to implement the licensure program?
3. Has the administration developed or formulated the cost
HHS of a licensure program?
4.
Does the administration support the licensure program?
HHST
If so, why? If not, why not?
5. What changes in legislative language, if any, does the
administration recommend regarding this provision? Please
DoJ HHS
provide specifics.
XVII. ANTI-TRUST EXEMPTION
The agreement, (bill page 94), provides anti-trust exemption
for the tobacco industry.
DOJ
1.
Does the administration support such an exemption? If
so, why? If not, why not?
2.
Could such an exemption be used to set prices beyond
DOJ those necessary to deter youth smoking, but to increase profits
for the industry?
3.
What changes in legislative language, if any, does the
DOJ
administration recommend regarding this provision? Please
provide specifics.
XVIII. APPLICABILITY TO NEW ENTRANTS IN TOBACCO INDUSTRY
1.
Under the agreement, and the implementing legislation,
what is the assurance that new entrants into the tobacco industry
got
will comply with the statute and any related consent agreements
not to challenge the legality of the agreement implementation
legislation.
###
SATURDAY, MAY 16, 1998
S
NATIONAL NEWS
THE WASHINGTON POST
White House, McCain Agree on Amendments to Tobacco Bil
By JOHN F. HARRIS
disbursed among states, the federal
At the urging of White House
that they would pay no more than
also agreed to changes that would
David A. Kessler, forma head of
and SAUNDRA TORRY
government and tobacco farmers.
Chief of Staff Erskine B. Bowles and
$6.5 billion a year from losses in
require states to accept federal
the Food and Drug Administration,
Washington Post Staff Writers
The changes, according to senior
domestic policy adviser Bruce
civil lawsuits. Under the amend-
guidelines for curbing secondhand
was cautious: "There's still a sub-
administration officials, would
Reed, who have been shepherding
ments McCain will offer to his own
smoke or demonstrate that they
stantial way to go," saidKessler,
Days before the Senate is to vote
strengthen the bill sufficiently for
tobacco negotiations for the admin-
bill, the cap would rise to $8 billion.
have their own equally effective
who wants to strip all liability
on comprehensive tobacco legisla-
Clinton to sign it-a commitment
istration, McCain agreed to chang-
There are also tougher provi-
rules: And they agreed to narrow
protections. Former surgeon gen-
tion, President Clinton is ready to
the White House had never stated
es in several broad categories.
sions if the major cigarette compa-
other protections the original bill
eral C. Everett Koop caled the
bless a Republican-drafted bill that
previously. Aides to McCain and
For the first time, McCain's bill
nies fail to meet targets to reduce
would have given the tobacco in-
changes "an improvement, but let's
extends limited protection from
Clinton cautioned that the two
would specify how the proceeds
youth smoking. The bill anticipates
dustry from antitrust and civil lia-
go further."
lawsuits to cigarette companies,
sides reached agreement only in
from tobacco legislation would be
a 30 percent reduction over five
bility laws.
Administration officials sid that
and his aides are busily trying to
principle, and that specific language
divided. Forty percent of the mon-
years, and 60 percent over a dec-
From the White House vantage
nothing in their agreement with
line up support for the measure
is still being drafted.
ey, about $26 billion over five years,
ade. If the industry fails to meet
point, the critical question is wheth-
McCain requires them to or
from anti-smoking activists.
Even so, both sides felt confident
would go to states. Twenty-two
these targets, it could pay as much
er the changes Bowles and Reed
other amendments that world be
Following several days of fever-
enough to declare a breakthrough.
percent; or $14.3 billion, would bei
as $4 billion annually-a figure up
won from McCain will satisfy other
even tougher on tobacco.
ish negotiations, Sen. John McCain
"We are in agreement," McCain
spent on federal medical research.
modestly from the $3.5 billion
Democrats and anti-smoking activ-
senators, for example, want lo in-
(R-Ariz.) and senior White House
said in an interview. "We aren't
Another 22 percent would go to
McCain originally proposed.
ists, who have fretted that Clinton
crease cigarette taxes to rais the
officials said yesterday they have
opposing each other, and I think it
anti-tobacco efforts, including
Perhaps more important, indi-
may be too eager to strike a. deal.
per-pack price by $1.50 over hree
reached broad agreement on
strengthens our position to have
r-advertising and programs
vidual companies would have to pay
Reed and Bowles met at the White
years, compared with the 1.10
amendments to the McCain-drafted
that agreement."
to help smokers quit. The balance
additional fines if market surveys
House yesterday with several pub-
over five years that McCab is
bill that is set for debate in the
"As discussions stand now, this
of $10.4 billion, or 16 percent,
showed young people smoking
lic health advocates, winning a
seeking
Senate as early as Monday.
legislation achieves the president's
would go to help tobacco farmers
their brands in disproportionate
modestly positive response.
"The White House has heped
The amendments would increase
principles and it makes strong,
whose livelihood suffers as smoking
numbers. For each additional youth
The White House has "signifi-
move the ball in the right drec-
the maximum liability of cigarette
bipartisan, comprehensive anti-
declines.
smoker, a firm would have to pay a
cantly strengthened our [public
tion," said Sen. John F. Kerry|(D-
makers to civil lawsuits and set
youth smoking legislation definitely
Another critical area of agree-
fee twice the estimated lifetime
health) issues," said Linda Craw-
Mass.). Sen. Kent Conrad (ND.);
terms for how the $65 billion-the
within reach and doable," said
ment is on liability caps for the
profits it makes from a typical
ford of the American Cancer Soci-
who has led a Democratic task firce
amount the bill is predicted to raise
White House senior adviser Rahm
tobacco industry. McCain's original
smoker.
ety. "Let's say the glass is half-full
on tobacco, agreed, adding, "Bt is
in its first five years-would be
Emanuel.
bill guaranteed cigarette makers
McCain and the White House
and not half-empty at this point."
it the end of the process? No."