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S 1177 ES

To prevent tobacco smuggling, to ensure the collection of all tobacco taxes, and for other purposes.

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

SECTION 1. SHORT TITLE.

This Act may be cited as the `Prevent All Cigarette Trafficking Act' or `PACT Act'.

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

(a) DEFINITIONS- Section 1 of the Act of October 19, 1949 (15 U.S.C. 375; commonly referred to as the `Jenkins Act'), is amended--

(1) by striking paragraphs (1), (2), and (3) and inserting the following new paragraphs:

`(1) The term `attorney general', with respect to a State, means the attorney general or other chief law enforcement officer of the State, or the designee of that officer.

`(2) The term `cigarette' means--

`(A) any roll of tobacco wrapped in paper or in any substance not containing tobacco which is to be heated or burned;

`(B) any roll of tobacco wrapped in any substance containing tobacco that, because of its appearance, the type of tobacco used in the filler, or its packaging or labeling, is likely to be offered to, or purchased by, consumers as a cigarette described in subparagraph (A);

`(C) any roll of tobacco wrapped in any substance that because of its appearance, the type of tobacco used in the filler, or its packaging or labeling, is likely to be offered to, or purchased by, consumers as a cigarette; or

`(D) loose rolling tobacco that, because of its appearance, type, packaging, or labeling, is likely to be offered to, or purchased by, consumers as tobacco for making cigarettes.

`(3) The term `smokeless tobacco' means any finely cut, ground, powdered, or leaf tobacco that is intended to be placed in the oral or nasal cavity or otherwise consumed without being combusted.';

(2) in paragraph (5)--

(A) by inserting `, local, or Tribal' after `the State';

(B) by striking `administer the cigarette tax law' and inserting `collect the tobacco tax or administer the tax law'; and

(C) by inserting `, locality, or Tribe, respectively' after `a State'.

(3) by striking paragraph (6) and inserting the following new paragraph (6):

`(6) The term `delivery sale' means any sale of cigarettes or smokeless tobacco in interstate commerce to a consumer if--

`(A) the consumer submits the order for such sale by means of a telephone or other method of voice transmission, the mails, or the Internet or other online service, or the seller is otherwise not in the physical presence of the buyer when the request for purchase or order is made; or

`(B) the cigarettes or smokeless tobacco are delivered by use of a common carrier, private delivery service, or the mails, or the seller is not in the physical presence of the buyer when the buyer obtains personal possession of the delivered cigarettes or smokeless tobacco.'; and

(4) by adding at the end the following new paragraphs:

`(8) The term `delivery seller' means a person who makes a delivery sale.

`(9) The term `common carrier' means any person (other than a local messenger service or the United States Postal Service (as defined in section 102 of title 39, United States Code)) that holds itself out to the general public as a provider for hire of the transportation by water, land, or air of merchandise, whether or not the person actually operates the vessel, vehicle, or aircraft by which the transportation is provided, between a port or place and a port or place in the United States.

`(10) The term `interstate commerce' means commerce between a State and any place outside the State, commerce between a State and any Indian lands in the State, or commerce between points in the same State but though any place outside the State or through any Indian lands.

`(11) The term `person' means an individual, corporation, company, association, firm, partnership, society, State government, local government, Indian tribal government, governmental organization of such government, or joint stock company.

`(12) The term `State' means a State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, or any territory or possession of the United States.

`(13) The term `Indian Country' 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.

`(14) The term `Indian Tribe', `Tribe', or `Tribal' refers to an Indian tribe as defined in 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 (Public Law 103-454; 25 U.S.C. 479a-1).

`(15) The term `tobacco tax administrator', in the case of a State, local, or Tribal government, means the official of the government duly authorized to collect the tobacco tax or administer the tax law of the government.'.

(b) REPORTS TO STATE TOBACCO TAX ADMINISTRATORS- Section 2 of that 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 striking `or transfers' and inserting `, transfers, or ships';

(ii) by inserting `, locality, or Indian Country of an Indian Tribe' after `a State'; and

(iii) by striking `to other than a distributor licensed by or located in such State,';

(B) in paragraph (1)--

(i) by striking `administrator of the State' and inserting `administrators of the State and place'; and

(ii) by striking `; and' and inserting the following: `, as well as telephone numbers for each place of business, a principal electronic mail address, any website addresses, and the name, address, and telephone number of an agent in the State authorized to accept service on behalf of such person;';

(C) in paragraph (2), by striking `and the quantity thereof.' and inserting `the quantity thereof, and the name, address, and phone number of the person delivering the shipment to the recipient on behalf of the delivery seller, with all invoice or memoranda information relating to specific customers to be organized by city or town and by zip code; and'; and

(D) by adding at the end the following new paragraph:

`(3) with respect to each memorandum or invoice filed with a State under paragraph (2), also file copies of such memorandum or invoice with the tobacco tax administrators and chief law enforcement officers of the local governments and Indian Tribes operating within the borders of the State that apply their own local or Tribal taxes on cigarettes or smokeless tobacco.'; and

(3) in subsection (b)--

(A) by striking `(1)'; and

(B) by striking `, and (2)' and all that follows and inserting a period.

(c) REQUIREMENTS FOR DELIVERY SALES- That Act is further amended by inserting after section 2 the following new section:

`SEC. 2A. (a) With respect to delivery sales into a specific State and place, each delivery seller shall comply with--


`(1) the shipping requirements set forth in subsection (b);

`(2) the recordkeeping requirements set forth in subsection (c);

`(3) all State, local, Tribal, and other laws generally applicable to sales of cigarettes or smokeless tobacco as if such delivery sales occurred entirely within the specific State and place, including laws imposing--

`(A) excise taxes;

`(B) licensing and tax-stamping requirements; and

`(C) 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)(1) Each delivery seller shall include on the bill of lading included with the shipping package containing cigarettes or smokeless tobacco sold pursuant to such order 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) Any shipping package described in paragraph (1) that is not labeled in accordance with that paragraph shall be treated as non-deliverable matter by a common carrier or the United States Postal Service if the common carrier or the United States Postal Service, as the case may be, knows or should know the contents of the package.

`(c)(1) Each delivery seller shall keep a record of all delivery sales so made, including all of the information described in section 2(a)(2), organized by the State, and within such State, by the city or town and by zip code, into which such delivery sales are so made.

`(2) Records of delivery sales shall be kept under paragraph (1) in the year in which made and for the next four years.

`(3) Records kept under paragraph (1) shall be made available to tobacco tax administrators of the States, to local governments and Indian Tribes that apply their own local or Tribal taxes on cigarettes or smokeless tobacco, to the attorneys general of the States, to the chief law enforcement officers of such local governments and Indian Tribes, and to the Attorney General of the United States in order to ensure the compliance of persons making delivery sales with the requirements of this Act.

`(d)(1) Except as provided in paragraph (2), no cigarettes or smokeless tobacco may be delivered pursuant to a delivery sale in interstate commerce unless in advance of the delivery--


`(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 cigarette or smokeless tobacco are to be delivered has been paid to the local government; and

`(C) any required stamps or other indicia that such excise tax has been paid are properly affixed or applied to the cigarettes or smokeless tobacco.

`(2) 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)(1) Each State, and each local government or Indian Tribal government that levies a tax subject to subsection (a)(3), may compile a list of delivery sellers who are in compliance with this Act with respect to such State, locality, or Indian Tribe. If a State, local government, or Indian Tribe posts a list pursuant to this subsection that specifically refers to this subsection, no common carrier or other person may knowingly deliver cigarettes or smokeless tobacco to consumers in such State or locality or in the Indian Country of such Indian Tribe unless the delivery seller is on the list at the time of delivery.

`(2)(A) Each State, and each local government or Indian Tribal government that levies a tax subject to subsection (a)(3), may compile a list of delivery sellers who are not in compliance with this Act with respect to such State, locality, or Indian Tribe.

`(B) A State, locality, or Indian Tribal government may provide such a list to a common carrier, the United States Postal Service, or other person. Such a list shall be confidential, and a common carrier, the United States Postal Service, or other person that receives such a list shall maintain the confidentiality of such list.

`(C) If a State, local government, or Indian Tribal government provides such a list pursuant to this subsection that specifically refers to this subsection, no common carrier, the United States Postal Service, or other person may knowingly deliver any item to a consumer in such State or locality or in the Indian Country of such Indian Tribe for a delivery seller on such list unless the common carrier, the United States Postal Service, or person in good faith determines that the item does not include cigarettes or smokeless tobacco.

`(f) 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- Section 3 of that Act (15 U.S.C. 377) is amended--


(1) by inserting `(a)' before `Whoever';

(2) in subsection (a), as so designated--

(A) by inserting `(except for a State, local, or Tribal government)' after `this Act'; and

(B) by striking `shall be guilty of a misdemeanor and shall be fined not more than $1,000, or imprisoned not more than 6 months' and inserting `shall be guilty of a felony, fined under subchapter C of chapter 227 of title 18, United States Code, imprisoned not more than three years, or both'; and

(3) by adding at the end the following new subsection:

`(b)(1) Whoever violates any provision of this Act shall be subject to a civil penalty in an amount not to exceed the greater of--

`(A) $5,000 in the case of the first violation, or $10,000 for any other violation; or

`(B) for any violation, 2 percent of the gross sales of cigarettes or smokeless tobacco of such person during the one-year period ending on the date of the violation.

`(2) A civil penalty under paragraph (1) for a violation of this Act is in addition to any criminal penalty under subsection (a) for the violation.'.

(e) ENFORCEMENT- Section 4 of that Act (15 U.S.C. 378) is amended--


(1) by inserting `(a)' before `The United States district courts';

(2) in subsection (a), as so designated, by inserting before the period the following: `, and to provide other appropriate injunctive or equitable relief, including money damages, for such violations'; and

(3) by adding at the end the following new subsections:

`(b) The Attorney General of the United States shall administer and enforce the provisions of this Act.

`(c)(1)(A) A State, through its attorney general (or a designee thereof), or a local government or Indian Tribe that levies a tax subject to section 2A(a)(3), through its chief law enforcement officer (or a designee thereof), may bring an action in the United States district courts to prevent and restrain violations of this Act by any person (or by any person controlling such person) or to obtain any other appropriate relief from any person (or from any person controlling such person) for violations of this Act, including civil penalties, money damages, and injunctive or other equitable relief.

`(B) 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) 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 (or a designee thereof), 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 State Attorney, who shall take appropriate actions to enforce the provisions of this Act.

`(3)(A) Notwithstanding any other provision of law and subject to subparagraph (B), an amount equal to 50 percent of any criminal and civil penalties collected by the United States Government in enforcing the provisions of this Act shall be available to the Department of Justice for purposes of enforcing the provisions of this Act and other laws relating to contraband tobacco products.

`(B) Of the amount available to the Department under subparagraph (A), not less than 50 percent shall be made available only to the agencies and offices within the Department that were responsible for the enforcement actions in which the penalties concerned were imposed.

`(4) The remedies available under this subsection are in addition to any other remedies available under Federal, State, local, Tribal, or other law.

`(5) 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.

`(6) 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.

`(7) 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) Any person who holds a permit under section 5712 of the Internal Revenue Code of 1986 may bring an action in the United States district courts to prevent and restrain violations of this Act by any person (or by any person controlling such person) other than a State, local, or Tribal government.

`(e)(1) Any person who commences a civil action under subsection (d) shall inform the Attorney General of the United States of the action.

`(2) It is the sense of Congress that any attorney general of a State, or chief law enforcement officer of a locality or Tribe, who commences a civil action under this section should inform the Attorney General of the United States of the action.

`(f)(1) The Attorney General of the United States shall make available to the public, by posting such information on the Internet and by other means, information about all enforcement actions undertaken by the Attorney General or United States Attorneys, or reported to the Attorney General, under this section, including information on the resolution of such actions and, in particular, information on how the Attorney General and the United States Attorney have responded to referrals of evidence of violations pursuant to subsection (b)(2).

`(2) The Attorney General shall submit to Congress each year a report containing the information described in paragraph (1).'.

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

Section 1716 of title 18, United States Code, is amended--

(1) by redesignating subsections (j) and (k) as subsections (k) and (l), respectively; and

(2) by inserting after subsection (i) the following new subsection (j):

`(j)(1) Except as provided in paragraph (2), the transmission in the mails of any tobacco product, including cigarettes (as that term is defined in section 1(2) of the Act of October 19, 1949 (15 U.S.C. 375; commonly referred to as the `Jenkins Act')) and smokeless tobacco (as that term is defined in section 1(3) of that Act), is prohibited, and tobacco products are nonmailable and shall not be deposited in or carried through the mails.

`(2) Paragraph (1) shall apply only to States that are contiguous with at least one other State of the United States.'.

SEC. 4. PENAL PROVISIONS REGARDING TRAFFICKING IN CONTRABAND CIGARETTES OR SMOKELESS TOBACCO.

(a) THRESHOLD QUANTITY FOR TREATMENT AS CONTRABAND CIGARETTES- (1) Section 2341(2) of title 18, United States Code, is amended by striking `60,000 cigarettes' and inserting `10,000 cigarettes'.

(2) Section 2342(b) of that title is amended by striking `60,000' and inserting `10,000'.

(3) Section 2343 of that title is amended--


(A) in subsection (a), by striking `60,000' and inserting `10,000'; and

(B) in subsection (b), by striking `60,000' and inserting `10,000'.

(b) CONTRABAND SMOKELESS TOBACCO- (1) Section 2341 of that title is amended--

(A) in paragraph (4), by striking `and' at the end;

(B) in paragraph (5), by striking the period at the end and inserting a semicolon; and

(C) by adding at the end the following new paragraphs:

`(6) the term `smokeless tobacco' means any finely cut, ground, powdered, or leaf tobacco that is intended to be placed in the oral or nasal cavity or otherwise consumed without being combusted;

`(7) the term `contraband smokeless tobacco' means a quantity in excess of 500 single-unit consumer-sized cans or packages of smokeless tobacco, or their equivalent, that are in the possession of any person other than--

`(A) a person holding a permit issued pursuant to chapter 52 of the Internal Revenue Code of 1986 as manufacturer of tobacco products or as an export warehouse proprietor, a person operating a customs bonded warehouse pursuant to section 311 or 555 of the Tariff Act of 1930 (19 U.S.C. 1311, 1555), or an agent of such person;

`(B) a common carrier transporting such smokeless tobacco under a proper bill of lading or freight bill which states the quantity, source, and designation of such smokeless tobacco;

`(C) a person who--

`(i) is licensed or otherwise authorized by the State where such smokeless tobacco is found to engage in the business of selling or distributing tobacco products or, for smokeless tobacco found in Indian Country, is licensed or otherwise authorized by the Tribal government of such Indian Country to account for and pay smokeless tobacco taxes imposed by the Tribal government; and

`(ii) has complied with the accounting, tax, and payment requirements relating to such license or authorization with respect to such smokeless tobacco; or

`(D) an officer, employee, or agent of the United States or a State or a Tribe, or any department, agency, or instrumentality of the United States, a State (including any political subdivision of a State), or a Tribe (including any political subdivision of a Tribe), having possession of such smokeless tobacco in connection with the performance of official duties;'.

(2) Section 2342(a) of that title is amended by inserting `or contraband smokeless tobacco' after `contraband cigarettes'.

(3) Section 2343(a) of that title is amended by inserting `, or any quantity of smokeless tobacco in excess of 500 single-unit consumer-sized cans or packages,' before `in a single transaction'.

(4) Section 2344(c) of that title is amended by inserting `or contraband smokeless tobacco' after `contraband cigarettes'.

(5) Section 2345 of that title is amended by inserting `or smokeless tobacco' after `cigarettes' each place it appears.

(c) ADDITIONAL DEFINITIONAL MATTERS- Section 2341 of such title is further amended--


(1) in paragraph (2), as amended by subsection (a)(1) of this section--

(A) in the matter preceding subparagraph (A), by striking `State cigarette taxes in the State where such cigarettes are found, if the State' and inserting `State, local, or Tribal cigarette taxes in the State, locality, or Indian Country where such cigarettes are found, if the State, local or Tribal government';

(B) in subparagraph (C)(i), by inserting before the semicolon the following: `, or, for cigarettes found in Indian County, is licensed or otherwise authorized by the Tribal government of such Indian Country to account for and pay cigarette taxes imposed by the Tribal government'; and

(C) in subparagraph (D)--

(i) by inserting `or a Tribe' after `a State' the first place it appears; and

(ii) by striking `or a State (or any political subdivision of a State)' and inserting `, a State (or any political subdivision of a State), or a Tribe (including any political subdivision of a Tribe)';

(2) in paragraph (3), by inserting before the semicolon the following: `, or, for a carrier making a delivery entirely within Indian Country, under equivalent operating authority from the Indian Tribal government of such Indian Country'; and

(3) by adding at the end the following new paragraphs:

`(8) the term `Indian Country' 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

`(9) the term `Indian Tribe', `Tribe', or `Tribal' refers to an Indian tribe as defined in 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 (Public Law 103-454; 25 U.S.C. 479a-1).'.

(d) RECORDKEEPING, REPORTING, AND INSPECTION- Section 2343 of that title, as amended by this section, is further amended--

(1) in subsection (a)--

(A) in the matter preceding paragraph (1), by striking `only--' and inserting `such information as the Attorney General considers appropriate for purposes of enforcement of this chapter, including--'; and

(B) in the flush matter following paragraph (3), by striking the second sentence;

(2) by redesignating subsection (b) as subsection (c);

(3) by inserting after subsection (a) the following new subsection (b):

`(b) Any person who engages in a delivery sale, and who ships, sells, or distributes any quantity in excess of 10,000 cigarettes, or any quantity in excess of 500 single-unit consumer-sized cans or packages of smokeless tobacco, or their equivalent, within a single month, shall submit to the Attorney General, pursuant to rules or regulations prescribed by the Attorney General, a report that sets forth the following:

`(1) The person's beginning and ending inventory of cigarettes and cans or packages of smokeless tobacco (in total) for such month.

`(2) The total quantity of cigarettes and cans or packages of smokeless tobacco that the person received within such month from each other person (itemized by name and address).

`(3) The total quantity of cigarettes and cans or packages of smokeless tobacco that the person distributed within such month to each person (itemized by name and address) other than a retail purchaser.'; and

(4) by adding at the end the following new subsections:

`(d) Any report required to be submitted under this chapter to the Attorney General shall also be submitted to the Secretary of the Treasury and to the attorneys general and the tax administrators of the States from where the shipments, deliveries, or distributions both originated and concluded, and to the chief law enforcement officer and tax administrator of the Tribe for shipments, deliveries or distributions that originated or concluded on the Indian Country of the Indian Tribe.

`(e) In this section, the term `delivery sale' means any sale of cigarettes or smokeless tobacco in interstate commerce to a consumer if--


`(A) the consumer submits the order for such sale by means of a telephone or other method of voice transmission, the mails, or the Internet or other online service, or by any other means where the consumer is not in the same physical location as the seller when the purchase or offer of sale is made; or

`(B) the cigarettes or smokeless tobacco are delivered by use of the mails, common carrier, private delivery service, or any other means where the consumer is not in the same physical location as the seller when the consumer obtains physical possession of the cigarettes or smokeless tobacco.

`(f) In this section, the term `interstate commerce' means commerce between a State and any place outside the State, commerce between a State and any Indian lands in the State, or commerce between points in the same State but through any place outside the State or though any Indian lands.'.

(e) DISPOSAL OR USE OF FORFEITED CIGARETTES AND SMOKELESS TOBACCO- Section 2344(c) of that title, as amended by this section, is further amended by striking `seizure and forfeiture,' and all that follows and inserting `seizure and forfeiture, and any cigarettes or smokeless tobacco so seized and forfeited shall be either--


`(1) destroyed and not resold; or

`(2) used for undercover investigative operations for the detection and prosecution of crimes, and then destroyed and not resold.'.

(f) EFFECT ON STATE, LOCAL, AND TRIBAL LAW- Section 2345 of that title is amended--

(1) in subsection (a), by striking `a State to enact and enforce' and inserting `a State, local government, or Tribe to enact and enforce its own'; and

(2) in subsection (b), by striking `of States, through interstate compact or otherwise, to provide for the administration of State' and inserting `of State, local, or Tribal governments, through interstate compact or otherwise, to provide for the administration of State, local, or Tribal'.

(g) ENFORCEMENT- Section 2346 of that title is amended--

(1) by inserting `(a)' before `The Attorney General'; and

(2) by adding at the end the following new subsection:

`(b)(1) A State, through its attorney general, a local government or Indian Tribe, through its chief law enforcement officer (or a designee thereof), or any person who holds a permit under section 5712 of the Internal Revenue Code of 1986, may bring an action in the United States district courts to prevent and restrain violations of this chapter by any person (or by any person controlling such person), except that any person who holds a permit under section 5712 of the Internal Revenue Code of 1986 may not bring such an action against a State, local, or Tribal government.

`(2) A State, through its attorney general, or a local government or Indian Tribe, through its chief law enforcement officer (or a designee thereof), may in a civil action under paragraph (1) also obtain any other appropriate relief for violations of this chapter from any person (or by any person controlling such person), including civil penalties, money damages, and injunctive or other equitable relief. Nothing in this chapter 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 chapter, or otherwise to restrict, expand, or modify any sovereign immunity of a State or local government or Indian Tribe.

`(3) The remedies under paragraphs (1) and (2) are an addition to any other remedies under Federal, State, local, Tribal, or other law.

`(4) Nothing in this chapter 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.

`(5) Nothing in this chapter 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.

`(6) Nothing in this chapter 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.'.

(h) CONFORMING AND CLERICAL AMENDMENTS- (1) The section heading for section 2343 of that title is amended to read as follows:

`Sec. 2343. Recordkeeping, reporting, and inspection'.

(2) The section heading for section 2345 of such title is amended to read as follows:

`Sec. 2345. Effect on State, Tribal, and local law'.

(3) The table of sections at the beginning of chapter 114 of that title is amended--

(A) by striking the item relating to section 2343 and inserting the following new item:

`2343. Recordkeeping, reporting, and inspection.';

and

(B) by striking the item relating to section 2345 and insert the following new item:

`2345. Effect on State, Tribal, and local law.'.

(4)(A) The heading for chapter 114 of that title is amended to read as follows:

`CHAPTER 114--TRAFFICKING IN CONTRABAND CIGARETTES AND SMOKELESS TOBACCO'.

(B) The table of chapters at the beginning of part I of that title is amended by striking the item relating to section 114 and inserting the following new item:

2341'.

SEC. 5. COMPLIANCE WITH MODEL STATUTE OR QUALIFYING STATUTE.

(a) IN GENERAL- A Tobacco Product Manufacturer or importer may not sell in, deliver to, or place for delivery sale, or cause to be sold in, delivered to, or placed for delivery sale in, a State that is a party to the Master Settlement Agreement any cigarette manufactured by a Tobacco Product Manufacturer that is not in full compliance with the terms of the Model Statute or Qualifying Statute enacted by such State requiring funds to be placed into a qualified escrow account under specified conditions, or any regulations promulgated pursuant to such terms.

(b) JURISDICTION TO PREVENT AND RESTRAIN VIOLATIONS- (1) The United States district courts shall have jurisdiction to prevent and restrain violations of subsection (a) in accordance with this subsection.

(2) A State, through its attorney general, may bring an action in the United States district courts to prevent and restrain violations of subsection (a) by any person (or by any person controlling such person).

(3) In any action under paragraph (2), a State, through its attorney general, shall be entitled to reasonable attorney fees from a person found to have willfully and knowingly violated subsection (a).

(4) The remedy available under paragraph (2) is in addition to any other remedies available under Federal, State, or other law.

(5) Nothing in this subsection shall be construed to prohibit an authorized State official from proceeding in State court or taking other enforcement actions on the basis of an alleged violation of State or other law.

(6) The Attorney General may administer and enforce subsection (a).

(c) DEFINITIONS- In this section:


(1) MASTER SETTLEMENT AGREEMENT- The term `Master Settlement Agreement' means the agreement executed November 23, 1998, by the Attorneys General of 46 States, the District of Columbia, the Commonwealth of Puerto Rico, and four Territories of the United States, on the one hand, and certain tobacco manufacturers on the other hand.

(2) TOBACCO PRODUCT MANUFACTURER- The term `Tobacco Product Manufacturer' has the meaning given that term in section II(uu) of the Master Settlement Agreement.

(3) IMPORTER- The term `importer' means each of the following:

(A) Any person in the United States to whom non-tax-paid tobacco products manufactured in a foreign country, Puerto Rico, the Virgin Islands, or a possession of the United States are shipped or consigned.

(B) Any person who removes cigars or cigarettes for sale or consumption in the United States from a customs bonded manufacturing warehouse.

(C) Any person who smuggles or otherwise unlawfully brings tobacco products into the United States.

(4) MODEL STATUTE; QUALIFYING STATUTE- The terms `Model Statute' and `Qualifying Statute' means a statute as defined in section IX(d)(2)(e) of the Master Settlement Agreement.

(5) DELIVERY SALE- The term `delivery sale' means any sale of cigarettes or smokeless tobacco in interstate commerce to a consumer if--

(A) the consumer submits the order for such sale by means of a telephone or other method of voice transmission, the mails, or the Internet or other online service, or the seller is otherwise not in the physical presence of the buyer when the request for purchase or order is made; or

(B) the cigarettes or smokeless tobacco are delivered by use of a common carrier, private delivery service, or the mails, or the seller is not in the physical presence of the buyer when the buyer obtains personal possession of the delivered cigarettes or smokeless tobacco.

(6) INTERSTATE COMMERCE- The term `interstate commerce' means commerce between a State and any place outside the State, commerce between a State and any Indian lands in the State, or commerce between points in the same State but through any place outside the State or through any Indian lands.

SEC. 6. UNDERCOVER CRIMINAL INVESTIGATIONS OF THE BUREAU OF ALCOHOL, TOBACCO, FIREARMS, AND EXPLOSIVES.

(a) IN GENERAL- (1) Commencing as of the date of the enactment of this Act and without fiscal year limitation, the authorities in section 102(b) of the Department of Justice and Related Agencies Appropriations Act, 1993 (title I of Public Law 102-395; 106 Stat. 1838) shall be available to the Bureau of Alcohol, Tobacco, Firearms, and Explosives for undercover investigative operations of the Bureau which are necessary for the detection and prosecution of crimes against the United States.

(2) For purposes of the exercise of the authorities referred to in paragraph (1) by the Bureau, a reference in such section 102(b) to the Federal Bureau of Investigation shall be deemed to be a reference to the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and a reference to the Director of the Federal Bureau of Investigation shall be deemed to be a reference to the Director of the Bureau of Alcohol, Tobacco, Firearms, and Explosives.

(b) LIMITATIONS IN APPROPRIATIONS ACTS- The exercise of the authorities referred to in subsection (a)(1) by the Bureau of Alcohol, Tobacco, Firearms, and Explosives shall be subject to the provisions of appropriations Acts.

SEC. 7. INSPECTION BY BUREAU OF ALCOHOL, TOBACCO, FIREARMS, AND EXPLOSIVES OF RECORDS OF CERTAIN CIGARETTE AND SMOKELESS TOBACCO SELLERS.

(a) IN GENERAL- 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 (b) for the purposes of inspecting--

(1) any records or information required to be maintained by such person under the provisions of law referred to in subsection (d); or

(2) any cigarettes or smokeless tobacco kept or stored by such person at such premises.

(b) COVERED PERSONS- A person described in this subsection is any person who engages in a delivery sale, and who ships, sells, distributes, or receives any quantity in excess of 10,000 cigarettes, or any quantity in excess of 500 single-unit consumer-sized cans or packages of smokeless tobacco, within a single month.

(c) RELIEF- (1) The district courts of the United States shall have the authority in a civil action under this subsection to compel inspections authorized by subsection (a).

(2) Whoever violates subsection (a) or an order issued pursuant to paragraph (1) shall be subject to a civil penalty in an amount not to exceed $10,000 for each violation.

(d) COVERED PROVISIONS OF LAW- The provisions of law referred to in this subsection are as follows:


(1) The Act of October 19, 1949 (15 U.S.C. 375; commonly referred to as the `Jenkins Act').

(2) Chapter 114 of title 18, United States Code.

(3) This Act.

(e) DELIVERY SALE DEFINED- In this section, the term `delivery sale' has the meaning given that term in 2343(e)(1) of title 18, United States Code, as amended by section 4(b)(3) of this Act.

SEC. 8. COMPLIANCE WITH TARIFF ACT OF 1930.

(a) INAPPLICABILITY OF EXEMPTIONS FROM REQUIREMENTS FOR ENTRY OF CERTAIN CIGARETTES- Subsection (b)(1) of section 802 of the Tariff Act of 1930 (19 U.S.C. 1681a) is amended by adding at the end the following new sentence: `The preceding sentence shall not apply to any cigarettes sold in connection with a delivery sale (as that term is defined in section 1 of the Act of October 19, 1949 (15 U.S.C. 375; commonly referred to as the `Jenkins Act')).'.

(b) STATE AND TRIBAL ACCESS TO CUSTOMS CERTIFICATIONS- Section 802 of that Act is further amended by adding at the end the following new subsection:

`(d) STATE AND TRIBAL ACCESS TO CUSTOMS CERTIFICATIONS- A State, through its attorney general, and an Indian tribe (as that term is defined in the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b(e)) through its chief law enforcement officer, shall be entitled to obtain copies of any certification required pursuant to subsection (c) directly--


`(1) upon request to the agency of the United States responsible for collecting such certification; or

`(2) upon request to the importer, manufacturer, or authorized official of such importer or manufacturer.'.

(c) ENFORCEMENT PROVISIONS- Section 803 of such Act (19 U.S.C. 1681b) is amended--

(1) in subsection (b)--

(A) in the first sentence--

(i) by inserting `any of' before `the United States' the first and second places it appears; and

(ii) by inserting before the period the following: `, to any State in which such tobacco product, cigarette papers, or tube was imported, or to the Indian Tribe of any Indian Country (as that term is defined in section 1151 of title 18, United States Code) in which such tobacco product, cigarette papers, or tube was imported'; and

(B) in the second sentence, by inserting `, or to any State or Indian Tribe,' after `the United States'; and

(2) by adding at the end the following new subsection:

`(c) ACTIONS BY STATES AND OTHERS-

`(1) IN GENERAL- Any person who holds a permit under section 5712 of the Internal Revenue Code of 1986 may bring an action in the United States district courts to prevent and restrain violations of this title by any person (or by any person controlling such person), other than by a State, local, or Tribal government.

`(2) RELIEF FOR STATE, LOCAL, AND TRIBAL GOVERNMENTS- A State, through its attorney general, or a local government or Tribe through its chief law enforcement officer (or a designee thereof), may in a civil action under this title to prevent and restrain violations of this title by any person (or by any person controlling such person) or to obtain any other appropriate relief for violations of this title by any person (or from any person controlling such person), including civil penalties, money damages, and injunctive or other equitable relief.

`(3) CONSTRUCTION GENERALLY-

`(A) IN GENERAL- 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 this title or to otherwise restrict, expand, of modify any sovereign immunity of a State local government or Indian Tribe.

`(B) CONSTRUCTION WITH OTHER RELIEF- The remedies available under this subsection are in addition to any other remedies available under Federal, State, local, Tribal, or other law.

`(4) CONSTRUCTION WITH FORFEITURE PROVISIONS- Nothing in this subsection shall be construed to require a State or Indian Tribe to first bring an action pursuant to paragraph (1) when pursuing relief under subsection (b).

`(d) CONSTRUCTION WITH OTHER AUTHORITIES-

`(1) STATE AUTHORITIES- Nothing in this title shall be construed to expand, restrict, or otherwise modify the right of an authorized State official from proceeding in State court, or taking other enforcement actions, on the basis of alleged violation of State or other law.

`(2) TRIBAL AUTHORITIES- Nothing in this title shall be construed to expand, restrict, or otherwise modify the right of an authorized Indian Tribal government official from proceeding in Tribal court, or taking other enforcement actions, on the basis of alleged violation of Tribal law.

(d) INCLUSION OF SMOKELESS TOBACCO- (1) Sections 802 and 803(a) of such Act are further amended by inserting `or smokeless tobacco products' after `cigarettes' each place it appears.

(2) Section 802 of such Act is further amended--


(A) in subsection (a)--

(i) in paragraph (1), by inserting `or section 4 of the Comprehensive Smokeless Tobacco Health Education Act of 1986 (15 U.S.C. 4403), respectively' after `section 7 of the Federal Cigarette Labeling and Advertising Act (15 U.S.C. 1335a)';

(ii) in paragraph (2), by inserting `or section 3 of the Comprehensive Smokeless Tobacco Health Education Act of 1986 (15 U.S.C. 4402), respectively,' after `section 4 of the Federal Cigarette Labeling and Advertising Act (15 U.S.C. 1333)'; and

(iii) in paragraph (3), by inserting `or section 3(c) of the Comprehensive Smokeless Tobacco Health Education Act of 1986 (15 U.S.C. 4402(c)), respectively,' after `section 4(c) of the Federal Cigarette Labeling and Advertising Act (15 U.S.C. 1333(c))';

(B) in subsection (b)--

(i) in the paragraph caption of paragraph (1), by inserting `OR SMOKELESS TOBACCO' after `CIGARETTES'; and

(ii) in the paragraph caption of paragraphs (2) and (3), by inserting `OR SMOKELESS TOBACCO' after `CIGARETTES'; and

(C) in subsection (c)--

(i) in the subsection caption, by inserting `OR SMOKELESS TOBACCO' after `CIGARETTE';

(ii) in paragraph (1), by inserting `or section 4 of the Comprehensive Smokeless Tobacco Health Education Act of 1986 (15 U.S.C. 4403), respectively' after `section 7 of the Federal Cigarette Labeling and Advertising Act (15 U.S.C. 1335a)';

(iii) in paragraph (2)(A), `or section 3 of the Comprehensive Smokeless Tobacco Health Education Act of 1986 (15 U.S.C. 4402), respectively,' after `section 4 of the Federal Cigarette Labeling and Advertising Act (15 U.S.C. 1333)'; and

(iv) in paragraph (2)(B), by inserting `or section 3(c) of the Comprehensive Smokeless Tobacco Health Education Act of 1986 (15 U.S.C. 4402(c)), respectively' after `section 4(c) of the Federal Cigarette Labeling and Advertising Act (15 U.S.C. 1333(c))'.

(3) Section 803(c) of such Act, as amended by subsection (b)(1) of this section, is further amended by inserting `, or any smokeless tobacco product,' after `or tube' the first place it appears.

(4)(A) The heading of title VIII of such Act is amended by inserting `AND SMOKELESS TOBACCO' after `CIGARETTES'.

(B) The heading of section 802 of such Act is amended by inserting `AND SMOKELESS TOBACCO' after `CIGARETTES'.

SEC. 9. EXCLUSIONS REGARDING INDIAN TRIBES AND TRIBAL MATTERS.

(a) IN GENERAL- Nothing in this Act or the amendments made by this Act is intended nor shall be construed to affect, amend, or modify--

(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 the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b(e)) relating to the collection of taxes on cigarettes or smokeless tobacco sold in Indian Country (as that term is defined section 1151 of title 18, United States Code);

(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 existing Federal 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 or tribal members or in Indian Country;

(4) any existing Federal law, including Federal common law and treaties, regarding State jurisdiction, or lack thereof, over any Tribe, tribal members or tribal reservations; and

(5) any existing 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- Notwithstanding any other provision of this Act, the provisions of this Act are not intended and shall not 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 is intended to prohibit, limit, or restrict enforcement by the Attorney General of the United States of the provisions herein within Indian Country.

(e) AMBIGUITY- Any ambiguity between the language of this section or its application, and any other provision of this Act shall be resolved in favor of this section.

SEC. 10. EFFECTIVE DATE.

(a) IN GENERAL- Except as provided in subsection (b), this Act shall take effect 90 days after the date of the enactment of this Act.

(b) BATFE AUTHORITY-


(1) IN GENERAL- Sections 6 and 7 shall take effect on the date of the enactment of this Act.

(2) DEFINITION- For purposes of section 7, the definition of delivery sale in section 2343(e)(1) of title 18, United States Code, as amended by section 4(b)(3) of this Act, shall take effect on the date of the enactment of this Act.

Passed the Senate December 9, 2003.

Attest:

Secretary.

To prevent tobacco smuggling, to ensure the collection of all tobacco taxes, and for other purposes.