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SEN. BURNS: Thank you, Mr. Chairman, and those are my sentiments exactly. We know that -- first of all, I want to congratulate you and the hours and the work that you have put in on this and I know it is a very difficult situation but I think we should get on with the markup because I don't think we are going to get this one done in 15 minutes. SEN. MCCAIN: Thank you. By the way, I forgot to mention Senator Keny, who was very important in helping us resolve the problems with liability, unfortunately has to go to a funeral this morning, and obviously we will be reserving his amendments so that he can have them brought up on his return. SEN. Rockefeller? SEN. FORD: Mr. Chairman? SEN. MCCAIN: Senator Ford? I apologize, Senator Rockefeller. SEN. FORD: That's all right. I think Senator Wyden was really here before I was. SEN. MCCAIN: Senator Wyden. SEN. WYDEN: Thank you, Mr. Chairman, and I just have about a minute's worth or so. First, I want to commend you and Senator Hollings and the bipartisan leadership of this committee. This effort has been no walk in the park and so appreciate the bipartisan way in which you have done it. Second, it seems to me that every member of this committee can agree that no person should die before their time because they were persuaded it was cool to start smoking at 14, and I think we all can agree on that and on a bipartisan basis. Second, the late Mike Synar sat next to me during the House hearings with the tobacco executives, and he was one of the most courageous members of Congress in my view in history, and I just want to take a quick minute to say that I think we honor his memory by passing a strong, good and bipartisan bill. Finally, Mr. Chairman, I want to say that a number of my colleagues have had concerns, especially about the export provision, and I want to make it clear to them, particularly Senator Ford and Senator Hollings, that I intend to work very closely with them. As a new member of this committee both of them have been very gracious to me and I want it understood that I think we can work these provisions out. 3

I want to mention, fmally, that there willl probably be an objection lodged for us continuing this markup, I am told. If that is the case, then we will have to conclude this markup today at Noon because of the rules of the Senate, if that is the case. If that does happen, then we will meet, the committee will meet after we are required to go out of session and we will determine the remaining amendments. We will try to reach time agreements or agreements on those amendments. We will make that attempt so that that will determine at what time we go in tomorrow to complete this bill. Let me just remind all my colleagues that there is no doubt how difficult this issue is, but the Democrat leader, the Republican leader, and the President of the United States want us to move forward with this bill, recognizing that if we are ever to bring to completion our mission that we have to move this bill through the committee, recognizing full well that this is not a perfect document, to say the least, and that is why we have a continuing process of floor debate in the Senate and the House input as well as of course negotiations and conference and with the White House. I also want to say that I am very grateful for the participation of thc Administration in this process. They have been very willing to compromise and to help us out, and without their invaluable assistance we would not be here as well. But before I continue thanking people I think it is important to stop because we are not there yet. We have not completed this markup and there will be plenty of time to do that. Senator Hollings, I understand, is on his way. I would like to ask the members if they would make their opening remarks in a few seconds so that we can begin a section by section markup of the bill. I would like to, if I might, also start out by asking the committee to adopt the Substitute S. 1415 along with technical, conforming, and other corrections to the draft that was distributed on Sunday and Monday. There are a couple of exceptions to that draft, which Senator Ford has raised, which I would like to ask unanimous consent that they be left out at this time. There will be negotiations between Senator Ford's and Senator Hollings' people on a couple of the aspects of the farm bill. I would like to now recognize Senator Inouye if he has any opening comment. SEN. 1NOUYE: Mr. Chainnan, we just have two hours. Let's get on with the show. SEN. MCCAIN: Senator Burns? 2

The 1997 Cornell University study found youth to be about half as sensitive as adults to price increases. Other countries like Canada, United Kingdom, Norway, and Denmark have cigarette prices up to $5 a pack, more than twice our level, and have experienced similar increases in youth smoking while adult smoking rates have declined. The Chairman is very sensitive to what we would look at as black market, and we have gone well beyond the sensitive arena -- area for the black market when popular brands in Mexico are 80 and 90 cents a pack. So there's a great deal of evidence that price has little to do or no effect on youth smoking decisions, but certainly less than the impact on adults. Then my friend from Louisiana has tried and tried and tried to find something that would get to advertising, so that we could sign the protocol, so we could use other than price to stop youth from smoking. If we are raising prices to reduce smoking rates, we are really trying to reduce adult smoking rates, not youth. If we are dramatically raising taxes in this proposal by more than five times the level of spending proposals in the Clinton budget for a youth smoking bill, we are really debating an adult smoking bill. I think the five year, $123 billion tax increase in this bill is unjustified. And I listened to my good friend from Oregon, Senator Wyden, and let me say something about the international proposals in this bill, and I hope we can work out something. It seems like we are also trying in this bill to be the international morality police force. I believe it is naive to assume we can regulate other countries and decide what is best for them. These are multinational corporations we are dealing with. They will pack their bags and go overseas. This is another example of misplaced Washington intentions which fail to achieve any of their intended results but cost Americanjobs. This bill requires among other things, one, the posting a bond regarding each exported product -- each product; two, enormous new labelling requiretnents in addition to those already in the bill including a new ID number for each individual pack of cigarettes; three, a new additional layer of govenunental permits; and four, possible criminal penalties if employees do not follow U.S. laws in other countries. This bill sets a disturbing precedent for other industries. There are at least three troubling trade issues raised by these international provisions. 9

Mr. Chairman, as we get started on this hearing, I would like to recognize that we have here in the audience several of the Attorneys-General who but for their el2ort we wouldn't be here today -- SEN. MCCAIN: You are exactly right, Senator Brownback. SEN. BROWNBACK: -- discussing this issue right now. I would like to take particular note of one from Kansas that was one of the lead Republicans on this issue, Carla Stovall that was here -- and I think we owe them a clear debt of gratitude for getting us to this point and time. SEN. MCCAIN: And you might notice, Senator Brownback, they are very close by to get us through the last hurdle here too, so thank you. SEN. BROWNBACK: I urge that horse into the barn. I strongly support a tobacco settlement that accomplishes the following goals. First, it must drastically reduce the number of underage smokers. Second, it must reimburse the Government for the costs incurred as a result of smoking-related claims. Third, the agreement must result in a ban on almost all forms of advertising of tobacco products and bring and end to the marketing of cigarettes to children. Fourth, I think the agreement must be Constitutional. I applaud Senator McCain for his tremendous efforts in attempting to accomplish these goals and moving this legislation forward. Now while the bill that this committee has before today may not be perfect, it moves us towards a final settlement, and I look forward to working with my colleagues to make additional changes to this bill as it moves to the Senate floor so that we can move and mature this issue to some final resolution. SEN. MCCAIN: Thank you very much. Senator Ford. SEN. FORD: Thank you, Mr. Chairman. I am going to take two or three minutes. I may never get another chance to say all this. Mr. Chairman, I know that I am suspect. Whatever I say -- oh, he's from a tobacco state -- 6

SENATE COMMERCE COMMITTEE MARKUP OF TOBACCO LEGISLATION MORNING SESSION, WEDNESDAY, APRIL 1, 1998 CHAIRED BY: SEN. JOHN MCCAIN (R-AZ) 9:30 A.M., 216 HART SENATE OFFICE BLDG., WASHINGTON, DC TRANSCRIPT BY: FEDERAL NEWS SERVICE 620 NATIONAL PRESS BUILDING WASHINGTON, DC 20045 COPYRIGHT 1998 BY FEDERAL NEWS SERVICE, INC. CHAIRMAN McCAIN: (In progress.) -- to rnark up comprehensive bipartisan tobacco legislation. I want to sincerely thank Senator Hollings, every member of the committee for their effort and contribution. I think it is well known that this process has been inclusive and this process has been very difficult and complicated. The reason why we are where we are is because every member of the committee on both sides of the aisle has been included in this process -- the public health coimnunity, the Attorneys-General, the National Center for Tobacco-Free Kids, Dr. Koops and Kessler, and a special debt is owed to the committee - - by the committee to the States' Attorneys-General led by Mike Moore of Mississippi, Christine Gregor of Washington, and Gail Norton of Colorado along with their outstanding team. - All these individuals and so many others have made invaluable contributions I would like to also mention a couple of other individuals on the committee. First, Dr. Frist was able to work out FDA language which many viewed to be literally impossible. Dr. Frist did a marvelous job on this part of it, along with many other members but his leadership was invaluable. I would like to congratulate Senator Ford for his efforts on behalf of the farmers of his state and of the South. I would like to thank Senator Gorton for his contributions and expertise. Senator Wyden is here with his commitment to kids of America and his longstanding involvement in this issue. I would also like to mention that Senator Dorgan of course has been not only our liaison with Senator Conrad but also has been very involved in this issue as well. - Senator, Bryan, thank you; Senator Inouye -- I want to thank every member -- Senator Burns has had problems with some of this issue, but he has worked with us as well.

I don't want to see this bill go down over those export provisions and I want to tell my colleagues who have concerns about that that I intend to work with them j ust as we have on so many issues, to get these matters worked out and I thatilc you for that chance, Mr. Chairman. SEN. MCCAIN: Thank you very much, Senator Wyden. Again, I want to thank Dr. Frist for his incredible effort on the FDA. Dr. Frist. SEN. FRIST: Thank you, Mr. Chairman. 1, too, want to commend you for the leadership you have shown in what is a very difficult effort that we are undertaking, and really beginning today in many ways. You have shown real leadership in offering a thoughtful and nonpartisan bill to address issues which really are public health issues -- as we all share that common goal, to reduce underage usage of tobacco. Over the past eight months, this committee has worked to gather information necessary to evaluate the tobacco settlement. I have had the opportunity on another committee, the Labor Committee, to look at many of the issues that we will be addressing today as well. As the only physician in the United States Senate, as one who has been involved over the last 20 years in issues of health and public health, and as someone who has had the opportunity or maybe I shouldn't describe it as an opportunity, but the occasion to operate on hundreds and in fact thousands of people who have suffered the ravages of tobacco use, I have been eager to participate in this process. The proposal that we will be discussing today is complex. Difference of opinion are going to run very deep. It's reflected by the number of amendments that have been put forward, but I remain very hopeful that this committee will produce a product that we'll be proud of in years to come. It will clearly move that entire debate forward. Whatever our differences, all of us, I believe, are committed to that shared vision of an America where children -- no child -- where children do not use tobacco. I do urge my colleagues as we work on this complex legislation to keep a clear- eyed focus on the health of the current generation, but maybe even more importantly that next generation, to keep in mind that 12-year-old, that 13-year-old girl or boy who is getting ready to travel through that tricky passage of adolescence, who is tempted and exposed, is lured into smoking something which ultimately condemns so many of them to an early -- to a premature death. When this committee first held hearings on the tobacco settlement I made my priorities very clear. As a physician I want to participate actively in a process to craft 4

legislation that will really result in meaningful reductions in underage smoking, reductions in youth smoking. We all know the statistics. They will be said again and again today. All of us want those statistics to be something we can be proud of in years ahead instead of so discouraged by. As a Senator from Tennessee, I reflect about 23,000 farmers as well. They were not at the table in the agreement with the State Attorneys-General. 1 have been very pleased to see the Chairman's mark -- we will be debating it later today -- I have been in support of the long-term assistance for farmers. The Chaimian's mark contains much of the original Leaf Act again which addresses those specific issues of the agricultural community. Again the bill before us establishes a good framework for reducing teen smoking. The burden of tobacco-related illnesses will be reduced if this bill is passed by providing us with a true national research agenda as well on tobacco. Mr. Chairman, I look fonvard to working on this legislation as we further craft it and further refine it today. SEN. MCCAIN: Thank you very much, Senator Frist. Senator Hollings. Thank you, Senator Hollings, for everything you have done on this bill. SEN. HOLLINGS: Well, thank you, Mr. Chairman. You have done an outstanding job. Many could disagree with the decisions but they certainly wouldn't disagree with your procedure. You have worked around the clock. Everyone has been listened to, conferred with, again and again and again, and this is the product, and I congratulate you on your diligence and bringing it out. I appreciate very much, as Senator Frist, the farmers have finally been factored in. Otherwise, I would ask consent that my statement be included. SEN. MCCAIN: Thank you again. Senator Brownback, I believe, was here before Senator Abraham. Senator Brownback. SEN. BROWNBACK: Thank you very much, Mr. Chairman, and I, too, add my congratulations to you for your hard work in getting the bill to this point. Congress certainly has a monumental task ahead of it. Since the June 20th global tobacco settlement we have attempted to craft legislation to drastically reduce underage smoking. We have been pulled in many different directions by many different groups even within the Senate and many of us have approached the issue quite differently. 5

First, this bill has a licensing fee based on worldwide production, in effect, taxing production beyond our own borders. Second, the bill extends the FDA provisions including labelling, marketing and advertising restrictions to other countries without regard to those countries' policy decision relating to tobacco. Third, the bill prohibits the United States Trade Representative from taking action against discriminatory trade barriers, setting a very disturbing precedent in our trade arena -- no revenue to the Government, Mr. Chairman, but a heck of a huge cost to the company. I will support efforts to strike this provision. So, Mr. Chairman, in closing, I know I have gone longer than you wanted me to, I am willing to support comprehensive legislation today which goes much further than I was willing to go a few months ago, but I am not willing to support proposals which raises taxes unnecessarily, hurts my fanners whether it is to punish an industry, or fund new programs, or offset new tax cuts. I am not willing to support legislation which bankrupts an industry and makes any farmer provision a hollow victory for me if there's no industry left to fund them. I hope we can get this proposal back to a reasonable level, maybe somewhere between the Administration's view and the June 20 settlement. Mr. Chairman, I will be pleased to work with you to try to arrive at that and I hope we can. I thank you for your time. SEN. MCCAIN: Thank you very much, Senator Ford. I would ask the indulgence of my Republican colleagues for Senator Stevens to make a brief remark. He has to chair an Appropriations Committee hearing -- I think it is more highway projects, is that right, Ted? (Laughter.) SEN. MCCAIN: Senator Stevens. SEN. : By all means. SEN. : Go ahead. 10

there's potentially another $6.5 billion in additional tort liability payments above the annual payments. Mr. Chairman, that adds up to a total industry payment of $122.8 billion over give years by my calculations. Compare this to $65.5 billion in the Administration's budget for youth smoking legislation. I know the Chairman has worked hard to get the Administration's blessing and this drove up the price-tag. However, I remain surprised that this bill appears to be potentially about twice as large as the Administration's budget request and I might add not all the Administration's budget request was even for spending on youth smoking related proposals. Let's look at the Administration's budget. There's $23.9 billion over five years in new tobacco spending that actually relates to tobacco and that is a stretch. Mr. Chairman, that is a stretch, so this is little better than 36 percent of the $65.5 billion amount requested in the Clinton budget. So we have a budget proposal that raises almost three times as much money as will be spent on youth smoking and related programs. Why are we almost doubling that budget figure in this legislation is a big question. I know some have argued that young people are more, quote, "price sensitive" than adults, and we should raise the price by enormous amounts, even if we don't need most of the money for youth smoking initiatives, but I think the picture is confusing at best. When you want to raise a lot of money to fund other programs, it is convenient to come up with a statistic that youth are more price-sensitive than adults. We have heard a lot of evidence before the committee that youth were less sensitive. We heard a lot of testimony. We heard the following things in the last few weeks. Youth smoke for status. They want the most expensive brands. Youth smoking rates today are still below their peak in the 1970s. Youth smoking rates fell during the 1980s but have been rising since '91. Price explains none of this. Ninety-two percent of youth smoke just four brands: Marlboro, Winston, Newport, and Camel, the four highest priced brands, compared to 48 percent of adults smoking those four highest-priced brands. A 1998 -- this year -- University of Maryland study found that the assumed negative effect of price on youth smoking decision was, and I quote, "nearly nonexistent."

SEN. MCCAIN: Senator Ford, you are never suspect in the eyes of your colleagues on this committee. SEN. FORD: Well, I have been on occasion, though, Mr. Chairman -- (Laughter) SEN. FORD: Though, Senator, I hope that my colleagues will listen for a little bit -- but first I want to thank you, Mr. Chairman, for your hard thankless work that you put into the draft of what we hope wil l be a comprehensive smoking proposal. You have been very accommodating to me and I am grateful to you regarding the need to provide a framework for tobacco fanners under this proposal, and I thank you, and it may be that that proposal is beginning to unravel and I am very concerned about it. However, this is obviously much more complicated than the impact on farmers. In some ways it is appropriate that we are beginning this process on April Fool's Day -- because the more I have heard, the more I think we are fooling ourselves to think that a comprehensive bill can pass. The last few days we have seen that, one, some in the public health community are denouncing this bill Second, that the tobacco industry is apparently in revolt -- meaning there may be no protocol or consent decree as envisioned by the legislation and the agreement of June 20th last year. Advertisers are standing by, ready to sue, if we regulate the content of advertising. Some politicians from tobacco states are worried how they can run if a bill like this passes. Some politicians from non-tobacco states do not want any bill to pass so they can have au issue to run on in the Fall And sixth, everyone seems to be dreaming up new spending ideas that have nothing to do with youth smoking legislation. I must say from my perspective I was astonished to learn about the high price-tag of this bill. It is $102.1 billion over five years in real terms just for the annual payments. This is $108.5 billion if you add 3 percent inflation. On top of those payments there is potentially another $14.2 billion over five years from look-back penalties, and on top of that these two sums -- on top of these two sums 7

SEN. : Let him take as much time as he wants, Mr. Chairman. SEN. : Be happy to yield my time. SEN. STEVENS: As a matter of fact, it is a hearing on the military aspects of our SEN. : Of Alaska. SEN. STEVENS: -- of our medical problems. This is -- we are going to listen to the people from the Department of Defense to deal with the medical problems of the Department of Defense, and I appreciate that and I thank you. I will be very brief. Mr. Chainuan, I have given you an unqualified proxy. I don't remember doing that very often in my career. I just want everyone to know I believe this bill has to get to the floor. Yesterday one of the presidents of one of the tobacco companies called me and asked me about this bill, for my advice, and I gave him this advice. This bill must get to the floor. It is the first bill I have seen in this whole controversy that has bipartisan support. I congratulate you for holding the hearings. I congratulate Senator Hollings for working with you and the others on both sides of the aisle -- Dr. Frist -- and I know that Senator Ford has been involved. If we can get this bill to the floor and we can get the leadership to give us time to have a bipartisan sort of conference to select some people who will work with you from the other committees and get a task force now to round this out and see if we can get a bill and a semblance of an agreement as to how we could limit the amendments on the floor and really have a real dialogue on the floor, this is the kind of bill that all 100 Senators ought to be there for a couple of days and we could find a way to answer the demand of the public that we act on this. The public is asking up my way for legislation that tries to deter future generations from going down the same path as we have had in the past, so I want you to know, and I hope my colleagues will understand. The Chairman may vote my proxy against an amendment that I support. He knows I support the asbestos and black lung provisions and some of the other things, but those can be worked out once we get to the floor if we get a decent bill that has bipartisan support for a substantial portion of the final bill that must be passed by the Senate and sent to the House for a conference. It is a long, tortuous road. It's an election year. Unless it gets started now, there is no hope, so I congratulate you and hope that you get it done. 11

I want to personally thank you for including the personal responsibility provisions that were important to me. You have done that and I appreciate that and I pledge to work with you and other members of this committee in getting a bill to the floor that we can act upon. SEN. MCCAIN: Thank you very much, Senator Bryan, and we appreciate all your efforts. SEN. Ashcroft? SEN. ASHCROFT: Thank you, Mr. Chairman. I have a statement that I would like to make, and in the event that it goes beyond the time allowed -- SEN. MCCAIN: Without objection. SEN. ASHCROFT: -- would you please accept the rest of the statement in wl7ting ) SEN. MCCAIN: Without objection, it will be part of the record. SEN. ASHCROFT: I want to thank you because I realize that a lot of people have worked very hard to bring this bill before the committee, and don't think that means it is time for the rest of us not to work. I thiiilc it means that the entire committee will have to work very hard to ensure that we develop both sound and principled public policy. I am deeply concemed about teen smoking in this country, but I have also a number of concerns about provisions in this legislation. I am concerned about the Congress intervening on behalf of tobacco companies and limiting their liability to $6.5 billion dollars a year. To me the fact that class actions still would be allowed under this is of consequence on the issue of limiting liability. There is still a cap that would have the effect of cutting off people's rights to collect even compensatory damages. While I support a framework for those injured by a product sold in interstate commerce to adjudicate their claims and quickly recover for their injuries caused by dangerous products, I believe that it is Congress' duty to establish a reasonable and rational process. On the other hand, it is truly remarkable that these tobacco companies will engage in outrageous behavior and then come to this body to say our behavior has been so 14

SEN. McCAIN: Without objection, thank you, Senator. SEN. Dorgan? SEN. DORGAN: Mr. Chainnan-- SEN. McCAIN: Excuse me. Thank you, Senator Ashcroft. I'm sorry. SEN. Dorgan? SEN. DORGAN: Mr. Chairman, thank you very much and thank you for the work you have done. All of us have indicated the stakes here are very high. The issue of tobacco use and public health is very important, and the fight to stop the addicting of our children to tobacco cries out for a legislative solution today. I hope to offer some amendments that will make some improvements in this legislation, but I want to say that at the end of the day, in my judgment, this committee will have failed if we have not reported a bill to the Floor of the Senate. We must move this process along. I have heard this morning the warning that the industry or some groups may prevent passage of a tobacco bill, and I simply want to say that the message coming from this room is that this committee does not seek or need the consent of the tobacco industry to pass comprehensive tobacco legislation or, for that matter, any other interest group in this town or this country. We ought to do the right thing. Our job is not to satisfy, it is to do the right thing. There are a number of provisions in the Chairman's mark which I will attempt to change and improve. At the end of the day, I want very much for us to have been seen as having done something successful to advance this issue of a comprehensive tobacco bill. Mr. Chairman, thank you very much. SEN. McCAIN: Senator Dorgan, I want to thank you for that very thoughtful statement. I know you have very strongly-held views on this issue. We have appreciated your commitment to moving this process forward, and I know that your amendments will be very seriously considered by the entire conunittee. Thank you, Senator Dorgan. 16

outrageous that to pay all the damages will bankrupt the company; therefore, you must limit my liability so I can compensate some of those injured by my product; then to go on to say, if you do this, I will be good and responsible as a corporate citizen; if you don't, I'll continue to peddle my deadly product to the youth of America. What is even more remarkable is that members of this body will bow to such demands while refusing to allow reasonable limitations on liability for hard-working Americans who are making safe products, products to heal and not to hurt, products that, by their nature, do not kill people, such as those confessed and sold by the tobacco companies. In fact, niany of these companies are in the business of trying to save lives. Today I will offer three amendments. One would curb liability for charitable organizations. In fact, this would curb liability, and this is not curbing the ability of anyone to get compensatory damages -- would curb liability for some of the organizations represented here today, organizations that have been fighting to stop teens from smoking rather than luring them into a lifetime of addiction. The second would limit liability for those companies who provide biomaterials for lifesaving medical devices such as brain shunts and heart patches. If limiting liability is appropriate for merchants of death, it should be more appropriate for merchants of life. Finally, the third amendment would provide some liability for product sellers and would limit punitive damages and establish a statute of repose. None of these proposals would go as far as the proposal in this bill to limit the liability of the tobacco companies by capping their liability even for compensatory damages. Without these reasonable limitations on liability for honest product and biomaterial manufacturers and charitable organizations, I do not believe I can support any limitation on liability efforts currently before this committee. In fact, due to the lack of providing reasonable legal reform in these reforms, and if the committee does not support these niodest proposals, I intend to offer an amendment to strike all of the liability provisions in the bill. I hope senators will join me in recognizing the inherent unfairness before this committee today and vote in favor of these amendments. I believe that it would be appropriate to extend the kind of fair framework in which companies need to operate in order to provide healing biomaterials and certainly as long as we are not even limiting the compensatory damages of those companies, it seems to me that that is a must-do as compared to limiting even the compensatory and punitive damages of the tobacco companies. I see that my time has expired. I would like to submit the rest of my remarks for inclusion in the record. 15

Thank you very much. SEN. MCCAIN: Thank you very much, Mr. Chairman. I hope every member on both sides will take your words very seriously. SEN. Rockefeller -- and I apologize for the delay, Senator Rockefeller. SEN. ROCKEFELLER: Not at all, Mr. Chairman, and I also want to congratulate you because this is a very, very, very difficult task, and often in this Congress we do our best or our worst legislating under the greatest pressure at the very close of the time. I am not yet at all convinced that I a n going to vote for this, but that spirit is not to be taken as derogatory on my part towards the effort or the intent of ending up with a bill that we can all support. I think it is very important when people are rushing things towards -- and understandably and properly rushing things towards solution -- for there to be a few people to remind us that there are areas where the bill needs to be better. Philosophically in a way I almost have the feeling that getting the tobacco part of this done, the information out, all the FDA stuff decided, trying to decrease the dependency of our youth -- which the teenagers was actually only 2 percent of the smoking population -- but there's all the other too, that this is a problem large enough that I think that its solution really looms even over the spending aspects of the bill itself, although I will have, along with Senator Kerry, Senator Dorgan and others, a couple of amendments, but I think getting the tobacco part done and reducing the difficulties and tremendous health problems associated with it is the most important part. To the extent that we can work the other things out, then that's good, but I thinlc the tobacco part should be the main thing. The tobacco companies say that they are going to take a walk on this. I don't think that's very wise judgment on their part. Senator Ford has indicated they might go broke, and he has previously indicated that others might take their place which wouldn't have the liability, and we will see about all of that, but I think the American people are fed up with the whole smoking thing, and I think the American people are ready to act on it, and they will stay that way until the figures start going down dramatically. So I do congratulate you. You know, the liability clause is -- I don't know whether it 30 pages, 40 pages or 50 pages -- it was 70 pages I think yesterday, but this is something we haven't yet looked at entirely. 12

I mean who would have thought that five years ago, perhaps, or 10 years ago, that we would be where we are today? Looking at legislation that settles millions of dollars of claims against tobacco companies, both for Medicare claims that have been paid out over the years and Medicaid claims that have been paid out over the years. Who would have thought that we would have ever been talking and legislating a bill that makes nicotine regulated as a drug by FDA? Nobody would have thought that. Nobody would have thought that we would have been able to get tobacco companies to be subject to FDA regulation as a drug delivery device. That would have been impossible five years ago. Who would have thought that we would have a situation where companies have agreed to spend millions of dollars to restrict advertising that is targeting the children? Who would have ever thought that they would have agreed to major restrictions on advertising and bans on advertising in most places? Who would have ever thought that we would be talking about large penalties i f a company does not reduce the sale of its product to a segment of our community, a major financial penalty? Nobody would have thought that would have been possible. And yet today that is exactly what we are talking about doing with the legislation. I think all of that is very laudable, I think it is all very important, I think that the goal that we are trying to accomplish is all expressed in what I have just said we are actually doing here today. But I think that we are engaging in a rush to see who can be the hardest on tobacco companies. No matter what this committee produces, there will be other committees that will say it's dead on arrival. There will be others that say it's not nearly enough and it's faulty in that sense. And I understand that. I understand that mood to say we are going to be tougher than anybody else and don't challenge us on that issue. But I am concerned that in trying to be tougher than the other guy, we are going to be missing the target of accomplishing what this legislation is attempting to accomplish in real terms and in the real world. Now I have no tobacco companies in Louisiana, zip, zero, none. I have no tobacco farmers in Louisiana to speak of; I mean maybe less than ten. But I mean nothing, there's not -- I don't come at this from a constituent standpoint other than the victims and the problems related to smoking. My father-in-law died of lung cancer from smoking and related to asbestos in the work place. My mother died of lung cancer related directly to smoking all of her life. I have no sympathy for people who sell these products, but I am very concerned if you look at what we are attempting to do, I want to make sure it stays. I want to make sure that all these restrictions are here a year from now and not just when it leaves this committee. If you look at the restrictions that we have, one of the most important things we do is the restrictions on advertising. You can raise the price, but, folks, the price in 19

SEN. DORGAN: Mr. Chairman, I failed to mention that Senator Conrad, who has headed a task force on this area, has worked with me on a couple of amendments as well, and I appreciate very much his assistance. SEN. MeCAIN: Thank you. And I know that we don't want to waste too much time, but Senator Conrad's appearance before this committee was a remarkable performance and one that I think was extremely helpful in this process, and knowing you and Senator Conrad will not be the last that you are heard from as we move this bill to the Floor, and we thank you. SEN. Snowe? SEN. SNOWE: Thank you, Mr. Chairman. First of all, I want to commend you, Mr. Chainnan, for your tireless efforts and superb leadership on this legislation. You have certainly done yeoman's work on what is an extraordinary piece of work, and I just want to say I want to congratulate you for bringing it to this point. Mr. Chairman, recent history has revealed hundreds of tobacco company documents providing incontrovertible evidence of an unprecedented assault on health and welfare of the American people, most especially our children. And so today, we will take an equally unprecedented step towards addressing the wrong of the past and hopefully it will be an attempt to protect our children. I represent a state that has one of the highest teen smoking rates in the country, the highest smoking rate of any state for young adults between the ages of 18 and 30. In Maine, a full 38 percent of high school students smoke cigarettes. That is the fourth highest in the nation. And 16 percent of high school boys use smokeless tobacco. Mr. Chairman, this is a death sentence for many Maine kids. According to the CDC, more than 31,200 Maine kids, under the age of 18, will prematurely die as a result of tobacco-related diseases. The unveiling of industry documents has provided us with a disturbing glimpse into the mindset and tactics of the tobacco industry over the past few decades. From this paper trail, we have learned of repeated efforts by these companies to manipulate scientific research, target their products to children, racially stereotype minorities in marketing plans, contrived the nicotine levels in cigarettes, and generate research that would downplay the risk of smoking. All of these tactics have triggered thousands of lawsuits, but it has also resulted in the deaths of 420,000 Americans every year, and another 3000 children every day become addicted to a tobacco habit. So today, Mr. Chainnan, we have a choice between changing the status quo or taking the risk of depending on the outcome of litigation over the next few years or 17

What resemblance does the bill before us today bear to the agreement of June 20? I know that Chris agrees with me when I say that we have killed the patient. The AGs' deliberate and constitutional removal of a pound of flesh set off a feeding frenzy on Capitol Hill. Everyone wanted a cut and every demand was made with a voice dripping with moral authority and indignation that the mere suggestion that Congress would protect tobacco companies and not continue to exact more money. We should have expected this, it's human natures. Charged as we are, however, with making good public policy, we should not meet all demands. But the bill before us unfortunately has rejected very few demands. Concerns about Constitutionality, about the continued solvency of the tobacco companies, the effects this could have on claimants, about the effects of a thriving black market on youth smoking, about the impact of this bill in tens of millions of adult smokers -- these concerns have all been subsumed by the desire for more -- more money, more punishment. To raise the funds that the President has already spent in his budget before the legislation was even conceived, the committee did not say no to the White House, and this bill incorporates the Treasury Department's stream of payments from tobacco companies over the next five years. This payment schedule, coupled with a $10 billion up-front payment, is designed to meet the President's spending requirements, but bears no relationship to actual demand for tobacco products and the companies' ability to pay these assessments when demand drops. To understand just how carefully the Administration considered the feasibility of the assessments, I think it is telling that the Administration predicts a huge decrease in youth consumption in the first year, even before many of the controll provisions will have been put into effect, but allows for absolutely no drop-off in consumption by adults during the first five years. Because that assumption would not give the Administration the money it wants to spend on other non-tobacco-related programs. The committee did not say no to a stream of payments from tobacco companies that could bankrupt them. The committee did not say no to draconian penalties on look- back if the companies did not meet huge consumption reduction targets. And the committee did not say no to the seemingly legal and statistically impossible task of assessing these penalties on a brand-by-brand basis. Unless these look-back penalties are voluntarily agreed to, I seriously doubt that they can survive a challenge on the grounds that they violate the companies' due process rights and the excessive fines clause of the Eighth Amendment. v 0 a• 4~ The committee did not say to eviscerating the civil liability restrictions so surgically crafted in the AGs' June 20th agreement to ensure the tobacco companies were DO ~ 0r o+ 23

however long it takes that may or may not alter the conduct of companies, let alone reduce smoking in America. I don't happen to think the status quo is acceptable. I think this is an historic opportunity to shape and influence the tobacco culture in America and to reduce smoking in a meaningful way. This legislation begins the process of taking the first major step by Congress -- perhaps it will be our only opportunity -- to discourage young people from starting smoking, to encourage those young people who are smoking to stop smoking, and hopefully to bring to an end the abhorrent practices of the companies and, yes, in the end hopefully we can get young people to grow up free of tobacco addiction. And that's why I happen to believe this legislation moves in the right direction, because we haven't been a party to the negotiations, we weren't at the table, but we have to do what is right and what is in the best interests of the American people, and the modifications proposed tobacco settlement, I think, brings it closer in line to the interests of this country, by raising substantially the cost of cigarettes, to reduce its attractiveness, to deglamorize what is an unglamorous habit, by expanding the marketing and advertising restrictions, by increasing the penalties to companies that fail to meet their targets in reducing teen smoking, and also to expand the role of the FDA. That is all bringing us in the right direction, at the same time removing the immunity provisions. And albeit that this isn't a perfect document, as you said, Mr. Chairman, I think it is taking us in the right direction. And several of us will be offering amendments to make further improvements, but the bottom line is this is a rare occasion for Congress to craft and enact legislation that in the final analysis willl resonate and have a profound impact on the future of this country which is, of course, our young people. This is such legislation, and I hope that this committee will act accordingly. SEN. Iv1cCAIN: Thank you very much, Senator Snowe. I would remind my colleagues that there were a lot of contentious issues. The two most difficult were FDA and the other liability. Senator Breaux was a key and vital player on this issue, and without whom we could not have gotten where we are. SEN. Breaux, thank you again for all you have done on this entire issue, but especially on the issue of liability. SEN. BREAUX: Thank you very much, Mr. Chairman, and I, too, would join all of our colleagues on the committee and commend you for the tireless effort that you have made to try and bring a consensus. It is clear, in my opinion, the only way we are going to get a bill that is going to ever become law is that we do it working together in a bipartisan fashion, and you have really tried a great deal to do that. I8

That is considered to be an important part of legislating -- the craftsmanship aspect of it -- and I enormously respect the work that has been put in on this very, very critical matter for the future of health care in our country. Thank you. brief SEN. MCCAIN: Thank you very much, Senator Rockefeller. Senator Abraham. SEN. ABRAHAM: Thank you, Mr. Chairman. In the interest of time, I will be I wouldjust add my voice to those who have complimented you on your efforts. It is pretty easy to take a strong stance against tobacco. It is much more difficult to put your name on a bill, draft the legislation, and put it before the American public. You are certain to be criticized and I know you have been from a variety of directions, which suggests the fairness of the efforts that you have engaged in. It is in fact even feasible to put a bill before the public if you just try to satisfy one side versus all sides, and you have done your very best I think to consult people on a bipartisan basis, and I compliment you. Everything in the bill doesn't satisfy me. I am sure it doesn't satisfy anyone 100 percent, but I look forward to working with you because I think the Senate and the American public deserves a very full debate on this. That can't happen if it just proceeds at the committee level. It has to be before the entire Senate and I hope we can get there soon. Thank you. SEN. MCCAIN: Thank you very much, Senator Abraham. I believe Senator Bryan was here before Senator Dorgan, is that -- Senator Bryan. SEN. BRYAN: Thank you very much, Mr. Chairman. Let me join with my colleagues in commending you for your leadership and to congratulate you for your tenacity. Without your leadership, we would not have moved the ball as far down the field as we have. As you pointed out in your opening statement, we are not yet into the end-zone, but I think we are close, and I commend you for that. The goal is simple, and that is to reduce underage smoking, to limit access to tobacco products to those who are under the age, and to make young people aware that their decision to smoke carried with it lifetime health consequences, and I think we can all agree on those objectives. 13

CLERK: Mr. Ashcro8. SEN. ASHCROFT: No. CLERK: Mr. Frist. SEN. FRIST: No. CLERK: Mr. Abraham. SEN. ABRAHAM: No. CLERK: Mr. Brownback. SEN. BROWNBACK: No. CLERK: Mr. Hollings. SEN. HOLLINGS: No. CLERK: Mr.Inouye. SEN. HOLLINGS: No, by proxy. CLERK: No, by proxy. Mr. Ford. SEN. FORD: No. CLERK: Mr. Rockefeller. SEN. ROCKEFELLER: Aye. CLERK: Aye. Mr. Keiry. SEN. HUTCHISON: No, by proxy. CLERK: No, by proxy. Mr. Breaux. SEN. BREAUX: Aye. CLERK: Mr. Bryan. SEN. BRYAN: No. 37

kept alive to keep paying. Rather than adopting the provisions o£the June 20th agreement, which provided for settling all class actions, a device particularly unsuited to this type of litigation, accepting a payment of $60 billion in punitive damages for past misconduct, and substantially facilitating individual lawsuits by creating a document depository, this bill simply imposes a cap of $6.5 billion in annual payouts by all participating tobacco product manufacturers. Class actions are still allowed. Punitive damages are still allowcd. And with class actions and punitive damages, huge attorneys' fees, the potential for outrageous j udgments, and because punitive damage awards will no doubt take up a good portion of the total judgments, less money for plaintiffs who seek economic damages to pay medical bills and to meet their mortgages when they can no longer work. On the pretext, maybe even the mistaken belief of helping individual plaintiffs, the bill hurts the very people it was designed to assist. By saying no to almost nothing, the committee assured that the tobacco companies will say I can't to this bill. So what, you ask? We all got our pound of flesh. For one thing, without the tobacco companies' consent, the restrictions on advertising will not be implemented, and these restrictions cannot be imposed by statute because, while the tobacco companies can agree to waive their First Amendment rights, Congress cannot deprive them of these rights by codifying the severe restrictions on speech that the companies agreed to on June 20th. So we lose the advertising restrictions? So what? Well, it is likely that we will also lose the look-back penalties. Without a voluntary agreement by the tobacco companies, for reasons I mentioned earlier, these provisions are unlikely to survive constitutional challenge. So we lose the advertising restrictions and the look-back penalties designed to ensure that the tobacco companies meet ambitious targets in reducing youth smoking? Again, so what? This is the question that should be asked, and the answer lies not in how integral the advertising restrictions and the look-back penalties are to accomplishing the goal of reducing youth smoking, but in the fact that the June 20th agreement, but not this bill, was designed to keep the tobacco companies alive -- beaten, fettered, but still alive, so that they can keep on paying, so that we can regulate their activities, so that the 40 to 50 million smokers in the United States do not turn to Chinese cigarettes -- the lowest- backed market, I may say, in Washington State --which are more potent than the American brands and contain more nicotine and tar. When the tobacco companies say I can't to this bill, should we believe them? We certainly have reason to be skeptical. But the attorneys general who spent so many months studying the companies' solvency do believe them. We will soon see if Wall Street believes them as well. Although this bill says no to almost no one, I find it ironic that it does say no to the attorneys general, without whose work in obtaining the June 20th agreement we would not be here today. 24

We were going to move to a Hutchison amendment next. Is Senator Hutchison back? Senator Hutchison will be right out. SEN. Snowe has also got an amendment, but we will wait a second for Senator Hutchison to come. I would ask the staff to notify the Senators as to when their amendments would be imminent so that we can move forward with a minimum delay. SEN. Burns, do you want to make additional comments? SEN. BURNS: No. I had a couple of amendments and I want to make a statement. I had an amendment on income averaging for agriculture which should have gone into the agricultural part as far as the section where Senator Ford has some concern, and I believe it is one of those tools that we will have to incorporate. Under the advice of the Chairman, and I think it was good advice, we referred to the Finance Committee because there is tax implications on that, but I thin< it is very, very important to understand that there's going to be some people that are severely economically impacted on this, and the actions of this Congress and the actions of a lot of folks was completely out of their control, completely out of their control, and we should not leave those people vulnerable. And income-averaging, Senator Ford, will be a vital part of those farmers getting back on their feet. And I thank the chairman for that. SEN. MCCAIN: Thank you very much. Senator Hutchison, you are recognized. I see three amendments there. Could you tell me which -- tell the committee which you are prepared to offer? SEN. HUTCHISON: Yes. Thank you, Mr. Chairman. The first amendment assures that manufacturers who are compelled to share technology with their competitors SEN. MCCAIN: Could the staff pass out the amendment, please? SEN. HUTCHISON: -- are compensated the fair market value for that property. In the bill, we encourage -- the FDA encourages companies to try to develop tobacco products that are low in nicotine. But the secretary then says that if they do develop that, that they must share it with their competitors. We just want to make sure that there is a sharing of the cost of this kind of research, which I think also will encourage the research to occur. SEN. MCCAIN: Is there further discussion? I think it's a good amendment. And if there's no further discussion, all those in favor of the Hutchison amendment signify by saying aye. 27

Europe is three times what it is here and kids still smoke, adults still smoke. We got kids buying cars and convertibles and Porsches and new clothes. In today's economy, $ L 10 is not going to change their smoking habits completely and totally. But the advertising restrictions are the guts of this legislation. When you look at what we do, we have taken all the FDA rules, we banned non-tobacco brand names on our logos on tobacco products, we banned the tobacco brand names, logos and selling messages on non-tobacco merchandise -- I'm talking about baseball caps, gym bags, caps, T-shirts, et cetera -- we banned completely the sponsorship of any sporting or cultural events by tobacco companies. We restrict tobacco advertising to black text on white background, no pictures except in adult publications. We require tobacco advertising to carry a statement of intended use as a nicotine delivery device. In addition to all -- and we have also banned offers of non-tobacco items or gifts, again the T-shirts and gym bags. No more gifts anywhere in the country. In addition to that, this legislation goes far beyond that. It bans human images in cartoon characters that we have talked about. It bans all outdoor tobacco product advertising, including advertising in an enclosed stadium and indoor advertising. We banned tobacco product advertising on the internet, we limit the point of sale advertising to black-and-white text only signs, no pictures. We require that examples of all new advertising and tobacco product labeling have to go first to FDA to say can we run this ad. Now that's good, I support all that. But my concern is I don't think the Supreme Court is going to support all of that under the Constitution of this country. Tobacco companies can clearly waive their First Amendment rights, and if they are part of their agreement, they will do that. If they are not part of this agreement, I am very, very concerned that we are on very shaky grounds. Cigarette advertising, whether we like it or not, is not afforded any less First Amendment rights than any other legal product. And until we make it illegal, they have First Amendment rights. And the court, I think, is very clear, that the government must assert a substantial interest and affirmatively prove through real evidence that its regulation directly advances the interest in a material way. What that means is that the restrictions being set forth in our bill is not enough to say they're there to protect children. We also have to have it drafted, it must be narrowly drawn so as not to infringe on the rights of adults. The Supreme Court has never, never sanctioned a restriction on speech in the name of protecting children where it was not the speech itself that they were restricting, i.e., indecent speech or speech related to pornography, they could say that speech is illegal, period. But other than those narrow cases, they have never been able to do that. The Supreme Court said as recently as June that interest in protecting children from harmful materials does not justify an unnecessarily broad suppression of speech directed to adults. They said the government may not reduce the adult population to only what is fit for children. 20

Now I support all of these restrictions, but unless we have people who are willing to waive their First Amendment rights, I am very concerned that we will have only half a package, and I want to make sure we keep this deal together in order to accomplish what we all share as a legitimate goal. Thank you. SEN. McCAIN: Thank you very much, Senator Breaux. SEN. Hutchison? SEN. HUTCHISON: Thank you, Mr. Chairman. Mr. Chairman, I know it has been said, but I would never have believed that anyone could have gotten the forces together as you have and I think there is a great debt of gratitude to you for taking the leadership role in what looked like an impossible task. I think that the bill is not yet complete, which you have said yourself. There will be a number of amendments still offered on the floor, and -- but I do think it is important that there be a first draft to work from. It's like anyone who writes the first draft of anything. Everyone can easily attack it, but it's very difficult to get the first draft. And you have done that, and we all appreciate it. I also want to say that I was not sure in balancing the good and bad of this comprehensive settlement whether the good did outweigh the bad, and I want to say that it was the hearing in this committee with the attorneys general -- the attorney general from Kansas has been mentioned, but I want to mention Gail Norton from Colorado and the attorney general of Mississippi who really clarified for me that we must reach a settlement with the tobacco companies; that if we are going to have a fund that will really make a dent in teen smoking, this is really the only source. Otherwise, I was convinced by the attorneys general, the race to the courthouse would produce plaintiffs that received minimal help, minimal recoveries, and we would not have the ability to go fiill force against teens getting addicted before they have judgment. That is why I signed onto a bill that I have some disagreements with. Certainly it tests many principles that we all have, but in the main, I think if we can stop teens from making this decision in every possible way, then when people become adults, we all believe they have the right to make certain decisions. But if they become addicted before they are adults and have the judgment, there is a role for us to play, and I think we are charting the best course with a lot of caveats. The other issue that was important to me -- and I want to say that I appreciate the Chairman and the Ranking Member working with me -- and that is the protection of the states. Mine is one of three states, along with Mississippi and Florida, that have 21

SEN. MCCAIN: Senator Frist. SEN. FRIST: I'm just going to need further explanation, because it appears to me this may gut the whole bill. And before we rush through this, because I know we're in a huny -- SEN. MCCAIN: Sure. That's not the intent is -- SEN. FRIST: I know it's not the intent, but -- SEN. MCCAIN: I would ask -- Senator Hutchison, could we work -- I think we all agree with your intention here. Could we work with the staff on language that would ensure that it does not have any unintended effect and consequences and perhaps take this up in a very short period of time so that we are clear that it doesn't have the unintended consequences that Dr. Frist fears? SEN. HUTCHISON: Let me work with Dr. Frist and see if we can come to an agreement. If we can't, then I will want to offer this amendment, because I can't imagine how abiding by the Congressional Review Act that this Congress has passed would gut the bill. But I'm happy to talk about it, and let's see if we can agree on that. SEN. MCCAIN: Thank you. SEN. HUTCHISON: And we'll come back. SEN. MCCAIN: Thank you. I ask unanimous consent to set aside the Hutchison amendment at this time, and we will bring it up very soon. Hopefully we'll be able to clarify the language. Senator Frist. SEN. FRIST: Mr. Chairman -- and I will go back and address this -- but the FDA issued regulations on August the I I th, 1995, which were pursuant to the current device -- not pharmaceutical, but device authority at the time. Under this whole concept of (restrictive?) devices, that allows the authority to restrict the sale and distribution that we spelled out in the bill. It is broad authority, but it served as the basis for the bill itself. Some of these provisions are currently being litigated. Absent passage of the bill, these regulations still remain in force. And it's not clear to me how this is going to affect that process. But we can talk about it. We can address it over the next hour or so. SEN. MCCAIN: Could I ask Senator Hutchison, if the language were added to her amendment as consistent with current law, would that be satisfactory, since that's the intent? SEN. HUTCHISON: I think we need to make sure that it comes under the Congressional Review Act as current law, because we need to make sure that anything 29

settlements, and I was very concerned that all of a sudden, the IIIFA said perhaps the states that had settled would lose Medicaid funding, that is protected in this bill, our states will not have to worry about some future action that would limit Medicaid funding. There were other states rights that I thought were very important. So I think, in the main, I will offer one amendment, I think it is important that Congress keep its right of Congressional review according to the laws that we have passed over any regulations that might be put forward. But I think, in the main, we have a good starting point and I commend the Chairman for the good first draft. Thank you, Mr. Chairman. SEN. McCAIN: Thank you very much, Senator Hutchison. You mentioned the attorneys general, so I think for the record that the attorney general from Mississippi does the talking and the attorneys general from Colorado, Washington, and Kansas do the thinking. I want to make sure that that - (Laughter.) SEN. McCAIN: -- that is fully understood by the committee. SEN. HUTCHISON: I think your perspective is correct. Thank goodness. SEN. McCAIN: The senator from Washington. SEN. GORTON: Last June 20th, the attorneys general exacted a pound of flesh from the tobacco companies in exchange for a degree of certainty with respect to their legal liability in civil suits. The five largest tobacco companies of the United States, which have never lost a lawsuit alleging harm from their products, agreed to pay almost $400 billion over 25 years, including $60 billion in punitive damages. They agreed to waive their First Amendment rights and voluntarily to restrict their advertising and marketing. They agreed to achieve ambitious reductions in teen smoking and to pay hefty penalties if these goals were not met. They agreed to change their corporate culture and to accept responsibility for the actions of their lobbyists, and they agreed to much, much more which, in the opinion of the attorneys general, significantly advanced public health by preventing youth smoking. They did all the heavy lifting. I applauded the June 20 agreement, not only because the attorney general from Washington state, Chris Gregoire, was so involved in the operation, but because like Chris, I believe that the agreement, taken as a whole, could significantly reduce youth smoking. The agreement also surgically removed a very good chunk of funds from corporations for which I have little sympathy, but which manufacture a legal product to which 40 to 50 million Americans are currently addicted. The AGs operated in a manner carefully designed to ensure that the patient survived to keep on paying. 22

MEMBERS: Aye. SEN. MCCAIN: Those opposed, no. (No response.) The ayes have it. The Hutchison amendment, which is number 1415, which is number four, is accepted. Senator Hutchison, you're still recognized. bill? SEN. HUTCHISON: I'm not sure -- is my amendment number six already in the SEN. MCCAIN: That's already in the technical amendment. SEN. HUTCHISON: Okay. So my amendment number seven, then, would be to ensure that Congress has the ability to review all regulations promulgated under the act, first went to its authority under the Congressional Review Act. This just assures that the authority that we have given the secretary would come under the Congressional Review Act, just as this Congress has assured that regulations will for all areas of our government. And I think it's important that we do this, that we assure that Congress has the final ability to veto. This is our will. We are giving the secretary a lot of authority, and the FDA. But I think we need to assure that it conies under the Congressional Review Act. SEN. MCCAIN: Senator Hutchison, was this your understanding that this is no different from existing current law is what this amendment -- SEN. HUTCHISON: It assures that -- oh, absolutely. It assures that everything we are doing in the regulatory arena comes under the Congressional Review Act. It doesn't in any way change the act that we have already passed. SEN. MCCAIN: Dr. Frist, do you have any comment on -- SEN. FRIST: Not right now. Let me check it. SEN. MCCAIN: On the understanding, Senator Hutchison -- and I believe the understanding is correct -- that this really doesn't effect any change in the current law, I would support the amendment. And I think it's an important one to clarify, or maybe more properly emphasize, re-emphasize the role that Congress will play in reviewing any regulations. Is there further debate or discussion? If not, all those in favor -- SEN. FRIST: Mr. Chairman, I object, but I need a few moments. SEN. MCCAIN: Okay. Then -- could I ask the staff; do you agree that this is current law? N 0 m SEN. FRIST: Mr. Chairman, let mejust-- N ~ cn 28

STAFF (?): It appears that the amendment, Senator, is consistent with what we intend to do is to restrict FDA's authority to the actual tobacco products and not the tobacco plant or farmers. SEN. BRYAN: Okay. SEN. FORD: I say to my good friend, it just clarifies the language that's already in the bill to make it conform with Dr. Frist's FDA (approach?). SEN. BRYAN: And I would say to my good friend, I raise no objections. SEN. FORD: I thank you. And if you do, I want you to understand it very well. And we'll sit down and work it out. I thank the chairman. SEN. MCCAIN: All those in favor of Senator Ford's amendment, which is number five -- SEN. FORD: As modified. SEN. MCCAIN: -- as modified, signify by saying aye. MEMBERS: Aye. SEN. MCCAIN: All those opposed, no. (No response.) The ayes have it. The Ford amendment number five, as modified, is adopted. Senator Ford, do you wish to continue? SEN. FORD: I don't think so at this time, Mr. Chairman. I'm trying to (back?) my aces, so to speak, with having sufficient number of amendments. In case I lose on one, I'll have another one to offer. (Laughter.) As of now, I think I'm all right. I thank you. SEN. MCCAIN: Thank you, Senator Ford. Senator Snowe is recognized. SEN. SNOWE: Thank you, Mr. Chairman. I have an amendment that essentially would codify the marketing and advertising restrictions that we're referring to in this legislation that would be asserted and (soon?) to be included in the protocols that the companies would be signing with each of the 40 states, or however many are in the final analysis. I think it's very important -- SEN. BREAUX: Do we have a copy of it yet? 31

indicated they will challenge it. So in the final analysis, if we don't get that, what do we get? That is the intent and purpose of this legislation. And so if these are challenged in any way, going down through the list here, well, the companies could say, "Well, I don't know if the Congress really intended that to be the case. I don't know. Maybe they, you know, didn't really mean contain no human or animal image or cartoon character." So we'll see, you know, if they are challenged. They'll be challenged in any event, I would expect, if the companies don't support this approach. Somebody might challenge it. There are going to be 40 states that are involved in these protocols with these companies. Somebody might challenge it in any event. Let's see what survives. I doubt that the Supreme Court would move this quickly, however small the period of time will be that they're in statute. But we have to be absolutely clear, because I think this is the bottom line. This could be an end run around this legislation if, in fact, they challenge these in any way by saying, "Well, I don't know. I won't put this in the protocol. I don't really think Congress intended to do that because, after all, it really wasn't codified in law. It was just a recommendation." That's why this is so important, Mr. Chairman, in the final analysis. SEN. DORGAN: Mr. Chairman? SEN. MCCAIN: Senator Dorgan. SEN. DORGAN: Might I just speak briefly on this? The senator from Maine makes a very interesting point. The driver on this bill, it seems to me, is to try to shut down the advertising that especially is directed at kids, to addicting kids to cigarettes. And if some protocol develops in which the industry signs a protocol saying they won't do that, and the senator from Maine simply puts in statute the same provisions, what is the concern about someone protesting what is in the statute? Now, the fact is, I'm not a constitutional -- I'm not a lawyer at all. In Congress, of course, we have -- SEN. MCCAIN: We share that virtue. SEN. DORGAN: -- as many constitutional lawyers as there are lawyers. That has always been the case with Congress. But the fact is, Congress can enact restrictions on tobacco advertising consistent with the First Amendment. There are tests that have been established in court cases. I have heard it represented -- and I think it's represented because they want it to become one of these facts in this debate -- that Congress simply can't do any of this. 34

CLERK: Mr. Dorgan. SEN. DORGAN: Aye. CLERK: Mr. Wyden. SEN. WYDEN: Aye. CLERK: Mr. Chairman. SEN. MCCAIN: Senator Breaux, was your intention to vote aye? SEN. BREAUX: (Aye?). (Laughter.) SEN. HOLLINGS: It (does?) feel good. SEN. MCCAIN: No. SEN. HUTCHISON: Madam Secretary, I wish to be recorded no. CLERK: No. Yeas are five, nays 14. SEN. MCCAIN: So the amendment is not agreed to. Senator Ford, I believe that you would like to reserve some of these amendments. So if it's agreeable to you, we'd like to move on to the next section of the bill. SEN. FORD: You want me to proceed? SEN. MCCAIN: Actually, if you'd like to proceed with your amendment, or would you like for us to -- SEN. FORD: If you want to move title by title -- SEN. MCCAIN: Yes, sir. SEN. FORD: -- that would give you a rest from me. (Laughter.) SEN. MCCAIN: All right. Then we'll move to Section 2, and the first amendment would be the Frist amendment, which is Frist number one. Senator Frist is recognized for purposes of proposing an amendment. SEN. FRIST: Thank you, Mr. Chairman. In hearings before this committee, we have addressed the issue of access. And it's been very clear that if you have one outlet 38

I offer amendment number 2 on the -- SEN. McCAIN: Pass out the amendment, please, staf£ SEN. BURNS: It's on this sheet here, amendment number 2, to ban the sale of tobacco products through the use of vending machines, and to compensate the owners and operators of tobacco vending machines and, of course, this is without any spending attached to it. I think this is a debate that might take place later, but at least these folks will be severely handicapped -- in fact, I stopped this morning and talked to some folks out in Virginia on nry way in with regard to vending machines, and I heartily support the ban of selling those products through vending machines. It seems like that's where most of our problems are when it comes to youth smoking. But I also believe that those folks who have those machines out there, they're legal, they should be compensated for taking those machines out because there is quite a sizeable investment there. So we will offer this amendment. It is without spending, and I appreciate it, and I would urge my colleagues to support this amendment. SEN. McCAIN: I thank you, Senator Burns. I know that Senator Abraham had a very significant interest in this issue, as well as Senator Hutchison and others, and if anyone would have any brief remarks -- I am prepared to accept this amendment. SEN. Abraham, do you want to make a comment? SEN. ABRAHAM: Just I think this is a sensible way to address an issue. If we are going to take the actions that's planned tmder this legislation, I think there are a lot of people who are at risk who are not being compensated for, were not privy to the negotiations. I think this amendment attempts to involve in this final legislative approach people who were not privy to the settlement. SEN. McCAIN: Is there further discussion of the amendment? If not, all those in favor, signify by saying aye. (Chorus of ayes.) SEN. McCAIN: Opposed, no? The ayes have it, the Burns amendment is adopted. I understand, Senator Burns, that that means the first amendment of yours is not going to be offered? SEN. BURNS: That's correct, and after consultation with staff, and we'll get all those difficulties worked out, and I appreciate that. SEN. McCAIN: Thank you very much. 26

promulgated by the secretary in the form of a rule has the same standing as an FDA rule or regulation. SEN. FORD: Mr. Chairman -- SEN. MCCAIN: Let me set it aside for the moment. And if we could -- and see if you can't work out the language. Senator Ford is recognized. SEN. FORD: Mr. Chairman, I have an amendment to this. You're going article by article in the -- SEN. MCCAIN: Yes, sir. SEN. FORD: And I have an amendment that Senator Frist and I have come together on, and it's my amendment number five to strengthen the ban on FDA's authority to regulate farms. And on that amendment, Senator Frist has asked, and I believe he is correct, on the fourth line we remove "tobacco grower," and "by producer of a tobacco leaPbe added. On the fiHh line, we eliminate "tobacco grower." And then at the end of the amendment we add "other than activities by a manufacturer affecting production." Dr. Frist has looked at this now and he said with these changes, he felt it was important to put into the FDA changes under the bill as it relates to keeping FDA off the farm. SEN. MCCAIN: Is there discussion? And I understand -- is that in the form of a second degree, or is it -- SEN. FORD: It's modified. How about that? I modified my amendment to add the language that was suggested by Senator Frist. SEN. BRYAN: Mr. Chairman? SEN. MCCAIN: Senator Bryan. SEN. BRYAN: Mr. Chainnan, I don't have a sufficient understanding as to the consequences of this. And I don't raise objection to it, but it seems to me -- SEN. MCCAIN: Could we ask the staff to address it? SEN. BRYAN: Yes, that's my point, that we're going to have the staff tell us, because some of these things we're hearing for the first time. We need to understand what we're doing here. And I'm afraid that that may not always be the case. SEI~,T. MCCAIN: I think the senator's concerns are legitimate. Would the staff describe it? 30

SEN. MCCAIN: Do we have a copy of the amendment? SEN. FORD: No, but it's coming These women are working as fast as they can. SEN. SNOWE: I think, in the final analysis, it's absolutely clear that we make -- that we are absolute in our language in this legislation that we not only intend for these to be the restrictions on marketing and advertising, but these are the restrictions that are inserted in the protocol. So we want to make it crystal clear that the courts, in the event that there are any challenges, that these restrictions are a natural part of statutory language, that there would be no question in terms of the restrictions that this committee and the Congress had in mind with respect to being inserted in the protocols. And these provisions would sunset once all of the states have signed their protocols with the tobacco companies. I think it is important to include this, because without this codification, certainly, you Icnow, the companies could challenge exactly what intent there was on the part of Congress with respect to these (decisions?), because it's not an actual part of the statute that would pass in Congress. In addition, I have tallced to the attorneys at the Congressional Research Service, who have informed me that the approach taken in this amendment would actually strengthen these restrictions in the courts should the protocols be challenged in any way. And also, one final benefit of this amendment. I think it also would certainly encourage the companies that they should sign these protocols as quickly as possibly before there were any third-party challenges because this language would be in statute. So I would urge its adoption. SEN. BREAUX: Mr. Chairman? SEN. MCCAIN: Could I just ask -- Attorney General Gregoire, would you come to the table and give your views on this amendment, please? And then I'll recognize you, Senator. CHRISTINE GREGOIRE (ATTORNEY GENERAL, STATE OF WASHINGTON): Senator McCain, with all due respect, we are firmly of the mind, and all of the constitutional scholars whom I am aware of who have appeared before this Congress have indicated these provisions would be found to be unconstitutional. And to put them in even for an interim period during which time we ask for the manufacturers to sign a protocol does not correct that infirmity. So I would ask you to be aware that in the opinion of the attorney general and the constitutional experts, this provision would be unconstitutional. SEN. MCCAIN: Senator Breaux. Or staff, did you want to -- 32

SEN. BREAUX: I want -- SEN. MCCAIN: Could you -- do you want to -- Senator Breaux. SEN. BREAUX: Does staff disagree with that? STAFF: I agree completely. SEN. L}REAUX: Let me just point out, I mean, I think that my concern is this. I don't disagree with anything Senator Snowe is trying to accomplish. The ban on advertising and marketing restrictions are the key ingredients in this legislation. It's not the $1.10. Kids in my state and in everybody's state are going to be able to afford to pay the increase in the price of cigarettes. Hi today's economy, that is not that significant. Therefore, the most important features of trying to get children to stop smoking and dealing with a product that is lethal is ban the marketing and advertising. And it is very clear from everything that I've read that companies can waive their First Amendment rights. They can agree to every one of these, and that makes it constitutional if they agree to do it affirmatively and waive their First Amendment rights. But in the absence of that, in the absence of that, these provisions are not constitutional. A first-year law student could challenge this by reading just a few Supreme Court decisions, and I think would be upheld. We could go ahead and do it. If it's a feel-good amendment, I'm going to vote for it. But it's not constitutional. And that is why it is so important to do everything we can to get the companies to do what we want them to do, but not push them so far that we lose one of the most important pieces of this bill -- (inaudible). SEN. MCCAIN: Senator Gorton. SEN. GORTON: I have very little to add to this, Mr. Chairman. The amendment is unconstitutional on its face. The attorneys general are right. Senator Breaux is right. In the two years that I was out of the Senate, I was a partner in a law firm in Seattle, the senior partner of which is one of the finest First Amendment lawyers in the United States. I've discussed this with him at length. It's just that it's patently unconstitutional and we shouldn't put it in the bill. SEN. SNOWE: Well, Mr. Chait7nan -- SEN. MCCAIN: Senator Snowe. SEN. SNOWE: -- I appreciate this. This is not intended to be a feel-good o amendment. This is essentially the crux of this legislation and the question of whether or m4~ not these marketing and advertising restrictions will stand. And the companies have even m ~ V ,-+ 33

I understand that the Chairman will bring an amendment to ensure that the states, whose state suits are settled in this bill, receive the compensation they so j ustly deserve. I strongly support this amendment and implore my colleagues to do the same. I am only sorry that this committee could not have produced for the attorneys general and for the children in America a better, less greedy bill. With great reservations, and assuming it is not further weakened by debilitating amendments, 1 intend to vote for S. 1415 because it is the only tobacco bill moving and there are few legislative days left in this session. I hope that the measure can be resuscitated and revived before it goes to the Floor. I do think, despite this harsh criticism, that only Senator McCain and his patience could have produced a bill that has any chance of moving any further. All of the other committees with jurisdiction have failed, and this may succeed. But what the process has shown is that if Congress is incapable of acting responsibly and the President refuses to act responsibly, there will be an ultimate bill that will last only, I think, if the President and the tobacco companies come to an agreement and we ratify it. SEN. McCAIN: Thank you very much, Senator Gorton, for a very thoughtful statement. Now I would like to again remind the members of the committee that we are told that there may be an objection lodged which would cause us to stop our mark-up at noon. If that is the case, and we probably won't find out until around noon, then I would ask that the committee then meet so that we can work on defining what amendments are going to be offered, perhaps those that are going to be taken or rejected by voice vote, and those that are necessary, we could work out a time agreement. We fully intend to mark up this bill and finish it tomorrow. I would remind my colleagues that on Friday there will be the marathon votes on the budget which really would not allow us any time to vote. I think we are all committed to getting this bill marked up. I understand there are still difficulties. There's going to be a couple meetings maybe this afternoon to try and resolve a couple of important issues, but I think now it is important that we move ahead and begin the amending process, and we are, as we have agreed, going title by title and our first amendment will be offered by Senator Burns. And Senator Burns, you are recognized for purposes of offering an amendment, and obviously I want all the members to take as much time as they need. I also would urge the members not to take more time than they need. (Laughter.) SEN. McCAIN: Senator Burns. SEN. BURNS: We are offering -- I have never had that happen to me before. Thank you, Mr. Chairman. N 0 tr a N ~ cn ~ w 25

Well, because I'm not a lawyer, especially a constitutional lawyer, I don't know exactly what we can and can't do. But I know, having read some of the cases, that there are circumstances in which Congress does have an interest. The state must have a substantial interest in the regulation of -- in support of the regulation itsel f. That's one of the tests of the Supreme Court. The state must demonstrate the regulation directly advances the government interest asserted. My point is, I don't know whether these provisions would be upheld by the Supreme Court. But if, in the context of passing tobacco legislation, the industry intends to sign a protocol that essentially embodies exactly these provisions, are we worried then the industry will go to the Supreme Court to contest these provisions? And if so, there isn't a central gut to this bill. - SEN. FORD: Mr. Chairman? SEN. MCCAIN: Senator Ford. SEN. FORD: I understand where both senators are coming from, and I hope that we will have the protocol that needs to be signed prior to passing the piece of legislation. Now, some of you are not nearly as old as I am, but I remember when the Tobacco institute and all its companies decided not to advertise on television. We then, after the fact, passed a law to prevent them from that. And that law was never challenged because the companies agreed to it. Now, what we're doing is something that everyone -- not everyone, but most say is unconstitutional. And we're trying to make a point. Well, the point can be made when you draft the protocol or the side agreement and say, "This fits into the bill." So we make a very large mistake, I think, trying to move this bill forward, putting in things that most agree is unconstitutional and that will be challenged. It isn't the tobacco manufacturers that could challenge this. It would be others. So what we're trying to do, I think, is to narrow and not have the suits by the advertising industry, but have this dealt directly toward tobacco manufacturers and what they agree to do. And if we broaden it under the -- the manufacturers wouldn't have any control over lawsuits under your provision, Senator, I'm afraid, because they want to agree to the protocol. Others will sue under this. And so I would hope that we would concentrate on developing the protocol and have that then in order to trigger the law or however. I don't know how that would work in the end. And I'm not a lawyer. That's another virtue I have; maybe two I've got. But I would hope that you would withdraw this and not force us to vote against you. SEN. MCCAIN: If there's no further debate, will you accept a voice vote, Senator Snowe, or do you request -- 35

SEN. SNOWE: Well, Mr. Chairman, but we don't know. I mean, that's the whole point in this committee. We don't know. It's obvious there's a strong difference of opinion -- SEN. FORD: You can't always -- (inaudible). SEN. SNOWE: -- on a fundamental point in this legislation. It's going to be challenged anyway, irrespective of the fact that those protocols are signed or not signed by a third party. Those challenges will exist. SEN. : Will the senator yield? SEN. SNOWE: I just think it's very important that we provide clear guidance if we're going to do it. I'd be very surprised if the Supreme Court would add that quickly. SEN. MCCAIN: I'd just quickly respond, and I think -- I'd like for us to move on, because I think we've ventilated the issue. But I do rely on the attorney generals. I do rely on them because they have to do this kind of work every day, and they know what's constitutional and what isn't constitutional. They aren't the final arbiter, but they carry great weight with me and members of this committee. I'm not willing to put into any law something that is viewed by the overwhelming majority of attorneys general, governors and constitutional scholars as being unconstitutional. So do you request a recorded vote or can we do a voice vote? SEN. SNOWE: I'd like a recorded vote, Mr. Chairman. SEN. MCCAIN: Recorded vote. The clerk will call the roll on the Snowe amendment. CLERK: Mr. Stevens. SEN. MCCAIN: No, by proxy. CLERK: No, by proxy. Mr. Burns. SEN. BURNS: No. CLERK: Mr. Gorton. SEN. GORTON: No. CLERK: Mr. Lott. Mrs. Hutchison. Ms. Snowe. SEN. SNOWE: Aye. 36

SEN. FORD: Absolutely. You can work with me almost anything, Mr. Chairman, and I'd be glad to -- SEN. MCCAIN: Thank you, sir. SEN. FORD: -- sit down with anybody. But this is a industry-wide problem that my friend related to. I'm looking at brands. SEN. MCCAIN: Could I then -- SEN. FORD: Well, I ask unanimous consent that my amendment be set aside until such time we had an opportunity to visit it. SEN. MCCAIN: Without objection. And before we move to the next amendment, we do have a resolution of the Hutchison amendment. Her staff-- SEN. FRIST: I think we need to wait a little bit wait longer -- are we okay? SEN. IIUTCHISON: (Off mike.) SEN. FRIST: Yeah. Well, Mr. Chairman, on that previous amendment, just for the record, I would encourage you to look at de minimis for the youth market itself in your discussion. SEN. MCCAIN: Senator Ford? SEN. FORD: Sir? SEN. MCCAIN: Senator Frist had a recommendation. SEN. FRIST: In your discussions, that we set it aside. But in your discussions, consider de minimis for the youth market itself, since that's really our objective here. SEN. FORD: Yes, that's fine. I have no problem with that. SEN. MCCAIN: Senator Ford, there are several other amendments that you have. Would you like to wait and -- SEN. FORD: Mr. Chairman, I have two -- 15 and 16 are just clarifying amendments and I don't know that anybody would be -- SEN. MCCAIN: Okay. Would the -- can we consider amendments 15 and 16 in bloc -- 44

who does not fulfill their obligations under the law that teenagers, youth, are able to access that outlet even if you have very high compliance. And therefore, the entire issue of under-age access laws depends on enforcement of those laws. This particular amendment offers both a carrot and a stick in that regard, based on testimony before this committee. What we do in this amendment is establish a compliance bonus fund, and it's paid for by monies that have already been allocated or already been allocated in a large sense from the look-back penalties. The look-back penalties in the underlying bill are spelled out to go 90 percent back to the states, 10 percent to stay with administration outside of the states. We have put a carrot and a stick in. The carrot says that of the 10 percent administrative funds, take half of that, which is 5 percent of the overall look-back penalties, and set out a pool that people who meet goals of 95 percent compliance and enforcing through operations conducted by the states, restricted access, for example, by a store, would have access to this additional 5 percent, in effect reward by meeting goals. The stick end of this under-age access at local stores is the following. Of the 90 percent of funds gathered from the look-back that go back to the states, 5 percent of those funds would be taken away i f you didn't meet certain minimal standards. Those standards would be 75 percent over five years. In other words, five years after all oCthis begins to take place, if you haven't achieved your goals, it's 75 percent. We know initially we have to have 95 percent compliance, where people at, for example, the convenience store are complying with the law and not selling tobacco to people, for example, under the age of 18. The fundamental problem is access. This amendment goes to the heart of that. SEN. MCCAIN: Is there further debate or discussion on the Frist amendment? If not, all those in favor of the Frist amendment, signify by saying aye. MEMBERS: Aye. SEN. MCCAIN: Those opposed, no. (No response.) The ayes have it. And the Frist amendment is adopted. And before we go to the next amendment, let me ask unanimous consent that as we go through the section by section of this bill, that with the exception of those amendments that are set aside, such as Senator Ford's amendment now -- and there will be amendments set aside in Section 2 -- for example, the Kerry amendment, because Senator Kerry is not here, and there's a Hutchison amendment that's still being discussed with Senator Frist. But aside from that, I ask unanimous consent that as we go through each of the sections, that there will be no more amendments to those sections that we have completed. That's the only way we're going to get through this process. Is there objection to that procedure? 39

SEN. : Company or industry? SEN. FORD: (Inaudible) -- to lift the l iability cap. I'm sorry. I've got so dang many. SEN. KAY BAILEY HUTCHISON (?): Senator Ford? SEN. FORD: Yes. SEN. HUTCHISON: Could I ask a question because I've had the concern that you have, a concern that a company that isn't in this bill, that decides not to participate -- SEN. FORD: Well, there's a lot of them didn't participate. SEN. HUTCHISON: Right. Would then increase the amount of teen smoking and all of a sudden the caps would come off and you would jeopardize the people who abiding by the law by people who are not. And my question to you is, what is your remedy? I was working on this other amendment -- SEN. FORD: Well, my remedy is that you take -- that the total company brands and see if they meet the criteria. Because if they meet the criteria on 99 percent, and miss it on 1 percent, then they lose -- the cap on their liability is taken of£ And so what we've done in this bill is brand by brand, instead of by manufacturer. And it's an overall picture that we're looking at. And if they do well, even much better than we expect them to, but they miss it on one little I percent and they don't reduce it by six-tenths of I percent, then they lose the liability cap. And I think that's unfair to a company that overall or 99 percent complies, and we then jeopardize them with this small loss. SEN. MCCAIN: Senator Gorton. SEN. GORTON: Senator Ford, navigating through this, first blush is -- (inaudible) -- difficult. I guess I'd like to ask you, do you -- are you aware of the fact that there were technical changes made to Section 203, I think late last -- some changes made to it last night. Are you aware that there are two other references to doing the same thing into Section 20 and other parts of the bill? SEN. FORD: Well, I would say to my friend, there was a lot done to this bill after 1:00 AM this morning. 42

SEN. GORTON: Well, I'm just -- I just wanted to note, there'd been two other major references to Section 203. SEN. FORD: Well, I ask the chairman then to set it aside, so I can look at something I've never seen. SEN. MCCAIN: Senator Ford, could I -- SEN. GORTON: I'tn trying to figure out whether -- I would really like an answer, Senator Ford. I may very -- (inaudible) -- be voting for it. SEN. FORD: Just pay attention to me and you'll be all right. SEN. MCCAIN: Senator Ford? SEN. GORTON: It doesn't do me much good. SEN. MCCAIN: Senator Ford, could I ask -- we proposed a de minimis sort of proposal here that might -- to satisfy some of your concerns? SEN. FORD: Yeah, I imagine so. SEN. HOLLINGS: If the chairman would yield, I'm reading that on page 19. I'm, like you, just catching up with it. But the exemption is provided for de minimis. It says "... in any year in which a penalty is being assessed, the secretary shall exempt from -- (inaudible) -- any manufacturer with less than 1 percent of the domestic market share for a specific tobacco product, unless the secretary fmds that the manufacturer's specific product is used by underage individuals at a rate equal to or greater than the manufacturer's total market share for the type of tobacco product." SEN. FORD: Well, now -- I say to my -- no. I say to my friend that's an industry-wide proposal. That has nothing to do with the brand. And you have -- SEN. MCCAIN (?): It's also due process. SEN. HOLLINGS: Sir? SEN. MCCAIN: Yes, sir. But could we have our staff work with yours real quick -- SEN. FORD: Absolutely. SEN. MCCAIN: -- on a de minimis and due process -- 43

SEN. FORD: Mr. Chairman, I don't want to object to it, and I'm trying to help a little bit here. But if something's put in the bill that reflects back in another section, I don't think you can have an objection to us then trying to cure whatever the problem might be. SEN. MCCAIN: I understand that part, but I'm -- if there is an amendment that somehow does relate back to another section, then I think we'd take that into consideration. SEN. FORD: Well, we're taking the House procedure here, now, going section by section, and you can't go back. And then that eliminates a great deal; maybe something that when you strike something, it does a lot of things. And then you -- SEN. MCCAIN: Senator Ford, if it does that, then we'll go back to it. SEN. FORD: Well, but-- SEN. MCCAIN: But we'll never reach a conclusion. If we can't get unanimous consent, then we will move forward. SEN. FORD: That would be in the eye of the beholder. SEN. MCCAIN: Well, if Senator Ford believes that there is an amendment that affects a previous section of the bill, I will give you my word right now that we will reopen that section of the bill. SEN. FORD: Will you have that statement notarized and signed? (Laughter.) SEN. MCCAIN: Yes, sir. SEN. GORTON: Mr. Chairman? SEN. MCCAIN: Yes, Senator Gorton. SEN. GORTON: Mr. Chairman, I'm concerned about whether or not your proposal is so broad that it will (create?) a second-degree amendment when we go back. We'll still have a right to second-degree amendment when we go back, will we not? SEN. MCCAIN: Yes. Senator Ford. SEN. FORD: All right, Mr. Chairman -- N 0 SEN: MCCAIN: Thank you. Without objection, the unanimous consent ~ agreement is agreed to with a strong notarized caveat from Senator Ford. (Laughter.) N -t' U ~1 m 40

SEN. FORD: Well, at least we've kept our good humor so far. Yeah, left-handed notary. Notorious. SEN. MCCAIN: We have a few lawyers in the audience who could notarize it for us. SEN. FORD: Mr. Chairman, I want to call up my amendment number 14. SEN. MCCAIN: Senator Ford's amendment number 14 will be distributed. SEN. FORD: And Mr. Chairman, what we have here -- and this bill is beginning to get unfair in a lot of places in trying to develop fairness and then not jeopardize any of the ability of individuals to secure funding and that sort of thing. So under my amendment number 14 is to strike brand-specific penalties which impose, in my opinion, penalties on manufacturers of brands with de minimis youth markets. Let me give you an example. We have a manufacturing company and they have a brand that is used 1 percent by youth. And so, under this legislation, they have to reduce that 1 percent by six-tenths of a percent. And that means if they don't reach 0.4 or they go to 0.5, they lose all of the protection for the whole company. And so, therefore, I think it's important that we take all of them at one time rather than say, "You got I percent of youth, and if you don't reach 0.4, then you lose all the look-back, all the protection under the minimum." And somehow or another, to me that just ain't fair. And I would hope my colleagues would help me on this. And for example, if Brand X was smoked by 25 percent of all youth in a year, but reduced to 10 percent all youth in year 10, the target would be met. But if Brand Y was smoked by 1 percent of all the youth in one year and it came down to six-tenths of a percent in year 10, this would not be good enough and the company making Brand Y would lose all of its liability cap -- all of its liability cap. And so let me state that I'm -- want to stop youth from smoking. I agree with the attorney general of Mississippi when he made his statement before this committee. But this works in an extremely unfair way to companies -- unfair way to compensate individuals and to ruin small companies. SEN. ERNEST HOLLINGS (D-SC): Senator, what's the fair way? SEN. FORD: Sir? SEN. HOLLINGS: What's the fair way? Let's assume you're right it's unfair. How -- in other words, you're going to have no look-back provision for the -- N) 0 ~ SEN. FORD: Oh, yes, yes, but it -- all the look-back -- everything's the same, except instead of by brand name, you do it by company. m N) _C~ 07 V 41

SEN. FORD: Absolutely. SEN. MCCAIN: -- and have your staff distribute amendments 15 and 16, which are, as I read them, "clarify chart regarding required percentage reduction" and "clarify underage smokeless use." SEN. FORD: It clarifies, Mr. Chairman, that we are reducing a percentage of the percentage. And I think that's all I'm doing there. SEN. MCCAIN: Senator Dorgan, you're about to be recognized here in a minute. SEN. BYRON DORGAN (D-ND): I'm not going to offer the amendment at this time. SEN. MCCAIN: Thank you, Senator Dorgan. (Pause.) Can the staff explain this, these two amendments to us, please -- 15 and 16. They both have to do with the chart on page 103 and 104. Or CAN the staff explain? (Laughing.) Maybe -- perhaps Senator Ford would like to explain. SEN. FORD: Well, all I'm asking to do, Mr. Chairman, to put in that chart, insert the following: "required percentage reduction as a percentage of base -- (inaudible) -- percentage" and "underage smokeless tobacco use." That's all I'm asking to do, just the right heading of that be changed to -- SEN. MCCAIN: It seems to me that both -- SEN. FORD: (Inaudible) -- had to say "percentage reduction from what" -- SEN. MCCAIN: I see. SEN. FORD: We're just trying to say from what it's reduced from here. SEN. MCCAIN: I believe that both these amendments are technical in nature and clarify the intent of the law. And I move that we accept both amendments in bloc. SEN. JOHN ASHCROFT (R-MO): Mr. Chairman? SEN. MCCAIN: Senator Ashcroft. 45

SEN. ASHCROFT: I don't understand yet how this is working. May I ask his staff to maybe explain this to me? STAFF: My initial interpretation is that Senator Ford is assuming that if we pick a number that says that's the youth smoking rate, that on the chart on page 103 we're talking about percentage point reductions from that. So if 50 percent of the kids smoke that by year 3, then we'd have to take 15 percentage points off of that, and thus 35 percent of the kids would smoke. Is that your -- SEN. FORD: What's we doing, we're saying that the percentage now is X, and that we -- at the end that we're supposed to reduce it by 60 percent. So you take 60 percent of X, we don't have a percentage in there, so no one really knows what we're to reduce from. SEN. MCCAIN: But we are using a base of 4.5 million youth smokers. And I think it's -- SEN. FORD: I understand that. SEN. MCCAIN: Or are you saying that we're using -- SEN. FORD: (Inaudible) -- anything else. SEN. MCCAIN: Senator Ashcroft, understand or would you require additional explanation? SEN. ASHCROFT: Well, you know, I'd feel more comfortable -- SEN. MCCAIN: If Attorney General -- (name inaudible) -- come up and -- MR. : And it's a question of how the survey is used. And I don't know whether that's on a percentage basis or whether it assumes an absolute number. SEN. MCCAIN: I think we may get some help. (Pause.) MS. : I think, if I understand Senator Ford correctly, he's simply trying to clarify the actual reduction, that when we want a percentage reduction, like 60 percent, oN that it -- 50 percent of that or whatever we want -- I don't see any problem with what he's m~ said. I think he's -- (inaudible) -- clarifying the intent of this whole chart. ~ ~ ut m ~ 46

SEN. FORD: It kind of helps clarify it. I wish I was an attorney, I'd say the right thing. SEN. MCCAIN: All right. Then, if there's any further debate, all those in favor of the two Ford amendments that were considered in bloc, signify by saying aye. (Ayes heard.) SEN. MCCAIN: Those opposed? The ayes have it. The Ford amendments number 15 and 16 are adopted. Next would be -- Senator Ford, did you want to -- SEN. FORD: I don't think I have any others right at the moment -- SEN. MCCAIN: Senator Kerry amendment number 8 will be set aside because Senator Kerry is, as I mentioned earlier, at a funeral. Senator Dorgan said he was not going to propose his amendments at this time. And now we would like to recognize Senator Wyden for his amendment. SEN. RON WYDEN (D-OR): Thank you, Mr. Chairman. This is the -- SEN. MCCAIN: Wyden number 2, I'd tell the staff to distribute. Senator Wyden is recognized. SEN. WYDEN: Thank you, Mr. Chairman. Mr. Chairman, this amendment goes the heart of the bill, and that is to strengthen the look-back section with respect to making sure that the job of reducing smoking of young people in this country really gets done. First, Mr. Chairman, let me commend you, because you have strengthened what came from the earlier settlement. But I do think that there are important additional policy steps that ought to be taken - SEN. BREAUX: If the gentleman would excuse me, we don't have the amendment yet, do we? SEN. MCCAIN: They're about to distribute it right -- 47

(Pause.) Go ahead and proceed, Senator Wyden. SEN. WYDEN: Thank you, Mr. Chairman. And there are several major policy changes that would do more to protect kids in this amendment than we have in the bill, despite the very good efforts of Chairman McCain. First, with respect to this amendment, we go company by company with respect to the look-back target. The current mark now has an industry-wide standard. I think it is a very serious health policy mistake to not go company by company, and I want to be clear to my colleagues as to why that's the case. If you use an industry-wide standard and company A reduces youth smoking rates in conformity with the target, it loses both current and fiiture market share. If other companies don't reduce the youth smoking rates, company A, however, is still subject to industry-wide penalty. So that in effect means that under the mark that we have before us, the company that is doing the responsible thing gets penalized twice for reducing youth smoking rates. The other non-conforming companies end up capturing some of company A's market share and likely aren't going to be penalized any more than company A. So you're (defending ?), in my view, the wrong method with respect to going industry-wide. Each company ought to be liable for its own performance with respect to progress in reducing youth smoking. And I think we ought to be creating the strongest possible incentives for companies to turn their vast knowledge, the enormous entrepreneurial and public-relations skills that they have, to the cause of youth smoking reduction. And we ought to make sure that there tangible finance-able(?) rewards when in fact they do. So i would hope that the bulk of the look-back provisions would be focused on penalties that would be imposed on a company-specific basis when companies don't hit the target. That's the best way to really turn this issue around. In the past, when companies were targeting kids, they suffered no consequences, they got to dominate the market. If we go company by company, as this amendment does, then it seems to me we've made significant and tangible progress to reducing youth smoking. Mr. Chairman, I yield back. SEN. BREAUX: Would the senator yield for a question? 48

(Senators say "aye".) Those opposed? "No." (Senators say "no".) SEN. MCCAIN: In the opinion of the chair, the "no's" have it, and the amendment is not agreed to. Could I just say to my friends, the few remaining, I think we can get this done this afternoon if we work into this evening. We have a couple of issues that Senator Ford and Senator Hollings, old friends, are going to agree on. I want to thank all members of the committee for their cooperation. Now, we'll convene again at 2:30. END 70

SEN. MCCAIN: It's agreeable to me. SEN. SNOWE: Okay, then we ask unanimous consent to amend this sense of the Senate to include child care. SEN. MCCAIN: Is there objection? SEN. ASHCROFT: May I ask what business -- what amendment we're on? Are we still on Senator Burns's amendment or are on the sense of the Senate amendment ? SEN. MCCAIN: I apologize, Senator Ashcroft. You're exactly right. I'd like to aslc Senator Burns if he would withdraw his amendment and then we consider the Snowe sense of the Senate amendment at this time. SEN. BURNS: Mr. Chaimian, I will be happy to withdraw. But I feel very strongly about this issue and I want it included somewhere down the line. And I would withdraw my amendment and I shall fight another day when we're on better ground. SEN. MCCAIN: Thank you very much -- SEN. ROCKEFELLER: Mr. Chainnan? SEN. MCCAIN: Senator Rockefeller. SEN. ROCKEFELLER: I cannot object, obviously, since it's not my amendment, to say no to adopt it. But I think we have to understand what we're about here. And that is that, to speak from your point of view, you wanted to, and I understand that, and I think properly so, to protect a potential thing that will pass the entire United States Senate and get signed by the president. On the other hand, when one sort of dismisses black lung victims, asbestos victim, I'm going to be talking about veterans, you know, these are people and they're people who are hurting and they're people who are hurting a lot more because of having smoked cigarettes, since none would be recompensed under any of this unless obviously that had been very clearly shown. So that we may be protecting a deal -- we may or may not be protecting a deal, but one thing we surely are doing in this is depriving people who for years and years and years have suffered because of tobacco companies from being recompensed at all. And I find that deeply troubling. 54

designated for other purposes as well. But this would be eonsistent with the budget resolution that's currently being debated on the floor. It would require a 60-vote margin to approve the use of these funds beyond the use of the designation for Medicare purposes. We all know this legislation will generate more than $500 billion. That doesn't include the look-back penalties, should the companies fail to meet the targets in reducing teen smoking. So, obviously this money has generated a great deal of interest in the White House, it's in the president's budget, recommending the use of $65 billion derived from this legislation for purposes related to smoking and sonie purposes not relating to smoking. I think that we should take the prudent course here, Mr. Chairman, and be very circumspect in terms of how we use this money; otherwise it could quickly evaporate the so-called piggy bank. And so my sense of the Senate does list the purposes for which this money could be used but not limited to. So that in the event that members decide in the Senate that they want to use this money for a specific purpose, then it would require a 60-vote margin, which is consistent with the budget resolution. And the purposes that are listed in my sense of the Senate include Medicare, supporting tobacco use prevention and cessation, supporting tobacco-related health research activities, assisting tobacco farmers and tobacco-dependent communities, creating a tobacco and asbestos trust, setting with or reimbursing states for tobacco- related health care costs and damages, including Medicaid, and providing funding for the federal black lung program. SEN. HOLLINGS: Would the senator yield? SEN. SNOWE: I'd be glad to yield to Senator Hollings. SEN. HOLLINGS: On behalf of Senator Kerry, who couldn't be here, would you also add Section 8 on behalf, also to be expended for child care and child care development? SEN. SNOWE: Uh -- the chairman agree with that? (Laughter.) SEN. : The majority -- SEN. SNOWE: Oh, I don't -- I don't disagree. I'm glad the chairman agrees. 53

And I thank Senator Wyden. SEN. WYDEN: Well, I thank the chairman for his thoughtful comments. I would only just add another point or two. First, the chairman is correct with respect to the accountability panel, As our colleagues know, that's something -- SEN. MCCAIN: From now on it's the Wyden panel. Yes. SEN. WYDEN: I would hope that we would understand that because every past effort, every past effort of Congress to deal with tobacco company abuses has failed. The waniing label effort. The Synar amendment effort. The first restrictions on electronic advertising. We do need to have an aggressive forum for following up when companies don't meet the youth reduction target. We do that with look-backs, we do that with accountability. One of the reasons that I'm offering this particular amendment, besides the fact that it is essentially what passed the Labor Committee on a bipartisan basis, is that the accountability panel is, of course, company by company. This would ensure that we have the best possible mesh between the look-back provisions and the accountability panels. this. But I want to give our colleagues who choose to an opportunity to talk further on Mr. Chairman, in recognition of the hard work that you have done, given the fact that Senator Ford and Senator Hollings and you and I are going to talk about another issue that is of extraordinary importance to me, and that's protecting these youngsters overseas, I am prepared, after colleagues have spoken, to withdraw this amendment at this tinre. SEN. MCCAIN: I thank Senator Wyden. Is there further discussion of the amendment? If not, Senator Wyden's amendment is withdrawn. Senator Wyden, I understand, and you make some very legitimate points, and I think they're important. And I thank you very much for your willingness to move forward with our deliberations. ~ 0 o+ 4~ co rv ~ m co m 50

SEN. WYDEN: Yes. SEN. BREAUX: The number of-- the percentage of reduction is the same, you're just adding and applying it to companies individually. I mean, some companies could meet the target, others would not meet the target, each company would be treated separately? SEN. WYDEN: The percentages that we're using are essentially those passed the Labor Committee on a bipartisan basis. SEN. BREAUX: You're changing the senator's and the chairman's draft as well. SEN. WYDEN: Yeah. SEN. MCCAIN: Yes. SEN. WYDEN: Yes. I want to be clear, the percentages that we're using in this amendment were the percentages that won on a bipartisan basis -- SEN. BREAUX: And what would that percentage be? SEN. WYDEN: It goes to 80 over 10 years. SEN. BREAUX: Eighty percent of the -- SEN. WYDEN: Yeah, yeah. SEN. MCCAIN: May I respond, Senator Wyden? I understand the intent of this. I think it's very encompassing. Let me also remind Senator Wyden what he already knows, is that under the provisions of this bill, companies can sue each other, as you know, which was provision that Senator Wyden sought. Also, the Wyden panel which was put in can also punish these companies in a very effective fashion. I think that we have gone to considerable lengths, and I would hope that Senator Wyden would see his way clear at some point in the debate to withdraw the amendment. But I understand what he's trying to do and I understand the intent. But I again want to remind Senator Wyden that the intense negotiations that went on, we had to make certain trade-offs and this one of the trade-offs that we made. 49

If you do smoke, you've really got black lung. And most miners work for 20 or 30 or 40 years. So the implications of this are enormous. These are folks who are not being compensated for terrible illnesses which the senator from Montana and I have viewed firsthand for a very long time. And I think it's an extremely worthy amendment. SEN. MCCAIN: I thank you, Senator Rockefeller. Let me just say that we've been around this track a lot of times as to how the money should be distributed. Senator Stevens and -- I've forgotten who on the other side -- are very interested in the asbestos issue. SEN. : (Off mike.) SEN. MCCAIN: Senator Inouye(?). You and Senator Rockefeller are others are interested in the black lung issue. Senator Kerry has a commitment on early child development. I'm sure that there are others on the other side of the aisle who have commitments to the National Institute of Health and other research programs. I understand that Senator Snowe had a sense of the Senate resolution that included this, and I'd like to recognize her in a second, along with others. But I fear, I say to my colleagues, I fear that if we get into a food fight over the distribution of these fimds, one, it's really an issue for the entire Senate, and very frankly, the administration, the Democrats' leadership and Republican leadership as to how this money is supposed to be dividing up, and it's going to be a very tough fight. And I'm afraid if we get into this in this committee that the next amendment is going to be a black lung -- I mean, an asbestos and the next one NIH and the next one whatever. I think that we have some solution to this in the form of an amendment by Senator Snowe. I may be taking something for granted here. But could I ask Senator Snowe to make a comment on this? But I'm very reluctant, except in the context of sense of the Senate, for us to be designating money. We've already alienated about seven other committee chairmen as it is. So we might not want to tread on their turf in additional unnecessary fashion. Senator Snowe? SEN. OLYMPIA SNOWE (R-ME): Thank you, Mr. Chairman. I do have an amendment that does represent a sense of the Senate to delineate how this money could be used, not limited to those purposes. Obviously the money could be 52

SEN. GORTON: I don't need a river. SEN. MCCAIN: Don't need a river. All those in favor say aye. (Ayes.) Those opposed. (Noes.) In the opinion of the chair, the ayes have it, and the Snowe sense of the Senate amendment is adopted. Now we -- Senator Gorton -- SEN. GORTON: My amendments are really appropriate in title six, and they are listed in title six, and that's when they ought to be brought up. SEN. MCCAIN: All right, sir. Then we'll move forward to Senator Hutchison's amendment number one. Are you ready, Senator Hutchison, with that amendment? SEN. HUTCHISON: Are you talking about my first -- SEN. MCCAIN: We have eight -- one, two, three, four, five, six amendments -- look at the next page -- so which of those amendments would you like to bring up at this time? SEN. HUTCHISON: Actually, Mr. Chairman, I think all of my amendments -- I am not offering number one. Number two, has been accepted, it's in the bill. And number three -- SEN. MCCAIN: Is in the bill? SEN. HUTCHISON: Is in the bill. So -- oh, and number four has been -- we voted on that. So it's in -- number five is in the bill I believe. No, I'm sorry, I'm not offering number five. SEN. MCCAIN: Okay. SEN. HUTCHISON: And number six -- SEN. MCCAIN: Eight is -- SEN. HUTCHISON: -- is in the bill. SEN. MCCAIN: It's in the bill, okay. SEN. : (Off mike.) SEN. HUTCHISON: Is number six on the bill? SEN. MCCAIN: Number two is not -- I'm sorry, number two, funds used according to state law, is not in the bill. It's perfectly acceptable if you'd like to offer that amendment, Senator Hutchison. 61

SEN. MCCAIN: Senator Rockefeller, could I just say that I understand that. And Senator Rockefeller has a long record of commitment to trying to address this terrible disease which has affected so many citizens of the state of West Virginia. I would hope, Senator Rockefeller, in light of the parameters which I have described, if we could add -- it's added in the sense of the Senate, so that we are on record on supporting that, but yet at the same not mandating it to the entire Senate, that I hope that that would be of some satisfaction to him, certainly not complete but of some. And also, I wonder if Senator Rockefeller would like at this time to add the veterans to this sense of the Senate as well? SEN. ROCKEFELLER: Yes, I have coming up, at the chairman's discretion, an amendment on that, one of which is a sense of the Senate but one which is not a sense of the Senate. So obviously I would not object to -- SEN. : Mr. Chairman? SEN. . -- Chairman? SEN. : Mr. Chairman? SEN. MCCAIN: Could I go -- could I go back and forth? SEN. BREAUX: If I could, and I -- on the sense of the Senate resolution, I appreciate what my colleague from Maine is proposing here, to put forward a list of places to go. You know, I can think of several others. If we kind of adding them as we're talking here, how about veterans; how about NIH, that would be a good one; how about -- I don't think that's a very rational approach or road for us to start down or productive road for us to start down at this point in time. And I appreciate the cause of trying to help a number of these others areas. And I appreciate that this is a sense of the Senate and not the bill. But I don't think this is the committee nor probably the time to do this. And so I would object to us proceeding on Ford, because there's probably another five or 10 that maybe we could consider, and I just don't think it gets us at the end of the day where we need to be on this markup and this bill. SEN. SNOWE: Mr. Chairman? SEN. MCCAIN: I understand. Could I just add one comment? Then I'd -- SEN. SNOWE: Yes-- 55

SEN. MCCAIN: Could I ask unanimous consent -- excuse me, Senator Dorgan and then -- Senator Rockefeller and then Senator Dorgan, if you don't mind, Senator Dorgan, since -- SEN. SNOWE: (Off mike) -- you're going to get -- SEN. ROCKEFELLER: Some of us have the feeling that the chance to make amendments in this process, in this committee, are now being -- which reflect on spending -- are now in a sense being removed. SEN. MCCAIN: (Off mike)? SEN. ROCKEFELLER: No, I don't say that in any hostile way at all. But if that is to be the case, and i f there is therefore to be a sense of the Senate, then I think -- you know, we are 20 people out of 100 -- we are 20 percent of the Senate -- we have a duty to instruct the Senate of our views and our parameters on this -- moral parameters as well as financial parameters -- they don't have to take our advice -- the decision will be made in other committees. But I very strongly feel if we are going to accept the Snowe amendment, and the Burns Amendment being withdrawn, that we should then have the black lung, which has been included -- I think the veterans compensation on which I expected to offer an amendment, not a sense of the Senate, but veterans compensation, and there is a very strong argument for that. The senator has mentioned clinical trials for cancer at the NIH, and the chairman has mentioned that -- that can be looked at frivolous or that can be looked at as a monumental advance for a very, very small amount of money. And the whole question of Medicaid eligibility for children and health insurance, allowing the effort to take those children who are already Medicaid eligible but who don't know it or haven't done anything about it, for which there is no money in the children's health insurance bill, and to be able to extend that to help a little bit. I would ask that those be included in the sense of the Senate in that the sense of the Senate is a, as the senator from Washington has pointed out, is a much weakened resolution. SEN. MCCAIN: Would the -- before I recognize Senator Dorgan, would the senator from West Virginia at this time like to propose a perfected amendment that would include veterans in the sense of the Senate resolution? SEN. ROCKEFELLER: Yes, and the clinical trials at NIH and the expanded Medicaid eligibility. SEN. MCCAIN: Without objection. 0 m ~ Senator Dorgan? a+ ~ cn ~ m 58

Now, Senator Dorgan, would you care to propose any amendments at this time on Section 2? If not, then we have some remaining Ford amendments. Senator Ford, would you propose or hold back at this time? SEN. FORD: I think I'll hold back at this time. SEN. MCCAIN: All right. Then -- SEN. FORD: As long as I'm not prevented from bringing them at the appropriate time. SEN. MCCAIN: Yes, sir. Then, with the proviso that there is the set-aside -- that kept open will be the Kerry amendment number 8, the remaining Ford amendments for him to bring up at this time -- I mean, at his request, then we will consider Section 2 closed and move to Title III. And the first amendment will be by Senator Bums. SEN. CONRAD BURNS (R-MT): Mr. Chairman, on my number 1 amendment on that, I'd like to withdraw that and -- SEN. MCCAIN: without objection. SEN. BURNS: And also, 2 and 3 have been taken care of. I do want to offer number 4, though, to transfer certain settlement proceeds to the Black Lung Disability Trust Fund. And I'm offering this because in black lung and I think my friend from West Virginia, we have talked about this extensively, that recognizing that part of that cause of black lung was due to cigarette smoking in the mines, and so far the government has spent about $25 billion and the coal has spent about $34 billion in black lung. But the tobacco industry has not paid anything. We think that there's some responsibility there for benefits and medical expenses, and I think it's time that in this settlement presents an ideal situation to correct the inequity that we find there. If there's anybody else making comment on this, I think it's something that has to be taken care of. We've known we've had -- those trust funds have been severely depleted with regard to this disease. And I'd recognize my friend from West Virginia. SEN. JOHN D. ROCKEFELLER IV (D-W VA): Mr. Chairman, the reason I o think the amendment is important is that the -- only now about 3 or 4 percent of those ~ who apply for black lung disability actually get it. I don't think there's any question but ~ that if you work in the mines for 10 years, even if you don't smoke, you've got black lung. N w a 51

SEN. MCCAIN: -- I've got to recognize -- go back and forth on both sides. I would be glad, if it would be helpful to the senator from Kansas, we've put in report language exactly what this is. This is the sense of the committee, not the sense -- even though it says sense of the Senate, this is the sense of the committee that we should be addressing these issues once it gets to the floor. And the reason why I'm agreeable to it, because of the very strongly held views that members of the committee have on these issues. And we all know the reality. And I -- in all due respect to my friends who want to continue to debate this, the reality is that this money is going to be divided up not at this committee, it's going to be divided up when there are final negotiations between the White House and the leadership of both houses of Congress. So I'm not saying what we're doing is meaningless -- don't get me wrong. But I think we all know where the final negotiations are going to take place at the end of the day, as long as I'd like to -- as much as I perhaps might like to believe otherwise. SEN. BROWNBACK: If I could respond to that, there's a number who would just like to see it all go to Medicare. SEN. MCCAIN: I understand that. That will be decided on the floor of the Senate. That's a part of the budget agreement that we're going to do. SEN. BROWNBACK: Right. So that's why 1 don't see this as particularly a productive exercise for us to go through at this point in time, because it's such a heated issue and we just start tentatively down a road that a number of people are going to find very contentious. And I think we'd be better offjust not doing this now. SEN. MCCAIN: I thank you. Senator Breaux. SEN. : I guess the chairman wouldn't go for some flood control projects, would you? (Laughter.) SEN. BREAUX: How about some highways? How about some highways? (Laughter.) SEN. : Hey? SEN. : Just checking. SEN. FORD: I want to get in on that deal. 56

SEN. BREAUX: I think -- in fairness, I think that some of these -- I mean, I think the chairman is absolutely correct, this is going to be decided later. But having this committee which has done so much work, having an expression of the things that should be looked at, I think is going to be important in helping to guide other decision-makers later on. I think particularly the tobacco and asbestos trust which she has in this is important. And I think it's an expression of how this comnittee feels and no more but certainly no less than that. SEN. MCCAIN: Senator -- (inaudible) -- I'm soiry, could I ask Senator Snowe, the author of this proposal? SEN. SNOWE: Well, thank you, Mr. Chairman. I understand the concerns expressed by the senator from Kansas. But the point is this does not circumvent the budget resolution; in fact, it's very much consistent with it. In the event that anybody decides in Congress to propose exactly how this money will be used, it would require 60 votes. And we all recognize it's going to require 60 votes to pass this legislation. There's no other way to get that through. I think it should be done on a bipartisan basis. This legislation is unprecedented and therefore it's going to require bipartisan support. And I think it should when it comes to the use of this money. Furthermore, this committee is expressing the policy which I think should be the driver of this legislation, not the money that is generated as a result of this legislation. That will be considered, as the chairman said, another day. But I do think that we have a responsibility at least to indicate areas in which we think are important that are priorities for this Senate in terms of how the money might be used. But, again, it is going to require bipartisan support on the floor of the Senate. SEN. MCCAIN: Senator Bryan, did you want to? SEN. BRYAN: Senator Snowe made the point that I did, the 60-vote point of order. I intend to support the senator's sense of the Senate. SEN. MCCAIN: Thank you. Senator Gorton? SEN. GORTON: Well, Mr. Chairman, I believe that Senator Snowe's proposal is less harmful than more innocuous than the proposal that it succeeds. But I agree with Senator Brownback. I'd just add to that we're spending money somebody else earned. We're spending the attorneys general's money now. They are the ones who earned this. And until the people who brought the lawsuits and brought us here together get theirs, I don't think we have any business spending other people's money. If we end up passing some kind of additional tax over and above that, time and enough to agree how to spend it at the time we pass the tax. SEN. : Mr. Chairman? 57

agreeable, Senator Hutchison, because that's the intent of this amendment, and we don't want it to have an unintended consequence? Senator Ashcroft. SEN. ASHCROFT: It seems to me that the money that has -- the settlements that have been received here are designed to indemnify states for resources that they allocated through the legislative process. And this redirects that money back through the legislative process. I think that's a good idea. Now, I could understand an attorney general might like to have this pot of money to deal out without a legislature -- SEN. MCCAIN: Never would they seek such -- SEN. ASHCROFT: But my own view is -- and I've been attorney general and I've been in all these other chairs, unfortunately or fortunately as the case may be -- but I think this -- I asked the question because we were rolling through here faster than I could develop an understanding of this. But having looked at it, I think the senator from Texas merely says the legislature had to put up the funds in the first instance, and these are designed to indenmify the state for what the legislature put the funds up for -- let's let them do it again. SEN. MCCAIN: That's fine -- SEN. BRYAN: Mr. Chairman, 1 think what you are trying to do is very reasonable. This clearly makes this process subject to the appropriations process. In some states that may not be required -- I don't know. SEN. MCCAIN: I would ask, Senator Hutchison, if you would withdraw the amendment on the proviso that we work out report language which makes it clear the intent, which is to get what we all share, including Senator Ashcroft, that the state governors and legislatures, the elected officials, are able to dispense this money in the priorities that they see fit. Is that agreeable with the senator from Texas? SEN. HUTCHISON: Yes. I will work with what I think is everyone's concern here. But I do want to have something in the bill, and we'll work on it. SEN. MCCAIN: Thank you very much, Senator Hutchison. Now we turn to Senator Ashcroft for his -- oh, I'm sorry, Senator Snowe, we did your sense of the Senate resolution. We had a codifying advertising -- or was that already considered? That was already considered. So we'll move to Senator Ashcroft -- SEN. SNOWE: (Off mike)? SEN. MCCAIN: I don't want to try -- Senator Ashcroft, you are recognized for your amendment, Ashcroft number one, two, four I see at this point -- N O A N ~ ~ 0 w 65

issue, because everybody has a different priority, and we all know that. So please respond, and then I'll recognize Senator Inouye, and then we'll move forward. SEN. DORGAN: Mr. Chairman, I respect that, but I also know, and as do others here, that whatever table the leaders sit down at that we won't be at that time. This is our table and this is our morning, and I don't think we are prohibited from in developing a comprehensive tobacco bill from talking about where that money -- where the resources are going to be invested. SEN. MCCAIN: I understand. Thank you, Senator Dorgan. Senator Inouye? SEN. INOUYE: Thank you, Mr. Chairman. I believe the question before us is: Do we want as a conmiittee to report out a measure to the Senate for consideration by the full Senate? If that is the case, we will have to follow the lead of Senator Snowe, because otherwise I don't think we'll come out with a bill, because I for one, Mr. Chairman, will insist that our measure be taken up fully, debated, and voted upon. I don't think we have the time -- unless we are willing to forgo our recess and stay back here. Once we get on the floor, I am certain under your management we will be given the opportunity to bring up amendments. I've worked with you in the past, and I have been fully satisfied. So, Mr. Chairman, I am with you. SEN. MCCAIN: Thank you very much, Senator Inouye. The question is on the Snowe proposal, the sense of the Senate resolution. SEN. : Is there a recorded vote on this then? SEN. INOUYE: As amended. SEN. MCCAIN: As amended. And if a recorded vote is requested we will -- SEN. SNOWE: (?) A voice vote would be -- SEN. HOLLINGS: And child care development is included? SEN. MCCAIN: Yes, sir. SEN. SNOWE: Yes, it is. SEN. MCCAIN: Yes, it is. All of those in favor-- SEN. : And we've got roads in this too? SEN. MCCAIN: Two bridges but no river. (Laughter.) 60

SEN. ASHCROFT: I would like to bring up. SEN. MCCAIN: One, two, three and four. SEN. ASHCROFT: Mr. Chairman, I thank you. I'd like to have the opportunity to bring up Ashcroft number three in accordance with the list which has been made available. SEN. MCCAIN: The staff will distribute Ashcroft number three. Please proceed, Senator Ashcroft. SEN. ASHCROFT: This -- this settlement with the tobacco companies provides certain limitations on the responsibility of tobacco companies, and curtails the liability of these companies, and limits the amount that could be spent in any one year in terms of satisfying judgments of these -- that individuals have against these companies. The settlement or the proposal limits the amount thus that could be available for both compensatory and punitive damages. It basically says in order to protect this industry we will limit the amount of judgnients that can be paid out by the industry to a specific sum during the year. Now, I find it very strange that we are willing to protect this industry, the health consequences of which has been seriously documented, as impairing the health of Americans, in a framework in which we are very worried about young people starting to smoke, and yet we are not willing to protect those who provide healing in our culture. And the first amendment simply is this: it is that charitable organizations, people who are trying to do good, have some ability to be free from unlimited liability in relation to punitive damages in order to give them an opportunity to continue to exist and to do what they need to do in our culture. This amendment would establish a clear and convincing evidence standard for punitive damages. It would just say that charitable organizations -- there are caps on punitive damages -- and it would eliminate joint and severed liability for charitable organizations. It does not provide protections in certain instances of misconduct by volunteers or organizations. It seems to me that this committee should not go on record as providing immunity or limitation for the liability of the industries which have been manufacturing products -- knowingly manufacturing and marketing products which cause illness, and wallc away from the responsibility to provide some reasonable limitations for the charitable organizations which are designed to heal those illnesses and designed to help people pass those problems. It is with that in mind that I believe that if we are going to provide any kind of limitation to the liability of an industry that has this record of providing a product which is dangerous, we should provide to those who are seeking to mitigate those damages a modicum of limitation. And I would add that the limitation that is proposed here does not include any limitation on compensatory damages, which in fact are limited under the item that we are considering regarding the tobacco companies. 66

Similarly, with respect to the little children burning up in the flammable blankets, we got the Consumer Products Safety Commission, which has saved a lot of injury in a lot of cases. This particular tobacco initiative started with the trial lawyers and class action. And when they got the information in from behind the companies, that was more or less purloined, in a sense, they realized that they could get right in the middle of the trial of the case, and end up as themselves a defendant in a criminal case, maybe. They then came upon the idea of going to the attorneys general, who had the responsibility of bringing this information to the public score. And so it's recurred. And in that sense, having been there for that period of time, and watching the NIH and the American Cancer Society, and Dr. Koop and Dr. Kessler, and everybody else, trying, through the years, I can tell you right now with respect to saving people from cancer, I would say that the trial lawyers, Senator from Missouri, have saved more people with this particular initiative from cancer than Dr. Koop and Dr. Kessler put together. Let the record show that. And with respect to -- any time you want to talk about product liability, and volunteer organizations, I can see my friend Morris Dees down there, with the volunteer organizations in the South, the Ku Klux Klan and the neo-Nazi groups, and he sued them, and got punitive damages, and closed them down. And, if you want to get into this debate, it's a very enlightening debate, because this town is really in a sort of lynch mode, with respect to lawyers, and they don't realize the tremendous contribution made. And I have delighted, in my own profession, standing and protecting that record, and reminding the American public of how we get to some of these things. Now, the states have already ruled on all of these things. They have a provision for volunteer organization. I'm trying to agree with you, but I'm not going to pass up the opportunity, because I'm trying to change this mode, and get us back on track, and let's get back to the back, and move this bill. SEN. MCCAIN: Thank you very much, Senator Hollings. We have a vote on, and so, if there's any further debate or discussion of the amendment? If not -- SEN. ASHCROFT: I would be pleased to respond to the statements of the Senator. SEN. MCCALN: Okay. We have about seven minutes left in the vote, if-- SEN. ASHCROFT: I would inquire of the chairman what you propose, then. SEN. MCCAIN: I was going to propose that we adjourn until -- recess until 2:30 this afternoon, to continue the mark up. I would like to dispose of this amendment, since 68

something imposed on him that may not satisfy him. An so I would hope that we would say to the governors that we respect your position, we respect your ability to do what's right for your states and not have the Congress tell the governor what he has or has not to do, and I bet your governor won't like being told what to do. - SEN. MCCAIN: Senator Ford, what this does is it deprives the attorneys general of the ability to spend this money as they see fit, and provides for -- SEN. FORD: Well, but Mr. Chairman -- SEN. MCCAiN: -- the fact that the governor and the legislatures do have the decisions on this, which is appropriate. SEN. FORD: But, Mr. Chairman, as I understand it, ultimately the state is going to get some money. Ultimately the state is going to have Medicaid money. And ultimately that may be surplus, because it's money they've -- been returned. SEN. MCCAIN: Yes, Senator Ford. SEN. FORD: That makes a surplus in most all states, because you have a balanced budget amendment. You can't go in debt. SEN. MCCAIN: And this amendment simply provides for the governors and the state legislatures, which the attorneys general agree is appropriate to decide how those funds are spent. That's simply the intent. SEN. BRYAN: Mr. Chairman, I don't want to prolong this, but Attorney General Moore -- I am not sure he was -- SEN. MCCAIN: No, he was in support -- he was in support. SEN. BRYAN: He is in support of this? SEN. BREAUX: Mr. Chairman? SEN. MCCAIN: Yes, sir. Senator Wyden is next. SEN. BREAUX: I'd like to aslc a question. I would just like to ask a question -- maybe staff could listen to what I am getting ready to ask. If I could have the attention of the staff -- (whistles) -- hello? Hello? (Laughter.) SEN. MCCAIN: Lance, pay attention to Senator Breaux. SEN. BREAUX: I don't really understand it. It says in the event the funds go to the state the funds shall be subject to appropriations as determined by state law. I mean, 63

I know that there's many other amendments, and we're taking it up. If that would be agreeable to the Senator from Missouri. SEN. ASHCROFT: That's agreeable to me. SEN. MCCAIN: Thank you. SEN. ASHCROFT: If I might just -- SEN. MCCAIN: Please, Senator, you should recognize. SEN. HOLLINGS: Go ahead. SEN. ASHCROFT: Remarks have been made regarding the rights of states, and regarding the rights of localities. The truth of the matter is this represents 40 states, and with the litigation which was filed, it's not been filed in ten other states. And many local governments are not parties to this, and yet we seek to conclude their rights absent their participation. So the suggestion that the amendment that's offered by the Senator from Missouri would be an undue imposition, perhaps ought to include also the fact that this entire event is an imposition on a number of jurisdictions that haven't previously been participants. Second, this is an imposition, inasmuch as it limits damages. And it not only limits punitive damages, it limits compensatory damages. It limits the ability of individuals to move forward, to collect compensation. And it maintains an industry for purpose -- because -- with a willingness to do that, because there is a substantial offering of resource to the government, some argument of which has already been engaged in today, about where it should be directed. Myjudgment is simply this. I think it is a related issue. If we're willing to do for one industry, an industry whose record is a record now confessed by the industry to be a record of ill health and damage, and we're willing to provide speciall protection for that industry, it seems to me that for this committee to close its eyes to the opportunity to provide protection to charitable organizations and those who would seek to heal, instead of to hurt, is for us to -- is to operate in response to the big carrot that's in this legislation, a carrot of hundreds of billions of dollars. I think we ought to operate based on principle, and if limitation of liability is appropriate for the tobacco industry, which has been an industry of ill health and death by their own confession, I think it ought to be an appropriate area of inquiry for us, regarding those charitable organizations that seek to curtail the adverse impacts of this industry. SEN. MCCAIN: All those in favor of the amendment, signify it by saying "Aye." 69

SEN. HUTCHISON: All right. This just ensures that if funds are distributed -- SEN. MCCAIN: Could staff distribute the Hutchison amendment, number two? SEN. HUTCHISON: If funds are distributed to the states by this act, that they are expended in accordance with state law. SEN. MCCAIN: It looks pretty straightforward to me. Is there further debate or discussion of the Hutchison amendment? If not, those in favor say aye. (Ayes.) Pardon me -- Senator Ashcroft is recognized. SEN. ASHCROFT: This would resolve any conflicts between federal and state law in favor of state laws by operation of this statute? Is that the case? SEN. HUTCHISON: Well, this is -- SEN. MCCAIN: Ask the author of the amendment. SEN. HUTCHISON: This is just saying what happened in Texas as that the attorney general purported to spend the money and bypass the legislature. And I just want to make sure that if there are grants to the states that the states -- the state laws are -- SEN. MCCAIN: Legislatures make the decisions as to how the money is spent. SEN. HUTCHISON: And the state laws are respected. SEN. ASHCROFT: But, Mr. Chairman, with all due respect, why is the Congress making that determination? In other words, I don't know the nature of the dispute between the attorney general and the state legislature, but presumably that should be resolved by Texans, not by all of us in Congress as to how that dispute -- as I say, I don't know the merits, but -- SEN. MCCAIN: Could I intemtptjust for a second? The attorneys general I think are in agreement with this amendment -- is that true? So they're fine with this. SEN. ASHCROFT: (?) They're in favor of it. (Laughter.) So Ijust want to make sure you want the Congress -- SEN. MCCAIN: Don't look at Moore -- look at the other ones. (Laughter.) He wants to spend the money. SEN. FORD: Mr. Chairman? Mr. Chairman, Senator Bryan and I have been there and we have done that. And what you are doing here now is telling a governor what he can or cannot do. And the attorneys general want to work with the governor, not have N O O ~ m ~ ~ 0 0 62

maybe some states let the attorney general do it. Maybe some states have a different -- the state law would govern -- I don't know why we need this. I mean, if a state allows an attorney general to spend it under his jurisdiction -- SEN. MCCAIN: Attorney General Moore -- maybe Attorney General Moore can help us out here. ATTY. GEN. MOORE: The only thing I want to make sure is -- SEN. BREAUX: Is this the thinker or is this the speaker? (Laughter.) ATTY. GEN. MOORE: I'm going to have to think now. Is it okay? The only thing I would say is that if you would change the wording it shouldn't supersede the authority of the state. I mean, whatever the state law is in a state, it's the legislature or the governor, whoever it is -- let's just don't supersede. SEN. : But then it would be unnecessary. ATTY. GEN. MOORE: I understand it's unnecessary, but -- SEN. : Mr. Chairman? SEN. MCCAIN: If it's viewed as being unnecessary, fine. I think this is really a small point here. But, Senator Hutchison would you be -- since everybody says it's unnecessary, would you be willing to withdraw the amendment? Two former governors seem to have their backs up against this one, so -- SEN. : How about four? SEN. MCCAIN: Excuse me, four former governors -- all former governors have their -- SEN. : (Off mike)? SEN. MCCAIN: And we'll put something in the report that clarifies the language. SEN. HUTCHISON: The former governor who asked the question believes that it is a good amendment. If you want to have some language that protects states, I'm willing to work on it. I just want to make sure that we don't have some bypass of the states. SEN. MCCAIN: Before we move to counsel, could we work together in report language to make it clear that the intention is that it is in no way an infringement on the authority or t he responsibilities of the governors and the legislatures? Would that be ~ 0 o~ ~ ~ m 0 N 64

SEN. DORGAN: Senator Breaux is still talking flood control over here. (Laughter.) Mr. Chairman, I am a little troubled by this approach, because I think the heartbeat of this bill is the direction -- the use of the resources. I mean, the engine I suppose are the resources we develop from this bill. And the steering wheel is where we direct those resources to be used. One of the reasons we're all at this table is we all believe that we want to try to shut down the attempt to addict teens in this country to smoke. We want to have smoking cessation programs and a whole range of things. I have an amendment dealing with NIH, which I had intended to offer in a later title, but still like to do that. I reference it actually to the place in the legislation right at the end of the bill where the chairman's mark has a sense of the Senate dealing with spending. But I guess I am a little troubled saying, well, let's just have a sense of the Senate and we'll let someone else cut the pie here. At least a fair piece of that cut ought to go to NIH in my judgment. I want -- I came here today hoping -- and I will offer an amendment dealing with NIH and making the money real. I might say at the end of this that I am also troubled by what Senator Snowe suggested and others have -- we have a budget deal on the floor that says none of this money that comes from this settlement -- none of this money, not a penny of this money -- shall be used for the center of what we have been talking about -- it must be used for Medicare. So anyone that wants to do anything other than that is going to have to meet a 60-vote test to waive the rules on the floor of the Senate, which I think is absurd. I am going to offer an amendment to strike that provision in the budget bill today or tomorrow. But I just -- I say that I think we should really address the issue of spending -- not in a sense of the Senate, the but we ought to just address it -- what portion do we want to go to the NIH, what portion do we want to go to other functions that we think are important relevant to tobacco settlement issues? SEN. MCCAIN: Let me just first agree with Senator Dorgan. We cannot -- and we are about to do what I feared, and that is veer off from our job, which is to do what we can to pass legislation which will stop kids from smoking. Now, NIH is important, black lung is important, veterans are important, flood control projects are important -- (laughter). But the fact is our job is to craft the legislation to stop kids from smoking. We all know -- and I repeat again: The spending issue is going to be a huge fight where the White House is going to be at the table, the speaker of the House, the majority leader and the Democrat leader in the Senate. And it's going to be a very lough negotiation that goes on. Our job is not to speak for the entire Senate. But I believe we can speak for the committee in a sense of the Senate fashion that I think is appropriate. Now, I would like to -- I think we have pretty well discussed this issue, and I would like to move on after discussing -- after allowing Senator Inouye -- after recognizing Senator Inouye. But I really fear that we could spend all day on the spending 59

SEN. MCCAIN: Thank you very much, Senator Ashcroft. I don't think there is any disagreement that this is an important issue. Unfortunately it's way outside the scope of this legislation. It has no relevance to it in my view. And if we open up this Pandora's box, as frankly with the other Ashcroft amendments, we will never reach a successful conclusion to this issue. I am in complete sympathy with everything that the senator from Missouri stated, and we -- that's why we work so hard on volunteer protections on the floor of the Senate, and I totally agree with him. The fact is we open up this one, and school's out. Now, I a n sure that's not the intent of the amendment -- I would never, ever think that the senator from Missouri would want to have that be the occurrence. But I am sure from being involved in intense negotiations for four weeks on this issue that this would bust the whole thing wide open, and it's the subj ect of another day. I would remind Senator Ashcroft that the majority leader has committed to bring product liability to the floor of the Senate this year to begin. It may not succeed. it may be vetoed by the president of the United States. But this is a perfect -- that's a perfect vehicle for that, as well as biomaterials which happens to be a bill that Senator Lieberman and I are the sponsors of. So I appreciate the senator from Missouri's motivation and I appreciate his goal. But it's simply -- there are a whole lot of things that we would like to fix in our society, and if we do this then obviously we will not be -- we will be diverted _ from our goal of trying to stop kids smoking, because this doesn't have anything to do with kids smoking. SEN. HOLLINGS: Mr. Chairman? SEN. MCCAIN: Senator Hollings. SEN. HOLLINGS: You're right on target. There isn't question that they've used every maneuver in the world to try to take over the states. This contract crowd came to town and said, Let's put it back all to the states except where the states have had tort reform. Over 48 of the 50 states have had tort reform, including the state of Missouri. But it's a lawyer-bashing thing. So let me get right to the point with respect to this particular tobacco settlement. I tip my hat to the attorneys general. They're brilliant, they've been persistent -- particularly the attorneys general of Mississippi and Washington. However, let's not disregard the contribution of that trial lawyer. Right to the point, what you have in a profession is the highest calling of all, and that is to more or less abolish yourself in a sense if the ministers could get rid of all the sin and the doctors disease, the lawyers have a high calling of trying to get rid of injury in cases. And in my 31 years I have watched us on this particular committee take the - leadership with the trial lawyers with respect to the Love Canal cases up in the Northeast, and we put in the Environmental Protection Agency. That saved a lot of injury in a lot of cases. ~ 0 m ~ ~ ~ v 0 cn 67