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<bill bill-stage="Introduced-in-House" bill-type="olc" dms-id="H780CD5FAA4164494B7C77AD6E5C27127" public-private="public">
	<form>
		<distribution-code display="yes">I</distribution-code>
		<congress>111th CONGRESS</congress>
		<session>2d Session</session>
		<legis-num>H. R. 5178</legis-num>
		<current-chamber>IN THE HOUSE OF REPRESENTATIVES</current-chamber>
		<action>
			<action-date date="20100429">April 29, 2010</action-date>
			<action-desc><sponsor name-id="D000399">Mr. Doggett</sponsor> (for
			 himself, <cosponsor name-id="L000263">Mr. Levin</cosponsor>,
			 <cosponsor name-id="W000215">Mr. Waxman</cosponsor>,
			 <cosponsor name-id="W000792">Mr. Weiner</cosponsor>,
			 <cosponsor name-id="M000725">Mr. George Miller of California</cosponsor>,
			 <cosponsor name-id="V000128">Mr. Van Hollen</cosponsor>,
			 <cosponsor name-id="P000096">Mr. Pascrell</cosponsor>,
			 <cosponsor name-id="L000287">Mr. Lewis of Georgia</cosponsor>,
			 <cosponsor name-id="M000404">Mr. McDermott</cosponsor>,
			 <cosponsor name-id="D000096">Mr. Davis of Illinois</cosponsor>,
			 <cosponsor name-id="K000188">Mr. Kind</cosponsor>, <cosponsor name-id="B000574">Mr. Blumenauer</cosponsor>, <cosponsor name-id="S001156">Ms.
			 Linda T. Sánchez of California</cosponsor>, <cosponsor name-id="S000810">Mr.
			 Stark</cosponsor>, <cosponsor name-id="S001162">Ms. Schwartz</cosponsor>,
			 <cosponsor name-id="T000460">Mr. Thompson of California</cosponsor>,
			 <cosponsor name-id="B001247">Ms. Ginny Brown-Waite of Florida</cosponsor>,
			 <cosponsor name-id="D000216">Ms. DeLauro</cosponsor>,
			 <cosponsor name-id="E000215">Ms. Eshoo</cosponsor>,
			 <cosponsor name-id="I000057">Mr. Israel</cosponsor>,
			 <cosponsor name-id="J000032">Ms. Jackson Lee of Texas</cosponsor>,
			 <cosponsor name-id="K000180">Ms. Kilpatrick of Michigan</cosponsor>,
			 <cosponsor name-id="L000563">Mr. Lipinski</cosponsor>,
			 <cosponsor name-id="M000309">Mrs. McCarthy of New York</cosponsor>,
			 <cosponsor name-id="S000672">Mr. Snyder</cosponsor>,
			 <cosponsor name-id="S001174">Ms. Sutton</cosponsor>,
			 <cosponsor name-id="W000799">Mr. Walz</cosponsor>, <cosponsor name-id="W000800">Mr. Welch</cosponsor>, <cosponsor name-id="W000738">Ms.
			 Woolsey</cosponsor>, <cosponsor name-id="N000002">Mr. Nadler of New
			 York</cosponsor>, <cosponsor name-id="B000410">Mr. Berman</cosponsor>,
			 <cosponsor name-id="L000559">Mr. Langevin</cosponsor>,
			 <cosponsor name-id="D000197">Ms. DeGette</cosponsor>,
			 <cosponsor name-id="M000087">Mrs. Maloney</cosponsor>,
			 <cosponsor name-id="G000410">Mr. Gene Green of Texas</cosponsor>,
			 <cosponsor name-id="H000627">Mr. Hinchey</cosponsor>,
			 <cosponsor name-id="L000551">Ms. Lee of California</cosponsor>,
			 <cosponsor name-id="D000191">Mr. DeFazio</cosponsor>,
			 <cosponsor name-id="D000210">Mr. Delahunt</cosponsor>,
			 <cosponsor name-id="R000515">Mr. Rush</cosponsor>, <cosponsor name-id="M000133">Mr. Markey of Massachusetts</cosponsor>,
			 <cosponsor name-id="C000984">Mr. Cummings</cosponsor>,
			 <cosponsor name-id="F000116">Mr. Filner</cosponsor>,
			 <cosponsor name-id="L000397">Ms. Zoe Lofgren of California</cosponsor>,
			 <cosponsor name-id="M001163">Ms. Matsui</cosponsor>,
			 <cosponsor name-id="M001137">Mr. Meeks of New York</cosponsor>,
			 <cosponsor name-id="P000585">Mr. Platts</cosponsor>,
			 <cosponsor name-id="J000126">Ms. Eddie Bernice Johnson of Texas</cosponsor>,
			 <cosponsor name-id="P000596">Mr. Pierluisi</cosponsor>,
			 <cosponsor name-id="P000034">Mr. Pallone</cosponsor>,
			 <cosponsor name-id="C001036">Mrs. Capps</cosponsor>,
			 <cosponsor name-id="H001032">Mr. Holt</cosponsor>, <cosponsor name-id="S000522">Mr. Smith of New Jersey</cosponsor>,
			 <cosponsor name-id="W000793">Mr. Wu</cosponsor>, <cosponsor name-id="S000344">Mr. Sherman</cosponsor>, <cosponsor name-id="B001259">Mr.
			 Braley of Iowa</cosponsor>, <cosponsor name-id="E000288">Mr.
			 Ellison</cosponsor>, <cosponsor name-id="H001040">Mr. Hare</cosponsor>,
			 <cosponsor name-id="H000636">Mr. Hinojosa</cosponsor>,
			 <cosponsor name-id="H001034">Mr. Honda</cosponsor>,
			 <cosponsor name-id="C001067">Ms. Clarke</cosponsor>,
			 <cosponsor name-id="K000336">Mr. Kucinich</cosponsor>,
			 <cosponsor name-id="M001142">Mr. Matheson</cosponsor>,
			 <cosponsor name-id="S000480">Ms. Slaughter</cosponsor>,
			 <cosponsor name-id="T000266">Mr. Tierney</cosponsor>,
			 <cosponsor name-id="G000556">Mr. Grayson</cosponsor>,
			 <cosponsor name-id="S000248">Mr. Serrano</cosponsor>,
			 <cosponsor name-id="W000187">Ms. Waters</cosponsor>,
			 <cosponsor name-id="B001242">Mr. Bishop of New York</cosponsor>,
			 <cosponsor name-id="K000009">Ms. Kaptur</cosponsor>,
			 <cosponsor name-id="W000794">Ms. Watson</cosponsor>,
			 <cosponsor name-id="D000598">Mrs. Davis of California</cosponsor>,
			 <cosponsor name-id="G000551">Mr. Grijalva</cosponsor>,
			 <cosponsor name-id="F000030">Mr. Farr</cosponsor>, <cosponsor name-id="S000030">Ms. Loretta Sanchez of California</cosponsor>,
			 <cosponsor name-id="C001060">Mr. Carnahan</cosponsor>,
			 <cosponsor name-id="C001068">Mr. Cohen</cosponsor>,
			 <cosponsor name-id="N000179">Mrs. Napolitano</cosponsor>,
			 <cosponsor name-id="C001078">Mr. Connolly of Virginia</cosponsor>,
			 <cosponsor name-id="G000535">Mr. Gutierrez</cosponsor>,
			 <cosponsor name-id="S001165">Mr. Sires</cosponsor>,
			 <cosponsor name-id="B001230">Ms. Baldwin</cosponsor>,
			 <cosponsor name-id="O000085">Mr. Olver</cosponsor>,
			 <cosponsor name-id="P000149">Mr. Payne</cosponsor>,
			 <cosponsor name-id="R000581">Ms. Richardson</cosponsor>,
			 <cosponsor name-id="R000486">Ms. Roybal-Allard</cosponsor>,
			 <cosponsor name-id="L000480">Mrs. Lowey</cosponsor>,
			 <cosponsor name-id="M000312">Mr. McGovern</cosponsor>,
			 <cosponsor name-id="E000290">Ms. Edwards of Maryland</cosponsor>,
			 <cosponsor name-id="L000565">Mr. Loebsack</cosponsor>,
			 <cosponsor name-id="S001145">Ms. Schakowsky</cosponsor>,
			 <cosponsor name-id="F000339">Mr. Frank of Massachusetts</cosponsor>,
			 <cosponsor name-id="R000462">Mr. Rothman of New Jersey</cosponsor>,
			 <cosponsor name-id="A000210">Mr. Andrews</cosponsor>,
			 <cosponsor name-id="R000577">Mr. Ryan of Ohio</cosponsor>,
			 <cosponsor name-id="T000465">Ms. Tsongas</cosponsor>,
			 <cosponsor name-id="A000022">Mr. Ackerman</cosponsor>,
			 <cosponsor name-id="H001042">Ms. Hirono</cosponsor>,
			 <cosponsor name-id="O000006">Mr. Oberstar</cosponsor>,
			 <cosponsor name-id="C001037">Mr. Capuano</cosponsor>,
			 <cosponsor name-id="L000562">Mr. Lynch</cosponsor>,
			 <cosponsor name-id="S001168">Mr. Sarbanes</cosponsor>,
			 <cosponsor name-id="W000797">Ms. Wasserman Schultz</cosponsor>,
			 <cosponsor name-id="N000147">Ms. Norton</cosponsor>,
			 <cosponsor name-id="A000363">Mr. Arcuri</cosponsor>,
			 <cosponsor name-id="J000283">Mr. Jackson of Illinois</cosponsor>,
			 <cosponsor name-id="K000372">Ms. Kilroy</cosponsor>,
			 <cosponsor name-id="S001169">Mr. Sestak</cosponsor>,
			 <cosponsor name-id="K000113">Mr. Kennedy</cosponsor>,
			 <cosponsor name-id="H001039">Mr. Hall of New York</cosponsor>,
			 <cosponsor name-id="H001047">Mr. Himes</cosponsor>,
			 <cosponsor name-id="T000469">Mr. Tonko</cosponsor>,
			 <cosponsor name-id="M000933">Mr. Moran of Virginia</cosponsor>,
			 <cosponsor name-id="D000608">Mrs. Dahlkemper</cosponsor>,
			 <cosponsor name-id="H000213">Ms. Harman</cosponsor>,
			 <cosponsor name-id="M001140">Mr. Moore of Kansas</cosponsor>,
			 <cosponsor name-id="B001229">Mr. Baird</cosponsor>,
			 <cosponsor name-id="S001180">Mr. Schrader</cosponsor>, and
			 <cosponsor name-id="G000559">Mr. Garamendi</cosponsor>) introduced the
			 following bill; which was referred to the <committee-name committee-id="HWM00">Committee on Ways and Means</committee-name></action-desc>
		</action>
		<legis-type>A BILL</legis-type>
		<official-title>To amend the Internal Revenue Code to reduce tobacco
		  smuggling, and for other purposes.</official-title>
	</form>
	<legis-body id="H4C8610BA30A74B75B5EB7F44B1F2D7BB" style="OLC">
		<section display-inline="no-display-inline" id="H3981EE4429FF44B89F084876341B13D0" section-type="section-one"><enum>1.</enum><header>Short title and table of
			 contents</header>
			<subsection id="H030578CF43A647A9933B139D7B9318CB"><enum>(a)</enum><header>Short
			 title</header><text>This Act may be cited as the <quote><short-title>Smuggled Tobacco Prevention Act of
			 2010</short-title></quote> or the <quote><short-title>STOP
			 Act</short-title></quote>.</text>
			</subsection><subsection id="H084EFEEA7E514D2CB99B03E7D0C3CBB2"><enum>(b)</enum><header>Table of
			 contents</header><text>The table of contents of this Act is as follows:</text>
				<toc container-level="legis-body-container" lowest-bolded-level="division-lowest-bolded" lowest-level="section" quoted-block="no-quoted-block" regeneration="yes-regeneration">
					<toc-entry idref="H3981EE4429FF44B89F084876341B13D0" level="section">Sec. 1. Short title and table of contents.</toc-entry>
					<toc-entry idref="H4B134D5D319444ABB4A299C2D00F2408" level="title">Title I—Amendments to Internal Revenue Code of 1986</toc-entry>
					<toc-entry idref="H8DA853046CCF4F3DAA162963C4E18890" level="section">Sec. 101. Amendment of 1986 code.</toc-entry>
					<toc-entry idref="HD2859A459FFF4897A2B59095ABED3E9F" level="section">Sec. 102. Machines used to manufacture or package cigarettes or
				other tobacco products.</toc-entry>
					<toc-entry idref="HA5D6EFE74DD149359A4D69AB1535A29E" level="section">Sec. 103. Improved marking and labeling.</toc-entry>
					<toc-entry idref="HF20F9A904BD04C6FA62196C89E1F21C8" level="section">Sec. 104. Wholesalers and manufacturers, importers, and sellers
				of tobacco production machines required to have permit.</toc-entry>
					<toc-entry idref="HCC9DAA9987024F48A84E55800802F051" level="section">Sec. 105. Conditions of permit.</toc-entry>
					<toc-entry idref="HA553713BB4094588AD01F441D1319CFC" level="section">Sec. 106. Records to be maintained.</toc-entry>
					<toc-entry idref="H0039093CC77742E49A90E454F638524E" level="section">Sec. 107. Reports.</toc-entry>
					<toc-entry idref="H2E7F03326861476F838F56929ABE89D2" level="section">Sec. 108. Fraudulent offenses.</toc-entry>
					<toc-entry idref="H2F50A5D6E71648409AE3C5589D62032B" level="section">Sec. 109. Penalties.</toc-entry>
					<toc-entry idref="HB408FABA094E4016A59FAEA383707C1D" level="section">Sec. 110. Definitions.</toc-entry>
					<toc-entry idref="H45D34409F3B943B7B70E9D415A60E161" level="section">Sec. 111. Conforming amendments.</toc-entry>
					<toc-entry idref="H56C04FD9715D4E86A130BA5E74426983" level="section">Sec. 112. Effective date.</toc-entry>
					<toc-entry idref="HE32B1114CFAC4DBDB76EE470DDF0212E" level="title">Title II—Import Fraud</toc-entry>
					<toc-entry idref="H5B6876FD84784EFE9D5979B9AA97B8BC" level="section">Sec. 201. Maximum penalty for importation of tobacco products
				and cigarette papers and tubes by fraudulent means.</toc-entry>
				</toc>
			</subsection></section><title id="H4B134D5D319444ABB4A299C2D00F2408"><enum>I</enum><header>Amendments to
			 Internal Revenue Code of 1986</header>
			<section id="H8DA853046CCF4F3DAA162963C4E18890"><enum>101.</enum><header>Amendment of
			 1986 code</header><text display-inline="no-display-inline">Except as otherwise
			 expressly provided, whenever in this title an amendment or repeal is expressed
			 in terms of an amendment to, or repeal of, a section or other provision, the
			 reference shall be considered to be made to a section or other provision of the
			 Internal Revenue Code of 1986.</text>
			</section><section display-inline="no-display-inline" id="HD2859A459FFF4897A2B59095ABED3E9F"><enum>102.</enum><header>Machines used
			 to manufacture or package cigarettes or other tobacco products</header>
				<subsection display-inline="no-display-inline" id="H177BDEC61C7F4C6CA33AEB4456D3EFCD"><enum>(a)</enum><header>In
			 general</header><text display-inline="yes-display-inline">Section 5762
			 (relating to criminal penalties) is amended—</text>
					<paragraph id="HACB9F45D6DE94EA681679B43DEA2F38B"><enum>(1)</enum><text>by redesignating
			 subsection (b) as subsection (c), and</text>
					</paragraph><paragraph id="H01AE66A98927471F8213D1464D3A4A26"><enum>(2)</enum><text>by inserting after
			 subsection (a) the following new subsection:</text>
						<quoted-block display-inline="no-display-inline" id="H9AA2285A81B849738AD4DED3C5C4175B" style="OLC">
							<subsection id="H5CF843336D274C91B0A545CA59596DC3"><enum>(b)</enum><header>Machines used To
				manufacture, process, or package cigarettes or other tobacco products</header>
								<paragraph id="HFD4C3906C8834A1891068E419347D5E8"><enum>(1)</enum><header>Sale, lease,
				delivery of manufacturing machines to licensed persons</header><text display-inline="yes-display-inline">Any tobacco production machine may be sold,
				leased, imported, or delivered only to—</text>
									<subparagraph id="HD79D4AFA6BE846E2AE7B549C45B19803"><enum>(A)</enum><text>persons—</text>
										<clause id="H89851F05798249D6801BBEDF9965E4FC"><enum>(i)</enum><text>lawfully engaged
				in—</text>
											<subclause id="H6A52DB7F03304E2AB45DADA446C24407"><enum>(I)</enum><text>the sale, lease,
				or delivery of such machines,</text>
											</subclause><subclause id="H726FE5D87B5C4713ACE67001E51B10EC"><enum>(II)</enum><text>the manufacture
				or processing of tobacco products, or</text>
											</subclause><subclause id="H6CDFA7DF01B64A7ABC5487E652CB5809"><enum>(III)</enum><text display-inline="yes-display-inline">the application of unique identification
				markings onto tobacco product packages pursuant to section 5723, and</text>
											</subclause></clause><clause id="H2989BF160C934E1A8091F403336E004A"><enum>(ii)</enum><text>that have all
				Federal and State permits, registrations, and licenses required to engage in
				such activities, or</text>
										</clause></subparagraph><subparagraph id="HF12F02DCA64D44FE9949D1D668E2E310"><enum>(B)</enum><text display-inline="yes-display-inline">in the case of a machine which is meant and
				expected to be used by an individual to make tobacco products for his or her
				own personal use, such an individual.</text>
									</subparagraph></paragraph><paragraph id="H2229439F413249F29A3EF27611FD344B"><enum>(2)</enum><header>Sale, lease,
				delivery of machines to persons engaged in illegal manufacture of
				contraband</header><text display-inline="yes-display-inline">No tobacco
				production machine shall knowingly be manufactured for or be (directly or
				indirectly) sold, leased, delivered, imported, or otherwise made available to
				any person engaged in the illegal manufacture, distribution, or sale of
				counterfeit or contraband tobacco products, unique identification markings, or
				other tax-payment indicia.</text>
								</paragraph><paragraph id="HB1AFCC2E9EBF46E9AD0EE10145EAEBBD"><enum>(3)</enum><header>Rendering unused
				machines inoperable</header><text>Any tobacco production machine that is no
				longer being used as such shall be made irreparably inoperable for such use
				before being disposed of or put to any other use. This paragraph shall not
				apply to any such machines being kept solely for display or for historical
				purposes.</text>
								</paragraph><paragraph id="HDDECBC8A2C4F459398F759BCDDF78FBD"><enum>(4)</enum><header>Records</header>
									<subparagraph id="H64D8D04FECB94CF98EF9ACAD477CBE1A"><enum>(A)</enum><header>In
				general</header><text display-inline="yes-display-inline">Any person leasing,
				importing, exporting, or delivering a tobacco production machine shall maintain
				and keep records relating to any transfers or deliveries of the machine,
				including the name, address, other contact information, and any permit,
				registration, or license number of the person receiving delivery of the
				machine, or to whom the machine is leased or otherwise transferred, as the case
				may be.</text>
									</subparagraph><subparagraph id="H6490AD4A72A84745B0BA29E2DC52055A"><enum>(B)</enum><header>5-year holding
				period for records</header><text>Any record required to be maintained and kept
				under subparagraph (A) shall be kept for the 5-year period beginning on the
				first date such record is required to be so maintained and kept.</text>
									</subparagraph><subparagraph id="HA0EA39D05EDE45ACB23D2555F1E2F1F9"><enum>(C)</enum><header>Availability of
				records</header><text>Such records shall be made available to the Secretary and
				other Federal and State government law enforcement officials for inspection and
				audit upon request.</text>
									</subparagraph><subparagraph id="HE0673F7059CC4A29A57CFA9FB98579C8"><enum>(D)</enum><header>Safe
				harbor</header><text>An ordinary commercial record or invoice shall satisfy the
				requirements of this paragraph if such record describes the transaction and the
				related machine and provides the date of the transaction and the name, contact
				information, and any permit, registration, or license number of all parties to
				the transaction or acting as agents for those parties in regard to the
				transaction.</text>
									</subparagraph></paragraph><paragraph id="H294D9D87ADA14D21BF9B0363B548AA10"><enum>(5)</enum><header>Tobacco
				production machine</header><text display-inline="yes-display-inline">For
				purposes of this subsection, the term <term>tobacco production machine</term>
				means any machine (or component integral to the operation of such a machine)
				used to manufacture, process, or package tobacco products or to apply unique
				identification markings to packages of tobacco products.</text>
								</paragraph><paragraph commented="no" id="H8D5E8565939348CEB4E5E923385A7A92"><enum>(6)</enum><header>Violations</header>
									<subparagraph id="H58BBE3E4F57C4BA99ECAE8BE59DADD86"><enum>(A)</enum><header>In
				general</header><text>Whoever knowingly violates paragraph (1), (2), or (3)
				shall, for each offense, be fined not more than $10,000 or an amount equal to 3
				times the fair market value of the tobacco product machine involved (whichever
				is greater), or imprisoned not more than five years, or both.</text>
									</subparagraph><subparagraph id="HC582C20D9C4F4A66AB8A8A2CA4231069"><enum>(B)</enum><header>Recordkeeping</header><text>Whoever
				knowingly violates paragraph (4) shall, for each offense, be fined not more
				than
				$10,000.</text>
									</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
					</paragraph></subsection><subsection id="H8932321D9E7F42648509405B9AD3105C"><enum>(b)</enum><header>Conforming
			 amendment</header><text>Subsection (c) of section 5762 (as so redesignated) is
			 amended by striking <quote>subsection (a)</quote> and inserting
			 <quote>subsections (a) and (b)</quote>.</text>
				</subsection><subsection id="H8DC4E67B42B34220B8CF6221A593AF30"><enum>(c)</enum><header>Effective
			 date</header><text>The amendment made by this section shall apply to sales,
			 leases, and transfers more than 6 months after the date of the enactment of
			 this Act.</text>
				</subsection></section><section id="HA5D6EFE74DD149359A4D69AB1535A29E"><enum>103.</enum><header>Improved
			 marking and labeling</header>
				<subsection id="HF8F11B2A8B494C0290779EFA6458CDBA"><enum>(a)</enum><header>In
			 general</header><text display-inline="yes-display-inline">Section 5723
			 (relating to packages, marks, labels, and notices) is amended—</text>
					<paragraph id="H97D9653BF8C243548F9598B3F94FF63F"><enum>(1)</enum><text>by striking
			 <quote>, if any,</quote> in subsection (b),</text>
					</paragraph><paragraph id="H044C577F939F4BDF8C9C22F508475A02"><enum>(2)</enum><text>by adding at the
			 end of subsection (b) the following:</text>
						<quoted-block display-inline="yes-display-inline" id="H03D887FF931C46DBA6DB9E5F96DC3C6B" style="OLC">
							<text>Such
			 marks, labels, and notices shall include marks and notices relating to the
			 following:</text><paragraph id="HDDF53B6F332B4DC7B7EB7C0D52EDF73A"><enum>(1)</enum><header>General
				requirements for domestic market</header><text display-inline="yes-display-inline">Each person who is a manufacturer or
				importer of tobacco products shall (in accordance with final regulations
				promulgated by the Secretary) ensure that, before the product leaves the
				person’s custody, a unique identification marking is affixed to or forms part
				of each package of tobacco product manufactured or imported by such person for
				sale or distribution. To facilitate efficient tracking and tracing of tobacco
				products through the distribution system, all manufacturers or importers of
				tobacco products shall, in addition to such unique identification marking,
				also, in accordance with regulations prescribed by the Secretary, ensure that
				unique identification markings are affixed to or form part of aggregate packing
				modes (such as cartons, cases, and master cases for cigarettes). The Secretary
				shall determine the size, location, and methods for such markings. The
				Secretary shall establish regulations requiring that all persons within the
				distribution chain, up to but not including the ultimate retailer, utilize the
				unique identification markings on aggregate packing modes to facilitate the
				tracking and tracing of tobacco product through the distribution system.</text>
							</paragraph><paragraph id="H91EEBD5F9C76494A98E816F4580034A5"><enum>(2)</enum><header>Marking
				requirements for exports</header><text>A unique identification marking shall be
				affixed to or form part of each package of tobacco product that is exported, or
				sold for export, that distinguishes it from those products intended for
				distribution or sale within the United States. The Secretary shall by
				regulation prescribe the size, location, and other characteristics of such
				marking, and it may contain a serial number that is assigned to the country of
				export.</text>
							</paragraph><paragraph id="H6EDFE19D19B549A6BAC5EA070CA2678E"><enum>(3)</enum><header>Authorization of
				federal unique identification marking</header><text>Not later than 1 year after
				the date of the enactment of the Smuggled Tobacco Prevention Act of 2010, the
				Secretary shall by regulation require the use of a unique identification
				marking on all products subject to tax under this
				chapter.</text>
							</paragraph><after-quoted-block>,
				and</after-quoted-block></quoted-block>
					</paragraph><paragraph id="H7471027B4AB94A7FA42A7C15D55266B4"><enum>(3)</enum><text>by adding at the
			 end the following new subsection:</text>
						<quoted-block id="HB66D515F054E4D7F8253B3E00244DF56" style="OLC">
							<subsection id="HF06DB3F39C9A49878E1A7AE5AE09F0D5"><enum>(f)</enum><header>Unique
				identification marking</header>
								<paragraph id="H0EEFCD7C42804E35B6E75404816E3FC1"><enum>(1)</enum><header>In
				general</header><text>No tobacco product may be sold, offered for sale,
				distributed, or otherwise delivered for final sale to any consumer in the
				United States unless the unique identification marking that meets the
				requirements of this section (and any regulations prescribed thereunder) is
				affixed to or forms part of the package in which it is contained. No person
				shall deliver or mail tobacco products unless the tax imposed by this chapter
				with respect to such product has been paid and the unique identification
				marking required under this section is affixed to or forms part of the package
				containing such product.</text>
								</paragraph><paragraph id="HD7AFE8060B024D6DAC37A9A19184E7B5"><enum>(2)</enum><header>System
				specifications</header>
									<subparagraph id="H24D0125CABD745B396D82B7DF8A944A3"><enum>(A)</enum><text>The Secretary
				shall design such system to coordinate and avoid interference with State and
				local tax stamps and markings, facilitate collection of the tax imposed by this
				chapter, impede contraband tobacco trafficking, minimize counterfeit marking,
				allow for more effective tracking and tracing of tobacco products, facilitate
				the enforcement of related Federal laws, and utilize such available technology
				as may promote the purposes of this chapter.</text>
									</subparagraph><subparagraph id="H2C61939BE0054812AAE42008BDDE19A3"><enum>(B)</enum><text>The Secretary
				shall prescribe the method and manner in which such unique identification
				markings are to be distributed, purchased, and applied to or made part of
				tobacco product packages, and may provide for the cancellation of such
				markings.</text>
									</subparagraph><subparagraph id="H4251E6C4800F4ECD9A5FCEEBE966DFF2"><enum>(C)</enum><text>The unique
				identification marking must provide the following information:</text>
										<clause id="H6E2E99E90E2946B7BD2BC8C9F043A575"><enum>(i)</enum><text>The denominated
				value of the marking.</text>
										</clause><clause id="HE0498C975FDC4AF091C064124DFF942F"><enum>(ii)</enum><text>A
				unique serial number or tracking code.</text>
										</clause><clause id="H9CDA0DE2D321476D9B4FE2C0B20804FC"><enum>(iii)</enum><text>The name and
				address of the person purchasing the marking (and, if different, of the person
				ensuring the marking is affixed to or made part of the package).</text>
										</clause><clause id="H987BF89A923B4E55A700426C637D97E1"><enum>(iv)</enum><text>The date the
				marking was purchased and when it was affixed to or made part of the
				package.</text>
										</clause><clause id="HD6DBFCF98E06446E96AFC91B146A4582"><enum>(v)</enum><text>The name and
				address of the first unrelated person purchasing or otherwise receiving the
				tobacco product from the person who ensures the marking is affixed to or made
				part of the package and the date of such purchase or transfer.</text>
										</clause><clause id="H3C38D673F55C4AF79872E84CDCBDBFFD"><enum>(vi)</enum><text>Such other
				information as the Secretary may prescribe to carry out the purposes of this
				chapter.</text>
										</clause></subparagraph><subparagraph id="H40EB969302F845B78374BB09A7B95181"><enum>(D)</enum><text>The information
				described in subparagraph (C) shall, to the extent practicable—</text>
										<clause id="H53079BC5ECDB4FB08DAC9B8655F8B8E6"><enum>(i)</enum><text>be
				cryptographically encrypted, and</text>
										</clause><clause id="H3147EBB74F154E79AECBE1BD0DEA9266"><enum>(ii)</enum><subclause commented="no" display-inline="yes-display-inline" id="HCF464D82F8A144D3907732F69ECC28B9"><enum>(I)</enum><text>be readable by a
				portable scanning device (or similar device) to be utilized by law enforcement
				officials at the time and place of inspection, or</text>
											</subclause><subclause id="H3422779E1F7D475196824B4E63E4C638" indent="up1"><enum>(II)</enum><text>be otherwise accessible remotely at such
				time and place.</text>
											</subclause></clause></subparagraph><subparagraph id="H515741F0B26C4E338962DF19217DE137"><enum>(E)</enum><text>Tax reporting
				information shall be held on a secure government-controlled database to monitor
				tobacco production and for tracking and tracing the product from the point of
				production through the supply chain to the retailer.</text>
									</subparagraph></paragraph><paragraph id="H19EAC1ABFEFA47999F7F67D4BAFD10C7"><enum>(3)</enum><header>Unrelated
				person</header><text>For purposes of this subsection, the term <quote>unrelated
				person</quote> means a person other than a related person within the meaning of
				section 267(b) or
				707(b)(1).</text>
								</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
					</paragraph></subsection><subsection id="HF65AA00F40454E25B13CDE1097FBA60B"><enum>(b)</enum><header>Definitions</header><text>Section
			 5723, as amended by subsection (a), is amended by adding at the end the
			 following new subsections:</text>
					<quoted-block id="H997126D293AB4D03A1FD5282BCCD59D1" style="OLC">
						<subsection id="H257E9875A7F24EE191A7433912738727"><enum>(g)</enum><header>Package
				defined</header><text>For purposes of this section, the term
				<quote>package</quote> means the innermost sealed container visible from the
				outside of the individual container irrespective of the material from which
				such container is made, in which a tobacco product is placed by the
				manufacturer and in which such tobacco product is offered for sale to a member
				of the general public.</text>
						</subsection><subsection id="H390C2B709EB849FB8CA95171D662A2D2"><enum>(h)</enum><header>Unique
				identification marking defined</header><text display-inline="yes-display-inline">For purposes of this section, the term
				<quote>unique identification marking</quote> means a device in such design and
				denomination as the Secretary authorizes by regulation that is affixed to or
				made part of a package of tobacco product as evidence that the tax imposed by
				this chapter is paid. Such markings shall contain overt security features for
				public authentication and covert security features embedding a unique, secure,
				encrypted identifier onto the marking, enabling law enforcement authentication,
				production control, and tracking and tracing of the product bearing the
				marking.</text>
						</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
				</subsection><subsection id="HDC84C21ED0FA4D67B9B52D4853992817"><enum>(c)</enum><header>Regulations</header><text>The
			 Secretary of the Treasury shall consult with the Secretary of Health and Human
			 Services as may be appropriate to carry out the purposes of subsection (f), and
			 paragraphs (1), (2), and (3) of subsection (b), of section 5723 of the Internal
			 Revenue Code of 1986.</text>
				</subsection></section><section id="HF20F9A904BD04C6FA62196C89E1F21C8"><enum>104.</enum><header>Wholesalers and
			 manufacturers, importers, and sellers of tobacco production machines required
			 to have permit</header>
				<subsection id="HE50F133BD7C94516AC8C93FC239A808F"><enum>(a)</enum><header>Wholesalers</header><text display-inline="yes-display-inline">Section 5712 (relating to application for
			 permit) is amended by inserting <quote>, wholesaler,</quote> after
			 <quote>manufacturer</quote>.</text>
				</subsection><subsection id="HE0BFF9C6D5C84619AA220C8586033AF8"><enum>(b)</enum><header>Manufacturers,
			 importers, and sellers of tobacco production machines</header><text display-inline="yes-display-inline">Section 5712 is amended by striking
			 <quote>or as an export warehouse proprietor</quote> and inserting <quote>, as
			 an export warehouse proprietor, or as a manufacturer, seller, or importer of
			 tobacco production machines (as defined in section 5762(b)(5))</quote>.</text>
				</subsection></section><section id="HCC9DAA9987024F48A84E55800802F051"><enum>105.</enum><header>Conditions of
			 permit</header><text display-inline="no-display-inline">Subsection (a) of
			 section 5713 (relating to issuance of permit) is amended to read as
			 follows:</text>
				<quoted-block id="H6B3E8DE8963148CC98A98701DEE151DB" style="OLC">
					<subsection id="H75D33430DDF44B5695D525D599072104"><enum>(a)</enum><header>Issuance</header>
						<paragraph id="HD4C6C385750F4130834A66C11D8C2FDE"><enum>(1)</enum><header>In
				general</header><text display-inline="yes-display-inline">A person shall not
				engage in business as a manufacturer, wholesaler, or importer of tobacco
				products or processed tobacco, as an export warehouse proprietor, or as a
				manufacturer, seller, or importer of tobacco production machines (as defined in
				section 5762(b)(5)) without a permit to engage in such business. Such permit,
				conditioned upon compliance with this chapter and regulations issued
				thereunder, shall be issued in such form and in such manner as the Secretary
				shall by regulation prescribe, to every person properly qualified under section
				5711 and 5712. Any entity granted such a permit is not eligible to provide any
				services the Secretary may elect to procure to facilitate the purposes of
				section 5723. Permit holders shall automatically count output and register,
				record, and transmit the quantities measured, in the form, conditions, and time
				limits established by the Secretary. A new permit may be required at such other
				time as the Secretary shall by regulation prescribe.</text>
						</paragraph><paragraph id="HF2BEB94DF23B41B8991EA88DEF4F729B"><enum>(2)</enum><header>Conditions</header><text>The
				Secretary shall not issue a permit under this section unless—</text>
							<subparagraph id="HFA0408DC05954A27854E5714A688AE50"><enum>(A)</enum><text>the applicant is
				in compliance with the requirements of—</text>
								<clause id="HA1CC7C76778E48999223E17DF3DD0AAC"><enum>(i)</enum><text>this
				chapter,</text>
								</clause><clause id="H536C0F2AAC904583B6AE8E7A2AFCFDDD"><enum>(ii)</enum><text>chapter 114 of
				title 18, United States Code,</text>
								</clause><clause id="H5DB084343DC546B785DD5576D57B35A2"><enum>(iii)</enum><text display-inline="yes-display-inline">the Act of October 19, 1949 (15 U.S.C. 375
				et seq.; commonly referred to as the <quote>Jenkins Act</quote>),</text>
								</clause><clause id="HB67D34373BB54DE387A09AA2A28A0D48"><enum>(iv)</enum><text display-inline="yes-display-inline">the Fair and Equitable Tobacco Reform Act
				of 2004, and any amendments made thereby,</text>
								</clause><clause id="HA58B80C693F34B62914A07B98BD5A623"><enum>(v)</enum><text display-inline="yes-display-inline">the Family Smoking Prevention and Tobacco
				Control Act, and any amendments made thereby, and</text>
								</clause><clause id="HDDF172BD8E944CCF8D4006675D65A925"><enum>(vi)</enum><text>any related
				regulations thereunder, and</text>
								</clause></subparagraph><subparagraph id="H39C5478919C84C9FAF88AD3A5E40CC87"><enum>(B)</enum><text display-inline="yes-display-inline">the applicant certifies that the applicant
				is in compliance with all other Federal and State laws relating to the
				taxation, manufacture, importation, exportation, distribution, marketing, sale,
				or transportation of tobacco products, processed tobacco, or tobacco production
				machines.</text>
							</subparagraph><subparagraph id="H1337B19A98C04F59BB20B97D8173DF8A"><enum>(C)</enum><text display-inline="yes-display-inline">the applicant identifies in the application
				any violation of a law described in subparagraph (A) or (B) by the applicant
				resulting in a penalty under any such law during the 5-year period ending on
				the date of the
				application.</text>
							</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
			</section><section id="HA553713BB4094588AD01F441D1319CFC"><enum>106.</enum><header>Records to be
			 maintained</header>
				<subsection id="H4334D7656BD240A2B693DA6255E9CA71"><enum>(a)</enum><header>In
			 general</header><text display-inline="yes-display-inline">Section 5741
			 (relating to records to be maintained) is amended—</text>
					<paragraph id="H79422FBEBAC7408EA2B0CB48B7892D2C"><enum>(1)</enum><text>by inserting
			 <quote>(a) <header-in-text level="subsection" style="OLC">In
			 general</header-in-text>.—</quote> before <quote>Every
			 manufacturer</quote>,</text>
					</paragraph><paragraph id="H36EA85056AD3457E9E7340CC6F626565"><enum>(2)</enum><text>by inserting
			 <quote>every wholesaler,</quote> after <quote>every importer,</quote>,</text>
					</paragraph><paragraph id="H874BD1AF1A9C4CC1905199B56A50907C"><enum>(3)</enum><text display-inline="yes-display-inline">by striking <quote>such records</quote> and
			 inserting <quote>records concerning the chain of custody of the tobacco
			 products (including the foreign country of final destination for packages
			 marked for export) and the serial numbers, marks, labels, and notices required
			 under section 5723, and such other records</quote>, and</text>
					</paragraph><paragraph id="H7839ECA8DCD0468485CD61B0684A63AE"><enum>(4)</enum><text>by adding at the
			 end the following new subsections:</text>
						<quoted-block id="HF1F640FB28864B6893FA525CA881E55A">
							<subsection id="H542F76A85E69455FAAFAB1A0C3CD47C0"><enum>(b)</enum><header>Retailers</header><text display-inline="yes-display-inline">Retailers shall maintain records of
				receipt, and any non-retail sale or delivery, of tobacco products. Such records
				shall be available to the Secretary for inspection and audit. An ordinary
				commercial record or invoice shall satisfy the requirements of this subsection
				if such record shows the date of receipt, from whom tobacco products were
				received, and the quantity of tobacco products received (or, in the case of
				non-retail sale or delivery, the date of sale or delivery, to whom the tobacco
				products were sold or delivered, and the quantity of the tobacco products sold
				or delivered). The preceding provisions of this subsection shall not be
				construed to limit or preclude other recordkeeping requirements imposed on any
				retailer.</text>
							</subsection><subsection id="H4124FFBAF8344035B8DBD161D6FEE6D4"><enum>(c)</enum><header>Records
				concerning marks and chain of custody</header><text>Records concerning the
				chain of custody and the marks, labels, and notices required under section 5723
				shall be made available to Federal and State law enforcement officials for
				inspection and audit upon
				request.</text>
							</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
					</paragraph></subsection><subsection id="H661021F46BE54AF09C4154CD93A6419A"><enum>(b)</enum><header>Consultation
			 with Health and Human Services</header><text display-inline="yes-display-inline">The Secretary of the Treasury shall consult
			 with the Secretary of Health and Human Services as may be appropriate to carry
			 out the purposes of section 5741 of the Internal Revenue Code of 1986.</text>
				</subsection></section><section id="H0039093CC77742E49A90E454F638524E"><enum>107.</enum><header>Reports</header><text display-inline="no-display-inline">Section 5722 (relating to reports) is
			 amended—</text>
				<paragraph id="HAB4FF95DEA924EB084EED14B24FF9259"><enum>(1)</enum><text>by inserting
			 <quote>(a) <header-in-text level="subsection" style="OLC">In
			 general</header-in-text>.—</quote> before <quote>Every manufacturer</quote>,
			 and</text>
				</paragraph><paragraph id="H95A6A90DCF644AA4B4923992632D2FE9"><enum>(2)</enum><text>by adding at the
			 end the following new subsection:</text>
					<quoted-block id="HCAF476076BB04F33B85D2E41CF58B4F4">
						<subsection id="H376DA514EB28494D9368A7261C02AE10"><enum>(b)</enum><header>Reports by
				export warehouse proprietors</header>
							<paragraph id="HA0136AC89586405A91047BFDE5E61CBF"><enum>(1)</enum><header>In
				general</header><text>Prior to exportation of tobacco products from the United
				States, the export warehouse proprietor shall submit a report (in such manner
				and form as the Secretary may by regulation prescribe) to enable the Secretary
				to identify the shipment and assure that it reaches its intended
				destination.</text>
							</paragraph><paragraph id="HF6A9008384284A22B9458DD2BF6F13FC"><enum>(2)</enum><header>Agreements with
				foreign governments</header><text>Notwithstanding section 6103 of this title,
				the Secretary is authorized to enter into agreements with foreign governments
				to exchange or share information contained in reports received from export
				warehouse proprietors of tobacco products if—</text>
								<subparagraph id="HC1D1D4ECBEA649BE81624AC0DC62B326"><enum>(A)</enum><text>the Secretary
				believes that such agreement will assist in—</text>
									<clause id="HB5B233609B504EA5B2AC37B6A8337B85"><enum>(i)</enum><text>ensuring
				compliance with the provisions of this chapter or regulations promulgated
				thereunder, or</text>
									</clause><clause id="H45DB8C1D52D5434C9186F3B93CFF0411"><enum>(ii)</enum><text>preventing or
				detecting violations of the provisions of this chapter or regulations
				promulgated thereunder, and</text>
									</clause></subparagraph><subparagraph id="H8286A3D7E8FB49B6931E13B9EA0CCD67"><enum>(B)</enum><text>the Secretary
				obtains written assurances from such government that the information will be
				held in confidence and used only for the purposes specified in clauses (i) and
				(ii) of subparagraph (A).</text>
								</subparagraph><continuation-text continuation-text-level="paragraph">No
				information may be exchanged or shared with any government that has violated
				such
				assurances.</continuation-text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
				</paragraph></section><section id="H2E7F03326861476F838F56929ABE89D2"><enum>108.</enum><header>Fraudulent
			 offenses</header>
				<subsection id="H14FE0B4556F94877AC1D5DD2AA268E2B"><enum>(a)</enum><header>In
			 general</header><text>Subsection (a) of section 5762 is amended—</text>
					<paragraph id="HF48CB0E09FD74A7E91DCA78FFA0B2227"><enum>(1)</enum><text>by striking
			 paragraph (1) and redesignating paragraphs (2) through (6) as paragraphs (1)
			 through (5), respectively, and</text>
					</paragraph><paragraph id="H92479B5BF0FB4F5D9AB7334E5999B5E4"><enum>(2)</enum><text>by striking
			 <quote>not more than $10,000</quote> and inserting <quote>not more than $10,000
			 or an amount equal to 3 times the amount of the tax imposed under this chapter
			 on the tobacco product involved (whichever is greater)</quote>.</text>
					</paragraph></subsection><subsection id="HC2BD1246247C4FA6851627F896A6F323"><enum>(b)</enum><header>Offenses
			 relating to distribution of tobacco products</header>
					<paragraph id="H4C21EC0B6FA84830AFE037806D04FD10"><enum>(1)</enum><header>In
			 general</header><text>Section 5762 (as amended by section 102 of this Act) is
			 amended—</text>
						<subparagraph id="H1D1C6A4B30FB42899F83F37E1A5C02AF"><enum>(A)</enum><text>by redesignating
			 subsection (c) as subsection (d), and</text>
						</subparagraph><subparagraph id="HF81EA642B426425DB33BA5AC806D5516"><enum>(B)</enum><text>by inserting after
			 subsection (b) the following new subsection:</text>
							<quoted-block id="H65738D96171B418DA29B9E1312058736">
								<subsection id="H11B6F4F125284A57B30F43C4C8D9FA20"><enum>(c)</enum><header>Offenses
				relating to distribution of tobacco products</header><text>It shall be
				unlawful—</text>
									<paragraph id="HAC8DE9BFF1214DF4BE7C4E15BBDD0275"><enum>(1)</enum><text>for any person to
				engage in business as a manufacturer or importer of tobacco products or
				cigarette papers and tubes, as a wholesaler or an export warehouse proprietor,
				or as a manufacturer, seller, or importer of tobacco production machines
				without filing the bond and obtaining the permit where required by this chapter
				or regulations thereunder,</text>
									</paragraph><paragraph id="H96D11DB328F1417D8C9EAD8464258616"><enum>(2)</enum><text display-inline="yes-display-inline">for a manufacturer, importer, or wholesaler
				to knowingly ship, transport, deliver, or receive any tobacco products from or
				to any person other than a person who has obtained the permit required by this
				chapter, a retailer, or a person handling such products solely for purposes of
				shipment or delivery; except an importer who has obtained the permit required
				by this chapter may receive, from a foreign manufacturer or a foreign
				distributor, foreign tobacco products that have not previously entered the
				United States,</text>
									</paragraph><paragraph id="HFECCE6FEC06B4CD4820C09E3AE104F55"><enum>(3)</enum><text display-inline="yes-display-inline">for a manufacturer of processed tobacco to
				knowingly ship, transport, sell, or deliver processed tobacco to any person
				other than a manufacturer of processed tobacco, a manufacturer of tobacco
				products, or an export warehouse proprietor,</text>
									</paragraph><paragraph id="HA84FDAAE55784F739498CAE59ADA0B9F"><enum>(4)</enum><text>for any person
				(other than the original manufacturer of such tobacco products or an export
				warehouse proprietor authorized to receive any tobacco products that have
				previously been exported and returned to the United States) to knowingly
				receive any tobacco products that have previously been exported and returned to
				the United States,</text>
									</paragraph><paragraph id="H18E3F77D42D04BA6AE8100C421A99AB1"><enum>(5)</enum><text>for any export
				warehouse proprietor to knowingly ship, transport, sell, or deliver for sale
				any tobacco products to any person other than the original manufacturer of such
				tobacco products, another export warehouse proprietor, or a foreign
				purchaser,</text>
									</paragraph><paragraph id="HE3DF30796888425E96B6DB66ACED71F4"><enum>(6)</enum><text>for any person
				(other than a manufacturer or an export warehouse proprietor permitted under
				this chapter) to knowingly ship, transport, receive, or possess, for purposes
				of resale, any tobacco product in packages marked pursuant to regulations
				issued under section 5723, other than for direct return to a manufacturer for
				repacking or for re-exportation or to an export warehouse proprietor for
				re-exportation,</text>
									</paragraph><paragraph id="H7EA068A7342C41C1ABFC0CE2179BDD2F"><enum>(7)</enum><text>for any
				manufacturer, importer, export warehouse proprietor, or wholesaler permitted
				under this chapter to make any false entry in, to fail to make an entry in, or
				to knowingly fail to maintain properly any record or report required by this
				chapter or the regulations promulgated thereunder with the intent to defraud
				the United States,</text>
									</paragraph><paragraph id="H220A665F3EEA45D88F52240A63FB05A7"><enum>(8)</enum><text>for any person,
				with the intent to defraud the United States, to alter, mutilate, destroy,
				obliterate, or remove any mark or label required under this chapter upon a
				tobacco product held for sale, or to create, possess, or apply on any tobacco
				product or its packaging any counterfeit versions of any such marks or labels,
				and</text>
									</paragraph><paragraph id="H49A83DEECC134D35A7CBD54B4FF6059A"><enum>(9)</enum><text>for any person to
				sell at retail more than 3,000 cigarettes in a single transaction or in a
				series of related transactions, or, in the case of other tobacco products, an
				equivalent quantity as determined by regulation.</text>
									</paragraph><continuation-text continuation-text-level="subsection">Any
				person violating any of the provisions of this subsection shall, upon
				conviction, be fined as provided in section 3571 of title 18, United States
				Code, or imprisoned for not more than 5 years, or
				both.</continuation-text></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
						</subparagraph></paragraph><paragraph id="H4B7E996FC0ED455AABDC6D10783365AC"><enum>(2)</enum><header>Conforming
			 amendment</header><text>Section 5762(d) (as so redesignated) is amended by
			 striking <quote>and (b)</quote> inserting <quote>, (b), and (c)</quote>.</text>
					</paragraph></subsection><subsection id="H2E46614D394C4EC6BAC145AFAB3B436A"><enum>(c)</enum><header>Other
			 offenses</header><text>Subsection (d) of section 5762 (as so redesignated) is
			 amended by striking <quote>not more than $1,000</quote> and inserting
			 <quote>not more than $2,500 or an amount equal to the tax imposed under this
			 chapter on the tobacco product involved (whichever is greater)</quote>.</text>
				</subsection></section><section id="H2F50A5D6E71648409AE3C5589D62032B"><enum>109.</enum><header>Penalties</header>
				<subsection id="HD1EE32FEE10B4ACF9915FB54CADEDBBA"><enum>(a)</enum><header>In
			 general</header>
					<paragraph id="H07D773DC9E3F4F5DAED6FF0F54017B1D"><enum>(1)</enum><text display-inline="yes-display-inline">Subsection (a) of section 5761 (relating to
			 civil penalties) is amended—</text>
						<subparagraph id="HBCBFA4605AC44443ADDADD072351301E"><enum>(A)</enum><text>by striking
			 <quote>willfully</quote> and inserting <quote>knowingly</quote>, and</text>
						</subparagraph><subparagraph id="H205D1EDD7B9A48B6B705DF46E32401A7"><enum>(B)</enum><text>by striking
			 <quote>$1,000</quote> and inserting <quote>$10,000</quote>.</text>
						</subparagraph></paragraph><paragraph id="H62C2298C5EA94082B51705399AACF01E"><enum>(2)</enum><text>Subsection (b) of
			 section 5761 (relating to failure to pay tax) is amended by striking <quote>5
			 percent</quote> and inserting <quote>10 percent</quote>.</text>
					</paragraph></subsection><subsection id="HF30CBAB97B0F43E8AE1EE57B30F8AE88"><enum>(b)</enum><header>Use of increase
			 in penalties and fines</header><text>Subchapter G of chapter 52 is amended by
			 adding at the end the following new section:</text>
					<quoted-block display-inline="no-display-inline" id="HD1D2DDB578514B929ED435AA523762A8" style="OLC">
						<section id="H5A894B685C414BD8ADC8BB9EE1BDFECA"><enum>5764.</enum><header>Use of certain
				penalties and fines</header>
							<subsection id="H80CA352F1AC747C3AE5A5AD1C37FB795"><enum>(a)</enum><header>In
				general</header><text display-inline="yes-display-inline">There is established
				a separate account in the Treasury known as the <quote>Anti-Contraband Tobacco
				Trafficking Fund</quote>. Amounts equivalent to 50 percent of the increase in
				revenues from criminal and civil penalties and fines collected under this
				chapter and attributable to title I of the Smuggled Tobacco Prevention Act of
				2010 (or the amendments made thereby) shall be transferred into the
				Anti-Contraband Tobacco Trafficking Fund. Such amounts shall be available, as
				provided in appropriations Acts, to the Secretary solely for the purpose of
				expanding government efforts and available resources to enforce this chapter
				and other laws relating to contraband or illegal tobacco products.</text>
							</subsection><subsection id="HDB295489A66E4AF1AB04289C44671BE0"><enum>(b)</enum><header>Allocation of
				funds</header><text display-inline="yes-display-inline">Of the respective
				amounts available to the Secretary under subsection (a), not less than 50
				percent shall be allocated to the Federal departments and agencies that are
				responsible for the enforcement actions (including underlying investigations
				and administrative and judicial proceedings) in which such penalties and fines
				were
				imposed.</text>
							</subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
				</subsection><subsection id="H2AA40DF970334D6BAD35445D4D7D05FB"><enum>(c)</enum><header>Penalty amounts
			 adjusted for inflation</header><text>Section 5761 of such Code is amended by
			 redesignating subsection (f) as subsection (g) and inserting after subsection
			 (e) the following new subsection:</text>
					<quoted-block display-inline="no-display-inline" id="H7BA271D36AFC4A7D92C4F0FD5AB46935" style="OLC">
						<subsection id="H11C18879FB5A4656B664B81F53DEEB24"><enum>(f)</enum><header>Inflation
				adjustment</header>
							<paragraph id="HA439353630A34CD7BEB4B5068B7263AB"><enum>(1)</enum><header>In
				general</header><text>In the case of a calendar year beginning after 2011, the
				penalty dollar amounts provided under this chapter shall each be increased by
				an amount equal to—</text>
								<subparagraph id="H1A3A41F648964D5E8C2E89BADEEC67E3"><enum>(A)</enum><text>such dollar
				amount, multiplied by</text>
								</subparagraph><subparagraph id="HAE4E61F14D9B411587A6BC48C3B794E8"><enum>(B)</enum><text>the cost-of-living
				adjustment determined under section 1(f)(3) for the calendar year, determined
				by substituting <quote>calendar year 2010</quote> for <quote>calendar year
				1992</quote> in subparagraph (B) thereof.</text>
								</subparagraph></paragraph><paragraph id="H4D5466E1E6BE4AD8B01FE86F4CA669BD"><enum>(2)</enum><header>Rounding</header><text>If
				any amount as adjusted under paragraph (1) is not a multiple of $10, such
				amount shall be rounded to the next highest multiple of
				$10.</text>
							</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
				</subsection></section><section id="HB408FABA094E4016A59FAEA383707C1D"><enum>110.</enum><header>Definitions</header>
				<subsection id="H95DB5FF1318B4AF5AD5DB9555CFEE823"><enum>(a)</enum><header>Export warehouse
			 proprietor</header><text>Subsection (i) of section 5702 (relating to definition
			 of export warehouse proprietor) is amended by inserting before the period the
			 following: <quote>or any person engaged in the business of exporting tobacco
			 products from the United States for purposes of sale or distribution. Any duty
			 free store that sells, offers for sale, or otherwise distributes to any person
			 in any single transaction (or series of related transactions) more than 3,000
			 cigarettes, or an equivalent quantity of other tobacco products as the
			 Secretary shall by regulation prescribe, shall be deemed an export warehouse
			 proprietor under this chapter</quote>.</text>
				</subsection><subsection id="H0D37D3B1BCD14DF6883935B666443A59"><enum>(b)</enum><header>Retailer;
			 wholesaler</header><text>Section 5702 is amended by adding at the end the
			 following new subsections:</text>
					<quoted-block id="HCE2619ED72604E0F833D580C8086FCCE">
						<subsection id="H9EB1F7CA76D0442B8F58C28A892A579A"><enum>(p)</enum><header>Retailer</header><text display-inline="yes-display-inline">The term <term>retailer</term> means any
				dealer who sells, or offers for sale, any tobacco product at retail. The term
				<term>retailer</term> includes any duty free store that sells, offers for sale,
				or otherwise distributes at retail in any single transaction (or series of
				related transactions) 3,000 or fewer of cigarettes, or an equivalent quantity
				of other tobacco products as the Secretary shall by regulation
				prescribe.</text>
						</subsection><subsection id="HE0260E271F9D4A48A6283FA08B65D047"><enum>(q)</enum><header>Wholesaler</header><text>The
				term <term>wholesaler</term> means any person engaged in the business of
				purchasing tobacco products for resale at wholesale, or any person acting as an
				agent or broker for any person engaged in the business of purchasing tobacco
				products for resale at
				wholesale.</text>
						</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
				</subsection></section><section id="H45D34409F3B943B7B70E9D415A60E161"><enum>111.</enum><header>Conforming
			 amendments</header>
				<subsection id="HB8339BC1118F422E9E22ADB7CB0842F0"><enum>(a)</enum><text display-inline="yes-display-inline">Section 2341 of title 18, United States
			 Code is amended—</text>
					<paragraph id="H5E24B50B266A488EAC05772503AF8BC5"><enum>(1)</enum><text>in paragraph (2),
			 by inserting <quote>Federal taxes, wherever found, or</quote> after
			 <quote>payment of applicable</quote>; and</text>
					</paragraph><paragraph id="H47AC48637CBC478984375DD59155FB3D"><enum>(2)</enum><text>in paragraph
			 (2)(C), by inserting <quote>in regard to State or local taxes,</quote> before
			 <quote>a person</quote>.</text>
					</paragraph></subsection><subsection id="H9057F1E59B8545A0BBBB29BE2F6F85A8"><enum>(b)</enum><text>Sections 2314 and
			 2315 of title 18, United States Code, are each amended—</text>
					<paragraph id="H02C36BD542AB40BDA4C938A5C7AD4D6B"><enum>(1)</enum><text>by striking
			 <quote><header-in-text level="section" style="OLC">State</header-in-text></quote> in the heading thereof; and</text>
					</paragraph><paragraph id="H8D4877828ABA471E80DADB300A19F1D0"><enum>(2)</enum><text>by striking
			 <quote>tax stamps</quote> each place it appears and inserting <quote>tax stamps
			 or markings</quote>.</text>
					</paragraph></subsection></section><section id="H56C04FD9715D4E86A130BA5E74426983"><enum>112.</enum><header>Effective
			 date</header><text display-inline="no-display-inline">Except as otherwise
			 provided in this title, the amendments made by this title shall take effect 1
			 year after the date of the enactment of this Act.</text>
			</section></title><title id="HE32B1114CFAC4DBDB76EE470DDF0212E"><enum>II</enum><header>Import
			 Fraud</header>
			<section commented="no" id="H5B6876FD84784EFE9D5979B9AA97B8BC" section-type="subsequent-section"><enum>201.</enum><header>Maximum penalty for
			 importation of tobacco products and cigarette papers and tubes by fraudulent
			 means</header>
				<subsection commented="no" id="H2E8F48B93B744A2E93BB7DC60E05B5D0"><enum>(a)</enum><header>Maximum
			 penalty</header><text>Section 592(c)(1) of the Tariff Act of 1930 (19 U.S.C.
			 1592(c)(1)) is amended—</text>
					<paragraph id="HBD42DFA9768F4AFBAAD749C1EDD06889"><enum>(1)</enum><text>by striking
			 <quote>A fraudulent violation of subsection (a)</quote> and inserting the
			 following:</text>
						<quoted-block display-inline="no-display-inline" id="H48CAA42A45704737BAF81B4F3B76ED0B" style="OLC">
							<subparagraph id="HCDDA28A633644F1C898C58295B3D5161"><enum>(A)</enum><header>In
				general</header><text display-inline="yes-display-inline">Except as provided in
				subparagraph (B), a fraudulent violation of subsection
				(a)</text>
							</subparagraph><after-quoted-block>;
				and</after-quoted-block></quoted-block>
					</paragraph><paragraph id="H8DFE827776284C078B8335C248CFA2D4"><enum>(2)</enum><text>by adding at the
			 end the following:</text>
						<quoted-block display-inline="no-display-inline" id="HBA0A707866BC4C859DA04BE20B857A0F" style="OLC">
							<subparagraph id="H0C8F35392D7F4E1BB86515FD629BC028"><enum>(B)</enum><header>Tobacco products
				and cigarette papers and tubes</header><text display-inline="yes-display-inline">In the case of importation of tobacco
				products and cigarette papers and tubes subject to tax under chapter 52 of the
				Internal Revenue Code of 1986, a fraudulent violation of subsection (a) is
				punishable by a civil penalty in an amount not to exceed the sum of—</text>
								<clause id="HECF5FA53A712445B9F74955247434F83"><enum>(i)</enum><text>the domestic value
				of the merchandise, and</text>
								</clause><clause id="HC308FBBB25C4476397CB91A9B58CC01B"><enum>(ii)</enum><text>four times the
				amount of Federal excise tax that could be imposed on the merchandise, if
				applicable.</text>
								</clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
					</paragraph></subsection><subsection commented="no" id="H56DDA75F075244EC8EF60A1C9D56DB42"><enum>(b)</enum><header>Effective
			 date</header><text display-inline="yes-display-inline">The amendments made by
			 subsection (a) shall take effect on January 1, 2011, and shall apply with
			 respect to violations of section 592 of the Tariff Act of 1930 (as so amended)
			 that occur on or after that date.</text>
				</subsection></section></title></legis-body>
</bill>
