DIVERSION OF CERTAIN PRECURSOR CHEMICALS.

SEC. 401. DIVERSION OF CERTAIN PRECURSOR CHEMICALS. (a) In General.—Section 102(39) of the Controlled Substances Act (21 U.S.C. 802(39)) is amended— 110 STAT. 3107 (1) in subparagraph (A)(iv)(I)(aa), by striking “as” through the semicolon and inserting “,pseudoephedrine or its salts, optical isomers, or salts of optical isomers, or phenylpropanolamine or its salts, optical isomers, or salts of optical isomers unless otherwise provided by regulation of the Attorney General issued pursuant to section 204(e) of this title;”; and (2) in subparagraph (A)(iv)(II), by inserting “, pseudoephedrine, phenylpropanolamine,” after “ephedrine”. (b) Legitimate Retailers.—Section 102 of the Controlled Substances Act (21 U.S.C. 802) is amended— (1) in paragraph (39)(A)(iv)(I)(aa), by adding before the semicolon the following: “; except that any sale of ordinary over-the-counter pseudoephedrine or phenylpropanolamine products by retail distributors shall not be a regulated transaction (except as provided in section 401(d) of the Comprehensive Methamphetamine Control Act of 1996)”; (2) in paragraph (39)(A)(iv)(II), by adding before the semicolon the following: “, except that the threshold for any sale of products containing pseudoephedrine or phenylpropanolamine products by retail distributors or by distributors required to submit reports by section 310(b)(3) of this title shall be 24 grams of pseudoephedrine or 24 grams of phenylpropanolamine in a single transaction”; (3) by redesignating paragraph (43) relating to felony drug offense as paragraph (44); and (4) by adding at the end the following: “(45) The term ‘ordinary over-the-counter pseudoephedrine or phenylpropanolamine product’ means any product containing pseudoephedrine or phenylpropanolamine that is— “(A) regulated pursuant to this title; and “(B) (i) except for liquids, sold in package sizes of not more than 3.0 grams of pseudoephedrine base or 3.0 grams of phenylpropanolamine base, and that is packaged in blister packs, each blister containing not more than two dosage units, or where the use of blister packs is technically infeasible, that is packaged in unit dose packets or pouches; and “(ii) for liquids, sold in package sizes of not more than 3.0 grams of pseudoephedrine base or 3.0 grams of phenylpropanolamine base. “(46) (A) The term ‘retail distributor’ means a grocery store, general merchandise store, drug store, or other entity or person whose activities as a distributor relating to pseudoephedrine or phenylpropanolamine products are limited almost exclusively to sales for personal use, both in number of sales and volume of sales, either directly to walk-in customers or in face-to-face transactions by direct sales. “(B) For purposes of this paragraph, sale for personal use means the sale of below-threshold quantities in a single transaction to an individual for legitimate medical use. “(C) For purposes of this paragraph, entities are defined by reference to the Standard Industrial Classification (SIC) code, as follows: “(i) A grocery store is an entity within SIC code 5411. “(ii) A general merchandise store is an entity within SIC codes 5300 through 5399 and 5499. “(iii) A drug store is an entity within SIC code 5912.”. 110 STAT. 3108 (c) Reinstatement of Legal Drug Exemption—Section 204 of the Controlled Substances Act (21 U.S.C. 814) is amended by adding at the end the following new subsection: “(e) Reinstatement of Exemption With Respect to Ephedrine, Pseudoephedrine, and Phenylpropanolamine Drug Products.—Pursuant to subsection (d)(1), the Attorney General shall by regulation reinstate the exemption with respect to a particular ephedrine, pseudoephedrine, or phenylpropanolamine drug product if the Attorney General determines that the drug product is manufactured and distributed in a manner that prevents diversion. In making this determination the Attorney General shall consider the factors listed in subsection (d)(2). Any regulation issued pursuant to this subsection may be amended or revoked based on the factors listed in subsection (d)(4).”. (d) Regulation of Retail Sales.— (1) Pseudoephedrine.— (A) Limit.— (i) In general.—Not sooner than the effective date of this section and subject to the requirements of clause (ii), the Attorney General may establish by regulation a single-transaction limit of 24 grams of pseudoephedrine base for retail distributors. Notwithstanding any other provision of law, the single-transaction threshold quantity for pseudoephedrine-containing compounds may not be lowered beyond that established in this paragraph. (ii) Conditions.—In order to establish a single-transaction limit of 24 grams of pseudoephedrine base, the Attorney General shall establish, following notice, comment, and an informal hearing that since the date of enactment of this Act there are a significant number of instances where ordinary over-the-counter pseudoephedrine products as established in paragraph (45) of section 102 of the Controlled Substances Act (21 U.S.C. 802(45)), as added by this Act, sold by retail distributors as established in paragraph (46) in section 102 of the Controlled Substances Act (21 U.S.C. 802(46)), are being widely used as a significant source of precursor chemicals for illegal manufacture of a controlled substance for distribution or sale. (B) Violation.—Any individual or business that violates the thresholds established in this paragraph shall, with respect to the first such violation, receive a warning letter from the Attorney General and, if a business, the business shall be required to conduct mandatory education of the sales employees of the firm with regard to the legal sales of pseudoephedrine. For a second violation occurring within 2 years of the first violation, the business or individual shall be subject to a civil penalty of not more than $5,000. For any subsequent violation occurring within 2 years of the previous violation, the business or individual shall be subject to a civil penalty not to exceed the amount of the previous civil penalty plus $5,000. (2) Phenylpropanolamine.— (A) Limit.— (i) In general.—Not sooner than the effective date of this section and subject to the requirements of clause 110 STAT. 3109(ii), the Attorney General may establish by regulation a single-transaction limit of 24 grams of phenylpropanolamine base for retail distributors. Notwithstanding any other provision of law, the single-transaction threshold quantity for phenylpropanolamine-containing compounds may not be lowered beyond that established in this paragraph. (ii) Conditions.—In order to establish a single-transaction limit of 24 grams of phenylpropanolamine base, the Attorney General shall establish, following notice, comment, and an informal hearing, that since the date of enactment of this Act there are a significant number of instances where ordinary over-the-counter phenylpropanolamine products as established in paragraph (45) of section 102 of the Controlled Substances Act (21 U.S.C. 802(45)), as added by this Act, sold by retail distributors as established in paragraph (46) in section 102 of the Controlled Substances Act (21 U.S.C. 802(46)), are being used as a significant source of precursor chemicals for illegal manufacture of a controlled substance in bulk. (B) Violation.—Any individual or business that violates the thresholds established in this paragraph shall, with respect to the first such violation, receive a warning letter from the Attorney General and, if a business, the business shall be required to conduct mandatory education of the sales employees of the firm with regard to the legal sales of pseudoephedrine. For a second violation occurring within 2 years of the first violation, the business or individual shall be subject to a civil penalty of not more than $5,000. For any subsequent violation occurring within 2 years of the previous violation, the business or individual shall be subject to a civil penalty not to exceed the amount of the previous civil penalty plus $5,000. (3) Significant number of instances.— (A) In general.—For purposes of this subsection, isolated or infrequent use, or use in insubstantial quantities, of ordinary over-the-counter pseudoephedrine or phenylpropanolamine, as defined in section 102(45) of the Controlled Substances Act, as added by section 401(b) of this Act, and sold at the retail level for the illicit manufacture of methamphetamine or amphetamine may not be used by the Attorney General as the basis for establishing the conditions under paragraph (1)(A)(ii) of this subsection, with respect to pseudoephedrine, and paragraph (2)(A)(ii) of this subsection, with respect to phenylpropanolamine. (B) Considerations and report.—The Attorney General shall— (i) in establishing a finding under paragraph (1)(A)(ii) or (2)(A)(ii) of this subsection, consult with the Secretary of Health and Human Services in order to consider the effects on public health that would occur from the establishment of new single transaction limits as provided in such paragraph; and (ii) upon establishing a finding, transmit a report to the Committees on the Judiciary in both, respectively, the House of Representatives and the Senate 110 STAT. 3110in which the Attorney General will provide the factual basis for establishing the new single transaction limits. (4) Definition of business.—For purposes of this subsection, the term “business” means the entity that makes the direct sale and does not include the parent company of a business not involved in a direct sale regulated by this subsection. (5) Judicial review.—Any regulation promulgated by the Attorney General under this section shall be subject to judicial review pursuant to section 507 of the Controlled Substances Act (21 U.S.C. 877). (e) Effect on Thresholds.—Nothing in the amendments made by subsection (b) or the provisions of subsection (d) shall affect the authority of the Attorney General to modify thresholds (including cumulative thresholds) for retail distributors for products other than ordinary over-the-counter pseudoephedrine or phenylpropanolamine products (as defined in section 102(45) of the Controlled Substances Act, as added by this section) or for non-retail distributors, importers, or exporters. (f) Combination Ephedrine Products.— (1) In general.—For the purposes of this section, combination ephedrine products shall be treated the same as pseudoephedrine products, except that— (A) a single transaction limit of 24 grams shall be effective as of the date of enactment of this Act and shall apply to sales of all combination ephedrine products, notwithstanding the form in which those products are packaged, made by retail distributors or distributors required to submit a report under section 310(b)(3) of the Controlled Substances Act (as added by section 402 of this Act); (B) for regulated transactions for combination ephedrine products other than sales described in subparagraph (A), the transaction limit shall be— (i) 1 kilogram of ephedrine base, effective on the date of enactment of this Act; or (ii) a threshold other than the threshold described in clause (i), if established by the Attorney General not earlier than 1 year after the date of enactment of this Act; and (C) the penalties provided in subsection (d)(1)(B) of this section shall take effect on the date of enactment of this Act for any individual or business that violates the single transaction limit of 24 grams for combination ephedrine products. (2) Definition.—For the purposes of this section, the term “combination ephedrine product” means a drug product containing ephedrine or its salts, optical isomers, or salts of optical isomers and therapeutically significant quantities of another active medicinal ingredient. (g) Effective Date of This Section.—Notwithstanding any other provision of this Act, this section shall not apply to the sale of any pseudoephedrine or phenylpropanolamine product prior to 12 months after the date of enactment of this Act, except that, on application of a manufacturer of a particular pseudoephedrine or phenylpropanolamine drug product, the Attorney General may, in her sole discretion, extend such effective date up to an additional 110 STAT. 3111six months. Notwithstanding any other provision of law, the decision of the Attorney General on such an application shall not be subject to judicial review.