[House Report 116-260]
[From the U.S. Government Publishing Office]
116th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 116-260
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PREVENTING ONLINE SALES OF E-CIGARETTES TO CHILDREN ACT
_______
October 28, 2019.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Nadler, from the Committee on the Judiciary, submitted the
following
R E P O R T
[To accompany H.R. 3942]
The Committee on the Judiciary, to whom was referred the
bill (H.R. 3942) to apply requirements relating to delivery
sales of cigarettes to delivery sales of electronic nicotine
delivery systems, and for other purposes, having considered the
same, report favorably thereon without amendment and recommend
that the bill do pass.
CONTENTS
Page
Purpose and Summary.............................................. 1
Background and Need for the Legislation.......................... 2
Hearings......................................................... 4
Committee Consideration.......................................... 4
Committee Votes.................................................. 4
Committee Oversight Findings..................................... 4
New Budget Authority and Tax Expenditures and Congressional
Budget Office Cost Estimate.................................... 4
Duplication of Federal Programs.................................. 4
Performance Goals and Objectives................................. 5
Advisory on Earmarks............................................. 5
Section-by-Section Analysis...................................... 5
Changes in Existing Law Made by the Bill, as Reported............ 5
Purpose and Summary
H.R. 3942, the ``Preventing Online Sales of E-Cigarettes to
Children Act'' would amend current law to tackle problems that
have arisen from the online sale of e-cigarettes. Specifically,
the bill would amend the Jenkins Act to extend the statute that
regulates the ``delivery sale'' of cigarettes to minors to
cover e-cigarettes, broadly defined.\1\
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\1\Pub. L. No. 81-363, 63 Stat. 884 (1949), as amended by the
Prevent All Cigarette Trafficking Act, or ``PACT Act,'' Pub. L. No.
111-154, 124 Stat. 1087 (2010).
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Background and Need for the Legislation
Excise taxes are imposed on the sale of tobacco products at
the federal, state, and local levels.\2\ The Jenkins Act
regulates sales of tobacco products via interstate shipment.
Congress passed the Act in 1949 in part to reduce state tax
losses resulting from tax arbitrage through mail order
interstate cigarette sales.\3\ The Act requires an interstate
cigarette retailer to register with states in which it
advertises or sells cigarettes and to file a report with the
state tax administrator providing the quantity of cigarettes
sold to a customer, as well as the customer's name and
address.\4\ Violation of the Act is a federal felony punishable
by up to three years in prison.\5\
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\2\U.S. Dep't of Just., Off. of the Inspector Gen., Report Number
I-2009-005, The Bureau of Alcohol, Tobacco, Firearms and Explosives'
Efforts to Prevent the Diversion of Tobacco, at i (2009), available at
https://www.oversight.gov/report/doj/review-bureau-alcohol-tobacco-
firearms-and-explosives-efforts-prevent-diversion-tobacco.
\3\City of New York v. Smoke-Spirits.com, 541 F.3d 425, 433 (2d
Cir. 2008), rev'd sub nom. Hemi Group v. City of New York, 559 U.S. 1
(2010).
\4\15 U.S.C. Sec. 376 (2019).
\5\15 U.S.C. Sec. 377 (2019).
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Starting in the mid-1990s, the Internet became a popular
shopping destination for cigarette buyers because of the
ability to evade regulation. A 1997 survey identified 13 online
cigarette vendors.\6\ A decade later, that number had
multiplied to over 700.\7\ To address issues pertaining to
internet sales of cigarettes, Congress enacted the PACT Act.
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\6\Kurt M. Ribisi, et al., Are the Sales Practices of Cigarette
Vendors Good Enough to Prevent Sales to Minors?, Am. J. Pub. Health
940-941 (June 2002) (citation omitted).
\7\Christopher Banthin, Tobacco Control Legal Consortium, Public
Health Policy for Internet Cigarette Retailers, at 1 (2006).
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The PACT Act became law in 2010 with broad bipartisan
support. It passed the Senate by unanimous consent\8\ and then
the House by a vote of 387 to 25.\9\ The PACT Act was enacted
to help deal with problems stemming from the internet sales of
cigarettes. There were two principal problems with these
sales--deficiencies in verifying the age of purchasers to
prevent underage sales and evasion of state and local taxes on
the sales. The PACT Act addressed each of these problems. It
required internet sellers of cigarettes to ensure that delivery
agents checked identification in person on the delivery of the
product.\10\ It also required internet sellers to collect and
remit state and local taxes on their sales of cigarettes.\11\
In addition, the PACT Act increased the penalty for violation
of the Jenkins Act from a misdemeanor with a statutory maximum
of six months to a felony punishable by up to three years in
prison.\12\ The PACT Act also added civil penalties.\13\ The
PACT Act also made it possible to levy criminal fines under
title 18,\14\ in addition to any civil penalties.\15\
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\8\156 Cong. Rec. S1480-S1487 (daily ed. Mar. 11, 2010).
\9\See http://clerk.house.gov/evs/2010/roll124.xml.
\10\PACT Act, 124 Stat. 1091-92, Sec. 2A (codified at 15 U.S.C.
Sec. 376a(b)(4)).
\11\PACT Act, 124 Stat. 1093, Sec. 2A (codified at 15 U.S.C.
Sec. 376a(d)).
\12\PACT Act, 124 Stat. 1100, Sec. 3 (codified at 15 U.S.C.
Sec. 377(a)(1)) (``Except as provided in paragraph (2), whoever
knowingly violates this chapter shall be imprisoned not more than 3
years, fined under title 18, or both.'')
\13\PACT Act, 124 Stat. 1100-01, Sec. 3 (codified at 15 U.S.C.
Sec. 377). In the case of a delivery seller, civil penalties are the
greater of $5,000 (for a first violation) or $10,000 (for subsequent
violations), or 2% of the gross sales of cigarettes or smokeless
tobacco of the delivery seller during the 1-year period ending on the
date of the violation. 15 U.S.C. Sec. 377(b)(1)(A). In the case of a
common carrier or other delivery service, $2,500 for a first violation,
$5,000 for any violation within 1 year of a prior violation. 15 U.S.C.
Sec. 377(b)(1)(B).
\14\See 15 U.S.C. Sec. 377(a)(1).
\15\15 U.S.C. Sec. 377(b)(2) (``A civil penalty . . . shall be
imposed in addition to any criminal penalty . . . 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.'')
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The market for tobacco products has changed since enactment
of the PACT Act in 2010 and there are particular concerns about
the growing use of e-cigarettes among young people. According
to the Centers for Disease Control and Prevention (CDC), e-
cigarettes have been the most commonly used tobacco product
among youth since 2014.\16\ The Surgeon General has concluded
that e-cigarette use among youth and young adults is a public
health concern; exposure to nicotine during adolescence can
cause addiction and can harm the developing adolescent
brain.\17\ The 2018 National Youth Tobacco Survey (NYTS)\18\
found an alarming surge in the use of e-cigarettes by youth in
just one year: between 2017 and 2018, there was a 78% increase
in e-cigarette use among high school students and a 48%
increase among middle school students.\19\ This increase is
likely a result of the recent popularity of e-cigarettes shaped
like a USB flash drive; these products can be used discreetly,
have a high nicotine content, and come in flavors that appeal
to young people.\20\ Of the 5 million youth who used any
tobacco product in 2018, over 3.6 million youth used e-
cigarettes in 2018.\21\
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\16\See Karen A. Cullen et al., Ctrs. for Disease Control &
Prevention, Notes from the Field: Use of Electronic Cigarettes and Any
Tobacco Product Among Middle and High School Students--United States,
2011-2018, Morbidity and Mortality Weekly Report (Nov. 16, 2018),
available at https://www.cdc.gov/mmwr/volumes/67/wr/mm6745a5.htm.
\17\See U.S. Dep't Health & Human Svcs., Ctrs. for Disease Control
& Prevention, E-Cigarette Use Among Youth and Young Adults: A Report of
the Surgeon General (2016), at 5.
\18\The National Youth Tobacco Survey is a cross-sectional,
voluntary, school-based, self-administered, pencil-and-paper survey of
middle school and high school students. Id.
\19\See U.S. Food & Drug Admin., Youth Tobacco Use: Results from
the National Youth Tobacco Survey, available at https://www.fda.gov/
tobacco-products/youth-and-tobacco/youth-tobacco-use-results-national-
youth-tobacco-survey#2.
\20\Cullen, et al. supra note 19.
\21\See id.
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Alarmingly, in the summer of 2019, doctors began to see
hundreds of cases where patients--often previously healthy
young adults--showed up in emergency rooms, suddenly stricken
with dangerous respiratory damage. As of October 1, 2019, 1,080
lung injury cases associated with using e-cigarette or vaping
products had been reported to the CDC from 48 states and one
U.S. territory.\22\ Eighteen deaths have been confirmed in 15
states.\23\
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\22\Ctrs. for Disease Control & Prevention, Outbreak of Lung Injury
Associated with E-Cigarette Use, or Vaping (Oct. 3, 2019), available at
https://www.cdc.gov/tobacco/basic_information/e-cigarettes/severe-lung-
disease.html.
\23\Id.
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Data from the CDC, as well as the Food and Drug
Administration and the National Institutes of Health, suggest
that an overwhelming majority of young people who use e-
cigarettes do not get them from brick and mortar retail
establishments.\24\ Given the evidence that internet e-
cigarette vendors do not reliably screen underage purchasers,
this data suggests that many young people purchase these
products online. Curbing internet sales is, therefore, one way
for Congress to address the prevalent use of e-cigarettes by
young people. Because the Jenkins Act regulates the delivery
sale of cigarettes to minors--and the PACT Act extended the
Jenkins Act to cover Internet sales--the amendments proposed by
H.R. 3942 are an appropriate and effective vehicle to extend
coverage of the Jenkins Act to regulating the delivery sale of
e-cigarettes.
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\24\See Laura Kann, et al. Ctrs. for Disease Control & Prevention,
Youth Risk Behavior Surveillance--United States, 2017, Morbidity and
Mortality Weekly Report (Jun 15, 2018), available at https://
www.cdc.gov/mmwr/volumes/67/ss/ss6708a1.htm (among the students who
used ``electronic vapor products,'' only 13.6% had usually gotten their
products by buying them in a store during the 30 days before the
survey); U.S. Food & Drug Admin. and Nat'l Insts. of Health, Population
Assessment of Tobacco and Health (PATH) Study, DS3002 Wave 3: Youth/
Parent Questionnaire Data [Public-Use Files (ICPSR 36498)] (Sep. 28,
2018), available at https://www.icpsr.umich.edu/icpsrweb/NAHDAP/
studies/36498/datadocumentation# (question R03_YV1118: In past 30 days,
how you usually got your own [electronic nicotine products/cartridges/
e-liquid]; answer: 86.1% of respondents did not get them from a store).
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Hearings
The Committee held no hearings on H.R. 3942.
Committee Consideration
On Tuesday, October 16, 2019, the Committee met in open
session and ordered H.R. 3942 favorably reported by a voice
vote, a quorum being present.
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives is inapplicable because no recorded votes were
taken regarding this legislation.
Committee Oversight Findings
In compliance with clause 3(c)(1) of rule XIII of the Rules
of the House of Representatives, the Committee advises that the
findings and recommendations of the Committee, based on
oversight activities under clause 2(b)(1) of rule X of the
Rules of the House of Representatives, are incorporated in the
descriptive portions of this report.
New Budget Authority and Tax Expenditures and Congressional Budget
Office Cost Estimate
With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives and section
308(a) of the Congressional Budget Act of 1974 and with respect
to requirements of clause (3)(c)(3) of rule XIII of the Rules
of the House of Representatives and section 402 of the
Congressional Budget Act of 1974, the Committee has requested
but not received a cost estimate for this Report from the
Director of the Congressional Budget Office. The Committee has
requested but not received from the Director of the
Congressional Budget Office a statement as to whether this
Report contains any new budget authority, spending authority,
credit authority, or an increase or decrease in revenues or tax
expenditures.
Duplication of Federal Programs
No provision of H.R. 3942 establishes or reauthorizes a
program of the federal government known to be duplicative of
another federal program, a program that was included in any
report from the Government Accountability Office to Congress
pursuant to section 21 of Public Law 111-139, or a program
related to a program identified in the most recent Catalog of
Federal Domestic Assistance.
Performance Goals and Objectives
The Committee states that pursuant to clause 3(c)(4) of
rule XIII of the Rules of the House of Representatives, H.R.
3942 would amend the statute that regulates the ``delivery
sale'' of cigarettes to minors to cover e-cigarettes, thereby
protecting the health and safety of minors.
Advisory on Earmarks
In accordance with clause 9 of rule XXI of the Rules of the
House of Representatives, H.R. 3942 does not contain any
congressional earmarks, limited tax benefits, or limited tariff
benefits as defined in clause 9(d), 9(e), or 9(f) of rule XXI.
Section-by-Section Analysis
The following discussion describes the bill as reported by
the Committee.
Sec. 1. Short title. Section 1 sets forth the short title
of the bill as the ``Preventing Online Sales of E-Cigarettes to
Children Act.''
Sec 2. Amendments to the Jenkins Act. Section 2 would amend
the Jenkins Act by redefining the term ``cigarette'' to include
``an electronic nicotine delivery system.'' Section 2 would
further define ``electronic nicotine delivery system'' as a
``any electronic device that, through an aerosolized solution,
delivers nicotine, flavor, or any other substance to the user
inhaling the device and includes e-cigarettes, e-hookahs, e-
cigars, vape pens, advanced refillable personal vaporizers,
electronic pipes,'' and any component thereof. Section 2
includes exceptions for products approved by the FDA for sale
as tobacco cessation products or for other therapeutic
purposes, and marketed and sold solely for such purposes.
Section 2 would also mandate that any seller shipping a package
containing cigarettes or smokeless tobacco include on any bill
of lading and on the outside of the shipping package a label
stating that the contents may include nicotine. Section 2 would
take effect 90 days after the date of enactment of the bill.
Sec 3. Nonmailability of Electronic Nicotine Delivery
Systems. Section 3 would direct the U.S. Postal Service to
promulgate regulations to clarify the applicability of the
prohibition on mailing cigarettes under 18 U.S.C. Sec. 1716E to
electronic nicotine delivery systems. Section 3 would make 18
U.S.C. Sec. 1716E applicable to electronic nicotine delivery
systems on and after the date the U.S. Postal Service
promulgates these regulations.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, H.R. 3942, as reported, are shown as follows:
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, and existing law in which no
change is proposed is shown in roman):
ACT OF OCTOBER 19, 1949
AN ACT To assist States in collecting sales and use taxes on
cigarettes.
SECTION 1. DEFINITIONS.
As used in this Act, the following definitions apply:
(1) Attorney general.--The term ``attorney general'',
with respect to a State, means the attorney general or
other chief law enforcement officer of the State.
(2) Cigarette.--
(A) In general.--The term ``cigarette''--
(i) has the meaning given that term
in section 2341 of title 18, United
States Code; and
(ii) [includes roll-your-own tobacco]
includes--
(I) roll-your-own tobacco
(as defined in section 5702 of
the Internal Revenue Code of
1986)[.]; and
(II) an electronic nicotine
delivery system.
(B) Exception.--The term ``cigarette'' does
not include a cigar (as defined in section 5702
of the Internal Revenue Code of 1986).
(3) Common carrier.--The term ``common carrier''
means any person (other than a local messenger service
or the United States Postal Service) that holds itself
out to the general public as a provider for hire of the
transportation by water, land, or air of merchandise
(regardless of whether the person actually operates the
vessel, vehicle, or aircraft by which the
transportation is provided) between a port or place and
a port or place in the United States.
(4) Consumer.--The term ``consumer''--
(A) means any person that purchases
cigarettes or smokeless tobacco; and
(B) does not include any person lawfully
operating as a manufacturer, distributor,
wholesaler, or retailer of cigarettes or
smokeless tobacco.
(5) Delivery sale.--The term ``delivery sale'' means
any sale of cigarettes or smokeless tobacco to a
consumer if--
(A) the consumer submits the order for the
sale by means of a telephone or other method of
voice transmission, the mails, or the Internet
or other online service, or the seller is
otherwise not in the physical presence of the
buyer when the request for purchase or order is
made; or
(B) the cigarettes or smokeless tobacco are
delivered to the buyer by common carrier,
private delivery service, or other method of
remote delivery, or the seller is not in the
physical presence of the buyer when the buyer
obtains possession of the cigarettes or
smokeless tobacco.
(6) Delivery seller.--The term ``delivery seller''
means a person who makes a delivery sale.
(7) Electronic nicotine delivery system.--The term
``electronic nicotine delivery system''--
(A) means any electronic device that, through
an aerosolized solution, delivers nicotine,
flavor, or any other substance to the user
inhaling from the device;
(B) includes--
(i) an e-cigarette;
(ii) an e-hookah;
(iii) an e-cigar;
(iv) a vape pen;
(v) an advanced refillable personal
vaporizer;
(vi) an electronic pipe; and
(vii) any component, liquid, part, or
accessory of a device described in
subparagraph (A), without regard to
whether the component, liquid, part, or
accessory is sold separately from the
device; and
(C) does not include a product that is--
(i) approved by the Food and Drug
Administration for--
(I) sale as a tobacco
cessation product; or
(II) any other therapeutic
purpose; and
(ii) marketed and sold solely for a
purpose described in clause (i).
[(7)] (8) Indian country.--The term ``Indian
country''--
(A) has the meaning given that term in
section 1151 of title 18, United States Code,
except that within the State of Alaska that
term applies only to the Metlakatla Indian
Community, Annette Island Reserve; and
(B) includes any other land held by the
United States in trust or restricted status for
one or more Indian tribes.
[(8)] (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).
[(9)] (10) Interstate commerce.--
(A) In general.--The term ``interstate
commerce'' means commerce between a State and
any place outside the State, commerce between a
State and any Indian country in the State, or
commerce between points in the same State but
through any place outside the State or through
any Indian country.
(B) Into a state, place, or locality.--A
sale, shipment, or transfer of cigarettes or
smokeless tobacco that is made in interstate
commerce, as defined in this paragraph, shall
be deemed to have been made into the State,
place, or locality in which such cigarettes or
smokeless tobacco are delivered.
[(10)] (11) Person.--The term ``person'' means an
individual, corporation, company, association, firm,
partnership, society, State government, local
government, Indian tribal government, governmental
organization of such a government, or joint stock
company.
[(11)] (12) State.--The term ``State'' means each of
the several States of the United States, the District
of Columbia, the Commonwealth of Puerto Rico, or any
territory or possession of the United States.
[(12)] (13) Smokeless tobacco.--The term ``smokeless
tobacco'' means any finely cut, ground, powdered, or
leaf tobacco, or other product containing tobacco, that
is intended to be placed in the oral or nasal cavity or
otherwise consumed without being combusted.
[(13)] (14) Tobacco tax administrator.--The term
``tobacco tax administrator'' means the State, local,
or tribal official duly authorized to collect the
tobacco tax or administer the tax law of a State,
locality, or tribe, respectively.
[(14)] (15) Use.--The term ``use'' includes the
consumption, storage, handling, or disposal of
cigarettes or smokeless tobacco.
* * * * * * *
SEC. 2A. DELIVERY SALES.
(a) In General.--With respect to delivery sales into a
specific State and place, each delivery seller shall comply
with--
(1) the shipping requirements set forth in subsection
(b);
(2) the recordkeeping requirements set forth in
subsection (c);
(3) all State, local, tribal, and other laws
generally applicable to sales of cigarettes or
smokeless tobacco as if the delivery sales occurred
entirely within the specific State and place, including
laws imposing--
(A) excise taxes;
(B) licensing and tax-stamping requirements;
(C) restrictions on sales to minors; and
(D) other payment obligations or legal
requirements relating to the sale,
distribution, or delivery of cigarettes or
smokeless tobacco; and
(4) the tax collection requirements set forth in
subsection (d).
(b) Shipping and Packaging.--
(1) Required statement.--For any shipping package
containing cigarettes or smokeless tobacco, the
delivery seller shall include on the bill of lading, if
any, and on the outside of the shipping package, on the
same surface as the delivery address, a clear and
conspicuous statement providing as follows:
``CIGARETTES/NICOTINE/SMOKELESS TOBACCO: FEDERAL LAW
REQUIRES THE PAYMENT OF ALL APPLICABLE EXCISE TAXES,
AND COMPLIANCE WITH APPLICABLE LICENSING AND TAX-
STAMPING OBLIGATIONS''.
(2) Failure to label.--Any shipping package described
in paragraph (1) that is not labeled in accordance with
that paragraph shall be treated as nondeliverable
matter by a common carrier or other delivery service,
if the common carrier or other delivery service knows
or should know the package contains cigarettes or
smokeless tobacco. If a common carrier or other
delivery service believes a package is being submitted
for delivery in violation of paragraph (1), it may
require the person submitting the package for delivery
to establish that it is not being sent in violation of
paragraph (1) before accepting the package for
delivery. Nothing in this paragraph shall require the
common carrier or other delivery service to open any
package to determine its contents.
(3) Weight restriction.--A delivery seller shall not
sell, offer for sale, deliver, or cause to be delivered
in any single sale or single delivery any cigarettes or
smokeless tobacco weighing more than 10 pounds.
(4) Age verification.--
(A) In general.--A delivery seller who mails
or ships tobacco products--
(i) shall not sell, deliver, or cause
to be delivered any tobacco products to
a person under the minimum age required
for the legal sale or purchase of
tobacco products, as determined by the
applicable law at the place of
delivery;
(ii) shall use a method of mailing or
shipping that requires--
(I) the purchaser placing the
delivery sale order, or an
adult who is at least the
minimum age required for the
legal sale or purchase of
tobacco products, as determined
by the applicable law at the
place of delivery, to sign to
accept delivery of the shipping
container at the delivery
address; and
(II) the person who signs to
accept delivery of the shipping
container to provide proof, in
the form of a valid,
government-issued
identification bearing a
photograph of the individual,
that the person is at least the
minimum age required for the
legal sale or purchase of
tobacco products, as determined
by the applicable law at the
place of delivery; and
(iii) shall not accept a delivery
sale order from a person without--
(I) obtaining the full name,
birth date, and residential
address of that person; and
(II) verifying the
information provided in
subclause (I), through the use
of a commercially available
database or aggregate of
databases, consisting primarily
of data from government
sources, that are regularly
used by government and
businesses for the purpose of
age and identity verification
and authentication, to ensure
that the purchaser is at least
the minimum age required for
the legal sale or purchase of
tobacco products, as determined
by the applicable law at the
place of delivery.
(B) Limitation.--No database being used for
age and identity verification under
subparagraph (A)(iii) shall be in the
possession or under the control of the delivery
seller, or be subject to any changes or
supplementation by the delivery seller.
(c) Records.--
(1) In general.--Each delivery seller shall keep a
record of any delivery sale, including all of the
information described in section 2(a)(2), organized by
the State, and within the State, by the city or town
and by zip code, into which the delivery sale is so
made.
(2) Record retention.--Records of a delivery sale
shall be kept as described in paragraph (1) until the
end of the 4th full calendar year that begins after the
date of the delivery sale.
(3) Access for officials.--Records kept under
paragraph (1) shall be made available to tobacco tax
administrators of the States, to local governments and
Indian tribes that apply local or tribal taxes on
cigarettes or smokeless tobacco, to the attorneys
general of the States, to the chief law enforcement
officers of the local governments and Indian tribes,
and to the Attorney General of the United States in
order to ensure the compliance of persons making
delivery sales with the requirements of this Act.
(d) Delivery.--
(1) In general.--Except as provided in paragraph (2),
no delivery seller may sell or deliver to any consumer,
or tender to any common carrier or other delivery
service, any cigarettes or smokeless tobacco pursuant
to a delivery sale unless, in advance of the sale,
delivery, or tender--
(A) any cigarette or smokeless tobacco excise
tax that is imposed by the State in which the
cigarettes or smokeless tobacco are to be
delivered has been paid to the State;
(B) any cigarette or smokeless tobacco excise
tax that is imposed by the local government of
the place in which the cigarettes or smokeless
tobacco are to be delivered has been paid to
the local government; and
(C) any required stamps or other indicia that
the excise tax has been paid are properly
affixed or applied to the cigarettes or
smokeless tobacco.
(2) Exception.--Paragraph (1) does not apply to a
delivery sale of smokeless tobacco if the law of the
State or local government of the place where the
smokeless tobacco is to be delivered requires or
otherwise provides that delivery sellers collect the
excise tax from the consumer and remit the excise tax
to the State or local government, and the delivery
seller complies with the requirement.
(e) List of Unregistered or Noncompliant Delivery Sellers.--
(1) In general.--
(A) Initial list.--Not later than 90 days
after this subsection goes into effect under
the Prevent All Cigarette Trafficking Act of
2009, the Attorney General of the United States
shall compile a list of delivery sellers of
cigarettes or smokeless tobacco that have not
registered with the Attorney General of the
United States pursuant to section 2(a), or that
are otherwise not in compliance with this Act,
and--
(i) distribute the list to--
(I) the attorney general and
tax administrator of every
State;
(II) common carriers and
other persons that deliver
small packages to consumers in
interstate commerce, including
the United States Postal
Service; and
(III) any other person that
the Attorney General of the
United States determines can
promote the effective
enforcement of this Act; and
(ii) publicize and make the list
available to any other person engaged
in the business of interstate
deliveries or who delivers cigarettes
or smokeless tobacco in or into any
State.
(B) List contents.--To the extent known, the
Attorney General of the United States shall
include, for each delivery seller on the list
described in subparagraph (A)--
(i) all names the delivery seller
uses or has used in the transaction of
its business or on packages delivered
to customers;
(ii) all addresses from which the
delivery seller does or has done
business, or ships or has shipped
cigarettes or smokeless tobacco;
(iii) the website addresses, primary
e-mail address, and phone number of the
delivery seller; and
(iv) any other information that the
Attorney General of the United States
determines would facilitate compliance
with this subsection by recipients of
the list.
(C) Updating.--The Attorney General of the
United States shall update and distribute the
list described in subparagraph (A) at least
once every 4 months, and may distribute the
list and any updates by regular mail,
electronic mail, or any other reasonable means,
or by providing recipients with access to the
list through a nonpublic website that the
Attorney General of the United States regularly
updates.
(D) State, local, or tribal additions.--The
Attorney General of the United States shall
include in the list described in subparagraph
(A) any noncomplying delivery sellers
identified by any State, local, or tribal
government under paragraph (6), and shall
distribute the list to the attorney general or
chief law enforcement official and the tax
administrator of any government submitting any
such information, and to any common carriers or
other persons who deliver small packages to
consumers identified by any government pursuant
to paragraph (6).
(E) Accuracy and completeness of list of
noncomplying delivery sellers.--In preparing
and revising the list described in subparagraph
(A), the Attorney General of the United States
shall--
(i) use reasonable procedures to
ensure maximum possible accuracy and
completeness of the records and
information relied on for the purpose
of determining that a delivery seller
is not in compliance with this Act;
(ii) not later than 14 days before
including a delivery seller on the
list, make a reasonable attempt to send
notice to the delivery seller by
letter, electronic mail, or other means
that the delivery seller is being
placed on the list, which shall cite
the relevant provisions of this Act and
the specific reasons for which the
delivery seller is being placed on the
list;
(iii) provide an opportunity to the
delivery seller to challenge placement
on the list;
(iv) investigate each challenge
described in clause (iii) by contacting
the relevant Federal, State, tribal,
and local law enforcement officials,
and provide the specific findings and
results of the investigation to the
delivery seller not later than 30 days
after the date on which the challenge
is made; and
(v) if the Attorney General of the
United States determines that the basis
for including a delivery seller on the
list is inaccurate, based on incomplete
information, or cannot be verified,
promptly remove the delivery seller
from the list as appropriate and notify
each appropriate Federal, State,
tribal, and local authority of the
determination.
(F) Confidentiality.--The list described in
subparagraph (A) shall be confidential, and any
person receiving the list shall maintain the
confidentiality of the list and may deliver the
list, for enforcement purposes, to any
government official or to any common carrier or
other person that delivers tobacco products or
small packages to consumers. Nothing in this
section shall prohibit a common carrier, the
United States Postal Service, or any other
person receiving the list from discussing with
a listed delivery seller the inclusion of the
delivery seller on the list and the resulting
effects on any services requested by the listed
delivery seller.
(2) Prohibition on delivery.--
(A) In general.--Commencing on the date that
is 60 days after the date of the initial
distribution or availability of the list
described in paragraph (1)(A), no person who
receives the list under paragraph (1), and no
person who delivers cigarettes or smokeless
tobacco to consumers, shall knowingly complete,
cause to be completed, or complete its portion
of a delivery of any package for any person
whose name and address are on the list,
unless--
(i) the person making the delivery
knows or believes in good faith that
the item does not include cigarettes or
smokeless tobacco;
(ii) the delivery is made to a person
lawfully engaged in the business of
manufacturing, distributing, or selling
cigarettes or smokeless tobacco; or
(iii) the package being delivered
weighs more than 100 pounds and the
person making the delivery does not
know or have reasonable cause to
believe that the package contains
cigarettes or smokeless tobacco.
(B) Implementation of updates.--Commencing on
the date that is 30 days after the date of the
distribution or availability of any updates or
corrections to the list described in paragraph
(1)(A), all recipients and all common carriers
or other persons that deliver cigarettes or
smokeless tobacco to consumers shall be subject
to subparagraph (A) in regard to the
corrections or updates.
(3) Exemptions.--
(A) In general.--Subsection (b)(2) and any
requirements or restrictions placed directly on
common carriers under this subsection,
including subparagraphs (A) and (B) of
paragraph (2), shall not apply to a common
carrier that--
(i) is subject to a settlement
agreement described in subparagraph
(B); or
(ii) if a settlement agreement
described in subparagraph (B) to which
the common carrier is a party is
terminated or otherwise becomes
inactive, is administering and
enforcing policies and practices
throughout the United States that are
at least as stringent as the agreement.
(B) Settlement agreement.--A settlement
agreement described in this subparagraph--
(i) is a settlement agreement
relating to tobacco product deliveries
to consumers; and
(ii) includes--
(I) the Assurance of
Discontinuance entered into by
the Attorney General of New
York and DHL Holdings USA, Inc.
and DHL Express (USA), Inc. on
or about July 1, 2005, the
Assurance of Discontinuance
entered into by the Attorney
General of New York and United
Parcel Service, Inc. on or
about October 21, 2005, and the
Assurance of Compliance entered
into by the Attorney General of
New York and Federal Express
Corporation and FedEx Ground
Package Systems, Inc. on or
about February 3, 2006, if each
of those agreements is honored
throughout the United States to
block illegal deliveries of
cigarettes or smokeless tobacco
to consumers; and
(II) any other active
agreement between a common
carrier and a State that
operates throughout the United
States to ensure that no
deliveries of cigarettes or
smokeless tobacco shall be made
to consumers or illegally
operating Internet or mail-
order sellers and that any such
deliveries to consumers shall
not be made to minors or
without payment to the States
and localities where the
consumers are located of all
taxes on the tobacco products.
(4) Shipments from persons on list.--
(A) In general.--If a common carrier or other
delivery service delays or interrupts the
delivery of a package in the possession of the
common carrier or delivery service because the
common carrier or delivery service determines
or has reason to believe that the person
ordering the delivery is on a list described in
paragraph (1)(A) and that clauses (i), (ii),
and (iii) of paragraph (2)(A) do not apply--
(i) the person ordering the delivery
shall be obligated to pay--
(I) the common carrier or
other delivery service as if
the delivery of the package had
been timely completed; and
(II) if the package is not
deliverable, any reasonable
additional fee or charge levied
by the common carrier or other
delivery service to cover any
extra costs and inconvenience
and to serve as a disincentive
against such noncomplying
delivery orders; and
(ii) if the package is determined not
to be deliverable, the common carrier
or other delivery service shall offer
to provide the package and its contents
to a Federal, State, or local law
enforcement agency.
(B) Records.--A common carrier or other
delivery service shall maintain, for a period
of 5 years, any records kept in the ordinary
course of business relating to any delivery
interrupted under this paragraph and provide
that information, upon request, to the Attorney
General of the United States or to the attorney
general or chief law enforcement official or
tax administrator of any State, local, or
tribal government.
(C) Confidentiality.--Any person receiving
records under subparagraph (B) shall--
(i) use the records solely for the
purposes of the enforcement of this Act
and the collection of any taxes owed on
related sales of cigarettes and
smokeless tobacco; and
(ii) keep confidential any personal
information in the records not
otherwise required for such purposes.
(5) Preemption.--
(A) In general.--No State, local, or tribal
government, nor any political authority of 2 or
more State, local, or tribal governments, may
enact or enforce any law or regulation relating
to delivery sales that restricts deliveries of
cigarettes or smokeless tobacco to consumers by
common carriers or other delivery services on
behalf of delivery sellers by--
(i) requiring that the common carrier
or other delivery service verify the
age or identity of the consumer
accepting the delivery by requiring the
person who signs to accept delivery of
the shipping container to provide
proof, in the form of a valid,
government-issued identification
bearing a photograph of the individual,
that the person is at least the minimum
age required for the legal sale or
purchase of tobacco products, as
determined by either State or local law
at the place of delivery;
(ii) requiring that the common
carrier or other delivery service
obtain a signature from the consumer
accepting the delivery;
(iii) requiring that the common
carrier or other delivery service
verify that all applicable taxes have
been paid;
(iv) requiring that packages
delivered by the common carrier or
other delivery service contain any
particular labels, notice, or markings;
or
(v) prohibiting common carriers or
other delivery services from making
deliveries on the basis of whether the
delivery seller is or is not identified
on any list of delivery sellers
maintained and distributed by any
entity other than the Federal
Government.
(B) Relationship to other laws.--Except as
provided in subparagraph (C), nothing in this
paragraph shall be construed to nullify,
expand, restrict, or otherwise amend or
modify--
(i) section 14501(c)(1) or
41713(b)(4) of title 49, United States
Code;
(ii) any other restrictions in
Federal law on the ability of State,
local, or tribal governments to
regulate common carriers; or
(iii) any provision of State, local,
or tribal law regulating common
carriers that is described in section
14501(c)(2) or 41713(b)(4)(B) of title
49 of the United States Code.
(C) State laws prohibiting delivery sales.--
(i) In general.--Except as provided
in clause (ii), nothing in the Prevent
All Cigarette Trafficking Act of 2009,
the amendments made by that Act, or in
any other Federal statute shall be
construed to preempt, supersede, or
otherwise limit or restrict State laws
prohibiting the delivery sale, or the
shipment or delivery pursuant to a
delivery sale, of cigarettes or other
tobacco products to individual
consumers or personal residences.
(ii) Exemptions.--No State may
enforce against a common carrier a law
prohibiting the delivery of cigarettes
or other tobacco products to individual
consumers or personal residences
without proof that the common carrier
is not exempt under paragraph (3) of
this subsection.
(6) State, local, and tribal additions.--
(A) In general.--Any State, local, or tribal
government shall provide the Attorney General
of the United States with--
(i) all known names, addresses,
website addresses, and other primary
contact information of any delivery
seller that--
(I) offers for sale or makes
sales of cigarettes or
smokeless tobacco in or into
the State, locality, or tribal
land; and
(II) has failed to register
with or make reports to the
respective tax administrator as
required by this Act, or that
has been found in a legal
proceeding to have otherwise
failed to comply with this Act;
and
(ii) a list of common carriers and
other persons who make deliveries of
cigarettes or smokeless tobacco in or
into the State, locality, or tribal
land.
(B) Updates.--Any government providing a list
to the Attorney General of the United States
under subparagraph (A) shall also provide
updates and corrections every 4 months until
such time as the government notifies the
Attorney General of the United States in
writing that the government no longer desires
to submit information to supplement the list
described in paragraph (1)(A).
(C) Removal after withdrawal.--Upon receiving
written notice that a government no longer
desires to submit information under
subparagraph (A), the Attorney General of the
United States shall remove from the list
described in paragraph (1)(A) any persons that
are on the list solely because of the prior
submissions of the government of the list of
the government of noncomplying delivery sellers
of cigarettes or smokeless tobacco or a
subsequent update or correction by the
government.
(7) Deadline to incorporate additions.--The Attorney
General of the United States shall--
(A) include any delivery seller identified
and submitted by a State, local, or tribal
government under paragraph (6) in any list or
update that is distributed or made available
under paragraph (1) on or after the date that
is 30 days after the date on which the
information is received by the Attorney General
of the United States; and
(B) distribute any list or update described
in subparagraph (A) to any common carrier or
other person who makes deliveries of cigarettes
or smokeless tobacco that has been identified
and submitted by a government pursuant to
paragraph (6).
(8) Notice to delivery sellers.--Not later than 14
days before including any delivery seller on the
initial list described in paragraph (1)(A), or on an
update to the list for the first time, the Attorney
General of the United States shall make a reasonable
attempt to send notice to the delivery seller by
letter, electronic mail, or other means that the
delivery seller is being placed on the list or update,
with that notice citing the relevant provisions of this
Act.
(9) Limitations.--
(A) In general.--Any common carrier or other
person making a delivery subject to this
subsection shall not be required or otherwise
obligated to--
(i) determine whether any list
distributed or made available under
paragraph (1) is complete, accurate, or
up-to-date;
(ii) determine whether a person
ordering a delivery is in compliance
with this Act; or
(iii) open or inspect, pursuant to
this Act, any package being delivered
to determine its contents.
(B) Alternate names.--Any common carrier or
other person making a delivery subject to this
subsection--
(i) shall not be required to make any
inquiries or otherwise determine
whether a person ordering a delivery is
a delivery seller on the list described
in paragraph (1)(A) who is using a
different name or address in order to
evade the related delivery
restrictions; and
(ii) shall not knowingly deliver any
packages to consumers for any delivery
seller on the list described in
paragraph (1)(A) who the common carrier
or other delivery service knows is a
delivery seller who is on the list and
is using a different name or address to
evade the delivery restrictions of
paragraph (2).
(C) Penalties.--Any common carrier or person
in the business of delivering packages on
behalf of other persons shall not be subject to
any penalty under section 14101(a) of title 49,
United States Code, or any other provision of
law for--
(i) not making any specific delivery,
or any deliveries at all, on behalf of
any person on the list described in
paragraph (1)(A);
(ii) refusing, as a matter of regular
practice and procedure, to make any
deliveries, or any deliveries in
certain States, of any cigarettes or
smokeless tobacco for any person or for
any person not in the business of
manufacturing, distributing, or selling
cigarettes or smokeless tobacco; or
(iii) delaying or not making a
delivery for any person because of
reasonable efforts to comply with this
Act.
(D) Other limits.--Section 2 and subsections
(a), (b), (c), and (d) of this section shall
not be interpreted to impose any
responsibilities, requirements, or liability on
common carriers.
(f) Presumption.--For purposes of this Act, a delivery sale
shall be deemed to have occurred in the State and place where
the buyer obtains personal possession of the cigarettes or
smokeless tobacco, and a delivery pursuant to a delivery sale
is deemed to have been initiated or ordered by the delivery
seller.
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