Version	Word Count	Changes From Previous Version	Percent Change
Introduced in House	11,038	n/a	n/a
Reported in House	11,995	14	12%
Engrossed in House	12,126	175	13%
Referred in Senate	12,064	5 Show Changes Hide Changes	0%

Display Version Introduced in House Reported in House Engrossed in House Referred in Senate

HR 1676 EHRFSCommentsClose CommentsPermalink

111th CONGRESSCommentsClose CommentsPermalink

1st SessionCommentsClose CommentsPermalink

H. R. 1676CommentsClose CommentsPermalink

AN ACTCommentsClose CommentsPermalink

To prevent tobacco smuggling, to ensure the collection of all tobacco taxes, and for other purposes.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE; FINDINGS; PURPOSES.

(a) Short Title- This Act may be cited as the ‘Prevent All Cigarette Trafficking Act of 2009’ or ‘PACT Act’.CommentsClose CommentsPermalink





(b) Findings- Congress finds that--CommentsClose CommentsPermalink





(1) the sale of illegal cigarettes and smokeless tobacco products significantly reduces Federal, State, and local government revenues, with Internet sales alone accounting for billions of dollars of lost Federal, State, and local tobacco tax revenue each year;CommentsClose CommentsPermalink





(2) Hezbollah, Hamas, al Qaeda, and other terrorist organizations have profited from trafficking in illegal cigarettes or counterfeit cigarette tax stamps;CommentsClose CommentsPermalink





(3) terrorist involvement in illicit cigarette trafficking will continue to grow because of the large profits such organizations can earn;CommentsClose CommentsPermalink





(4) the sale of illegal cigarettes and smokeless tobacco over the Internet, and through mail, fax, or phone orders, makes it cheaper and easier for children to obtain tobacco products;CommentsClose CommentsPermalink





(5) the majority of Internet and other remote sales of cigarettes and smokeless tobacco are being made without adequate precautions to protect against sales to children, without the payment of applicable taxes, and without complying with the nominal registration and reporting requirements in existing Federal law;CommentsClose CommentsPermalink





(6) unfair competition from illegal sales of cigarettes and smokeless tobacco is taking billions of dollars of sales away from law-abiding retailers throughout the United States;CommentsClose CommentsPermalink





(7) with rising State and local tobacco tax rates, the incentives for the illegal sale of cigarettes and smokeless tobacco have increased;CommentsClose CommentsPermalink





(8) the number of active tobacco investigations being conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives rose to 452 in 2005;CommentsClose CommentsPermalink





(9) the number of Internet vendors in the United States and in foreign countries that sell cigarettes and smokeless tobacco to buyers in the United States increased from only about 40 in 2000 to more than 500 in 2005; andCommentsClose CommentsPermalink





(10) the intrastate sale of illegal cigarettes and smokeless tobacco over the Internet has a substantial effect on interstate commerce.CommentsClose CommentsPermalink





(c) Purposes- It is the purpose of this Act to--CommentsClose CommentsPermalink





(1) require Internet and other remote sellers of cigarettes and smokeless tobacco to comply with the same laws that apply to law-abiding tobacco retailers;CommentsClose CommentsPermalink





(2) create strong disincentives to illegal smuggling of tobacco products;CommentsClose CommentsPermalink





(3) provide government enforcement officials with more effective enforcement tools to combat tobacco smuggling;CommentsClose CommentsPermalink





(4) make it more difficult for cigarette and smokeless tobacco traffickers to engage in and profit from their illegal activities;CommentsClose CommentsPermalink





(5) increase collections of Federal, State, and local excise taxes on cigarettes and smokeless tobacco; andCommentsClose CommentsPermalink





(6) prevent and reduce youth access to inexpensive cigarettes and smokeless tobacco through illegal Internet or contraband sales.CommentsClose CommentsPermalink

SEC. 2. COLLECTION OF STATE CIGARETTE AND SMOKELESS TOBACCO TAXES.

(a) Definitions- The Act of October 19, 1949 (15 U.S.C. 375 et seq.; commonly referred to as the ‘Jenkins Act’) (referred to in this Act as the ‘Jenkins Act’), is amended by striking the first section and inserting the following:CommentsClose CommentsPermalink

‘SECTION 1. DEFINITIONS.

‘As used in this Act, the following definitions apply:CommentsClose CommentsPermalink





‘(1) ATTORNEY GENERAL- The term ‘Attorney General’ means the Attorney General of the United States.CommentsClose CommentsPermalink





‘(2) ATTORNEY GENERAL- The term ‘attorney general’, with respect to a State, means the attorney general or other chief law enforcement officer of the State.CommentsClose CommentsPermalink





‘(3) CIGARETTE-CommentsClose CommentsPermalink





‘(A) IN GENERAL- For purposes of this Act, the term ‘cigarette’ shall--CommentsClose CommentsPermalink





‘(i) have the same meaning given that term in section 2341 of title 18, United States Code; andCommentsClose CommentsPermalink





‘(ii) include ‘roll-your-own tobacco’ (as that term is defined in section 5702 of the Internal Revenue Code of 1986).CommentsClose CommentsPermalink





‘(B) EXCEPTION- For purposes of this Act, the term ‘cigarette’ does not include a ‘cigar’, as that term is defined in section 5702 of the Internal Revenue Code of 1986.CommentsClose CommentsPermalink





‘(4) COMMON CARRIER- The term ‘common carrier’ means any person (other than a local messenger service or the United States Postal Service) that holds itself out to the general public as a provider for hire of the transportation by water, land, or air of merchandise, whether or not the person actually operates the vessel, vehicle, or aircraft by which the transportation is provided, between a port or place and a port or place in the United States.CommentsClose CommentsPermalink





‘(5) CONSUMER- The term ‘consumer’ means any person that purchases cigarettes or smokeless tobacco, but does not include any person lawfully operating as a manufacturer, distributor, wholesaler, or retailer of cigarettes or smokeless tobacco.CommentsClose CommentsPermalink





‘(6) DELIVERY SALE- The term ‘delivery sale’ means any sale of cigarettes or smokeless tobacco to a consumer if--CommentsClose CommentsPermalink





‘(A) the consumer submits the order for such sale by means of a telephone or other method of voice transmission, the mails, or the Internet or other online service, or the seller is otherwise not in the physical presence of the buyer when the request for purchase or order is made; orCommentsClose CommentsPermalink





‘(B) the cigarettes or smokeless tobacco are delivered to the buyer by common carrier, private delivery service, or other method of remote delivery, or the seller is not in the physical presence of the buyer when the buyer obtains possession of the cigarettes or smokeless tobacco.CommentsClose CommentsPermalink





‘(7) DELIVERY SELLER- The term ‘delivery seller’ means a person who makes a delivery sale.CommentsClose CommentsPermalink





‘(8) INDIAN COUNTRY- The term ‘Indian country’ means--CommentsClose CommentsPermalink





‘(A) Indian country as defined in section 1151 of title 18, United States Code, except that within the State of Alaska that term applies only to the Metlakatla Indian Community, Annette Island Reserve; andCommentsClose CommentsPermalink





‘(B) any other land held by the United States in trust or restricted status for one or more Indian tribes.CommentsClose CommentsPermalink





‘(9) INDIAN TRIBE- The term ‘Indian tribe’, ‘tribe’, or ‘tribal’ refers to an Indian tribe as defined in section 4(e) of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b(e)) or as listed pursuant to section 104 of the Federally Recognized Indian Tribe List Act of 1994 (25 U.S.C. 479a-1).CommentsClose CommentsPermalink





‘(10) INTERSTATE COMMERCE- The term ‘interstate commerce’ means commerce between a State and any place outside the State, commerce between a State and any Indian country in the State, or commerce between points in the same State but through any place outside the State or through any Indian country.CommentsClose CommentsPermalink





‘(11) INTO A STATE, PLACE, OR LOCALITY- A sale, shipment, or transfer of cigarettes or smokeless tobacco that is made in interstate commerce, as defined herein, shall be deemed to have been made into the State, place, or locality in which such cigarettes or smokeless tobacco are delivered.CommentsClose CommentsPermalink





‘(12) PERSON- The term ‘person’ means an individual, corporation, company, association, firm, partnership, society, State government, local government, Indian tribal government, governmental organization of such government, or joint stock company.CommentsClose CommentsPermalink





‘(13) STATE- The term ‘State’ means each of the several States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, or any territory or possession of the United States.CommentsClose CommentsPermalink





‘(14) SMOKELESS TOBACCO- The term ‘smokeless tobacco’ means any finely cut, ground, powdered, or leaf tobacco, or other product containing tobacco, that is intended to be placed in the oral or nasal cavity or otherwise consumed without being combusted.CommentsClose CommentsPermalink





‘(15) TOBACCO TAX ADMINISTRATOR- The term ‘tobacco tax administrator’ means the State, local, or tribal official duly authorized to collect the tobacco tax or administer the tax law of a State, locality, or tribe, respectively.CommentsClose CommentsPermalink





‘(16) TRIBAL ENTERPRISE- The term ‘tribal enterprise’ means any business enterprise, incorporated or unincorporated under Federal or tribal law, of an Indian tribe or group of Indian tribe.CommentsClose CommentsPermalink





‘(17) USE- The term ‘use’, in addition to its ordinary meaning, means the consumption, storage, handling, or disposal of cigarettes or smokeless tobacco.’.CommentsClose CommentsPermalink





(b) Reports to State Tobacco Tax Administrators- Section 2 of the Jenkins Act (15 U.S.C. 376) is amended--CommentsClose CommentsPermalink





(1) by striking ‘cigarettes’ each place it appears and inserting ‘cigarettes or smokeless tobacco’;CommentsClose CommentsPermalink





(2) in subsection (a)--CommentsClose CommentsPermalink





(A) in the matter preceding paragraph (1)--CommentsClose CommentsPermalink





(i) by inserting ‘Contents- ’ after ‘(a)’;CommentsClose CommentsPermalink





(ii) by striking ‘or transfers’ and inserting ‘, transfers, or ships’;CommentsClose CommentsPermalink





(iii) by inserting ‘, locality, or Indian country of an Indian tribe’ after ‘a State’;CommentsClose CommentsPermalink





(iv) by striking ‘to other than a distributor licensed by or located in such State,’; andCommentsClose CommentsPermalink





(v) by striking ‘or transfer and shipment’ and inserting ‘, transfer, or shipment’;CommentsClose CommentsPermalink





(B) in paragraph (1)--CommentsClose CommentsPermalink





(i) by striking ‘with the tobacco tax administrator of the State’ and inserting ‘with the Attorney General and with the tobacco tax administrators of the State and place’; andCommentsClose CommentsPermalink





(ii) by striking ‘; and’ and inserting the following: ‘, as well as telephone numbers for each place of business, a principal electronic mail address, any website addresses, and the name, address, and telephone number of an agent in the State authorized to accept service on behalf of such person;’;CommentsClose CommentsPermalink





(C) in paragraph (2), by striking ‘and the quantity thereof.’ and inserting ‘the quantity thereof, and the name, address, and phone number of the person delivering the shipment to the recipient on behalf of the delivery seller, with all invoice or memoranda information relating to specific customers to be organized by city or town and by zip code; and’; andCommentsClose CommentsPermalink





(D) by adding at the end the following:CommentsClose CommentsPermalink





‘(3) with respect to each memorandum or invoice filed with a State under paragraph (2), also file copies of such memorandum or invoice with the tobacco tax administrators and chief law enforcement officers of the local governments and Indian tribes operating within the borders of the State that apply their own local or tribal taxes on cigarettes or smokeless tobacco.’;CommentsClose CommentsPermalink





(3) in subsection (b)--CommentsClose CommentsPermalink





(A) by inserting ‘Presumptive Evidence- ’ after ‘(b)’;CommentsClose CommentsPermalink





(B) by striking ‘(1) that’ and inserting ‘that’; andCommentsClose CommentsPermalink





(C) by striking ‘, and (2)’ and all that follows and inserting a period; andCommentsClose CommentsPermalink





(4) by adding at the end the following:CommentsClose CommentsPermalink





‘(c) Use of Information- A tobacco tax administrator or chief law enforcement officer who receives a memorandum or invoice under paragraph (2) or (3) of subsection (a) shall use such memorandum or invoice solely for the purposes of the enforcement of this Act and the collection of any taxes owed on related sales of cigarettes and smokeless tobacco, and shall keep confidential any personal information in such memorandum or invoice except as required for such purposes.’.CommentsClose CommentsPermalink





(c) Requirements for Delivery Sales- The Jenkins Act is amended by inserting after section 2 the following:CommentsClose CommentsPermalink

‘SEC. 2A. DELIVERY SALES.

‘(a) In General- With respect to delivery sales into a specific State and place, each delivery seller shall comply with--CommentsClose CommentsPermalink





‘(1) the shipping requirements set forth in subsection (b);CommentsClose CommentsPermalink





‘(2) the recordkeeping requirements set forth in subsection (c);CommentsClose CommentsPermalink





‘(3) all State, local, tribal, and other laws generally applicable to sales of cigarettes or smokeless tobacco as if such delivery sales occurred entirely within the specific State and place, including laws imposing--CommentsClose CommentsPermalink





‘(A) excise taxes;CommentsClose CommentsPermalink





‘(B) licensing and tax-stamping requirements;CommentsClose CommentsPermalink





‘(C) restrictions on sales to minors; andCommentsClose CommentsPermalink





‘(D) other payment obligations or legal requirements relating to the sale, distribution, or delivery of cigarettes or smokeless tobacco; andCommentsClose CommentsPermalink





‘(4) the tax collection requirements set forth in subsection (d).CommentsClose CommentsPermalink





‘(b) Shipping and Packaging-CommentsClose CommentsPermalink





‘(1) REQUIRED STATEMENT- For any shipping package containing cigarettes or smokeless tobacco, the delivery seller shall include on the bill of lading, if any, and on the outside of the shipping package, on the same surface as the delivery address, a clear and conspicuous statement providing as follows: ‘CIGARETTES/SMOKELESS TOBACCO: FEDERAL LAW REQUIRES THE PAYMENT OF ALL APPLICABLE EXCISE TAXES, AND COMPLIANCE WITH APPLICABLE LICENSING AND TAX-STAMPING OBLIGATIONS’.CommentsClose CommentsPermalink





‘(2) FAILURE TO LABEL- Any shipping package described in paragraph (1) that is not labeled in accordance with that paragraph shall be treated as nondeliverable matter by a common carrier or other delivery service, if the common carrier or other delivery service knows or should know the package contains cigarettes or smokeless tobacco. If a common carrier or other delivery service believes a package is being submitted for delivery in violation of paragraph (1), it may require the person submitting the package for delivery to establish that it is not being sent in violation of paragraph (1) before accepting the package for delivery. Nothing in this paragraph shall require the common carrier or other delivery service to open any package to determine its contents.CommentsClose CommentsPermalink





‘(3) WEIGHT RESTRICTION- A delivery seller shall not sell, offer for sale, deliver, or cause to be delivered in any single sale or single delivery any cigarettes or smokeless tobacco weighing more than 10 pounds.CommentsClose CommentsPermalink





‘(4) AGE VERIFICATION-CommentsClose CommentsPermalink





‘(A) IN GENERAL- A delivery seller who mails or ships tobacco products--CommentsClose CommentsPermalink





‘(i) shall not sell, deliver, or cause to be delivered any tobacco products to a person under the minimum age required for the legal sale or purchase of tobacco products, as determined by the applicable law at the place of delivery;CommentsClose CommentsPermalink





‘(ii) shall use a method of mailing or shipping that requires--CommentsClose CommentsPermalink





‘(I) the purchaser placing the delivery sale order, or an adult who is at least the minimum age required for the legal sale or purchase of tobacco products, as determined by the applicable law at the place of delivery, to sign to accept delivery of the shipping container at the delivery address; andCommentsClose CommentsPermalink





‘(II) the person who signs to accept delivery of the shipping container to provide proof, in the form of a valid, government-issued identification bearing a photograph of the individual, that the person is at least the minimum age required for the legal sale or purchase of tobacco products, as determined by the applicable law at the place of delivery; andCommentsClose CommentsPermalink





‘(iii) shall not accept a delivery sale order from a person without--CommentsClose CommentsPermalink





‘(I) obtaining the full name, birth date, and residential address of that person; andCommentsClose CommentsPermalink





‘(II) verifying the information provided in subclause (I), through the use of a commercially available database or aggregate of databases, consisting primarily of data from government sources, that are regularly used by government and businesses for the purpose of age and identity verification and authentication, to ensure that the purchaser is at least the minimum age required for the legal sale or purchase of tobacco products, as determined by the applicable law at the place of delivery.CommentsClose CommentsPermalink





‘(B) LIMITATION- No database being used for age and identity verification under subparagraph (A)(iii) shall be in the possession or under the control of the delivery seller, or be subject to any changes or supplementation by the delivery seller.CommentsClose CommentsPermalink





‘(c) Records-CommentsClose CommentsPermalink





‘(1) IN GENERAL- Each delivery seller shall keep a record of any delivery sale, including all of the information described in section 2(a)(2), organized by the State, and within such State, by the city or town and by zip code, into which such delivery sale is so made.CommentsClose CommentsPermalink





‘(2) RECORD RETENTION- Records of a delivery sale shall be kept as described in paragraph (1) in the year in which the delivery sale is made and for the next 4 years.CommentsClose CommentsPermalink





‘(3) ACCESS FOR OFFICIALS- Records kept under paragraph (1) shall be made available to tobacco tax administrators of the States, to local governments and Indian tribes that apply their own local or tribal taxes on cigarettes or smokeless tobacco, to the attorneys general of the States, to the chief law enforcement officers of such local governments and Indian tribes, and to the Attorney General in order to ensure the compliance of persons making delivery sales with the requirements of this Act.CommentsClose CommentsPermalink





‘(d) Delivery-CommentsClose CommentsPermalink





‘(1) IN GENERAL- Except as provided in paragraph (2), no delivery seller may sell or deliver to any consumer, or tender to any common carrier or other delivery service, any cigarettes or smokeless tobacco pursuant to a delivery sale unless, in advance of the sale, delivery, or tender--CommentsClose CommentsPermalink





‘(A) any cigarette or smokeless tobacco excise tax that is imposed by the State in which the cigarettes or smokeless tobacco are to be delivered has been paid to the State;CommentsClose CommentsPermalink





‘(B) any cigarette or smokeless tobacco excise tax that is imposed by the local government of the place in which the cigarettes or smokeless tobacco are to be delivered has been paid to the local government; andCommentsClose CommentsPermalink





‘(C) any required stamps or other indicia that such excise tax has been paid are properly affixed or applied to the cigarettes or smokeless tobacco.CommentsClose CommentsPermalink





‘(2) EXCEPTION- Paragraph (1) does not apply to a delivery sale of smokeless tobacco if the law of the State or local government of the place where the smokeless tobacco is to be delivered requires or otherwise provides that delivery sellers collect the excise tax from the consumer and remit the excise tax to the State or local government, and the delivery seller complies with the requirement.CommentsClose CommentsPermalink





‘(e) List of Unregistered or Noncompliant Delivery Sellers-CommentsClose CommentsPermalink





‘(1) IN GENERAL-CommentsClose CommentsPermalink





‘(A) INITIAL LIST- Not later than 90 days after this subsection goes into effect under the Prevent All Cigarette Trafficking Act of 2009, the Attorney General shall compile a list of delivery sellers of cigarettes or smokeless tobacco that have not registered with the Attorney General pursuant to section 2(a), or that are otherwise not in compliance with this Act, and--CommentsClose CommentsPermalink





‘(i) distribute the list to--CommentsClose CommentsPermalink





‘(I) the attorney general and tax administrator of every State;CommentsClose CommentsPermalink





‘(II) common carriers and other persons that deliver small packages to consumers in interstate commerce, including the United States Postal Service; andCommentsClose CommentsPermalink





‘(III) any other persons who the Attorney General believes can promote the effective enforcement of this Act; andCommentsClose CommentsPermalink





‘(ii) publicize and make the list available to any other person engaged in the business of interstate deliveries or who delivers cigarettes or smokeless tobacco in or into any State.CommentsClose CommentsPermalink





‘(B) LIST CONTENTS- To the extent known, the Attorney General shall include, for each delivery seller on the list described in subparagraph (A)--CommentsClose CommentsPermalink





‘(i) all names the delivery seller uses or has used in the transaction of its business or on packages delivered to customers;CommentsClose CommentsPermalink





‘(ii) all addresses from which the delivery seller does or has done business, or ships or has shipped cigarettes or smokeless tobacco;CommentsClose CommentsPermalink





‘(iii) the website addresses, primary e-mail address, and phone number of the delivery seller; andCommentsClose CommentsPermalink





‘(iv) any other information that the Attorney General determines would facilitate compliance with this subsection by recipients of the list.CommentsClose CommentsPermalink





‘(C) UPDATING- The Attorney General shall update and distribute the list at least once every 4 months, and may distribute the list and any updates by regular mail, electronic mail, or any other reasonable means, or by providing recipients with access to the list through a nonpublic website that the Attorney General regularly updates.CommentsClose CommentsPermalink





‘(D) STATE, LOCAL, OR TRIBAL ADDITIONS- The Attorney General shall include in the list under subparagraph (A) any noncomplying delivery sellers identified by any State, local, or tribal government under paragraph (5), and shall distribute the list to the attorney general or chief law enforcement official and the tax administrator of any government submitting any such information, and to any common carriers or other persons who deliver small packages to consumers identified by any government pursuant to paragraph (5).CommentsClose CommentsPermalink





‘(E) ACCURACY AND COMPLETENESS OF LIST OF NONCOMPLYING DELIVERY SELLERS- In preparing and revising the list required by subparagraph (A), the Attorney General shall--CommentsClose CommentsPermalink





‘(i) use reasonable procedures to ensure maximum possible accuracy and completeness of the records and information relied on for the purpose of determining that such delivery seller is noncomplying;CommentsClose CommentsPermalink





‘(ii) not later than 14 days prior to including any delivery seller on such list, make a reasonable attempt to send notice to the delivery seller by letter, electronic mail, or other means that the delivery seller is being placed on such list, with that notice citing the relevant provisions of this Act and the specific reasons for being placed on such list;CommentsClose CommentsPermalink





‘(iii) provide an opportunity to such delivery seller to challenge placement on such list;CommentsClose CommentsPermalink





‘(iv) investigate each such challenge by contacting the relevant Federal, State, tribal, and local law enforcement officials, and provide the specific findings and results of such investigation to such delivery seller not later than 30 days after the challenge is made; andCommentsClose CommentsPermalink





‘(v) upon finding that any placement is inaccurate, incomplete, or cannot be verified, promptly delete such delivery seller from the list as appropriate and notify each appropriate Federal, State, tribal, and local authority of such finding.CommentsClose CommentsPermalink





‘(F) CONFIDENTIALITY- The list distributed pursuant to subparagraph (A) shall be confidential, and any person receiving the list shall maintain the confidentiality of the list but may deliver the list, for enforcement purposes, to any government official or to any common carrier or other person that delivers tobacco products or small packages to consumers. Nothing in this section shall prohibit a common carrier, the United States Postal Service, or any other person receiving the list from discussing with a listed delivery seller the delivery seller’s inclusion on the list and the resulting effects on any services requested by such listed delivery seller.CommentsClose CommentsPermalink





‘(2) PROHIBITION ON DELIVERY-CommentsClose CommentsPermalink





‘(A) IN GENERAL- Commencing on the date that is 60 days after the date of the initial distribution or availability of the list under paragraph (1)(A), no person who receives the list under paragraph (1), and no person who delivers cigarettes or smokeless tobacco to consumers, shall knowingly complete, cause to be completed, or complete its portion of a delivery of any package for any person whose name and address are on the list, unless--CommentsClose CommentsPermalink





‘(i) the person making the delivery knows or believes in good faith that the item does not include cigarettes or smokeless tobacco;CommentsClose CommentsPermalink





‘(ii) the delivery is made to a person lawfully engaged in the business of manufacturing, distributing, or selling cigarettes or smokeless tobacco; orCommentsClose CommentsPermalink





‘(iii) the package being delivered weighs more than 100 pounds and the person making the delivery does not know or have reasonable cause to believe that the package contains cigarettes or smokeless tobacco.CommentsClose CommentsPermalink





‘(B) IMPLEMENTATION OF UPDATES- Commencing on the date that is 30 days after the date of the distribution or availability of any updates or corrections to the list under paragraph (1), all recipients and all common carriers or other persons that deliver cigarettes or smokeless tobacco to consumers shall be subject to subparagraph (A) in regard to such corrections or updates.CommentsClose CommentsPermalink





‘(C) EXEMPTIONS- Subparagraphs (A) and (B), subsection (b)(2), and any other requirements or restrictions placed directly on common carriers elsewhere in this subsection, shall not apply to a common carrier that is subject to a settlement agreement relating to tobacco product deliveries to consumers or, if any such settlement agreement to which the common carrier was a party is terminated or otherwise becomes inactive, is administering and enforcing, on a nationwide basis, policies and practices that are at least as stringent as any such agreement. For the purposes of this section, ‘settlement agreement’ shall be defined to include the Assurance of Discontinuance entered into by the Attorney General of New York and DHL Holdings USA, Inc. and DHL Express (USA), Inc. on or about July 1, 2005, the Assurance of Discontinuance entered into by the Attorney General of New York and United Parcel Service, Inc. on or about October 21, 2005, and the Assurance of Compliance entered into by the Attorney General of New York and Federal Express Corporation and FedEx Ground Package Systems, Inc. on or about February 3, 2006, so long as each is honored nationwide to block illegal deliveries of cigarettes or smokeless tobacco to consumers, and also includes any other active agreement between a common carrier and the States that operates nationwide to ensure that no deliveries of cigarettes and smokeless tobacco shall be made to consumers for illegally operating Internet or mail-order sellers and that any such deliveries to consumers shall not be made to minors or without payment to the States and localities where the consumers are located of all taxes on the tobacco products.CommentsClose CommentsPermalink





‘(3) SHIPMENTS FROM PERSONS ON LIST-CommentsClose CommentsPermalink





‘(A) IN GENERAL- In the event that a common carrier or other delivery service delays or interrupts the delivery of a package it has in its possession because it determines or has reason to believe that the person ordering the delivery is on a list distributed under paragraph (1), and that clauses (i), (ii), and (iii) of paragraph (2)(a) do not apply--CommentsClose CommentsPermalink





‘(i) the person ordering the delivery shall be obligated to pay--CommentsClose CommentsPermalink





‘(I) the common carrier or other delivery service as if the delivery of the package had been timely completed; andCommentsClose CommentsPermalink





‘(II) if the package is not deliverable, any reasonable additional fee or charge levied by the common carrier or other delivery service to cover its extra costs and inconvenience and to serve as a disincentive against such noncomplying delivery orders; andCommentsClose CommentsPermalink





‘(ii) if the package is determined not to be deliverable, the common carrier or other delivery service shall offer to provide the package and its contents to a Federal, State, or local law enforcement agency.CommentsClose CommentsPermalink





‘(B) RECORDS- A common carrier or other delivery service shall maintain, for a period of 5 years, any records kept in the ordinary course of business relating to any deliveries interrupted pursuant to this paragraph and provide that information, upon request, to the Attorney General or to the attorney general or chief law enforcement official or tax administrator of any State, local, or tribal government.CommentsClose CommentsPermalink





‘(C) CONFIDENTIALITY- Any person receiving records under subparagraph (B) shall use such records solely for the purposes of the enforcement of this Act and the collection of any taxes owed on related sales of cigarettes and smokeless tobacco, and shall keep confidential any personal information in such records not otherwise required for such purposes.CommentsClose CommentsPermalink





‘(4) PREEMPTION-CommentsClose CommentsPermalink





‘(A) IN GENERAL- No State, local, or tribal government, nor any political authority of 2 or more State, local, or tribal governments, may enact or enforce any law or regulation relating to delivery sales that restricts deliveries of cigarettes or smokeless tobacco to consumers by common carriers or other delivery services on behalf of delivery sellers by--CommentsClose CommentsPermalink





‘(i) requiring that the common carrier or other delivery service verify the age or identity of the consumer accepting the delivery by requiring the person who signs to accept delivery of the shipping container to provide proof, in the form of a valid, government-issued identification bearing a photograph of the individual, that such person is at least the minimum age required for the legal sale or purchase of tobacco products, as determined by either State or local law at the place of delivery;CommentsClose CommentsPermalink





‘(ii) requiring that the common carrier or other delivery service obtain a signature from the consumer accepting the delivery;CommentsClose CommentsPermalink





‘(iii) requiring that the common carrier or other delivery service verify that all applicable taxes have been paid;CommentsClose CommentsPermalink





‘(iv) requiring that packages delivered by the common carrier or other delivery service contain any particular labels, notice, or markings; orCommentsClose CommentsPermalink





‘(v) prohibiting common carriers or other delivery services from making deliveries on the basis of whether the delivery seller is or is not identified on any list of delivery sellers maintained and distributed by any entity other than the Federal Government.CommentsClose CommentsPermalink





‘(B) RELATIONSHIP TO OTHER LAWS- Except as provided in subparagraph (C), nothing in this paragraph shall be construed to nullify, expand, restrict, or otherwise amend or modify--CommentsClose CommentsPermalink





‘(i) section 14501(c)(1) or 41713(b)(4) of title 49, United States Code;CommentsClose CommentsPermalink





‘(ii) any other restrictions in Federal law on the ability of State, local, or tribal governments to regulate common carriers; orCommentsClose CommentsPermalink





‘(iii) any provision of State, local, or tribal law regulating common carriers that is described in section 14501(c)(2) or 41713(b)(4)(B) of title 49 of the United States Code.CommentsClose CommentsPermalink





‘(C) STATE LAWS PROHIBITING DELIVERY SALES- Nothing in the Prevent All Cigarette Trafficking Act of 2009, the amendments made by that Act, or in any other Federal statute shall be construed to preempt, supersede, or otherwise limit or restrict State laws prohibiting the delivery sale, or the shipment or delivery pursuant to a delivery sale, of cigarettes or other tobacco products to individual consumers or personal residences except that no State may enforce against a common carrier a law prohibiting the delivery of cigarettes or other tobacco products to individual consumers or personal residences without proof that the common carrier is not exempt under paragraph (2)(C) of this subsection.CommentsClose CommentsPermalink





‘(5) STATE, LOCAL, AND TRIBAL ADDITIONS-CommentsClose CommentsPermalink





‘(A) IN GENERAL- Any State, local, or tribal government shall provide the Attorney General with--CommentsClose CommentsPermalink





‘(i) all known names, addresses, website addresses, and other primary contact information of any delivery seller that offers for sale or makes sales of cigarettes or smokeless tobacco in or into the State, locality, or tribal land involved, but has failed to register with or make reports to the respective tax administrator as required by this Act, or that has been found in a legal proceeding to have otherwise failed to comply with this Act; andCommentsClose CommentsPermalink





‘(ii) a list of common carriers and other persons who make deliveries of cigarettes or smokeless tobacco in or into the State, locality, or tribal land.CommentsClose CommentsPermalink





‘(B) UPDATES- Any government providing a list to the Attorney General under subparagraph (A) shall also provide updates and corrections every 4 months until such time as such government notifies the Attorney General in writing that such government no longer desires to submit such information to supplement the list maintained and distributed by the Attorney General under paragraph (1).CommentsClose CommentsPermalink





‘(C) REMOVAL AFTER WITHDRAWAL- Upon receiving written notice that a government no longer desires to submit information under subparagraph (A), the Attorney General shall remove from the list compiled under paragraph (1) any persons that are on the list solely because of such government’s prior submissions of its list of noncomplying delivery sellers of cigarettes or smokeless tobacco or its subsequent updates and corrections.CommentsClose CommentsPermalink





‘(6) DEADLINE TO INCORPORATE ADDITIONS- The Attorney General shall--CommentsClose CommentsPermalink





‘(A) include any delivery seller identified and submitted by a State, local, or tribal government under paragraph (5) in any list or update that is distributed or made available under paragraph (1) on or after the date that is 30 days after the date on which the information is received by the Attorney General; andCommentsClose CommentsPermalink





‘(B) distribute any such list or update to any common carrier or other person who makes deliveries of cigarettes or smokeless tobacco that has been identified and submitted by a government pursuant to paragraph (5).CommentsClose CommentsPermalink





‘(7) NOTICE TO DELIVERY SELLERS- Not later than 14 days prior to including any delivery seller on the initial list distributed or made available under paragraph (1), or on any subsequent list or update for the first time, the Attorney General shall make a reasonable attempt to send notice to the delivery seller by letter, electronic mail, or other means that the delivery seller is being placed on such list or update, with that notice citing the relevant provisions of this Act.CommentsClose CommentsPermalink





‘(8) LIMITATIONS-CommentsClose CommentsPermalink





‘(A) IN GENERAL- Any common carrier or other person making a delivery subject to this subsection shall not be required or otherwise obligated to--CommentsClose CommentsPermalink





‘(i) determine whether any list distributed or made available under paragraph (1) is complete, accurate, or up-to-date;CommentsClose CommentsPermalink





‘(ii) determine whether a person ordering a delivery is in compliance with this Act; orCommentsClose CommentsPermalink





‘(iii) open or inspect, pursuant to this Act, any package being delivered to determine its contents.CommentsClose CommentsPermalink





‘(B) ALTERNATE NAMES- Any common carrier or other person making a delivery subject to this subsection shall not be required to make any inquiries or otherwise determine whether a person ordering a delivery is a delivery seller on the list under paragraph (1) who is using a different name or address in order to evade the related delivery restrictions, but shall not knowingly deliver any packages to consumers for any such delivery seller who the common carrier or other delivery service knows is a delivery seller who is on the list under paragraph (1) but is using a different name or address to evade the delivery restrictions of paragraph (2).CommentsClose CommentsPermalink





‘(C) PENALTIES- Any common carrier or person in the business of delivering packages on behalf of other persons shall not be subject to any penalty under section 14101(a) of title 49, United States Code, or any other provision of law for--CommentsClose CommentsPermalink





‘(i) not making any specific delivery, or any deliveries at all, on behalf of any person on the list under paragraph (1);CommentsClose CommentsPermalink





‘(ii) refusing, as a matter of regular practice and procedure, to make any deliveries, or any deliveries in certain States, of any cigarettes or smokeless tobacco for any person or for any person not in the business of manufacturing, distributing, or selling cigarettes or smokeless tobacco; orCommentsClose CommentsPermalink





‘(iii) delaying or not making a delivery for any person because of reasonable efforts to comply with this Act.CommentsClose CommentsPermalink





‘(D) OTHER LIMITS- Section 2 and subsections (a), (b), (c), and (d) of this section shall not be interpreted to impose any responsibilities, requirements, or liability on common carriers.CommentsClose CommentsPermalink





‘(f) Presumption- For purposes of this Act, a delivery sale shall be deemed to have occurred in the State and place where the buyer obtains personal possession of the cigarettes or smokeless tobacco, and a delivery pursuant to a delivery sale is deemed to have been initiated or ordered by the delivery seller.’.CommentsClose CommentsPermalink





(d) Penalties- The Jenkins Act is amended by striking section 3 and inserting the following:CommentsClose CommentsPermalink

‘SEC. 3. PENALTIES.

‘(a) Criminal Penalties-CommentsClose CommentsPermalink





‘(1) IN GENERAL- Except as provided in paragraph (2), whoever knowingly violates any provision of this Act shall be guilty of a felony and shall be imprisoned not more than 3 years, fined under title 18, United States Code, or both.CommentsClose CommentsPermalink





‘(2) EXCEPTIONS-CommentsClose CommentsPermalink





‘(A) GOVERNMENTS- Paragraph (1) shall not apply to a State, local, or tribal government.CommentsClose CommentsPermalink





‘(B) DELIVERY VIOLATIONS- A common carrier or independent delivery service, or employee of a common carrier or independent delivery service, shall be subject to criminal penalties under paragraph (1) for a violation of section 2A(e) only if the violation is committed knowingly--CommentsClose CommentsPermalink





‘(i) as consideration for the receipt of, or as consideration for a promise or agreement to pay, anything of pecuniary value; orCommentsClose CommentsPermalink





‘(ii) for the purpose of assisting a delivery seller to violate, or otherwise evading compliance with, section 2A.CommentsClose CommentsPermalink





‘(b) Civil Penalties-CommentsClose CommentsPermalink





‘(1) IN GENERAL- Except as provided in paragraph (3), whoever violates any provision of this Act shall be subject to a civil penalty in an amount not to exceed--CommentsClose CommentsPermalink





‘(A) in the case of a delivery seller, the greater of--CommentsClose CommentsPermalink





‘(i) $5,000 in the case of the first violation, or $10,000 for any other violation; orCommentsClose CommentsPermalink





‘(ii) for any violation, 2 percent of the gross sales of cigarettes or smokeless tobacco of such person during the 1-year period ending on the date of the violation.CommentsClose CommentsPermalink





‘(B) in the case of a common carrier or other delivery service, $2,500 in the case of a first violation, or $5,000 for any violation within 1 year of a prior violation.CommentsClose CommentsPermalink





‘(2) RELATION TO OTHER PENALTIES- A civil penalty imposed under paragraph (1) for a violation of this Act shall be imposed in addition to any criminal penalty under subsection (a) and any other damages, equitable relief, or injunctive relief awarded by the court, including the payment of any unpaid taxes to the appropriate Federal, State, local, or tribal governments.CommentsClose CommentsPermalink





‘(3) EXCEPTIONS-CommentsClose CommentsPermalink





‘(A) DELIVERY VIOLATIONS- An employee of a common carrier or independent delivery service shall be subject to civil penalties under paragraph (1) for a violation of section 2A(e) only if the violation is committed intentionally--CommentsClose CommentsPermalink





‘(i) as consideration for the receipt of, or as consideration for a promise or agreement to pay, anything of pecuniary value; orCommentsClose CommentsPermalink





‘(ii) for the purpose of assisting a delivery seller to violate, or otherwise evading compliance with, section 2A.CommentsClose CommentsPermalink





‘(B) OTHER LIMITATIONS- No common carrier or independent delivery service shall be subject to civil penalties under paragraph (1) for a violation of section 2A(e) if--CommentsClose CommentsPermalink





‘(i) the common carrier or independent delivery service has implemented and enforces effective policies and practices for complying with that section; orCommentsClose CommentsPermalink





‘(ii) the violation consists of an employee of the common carrier or independent delivery service who physically receives and processes orders, picks up packages, processes packages, or makes deliveries, taking actions that are outside the scope of employment of the employee, or that violate the implemented and enforced policies of the common carrier or independent delivery service described in clause (i).’.CommentsClose CommentsPermalink





(e) Enforcement- The Jenkins Act is amended by striking section 4 and inserting the following:CommentsClose CommentsPermalink

‘SEC. 4. ENFORCEMENT.

‘(a) In General- The United States district courts shall have jurisdiction to prevent and restrain violations of this Act and to provide other appropriate injunctive or equitable relief, including money damages, for such violations.CommentsClose CommentsPermalink





‘(b) Authority of the Attorney General- The Attorney General shall administer and enforce the provisions of this Act.CommentsClose CommentsPermalink





‘(c) State, Local, and Tribal Enforcement-CommentsClose CommentsPermalink





‘(1) IN GENERAL-CommentsClose CommentsPermalink





‘(A) STANDING- A State, through its attorney general, or a local government or Indian tribe that levies a tax subject to section 2A(a)(3), through its chief law enforcement officer, may bring an action in a United States district court to prevent and restrain violations of this Act by any person or to obtain any other appropriate relief from any person for violations of this Act, including civil penalties, money damages, and injunctive or other equitable relief.CommentsClose CommentsPermalink





‘(B) SOVEREIGN IMMUNITY- Nothing in this Act shall be deemed to abrogate or constitute a waiver of any sovereign immunity of a State or local government or Indian tribe against any unconsented lawsuit under this Act, or otherwise to restrict, expand, or modify any sovereign immunity of a State or local government or Indian tribe.CommentsClose CommentsPermalink





‘(2) PROVISION OF INFORMATION- A State, through its attorney general, or a local government or Indian tribe that levies a tax subject to section 2A(a)(3), through its chief law enforcement officer, may provide evidence of a violation of this Act by any person not subject to State, local, or tribal government enforcement actions for violations of this Act to the Attorney General or a United States attorney, who shall take appropriate actions to enforce the provisions of this Act.CommentsClose CommentsPermalink





‘(3) USE OF PENALTIES COLLECTED-CommentsClose CommentsPermalink





‘(A) IN GENERAL- There is established a separate account in the Treasury known as the ‘PACT Anti-Trafficking Fund’. Notwithstanding any other provision of law and subject to subparagraph (B), an amount equal to 50 percent of any criminal and civil penalties collected by the United States Government in enforcing the provisions of this Act shall be transferred into the PACT Anti-Trafficking Fund and shall be available to the Attorney General for purposes of enforcing the provisions of this Act and other laws relating to contraband tobacco products.CommentsClose CommentsPermalink





‘(B) ALLOCATION OF FUNDS- Of the amount available to the Attorney General under subparagraph (A), not less than 50 percent shall be made available only to the agencies and offices within the Department of Justice that were responsible for the enforcement actions in which the penalties concerned were imposed or for any underlying investigations.CommentsClose CommentsPermalink





‘(4) NONEXCLUSIVITY OF REMEDY-CommentsClose CommentsPermalink





‘(A) IN GENERAL- The remedies available under this section and section 3 are in addition to any other remedies available under Federal, State, local, tribal, or other law.CommentsClose CommentsPermalink





‘(B) STATE COURT PROCEEDINGS- Nothing in this Act shall be construed to expand, restrict, or otherwise modify any right of an authorized State official to proceed in State court, or take other enforcement actions, on the basis of an alleged violation of State or other law.CommentsClose CommentsPermalink





‘(C) TRIBAL COURT PROCEEDINGS- Nothing in this Act shall be construed to expand, restrict, or otherwise modify any right of an authorized Indian tribal government official to proceed in tribal court, or take other enforcement actions, on the basis of an alleged violation of tribal law.CommentsClose CommentsPermalink





‘(D) LOCAL GOVERNMENT ENFORCEMENT- Nothing in this Act shall be construed to expand, restrict, or otherwise modify any right of an authorized local government official to proceed in State court, or take other enforcement actions, on the basis of an alleged violation of local or other law.CommentsClose CommentsPermalink





‘(d) Persons Dealing in Tobacco Products- Any person who holds a permit under section 5712 of the Internal Revenue Code of 1986 (regarding permitting of manufacturers and importers of tobacco products and export warehouse proprietors) may bring an action in an appropriate United States district court to prevent and restrain violations of this Act by any person other than a State, local, or tribal government.CommentsClose CommentsPermalink





‘(e) Notice-CommentsClose CommentsPermalink





‘(1) PERSONS DEALING IN TOBACCO PRODUCTS- Any person who commences a civil action under subsection (d) shall inform the Attorney General of the action.CommentsClose CommentsPermalink





‘(2) STATE, LOCAL, AND TRIBAL ACTIONS- It is the sense of Congress that the attorney general of any State, or chief law enforcement officer of any locality or tribe, that commences a civil action under this section should inform the Attorney General of the action.CommentsClose CommentsPermalink





‘(f) Public Notice-CommentsClose CommentsPermalink





‘(1) IN GENERAL- The Attorney General shall make available to the public, by posting such information on the Internet and by other appropriate means, information regarding all enforcement actions brought by the United States, or reported to the Attorney General, under this section, including information regarding the resolution of such actions and how the Attorney General has responded to referrals of evidence of violations pursuant to subsection (c)(2).CommentsClose CommentsPermalink





‘(2) REPORTS TO CONGRESS- The Attorney General shall submit to Congress, one year after the date of the enactment of the Prevent All Cigarette Trafficking Act of 2009, at the end of each of the four succeeding 1-year periods, a report containing the information described in paragraph (1).’.CommentsClose CommentsPermalink

SEC. 3. TREATMENT OF CIGARETTES AND SMOKELESS TOBACCO AS NONMAILABLE MATTER.

(a) In General- Chapter 83 of title 18, United States Code, is amended by inserting after section 1716D the following:CommentsClose CommentsPermalink

‘Sec. 1716E. Tobacco products as nonmailable

‘(a) Prohibition- All cigarettes and smokeless tobacco (as those terms are defined in section 1 of the Act of October 19, 1949, commonly referred to as the Jenkins Act) are nonmailable and shall not be deposited in or carried through the mails. The United States Postal Service shall not accept for delivery or transmit through the mails any package that it knows or has reasonable cause to believe contains any cigarettes or smokeless tobacco made nonmailable by this subsection. For the purposes of subsection (a) reasonable cause includes--CommentsClose CommentsPermalink





‘(1) a statement on a publicly available website, or an advertisement, by any person that such person will mail matter which is nonmailable under this section in return for payment; orCommentsClose CommentsPermalink





‘(2) the placement of the person on the list created under section 2A(e) of the Jenkins Act.CommentsClose CommentsPermalink





‘(b) Exceptions- This section shall not apply to the following:CommentsClose CommentsPermalink





‘(1) CIGARS- Cigars (as that term is defined in section 5702(a) of the Internal Revenue Code of 1986).CommentsClose CommentsPermalink





‘(2) GEOGRAPHIC EXCEPTION- Mailings within the State of Alaska or within the State of Hawaii.CommentsClose CommentsPermalink





‘(3) BUSINESS PURPOSES- Tobacco products mailed only for business purposes between legally operating businesses that have all applicable State and Federal Government licenses or permits and are engaged in tobacco product manufacturing, distribution, wholesale, export, import, testing, investigation, or research, or for regulatory purposes between any such businesses and State or Federal Government regulatory agencies, pursuant to a final rule that the Postal Service shall issue, not later than 180 days after the date of the enactment of the Prevent All Cigarette Trafficking Act of 2009, which shall establish the standards and requirements that apply to all such mailings, which shall include the following:CommentsClose CommentsPermalink





‘(A) The Postal Service shall verify that any person submitting an otherwise nonmailable tobacco product into the mails as authorized by this paragraph is a business or government agency permitted to make such mailings pursuant to this section and the related final rule.CommentsClose CommentsPermalink





‘(B) The Postal Service shall ensure that any recipient of an otherwise nonmailable tobacco product sent through the mails pursuant to this paragraph is a business or government agency that may lawfully receive such product.CommentsClose CommentsPermalink





‘(C) The mailings shall be sent through the Postal Service’s systems that provide for the tracking and confirmation of the delivery.CommentsClose CommentsPermalink





‘(D) The identities of the business or government entity submitting the mailing containing otherwise nonmailable tobacco products for delivery and the business or government entity receiving the mailing shall be clearly set forth on the package and such information shall be kept in Postal Service records and made available to the Postal Service, the Attorney General, and to persons eligible to bring enforcement actions pursuant to section 3(d) of the Prevent All Cigarette Trafficking Act of 2009 for a period of at least three years thereafter.CommentsClose CommentsPermalink





‘(E) The mailings shall be marked with a Postal Service label or marking that makes it clear to Postal Service employees that it is a permitted mailing of otherwise nonmailable tobacco products that may be delivered only to a permitted government agency or business and may not be delivered to any residence or individual person.CommentsClose CommentsPermalink





‘(F) The mailing shall be delivered only to a verified adult employee of the recipient business or government agency, who shall be required to sign for the mailing.CommentsClose CommentsPermalink





‘(4) CERTAIN INDIVIDUALS- Tobacco products mailed by adult individuals for noncommercial purposes, including the return of a damaged or unacceptable tobacco product to its manufacturer, pursuant to a final rule that the Postal Service shall issue, not later than 180 days after the date of the enactment of the Prevent All Cigarette Trafficking Act of 2009, which shall establish the standards and requirements that apply to all such mailings, which shall include the following:CommentsClose CommentsPermalink





‘(A) The Postal Service shall verify that any person submitting an otherwise nonmailable tobacco product into the mails as authorized by this section is the individual identified on the return address label of the package and is an adult.CommentsClose CommentsPermalink





‘(B) For a mailing to an individual, the Postal Service shall require the person submitting the otherwise nonmailable tobacco product into the mails as authorized by this subsection to affirm that the recipient is an adult.CommentsClose CommentsPermalink





‘(C) The package shall not weigh more than 10 ounces.CommentsClose CommentsPermalink





‘(D) The mailing shall be sent through the Postal Service’s systems that provide for the tracking and confirmation of the delivery.CommentsClose CommentsPermalink





‘(E) No package shall be delivered or placed in the possession of any individual who is not a verified adult. For a mailing to an individual, the Postal Service shall deliver the package only to the verified adult recipient at the recipient address or transfer it for delivery to an Air/Army Postal Office (APO) or Fleet Postal Office (FPO) number designated in the recipient address.CommentsClose CommentsPermalink





‘(F) No person shall initiate more than ten such mailings in any thirty-day period.CommentsClose CommentsPermalink





‘(5) EXCEPTION FOR MAILINGS FOR CONSUMER TESTING BY MANUFACTURERS- Subject to paragraph (8), nothing in this Act shall preclude a legally operating cigarette manufacturer operating on its own or through its legally authorized agent from using the Postal Service to mail cigarettes to verified adult smokers solely for consumer testing purposes, provided that--CommentsClose CommentsPermalink





‘(A) the cigarette manufacturer has a federal permit, in good standing, pursuant to section 5713 of the Internal Revenue Code of 1986;CommentsClose CommentsPermalink





‘(B) any package of cigarettes mailed pursuant to this paragraph shall contain no more than 12 packs of cigarettes (240 cigarettes);CommentsClose CommentsPermalink





‘(C) no individual shall receive more than 1 package of cigarettes per manufacturer pursuant to this paragraph in any 30-day period;CommentsClose CommentsPermalink





‘(D) all taxes on the cigarettes levied by the State and locality of delivery have been paid to the State and locality prior to delivery, and tax stamps or other tax-payment indicia have been affixed to the cigarettes as required by law;CommentsClose CommentsPermalink





‘(E)(i) the recipient has not made any payments of any kind in exchange for receiving the cigarettes;CommentsClose CommentsPermalink





‘(ii) the recipient is paid a fee by the manufacturer or manufacturer’s agent for participation in consumer product tests; andCommentsClose CommentsPermalink





‘(iii) the recipient, in connection with the tests, evaluates the cigarettes and provides feedback to the manufacturer or agent;CommentsClose CommentsPermalink





‘(F) the mailing is made pursuant to a final rule that the Postal Service shall issue, not later than 180 days after the date of the enactment of the Prevent All Cigarette Trafficking Act of 2009, which shall establish standards and requirements that apply to all such mailings, which shall include the following:CommentsClose CommentsPermalink





‘(i) The Postal Service shall verify that any person submitting a tobacco product into the mails pursuant to this paragraph is a manufacturer permitted to make such mailings pursuant to this paragraph, or an agent legally authorized by the manufacturer to submit the tobacco product into the mails on the manufacturer’s behalf.CommentsClose CommentsPermalink





‘(ii) The Postal Service shall require the manufacturer submitting the cigarettes into the mails pursuant to this paragraph to affirm that the manufacturer or its legally authorized agent has verified that the recipient is an adult established smoker who has not made any payment for the cigarettes, has formally stated in writing that he or she wishes to receive such mailings, and has not withdrawn that agreement despite being offered the opportunity to do so by the manufacturer or its legally authorized agent at least once in every 3-month period.CommentsClose CommentsPermalink





‘(iii) The Postal Service shall require the manufacturer or its legally authorized agent submitting the cigarettes into the mails pursuant to this paragraph to affirm that the package contains no more than 12 packs of cigarettes (240 cigarettes) on which all taxes levied on the cigarettes by the State and locality of delivery have been paid and all related State tax stamps or other tax-payment indicia have been applied.CommentsClose CommentsPermalink





‘(iv) The mailings shall be sent through the Postal Service’s systems that provide for the tracking and confirmation of the delivery and all related records shall be kept in Postal Service records and made available to persons enforcing this section for a period of at least 3 years thereafter.CommentsClose CommentsPermalink





‘(v) The mailing shall be marked with a Postal Service label or marking that makes it clear to Postal Service employees that it is a permitted mailing of otherwise nonmailable tobacco products that may be delivered only to the named recipient after verifying that the recipient is an adult.CommentsClose CommentsPermalink





‘(vi) The Postal Service shall deliver the mailing only to the named recipient and only after verifying that the recipient is an adult.CommentsClose CommentsPermalink





‘(6) DEFINITION OF CONSUMER TESTING- For purposes of this Act, the term ‘consumer testing’ means testing limited to formal data collection and analysis for the specific purpose of evaluating the product for quality assurance and benchmarking purposes of cigarette brands or sub-brands among existing adult smokers.CommentsClose CommentsPermalink





‘(7) DEFINITION OF ADULT- For purposes of paragraph (5), the term ‘adult’ means an individual of at least 21 years of age. For purposes of paragraphs (3) and (4), the term ‘adult’ means an individual of at least the minimum age required for the legal sale or purchase of tobacco products as determined by applicable law at the place the individual is located.CommentsClose CommentsPermalink





‘(8) LIMITATIONS- Paragraph (5) shall not--CommentsClose CommentsPermalink





‘(A) permit a mailing of cigarettes to an individual located in any State that prohibits the delivery or shipment of cigarettes to individuals in the State, or preempt, limit, or otherwise affect any related State laws; orCommentsClose CommentsPermalink





‘(B) permit a manufacturer, directly or through a legally authorized agent, to mail cigarettes in any calendar years in a cumulative amount greater than one percent of its total cigarette sales in the United States in the previous calendar year.CommentsClose CommentsPermalink





‘(9) UNITED STATES GOVERNMENT AGENCIES- Agencies of the United States Government involved in the consumer testing of tobacco products solely for public health purposes may make mailings pursuant to the same requirements, restrictions, and Postal Service rules and procedures that apply to consumer testing mailings of cigarettes by manufacturers under paragraph (5), except that no such agency shall be required to pay the recipients for participating in the consumer testing.CommentsClose CommentsPermalink





‘(c) Seizure and Forfeiture- Any cigarettes or smokeless tobacco made nonmailable by this subsection that are deposited in the mails shall be subject to seizure and forfeiture, pursuant to the procedures set forth in chapter 46 of this title. Any tobacco products so seized and forfeited shall either be destroyed or retained by Government officials for the detection or prosecution of crimes or related investigations and then destroyed.CommentsClose CommentsPermalink





‘(d) Additional Penalties- In addition to any other fines and penalties imposed by this Act for violations of this section, any person violating this section shall be subject to an additional civil penalty in the amount of 10 times the retail value of the nonmailable cigarettes or smokeless tobacco, including all Federal, State, and local taxes.CommentsClose CommentsPermalink





‘(e) Criminal Penalty- Whoever knowingly deposits for mailing or delivery, or knowingly causes to be delivered by mail, according to the direction thereon, or at any place at which it is directed to be delivered by the person to whom it is addressed, anything that this section declares to be nonmailable matter shall be fined under this title, imprisoned not more than 1 year, or both.CommentsClose CommentsPermalink





‘(f) Definition- As used in this section, the term ‘State’ has the meaning given that term in section 1716(k).CommentsClose CommentsPermalink





‘(g) Use of Penalties- There is established a separate account in the Treasury of the United States, to be known as the ‘PACT Postal Service Fund’. Notwithstanding any other provision of law, an amount equal to 50 percent of any criminal and civil fines or monetary penalties collected by the United States Government in enforcing the provisions of this subsection shall be transferred into the PACT Postal Service Fund and shall be available to the Postmaster General for the purpose of enforcing the provisions of this subsection.CommentsClose CommentsPermalink





‘(h) Coordination of Efforts- In the enforcement of this section, the Postal Service shall cooperate and coordinate its efforts with related enforcement activities of any other Federal agency or of any State, local, or tribal government, whenever appropriate.’.CommentsClose CommentsPermalink





(b) Actions by State, Local or Tribal Governments Relating to Certain Tobacco Products-CommentsClose CommentsPermalink





(1) A State, through its attorney general, or a local government or Indian tribe that levies an excise tax on tobacco products, through its chief law enforcement officer, may in a civil action in a United States district court obtain appropriate relief with respect to a violation of section 1716E of title 18, United States Code. Appropriate relief includes injunctive and equitable relief and damages equal to the amount of unpaid taxes on tobacco products mailed in violation of that section to addressees in that State.CommentsClose CommentsPermalink





(2) Nothing in this section shall be deemed to abrogate or constitute a waiver of any sovereign immunity of a State or local government or Indian tribe against any unconsented lawsuit under paragraph (1), or otherwise to restrict, expand, or modify any sovereign immunity of a State or local government or Indian tribe.CommentsClose CommentsPermalink





(3) Nothing in this section shall be construed to prohibit an authorized State official from proceeding in State court on the basis of an alleged violation of any general civil or criminal statute of such State.CommentsClose CommentsPermalink





(4) A State, through its attorney general, or a local government or Indian tribe that levies an excise tax on tobacco products, through its chief law enforcement officer, may provide evidence of a violation of paragraph (1) for commercial purposes by any person not subject to State, local, or tribal government enforcement actions for violations of paragraph (1) to the Attorney General, who shall take appropriate actions to enforce the provisions of this subsection.CommentsClose CommentsPermalink





(5) The remedies available under this subsection are in addition to any other remedies available under Federal, State, local, tribal, or other law. Nothing in this subsection shall be construed to expand, restrict, or otherwise modify any right of an authorized State, local, or tribal government official to proceed in a State, tribal, or other appropriate court, or take other enforcement actions, on the basis of an alleged violation of State, local, tribal, or other law.CommentsClose CommentsPermalink





(c) Clerical Amendment- The table of sections at the beginning of chapter 83 of title 18 is amended by adding after the item relating to section 1716D the following new item:CommentsClose CommentsPermalink





‘1716E. Tobacco products as nonmailable.’.CommentsClose CommentsPermalink

SEC. 4. COMPLIANCE WITH MODEL STATUTE OR QUALIFYING STATUTE.

(a) In General- A Tobacco Product Manufacturer or importer may not sell in, deliver to, or place for delivery sale, or cause to be sold in, delivered to, or placed for delivery sale in a State that is a party to the Master Settlement Agreement, any cigarette manufactured by a Tobacco Product Manufacturer that is not in full compliance with the terms of the Model Statute or Qualifying Statute enacted by such State requiring funds to be placed into a qualified escrow account under specified conditions, and with any regulations promulgated pursuant to such statute.CommentsClose CommentsPermalink





(b) Jurisdiction To Prevent and Restrain Violations-CommentsClose CommentsPermalink





(1) IN GENERAL- The United States district courts shall have jurisdiction to prevent and restrain violations of subsection (a) in accordance with this subsection.CommentsClose CommentsPermalink





(2) INITIATION OF ACTION- A State, through its attorney general, may bring an action in an appropriate United States district court to prevent and restrain violations of subsection (a) by any person.CommentsClose CommentsPermalink





(3) ATTORNEY FEES- In any action under paragraph (2), a State, through its attorney general, shall be entitled to reasonable attorney fees from a person found to have knowingly violated subsection (a).CommentsClose CommentsPermalink





(4) NONEXCLUSIVITY OF REMEDIES- The remedy available under paragraph (2) is in addition to any other remedies available under Federal, State, or other law. No provision of this Act or any other Federal law shall be held or construed to prohibit or preempt the Master Settlement Agreement, the Model Statute (as defined in the Master Settlement Agreement), any legislation amending or complementary to the Model Statute in effect as of June 1, 2006, or any legislation substantially similar to such existing, amending, or complementary legislation hereinafter enacted.CommentsClose CommentsPermalink





(5) OTHER ENFORCEMENT ACTIONS- Nothing in this subsection shall be construed to prohibit an authorized State official from proceeding in State court or taking other enforcement actions on the basis of an alleged violation of State or other law.CommentsClose CommentsPermalink





(6) AUTHORITY OF THE ATTORNEY GENERAL- The Attorney General may bring an action in an appropriate United States district court to prevent and restrain violations of subsection (a) by any person.CommentsClose CommentsPermalink





(c) Definitions- In this section the following definitions apply:CommentsClose CommentsPermalink





(1) DELIVERY SALE- The term ‘delivery sale’ means any sale of cigarettes or smokeless tobacco to a consumer if--CommentsClose CommentsPermalink





(A) the consumer submits the order for such sale by means of a telephone or other method of voice transmission, the mails, or the Internet or other online service, or the seller is otherwise not in the physical presence of the buyer when the request for purchase or order is made; orCommentsClose CommentsPermalink





(B) the cigarettes or smokeless tobacco are delivered to the buyer by common carrier, private delivery service, or other method of remote delivery, or the seller is not in the physical presence of the buyer when the buyer obtains possession of the cigarettes or smokeless tobacco.CommentsClose CommentsPermalink





(2) IMPORTER- The term ‘importer’ means each of the following:CommentsClose CommentsPermalink





(A) SHIPPING OR CONSIGNING- Any person in the United States to whom nontaxpaid tobacco products manufactured in a foreign country, Puerto Rico, the Virgin Islands, or a possession of the United States are shipped or consigned.CommentsClose CommentsPermalink





(B) MANUFACTURING WAREHOUSES- Any person who removes cigars or cigarettes for sale or consumption in the United States from a customs-bonded manufacturing warehouse.CommentsClose CommentsPermalink





(C) UNLAWFUL IMPORTING- Any person who smuggles or otherwise unlawfully brings tobacco products into the United States.CommentsClose CommentsPermalink





(3) MASTER SETTLEMENT AGREEMENT- The term ‘Master Settlement Agreement’ means the agreement executed November 23, 1998, between the attorneys general of 46 States, the District of Columbia, the Commonwealth of Puerto Rico, and 4 territories of the United States and certain tobacco manufacturers.CommentsClose CommentsPermalink





(4) MODEL STATUTE; QUALIFYING STATUTE- The terms ‘Model Statute’ and ‘Qualifying Statute’ means a statute as defined in section IX(d)(2)(e) of the Master Settlement Agreement.CommentsClose CommentsPermalink





(5) TOBACCO PRODUCT MANUFACTURER- The term ‘Tobacco Product Manufacturer’ has the meaning given that term in section II(uu) of the Master Settlement Agreement.CommentsClose CommentsPermalink

SEC. 5. INSPECTION BY BUREAU OF ALCOHOL, TOBACCO, FIREARMS, AND EXPLOSIVES OF RECORDS OF CERTAIN CIGARETTE AND SMOKELESS TOBACCO SELLERS; CIVIL PENALTY.

Section 2343(c) of title 18, United States Code, is amended to read as follows:CommentsClose CommentsPermalink





‘(c)(1) Any officer of the Bureau of Alcohol, Tobacco, Firearms, and Explosives may, during normal business hours, enter the premises of any person described in subsection (a) or (b) for the purposes of inspecting--CommentsClose CommentsPermalink





‘(A) any records or information required to be maintained by such person under the provisions of law referred to in this chapter; orCommentsClose CommentsPermalink





‘(B) any cigarettes or smokeless tobacco kept or stored by such person at such premises.CommentsClose CommentsPermalink





‘(2) The district courts of the United States shall have the authority in a civil action under this subsection to compel inspections authorized by paragraph (1).CommentsClose CommentsPermalink





‘(3) Whoever denies access to an officer under paragraph (1), or who fails to comply with an order issued under paragraph (2), shall be subject to a civil penalty in an amount not to exceed $10,000.’.CommentsClose CommentsPermalink

SEC. 6. EXCLUSIONS REGARDING INDIAN TRIBES AND TRIBAL MATTERS.

(a) In General- Nothing in this Act or the amendments made by this Act shall be construed to amend, modify, or otherwise affect--CommentsClose CommentsPermalink





(1) any agreements, compacts, or other intergovernmental arrangements between any State or local government and any government of an Indian tribe (as that term is defined in section 4(e) of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b(e)) relating to the collection of taxes on cigarettes or smokeless tobacco sold in Indian country;CommentsClose CommentsPermalink





(2) any State laws that authorize or otherwise pertain to any such intergovernmental arrangements or create special rules or procedures for the collection of State, local, or tribal taxes on cigarettes or smokeless tobacco sold in Indian country;CommentsClose CommentsPermalink





(3) any limitations under Federal or State law, including Federal common law and treaties, on State, local, and tribal tax and regulatory authority with respect to the sale, use, or distribution of cigarettes and smokeless tobacco by or to Indian tribes, tribal members, tribal enterprises, or in Indian country;CommentsClose CommentsPermalink





(4) any Federal law, including Federal common law and treaties, regarding State jurisdiction, or lack thereof, over any tribe, tribal members, tribal enterprises, tribal reservations, or other lands held by the United States in trust for one or more Indian tribes; andCommentsClose CommentsPermalink





(5) any State or local government authority to bring enforcement actions against persons located in Indian country.CommentsClose CommentsPermalink





(b) Coordination of Law Enforcement- Nothing in this Act or the amendments made by this Act shall be construed to inhibit or otherwise affect any coordinated law enforcement effort by 1 or more States or other jurisdictions, including Indian tribes, through interstate compact or otherwise, that--CommentsClose CommentsPermalink





(1) provides for the administration of tobacco product laws or laws pertaining to interstate sales or other sales of tobacco products;CommentsClose CommentsPermalink





(2) provides for the seizure of tobacco products or other property related to a violation of such laws; orCommentsClose CommentsPermalink





(3) establishes cooperative programs for the administration of such laws.CommentsClose CommentsPermalink





(c) Treatment of State and Local Governments- Nothing in this Act or the amendments made by this Act shall be construed to authorize, deputize, or commission States or local governments as instrumentalities of the United States.CommentsClose CommentsPermalink





(d) Enforcement Within Indian Country- Nothing in this Act or the amendments made by this Act shall prohibit, limit, or restrict enforcement by the Attorney General of the provisions herein within Indian country.CommentsClose CommentsPermalink





(e) Ambiguity- Any ambiguity between the language of this section or its application and any other provision of this Act shall be resolved in favor of this section.CommentsClose CommentsPermalink

SEC. 7. ENHANCED CONTRABAND TOBACCO ENFORCEMENT.

(a) Requirements- The Director of the Bureau of Alcohol, Tobacco, Firearms and Explosives shall--CommentsClose CommentsPermalink





(1) create 6 regional contraband tobacco trafficking teams over a 3-year period in New York City, Washington DC, Detroit, Los Angeles, Seattle, and Miami,CommentsClose CommentsPermalink





(2) create a new Tobacco Intelligence Center to oversee investigations and monitor and coordinate ongoing investigations and to serve as a nerve center for all ongoing tobacco diversion investigations within the Bureau of Alcohol, Tobacco, Firearms, and Explosives, in the United States and, where applicable, with law enforcement organizations around the world,CommentsClose CommentsPermalink





(3) establish a covert national warehouse for undercover operations, andCommentsClose CommentsPermalink





(4) create a computer database that will track and analyze information from retail sellers of tobacco products that sell through the Internet or by mail order or make other non-face-to-face sales.CommentsClose CommentsPermalink





(b) Authorization of Appropriations- There is authorized to be appropriated to carry out subsection (a) $8,500,000 for each of the 5 fiscal years beginning with fiscal year 2010.CommentsClose CommentsPermalink

SEC. 8. EFFECTIVE DATE.

(a) In General- Except as provided in subsection (b), this Act shall take effect on the date that is 90 days after the date of enactment of this Act.CommentsClose CommentsPermalink





(b) BATFE Authority- Section 5 shall take effect on the date of enactment of this Act.CommentsClose CommentsPermalink

SEC. 9. SEVERABILITY.

If any provision of this Act, or any amendment made by this Act, or the application thereof to any person or circumstance, is held invalid, the remainder of the Act and the application of the Act to any other person or circumstance shall not be affected thereby.CommentsClose CommentsPermalink

SEC. 10. SENSE OF CONGRESS CONCERNING THE PRECEDENTIAL EFFECT OF THIS ACT.

It is the sense of Congress that unique harms are associated with online cigarette sales, including problems with verifying the ages of consumers in the digital market and the long-term health problems associated with the use of certain tobacco products. This Act was enacted recognizing the longstanding interest of Congress in urging compliance with States’ laws regulating remote sales of certain tobacco products to citizens of those States, including the passage of the Jenkins Act over 50 years ago, which established reporting requirements for out-of-State companies that sell certain tobacco products to citizens of the taxing States, and which gave authority to the Department of Justice and the Bureau of Alcohol, Tobacco, Firearms, and Explosives to enforce the Jenkins Act. In light of the unique harms and circumstances surrounding the online sale of certain tobacco products, this Act is intended to help collect cigarette excise taxes, to stop tobacco sales to underage youth, and to help the States enforce their laws that target the online sales of certain tobacco products only. This Act is in no way meant to create a precedent regarding the collection of State sales or use taxes by, or the validity of efforts to impose other types of taxes on, out-of-State entities that do not have a physical presence within the taxing State.CommentsClose CommentsPermalink

Passed the House of Representatives May 21, 2009.CommentsClose CommentsPermalink

Attest:CommentsClose CommentsPermalink

Clerk.

111th CONGRESS

1st Session

H. R. 1676

AN ACT

To prevent tobacco smuggling, to ensure the collection of all tobacco taxes, and for other purposes LORRAINE C. MILLER, CommentsClose CommentsPermalink

Clerk.CommentsClose CommentsPermalink