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

                                                  Union Calendar No. 60
111th CONGRESS
  1st Session
                                H. R. 1676

                          [Report No. 111-117]

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


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 23, 2009

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

                              May 18, 2009

    Additional sponsors: Mr. Smith of Texas, Mr. Cohen, and Mr. Issa

                              May 18, 2009

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]
 [For text of introduced bill, see copy of bill as introduced on March 
                               23, 2009]

_______________________________________________________________________

                                 A BILL


 
 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, make 
        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', with 
        respect to a State, means the attorney general or other chief 
        law enforcement officer of the State, or the designee of that 
        officer.
            ``(2) 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.
            ``(3) 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.
            ``(4) 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.
            ``(5) 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.
            ``(6) Delivery seller.--The term `delivery seller' means a 
        person who makes a delivery sale.
            ``(7) 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.
            ``(8) 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).
            ``(9) 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.
            ``(10) 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.
            ``(11) 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.
            ``(12) 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.
            ``(13) 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.
            ``(14) 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.
            ``(15) 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.
            ``(16) 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 of the United 
                        States 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 not otherwise 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.--Notwithstanding any other 
                provision of law, 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 of the United States 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 
                of the United States 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) at the discretion of the 
                                Attorney General of the United States, 
                                to any other persons; 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 of the United States shall include, 
                for each delivery seller on the list described in 
                subparagraph (A)--
                            ``(i) all names the delivery seller uses in 
                        the transaction of its business or on packages 
                        delivered to customers;
                            ``(ii) all addresses from which the 
                        delivery seller does business or ships 
                        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 of the United 
                States 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 of the United States regularly 
                updates.
                    ``(D) State, local, or tribal additions.--The 
                Attorney General of the United States 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 the list under 
                        paragraph (1), 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 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 the 
                listed delivery sellers the delivery sellers' 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 Fed Ex 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)--
                            ``(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, in its discretion, 
                        either provide the package and its contents to 
                        a Federal, State, or local law enforcement 
                        agency or destroy the package and its contents.
                    ``(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 of the United States 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 the person 
                receiving records under subparagraph (B) 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 prohibit, 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 
                        falls within the provisions of sections 
                        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 
                2008, 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 was not entitled to an exemption 
                referred to in 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 of the 
                United States 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 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 lands.
                    ``(B) Updates.--Any government providing a list to 
                the Attorney General of the United States under 
                subparagraph (A) shall also provide updates and 
                corrections every 4 months until such time as such 
                government notifies the Attorney General of the United 
                States in writing that such government no longer 
                desires to submit such information to supplement the 
                list maintained and distributed by the Attorney General 
                of the United States 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 of the United States shall remove from the list 
                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 of the United States 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 of the 
                United States; 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 another 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 of the United States 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 or otherwise obligated 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) not, as a matter of regular practice 
                        and procedure, making 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 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 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) 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 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) an employee of the common carrier or 
                        independent delivery service who physically 
                        receives and processes orders, picks up 
                        packages, processes packages, or makes 
                        deliveries, takes actions that are outside the 
                        scope of employment of the employee in the 
                        course of the violation, 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 of 
the United States 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 designee thereof), or a local government 
                or Indian tribe that levies a tax subject to section 
                2A(a)(3), through its chief law enforcement officer (or 
                a designee thereof), may bring an action in a United 
                States district court to prevent and restrain 
                violations of this Act by any person (or by any person 
                controlling such person) or to obtain any other 
                appropriate relief from any person (or from any person 
                controlling such 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 (or a designee thereof), 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 of the United 
        States 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 of the United States 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 a 
United States district court to prevent and restrain violations of this 
Act by any person (or by any person controlling such 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 United States 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 United States of the action.
    ``(f) Public Notice.--
            ``(1) In general.--The Attorney General of the United 
        States shall make available to the public, by posting such 
        information on the Internet and by other appropriate means, 
        information regarding all enforcement actions undertaken by the 
        Attorney General or United States attorneys, or reported to the 
        Attorney General, under this section, including information 
        regarding the resolution of such actions and how the Attorney 
        General and the United States attorney have responded to 
        referrals of evidence of violations pursuant to subsection 
        (c)(2).
            ``(2) Reports to congress.--The Attorney General shall 
        submit to Congress each year 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 (as that term is defined in 
section 1 of the Act of October 19, 1949, commonly referred to as the 
Jenkins Act) and smokeless tobacco (as that term is 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; 
        and
            ``(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, if the Postal Service issues a final rule 
        establishing the standards and requirements that apply to all 
        such mailings and which includes 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 2008 for a period of at 
                least three years.
                    ``(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 mailings shall be delivered only to 
                verified adult employees of the recipient businesses or 
                government agencies who shall be required to sign for 
                the mailing.
            ``(4) Certain individuals.--Tobacco products mailed by 
        individual adult people for noncommercial, nonbusiness and non-
        money making purposes, including the return of a damaged or 
        unacceptable tobacco product to its manufacturer, if the Postal 
        Service issues a final rule establishing the standards and 
        requirements that applies to all such mailings and which 
        includes 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 person identified on the return address 
                label of the package and is an adult.
                    ``(B) For mailings to individual persons 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 mailings 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 person who is not a 
                verified adult. For mailings to individual persons, 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.--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 exception shall contain no more than one carton of 
                cigarettes (200 cigarettes);
                    ``(C) no individual shall receive more than 1 
                package of cigarettes per manufacturer pursuant to this 
                exception in any 30-day period;
                    ``(D) all taxes as required by law 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) the recipient has not made any payments of 
                any kind in exchange for receiving the cigarettes;
                    ``(F) the mailings are made pursuant to a final 
                rule that the Postal Service shall issue to establish 
                standards and requirements that apply to all such 
                mailings and that 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 or an agent legally authorized by 
                        the manufacturer to submit the tobacco product 
                        into the mails on the manufacturer's behalf 
                        permitted to make such mailings pursuant to 
                        this paragraph.
                            ``(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 a single carton 
                        (200) 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.
                            ``(v) 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 
                        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 adult.--For the purposes of paragraphs 
        (3), (4), and (5), the term `adult' means an individual person 
        of at least 21 years of age.
    ``(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 chapter 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 designee 
        thereof), or a local government or Indian tribe that levies an 
        excise tax on tobacco products, through its chief law 
        enforcement officer (or a designee thereof), 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 (or a 
        designee thereof), may provide evidence of a violation of 
        paragraph (1) for commercial, business or money-making purposes 
        by any person not subject to State, local, or tribal government 
        enforcement actions for violations of paragraph (1) to the 
        Attorney General of the United States or a United States 
        attorney, 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, or 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 the United States district 
        courts to prevent and restrain violations of subsection (a) by 
        any person (or by any person controlling such 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 willfully 
        and 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 of the United States may administer and enforce 
        subsection (a).
    (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 violates paragraph (1), or an order issued under 
paragraph (2), shall be subject to a civil penalty in an amount not to 
exceed $10,000 for each violation.''.

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

    (a) In General.--Nothing in this Act or the amendments made by this 
Act is intended nor shall be construed to affect, amend, or modify--
            (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 is intended, and shall not 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 is intended to prohibit, limit, or restrict 
enforcement by the Attorney General of the United States 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 on going 
        tobacco diversion investigations in the United States, and 
        where applicable with law enforcement organizations around the 
        world within the Bureau of Alcohol, Tobacco, Firearms, and 
        Explosives,
            (3) establish 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, 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 5 
fiscal years.

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, or an 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 it 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.
                                                  Union Calendar No. 60

111th CONGRESS

  1st Session

                               H. R. 1676

                          [Report No. 111-117]

_______________________________________________________________________

                                 A BILL

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

_______________________________________________________________________

                              May 18, 2009

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed