Overview
Title
To apply user fees with respect to tobacco products deemed subject to the requirements of chapter IX of the Federal Food, Drug, and Cosmetic Act.
ELI5 AI
The bill wants tobacco companies to pay fees, which grow bigger each year, based on how much they sell. These fees help teach people about the dangers of tobacco, especially to stop kids from trying vaping.
Summary AI
The bill S. 3653 aims to apply user fees to all tobacco products that are subject to the Federal Food, Drug, and Cosmetic Act. It proposes an increase in total user fees and plans to include all types of tobacco products in the fee structure by fiscal year 2027, based on their market sales. The bill also requires manufacturers to submit sales data and obligates the Secretary of Health and Human Services to provide annual reports detailing expenditures and progress related to the regulation of these products. Additionally, it stresses the importance of education campaigns to prevent youth vaping.
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AnalysisAI
General Summary of the Bill
The bill, titled "Resources To Prevent Youth Vaping Act," introduced in the U.S. Senate, aims to regulate user fees concerning tobacco products under the Federal Food, Drug, and Cosmetic Act. Specifically, it seeks to increase and assess these fees more broadly across different classes of tobacco products. The legislation amends prior fiscal allocations, and from 2027 onwards, introduces a new formula for determining fees based on domestic sales data of tobacco products. The bill also mandates annual reporting by Health and Human Services on fee utilization, focusing on compliance, public education, and research activities.
Summary of Significant Issues
Several issues arise from this bill. The methodology used to determine "gross domestic sales" for tobacco product assessment is unclear, potentially leading to disputes and inconsistencies in fee calculations. Furthermore, the removal of certain provisions under the Federal Food, Drug, and Cosmetic Act without clear justification could impede financial transparency and accountability. Moreover, the criteria for ensuring adequate funding allocation towards youth e-cigarette education campaigns are vaguely defined, which could result in an improper allocation of resources. Additionally, frequent data submissions required from tobacco manufacturers might impose administrative burdens, affecting their operations. Lastly, the report required by the bill lacks performance metrics to evaluate spending efficiency, raising concerns about potential inefficiencies within the regulating body.
Broader Public Impact
This legislation intends to bolster efforts against youth vaping by increasing resources for education campaigns and compliance enforcement. For the general public, this signifies a proactive step toward addressing public health issues associated with tobacco use, particularly among youth. The collection of user fees from a wider array of tobacco products could potentially generate substantial funds earmarked for public education and health initiatives, ideally reducing tobacco-related harm over time.
Impact on Specific Stakeholders
For tobacco manufacturers and importers, the bill presents further regulatory obligations. The requirement for frequent and detailed reporting on sales could increase operational overheads and compliance costs. The imposition of additional fees might reverberate through the market, possibly affecting product pricing structures. On the positive side, clearer regulations and educational campaigns might contribute to a more informed consumer base, potentially leading to reduced usage and a healthier populace over time.
For regulatory agencies, primarily the FDA, the availability of increased funding might enhance their capability to oversee and manage public health policies more effectively. However, without robust performance metrics and clear expenditure guidelines, there's a risk of mismanaging resources or failing to meet public health objectives efficiently. The collaborative measures with other federal agencies through a memorandum of understanding could be a positive development, depending on its implementation and impact on regulatory processes.
In summary, the bill's focus on addressing youth vaping through better use of resources is essential. However, the effectiveness of such measures hinges on transparent implementation, clear guidelines, and evaluation metrics to ensure accountable use of public funds.
Financial Assessment
The bill S. 3653 introduces several financial changes related to user fees on tobacco products under the Federal Food, Drug, and Cosmetic Act. Here, we discuss how money is referenced and allocated in the bill and how these financial aspects interact with identified issues.
Financial Summary
The bill proposes to increase user fees applied to tobacco products. Specifically, it sets a target of $812,000,000 for the fiscal year 2025 and then introduces a mechanism to adjust this amount annually by the change in the Consumer Price Index for all urban consumers. For fiscal years 2019 through 2024, the user fees amounted to $712,000,000.
Additionally, the bill stipulates the extension of user fees to all classes of tobacco products by fiscal year 2027. This expansion ties the amount of the user fees to the gross domestic sales of each class of tobacco products, thus linking the financial intake directly to the market performance of these products.
Relation to Identified Issues
Ambiguity in 'Gross Domestic Sales' Calculation: The bill references gross domestic sales as a basis for fee assessments starting in 2027. However, the lack of clear methodology could lead to disputes or inconsistencies. A standardized method for determining these sales figures is crucial for maintaining transparency and financial accountability.
Adjustments and Complexity of Financial Deductions: The fiscal adjustments for user fees from 2027 onwards involve a complex calculation, including deductions for fees already collected. The intricate nature of these calculations could lead to confusion or misapplication unless simplified or elaborated in the regulations.
Deletion of Paragraph (5) in Section 919(b): The removal of a section in the original act could impact transparency if the deleted content included critical financial oversight or justification mechanisms. Understanding the original purpose of this paragraph would determine the extent of any transparency risks.
Allocation for Public Education Campaigns: While the bill emphasizes the importance of sufficient funding for public education campaigns, it lacks specific financial criteria to ensure appropriate fund allocation. Clear guidelines would help prevent the misallocation of collected user fees meant for combating youth vaping.
Frequent Data Submissions by Manufacturers: The requirement for tobacco manufacturers to frequently submit detailed sales information may impose an administrative burden, impacting their operations. Given the financial implications, the bill could explore less frequent data requirements or streamlined submission processes.
Vague 'Other Activities' Financial Category: In the breakdown of financial expenditure, "other activities" is mentioned without specificity, which may permit broad or unspecified spending. Greater detail in categorization would enhance financial accountability and transparency.
Lack of Performance Metrics in Annual Reports: The bill mandates annual reports on spent fees, including a breakdown of expenditures. However, without specific performance metrics in these reports, assessing the effectiveness or efficiency of fund usage remains difficult.
In summary, while the bill outlines substantial user fee increases and broadens the scope of fee-applying products, there are several concerns related to the administration and transparency of these financial measures. Addressing these issues will be critical for the effective implementation of the bill's financial strategies.
Issues
The methodology and standards used by the Secretary for determining 'gross domestic sales' for tobacco products are ambiguous, potentially leading to disputes or inconsistencies. This issue is found in Section 2(b)(2)(C)(ii)(iii) and affects financial accountability and transparency.
The removal of paragraph (5) in Section 919(b) of the Federal Food, Drug, and Cosmetic Act could pose a transparency risk if its original purpose was significant for accountability. This change is articulated in Section 2(d)(1).
The lack of detailed criteria on how the FDA ensures that user fees are adequately allocated for public education campaigns on youth e-cigarette use could lead to misallocation of funds. This concern is highlighted in Section 3(b)(4).
The potential administrative burden on tobacco manufacturers and importers due to mandatory frequent data submissions could impact business operations. This is noted in Section 2(b)(2)(D).
The language regarding how user fees are adjusted for fiscal years 2027 onwards is complex, especially concerning deductions and adjustments. This is discussed in Section 2(a) and Section 2(b)(1)(A)(ii).
The term 'other activities' in Section 3(b)(1)(G) lacks specificity, allowing for vague spending categories that may not be accountable. This deficiency can impact financial transparency.
The success and enforceability of the 'Memorandum of Understanding' in collaboration with other federal agencies lack detail, which could hinder the effective implementation of user fees. This is elaborated in Section 2(d)(3).
The annual report requirement lacks specified performance metrics, potentially allowing operational inefficiencies within the FDA to persist unnoticed. This issue appears in Section 3(b).
The distinction between expenditure categories for deemed tobacco products and combustible tobacco products needs clearer guidelines to avoid inconsistencies, found in Section 3(b)(3).
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 act states that it can be called the “Resources To Prevent Youth Vaping Act.”
2. User fees Read Opens in new tab
Summary AI
The section updates the Federal Food, Drug, and Cosmetic Act to increase user fees for tobacco products from 2019 through 2026 and introduces new rules for assessing these fees from 2027 onwards. It requires manufacturers and importers to provide specific sales information, ensures broader inclusion of tobacco products under the user fees, and mentions steps to collect and allocate fees based on sales data, with changes applying fully from fiscal year 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 subparagraphs: “(K) For each of fiscal years 2019 through 2024, $712,000,000. “(L) For fiscal year 2025, $812,000,000.
- , the term ‘gross domestic sales’ means the total value in dollars of the sale or distribution by manufacturers and importers of tobacco products in the United States in classes not listed in subparagraph (B)(i), as determined based on the aggregation of sales data from every manufacturer and importer of tobacco products that submits sales data to the Secretary.
3. Annual report Read Opens in new tab
Summary AI
For each fiscal year from 2025 onwards, the Secretary of Health and Human Services must submit an annual report to specific Senate and House committees, detailing how the FDA spends fees collected under a particular section of the Federal Food, Drug, and Cosmetic Act. The report must include spending details on specific activities like compliance, public education, and research, as well as information related to tobacco product regulations and fees collected from manufacturers.