[Pages S5257-S5259]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

By Mr. DURBIN (for himself and Mr. Lautenberg):
S. 828. A bill to provide for the reduction in the number of children
who use tobacco products, and for other purposes; to the Committee on
Commerce, Science, and Transportation.

[[Page S5258]]

THE NO TOBACCO FOR KIDS ACT

Mr. DURBIN. Mr. President, for more than 5 years now, the tobacco
companies have said repeatedly, ``We do not want to sell our products
to kids.'' They have bought full page ads in the Washington Post, the
New York Times, and the Wall Street Journal, saying that they adamantly
oppose the sale of tobacco to kids.
I don't know many kids who read the Wall Street Journal, the New York
Times, or the Washington Post. What the tobacco companies have been
doing is creating a sham that they are serious about reducing sales to
kids.
Let's take a look at the record. From 1991 to 1996, the percentage of
children who use tobacco increased by almost 50 percent. This means
that, at the same time the tobacco companies have been saying they are
dedicated to reducing the illegal sales of tobacco to kids, more and
more children have been buying the tobacco products those companies
sell.
That is not an accident. This multi-billion dollar industry is made
up of tobacco companies that design their marketing and advertising to
lure new customers into this addiction. The fact that more and more
children are smoking is clear evidence that the tobacco companies have
failed, once again, to tell the truth. They need these new, young
customers to prop up their profits as older customers die or quit using
tobacco. And they continue to do what it takes to secure a new
generation of young people who are becoming hooked on their products.
Today, I am introducing, along with Senator Frank Lautenberg and
Congressman Henry Waxman, a new piece of legislation that says the only
honest way to approach the reduction of tobacco sales to children is to
make the tobacco companies put their profits on the line.
The NO Tobacco For Kids Act says we will do a survey of the tobacco
products for sale and find out how many children are using those
products and what brands they are using. Then, each year, we will
update that survey to see which products continue to be purchased by
children. Those companies that continue to sell their products to
children will face a fine of $1 a pack on all their sales if they don't
reduce the number of children using their brands in steps to reach a
reduction of 90 percent over the next 6 years. Since current childhood
users will cycle out of the underage population over that time, this
measure will give the tobacco companies a chance to show whether they
are serious about reducing the use of tobacco products by kids.
Unless the tobacco companies have their profits on the line, we will
continue to get cheap talk from them about stopping sales to kids. This
bill puts teeth into the campaign to stop selling tobacco products to
children. It sets a very simple standard for the tobacco companies:
stop selling cigarettes and spit tobacco to children, or pay the
consequences.
In the past, every child hooked on tobacco was a new profit center
for the tobacco industry. This legislation totally reverses the
incentives for marketing to children. When this measure becomes law,
every new child who picks up a cigarette or pockets a can of spit
tobacco will become an economic loss to the company whose products the
child chooses. With that reversal, the tobacco companies will have a
strong economic incentive to stop marketing to children.
Mr. President, this legislation could be one the simplest yet most
effective steps we can take to reduce teenage tobacco use. I invite my
colleagues to cosponsor the NO Tobacco For Kids Act and help us put in
place clear performance standards for the tobacco industry to stop
selling their products to minors.
I ask unanimous consent that a summary of this bill and the text of
the bill appear in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 828

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ``NO Tobacco for Kids Act''.

SEC. 2. CHILD TOBACCO USE SURVEYS.

(a) Annual Performance Survey.--Not later than 1 year after
the date of the enactment of this Act and annually thereafter
the Secretary shall conduct a survey to determine the number
of children who used each manufacturer's tobacco products
within the past 30 days.
(b) Baseline Level.--The baseline level of child tobacco
product use of a manufacturer is the number of children
determined to have used the tobacco products of such
manufacturer in the first annual performance survey.

SEC. 3. GRADUATED PERFORMANCE STANDARDS.

(a) Performance Standards for Existing Manufacturers.--Each
manufacturer which manufactured a tobacco product on or
before the date of the enactment of this Act shall reduce the
number of children who use its tobacco products so that the
number of children determined to have used its tobacco
products on the basis of--
(1) the second annual performance survey is equal to or
less than--
(A) 80 percent of the manufacturer's baseline level; or
(B) the de minimis level;
whichever is greater;
(2) the third annual performance survey is equal to or less
than--
(A) 60 percent of the manufacturer's baseline level; or
(B) the de minimis level;
whichever is greater;
(3) the fourth annual performance survey is equal to or
less than--
(A) 40 percent of the manufacturer's baseline level; or
(B) the de minimis level;
whichever is greater;
(4) the fifth annual performance survey is equal to or less
than--
(A) 20 percent of the manufacturer's baseline level; or
(B) the de minimis level;
whichever is greater; and
(5) the sixth annual performance survey and each annual
performance survey conducted thereafter is equal to or less
than--
(A) 10 percent of the manufacturer's baseline level; or
(B) the de minimis level;
whichever is greater.
(b) Performance Standards for New Manufacturers.--Any
manufacturer of a tobacco product which begins to manufacture
a tobacco product after the date of the enactment of this Act
shall ensure that the number of children determined to have
used the manufacturer's tobacco products in each annual
performance survey conducted after the manufacturer begins to
manufacture tobacco products is equal to or less than the de
minimis level.
(c) De Minimis Level.--The de minimis level shall be 0.5
percent of the total number of children determined to have
used tobacco products in the first annual performance survey.

SEC. 4. NONCOMPLIANCE.

(a) First Violation.--If a manufacturer of a tobacco
product violates a performance standard, the manufacturer
shall pay a noncompliance fee of $1 for each unit of its
tobacco product which is distributed for consumer use in the
year following the year in which the performance standard is
violated.
(b) Fee Increase for Subsequent Violations.--If a
manufacturer violates the performance standards in 2 or more
consecutive years, the noncompliance fee for such
manufacturer shall be increased by $1 for each consecutive
violation for each unit of its tobacco product which is
distributed for consumer use.
(c) Reduction in Noncompliance Fee.--If a manufacturer
achieves more than 90 percent of the reduction in the number
of children who use its tobacco products that is required
under the applicable performance standard, the noncompliance
fee required to be paid by the manufacturer shall be reduced
on a pro rata basis such that there shall be a noncompliance
fee reduction of 10 percent for each percentage point over 90
percent achieved by the manufacturer.
(d) Payment.--The noncompliance fee to be paid by a
manufacturer shall be paid on a quarterly basis, with the
payments due within 30 days after the end of each calendar
quarter.

SEC. 5. USE OF NONCOMPLIANCE FEE.

(a) Funds for Enforcement and Education.--The first
$1,000,000,000 of noncompliance fees collected in any fiscal
year shall go into a Tobacco Enforcement and Education Fund
in the United States Treasury. Fees in such fund shall be
available to the Secretary, without fiscal year limitation,
to enforce this Act and other Federal laws relating to
tobacco use by children and for public education to
discourage children from using tobacco products.
(b) Funds for the Treasury.--Any amount of noncompliance
fees collected in any fiscal year which exceeds
$1,000,000,000 shall be paid into the United States Treasury.

SEC. 6. JUDICIAL REVIEW.

A manufacturer of tobacco products may seek judicial review
of any action under this Act only after a noncompliance fee
has been assessed and paid by the manufacturer and only in
the United States District Court for the District of
Columbia. In an action by a manufacturer seeking judicial
review of an annual performance survey, the manufacturer may
prevail--
(1) only if the manufacturer shows that the results of the
performance survey were arbitrary and capricious; and
(2) only to the extent that the manufacturer shows that it
would have been required to pay a lesser noncompliance fee if
the results of the performance survey were not arbitrary and
capricious.

[[Page S5259]]

SEC. 7. ENFORCEMENT.

Section 301 of the Federal Food, Drug, and Cosmetic Act (28
U.S.C. 331) is amended by adding at the end the following:
``(x) The failure to pay any noncompliance fee required
under the NO Tobacco for Kids Act.''.

SEC. 8. PREEMPTION.

Nothing in this Act shall preempt or otherwise affect any
other Federal, State, or local law or regulation which
reduces the use of tobacco products by children.

SEC. 9. DEFINITIONS.

In this Act:
(1) Children.--The term ``children'' means individuals
under the age of 18.
(2) Cigarette.--The term ``cigarette'' has the same meaning
given such term by section 3(1) of the Federal Cigarette
Labeling and Advertising Act (15 U.S.C. 1332(1)).
(3) Cigarette tobacco.--The term ``cigarette tobacco''
means any product that consists of loose tobacco that
contains or delivers nicotine and is intended for use by
consumers in a cigarette.
(4) Manufacture.--The term ``manufacture'' means the
manufacturing, including repacking or relabeling,
fabrication, assembly, processing, labeling, or importing of
a tobacco product.
(5) Manufacturer.--The term ``manufacturer'' means any
person who manufactures a tobacco product.
(6) Secretary.--The term ``Secretary'' means the Secretary
of Health and Human Services.
(7) Smokeless tobacco.--The term ``smokeless tobacco'' has
the same meaning given such term by section 9(1) of the
Comprehensive Smokeless Tobacco Education Act of 1986 (15
U.S.C. 4408(1)).
(8) Tobacco product.--The term ``tobacco product'' means a
cigarette, cigarette tobacco, or smokeless tobacco.
(9) Unit.--The term ``unit'' when used in connection with a
tobacco product means 20 cigarettes in the case of cigarettes
and the smallest amount of tobacco distributed by a
manufacturer for consumer use in the case of any other
tobacco product.
____

The NO Tobacco for Kids Act (NOT for Kids)

The NO Tobacco for Kids Act (NOT for Kids) will establish a
clear performance standard for the reduction of youth smoking
in America. For too many years, the tobacco companies have
claimed they oppose youth smoking and spit tobacco use while
continuing to hook new generations of kids on their deadly
products. This bill sets out a schedule to reduce actual
youth tobacco use and contains provisions that, for the first
time, will give individual tobacco companies an economic
incentive to stop marketing their products to children.
Specifically, the bill provides that:
Within 1 year after enactment, the Secretary of HHS will
conduct a survey to determine the number of children who used
each manufacturer's tobacco products within the previous 30
days.
Each manufacturer will then face penalties if it does not
reduce the number of children who use its tobacco products by
specified percentages from this baseline level over the
succeeding years. The performance standard for each
manufacturer is as follows: Year 1: no standard, baseline
survey is taken; year 2: 20-percent reduction from the
baseline; year 3: 40-percent reduction from the baseline;
year 4: 60-percent reduction from the baseline; year 5: 80-
percent reduction from the baseline; year 6: 90-percent
reduction from the baseline; and subsequent years: 90-percent
reduction from the baseline.
Manufacturers that reduce use to a de minimus level--one-
half percent of the current number of youth smokers--will be
deemed in compliance.
If a manufacturer violates the performance standard, that
manufacturer must pay a noncompliance fee of $1 per pack,
pouch, can, et cetera, on all of their tobacco sales in the
subsequent year--not just on sales to youth. If the
manufacturer violates the performance standard for 2 or more
consecutive years, the noncompliance fee is increased by $1
for each consecutive year of violation. A manufacturer who
comes within 10 percent of the required reduction for a
particular year will have its noncompliance fee reduced on a
pro rata basis.
The first $1 billion of noncompliance fees collected in any
fiscal year will go into a fund for enforcement and public
education to discourage children from using tobacco products.
Any additional fees will go to the Treasury for deficit
reduction.
______