[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 1147 Engrossed in Senate (ES)]
111th CONGRESS
2d Session
S. 1147
_______________________________________________________________________
AN ACT
To prevent tobacco smuggling, to ensure the collection of all tobacco
taxes, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; FINDINGS; PURPOSES.
(a) Short Title.--This Act may be cited as the ``Prevent All
Cigarette Trafficking Act of 2009'' or ``PACT Act''.
(b) Findings.--Congress finds that--
(1) the sale of illegal cigarettes and smokeless tobacco
products significantly reduces Federal, State, and local
government revenues, with Internet sales alone accounting for
billions of dollars of lost Federal, State, and local tobacco
tax revenue each year;
(2) Hezbollah, Hamas, al Qaeda, and other terrorist
organizations have profited from trafficking in illegal
cigarettes or counterfeit cigarette tax stamps;
(3) terrorist involvement in illicit cigarette trafficking
will continue to grow because of the large profits such
organizations can earn;
(4) the sale of illegal cigarettes and smokeless tobacco
over the Internet, and through mail, fax, or phone orders,
makes it cheaper and easier for children to obtain tobacco
products;
(5) the majority of Internet and other remote sales of
cigarettes and smokeless tobacco are being made without
adequate precautions to protect against sales to children,
without the payment of applicable taxes, and without complying
with the nominal registration and reporting requirements in
existing Federal law;
(6) unfair competition from illegal sales of cigarettes and
smokeless tobacco is taking billions of dollars of sales away
from law-abiding retailers throughout the United States;
(7) with rising State and local tobacco tax rates, the
incentives for the illegal sale of cigarettes and smokeless
tobacco have increased;
(8) the number of active tobacco investigations being
conducted by the Bureau of Alcohol, Tobacco, Firearms, and
Explosives rose to 452 in 2005;
(9) the number of Internet vendors in the United States and
in foreign countries that sell cigarettes and smokeless tobacco
to buyers in the United States increased from only about 40 in
2000 to more than 500 in 2005; and
(10) the intrastate sale of illegal cigarettes and
smokeless tobacco over the Internet has a substantial effect on
interstate commerce.
(c) Purposes.--It is the purpose of this Act to--
(1) require Internet and other remote sellers of cigarettes
and smokeless tobacco to comply with the same laws that apply
to law-abiding tobacco retailers;
(2) create strong disincentives to illegal smuggling of
tobacco products;
(3) provide government enforcement officials with more
effective enforcement tools to combat tobacco smuggling;
(4) make it more difficult for cigarette and smokeless
tobacco traffickers to engage in and profit from their illegal
activities;
(5) increase collections of Federal, State, and local
excise taxes on cigarettes and smokeless tobacco; and
(6) prevent and reduce youth access to inexpensive
cigarettes and smokeless tobacco through illegal Internet or
contraband sales.
SEC. 2. COLLECTION OF STATE CIGARETTE AND SMOKELESS TOBACCO TAXES.
(a) Definitions.--The Act of October 19, 1949 (15 U.S.C. 375 et
seq.; commonly referred to as the ``Jenkins Act'') (referred to in this
Act as the ``Jenkins Act''), is amended by striking the first section
and inserting the following:
``SECTION 1. DEFINITIONS.
``As used in this Act, the following definitions apply:
``(1) Attorney general.--The term `attorney general', with
respect to a State, means the attorney general or other chief
law enforcement officer of the State.
``(2) Cigarette.--
``(A) In general.--The term `cigarette'--
``(i) has the meaning given that term in
section 2341 of title 18, United States Code;
and
``(ii) includes roll-your-own tobacco (as
defined in section 5702 of the Internal Revenue
Code of 1986).
``(B) Exception.--The term `cigarette' does not
include a cigar (as 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 (regardless of whether 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'--
``(A) means any person that purchases cigarettes or
smokeless tobacco; and
``(B) 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 the 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'--
``(A) has the meaning given that term 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) includes 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.--
``(A) In general.--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.
``(B) Into a state, place, or locality.--A sale,
shipment, or transfer of cigarettes or smokeless
tobacco that is made in interstate commerce, as defined
in this paragraph, shall be deemed to have been made
into the State, place, or locality in which such
cigarettes or smokeless tobacco are delivered.
``(10) Person.--The term `person' means an individual,
corporation, company, association, firm, partnership, society,
State government, local government, Indian tribal government,
governmental organization of such a government, or joint stock
company.
``(11) 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.
``(12) 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.
``(13) 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.
``(14) Use.--The term `use' includes 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 the 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 the 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 the 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 the memorandum or invoice except as required for such purposes.''.
(c) Requirements for Delivery Sales.--The Jenkins Act is amended by
inserting after section 2 the following:
``SEC. 2A. DELIVERY SALES.
``(a) In General.--With respect to delivery sales into a specific
State and place, each delivery seller shall comply with--
``(1) the shipping requirements set forth in subsection
(b);
``(2) the recordkeeping requirements set forth in
subsection (c);
``(3) all State, local, tribal, and other laws generally
applicable to sales of cigarettes or smokeless tobacco as if
the delivery sales occurred entirely within the specific State
and place, including laws imposing--
``(A) excise taxes;
``(B) licensing and tax-stamping requirements;
``(C) restrictions on sales to minors; and
``(D) other payment obligations or legal
requirements relating to the sale, distribution, or
delivery of cigarettes or smokeless tobacco; and
``(4) the tax collection requirements set forth in
subsection (d).
``(b) Shipping and Packaging.--
``(1) Required statement.--For any shipping package
containing cigarettes or smokeless tobacco, the delivery seller
shall include on the bill of lading, if any, and on the outside
of the shipping package, on the same surface as the delivery
address, a clear and conspicuous statement providing as
follows: `CIGARETTES/SMOKELESS TOBACCO: FEDERAL LAW REQUIRES
THE PAYMENT OF ALL APPLICABLE EXCISE TAXES, AND COMPLIANCE WITH
APPLICABLE LICENSING AND TAX-STAMPING OBLIGATIONS'.
``(2) Failure to label.--Any shipping package described in
paragraph (1) that is not labeled in accordance with that
paragraph shall be treated as nondeliverable matter by a common
carrier or other delivery service, if the common carrier or
other delivery service knows or should know the package
contains cigarettes or smokeless tobacco. If a common carrier
or other delivery service believes a package is being submitted
for delivery in violation of paragraph (1), it may require the
person submitting the package for delivery to establish that it
is not being sent in violation of paragraph (1) before
accepting the package for delivery. Nothing in this paragraph
shall require the common carrier or other delivery service to
open any package to determine its contents.
``(3) Weight restriction.--A delivery seller shall not
sell, offer for sale, deliver, or cause to be delivered in any
single sale or single delivery any cigarettes or smokeless
tobacco weighing more than 10 pounds.
``(4) Age verification.--
``(A) In general.--A delivery seller who mails or
ships tobacco products--
``(i) shall not sell, deliver, or cause to
be delivered any tobacco products to a person
under the minimum age required for the legal
sale or purchase of tobacco products, as
determined by the applicable law at the place
of delivery;
``(ii) shall use a method of mailing or
shipping that requires--
``(I) the purchaser placing the
delivery sale order, or an adult who is
at least the minimum age required for
the legal sale or purchase of tobacco
products, as determined by the
applicable law at the place of
delivery, to sign to accept delivery of
the shipping container at the delivery
address; and
``(II) the person who signs to
accept delivery of the shipping
container to provide proof, in the form
of a valid, government-issued
identification bearing a photograph of
the individual, that the person is at
least the minimum age required for the
legal sale or purchase of tobacco
products, as determined by the
applicable law at the place of
delivery; and
``(iii) shall not accept a delivery sale
order from a person without--
``(I) obtaining the full name,
birth date, and residential address of
that person; and
``(II) verifying the information
provided in subclause (I), through the
use of a commercially available
database or aggregate of databases,
consisting primarily of data from
government sources, that are regularly
used by government and businesses for
the purpose of age and identity
verification and authentication, to
ensure that the purchaser is at least
the minimum age required for the legal
sale or purchase of tobacco products,
as determined by the applicable law at
the place of delivery.
``(B) Limitation.--No database being used for age
and identity verification under subparagraph (A)(iii)
shall be in the possession or under the control of the
delivery seller, or be subject to any changes or
supplementation by the delivery seller.
``(c) Records.--
``(1) In general.--Each delivery seller shall keep a record
of any delivery sale, including all of the information
described in section 2(a)(2), organized by the State, and
within the State, by the city or town and by zip code, into
which the delivery sale is so made.
``(2) Record retention.--Records of a delivery sale shall
be kept as described in paragraph (1) until the end of the 4th
full calendar year that begins after the date of the delivery
sale.
``(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
local or tribal taxes on cigarettes or smokeless tobacco, to
the attorneys general of the States, to the chief law
enforcement officers of the 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 the
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 of the United
States pursuant to section 2(a), or that are otherwise
not in compliance with this Act, and--
``(i) distribute the list to--
``(I) the attorney general and tax
administrator of every State;
``(II) common carriers and other
persons that deliver small packages to
consumers in interstate commerce,
including the United States Postal
Service; and
``(III) any other person that the
Attorney General of the United States
determines can promote the effective
enforcement of this Act; and
``(ii) publicize and make the list
available to any other person engaged in the
business of interstate deliveries or who
delivers cigarettes or smokeless tobacco in or
into any State.
``(B) List contents.--To the extent known, the
Attorney General of the United States shall include,
for each delivery seller on the list described in
subparagraph (A)--
``(i) all names the delivery seller uses or
has used in the transaction of its business or
on packages delivered to customers;
``(ii) all addresses from which the
delivery seller does or has done business, or
ships or has shipped cigarettes or smokeless
tobacco;
``(iii) the website addresses, primary e-
mail address, and phone number of the delivery
seller; and
``(iv) any other information that the
Attorney General of the United States
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 described
in subparagraph (A) 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 described in subparagraph (A) any noncomplying
delivery sellers identified by any State, local, or
tribal government under paragraph (6), 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 (6).
``(E) Accuracy and completeness of list of
noncomplying delivery sellers.--In preparing and
revising the list described in subparagraph (A), the
Attorney General of the United States 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 a delivery seller
is not in compliance with this Act;
``(ii) not later than 14 days before
including a delivery seller on the list, make a
reasonable attempt to send notice to the
delivery seller by letter, electronic mail, or
other means that the delivery seller is being
placed on the list, which shall cite the
relevant provisions of this Act and the
specific reasons for which the delivery seller
is being placed on the list;
``(iii) provide an opportunity to the
delivery seller to challenge placement on the
list;
``(iv) investigate each challenge described
in clause (iii) by contacting the relevant
Federal, State, tribal, and local law
enforcement officials, and provide the specific
findings and results of the investigation to
the delivery seller not later than 30 days
after the date on which the challenge is made;
and
``(v) if the Attorney General of the United
States determines that the basis for including
a delivery seller on the list is inaccurate,
based on incomplete information, or cannot be
verified, promptly remove the delivery seller
from the list as appropriate and notify each
appropriate Federal, State, tribal, and local
authority of the determination.
``(F) Confidentiality.--The list described in
subparagraph (A) shall be confidential, and any person
receiving the list shall maintain the confidentiality
of the list and may deliver the list, for enforcement
purposes, to any government official or to any common
carrier or other person that delivers tobacco products
or small packages to consumers. Nothing in this section
shall prohibit a common carrier, the United States
Postal Service, or any other person receiving the list
from discussing with a listed delivery seller the
inclusion of the delivery seller on the list and the
resulting effects on any services requested by the
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 described in 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 described in paragraph (1)(A), 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 the
corrections or updates.
``(3) Exemptions.--
``(A) In general.--Subsection (b)(2) and any
requirements or restrictions placed directly on common
carriers under this subsection, including subparagraphs
(A) and (B) of paragraph (2), shall not apply to a
common carrier that--
``(i) is subject to a settlement agreement
described in subparagraph (B); or
``(ii) if a settlement agreement described
in subparagraph (B) to which the common carrier
is a party is terminated or otherwise becomes
inactive, is administering and enforcing
policies and practices throughout the United
States that are at least as stringent as the
agreement.
``(B) Settlement agreement.--A settlement agreement
described in this subparagraph--
``(i) is a settlement agreement relating to
tobacco product deliveries to consumers; and
``(ii) includes--
``(I) the Assurance of
Discontinuance entered into by the
Attorney General of New York and DHL
Holdings USA, Inc. and DHL Express
(USA), Inc. on or about July 1, 2005,
the Assurance of Discontinuance entered
into by the Attorney General of New
York and United Parcel Service, Inc. on
or about October 21, 2005, and the
Assurance of Compliance entered into by
the Attorney General of New York and
Federal Express Corporation and FedEx
Ground Package Systems, Inc. on or
about February 3, 2006, if each of
those agreements is honored throughout
the United States to block illegal
deliveries of cigarettes or smokeless
tobacco to consumers; and
``(II) any other active agreement
between a common carrier and a State
that operates throughout the United
States to ensure that no deliveries of
cigarettes or smokeless tobacco shall
be made to consumers or 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.
``(4) Shipments from persons on list.--
``(A) In general.--If a common carrier or other
delivery service delays or interrupts the delivery of a
package in the possession of the common carrier or
delivery service because the common carrier or delivery
service determines or has reason to believe that the
person ordering the delivery is on a list described in
paragraph (1)(A) and that clauses (i), (ii), and (iii)
of paragraph (2)(A) do not apply--
``(i) the person ordering the delivery
shall be obligated to pay--
``(I) the common carrier or other
delivery service as if the delivery of
the package had been timely completed;
and
``(II) if the package is not
deliverable, any reasonable additional
fee or charge levied by the common
carrier or other delivery service to
cover any extra costs and inconvenience
and to serve as a disincentive against
such noncomplying delivery orders; and
``(ii) if the package is determined not to
be deliverable, the common carrier or other
delivery service shall offer to provide the
package and its contents to a Federal, State,
or local law enforcement agency.
``(B) Records.--A common carrier or other delivery
service shall maintain, for a period of 5 years, any
records kept in the ordinary course of business
relating to any delivery interrupted under 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--
``(i) use the 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
``(ii) keep confidential any personal
information in the records not otherwise
required for such purposes.
``(5) 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 the person is at least the
minimum age required for the legal sale or
purchase of tobacco products, as determined by
either State or local law at the place of
delivery;
``(ii) requiring that the common carrier or
other delivery service obtain a signature from
the consumer accepting the delivery;
``(iii) requiring that the common carrier
or other delivery service verify that all
applicable taxes have been paid;
``(iv) requiring that packages delivered by
the common carrier or other delivery service
contain any particular labels, notice, or
markings; or
``(v) prohibiting common carriers or other
delivery services from making deliveries on the
basis of whether the delivery seller is or is
not identified on any list of delivery sellers
maintained and distributed by any entity other
than the Federal Government.
``(B) Relationship to other laws.--Except as
provided in subparagraph (C), nothing in this paragraph
shall be construed to nullify, expand, restrict, or
otherwise amend or modify--
``(i) section 14501(c)(1) or 41713(b)(4) of
title 49, United States Code;
``(ii) any other restrictions in Federal
law on the ability of State, local, or tribal
governments to regulate common carriers; or
``(iii) any provision of State, local, or
tribal law regulating common carriers that is
described in section 14501(c)(2) or
41713(b)(4)(B) of title 49 of the United States
Code.
``(C) State laws prohibiting delivery sales.--
``(i) In general.--Except as provided in
clause (ii), nothing in the Prevent All
Cigarette Trafficking Act of 2009, the
amendments made by that Act, or in any other
Federal statute shall be construed to preempt,
supersede, or otherwise limit or restrict State
laws prohibiting the delivery sale, or the
shipment or delivery pursuant to a delivery
sale, of cigarettes or other tobacco products
to individual consumers or personal residences.
``(ii) Exemptions.--No State may enforce
against a common carrier a law prohibiting the
delivery of cigarettes or other tobacco
products to individual consumers or personal
residences without proof that the common
carrier is not exempt under paragraph (3) of
this subsection.
``(6) 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--
``(I) offers for sale or makes
sales of cigarettes or smokeless
tobacco in or into the State, locality,
or tribal land; and
``(II) has failed to register with
or make reports to the respective tax
administrator as required by this Act,
or that has been found in a legal
proceeding to have otherwise failed to
comply with this Act; and
``(ii) a list of common carriers and other
persons who make deliveries of cigarettes or
smokeless tobacco in or into the State,
locality, or tribal land.
``(B) Updates.--Any government providing a list to
the Attorney General of the United States under
subparagraph (A) shall also provide updates and
corrections every 4 months until such time as the
government notifies the Attorney General of the United
States in writing that the government no longer desires
to submit information to supplement the list described
in paragraph (1)(A).
``(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
described in paragraph (1)(A) any persons that are on
the list solely because of the prior submissions of the
government of the list of the government of
noncomplying delivery sellers of cigarettes or
smokeless tobacco or a subsequent update or correction
by the government.
``(7) 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 (6) 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 list or update described in
subparagraph (A) to any common carrier or other person
who makes deliveries of cigarettes or smokeless tobacco
that has been identified and submitted by a government
pursuant to paragraph (6).
``(8) Notice to delivery sellers.--Not later than 14 days
before including any delivery seller on the initial list
described in paragraph (1)(A), or on an update to the list 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 the list or update, with that notice
citing the relevant provisions of this Act.
``(9) 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--
``(i) shall not be required to make any
inquiries or otherwise determine whether a
person ordering a delivery is a delivery seller
on the list described in paragraph (1)(A) who
is using a different name or address in order
to evade the related delivery restrictions; and
``(ii) shall not knowingly deliver any
packages to consumers for any delivery seller
on the list described in paragraph (1)(A) who
the common carrier or other delivery service
knows is a delivery seller who is on the list
and 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 described in paragraph (1)(A);
``(ii) refusing, as a matter of regular
practice and procedure, to make any deliveries,
or any deliveries in certain States, of any
cigarettes or smokeless tobacco for any person
or for any person not in the business of
manufacturing, distributing, or selling
cigarettes or smokeless tobacco; or
``(iii) delaying or not making a delivery
for any person because of reasonable efforts to
comply with this Act.
``(D) Other limits.--Section 2 and subsections (a),
(b), (c), and (d) of this section shall not be
interpreted to impose any responsibilities,
requirements, or liability on common carriers.
``(f) Presumption.--For purposes of this Act, a delivery sale shall
be deemed to have occurred in the State and place where the buyer
obtains personal possession of the cigarettes or smokeless tobacco, and
a delivery pursuant to a delivery sale is deemed to have been initiated
or ordered by the delivery seller.''.
(d) Penalties.--The Jenkins Act is amended by striking section 3
and inserting the following:
``SEC. 3. PENALTIES.
``(a) Criminal Penalties.--
``(1) In general.--Except as provided in paragraph (2),
whoever knowingly violates this Act shall be imprisoned for not
more than 3 years, fined under title 18, United States Code, or
both.
``(2) Exceptions.--
``(A) Governments.--Paragraph (1) shall not apply
to a State, local, or tribal government.
``(B) Delivery violations.--A common carrier or
independent delivery service, or employee of a common
carrier or independent delivery service, shall be
subject to criminal penalties under paragraph (1) for a
violation of section 2A(e) only if the violation is
committed knowingly--
``(i) as consideration for the receipt of,
or as consideration for a promise or agreement
to pay, anything of pecuniary value; or
``(ii) for the purpose of assisting a
delivery seller to violate, or otherwise
evading compliance with, section 2A.
``(b) Civil Penalties.--
``(1) In general.--Except as provided in paragraph (3),
whoever violates 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 the delivery seller during the 1-year period
ending on the date of the violation.
``(B) in the case of a common carrier or other
delivery service, $2,500 in the case of a first
violation, or $5,000 for any violation within 1 year of
a prior violation.
``(2) Relation to other penalties.--A civil penalty imposed
under paragraph (1) for a violation of this Act shall be
imposed in addition to any criminal penalty under subsection
(a) and any other damages, equitable relief, or injunctive
relief awarded by the court, including the payment of any
unpaid taxes to the appropriate Federal, State, local, or
tribal governments.
``(3) Exceptions.--
``(A) Delivery violations.--An employee of a common
carrier or independent delivery service shall be
subject to civil penalties under paragraph (1) for a
violation of section 2A(e) only if the violation is
committed intentionally--
``(i) as consideration for the receipt of,
or as consideration for a promise or agreement
to pay, anything of pecuniary value; or
``(ii) for the purpose of assisting a
delivery seller to violate, or otherwise
evading compliance with, section 2A.
``(B) Other limitations.--No common carrier or
independent delivery service shall be subject to civil
penalties under paragraph (1) for a violation of
section 2A(e) if--
``(i) the common carrier or independent
delivery service has implemented and enforces
effective policies and practices for complying
with that section; or
``(ii) the violation consists of an
employee of the common carrier or independent
delivery service who physically receives and
processes orders, picks up packages, processes
packages, or makes deliveries, taking actions
that are outside the scope of employment of the
employee, or that violate the implemented and
enforced policies of the common carrier or
independent delivery service described in
clause (i).''.
(e) Enforcement.--The Jenkins Act is amended by striking section 4
and inserting the following:
``SEC. 4. ENFORCEMENT.
``(a) In General.--The United States district courts shall have
jurisdiction to prevent and restrain violations of this Act and to
provide other appropriate injunctive or equitable relief, including
money damages, for the violations.
``(b) Authority of the Attorney General.--The Attorney General of
the United States shall administer and enforce this Act.
``(c) State, Local, and Tribal Enforcement.--
``(1) In general.--
``(A) Standing.--A State, through its attorney
general, or a local government or Indian tribe that
levies a tax subject to section 2A(a)(3), through its
chief law enforcement officer, may bring an action in a
United States district court to prevent and restrain
violations of this Act by any person or to obtain any
other appropriate relief from any person for violations
of this Act, including civil penalties, money damages,
and injunctive or other equitable relief.
``(B) Sovereign immunity.--Nothing in this Act
shall be deemed to abrogate or constitute a waiver of
any sovereign immunity of a State or local government
or Indian tribe against any unconsented lawsuit under
this Act, or otherwise to restrict, expand, or modify
any sovereign immunity of a State or local government
or Indian tribe.
``(2) Provision of information.--A State, through its
attorney general, or a local government or Indian tribe that
levies a tax subject to section 2A(a)(3), through its chief law
enforcement officer, may provide evidence of a violation of
this Act by any person not subject to State, local, or tribal
government enforcement actions for violations of this Act to
the Attorney General of the United States or a United States
attorney, who shall take appropriate actions to enforce 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 Federal Government in enforcing 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 this Act
and other laws relating to contraband tobacco products.
``(B) Allocation of funds.--Of the amount available
to the Attorney General of the United States under
subparagraph (A), not less than 50 percent shall be
made available only to the agencies and offices within
the Department of Justice that were responsible for the
enforcement actions in which the penalties concerned
were imposed or for any underlying investigations.
``(4) Nonexclusivity of remedy.--
``(A) In general.--The remedies available under
this section and section 3 are in addition to any other
remedies available under Federal, State, local, tribal,
or other law.
``(B) State court proceedings.--Nothing in this Act
shall be construed to expand, restrict, or otherwise
modify any right of an authorized State official to
proceed in State court, or take other enforcement
actions, on the basis of an alleged violation of State
or other law.
``(C) Tribal court proceedings.--Nothing in this
Act shall be construed to expand, restrict, or
otherwise modify any right of an authorized Indian
tribal government official to proceed in tribal court,
or take other enforcement actions, on the basis of an
alleged violation of tribal law.
``(D) Local government enforcement.--Nothing in
this Act shall be construed to expand, restrict, or
otherwise modify any right of an authorized local
government official to proceed in State court, or take
other enforcement actions, on the basis of an alleged
violation of local or other law.
``(d) Persons Dealing in Tobacco Products.--Any person who holds a
permit under section 5712 of the Internal Revenue Code of 1986
(regarding permitting of manufacturers and importers of tobacco
products and export warehouse proprietors) may bring an action in an
appropriate United States district court to prevent and restrain
violations of this Act by any person other than a State, local, or
tribal government.
``(e) Notice.--
``(1) Persons dealing in tobacco products.--Any person who
commences a civil action under subsection (d) shall inform the
Attorney General of the 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
information on the Internet and by other appropriate means,
information regarding all enforcement actions brought by the
United States, or reported to the Attorney General of the
United States, under this section, including information
regarding the resolution of the enforcement actions and how the
Attorney General of the United States has responded to
referrals of evidence of violations pursuant to subsection
(c)(2).
``(2) Reports to congress.--Not later than 1 year after the
date of enactment of the Prevent All Cigarette Trafficking Act
of 2009, and every year thereafter until the date that is 5
years after such date of enactment, the Attorney General of the
United States shall submit to Congress 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.--
``(1) In general.--All cigarettes and smokeless tobacco (as
those terms are defined in section 1 of the Act of October 19,
1949, commonly referred to as the Jenkins Act) are nonmailable
and shall not be deposited in or carried through the mails. The
United States Postal Service shall not accept for delivery or
transmit through the mails any package that it knows or has
reasonable cause to believe contains any cigarettes or
smokeless tobacco made nonmailable by this paragraph.
``(2) Reasonable cause.--For the purposes of this
subsection reasonable cause includes--
``(A) a statement on a publicly available website,
or an advertisement, by any person that the person will
mail matter which is nonmailable under this section in
return for payment; or
``(B) the fact that the person is on the list
created under section 2A(e) of the Jenkins Act.
``(b) Exceptions.--
``(1) Cigars.--Subsection (a) shall not apply to cigars (as
defined in section 5702(a) of the Internal Revenue Code of
1986).
``(2) Geographic exception.--Subsection (a) shall not apply
to mailings within the State of Alaska or within the State of
Hawaii.
``(3) Business purposes.--
``(A) In general.--Subsection (a) shall not apply
to tobacco products mailed only--
``(i) 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
``(ii) for regulatory purposes between any
business described in clause (i) and an agency
of the Federal Government or a State
government.
``(B) Rules.--
``(i) In general.--Not later than 180 days
after the date of enactment of the Prevent All
Cigarette Trafficking Act of 2009, the
Postmaster General shall issue a final rule
which shall establish the standards and
requirements that apply to all mailings
described in subparagraph (A).
``(ii) Contents.--The final rule issued
under clause (i) shall require--
``(I) the United States Postal
Service to verify that any person
submitting an otherwise nonmailable
tobacco product into the mails as
authorized under this paragraph is a
business or government agency permitted
to make a mailing under this paragraph;
``(II) the United States Postal
Service to ensure that any recipient of
an otherwise nonmailable tobacco
product sent through the mails under
this paragraph is a business or
government agency that may lawfully
receive the product;
``(III) that any mailing described
in subparagraph (A) shall be sent
through the systems of the United
States Postal Service that provide for
the tracking and confirmation of the
delivery;
``(IV) that the identity of the
business or government entity
submitting the mailing containing
otherwise nonmailable tobacco products
for delivery and the identity of the
business or government entity receiving
the mailing are clearly set forth on
the package;
``(V) the United States Postal
Service to maintain identifying
information described in subclause (IV)
during the 3-year period beginning on
the date of the mailing and make the
information available to the Postal
Service, the Attorney General of the
United States, and to persons eligible
to bring enforcement actions under
section 3(d) of the Prevent All
Cigarette Trafficking Act of 2009;
``(VI) that any mailing described
in subparagraph (A) be marked with a
United States Postal Service label or
marking that makes it clear to
employees of the United States Postal
Service 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; and
``(VII) that any mailing described
in subparagraph (A) be delivered only
to a verified employee of the recipient
business or government agency, who is
not a minor and who shall be required
to sign for the mailing.
``(C) Definition.--In this paragraph, the term
`minor' means an individual who is less than the
minimum age required for the legal sale or purchase of
tobacco products as determined by applicable law at the
place the individual is located.
``(4) Certain individuals.--
``(A) In general.--Subsection (a) shall not apply
to tobacco products mailed by individuals who are not
minors for noncommercial purposes, including the return
of a damaged or unacceptable tobacco product to the
manufacturer.
``(B) Rules.--
``(i) In general.--Not later than 180 days
after the date of enactment of the Prevent All
Cigarette Trafficking Act of 2009, the
Postmaster General shall issue a final rule
which shall establish the standards and
requirements that apply to all mailings
described in subparagraph (A).
``(ii) Contents.--The final rule issued
under clause (i) shall require--
``(I) the United States Postal
Service to verify that any person
submitting an otherwise nonmailable
tobacco product into the mails as
authorized under this paragraph is the
individual identified on the return
address label of the package and is not
a minor;
``(II) for a mailing to an
individual, the United States Postal
Service to require the person
submitting the otherwise nonmailable
tobacco product into the mails as
authorized by this paragraph to affirm
that the recipient is not a minor;
``(III) that any package mailed
under this paragraph shall weigh not
more than 10 ounces;
``(IV) that any mailing described
in subparagraph (A) shall be sent
through the systems of the United
States Postal Service that provide for
the tracking and confirmation of the
delivery;
``(V) that a mailing described in
subparagraph (A) shall not be delivered
or placed in the possession of any
individual who has not been verified as
not being a minor;
``(VI) for a mailing described in
subparagraph (A) to an individual, that
the United States Postal Service shall
deliver the package only to a recipient
who is verified not to be a minor at
the recipient address or transfer it
for delivery to an Air/Army Postal
Office or Fleet Postal Office number
designated in the recipient address;
and
``(VII) that no person may initiate
more than 10 mailings described in
subparagraph (A) during any 30-day
period.
``(C) Definition.--In this paragraph, the term
`minor' means an individual who is less than the
minimum age required for the legal sale or purchase of
tobacco products as determined by applicable law at the
place the individual is located.
``(5) Exception for mailings for consumer testing by
manufacturers.--
``(A) In general.--Subject to subparagraph (B),
subsection (a) shall not preclude a legally operating
cigarette manufacturer or a legally authorized agent of
a legally operating cigarette manufacturer from using
the United States Postal Service to mail cigarettes to
verified adult smoker solely for consumer testing
purposes, if--
``(i) the cigarette manufacturer has a
permit, in good standing, issued under section
5713 of the Internal Revenue Code of 1986;
``(ii) the package of cigarettes mailed
under this paragraph contains not more than 12
packs of cigarettes (240 cigarettes);
``(iii) the recipient does not receive more
than 1 package of cigarettes from any 1
cigarette manufacturer under this paragraph
during any 30-day period;
``(iv) all taxes on the cigarettes mailed
under this paragraph levied by the State and
locality of delivery are paid to the State and
locality before delivery, and tax stamps or
other tax-payment indicia are affixed to the
cigarettes as required by law; and
``(v)(I) the recipient has not made any
payments of any kind in exchange for receiving
the cigarettes;
``(II) the recipient is paid a fee by the
manufacturer or agent of the manufacturer for
participation in consumer product tests; and
``(III) the recipient, in connection with
the tests, evaluates the cigarettes and
provides feedback to the manufacturer or agent.
``(B) Limitations.--Subparagraph (A) shall not--
``(i) permit a mailing of cigarettes to an
individual located in any State that prohibits
the delivery or shipment of cigarettes to
individuals in the State, or preempt, limit, or
otherwise affect any related State laws; or
``(ii) permit a manufacturer, directly or
through a legally authorized agent, to mail
cigarettes in any calendar year in a total
amount greater than 1 percent of the total
cigarette sales of the manufacturer in the
United States during the calendar year before
the date of the mailing.
``(C) Rules.--
``(i) In general.--Not later than 180 days
after the date of enactment of the Prevent All
Cigarette Trafficking Act of 2009, the
Postmaster General shall issue a final rule
which shall establish the standards and
requirements that apply to all mailings
described in subparagraph (A).
``(ii) Contents.--The final rule issued
under clause (i) shall require--
``(I) the United States Postal
Service to verify that any person
submitting a tobacco product into the
mails under this paragraph is a legally
operating cigarette manufacturer
permitted to make a mailing under this
paragraph, or an agent legally
authorized by the legally operating
cigarette manufacturer to submit the
tobacco product into the mails on
behalf of the manufacturer;
``(II) the legally operating
cigarette manufacturer submitting the
cigarettes into the mails under this
paragraph to affirm that--
``(aa) the manufacturer or
the legally authorized agent of
the manufacturer has verified
that the recipient is an adult
established smoker;
``(bb) the recipient has
not made any payment for the
cigarettes;
``(cc) the recipient has
signed a written statement that
is in effect indicating that
the recipient wishes to receive
the mailings; and
``(dd) the manufacturer or
the legally authorized agent of
the manufacturer has offered
the opportunity for the
recipient to withdraw the
written statement described in
item (cc) not less frequently
than once in every 3-month
period;
``(III) the legally operating
cigarette manufacturer or the legally
authorized agent of the manufacturer
submitting the cigarettes into the
mails under this paragraph to affirm
that any package mailed under this
paragraph contains not more than 12
packs of cigarettes (240 cigarettes) on
which all taxes levied on the
cigarettes by the State and locality of
delivery have been paid and all related
State tax stamps or other tax-payment
indicia have been applied;
``(IV) that any mailing described
in subparagraph (A) shall be sent
through the systems of the United
States Postal Service that provide for
the tracking and confirmation of the
delivery;
``(V) the United States Postal
Service to maintain records relating to
a mailing described in subparagraph (A)
during the 3-year period beginning on
the date of the mailing and make the
information available to persons
enforcing this section;
``(VI) that any mailing described
in subparagraph (A) be marked with a
United States Postal Service label or
marking that makes it clear to
employees of the United States Postal
Service 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; and
``(VII) the United States Postal
Service shall deliver a mailing
described in subparagraph (A) only to
the named recipient and only after
verifying that the recipient is an
adult.
``(D) Definitions.--In this paragraph--
``(i) the term `adult' means an individual
who is not less than 21 years of age; and
``(ii) the term `consumer testing' means
testing limited to formal data collection and
analysis for the specific purpose of evaluating
the product for quality assurance and
benchmarking purposes of cigarette brands or
sub-brands among existing adult smokers.
``(6) Federal government agencies.--An agency of the
Federal Government involved in the consumer testing of tobacco
products solely for public health purposes may mail cigarettes
under the same requirements, restrictions, and rules and
procedures that apply to consumer testing mailings of
cigarettes by manufacturers under paragraph (5), except that
the agency shall not be required to pay the recipients for
participating in the consumer testing.
``(c) Seizure and Forfeiture.--Any cigarettes or smokeless tobacco
made nonmailable by this subsection that are deposited in the mails
shall be subject to seizure and forfeiture, pursuant to the procedures
set forth in chapter 46 of this title. Any tobacco products seized and
forfeited under this subsection shall be destroyed or retained by the
Federal Government for the detection or prosecution of crimes or
related investigations and then destroyed.
``(d) Additional Penalties.--In addition to any other fines and
penalties under this title for violations of this section, any person
violating this section shall be subject to an additional civil penalty
in the amount equal to 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 is
nonmailable matter under this section shall be fined under this title,
imprisoned not more than 1 year, or both.
``(f) Use of Penalties.--There is established a separate account in
the Treasury, to be known as the `PACT Postal Service Fund'.
Notwithstanding any other provision of law, an amount equal to 50
percent of any criminal fines, civil penalties, or other monetary
penalties collected by the Federal Government in enforcing this section
shall be transferred into the PACT Postal Service Fund and shall be
available to the Postmaster General for the purpose of enforcing this
subsection.
``(g) Coordination of Efforts.--The Postmaster General shall
cooperate and coordinate efforts to enforce this section with related
enforcement activities of any other Federal agency or agency of any
State, local, or tribal government, whenever appropriate.
``(h) Actions by State, Local, or Tribal Governments Relating to
Certain Tobacco Products.--
``(1) In general.--A State, through its attorney general,
or a local government or Indian tribe that levies an excise tax
on tobacco products, through its chief law enforcement officer,
may in a civil action in a United States district court obtain
appropriate relief with respect to a violation of this section.
Appropriate relief includes injunctive and equitable relief and
damages equal to the amount of unpaid taxes on tobacco products
mailed in violation of this section to addressees in that
State, locality, or tribal land.
``(2) Sovereign immunity.--Nothing in this subsection 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) Attorney general referral.--A State, through its
attorney general, or a local government or Indian tribe that
levies an excise tax on tobacco products, through its chief law
enforcement officer, may provide evidence of a violation of
this section for commercial purposes by any person not subject
to State, local, or tribal government enforcement actions for
violations of this section to the Attorney General of the
United States, who shall take appropriate actions to enforce
this section.
``(4) Nonexclusivity of remedies.--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.
``(5) Other enforcement actions.--Nothing in this
subsection 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
the State.
``(i) Definition.--In this section, the term `State' has the
meaning given that term in section 1716(k).''.
(b) Clerical Amendment.--The table of sections for chapter 83 of
title 18 is amended by inserting after the item relating to section
1716D the following:
``1716E. Tobacco products as nonmailable.''.
SEC. 4. 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 the person under this chapter; or
``(B) any cigarettes or smokeless tobacco kept or stored by
the person at the premises.
``(2) The district courts of the United States shall have the
authority in a civil action under this subsection to compel inspections
authorized by paragraph (1).
``(3) Whoever denies access to an officer under paragraph (1), or
who fails to comply with an order issued under paragraph (2), shall be
subject to a civil penalty in an amount not to exceed $10,000.''.
SEC. 5. EXCLUSIONS REGARDING INDIAN TRIBES AND TRIBAL MATTERS.
(a) In General.--Nothing in this Act or the amendments made by this
Act shall be construed to amend, modify, or otherwise affect--
(1) any agreements, compacts, or other intergovernmental
arrangements between any State or local government and any
government of an Indian tribe (as that term is defined in
section 4(e) of the Indian Self-Determination and Education
Assistance Act (25 U.S.C. 450b(e)) relating to the collection
of taxes on cigarettes or smokeless tobacco sold in Indian
country;
(2) any State laws that authorize or otherwise pertain to
any such intergovernmental arrangements or create special rules
or procedures for the collection of State, local, or tribal
taxes on cigarettes or smokeless tobacco sold in Indian
country;
(3) any limitations under Federal or State law, including
Federal common law and treaties, on State, local, and tribal
tax and regulatory authority with respect to the sale, use, or
distribution of cigarettes and smokeless tobacco by or to
Indian tribes, tribal members, tribal enterprises, or in Indian
country;
(4) any Federal law, including Federal common law and
treaties, regarding State jurisdiction, or lack thereof, over
any tribe, tribal members, tribal enterprises, tribal
reservations, or other lands held by the United States in trust
for one or more Indian tribes; or
(5) any State or local government authority to bring
enforcement actions against persons located in Indian country.
(b) Coordination of Law Enforcement.--Nothing in this Act or the
amendments made by this Act shall be construed to inhibit or otherwise
affect any coordinated law enforcement effort by 1 or more States or
other jurisdictions, including Indian tribes, through interstate
compact or otherwise, that--
(1) provides for the administration of tobacco product laws
or laws pertaining to interstate sales or other sales of
tobacco products;
(2) provides for the seizure of tobacco products or other
property related to a violation of such laws; or
(3) establishes cooperative programs for the administration
of such laws.
(c) Treatment of State and Local Governments.--Nothing in this Act
or the amendments made by this Act shall be construed to authorize,
deputize, or commission States or local governments as
instrumentalities of the United States.
(d) Enforcement Within Indian Country.--Nothing in this Act or the
amendments made by this Act shall prohibit, limit, or restrict
enforcement by the Attorney General of the United States of this Act or
an amendment made by this Act 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.
(f) Definitions.--In this section--
(1) the term ``Indian country'' has the meaning given that
term in section 1 of the Jenkins Act, as amended by this Act;
and
(2) the term ``tribal enterprise'' means any business
enterprise, regardless of whether incorporated or
unincorporated under Federal or tribal law, of an Indian tribe
or group of Indian tribes.
SEC. 6. 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.--The amendments made by section 4 shall take
effect on the date of enactment of this Act.
SEC. 7. SEVERABILITY.
If any provision of this Act, or any amendment made by this Act, or
the application thereof to any person or circumstance, is held invalid,
the remainder of the Act and the application of the Act to any other
person or circumstance shall not be affected thereby.
SEC. 8. SENSE OF CONGRESS CONCERNING THE PRECEDENTIAL EFFECT OF THIS
ACT.
It is the sense of Congress that unique harms are associated with
online cigarette sales, including problems with verifying the ages of
consumers in the digital market and the long-term health problems
associated with the use of certain tobacco products. This Act was
enacted recognizing the longstanding interest of Congress in urging
compliance with States' laws regulating remote sales of certain tobacco
products to citizens of those States, including the passage of the
Jenkins Act over 50 years ago, which established reporting requirements
for out-of-State companies that sell certain tobacco products to
citizens of the taxing States, and which gave authority to the
Department of Justice and the Bureau of Alcohol, Tobacco, Firearms, and
Explosives to enforce the Jenkins Act. In light of the unique harms and
circumstances surrounding the online sale of certain tobacco products,
this Act is intended to help collect cigarette excise taxes, to stop
tobacco sales to underage youth, and to help the States enforce their
laws that target the online sales of certain tobacco products only.
This Act is in no way meant to create a precedent regarding the
collection of State sales or use taxes by, or the validity of efforts
to impose other types of taxes on, out-of-State entities that do not
have a physical presence within the taxing State.
Passed the Senate March 11, 2010.
Attest:
Secretary.
111th CONGRESS
2d Session
S. 1147
_______________________________________________________________________
AN ACT
To prevent tobacco smuggling, to ensure the collection of all tobacco
taxes, and for other purposes.