[Congressional Record Volume 149, Number 176 (Tuesday, December 9, 2003)]
[Senate]
[Pages S16202-S16212]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
PREVENT ALL CIGARETTE TRAFFICKING ACT
Mr. FRIST. Mr. President, I ask unanimous consent that the Senate
proceed to the immediate consideration of Calendar No. 241, S. 1177.
The PRESIDING OFFICER. The clerk will report the bill by title.
The legislative clerk read as follows:
A bill (S. 1177) to ensure the collection of all cigarette
taxes, and for other purposes.
There being no objection, the Senate proceeded to consider the bill
which had been reported from the Committee on the Judiciary with an
amendment and an amendment to the title, as follows:
[Strike the part in black brackets and insert the part printed in
italic.]
S. 1177
Be it enacted by the Senate and House of Representatives
of the United States of America in Congress assembled,
[SECTION 1. SHORT TITLE.
[This Act may be cited as the ``Prevent All Cigarette
Trafficking Act'' or ``PACT Act''.
[SEC. 2. COLLECTION OF STATE CIGARETTE TAXES.
[(a) Definitions.--Section 1 of the Act of October 19,
1949 (15 U.S.C. 375; commonly referred to as the ``Jenkins
Act''), is amended--
[(1) in paragraph (1), by inserting ``and other legal
entities'' after ``individuals'';
[(2) by striking paragraph (3);
[(3) by redesignating paragraphs (4) through (7) as
paragraphs (3) through (6), respectively; and
[(4) by adding at the end the following new paragraphs:
[``(7) The term `delivery sale' means any sale of
cigarettes to a consumer if--
[``(A) the consumer submits the order for such sale by
means of a telephone or other
[[Page S16203]]
method of voice transmission, the mails, or the Internet or
other online service; or
[``(B) the cigarettes are delivered by use of a common
carrier.
[``(8) The term `common carrier' means any person (other
than a local messenger service or the United States Postal
Service (as defined in section 102 of title 39, United States
Code)) that holds itself out to the general public as a
provider for hire of the transportation by water, land, or
air of merchandise, whether or not the person actually
operates the vessel, vehicle, or aircraft by which the
transportation is provided, between a port or place and a
port or place in the United States.''.
[(b) Reports to State Tobacco Tax Administrators.--
Section 2 of that Act (15 U.S.C. 376) is amended--
[(1) in subsection (a)--
[(A) by striking ``or transfers'' and inserting ``,
transfers, or ships''; and
[(B) by striking ``to other than a distributor licensed
by or located in such State,''; and
[(2) in subsection (b)--
[(A) by striking ``(1)''; and
[(B) by striking ``, and (2)'' and all that follows and
inserting a period.
[(c) Requirements for Delivery Sales.--That Act is
further amended by inserting after section 2 the following
new section:
[``Sec. 2A. (a) Each person making a delivery sale into a
State shall comply with--
[``(1) the shipping requirements set forth in subsection
(b);
[``(2) the recordkeeping requirements set forth in
subsection (c); and
[``(3) all laws of the State generally applicable to
sales of cigarettes that occur entirely within the State,
including laws imposing--
[``(A) excise taxes;
[``(B) sales taxes;
[``(C) licensing and tax-stamping requirements; and
[``(D) other payment obligations.
[``(b)(1) Each person who takes a delivery sale order
shall include on the bill of lading included with the
shipping package containing cigarettes sold pursuant to such
order a clear and conspicuous statement providing as follows:
`CIGARETTES: FEDERAL LAW REQUIRES THE PAYMENT OF ALL
APPLICABLE EXCISE AND SALES TAXES, AND COMPLIANCE WITH
APPLICABLE LICENSING AND TAX-STAMPING OBLIGATIONS'.
[``(2) Any shipping package described in paragraph (1)
that is not labeled in accordance with that paragraph shall
be treated as non-deliverable matter by common carriers.
[``(c)(1) Each person making delivery sales into a State
shall keep a record of all delivery sales so made, organized
by State into which such delivery sales are so made.
[``(2) Records of delivery sales shall be kept under
paragraph (1) in the year in which made and for the next four
years.
[``(3) Records kept under paragraph (1) shall be made
available to tobacco tax administrators of the States in
order to ensure the compliance of persons making delivery
sales with the requirements of this Act.
[``(d) Each State shall have the authority to require any
person making a delivery sale of cigarettes into such State--
[``(1) to collect or pay the taxes referred to in
subsection (a)(3); and
[``(2) to provide evidence that the manufacturer of the
cigarettes sold in such State is in compliance with all
Federal, State, or local laws generally applicable to the
sale or distribution of cigarettes.''.
[(d) Penalties.--Section 3 of that Act (15 U.S.C. 377) is
amended--
[(1) by inserting ``(a)'' before ``Whoever'';
[(2) in subsection (a), as so designated, by striking
``shall be guilty of a misdemeanor and shall be fined not
more than $1,000, or imprisoned not more than 6 months'' and
inserting ``shall be fined not more than $100,000, imprisoned
not more than 2 years''; and
[(3) by adding at the end the following new subsection:
[``(b)(1) Whoever violates any provision of this Act
shall be subject to a civil penalty in an amount not to
exceed 2 percent of the gross sales of cigarettes of such
person during the one-year period ending on the date of the
violation.
[``(2) A civil penalty under paragraph (1) for a
violation of this Act is in addition to any criminal penalty
under subsection (a) for the violation.''.
[(e) Injunctions.--Section 4 of that Act (15 U.S.C. 378)
is amended--
[(1) by inserting ``(a)'' before ``The United States
district courts''; and
[(2) by adding at the end the following new subsections:
[``(b)(1) A State, through its attorney general, or any
person who holds a permit under section 5712 of the Internal
Revenue Code of 1986, may bring an action in the United
States district courts to prevent and restrain violations of
this Act by any person (or by any person controlling such
person).
[``(2) Nothing in this section shall be construed to
prohibit an authorized State official from proceeding in
State court on the basis of an alleged violation of State
law.
[``(c) The Attorney General, acting through the Director
of the Bureau of Alcohol, Tobacco, Firearms, and Explosives,
shall administer and enforce the provisions of this Act.''.
[SEC. 3. TREATMENT OF CIGARETTES AS NONMAILABLE MATTER.
[Section 1716 of title 18, United States Code, is
amended--
[(1) by redesignating subsection (j) as subsection (k);
and
[(2) by inserting after subsection (i) the following new
subsection (j):
[``(j) The transmission in the mails of cigarettes (as
that term is defined in section 2341(1) of this title) for
purposes of sale is prohibited, and cigarettes for such
purposes are nonmailable and shall not be deposited in or
carried through the mails.''.
[SEC. 4. PENAL PROVISIONS REGARDING TRAFFICKING IN CONTRABAND
CIGARETTES.
[(a) Threshold Quantity for Treatment as Contraband.--(1)
Section 2341(2) of title 18, United States Code, is amended
by striking ``60,000 cigarettes'' and inserting ``10,000
cigarettes''.
[(2) Section 2342(b) of that title is amended by striking
``60,000'' and inserting ``10,000''.
[(3) Section 2343 of that title is amended--
[(A) in subsection (a), by striking ``60,000'' and
inserting ``10,000''; and
[(B) in subsection (b), by striking ``60,000'' and
inserting ``10,000''.
[(b) Recordkeeping, Reporting, and Inspection.--Section
2343 of that title, as amended by subsection (a)(3) of this
section, is further amended--
(1) in subsection (a)--
[(A) in the matter preceding paragraph (1), by striking
``only--'' and inserting ``such information as the Attorney
General considers appropriate for purposes of enforcement of
this chapter, including--''; and
[(B) in the flush matter following paragraph (3), by
striking the second sentence;
[(2) by redesignating subsection (b) as subsection (c);
[(3) by inserting after subsection (a) the following new
subsection (b):
[``(b) Any person who engages in a delivery sale, and who
ships, sells, distributes, or receives any quantity in excess
of 10,000 cigarettes within a single month, shall submit to
the Attorney General, pursuant to rules or regulations
prescribed by the Attorney General, a report that sets forth
the following:
[``(1) The person's beginning and ending inventory of
cigarettes (in total) for such month.
[``(2) The total quantity of cigarettes that the person
received within such month from each other person (itemized
by name and address).
[``(3) The total quantity of cigarettes that the person
distributed within such month to each person (itemized by
name and address) other than a retail purchaser.''; and
[(4) by adding at the end the following new subsections:
[``(d) Any report required to be submitted under this
chapter to the Attorney General shall also be submitted to
the Secretary of the Treasury.
[``(e) In this section:
[``(1) The term `delivery sale' means any sale of
cigarettes to a consumer if--
[``(A) the consumer submits the order for such sale by
means of a telephone or other method of voice transmission,
the mails, or the Internet or other online service; or
[``(B) the cigarettes are delivered by use of a common
carrier.
[``(2) The term `common carrier' means any person (other
than a local messenger service or the United States Postal
Service (as defined in section 102 of title 39, United States
Code)) that holds itself out to the general public as a
provider for hire of the transportation by water, land, or
air of merchandise, whether or not the person actually
operates the vessel, vehicle, or aircraft by which the
transportation is provided, between a port or place and a
port or place in the United States.''.
[(c) Disposal or Use of Forfeited Cigarettes.--Section
2344(c) of that title is amended by striking ``seizure and
forfeiture,'' and all that follows and inserting ``seizure
and forfeiture, and any cigarettes so seized and forfeited
shall be either--
[``(1) destroyed and not resold; or
[``(2) used for undercover investigative operations for
the detection and prosecution of crimes, and then destroyed
and not resold.''.
[(d) Enforcement.--Section 2346 of that title is
amended--
[(1) by inserting ``(a)'' before ``The Attorney
General''; and
[(2) by adding at the end the following new subsection:
[``(b) A State, through its attorney general, or any
person who holds a permit under section 5712 of the Internal
Revenue Code of 1986, may bring an action in the United
States district courts to prevent and restrain violations of
this chapter by any person (or by any person controlling such
person).''.
[(e) Conforming and Clerical Amendments.--(1) The section
heading for section 2343 of that title is amended to read as
follows:
[``Sec. 2343. Recordkeeping, reporting, and inspection''.
[(2) The table of sections at the beginning of chapter
114 of that title is amended by striking the item relating to
section 2343 and inserting the following new item:
[``2343. Recordkeeping, reporting, and inspection.''.
[SEC. 5. COMPLIANCE WITH MODEL STATUTE OR QUALIFYING STATUTE.
[(a) In General.--An interstate tobacco seller may not
sell in, deliver to, or place for delivery to a State that is
a party to the
[[Page S16204]]
Master Settlement Agreement any cigarette manufactured by a
Tobacco Product Manufacturer that is not in full compliance
with the terms of the Model Statute or Qualifying Statute
enacted by such State requiring funds to be placed into a
qualified escrow account under specified conditions, or any
regulations promulgated pursuant to such statute.
[(b) Penalties.--(1) Whoever shall knowingly and
willfully violate subsection (a) shall be fined not more than
$100,000, imprisoned not more than 2 years, or both.
[(2) Whoever shall violate subsection (a) shall be
subject to a civil penalty in an amount not to exceed 2
percent of the gross sales of cigarettes of such person
during the one-year period ending on the date of the
violation.
[(3) A civil penalty under paragraph (2) for a violation
of subsection (a) is in addition to any criminal penalty
under paragraph (1) for the violation.
[(c) Jurisdiction To Prevent and Restrain Violations.--
(1) The United States district courts shall have jurisdiction
to prevent and restrain violations of subsection (a).
[(2) A State, through its attorney general, or any person
who holds a permit under section 5712 of the Internal Revenue
Code of 1986, may bring an action in the United States
district courts to prevent and restrain violations of
subsection (a) by any person (or by any person controlling
such person).
[(3) 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 State
law.
[(4) The Attorney General, acting through the Director of
the Bureau of Alcohol, Tobacco, Firearms, and Explosives,
shall administer and enforce subsection (a).
[(d) Definitions.--In this section:
[(1) Master settlement agreement.-- The term ``Master
Settlement Agreement'' means the agreement executed November
23, 1998, by the Attorneys General of 46 States, the District
of Columbia, the Commonwealth of Puerto Rico, and four
Territories of the United States, on the one hand, and
certain tobacco manufacturers on the other hand.
[(2) Tobacco product manufacturer.--The term ``Tobacco
Product Manufacturer'' has the meaning given that term in
section II(uu) of the Master Settlement Agreement.
[(3) Model statute; qualifying statute.--The terms
``Model Statute'' and ``Qualifying Statute'' means a statute
as defined in section IX(d)(2)(e) of the Master Settlement
Agreement.
[SEC. 6. UNDERCOVER CRIMINAL INVESTIGATIONS OF THE BUREAU OF
ALCOHOL, TOBACCO, FIREARMS, AND EXPLOSIVES.
[(a) In General.--(1) Commencing as of the date of the
enactment of this Act and without fiscal year limitation, the
authorities in section 102(b) of the Department of Justice
and Related Agencies Appropriations Act, 1993 (title I of
Public Law 102-395; 106 Stat. 1838) shall be available to the
Bureau of Alcohol, Tobacco, Firearms, and Explosives for
undercover investigative operations of the Bureau which are
necessary for the detection and prosecution of crimes against
the United States.
[(2) For purposes of the exercise of the authorities
referred to in paragraph (1) by the Bureau, a reference in
such section 102(b) to the Federal Bureau of Investigation
shall be deemed to be a reference to the Bureau of Alcohol,
Tobacco, Firearms, and Explosives, and a reference to the
Director of the Federal Bureau of Investigation shall be
deemed to be a reference to the Director of the Bureau of
Alcohol, Tobacco, Firearms, and Explosives.
[(b) Limitations in Appropriations Acts.--The exercise of
the authorities referred to in subsection (a)(1) by the
Bureau of Alcohol, Tobacco, Firearms, and Explosives shall be
subject to the provisions of appropriations Acts.
[SEC. 7. INSPECTION BY BUREAU OF ALCOHOL, TOBACCO, FIREARMS,
AND EXPLOSIVES OF RECORDS OF CERTAIN CIGARETTE
SELLERS.
[(a) In General.--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 (b) for the purposes of inspecting--
[(1) any records or information required to be maintained
by such person under the provisions of law referred to in
subsection (c); or
[(2) any cigarettes kept or stored by such person at such
premises.
[(b) Covered Persons.--A person described in this
subsection is any person who engages in a delivery sale, and
who ships, sells, distributes, or receives any quantity in
excess of 10,000 cigarettes within a single month.
[(c) Covered Provisions of Law.--The provisions of law
referred to in this subsection are as follows:
[(1) The Act of October 19, 1949 (15 U.S.C. 375; commonly
referred to as the ``Jenkins Act'').
[(2) Chapter 114 of title 18, United States Code.
[(3) This Act.
[(d) Delivery Sale Defined.--In this section, the term
``delivery sale'' has the meaning given that term in
2343(e)(1) of title 18, United States Code, as amended by
section 4(b)(3) of this Act.
[SEC. 8. EFFECTIVE DATE.
[(a) In General.--Except as provided in subsection (b),
this Act shall take effect 90 days after the date of the
enactment of this Act.
[(b) ATFE Authority.--
[(1) In general.--Sections 6 and 7 shall take effect on
the date of the enactment of this Act.
[(2) Definition.--For purposes of section 7, the
definition of delivery sale in section 2343(e)(1) of title
18, United States Code, as amended by section 4(b)(3) of this
Act, shall take effect on the date of the enactment of this
Act.]
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Prevent All Cigarette
Trafficking Act'' or ``PACT Act''.
SEC. 2. COLLECTION OF STATE CIGARETTE AND SMOKELESS TOBACCO
TAXES.
(a) Definitions.--Section 1 of the Act of October 19,
1949 (15 U.S.C. 375; commonly referred to as the ``Jenkins
Act''), is amended--
(1) by striking paragraphs (1), (2), and (3) and
inserting the following new paragraphs:
``(1) The term `attorney general', with respect to a
State, means the attorney general or other chief law
enforcement officer of the State, or the designee of that
officer.
``(2) The term `cigarette' means--
``(A) any roll of tobacco wrapped in paper or in any
substance not containing tobacco which is to be heated or
burned;
``(B) any roll of tobacco wrapped in any substance
containing tobacco that, because of its appearance, the type
of tobacco used in the filler, or its packaging or labeling,
is likely to be offered to, or purchased by, consumers as a
cigarette described in subparagraph (A);
``(C) any roll of tobacco wrapped in any substance that
because of its appearance, the type of tobacco used in the
filler, or its packaging or labeling, is likely to be offered
to, or purchased by, consumers as a cigarette; or
``(D) loose rolling tobacco that, because of its
appearance, type, packaging, or labeling, is likely to be
offered to, or purchased by, consumers as tobacco for making
cigarettes.
``(3) The term `smokeless tobacco' means any finely cut,
ground, powdered, or leaf tobacco that is intended to be
placed in the oral or nasal cavity or otherwise consumed
without being combusted.'';
(2) by striking paragraph (6) and inserting the following
new paragraph (6):
``(6) The term `delivery sale' means any sale of
cigarettes or smokeless tobacco in interstate commerce to a
consumer if--
``(A) the consumer submits the order for such sale by
means of a telephone or other method of voice transmission,
the mails, or the Internet or other online service, or the
seller is otherwise not in the physical presence of the buyer
when the request for purchase or order is made; or
``(B) the cigarettes or smokeless tobacco are delivered
by use of a common carrier, private delivery service, or the
mails, or the seller is not in the physical presence of the
buyer when the buyer obtains personal possession of the
delivered cigarettes or smokeless tobacco.''; and
(3) by adding at the end the following new paragraphs:
``(8) The term `delivery seller' means a person who makes
a delivery sale.
``(9) The term `common carrier' means any person (other
than a local messenger service or the United States Postal
Service (as defined in section 102 of title 39, United States
Code)) that holds itself out to the general public as a
provider for hire of the transportation by water, land, or
air of merchandise, whether or not the person actually
operates the vessel, vehicle, or aircraft by which the
transportation is provided, between a port or place and a
port or place in the United States.
``(10) The term `interstate commerce' means commerce
between a State and any place outside the State, commerce
between a State and any Indian lands in the State, or
commerce between points in the same State but though any
place outside the State or through any Indian lands.
``(11) The term `person' means an individual,
corporation, company, association, firm, partnership,
society, State government, local government, Indian tribal
government, governmental organization of such government, or
joint stock company.
``(12) The term `State' means a State of the United
States, the District of Columbia, the Commonwealth of Puerto
Rico, or any territory or possession of the United States.''.
(b) Reports to State Tobacco Tax Administrators.--Section
2 of that 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 striking ``or transfers'' and inserting ``,
transfers, or ships''; and
(ii) by striking ``to other than a distributor licensed
by or located in such State,'';
(B) in paragraph (1), by inserting before the semicolon
the following: ``, as well as telephone numbers for each
place of business, a principal electronic mail address, any
website addresses, and the name, address, and telephone
number of an agent in the State authorized to accept service
on behalf of such person''; and
(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'';
and
(3) in subsection (b)--
(A) by striking ``(1)''; and
(B) by striking ``, and (2)'' and all that follows and
inserting a period.
(c) Requirements for Delivery Sales.--That Act is further
amended by inserting after section 2 the following new
section:
``Sec. 2A. (a) Each delivery seller shall comply with--
[[Page S16205]]
``(1) the shipping requirements set forth in subsection
(b);
``(2) the recordkeeping requirements set forth in
subsection (c);
``(3) all State and other laws generally applicable to
sales of cigarettes or smokeless tobacco that occur entirely
within the State, including laws imposing--
``(A) excise taxes;
``(B) sales taxes;
``(C) licensing and tax-stamping requirements; 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)(1) Each delivery seller shall include on the bill
of lading included with the shipping package containing
cigarettes or smokeless tobacco sold pursuant to such order a
clear and conspicuous statement providing as follows:
`CIGARETTES/SMOKELESS TOBACCO: FEDERAL LAW REQUIRES THE
PAYMENT OF ALL APPLICABLE EXCISE AND SALES TAXES, AND
COMPLIANCE WITH APPLICABLE LICENSING AND TAX-STAMPING
OBLIGATIONS'.
``(2) Any shipping package described in paragraph (1)
that is not labeled in accordance with that paragraph shall
be treated as non-deliverable matter by a common carrier or
the United States Postal Service if the common carrier or the
United States Postal Service, as the case may be, knows or
should know the contents of the package.
``(c)(1) Each delivery seller shall keep a record of all
delivery sales so made, including all of the information
described in section 2(a)(2), organized by State into which
such delivery sales are so made.
``(2) Records of delivery sales shall be kept under
paragraph (1) in the year in which made and for the next four
years.
``(3) Records kept under paragraph (1) shall be made
available to tobacco tax administrators of the States,
attorneys general of the States, and 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) Unless the law of the State and place in which
cigarettes or smokeless tobacco are delivered pursuant to a
delivery sale in interstate commerce requires otherwise for
the payment to the government of an excise tax imposed on the
delivery sale, or provides, for delivery sales of smokeless
tobacco, for the delivery seller to collect the excise tax
from the consumer and remit the excise tax to the government,
the cigarettes or smokeless tobacco may not be delivered to
the buyer unless in advance of the delivery--
``(1) the excise tax has been paid to the government; and
``(2) any required stamps or other indicia that the
excise tax has been paid are properly affixed or applied to
the cigarettes or smokeless tobacco.
``(e)(1) Each State may compile a list of delivery
sellers who are in compliance with this Act with respect to
such State. If a State posts a list pursuant to this
subsection that specifically refers to this subsection, no
common carrier or other person may knowingly deliver
cigarettes or smokeless tobacco to consumers in such State
unless the delivery seller is on the list at the time of
delivery.
``(2)(A) Each State may compile a list of delivery
sellers who are not in compliance with this Act with respect
to such State.
``(B) A State may provide such a list to a common
carrier, the United States Postal Service, or other person.
Such a list shall be confidential, and a common carrier, the
United States Postal Service, or other person that receives
such a list shall maintain the confidentiality of such list.
``(C) If a State provides such a list pursuant to this
subsection that specifically refers to this subsection, no
common carrier, the United States Postal Service, or other
person may knowingly deliver any item to a consumer in such
State for a delivery seller on such list unless the common
carrier, the United States Postal Service, or person in good
faith determines that the item does not include cigarettes or
smokeless tobacco.
``(f) 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.--Section 3 of that Act (15 U.S.C. 377) is
amended--
(1) by inserting ``(a)'' before ``Whoever'';
(2) in subsection (a), as so designated, by striking
``shall be guilty of a misdemeanor and shall be fined not
more than $1,000, or imprisoned not more than 6 months'' and
inserting ``shall be guilty of a felony, fined under
subchapter C of chapter 227 of title 18, imprisoned not more
than three years, or both''; and
(3) by adding at the end the following new subsection:
``(b)(1) Whoever violates any provision of this Act shall
be subject to a civil penalty in an amount not to exceed the
greater of--
``(A) $5,000 in the case of the first violation, or
$10,000 for any other violation; or
``(B) for any violation, 2 percent of the gross sales of
cigarettes or smokeless tobacco of such person during the
one-year period ending on the date of the violation.
``(2) A civil penalty under paragraph (1) for a violation
of this Act is in addition to any criminal penalty under
subsection (a) for the violation.''.
(e) Enforcement.--Section 4 of that Act (15 U.S.C. 378)
is amended--
(1) by inserting ``(a)'' before ``The United States
district courts'';
(2) in subsection (a), as so designated, by inserting
before the period the following: ``, and to provide other
appropriate injunctive or equitable relief, including money
damages, for such violations''; and
(3) by adding at the end the following new subsections:
``(b)(1) A State, through its attorney general, or any
person who holds a permit under section 5712 of the Internal
Revenue Code of 1986, may bring an action in the United
States district courts to prevent and restrain violations of
this Act by any person (or by any person controlling such
person).
``(2) A State, through its attorney general, may in a
civil action under this Act obtain any other appropriate
relief for violations of this Act by any person (or from any
person controlling such person), including civil penalties,
money damages, and injunctive or other equitable relief.
``(3) The remedies available under paragraphs (1) and (2)
are in addition to any other remedies available under
Federal, State, or other law.
``(4) Nothing in this Act shall be construed to prohibit
an authorized State official from proceeding in State court,
or taking other enforcement actions, on the basis of an
alleged violation of State or other law.
``(c) The Attorney General shall administer and enforce
the provisions of this Act.
``(d)(1) Any person who holds a permit under section 5712
of the Internal Revenue Code of 1986 who commences a civil
action under paragraph (1) shall inform the Attorney General
of the United States of the action.
``(2) It is the sense of Congress that any attorney
general of a State who commences a civil action under
paragraph (1) or (2) should inform the Attorney General of
the United States of the action.
``(e) The Attorney General of the United States shall
make available to the public information about all actions
under subsection (a), and the resolution of such actions,
including by posting such information on the Internet and by
other means.''.
SEC. 3. TREATMENT OF CIGARETTES AND SMOKELESS TOBACCO AS
NONMAILABLE MATTER.
Section 1716 of title 18, United States Code, is
amended--
(1) by redesignating subsections (j) and (k) as
subsections (k) and (l), respectively; and
(2) by inserting after subsection (i) the following new
subsection (j):
``(j) The transmission in the mails of any tobacco
product, including cigarettes (as that term is defined in
section 1(2) of the Act of October 19, 1949 (15 U.S.C. 375;
commonly referred to as the `Jenkins Act')) and smokeless
tobacco (as that term is defined in section 1(3) of that
Act), is prohibited, and tobacco products are nonmailable and
shall not be deposited in or carried through the mails.''.
SEC. 4. PENAL PROVISIONS REGARDING TRAFFICKING IN CONTRABAND
CIGARETTES OR SMOKELESS TOBACCO.
(a) Threshold Quantity for Treatment as Contraband
Cigarettes.--(1) Section 2341(2) of title 18, United States
Code, is amended by striking ``60,000 cigarettes'' and
inserting ``10,000 cigarettes''.
(2) Section 2342(b) of that title is amended by striking
``60,000'' and inserting ``10,000''.
(3) Section 2343 of that title is amended--
(A) in subsection (a), by striking ``60,000'' and
inserting ``10,000''; and
(B) in subsection (b), by striking ``60,000'' and
inserting ``10,000''.
(b) Contraband Smokeless Tobacco.--(1) Section 2341 of
that title is amended--
(A) in paragraph (4), by striking ``and'' at the end;
(B) in paragraph (5), by striking the period at the end
and inserting a semicolon; and
(C) by adding at the end the following new paragraphs:
``(6) the term `smokeless tobacco' means any finely cut,
ground, powdered, or leaf tobacco that is intended to be
placed in the oral or nasal cavity or otherwise consumed
without being combusted; and
``(7) the term `contraband smokeless tobacco' means a
quantity in excess of 500 single-unit consumer-sized cans or
packages of smokeless tobacco, or their equivalent, that are
in the possession of any person other than--
``(A) a person holding a permit issued pursuant to
chapter 52 of the Internal Revenue Code of 1986 as
manufacturer of tobacco products or as an export warehouse
proprietor, a person operating a customs bonded warehouse
pursuant to section 311 or 555 of the Tariff Act of 1930 (19
U.S.C. 1311, 1555), or an agent of such person;
``(B) a common carrier transporting such smokeless
tobacco under a proper bill of lading or freight bill which
states the quantity, source, and designation of such
smokeless tobacco;
``(C) a person who--
``(i) is licensed or otherwise authorized by the State
where such smokeless tobacco is found to engage in the
business of selling or distributing tobacco products; and
``(ii) has complied with the accounting, tax, and payment
requirements relating to such license or authorization with
respect to such smokeless tobacco; or
``(D) an officer, employee, or agent of the United States
or a State, or any department, agency, or instrumentality of
the United States or a State (including any political
subdivision of a State), having possession of such smokeless
tobacco in connection with the performance of official
duties.''.
(2) Section 2342(a) of that title is amended by inserting
``or contraband smokeless tobacco'' after ``contraband
cigarettes''.
(3) Section 2343(a) of that title is amended by inserting
``, or any quantity of smokeless tobacco in excess of 500
single-unit consumer-sized
[[Page S16206]]
cans or packages,'' before ``in a single transaction''.
(4) Section 2344(c) of that title is amended by inserting
``or contraband smokeless tobacco'' after ``contraband
cigarettes''.
(5) Section 2345 of that title is amended by inserting
``or smokeless tobacco'' after ``cigarettes'' each place it
appears.
(c) Recordkeeping, Reporting, and Inspection.--Section
2343 of that title, as amended by this section, is further
amended--
(1) in subsection (a)--
(A) in the matter preceding paragraph (1), by striking
``only--'' and inserting ``such information as the Attorney
General considers appropriate for purposes of enforcement of
this chapter, including--''; and
(B) in the flush matter following paragraph (3), by
striking the second sentence;
(2) by redesignating subsection (b) as subsection (c);
(3) by inserting after subsection (a) the following new
subsection (b):
``(b) Any person who engages in a delivery sale, and who
ships, sells, or distributes any quantity in excess of 10,000
cigarettes, or any quantity in excess of 500 single-unit
consumer-sized cans or packages of smokeless tobacco, or
their equivalent, within a single month, shall submit to the
Attorney General, pursuant to rules or regulations prescribed
by the Attorney General, a report that sets forth the
following:
``(1) The person's beginning and ending inventory of
cigarettes and cans or packages of smokeless tobacco (in
total) for such month.
``(2) The total quantity of cigarettes and cans or
packages of smokeless tobacco that the person received within
such month from each other person (itemized by name and
address).
``(3) The total quantity of cigarettes and cans or
packages of smokeless tobacco that the person distributed
within such month to each person (itemized by name and
address) other than a retail purchaser.''; and
(4) by adding at the end the following new subsections:
``(d) Any report required to be submitted under this
chapter to the Attorney General shall also be submitted to
the Secretary of the Treasury and to the attorneys general
and the tax administrators of the States from where the
shipments, deliveries, or distributions both originated and
concluded.
``(e) In this section, the term `delivery sale' means any
sale of cigarettes or smokeless tobacco in interstate
commerce to a consumer if--
``(A) the consumer submits the order for such sale by
means of a telephone or other method of voice transmission,
the mails, or the Internet or other online service, or by any
other means where the consumer is not in the same physical
location as the seller when the purchase or offer of sale is
made; or
``(B) the cigarettes or smokeless tobacco are delivered
by use of the mails, common carrier, private delivery
service, or any other means where the consumer is not in the
same physical location as the seller when the consumer
obtains physical possession of the cigarettes or smokeless
tobacco.
``(f) In this section, the term `interstate commerce'
means commerce between a State and any place outside the
State, commerce between a State and any Indian lands in the
State, or commerce between points in the same State but
through any place outside the State or though any Indian
lands.''.
(d) Disposal or Use of Forfeited Cigarettes and Smokeless
Tobacco.--Section 2344(c) of that title, as amended by this
section, is further amended by striking ``seizure and
forfeiture,'' and all that follows and inserting ``seizure
and forfeiture, and any cigarettes or smokeless tobacco so
seized and forfeited shall be either--
``(1) destroyed and not resold; or
``(2) used for undercover investigative operations for
the detection and prosecution of crimes, and then destroyed
and not resold.''.
(e) Enforcement.--Section 2346 of that title is amended--
(1) by inserting ``(a)'' before ``The Attorney General'';
and
(2) by adding at the end the following new subsection:
``(b)(1) A State, through its attorney general, or any
person who holds a permit under section 5712 of the Internal
Revenue Code of 1986, may bring an action in the United
States district courts to prevent and restrain violations of
this chapter by any person (or by any person controlling such
person).
``(2) A State, through its attorney general, may in a
civil action under paragraph (1) also obtain any other
appropriate relief for violations of this chapter from any
person (or by any person controlling such person), including
civil penalties, money damages, and injunctive or other
equitable relief.
``(3) The remedies under paragraphs (1) and (2) are an
addition to any other remedies under Federal, State, or other
law.
``(4) Nothing in this subsection shall be construed to
prohibit an authorized State official from proceeding in
State court, or taking other enforcement actions, on the
basis of an alleged violation of State or other law.''.
(f) Conforming and Clerical Amendments.--(1) The section
heading for section 2343 of that title is amended to read as
follows:
``Sec. 2343. Recordkeeping, reporting, and inspection''.
(2) The table of sections at the beginning of chapter 114
of that title is amended by striking the item relating to
section 2343 and inserting the following new item:
``2343. Recordkeeping, reporting, and inspection.''.
(3)(A) The heading for chapter 114 of that title is
amended to read as follows:
``CHAPTER 114--TRAFFICKING IN CONTRABAND CIGARETTES AND SMOKELESS
TOBACCO''.
(B) The table of chapters at the beginning of part I of
that title is amended by striking the item relating to
section 114 and inserting the following new item:
``114. Trafficking in contraband cigarettes and smokeless to2341''.....
SEC. 5. COMPLIANCE WITH MODEL STATUTE OR QUALIFYING STATUTE.
(a) In General.--An interstate tobacco seller may not
sell in, deliver to, or place for delivery sale in a State
that is a party to the Master Settlement Agreement any
cigarette manufactured by a Tobacco Product Manufacturer that
is not in full compliance with the terms of the Model Statute
or Qualifying Statute enacted by such State requiring funds
to be placed into a qualified escrow account under specified
conditions, or any regulations promulgated pursuant to such
terms.
(b) Penalties.--(1) Whoever shall knowingly and willfully
violate subsection (a) shall be fined not more than $100,000,
imprisoned not more than 2 years, or both.
(2) Whoever shall violate subsection (a) shall be subject
to a civil penalty in an amount not to exceed 2 percent of
the gross sales of cigarettes of such person during the one-
year period ending on the date of the violation.
(3) A civil penalty under paragraph (2) for a violation
of subsection (a) is in addition to any criminal penalty
under paragraph (1) for the violation and in addition to any
other damages or relief available under law.
(c) Jurisdiction to Prevent and Restrain Violations.--(1)
The United States district courts shall have jurisdiction to
prevent and restrain violations of subsection (a).
(2) A State, through its attorney general, or any person
who holds a permit under section 5712 of the Internal Revenue
Code of 1986, may bring an action in the United States
district courts to prevent and restrain violations of
subsection (a) by any person (or by any person controlling
such person).
(3) A State, through its attorney general, may in a civil
action against any person violating subsection (a) obtain any
appropriate relief for violations of this section from any
person (or by any person controlling such person), including
civil penalties, money damages, and injunctive or other
equitable relief.
(4) The remedies available under paragraphs (2) and (3)
are in addition to any other remedies available under
Federal, State, or other law.
(5) Nothing in this subsection shall be construed to
prohibit an authorized State official from proceeding in
State court or taking other enforcement actions on the basis
of an alleged violation of State or other law.
(6) The Attorney General shall administer and enforce
subsection (a).
(d) Definitions.--In this section:
(1) Master settlement agreement.-- The term ``Master
Settlement Agreement'' means the agreement executed November
23, 1998, by the Attorneys General of 46 States, the District
of Columbia, the Commonwealth of Puerto Rico, and four
Territories of the United States, on the one hand, and
certain tobacco manufacturers on the other hand.
(2) Tobacco product manufacturer.--The term ``Tobacco
Product Manufacturer'' has the meaning given that term in
section II(uu) of the Master Settlement Agreement.
(3) Model statute; qualifying statute.--The terms ``Model
Statute'' and ``Qualifying Statute'' means a statute as
defined in section IX(d)(2)(e) of the Master Settlement
Agreement.
(4) Delivery sale.--The term ``delivery sale'' means any
sale of cigarettes or smokeless tobacco in interstate
commerce to a consumer if--
(A) the consumer submits the order for such sale by means
of a telephone or other method of voice transmission, the
mails, or the Internet or other online service, or the seller
is otherwise not in the physical presence of the buyer when
the request for purchase or order is made; or
(B) the cigarettes or smokeless tobacco are delivered by
use of a common carrier, private delivery service, or the
mails, or the seller is not in the physical presence of the
buyer when the buyer obtains personal possession of the
delivered cigarettes or smokeless tobacco.
(5) Interstate commerce.--The term ``interstate
commerce'' means commerce between a State and any place
outside the State, commerce between a State and any Indian
lands in the State, or commerce between points in the same
State but through any place outside the State or through any
Indian lands.
SEC. 6. UNDERCOVER CRIMINAL INVESTIGATIONS OF THE BUREAU OF
ALCOHOL, TOBACCO, FIREARMS, AND EXPLOSIVES.
(a) In General.--(1) Commencing as of the date of the
enactment of this Act and without fiscal year limitation, the
authorities in section 102(b) of the Department of Justice
and Related Agencies Appropriations Act, 1993 (title I of
Public Law 102-395; 106 Stat. 1838) shall be available to the
Bureau of Alcohol, Tobacco, Firearms, and Explosives for
undercover investigative operations of the Bureau which are
necessary for the detection and prosecution of crimes against
the United States.
(2) For purposes of the exercise of the authorities
referred to in paragraph (1) by the Bureau, a reference in
such section 102(b) to the Federal Bureau of Investigation
shall be deemed to be a reference to the Bureau of Alcohol,
Tobacco, Firearms, and Explosives, and a reference to the
Director of the Federal Bureau of Investigation shall be
deemed to be a reference to the Director of the Bureau of
Alcohol, Tobacco, Firearms, and Explosives.
(b) Limitations in Appropriations Acts.--The exercise of
the authorities referred to in
[[Page S16207]]
subsection (a)(1) by the Bureau of Alcohol, Tobacco,
Firearms, and Explosives shall be subject to the provisions
of appropriations Acts.
SEC. 7. INSPECTION BY BUREAU OF ALCOHOL, TOBACCO, FIREARMS,
AND EXPLOSIVES OF RECORDS OF CERTAIN CIGARETTE
AND SMOKELESS TOBACCO SELLERS.
(a) In General.--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 (b) for the purposes of inspecting--
(1) any records or information required to be maintained
by such person under the provisions of law referred to in
subsection (d); or
(2) any cigarettes or smokeless tobacco kept or stored by
such person at such premises.
(b) Covered Persons.--A person described in this
subsection is any person who engages in a delivery sale, and
who ships, sells, distributes, or receives any quantity in
excess of 10,000 cigarettes, or any quantity in excess of 500
single-unit consumer-sized cans or packages of smokeless
tobacco, within a single month.
(c) Relief.--(1) The district courts of the United States
shall have the authority in a civil action under this
subsection to compel inspections authorized by subsection
(a).
(2) Whoever violates subsection (a) or an order issued
pursuant to paragraph (1) shall be subject to a civil penalty
in an amount not to exceed $10,000 for each violation.
(d) Covered Provisions of Law.--The provisions of law
referred to in this subsection are as follows:
(1) The Act of October 19, 1949 (15 U.S.C. 375; commonly
referred to as the ``Jenkins Act'').
(2) Chapter 114 of title 18, United States Code.
(3) This Act.
(e) Delivery Sale Defined.--In this section, the term
``delivery sale'' has the meaning given that term in
2343(e)(1) of title 18, United States Code, as amended by
section 4(b)(3) of this Act.
SEC. 8. EFFECTIVE DATE.
(a) In General.--Except as provided in subsection (b),
this Act shall take effect 90 days after the date of the
enactment of this Act.
(b) BATFE Authority.--
(1) In general.--Sections 6 and 7 shall take effect on
the date of the enactment of this Act.
(2) Definition.--For purposes of section 7, the
definition of delivery sale in section 2343(e)(1) of title
18, United States Code, as amended by section 4(b)(3) of this
Act, shall take effect on the date of the enactment of this
Act.
Amend the title so as to read: ``A bill to prevent
tobacco smuggling, to ensure the collection of all tobacco
taxes, and for other purposes.''.
Mr. LEAHY. Mr. President, I am pleased that today the Senate is
taking up and passing the Prevent All Cigarette Trafficking, PACT, Act,
S. 1177. I commend Chairman Hatch and Senator Kohl for introducing this
legislation and thank them for working with me, among others, to craft
the compromise language that we will consider today to crack down on
the growing problem of cigarette smuggling, both interstate and
international, as well as to address the connection between cigarette
smuggling activities and terrorist funding. I am proud to join Senator
Hatch, Senator Kohl and others as a cosponsor of the underlying bill.
I also thank the National Association of Attorneys General and the
Campaign for Tobacco-Free Kids, for working with us and contributing to
the substitute language. I want to say a special thanks to Vermont
Attorney General Bill Sorrell, who also serves as the current Chair of
the NAAG Tobacco Committee, for his valuable input on the problems with
cigarette smuggling that States are facing and his support for this
compromise measure. I also want to thank the Vermont Grocers
Association, the Vermont Retail Association, the Vermont Association of
Chiefs of Police, and the National Conference of State Legislatures for
their support for this measure.
The movement of cigarettes from low-tax areas to high-tax areas in
order to avoid the payment of taxes when the cigarettes are resold has
become a public health problem in recent years. As State after State
chooses to raise its tobacco excise taxes as a means of reducing
tobacco use and as a source of revenue, many smokers have sought
cheaper means by which to purchase cigarettes. Smokers can often
purchase cigarettes and tobacco from remote sellers, Internet or mail
order at substantial discounts due to avoidance of State taxes. These
sellers, however, are evading their tax obligations because they
neither collect nor pay the proper State and local excise taxes for
cigarette and other tobacco product sales.
We have the ability to dramatically reduce smuggling without imposing
undue burdens on manufacturers or law abiding citizens. By reducing
smuggling, we will also increase government revenues by minimizing tax
avoidance. My friend General Sorrell has told me that this has become a
rapidly growing problem in Vermont as more and more tobacco product
manufacturers fail to collect and pay cigarette taxes. Criminals are
getting away with smuggling and not paying tobacco taxes because of
weak punishments, products that are often poorly labeled, the lack of
tax stamps and the inability of the current distribution system to
track sales from State to State. These lapses point to a need for
uniform rules governing group sales to individuals.
The PACT Act will give States the authority to collect millions of
dollars in lost State tax revenue resulting from online and other
remote sales of cigarette and smokeless tobacco. It also ensures that
every tobacco retailer, whether a brick-and-mortar or remote retailer
of tobacco products, play by the same rules by equalizing the tax
burdens.
Moreover, the PACT Act gives States the authority necessary to
enforce the Jenkins Act, a law passed in 1949, which requires cigarette
vendors to report interstate sales of cigarettes. This legislation
enhances States' abilities to collect all excise taxes and verify the
deposit of all required escrow payments for cigarette and smokeless
tobacco sales in interstate commerce, including internet sales. In
addition, it provides Federal and State law enforcement with additional
resources to enforce State tobacco excise tax laws.
Finally, at the request of the National Association of attorneys
general and many State attorneys general, we have added a new section
to provide the States with authority to enforce the Imported Cigarette
Compliance Act to crack down on international tobacco smuggling. This
additional authority should further reduce tax evasion and eliminate a
lucrative funding source for terrorist organizations.
We must not turn a blind eye to the problem of illegal tobacco
smuggling. Those who smuggle cigarettes are criminals. I look forward
to the Senate approving the bipartisan PACT Act today to close the
loopholes that allow cigarette smuggling to continue. I urge the
leaders of the House to follow our lead and pass this legislation.
Mr. KOHL. Mr. President, the proceeds of cigarette smuggling from low
tax States has developed into a popular means of generating revenue for
organized crime and even terrorist organizations. A recent
investigation by the Bureau of Alcohol, Tobacco, Firearms, and
Explosives, BATFE, disrupted a smuggling scheme between North Carolina
and Michigan, where the revenue generated was being funneled to
Hezbollah, a terrorist organization. It is evident that the
consequences of permitting this behavior to continue unchecked cannot
be underestimated.
To make matters worse, this problem is on the rise. According to the
BATFE, 10 cigarette smuggling cases were initiated in 1998. That has
grown to approximately 160 in 2002.
Moreover, the sale of tobacco products over the Internet facilitates
the avoidance of State cigarette taxes, denying States the ability to
collect tax dollars they are owed--money the States need now more than
ever.
The PACT Act take a commonsense approach to addressing these
problems. It increases penalties, provides more tools for enforcement,
and closes loopholes in current law. These moderate, but important,
changes will further enable Federal, State, local, and tribal officials
to crack down on tobacco smugglers and ensure that Internet tobacco
sellers pay applicable taxes.
Despite being passed unanimously by the Judiciary Committee, some
raised concerns over the legislation, particularly with respect to its
effect on Indian Tribal sovereignty. After intensive negotiations with
numerous interested parties, including the Campaign for Tobacco Free
Kids, the National Association of Attorneys General, the Department of
Justice and various tribal groups, we have been able to craft language
that will achieve the goals we set out to attain--to put an end to both
cigarette trafficking and tobacco tax avoidance--while leaving the
important principles of Indian Tribal sovereignty unaffected.
Tobacco companies and antitobacco groups, State law enforcement and
Federal law enforcement, and Republicans and Democrats all agree that
this is an issue begging to be addressed. Today, we begin to provide
the relevant law enforcement authorities
[[Page S16208]]
with the tools they need to put an end to these dangerous practices.
Mr. FRIST. Mr. President, I ask unanimous consent that the Hatch
amendment, which is at the desk, be agreed to; that the committee
substitute amendment, as amended, be agreed to; that the bill, as
amended, be read the third time and passed; that the title amendment be
agreed to; that the motions to reconsider be laid upon the table, en
bloc; and that any statements relating to the bill be printed in the
Record.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment (No. 2231) was agreed to.
(The amendment is printed in today's Record under ``Text of
Amendments.'')
The committee amendment in the nature of a substitute, as amended,
was agreed to.
The title amendment was agreed to.
The bill (S. 1177), as amended, was read the third time and passed,
as follows:
S. 1177
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Prevent All Cigarette
Trafficking Act'' or ``PACT Act''.
SEC. 2. COLLECTION OF STATE CIGARETTE AND SMOKELESS TOBACCO
TAXES.
(a) Definitions.--Section 1 of the Act of October 19, 1949
(15 U.S.C. 375; commonly referred to as the ``Jenkins Act''),
is amended--
(1) by striking paragraphs (1), (2), and (3) and inserting
the following new paragraphs:
``(1) The term `attorney general', with respect to a State,
means the attorney general or other chief law enforcement
officer of the State, or the designee of that officer.
``(2) The term `cigarette' means--
``(A) any roll of tobacco wrapped in paper or in any
substance not containing tobacco which is to be heated or
burned;
``(B) any roll of tobacco wrapped in any substance
containing tobacco that, because of its appearance, the type
of tobacco used in the filler, or its packaging or labeling,
is likely to be offered to, or purchased by, consumers as a
cigarette described in subparagraph (A);
``(C) any roll of tobacco wrapped in any substance that
because of its appearance, the type of tobacco used in the
filler, or its packaging or labeling, is likely to be offered
to, or purchased by, consumers as a cigarette; or
``(D) loose rolling tobacco that, because of its
appearance, type, packaging, or labeling, is likely to be
offered to, or purchased by, consumers as tobacco for making
cigarettes.
``(3) The term `smokeless tobacco' means any finely cut,
ground, powdered, or leaf tobacco that is intended to be
placed in the oral or nasal cavity or otherwise consumed
without being combusted.'';
(2) in paragraph (5)--
(A) by inserting ``, local, or Tribal'' after ``the
State'';
(B) by striking ``administer the cigarette tax law'' and
inserting ``collect the tobacco tax or administer the tax
law''; and
(C) by inserting ``, locality, or Tribe, respectively''
after ``a State''.
(3) by striking paragraph (6) and inserting the following
new paragraph (6):
``(6) The term `delivery sale' means any sale of cigarettes
or smokeless tobacco in interstate commerce to a consumer
if--
``(A) the consumer submits the order for such sale by means
of a telephone or other method of voice transmission, the
mails, or the Internet or other online service, or the seller
is otherwise not in the physical presence of the buyer when
the request for purchase or order is made; or
``(B) the cigarettes or smokeless tobacco are delivered by
use of a common carrier, private delivery service, or the
mails, or the seller is not in the physical presence of the
buyer when the buyer obtains personal possession of the
delivered cigarettes or smokeless tobacco.''; and
(4) by adding at the end the following new paragraphs:
``(8) The term `delivery seller' means a person who makes a
delivery sale.
``(9) The term `common carrier' means any person (other
than a local messenger service or the United States Postal
Service (as defined in section 102 of title 39, United States
Code)) that holds itself out to the general public as a
provider for hire of the transportation by water, land, or
air of merchandise, whether or not the person actually
operates the vessel, vehicle, or aircraft by which the
transportation is provided, between a port or place and a
port or place in the United States.
``(10) The term `interstate commerce' means commerce
between a State and any place outside the State, commerce
between a State and any Indian lands in the State, or
commerce between points in the same State but though any
place outside the State or through any Indian lands.
``(11) The term `person' means an individual, corporation,
company, association, firm, partnership, society, State
government, local government, Indian tribal government,
governmental organization of such government, or joint stock
company.
``(12) The term `State' means a State of the United States,
the District of Columbia, the Commonwealth of Puerto Rico, or
any territory or possession of the United States.
``(13) The term `Indian Country' 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.
``(14) The term `Indian Tribe', `Tribe', or `Tribal' refers
to an Indian tribe as defined in 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 (Public
Law 103-454; 25 U.S.C. 479a-1).
``(15) The term `tobacco tax administrator', in the case of
a State, local, or Tribal government, means the official of
the government duly authorized to collect the tobacco tax or
administer the tax law of the government.''.
(b) Reports to State Tobacco Tax Administrators.--Section 2
of that 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 striking ``or transfers'' and inserting ``,
transfers, or ships'';
(ii) by inserting ``, locality, or Indian Country of an
Indian Tribe'' after ``a State''; and
(iii) by striking ``to other than a distributor licensed by
or located in such State,'';
(B) in paragraph (1)--
(i) by striking ``administrator of the State'' and
inserting ``administrators of the State and place''; and
(ii) by striking ``; and'' and inserting the following: ``,
as well as telephone numbers for each place of business, a
principal electronic mail address, any website addresses, and
the name, address, and telephone number of an agent in the
State authorized to accept service on behalf of such
person;'';
(C) in paragraph (2), by striking ``and the quantity
thereof.'' and inserting ``the quantity thereof, and the
name, address, and phone number of the person delivering the
shipment to the recipient on behalf of the delivery seller,
with all invoice or memoranda information relating to
specific customers to be organized by city or town and by zip
code; and''; and
(D) by adding at the end the following new paragraph:
``(3) with respect to each memorandum or invoice filed with
a State under paragraph (2), also file copies of such
memorandum or invoice with the tobacco tax administrators and
chief law enforcement officers of the local governments and
Indian Tribes operating within the borders of the State that
apply their own local or Tribal taxes on cigarettes or
smokeless tobacco.''; and
(3) in subsection (b)--
(A) by striking ``(1)''; and
(B) by striking ``, and (2)'' and all that follows and
inserting a period.
(c) Requirements for Delivery Sales.--That Act is further
amended by inserting after section 2 the following new
section:
``Sec. 2A. (a) With respect to delivery sales into a
specific State and place, each delivery seller shall comply
with--
``(1) the shipping requirements set forth in subsection
(b);
``(2) the recordkeeping requirements set forth in
subsection (c);
``(3) all State, local, Tribal, and other laws generally
applicable to sales of cigarettes or smokeless tobacco as if
such delivery sales occurred entirely within the specific
State and place, including laws imposing--
``(A) excise taxes;
``(B) licensing and tax-stamping requirements; and
``(C) 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)(1) Each delivery seller shall include on the bill of
lading included with the shipping package containing
cigarettes or smokeless tobacco sold pursuant to such order 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) Any shipping package described in paragraph (1) that
is not labeled in accordance with that paragraph shall be
treated as non-deliverable matter by a common carrier or the
United States Postal Service if the common carrier or the
United States Postal Service, as the case may be, knows or
should know the contents of the package.
``(c)(1) Each delivery seller shall keep a record of all
delivery sales so made, including all of the information
described in section 2(a)(2), organized by the State, and
within such State, by the city or town and by zip code, into
which such delivery sales are so made.
``(2) Records of delivery sales shall be kept under
paragraph (1) in the year in which made and for the next four
years.
``(3) Records kept under paragraph (1) shall be made
available to tobacco tax administrators of the States, to
local governments and Indian Tribes that apply their own
local or Tribal taxes on cigarettes or smokeless tobacco, to
the attorneys general of the States,
[[Page S16209]]
to the chief law enforcement officers of such local
governments and Indian Tribes, and to the Attorney General of
the United States in order to ensure the compliance of
persons making delivery sales with the requirements of this
Act.
``(d)(1) Except as provided in paragraph (2), no cigarettes
or smokeless tobacco may be delivered pursuant to a delivery
sale in interstate commerce unless in advance of the
delivery--
``(A) any cigarette or smokeless tobacco excise tax that is
imposed by the State in which the cigarettes or smokeless
tobacco are to be delivered has been paid to the State;
``(B) any cigarette or smokeless tobacco excise tax that is
imposed by the local government of the place in which the
cigarette or smokeless tobacco are to be delivered has been
paid to the local government; and
``(C) any required stamps or other indicia that such excise
tax has been paid are properly affixed or applied to the
cigarettes or smokeless tobacco.
``(2) 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)(1) Each State, and each local government or Indian
Tribal government that levies a tax subject to subsection
(a)(3), may compile a list of delivery sellers who are in
compliance with this Act with respect to such State,
locality, or Indian Tribe. If a State, local government, or
Indian Tribe posts a list pursuant to this subsection that
specifically refers to this subsection, no common carrier or
other person may knowingly deliver cigarettes or smokeless
tobacco to consumers in such State or locality or in the
Indian Country of such Indian Tribe unless the delivery
seller is on the list at the time of delivery.
``(2)(A) Each State, and each local government or Indian
Tribal government that levies a tax subject to subsection
(a)(3), may compile a list of delivery sellers who are not in
compliance with this Act with respect to such State,
locality, or Indian Tribe.
``(B) A State, locality, or Indian Tribal government may
provide such a list to a common carrier, the United States
Postal Service, or other person. Such a list shall be
confidential, and a common carrier, the United States Postal
Service, or other person that receives such a list shall
maintain the confidentiality of such list.
``(C) If a State, local government, or Indian Tribal
government provides such a list pursuant to this subsection
that specifically refers to this subsection, no common
carrier, the United States Postal Service, or other person
may knowingly deliver any item to a consumer in such State or
locality or in the Indian Country of such Indian Tribe for a
delivery seller on such list unless the common carrier, the
United States Postal Service, or person in good faith
determines that the item does not include cigarettes or
smokeless tobacco.
``(f) 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.--Section 3 of that Act (15 U.S.C. 377) is
amended--
(1) by inserting ``(a)'' before ``Whoever'';
(2) in subsection (a), as so designated--
(A) by inserting ``(except for a State, local, or Tribal
government)'' after ``this Act''; and
(B) by striking ``shall be guilty of a misdemeanor and
shall be fined not more than $1,000, or imprisoned not more
than 6 months'' and inserting ``shall be guilty of a felony,
fined under subchapter C of chapter 227 of title 18, United
States Code, imprisoned not more than three years, or both'';
and
(3) by adding at the end the following new subsection:
``(b)(1) Whoever violates any provision of this Act shall
be subject to a civil penalty in an amount not to exceed the
greater of--
``(A) $5,000 in the case of the first violation, or $10,000
for any other violation; or
``(B) for any violation, 2 percent of the gross sales of
cigarettes or smokeless tobacco of such person during the
one-year period ending on the date of the violation.
``(2) A civil penalty under paragraph (1) for a violation
of this Act is in addition to any criminal penalty under
subsection (a) for the violation.''.
(e) Enforcement.--Section 4 of that Act (15 U.S.C. 378) is
amended--
(1) by inserting ``(a)'' before ``The United States
district courts'';
(2) in subsection (a), as so designated, by inserting
before the period the following: ``, and to provide other
appropriate injunctive or equitable relief, including money
damages, for such violations''; and
(3) by adding at the end the following new subsections:
``(b) The Attorney General of the United States shall
administer and enforce the provisions of this Act.
``(c)(1)(A) A State, through its attorney general (or a
designee thereof), or a local government or Indian Tribe that
levies a tax subject to section 2A(a)(3), through its chief
law enforcement officer (or a designee thereof), may bring an
action in the United States district courts to prevent and
restrain violations of this Act by any person (or by any
person controlling such person) or to obtain any other
appropriate relief from any person (or from any person
controlling such person) for violations of this Act,
including civil penalties, money damages, and injunctive or
other equitable relief.
``(B) 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) A State, through its attorney general, or a local
government or Indian Tribe that levies a tax subject to
section 2A(a)(3), through its chief law enforcement officer
(or a designee thereof), may provide evidence of a violation
of this Act by any person not subject to State, local, or
Tribal government enforcement actions for violations of this
Act to the Attorney General of the United States or a United
State Attorney, who shall take appropriate actions to enforce
the provisions of this Act.
``(3)(A) Notwithstanding any other provision of law and
subject to subparagraph (B), an amount equal to 50 percent of
any criminal and civil penalties collected by the United
States Government in enforcing the provisions of this Act
shall be available to the Department of Justice for purposes
of enforcing the provisions of this Act and other laws
relating to contraband tobacco products.
``(B) Of the amount available to the Department under
subparagraph (A), not less than 50 percent shall be made
available only to the agencies and offices within the
Department that were responsible for the enforcement actions
in which the penalties concerned were imposed.
``(4) The remedies available under this subsection are in
addition to any other remedies available under Federal,
State, local, Tribal, or other law.
``(5) 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.
``(6) 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.
``(7) 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) Any person who holds a permit under section 5712 of
the Internal Revenue Code of 1986 may bring an action in the
United States district courts to prevent and restrain
violations of this Act by any person (or by any person
controlling such person) other than a State, local, or Tribal
government.
``(e)(1) Any person who commences a civil action under
subsection (d) shall inform the Attorney General of the
United States of the action.
``(2) It is the sense of Congress that any attorney general
of a State, or chief law enforcement officer of a locality or
Tribe, who commences a civil action under this section should
inform the Attorney General of the United States of the
action.
``(f)(1) The Attorney General of the United States shall
make available to the public, by posting such information on
the Internet and by other means, information about all
enforcement actions undertaken by the Attorney General or
United States Attorneys, or reported to the Attorney General,
under this section, including information on the resolution
of such actions and, in particular, information on how the
Attorney General and the United States Attorney have
responded to referrals of evidence of violations pursuant to
subsection (b)(2).
``(2) The Attorney General shall submit to Congress each
year a report containing the information described in
paragraph (1).''.
SEC. 3. TREATMENT OF CIGARETTES AND SMOKELESS TOBACCO AS
NONMAILABLE MATTER.
Section 1716 of title 18, United States Code, is amended--
(1) by redesignating subsections (j) and (k) as subsections
(k) and (l), respectively; and
(2) by inserting after subsection (i) the following new
subsection (j):
``(j)(1) Except as provided in paragraph (2), the
transmission in the mails of any tobacco product, including
cigarettes (as that term is defined in section 1(2) of the
Act of October 19, 1949 (15 U.S.C. 375; commonly referred to
as the `Jenkins Act')) and smokeless tobacco (as that term is
defined in section 1(3) of that Act), is prohibited, and
tobacco products are nonmailable and shall not be deposited
in or carried through the mails.
``(2) Paragraph (1) shall apply only to States that are
contiguous with at least one other State of the United
States.''.
SEC. 4. PENAL PROVISIONS REGARDING TRAFFICKING IN CONTRABAND
CIGARETTES OR SMOKELESS TOBACCO.
(a) Threshold Quantity for Treatment as Contraband
Cigarettes.--(1) Section 2341(2) of title 18, United States
Code, is amended by striking ``60,000 cigarettes'' and
inserting ``10,000 cigarettes''.
(2) Section 2342(b) of that title is amended by striking
``60,000'' and inserting ``10,000''.
(3) Section 2343 of that title is amended--
[[Page S16210]]
(A) in subsection (a), by striking ``60,000'' and inserting
``10,000''; and
(B) in subsection (b), by striking ``60,000'' and inserting
``10,000''.
(b) Contraband Smokeless Tobacco.--(1) Section 2341 of that
title is amended--
(A) in paragraph (4), by striking ``and'' at the end;
(B) in paragraph (5), by striking the period at the end and
inserting a semicolon; and
(C) by adding at the end the following new paragraphs:
``(6) the term `smokeless tobacco' means any finely cut,
ground, powdered, or leaf tobacco that is intended to be
placed in the oral or nasal cavity or otherwise consumed
without being combusted;
``(7) the term `contraband smokeless tobacco' means a
quantity in excess of 500 single-unit consumer-sized cans or
packages of smokeless tobacco, or their equivalent, that are
in the possession of any person other than--
``(A) a person holding a permit issued pursuant to chapter
52 of the Internal Revenue Code of 1986 as manufacturer of
tobacco products or as an export warehouse proprietor, a
person operating a customs bonded warehouse pursuant to
section 311 or 555 of the Tariff Act of 1930 (19 U.S.C. 1311,
1555), or an agent of such person;
``(B) a common carrier transporting such smokeless tobacco
under a proper bill of lading or freight bill which states
the quantity, source, and designation of such smokeless
tobacco;
``(C) a person who--
``(i) is licensed or otherwise authorized by the State
where such smokeless tobacco is found to engage in the
business of selling or distributing tobacco products or, for
smokeless tobacco found in Indian Country, is licensed or
otherwise authorized by the Tribal government of such Indian
Country to account for and pay smokeless tobacco taxes
imposed by the Tribal government; and
``(ii) has complied with the accounting, tax, and payment
requirements relating to such license or authorization with
respect to such smokeless tobacco; or
``(D) an officer, employee, or agent of the United States
or a State or a Tribe, or any department, agency, or
instrumentality of the United States, a State (including any
political subdivision of a State), or a Tribe (including any
political subdivision of a Tribe), having possession of such
smokeless tobacco in connection with the performance of
official duties;''.
(2) Section 2342(a) of that title is amended by inserting
``or contraband smokeless tobacco'' after ``contraband
cigarettes''.
(3) Section 2343(a) of that title is amended by inserting
``, or any quantity of smokeless tobacco in excess of 500
single-unit consumer-sized cans or packages,'' before ``in a
single transaction''.
(4) Section 2344(c) of that title is amended by inserting
``or contraband smokeless tobacco'' after ``contraband
cigarettes''.
(5) Section 2345 of that title is amended by inserting ``or
smokeless tobacco'' after ``cigarettes'' each place it
appears.
(c) Additional Definitional Matters.--Section 2341 of such
title is further amended--
(1) in paragraph (2), as amended by subsection (a)(1) of
this section--
(A) in the matter preceding subparagraph (A), by striking
``State cigarette taxes in the State where such cigarettes
are found, if the State'' and inserting ``State, local, or
Tribal cigarette taxes in the State, locality, or Indian
Country where such cigarettes are found, if the State, local
or Tribal government'';
(B) in subparagraph (C)(i), by inserting before the
semicolon the following: ``, or, for cigarettes found in
Indian County, is licensed or otherwise authorized by the
Tribal government of such Indian Country to account for and
pay cigarette taxes imposed by the Tribal government''; and
(C) in subparagraph (D)--
(i) by inserting ``or a Tribe'' after ``a State'' the first
place it appears; and
(ii) by striking ``or a State (or any political subdivision
of a State)'' and inserting ``, a State (or any political
subdivision of a State), or a Tribe (including any political
subdivision of a Tribe)'';
(2) in paragraph (3), by inserting before the semicolon the
following: ``, or, for a carrier making a delivery entirely
within Indian Country, under equivalent operating authority
from the Indian Tribal government of such Indian Country'';
and
(3) by adding at the end the following new paragraphs:
``(8) the term `Indian Country' 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
``(9) the term `Indian Tribe', `Tribe', or `Tribal' refers
to an Indian tribe as defined in 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 (Public
Law 103-454; 25 U.S.C. 479a-1).''.
(d) Recordkeeping, Reporting, and Inspection.--Section 2343
of that title, as amended by this section, is further
amended--
(1) in subsection (a)--
(A) in the matter preceding paragraph (1), by striking
``only--'' and inserting ``such information as the Attorney
General considers appropriate for purposes of enforcement of
this chapter, including--''; and
(B) in the flush matter following paragraph (3), by
striking the second sentence;
(2) by redesignating subsection (b) as subsection (c);
(3) by inserting after subsection (a) the following new
subsection (b):
``(b) Any person who engages in a delivery sale, and who
ships, sells, or distributes any quantity in excess of 10,000
cigarettes, or any quantity in excess of 500 single-unit
consumer-sized cans or packages of smokeless tobacco, or
their equivalent, within a single month, shall submit to the
Attorney General, pursuant to rules or regulations prescribed
by the Attorney General, a report that sets forth the
following:
``(1) The person's beginning and ending inventory of
cigarettes and cans or packages of smokeless tobacco (in
total) for such month.
``(2) The total quantity of cigarettes and cans or packages
of smokeless tobacco that the person received within such
month from each other person (itemized by name and address).
``(3) The total quantity of cigarettes and cans or packages
of smokeless tobacco that the person distributed within such
month to each person (itemized by name and address) other
than a retail purchaser.''; and
(4) by adding at the end the following new subsections:
``(d) Any report required to be submitted under this
chapter to the Attorney General shall also be submitted to
the Secretary of the Treasury and to the attorneys general
and the tax administrators of the States from where the
shipments, deliveries, or distributions both originated and
concluded, and to the chief law enforcement officer and tax
administrator of the Tribe for shipments, deliveries or
distributions that originated or concluded on the Indian
Country of the Indian Tribe.
``(e) In this section, the term `delivery sale' means any
sale of cigarettes or smokeless tobacco in interstate
commerce to a consumer if--
``(A) the consumer submits the order for such sale by means
of a telephone or other method of voice transmission, the
mails, or the Internet or other online service, or by any
other means where the consumer is not in the same physical
location as the seller when the purchase or offer of sale is
made; or
``(B) the cigarettes or smokeless tobacco are delivered by
use of the mails, common carrier, private delivery service,
or any other means where the consumer is not in the same
physical location as the seller when the consumer obtains
physical possession of the cigarettes or smokeless tobacco.
``(f) In this section, the term `interstate commerce' means
commerce between a State and any place outside the State,
commerce between a State and any Indian lands in the State,
or commerce between points in the same State but through any
place outside the State or though any Indian lands.''.
(e) Disposal or Use of Forfeited Cigarettes and Smokeless
Tobacco.--Section 2344(c) of that title, as amended by this
section, is further amended by striking ``seizure and
forfeiture,'' and all that follows and inserting ``seizure
and forfeiture, and any cigarettes or smokeless tobacco so
seized and forfeited shall be either--
``(1) destroyed and not resold; or
``(2) used for undercover investigative operations for the
detection and prosecution of crimes, and then destroyed and
not resold.''.
(f) Effect on State, Local, and Tribal Law.--Section 2345
of that title is amended--
(1) in subsection (a), by striking ``a State to enact and
enforce'' and inserting ``a State, local government, or Tribe
to enact and enforce its own''; and
(2) in subsection (b), by striking ``of States, through
interstate compact or otherwise, to provide for the
administration of State'' and inserting ``of State, local, or
Tribal governments, through interstate compact or otherwise,
to provide for the administration of State, local, or
Tribal''.
(g) Enforcement.--Section 2346 of that title is amended--
(1) by inserting ``(a)'' before ``The Attorney General'';
and
(2) by adding at the end the following new subsection:
``(b)(1) A State, through its attorney general, a local
government or Indian Tribe, through its chief law enforcement
officer (or a designee thereof), or any person who holds a
permit under section 5712 of the Internal Revenue Code of
1986, may bring an action in the United States district
courts to prevent and restrain violations of this chapter by
any person (or by any person controlling such person), except
that any person who holds a permit under section 5712 of the
Internal Revenue Code of 1986 may not bring such an action
against a State, local, or Tribal government.
``(2) A State, through its attorney general, or a local
government or Indian Tribe, through its chief law enforcement
officer (or a designee thereof), may in a civil action under
paragraph (1) also obtain any other appropriate relief for
violations of this chapter from any person (or by any person
controlling such person), including civil penalties, money
damages, and injunctive or other equitable relief. Nothing in
this chapter 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 chapter, or otherwise to restrict, expand, or
modify any sovereign immunity of a State or local government
or Indian Tribe.
``(3) The remedies under paragraphs (1) and (2) are an
addition to any other remedies under Federal, State, local,
Tribal, or other law.
[[Page S16211]]
``(4) Nothing in this chapter 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.
``(5) Nothing in this chapter 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.
``(6) Nothing in this chapter 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.''.
(h) Conforming and Clerical Amendments.--(1) The section
heading for section 2343 of that title is amended to read as
follows:
``Sec. 2343. Recordkeeping, reporting, and inspection''.
(2) The section heading for section 2345 of such title is
amended to read as follows:
``Sec. 2345. Effect on State, Tribal, and local law''.
(3) The table of sections at the beginning of chapter 114
of that title is amended--
(A) by striking the item relating to section 2343 and
inserting the following new item:
``2343. Recordkeeping, reporting, and inspection.'';
and
(B) by striking the item relating to section 2345 and
insert the following new item:
``2345. Effect on State, Tribal, and local law.''.
(4)(A) The heading for chapter 114 of that title is amended
to read as follows:
``CHAPTER 114--TRAFFICKING IN CONTRABAND CIGARETTES AND SMOKELESS
TOBACCO''.
(B) The table of chapters at the beginning of part I of
that title is amended by striking the item relating to
section 114 and inserting the following new item:
``114. Trafficking in contraband cigarettes and smokeless to2341''.....
SEC. 5. COMPLIANCE WITH MODEL STATUTE OR QUALIFYING STATUTE.
(a) In General.--A Tobacco Product Manufacturer or importer
may not sell in, deliver to, or place for delivery sale, or
cause to be sold in, delivered to, or placed for delivery
sale in, a State that is a party to the Master Settlement
Agreement any cigarette manufactured by a Tobacco Product
Manufacturer that is not in full compliance with the terms of
the Model Statute or Qualifying Statute enacted by such State
requiring funds to be placed into a qualified escrow account
under specified conditions, or any regulations promulgated
pursuant to such terms.
(b) Jurisdiction to Prevent and Restrain Violations.--(1)
The United States district courts shall have jurisdiction to
prevent and restrain violations of subsection (a) in
accordance with this subsection.
(2) A State, through its attorney general, may bring an
action in the United States district courts to prevent and
restrain violations of subsection (a) by any person (or by
any person controlling such person).
(3) In any action under paragraph (2), a State, through its
attorney general, shall be entitled to reasonable attorney
fees from a person found to have willfully and knowingly
violated subsection (a).
(4) The remedy available under paragraph (2) is in addition
to any other remedies available under Federal, State, or
other law.
(5) Nothing in this subsection shall be construed to
prohibit an authorized State official from proceeding in
State court or taking other enforcement actions on the basis
of an alleged violation of State or other law.
(6) The Attorney General may administer and enforce
subsection (a).
(c) Definitions.--In this section:
(1) Master settlement agreement.-- The term ``Master
Settlement Agreement'' means the agreement executed November
23, 1998, by the Attorneys General of 46 States, the District
of Columbia, the Commonwealth of Puerto Rico, and four
Territories of the United States, on the one hand, and
certain tobacco manufacturers on the other hand.
(2) Tobacco product manufacturer.--The term ``Tobacco
Product Manufacturer'' has the meaning given that term in
section II(uu) of the Master Settlement Agreement.
(3) Importer.--The term ``importer'' means each of the
following:
(A) Any person in the United States to whom non-tax-paid
tobacco products manufactured in a foreign country, Puerto
Rico, the Virgin Islands, or a possession of the United
States are shipped or consigned.
(B) Any person who removes cigars or cigarettes for sale or
consumption in the United States from a customs bonded
manufacturing warehouse.
(C) Any person who smuggles or otherwise unlawfully brings
tobacco products into the United States.
(4) Model statute; qualifying statute.--The terms ``Model
Statute'' and ``Qualifying Statute'' means a statute as
defined in section IX(d)(2)(e) of the Master Settlement
Agreement.
(5) Delivery sale.--The term ``delivery sale'' means any
sale of cigarettes or smokeless tobacco in interstate
commerce to a consumer if--
(A) the consumer submits the order for such sale by means
of a telephone or other method of voice transmission, the
mails, or the Internet or other online service, or the seller
is otherwise not in the physical presence of the buyer when
the request for purchase or order is made; or
(B) the cigarettes or smokeless tobacco are delivered by
use of a common carrier, private delivery service, or the
mails, or the seller is not in the physical presence of the
buyer when the buyer obtains personal possession of the
delivered cigarettes or smokeless tobacco.
(6) Interstate commerce.--The term ``interstate commerce''
means commerce between a State and any place outside the
State, commerce between a State and any Indian lands in the
State, or commerce between points in the same State but
through any place outside the State or through any Indian
lands.
SEC. 6. UNDERCOVER CRIMINAL INVESTIGATIONS OF THE BUREAU OF
ALCOHOL, TOBACCO, FIREARMS, AND EXPLOSIVES.
(a) In General.--(1) Commencing as of the date of the
enactment of this Act and without fiscal year limitation, the
authorities in section 102(b) of the Department of Justice
and Related Agencies Appropriations Act, 1993 (title I of
Public Law 102-395; 106 Stat. 1838) shall be available to the
Bureau of Alcohol, Tobacco, Firearms, and Explosives for
undercover investigative operations of the Bureau which are
necessary for the detection and prosecution of crimes against
the United States.
(2) For purposes of the exercise of the authorities
referred to in paragraph (1) by the Bureau, a reference in
such section 102(b) to the Federal Bureau of Investigation
shall be deemed to be a reference to the Bureau of Alcohol,
Tobacco, Firearms, and Explosives, and a reference to the
Director of the Federal Bureau of Investigation shall be
deemed to be a reference to the Director of the Bureau of
Alcohol, Tobacco, Firearms, and Explosives.
(b) Limitations in Appropriations Acts.--The exercise of
the authorities referred to in subsection (a)(1) by the
Bureau of Alcohol, Tobacco, Firearms, and Explosives shall be
subject to the provisions of appropriations Acts.
SEC. 7. INSPECTION BY BUREAU OF ALCOHOL, TOBACCO, FIREARMS,
AND EXPLOSIVES OF RECORDS OF CERTAIN CIGARETTE
AND SMOKELESS TOBACCO SELLERS.
(a) In General.--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 (b) for the purposes of inspecting--
(1) any records or information required to be maintained by
such person under the provisions of law referred to in
subsection (d); or
(2) any cigarettes or smokeless tobacco kept or stored by
such person at such premises.
(b) Covered Persons.--A person described in this subsection
is any person who engages in a delivery sale, and who ships,
sells, distributes, or receives any quantity in excess of
10,000 cigarettes, or any quantity in excess of 500 single-
unit consumer-sized cans or packages of smokeless tobacco,
within a single month.
(c) Relief.--(1) The district courts of the United States
shall have the authority in a civil action under this
subsection to compel inspections authorized by subsection
(a).
(2) Whoever violates subsection (a) or an order issued
pursuant to paragraph (1) shall be subject to a civil penalty
in an amount not to exceed $10,000 for each violation.
(d) Covered Provisions of Law.--The provisions of law
referred to in this subsection are as follows:
(1) The Act of October 19, 1949 (15 U.S.C. 375; commonly
referred to as the ``Jenkins Act'').
(2) Chapter 114 of title 18, United States Code.
(3) This Act.
(e) Delivery Sale Defined.--In this section, the term
``delivery sale'' has the meaning given that term in
2343(e)(1) of title 18, United States Code, as amended by
section 4(b)(3) of this Act.
SEC. 8. COMPLIANCE WITH TARIFF ACT OF 1930.
(a) Inapplicability of Exemptions from Requirements for
Entry of Certain Cigarettes.--Subsection (b)(1) of section
802 of the Tariff Act of 1930 (19 U.S.C. 1681a) is amended by
adding at the end the following new sentence: ``The preceding
sentence shall not apply to any cigarettes sold in connection
with a delivery sale (as that term is defined in section 1 of
the Act of October 19, 1949 (15 U.S.C. 375; commonly referred
to as the `Jenkins Act')).''.
(b) State and Tribal Access to Customs Certifications.--
Section 802 of that Act is further amended by adding at the
end the following new subsection:
``(d) State and Tribal Access to Customs Certifications.--A
State, through its attorney general, and an Indian tribe (as
that term is defined in the Indian Self-Determination and
Education Assistance Act (25 U.S.C. 450b(e)) through its
chief law enforcement officer, shall be entitled to obtain
copies of any certification required pursuant to subsection
(c) directly--
``(1) upon request to the agency of the United States
responsible for collecting such certification; or
``(2) upon request to the importer, manufacturer, or
authorized official of such importer or manufacturer.''.
(c) Enforcement Provisions.--Section 803 of such Act (19
U.S.C. 1681b) is amended--
[[Page S16212]]
(1) in subsection (b)--
(A) in the first sentence--
(i) by inserting ``any of'' before ``the United States''
the first and second places it appears; and
(ii) by inserting before the period the following: ``, to
any State in which such tobacco product, cigarette papers, or
tube was imported, or to the Indian Tribe of any Indian
Country (as that term is defined in section 1151 of title 18,
United States Code) in which such tobacco product, cigarette
papers, or tube was imported''; and
(B) in the second sentence, by inserting ``, or to any
State or Indian Tribe,'' after ``the United States''; and
(2) by adding at the end the following new subsection:
``(c) Actions by States and Others.--
``(1) In general.--Any person who holds a permit under
section 5712 of the Internal Revenue Code of 1986 may bring
an action in the United States district courts to prevent and
restrain violations of this title by any person (or by any
person controlling such person), other than by a State,
local, or Tribal government.
``(2) Relief for state, local, and tribal governments.--A
State, through its attorney general, or a local government or
Tribe through its chief law enforcement officer (or a
designee thereof), may in a civil action under this title to
prevent and restrain violations of this title by any person
(or by any person controlling such person) or to obtain any
other appropriate relief for violations of this title by any
person (or from any person controlling such person),
including civil penalties, money damages, and injunctive or
other equitable relief.
``(3) Construction generally.--
``(A) In general.--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 this title or to
otherwise restrict, expand, of modify any sovereign immunity
of a State local government or Indian Tribe.
``(B) Construction with other relief.--The remedies
available under this subsection are in addition to any other
remedies available under Federal, State, local, Tribal, or
other law.
``(4) Construction with forfeiture provisions.--Nothing in
this subsection shall be construed to require a State or
Indian Tribe to first bring an action pursuant to paragraph
(1) when pursuing relief under subsection (b).
``(d) Construction With Other Authorities.--
``(1) State authorities.--Nothing in this title shall be
construed to expand, restrict, or otherwise modify the right
of an authorized State official from proceeding in State
court, or taking other enforcement actions, on the basis of
alleged violation of State or other law.
``(2) Tribal authorities.--Nothing in this title shall be
construed to expand, restrict, or otherwise modify the right
of an authorized Indian Tribal government official from
proceeding in Tribal court, or taking other enforcement
actions, on the basis of alleged violation of Tribal law.
(d) Inclusion of Smokeless Tobacco.--(1) Sections 802 and
803(a) of such Act are further amended by inserting ``or
smokeless tobacco products'' after ``cigarettes'' each place
it appears.
(2) Section 802 of such Act is further amended--
(A) in subsection (a)--
(i) in paragraph (1), by inserting ``or section 4 of the
Comprehensive Smokeless Tobacco Health Education Act of 1986
(15 U.S.C. 4403), respectively'' after ``section 7 of the
Federal Cigarette Labeling and Advertising Act (15 U.S.C.
1335a)'';
(ii) in paragraph (2), by inserting ``or section 3 of the
Comprehensive Smokeless Tobacco Health Education Act of 1986
(15 U.S.C. 4402), respectively,'' after ``section 4 of the
Federal Cigarette Labeling and Advertising Act (15 U.S.C.
1333)''; and
(iii) in paragraph (3), by inserting ``or section 3(c) of
the Comprehensive Smokeless Tobacco Health Education Act of
1986 (15 U.S.C. 4402(c)), respectively,'' after ``section
4(c) of the Federal Cigarette Labeling and Advertising Act
(15 U.S.C. 1333(c))'';
(B) in subsection (b)--
(i) in the paragraph caption of paragraph (1), by inserting
``or smokeless tobacco'' after ``cigarettes''; and
(ii) in the paragraph caption of paragraphs (2) and (3), by
inserting ``or smokeless tobacco'' after ``Cigarettes''; and
(C) in subsection (c)--
(i) in the subsection caption, by inserting ``or Smokeless
Tobacco'' after ``Cigarette'';
(ii) in paragraph (1), by inserting ``or section 4 of the
Comprehensive Smokeless Tobacco Health Education Act of 1986
(15 U.S.C. 4403), respectively'' after ``section 7 of the
Federal Cigarette Labeling and Advertising Act (15 U.S.C.
1335a)'';
(iii) in paragraph (2)(A), ``or section 3 of the
Comprehensive Smokeless Tobacco Health Education Act of 1986
(15 U.S.C. 4402), respectively,'' after ``section 4 of the
Federal Cigarette Labeling and Advertising Act (15 U.S.C.
1333)''; and
(iv) in paragraph (2)(B), by inserting ``or section 3(c) of
the Comprehensive Smokeless Tobacco Health Education Act of
1986 (15 U.S.C. 4402(c)), respectively'' after ``section 4(c)
of the Federal Cigarette Labeling and Advertising Act (15
U.S.C. 1333(c))''.
(3) Section 803(c) of such Act, as amended by subsection
(b)(1) of this section, is further amended by inserting ``,
or any smokeless tobacco product,'' after ``or tube'' the
first place it appears.
(4)(A) The heading of title VIII of such Act is amended by
inserting ``AND SMOKELESS TOBACCO'' after ``CIGARETTES''.
(B) The heading of section 802 of such Act is amended by
inserting ``AND SMOKELESS TOBACCO'' after ``CIGARETTES''.
SEC. 9. EXCLUSIONS REGARDING INDIAN TRIBES AND TRIBAL
MATTERS.
(a) In General.--Nothing in this Act or the amendments made
by this Act is intended nor shall be construed to affect,
amend, or modify--
(1) any agreements, compacts, or other intergovernmental
arrangements between any State or local government and any
government of an Indian tribe (as that term is defined in 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 (as
that term is defined section 1151 of title 18, United States
Code);
(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 existing Federal 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 or tribal members or in Indian Country;
(4) any existing Federal law, including Federal common law
and treaties, regarding State jurisdiction, or lack thereof,
over any Tribe, tribal members or tribal reservations; and
(5) any existing 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.--
Notwithstanding any other provision of this Act, the
provisions of this Act are not intended and shall not be
construed to authorize, deputize, or commission States or
local governments as instrumentalities of the United States.
(d) Enforcement Within Indian Country.--Nothing in this Act
or the amendments made by this Act is intended to prohibit,
limit, or restrict enforcement by the Attorney General of the
United States of the provisions herein within Indian Country.
(e) Ambiguity.--Any ambiguity between the language of this
section or its application, and any other provision of this
Act shall be resolved in favor of this section.
SEC. 10. EFFECTIVE DATE.
(a) In General.--Except as provided in subsection (b), this
Act shall take effect 90 days after the date of the enactment
of this Act.
(b) BATFE Authority.--
(1) In general.--Sections 6 and 7 shall take effect on the
date of the enactment of this Act.
(2) Definition.--For purposes of section 7, the definition
of delivery sale in section 2343(e)(1) of title 18, United
States Code, as amended by section 4(b)(3) of this Act, shall
take effect on the date of the enactment of this Act.
Passed the Senate December 9, 2003.
____________________