[Congressional Record Volume 152, Number 106 (Thursday, August 3, 2006)]
[Senate]
[Pages S8820-S8827]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. KOHL (for himself and Mr. Schumer):
  S. 3810. A bill to prevent tobacco smuggling, to ensure the 
collection of all tobacco taxes, and for other purposes; to the 
Committee on the Judiciary.
  Mr. KOHL. Mr. President, I rise today with Senator Schumer to 
introduce the Prevent All Cigarette Trafficking, PACT, Act of 2006. As 
the problem of cigarette trafficking continues to worsen, we must 
provide law enforcement officials with the tools they need to crack 
down on cigarette trafficking. The PACT Act closes loopholes in current 
tobacco trafficking laws, enhances penalties for violations, and 
provides law enforcement with new tools to combat the innovative new 
methods being used by cigarette traffickers to distribute their 
products. Each day we delay passage of this important legislation, 
terrorists and criminals raise more money, states lose significant 
amounts of tax revenue, and kids have easy access to tobacco products 
over the Internet.
  The cost to Americans is not merely financial. Tobacco smuggling also 
poses a significant threat to innocent people around the world. It has 
developed into a popular, and highly profitable, means of generating 
revenue for criminal and terrorist organizations. Hezbollah, for 
example, earned $1.5 million between 1996 and 2000 by engaging in 
tobacco trafficking in the United States. Al-Qaida and Hamas have also 
generated significant revenue from the sale of counterfeit cigarettes. 
That money is often raised right here in the United States, and it is 
then funneled back to these international terrorist groups. Cutting off 
financial support to terrorist groups is an integral part of the 
protecting this country against future attacks. We can no longer 
continue to let terrorist organizations exploit weaknesses in our 
tobacco laws to generate significant amounts of money. The cost of 
doing nothing is too great.
  This is not a minor problem. Cigarette smuggling is a multibillion 
dollar a year phenomenon, and it is getting worse. In 1998, the Bureau 
of Alcohol, Tobacco, Firearms and Explosives, BATFE, had six active 
tobacco smuggling investigations. In 2005, the that number swelled to 
452.
  The number of cases alone, however, does not sufficiently put this 
problem into perspective. The amount of money involved is truly 
astonishing. Cigarette trafficking, including the illegal sale of 
tobacco products over the Internet, costs States billions of dollars in 
lost tax revenue each year. It is estimated that Federal tax losses to 
Internet cigarette sales will reach $1.4 billion this year. As lost 
tobacco tax revenue lines the pockets of criminals and terrorist 
groups, states are being forced to raise college tuition and restrict 
access to other public programs. Tobacco smuggling may provide some 
with cheap access to cigarettes, but those cheap cigarettes are coming 
at a significant cost to the rest of us.
  According to the Government Accountability Office, GAO, each year, 
cigarette trafficking investigations are growing more and more complex, 
and take longer to resolve. More people are selling cigarettes 
illegally, and they are getting better at it. As these cases get 
tougher to solve, we owe it to law enforcement officials to do our part 
to lend a helping hand. The PACT Act enhances BATFE's authority to 
enter premises to investigate and enforce cigarette trafficking laws, 
and increasing penalties for violations. Unless these existing laws are 
strengthened, traffickers will continue to operate with near impunity.
  Just as important, though, we must provide law enforcement with new 
enforcement tools tools that enable them to combat the cigarette 
smugglers of the 21st century. The Internet represents one of those new 
obstacles to enforcement. Illegal tobacco vendors around the world 
evade detection by conducting transactions over the Internet, and then 
employing the services of common carriers and the U.S. Postal Service 
to deliver their illegal products around the country. Just a few years

[[Page S8821]]

ago, there were less than 100 vendors selling cigarettes online. Today, 
approximately 500 vendors sell illegal tobacco products over the 
Internet.
  Without new and innovative enforcement methods, law enforcement will 
not be able to effectively address the growing challenges facing them 
today. The PACT Act sets out to do just that by cutting off the 
delivery. A significant part of this problem involves the shipment of 
contraband cigarettes through the United States Postal Service, USPS. 
This bill would cut off access to the USPS by making tobacco products 
non-mailable. We would treat cigarettes just like we treat alcohol, 
making it illegal to ship them through the US mails and cutting off a 
large portion of the delivery system.
  It also employs a novel approach, one being used in some of our 
States today, to combat illegal sales of tobacco over the Internet. 
Specifically, it will allow the Attorney General, in collaboration with 
State and local law enforcement, to create a list of companies that are 
illegally selling tobacco products. That list will then be distributed 
to legitimate businesses whose services are indispensable to illegal 
internet vendors--common carriers. Once a common carrier knows which 
customers are breaking the law, this bill will ensure that they take 
appropriate action to prevent their companies from being exploited by 
terrorists and other criminals.
  It is important to point out that this bill has been carefully 
negotiated with the common carriers, including UPS, to ensure that it 
does not place any unreasonable burdens on these businesses. Many 
changes were made to the bill that was introduced in the last Congress 
to ensure that the legislation was written to conform to the 
technological capabilities of these companies. In light of these 
changes, there is no question that private carriers will be able to 
fully comply with this bill without interrupting their existing 
delivery practices and procedures.
  In addition, the legislation makes clear that we are not asking for 
perfection. For example, carriers will not be held liable for the 
actions of their employees if they have effective policies and 
procedures in place to ensure compliance. The key word here is 
``effective.'' These policies must be much more than mere words. We are 
not asking common carriers to ensure that every single pack of 
cigarettes is stopped before it moves through their delivery system, 
but we do expect a vigorous effort to ensure that they and their 
employees do the very best they can to stop doing business with people 
they know to be using their services to violate State and Federal laws. 
That is not too much to ask.
  In addition to these important law enforcement needs, it is important 
to mention another aspect of this legislation that is equally 
important. One of the primary ways children get access to cigarettes 
today is on the internet and through the mails. The PACT Act now 
contains a strong age verification section that will ensure that online 
vendors are not selling cigarettes to our children. This provision 
would prohibit the sale of tobacco products to children, and it would 
also require sellers to use a method of shipment that requires a 
signature and photo ID check upon delivery. Most States already have 
similar laws on the books, and this would simply make sure that we have 
a national standard to ensure that the Internet is not being used to 
evade similar ID checks we require at our grocery and convenience 
stores.
  The recognition that this is a significant problem, along with the 
commonsense approach taken in the PACT Act to combat it, has brought 
together a coalition of strange bedfellows. The legislation has not 
just garnered the support of the law enforcement community, including 
the National Association of Attorneys General, and public health 
advocates, such as the Campaign for Tobacco Free Kids. It also has the 
strong support of tobacco companies like Altria. These groups, who 
sometimes find themselves on opposite sides of these issues, all agree 
that this is an issue begging to be addressed. They all recognize the 
urgent need to provide our law enforcement officials with the tools 
they need to combat a very serious threat to our security and protect 
public health.
  I urge my colleagues to support this important legislation, and I ask 
unanimous consent that the text of the bill be printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 3810

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

     SECTION 1. SHORT TITLE; FINDINGS; PURPOSE.

       (a) Short Title.--This Act may be cited as the ``Prevent 
     All Cigarette Trafficking Act of 2006'' or ``PACT Act''.
       (b) Findings.--Congress finds that--
       (1) the sale of illegal cigarettes and smokeless tobacco 
     products significantly reduces Federal, State, and local 
     government revenues, with Internet sales alone accounting for 
     billions of dollars of lost Federal, State, and local tobacco 
     tax revenue each year;
       (2) Hezbollah, Hamas, al Qaeda, and other terrorist 
     organizations have profited from trafficking in illegal 
     cigarettes or counterfeit cigarette tax stamps;
       (3) terrorist involvement in illicit cigarette trafficking 
     will continue to grow because of the large profits such 
     organizations can earn;
       (4) the sale of illegal cigarettes and smokeless tobacco 
     over the Internet, and through mail, fax, or phone orders, 
     make it cheaper and easier for children to obtain tobacco 
     products;
       (5) the majority of Internet and other remote sales of 
     cigarettes and smokeless tobacco are being made without 
     adequate precautions to protect against sales to children, 
     without the payment of applicable taxes, and without 
     complying with the nominal registration and reporting 
     requirements in existing Federal law;
       (6) unfair competition from illegal sales of cigarettes and 
     smokeless tobacco is taking billions of dollars of sales away 
     from law-abiding retailers throughout the United States;
       (7) with rising State and local tobacco tax rates, the 
     incentives for the illegal sale of cigarettes and smokeless 
     tobacco have increased;
       (8) the number of active tobacco investigations being 
     conducted by the Bureau of Alcohol, Tobacco, Firearms and 
     Explosives rose to 452 in 2005;
       (9) the number of Internet vendors in the United States and 
     in foreign countries that sell cigarettes and smokeless 
     tobacco to buyers in the United States has increased from 
     only about 40 in 2000 to more than 500 in 2005; and
       (10) the intrastate sale of illegal cigarettes and 
     smokeless tobacco over the Internet has a substantial effect 
     on interstate commerce.
       (c) Purposes.--It is the purpose of this Act to--
       (1) require Internet and other remote sellers of cigarettes 
     and smokeless tobacco to comply with the same laws that apply 
     to law-abiding tobacco retailers;
       (2) create strong disincentives to illegal smuggling of 
     tobacco products;
       (3) provide government enforcement officials with more 
     effective enforcement tools to combat tobacco smuggling;
       (4) make it more difficult for cigarette and smokeless 
     tobacco traffickers to engage in and profit from their 
     illegal activities;
       (5) increase collections of Federal, State, and local 
     excise taxes on cigarettes and smokeless tobacco; and
       (6) prevent and reduce youth access to inexpensive 
     cigarettes and smokeless tobacco through illegal Internet or 
     contraband sales.

     SEC. 2. COLLECTION OF STATE CIGARETTE AND SMOKELESS TOBACCO 
                   TAXES.

       (a) Definitions.--The Act of October 19, 1949 (15 U.S.C. 
     375 et seq.; commonly referred to as the ``Jenkins Act'') 
     (referred to in this Act as the ``Jenkins Act''), is amended 
     by striking the first section and inserting the following:

     ``SECTION 1. DEFINITIONS.

       ``As used in this Act, the following definitions apply:
       ``(1) Attorney general.--The term `attorney general', with 
     respect to a State, means the attorney general or other chief 
     law enforcement officer of the State, or the designee of that 
     officer.
       ``(2) Cigarette.--
       ``(A) In general.--For purposes of this Act, the term 
     `cigarette'--
       ``(i) shall have the same meaning given that term in 
     section 2341 of title 18, United States Code; and
       ``(ii) shall include `roll-your-own tobacco' (as that term 
     is defined in section 5702 of title 26, United States Code).
       ``(B) Exception.--For purposes of this Act, the term 
     `cigarette' does not include a `cigar,' as that term is 
     defined in section 5702 of title 26, United States Code.
       ``(3) Common carrier.--The term `common carrier' means any 
     person (other than a local messenger service or the United 
     States Postal Service) that holds itself out to the general 
     public as a provider for hire of the transportation by water, 
     land, or air of merchandise, whether or not the person 
     actually operates the vessel, vehicle, or aircraft by which 
     the transportation is provided, between a port or place and a 
     port or place in the United States.
       ``(4) Consumer.--The term `consumer' means any person that 
     purchases cigarettes or smokeless tobacco, but does not 
     include any person lawfully operating as a manufacturer, 
     distributor, wholesaler, or retailer of cigarettes or 
     smokeless tobacco.

[[Page S8822]]

       ``(5) Delivery sale.--The term `delivery sale' means any 
     sale of cigarettes or smokeless tobacco to a consumer if--
       ``(A) the consumer submits the order for such sale by means 
     of a telephone or other method of voice transmission, the 
     mails, or the Internet or other online service, or the seller 
     is otherwise not in the physical presence of the buyer when 
     the request for purchase or order is made; or
       ``(B) the cigarettes or smokeless tobacco are delivered 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 possession of the cigarettes or 
     smokeless tobacco.
       ``(6) Delivery seller.--The term `delivery seller' means a 
     person who makes a delivery sale.
       ``(7) Indian country.--The term `Indian country' 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.
       ``(8) Indian tribe.--The term `Indian tribe', `tribe', or 
     `tribal' refers to an Indian tribes as defined in section 
     4(e) of the Indian Self-Determination and Education 
     Assistance Act (25 U.S.C. 450b(e)) or as listed pursuant to 
     section 104 of the Federally Recognized Indian Tribe List Act 
     of 1994 (25 U.S.C. 479a-1).
       ``(9) Interstate commerce.--The term `interstate commerce' 
     means commerce between a State and any place outside the 
     State, commerce between a State and any Indian country in the 
     State, or commerce between points in the same State but 
     through any place outside the State or through any Indian 
     country.
       ``(10) Person.--The term `person' means an individual, 
     corporation, company, association, firm, partnership, 
     society, State government, local government, Indian tribal 
     government, governmental organization of such government, or 
     joint stock company.
       ``(11) State.--The term `State' means each of the several 
     States of the United States, the District of Columbia, the 
     Commonwealth of Puerto Rico, or any territory or possession 
     of the United States.
       ``(12) Smokeless tobacco.--The term `smokeless tobacco' 
     means any finely cut, ground, powdered, or leaf tobacco, or 
     other product containing tobacco, that is intended to be 
     placed in the oral or nasal cavity or otherwise consumed 
     without being combusted.
       ``(13) Tobacco tax administrator.--The term `tobacco tax 
     administrator' means the State, local, or tribal official 
     duly authorized to collect the tobacco tax or administer the 
     tax law of a State, locality, or tribe, respectively.
       ``(14) Transfers for profit.--The term `transfers for 
     profit' means any transfer for profit or other disposition 
     for profit, including any transfer or disposition by an agent 
     to his principal in connection with which the agent receives 
     anything of value.
       ``(15) Use.--The term `use', in addition to its ordinary 
     meaning, means the consumption, storage, handling, or 
     disposal of cigarettes or smokeless tobacco.''.
       (b) Reports to State Tobacco Tax Administrators.--Section 2 
     of the Jenkins Act (15 U.S.C. 376) is amended--
       (1) by striking ``cigarettes'' each place it appears and 
     inserting ``cigarettes or smokeless tobacco'';
       (2) in subsection (a)--
       (A) in the matter preceding paragraph (1)--
       (i) by inserting ``Contents.--''after ``(a)''
       (ii) by striking ``or transfers'' and inserting ``, 
     transfers, or ships'';
       (iii) by inserting ``, locality, or Indian country of an 
     Indian tribe'' after ``a State'';
       (iv) by striking ``to other than a distributor licensed by 
     or located in such State,''; and
       (v) by striking ``or transfer and shipment'' and inserting 
     ``, transfer, or shipment'';
       (B) in paragraph (1)--
       (i) by striking ``with the tobacco tax administrator of the 
     State'' and inserting ``with the Attorney General of the 
     United States and with the tobacco tax administrators of the 
     State and place''; and
       (ii) by striking ``; and'' and inserting the following: ``, 
     as well as telephone numbers for each place of business, a 
     principal electronic mail address, any website addresses, and 
     the name, address, and telephone number of an agent in the 
     State authorized to accept service on behalf of such 
     person;'';
       (C) in paragraph (2), by striking ``and the quantity 
     thereof.'' and inserting ``the quantity thereof, and the 
     name, address, and phone number of the person delivering the 
     shipment to the recipient on behalf of the delivery seller, 
     with all invoice or memoranda information relating to 
     specific customers to be organized by city or town and by zip 
     code; and''; and
       (D) by adding at the end the following:
       ``(3) with respect to each memorandum or invoice filed with 
     a State under paragraph (2), also file copies of such 
     memorandum or invoice with the tobacco tax administrators and 
     chief law enforcement officers of the local governments and 
     Indian tribes operating within the borders of the State that 
     apply their own local or tribal taxes on cigarettes or 
     smokeless tobacco.'';
       (3) in subsection (b)--
       (A) by inserting ``Presumptive Evidence.--'' after ``(b)'';
       (B) by striking ``(1) that'' and inserting ``that''; and
       (C) by striking ``, and (2)'' and all that follows and 
     inserting a period; and
       (4) by adding at the end the following:
       ``(c) Use of Information.--A tobacco tax administrator or 
     chief law enforcement officer who receives a memorandum or 
     invoice under paragraph (2) or (3) of subsection (a) shall 
     use such memorandum or invoice solely for the purposes of the 
     enforcement of this Act and the collection of any taxes owed 
     on related sales of cigarettes and smokeless tobacco, and 
     shall keep confidential any personal information in such 
     memorandum or invoice not otherwise required for such 
     purposes.''.
       (c) Requirements for Delivery Sales.--The Jenkins Act is 
     amended by inserting after section 2 the following:

     ``SEC. 2A. DELIVERY SALES.

       ``(a) In General.--With respect to delivery sales into a 
     specific State and place, each delivery seller shall comply 
     with--
       ``(1) the shipping requirements set forth in subsection 
     (b);
       ``(2) the recordkeeping requirements set forth in 
     subsection (c);
       ``(3) all State, local, tribal, and other laws generally 
     applicable to sales of cigarettes or smokeless tobacco as if 
     such delivery sales occurred entirely within the specific 
     State and place, including laws imposing--
       ``(A) excise taxes;
       ``(B) licensing and tax-stamping requirements;
       ``(C) restrictions on sales to minors; and
       ``(D) other payment obligations or legal requirements 
     relating to the sale, distribution, or delivery of cigarettes 
     or smokeless tobacco; and
       ``(4) the tax collection requirements set forth in 
     subsection (d).
       ``(b) Shipping and Packaging.--
       ``(1) Required statement.--For any shipping package 
     containing cigarettes or smokeless tobacco, the delivery 
     seller shall include on the bill of lading, if any, and on 
     the outside of the shipping package, on the same surface as 
     the delivery address, a clear and conspicuous statement 
     providing as follows: `CIGARETTES/SMOKELESS TOBACCO: FEDERAL 
     LAW REQUIRES THE PAYMENT OF ALL APPLICABLE EXCISE TAXES, AND 
     COMPLIANCE WITH APPLICABLE LICENSING AND TAX-STAMPING 
     OBLIGATIONS'.
       ``(2) Failure to label.--Any shipping package described in 
     paragraph (1) that is not labeled in accordance with that 
     paragraph shall be treated as nondeliverable matter by a 
     common carrier, other delivery service, or the United States 
     Postal Service if the common carrier, other delivery service, 
     or the United States Postal Service, as the case may be, 
     knows or should know the package contains cigarettes or 
     smokeless tobacco. Nothing in this paragraph shall require 
     the common carrier, other delivery service, or the United 
     States Postal Service to open any package to determine its 
     contents.
       ``(3) Weight restriction.--A delivery seller shall not 
     sell, offer for sale, deliver, or cause to be delivered in 
     any single sale or single delivery any cigarettes or 
     smokeless tobacco weighing more than 10 pounds.
       ``(4) Age verification.--Notwithstanding any other 
     provision of law, a delivery seller who mails or ships 
     cigarettes or smokeless tobacco in connection with a delivery 
     sale--
       ``(A) shall not sell, deliver, or cause to be delivered any 
     tobacco products to a person under the minimum age required 
     for the legal sale or purchase of tobacco products, as 
     determined by either State or local law at the place of 
     delivery; and
       ``(B) shall use a method of mailing or shipping that 
     requires--
       ``(i) the purchaser placing the delivery sale order, or an 
     adult who is at least the minimum age required for the legal 
     sale or purchase of tobacco products, as determined by either 
     State or local law at the place of delivery, to sign to 
     accept delivery of the shipping container at the delivery 
     address; and
       ``(ii) the person who signs to accept delivery of the 
     shipping container to provide proof, in the form of a valid, 
     government-issued identification bearing a photograph of the 
     individual, that the person is at least the minimum age 
     required for the legal sale or purchase of tobacco products, 
     as determined by either State or local law at the place of 
     delivery.
       ``(c) Records.--
       ``(1) In general.--Each delivery seller shall keep a record 
     of any delivery sale, including all of the information 
     described in section 2(a)(2), organized by the State, and 
     within such State, by the city or town and by zip code, into 
     which such delivery sale is so made.
       ``(2) Record retention.--Records of a delivery sale shall 
     be kept as described in paragraph (1) in the year in which 
     the delivery sale is made and for the next 4 years.
       ``(3) Access for officials.--Records kept under paragraph 
     (1) shall be made available to tobacco tax administrators of 
     the States, to local governments and Indian tribes that apply 
     their own local or tribal taxes on cigarettes or smokeless 
     tobacco, to the attorneys general of the States, to the chief 
     law enforcement officers of such local governments and Indian 
     tribes, and to the Attorney General of the United States in 
     order to ensure the compliance of persons making delivery 
     sales with the requirements of this Act.
       ``(d) Delivery.--
       ``(1) In general.--Except as provided in paragraph (2), no 
     delivery seller may sell or deliver to any consumer, or 
     tender to any common carrier or other delivery service,

[[Page S8823]]

     any cigarettes or smokeless tobacco pursuant to a delivery 
     sale unless, in advance of the sale, delivery, or tender--
       ``(A) any cigarette or smokeless tobacco excise tax that is 
     imposed by the State in which the cigarettes or smokeless 
     tobacco are to be delivered has been paid to the State;
       ``(B) any cigarette or smokeless tobacco excise tax that is 
     imposed by the local government of the place in which the 
     cigarettes or smokeless tobacco are to be delivered has been 
     paid to the local government; and
       ``(C) any required stamps or other indicia that such excise 
     tax has been paid are properly affixed or applied to the 
     cigarettes or smokeless tobacco.
       ``(2) Exception.--Paragraph (1) does not apply to a 
     delivery sale of smokeless tobacco if the law of the State or 
     local government of the place where the smokeless tobacco is 
     to be delivered requires or otherwise provides that delivery 
     sellers collect the excise tax from the consumer and remit 
     the excise tax to the State or local government, and the 
     delivery seller complies with the requirement.
       ``(e) List of Unregistered or Noncompliant Delivery 
     Sellers.--
       ``(1) In general.--
       ``(A) Initial list.--Not later than 90 days after this 
     subsection goes into effect under section 10 of the Prevent 
     All Cigarette Trafficking Act of 2006, the Attorney General 
     of the United States shall compile a list of delivery sellers 
     of cigarettes or smokeless tobacco that have not registered 
     with the Attorney General, pursuant to section 2(a) or that 
     are otherwise not in compliance with this Act, and--
       ``(i) distribute the list to--

       ``(I) the attorney general and tax administrator of every 
     State;
       ``(II) common carriers and other persons that deliver small 
     packages to consumers in interstate commerce, including the 
     United States Postal Service; and
       ``(III) at the discretion of the Attorney General of the 
     United States, to any other persons; and

       ``(ii) publicize and make the list available to any other 
     person engaged in the business of interstate deliveries or 
     who delivers cigarettes or smokeless tobacco in or into any 
     State.
       ``(B) List contents.--To the extent known, the Attorney 
     General of the United States shall include, for each delivery 
     seller on the list described in subparagraph (A)--
       ``(i) all names the delivery seller uses in the transaction 
     of its business or on packages delivered to customers;
       ``(ii) all addresses from which the delivery seller does 
     business or ships cigarettes or smokeless tobacco;
       ``(iii) the website addresses, primary e-mail address, and 
     phone number of the delivery seller; and
       ``(iv) any other information that the Attorney General 
     determines would facilitate compliance with this subsection 
     by recipients of the list.
       ``(C) Updating.--The Attorney General of the United States 
     shall update and distribute the list at least once every 4 
     months, and may distribute the list and any updates by 
     regular mail, electronic mail, or any other reasonable means, 
     or by providing recipients with access to the list through a 
     nonpublic website that the Attorney General of the United 
     States regularly updates.
       ``(D) State, local, or tribal additions.--The Attorney 
     General of the United States shall include in the list under 
     subparagraph (A) any noncomplying delivery sellers identified 
     by any State, local, or tribal government under paragraph 
     (5), and shall distribute the list to the attorney general or 
     chief law enforcement official and the tax administrator of 
     any government submitting any such information and to any 
     common carriers or other persons who deliver small packages 
     to consumers identified by any government pursuant to 
     paragraph (5).
       ``(E) Confidentiality.--The list distributed pursuant to 
     subparagraph (A) shall be confidential, and any person 
     receiving the list shall maintain the confidentiality of the 
     list but may deliver the list, for enforcement purposes, to 
     any government official or to any common carrier or other 
     person that delivers tobacco products or small packages to 
     consumers. Nothing in this section shall prohibit a common 
     carrier, the United States Postal Service, or any other 
     person receiving the list from discussing with the listed 
     delivery sellers the delivery sellers' inclusion on the list 
     and the resulting effects on any services requested by such 
     listed delivery seller.
       ``(2) Prohibition on delivery.--
       ``(A) In general.--Commencing on the date that is 60 days 
     after the date of the initial distribution or availability of 
     the list under paragraph (1)(A), no person who receives the 
     list under paragraph (1), and no person who delivers 
     cigarettes or smokeless tobacco to consumers, shall knowingly 
     complete, cause to be completed, or complete its portion of a 
     delivery of any package for any person whose name and address 
     are on the list, unless--
       ``(i) the person making the delivery knows or believes in 
     good faith that the item does not include cigarettes or 
     smokeless tobacco;
       ``(ii) the delivery is made to a person lawfully engaged in 
     the business of manufacturing, distributing, or selling 
     cigarettes or smokeless tobacco; or
       ``(iii) the package being delivered weighs more than 100 
     pounds and the person making the delivery does not know or 
     have reasonable cause to believe that the package contains 
     cigarettes or smokeless tobacco.
       ``(B) Implementation of updates.--Commencing on the date 
     that is 30 days after the date of the distribution or 
     availability of any updates or corrections to the list under 
     paragraph (1), all recipients and all common carriers or 
     other persons that deliver cigarettes or smokeless tobacco to 
     consumers shall be subject to subparagraph (A) in regard to 
     such corrections or updates.
       ``(3) Shipments from persons on list.--
       ``(A) In general.--In the event that a common carrier or 
     other delivery service delays or interrupts the delivery of a 
     package it has in its possession because it determines or has 
     reason to believe that the person ordering the delivery is on 
     a list distributed under paragraph (1)--
       ``(i) the person ordering the delivery shall be obligated 
     to pay--

       ``(I) the common carrier or other delivery service as if 
     the delivery of the package had been timely completed; and
       ``(II) if the package is not deliverable, any reasonable 
     additional fee or charge levied by the common carrier or 
     other delivery service to cover its extra costs and 
     inconvenience and to serve as a disincentive against such 
     noncomplying delivery orders; and

       ``(ii) if the package is determined not to be deliverable, 
     the common carrier or other delivery service shall, in its 
     discretion, either provide the package and its contents to a 
     Federal, State, or local law enforcement agency or destroy 
     the package and its contents.
       ``(B) Records.--A common carrier or other delivery service 
     shall maintain, for a period of 5 years, any records kept in 
     the ordinary course of business relating to any deliveries 
     interrupted pursuant to this paragraph and provide that 
     information, upon request, to the Attorney General of the 
     United States or to the attorney general or chief law 
     enforcement official or tax administrator of any State, 
     local, or tribal government.
       ``(C) Confidentiality.--Any person receiving records under 
     subparagraph (B) shall use such records solely for the 
     purposes of the enforcement of this Act and the collection of 
     any taxes owed on related sales of cigarettes and smokeless 
     tobacco, and the person receiving records under subparagraph 
     (B) shall keep confidential any personal information in such 
     records not otherwise required for such purposes.
       ``(4) Preemption.--
       ``(A) In general.--No State, local, or tribal government, 
     nor any political authority of two or more State, local, or 
     tribal governments, may enact or enforce any law or 
     regulation relating to delivery sales that restricts 
     deliveries of cigarettes or smokeless tobacco to consumers by 
     common carriers or other delivery services on behalf of 
     delivery sellers by--
       ``(i) requiring that the common carrier or other delivery 
     service verify the age or identity of the consumer accepting 
     the delivery by requiring the person who signs to accept 
     delivery of the shipping container to provide proof, in the 
     form of a valid, government-issued identification bearing a 
     photograph of the individual, that such person is at least 
     the minimum age required for the legal sale or purchase of 
     tobacco products, as determined by either State or local law 
     at the place of delivery;
       ``(ii) requiring that the common carrier or other delivery 
     service obtain a signature from the consumer accepting the 
     delivery;
       ``(iii) requiring that the common carrier or other delivery 
     service verify that all applicable taxes have been paid;
       ``(iv) requiring that packages delivered by the common 
     carrier or other delivery service contain any particular 
     labels, notice, or markings; or
       ``(v) prohibiting common carriers or other delivery 
     services from making deliveries on the basis of whether the 
     delivery seller is or is not identified on any list of 
     delivery sellers maintained and distributed by any entity 
     other than the Federal Government.
     Nothing in this paragraph may be construed to preempt or 
     supersede State laws prohibiting the delivery sale, or the 
     shipment or delivery pursuant to a delivery sale, of 
     cigarettes or smokeless tobacco to individual consumers.
       ``(B) Relationship to other laws.--Nothing in this 
     paragraph shall be construed to prohibit, expand, restrict, 
     or otherwise amend or modify--
       ``(i) section 14501(c)(1) or 41713(b)(4) of title 49, 
     United States Code;
       ``(ii) any other restrictions in Federal law on the ability 
     of State, local, or tribal governments to regulate common 
     carriers; or
       ``(iii) any provision of State, local, or tribal law 
     regulating common carriers that falls within the provisions 
     of chapter 49 of the United States Code, sections 14501(c)(2) 
     or 41713(b)(4)(B).
       ``(5) State, local, and tribal additions.--
       ``(A) In general.--Any State, local, or tribal government 
     shall provide the Attorney General of the United States 
     with--
       ``(i) all known names, addresses, website addresses, and 
     other primary contact information of any delivery seller that 
     offers for sale or makes sales of cigarettes or smokeless 
     tobacco in or into the State, locality, or tribal land but 
     has failed to register with or make reports to the respective 
     tax administrator, as required by this Act, or that has been 
     found in a legal proceeding to have otherwise failed to 
     comply with this Act; and
       ``(ii) a list of common carriers and other persons who make 
     deliveries of cigarettes or smokeless tobacco in or into the 
     State, locality, or tribal lands.

[[Page S8824]]

       ``(B) Updates.--Any government providing a list to the 
     Attorney General of the United States under subparagraph (A) 
     shall also provide updates and corrections every 4 months 
     until such time as such government notifies the Attorney 
     General of the United States in writing that such government 
     no longer desires to submit such information to supplement 
     the list maintained and distributed by the Attorney General 
     of the United States under paragraph (1).
       ``(C) Removal after withdrawal.--Upon receiving written 
     notice that a government no longer desires to submit 
     information under subparagraph (A), the Attorney General of 
     the United States shall remove from the list under paragraph 
     (1) any persons that are on the list solely because of such 
     government's prior submissions of its list of noncomplying 
     delivery sellers of cigarettes or smokeless tobacco or its 
     subsequent updates and corrections.
       ``(6) Deadline to incorporate additions.--The Attorney 
     General of the United States shall--
       ``(A) include any delivery seller identified and submitted 
     by a State, local, or tribal government under paragraph (5) 
     in any list or update that is distributed or made available 
     under paragraph (1) on or after the date that is 30 days 
     after the date on which the information is received by the 
     Attorney General of the United States; and
       ``(B) distribute any such list or update to any common 
     carrier or other person who makes deliveries of cigarettes or 
     smokeless tobacco that has been identified and submitted by 
     another government, pursuant to paragraph (5).
       ``(7) Notice to delivery sellers.--Not later than 14 days 
     prior to including any delivery seller on the initial list 
     distributed or made available under paragraph (1), or on any 
     subsequent list or update for the first time, the Attorney 
     General of the United States shall make a reasonable attempt 
     to send notice to the delivery seller by letter, electronic 
     mail, or other means that the delivery seller is being placed 
     on such list or update, with that notice including the text 
     of this Act.
       ``(8) Limitations.--
       ``(A) In general.--Any common carrier or other person 
     making a delivery subject to this subsection shall not be 
     required or otherwise obligated to--
       ``(i) determine whether any list distributed or made 
     available under paragraph (1) is complete, accurate, or up-
     to-date;
       ``(ii) determine whether a person ordering a delivery is in 
     compliance with this Act; or
       ``(iii) open or inspect, pursuant to this Act, any package 
     being delivered to determine its contents.
       ``(B) Alternate names.--Any common carrier or other person 
     making a delivery subject to this subsection shall not be 
     required or otherwise obligated to make any inquiries or 
     otherwise determine whether a person ordering a delivery is a 
     delivery seller on the list under paragraph (1) who is using 
     a different name or address in order to evade the related 
     delivery restrictions, but shall not knowingly deliver any 
     packages to consumers for any such delivery seller who the 
     common carrier or other delivery service knows is a delivery 
     seller who is on the list under paragraph (1) but is using a 
     different name or address to evade the delivery restrictions 
     of paragraph (2).
       ``(C) Penalties.--Any common carrier or person in the 
     business of delivering packages on behalf of other persons 
     shall not be subject to any penalty under section 14101(a) of 
     title 49, United States Code, or any other provision of law 
     for--
       ``(i) not making any specific delivery, or any deliveries 
     at all, on behalf of any person on the list under paragraph 
     (1);
       ``(ii) not, as a matter of regular practice and procedure, 
     making any deliveries, or any deliveries in certain States, 
     of any cigarettes or smokeless tobacco for any person or for 
     any person not in the business of manufacturing, 
     distributing, or selling cigarettes or smokeless tobacco; or
       ``(iii) delaying or not making a delivery for any person 
     because of reasonable efforts to comply with this Act.
       ``(D) Other limits.--Section 2 and subsections (a), (b), 
     (c), and (d) of this section shall not be interpreted to 
     impose any responsibilities, requirements, or liability on 
     common carriers.
       ``(f) Presumption.--For purposes of this Act, a delivery 
     sale shall be deemed to have occurred in the State and place 
     where the buyer obtains personal possession of the cigarettes 
     or smokeless tobacco, and a delivery pursuant to a delivery 
     sale is deemed to have been initiated or ordered by the 
     delivery seller.''.
       (d) Penalties.--The Jenkins Act is amended by striking 
     section 3 and inserting the following:

     ``SEC. 3. PENALTIES.

       ``(a) Criminal Penalties.--
       ``(1) In general.--Except as provided in paragraph (2), 
     whoever violates any provision of this Act shall be guilty of 
     a felony and shall be imprisoned not more than 3 years, fined 
     under title 18, United States Code, or both.
       ``(2) Exceptions.--
       ``(A) Governments.--Paragraph (1) shall not apply to a 
     State, local, or tribal government.
       ``(B) Delivery violations.--A common carrier or independent 
     delivery service, or employee of a common carrier or 
     independent delivery service, shall be subject to criminal 
     penalties under paragraph (1) for a violation of section 
     2A(e) only if the violation is committed intentionally for 
     the purpose of--
       ``(i) obtaining the business of delivery sellers known to 
     the common carrier or independent delivery service not to be 
     in compliance with this Act; or
       ``(ii) assisting a delivery seller to violate or otherwise 
     evade compliance with section 2A.
       ``(b) Civil Penalties.--
       ``(1) In general.--Except as provided in paragraph (3), 
     whoever violates any provision of this Act shall be subject 
     to a civil penalty in an amount not to exceed--
       ``(A) in the case of a delivery seller, the greater of--
       ``(i) $5,000 in the case of the first violation, or $10,000 
     for any other violation; or
       ``(ii) for any violation, 2 percent of the gross sales of 
     cigarettes or smokeless tobacco of such person during the 1-
     year period ending on the date of the violation.
       ``(B) in the case of a common carrier or other delivery 
     service, $2,500 in the case of a first violation, or $5,000 
     for any violation within 1 year of a prior violation.
       ``(2) Relation to other penalties.--A civil penalty under 
     paragraph (1) for a violation of this Act shall be imposed in 
     addition to any criminal penalty under subsection (a) and any 
     other damages, equitable relief, or injunctive relief awarded 
     by the court, including, but not limited to, the payment of 
     any unpaid taxes to the appropriate Federal, State, local, or 
     tribal governments.
       ``(3) Exceptions.--
       ``(A) Delivery violations.--An employee of a common carrier 
     or independent delivery service shall be subject to civil 
     penalties under paragraph (1) for a violation of section 
     2A(e) only if the violation is committed intentionally for 
     the purpose of--
       ``(i) obtaining the business of delivery sellers known to 
     the common carrier or independent delivery service not to be 
     in compliance with this Act; or
       ``(ii) assisting a delivery seller to violate or otherwise 
     evade compliance with section 2A.
       ``(B) Other limitations.--No common carrier or independent 
     delivery service shall be subject to civil penalties under 
     paragraph (1) for a violation of section 2A(e) if--
       ``(i) the common carrier or independent delivery service 
     has implemented and enforces effective policies and practices 
     for complying with that section; or
       ``(ii) an employee of the common carrier or independent 
     delivery service who physically receives and processes 
     orders, picks up packages, processes packages, or makes 
     deliveries, takes actions that are outside the scope of 
     employment of the employee in the course of the violation, or 
     that violate the implemented and enforced policies of the 
     common carrier or independent delivery service described in 
     clause (i).''.
       (e) Enforcement.--The Jenkins Act is amended by striking 
     section 4 and inserting the following:

     ``SEC. 4. ENFORCEMENT.

       ``(a) In General.--The United States district courts shall 
     have jurisdiction to prevent and restrain violations of this 
     Act and to provide other appropriate injunctive or equitable 
     relief, including money damages, for such violations.
       ``(b) Authority of the Attorney General.--The Attorney 
     General of the United States shall administer and enforce the 
     provisions of this Act.
       ``(c) State, Local, and Tribal Enforcement.--
       ``(1) In general.--
       ``(A) Standing.--A State, through its attorney general (or 
     a designee thereof), or a local government or Indian tribe 
     that levies a tax subject to section 2A(a)(3), through its 
     chief law enforcement officer (or a designee thereof), may 
     bring an action in a United States district court to prevent 
     and restrain violations of this Act by any person (or by any 
     person controlling such person) or to obtain any other 
     appropriate relief from any person (or from any person 
     controlling such person) for violations of this Act, 
     including civil penalties, money damages, and injunctive or 
     other equitable relief.
       ``(B) Sovereign immunity.--Nothing in this Act shall be 
     deemed to abrogate or constitute a waiver of any sovereign 
     immunity of a State or local government or Indian tribe 
     against any unconsented lawsuit under this Act, or otherwise 
     to restrict, expand, or modify any sovereign immunity of a 
     State or local government or Indian tribe.
       ``(2) Provision of information.--A State, through its 
     attorney general, or a local government or Indian tribe that 
     levies a tax subject to section 2A(a)(3), through its chief 
     law enforcement officer (or a designee thereof), may provide 
     evidence of a violation of this Act by any person not subject 
     to State, local, or tribal government enforcement actions for 
     violations of this Act to the Attorney General of the United 
     States or a United States attorney, who shall take 
     appropriate actions to enforce the provisions of this Act.
       ``(3) Use of penalties collected.--
       ``(A) In general.--There is established a separate account 
     in the Treasury known as the `PACT Anti-Trafficking Fund'. 
     Notwithstanding any other provision of law and subject to 
     subparagraph (B), an amount equal to 50 percent of any 
     criminal and civil penalties collected by the United States 
     Government in enforcing the provisions of this Act shall

[[Page S8825]]

     be transferred into the PACT Anti-Trafficking Fund and shall 
     be available to the Attorney General of the United States for 
     purposes of enforcing the provisions of this Act and other 
     laws relating to contraband tobacco products.
       ``(B) Allocation of funds.--Of the amount available to the 
     Attorney General under subparagraph (A), not less than 50 
     percent shall be made available only to the agencies and 
     offices within the Department of Justice that were 
     responsible for the enforcement actions in which the 
     penalties concerned were imposed or for any underlying 
     investigations.
       ``(4) Nonexclusivity of remedy.--
       ``(A) In general.--The remedies available under this 
     section and section 3 are in addition to any other remedies 
     available under Federal, State, local, tribal, or other law.
       ``(B) State court proceedings.--Nothing in this Act shall 
     be construed to expand, restrict, or otherwise modify any 
     right of an authorized State official to proceed in State 
     court, or take other enforcement actions, on the basis of an 
     alleged violation of State or other law.
       ``(C) Tribal court proceedings.--Nothing in this Act shall 
     be construed to expand, restrict, or otherwise modify any 
     right of an authorized Indian tribal government official to 
     proceed in tribal court, or take other enforcement actions, 
     on the basis of an alleged violation of tribal law.
       ``(D) Local government enforcement.--Nothing in this Act 
     shall be construed to expand, restrict, or otherwise modify 
     any right of an authorized local government official to 
     proceed in State court, or take other enforcement actions, on 
     the basis of an alleged violation of local or other law.
       ``(d) Persons Dealing in Tobacco Products.--Any person who 
     holds a permit under section 5712 of the Internal Revenue 
     Code of 1986 (regarding permitting of manufacturers and 
     importers of tobacco products and export warehouse 
     proprietors) may bring an action in a United States district 
     court to prevent and restrain violations of this Act by any 
     person (or by any person controlling such person) other than 
     a State, local, or tribal government.
       ``(e) Notice.--
       ``(1) Persons dealing in tobacco products.--Any person who 
     commences a civil action under subsection (d) shall inform 
     the Attorney General of the United States of the action.
       ``(2) State, local, and tribal actions.--It is the sense of 
     Congress that the attorney general of any State, or chief law 
     enforcement officer of any locality or tribe, that commences 
     a civil action under this section should inform the Attorney 
     General of the United States of the action.
       ``(f) Public Notice.--
       ``(1) In general.--The Attorney General of the United 
     States shall make available to the public, by posting such 
     information on the Internet and by other appropriate means, 
     information regarding all enforcement actions undertaken by 
     the Attorney General or United States attorneys, or reported 
     to the Attorney General, under this section, including 
     information regarding the resolution of such actions and how 
     the Attorney General and the United States attorney have 
     responded to referrals of evidence of violations pursuant to 
     paragraph (2).
       ``(2) Reports to congress.--The Attorney General shall 
     submit to Congress each year a report containing the 
     information described in paragraph (1).''.
       (f) Conforming and Clerical Amendments.--The section 
     heading for chapter 10A of title 15, United States Code, is 
     amended to read as follows: ``REMOTE SALES OF CIGARETTES AND 
     SMOKELESS TOBACCO''.

     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:
       ``(j) Tobacco Products.--
       ``(1) Prohibition.--
       ``(A) In general.--Except as provided in subparagraphs (B) 
     and (C), all 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(12) of that Act), are 
     nonmailable and shall not be deposited in or carried through 
     the mails. The United States Postal Service shall not accept 
     for delivery or transmit through the mails any package that 
     it knows or has reasonable cause to believe contains any 
     cigarettes or smokeless tobacco made nonmailable by this 
     subsection.
       ``(B) Reasonable cause to believe.--For purposes of this 
     section, notification to the United States Postal Service by 
     the Attorney General, a United States attorney, or a State 
     Attorney General that an individual or entity is primarily 
     engaged in the business of transmitting cigarettes or 
     smokeless tobacco made nonmailable by this section shall 
     constitute reasonable cause to believe that any packages 
     presented to the United States Postal Service by such 
     individual or entity contain nonmailable cigarettes or 
     smokeless tobacco.
       ``(C) Cigars.--Subparagraph (A) shall not apply to cigars 
     (as that term is defined in section 5702(a) of the Internal 
     Revenue Code of 1986).
       ``(D) Geographic exception.--Subparagraph (A) shall not 
     apply to mailings within or into any State that is not 
     contiguous with at least 1 other State of the United States. 
     For purposes of this paragraph, `State' means any of the 50 
     States or the District of Columbia.
       ``(2) Packaging exceptions inapplicable.--Subsection (b) 
     shall not apply to any tobacco product made nonmailable by 
     this subsection.
       ``(3) Seizure and forfeiture.--Any cigarettes or smokeless 
     tobacco made nonmailable by this subsection that are 
     deposited in the mails shall be subject to seizure and 
     forfeiture, and any tobacco products so seized and forfeited 
     shall either be destroyed or retained by Government officials 
     for the detection or prosecution of crimes or related 
     investigations and then destroyed.
       ``(4) Additional penalties.--In addition to any other fines 
     and penalties imposed by this chapter for violations of this 
     section, any person violating this subsection shall be 
     subject to an additional penalty in the amount of 10 times 
     the retail value of the nonmailable cigarettes or smokeless 
     tobacco, including all Federal, State, and local taxes.
       ``(5) Use of penalties.--There is established a separate 
     account in the Treasury known as the `PACT Postal Service 
     Fund'. Notwithstanding any other provision of law, an amount 
     equal to 50 percent of any criminal and civil fines or 
     monetary penalties collected by the United States Government 
     in enforcing the provisions of this subsection shall be 
     transferred into the PACT Postal Service Fund and shall be 
     available to the Postmaster General for the purpose of 
     enforcing the provisions of this subsection.''.

     SEC. 4. COMPLIANCE WITH MODEL STATUTE OR QUALIFYING STATUTE.

       (a) In General.--A Tobacco Product Manufacturer or importer 
     may not sell in, deliver to, or place for delivery sale, or 
     cause to be sold in, delivered to, or placed for delivery 
     sale in a State that is a party to the Master Settlement 
     Agreement, any cigarette manufactured by a Tobacco Product 
     Manufacturer that is not in full compliance with the terms of 
     the Model Statute or Qualifying Statute enacted by such State 
     requiring funds to be placed into a qualified escrow account 
     under specified conditions, or any regulations promulgated 
     pursuant to such statute.
       (b) Jurisdiction To Prevent and Restrain Violations.--
       (1) In general.--The United States district courts shall 
     have jurisdiction to prevent and restrain violations of 
     subsection (a) in accordance with this subsection.
       (2) Initiation of action.--A State, through its attorney 
     general, may bring an action in the United States district 
     courts to prevent and restrain violations of subsection (a) 
     by any person (or by any person controlling such person).
       (3) Attorney fees.--In any action under paragraph (2), a 
     State, through its attorney general, shall be entitled to 
     reasonable attorney fees from a person found to have 
     willfully and knowingly violated subsection (a).
       (4) Nonexclusivity of remedies.--The remedy available under 
     paragraph (2) is in addition to any other remedies available 
     under Federal, State, or other law. No provision of this Act 
     or any other Federal law shall be held or construed to 
     prohibit or preempt the Master Settlement Agreement, the 
     Model Statute (as defined in the Master Settlement 
     Agreement), any legislation amending or complementary to the 
     Model Statute in effect as of June 1, 2006, or any 
     legislation substantially similar to such existing, amending, 
     or complementary legislation hereinafter enacted.
       (5) Other enforcement actions.--Nothing in this subsection 
     shall be construed to prohibit an authorized State official 
     from proceeding in State court or taking other enforcement 
     actions on the basis of an alleged violation of State or 
     other law.
       (6) Authority of the attorney general.--The Attorney 
     General of the United States may administer and enforce 
     subsection (a).
       (c) Definitions.--In this section the following definitions 
     apply:
       (1) Delivery sale.--The term ``delivery sale'' means any 
     sale of cigarettes or smokeless tobacco to a consumer if--
       (A) the consumer submits the order for such sale by means 
     of a telephone or other method of voice transmission, the 
     mails, or the Internet or other online service, or the seller 
     is otherwise not in the physical presence of the buyer when 
     the request for purchase or order is made; or
       (B) the cigarettes or smokeless tobacco are delivered 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 possession of the cigarettes or 
     smokeless tobacco.
       (2) Importer.--The term ``importer'' means each of the 
     following:
       (A) Shipping or consigning.--Any person in the United 
     States to whom 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) Manufacturing warehouses.--Any person who removes 
     cigars or cigarettes for sale or consumption in the United 
     States from a customs-bonded manufacturing warehouse.
       (C) Unlawful importing.--Any person who smuggles or 
     otherwise unlawfully brings tobacco products into the United 
     States.
       (3) Master settlement agreement.--The term ``Master 
     Settlement Agreement'' means the agreement executed November 
     23, 1998, between the attorneys general of 46

[[Page S8826]]

     States, the District of Columbia, the Commonwealth of Puerto 
     Rico, and 4 territories of the United States and certain 
     tobacco manufacturers.
       (4) Model statute; qualifying statute.--The terms ``Model 
     Statute'' and ``Qualifying Statute'' means a statute as 
     defined in section IX(d)(2)(e) of the Master Settlement 
     Agreement.
       (5) Tobacco product manufacturer.--The term ``Tobacco 
     Product Manufacturer'' has the meaning given that term in 
     section II(uu) of the Master Settlement Agreement.

     SEC. 5. UNDERCOVER CRIMINAL INVESTIGATIONS OF THE BUREAU OF 
                   ALCOHOL, TOBACCO, FIREARMS AND EXPLOSIVES.

       (a) Appropriations Available.--
       (1) In general.--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) Conforming rule.--For purposes of the exercise by the 
     Bureau of Alcohol, Tobacco, Firearms and Explosives of the 
     authorities referenced in paragraph (1), a reference 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) 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. 6. 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.--Subsection (a) applies to 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) In general.--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) Violations.--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--
       (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; and
       (3) this Act.
       (e) Delivery Sale Defined.--In this section, the term 
     ``delivery sale'' has the meaning given that term in 2343(e) 
     of title 18, United States Code, as amended by section 
     4(d)(4).

     SEC. 7. COMPLIANCE WITH TARIFF ACT OF 1930.

       (a) Inapplicability of Exemptions From Requirements for 
     Entry of Certain Cigarettes.--Section 802(b)(1) of the Tariff 
     Act of 1930 (19 U.S.C. 1681a(b)(1)) is amended by adding at 
     the end the following: ``This paragraph shall not apply to 
     any cigarettes sold in connection with a delivery sale (as 
     that term is defined in section 1(6) of the Act of October 
     19, 1949 (commonly referred to as the `Jenkins Act')).''.
       (b) State and Tribal Access to Customs Certifications.--
     Section 802 of the Tariff Act of 1930 (19 U.S.C. 1681a) is 
     amended by adding at the end the following:
       ``(d) State and Tribal Access to Customs Certifications.--A 
     State, through its attorney general, and an Indian tribe (as 
     that term is defined in section 4(e) of the Indian Self-
     Determination and Education Assistance Act (25 U.S.C. 
     450b(e)), 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 the Tariff Act 
     of 1930 (19 U.S.C. 1681b) is amended--
       (1) in subsection (b)--
       (A) in the first sentence--
       (i) by inserting ``any State 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:
       ``(c) Actions by States and Others.--
       ``(1) Persons dealing in tobacco products.--Any person who 
     holds a permit under section 5712 of the Internal Revenue 
     Code of 1986 (regarding permitting of manufacturers and 
     importers of tobacco products and export warehouse 
     proprietors) may bring an action in 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 a State, local, or tribal government.
       ``(2) 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 bring 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, or 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 under to paragraph (1) 
     when pursuing relief under subsection (b).
       ``(d) Construction With Other Authorities.--Nothing in this 
     title shall be construed to expand, restrict, or otherwise 
     modify the right of--
       ``(1) 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; or
       ``(2) 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) In general.--Sections 802 and 803(a) of the Tariff Act 
     of 1930 (19 U.S.C. 1202 et seq.) are amended by inserting 
     ``or smokeless tobacco products'' after ``cigarettes'' each 
     place it appears.
       (2) Conforming amendments.--
       (A) Requirements for entry.--Section 802 of the Tariff Act 
     of 1930 (19 U.S.C. 1681a) is amended--
       (i) in the heading, by inserting ``AND SMOKELESS TOBACCO'' 
     after ``CIGARETTES'';
       (ii) 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(d) of 
     the Comprehensive Smokeless Tobacco Health Education Act of 
     1986 (15 U.S.C. 4402(d)), respectively,'' after ``section 
     4(c) of the Federal Cigarette Labeling and Advertising Act 
     (15 U.S.C. 1333(c))'';

       (iii) in subsection (b)--

       (I) in the heading of paragraph (1), by inserting ``or 
     smokeless tobacco'' after ``cigarettes''; and
       (II) in the heading of paragraphs (2) and (3), by inserting 
     ``or smokeless tobacco'' after ``Cigarettes''; and

       (iv) in subsection (c)--

       (I) in the heading, 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(d) of 
     the Comprehensive Smokeless Tobacco Health Education Act of 
     1986 (15 U.S.C. 4402(d)), respectively'' after ``section 4(c) 
     of the Federal Cigarette Labeling and Advertising Act (15 
     U.S.C. 1333(c))''.

[[Page S8827]]

       (B) Enforcement.--Section 803(b) of the Tariff Act of 1930 
     (19 U.S.C. 1681b(b)) is amended by inserting ``, or any 
     smokeless tobacco product,'' after ``or tube'' the first 
     place it appears.
       (C) Title heading.--The heading of title VIII of the Tariff 
     Act of 1930 (19 U.S.C. 1681 et seq.) is amended by inserting 
     ``AND SMOKELESS TOBACCO'' after ``CIGARETTES''.

     SEC. 8. EXCLUSIONS REGARDING INDIAN TRIBES AND TRIBAL 
                   MATTERS.

       (a) In General.--Nothing in this Act or the amendments made 
     by this Act is intended nor shall be construed to affect, 
     amend, or modify--
       (1) any agreements, compacts, or other intergovernmental 
     arrangements between any State or local government and any 
     government of an Indian tribe (as that term is defined in 
     section 4(e) of the Indian Self-Determination and Education 
     Assistance Act (25 U.S.C. 450b(e)) relating to the collection 
     of taxes on cigarettes or smokeless tobacco sold in Indian 
     country (as that term is defined in 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.--Nothing in 
     this Act or the amendments made by this Act is intended, and 
     shall not be construed to, authorize, deputize, or commission 
     States or local governments as instrumentalities of the 
     United States.
       (d) Enforcement Within Indian Country.--Nothing in this Act 
     or the amendments made by this Act is intended to prohibit, 
     limit, or restrict enforcement by the Attorney General of the 
     United States of the provisions herein within Indian country.
       (e) Ambiguity.--Any ambiguity between the language of this 
     section or its application and any other provision of this 
     Act shall be resolved in favor of this section.

     SEC. 9. EFFECTIVE DATE.

       (a) In General.--Except as provided in subsection (b), this 
     Act shall take effect on the date that is 90 days after the 
     date of enactment of this Act.
       (b) BATFE Authority.--
       (1) In general.--Sections 6 and 7 shall take effect on the 
     date of 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(d)(4) of this Act, shall 
     take effect on the date of enactment of this Act.

     SEC. 10. SEPARABILITY.

       If any provision of this Act or the application thereof to 
     any person or circumstance is held invalid, the remainder of 
     the Act and the application of it to any other person or 
     circumstance shall not be affected thereby.
                                 ______