[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3749 Introduced in House (IH)]






108th CONGRESS
  2d Session
                                H. R. 3749

 To revise and reform the Act commonly called the Jenkins Act, and for 
                            other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 28, 2004

  Mr. Weiner introduced the following bill; which was referred to the 
                       Committee on the Judiciary

_______________________________________________________________________

                                 A BILL


 
 To revise and reform the Act commonly called the Jenkins Act, and for 
                            other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Local Government Internet Tobacco 
Sales Enforcement Act of 2004''.

SEC. 2. REVISION OF ACT OF OCTOBER 19, 1949.

    The Act of October 19, 1949, entitled ``An Act to assist States in 
collecting sales and use taxes on cigarettes'' (15 U.S.C. 375 et seq.) 
is amended by striking ``That for the purposes of this Act'' and all 
that follows through the end of the Act and inserting the following:

``SECTION 1. SHORT TITLE.

    ``This Act may be cited as the `Jenkins Act'.

``SEC. 2. INTERSTATE SALES OF CIGARETTES AND SMOKELESS TOBACCO.

    ``(a) Compliance With Laws.--
            ``(1) Each person who engages in an interstate sale of 
        cigarettes or smokeless tobacco or in an interstate 
        distribution of cigarettes or smokeless tobacco shall comply 
        with all the excise, sales, and use tax laws applicable to the 
        sale or other transfer of cigarettes or smokeless tobacco in 
        the State and place in which the cigarettes or smokeless 
        tobacco are delivered as though the person were physically 
        located in that State or place.
            ``(2) Unless State law requires otherwise, no cigarettes or 
        smokeless tobacco may be delivered pursuant to an interstate 
        sale unless in advance of delivery--
                    ``(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;
                    ``(B) any cigarette or smokeless tobacco excise tax 
                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 or tribal government; and
                    ``(C) any required stamps or other indicia that the 
                excise tax has been paid are properly affixed or 
                applied to the cigarettes or smokeless tobacco.
            ``(3) The provisions of paragraph (2) do not apply to an 
        interstate sale or distribution of smokeless tobacco when the 
        law of the State or place where the smokeless tobacco is to be 
        delivered requires or otherwise provides that interstate 
        sellers of smokeless tobacco collect the excise tax from the 
        consumer and remit the excise tax to the State or place, and 
        the interstate seller complies with such requirement.
            ``(4)(A) Each State may compile a list of interstate 
        sellers of cigarettes or smokeless tobacco who are in 
        compliance with this Act with respect to that State. If a State 
        posts a list pursuant to this subsection that specifically 
        refers to this subsection, no person may knowingly make an 
        interstate distribution of cigarettes or smokeless tobacco into 
        that State other than to a person licensed or otherwise 
        authorized by the State to engage in the business of 
        manufacturing, distributing or selling cigarettes or smokeless 
        tobacco unless the person initiating or ordering the delivery 
        is on the list at the time of delivery.
            ``(B) Each State may also compile a list of interstate 
        sellers of cigarettes or smokeless tobacco who are not in 
        compliance with this Act with respect to that State. A State 
        may provide such a list to a common carrier, the United States 
        Postal Service, or to any other person, and make public the 
        availability of the list to any person engaged in the delivery 
        business in or into the State or who delivers cigarettes or 
        smokeless tobacco in or into the State. Such list shall be 
        confidential, and any person receiving such a list from a State 
        shall maintain the confidentiality of the list. If a State, 
        pursuant to this subsection, provides such a list to any person 
        and makes public its availability to persons who deliver 
        cigarettes or smokeless tobacco in or into the State, no person 
        who receives the list and no person who delivers cigarettes or 
        smokeless tobacco in or into the State may knowingly make an 
        interstate distribution of any item in or into that State for a 
        person on the list unless--
                    ``(i) the person in good faith determines that the 
                item does not include cigarettes or smokeless tobacco; 
                or
                    ``(ii) the delivery is made to a person licensed or 
                otherwise authorized by the State to engage in the 
                business of manufacturing, distributing or selling 
                cigarettes or smokeless tobacco.
    ``(b) Recordkeeping and Reporting.--Each person who engages in an 
interstate sale of cigarettes or smokeless tobacco, or who advertises, 
or offers to engage in, such a sale, shall--
            ``(1) first file with the tobacco tax administrator of the 
        State and place in which the cigarettes or smokeless tobacco 
        are to be offered, advertised, or delivered, a statement 
        setting forth the person's name and trade name (if any), and 
        the address of that person's principal place of business and 
        any other place of business, 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 authorized to accept service in the State on 
        behalf of that person;
            ``(2) not later than the 10th day of each calendar month, 
        file with that tobacco tax administrator a memorandum or copy 
        of the invoice covering each and every interstate sale of 
        cigarettes or smokeless tobacco by the filer into that State or 
        place, and each interstate distribution of cigarettes or 
        smokeless tobacco pursuant to that sale, during the previous 
        calendar month, and such memorandum or invoice shall include 
        the name and address of the person to whom the cigarettes or 
        smokeless tobacco are delivered, the brand, and the type, the 
        quantity delivered, and the name, address, and phone number of 
        the person delivering; and
            ``(3) maintain records, including the information specified 
        in paragraph (2), for not less than 5 years after the date of 
        an interstate sale of cigarettes or smokeless tobacco and of 
        each interstate distribution of cigarettes or smokeless tobacco 
        pursuant to that sale, and make those records available for 
        inspection upon the lawful demand of the Attorney General of 
        the United States, an attorney general of a State, the 
        Commissioner of Internal Revenue, or the chief tax collection 
        official of a State or place that levies an excise tax on 
        cigarettes or smokeless tobacco.
    ``(c) Personally identifiable information--
            ``(1) relating to an individual to whom cirgarettes or 
        smokeless tobacco are delivered; and
            ``(2) filed, or maintained in records, under paragraph (2) 
        or (3) of subsection (b);
 shall not be made available to the public and shall be used solely for 
the purposes of tax collection or law enforcement.
    ``(d) Deeming Rule.--For the purposes of this section--
            ``(1) an interstate sale or delivery of cigarettes or 
        smokeless tobacco shall be deemed to have occurred in the State 
        and place where the buyer obtains personal possession of the 
        cigarettes or smokeless tobacco; and
            ``(2) a delivery pursuant to an interstate sale is deemed 
        to have been initiated or ordered by the seller.

``SEC. 3. CIVIL ACTION.

    ``(a) In General.--In addition to any other remedies available 
under other Federal or State or local law, the attorney general of a 
State or the chief law enforcement officer of a local government that 
imposes an excise tax on cigarettes or smokeless tobacco may in a civil 
action obtain any appropriate relief, including money damages, civil 
penalties, and injunctive or other equitable relief where appropriate, 
against--
            ``(1) any person who violates, or is about to engage in a 
        violation of, section 2; or
            ``(2) any person who knowingly assists or participates, or 
        knowingly is about to engage, in such a violation.
    ``(b) Notice.--No attorney general of a State or chief law 
enforcement officer of a local government may commence an action 
pursuant to subsection (a) prior to 60 days after the State attorney 
general has given notice of his intent to commence the action to the 
Attorney General of the United States. If the Attorney General of the 
United States has commenced and is diligently prosecuting a civil 
action against the persons named in the notice for the violation 
described in the notice, then the State attorney general may not 
commence an action against that defendant for that violation but may 
join the United States Attorney General's action solely for the purpose 
of establishing and collecting State damages.
    ``(c) Limitations on Civil Actions by Local Governments.--The chief 
law enforcement officer of a local government may not bring any 
unconsented suit pursuant to this Act against any Federal, State, 
local, or tribal governmental entity.
    ``(d) Referrals of Local Violations for Enforcement.--The chief law 
enforcement officer of a local government may provide evidence of a 
violation of its excise tax on cigarettes or smokeless tobacco under 
section 2(a) of this Act to the Attorney General of the United States, 
the United States Attorney with jurisdiction over the locality, or the 
attorney general of the State in which the local government is located. 
Upon referral, the Attorney General of the United States or the United 
States Attorney shall take appropriate actions to enforce this Act.
    ``(e) Availability of Information.--The Attorney General of the 
United States shall make information about Federal, State, and other 
efforts to enforce this Act publicly available, through posting the 
information on the Internet and through other means.

``SEC. 4. CIVIL PENALTY.

    ``Whoever violates section 2 is subject to a civil penalty not to 
exceed $5,000 in the case of a first violation, and, in any other case, 
not to exceed $10,000 or, if it is higher, 5 percent of the gross 
revenue from interstate sales or distributions of cigarettes or 
smokeless tobacco by such person during the 1-year period ending on the 
date of the violation.

``SEC. 5. CRIMINAL PENALTIES.

    ``(a) Section 2(a) Violations.--Whoever violates section 2(a) shall 
be fined under title 18, United States Code, or imprisoned not more 
than 3 years, or both.
    ``(b) Section 2(b) Violations.--Whoever violates section 2(b) shall 
be guilty, fined under title 18, United States Code, or imprisoned not 
more than 6 months, or both.

``SEC. 6. NONPREEMPTION.

    ``This Act does not limit the remedies provided by State, tribal, 
Federal, or other law with respect to alleged violations of State, 
tribal, Federal, or other law relating to a sale or distribution of 
cigarettes or smokeless tobacco in connection with an interstate sale 
or distribution of cigarettes or smokeless tobacco. Nothing in this Act 
shall be construed to prohibit an authorized State or local government 
official from proceeding in State court or taking other enforcement 
actions on the basis of alleged violations of State or other law, or an 
authorized tribal government official from proceeding in tribal court 
or taking other enforcement action, on the basis of alleged violations 
of tribal or other law.

``SEC. 7. EXCLUSIONS REGARDING INDIAN TRIBES AND TRIBAL MATTERS.

    ``(a) Indian Country.--The provisions of this Act relating to State 
tax collection do not apply to a sale of cigarettes or smokeless 
tobacco that occurs exclusively in Indian country (as defined in 
section 1151 of title 18, United States Code) owned or occupied by an 
Indian tribe to a consumer located in that Indian Country who is an 
individual member of the same Indian tribe.
    ``(b) Intergovernmental Arrangements.--Nothing in this Act is 
intended nor shall be construed to affect, amend, or modify--
            ``(1) any agreement, compact, or other intergovernmental 
        arrangement between any State or local government and any 
        Indian tribe relating to the collection of taxes on cigarettes 
        or smokeless tobacco sold on tribal lands; or
            ``(2) any State law that pertains to any such 
        intergovernmental arrangement or creates special rules or 
        procedures for the collection of State, local, or tribal taxes 
        on cigarettes or smokeless tobacco sold on tribal lands.
    ``(c) Coordinated Law Enforcement Efforts.--Nothing in this Act 
shall be construed to inhibit or otherwise affect any coordinated law 
enforcement effort by one or more States or other jurisdictions, 
including Indian tribes, through interstate compact or otherwise, 
that--
            ``(1) provides for the administration of tobacco product 
        laws or laws pertaining to interstate sales or other sales of 
        tobacco products;
            ``(2) provides for the seizure of tobacco products or other 
        property related to a violation of such laws; or
            ``(3) establishes cooperative programs for the 
        administration of such laws.

``SEC. 8. DEFINITIONS.

    ``As used in this Act--
            ``(1) the term `attorney general', with respect to a State, 
        means the chief law enforcement officer of that State, or the 
        designee of that officer;
            ``(2) the term `cigarette' means--
                    ``(A) any roll of tobacco wrapped in paper or in 
                any substance not containing tobacco which is to be 
                heated or burned;
                    ``(B) any roll of tobacco wrapped in any substance 
                containing tobacco that, because of its appearance, the 
                type of tobacco used in the filler, or its packaging or 
                labeling is likely to be offered to, or purchased by 
                consumers as a cigarette described in subparagraph (A);
                    ``(C) any roll of tobacco wrapped in any substance 
                that because of its appearance, the type of tobacco 
                used in the filler, or its packaging or labeling is 
                likely to be offered to, or purchased by consumers as a 
                cigarette; or
                    ``(D) loose rolling tobacco that, because of its 
                appearance, type, packaging, or labeling, is likely to 
                be offered to, or purchased by, consumers as tobacco 
                for making cigarettes;
            ``(3) the term `smokeless tobacco' means any product 
        intended or marketed for human consumption containing finely 
        cut, ground, powdered, leaf, or other tobacco that is intended 
        to be placed in the oral or nasal cavity or otherwise consumed 
        without being combusted;
            ``(4) the term `interstate sale of cigarettes or smokeless 
        tobacco' means any sale of cigarettes or smokeless tobacco in 
        interstate or foreign commerce to a person, other than a person 
        licensed or otherwise authorized as a distributor, wholesaler, 
        or retailer in the State where the cigarettes or smokeless 
        tobacco is delivered, in which--
                    ``(A) the buyer 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 not in the physical 
                presence of the buyer when the request for purchase or 
                order is made; or
                    ``(B) the cigarettes or smokeless tobacco are 
                delivered by use of a common carrier, private delivery 
                service, or the mails, or the seller is not in the 
                physical presence of the buyer when the buyer obtains 
                physical possession of the delivered cigarettes or 
                smokeless tobacco;
            ``(5) the term `interstate or foreign commerce' means 
        commerce between a State and any place outside that State, 
        commerce between a State and any Indian lands in that State, or 
        commerce between points in the same State but through any place 
        outside that State;
            ``(6) the term `interstate distribution of cigarettes or 
        smokeless tobacco' means a delivery or other distribution of 
        cigarettes or smokeless tobacco pursuant to an interstate sale 
        of cigarettes or smokeless tobacco;
            ``(7) the term `State' means a State of the United States, 
        the District of Columbia, the Commonwealth of Puerto Rico, or 
        any territory or possession of the United States;
            ``(8) the term `person' means an individual, a corporation, 
        company, association, firm, partnership, society, joint stock 
        company, an Indian tribal organization, or an Indian tribal 
        government;
            ``(9) the term `tribal organization' has the meaning given 
        that term in section 4 of the Indian Self-Determination and 
        Education Assistance Act (25 U.S.C. 450b); and
            ``(10) the term `Indian lands' has the meaning given that 
        term in section 3 of the Archaeological Resources Protection 
        Act of 1979 (16 U.S.C. 470bb).''.

SEC. 3. SENSE OF CONGRESS CONCERNING THE PRECEDENTIAL EFFECT OF THIS 
              ACT.

     It is the sense of Congress that unique harms are associated with 
the remote interstate sales of cigarette and smokeless tobacco, 
including problems associated with verifying the legal age of consumers 
and long-term negative health effects associated with the continued use 
of these products. This Act further affirms Congress' longstanding 
interest in encouraging compliance and enforcement of State laws that 
relate to the remote sales, including internet sales, of these specific 
harmful products. Enacted more than 50 years ago, the Jenkins Act 
established reporting requirements for remote interstate sellers of 
cigarettes in order to reduce incentives for smuggling and to help 
states enforce tobacco taxes. In light of the unique federal policy and 
historic distinctions between cigarettes and smokeless tobacco and 
other products, the requirements of this Act are in no way meant to 
create, and ought not be considered, precedent regarding the collection 
of State sales or use taxes by out-of-state entities that lack a 
physical presence within the taxing State.

SEC. 4. EFFECTIVE DATE.

    The amendment made by this Act shall take effect on the first day 
of the first month beginning on or after 60 days after the date of the 
enactment of this Act.
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