Overview
Title
To amend the Federal Food, Drug, and Cosmetic Act to authorize tobacco user fee assessments for all regulated tobacco products, and for other purposes.
ELI5 AI
The H.R. 9425 bill wants to make sure all types of tobacco products have to pay a little money called "user fees" to help the government, and it plans to change how much is paid by 2028 and keep track of sales. If tobacco makers and sellers don't follow the rules or give the right numbers, they might get into trouble.
Summary AI
The H.R. 9425 bill aims to amend the Federal Food, Drug, and Cosmetic Act to allow for the assessment and collection of user fees from all tobacco products, not just certain types. It plans to increase the total amount collected in user fees, allocate fees based on the sales of various tobacco products, and ensure that manufacturers and importers provide necessary sales data to the FDA. Additionally, the bill contains provisions to implement these changes by fiscal year 2028 and to establish penalties for non-compliance with reporting requirements.
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AnalysisAI
Summary of the Bill
The proposed legislation, titled the "Tobacco User Fee Modernization Act of 2024," seeks to amend the Federal Food, Drug, and Cosmetic Act. Its primary aim is to authorize the imposition of user fees on all regulated tobacco products. The bill outlines a plan for determining these fees based on gross domestic sales and intends to adjust them annually in line with changes in the Consumer Price Index. Moreover, manufacturers and importers of tobacco products will be required to provide comprehensive sales data, and measures will be implemented to ensure fees continue being collected until relevant regulations are finalized by 2027.
Significant Issues
One prominent issue is the complex language used to explain how user fees are calculated, which may create challenges for industry stakeholders in understanding their financial obligations. Additionally, the obligation for manufacturers and importers to supply extensive identification information raises privacy and data security concerns. The process outlined for reallocating fees could also lead to financial disputes if the term "partial class" isn't clearly defined. Furthermore, the memorandum of understanding concerning data sharing between federal agencies might breach confidentiality and privacy safeguards. Lastly, the term "gross domestic sales" excludes taxes, duties, and fees but the bill does not provide a clear rationale for this exclusion, potentially leading to confusion.
Impact on the Public
This bill could have diverse impacts on the general public. By imposing fees on all tobacco products, it may lead to increased costs for tobacco products, which could be passed on to consumers. While this might serve to discourage tobacco use and promote public health, it might also increase financial pressure on individuals who continue consuming these products. Moreover, the allocation of these fees could support public health initiatives by providing increased funding for tobacco control programs.
Impact on Specific Stakeholders
For tobacco product manufacturers and importers, the bill could introduce significant compliance burdens due to its requirements for detailed data submissions and the potentially complex calculations of fees. This could necessitate additional administrative overhead, potentially increasing business operational costs. Stakeholders might also be concerned about data privacy given the level of detail required and the possibility of inter-agency data sharing.
From a regulatory perspective, this bill empowers the Food and Drug Administration (FDA) to extend its oversight and ensure consistent fee collection, enhancing the agency's resources to regulate tobacco products more effectively. However, the requirement for timely updates to regulations could strain FDA resources if not adequately managed.
In conclusion, while the "Tobacco User Fee Modernization Act of 2024" could have positive health impacts by potentially reducing tobacco consumption, the bill may introduce challenges related to compliance, privacy, and fiscal planning for industry stakeholders. It will be important to communicate any regulatory changes effectively to ensure an understanding of the new financial and administrative responsibilities placed on these businesses.
Financial Assessment
In reviewing the financial aspects of the proposed H.R. 9425 bill, we see several key areas where money is addressed directly. This bill seeks to amend existing laws to establish user fees for a broader range of tobacco products, with specific financial figures and allocation methods outlined.
Financial Allocations and Increases
The bill allocates specific amounts to be collected as user fees from tobacco manufacturers and importers. For fiscal years 2019 through 2024, the amount is set at $712,000,000. This figure increases to $826,200,000 for fiscal year 2025. For fiscal year 2026 and each subsequent fiscal year, the amount is to be increased according to changes in the Consumer Price Index for all urban consumers. This clearly indicates a plan to escalate the financial pipeline based on inflationary trends to maintain purchasing power and service coverage of these fees over time.
Relationship to Identified Issues
The section that details the increase in total amounts indicates a structured and systematic approach to fee assessment. However, stakeholders might find this approach complex due to the unclear language around specific classes of tobacco products, which could lead to confusion in calculations of these user fees. The increase itself could also be challenging for smaller stakeholders who may not have anticipated the rise in fees.
Another point of financial concern is the requirement for manufacturers and importers to provide detailed sales data. While this is necessary for accurate fee assessments based on domestic sales, it introduces potential privacy concerns. Companies may hesitate to disclose extensive identification information for fear of data breaches or misuse. Additionally, any failure to finalize the necessary regulations for other tobacco products could result in fiscal uncertainties.
Allocation and Reallocation of Fees
The bill outlines how fees should be allocated, noting specifically that the percentage share will depend on gross domestic sales for each tobacco product class. The definition of "gross domestic sales" excludes taxes, duties, and fees, which might cause confusion among stakeholders. Clear guidance and examples would help stakeholders understand how sales revenue is calculated for fee assessments.
The reallocation clause provides a mechanism for redistributing fees related to classes of products not initially listed, ensuring that no class of tobacco products is financially favored over others. This process for reallocating fees might cause disputes if definitions are not clear, influencing the financial responsibilities of those involved. Any lack of clarity could lead to legal challenges and administrative burdens.
Planning and Financial Impact
Finally, the provision requiring fees to be assessed equally across fiscal quarters could present financial planning challenges for manufacturers. If not communicated adequately, this might disrupt budgeting efforts and cash flow management, causing unforeseen financial strain.
Overall, while the bill aims to standardize and modernize user fee assessments, it introduces complexities that need careful management and clear communication to ensure that fiscal objectives are achieved without undue burden on stakeholders.
Issues
The complex language regarding the calculation of user fees for tobacco products in Section 2(b)(2)(A)(ii) may be challenging for stakeholders to understand, potentially leading to misunderstandings or miscalculations.
The requirement in Section 2(c)(1)(D)(II) for manufacturers and importers to provide extensive identification information can be seen as burdensome, raising privacy and data security concerns.
The process for reallocating fees in Section 2(e) could lead to disputes if the definition of 'partial class' is not clear, potentially affecting financial responsibilities of manufacturers and importers.
The memorandum of understanding provision in Section 2(g) could generate concerns about data sharing and confidentiality between federal agencies, impacting privacy safeguards.
The term 'gross domestic sales' in Section 2(h) is defined to exclude taxes, duties, and fees, but lacks specific justification or explanation, leading to potential confusion about how the definition applies.
The provision in Section 2(j)(2) for assessing fees equally across fiscal quarters could disrupt financial planning for manufacturers if not clearly communicated in advance.
Sections
Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.
1. Short title Read Opens in new tab
Summary AI
The first section of the bill states that the law can be officially called the “Tobacco User Fee Modernization Act of 2024.”
2. Tobacco product user fees Read Opens in new tab
Summary AI
The section amends the Federal Food, Drug, and Cosmetic Act to increase and apply user fees to all tobacco products, aligning fees with gross domestic sales and adjusting them based on the Consumer Price Index. It also requires manufacturers and importers to submit detailed sales data and ensures the continuous collection of fees until regulations are finalized, with new allocations and reporting requirements effective from 2027.
Money References
- (a) Increase in total amount.—Section 919(b)(1) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 387s(b)(1)) is amended by striking subparagraph (K) and inserting the following: “(K) For each of fiscal years 2019 through 2024, $712,000,000. “(L) For fiscal year 2025, $826,200,000. “(M) For fiscal year 2026 and each subsequent fiscal year, the amount that was applicable for the previous fiscal year, increased by the total percentage change that occurred in the Consumer Price Index for all urban consumers (all items; United States city average) for the 12-month period ending June 30 preceding the fiscal year.”.
- (h) Definitions.—Section 919(b) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 387s(b)) is amended by adding at the end the following: “(8) DEFINITIONS.—For purposes of this subsection: “(A) The term ‘gross domestic sales’ means the total amount in dollars, not to include taxes, duties, and fees, of the sale by manufacturers and importers of finished tobacco products in the United States.