[Federal Register Volume 61, Number 13 (Friday, January 19, 1996)]
[Rules and Regulations]
[Pages 1492-1509]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-467]
[[Page 1491]]
_______________________________________________________________________
Part IV
Department of Health and Human Services
_______________________________________________________________________
45 CFR Part 96
Tobacco Regulation for Substance Abuse Prevention and Treatment Block
Grants; Final Rule
Federal Register / Vol. 61, No. 13 / Friday, January 19, 1996 / Rules
and Regulations
[[Page 1492]]
DEPARTMENT OF HEALTH AND HUMAN SERVICES
45 CFR Part 96
RIN 0930-AA01
Tobacco Regulation for Substance Abuse Prevention and Treatment
Block Grants
AGENCY: Substance Abuse and Mental Health Services Administration, HHS.
ACTION: Final rule.
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SUMMARY: On August 26, 1993, the Department of Health and Human
Services (HHS) published a Notice of Proposed Rulemaking (NPRM) to
implement section 1926 of the Public Health Service (PHS) Act regarding
the sale and distribution of tobacco products to individuals under the
age of 18. The Secretary requested comments on the NPRM and gave 60
days for individuals to submit their written comments to the
Department. The Secretary has considered the comments received during
the open comment period and is issuing the final regulation in light of
those comments.
EFFECTIVE DATE: February 20, 1996.
FOR FURTHER INFORMATION CONTACT: Prakash L. Grover, Acting Director,
Division of State Prevention Systems, Center for Substance Abuse
Prevention (CSAP), Rockwall II Building, 9th Floor, 5600 Fishers Lane,
Rockville, MD 20857, telephone (301) 443-7942.
SUPPLEMENTARY INFORMATION: The Department is finalizing the rule
entitled ``Substance Abuse Prevention and Treatment Block Grants: Sale
or Distribution of Tobacco Products to Individuals Under 18 Years of
Age,'' which was published as a NPRM in the Federal Register on August
26, 1993 (58 FR 55156). The final rule is developed in accordance with
section 1926 of the PHS Act, 42 U.S.C. 300x-26, as amended.
Relationship to proposed Food and Drug Regulations Restricting the Sale
and Distribution of Tobacco Products
On August 10, 1995, President Clinton announced the issuance of
proposed ``Regulations Restricting the Sale and Distribution of
Cigarettes and Smokeless Tobacco Products to Protect Children and
Adolescents'' by the Food and Drug Administration (FDA) (60 FR 41314,
Aug. 11, 1995). If promulgated, these regulations would restrict
minors' access to nicotine-containing tobacco products and would reduce
the amount of positive imagery that makes these products attractive to
young people. The basis for FDA's tentative conclusion establishing its
jurisdiction over these tobacco products is set forth in the FDA NPRM's
accompanying proposed jurisdictional analysis. (Federal Register,
Volume 60, No. 155, page 41453, August 11, 1995).
The final rule being issued today will complement and be consistent
with any rule that FDA promulgates, when and if FDA does so. While this
final rule is directed to the States and the FDA proposal focuses on
the tobacco industry and retailers, they are both designed to help
address the serious public health problem caused by young people's use
of and addiction to nicotine-containing tobacco products. By
approaching this public health problem from different perspectives,
these actions together would help achieve the President's goal of
reducing the number of young people who use tobacco products.
The regulatory approaches reflect major differences in the
statutory authorities of the respective agencies. In addition to
requiring States to have in effect laws which prohibit the sale of
tobacco products to minors as a condition of receipt of a grant, this
rule requires that States enforce such laws, and meet certain
negotiated rates of compliance so as not to suffer a reduction in block
grant allotments as prescribed by law. On the other hand, the FDA
proposal addresses the conduct of tobacco manufacturers, distributors,
and retailers. The FDA proposal seeks to reduce young people's use of
tobacco by placing certain restrictions on the sale, distribution,
advertising, and promotion of tobacco products to minors. Thus, these
two regulatory actions both address the need to reduce minors' access
to tobacco products, and the FDA proposal further attempts, through its
advertising provisions, to reduce the powerful appeal of tobacco
products to children and adolescents.
Background on the Notice of Proposed Rulemaking and Summary of
Responses to Public Comment
A. Notice of Proposed Rulemaking
The NPRM proposed regulations to implement section 1926 of the PHS
Act. Section 1926 provides that ``the Secretary may not make a
[Substance Abuse Prevention and Treatment block] grant to a State for
the first applicable fiscal year and all subsequent fiscal years unless
the State has in effect a law prohibiting any manufacturer, retailer or
distributor of tobacco products from selling or distributing such
products to any individual under the age of 18.'' According to section
1926(a)(2), States are to have such laws in place for receipt of FY
1994 Substance Abuse Prevention and Treatment (SAPT) Block Grant funds
unless a State's legislature does not convene a regular session in FY
1993 or 1994, in which case a State must have such a law in place for
receipt of FY 1995 funds. The Secretary proposed to implement this
statutory provision by requiring States to have in place a law that
prohibits the sale or distribution of any tobacco product to
individuals under the age of 18 (minors) through any sales or
distribution outlet. This would include sales or distribution from any
location which sells at retail or otherwise distributes tobacco
products to consumers, including locations that sell such products
over-the-counter or through vending machines. Beyond this, the
Secretary did not propose specifying the provisions of the States'
laws.
Section 1926(b) of the PHS Act requires States, as a condition of
receipt of a grant, to enforce such laws ``in a manner that can
reasonably be expected to reduce the extent to which tobacco products
are available to individuals under the age of 18.'' In enforcing such
laws, section 1926(b)(2)(A) requires the States to conduct random,
unannounced inspections. The NPRM proposed a regulation to require
States to have ``well-designed procedures'' in place for reducing the
likelihood or prevalence of violations. Examples of such procedures
were provided in the regulation. The Secretary also proposed that the
State, at a minimum, enforce the law using both random and targeted
unannounced inspections of both over-the-counter and vending machine
outlets. It was proposed that the random, unannounced inspections be
conducted annually and be conducted in such a way as to ensure a
scientifically sound estimate of the success of enforcement actions
being taken throughout the State.
Section 1926(b)(2)(B) of the PHS Act requires the States to
annually submit to the Secretary a report describing the strategies and
activities carried out by the State to enforce such law during the
fiscal year for which the State is seeking the grant, and the extent of
success the State has achieved in reducing the availability of tobacco
products to minors. The NPRM essentially requested this information. As
part of such information, the NPRM proposed, among other things, to
require States to report on the results of the unannounced inspections
and to provide a detailed description of how the unannounced
inspections were conducted and the methods used to identify outlets to
be inspected.
[[Page 1493]]
Section 1926(c) of the PHS Act requires the Secretary to determine
whether the State has maintained compliance with the enforcement
requirements of the statute. If the Secretary determines that a State
has not maintained such compliance, the Secretary is required to
decrease the Block Grant from 10 to 40 percent depending on the fiscal
year involved. In determining enforcement compliance, the Secretary
proposed the following: the State must demonstrate that its random,
unannounced inspections were conducted in a scientifically sound manner
and the data submitted by the State in the annual report must show that
the percentage of the retailers or distributors involved in the random,
unannounced inspections making illegal sales does not exceed 50 percent
during the first applicable fiscal year, 40 percent in the second
applicable fiscal year, 30 percent in the third applicable fiscal year
and 20 percent in the fourth applicable fiscal year and subsequent
fiscal years. If a State does not maintain material compliance with the
above-mentioned criteria, the Secretary, in extraordinary
circumstances, may consider a number of other factors such as a
scientifically sound survey indicating that the State is making
significant progress toward reducing use of tobacco products by minors.
B. Public Comment and Department's Response
During the 60-day comment period that ended on October 26, 1993,
the Department received 354 letters providing comments on the NPRM.
These comments spanned a wide range of concerns and issues. They
presented a complex mix of support for and opposition to the
Department's proposal. The preamble sections below summarize these
views and provide the Department's responses to them.
General Comments
Numerous commenters, including State agencies, State legislators
and Governors, claimed the NPRM was redundant and unnecessary. They
argued that States currently have laws in place that prohibit the sale
of tobacco to minors, and they felt the Department was forcing the
States to create redundant laws.
This regulation does not require redundant or duplicate laws at the
State level; rather it requires that States have in effect a law
providing that it is unlawful for any manufacturer, retailer or
distributor to sell or distribute tobacco products to individuals under
the age of 18. In the event that a State does not have such a law in
place, one is required if the State wishes to receive an SAPT Block
Grant. At the time of passage of section 1926 of the PHS Act, the
majority of States had laws in place that complied with the requirement
of section 1926(a).
Many commenters raised concerns about the short timeframe within
which the regulation was to be implemented. These concerns primarily
centered on the time it would take to develop an inspection sampling
frame and to design and conduct inspections. The Department recognizes
the difficulties States may face in complying with these requirements
and enforcing their laws sufficiently to reduce the extent to which
tobacco products are available to individuals under the age of 18, as
required by section 1926. As discussed later in this preamble, States
will be provided time to develop an effective inspection system.
Some commenters argued that the Department was not allowing
retailers and States time to demonstrate the success of industry or
other State programs designed to restrict youth access. The Department
notes that the statute specifically requires that, for most States,
enforcement of their laws must occur in FY 1994 and that States must
enforce their laws in a manner that can reasonably be expected to
reduce the extent to which tobacco products are available to minors.
Section 1926 also requires States to conduct random, unannounced
inspections. The Department cannot, therefore, delay the implementation
of these statutory provisions.
Several commenters argued that the Department should place
responsibility on minors for complying with this law rather than
targeting retailers with such responsibility. Other commenters took the
opposing view and cautioned against requiring penalties against minors
for purchasing tobacco products.
The statute does not give the authority to the Department to
require laws prohibiting the purchase of tobacco products by minors nor
to regulate the conduct of retailers. However, States are required
under section 1922 of the PHS Act to develop primary prevention
activities to reduce tobacco use by minors in keeping with 45 CFR
96.125. The Preventive Health and Health Services Block Grant, sections
1901, et seq., of the PHS Act, administered by the Centers for Disease
Control and Prevention (CDC) also provides assistance to States to
implement strategies to prevent tobacco use among all populations,
including minors. These prevention strategies targeted to minors will
serve to reinforce the enforcement strategies required by section 1926.
Definitions
A number of commenters believed that, by specifically including
vending machines in the definition of a retail outlet and by requiring
a separate reporting requirement, the Department was proposing more
stringent enforcement requirements on outlets than are required by the
law. In addition, many commenters from State agencies argued that most
States do not have legislation in place with regard to controls on
vending machines and, therefore, that they would have difficulty
complying with the regulation if it included vending machines as a type
of outlet.
The Department defines ``outlet'' as ``any location which sells at
retail or otherwise distributes tobacco products to consumers including
(but not limited to) locations that sell such products over-the-counter
or through vending machines.'' The Department is requiring States to
have laws in place during the first applicable fiscal year which make
it illegal for a manufacturer, retailer, or distributor of tobacco
products to sell or distribute any such products to an individual under
the age of 18 through any sales or distribution outlet, including over-
the-counter and vending machine sales. The Department believes that
this construction of section 1926 of the PHS Act, i.e., covering
vending machines, reasonably carries out the intent of Congress, and
the Department believes that, if only over-the-counter sales were
prohibited, minors would purchase tobacco products from vending
machines as access to over-the-counter tobacco products becomes more
difficult.
With respect to timing, we point out that States have now had
several years since enactment of section 1926 and publication of our
proposed rule, to pass necessary legislation and to take other steps to
begin effective enforcement of their laws against sale and distribution
to minors.
Random Unannounced Inspections
Many commenters suggested that the Department require States to use
``sting'' operations, in which minors would attempt to purchase tobacco
products, either over-the-counter or from a vending machine, as the
most efficient and effective method of carrying out such inspections.
The NPRM gave the States flexibility in implementing the requirement
for random, unannounced inspections, and it did not require ``stings.''
The Department sees no reason at this time to change that policy. While
[[Page 1494]]
there is considerable literature supporting the use of ``stings'' as an
efficient and effective method of carrying out such inspections, there
is no conclusive research to suggest that it is the only viable method
that could be developed. Furthermore, the Department strongly supports
giving States flexibility in devising methods to use in enforcing their
laws.
However, the Department wants States to know that it does not know
of any other valid alternative methods. Despite the NPRM's request for
suggestions for alternative methods, and the many comments received
opposing the use of ``stings,'' the Department has not identified
evidence of any other workable or valid method of random, unannounced
inspections for determining illegal sales. Moreover, the regulation's
compliance level is based on the ``sting'' methodology, and the
Department would need an empirical basis for converting results from
one enforcement method to another to assess compliance.
In the light of these issues, the Department considered a range of
options to protect both the States and the integrity of the program,
including modifying the regulation to provide for formal approval by
HHS of any alternative method. Another option would have been to
specify in some detail either the methodology the Department would find
acceptable or to define such terms as ``unannounced.'' Ultimately, the
Department decided to leave the matter open and flexible, relying on
the good judgment of State officials. The Department does, however,
strongly urge any State that contemplates using an alternative method
to work with the Department in advance of implementation to show that
the method validly measures compliance through random, unannounced
inspections, and to ensure that the inspection approach will produce
the data necessary to determine that the State meets the compliance
target.
Another large group of commenters opposed the use of minors in
conducting compliance inspections because they feared that inspectors
would attempt to entrap retailers by inspecting at busy times during
the day, by attempting to purchase when the seller is distracted, by
pressuring the seller, or by using individuals as decoys who do not
look like minors. A number of commenters expressed concern that a child
may not be sufficiently mature to understand undercover procedures and
inadvertently entrap a retailer.
The Department is aware that entrapment may be a potential problem
for retailers. Since the implementation of random, unannounced
inspections is a State responsibility that is required by statute for
receipt of an SAPT Block Grant, the Department expects States, if they
choose to have minors participate in inspections, to develop procedures
to address (and thereby avoid) these concerns and to educate officials
regarding permissible and impermissible activities.
Many commenters argued that using minors in inspections could have
a detrimental impact on minors participating in such operations (e.g.,
danger, exploitation). Among the fears expressed was the possibility of
repercussions, in the event that the minor is discovered in his/her
undercover role. Additionally, these commenters believed that
undercover work is inherently dangerous and only to be undertaken by
trained law enforcement officers. It was also feared that a child would
be asked to take the witness stand and have to undergo cross
examination.
The Department believes that the use of minors in inspections is
very effective in gathering data and believes these inspections will
show that proper training and adult supervision can reduce any
potential risk of negative consequences toward youth. The Department
does, however, expect States to provide all of the necessary
precautions to safeguard the youth participants.
Commenters who favored requiring inspections involving the use of
minors suggested the following guidelines: (a) minors should be
supervised by adults, (b) minors should not be used in outlets they
frequent or in their neighborhood so they may not be confronted later,
(c) minors should not be involved in any confrontation with the
retailer and, therefore, such confrontation should be made after the
youth has left the store, and (d) minors should be 2-3 years younger in
age and appearance than the legal age for purchase of tobacco products.
Many commenters also suggested that minors be supervised by the State
or an organization under contract to the State and that they be granted
immunity from any State prohibition on the purchase of tobacco by
minors.
Following publication of this rule, the Center for Substance Abuse
Prevention (CSAP) will provide to States technical assistance and
further guidance on state-of-the-art inspection processes, including
guidelines, training and technical assistance, on which CSAP and CDC
are collaborating. Comments on the NPRM are being considered in the
development of these guidelines, training and technical assistance.
Several commenters urged the Department to make the inspection
requirements more stringent. The Department believes that the
inspection requirement as stated is sufficiently stringent to achieve
the goals of section 1926 without imposing an undue burden on the
States. Variations among States dictate the need for some flexibility
in the design and conduct of the random, unannounced inspections.
A few of the Single State Agencies for alcohol and other drug (AOD)
abuse prevention and treatment (SSAs) and some alcohol and other drug
abuse providers that commented on the NPRM believed their involvement
with the tobacco enforcement tasks of the law would hurt their position
with the very citizens they aim to serve. They believed that clients
would fear or avoid accessing services, because the providers would
also be enforcing the laws.
First, it should be noted that section 1926 does not require that
the inspections be performed by the SSAs or by the providers they
contract with to provide AOD services. The required inspections may
well be carried out by, or under the direction of, other agencies of
State government. Moreover, even if SSAs do enforce the provision, the
Department does not believe that they will drive away their target
population or client base by implementing random, unannounced
inspections. These inspections are not directed at individuals who
purchase the tobacco products, rather at those who sell or distribute
the products to youth. Neither the required law nor this regulation
requires penalties against an individual for violating tobacco access
laws. The Department feels that a client's perception of risk or fear
of reprisal will be negligible and that AOD prevention and treatment
providers will not be negatively impacted.
Comments were also received regarding the use of private entities
performing inspections. The issue of State responsibility and
accountability was raised regarding inspections conducted by private
entities. Opponents raised concerns about ``vigilantism,'' since they
believed that such inspections would be motivated by an anti-tobacco
agenda and would be subjected to no formal accountability requirements.
Supporters of the use of private entities to inspect outlets viewed
such inspections as an assurance that individual citizens have the
right to independently evaluate the State's progress. They argued that
the public has the right to be involved in
[[Page 1495]]
inspections and feared any limitation on that right.
The Department does not require or prohibit the use of independent
contractors or other type of organization to perform inspections of
outlets for the State. It is the States' responsibility to demonstrate
to the Department that random, unannounced inspections have been
conducted in a fair, consistent, unbiased, planned manner that will
provide useful data on the sale or distribution of tobacco products to
minors.
Commenters offered numerous recommendations on alternate strategies
for inspecting outlets. One commenter suggested using ``random
inspections'' for scientific measures, ``routine inspections'' for
compliance checks, and ``targeted inspections'' for enforcement of
previous violators. Other recommendations included routine, pre-
announced inspections and the inspection of outlet-sponsored ``give-a-
way'' programs, as already specified by the NPRM.
While the Department believes that these suggested strategies are
helpful, in the interest of providing States with appropriate
flexibility, the Department will not prescribe how random, unannounced
inspections are to be performed. Such approaches have been noted and
may be included in further guidelines and training provided by the
Department to inform States on all the options available to them in
effectively carrying out these requirements.
Commenters argued that the targeted inspections required in the
proposed regulation imply States' knowledge of prior violations and
that such information does not currently exist and cannot be tested for
in the first year. Others argued that targeted inspections exceed the
intent of the law. Still others argued that targeted inspections should
be required.
The Department has reviewed the proposed requirement for
inspections targeted at outlets with previous violations. The
Department believes that each State should have the flexibility to
enforce its laws in a manner that can reasonably be expected to reduce
availability of tobacco products to minors in light of that State's own
unique circumstances. Therefore, we are not requiring that States
conduct targeted inspections. States are reminded, however, that
targeted inspections are an appropriate method of controlling youth
access to tobacco products and may be considered by the Secretary in
making a determination when a State is not found to be in substantial
compliance with the State's negotiated inspection failure rate, which
is discussed in more detail below.
Other Well-Designed Procedures
Many commenters argued that the proposed requirement for ``other
well-designed procedures'' was excessive. Many commenters perceived the
NPRM's requirement for ``other, well-designed procedures'' as forcing
States to enact additional laws as a condition of funding, and thus
exceeding the scope of the statute, congressional intent and
Departmental discretion under the statute. Commenters further stated
that existing laws and procedures are sufficient and that this
requirement would necessitate new legislation that would interfere or
conflict with existing laws.
Commenters representing SSAs claimed they would not be able to
initiate ``other well-designed procedures'' in time to adequately
comply with the regulation, especially since State legislatures meet
briefly, or not at all, this year. Examples of procedures considered
problematic and time-consuming to implement include licensing, controls
on vending machines, and excise taxes. They believed that each of these
procedures is a highly charged political issue and not easily passed
legislatively. Some States argued that, given their need to enact
enforcement legislation and the strength of the tobacco industry's
opposition to such initiatives, they would need to receive an extension
from the Department for compliance.
Many other commenters requested that the final rule mandate
specific procedures (suggested strategies and examples found in the
Preamble and the Model Law that was appended to it) rather than allow
the flexibility provided in the NPRM. They stressed the need for a more
stringent approach to the requirement and recommended that a wide range
of mandates be included in the regulation, such as:
1. A tobacco sales or distribution licensing system;
2. A graduated schedule of penalties for violations;
3. A ban on vending machines;
4. Elimination of all vending machines in locations where minors
have access; and
5. An updated version of the Model Law.
The Department has been persuaded by public comment to allow the
States flexibility to determine which strategies are most appropriate
for meeting the compliance target and enforcement requirements of the
law and the regulation. To require ``other well-designed procedures''
at this time could, we believe, create unnecessary legislative
obstacles for States, making it more difficult , not less, to achieve
the goal of reducing the use of tobacco by youth. It would be
counterproductive to the goal of increasing State enforcement
activities if the final regulation were to require States to take
additional legislative action to strengthen State tobacco control laws.
We continue to believe that the adoption of ``other well designed
procedures'' would enhance the effectiveness of State programs to
curtail youth access to tobacco. However, during the initial phase of
implementing this statute, State enforcement efforts will be more
effective if States can devote time to the development of effective
enforcement mechanisms without the additional burden of seeking
legislative changes in State law. Therefore, the Department has
eliminated the requirement of ``other well-designed procedures'' from
the final rule.
The Department notes that the FDA's proposed regulations include
several of the ``other well-designed procedures'' suggested in the
preamble of the NPRM for this rule as well as other restrictions
suggested by commenters (e.g., the elimination of vending machine sales
and the prohibition of the sale of single cigarettes). The FDA proposal
would not be directed toward affecting State laws. Rather, FDA proposes
to affect the conduct of manufactures, distributors and retailers of
tobacco products, a potentially effective and important means of
reducing the numbers of children and adolescents who use and become
addicted to tobacco products.
States should also be aware that, as part of each SAPT application,
they are required to report what they have done to enforce the law
during the previous fiscal year and what they intend to do during the
fiscal year for which they are applying for funds. As discussed later,
the Secretary may, in extraordinary circumstances, consider a number of
factors other than the results of the random, unannounced inspections
in determining compliance. One factor to be considered is the extent of
the activities the State is carrying out in enforcing the law.
Certainly, the suggestions in the preamble for the NPRM and the
recommendations offered by commenters on the NPRM are viable ways that
the States can enforce the provision.
States are reminded, however, that the Governor must assure the
Department that the State will enforce its statute in a manner that
will reasonably reduce the availability of tobacco products to minors.
If a State fails to meet the negotiated compliance target as outlined
[[Page 1496]]
in this regulation and discussed below, the Department may seek
additional information from such State before the Department will award
the State a Block Grant. This information must be sufficient to provide
reasonable assurance to the Department that the State will enforce its
law, consistent with section 1926 of the PHS Act and the regulations.
Many comments focused attention on specific procedures that a State
might implement and which were perceived by many as required. First,
numerous commenters opposed the use of a licensing system for
retailers. Some commenters opposed the NPRM's example of State
licensing fees as a method of paying for the enforcement of this
regulation, arguing that fees will hurt profits and lead to a loss of
jobs. Commenters feared the regulatory nature of a licensing system, as
States would be able to threaten retailers with suspension or
revocation of their licenses for illegal sales of tobacco products by
their employees. The licensing power, it is argued, could also be used
to prohibit sales clerks under the age of 18 from handling tobacco
products. Commenters also feared that a licensing system would allow
regulators to pursue a broad anti-tobacco agenda. Finally, commenters
believed that retailers would not be able to design and implement
programs to comply with State and Federal substance abuse laws. Thus,
they argued, a new, complex licensing program is not needed in order to
limit the sale of tobacco products to minors. In contrast, many other
commenters supported a licensing mechanism for the sale of tobacco.
Some recommended a system with a graduated schedule of penalties for
illegal sales, culminating in the loss of license.
The proposed regulation and Model Law explained how a licensing
system could be used to enforce the States' laws effectively, with
licensure fees and civil penalties funding both the random, unannounced
inspections and other administrative costs. The Department did not,
however, require a licensing system in the NPRM, and is not requiring
one in the final rule. The Department believes, however, that a
licensing system offers States an efficient method of identifying the
total population of outlets for inspections and enforcement and that
licensure fees can be a source of funds to pay for enforcement
activities.
A small number of commenters recommended that the Department
require either the elimination of tobacco vending machines or the
elimination of vending machines in areas to which minors have access.
They opposed the use of locking devices on vending machines because
they believed such devices are ineffective. Other commenters supported
using locking devices.
Bans and restrictions on vending machines and locking devices are
viable options for States to consider in reducing tobacco sales to
minors, but again, under this regulation the Department intends to
allow States flexibility in the strategies they use to enforce tobacco
control laws.
Several commenters opposed the Department's suggestion that States
publish the names of, and boycott, outlets that have sold tobacco to
individuals under the age of 18. They believed this is outside of the
Department's authority and that such a suggestion should be removed
from the regulation. Commenters argued that boycotts do not take into
account attempts made by individual retailers to comply with the law.
The regulation does not require that States publicize the names or
boycott outlets violating the law. However, studies have shown that
these approaches can be effective in reducing violations (e.g.,
Turrisi, R.; Jaccard, J.; ``Cognitive and Attitudinal Factors in the
Analysis of Alternatives to Drunk Driving,'' Journal of Studies on
Alcohol 53(5) p. 405-414, 1992) and, therefore, are options a State may
want to consider.
A number of commenters requested the elimination of the ``Model
Law'' from the NPRM, arguing that, since the NPRM is a Federal document
that ties compliance to funding, examples and suggestions were viewed
as legal demands. Topics in the Model Law that received considerable
comment included registration/licensure fees, suspension and revocation
of licenses, licensure of outlets under common ownership, and graduated
penalties against violators of the law.
The Model Law is not a required element of the regulation. The
Department published both the Model law and the Inspector General's
report with the NPRM to provide the public with further information
regarding its position on the issue of youth access to tobacco products
and to foster discussion at the State level about various legislative
strategies for ensuring the enforcement of tobacco access laws. These
documents will not be published with this final rule but will continue
to be made available.
Commenters gave considerable attention to the issue of restricting
local jurisdictions from passing more stringent statutes. They
recommended that the Department require States to permit local
governments to enact and enforce, as strong or stronger, local tobacco
control laws to supplement the State's enforcement activities. Some
commenters on this issue requested that the Department recommend a
decrease in funding to any State that limits the power of local
governments, as the Federal requirements should be seen as a minimum
standard for tobacco access and control.
Many States currently preempt localities in enforcing or
implementing some forms of tobacco control activities. However, as
noted in the NPRM, the Federal statute and regulation are minimum
requirements to which the States are held. In no way should they be
considered as limiting, or requiring States to limit, the powers of
local governments to enact or enforce tobacco control laws. As shown in
the DHHS Inspector General's report (``Youth Access to Tobacco,''
Office of the Inspector General, U.S. Department of Health and Human
Services, OEI-01-92-00880, page 7, August 1992), the majority of minors
laws and enforcement efforts regarding the sale of tobacco have taken
place at the local level. The Department encourages States to allow
localities the flexibility to enact stricter laws or to more rigorously
enforce tobacco control laws. However, in the interest of allowing
States flexibility in implementing the law, the Department will neither
prohibit the States from preempting, nor require them to preempt, local
initiatives on youth access to tobacco products.
Some commenters representing a variety of interest groups argued
that State AOD agencies do not have the authority to enforce the law,
nor should they be involved in the enforcement of this law. Commenters
also argued that law enforcement agencies are stretched so thinly that
they would not be able to provide the needed support. Effective
enforcement would, they suggested, require the creation of a large,
costly, ``bureaucratic,'' State-wide authority, which they believe is
contradictory to the AOD agencies' mission.
The Department does not specify which agency within the State is to
be responsible for implementing the law. Enforcement of the law may be
done by enforcement agencies, SSAs, private entities, or a combination
of these and other organizations. The Department expects the Governor
of each State to designate the most appropriate agency to assume lead
responsibility for implementing these requirements.
It is, however, appropriate for the SSA to work with other State
agencies to ensure that tobacco access laws are
[[Page 1497]]
enforced at the State level, as well as to work closely with State
legislators and law enforcement entities to ensure that youth access
and enforcement laws are being met. Each State will have to consider
the relative resources and capabilities of its various State entities
and make a determination as to the most appropriate enforcement agency.
So as to provide the Department with sufficient information on the
strategies to implement the law, the Department in its final rule
requires that each State report in future applications on the agency or
agencies designated by the Governor to be responsible for implementing
the requirements of Section 1926.
Annual Reporting
A few commenters recommended that the Department establish stronger
inspection requirements (e.g., three levels of inspection, more clear
requirements for performing inspections, fewer inspection violations
before the Department reduces funding, and the creation of a system of
penalties against outlets), and that the States be required in their
application materials to describe these activities in detail.
The Department is confident that the inspection process as outlined
in the final rule is sufficient for determining whether the States are
complying with the regulation. States on their own may choose to
implement more stringent inspections and if they do, States are to
explain what they have done in their application. In carrying out more
stringent inspections, however, States should make sure that they can
provide the information the Secretary requires in this regulation in
order to make a determination of compliance.
Many commenters recommended greater specificity in the reporting
requirements being made by the Department. The Department does not
agree. The Department is requiring the States to provide information
sufficient to meet the requirements of the regulation and no more. To
require that States submit additional information, even though that
information is not necessary for determining the completeness of the
application or compliance with the criteria established in this
regulation, would put an undue burden on the States.
Several commenters disagreed with the requirement for separate
reporting for over-the-counter and vending machine sales in the annual
report. They argued that it is excessive and implies a separate
compliance target for over-the-counter and vending machine sales.
The Department believes that the commenters misunderstood the
reporting requirements at issue. It should be noted that the Department
is basing compliance on the aggregate results of both over-the-counter
and vending machine inspections. The separate reporting requirements
permit a better analysis of the results, and they allow the Secretary,
in extraordinary circumstances, to consider the make-up of the outlets
inspected in determining compliance, if the State does not meet the
performance target as negotiated with the State. Of course, if the
proposed FDA regulations' prohibition of vending machine sales goes
into effect, we will revise our reporting forms to reflect this change.
In the event a State prohibits vending machine sales of tobacco, the
State will not have to include nonexistent vending machines in its
sample or enter any data for vending machines.
Public Comment
There were several comments on the requirement that public comment
shall be obtained and considered by the State prior to its submission
of a report to the Secretary; most such comments were in favor. Those
that disagreed were concerned about the burden thus represented and the
timelines for reporting.
Section 1941 of the PHS Act requires States to offer the public an
opportunity for comment on the State SAPT plan. In addition to this
requirement, the final rule requires each State to submit for public
comment the elements of the SAPT Block Grant report that relate to
implementing this regulation. The Department does not believe that this
is an excessive burden on the States nor that it will create any
unnecessary delay in the submission of applications, since the States
can send this portion of the report out for public comment at the same
time, and in the same way, as they send the plan.
Scientifically Sound Sampling Frame and Design
Many comments were received regarding the requirement for a
scientifically sound estimate based on an adequate sample design of the
inspection effort. The majority of the commenters disagreed with this
requirement. Both those who agreed with the requirement and those who
disagreed were concerned about the States' ability to carry out this
requirement without greater specificity, time and funding. Many of the
commenters believed for these reasons that the sampling requirement is
not fair, is unrealistic or is confusing. Many of the commenters
recommended that the States either be given more time to develop
scientifically sound estimates of success, be given more flexibility,
or that the requirement be eliminated.
A few commenters made specific suggestions as to how to improve the
guidance on sample design, including mandating inspections that would
assure adequate representation of the universe, and requiring that the
sample represent the ethnicity, gender and age distributions of the
community in which the purchases are made.
The Department believes that it is necessary for the States to
conduct probability samples of outlets to be inspected so that the
Department has a reliable measure of how the law is being enforced
throughout the individual States. The Department does not believe the
States should be permitted to focus their efforts on locations that are
unlikely to have a substantial population of underage persons. A
requirement to draw a probability sample also will ensure that the
States select outlets accessible to youth. The Department is available
to provide technical assistance, training and guidelines with regard to
the development of the sample designs.
Some commenters believe that the requirement for a scientifically
sound sampling frame and design implies State enactment of licensure
laws to provide a sampling base, since the regulation does not provide
a clear design for a scientifically sound sampling frame.
The Department believes there are a variety of methods whereby a
State may develop a sound sampling design in the absence of a licensing
or formal registration system. At the outset, it should be noted that,
sample designs will vary by State. States with complete centralized
license lists can use these lists in developing a sampling frame. Other
States can utilize commercial business lists that can be purchased from
a variety of sources. These lists may not be as complete as license
lists (particularly for small businesses and street vendors), in
reflecting the total universe of tobacco outlets in the State, and,
therefore, States may have to supplement them. Other options, which are
not as desirable and may have to be supplemented include area sampling,
community sampling, or sampling from Bureau of Alcohol, Tobacco, and
Firearms (BATF) tax rolls.
It should be noted that the Department views an outlet as any
``location'' which sells or distributes tobacco products. The
Department will consider for sampling purposes multiple sales points
within one location to be a single outlet. For example, a motel that
[[Page 1498]]
has a shop that sells tobacco products over the counter, and has
several vending machines which also sell tobacco products, would be
considered one location.
Oversampling
Some commenters were concerned about the requirement that the
distribution of inspection sites reflect the distribution of minors in
the States, and that inspections be conducted at times when, or
locations where, minors are more likely to purchase, (e.g., near
schools, in malls, movie theaters, etc.). This requirement is viewed as
complicating the process of determining and collecting baseline and
effectiveness data and increasing the overall costs of performing
inspections. The Department does not wish to put unnecessary obstacles
in the paths of states wishing to achieve the compliance goal of the
regulation and reduce illegal tobacco sales to minors. The Department
believes there are many ways States can ensure that the inspections are
conducted in such a way as to ensure an appropriate probability sample
of outlets which are accessible to youth and is revising the regulation
to reflect this change.
Timeframe
Numerous commenters argued that the Department is not allowing
States adequate time to comply with the law and the proposed
regulation, specifically with required inspections, reporting, and
implementation of ``other well-designed procedures.'' Although many
commenters believed that compliance with the inspection percentage
targets is attainable, many claimed the Department is not accounting
for the lead time necessary for a State to make the required
legislative changes and to establish inspection sampling designs and
systems.
The Department agrees that additional time is needed by States to
implement an inspection process and to make the legislative and
procedural changes that may be necessary for effective enforcement of
their youth access laws. The Department is, therefore, revising the
regulation so that for the first and second applicable fiscal years,
the State must, at a minimum, conduct annually a reasonable number of
random, unannounced inspections of outlets to ensure compliance with
the law and plan and begin to implement any other actions which the
State believes are necessary to enforce the law.
For the third applicable fiscal year and all subsequent fiscal
years, the States are to conduct annual, random, unannounced
inspections of both over-the-counter and vending machine outlets. These
random, unannounced inspections are to cover a range of outlets (not
preselected on the basis of prior violations) to measure overall levels
of compliance as well as to identify violations. Random, unannounced
inspections are to be conducted in such a way as to conform to commonly
accepted statistical standards and confidence levels.
Implementation of the negotiated percentage targets will not begin
until the fourth applicable fiscal year as discussed in the next
section. The Department expects that while some States will quickly
achieve the Healthy People 2000 objective for retail enforcement,
others will have greater success in reaching this goal if given
additional time to design and initiate enforcement of their
statutes.\1\ Further, the Department believes that this compliance
schedule accommodates the needs of States for a reasonable period of
time to organize their enforcement activities.
\1\ U.S. Department of Health and Human Services, Public Health
Service, Healthy People 2000: Midcourse Review and 1995 Revisions,
DHHS Publication No. 017-001-00526-6 (Washington, D.C.: U.S.
Government Printing Office, 1995), p. 173. Services and Protection
Objective 3.13 proposes to ``enact in 50 States and the District of
Columbia laws prohibiting the sale and distribution of tobacco
products to youth younger than age 18. Enforce these laws so that
the buy rate in compliance checks conducted in all 50 States and the
District of Columbia is no higher than 20 percent.''
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Compliance
Some commenters believed that the Department had exceeded its
authority in establishing performance criteria and suggested that the
Department only require that States make a good faith effort to enforce
the laws. Several other commenters suggested that the standards should
be based on State-specific baselines, while several others suggested
the standards should disallow State-specific measures and develop
national standards. Several commenters believed that the States are
being held accountable for a Federal approach, that the standards do
not take into consideration the variance among States and do not
recognize their differences.
The Department continues to believe that the national objective
should be to substantially reduce illegal sales of tobacco products to
minors, and we believe that all States can make significant progress in
reducing illegal tobacco sales if reasonable actions are taken to
enforce each State's statute. We recognize that enforcement of existing
State statutes cannot, in isolation, achieve the President's goal for
significantly reducing the initiation of tobacco use by children and
adolescents. Meaningful enforcement of State laws does, however,
constitute an important step in reducing the availability of tobacco to
children and youth.
After considering the circumstances that now exist in the States,
we believe that achieving a 20 percent failure rate in the random,
unannounced inspections required by the statute is a reasonable
objective towards which States should strive. State enforcement of
access laws can significantly reduce tobacco use by children. We are,
however, convinced that the best results that can be obtained under
this regulation will be achieved by allowing States flexibility in
designing enforcement strategies to reach the 20 percent goal for
retail enforcement recommended in Healthy People 2000. Therefore, the
Department is establishing a 20 percent failure rate as a performance
objective that States should achieve within several years, subject to
some variation in schedule. After carefully considering the public
comment on this issue, the Department now believes that establishing a
flexible schedule that is adapted to the needs of individual States for
the uniform schedule proposed in the NPRM strengthens the regulation.
Tailoring the timetable to the circumstances of the States enables the
Secretary to establish quicker schedules for those States which have
already made substantial progress in enforcing their statutes. Somewhat
longer periods of time are more appropriate for the States that have
further to go. Providing these States additional time in the initial
phase of implementing their enforcement activities will increase the
chance that they will succeed in achieving the goals rather than fail.
To ensure that States are working toward meeting and exceeding that
objective, but allow some variation in time to achieve it, the
Secretary will negotiate annually with each State an interim
performance objective the State should meet each year. It is our
expectation that all States will reach and surpass the performance
objective of 20 percent within several years. The target level
negotiated with each State should demonstrate each State's commitment
to furthering the ultimate goal of reducing tobacco use by underage
youth, reasonably reducing the availability of tobacco products to
minors and showing immediate and sustained progress toward meeting the
20 percent performance objective.
[[Page 1499]]
The results of the random, unannounced inspections in the third
applicable fiscal year (which are to be conducted in such a way as to
provide a probability sample of outlets that youth are likely to
frequent) will serve as the base line. State specific maximum failure
rates will be negotiated for the first time for applications for the
fourth applicable fiscal year which for most States is FY 1997. States
are encouraged to complete their inspections for the third and all
subsequent applicable fiscal years in time to permit negotiations for
the next fiscal year's application.
Comments on the compliance standards (allowable rate of inspection
violations) were mixed. A large number of commenters requested that the
compliance standards be made more stringent. They provided several
suggestions on how the standards could be strengthened, particularly in
the fourth year and beyond (either five percent or ten percent failure
rates).
Several commenters suggested that the Department eliminate the
compliance standards, stating that they are too stringent, arbitrary or
prescriptive. A few stated that the standards will serve as a
disincentive to accurate enforcement and reporting. A few commented
that the standards will be impossible to evaluate. Some expressed
concern that this approach could result in enforcement by the
Department rather than by the States.
Several commenters argued that the States are being held
accountable for compliance standards founded on faulty premises
established by precursor studies conducted at the local level, and that
the resulting reduction in the failure rate of random, unannounced
inspections cannot be applied to the State level. Further, they argued
that the reduction in the number of inspection failures resulted from
public education and notification of inspection efforts.
The goal of the statute is to reduce the extent to which tobacco
products are available to minors, which is critical to reducing tobacco
use among minors. The Department believes to achieve a meaningful
reduction in illegal tobacco sales to minors there must be a measurable
performance objective. As discussed below, the Department has selected
20 percent as the appropriate objective.
The Department has decided, however, based on the comments received
that a more effective and efficient program will result from
eliminating the one-size-fits-all standards proposed in the NPRM that
would establish a uniform schedule of annual failure rate reductions
from 50 to 40 to 30 to 20 percent. In its place, the Secretary will
negotiate a strategy with each State for achieving the performance
objective over a period of several years. The Department believes this
approach offers States the flexibility needed to achieve the objective.
We would hope, of course, that when each state achieves the 20 percent
performance objective, they would continue to seek even lower levels,
eventually eliminating illegal sales to minors.
With regard to setting the performance objective at 20 percent,
while there has been little experience with State level enforcement
and, therefore, no studies to document appropriate expectations for
State-wide inspections, the Department believes that the local studies
do provide a reasonable starting point. Several studies in which
unannounced inspections were used to measure access by minors to
tobacco products show a significant reduction in the availability of
such products when enforcement is strengthened. These studies reflect a
sales rate of tobacco products to minors of 24 percent to 39 percent
within one to two years of such enforcement efforts (see studies cited
in NPRM, 58 FR 45157). Other studies have shown that moderate
enforcement efforts such as officially sponsored ``stings'' and
citations led to levels of illegal sales of close to zero percent (see
discussion in economic analysis, below). These studies suggest that
States using reasonable enforcement measures should be able to reduce
illicit sales of tobacco products to minors to 20 percent or below over
a relatively short period of time. Under the final rule, that time
period will be negotiated with each State.
The Department will also work to assist States by supporting
research and providing technical assistance helpful in determining the
type of enforcement measures and control strategies that are most
effective. This information will be helpful to States in improving
their enforcement measures and further reducing their failure rates.
Many commenters expressed concern that all retailers were being
held accountable for the mistakes of a few and that the sampling frame
would only result in a suggested or ``estimated'' overall compliance
level against which penalties would be determined. They were concerned
about the use of a sample to ``estimate'' overall compliance.
It appears that these commenters misunderstood the Department's
intent. The penalties prescribed by section 1926(c) of the PHS Act are
applied to the State by means of a reduction in the amount of the SAPT
Block Grant funds they receive. The penalties are not applied to
retailers.
Secretary's Discretion
Several commenters expressed concern regarding the discretion given
to the Secretary in determining compliance in extraordinary
circumstances. They feared that such discretion will ultimately
undermine the intent of the regulation. A number of commenters raised
issues regarding cases in which a State does not meet the compliance
criteria. A large number thought that the term ``substantial'' should
be deleted because it undermined the Department's ability to carry out
the penalties stipulated in the law. From the alternative perspective,
a few commenters believed that the significant efforts, activities and
progress of the States should be considered by the Secretary in making
a compliance determination. A few thought a waiver should be given only
after a public hearing. Lastly, there were a few commenters who
suggested that the Department require enactment of one or more of the
``other procedures'' cited in the NPRM in the event that either a State
is found out of compliance after the first year, or that waivers not be
applied, in the event that the State failed to enact the recommended
``other well-designed procedures.'' The regulation permits the
Secretary to, in extraordinary circumstances, consider other factors in
determining compliance with the regulation, in the event that the State
fails to adequately comply with the requirements. As indicated these
will only be considered in extraordinary circumstances. In these
instances, the Department will review a number of factors including
appropriate survey data indicating that, in the previous year,
significant progress has been made toward reducing the use of tobacco
products by minors. It will be the responsibility of the State to
explain the extraordinary circumstance and to provide the information
for the Secretary to consider.
Moreover, the Department reminds the States that the Secretary, in
extraordinary circumstances, may consider other well-designed
procedures, in addition to the overall success a State achieves in
reducing the availability of tobacco products to minors, in making a
determination regarding a State which does not meet its negotiated
goal. The Department recognizes that some States may implement other
approaches, along with their inspection system, which may effectively
reduce youth access and use
[[Page 1500]]
of tobacco products. The Secretary may also consider the State's
efforts with respect to targeted inspections and enforcement measures
toward those outlets known to be selling or distributing tobacco
products to minors.
The Department notes that this discretion would be used in only
extraordinary circumstances, and a State must clearly document the
information that it wishes the Secretary to consider in determining
whether to exercise that discretion. The Department believes that
allowing the Secretary to take other factors into consideration, in
extraordinary circumstances, will not undermine the intent of the law
which is to reduce youth access to tobacco products.
Compliance Penalties
Several commenters expressed concern about the reduction in the
Block Grant allotment for non-compliance. They considered the reduction
to be punitive, unfair and too prescriptive. They further stated that
the reduction would weaken or harm the alcohol and other drug abuse
prevention and treatment systems. Lastly, they expressed concern that
the State AOD agencies have no control over the situation since they
are neither responsible for tobacco programs nor for law enforcement.
The Department appreciates the concerns expressed regarding the
potential reduction in the Block Grant allotment and the negative
impact of such a reduction on the alcohol and other drug abuse
prevention and treatment systems. However, the Department also
recognizes the importance of strong incentives for meeting the
performance objective and notes that the reduction in allotment for
non-compliance is legislated and not subject to change through the
regulatory process.
Funding
Many commenters opposed this regulation with the argument that it
imposes an unfunded mandate upon States from the Federal Government, in
contradiction of the Administration's policies on unfunded mandates.
Commenters representing a wide variety of groups had serious
concerns about how to fund the overall implementation of Sec. 1926,
especially the random, unannounced inspections. Many opposed the
regulation, fearing they would be forced to pay for enforcement, such
as merchants who believed that they would bear the cost of implementing
and enforcing this regulation through licensing fees and penalties.
State agencies believed they would be forced to shoulder the costs by
diverting funds away from AOD prevention, treatment and other law
enforcement activities. They claimed that alcohol and other drug abuse
programs and violence programs would have to be cut, in order to pay
for the enforcement of tobacco laws. Government representatives
believed that taxes would have to be raised or licensure fees enacted
to comply with the regulation. Several argued that Block Grant funds,
or Federal funds from another source, should be used to pay for the
cost of complying with this requirement.
Many commenters objected to the restriction on the use of the Block
Grant program funds. Many commenters also argued that the five percent
allotment for administrative expenses is already too small for current
administrative costs of the Block Grant, without factoring in tobacco
law enforcement. They feared that tobacco law enforcement would force
AOD programs to be cut, and that some States would not be able to
comply. Others argued that youth access should be considered a
prevention activity and, therefore, the Block Grant program funds
should be used to fund the enforcement.
Many expressed concern that the sampling frame requirement is
costly, time-consuming, and labor-intensive. Commenters additionally
argued that the cost involved for the enforcement of this law may
result in a shift of resources out of needed, publicly accepted alcohol
and other drug abuse prevention, treatment and enforcement activities
into tobacco enforcement. They argued that social services and law
enforcement are often housed in agencies other than those administering
the SAPT Block Grant, giving them no inherent stake in complying with
the regulation, especially since the cost for enforcement is expected
to be high.
The Department recognizes the difficult funding decisions and the
need to balance competing program priorities which States will face in
order to implement this law. Inspections and enforcement are, however,
requirements of the law, requirements that the Department cannot waive.
The Department wishes to explain the availability of Federal Block
Grant funding for implementation of these statutory requirements.
States may use funds from the Centers for Disease Control and
Prevention's Preventive Health and Health Services Block Grant (42
U.S.C. 300w, et seq.), for sample design, inspection and other
enforcement purposes, as funds from this block grant are available to
assist States in conducting activities consistent with making progress
toward achieving the objectives established by the Secretary for the
health status of the Nation's population for the year 2000.\2\
\2\ Section 1904(a)(1)(A) of the Public Health Service Act (42
U.S.C. 300w-3) authorizes the use of Preventive Health and Health
Services Block Grant funds for ``Activities consistent with making
progress toward achieving the objectives established by the
Secretary for the health status of the population of the United
States for the year 2000. See also Healthy People 2000: Midcourse
Review and 1995 Revisions, DHHS Publication No. (PHS), pp. 35-39.
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States may also use funds from the primary prevention setaside of
their SAPT Block Grant allotment, under 45 CFR 96.124(b)(1), to fund
their sample design and inspection costs. States may not, however, use
funds from the SAPT Block Grant to pay for other activities. To allow
States to use SAPT Block Grant funds for such activities as court
costs, for example, could significantly reduce the amount of funds
available for substance abuse services.
Other Comments
The Department, in numerous instances in the NPRM, requested input
and suggestions from commenters on feasible, objective, cost-effective
approaches to enforcement of the law and compliance with the
regulation. Commenters provided the Department with a large number of
recommendations, in the following categories:
(1) Control of Tobacco Products
a. States should eliminate all forms of free distribution (samples,
coupon redemption, etc.);
b. States should require all tobacco products to be kept behind the
counter at outlets;
c. States should ban the sale of single cigarettes;
d. States should use locking devices on vending machines;
e. States should not use locking devices on vending machines; and
f. States should require that all tobacco products to be kept
locked behind the counter.
(2) Educational Activities
a. States should provide public information and education campaigns
on the prohibition of sales and distribution of tobacco; and
b. States should offer prevention and education activities.
(3) Procedural Activities
a. States should detail procedures for retailers to comply with the
law (signs notifying public of law, request for ID, etc.);
[[Page 1501]]
b. Outlets should check the identification of all tobacco
purchasers; and
c. Outlets should check State-issued identifications.
(4) Assessment/Survey Activities
a. States should base local assessments on the cost of sting
operations;
b. States should base local assessments on passive observations of
apparent age of purchasers; and
c. States should use self-report data from minors via survey
questions about their success at purchasing tobacco products.
(5) Punitive Activities
a. States should allow for community action taken against
violators;
b. States should increase fines for violations;
c. States should not punish minors for violating the law; and
d. States should punish minors for violating the law.
Although this regulation will not require that States implement
such activities, States may wish to review this list of suggestions as
possible activities or approaches to reduce the likelihood of
violations of the law, as well as to reduce the use of tobacco products
by children and youth.
Economic Impact
Executive Order 12866 requires the Department to analyze the costs
and benefits of any regulation that is likely to have an economic
impact of $100 million or more or meet other thresholds specified in
the Order. In this assessment, the Department is to pay particular
attention to the consistency of the regulatory action with the
statutory mandate, and to avoiding interference with State, local, and
tribal governments in the exercise of their governmental functions
(Sec. 6(a) of the Order). In addition, as required by the Regulatory
Flexibility Act, the Department prepares a Regulatory Flexibility
Analysis for any regulation that is likely to have a ``significant''
economic impact on a ``substantial number'' of small entities, and
analyze alternatives that may lessen impact on them. In the preamble to
the proposed rule, the Department estimated compliance costs at about
$50 million for States and up to $100 million for private business, and
benefits at potentially billions of dollars a year. In the analysis
that follows, the Department has summarized the original analysis,
responded to comments on it, and incorporated additional information,
including a discussion of the use of Block Grant funds to pay for the
sample design and inspection requirements of this statute. Together
with the remainder of the preamble, this assessment constitutes
compliance with each of these legal requirements. This rule was
reviewed by OMB pursuant to Executive Order 12866 as an economically
significant regulatory action.
The FDA has independently estimated the effects of its proposal
(drawing both on original analysis and substantial additional
information), and the economic analysis and background information
provided in its NPRM are presented in considerably greater depth than
that presented here. The conclusions in both analyses are broadly
consistent.
The Centers for Disease Control and Prevention (CDC) estimates that
at present approximately 1 million underage youth and children become
regular smokers each year. A major cause is ready, illegal access to
tobacco products. Three-fourths or more of all outlets sell illegally
to minors, due in part to insufficient enforcement efforts, which
encourage a scoff-law attitude among merchants. A recent study
(``Design of Inspection Surveys for Vendor Compliance with Restrictions
on Tobacco Sales to Minors,'' April 1994, prepared by Rick L. Williams
et al. of the Batelle Corporation) estimates that 73 per cent of all
over-the-counter outlets and 96 per cent of all vending machine outlets
sell tobacco products to minors.
The Department believes that aggressive and consistent enforcement
efforts by States are likely to reduce substantially illegal tobacco
sales. However, in the absence of tobacco control measures reducing
availability and the allure of tobacco products to youth, State
enforcement activities may not be fully effective. In addition, even
the most successful enforcement activities may lead to partially
offsetting tactics by youth, such as older youth legally buying
cigarettes and reselling or giving them to younger youth. In such an
event, the actual impact of more effective State enforcement may not
achieve maximum progress in meeting the goal of reducing the use of
tobacco products by youth and children. Furthermore, the volume of
illegal sales is likely to vary depending on the number and location of
stores which continue to sell illegally. If, for example, the
proportion of outlets selling to minors were to be reduced by two-
thirds, and there are three outlets located within a two block area, it
is likely that youth would have access to tobacco at one of these three
outlets. Although the effect on the number of outlets selling tobacco
to youth may be substantial, the inconvenience to youth might be so
small as to reduce illegal sales only slightly. Thus, the potential
range of outcomes under serious enforcement may vary in the extent to
which it affects the prevalence of youth smoking.
Estimates of annual spending on cigarettes by youth range from
about $500 million to over $1.5 billion. (See consumption estimates by
DiFranza, J and Tye, J, ``Who Profits from Tobacco Sales to Children?''
JAMA, 263:20 (1990): 2784-2787; and Cummings, K.M. et al., ``The
Illegal Sale of Cigarettes to U.S. Minors: Estimates by State''
American Journal of Public Health 84:2 (1994): 300-302.) Whereas the
original economic analysis used the higher estimate, this analysis
relies on the lower figure presented in the more recent study. Thus, as
little as a 20 percent total reduction in sales would have an economic
effect of $100 million.
In light of the penalty provision contained in the statute, States
will have a strong incentive to reduce the level of illegal sales. The
outcome, however, will depend on the nature and extent of the
enforcement actions taken by the States and, if the FDA proposed
restrictions on access and appeal were made final, the synergistic
effect such efforts would have when combined with such additional
control measures, and with any supplemental tobacco control measures
the States may adopt.
In addition to overall reductions in tobacco sales, enforcement of
the law will affect the retail market. The money which would have been
spent on tobacco products will be spent on other goods and services. An
equivalent amount may be spent in the same stores which sell tobacco
products. However, in some instances (e.g., sales from free-standing
vending machines) it is not clear that alternative products will raise
the same volume of revenue for a specific store. Therefore, the statute
and the final rule may have a significant effect on some small
businesses that currently sell tobacco products to minors.
In this analysis, the Department focuses mainly on cigarette sales,
which account for the overwhelming majority of tobacco product sales to
youth. Almost all of the analysis is, however, equally applicable to
snuff and chewing tobacco.
Magnitude of Effects
For purposes of the analysis, the Department assumes that States
will take significant actions to reduce the number of outlets selling
tobacco products illegally, achieving a rate of
[[Page 1502]]
illegal sales below 20 percent within five years. Since about three-
fourths of all retail stores and almost all vending machine outlets now
sell to minors, a State could suffer a serious financial penalty if it
failed to bring the great majority of these outlets into compliance
within the specified periods. Based on limited data, the Department is
aware that some localities have been highly successful in reducing
failure rates to relatively low levels. For example, the Department is
aware of one community--Woodbridge, Illinois--that used a variety of
control methods to reach a failure rate of less than 5 percent. While
State compliance results may not typically reflect the actual rate of
sales to minors, cigarette use by youth decreased by half in this same
community, despite the availability of outlets selling illegally in
adjoining areas. In another community--Everett, Washington--a similar
youth access effort had smaller effects on tobacco use. Unfortunately,
there is no scientific basis on which to make a definitive statewide or
national projection, absent a history of far stronger enforcement
efforts by States and across a wider range of communities.
The Department expects that actual violation levels in most States,
after successful implementation of State enforcement programs, will be
driven lower than the percentage compliance targets to be negotiated
for the short run. The Department does not know, however, what level of
compliance the States will achieve on average, or precisely how that
level will translate into reductions in youth smoking. It is probable,
however, that the reduction in tobacco use by youth and children would
be much less than the reduction in illegal sales measured by the
State's failure rate. In the original economic analysis the Department
suggested that a one-third to two-thirds reduction in smoking might be
possible through improved enforcement. The Department now believes that
a significantly lower estimate is more realistic given the
uncertainties implicit in varying levels of State enforcement and the
absence of meaningful controls on tobacco advertising and promotion.
The economic analysis in FDA's proposed regulations implicitly
considered the impact of State programs in concluding that ``if
aggressively implemented and supported by both industry and public
sector entities, comprehensive programs designed to discourage youthful
tobacco consumption could reasonably achieve the Healthy People 2000
goal of halting the onset of smoking for at least half, or 500,000, of
the 1,000,000 youngsters who presently start to smoke each year.'' \3\
However, in the absence of adequate empirical data, FDA could not
determine the independent contribution of each proposed restriction.
Similarly, in view of the substantial uncertainty regarding future
State enforcement efforts, the potential for offsetting industry
promotional tactics, and the willingness of older youth to purchase
tobacco products for younger youth, the Department is unable to make a
precise quantitative estimate of the impact of this regulation on youth
smoking rates. The Department expects, however, that any plausible
estimate would exceed one-tenth, but fall short of one-third.
Nevertheless, the analysis below demonstrates that even very modest
declines in the rate of adolescent smoking, much smaller than those
reasonably anticipated, would yield substantial health benefits among
adults.
\3\ Federal Register, Vol. 60, No. 155, August 11, 1995, p.
41362.
[[Page 1503]]
---------------------------------------------------------------------------
A reduction in teen smoking implies a considerable reduction in
adult smoking, over time. Since approximately 70 percent of adult daily
smokers became daily cigarette smokers by age 18, a substantial number
of the youth deterred from smoking by this regulation would become
nonsmoking adults. Moreover, this effect would be over and above the
effects of smoking cessation programs, education, family pressures, and
other public and private influences on the prevalence of smoking. While
the Department estimates a probable reduction in cigarette sales of
millions of dollars a year in the near term, this reduction would
translate into an annual multi-billion dollar effect over the long run,
as each cohort of non-smoking youth ages into non-smoking adults. FDA
calculated the benefits of tobacco regulation by conservatively
assuming that only one-half of the teenagers deterred from smoking
would remain nonsmokers as adults.\4\ That analysis, which was largely
based on data from the American Cancer Society's Cancer Prevention
Study II, implies that reducing the number of smoking youth by as
little as 1 percent would prevent 1,200 future smoking-related deaths,
gaining over 18,000 life-years, among each year's cohort of teenagers
who would otherwise begin to smoke. As the projected results are
proportional to the assumed effectiveness rate, this model also
indicates that a 5 percent reduction in youth smoking would prevent
6,000 premature deaths, a 10 percent reduction 12,000 premature deaths
and a 20 percent reduction 24,000 premature deaths among that teenage
cohort. The Department believes these projections are plausible and is
convinced that even very small decreases in youth tobacco consumption
would yield substantial health improvements.
\4\ Ibid., p. 41360.
---------------------------------------------------------------------------
Benefit Estimates
The benefits of the regulation lie primarily in reducing the costs
of the adverse health effects resulting from tobacco use. The CDC
estimated smoking-attributable medical costs at $50 billion in 1993.
The Office of Technology Assessment counted both medical costs and lost
earnings to calculate $68 billion worth of smoking-related costs in
1990. For its assessment of future regulatory consequences, FDA relied
on incidence-based costs of smoking, calculated over the lifetime of
each year's new cohort of potential smokers. This methodology, which is
described fully in the FDA economic analysis, derived values for
reduced medical costs and lost wages from several earlier economic
studies, particularly T.A. Hodgson, ``Cigarette Smoking and Lifetime
Medical Expenditures,'' The Milbank Quarterly, vol. 70, No. 1, p. 91,
1992, and D.P. Rice et al. ``The Economic Costs of the Health Effects
of Smoking, 1984, The Milbank Quarterly, vol. 64, No. 4, p. 526, 1986.
In addition, FDA considered various economic analyses to support its
use of a $2.5 million willingness-to-pay estimate to represent each
smoking-related fatality averted. (Most notably Fisher, A. et al.,
``The Value of Reducing Risks of Death: A Note on New Evidence,''
Journal of Policy Analysis and Management, vol. 8, No. 1, pp. 88-100,
1989; and Viscusi, W.K., ``Fatal Tradeoffs: Public and Private
Responsibilities for Risk,'' Oxford University Press, p. 24, 1992.)
As explained above, the Department now believes that the
uncertainty surrounding the forthcoming responses from State
enforcement agencies, industry suppliers, and adolescent users of
tobacco products does not allow a precise quantitative forecast of the
independent effect of this rule on adolescent tobacco use.
Nevertheless, application of the benefits valuation methodology
summarized above and described fully in the FDA analysis, demonstrates
that even if this regulation were to achieve effectiveness rates for
less than the one-tenth to one-third level believed plausible, the
value of the realized benefits would reach hundreds of millions, if not
billions of dollars per year. Table 1 displays these potential
projections using prevent value discount rates of both 3 and 7 percent,
respectively.
BILLING CODE 4160-20-M
[[Page 1504]]
[GRAPHIC][TIFF OMITTED]TR19JA96.008
BILLING CODE 4160-20-C
[[Page 1505]]
An alternative benefits valuation methodology was presented in the
economic analysis for the proposed rule. That analysis relied on the
work of a Rand Corporation study (Manning, W.G. et al., ``The Taxes of
Sin--Do Smokers and Drinkers Pay Their Way?'' JAMA, pages 1604-1609,
March 17, 1989, Vol. 261, No. 11), which estimated the 1986 net present
value cost to society of smoking by comparing the excess costs of
services used by smokers (i.e. employer and taxpayer share of excess
medical bills, sick leave and group life insurance subsidies, lost
taxes, fatalities from passive smoking, and smoking-related fires) to
the taxes and premiums paid by smokers. The best estimate was a
``present value'' (discounted) cost of $0.39 per pack, under the
assumption of a 5 percent discount rate applied to future costs.
However, the study made no allowance for the cost of low-birthweight
infants and as the Department found in the NPRM, these costs would add
at least an additional 15 cents a pack.\5\ Thus, the Department
estimated that the net external costs born by non-smokers in 1989
exceeded 50 cents for every pack of cigarettes sold.
\5\ Federal Register, Vol. 58, No. 164, August 26, 1993, p.
45159.
---------------------------------------------------------------------------
The Department now believes that this methodology was very
conservative for valuing the benefits of smoking reductions, because it
did not quantify the future benefits that would result from the
expected reduction in adult smoking, and omitted all costs borne by the
smokers themselves. Nevertheless, if this methodology were revised to
assume that just one-half of the youth prevented from smoking were also
to refrain as adults, it would predict that even a 5 percent reduction
in the youth smoking rate would result in a savings of about $200
million annually to the rest of society. (According to Manning, the
average smoker consumes roughly 16,300 packs over a lifetime; 25,000
fewer smokers x $.50 x 16,300 packs = $204,000,000).\6\
Accordingly, a 10 percent reduction in youth smoking doubles this
estimate and a 25 percent reduction raises it to $1 billion annually.
Thus, despite the omission of all costs borne by the addicted smoker,
this methodology confirms that even relative small reductions in
adolescent tobacco use would generate substantial societal benefits.
\6\ Manning, W.G., et al., ``The Costs of Poor Health Habits, A
Rand Study'', Harvard University Press, Cambridge. 1991, p. 76.
---------------------------------------------------------------------------
Costs
The primary costs of complying with this regulation lie in the
costs of inspection and enforcement. The Department does not have good
data on the costs of enforcement because little research has been done
in this area to measure costs. However, the Department does not believe
these costs need to be substantial in relationship to other costs of
State and local law enforcement, or to other duties faced by retail
business.
The Department assumed, for purposes of analyzing costs, that the
costs necessary to carry out the Model Law recommended by the
Department represent the upper end of possible enforcement costs. In
this scenario, a licensing apparatus must be set up, stores notified of
their obligations, hearing procedures developed, a sampling design and
procedure developed, both random and targeted inspections organized,
fines levied, and the like. Even if an average State were to piggyback
this system on top of an alcohol licensing and enforcement system, it
could require a staff of one or two dozen people and an annual budget
of approximately one million dollars. Across all jurisdictions, this
implies costs on the order of $50 million for an effective enforcement
effort. This includes all enforcement costs, including sampling and
inspections.
In response to widespread concerns about inspections, and in
particular to the problems of designing a sampling frame from which to
select outlets to be inspected, the Department has developed additional
information on these issues. It used information from the Batelle
report and from cost projections of implementing a State-wide
inspection system completed by CSAP's National Center for the
Advancement of Prevention (``Estimating The Cost of Inspections under
the Synar Amendment,'' July 1994). They analyzed the availability of
data, and optimum design, for conducting random, unannounced
inspections. It was concluded that in most States the most cost-
effective sampling method would rely on licensing or commercial
business lists, use cluster sampling rather than random sampling, and
cover 300-400 outlets in the smallest half of the States and about 600
outlets in the larger States. Furthermore, it was concluded that on
average, it would cost approximately $290,000 per State for an average
State to develop a sampling design and conduct inspections, or about
$17 million a year nationally. Some customers argued that the cost of
inspections would be far lower, but these commenters did not include
sampling design and selection costs.
This new estimate is broadly consistent with the original estimate
that the total cost of all sampling, inspection, enforcement, and
administrative costs would be about $50 million a year nationally if
Model Law approaches were generally adopted. It may turn out that
States are able to enforce their laws using relatively inexpensive
approaches (as discussed below) in which case this $17 million estimate
for the sampling and inspection functions may comprise the great
majority of total costs, and the national total be closer to $25
million than to $50 million.
Regardless of what costs eventually are incurred, the Department
believes that the cost of implementing this regulation should be shared
by the Department and the States and therefore encourages States to use
funds from the CDC's Preventive Health and Health Services Block Grant
(42 U.S.C. 300w, et seq.), and from the Primary Prevention setaside of
their SAPT Block Grants as explained earlier in this preamble.
Alternatively, States could adopt a self-financing licensing and civil
money penalty system or decide to raise tobacco taxes or use general
fund revenues. Thus, States have a wide range of financing mechanisms
available to defray their costs.
A number of commenters raised concern over the cost of using the
criminal justice system--police and courts--to deal with illegal sales.
The Department agrees that this would be very costly, not only in
dollar terms, but also in displacing important crime-fighting
activities. The Department does not recommend that States use the
criminal justice system as a primary means of enforcement; instead, a
system of civil money penalties and fines would almost certainly be
more cost-effective.
The Department also originally estimated that retailers would incur
costs on the order of $50 to $100 million annually for such functions
as training staff to prevent sales to minors, with the lower range
reflecting present enforcement activities. The public comments did not
suggest that this estimate was flawed. However, the FDA proposed
regulation's economic analysis explored retailer costs in more depth,
focusing on training, and time needed to conduct identification checks
on purchasers. The FDA concluded that total costs to retailers would be
about $50 million annually. Accordingly, this estimate is used in this
final Regulatory Impact Analysis.
[[Page 1506]]
Comparison of Benefits to Costs
Based on the estimates above, the Department expects that after the
several year period necessary for all or virtually all States to meet
and exceed the 20 percent performance objective, net annual enforcement
costs on the order of $100 million will generate annual social benefits
that exceed hundreds of millions and potentially billions of dollars
annually.
Because the Department was unable to make a precise quantitative
estimate of the effectiveness of this regulation on youth smoking
rates, it has further compared the costs and benefits using the FDA
methodology assuming that much lower percentages of those deterred from
smoking as youths remain nonsmokers as adults (the original analysis in
Table 1 assumed that 50% of those deterred as youths would remain
nonsmokers as adults). Using the original 3% discount rate, youth
deterrence rates of \1/3\, \1/5\ and \1/10\ will yield net benefits
even if only 1% of those deterred as youths remain nonsmokers as
adults. At the \1/20\ and \1/100\ youth deterrence rates, net benefits
are still realized if 2% and 9% of those deterred as youths remain
nonsmokers as adults, respectively. The results using a 7% discount
rate are slightly higher. Youth deterrence rates of \1/3\, \1/5\, \1/
10\, \1/20\, and \1/100\ would yield net benefits if 1%, 2%, 3%, 6% and
28% of those deterred as youths remain nonsmokers as adults,
respectively.
Distributional and Transitional Effects
The Department's cost estimates deal with the ultimate effects of
smoking reductions and activities directed toward reductions. There are
additional economic consequences which are not part of these
calculations but which are of concern.
First, the Department believes there will be negligible adverse
effects on the great majority of retail outlets. It is true that stores
that currently sell tobacco products to minors will lose sales in the
short run. These sales may or may not be offset by increases in sales
of other items. However, with the single exception of vending machines
(discussed below), the effect on most outlets will be small. There are
approximately 1\1/2\ million retail sales outlets in the United States,
and up to two-thirds of these sell tobacco products. (FDA estimates
about one-half.) On average, tobacco products represent 5 percent of
total sales in those outlets that sell tobacco. Thus, even if this rule
were to achieve a one-third reduction in smoking by underage youth, the
roughly $170 million near term annual shortfall (\1/3\ of $500 million)
represents less than one-tenth of 1 percent of total sales in stores
selling tobacco products. As is standard practice in estimating the
economic effects of regulation, the Department assumes that there will
be no loss to the economy resulting from a youth not spending $2 for a
pack of cigarettes because the money will be spent on some other good
or service. Considering that in many if not all cases the money not
spent on tobacco will be spent on other products in the same stores,
the negative economic effects on sales, costs, and profits will be
negligible.
Second, the Department expects significant drops in vending-machine
sales of tobacco products because of the actions that will have to be
taken to prevent sales to minors from these devices. The Batelle report
(Williams et al. estimates that about 96 percent of vending outlets
sell cigarettes to minors. For the youngest minors, they are often the
only easy sources of purchase. A study for the vending machine industry
shows that only 23 percent of smoking youth now use vending machines
often or occasionally (Response Research, Inc., ``Findings for the
Study of Teenage Cigarette Smoking and Purchasing Behavior,'' June/July
1989). However, in the future this percentage would rise greatly--
perhaps close to 100 percent--if enforcement eliminated other sources
of illegal sales but left vending machines available to youth. Based on
the research data, the Department would expect that States will face
significant challenges in complying with the new law unless they impose
strict controls on tobacco vending machines in locations accessible to
minors.
In the original Regulatory Impact Analysis we estimated that
perhaps 1,000 vending machine companies would face a loss of sales
averaging about 7% of non-tax revenue. Since then, later data indicate
that the economic effects will be significantly less. A long term trend
towards decreased use of vending machines for cigarette sales has
accelerated. According to the ``1994 State of the Industry Report'' in
Automatic Merchandiser, August, 1994, both the projected number of
cigarette vending machines and operator revenues from these machines
fell by about one-fourth from 1992 to 1993 alone. According to the same
source, cigarette sales are now only about 3.4% of operator revenues.
Thus, the potential loss is only about half of that projected in the
1992 proposed Regulatory Impact Analysis even assuming complete
elimination of vending machine sales.
A large number of commenters argued that the proposed rule
represented an unfunded mandate. The Department agrees that the statute
creates a financial burden for the States, albeit a burden that is very
small as compared to unfunded mandates in areas such as pollution
control and as compared to State expenditures taken as a whole. In
response to these concerns, the Department has taken several actions.
As stated earlier in this preamble, the Department is allowing States
flexibility in designing enforcement strategies to reach the 20 percent
goal for retail enforcement. In addition, States may, in implementing
this regulation, use funds from the CDC's Preventive Health and Health
Services Block Grant (42 U.S.C. 300w, et seq). States may also use
funds from the primary prevention setaside of their SAPT Block Grant
allotment under 45 CFR 124(b)(1) for sample design and inspection costs
of complying with this regulation. States may not, however, use any
funds from the SAPT Block Grant for any other activities related to the
enforcement of their State laws. To allow States to use SAPT Block
Grant funds for such activities as court costs, for example, could
significantly reduce the amount of funds available for substance abuse
prevention and treatment activities.
There is another cost to States in addition to costs required by
this statute. Approximately 18 percent of the cost of a pack of
cigarettes goes to pay State taxes. Tobacco tax losses will be offset
in part by sales taxes on alternative goods purchased with the same
dollars, but the net effect still could be a revenue loss because
excise taxes on tobacco are higher than taxes on other consumer
products. In its proposed regulations, the FDA estimated that a 50
percent reduction in the rate of tobacco consumption by youth would
cause a gradual reduction in State cigarette excise tax revenues, from
$31 million in the first year to $252 million in the tenth year. As
discussed above, the result of the SAMHSA rule would be significantly
smaller and any future lost tax revenues would diminish accordingly. To
put this amount in perspective, total State and local government
revenues from all sources exceed a trillion dollars a year, thousands
of times this potential loss. Nonetheless, State enforcement programs
involve a considerable fiscal effect that arises unavoidably if States
enforce their own laws effectively and deter the illicit sale of
tobacco products to minors.
[[Page 1507]]
Additional Alternatives
In the proposed rule the Department requested comment on several
aspects of the proposed regulations. One alternative the Department
considered was the application of a more stringent standard on the
States, such as zero tolerance of illegal sales. However, the
Department believes that risking an error which would force us to take
vitally needed alcohol and drug-treatment funds from a State despite a
serious enforcement effort is too dangerous at present. Hence, on an
interim basis, and until the Department and the States gain some
experience from serious State-wide efforts at enforcement, the
Department will not require States to achieve this level of compliance
at this time.
Second, the Department considered specifying particular enforcement
measures that States must take, such as requiring that stores illegally
selling to minors lose a license to sell tobacco products, or requiring
local communities to enforce sales bans directly. However, the same
uncertainty that would make a near 100 percent compliance objective
imprudent until we have more information appears to make imposing
uniform processes on all States unwise.
Third, the Department considered more stringent approaches to
compliance measurement. As indicated above, random, unannounced
inspections are a low-cost and highly effective method of determining
which outlets violate the law. The Department considered requiring
States to conduct a minimum number of inspections using youth, such as
one inspection annually at 50 percent of all sales outlets. However,
the Department decided that it would be premature to force a particular
standard upon all States.
Paperwork Reduction Act
This final rule contains collections of information that are
subject to review by the Office of Management and Budget (OMB) under
the Paperwork Reduction Act of 1995 (Pub. L. 104-13). The title,
description, and respondent description of the information collection
are shown below with an estimate of the annual reporting burden.
Included in the estimate is the time for reviewing instructions,
searching existing data sources, gathering and maintaining the data
needed, and completing and reviewing the collection of information.
Estimates for FY 1995 and FY 1996 and thereafter are presented
separately because the reporting requirements differ for these time
periods.
Title: Minors' Access to Tobacco--45 CFR 96.130--FINAL RULE
Description: Data to be reported is required by 42 U.S.C. 300x-26
and will be used by the Secretary to evaluate State compliance with the
statute, and the publish special analytic studies from time to time.
Description of respondents: State or local governments.
Estimated Annual Reporting Burden:
----------------------------------------------------------------------------------------------------------------
Number of
Number of responses Hours per Total hours
respondents per year response
----------------------------------------------------------------------------------------------------------------
FY 1995
Annual Report:
96.122(f)............................................... 7 1 0 \1\ 0
96.130(e) (1-3)......................................... 52 1 10 \2\ 520
State Plan
96.122(g)(21)........................................... 0 0 0 \3\ 0
96.130(e) (4, 5)........................................ 59 1 14 \4\ 826
---------------------------------------------------
Total................................................. ........... ........... ........... 1,346
FY 1996 and Thereafter
Annual Report:
96.130(e) (1-3)......................................... 59 1 10 590
State Plan:
96.122(g) (21).......................................... 0 0 0 \3\ 0
96.130(e) (4, 5)........................................ 59 1 14 826
---------------------------------------------------
Total................................................. ........... ........... ........... 1,416
----------------------------------------------------------------------------------------------------------------
\1\ This section describes reporting requirements for the first applicable fiscal year. For seven States, FY
1995 is the first applicable fiscal year. States are required to provide a copy of the statute enacting the
law and are asked to provide a description of the previous year's activities, if they so desire. No burden is
associated with these requests.
\2\ This is the burden associated with completing the annual report narrative and Form 06B as requested in the
SAPT Block Grant Application instructions and format.
\3\ This section duplicates the information collection language in section 96.130(e). The burden is claimed
under 96.130(e).
\4\ This is the burden associated with completing the State Plan narrative as requested in the SAPT Block Grant
Application instructions and format.
Under the Paperwork Reduction Act of 1995, agencies are required to
provide 60-day notice in the Federal Register and solicit public
comment before a collection of information requirement is submitted to
the Office of Management and Budget (OMB) for review and approval. In
order to fairly evaluate whether an information collection should be
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act
of 1995 requires that we solicit comment on the following issues:
Whether the information collection is necessary and useful
to carry out the proper functions of the agency;
The accuracy of the agency's estimate of the information
collection burden;
The quality, utility, and clarity of the information to be
collected; and
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
Therefore, we are soliciting public comment on each of these issues
for the information collection requirements. Comments regarding this
burden estimate or any other aspect of this collection of information,
including suggestions for reducing burden, may be sent to the agency
official whose name appears in the For Further Information Contact
section above, and to Deborah Trunzo, Office of Applied Studies/SAMHSA,
Room 16-105 Parklawn,
[[Page 1508]]
5600 Fishers Lane, Rockville, MD 20857.
We received no public comments on the estimated public reporting
burden, and it remains the same as that contained in the proposed rule.
We do not believe material changes made in this rule should change this
burden.
Lists of Subjects in 45 CFR Part 96
Alcohol abuse, Alcoholism, Drug abuse, Tobacco.
For the reasons set out in the preamble, 45 CFR part 96 is amended
as set forth below.
Dated: December 15, 1995.
Donna E. Shalala,
Secretary.
PART 96--BLOCK GRANTS
1. The authority citation for 45 CFR Part 96, subpart L continues
to read as follows:
Authority: 42 U.S.C. 330x-21 to 300x-35 and 300x-51 to 330x-64.
Sec. 96.122 Application content and procedures.
2. Section 96.122 is amended by adding paragraph (f)(6),
redesignating paragraphs (g)(21) and (g)(22) and (g)(23) respectively
and adding a new paragraph (g)(21) to read as follows:
* * * * *
(f) * * *
(6) For the first applicable fiscal year for which the State is
applying for a grant, a copy of the statute enacting the law as
described in Sec. 96.130(b) and, if the State desires, a description of
the activities undertaken during the previous fiscal year to enforce
any law against the sale or distribution of tobacco products to minors
that may have existed; and for subsequent fiscal years for which the
State is applying for a grant, the annual report as required by
Sec. 96.130(e) and any amendment to the law described in
Sec. 96.130(b).
* * * * *
(g) * * *
(21) a description of the strategies to be utilized by the State
for enforcing the law required by section 96.130(b);
* * * * *
Sec. 96.123 [Amended]
3. Section 96.123 is amended to add paragraph (a)(5) to read as
follows:
(a) * * *
* * * * *
(5) The State has a law in effect making it illegal to sell or
distribute tobacco products to minors as provided in Sec. 96.130(b),
will conduct annual, unannounced inspections as prescribed in
Sec. 96.130, and will enforce such law in a manner that can reasonably
be expected to reduce the extent to which tobacco products are
available to individuals under the age of 18;
* * * * *
4. Section 96.130 is added to read as follows:
Sec. 96.130 State law regarding sale of tobacco products to
individuals under age of 18.
(a) For purposes of this section, the term ``first applicable
fiscal year'' means fiscal year 1994, except in the case of any State
described in section 1926(a)(2) of the PHS Act, in which case ``first
applicable fiscal year'' means fiscal year 1995. The term ``outlet'' is
any location which sells at retail or otherwise distributes tobacco
products to consumers including (but not limited to) locations that
sell such products over-the-counter or through vending machines.
(b) The Secretary may make a grant to a State only if the State,
for the first applicable fiscal year and subsequent fiscal years, has
in effect a law providing that it is unlawful for any manufacturer,
retailer, or distributor of tobacco products to sell or distribute any
such product to any individual under age 18 through any sales or
distribution outlet, including over-the-counter and vending machine
sales.
(c) For the first and second applicable fiscal years, the State
shall, at a minimum, conduct annually a reasonable number of random,
unannounced inspections of outlets to ensure compliance with the law
and plan and begin to implement any other actions which the State
believes are necessary to enforce the law.
(d) For the third and subsequent fiscal years, the States shall do
the following:
(1) The State shall conduct annual, random, unannounced inspections
of both over-the-counter and vending machine outlets. The random
inspections shall cover a range of outlets (not preselected on the
basis of prior violations) to measure overall levels of compliance as
well as to identify violations.
(2) Random, unannounced inspections shall be conducted annually to
ensure compliance with the law and shall be conducted in such a way as
to provide a probability sample of outlets. The sample must reflect the
distribution of the population under age 18 throughout the State and
the distribution of the outlets throughout the State accessible to
youth.
(e) The State shall annually submit to the Secretary with its
application a report which shall include the following:
(1) a detailed description of the State's activities to enforce the
law required in paragraph (b) of this section during the fiscal year
preceding the fiscal year for which that State is seeking the grant;
(2) a detailed description regarding the overall success the State
has achieved during the previous fiscal year in reducing the
availability of tobacco products to individuals under the age of 18,
including the results of the unannounced inspections as provided by
paragraph (d) of this section for which the results of over-the-counter
and vending machine outlet inspections shall be reported separately;
(3) a detailed description of how the unannounced inspections were
conducted and the methods used to identify outlets;
(4) the strategies to be utilized by the State for enforcing such
law during the fiscal year for which the grant is sought; and
(5) the identity of the agency or agencies designated by the
Governor to be responsible for the implementation of the requirements
of section 1926 of the PHS Act.
(f) Beginning in the second applicable fiscal year, the annual
report required under paragraph (e) of this section shall be made
public within the State, along with the State plan as provided in
section 1941 of the PHS Act.
(g) Beginning with applications for the fourth applicable fiscal
year and all subsequent fiscal years, the Secretary will negotiate with
the State, as part of the State's plan, the interim performance target
the State will meet for that fiscal year and in subsequent years will
seek evidence of progress toward achieving or surpassing a performance
objective in which the inspection failure rate would be no more than
20% within several years.
(h) Beginning with the second applicable fiscal year and all
subsequent fiscal years, the Secretary shall make a determination,
before making a Block Grant to a State for that fiscal year, whether
the State reasonably enforced its law in the previous fiscal year
pursuant to this section. In making this determination, the Secretary
will consider the following factors:
(1) During the first and second applicable fiscal years, the State
must conduct the activities prescribed in paragraph (c) of this
section.
(2) During the third applicable fiscal year, the State must conduct
random, unannounced inspections in accordance with paragraph (d) of
this section.
(3) During the fourth and all subsequent applicable fiscal years,
the State must do the following:
[[Page 1509]]
(i) conduct random, unannounced inspections in accordance with
paragraph (d); and
(ii) except as provided by paragraph (h)(4) of this section, the
State must be in substantial compliance with the target negotiated with
the Secretary under paragraph (g) of this section for that fiscal year.
(4) If a State has not substantially complied with the target as
prescribed under paragraph (h)(3)(ii) of this section for any fiscal
year, the Secretary, in extraordinary circumstances, may consider a
number of factors, including survey data showing that the State is
making significant progress toward reducing use of tobacco products by
children and youth, data showing that the State has progressively
decreased the availability of tobacco products to minors, the
composition of the outlets inspected as to whether they were over-the-
counter or vending machine outlets, and the State's plan for improving
the enforcement of the law in the next fiscal year.
(i) If, after notice to the State and an opportunity for a hearing,
the Secretary determines under paragraph (h) of this section that the
State has not maintained compliance, the Secretary will reduce the
amount of the allotment in such amounts as is required by section
1926(c) of the PHS Act.
(j) States may not use the Block Grant to fund the enforcement of
their statute, except that they may expend funds from the primary
prevention setaside of their Block Grant allotment under 45 CFR
96.124(b)(1) for carrying out the administrative aspects of the
requirements such as the development of the sample design and the
conducting of the inspections.
[FR Doc. 96-467 Filed 1-18-96; 8:45 am]
BILLING CODE 4160-20-M
