[Congressional Record Volume 159, Number 31 (Tuesday, March 5, 2013)]
[House]
[Pages H965-H966]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STOP TOBACCO SMUGGLING IN THE TERRITORIES ACT OF 2013
Mr. GOODLATTE. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 338) to amend title 18, United States Code, to include
certain territories and possessions of the United States in the
definition of State for the purposes of chapter 114, relating to
trafficking in contraband cigarettes and smokeless tobacco.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 338
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 ``Stop Tobacco Smuggling in
the Territories Act of 2013''.
SEC. 2. TERRITORIES AND POSSESSIONS OF THE UNITED STATES
INCLUDED IN THE DEFINITION OF STATE FOR THE
PURPOSES OF THE PROHIBITION AGAINST TRAFFICKING
IN CONTRABAND CIGARETTES AND SMOKELESS TOBACCO.
Paragraph (4) of section 2341 of title 18, United States
Code, is amended by striking ``or the Virgin Islands'' and
inserting ``the Virgin Islands, American Samoa, the
Commonwealth of the Northern Mariana Islands, or Guam''.
The SPEAKER pro tempore (Mr. Messer). Pursuant to the rule, the
gentleman from Virginia (Mr. Goodlatte) and the gentleman from Virginia
(Mr. Scott) each will control 20 minutes.
The Chair recognizes the gentleman from Virginia (Mr. Goodlatte).
General Leave
Mr. GOODLATTE. Mr. Speaker, I ask unanimous consent that all Members
may have 5 legislative days within which to revise and extend their
remarks and include extraneous materials on H.R. 338, currently under
consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Virginia?
There was no objection.
{time} 1330
Mr. GOODLATTE. Mr. Speaker, I yield myself such time as I may
consume.
Cigarette trafficking is a very lucrative crime both here in the
United States and abroad. It is estimated that illicit cigarettes
account for over 10 percent of the more than 5.7 trillion cigarettes
sold globally each year. Here in the United States alone, approximately
4 billion of the cigarettes sold each year are illicit.
Cigarette smuggling is generally carried out by large criminal
organizations that take advantage of the significant disparity between
the taxes levied on cigarettes across the States. These differences
create a highly lucrative market for individuals to evade State and
local sales taxes by purchasing cigarettes in one locality and
transporting them to another for resale below market value. It is
estimated that criminals can make a profit of as much as $1 million on
just a single truckload of illicit cigarettes.
Cigarette smuggling is not just profitable for criminal networks;
this crime also harms State and Federal revenues. According to the
Justice Department, this illicit activity costs the States and the
Federal Government an estimated $5 billion each year. This is money
that could and should be put to better use.
In 2009, Congress took steps to curb contraband cigarettes with the
Prevent All Cigarette Trafficking, or PACT, Act. The PACT Act prohibits
the sale of cigarettes and other tobacco products over the Internet and
made changes to the criminal anticigarette smuggling statutes.
H.R. 338, the Stop Tobacco Smuggling in the Territories Act of 2013,
provides a technical correction to ensure that the criminal
prohibitions against cigarette smuggling apply to the U.S. territories
of American Samoa, Guam, and the Northern Mariana Islands just as they
do in the rest of the country. Without this fix, cigarettes sold in
these territories without evidence that taxes were paid do not fall
within the definition of ``contraband cigarettes.'' This is a modest
but important change that will help to discourage crime and increase
tax revenues in these United States territories.
I want to thank Mr. Faleomavaega for his work on this issue, as well
as the ranking member on the full committee and the subcommittee for
their support of this effort, and the chairman of the Crime
Subcommittee, Mr. Sensenbrenner, as well, and I urge my colleagues to
join me in support of this bill.
I reserve the balance of my time.
Mr. SCOTT of Virginia. I yield myself such time as I may consume.
Mr. Speaker, I rise in support of H.R. 338, the Stop Tobacco
Smuggling in the Territories Act of 2013. This bill is simple and
straightforward. It amends the Contraband Cigarette Trafficking Act by
including American Samoa, the Commonwealth of the Northern Mariana
Islands, and Guam in this act.
Currently, the Contraband Cigarette Trafficking Act makes it illegal
to knowingly ship, transport, receive, possess, sell, distribute, or
purchase 10,000 or more contraband cigarettes that do not have a State
or territorial tax stamp. The act similarly applies to the sale of
contraband smokeless tobacco
[[Page H966]]
in excess of certain specified quantities. With respect to both
activities, the act authorizes the imposition of criminal penalties and
fines.
As drafted, however, the bill does not apply to American Samoa, the
Commonwealth of the Northern Mariana Islands, and Guam. Thus, the
Bureau of Alcohol, Tobacco, Firearms, and Explosives is prohibited from
investigating Contraband Cigarette Trafficking Act violations in those
territories. H.R. 338 will cure this obvious oversight.
Mr. Speaker, cigarettes are believed to be the most illegally
trafficked product in the world. In 2006 alone, more than 10 percent of
worldwide sales, or 600 billion cigarettes, were counterfeited.
Contraband cigarettes actually present numerous issues. Legally
manufactured cigarettes are diverted from legal trade channels in the
underworld for resale, evading the imposition of appropriate taxes,
costing territorial governments a significant amount of cigarette
excess tax revenue each year. They also facilitate unfair competition
that hurts the bottom line of legitimate businesses.
Counterfeit cigarettes are also not subjected to any manufacturing
safeguards, therefore presenting the potential for products containing
toxic ingredients that can seriously jeopardize the health and safety
of the smoker.
The lower price also facilitates easier affordability for our youth,
resulting in addiction at earlier ages. The illicit trade therefore
adds steadily to the health care costs of worker productivity losses
and the growing death from tobacco use. Currently, the use of tobacco
claims 5.4 million lives a year. This number is projected to rise to 8
million by 2013.
For these reasons, I strongly support H.R. 338 and thank our
colleague from American Samoa, Delegate Faleomavaega, for his
leadership in spearheading this issue.
Accordingly, Mr. Speaker, I urge my colleagues to support the
legislation, and I reserve the balance of my time.
Mr. GOODLATTE. I continue to reserve the balance of my time.
Mr. SCOTT of Virginia. Mr. Speaker, I yield such time as he may
consume to the delegate from American Samoa (Mr. Faleomavaega).
Mr. FALEOMAVAEGA. I thank the gentleman for yielding, Mr. Speaker,
and I especially want to thank my good friend, the chairman of the
House Judiciary committee, Mr. Goodlatte, and Mr. John Conyers, the
senior ranking member, for their support of this proposed bill. I would
especially also like to thank Jim Sensenbrenner, the chairman of the
subcommittee, and the gentleman from Virginia, my good friend, for
their support in the subcommittee. I also want to acknowledge Speaker
John Boehner, Majority Leader Cantor, and our Democratic leader, Nancy
Pelosi, for their support.
Mr. Speaker, my district faces a serious problem with tobacco
smuggling. According to a recent study, in 2010 alone, as many as 5.8
million cigarettes were smuggled into the territory. The study found
that tobacco smuggling resulted in the loss of about $725,000 in
revenues to the territory. If continued undeterred, tobacco smuggling
in the territory will lead to heavier losses in local tax revenues,
especially if the cigarette excise tax rate were to be increased. Mr.
Speaker, securing and sustaining stable sources of local revenue stream
is essential and must be encouraged for the territories, as it has
already done for the States.
It was for this reason I began to look into this important issue. I
was disappointed, however, to find that under the current law
prohibiting cigarette smuggling, not all the territories were included.
Under the Contraband Cigarette Trafficking Act that Congress passed in
1978, it is illegal to ship, sell, transport, or possess more than
10,000 cigarettes per month not bearing the tax stamp of the
jurisdiction in which they are found. Violation is a felony punishable
by up to 5 years in prison and seizure of the contraband cigarettes
and/or both.
The Contraband Cigarette Trafficking Act currently, however, does not
apply to American Samoa, the territory of Guam, and the Northern
Mariana Islands. Historically, when Congress considered the bill in
1978, the Senate version defined ``State'' to include the 50 States,
the District of Columbia, Puerto Rico, or a territory or possession of
the United States; however, the House provision excluded the smaller
territories. For some reason unbeknownst to me, the conference
substitute adopted the House provision. The conference report describes
the House provision as ``more accurately delineating the practical
scope of the legislation.''
Mr. Speaker, the bill before us today will correct this oversight
under the current law. This important piece of legislation will amend
the Contraband Cigarette Trafficking Act to include these territories.
I urge my colleagues to support this bill.
Mr. SCOTT of Virginia. Mr. Speaker, I yield back the balance of my
time.
Mr. GOODLATTE. I will close simply by saying cigarette smuggling is a
serious problem and revenues lost to the territories that Mr.
Faleomavaega and others represent are lost revenues that they can use
to meet legitimate obligations, and we want to help them combat that.
So I strongly support the legislation and urge my colleagues to do the
same, and I yield back the balance of my time.
Ms. JACKSON LEE. Mr. Speaker, I rise today to support H.R. 338, the
``Stop Tobacco Smuggling in the Territories Act of 2013,'' which adds
previously uncovered American territories to the Contraband Cigarette
Trafficking Act.
Specifically, H.R. 338 provides that American Samoa, the Commonwealth
of the Northern Marianas and Guam will be covered by the current
Contraband Cigarette Trafficking Act, which makes it illegal to
knowingly ship, transport, receive, possess, sell, distribute, or
purchase 10,000 or more contraband cigarettes that do not have a state
or territorial tax stamp.
Currently, only the 50 states, Washington, DC, Puerto Rico, and the
Virgin Islands are covered by the Contraband Cigarette Trafficking Act.
We all understand the dangers associated with cigarette smoking and
its prevalence in the United States. This bill seeks to treat the
aforementioned territories like any other state when it comes to
trafficking.
Roughly 23 percent of American adults and 30 percent of adolescents
are current smokers. Every day, 3,500 minors try smoking for the first
time, one thousand of whom go on to become regular, daily smokers.
Moreover, more than 15.5 million children are exposed to secondhand
smoke at home.
Smoking kills more people than alcohol, AIDS, car accidents, illegal
drugs, murders, and suicides combined, with thousands more dying from
spit tobacco use.
About one of every five American deaths is related to smoking, or
about 400,000 Americans each year. Tragically, about 50,000 adult
nonsmokers in the nation die each year from exposure to secondhand
smoke.
More deaths are caused each year by tobacco use than by all deaths
from HIV, illegal drug use, alcohol use, car accidents, suicides, and
murders combined.
More than 8.6 million Americans currently suffer from smoking-caused
illness, and over six million Americans under the age of 18 who are
alive today are estimated to ultimately die from smoking. In addition,
smokers lose an average of 13 to 14 years of life because of their
smoking.
We must do more to dissuade people from smoking.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Virginia (Mr. Goodlatte) that the House suspend the
rules and pass the bill, H.R. 338.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Mr. GOODLATTE. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further
proceedings on this motion will be postponed.
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