H.R.5724 - Tobacco Free Internet for Kids Act of 2002107th Congress (2001-2002)
|Sponsor:||Rep. Meehan, Martin T. [D-MA-5] (Introduced 11/13/2002)|
|Committees:||House - Energy and Commerce|
|Latest Action:||House - 11/22/2002 Referred to the Subcommittee on Commerce, Trade and Consumer Protection. (All Actions)|
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Text: H.R.5724 — 107th Congress (2001-2002)All Information (Except Text)
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Introduced in House (11/13/2002)
[Congressional Bills 107th Congress] [From the U.S. Government Printing Office] [H.R. 5724 Introduced in House (IH)] 107th CONGRESS 2d Session H. R. 5724 To prevent the sale of tobacco products to minors, and the circumvention of State tobacco taxes, by means of electronic sales, and for other purposes. _______________________________________________________________________ IN THE HOUSE OF REPRESENTATIVES November 13, 2002 Mr. Meehan (for himself and Mr. Hansen) introduced the following bill; which was referred to the Committee on Energy and Commerce _______________________________________________________________________ A BILL To prevent the sale of tobacco products to minors, and the circumvention of State tobacco taxes, by means of electronic sales, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE. This Act may be cited as the ``Tobacco Free Internet for Kids Act of 2002''. SEC. 2. DEFINITIONS. In this Act: (1) The term ``adjusted for inflation'' means adjusted annually to account for inflation by using the percentage change in the consumer price index for all urban consumers (all items; United States city average) for the 12-month period ending on the June 30 preceding the beginning of the fiscal year for which the adjustment is made. (2) The term ``authorized State tobacco distributor'' means a person-- (A) that is authorized or otherwise licensed by a State to account for and pay excise or other taxes imposed by the State on tobacco products sold, distributed, or otherwise delivered in or into the State; and (B) that has complied with the accounting and payment requirements relating to such license or authorization with respect to the tobacco products involved. (3) The term ``carrier'' means any person who delivers transit tobacco products to consumers, including all private delivery services and the United States Postal Service, as defined by section 102 of title 39, United States Code. (4) The term ``consumer'' means a human being who purchases or arranges or attempts to purchase a tobacco product either for the consumer or on behalf of some other person. (5) The term ``minor'' means an individual who has not attained the age of 18 years or, if older, the minimum age for the purchase of a tobacco product under applicable State law or Indian tribal law. (6) The term ``person'' means any corporation, company, partnership, joint stock companies, foundation, association, organization, individual, State or local government, Indian tribal government, or any group thereof. (7) The term ``State'' includes the District of Columbia, the Commonwealth of Puerto Rico, and any other commonwealth, territory, or possession of the United States. (8) The term ``tobacco product'' has the meaning given that term in section 5702(c) of the Internal Revenue Code of 1986, and also includes any other product that contains tobacco and is meant for human consumption. (9) The term ``tobacco supplier'' means a person that distributes, sells, or otherwise supplies a tobacco product to a transit tobacco seller. (10)(A) The term ``transit tobacco sale'' means the sale or offering for sale of a tobacco product, in or affecting interstate commerce, in which-- (i) the product is not delivered directly to a consumer at the time and place of purchase; or (ii) the request for purchase is placed by a consumer or a person-- (I) through electronic means (including by telephone, facsimile, or the Internet); (II) by mail; or (III) through any other means in which the consumer is not in the transit tobacco seller's physical presence at the time the request for purchase is made. (B) A tobacco product sale that would otherwise qualify as a ``transit tobacco sale'' is not a ``transit tobacco sale'' for the purposes of this Act if the transit tobacco seller verifies that the purchaser is a person-- (i) in the business of lawfully selling tobacco products; (ii) seeking to purchase a tobacco product for use in such business; and (iii) licensed or otherwise authorized to sell tobacco products, as required by applicable Federal or State law; (11) The term ``transit tobacco seller'' means any person making a transit tobacco sale. SEC. 3. DUTIES OF TRANSIT TOBACCO SELLERS. (a) Prohibitions.-- (1) Sale to minors.--No transit tobacco seller may sell a tobacco product to a minor. (2) Sale without state authorization.--No person may sell a tobacco product in a transit tobacco sale, offer a tobacco product for sale in a transit tobacco sale, deliver a tobacco product in a transit tobacco sale, or otherwise operate as a transit tobacco seller, in, within, or into, a State unless such person is an authorized State tobacco distributor in such State. (b) Verification of Consumer Age, Identity, and Address.-- (1) Documentation of identity, age, and address.--Prior to accepting a tobacco product order in a transit tobacco sale, a transit tobacco seller shall verify the consumer's age, identity, and residential address by one of the following means: (A) Obtaining a copy of an official form of identification of the consumer that is a valid, unexpired identification card or other document-- (i) issued by a Federal, State, or local government; (ii) bearing a unique identification number; and (iii) providing the identified individual's-- (I) photograph; (II) name; (III) residential address; and (IV) date of birth. (B) Obtaining a statement from the consumer that provides the following: (i) A description of the type of official form of identification possessed by the consumer. (ii) The information described in subparagraph (A) from the official form of identification described in clause (i). (iii) An assurance that the information provided under clause (ii) is the same information appearing on the official form of identification. (C) Obtaining a written statement that includes the following: (i) The information described in subparagraph (A). (ii) A statement that the consumer displayed documentation that established the accuracy of the information provided in clause (i) to a notary public. (iii) A description of the documentation referred to in clause (ii). (iv) The signature of the consumer. (v) The signature of a notary public, as provided under applicable State law. (D) Using any other age and identity verification procedure established by the Secretary of the Treasury that employs new technologies to provide even more stringent and accurate identity and age verification methods than the other methods described in this paragraph. (2) Age and identity verification using database.--Each transit tobacco seller making a transit tobacco sale shall verify all identity, age, and residential address information provided by the consumer by use of a database, in accordance with section 7. (3) Consumer identification verification statement.--In a transit tobacco sale, the transit tobacco seller shall obtain a statement signed by the consumer (which may be a statement provided or obtained and signed electronically) that states the following: ``I affirm the accuracy of the identifying information I have provided in order to obtain a tobacco product in a transit tobacco sale. I understand that forging another person's signature, using false identification, or providing false information to obtain a tobacco product in a transit tobacco sale--especially when done by a minor, to provide a tobacco product to a minor, or to avoid applicable taxes--violates Federal law, may violate State law, and may subject the violator to monetary fines or imprisonment, or both.''. (c) Notices.-- (1) Notice to addressee of intended tobacco delivery.--Not less than 7 days before placing a tobacco product for delivery in the initial transit tobacco sale to a consumer, the transit tobacco seller shall send a notice addressed to the consumer at the residential address provided under subsection (b)(1). The notice shall provide each of the following: (A) A statement that the transit tobacco seller has received a request for purchase of a tobacco product to be placed by the consumer. (B) The date of the request for purchase, a description of the tobacco product to be delivered (including the quantity of such product), and the total price of the sale. (C) The minimum age (stated as a numeral) for purchase of tobacco products under applicable law. (D) A statement requesting that the recipient of the notice inform the transit tobacco seller if the recipient-- (i) is not the addressee; (ii) did not make the request for purchase; or (iii) is a minor. (E) The means by which the recipient may contact the transit tobacco seller, including-- (i) a mailing address; (ii) a toll-free telephone number; and (iii) an email address. (2) Effect of notification to transit tobacco seller of improper sale.--A transit tobacco seller that receives a notice provided under paragraph (1), pursuant to subparagraph (D) of such paragraph may not deliver or place for delivery any tobacco product related to that notice. (3) Notices to intended tobacco carriers.--When a transit tobacco seller places a tobacco product for delivery with a carrier, the transit tobacco seller shall provide to the carrier both of the following: (A) A notice that the transit tobacco seller is placing (or intends to place) for delivery by the carrier a tobacco product as part of a transit tobacco sale. (B) Documentation that the transit tobacco seller is an authorized State tobacco distributor in each State to which a parcel is placed for delivery with the carrier. (4) Notices to tobacco suppliers.--Before purchasing from a tobacco supplier a tobacco product that may be sold in a transit tobacco sale, a transit tobacco seller shall provide to the tobacco supplier each of the following: (A) A notice that the transit tobacco seller intends to sell the tobacco product in a transit tobacco sale. (B) Notice of each State to which the transit tobacco seller may deliver the tobacco product in a transit tobacco sale. (C) Documentation that the transit tobacco seller is an authorized State tobacco distributor in each State identified by the seller under subparagraph (B). (d) Methods of Payment.-- (1) Form of payment.--In a transit tobacco sale, the transit tobacco seller may accept payment from a consumer only by debit card, charge card, or credit card issued to the consumer identified under subsection (b). (2) Identification of tobacco transaction.--In a transit tobacco sale, the transit tobacco seller shall ensure that any receipt, invoice, or summary of a payment made in accordance with paragraph (1) provided by a debit card, credit card, or charge card company to a consumer clearly indicates (by including the use of the word ``tobacco'', ``cigarette'', or ``cigar'' and by other means) at least one of the following: (A) The transit tobacco seller is a seller of a tobacco product. (B) The transaction is a sale of a tobacco product. (3) Confirmation of address.--Prior to making a transit tobacco sale, a transit tobacco seller shall confirm that the billing address on record with the issuer of the debit card, credit card, or charge card used by the consumer to make the purchase is the same address as the residential address provided by the consumer pursuant to subsection (b). (e) Methods of Delivery.--A transit tobacco seller may not deliver or place for delivery a tobacco product unless the arrangements for delivery to a consumer provide for the following: (1) Addressee.--The addressee for such a delivery shall be the consumer. (2) Delivery address.--Delivery to the consumer shall be made only to one of the following: (A) The residential address of the consumer provided under subsection (b). (B) The workplace address of the consumer, if the transit tobacco seller verifies the following: (i) The address is the address of a business or governmental or other nonindividual entity. (ii) The address is not a post office box or other location used by the consumer primarily to facilitate, or otherwise accept, deliveries. (iii) The address is not more than 100 miles from the residential address of the consumer provided under subsection (b)(1). (3) Receipt.-- (A) Authorized receiver.--No delivery shall be made unless the addressee (or another individual present at the delivery address) provides to the person making the delivery-- (i) a signature acknowledging delivery; (ii) an official form of identification showing that the person accepting delivery is of minimum age for purchase of tobacco products under applicable law; and (iii) in the case of an individual other than the addressee, a signed statement, as follows: ``I know the addressee of the tobacco product delivery for which I am signing and I affirm that the addressee has reached the minimum legal age for purchase of tobacco products under applicable law.''. (B) Receiver age and identity verification.--The age and identity of the individual accepting delivery under subparagraph (A) shall be verified by the person making the delivery by using a database in accordance with section 7, whenever such verification is available to the Transit Seller or can be done by the Transit Seller at a cost of $2.50 (adjusted for inflation) or less for each such verification. (f) Limitations on Frequency, Content, and Amount.--A transit tobacco seller may not sell, deliver, or place for delivery one or more tobacco products unless-- (1) the consumer has not purchased a tobacco product from the transit tobacco seller within the preceding 7-day period; (2) the amount of tobacco product sold in a single transit tobacco sale does not exceed-- (A) the lesser of-- (i) 2,000 cigarettes; (ii) 200 cigars; (iii) 100 ounces of smokeless tobacco or pipe tobacco; or (iv) such amount of any tobacco product as the Secretary of the Treasury may, by regulation, establish in order to minimize-- (I) tax-avoidance by means of transit tobacco sales; or (II) illegal resale of tobacco products purchased in transit tobacco sales. (B) For purchases of more than one type of tobacco product, the total of the purchased amounts of each type of product, calculated as percentages of the maximum amounts permitted under subparagraph (A), must not exceed 100 percent. (g) Privacy of Consumer Personal Information.-- (1) Use of consumer personal information.--A transit tobacco seller may not use any information about a consumer obtained in the course of a transit tobacco sale for a purpose unrelated to the sale, unless-- (A) the consumer affirmatively grants authorization for such use; (B) the transit tobacco seller provides to a consumer-- (i) an option to revoke or otherwise limit an authorization granted under subparagraph (A); and (ii) clear and conspicuous notice of such an option in any communication permitted by or otherwise relating to the authorization under subparagraph (A); and (C) the consumer has not revoked or otherwise limited an authorization granted under subparagraph (A). (2) Other protections not affected.--This subsection may not be construed to limit the effect of any other provision of Federal or State law protecting the disclosure or use of consumer personal information. (h) Use of Internet Websites.--A transit tobacco seller may not offer a tobacco product for sale through an Internet website unless-- (1) a consumer cannot access any website page that offers tobacco products for sale or transacts any tobacco product sale until the transit tobacco seller has first satisfied the requirements of subsection (b) in relation to that consumer; and (2) any Internet website pages used by the transit tobacco to comply with the requirements of subsection (b) (including any website pages a consumer must access prior to accessing the age and identify verification website pages)-- (A) are not used for any other purpose than to fulfill the requirements of section 3(b) (or to provide access to the website pages used to comply with those requirements); and (B) consist only of nonmoving black text on a white background, with no graphics or other pictorial depictions. (i) Exceptions for Indian Tribe Tobacco Sales.--Paragraph (2) of subsection (a) and paragraphs (3) and (4) of subsection (c) do not apply to a transit tobacco sale in which the transit tobacco seller and the consumer are each-- (1) a member of, or owned by, the same Indian tribe (as such term is defined in section 4(e) of the Indian Self Determination and Education Assistance Act (25 U.S.C. 450b(e))); and (2) located in Indian country (as defined in section 1151 of title 18, United States Code) occupied by the same Indian tribe. SEC. 4. DUTIES OF CARRIERS. (a) Acceptance for Delivery.--A carrier may not knowingly accept a tobacco product for delivery from a transit tobacco seller unless the transit tobacco seller has provided the carrier with all notices required by section 3(c)(3). (b) Unauthorized Transit Tobacco Seller.--Notwithstanding a carrier's receipt of complete notice under section 3(c)(3), the carrier may not accept the parcel for delivery if the carrier has actual knowledge that the transit tobacco seller is not an authorized State tobacco distributor in the State to which such parcel is addressed. SEC. 5. DUTIES OF TOBACCO SUPPLIERS. A tobacco supplier shall not sell or otherwise supply a tobacco product to a transit tobacco seller if-- (1) the tobacco supplier has not received from the transit tobacco seller notice under section 3(c)(4); or (2) the tobacco supplier has actual knowledge that the transit tobacco seller is not an authorized State tobacco distributor in each State mentioned in the notice provided by the transit tobacco seller under section 3(c)(4). SEC. 6. RECORDKEEPING. (a) Maintenance.--(1) A transit tobacco seller in a transit tobacco sale and a tobacco supplier shall maintain records (which may be through electronic means) of the information described in section 3(c)(4) for not less than 5 years. (2) A transit tobacco seller shall maintain records in electronic form for not less than 5 years of all of its transit sales, segregated by State of delivery, that includes the information provided to the transit tobacco seller by each consumer through the transit tobacco sale process, including-- (A) the name and contact information of the consumer (including E-mail addresses for all transit sales made via the Internet), (B) the amount purchased, the price paid (including subtotals for any collected State or other taxes), (C) the delivery address, (D) the name of the carrier, and (E) all information provided by the consumer under section 3(b). (b) Access.--A transit tobacco seller in a transit tobacco sale and a tobacco supplier shall provide access to the records described in subsection (a) upon the request of a Federal, State, or local government official authorized to administer or enforce Federal, State, or local laws pertaining to-- (1) the sale of tobacco products to minors; or (2) taxes on tobacco products. SEC. 7. USE OF DATABASES. (a) Database Requirements.--Wherever in this Act verification of consumer information is required, such verification shall employ a database or aggregate of databases consisting of information obtained exclusively from government-issued identification that includes a photograph of the identified person (such as a State driver license or United States passport) whenever each such verification is available to the Transit Seller or can be done by the Transit Seller at a cost of $2.50 (adjusted for inflation) or less. (b) Alternative Requirement.--When the verification of subsection (a) is not available at a cost of $2.50 (adjusted for inflation) or less for each such verification, the verification of consumer information required by this Act shall either employ the verification of subsection (a), regardless of cost, or employ a database or aggregate of databases consisting of information obtained from government-issued identification (such as a State driver license or United States passport), State voter registration lists, or other government data sources that provide reliable name, residential address, and birth date or other age information from which it is possible to determine whether a person is not a minor. (c) Alternative Verification Database Nd Requirements.--The Secretary of the Treasury, in consultation with the Attorney General, may-- (1) establish an alternative or supplementary verification database consisting entirely of information from government- issued identification that includes a photograph of the identified person or some other personal identifier at least as reliable as the person's photograph (such as the person's fingerprints) that establishes the validity of the identification and its information to facilitate the verification required by this Act; and (2) offer the database described in paragraph (1) as an alternative to either or both of the databases described in subsections (b) and (c) or require its use instead of either or both of the databases described in subsections (b) and (c) for any or all of the verifications of consumer information required by this Act. SEC. 8. PENALTIES. (a) Civil Penalties.--A transit tobacco seller, carrier, or tobacco supplier found to have violated this Act, shall be liable to the United States for the profit made (or loss avoided) by reason of the transaction that is the subject of such violation, together with an additional amount equal to-- (1) not less than $500 or more than $1,000 for each separate violation found in the first enforcement action resulting in such a finding; and (2) not less than $1,000 nor more than $5,000 for each separate violation found in a subsequent enforcement action resulting in such a finding. The Secretary of the Treasury may bring an action in the appropriate United States district court to assess and collect penalties under this section, and such court may impose such penalties. In addition, such court may order the violator to pay any unpaid Federal, State, or local taxes associated with the tobacco product or the transaction that is the subject to such violation to the Federal, State, or local government to which such taxes are due and payable, and the court may provide such other equitable and legal relief as the court, in its discretion, deems appropriate. (b) Prohibition on Certain Activities.-- (1) Violations by sellers.--A transit tobacco seller found to have violated this Act shall be prohibited from selling tobacco products for the following periods: (A) For the first finding of one or more violations, a period of up to 10 years after the date of final determination of violation. (B) For a second or subsequent finding of one or more violations, permanently. (2) Violations by carriers.--A carrier found to have violated this Act shall be prohibited from delivering tobacco products in a transit tobacco sale into or within a State in which the carrier committed a violation of this Act for the following periods: (A) For the first finding of one or more violations, a period up to 10 years after the date of final determination of violation. (B) For a second or subsequent finding of one or more violations, a period from 1 year to permanently. (3) Violations by suppliers.--A tobacco supplier found to have violated this Act shall be prohibited from selling tobacco products to transit tobacco sellers for the following periods: (A) For the first finding of one or more violations, a period up to 10 years after the date of final determination of violation. (B) For a second or subsequent finding one or more violations, a period from 1 year to permanently. (c) Criminal Penalties.--A transit tobacco seller that knowingly violates this Act (or any person willfully participating in any such violation, including but not limited to any person who owns, controls, or manages the transit tobacco seller) shall be-- (1) fined under title 18, United States Code; or (2) imprisoned for-- (A) not more than 3 years for the first offense; and (B) not more than 5 years for a subsequent offense; or (3) both imprisoned and fined. SEC. 9. ENFORCEMENT. The Secretary of the Treasury, through the Bureau of Alcohol, Tobacco, and Firearms (or its successor agency), shall investigate and administratively enforce this Act and the Act of October 19, 1949 (15 U.S.C. 375 et seq.; Chapter 699; 63 Stat. 884; commonly known as the Jenkins Act). SEC. 10. ACTIONS BY STATES AND FEDERAL REPORTING. (a) Action Authorized.--The attorney general of a State, or an official or agency designated by a State, may bring, in an appropriate United States district court, a civil action against a transit tobacco seller, carrier, or tobacco supplier that violates this Act-- (1) to enjoin such violation; (2) to recover from a transit tobacco seller any taxes due to the State or to any of its political subdivisions under an applicable State or local law relating to tobacco products sold or delivered into or within the State by the transit tobacco seller; and (3) to obtain such other equitable or legal relief as the court, in its discretion, deems appropriate, including the prohibitions described in section 8(c) and a temporary or permanent injunction prohibiting carriers from delivering tobacco products to a transit tobacco seller that has violated any provision of this Act, or prohibiting tobacco product manufacturers, wholesalers, distributors, or retailers from selling tobacco products to a transit tobacco seller that violates any provision of this Act. (b) Notice.--The State shall serve prior written notice of any civil action brought under this section upon the Secretary of the Treasury and provide the Secretary with a copy of the complaint, except in any case where such prior notice is not feasible, in which case the State shall serve such notice immediately upon instituting such action, and the State shall notify the Secretary of the outcome or other resolution of any such civil actions. (c) Publication.--The Secretary of the Treasury shall promptly make freely available to the public (including through the Internet) information concerning all actions under this section or section 9, including the names of all parties to each action and the outcomes of all such actions. SEC. 11. RELATION TO OTHER LAWS. (a) More Stringent Laws Not Affected.--Nothing in this Act may be construed to limit or interfere with any other Federal, State, or local law that place additional, or more stringent, restrictions or penalties on transit tobacco sales. (b) Effect on Coordinated Law Enforcement Efforts.--Nothing in this chapter may be construed to inhibit or otherwise affect any coordinated law enforcement effort by one or more States or other jurisdictions, through interstate compact or otherwise, that-- (1) provides for the administration of tobacco product tax laws or laws pertaining to transit tobacco sales; (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) Business Entities Not Subject to Liability.--This Act does not create any new Federal requirements or potential liability of any kind for business entities providing communication technologies (e.g., phone companies or internet service providers), computer software or related services, or credit or debit card services; nor does this Act limit, amend, or expand any existing Federal requirements or potential liability for any such entities, except to the extent that those entities are Transit Sellers, Carriers, or Tobacco Suppliers. SEC. 12. SEVERABILITY. If any provision of this Act (or the application of that provision to particular persons or circumstances) is held invalid, the remainder of this Act (or the application of that provision to other persons or circumstances) shall not be affected. <all>