[Congressional Record (Bound Edition), Volume 155 (2009), Part 10]
[House]
[Pages 12756-12765]
[From the U.S. Government Publishing Office, www.gpo.gov]




                                PACT ACT

  Mr. WEINER. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 1676) to prevent tobacco smuggling, to ensure the collection 
of all tobacco taxes, and for other purposes, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 1676

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

     SECTION 1. SHORT TITLE; FINDINGS; PURPOSES.

       (a) Short Title.--This Act may be cited as the ``Prevent 
     All Cigarette Trafficking Act of 2009'' or ``PACT Act''.
       (b) Findings.--Congress finds that--
       (1) the sale of illegal cigarettes and smokeless tobacco 
     products significantly reduces Federal, State, and local 
     government revenues, with Internet sales alone accounting for 
     billions of dollars of lost Federal, State, and local tobacco 
     tax revenue each year;
       (2) Hezbollah, Hamas, al Qaeda, and other terrorist 
     organizations have profited from trafficking in illegal 
     cigarettes or counterfeit cigarette tax stamps;
       (3) terrorist involvement in illicit cigarette trafficking 
     will continue to grow because of the large profits such 
     organizations can earn;
       (4) the sale of illegal cigarettes and smokeless tobacco 
     over the Internet, and through mail, fax, or phone orders, 
     makes it cheaper and easier for children to obtain tobacco 
     products;
       (5) the majority of Internet and other remote sales of 
     cigarettes and smokeless tobacco are being made without 
     adequate precautions to protect against sales to children, 
     without the payment of applicable taxes, and without 
     complying with the nominal registration and reporting 
     requirements in existing Federal law;
       (6) unfair competition from illegal sales of cigarettes and 
     smokeless tobacco is taking billions of dollars of sales away 
     from law-abiding retailers throughout the United States;
       (7) with rising State and local tobacco tax rates, the 
     incentives for the illegal sale of cigarettes and smokeless 
     tobacco have increased;
       (8) the number of active tobacco investigations being 
     conducted by the Bureau of Alcohol, Tobacco, Firearms, and 
     Explosives rose to 452 in 2005;
       (9) the number of Internet vendors in the United States and 
     in foreign countries that sell cigarettes and smokeless 
     tobacco to buyers in the United States increased from only 
     about 40 in 2000 to more than 500 in 2005; and
       (10) the intrastate sale of illegal cigarettes and 
     smokeless tobacco over the Internet has a substantial effect 
     on interstate commerce.
       (c) Purposes.--It is the purpose of this Act to--
       (1) require Internet and other remote sellers of cigarettes 
     and smokeless tobacco to comply with the same laws that apply 
     to law-abiding tobacco retailers;
       (2) create strong disincentives to illegal smuggling of 
     tobacco products;
       (3) provide government enforcement officials with more 
     effective enforcement tools to combat tobacco smuggling;
       (4) make it more difficult for cigarette and smokeless 
     tobacco traffickers to engage in and profit from their 
     illegal activities;
       (5) increase collections of Federal, State, and local 
     excise taxes on cigarettes and smokeless tobacco; and
       (6) prevent and reduce youth access to inexpensive 
     cigarettes and smokeless tobacco through illegal Internet or 
     contraband sales.

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

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

     ``SECTION 1. DEFINITIONS.

       ``As used in this Act, the following definitions apply:
       ``(1) Attorney general.--The term `Attorney General' means 
     the Attorney General of the United States.
       ``(2) Attorney general.--The term `attorney general', with 
     respect to a State, means the attorney general or other chief 
     law enforcement officer of the State.
       ``(3) Cigarette.--
       ``(A) In general.--For purposes of this Act, the term 
     `cigarette' shall--
       ``(i) have the same meaning given that term in section 2341 
     of title 18, United States Code; and
       ``(ii) include `roll-your-own tobacco' (as that term is 
     defined in section 5702 of the Internal Revenue Code of 
     1986).
       ``(B) Exception.--For purposes of this Act, the term 
     `cigarette' does not include a `cigar', as that term is 
     defined in section 5702 of the Internal Revenue Code of 1986.
       ``(4) 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.
       ``(5) 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.
       ``(6) 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 to 
     the buyer by common carrier, private delivery service, or  
     other method of  remote delivery, or the seller is not in the 
     physical presence of the buyer when the buyer obtains 
     possession of the cigarettes or smokeless tobacco.
       ``(7) Delivery seller.--The term `delivery seller' means a 
     person who makes a delivery sale.
       ``(8) Indian country.--The term `Indian country' means--
       ``(A) Indian country as defined in section 1151 of title 
     18, United States Code, except that within the State of 
     Alaska that term applies only to the Metlakatla Indian 
     Community, Annette Island Reserve; and
       ``(B) any other land held by the United States in trust or 
     restricted status for one or more Indian tribes.
       ``(9) Indian tribe.--The term `Indian tribe', `tribe', or 
     `tribal' refers to an Indian tribe as defined in section 4(e) 
     of the Indian Self-Determination and Education Assistance Act 
     (25 U.S.C. 450b(e)) or as listed pursuant to section 104 of 
     the Federally Recognized Indian Tribe List Act of 1994 (25 
     U.S.C. 479a-1).
       ``(10) 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.
       ``(11) Into a state, place, or locality.--A sale, shipment, 
     or transfer of cigarettes or smokeless tobacco that is made 
     in interstate commerce, as defined herein, shall be deemed to 
     have been made into the State, place, or locality in which 
     such cigarettes or smokeless tobacco are delivered.
       ``(12) 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.
       ``(13) 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.
       ``(14) 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.
       ``(15) 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.
       ``(16) Tribal enterprise.--The term `tribal enterprise' 
     means any business enterprise, incorporated or unincorporated 
     under Federal or tribal law, of an Indian tribe or group of 
     Indian tribe.

[[Page 12757]]

       ``(17) 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 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 except as required for such 
     purposes.''.
       (c) Requirements for Delivery Sales.--The Jenkins Act is 
     amended by inserting after section 2 the following:

     ``SEC. 2A. DELIVERY SALES.

       ``(a) In General.--With respect to delivery sales into a 
     specific State and place, each delivery seller shall comply 
     with--
       ``(1) the shipping requirements set forth in subsection 
     (b);
       ``(2) the recordkeeping requirements set forth in 
     subsection (c);
       ``(3) all State, local, tribal, and other laws generally 
     applicable to sales of cigarettes or smokeless tobacco as if 
     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 or other delivery service, if the common 
     carrier or other delivery service knows or should know the 
     package contains cigarettes or smokeless tobacco. If a common 
     carrier or other delivery service believes a package is being 
     submitted for delivery in violation of paragraph (1), it may 
     require the person submitting the package for delivery to 
     establish that it is not being sent in violation of paragraph 
     (1) before accepting the package for delivery. Nothing in 
     this paragraph shall require the common carrier or other 
     delivery service to open any package to determine its 
     contents.
       ``(3) Weight restriction.--A delivery seller shall not 
     sell, offer for sale, deliver, or cause to be delivered in 
     any single sale or single delivery any cigarettes or 
     smokeless tobacco weighing more than 10 pounds.
       ``(4) Age verification.--
       ``(A) In general.--A delivery seller who mails or ships 
     tobacco products--
       ``(i) shall not sell, deliver, or cause to be delivered any 
     tobacco products to a person under the minimum age required 
     for the legal sale or purchase of tobacco products, as 
     determined by the applicable law at the place of delivery;
       ``(ii) shall use a method of mailing or shipping that 
     requires--

       ``(I) the purchaser placing the delivery sale order, or an 
     adult who is at least the minimum age required for the legal 
     sale or purchase of tobacco products, as determined by the 
     applicable law at the place of delivery, to sign to accept 
     delivery of the shipping container at the delivery address; 
     and
       ``(II) the person who signs to accept delivery of the 
     shipping container to provide proof, in the form of a valid, 
     government-issued identification bearing a photograph of the 
     individual, that the person is at least the minimum age 
     required for the legal sale or purchase of tobacco products, 
     as determined by the applicable law at the place of delivery; 
     and

       ``(iii) shall not accept a delivery sale order from a 
     person without--

       ``(I) obtaining the full name, birth date, and residential 
     address of that person; and
       ``(II) verifying the information provided in subclause (I), 
     through the use of a commercially available database or 
     aggregate of databases, consisting primarily of data from 
     government sources, that are regularly used by government and 
     businesses for the purpose of age and identity verification 
     and authentication, to ensure that the purchaser is at least 
     the minimum age required for the legal sale or purchase of 
     tobacco products, as determined by the applicable law at the 
     place of delivery.

       ``(B) Limitation.--No database being used for age and 
     identity verification under subparagraph (A)(iii) shall be in 
     the possession or under the control of the delivery seller, 
     or be subject to any changes or supplementation by the 
     delivery seller.
       ``(c) Records.--
       ``(1) In general.--Each delivery seller shall keep a record 
     of any delivery sale, including all of the information 
     described in section 2(a)(2), organized by the State, and 
     within 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 in order to ensure the 
     compliance of persons making delivery sales with the 
     requirements of this Act.
       ``(d) Delivery.--
       ``(1) In general.--Except as provided in paragraph (2), no 
     delivery seller may sell or deliver to any consumer, or 
     tender to any common carrier or other delivery service, any 
     cigarettes or smokeless tobacco pursuant to a delivery sale 
     unless, in advance of the sale, delivery, or tender--
       ``(A) any cigarette or smokeless tobacco excise tax that is 
     imposed by the State in which the cigarettes or smokeless 
     tobacco are to be delivered has been paid to the State;
       ``(B) any cigarette or smokeless tobacco excise tax that is 
     imposed by the local government of the place in which the 
     cigarettes or smokeless tobacco are to be delivered has been 
     paid to the local government; and
       ``(C) any required stamps or other indicia that 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 the Prevent All Cigarette 
     Trafficking Act of 2009, the Attorney General 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--

[[Page 12758]]

       ``(I) the attorney general and tax administrator of every 
     State;
       ``(II) common carriers and other persons that deliver small 
     packages to consumers in interstate commerce, including the 
     United States Postal Service; and
       ``(III) any other persons who the Attorney General believes 
     can promote the effective enforcement of this Act; and

       ``(ii) publicize and make the list available to any other 
     person engaged in the business of interstate deliveries or 
     who delivers cigarettes or smokeless tobacco in or into any 
     State.
       ``(B) List contents.--To the extent known, the Attorney 
     General shall include, for each delivery seller on the list 
     described in subparagraph (A)--
       ``(i) all names the delivery seller uses or has used in the 
     transaction of its business or on packages delivered to 
     customers;
       ``(ii) all addresses from which the delivery seller does or 
     has done business, or ships or has shipped cigarettes or 
     smokeless tobacco;
       ``(iii) the website addresses, primary e-mail address, and 
     phone number of the delivery seller; and
       ``(iv) any other information that the Attorney General 
     determines would facilitate compliance with this subsection 
     by recipients of the list.
       ``(C) Updating.--The Attorney General 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 regularly 
     updates.
       ``(D) State, local, or tribal additions.--The Attorney 
     General 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) Accuracy and completeness of list of noncomplying 
     delivery sellers.--In preparing and revising the list 
     required by subparagraph (A), the Attorney General shall--
       ``(i) use reasonable procedures to ensure maximum possible 
     accuracy and completeness of the records and information 
     relied on for the purpose of determining that such delivery 
     seller is noncomplying;
       ``(ii) not later than 14 days prior to including any 
     delivery seller on such list, make a reasonable attempt to 
     send notice to the delivery seller by letter, electronic 
     mail, or other means that the delivery seller is being placed 
     on such list, with that notice citing the relevant provisions 
     of this Act and the specific reasons for being placed on such 
     list;
       ``(iii) provide an opportunity to such delivery seller to 
     challenge placement on such list;
       ``(iv) investigate each such challenge by contacting the 
     relevant Federal, State, tribal, and local law enforcement 
     officials, and provide the specific findings and results of 
     such investigation to such delivery seller not later than 30 
     days after the challenge is made; and
       ``(v) upon finding that any placement is inaccurate, 
     incomplete, or cannot be verified, promptly delete such 
     delivery seller from the list as appropriate and notify each 
     appropriate Federal, State, tribal, and local authority of 
     such finding.
       ``(F) 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 a listed 
     delivery seller the delivery seller's 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.
       ``(C) Exemptions.--Subparagraphs (A) and (B), subsection 
     (b)(2), and any other requirements or restrictions placed 
     directly on common carriers elsewhere in this subsection, 
     shall not apply to a common carrier that is subject to a 
     settlement agreement relating to tobacco product deliveries 
     to consumers or, if any such settlement agreement to which 
     the common carrier was a party is terminated or otherwise 
     becomes inactive, is administering and enforcing, on a 
     nationwide basis, policies and practices that are at least as 
     stringent as any such agreement. For the purposes of this 
     section, `settlement agreement' shall be defined to include 
     the Assurance of Discontinuance entered into by the Attorney 
     General of New York and DHL Holdings USA, Inc. and DHL 
     Express (USA), Inc. on or about July 1, 2005, the Assurance 
     of Discontinuance entered into by the Attorney General of New 
     York and United Parcel Service, Inc. on or about October 21, 
     2005, and the Assurance of Compliance entered into by the 
     Attorney General of New York and Federal Express Corporation 
     and FedEx Ground Package Systems, Inc. on or about February 
     3, 2006, so long as each is honored nationwide to block 
     illegal deliveries of cigarettes or smokeless tobacco to 
     consumers, and also includes any other active agreement 
     between a common carrier and the States that operates 
     nationwide to ensure that no deliveries of cigarettes and 
     smokeless tobacco shall be made to consumers for illegally 
     operating Internet or mail-order sellers and that any such 
     deliveries to consumers shall not be made to minors or 
     without payment to the States and localities where the 
     consumers are located of all taxes on the tobacco products.
       ``(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), and that clauses 
     (i)(ii), and (iii) of paragraph (2)(a) do not apply.--
       ``(i) the person ordering the delivery shall be obligated 
     to pay--

       ``(I) the common carrier or other delivery service as if 
     the delivery of the package had been timely completed; and
       ``(II) if the package is not deliverable, any reasonable 
     additional fee or charge levied by the common carrier or 
     other delivery service to cover 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 offer to 
     provide the package and its contents to a Federal, State, or 
     local law enforcement agency.
       ``(B) Records.--A common carrier or other delivery service 
     shall maintain, for a period of 5 years, any records kept in 
     the ordinary course of business relating to any deliveries 
     interrupted pursuant to this paragraph and provide that 
     information, upon request, to the Attorney General 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 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 2 or more State, local, or 
     tribal governments, may enact or enforce any law or 
     regulation relating to delivery sales that restricts 
     deliveries of cigarettes or smokeless tobacco to consumers by 
     common carriers or other delivery services on behalf of 
     delivery sellers by--
       ``(i) requiring that the common carrier or other delivery 
     service verify the age or identity of the consumer accepting 
     the delivery by requiring the person who signs to accept 
     delivery of the shipping container to provide proof, in the 
     form of a valid, government-issued identification bearing a 
     photograph of the individual, that 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

[[Page 12759]]

     is not identified on any list of delivery sellers maintained 
     and distributed by any entity other than the Federal 
     Government.
       ``(B) Relationship to other laws.--Except as provided in 
     subparagraph (C), nothing in this paragraph shall be 
     construed to nullify, expand, restrict, or otherwise amend or 
     modify--
       ``(i) section 14501(c)(1) or 41713(b)(4) of title 49, 
     United States Code;
       ``(ii) any other restrictions in Federal law on the ability 
     of State, local, or tribal governments to regulate common 
     carriers; or
       ``(iii) any provision of State, local, or tribal law 
     regulating common carriers that is described in section 
     14501(c)(2) or 41713(b)(4)(B) of title 49 of the United 
     States Code.
       ``(C) State laws prohibiting delivery sales.--Nothing in 
     the Prevent All Cigarette Trafficking Act of 2009, the 
     amendments made by that Act, or in any other Federal statute 
     shall be construed to preempt, supersede, or otherwise limit 
     or restrict State laws prohibiting the delivery sale, or the 
     shipment or delivery pursuant to a delivery sale, of 
     cigarettes or other tobacco products to individual consumers 
     or personal residences except that no State may enforce 
     against a common carrier a law prohibiting the delivery of 
     cigarettes or other tobacco products to individual consumers 
     or personal residences without proof that the common carrier 
     is not exempt under paragraph (2)(C) of this subsection.
       ``(5) State, local, and tribal additions.--
       ``(A) In general.--Any State, local, or tribal government 
     shall provide the Attorney General 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 
     involved, 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 land.
       ``(B) Updates.--Any government providing a list to the 
     Attorney General under subparagraph (A) shall also provide 
     updates and corrections every 4 months until such time as 
     such government notifies the Attorney General in writing that 
     such government no longer desires to submit such information 
     to supplement the list maintained and distributed by the 
     Attorney General 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 
     shall remove from the list compiled 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 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; 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 a 
     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 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 citing the relevant provisions 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 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) refusing, as a matter of regular practice and 
     procedure, to make any deliveries, or any deliveries in 
     certain States, of any cigarettes or smokeless tobacco for 
     any person or for any person not in the business of 
     manufacturing, distributing, or selling cigarettes or 
     smokeless tobacco; or
       ``(iii) delaying or not making a delivery for any person 
     because of reasonable efforts to comply with this Act.
       ``(D) Other limits.--Section 2 and subsections (a), (b), 
     (c), and (d) of this section shall not be interpreted to 
     impose any responsibilities, requirements, or liability on 
     common carriers.
       ``(f) Presumption.--For purposes of this Act, a delivery 
     sale shall be deemed to have occurred in the State and place 
     where the buyer obtains personal possession of the cigarettes 
     or smokeless tobacco, and a delivery pursuant to a delivery 
     sale is deemed to have been initiated or ordered by the 
     delivery seller.''.
       (d) Penalties.--The Jenkins Act is amended by striking 
     section 3 and inserting the following:

     ``SEC. 3. PENALTIES.

       ``(a) Criminal Penalties.--
       ``(1) In general.--Except as provided in paragraph (2), 
     whoever knowingly violates 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 knowingly--
       ``(i) as consideration for the receipt of, or as 
     consideration for a promise or agreement to pay, anything of 
     pecuniary value; or
       ``(ii) for the purpose of assisting a delivery seller to 
     violate, or otherwise evading compliance with, section 2A.
       ``(b) Civil Penalties.--
       ``(1) In general.--Except as provided in paragraph (3), 
     whoever violates 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 imposed 
     under paragraph (1) for a violation of this Act shall be 
     imposed in addition to any criminal penalty under subsection 
     (a) and any other damages, equitable relief, or injunctive 
     relief awarded by the court, including the payment of any 
     unpaid taxes to the appropriate Federal, State, local, or 
     tribal governments.
       ``(3) Exceptions.--
       ``(A) Delivery violations.--An employee of a common carrier 
     or independent delivery service shall be subject to civil 
     penalties under paragraph (1) for a violation of section 
     2A(e) only if the violation is committed intentionally--
       ``(i) as consideration for the receipt of, or as 
     consideration for a promise or agreement to pay, anything of 
     pecuniary value; or
       ``(ii) for the purpose of assisting a delivery seller to 
     violate, or otherwise evading compliance with, section 2A.
       ``(B) Other limitations.--No common carrier or independent 
     delivery service shall be subject to civil penalties under 
     paragraph (1) for a violation of section 2A(e) if--
       ``(i) the common carrier or independent delivery service 
     has implemented and enforces effective policies and practices 
     for complying with that section; or
       ``(ii) the violation consists of an employee of the common 
     carrier or independent delivery service who physically 
     receives and processes orders, picks up packages, processes 
     packages, or makes deliveries, taking actions that are 
     outside the scope of employment of the employee, or that 
     violate the implemented and enforced policies of the common 
     carrier or independent delivery service described in clause 
     (i).''.
       (e) Enforcement.--The Jenkins Act is amended by striking 
     section 4 and inserting the following:

     ``SEC. 4. ENFORCEMENT.

       ``(a) In General.--The United States district courts shall 
     have jurisdiction to prevent and restrain violations of this 
     Act and

[[Page 12760]]

     to provide other appropriate injunctive or equitable relief, 
     including money damages, for such violations.
       ``(b) Authority of the Attorney General.--The Attorney 
     General 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 local government or Indian tribe that levies a tax subject 
     to section 2A(a)(3), through its chief law enforcement 
     officer, may bring an action in a United States district 
     court to prevent and restrain violations of this Act by any 
     person or to obtain any other appropriate relief from any 
     person for violations of this Act, including civil penalties, 
     money damages, and injunctive or other equitable relief.
       ``(B) Sovereign immunity.--Nothing in this Act shall be 
     deemed to abrogate or constitute a waiver of any sovereign 
     immunity of a State or local government or Indian tribe 
     against any unconsented lawsuit under this Act, or otherwise 
     to restrict, expand, or modify any sovereign immunity of a 
     State or local government or Indian tribe.
       ``(2) Provision of information.--A State, through its 
     attorney general, or a local government or Indian tribe that 
     levies a tax subject to section 2A(a)(3), through its chief 
     law enforcement officer, may provide evidence of a violation 
     of this Act by any person not subject to State, local, or 
     tribal government enforcement actions for violations of this 
     Act to the Attorney General 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 be 
     transferred into the PACT Anti-Trafficking Fund and shall be 
     available to the Attorney General 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 an appropriate United 
     States district court to prevent and restrain violations of 
     this Act by any person other than a State, local, or tribal 
     government.
       ``(e) Notice.--
       ``(1) Persons dealing in tobacco products.--Any person who 
     commences a civil action under subsection (d) shall inform 
     the Attorney General of the 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 action.
       ``(f) Public Notice.--
       ``(1) In general.--The Attorney General shall make 
     available to the public, by posting such information on the 
     Internet and by other appropriate means, information 
     regarding all enforcement actions brought by the United 
     States, or reported to the Attorney General, under this 
     section, including information regarding the resolution of 
     such actions and how the Attorney General has responded to 
     referrals of evidence of violations pursuant to subsection 
     (c)(2).
       ``(2) Reports to congress.--The Attorney General shall 
     submit to Congress, one year after the date of the enactment 
     of the Prevent All Cigarette Trafficking Act of 2009, at the 
     end of each of the four succeeding 1-year periods, a report 
     containing the information described in paragraph (1).''.

     SEC. 3. TREATMENT OF CIGARETTES AND SMOKELESS TOBACCO AS 
                   NONMAILABLE MATTER.

       (a) In General.--Chapter 83 of title 18, United States 
     Code, is amended by inserting after section 1716D the 
     following:

     ``Sec. 1716E. Tobacco products as nonmailable

       ``(a) Prohibition.--All cigarettes and smokeless tobacco 
     (as those terms are defined in section 1 of the Act of 
     October 19, 1949, commonly referred to as the Jenkins Act) 
     are nonmailable and shall not be deposited in or carried 
     through the mails. The United States Postal Service shall not 
     accept for delivery or transmit through the mails any package 
     that it knows or has reasonable cause to believe contains any 
     cigarettes or smokeless tobacco made nonmailable by this 
     subsection. For the purposes of subsection (a) reasonable 
     cause includes--
       ``(1) a statement on a publicly available website, or an 
     advertisement, by any person that such person will mail 
     matter which is nonmailable under this section in return for 
     payment; or
       ``(2) the placement of the person on the list created under 
     section 2A(e) of the Jenkins Act.
       ``(b) Exceptions.--This section shall not apply to the 
     following:
       ``(1) Cigars.--Cigars (as that term is defined in section 
     5702(a) of the Internal Revenue Code of 1986).
       ``(2) Geographic exception.--Mailings within the State of 
     Alaska or within the State of Hawaii.
       ``(3) Business purposes.--Tobacco products mailed only for 
     business purposes between legally operating businesses that 
     have all applicable State and Federal Government licenses or 
     permits and are engaged in tobacco product manufacturing, 
     distribution, wholesale, export, import, testing, 
     investigation, or research, or for regulatory purposes 
     between any such businesses and State or Federal Government 
     regulatory agencies, pursuant to a final rule that the Postal 
     Service shall issue, not later than 180 days after the date 
     of the enactment of the Prevent All Cigarette Trafficking Act 
     of 2009, which shall establish the standards and requirements 
     that apply to all such mailings, which shall include the 
     following:
       ``(A) The Postal Service shall verify that any person 
     submitting an otherwise nonmailable tobacco product into the 
     mails as authorized by this paragraph is a business or 
     government agency permitted to make such mailings pursuant to 
     this section and the related final rule.
       ``(B) The Postal Service shall ensure that any recipient of 
     an otherwise nonmailable tobacco product sent through the 
     mails pursuant to this paragraph is a business or government 
     agency that may lawfully receive such product.
       ``(C) The mailings shall be sent through the Postal 
     Service's systems that provide for the tracking and 
     confirmation of the delivery.
       ``(D) The identities of the business or government entity 
     submitting the mailing containing otherwise nonmailable 
     tobacco products for delivery and the business or government 
     entity receiving the mailing shall be clearly set forth on 
     the package and such information shall be kept in Postal 
     Service records and made available to the Postal Service, the 
     Attorney General, and to persons eligible to bring 
     enforcement actions pursuant to section 3(d) of the Prevent 
     All Cigarette Trafficking Act of 2009 for a period of at 
     least three years thereafter.
       ``(E) The mailings shall be marked with a Postal Service 
     label or marking that makes it clear to Postal Service 
     employees that it is a permitted mailing of otherwise 
     nonmailable tobacco products that may be delivered only to a 
     permitted government agency or business and may not be 
     delivered to any residence or individual person.
       ``(F) The mailing shall be delivered only to a verified 
     adult employee of the recipient business or government 
     agency, who shall be required to sign for the mailing.
       ``(4) Certain individuals.--Tobacco products mailed by 
     adult individuals for noncommercial purposes, including the 
     return of a damaged or unacceptable tobacco product to its 
     manufacturer, pursuant to a final rule that the Postal 
     Service shall issue, not later than 180 days after the date 
     of the enactment of the Prevent All Cigarette Trafficking Act 
     of 2009, which shall establish the standards and requirements 
     that apply to all such mailings, which shall include the 
     following:
       ``(A) The Postal Service shall verify that any person 
     submitting an otherwise nonmailable tobacco product into the 
     mails as authorized by this section is the individual 
     identified on the return address label of the package and is 
     an adult.
       ``(B) For a mailing to an individual, the Postal Service 
     shall require the person submitting the otherwise nonmailable 
     tobacco product into the mails as authorized by this 
     subsection to affirm that the recipient is an adult.
       ``(C) The package shall not weigh more than 10 ounces.
       ``(D) The mailing shall be sent through the Postal 
     Service's systems that provide for the tracking and 
     confirmation of the delivery.

[[Page 12761]]

       ``(E) No package shall be delivered or placed in the 
     possession of any individual who is not a verified adult. For 
     a mailing to an individual, the Postal Service shall deliver 
     the package only to the verified adult recipient at the 
     recipient address or transfer it for delivery to an Air/Army 
     Postal Office (APO) or Fleet Postal Office (FPO) number 
     designated in the recipient address.
       ``(F) No person shall initiate more than ten such mailings 
     in any thirty-day period.
       ``(5) Exception for mailings for consumer testing by 
     manufacturers.--Subject to paragraph (8), nothing in this Act 
     shall preclude a legally operating cigarette manufacturer 
     operating on its own or through its legally authorized agent 
     from using the Postal Service to mail cigarettes to verified 
     adult smokers solely for consumer testing purposes, provided 
     that--
       ``(A) the cigarette manufacturer has a federal permit, in 
     good standing, pursuant to section 5713 of the Internal 
     Revenue Code of 1986;
       ``(B) any package of cigarettes mailed pursuant to this 
     paragraph shall contain no more than 12 packs of cigarettes 
     (240 cigarettes);
       ``(C) no individual shall receive more than 1 package of 
     cigarettes per manufacturer pursuant to this paragraph in any 
     30-day period;
       ``(D) all taxes on the cigarettes levied by the State and 
     locality of delivery have been paid to the State and locality 
     prior to delivery, and tax stamps or other tax-payment 
     indicia have been affixed to the cigarettes as required by 
     law;
       ``(E)(i) the recipient has not made any payments of any 
     kind in exchange for receiving the cigarettes;
       ``(ii) the recipient is paid a fee by the manufacturer or 
     manufacturer's agent for participation in consumer product 
     tests; and
       ``(iii) the recipient, in connection with the tests, 
     evaluates the cigarettes and provides feedback to the 
     manufacturer or agent;
       ``(F) the mailing is made pursuant to a final rule that the 
     Postal Service shall issue, not later than 180 days after the 
     date of the enactment of the Prevent All Cigarette 
     Trafficking Act of 2009, which shall establish standards and 
     requirements that apply to all such mailings, which shall 
     include the following:
       ``(i) The Postal Service shall verify that any person 
     submitting a tobacco product into the mails pursuant to this 
     paragraph is a manufacturer permitted to make such mailings 
     pursuant to this paragraph, or an agent legally authorized by 
     the manufacturer to submit the tobacco product into the mails 
     on the manufacturer's behalf.
       ``(ii) The Postal Service shall require the manufacturer 
     submitting the cigarettes into the mails pursuant to this 
     paragraph to affirm that the manufacturer or its legally 
     authorized agent has verified that the recipient is an adult 
     established smoker who has not made any payment for the 
     cigarettes, has formally stated in writing that he or she 
     wishes to receive such mailings, and has not withdrawn that 
     agreement despite being offered the opportunity to do so by 
     the manufacturer or its legally authorized agent at least 
     once in every 3-month period.
       ``(iii) The Postal Service shall require the manufacturer 
     or its legally authorized agent submitting the cigarettes 
     into the mails pursuant to this paragraph to affirm that the 
     package contains no more than 12 packs of cigarettes (240 
     cigarettes) on which all taxes levied on the cigarettes by 
     the State and locality of delivery have been paid and all 
     related State tax stamps or other tax-payment indicia have 
     been applied.
       ``(iv) The mailings shall be sent through the Postal 
     Service's systems that provide for the tracking and 
     confirmation of the delivery and all related records shall be 
     kept in Postal Service records and made available to persons 
     enforcing this section for a period of at least 3 years 
     thereafter.
       ``(v) The mailing shall be marked with a Postal Service 
     label or marking that makes it clear to Postal Service 
     employees that it is a permitted mailing of otherwise 
     nonmailable tobacco products that may be delivered only to 
     the named recipient after verifying that the recipient is an 
     adult.
       ``(vi) The Postal Service shall deliver the mailing only to 
     the named recipient and only after verifying that the 
     recipient is an adult.
       ``(6) Definition of consumer testing.--For purposes of this 
     Act, the term `consumer testing' means testing limited to 
     formal data collection and analysis for the specific purpose 
     of evaluating the product for quality assurance and 
     benchmarking purposes of cigarette brands or sub-brands among 
     existing adult smokers.
       ``(7) Definition of adult.--For purposes of paragraph (5), 
     the term `adult' means an individual of at least 21 years of 
     age. For purposes of paragraphs (3) and (4), the term `adult' 
     means an individual of at least the minimum age required for 
     the legal sale or purchase of tobacco products as determined 
     by applicable law at the place the individual is located.
       ``(8) Limitations.--Paragraph (5) shall not--
       ``(A) permit a mailing of cigarettes to an individual 
     located in any State that prohibits the delivery or shipment 
     of cigarettes to individuals in the State, or preempt, limit, 
     or otherwise affect any related State laws; or
       ``(B) permit a manufacturer, directly or through a legally 
     authorized agent, to mail cigarettes in any calendar years in 
     a cumulative amount greater than one percent of its total 
     cigarette sales in the United States in the previous calendar 
     year.
       ``(9) United states government agencies.--Agencies of the 
     United States Government involved in the consumer testing of 
     tobacco products solely for public health purposes may make 
     mailings pursuant to the same requirements, restrictions, and 
     Postal Service rules and procedures that apply to consumer 
     testing mailings of cigarettes by manufacturers under 
     paragraph (5), except that no such agency shall be required 
     to pay the recipients for participating in the consumer 
     testing.
       ``(c) Seizure and Forfeiture.--Any cigarettes or smokeless 
     tobacco made nonmailable by this subsection that are 
     deposited in the mails shall be subject to seizure and 
     forfeiture, pursuant to the procedures set forth in chapter 
     46 of this title. Any tobacco products 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.
       ``(d) Additional Penalties.--In addition to any other fines 
     and penalties imposed by this Act for violations of this 
     section, any person violating this section shall be subject 
     to an additional civil penalty in the amount of 10 times the 
     retail value of the nonmailable cigarettes or smokeless 
     tobacco, including all Federal, State, and local taxes.
       ``(e) Criminal Penalty.--Whoever knowingly deposits for 
     mailing or delivery, or knowingly causes to be delivered by 
     mail, according to the direction thereon, or at any place at 
     which it is directed to be delivered by the person to whom it 
     is addressed, anything that this section declares to be 
     nonmailable matter shall be fined under this title, 
     imprisoned not more than 1 year, or both.
       ``(f) Definition.--As used in this section, the term 
     `State' has the meaning given that term in section 1716(k).
       ``(g) Use of Penalties.--There is established a separate 
     account in the Treasury of the United States, to be 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.
       ``(h) Coordination of Efforts.--In the enforcement of this 
     section, the Postal Service shall cooperate and coordinate 
     its efforts with related enforcement activities of any other 
     Federal agency or of any State, local, or tribal government, 
     whenever appropriate.''.
       (b) Actions by State, Local or Tribal Governments Relating 
     to Certain Tobacco Products.--
       (1) A State, through its attorney general, or a local 
     government or Indian tribe that levies an excise tax on 
     tobacco products, through its chief law enforcement officer, 
     may in a civil action in a United States district court 
     obtain appropriate relief with respect to a violation of 
     section 1716E of title 18, United States Code. Appropriate 
     relief includes injunctive and equitable relief and damages 
     equal to the amount of unpaid taxes on tobacco products 
     mailed in violation of that section to addressees in that 
     State.
       (2) Nothing in this section shall be deemed to abrogate or 
     constitute a waiver of any sovereign immunity of a State or 
     local government or Indian tribe against any unconsented 
     lawsuit under paragraph (1), or otherwise to restrict, 
     expand, or modify any sovereign immunity of a State or local 
     government or Indian tribe.
       (3) 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 any general civil or 
     criminal statute of such State.
       (4) A State, through its attorney general, or a local 
     government or Indian tribe that levies an excise tax on 
     tobacco products, through its chief law enforcement officer, 
     may provide evidence of a violation of paragraph (1) for 
     commercial purposes by any person not subject to State, 
     local, or tribal government enforcement actions for 
     violations of paragraph (1) to the Attorney General, who 
     shall take appropriate actions to enforce the provisions of 
     this subsection.
       (5) The remedies available under this subsection are in 
     addition to any other remedies available under Federal, 
     State, local, tribal, or other law. Nothing in this 
     subsection shall be construed to expand, restrict, or 
     otherwise modify any right of an authorized State, local, or 
     tribal government official to proceed in a State, tribal, or 
     other appropriate court, or take other enforcement actions, 
     on the basis of an alleged violation of State, local, tribal, 
     or other law.
       (c) Clerical Amendment.--The table of sections at the 
     beginning of chapter 83 of title 18 is amended by adding 
     after the item

[[Page 12762]]

     relating to section 1716D the following new item:

``1716E. Tobacco products as nonmailable.''.

     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, and with 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 an appropriate United States 
     district court to prevent and restrain violations of 
     subsection (a) by any 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 
     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 may bring an action in an appropriate United States 
     district court to prevent and restrain violations of 
     subsection (a) by any person.
       (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 to 
     the buyer by common carrier, private delivery service, or 
     other method of remote delivery, or the seller is not in the 
     physical presence of the buyer when the buyer obtains 
     possession of the cigarettes or smokeless tobacco.
       (2) Importer.--The term ``importer'' means each of the 
     following:
       (A) Shipping or consigning.--Any person in the United 
     States to whom nontaxpaid 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 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. INSPECTION BY BUREAU OF ALCOHOL, TOBACCO, FIREARMS, 
                   AND EXPLOSIVES OF RECORDS OF CERTAIN CIGARETTE 
                   AND SMOKELESS TOBACCO SELLERS; CIVIL PENALTY.

       Section 2343(c) of title 18, United States Code, is amended 
     to read as follows:
       ``(c)(1) Any officer of the Bureau of Alcohol, Tobacco, 
     Firearms, and Explosives may, during normal business hours, 
     enter the premises of any person described in subsection (a) 
     or (b) for the purposes of inspecting--
       ``(A) any records or information required to be maintained 
     by such person under the provisions of law referred to in 
     this chapter; or
       ``(B) any cigarettes or smokeless tobacco kept or stored by 
     such person at such premises.
       ``(2) The district courts of the United States shall have 
     the authority in a civil action under this subsection to 
     compel inspections authorized by paragraph (1).
       ``(3) Whoever denies access to an officer under paragraph 
     (1), or who fails to comply with an order issued under 
     paragraph (2), shall be subject to a civil penalty in an 
     amount not to exceed $10,000.''.

     SEC. 6. EXCLUSIONS REGARDING INDIAN TRIBES AND TRIBAL 
                   MATTERS.

       (a) In General.--Nothing in this Act or the amendments made 
     by this Act shall be construed to amend, modify, or otherwise 
     affect--
       (1) any agreements, compacts, or other intergovernmental 
     arrangements between any State or local government and any 
     government of an Indian tribe (as that term is defined in 
     section 4(e) of the Indian Self-Determination and Education 
     Assistance Act (25 U.S.C. 450b(e)) relating to the collection 
     of taxes on cigarettes or smokeless tobacco sold in Indian 
     country;
       (2) any State laws that authorize or otherwise pertain to 
     any such intergovernmental arrangements or create special 
     rules or procedures for the collection of State, local, or 
     tribal taxes on cigarettes or smokeless tobacco sold in 
     Indian country;
       (3) any limitations under Federal or State law, including 
     Federal common law and treaties, on State, local, and tribal 
     tax and regulatory authority with respect to the sale, use, 
     or distribution of cigarettes and smokeless tobacco by or to 
     Indian tribes, tribal members, tribal enterprises, or in 
     Indian country;
       (4) any Federal law, including Federal common law and 
     treaties, regarding State jurisdiction, or lack thereof, over 
     any tribe, tribal members, tribal enterprises, tribal 
     reservations, or other lands held by the United States in 
     trust for one or more Indian tribes; and
       (5) any State or local government authority to bring 
     enforcement actions against persons located in Indian 
     country.
       (b) Coordination of Law Enforcement.--Nothing in this Act 
     or the amendments made by this Act shall be construed to 
     inhibit or otherwise affect any coordinated law enforcement 
     effort by 1 or more States or other jurisdictions, including 
     Indian tribes, through interstate compact or otherwise, 
     that--
       (1) provides for the administration of tobacco product laws 
     or laws pertaining to interstate sales or other sales of 
     tobacco products;
       (2) provides for the seizure of tobacco products or other 
     property related to a violation of such laws; or
       (3) establishes cooperative programs for the administration 
     of such laws.
       (c) Treatment of State and Local Governments.--Nothing in 
     this Act or the amendments made by this Act shall be 
     construed to authorize, deputize, or commission States or 
     local governments as instrumentalities of the United States.
       (d) Enforcement Within Indian Country.--Nothing in this Act 
     or the amendments made by this Act shall prohibit, limit, or 
     restrict enforcement by the Attorney General of the 
     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. 7. ENHANCED CONTRABAND TOBACCO ENFORCEMENT.

       (a) Requirements.--The Director of the Bureau of Alcohol, 
     Tobacco, Firearms and Explosives shall--
       (1) create 6 regional contraband tobacco trafficking teams 
     over a 3-year period in New York City, Washington DC, 
     Detroit, Los Angeles, Seattle, and Miami,
       (2) create a new Tobacco Intelligence Center to oversee 
     investigations and monitor and coordinate ongoing 
     investigations and to serve as a nerve center for all ongoing 
     tobacco diversion investigations within the Bureau of 
     Alcohol, Tobacco, Firearms, and Explosives, in the United 
     States and, where applicable, with law enforcement 
     organizations around the world,
       (3) establish a covert national warehouse for undercover 
     operations, and
       (4) create a computer database that will track and analyze 
     information from retail sellers of tobacco products that sell 
     through the Internet or by mail order or make other non-face-
     to-face sales.
       (b) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out subsection (a) $8,500,000 for 
     each of the 5 fiscal years beginning with fiscal year 2010.

     SEC. 8. 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.--Section 5 shall take effect on the 
     date of enactment of this Act.

     SEC. 9. SEVERABILITY.

       If any provision of this Act, or any amendment made by this 
     Act, or the application

[[Page 12763]]

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

     SEC. 10. SENSE OF CONGRESS CONCERNING THE PRECEDENTIAL EFFECT 
                   OF THIS ACT.

       It is the sense of Congress that unique harms are 
     associated with online cigarette sales, including problems 
     with verifying the ages of consumers in the digital market 
     and the long-term health problems associated with the use of 
     certain tobacco products. This Act was enacted recognizing 
     the longstanding interest of Congress in urging compliance 
     with States' laws regulating remote sales of certain tobacco 
     products to citizens of those States, including the passage 
     of the Jenkins Act over 50 years ago, which established 
     reporting requirements for out-of-State companies that sell 
     certain tobacco products to citizens of the taxing States, 
     and which gave authority to the Department of Justice and the 
     Bureau of Alcohol, Tobacco, Firearms, and Explosives to 
     enforce the Jenkins Act. In light of the unique harms and 
     circumstances surrounding the online sale of certain tobacco 
     products, this Act is intended to help collect cigarette 
     excise taxes, to stop tobacco sales to underage youth, and to 
     help the States enforce their laws that target the online 
     sales of certain tobacco products only. This Act is in no way 
     meant to create a precedent regarding the collection of State 
     sales or use taxes by, or the validity of efforts to impose 
     other types of taxes on, out-of-State entities that do not 
     have a physical presence within the taxing State.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from New 
York (Mr. Weiner) and the gentleman from Texas (Mr. Poe) each will 
control 20 minutes.
  The Chair recognizes the gentleman from New York.


                             General Leave

  Mr. WEINER. Mr. Speaker, I ask unanimous consent that all Members may 
have 5 legislative days to revise and extend their remarks and include 
extraneous material on the bill under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from New York?
  There was no objection.
  Mr. WEINER. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, as States and localities face increasing pressure on 
their budgets around the country, there is one source of revenue that 
not only raises money for those localities but also performs an 
important health function, and that is to provide taxation on packs of 
cigarettes. The taxation varies dramatically from State to State, and, 
frankly, in New York State we have the highest State tax in the Nation, 
$2.75 a pack, and the highest local tax as well. We have a $4.25 per 
pack. In some places it's much lower.
  But every State in the union has some taxation that they put on their 
tobacco products, and it is collected, by and large, by wholesalers 
that put a tax stamp on. Most citizens, when they go out and purchase 
their cigarettes, do so legally, pay the tax, and there is no problem.
  However, as the taxes have gone up, we have unwittingly created a 
large and growing black market for smuggled tobacco products. And this 
legislation, which has bipartisan support in the Judiciary Committee 
and in this House, seeks to solve that problem. It does so in a number 
of ways.
  One, it makes it much more difficult for someone to sell tobacco over 
the Internet. Right now, UPS, DHL, the common carriers all are under 
agreement that they, themselves, are saying, We are not going to ship 
tobacco across the Internet because too often it's used as a way to 
avoid paying the taxes. There is one common carrier, the Postal 
Service, which still permits it. That is the carrier of choice for the 
overwhelming number of illegally smuggled cigarettes. And, frankly, the 
Postal Service has said, Congress, if you want us not to ship those 
cigarettes, you've got to tell us in a law that you want us not to. 
That's what we are doing today.
  Also, it increases the penalties under the Jenkins Act. If someone is 
going to seek to avoid paying tobacco taxes, violating the Jenkins Act 
is going to be a felony under this act. It is going to make it a 
requirement that sellers of Internet tobacco verify the purchaser's age 
and identify them through easily accessible databases, which is, in 
many cases, going to put some of these Internet tobacco carriers out of 
business.
  This is not only a matter of revenue, though, Mr. Speaker. This is 
also the source for a black market that has emerged that, according to 
the GAO, has allowed organizations as nefarious as Hezbollah to make 
the money on the float: buying tobacco, say, in South Carolina, driving 
it to Michigan, taking money that they saved by not charging people the 
tax, and taking that money and exporting it to fund terrorist 
activities. That is not a hypothetical. That's something that the GAO 
actually found to have happened.
  So I urge my colleagues to support this. This has broad support. We 
have worked very hard, that even organizations as disparate as the 
wholesale marketers, Phillip Morris, the National Association of 
Attorneys General, Lorillard, and the Campaign for Tobacco-Free Kids, 
all are supporters of the PACT Act.
  I reserve the balance of my time.
  Mr. POE of Texas. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, I would like to thank my colleague and friend on the 
Judiciary Committee, Mr. Weiner, for introducing H.R. 1676, the Prevent 
All Cigarette Trafficking or PACT Act. This bipartisan legislation will 
help Federal, State, and local law enforcement officials combat 
cigarette smuggling and trafficking in the United States.
  Tobacco smuggling has become one of the most prevalent forms of 
smuggling in recent years in our country. Its effects are not felt only 
in the United States but other parts of the world as well.
  The World Health Organization estimates that illegal cigarettes 
account for 10.7 percent, or approximately 600 billion cigarettes, of 
the more than 5.7 trillion cigarettes sold globally each year.
  According to a study by the World Bank, cigarettes are appealing to 
smugglers because taxes typically account for a large portion of the 
price, making it highly profitable to traffic them for resale at a 
reduced price.
  Tobacco smuggling traditionally involves the diversion of large 
quantities of cigarettes from wholesale distribution into the black 
market. This typically occurs during the transit of the cigarettes, 
thus allowing the traffickers to avoid most, if not all, taxes that 
will be imposed at retail on the cigarettes.
  The profits from tobacco trafficking can be and likely are used to 
finance other illegal activities such as organized crime and drug 
trafficking syndicates. In addition to the sale of smuggled tobacco on 
the black market, it deprives States of significant amounts of tax 
revenue every year.
  Over the last 15 years, cigarette taxes have increased more than 65 
percent throughout the United States; yet, during this same time, 
States' tax revenues increased by only 35 percent.
  California officials estimate that taxes are unpaid on about 15 
percent of all tobacco sold in its markets at a cost of $276 million 
every year. In a recently released study, the State of New York put its 
losses at more than $576 million per year.
  The State of Texas raised cigarette taxes recently, and this increase 
is supposed to generate an additional $800 million in revenue for the 
State.
  This bill would help to ensure that States like California, New York, 
and Texas receive or recover tax revenue that is due them by people who 
buy cigarettes.
  Two senior ranking members of the Judiciary Committee, Ranking Member 
Smith and Mr. Weiner, have teamed together to cosponsor the PACT Act 
for the second consecutive Congress.
  In the 110th Congress, this House passed similar legislation on a 
suspension calendar; however, our colleagues in the Senate did not ever 
take up the bill.
  H.R. 1676 varies slightly from the previous legislation passed by the 
110th Congress. Provisions that were under the jurisdiction of the 
Oversight and Government Reform Committee have been removed.

[[Page 12764]]

  This bill also contains an authorization for additional funding for 
anticigarette trafficking efforts for the Bureau of Alcohol, Tobacco, 
Firearms and Explosives.
  This bipartisan legislation closes loopholes in current tobacco 
trafficking laws, provides law enforcement with new tools to combat 
innovative methods being used by the cigarette traffickers to 
distribute their products, and bolsters the States' ability to enforce 
State law.
  I urge all my colleagues to support this legislation.
  Mr. Speaker, I reserve the balance of my time.
  Mr. WEINER. I thank the gentleman for his leadership on this and so 
many issues on the Judiciary Committee.
  It is indeed the fact that a lot of these Web sites continue to exist 
because they provide delivery by the United States Postal Service. The 
irony here is that UPS, FedEx, DHL, the big carriers have entered into 
an agreement with the State of New York that they are now following in 
all 50 States that they won't transport those tobacco products because 
there is a reasonable expectation that these Web sites are operating, 
and often brag about the idea that, if you go shopping for tobacco on 
the Internet, you're not going to have to pay the taxes.

                              {time}  1330

  Well, we need to stop that activity. You can be against the high 
taxes in some States, or in favor of them. I think that the States, in 
their sovereign responsibility, have the right to come up with their 
own levels of taxation. But I think that we should all be able to agree 
that right now there is a giant truck-sized loophole that exists in the 
law that allows many people to avoid paying the taxes and allows the 
funds to go to nefarious hands.
  According to the GAO, Hezbollah raised $1.5 million from the sale of 
illegal tobacco in the 5 years 1996 through 2000. The largest case that 
they found was that millions of dollars of cigarettes were smuggled to 
Michigan from North Carolina in 1996--seized cigarettes and property 
and currency worth $2 million and proceeds that had been transferred to 
Beirut.
  But it's more obviously often smaller bore problems that have been 
created as well; that if you have people who are increasingly seeking, 
because of the large amount of taxation that there is on many of these 
products, a lot of the programs in our States that are funded 
theoretically from the tax revenues from tobacco are seeing shortfalls. 
In fact, we're reaching a point now where the rising tobacco tax rights 
are producing less revenue in some States.
  Some people thump their chest and say, Isn't that great. We have less 
smoking. But if you look at the back end, you see that the wholesalers 
and the manufacturers are still sending the same number of cigarettes 
out; we're just not collecting the revenues for it.
  I want to offer my gratitude to Mr. Scott for his chairmanship on the 
Crime Subcommittee, through which the bill passed. I also want to 
express gratitude to many members of the staff who have worked to make 
not only the bill work, but also the compromises and changes that we 
made.
  Mr. Coble, for example, was concerned that we wanted to allow some of 
the smaller test brands to be able to be sent out so market research 
could be done. We accommodated those concerns. And I think his staff 
was very, very helpful.
  If the Speaker will indulge me, I want to mention some of them by 
name: Perry Apelbaum of the Judiciary Committee; and Ameer Gopalani, 
Jesselyn McCurdy, Kimani Little and Caroline Lynch of the Subcommittee 
on Crime, Terrorism, and Homeland Security; John Mautz of Congressman 
Coble's staff; and Joseph Dunn of my staff.
  Also, some of the folks in the private sector who helped us craft 
this bill in a way that doesn't impact legitimate operators: Artie 
Katz, Lenny Schwartz, and Steve Rosenthal with the New York Association 
of Wholesale Marketers, who helped enlighten the committee on how the 
process actually worked; John Hoel and Sarah Knakmuhs with Altria; Eric 
Lindblom with the Campaign for Tobacco Free Kids; Anne Holloway with 
the American Wholesale Marketers Association; Lynn Beckwith with the 
National Association of Convenience Stores; and Laurie McKay with 
Dickstein Shapiro.
  Mr. Speaker, I reserve the balance of my time.
  Mr. POE of Texas. Mr. Speaker, this bill has nothing to do with 
whether cigarettes should be taxed or not, whether tobacco should be 
taxed or not. The issue is the black market sale of cigarettes and 
those individuals who fail to pay lawfully imposed taxes on them.
  This legislation is supported by the tobacco industry and by law 
enforcement, the Attorney General, and I urge the adoption of this 
legislation.
  I yield back the balance of my time.
  Mr. WEINER. I thank Mr. Poe again, and I just want to make one other 
point: that there are colleagues on other committees who have had an 
interest in this, and they have been working hand-in-hand with the 
Judiciary Committee.
  I will insert an exchange of letters with one of those committees, 
the Oversight and Reform Committee, at this point in the Record.

         House of Representatives, Committee on Oversight and 
           Government Reform,
                                     Washington, DC, May 19, 2009.
     Hon. John Conyers, Jr.,
     Chairman, Committee on the Judiciary, Rayburn House Office 
         Building, Washington, DC.
       Dear Chairman Conyers: I am writing about H.R. 1676, the 
     ``Prevent All Cigarette Trafficking Act of 2009.'' The 
     Judiciary Committee ordered this measure reported, as 
     amended, on April 28, 2009.
       I appreciate your efforts to consult with the Committee on 
     Oversight and Government Reform regarding those provisions of 
     H.R. 1676 that fall within the Oversight Committee's 
     jurisdiction. These provisions relate to the treatment of 
     cigarettes and smokeless tobacco as nonmailable matter and 
     new requirements which will be placed on the U.S. Postal 
     Service as a result.
       In the interest of expediting consideration of H.R. 1676, 
     the Oversight Committee will not separately consider relevant 
     provisions of this bill. I would, however, request your 
     support for the appointment of conferees from the Oversight 
     Committee should H.R. 1676 or a similar Senate bill be 
     considered in conference with the Senate. Moreover, this 
     letter should not be construed as a waiver of the Oversight 
     Committee's legislative jurisdiction over subjects addressed 
     in H.R. 1676 that fall within the jurisdiction of the 
     Oversight Committee.
       Please include our exchange of letters on this matter in 
     the Congressional Record during consideration of this 
     legislation on the House floor.
       Again, I appreciate your willingness to consult the 
     Committee on these matters.
           Sincerely,
                                                   Edolphus Towns,
     Chairman.
                                  ____

                                         House of Representatives,


                                   Committee on the Judiciary,

                                     Washington, DC, May 19, 2009.
     Hon. Edolphus Towns,
     Chairman, Committee on Oversight and Government Reform, House 
         of Representatives, Washington, DC.
       Dear Mr. Chairman: Thank you for your letter regarding your 
     committee's jurisdictional interest in H.R. 1676, the Prevent 
     All Cigarette Trafficking Act of 2009.
       I appreciate your willingness to support expediting floor 
     consideration of this important legislation today. I 
     understand and agree that this is without prejudice to your 
     Committee's jurisdictional interests in this or similar 
     legislation in the future. In the event a House-Senate 
     conference on this or similar legislation is convened, I 
     would support your request for an appropriate number of 
     conferees.
       I will include a copy of your letter and this response in 
     the Congressional Record in the debate on the bill. Thank you 
     for your cooperation as we work towards enactment of this 
     legislation.
           Sincerely,
                                                John Conyers, Jr.,
                                                         Chairman.

  Ms. JACKSON-LEE of Texas. Mr. Speaker, I rise in support of this 
legislation, H.R. 1676, the Prevent All Cigarette Trafficking Act of 
2009 or PACT Act. This bill was introduced by Representative Wiener of 
New York. This legislation makes it a federal offense for any seller 
making a ``delivery sale'' to fail to comply with all state excise tax, 
sales tax licensing, and tax sampling laws. I urge my colleagues to 
support this bill.

[[Page 12765]]

  I also thank my legislative director, Arthur D. Sidney.
  Every year tens of billions of cigarettes disappear into a lucrative 
black market for tobacco products and are trafficked throughout the 
world. Smuggling harms public health and minors by undermining tobacco 
tax policies. Smuggling also makes tax-free cigarettes available to 
minors who might otherwise quit smoking. It is reported that cigarette 
smuggling also helps finance criminal activity and terrorist 
organizations.
  By diverting cigarettes while they are in the wholesale distribution 
chain, large-scale smugglers generally avoid all taxes. Increasingly, 
cigarette smuggling is on the rise throughout the United States. The 
U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) has 
reported that the number of ATF tobacco smuggling investigations has 
increased from 10 in 1998 to 425 in 2005. Some of these investigations 
and convictions have occurred in Texas.
  Currently, the Jenkins Act, 15 USC 375, requires any person who sells 
and ships cigarettes across a state line to a buyer, other than a 
licensed distributor, to report the sale to the buyer's state tobacco 
collection officials. Compliance allows states to collect a cigarette 
excise tax. There are misdemeanor penalties for violation. Smugglers 
are circumventing the Jenkins Act by virtue of internet-based tobacco 
sales. Sales of tobacco through the internet have resulted in the loss 
of billions of dollars in tax revenue.
  The Contraband Cigarette Trafficking Act, 18 USC 2342, makes it 
illegal for persons to knowingly ship, transport, receive, possess, 
sell, distribute, or purchase contraband cigarettes or contraband 
smokeless tobacco. It also prohibits a person from knowingly making any 
false statement or representation with respect to information required 
by law to be kept in the records of any person who ships, sells, 
distributes cigarettes in excess of 10,000 in a single transaction.
  Cigarette smuggling is on the rise due to the internet and sales to 
and between Native American tribes and others. The PACT Act introduced 
by the Honorable Anthony Weiner makes it a federal offense for any 
seller to fail to comply with all state excise tax, sales tax 
licensing, and tax stamping laws. This bill also increases the Jenkins 
Act's existing penalties from a misdemeanor to a felony. It further 
empowers states to enforce the Jenkins Act against out of state sellers 
sending delivery sales into its territory by giving the Attorney 
General the power to seek injunctive relief and civil penalties. The 
Act prohibits the shipment of cigarettes and tobacco through the U.S. 
Postal Service and provides the ATF with the ability to inspect a 
distributor's business. Refusal to submit to inspection results in 
additional penalties. Internet sellers are required to verify a 
seller's age and identity through databases and the person accepting 
delivery must verify age and identity when signing for delivery.
  I urge my colleagues to support this bill.
  Mr. WEINER. I urge support for the bill, and I yield back the balance 
of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from New York (Mr. Weiner) that the House suspend the rules 
and pass the bill, H.R. 1676, as amended.
  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. POE of Texas. 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 and the 
Chair's prior announcement, further proceedings on this motion will be 
postponed.

                          ____________________