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Statements On Introduced Bills And Joint Resolutions

By Mr. KERRY:

S. 969. A bill to amend the Public Health Service Act to ensure fairness in the coverage of women in the individual health insurance market; to the Committee on Health, Education, Labor, and Pensions.

Sen. John Kerry

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Mr. President, there continues to be discrimination against women in the individual insurance market. As you know, the individual insurance market is often the last resort for health coverage for individuals who do not have access to an employer-sponsored plan or who earn too much to qualify for Medicaid.

To assist these women, I am today introducing the Women's Health Insurance Fairness Act of 2009, a bill that would end the discrimination against women who seek to purchase an insurance policy on the individual market.

According to the Kaiser Family Foundation, of the 94.7 million women between the ages of 18 and 64 in 2007, 64 percent had insurance through an employer, 18 percent were uninsured, 13 percent were enrolled in Medicaid or another type of public insurance, and 6 percent were in the individual market. In other words, about 5.7 million American women in 2007 received health insurance on the individual market. With rising unemployment, it is likely that more women will rely on individual insurance market for coverage in the future.

This market is too often a problem for women for a number of reasons. First, women are often charged more than men for insurance in the individual market. Gender rating is a common insurance practice under which most women are charged higher premiums than men for identical coverage. Federal civil rights law prevents employers with more than 15 employees from charging different premiums based on gender and other factors. This protection is not extended to policies sold in the individual insurance market.

According to a recent report entitled ``Nowhere to Turn: How the Individual Health Insurance Market Fails Women'' by the National Women's Law Center, a 25 year old woman can pay up to 45 percent more than a 25 year old man for the same coverage. A 40 year old woman can pay up to 48 percent more than a 40 year old man for the same coverage. A 55 year old woman can pay up to 37 percent more than a 55 year old man for the same coverage.

Today, only 10 states prohibit and 2 States limit gender rating in the individual market. I am pleased that Massachusetts is one of the 10 States that prohibit insurers from charging different premiums based on gender. But, we should-make sure that this prohibition is extended to every state in the nation.

A second problem facing women on the individual market is that insurers may delay, deny, or limit coverage to women due to pregnancy or delivery method. Over 30 years ago with the passage of the Pregnancy Discrimination Act of 1978, Federal civil rights law established as sex discrimination denial of coverage for pregnancy, childbirth and related conditions in employer-based insurance policies. Unfortunately, this protection is not extended to policies sold in the individual insurance market.

Individual market insurers can deny coverage to women based on a ``pre-existing condition''. If the insurer discovers that a woman applying for coverage had a Cesarean section in the past, they can: charge a higher premium; impose a waiting period during which it refuses to cover another C-section or pregnancy; or deny coverage unless the woman has been sterilized or is no longer of childbearing age.

Currently, there are only 5 States which prohibit insurance carriers from refusing to sell individual health insurance coverage to applicants who have health conditions or problems. Massachusetts is one of the five states which require insurers to accept applicants regardless of health status. Again, this prohibition should be extended to every state in the nation.

A third problem facing women is that the vast majority of policies do not provide coverage for maternity care. The 1978 Pregnancy Discrimination Act specified that employers with more than 15 employees must cover pregnancy on the same basis as other medical conditions. Once again, similar protections do not exist in the individual insurance market.

The National Women's Law Center recently analyzed over 3,500 individual insurance market policies and found that just 12 percent included comprehensive maternity coverage and another 9 percent provided coverage for maternity care that is not comprehensive. They also found that a limited number of insurers sell separate maternity coverage for an additional fee known as a ``rider'', but this supplemental coverage is often expensive and limited in scope.

Currently, 5 States, including Massachusetts, have enacted laws requiring insurers to include coverage for maternity services in all individual health insurance policies sold in their state. Every woman should have access to these services.

That is why I am introducing the Women's Health Insurance Fairness Act of 2009, to end the discrimination against women who seek to purchase an insurance policy on the individual market. It has three basic parts.

First, the bill prevents insurers in the individual market from charging women higher premiums than men. Gender rating is insurance discrimination based on sex and should not be tolerated. Over 40 years ago, the insurance industry voluntarily abandoned its practice of using race as a rating factor and now it is time to end rating discrimination against women. Gender rating hurts women's health by inflating premiums and creating substantial financial barriers for women seeking to obtain health care coverage.

Second, the bill prevents insurers in the individual market from denying or limiting coverage based on a current or past pregnancy or a past or future method of delivery. No longer will insurance companies be able to deny coverage to women simply by treating a pregnancy like a pre-existing condition. Similarly, they will not be able to impose waiting periods relating to a pregnancy. They will no longer be able to impose higher premiums or deductibles on women with prior Cesareans.

Finally, the bill will require all insurance policies offered on the individual market to provide comprehensive maternity coverage for the full scope of maternity services from preconception through postpartum. There is a huge cost to our society by denying maternity coverage. In 2005, the costs associated with preterm birth, one of the most expensive pregnancy complications linked to lack of prenatal care, totaled over $26.2 billion. Yet, for every $1 spent on preconception care saved anywhere from $1.60 to $5.19 in maternal care costs.

If women do not have the necessary maternity coverage, they will be exposed to substantial out of pocket costs. Too many women are unable to pay these costs. The average U.S. hospital cost for an uncomplicated vaginal delivery ranges from $7,500 to $15,000 and from $11,000 to $19,000 for a caesarean delivery. I believe comprehensive maternity coverage will save money and improve maternal and child health outcomes. Those currently without coverage often turn to our public safety net for assistance. Today, forty percent of all pregnancies are covered by Medicaid. We need to do everything possible to increase health outcomes for our children.

The bill would provide the Secretary of Health and Human Services with the authority to monitor compliance with the requirements of this act. It gives the Secretary the ability to assess fines of at least $10,000 against any health insurance company that fails to submit the required data. Additionally, the bill directs the Government Accountability Office to issue a report by December 31, 2010 about problems any remaining for women on the individual insurance market in all 50 States.

I would like to thank a number of organizations who have already endorsed the legislation including the American College of Obstetricians and Gynecologists, Children's Defense Fund, Consumers Union, Families USA, the National Partnership for Women & Families, and OWL--The Voice of Midlife and Older Women.

During the Senate's consideration of comprehensive health care reform, I will work with Senate Finance Committee Chairman Baucus, Ranking Member Grassley to make sure that discriminatory insurance practices against women are ended. I will also work with my Massachusetts colleague, Senate Committee on Health, Education, Labor and Pensions Chairman Ted Kennedy to make sure this legislation is enacted into law. As in other areas of health reform, Massachusetts is already leading the way in preventing insurers from engaging in practices that harm women. I believe the rest of the country should benefit from our experience.

I find it especially appropriate to introduce this legislation as we approach Mother's Day on Sunday, May 10th and National Women's Health Week on May 10th-16th. I can think of no better gift to our mothers, daughters, and sisters than the gift of affordable and accessible insurance that meets their health needs.

By Mr. GRASSLEY (for himself and Mrs. Hagan):

S. 972. A bill to amend the Food, Conservation, and Energy Act of 2008 to provide funding for successful claimants following a determination on the merits of Pigford claims related to racial discrimination by the Department of Agriculture, to the Committee on Agriculture, Nutrition, and Forestry.

Sen. Charles E. Grassley

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Mr. President, I want to first start off by thanking the Senate and in particular the Senate Agriculture Committee for addressing a new cause of action in Federal court for those African-American farmers who may have been discriminated against and who were denied entry in the Pigford v. Glickman Consent Decree. The Food, Conservation, and Energy Act of 2008 including a provision entitled Determination on Merits of Pigford Claims.

For those who do not know, the Consent Decree was a settlement that resulted from a class action lawsuit initiated by a class of African-American farmers who had for decades been discriminated against by the U.S. Department of Agriculture in the administration of its FSA loan program. The discriminatory treatment was well-documented by both the USDA's own Inspector General and an internal task force appointed by then USDA Secretary Glickman.

We had some unanticipated consequences in the Consent Decree's implementation. There was denial of approximately 77,000 African-American farmers into the Decree even though these farmers filed petitions by the late-claim deadline. More than half of these late-claim petitioners didn't even know about the Consent Decree. The Court said the lack of notice was not a sufficient reason to allow them into the Consent Decree. Thus, these individuals were denied entry and their discrimination complaints went unresolved. This was not a fair outcome for farmers or those attempting to farm at that time.

The farm bill did the right thing by allowing late filers to have their claims heard and judged on the merits. These farmers deserve justice and at least the opportunity to have their claims heard.

Unfortunately, it has been very difficult to determine how many of the 77,000 actually have valid claims. Lots of different folks have lots of different calculations. Either way, it's likely to be expensive. Because of the budget constraints, the Farm Bill only could put $100 million towards the endeavor.

I think we can and must do better than that. That is why today I am introducing bipartisan legislation with Senator Hagan of North Carolina. This bill will make 3 changes to the farm bill. First it will allow the claimants to access the $100 million already appropriated in the farm bill, but once that is expended gain access to the Department of Treasury permanent appropriated judgment fund. Second, it will allow reasonable attorney fees, administrative costs, and expenses to be paid from the judgment fund in accordance with the 1999 consent decree. Finally, it includes a section making fraud related to claims a criminal offense with punishment of a fine or up to 5 years in prison or both.

The claimants, who were able to timely file, were allowed access to the judgment fund and so it makes sense that we treat these new claimants the exact same way. The Department of Justice was treating the $100 million included in the farm bill as a cap, but Congress simply viewed it as a down payment to rectify the damage done.

The farm bill we passed last year does one thing right. It focuses a considerable amount of resources on new and beginning farmers and ranchers. Well, many of the Pigford claimants were in that same boat 20 years ago. It is time to rectify that.

The farm bill has simply opened up the door so that claims can be heard. If a person brings a claim and can not meet the burden of proof, then no award will be given. However, we know USDA has admitted that the discrimination occurred, and now we are obligated to do our best in getting those that deserve it, some relief. That is why I am introducing this legislation with Senator Hagan and I urge my colleagues to support the bill. It is time to make these claimants right and move forward into a new era of civil rights at the Department of Agriculture.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

There being no objection, the text of the bill was ordered to be printed in the Record, as follows:

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

Section 14012 of the Food, Conservation, and Energy Act of 2008 (122 Stat. 2209; Public Law 110-246) is amended-- (1) by striking subsection (c) and inserting the following: ``(c) Criminal Penalties.-- ``(1) In general.--It shall be unlawful for any person to-- ``(A) knowingly execute, or attempt to execute, a scheme or artifice to defraud, or obtain money or property from any person by means of false or fraudulent pretenses, representations, or promises, relating to the eligibility or ability of a person to-- ``(i) file a civil action relating to a Pigford claim; ``(ii) submit a late-filing request under section 5(g) of the consent decree; ``(iii) obtain a determination on the merits of a Pigford claim; or ``(iv) recover damages or other relief relating to a Pigford claim; and ``(B) for the purpose of executing the scheme or artifice or attempting so to do, or obtaining the money or property-- ``(i) place or deposit, or cause to be placed or deposited, any matter or thing to be sent or delivered by the Postal Service or any private or commercial interstate carrier; ``(ii) take or receive any matter or thing sent or delivered by the Postal Service or any private or commercial interstate carrier; ``(iii) knowingly cause to be delivered by the Postal Service or any private or commercial interstate carrier any matter or thing according to the direction on the matter or thing, or at the place at which the matter or thing is directed to be delivered by the person to whom it is addressed; or ``(iv) transmit, or cause to be transmitted, any writings, signs, signals, pictures, or sounds by means of wire, radio, or television communication in interstate or foreign commerce. ``(2) Penalty.--Any person who violates paragraph (1) shall be fined under title 18, United States Code, imprisoned for not more than 5 years, or both.''; and (2) in subsection (i), by striking paragraph (2) and inserting the following: ``(2) Permanent judgment appropriation.-- ``(A) In general.--After the expenditure of all funds made available under paragraph (1), any additional payments or debt relief in satisfaction of claims against the United States under subsection (b) and for any actions under subsection (f) or (g) shall be paid from amounts appropriated under section 1304 of title 31, United States Code. ``(B) Authorization of certain expenses.--Reasonable attorney's fees, administrative costs, and expenses described in section 14(a) of the consent decree and related to adjudicating the merits of claims brought under subsection (b), (f), or (g) shall be paid from amounts appropriated under section 1304 of title 31, United States Code. ``(3) Authorization of appropriations.--In addition to any other funds made available under this subsection, there are authorized to be appropriated such sums as are necessary to carry out this section.''.

By Mr. GRASSLEY:

S. 976. A bill to provide that certain provisions of subchapter I of chapter 35 of title 44, United States Code, relating to Federal information policy shall not apply to the collection of information during any investigation, audit, inspection, evaluation, or other review conducted by any Federal office of Inspector General, and for other purposes; to the Committee on Homeland Security and Governmental Affairs.

Sen. Charles E. Grassley

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Mr. President, the Federal Inspectors General are the frontline of protection for taxpayer dollars, ensuring that Federal agencies spend taxpayer dollars in an effective, efficient, economical manner that is in accordance with all applicable law. The Inspectors General root out fraud, waste, and abuse in Government programs by auditing, evaluating, and investigating how Federal agencies spend taxpayer dollars and how Government programs utilize funds. The Inspectors General occupy a unique position within our government. Created by the Inspector General Act of 1978 and by various subsequent statutes, the Inspectors General at Executive Branch agencies also report directly to the Legislative Branch. They were created to keep tabs on the government bureaucracy to make sure that agencies follow the spirit and intent of the laws while protecting taxpayer dollars.

I have been an outspoken advocate for Inspectors General during my time in the Senate and I was proud to be a cosponsor of the Inspector General Reform Act of 2008, which was signed into law by President Bush last year. That legislation ensures that Inspectors General are truly independent of the Federal agencies they oversee. The independence of Inspectors General is a critical requirement to their ability to get the job done. If Inspectors General lack independence from the agency they oversee, the quality of their work is impacted negatively and their reputation as independent watchdogs is tarnished.

Over the years, I have seen a number of Inspectors General come and go. It is a tough job to be an Inspector General. You can not go along to get along. You must buck the system, dig deep into the books of the agency, find where the secrets are hidden, and then report the truth to Congress, the President, and the American people. Unfortunately, Inspectors General must do all this with the agencies that often fight their every move. These entrenched bureaucracies have an interest in not seeing Inspectors General succeed--they do not want egg on their face. That is why we in Congress must make sure they have all the tools they need to get the job done and ensure that there is accountability for the billions in taxpayer dollars that are spent annually on the operation of the Executive Branch.

One growing area of concern I have seen over the years is procedural roadblocks being placed before Inspectors General to limit or prohibit their ability to do their job of protecting taxpayer dollars. One recent example relates to the Special Inspector General for the Troubled Asset Relief Program SIGTARP, Neil Barofsky. Inspector General Barofsky notified me on January 22, 2009, that he intended to begin an oversight initiative that would have improved the transparency of the Troubled Asset Relief Program, TARP. Inspector General Barofsky's plan was to collect data from TARP recipients asking them for a response outlining the use of TARP funds, copies of support documents, a description of plans to comply with executive compensation restrictions, and certification by a senior executive officer of the accuracy of the statements they make. This sounded like a legitimate plan from the Inspector General tasked by Congress with ensuring that the $700 billion handed out by the TARP program wasn't lost to fraud or abuse. However, it was shortly after this letter that Mr. Barofsky ran into procedural hurdles erected by the Office of Management and Budget,

On January 30, 2009, I asked the Inspector General for an update on his initiative when he informed me that OMB had advised the SIGTARP that he could not initiate his effort due to the restrictions in the Paperwork Reduction Act of 1980, PRA. As a result, SIGTARP requested ``emergency processing'' by OMB to consider the impact of its letter to TARP recipients. It is my understanding that OMB initially responded favorably finding that SIGTARP would not be limited by the PRA. However, OMB reversed course and withdrew the emergency approval right after it was granted.

OMB then informed SIGTARP that the PRA required he post his proposed letter online for TARP recipients to review for 15 days, wait for comments from the recipients, and then require that the SIGTARP justify to OMB that it has taken into account all the public comments. This was a significant, unnecessary roadblock that was erected at a time when American Taxpayers were asking everyone ``where did the money go.'' This type of procedural hurdle to an audit and investigation by the SIGTARP is unacceptable. Can you imagine what the very corporations that took taxpayer money would write during the comment period? It is my view that corporations that took Government money should be subjected to oversight by Inspectors General and they should not have a say in drafting or amending a letter from the Inspector General that they must respond to. This is exactly what OMB was asking of the

I am glad to report that later that same week SIGTARP Barofsky was given approval from OMB to send the letter requests to the TARP recipients without delay. However, around the same time that the letters were approved and sent, the Department of Treasury posted a comment request in the Federal Register about the SIGTARP request. Those responses were due to Treasury by April 13, 2009. While SIGTARP Barofsky was ultimately able to send his request, this uncertainty about the application of the PRA to audits, evaluations, inspections, or investigations by Inspectors General remains a significant question. This whole saga was a wakeup call for many Inspectors General. As a result, many Inspectors General have reached out to my office about this issue and the dangers the PRA could pose to their audits and investigations.

That is why I am here today to introduce legislation that will clarify the impact the PRA has on official audits, evaluations, inspections, and investigations conducted by Inspectors General. This legislation is narrowly tailored to ensure that Inspectors General are not subject to bureaucratic hurdles erected by OMB, which could be used to limit the independence and authority of Inspectors General, and most importantly information that we can garner through their work.

Specifically, the PRA currently states that agencies must receive approval for each collection request before it is implemented. Failure to get this approval provides the recipient of the request the protection to not comply with the request without penalty. The current PRA does not apply to criminal investigations, administrative actions, or investigations involving an agency against a specific individual or entities. However, it does apply to ``general'' investigations. The PRA is also silent as to whether it was intended to apply to Inspectors General and defines agency as any ``executive department, military department, Government corporation, Government controlled corporation, or other establishment in the executive branch of the Government including the Executive Office of the President, or any independent regulatory agency. The PRA does expressly exclude the Government Accountability Office and the Federal Election Commission, but not the Inspectors General.

The PRA was passed with the noble goal of reducing the impact Federal Government regulatory agencies have on small businesses and other private individuals. However, over the years the investigative and audit roles of the Inspectors General have expanded to ensure that taxpayer dollars are not lost to fraud, waste, or abuse. As a result, the important work of the Inspectors General may run directly into the PRA resulting in a slower process for audits, evaluations, and investigations, as well as potentially tipping off those being investigated by the Inspectors General and providing them time to, for example cover-up potential wrong doing.

The legislation I'm introducing today is designed to protect the PRA as well as the Inspectors General by trying to head off a potential conflict among the two statutes before it has to be decided by the courts. It simply states that the PRA shall not apply to the collection of information ``during the conduct of any investigation, audit, inspection, evaluation, or other review conducted by'' any Federal office of Inspector General. It further defines the definition of Inspector General to include: statutory Inspectors General, Federal entity Inspectors General, and any Special Inspector General. This definition also includes the Council of the Inspectors General on Integrity and Efficiency, CIGIE, created by the Inspector General Reform Act, and the Recovery, Accountability, and Transparency Board created by the stimulus bill signed into law earlier this year. These two entities have some audit and evaluation roles provided to them and should also not face procedural hurdles under the PRA when they are overseeing the various Inspectors General or Recovery programs.

All in all, this is a simple piece of legislation that I encourage all my colleagues to support. It picks up on the great work of the Inspector General Reform Act to ensure that Inspectors General are independent and free from any undue influence--procedural or substantive--when conducting audits, evaluations, inspections, or audits on behalf of the American people. I hope this legislation will receive expedited consideration and swift passage.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

There being no objection, the text of the bill was ordered to be printed in the Record, as follows:

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

Section 3518(c) of title 44, United States Code, is amended-- (1) in paragraph (1), by striking ``paragraph (2)'' and inserting ``paragraph (3)''; (2) by redesignating paragraph (2) as paragraph (3); and (3) by inserting after paragraph (1) the following: ``(2) Notwithstanding paragraph (3), this subchapter shall not apply to the collection of information during the conduct of any investigation, audit, inspection, evaluation, or other review conducted by-- ``(A) any Federal office of Inspector General, including-- ``(i) any office of Inspector General of any establishment, Federal entity, or designated Federal entity as those terms are defined under sections 12(2), 8G(a)(1), and 8G(a)(2) of the Inspector General Act of 1978 (5 U.S.C. App.), respectively; or ``(ii) any office of Special Inspector General established by statute; ``(B) the Council of the Inspectors General on Integrity and Efficiency established under section 11 of the Inspector General Act of 1978 (5 U.S.C. App.); or ``(C) the Recovery Accountability and Transparency Board established under section 1521 of division A of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5; 123 Stat. 289).''.

By Mr. DURBIN (for himself, Ms. Snowe, and Mrs. Lincoln):

S. 979. A bill to amend the Public Health Service Act to establish a nationwide health insurance purchasing pool for small businesses and the self-employed that would offer a choice of private health plans and make health coverage more affordable, predictable, and accessible; to the Committee on Finance.

Sen. Richard J. Durbin

legislator photo

Mr. President, I rise today to introduce legislation with Senators Snowe and Lincoln to make healthcare more affordable and accessible for our nation's small businesses and self-employed individuals. This bipartisan legislation is known as the Small Business Health Options Program Act, or the SHOP Act, and I am working with the Finance and HELP Committees to incorporate it into the broader healthcare reform bill the Senate is developing.

Health reform is a priority of the American people and a central element of this Congress's agenda. While more must be done, we have taken some small but important steps already.

We expanded the CHIP program to provide healthcare to an additional 4 million children who are uninsured today.

We provided assistance to laid-off workers to help them pay for health insurance under the COBRA continuation program, so that families receiving an average monthly unemployment check of $1,300 aren't expected to pay $1,100 in insurance premiums.

We included in the Recovery Act $87 billion for the Medicaid program over the next 2 years.

We provided $2 billion for community health centers, which serve more than 18 million patients.

But we have more to do. Overall, 46 million Americans are uninsured. At the beginning of this decade, fewer than 40 million people were uninsured. Over the same period, health insurance premiums have risen 4 times faster than wages.

This is the year to enact reforms to reduce healthcare costs, expand coverage, and improve the quality of the healthcare we receive.

It is not easy for small businesses and the self-employed to afford health insurance. Without the benefits of large group purchasing, double-digit rate increases are not uncommon.

The recession has made it worse. The Main Street Alliance recently polled nearly 500 small businesses in a dozen states and found that 35 percent have reduced coverage and 12 percent have dropped it altogether in the past 2 years.

More than 50 percent of the uninsured in America are in households led by someone who is either self-employed or works for a business with fewer than 100 employees.

Workers in the smallest businesses are almost three times likely to be uninsured as those who work for the largest businesses. That is not because small businesses don't want to offer health insurance; it is because insurance is more expensive for them than for large companies.

Administrative costs for health insurance are higher for small businesses than larger businesses. About 20-25 percent of a small business's premium goes to administrative expenses, compared to about 10 percent for large employers.

Small businesses are less able than large employers to spread the risk that someone will get sick. Even a single employee with a serious medical condition can cause a dramatic increase in a small business's health insurance premium.

Small businesses are also more likely to have lower wages and narrower profit margins than large businesses, making it more difficult for these employers and employees to cover the cost of health coverage.

Small business owners like Doug Mayol of Springfield, IL, and David Borris, of Northbrook, IL, know all too well the difficulty of maintaining health insurance in this struggling economy.

Since 1988, Doug Mayol has owned and operated a small business in downtown Springfield that sells cards, gifts, and other knick-knacks. He has found that his profits are at the mercy of the rising costs of healthcare. He is fortunate that his only employee is over 65 and qualifies for Medicare and also receives spousal benefits from her late husband. If this were not the case, Doug does not think he would be able to provide her with coverage.

In terms of his own insurance, Doug has a preexisting condition and fears the real possibility of becoming uninsured. Almost 30 years ago, Doug was diagnosed with a congenital heart valve defect. He has no symptoms, but without regular healthcare he is at risk of developing serious problems.

Like most Americans, his healthcare premiums have risen over the years, but recently the increases have been dramatic. In 2001, he paid $200 a month. By 2005, he was paying $400 a month. The next year, after he turned 50, his rate shot up to $750 a month.

Trying to work within the system, he chose a smaller network of providers and a higher deductible to bring his premium back down to $650. Unfortunately, last year it jumped to $1037 a month. Only by taking the highest deductible allowed, $2500, was he able to bring it down to $888. And these rates will continue to rise.

Ironically, Doug is not even a costly patient. With his high deductible, his insurance rarely kicks in, as he has never made a claim for illness or injury and has received only routine primary care. Yet more affordable insurance carriers reject him due to his preexisting condition.

Meanwhile, Doug avoids seeing a cardiologist, even though periodic visits would be a good idea, because he fears it would add another red flag to his already imperfect health record.

What kind of healthcare system is it that causes even those with coverage to avoid care? Americans need the peace-of-mind that comes with knowing that health insurance companies will not be able to reject you, or keep raising your rates, because you have a preexisting condition.

David Borris faces another dilemma. David is the owner of Hel's Kitchen Catering, an off-premise catering company located along suburban Chicago's north shore in Northbrook, IL. Over 2 decades ago, David and his wife opened their business in a 900 square foot storefront with a handful of recipes from his mother and his wife. Both David and his wife left good-paying jobs in the hospitality industry to take their shot at the American dream of owning their own business.

David now employs 25 full-time employees and has offered health insurance to them since 1992. At first, David offered to contribute 50 percent of the premium in an employee's first year and 100 percent thereafter. The company had 8 full-time employees and David felt a moral obligation to offer insurance to the people who were helping to grow his business.

Around 2002, the company started to see staggering premium increases. In 2004, the premium jumped 21 percent. In 2005, it increased by 10 percent. In 2006, the increase was 16 percent. In 2007, he was quoted a 26 percent rate hike, and only a change of carriers allowed him to hold the increase to 17 percent. In total, his premiums have doubled since 2002, forcing him to ask longtime employees to contribute toward the cost of the premiums.

Today, David insures only 13 of his 25 full-time employees--the other 12 cannot afford their 50 percent share of the premium in the first year, and the company cannot afford to pay more.

David spent almost 13 percent of his covered employees' payroll on health insurance premiums last year, and he expects he will have to ask employees to contribute more again next year.

He knows that one employee's wife has a kidney problem and another employee's son receives an expensive treatment for a health condition. Trying to maintain health coverage for his loyal workers has become a major complication as he tries to grow his business.

Both Doug and David are living the American dream as small business owners. Providing health insurance for their employees should not destroy that dream.

As Congress works to reform the healthcare system, we need to keep in mind the struggle of small business owners like Doug and David. Small businesses are the backbone of the American economy. They need to be able to count on health insurance premiums that are reasonable and predictable. They need something better than our current system offers.

That is why I am reintroducing the SHOP Act with Senators Snowe and Lincoln. Our legislation offers new hope for entrepreneurs who struggle to afford health insurance. It will make health insurance more accessible and more affordable for small businesses and the self-employed.

Our bill has three core elements: purchasing pools for small businesses and the self-employed; health insurance rating reforms; and tax credits.

Our bill would create incentives for States to establish purchasing pools and would create a national pool that we call SHOP, the Small Business Health Options Program, for small businesses with up to 100 employees and for the self-employed.

Purchasing pools will lower administrative costs, give employers and employees more private health insurance plans to choose from, and enhance competition by making it easier to compare plans.

Our bill would prohibit insurers from setting premiums based on health status in both the national SHOP pool and in States' small group markets, and would gradually reduce other sources of premium variation. These rating changes will make premiums more stable from year to year and make coverage more affordable for those who need it most.

To lower the cost of providing health coverage, our bill would provide a tax credit to small businesses with up to 50 workers who pay at least 60 percent of their employees' premiums.

The size of the tax credit would be targeted to the size of the business. A full tax credit of $1,000 for self-only coverage and $2,000 for family coverage would be available to the smallest businesses, with the value of the tax credit phased down as the size of the employer increases.

Employers who cover more than 60 percent of the premium would be rewarded with a bonus credit.

In addition, we would move to a system where individual employees can choose their own health plan instead of having their employer choose it for them. Where rating rules permit it, each worker would be able to enroll in the health plan in SHOP that best meets his or her needs.

The bill we have introduced reflects our commitment to find reasonable compromises and address the challenges faced by small employers and the self-employed. This bipartisan legislation has the support of a range of business, labor, and consumer groups.

We have worked closely with the National Federation of Independent Business, the National Association of Realtors, and SEIU in the development of the bill, and we also have the support of Families USA, the National Restaurant Association, and the Partnership for Women and Families.

We have received valuable input from the National Association of Insurance Commissioners and have taken the hard steps they have recommended to address rating issues and ensure that the approach is viable over the long haul.

Although each group that supports SHOP has its own priorities for broader health reform, this diverse coalition of stakeholders from across the political spectrum came together to address the needs of small businesses as one important component of reform.

Everyone understands that this bill is not comprehensive health reform, and none of us would stop with SHOP. However, the renewed focus on broader reform has given us an opportunity to offer SHOP as a carefully-crafted component of broader reform that addresses the specific needs of the small business community. We believe our approach is consistent with the broader conversation and can help the greater reform effort move forward on a bipartisan basis, and we look forward to including the features of SHOP in the broader bill.

In a town hall meeting in March this year, the President spoke to a crowd about the new mindset of this Administration. He talked about ``understanding that we're all in this together and that if the middle class is working well, if working people are doing well, then everybody does well.''

This bill is consistent with that thinking. Its seemingly disparate supporters may disagree on many things, but they have worked together to develop this legislation because they agree on a greater principle: that our current system is hurting everyone--families, businesses, and our economy.

We must keep working together on a bipartisan basis to try to enact legislation that will give all Americans access to affordable health insurance, and solving the healthcare challenges faced by small businesses is an important part of that process.

I look forward to working with my colleagues to enact such legislation and ensure that the healthcare needs of small businesses and all Americans are met.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

There being no objection, the text of the bill was ordered to be placed in the Record, as follows:

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

This Act may be cited as the ``Small Business Health Options Program Act of 2009'' or the ``SHOP Act''.

The Public Health Service Act (42 U.S.C. 201 et seq.) is amended by adding at the end the following:

Section 514(b)(2) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1144(b)(2)) is amended by adding at the end the following: ``(C) Notwithstanding subparagraph (A), the provisions of subsections (d)(1)(B) and (g)(2)(A) of section 3107 of the Public Health Service Act (relating to the prohibition on health-status related rating and the Federal enforcement of such provisions) shall supercede any State law that conflicts with such provisions.''.

(a) In General.--Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to credits) is amended by inserting after section 45N the following new section:

By Mr. REID:

S. 981. A bill to support research and public awareness activities with respect to inflammatory bowel disease, and for other purposes; to the Committee on Health, Education, Labor, and Pensions.

Sen. Harry Reid

legislator photo

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

There being no objection, the text of the bill was ordered to be printed in the Record, as follows:

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

This Act may be cited as the ``Inflammatory Bowel Disease Research and Awareness Act''.

Congress finds the following: (1) Crohn's disease and ulcerative colitis are serious inflammatory diseases of the gastrointestinal tract. (2) Crohn's disease may occur in any section of the gastrointestinal tract but is predominately found in the lower part of the small intestine and the large intestine. Ulcerative colitis is characterized by inflammation and ulceration of the innermost lining of the colon. Complete removal of the colon in patients with ulcerative colitis can potentially alleviate and cure symptoms. (3) Because Crohn's disease and ulcerative colitis behave similarly, they are collectively known as inflammatory bowel disease. Both diseases present a variety of symptoms, including severe diarrhea, abdominal pain with cramps, fever, arthritic joint pain, inflammation of the eye, and rectal bleeding. There is no known cause of inflammatory bowel disease, or medical cure. (4) It is estimated that up to 1,400,000 people in the United States suffer from inflammatory bowel disease, 30 percent of whom are diagnosed during their childhood years. (5) Children with inflammatory bowel disease miss school activities because of bloody diarrhea and abdominal pain, and many adults who had onset of inflammatory bowel disease as children had delayed puberty and impaired growth and have never reached their full genetic growth potential. (6) Inflammatory bowel disease patients are at high risk for developing colorectal cancer. (7) The total annual medical costs for inflammatory bowel disease patients are estimated at more than $2,000,000,000. (8) The average time from presentation of symptoms to diagnosis in children is 3 years. (9) Delayed diagnosis of inflammatory bowel disease frequently results in more-active disease associated with increased morbidity and complications. (10) Congress has appropriated $3,480,000 from fiscal year 2005 to fiscal year 2009 for epidemiology research on inflammatory bowel disease through the Centers for Disease Control and Prevention. (11) The National Institutes of Health National Commission on Digestive Diseases issued comprehensive research goals related to inflammatory bowel disease in its April 2009 report to Congress and the American public entitled; ``Opportunities and Challenges in Digestive Diseases Research: Recommendations of the National Commission on Digestive Diseases''.

Part B of title III of the Public Health Service Act (42 U.S.C. 243 et seq.) is amended by inserting after section 320A the following:

(a) Sense of Congress.--It is the sense of Congress that-- (1) the Secretary of Health and Human Services, acting through the Director of the National Institutes of Health and the Director of the National Institute of Diabetes and Digestive and Kidney Diseases (in this section referred to as the Institute), should aggressively support basic, translational, and clinical research designed to meet the research goals for inflammatory bowel disease included in the National Institutes of Health National Commission on Digestive Diseases report entitled ``Opportunities and Challenges in Digestive Diseases Research: Recommendations of the National Commission on Digestive Diseases'', which shall include-- (A) establishing an objective basis for determining clinical diagnosis, detailed phenotype, and disease activity in inflammatory bowel disease; (B) developing an individualized approach to inflammatory bowel disease risk evaluation and management based on genetic susceptibility; (C) modulating the intestinal microflora to prevent or control inflammatory bowel disease; (D) effectively modulating the mucosal immune system to prevent or ameliorate inflammatory bowel disease; (E) sustaining the health of the mucosal surface; (F) promoting regeneration and repair of injury in inflammatory bowel disease; (G) providing effective tools for clinical evaluation and intervention in inflammatory bowel disease; and (H) ameliorating or preventing adverse effects of inflammatory bowel disease on growth and development in children and adolescents; (2) the Institute should support the training of qualified health professionals in biomedical research focused on inflammatory bowel disease, including pediatric investigators; and (3) the Institute should continue its strong collaboration with medical and patient organizations concerned with inflammatory bowel disease and seek opportunities to promote research identified in the scientific agendas ``Challenges in Inflammatory Bowel Disease Research'' (Crohn's and Colitis Foundation of America) and ``Chronic Inflammatory Bowel Disease'' (North American Society for Pediatric Gastroenterology, Hepatology and Nutrition). (b) Biennial Reports.--As part of the biennial report submitted under section 403 of the Public Health Service Act (42 U.S.C. 283), the Secretary of Health and Human Services shall include information on the status of inflammatory bowel disease research at the National Institutes of Health.

By Mr. REID (for Mr. Kennedy (for himself, Mr. Dodd, Ms. Collins, Mr. Harkin, Ms. Snowe, Mr. Durbin, Mr. Lugar, Ms. Mikulski, Mr. Reed, Mrs. Murray, Mr. Reid, Mr. Bingaman, Mr. Sanders, Mr. Brown, Mr. Casey, Mr. Merkley, Mr. Whitehouse, Mr. Leahy, Mr. Lautenberg, Mr. Kerry, Mr. Schumer, Mr. Lieberman, Mrs. Feinstein, Mr. Levin, Mr. Baucus, Mr. Wyden, Mr. Akaka, Mr. Nelson, of Florida, Ms. Landrieu, Mr. Carper, Mrs. Gillibrand, Mr. Bennet, Mr. Begich, Mr. Burris, Mr. Kaufman, Mr. Udall, of New Mexico, Mr. Udall, of Colorado, Mr. Kohl, Mr. Feingold, Ms. Cantwell, and Mrs. Lincoln)):

S. 982. A bill to protect the public health by providing the Food and Drug Administration with certain authority to regulate tobacco products; to the Committee on Health, Education, Labor, and Pensions.

Sen. Edward M. Kennedy

legislator photo

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

There being no objection, the text of the bill was ordered to be placed in the Record, as follows:

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

(a) Short Title.--This Act may be cited as the ``Family Smoking Prevention and Tobacco Control Act''. (b) Table of Contents.--The table of contents of this Act is as follows:Sec. 1. Short title; table of contents.Sec. 2. Findings.Sec. 3. Purpose.Sec. 4. Scope and effect.Sec. 5. Severability.

The Congress finds the following: (1) The use of tobacco products by the Nation's children is a pediatric disease of considerable proportions that results in new generations of tobacco-dependent children and adults. (2) A consensus exists within the scientific and medical communities that tobacco products are inherently dangerous and cause cancer, heart disease, and other serious adverse health effects. (3) Nicotine is an addictive drug. (4) Virtually all new users of tobacco products are under the minimum legal age to purchase such products. (5) Tobacco advertising and marketing contribute significantly to the use of nicotine-containing tobacco products by adolescents. (6) Because past efforts to restrict advertising and marketing of tobacco products have failed adequately to curb tobacco use by adolescents, comprehensive restrictions on the sale, promotion, and distribution of such products are needed. (7) Federal and State governments have lacked the legal and regulatory authority and resources they need to address comprehensively the public health and societal problems caused by the use of tobacco products. (8) Federal and State public health officials, the public health community, and the public at large recognize that the tobacco industry should be subject to ongoing oversight. (9) Under article I, section 8 of the Constitution, the Congress is vested with the responsibility for regulating interstate commerce and commerce with Indian tribes. (10) The sale, distribution, marketing, advertising, and use of tobacco products are activities in and substantially affecting interstate commerce because they are sold, marketed, advertised, and distributed in interstate commerce on a nationwide basis, and have a substantial effect on the Nation's economy. (11) The sale, distribution, marketing, advertising, and use of such products substantially affect interstate commerce through the health care and other costs attributable to the use of tobacco products. (12) It is in the public interest for Congress to enact legislation that provides the Food and Drug Administration with the authority to regulate tobacco products and the advertising and promotion of such products. The benefits to the American people from enacting such legislation would be significant in human and economic terms. (13) Tobacco use is the foremost preventable cause of premature death in America. It causes over 400,000 deaths in the United States each year, and approximately 8,600,000 Americans have chronic illnesses related to smoking. (14) Reducing the use of tobacco by minors by 50 percent would prevent well over 10,000,000 of today's children from becoming regular, daily smokers, saving over 3,000,000 of them from premature death due to tobacco-induced disease. Such a reduction in youth smoking would also result in approximately $75,000,000,000 in savings attributable to reduced health care costs. (15) Advertising, marketing, and promotion of tobacco products have been especially directed to attract young persons to use tobacco products, and these efforts have resulted in increased use of such products by youth. Past efforts to oversee these activities have not been successful in adequately preventing such increased use. (16) In 2005, the cigarette manufacturers spent more than $13,000,000,000 to attract new users, retain current users, increase current consumption, and generate favorable long- term attitudes toward smoking and tobacco use. (17) Tobacco product advertising often misleadingly portrays the use of tobacco as socially acceptable and healthful to minors. (18) Tobacco product advertising is regularly seen by persons under the age of 18, and persons under the age of 18 are regularly exposed to tobacco product promotional efforts. (19) Through advertisements during and sponsorship of sporting events, tobacco has become strongly associated with sports and has become portrayed as an integral part of sports and the healthy lifestyle associated with rigorous sporting activity. (20) Children are exposed to substantial and unavoidable tobacco advertising that leads to favorable beliefs about tobacco use, plays a role in leading young people to overestimate the prevalence of tobacco use, and increases the number of young people who begin to use tobacco. (21) The use of tobacco products in motion pictures and other mass media glamorizes its use for young people and encourages them to use tobacco products. (22) Tobacco advertising expands the size of the tobacco market by increasing consumption of tobacco products including tobacco use by young people. (23) Children are more influenced by tobacco marketing than adults: more than 80 percent of youth smoke three heavily marketed brands, while only 54 percent of adults, 26 and older, smoke these same brands. (24) Tobacco company documents indicate that young people are an important and often crucial segment of the tobacco market. Children, who tend to be more price sensitive than adults, are influenced by advertising and promotion practices that result in drastically reduced cigarette prices. (25) Comprehensive advertising restrictions will have a positive effect on the smoking rates of young people. (26) Restrictions on advertising are necessary to prevent unrestricted tobacco advertising from undermining legislation prohibiting access to young people and providing for education about tobacco use. (27) International experience shows that advertising regulations that are stringent and comprehensive have a greater impact on overall tobacco use and young people's use than weaker or less comprehensive ones. (28) Text only requirements, although not as stringent as a ban, will help reduce underage use of tobacco products while preserving the informational function of advertising. (29) It is in the public interest for Congress to adopt legislation to address the public health crisis created by actions of the tobacco industry. (30) The final regulations promulgated by the Secretary of Health and Human Services in the August 28, 1996, issue of the Federal Register (61 Fed. Reg. 44615-44618) for inclusion as part 897 of title 21, Code of Federal Regulations, are consistent with the first amendment to the United States Constitution and with the standards set forth in the amendments made by this subtitle for the regulation of tobacco products by the Food and Drug Administration, and the restriction on the sale and distribution of, including access to and the advertising and promotion of, tobacco products contained in such regulations are substantially related to accomplishing the public health goals of this Act. (31) The regulations described in paragraph (30) will directly and materially advance the Federal Government's substantial interest in reducing the number of children and adolescents who use cigarettes and smokeless tobacco and in preventing the life-threatening health consequences associated with tobacco use. An overwhelming majority of Americans who use tobacco products begin using such products while they are minors and become addicted to the nicotine in those products before reaching the age of 18. Tobacco advertising and promotion play a crucial role in the decision of these minors to begin using tobacco products. Less restrictive and less comprehensive approaches have not and will not be effective in reducing the problems addressed by such regulations. The reasonable restrictions on the advertising and promotion of tobacco products contained in such regulations will lead to a significant decrease in the number of minors using and becoming addicted to those products. (32) The regulations described in paragraph (30) impose no more extensive restrictions on communication by tobacco manufacturers and sellers than are necessary to reduce the number of children and adolescents who use cigarettes and smokeless tobacco and to prevent the life-threatening health consequences associated with tobacco use. Such regulations are narrowly tailored to restrict those advertising and promotional practices which are most likely to be seen or heard by youth and most likely to entice them into tobacco use, while affording tobacco manufacturers and sellers ample opportunity to convey information about their products to adult consumers. (33) Tobacco dependence is a chronic disease, one that typically requires repeated interventions to achieve long- term or permanent abstinence. (34) Because the only known safe alternative to smoking is cessation, interventions should target all smokers to help them quit completely. (35) Tobacco products have been used to facilitate and finance criminal activities both domestically and internationally. Illicit trade of tobacco products has been linked to organized crime and terrorist groups. (36) It is essential that the Food and Drug Administration review products sold or distributed for use to reduce risks or exposures associated with tobacco products and that it be empowered to review any advertising and labeling for such products. It is also essential that manufacturers, prior to marketing such products, be required to demonstrate that such products will meet a series of rigorous criteria, and will benefit the health of the population as a whole, taking into account both users of tobacco products and persons who do not currently use tobacco products. (37) Unless tobacco products that purport to reduce the risks to the public of tobacco use actually reduce such risks, those products can cause substantial harm to the public health to the extent that the individuals, who would otherwise not consume tobacco products or would consume such products less, use tobacco products purporting to reduce risk. Those who use products sold or distributed as modified risk products that do not in fact reduce risk, rather than quitting or reducing their use of tobacco products, have a substantially increased likelihood of suffering disability and premature death. The costs to society of the widespread use of products sold or distributed as modified risk products that do not in fact reduce risk or that increase risk include thousands of unnecessary deaths and injuries and huge costs to our health care system. (38) As the National Cancer Institute has found, many smokers mistakenly believe that ``low tar'' and ``light'' cigarettes cause fewer health problems than other cigarettes. As the National Cancer Institute has also found, mistaken beliefs about the health consequences of smoking ``low tar'' and ``light'' cigarettes can reduce the motivation to quit smoking entirely and thereby lead to disease and death. (39) Recent studies have demonstrated that there has been no reduction in risk on a population-wide basis from ``low tar'' and ``light'' cigarettes, and such products may actually increase the risk of tobacco use. (40) The dangers of products sold or distributed as modified risk tobacco products that do not in fact reduce risk are so high that there is a compelling governmental interest in ensuring that statements about modified risk tobacco products are complete, accurate, and relate to the overall disease risk of the product. (41) As the Federal Trade Commission has found, consumers have misinterpreted advertisements in which one product is claimed to be less harmful than a comparable product, even in the presence of disclosures and advisories intended to provide clarification. (42) Permitting manufacturers to make unsubstantiated statements concerning modified risk tobacco products, whether express or implied, even if accompanied by disclaimers would be detrimental to the public health. (43) The only way to effectively protect the public health from the dangers of unsubstantiated modified risk tobacco products is to empower the Food and Drug Administration to require that products that tobacco manufacturers sold or distributed for risk reduction be reviewed in advance of marketing, and to require that the evidence relied on to support claims be fully verified. (44) The Food and Drug Administration is a regulatory agency with the scientific expertise to identify harmful substances in products to which consumers are exposed, to design standards to limit exposure to those substances, to evaluate scientific studies supporting claims about the safety of products, and to evaluate the impact of labels, labeling, and advertising on consumer behavior in order to reduce the risk of harm and promote understanding of the impact of the product on health. In connection with its mandate to promote health and reduce the risk of harm, the Food and Drug Administration routinely makes decisions about whether and how products may be marketed in the United States. (45) The Federal Trade Commission was created to protect consumers from unfair or deceptive acts or practices, and to regulate unfair methods of competition. Its focus is on those marketplace practices that deceive or mislead consumers, and those that give some competitors an unfair advantage. Its mission is to regulate activities in the marketplace. Neither the Federal Trade Commission nor any other Federal agency except the Food and Drug Administration possesses the scientific expertise needed to implement effectively all provisions of the Family Smoking Prevention and Tobacco Control Act. (46) If manufacturers state or imply in communications directed to consumers through the media or through a label, labeling, or advertising, that a tobacco product is approved or inspected by the Food and Drug Administration or complies with Food and Drug Administration standards, consumers are likely to be confused and misled. Depending upon the particular language used and its context, such a statement could result in consumers being misled into believing that the product is endorsed by the Food and Drug Administration for use or in consumers being misled about the harmfulness of the product because of such regulation, inspection, approval, or compliance. (47) In August 2006 a United States district court judge found that the major United States cigarette companies continue to target and market to youth. USA v. Philip Morris, USA, Inc., et al. (Civil Action No. 99-2496 (GK), August 17,

The purposes of this Act are-- (1) to provide authority to the Food and Drug Administration to regulate tobacco products under the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.), by recognizing it as the primary Federal regulatory authority with respect to the manufacture, marketing, and distribution of tobacco products as provided for in this Act; (2) to ensure that the Food and Drug Administration has the authority to address issues of particular concern to public health officials, especially the use of tobacco by young people and dependence on tobacco; (3) to authorize the Food and Drug Administration to set national standards controlling the manufacture of tobacco products and the identity, public disclosure, and amount of ingredients used in such products; (4) to provide new and flexible enforcement authority to ensure that there is effective oversight of the tobacco industry's efforts to develop, introduce, and promote less harmful tobacco products; (5) to vest the Food and Drug Administration with the authority to regulate the levels of tar, nicotine, and other harmful components of tobacco products; (6) in order to ensure that consumers are better informed, to require tobacco product manufacturers to disclose research which has not previously been made available, as well as research generated in the future, relating to the health and dependency effects or safety of tobacco products; (7) to continue to permit the sale of tobacco products to adults in conjunction with measures to ensure that they are not sold or accessible to underage purchasers; (8) to impose appropriate regulatory controls on the tobacco industry; (9) to promote cessation to reduce disease risk and the social costs associated with tobacco-related diseases; and (10) to strengthen legislation against illicit trade in tobacco products.

(a) Intended Effect.--Nothing in this Act (or an amendment made by this Act) shall be construed to-- (1) establish a precedent with regard to any other industry, situation, circumstance, or legal action; or (2) affect any action pending in Federal, State, or Tribal court, or any agreement, consent decree, or contract of any kind. (b) Agricultural Activities.--The provisions of this Act (or an amendment made by this Act) which authorize the Secretary to take certain actions with regard to tobacco and tobacco products shall not be construed to affect any authority of the Secretary of Agriculture under existing law regarding the growing, cultivation, or curing of raw tobacco. (c) Revenue Activities.--The provisions of this Act (or an amendment made by this Act) which authorize the Secretary to take certain actions with regard to tobacco products shall not be construed to affect any authority of the Secretary of the Treasury under chapter 52 of the Internal Revenue Code of

If any provision of this Act, of the amendments made by this Act, or of the regulations promulgated under this Act (or under such amendments), or the application of any such provision to any person or circumstance is held to be invalid, the remainder of this Act, such amendments and such regulations, and the application of such provisions to any other person or circumstance shall not be affected and shall continue to be enforced to the fullest extent possible.

(a) Definition of Tobacco Products.--Section 201 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321) is amended by adding at the end the following: ``(rr)(1) The term `tobacco product' means any product made or derived from tobacco that is intended for human consumption, including any component, part, or accessory of a tobacco product (except for raw materials other than tobacco used in manufacturing a component, part, or accessory of a tobacco product). ``(2) The term `tobacco product' does not mean an article that is a drug under subsection (g)(1), a device under subsection (h), or a combination product described in section 503(g). ``(3) The products described in paragraph (2) shall be subject to chapter V of this Act. ``(4) A tobacco product shall not be marketed in combination with any other article or product regulated under this Act (including a drug, biologic, food, cosmetic, medical device, or a dietary supplement).''. (b) FDA Authority Over Tobacco Products.--The Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.) is amended-- (1) by redesignating chapter IX as chapter X; (2) by redesignating sections 901 through 910 as sections 1001 through 1010; and (3) by inserting after chapter VIII the following:

``(a) Requirement.--Each tobacco product manufacturer or importer, or agents thereof, shall submit to the Secretary the following information: ``(1) Not later than 6 months after the date of enactment of the Family Smoking Prevention and Tobacco Control Act, a listing of all ingredients, including tobacco, substances, compounds, and additives that are, as of such date, added by the manufacturer to the tobacco, paper, filter, or other part of each tobacco product by brand and by quantity in each brand and subbrand. ``(2) A description of the content, delivery, and form of nicotine in each tobacco product measured in milligrams of nicotine in accordance with regulations promulgated by the Secretary in accordance with section 4(e) of the Federal Cigarette Labeling and Advertising Act. ``(3) Beginning 3 years after the date of enactment of the Family Smoking Prevention and Tobacco Control Act, a listing of all constituents, including smoke constituents as applicable, identified by the Secretary as harmful or potentially harmful to health in each tobacco product, and as applicable in the smoke of each tobacco product, by brand and by quantity in each brand and subbrand. Effective beginning 3 years after such date of enactment, the manufacturer, importer, or agent shall comply with regulations promulgated under section 915 in reporting information under this paragraph, where applicable. ``(4) Beginning 6 months after the date of enactment of the Family Smoking Prevention and Tobacco Control Act, all documents developed after such date of enactment that relate to health, toxicological, behavioral, or physiologic effects of current or future tobacco products, their constituents (including smoke constituents), ingredients, components, and additives. ``(b) Data Submission.--At the request of the Secretary, each tobacco product manufacturer or importer of tobacco products, or agents thereof, shall submit the following: ``(1) Any or all documents (including underlying scientific information) relating to research activities, and research findings, conducted, supported, or possessed by the manufacturer (or agents thereof) on the health, toxicological, behavioral, or physiologic effects of tobacco products and their constituents (including smoke constituents), ingredients, components, and additives. ``(2) Any or all documents (including underlying scientific information) relating to research activities, and research findings, conducted, supported, or possessed by the manufacturer (or agents thereof) that relate to the issue of whether a reduction in risk to health from tobacco products can occur upon the employment of technology available or known to the manufacturer. ``(3) Any or all documents (including underlying scientific or financial information) relating to marketing research involving the use of tobacco products or marketing practices and the effectiveness of such practices used by tobacco manufacturers and distributors. An importer of a tobacco product not manufactured in the United States shall supply the information required of a tobacco product manufacturer under this subsection. ``(c) Time for Submission.-- ``(1) In general.--At least 90 days prior to the delivery for introduction into interstate commerce of a tobacco product not on the market on the date of enactment of the Family Smoking Prevention and Tobacco Control Act, the manufacturer of such product shall provide the information required under subsection (a). ``(2) Disclosure of additive.--If at any time a tobacco product manufacturer adds to its tobacco products a new tobacco additive or increases the quantity of an existing tobacco additive, the manufacturer shall, except as provided in paragraph (3), at least 90 days prior to such action so advise the Secretary in writing. ``(3) Disclosure of other actions.--If at any time a tobacco product manufacturer eliminates or decreases an existing additive, or adds or increases an additive that has by regulation been designated by the Secretary as an additive that is not a human or animal carcinogen, or otherwise harmful to health under intended conditions of use, the manufacturer shall within 60 days of such action so advise the Secretary in writing. ``(d) Data List.-- ``(1) In general.--Not later than 3 years after the date of enactment of the Family Smoking Prevention and Tobacco Control Act, and annually thereafter, the Secretary shall publish in a format that is understandable and not misleading to a lay person, and place on public display (in a manner determined by the Secretary) the list established under subsection (e). ``(2) Consumer research.--The Secretary shall conduct periodic consumer research to ensure that the list published under paragraph (1) is not misleading to lay persons. Not later than 5 years after the date of enactment of the Family Smoking Prevention and Tobacco Control Act, the Secretary shall submit to the appropriate committees of Congress a report on the results of such research, together with recommendations on whether such publication should be continued or modified. ``(e) Data Collection.--Not later than 24 months after the date of enactment of the Family Smoking Prevention and Tobacco Control Act, the Secretary shall establish, and periodically revise as appropriate, a list of harmful and potentially harmful constituents, including smoke constituents, to health in each tobacco product by brand and by quantity in each brand and subbrand. The Secretary shall publish a public notice requesting the submission by interested persons of scientific and other information concerning the harmful and potentially harmful constituents in tobacco products and tobacco smoke.

(a) Cigarettes and Smokeless Tobacco.-- (1) In general.--On the first day of publication of the Federal Register that is 180 days or more after the date of enactment of this Act, the Secretary of Health and Human Services shall publish in the Federal Register a final rule regarding cigarettes and smokeless tobacco, which-- (A) is deemed to be issued under chapter 9 of the Federal Food, Drug, and Cosmetic Act, as added by section 101 of this Act; and (B) shall be deemed to be in compliance with all applicable provisions of chapter 5 of title 5, United States Code, and all other provisions of law relating to rulemaking procedures. (2) Contents of rule.--Except as provided in this subsection, the final rule published under paragraph (1), shall be identical in its provisions to part 897 of the regulations promulgated by the Secretary of Health and Human Services in the August 28, 1996, issue of the Federal Register (61 Fed. Reg., 44615-44618). Such rule shall-- (A) provide for the designation of jurisdictional authority that is in accordance with this subsection in accordance with this Act and the amendments made by this Act; (B) strike Subpart C--Labels and section 897.32(c); (C) strike paragraphs (a), (b), and (i) of section 897.3 and insert definitions of the terms ``cigarette'', ``cigarette tobacco,'', and ``smokeless tobacco'' as defined in section 900 of the Federal Food, Drug, and Cosmetic Act; (D) insert ``or roll-your-own paper'' in section 897.34(a) after ``other than cigarettes or smokeless tobacco''; (E) include such modifications to section 897.30(b), if any, that the Secretary determines are appropriate in light of governing First Amendment case law, including the decision of the Supreme Court of the United States in Lorillard Tobacco Co. v. Reilly (533 U.S. 525 (2201)); (F) become effective on the date that is 1 year after the date of enactment of this Act; (G) amend paragraph (d) of section 897.16 to read as follows: ``(d)(1) Except as provided in subparagraph (2), no manufacturer, distributor, or retailer may distribute or cause to be distributed any free samples of cigarettes, smokeless tobacco, or other tobacco products (as such term is defined in section 201 of the Federal Food, Drug, and Cosmetic Act). ``(2)(A) Subparagraph (1) does not prohibit a manufacturer, distributor, or retailer from distributing or causing to be distributed free samples of smokeless tobacco in a qualified adult-only facility. ``(B) This subparagraph does not affect the authority of a State or local government to prohibit or otherwise restrict the distribution of free samples of smokeless tobacco. ``(C) For purposes of this paragraph, the term `qualified adult-only facility' means a facility or restricted area that-- ``(i) requires each person present to provide to a law enforcement officer (whether on or off duty) or to a security guard licensed by a governmental entity government-issued identification showing a photograph and at least the minimum age established by applicable law for the purchase of smokeless tobacco; ``(ii) does not sell, serve, or distribute alcohol; ``(iii) is not located adjacent to or immediately across from (in any direction) a space that is used primarily for youth-oriented marketing, promotional, or other activities; ``(iv) is a temporary structure constructed, designated, and operated as a distinct enclosed area for the purpose of distributing free samples of smokeless tobacco in accordance with this subparagraph; and ``(v) is enclosed by a barrier that-- ``(I) is constructed of, or covered with, an opaque material (except for entrances and exits); ``(II) extends from no more than 12 inches above the ground or floor (which area at the bottom of the barrier must be covered with material that restricts visibility but may allow airflow) to at least 8 feet above the ground or floor (or to the ceiling); and ``(III) prevents persons outside the qualified adult-only facility from seeing into the qualified adult-only facility, unless they make unreasonable efforts to do so; and ``(vi) does not display on its exterior-- ``(I) any tobacco product advertising; ``(II) a brand name other than in conjunction with words for an area or enclosure to identify an adult-only facility; or ``(III) any combination of words that would imply to a reasonable observer that the manufacturer, distributor, or retailer has a sponsorship that would violate section 897.34(c). ``(D) Distribution of samples of smokeless tobacco under this subparagraph permitted to be taken out of the qualified adult-only facility shall be limited to 1 package per adult consumer containing no more than 0.53 ounces (15 grams) of smokeless tobacco. If such package of smokeless tobacco contains individual portions of smokeless tobacco, the individual portions of smokeless tobacco shall not exceed 8 individual portions and the collective weight of such individual portions shall not exceed 0.53 ounces (15 grams). Any manufacturer, distributor, or retailer who distributes or causes to be distributed free samples also shall take reasonable steps to ensure that the above amounts are limited to one such package per adult consumer per day. ``(3) Notwithstanding subparagraph (2), no manufacturer, distributor, or retailer may distribute or cause to be distributed any free samples of smokeless tobacco-- ``(A) to a sports team or entertainment group; or ``(B) at any football, basketball, baseball, soccer, or hockey event or any other sporting or entertainment event determined by the Secretary to be covered by this subparagraph. ``(4) The Secretary shall implement a program to ensure compliance with this paragraph and submit a report to the Congress on such compliance not later than 18 months after the date of enactment of the Family Smoking Prevention and Tobacco Control Act. ``(5) Nothing in this paragraph shall be construed to authorize any person to distribute or cause to be distributed any sample of a tobacco product to any individual who has not attained the minimum age established by applicable law for the purchase of such product.''. (3) Amendments to rule.--Prior to making amendments to the rule published under paragraph (1), the Secretary shall promulgate a proposed rule in accordance with chapter 5 of title 5, United States Code. (4) Rule of construction.--Except as provided in paragraph (3), nothing in this section shall be construed to limit the authority of the Secretary to amend, in accordance with chapter 5 of title 5, United States Code, the regulation promulgated pursuant to this section, including the provisions of such regulation relating to distribution of free samples. (5) Enforcement of retail sale provisions.--The Secretary of Health and Human Services shall ensure that the provisions of this Act, the amendments made by this Act, and the implementing regulations (including such provisions, amendments, and regulations relating to the retail sale of tobacco products) are enforced with respect to the United States and Indian tribes. (6) Qualified adult-only facility.--A qualified adult-only facility (as such term is defined in section 897.16(d) of the final rule published under paragraph (1)) that is also a retailer and that commits a violation as a retailer shall not be subject to the limitations in section 103(q) and shall be subject to penalties applicable to a qualified adult-only facility. (7) Congressional review provisions.--Section 801 of title 5, United States Code, shall not apply to the final rule published under paragraph

(a) Amendment of Federal Food, Drug, and Cosmetic Act.-- Except as otherwise expressly provided, whenever in this section an amendment is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference is to a section or other provision of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.). (b) Section 301.--Section 301 (21 U.S.C. 331) is amended-- (1) in subsection (a), by inserting ``tobacco product,'' after ``device,''; (2) in subsection (b), by inserting ``tobacco product,'' after ``device,''; (3) in subsection (c), by inserting ``tobacco product,'' after ``device,''; (4) in subsection (e)-- (A) by striking the period after ``572(i)''; and (B) by striking ``or 761 or the refusal to permit access to'' and inserting ``761, 909, or 920 or the refusal to permit access to''; (5) in subsection (g), by inserting ``tobacco product,'' after ``device,''; (6) in subsection (h), by inserting ``tobacco product,'' after ``device,''; (7) in subsection (j)-- (A) by striking the period after ``573''; and (B) by striking ``708, or 721'' and inserting ``708, 721, 904, 905, 906, 907, 908, 909, or 920(b)''; (8) in subsection (k), by inserting ``tobacco product,'' after ``device,''; (9) by striking subsection (p) and inserting the following: ``(p) The failure to register in accordance with section 510 or 905, the failure to provide any information required by section 510(j), 510(k), 905(i), or 905(j), or the failure to provide a notice required by section 510(j)(2) or 905(i)(3).''; (10) by striking subsection (q)(1) and inserting the following: ``(q)(1) The failure or refusal-- ``(A) to comply with any requirement prescribed under section 518, 520(g), 903(b), 907, 908, or 916; ``(B) to furnish any notification or other material or information required by or under section 519, 520(g), 904, 909, or 920; or ``(C) to comply with a requirement under section 522 or

The Secretary of Health and Human Services shall-- (1) convene an expert panel to conduct a study on the public health implications of raising the minimum age to purchase tobacco products; and (2) not later than 5 years after the date of enactment of this Act, submit a report to the Congress on the results of such study.

(a) Action Plan.-- (1) Development.--Not later than 6 months after the date of enactment of this Act, the Secretary of Health and Human Services (in this section referred to as the ``Secretary'') shall develop and publish an action plan to enforce restrictions adopted pursuant to section 906 of the Federal Food, Drug, and Cosmetic Act, as added by section 101(b) of this Act, or pursuant to section 102(a) of this Act, on promotion and advertising of menthol and other cigarettes to youth. (2) Consultation.--The action plan required by paragraph (1) shall be developed in consultation with public health organizations and other stakeholders with demonstrated expertise and experience in serving minority communities. (3) Priority.--The action plan required by paragraph (1) shall include provisions designed to ensure enforcement of the restrictions described in paragraph (1) in minority communities. (b) State and Local Activities.-- (1) Information on authority.--Not later than 3 months after the date of enactment of this Act, the Secretary shall inform State, local, and tribal governments of the authority provided to such entities under section 5(c) of the Federal Cigarette Labeling and Advertising Act, as added by section 203 of this Act, or preserved by such entities under section 916 of the Federal Food, Drug, and Cosmetic Act, as added by section 101(b) of this Act. (2) Community assistance.--At the request of communities seeking assistance to prevent underage tobacco use, the Secretary shall provide such assistance, including assistance with strategies to address the prevention of underage tobacco use in communities with a disproportionate use of menthol cigarettes by minors.

(a) Amendment.--Section 4 of the Federal Cigarette Labeling and Advertising Act (15 U.S.C. 1333) is amended to read as follows:

(a) Preemption.--Section 5(a) of the Federal Cigarette Labeling and Advertising Act (15 U.S.C. 1334(a)) is amended by striking ``No'' and inserting ``Except to the extent the Secretary requires additional or different statements on any cigarette package by a regulation, by an order, by a standard, by an authorization to market a product, or by a condition of marketing a product, pursuant to the Family Smoking Prevention and Tobacco Control Act (and the amendments made by that Act), or as required under section 903(a)(2) or section 920(a) of the Federal Food, Drug, and Cosmetic Act, no''. (b) Change in Required Statements.--Section 4 of the Federal Cigarette Labeling and Advertising Act (15 U.S.C. 1333), as amended by section 201, is further amended by adding at the end the following: ``(d) Change in Required Statements.--The Secretary through a rulemaking conducted under section 553 of title 5, United States Code-- ``(1) shall issue regulations within 24 months of the date of enactment of the Family Smoking Prevention and Tobacco Control Act that require color graphics depicting the negative health consequences of smoking to accompany label requirements; and ``(2) may thereafter adjust the format, type size, color graphics, and text of any of the label requirements, or establish the format, type size, and text of any other disclosures required under the Federal Food, Drug, and Cosmetic Act, if the Secretary finds that such a change would promote greater public understanding of the risks associated with the use of tobacco products.''.

Section 5 of the Federal Cigarette Labeling and Advertising Act (15 U.S.C. 1334) is amended by adding at the end the following: ``(c) Exception.--Notwithstanding subsection (b), a State or locality may enact statutes and promulgate regulations, based on smoking and health, that take effect after the effective date of the Family Smoking Prevention and Tobacco Control Act, imposing specific bans or restrictions on the time, place, and manner, but not content, of the advertising or promotion of any cigarettes.''.

(a) Amendment.--Section 3 of the Comprehensive Smokeless Tobacco Health Education Act of 1986 (15 U.S.C. 4402) is amended to read as follows:

(a) In General.--Section 3 of the Comprehensive Smokeless Tobacco Health Education Act of 1986 (15 U.S.C. 4402), as amended by section 204, is further amended by adding at the end the following: ``(d) Authority To Revise Warning Label Statements.--The Secretary may, by a rulemaking conducted under section 553 of title 5, United States Code, adjust the format, type size, and text of any of the label requirements, require color graphics to accompany the text, increase the required label area from 30 percent up to 50 percent of the front and rear panels of the package, or establish the format, type size, and text of any other disclosures required under the Federal Food, Drug, and Cosmetic Act, if the Secretary finds that such a change would promote greater public understanding of the risks associated with the use of smokeless tobacco products.''. (b) Preemption.--Section 7(a) of the Comprehensive Smokeless Tobacco Health Education Act of 1986 (15 U.S.C. 4406(a)) is amended by striking ``No'' and inserting ``Except as provided in the Family Smoking Prevention and Tobacco Control Act (and the amendments made by that Act), no''.

Section 4 of the Federal Cigarette Labeling and Advertising Act (15 U.S.C. 1333), as amended by sections 201 and 202, is further amended by adding at the end the following: ``(e) Tar, Nicotine, and Other Smoke Constituent Disclosure.-- ``(1) In general.--The Secretary shall, by a rulemaking conducted under section 553 of title 5, United States Code, determine (in the Secretary's sole discretion) whether cigarette and other tobacco product manufacturers shall be required to include in the area of each cigarette advertisement specified by subsection (b) of this section, or on the package label, or both, the tar and nicotine yields of the advertised or packaged brand. Any such disclosure shall be in accordance with the methodology established under such regulations, shall conform to the type size requirements of subsection (b) of this section, and shall appear within the area specified in subsection (b) of this section. ``(2) Resolution of differences.--Any differences between the requirements established by the Secretary under paragraph (1) and tar and nicotine yield reporting requirements established by the Federal Trade Commission shall be resolved by a memorandum of understanding between the Secretary and the Federal Trade Commission. ``(3) Cigarette and other tobacco product constituents.--In addition to the disclosures required by paragraph (1), the Secretary may, under a rulemaking conducted under section 553 of title 5, United States Code, prescribe disclosure requirements regarding the level of any cigarette or other tobacco product constituent including any smoke constituent. Any such disclosure may be required if the Secretary determines that disclosure would be of benefit to the public health, or otherwise would increase consumer awareness of the health consequences of the use of tobacco products, except that no such prescribed disclosure shall be required on the face of any cigarette package or advertisement. Nothing in this section shall prohibit the Secretary from requiring such prescribed disclosure through a cigarette or other tobacco product package or advertisement insert, or by any other means under the Federal Food, Drug, and Cosmetic Act. ``(4) Retailers.--This subsection applies to a retailer only if that retailer is responsible for or directs the label statements required under this section.''. TITLE III--PREVENTION OF ILLICIT TRADE IN TOBACCO PRODUCTS

Chapter IX of the Federal Food, Drug, and Cosmetic Act, as added by section 101, is further amended by adding at the end the following:

(a) Study.--The Comptroller General of the United States shall conduct a study of cross-border trade in tobacco products to-- (1) collect data on cross-border trade in tobacco products, including illicit trade and trade of counterfeit tobacco products and make recommendations on the monitoring of such trade; (2) collect data on cross-border advertising (any advertising intended to be broadcast, transmitted, or distributed from the United States to another country) of tobacco products and make recommendations on how to prevent or eliminate, and what technologies could help facilitate the elimination of, cross-border advertising; and (3) collect data on the health effects (particularly with respect to individuals under 18 years of age) resulting from cross-border trade in tobacco products, including the health effects resulting from-- (A) the illicit trade of tobacco products and the trade of counterfeit tobacco products; and (B) the differing tax rates applicable to tobacco products. (b) Report.--Not later than 18 months after the date of enactment of this Act, the Comptroller General of the United States shall submit to the Committee on Health, Education, Labor, and Pensions of the Senate and the Committee on Energy and Commerce of the House of Representatives a report on the study described in subsection (a). (c) Definition.--In this section: (1) The term ``cross-border trade'' means trade across a border of the United States, a State or Territory, or Indian country. (2) The term ``Indian country'' has the meaning given to such term in section 1151 of title 18, United States Code. (3) The terms ``State'' and ``Territory'' have the meanings given to those terms in section 201 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321).