Text: S.1147 — 111th Congress (2009-2010)All Information (Except Text)

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Public Law No: 111-154 (03/31/2010)

 
[111th Congress Public Law 154]
[From the U.S. Government Printing Office]



[[Page 124 STAT. 1087]]

Public Law 111-154
111th Congress

                                 An Act


 
 To prevent tobacco smuggling, to ensure the collection of all tobacco 
  taxes, and for other purposes. <<NOTE: Mar. 31, 2010 -  [S. 1147]>> 

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, <<NOTE: Prevent All 
Cigarette Trafficking Act of 2009.>> 
SECTION 1. SHORT TITLE; FINDINGS; PURPOSES.

    (a) <<NOTE: 15 USC 375 note.>> Short Title.--This Act may be cited 
as the ``Prevent All Cigarette Trafficking Act of 2009'' or ``PACT 
Act''.

    (b) <<NOTE: 15 USC 375 note.>>  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

[[Page 124 STAT. 1088]]

            (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 <<NOTE: 15 USC 375.>>  and inserting the following:
``SECTION 1. DEFINITIONS.

    ``As used in this Act, the following definitions apply:
            ``(1) Attorney general.--The term `attorney general', with 
        respect to a State, means the attorney general or other chief 
        law enforcement officer of the State.
            ``(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 (as 
                      defined in section 5702 of the Internal Revenue 
                      Code of 1986).
                    ``(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--

[[Page 124 STAT. 1089]]

                    ``(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) 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) 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) 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) 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) State.--The term `State' means each of the several 
        States of the United States, the District of Columbia, the 
        Commonwealth of Puerto Rico, or any territory or possession of 
        the United States.
            ``(12) Smokeless tobacco.--The term `smokeless tobacco' 
        means any finely cut, ground, powdered, or leaf tobacco, or 
        other product containing tobacco, that is intended to be placed 
        in the oral or nasal cavity or otherwise consumed without being 
        combusted.
            ``(13) Tobacco tax administrator.--The term `tobacco tax 
        administrator' means the State, local, or tribal official duly 
        authorized to collect the tobacco tax or administer the tax law 
        of a State, locality, or tribe, respectively.

[[Page 124 STAT. 1090]]

            ``(14) Use.--The term `use' includes the consumption, 
        storage, handling, or disposal of cigarettes or smokeless 
        tobacco.''.

    (b) Reports to State Tobacco Tax Administrators.--Section 2 of the 
Jenkins Act (15 U.S.C. 376) is amended--
            (1) by striking ``cigarettes'' each place it appears and 
        inserting ``cigarettes or smokeless tobacco'';
            (2) in subsection (a)--
                    (A) in the matter preceding paragraph (1)--
                          (i) by inserting ``Contents.--'' after 
                      ``(a)'';
                          (ii) by striking ``or transfers'' and 
                      inserting ``, transfers, or ships'';
                          (iii) by inserting ``, locality, or Indian 
                      country of an Indian tribe'' after ``a State'';
                          (iv) by striking ``to other than a distributor 
                      licensed by or located in such State,''; and
                          (v) by striking ``or transfer and shipment'' 
                      and inserting ``, transfer, or shipment'';
                    (B) in paragraph (1)--
                          (i) by striking ``with the tobacco tax 
                      administrator of the State'' and inserting ``with 
                      the Attorney General of the United States and with 
                      the tobacco tax administrators of the State and 
                      place''; and
                          (ii) by striking ``; and'' and inserting the 
                      following: ``, as well as telephone numbers for 
                      each place of business, a principal electronic 
                      mail address, any website addresses, and the name, 
                      address, and telephone number of an agent in the 
                      State authorized to accept service on behalf of 
                      the 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 the 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 the 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

[[Page 124 STAT. 1091]]

any personal information in the 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. <<NOTE: 15 USC 376a.>> 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/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

[[Page 124 STAT. 1092]]

                      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.

[[Page 124 STAT. 1093]]

    ``(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 <<NOTE: Deadline.>>  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;

[[Page 124 STAT. 1094]]

                          ``(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 <<NOTE: Deadlines.>> 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 <<NOTE: Distribution.>>  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) <<NOTE: Deadline. Notice.>>  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) <<NOTE: Deadline.>>  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) <<NOTE: Determination. Notification.>>  
                      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

[[Page 124 STAT. 1095]]

                      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) <<NOTE: Effective dates.>>  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--

[[Page 124 STAT. 1096]]

                          ``(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.-- <<NOTE: Time period.>> 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

[[Page 124 STAT. 1097]]

                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.--

[[Page 124 STAT. 1098]]

                          ``(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) <<NOTE: Lists.>>  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.-- 
                <<NOTE: Deadlines. Notification.>> 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

[[Page 124 STAT. 1099]]

                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 <<NOTE: Deadline.>>  
        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.

[[Page 124 STAT. 1100]]

                    ``(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 <<NOTE: 15 USC 377.>> and inserting the following:
``SEC. 3. PENALTIES.

    ``(a) Criminal Penalties.--
            ``(1) In general.--Except as provided in paragraph (2), 
        whoever knowingly violates this Act shall be imprisoned for 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 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 
                      the delivery seller 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

[[Page 124 STAT. 1101]]

                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 <<NOTE: 15 USC 378.>>  and inserting the following:
``SEC. 4. ENFORCEMENT.

    ``(a) <<NOTE: Courts.>>  In General.--The United States district 
courts shall have jurisdiction to prevent and restrain violations of 
this Act and to provide other appropriate injunctive or equitable 
relief, including money damages, for the violations.

    ``(b) Authority of the Attorney General.--The Attorney General of 
the United States shall administer and enforce 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 of the United States or a United States

[[Page 124 STAT. 1102]]

        attorney, who shall take appropriate actions to enforce 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 Federal Government in enforcing this 
                Act shall be transferred into the PACT Anti-Trafficking 
                Fund and shall be available to the Attorney General of 
                the United States for purposes of enforcing this Act and 
                other laws relating to contraband tobacco products.
                    ``(B) Allocation of funds.--Of the amount available 
                to the Attorney General of the United States 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 United States of the action.
            ``(2) State, local, and tribal actions.--It is the sense of 
        Congress that the attorney general of any State, or chief law 
        enforcement officer of any locality or tribe, that commences a 
        civil action under this section should inform the Attorney 
        General of the United States of the action.

    ``(f) Public Notice.--

[[Page 124 STAT. 1103]]

            ``(1) In general.--The Attorney General of the United States 
        shall make available to the public, by posting 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 of the United States, under 
        this section, including information regarding the resolution of 
        the enforcement actions and how the Attorney General of the 
        United States has responded to referrals of evidence of 
        violations pursuant to subsection (c)(2).
            ``(2) Reports to congress.--Not later than 1 year after the 
        date of enactment of the Prevent All Cigarette Trafficking Act 
        of 2009, and every year thereafter until the date that is 5 
        years after such date of enactment, the Attorney General of the 
        United States shall submit to Congress 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.--
            ``(1) In general.--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 paragraph.
            ``(2) Reasonable cause.--For the purposes of this subsection 
        reasonable cause includes--
                    ``(A) a statement on a publicly available website, 
                or an advertisement, by any person that the person will 
                mail matter which is nonmailable under this section in 
                return for payment; or
                    ``(B) the fact that the person is on the list 
                created under section 2A(e) of the Jenkins Act.

    ``(b) Exceptions.--
            ``(1) Cigars.--Subsection (a) shall not apply to cigars (as 
        defined in section 5702(a) of the Internal Revenue Code of 
        1986).
            ``(2) <<NOTE: Alaska. Hawaii.>>  Geographic exception.--
        Subsection (a) shall not apply to mailings within the State of 
        Alaska or within the State of Hawaii.
            ``(3) Business purposes.--
                    ``(A) In general.--Subsection (a) shall not apply to 
                tobacco products mailed only--
                          ``(i) 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
                          ``(ii) for regulatory purposes between any 
                      business described in clause (i) and an agency of 
                      the Federal Government or a State government.

[[Page 124 STAT. 1104]]

                    ``(B) Rules.--
                          ``(i) <<NOTE: Deadline.>>  In general.--Not 
                      later than 180 days after the date of enactment of 
                      the Prevent All Cigarette Trafficking Act of 2009, 
                      the Postmaster General shall issue a final rule 
                      which shall establish the standards and 
                      requirements that apply to all mailings described 
                      in subparagraph (A).
                          ``(ii) Contents.--The final rule issued under 
                      clause (i) shall require--
                                    ``(I) the United States Postal 
                                Service to verify that any person 
                                submitting an otherwise nonmailable 
                                tobacco product into the mails as 
                                authorized under this paragraph is a 
                                business or government agency permitted 
                                to make a mailing under this paragraph;
                                    ``(II) the United States Postal 
                                Service to ensure that any recipient of 
                                an otherwise nonmailable tobacco product 
                                sent through the mails under this 
                                paragraph is a business or government 
                                agency that may lawfully receive the 
                                product;
                                    ``(III) that any mailing described 
                                in subparagraph (A) shall be sent 
                                through the systems of the United States 
                                Postal Service that provide for the 
                                tracking and confirmation of the 
                                delivery;
                                    ``(IV) that the identity of the 
                                business or government entity submitting 
                                the mailing containing otherwise 
                                nonmailable tobacco products for 
                                delivery and the identity of the 
                                business or government entity receiving 
                                the mailing are clearly set forth on the 
                                package;
                                    ``(V) <<NOTE: Time period.>>  the 
                                United States Postal Service to maintain 
                                identifying information described in 
                                subclause (IV) during the 3-year period 
                                beginning on the date of the mailing and 
                                make the information available to the 
                                Postal Service, the Attorney General of 
                                the United States, and to persons 
                                eligible to bring enforcement actions 
                                under section 3(d) of the Prevent All 
                                Cigarette Trafficking Act of 2009;
                                    ``(VI) that any mailing described in 
                                subparagraph (A) be marked with a United 
                                States Postal Service label or marking 
                                that makes it clear to employees of the 
                                United States Postal Service 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; and
                                    ``(VII) that any mailing described 
                                in subparagraph (A) be delivered only to 
                                a verified employee of the recipient 
                                business or government agency, who is 
                                not a minor and who shall be required to 
                                sign for the mailing.
                    ``(C) Definition.--In this paragraph, the term 
                `minor' means an individual who is less than the minimum 
                age required for the legal sale or purchase of tobacco 
                products

[[Page 124 STAT. 1105]]

                as determined by applicable law at the place the 
                individual is located.
            ``(4) Certain individuals.--
                    ``(A) In general.--Subsection (a) shall not apply to 
                tobacco products mailed by individuals who are not 
                minors for noncommercial purposes, including the return 
                of a damaged or unacceptable tobacco product to the 
                manufacturer.
                    ``(B) Rules.--
                          ``(i) <<NOTE: Deadline.>>  In general.--Not 
                      later than 180 days after the date of enactment of 
                      the Prevent All Cigarette Trafficking Act of 2009, 
                      the Postmaster General shall issue a final rule 
                      which shall establish the standards and 
                      requirements that apply to all mailings described 
                      in subparagraph (A).
                          ``(ii) Contents.--The final rule issued under 
                      clause (i) shall require--
                                    ``(I) the United States Postal 
                                Service to verify that any person 
                                submitting an otherwise nonmailable 
                                tobacco product into the mails as 
                                authorized under this paragraph is the 
                                individual identified on the return 
                                address label of the package and is not 
                                a minor;
                                    ``(II) for a mailing to an 
                                individual, the United States Postal 
                                Service to require the person submitting 
                                the otherwise nonmailable tobacco 
                                product into the mails as authorized by 
                                this paragraph to affirm that the 
                                recipient is not a minor;
                                    ``(III) that any package mailed 
                                under this paragraph shall weigh not 
                                more than 10 ounces;
                                    ``(IV) that any mailing described in 
                                subparagraph (A) shall be sent through 
                                the systems of the United States Postal 
                                Service that provide for the tracking 
                                and confirmation of the delivery;
                                    ``(V) that a mailing described in 
                                subparagraph (A) shall not be delivered 
                                or placed in the possession of any 
                                individual who has not been verified as 
                                not being a minor;
                                    ``(VI) for a mailing described in 
                                subparagraph (A) to an individual, that 
                                the United States Postal Service shall 
                                deliver the package only to a recipient 
                                who is verified not to be a minor at the 
                                recipient address or transfer it for 
                                delivery to an Air/Army Postal Office or 
                                Fleet Postal Office number designated in 
                                the recipient address; and
                                    ``(VII) that no person may initiate 
                                more than 10 mailings described in 
                                subparagraph (A) during any 30-day 
                                period.
                    ``(C) Definition.--In this paragraph, the term 
                `minor' means an individual who is less than 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.
            ``(5) Exception for mailings for consumer testing by 
        manufacturers.--
                    ``(A) In general.--Subject to subparagraph (B), 
                subsection (a) shall not preclude a legally operating 
                cigarette manufacturer or a legally authorized agent of 
                a legally

[[Page 124 STAT. 1106]]

                operating cigarette manufacturer from using the United 
                States Postal Service to mail cigarettes to verified 
                adult smoker solely for consumer testing purposes, if--
                          ``(i) the cigarette manufacturer has a permit, 
                      in good standing, issued under section 5713 of the 
                      Internal Revenue Code of 1986;
                          ``(ii) the package of cigarettes mailed under 
                      this paragraph contains not more than 12 packs of 
                      cigarettes (240 cigarettes);
                          ``(iii) the recipient does not receive more 
                      than 1 package of cigarettes from any 1 cigarette 
                      manufacturer under this paragraph during any 30-
                      day period;
                          ``(iv) all taxes on the cigarettes mailed 
                      under this paragraph levied by the State and 
                      locality of delivery are paid to the State and 
                      locality before delivery, and tax stamps or other 
                      tax-payment indicia are affixed to the cigarettes 
                      as required by law; and
                          ``(v)(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 agent of the manufacturer 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.
                    ``(B) Limitations.--Subparagraph (A) shall not--
                          ``(i) 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
                          ``(ii) permit a manufacturer, directly or 
                      through a legally authorized agent, to mail 
                      cigarettes in any calendar year in a total amount 
                      greater than 1 percent of the total cigarette 
                      sales of the manufacturer in the United States 
                      during the calendar year before the date of the 
                      mailing.
                    ``(C) Rules.--
                          ``(i) <<NOTE: Deadline.>>  In general.--Not 
                      later than 180 days after the date of enactment of 
                      the Prevent All Cigarette Trafficking Act of 2009, 
                      the Postmaster General shall issue a final rule 
                      which shall establish the standards and 
                      requirements that apply to all mailings described 
                      in subparagraph (A).
                          ``(ii) Contents.--The final rule issued under 
                      clause (i) shall require--
                                    ``(I) <<NOTE: Verification.>>  the 
                                United States Postal Service to verify 
                                that any person submitting a tobacco 
                                product into the mails under this 
                                paragraph is a legally operating 
                                cigarette manufacturer permitted to make 
                                a mailing under this paragraph, or an 
                                agent legally authorized by the legally 
                                operating cigarette manufacturer to 
                                submit the tobacco product into the 
                                mails on behalf of the manufacturer;
                                    ``(II) the legally operating 
                                cigarette manufacturer submitting the 
                                cigarettes into the mails under this 
                                paragraph to affirm that--

[[Page 124 STAT. 1107]]

                                            ``(aa) the manufacturer or 
                                        the legally authorized agent of 
                                        the manufacturer has verified 
                                        that the recipient is an adult 
                                        established smoker;
                                            ``(bb) the recipient has not 
                                        made any payment for the 
                                        cigarettes;
                                            ``(cc) the recipient has 
                                        signed a written statement that 
                                        is in effect indicating that the 
                                        recipient wishes to receive the 
                                        mailings; and
                                            ``(dd) the manufacturer or 
                                        the legally authorized agent of 
                                        the manufacturer has offered the 
                                        opportunity for the recipient to 
                                        withdraw the written statement 
                                        described in item (cc) not less 
                                        frequently than once in every 3-
                                        month period;
                                    ``(III) the legally operating 
                                cigarette manufacturer or the legally 
                                authorized agent of the manufacturer 
                                submitting the cigarettes into the mails 
                                under this paragraph to affirm that any 
                                package mailed under this paragraph 
                                contains not 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) that any mailing described in 
                                subparagraph (A) shall be sent through 
                                the systems of the United States Postal 
                                Service that provide for the tracking 
                                and confirmation of the delivery;
                                    ``(V) <<NOTE: Records. Time 
                                period.>>  the United States Postal 
                                Service to maintain records relating to 
                                a mailing described in subparagraph (A) 
                                during the 3-year period beginning on 
                                the date of the mailing and make the 
                                information available to persons 
                                enforcing this section;
                                    ``(VI) that any mailing described in 
                                subparagraph (A) be marked with a United 
                                States Postal Service label or marking 
                                that makes it clear to employees of the 
                                United States Postal Service 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; and
                                    ``(VII) the United States Postal 
                                Service shall deliver a mailing 
                                described in subparagraph (A) only to 
                                the named recipient and only after 
                                verifying that the recipient is an 
                                adult.
                    ``(D) Definitions.--In this paragraph--
                          ``(i) the term `adult' means an individual who 
                      is not less than 21 years of age; and
                          ``(ii) 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.
            ``(6) Federal government agencies.--An agency of the Federal 
        Government involved in the consumer testing of tobacco

[[Page 124 STAT. 1108]]

        products solely for public health purposes may mail cigarettes 
        under the same requirements, restrictions, and rules and 
        procedures that apply to consumer testing mailings of cigarettes 
        by manufacturers under paragraph (5), except that the agency 
        shall not 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 seized and 
forfeited under this subsection shall be destroyed or retained by the 
Federal Government for the detection or prosecution of crimes or related 
investigations and then destroyed.
    ``(d) Additional Penalties.--In addition to any other fines and 
penalties under this title for violations of this section, any person 
violating this section shall be subject to an additional civil penalty 
in the amount equal to 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 is 
nonmailable matter under this section shall be fined under this title, 
imprisoned not more than 1 year, or both.
    ``(f) Use of Penalties.--There is established a separate account in 
the Treasury, to be known as the `PACT Postal Service Fund'. 
Notwithstanding any other provision of law, an amount equal to 50 
percent of any criminal fines, civil penalties, or other monetary 
penalties collected by the Federal Government in enforcing this section 
shall be transferred into the PACT Postal Service Fund and shall be 
available to the Postmaster General for the purpose of enforcing this 
subsection.
    ``(g) Coordination of Efforts.--The Postmaster General shall 
cooperate and coordinate efforts to enforce this section with related 
enforcement activities of any other Federal agency or agency of any 
State, local, or tribal government, whenever appropriate.
    ``(h) Actions by State, Local, or Tribal Governments Relating to 
Certain Tobacco Products.--
            ``(1) In general.--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 this section. 
        Appropriate relief includes injunctive and equitable relief and 
        damages equal to the amount of unpaid taxes on tobacco products 
        mailed in violation of this section to addressees in that State, 
        locality, or tribal land.
            ``(2) Sovereign immunity.--Nothing in this subsection shall 
        be deemed to abrogate or constitute a waiver of any sovereign 
        immunity of a State or local government or Indian tribe against 
        any unconsented lawsuit under paragraph (1), or otherwise to 
        restrict, expand, or modify any sovereign immunity of a State or 
        local government or Indian tribe.
            ``(3) Attorney general referral.--A State, through its 
        attorney general, or a local government or Indian tribe that

[[Page 124 STAT. 1109]]

        levies an excise tax on tobacco products, through its chief law 
        enforcement officer, may provide evidence of a violation of this 
        section for commercial purposes by any person not subject to 
        State, local, or tribal government enforcement actions for 
        violations of this section to the Attorney General of the United 
        States, who shall take appropriate actions to enforce this 
        section.
            ``(4) Nonexclusivity of remedies.--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.
            ``(5) Other enforcement actions.--Nothing in this subsection 
        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 the State.

    ``(i) Definition.--In this section, the term `State' has the meaning 
given that term in section 1716(k).''.
    (b) Clerical Amendment.--The table of sections for chapter 83 of 
title 18 is amended by inserting after the item relating to section 
1716D the following:

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

SEC. 4. 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 the person under this chapter; or
            ``(B) any cigarettes or smokeless tobacco kept or stored by 
        the person at the premises.

    ``(2) <<NOTE: Courts.>>  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. 5. <<NOTE: 15 USC 375 note.>>  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

[[Page 124 STAT. 1110]]

        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; or
            (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 United States of this Act or 
an amendment made by this Act 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.
    (f) Definitions.--In this section--
            (1) the term ``Indian country'' has the meaning given that 
        term in section 1 of the Jenkins Act, as amended by this Act; 
        and
            (2) the term ``tribal enterprise'' means any business 
        enterprise, regardless of whether incorporated or unincorporated 
        under Federal or tribal law, of an Indian tribe or group of 
        Indian tribes.
SEC. 6. <<NOTE: 15 USC 375 note.>>  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.

[[Page 124 STAT. 1111]]

    (b) BATFE Authority.--The amendments made by section 4 shall take 
effect on the date of enactment of this Act.
SEC. 7. <<NOTE: 15 USC 375 note.>>  SEVERABILITY.

    If any provision of this Act, or any amendment made by this Act, or 
the application 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. 8. 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.

    Approved March 31, 2010.

LEGISLATIVE HISTORY--S. 1147:
---------------------------------------------------------------------------

CONGRESSIONAL RECORD, Vol. 156 (2010):
            Mar. 11, considered and passed Senate.
            Mar. 17, considered and passed House.

                                  <all>