[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1676 Engrossed in House (EH)]

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.

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

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''.
    (b) Findings.--Congress finds that--
            (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;
            (2) Hezbollah, Hamas, al Qaeda, and other terrorist 
        organizations have profited from trafficking in illegal 
        cigarettes or counterfeit cigarette tax stamps;
            (3) terrorist involvement in illicit cigarette trafficking 
        will continue to grow because of the large profits such 
        organizations can earn;
            (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;
            (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;
            (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;
            (7) with rising State and local tobacco tax rates, the 
        incentives for the illegal sale of cigarettes and smokeless 
        tobacco have increased;
            (8) the number of active tobacco investigations being 
        conducted by the Bureau of Alcohol, Tobacco, Firearms, and 
        Explosives rose to 452 in 2005;
            (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; and
            (10) the intrastate sale of illegal cigarettes and 
        smokeless tobacco over the Internet has a substantial effect on 
        interstate commerce.
    (c) Purposes.--It is the purpose of this Act to--
            (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;
            (2) create strong disincentives to illegal smuggling of 
        tobacco products;
            (3) provide government enforcement officials with more 
        effective enforcement tools to combat tobacco smuggling;
            (4) make it more difficult for cigarette and smokeless 
        tobacco traffickers to engage in and profit from their illegal 
        activities;
            (5) increase collections of Federal, State, and local 
        excise taxes on cigarettes and smokeless tobacco; and
            (6) prevent and reduce youth access to inexpensive 
        cigarettes and smokeless tobacco through illegal Internet or 
        contraband sales.

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:

``SECTION 1. DEFINITIONS.

    ``As used in this Act, the following definitions apply:
            ``(1) Attorney general.--The term `Attorney General' means 
        the Attorney General of the United States.
            ``(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.
            ``(3) Cigarette.--
                    ``(A) In general.--For purposes of this Act, the 
                term `cigarette' shall--
                            ``(i) have the same meaning given that term 
                        in section 2341 of title 18, United States 
                        Code; and
                            ``(ii) include `roll-your-own tobacco' (as 
                        that term is defined in section 5702 of the 
                        Internal Revenue Code of 1986).
                    ``(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.
            ``(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.
            ``(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.
            ``(6) Delivery sale.--The term `delivery sale' means any 
        sale of cigarettes or smokeless tobacco to a consumer if--
                    ``(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; or
                    ``(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.
            ``(7) Delivery seller.--The term `delivery seller' means a 
        person who makes a delivery sale.
            ``(8) Indian country.--The term `Indian country' means--
                    ``(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; 
                and
                    ``(B) any other land held by the United States in 
                trust or restricted status for one or more Indian 
                tribes.
            ``(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).
            ``(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.
            ``(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.
            ``(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.
            ``(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.
            ``(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.
            ``(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.
            ``(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.
            ``(17) Use.--The term `use', in addition to its ordinary 
        meaning, means the consumption, storage, handling, or disposal 
        of cigarettes or smokeless tobacco.''.
    (b) Reports to State Tobacco Tax Administrators.--Section 2 of the 
Jenkins Act (15 U.S.C. 376) is amended--
            (1) by striking ``cigarettes'' each place it appears and 
        inserting ``cigarettes or smokeless tobacco'';
            (2) in subsection (a)--
                    (A) in the matter preceding paragraph (1)--
                            (i) by inserting ``Contents.--'' after 
                        ``(a)'';
                            (ii) by striking ``or transfers'' and 
                        inserting ``, transfers, or ships'';
                            (iii) by inserting ``, locality, or Indian 
                        country of an Indian tribe'' after ``a State'';
                            (iv) by striking ``to other than a 
                        distributor licensed by or located in such 
                        State,''; and
                            (v) by striking ``or transfer and 
                        shipment'' and inserting ``, transfer, or 
                        shipment'';
                    (B) in paragraph (1)--
                            (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''; and
                            (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;'';
                    (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''; 
                and
                    (D) by adding at the end the following:
            ``(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.'';
            (3) in subsection (b)--
                    (A) by inserting ``Presumptive Evidence.--'' after 
                ``(b)'';
                    (B) by striking ``(1) that'' and inserting 
                ``that''; and
                    (C) by striking ``, and (2)'' and all that follows 
                and inserting a period; and
            (4) by adding at the end the following:
    ``(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.''.
    (c) Requirements for Delivery Sales.--The Jenkins Act is amended by 
inserting after section 2 the following:

``SEC. 2A. DELIVERY SALES.

    ``(a) In General.--With respect to delivery sales into a specific 
State and place, each delivery seller shall comply with--
            ``(1) the shipping requirements set forth in subsection 
        (b);
            ``(2) the recordkeeping requirements set forth in 
        subsection (c);
            ``(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--
                    ``(A) excise taxes;
                    ``(B) licensing and tax-stamping requirements;
                    ``(C) restrictions on sales to minors; and
                    ``(D) other payment obligations or legal 
                requirements relating to the sale, distribution, or 
                delivery of cigarettes or smokeless tobacco; and
            ``(4) the tax collection requirements set forth in 
        subsection (d).
    ``(b) Shipping and Packaging.--
            ``(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'.
            ``(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.
            ``(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.
            ``(4) Age verification.--
                    ``(A) In general.--A delivery seller who mails or 
                ships tobacco products--
                            ``(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;
                            ``(ii) shall use a method of mailing or 
                        shipping that requires--
                                    ``(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; and
                                    ``(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; and
                            ``(iii) shall not accept a delivery sale 
                        order from a person without--
                                    ``(I) obtaining the full name, 
                                birth date, and residential address of 
                                that person; and
                                    ``(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.
                    ``(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.
    ``(c) Records.--
            ``(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.
            ``(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.
            ``(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.
    ``(d) Delivery.--
            ``(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--
                    ``(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 
                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; and
                    ``(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.
            ``(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.
    ``(e) List of Unregistered or Noncompliant Delivery Sellers.--
            ``(1) In general.--
                    ``(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--
                            ``(i) distribute the list to--
                                    ``(I) the attorney general and tax 
                                administrator of every State;
                                    ``(II) common carriers and other 
                                persons that deliver small packages to 
                                consumers in interstate commerce, 
                                including the United States Postal 
                                Service; and
                                    ``(III) any other persons who the 
                                Attorney General believes can promote 
                                the effective enforcement of this Act; 
                                and
                            ``(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.
                    ``(B) List contents.--To the extent known, the 
                Attorney General shall include, for each delivery 
                seller on the list described in subparagraph (A)--
                            ``(i) all names the delivery seller uses or 
                        has used in the transaction of its business or 
                        on packages delivered to customers;
                            ``(ii) all addresses from which the 
                        delivery seller does or has done business, or 
                        ships or has shipped cigarettes or smokeless 
                        tobacco;
                            ``(iii) the website addresses, primary e-
                        mail address, and phone number of the delivery 
                        seller; and
                            ``(iv) any other information that the 
                        Attorney General determines would facilitate 
                        compliance with this subsection by recipients 
                        of the list.
                    ``(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.
                    ``(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).
                    ``(E) Accuracy and completeness of list of 
                noncomplying delivery sellers.--In preparing and 
                revising the list required by subparagraph (A), the 
                Attorney General shall--
                            ``(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;
                            ``(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;
                            ``(iii) provide an opportunity to such 
                        delivery seller to challenge placement on such 
                        list;
                            ``(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; 
                        and
                            ``(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.
                    ``(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.
            ``(2) Prohibition on delivery.--
                    ``(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--
                            ``(i) the person making the delivery knows 
                        or believes in good faith that the item does 
                        not include cigarettes or smokeless tobacco;
                            ``(ii) the delivery is made to a person 
                        lawfully engaged in the business of 
                        manufacturing, distributing, or selling 
                        cigarettes or smokeless tobacco; or
                            ``(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.
                    ``(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.
                    ``(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.
            ``(3) Shipments from persons on list.--
                    ``(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--
                            ``(i) the person ordering the delivery 
                        shall be obligated to pay--
                                    ``(I) the common carrier or other 
                                delivery service as if the delivery of 
                                the package had been timely completed; 
                                and
                                    ``(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; and
                            ``(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.
                    ``(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.
                    ``(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.
            ``(4) Preemption.--
                    ``(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--
                            ``(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;
                            ``(ii) requiring that the common carrier or 
                        other delivery service obtain a signature from 
                        the consumer accepting the delivery;
                            ``(iii) requiring that the common carrier 
                        or other delivery service verify that all 
                        applicable taxes have been paid;
                            ``(iv) requiring that packages delivered by 
                        the common carrier or other delivery service 
                        contain any particular labels, notice, or 
                        markings; or
                            ``(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.
                    ``(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--
                            ``(i) section 14501(c)(1) or 41713(b)(4) of 
                        title 49, United States Code;
                            ``(ii) any other restrictions in Federal 
                        law on the ability of State, local, or tribal 
                        governments to regulate common carriers; or
                            ``(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.
                    ``(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.
            ``(5) State, local, and tribal additions.--
                    ``(A) In general.--Any State, local, or tribal 
                government shall provide the Attorney General with--
                            ``(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; and
                            ``(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.
                    ``(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).
                    ``(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.
            ``(6) Deadline to incorporate additions.--The Attorney 
        General shall--
                    ``(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; and
                    ``(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).
            ``(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.
            ``(8) Limitations.--
                    ``(A) In general.--Any common carrier or other 
                person making a delivery subject to this subsection 
                shall not be required or otherwise obligated to--
                            ``(i) determine whether any list 
                        distributed or made available under paragraph 
                        (1) is complete, accurate, or up-to-date;
                            ``(ii) determine whether a person ordering 
                        a delivery is in compliance with this Act; or
                            ``(iii) open or inspect, pursuant to this 
                        Act, any package being delivered to determine 
                        its contents.
                    ``(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).
                    ``(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--
                            ``(i) not making any specific delivery, or 
                        any deliveries at all, on behalf of any person 
                        on the list under paragraph (1);
                            ``(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; or
                            ``(iii) delaying or not making a delivery 
                        for any person because of reasonable efforts to 
                        comply with this Act.
                    ``(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.
    ``(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.''.
    (d) Penalties.--The Jenkins Act is amended by striking section 3 
and inserting the following:

``SEC. 3. PENALTIES.

    ``(a) Criminal Penalties.--
            ``(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.
            ``(2) Exceptions.--
                    ``(A) Governments.--Paragraph (1) shall not apply 
                to a State, local, or tribal government.
                    ``(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--
                            ``(i) as consideration for the receipt of, 
                        or as consideration for a promise or agreement 
                        to pay, anything of pecuniary value; or
                            ``(ii) for the purpose of assisting a 
                        delivery seller to violate, or otherwise 
                        evading compliance with, section 2A.
    ``(b) Civil Penalties.--
            ``(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--
                    ``(A) in the case of a delivery seller, the greater 
                of--
                            ``(i) $5,000 in the case of the first 
                        violation, or $10,000 for any other violation; 
                        or
                            ``(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.
                    ``(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.
            ``(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.
            ``(3) Exceptions.--
                    ``(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--
                            ``(i) as consideration for the receipt of, 
                        or as consideration for a promise or agreement 
                        to pay, anything of pecuniary value; or
                            ``(ii) for the purpose of assisting a 
                        delivery seller to violate, or otherwise 
                        evading compliance with, section 2A.
                    ``(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--
                            ``(i) the common carrier or independent 
                        delivery service has implemented and enforces 
                        effective policies and practices for complying 
                        with that section; or
                            ``(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).''.
    (e) Enforcement.--The Jenkins Act is amended by striking section 4 
and inserting the following:

``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.
    ``(b) Authority of the Attorney General.--The Attorney General 
shall administer and enforce the provisions of this Act.
    ``(c) State, Local, and Tribal Enforcement.--
            ``(1) In general.--
                    ``(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.
                    ``(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.
            ``(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.
            ``(3) Use of penalties collected.--
                    ``(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.
                    ``(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.
            ``(4) Nonexclusivity of remedy.--
                    ``(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.
                    ``(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.
                    ``(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.
                    ``(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.
    ``(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.
    ``(e) Notice.--
            ``(1) Persons dealing in tobacco products.--Any person who 
        commences a civil action under subsection (d) shall inform the 
        Attorney General of the action.
            ``(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.
    ``(f) Public Notice.--
            ``(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).
            ``(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).''.

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:
``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--
            ``(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; 
        or
            ``(2) the placement of the person on the list created under 
        section 2A(e) of the Jenkins Act.
    ``(b) Exceptions.--This section shall not apply to the following:
            ``(1) Cigars.--Cigars (as that term is defined in section 
        5702(a) of the Internal Revenue Code of 1986).
            ``(2) Geographic exception.--Mailings within the State of 
        Alaska or within the State of Hawaii.
            ``(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:
                    ``(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.
                    ``(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.
                    ``(C) The mailings shall be sent through the Postal 
                Service's systems that provide for the tracking and 
                confirmation of the delivery.
                    ``(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.
                    ``(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.
                    ``(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.
            ``(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:
                    ``(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.
                    ``(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.
                    ``(C) The package shall not weigh more than 10 
                ounces.
                    ``(D) The mailing shall be sent through the Postal 
                Service's systems that provide for the tracking and 
                confirmation of the delivery.
                    ``(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.
                    ``(F) No person shall initiate more than ten such 
                mailings in any thirty-day period.
            ``(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--
                    ``(A) the cigarette manufacturer has a federal 
                permit, in good standing, pursuant to section 5713 of 
                the Internal Revenue Code of 1986;
                    ``(B) any package of cigarettes mailed pursuant to 
                this paragraph shall contain no more than 12 packs of 
                cigarettes (240 cigarettes);
                    ``(C) no individual shall receive more than 1 
                package of cigarettes per manufacturer pursuant to this 
                paragraph in any 30-day period;
                    ``(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;
                    ``(E)(i) the recipient has not made any payments of 
                any kind in exchange for receiving the cigarettes;
                    ``(ii) the recipient is paid a fee by the 
                manufacturer or manufacturer's agent for participation 
                in consumer product tests; and
                    ``(iii) the recipient, in connection with the 
                tests, evaluates the cigarettes and provides feedback 
                to the manufacturer or agent;
                    ``(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:
                            ``(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.
                            ``(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.
                            ``(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.
                            ``(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.
                            ``(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.
                            ``(vi) The Postal Service shall deliver the 
                        mailing only to the named recipient and only 
                        after verifying that the recipient is an adult.
            ``(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.
            ``(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.
            ``(8) Limitations.--Paragraph (5) shall not--
                    ``(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; or
                    ``(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.
            ``(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.
    ``(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.
    ``(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.
    ``(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.
    ``(f) Definition.--As used in this section, the term `State' has 
the meaning given that term in section 1716(k).
    ``(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.
    ``(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.''.
    (b) Actions by State, Local or Tribal Governments Relating to 
Certain Tobacco Products.--
            (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.
            (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.
            (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.
            (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.
            (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.
    (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:

``1716E. Tobacco products as nonmailable.''.

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.
    (b) Jurisdiction To Prevent and Restrain Violations.--
            (1) In general.--The United States district courts shall 
        have jurisdiction to prevent and restrain violations of 
        subsection (a) in accordance with this subsection.
            (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.
            (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).
            (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.
            (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.
            (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.
    (c) Definitions.--In this section the following definitions apply:
            (1) Delivery sale.--The term ``delivery sale'' means any 
        sale of cigarettes or smokeless tobacco to a consumer if--
                    (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; or
                    (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.
            (2) Importer.--The term ``importer'' means each of the 
        following:
                    (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.
                    (B) Manufacturing warehouses.--Any person who 
                removes cigars or cigarettes for sale or consumption in 
                the United States from a customs-bonded manufacturing 
                warehouse.
                    (C) Unlawful importing.--Any person who smuggles or 
                otherwise unlawfully brings tobacco products into the 
                United States.
            (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.
            (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.
            (5) Tobacco product manufacturer.--The term ``Tobacco 
        Product Manufacturer'' has the meaning given that term in 
        section II(uu) of the Master Settlement Agreement.

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:
    ``(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--
            ``(A) any records or information required to be maintained 
        by such person under the provisions of law referred to in this 
        chapter; or
            ``(B) any cigarettes or smokeless tobacco kept or stored by 
        such person at such premises.
    ``(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).
    ``(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.''.

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

SEC. 7. ENHANCED CONTRABAND TOBACCO ENFORCEMENT.

    (a) Requirements.--The Director of the Bureau of Alcohol, Tobacco, 
Firearms and Explosives shall--
            (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,
            (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,
            (3) establish a covert national warehouse for undercover 
        operations, and
            (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.
    (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.

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

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.

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.

            Passed the House of Representatives May 21, 2009.

            Attest:

                                                                 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.