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    "ocrText": "\"(i) is a participating tobacco producer (as defined in section 1002 of the LEAF Act); or\n(ii) is otherwise actively engaged in the production of tobacco;\n(B) a spouse, son, daughter, stepson, or stepdaughter of an individual described in\nsubparagraph (A);\n'(C) an individual\n(i) who was a brother, sister, stepbrother, stepsister, son-in-law, or daughter-in-law of an\nindividual described in subparagraph (A); and\n`(ii) whose principal place of residence was the home of the individual described in\nsubparagraph (A); or\n`(D) an individual who was a dependent (within the meaning of section 152 of the Internal\nRevenue Code of 1986) of an individual described in subparagraph (A).\n`(2) Administration On request, the Secretary of Agriculture shall provide to the Secretary\nsuch information as is necessary to carry out this subsection.\n``(c) Satisfactory Progress\n-\n\"(1) In general For the purpose of subsection (a)(3), a student is maintaining satisfactory\nprogress if\n(A) the institution at which the student is in attendance reviews the progress of the student at\nthe end of each academic year, or its equivalent, as determined by the institution; and\n`(B) the student has at least a cumulative C average or its equivalent, or academic standing\nconsistent with the requirements for graduation, as determined by the institution, at the end of the\nsecond such academic year.\n``(2) Special rule Whenever a student fails to meet the eligibility requirements of subsection\n(a)(3) as a result of the application of this subsection and subsequent to that failure the student\nhas academic standing consistent with the requirements for graduation, as determined by the\ninstitution, for any grading period, the student may, subject to this subsection, again be eligible\nunder subsection (a)(3) for a grant under this subpart.\n``(3) Waiver Any institution of higher education at which the student is in attendance may\nwaive paragraph (1) or (2) for undue hardship based on_\n(A) the death of a relative of the student;\n``(B) the personal injury or illness of the student; or\n``(C) special circumstances as determined by the institution.\n``(d) Students Who Are Not Secondary School Graduates In order for a student who does not\nhave a certificate of graduation from a school providing secondary education, or the recognized\nequivalent of the certificate, to be eligible for any assistance under this subpart, the student shall\nmeet either 1 of the following standards:\n\"(1) Examination The student shall take an independently administered examination and\nshall achieve a score, specified by the Secretary, demonstrating that the student can benefit from\nthe education or training being offered. The examination shall be approved by the Secretary on\nthe basis of compliance with such standards for development, administration, and scoring as the\nSecretary may prescribe in regulations.\n``(2) Determination The student shall be determined as having the ability to benefit from the\neducation or training in accordance with such process as the State shall prescribe. Any such\nprocess described or approved by a State for the purposes of this section shall be effective 6\nmonths after the date of submission to the Secretary unless the Secretary disapproves the process.\nIn determining whether to approve or disapprove the process, the Secretary shall take into\naccount the effectiveness of the process in enabling students without secondary school diplomas\nor the recognized equivalent to benefit from the instruction offered by institutions utilizing the\nprocess, and shall also take into account the cultural diversity, economic circumstances, and\neducational preparation of the populations served by the institutions.\n``(e) Special Rule for Correspondence Courses ._A student shall not be eligible to receive a\ngrant under this subpart for a correspondence course unless the course is part of a program\nleading to an associate, bachelor, or graduate degree.\n``(f) Courses Offered Through Telecommunications\n-\n\"(1) Relation to correspondence courses ._A student enrolled in a course of instruction at an\neligible institution of higher education (other than an institute or school that meets the definition\nin section 521(4)(C) of the Carl D. Perkins Vocational and Applied Technology Education Act\n(20 U.S.C. 2471(4)(C))) that is offered in whole or in part through telecommunications and leads\nto a recognized associate, bachelor, or graduate degree conferred by the institution shall not be\nconsidered to be enrolled in correspondence courses unless the total amount of\ntelecommunications and correspondence courses at the institution equals or exceeds 50 percent\nof the courses.\n``(2) Restriction or reductions of financial aid A student's eligibility to receive a grant under\nthis subpart may be reduced if a financial aid officer determines under the discretionary authority\nprovided in section 479A that telecommunications instruction results in a substantially reduced\ncost of attendance to the student.\n``(3) Definition For the purposes of this subsection, the term 'telecommunications' means the\nuse of television, audio, or computer transmission, including open broadcast, closed circuit,\ncable, microwave, or satellite, audio conferencing, computer conferencing, or video cassettes or\ndiscs, except that the term does not include a course that is delivered using video cassette or disc\nrecordings at the institution and that is not delivered in person to other students of that\ninstitution.\n``(g) Study Abroad Nothing in this subpart shall be construed to limit or otherwise prohibit\naccess to study abroad programs approved by the home institution at which a student is enrolled.\nAn otherwise eligible student who is engaged in a program of study abroad approved for\nacademic credit by the home institution at which the student is enrolled shall be eligible to\nreceive a grant under this subpart, without regard to whether the study abroad program is\nrequired as part of the student's degree program.\n``(h) Verification of Social Security Number The Secretary, in cooperation with the\nCommissioner of Social Security, shall verify any social security number provided by a student\nto an eligible institution under subsection (a)(5)(B) and shall enforce the following conditions:\n``(1) Pending verification Except as provided in paragraphs (2) and (3), an institution shall\nnot deny, reduce, delay, or terminate a student's eligibility for assistance under this subpart\nbecause social security number verification is pending.\n``(2) Denial or termination If there is a determination by the Secretary that the social security\nnumber provided to an eligible institution by a student is incorrect, the institution shall deny or\nterminate the student's eligibility for any grant under this subpart until such time as the student\nprovides documented evidence of a social security number that is determined by the institution to\nbe correct.\n(3) Construction Nothing in this subsection shall be construed to permit the Secretary to\ntake any compliance, disallowance, penalty, or other regulatory action against_\n`(A) any institution of higher education with respect to any error in a social security number,\nunless the error was a result of fraud on the part of the institution; or\n`(B) any student with respect to any error in a social security number, unless the error was a\nresult of fraud on the part of the student.\".\nSubtitle D_Immunity\nSEC. 1041. GENERAL IMMUNITY FOR TOBACCO PRODUCERS AND\nTOBACCOWAREHOUSE OWNERS.\nNotwithstanding any other provision of this title, a participating tobacco producer, tobacco-\nrelated growers association, or tobacco warehouse owner or employee may not be subject to\nliability in any Federal or State court for any cause of action resulting from the failure of any\ntobacco product manufacturer, distributor, or retailer to comply with the National Tobacco Policy\nand Youth Smoking Reduction Act.\nTITLE XI_MISCELLANEOUS PROVISIONS\nSubtitle A_International Provisions\nSEC. 1101. POLICY.\nIt shall be the policy of the United States government to pursue bilateral and multilateral\nagreements that include measures designed to_\n(1) restrict or eliminate tobacco advertising and promotion aimed at children;\n(2) require effective warning labels on packages and advertisements of tobacco products;\n(3) require disclosure of tobacco ingredient information to the public;\n(4) limit access to tobacco products by young people;\n(5) reduce smuggling of tobacco and tobacco products;\n(6) ensure public protection from environmental tobacco smoke; and\n(7) promote tobacco product policy and program information sharing between or among the\nparties to those agreements.\nSEC. 1102. TOBACCO CONTROL NEGOTIATIONS.\nThe President, in consultation with the Secretary of State, the Secretary of Health and Human\nServices, and the United States Trade Representative, shall_\n(1) act as the lead negotiator for the United States in the area of international tobacco control;\n(2) coordinate among U.S. foreign policy and trade negotiators in the area of effective\ninternational tobacco control policy;\n(3) work closely with non-governmental groups, including public health groups; and\n(4) report annually to the Congress on the progress of negotiations to achieve effective\ninternational tobacco control policy.\nSEC. 1103. REPORT TO CONGRESS.\nNot later than 150 days after the enactment of this Act and annually thereafter, the Secretary of\nHealth and Human Services shall transmit to the Congress a report identifying the international\nfora wherein international tobacco control efforts may be negotiated.\nSEC. 1104. FUNDING.\nThere are authorized such sums as are necessary to carry out the provisions of this subtitle.\nSEC. 1105. PROHIBITION OF FUNDS TO FACILITATE THE EXPORTATION OR\nPROMOTION OFTOBACCO.\n(a) In General. No officer, employee, department, or agency of the United States may promote\nthe sale or export of tobacco or tobacco products, or seek the reduction or removal by any foreign\ncountry of restrictions on the marketing of tobacco or tobacco products, unless such restrictions\nare not applied equally to all tobacco and tobacco products. The United States Trade\nRepresentative shall consult with the Secretary regarding inquiries, negotiations, and\nrepresentations with respect to tobacco and tobacco products, including whether proposed\nrestrictions are reasonable protections of public health.\n(b) Notification. Whenever such inquiries, negotiations, or representations are made, the\nUnited States Trade Representative shall notify the Congress within 10 days afterwards regarding\nthe nature of the inquiry, negotiation, or representation.\nSEC. 1106. HEALTH LABELING OF TOBACCO PRODUCTS FOR EXPORT.\n(a) In General.\n(1) Exports must be labeled. It shall be unlawful for any United States person, directly or\nthrough approval or facilitation of a transaction by a foreign person, to make use of the United\nStates mail or of any instrument of interstate commerce to authorize or contribute to the export\nfrom the United States any tobacco product unless the tobacco product packaging contains a\nwarning label that_\n(A) complies with Federal requirements for labeling of similar tobacco products manufactured,\nimported, or packaged for sale or distribution in the United States; or\n(B) complies with the specific health hazard warning labeling requirements of the foreign\ncountry to which the product is exported.\n(2) U.S. requirements apply if the destination country does not require specific health hazard\nwarning labels._ Subparagraph (B) of paragraph (1) does not apply to exports to a foreign\ncountry that does not have any specific health hazard warning label requirements for the tobacco\nproduct being exported.\n(b) United States Person Defined._ For purposes of this section, the term \"United States\nperson\" means_\n(1) an individual who is a citizen, national, or resident of the United States; and\n(2) a corporation, partnership, association, joint-stock company, business trust, unincorporated\norganization, or sole proprietorship which has its principal place of business in the United States.\n(c) Report to Congress on Enforcement; Feasibility Regulations._\n(1) The president. The President shall_\n(A) report to the Congress within 90 days after the date of enactment of this Act_\n(i) regarding methods to ensure compliance with subsection (a); and\n(ii) listing countries whose health warnings related to tobacco products are substantially similar\nto those in the United States; and\n(B) promulgate regulations within 1 year after the date of enactment of this Act that will ensure\ncompliance with subsection (a).\n(2) The secretary._ The Secretary shall determine through regulation the feasibility and\npracticability of requiring health warning labeling in the language of the country of destination\nweighing the health and other benefits and economic and other costs. To the greatest extent\npracticable, the Secretary should design a system that requires the language of the country of\ndestination while minimizing the dislocative effects of such a system.\nSEC. 1107. INTERNATIONAL TOBACCO CONTROL AWARENESS.\n(a) Establishment of International Tobacco Control Awareness. The Secretary is authorized to\nestablish an international tobacco control awareness effort. The Secretary shall_\n(1) promote efforts to share information and provide education internationally about the health,\neconomic, social, and other costs of tobacco use, including scientific and epidemiological data\nrelated to tobacco and tobacco use and enhancing countries' capacity to collect, analyze, and\ndisseminating such data;\n(2) promote policies and support and coordinate international efforts, including international\nagreements or arrangements, that seek to enhance the awareness and understanding of the costs\nassociated with tobacco use;\n(3) support the development of appropriate governmental control activities in foreign countries,\nsuch as assisting countries to design, implement, and evaluate programs and policies used in the\nUnited States or other countries; including the training of United States diplomatic and\ncommercial representatives outside the United States;\n(4) undertake other activities as appropriate in foreign countries that help achieve a reduction of\ntobacco use;\n(5) permit United States participation in annual meetings of government and non-government\nrepresentatives concerning international tobacco use and efforts to reduce tobacco use;\n(6) promote mass media campaigns, including paid counter-tobacco advertisements to reverse\nthe image appeal of pro-tobacco messages, especially those that glamorize and \"Westernize\"\ntobacco use to young people; and\n(7) create capacity and global commitment to reduce international tobacco use and prevent youth\nsmoking, including the use of models of previous public health efforts to address global health\nproblems.\n(b) Activities.\n(1) In general._ The activities under subsection (a) shall include_\n(A) public health and education programs;\n(B) technical assistance;\n(C) cooperative efforts and support for related activities of multilateral organization and\ninternational organizations;\n(D) training; and\n(E) such other activities that support the objectives of this section as may be appropriate.\n(2) Grants and contracts. In carrying out this section, the Secretary shall make grants to, enter\ninto and carry out agreements with, and enter into other transactions with any individual,\ncorporation, or other entity, whether within or outside the United States, including governmental\nand nongovernmental organizations, international organizations, and multilateral organizations.\n(3) Transfer of funds to agencies._ The Secretary may transfer to any agency of the United\nStates any part of any funds appropriated for the purpose of carrying out this section. Funds\nauthorized to be appropriated by this section shall be available for obligation and expenditure in\naccordance with the provisions of this section or in accordance with the authority governing the\nactivities of the agency to which such funds are transferred.\n(c) Authorization of Appropriations._ There are authorized to be appropriated, from the\nNational Tobacco Trust Fund, to carry out the provisions of this section, including the\nadministrative costs incurred by any agency of the United States in carrying out this section,\n$350,000,000 for each of the fiscal years 1999 through 2004, and such sums as may be necessary\nfor each fiscal year thereafter. A substantial amount of such funds shall be granted to non-\ngovernmental organizations. Any amount appropriated pursuant to this authorization shall remain\navailable without fiscal year limitation until expended.\nSubtitle B_Anti-smuggling Provisions\nSEC. 1131. DEFINITIONS.\n(a) Incorporation of Certain Definitions. In this subtitle, the terms ``cigar\", ``cigarette\",\n``person\", ``pipe tobacco\", ``roll-your-own tobacco\", ``smokeless tobacco\", \"State\", \"tobacco\nproduct\", and \"United States shall have the meanings given such terms in sections 5702(a),\n5702(b), 7701(a)(1), 5702(o), 5702(n)(1), 5702(p), 3306(j)(1), 5702(c), and 3306(j)(2)\nrespectively of the Internal Revenue Code of 1986.\n(b) Other Definitions. In this subtitle:\n(1) Affiliate. The term ``affiliate\" means any one of 2 or more persons if 1 of such persons has\nactual or legal control, directly or indirectly, whether by stock ownership or otherwise, of other\nor others of such persons, and any 2 or more of such persons subject to common control, actual\nor legal, directly or indirectly, whether by stock ownership or otherwise.\n(2) Interstate or Foreign Commerce. The term ``interstate or foreign commerce\" means any\ncommerce between any State and any place outside thereof, or commerce within any Territory or\nthe District of Columbia, or between points within the same State but through any place outside\nthereof.\n(3) Secretary._ The term ``Secretary\" means the Secretary of the Treasury.\n(4) Package._ The term ``package\" means the innermost sealed container irrespective of the\nmaterial from which such container is made, in which a tobacco product is placed by the\nmanufacturer and in which such tobacco product is offered for sale to a member of the general\npublic.\n(5) Retailer. The term \"retailer\" means any dealer who sells, or offers for sale, any tobacco\nproduct at retail. The term \"retailer\" includes any duty free store that sells, offers for sale, or\notherwise distributes at retail in any single transaction 30 or less packages, or it equivalent for\nother tobacco products.\n(6) Exporter._ The term ``exporter\" means any person engaged in the business of exporting\ntobacco products from the United States for purposes of sale or distribution; and the term\n\"`licensed exporter\" means any such person licensed under the provisions of this subtitle. Any\nduty-free store that sells, offers for sale, or otherwise distributes to any person in any single\ntransaction more than 30 packages of cigarettes, or its equivalent for other tobacco products as\nthe Secretary shall by regulation prescribe, shall be deemed an ``exporter\" under this subtitle.\n(7) Importer._ The term ``importer\" means any person engaged in the business of importing\ntobacco products into the United States for purposes of sale or distribution; and the term\n\"`licensed importer\" means any such person licensed under the provisions of this subtitle.\n(8) Intentionally._ The term ``intentionally\" means doing an act, or omitting to do an act,\ndeliberately, and not due to accident, inadvertence, or mistake. An intentional act does not\nrequire that a person knew that his act constituted an offense.\n(9) Manufacturer. The term ``manufacturer\" means any person engaged in the business of\nmanufacturing a tobacco product for purposes of sale or distribution, except that such term shall\nnot include a person who manufactures less than 30,000 cigarettes, or its equivalent as\ndetermined by regulations, in any twelve month period;; and the term ``licensed manufacturer\"\nmeans any such person licensed under the provisions of this subtitle, except that such term shall\nnot include a person who produces cigars, cigarettes, smokeless tobacco, or pipe tobacco solely\nfor his own personal consumption or use.\n(10) Wholesaler. The term \"wholesaler\" means any person engaged in the business of\npurchasing tobacco products for resale at wholesale, or any person acting as an agent or broker\nfor any person engaged in the business of purchasing tobacco products for resale at wholesale,\nand the term ``licensed wholesaler\" means any such person licensed under the provisions of this\nsubtitle.\nSEC. 1132. TOBACCO PRODUCT LABELING REQUIREMENTS.\n(a) In General. It is unlawful for any person to sell, or ship or deliver for sale or shipment, or\notherwise introduce in interstate or foreign commerce, or to receive therein, or to remove from\nCustoms custody for use, any tobacco product unless such product is packaged and labeled in\nconformity with this section.\n(b) Labeling._\n(1) Identification. Not later than 1 year after the date of enactment of this Act, the Secretary\nshall promulgate regulations that require each manufacturer or importer of tobacco products to\nlegibly print a unique serial number on all packages of tobacco products manufactured or\nimported for sale or distribution. The serial number shall be designed to enable the Secretary to\nidentify the manufacturer or importer of the product, and the location and date of manufacture or\nimportation. The Secretary shall determine the size and location of the serial number.\n(2) Marking requirements for exports._ Each package of a tobacco product that is exported shall\nbe marked for export from the United States. The Secretary shall promulgate regulations to\ndetermine the size and location of the mark and under what circumstances a waiver of this\nparagraph shall be granted.\n(c) Prohibition on Alteration. It is unlawful for any person to alter, mutilate, destroy,\nobliterate, or remove any mark or label required under this subtitle upon a tobacco product in or\naffecting commerce, except pursuant to regulations of the Secretary authorizing relabeling for\npurposes of compliance with the requirements of this section or of State law.\nSEC. 1133. TOBACCO PRODUCT LICENSES.\n(a) In General. Not later than 1 year after the date of enactment of this Act, the Secretary shall\nestablish a program under which tobacco product licenses are issued to manufacturers, importers,\nexporters, and wholesalers of tobacco products.\n(b)(1) Eligibility._ A person is entitled to a license unless the Secretary finds\n(A) that such person has been previously convicted of a Federal crime relating to tobacco,\nincluding the taxation thereof;\n(B) that such person has, within 5 years prior to the date of application, been previously\nconvicted of any felony under Federal or State law; or\n(C) that such person is, by virtue of his business experience, financial standing, or trade\nconnections, not likely to maintain such operations in conformity with Federal law.\n(2) Conditions. The issuance of a license under this section shall be conditioned upon the\ncompliance with the requirements of this subtitle, all Federal laws relating to the taxation of\ntobacco products, chapter 114 of title 18, United States Code, and any regulations issued\npursuant to such statutes.\n(c) Revocation, Suspension, and Annulment. The program established under subsection (a)\nshall permit the Secretary to revoke, suspend, or annul a license issued under this section if the\nSecretary determines that the terms or conditions of the license have not been complied with.\nPrior to any action under this subsection, the Secretary shall provide the licensee with due notice\nand the opportunity for a hearing.\n(d) Records and Audits. The Secretary shall, under the program established under subsection\n(a), require all license holders to keep records concerning the chain of custody of the tobacco\nproducts that are the subject of the license and make such records available to the Secretary for\ninspection and audit.\n(e) Retailers. This section does not apply to retailers of tobacco products, except that retailers\nshall maintain records of receipt, and such records shall be available to the Secretary for\ninspection and audit. An ordinary commercial record or invoice will satisfy this requirement\nprovided such record shows the date of receipt, from whom such products were received and the\nquantity of tobacco products received.\nSEC. 1134. PROHIBITIONS.\n(a) Importation and Sale._ It is unlawful, except pursuant to a license issued by the Secretary\nunder this subtitle_\n(1) to engage in the business of importing tobacco products into the United States; or\n(2) for any person so engaged to sell, offer, or deliver for sale, contract to sell, or ship, in or\naffecting commerce, directly or indirectly or through an affiliate, tobacco products so imported.\n(b) Manufacture and sale._ It is unlawful, except pursuant to a license issued by the Secretary\nunder this subtitle_\n(1) to engage in the business of manufacturing, packaging or warehousing tobacco products; or\n(2) for any person so engaged to sell, offer, or deliver for sale, contract to sell, or ship, in or\naffecting commerce, directly or indirectly or through an affiliate, tobacco products SO\nmanufactured, packaged, or warehoused.\n(c) Wholesale. It is unlawful, except pursuant to a license issued by the Secretary under this\nsubtitle_\n(1) to engage in the business of purchasing for resale at wholesale tobacco products, or, as a\nprincipal or agent, to sell, offer for sale, negotiate for, or hold out by solicitation, advertisement,\nor otherwise as selling, providing, or arranging for, the purchase for resale at wholesale of\ntobacco products; or\n(2) for any person so engaged to receive or sell, offer or deliver for sale, contract to sell, or ship,\nin or affecting commerce, directly or indirectly or through an affiliate, tobacco products so\npurchased.\n(d) Exportation._\n(1) In general._ It is unlawful, except pursuant to a license issued by the Secretary under this\nsubtitle_\n(A) to engage in the business of exporting tobacco products from the United States; or\n(B) for any person so engaged to sell, offer, or deliver for sale, contract to sell, or ship, in or\naffecting commerce, directly or indirectly or through an affiliate, tobacco products received for\nexport.\n(2) Report._ Prior to exportation of tobacco products from the United States, the exporter shall\nsubmit a report in such manner and form as the Secretary may by regulation prescribe to enable\nthe Secretary to identify the shipment and assure that it reaches its intended destination.\n(3) Agreements with foreign governments._ The Secretary is authorized to enter into\nagreements with foreign governments to exchange or share information contained in reports\nreceived from exporters of tobacco products if the Secretary believes that such an agreement will\nassist in_\n(A) insuring compliance with any law or regulation enforced or administered by an agency of\nthe United States; or\n(B) preventing or detecting violation of the laws or regulations of a foreign government with\nwhich the Secretary has entered into an agreement.\nSuch information may be exchanged or shared with a foreign government only if the Secretary\nobtains assurances from such government that the information will be held in confidence and\nused only for the purpose of preventing or detecting violations of the laws or regulations of such\ngovernment or the United States and, provided further that no information may be exchanged or\nshared with any government that has violated such assurances.\n(e) Unlawful Acts.\n(1) Unlicensed receipt or delivery. It is unlawful for any licensed importer, licensed\nmanufacturer, or licensed wholesaler intentionally to ship, transport, deliver or receive any\ntobacco products from or to any person other than a person licensed under this chapter or a\nretailer licensed under the provisions of this Act, except a licensed importer may receive foreign\ntobacco products from a foreign manufacturer or a foreign distributor that have not previously\nentered the United States.\n(2) Receipt of re-imported goods._ It is unlawful for any person, except a licensed manufacturer\nor a licensed exporter to receive any tobacco products that have previously been exported and\nreturned to the United States.\n(3) Delivery by exporter. It is unlawful for any licensed exporter intentionally to ship,\ntransport, sell or deliver for sale any tobacco products to any person other than a licensed\nmanufacturer or foreign purchaser.\n(4) Shipment of export-only goods._ It is unlawful for any person other than a licensed exporter\nintentionally to ship, transport, receive or possess, for purposes of resale, any tobacco product in\npackages marked ``FOR EXPORT FROM THE UNITED STATES,\" other than for direct return\nto the manufacturer or exporter for re-packing or for re-exportation.\n(5) False statements. It is unlawful for any licensed manufacturer, licensed exporter, licensed\nimporter, or licensed wholesaler to make intentionally any false entry in, to fail willfully to make\nappropriate entry in, or to fail willfully to maintain properly any record or report that he is\nrequired to keep as required by this chapter or the regulations promulgated thereunder.\n(h) Effective date._ The provisions of this section shall become effective on the date that is 365\ndays after the date of enactment of this Act.\nSEC. 1135. LABELING OF PRODUCTS SOLD BY NATIVE AMERICANS.\nThe Secretary, in consultation with the Secretary of the Interior, shall promulgate regulations\nthat require that each package of a tobacco product that is sold on an Indian reservation (as\ndefined in section 403(9) of the Indian Child Protection and Family Violence Prevention Act (25\nU.S.C. 3202(9)) be labeled as such. Such regulations shall include requirements for the size and\nlocation of the label.\nSEC. 1136. LIMITATION ON ACTIVITIES INVOLVING TOBACCO PRODUCTS IN\nFOREIGNTRADE ZONES.\n(a) Manufacture of tobacco products in Foreign Trade Zones. No person shall manufacture a\ntobacco product in any foreign trade zone, as defined for purposes of the Act of June 18, 1934\n(19 U.S.C. 81 a et seq.).\n(b) Exporting or importing from or into a Foreign Trade Zone._ Any person exporting or\nimporting tobacco products from or into a foreign trade zone, as defined for purposes of the Act\nof June 18, 1934 (19 U.S.C. 81a et seq.), shall comply with the requirements provided in this\nsubtitle. In any case where the person operating in a foreign trade zone is acting on behalf of a\nperson licensed under this subtitle, qualification as an importer or exporter will not be required, if\nsuch person complies with the requirements set forth in section 1134(d)(2) and (3) of this\nsubtitle.\nSEC. 1137. JURISDICTION; PENALTIES; COMPROMISE OF LIABILITY.\n(a) Jurisdiction. The District Courts of the United States, and the United States Court for any\nTerritory, of the District where the offense is committed or of which the offender is an inhabitant\nor has its principal place of business, are vested with jurisdiction of any suit brought by the\nAttorney General in the name of the United States, to prevent and restrain violations of any of the\nprovisions of this subtitle.\n(b) Penalties. Any person violating any of the provisions of this subtitle shall, upon conviction,\nbe fined as provided in section 3571 of title 18, United States Code, imprisoned for not more\nthan 5 years, or both.\n(c) Civil Penalties. The Secretary may, in lieu of referring violations of this subtitle for\ncriminal prosecution, impose a civil penalty of not more than $10,000 for each offense.\n(d) Compromise of Liability._ The Secretary is authorized, with respect to any violation of this\nsubtitle, to compromise the liability arising with respect to a violation of this subtitle\n(1) upon payment of a sum not in excess of $10,000 for each offense, to be collected by the\nSecretary and to be paid into the Treasury as miscellaneous receipts; and\n(2) in the case of repetitious violations and in order to avoid multiplicity of criminal\nproceedings, upon agreement to a stipulation, that the United States may, on its own motion upon\n5 days notice to the violator, cause a consent decree to be entered by any court of competent\njurisdiction enjoining the repetition of such violation.\n(e) Forfeiture.\n(1) The Secretary may seize and forfeit any conveyance, tobacco products, or monetary\ninstrument (as defined in section 5312 of title 31, United States Code) involved in a violation of\nthis subtitle, or any property, real or personal, which constitutes or is derived from proceeds\ntraceable to a violation of this chapter. For purposes of this paragraph, the provisions of\nsubsections (a)(2), (b)(2), and (c) through (j) of section 981 of title 18, United States Code, apply\nto seizures and forfeitures under this paragraph insofar as they are applicable and not inconsistent\nwith the provisions of this subtitle.\n(2) The court, in imposing sentence upon a person convicted of an offense under this subtitle,\nshall order that the person forfeit to the United States any property described in paragraph (1).\nThe seizure and forfeiture of such property shall be governed by subsections (b), (c), and (e)\nthrough (p) of section 853 of title 21, United States Code, insofar as they are applicable and not\ninconsistent with the provisions of this subtitle.\nSEC. 1138. AMENDMENTS TO THE CONTRABAND CIGARETTE TRAFFICKING ACT.\n(a) Definitions._Section 2341 of title 18, United States Code, is amended_\n(1) by striking ``60,000\" and inserting ``30,000\" in paragraph (2); (2) by inserting after\n``payment of cigarette taxes,\" in paragraph (2) the following: ``or in the case of a State that does\nnot require any such indication of tax payment, if the person in possession of the cigarettes is\nunable to provide any evidence that the cigarettes are moving legally in interstate commerce,\";\n(3) by striking ``and\" at the end of paragraph (4);\n(4) by striking ``Treasury.\" in paragraph (5) and inserting \"Treasury;\"; and\n(5) by adding at the end thereof the following:\n``(6) the term `tobacco product' means cigars, cigarettes, smokeless tobacco, roll your own and\npipe tobacco (as such terms are defined in section 5701 of the Internal Revenue Code of 1986);\nand\n(7) the term `contraband tobacco product' means_\n`(A) a quantity in excess of 30,000 of any tobacco product that is manufactured, sold, shipped,\ndelivered, transferred, or possessed in violation of Federal laws relating to the distribution of\ntobacco products; and\nis catas\n`(B) a quantity of tobacco product that is equivalent to an excess of 30,000 cigarettes, as\ndetermined by regulation, which bears no evidence of the payment of applicable State tobacco\ntaxes in the State where such tobacco products are found, if such State requires a stamp,\nimpression, or other indication to be placed on packages or other containers of product to\nevidence payment of tobacco taxes, or in the case of a State that does not require any such\nindication of tax payment, if the person in possession of the tobacco product is unable to provide\nany evidence that the tobacco products are moving legally in interstate commerce and which are\nin the possession of any person other than a person defined in paragraph (2) of this section.\".\n(b) Unlawful Acts._ Section 2342 of title 18, United States Code, is amended_\n(1) by inserting ``or contraband tobacco products\" before the period in subsection (a); and\n(2) by adding at the end thereof the following:\n`(c) It is unlawful for any person_\n\"(1) knowingly to make any false statement or representation with respect to the information\nrequired by this chapter to be kept in the records or reports of any person who ships, sells, or\ndistributes any quantity of cigarettes in excess of 30,000 in a single transaction, or tobacco\nproducts in such equivalent quantities as shall be determined by regulation; or\n``(2) knowingly to fail or knowingly to fail to maintain distribution records or reports, alter or\nobliterate required markings, or interfere with any inspection as required with respect to such\nquantity of cigarettes or other tobacco products.\n``(d) It shall be unlawful for any person knowingly to transport cigarettes or other tobacco\nproducts under a false bill of lading or without any bill of lading.\".\n(d) Recordkeeping._ Section 2343 of title 18, United States Code, is amended\n(1) by striking ``60,000\" in subsection (a) and inserting ``30,000\";\n(2) by inserting after ``transaction\" in subsection (a) the following: ``or, in the case of other\ntobacco products an equivalent quantity as determined by regulation,\";\n(3) by striking the last sentence of subsection (a) and inserting the following:\n`Except as provided in subsection (c) of this section, nothing contained herein shall authorize\nthe Secretary to require reporting under this section.\";\n(4) by striking ``60,000\" in subsection (b) and inserting ``30,000\";\n(5) by inserting after \"transaction\" in subsection (b) the following: ``or, in the case of other\ntobacco products an equivalent quantity as determined by regulation,\"; and\n(6) by adding at the end thereof the following:\n``(c)(1) Any person who ships, sells, or distributes for resale tobacco products in interstate\ncommerce, whereby such tobacco products are shipped into a State taxing the sale or use of such\ntobacco products or who advertises or offers tobacco products for such sale or transfer and\nshipment shall\n``(A) first file with the tobacco tax administrator of the State into which such shipment is made\nor in which such advertisement or offer is disseminated, a statement setting for the persons name,\nand trade name (if any), and the address of the persons principal place of business and of any\nother place of business; and\n`(B) not later than the 10th day of each month, file with the tobacco tax administrator of the\nState into which such shipment is made a memorandum or a copy of the invoice covering each\nand every shipment of tobacco products made during the previous month into such State; the\nmemorandum or invoice in each case to include the name and address of the person to whom the\nshipment was made, the brand, and the quantity thereof.\n`(2) The fact that any person ships or delivers for shipment any tobacco products shall, if such\nshipment is into a State in which such person has filed a statement with the tobacco tax\nadministrator under paragraph (1)(A) of this subsection, be presumptive evidence that such\ntobacco products were sold, shipped, or distributed for resale by such person.\n`(3) For purposes of this subsection_\n``(A) the term `use' includes consumption, storage, handling, or disposal of tobacco products;\nand\n``(B) the term `tobacco tax administrator' means the State official authorized to administer\ntobacco tax laws of the State.\".\n(e) Penalties. Section 2344 of title 18, United States Code, is amended\n(1) by inserting ``or (c)\" in subsection (b) after ``section 2344(b)\";\n(2) by inserting ``or contraband tobacco products\" after ``cigarettes\" in subsection (c); and\n(3) by adding at the end thereof the following:\n(d) Any proceeds from the unlawful distribution of tobacco shall be subject to seizure and\nforfeiture under section 981(a)(1)(C).\".\n(f) Repeal of Federal Law Relating to Collection of State Cigarette Taxes. The Act of October\n19, 1949, (63 Stat. 884; 15 U.S.C. 375-378) is hereby repealed.\nSEC. 1139. FUNDING.\n(a) License Fees. The Secretary may, in the Secretary's sole discretion, set the fees for licenses\nrequired by this chapter, in such amounts as are necessary to recover the costs of administering\nthe provisions of this chapter, including preventing trafficking in contraband tobacco products.\n(b) Disposition of Fees. Fees collected by the Secretary under this chapter shall be deposited in\nan account with the Treasury of the United States that is specially designated for paying the costs\nassociated with the administration or enforcement of this chapter or any other Federal law\nrelating to the unlawful trafficking of tobacco products. The Secretary is authorized and directed\nto pay out of any funds available in such account any expenses incurred by the Federal\nGovernment in administering and enforcing this chapter or any other Federal law relating to the\nunlawful trafficking in tobacco products (including expenses incurred for the salaries and\nexpenses of individuals employed to provide such services). None of the funds deposited into\nsuch account shall be available for any purpose other than making payments authorized under the\npreceding sentence.\nSEC. 1140. RULES AND REGULATIONS.\nThe Secretary shall prescribe all needful rules and regulations for the enforcement of this\nchapter, including all rules and regulations that are necessary to ensure the lawful distribution of\ntobacco products in interstate or foreign commerce.\nSubtitle C_Other Provisions\nSEC. 1161. IMPROVING CHILD CARE AND EARLY CHILDHOOD DEVELOPMENT.\n(a) In General. There are authorized to be appropriated to the Secretary from the National\nTobacco Trust Fund such sums as may be necessary for each fiscal year to be used by the\nSecretary for the following purposes:\n(1) Improving the affordability of child care through increased appropriations for child care\nunder the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9859 et seq.).\n(2) Enhancing the quality of child care and early childhood development through the provision\nof grants to States under the Child Care and Development Block Grant Act of 1990 (42 U.S.C.\n9859 et seq.).\n(3) Expanding the availability and quality of school-age care through the provision of grants to\nStates under the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9859 et seq.).\n(4) Assisting young children by providing grants to local collaboratives under the Child Care\nand Development Block Grant Act of 1990 (42 U.S.C. 9859 et seq.) for the purpose of improving\nparent education and supportive services, strengthening the quality of child care, improving\nhealth services, and improving services for children with disabilities.\n(b) Supplement not Supplant. Amounts made available to a State under this section shall be\nused to supplement and not supplant other Federal, State, and local funds provided for programs\nthat serve the health and developmental needs of children. Amounts provided to the State under\nany of the provisions of law referred to in this section shall not be reduced solely as a result of\nthe availability of funds under this section.\nSEC. 1162. BAN OF SALE OF TOBACCO PRODUCTS THROUGH THE USE OF\nVENDINGMACHINES\n(a) Ban of Sale of Tobacco Products Through the Use of Vending Machines Effective 12\nmonths after the date of enactment of this Act, it shall be unlawful to sell tobacco products\nthrough the use of a vending machine.\n(b) Compensation for Banned Vending Machines\n-\n(1) In general The owners and operators of tobacco vending machines shall be reimbursed,\nsubject to the availability of appropriations under subsection (d), for the fair market value of their\ntobacco vending machines.\n(2) Tobacco vending reimburment corporation .\n-\n(A) Corporation Reimbursment shall be directed through a private, nonprofit corporation\nestablished in the District of Columbia, known as the Tobacco Vending Reimburment\nCorporation (in this section referred to as the ``Corporation\"). Except as otherwise provided in\nthis section, the Corporation is subject to, and has all the powers conferred upon a nonprofit\ncorporation by the District of Columbia Nonprofit Corporation Act (D.C. Code section 29-501 et\nseq.).\n(B) Duties - The Corporation shall\n(i) disburse compensation funds to vending companies under this section;\n(ii) verify operational machines; and\n(iii) maintain complete records of machine verification and accountings of disbursements and\nadministration of the compensation fund established under paragraph (4).\n(3) Management of corporation\n-\n(A) Board of directors - The Corporation shall be managed by a Board of Directors that_\n(i) consists of distinguished Americans with experience in finance, public policy, or fund\nmanagement;\n(ii) includes at least 1 member of the United States tobacco vending machine industry;\n(iii) shall be paid an annual salary in an amount determined by the President of the Corporation\nnot to exceed $40,000 individually, out of amounts transferred to the Corporation under\nparagraph (4)(A);\n(iv) shall appoint a President to manage the day-to-day activities of the Corporation;\n(v) shall develop guidelines by which the President shall direct the Corporation;\n(vi) shall retain a national accounting firm to verify the distribution of funds and audit the\ncompensation fund established under paragraph (4);\n(vii) shall retain such legal, management, or consulting assistance as is necessary and\nreasonable; and\n(viii) shall periodically report to Congress regarding the activities of the Corporation.\n(B) Duties of the president of the corporation The President of the Corporation shall_\n(i) hire appropriate staff;\n(ii) prepare the report of the Board of Directors of the Corporation required under subparagraph\n(A)(viii); and\n(iii) oversee Corporation functions, including verification of machines, administration and\ndisbursement of funds, maintenance of complete records, operation of appeals procedures, and\nother directed functions.\n(4) Compensation Fund\n-\n(A) Rules for disbursement of funds\n-\n(i) Payments to owners and operators The Corporation shall disburse funds to compensate the\nowners and operators of tobacco vending machines in accordance with the following:\n(I) The fair market value of each tobacco vending machine verified by the Corporation President\nin accordance with subparagraph (C), and proven to have been in operation before August 10,\n1995, shall be disbursed to the owner of the machine seeking compensation.\n(II) No compensation shall be made for a spiral glass front vending machine.\n(ii) Other payments Funds appropriated to the Corporation under subsection (d) may be used\nto pay the administrative costs of the Corporation that are necessary and proper or required by\nlaw. The total amount paid by the Corporation for administrative and overhead costs, including\naccounting fees, legal fees, consultant fees, and associated administrative costs shall not exceed 1\npercent of the total amount appropriated to the Corporation under subsection (d).\n(B) Verification of vending machines Verification of vending machines shall be based on\ncopies of official State vending licenses, company computerized or handwritten sales records, or\nphysical inspection by the Corporation President or by an inspection agent designated by the\nPresident. The Corporation President and the Board of Directors of the Corporation shall work\nvigorously to prevent and prosecute any fraudulent claims submitted for compensation.\n(C) Return of account funds not distributed to vendors The Corporation shall be dissolved on\nthe date that is 4 years after the date of enactment of this Act. Any funds not dispersed or\nallocated to claims pending as of that date shall be transferred to a public anti-smoking trust, or\nused for such other purposes as Congress may designate.\n(c) Settlement of Legal Claims Pending Against the United States Acceptance of a\ncompensation payment from the Corporation by a vending machine owner or operator shall settle\nall pending and future claims of the owner or operator against the United States that are based on,\nor related to, the ban of the use of tobacco vending machines imposed under this section and any\nother laws or regulations that limit the use of tobacco vending machines.\n(d) Authorization of Appropriations._ There are authorized to be appropriated to the\nCorporation from funds not otherwise obligated in the Treasury or out of the National Tobacco\nTrust Fund, such sums as may be necessary to carry out this section.\nSEC. 1163. AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY\nACT OF 1974.\n(a) In General _Subpart B of part 7 of subtitle B of title I of the Employee Retirement Income\nSecurity Act of 1974 (29 U.S.C. 1185 et seq.) is amended by adding at the end the following new\nsection:\n\"SEC. 713. REQUIRED COVERAGE FOR MINIMUM HOSPITAL STAY FOR\nMASTECTOMIES ANDLYMPH NODE DISSECTIONS FOR THE TREATMENT OF\nBREAST CANCER AND COVERAGE FOR RECONSTRUCTIVE SURGERY FOLLOWING\nMASTECTOMIES.\n``(a) Inpatient Care\n-\n\"(1) In general .A group health plan, and a health insurance issuer providing health insurance\ncoverage in connection with a group health plan, that provides medical and surgical benefits shall\nensure that inpatient coverage with respect to the surgical treatment of breast cancer (including a\nmastectomy, lumpectomy, or lymph node dissection for the treatment of breast cancer) is\nprovided for a period of time as is determined by the attending physician, in his or her\nprofessional judgment consistent with scientific evidence-based practice, in consultation with the\npatient, and subject to subsection (d), to be medically appropriate.\n``(2) Exception Nothing in this section shall be construed as requiring the provision of\ninpatient coverage if the attending physician in consultation with the patient determine that a\nshorter period of hospital stay is medically appropriate.\n``(b) Reconstructive Surgery. A group health plan, and a health insurance issuer providing\nhealth insurance coverage in connection with a group health plan, that provides medical and\nsurgical benefits with respect to a mastectomy shall ensure that, in a case in which a mastectomy\npatient elects breast reconstruction, coverage is provided for_\n\"(1) all stages of reconstruction of the breast on which the mastectomy has been performed;\n`(2) surgery and reconstruction of the other breast to produce a symmetrical appearance; and\n'(3) the costs of prostheses and complications of mastectomy including lymphedemas;\nin the manner determined by the attending physician and the patient to be appropriate. Such\ncoverage may be subject to annual deductibles and coinsurance provisions as may be deemed\nappropriate and as are consistent with those established for other benefits under the plan or\ncoverage. Written notice of the availability of such coverage shall be delivered to the participant\nupon enrollment and annually thereafter.\n``(c) Notice .A group health plan, and a health insurance issuer providing health insurance\ncoverage in connection with a group health plan shall provide notice to each participant and\nbeneficiary under such plan regarding the coverage required by this section in accordance with\nregulations promulgated by the Secretary. Such notice shall be in writing and prominently\npositioned in any literature or correspondence made available or distributed by the plan or issuer\nand shall be transmitted\n``(1) in the next mailing made by the plan or issuer to the participant or beneficiary;\n\"(2) as part of any yearly informational packet sent to the participant or beneficiary; or\n``(3) not later than January 1, 1998;\nwhichever is earlier.\n`(d) No Authorization Required\n-\n\"(1) In general An attending physician shall not be required to obtain authorization from the\nplan or issuer for prescribing any length of stay in connection with a mastectomy, a lumpectomy,\nor a lymph node dissection for the treatment of breast cancer.\n``(2) Prenotification Nothing in this section shall be construed as preventing a group health\nplan from requiring prenotification of an inpatient stay referred to in this section if such\nrequirement is consistent with terms and conditions applicable to other inpatient benefits under\nthe plan, except that the provision of such inpatient stay benefits shall not be contingent upon\nsuch notification.\n(e) Prohibitions A group health plan, and a health insurance issuer offering group health\ninsurance coverage in connection with a group health plan, may not\n(1) deny to a patient eligibility, or continued eligibility, to enroll or to renew coverage under\nthe terms of the plan, solely for the purpose of avoiding the requirements of this section;\n(2) provide monetary payments or rebates to individuals to encourage such individuals to\naccept less than the minimum protections available under this section;\n(3) penalize or otherwise reduce or limit the reimbursement of an attending provider because\nsuch provider provided care to an individual participant or beneficiary in accordance with this\nsection;\n'`(4) provide incentives (monetary or otherwise) to an attending provider to induce such\nprovider to provide care to an individual participant or beneficiary in a manner inconsistent with\nthis section; and\n``(5) subject to subsection (f)(3), restrict benefits for any portion of a period within a hospital\nlength of stay required under subsection (a) in a manner which is less favorable than the benefits\nprovided for any preceding portion of such stay.\n``(f) Rules of Construction\n-\n``(1) In general [Nothing in this section shall be construed to require a patient who is a\nparticipant or beneficiary\n`(A) to undergo a mastectomy or lymph node dissection in a hospital; or\n(B) to stay in the hospital for a fixed period of time following a mastectomy or lymph node\ndissection.\n'(2) Limitation This section shall not apply with respect to any group health plan, or any\ngroup health insurance coverage offered by a health insurance issuer, which does not provide\nbenefits for hospital lengths of stay in connection with a mastectomy or lymph node dissection\nfor the treatment of breast cancer.\n(3) Cost sharing Nothing in this section shall be construed as preventing a group health plan\nor issuer from imposing deductibles, coinsurance, or other cost-sharing in relation to benefits for\nhospital lengths of stay in connection with a mastectomy or lymph node dissection for the\ntreatment of breast cancer under the plan (or under health insurance coverage offered in\nconnection with a group health plan), except that such coinsurance or other cost-sharing for any\nportion of a period within a hospital length of stay required under subsection (a) may not be\ngreater than such coinsurance or cost-sharing for any preceding portion of such stay.\n`(4) Level and type of reimbursements Nothing in this section shall be construed to prevent a\ngroup health plan or a health insurance issuer offering group health insurance coverage from\nnegotiating the level and type of reimbursement with a provider for care provided in accordance\nwith this section.\n``(g) Preemption, Relation to State Laws\n-\n`(1) In general Nothing in this section shall be construed to preempt any State law in effect\non the date of enactment of this section with respect to health insurance coverage that\n(A) requires coverage for a minimum hospital length of stay following a surgical treatment for\nbreast cancer;\n(B) requires coverage of at least the coverage of reconstructive breast surgery otherwise\nrequired under this section; or\n(C) requires coverage for breast cancer treatments (including breast reconstruction) in\naccordance with scientific evidence-based practices or guidelines recommended by established\nmedical associations.\n`(2) Application of section _With respect to a State law\n``(A) described in paragraph (1)(A), the provisions of this section relating to breast\nreconstruction shall apply in such State; and\n`(B) described in paragraph (1)(B), the provisions of this section relating to length of stays for\nsurgical breast treatment shall apply in such State.\n``(3) Erisa Nothing in this section shall be construed to affect or modify the provisions of\nsection 514 with respect to group health plans.\".\n(b) Clerical Amendment The table of contents in section 1 of the Employee Retirement\nIncome Security Act of 1974 (29 U.S.C. 1001 note) is amended by inserting after the item\nrelating to section 712 the following new item:\n\"Sec. 713. Required coverage for minimum hospital stay for mastectomies andlymph node\ndissections for the treatment of breast cancer and coverage for reconstructive surgery following\nmastectomies.\".\n(c) Effective Dates\n-\n(1) In general - The amendments made by this section shall apply with respect to plan years\nbeginning on or after the date of enactment of this Act.\n(2) Special rule for collective bargaining agreements In the case of a group health plan\nmaintained pursuant to 1 or more collective bargaining agreements between employee\nrepresentatives and 1 or more employers, any plan amendment made pursuant to a collective\nbargaining agreement relating to the plan which amends the plan solely to conform to any\nrequirement added by this section shall not be treated as a termination of such collective\nbargaining agreement.\nTITLE XII_ASBESTOS-RELATED TOBACCO CLAIMS\nSEC. 1201. NATIONAL TOBACCO TRUST FUNDS AVAILABLE UNDER FUTURE\nLEGISLATION.\nIf the Congress enacts qualifying legislation after the date of enactment of this Act to provide for\nthe payment of asbestos claims, then amounts in the National Tobacco Trust Fund established by\ntitle IV of this Act set aside for public health expenditures shall be available, as provided by\nappropriation Acts, to make those payments. For purposes of this section, the term qualifying\nlegislation\" means a public law that amends this Act and changes the suballocations of funds set\naside for public health expenditures under title IV of this Act to provide for the payment of those\nclaims.\nTITLE XIII_VETERANS' BENEFITS\nSEC. 1301. RECOVERY BY SECRETARY OF VETERANS AFFAIRS.\nTitle 38, United States Code, is amended by adding after part VI the following:\n\"PART VII_RECOVERY OF COSTS FOR TOBACCO-RELATED DISABILITY OR DEATH\n``Chapter 91_Tort liability for disability, injury, disease, or death due to tobacco use\n\"Sec.\n\"9101. Recovery by Secretary of Veterans Affairs\n``9102. Regulations\n``9103. Limitation or repeal of other provisions for recovery of compensation\n\"9104. Exemption from annual limitation on damages\n§ 9101. Recovery by Secretary of Veterans Affairs\n``(a) Conditions; exceptions; persons liable; amount of recovery; subrogation._ In any case in\nwhich the Secretary is authorized or required by law to provide compensation and medical care\nservices under this title for disability or death from injury or disease attributable in whole or in\npart to the use of tobacco products by a veteran during the veterans active military, naval, or air\nservice under circumstances creating a tort liability upon a tobacco product manufacturer (other\nthan or in addition to the United States) to pay damages therefor, the Secretary shall have a right\nto recover (independent of the rights of the injured or diseased veteran) from said tobacco\nproduct manufacturer the cost of the compensation paid or to be paid and the costs of medical\ncare services provided, and shall, as to this right, be subrogated to any right or claim that the\ninjured or diseased veteran, his or her guardian, personal representative, estate, dependents, or\nsurvivors has against such third person to the extent of the cost of the compensation paid or to be\npaid and the costs of medical services provided.\n``(b) Enforcement procedure; intervention; joinder of parties; State or Federal court\nproceedings._ The Secretary may, to enforce such right under subsection (a) of this section_\n``(1) intervene or join in any action or proceeding brought by the injured or diseased veteran, his\nor her guardian, personal representative, estate, dependents, or survivors, against the tobacco\nproduct manufacturer who is liable for the injury or disease; or\n``(2) if such action or proceeding is not commenced within 6 months after the first day on which\ncompensation is paid, or the medical care services are provided, by the Secretary in connection\nwith the injury or disease involved, institute and prosecute legal proceedings against the tobacco\nproduct manufacturer who is liable for the injury or disease, in a State or Federal court, either\nalone (in its own name or in the name of the injured veteran, his or her guardian, personal\nrepresentative, estate, dependents, or survivors) or in conjunction with the injured or diseased\nveteran, his or her guardian, personal representative, estate, dependents, or survivors.\n``(c) Credits to appropriations. Any amount recovered or collected under this section for\ncompensation paid, and medical care services provided, by the Secretary shall be credited to a\nrevolving fund established in the Treasury of the United States known as the Department of\nVeterans Affairs Tobacco Recovery Fund (hereafter called the Fund). The Fund shall be\navailable to the Secretary without fiscal year limitation for purposes of veterans programs,\nincluding administrative costs. The Secretary may transfer such funds as deemed necessary to the\nvarious Department of Veterans Affairs appropriations, which shall remain available until\nexpended.\n``§ § 9102. Regulations\n``(a) Determination and establishment of present value of compensation and medical care\nservices to be paid._ The Secretary may prescribe regulations to carry out this chapter, including\nregulations with respect to the determination and establishment of the present value of\ncompensation to be paid to an injured or diseased veteran or his or her surviving spouse, child, or\nparent, and medical care services provided to a veteran.\n``(b) Settlement, release and waiver of claims._ To the extent prescribed by regulations under\nsubsection (a) of this section, the Secretary may_\n\"(1) compromise, or settle and execute a release of, any claim which the Secretary has by virtue\nof the right established by section 9101 of this title; or\n`(2) waive any such claim, in whole or in part, for the convenience of the Government, or if he\nor she determines that collection would result in undue hardship upon the veteran who suffered\nthe injury or disease or his or her surviving spouse, child or parent resulting in payment of\ncompensation, or receipt of medical care services.\n(c) Damages recoverable for personal injury unaffected._ No action taken by the Secretary in\nconnection with the rights afforded under this chapter shall operate to deny to the injured veteran\nor his or her surviving spouse, child or parent the recovery for that portion of his or her damage\nnot covered hereunder.\n``§ 9103. Limitation or repeal of other provisions for recovery ofcompensation and medical care\nservices\n\"This chapter does not limit or repeal any other provision of law providing for recovery by the\nSecretary of the cost of compensation and medical care services described in section 9101 of this\ntitle.\n§ 9104. Exemption from annual limitation on damages\n``Any amount recovered under section 9101 of this title for compensation paid or to be paid, and\nthe cost of medical care services provided, by the Secretary for disability or death from injury or\ndisease attributable in whole or in part to the use of tobacco products by a veteran during the\nveterans active military, naval, or air service shall not be subject to the limitation on the annual\namount of damages for which the tobacco product manufacturers may be found liable as\nprovided in the National Tobacco Policy and Youth Smoking Reduction Act and shall not be\ncounted in computing the annual amount of damages for purposes of that section.\".\nTITLE XIV_EXCHANGE OF BENEFITS FOR AGREEMENT\nTO TAKE ADDITIONAL MEASURES TO REDUCE YOUTH SMOKING\nSEC. 1401. CONFERRAL OF BENEFITS ON PARTICIPATING TOBACCO\nPRODUCTMANUFACTURERS IN RETURN FOR THEIR ASSUMPTION OF SPECIFIC\nOBLIGATIONS.\nParticipating tobacco product manufacturers shall receive the benefits, and assume the\nobligations, set forth in this title.\nSEC. 1402. PARTICIPATING TOBACCO PRODUCT MANUFACTURER.\n(a) In General. Except as provided in subsection (b), a tobacco product manufacturer that\n(1) executes a protocol with the Secretary of Health and Human Services that meets the\nrequirements of sections 1403, 1404, and 1405; and\n(2) makes the payment required under section 402(a)(1),\nis, for purposes of this title, a participating tobacco products manufacturer.\n(b) Disqualification.\n(1) Ineligibility. Notwithstanding subsection (a), a tobacco product manufacturer may not\nbecome a participating tobacco products manufacturer if_\n(A) the tobacco product manufacturer or any of its principal officers (acting in that official's\ncorporate capacity), is convicted of_\n(i) manufacturing or distributing misbranded tobacco products in violation of the criminal\nprohibitions on such misbranding established under section 301 or 303 of the Federal Food,\nDrug, and Cosmetic Act (21 U.S.C. 331 or 333);\n(ii) violating reporting requirements established under section 5762(a)(4) of the Internal\nRevenue Code of 1986 (26 U.S.C. 5762(a)(4));\n(iii) violating, or aiding and abetting the violation of chapter 114 of title 18, United States Code;\nor\n(iv) violating Federal prohibitions on mail fraud, wire fraud, or the making of false statements to\nFederal officials in the course of making reports or disclosures required by this Act; or\n(B) the tobacco product manufacturer, at the end of the 1-year period beginning on the date on\nwhich such manufacturer fails to make a required assessment payment under title IV of this Act,\nhas not fully made such payment.\n(2) Disqualification._ A tobacco product manufacturer that has become a participating tobacco\nproduct manufacturer shall cease to be treated as a participating tobacco product manufacturer if\n(A) it, or any of its principal officers (acting in that official's corporate capacity) is convicted of\nan offense described in paragraph (1)(A); or\n(B) it fails to make such a payment within the time period described in paragraph (1)(B).\n(c) Non-participating Tobacco Manufacturers. Any tobacco product manufacturer that_\n(1) does not execute a protocol in accordance with subsection (a);\n(2) fails to make the payment required by section 402(a)(1) (if applicable to that manufacturer);\n(3) is not eligible, under subsection (b)(1), to become a participating tobacco product\nmanufacturer; or\n(4) ceases to be treated as a participating tobacco product manufacturer under subsection (b)(2),\nis, for purposes of this title, a non-participating tobacco product manufacturer.\nSEC. 1403. GENERAL PROVISIONS OF PROTOCOL.\n(a) In General. For purposes of section 1402, a protocol meets the requirements of this section\nif it_\n(1) contains the provisions described in subsection (b); and\n(2) is enforceable at law.\n(b) Required Provisions. The protocol shall include the following provisions:\n(1) The tobacco product manufacturer executing the protocol will not engage in any conduct that\nwas, either on the date of enactment of this Act, or at any time after the date of enactment of this\nAct_\n(A) prohibited by this Act;\n(B) prohibited by any regulation promulgated by the Food and Drug Administration that applies\nto tobacco products; or\n(C) prohibited by any other statute.\n(2) The tobacco product manufacturer executing the protocol will contract with only such\ndistributors and retailers who have operated in compliance with the applicable provisions of\nFederal, State, or local law regarding the marketing and sale of tobacco products and who agree\nto comply with advertising and marketing provisions in paragraph (3).\n(3) The tobacco product manufacturer executing the protocol will be bound in marketing\ntobacco products by the following provisions, whether or not these provisions have legal force\nand effect against manufacturers who are not signatories to the protocol_\n(A) the advertising and marketing provisions of part 897 of title 21, Code of Federal\nRegulations, that were published in the Federal Register on August 28, 1996, and which shall be\nadopted and incorporated as independent terms of the protocol;\n(B) the requirements of section 1404; and\n(C) the requirements of section 1405.\n(4) The tobacco product manufacturer executing the protocol will make any payments to the\nNational Tobacco Trust Fund in title IV that are required to be made under that title or in any\nother title of this Act.\n(5) The tobacco product manufacturer executing the protocol will be bound by the provisions of\ntitle IV, and any other title of this Act with respect to payments required under title IV, without\nregard to whether those provisions have legal force and effect against manufacturers who have\nnot become signatories.\n(6) The tobacco product manufacturer executing the protocol will make the industry-wide and\nmanufacturer-specific look-back assessment payments that may be required under title II.\n(7) The tobacco product manufacturer executing the protocol will be bound by the provisions of\ntitle II that require a manufacturer to make look-back assessments, and any other title of this Act\nwith respect to such assessments, without regard to whether such terms have legal force and\neffect against manufacturers who have not become signatories.\n(8) The tobacco product manufacturer executing the protocol will, within 180 days after the date\nof enactment of this Act and in conjunction with other participating tobacco product\nmanufacturers, establish a National Tobacco Document Depository in the Washington, D.C.\narea_\n(A) that is not affiliated with, or controlled by, any tobacco product manufacturer;\n(B) the establishment and operational costs of which are allocated among participating tobacco\nproduct manufacturers; and\n(C) that will make any document submitted to it under title IX of this Act and finally determined\nnot to be subject to attorney-client privilege, attorney work product, or trade secret exclusions,\navailable to the public using the Internet or other means within 30 days after receiving the\ndocument.\n(c) Provisions Applicable to Documents. The provisions of section 2116(a) and (b) of title 44,\nUnited States Code, apply to records and documents submitted to the Depository (or, to the\nalternative depository, if any, established by the Secretary by regulation under title IX of this\nAct) in the same manner and to the same extent as if they were records submitted to the National\nArchives of the United States required by statute to be retained indefinitely.\nSEC. 1404. TOBACCO PRODUCT LABELING AND ADVERTISING REQUIREMENTS OF\nPROTOCOL.\n(a) In General. For purposes of section 1402, a protocol meets the requirements of this section\nif it requires that_\n(1) no tobacco product will be sold or distributed in the United States unless its advertising and\nlabeling (including the package)_\n(A) contain no human image, animal image, or cartoon character;\n(B) are not outdoor advertising, including advertising in enclosed stadia and on mass transit\nvehicles, and advertising from within a retail establishment that is directed toward or visible from\nthe outside of the establishment;\n(C) at the time the advertising or labeling is first used are submitted to the Secretary so that the\nSecretary may conduct regular review of the advertising and labeling;\n(D) comply with any applicable requirement of the Federal Food, Drug, and Cosmetic Act, the\nFederal Cigarette Labeling and Advertising Act, and any regulation promulgated under either of\nthose Acts;\n(E) do not appear on the international computer network of both Federal and non-Federal\ninteroperable packet switches data networks (the ``Internet\"), unless such advertising is designed\nto be inaccessible in or from the United States to all individuals under the age of 18 years;\n(F) use only black text on white background, other than\n(i) those locations other than retail stores where no person under the age of 18 is permitted or\npresent at any time, if the advertising is not visible from outside the establishment and is affixed\nto a wall or fixture in the establishment; and\n(ii) advertisements appearing in any publication which the tobacco product manufacturer,\ndistributor, or retailer demonstrates to the Secretary is a newspaper, magazine, periodical, or\nother publication whose readers under the age of 18 years constitute 15 percent or less of the total\nreadership as measured by competent and reliable survey evidence, and that is read by less than 2\nmillion persons under the age of 18 years as measured by competent and reliable survey\nevidence;\n(G) for video formats, use only static black text on a white background, and any accompanying\naudio uses only words without music or sound effects;\n(8) for audio formats, use only words without music or sound effects;\n(2) if a logo, symbol, motto, selling message, recognizable color or pattern of colors, or any\nother indicia of brand-name product identification of the tobacco product is contained in a movie,\nprogram, or video game for which a direct or indirect payment has been made to ensure its\nplacement;\n(3) if a direct or indirect payment has been made by any tobacco product manufacturer,\ndistributor, or retailer to any entity for the purpose of promoting use of the tobacco product\nthrough print or film media that appeals to individuals under the age of 18 years or through a live\nperformance by an entertainment artist that appeals to such individuals;\n(4) if a logo, symbol, motto, selling message, recognizable color or pattern of colors, or any\nother indicia or product identification identical to, similar to, or identifiable with the tobacco\nproduct is used for any item (other than a tobacco product) or service marketed, licensed,\ndistributed or sold or caused to be marketed, licensed, distributed, or sold by the tobacco product\nmanufacturer or distributor of the tobacco product; and\n(5)(A) except as provided in subparagraph (B), if advertising or labeling for such product that is\notherwise in accordance with the requirements of this section bears a tobacco product brand\nname (alone or in conjunction with any other word) or any other indicia of tobacco product\nidentification and is disseminated in a medium other than newspapers, magazines, periodicals or\nother publications (whether periodic or limited distribution), nonpoint-of-sale promotional\nmaterial (including direct mail), point-of-sale promotional material, or audio or video formats\ndelivered at a point-of-sale; but\n(B) notwithstanding subparagraph (A), advertising or labeling for cigarettes or smokeless\ntobacco may be disseminated in a medium that is not specified in paragraph (1) if the tobacco\nproduct manufacturer, distributor, or retailer notifies the Secretary not later than 30 days prior to\nthe use of such medium, and the notice describes the medium and the extent to which the\nadvertising or labeling may be seen by persons under the age of 18 years.\n(b) Color Print Ads on Magazines._ The protocol shall also provide that no tobacco product\nmay be sold or distributed in the United States if any advertising for that product on the outside\nback cover of a magazine appears in any color or combination of colors.\nSEC. 1405. POINT-OF-SALE REQUIREMENTS.\n(a) In General. For purposes of section 1402, a protocol meets the requirements of this section\nif it provides that, except as provided in subsection (b), point-of-sale advertising of any tobacco\nproduct in any retail establishment is prohibited.\n(b) Permitted POS Locations.\n(1) Placement. One point-of-sale advertisement may be placed in or at each retail\nestablishment for its brand or the contracted house retailer or private label brand of its\nwholesaler.\n(2) Size. The display area of any such point-of-sale advertisement (either individually or in the\naggregate) shall not be larger than 576 square inches and shall consist of black letters on white\nbackground or another recognized typography.\n(3) Proximity to candy. Any such point-of-sale advertisement shall not be attached to or\nlocated within 2 feet of any display fixture on which candy is displayed for sale.\n(c) Audio or Video. Any audio or video format permitted under regulations promulgated by\nthe Secretary may be played or shown in, but not distributed, at any location where tobacco\nproducts are offered for sale.\n(d) No Restrictive Covenants. No tobacco product manufacturer or distributor of tobacco\nproducts may enter into any arrangement with a retailer that limits the retailer's ability to display\nany form of advertising or promotional material originating with another supplier and permitted\nby law to be displayed in a retail establishment.\n(e) Definitions. As used in this section, the terms `point-of-sale advertisement\" and ``point-of-\nsale advertising\" mean all printed or graphical materials (other than a pack, box, carton, or\ncontainer of any kind in which cigarettes or smokeless tobacco is offered for sale, sold, or\notherwise distributed to consumers) bearing the brand name (alone or in conjunction with any\nother word), logo, symbol, motto, selling message, or any other indicia of product identification\nidentical or similar to, or identifiable with, those used for any brand of cigarettes or smokeless\ntobacco, which, when used for its intended purpose, can reasonably be anticipated to be seen by\ncustomers at a location where tobacco products are offered for sale.\nSEC. 1406. APPLICATION OF TITLE.\n(a) In General. The provisions of this title apply to any civil action involving a tobacco claim\nbrought pursuant to title VII of this Act, including any such claim that has not reached final\njudgment or final settlement as of the date of enactment of this Act, only if such claim is brought\nor maintained against_\n(1) a participating tobacco product manufacturer or its predecessors;\n(2) an importer, distributor, wholesaler, or retailer of tobacco products_\n(A) that, after the date of enactment of this Act, does not import, distribute, or sell tobacco\nproducts made or sold by a non-participating tobacco manufacturer;\n(B) whose business practices with respect to sales or operations occurring within the United\nStates, conform to the applicable requirements of the protocol; and\n(C) that is not itself a non-participating tobacco product manufacturer;\n(3) a supplier of component or constituent parts of tobacco products_\n(A) whose business practices with respect to sales or operations occurring within the United\nStates, conform to the applicable requirements of the protocol; and\n(B) that is not itself a non-participating tobacco product manufacturer;\n(4) a grower of tobacco products, unless such person is itself a non-participating tobacco product\nmanufacturer; or\n(5) an insurer of any person described in paragraph (1), (2), (3), or (4) based on, arising out of,\nor related to tobacco products manufactured, imported, distributed, or sold (or tobacco grown) by\nsuch person (other than an action brought by the insured person), unless such insurer is itself a\nnon-participating tobacco product manufacturer.\n(b) Exceptions._ The provisions of this title shall not apply to any tobacco claim_\n(1) brought against any person other than those described in subsection (a) or to any tobacco\nclaim that reached final judgment or final settlement prior to the date of enactment of this Act;\n(2) against an employer under valid workers' compensation laws;\n(3) arising under the securities laws of a State or the United State;\n(4) brought by the United States;\n(5) brought under this title by a State or a participating tobacco product manufacturer to enforce\nthis Act;\n(6) asserting damage to the environment from exposures other than environmental smoke or\nsecond-hand smoke; or\n(7) brought against a supplier of a component or constituent part of a tobacco product, if the\ncomponent or constituent part was sold after the date of enactment of this Act, and the supplier\nknew that the tobacco product giving rise to the claim would be manufactured in the United\nStates by a nonparticipating tobacco product manufacturer.\nSEC. 1407. GOVERNMENTAL CLAIMS.\n(a) In General. Except as provided in subsection (b) and (c), no State, political subdivision of a\nState, municipal corporation, governmental entity or corporation, Indian tribe, or agency or\nsubdivision thereof, or other entity acting in parens patriae, may file or maintain any civil action\ninvolving a tobacco claim against a participating tobacco product manufacturer.\n(b) Effect on Existing State Suits of Settlement Agreement or Consent Decree. Within 30 days\nafter the date of enactment of this Act, any State that has filed a civil action involving a tobacco\nclaim against a participating tobacco product manufacturer may elect to settle such action against\nsaid tobacco product manufacturer. If a State makes such an election to enter into a settlement or\na consent decree, it may maintain a civil action involving a tobacco claim only to the extent\nnecessary to permit continuing court jurisdiction over the settlement or consent decree. Nothing\nherein shall preclude any State from bringing suit or seeking a court order to enforce the terms of\nsuch settlement or decree.\nstill true\n(c) State Option for One-Time Opt Out. Any State that does not make the election described in\npost-\n?\nsubsection (b) may continue its lawsuit, notwithstanding subsection (a) of this section. A State\nthat does not make such an election shall not be eligible to receive payments from the trust fund\nin title IV.\n(d) 30-day Delay._ No settlement or consent decree entered into under subsection (b) may take\neffect until 30 days after the date of enactment of this Act.\n(f) Preservation of Insurance Claims.\n(1) In general._ If all participating tobacco product manufacturers fail to make the payments\nrequired by title IV for any calendar year, then_\n(A) beginning on the first day of the next calendar year, subsection (a) does not apply to any\ninsurance claim (including a direct action claim) that is a tobacco claim, regardless of when that\nclaim arose;\n(B) any statute of limitations or doctrine of laches under applicable law shall be tolled for the\nperiod_\n(i) beginning on the date of enactment of this Act; and\n(ii) ending on the last day of that calendar year; and\n(C) an insurance claim (including a direct action claim) that is a tobacco claim and that is\npending on the date of enactment of this Act shall be preserved.\n(2) Application of title 11, United States Code. For purposes of this subsection, nothing in this\nAct shall be construed to modify, suspend, or otherwise affect the application of title 11, United\nStates Code, to participating tobacco manufacturers that fail to make such payments.\n(3) State law not affected. Nothing in this subsection shall be construed to expand or abridge\nState law.\nSEC. 1408. ADDICTION AND DEPENDENCY CLAIMS; CASTANO CIVIL ACTIONS.\n(a) Addiction and Dependence Claims Barred. In any civil action to which this title applies, no\naddiction claim or dependence claim may be filed or maintained against a participating tobacco\nproduct manufacturer.\n(b) Castano Civil Actions._\n(1) The rights and benefits afforded in this Act, and the various research activities envisioned by\nthis Act, are provided in settlement of, and shall constitute the exclusive remedy for the purpose\nof determining civil liability as to those claims asserted in the Castano Civil Actions, and all\nbases for any such claim under the laws of any State are preempted (including State substantive,\nprocedural, remedial, and evidentiary provisions) and settled. The Castano Civil Actions shall be\ndismissed with full reservation of the rights of individual class members to pursue claims not\nbased on addiction or dependency in civil actions, as defined in section 1417(2), in accordance\nwith this Act. For purposes of determining application of statutes of limitation or repose,\nindividual actions filed within one year after the effective date of this Act by those who were\nincluded within a Castano Civil Action shall be considered to have been filed as of the date of the\nCastano Civil Action applicable to said individual.\n(2) For purposes of awarding attorneys fees and expenses for those actions subject to this\nsubsection, the matter at issue shall be submitted to arbitration before one panel of arbitrators. In\nany such arbitration, the arbitration panel shall consist of 3 persons, one of whom shall be chosen\nby the attorneys of the Castano Plaintiffs' Litigation Committee who were signatories to the\nMemorandum of Understanding dated June 20, 1997, by and between tobacco product\nmanufacturers, the Attorneys General, and private attorneys, one of whom shall be chosen by the\nparticipating tobacco product manufacturers, and one of whom shall be chosen jointly by those 2\narbitrators.\n(3) The participating tobacco product manufacturers shall pay the arbitration award.\nSEC. 1409. SUBSTANTIAL NON-ATTAINMENT OF REQUIRED REDUCTIONS.\n(a) Action by Secretary._ If the Secretary determines under title II that the non-attainment\npercentage for any year is greater than 20 percentage points for cigarettes or smokeless tobacco,\nthen the Secretary shall determine, on a brand-by-brand basis, using data that reflects a 1999\nbaseline, which tobacco product manufacturers are responsible within the 2 categories of tobacco\nproducts for the excess. The Secretary may commence an action under this section against the\ntobacco product manufacturer or manufacturers of the brand or brands of cigarettes or smokeless\ntobacco products for which the non-attainment percentage exceeded 20 percentage points.\n(b) Procedures. Any action under this section shall be commenced by the Secretary in the\nUnited States District Court for the District of Columbia within 90 days after publication in the\nFederal Register of the determination that the non-attainment percentage for the tobacco product\nin question is greater than 20 percentage points. Any such action shall be heard and determined\nby a 3-judge court under section 2284 of title 28, United States Code.\n(c) Determination by Court._ In any action under this section, the court shall determine whether\na tobacco product manufacturer has shown, by a preponderance of the evidence that it_\n(1) has complied substantially with the provisions of this Act regarding underage tobacco use, of\nany rules or regulations promulgated thereunder, or of any Federal or State laws regarding\nunderage tobacco use;\n(2) has not taken any material action to undermine the achievement of the required percentage\nreduction for the tobacco product in question; and\n(3) has used its best efforts to reduce underage tobacco use to a degree at least equal to the\nrequired percentage reductions.\n(d) Removal of Annual Aggregate Payment Limitation. Except as provided in subsections (e)\nand (g), if the court determines that a tobacco product manufacturer has failed to make the\nshowing described in subsection (c) then sections 1411 and 1412 of this Act do not apply to the\nenforcement against, or the payment by, such tobacco product manufacturer of any judgment or\nsettlement that becomes final after that determination is made.\n(e) Defense. An action under this section shall be dismissed, and subsection (d) shall not\napply, if the court finds that the Secretary's determination under subsection (a) was unlawful\nunder subparagraph (A), (B), (C), or (D) of section 706(2) of title 5, United States Code. Any\njudgments paid under section 1412 of this Act prior to a final judgment determining that the\nSecretary's determination was erroneous shall be fully credited, with interest, under section 1412\nof this Act.\n(f) Review. Decisions of the court under this section are reviewable only by the Supreme\nCourt by writ of certiorari granted upon the petition of any party. The applicability of subsection\n(d) shall be stayed during the pendency of any such petition or review.\n(g) Continuing Effect. Subsection (d) shall cease to apply to a tobacco product manufacturer\nfound to have engaged in conduct described in subsection (c) upon the later of\n(1) a determination by the Secretary under section 201 after the commencement of action under\nsubsection (a) that the non-attainment percentage for the tobacco product in question is 20 or\nfewer percentage points; or\n(2) a finding by the court in an action filed against the Secretary by the manufacturer, not earlier\nthan 2 years after the determination described in subsection (c) becomes final, that the\nmanufacturer has shown by a preponderance of the evidence that, in the period since that\ndetermination, the manufacturer\n(A) has complied with the provisions of this Act regarding underage tobacco use, of any rules or\nregulations promulgated thereunder, and of any other applicable Federal, State, or local laws,\nrules, or regulations;\n(B) has not taken any action to undermine the achievement of the required percentage reduction\nfor the tobacco product in question; and\n(C) has used its best efforts to attain the required percentage reduction for the tobacco product in\nquestion.\nA judgment or settlement against the tobacco product manufacturer that becomes final after a\ndetermination or finding described in paragraph (1) or (2) of this subsection is not subject to\nsubsection (d). An action under paragraph (2) of this subsection shall be commenced in the\nUnited States District Court for the District of Columbia, and shall be heard and determined by a\n3-judge court under section 2284 of title 28, United States Code. A decision by the court under\nparagraph (2) of this subsection is reviewable only by the Supreme Court by writ of certiorari\ngranted upon the petition of any party, and the decision shall be stayed during the pendency of\nthe petition or review. A determination or finding described in paragraph (1) or (2) of this\nsubsection does not limit the Secretary's authority to bring a subsequent action under this section\nagainst any tobacco product manufacturer or the applicability of subsection (d) with respect to\nany such subsequent action.\nSEC. 1410. PUBLIC HEALTH EMERGENCY.\nIf the Secretary, in consultation with the Commissioner of Food and Drugs, the Surgeon\nGeneral, the Director of the Center for Disease Control or the Director's delegate, and the\nDirector of the Health and Human Services Office of Minority Health determines at any time that\na tobacco product manufacturer's actions or inactions with respect to its compliance with the Act\nare of such a nature as to create a clear and present danger that the manufacturer will not attain\nthe targets for underage smoking reduction, the Secretary may bring an action under section 1409\nseeking the immediate suspension of the tobacco product manufacturer's annual limitation cap on\ncivil judgments. If the court determines that the Secretary has proved by clear and convincing\nevidence that the subject manufacturer's actions or inactions are of such a nature that they present\na clear and present danger that the manufacturer will not attain the targets for underage smoking\nreduction, the court may suspend the subject manufacturer's annual limitation cap on civil\njudgments.\nSEC. 1411. TOBACCO CLAIMS BROUGHT AGAINST PARTICIPATING TOBACCO\nPRODUCTMANUFACTURERS.\n(a) Permissible Defendants. In any civil action to which this title applies, tobacco claims may\nbe filed or maintained only against_\n(1) a participating tobacco product manufacturer; or\n(2) a surviving entity established by a participating tobacco product manufacturer.\n(b) Actions involving participating and non-participating manufacturers. In any civil action\ninvolving both a tobacco claim against a participating tobacco product manufacturer based in\nwhole or in part upon conduct occurring prior to the date of enactment of this Act and a claim\nagainst 1 or more non-participating tobacco product manufacturers, the court, upon application of\na participating tobacco product manufacturer, shall require the jury to or shall itself apportion\nliability as between the participating tobacco product manufacturer and non-participating tobacco\nproduct manufacturers.\nSEC. 1412. PAYMENT OF TOBACCO CLAIM SETTLEMENTS AND JUDGMENTS.\n(a) In General. Except as provided in this section, any judgment or settlement in any civil\naction to which this subtitle applies shall be subject to the process for payment of judgments and\nsettlements set forth in this section. No participating tobacco product manufacturer shall be\nobligated to pay a judgment or settlement on a tobacco claim in any civil action to which this\ntitle applies except in accordance with this section. This section shall not apply to the portion, if\nany, of a judgment that imposes punitive damages based on any conduct that\n(1) occurs after the date of enactment of this Act; and\n(2) is other than the manufacture, development, advertising, marketing, or sale of tobacco\nproducts in compliance with this Act and any agreement incident thereto.\n(b) Registration with the Secretary of the Treasury.\n(1) The Secretary shall maintain a record of settlements, judgments, and payments in civil\nactions to which this title applies.\n(2) Any party claiming entitlement to a monetary payment under a final judgment or final\nsettlement on a tobacco claim shall register such claim with the Secretary by filing a true and\ncorrect copy of the final judgment or final settlement agreement with the Secretary and providing\na copy of such filing to all other parties to the judgment or settlement.\n(3) Any participating tobacco product manufacturer making a payment on any final judgment or\nfinal settlement to which this section applies shall certify such payment to the Secretary by filing\na true and correct copy of the proof of payment and a statement of the remaining unpaid portion,\nif any, of such final judgment or final settlement with the Secretary and shall provide a copy of\nsuch filing to all other parties to the judgment or settlement.\n(c) Liability Cap.\n(1) In general. The aggregate payments made by all participating tobacco product\nmanufacturers in any calendar year may not exceed $8,000,000,000.\n(2) Implementation._ The Secretary shall initiate a rulemaking within 30 days after the date of\nenactment of this Act to establish a mechanism for implementing this subsection in such a way to\nensure the fair and equitable payment of final judgments or final settlements on tobacco claims\nunder this title. Amounts not payable because of the application of this subsection, shall be\ncarried forward and paid in the next year, subject to the provisions of this subsection.\n(3) Inflation adjustment.\n(A) In general._ The amount in paragraph (1) shall be increased annually, beginning with the\nsecond calendar year beginning after the date of enactment of this Act, by the greater of 3 percent\nor the annual increase in the CPI.\n(B) CPI._ For purposes of subparagraph (A), the CPI for any calendar year is the average of the\nConsumer Price Index for all-urban consumers published by the Department of Labor.\n(C) Rounding. If any increase determined under subparagraph (A) is not a multiple of $1,000,\nthe increase shall be rounded to the nearest multiple of $1,000.\n(d) Injunctive Relief. A participating tobacco product manufacturer may commence an action\nto enjoin any State court proceeding to enforce or execute any judgment or settlement where\npayment has not been authorized under this section. Such an action shall arise under the laws of\nthe United States and may be commenced in the district court of the United States for the district\nin which the State court proceeding is pending.\n(e) Joint and Several Liability. All participating tobacco product manufacturers shall be jointly\nand severally liable for, and shall enter into an agreement to apportion among them, any amounts\npayable under judgments and settlements governed by this section arising in whole or in part\nfrom conduct occurring prior to the date of enactment of this Act.\n(f) Bankruptcy of Participating Manufacturer. No participating tobacco product manufacturer\nshall cease operations without establishing a surviving entity against which a tobacco claim may\nbe brought. Any obligation, interest, or debt of a participating, tobacco product manufacturer\narising under such liability apportionment agreement shall be given priority and shall not be\nrejected, avoided, discharged, or otherwise modified or diminished in a proceeding, under title\n11, United States Code, or in any liquidation, reorganization, receivership, or other insolvency\nproceeding under State law. A trustee or receiver in any proceeding under title 11, United States\nCode, or in liquidation, reorganization, receivership, or other insolvency proceeding under State\nlaw, may avoid any transfer of an interest of the participating tobacco product manufacturer, or\nany obligation incurred by such manufacturer, that was made or incurred on or within 2 years\nbefore the date of the filing of a bankruptcy petition, if such manufacturer made such transfer or\nincurred such obligation to hinder or defeat in any fashion the payment of any obligation,\ninterest, or debt of the manufacturer arising under the liability apportionment agreement. Any\nproperty vesting in the participating tobacco product manufacturer following such a proceeding\nshall be subject to all claims and interest of creditors arising under the liability apportionment\nagreement.\n(f) Limitation on State Courts. No court of any State, Tribe, or political subdivision of a State\nmay take any action to inhibit the effective operation of subsection (c).\nSEC. 1413. ATTORNEYS' FEES AND EXPENSES.\n(a) Arbitration Panel.\n(1) Right to Establish For the purpose of awarding of attorneys' fees and expenses relating to\nlitigation affected by, or legal services that, in whole or in part, resulted in or created a model for\nprograms in, this Act, and with respect to which litigation or services the attorney involved is\nunable to agree with the plaintiff who employed that attorney with respect to any dispute that\nmay arise between them regarding the fee agreement, the matter at issue shall be submitted to\narbitration. In any such arbitration, the arbitration panel shall consist of 3 persons, one of whom\nshall be chosen by the plaintiff, one of whom shall be chosen by the attorney, and one of whom\nshall be chosen jointly by those 2 arbitrators.\n(2) Operation._ Not later than 30 days after the date on which all members of an arbitration\npanel are appointed under paragraph (1), the panel shall establish the procedures under which the\npanel will operate which shall include_\n(A) a requirement that any finding by the arbitration panel must be in writing and supported by\nwritten reasons;\n(B) procedures for the exchanging of exhibits and witness lists by the various claimants for\nawards;\n(C) to the maximum extent practicable, requirements that proceedings before the panel be based\non affidavits rather than live testimony; and\n(D) a requirement that all claims be submitted to an arbitration panel not later than 3 months\nafter the date of this Act and a determination made by the panel with respect to such claims not\nlater than 7 months after such date of enactment.\n(3) Right to petition._ Any individual attorney or group of attorneys involved in litigation\naffected by this Act shall have the right to petition an arbitration panel for attorneys' fees and\nexpenses.\n(4) Criteria. In making any award under this section, an arbitration panel shall consider the\nfollowing criteria:\n(A) The time and labor required by the claimant.\n(B) The novelty and difficulty of the questions involved in the action for which the claimant is\nmaking a claim.\n(C) The skill requisite to perform the legal service involved properly.\n(D) The preclusion of other employment by the attorney due to acceptance of the action\ninvolved.\n(E) Whether the fee is fixed or a percentage.\n(F) Time limitations imposed by the client or the circumstances.\n(G) The amount involved and the results obtained.\n(H) The experience, reputation, and ability of the attorneys involved.\n(I) The undesirability of the action.\n(J) Such other factors as justice may require.\n(5) Appeal and enforcement._ The findings of an arbitration panel shall be final, binding,\nnonappealable, and payable within 30 days after the date on which the finding is made public,\nexcept that if an award is to be paid in installments, the first installment shall be payable within\nsuch 30 day period and succeeding installments shall be paid annually thereafter.\n(b) Validity and Enforceability of Private Agreements. Notwithstanding any other provision of\nthis Act, nothing in this section shall be construed to abrogate or restrict in any way the rights of\nany parties to mediate, negotiate, or settle any fee or expense disputes or issues to which this\nsection applies, or to enter into private agreements with respect to the allocation or division of\nfees among the attorneys party to any such agreement.\n(c) Offset for Amounts Already Paid. In making a determination under this section with regard\nto a dispute between a State that pursued independent civil action against tobacco product\nmanufacturers and its attorney, the arbitration panel shall take into account any amounts already\npaid by the State under the agreement in dispute.\nSEC. 1414. EFFECT OF COURT DECISIONS.\n(a) Severability._ If any provision of titles I through XIII, or the application thereof to any\nperson, manufacturer or circumstance, is held invalid, the remainder of the provisions of those\ntitles, and the application of such provision to other persons or circumstances, shall not be\naffected thereby.\n(b) Nonseverability._ If a court of competent jurisdiction enters a final decision substantially\nlimiting or impairing the essential elements of title XIV, specifically the requirements of sections\n1404 and 1405, then the provisions of section 1412 are null and void and of no effect.\nSEC. 1415. CRIMINAL LAWS NOT AFFECTED.\nNothing in this title shall be construed to limit the criminal liability of tobacco product\nmanufacturers, retailers, or distributors or their directors, officers, employees, successors, or\nassigns.\nSEC. 1416. CONGRESS RESERVES THE RIGHT TO ENACT LAWS IN THE FUTURE.\nThe right to alter, amend, or repeal any provision of this Act is hereby reserved to the Congress\nin accordance with the provisions of Article I of the Constitution of the United States and more\nthan 200 years of history.\nSEC. 1417. DEFINITIONS.\nIn this title:\n(1) Terms defined in title VII. Any term used in this title that is defined in title VII has the\nmeaning given to it in title VII.\n(2) Additional definitions._\n(A) Addiction claim; dependence claim. The term ``addiction claim\" or ``dependence claim\"\nrefers only to any cause of action to the extent that the prayer for relief seeks a cessation\nprogram, or other public health program that is to be available to members of the general public\nand is designed to reduce or eliminate the users' addiction to, or dependence on, tobacco\nproducts, and as used herein is brought by those who claim the need for nicotine reduction\nassistance. Neither addiction or dependence claims include claims related to or involving\nmanifestation of illness or tobacco-related diseases.\n(B) Compensatory damages._ The term ``compensatory damages\" refers to those damages\nnecessary to reimburse an injured party, and includes actual, general, and special damages.\n(C) Protocol. The term ``protocol\" means the agreement to be entered into by the Secretary of\nHealth and Human Services with a participating tobacco product manufacturers under this title.\n(D) Punitive damages._ The term ``punitive damages\" means damages in addition to\ncompensatory damages having the character of punishment or penalty.\n(E) Secretary._ The term ``Secretary\" means the Secretary of the Treasury, except where the\ncontext otherwise requires."
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