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110th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     110-711

======================================================================



 
               NONMAILABILITY OF CERTAIN TOBACCO PRODUCTS

                                _______
                                

 June 12, 2008.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

  Mr. Waxman, from the Committee on Oversight and Government Reform, 
                        submitted the following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 5912]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Oversight and Government, to whom was 
referred the bill (H.R. 5912) to amend title 39, United States 
Code, to make cigarettes and certain other tobacco products 
nonmailable, and for other purposes, having considered the 
same, report favorably thereon with an amendment and recommend 
that the bill as amended do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     3
Background and Need for Legislation..............................     3
Legislative History..............................................     4
Section-by-Section...............................................     5
Explanation of Amendments........................................     6
Committee Consideration..........................................     7
Rollcall Votes...................................................     8
Application of Law to the Legislative Branch.....................    10
Statement of Oversight Findings and Recommendations of the 
  Committee......................................................    10
Statement of General Performance Goals and Objectives............    10
Constitutional Authority Statement...............................    10
Federal Advisory Committee Act...................................    10
Unfunded Mandate Statement.......................................    10
Earmark Identification...........................................    10
Committee Estimate...............................................    10
Budget Authority and Congressional Budget Office Cost Estimate...    11
Changes in Existing Law Made by the Bill, as Reported............    12
Minority Views...................................................    17

  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. NONMAILABILITY OF CERTAIN TOBACCO PRODUCTS.

  (a) In General.--Chapter 30 of title 39, United States Code, is 
amended by inserting after section 3002a the following:

``Sec. 3002b. Nonmailability of certain tobacco products

  ``(a) In General.--Cigarettes, smokeless tobacco, and roll-your-own-
tobacco--
          ``(1) are nonmailable matter;
          ``(2) shall not be--
                  ``(A) deposited in the mails; or
                  ``(B) carried or delivered through the mails; and
          ``(3) shall be disposed of as the Postal Service directs.
  ``(b) Civil Penalty.--
          ``(1) In general.--Any person who violates subsection 
        (a)(2)(A) shall be liable to the United States for a civil 
        penalty in an amount not to exceed $100,000 for each violation.
          ``(2) Hearings.--
                  ``(A) In general.--The Postal Service may determine 
                that a person has violated subsection (a)(2)(A) only 
                after notice and an opportunity for a hearing. 
                Proceedings under this paragraph shall be conducted in 
                accordance with section 3001(m).
                  ``(B) Penalty considerations.--In determining the 
                amount of a civil penalty under this paragraph, the 
                Postal Service shall consider--
                          ``(i) the nature, circumstances, extent, and 
                        gravity of the violation;
                          ``(ii) with respect to the violator, the 
                        degree of culpability, ability to pay, and any 
                        history of prior violations; and
                          ``(iii) such other matters as justice may 
                        require.
          ``(3) Civil actions to collect.--The Postal Service may bring 
        a civil action in an appropriate district court of the United 
        States, in accordance with section 409(g)(2), to collect a 
        civil penalty under this section.
          ``(4) Disposition of amounts.--Amounts received in payment of 
        any civil penalties under this subsection shall be deposited as 
        miscellaneous receipts in the Treasury of the United States.
  ``(c) Orders.--Upon evidence satisfactory to the Postal Service that 
any person is, for commercial or money-making purposes, engaged in the 
sending of mail matter which is nonmailable under this section, the 
Postal Service may issue an order which--
          ``(1) directs any postmaster, to whom any mailing originating 
        with such person or his representative is tendered for 
        transmission through the mails (other than a mailing that 
        consists only of one or more sealed letters), to refuse to 
        accept any such mailing, unless such person or his 
        representative first establishes to the satisfaction of the 
        postmaster that the mailing does not contain any matter which 
        is nonmailable under this section; and
          ``(2) requires the person or his representative to cease and 
        desist from mailing any mail matter which is nonmailable under 
        this section.
  ``(d) Prima Facie Evidence of Purpose.--For the purposes of this 
section, the repeated mailing of matter which is nonmailable under this 
section by any person or the advertisement by any person that the 
person will mail cigarettes, smokeless tobacco, or roll-your-own 
tobacco in return for payment shall constitute prima facie evidence 
that such person is engaged, for commercial or money-making purposes, 
in the mailing of matter which is nonmailable under this section.
  ``(e) Coordination of Efforts.--In the enforcement of this section, 
the Postal Service shall cooperate and coordinate its efforts with 
related activities of any other Federal agency or of any State or local 
government, whenever appropriate.
  ``(f) Actions by States Relating to Certain Tobacco Products.--
          ``(1) Authority of states.--Whenever the attorney general of 
        a State (or an official or agency of a State or local 
        government designated by the State) has reason to believe that 
        any person has engaged or is engaging in mailings to residents 
        of that State in violation of subsection (a)(2)(A), the State 
        (or designee) may bring, in an appropriate district court of 
        the United States, a civil action to enjoin such mailings, to 
        carry out paragraphs (1) and (4) of subsection (b), or to 
        obtain such other relief as the court may deem appropriate.
          ``(2) Rights of the postal service.--The State (or designee) 
        shall serve prior written notice of any action under paragraph 
        (1) upon the Postal Service and provide the Postal Service with 
        a copy of its complaint, except in any case where such prior 
        notice is not feasible, in which case the State (or designee) 
        shall serve such notice immediately upon instituting such 
        action. The Postal Service, in accordance with section 
        409(g)(2), shall have the right (A) to intervene in the action, 
        (B) upon so intervening, to be heard on all matters arising 
        therein, and (C) to file petitions for appeal.
          ``(3) Effect on state court proceedings.--Nothing contained 
        in this section shall be construed to prohibit an authorized 
        State official from proceeding in State court on the basis of 
        an alleged violation of any general civil or criminal statute 
        of such State.
          ``(4) Limitation.--Whenever the Postal Service institutes a 
        civil action for violation of subsection (a)(2)(A), no State 
        may, during the pendency of such action instituted by the 
        Postal Service, subsequently institute a separate civil action 
        for any violation of subsection (a)(2)(A) against any defendant 
        named in the Postal Service's complaint.
  ``(g) Definitions.--For purposes of this section--
          ``(1) the terms `cigarette' and `roll-your-own-tobacco' have 
        the meanings given them by section 5702 of the Internal Revenue 
        Code of 1986;
          ``(2) the term `smokeless tobacco' has the meaning given such 
        term by section 2341 of title 18; and
          ``(3) the term `State' includes the District of Columbia, the 
        Commonwealth of Puerto Rico, and the Virgin Islands.''.
  (b) Administrative Subpoenas.--Section 3016(a) of title 39, United 
States Code, is amended in paragraphs (1)(A) and (2) by inserting 
``3002b or'' before ``3005(a)''.
  (c) Enforcement of Postal Service Orders.--Section 3012 of title 39, 
United States Code, is amended--
          (1) in subsection (a)--
                  (A) in paragraph (1), by striking ``section 
                3005(a)(1) or'' and inserting ``section 3002b(c)(1), 
                3005(a)(1), or''; and
                  (B) in paragraph (2), by inserting ``3002b(c)(2) or'' 
                before ``3005(a)(3)'';
          (2) in subsection (c), by inserting ``3002b(c) or'' before 
        ``3005(a)'' each place it appears; and
          (3) in subsection (f), by inserting ``3002b(c) or'' before 
        ``3005'' each place it appears.
  (d) Semiannual Reports.--Section 3013 of title 39, United States 
Code, is amended--
          (1) in paragraph (1), by inserting ``3002b(b) or'' before 
        ``3005''; and
          (2) in paragraph (3), by striking ``section 3007 of this 
        title'' and inserting ``section 3002b(c) or section 3007, 
        respectively,''.
  (e) Clerical Amendment.--The table of sections for chapter 30 of 
title 39, United States Code, is amended by inserting after the item 
relating to section 3002a the following:

``3002b. Nonmailability of certain tobacco products.''.

  (f) Effective Dates.--
          (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall take effect on the 60th 
        day after the date of the enactment of this Act, and shall 
        apply with respect to any mail matter mailed on or after such 
        60th day.
          (2) Semiannual reports.--The amendments made by subsection 
        (d) shall apply beginning with the report submitted for the 
        reporting period in which occurs the 60th day after the date of 
        the enactment of this Act.

SEC. 2. TECHNICAL CORRECTION.

  (a) In General.--Sections 3007(a)(1), 3012(b)(1), and 3018(f)(1) of 
title 39, United States Code, are amended by striking ``409(d)'' and 
inserting ``409(g)(2)''.
  (b) Effective Date.--The amendments made by subsection (a) shall take 
effect as if included in the enactment of the Postal Accountability and 
Enhancement Act (Public Law 109-435).

                          Purpose and Summary

    H.R. 5912 was introduced by Rep. John McHugh on April 29, 
2008. This bill makes cigarettes and certain other tobacco 
products nonmailable through the U.S. Postal Service (USPS).

                  Background and Need for Legislation

    There are an estimated 700 websites that sell cigarettes to 
U.S. consumers, with at least half based in foreign countries. 
Because virtually all of these websites lack any meaningful age 
verification and make no effort to block sales to youth, they 
give minors ready access to cigarettes and other tobacco 
products. In addition, the vast majority of Internet cigarette 
sales evade payment of state and local taxes, making cigarettes 
available at below market prices, which increases use, 
especially among youth. Internet sites can also provide a sales 
network for counterfeit and other smuggled cigarettes. States 
have made many efforts to stem this market, including passing 
new laws prohibiting or restricting Internet cigarette and 
other tobacco product sales and entering into special 
agreements with the major private carriers (United Parcel 
Service, Federal Express, and DHL) in which the carriers agreed 
not to make deliveries to consumers for illegally operating 
Internet sellers. Nevertheless, illegally operating Internet 
sellers are avoiding these restrictions, sending as much as 90% 
of mail-order cigarettes through the United States Postal 
Service (USPS).
    On April 24, 2008, the Subcommittee on Federal Workforce, 
Postal Service, and the District of Columbia held a hearing to 
discuss the transporting of tobacco products through the USPS. 
Witnesses at the hearing testified about the pressing need to 
make cigarettes nonmailable. Connecticut Attorney General 
Richard Blumenthal described the current ability of online 
shippers to send cigarettes through the USPS as a significant 
barrier to efforts to curb youth smoking and to overall anti-
smoking public health initiatives. He also discussed how such 
mailings usually involve tax evasion. Bill Corr, Executive 
Director of the Campaign for Tobacco Free Kids, described the 
role of the USPS as the key delivery pathway for children 
ordering cigarettes online. Eric Proshansky of the New York 
City Law Department described state and city efforts to curb 
the delivery of cigarettes to youth, and stated that giving 
states a civil right of action to enforce a nonmailability 
statute would greatly enhance enforcement. Finally, USPS Vice 
President and General Counsel Mary Anne Gibbons testified that 
if Congress passes a law making cigarettes nonmailable, the 
USPS will cooperate with all other relevant state and federal 
agencies in its enforcement.
    H.R. 5912 amends the U.S. Code to make cigarettes, 
smokeless tobacco, and roll-your-own tobacco nonmailable 
products. It gives the USPS tools for enforcement, including 
the ability to issue orders against those who violate the law 
for commercial or money-making purposes. The bill also creates 
a right of action for states that allows them to assist in 
enforcement of this new law.

                          Legislative History

    H.R. 5912 was introduced on April 29, 2008, and referred to 
the Committee on Oversight and Government Reform. On April 24, 
2008, the Subcommittee on Federal Workforce, Postal Service, 
and the District of Columbia held a legislative hearing on a 
draft version of this bill. The witnesses were Richard 
Blumenthal, Attorney General, Connecticut; Bill Corr, Executive 
Director, Campaign for Tobacco Free Kids; Eric Proshansky, 
Deputy Chief of the Division of Affirmative Litigation, New 
York City Law Department; and Mary Anne Gibbons, Vice President 
and General Counsel, USPS. On April 29, 2008, the Subcommittee 
considered H.R. 5912 and approved the bill by voice vote. The 
full Committee considered H.R. 5912 on May 1, 2008, and 
favorably ordered H.R. 5912 to be reported, as amended, by a 
voice vote.

                           Section-by-Section


Section 1: Nonmailability of certain tobacco products

    Subsection (a): This subsection makes cigarettes, smokeless 
tobacco, and roll-your-own tobacco nonmailable items in the 
U.S. Code. It sets a civil penalty of up to $100,000 per 
violation, requires the USPS to hold a hearing prior to 
determining if a violation has occurred, and describes factors 
the USPS should consider in determining the amount of the 
penalty.
    In addition, this subsection permits the USPS to bring a 
civil action in federal court to enforce, this section and 
explains that penalties recovered are to be deposited in the 
U.S. Treasury.
    This subsection also permits the USPS to issue orders if 
the USPS is satisfied that evidence shows that a person 
violated this law for commercial or money-making purposes. Such 
orders would instruct postmasters on how to address subsequent 
mailings by the person, and require the person to cease and 
desist from mailing the products made nonmailable in this 
section. A Postal Service order under this subsection would be 
enforceable as described below in subsection (c). The USPS may 
consider repeated mailings of products nonmailable under this 
section, or the advertisement of these products, as evidence of 
violation for commercial or money-making purposes, unless such 
evidence is effectively rebutted.
    Moreover, this subsection instructs the USPS to cooperate 
with related activities of other federal agencies and state or 
local governments, such as investigations of illegal sellers of 
tobacco products, attempts to recover unpaid federal, state, or 
local taxes, or investigations of overseas sellers.
    Furthermore, this subsection grants a state (or its 
designee) the right to bring a federal civil action to enjoin 
the mailing of products made nonmailable by this Act to 
citizens of that state, and to enforce the payment of civil 
penalties to the U.S. Treasury. The state may also seek such 
other relief as the court may deem appropriate. The state must 
provide notice to the USPS before bringing such an action, or 
as soon as possible afterwards. The USPS has the right to 
intervene in any such action by a state. The bill clarifies 
that this section has no effect on the ability of authorized 
state officials to proceed in state court on state claims. It 
also clarifies that once the USPS institutes an action under 
this section, a state may not institute a separate civil action 
under this section against the same alleged violator.
    Subsection (b): This subsection gives the USPS the ability 
to issue administrative subpoenas in the enforcement of this 
law.
    Subsection (c): This subsection applies existing mechanisms 
for enforcement of USPS orders to this section. The violation 
of an order will result in civil penalties which the Postal 
Service can seek in district court. Any party against whom an 
order has been issued may seek judicial review of the order or 
at any stage of subsequent proceedings.
    Subsection (d): This subsection requires the USPS to submit 
to the USPS Inspector General semiannual reports on its 
enforcement of this section.
    Subsection (e): This subsection makes a clerical amendment.
    Subsection (f): The subsection states that the amendments 
made by this bill are to take effect on the 60th day after the 
day this bill is enacted.

Section 2: Technical correction

    This section makes a technical amendment.

                       Explanation of Amendments

    Chairman Waxman offered an amendment in the nature of a 
substitute with language clarifying, that in civil actions 
brought by a state (or its designee), the state may seek to 
enjoin the mailing of products made nonmailable by this Act to 
residents of that state, to enforce the payment of civil 
penalties to the U.S. Treasury, or to obtain such other relief 
as the court may deem appropriate. It struck from the 
introduced bill language specifying a type of relief a state 
could seek. The Waxman amendment was adopted by voice vote.
    Rep. Issa offered an amendment to strike the section of the 
bill giving states the right to bring civil actions to enjoin 
the mailing of products made nonmailable by this Act to 
residents of that state, to enforce the payment of civil 
penalties to the U.S. Treasury, or to obtain such other relief 
as the court may deem appropriate. The amendment failed by 
voice vote.
    Rep. Issa offered an amendment to strike the section of the 
bill giving states the right to bring civil actions to enjoin 
the mailing of products made nonmailable by this Act to 
residents of that state, to enforce the payment of civil 
penalties to the U.S. Treasury, or to obtain such other relief 
as the court may deem appropriate; and to replace that section 
with a provision permitting states to intervene in civil 
enforcement actions by the USPS and to seek relief in such 
actions in the amount of unpaid state and local taxes. The 
amendment failed on a vote of 5-20.
    Rep. Foxx offered and withdrew an amendment to create 
exceptions to the nonmailability provision for business-to-
business mailings, mailings from a retail consumer to a 
business, products sent for testing purposes, and from certain 
tobacco manufacturers using age verification systems.
    Rep. Foxx offered an amendment to prevent the Act from 
taking effect until 60 days after the USPS Inspector General 
makes a written finding that the Act will not contribute to 
demand for contraband tobacco products, to illicit trade in 
tobacco by organized crime, or to illicit trade of tobacco by 
terrorist groups. The amendment failed on a vote of 4-20. Rep. 
Sali offered and withdrew a second degree amendment to the Foxx 
amendment, requiring both the Inspector General of the USPS and 
the U.S. Attorney General to make the written findings.
    Rep. Issa offered an amendment that retained the right of 
states to bring civil actions, but eliminated states' ability 
to enjoin the mailing of products made nonmailable by this Act 
to residents of that state, or to enforce the payment of civil 
penalties to the U.S. Treasury. This amendment would permit 
states only the right to seek relief in the amount of unpaid 
state and local taxes. The amendment failed by voice vote.

                        Committee Consideration

    On Thursday, May 1, 2008, the Committee met in open session 
and favorably ordered H.R. 5912 to be reported to the House by 
a voice vote.


              Application of Law to the Legislative Branch

    Section 102(b)(3) of Public Law 104-1 requires a 
description of the application of this bill to the legislative 
branch where the bill relates to terms and conditions of 
employment or access to public services and accommodations. 
H.R. 5912 makes certain tobacco products nonmailable in the 
USPS. This bill does not relate to employment or access to 
public services and accommodations.

  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(l) of rule XIII and clause 
(2)(b)(l) of rule X of the Rules of the House of 
Representatives, the Committee's oversight findings and 
recommendations are reflected in the descriptive portions of 
this report, including the need to stop the sale of cigarettes 
to youth.

         Statement of General Performance Goals and Objectives

    In accordance with clause 3(c)(4) of rule XIII of the Rules 
of the House of Representatives, the Committee's performance 
goals and objectives are reflected in the descriptive portions 
of this report, including the importance of stopping the sale 
of cigarettes and other tobacco products to youth.

                   Constitutional Authority Statement

    Under clause 3(d)(1) of rule XIII of the Rules of the House 
of Representatives, the Committee must include a statement 
citing the specific powers granted to Congress to enact the law 
proposed by H.R. 5912. Article I, Section 8, Clause 18 of the 
Constitution of the United States grants the Congress the power 
to enact this law.

                     Federal Advisory Committee Act

    The Committee finds that the legislation does not establish 
or authorize the establishment of an advisory committee within 
the definition of 5 U.S.C. App., Section 5(b).

                       Unfunded Mandate Statement

    Section 423 of the Congressional Budget and Impoundment 
Control Act (as amended by Section 101(a)(2) of the Unfunded 
Mandates Reform Act, P.L. 104-4) requires a statement on 
whether the provisions of the report include unfunded mandates. 
The Committee finds that H.R. 5912 does not include unfunded 
mandates.

                         Earmark Identification

    H.R. 5912 does not include any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9(d), 9(e), or 9(f) of rule XXI.

                           Committee Estimate

    Clause 3(d)(2) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison by the 
Committee of the costs that would be incurred in carrying out 
H.R. 5912. However, clause 3(d)(3)(B) of that rule provides 
that this requirement does not apply when the Committee has 
included in its report a timely submitted cost estimate of the 
bill prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act.

     Budget Authority and Congressional Budget Office Cost Estimate

    With respect to the requirements of clause 3(c)(2) of rule 
XIII of the Rules of the House of Representatives and section 
308(a) of the Congressional Budget Act of 1974 and with respect 
to requirements of clause 3(c)(3) of rule XIII of the Rules of 
the House of Representatives and section 402 of the 
Congressional Budget Act of 1974, the Committee has received 
the following cost estimate for H.R. 5912 from the Director of 
the Congressional Budget Office:

                                                      May 20, 2008.
Hon. Henry A. Waxman,
Chairman, Committee on Oversight and Government Reform,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 5912, a bill to 
amend title 39, United States Code, to make cigarettes and 
certain other tobacco products nonmailable, and for other 
purposes.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Mark 
Grabowicz.
            Sincerely,
                                                   Peter R. Orszag.
    Enclosure.

H.R. 5912--A bill to amend title 39, United States Code, to make 
        cigarettes and certain other tobacco products nonmailable, and 
        for other purposes

    H.R. 5912 would make it illegal to use the Postal Service 
to mail cigarettes, smokeless tobacco, and roll-your-own 
tobacco. Violators of the bill's provisions would be subject to 
civil penalties of up to $100,000 for each violation. CBO 
estimates that implementing H.R. 5912 would have no significant 
cost to the federal government. Enacting the bill could affect 
direct spending and revenues, but CBO estimates that any such 
effects would not be significant.
    The Postal Service works with federal and state law 
enforcement officials to combat illegal sales of cigarettes and 
other tobacco products, including the sales of those products 
to minors and transactions in which the seller does not pay the 
required taxes. Enforcing the provisions of H.R. 5912 would be 
difficult because certain classes of mail, such as priority 
mail, are sealed against inspection and because over 200 
billion pieces of mail are delivered each year. Based on 
information from the Postal Service, CBO expects that the 
service would continue its current efforts relating to illegal 
tobacco sales and would enforce the bill's provisions as part 
of those ongoing activities. We do not expect that H.R. 5912 
would significantly affect Postal Service spending on such 
activities, which is classified as direct spending (off-
budget).
    Because violators of the provisions of H.R. 5912 would be 
subject to civil fines, the federal government might collect 
additional fines if the legislation is enacted. Civil fines are 
recorded as revenues in the federal budget. CBO expects that 
any additional revenues would not be significant because of the 
small number of cases likely to be affected.
    H.R. 5912 would impose two private-sector and 
intergovernmental mandates as defined in the Unfunded Mandates 
Reform Act (UMRA). First, the bill would prohibit the mailing 
of tobacco products in the United States through the Postal 
Service. Information from industry experts indicates that most 
companies that ship tobacco products, including two tribal 
governments, rarely use the Postal Service to distribute their 
products. Therefore, CBO estimates that the cost of the mandate 
would be small. Second, the bill would expand the authority of 
the Postmaster General to issue subpoenas. Private and public 
entities, if subpoenaed, would be required to provide 
testimony, documents, or other evidence. CBO expects that the 
Postmaster General would use that authority sparingly and that 
the costs to private and public entities to comply with such 
subpoenas would be small. Therefore, CBO estimates that the 
aggregate cost of the mandates would fall well below the annual 
thresholds established in UMRA for private-sector and 
intergovernmental mandates ($136 million and $68 million in 
2008, respectively, adjusted annually for inflation).
    The CBO staff contacts for this estimate are Mark Grabowicz 
(for federal costs); Elizabeth Cove (for the state and local 
impact); and Jacob Kuipers (for the private-sector impact). 
This estimate was approved by Peter H. Fontaine, Assistant 
Director for Budget Analysis.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

TITLE 39, UNITED STATES CODE

           *       *       *       *       *       *       *



PART IV--MAIL MATTER

           *       *       *       *       *       *       *


                     CHAPTER 30--NONMAILABLE MATTER

Sec.
3001.  Nonmailable matter.
     * * * * * * *
3002b.  Nonmailability of certain tobacco products.

           *       *       *       *       *       *       *


Sec. 3002b. Nonmailability of certain tobacco products

  (a) In General.--Cigarettes, smokeless tobacco, and roll-
your-own-tobacco--
          (1) are nonmailable matter;
          (2) shall not be--
                  (A) deposited in the mails; or
                  (B) carried or delivered through the mails; 
                and
          (3) shall be disposed of as the Postal Service 
        directs.
  (b) Civil Penalty.--
          (1) In general.--Any person who violates subsection 
        (a)(2)(A) shall be liable to the United States for a 
        civil penalty in an amount not to exceed $100,000 for 
        each violation.
          (2) Hearings.--
                  (A) In general.--The Postal Service may 
                determine that a person has violated subsection 
                (a)(2)(A) only after notice and an opportunity 
                for a hearing. Proceedings under this paragraph 
                shall be conducted in accordance with section 
                3001(m).
                  (B) Penalty considerations.--In determining 
                the amount of a civil penalty under this 
                paragraph, the Postal Service shall consider--
                          (i) the nature, circumstances, 
                        extent, and gravity of the violation;
                          (ii) with respect to the violator, 
                        the degree of culpability, ability to 
                        pay, and any history of prior 
                        violations; and
                          (iii) such other matters as justice 
                        may require.
          (3) Civil actions to collect.--The Postal Service may 
        bring a civil action in an appropriate district court 
        of the United States, in accordance with section 
        409(g)(2), to collect a civil penalty under this 
        section.
          (4) Disposition of amounts.--Amounts received in 
        payment of any civil penalties under this subsection 
        shall be deposited as miscellaneous receipts in the 
        Treasury of the United States.
  (c) Orders.--Upon evidence satisfactory to the Postal Service 
that any person is, for commercial or money-making purposes, 
engaged in the sending of mail matter which is nonmailable 
under this section, the Postal Service may issue an order 
which--
          (1) directs any postmaster, to whom any mailing 
        originating with such person or his representative is 
        tendered for transmission through the mails (other than 
        a mailing that consists only of one or more sealed 
        letters), to refuse to accept any such mailing, unless 
        such person or his representative first establishes to 
        the satisfaction of the postmaster that the mailing 
        does not contain any matter which is nonmailable under 
        this section; and
          (2) requires the person or his representative to 
        cease and desist from mailing any mail matter which is 
        nonmailable under this section.
  (d) Prima Facie Evidence of Purpose.--For the purposes of 
this section, the repeated mailing of matter which is 
nonmailable under this section by any person or the 
advertisement by any person that the person will mail 
cigarettes, smokeless tobacco, or roll-your-own tobacco in 
return for payment shall constitute prima facie evidence that 
such person is engaged, for commercial or money-making 
purposes, in the mailing of matter which is nonmailable under 
this section.
  (e) Coordination of Efforts.--In the enforcement of this 
section, the Postal Service shall cooperate and coordinate its 
efforts with related activities of any other Federal agency or 
of any State or local government, whenever appropriate.
  (f) Actions by States Relating to Certain Tobacco Products.--
          (1) Authority of states.--Whenever the attorney 
        general of a State (or an official or agency of a State 
        or local government designated by the State) has reason 
        to believe that any person has engaged or is engaging 
        in mailings to residents of that State in violation of 
        subsection (a)(2)(A), the State (or designee) may 
        bring, in an appropriate district court of the United 
        States, a civil action to enjoin such mailings, to 
        carry out paragraphs (1) and (4) of subsection (b), or 
        to obtain such other relief as the court may deem 
        appropriate.
          (2) Rights of the postal service.--The State (or 
        designee) shall serve prior written notice of any 
        action under paragraph (1) upon the Postal Service and 
        provide the Postal Service with a copy of its 
        complaint, except in any case where such prior notice 
        is not feasible, in which case the State (or designee) 
        shall serve such notice immediately upon instituting 
        such action. The Postal Service, in accordance with 
        section 409(g)(2), shall have the right (A) to 
        intervene in the action, (B) upon so intervening, to be 
        heard on all matters arising therein, and (C) to file 
        petitions for appeal.
          (3) Effect on state court proceedings.--Nothing 
        contained in this section shall be construed to 
        prohibit an authorized State official from proceeding 
        in State court on the basis of an alleged violation of 
        any general civil or criminal statute of such State.
          (4) Limitation.--Whenever the Postal Service 
        institutes a civil action for violation of subsection 
        (a)(2)(A), no State may, during the pendency of such 
        action instituted by the Postal Service, subsequently 
        institute a separate civil action for any violation of 
        subsection (a)(2)(A) against any defendant named in the 
        Postal Service's complaint.
  (g) Definitions.--For purposes of this section--
          (1) the terms ``cigarette'' and ``roll-your-own-
        tobacco'' have the meanings given them by section 5702 
        of the Internal Revenue Code of 1986;
          (2) the term ``smokeless tobacco'' has the meaning 
        given such term by section 2341 of title 18; and
          (3) the term ``State'' includes the District of 
        Columbia, the Commonwealth of Puerto Rico, and the 
        Virgin Islands.

           *       *       *       *       *       *       *


Sec. 3007. Detention of mail for temporary periods

  (a)(1) In preparation for or during the pendency of 
proceedings under section 3005, the Postal Service may, under 
the provisions of section [409(d)] 409(g)(2), apply to the 
district court in any district in which mail is sent or 
received as part of the alleged scheme, device, lottery, gift 
enterprise, sweepstakes, skill contest, or facsimile check or 
in any district in which the defendant is found, for a 
temporary restraining order and preliminary injunction under 
the procedural requirements of rule 65 of the Federal Rules of 
Civil Procedure.

           *       *       *       *       *       *       *


Sec. 3012. Civil penalties

  (a) Any person--
          (1) who, through the use of the mail, evades or 
        attempts to evade the effect of an order issued under 
        [section 3005(a)(1) or] section 3002b(c)(1), 
        3005(a)(1), or 3005(a)(2) of this title;
          (2) who fails to comply with an order issued under 
        section 3002b(c)(2) or 3005(a)(3) of this title; or

           *       *       *       *       *       *       *

  (b)(1) Whenever, on the basis of any information available to 
it, the Postal Service finds that any person has engaged, or is 
engaging, in conduct described by paragraph (1), (2), or (3) of 
subsection (a), (c), or (d), the Postal Service may, under the 
provisions of section [409(d)] 409(g)(2) of this title, 
commence a civil action to enforce the civil penalties 
established by such subsection. Any such action shall be 
brought in the district court of the United States for the 
district in which the defendant resides or receives mail.

           *       *       *       *       *       *       *

  (c)(1) In any proceeding in which the Postal Service may 
issue an order under section 3002b(c) or 3005(a), the Postal 
Service may in lieu of that order or as part of that order 
assess civil penalties in an amount not to exceed $25,000 for 
each mailing of less than 50,000 pieces; $50,000 for each 
mailing of 50,000 to 100,000 pieces; with an additional $5,000 
for each additional 10,000 pieces above 100,000, not to exceed 
$1,000,000.
  (2) In any proceeding in which the Postal Service assesses 
penalties under this subsection the Postal Service shall 
determine the civil penalty taking into account the nature, 
circumstances, extent, and gravity of the violation or 
violations of section 3002b(c) or 3005(a), and with respect to 
the violator, the ability to pay the penalty, the effect of the 
penalty on the ability of the violator to conduct lawful 
business, any history of prior violations of such section, the 
degree of culpability and other such matters as justice may 
require.

           *       *       *       *       *       *       *

  (f) In any proceeding at any time under this section, the 
defendant shall be entitled as a defense or counterclaim to 
seek judicial review, if not already had, pursuant to chapter 7 
of title 5, of the order issued under section 3002b(c) or 3005 
of this title. However, nothing in this section shall be 
construed to preclude independent judicial review otherwise 
available pursuant to chapter 7 of title 5 of an order issued 
under section 3002b(c) or 3005 of this title.

Sec. 3013. Semiannual reports on investigative activities of the Postal 
                    Service

  The Postmaster General shall submit semiannual reports to the 
Inspector General summarizing the investigative activities of 
the Postal Service. One semiannual report shall be submitted 
for the reporting period beginning on October 1 and ending on 
March 31, and the other semiannual report shall be submitted 
for the reporting period beginning on April 1 and ending on 
September 30. Each such report shall be submitted within 1 
month (or such shorter length of time as the Inspector General 
may specify) after the close of the reporting period involved 
and shall include with respect to such reporting period--
          (1) a summary of any proceedings instituted under 
        section 3002b(b) or 3005 of this title, and the results 
        of those and of any other such proceedings decided, 
        settled, or otherwise concluded during such period;

           *       *       *       *       *       *       *

          (3) the number of applications for temporary 
        restraining orders or preliminary injunctions submitted 
        under [section 3007 of this title] section 3002b(c) or 
        section 3007, respectively, and, of those applications, 
        the number granted;

           *       *       *       *       *       *       *


Sec. 3016. Administrative subpoenas

  (a) Subpoena Authority.--
          (1) Investigations.--
                  (A) In general.--In any investigation 
                conducted under section 3002b or 3005(a), the 
                Postmaster General may require by subpoena the 
                production of any records (including books, 
                papers, documents, and other tangible things 
                which constitute or contain evidence) which the 
                Postmaster General considers relevant or 
                material to such investigation.

           *       *       *       *       *       *       *

          (2) Statutory proceedings.--In any statutory 
        proceeding conducted under section 3002b or 3005(a), 
        the Judicial Officer may require by subpoena the 
        attendance and testimony of witnesses and the 
        production of any records (including books, papers, 
        documents, and other tangible things which constitute 
        or contain evidence) which the Judicial Officer 
        considers relevant or material to such proceeding.

           *       *       *       *       *       *       *


Sec. 3018. Hazardous material

  (a) * * *

           *       *       *       *       *       *       *

  (f) Civil Actions to Collect.--
          (1) In general.--In accordance with section [409(d)] 
        409(g)(2), a civil action may be commenced in an 
        appropriate district court of the United States to 
        collect a civil penalty, clean-up costs, and damages 
        assessed under subsection (c).

           *       *       *       *       *       *       *


                             MINORITY VIEWS

    Thomas Jefferson once said that ``The natural progress of 
things is for liberty to yield and government to gain ground.'' 
While the intended purpose of this bill, to prevent minors from 
accessing certain tobacco products, is certainly something we 
can all agree upon, I fear that H.R. 5912 is another step in 
the natural progress to which Mr. Jefferson once referred.
    States have criminal laws in place to prevent minors from 
purchasing tobacco products and as a strong believer in this 
cause, I am a proud cosponsor of Congresswoman Blackburn's 
bill, H.R. 5513, the ``Stop Adolescent Smoking Without 
Excessive Bureaucracy Act of 2008.'' However, unlike her bill 
H.R. 5912 takes a questionable approach towards addressing the 
problem that could have unintended consequences. First, since 
the USPS would have to open packages to verify its contents, 
H.R. 5912 presents constitutional concerns involving the Fourth 
Amendment's protection against unreasonable search and 
seizures. Because of these criminal and constitutional 
concerns, it would certainly be more appropriately handled by 
the Judiciary Committee.
    As a practical matter, simple tasks such as mailing 
cigarettes to military service members overseas would be made 
illegal through this bill. As the USPS has made clear, the 
resources needed to search for tobacco products would have to 
be diverted from other priorities such as confiscating illicit 
drugs and child pornography. Furthermore, this bill would make 
illegal consumers' ability to seek refunds for tobacco products 
through the mail. Given the myriad of tobacco regulations 
throughout the country, this bill proposes making it illegal to 
ship samples to officials sanctioned to administer tests to 
ensure legal compliance. That is why I offered an amendment to 
allow for the mailing of tobacco products under exceptional 
circumstances and withdrew it after receiving assurances that 
these concerns would be addressed before floor consideration.
    As Founding Father James Wilson once said, ``Government, in 
my humble opinion, should be formed to secure and to enlarge 
the exercise of the natural rights of its members; and every 
government, which has not this in view, as its principal 
object, is not a government of the legitimate kind.'' H.R. 5912 
is an example of a move further from, not closer to, Mr. 
Wilson's description of the purpose of the federal government.

                                                     Virginia Foxx.