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Tobacco [Folder 1] [1]
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Records of the First Lady's Office (Clinton Administration)
Jennifer Klein's Files
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CONRAD
02/09/98 MON 12:49 FAX 202 456 5581
DOMESTIC POLICY COL
002
O:\BAI\BAI98.189
S.L.C.
40
1
(d) BUDGET TREATMENT OF AMOUNTS IN TRUST
2 FUND.-The amounts in the Trust Fund shall be excluded
3 from, and shall not be taken into account, for purposes
4 of any budget enforcement procedure under the Congres-
5 sional Budget Act of 1974 or the Balanced Budget and
6 Emergency Deficit Control Act of 1985.
7
CHAPTER 3-INVESTMENTS FOR
8
CHILDREN
9 SEC. 131. INVESTMENTS IN HEALTHY CHILD DEVELOP-
10
MENT.
11
(a) CHILD DEVELOPMENT PROJECTS.-
12
(1) IN GENERAL.-The Secretary shall use the
13
funds allocated for use under this section as follows:
14
(A) INVESTMENTS FOR EARLY CHILDHOOD
child care=
15
$ 7.68 V. $ 11.4
DEVELOPMENT-60 percent of such funds will
16
be used for investments in early childhood de-
17
velopment as follows:
18
(i) 10 percent to expand the Early
Too much to
10%
"
19
Head Start program under section 645A of
HS and Early
$ 8
HS here.
20
the Head Start Act (42 U.S.C. 9841).
Shidn't
take out
21
(ii) 20 percent to the Child Care and
from mandator
2040 =
22
Development Block Grant Act of 1990 (42
$ 1.5 V
23
$ 7.5
U.S.C. 658A et seq.) to provide certificates
Not sure
24
and grants to increase the availability and
what this
means.
25
affordability of quality child care for chil-
02/09/08 MON 12:49 FAX 202 456 5581
DOMESTIC POLICY COL
003
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S.L.C.
41
1
dren of working families from birth
2
through school age, including children with
3
disabilities.
4
(iii) 25 percent to expand the Head
5
17 $ 1.9 V. $3.8 Start program under the Head Start Act
6
(42 U.S.C. 9801) to increase enrollment
7
and responsiveness of such program.
8
(iv) 5 percent to early childhood devel-
9
: $4 V. 01
-
opment programs under part C and section
(OMB says & 1)
10
619 of the Individuals with Disabilities
11
Education Act.
12
Not less than 30 percent of amounts made 30907
13 30 yof available under clause (ii) shall be set-aside for
2090(41.5)=
14
innovative programs for babies and toddlers, in-
15
cluding the development of family child care
16
networks, start-up for infant care programs, the
17
training of providers, or the provision of parent
18
education and support.
19
(B) IMPROVEMENT OF THE QUALITY OF
20
CHILD CARE.-20 percent to establish a health
Another 20%
21
and safety fund through the Child Care and
Also, separation
22
Development Block Grant Act of 1990 (42
of quality
into 2 pieces
23
U.S.C. 658A et seq.), 50 percent of which shall
= $ 1.5 =
24
be used to provide incentives to reward States
25
that improve the quality of child care programs
02/09/98 MON 12:50 FAX 202 456 5581
DOMESTIC POLICY COL
4
004
O:\BAI\BAI98.189
S.L.C.
42
1
in the State by adopting the essential compo-
2
nents of the child care program of the armed
3
services or the essential components of other
4
proven child care models. Such components in-
5
clude the provision of training linked to in-
6
creased wages, improved standards and enforce-
7
ment, lower child to staff ratios, higher rates
8
for accredited programs, and consumer edu-
9
cation including resources referral services.
10
(C) PROGRAMS TO PROMOTE HEALTHY BE-
11 = $1.5B HAVIOR.-20 percent to the Child Care and De-
s
12
velopment Block Grant Act of 1990 (42 U.S.C.
13
658A et seq.) to expand the availability and af-
14
fordability of quality before- and after-school
15
care, and summer and weekend activities for
16
school age (through 15 years of age) children,
17
including children with disabilities, to promote
18
good health and academic acuievement and to
19
help in avoiding high risk behaviors. Eligible
20
entities for grants under this clause shall in-
21
clude elementary and secondary schools, com-
22
munity-based organizations, child care centers,
23
family child care homes, youth centers, or part-
24
nerships and should be targeted to communities
25
with high rates of poverty or at-risk children.
02/09/98 MON 12:50 FAX 202 456 5581
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005
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S.L.C.
43
1
(b). SUPPLEMENT NOT SUPPLANT-Amounts pro-
2 vided to a State under this section shall be used to supple-
3 ment and not supplant other Federal, State and local
4 funds provided for programs that serve the health and de-
5 velopmental needs of children. Amounts provided to the
6 State under any of the provisions of law referred to in
7 this section shall not be reduced solely as a result of the
8 availability of funds under this section.
9
(c) FUNDING.-The Board shall use amounts made
10 available for a fiscal year under section 111(a)(2)(B)(i)
11 to carry out this section in such fiscal year.
12 SEC. 132. IMPROVING ELEMENTARY EDUCATION.
13
(a) GRANTS AUTHORIZED.-From amounts made
14 available under section 111(a)(2)(b)(ii) for each fiscal
15 year, the Secretary of Education shall award grants to
16 States to enable the States to train, recruit and hire ele-
17 mentary school teachers for the purpose of reducing the
18 average class size for students in grades 1 through 3 to
19 not less than 15 and not more than 18 students per teach-
20 er.
21
(b) REGULATIONS REQUIRED.-The Secretary of
22 Education, not later than March 1, 1999, shall promulgate
23 regulations implementing the grant program described in
24 subsection (a).
25
(c) STATE PLAN.-
02/09/98 MON 12:50 FAX 202 456 5581
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S.L.C.
44
1
(1) IN GENERAL-Each State desiring a grant
2
under this section shall submit to the Secretary of
3
Education a State plan at such time, in such man-
4
ner, and accompanied by such information as the
5
Secretary may require.
6
(2) CONTENTS.-Each State plan shall dem-
7
onstrate to the satisfaction of the Secretary of Edu-
8
cation that—
9
(A) the activities assisted by the State with
10
funds provided under this section will be con-
11
ducted in compliance with the regulations de-
12
scribed in subsection (a); and
13
(B) the State will use the funds provided
14
under this section to reduce class size for stu-
15
dents in grades 1 through 3 in elementary
16
schools throughout the State, focusing on using
17
the funds to train, recruit and hire teachers for
18
elementary schools serving communities with
19
the least resources for training, recruiting and
20
hiring teachers for the grades and the highest
21
student-to-teacher ratios for the grades.
22
(3) APPROVAL-The Secretary shall approve a
23
State plan submitted under paragraph (1) if the
24
State plan meets the requirements of this sub-
25
section.
02/09/98 MON 12:51 FAX 202 456 5581
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S.L.C.
45
1 SEC. 133. INCREASED ENROLLMENT OF CHILDREN WITH
2
THE MEDICAID AND STATE CHILDREN'S
3
HEALTH INSURANCE PROGRAMS.
4
(a) TRANSITIONAL INCREASED FEDERAL MATCHING
5 RATE FOR INCREASED MEDICAID ADMINISTRATIVE
6 COSTS.-Section 1931(h) of the Social Security Act (42
7 U.S.C. 1396u-1(h)) is amended-
8
(1) in paragraph (2), by striking "attributable
9
to" and all that follows and inserting "attributable
10
to-
11
"(A) administrative costs of eligibility de-
12
terminations that (but for the enactment of this
13
section) would not be incurred; and
14
"(B) outreach activities to enroll uninsured
15
children in a State plan approved under this
16
title or title XXI."; and
17
(2) by striking paragraphs (3) and (4) and in-
18
serting in following:
19
"(3) LIMITATION.-
20
"(A) IN GENERAL.-Beginning with fiscal
21
year 1997, the total amount of additional Fed-
22
eral funds that are expended as a result of the
23
application of this subsection shall not exceed
24
$525,000,000.
25
"(B) AVAILABILITY OF APPROPRIATION.
26
Any amount appropriated in accordance with
02/09/98 MON 12:51 FAX 202 456 5581
DOMESTIC POLICY COL
5.
008
O:\BAI\BAI98.189
S.L.C.
46
1
this paragraph shall remain available until ex-
2
pended.
3
"(C) EQUITABLE DISTRIBUTION OF
4
FUNDS.-In applying this paragraph, the Sec-
5
retary shall ensure the equitable distribution of
6
additional funds among the States.".
7
(b) MEDICAID PRESUMPTIVE ELIGIBILITY FOR Low-
8 INCOME CHILDREN.-
9
(1) IN GENERAL-Section 1920A(b)(3) of the
10
Social Security Act (42 U.S.C. 1396r-1a(b)(3)) is
11
amended-
12
(A) in subparagraph (A)(i))-
13
(i) by striking "or (II)" and inserting
14
", (II)"; and
15
(ii) by inserting ", or (III) is an ele-
16
mentary school or secondary school, as
17
such terms are defined in section 14101 of
18
the Elementary and Secondary Education
19
Act of 1965 (20 U.S.C. 8801), is a child
20
care resource and referral agency, a child
21
support enforcement agency, or is author-
22
ized to determine the eligibility of a child
23
for obtaining child health assistance under
24
title XXI that is in the form of coverage
02/09/98 MON 12:51 FAX 202 456 5581
DOMESTIC POLICY COL
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009
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S.L.C.
47
1
that meets the requirements of section
2
2103" before the semicolon; and
3
(B) in subparagraph (C), by striking "lim-
4
iting the classes of" and inserting "imposing
5
limitations on".
6
(2) RETROACTIVITY.-The amendments made
7
by paragraph (1) take effect as if included in the en-
8
actment of section 4912 of the Balanced Budget Act
9
of 1997 (Public Law 105-33; 111 Stat. 571).
10
(c) MEDICAID EXPENDITURES COUNTED AGAINST
11 STATE ALLOTMENTS UNDER TITLE XXI.-
12
(1) IN GENERAL.-Section 2104(d) of the So-
13
cial Security Act (42 U.S.C. 1397dd(d)) is amended
14
to read as follows:
15
"(d) CERTAIN MEDICAID EXPENDITURES COUNTED
16 AGAINST INDIVIDUAL STATE ALLOTMENTS-The amount
17 of the allotment otherwise provided to a State under sub-
18 section (b) or (c) for a fiscal year shall be reduced by the
19 amount (if any) of the payments made to that State under
20 section 1903(a) for expenditures claimed by the State dur-
21 ing such fiscal year that is attributable to the provision
22 of medical assistance to a child for which payment is made
23 under section 1903(a)(1) on the basis of an enhanced
24 FMAP under the fourth sentence of section 1905(b).".
02/09/98 MON 12:52 FAX 202 456 5581
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48
1
(2) RETROACTIVITY.-The amendment made by
2
paragraph (1) takes effect as if included in the en-
3
actment of section 4901 of the Balanced Budget Act
4
of 1997 (Public Law 105-33; 111 Stat. 552).
5
(d) MEDICAID AND STATE CHILDREN'S HEALTH IN-
6 SURANCE PROGRAM ELIGIBILITY FOR LEGAL IMMIGRANT
7 CHILDREN WHO ENTERED THE UNITED STATES AFTER
8 AUGUST 1996.-
9
(1) EXEMPTION FROM 5-YEAR BAN.-Section
10
403 of the Personal Responsibility and Work Oppor-
11
tunity Reconciliation Act of 1996 (8 U.S.C. 1613),
12
as amended by sections 5302(c)(1)(B) and 5303(c)
13
of the Balanced Budget Act of 1997 (Public Law
14
105-33; 111 Stat. 599, 600), is amended by adding
15
at the end the following:
16
"(e) MEDICAID AND SCHIP BENEFITS FOR CERTAIN
17 CHILDREN.-Notwithstanding any other provision of law,
18 the limitations under section 401(a) and subsection (a)
19 shall not apply to an individual who is under 19 years of
20 age and who lawfully entered the United States after Au-
21 gast 22, 1996, but only with respect to the eligibility of
22 that individual for-
23
"(1) child health assistance under title XXI of
24
the Social Security Act (42 U.S.C. 1397aa et seq.);
25
and
02/09/98 MON 12:52 FAX 202 456 5581
DOMESTIC POLICY COL
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S.L.C.
49
1
"(2) medical assistance under title XIX of such
2
Act (42 U.S.C. 1396 et seq.), if the individual is an
3
optional targeted low-income child described in sec-
4
tion 1905(u)(2)(B) of such Act (42 U.S.C.
5
1396d(u)(2)(B)).".
6
(2) NONAPPLICATION OF STATE AUTHORITY TO
7
DETERMINE ELIGIBILITY FOR MEDICAID.-Section
8
402(b)(2) of the Personal Responsibility and Work
9
Opportunity Reconciliation Act of 1996 (8 U.S.C.
10
1612(b)(2)), as amended by sections 5303(b) and
11
5305(b) of the Balanced Budget Act of 1997 (Public
12
Law 105-33; 111 Stat. 600, 601), is amended-
13
(A) in the matter preceding subparagraph
14
(A), by striking "Qualified" and inserting "Ex-
15
cept as provided in subparagraphs (A), (E),
16
(F), and (G), qualified"; and
17
(B) by adding at the end the following:
18
(G) MEDICAID EXCEPTION FOR CERTAIN
19
CHILDREN.--With respect to eligibility for bene-
20
fits for the program described in section
21
403(e)(2), paragraph (1) shall not apply to any
22
individual described in that section.".
23
(3) RETEOACTIVITY-The amendments made
24
by paragraphs (1) and (2) take effect as if included
02/09/98 MUN 12:02 202 456 5581
DOMESTIC POLICY COL
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S.L.C.
50
1
in the enactment of the Balanced Budget Act of
2
1997 (Public Law 105-33; 111 Stat. 251).
3
(e) ANNUAL PAYMENT FOR REDUCTION IN MEDIC-
4 AID ELIGIBLE BUT UNENROLLED CHILDREN.-Section
5 1903 of the Social Security Act (42 U.S.C. 1396b) is
6 amended by adding at the end the following:
7
"(x) ENHANCEMENT PAYMENT FOR REDUCTION IN
8 ELIGIBLE BUT UNENROLLED CHILDREN.-
9
"(1) ANNUAL LUMP-SUM PAYMENT.-Begin-
10
ning with fiscal year 1999, in addition to the
11
amounts paid to a State under subsection (a), the
12
Secretary shall pay to each State that has an ap-
13
proved plan under this title an amount equal to the
14
enrollment enhancement payment determined under
15
paragraph (2).
16
"(2) ENROLLMENT ENHANCEMENT PAY-
17
MENT.-
18
"(A) :- JRMULA.-The EL ilment enhance-
19
ment payment for a State for a fiscal year is
20
equal to the product of-
21
"(i) the excess baseline enrollment for
22
the State for the fiscal year;
23
"(ii) the average per child expendi-
24
tures by the State under this title for the
25
fiscal year; and
02/09/38 MON 12:53 FAX 202 456 5581
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51
1
"(iii) the enhanced FMAP for the
2
State for the fiscal year described in sec-
3
tion 2105(b).
4
"(B) DETERMINATION OF THE EXCESS
5
BASELINE ENROLLMENT.-For purposes of sub-
6
paragraph (A)(i), the excess baseline enroliment
7
for a State for a fiscal year is the difference be-
8
tween (i) the actual number of full year equiva-
9
lent children enrolled with the State plan and
10
(ii) the number of such children which the State
11
estimates would be SO enrolled on the basis of
12
the number of such children SO enrolled in the
13
preceding fiscal year and expected increases re-
14
sulting from population growth and such other
15
factors as the Secretary determines are appro-
16
priate.
17
"(3) DATA REQUIREMENTS.-Fach State shall
18
submit to the Secretary such data, at such time and
19
in such manner, as the Secretary determines is nec-
20
essary to make the payments required under this
21
subsection. The Secretary shall ensure that data is
22
provided under this subsection in a manner that is
23
consistent with other data reporting requirements
24
for information required to be submitted by a State
02/09/98 MON 12:53 FAX 202 456 5581
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S.L.C.
52
1
under this title and title XXI, and that avoids dupli-
2
cation of reporting requirements.
3
"(4) STATES WITH SIGNIFICANTLY HIGHER IN-
4
CREASED ACTUAL ENROLLMENT THAN THE EX-
5
PECTED NATIONAL AVERAGE INCREASE.-For any
6
fiscal year, if a State's actual full year equivalent
7
children enrollment percentage increase over the pre-
8
ceding fiscal year is at least twice the estimated na-
9
tional average percentage increase in such enroll-
10
ment for that fiscal year, as issued by the Congres-
11
sional Budget Office in January 1998, the State
12
shall submit such additional information as the Sec-
13
retary determines is necessary to verify that the in-
14
crease is the result of the State reducing the number
15
of unenrolled children who are eligible for medical
16
assistance under this title in the State.
17
"(5) TIMING OF PAYMENT; RECONCILIATION.-
18
The Secretary shall make the annual payment re-
19
quired under this subsection for a fiscal year not
20
later than September 30 of that fiscal year and shall
21
reconcile such payments during the subsequent fiscal
22
year. The Secretary may reduce or increase pay-
23
ments made under this subsection as necessary to
24
adjust for any overpayment or underpayment made
25
for any prior fiscal year. A State shall provide the
02/09/98 MON 12:53 FAX 202 456 5581
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S.L.C.
O:\BAI\BAI98.189
53
1
Secretary with access to any records or information
2
relating to payments made under this subsection for
3
the purposes of review or audit.
4
"(6) WAIVERS.-The provisions of this sub-
5
section apply to a State providing medical assistance
6
under this title under waiver authority in the same
7
manner as they apply to a State with an approved
8
plan under this title.".
06:44:57 PM
Record Type:
Record
To:
Thomas L. Freedman/OPD/EOP, Jerold R. Mande/OSTP/EOP
CC:
Jennifer L. Klein/OPD/EOP
Subject: Issues in Conrad tobacco bill
Updated views.
Forwarded by Neera Tanden/WHO/EOP on 02/09/98 06:46 PM
06:38:58 PM
Record Type:
Record
To:
CC:
Subject: Issues in Conrad tobacco bill
Forwarded by Neera Tanden/WHO/EOP on 02/09/98 06:24 PM
06:04:16 PM
Record Type:
Record
To:
Jerold R. Mande/OSTP/EOP, Thomas L. Freedman/OPD/EOP
CC:
Jennifer L. Klein/OPD/EOP, Nicole R. Rabner/WHO/EOP
Subject: Issues in Conrad tobacco bill
The following are the child care team's comments on the Conrad bill:
1. Conrad uses the Medicaid formula for distribution of the funds, while we use the child allocation
formula - these are very different. This is a larger issue, but we don't particularly care for child
care.
2. Head Start and Early Head Start should not be paid for out of tobacco funding (which Conrad
does and we steered very clear of doing). The argument is that this doesn't make sense since
Head Start money goes directly to grantees (not states).
3. We don't spend anything on IDEA (although we don't have a problem with that).
4. The quality set-aside within the Child Care and Development Block Grant (CCDBG) (Section
131(a)(1)(A)) is too high -- we should suggest a 2 to 1 ratio between subsidies and early
learning/quality. Also, the language ("including") suggests that states could use the funding for
other non-specified uses. But should add additional activities, such as home visitation, and health
linkages.
5. Again, the language is "including". This quality money should also be limited to the specified
uses.
Clinton wants
Breakdown of payouts
Of the $368.5 billion to be paid by the tobacco Industry
over 25 years as part of the proposed national tobacco
$1.50-a-pack
settlement, the states would receive about $193 billion.
The rest would go to settle private anti-tobacco lawsuits
and to the federal government to finance anti-tobacco and
health programs. Although the final allocation is up to
Congress, state attorneys general have proposed two for-
cigarette hike
mulas for dividing up the money. For each $1 billion paid
to the states as a whole, here is what each state would
receive (in millions of dollars):
Formula Formula
Tobacco deal
Formula Formula
No. 1
No.
2
No. 1
No. 2
not a priority
Alaska
21
2.2
Neb.
4.4
4.6
Nizz
1373
for Congress
04.4
Ark.
7,5
7.8
N.H.
6,1
5.1
018
1993
33.8
By Susan Page
Colo
125
12.3
N.M.
4.4
4.6
and Jessica Lee
Cords
6.9
16.52
N.Y
1132
11.7
USA TODAY
Del
2.6
2.7
N.C.
21.1
22.0
555
6.6
24
Fla.
49.9
WASHINGTON The cost
51.0
Ohio
45.7
45.7
223
323
Olda.
of a pack of cigarettes could go
Hawaii
4.5
4.8
Ore
10.4
11.0
up by $1.50 under a proposal
23
Pa
622
63.3
President Clinton will make to-
42.3
43.4
R.1.
6.6
6.5
day aimed at discouraging
17.9
18.2
S.C.
10.7
9.8
teen-agers from smoking.
lowa
7.9
8.2
S.D.
2.2
2.3
In an Oval Office statement
by Joe Marquette, AP
Kan,
7.6
7.9
Tenn.
222
22.8
that culminates three months
Armey: Says he wants to see
Ky
18.0
16.1
Texas
51.0
50.2
of administration review and
presidential leadership
La
20.2
17.8
Utah
3.1
3.2
debate, Clinton will call for
Maine
7.0
6.8
Vt.
27
2.6
stiffer fines that would drive up
get all the parties to the lawsuit
Md.
20.5
21.2
Va.
18.7
18.7
cigarette prices over 10 years
involved to agree to It, but we
Mass
36.7
36.6
Wash.
16.9
18.9
If targets to reduce youth
have to do It right."
Mich:
89.5
40.1
W.Va.
8.1
8.4
smoking aren't met.
Minn
Although Clinton won't pro-
20.8
21.9
Wis.
18.9
18.7
But Clinton's long-awalted
Miss
7.9
pose specific legislation. he
7.8
Wyo.
1.3
1.3
comments come as a proposed
Mo.
20.7
19.8
promised to offer "clear princi-
$368.5 billion national tobacco
ples to further this debate."
Source: USA TODAY research by Doug Levy
settlement seems doomed, at
The tobacco agreement calls
least for now. Republican lead-
for reducing underage smoking
velop legislation. "From virtu-
ers already have indicated that
by 30% in five years, 50% in sev-
the administration review. Ag-
ally every corner of our cau-
Congress won't take up the
riculture Secretary Dan Glick-
en years and 60% in 10 years. If
complicated, controversial
cus, the message here is go
man will attend, and Clinton Is
the targets aren't met, the deal
slow," he said.
agreement this year.
calls for penalties that would
expected to call for provisions
Under the settlement an-
California Rep. Henry Wax-
to protect tobacco farmers.
raise the price of cigarettes by
man, the top Democrat on the
nounced three months ago by
more than 50 cents a pack. Clin-
Mississippi Attorney
state officials and tobacco com-
Commerce Committee, praised
ton will call for significantly in-
at Michael Moore praised Clin-
Clinton for "keeping his focus
pany lawyers, the Industry
creasing the fines so that the
ton's stance. "I expect the pres-
would pay $368.5 billion over
on public health and stopping
hike would be $1.50 per pack.
Ident will be very supportive of
25 years to settle smoking-re-
children from being the targets
what we have done," he said.
But House Majority Leader
lated lawsuits. USA TODAY
of the tobacco industry."
Dick Armey, R-Texas, said he
And forther FDA Commis-
has obtained a state-byistate
Aldes say Clinton will speak
expects more than a speech
sioner David Kessier, a leading
only broadly about the need to
breakdown of the possible
from Clinton today. 7 think to
smoking opponent, said Clin-
payouts (see chart).
focus on youth smoking and to
a large extent, we feel the pres-
ton's endorsement of a big
On Tuesday, Clinton reject-
maintain the Food and Drug
Ident should exercise some
price hike for cigarettes
ed the Idea that the tobacco
Administration's authority to
"terrific."
leadership here," Armey said.
regulate tobacco.
deal is dead.
"Send us a bill, Bill"
"If you want to reduce the
Joining him in the Oval Of-
"We ought to get this legisla-
However, Senate Minority
number of young people who
fice will be Health and Human
tion through Congress as quick-
smoke," he said, "that's the
Leader Tom Daschie, D-S.D.,
Services Secretary Donna Sha-
ly as we can," he told report-
right way to do IL"
said that Congress is getting
lala and domestic policy advis-
ers. "I would hope that we can
just what It wants: time to de-
er Bruce Reed, who jointly led
Contributing Doug Levy
USA TODAY WEDNESDAY, SEPTEMBER 17, 1997
CC: MIKE
CHRIS
Elena,
return
Critance
Hereits
the
CHILDBIR WPD
Page 1
January 13, 1998
MEMORANDUM
TO
Jennifer and Nicole
FROM
Bobbie
RE
Pampers Partnership
John Burbank, assistant brand manager of Pampers and one of the contributors to
the Child Care Conference reception, contacted me recently about the possibility of
establishing a partnership with the White House. In an effort to help the
Administration educate parents on their children's eligibility for federal assistance
programs, he proposed a partnership using Pampers' extensive contacts with new
and prospective parents to inform them of the availability of programs such as
Medicare and HeadStart.
Pampers routinely supplies this country's 17,000 childbirth educators with
information packets that are in turn distributed to more than 90% of expectant
parents. John offered to produce and include information on federal assistance
programs for low income families in every packet. Since information can vary from
state to state, Procter and Gamble also offered to establish a 1-800 number for
families to access their state specific information. Pampers would cover all costs.
I asked John what they would want in return and he said that they would like their
role mentioned in any public announcement or press release. He added that if we
prefer, they could make this a joint project with HHS rather than the White House.
He also told me that he is working on a similar public education campaign on
Sudden Infant Death Syndrome with the VP's office.
Let's meet at the end of this week or the beginning of the next to discuss whether
this is something we should pursue -- and to plan next steps.
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S.L.C.
105TH CONGRESS
2D SESSION
S.
IN THE SENATE OF THE UNITED STATES
Mr. CONRAD (for himself, Mr. DASCHLE, Mr. LAUTENBERG, Mr. REED, Mr.
LEAHY, Mr. DODD, Mr. BINGAMAN, Mr. DURBIN,
) introduced the following bill; which was read twice
and referred to the Committee on
A BILL
To help parents keep their children from starting to use
tobacco products, to expose the tobacco industry's past
misconduct and to stop the tobacco industry from
targeting children, to eliminate or greatly reduce the
illegal use of tobacco products by children, to improve
the public health by reducing the overall use of tobacco
products, and for other purposes.
1
Be it enacted by the Senate and House of Representa-
2 tives of the United States of America in Congress assembled,
3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
4
(a) SHORT TITLE.-This Act may be cited as the
5 "Healthy Kids Act".
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2
1
(b) TABLE OF CONTENTS.-The table of contents of
2 this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Purposes.
Sec. 4. Definitions.
TITLE I-HEALTHY KIDS TRUST FUND
Subtitle A-General Provisions
Sec. 101. Establishment of Trust Fund.
Sec. 102. Liability of tobacco product manufacturers.
Sec. 103. Licensing of manufacturers.
Sec. 104. Enforcement.
Subtitle B-Payments
CHAPTER 1-To STATES
Sec. 111. Payments to States.
CHAPTER 2-FEDERAL HEALTH PROGRAMS
Sec. 121. National Institutes of Health Trust Fund for Health Research.
CHAPTER 3-INVESTMENTS FOR CHILDREN
Sec. 131. Improving child care and early childhood development.
Sec. 132. Improving elementary education.
Sec. 133. Increased enrollment of children with the medicaid and State chil-
dren's health insurance programs.
Sec. 134. Medicare cancer patient demonstration project; evaluation and report
to Congress.
TITLE II-FDA JURISDICTION OVER TOBACCO PRODUCTS
Sec. 201. Reference.
Sec. 202. Statement of general authority.
Sec. 203. Treatment of tobacco products as drugs and devices.
Sec. 204. Safety and efficacy standard and recall authority.
Sec. 205. General health and safety regulation of tobacco products.
SUBCHAPTER F-TOBACCO PRODUCTS
"Sec. 571. Promulgation of regulations.
"Sec. 572. Scientific Advisory Committee.
"Sec. 573. Performance standards.
"Sec. 574. Disclosure and reporting of tobacco and nontobacco ingredients
and constituents.
"Sec. 575. Tobacco product warnings, labeling and packaging.
"Sec. 576. Preservation of State and local authority.
"Sec. 577. Restrictions on youth access to tobacco products.
"Sec. 578. Public disclosure of health research.
"Sec. 579. Citizen suits.
"Sec. 580. Agricultural producers.
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3
"Sec. 581. Authority of Secretary.
Sec. 206. Repeals.
Sec. 207. Authority of Federal Trade Commission.
TITLE III-YOUTH SMOKING REDUCTION TARGETS AND
INCENTIVES TO REDUCE YOUTH SMOKING RATES
Sec. 301. Purpose.
Sec. 302. Child tobacco use surveys.
Sec. 303. Reduction in underage tobacco product usage.
Sec. 304. Noncompliance.
Sec. 305. Miscellaneous provisions.
TITLE IV-TOBACCO TRANSITION ASSISTANCE FUND
Sec. 401. Tobacco transition assistance fund.
TITLE V-STANDARDS TO REDUCE INVOLUNTARY EXPOSURE TO
TOBACCO SMOKE
Sec. 501. Standards to reduce involuntary exposure to tobacco smoke.
TITLE VI-PUBLIC HEALTH AND OTHER PROGRAMS
Subtitle A-Research Programs
Sec. 601. Tobacco-related research.
Sec. 602. Research relating to patterns of smoking.
Sec. 603. Surveillance and evaluation.
Subtitle B-Education and Prevention Programs
Sec. 611. Grants for school- and community-based tobacco danger education
programs.
Subtitle C-Miscellaneous Programs
Sec. 621. Counter-advertising programs.
Sec. 622. National Tobacco Cessation Program.
Sec. 623. Assistance for those suffering from tobacco-related illnesses.
Sec. 624. International tobacco control.
Sec. 625. National Event Sponsorship Program.
Sec. 626. Programs to reduce alcohol and illicit drug use by minors.
TITLE VII-LLABILITY PROTECTION; CONSENT DECREES;
NATIONAL PROTOCOL
Subtitle A-Liability Protection and Attorney Fees
Sec. 701. Dismissal of and limitations on civil actions.
Sec. 702. Attorney's fees and expenses.
Subtitle B-Consent Decrees
Sec. 711. Consent decrees.
Sec. 712. Non-participating manufacturers.
Subtitle C-National Tobacco Control Protocol
CHAPTER 1-ESTABLISHMENT
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4
Sec. 721. National Tobacco Control Protocol.
CHAPTER 2-TERMS AND CONDITIONS
Sec. 725. Application of chapter.
Sec. 726. Agreement to prohibit certain advertising.
Sec. 727. Consensual restrictions.
Sec. 728. Agreement on format and content requirements for labeling and ad-
vertising.
Sec. 729. Agreement to ban on nontobacco items and services, contests and
games of chance, and sponsorship of events.
CHAPTER 3-ENFORCEMENT
Sec. 731. Federal enforcement of the protocol.
Sec. 732. State enforcement of the protocol.
Sec. 733. Private enforcement of protocol.
TITLE VIII-MISCELLANEOUS PROVISIONS
Sec. 801. Prohibition on use of funds to facilitate the exportation or promotion
of tobacco.
Sec. 802. Whistleblower protections.
Sec. 803. Prohibitions relating to tobacco products and children.
Sec. 804. Preservation of State and local authority.
Sec. 805. Severability.
TITLE IX-PROVISIONS RELATING TO NATIVE AMERICANS
Sec. 901. Provisions relating to Native Americans.
1 SEC. 2. FINDINGS.
2
Congress makes the following findings:
3
(1) Approximately 3,000 minors begin smoking
4
each day. 1,000 of these minors will die prematurely
5
from a tobacco-related illness or condition.
6
(2) The tobacco industry has targeted tobacco
7
product marketing and promotional efforts toward
8
minors as a source of replacement smokers. The in-
9
dustry has also targeted minorities.
10
(3) Approximately 90 percent of smokers start
11
by the time they are 18 years old. Half of all smok-
12
ers start by age 14.
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5
1
(4) Although most minors plan to quit smoking
2
after experimenting, the vast majority find that they
3
have become addicted and cannot quit.
4
(5) Seventy percent of adult smokers would like
5
to quit smoking, but the tobacco industry has ma-
6
nipulated the level of nicotine in tobacco products
7
and added ingredients to enhance the addictive ef-
8
fects of nicotine to ensure that users of these prod-
9
ucts remain addicted.
10
(6) Tobacco products cause cancer, heart dis-
11
ease, emphysema, and other fatal illnesses. More
12
than 400,000 Americans die each year of these to-
13
bacco-related illnesses and conditions.
14
(7) Tobacco-related illnesses, medical conditions
15
resulting from tobacco use, and lost wages and pro-
16
ductivity cost the United States in excess of
17
$100,000,000,000 annually.
18
(8) Federal and State taxpayers spend tens of
19
billions of dollars annually paying for the medicare,
20
medicaid, and other Federal and State health pro-
21
gram costs arising from tobacco-related illnesses and
22
conditions.
23
(9) The tobacco industry has systematically in-
24
voked and abused the attorney-client privilege to
25
hide its attempts to mislead the American public
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6
1
about the health risks associated with tobacco use,
2
its manipulation of nicotine levels, and its efforts to
3
lure underage users and minorities to its products.
4
(10) Nicotine is an addictive drug. The market-
5
place for tobacco products is largely based on addic-
6
tion.
7
(11) Worldwide, smoking kills 3,000,000 people
8
each year. If current smoking patterns continue, to-
9
bacco use will kill 10,000,000 people a year by 2025.
10
(12) Environmental tobacco smoke is respon-
11
sible for 3,000 lung cancer deaths annually in Amer-
12
ican nonsmokers. Environmental tobacco smoke also
13
harms children's health.
14
(13) In 1995, the tobacco industry spent close
15
to $4,900,000,000 to attract new users, retain cur-
16
rent users, increase current consumption, and gen-
17
erate favorable long-term attitudes toward smoking
18
and tobacco use.
19
(14) Tobacco product advertising misleadingly
20
portrays the use of tobacco as socially acceptable
21
and healthful.
22
(15) Tobacco product advertising is regularly
23
seen by persons under the age of 18, and persons
24
under the age of 18 are regularly exposed to tobacco
25
product promotional efforts.
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7
1
(16) Through advertisements during and spon-
2
sorship of sporting events, tobacco has become
3
strongly associated with sports and has become por-
4
trayed as an integral part of sports and the healthy
5
lifestyle associated with rigorous sporting activity.
6
(17) Children are exposed to substantial and
7
unavoidable tobacco advertising, that leads to favor-
8
able beliefs about tobacco use, plays a role in leading
9
young people to overestimate the prevalence of to-
10
bacco use, and increases the number of young people
11
who begin to use tobacco.
12
(18) Tobacco advertising increases the size of
13
the tobacco market by increasing consumption of to-
14
bacco products including increasing tobacco sales to
15
young people.
16
(19) Children are more influenced by tobacco
17
advertising than adults, they smoke the most adver-
18
tised brands, and children as young as 3 to 6 can
19
recognize a character associated with smoking at the
20
same rate that they recognize cartoons and fast food
21
characters.
22
(20) Tobacco company documents indicate that
23
young people are an important and often crucial seg-
24
ment of the tobacco market.
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8
1
(21) Comprehensive advertising restrictions will
2
have a positive effect on the smoking rates of young
3
people, as evidenced by the experience in Norway,
4
Finland, and other countries.
5
(22) Restrictions on advertising are necessary
6
to prevent unrestricted tobacco advertising from un-
7
dermining legislation prohibiting access to young
8
people and providing for education about tobacco
9
use.
10
(23) International experience shows that adver-
11
tising regulations that are stringent and comprehen-
12
sive have a greater impact on overall tobacco use
13
and young people's use than weaker or less com-
14
prehensive ones. Text only requirements, while not
15
as stringent as a ban, will accomplish this purpose
16
while preserving the informational function of adver-
17
tising.
18 SEC. 3. PURPOSES.
19
The purposes of this Act are-
20
(1) to help American families dramatically re-
21
duce the number of children illegally using tobacco
22
products by-
23
(A) increasing the price of cigarettes by at
24
least $1.50 per pack in order to discourage
25
youth purchases;
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9
1
(B) implementing prevention, education,
2
cessation, and counter-advertising programs;
3
(C) restricting advertisements designed to
4
encourage kids to use tobacco products;
5
(D) imposing penalties on manufacturers
6
for failing to reach youth smoking rate reduc-
7
tion targets;
8
(E) requiring retailers to comply with laws
9
forbidding sales to minors; and
10
(F) giving the Food and Drug Administra-
11
tion the authority to keep tobacco products out
12
of the hands of minors;
13
(2) to compensate taxpayers for their costs at-
14
tributable to tobacco-related illnesses by reimbursing
15
the medicaid and medicare programs and resolving
16
the legal claims of Federal, State and local govern-
17
ments for those costs that resulted from past mis-
18
conduct by the tobacco industry;
19
(3) to improve the public health by reducing the
20
number of adult users of tobacco products through
21
approved cessation programs and limiting public ex-
22
posure to environmental tobacco smoke;
23
(4) to provide assistance to tobacco farmers, to-
24
bacco factory workers, and rural communities;
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10
1
(5) to make tobacco industry documents regard-
2
ing the health effects of tobacco, addiction, and the
3
agricultural production, manufacturing, distribution,
4
and marketing of tobacco products to youths avail-
5
able to the public; and
6
(6) to enhance global anti-tobacco efforts.
7 SEC. 4. DEFINITIONS.
8
In this Act:
9
(1) BRAND.-The term "brand" means a vari-
10
ety of a tobacco product distinguished by the tobacco
11
used, tar content, nicotine content, flavoring used,
12
size, filtration, or packaging.
13
(2) CIGAR.-The term "cigar" means any roll
14
of tobacco wrapped in leaf tobacco or in any sub-
15
stance containing tobacco (other than any roll of to-
16
bacco which is a cigarette or cigarillo within the
17
meaning of paragraph (3) or (4)).
18
(3)
CIGARETTE.-The
term
"cigarette"
19
means—
20
(A) any roll of tobacco wrapped in paper
21
or in any substance not containing tobacco; and
22
(B) any roll of tobacco wrapped in any
23
substance containing tobacco which, because of
24
its appearance, the type of tobacco used in the
25
filler, or its packaging and labeling, is likely to
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11
1
be offered to, or purchased by, consumers as a
2
cigarette described in subparagraph (A).
3
(4) CIGARILLOS.-The term "cigarillos" means
4
any roll of tobacco wrapped in leaf tobacco or any
5
substance containing tobacco (other than any roll of
6
tobacco which is a cigarette within the meaning of
7
paragraph (3)) and as to which 1,000 units weigh
8
not more than 3 pounds.
9
(5) CIGARETTE товассо.-Тhе term "cigarette
10
tobacco" means any product that consists of loose
11
tobacco and is intended for use by persons in a ciga-
12
rette. Unless otherwise stated, the requirements of
13
this Act pertaining to cigarettes shall also apply to
14
cigarette tobacco.
15
(6) DISTRIBUTOR.-The term "distributor"
16
means any person who furthers the distribution of
17
tobacco products, whether domestic or imported, at
18
any point from the original place of manufacture to
19
the person who sells or distributes the product to in-
20
dividuals for personal consumption. Such term shall
21
not include common carriers.
22
(7) LITTLE CIGAR.-The term "little cigar"
23
means any roll of tobacco wrapped in leaf tobacco or
24
any substance containing tobacco (other than any
25
roll of tobacco which is a cigarette within the mean-
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12
1
ing of subsection (1)) and as to which 1,000 units
2
weigh not more than 3 pounds.
3
(8) MANUFACTURER.-The term "manufac-
4
turer" means any person, including any repacker or
5
relabeler, who manufactures, fabricates, assembles,
6
processes, or labels a finished tobacco product.
7
(9) PACKAGE.-The term "package" means a
8
pack, box, carton, or container of any kind in which
9
tobacco products are offered for sale, sold, or other-
10
wise distributed to consumers.
11
(10) PERSON.-The term "person" means an
12
individual, partnership, corporation, parent corpora-
13
tion, or any other business or legal entity or succes-
14
sor in interest of any such person.
15
(11) PIPE TOBACCO.-The term "pipe tobacco"
16
means any loose tobacco that, because of its appear-
17
ance, type, packaging, or labeling, is likely to be of-
18
fered to, or purchased by, consumers as a tobacco
19
product to be smoked in a pipe.
20
(12) POINT OF SALE.-The term "point of
21
sale" means any location at which an individual can
22
purchase or otherwise obtain tobacco products for
23
personal consumption.
24
(13) RETAILER.-The term "retailer" means
25
any person who sells tobacco products to individuals
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13
1
for personal consumption, or who operates a facility
2
where vending machines or self-service displays are
3
permitted under this Act.
4
(14) ROLL-YOUR-OWN ТОВАССО.-Тhe term
5
"roll-your-own tobacco" means any tobacco which,
6
because of its appearance, type, packaging, or label-
7
ing, is suitable for use and likely to be offered to,
8
or purchased by, consumers as tobacco for making
9
cigarettes.
10
(15) SALE.-The term "sale" includes the sell-
11
ing, providing samples of, or otherwise making to-
12
bacco products available for personal consumption in
13
any place within the scope of this Act.
14
(16) SECRETARY.-Except as provided in title
15
IV, the term "Secretary" means the Secretary of
16
Health and Human Services.
17
(17) SMOKELESS товассо.-Тhе term "smoke-
18
less tobacco" means any product that consists of
19
cut, ground, powdered, or leaf tobacco that is in-
20
tended to be placed in the oral or nasal cavity.
21
(18) STATE.-The term "State" includes the
22
several States, the District of Columbia, the Com-
23
monwealth of Puerto Rico, Guam, the Virgin Is-
24
lands, American Samoa, the Northern Mariana Is-
25
lands, and any other territory or possession of the
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14
1
United States. Such term includes any political divi-
2
sion of any State.
3
(19) Товассо.-Тhе term "tobacco" means to-
4
bacco in its unmanufactured form.
5
(20) TOBACCO PRODUCT.-The term "tobacco
6
product" means any product made of or derived
7
from tobacco leaf for human consumption, including,
8
but not limited to, cigarettes, cigarillos, cigarette to-
9
bacco, cigars, little cigars, pipe tobacco, and smoke-
10
less tobacco, and roll-your-own tobacco.
11
(21) TRUST FUND.-Except as provided in sec-
12
tion 121 and title IV, the term "Trust Fund" means
13
the Health Enhancement and Lowered Tobacco
14
Hazards for Young Kids Trust Fund established
15
under section 101.
16
TITLE I-HEALTHY KIDS TRUST
17
FUND
18
Subtitle A-General Provisions
19 SEC. 101. ESTABLISHMENT OF TRUST FUND.
20
(a) CREATION.-
21
(1) IN GENERAL-There is established in the
22
Treasury of the United States a trust fund to be
23
known as the "Health Enhancement and Lowered
24
Tobacco Hazards for Young Kids Trust Fund" (re-
25
ferred to as the "HEALTHY Kids Trust Fund"),
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15
1
consisting of such amounts as may be appropriated
2
or credited to the Trust Fund.
3
(2) TRUSTEES.-The trustees of the Trust
4
Fund shall be the Secretary of the Treasury and the
5
Secretary of Health and Human Services.
6
(b) TRANSFERS.-There are hereby appropriated and
7 transferred to the Trust Fund an amount equal to 75 per-
8 cent of the-
9
(1) amounts received under the assessment
10
made under section 102;
11
(2) amounts paid as fines or penalties, includ-
12
ing interest thereon, under section 103; and
13
(3) amounts repaid or recovered under title III,
14
including interest thereon.
15
(c) REPAYABLE ADVANCES.-
16
(1) AUTHORIZATION.-There are authorized to
17
be appropriated to the Trust Fund, as repayable ad-
18
vances, such sums as may from time to time be nec-
19
essary to make the expenditures described in sub-
20
section (d).
21
(2) REPAYMENT WITH INTEREST.-Repayable
22
advances made to the Trust Fund shall be repaid,
23
and interest on such advances shall be paid, to the
24
general fund of the Treasury when the Secretary of
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16
1
the Treasury determined that moneys are available
2
in the Trust Fund for such purposes.
3
(3) RATE OF INTEREST.-Interest on advances
4
made pursuant to this subsection shall be at a rate
5
determined by the Secretary of the Treasury (as of
6
the close of the calendar month proceeding the
7
month in which the advance is made) to be equal to
8
the current average market yield on outstanding
9
marketable obligations of the United States with re-
10
maining period to maturity comparable to the antici-
11
pated period during which the advance will be out-
12
standing.
13
(d) EXPENDITURES FROM TRUST FUND.-Amounts
14 in the Trust Fund shall be made available in each fiscal
15 year, without further appropriation as follows:
16
(1) 14.5 percent of such amounts shall be made
17
available for payments to States as provided for
18
under section 111.
19
(2) 17 percent of such amounts shall be made
20
available for grants to the States for child care and
21
early childhood development as provided for in sec-
22
tion 131.
23
(3) 6 percent of such amounts shall be made
24
available for grants to States for education as pro-
25
vided for in section 132.
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17
1
(4) 4 percent of such amounts shall be made
2
available to carry out the outreach and increased en-
3
rollment provisions under the amendments made by
4
section 133 to the medicaid program under title XIX
5
of the Social Security Act (42 U.S.C. 1396 et seq.)
6
and the children's health insurance program under
7
title XXI of such Act (42 U.S.C. 1397aa et seq.).
8
(5) 15.5 percent of such amounts shall be made
9
available for public health programs, of which—
10
(A) $300,000,000 shall be made available
11
to the Secretary to carry out chapter IX of the
12
Food Drug and Cosmetic Act (as added by sec-
13
tion 204);
14
(B) $200,000,000 shall be made available
15
to the Indian Health Service to be used as pro-
16
vided for in title IX; and
17
(C) the remainder shall be made available
18
for public health programs as provided for in
19
title VI.
20
(6) 21 percent of such amounts shall be made
21
available to the National Institutes of Health Trust
22
Fund for Health Research for the conduct of re-
23
search through the National Institutes of Health as
24
provided for in section 121.
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18
1
(7) For agricultural programs as provided for
2
in title IV-
3
(A) 12 percent of such amounts shall be
4
made available to the Tobacco Community Re-
5
vitalization Trust Fund for each of the first 10
6
fiscal years after the date of enactment of this
7
Act;
8
(B) 4 percent of such amounts shall be
9
made available to the Tobacco Community Re-
10
vitalization Trust Fund for each of the 11th
11
through 15th fiscal years after the date of en-
12
actment of this Act; and
13
(C) 2 percent of such amounts shall be
14
made available to the Tobacco Community Re-
15
vitalization Trust Fund for each of the 16th
16
through 25th fiscal years after the date of en-
17
actment of this Act.
18
(8) For the Hospital Insurance Trust Fund-
19
(A) 4 percent of such amounts shall be
20
made available to such Trust Fund for each of
21
the first 10 fiscal years after the date of enact-
22
ment of this Act, of which $250,000,000 shall
23
be made available to carry out section 134 in
24
each of the 3 fiscal years described in such sec-
25
tion;
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1
(B) 8 percent of such amounts shall be
2
made available to such Trust Fund for each of
3
the 11th through 15th fiscal years after the
4
date of enactment of this Act;
5
(C) 9 percent of such amounts shall be
6
made available to such Trust Fund for each of
7
the 16th through 25th fiscal years after the
8
date of enactment of this Act; and
9
(D) 10 percent of such amounts shall be
10
made available to such Trust Fund for each
11
subsequent fiscal year.
12
(9) For reducing the public debt-
13
(A) 6 percent of such amounts shall be
14
made available for such reduction in each of the
15
first 10 fiscal years after the date of enactment
16
of this Act;
17
(B) 10 percent of such amounts shall be
18
made available for such reduction in each of the
19
11th through 15th fiscal years after the date of
20
enactment of this Act;
21
(C) 11 percent of such amounts shall be
22
made available for such reduction in each of the
23
16th through 25th fiscal years after the date of
24
enactment of this Act; and
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1
(D) 12 percent of such amounts shall be
2
made available for such reduction in each sub-
3
sequent fiscal year.
4
(e) BUDGETARY TREATMENT AND DEFINITION.-
5
(1) TREATMENT.-The Office of Management
6
and Budget shall not include any amounts made
7
available under paragraphs (8) and (9) of subsection
8
(d) in the estimates and reports required by sections
9
252(b) and (254) of the Balanced Budget and
10
Emergency Deficit Control Act of 1985 and the
11
Congressional Budget Act of 1974.
12
(2) DEFINITION.-In subsection (d)(9), the
13
term "public debt" means any obligation of the Fed-
14
eral Government included in the gross public debt.
15 SEC. 102. LIABILITY OF TOBACCO PRODUCT MANUFACTUR-
16
ERS.
17
(a) PAYMENTS.-
18
(1) INITIAL PAYMENT.-Not later than 90 days
19
after the date of enactment of this Act, each manu-
20
facturer shall pay to the Trust Fund an amount
21
that bears the same ratio to $15,000,000,000 as the
22
average stock market capitalization of the tobacco
23
manufacturer (as defined in paragraph (3)) bears to
24
the average stock market capitalization of all to-
25
bacco manufacturers for 1996.
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1
(2) ANNUAL ASSESSMENTS AND COLLECTION.-
2
For each calendar year beginning with the first full
3
calendar year following the year in which this Act is
4
enacted, the Secretary shall assess each manufac-
5
turer an amount determined under subsection (b).
6
Such assessments shall be collected in a manner
7
similar to the manner in which excise taxes are col-
8
lected under chapter 52 of the Internal Revenue
9
Code of 1986.
10
(3) AVERAGE STOCK MARKET CAPITALIZA-
11
TION.-For purposes of this subsection, the average
12
stock market capitalization of a manufacturer for a
13
year shall be determined by the Secretary of the
14
Treasury based on data submitted by manufacturers
15
and other appropriate data. Such determinations
16
shall be made regardless of whether the manufac-
17
turer issues stock.
18
(b) ANNUAL ASSESSMENTS.-The Secretary shall as-
19 sess each manufacturer (in accordance with regulations,
20 relating to the timing and method of payment of assess-
21 ments, to be promulgated by the Secretary of the Treas-
22 ury) an amount in accordance with the following:
23
(1) SMALL CIGARETTES.-With respect to a
24
manufacturer of cigarettes weighing not more than
25
3 pounds per thousand, the assessment shall equal-
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1
(A) for cigarettes removed during calendar
2
year 1999, $25 per thousand;
3
(B) for cigarettes removed during calendar
4
year 2000, $50 per thousand; and
5
(C) for cigarettes removed during calendar
6
year 2001, $75 per thousand.
7
(2) LARGE CIGARETTES.-
8
(A) IN GENERAL.-With respect to a man-
9
ufacturer of cigarettes weighing more than 3
10
pounds per thousand, the assessment shall
11
equal-
12
(i) for cigarettes removed during cal-
13
endar year 1999, $52.50 per thousand;
14
(ii) for cigarettes removed during cal-
15
endar year 2000, $105 per thousand; and
16
(iii) for cigarettes removed during cal-
17
endar year 2001, $157.50 per thousand.
18
(B) EXCEPTION.-On cigarettes more than
19
6½ inches in length, at the rate prescribed for
20
cigarettes weighing not more than 3 pounds per
21
thousand, counting each 23/4 inches, or fraction
22
thereof, of the length of each as one cigarette.
23
(3) SMALL CIGARS.-With respect to a manu-
24
facturer of cigars weighing not more than 3 pounds
25
per thousand, the assessment shall equal-
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1
(A) for cigars removed during calendar
2
year 1999, $25 per thousand;
3
(B) for cigars removed during calendar
4
year 2000, $50 per thousand; and
5
(C) for cigars removed during calendar
6
year 2001, $75 per thousand.
7
(4) LARGE CIGARS.-With respect to a manu-
8
facturer of cigars weighing more than 3 pounds per
9
thousand, the assessment shall equal-
10
(A) for cigars removed during calendar
11
year 1999, 25 percent of the price for which
12
such cigars are sold but not more than $500
13
per thousand;
14
(B) for cigars removed during calendar
15
year 2000, 50 percent of the price for which
16
such cigars are sold but not more than $1,000
17
per thousand; and
18
(C) for cigars removed during calendar
19
year 2001, 75 percent of the price for which
20
such cigars are sold but not more than $1,500
21
per thousand.
22
(5) SNUFF.-With respect to a manufacturer of
23
snuff (as such term is defined for purposes of chap-
24
ter 52 of the Internal Revenue Code of 1986) the
25
assessment shall equal-
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1
(A) for snuff removed during calendar year
2
1999, $6.67 per pound (and a proportionate as-
3
sessment at the like rate on all fractional parts
4
of a pound);
5
(B) for snuff removed during calendar year
6
2000, $13.33 per pound (and a proportionate
7
assessment at the like rate on all fractional
8
parts of a pound); and
9
(C) for snuff removed during calendar year
10
2001, $20 per pound (and a proportionate as-
11
sessment at the like rate on all fractional parts
12
of a pound).
13
(6) CHEWING TOBACCO.-With respect to a
14
manufacturer of chewing tobacco (as such term is
15
defined for purposes of chapter 52 of the Internal
16
Revenue Code of 1986) the assessment shall equal-
17
(A) for chewing tobacco removed during
18
calendar year 1999, $2.67 per pound (and a
19
proportionate assessment at the like rate on all
20
fractional parts of a pound);
21
(B) for chewing tobacco removed during
22
calendar year 2000, $5.33 per pound (and a
23
proportionate assessment at the like rate on all
24
fractional parts of a pound); and
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1
(C) for chewing tobacco removed during
2
calendar year 2001, $8 per pound (and a pro-
3
portionate assessment at the like rate on all
4
fractional parts of a pound).
5
(7) PIPE TOBACCO.-With respect to a manu-
6
facturer of pipe tobacco (as such term is defined for
7
purposes of chapter 52 of the Internal Revenue Code
8
of 1986) the assessment shall equal-
9
(A) for pipe tobacco removed during cal-
10
endar year 1999, $5.33 per pound (and a pro-
11
portionate assessment at the like rate on all
12
fractional parts of a pound);
13
(B) for pipe tobacco removed during cal-
14
endar year 2000, $10.67 per pound (and a pro-
15
portionate assessment at the like rate on all
16
fractional parts of a pound); and
17
(C) for pipe tobacco removed during cal-
18
endar year 2001, $16.00 per pound (and a pro-
19
portionate assessment at the like rate on all'
20
fractional parts of a pound).
21
(8) ROLL-YOUR-OWN TOBACCO.-With respect
22
to a manufacturer of roll-your-own tobacco the as-
23
sessment shall equal-
24
(A) for roll-your-own tobacco removed dur-
25
ing calendar year 1999, $5.71 per pound (and
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1
a proportionate assessment at the like rate on
2
all fractional parts of a pound);
3
(B) for roll-your-own tobacco removed dur-
4
ing calendar year 2000, $11.43 per pound (and
5
a proportionate assessment at the like rate on
6
all fractional parts of a pound); and
7
(C) for roll-your-own tobacco removed dur-
8
ing calendar year 2001, $17.14 per pound (and
9
a proportionate assessment at the like rate on
10
all fractional parts of a pound).
11
(c) INFLATION ADJUSTMENT.-In the case of a cal-
12 endar year after 2001, the dollar amount described in sub-
13 paragraph (C) of paragraphs (1), (2), (3), (4), (5), (6),
14 (7), and (8), and the percentage in subparagraph (C) of
15 paragraph (4), applicable to the preceding calendar year
16 shall be increased by an amount equal to—
17
(1) such dollar amount (or percentage), multi-
18
plied by
19
(2) the greater of-
20
(A) the medical consumer price percentage
21
increase for such calendar year as determined
22
in the same manner as the adjustment is deter-
23
mined under section 1(f)(3) of the Internal
24
Revenue Code of 1986 for such calendar year
25
by substituting "the second preceding calendar
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1
year" for "calendar year 1992" in subpara-
2
graph (B) thereof; or
3
(B) 3 percent.
4
(d) ASSESSMENTS APPLICABLE TO FLOOR
5 STOCKS.-
6
(1) IN GENERAL.-Tobacc products manufac-
7
tured in or imported into the United States which
8
are removed before any assessment date, and held
9
on such date for sale by any person, shall be subject
10
to an assessment in an amount equal to the excess
11
of-
12
(A) the assessment which would be im-
13
posed under subsection (b) on the product if the
14
product had been removed on such date, over
15
(B) the prior assessment (if any) imposed
16
under such subsection on such product.
17
(2) LIABILITY FOR ASSESSMENT AND METHOD
18
OF PAYMENT.-
19
(A) LIABILITY FOR ASSESSMENT.-A per-
20
son holding cigarettes on any assessment date,
21
to which any assessment imposed under para-
22
graph (1) applies shall be liable for such assess-
23
ment.
24
(B) METHOD OF PAYMENT.-The assess-
25
ment imposed under paragraph (1) shall be
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1
paid in such manner as the Secretary of the
2
Treasury shall prescribe by regulations.
3
(C) TIME FOR PAYMENT.-The assessment
4
imposed under paragraph (1) shall be paid on
5
or before April 1 following any assessment date.
6
(3) ARTICLES IN FOREIGN TRADE ZONES.-
7
Notwithstanding the Act of June 18, 1934 (48 Stat.
8
998, 19 U.S.C. 81a) and any other provision of law,
9
any product which is located in a foreign trade zone
10
on any assessment date, shall be subject to the as-
11
sessment imposed by paragraph (1) if-
12
(A) internal revenue taxes have been deter-
13
mined, or customs duties liquidated, with re-
14
spect to such product before such date; or
15
(B) such article is held on such date under
16
the supervision of a customs officer.
17
(4) ASSESSMENT DATE.-The term "assess-
18
ment date" means January 1.
19
(e) No TAX BENEFIT.-
20
(1) IN GENERAL.-The initial payment de-
21
scribed in subsection (a)(1) shall not be considered
22
to be an ordinary and necessary expense in carrying
23
on a trade or business for purposes of the Internal
24
Revenue Code of 1986 and shall not be tax deduct-
25
ible.
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1
(2) LOOK-BACK PENALTIES.-The payment of
2
penalties under title III shall not be considered to be
3
an ordinary and necessary expense in carrying on a
4
trade or business for purposes of the Internal Reve-
5
nue Code of 1986 and shall not be deductible.
6
(f) EFFECT OF BANKRUPTCY.-Section 507(a)(8) of
7 title 11, United States Code, is amended—
8
(1) in subparagraph (F)(iii), by striking "or" at
9
the end;
10
(2) in subparagraph (G), by striking the period
11
and inserting "; or"; and
12
(3) by adding at the end the following:
13
((H) a payment, an assessment, or a pen-
14
alty to be paid into the Health Enhancement
15
and Lowered Tobacco Hazards for Young Kids
16
Trust Fund under section 102 (or any other
17
section) of the Healthy Kids Act.".
18
(g) LIMITATION.-A manufacturer may not utilize
19 any proceeds from liability insurance coverage to make
20 payments or pay assessments under this section.
21
(h) HEALTHY KIDS STAMP.-The Secretary shall
22 promulgate regulations to provide that a Health Kids
23 Stamp be affixed to each package of a tobacco product
24 for which an assessment has been paid under this section.
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1
(i) NONAPPLICATION TO CERTAIN MANUFACTUR-
2 ERS.-
3
(1) IN GENERAL.-A manufacturer described in
4
paragraph (2) shall be exempt from the require-
5
ments of this section relating to-
6
(A) the payment of an initial payment
7
under subsection (a)(1); and
8
(B) the payment of that portion of the an-
9
nual assessments under this section that will be
10
provided under paragraphs (1) through (4) of
11
section 101(d) to States with which such manu-
12
facturer has settled tobacco-related civil actions
13
as of the date of enactment of this Act. For any
14
such manufacturer, the Secretary shall deter-
15
mine the percentage of the annual assessment
16
of such manufacturer that would be paid to
17
such States under such section and deduct such
18
amount from the aggregate assessment due.
19
(2) MANUFACTURER.-A manufacturer de-
20
scribed in this section is a manufacturer that has re-
21
solved tobacco-related civil actions with more than
22
25 States prior to January 1, 1998 through judicial
23
consent decrees.
24
(3) LIMITATION.-The provisions of paragraph
25
(1) shall apply only to assessments on cigarettes to
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31
1
the extent that such cigarettes constitute less than
2
3 percent of all cigarettes manufactured and distrib-
3
uted for consumers in any year.
4 SEC. 103. LICENSING OF MANUFACTURERS.
5
(a) IN GENERAL.-The Secretary, acting through the
6 Food and Drug Administration, shall establish a tobacco
7 manufacturer licensing program.
8
(b) REQUIREMENT.-A manufacturer or importer
9 shall have in effect a license issued under the program
10 under subsection (a) in order—
11
(1) to be eligible to manufacture and distribute
12
tobacco products in the United States, or, in the
13
case of an importer, to be eligible to import tobacco
14
products; and
15
(2) to be eligible to receive the protections pro-
16
vided under subtitle A of title VII.
17
(c) NONPAYMENT OF ASSESSMENTS.-A manufac-
18 turer or importer shall not be eligible to receive a license
19 under this section if such manufacturer or importer has
20 failed to pay the assessment required under section 102.
21
(d) REVOCATION AND SUSPENSION.-The Secretary
22 shall promulgate regulations to provide for the enforce-
23 ment of the program established under section (a). Such
24 regulations shall provide for the revocation or suspension
25 of a license for nonpayment of required assessments.
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1 SEC. 104. ENFORCEMENT.
2
(a) IN GENERAL.-The Secretary of the Treasury, in
3 consultation with the Secretary of Health and Human
4 Services, shall enforce the provisions of section 102 with
5 respect to any manufacturer that fails to pay any amount
6 assessed under section 102.
7
(b) AMOUNT OF PENALTY.-The amount of the pen-
8 alty imposed by subsection (a) on any failure with respect
9 to a manufacturer shall be established by the Secretary
10 of the Treasury for each day during the noncompliance
11 period, except that no such penalty shall be less than
12 $25,000 plus interest.
13
(c) NONCOMPLIANCE PERIOD.-For purposes of this
14 section, the term "noncompliance period" means, with re-
15 spect to any failure to pay an assessment under section
16 102, the period-
17
(1) beginning on the due date for such pay-
18
ment; and
19
(2) ending on the date on which such payment
20
is paid in full.
21
Subtitle B-Payments
22
CHAPTER 1-TO STATES
23 SEC. 111. PAYMENTS TO STATES.
24
(a) AVAILABILITY OF FUNDS.-
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1
(1) IN GENERAL.-The amounts made available
2
for a fiscal year under section 101(d)(1) shall be
3
made available to carry out subsections (b) and (d).
4
(2) No OVERPAYMENT.-With respect to the
5
amount provided to a State under paragraph (1) for
6
a fiscal year, the Secretary shall not treat such
7
amount as an overpayment under any joint Federal-
8
State health program.
9
(3) FISCAL YEAR LIMITATION.-Amounts made
10
available for a fiscal year under subsection (b) shall
11
not exceed the amount available for such fiscal year
12
under section 101(d)(1).
13
(b) REIMBURSEMENT.-
14
(1) IN GENERAL.-The Secretary shall use
15
amounts made available under subsection (a)(1) in
16
each fiscal year to provide funds to each State that
17
is eligible under subsection (c) to reimburse such
18
State for amounts expended by the State under the
19
State program under title XIX of the Social Security'
20
Act (42 U.S.C. 1396 et seq.) or any other State
21
health program for the treatment of individuals with
22
tobacco-related illnesses or conditions.
23
(2) AMOUNT.-
24
(A) IN GENERAL.-Except as provided in
25
subparagraph (B), the amount for which a
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1
State is eligible under paragraph (1) shall be
2
based on the ratio of the total Federal pay-
3
ments to the State under title XIX of the Social
4
Security Act (42 U.S.C. 1396 et seq.) for the
5
fiscal year involved to the total Federal pay-
6
ments to all States under such title for such fis-
7
cal year.
8
(B) SPECIAL PAYMENT RULE.-In the case
9
of a State that, as of the date of the enactment
10
of this Act, has resolved tobacco-related civil ac-
11
tions through judicial consent decrees with a
12
manufacturer described in section 102(i), the
13
amount determined under subparagraph (A)
14
shall be reduced by an amount equal to the
15
amount by which such manufacturer's payment
16
under section 102(a)(2) is reduced under sec-
17
tion 102(i) as a result of such settlement.
18
(3) ADJUSTMENT.-With respect to a fiscal
19
year in which the amount determined under para-
20
graphs (1) and (2) of subsection (a) exceeds the lim-
21
itation under subsection (a)(3), the Secretary shall
22
make pro rata reductions in the amounts provided to
23
States under this subsection.
24
(4) REALLOTMENT.-The amount for which a
25
State is eligible under this subsection that is not
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1
made available to the State as a result of the failure
2
of the State to meet the requirements of subsection
3
(c) shall be made available to other States on a pro
4
rata basis.
5
(5) USE OF FUNDS.-
6
(A) IN GENERAL-Amounts provided to a
7
State under this subsection shall be used—
8
(i) to reimburse the State for expenses
9
incurred by the State under the State pro-
10
gram under title XIX of the Social Secu-
11
rity Act (42 U.S.C. 1396 et seq.) relating
12
to the treatment of tobacco-related ill-
13
nesses or conditions;
14
(ii) to reimburse the State for other
15
expenses incurred by the State in providing
16
directly, or reimbursing others for the pro-
17
vision of, treatment for tobacco-related ill-
18
nesses or conditions; and
19
(iii) to provide funds to local govern-
20
mental entities as provided for in sub-
21
section (d).
22
(B) LIMITATION.-A State may not use
23
amounts provided under this subsection for pro-
24
grams or projects not approved of by the Sec-
25
retary.
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1
(c) ELIGIBILITY.-To be eligible to receive funds
2 under this section a State shall-
3
(1) agree to resolve in accordance with section
4
701 any civil action that has been commenced by the
5
State against a tobacco manufacturer, distributor, or
6
retailer of a tobacco product seeking recovery for ex-
7
penditures attributable to the treatment of tobacco
8
induced illnesses and conditions or other damages;
9
(2) prepare and submit to the Secretary a de-
10
scription of the manner in which the State will com-
11
ply with the requirements of subsection (d) and a
12
certification that all actions described in paragraph
13
(1) have been dismissed; and
14
(3) comply with the provisions of subsection (d)
15
with respect to State and local governments.
16
(d) FUNDS FOR LOCAL GOVERNMENTAL ENTI-
17 TIES.-To be eligible to receive funds under subsection
18 (b), a State shall have adopted procedures to provide an
19 equitable portion of such funds to local governmental enti-
20 ties within the State that can demonstrate that such enti-
21 ties incurred tobacco-related health costs through-
22
(1) contributions to the program under title
23
XIX of the Social Security Act (42 U.S.C. 1396 et
24
seq.);
25
(2) the provision of indigent care;
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1
(3) the provision of health care coverage to gov-
2
ernmental employees; or
3
(4) the implementation of tobacco product en-
4
forcement or tobacco product regulatory require-
5
ments in accordance with this Act.
6
CHAPTER 2-FEDERAL HEALTH
7
PROGRAMS
8 SEC. 121. NATIONAL INSTITUTES OF HEALTH TRUST FUND
9
FOR HEALTH RESEARCH.
10
(a) CREATION OF TRUST FUND.-There is estab-
11 lished in the Treasury of the United States a trust fund
12 to be known as the "National Institutes of Health Trust
13 Fund for Health Research" (hereafter referred to in this
14 section as the "Trust Fund"), consisting of such amounts
15 as may be appropriated or transferred to the Trust Fund
16 as provided in this section.
17
(b) FUNDING.-There shall be transferred to the
18 Trust Fund an amount equal to the amount made avail-
19 able for a fiscal year under section 101(d)(6) to carry out
20 this section in such fiscal year.
21
(c) OBLIGATIONS FROM TRUST FUND.-
22
(1) IN GENERAL.Subject to the provisions of
23
paragraph (4), with respect to the amounts made
24
available in the Trust Fund in a fiscal year, the Sec-
25
retary shall distribute during any fiscal year-
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1
(A) 2 percent of such amounts to the Of-
2
fice of the Director of the National Institutes of
3
Health to be allocated at the Director's discre-
4
tion-
5
(i) for carrying out the responsibilities
6
of the Office of the Director, including the
7
Office of Research on Women's Health and
8
the Office of Research on Minority Health,
9
the Office of Alternative Medicine, the Of-
10
fice of Rare Disease Research, the Office
11
of Behavioral and Social Sciences Research
12
(for use for efforts to reduce tobacco use),
13
the Office of Dietary Supplements, and the
14
Office for Disease Prevention; and
15
(ii) for construction and acquisition of
16
equipment for or facilities of or used by
17
the National Institutes of Health;
18
(B) 2 percent of such amounts for transfer
19
to the National Center for Research Resources
20
to carry out section 1502 of the National Insti-
21
tutes of Health Revitalization Act of 1993 con-
22
cerning Biomedical and Behavioral Research
23
Facilities;
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1
(C) 7.5 percent of such amounts to be used
2
for research into the prevention and cure of
3
cancer;
4
(D) 7.5 percent of such amounts to be
5
used as provided for in section 601;
6
(E) 1 percent of such amounts to be used
7
for prevention research programs at the Centers
8
for Disease Control and Prevention;
9
(F) 1 percent of such amounts to be used
10
for quality and health outcomes research at the
11
Agency for Health Care Policy and Research;
12
and
13
(G) the remainder of such amounts to
14
member institutes and centers, including the
15
Office of AIDS Research, of the National Insti-
16
tutes of Health in the same proportion to such
17
remainder, as the amount of annual appropria-
18
tions under appropriations Acts for each mem-
19
ber institute and center for the fiscal year bears
20
to the total amount of appropriations under ap-
21
propriations Acts for all member institutes and
22
centers of the National Institutes of Health for
23
the fiscal year.
24
(2) PLANS OF ALLOCATION.-The amounts
25
transferred under paragraph (1)(E) shall be allo-
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1
cated by the Director of the National Institutes of
2
Health or the various directors of the institutes and
3
centers, as the case may be, pursuant to allocation
4
plans developed by the various advisory councils to
5
such directors, after consultation with such
6
directors.
7
(3) GRANTS AND CONTRACTS FULLY FUNDED
8
IN FIRST YEAR.-With respect to any grant or con-
9
tract funded by amounts distributed under para-
10
graph (1), the full amount of the total obligation of
11
such grant or contract shall be funded in the first
12
year of such grant or contract, and shall remain
13
available until expended.
14
(4) TRIGGER AND RELEASE OF MONIES AND
15
PHASE-IN.-
16
(A) TRIGGER AND RELEASE.-No expendi-
17
ture shall be made under paragraph (1) during
18
any fiscal year in which the annual amount ap-
19
propriated for the National Institutes of Health
20
is less than the amount SO appropriated for fis-
21
cal year 1999.
22
(B) PHASE-IN.-The Secretary shall phase
23
in the distributions required under paragraph
24
(1) SO that-
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1
(i) 25 percent of the amount in the
2
Trust Fund is distributed in the first fiscal
3
year for which funds are available;
4
(ii) 50 percent of the amount in the
5
Trust Fund is distributed in the second
6
fiscal year for which funds are available;
7
(iii) 75 percent of the amount in the
8
Trust Fund is distributed in the third fis-
9
cal year for which funds are available; and
10
(iv) 100 percent of the amount in the
11
Trust Fund is distributed in the fourth
12
and each succeeding fiscal year for which
13
funds are available.
14
(d) BUDGET TREATMENT OF AMOUNTS IN TRUST
15 FUND.-The amounts in the Trust Fund shall be excluded
16 from, and shall not be taken into account, for purposes
17 of any budget enforcement procedure under the Congres-
18 sional Budget Act of 1974 or the Balanced Budget and
19 Emergency Deficit Control Act of 1985.
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1
CHAPTER 3-INVESTMENTS FOR
2
CHILDREN
3 SEC. 131. IMPROVING CHILD CARE AND EARLY CHILDHOOD
4
DEVELOPMENT.
5
(a) IN GENERAL.-The Secretary shall use amounts
6 made available under section 101(d)(2) for a fiscal year
7 for the following purposes:
8
(1) Improving the affordability of child care
9
through increased appropriations for child care
10
under the Child Care and Development Block Grant
11
Act of 1990 (42 U.S.C. 9858 et seq.).
12
(2) Enhancing the quality of child care and
13
early childhood development through the provision of
14
grants to States under the Child Care and Develop-
15
ment Block Grant Act of 1990 (42 U.S.C. 9858 et
16
seq.).
17
(3) Expanding the availability and quality of
18
school-age care through the provision of grants to
19
States under the Child Care and Development Block
20
Grant Act of 1990 (42 U.S.C. 9858 et seq.).
21
(4) Assisting young children by providing
22
grants to local collaboratives under the Child Care
23
and Development Block Grant Act of 1990 (42
24
U.S.C. 9858 et seq.) for the purpose of improving
25
parent education and supportive services, strength-
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1
ening the quality of child care, improving health
2
services, and improving services for children with
3
disabilities.
4
(b) SUPPLEMENT NOT SUPPLANT.-Amounts made
5 available to a State under this section shall be used to
6 supplement and not supplant other Federal, State and
7 local funds provided for programs that serve the health
8 and developmental needs of children. Amounts provided
9 to the State under any of the provisions of law referred
10 to in this section shall not be reduced solely as a result
11 of the availability of funds under this section.
12 SEC. 132. IMPROVING ELEMENTARY EDUCATION.
13
(a) GRANTS AUTHORIZED.-The Secretary of Edu-
14 cation shall use amounts made available under section
15 101(d)(3) for a fiscal year to award grants to States and
16 local educational agencies to train, recruit and hire ele-
17 mentary school teachers for the purpose of reducing the
18 average class size for students in grades 1 through 3 to
19 not more than 18 students per teacher.
20
(b) REGULATIONS REQUIRED.-The Secretary of
21 Education, not later than March 1, 1999, shall promulgate
22 regulations as the Secretary determines necessary to assist
23 States and school districts in providing smaller class sizes
24 with qualified teachers in early grades. Such regulations
25 may include provisions relating to—
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1
(1) the use of funds by the State, including the
2
awarding of grants to local educational agencies;
3
(2) teacher preparation and certification; and
4
(3) accountability for improved student achieve-
5
ment.
6
(c) STATE PLAN.-
7
(1) IN GENERAL.-Each State desiring a grant
8
under this section shall submit to the Secretary of
9
Education a State plan at such time, in such man-
10
ner, and accompanied by such information as the
11
Secretary may require.
12
(2) CONTENTS.-Each State plan shall dem-
13
onstrate to the satisfaction of the Secretary of Edu-
14
cation that-
15
(A) the activities assisted by the State with
16
funds made available under this section will be
17
conducted in compliance with any regulations
18
promulgated under subsection (a);
19
(B) the State will use the funds made
20
available under this section to reduce class size
21
for students in grades 1 through 3 in elemen-
22
tary schools throughout the State, focusing on
23
using the funds to train, recruit, and hire
24
teachers for elementary schools serving commu-
25
nities with the least available resources for such
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1
activities and the largest class sizes in those
2
grades; and
3
(C) of the funds that are made available to
4
the State under this section, the State will
5
make available to each local educational agency
6
that serves children in grades 1 through 3 and
7
in which at least 30 percent of the children are
8
from families below the Federal poverty level, at
9
least as great a percentage of such funds as the
10
percentage of funds provided to that local edu-
11
cational agency as compared to other local edu-
12
cational agencies in the State under part A of
13
title I of the Elementary and Secondary Edu-
14
cation Act of 1965.
15
(3) APPROVAL.-The Secretary shall approve a
16
State plan submitted under paragraph (1) if the
17
State plan meets the requirements of this sub-
18
section.
19 SEC. 133. INCREASED ENROLLMENT OF CHILDREN WITH
20
THE MEDICAID AND STATE CHILDREN'S
21
HEALTH INSURANCE PROGRAMS.
22
(a) TRANSITIONAL INCREASED FEDERAL MATCHING
23 RATE FOR INCREASED MEDICAID ADMINISTRATIVE
24 Costs.-Section 1931(h) of the Social Security Act (42
25 U.S.C. 1396u-1(h)) is amended-
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1
(1) in paragraph (2), by striking "attributable
2
to" and all that follows and inserting "attributable
3
to-
4
"(A) administrative costs of eligibility de-
5
terminations that (but for the enactment of this
6
section) would not be incurred; and
7
"(B) outreach activities to enroll uninsured
8
children in a State plan approved under this
9
title or title XXI."; and
10
(2) by striking paragraphs (3) and (4) and in-
11
serting the following:
12
"(3) LIMITATION.-
13
"(A) IN GENERAL.-Beginning with fiscal
14
year 1998, the total amount of additional Fed-
15
eral funds that are expended as a result of the
16
application of this subsection shall not exceed
17
$525,000,000.
18
"(B) AVAILABILITY OF APPROPRIATION.-
19
Any amount appropriated in accordance with
20
this paragraph shall remain available until ex-
21
pended.
22
"(C) EQUITABLE DISTRIBUTION
OF
23
FUNDS.-In applying this paragraph, the Sec-
24
retary shall ensure the equitable distribution of
25
additional funds among the States.".
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1
(b) MEDICAID PRESUMPTIVE ELIGIBILITY FOR Low-
2 INCOME CHILDREN.-
3
(1) IN GENERAL.-Section 1920A(b)(3) of the
4
Social Security Act (42 U.S.C. 1396r-1a(b)(3)) is
5
amended-
6
(A) in subparagraph (A)(i))-
7
(i) by striking "or (II)" and inserting
8
", " (II)"; and
9
(ii) by inserting ", or (III) is an ele-
10
mentary school or secondary school, as
11
such terms are defined in section 14101 of
12
the Elementary and Secondary Education
13
Act of 1965 (20 U.S.C. 8801), is a child
14
care resource and referral agency, a child
15
support enforcement agency, or is author-
16
ized to determine the eligibility of a child
17
for obtaining child health assistance under
18
title XXI that is in the form of coverage
19
that meets the requirements of section
20
2103" before the semicolon; and
21
(B) in subparagraph (C), by striking "lim-
22
iting the classes of" and inserting "imposing
23
limitations on".
24
(2) RETROACTIVITY.-The amendments made
25
by paragraph (1) take effect as if included in the en-
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1
actment of section 4912 of the Balanced Budget Act
2
of 1997 (Public Law 105-33; 111 Stat. 571).
3
(c) MEDICAID EXPENDITURES COUNTED AGAINST
4 STATE ALLOTMENTS UNDER TITLE XXI.-
5
(1) IN GENERAL-Section 2104(d) of the So-
6
cial Security Act (42 U.S.C. 1397dd(d)) is amended
7
to read as follows:
8
"(d) CERTAIN MEDICAID EXPENDITURES COUNTED
9 AGAINST INDIVIDUAL STATE ALLOTMENTS.-The amount
10 of the allotment otherwise provided to a State under sub-
11 section (b) or (c) for a fiscal year shall be reduced by the
12 amount (if any) of the payments made to that State under
13 section 1903(a) for expenditures claimed by the State dur-
14 ing such fiscal year that is attributable to the provision
15 of medical assistance to a child for which payment is made
16 under section 1903(a)(1) on the basis of an enhanced
17 FMAP under the fourth sentence of section 1905(b).".
18
(2) RETROACTIVITY.-The amendment made by
19
paragraph (1) takes effect as if included in the en-
20
actment of section 4901 of the Balanced Budget Act
21
of 1997 (Public Law 105-33; 111 Stat. 552).
22
(d) MEDICAID AND STATE CHILDREN'S HEALTH IN-
23 SURANCE PROGRAM ELIGIBILITY FOR LEGAL IMMIGRANT
24 CHILDREN WHO ENTERED THE UNITED STATES AFTER
25 AUGUST 1996.-
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1
(1) EXEMPTION FROM 5-YEAR BAN.-Section
2
403 of the Personal Responsibility and Work Oppor-
3
tunity Reconciliation Act of 1996 (8 U.S.C. 1613),
4
as amended by sections 5302(c)(1)(B) and 5303(c)
5
of the Balanced Budget Act of 1997 (Public Law
6
105-33; 111 Stat. 599, 600), is amended by adding
7
at the end the following:
8
"(e) MEDICAID AND SCHIP BENEFITS FOR CERTAIN
9 CHILDREN.-Notwithstanding any other provision of law,
10 the limitations under section 401(a) and subsection (a)
11 shall not apply to an individual who is under 19 years of
12 age and who lawfully entered the United States after Au-
13 gust 22, 1996, but only with respect to the eligibility of
14 that individual for-
15
"(1) child health assistance under title XXI of
16
the Social Security Act (42 U.S.C. 1397aa et seq.);
17
and
18
"(2) medical assistance under title XIX of such
19
Act (42 U.S.C. 1396 et seq.), if the individual is an
20
optional targeted low-income child described in sec-
21
tion 1905(u)(2)(B) of such Act (42 U.S.C.
22
1396d(u)(2)(B)).".
23
(2) NONAPPLICATION OF STATE AUTHORITY TO
24
DETERMINE ELIGIBILITY FOR MEDICAID.-Section
25
402(b)(2) of the Personal Responsibility and Work
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1
Opportunity Reconciliation Act of 1996 (8 U.S.C.
2
1612(b)(2)), as amended by sections 5303(b) and
3
5305(b) of the Balanced Budget Act of 1997 (Public
4
Law 105-33; 111 Stat. 600, 601), is amended—
5
(A) in the matter preceding subparagraph
6
(A), by striking "Qualified" and inserting "Ex-
7
cept as provided in subparagraphs (A), (E),
8
(F), and (G), qualified"; and
9
(B) by adding at the end the following:
10
"(G) MEDICAID EXCEPTION FOR CERTAIN
11
CHILDREN.-With respect to eligibility for bene-
12
fits for the program described in section
13
403(e)(2), paragraph (1) shall not apply to any
14
individual described in that section.".
15
(3) RETROACTIVITY.-The amendments made
16
by paragraphs (1) and (2) take effect as if included
17
in the enactment of the Balanced Budget Act of
18
1997 (Public Law 105-33; 111 Stat. 251).
19
(e) ANNUAL PERFORMANCE BONUS FOR REDUCTION
20 IN MEDICAID ELIGIBLE BUT UNENROLLED CHILDREN..-
21 Section 1903 of the Social Security Act (42 U.S.C. 1396b)
22 is amended by adding at the end the following:
23
"(x) PERFORMANCE BONUS FOR REDUCTION IN ELI-
24 GIBLE BUT UNENROLLED CHILDREN.-
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1
"(1) PERFORMANCE BONUS.-Beginning with
2
fiscal year 1999, in addition to the amounts paid to
3
a State under subsection (a), the Secretary shall pay
4
to each State that has an approved plan under this
5
title an amount equal to the performance bonus de-
6
termined under paragraph (2).
7
"(2) PERFORMANCE BONUS.-
8
"(A) FORMULA.-The performance bonus
9
for a State for a fiscal year is equal to the
10
product of-
11
"(i) the excess baseline enrollment for
12
the State for the fiscal year;
13
"(ii) the average per child expendi-
14
tures by the State under this title for the
15
fiscal year; and
16
"(iii) the enhanced FMAP for the
17
State for the fiscal year described in sec-
18
tion 2105(b).
19
"(B) DETERMINATION OF THE EXCESS
20
BASELINE ENROLLMENT.-
21
"(i) IN GENERAL.-For purposes of
22
subparagraph (A)(i), the excess baseline
23
enrollment for a State for a fiscal year is
24
the difference between (I) the actual num-
25
ber of full year equivalent children enrolled
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1
under the State plan and (II) the baseline
2
number of full year equivalent children
3
that would be enrolled under the State
4
plan in the absence of the performance
5
bonus outreach efforts of the State.
6
"(ii) DETERMINATION OF THE BASE-
7
LINE NUMBER OF FULL YEAR EQUIVALENT
8
CHILDREN.-For purposes of clause (i)(II),
9
the baseline number of full year equivalent
10
children that would be enrolled under the
11
State plan in the absence of the perform-
12
ance bonus outreach efforts of the State
13
is-
14
"(I) in the case of fiscal year
15
1999, the actual number of full year
16
equivalent children enrolled under the
17
State plan in fiscal year 1998, in-
18
creased by the national percentage in-
19
crease for fiscal year 1999 in the
20
number of full year equivalent chil-
21
dren enrolled in all State plans under
22
this title, as projected by the Congres-
23
sional Budget Office in January 1998;
24
and
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1
"(II) in the case of any succeed-
2
ing fiscal year, the baseline number of
3
full year equivalent children that
4
would be enrolled under the State
5
plan in the absence of the perform-
6
ance bonus outreach efforts of the
7
State determined for the preceding
8
fiscal year, increased by the national
9
percentage increase for that succeed-
10
ing fiscal year in the number of full
11
year equivalent children enrolled in all
12
State plans under this title, as pro-
13
jected by the Congressional Budget
14
Office in January 1998.
15
"(C) DETERMINATION OF AVERAGE PER
16
CHILD EXPENDITURES.-For purposes of sub-
17
paragraph (A)(ii), the average per child expend-
18
itures by a State under this title for a fiscal
19
year is-
20
"(i) the total amount paid to the
21
State under subsection (a)(1) that is at-
22
tributable to medical assistance provided to
23
children under the State plan; divided by
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1
"(ii) the actual number of full year
2
equivalent children enrolled under the
3
State plan in that fiscal year.
4
"(3) DATA REQUIREMENTS.-Each State shall
5
submit to the Secretary such data, at such time and
6
in such manner, as the Secretary determines is nec-
7
essary to make the payments required under this
8
subsection. The Secretary shall ensure that data is
9
provided under this subsection in a manner that is
10
consistent with other data reporting requirements
11
for information required to be submitted by a State
12
under this title and title XXI, and that avoids dupli-
13
cation of reporting requirements.
14
"(4) STATES WITH SIGNIFICANTLY HIGHER IN-
15
CREASED ACTUAL ENROLLMENT THAN THE EX-
16
PECTED NATIONAL INCREASE.-For any fiscal year,
17
if a State's actual full year equivalent children en-
18
rollment percentage increase over the preceding fis-
19
cal year is at least twice the estimated national per-
20
centage increase in such enrollment for that fiscal
21
year, as projected by the Congressional Budget Of-
22
fice in January 1998, the State shall submit such
23
additional information as the Secretary determines
24
is necessary to verify that the increase is the result
25
of the State reducing the number of unenrolled chil-
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1
dren who are eligible for medical assistance under
2
this title in the State.
3
"(5) TIMING OF PERFORMANCE BONUS PAY-
4
MENTS; RECONCILIATION.-The Secretary shall pay
5
the performance bonuses required under this sub-
6
section for a fiscal year not later than September 30
7
of the succeeding fiscal year based on reporting data
8
that reflects each State's actual number of full year
9
equivalent children enrolled under the State plan
10
and average per child expenditures. A State shall
11
provide the Secretary with access to any records or
12
information relevant to the payment of a perform-
13
ance bonus under this subsection for the purposes of
14
review or audit.
15
"(6) WAIVERS.-The provisions of this sub-
16
section apply to a State providing medical assistance
17
under this title under waiver authority in the same
18
manner as they apply to a State with an approved
19
plan under this title."
20 SEC. 134. MEDICARE CANCER PATIENT DEMONSTRATION
21
PROJECT; EVALUATION AND REPORT TO
22
CONGRESS.
23
(a) ESTABLISHMENT.-The Secretary shall establish
24 a 3-year demonstration project which provides for pay-
25 ment under the medicare program under title XVIII of
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1 the Social Security Act (42 U.S.C. 1395 et seq.) of routine
2 patient care costs—
3
(1) which are provided to an individual diag-
4
nosed with cancer and enrolled in the medicare pro-
5
gram under such title as part of the individual's par-
6
ticipation in an approved clinical trial program; and
7
(2) which are not otherwise eligible for payment
8
under such title for individuals who are entitled to
9
benefits under such title.
10
(b) APPLICATION.-The beneficiary cost sharing pro-
11 visions under the medicare program, such as deductibles,
12 coinsurance, and copayment amounts, shall apply to any
13 individual participating in a demonstration project con-
14 ducted under this section.
15
(c) APPROVED CLINICAL TRIAL PROGRAM.-For
16 purposes of this section, the term "approved clinical trial
17 program" means a clinical trial program which is ap-
18 proved by-
19
(1) the National Institutes of Health;
20
(2) a National Institutes of Health cooperative
21
group or a National Institutes of Health center;
22
(3) the Food and Drug Administration (in the
23
form of an investigational new drug or device exemp-
24
tion);
25
(4) the Department of Veterans Affairs;
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1
(5) the Department of Defense; or
2
(6) a qualified nongovernmental research entity
3
identified in the guidelines issued by the National
4
Institutes of Health for center support grants.
5
(d) ROUTINE PATIENT CARE Costs.-
6
(1) IN GENERAL.-For purposes of this section,
7
"routine patient care costs" shall include the costs
8
associated with the provision of items and services
9
that-
10
(A) would otherwise be covered under the
11
medicare program if such items and services
12
were not provided in connection with an ap-
13
proved clinical trial program; and
14
(B) are furnished according to the design
15
of an approved clinical trial program.
-16
(2) EXCLUSION.-For purposes of this section,
17
"routine patient care costs" shall not include the
18
costs associated with the provision of-
19
(A) an investigational drug or device, un-
20
less the Secretary has authorized the manufac-
21
turer of such drug or device to charge for such
22
drug or device; or
23
(B) any item or service supplied without
24
charge by the sponsor of the approved clinical
25
trial program.
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1
(e) STUDY.-The Secretary shall study the impact on
2 the medicare program under title XVIII of the Social Se-
3 curity Act of covering routine patient care costs for indi-
4 viduals with a diagnosis of cancer and other diagnoses,
5 who are entitled to benefits under such title and who are
6 enrolled in an approved clinical trial program.
7
(f) REPORT To CONGRESS.-Not later than 30
8 months after the date of enactment of this Act, the Sec-
9 retary shall submit a report to Congress that contains a
10 detailed description of the results of the study conducted
11 under subsection (e) including recommendations regarding
12 the extension and expansion of the demonstration project
13 conducted under this section.
14
(g) FUNDING.-The shall use amounts made avail-
15 able under section 101(d)(8)(A) for a fiscal year to carry
16 out this section.